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2014 Comprehensive Annual Financial ReportComprehensive Annual Financial Report Year Ended September 30, 2014 CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2014 ISSUED BY: DEPARTMENT OF FINANCE CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2014 TABLE OF CONTENTS Exhibit Page INTRODUCTORY SECTION Letterof Transmittal................................................................................................................................ i-vii GFOA Certificate of Achievement........................................................................................................... viii OrganizationalChart............................................................................................................................... ix Listof Principal Officials.......................................................................................................................... x FINANCIAL SECTION Independent Auditor's Report................................................................................................................. 1-2 Management's Discussion and Analysis................................................................................................ 3-13 BASIC FINANCIAL STATEMENTS: Statement of Net Position............................................................................................................... A-1 14 Statementof Activities.................................................................................................................... A-2 15 Balance Sheet - Governmental Funds...........................................................................................A-3 16 Reconciliation of the Governmental Funds Balance Sheet to the Statement ofNet Position..............................................................................................................................A-4 17 Statement of Revenues, Expenditures and Changes in Fund Balances - GovernmentalFunds....................................................................................................................A-5 18 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of the Governmental Funds to the Statement of Activities............................................A-6 19 Statement of Fund Net Position - Proprietary Funds......................................................................A-7 20-21 Statement of Revenues, Expenses and Changes in Fund Net Position - ProprietaryFunds.........................................................................................................................A-8 22 Statement of Cash Flows - Proprietary Funds................................................................................A-9 23-24 Statement of Fiduciary Assets and Liabilities................................................................................A-10 25 Notes to the Financial Statements..................................................................................................... 26-59 REQUIRED SUPPLEMENTARY INFORMATION: Budgetary Comparison Schedule - General Fund.......................................................................... B-1 60 Notes to the Required Supplementary Information........................................................................... 61 Texas Municipal Retirement System - Analysis of Funding Progress - LastTen Plan Years..................................................................................................................... B-2 62 Wichita Falls Firemen's Relief and Retirement Fund - Analysis of Funding Progress....................B-3 63 Wichita Falls Retiree Health Care Plan- Analysis of Funding Progress ......................................... B-4 64 CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2014 TABLE OF CONTENTS (CONT'D.) Exhibit Page COMBINING FINANCIAL STATEMENTS: Nonmajor Governmental Funds: CombiningBalance Sheet......................................................................................................... C-1 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................. C-2 Budgetary Comparison Schedule — Community Development Block Grant Fund .................... C-3 Budgetary Comparison Schedule — Section 8 Housing Fund ................................................... C-4 Budgetary Comparison Schedule — Home Investment Partnership Agreement Fund .............. C-5 Budgetary Comparison Schedule — Hotel/Motel Tax Fund ....................................................... C-6 Budgetary Comparison Schedule — Golf Fund.......................................................................... C-7 Budgetary Comparison Schedule — MPEC Fund......................................................................C-8 Budgetary Comparison Schedule — Debt Service Fund............................................................ C-9 Nonmajor Enterprise Funds: Combining Statement of Net Position........................................................................................ D-1 Combining Statement of Revenues, Expenses and Changes in Fund Net Position ................. D-2 Combining Statement of Cash Flows........................................................................................ D-3 Internal Service Funds: Combining Statement of Net Position........................................................................................ E-1 Combining Statement of Revenues, Expenses and Changes in Fund Net Position ................. E-2 Combining Statement of Cash Flows........................................................................................ E-3 Agency Fund: Statement of Changes in Assets and Liabilities........................................................................ F-1 Component Units: Combining Statement of Net Position........................................................................................G-1 Combining Statement of Activities.............................................................................................G-2 SUPPORTING SCHEDULES: Combined Schedule of Bonded Debt and Interest Maturities......................................................... H-1 Combined Schedule of Bonds Payable.......................................................................................... H-2 Debt Service Coverage — Revenue Bonds..................................................................................... H-3 Capital Assets Used in the Operation of Governmental Funds - Schedule By Function and Activity............................................................................................... H-4 Capital Assets Used in the Operation of Governmental Funds - Schedule of Changes By Function and Activity............................................................................ H-5 Regional Airport Fund — Capital Assets and Accumulated Depreciation ........................................ H-6 Kickapoo Airport Fund — Capital Assets and Accumulated Depreciation ....................................... H-7 Transit Fund — Capital Assets and Accumulated Depreciation...................................................... H-8 Stormwater Drainage Fund - Capital Assets and Accumulated Depreciation ................................ H-9 Sanitation Fund — Capital Assets and Accumulated Depreciation ................................................ H-10 65 66 67 68 69 70 71 72 73 74 75 76-77 78 79 80 81 82 83 84 85-90 91 'A 93 94 95 96 97 98 CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2014 TABLE OF CONTENTS (CONT'D.) Exhibit Page Water and Sewer Fund — Capital Assets and Accumulated Depreciation ..................................... H-11 99 Waterpark Fund — Capital Assets and Accumulated Depreciation ................................................ H-12 100 Fleet Maintenance Fund — Capital Assets and Accumulated Depreciation ................................... H-13 101 Duplicating Services Fund — Capital Assets and Accumulated Depreciation ................................ H-14 102 Information Technology Fund — Capital Assets and Accumulated Depreciation ........................... H-15 103 Wichita Falls Economic Development Corporation — Capital Assets and Accumulated Depreciation........................................................................................................... H-16 104 STATISTICAL SECTION (UNAUDITED) Net Position By Component — Last Ten Fiscal Years..................................................................... 1-1 105 Changes in Net Position — Last Ten Fiscal Years.......................................................................... 1-2 106-107 Fund Balances, Governmental Funds — Last Ten Fiscal Years ..................................................... 1-3 108 Changes in Fund Balances, Governmental Funds — Last Ten Fiscal Years .................................. 1-4 109 Tax Revenues By Source, Governmental Funds — Last Ten Fiscal Years .................................... 1-5 110 Assessed and Estimated Actual Value of Taxable Property — Last Ten Fiscal Years .................... 1-6 111 Direct and Overlapping Property Tax Rates — Last Ten Fiscal Years ............................................ 1-7 112 Principal Property Taxpayers — Current Year and Nine Years Ago ................................................ 1-8 113 Property Tax Levies and Collections — Last Ten Fiscal Years ....................................................... 1-9 114 Ratios of Outstanding Debt by Type — Last Ten Fiscal Years ....................................................... 1-10 115 Ratios of General Bonded Debt Outstanding — Last Ten Fiscal Years ......................................... 1-11 116 Direct and Overlapping Governmental Activities Debt................................................................. 1-12 117 Computation of Legal Debt Margin — Last Ten Fiscal Years......................................................... 1-13 118 Pledged Revenue Coverage — Water and Sewer Revenue Bonds — LastTen Fiscal Years.................................................................................................................. 1-14 119 Demographic Statistics — Last Ten Fiscal Years........................................................................... 1-15 120 Principal Employers — Current Year and Ten Years Ago.............................................................. 1-16 121 Full -Time Equivalent City Government Employees by Function/Program — LastTen Fiscal Years.................................................................................................................. 1-17 122 Operating Indicators by Function/Program — Last Ten Fiscal Years ............................................. 