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Offical Statement - June 9, 2016 01;1'10 At.,se,A TEM DATED JuNE 9,ZOili Ratings: Alloody's: A At" (Sec"OTIIER 1bl FO RIV1 A'l'ION - 1,41F.,'W ISSUE Boolc-Fiihry-Ouly RATiN0sI"herein hi ('iv opinion r'Y Bond Cuunsd, iniemsf on the Obligaiienrs be excludable on gross income far ftdered income tax purposes under „watirtes, reputations, published rulings and cortr,r decisions existing on the dote thereqi, ,vubject to the matters dorribecl unrier ,r1,,/,4 TIERS"herein, including the r.rtternertive minimum lax on corporations. CITY OF COLLEGE STATION,TEXAS (a Hoine-Rtale City located in Brazos County,Texas) ,1i40,890„000 ENE RA 1 )13.11,1G N $25,32000 IN't PRO V FM EN11'AND, F,WI VIC A rE S OF OBLII A.TION RE FUN DING BONDS lFlR1l ft.IS 2016 SERI ES 2(110 Dated Date: July 1,2016 Due: February 15,as shown on illside cover Interest Accrual Date: Date of Delivery The $^10,ti90,000 City of College Slahon, Ti General Obligation luiprovernein and Refunding Bonas„ Series 2016 Olio"Bonds");and the $25,720,,000 City a College Station,Texas Certilicales of Obligation, Series 2016(the "Certificates")tire [wing issued by the City of College Station,'leans(the"City")pursuant to the terms of two separate ordiatutecs adopted by the governing body of the City. In each of the ordinances, the City Council cif the City delegated authority to certain authorized officials of the City to finalize the pricing of the Obligations,'file Bonds arid the Certificates,are referred to herein collectively aim the"Obligations,- The Obligations are issuable only in fully registered form in the denomination of$5,000 principal amount cmc integral muttiples thereof, initially registered solely in the name of Cede&Co.,as registered owner and nominee for The Depository Trust Company("DTC"), New York, New York,. acting as securities depository for the Obligations, The Obligations initially will be available to purchasers in book- entry-tbmi only. So long as Cede &. (.'o. is the registered owner of the Obligations, as nominee for DTC, the Paying Agent/Registrar, initially"The Bank of New York Merlon Trust Company,N.A., Dallas„Texas(the"Paying Ageni/Registrar")will pay the principal of and. interest on the Obligations to Ccde& Co.,which will, in turn,remit such amounts to DTC participants for subsequent.disbursement to the beneficial owners of the Obligations. interest on the Bonds will accrue from the date of delivery, and will be payable February 15 and August 05 of each year commencing August 15, 2016 until maturity or prior redemption and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. Interest on the Certificates will accrue from the date tif delivery, and will be payable February 15 and August 15 of each year commencing February 15, 2017 until maturity or prior redemption and will be calculated on the basis of a 360-day year consisting of twelve 30-day months.(see"THE OBLIGATIONS-GENLRAI.INS(RIPTION") The City reserves the right,at its option,to redeem Obligations of either series having stated maturities on and after February 15,2027, in whole or in part in principal amounts of$5,000 or any integral multiple thereof, on February 15, 2(126,or any date thereafler,at the par value thereof plus accrued interest to the date of redemption. (see"THE OBLIGATIONS - OPTIoNAT RnirLiktimoN"), Additionally, the Bonds maturing on February IS,2036(the"Term Bonds")are subject to mand.atory redemption prior to maturity as&set ibed herein, (see "THE OBLIGATIONS-MANDATORY SINKING FUND REDEMPTION"): SEE:MATURITY SCHEDULE,INTEREST RATES.AND'YIELDS ON INSIDE Coviiit. The Obligations are payable from annual ad valorem taxes levied against all taxable property in the City,within the legal limits prescribed by law, The Certificates are additionally payable from a subordinate lien on and pledge of$1,000 of the surplus revenues of the City's combined utility system(see"THE OBLIGATIONS-SECURITY AND SOURCE,of PA'ymENT,"and"- TAX RATE LavIrrATioN"), The Bonds and the Certificates are being offered by the City concurrently, under a common Official Statement, The Bonds and the Certificates:are separate and distinct securities being issued and sold independently except for the Official Statement,.and,while the Bonds and Certificates share certain common at each issue is separate from the other and should be reviewed and analyzed independently, including without limitation the dale of accrual and payment of interest for each series of the securities being offered, the redemption provisions and the tax treatment of interest for federal income tax purposes, The Obligations of each series mire offered for delivery, when issued, and received by the initial purchasers(die"Initial Purchasers')iind subject to the opinion of the Attorney General of the State of Texas and the opinion of McCall, Parkhurst& Horton Dallas,.'Texas, Bond Counsel liar the City (see "APPENDIX C - FoRms of OPtivioN's ur B.oND(TouNsti.."), It is expected' that. the Obligations will be available for delivery through the services of DTC on or about July 5, 201o. NI eV11„..41111," SIAllED11.11..,,ES $40,890000 4,;eiterii,1 Obligation Improvement and Refunding Bonds,'Series 2016 DIJC lilt 4:WS i DM 11A acsi Feb, 15. Principal Rine Yield CUSIP Feb, i 5 Princip a1 Rate 'Yield,.. CUSH'Im 201./ S 2,470,000 2,0001% 0,690% 194469 0 K.,5 2026 $4,250,000 5.000% 1,8001140 194469 171.13 2018 2,090,t WO 5,0001iI44 0.750% 19'4469 1)1,3 24127' 4,425,000 2,000% 2,000% 194469 DV) 2019 1,400,000 5,4100% 0.900% 1'4169 DM 1 202 II (;' 2,765,009 2.123114, 2.2009,4, I 94469 1)W9 2020 1473,000 3,0005 1.0300 V 94469 121,1319 2029°;" 455,000 :11,25011,,', 2.400% 194469 DX7 202 I 3,200,0041 5,000% I,1,60% 194,169 D94 2030 ' 465,000 2,3759/10 2,5001)4 I 94469 05r,5, 4022 3400„0041 5,000% 1,3000:14, 194469 DO2 2031 '" 475,000 '2„5001A:i 2,60010, 1 1,14469 072 2023 3,605,000 5.4.100N, 1,4100 I 94469 0101 21/32 (2) 490,,000 2.62,3"4 2,70011,4, 194469 EA 6 2024 3,795,000 5.000% 1.530% I 91469 OS)) ' 2033 ':') 505,000 3,000% 2.7501N, 1'94469 FBI 2025, 4,020,000 5,000`14, I,640'14 194469 DT6 2034 l'" 520,000 3.000% 2.800% 194469 E0(2 $1,085,000.3„41011414.Term Bonds Due February 15,2036(4);Priced to Yield 3,000%; CUSIP 194469 11;1F.8i" $25;720,000 Certificates of Obligation,Series 2016 Due Interest Due Interest Feb, 15 Principal Rate Yield CU,S1P M . Feb, 15 Principal Rate Yield CUSIP I" 2017 82,045,000 2,000% 0,620% 094469 FF5 2027 12) $1,08,5,000 4„000% 2.1)30% 194469 ER9 2018 1,025,000 5,000% 0,750% 194469 E03 2028 12) I,,1 I,5,000 2.000% 2.196% 194469 ES7 2019 1,085,000 5,1100% 0,9104'4 194469 EH 1 2029 1,140,000 2,250% 2.470% 194469 ET 5 2020 1,040,000 5,000% I.040% 194469 E.17 2030''2) I,I 65„000 2.375'14, 2.540',14, 194469 EU2 2021 1,1,95,000 5,000% 1.200% 194469 EK4 2031 (2) 1,200,000 3.000/ii 2.690% 194469 EVO 2022 1,260,000 5,000% 1.350% 194469 Eli2 2032'2) I„235,000 3.000%, 2.790% (94469 E WS 2023 1,315,000 5,000% 1.490% 194469 EM 0 2033 '2) 1,275,000 3,000'Ni 2.840'N, 194469 EX 6 2024 1,390,000 5.1100','4, 1.600% 194469 ENS. 2034 l'2) 1,310,000 3,000'1/0, 2.900114, 194469 EY4 2025 1,460,000 5.000% 1.700% 194469 EP,3 2035 1,350,01)0 3,0000/ii 2.950% 194469 EZ1 2,026 I,535,000 5.000% I.820% I 94469 UQ1, 20.36'''''' 1,395,(100 3,000% 3.000% 194469 FA (1) ('US II-'numbers have been assigned to the Obligations by CI(SIP Global Services,managed by S&P Capital IQ on behalf of the American Bankers Association, and are included solely for the convenience of the purchasers of the Obligations. Neither the Cily, the Financial Advisor nor the Initial Purchasers shall he responsible for the selection or correctness of the CUSIP numbers Sc)birth herein, (2) The City reserves the right,at its option,to redeem Obligations of either series having stated maturities on and after February 15,2027,in whole'or in part in principal amounts of$5„000 or any integral multiple thereof,on February 15,2026,or any date thereafter,at the per value'thereof plus accrued interest to the date of redemption, ii Thais(i/lir:ii,!,S'Ynt'ern o'nI, imhir,'IS rirehum s the rn1V,,parf;r'arul'thr.'d'lrpr.'rr,l'Ifys lrei to,does rrnr Cura11intle am of/a'r In.aerll or the vol citation of on oiler to Inn' in any turn i'/,f'lw tf to any person to whom.(1 is l iltorllrl Qa 111(1'lie I(lo l'l solicitation in ,,vafl-, No dealer,111•rr/'t'Y.„S'dr/C"1'pl'r'son ttr Other pr•r',o'Iii II ON Io'r"rl alvrlrrar"ra"rl fr'r n'P farotirn�f?1!" raflk�°or N r any r"f'pa'e:',5e°r rlarinrr rn'ha'c f1Nrnn dose contained in rlrr,r Official,Statement„ (midi. If givenr,,1'NV e,(le', Sco'h Jor/'ICC'rCA rrrlrrr'rnrAFarna or representations Inns,not 1',0'relied ap(n¢. 1 fordo In i r'irr Inns/' fi"arm ahr^(:'r4'u'and rs'lhet,'nlrr-r'e',S he'^1ir'r'eal ter Ire r'°,'Iinlsfa'. Inert south ire/irrnanliulr is not guaranteed OS fo The xrr¢u'rrura'airrrr se( ar'rre rrbtrnnc°nl„ accuracy err euxrlpkeli'norss coal is not to be aarnr,rtr'ln'rf as the promise1'(hi'I''i,rrxr'ra':rer'1,Jefiri.crrr`. 'F'Flis Official Statement I I1(10�rrrrs. in port„promise or rrrrn°a�r�ntr'c^cr estienrit s and nrr0NerS to t of opinion which in','nOl Arter'nded as /",/'To et, and no representation is made athecal'rm°a'•araron of"�such rs'einu rre.,^s and o'r .t`!r'aer'ra'^ors u opinions, or that they will be realized. CUS11'numbers hare been assigned irr this issue by CU,S'11'Global Services, rrrnl inc' included solely,I'iar the 0ernb'r'lr(i'0'e o/'f/n miners of the Ohligatirnr.r Neither the('rfr, the Financial 1dri.nr.rr nor the initial Purchasers shall be r.e'.yn'lnsiblu',/ire the selection or coo lr'„`lness ref the(''I/S'll'1rnnrlarv's,Mown are the rrrsirl'e',war"cr page. flee oar"Jrrr'nrularnr WWI rrsfarr',rsic.'nrs q/apnaicrr'r c'rrrrraine'e!Ina^,'ash"r are subject to change rrithou(nn74ee"and ear"r7lrcr"the de^fir^rn'_p'oaf tFars(')I/'r'rial.54eNr'nae111 odor' ((il,t,sale made Imo emu,er o'y"ill, hauler 1101'chef rja'sarrlu•e's, c•rrrra;'anon Irapliceation r/la1 there Isar been rvn e'/Itt11fc in'Y/re(l/f1nru II/the City err, Nina maarle.'r°s- e/r"s'e'a'rhi'd In¢:i,iui,('horn, r+ualr fl'ras q//i:^r'i'n"e;, oleo",Irrira'r+l I"'arl"+.'ha.Se'r5 roo)'n'va'r-allnl rrr'o;f/'04,1 trait,rarrlions rCI'ric"I'a n 1n/ri price u/floor assna'rr'I a'Ir,"rr'1(1/0;'sa'lr.c°!!rr rrrrrrh'eR h'rn rrlrir.In rru/,hI a?N'rei-n•i 1 1 1'rc,.11 11(l/,(fi,:i+rt;, F e'be'e'li,c,rr;rnrinna^d ni ans'find vl'prevail in the open u'nur ho^r r arrrvvrne,',rr'r.'ll„rnr'a, The f la the.S'r"r`!rr`ifir's'and 1is'('(rrrr Obligations are a'srrruRar!i"yaw rvrs;r,r1'rrnrnrr re'^n' 1 lti,r C,u,rrrmrs,svearr r'raarl conseqpnadly hare rrrVr r,.'c'rl re^hr,i'ler'erl(heroin'rlr Ilur" ,'e',Lislrcuion, tfrrrthprr'a/ia'n, ur'a^-ir:'l°Iminar'r rif the Obligations in ra(:'c'oyrriclnr.'e hail/ r'rlrp'fic'tlb(r'5('r.'rn tri',( irrsw Irrra's'isir"Ids eI)(the fen'i2,411e rhara ire rr°Iri'l/n rh'r',s't° .rer(111"il'I4',1 Iavnr"been I1'l'a,SI+°r'¢'d or exempted,should root In'regarded as a recommendation thereof NEITHER ER 7'Ills CITY, 17;S'l""/N4NCIAL A1.J.KISYi 1fd NOR 77/I^,'IrWI'I'f+PI'L, I'''d.;ldC"11.4,S'L'R MI,rPA'1s"r41U)'ifii''lila,S'h.rWr"I'rPTON'OR V'WrPI(1(,ri'rW77'4f'I771'RI'':,S",I'h;( 7 7'0 "I7IE INFORMATION <.'."ONAINED IN 'I"111.5' 011:/C'LU. ,S'74'•I""I:', EN7'R"EP'AR/:V,INQ, 'I'h1E DEPOSITORY Ti//,51/'7'COMPANY 1"1)T('"I OR I'l;S` 16'O()K /s"Ar7"il Y-ONL Y.S"YS"TL'M Any infin 7rr(yrr<n'e and 1AIressi115 7 rlrrirr herein contain ed are"sarlyr°era Ire c'1arr,rrt;e^rrrr'lxrnn raerr'iarei, and sic iNrarr`t re c r:"Ilwers^rrIrhos f)F„Ircinl,S"ear„v'rrr.vn mar frrr,_r'„mole"nWalle'i I'l,'lnarla"r s"hrrll, under any r/ir c.'ta'ai'iarac'Cs„create any ingthe hired'that there Toms'wen no change.in the 0/fran:5 if the('i l ear toiler•'nrrarfel",Y d,•sar lbeil hr r^ira.rirrc^(^Ihc^elate here^n/ The Initial Purchasers hearer prov'riled the li;allr'ns^nlL sentence,/01'nreln.sirna ire this Official St'ara-'rrre'n'I. 77ae Initial Purchasers have r,'1°10e'errl the ili/lI rnaihnr an OW'(Mk jai Stafl'rnrnt in el("(701'414(1We 414fh, rand as part r f their responsibilities tu inwc'sI,n',(under the fiyleral securities bows,as applied(I'dear/aiYsr and a'1F'1'renrs'tauu'c',l'of'this transaction,but the Initial Purchasers do tun guarantee the cac'e'rrral'I or completeness n/`soda irrfar,nafion, THIS OFFICIAL STA/P,S1EN7'CONTAINS"I'()R➢VARD--LOOKING"STATL^"AWE'NTS"WS'17'1/IN 771E MEANING OF SECTION 2/1101''THE,SIX'U/hITI/i'S EXCHANGE'ACT OF 1934, AS AM'ENDF1), SUCH STATEMENTS MAY INVOLVE KNOT'/7'/AND UNKNOI('N'RISKS, UNCF'R'7AINTIES AN))()TILER FACTORS WI-IIC".l1 MAY ( 40S,f' 77/li ACTUAL Rir,SULTS„ NERI"OR4MANCf, AND ACHIEVEMENTS TO RE DIFFERENT'PROM 771E FUTURE RESULTS, A•"ii''RI`URA'IANCE AND.11'11IEVPMI,"N'/S EXPRESS'ED OR 1M1''f.iED BY S/4(1''1 FORWARD-LOOKING STATEMENTS INVESTORS ARE CAUTIONED 7l147' 771E ACTUAL RESULTS COULD DIFFER AlATERJALLY Palk! TIIOSE SET FOR771 IN THE FORW 'IRD-LOOKING STATEMENTS.Sc'e"OTHER INFORM A'7'ION-1"Y;IRd'6°ARD-1,O()KING STATEMENTS DISCLAIMER-here i i. Rc,Fn'renc:e.s ha Ira?h,sate addresses presented herein rrre (ar°irrli'rr',raaranaal purposes only and 1111(1'be in the,l'rlrrn rat"a Inper'lirrlc srrlety for lira'("eat! r'S e'cnrs'cntc^rn^e, l,111/eS.t Tee'if rd alher'Wi:se„.sarc'1r web,sire's and the nrlhrrrrallon Of links contained therein are not 140,''rs'r+r"are'd itao,and are rarer'rare If I'iris final e?f'Oaf sta tenter?l far pen7'nr.11'5'`erJ,e,:nd ors that tern,rs&;/ineral in,SEC'Rule 15c2-I2. III ---- MATUGII SCHEDULES-....... .___-...........--...~..,..i 111NAMCVAJ, _.-_-. ......... %o 0 VIZ VC,1:1 AiSTAlERm ENT SmMyA A 111,--.......... ...... ..........v ��nu�� - 0n�cam�Bwo�,m�us^wmFxwnw/m`m� �verupN�^wmdwnuw�now----.-.--.-._-..'vn Hmnmv......-......-...-.--..-.....^.- .....2/ �*wmu�yowu(bwux�u^au�v^ru��wrSUMMARY- vo T^II|3 ' MmvxIPnLX^/zf, VAX Hm/mn_......-.....�� ihxn�3,m�wCumcawxcu3no�wu*r/�Cw�x�zwws� vo f"tmxmruc 21 C14"YOrFICIALS,STAFF AND T"II COM BoMEoUTI LSTY3I'SKII ......—___----22 .................-----.........---vx^ wmmvOmnaSYum�«---------......--------'22 Sa.e`mmA-IuNImennxnvuSInn vn/ vYMmFwxrexSrxsw........,...-.....,........--....~.2J Cowu,ux^wv AND A` I!,,x�S...... ........- ..... vm Eus�xu SUPPLY Smms-_.-.-.-._-------.-_-�2} mNTRODUC�0N_.^--.__-_--___._—._ -.m Wo I R^rsy..........--.-.--...... ...... .................-24 Dnnnum�wnpnuQmv-.---.----.-....-.,...-'0 l�m�W'�mnmx�/ Ummm'Uma�........._-,-..-.......25 PLAN Txoa|5'TcpL^nsrxvWvurv[\mn`wmo---.-----25 Pvmn,),ss.........----. ...... ... .........,............. .......,.......0 TAW c1., Cn*oewxLuS'"I'MFwsmO'TOpeu^/IONS..-.`.12� ouuwoe/ ........ ... ................I 7AuF|7 Ymo*nru11SxxM,w------..................... 2b S0nxxry AND Uumu+rx'xuyn6................. L TxwEm-0nv'uEijnrvmrneSvmcw............-----'2a TIIE OBLIGATIONS-... ...~.—.—....._--_...._z Yxmkh»-UwomRavcm jr,Bwvm AND 5mew U,mnxu.Uxscaorxa-...-.-....-...... .-.,........ ----.2 SlITI RTFDCFRTlFIICAlT I)HYl SIavxv......... ......... 27 AunwaprmmI sowm Cr,opnfl;8nmon.--_-.-.--....... 2 INVLSTIMP4TS.....-....---'_-..--_._.__ 27 &uw/uR/rr FOR ISSUANCE ornF.Cmnm'^na........ .............2 L'za1 ;wvaunwsmm.-............---_--_ I7 SozToralloSm'RrpurPxvmcwr.............. ..................... -1 lmvomWnr POI. II! ---....... .......... .............. ..............-28 TxxIUAITLmmVIx Hmw...... ......... ....................--.-.........'2 &uo/TOmAL PvOWnnnn.-.-.-.-.-.-.---...-.--.-.-2Y 0rmow^LKsory'rmm.........--------...---.-...-2 CI v' [wvcrnAuu 11' .mr...--......-.-..................-Z4) K4AwoxvoxvSINxeu T'Am.v20'(lmoum1 ...... 29 IN ricF^rR.L,oa*riw�,i.------...... ...... ...... 3 TAX MATTER3_.............................-.~. .................. . 5V H�xUK-ENIx,-OMu' ................. ..............l QpwmIN-- ......................-........... ....... .................... 3M p^nmsAnsm/ku.er/x^n........... .............-------.......5 FuummL\wrouuTAxArnnmnwoTxc^TMow/./r TRANSFER,LxnAmoe^woKpoamx^xow_--.................--5 oommAL Isy/i�Diszv."o---- ..... JQ uuomuDA'onm Co1,uo "It«I,rcocxx1,|wcoMslAu[uwS 1;p�IFwc17x---- 31 Do/FAsAwco ....... STATE,1zxxoxwo .................. 3i Rcwsonrs9)],HOLDERS'»Ouu'unonm------------^ FUnn RE,AND PROPOSED 31 TAX INFORMATION...............................................................6 CONTINUING DISCLOSURE OPINFORNI6TI0N ]2 xoYmz1I]^xLmv ' 6 xwmu^.Knoxm--_----_--......----_---32 CONS ronowAi-Awc=Dp«Ep`'.........--.................... ....-7 Evow,r N /ncu .-.....-. ...... -............--.........32 ana'nvsTxrn^o AND ROLLBACK TAX Kxra-------.8 LIw/o,00wvANo ......-........ 33 ymi,uxrvAvSEawsw' AND TAX P^vmswr-----......---x CowpuawrE.Wm/Pxmu UNDERTAKINGS----- .............93 PENAL rms AND INreRESr-...... ----......--........... ..........* VT":Ee INFORMATION................ _...................................33 Cn,v APPLICATION oF-Pnopmr/TAX CuM ......................_v RATINGS 11 lAzABArEMsNTPoLICv.........-..-...... .....-.-.......y LITuxnow.................................-.....33 ECzeemucocvpuxMsmrpmxxxwS........------ .......-v Rsoe1xAnow AND 0v^'IMxlmw(lf Ow/o^nonapwt TABLE | 'VALUATION,EXEMPTIONS AND GENERAL 33 OBLIGATION,Dpar-- ................. .... ....... - ............... | nwvcsrwcNT,S AwuEi.mmmunrnzSIromsPUBLIC TAiI2 Txx^an*asusocu VALUATIONS ovCAocuouv...x2 FUNDS mTsX^S .................... --- .......---...... .....34 TABLE 3 - VALUATION AND GENERAL 0uLmxvmwDvnr LfzA/Onw/o*a-------...... ------------...34 HIS nORv--....... .............-------............. _--...B annwwrvxTv or,F\wmwcuoDm A AND 011 TER TABLE TAX RATE,\Fvv AND{'OuErr ION HsTOm,---|3 IwpOxMxruN----------------------.34 TAeu,5 ' TpwLxxucsrTAxn+,em.......... -_................... B FINANCIAL ADVISOR... ........................... ............... ............. s4 lAmso TAX Aupomr,.........-------_ ...................i4 Vcnmrm ION opAurmmcncmL AND MAn/cuAl/c^/, T^aUe7 - BnIMmIIuvcmupnwoDcor.... -----.... ..|4 Cn%4nnmauma--.... ---------------.......35 DEBTANFuRMATNOM.............................................................|5 IN]nu'9'mcxxsons- ..........- ..........---.............. .........}5 TAM F8 Au VALOREM T^xDnnguavxe Mmro�Awco ...... ......--__- ..........-...... 36 R,cwuxcmpmS_ .................... ......-.......... _---..1» "I'ABLEv - |NTE.RFS1 AND SIwII FUNo Bt ID(iFT SCIoII UU LE.,orREFLINmoo pmma~nuw----------......_----------.m o111.'oArmNx-- ........... -......................... .........smxoov^F: T^mFN -SFI.F-qormxrnwoDL�ar ......................... ..........1^ arrEwouem T^m* || - Aonxmuu,SLIT'UmmasuT^x BONDS.... ........|7 o'wpu^ JNmxw^rxNxt,-CAxorN(-,rmEm,x--_----. x awncmmr�mBm*m'LorGEmExAL.,OBLIGATION nw ---|7 sxc,vrvsm»mvwr ANNUAL mx^mo^ xs~m,-------_- m Vnem ...................... .-.17 rmmsnp OPINIONS or,amv -............ � ... ---' r PENSION FUND }7-----~-'--~^----------~--' The cover page heivvC,mbs page, the appendices �tiaudcd herein and any 0munpma m....... ......-...................y7 uddewou' gulipIL-ment or m°".dmmm h"rex, me pm .f th" om=.al ATIII;IM Era summApAn suilunmy is stibieel in all respects to the mote compleic infbotiiilion and definitions contained or incutpuraIed On Mis Official Siatement.. The offering of ihe(_)bligaitoris io polential ktors is nnielc only by means of this entire Offiei:al Sunman,. No tierson is authorized to detach this summary from this Official Statement or to otherwise.lise,it withront tie entire Officitd Statement. THE The City of College Station,'Texas(the"C'ity") is a political subdivision and a ionic-rile city of the State, located in Brazos County„Texas. The City eo vcrs;approximately 51.6'square miles lsee"INTROD1„in ION - 11)Esctit gr tont OF'El 1E('orv") The Bonds,tire issued as $40,100,000 City of College Statical,Texas General,'Obligation Improvement and Refunding, Bonds, Series 2016. 'The Bonds are issued as serial bonds; maturing au February 1.5 in estell of the years 20'17-2034, inclusive, and is term bonds maturing February 15, 2,036; (the "Term Bonds") (sec: OBLICiATIONS- DESCRInTioNi")„ Tint,ClAterivit,;tvirt,.„„ The Certificates are issued as li'25,7,?,.0,000 City o'f College Statiott.Tittian(2intilicnes of libligation, 55105 2.0 16, I lie Certificates tire issued as serial certificates matui iicy on February II in each of the ycats 2017- 2036,,,lite tits ive(set"THE on uci AT s (leNt tAt DitSCRIPTii IN"). VmENT OF INTEREST Interest 011 13011(IS will ace tie from, the dote of delivery„and will be payable February IS and August 15 of each year 1,7oinnteneing August IS, 20 Hi until mantrity or prior redemption and will be ealculinett On the basis of a 360-day yeti consisting,id'twelve 30-day months. Interest ori the Certificates will accrue from the dales of delivery, and will be payable February 15 and August 15 of each year commencing February IS,. 1017 until maturity or prior redemption and will he calettlate41 on the basis of a 36ottlay year consisting ref twelve,30-city wraiths,(sec'1 lIE OBL,(GATIONS-GENERAL DESCit.ium,iNi") AuTitORFTY FOR ISSUANii ir The Bonds are issued pursuant to the general laws of the State,particularly Chapters, 1207, 1251, 1331, and 1371,Texas Government Code, an ordinance passed by the City Council of the City, and all election held November 41, 2008. in the ordinance authorizing, the issuance of'the Bonds, the City Council delegated pricing of the Bonds to a "Pricing Officer" who approved the terms of sale of the Bonds. (see "THE OBLiGATIONS- At triartorY FOR ISSUANCE or DEE BONDS"), AUTHORITY FOR ISSUANCE OF THE CERTIFICATES The Certificates are issued pursuant to the general laws of the State, particularly Chapter 1371, Texas Government Code and Subchapter C of Chapter 271, Texas Local Government Code, as amended; and an ordinance passed by the City Council of the City, In the ordinance authorizing the issuance of the Certificates, the City Council delegated pricing of the Certificates to a"Pricing Officer"who approved the terms, of sale of the Certificates, (see "THE OBLIGATIONS - AintioRrtv Flit IssitANc19, OF THE ('iris'l IFICA"I ES"), SECURITY FOR Till! BONDS The Bonds constitute direct obligations of the City, secured by and payable from the levy and collection of a direct and continuing act valorem tax,within the limits prescribed by law,on all taxable property located within. the City (see"THE OBLIGATIONS - SECURITY AND SOURCE OF PAYNtr,Nr"). Article XI, Section 5,of the Texas Constitution is applicable to the City, and limits its maximum ad valorem lax rate to $2,50 per $1110 Taxable Assessed Valuation for all City purposes, The home-Rule Charter of the City adopts the constitutionally authorized maximum,tax rate of$2.50 per$100'Taxable Assessed Valuation. SEctittrrY FOR THE. CERTIFICATES. „ 11e Certificates constitute direct obligations of the City,secured by and payable from a combination of(i)the levy and collection of an annual direct and continuing ad valorem tiLx,within the limits prescribed by law,on all taxable property located within the City, and (ii) a subordinate lien on and pledge of$1,000 of the surplus revenues derived from the City's combined utility system(see"THE OBLIGATIONS-SECURITY AND SOURCE OF PAYMENT"), Article XI. Section 5, of the Texas Con,stitution is applicable to the City, and limits its maximum,ad valorem tax rate to$2.50 per$100'Taxable Assessed'Valuation for all City ptaposes.The Home- Rule Charter of the City adopts the constitutionally authorized maximum tax rate of$2,50 per$.100 Taxable' Assessed Valuation, The City reserves the right, itt its option, to redeem Obligations of either series lliving stated niattnnies on and after February 15, '2027, in whole or ii tout in principal amounts of$5,000 or any integral multiple thereof, on February IS, 2026, or any date thereafter, at the par value thereof phis accrued interest to the date of redemption(ace"THIE OBLIGATIONS unvAt.Rilitrkusram"),The Term Bonds are also,subject to mandatory sinking bind redemption described herein (see "T.FIE BONDS - ,MANIM tony SINKINK FUND Il EDEN11'FEN") TAX ENENATTR)N, In the opinion of Bond Counsel, the interest on the Obligations will be excludable Irum gross income Ibr federal income I aX !imposes wider existing law, including the alto olive minimum tax on corporations, See "TAN MATTERS"for a discussion of the opinion of Bond(ninsel and Exhibit C. fist iii Brim) Proceeds Oniti the sale of the Bonds will he used to (i) pay lig the costs of constructing and improving streets and roads including related chMitage, landscaping, lighting, related thereto; (ii) pay for the costs of constructing and improving the City library(iii)refund certain obligations of the City,describefl in,l'ichedide I to this Official Statement Om"Riefunded Obligations")and(iv)pay the ctists incurred in cionneetion with the istanmec of the Bonds(see"PLAN OF FtmAricl - :,:ouRcEs ANt)list or 1714(..wErDs'), Usti OF CERTIFICATE PROCLEDS,-------- Proceeds Croat)the sale of the Certificates will be used to(i)pay for the costs Oicouongling,and:improving streets and f'nods including related drainage, landscaping, lighting and signage related thereto;(ii)designing and constructing a new police station; constructing improvements, and +extensions to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines and wells(iv)the payment of fiscal,engineering and legal fees incurred in connection therewith;and(i,v)to pay the costs incurred in connection NVII Is the issuance of the Certificates (see "PleA,N OF FINANCING SritttcES AND()Sri w PROCF Fps:). RATINP,; The Obligations and presently outstanding tax supported debt of the City are rated "Aa2" by Moody's Investors Service,Inc.("Moody's")and"A,A+"by Standard&Poor's Ratings Services,a Standard& Poor's Financial Services LLC business ("S&P"), without regard to credit enhancerrient (see "OTHER INFORMATION- RAYINGS"), BOOK-EWERT-ONLY S VSITM The definitive Obligations will be initially registered and delivered only to Cede&Co.,the nominee of The Depository.Trust Company("DTC") pursuant to the Book-Entry-Only System described herein, Beneficial ownership of the Obligations may he acquired in denominations of$5,000 or integral multiples thereof. No physical delivery of the Obligations will be made to the beneficial owners thereof. Principal of and interest on the Obligations will be payable by the Paying Agent/Registrar to Cede & Cm, which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Obligations(see"THE OBLIGATIONS- Butne-ENritY-ONTY SYSTEM"), PAYMENT,RECORD,-„,--„,„ Other than a late payment on the City's Certificates of Obligation, Series 2002 that occurred in 2003, the City has never defaulted in payment of its general obligation tax debt. [Remainder of Page Intentionally laft Blank] . . . Siar..,e31.3).Flit4ANciAt...lbwoutrum.toN Ratio Tax ['Neal Per Capita Per Cap. t a Debi,to Year Estimated l'axable, 'llaxable N CI Net Taxablr Percent Ended City Assessed Assessed Ad Valorem Ad Valorem A,ssessed. Total, 9730 Pop ulat toe' Valium ion Valium ion Tax Del)1‘ Tax Debt, Valuation Collect ion 201 1 94,669 $ 5,455,4 32.,46 1, $ 57,626 ,$ 99,140,000 $ 1,047 1.82% 99,7614;,, 2012 97,888 5,738.61 5,9.102 58,624 96.390,000 985 1.6851. 99.83% 201:3 97,929 .5,9,14,312,987 60,700 96,750,000 988 1.63% 100,24% 2014 100,394 6,211,1 19,01.0 62,067 88,100,000 878 IA I°N• 1 00,1 0114., 2015 1 1Y.1,28 1 6,654,600,834 65,062 101,,630,000 9C/4 1.53% 100,26% 2016 106.636 '7,.1 6 2,7'3 8.,280"II 67.1 70 1 18,350,9100" 1„1 10 " 1,c',,!;'...,,,1'-'° 91.1,,7951,1" ..„,,..... ) l..lataireet 'the d„'ily. t2) As repoihtd by 1lie Brazos("cloud Appraisal District;stibietti,to change clurio))the en:sating year. (3) Payable from ad valotem tatict;. Does uot inchotht selkupporting debt.See"Tnut ENO- SHY Si IrP(uniNG DUB'["6.111(Rcloil on du!!'toyl,t: self support ed IA.,l(1019 0) (.'.%;11 lied taxable assessed valuaiitht Ow lax year 20.i b.1.4.t.; 1'04101:led try the Litte/IN4 ("ORM] App.m.] Didinct ' Si,, 'it lot il, tathjeet to change dining ontsuing year. (5) Includes the Ohligatious and excludes the Retioncled Obligations.. (to) tulle toe as of April 30,20t O. A portion of the( it 's tax ieye base lures elceoed to provide split payments in the Cory which will be due in ien t on Mole 30,201di. ,111"4:NriltAt, Nit('at sari STATEMENT SUMMARY' For"'kcal Year Ended Sep 1cm.ber 30, 2015 2014 2013 2012 201 1 .,.... .Beginning Balance S 2(1,244,248 $ 15,925,531 11'4 16,492.,603 $ 14„393,033-L2) $ 13,815.881 Total Revenue 58,378,174 50,325,,82.5 48,229,,096 46„560,274 44,034,999 iota!Expendil ures 68,827,16.7 61,303,335 59,483,559 55,670,1 18 56,171,633 Ot her Financing Sources 12,627.809 15,296,22,7 10,6.87,301 11,2.09,504 12.713,810 Ending Balance I') $ 22,,423,064 $ 20,244,248 $ 15,925,531 $ 16,492,693 $ 14,39'3,057 i I) 'Tbe City's Financial policies require a General Fund balance of 15%of budgeted appropriations,at year end. To the extent that the(Oeneral Fund'balance exceeds tins amount, ibis surplus may be expended in Fittac years the one time expenditures such as capital items and short term projects. (2) Restated. UTILITY'SYSTEM CONDENSED STATEMENT or OPERATIONS For Fiscal Year Ended September 30, .. ... 201,5 2014 2013 2012 20'11 Revenues: Electric $ 98,7'63,293 $ 95,677,7'65 $ 92,892,5,41 $ 94,3C/6,234 $ 98;737,655 Water and Wastewater 28,732,968 27,55.0,262 29,018,108 27,652,449 29,248,180 Interest 180,423 116,433 170,062 136,974 142,700 Other 3,546,1 3)1 2,890,061 3,670,710 2,857,223 2,584,985 Total Revenues $ 131,222,822 $ 1 26,234„521 $ 1,25,751,421 $ 125,042,880 $ 130,713,52.0 Expenses: Total Expenses $ 82,079,813 $ 100,23,5,32,9 $ 90,519,871 $ 88,927,662 $ 96,9313,864 Net Available for Debt Service $ 49,143,009 $ 25,999,192 $ 35,2'31,550 $ „36,1 1.5,218 $ 33,774,656 Water(Units Served) 41,540 4(1,768 40,767 39,,3,38 3'7,565 \Vast ew at er(Units Served) 40,806 39,,1 28 38,608 36,908 35,563 Electric(Units Served) 43,471 38,198 38,456 39.12,3 3'7,829 v ii 'ITV 00E11("I ALS,S'FA FFAND trONS LILT ANTS ,EC tint ,tngth(41 am Name Position Service Expiration Occupation Wiley Berry M ay or Ii YeaN i I/1(1 Full-1 tine Voltam(air John Nichols M ay or Pro Tem 1.5 Years Op t /t 8 Retired Professor Steve A klrich Courted M ember 2.5,Years 11 9,e i'7o 'Financial A dv isnr Karl Moro Council NI ember 5,Years „t; 1 /l'7 A&M. University Oil cool. Blanche Brick Courted M ember 5'Years 01; I 1/17 Professor Julie Schrok.4 Conned M cidier 5 Yeats 'IfI 3 ices OW ner James Witham ('4I.ricil M 0116,a 3,5 N'ears Cl 8 Business Owner ( I Eleuicit Mayorill May)0 10;lonina(Thy or'("rilletre Station Council Member;,2004-2006, (.71 Heeled (3 t,ltn,vivabcJ 201:3 (4)1 Flecledl IC'[ y 2)11I SULU(' in AOr1/41,11,11 STIR,V11 E I.,,Cfligkti of SO: Name Posit ion to the City K lily Temp lin Cliy Manager 4'Years 15. t,'hIll'l Ci ninon Devilry City El anjig.1.3. /1.5 Veins ;11 tiff K cast cit A ssist ("it y El inager 2.5 Years Jell'Capps Assistant("ity M mimic!'" 23 '1' C';iula RiktriSell 'City At.tOrney 1'7.5 Years Sherry'hi askinun City Secretary 5.5,Years Ty Elliott Internal Auditor 8 Years M ary Ellen Leonard Director of Finance 2 M ont6 David Colcinan Director of Water Services 10.5 Years Timothy("rabb Dire.etor of Electric I i 1ity 9.5 Years"r"' Ben'Roper Director of In Technology 1 1.5 Years David Sehmilz Director of Parks and Recreation 8 Years Lance Simms Director of Development Services 20)(Liars Donald.Hruthon Director of Public Works and("IP 1.6.5 Years Alison Pond Director of!Inman ReNOUree'S 7.5 Years Jay Soeol Public Continuo ierit ions Director 6.5 Years ( '1 City Manager silic:November 2013;previously served as Planning 84.Development Director'2002-2004, (2 Deputy City Manager since January 2014;previously served as Diremor of Public Works and CEP, (3 Assistant City Manager since January 2014.;previously served as chief.Financial Officer. (4 Assistant City Manager since June 2014;previously served as Chief of Police. (5 City Attorney since February 2011;previously served as Assistant City Attorney, (6 Director of Electric Utility since December 20)2;previously served as Assistant Director of Electric Utility, (7 Director of Parks and Recreation since May 20 I;previously served as Assistant 1)iireetor of Pinks and Recreation„ (8 Director of Development Services since March 201.4;previously Assistant Director of Development Services, (0' Director of Public Works and C IP since January 2014.;previously Assistant Director of Public Works and C1P. CONSULTANTS AND ADVISORS Bryan,Texas Bond Counsel McCall,Pau'khursi& Horton L,,l, P. Dallas,Texas, Financial Advisor„ , „ „ „ First Southwest,a Division of Hilltop Securities lie. Houston,Texas For additional information regarding the City,please contact: Jeff Kersien Drew Masterson Assistant.City Manager First Southwest, a Division of City olCollege Station or Hilltop Securities Inc. 11(11 Texas Avenue 700 Milan Street,Suite 5011 College Station,Texas 77844) Houston,Texas 770(12 (979),764-3555 Phone (713)0511-9850 Phone 0E I+'I(_'t'it I.,a;i m,,.t..➢.l:I d'➢./.PT9, IR'I A"Ii,Nt i TO C'I'I.'"lt"'OF COL L,E G EE' i'f,i'I'I(.1a1"i,,I,FXAS (a Home-Rule Cite heated in Brazos County,Texas) 40,89 l,0(III GENERAL OBLIGATION ION :125,720;000 Il6'IIIP['OVE ENT AN Cb R1(IaICATES OF 0RLIG I'ION I(I,I'IJNID'ING IONDS SERIES 201,6 SERIES 2,016 II'wtTi1(tDUCTION' t"Iriu;, l"1V'!`ur,nail St.6I0111'1 iu„ Whidl iowraudw the cover pagO:s mod Apltcmdica:a lice ao, pt'uviiJus Call ahi. uukrntunt eg rdiitfa, the issuance,oV'thir, 'W.),84r11„(ttK1 City of(,'allege Startiran, "Texas (.Moral Obligation Improvement and Rentuudittg Bands, :Series 2016 (the "13ouads") and the 1,925,720,1'8t(1 City of College Station 'Texas f."r,atiicatus caf Obligation, Series 211116 (the. ( crtlficalos"). 1he Bonds and the Ccttifieratcs arc referred to herein collectively as the"Obligations."('upit'a'lized is rats used itt this Official Statcrnetii,except ae u,rtherwise indicated herein,have, the saute meanings assigned to such terms in the ordinances authorizing.tie isstrrtllee of the Bonds(the"Bond Ordinance")and the Certificates (the "C'ertiihi,e'ate Ordinance"), respectively. The Bond Ordinance and the Certificate Ordinance are collectively referred to herein as the "Ordinances."In the Ordinances,the City Council delegated to certain in officers known as"Pricing Officers"of tie City the authority tar V'iataliec. the pricing of the Obligations, There follows in this Official Statement &iscrtiplions of the Obligations and certain irrfi,;orniaticsn uegaudiug the City slid its finances. All descriptions of dociinents contained herein are only su,ntmaries and are qualified in their entia:ety by reference to each such document. Copies of such documents may be obtained front the City's Financial Advisor, F'i'rstSonthwest, a Division of Hilltop Securities Inc., Houston,Texas. DioiCtur'rloN tit Tnc The City is a'political subdivision and municipal corporation of the State of Texas(the"State"),duly organized and existing under the laws of the State,including the City's Home Rule Charter. The City was incorporated in October 1938„and first adopted its Home-Rule Charter in October 1938,which was last amended in November 2012, The City operates under a Council/City Manager form of government with a City Council comprised of the Mayor and six Council members. Some of the services that t'he City provides are: public safety(police and fire protection), highways and streets, electric, water and sanitary sewer utilities, health and social services, culture-recreation, public transportation, public, improvements, planning and zoning, and general administrative services. The 2110 Census population was 93,857 and the current estimated population of the City is I(I6,636. 'The City covers approximately 5'I.6 square miles. PLAN OF FINANCING Pianos OF Tttl;BONDS Proceeds from the sale of the Bonds will be used to(i)pay for the costs ofconstructing and improving streets and roads including related drainage, landscaping, lighting, related thereto; (ii) pay for the costs of constructing and improving the City library (iii) refund certain obligations of the City described in Schedule I to this Official Statement (the"Refunded Obligations") and(iv)pay the costs incurred in connection with the issuance of the Bonds(see"PLAN OF FINA,NCINCi - Sotr'ttc':t s AND tfsr:c'.it Pttrocloats"). P'LKJ'OSIE tw It a4 Ct^ILTIFIcA't'rs Proceeds from the sale of the Certificates will be used to (i)pay for the costs of constructing and improving streets and roads including related drainage, landscaping, lighting and signage related thereto; (ii) clesigtting and constructing a new police station;(iii) constructing improvements and extensions' to the City's combined waterworks, sewer and electric systems including distribution, transmission, system lines and wells(iv)the payment of fiscal,engineering and legal tees incurred in connection therewith;and(iv)to pay the costs irtcu,rred art connection with the issuance of the Certificates(see"PLAN OF FINANCING- So ltrtt_°L/s AND LJsr`I if PR4,rc:it.rrs"). itit.r'^tlpWi)t:It(trat"Rta'rtt1NQ,'.i ➢"he principal of and, interest due on the Rc.fttnded Obligations are to be paid on the respective interest payment dates mut redemption elates of such Refunded Obligations, lion funds to he deposited pursuant to a certain Escrow Agreement(tlae'"Escrow Agreement")between the City and The Bank of New York Mellon Trust Company,N.A., Dallas,"Texas(the"Escrow Agent"). The Bond Ordinance authorizing the Bonds provides that from the proceeds o I'the sale of the Bonds and ollaev available moneys of the City,if any,the City will deposit wvlth t)te Escrow Agent the amount necessary to accomplish the r➢isclauargc curd final payment of the Refunded Obligations on their respective redemption dates. Such bruits will be held by the Escrow Agent in a special escrow account (Me-Escrow Fund")and used to percha.,e (i)direct noncallat'le obligations of the United grantee„including obl'rgatiruns that are unconditionally guaranteed by the)United States or tii;) nonealiaable obligations of an agency or instrumentality of the United States, including obligations that are unconditionally guaranteed or insured by the agency cat Yursurstntcontalrty and that,nit the date to governing body of the City adopts the proceedings authorizig,the issuance of refunding bonds, arro rated as to rnvestmebt quality by ar nationally recognized 'ir'rvcsunucual r°sting fins riot less than AAA or its equivalent(the"Federal Securities"). Linder the Escrow Agreement, the Escrow Fund is Yrarzv+ntably pledged to the payment of thee principal elf and interest on the Relirnded (.)b kcal ions,. Grant Thornton ELF,a nationally rec'o,r nizc i uru'couurattirig firms,will vc1"6 out'thin time of delivery of Me Bonds In Me underwriters listed on Oro cover page hereof(.the"Initial Purchasers")the mathematical accuracy of lire schedules that demonstrate the Federal Securities will onaattnrc and pay interest in such amounts which, together with uninvested funds, if any, in the Escrow Find, will be sufficient to pay, when due, the principal of and interest on the Refunded Obligations. Such matniring, principal of Mid interest on the Federal Securities will not he available to make debt service paayments on the Bonds (see "C)TFIER INFORMATION • VERIFIt'A'it(IN or ARtttthtt.t'I'ta'"rvl AND MA'ttttlM,'t t'I('AIL(_';¢nhns I t'A"t"Ii.iNs"), By the deposit of tlae Federal Secun'itres and cash, if necessary„with the Escrow Agent pursuant to the Escrow Agreement sufficient to party 9'luc redemption price of the ftefurreled Obligations cue, their respective redemption dates, the City will have effected the defeasance of all of the 1,,eftmdecl Obligations in accordance with State law, As,it result of suds defeasaarrce,the Refunded Obligations will be otttstandirrg only for the purpose of receiving payments 'frurn the Federal Securities and any cash held fair such purpose by the Escrow Agent and such Refunded Obligations will not he deemed as being outstanding obligations of the City payable from taxes or revenues nor for the purpose of applying any limuitation on the issuance ofdebt, "fire.(City has covenanted in the Escrow Agreement to umkc timely deposits to the Escrow Fund,From lawfully available funds,of any additional arucaunts required to pay the principal of and interest on the Refunded Obligations,if for any reason,the cash balances on deposit or scheduled to be on deposit in the Escrow Fund are insufficient to make such payment, SOURCES AND USES OF PROCEEDS 'i"he proceeds frouu the sale of the Obligations,and the cash contribution by the City,will be applied approximately as follows: T'IlE BoNus THE CERTIFICATES S()Dees of Funds Par Amount $4t,),890,0()(I.tto Original Issue Premium 5,751,277,30 Sources of Funds Issuer Coot ribut ion 4111„307,08 Par Amount $25,7'20,t1(t0.tttl' Total Uses of Funds $47,042,584,38 Original Issue Premium 2,464,939.65 Total Uses of Funds $28,184,939,h5 Use of Funds Deposit to Project Fund $ 8,785„ft(t1t,€t(1 Use of Funds Deposit to Escrow Fund 37,810,820.20 Deposit to Project Fund $27,950,000.00 Underwriters'Discount 242„0h8.5h Underwriters'Discount 113,771.08 Costs of Issuance, 204„695.62 Costs of issuance 121,168.57 Total Uses of Funds $47,1)42,584,38 Total Uses of Funds $28„184,939,65 Ili 12"Oft If A,'T 0 N ,GENEnat.„DesctUPTION Flie ObligitliOnS will bear interest from the date of delivery to the Initial PurchaserS,and truiliturC Oil February 15 in each of the years and in the amounts shown on the inside cover page hereof interest on the Obligations,will be calculated on the basis of a 360-day year consisting of twelve 30-day montlis, Interest on the Bonds will accrue from the date of delivery„ and will be payable February 15 and,August 15 of each year commencing August 15,,2016 until maturity or prior redemption and will be calculated on the basis of a 160-day year consisting of twelve I0-day months. interest on the Certificates will rteeree:from the date of delivery,and will be payable February 15 imd August 15 of each year commimeing February VS, 2017 Limit maturity or prior redemption and will be calculated mu the basis uI u 360-day year consisting of twelve 30-day mouths, 'The definitive Obligations will be issued only in fully registered form in any integral multiple of $,5,000 for any ime maturity runt will be initially registered and delivered only to Cede & (foe the nominee cif The Depository Trust (ompany, New York, New 'York ID TC") pursuant to the 1,3ook-lintry-Ortly System described herein, No physical delivery of olie kligations will be mark to the bemelicial owners thereof. Principal, of and intetest on the Obligations mull he payable by the Paying, Agentategistrrir to Cede Ss Coe, which will make distribution of the amounts so paid to the participating members nf DTC foe subsequent payinetit to the benefiCia W S ort he CAiligar ions(see"Biog-FN'ritY-ONt V Sys-rum."), Art 1101OU'V TOR IISSUANC'E iwl orBONDS The Bonds are being,issned pursuant to the Constitution and general laws of the State ef Texas,particularly Chapter's. 1251, 1207. 133 t and 1371,"Texas Govenuncitt Code,as amended; an election held November 4, 2008 passed by a majority of the participating voters; and the, Bond Ordinance, AUTOIORrt'V MR ISSUANCE OT TOE CilltiTtVICAlEtil "The Certificates tire being issued pursuant to the Constitution and general truss of the State of'Texas, particularly Chapter I 3,71, Texas Government Code and Subchapter C of Chapter 271, 'Texas Local Government Code (the Certificate of Obligation Ad i of 1971), as amended;and the Certificate Ordinance, SECURITY AND SOURCE Or PAYMENT The Bonds are secured by and payable from a direct and continuing annual ad valorem tax levied within the limits prescribed by law, against all taxable property in the City, The Certificates arc secured by and payable from an annual continuing ad valorem taxes levied itgainst all taxable property in the City, within the legal limits prescribed by law and payable from a subordinate lien on and pledge of$1,000 of the surplus revenues of the City's combined utility system, TAX RATE LIM ITAVON All taxable property within the City is subject to the assessment,levy and collection by the City of a continuing,direct annual ad valorem tax sufficient to provide for the payment of principal of and interest on all ad valorem tax debt within the limits prescribed by law,. Article XI, Section 5,of the Texas Constitution is applicable to the City,and limits its maximum ad valorem tax rate to$2.50 per$100 Taxable Assessed Valuation for ail City purposes. The Flome-Rule Charter of the City adopts the constitutionally authorized maximum tax rate of,$2.50 per$1011 Taxable Assessed Valuation,Administratively„the Attorney General of the State of Texas will permit allocation of$1.50 of the$2,50 maximum tax rate liar all debt service for obligations payable from annual ad valorem property taxes,as calculated at the time of issuance. OPTIONAL REDEMPTION The City reserves the right,at its option,to redeem Obligations of either series having slated maturities on and after February IS,2027.in, whole or in part in principal amounts,of$5,000 or any integral multiple thereof', on February IS,2026,or any date thereafter, at the par value thereof plus accrued interest to the date of redemption, If less than all of the Obligations are to be redeemed,the City shall determine the Obligations,or portions thereof; within such maturity to be redeemed, If Obligations(or any portion of the principal sum thereof)shall have been called for redemption and notice of such redemption shall have been given,such Obligations(or the principal amount thereof to be redeemed) shall become, due and payable on such redemption elate rind interest thereon shall cease to accrue from and Mier the redemption date, provided funds for the payment of the redemption price and scented interest thereon arc held by the Paying Agent/Registrar on time redemption dale, 1'vl,nNt iv'r.cpr,b,`rxtNtctrac;La'1 N0 f?t?;otot PTION the:Bons maturing in the year 2036(the""Ierrrr Bonds")are subjr'rl Io mandatory redemption p,n'iar to maturity on February 15 in each of the years and re pcetives pr'inc;iprrl <rrruirintt'; set forth below at a redemption pails, (iii it to 100'lir of the princ`iprrl amount plus accrued interest to the date of redemption: Bonds Maturing February 15,2036 Redemption Date Principal (February I 5) Amount 2035 $ 535,000 2036 .550,000 Tarn Bond to be redeemed in any year by mandatory;sinking,; fund redemption shall be rr'cicenred at p)ar and shall he sekiete,d by lot from the 'lean Brands Rhea subject to redenptic.rrr, The City, at its option, may credit against any rnantchrttrry sinking, fund redemption requirement 'refill Bonds of the maturity Ilre,n subject to redemption which have,been purchased numb canceled by the City or have been redeemed at least 45 days prior to the mandatory .inking fond redemption elate: and not thererofirre applied as ,a credit against any mandatory rinkinlis fund redemption requirement NOTICE OF ftOt)ESII tlt,IN Not less than 30 clays prior to a redemption date for the Obligations,the City shall cause a notice of red'roption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Obligations to he redeemed, in whole or in pail, at the address of the registered owner appearing on the registration books of the Paying Agent/Registrar. ANY NiOTIC . SC) MAtT.,ED SI'IAL.L BE CONCLUSIVELY PRESUMED TO ((AVE BEEN DULY GIVEN, WHETHER OR NO'.I. ,tilt.: REGIS'IERLi:) OWNER RECEIVES SUCH NOTICE. NOTICE HAVING BEEN Sc)GIVEN,THE O1i31.