1-18 123 Capital Asset Statistics by Function/Program — Last Ten Fiscal Years ......................................... 1-19 124 Graphics: Cashand Investments............................................................................................................... J-1 125 TotalBonds Payable................................................................................................................. J-2 126 General Obligation Bonds Payable........................................................................................... J-3 127 Revenue Bonds Payable........................................................................................................... J-4 128 GeneralFund Equity................................................................................................................. J-5 129 Comparison of Tax Levy and Collections................................................................................. J-6 130 Revenues by Source — FYE 9/30/14......................................................................................... J-7 131 Expenditures by Function — FYE 9/30/14.................................................................................. J-8 132 General Governmental Revenues (General Fund Only)........................................................... J-9 133 General Governmental Expenditures (General Fund Only) .................................................... J-10 134 Introductory Section OFFICE OF THE CITY MANAGER plmev,qA'Ie,,q. o&bewt, , March 23, 2015 The Honorable Mayor, Members of the City Council, City Manager and Citizens of Wichita Falls, Texas I am pleased to submit herewith, the Comprehensive Annual Financial Report (CAFR) of the City of Wichita Falls, Texas for the fiscal year ended September 30, 2014. The purpose of this report is to provide the City Council, City Manager, citizens and other interested parties with detailed information concerning the financial condition of the City of Wichita Falls. In addition, this report provides assurance that the City presents fairly its financial position as verified by independent auditors. COMPREHENSIVE ANNUAL FINANCIAL REPORT The CAFR of the City of Wichita Falls, Texas, for the year ended September 30, 2014, was prepared according to accounting principles as promulgated by the Governmental Accounting Standards Board (GASB). The financial statements and related notes have been audited by the independent audit firm of Edgin, Parkman, Fleming & Fleming, PC, whose report is included herein. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe the data, as presented, are accurate in all material aspects; that they are presented in a manner designed to fairly set forth the financial position and results of operation of the City as measured by the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain understanding of the City's financial activities have been included. The CAFR continues to present financial data using the reporting model promulgated by GASB Statement No. 34. This reporting model changed governmental financial reporting by incorporating government -wide financial statements. The Finance Department believes that this presentation provides better information to users of the report, and it requires management to provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of a Management's Discussion and Analysis (MD&A). The MD&A can be found immediately following the independent auditors' report and is designed to complement this transmittal letter and should be read in conjunction with it. GENERAL INFORMATION - CITY OF WICHITA FALLS, TEXAS The City of Wichita Falls is located in the south-central United States in north -central Texas. Wichita Falls is linked to major southwestern, western, and mid -western cities by Interstate 44, U.S. Highways 82, 281, 277, 287, and Texas State Route 79. The city is approximately 130 miles northwest of the Dallas/Fort Worth Metroplex, 15 miles from the Red River that marks the Texas/Oklahoma border, and 125 miles south of Oklahoma City. The city is located in the cross -timbers area of the gently rolling north -central plains and is dissected by the Wichita River. Due to the city's geographic location, Wichita Falls serves as a regional economic hub for north Texas and south central Oklahoma. Wichita Falls is the county seat of Wichita County and the major population center in North Texas. The economy is based on mineral production, retail trade, manufacturing, agribusiness, and government installations. Principal sources of agricultural income include cattle, cotton and wheat. Wichita Falls is home to Sheppard Air Force Base, which operates the Euro-NATO jet pilot training program. The city's major university is Midwestern State University. The city is also home to a branch of Vernon College, a fully accredited CITY OF WICHITA FALLS 1300 7t" St., PO Box 1431, Wichita Falls, TX 76307 t: (940) 761.7404 f: (940) 761.8833 community college. Principal manufacturers within the area include metal fabrication, industrial and commercial equipment, engine components, flexible packaging, and assorted plastic, glass and fiberglass. North Texas State Hospital -Wichita Falls Branch, Midwestern State University, James V. Allred Prison and Sheppard Air Force Base are also large employers located within the city. The City