-l(iA"L'IONS('Al. l,f':D FOR RED11MP"t'ION SI'IAL.,I.,BE(''OME DUE AND PAYA.BkE ON THE SPECIFIED REDEMPTION DATE, AND N(: 1WI"l"I-lS'lANDINCG 'IiTA"I" ANY OBl..IGATION OR PORTION THEREOF HAS NOT BEEN SURRENDERED FOR PAYMENT, INTEREST ON SUCH OBLIGATION OR PORTION 'FI•IERE:Of'SHALL CEASE To ACCRUE, With respect to any optional redemption of the Obligations, unless certain prerequisites to such redemption required by the Ordinances have been met and moneys sufficient to pay the principal of and premium, if any,and interest on the Obligations to be redeemed shall have been received by the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice shall state that said redemption may, at the option of the City, he conditional upon the satisfaction of such prerequisites and receipt of such moneys by the Paying Agent/Registrar on or prior to the date fixed for such redemption, or upon any prerequisite set forth in such notice of redemption. If a conditional notice of redemption is given and such prerequisites to the redemption and sufficient moneys are not received,such notice shall be of no force and effect, the City shall not redeem such Obligations and the Paying Agent/Registrar shall give notice, in the tnanner in which the notice of redemption was given,to the effect that the Obligations have not been redeemed. BooK-ENTtcr'-©NL\ SYSTEM This section describes how ownership of the Obligations is to be transferred and how the prnrcipal of onrl interest on the Obligations rare to be paid to and credited by the DTC while the Obligations are registered in its nominee name, Die in/natation in this section concerning OTC and the Book-lintr;)'-Onity System has been provided by DTC,fcrr use in disclosure documents such as this Official Statement. The City, the Financial,Advisor and the Initial Purchasers believe the,source of such information to be reliable, but take no resporrsibilitr'ji)r the crcrrro nes or completeness tterceo/: T7�c C'ilt', the Financial Advisor and the Initial Purchasers cannot and do not give nn,y assurance that(1)DTC:will distribute pr{urncnts of debt service on the Obligations, or redemption or other notices, to D''l'(''Participants, (2) DTC Participants or others will distribute debt sera-ice payments paid to DTC or its itotnit:c'c(as the registered owner of the Obligations), or redemption Or other notion's, to the Beneficial Charters, or than they wtill do so on a timely basis', co:r(3) DTC will scerve and act!tr the nrattncr described in this(Vidal Statemeant, The current rates applicable to DTC con'on file with the Securities and Exchange ("oimulssion, and the ara•,ent procedures cif DTC to be followed in dealing with.DTC Participants are on file with DTC.'. DTC will act as securities depository for the Obligations. The Obligations will be issued as fully-registered securities in the name of Cede & Co, IL)'TCs partnership nominee)or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate for each maturity will be issued for the Obligations, in the aggregate principal amount of such maturity, and will be deposited with DTC, DTC,the wor ld's largest securities depository,is a limited-purpose trust company organized under the New York Banking Law,a"banking organization"within the meaning oi'the New York Banking Law,a member ol'the Federal Reserve Systcn),a,"deco„ing corporation"within the meaning of the New York L?nifnrr C'on)mcrcial C'crcle,and a"clearing agency"registered pursuant to the provisions of Section I 7A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S, and non-L.I.S. equity, corporate and municipal debt issues, and money market instrument from ovCT 1'00 emu:Mies Mat CD C's participants("Dilect Participants") deposit with DI('. DT(' also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions. in deposited securities through electronic computerized hook entry transfers and pledges fir 1W00.11 Direel Participants' ;recounts. This eliminates the need for physical movement of securities certificates, Direct Participants include both U.S, and non-tl„S. SeClIfitiCS br01(.0"S and dealers.. banks, trust companies, clearing corporations, and certain odicr organizations. Iff C is a wholly-owned subsidiary of The Depository TrtISI &Clearing Corporation ("DTC(T), DTC( is the holding company lot DTC„ National Securities Clearing Cmporation„ and Fixed Income Clearing Coporatkin, all of which are registered clearing agencies. D'T CC is owned by the users of its regulated snbsidiaries. Access to the D'fC system is also available to others such as both U.S. am l non-L.l.S. securities brokers and dealers, bartks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (indirect Participants"). Direct Participants and Indirect Participants are referred to collectively herein as "Participants'''. DTC is rated A.Ar. by Standard and Poor's. The ryrc Rules 'Applicable to its Participants are on file with the Securities and Exchange Commission.. More infOrmation about .DTC"can be found at www.dice.corn, Purchases ul Obligations under the DTC system roust be made by or through Direct Participarus, which will receive a credit for such purchases on Dies records, 'The ownership interest of each actual prnehaser of each Obligation ("Beneficial Owner") is in turn to be recorded on the Partieipants' records. Beneficial Owners will not receive written confirmation from of their purchase, Beneficial Owners are, however,expected to receive written rxinfirmat ions providing details of lie transaction as well is periodic statements of their holdings, from the Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Obligations are to he accomplished by entries made on the books of Participants acting on behalfof Beneficial Owners, Beneficial flwriers will not receive certificates representing their ownership interests in the Obligations,except in the event that use of the hook-entry system described herein is discontinued. To facilitate subsequent transfers, all Obligations deposited by Direct Participants with DTC are registered in the name of OTC's partnership nominee,. Cede & Co., or such other name. as may be requested by an authorized representative of.E.ITC, Die deposit of Obligations with DTC and their registration in the Wine of Code& Co.or suet) other DTC nominee do not effect any change in beneficial ownership, DTC. has no knowledge of the actual Beneficial Owners of the Obligations; DTC's records reflect only the identity of the Direct Participants to whose accounts such Obligations are credited,which may of may not be the'Beneficial OWileTS., The Participants will retrain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them,.subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Obligations inay wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Obligations, such as redemptions, tenders, defaults, and proposed amendments to the Obligation documents. For example, Beneficial Owners cif Obligations may wish to ascertain that the nominee holding the Obligations for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them, Redemption notices shall be sent to DTC. If less than all of the Obligations within a maturity in the series are being redeemeil, DTC,"s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede 8t.Co. (nor any other DTC nominee)will consent or vote with respect to Obligations unless authorized by a Direct Participant in accordance with WC's Procedures, Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as, possible after the record date. 'The Omnibus Proxy assigns Cede& Co,'s consenting or voting rights to those Direct Participants to whose accounts Obligations arc credited on the record date(identified in a listing attached to the Omnibus Proxy), Payments 011 the Obligations will be made to Cede&Co,,or such other nominee as may be requested by an authorized representative of DTC. OTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City and the Paying Agent/Registrar,on payable date in accordance with their respective holdings shown on DIC"s records, Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices,as is the case with securities held rim' the accounts of customers in bearer form or registered in "street name,"and will be the responsibility of such Participant and not of DTC nor its nominee, the Paying Agent/Registrar,or the City,subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, principal and interest payments to Cede 8c. Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City and the Paying Agent/Registrar„ Disbursement of such payments to, Direct Participants will be the responsibility of DTC, and reimbursement of such payments to the Beneficial Owners will be the responsibility of Participants. DTC may discontinue providing its services as depository with respect to the Obligations at any time by giving reasonable notice to the City and the Paying Agent/Registrar. Under such circumstances, in the event that a successor depository is not obtaMed, Obligations are required to be printed and delivered, I he City may decide to diseontinlIC use of the 5yStelil of book-entry transfers through VIC(or a successor securities depository), In that event, Obligations will be printed and delivered. 4 • Use of l';"er a1th Terms in Other,acY'r'iou,:(Obis Q cial,iraf,;var�rrrrr, tro reading this,Official` 11 �� an'I ylre0,enaaerrYit ,,luarild be understood that whole the Obligations are in the dome-butt\'-Only System, references in mho si:cticarts of this tllfue`i,it Statement to registered owners shoaili➢be read to include the person liar which the Participant ,axpuiraas tart interest in the.,Obligations, but(i) ill eights of ownership roust be exercised through 1)1('::' and the I'3r:aulc-liani):tnly System, amid (it) except as described ritmvc, notices tlirt adds to be, civc;ai to registered ,truer, tanner the Ordinances will be given oily to DTC. Inl`oa°aaxtdion concerning DTC and the Book-Entry System has been aahtaina'd from'(tIC'and is not guaranteed as to teccurttcy or completeness by,and is not to be construed as a representation by the City or the Initial Purchasers, PA uvas Ac ai/Fl :CIS ERA R The.Initial Paying Agent/Registrar is'fhe Bank anl"New York tr4ellora Trost Company,'N.A.,Dallas,Texas. lar each Ordinance„the City retains the right Ic, replace the P'ayingg, AgigertURegistrar. The City covenants to maintain anal (a,ovide a toying; Aggecrat/t gistt',tr at all mattes until the Obligations of either series are ditty paid and any soecc;sstla Paying Agent/Registrar mast be as bank.,trust company,financial institution,or°Ani't entity y duly qualified and legally authorizedauthorizedto setve as aid ['Kiribati the dutidutiesand services of Paying Agent/Registrar tear theObligations of either series, l.,V'.acota any change in the Paying:g Agent/Registrar fur the Obligations, the City will 1'pnrc,uurpal'ly Caine a written notice thereof to be Y 2 S t t, Fs so to each registered owner oaf"the Obl'ig,aatiirru,.byUnited"" i soot c;y,ua• a Obligations States mail,.first class,p+astaag:e prepaid',which notice will also include the,address,of die new laying„Agent/Registrar, TekANSPrta',4 t i ANGE AND IflN:G15 iIr',/i I itIN tie the event the Book-tr.nar"y-Only System should be discontinued,the Obligations may be transferred and exchanged on the registration books of the Paying Ageiti/Registrar only upon presentation and surrender thereof to the Paying Agent/Regisarar and such transfer or exchange will be without expense or service charge to the registered owner,except for any taax or other governmental,charges required to be paid with respect to such registrattion,exchange and transfer. Obligations may be assigned by the execution of an assignment limn on the respective Obligations tit by other instrument of transfer and assignment acceptable to the laying Agent/Registrar, New Obligatiims will be delivered by the Paying Agent/Registrar,in lieu ref"the )hligaiens being transferred or exchanged„at tne corporate trust office of the l ayirt Agent/Registrar,or sent by United States mid,fist elasss.,postage prepaid,to the new registered owner or his designee,To the e,xte'tit possible,new Obligations issued in aaat, exchange or transfer of'Obligations will be delivered to the registered owner or assignee of the registered owner iu not more than three lousiness days after the receipt of the Obligations to be canceled, and the written instrument of transfer or request for exchange duly cxeca.tted by Ilse registered owner or his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. New Bonds or Certificates registered and delivered in an exchange or transfer will be in any integral multiple of$5,000 for any one maturity and I"or a like aggregate principal amount as the Obligations surrendered for exchange or transfer, See"Bi.ac,rtc-ENTRY-ONLY S'sIoM"herein far a description of the system to be utilized initially in regard to ownership and transferability of the Obligations. Neither the City nor the Paying. Agent/Registrar will be required to transfer or exchange any Obligation called for redemption, in whole or in part, within 45 days of the date fixed for redemption; provided, however,such limitation of transfer will not be appheable to an exchange by the registered,owner of the uncalled balance of an Obligation. RECORD DATE FOR INTEREST PAv,U5N'r' The record date("Record Date") for determining the person to whom the interest is payable on the Obligations on any interest payment date paeans the close of business on the last business day of the preceding month. In the event of a non-payment of interest on a scheduled payment date,and for 30 days thereafter,a new record date for such interest payment(a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest(a"Special Payment Date," which will he 15 days after the Special Record Date) will be sent at least five clays prior to the Special Record Date by United States mail, first class, postage prepaid, to the address of each Holder of a Obligation appearing on the registration books of the Paying Agent/Registrar at tlee close of business on the day next preceding the date of mailing of such notice. OF FI^,ASANCI: The Ordinances provide for the defeasance of the Obligations when the payment of the principal of and premium, if any,on the Obligations, plus interest thereon to the clue date thereof(whether such due dale be by reason of maturity, redemption, or otherwise), is provided by irrevocably depositing with a paying agency, in trust(I) money:sufficient to make such payment or(2) Defcasance Securities, certified by an independent public accounting firm of national reputation to mature as to principal and interest in such amounts and at such times to insure the availability,without reinvestment,of sufficient money to make such payment,and all necessary and proper fees,compensation and expenses of the paying agent for the Obligations. The Ordinances provide that "Defeasrarrce Securities" means (a)direct, nomcallable obligations of the United States of America,including obligations that are unconditionally guaranteed by the United States of America,(b)noncaall'able obligations of an agency or instrumentality of the United States of America, incl'udin,g obligations that rare unconditionally guaranteed or insured by the agency or instrumentality and that are rated as to investment quality by a nationally recognized investmentratting firm not less than AAA or its equivalent,(e)nri'ncallttble obligations of a state or an agency or a county, rntamcipaht,y,or other political subdivision of a state that have been refunded and that rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and(d) any securities and obligations now or hereafter sauthorizeel by Texas law that are eligible to refund,retire or otherwise discharge obligations such as the Obligations. The City has additionally reserved the right,subject to satisfying the requirement of(I)and(2)above, to substitute other Deieasarrce Securities tier the Defeasimcc Securities originally deposited,to reinvestment the uninvested moneys on deposit for such de'fb'asartee and to withdraw tier the°benefit of the City moneys in excess of the amount required for such ilefesisance, fCr't,Ytt!:t'trr's or;101,t)iOtS('rt+Ont..te::.;'t't'()J'^S file i)rdin l) e a e,:,tahlish specific events of default with respect to the Obligations, If the City defaults in the,payment of the principal of or interest on the Obligations when due or the City itfttuhs in the observance Or perhntnaarce of arty or the covenants, conditions, or obligations of the City, the failure to perform which nine tally,adversely affects the rights iii the owners(Arlie t)bligat'ions including but not limited to, their prospect or ability to be repaid in accordance with the Ordinances,and the continuation thereof lbr a period id(t(i days after notice of such default is given by any owner to the City,the Ordinances provide that any registered owner is entitled to seek a writ of mandamus from a court of proper jurisdiction requiring the City to make such payment or observe and perform such covenants, obligations, or conditions. The issuance of a writ of mandamus may he sought if there is no other available remedy at law to compel performance of the Obligations or the Ordinances and the City's obligations are not micerrairr or disputed. The issuance of a writ of mandamus is controlled by equitable principles, s,) rests with the discretion of the court, but may not be arbitrarily realised. There is no acceleration of maturity of the Obligations in the event of'default and,consequently,the remedy of mandamus may have to be relied upon horn year to year."The Ordinances do not'provide for die appointment of a.trustee to represent lieinterest of the holders of either series of the Obligations upon any failure of the City to perform inr accordance with the terms of the Irdinances, or upon any other condition and accordingly all legal actions to eartforce, such remedies would have to undertaken of the initiative of; and be: financed by, the, registered owners of the Obligations. On lune"it), 20(16,the'Texas Supreme Court ruled in l'ooke r. C'rrt'of A'frr,t'ra, 197 £i.W.3cl :),;r5(Tex.2006) that' ai waiver of sovereign irnntunity in a contractual dispute 'mist be provided for by statute in `clear awl unanrbiguaus"language. Because it is 'unclear whether the, "Texas legislature has effectively waived the City's sovereign immunity from a scan l ar money damages,s, o..gistered owners of tithe' series of the Obligations may not be able, to bring such a suit, against (,.'icy liii breach of the Obligations of covenants contained in either Ordinance, liven if a judgment against the City could be obtained, it could not be enforced by direct levy anu'i execution against the City's property. Further,the registered owners cannot themselves foreclose on property within the City or sell.property wit t'in the City to enforce the tax lien on taxable property to pay the principal of and interest on the ()litigations. Chapter 1371 of the Texas Gnvenuneul Code, which pertains to the issuance of public securities by issuers such its t'hci City, permits the City to waive sovereign inmuunity in the proceedings authorizing its obligations. The City has relied upon Chapter 1.:'71 in connection with the issuance of the Obligations,but the City has not 'waived sovereign imuu,rniry. 'The City is eligible to seek 'chef front its creditors under Chapter 9 ol'the U.S. Bankruptcy Code ("Chapter 9"'). Although Chapter 9 provides for the recognition of a security interest represented by a specifically pledged source of revenues,the pledge of ad valorem taxes in support of a general obligation of a bankrupt entity is not specifically recognized as a security interest ruiner Chapter 9, Chapter 9 also includes an automatic stay provision that would prohibit,without Bankruptcy Court approval, the prosecution of any other legal action by creditors or registered owners of the Obligations of an entity which has sought protection under Chapter S).Therefore,should the City avail itself of Chapter 9 protection from creditors, the agility to enforce would be subject to the approval of the Bankruptcy Court(which could require that the action be heard in Bankruptcy Court instead of other federal or state court'), and the Bankruptcy Code provides for broad discretionary powers of a Bankruptcy Court in acltrurtistering any proceeding brought before it,The opinion of Bond Counsel will note that all opinions relative to the enforceability of the Obligations are qualified with respect to the customary rights of debtors relative to their creditors,principles of sovereign immunity and by general principles of equity which permit the exercise of judicial discretion. TAX INFORMATION An VALOREM TAX LAW "The appraisal of property within the City is the responsibility of the Brazos Central Appraisal District(the"Appraisal District"). Excluding agricultural and open-space land, which may be taxed on the basis of productive capacity,the Appraisal District is required under Title Texas Tax Code(referred to herein as the"Property Tax Code")to appraise all property within the Appraisal District on the basis of 100% of its marked value and is prohibited from applying any assessment ratios. In determining the market value of property,different methods of appraisal may be used, including the cost method of'appraisal, the income method of appraisal and the market data comparison method of appraisal,and the method considered most appropriate by the chief appraiser is to be used.State law further limits the appraised value of a residence homestead for a tax year to an amount not to exceed the lesser of(1)the property's market value in the most recent tax year in which the market value was determined by the Appraisal District or (2) the sum of(a) Il:)f9r'i, of the property's appraised value for the preceding tax,year,(b) the appraised value of the property for the preceding tax year and(e)the market value of all new improvements to the property. "The value placed upon property within the Appraisal District is subject to review by an Appraisal Review Board,consisting of three members appointed by the Board of Directors of the Appraisal District. The Appraisal District is required to review the value of property within the Appraisal District at least every three years. The City may require annual review at its own expense,and is entitled to challenge the determination of appraised value of property within the City by petition filed with the Appraisal Review Board. Reference is made to the Property Tax Code, for identification of property subject to taxation; property exempt or which may be exempted from taxation, if claimed; the appraisal of property for ad valorem taxation purposes; and the procedures and limitations applicable to the levy and collection of"ad valorem taxes. Article VIll of the State Constitution (''Article VI11") and State law provide for certain exemptions front property taxes, the valuation of agricultural and open-space(ands at productivity value,and the exemption of certain personal property from ad valorem taxation. 6 Under Section I-1.),Article VITT,and Suite law,the governing body of a political subdivision,at its option,inay grant: (I)An exemption of not less Ibait S3.,000 of the Marko value of the residence homestead of persons u5 years of age or older;(2)An exemption to die disabled Iron) ill id valorem taxes thereafter levied by the political subdivisioie and(3')Au exemption of up to of the market value of residence homesteads, 'The rniniamm excaription under this provision is $5,000. In addition State law mandates a complete exemption for the residential homestead of disabled veterans determined to be 1,00','/0 disabled by die IS, Department of Veterans Affairs. Further, the surviving spouse of a deceased veteran who had received a vlisability rating ol 100°Ni is entitled to receive a residential hvatiestead exemption equal to the exemption received by the deceased spouse until such surviving spouse remarries. In the ease of residence homestead exemptions granted under Sect ion 1-b,Article Vill,ad valorem taxes may continue to be levied against the value of homesteads exempted where ad valorem (axes have previously been pledged for the payment of debt if cessation or the levy would impair the obligation oldie emit'act by winch the debt was created. State law and Section 2, Article Ville mandate an itdditional property tax exemption for disabled veterans or the surviving sponse or children of a deceased veterao who died while on active duty in the twined forces; the exemption applies to either real Or personal property with the amount of assessed valuation exempted ranging from$5,000 to a maximum of$12,000. Article VIII provides that eligible owners of both agricultural land (Section I-d) and open-space land (Section 1-(1-I), including open-sp„iee land devoted to Firm or ranch purposes or open Space land devoted to(iii bet production,may ded to have such property appraised for ptopetty taxation Ott the basis of its productive capacity, The sane land limy not be qualified under both Section Id and I ci I, crtich Viii,Section I-n of the"Texas Constitution provides fin an exempuon from taxation fiat "goods-iii-transit,'"which are defined as(i)personal property acquired or imported into the State and transported to another location inside or outside the State, (ii) stored under a contract for bailment in public warehouses not in any way owned or controlled by the owner of the stored goods,and(iii) transported to another location inside or outside(lie State within 175 days of the date the property iv:ts acquired or imported into the State, The exemption excludes oil, natural gas, petroleum products, atterall and special inventoiy, including motor vehicle, vessel and out-board motor, heavy equipment and manufacitired housing inventory. On December 8, 2011, the Council passed an ordinance approving taxation on certain goods-in-transit. Aber taking such official action, the goods-in-transit remain subject to taxation by the taxing unit until the governing body of the taxing unit rescinds or repeals its. previous action to tax goods-in-transit If, however, a taxing unit took official action prior to October 1, 2.011 to tax goods-inetransit and pledged the taxes itnpos.ed on the goods-in-transit for the payment of a debt,taxes may continue to be imposed on goods-in-transit until the debt is discharged,if cessation of the imposition of the lax would impair the obligation of the contract by which the debt was created, Nonbusiness personal property., such as automobiles or light trucks, are exempt.. from ad valorem taxation unless the governing body of a political subdivision elects to tax this property, Boats owned as nonbusiness property are exempt from ad valorem taxation., Article VIII,Section I provides for"freeport property"to be exempted from ad valorem ta.xation. Freeport properly is defined as goods detained in Texas for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication. Decisions to continue to tax may be reversed in the.future;decisions to exempt freepori property are not subject to reversal, The City and the other taxing bodies within its territory may agree to jointly create tax increment financing.zones within the City, under which the tax values on property in the zone are"frozen"at the value of the property at the time of creation of the zone, The City also may enter into tax abatement agreements to encourage economic development. Under the agreements, a property owner agrees to construct certain improvements on its property. The City in turn agrees not to levy a tax on, all or part of the increased value attributable to the improvements until the expiration of die agreement. The abatement agreement could last for a period of up to 10 years. See "- Tax ABATEMENT Poun""for a discussion oldie City's economic development guidelines and criteria. CONSTITLITION AL Am EN PM ENT In a statewide election held on September 13, 2003,voters approved an amendment to Section 1-b, Article VIhl of the Texas Constitution, that authorized a county,city,town or junior college district to establish an ad valorem tax freeze on residence homesteads of the disabled and of the elderly and their spouses„City Council did not.take action to establish the tax limitation. Voters within the City were authorized to submit a petition signed by five percent of the registered voters of the City requiring the City Council to call an election to determine by. majority vote whether to establish the lax limitation., A petition was submitted and nit election was held on May 10, 2008„ The voters of College Station voted to approve the ad valorem tax freeze. 'The City can provide no assurances of the impact, if any, implementation of this ad valorem tax freeze may have on the City's finances. Under the tax freeze, the total amount of ad valorem taxes imposed by the City 1)11 a homestead that receives the exemption may not be increased while it remains the residence homestead of that person or that person's spouse who is disabled or sixty-five years of age or older, except to the extent the value of the homestead is increased by improvements other than repairs, If a disabled or elderly person dies in a year in which the person received a residence homestead exemption.,the total amount of ad Valorem taxes imposed on the homestead by the taxing unit may not be increased while it remains the residence homestead ofthat person's surviving spouse if the spouse is fifty-five years. of age or older at the time of die person's death. In addition,the'Texas 1,..„.egislature by general law may provide for the trio isfer of all or a proportionate amount oldie tax limitation applicable to a person's homestead to be transferred to the new homestead of such person if the person moves to a different residence within the taxing unit, Once established, the governing body of the taxing unit may not repeal or rescind the tax limitation„ 7 isrv't;t..tt\'F lAxWvtkAlNn fltort.t.a,At-:tt"11",xx ftArk By the tater of r�epaalctrnberr ai'1'r oar 0(t clays after the certified appraisal toll is tel to the City, the City Council adopts at tax r^mfel per +I0.ttl taxable value for the current yeas. The tax rate consists of two atenaapone'ots: (f) a, out tau funding of maintenance and operation expenditures,and(F)as rate lire debt service, tinder the Property Tax Code, the City must annually calculate and publicize its "effective tax rate"and "rollback lax rate". A tax rate connot be adopted by the City Council that exceeds the hawer of the rollback lax rate or the i.iffeetive lax rate until two public hearings are held on the proposed tax colt: hallowing a notice of such public hearing,(including the requirement that notice, be posted on the City's twebsite rf City owns, operates tic controls an inlet net tweebsil'e and public notice lie given by television if the City itas a free access to ;a television channel) and the City Council has otherwise complied with the Itegal requirements for the adoption of such tax rate, If the adopted tax rate exceeds the rollback tax rate the qualified voters of the(-'ity by petition may require that an election be held to determine whether or Poet to reduce ulte tax rate adopted ptcd for tree r'arrrcu't lair to the rollback tax rale. "1„Afecti'v'c tat ratite" moans Me rate Mat wdll produce' last year":a tried tax levy (adjusted) from this year's told taxable values (adjusted), "Adjusted"means lost values;ire not dru.Iltrded in the,calculaution rill"taxi yew's taxes and new value.,a-i,tt:rwcrl'iticlrucle.etl lira itlae^ycra➢c's taxable\educe, "Rollback lax rote" Xtace.nans the rale Ilse will produce tonal year's maintenance and operation rare levy (adjusted) homer tluis year's values (adjusted) multiplied by II,tpli plus a rate that will [troch.oee this year debt service from too year's values I uiod"jtusted,) redivided, by the anticipated tax collection rate, the Properly 'Fax Code: provides that certain cities Mid counties in Ille State may submit a proposition to the voters to authorize art additional erne-half cent sales larx,on retail salcta of taxable items, lf the:.addilioma➢l tax is levied„, the effective as rate and rite rollback tanx rate calculations are required to be offset by the,revenue that will be generated,by the sales l::t.x err➢the current year. Reference is e for definitive rcqu" made to the Property t"''"od wrcurarenrs for the levy t➢rtrl collection of ad valorem taxes and IPte calculation of the various defined tax rates. Ptiot'E,l't't"v ASSESSMENT AND 11rAx'PAYMENT Property within the City is generally assessed as of.January I of cacti year. Business inventory may, at the option of the taxpayer, be assessed ,as of September. Effective January 1,2012,oil and gas reserves are assessed on the basis of a valuation process that uses pricing information contained in the most recent published Early Release Overview of the Annual Energy Outlook published by the United States Energy Information Administration, as well as appraisal formulas developed by the State Comptroller of Public Accounts. Taxes become due October I of the same year, and become delinquent on February 15 of the .following year. Taxpayers 65 years old or older are permitted by Slate law to pay taxes on homesteads in lour installments with the first due before February IS of each year and the final installment due before August 15. PENALTIES AND INTEREST Charges for penalties and interest on the unpaid balance of delinquent taxes are made as follows: Cumulative Cumulative Month Penalty Interest Total February e,'r 7% March 7 2 'i April 8 3 1 1 May 9 4 13 June 10 S 15 July 12 to l8 After,holy,penalty remains at 12%,and interest increases of the rate of IeI^ir each month, 1n addition, if an account is delinquent in July,an amount up to 20%attorney's collection lee is added to the total tax penalty and interest charge. Under certain circumstances, taxes which became delinquent on the homestead of a taxpayer 65 years old or older incur a penalty of"8%per aanreum With no additional penalties or interest assessed. In general,property subject to the City's lien may be sold, in whole or in parcels,pursuant to court order to collect the amounts due. Federal law does not a➢llrtw for the collection of penalty and interest against art estate in bankruptcy. Federal bankruptcy law provides that an automatic stay of action by creditors and other entities,including goverrttnerutal units,goes into effect wit It the tiling of any' petition in bankruptcy, The automatic stay prevents governmental units from foreclosing on property and prevents liens fin'post-petition taxes from attaching to property and obtaining secured creditor status unless, in either case, an order titling the stay is obtained f"rout the bankruptcy court. In many cases post-petiticut taxes are paid as an administrative expense of the estate in bankruptcy or by order of the bankruptcy court. 8 (ITV ACTLICATIWY PIZOPERTY TAX.CODE I he City grants an exemption to tin market value of the residence homestead of pin sons 65 years of age or older of.!li30,000, The tilty has not granted art additional exemption of.20% of the market value of residence homesteads, Ad valorem taxes are not levied by the t„'ity against the exempt value of residence homesteads for the payment of debt,The Coy does not lax nonbusiness personal property. The City does.pernrit split payments, but discounts are not allowed, The City does collect the additional one-half cent sales tax for reduction of ad valorem taxes, The City has adopted a tax abatement policy (see FAX INFORMATION TAx AnAitmE.Ni Poutv'"). An election was held on May 10,'2008 and the voters of College Station approved the ad valorem tax freeze for residential homesteads for disabled and age 65 Or older persons. Brazos County collects the taxes for the City, TAX AtiAlTMEN'Y POLICY he City has established tax abatement guid.elines and criteria for economic development prospects ifl the In order to be eligible for desig,nation as a Reinvestment Zone unit receive tax abatement.,the planned improvement: 1 Must be expected to have an increased appraised ad valorem tax value cif at least St,000,000 based 1porn the Brazos Central Appraisal District's assessment of the eligible property. 2, IVinst be expected to prevent the loss of pa.yioll or plain, increase or(ireate a payroll on a pi:mam:at basis in tin t..,!ity, the thllowing factors among others should he considered in deterrniunig whether to grant tax abatement and, if"so,ilium porceffiage of valth, to be abated and the duration of the tax abatement I, Value of land and existing improvements,if any; 2. Type and value of proposed improvements; 3, Productive life of proposed anmovereents; 4. Number of existing jobs to be retained by proposal improvements; :5. Ntirnber of type of new jobs to be created by proposed impro'vements; 6. Amount of local payroll to be created; 7, Whether'persons residing or projected to reside within the City will have the opportunity to fill the new jobs being created: 8. Amount of local taxes to be generated directly; 9. Amount of property tax base valuation which will be increased dud rig term of abatement and after abatement,which shall include as definitive commitment that such valuation shall not,in any case,be less than SI,000,000; 10, The costs to he incurred by the City to provide facilities or services directly resulting from the new improvements; 11, The amount of ad valorem taxes to be paid to the City during the abatement period considering(a) the existing values, (b)the percentage of new value abated,(c)the abatement period,and(d)the value after expiration of the abatement period; 12. The population growth of the City that occurs directly as result of new improvements; 13. The types of public improvements,ilany,to be made by the applicant seeking abatement; 14. Whether the proposed improvements compete with existing businesses to the detriment of the local economy; 15. The impact on the business opportunities of existing businesses; 16. 'The attraction of other new businesses to the area; 17. The overall compatibility with the zoning ordinances and comprehensive plan for the area;and/or 18. Whether the project is environmentally compatible with no negative impact on quality of life perceptions. Neither a Reinvestment Zone nor abatement agreement shall be authorized if it is determined that: L 'there would he substantial adverse affect on the provision of govennnent service or fax base; 2. The applicant has insufficient financial capacity; 3, Planned or potential use of the property would constitute a hazard to public safety,health or morals; 4. Violation of other code or laws; 5, The agreement was signed after the cominencernent of construction, alteration or installation of improvements related to the. project;or 6. Any other reason deemed appropriate by the City Council EcoNorync hr the fall of 2013, the College Station City Council adopted an Economic Development Master Plan.This document represents the City's first such effort and joins the many other Master Plans, Neighborhood, Corridor, and District Plans created to aid in successful itoplementation of the Comprehensive Plan, 'the Master Plan defines the goals and objectives of the City's economic development efforts and lays out strategies and, detailed actions to achieve these goals and objectives, The plan specifically identified six strategic initiatives that the City's economic development program area should focus its eftbrts on' sustain and enhance high quality of life; support and partner with Texas A&M University and the 'res.as A&M University System; support retail development; support and stimulate biotechnology research and advanced manufacturing;support and stimulate health and wellness market;and support and stimulate sports, entertainment,and hospitality market. it . .., Furthermore, the Plan also details how the plan should be monitored and aprlated over time, and identifies a series of formal economic developnient policy guidelines that vere also adopted. These guidelines stale that in order to ensure the ongoing competitiveness of the community, no State authorized incentive should immediately be discounted. The Texas Constitution and multiple State statutes identify the role of eamontie development by both the State and its municipalities as a public purpose, WInle recognizing there is no standard strategy,policy,or program for economic development, the Texas Legislature has created a vast array of tools that local governments have at their disposal. The objective of these tools is to not only encourage development and diversification of the Texas economy, but to simultaneously enhance the participating conummity's overall quality of life. Incentives to consider may include, but not be 'United to: Chapter 380 fitiancing:development fee rebates;enterprise zone program sponsorship; Freeport exemptions;in assistance; land transactions; delayed,annexation or limited purpose aMICX3f1011;special districts,reinvestment zones(tax abatement or tax increment);and fast track development process, The City and the City of Bryan, "Texas have also entered into an "Interlocal Cooperation and Joint Development Agreement" (the "Inter:local Agreement") in connectiot»vith implementing a joint economic development program known as the Joint Research Valley ElioCorridor Development Project (the"Project"), Under the terms of the. Intel:local Agreement, the f)ty will makc funds available to the City of Bryan,. and the City of Bryan wild make funds available to the City, for certain defined public infrastructure projects that are intended to enhance development(...if the Project, 1 he obligations of each city urn.ler the Inte:local Ago:Totem shall not constitute a debt (Or pm poses or any provision of the State Constitution.and are intenthal to be paid from the general revenues of each city, [Remainder of Page.Intentionally 1.4fr.81ank] 10 DEBT"I`.nac I I VALUATION, t:nu.OIsLIG,�'rat)t: t 2(11,51'2016)\t ark el w'a)Lolion 1i;,t rib lisheal Pay Brta?os C.'enttat Appraisal Dr';I60 ;pi "1,31) ' "l (excluding exempt property) less E xcnaptions/Reductions at I00"%1,Nlaka Value: product ivily Loss $ 92,12.6,938 Over 65 Boniest cull Exemptions 86,04 5,3 13 M ember A rined Service Surviving Spousr 557,000 F reel)arl I ?,682,228 Homestead 6,085,4101 ,Abatements I0,042,880 227,2➢4,2,15 ._ 2(')1.5/2016 Taxable Assessed'Valuation ,..._,,..",.,,. Y,'7,162,7338,280...,11 Debt Payable from Ad Valorem Taxes(as of 1/.')1/201(0`%a General Obligation traprrav(aatint Bonds,Saarics 2008'''') 1,615,00I) Certificates of(.,)blt ,at ion, Series 2008" 4,820,000 General Obligation Refunding Bonds, Series 2009 2,525;(.100 (':'ertifcafes of Ohli1'tt ion, Series 22009 I1,i,745,000 Cicneral Oblicr;9tion improvement Bonds,Series 21)1)9 2,270,000 General Obligation Rrliutding Bonds,Series 21)10 20,685,0(11) (':'ertif"icates of Dbltg.it ion,Series 2.1)10 2,325,0(.)0 General Obligation Improvement Bonds, Series 2010 I5,135,00O Certificates of Obligation,Series 201 I 6,520,000 General Obligation Improvement Bonds,Series 201 I 440,000 Certificates of'Obligation,Series 2012. 14,035,000 General Obligation Improvement and Refunding Bonds,Series 201'2 14,4 10,000 Certificates of Obligation,Series 2013 9,120,000 General improvement and Refunding Bonds,Series 2013 16,715,000 Certificates of Obligation,Series 2014 30,980,000 General blip rovement and Refunding Bonds,Series 2014 30,810,000 The Bonds 40,890,,000 The C'ertificatcs'"'I 75,720,000 257,760,000 Less:Self Sup port trig Debt' $ 139,410,000 Less:Interest and Sinking Fund as of 9/30/2015 2,814,048 Net Debt Payable front Ad Valorem Taxes $ 115,535,952 Ratio ol'Net Debt Payable from Ad Valorem Taxes to Taxable Assessed Valuation'`') 1,61114, 2016 Estimated Population- 1.06,636 Per Cap it a Taxable Assessed Valuation - $67,170 Per Capita Net Funded Debt - $1,083 rst (I) Certified taxable assessed valuation for tax year 20l6 as aep('rrted by the Brazos(.'cultat Appraisal District. This amount is subject to change during rustling year, (2) Excludes the Refunded Obligations, (3) A portion of the Certificates will be internally alloctited by the City as being payable lit,m the surplus revenues from the respective enterprise funds. Approximately$7,250,000 of the proceeds of the I'cnificates will pay for improvements to the I'ity's water system. The debt service on this portion of the Certificates,will he internally allocated by the City as being,payable fruits the surplus revenues horn the respective enterprise I'inads, Although the City expects to pay Iin this portion of the Certificates with surplus enterprise finds,the Certificates are secured solely by a pledge of ad valnrern taxes and by to pledge of combined utility system surplus net revenues limited to$1,000, See'"'"1110 OESI,IGA"Ill)NS- Stau't1R1TY'AND Slttteu PAYMENT," There is no gnat antee that payments from these enterprise funds will be made. If payments are not made from the enterprise funds,the City wilt be required to levy ad valorem taxes in,unounts sufficient to make such payments. CO In the past,the City has sold cenifiernes of''obligation to finance projects for the("'ity's water and sewer system,and electric system and has internally allocated portions of this debt as payable f"iom the respective enterprse funds, 'the self-supporting aanounts listed above are projections of debt that is expected to be retired by the City based on actual historical payments f'rorn these funds to pay for debt service the outstanding certificates of obligation. 'There is no guunintee that payments limn these funds will continue in the future. Includes a potion of the Obligations.See I)L'',li't INFORMATION•- ' �I"Atil..,l.5 Il) til':I,.r tit-"F'P(pte7"IPlta Dun" (5) Net of Int'eiest and Sinking Fund as of September 30,2015. 11 T1tSls 2 I la'xAtu r„:A,8sr',s"'4e"t"a"b'14t,t.!'il'ItOlNS BY CA')1'D^:M1.attra',v' "Taarablt:Appraised'Value,Fiscal Year Ending,September';0, 2016 2015 201 4 ')per of %a l' ',No a i Cal cg ary Amount Total Amount Total Amount Total Real,Residential,Singe Ftaut'aiIy 8 3 142,774,761 53.35% 8 3,(i57,)836,541 53.15(1,E, 13,449,698,417 53.49%, Real, Resitienldal,'Mnulti-Faamily 1,326,2,89,539 17,95%, 1.296,417,(6I Ili.ti 114, 1,121,645,054 17,39% Real, Vacant Lots/II ailas 142,089,823, 1.92% I411,(I'77,944 2.)15%1 142.441,840 2:.21%, Real,Acreage(Land Only 92,882,946 1.2611ti, 109,67 5,901 1,59% 1 11,056,120 1.`72p1C, Real, Farm and Rtnteh nip it LmCI1)s 11)8,202,479 I.46%,:l, 74,289,622 II,08%, 76,318,782 1 18% Real,C'aucatncu'eiaal/li laustriaa.l 1,3,30,864,915 18.01'1,1, 1,20.4,879,922 17.51% 1,159,9111,,.1ip7 I7,99%, Real,f)il,('3uas r&,O1her8)integralReserves. 111„793 941 0,)5114, 3,227,1)32 0,05L''4t, 3,3'29,602 0.1)5'N, R N.111 and Tangible Personal„ Gtilitic,,s 30,94,4,851) 0.'l7 s,"u', 37„67,3,140 0,55'''c', 35,2611„190 0,55'?=i, .I°;:aaagiblel°r.°otsoon),l:3an'siness 369,625,111)1 5,00'4„ 330,937,2'90 41,819'4 311t.648,040 4.94,', '1'"'anOble Personal,011oc'r 2,02.4,340 (1.03'11, `'..,096,570 It,03'2u 2,1.1)1,6e10 0.0351 Real Property Inventory 1'7.672,671 0.24'I''1, I3,256,668 0,1.9% 18,040,612 11,'28'% Speciallnvenaouy 15,'787,1)8(1 (1.21')1, 10,534,560 0.15°'', II0.29'3,53)) 0.40'"4, f-_;xer'npt Propert„y A dins tmeol _ _ 0.004'. I1.00"i(n - 0.1)Il'1,a. l oinl Appraised Vaalu,e'Be bre Exemp)iinns 8 7,389,952,525 8 6,1)li l,9 i 53_., % 11 (s.44,8,Y42 2,74,.... ...100,_,._...„... 1 fY1Gl.O4;1,'I„ 1 ➢1l'�,,3.;.n 10'O,l')t3r"ie lf).0'E),'m Less: Total Exempt ii,rats/Reda.aclions 227,214,245 227,302,01e) 21'7,7'23,264 (taxable,Assessed Vales' $7,162,738,„210 i3lWM 9,,01)1� + 'Cs" fi,'3�0,1 E'),( ')'axahle Appraised Value,Fiscal Year Ending Sep tcanber 30, 2013 .�_.._.�. 21)12 ._.�._.. %of % if C'aalef4roy Amount Total Amount Total Real,Residential,Single-Family $3,277,087,380 53.12% $3,169,329,494 53.29'`14, Real,Residential,Multi-Family 1,070,207,772 I7,35`91, 996,353,707 16.75% Real,Vacant Lots/Tracts I I8,939,480 1.9314 115,1185,384 1.93% Real,Acreage(Land Only) 171,879,67() 2.79% 183,146,931 3,08"2,4, Real,Farm and Ranch improvements 22,726,592 0.37% ➢8,078,677 0.30% Real,C'ontaaercial/latdwstrial 1,121,943,869 I8.19ari, 1,088,046,201 18.29% Real,Oil,Gas&Other M moral Reserves 5,391,913, 0.09% 5,982,912 0.1011, Real and Tangible Personal,Utilities 35,139,050 0.57% 39,148,700 0,66aa% Tangible Personal,Business 309,881,970 5„1)2% 298,432,950 5,02'!as Tangible Personal,Other 2,217,020 0.04% 2,232,990 0.04'Yo Real Property Inventory 23,728,660 0.381 23,307,800 ().39% Special Inventory 8„851;423 0.14% 8,004,300 0.13% Exempt Properly Adjustment 794,503 0.01% 449,950 0.01% Total Appraised Value Beloi'e Exempt airs S 6,168,789,302 1110.051% S 5,947,600,004 1(11).00% 1_css: Total Exemptions/Reductions 224,476,31E 208,985,002 Taxable Assessed,Value $ 5,944„3,12,987 E8 5,738,615,002 NOTE: Valuations shown are certified taxable assessed values reported by the Brazos Central Appraisal District to the State Comptroller of Public Accounts. Certified values are subject to change Ilare.aughout the year as contested values are resolved and the Appraisal District updates records. 12 '3',i'i:t..E„3 - VALIIA"t'IC)N.„'kN!"n GENERAL RAL,OBLIGATION OFATI Iltsrttt''R't" Rid Po a of"Ne;t Fiscal al •Faeable 0.(.Tax Debt Year '1'axable Assessed to'Taxable Net (1,0, Ended Estimated Assessed Valuation Nei G,O, Assessed Tax Debt 0/3(1 PopulaticaarI) Vaahtationl't PeeC:'apita TaxDebtt�r Vs lustie'nt'rr I°eeCap ita 2 .. �._ _._ _,. .01'd 94,669 8 5455,432,461 $ 57,626 5 99,140,000.,, �,. ..... . 2o,^ .,........,_ 5 1,047.,.. ?(11:11. 97,888 5,738,615,00,2 58,624 96,390,000 1.68% 985 201.3 97,929 5,944,312,987 (i0,70(1 9t5,750,0011 1,63% 988 20,14 l00,3`1'°':II 6,23 1,119,0141 62,067 88,100,0(141 1.'11°,'1, 878 7015 102,211 6,654,600,834 65,062 101,630,000 1.53'0i 094 2016 106.636 7,102 "7383)10 I41 67,170 118,350,000 t"t I.r;,Sa'S,",`"p I„Ii 10 151 d 01V Sotto:l. 'I he(',"nry, (.2) As rcp'iiaatel by the Firaar.o,Cennad Appraisal Distrir;I;stihje;a to change I:luring the eur.aiiin!year, (3,) 'IPayat le:l.loin ail valorem saxes,Dori not inedude sett i lrpaoaa1 i,nd;!;debt, ('I"t Certified taxable aa;e,sxed valuation tin tax year 2006 u:i reposrted by the;IIrar'c,tn t.'wuatr,+I Appraisal District, ihr:M amount is a.reh;jeet to change dining eursu ill g,year (5) t'ne'Itaders the Obligations and excludea.(lit Refunded Obligations, FA'mit,E 4 - 'fl°xx U,.x 'td„f..,r.x V AND Cot t t..t'i ION I lis l'alty Fiscal\'earr General Interest and "1,Current %Total Ended 9/30 "Fax Rat e Fund Sink ing Fond "Tax Levy Collect ions Collections_ 2011 $0.4475 h 0,2273 a 0.2202 Si 24,304,840 99.31`!u 99.76%, 2012, (1.4380 (1,2365 0.20IS 25,043,183 99,1(la1'io 99,83%, 2013 (1.4307 0.2351 0.1956 5 518,! a? c}tt 79.SC}ia,a"% 1010.24'/, 2014 0,42160 0.2.329 0.1,931 26,422,760 99,47% 100,101141 2015 0,4525 0.2594 0.1931 29,800,81,1 99.64%, 100.26% 2016 (1,4525 0.2594 0.1931 32,051,205 90,1616%n tut 90,794, 11r (1) C"'ollectitvart as of tpril 30,2016. A p'ortaaan ot'the(""itli s taxpayer base has elected to provide split payments to the City which will be Blue on part on Time 30,2016, TAKES 5 - TEN LARGEST TAXPAYERS 2015i2016 %),of Total 'Taxable Taxable Nature Assessed Assessed 78sine of Taxpayer of Property Valuation Valuation CP'P College Station I LL.0 Apanvncnts $ 61„098,101 0.85°"% Post Oak M all-College Station, l.,l,C Retail 57,221,280 0.80% Woodridge College Station 1 LLC Retail 56„772,000 0.79%, College Station Ilnspitall.,.P. M'etlical 56,768,410 (1.79% SUP-"Fli Callaway Httuse1.„,P Apalttneltts 51,790,840 0,72% BVP 2818 Place LP Apartments 44,2.60,419 0.62%, Culpepper Family L.P. Housing 42,526,770 0.59%u Weinberg,Isreal&David A'➢kosser [lousing 42,2.74,060 0.599i, Jaune point Maanag,enaent Housing 41,841,7'98 0.58% CVCS LW Idolising 3,9,017,880 0.56%, 5 494,471,558 Ci.90% GENERAL Oisi.IC;ATIoN Duet'LIMITATION. , ,No general obligation debt limitation is imposed on Ike City under current Slate law or the C'ity's 1totrle Rule Charter(see"-114L C11:3L IGA'f'IONS-'1-Ax RATe.1_IMItATItIN"), 113 TABLE dro . '➢'A.A',APF,Qt•/Ai 1" Nie: II%Isr.xiom.ruiTax supported Principal and Interest Requirements(201'71................................ $13,875,125 (r! $11,I,9'567 Iaax Rate at 99%C'rr0lert ion r Pro(huces ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,••,,,..,,,,,,, 13,875,177 ixdet Average'Tax Supported,Principal and Interest Requirements(20E(r)O:3(i,). ....................... . $ 1„683,5'76 Su)' $0.1(118,36 Tax Rate at 99?4i('oIlect ion Produces ...........................................•.................. $ 7,681,928 (1) Includes the Obligations and excludes the plait"luitted OWigwu'oo'rs unrl supp mg richt. TABLE BLE 7 A@ntA't. In1s nl ta;A)d""„ )b't?tll..lkinttYfv 10lar;W'bl' Expenditures of the various taxing entities WitViiii) the terranouyr of the City a IX paid out Of ad valorem, taxes levied by such, entities on properties wvithin the City. Such entities are independent of the, City and uauasy incur 1,1i„growings to finance their expenditures. This statement of direct and eSt.inrotcd overlapping ad valorem tax debt("Tax Debt") was developed by the City front i riduunalion obtained from, the Eirtaro:(;'tunlra➢ Appnoaa,isal District 1, l;.xcepnt fete the wrtartuat., reAarti,n➢;to I he City,the City has,not, irtdelleaa(.le:nullly vet tried th9.i aconite)/or completeness of c,udt irtli"nne tioru,anti no putc(rrt should rely upon,such ttrli.arn'aratiott as being accurate or complete. Fan Mel more,certain u0 the entities listed may have issued additional' debt since the date hereof, and sauch, entities may (rave: programs requiring the issuance of substantial amounts of additional debt, the amount of which caarrraot be determined. 'The 4;1:Mowitn,,wa, table reflects the estimated share of overlapping, Fax Debt of the City, City 'Total 151Inated Oveerlapproi'ug ?'4)V,1 2015'Taxable 7.016 Tax Debt as % Tax'Debt Assessed'Value 'l,ax Rate of 3131/20116 Applicable of 3/31/2016 City of College Station $7,162,738,280 0.4525 $ 118,350,000 1000.00% 11,8,3,50,000 Brazos County 14,654,550,199 0.4850 92,090,000 47.07% 43,346,763 Bryan 1S1) 5,824,326,1)08 1.35,00 160,105,000 2.05% 3,282,153 College Station 11,SO 7,188,844.733 I.3(530 325,805,,(100 88.50% 288,337,425 'NA Direct and Overlapping,Funded Tax Debt $453,3116,341 Ratio of Direct and Overlapping'Funded 3'ax Debt to Taxable Assessed Valuation 6.329% Per Capita Overlapping Funded Tax Debt S 4,25I Source: Municipal Advisory Council of'Texas, (I) Certified taxable assessed valuation for tax year 2016 as reported by the Brazos Central Appraisal, This amount is subieca to change during ensuing year, i•2) Includes the Obligations and excludes self supp oning debt, 141 DEBT INFORMATION TABLE 8 - AD v'AL-OREM TAX DEBT SERVICE REQUIREMENTS' Total Tie: Year Total Less:The Less- Tax SuDporied End 0 utsiandimi Refunded The Bonds The Certificates 151-1I-Sup"orting Debt Sect ice 9�3t0 Debt Obligations Principal Interest Total - Principal interest Total Debt Service`'` tequirements'" 2016 $ 28_338,791 $ +91,304 $ 185.303 $ 185,303 5 15.59-3,13= $ 12_ 9_659 2017 27 672,525 4,009,953 S 2.470_000 1,643,025 4.11 3.025 $ 21145.000 00 $ 1,049,682 _s 3,094.682 16,995,154 13.8175_ 15 2018 25.615.438 3,502,218 2,090,000 1,566.075 3,656.075 1_075.000 896 594 1_921,594 16,019.551 14_671_1 2019 23.865,35$ 7.637.630 1.400.000 1,478,825 2,878.825 1,085,000 843.844 1, 28.844 15_315._76 10.720,120 2020 23,887,479 2,641.904 1.475,000 1,406.950 2,881.950 1,140.000 788,219 1,928,2111 15_377,333 10.678.4 2 2021 22.447.017 4,435.107 3,200,000 1.290,075 4,490.075 1.195.000 729,844 1 924.844 15.0123,25E 9 403,582 2022 20.108.460 4,468,595 3,400,000 1.125.075 4,525.075 1,260.E 00 668.469 I_928_479 114.072,744 9,020,665 2023 19.149,674 4,502.358 3,605,000 949.950 4.554,950 1.31 ,000 604.094 i.919,094 12.09 ,98; 9,027.377 2024 18,4 7.941 4.516.386 3,795,000 764_950 4.559,950 1,390,000 536_469 1_926.469 11 760,901 8_647_072 2025 16.719.956 4,544,458 4,020.000 569.575 4,589,575 1.460,000 465.219 1.925_219 11,Z18,831 1,461 2026 15,475,974 4,567,095 4,250,000 362.825 4.612,825 1,535,000 390,344 1,925,344 10?602,186 6,844,861 2027 13,294,013 4.593,966 4,425,000 212.325 4,637,325 1,085,000 330,269 _.41 .269 9,241,614 5,511,027 2028 12.874.992 2,639,663 2,765,000 138.697 1.903.697 1,1 15.000 'a7 419 1 2 419 7.948.671 6_c_02_774 2029 10,276,820 - 455,000 104_200 559,200 1.140_000 273,444 4 - ,: 6.86;971 -,785.49 2030 8,079,523 - 465,000 93.559 558,559 1,165,000 246.784 1,41 1: 4 956.3 76 5,t93.491 2031 6.415,905 - 475.000 82.100 557.100 1,200,11110 214,950 1 414 95t1 4,741.649 3,646.306 2032 5,817.894 - 490,000 69.731 559,731 1.735.000 178,425 1.413,425 147.54-1 -_ -=8.506 2033 4.407.100 - 505,000 55,725 560.725 1.275 000 140,775 1,415,775 2.984.413 3,399,188 2034 3.073,938 - i20.000 40,350 560,350 1..310,000 102,000 1.412.000 2.244.800 2.801.488 2035 - - 535,000 74.525 559.525 1_350_000 62,10 1 1.4 __100 413.450 1,553.175 11036 - - 550.000 8.250 558.250 1.395.000 20.925 1.415_t25 471.225 1_552.950 $305.963.808 547,450,634 $ 40.890.000 $12.172.090 $53.062,090 S 25.720.000 8 8.839,866 534,559.866 S 197,041,062 5 149_09 4_069 111 in the past, the City has sold certificates of obligation to finance projects for the City's water and sewer system,and electric system and has ntemti44 allocated portions of this debt as payable from the tespecttve enterpnse funds. The self-supporting amounts listed above are projections of debt that is expected to he retired by the City based on actual historica'payments from these-und r for eta service the outstanding certificates of obligation- There is no guarantee that payments from these funds will continue in the Future includes a r ortton of.he Obligations See -TABLE -=8r_i. SUPPORTING DEBT"and the accompanying footnotes 15 TA FILA 9 - II N'VEREST dd,a.)SINKING fia,r0 f 0.1061,If PROOA.:1110[4 'rOtal Net faX Slip ported Debt Service Requirerricins,Fiscal N'car Ending Sepi ember 30.„20 1 6(1" $ 1'2,5'39,659 Interest and Sinking kind,September 30,.2015(2" $ 2.8)4,048 Calcuat eel Interest.and Sinking Fund Tax Levy t,?. 99'"ii•Collect ion 13,689,53'1 Budget cd.Invcsi merit Earninp 20,000 Budgeted'Transfers .363,101 I 6,886,680 Esrirnated Balance,September (0,2016 $ 4„34 7,02 I.,55 ....... (1) Excludes self-iiimpoo tug debt.Includes the Obligations tanil excludes the Refunded(..)bligations. (...0 The outstanding portion of Ow(...'ertificates of Obligation,Series 2009,supported by the Conviadnin C'enter,hove been paid Of to fill/IV;our,:transfer in ihe minium rd.157,979 48 ro Me Interest and Sinking Fund.That amount will be used to pay(it Intone paymenis of the("mi)'ii:auto of(../bligation, Series'2000 itupponed by the Convention f. III'!, Imittf.;10 -Ski.„32-Stivrt trffusiG 111f.fru' 'Year Ti End Eleciric Was c(Wv Wei' Wat et C'envent ion Parking Self-Support log 9/30 Fund I l' Fund I:2) Fund1 Center1'0 Landlie" U,arageno Debt Service 20 1 6 $ 5,884,4.2.5 $ 4,227,31 8 $ 4,596,192 $ 9,374 $ 4.106,560 $ 46.3,925 $ I 5,587,793 2017 5,908,926 4,490,350 5;722,669 ,13,599 359,135 470,475 1(.5,995,154 2018 5,775;701 4,176,400 5,468,379 I 2.,724 36 1„6 1 0 224„738 16,019,551 10 19 5,603,720 3,872,98 1 .5,240„,29 1 17 361 363,448 727,475 15.,3 15,276 2020 5,627,367 3,888,528 5,265,629 '7,074 364,335 224,400 I 5,377,333 2021 5,60.5,883 3,838,436 5,207.529 6,874 364,5.35 - 15,023,256 2022 5,578,301) 2,940,106 4,183,329 6,674 364,335 . 13,072,744 2073 5,357,679 2..596,866 3,769,401 6,471 363,566 - 12,093,983 2024 5,008,608 2,581,081 3,798,010 6,261 366,941 • 11,760,901 2025 4,697,593 2,324,776 3,822,048 6,030 368,385 . 11,218,831 2026. 4,440,390 7,315,559 3,461,648 5,793 .368,798 . I.0,602,1,86 2027 3,876,764 2,110,453 2,879,544 5,568 369,285 - 9,241,614 2028 3,716,792. 1,739,029 2,123,298 5,343 364,210 - 7,948,671 202,9 3,261,339 1,585,081 1,644,15.5 .5;115 368,280 - 6,86 3„97 1 2030 2,296,493 1,589,755 I,070,1 28 - - - 4„956,376 2031 2,103,384 1,568,565 1,069,700 - _ - 4.74 1„649 2032 I,746„850 1,335,669 1,065,025 - _ - 4,147,544 2033 1.196,288 924,275 863,850 - _ - 2,984,413 2034 599,625 779,000 866,175 - - - 2,244,800 2035 - _ 418,450 - - - 418,45)) 2036 - - 421,2.25 _ - - 421,225 $ 78,286,126 $48,894,229 $62,956,673 5 139,258 $ 5,1 53,4.23 $ 1,606„0 1 3 $ 197,035,721 (1) Includes it portion(lithe City's Certificates of Obligation,Series 2008,Series 2009,Series'2010,Series 201 I,Series 2012,Series 2013,Series 2014. and a portion of the(1eneral Obligation Refunding Bonds, Series 2010, Gement' Obligation Improvement and Refimding Bonds„ Series 2012 and Series 2013,Series 2014.Includes a portion of the Obligations and excludes ft porlion of the Refunded Obligations, (2) Includes a put Intl of the City's Certificates of Obligation,Series 2008,Series 2010,Series 2(111,Series 2012,Series 2013,Series 2(114 and a portion 01 the General Obligation Refunding Bonds,Series 2010,General Obligation Improvement and Refunding Bonds,Series 2012,Series 2013,,Series 2(114 and II p0rt1011 Of flit;Obligations.Includes a portion or the Obligations and excludes a portion of the Refunded Obligations. (3') Includes a portion oldie City's Certificates of Obliganon,Series 2008,Series 2008,Series 2009,Series 2012,Series 2013,Series.2014 and a portion of the Genoa!Obligation Refimding Bonds,Stares 2010,0 cucral Ohlig,ation Improvement and Refunding Bonds,tier es 2012,Series 2013, Series 2014 and a portion of the Obligations.Includes a portion of the Obligations and excludes a portion of the((et inch:it Obligations, (4) Includes a portion of the C'ity's Certificates of(Thligation,Series 2009. "The City has transferred to the Interest.and Sinking Fund S157,979.48 from the Convention("enter fund to pay the debt service shown in this column. (5) Includes a portion of the City's Certificates of Obligation.,Series 2009. (n) Includes a portion rif lie City's General Obligation Refunding Bonds,Series 2009, (7) The del it service described in this table is general obligation debt for which repayment is provided from.revenues from other sources. It is the City's cuirent policy to provide these payments from such sources,There 18.110 asstuance that the iim.:.of those solaces to make these payments will continue in the Noire, If payments tire not made from such sources in the iiiture,the difference will be paid for with ad valorem.taxes 16 'TARTE 1 AL/TH77RImut RIFF UNISSUED TAN et/WS oat ei;43 A,MOUnt lii.d AUlliorizai ion, Purpose A in Itorized 'To Date 'The Bonds Iin issued 0/24/1984 'I) Fire Substation Building 700,000 700,000 1/24/1984 °I) Street improvements 6.,325„000 5,825,00(1 500,000 I IA/2003 M unicipal Complex Improvements '7,610,000 3,95.5,000 3,6.55,000 1 1/4/2008 St iei 1prvcinents 4/3,385,000 30,495.,000 4,600,000 I 3,690,000 1 l/4/2008 Library lily rovement s 8,38 5,000 500.000 4,185,000 3,700.000 II/412008 Park Improvements 1.2,790,000 12,14 5,,000 645,000 S 84,595„000 1 .52,920,000 8,78 5,710i) 5 22,890,0-00 eonlairts nrOicos Ii may have been +.:ouiplrted or abandoned; di, eliire the retnamine audiorrred Out tairsstior taaak are um tikcbe tui CVII tic A.NTICIPATEO ISSIANCF OF GCNKAtAL OBLIGATI(IN DEBT The City has no lion plans tbr he issuance of additional general obligation debt payable from ad valorem taxes within the next twelve months, ttER IGATIoNs Currently, the City has 110 outstanding capital leases or loans„ PENSION FUND The City provides pension benefits for all of its full-time employees through the 'Texas Municipal Retirement System ("TIMM"), a State-wide administered pension plan. The City makes animal contributions to the plan equal to the amounts accrued for pension expense. (For more detailed information concerning the retirement plan, see"APPENDIX B - EXCERPTS FROM THE ANNIJAI.FINANCIAL RETORT" - Section V -Note D,1 'The City recently received the contribution rates for Plan Year 2015 front TMRS as determined by the December 31,2013 actuarial valuation. The City's contribution rate for January 1, 2015 will be 13.22%, On September 1.3, 2012, Council approved revisions to the City's TMRS Ordinance. The revisions include a reduction in the updated service credits ("DSC) for current employees and a reduction in the Annuity Increase Cost of Living ,Adjustment (COLA) for retirees, The City's contributions rate of I 3,5.3%became effective January 1, '2014., The funding status as of December 31,2014 is as follows: 12/31/2014 Actuarial Value of Assets $ 202,844,91.3 Actuarial Accrued Liability (AAE) '233,670,897 Percent of Pension Benefit.Obligation 86.81 A Unfunded Actuarial Accrued Liability(UAAL) $ 30,82.5..984 Annual Covered Payroll 47,2.35,101 Percent of Covered Payroll 65.26"/0 Est imatcd Employer Contribut ion S 6,036,646 OTHER POsT.EMPLOVINIVNT BENEFITS PROGRAM DESCRIPTION... In addition to pension benefits,as required by state laws and defined by City policy,the City makes available postretirement medical, dental, vision, drug and life insurance benefits to all employees who meet TMRS retirement qualifications, retire fro in the City and who enroll themselves and their eligible dependent(s) on or before the effective date of their retirement through the City's single-employer defined benefit other post-employment benefit (OPE13) plan. The life insurance plan provides a $10,000 fully insured death benefit coverage upon retirement which ceases upon attainment of age 65 Our retirees. So long as monthly premium payments are made, the healthcare plan provides insurance to eligible retirees, their spouses and dependents. through the City's, group health insurance plan, which covers both active and retired mernbers, until alttlitiment of age 65, Benefit provisions as well as retiree premium contributioits are established by management. t'7 The 'Sty determines tin employer and participant contribution rates annually based on recommendations of City staff the City consultant. All medical,dental,vision and drug ciore benefits tire peovided through the Citys self-insurcd health plan. The benefit levels aII the same fas those afforded to active employees lii iiisurance for eligible tcures is paid entirely by the City,. During fiscal year 2015,52 Ibriner employees were covered under this arrangement,with claims totaling-$434„136.. ANNUAL OPEB Cos'T AND Nter OPEB OuLK;ATioN„,The City's annual OPt:FB cost is based on the annual required contributitm (AR(') of the City,a" amount actuarially determined in accordance with the Parameters of(::ASB Statement 45. Despite the apparent implications of the term ARC, the City is not required to contribute the ARC to the plan each year, Instead, the ARC provides a basis kir evaluating whether the City's contributions for OPEB are adequate to lund the benefits during the working lifetime of current employees (4e,„ the normal cost) and to amortize existing unfunded obligations ti.e„ the obligations for current retirees plus that portion of the current employees'obligations that are attributed to past service) in a systematic manner over die amortizaticin period prescribed by(JASH. The annual (WEB cost is the annual accounting expense recorded on the City's Statement of Revenues, Expenses and Changes in Net, Assets and on the City's Statement of Activities. atoned OPEC)cost is equal to(1)the ARC for the current fiscal year,plus(2)interest On 1,110 Ni OPEB Obligation at the beginning of the year,reduced by(3) in adjustment to the ARC which is equal loin amortization of the beginning of the year Net OPEI3 Obligation 2013 2014 2015 Annual Required Contribution(A RC) S 1,449,844 $ 1,449,844 $ 1,1(10,895 Interest on Net OPE13()litigious 333,71(1 397,569 40,4941 Adjusted to the ARC' (4 13,49)) (492,618) (522.847) Auuriutirl OPEB Cost 1.370,062 1,354,795 1,688,542 Contributitms M ad.c (92,8(I8) (4(16,326) (434,13(t) Increase in net OP.EB obligation 5 1,277,174 $ 948,46) $ 1„254,406 Net OPEB Obligation,beginning oly ear 6,674,2(14 '7,95 I,.378 8,899,847 Net OPEB Obligation,end of year $ '7,951,378 S 8,899,847 $10,154,2.53 Three-Year Trend Informal ion Percentage Fiscal, Annual Actual of Annual Year OPEB Cunt ribut ion OPEI3 Cost Net OPEB Ended 9;30 Costs Made Com ribut ion Obligation 2013 1,370,062 92,888 6,78% 7,95 1,378 20 14 1,354,795 406,326 29,99% 8,899,847' 2015 1,688,542 434,136 25,7 1 9(4, 1 0,1 54,253 Generally, the Net OPEB Obligation is the cumulative difference since the effective date of GASB 45 between the annual 0.PEB cost and the employer's contributions to the plan including the OPE,B liability/(asset)at transition,if ally. Whenever the City contributes an amount less than the annual OPEB cost, this shortfall will increase the City's Net OPEB Obligation. ACTUARIAL MrtiioDs AND AssumpTioNs , Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts arc subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. 'The required schedule of funding progress immediately following the notes to the financial statements presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. GASB No, 45 calculations are based on the types of benefits,provided under the terms of the substantive plan at the time of each valuation and on due pattern of sharing of costs between the employer and plan participants to that point, In addition, the projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding 'limitations on the pattern of cost sharing between the employer and plan participants in the'inure. Actuarial calculations reflect a long-term perspective. In addition, consistent with that perspective, actuarial methods and assumptions used in developing the amounts in this report include techniques that arc designed to reduce short-term volatility in actuarial accrued liabilities, 18 ThO O'C'01.01"Cd Ctllaribtili011 'Ot'S (1e1CITIM101 as part It the OctetKir 1, 2014 acimartal valuation. Significant methods and.astainumons to lou Actin:trial valuation date V0/1/201,4 Asset \fallen ion M et hod: M,aricet Actuarial Cost M ci hod: Pi oje‘lvd Unit 4'redit Act u ar i al A s su inp 1,ion: ii ust 11 erul Rate of Return* "'Includes inflation at; 3.50'14, P roni coed Salary Inc cases N/A, Annual Healthcare Trend l'( tea: 8,00',14)ii EYE 2015 declining FYE 2021 .A wort izat ion M et hod: Level Dollar R et:mining,A unirt iyin.ton Period: 3 tI °pelt pear icid RitutittsG:Stvrt4S AND FUNDW“PRO(MESS— The SefiedUk:.of Finn-ling.Progress presents itilitt mai ion,as of the current'valuation in attd the two preceding valuation dates, As title dale of this financial statement,the City lias had Once valuations iifit tided A mural HA AL as A et nad al Act initial A cluarial Covered F'r.icritage,of Valuat tint Value of A:et:rued Liahilit:y Funded Accrued Payroll, C'overed Dare Assets (AAL) Ratio Libiliiy (AALI leieid Year) Pay roll 1 0/1/201,0 ¶ 5 9,356,116 0001:!4.. ,5 9,356,116 S42.298,776 2212% 1.0/1/2012 10,897,037 0.00% 1 0„897,037 44,000,000 24,77% I Oil/201,4 15,013,856 01.001eii 1 5,0 1 3856 44,000,000 34.I There,tire Factors that affect the ability to compare irmounts reported from one actuarial valuation date to the next. The assumptions that. have been changed since the previous valuation are: - the Discount Rate has been updated to reflect changes in the allocation of assets of the employer and the expected return on such assets; - the Assumed Per Capita Health Benefit Costs and Assumed Expenses for retirees and dependents have been updated to reflect changes in claims and expense expectations;and - the Health Benefit Cost Trend and Expense'frend have been updated to reflect ehanges in short-term expectations of the annual rate of increase of the Assumed Per Capita Health Benefit Costs. The City has had three separate valuations,one of which used the October 1, 201)1 valuation date,October 1,, 201.2 and October 1, 2014 valuation date,The October I,2010 valuation date was used to develop results for the fiscal year ending September 30,2012,the October 1, 2012 valuation date was used to develop results for the fiscal years ending September 30, 2013 and 2014. The plan was changed etTective January 1, 2012 to eliminate post-65 medical coverage and was changed effective January 1,20 I,'3 to eliminate one of the PPO benefit options. While the plan typically undergoes a biennial valuation,pursuant to paragraph 12 of GASH 45, a new valuation ioust be performed if'there are significant changes to the plan since the previous valuation,The October 1,2014 valuation date was used to develop results for the fiscal years ending September.30.2.015 and 2016,as part of the plan's biennial valuation, FINANC"11Alt.,,111'4 FORM A,`110,1S1 TA 11:1Ek:12 .- 00..;LNER.A.1.-FUND R E V E N UPS A ND 1.',,N E E N 0 II.EU R E i i IS Ei/HY Fiscal Year Erkled S0:4)t ember 30,, 201 5 2014 '20 13 .201 2 201 1 Reve nu es: Taxes $ 46,750,120 S 4 1,9 5 I,,522 $ ,39,6 54,4 6 5 $ 37,527,21 I $ 35,236,5.21 Licenses 84,Pernik s 1„500,777 1„.4 24,598 1„238,967 V,496,424 1,054„986 1m crepvernmental, 355,083 1 89,,1 03 469,783 52(1,948 5 89„326 Charges lot-Sery I s 3,572,684 2,98'7,778 1.605,5 19 2„296„,I 05 2,539„88 1'inos.r oric,dts and Polak ies 2,693„64 7 3,038,926 3.„25 2,4 1 N 3,63 f:i209 3,823„406 In vesi merit Income 1 16,074 66,264 88, 98 88,684 92,0 I 7 q11.1s,8r,, Roy all 1e-S i.36,22 8, 5412,81(,0 650,407 686,72 9 589„5 2 8 Cool ribill ions 1,23 1 1'1,016 56,990 20„1 68 33,995 ()they 3,252,3 1 0 I I,3„8002 21 2,349 287,796 75,339 Total Revenues $ 58,378,174 $ ,50,„3,2 5,82,5 $ 4 8,2,29„096 $ 46,560,274 $ ,44,034,999 Expenditures: General Govt.:mm(3.0 S 4„8 5 3,3 5 8. $ 5,1 08,448 $ 3,825,7011 $ 4,V 89,987 8 5,02 1,22 I rjs.c,,,o services .3„3 I 4,990 ,3,(129,„5 66 2,970,341,2 2,87 1,677 2„997,90:13 Police,D ep ari in eni 18,533,889 1 7,080,568 16,5 1 5,820 15,465,8,37 14,890,520 Fire Dep art men! 114,88 I,983, I 3„585,022 13„297,527 12,578,396 I 0„44 4,302 Planning&Develop mew Services 3„106,143, 2,867,857 3,505,029 3,5:23;742 3,298,725 Parks and Recreation 8,194,670 4,596,645 4,,4 6 3,5 3 5 4,329,869 6„602,097 Information Technollow 4,112,987 4,207,305 4,2711„209 3,844,107 648,589 Public Works 9,156,069 7,61.1,303, 6,519,248, 5,884,5.771 5,021,642. Library Services 1,138,568 I,078,851 994,476 I„072,5511 3,901,721 Claims - - - 1,061,581 „. Contributions 1,187,500 1,184,115 1,086,01.2 937,813 - Other 217,114 222,034, 1,300,627 183,530 736,11)2 Capital Improvement Projects 129,896 731,6,21 733,974 788,032 _ Total Expenditures $ 6.8,827,167 $ 61,,303,335 $ 59,48.3,55,9 $ 55,670,118 5 56,171,633 Otherl7inaneing Sources(Uses): Sale of General Fixed Assets $ ,8,,974,205 $ 4,582,111 $ - $ - $ 8,690 Op eral Mg Transfers In 15„094,.866 15,1,58,581 I 4,664„450 15,539,293 I 6,065,942 Operal,ing Transfers Out (I 1„441,262) (4,444,465) (3,977,049) (4,329,789) (3,360,822) Tot al Other Financing Sources(Uses) $ 12,627,809 $ 15,296„227 $ 10,687,3(11 $ 11,209,504 $ 12,71:3,810 Net Change in Fund Balance $ 2,,178,816 $ 4,3 V 8,717 $ (567,162) $ 2,099,660 $, 577,176 Fund Balance.Beginning of Year 20,244,248 15,925,531, 16,492,693 14„393,033 W 13,815,881 Fund Balance,End of Year $ 22,423,064 $ 20,244,248 $ 15,925,53 I $ I 6,492.,693 $. 14,393.0571 Source: flue City's audited ftnatietal statements, Restated, :"!Iii. l'AuLE1.1 WINK:4M,SALO TAS HESTORN rhe, City has adopted die Municipal Sales WO Use Tax Act, lex.as, fax Code,Chapter 321,which grants the City the power ID impose and levy a I% Local Sales and Use 'fax within the City, the procecrls ;ire credited to the General Fund and are tan pledged to the payment of Mc Obligations. Collections and en forcements;,11t,effected through the offices.of the Comptroller of Public Accounts, State of Texas,who remits the proceeds of the tax,after deduction of a 2%service fee,to the Clly monthly. In May 1990,the voters ark.City approved the imposition of an additional sales and use tax of onedialf of ono percent 04 of I%)fin.property tax reduction,"the total sales tax tate for the City is .5 F seal Year '5,of Equivalent of Ended lot al Ad Valorem Ad Vskrran Pci 9t.3.0 Collected t'i ax Rate C..atilt a 20 10 5 19,328,577 SI.5 S t.3b 5 206 20 I 1 :20,292,371 /33.,19/a 0,37 21,1 201 1 21,498,..3 9 115.84%, 0,38 '220 20 13 23,0641,035 0.39 236 20 II 1.4 5,ral9 92.97% 0.410 .;.7.415 20 I 5 26,687,963 89.551a', 0.41 101 Provided by[he City. (2). Hosed on population estimates niovided by the City, FIINIONCIAL.,POLICIES Basis of,,,fecounting ,The accounts of the City are organized and operated on the basis of funds and account grimps. A fund is iii independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance whit finance-related legal and contractual provisions. The in number of funds is maintained consistent with legal and managerial requirements. Account groups are a reporting device to account for certain assets and liabilities of the governmental funds not recorded directly in those funds. Government funds are used to account for the City's general government activities. Governmental fund types use the flow of current financial resources measurement focus and the modified accrual basis of accounting. General Fund , The General Fund is the City's primary operating fund. It is used to account for all activities typically considered governmental functions of the City.. These include Public Safety, Public Works, Parks and Recreation, Economic and Planning and Development Services,the support functions for these areas,and the administrative'functions liar the City' The General Fund for the 2015-2016 fiscal year is influenced by current policies and any approved policy changes. The policies include inter-fund equity;maintaining a balance between revenues arid expenditures;and maintaining the level of service currently provided as the City experiences residential and commercial growth. The City's financial policies are for a General Fund balance of.1.5%of budgeted appropriations at year end. To the extern that the General Fund balance exceeds this amount,this surplus is to be expended in future years for one tune expenditures such as capital items and short term projects, Debt Service Fund .The Debt Service Fund accounts fiar the servicing of general long-term debt not being financed lay proprietary or 0 nexpendable trust funds. It is the City's policy to maintain at least 8 I./3%of annual appropriated expenditures for debt service and any associated fees as the Debt Service Fund balance at fiscal year end, The City is in compliance with that policy. Budeetary Procedures . . ,Prior to September 1, the City Manager submits to die City Council a proposed operating budget for the fiscal year commencing the following October I. The operating budget includes proposed expenditures and the means of financing them. All budget requests are compiled by the Finance Department and presented with comparative arid supporting data to the Mayor and City Council for review. Public hearings are properly advertised and conducted at City flail for taxpayer comments, Prior to September 27,the budget is legally enacted through passage of an ordinance. The City Council must approve all transfers of budgeted amounts between departments 'within any fund and any revision that alters the total expenditure of any fund„ An amount is also budgeted each year for contingencies which may arise, 21 "f"Itall['Oust➢"b'➢I'MIN^.ID.)t.I„f"IVI.t,Ill SYSTEM EM "NAT t,stw'woata<sSa^sst'nt Since December 1981,the City has had the capability tto produce tmnad ck iecr 10011ii of its seater. 'The system has been expanded to a system of nine wells, with a combined capacity of 25'million gallons per Clay. 'I he water is delivered to the distribution system by 14 miles of 30- inch diameter and,36 inch diameter pipeline and t'w'o pumping stations, These pipelines will be fully redundant once ixDo"l completes the Villa Maria,`2$V8 overpass arm the City completes the pipeline re-routing necessary to accommodate the overpass, Two of the wells mcntiioited,above are shallow wells, less than t,500 feet,drilled into the C:errizo and Sparta aiquifers. The remaining six sure deep wells, approximately 3,010 feet, (killed in the Sinwhoto Sand formation of the C„arriz:ca-wi1eox aquifer, This is a very prolific aquifer of high quality water that has the capacity to provide an adequate water supply for the City and surrounding communities through the yew 2060,sand well beyond,if managed properly. The lairs abcaro Sand, and all local a+opuifer„ arc regulated by the L3'r°rrzras Valley Groundwater Conservation nservatio:an District, and pacrnaittin5 requirements have been implemented I'o'r all new water wells, College Station has obtained a Drilling/Opca'ating Permit limn the Groundwater District for the City to drill ',mother Sinasborci Well, Well ifitt,' desi gned will be dc�;r ua,e1 in l'r'b-It`t and constructed in 0u"Y-17. This well will meet our projected demands liar water fnr ona,ny years iitto hoe future. Well rt 111 remains in the plaarn'iurig,stages,and wwratilul be constructed in approximately 2f1'21,depending upon Ilie rate of,growth(Ammer atl.'t•demands, College Station is also unv sli,g;atting other water supply stiitegie;liar the future, Iliac prime exaainple is Aquifer Storage and Recovery f,ASRI,which would store treated wastewater effluent in an aquifer for future use,toast likely during,stunner pairs. If implemented, this ASR systeili would greatly reduce Ilse demand on the drinking water system aluacd ensure a very stable water supply for the City. "lta'a City has completed a Mites' Reclamation project, wvhich pumps effluent from the wastewater treatment plait up to Veteran's Park fbr irrigation of playing fields,reducing,the demand can the potable water system by approximately:3511,{tlt0 gallons per day. Additional phases of the ieelairracd water system are in the planning stages. In lvlarcla 2016,, the City completed as two year agtccitienu with nil oil company, which.provided the City with$470,04I0 of revenue for providing,just under 11th million gallons cif reclaimed water, The City also has stand by generators at strategic locations sufficient to provide adequate potable water for health and safety during and extended electrical power outage. Water rates were established by ordinance, passed and approved by the City Council, and became effective October I,. 2010, The Residential rates are inclined block rates to encourage water conservation. Meter Type of Customer Usage Charge(per'I,(Iftfl gallons) Service Charge Size Residential,Commercial and industrial $ 10.19 per mu. 5/8" 10,19 per ma, 314°' 12,78 per mo, 19,f13 per mo 1 1/2" 30.05 per rno. 2" 94.84 per mo. 3" 140.90 per mo. „„p* 171,53 per ow, Residential $2.26 for usage from 0-101,000 gallons $2.94 for usage from 1 1„IMltl-15,000 gallons $3,61 for usage from I6,000-20,tl0h gallons $4.,28 for usage from 21,000-25,1)00 gallons $4.96 tbr°usage from 26,00it gallons and more Commercial and Industrial $2,49 per 1,000t gallons Commercial Irrigation I Isage Charge $2.68 per'1,tlt)fl gallons 22 .............. 'The City's waste ta'ater as treated by three Ct6y,rwnc:d ra�trwaloa treatment tcaB plants,Carter t,na,oa Treatment Iaaru kick Creek ieatuuert Plana, and Carter'.; Lalf:e Treatment Plaint located uwithin the City Inuits. The throe plants Irave a combined tra;aalrata.nt capacity of l'I.5 mp_tcl its eon:min ad to average current average daily demand of 7.0 rra,gd. The treatment plant's capacity is adequate to setvc a population estimated at ➢25,110('t. Sewer rates were estiablasNrect by ordinance,passed and'approved by the City Council,and became etTeenv'e on October t,21112, Residential(metered water),,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, lit 11t,7$unctudaag,=l,(tllfl g,allmis of anetercdi water ((sage(:baar}r,e................................................................................ 13 76 per I,(',tOO gallons ofadditivatal uncterc::d water craaxina,tun per month II ,usida.rtliaal(without titer to each unit)....................................... $2).89 per unit per aauonulr C.,"raruttuercial and Nnataustrial............................................................ xi N(a.V II pier uuta:onth 1,iw„gge t:" 'l 4 U'7 per 11 gallons �„Charge.............. p ,TY}pDid etcil wale dine 1"lien:arc'2,003 city rresideruts wlro rcd:cave'tl'agcir water from Wellborn 'Water,but sewer is prrovided by the City,of College Station, 'Nose pay an initial usage charge of$I41.:1 i per t'narnlla. After six rootlet of documented, t+�'aaate evaI4r u'S,agu, rates Cao be adjusted residents rut u ehar� downward on a tiered scale, FILET-1 fists,Santos Sott'ut.'d' .t'he City has multiple Power Purchase Agreements (lr'l'As) in carder to meet its laaact requirements. 'fhe PPAs are currently with A1:;°a''I: '' (AEP Energy Partners) and Garland Power and I.,iglut (t:eP'&.1.), With Alsa:PEP we have fixed block A"I'C .PPA that runs until the end cal" 202'7', This fixed block AT'C P'PA replaced as unit contingent PPA with AI3PEP i'n 2015,We also have a P't''A with Ai%PEP for wind power that runs tantil the end of 2028. We have a lead following PP A with GP&L. While the PP As with AEPEP are considered base load power, the load following PPA with GP&"c.L is covers our load above the base power provided by AEPEP's PPA.s Other wholesale/power supply costs include congestion costs, Ancillary Services and Transmission Cost of Service(TCOS),Since the City owns transmission assets it nut only pays but also receives TCOS payments based on TCOS rates approved by the Public Utility Commission of Texas. On January I, 2015,the City began a three-year contract(with a possible two-one year extensions")with Garland Power and Light(GPL) liar Qualified Scheduling, Entity (QSf) services and a two year load following contract for power above the contracted resources from Ap Pt P. GP&L's USE schedules and settles all the contract resources owned by the City. On Crty's advice the ()SE also procures any replacement power as needed on behalf of the City. The City's owns 20 miles of l38kV transmission lines,seven substations,and 458 miles of distribution pines,E.RCOT serves as the RIO/ISO for our area. 'Tie current electric rates were established by ordinance passed and approved by the City Council and became effective on October I, 2010, The electric rates are subject to a transmission delivery adjustment (T'UA) charge which requires that the net energy charge per kilowatt hour must be increased or decreased by art amount per kilowatt hour equal to additional transmission charges above those accounted for in the wholesale rate„The TDA is currently set at$0 1105 per kilowatt hour of energy consumed. In January 2009, College Station Utilities began offering residential electric customers renewable wind energy, In February 2010, the renewable wind energy program was expanded to include commercial customers, Wind energy is generated from the South Trent Mesa Wind Project located west of Abilene,Texas, Electric rates were established by Ordinance tt2b10-3288 on September 23, 2010,passed and approved by the City Council, and became effective on October I,2010. 23 Singlo Family ................. SrmicQ. $7,08p,wwwX^ plus: bnfu Olc*d"vo8h(cooxu}.......... --.-- SO,|18\ per k,k kwh (November through AniV------- $UG4 per kwk 'I'aX...........—............ |�YX Tnvsmissioo0*|k,*ry Adjoslmc^((TDA)...— n,5wY6 %,Wlcr M,umed Nl^kipk Dnellng,, Service Chaige._. ... _. $l OOMO per^nonill,'omnuwmelq 1)mc krhia(May Nvnm»h{b,nho>.....- $K.iX3| purk INhr kv0n(Nn.f,�^`brUmn TI6prQ)-------- $0,1A34pe'rk"hr �bx_----............--_------ i�YV 1"0A [whxlam a",v*qcdl 3°��Rnpmu��al(I-|wR'�\Y(I*"mmi ) $YV0 per vmm/"h plus; |loxu)0"KvY"o— ................ .................... $0.058pe/kwh Oves,1 000 kvl)I,... .........................._ 141�10"�8 poll kvhl 'Tax~~ ................. —. .................---_—' n25 1 TD�A.........—....._............ ..._—..—.' 0�5o,'('J, m!m IiwoOnx I!Iumx�in <|5-3O0KV )— ......... Sm`OiCu ....... $250)0����wo I)ILLS: Demand[1`oirg*(Per KVV)..... ............... $0.4w per K\v Energy(I'hn�'g=AN, $U7Jo per K\v Minimum Monthly Chaqx.--------- Nx110 'Du—__—_--'_—._-----_—_. &.l5% J7)6........... —. ................. .—.—,_. 0,5YK Large Commercial(300— |'50`Kw)--.... service $75.0/permooth pus: Dwnind Charge(Per KW)--_-------­ W0,4oper KW Energy Charge All lmlwn................. —.......— $0.07loper Kw Minimum Monthly Charge $3,195o0 TaX.... .— .................. ._.—.—...... ..—.- 8,25(X6 'FDA..... ........—..._......—_.....—._ O.5 0%1 Industrial(L500Kw and v,vr)--... —_. Service Charge......... ........... _--_ $258.0o per month Plus: Demand Charge(Per KW)............... ----' $*.85 Energy Charge(first 500,000 $0,0689per KW KiinknvmMnmV#x $15/84X5 �u..........—.—... 8.25.Vo TDA—..... ....................................................... Calculated uoneeded M'FmWATr R�vm vvimS nxm "ore esmWinhed by Ordinance 42012'3397 on February 23^ 2012. passed and approved by the City C^unc|i, mid. bvow"e effective*nMarch 1'2011 PwmdfwAnn Lxw,L Residential&C"mmeoial |��---. ......... ........ .................—.... $,0.mm5 pet-Ku/ —. ...... 0i0251)oKW |001K ................ ................................... ............ $0.00i per M '14 TABY,11, 14- MSTOIOCAt.Ul II El V'ilISFRS 0„J NEES SERVED) Fiscal Year Ended Sep t ember 30, 015 2014 20113 20 12 201,II Water 41,540 40,768 40,767 36,460 ;35,615 Wa,st ew aid. 40,806 39,,I 28 38,608, 36,908 35,510 Electric 43,471 38,,198 38,456 39,12.3 37,829 ARLIE i 5-TEN 11„..A.Mw.sT UTITITY CUSTOMERS Tot al Percent FY 20,1.5 K WH, of KWH LIIIM y Cast,urn).) Type oT Business (100suropt on Consumed ............... City of College Station N4 onicipality 1.;16,299,782, CSVSD School 22.669,,558 '2.72'14, Scott & Whine Hospital&Clinic 11 osp it al/Clinic I''/,493,54.6 2.10`°,41 Texas A&NI U n ivers it y 1,2,I 95„0118, I.4t11°I, C131.„ N Associates Retail Ni all 9,192,620 I,1011I,1) College St at ion M ed teal Cent or flosp il al 9,1,83,183 1.10'114, Wal,,,,IVI art Retail 9,008,880 I,08,4I,I) TIED Grocery Retail 0 roc er y 8,6,67,,3,60 I.04% Dealer Computer Scry tees.Inc, Retail 1,864,0011 Cambridge llo Wings 1.I.k.' Hotel 4,703,400 0.56'.1,14I -...., '124,277,347 14.88% TABLE:i 6,-CONDENSED S'I'AT EMENT OF OPERATIONS For Fiscal Year Ended September 30, ..... 2015 2014 2013 2012 2011 Revenues: Electric $ 98,763,293, $ 95,677,765 S 92,892,541 $ 94,396,234 $ 98,737,655 Water and Wastewater 28,732,968 27,550,262. 29,018,108 27„652,449 29,248,180 lot crest 180,423 116,433 1'70,062 136,974 142,700 Other ,3,546,138 2,890,061 3„670„710 2,857,223 2„584,985 Total Revenues $ 131,222,822 III 126„234,,52.1 $ 125,751,421 $ 125,042,880 $ 130,713,520 Expenses: Total Expenses $ 8.2,079„813 ,$ 100,235,329 $ 90,519„871 S 88,92.7,662, $ 96,938,864 Net Available for Debt Service $ 49,143,009 ,$ 25,999,192 S 35,231„55,0 S 36,115,2.18 S 33.,774„656 Water(Units Served) 41,540 40,768 40,767 39,338 ,37,565 Wastewater(Units Served) 40,806 39,128 38,608 36,908 35,563 Electric(Units Served) 43,471 38,198 38,456 39,123 37,829 25 'TABLE 11.7- ‘,IALUE Or THI SVSTENI Fiscal'Year Encled„Sop t ember 3,0, 2015 2014 2013, 2012 201 Utility 'Systems $507;758,485 $450,07 I„7 1 3 111 446,518,318 $435,064,838 $3,66,563,463 Cons I ruction hi Progress 13,2 1 3,020 43,28 1,736 36,982,355 20„430,326 69,987,383 T7520,97 1,505 $5,02,353,449 $4 83„5,00,67, $455,495,1164 $436,55 1,250 Less: A CCUnIrdal ed (.)Ielp f'eciat ion 198,339,300 183,756,067 171,069,875 1 58,428,406 14'2,344,667 Net System Value $322,632,1 1 5 i;3i8,59.7,75 $3 1'2,43.0,798 8 297,066.7 5 8 $'294,206,583 TABLE 18—0:iv's IF,ourtv IN'rift!:SI'STLM Fiscal Year Bided Sep t eMbev 30,, I'''•II,,,9 9'1,5 ;.I,3, 201 5 2014 )013 2012, 20 V 11 Net Sy s t on t Value !3; 322,632.,1 1,5, $3 18,5'97,382 $3 1 2,4 30.„198 III 297,066,7515 $,294,206,583, (Lieu Assets 52,03,88 V ,4 2,939,4 76 59,428,776 53,03 1,034 47,3 I 9„6 52 Restricted Assets 1:9,977038 27„760,893 5,757,1167 10,143,761 5, 66,872, Other Resources 0 120,000 1 20„000 ,2411,000 , Deferred,Charges 2,38 1,93:3 1,305,356 1„66 5„94 3 780,390 9 I,9,183 Total $397,014,96 7 ,1,3,90,603,,I 0/ 5 179,402,684 13 30 1,14 11,943 $34 7,852,29(h Ob1igatj22s Current Liabilit les, $ 13,688,841 S 19,092,357 $ 23:329,045 $ 1 7,180,367 $ 20,1013,090 Current Liabilit ics Payable from Restricted Assets. 110,735,825 7,292,7'3 1 71 90,5 77 1 3,474,895 I 1,049,949 General Obligation Debt. 43,175,000 ,4 7,995,000 36,930,000 30,675,000 24,1120,000 Cert ificat is o I Oblipt on 83,445,000 87,2 10,000 66,695,000 55,865,000 48,0/35,000 Revenue Bond Debt 13,395,000 14,920,000 34,765,000 41,505,0111 49,84 5,11(.12 Other,Debt'° 8,593;734 9,385,034 4,825,184 4,56 4,927 3,249,873 Total Liabilities $ 173„033,400 $ 185,895,122 $ 173,734,806 $ 163,262,190 $ 156,557,914 City's Equity in System $223„98 1,567 $204,707,985 $205,667,878 $ 197,8.79,753 $191,294,376 Percentage of Equity in System 56.42% 52,4 l'N 54,2 1'1'40 54.79% 54,99'31t (1) includes OMB No Pension Obligations., '.:.lb 11".A.11 Lriv Rix oN AND r S volt' tr("Inn T Dr to'Silt:vit.:I; Origulat Outstanding Princip al Principe SCrie,5 as of 9/30/2015'1'1 2008 "3) 15,925,000 3,715,000 ,2009 9,,400,000 15,585,000 2.010 2,,830,000 2010 25,91)5 mao 17.395,000 201 '3" '7,920,000 f820„000 "2012 '31' (rJ1 I 5,000 4,,04)0,000 ,-2tu 001 t 10,000 ii1„700,000 2013 '3' I 0,230.,00(t 9,500,000 2013 "2-'141' 0,255,000 5,575,000 2014 l3) .255,000 515,000 7)0 4 ':14'" 14,4155.„000 113,445,000 2010 (3) 7,2,50,000 '7,2,50,000 2016 '201 ) 8,710,000 I 8,710,000 $ I 52,5'70.000 S 't 44,3 I 0,000 includes the Obtigations and exeliides me Refunded Obligations, 1;2) Represents refunding tionds, illt) Cent tii.itles of Obligation supported On whole or in part by t.,[tiliTy System revenues, (4) Goleta'Obligation Improveritent13omis,supported in.part by the I htitity System Et:lit:MU:S, IN VESTM ENTS The(Ity invests its investable funds in investments authorized by Texas law in accordance with investment policies approved by the City Council. Both state law and the City's investment policies are subject to change, LEGAL iNVEsTmEN1'8 Under State law, the City is authorized to invest in: (I) obligations of the United States or its agencies and instrumentalities, including letters of credit; (2) direct obligations of the State or its agencies and instrumentalities; (3) collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality of the United Slates;(4)other obligations,the principal of and interest on which are unconditionally guaranteed or insured by, or backed by the full faith and credit of, the State or the United States or their respective agencies and instrumentalities, including obligations that are fully guaranteed Or insured by the Federal Deposit Insurance Corporation or by the explicit full faith and credit of the United States;(5)obligations of stales,agencies,counties,cities,and other political subdivisions of any state rated as to Investment quality by a nationally recognized investment rating firms not less than A or its equivalent;(6)bonds issued,assumed,or guaranteed by the State of Israel;(7)certificates of deposit and share certificates(i)issued by a depository institution Oval has its main office or a branch office in the State of Texas, that are guaranteed in insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund,or are secured as to principal by obligations described in clauses(I)through(6)or in any other manner and,amount provided by law for City deposits,or(ii) where(a)the funds are invested by the City through(I)a broker that has its main office or a branch office in the Slate of Texas and is selected from a list adopted,at least annually,by the City as required by law or(II)a depository institution that has its main office or a brunch office in the State of Texas that is selected by the City; (b),the broker or the depository institution selected by the City an:anges for the deposit of the lands in, certificates of deposit in one or more federally insured depository institutions, wherever located, for the account of the City;(c)the full.amount of'the principal and accrued interest of each ofthe certificates of deposit is insured by the United States or an instrumentality of the linked States,and(d)the City appoints the depository institution selected under(a)above, a erusloelian as described by Section 2257,0410)of the Texas Government Code,or a clearing broker-dealer registered with the Securities. and Exchange Commission and operating pursuant to Securities tun] Exchange Commission Rule 156-3 (1'7('.F.R„ Section 240.1.5c3-3) as custodian for the City with lespect to the certificates of deposit, (8) fully collateralized repurchase agreements that have a defined termination date, arc fully secured by a condonation of cash and obligations described in clause(1)which are pledged to the City, held in the City's name,and deposited at the time the investment is made with the City or with a third party selected and approved by the City and arc placed, through a primary government securities dealer, as defined by the Federal ,Reserve,or a financial institution doing business in the State of Texas;(9)bankers' acceptances with the remaining term of 270 days or less,if the short-term obligations 0'1 the tiecepting bank 27 or its parent acre:railed at least "A-1"or""0-1"or the equivalent by at least one nationally recognized credit rating regency;(10)commercial paper that is rated al least "A 1" e:cr "1-',1- or the eeprrilva le it by either (a) two nationally rcrctogt'rizcd credit ir,rlint', agencies or (b) one rr; g agency paper by tier irrevocable letter of credit isacii i.d Y,r'y a lank rrry;anized and atir'art'torlly ri°eaot;.,+,nozrrl credit rattoa,„ as etc r rf Ybc; rta•ua:r is fully :�xaa:uu•ed existing under the laws of the United States or any state; (4 d) no-load money market initial funds regulated by the Securities and Behange Commission that have a dollar weighted aver°age portfolio maturity of 90 days or less and include in their investment objectives the matrttenrance of a stable net asset value of$1 for each share; (I2) no-load mutual funds registered, with the Seem ones and Exchange ngge Commission that; have an average weighted maturity of less than two years; invests exclusively in obligations described in the preceding clauses; and are continuously rated as to investment qualify by at least one nationally recognized investment rating than of not less than "\A.A" or its equivalent; provided, however, tlruat the City is not authorized to invest in the aggregate more than 15% of its nrccothly average found balance,excluding bond proceeds and reserves and other funds held for dclii'service, in stools no-load mutual funds„and(13) for bond proceeds,guaranteed investment contracts that have a defined terunitiation date,arc;secured by obligations oft lac t bitted States or its agencies and anstrimac ntalil'aes iii Cara onroroournt equal to the amount invested under the contract, and are pledged to the City and deposited with the City or a third party selected and approved by the City. 