operates a Multi -Purpose Events Center, which includes a coliseum, exhibit hall, and an agricultural arena/show barn. The 2014 population for Wichita Falls, as estimated by the City, is 104,552, an increase of 0.3% from the 2010 Census estimates, and an increase of 8.62% over the 2000 population. CITY SERVICES AND ORGANIZATION OF THE GOVERNMENT The City of Wichita Falls utilizes a Council -Manager form of government and is organized under the Constitution and Laws of the State of Texas. The City Council is comprised of five members elected from separate districts, and a Mayor and one member elected by the citizens at -large. The City Council appoints the City Manager, City Attorney, Municipal Court Judge and City Clerk. All other staff members work under the direction of the City Manager. The City provides on a continuing basis a full range of basic municipal services including: public safety (police, fire and building inspection); highways, streets and engineering; health and welfare services; parks, recreation and cemeteries; library services; public improvements; planning and zoning; and general administrative services. In addition, the City provides water, sewer, sanitation and transportation services for its citizens. ECONOMIC CONDITION AND ACTIVITY Over the past few decades, Wichita Falls has successfully diversified its economy to include new manufacturing, government, medical services, retail and service related commerce. This diversification is in addition to the more typical North Texas industries of agriculture, and oil and gas production. The Wichita Falls MSA houses a robust manufacturing sector, with many companies having employment in excess of 100 persons. This sector of the economy generates almost $271 million in annual payroll, representing approximately 9% of total employment within the city, and accounts for more than $1.2 billion in gross sales annually. Wichita Falls is also a nexus of international investment. Three area manufacturing facilities are foreign -owned, representing France, Sweden, and Germany. The city is the economic hub of a 60-mile radius trade area, populated by an estimated 379,400 people. Of that population, an estimated 240,000 are currently in the workforce and look to Wichita Falls for their employment, shopping, entertainment, educational, cultural and health care needs. Being the largest community within 100 miles, Wichita Falls boasts a larger retail trade than a community its size would normally enjoy. Many national retailers and restaurants have found Wichita Falls to be a superb location. A few years ago, the national recession considerably affected the local economy. During that time, four local manufacturing companies closed, eliminating almost 1,200 jobs and several other companies reduced their workforce by 10 to 20 percent. In response to this downturn in the local economy, efforts were made to nearly double the economic development marketing campaigns and develop a community -wide branding, marketing and public relations campaign. Additionally, the City and the Wichita Falls Economic Development Corporation have been aggressive over the last few years in granting economic development incentives for primary job creation. Since 2010, 18 projects have been approved for incentive funding with the potential for creating and/or retaining over 1,800 jobs. Several of these projects have invested in the local economy resulting in the addition or retention of hundreds of jobs. Others are still in the early phases of their expansion plans and the results remain to be seen. Although no major plant developments were announced during the 2013-14 fiscal year, several industries made investments in the local economy to create and/or retain hundreds of primary jobs. The projects that occurred over the 2013-14 fiscal year are outlined below: FedEx - the sale of 18.5 acres of land in the Business and Industrial Park for $370,000 to allow FedEx to relocate and expand the size of their facilities in Wichita Falls. M • PPG Reclaimed Water Conveyance Facilities Project — a funding amount of up to $1,145,000 for the retention of primary jobs through the construction of facilities for the transmission of reclaimed water from the Northside Effluent Pump Station to PPG Industries, Inc.'s industrial facility. This project will allow PPG to use approximately 200,000 gallons per day of reclaimed water at lower prices for the cooling water supply in its manufacturing process. • Lone Star Milk Producers Recruitment Project — a funding amount up to $116,000 of costs for expenditures to recruit 20 primary jobs at the company's proposed headquarters facility in Wichita Falls. Lone Star Milk Producers plans to relocate their main headquarters operations to Wichita Falls. • Cryovac Printer Installation Project - a funding amount up to $304,280 to allow Cryovac to expand its manufacturing capabilities and recruitment of 34 jobs through the installation of a new laser package printer. The Press and Laminator machines combined would cost around $5,500,000 and the total investment, including ancillary equipment would be $7,000,000. • Arrow Manufactured Products Downhole Tool Expansion Project — a funding amount up to $208,250 to recruit 35 primary jobs through an expansion of their existing facilities in Wichita Falls through the addition of a contract with a Brazilian company to manufacture a down -hole completion tool for the oil industry. 