'flse City ire also authorized tc,a invest its hunts tlorctugh an eligible; inveslnteurt pool if the geaveuari'ngg body it the C'ity by rule,rcrelir➢ance„or resulntoi:'rar, as appuopri,ule,autho'riz.eri investment in the parlto:ral'at pool, To,be eligible to rticeiive funds front acid invest finds ora behalf gad the('by, an dravcstnrerul pool maws; burnish to the investment nih'r.:cc or other iruthorizecl representative cad"tlse City an offering circular or else;°sorutrlrt'r•clit;clos,urra ios)rcnauunt that contains,ains, at a minimum,the tiallo v ➢g in lot nation:(II) Mc types of investments in aachtch money is allowed to be invested,(2)die nutst'arrorn average dollar-weighted maturity allowed,based tiro the stated maturity date,of the pool; (3)the maximum stated maturity date any investment security within the portfolio has; (4) the objectives of the pool;(5)the size attic pool;(ta') the names of the members of the advisory board of the pool and the dates their terms expire,(I)the custodian bank that twill safekeep the pool's assets; (8) whether tyre intent of the pool is to M ai'talmirr a net asset value of one dollar aid the task of market price fluctuation,(9) whether the only source of payment as the assets of the pool at market value or whether (here is a secondary,source of(,payment, such as, insurance or guarantees,and a cicascriptio t rai"the secondary,source of payment,(10)the manic and;Address of the independent:atuli'tor ocil"the pool; (l I) the requirements to be satished fax iii entity to deposit tuucls in and witlydrnw, funds from the pool road any deadlines or oilier operating policies required for the entity to invest raids irr mid withdraw funds frorn the pool;and(12)the performance history of the pool., including yield,average dollar-weighted maturities,and ON pensc ratios. Governmental bodies in the State.are authorized to implement securities lending programs if pi,)the securities loaned under the program are I(ttl )collateralized,a loan made under the program allows for termination at any time and a loan made under the program is either secured by(a)obligations that are described in clauses(1)through((a)of the first paragraph under this subca➢ption,(b)irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm not less than "A" or its equivalent., or(c) cash invested in obligations that arc described in clauses (I) through (6) and (10) through (i2) of the first paragraph under this subeaption, or an authorized investment pool; (if) securities )hell ;as collateral under a loan are pledged to the governmental body,held in the name of the governmental body and deposited at the time the investment is made with the City or a third party designated by the City; (iii)a loan made render the program is placed through either a primary government securities dealer or a financial institution doing business in the State;and(iv)the agreement to lend securities has a terns of one year or less. 'the City may invest in such obligations directly or through government investment pools that invest solely in such obligations provided that the pools are rated no lower than"AAA"or"AAAm"or an equivalent by at least one nationally recognized rating service.'The City is. specifically prohibited from investing in; (1) obligations whose payment represents the coupon payments one the outstanding principal balance', of the underlying mortgage-backed security collateral and, pays no principal; (2) obligations whose payment represents the principal stream of cash flow from the underlying mortgage•backed security and bears no interest; (3)collateralized mortgage obligations that have a stated final maturity of greater titan 10 years;and(4')collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index, iNvt!:S•rtcw v'T POLICIES Under Texas law, the('ity is required to invest its funds under-written investment policies that primarily emphasize safety of principal and liquidity;that address investment diversification,yield,maturity,and the quality and capability of investment management;and that includes a list of authorized investments for City funds, rnaximunt allowable slated maturity of any individual investment and the max initial average dollar-weighted maturity allowed for pooled fund groups, rncthods tee monitor the market price of investments acquired with public funds, as requirement for settlement of all transactions, except investment pool hands and mutual funds, on a delivery versus payment basis, and procedures to monitor rating changes in investments acquired with public funds and the liquidation of such investments consistent with the PPIA. All City funds must be invested consistent with a tbrmally adopted "Investment Strategy Statement" that specifically addresses each funds' investment, Each Invcsttne'nt Strategy Statement will describe its objectives concerning (1) suitability of investment rylne, (2) preservation and safety of"principal,(3)liquidity,(4)marketability of each investment,(5)diversification of the portfolio,and(6)yield 25 d,l nt'I,.w Texas N tt, (City inve,stlnnerals nest be mtackr:, "with Judgment and cure, ru'neier frtcv'ailirtp e'nrctnias;4taauscr, 4hrat a personu ul'l:rlt.tefence, discretion, and intelligence would c;xetr,ice in the unaiwnaJ,eatacauII of l'Ilae, per,tarn"r; own affairs, not fur ;:pie^.cnlat ion, but fiatr investme:att, cunansidder'in,g the probable safety anf csaagaital rntot.1 the probable income to be derived." At least quarterly the:investment ulfinr,ts of the City wilt submit an investment report detailing,(I)Ihe investment position of the City,(2)that all investment officers jointly prepared and signet)1IIto report, (i}) the beginning tnaarket value and ending market value for each pooled fund group„(4) the hook value and market valve of each separately listed asset at the end of the reporting period, (5)the maturity date of each separately invested asset,(15)the account or hind or pooled fund group fcrr which each individual investment was acquirer!„and (I)the compliance of the investment portfolio as it relates to: (a) adopted investment strategy statements and, (h) stale law, No person may invest City fluids wit toutt express written authority f ottt the City Council, ADDITIONA,t,I'tt,OVISlONa' l.pu'teIe,u Texas law tht'City is taddittonally required to: (I) annually review,,, its ctdoptt.'d policies ;Ind strategic'';, (2) tee:pttire any investment fker',s"' qseekingsell securities to the y srel;at'tonsl'ti r and snl''"' with personal business relationships or r'crN;ativaa with firms eekna to wts tG'entity to disclose the g ., 1 file a statement with the 'Texaat> Ethic's Ccrtnmistinn and tloe City Council; (3) require the regism'ed principal of firms seeking to sell securities to three City to:(a)receive and review the City's investment p,nolie.•,y„(b)aeknr:wIcrigtt that reasonable controls and procedures have been. implemented to preclude imprudent ittvcsnttett ;utdivitu:s, and (e) deliver a written statement attesting to thew requirements; (4) perform atn annual audit of the management controls on Vnvestnn:,nts and taihel(-ne r to the City's investment policy; (5) provide, !°;ptx"if'he investment training for the Finance Director, Treasurer, Assistant City Manager and investment ofli,cers, (t°e) rest rid reverse re,purch;ase agreements to not more than 4Hi days,and.tc,striict, the investment of reverse repurchase a,f;recaruent Rands to no greater Man the term of then reverse repurchase agrecu°nent,(7)restrict the investment in non-money market mutual fonds of any portion of bond proceeds.reserves and hinds held for etehl SOrvict'and to no more:than 15`'rio or the entity's monthly average loud balance,excluding bond proceeds and reserves and other Rands held for debt service; (8) require, local government investment profs to conform to the new disclosure', rating, net asset value,yield calculation, mid advisory board requirements and(9) at least annually review, revise,;and adopt a list of qualified brokers that are authorized to engage in investment transactions with the City. Under'Texas law, the City inay Contract with an investment management firm registered under the Investment Advises Act of t940(15 Section Ktlb-1 et seq.)or with the State Securities Board to provide for the investment and management of its public funds or other funds under its control for a term up to two yeasts,hut the City retains ultimate responsibility its fiduciary of its assets. in order to renew or extend such a contract, the City must do so by order, ordinance or resolution, The City has not contracted with, and has no present intention of contracting with,any such investment management limn or the State Securities Board to provide such services. Ct'r "s INvEST iEN'r POLICY The Assistant C'b Manager or his designee willdeposited with the bank depository and invested in } b promptly cause ,t C'n1y funds to be de} ':' < accordance with the provisions of the current Bank Depository Agreement or in any negotiable ianstrumertl that the City Council has authorized under the provisions of the['HA,as amended,and in accordance with the City Council approved Investment Policies. At the end of each fiscal year„a report on investment performance will he pawkier]to the City Council, In conjunction with the quarterly financial report, the Assistant City 'Manager or his designee will prepare and provide a written recapitulation of the City's investment portfolio to the Council,detailing,each City investment instrument with its rate of return and maturity date., The City's adopted investment policy permits the City to invest its funds and funds under its control in all of the enumerated investments authorized by the PF1A. TAusI, 20-CURRENT INVESTMENTS As of March 31,2016,the City's investable hinds were invested in the following categories: Book Market Investment"I'ype Value Value Cash $ 5,ti1l.th,000 , 5,000,000 Ceti ifucateOf Deposit 9,051,703 9,051,703 Local Government Investment Pool 14,795,198 14,795,198 Aal rtney M mice' M utual Fund 128,677,025 128,67'7,l 25 US Agencies and Securities I4,000,000 14,017,840 $ 171,523926 $ 171,541,766 ,ter I'A X thiN Oro the (late of initial delivery of each series of the Obligations, McCall, Parklimisi & Florion L.L.P,, Dallas, 'Texas, Bond Counsel, will render its opinion that, al accordance with, statute's, regulations, published rulings, and court decisions existing on the dale thereof ("Existing Law"),( interest on the Obligations for federal income tax purposes will he excludable,from the",gross income"of he holders thereof and (2) the Obligations will not be treated as"specified private activity bonds" the interest on which would be included its an alternative minimum tax preference dew under section 57(n)(5) Me Internal Revenue Code of 1986 (the "Code"), Except as :stated above, Florid Counsel will express rio opinion as to any other federal, stale or local tax consequences of the 'purchase, ownership or disposition of the Obligations, See Appendix C- Foams OF OPINIONS or BONO COUN5H„,* in rendering its 6pinioils, 'Bond Counsel will rely upon ta)certain information and representations oh tti iti ncluding information and representations contained in the CaY5 federal Iris certificate, (JO the Vent cation Report otepared by Grant 'lliortiton 1.1,1° with:respect to the refunding of the Refitrided Obligalions and(c)covenants of Me Cily contained in the respective Ordinances authorizing each series of the Oblit,'ialions I•elating to certain mailers including arbitrage tout the Wail of the i„noccieds or he ObligatMns and the property financed or rurecrub thercwith. Failure of the City to Oenwly with these representations or covenants could cause the' iritcoist on the IlltridsOc Certificates,as the case may be,to'become includable in gross rticonic retroactively to their dam of iSS9.4aRee. The Codo and the regulations prornolgated thereunder contain a number of itiquireinents that tutisi be satisfied subsequent to the issuance or the Obligations in order for interest en Mc Obligations to be,and to remain,excludable loin gross income for federal income tax puiposes. ,Failtite to conniily with such requirements may cause inteu CSI.on the fabligations to be included in gross income retroactively to the date of issuance of the Obligationa, The opinions of Bond Counsel tire rendered in reliance upon the compliance by the City with ranch retrioirements,arid Bond Counsel has not been retained to merino.-compliance with these requirenients subsequent to the,issuance oldie Obligations,. Bond t'ounsel's opinions are not a guarantee of a result,but represent its legal judgment based upon its N'OCNV of Existing law and reliance on the aforementioned information, representations and covenants, Existing l„,aw is subject to chatige by the Congress iand to subsequent judicial and administrative interpretation by the courts and the Deportment tit'the iireasuay. "Ihere can be no assurance that Existing law or the interpretation thereof will not be changed in a manner which would adversely affect the tax treatment of the purchase,ownership or disposition of the Obligations, A ruling was not sought from the Internal Revenue Service by the Issuer with respect to the Obligations or the property financed or refinanced with proceeds of the Obligations, No assurances can be given ,as to whether the Internal Revenue Service will commence an audit of the Obligations,or as to whether the internal Revenue Service would agree with the opinion of Bond Counsel,. If an internal Revenue Service audit, is commenced,under current procedures the Internal Revenue Service is likely to treat the Issuer as the taxpayer and the Obligation holders may have no right to participate in such procedure, No additional interest will be paid upon any determination of taxability, FEDERAL INCOME TAX ACCOUNTING TREATMENT OF ORIGINAL ISSUE DISCOUNT The initial public offering price to be paid for one or more maturities of the Obligations is less than the principal amount thereof or one ur more periods for the payment of interest on the Obligations may not be equal to the accrual period or be in excess of one year(the "Original Issue Discount Obligations"). In such event,the difference between(i)the"stated redemption price at inaturity"of each Original Issue Discount Obligation, and (ii.) the initial offering price to the public of such Original Issue Discount Obligation would constitute original issue discount, The"slated redemption price at maturity" means the sum of all payments to be made on the Obligations less the amount of all periodic interest payments, Periodic interest payments are payments which are made during equal accrual periods(or during any unequal period if it is the in dial or final period)and which arc made during accrual periods which do not exceed one year, Under Existing Law, any owner who has purchased such Original Issue Discount Obligation in the initial public offering is entitled to exclude from gross income (as defined in, section 61 of the Code) an amount of income with respect to such Original Issue Discount Obligation equal to that portion of the amount of such original issue discount allocable to the accrual period, For a discussion of certain collateral federal tax consequences,see discussion set forth below., hi the event of the redemption, sale or other taxable disposition of such Original issue Discount Obligation prior to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue Discount Obligation in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Original Issue Discount Obligation was held by such initial owner)is includable in gross income. Under Existing Law,the original issue discount on each Original issue'Discount Obligation is accrued daily to the stated maturity thereof amounts calculated as described below for each accrual period within each accrual period)and the accrued amount is added to an initial owner's basis for such Original issue Discount Obligation for purposes of determining the amount of gain or loss recognized by such owner upon the redemption,sale or oilier disposition thereof. The amount to he added to basis for each accrual period is equal to(a)the surn of the issue price and the amount of original issue discount accrued in prier periods multiplied by the yield to stated maturity(determined on the basis of compounding at the close of each accrual period and properly adjusted for the Ictigoh of the accrual period)less(b)the amounts payable as current interest during such accrual period on such Original Issue Discount Obligation. .30 l'hr: federal income tits consequences ul 11'te porchasce r•a\nrure.rship, recleunption, sale or rather" disposition of (.arig'inaal Issue 'Discount Obligations which ara: not purchased in the initial trll:oing at the initial el"ti;'in g price r,rta,y toe determined according to miles which difp'o-r from those alescribird nove, All owners of Original Issue Discount Obligations should consult their oven tax advisors with respect to tllae c,letcrt'anination for federal, ,untie and local 'iatcorne tax purposes of the treatment of interest, accrued upon redemption, sale or av lea disposition of such Original Issue Discount (:)bligaticnts and with respect to the federal, state, local and fnr'eigno teas t,unscagatences Of the purchase,ownership,cc;c:letnption,sale or other disposition of such Original issue Discount Obligations. tl.:a:,IU.IA'nERAtn I"ts",tuenA,'I.IfV("f:rAIL:TAX CONSEQUENCES ..file 'following discussion is a summary of certain collateral federal incoine lax cc.ottsecl,urenccs resulting Irons the purchuase,ocvanetship c,r disposition of the Obligations, This aliscussion is based can Existing Law,which ia,subject to change or modification,retroactive ly, The hollowing c.lisctassiun is applicable to inns'u;slnr,, other than those who are subject. to sp:rcciid provisions rrf'the Code, such as financed institutions, property and casualty insurance companies, life; insurance companies, individual recipients of Social Security or Railroad Redlrement benefits, individuals allowed an earned tnco:nrtc credit,certain S torptor<ttions with accumulated earnings and profits;and Caress passive investment income., lin°cigit corporations „object to tl➢a, branch molds lags, taxpayers qualifying, liar the health, insurance paau.➢r➢tan: credit and tutxprtyers who may be deemed,to have incurred cn continued iutifehte+lness to purchase tax-exempt obligations, I'll'E;DISCUSSION CON'TAid`NlEl;)HEREIN MAY NO] BE EXIIA➢.tS']tVb . INVESTORS,1NIC.1„,l'.J1:)ING'I"IJOSh WHO:ARE SCJd.3Jl°f I' TO SPECIAL... PROVISIONS OE T1i111 ("OOP:, SHOULD CO'Nsuur THEIR OWN TAX ADVISORS AS"'ll'O'I'HP,'FAX '1'R.PA'IM➢aN'I' WHICH MAY BE AN'TI('"IPA'I ET) 'm1"() RPSUO_,'l' atom "➢"I-tE PURCHASE, OWNERSHIP AND DISPOSITION OF °h"A'L I'.°'?tir',MP,I., Ofil..lGATIONS BEFORE DETERMINING'WHETHER TO PURCHASE'THE OBLIGATIONS. lauerest oto the Obligations will lie ivachulalulc as au aeljt.nsstrnenl for'"acljitasteel current eanlungs" to calculate the rilleru,uive ink datum tax imposed On cn rporaloracs by section 5)raf he('Foyle, Under section 6012 of the Code,holders of tax-exen➢pt obligations, such as the Obligations, may hr required to disclose Interest received or accrued during each taxable year on their returns of federal income taxation, Section 1276 of the Code provides for ordinary income tax treatment of grain recognized upon the disposition of a tax-exempt obligation, such its the Obligations, if such obligation was acquired at a"market discount" and if the foxed maturity of such obligation is equal to,or exceeds,one year from the date of issue. Such treatment applies to"market discount bonds"to the extent such gain does not exceed the accrued market discount of such bonds;although for this purpose,a de minintis amount of market discount is ignored. A"market discount bond"is one which is acquired by the holder al a purchase price whieh is less than the stated redemption price at maturity or,,in the case of a bond issued at an original issue discount, the "revised issue price" (i.e., the issue price plus accrued original issue discount). The "accrued market discount"is the amount which bears the same ratio to the market discount as the number oh'days during which the holder holds the obligation bears to the number of days between the acquisition date and the final maturity date. STATE,LOCAL.AND FOREIGN TAXES Investors should consult their own tax advisors concerning, the lax implications of the purchase, ownership or disposition of the Obligations under applicable state or local ins.. Foreign investors should also consult their own tax advisors regarding the tax consequences unique to investors who are not United States persons, Subject to certain exceptions, information reports describing interest income, including original issue discount, with respect to the Obligations will be sent to each registered'holder and to the Internal Revenue Service.Payments of'interest and principal may be subject to backup svithhokling under section 340(i of the Code if a recipient of the payments fails to furnish to the payor such owner's social security number or other taxpayer identification number("TIN"), furnishes an incorrect TiN,or otherwise fails to establish an exemption from the backup withholding tax, Any amounts so withheld would be allowed as a credit against the recipient's federal income tax, Special rules apply to partnerships,estates and trusts,and in certain circunnstartces,and in respect of Non-CI.S. ➢ elders,certifications as to foreign status and other matters may be required to be provided by ptartraers and beneficiaries thereof, FUTURE AND PROPOSED LlccIsL,A'rlos "fax.legislation,administrative actions taken by tax authorities,or court decisions,whether at the federal or state level,may adversely affect the lax-exempt status of interest to the Obligations under federal or state law, and could affect the market price or marketability of the Obligations. Any of the foregoing could limit the value of certain deductions and exclusions, including Ilse exclusion fig tax-exempt interest. The likelihood of any of the foregoing becoming effective cannot be predicted. Prospective purchasers of the Obligations should consult their ctwrt tax advisors regarding the foregoing matters. 3't corwrill'qU IN 1E; DI SOLOS „fRE,OIF l 'OftMA'TION In the Ordinanee,s, die City has made the following agreement for the benefit of the holders and beneficial owners of each series or Obligations, The.City t.s required to observe the agreement frit sct long as it remains obligated to advance funds to pay the Obligations, lInder the agreement, the City will be obligated to provide certain updated financial information and operating data annually, and timely notice of specified eVents,to the Municipal Sec,nrities Rulemaking Board(the"MSRB"), This information will be publicly,available at no cost on the Electronic Municipal Market Access of the MSRB,with the web address wriv.erninamisrb.org("HO MA"), AtitNitiA IL REPORTS "the tily will provide,certain ttpdvited financ.nd inibrination and operiting data to the M,SR13,on,ail annual basis in,an electronic(brmat Mat is prescribed by the MSRB and available via the Electronic Municipal Market Access System ("EMMA") at www.ctuntarnstbsirg, The information to bo updated includes, ail quantitative financial information and operating data with respect to the City of the general type included ccc this Official Statement.tinchir Tables.riumbered 1 through 6;8 through,20 and its Appendix B,The City will update and piovide the infbrutai ion in'fables, I through 0 and 8 through 20 within six mouths iltec he end of each fiscal year eliding in and after 2010. The City wall inklitionally provide audited financial statements Wheil and id available,and in iuly tivent, within .12 months Mier Me end oleo& 'fiscal year ending,in or after 2010, If the audit of such financial statements is not complete within 12 months alter any tuch fiscal year end, then the City will file unaudited,financial statements within such 12,month period and audited financial statements tbr the applicable fiscal year, when and if the audit report on such statenacuts becomes available, Any such financial statements will be prepared in accordance with the accounting.principles described in Appendix 13,or such other iteeounting principles as the City inay be required to employ from tittle to time prirsuant to State law Or regulation. "the financial inkinnation and operating data to be provided inlay be ,set forth in full in one or more doemnenis or may be included Icy specific reference.to any document available to the public on the MSRErs Internet Web site identified below or filed with the United Stales Securities and Exchange Commission(the"SE(.'"),as permitted by SEC Kit) I 5c2-1 2(the"Rule"), The City',s current fiscal year end is September 30..Accordingly, the City must provide updated information included in 1 through 0,and 8 through 20 by the last clay of March in each year, and audited financial statements liar the preceding fiscal year (or unaudited, financial statements if the audited financial statements are not yet available)as described above. If the City changes is fiscal year,it will file notice of the change(and of the dale of the new fiscal year end) with the MSRB prior to the next date by which the City otherwise would be required to provide financial information and operating data tis set forth above.. EVENT Nan cES The City will also provide timely notices of certain events to the MSRB,The City will provide notice of'any ofthe following events with respect to the Obligations to the MSRB in a timely manner(but not in excess of ten business days after the occurrence of the event): (1) principal and interest payment delinquencies;(2)non-payment related defaults, if material:(3)unscheduled draws on debt service reserves reflecting financial difficulties;(4) unscheduled draws on credit enhancements reflecting financial difficulties;(5)substitution of credit or liquidity providers,or their failure to perform;(6)adverse tax opinions,the issuance by the,internal Revenue Service of proposed or final determinations of taxability,Notices of Proposed Issue(IRS Form 5701-TEB),.or other material notices or determinations with respect to the tax status of the Obligations,or other material events affecting the tax status of the Obligations;(7)modifications to rights of holders of the Obligations, if material; (it) Obligation calls, if material, and tender offers; (9) defeastmces; (10) release, substitution, or sale of property securing repayment of the Obligations,if material;(II)rating changes;(12)bankruptcy,insolvency,receivership,or similar event of the City, which shall occur as described below; (33) the consummation of a merger,consolidation,or acquisition involving the City cur 1hr sale of all or substantially all of its ,assets, other than in the ordinary course of business, the entry into of a definUive agreement to undertake such an action or the termination of a definitive agreement relating to any suchactions„ other than pursuant to its terms, if material;and(14)appointment of a successor or additional paying agent or the change of name of a paying agent, if material. In addition, the City will provide ninety notice of any failure by the City to provide annual financial in in accordance with their agreement described above under"Annual Reports". For these purposes, any event described in clause(12) is considered to occur when any of the following occur: the appointinem of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City,or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers On possession but subject to the supervision and orders of a court or governmental authority,or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by as court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City., The City will provide each notice described On the previous paragraph to the MSRB through.EMMA,in accordance with the Rule, 32 LIMITA III INS AND A mENI)A11:NTs he City has agreed to update information atid to pprovide notices cif specified events only as deseribed above. 'The City has imt agreed to provide tither infOrmation that may be relevant or material to a complete presetaation of its financial results ot operations, condition, or puts eels or agreed to update any inft:mriatMn chat is provides.1,except as described above, The lily makes no representation or.warranty concerning,such information or concerning its usefulness to a decision to invest in or sell Obligations at any lb Uri:date.'The City disclaims any contractual or tort liability for damages resulting in WhOlt or in part from any breach of its continuing diselo.sure agreement or front any statement made pursuant to its itgreernent,although"adders cif Obligations may seek a writ col'mandamus to compel the City to comply with its agreement, TIfi,City may amend its continuing disclosure agreement front time to time to adapt to changed c^ircuinstances that arise from a change in legal 1.equIremerrts, a change in law, or a change in the identity, nature, status, or type of operations of the City, Of ft) the agrecnoent, as Inende.d, would have ps:irmilted an titilierwliter to purchase tor sell Obligations in the offering described herein itt compliance with the Rule, taking into account any ,amenchnents or interpretations of the Rule to the date of' such amendment, ,as well as such changed circumstances, and (ii) either (a) the hvklersof a majority in aggregate principal amount of the outstanding Obligations consein Iiitlie ,simendmer0 or(la)any pecson unaffiliated with the City(sitelo as nationally recognized bond counsel)deterritines that the arnendinoit will not materially in:mak the interests of the holders ,and beneficial owners of the, Obligations, It iho, city so the agreement, it has agreed to include with the IrleY,t financial irditrination,and ()penning data piovitkod iii accontance with its agreement rlescribed:alocive tinder "ANN't Sal.,REPORTS" an ex.planat ion, in icc miivc form, of the reasons fins the amendment anct cif the inaparT of" lily liatage tot the type el financial information and operating dicta so provided, COM PI LANC'E wilt"Pitt Olt UN DERTAKINGs cm vomited itult with mior transactions, the City has entered into underfaking.s pursuant to which it agreed to provide. certain updated financial intlirmation and operating data within six months of the end of the City's fiscal year along with notices of specified material events,;it required Mites, In addition,the City previously agreed to provide:audited financial statements tvithin six months oldie end(Attie City's fiscal year if audited financial statements were available by such lime. It'audited financial statements were tot available, the City agreed to provide unaudited financial statements for the applicable fiscal year. During the previous five years, the City tiled certain updated financial information and operating data in the fortnk.11 tables"the"'fables") identified in the official statements.for each respective debt issuances within six months(March 31)aller the end of each fiscal year. The audited financial statements, for die fiscal years ending September 30, 2009 and September 30,2010 were filed on July 5, 20110 and May 26, 2011,respectively,which is more than six months after the end of the fiscal year. In each instance,the City filed Tables that contained certain unaudited financial statement information that was similar to the type included in the audited, financial information within six months cif the end of the applicable fiscal year. OTHER INFORM AT I ON RATINGS The Obligations and presently outstanding tax supported debt of the City are rated"Aa2”by Moody's and"AA+"by S&P, without regard to credit enhancement, The ratings reflect only the respective views of such organizations and the City makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant, Any such downward revision or withdrilWail of such ratings,or either ofthem,,may have an adverse effect on the market price of the Obligations. 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, it'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. REGISTRATION AND QVALIFICATION OF OBLIGATIONS FOR SALE The sale of the Obligations has not been registered wider the federal Securities Act col'1933, its;Intended, ill,reliance upon the exemption, provided thereunder by Section 3(a)(2); and the Obligations have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Obligations been qualified under the securities acts of any juris,dietion. The City assumes no responsibility for qualification of the Obligations under the securities laws of any jurisdiction in which the Obligations may be. sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Obligations must not be construed is m interpretation of any kind with regard to the availability of any exemption from securities registration provisions, 33 INV'r:ST ParTsiTS AND r11,14 MILLI SPX1,110:PUBLIC f'tttxit Seetion 1201.041 of the Public Security Procedures Act (Chapter I 201, Texas Government Code) provides that the Obligations titre negotiable instrinnents, investment securities governed by liaptta 8, Texas Business and (onameree Code, and are legal and authorized investments for insurance companies, fiduciaries,and Inistees,and for the sinking hinds of municipahties or oilier political subdivisions or public agencies of the Slate of-Texas, With respect to investment in the Obligations by inunicipalittes or other political subdivisions or sub lietigencies of the State of'Texas, the PHA requires that the Obligations be assigned a rating of at least "A"or its equivalent as to investment quality by a national rating agency, See"OTHER VNFOR.MATION - RATINOS"herein, hi addition, various provisions of the Texas Finance Code provide that, subject to a prudent investor standard, the Obligations are legal investments for state banks, savings banks, trust companies with at capital of one million dollars or more, and savings and loan associations. The Obligations are eligibleti secure deposits of any public funds of the Slate, its agencies, and its political subdivisions,and are legal,securily for Chose deposits to the extent of their market volute The City has made rat itiVCSligatiOtt ui other laws,rules,regulations or investment criteria'which might apply to such institutions or entities or which tnight liitiit the suitability of the Obligations lin any cit he flit egoing purposes or boot the authoitty of such nisi ttutions or entities to purchase or invest in die Obligations for such purposes. Nei review by the(%ily lets been tnude of the taws in other slates to determine whether the Obligations are legal investments for vat era tnt dila ions in those states. 11„..IFGA.t., isaorss -Eby City wiii furnish a complete transcript of proceedings incident to the authorization and issuance of die Obligations, incloding the unqualified approving legal opinion of the Attorney General of Texas approving the Obligations and to the effect that the Obligations arc valid and legally binding obligations of the City,and based upon examination of such transcript of proceedings,the legal opinion of Bond Counsel, io like effect and to the effect that the interest on the Obligations will be excludable front gross income liar federal income tax purposes under ,section 11,13(a) of the Code, subject to the matters described under "TA.N MATTERS" herein, including the alternative mintrmun tax on corporations. In its capacity as Bond Counsel,McCall, Parkhurst St Horton I..I. has reviewed the mfbrmation under the captions "PLAN OF FINANCING" (except for the subsection 'Sot twES AND USFS Or Pico 'outs''), "THE 'OBL ICIATIONS," "TA X mATTERS," "OTHER INFORM ATION L.FGAT VLSTMENTS AND ELIGIBILITY to Sorour PUBLIC FUNDS IN TEXAS,," "0 HIER IN Rents rItA I ION AND QUALIFICATION or 0111„IGATII.INS FOR SALE," "OTHER INFORMATION - LEGAL OitiNatiNs," and "CONTINUING DISCLOSURE OF INFORMATION" (except under the subheading "CommiANcE wrrn PRIOR UNDERTAKINGS", as to which no opinion is expressed)in the Official Statement to determine whether such information fairly summai ized.matters of law and the provisions of the documents referred to therein, and Bond Counsel is of the opinion that the in relating to the Obligations and the Ordinances contained under such captions is a Fair and accurate summary of the information purported to he shown. The legal fee to be. paid to Bond Counsel for services rendered in connection with the issuance of the Obligations is contingent on the sale and delivery of the Obligations.The legal opinion wilt accompany the Obligations deposited with DTC or will be printed on the Obligations in the event of the discontinuance of the Book-Entry-Only System, In connection with the transactions described in the Ohlicisu I Statement, Bond Counsel represents only the City. The various legal opinions to be delivered concurrently with the delivery of the Obligations express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an insurer or guarantor of that expression of professional judgment,of the transaction opined upon,or of the future performance of the parties to the transaction, nor does the rendering of an opinion guarantee the outcome of any legal dispute that 'nay arise out of the transaction.. AUTHENTICITY Or'FINANCIAL DATA AND OTHER INFORMATION The financial data and other information contained hereon have been obtained front City records, audited financial statements and other sources which are believed to be reliable.There is no guarantee that any of the assumptions or estimates contained herein will be realized. AID ofthe summaries of the statutes, documents and resolutions contained no this Official Statement are made subject to all of the provisions of such statutes,documents and resolutions. These summaries do not purport to be complete statements of such provisions and reference is made to such documents for further information.Reference is made to original documents in all respects. FiNANCIAl.ADVISOR First Southwest, a Division of Hilltop Securities Inc, is employed as Financial Advisor to the City in connection with the issuance of the Obligations. The Financial Advisor's fee for services rendered with respect to the sale of the Obligations is conting,ent upon the Issuance and delivery of the Obligations, First Southwest, a Division of Hilltop Securities Inc., in its capacity as Financial Advisor,has relied on the opinions of Bond Counsel and has not verified and does not assume any responsibility for the infOrmation,, covenants and representations contained in any of the legal documents with respeel to the federal income tax status of the Obligations, or the possible impact of any present,pending or future actions taken by any legislative m judicial bodies. The Financial Advisor has reviewed the information in this Official Statement in accordance with,and as part of,its responsibilities to the City and, as applicable, to investors under the fit'cleral securities laws as applied to the facts atiti circumstances of this transact inn,blat Ihe Financial Advisor does not guarantee the accuracy or completeness of such informatiom EPthitnCA'rpoN tII i"Air reit ittrit CAL A 11I ATI I E MIMIC A),(.:!OM PI ITATioNs "The arithmetical aceuracy iifeeritin compotations included Ill the schedules provided by filet Southwest,a Division of I Whop Securities Inc, on behalf of the City relating to (a) computatioa oil itarecasted receipts of uiMental and interest on the Federal Securities and the ralCcasked payments of principal and interest to tedeall lie Refunded Obligations and(b)computation of the yields of the Bonds and the restricted Federal Securities were verified by Gram Thornton, 1-11,P, certified public accountants, Such computations were based solely on OSSIllinptioils and inthrmation supplied by First Southwest, a Division of Hilltop Securities Inc. on behalf of the City, Gram Thornton, 'LIP has restricted its procedures to verilYing the arithmetical ticeuracy of certain compuettions and has not made any study or evaluation of the assumptions md intermation on which the computations are based and,accordingly, has riot expressed an opinion on the data used,the reasonableliess ed the assumptions.,or the achievability orate Ilittrecasted outcome, CritterIttc'a.itt IN CFT It E DiFI(IA S'FAI, E NT AN I)NO-Lir iGATION RTI III' rc At the time of payment Ihi rind delivery tif the Oliiigations,the denial Purchasers will be lot oished certificate,exeettied by the[Koper City officials,acting.in their official capacity, to the effect that to the best of their knowledge:and belief (a)the descriptions ittid statements of or penaming to lite City raattairted in its Official Statement and any addenda,supplement or amendment thereto, fot its Obligations on the dale of such Official Statement,.rot tin'date of purchase of said Obligations,and out the dale of delivery,were and tire true and correct in all material respects, (b) insofar as the, City and its tiffairs, Mt:hiding its financial ratans, are concerned,such Official Statement chid twit and does riot contain an untrue statement of a material fact or omit to state a material fail required to be stated thereto or necessary to make the statements therein, in the' light of the eircumstances tinder whitili they .were' made, not misleading; (c) insofar ;IS die descriptions and statements, neluding firometal data,oll or pertaining to,.entities other than the City and their activities contained in such Official Statement arc concerned, such statements and data have been obtained front sources which the City believes to be reliable and that the City has to reason to believe that they are tintrue in any material respect;(d)there has been no material adverse change in the financial condition of the City since Septembet U,201.5, the date of the last audited financial statements of the City and(e)except us chselosed'herein,no litigation of any nature has been filed or is pending„ is of that date, of which the City has notice to restrain or enjoin the issuance., (ixecittion or delivery of the Obligations, in any Manna questioning the authority or proceedings for the issuance, execution, or delivery of the Obligations; or which would affect the provisions rtiado kir their payment or security, or in any manner question the validity of the Obligations, FOR WAR D-L0(„)1•13 NG ST ATEM ter The statements contained in this Official Statement,.and in any rither in provided by the City, that are not purely historical, are forward-looking statements, including statements regarding the City's expectations, hopes, intentions, or strategies regarding the attire, Readers should not place undue reliance on forward-looking statements. All fonvard-looking statements included in this Official Statement are based on information available to the City on the date hereof, and the City assumes no obligation to update any such forward-looking statements. The City's actual results could differ materially from those discussed in such forward-looking statements. The forward-looking.statements included herein are necessarily based on various assumptions and estimates and are inherently subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal, and regulatory circumstances and conditions and actions taken or omitted to be taken by third parties,including customers,suppliers,business partners and competitors,and legislative,judicial,and other governmental authorities and officials, Assumptions related to tine foregoing involve judgments with respect to, among other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the City. Any of such assumptions could be inaccurate and, therefore,there can be no assurance that the forward-looking statements included in this Official Statement will prove to be accurate, INITIAL PURCHASERS After requesting competitive bids for the Bonds, the City accepted the bid of Robert W Baird &Co,, Inc. (the"Initial Purchaser of the Bonds") to purchase the Bonds at the interest rates shown on the(inside)cover page of the Official Statement at a price of 100 percent of par plus a cash premium of$5,.509,208„74. The Initial Purchaser of the Bonds can give no assurance that any trading market will he developed for the Bonds after their sale by the City to the Initial Purchaser of the Bonds. The City has no control over the price it which the Bonds are subsequently sold and the initial yield at which the Bonds will be priced.and reoffered will he established by and vill be the responsibility of the Initial Purchaser of the Bonds. After requesting competitive bids for the Certificates,the City accepted the bid of Citigroup Global Markets Inc,(the'Initial Purchaser of die Certificates") to purchase the Certificates at the interest rates shown on the(inside)covet page of the Official Statement at a price of 100 percent of par plus a cash premium of$2,351,168.57. The Initial Purchaser of the Certificates can give no assurance that any trading market will be'developed for the Certificates after their sale by the City to the Initial Purchaser of the Cerfificates, libe City has no control over the price it which the Cartificate.s tire subsequently sold and the initial yield at which the Certificates will be priced and reoffered will be established by and will be the responsibility of the initial Purchaser of the Certifieales. 35 IV(is °rt:,u.,V„ex^,tvoVIS V'Ite: OaaPi,ot rrncos authorizing the iissuuancc of the Obligations tvull also af,rP,7uuvc the form and conit.tin, of this °friu.oanl StraterrituV, and Luray addenda or amendment thereto,and tuouf'haarize its NI-titer use in the reoflr into of°tlte(,,)frlittaitoras by the Initial Purchasers., /w'i Nancy Berry Mayor City of .'ollcrgc Station,Texas /t`/,5°P'rerrtt A7os&hrrro City Secretary City rot°College Station,Texas 36 roe:l'ectu oto 01 St, I'll DW.1'ivIt',1.)4�1'dll1,`I11'4131,1.;t'OB LAC AT ION S 1 tttertitl0111lu illturtlkihj,, (ierterttl 0bdig:.t0ion Refunding Bonds,Series 2006 Par An cunt NIal mil y Interest 10 he (,'toll Call l^chru;try 1.5 Foote Refunded Dale Price 2017. _.._...... ;1"1)011"%% 111111p.", '+/12/2016 11110.00m,.. 11„'i�ll(I',, 20 l81 4,1)110% 8655,00E 7/1'2/2016 100,00 $ "2,2(15,1100 'Certificates cu1'(1blipd000u,Serii' 2007 General Obligation I(inpo'rivr:rnent Mttoi,:ls,Storits'2007 1''uu'Artarutou Par Amown. NIatl torn y hideous to be ('all Call [Amorally Intror:er;o to be Call ('call I'ebruaay 15 12ane I'hh,efuu letl hate Price I1ehrnary 1.5 Rate Refillitded Date Price _._w�..0..�._r..__r %?...W.,, ....... I 779ryn(Ddfi.. IIII.',...._..... 4....._._.__... ..r_.......�_....__....... ...y�i......,...,�......_. ......................, 2h17 1.25051, 135,001' h(' h0 '01'7 1'.25051r 5 1:15,t100 7/12,/21}16 100.00 2018 4.250"/1, 1410„0440 7/12120,16 1100,00 2018 4 250/ 140,000 7/12/21116 100.00 201' ' 4,2510% 1,50,000 7r'12/2010 100,00 2019 4,2 50'Mo 150,000 7/12/2016 100,00 2020 4,375%w 155,000 7/12.+2016 100,00 2020 4,375% 155,000 7/1"2/2016 14)0,00 2021 4,375"14 1,65,000 '7/12/2016 100,00 2021 4,375`/, 165,000 17/1.2/2016 100 00 2)422 4,500'44', 175,001) 711212,016 100.00 2022 4.500'% 1,75,000 7/12/2016 I00.00 2023 4.500% 185,000 7/12/2016 100.00 21123 4.500% 18.5,0110 7/12/2016 101).00 2024 4.500'r4 195,000 7/12/2016 100.00 2024 4.500% 190,0110 7/12/2010 100,00 2025 4.5001v/ir 205,000 7/12,12016 100.(10 2025 4.5001X, 200,000 7/12/2016 100,00 2(126 4.5011% 215,000 7/12112016 100.00 2026 4.500% 215.1)00 7/12,2016 100,00 2027 4.625% 2,255,000 7/12/2016 100.(10 2027 4.025% 225,001) 7/12/2016 11)0.00 S 1,945,000 $ 1,935,()00 Ceti ificates of Obligation,Series 20011 General 0bligation lntprovement Bonds,Series 20)18 Par Amount I'ar Amount Mal 174y lin tintid to be ('all 1/all hi titurity Interest to be Call Call Fehr-uou'y 15 Rate Refunded Date Price lau:hruaty 15 Rate Refunded Blade Price 2021 4,125% 5 1,360,000 2/15/'2018 1011.00 2(121 4,125°4 $ 455,000 2/15/2018 100.00 2022 42511% 1,43,5.1)00 2/15/2018 100.00 2022 4.2511'ili 480,000 2/15/2018 100.01) 2023 4.250% 1.510,000 2/15/2018 1010,00 2023 4.2501% 505,000 2/15/2018 100.00 2024 4.375% 1,585,1(00 2/15/2018 100.110 20i24 4.375R%i, 53(1,00(1 2/15/2018 100.(11) 2(125 4.500'%i" 1,670,000 2,/15/2018 100.1110 2025 4.500% 555,01)0 2/15/2018 10(1.00 2026 4.500'11, 1,750,000 2/15/2018 100.00 2026 4,500% 585,000 2/15/2018 100,00 2027 4.600'Ni 1,845,0011) 2/15/2018 I00.00 2027 4,500% 615,000 2/15/2018 100,00 2028 4.625"1/U 1,935,0110 2/15/2018 100.00 2028 4,625% 645,000 2/15/2018 100.00 $1.3,090,0011 $ 4,370,0110 `i- 1 .... (AMIN Svsrem ripipporie D.tbs Utility System Revenue Bonds,,Series 2001 Par A mount Ni at only tot orcst to be Call Call February 1 Rate Refunded Date Price 2017 4.100'/; °I; 865,000 7/12/2016 100.00 201/1 4.2001°4; 915,000 'VI 212010 100.00 2019 4.300% 905,000 7/V 2/2016 1.00,00 1.1.020 4,3011% 1,015,000 7/12/2016 100„00 2021 4.400% 1,070,000 7/12/2016 1.00,00 2022 4.400% I,1 25,000 7/12/2016 100.00 2023 4.5001% 1„190,000 7/12/2016 100.00 2024 4.500% 1,2.50,000 7/12/2016 100,00 2025 4.500% 1,320,000 7/12/2016 100,00 2026 4.500% 1,390,000 7/12/2016 100,00 2027 4.500%i 1,465,000 7/12/2016 100,00 $ 12,570,000 S-2 APPENDIX A C.il:'::NERAL„,I,NTOR.MATION REGARDING THE CITY "f,a,tP.Ci r,v, The Ctty, located ita Brazos d;"ar.rlat,y, is rsotntated in the middle of a Irian& hounded lay L?rdl'Icrs/F"nil Worth„. Houston, and San Anton to/Austin, Approximately fit(%of tha'Texas population is lotra,tatt Within a 200 mole radius althea I.'oty. In saddiiion to being, a residi:,rtlial community for liaculfy, students and other personnel of l'erxas At.'i r i University, the City atlsca sctves as a regional manuffioturittgg,retail retid health care hub. The City was incorporated ino 19.38 anti has n Cinancilf-City Manager form of ;cavea°nintetit with City employees totaling (.150.3 canrrerntly, "The City adopted and enforces comprehensive zoning, and building restrictions aimed at a;sur"irag orderly growth and development. The City°s ordinances require all subdividers, at their own expense arid without provision tlitrr r'aliaod, to insiali ttrecus and water and wastewater fines in any I:alarm d subdivision. !lease ° �° � �> N' �. facilities tire constructed titular the r� ',d:'rty ,,spact.:rfu+..tatnorut; sand inspection and when completed are deeded to the City firee and dear. All Irons within thte City are tow adequately served with water, wastewater tend clecta"re aiCILv L; In (March 2013 Iataa•laew area areine t ittea'l College Suction. uric of the nation's ;y:`. be°ral places to refire. Coll e-novo cultural k V F amenities, low cost or liw'rrat;„median home price, omit climate'and law crone rate help land the 1,-'oty on Ftrrtaes lifit. C't'r°va OWNED NEra FAr:II.,tT11',7,s The City nrcrraatains approximately.325 centerline miles of streets within city limits,99'Ni erf'which arc hard surface. The City has a complete'Water distribution,. wastewater col'tec'urort and, treatment system with 775 miles of wastewater and 'water lines. 'l"ie City awns the electrical tliratroliutirnrr system with approximately 458 nines of distribution hues acrid 20 miles of transmission lines. The City has a fully' equipped police department wilt 1.3'2 hull time police officers and '74 support personnel. The department has ate police patrol carts and one holding facility with to capacity of 17, The lire department consists of L4d6 lull tine fire fighters and 7 support personnel, There are six stations and a vital of 8 engines,6 am'bulances, 2 command vehicles, I rescue truck, 2 ladder trucks„ I tanker truck,and I grass fore truck. Fire Station 46 opened in December 2012. EDUCATIONAL IONAL FA Il,r'I'IES The College Station Independent School District (the "School District") is a fully accredited system offering Il, educational campuses for pre-kindergarten through high school. The School District hiss a student enrollment in excess ral'12,500 and employs over 1,700 people. On November 3, 2015 the voters passed a bond proposition for the School District that includes the construction of three additional facilities. The bonds would fund a third intermediate school in the 20 17-2ll18 school year and a third middle school and tenth elementary school in the 2018.2019 school year. The School District's facilities are also used by Blinn College,a community college offering two years of college level courses. 'Texas A&M University provides higher educational facilities, offering both four year college programs and graduate degree programs. HEALTH CARE The College Station Medical Center"The MED" is located on 25 acres within the City, ''fire 200,000 square foot facility is a full care hospital containing 167 beds and employing more than 650 people. The MED recently completed a $23 million hospital expansion. The MED is a'Trauma Level Ill facility, Cycle III accredited,Chest Pain Center, Certified Primary Stroke Center and was the region's first Sleep Center to be accredited by the American Academy of Sleep Medicine, The Mcd partnered with Arcofor to open a fitness center that provides a way to create new and creative approaches to wellness. The facility which opened in April 2.014,offers outpatient therapy,health and wellness facilities and rehab services. In April 20114, Strategic Behavioral Health, LLC opened a 72-bed, acute psychiatric hospital in College Station" The hospital provides a structured, therapeutic and safe environment for children, adolescents, adults and seniors who require acute care for their psychiatric or behavioral challenges. On March 30, 2011, Baylor Scott and White broke ground on a 403,000 square fool, 5-story l43 bed hospital, The hospital opened in August 2013, Baylor Scott and While Hospital-College Station will house an emergency department, cardiac services including oath labs, neonatal intensive care unit, comprehensive cancer services, operating rooms, maternity services suites, endosrupic procedure suites, infra operative robotics and other specialty services, all supported by a pharmacy, comprehensive state-of-the-art imaging technology and other diagnostic capabilities Other area health care providers include: St. Joseph Regional Health Care Center, Baylor Scott and White Clinic, and The. Physicians Centre, A II A N SPO RTAT PO IN LLS. Highway P./ill/State Highway 21bilks, the City to Interstate 4,5 which is located appaixtmately 15 miles to the cam Slav fighway 21 via U.S. Ilighway 291)tilso his the City to Austin, located approximaiely 110 miles to the west, Stale klighivay 6 links tie City to Waco(1,00 miles)and Interstate 35 to the north inid floustou(90 miles)to the south.Also,State Highway,30 links the City to Huntsville(45 miles)and Interstate 45 to the east Airlines Conunercml,col:130,mile and private airport Facilities are provided by Easter wood An ix which is located on the City's wcia side and is owned and tmerated by Texas /1,8z M Universny„Amelican ragle Airlines provides daily nights to and from Dallas-Fort.Worth Airport out of Easterwood. Llnited Airlines provides (Jail),nights I, and trotri Houston Bush Intertiontinental Airport out of Ensterwood„ Coulter Field is located north of the City of Bryan t,tnd provides a 24,000 foot lighted runway,("otter Vicki offers all types,of Scv tees lot Ito pr II e aircraft, Et s if'8 Env°bus lines:set ve the City with doily service ccmriecting the City with tIonsion,and DallaS, Railroads Rail freight service is provided by the Union, Pacific, Railroad, Union Pacific Railroad operates Li twIt .fteight Line from,Houston through Bryan,,,,College Station to Dallas-Fort Worth and beyond. IT i:i it E PI ON The College Station iark system presently inchnicis 58 parks encompassing 1373 itercs, including,n 5)5 acre wilderness park, and a I 50-acre regionid athletic park. Collectively, these parks 00 T1(a n tili playg,ro 0110S, 33 soccer fichts„, basketball courts, '36 sollball/baseball backstops, 14 tennis:courts, 3 swimming pools, a spray pads, a skate park, it gymnasium, an ouldoor amphitheater with, a green room and pla,z,a aura, 1 festival site and a number of picnic shelters and 7 picnic pavilions. The Parks and Recreation Department sponsors a variety of organized.athleric and aquatic programs,as well as many special events throughout the year. POP UL AT I 0 N Official U.S.,Census1p 1970 198l) I 990 2000 2010 City of C7ollege St at ion 1.7,676 37,272 52,456 67,8,90 93,857 Brazos County 57,978 93,588 12.1,862. 152,415 194,851 U.S.Census Bureau,American Community Survey ECONON1 IC BACKGROUND "Pcxas A&M University and System The City of College Station's major asset is being the home of Texas A&M University (TAMU), TAMU is located on an approximately 5,2111) acre campus within the City, TAMU has a significant economic impact on the City, contributing over $1.77 billion dollars annually to the local economy. TAMU has consistently rardwd. in the top 20 nationally among public institutions of higher education in both enrollment and research grants.TAM Us faculty-research members conduct an estimated,8802 million worth of sponsored research projects each year, raking them in the top tier universities nationwide. In 2012,,U.S. News and World Report ranked Texas A&M second in the nation among public universities in the "great school, great prices" category, Kiplinger's 2013 "best value"ranks Texas A&M lii Texas and 18th among the nation's top public colleges, Texas A&M ranks as the nation's fifth largest university in enrollment, more than 59,000 students.Texas A&M ranks as one of the nation's top 10 university for National Merit Scholars having over 400 National Merit Scholars enrolled, TAMU and its System, combined with its system agencies,employ more than 27„000 full-time and part-tirne staff. Cieorge,Bush Presidential Library told Museum The City is the site of the George Bush Presidential Library and Mnscum„ located on the campus of Texas A&M University. Texas A&M provides programs and facilities such as research and instructional programs related to the library and museum,a conferelice center, communtcations center, educational museutn/libraiy center,, and family-oriented facilities such as a park surrounding the presidential library and museum, The Presidential Library and Museum is also part of the George Bush Presidential Library Center which is home to the prestigiMIS Bush School of Government and Public Service, A - 2 One health Plus Eliocon idor College ,Station entered into an Uncritical agreement lint the One I lealdt Pins Biocorriclor with the City of Bryan, The 3,500 acre Biocorridor will be an international destination for education.,re.scarcli,development,commercialization anti production of innovative technologic,s to improve global health. In Mardi 2013, Texas A&M tin iv ersity announeetl at partnership with pharmacenticat ,Main GlaxoStuitliKline to create 1;(,)I million infiticima-mantifacturing facility,The Facility is expected to bring 7,000 jobs.to the area, The City recently amended its Comprehensive Plan to include the College Station Medical Distrtet Master Plan. The' iMaster Plan CSI3blislies guiding principles kir the tlevelopment or approximately 1.„700 acres ii south College Station to ticermintodate medical facilities, walkable village centers, tionuncretal space, and a variety of residential uiOit types, ill n close pruximity to parks, open space.and trails. To ensure the long-let m success of the'District, the City has creakid two I as Increment Reinvestment Zone.s to help timid the necessary inflastrticture,The City is also in the process of establishing 2.Municipal M.anagement Districts to be used as a tool for developirient cif those areas,asxi xii, Ii Athletics is an integral part of"College Station,'Texas A&M University,along with the City,hosts a multitude ot intilelic events."Fexas ,A&M 1„.5itiversity is the liciine of Kyle Field, [toe't ,Aretim,Olsen 1 elt1,at Bluebell Park, Aggie Softball Corn.plex,George P. Mitchell Tennis ill'enter and Gilliam indoor Track Stadium. Several nil"exa„s A&M teams have won both conference itital national titles over the past five years which has positioned the University to host regional payoffs as well as laational championship g,ames. In the Fall of 2012, Texas A&M, began play* in the Southeastern Conference. Texas A&M's move to the SEC has proved positive tin.the City, .,'St the end of the 2013 limtball season, the University began a S450 iiilhon renovation to Kyle Field making it the largest college stadium in the SEC'and texas with a seating capacity of 11,..r2,500, The stadium nix completed prior to the'2015 season. The City's sport complex's as well its the ease to get.atom-id makes College Station attraetive to sexcral organizations. Over the past several years, the Amateur Softball Association and the Texas Amateur Athletic Federation have chosen College Station to host state tournaments and events, In addition, the City facilitates Iwo major softball tournaments, a soccer tournament, a 7 on '7 flag football tournament and baseball tournaments throughout,the year. "f"he City has added 2 additional synthetic athletic fields at Veterans Park and Athletic Complex,This is anticipated to allow additional tournaments to be held in this area, M.NJOR AREA EMPILOYERS Number of Firm N an IC P1'0,61110 Enip loyees Texas A&M University and System Ed u cat MIA es cart h 17„000+ Bry an ISD Education 2000-t- Texas A&M Health Science('cutter Education 2000'1' College St tit ion 1ST) Education 2000- Reynolds Sr Reynolds. Crimp uter Hardware and Software 18001 Blinn College-Bry in Campus Education 1000-t Sanderson.Farms„Inc Poultry Processing, I 000+ CHI St,Joseph's ReOcinal H uspit il I feat(It Service I 000+ Wal-Miirt/Sam's Retail 10004' FIEB Grocery Retail 1000 BraZos Count y Government 500-999 City uI Bry an Govermnent 500-999 City °I-College Station Governmelit 500-999 College Station Medical Center Health Service 500,-999 Ply Gem Windows M ni U fact u ring 500-999 Bay lor Scot Sr White Health Service 500-999 Source: Research Valley Painiershin Employment is provided by a variety.of high growth industries located in,or adjacent to, the City which include ambulatory health care services; professional, scientific, and technical services; specialty trade contractors; food manufacturing; administrative and support service's as identified in the Local Employment Dynamics data. Additionally College Station is also home to the .350 acre Research Park, located on the Texas A&M University campus,which houses 30 public-private tenants including the Research Valley Partnership,Schlumberger„,Texas A&M Transportation Institute,and Offshore Technology Research Center.The City also developed the '200-acre, Class "A" 'Business Center at College Station (B('CS), tenants of.which include Reynolds' and Reynolds Cognizant Technology Solution, Suddenlink Media, Siam Corporation, Heat Transfer Research, Inc, (HMI), and the Texas A&M University System., In addition, the City has worked to develop a new Science Purist Research Valley, which currently houses Lynnteeh, and R.BC Tedmologies. A riAtifiit S'tktiYiliCi.i OnitiZt Station Labor Total Year Force Blip by pi ten1 I.Iiierup loy m en t Rate 218)9 45,998 43,566 2,432 5.3% 2010 47,301 44,488 2..813 5,95 2111 1 47,3'172 44,939 3,033 (.3% 21)12 41'7.092 44,328 2,764 5,9% 2013 5 ,.1 36 48,695 2,471 4,8% 2014 /12,028 49,945 231183 2015 52.131 513)23 11,7 16 3.3% 2016'w li4,5416 5l1.930 1,616 lir aims Coloull y 1'til al 'Year Pm CC. Finploy nunn Unemployment Rale 2009 96,669 k11,418 5,251 5.4%, 2010 99,1 1 9 93,101 6,0111 6,I'll„ 201 1 11/0,643 94,7._ •45 6,398 6 AV., 2012 'V'l1791 92,963 5,,,792 5,91li„ 2013 103,089 98,074 5,015 d,915 2014 104,334 100,180 4,1 54 4,(61„ 2015 105,935 102.34 3 3,592 3,4% 2016°'' 109,636 106,168 3,468 3,2% Source: 'Texas Worldnrce Cormniss POW (I) As of February 29,,2016 BUILDING PERMITS College Station has grown rapidly over he past 30 years as evidenced by an increase in population from 37,272 in 1980 to 93,857 in 2010. As of 2014,,the estimated population of College Station was 100,394. The following table sets forth the number and value of construction permits issued by the City over he past several years. Resident lab Construction Co minerc illl COM I,1"1110 i0 II 'r ot all Calendar Number Number Niunbor Year of Permits Value of Permits Value olPermils Value 2007 990 IV 16 I,466,990 413 5 74,683,795 1,403 VI"236,3 50,785 2008 1,131 164,494,179 346 154,3 13,994 1,47'7 318,808,773 2009 792 82,316..558 243 46,947.099 1,035 129,263,657 2010 860 93.158,066 309 162,053,510 1,169 255,211,576 201 1 971 124,1323 3,5 359 123,779,0.52 1,330 247,911,187 2012 1,208 149,737,,218 325 67,4 78„9 1 0 1,533 217.216,128 2013 1„030 1,45,142•757 333 67,5 16,132, 1,361 2112,658,889 20/4 1 I 6 7 21 1„909,494 338 67,570,229 1,505 279,479,723 2015 1,687 206,33 6„883 294 78,20.9,095 1,981 284,545,978 '1' Source: The City. (I) Reflects lantraly throup,,h ptcomivr'2015, COUNTY CHARACTERISTICS Brazos County was created in 1841 from Robertson and Washington Counties, 'The economy is diversified primarily by agribusiness, computer manufacturing„ research and development, and education, The Texas Almanac designates crude, hogs, sorghums, corn, cotton,wheat,oais and pecans as the principal sources of agricultural income. The County lid a 20 1 0 populalion of 194,851,an increase of 2.7.81Vv^4 since 2000. Minerals produced in tlIC County include sand and gravel,lignite,gas and oil. A-4 APUNPL4 EXCERPTS FROM THE CITY OF COI LEGE STATION,TEx ANNUAL FINANCIAL REPORT For the Year Ended September 30,2015 The jai:it-illation contained in this Appendix consists of excerpts from the City of College Station,Texas Annual,Financial Report for the Year Ended September 30,2015,and is not intended to be a complete statement of the City's financial condition. Reference is made to the complete Report for further information. .,.,.„...„. .11:1111, 1r, tit" 11,0 011 11111111111111 aD is , „A, INDEPENDENT A U D ITOR S" REPO WI- he on ma 'tVI,a yor MembefS Of the City C7ouricil of thec ity of College tatFOti, Ix as Report on the Financial Statements We have audited the accompanyiR,! financial statements of the governmental activities„ the business-type activities, each major fund, and the aggregate remaining fund information of the City of College Station, Texas (the"City") as of and 'fi„)r the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these 'financial statements in accordance with accounting principles generally accepted in the United States of America; this includes, the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to.fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in GOVerrtillein Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement, An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements, The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error, in making those risk assessments,the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances„ but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. „, ,„ o+rpuur. ,,N;,,ocm ,'11)rY rolo ,11,erlo„%e,i'fr 1,10,ti 7:,'4); We believe that the audit, evidence \vc, have obtaitied is sufficient and a pinto p ri atc to k. a bii 13 1 S for °till' audit on i II/0 II S., 0111111140131s In our opinion, the financial statements refined to above present fairly, in all material respects„ the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of September 30,20 l 5, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in, accordance with accounting principles generally accepted in the United States of Arrteriea Emphasis of Matters As dest„xibed in Note I'V Ci,. to the financial f4tateillen I , in 201 fil„ the,City adopted new ,,i,ccott tli ill g guidance related to the accounting For pen,sions Our opinion is not modified with respect to this matter., IP,their Matters Reg mired Szim?lc:'inental Inli.nntation Accounting principles generally accepted in the United States a America require that the management's discussion and analysis and budgetary comparison information on pages 14-30 and 71-74 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic,or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Iqfarmation Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, and statistical section, arc presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and the related budgetary comparison schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been, subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United, States of America. In our opinion, the combining and individual nonmajor fund financial statements and the related budgetary comparison schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. 12 The introductory and ia.atistieal sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we (hi not express au opinion or provide any assurance on them, Other Reporting Required by Government Auditing Standards In accordance with Governtnent,Auditing Standards, we have also issued our report dated March I 8, .2016 on out' consideration of the City's internal control over financial yporting and on ow' tests of its compliance with certain provisions of laws, regulations,contracts„and grant agreements and other matters. The purpose of that report is to describe the scope°four testing of internal control over fi Il a 11C i al reporting and compliance and the results of that testing., and not to provide an opinion on internal control over. financial reporting or on compliance. That report is an integral part of an audit pea-kin-tied in accordance. Wit h Government Auditing ,StandardS in considering the Cit)1)S internal control over litiancial reporting and compliance, This report and the results of testing of uteri nil control and compliance for each major program can be found in the Compliance and Single Audit Reports for the year ended September 30, 2015, .1 , P( 04( ),.. (2,),(2.,/,&e,„ri--;'' (.2amp•- v , Bryan, Texas March 1 8, 20 I 6 13 11V,VV1i0P111,, V 1,,,111,,;,,,, V L W,P Ill'ilOpt 1 ( jil V 1, oltV,i,, V o(11111P1 1 i VI hill HI ,i II 111111111111111MM M1,11,1110 II 111101 0 Ilifillad ) '1111,111,0 l'11111 'V1111111111111 611, '' / II,v#vL IIIIIIIIIIIIIII II011111,1, ( CITY OF C(_)T,,I.,ii:GE STAT I()N Home of li,xets A 6'114' University , 110 11 s c ;sortt,,I ..,a n(A Aleiia For th;FiscAl Year Ended F)er)ternii-Ew.r 13r),, :;!(:)1.!.", (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, 2015. 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 and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent Fiscal year by ff,479,993„922 (net position), Of this amount „„ „ , „,,,1„,„,„„„, #,,tt ,N,huripould igillo litil'g 111,,,,,,,;i(i( (,IIIIIIIIIIIII (((((((l''' iiiii11111611111111111111111111111111111111ENNE $55„467,383(unrestricted riet assets)may be used to 01iffiTtill 111,1);010„.1,11100,04.,..„,00,4%m.% is,011014jJ111,,,,,,,,,,,,0:„,6,,,,,,to,„,,l,w1,101111111,1,1,1,1,1,1,1111,\,,, III ill'Irl to 1,, Iwo...91-1 meet the gover-nrnent's ongoing obligations to citizens ,!‘„,,,, 10,1„.,11104011,0,01..oesaig,,„ J01,1p0,,,,,oilio iti0iir,}14 ,,,,, Aurrigi , ,11„1„4,11,11,i,IIINIIIIIII„III„,1,1„s„( „ ; 017 •i,i,101'04,p,,, 40. 10 .41111114;ol and creditors. Illn Ikt,',' );!,,";,1:11„,,,;,,:1;;,,,,,,„„„:1, 4110rh 1 711filil\„tiliti„,„:„Iiii,,,h1„'!Iitil,I1119„„Iltifilij0,11 AL 1,1,54111" 918 '179 0 The City's total net position increased by$40„ ,,4,,i4144,,,,1„1,4111;1,1,4,,,,,,,,,44,1"11,S;;,1„,„,„1';f1,1,44,1'1111144„,,111144444„'111111,!,1111,',11,I,P11,1111111{1,11,1111114„,4141,011,1,0:,,,;,,,;,',1,111'4,11,1,1,11 'l' during the fiscal year, which includes a prior period III ,,,,,,,I$111111,111,911111/1„1,1111110;;„?1,0 t,,,;„,„1„,i, adjustment of lfi6,584,820. the City's At the close of the current fiscal year, , 0'0',11,:HH.H 00 , ''I'llifil'IfIflt-',ilitirrit governmental funds reported combined ending fund balances of $98,600,029 an increase of $8,746,341 when compared to the prior year. This increase is , 0„, 0,,,,,,000,1110FicsiorN,,,,, „nitItt'J',„,,„,,,,„',,„ primarily due to the recognition of proceeds frorri the sale of property that occurred during the year. Tilliii));,,,,,,: 0 Approximately 20.2 percent of the combined governmental funds ending fund balance, or $19925,641 are available for spending at the City's 11,j,,I,,,-,, ,,,„11,It 11:,,,,,,,,,,,,,,,„„1,,,,,10,,,,, '1144,1111'0„i5„I',„4, - ' ,H111414,0„:1741,11r*,141.,,,44it:40101,,,, ,,,,,* discretion (unassigned fund balance). ,1 "ftlfr,f , 100„ ",'Iltlit)110° ,l'I'l 07totto,;0',,'0''000 , 0„ 9 The City's total amount of outstanding debt is °I'I'll 11\eillr'''d;6 4111' 'III'JO'A ljljjjjj11111Jj jip 1111111A"". *,',J JJ„911,41,igi jl IA, j mil#,J.J1mm,j41,,,(JolljruIrJj11,4 $247,115,000 which is a net decrease of$19,870,000 over last year. This decrease is due to the retirement of general obligation improvement bonds, certificates of obligation and utility revenue bonds. Details can be found in the notes to the financial statements. 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, ,,,, MIP1.1.... ,MIUMIMIMIMM.....viciaciamila— ..J City of College Station,Texas 14 Managerrient's SS,i011 and Analysis Fol the Fiscal Year Ended September 0, „2 0 Kfrlau di veil) The following diagram illustrates the relationship between the different components of this report: Relationship lo4etween Comprehensive Annual Financial Report(CAP") and Basic Financial Statements and Required Supplementary Information(RSO General information on the government introductory structure, services, and environment Sect ion Page 1-10 Management's Discussion and Analysis Pages14-30 Basic Government-Wide Financial Statements, Pages 31-32 Financial Governmental Fund Financial Statements Statements, Pages 33-36 Proprietary Fund Financial Statements, Pages 37-39 Financial And Section Notes to the Financial Statements RS1 Pages 40-70 Additional Required Supplementary Information Pages 71-74 Information on individual funds and other supplementary information not required by GAAP Pages 75-116 Trend Data and Non-financial Data Statistical Pages 117-143 Section ....... 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 position presents information on all of the City's assets and liabilities, and deferred inflows/outflows of resources with the differences reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether or not the financial position of the City is improving or deteriorating. City of College Station, Texas NI a nage al e n s DisC11 SS i0 II and Analysis. For the Fiscal Year Ended SeptErnber 30,, 2015 ohlauditeclp The statioment of activities presents information showing how the City's net position changed during the most recent fiscal year. Ail changes in net position 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 hilt 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 technology, planning and development, fire, streets., drainage, traffic, park and recreation, anil citizen and neighborhood resources. The business-type activities of the City include electric, water,. wastewater, sanitation, and the Nor thgate parking garage. 'The government-wide financial statements can be found on pages 31-32. rood 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.Alt of the funds of the City can be divided into governmental kinds 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 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. 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 nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The governmental fund financial statements can be found on pages 33-36. 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. --„„„ City of College Station,Texas '16 S S 0 11 i7.1 n d At)a Iys is For the Fiscal Year Ended :Sept ember 30, 2015 0)naudited) 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. Electric, Wafer, 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 nonmajor enterprise funds. Individual fund data for the nonmajor 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 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 benefit both the governmental activities and the business- type activities and have been split between governmental activities and 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 37-39. 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. The notes to the financial statements can be found on pages 40-70. Required Supplementary Information In addition to the basic financial statements and accompanying notes, this report presents certain required supplementary information, found on pages 71-74, concerning the City's progress in funding its obligation to provide pension benefits and other postemployment benefits to its employees and the General Fund budget to actual comparison. Combining Statements The combining statements referred to earlier in connection with the nonmajor governmental funds, the nonmajor enterprise funds, and the internal service funds are found on pages 75-116. GOVERNMENT-WIDE FINANCIAL ANYALYSIS As noted earlier, net position may serve as a useful indicator of government's financial position. For the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $479,993,922 at the close of the most recent fiscal year. The largest portion of the City's net position(76,6 percent)reflects its investment of$367,570,439 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. City of Collee,e.Station,Texas m a r)a g e ry)ents Disc LI SS i r) at d An a lys s For the Fiscal Year Ender] September :30,„2,03.„"„',:i (Uhuamlited) Nal POsition Governinental Acluvrties Business-Type Aclietlies Total 2015 2014 2015 2014 20'15 2014 Assets Current arid other L), el 122,707,767 $'115,761,06,5 $ 66,566,97'1 $ 03,6351,28 $210,304,739 $209,6'1 7,091 asse0s 245,255,015 242166,310 330,762/194 321i,,ri11,6E1,3 576,017,509 566361,001 Tolal assels 367,962,782 358,551,283 427,359„465 911 795,322,2417 776,,996,094 Told clef erred oi Or low ut resources 6,609,688 1.712,893 :4677,765 '1,351,244 8,287,451 1„0,94,1:37 1i8610illes Long-term Intl p111w, DUIstandillg 125,247,330 123„373,071 150,2E12,307 15,7.936,201 .275,526,637 2'81,309,272 Other 1131611311335 115,435,110 19,787,860 26,712,091 35334,536, 46,147,161 55,,122,396 Total Ilahililios 1,43,662,440 143,160,931 176,99,1,398 193„270,737 323,676,92,9 336A,3 1.666_ Deterred Inflow s of resources Deterred charge on pensions 727,423 2'11,527 61E1,950 Telal deferred inflow s of resources 727 423 211 527 93.6,950_ Net Posltion Nat Investment in capital assets 167,101,930 12.5„012,201 200,468,509 165„180,,775 367,570,439 290,192,676 Restricted 55,374,914 15,,609,4'17 1,591:196 1,,560,992' 56,656,100 17,189„409 Unrestricted 7,665,763 76,502,627 47,781,620 61,775,551 55,467,383 1 38,279,179 Total net postilion $230,162,607 $217,123,245 $249,831,3'15 $228,537,318 $479,993,922 $445 660 563 " An additional portion of the City's net position, $56,956,100 (11,9 percent) represents resources that are subject to external restriction on how they may be used. The remaining balance of unrestricted net assets, $55,467,383 (11,6 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 able to report positive balances in all three categories of net position, 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 position increased by$34,333,359, as a result of fiscal year 2015 operations, as compared to the increase of $6,401,992 for fiscal year 2014 operations, City of College Station, Texas '18 , t»ci A t t o 1 y s t s F011 the IF i s cal Year 1E n ti ecl Se pte m e r :',i(:), 20'15 (Urouditeci) The following table provides a summary of the City's operations for the year ended September 30, 2015 and highlights key elements of the c,hange in the City's net position: Changes in Niel,Position: Governinental Activities flusiiness Type Activities Tritai Revenues 2015 2014 2015 2014 2015 2014 Program revenues: C:harges for services $ '14,139,897 iii: 12,248,313 S140,646,594. $ 135„5.51,'I 00 $ 1,54,786,.491 i$ 147;799,413 Operaling grams and contiibiition. 2,995,401 3„234,317 668,,322 291.366 3,663,723 3.525„683 Capital grants and contributions 3,542,528 7,104,520 9,596,8,13 7,,3013,230 '13,139,341.1 11,7'13,'750 General revenues; Property taxes 30,936,581 27„349,234 - 30,93.6,5.81 27.349„234 - Sales and mixed bevei age taxes 26,687,963 25„141,825 - 26,687,963 25,14'1,825 Other laxes 13,604,517 7,535,152 8,604,5.17 7,535,152 Gain on sale ot capital assets. (3,8'18,583 "1,827,713;1 6,818,583 'I,827","7133 „ Interest and iniwisimenli income 379,537 195,1163 '187,322. '120,006 566,1159 315869 Total revenues 91,105,007 84,937,007 'I 5'1,0913,65 t 143,271,702 245,204,058 228,208,709 ......„.., Expenses Police 18„60 237 17„768„724 - - 18„601,237 1'7,766,724 lire '15,095,073 14,2,15,690 - . 15„095,073 '14,2415,690 Public worKs '18,793,401 21,348,088 - - 18,793,401 2'1,348,088 Parks&recreation 9,884,737 9,'197,308 9„884,737 9,197,308 ,. Libiary 1„213,820 1,1149,1316 _ 1,213,820 '1,149,616 Planning&d'evelopment s.vcii. 3,225,321 5,012,992 _ 3,225,321 5,012,992 ' Information technology 4,41(3,1190 4,663,939 - 4,416,190 4,66,3„939 Fiscal services 3,594,382 3,419,923 - 3,594,.382 3,4'19,923 ,. General government 10,194,285 9,602.139 -- - 10,194,285 9,602,139 Capital projects '731,621 - .. - 731,521 Interest on long term debt, 3,943,972 3,962,347 - 3,943,972 3,962,347 ., Unallocated depreciation 1,235,340 1,161,67.5 - 1,235,340 1„161,,675 ,..Electric utility - 791,8.28,4'15 98,259,576 79,828,4'15 98,269,576 Water utility - - 13,082,761 11,517,915 13,082,761 11,517,915 Wastewater utility - - 12,437,020 11,205,770 12,437,020 11,205„770 Sanitation services - - 7,785,244 7,497,493 7,785,244 7,497,483 Parking operations - - 953,681. 1,05'1.,901 953,681 1.051,901 Total expenses 90,197,758 92,264,062. 114,088,121 129,542,655 204,285,879 221,800,717 incl.(Decr)in net position before Ira l 3,907,249 (7„327„055) 37,010,930 13,729,047 40,918,179 6,401,992 Transfers net 13,037,208 12,935,733 (13,037,208) (12,935,733) Increase in net position 16,944,457 5,608,678 23,973,722 793,314 40,918,179 6,401,992 Net position at beginning of year 217123,24,5 210,931,073 228,537,318 227,744,004 445,660,563 438,675,077 Prior period adjustment. (3„905,095) 583,494 (2,679,725) (6,584,8,20). 583,494 Net position at end of year $230,162,607 $217,123,245 $249,831,315 $228,,537,318 $479,993„922 $445,650,563_ -- Governmental Activities: Governmental activities increased the City of College Station's net position by $16,944,457. Key elements of this net increase are as follows: e Total revenues increased by 10.8% over the prior year. O Property taxes increased by 13.1% over the prior year as result of increases in property value and an increase in the tax rate. O Sales and mixed beverage taxes increased 6,2% over the prior year reflecting continued strength in the local economy, o All of the other governmental activity revenues increased 12.4% over the prior year, 6 Expenditures decreased 2.2% over the prior year in part as a result of lower public works capital expenditures in 2015 as compared to 2014. City of College Station, Texas i 9 1\flanaf),;evnerit's Dis(::1.,Issliall and /8,,,tv,,, ly,,›Is r.:()r the Fisr:al Year F'.pidecl September („), 21:)L11...,"; (it ilauclliterll) The chart below illustrates the City's governmental activities revenues by source: #, , Go,,erilirnentall Acti,,ities Revenue '",y 5,,nrce $94,105,007' mist carrital,,Grants 1Proopertv"rages 0 oit trib 10.8% 32.95ti„,, Charges for 3.13% ,„.ol,,,,,oosoi1141o1O1181olit,olioricoolO1,010illo ix sooloolooloolool IllilPlqiiiii 000i,000000000000i0000ioi0000000000000rroorr o,„„o„,,,,,,,,,,,,„,1„,„„„„„ Services 1.olitigi11O111111111114111iiiiilliOn! .4 d IIIIIII r,.' IIIIIIIII,',11!1;,i,,,,ig;''''""'I'll'''''''':o'l""''''''''"'''''',::::;o1),Po!!!:'00000i„,,„IoII'o'„:I:;'qvilliii 15'°()% ,„oo„,0000'ololOooOOOO,1111:o111OOoo11111°'"ooloi11111OOOOFOO'OIO!"'"11111O1"O1!111111111111111!!111OO°111„!,„00000lO000i o 1, .001o1ooO0000000000000000000000I000O0000000000000000000000OOOOOOOO0000„o1oo,o11111111111111o100°'""' , Ito,o 0,x0o14o„o'''''o:o°°°O,°°O4o,o'oo„,io„o,;104,1 nooloo;0110„000 iii1111Mhl i illH 111111Oilillillilil " \\ io111O.11111111o1,1°11111O00001111100000°'""°1II.....o,,,,,000,0000000000000000000000000„o,I„o„00000wo„1,00000„,.0000000000000„000000000OO1Ii0001111111000111''''''''''''. 11 i loon, ''- , ori000010,,lool0000r.ol000r0000000°,000l 1.1101, ioo.000io11:o1o1o1oi0000tioioi000i000000„„,„„00000„„„„„000000000000H„„oo„„ 1 111111111looloolooloolool0000loiol000l000ro„,o,„„ooloo......„ol offlooloos1111111111111111111111111111111olooloolool000l000ii11joli„,iiol lool00004o.o'111 ,o1 i.op0000000t000l0000„.:„„„,..o„ool000looloi,o,,,,„ 00,11:00001000001:::::.1:01,01:00Y 000000.oioo,,„00000000000000000000000000000000, '114111 °11 11111111 00000looi000000000O00000000000000000„:000t,!0000000000000000iooioi00000i000000000l,„osliloi 1 0 r10 i 1 i;0,000000,i000000,00,000:000000,0000000000,0000000000,„0„,„„0„:„0:0000,0„„,„„„„01 , ,,,: 1„, 0000,li,;iiiiiliiiiiiiiiiiiiios,„0i00:00\iiiiiiiiii00,00,00 iv ii0,000\00000i0000,0„0000111„,„i„0„:;,000„,0000„0„,‘\1100 , ''i 0,0••:°°0 0 010 1,11°''' 1 1 si i ,0 01 00 I: 000000,000000000,000000100,0100°00,000000,0000000t00000, 0 ' l 0 0000000000000010 1 1'HM11111111{ 1,11,10p100t1411111111111111 11 11,1,1111h4h111,1,,\ t g'7 1,1 II )1011t1111111111'1111'1'11 1111111111111!1 1 0 1 V 0 o II 11111111111111 1111111'i 11V111'1;'11011)1!011;111111111111111111110 (i ':: 1,,,11)11'111'00ii'l':,;',I'„,,1111111,111'it,,0'14111'""1 ii 0 V 1 11111 111111111111 I\ immi„„ '''\''''''61°\l'j'111 '''''ll''''ll'I'''''''1'11'1(11111'111111111111 111111P,111111111,1,11 1 iim 1 1,1,1,1,1,1,111 III1'101\ '''''''I'ltl111111$11111i11111111111 1101111hy 1 1„, ,,,,,,,,, ,III, 1 ''''IP)„1 I 1 1111111'/,„,'1\,\\),\p,,It'111q111111 1 11111111111 v1111111111 11 . .1.11 1 1!!'11111' 0. 1,, ''''''n'1,,111 4,'Iii41,0,i11101 1111111111111 1111111, ,..„ , „,,, . 1 '011°41111 0111111111111111111111111111111111111, Other Taxes J , ,:,;,:,1„11111,111111111111111,1111111.111111111111, 11'''''tofffIllIfIfIlililillilliigoimilloolviv1111,„1„ , 11,,,„,„,,,,„„ 9 p,„,;11,,,,I,,„11,11,11111,1111111111111111,N,,,,,,,,,,,„,„,„,„,„,„,„,„,„,„,„,„11, ,:l.% 1,iiill il Sales and Mixed 1?111111111'111 Beverage Tax 28,4% This chart depicts governmental activity program revenues relative to program expenses: Governmental Activities Program Revenue and Expense 20,000,000 16,000,000 i t ',III' 12,000,000 1 , 8,000,000 V1,1 ii01' ,11,,IL, ,,11:litl OD ,I 1 1,, nn rlrh 1 ,,,,,,,, q qq 11'd r'"N'All , Ilf,11, ;'11)1 '11''';'1 0'11111'Itril:')''I'l 1;''' I or)1,111, 4,00000.... 1, 1 , 'i,j'Hof lim 11111 1,i1,',, flA ,i,L,1,,1 ': 11 '17 r"'91111 11',Vvli 1 ' VH14' I ‘,1 ,,,,,,,.,',, '1,VVVVIV,V,I,'',ri',, 11V41111v,'I'V'1',', I10,01,Vrr,VVVV'' vO VAVVV;V,V'' '''hrrry VVVI r r I' 0' „arm o'l[rr 1.vr r,t',Iv,/ r r r r Police Fire Public Parks& Plan& Inform Fiscal 1Gen'l Other Works Rec Dev Tech Svcs Gov't iul Revenue --„ City of College Station,Texas 20 Ma nage rn ent's Disc USSiOn and Anal ys i s For the Fiscal Year Faded September 30, 20151 (Uniriuclited) Business-type Activities: Business-type activities increased the City of College Station's net position by $23,973,722. Key elements of this increase are as follows: Due in part to lower purchased power costs, expenses were lower than last year by $15,226,616. it Capital infrastructure contributions from various developments throughout the City contributed $9,596,8'13 to the net position. Revenues for the City's business-type activities are presented in the following chart: Business-type !l!'',eve l k_1,e $151,#99,051 Grants ,14,11 Other Contributions 6.3% 0.6% I 111111' „ 1 Iiii 1 1 r pt. 1 „14 .1 , Ill 1 All! 1 1 „I 1 1 11 1 1 1 ii I 1 I 1 1111 III 1111 1 1 1 II 1 1 1 1 1111 1 1 o ill II , 1 1 1 „„„,„...xxxxxxxxxxxxo 1 11 IIII 11 1 111111111031 ' . -1 „„,111111111111111111111P,1111111111111lIVINOMP 1 "Nolmimm Charges for Services 93.1% This chart depicts business-type activity program revenues relative to program expenses: Business-type Program Revenue and Expense 120,000,000 100,000,000 I" (11.7!Ir 80,000,000 MIllr 1 JP14,, 60,000,000 I 40,000,000 1 20,000,000 1110 11!!l!l ' 71711l1141$i di Vi ',711Slii i!ill'!!llII l't lit!!!!!1I10 1114111!„!1;1II00# ll,,10,1!!!7,rfIll!, Electric Water Wastewater Sanitation Parking Revenue 0 Expenses City of College Station, Texas 21 Manag PlIfS DISc t11;lOnan ,A,n a lysis For the I'isca Year F..„ndedSeptern be r 3 J, 21 1,5 (0 n udi ted) V*Miiiiind11111111111111111111111111111111111111111.11111111111,11111111111111111111111111111111111111111111111111111111111111111111111M1.1.111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111.11MNNMMIMW4MMM FINANCIAL A111,11ALYSIS 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 government& 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 requiret nents. n particular, unassigned 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 major 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 itontnajor'fonds. At of the end of the fiscal year 2015, the City's governmental funds reported combined ending fund balances of$98,600,029.Approximately,20.2,percent($19„925,641)of this total amount constitutes unassigned 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: Nonspe ndable 3; 6,307,868 Restricted $ 55,139,903 Committed $ 14,1792,873 Assigned $ 2,433,744 A detailed breakdown of the fund balance can be'found in Note IV, I. Components of Fund Balances. Revenues for governmental functions totaled $83,944,890 in fiscal year ended September 30, 20115, an increase of 10.6 percent or$8,013,479 from the fiscal year ended September 30, 2014,, Expenditures for governmental functions totaling $97,209,98,2 increased by approximately 1.4 percent or $1,37.3,022 from the fiscal year ended September 30, 2014. Other financing sources and uses (net) was $22,011,413. As a result, in fiscal year 2015, revenues for governmental functions exceeded expenditures by $8,746,321. Most of this increase was the result of proceeds received for the sale of city property that was recognized in the Hotel Tax Fund. The General Fund is the chief operating fund of the City of College Station.At the end of the current fiscal year, the unassigned fund balance was $19,925,641 while the total fund balance was $22,423,064. The City's fiscal and budgetary policies require that the General Fund's fund balance be at least equal to 15 percent of budgeted expenditures, a percentage equal to 55 days of expenditures. The total fund balance is approximately 30.7 percent of fiscal year 2015 amended budgeted expenditures and exceeds the minimum requirement set by policy. As a measure of fundr,s,liquidity, it is useful to compare both unassigned and total fund balance to total fund actual expenditures. Unassigned fund balance represents 28.1 percent of total general fund expenditures, while total fund balance represents 31.6 percent of total general fund expenditures. The total fund balance for the general fund 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 increased by $2,178,815 during the current fiscal year due primarily to the recognition of proceeds from the sale of real property. The Debt Service Fund ended the fiscal year with a fund balance of $2,814,048. This entire amount is reserved for the payment of debt service. The net decrease in fund balance during the current fiscal year was$400,386. This decrease is due to a planned reduction in the fund balance. City of College Station, texas 22 M;3 g e rri e n V Discussio ni a to IA n a For t Fisrai Year End ed septenn r 0, 201..5 (Unaudited) The Streets Projects Fund ended the fiscal year with a balance of $.19,681„609. This entire amount is reserved for encumbrances related to current capital projects and for future capital projects. The net decrease in fund balance during the current fiscal year was$3„887„596. This decrease was attributable to progress being made on streets capital projects during this fiscal year, 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 position' of $2419.,8:31„315. Of this amount, 19.1 percent (T41,781,620) constitutes 1„,.inrestricted net position. The remainder of net position for the proprietary funds is reported as follows: Invested in capital assets, net related debt($200„468„509)and io Restricted for debt service W1,581:184 Operating revenues for proprietary activities totaled $14,1,149,254 for the fiscal year, an increase of 4.2' percent or$5„722,597 from the previous fiscal year. Operating expenses decreased $15,226,616 or 12.5 percent for the same period. Operating income was $34,1,34,507 for the fiscal year. The proprietary funds reported net non-operating expenses of$7,151,677 at the end of fiscal year 2015 as compared to net non- operating expenses of $6,602,314 in the previous fiscal year. The Proprietary Funds had an overall increase of$21,293,998 in net position for fiscal year 2015. Electric Fund At the end of the fiscal year, the unrestricted net position for the Electric Fund totaled $14,067,233. 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, 2015, Electric Fund working capital equaled approximately 281 percent of annual operating expenses, as compared to 11,5 percent at September 30, 2014,, This increase was due to lower purchased power expenses in 20'15. Electric Fund operating revenues increased by 3,4 percent ($3,340,917) during fiscal year 2015, while operating expenses decreased 18.5 percent ($17,638,392) during the same period. This resulted in operating income of $23,651,186. The operating income when combined with the net non-operating expenses, net capital contributions and transfers resulted in an increase in net position of$18,884,208 in the Electric Fund during the fiscal year. Water Fund Unrestricted net position for the Water Fund at September 30, 2015 totaled $6,035,011,At September 30, 2015, Water Fund working capital equaled approximately 57,,3, percent of annual operating expenses, as compared to 109.4 percent at September 30, 2014, Water Fund operating revenues increased by 7.6 percent ($1,062,541) during fiscal year 2015. Operating expenses of$10,469,753 increased 13.8 percent ($1,270,187)over fiscal year 2014., This resulted in operating income of$4,542,959. The operating income when combined with the net non-operating expenses, net capital contributions and transfers resulted in an increase in net position of$1,228,919 in the Water Fund during the fiscal year. Wastewater F 4114 The Wastewater Fund's unrestricted net position at the end of the fiscal year 2015 totaled $8,452,311. At September 30. 