4A Economic Development Sales tax funds have also been used to assist with activities of the Military Affairs Committee, a regional organization established a few years ago to work directly with Sheppard Air Force Base (SAFB), Air Education and Training Command, the Chief of Staff for the Air Force, and our Congressional, State and Local elected officials. This Committee was formed to increase the value of SAFB, strengthen community development and build a stronger economy. The City, SAFB and surrounding communities have also conducted a Joint Land Use Study (JLUS), which was a cooperative planning initiative to promote compatible community growth that supports military training and operational missions. The inter jurisdictional partnership resulted in the identification of actions that can be taken jointly by the community and installation to promote compatible development and address current and future encroachment. The goal of compatibility planning is to promote an environment where both entities (military and civilian) can coexist successfully. Implementation of the JLUS Plan will begin in 2015. Small business manufacturing represents the fastest growing sector of the economy in terms of the number of new businesses. With many area manufacturers having less than 50 employees, small manufacturers represent a vital link in the economy. Companies in food, beverage and clothing are flourishing in Wichita County. The value of construction permits is also an indication of economic activity in the community. Residential permits totaled $39,845,679 during the 2013-14 fiscal year, which is a decrease of $13,040,087, or 25% from the prior year. The value of commercial construction permits totaled $61,127,897, which is a decrease of $26,994,123, or of 31 % from the prior fiscal year. However, the prior year figures were the highest in both categories for the last five fiscal years. Additionally, several commercial construction permits issued were above $1 million in value which directly impacts local construction contractors, and often times results in additional secondary jobs. Those permits include: • Our Lady Queen of Peace — a total of 20,284 sq. ft. with an estimated value of $2,750,000. • Grace Church Chapel — a total of 17,350 sq. ft. with an estimated value of $5,500,000. • Taco Casa — a total of 3,650 sq. ft. with an estimated value of $1,100,000. • Fed Ex Distribution Center — a total of 151,088 sq. ft. with an estimated value of $16,573,535. • Dental Office — a total of 9,116 sq. ft. with an estimated value of $1,200,000. • My Dentist — a total of 4,566 sq. ft. with an estimated value of $1,200,000. • Medical Offices — a total of 13,434 sq. ft. with an estimated value of $2,925,000. • The Reserves Multi -Family & Clubhouse — a total of 46,849 sq. ft. with an estimated value of $4,572,000. • Sherwood Forest Multi -Family — a total of 13,000 sq. ft. with an estimated value of $2,737,056. Another indicator of local economic performance is the retail sales tax. During the 2013-14 fiscal year, the City generated $30,131,558 in retail sales taxes, which was $715,071, or 2.43% more than in the prior fiscal year. MAJOR INITIATIVES For The Year. The City Council continues to identify programs to meet citizens' requests for services and to safeguard the environment. Over the last 4 years, the City of Wichita Falls has been in an extreme drought. Beginning in 2011 and continuing to date, the City has experienced record setting temperatures and extremely low rainfall which has decreased the City's water supply from nearly maximum lake capacity to approximately 22%. The City's drought contingency plan requires water restrictions and surcharges for excessive water use when the lake capacity gets below 50% (Stage II -Drought Warning). In May 2014, the City entered Stage V-Drought Catastrophe at 25% of lake capacity. Essentially, all outside use of potable water, with the exception of watering home foundations once per week, has been eliminated, decreasing water consumption by almost 56%. Additionally, in August 2013, the City issued $13 million in Combination Tax and Revenue Certificates of Obligation to construct an emergency above ground pipeline from the River Road Wastewater Treatment Plant to convey 7.5 million gallons per day of treated effluent directly to the Cypress Water Treatment Plant for treatment and distribution. This pipeline and pump station is complete and the City has been using this system in our potable water supply since July 2014. These extreme water conservation measures and the water reuse project have reduced consumption from average daily use of 25 million gallons per day to approximately 11 million gallons per day. Additionally, in February 2014 the City entered into an agreement with a contractor to begin a weather modification effort, aka cloud seeding. Cloud seeding is a practice that has been ongoing across the state and the country for the past several decades. There are 9 active regions in the state of Texas that have adopted cloud seeding as a water management strategy and numerous other states also have active cloud seeding operations. The process involves evaluation of a cloud to determine if it is ripe for seeding, and if so, then a seeding agent is applied