2015, Wastewater Fund working capital equaled approximately 147,4 percent of annual operating expenses, as compared to 161,7 percent at September 30, 2014. City of College Station, Texas 23 1V1,;11 ni age rn e sc SS 011 rt Att a iys For the Fisc a d Year Ended September 30„ 2015 (Unaudited), Operating revenues in Wastewater Fund were$14,915,404 or a$520„853 (3.6 percent) increase over the previous fiscal year. Operating expenses increased from $9,721,259 to $10,580„787 or 8,8 percent while operating income decreased by 7.2 percent from $4,673,292 to $4,334,617, The operating income when combined with the net non-operating expenses, net capital contributions and transfers resulted in an increase in net position of$862,340 in the Wastewater Fund diming the fiscal year. Budgetary Highlights The final amended budget'for tiscat year 2015 totaled 1;200,358,701 for all funds. In the General Fund the final amended budget showed a decrease in fur id balance of $6,217,838. The actual change in fund balance (GAAP Basis) was an increase of $3,051,928, The following are some of the key factors in the change in fund balance; a Revenues were higher than the estimate due to increases in property tax and sales tax revenues. O Expenditures were overall lower due to reduced and deferred spending during the fiscal year. Some expenditures Warmed for 2015 will occur in 2016. a Sale of capital assets reflected the sale of real property that was not anticipated in the budget. Strategic planning is a driving force in the preparation of the City's budget. The City Cor rcil has identified the'following areas of strategic priority: O Good Governance a Financially Sustainable City O Providing Core Services and Infrastructure • Neighborhood Integrity • Diverse Growing Economy • Improving Mobility • Sustainable City Budget resources were included in the fiscal year 2015 to address these priorities. CAPITAL ASSETS The City of College Station's investment in capital assets for its governmental and business-type activities as of September 30, 2015 amounted to $576,017,509 (net of accumulated depreciation). This investment in capital assets includes land, utility systems, building 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 $ 34,864,726 '$ 690„750 $ 35,555,476, Utility systems 309,240,311 309,240,311 Buildings and other improvements 26„096,513 3,758,8,48 29,855,361 Improvements other than buildings 24,366370 24,,366,370 Machinery and equipment '12,3171,830 3,772,576 16,090,406 Infrastructure 135,6,26,317 135,626)317 Construction in progress '11,983,259 13,300,009 ,25,283,268 $ 2.45,255,015 $ 330,762,494 $576,017,509 City of College Station, Texas 24 anag eft)e iS tiskn attJ 1\r.171 ys s F'or the Fiscal Year F..ncleci September ,30,, 201 (1„Inaudited) Major capital projects completed by the City during the 2015 fiscal year include the following: • Jones Butler Extension • Cooper Street and Utility Rehabilitation Dominik,Sidewalks from Texas to George Bush Dominik Sidewalks from George Bush to the Gables 4, West Ridge/San Pedro Sidewalks • Texas Avenue Sidewalks, iii Barron Road Improvements SH 40 to VV S Phillip Parkway • East District Maintenance Shop • Wolf Pen Creek Restroorns 4' Aerial Imagery Updates si Network and Data Security Upgrades, 30" Parallel Water Transmission Line ▪ West Side Sewer ▪ Royder/Live Oak Sewer 4, Southwood Valley Substation 'Transformer Replacement • Fle,alth, Science Pkwy Electric Duct System Install W.S. Phillips Pkwy Overhead Line Extension Additional information on the City's, capital assets can be found in Note IV.0 to the financial statements. Debt Administration At the end of the 2015 fiscal year, the City of College Station had total debt outstanding of $247,115,000. Of this amount, ,$233,720,000 (94.6 percent) is comprised of debt backed by the full faith and credit of the City. Certificates of Obligation that fund business-type activities in the Electric, Water, Wastewater and Northgate Parking Garage Funds are also backed by the surplus of revenue derived from each enterprise funds revenue source, The remaining debt $13,395,000 (5,4 percent), is revenue bonds secured by specified revenue sources from the City's combined utility system. 2015 Year-End Outstanding Debt Payable Governmental Business-Type Activities Activities Total General Obligation Bonds $ 81,855,000 $ 44,670,000 $ 126,525,000 Certificates of Obligation 19,890,000 ,87,305,000 107,195,000 Revenue Bonds 13,395,000 13,395,000 $ 101,745,000 $ 145,370,000 $ 247,115,000 The City's total debt decreased by $19,870,000 (7A percent)during the current fiscal year, The change in total debt was a result of the following: 0 Retirement of$18„345„000 in general obligation improvement bonds and certificates of obligation, and the retirement of$1„525,000 in utility revenue bonds, The City's General Obligation and Certificates of Obligation have an underlying rating of AA+ by Standard & Poor's ("S&P') and Aa2 by Moody's Investors Service ("Moody's"). The underlying ratings for the City's revenue bonds are A+ by S&P and Aa2 by Moody's. Additional information on the City's long-term debt can be found in Note IV,F1 to the financial statements, City of College Station, Texas 25 Management's Diso„,,Ission and Analysis For the Fisca Year E...nd efi September .30,. 2015. (iinaudited) PENSIONS AND RETIREE HEALTHCARE Effective in fiscal year 2015, the Governmental Accounting Standard Board (GASB) Statement No. 68, "Accounting and Financial Reporting for Pensions" created specific reporting requirements for pensions that are different than prior years. The reporting valuation provides a rigorous standard measure that can be used to compare the City's pension liabilities to other governments from around the nation. The funding valuation is important as the actuarial methods used including strategies for repaying any unfunded actuarial accrued liabilities combined with the City's history of making those contributions provides insights regarding the City's commitment to and the effectiveness of its'funding strategy, information contained in the financial statements themselves including the first schedule of Required Supplernentary Information (RSI), Schedule of Changes in Net Pension Liability and Related Ratios, is based on the reporting valuation, he second schedule in the RSI, Schedule of Contributions, is based on the funding valuation. On a reporting basis, the City's financial statements reflect a Net Pension Liability as of September 30,2015 of$22,106,844,which is 51%of the City's annual covered payroll of$43,726,328, ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES. Economic conditions remain positive in the City of College Station. Sales tax revenues have been strong for the past several years, and property values have continued to increase as well, with new construction continuing at a strong pace, Growth continues throughout the City. In the northern part of the City, construction continues along the University Drive Corridor with the construction of mixed use developments including Northpoint Crossing and the upcoming redevelopment of the Chimney Hill shopping center. In addition, the Century Square mixed-use development along University Drive is underway and is expected to include hotels; a conference center; office, living and retail space; as well as restaurants. There also continues to be activity in the Bio-Corridor. Multi-family construction continues to take place around the city as well, Plans for development continue in the Medical District in the southern part of the City east of Highway 6 and south of Rock Prairie Road. The City Council approved an Infrastructure and Economic Development Agreement designed to facilitate the installation of primary infrastructure needed to activate the larger area for private development. There is also increased interest by business prospects to potentially locate in the, College Station Business Center and the Spring Creek Corporate campus. Retail development continues, especially in the southern part of the City with new restaurants and other businesses opening and others under construction. The tourism and hospitality industry continues to grow with hotel rooms under construction in College Station. The multi-purpose synthetic fields in Veterans Park were completed test year and the fields have been utilized for a variety of events including the popular 7 on 7 football tournament, The City again hosted the very successful Texas Amateur Athletic Federation Games of Texas, which attracted thousands of visitors to the region. These facilities, along with the Facilities Access Agreement in place for facilities at Texas A&M University, will attract additional events that, otherwise, likely would not have come to the area. Texas A&M University continues to see significant growth and development. The redevelopment of Kyle Field was completed in time for the start of the 201 5 football season. Enrollment continues to increase at Texas A&M University and is estimated to be over 59,000 for the fall semester. Construction of new buildings and facilities on campus continues to accommodate this growth. City of College Station, Texas 26 anage ent'S I S C115 IOn and An a ys i s r For the Fisica Yea Fr ded epternber 2.0:13 (Ur)audited) All of this positive economic news puts strains on the city services, such as public safety, the transportation system, utilities and other core services, The following are some key fiscal and economic indicators for College Station including: • The total certified value of property in the City of College Station for 2.015 is $6,611„929,074. 'This is an increase of 6,4%., over last year. This increase in value is due in pant to new property values from new construction of$229,580,610 added to the tax rolls. Existing property values increased by 2,7% over 2015. • Since 2010 taxable values have increased from approximately$f3.4 billion to approximately ti;6.6 billion corrantly. • Through September 2015 the local unemployment rate was 3.11%„ This is below the state average of 4.4"A and the national average of 4.9%. • Sales and mixed drink beverage tax revenue, the largest revenue stream in the General Fund saw a positive increase of 7 I% in fiscal year,2015, The FY 2016 budget sets the strategic policy direction for the City and provides the funding to implement that direction for the year. This budget will allow the staff to continue to meet the needs of our citizens and visitors as the City continues to experience a sustained period of growth. This shows itself through continued growth in higher education, through a robust visitor and tourism economy, and all of the ancillary things this growth brings. While growth continues, there is also a need to maintain and improve existing infrastructure throughout the City. This budget is a roadmap for addressing the growth and infrastructure maintenance demands of the City into the future., Key factors influencing budget preparation • Continued strength in the higher education sector of the economy. • Growth in service demands in areas including Public Safety and Streets/Transportation. • Increased tourism and visitor growth to the community. • Maintenance and repair of existing facilities and infrastructure. • Continued commitment to attracting and retaining a well-qualified, highly regarded workforce. • Continuing the commitment to Economic Development efforts in College Station, • Continued residential and commercial development throughout the city. Addressing Growth, • Providing additional Police, Fire and Emergency Medical Services for citizens and visitors. • Maintaining existing infrastructure including the streets and traffic management systems, electric, water and wastewater utility systems, parks and recreation facilities, and other city facilities. • Adding and expanding capital infrastructure including streets, electric, water and wastewater utility systems, parks and recreation facilities, and other city facilities to meet the service demands that accompany growth. • Attracting and retaining a well-qualified workforce to provide excellent service, As the City continues to grow, we must respond to that growth in a sustainable and measured manner. We must be prudent with the limited available resources in an effort to maximize the services provided to citizens and visitors of College Station. City of College Station,Texas 27 Maria g e e n s 1:„) CUSIOfl and ,Ana ys s For the Fiscal Year Ended September 34„"), 2015 (u..)naudieco Service Level Increases On a continual basis, the City looks at ways to streamline and considers organizational changes. This. budget scrubbing is done each year as departments are asked to review current processes and identify efficiencies and reallocate resources that can result in improved or increased services with minimal or no cost increase. However, we also recognize that increased growth puts demands on resources and results in the need for service level increases. Below is a summary of some of the key service level increases that are included in the approved budget, Core Services and Infrastructure Police Department Additional resources are included in the Police Depeitment budget to keep up with growth in the community. The budget includes four new positions and associated equiprnent: One Redlining and Training Officei One Special investigations Officer One Communications Operator' One Community Enhancement Police Assistant 'These positions will allow the department to focus more resources on public safety as the City continues to grow. Fire Department The approved budget includes six firefighter positions to continue the staffing of a second ladder truck for the City. These positions are partially funded through the Assistance to Firefighters Grant, which was awarded to the Fire Department in August 2015, Funding is also included for the purchase of the ladder truck. This is the second of a multi-year plan to add a new ladder truck to be located at Station#6 on University Drive, Funds are also included for the purchase of automatic CPR devices. Funds have also been set aside for the replacement of the Self Contained Breathing Apparatus for all firefighters in FY 2017,. Public Works Funds are included in the Public Works approved budget to maintain the Cityls infrastructure. This includes$1,600,,000 in increased funding for street repair throughout the City,of which $1,450,000 is one time funding. Funds are also included to address maintaining the City's facilities. Two years, ago a facilities assessment was completed that identified repairs that needed to be completed over the next several years, This budget includes approximately$1.9 million to continue addressing the maintenance and repairs identified in the assessment report. The approved budget also includes an additional Traffic Engineer position as part of the continued implementation of the Intelligent Transportation System (ITS)master plan. Electric Utility The Electric Utility budget includes funding for an Electric Meter Technician position and a Line Technician/Troubleman position, These positions are necessary to meet the growing demands of the utility. Funding is also included for substation painting an important maintenance activity.. City of College Station,Texas 28 Management's Discussion and Analysis Fat the Fiscal Year Ended September 30, 20:11,"ii,ii (Unaudited) Water Services. The Water Services budget includes the addition of a Crew Leader position and Field Operator position. This completes a two-year plan to add an additional crew for water services that will be responsible for maintenance of the water distribution system and wastewater collection system, Funds are also included for maintenance activities and new equipment., Parks and Recreation Funds are included in the Parks and Recreation approved budget to address equipment needs for the parks tl3ystem as well as. court rosifffacing, replacement playground equipment and the repair and ,addition of various amenities. Many of these items have been identified in the Parks Asset Management Plan. Neighborhood Integrity' Planning and Development Services Funds are included in the approved budget for the implementation of components of neighborhood plan projects that have been identified in recent years. Diverse Growing Economy Economic Development The approved budget includes funding for additional economic development efforts in College Station. This includes additional funding for the City's Economic Development Division. Tax Rate The fiscal year 2016 budget was prepared using a tax rate of 45,25 cents per $100 assessed valuation. This is the same as the fiscal year 2015 tax rate. The debt service portion of the tax rate is 19.3052 cents, which is the rate necessary to meet the tax supported debt obligations of the City. The operations and maintenance portion of the tax rate is 25.9448 cents. This provides the necessary revenue to support the adopted General Fund budget, Utility Rates The fiscal year 2016 budget does not include utility rate increases Capital Projects The approved Capital Improvements Project Budget for FY16 totals $89,915,959 for all funds that include capital projects. This is an increase of approximately $56 million over the capital budget for FY15 and reflects some significant capital projects scheduled to be addressed this coming year. The appropriations are intended to provide budget authorization for the contracts that are expected to be brought to Council for approval in FY16. In some cases, the expenditures related to these contracts may be spread across multiple fiscal years and, in those cases, the appropriations for the fiscal year would exceed the anticipated expenditure for the fiscal year. The appropriations on capital projects will carry forward into subsequent fiscal years. City of College Station,Texas 29 ....... nagerne s Discussion arid na iys s For the Fiscal Yea r ded Septe mber 3 0, 2(.'.)J (Unaudited) The following are major projects in design, under construction or to be completed in 2016: • Roadway and Utility Rehabilitation Projects including Graham Road, Munson Street, Francis, Drive and Luther Street * Rock Prairie Road VVest Widening, • Eisenhower Street Extension . Lakeway Extension • Greens Prairie Trail from FM 2154 thiough Royder ▪ Cain/Deacon Union Pacific Railroad Crossing Switch O Design of FM 2818 Capacity Improvements • Safety Improvements—Holik, Park Place, Anna a n d Glade Royder Road Expansion • Signal at State Highway 40 and Victoria • Intelligent iransportatian System (ITS) Master Plan Implementation • Lick Creek Hike and Bike Trail * University Drive Pedestrian Improvements, • New Police Station Design Computer Aided Dispatch/Records Management System (CADIRMt,';) Replacement co Enterprise Resource Planning (ERP) System Replacement * Library Expansion • Lick Creek Nature Center o Lincoln Center Addition o Well#9 and Well#9 Collection Line • Area 2 Water Line Extension • Eastgate Water and Wastewater Utility Rehabilitation • Lick Creek Parallel Trunkline • Carter Creek Wastewater Treatment Plant Centrifuge and Electrical Improvements • Installation of 2nd Transformer at Northgate Substation * Electric Transmission Line Reroute and Reconductor The capital funds come from various sources including General Obligation bonds authorized by the voters, Certificates of Obligation supported by the tax rate or utility rates, and existing cash reserves from the General Fund, the Utility funds, and the Hotel Tax Fund, Associated operating and maintenance costs needed for the projects that will be operational in FY16 have been included in the approved budget. The City plans to issue debt for capital projects in 2016, REQUEST 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:Assistant City Manager PO Box 9960 College Station, Texas 77840-9960 Or visit our website at http://wwwcstxqov/caft City of College Station,Texas 30 001„lh 011, (0,,I,,, , ,mil R11,d1011 11 Idi "lipp 11„ 11 Ill ,NE. 11"!11; 141111111 11,111,,,o,,,:11,111.1111111 ,1 „ CITY OF C()1 41 ,F,G17, STATION Home of7i,,rits Ae,:9-M University' Oily oF COLLEGE STATtON,TEXAS Siziteinen1 of Net Posntiort S'epuember 10,20'45 Governmental BlItiirlOfiS.type ACOVidell ACIWitieS 1ra41 --,- ....., Assets Cash 1„114:11 cal emilvatentz $ '102,864,550 t 29,947,068 $ "112,841„616 frivestments 10,219,867 2,9/4,036 '11„'I 93,903 Rilceivahtes tile(al;:41owl14;10'trocullectible) 5,625,266 19,657,534 25,,282,802 linvestrnerds Interest receivable 8,010 3,736 'I'V„766 Inventories 6,488,1'78 2,619,840 0,099,016 internal butane t3,9944,441) 3,994,411 Prepairls, 16,670 16,670 „ Restrictoor a$sels Cash nod cash equilv,441elits '18,'I 72,990 46,''l 72,000 ., Loulty al irive,,,Mneuil„4, 4,866,038 '1,8015,638 Equity tot fluir41 vvelure „llure 13,572,31)5 P3,572,,:306 1,„eples peceivabto "1,449,645 3„800,000 5,309,615 Capital oreels(net of acoum dopn,,c1r,thon) Land and construction In t)rogress 46,8,07,985 13,990,759 60,638„'7114 Other capital assets net of accum depreciation) '196,407,030 316,771,7„3,5 515,178„765 Total assets 367,952,702 427,359,465 795,122,247 Deferred outflows 0 resokdfCe$ Deterred charge on pension 5,10'7,505 1„485,207 6,592,712 Deterred charge on rekindling 1,662,183 1,192,558 2,694,741 ,... Total deferred outflows of resources, ....„.r.,,,,,,..,..... 6,6119,684 2,677,765 9,287,453 Liabilities Accounts payable, 2,904,002 12,953,448 15,857,450 Accrued liabilities 1,670,911 657,733 2„328,644 Retainage payable 160,036 394,321 554„3,57 Customer construction advances 753,96,6 - 753,960 Claims payable 1,9,73,042 1,973,042 ., Unearned revenues 951,162 21,,677 972,839 Accrued Interest payable 541,33,8 762,609 1,303,947 Refundable deposits 100,759 3,18,8,175 3„288,934 Compensated absences-current 225,927 56,744 282,,671 Current portion of tong-lerm 9,15,3,973 11,677,374 20,831,34'7 Bonds and certificate,of obligation payable 97,515,943 142,299„056 239,814,,999 Compensated absences-long-term 2,760,267 691,2'74 3,453,541 Oilier post employment benefits 7,844,506 2,309,747 10,154,253 Net pension oblIpatton 17,126,6'14 4,980,230 22,106,8,44 Total liabilities 143,682,440 179,994,388 123,676,828 Deterred Inflows of resources Deferred charge on pensions 727,423 211,527 938,,950 Total deterred inflows of resources 727,423 211,527 938,,950 Net position Net investment in capital assets 167;101,930 200,468,569 367,570,439 Restricted for Debt service 2,814,648 1,581,186 4,395,234 Public safely 828,330 - 828,336 Community development 2,163,507 - 2,163,507 Tourism 8,663,165 , 8,663,166 Capital protects, 38,426,812' ., 38,426,832 Other purposes 2,479,031 2,479,031 - Unrestricted 7,685,763 47,7811,620 55,467,383, Total net 110Sitbn li 3026 2 ,16 , 07 '44 5 _249,831,315 6 479,991922 The notes to the financial Str1V1Meld'i are art integral pan of this statement, 31 . . . CITY OF 6011.,3.E0te$"1"A"'1110N,TEXAS Statement ul Activities Rs the Year Fasted(.3eplernher 130,20'15 po°gra OTI Reverines Na).Revenue(Experise)and .....____ Oporattrig CaplIal _ Changes in Net Position Charges,for Granls,antl Grants and, Governmental 11tisiness-lype 1...91151121152171gtarns Expenses Services .c.. f5L Contributions Activities A.ctivities Total Goverlinteultalartivilies: Pollee $ 16.601,237 $ 607,1339 $ 5.6,580, 5 , $ (17,937,618) 1 $ 07,93818) , Fire' 15,095,073 1,96 111.26 298,654 , (12,r3,36,01-14) (12,615„094),Public workri 18,,793„101 2„1154,382 , :2,644,2313 (1'3,994,(86) (13,994„786) „ , Parks and loci eakon 9„884,737 1„652,01 71 153,677 998.405 (6,780,051) (6,7,60,65,1) . Library 1,213.820 .. ("1,2)3,820) CI,213,1120) ,. ,„ Planning)and develorgraent:we!) 3,225321 1,685,663 ,. , (1,339,(56) ('I,339,768) , , lInformetiort technology 4,116,190 72 (4,416,118) (1„416,118) . Fiscal!services 3,694,382 '2,956,304 (638,078) , (638,070) . ,, General government 10,194.26,5 2,822,398, 2.187,590 (5,184..297) , (5184,297) Interest rio long-term debt 3.943,972 - (3,943,9 -72) (3„971,3,972) . „ Unallocated LiepresnfiOn 1,236..340 - (1,235,340) 11,235,340) „ Tolal,governatental,activitIes '90,197,758 "11139497' 2,89(3.401 3,542.528 iqo 5 l'pn' (69,5'119 932) ., Business-type activities: Electric 79,628,415 101,4132,340 41,4306,336 , 25,610,261, 25,6'10,261 . Water 13,082,761 15,069,7201 2.088,029 4,074„986 4,074,968 , Wastewater "12,437,020 13„864,099 . 2,,007 •,222 3,43.4„301 3,43,4,301 , Sanitation "7786,244 8,645,1,45 668.322 1,472.527 3,199,750, ,3,199,750 Nortrigete parking 953,681 1,435,290 22,699 - 504,306 .........)))._ 04„306 ..., Total business-type activities 114,088,121 140,646,594 668,322 9.596,813 36,623,606 36,823,60.6 Total primary government $ 204,285,879 $ 15,4.786,49'1 $ 3,661,723 $ 13,139,341 (69,519,.932) 36,623,606 (32,696.324) General,revenue' Property taxes 30,936,561 30„936„581. Sales taxes 26,687,963, 26,687,963 . Other taxes 6,601,517 8,604,517' Unrestricted Investment earnings 379,537 187.322 566,859 Gain on sale of capital assets, 6,818,583 - 6,8118,583, Transfers 13,037,208 (13,037,208) Total general revenues and transfers 86,464,389 (12,849,886) 73,614,503 Change in net position 16,944,457 23,973,722 48,916,179 Net position-beginning 217,123,245 228,537.318 4145.6.60,563 Prior period adjustment (3„905.095) (2,679,725) (6,5(34,820) Net position-ending "..$. 230„162,,607 $, 24'9 8,11.315 $ 479,,993,922 The notes to he financial statements are an integral part of this statement, 32 cyIV op COLLEGE STATION, 1"EXAS 1,'Jalar4r,e Shoril GovKromental Funds September 30,,20.15 Other "wall Gr.-)vernmental Governmental Genorai Debt Service Se eots Proiects Funds Funds Assets Current aie.A•ilIS Cash and.ensh riquivolerds $ 20„911530 $ 2,560.2'16 $ 18,856,421 $ 4'I„467,058 ;Ill. 833597,335 Enully In invesenene, 2„076,644 254,308 '4,853,156 4„118,954 8,303,062 Receivables(not nl allow for uncollectibt ) ;3,805,692 520733, 345„991 I„005,425 5,090,321 Invesiments interest receivable 3,670 199 1,449 3,215 6,533 Invent:ides 19,509 6,244,189 0,293,698 , Pollard ousli,.: 94,170 - ,. '14,170 .Loons NLIC1Avable 1.449,61.5. I„449,645 „Tniall assulis ! 6:66:11A115.. ;L--.147E30 I.„.,.„„411574923 L54,282.4613 5 :195,351,744 Liabilities Accounts payable $ 794,1303 $ 675 $ 733,580 $ 280,303 :,ii 1,809,361 AccriVid f(abilities 1,60,2,82'2 35,398 '1,636,220 „ - Rotaineqe payable 94,637 60,677 155,214 „ Customer Orinstnoclian edvarire., 75'2,760 1,200 753,960 .. ,., Retundable iifinusfts 100,759 - 100,759 Total liabillties 3,251,144 675 '829,417 376,278 4,157,514 Defer red 1nllows of resources Unavallabilelevenue-loans receivable - - - 211,738 211,738 Unavailable revenue-property taxes 554,073 533,20'7 - 1,087„280 UnavallataVe revenue-other 633,034 345,997 '19.142 998,1173 Total deferred nflows of resources 1,187,107 _ 53.3,207 345,9917 2301,880 2,297,191 Fund balances Nonspendable 63,679 - 6,244,189 6,3017,868 Restricted - 2,814,048 19,6811,609 32,644,246 55,139,903 Committed - - - 14,792,873 14,792„873 Assigned 2,433,744 - - - 2,433,744 Unassigned 19,925„641 - 19,925,641 Total fund balances 22,423,064 2,814,048 19,681.609 53,681,308 98,600,029 Total liabildles,deferred Inflows or resources and fund balances. $ 26,,861 315 $ 3,347,930 $ 20,857,022 $_. 54,288„466 $ 105,354;734 The notes to the financial sletements are an integral part of this statement, 33 Cif)(Of COLLEGE STATION,TEXAS Re(i)nciliation of the Balance She.et of Governmental Fund's, to the Eltaternenti of hlet Position September 30,2015 Total fund balance per balance sheet $ 98,600,e29 ArnouttIs reported for governmetal activities in the statement of net p.ositioli are different because: Certitril assets used in coverninentat activities are not lirOncia1 resources,Illterefore ;4ro riirA reported in the 90Ve4 ni'nuoWal holds balance shoot 236,924,2 38 Deterred cnottiows of resources not recoiled in the goverernerieit funds: Pension contributicins after meascorernent date 3,519,628 Difference in prolected and actual earnings '1,587,877 Deferred charges on debt,refundings 11,502,183 6,609,688 Deferred inflows oh resources,not reported in the govemnierital finds' Difference in expected nod actual expeoleo Ice (727.4231 Long-term liabilities are not due and payable in the.current period,therefore are not reported in the governmental funds balance sheet. Due within one year (10„343,423) Due in more than one year (134,947,142) Interest payable on long-term debt does not require current financial resources and is not reported in the governmental funds balance sheet. (541,338) Allowance for loans receivable (72,663) Other long-term assets are not available to pay for current period expenditures and,therefore,are reported as unavailable revenue in the funds 2,297,191 Internal service funds are used by management to charge the costs of certain activities, such as insurance,fleet maintenance,and equipment replacement to individual funds. The assets and liabilities of the internal service funds are included In the government-wide statements of net position(net of the amount allocated to business-type activities). Assets. 30,767,837 Liabilities (3,753,399) Net amount allocated to business-type activities (3,994,411) 23,020,027 Net position of governmental activities 2,30,162,607 The notes to the financial statements are an integral part of this statement, 34 CITY OF COLLEGE STATION,1 Statement of Reveritiet,.,Expenditures,,and Changes in Fund 13,,a0actexn Goverritxtental Funds Ear the Ftsc.,a1 YC,'.:111-Elicleit September 30,,2015 ocher Total Govecnrneu itall GovernrnenVal General Debt Setvice Streets PrOK:Ci FUI7dS F1111(15 RUVOltitOOS Sr'valorem,fence $ '17,000,439 $ 12,655,921,0 $ . $ 192,941 $ 29,849,300 Sales taxes 20,687,963 - - . 26,087,06:3 Oil ter taxes :3,06'1,7118 „ , 5,5,12,'199 8,604,517 11„.icensesi and permits 1,,500,777' ., 1,500,7 t't In te r goy er nmen la I 355,06„3 187,020 2,19.2,660 2.734,16.3 Chart:4es for services :,,,,572,,6641 . 2,746,038 6„318„722 Dries,l'ofclits,and peliallie.:,, 2,603,647 '206,549 2,,000.106 Investment income 116,074 '19,417 90,:109 1.53,740, 370.540 Penes and royattles 136,228 ,. . - '036,226 C0ontlibuhons 1.251 ,., 'I,.4441,702 '0,40415„953 Other 3,252,310 . 107,897 26,724 3,386,93'1 1otal:revenues 58,378,174 12,675,13,37 1385.226 12,506,'153, 83,944.800 Expendilure.s. Cturrent Ponce 16,533.889 „. 13,905 16,547,794 Fire 14,681,983 . „ ,. 14,881,983 Public works, 9,156,070 . - 1.116,465 10,272,535 Parks and recreation 6,194,670. „ 352,4'13 8„547,083 Library '1,138,568 - - - 1,138,568 Planning and development services 3,106,143 - 140,288 3,246,431 Information technology 4,112,987 - - - 4,112,987 Fiscal services 3„314,990 - - 253,,367 3.568,357' General government 4,853,358, . ,... '1,062,753 5,916,11'0 Contributions 1,187,500 . ., 2,424,260, 3,611,,760 Other 217,114 . - 4,943, 222,057 Capital outlay 129,896 5,310,016 4,214,597' 9,654,509 Debt service Principal'retirement - 9,110,000 .- - 9,1'10,000 Interest payments, - 4,220,656 - - 4,220,656 Debt Issuance costs - 7,862 - - 7,862 Intergovemmental - 161289, 151,289 Total expenditures 68,827,168 13,.338,518 5,461,305 9,582,991 97,209,982 Excess(deficiency)of revenues, over(under)expenditures (10,448,994) (663,181) (5,070,079) 2,923,162 (13,265,090) Other financing sources(uses) Salle of capital assets 8,974,205 , - - 8,974,205 Transfers In 115,094,866 262,795, 1,7039.457 10,765„812 27,852,930 Transfers out ('01,4411,262) (550,974) (2,823.486) 014,815,722) Total other financing sources(uses) 12,627.809 262,795 '11 88,483 7,932,326 22,011,413 Net change in fund balance 2,178.8'15 (400,366) (3,88.7,596) 10,855„48.8 8„746,3211 Fund balances,October 1 20,244,2419 3,2'14,434 23,569,205 42',825,820 89,853,708 Fund balances,September 30 $ 22.423,064 i$ 2,814,048 $ 19,6.8'0,609 $ 53,681,308 $ 98,600,029 the notes to the financial statements are an InVe,grah part of this statement. 3.5 CiTY OF COLLEGE S'TA'TNONi,TEXAS Reconciliation of the Statement of II rrounu1.,Erxpram:luuirrra;•,, aenxl Changes In Fund Balances of Cevrennrrental Feeds to the Statement of Aathv'h11es For the Fiscal Vernal Ended September 30,20'16 Net nhanrge in fund balance. total itovurrenaeetal h.anrts i 66,746,321' Amounts reported taaar ynvernrnr:nlral Tact/vibes in tier stateareeatt of activities differ as as result of ddie'follk'swin°rti; Governrnentoll funds report capital outlays as expenditures. i le:misi r,in Itre rlrrvetraTient white statement re'activities the EOM of those assets airs,rrallor:;r ief.1 evor Nfuu=ir t:rsrfhrnrallerri useful lives as deprectatioan raxpensr.. This a;the amount of capitol:assets meordert in the ctrn"ra n1 petted. tin Vornmerttat lends do tech recogonizrt the total amount,of revers de recortrrizert hint II (l,vernueel it wide statement of uclivillirrt,related d to the sniaa rat iodevs,lr;ninmrl home properties 17,210 Tito effect of vaarinur,rirriseellartrainns transactions Overlying capital,a.;sn.ts Qe,g.,sales,trade errs, arid capital conlrilef irenn)is to Irrcrcrase/rtecrease net assets, 701,9tle Scvne property lax and loan revenues will not be collected for several months after lthe Pre City's fiscal yeah end. -These are net caonrself:Ted"available'rr:ayslt9.ras In lite governmental funds reedit received, 084„112 Amortization of ir'rteresa as the result of debt retie:dings Is reported in the government-were slatesnont of activities but does not requite the use or current firianoiai resources, Tlenrelore,amortized Interest expense Is not reported as an expenditure In governmental funds, 493,973 Depreciation expense on capital assets Is reported in the government-wide statement of activities but does not require the use of current financial resources. Therefore,depreciation expense is not reported as an expenditure in governmental funds, (1:3,467,977) The issuance of long-term debt(i.e.,bonds,certificates of obligation)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 position, Also,governmental funds report the effect of Issuance costs,premiums,discounts„and similar items when debt is first issued,whereas the amounts are deferred and amorilized In the statement of activities. This amount Is the net effect of these differences In the treatment of tong-term debt and related items. Bond principal retirement 9,1 10,000 Long-term estimated liabilities are recognized as expenses irr the Statement of Activities as incurred„ hut are recognized when current financial resources are used In the governrrnent funds, Compensated absences $ (210 439) Net pension obligation 666,782 Other post retirement benefits (763,653) (308,510) internal service funds are used by management to charge the costs of certain activities,such as Insurance,fleet maintenance,and equipment replacement to individual funds. The net revenue of the internal service funds is reported with governmental activities net of the amount allocated to business-type activities. Ctearnge In net position 1,221,699 Net amount allocated to business activities (208,990) 1,0112,709 Change in net position of guvernnnental activities $ 16.944,457. 'The motes to the financial statements are an integral part of this statement I',V'i"rf 7X1,Ca7!L1.C7rF1'11YATFF71,1,'1P Xi.', t11,0111ra1n1 tJ'1 I',I,A Mrw,;NI,. ^ilaarKrl uLbur 611,"eel P, L,i,utirr„I la 111001 lld ........................"................. ___wwwwww.ww LIIIJ,r,rr,,,Iy3,gnMe'Irdl6ca•L,Nuwlla I,,,F q.nndn 71A91'e,F8e6, 14F1e7 aiarlaapan+,n FFrFrl F'm,FFIFVrisFF a rlarn4'no011,,Furr,w IElr'rglir, YWu1,6r 168616urv^wklua F 118,14 rand. Fund, 7F F,H14, L'w,FF'IF 66616,, Ira^a11!r+ad a:cal Vi,,,l'neI"'F'Fy, 6 '0 11,1d.0,01411 5, 3,7111„342 2 5,11 T21'8F1' 'H I',7112,:14N n 2'G„Fd'fi'1CI1141 $. 160,6,,1'6:IP1`., 8168e60r+466 F.FFIF0,401 373,,5:411 "+113,3FF2 176,11.'U0 ''1,Y474 66141 1,6FHF,FFFFF 4.16,6 la auall 1,1511 ur:l4,Iw.,Vuv11"a 4,1147,168 ,1,I'4211,F,F11'1 16,2666.,F8J1 18,Y7':J",1r11FM 1666 46666,66 Y, 4112,011fI 314Fd,51VD F,0'1113,111112 - 'I;8105,FF,HFF • 404060d66,)IILV,1Ud,rFFH fin ldinrv,1Nlar,lulrlw 14,042,214 :2,8116,3,11 1,0412',7f6 I,,LF3,1 75 111,a1,i7,444 72,777 1,wraaa111'I'IF,I'la0 0r104051 aa:e W,INMF411'; I,7511 5117 1„24111 FIX 3,736 1,826 1848,004166 '4,'I7`.',FV:IJ ;3G5,G2:1 '7A,'4d2 77,I6111 I.56614F1 164+1046 11,16r161,4 611,616, F',61611 111 Gi I 1 I1 G,1.:Fa 75„1701 1a°d ^II,1P111,732 Pv,1dXl a.11Fllurfi al 119ar�uv M 1,0d3 F1 1 6 11 1 7 1 4711 191 11 r UF,N1,L'lll I'x,l1N VI'I naal% l,FF,lyla,lull rl V,-nl,Hrel, 1,I,576,80,8 F11,R'o/2,11611 • Lr,,raau WC a;4aUI1,F,, L1,01;0,1:1011 1,4„11F10,600 F"Ia646 86,I„61L 1.411,y 04816 062,487,16d 17F6,7111,471 137,V3'717,."r 117 217,0174,11,FI • 4.111a111F'44, - - 5,737,870 5,7137,1110 711,65216 P,Mrl'olrnury awl',6601,81111,681 ;14'1,11Y1,A 724775 11::3,HUFF 6,25,2,016 7,635,614.2, 7.1 FFF!F,f^fktl Lelia,FIF,,,11111 Iladad rlallr,it'Alla,t. 067,UF0;:7511,) 120,47F0,2013 15:3,71771,57'13 14,737,045 12F1:1 4171 r1Iyp P 14 d11➢2,1`i21 I:s,4r0!I30,596170 FFe 1,1e,01r,v,n^I 2,457,FG,1 F.24FF74:3 'F.FFF5,4 7::1 1111,F41771 '11,77F740411 LHH,F .. 1171F1,7011 4045742 • Tr41UI 66F801 a ,,e9;t 44➢k'1„J-:1,511.,... -..I 2Fi,Al,•1,HFP1 GF..W. ....,...... 74 ,,...,4� d,Iddll'Y 432 ...... 5,I'B61„3I1Y .,.,111G,7G.!C,,,..,. 44541575 'I!nwal 4.,I1F,rent ansLdc ...1GG 73519k7G 1"1"_w,1' 2 ..,,?, _.....m05.ll,1674 4 4,117 1�911,17+111''161'i i,SrG2,4FF17 ,1,•1fL 1Ne4,F1U, , �fiG ... ..r'G' .. ..........:°..mow,...... �..... ......., 1NFFF 4iP6 47111'G24Y 12:1,3d4°,,r!1;54 :41,44FI Twltl,ul ab�5,!aw;la. 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LF,01,8l,661 46116uwr,art 18'FIIFIFIII", 1e476u,Fd 0m8 go on pen Jlufl; 0117,111F1 272,4;15 2114,541 251,122 I,485,211 24F1,500 63644r1,,d cllariea a1o,raluruddnll ...._ '5F09,01114 4711d,a114 14111,2F42, 44,712 1 lF1F,FeG 10441 d40004,1 lI,IIIF,,wr,lrtl rarGblwYcaos ..,..mm.....17.LYPuGS .........m,.,.,.,.,.7A,B,,GG'G 432.6910 FFFI%,032 ..._.�....2,8/'7,76£ .................,24G,:'',414d II.Ia,Ml6llirab C lr,rrr,'rvl ItlaI41166e rs, 46F661141U 11fayae6lF 11,444,500 1,1144,F12,6 7;2F12G,2 FFFP,FFFFFF F2,6561,441.1 1„UIF6,UUU 4rarUnd 1F0,16111,6x6 :3142,564 435,1116 d1F136ll 1261,E Y2 F:5,7,733 7FF,270 1.18,earn d raVefnua5•IIFI1i4' ., 21,677 2'1,644 a„e1104,07001441 aFFFIFFun, 25,13E F,Gllylp 12„677 G,74:'. 60,744 I1,IF62 1661,E FFF le,pncrywa600 21,2,024 124,07g 38,477 41,242 ,394,32 I 4,1122 C lalal&playable - . 1,97,1,642 P,lby;nlIFwl i606,66.6F6161FJ6„HUFloIs 14HI6FFI6 108.4O1 F nylvF,FF 290,166 240,017 21L111 1FF,I 24,11110 1IF2,609 F30O6dUhleidv;poo4M 2,845,6'42 317,304 20 111k1 4,260 3,1016,11'S 4"6111161,,F1rF III ufaligdalmt, 2,114,025 1,542„625 6154460 ;6110,6601 4,3112,011,3 C+1enaaaFobli,g861'in1646n46 1.623,632 2,1104,450 2',178,F06 477,174 6,516,761 P10UIII1IIF Na0Rlu714 111.15F4 4111,1N101 295,714 112.5,41G4 14181 CUMIN11aLa101idl$ 164252 MO 5,32711702 2,686,06 U 1,1168,51401 "..,.". 20,712,0F113,166 dig1, fd':a'FII,II'IIF BliBbil1F18n I'1ea1447,F,'I of 47F407,I01,11 42,4324131 1V.F,G1rg,767 211,068,515 3,516,800 6174141,.143 • F3nnr'r0,1 m61rg416+8 62,411a!6 14„362,564 15,507,71541 IF,'71111 FF141 1,004,522 42,6117,743 - F4elwm4xla,4aul,dl 1,644,071 71154,5F11 :3,5411 426 1,2,576,000 Coati p46l4441891 l,1'1:6a111111,, 1107„118 100,7111 16Z 33,1 116,044 663,2'74 1176,200 F6461,461G66r8e14 F60891110 'F 1132,/112 3IIF,1411F1 1FF4,4'117, 324,021 2,304,747 4 Y12,711 171411 prdrlvl✓,WF 015114e1100 2„32/,424 412,535 ..,.11157,11134 6d r2.007 .W..�, '4,FFH6,2311 12'6,772 16181 PUH6u„re,41114,6161ea .,. 'I67,14,2.170 C1,1113,728 ;141,17/6,I p15 6,1140,214 150,282,307 .9,345,683, 1'n16111104F11160 ".,.......F'I422!,GUwi dE,1�502,444, 4,2„04:,FF14 7,1:45,75P2 IFU,104,201 4,502$04 13efF'rbe•41 FHF4,,66 nl re FFIallafal', LFH4111va4N r111F145 Oil 7,FIVwlmne 'G'G„74'I4 36;667'4 37,077 114;7114 2111,571 31,115 T4'144 404007 aF riaf504EFUdFU �,. 0'14,114 ..�.�.mm 3211391 ,.,.,1.,7'67( 35,7115 1F11421 31,,116 1441 ple9ro'lllpll 111,1 Valwer..Lln1nl in 6,10741,,e'.'ul:, 704,445,2711 82,266,2218 41,124 441 5,172:G8:2 2 POD,452,549 2.547,374 17�MOM'1114 fur Fir,FF:laIrb ln."rr 435,6133 565,809 6',61J,644 1,6111,1.86 Ltl4l664Yrll:lll F1 14,,_...7,22.. _......,...,./3,4 " .,... r ,..7. IT4F57a,2 y,"xi 6,P13"�G,i'tl P6;+i,a�'/3r1 wS,2;H3,'k'P,51d 1:B,7MX P.i'GG 1',`Raan,alBA, 1401,341 001 F514115F40 9 615,451,545 I5' F14,F76426 5 6F6,956,3241 C, 7''1,045,:427 245,'k13C41'174 �B P'7 ifl714141, 4a11661n lerlI Lu 0e1166,118e 61llF666,lgllF1,l 01,0144 uw,l+,r"FIbFUF l,atl,d„616,4l,F4 YWIIIn68,114)111,FC1606uu Ftl6.1:5 3.694,411, 1,6,1 UllwndI,''ll ud'Ix,ak,P11l,l,,,4y6,6,861,{0Fiarrl 6 24Y'1,01:11„11m4, 6F6,1Xc,Flbn 1Y1 w1b11 III,'l864,61'00347441,0 F,FIW,an rrI"e^,Fall Gala 01144 44 2,11,ll,I F 37 CITY 017(1011..0170E STATION,'11"EXAS 6 6614:1167,14 of R1,/q11,40$,Ex prim et,alto Etraviar,ierlol(-.0,40,, ttroprietaryl1t,Inct, ,f-cp,r the IF or, I Yffir Ended September 110,20'15 Governmental Ilitstnessfrype A cliviiies-Enterprise Funris, Activflies. Otner Ertl:ohms,f Total:Enterprise, Internal Service E1erflor: 'Water 'Of nslefartge :Funds lir,unds Fends In')frnitrevenue Irttergov:entroenlaf I lc 6,590 lrO 6,500 6 raircilos lor Lei\Hoe.; 9B,763,29 a 1 4,'I,S 5,870 1-1„647,098 '9,1139065 13?„335„3175 9,265,178 Fil)e ,11U1'1(111S,ond poi II-4 229,457 '22;q,,,15? - Pe:m.116ms 10,460,350 , , - e1)17 end royattiati '3,563 gat 4,259 Olner 2,11417',427 526,136 13611,,I06 132,a33 3,5;41,702 316,132 ..... 50411 LipFluiling 4-mranii,h,s, 101,1 liI,2 ii,', l',-,GU,(12 14,91.5,404 h 0.'105,655 14 1,619254 21),4 ,66(.1 Opnreling expenses Electric operations '70,909,104 - 70,909,104, . Selarles and Istanefits 2,143,007 2115,413 2,45,6,690 7,153,170 15164471177 672,274 942,673 421„810 '1,035,957 '955,266 „. Maintenance ,761,076 102,590 664,294 935,259 15,579 „. Rlfrha60(1 professional nof r.,.0.',i,i. 469,2127 279,752' f.15,1,(ii4(ii 1,693.725 189,566 , ,P1,1f0tvas ell properly services fl,747,035 '4,405,112 '1.504.iII:V 3.1157,,327 49,4',,'',5 Other perrthased servtces 369,541 573,575 k,,379,570 2,273„076: e90,940 Clairns - 7,6106,221 - ., A dorntstratfon lee 2,123,209 - . , . . Cent rinatoons. „ - 40,729 :40,729 2,2'67,479, . Premiums - - 1,701,237 - , . De,procialion 6,,046.,048. 5,339,673 5,998,103 '4,111,915 17,544,839 2,117,.042 Other 467,945 209,521 59,969 23,126 760,,561 367„935 Total operating expertsu,s 77,463,097 10,469,753 16.560.787 5,501,140 107,014,747 21,012 223 Opera trng income(to,s.st 23,651,144 4,5,12,9,59 4.334,617 1,,605,745 34,134,507 1558,563) Nonoperarung revenues.(expenses) !Investment Income (1,155 40„226 69,042 6,899 157,322 96„325 Gain(loss)on C6SpO$R1 o 1 assets 06,516) (157,383) (1312,630) (1,516,529) 45,451 , EarnIngs in Jornt foenture 662.422 662,822 Inleres1 expense 12,496,0091 0,9461601 (1„615,489) (651 57) (6,124,8,15) . Other,net 331,566 (493,179) (65,082) (.41 34.0821 (3(110,477) 'I,366,623 Total nonoperalIng revenues(oxponses) :(2,109,504) (2,588,496) (2,924,1596 470,482' (7,151,677) 1,505,399 !Income:before icapilal contributions and Vendors 21,541,652 1,954,463, 1,410,458, 2,076„6727 26,952,8,39 919,536 Ctspillal contributions,ancii transfers Capital contri0ruttens, 4,006,336 2,044,029 2,007,222 1,495„226 9,596,813 104,983, Transfers in 735,495 1,196 773 216,401 (458,865 266„000 Transfers out 0,402,305) (2,814,769) 12.556,1131 :11,222,886) 0 3,996,0(3), (69,120) Total capital:coranbultans and'ransrers (2,657,474) i7_25,544,6 (545,118) 490,741 43,440,3951, 301.463 Chacige Irt rust pctsitton 16,881,268 1,228,919 862.,340 2,566,068 23,542,435 '1 22 1„699 Beginning net posllion 51,091,592 88.025,9155 65,587,428 20,013,911 26,250,795 Prtor perood aejoslrnent 11,017,2556 1391,258) (293,372) (755,5421 (2,457„427) 11345,3576 E ndii nig net p,esttion $ 66,958,545 'i 88,866,626 $ 6 yr,,1,56,,39.6 6, 21,855,337 $ 27„157,6617 Adpstmeni In reflect llhe censeligallon:of internal servhca:fund aCtoViPies retated In enterprise funds ,208,990 5.114a17ge in not positron of Posints,s-type 476+4664 $ ,21,293,995 The notes to the firtainCral stalerneolt are an integral,p,arl.al Mrs,staterner* 36 Ci'l Y 01'Ct..11.1,8„130.3,l'At'101,,J,'1 li„,)C,A5 0D.1101,0)).CAT Cl Flaws Pictutelar y Fiinit. )--rir tie Forical Yeor F motif 8.a0l0itlier 30,;10'16 CoPICrI/P111).1110 „„„„„„.P.Y1!21.:,'..LRIPE„?.'2FAYILY,:klErIPri Funds A C livi lieS Otlier 'Total Into nal 8 i ilerpris e Enterprise 5 eivitie -.........trE;,.._„ Water Wastevialer Pundit; Funds Fonds Cmth flown fibril operating acrivIlios: Cash lecelve 0 turn OAS)011M)17. S R.14)„05,;(,:mf, $ 1.4,283,24.8 5 14,685,h65 $ 9,707,(332 5'1.38,734,530 $ 20,399,324 Cash payment to stiphiliin;in,c.JOYAIL and WINMCI.i., {72,N:10.199) 1,2,047,576) (3,911.5„142) (6,044,4 itti (8,h,066,630) (1 6,2;i11,(1.1,7) C:,D514 11,,nlpfl WI t.r,'IA)employee!,foi set V(CeS (4,1'..10,,7I0) (1,4.0,181) (1,792.1)50) CI,785,5287 (1.101.10,41)4) ( 907„01,147 Ciistiirwiir depomit,1043l,N)If 61171114)) 10142) 02,5:31) 6,684 (04,6891 Ce513 paid for miscellaneous seivties (4 Wt.I 73) (414,062) 914051 1700,012) (23:11.4) 1 it I:abie d for/ol,rx:01:owo,n7 i g verities. 321,805 11259 34,1,1 3r; .1,:.'09a7 Nr.1.1SVil)S11X0f 140'S.15F.,(1)by°per 41.1ht m.r.tivi lie s 333 21102410 ' 02,279 _8,848:97:2. „.„„.....,,I 7t1'.3:5,21,. .. .„9,0..5..911. ,..1,0;?,.,31.0,.. Cash flow!,Imiii ry.„ncapitni tionni,100 cictivIllein, 'Iransltr0 in from°thin fartt, 738,49.5 1,196 773 216,410 008,,11e. 206,000 f Yncislet;out lo odiei lunit, „( 102,30„0,l t2,6 1:41,70t9 f,2,.555,11 3) ('t,722,086) 11.1996,073.) _789.12(I NIA 4.3S h provided fused)by 1,101)(:44,041,11 fi)or,c,*)uoviliR)S (43.6o33,8111) (2,613,673) 12,505„3.4 0) 1004,468) _J1)3I:237.204) I716„680„ rash ilorivs turn capital arid related tiriancilig a.ctivillyis• AvcikiiiiRion.soil construction of nitidal assets (1(„4 70,159). 1'.7„3.62,2114) 0,150.010) (1,220,85'1) (271,2 1.2„233), (.3,702/139) Capital vents and C:C,f,lritm flow', i1.000,330 41)88,020 2..1.107„272 1,„195,226 0,505,013 104,983 Proceed's.tnin t„ale(8.1154e10 „ 45,451 „„ Principal;pald or,VO rtiftr;ales of obligation and genera.obligation bends (3.030,057). (3655,520) (2,145,6711 (40,936) (11,1611.44) Interest pare on cedllicakes of otitg Mien and gone ral obkgation tronds Rol:37,706j 11,692,402) (1,.566,5114) _..sp9 7)).9437',(1157) Net cash pi ovid cid(used)by capitit and related?financing 19011011(.5 ........1129401043,E,9 _(7(052,1122) L,876,26:2„) (105,1:74) (31(„755.,614) 0.,052,00,3) Cash tows torn Investing actiolleer Purchase of investments (4,473,8(12), (1,628,840) (3197,415) (347,320) (0„945,276) (1830,893) Proceeds Ir MI sale and maw(dies of Investment,securlties 4.814,834 2„212,533 3,062,384 335,0.03 10,6,24,88.4 4 3.56,06 fl Investment tncorn e 66 30„629 67,794 8,7(i 1 103.68(3 94,797 NM cash provided(used)hy inve.st Ing ac1A,,tre5 210,544 "7e,„422 .532,753 {9,535) 1,481104 (321,372 Net Increase(decrease)in cash and cash equivalent; 3,996,931 (3,507,069) (5(,854) 638,310 605,408 609,187 Cash and cash equivalenls.,Ocl.1 16.580,092 1 1„270,620 16,129,711 1,244 ANI7 47 223,650 18.776,168 Cash and oath equivalents,Sept 30 $ 22,577,023 $ 7',662,851 5, 15,076,847 $ 1,782,347 $ 481 19.066 ,„. '10,6.76,355 Raton ciliaten.of operaking Iinc.orno tenet cash Provided by ape raling actIvilles: Operating income $ 23651,186 $ 4„542,050 5 4,334,617 5 1,505,745 5 34,134.507 (3 45011.563) Adjustment to reco rock operating income to net cash provided(used)by eperatAng.activtes: Depreciation,bad debt experis el,inventory loss 0,0186,046. 5.339,573 5,0.08,103. 