to the cloud to produce nuclei for rain drops. This agent attracts water vapor and causes rain to form. Statistics and data collected over the past several decades have allowed seeding operations to be perfected to the point that is has been proven to increase rainfall by an average 10% to 15%. In July 2014, the City also entered into an agreement with a contractor to perform a pilot study on water evaporation suppression at Lake Arrowhead. Extensive work has been performed throughout the last few decades to develop a reliable method to reduce water lost to evaporation. Recently, a new product called WaterSavr has been developed and used on larger water bodies in Las Vegas, Nevada. Studies have indicated that the product can reduce evaporation losses by up to 30%. The product is a biodegradable lime based product combined with sterile alcohols. The product forms a thin film of material over the water surface which traps the water vapor and keeps it from exiting the reservoir. This product has been approved by the EPA and the National Science Foundation (NSF) for use on water supply reservoirs. It was also approved by the Texas Commission on Environmental Quality. Construction of the McNeil Avenue Drainage Project began in the summer of 2014 at an estimated cost of $6.5 million, with the State of Texas paying for $2.1 million. The City is responsible for the remaining cost, which is being paid for from the City's Storm Water Utility Fund. The project is generally described as the construction of an underground drainage system including concrete box culverts, storm water inlets, and collection piping. The project will also relocate existing water and sewer facilities along McNeil Avenue to avoid conflicts with the new drainage improvements. TxDOT's share of the project includes the enclosure of a portion of the open channel along SW Parkway at the McNeil/Southwest Parkway intersection to facilitate the construction of a right turn lane on SW Parkway as well as signal improvements at this intersection. The limits of the project are from Pool Street to Southwest Parkway. This project will remove 30 homes from the 100 year floodplain and eliminate to continuous nuisance flooding in the area. iv In November 2014, the City began operations of a new Airport Terminal at the Regional Airport. The total cost for the terminal, apron, and new parking facilities was approximately $29 million. Funding for the project consisted of nearly $15 million in Federal Aviation Grants and 20-Year Certificates of Obligation. The debt service for the 20-Year Certificates is being paid from annual entitlement funds received from the Federal Aviation Administration, operating income in the Regional Airport Fund, and annual grants from the 4A and 413 Sales Tax Corporations and the General Fund. The City, through a private contractor, is currently installing exterior signage throughout the community as part of the City's Wayfinding Project. This project consists of vehicular signage, pedestrian, facility and trail signage, city roadway entry identification features, and water tower identification with the City's new logo. The cost of the project is approximately $1 million, with the General Fund financing $750,000 and the 4B Sales Tax Corporation funding the remaining $250,000. Two significant projects were completed at the Kay Yeager Coliseum in an effort to attract more events to the facility, particularly sporting events. Over $820,000 was expended to install a state of the art LED Video Scoreboard, featuring four LED displays approximately 9 1/2' X 17', an LED display ring approximately 2 1/2' high X 57' long, two stationary and one portable camera and all the software and hardware for a complete system. The 413 Sales Tax Corporation approved $750,000 for this project and the General Fund financed the remaining amount. The second project consisted of the purchase of an artificial turf system allowing for multiple types of sports such as indoor soccer and arena football. The cost of this new turf system was $92,000, which was financed exclusively with 4B Sales Tax Funds. For The Future. To continue addressing our water supply needs, the City authorized the issuance of $3 3.5 million of 30-Year Combination Tax and Revenue Certificates of Obligation to finance the cost of engineering and construction associated with the City's Permanent Indirect Potable Water Reuse Project (IPR Project). This project will ultimately replace the Emergency Direct Potable Water Reuse System and involve the construction of a pump station and pipeline to convey treated wastewater effluent from the River Road Wastewater Treatment Plant to Lake Arrowhead. The project is estimated to convey up to 10 mgd of effluent, thereby adding additional water supply to City's water resources. Design and construction of this system is estimated to take approximately 3 years to complete. Near the completion of the project, the pipe being used for the temporary Direct Potable Reuse Project will be dismantled and relocated to the Permanent IPR Project. Until that time, the City plans to continue using the DPR Project, which saves the City approximately 5 mgd of water. The Certificates of Obligation were issued through the Texas Water Development Board as part of their Clean Water State Revolving Loan Program. This financing mechanism provides