1,111,015 17,514,830 7,1 1 7,042 IMIsteflaneous rionobereting revenues 321,865 12,289 344;135 1 389,737 „ Miscellaneous noinonera1ing expen.ses (493,179) (65,0612) (148,351) (70(,012) (23,1114) Changes In deferred inlrowis and outflows (507,825) (283,624) 1226.8(14) (193,680) (1..252,0020 (211,446 C.har(4es on.80000 and liabilities, Change In a ecou ril s receivable (1,050,888) (726,96G) (229939) (257,300) (2,272,753) (20,338) Change In inventory (35'9.903) (43,555) 6,670 (21,378) (418,166) (78,8929 „ Change in prepaid costs {2,609) Change 14,accounts payable (5,685,890) 556,015 (324;242) 044,292) 75,600.811137 4144,247 Change ie refundable deposits (80,042) (22,5.21) 6,684 (84,88.0) .. . Calla rige in retaingege 04611014 4,822 „ Change in claims payable - - - ,..122,4 Oti „ Change in accrued liabliilies 58.639 1 7,534 10,604, 20,399 1 03,472 3,921 Change In d ele fired revenue - ., (141.0(33) {141.,86.3) . „ Change In accrued vac.aton 47,219 11,537 7,07'2 12„028 112,6.56 18,948 Change In OPER 201,437 104,074 72,201 59,88$ 437,6.93 24,743 Change in nel pension otAgation 656,447 206;252 2.42,149 (172,703) 1.02:3,045 1711,833 711101 adiustment (360,9011. 4609,320 4,514,956. 137,759 1.1..000,538 4,221,593 Net cash provided rosed,f by°poi aging adivilito. $ 23,290,286 $ 9„352,279 .$ 0,846,9713 $ 1,743,504 5 43.235,045 $ 3.832.940 The,re were rio,material norocash investing,capital,and financing activities for the year ended Septemt:,er 30,,2015, The note5 to khe financial'sl aterne 61.s are an Integral pall at ihii sta lernei it 39 hlu�Ql�i ��liVl„ m u I�` ,I� i�1`�,1�,��P hNll�� um II IVIIII IIIIII Illll IIIII ))����pp IVV ''IIII hhl ngcjiicif������11 1ll4i, hmg1i9uIY�U��� Y�IOI�IWI ^I'�II14III IIIIIIIIVI'1 J �li°IIlt'� III+';'�����������II I^ulll�l f u $N0 � CITY (.)F C01,1 TJ.TrIO1 Houle r ,xas is rsr"t ` :o the Fin n a Sta foments „.... L.Qtritattiztaciat„,'„Yszat„„„„Et,'Ldnt'AL„a,'' tlptt,'„aty,„;„„„„ hilLt„,,L.L„,.„,, ,,,„ I_Stenry of Significant Accounting Policies A,. Financial Reporting Entity The City of College Station, Texas ("CRY"), the financial reporting entity presented in these financial statements, was incorporated in 1938 as a municipal corporation incorporated under the provisions of LLB. 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, habitants. The accounting and reporting policies of the City relating to the funds included in the accompanying basic, financial statements conform to accounting principles generally accepted in the United States of America(GAAP) applicable to state and local governments. Generally accepted accounting principles for local governirients include those principles prescribed by the Governmental Accounting Standards Board (GASB), the ,Arnerican Institute of Certified Public Accountants in the public:alien entitled State_andj_poet Governrnents-Audit and. 8cc9untirio G.,initte and by the Financial Accounting Standards Board (when applicable), The City's basic financial statements include the accounts of all City operations. The criteria for including organizations as component units within the City's reporting entity, as set forth in Section 2100 of GASB's Codification of Governmental Acconntingand Financial Rcji:Jorting Standards„ include whether: • The organization is legally separate(can sue and be sued in their own name) • The City holds the corporate powers of the organization O The City appoints a voting majority of the organization's board • The City is able to impose its will on the organization • The organization has the potential to impose a financial benefit/burden on the City • There is a fiscal dependency by the organization on the City. Based on the aforementioned criteria, the City has no component units. B. Government-Wide and Fund Financial Statements The government-wide financial statements (e.g., the statement of net position and the statement of activities) report information on alt of the 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 is 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 programs 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 Measurement focus refers to the type of information a given fund presents; basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurement made, regardless of the measurement,focuses applied. The government-wide financial statements and fund financial statements for proprietary funds are reported using the economic resources measurement focus and the accrual basis of accounting. The economic resources measurement focus means all assets and liabilities(whether current or noncurrent)are included on the statement 40 City of College Station, Texas Notes to t hc• aiicial S ta tem e ntS El1Lain,Q,Lialasil.„*LihkcialcalLaiiiilltd„.„ 2e2JLl„1„1..„„„„„„„„„, of net position and the operatifig statements present increases (revenues) and decrtases (experiset:3) in iotal net position. 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 requirenrients have been met. Governmental 'fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized as soon as they are both measurable arid available. "1 '11easoable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used 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, clairns, 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 measui'eable and available only wrren the City receives, cash, The City reports the following major governmental funds: The General Fund is the City's primary operating fund* lit 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 that are restricted, committed, or assigned to expenditure for the payment of principal and interest on long-term debt paid primarily from taxes levied by the City. Financial resources that are being accumulated from principal and interest in future years are also reported in the Debt Service Fund. The Streets Projects Fund accounts for the costs of new street construction,street improvements,and traffic signalization made with funds provided primarily 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 services. 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 operation and maintenance, new construction, and financing and related debt services. Ming and collection services are accounted for as an internal service fund. The Wastewater Fund accounts for the activities necessary to provide wastewater services to the residents of the City.These activities include administrative services,wastewater system operation and maintenance, new construction, and financing and related debt services. Billing and collection services are accounted for as an internal service fund. 4 1 City of College Station, Texas Notes to the Financ:tai Staternertis Lcr iliSLAAattlitisildatatiatabilt.„„29,.2.0.Ein___ Addonally, the City reports the billowing fund types: internal Service Funds account for activities related to administration of health insurance provided to City employees; the City's risk management activities, including general liability, unemployment 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 collections; 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 riot budgeted in other funds, In general, the effect of internal fund activity has been eliminated frorn II ie government-wide financial statements. Exceptioris to this rule are paym ents-indieu of axes,indirect costs and franchise fees,and other charges between the, City's Electric, Water, and Wastewater Funds bennuse elimination of these charge 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 rfleeting 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 operation 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 operation revenues of the City's enterprise funds are charges for customer services including electric,water,wastewater, and sanitation fees;while internal service funds revenues are for equipment purchase amounts and risk management charges. Operating expenses for enterprise fund and internal services 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 restricted resources first, and then unrestricted resources as they are needed. Assets, Liabilities,and Net Position 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, investments pools, money market mutual funds, certificates of deposit 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. The City uses a pooling method to account for cash and cash equivalents. Equity in cash and cash equivalents, and interest income from pooled cash are 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 2014 for the fiscal year ending September 30, 2015,,This policy is applicable to all city funds and permits investment in obligations of U.S. Government or its agencies, repurchase agreements, commercial paper, certificates of deposit, public funds investment pools, and money market mutual funds. This policy states that the Assistant City Manager shall designate the City's Investment Officer with whom responsibility and authority for investment transactions reside. City of College Station, Texas Notes o theFi rn1 a hcia El Eol - „,n„ita. acalm,Y1 Li,gt. silf„s The investments purchased under the provisions,of the Investmeht Policy are mat'aged 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 with a maturity of more 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 portliolios rate of return: The investment program seeks to augment rates of return above this level. In a diversified portfolio, measured losses are inevitable and ioust be considered within the context of the overall portfolio. The objective of investment in construction funds shoi,„ild at least 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 differences in relative yield between different types of securities and varying maturities. "Swaps" analysis is the responsibility of the City's Investment Officer and the decision to execute the "swap" rests with this, designated Officer. To protect the portfolio from imprudent trading, no security may be sold until such tine 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 versus payment and held in the City's name in a safekeeping account at The Bank of New York. Investments of all funds may consist of Agency securities, money market mutual funds, certificates of deposit and investments in 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. In 2011, the City adopted GASB No.59, Financial Instruments Omnibus. See Note IV-A regarding ,2a7- like 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. inventories, Assets Held for Resale and Prepaid Costs Inventories are accounted for using the consumption method and are valued at year-end based on cost, with costs determined using an average cost method. Assets held for resale are Cemetery plots which are in the governmental funds. City ordinance stipulates the percentage of cemetery plot sales to be allocated to the operational fund,These assets held for resale are in the non-major governmental Cemetery funds and are reported as inventory in the financial statements and accounted for using the purchases method. Payments made to vendors for services that will benefit periods beyond September 30_2015, are recorded as prepaid costs with a reserve for prepaid items recognized in the governmental funds in the fund level'financial statements to indicate that a portion of fund balance is not available for other subsequent expenditures„ 4:1 City of College Station, Texas NoteS to the trdal 3:1:aternents, -,) It111.11ALLA,,„.411,,,,,,,La„„„„.„„„„„„„„„_.,,„ Inter fund Transaction 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 governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances," Transactions between f-urrds the City allocates an indirect cost percentage of administrative services paid through the General Fund along with other indirect costs deemed necessary for the operation of the proprietary funds, internal service hinds and the other governmental funds,. Restricted Assets In the Enterprise Funds, proceeds of utility revenue bonds and certificates of obligations, as welt as resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is lirnited 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, JnvPstillPfltki -19ifILVinture, 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. Capital Assets. Capital assets include property, plant, equipment, and infrastructure assets(e,g., roads, bridges, sidewalks,and similar items) and 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 assets 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 ASC 980 Regulated Operations, interest is not capitalized during construction of capital assets of business-type activities because interest is recovered currently in the City's established rate structure. 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 City of College Station, Texas. Notes, to t h F it taiiat ,E.;tat e tin e tits 4 ' 9 rnEUIA61.Lac,g11„„1„„„(401„„„„„LIKIVAL4cacaliddetALIALLALm„.„,, f.',;eninepeia ted Absences. Employees are credited with vacation at rates of '10 to 20 days per year, depending woe' 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 riot pay employees .for unused accionulated sick leave, no related liability has been recorded in the financial statements. Changes in cornpensated absences.for the year ending September 30, 20 5 were as killows; Amount Die Amount DU e E3eglrining Total E.rding Within One Greater than Ballance Earned Fatri 0algince Year One Year Governmental $2.,822,263 $377,576 ($213,645) $2,986,194 $225,927 $.2,760,267 Business-hype 637,362 16.0,904 (48,248) 750,016 56,744 693,274 'total $3,459,625 $538,480 ($261,893) $3,,736,212 $282„671 $3,453,54'1 Internal service funds predominantly serve the governmental funds. All internal service funds are included as part of the above totals for governmental activities. All of the Utility Customer Service Fund and a portion of the remaining internal service funds are included in the Business-type Activities on the Statement of Net Position. For the governmental activities, accrued vacation is generally liquidated by the general fund. 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 tong-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund statement of net position. 'Zond premiums and discounts are deferred and amortized over the life of the bonds using the straight-tine method. Bonds payable are reported net of the applicable bond premium or discount and deferred amounts on refunding. Bond issuance costs, with the exception of bond insurance, are expensed in the period incurred. 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. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the Fiduciary Net Position of the Texas Municipal Retirement System (TMRS) and additions to/deductions from TMRS's Fiduciary Net Position have been determined on the same basis as they are reported by TMRS. For this purpose, plan contributions are recognized in the period that compensation is reported for the employee, which is when contributions are legally due. Benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Fund Equity In the fund financial statements, governmental funds report fund balance classifications that comprise a hierarchy based primarily on the specific purposes for which amounts in those funds can be spent. In the fiscal year ended September 30, 2009, the City adopted the Governmental Accounting Standards Board Statement (GASBS)number 54; "Fund Balance Reporting and Governmental Fund Type Definitions." GASII.iS 54 provides for and the City uses the following classifications: 41.5 City of College Station, Texas Notes to the l';'inanciat Statements Nonspenciabie Fund Balance includes amounts that cannot be spent because they are not in spendable form,. The"not in spendable form'criterion includes items that are not expected to be converted to cash, for example, inventories and prepaid amounts. It also includes the long-term amount of loans receivable as well as property acquired for resale. Restricted Fund Balance is reported when constraints placed on the use of resources are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or(b) imposed by law through constitutional provisions or enabling legislation, Cornurilled Fund,Balance includes amounts that can only be used for specific purposes pursuant to limitations imposed by the government's highest level of decision-making authority. The City Council is the highest level of decision making authority for the government that can, by approval of a resolution prior to the end of the fiscal year, commit 'fund balance. Once adopted,. the limitation imposed by the resolution remains in place until El similar action is taken (the approval of another resolution) to remove or revise the limitation. Assigned Fund Balance includes amounts that are constrained by the government's intent to be used for specific purposes, but are neither restricted nor committed„ The governing body, the City Council, has authorized the Assistant City Manager, through the budget ordinance, to assign fund balance. Assignments, unlike, commitments are not permanent arid a formal action is not required for the removal of an assignment, Finally, assignments may not result in a deficit in Unassigned Fund Balance in the General Fund. Unassigned Fund Balance is the residual classification for the General Fund. This classification represents fund balance that has not been assigned to other funds nor been restricted, committed, or assigned to specific purposes within the General Fund. In other governmental funds, if expenditures incurred for specific purposes exceeded the amounts restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance. When fund balances are available for use and the usage requirements met, the City reduces the committed amounts first, followed by the assigned amounts and then the unassigned amount lastly. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, and then unrestricted resources as they are needed. E. Budgetary Control The City follows these procedures in establishing budgetary data 1. Prior to September 1, City Manager submits to City Council a proposed operating budget for the upcoming fiscal year beginning October 'I. The operating budget includes proposed expenditures and the means for financing them. 2. All budget requests are compiled by the Office of Budget & Financial Reporting 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 $50,000. All other transfers must be approved by City Council. Departments 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 without Council approval. 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 of College Station, Texas Notes to the Financial Statements y - 11.1 - ) ,LOLLLIfk,f1„„„,,Aif lf,41, City Council holds a piiblic hearing on tlu supplemental appropriation. (e) The City Councii approves 011e supplemental appropriation,. Management may not amend the budget without seeking the approval of the City Council. Basis of Accounting The City prepares its annual budget on a basis (budget basis) which differs from a GAAP basis. The budget and all transactions are presented in, accordance with the City's method (budget basis) in the Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund to provide a meaningful comparison of actual results with the budget. The differences between budget and GAAP basis in the General Fund are that reimbursements and transfers of indirect costs are shown as Reimbursed Administration and interfund loan transactions are treated as transfers for budget basis, Consistent with the purchases method„ assets held for resale are treated as expenditures for budget purposes. Minimum Fund li,,i"alaticielOperating Reserve Policies The unobligated(unassigned)fund balance in the General Fund should be at least 15%of the annual budgeted General Fund expenditures, This percentage is the equivalent of 55 days expenditure. An additional amour it of 3.0% should be maintained for extraordinary items or contingencies,. Cash and investments alone should be equivalent to 30 days operating expenditures. The working capital (current assets less current liabilities) in the enterprise funds should be maintained at '15% of total operating expenses or the equivalent of 55 days., Cash and investments alone should be equivalent to 30 days of operations. Ill. Stewardship, Compliance, and Accountability A. Budgetary Information The Council approved two budget amendments during fiscal year 2015. These two budget amendments included the following appropriations: Encumbrance Roil $3,008,450 City Gateway project 150,000 TAIMU Game Day Traffic Control Rental/Purchase 295,000 Prainage Boom Mower 66,000 PD&Administrative Office Space 41,0.00. MDT Replacement 99,553 Fire Department Hazardous Materials Vehicle 691,000 Annual Imagery Updates 116,000 Well Field Fence and Gate Improvements 69,200 Electric Substation Transformer 1,150,000 Property& Casualty Fund Defense Costs 1,367,463 Mobile Computing Infrastructure 96,500 Debt Service Fund debt service 100,000 Fleet Maintenance Fund budget adjust 20,000 17,221.166, 1, Budget appropriations are adopted at the fund level for all funds except the General Fund. In the General Fund, budget appropriations are adopted at the department level. Expenditures in excess of appropriations for each fund are prohibited by the City Charter. Appropriations lapse at the end of the budget year if they have not been expended or lawfully encumbered. 2. Formal budgetary integration is legally enacted and employed as a management control device during the year for all funds. 3. Encumbrance accounting is employed in governmental funds. Encumbrances(e.g., purchase orders, contracts) outstanding at year end are reported as assignments of fund balances and do not constitute expenditures or liabilities. City of College Station, Texas o tes to the Fir$a n a I Statements 311„J„,?illa„„„„„„„„..._ Exceiss of Expenditures over Appropriations The amounts at any excesses of expenditures over iEippropriations during fiscal year 201.5 and the funds in which they occurred are as follows: fund Arneunt General Government Proiects $ 1,410,147 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 Stalemei it 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 allocatiori is based on each fund's proportional equity to total pooled equity, Weighted Average, Fair Value Maturitiy(ciao) Bank Demand Accounts 74,164,958 1 US Agency 6,012,420 544 Money Market Accounts 50,794,279 Certificates of Deposits 9,030,657 467 Texas Local Government Investment Pool 26 010,245 Portfolio Weighted Average Maturity 46 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 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 2011 and the Texas Public Collateral Act of 1989. These investments include the following: 1. Direct obligations of the United States government: U.S. Treasury Bills, U.S, Treasury Notes, and U.S. Treasury Bonds as well as ,ltonds or other interest bearing obligations for which the principal and interest are guaranteed by the full faith and credit of the United States government and rated not less than A or its equivalent by at least one nationally recognized investment rating firm, 2. Federal Agencies and Instrumentalities including but not limited to, discount notes,callabies and debentures of the Federal National Mortgage Association (FNMA), the Federal Home Loan Bank(FHLB), the Federal Farm Credit Bank(FFCB), and the Federal Home Loan Mortgage Corporation (FI-ILMC). 3. Time Certificates of Deposit, insured by the Federal Deposit Insurance Corporation (FDIC)or its successor, or the National Credit Union Share Insurance Fund or its successor,in state or national banks. Any deposits exceeding FDIC insurance limits shall be collateralized at 102°/0 of the face amount of the Certificate of Deposit by securities listed in 1 2 above and held by the City's custodial bank or the custodial bank of the institution the CD's are held, Bids for Certificates of Deposit may be solicited orally, in writing, electronically or using any combination of these methods. 4. Repurchase Agreements with a defined termination date of 90 days or less collateralized by a combination of cash and securities listed in 1 - 2 above. Collateral must have a minimum market value of 102% of the repurchase agreement, and must be held by the custodian bank or other independent third-party custodian contracted by the City, Bond proceeds may be invested in flexible repurchase agreements with maturity IlfitUaam Wan.0.11MIUMMUMeonmwmwviiiiiimiy,11¢=nertIOYMI**ManaZ 48 City of College Station, Texas Notes to the Financia Statements dates not exceeding the expected final proje(it expenditure if a formal bidding process is foliowed and properly documented for IRS l'iurposes. 5. Commercial Paper maturing within 180 days carrying a minimum rating not less than A-1 or P-1 or equivalent by two nationally recognized rating agencies, or; rated not less than A-1 or P-1 equivalent by one nationally recognized rating agency plus secured by an irrevocable letter of credit issued by a domestic bank. 6. AAA rated Money Market Mutual Funds registered with the Securities and Exchange Commission that invest exclitsively in investments described in this section. 7. AAA-rated investment Pools organized under the Texas Interiocal Cooperation Act that 'follow the requirements in the Public Funds Investment Act and which have been specificaily approved by the City. ity is a vol unta ry participant in two a xter nal i n vestal not pools, Tex pool and 1 ex STAR The pools a re 2a7-like pools, which are not registered with the Securities and Exchange Commission (SEC) as an investment company, but have a policy that it will, and does, operate in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. This type of pool uses amortized investment costs rather than market values to compute participant share values, Furthermore, the pools in which the City participates seek to maintain a stable$1 net asset value per share of unit, Accordingly, the fair value of the City's position in these pools is substantially the same as the market value of the shares in each of the pools, As of September 30, 2015,the City's investments in Texpool and TexSTAR were rated by Standard&Poor's as AAAm. 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% and Certificates of Deposit to 30%. As of September 30, 2015, the issuers whose securities represented more than 50/D of the City's investment portfolio were as follows: American Momentum Bank (9%)and Branch Banking and Trust Company(19%). 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 depositary services contract which governs its depository relationship. This contract requires that deposits not covered by depository insurance be collateralized at 105%.The City's,depository bank collateralizes the city's funds at 110%. 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. 45 City of College Station, Texas Noh�� lolq,ie_� F^mar,) 'ea} B. Receivables Receivables as, ol`yempend forihe Ci(y'mimdkeidueU ,major funds, onn-/nejoremj inKen^e| serVio* funds |r^ U'lu aggregate, inokdinA the applicable allowances for mocolecWbka accounts, are mxfollows: neli\ Sireet Internal Gowrn � 0�i G�e�| ��� � N �o� � � T��w�� ar \eo� xe ��h�� mvnm|m _�������� ___ TauE".s: Pmpf,.�ny $ 504873 533.207 $ ' $ - $ ' $ 1,8V.28$ Beve62010 '130.913 Snhao Suhtpta| lmnes, _ _ �771��7_ 53�2O? - 3'304.594_ RranAc 736.3117 730.517 charges, Woer%cem 98:3'397 345,997 294.735 115,03 739,759 Loans - ' ' 1.449.615 ' , 449,6/5 ��c�/awenun 65i,104_ ________�_ ________�_______�________�_~__ G5.104 Total gmmagovmnwE;intM 3.819'888 533.207 3w5,997 2.480,667 1115,6u0 71,295.3m3 Less al:mwancofui xnco|lecftieoCcoumo ����� � _______�_____����') __ #�.��8> (81,08l) N,�,�a| moei��em $ 3.OV5'�32 � U�5g�7 ___ ��~ ~� c ��� � � ��� hto,na| Business-typeuo,ivi(ieo� Beothn Water Wastewater Noomajmr service Fund Total Charges for xeruoem $ 15.011.861 g 2.652.163 $ 2'030'457 $ 1'277^898 $ $ 21'572'377 Less uNnmancofo, wmcnWooVh}mauoovnm (1.56e.617) (82.822) (167.6e1) (84.723) ' (1.9114'843) Net total moaxauoo $ 14.042^24* $ 2.569'341 $ 1.me2.rnS $ 1'183.173 $ $ 1S'm57,534 --- — '- -- Loans Receivable in the non-major governmental funds are made upof the following: mS5D0.Q08.4O-yemrloan of HOME Investment Partnership (HOME) funds for Sentour Court, an affordable, single-family residential! development; $715^283 in HOME down'peymentasn1stanoe loans for eligible HOME participants whose mamu are made with Federal funds from the Department of Housing and Urban Development(HUD); two Community Development Housing Reconstruction Program Lien Notes held by the City which total to $234.352. Loans Receivable in the non-major business-type funds represent BVSVVMA. |no.'n obligation to na�mbursa 2&09 College Station Certificate of Obligation debt issued and used tn construct the Twin Oaks Landfill, The annual principal and interest naoe|vab|a amounts are as follows: Due from Related pmrtv Year Ended September 3O` Principal Interest 2016 $ 250.000 $ 156.550 2017'2020 900000 548.528 2021-2825 1,365.000 462.707 2025'2030 1'345.000 125,573 City of College Station, Texas Notes to the 17 i n a nGial Statehtents .............IDLAALL,76,AtitQ„L„„„„Ltithdd..184AIELLLAILALIQ....___„,, c„, capital .Assets Capital SSe ctivity for the year ended September 30, 2015 was as follows:. Beginning Ending Governmentat Actives Balance Increases Decreases Adjustments Balance Capital Assets,not being depreciated Land s 40,66,6,933 0 799,,263 Sl (6,601,470) 1l1 , S 34,864,726 Construction in r1irogre5s '1'11,4'86,257 9,,404,380 (0,907,358) 11,98,3,259 Intel capital atisets not being deprociatod ,52,153,190 10,203,623 g 1,5,508,828) - 46,847„985 Capital'assets,being depreciated Buildings and building improvements, 4.4,607,428 1,,106,,161 (3„1 51854) 39,559,735 improvements other than bultding,s 40„699,967 4.558„706 (172,'747r 45„035„92,6 Madlinery and equipment 35„512,462 4,875„872 g 2,29,5,051) 38,093,1283 Infrasiructure 265,514,137 15,693,556, 281,207„693 Total capital assets,being depreOated 383,,333,994 26,234295 (5,,621,652) - 403,946,63'7 Less accumulated depreciation for: Building,s and building improvements 11„822,772 2,067,,,507 (427,057) '13,463,222 Improvements other than buildings 18.963,624 'I„90.9.486 (1 53.554) 20,719,55,6 Machinery and equipment 25„235,277 2,661,979 (2,121„804) 25,775,453 Infrastructure 135,941,823 8,639,,554 145,581,,377 ...,.........._ Totat accumulated depreciation 192„963,496 15,278,526 (2,702415) , 205,539,607 Total capital assets being depreciated„net 190,370,498 '10,955,769 {2,919,237), - 198,407,030 Governmental type activities capital assets,net $ 242,523,688 9 21.159,392 5 (18,428,065) $ - $ 245,255,0115 Beginning Ending, Business-Type Activities Balance increases Decreases Adjustments Balance ---- Capital assets,not being depreciated Land 5 690,750 $ - $ - $ - $ 690,750 Construction In progress 43,291,136, '14,091,860 (44,084,987) 13,300,009 Total capital assets,not being depreciated 43,981,886 14„093.,860 (44,084,987) • 13,990,759 Capital assets,being depreciated Electric system, 170,361,252 23323,674 (1,197,745) - 192,487,181 Water sy,stern 162,975,376 14,067,063 (326,968) ,. 176,715,471 Wastewater system 125,735,08.5 14,189,261 (2,051,839) 137,872,507 Buildings and building improvements 5,737,679 - - - 5,737,679 Machinery and equipment 7,118,145 1,550:772 (1,632,976) - 7,035,941 Total capital assets,being depreciated 471,927,537 53,130,770 (5,209,5281 • 519,848,779 Less accumulated depreciation for: Electric system 82,572,531 5,911,9.55 (1,155,999) - 87,328,487 Water system 51,556,752 5,293,181 (139,063) . 56,710,870 Wastewater system 49„626,784 4,907,917 (739,210) • 53,795.491 Buildings and building improvements 1,835,324 143,507 - 1,978,8,31 Machinery and equipment 3,460,718 1„288,279 (1,485,632) . 3,263,365, Total accumulated depreciation 189,052,109 17,544,8.39 (3,519,904) • 203,077,044 Total capital assets,being depreciated,net 282,875,428 35,585,931 _ 0,689,624) . 316,771,735, Business type activities capital assets, net $ 326,857,3.14 $ 49,679391 $ (45,774,611) $ - $ 330,762„494 51 City of College Station„ Texas Notes to the Fina Statements tiW...FJs(";e0. ta:113Sitalic-wkalbs13.11,,,.2fillfi Depreciation expense for fiscal year 2016 was charged as follows: Police $139,681 Fire 263,199 Public Works. 9,340,487 Parks and Recreation 1,435,299 Library 75,252 Planning and Development Services 8,014 information Technology 388,020 Fiscal Services 52,53.4, General Government 267,30'8 Non-departrnental '1,238,67;3 Capital Assets held by Internal Service Fund 2„070,059 Governmental Activities Depreciation Expense. 1,15,278 52fl Electric $6,086,048 Water 5,339,673 Wasterwater 5,008,,‘103 Sanitation 861„009 Northg,ate Parking 250„006 Business-Type Depreciation Expense D. Interfund Transactions Transfers between funds during the year were as follows: Governmental Business-type Transfers In Transfers Out Activities, net Actitidties, net Governmental Activities: General Fund $ 15,094,866 $ (11,441,262) $ 3,653,604 $ Debt Service Fund 262,795 262,795 Streets Projects 1,739,457 (550,974) 1,188,483 Other Nlonnnaior Governmental Funds 10,755,812 (2,823,486) 7,932,326 Business-type Activities: Enterprise Funds: Electric 738,495 (7,402,305) (6,663,810) Water 1,196 1(2„814,769) (2,8/13,573) Wastewater 773 (2,556,113) (2,555,34,0) Other Nonmajor Enterprise Funds 2'18,40'1 (1,222,886) (1,004,485) $ 28,811,79,5 $ (28,811„795) $ 13,037,208 $ (13,037,208)1 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 utility transfer in lieu of franchise fees, (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. E, Operating Leases The city acquired property on University Drive known as the Chimney Hill Property in fiscal year 2009 with the intention to build a convention center on the property. Hotel tax funds were used to finance $7,000,000 of the purchase, with the remainder of the purchase price coming from Certificate of Obligation, Series 2009.. The purchase price was allocated between the land, $6,555,190, and an existing building on the properly, $3,084,795. In October 2014 the City sold the property on University Drive known as the Chimney Hill property for $7,500,000. The proceeds from the sale, along with the revenue received from rent, net of expenses from the property from date of purchase through October 2014 were placed in the Hotel Tax Fund. At the time of the sale, the building carried a net value of$2,699,196 and $385,599 in accumulated depreciation. 52 City of College Station, Texas Notes 'to the Finaneill Statements ._...__EQLU3e,±hCiat,_YSidL.EDEALP Deferred Outtlowsiinflows,of esources --Other than Pensions In addition to assets, the statement of financial position andfor balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. For the period ended September 30, 2015, the City reported ,$1„502.183, in charges on debt refunding as deferred outflow of resources. These charges are reported on the government wide Statement of Net Position and will be amortized over the life ot the refunding debt, In addition to liabilities„the statement of financial position and/or balance sheet will sometimes report a separate section for deferred inflows of resources, This separate financial statement element, deferred inflows of resources,represents en acquisition of net position that applies to a future n8110(1(0 and so will not be recognized as an inflow of resources (revenue) until that time. The City has one item which arises only under a inodified accrual basis of accounting, which qualifies for reporting in this category. Accordingly the item, unavailable revenue, is reported only in the governrriEmtal funds balance sheet. The governmental funds report unavailable revenues from the following sources: Unavailable ilrikl411Q11. latch Property Ta:x 431,087,280 ,087,280 Loans Receivable 211,738 211,738 Other - Cemetery Plot Loans Receivable 19, 142 19,142 Other-Street Funds 345,997 345,997 Other-General Fund 633,034 633,,034 $2„297,191 $ $2,297,191 These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available, Governmental funds report unearned revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. As of fiscal year end,the unearned revenue reported in the governmental funds related to emergency services was$633,034. G. Prior Period Adjustment The Governmental Project for Veteran's Park, was completed in FY15 but was not posted to construction in progress in the General Fixed Assets Fund. A portion of the expenditures should have been recognized in FY14. A prior period adjustment was made to reflect the expenditures and the related depreciation expense that should have been recorded in fiscal year 2014. The prior period adjustment increased net position by$3.704,448. An error was discovered in the calculation of depreciation for Sanitation Vehicles, the vehicles were depreciated at '10 years instead of 5 years. A prior period adjustment was made to reflect the correct depreciation in prior years,which decreased net position by$389,360. The GASB has issued Statement No, 68 "Accounting and Financial Reporting for Pensions" which became effective for fiscal year 2015. This statement changes the focus of pension accounting for employers from whether they are responsibly funding their plan over time to a point-in-time liability that is reflected in the employer's financial statements for any actuarially unfunded portion of pension benefits earned to date. The GASB has also issued Statement No. 71 "Pension Transition for Contributions Made Subsequent to the Measurement Date" which became effective for fiscal year 2015. This statement relates to amounts associated with contributions made by a local government employer to a defined benefit pension plan after the measurement date of the government's beginning net pension liability, umm„MrompzummunoninunnonnEw aummuromommumMuinomurn " " auurnami City of College Station, Texas Notes to the Finandal Statements The implementation of Ste ten out No. 68 and Statement No. 71 resulted in the restatement of beginning net position for the elimination of the previously reported net pension obligation, the recording of the beginning net pension liability and the beginning deferred outflow for contributions rnade after the measurement date. The prior period adjustment decreased net position by$9,899,908. H. Long-Term Debt A summary of long-term debt transactions, including current portion, for the year ended September 30, 2015 follows: Ammo its Beginning Incurred/ Matured/ Ending Due VVithin Balance Issued Reti red Balance One Year Gowirnment al actiVi i es: General obligation beryls $ 89,050,000 $ , $ 7,195,000 $ 81,856,000 $ 7,145,000 Certificates of obligation 21,805„000 „. '1,915,00C) 19,690,000 '1,515,000 Premium/discount 5,418,887 493,971 4,924,916 493,973 Governmental activity Long term debt 116„273,887 9,603,971 106,660,916 9,'1 53,973 Business type activities: General obligation bonds 49,900,000 5,230,000 44,670,000 5,957,900 Certificates of obligation 91,310,000 4,005,000 87,305,000 4,100,000 Utility revenue bonds 14,920,000 1,525,000 13,395,000 825,000 Premium/discount 9,400,904 794,474 8,606,430 794,474 Business type activity Long term debt $ 165,530,904 $ - $ 11,554,474 $ 153„976,430 $ 11„677,374 Due to implementation of GASB No.63 and 65,deferred loss from refunding transactions have been reclassified from a liability to a deferred outflow of resources and is no longer presented in the long-term debt table presented above. 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. 54 City of Co'lege Station, Texas Notes to the Finanrial Staternents ,„,„ , r , rn—,,, :01.thilElacili„„„„ISULLELthil.L1;21Q111bilLIL„„,„29„„„L21",„_ Long-term debt at September 30, 2015 includes the following individual issues (not includiIng trnamortized prealitirflS or discounts): Interest Issue Maturity Original Net Rate ',a) Date Date Issue Retirement, Outstanding General Obligation Bonds: 2006 Issue 4,375-6,375, 7/1/06 2/15/26 4i, 7,375,000 $ 7„375,000 '$ 2006 Issue-Refunding 4,00-5,00 '12/1/06 2/15/18, 10,255,000 6;765,000 3,490„000 2007 Issue 4,25-625 6/1/07 2/15/27 3,930,000 'I,870,000 2,060,000 2008 Issue 4,0-5,0 9/1/08 205/28 9,455,000 3,'[1 5,000 6,340,000 2009 Issue 3,5-4,0 7/15109 2/15/21 3,3'35,000 680,000 2,6,55,000 2009 Issue-Refunding 2,00-4.00 11/15/09 2115/20 4,265„000 2,595„000 "I,670,000 2010 Issue 2,00-3,50 8/15110 2/15/30 19,635,000 3,740,000 15,895,000 2010 Issue-Re ru n d i ng 3.0-5.0% 11/1,5/10 2/15/22 'I'I 245,000 4,205,000 7,040,000 2011 Issue „25-1.6% '9115111 2/1 5/18 1,960,000 1,315,000 645,000 2012 Issue&Refunding 2.0-5.0% 6/1/12 2/15/32 11,515,000 2„505,000 9,010,000 2013 Issue&Refunding 2.0-5.0% 8/15/13 2/15/33 'I 4„505,000 1,995,000 12,510,000 2014 Issi„.ie&Refunding 2.0-5,0% 9/1/14 2/15/34 21,230,000 690,000 20,5401,000 118,705,000 36,850,000 81,855,000 General Obligation Bonds-Business-type Activities: 2009 issue-Refunding 2.00-4.00 11/15/09 2/15/20 3,830,000 2,335,000 'I.495,000 2010 Issue-Refunding' 3.0-5.0/0 11/15/10 2/15/22 25,905,000 8,510,000 17,3,95,000 2012 Issue&Refunding 2.0-5.0% 6/1(12 2/15132 9,570,000 2,810,000 6,760,000 2013 issue&Refunding' 2.0-5,0% 8/15/13 2/15/3,3 6,255,000 680,000 5,575,000 2014 Issue&Refunding 2.0-5.0% 9/1/14 2/15/34 14,635,000 1,190,000 13,445,000 ,_ 60,195,000 15,525,000 44,670,000 Total General Obligation Bonds 178,900,000 52,375,000 126,525,000 Certificates of Obligation-Governmental Activities: 2006 Issue 4,375-6.375, 7/1/06 2/15/26 8,325,000 8,325,000 _ 2007 Issue 4,25-6.25 9/1/07' 2/15(27 3,960,000 1,885,000 2,075,000 2008 Issue 3,25-5.0 9/1/08 2/15/28 22,855,000 15,870,000 6,985,000 2009 Issue 3.00-5.00 7/15/09 2/15/29 5,880,000 5,160,000 720,000 2010 Issue 2.00-3.50 8/15/10 2/15/30 1,050,000 885,000 165,000 2014 Issue 2.0-5,0% 9/1/14 2115/34 10,665,000 720,000 9,945„000 52,735,000 32,845,000 19,890,000 ,...._ 55 City of College Station, Texas Notes to the Financial Staternents Far un'the lEli3Ot.Y".(''-'" '1sittifigliktitiML„;3it,„„21:11,5,„„„.._.„„„., Certificates of Obligation-Business-type Mil,,l ii es 2008 Is sue 3.25 -5.0 911/08 2/15/28 15,925,000 3,040,000 "I 1,985,000 2009 Issue 3,00-5,00 '7/15/09 2/15/29 :30,580,000 11,135,000 'I 9,445„000 2010 Is sue 2.00-3.50 8/15/10 2/15/30 2,850,000 500,000 2,350,000 ,2011 Issue 2.00-3,60 9/15/11 2/15/31 7,920,000 'I,100,000 6,820,000 2012 Is sue 2.0-5.0% 6/1/12 7(15/32 16,415,000 '1,725,000 14,690,000 2()13 Issue 2.0-5.0% 8/15/13 2/15/33 'I 0„230,000 730„000 9,500,000 2014 Issue 2,0-5.0% 9/1/14 2/15/34 23,340,000 825,000 22,515,000 ............ ..............., 107260,000 19,955„000 87,305,000 in/al Certificates of Obiigaticie 159„995,000 52,800,000 '107,195,000 Utilily Revenue Bonds: 2006 Is s i,JE,!' 1.375-6,375 7/1/06 ,','l/1/28 16,950,000 16,950,000 2007 Issue 4,,00,-0.70 9/1/07 2/1/27 18,665,000 ,5,270,000 13,395,000 $ 35,6'15,000 1l 22,220,,000 13,395„000 Total Outstal)(ling Bonds $ 24'7,115,000 ....-------....---4 The annual requirenterds to amortize,debt outstanding as of September 30, 2015 are as follows: 'Governmental Activities General Obligation Certificates of Obligation Year Ended September 30, Principal Interest RrIncipal Interest 2016 $ 7,452,100 $ 3,159.601 $ 1,515,,000 $ 847,891 2017 7,360,000 2„892„721 1,430,,000 794,925 2018 6,645,00,0 2,6191,33'1 1,370,000 737,781 2019 5,855,000 2,356,546 1,445,000 673,399 2020 6,135„000 2,097772 1,450,000 612„702 2021-2025 25,390.000 7,255,893 7605,000 2,060,743 2026-2030 17,755,000 2,606,166 3,865,000 640,844 20,31-2034 5,570,,000 375,681 1,210,000 124„750 $ 82,162,100 $ 23,363,711 if 19,890,000 $ 6,493,035 Business-Type Activities General Obligation Certificates of Obligation Utility Revenue! Year Ended September 30, Principal Interest Principal Interest Principal Interest 2016 $ 5,957,900 $ 1,814,200 $ 4,100,000 $ 3,492,099 $ 825,000 $ 569,790 2017 6,280,000 1,568,699 3,985,000 3,361,180 865,000 535,558 2018 5,535,000 1,311,013 4,180,000 3,217,311 915„000 498,610 2019, 5,025,000 1,070,550 4,385,000 3,054,86'1 965,000 458,648 2020 5,285,000 844,200 4,575,000 2,887,806 1,015,000 416,077 2021-2025 15,065,000 1,709,300 26,240,000 11,537,127 5,955,002 1„338,214 2026-2030, 1,215,000 30,375 28,345,000 5,543,940 2,855,000 130,162 2031-2034 11,495,000 944,405 ..,. - $ 44,362,900 $ 8,348,,337 $ 87,305,000 $ 34,038,729 $ '13,395,002 5 3,947,059 .,„ ,-- ........._ 56 City of College Station, Texas Notes to the Financial ,Eilitents f„„ Litlg„..hisf.ifill±Llfiejc._Qr'ftrlt, tllt2„.ctt.,4 the City intends to retire all of its general long-term liabilities, plus interest, from ad valorem taxes„ Proprietary fund type long-term debt issued for Northgate Parking Garage, Electric,Water and Wastewater projects will be repaid, plus interest, from the operating revenues of their respective funds. General Obligation Bonds and Certificates of Obligation 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 liave been issued by the City for both governmental activities as well as business-type activities. 'These bonds are reported in the proprietary funds it they are. expected to be repaid from proprietary fund leVentle, General Obligation Bonds are direct obligations, for which the City has pledged the full faith and credit of the City. 'fliese bonds gems ally are issued as 20-year serial bonds with varying amounts of principal maturing ea rill year. the City is required by bond covenants to create (ruin ad valorem tax revenues a sinking fund sufficient to pay the curreni 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 general obligation bonds and certificate indentures. The City is in compliance with the significant limitations and restrictions at September 30, 2015,, lin 2009,, the City issued $31,315,000 in Certificates of Obligation. $2,600,000 of the proceeds was used to purchase land for a convention center site, Council no longer intends to build a corwentiori center, therefore, causing a change in use to the properly. In order to maintain the tax exempt status of the 2009 Certificates of Obligation, Council approved to defease the convention center bonds on November 21, 2011. On December 1, 2011 the bonds were defeased. $2,728,149 was placed in an escrow account with Bank of New York to cover the principal and interest amount of the bonds until their call thite of February 15, 2019. Also, in 2009, the City issued $5,145,000 in Certificates of Obligation to pay for a portion of the construction of a new municipal landfill. BVSWMA,Inc.has pledged to repay the$5,145,000 plus interest to the City of College Station. As of September 30, 2015 BVSWMA, Inc, owed the City$3,860,000, 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 of 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, 2015, the City did not have an arbitrage rebate liability,. Defeasance In prior years, the City issued refunding bonds to defease certain outstanding bonds for the purpose of consolidation and to achieve debt service savings. The City has placed the proceeds from the refunding issues in irrevocable escrow accounts with a trust agent to ensure payment of debt service on the refunded bonds. Accordingly, the trust account assets and liabilities for the defeased bonds are not included in the City's financial statements. Although defeased, the refunded debt from these earlier issues will not be retired until the call dates have come due or until maturity if they are not callable issues. On September 30, 2015, the City's, escrow balance for bonds defeased on December 1, 2011 was $2,018,838, The defeased bonds are not callable until February 1 5, 20'19. City of College Station, Texas, Notes t.o the Fin;;;inCiiill Staternents ., Llc.21,,,,Itar.ilt.cigclo,.8t21.0..t.daa„..,,,,,,Q.....,41)1,.,,q,..,..., ., 1. components of Fund Balance Fimli balances for governmental funds at Septembet 30, 2015 erf.:; as follows: General Dahl.Sr/Pylon !Arne'Projects, CM ION' .i()WI! I-i int1113313 noes Nuns pellOahle; Assets 1111.1ld f uo Resale , 11. . 3 , $ NOM„1810 $ 0,244,180 ktvenliiiion, 4061111 11 epaic15 1,016 . , , 1 it,1761 13orvIrlotoi115.6 Col,1,RAO,j,ko ittelgither hood Pink., , i1,677,5511 4,677,53,1V Corot,v witty IDnvetoprrket1 . „ 1,028,499 1,928,499 Court Sepushly Fee - _ 23,030 23,930 Court Technology Fee „, , i143.„8211 i1.11.3„626 447011 Ser yrs e . 2,514.046 . 2,8114,04.8 D.mi imp General Ilovvrnenerg Capilal P4(*.,c1:s ' . 19,6811,N 9 5.,0 I 9007 25,530.616 Herr/Occupancy lex . „ 8E613,166 R.663,166 ,tuvernte Case Kartager - ''' 262,526 202,526 Panics and Reareallen Catellat Proteols - - 8.218„662 8,218,662 Police Seizure , - 76„042 76,042 VVoli Pen Creek TIF - .. - 1,256,814 1„258,814 Truancy Re ventIon . . 22,005 22,005 Wes.1 Medical CistrIct TIKI Nb 18. ,,, . - 267,285 267,285 east Medical Elistrict'17111Z No 19 ,„ . , 2,014 2.014 PEI 3 Access Channel . . „ 385,976 385,976 Meyer Elate Gill - - . 564,912 564„912 f:: n-rRIted tol Texas.Avenue Cemetery Endow went , „ ,., 1,8511,345 1,8.51,346 Memorial Demeter y . - - 1,544„978 1,544,,976 FIC7FTQF lal CAB rivIery Endow ntartl ., " - 579„670 879,670 Drainage Infrastructure Irtdrovernents 3,101,636 3,101.63,6 Parks kit restructure 1131t1over1ants, 7,416,241 '7,415,241 Assigned Other Purposes 2,433,744 - . 2,433,744 Assigned to: Crime Prevention - &,.on orric Develeprreni. „ - . . Elholency Titre Payment Fee - - Perks)(Ira Education Unassigned: 19,025,641' , . „ 19,925,641 $ 22,423,064 $ 2,814,048 $ 16,681,609 5 53,661,308 $ 98.600,029 3.33..--.33-3,....m0,-3wwwmt,,...... ,... ..... .... ... , --...... 5 8 City of College Station, Texas Notes to the Finan(A a Satel e)rt ts Fr tha.baat..:"Y„:?„,„,5,111Aidad..13242,1Q11117,10„'„,,„,3„„„9„.„2.0.15,„.„„,,„„„.„„„.„.„„„,,„„. other intomnation A. Property Taxes Property tax is levied each October 1 on the assessed (appraised)value listed as of the prior January 1 for all teat 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, "lax 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 45„2500 cents per$100 of assessed valuation for the year ended September 30,2015., Under current state statutes, the Cityls ability to increase the levy for property taxation is subject to a maximum rate of$2,50 per $100 valuation. The Brazes 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 ioust 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 faces many risks. These risks generally can be divided into four loss categories: 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 from these. exposures. The City is self-insured for health benefits, and the plan is administered by Blue Cross Blue Shield of Texas. This activity is accounted for in the Employee Benefits Fund, which is funded monthly from employee contributions and City operating funds. 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's stop loss insurance policy limits the City's liability to$165,000 per individual per year, with an aggregate attachment point for the last 12 months of $7,661,832. The liability for outstanding losses includes $1,336,795 for claims incurred but not reported as of September 30, 2015. In fiscal year 2015, City real and personal property and mobile equipment was insured by Affiliated FM, A.M. Best rated A+, financial category XV. Affiliated FM premiums were funded by calculated contributions from the City's operating funds. Affiliated FM provided claims handling for these coverage lines. The City carried a property insurance policy deductible between $100,000 and $250,000 per occurrence, depending on type of toss. Property insurance covered all direct losses and some indirect losses. The City self-insures all liability coverage lines. Licensed adjusters in the City's Risk Management Division process Liability and Workers' Compensation claims utilizing the services of Third Party Administrator Abercrombie, Simmons & Gillette (AS&G). In the event of a simultaneous liability and Workers' Compensation claim, only one SIR(self-insured retention)applies. To further protect the City from catastrophic loss, the City carries excess liability coverage through Allied World Insurance Company, AM. Best rated A XV, and Colony Insurance Company, A.M. Best rated A XIII. Colony is also the City's excess Workers°Compensation carrier. The self-insured retention("SIR")for 2015 was$500,000 per claim. Liabilities in the property and casualty fund and the Workers'Compensation fund are reported to the carrier when a covered loss can be reasonably estimated to approach one-half of the City's Self-Insured Retention. Liabilities include an amount for claims incurred but not reported. Based on the most recent actuarial study, the City has City of College Station, Texas Notes to the Finandal Statements recorded a potential liability of$342,312 in the property and casualty fund and a potential liability of$293,935 in the Workers' Compensation fund. The results of the process to estimate the claims liability is not exact, as it depends on many complex 'factors, such as inflation, changes in legal doctrines, and damage awards, Accordingly,claims are re-evaluated periodically to accommodate the effects of inflation,recent claim settlement trends (including frequency and amount of payouts), and other economic and social factors, Settlements have, not exceeded self-insured retention in each of the past three fiscal years. As a reimbursing employer, the City uses the Unemployment Fund to pay qualified claims,filed under the Texas Unemployment Compensation Act. Monthly contributions to fund this activity are based on a percentage of payroll determined,armtrally during II ie budget process., The liabilities for insurance claims reported in each of the funds are based on Goveriimental Accounting Standards Board Statement No. 10, which requires a liability for claims to be reported if intern ration prior to the issuance of the financial statements indicates ills probable a liability has been incurred at the date ot 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 sell insurance funds accounted for as Internal Service Funds for fiscal years 2015 and 2014 are as follows: 2015 2014. Unpaid Claims, October 1 $1,650,636 $1641547 Incurred Claims(including IBNR's) 8,228,627 7,256,283 Claims Paid (7,9.06,221) (7,247,194) Unpaid Claims, September 30 $1,973,042 $1,650,636 C. Joint Venture In 1990 the Brazos Valley Solid Waste Management Agency("BVSWMA")was formed under a joint solid waste, management agreement between the Cities of College Station and ;ryan,, 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 reported 50% ownership in BVSWMA. The City of College Station served as landfill operator. This basic structure is how BVSWMA operated until 2010. In February 2010 the City Councils for the City of Bryan and the City of College Station approved Articles of Incorporation for BVSWMA, Inc* a Local Government Corporation under the provisions of Subchapter D of Chapter 431,, Texas Transportation Code; and Chapter 394, Texas Local Government Code. In March 2010, the City Councils of Bryan and College Station approved bylaws for BVSWMA, Inc.,which establishes the power to issue debt and to acquire land. The powers of BVSWMA, Inc* are vested in a 7 member Board of Directors, with each City Council appointing 3 members and the 7th member to be selected by an approval process set forth in the Articles of Incorporation and deemed to have been appointed by the Cities. On September 13, 2010, Bryan City Council, College Station City Council and the BVSWMA, Inc, Board of Directors formalized the creation of BVSWMA, Inc, and the dissolution of BVSWMA, effective October 1, 2010,. with the approval and execution of a(n): oi Borrowed Employee Agreement between the City of College Station and BVSWMA, Inc.; Asset Transfer and Debt Reimbursement Agreement between BVSWMA, Inc.,the City of College Station and the City of Bryan; 60 City of College Station, Texas Notes to the Financial Statements Agreemerit between the City of College Statiori„ the City of Bryu and BVSWIVIA„ he regarding the! Assignment and Assumption of Contracts and Payables, a Final Settlement Agreement and Release related to the final settlement and dismissal of the certain lawsuit referred to as City of Bryan, Texas v. City of College Station, Texas, Cause No. 08-001626-CV-272 in the 272nd District Court of Brazos County, Texas, ("the Lawsuit ); consider the Agreed Motion to Dismiss; and, consider the Agreed Order of Dismissal. Subsequent to the end of the fiscal year ended September 30, :2010, BVSWMA.transferred all of its assets to! BVSWMA, Inc. College Station reports BVSWMA„ hie as a joint venture with the City of Bryan and recognizes! 50% ownership in BVSWMA, Inc. in the City's financial statements. Per GASB 14, a Joint Venture (JV) is a legal entity or other organization that results from a contractual arrangement and that is olNned„ operated., or governed by two or mare particoants as a separate and specific activity subject to joint control, in which the partidrmots retain(a)an ongoing financial interest or(b)an ongoing! financial responsibility. Joint control means that no single participant has the ability to unilaterally control the 'financial or operating policies of the Joint Venture. Ari ongoing financial interest includes an equity interest,as defined in paragraph 72, and any other arrangement that causes a participating government to have access to the Joint Venture's resources. An equity interest in a Joint Venture is manifest in the ownership of shares of Joint Venture stock or by otherwise having an explicit,. measurable right to the net resources of a Joint Venture that is usually based on an investment of financial or capital resources by a participating government. An equity interest is explicit and measurable if the Joint Venture agreement stipulates that the participants have a present or future claim to the net resources of the Joint Venture and sets forth the method to determine the participants' shares of the Joint Venture's net resources. Per the BVSWMA, Inc, by-laws, paragraph 8,05, Section 431.107 of the Texas Transportation Corporation Act entitles the Cities, at all times, to have the right to equally receive the income earned by the corporation, Also, per BVSWMA, Inc,'s by-laws, paragraph 4.03a,the corporation,with the approval of the Cities,is authorized to issue short-term debt; however, the Cities shall be given the first opportunity to provide these funds before the Board incurs debt. This would result in the City of College Station providing an investment of financial resources to BVSWMA, Inc. An ongoing financial responsibility for a Joint Venture occurs if a participating government is obligated in some manner for the debts (see paragraph 33 of GASB '14) of the Joint Venture, or if the Joint Venture's continued existence depends on the continued funding by the government. Per paragraph 33 of GASB 14,— A primary government is obligated in some manner for the debt of an organization if it is legally obligated to assume all or part of the debt in the event of default. Per Article XIV, paragraph 14,03, of the Articles of Incorporation of BVSWMA, Inc., upon dissolution of the corporation: A. the assets of the Corporation shall be distributed equally between the Cities;and B. any remaining liabilities of the corporation shall be shared equally between the Cities. State and federal laws and regulations required BVSWMA, Inc. to place a final cover on its Rock Prairie landfill site when it stopped accepting waste and to perform certain maintenance and monitoring functions at the site for thirty years after closure. The Rock Prairie Road landfill stopped accepting waste in July 2011,and the Twin Oaks Landfill in Grimes County began accepting waste. During the fiscal year ending September 30, 2013, the installation of the remaining final cover at the Rock Prairie Road Landfill(+/-40 acres)was completed. Although closure and post closure care costs will be paid only near or after the date that the landfill stopped accepting waste, BVSWMA, Inc. reports a portion of these closure and post closure care costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. Actual cost may be higher due to inflation, changes in technology, or changes in regulations. The following is a summary of information from the audited financial statements of BVSWMA, Inc. as of September 30, 2015; City of College Station, Texas N otes to the Finan a '7,1't te e n ts ku„ tatt.t,„„ 2015 ;"4914 Current assets arid other assets $14,233,143 $12,668,931 Capital Assets 26,637,834 26,362,273 Total assets 40,870,977 39,031,204 Current liabilities '1,613,893 898,617 Noncurrent liabilities 12 079 468 11,313 GM Total liabilities '13,693,361 13,212,231 Net investment in Genital assets 18„627,834 "17,892,273 Unrestricted 8,549,182 7 926 '700 Total net position .111i2.17,171,13:16 Revenues Landfill charges $ 7,932,87(3 $ 7,275,397 Compost facility revenue 298,0'33 340,0701 Miscellaneous revenue 35,307 34 397 Total revenues 8,266.2'116 '7,649,8614 Operating expenses (6,686,814) (6,721,679) Interest expense (338,441) (353,784) Other non operating revenues (expenses) 117,682 8,331 Change in net position '1,358,643 582,732 Net position, beginning of year 25,818,973 25,236,241 Net position, end of year $27.1714216 The City's share of BVSWMA, Inc,'s net assets for fiscal year 2015 was$13,588,808,A copy of BVSWMA, Inc.'s financial statements may be obtained from the City's Fiscal Services Department. 0, Pension Plan Plan Description The City of College Station participates as one of 860 plans in the nontraditional,joint contributory,hybrid defined benefit pension 'Dian administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code(the TMRS Act)as an agent multiple-employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the System with a six- member Board of Trustees, Although the Governor, with the advice and consent of the Senate, appoints the Board. TMRS is not fiscally dependent on the State of Texas. TMRS's defined benefit pension plan is a tax- qualified plan under Section 401 (a) of the Internal Revenue Code. TMRS issues a publicly available comprehensive annual financial report(CAFR)that can be obtained at wvvmtnirsxonl All eligible employees of the city are required to participate in TMRS, TMRS provides retirement,disability, and death benefits, Benefit provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the city- financed monetary credits with interest were used to purchase an annuity. Members may choose to receive their retirement benefit in one of seven actuarially equivalent payments options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12,24,or 36 monthly payments, which cannot exceed 75%of the member's deposits and interest. 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: 62 City of College Station, Texas ................ Notes to the Financ01 Statements Employee deposit rate '7„00% Matching ratio (City to Employee) 2 to 1 Years required for vesting 5 20 years at any age, 5 years at Service retirement eligibility age160 and above '75% Repeating Updated eNee Credit 'Transfers 50% at CPI Anni arty Increase(In retirees) Repeating Employees covered by_behelit terms At the December 31 2014 valuation and measurement date, the following employees were covered by the berietit terms: Inactive employees or beneficiaries currently receiving benefits 362 Inactive employees entitled to but not yet receiving benefits 441 Active employees, 805 1,608 Contributions The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and the city matching percentages are either 100%, 150%,or 200°/0, both as adopted by the governing body of the city. Under the state taw governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year,with an additional amount to finance any unfunded accrued liability. Employees for the City of College Station were required to contribute 7% of their annual gross earnings during the fiscal year. The contribution rates for the City of College Station were 14%and 14% in calendar years 2014 and 2015, respectively. The city's contributions to'PARS for fiscal year 2015 were$6,068,368 and were equal to the required contributions. Net Pension Liability The city's Net Pension Liability (NPL)was measured as of December 31, 2014, and the Total Pension Liability (TPL)used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. Actuarial assumptions The Total Pension Liability in the December 31,, 2014 actuarial valuation was determined using the following actuarial assumptions: Inflation 3.0% per year Overall Payroll growth 3,0')/0 per year Investment rate of return 7.0%, net of pension plan investment expense„ including inflation Salary increases were based on service-related table. Mortality rates for active members, retirees, and beneficiaries were based on the gender-distinct RP2000 Combined Healthy Mortality Table, with mate rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis 63 City of College Station, Texas Notes IC) the Financial Staten lents by scale BB to account for future mortality improvements. For disabled annuitants, the gender-distinct RP2000 Disabled Retiree Moo tality Table is used, with slight adjustments, Actuarial assumptions used in the December 31,2014,, valuation were based on the results of actuarial experience, studieF. This experience study was for the period January 1, 2006 through December 31, 2009, first used in the December 31, 2010 valuation. Healthy post-retirement mortality rates and annuity purchase rates were updated based on a Mortality Experience Investigation Study covering 2009 through 2011, and dated December 31, 2013. These assumptions were first used in the December 31,, 2013 valuation, along with a change to the Entry Age Normal (EAN) actuarial cost method, Assumptions are reviewed annually„ No additional changes were made, for the 2014 valuation, The long-term expected i:ate of return on pension plan investinents is'7.0%. The pension plans policy in regard to the allocation of invested assets is established and may be amended by Ilia TMRS Board of TR stees, Plan assets, are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income, in order to satisfy the short-term and long-tenn funding needs of TMRS. -Fre long-term expected rate of return on pension plan investments was determined using a building-block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation, The target allocation and best estimates of arithmetic, real rates of return for each major asset class are summarized in the following table: Lonl,,,-Terrn Expected Real Asset Target Rate of Return Class Allocation, (ArithrneticL Domestic equity 17.5% 4.80% International equity 17.5% 6.05% Core Fixed Income 30.0%© 1.50% Non-Core Fixed 10.0% 3.50% Real Return 5.0% 1.75% Real estate 10.0% 5.25%, Absolute Return 5.0% 4.25% Private Equity 5.0% 8.50%, Total 100.0% Discount Rate The discount rate used to measure the Total Pension Liability was 7.0%, The projection of cash flows used to determine the discount rate assumed that employee contributions wilt remain at the current 7% and employer contributions will be made at the rates specified in statute. Based on that assumption, the pension plans Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore,the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. (3,4 City of College Station, Texas Notes tO the Fni ancial Statem e n crease cre ace) Total Pension Plan Fiduciary Net Pension Lie bi I ity Not Position, Liability (11,} Balances at 12/31120113 $ 221,999,821 $ 200,281,220 l 21,718,601 Changes for the year: Service cost 6,108,154 6,408,154 „. Interest '15,448489 '15,448,489 Differences be-Awn expected and actual! ,163,,"1'71) (1,163,071) Contributions—employer '5)916,1175 (5,916,175) Contributions--orripluyeo 3,000,843 (3,060,8413) Net investment income 1, (11,457,66(1) „„. Benefit payments, including refunds of employee contributions (9,022,396) (9,022,3,06) Administrative expense (119,62110), 119,620 Other changes (9,835) 9,835 Net changes 'I 1671,076 11282,833 388,243., Balances at 12/31/2014 $ 233,670„897 $ 211,564,,053 $ 22,106,844 Sensitivity of the net pension liability to chanoes in the discount rate The following presents the net pension liability of the City, calculated using the discount rate of 7.0%, as well as what the City's net pension liability would be if it were calculated using a discount rate that is 'I-percentage-point lower(6.0%)or 1-percentage-point higher(8.0%)than the current rate: Current 1%Decrease Discount 1%Increase (6.00%) Rate (7.00%) (8.00%) City's net pension liability $57,400,376 $22,106,844 ($6,657,294) Pension Plan Fiduciary Net Position Detailed information about the pension plan's Fiduciary Net Position is available in a separately-issued TMRS financial report. That report may be obtained on the Internet at www.tmrs.com, Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions The implementation of Statement No. 68 resulted in the restatement of beginning net position for the elimination of the previously reported net pension obligation, the recording of the beginning net pension liability and the beginning deferred outflow for contributions made after the measurement date. For the year ended September 30, 2015, the City recognized pension expense of$5,193,753. City of College Station, Texas tes to nat cial tatenlelts " Al Septeniber 30„ 2015, the City reported deferred outflows and inflows of resources related lo pensions from It following sources:. Deterred Outflows of De fe rre d Inflows Resources of Resources Differences in expected and actual experience 938,950 t:lhanges of as:sumptions Difference I Otwe en plc ected and act+ial iearnings 2.,049„61 Contributions subsequent hi the measurement date 4,543,097 Total 6,592,712 938,950 Deferred outflows or resources related to pei sions.resulting from contributions subsequent to the itteasurement date of$4,54:3,097 will be recognized as a reduction of the net pension liability for the measurement year ending December 31, 2015 (i.e, recognized in the city's financial. statements September 30, 2016). Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Measurement Net deferred Year Ended outflows (inflows) Dec 31 of resources 2015 288,183 2016 288,183 2017 288,183 2018, 288,182 2019 (42,066) Thereafter - Total 1,110,665 E. Other Post-Employment .4enefits In addition to the pension benefits described in Note V:D., as required by state laws and defined by City policy, the City makes available postretirement medical,dental,vision,drug and life insurance benefits to all employees who meet TMRS retirement qualifications, retire from the City and who enroll themselves and their eligible dependent(s)on or before the effective date of their retirement through the City's single-employer defined benefit other post-employment benefit (OPEB) plan. The life insurance plan provides a $10,000 fully insured death benefit coverage upon retirement which ceases upon attainment of age 65 for retirees. So long as monthly premium payments are made, the healthcare plan provides coverage until age 65 to eligible retirees, their spouses and dependents through the City's group health insurance plan, which covers both active and retired members. Benefit provisions as well as retiree premium contributions are established by management. The City determines the employer and participant contribution rates annually based on recommendations of City staff and the City's consultant. All medical, dental, vision and drug care benefits are provided through the City's self-insured health plan. The benefit levels are the same as those afforded to active employees. Life insurance for eligible retirees is paid entirely by the City. During fiscal year 2015,fifty-two former employees were covered under this arrangement,with claims less retiree contributions totaling ($434,136), 66 City of College Station, Texas Notes to the Financial Statements Annual OPEB Cost and Net OPEB °Motion The City's annual OPEB cost is based on the annual required contribution (ARC) of the City, an amount actuarially determined in accordance with the parameters of GASB Statement 46. Despite the apparent implications of the term ARC, the City is not required to contribute the ARC to the plan each year, Instead, the ARC provides a basis for evaluating whether the City's contributions for OPEB are adequate to fund the benefits during the working lifetime of current employees (i.e., the normal cost) and to amortize existing unfunded obligations (i.e., the obligations for current retirees plus that portion of the current employees' obligations that are attributed to past service)in a systematic mariner over the amortization period prescribed by GASB. "The annual OPEB cost is the annual accounting expense recorded on the City's Statement of Revenues, Expenses and Changes in Net Position and on the City's Statement of Activities, The annual OPEB cost is equal (1)to the ARC for the current fiscal year, plus (2) interest on the Net OPEB Obligation at the beginning of the year, reduced by (3) an adjustment to the ARC which is (Awl to an amortization of the beginning of the year Net OPEB Obligation. As described in Note Vt0, the Oily terminated its Borrowed Employee Agreement with BVSWMA„ lee 201,1 2016, Annual Required Contribution (ARC) $ 1,44.9„844 1„449,844 $ 1,810,895 Interest on Net Pension Obligation 333,710 397,569 400,494. Adjustment to the ARC (413,492J (492,618) (5,22,84'7) Annual OPEB Cost 1,370,062 1,354,795 '1,688,542 Contributions Made. (92,888) (406,326). (434,136) Increase(Decrease)in net pension obligation 1,277,174 948.469 1„254,406 Net OPEB Obligation/(Asset), beginning of year 6,674,204 7,951,378 8,899,847 Net OPEB Obligationf(Asset), end of year $ 7,951,378 $ 8,899,847 $10,154,253 Actual Percentage of Accounting; Annual OPEB Contribution Annual OPEB Net 0%3 Year Ending Cost Made Cost Contributed Obligation 9/30/2013 '1,370,062 9,208.88 6.78% 7,951,378. 9/30/2,0'14 '1,35.40795 406,326 29.99% 8,899,847 9/30/2015 '1,688,542 434,136 25.71% 10,154,253 Generally, the Net OPEB Obligation is the cumulative difference since the effective date of GASB 45 between the annual OPEB cost and the employer's contributions to the plan including the OPEB liability (asset) at transition, if any. Because the City did not have an OPEB liability/(asset)at transition, the Net OPEB Obligation as of October 1, 2008 is zero. Whenever the City contributes an amount less than the annual OPEB cost, this shortfall will increase the City's Net OPE:. Obligation. Actuarial Methods and Assumptions Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability. of events far into the future, Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The required Schedule of Funding Progress immediately following the notes to the financial statements presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. GASB No. 45 calculations are based on the types of benefits provided under the terms of the substantive plan at the time of each valuation and on the pattern of 67 City of College Station, Texas N )tes to the t a te m e nt sharing of costs between the employer and plan participants to that point. In addition, the projection of benefits for financial reporting purposes does not explicitly incuiporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan participants in the future. Actuarial calculations reflect a long-term perspective. In addition, consistent with that perspective, actuarial methods and assumptions used in developing the amounts in this report include techniques that are designed to reduce short-terrn volatility in actuarial accrued liabilities. The required contribution rates were determined as' part of the October 1, 2014 actuarial valuation„ Significarit methods and assumptions follow: Actuarial Valuation Date 'I OM/201 41 Asset Valuation Method Market Actuarial Cost Method Projected nit Credit Actuarial Assumptions: Annual Investment Return,Assumption* 4,5% 'Includes Inflation at: 3.5% Projected Salary lnc re a se s N/A. Annual Healthcare Trend Rates 8.0% in IFYIE. '2015, declining k) 5,25% in FYE 2021 Amortization Method Level dollar Amortization Period 30 year open period. Fundina Status and Fundina Progress The Schedule of Funding Progress presents information as of the current valuation date and the two preceding valuation dates. As of the date of this financial statement, the City has had three valuations, that for the fiscal year beginning October 1, 2010, October 'I, 2012 and one for the fiscal year beginning October 1, 2014. UAAL,as a Actuarial Actuarial Actuarial Covered Percentage Valuation Value of Accrued Unfunded Funded Payroll of Covered Date Assets Liability (AAL) AAL (UAAL) Ratio (Fiscal Year) Payroll 10/1/2010 ,„ 9,356,116 9,356,116 0.0% 42,298,776 22.12% 10/1/2012 10,897,037 10,897,037 0.0% 44,000,000 24.77% 10/1/2014 15„013,856 15,013,856 0.0% 44,,000,000 34.12°/0 There are factors that affect the ability to compare amounts reported from one actuarial valuation date to the next. The assumptions that have been changed since the previous valuation are: - the Discount Rate has been updated to reflect changes in the allocation of assets of the employer and the expected return on such assets; - the Assumed Per Capita Health Benefit Costs and Assumed Expenses for retirees and dependents have been updated to reflect changes in claims and expense expectations; and - the Health Benefit Cost Trend and Expense Trend have been updated to reflect changes in short-term expectations of the annual rate of increase of the Assumed Per Capita Health Benefit Costs. The City has had three separate valuations, one of which used the October 1, 2010 valuation date, October 1, 2012 and October 1, 2014 valuation date. The October 1, 2010 valuation date was used to develop results for the fiscal year ending September 30, 2012, the October 1, ,2012 valuation date was used to develop results for the fiscal years ending September 30, 2013, and 2014. The plan was changed effective January 1, 2012 to eliminate post-65 medical coverage and was changed effective January 1, 2013 to eliminate one of the PPO benefit options. While the plan typically undergoes a biennial valuation, pursuant to paragraph 12 of GASB 45, a new valuation must be performed if there are significant changes to the plan since the previous valuation. The October 1, 2014 valuation date was used to develop results for the fiscal years ending September 30, 2015 and 2016,, as part of the plan's biennial valuation. 6'8 City of College Station, Texas Notes to the Financial Statenrients altaagaltrrYwaLlackstatutfattLaillfal.,..„__ F. Deferred Com pensati on Plan The City offers its employees a deferred compensation plan created in accordance with internal Revenue Code CRC') 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. Ali amounts of compensation deferred under the plan (until paid or made available to the em ployee. or other beneficiary)were pieced in trust for the exclusive benefit of the participants and the beneficiaries. This action is in accordance with changes made to IRC Section 457. The City is not the 457 Plan Administrator or trustee and the assets of the plan are not reportable in the City's basic'finani.;ial statements, 6. Commitments and Contingencies Construction Cortrimitinentsi The City has contractual commitments of $10„084,969 in the Copilot Ptojects Funds, $3,866,037 in the VVater Fund, $1,681„227 in the Wastewater Fund and $1„463,488 in the Electric Fund. 'These commitments are or construction of various projects and will be funded primarily from longterm 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 the ultimate outcome or liability, if any, of the city with respect to the various proceedings. Management believes any unfavorable outcomes would not be material. Financial Hedging According to the Public Funds Investment Act,a municipality that owns a municipal electric utility that is engaged in the distribution and sale of electric energy or natural gas to the public may enter into a hedging contract and related security and insurance agreements in relation to fuel oil, natural gas, coal, nuclear fuel, and electric, energy to protect against loss due to price fluctuations. In fiscal year 2014,the City signed a contract with the City of Garland under which the City of Garland will serve as the qualified scheduling entity that will formulate and discuss the hedging strategies and options available to the City to manage its power supply portfolio and price. The City has not yet engaged in any hedging activity. H. Bonds Available for Sale Authorized general obligation bonds available for future issue are as follows: Year Unissued Authorized Amount Public Buildings '1984 $ 700,000 .1 Street Improvements 1984 500,000 Municipal Complex Improvements 2003 3,655,000 Library Expansion 2008 7,885,000 Parks and Recreation 2008 645,000 Street Improvements 2008 18,290,900 Total Contains projects which may have been completed or abandoned;therefore,these bonds are not likely lo ever be issued, 439 City of College Station, Texas Notes to the Financial Statenients ___ECILLIftELY,A.Y.OildaadilthaQatgrALQL.11.211.112_ Revenue Bond Coverage All the net revenues of the Electric, VVater 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 ail 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 Maxim urn 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 rernainin,g life of the boritts divided by the remaining life of the. bonds. The City is in compliance with these requirements. J. Subsequent Events As of March 18,2016,the date the financial statements were available to be issued, the City had not experienced any subsequent events that could have a material effect on the financial statements. 70 City of College Station, Texas APPENDIX c FORMS OF OPINIONS OF BOND COUNSEL LAW M C A.LI.,„ P R„I<HU S'f & HORT(, N I" iLU CONGRESS AVENUE ?'"I 7 NORTH HARWOOD '700 N,8'1.hAARY'S stREET FiLHYE 1600 'SUITE'UtX) 1525 AU S FIN,'FE XAS 713 7 DI-32111, DALLAS,TEXAS 75201-6587 ;SAN ANTONIO,TEXAS 7820E0503 FI F,PEIONF, 612 oitkirlOr, TELEPHONE:: 214 754-9200 EFI r-rp ,iE i'. E,.2 ROO lEACSIMI{ 717 451.0871 EACSIMLE: 711 75,1-7250 rACE.WEEti' 210 225,2984 Proposed Formo'f Opinion of Bond Counsel. „Yid:W(1116(111y ilICIbliaWingibrin 11411 be deill'eledby 111CCUIL ParkhlirS1 Horton L,1„„„P , Bowl Cott n,N „ upon ihc de ii,,eryqfihV 8 n elfs, ass rnil/goo IT a.,,w illf eh op cv i ufacts or Invy,. Cn'v OF COLLEGE S'I.A IO N EXAS ,C7E NE AL OBLIGATI 0 IN iMPROVEM ENT ,AN 1)) REF tJJN NC BoNos, SERI Es 201.6 IN THE AGGREC;ATE 'PRINCIPAL AMOUNT ,ii,„!4F$40;890,000 AS BOND COUNSEL FOR THE CITY OF COLLEGE STATION, TEXAS, (the "Issuer") in connection with the issuance of the General Obligation Improvement and Refunding Bonds described above (the "Bonds"),, we have examined into the legality and validity of the Bonds, which bear interest from the dates and mature on the dates, and are subject to redemption, in accordance with the terms and conditions stated in the text of the Bonds and in the ordinance of the Issuer authorizing the issuance and sale of the Bonds (the "Ordinance"). Terms used herein and not otherwise defined shall have the meaning given in the Ordinance. WE HAVE EXAMINED the applicable and pertinent provisions of the Constitution and laws of the State of Texas, a transcript of certified proceedings of the Issuer, and other pertinent instruments authorizing and relating to the issuance and sale of the Bonds, including executed Bond Number T-1. BASED ON SAID EXAMINATION, IT IS OUR OPINION that the Bonds have been duly authorized, issued and delivered in accordance with law; and that except as may be limited by laws applicable to the Issuer relating to bankruptcy, reorganization and other similar matters affecting creditors' rights generally or by general principles of equity which permit the exercise of judicial discretion, the Bonds constitute valid and legally binding obligations of the Issuer; and that ad 'valorem taxes sufficient to provide for the payment of the interest on and principal of said Bonds have been levied and pledged for such purpose, within the limit prescribed by law, all as defined and provided in the Ordinance. IT IS FURTHER OUR OPINION that, except as discussed below, under the statutes, regulations, published rulings, and court decisions existing on the date of this opinion, for federal income tax purposes, the interest on the Bonds (i) is excludable ,from the gross income of the owners thereof and (ii) the Bonds will not be treated as "specified private activity bonds" the interest on which would be included as an alternative minimum tax preference item under section 57(a)(5) of the hlternlil Revenue Code of 1986 (the "Code"). Except as stated above, we express. 00 Opirki0O as ti„"k any other federal, stale, or local tax consequences of acquit ing, carrying„ Owning, or disposing of the Bonds. IN EXPRESSING THE AFOREMENTIONED OPINIONS, we have relied on, certain representations, the accuracy of which we have not independently vedfied, inellAing the report of Grant Thornton LLP certifying as to the sufficiency of the amounts deposited to the escrow fund to pay, when due„ the principal of and interest on the .refunded Obligations, and assume compliance with certain covenants legal ding the use and investment of the proceeds of the Bonds and the use of the property financed and refinanced therewith. 'We call your attention to the fact that if such representations are determined to be inaccurate or if the Issuer fails to comply with such covenants, interest on the Bonds may become includable in gross income retroactively to the date 1,:rf issuance of the Bonds, WE CALL YOUR. ATTENTION TO THE FACT that the interest on tax-exempt obligations, such as the Bonds, is included iii a corporation's alternative minimum taxable income for purposes of determining the alternative minimum tax imposed on corporations by section 55 of the Code. WE EXPRESS NO OF as to any insurance policies issued with respect to the payments due for the principal of and interest on the Bonds, nor as to any such insurance policies issued in the future. OUR SOLE ENGAGEMENT in connection with the issuance of the Bonds is as Bond Counsel for the Issuer, and, in that capacity, we have been engaged by the Issuer for the sole purpose of rendering an opinion with respect to the legality and validity of the Bonds under the Constitution and laws of the State of Texas, and with respect to the exclusion from gross income of the interest on the Bonds for federal income tax purposes, and for no other reason or purpose. The foregoing opinions represent our legal judgment based upon a review of existing legal authorities that we deem relevant to render such opinions and are not a guarantee of a result. We have not been requested to investigate or verify, and have not independently investigated or verified any records, data, or other material relating to the financial condition or capabilities of the Issuer, or the disclosure thereof in connection with the sale of the Bonds, and have not assumed any responsibility with respect thereto. We express no opinion and make no comment with respect to the marketability of the Bonds and have relied solely on certificates executed by officials of the Issuer as to the current outstanding indebtedness of, and assessed valuation of taxable property within, the Issuer. Our role in connection with the Issuer's Official Statement prepared for use in connection with the sale of the Bonds has been limited as described therein. OUR OPINIONS ARE BASED ON EXISTING LAW, which is subject to change. Such opinions are further based on our knowledge of facts as of the date hereof. We assume no duty. to update or supplement our opinions to reflect any facts or circumstances that may thereafter come to our attention or to reflect any changes in any law that may thereafter occur or become effective. Moreover, our opinions are not a guarantee of result and are not binding on the Internal Revenue Service (the "'Service"); rather, such opinions represent our legal judgment based upon our review of existing law and in reliance upon the representations and covenants referenced above that we deem relevant to such opinions. The Service has an ongoing audit. program to determine compliance with rules that relate to whether interest on state or local obligations is includable in gross income 1*()r GA"lera I income tax purposes. No assurance can Ire g,iven whether or not the SerVice will commence an audit of the 'Bonds. If an audit is commenced, in accordance with its current published procedures the Service is likely to treat the Issuer as the taxpayer. We observe that the Issuer has covenanted not to take any action, or omit to take any action within its control, that 'if taken Of omitted, respectively, may result in the treatment of interest on the Bonds as includable in gross income for federal income tax purposes. Respectfu II y, LAW OFF II E & T 0 NI [:;) GOO CONGRESS AVENUE 711 NORTH HARWOOD NO N.Si,MAR V$4 STREET SURE 1800 &PE 0110 SUITE 1525 rUNI,TEXAS 7E701-:32,141 DALLAS.TEXAS 75201.65E17 SAN ANTONIO.TEXAS'70205-3503 TI-I IlFF_ 517 t7l1'300,5 IREPIIDNIF: 214 751-5/1131 I Euirilow 210 225-2800 rncsimIkE, 512 472-1)147 IAI O 2.1.1 P1,141250 FA4";,5.141E: 210 225-2984 Proposed Form of Opinion of and Cil Au opinion in ,$?1,i11toolicillv the J011owillg'brill will be delii^e,4td Porkhirrsr d Horton LA.Pral Counsel, upon Ja delivery of the Cerrifirvies, ossuining no nuno-ial clionges in filers or louv, CITY O _OLLECL S'f Art 0 IN',TEN:AS RT IFIC.AT ES OF OBLIGATION, SERIES 20116 N THE AGGREGATE PRIM:IP/U., ,..11,,,MOUNT OF $25„720,000 AS BOND COUNSEL FOR THE CITY OF COLLEGE STATION, TEXAS, (the "Issuer") in connection with the issuance of the Certificates of Obligation described above (the 'Certificates")„ we have examined into the legality and validity of the Certificates, which bear interest from the dates and mature on the dates, and are subject to redemption, in accordance with the terms and conditions stated in the text of the Certificates and in the ordinance of the Issuer authorizing the issuance and sale of the Certificates (the "Ordinance"). Terms used herein and not otherwise defined shall have the meaning given in the Ordinance. WE HAVE EXAMINED the applicable and pertinent: provisions of the Constitution and laws of the State of Texas, a transcript of certified proceedings of the Issuer, and other pertinent instruments authorizing and relating to the issuance and sale of the Certificates, including executed Certificate Number T-1. BASED ON SAID EXAMINATION, IT IS OUR OPINION that the Certificates have been duly authorized, issued and delivered in accordance with law; and that except as may be limited by laws applicable to the Issuer relating to bankruptcy, reorganization and other similar matters affecting creditors' rights generally or by general principles of equity which permit the exercise of judicial discretion, the Certificates constitute valid and legally binding obligations of the Issuer; and that ad valorem, taxes sufficient to provide for the payment of the interest on and principal of said Certificates have been levied and pledged for such purpose, within the limit prescribed by law, and that the Certificates are additionally secured by and payable from a limited pledge (not to exceed $1,000) of the surplus revenues from the operation of the Issuer's combined municipal electric light and power, waterworks and sewer system remaining after payment of all operation and maintenance expenses thereof, and all debt service, reserve and other requirements in connection with all of the Issuer's revenue obligations (now or hereafter outstanding) that are secured by a lien on all or any part of the net revenues of the Issuer's combined municipal electric light and power, waterworks and sewer system, all as defined and, provided, in the Ordinance, IT IS FURTHER 01,,IR OPINION that, except as (bSCUSSed below, under the statmes„ regulations, published rulings, .,ind court decisions existing on the date of this opinion, iIbr federal income tax purposes,, the interest on the Certificates (i) is excludable from the gross income of the owners thereof and (ii) the Certificates will not be treated as "specified private activity bonds" the interest on which would be included as an alternative minimum tax preference item under section 57(3)(5) of the Internal Revenue Code of 1986 (the "Code"), Except as stated, above, we express no opinion as to any other federal state, or ,l1 ical tax consequences a acquiring, carrying, owning, or disposing of the Certificates. IN 'EXPRESSING THE AFOREMENTIONED OPINIONS, we have relied on, certain representations, the accuracy of which we have not independently verified, and assume compliance with certain covenants regarding du,: use and investment of the proceeds of the C'ertificatcs and the use of the property financed therewith, We call your attention to the fact that if such representations are determined to be inaccurate or if the Issuer fails to comply with such covenants, interest on the Certificates may become includable in gross income retroactively to the date of issuance of the Ccrti,licates. WE CALL YOUR ATTENTION TO THE FACT that the interest on tax-exempt obligations, such as the Certificates, is included in a corporation's alternative minimum, taxable income I,1:,ir purposes of determining the alternative minimum tax imposed on corporations by section 55 of the Code, WE EXPRESS NO OPINION as to any insurance policies issued with respect to the. payments due for the principal of and interest on the Certificates, nor as to any such insurance policies issued in the future. OUR SOLE ENGAGEMENT in connection with the issuance of the Certificates is as, Bond Counsel for the Issuer, and, in that capacity, we have been engaged by the Issuer for the sole purpose of rendering an opinion with respect to the legality and validity of the Certificates under the Constitution and laws of the State of Texas, and with respect to the exclusion from gross income of the interest on the Certificates for federal income tax purposes, and for no other reason or purpose. The foregoing opinions represent our legal judgment based upon a review of existing legal authorities that we deem relevant to render such opinions and are not a guarantee of a result. We have not been requested to investigate or verify, and have not independently investigated or yen lied any records, data, or other material relating to the financial condition or capabilities of the Issuer, or the disclosure thereof'in connection with the sale of the Certificates,. and have not assumed any responsibility with respect thereto. We express no opinion and make no comment with respect to the marketability of the Certificates and have relied solely on, certificates executed by officials of the Issuer as to the current outstanding indebtedness of, and, assessed valuation of taxable property within, and the sufficiency of the pledged revenues of, the Issuer, Our role in connection with the Issuer's Official Statement prepared for use in connection with the sale of the Certificates has been limited as described therein. OUR OPINIONS ARE IASED ON EXISTING LAW, which is subject to change. Such. opinions are further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinions to reflect any facts or circumstances that may thereafter come to our attention or to reflect any changes in any law that may thereafter occur Or become effective Moreover, our opinions are not a guarantee of result and arc not binding on the Internal Revenue Service (the "Service"); rather, such opinions represent our legal judgment based upon our review of existing law and in reliance upon the representations and covenants referenced above that we deem relevant to such opinions The Service has an ongoing audit program to determine compliance with rules that relate to whether interest, on state or local obligations is includable in gross income for federal income tax purposes. No assurance can be given whether or not the Service will commence an audit of the Certificates. If ,EID audit is commenced, in accordance with its current published procedures the Service is likely to treat the Issuer as the iaxpayer, We observe that the Issuer has covenanted not to take any action, or omit to take any action within its control, that if taken or omitted, respectively, may result in the treatment of interest on the Certificate's as includable in gross income lbr federal income tax puiToses. Respectfully,