loans to municipalities for wastewater projects at 1.2% lower interest rates than what the City would receive in the private market. For this particular issue, the State Loan Program is anticipated to save the City approximately $ 8 million over the 3 0-year period. The City also authorized an engineering firm to update the City's Long Range Water Supply Plan and evaluate potential short term water supply projects that could increase supply over the next few years, should this drought persist. That study has been completed and identified Lake Ringgold as the next long term water supply project for the City. Work has begun toward the permitting of this lake development project. The study also identified two projects that may produce approximately 5 million gallons per day within a two year construction period. More analysis is currently underway on these short term projects, and if proven reliable, they would be undertaken if this drought persists much longer. The City recently awarded a project in the amount of $1.2 million for the installation of a new Aqua Loop water slide at Castaway Cove Water Park. This slide is being financed with $250,000 of 4B Sales Tax Funds and $950,000 in reserves of the Water Park Fund. Construction of the slide is nearing completion and is expected to be operational at the opening of the park for the 2015 season. In November 2014, the City awarded a bid for Phase 1 of the Hike and Bike Trail from Seymour Highway to Lucy Park in the amount of $1.3 million. This project is generally described as the construction of a concrete hike and bike trail with amenity stations/shelters in the Wichita Bluff Nature Area off of Seymour Highway, and associated work. The project is the first of two phases in connecting the Circle Trail along Seymour Highway to Lucy Park. The project is being funded with remaining bond funds from a prior bond issuance and special park revenue funds. u Recently, the City authorized an Energy Services Company to perform an Investment Grade Audit on the feasibility of changing our current meter reading program from a manual operation to one using Advanced Metering Infrastructure Technology (AMI). AMI systems automatically measure, collect, and assist with analyzing water usage through two-way radio communication media on a pre -defined schedule (i.e. every few hours). The systems consist of smart meters capable of producing digital output automatically and sending readings from the meters to data collectors/radio repeaters on a fixed tower system and return data to the utility billing office for billing and data analysis. More expensive systems can even sensor water distribution systems to assist with leak detection on City owned water mains. Some of the benefits of AMI Systems include reduced customer service calls, improved customer service bill analysis, improved water conservation and leak detection, more accurate meter readings, empower customers to monitor their own water usage, email notifications of high water use, immediate theft detection of water use, and improved low flow meter reading accuracy. A preliminary study indicated that such a system could produce enough savings and additional revenue to pay the annual debt service of a project costing $18 million over a 20-year period. In March 2015, the City established a second generation Tax Increment Financing District for the downtown area. The City's original TIF Zone in the downtown was successful in providing assistance for redevelopment in the downtown, but expired in 2008. FINANCIAL INFORMATION In developing and evaluating the City's accounting system, consideration is given to the adequacy of internal control as deemed appropriate by the City Manager. Internal control is designed to provide reasonable, but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition; and (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the evaluation of costs and benefits requires estimates and judgments by the City Manager. All internal control evaluations occur within the above framework. The City believes that its internal control adequately safeguards assets and provides reasonable assurance of proper recording of financial transactions. The Annual Operating Budget is proposed by the City Manager and approved by the City Council following public discussion. Budgetary control is maintained at the class level by the Finance Department within each division by the encumbrance of estimated purchase amounts prior to the release of purchase orders to vendors. Purchase orders which result in an overrun of class level balances are not released until additional appropriations are made available. In instances when budgetary transfers are necessary, management control of the operating budget is maintained at the fund and department level. Transfers within a department of the same fund must be approved by the City Manager. Transfers across departments or funds must be approved by the City Council. Unencumbered appropriation balances lapse at year end and are not carried forward to new budget periods. Open encumbrances are reported as reservations of fund balance at September 30, 2014, and related appropriations are carried forward to the new fiscal year through a supplemental budgetary allocation. In September 2012, the City adopted a fund balance policy for the General Fund, Water/Sewer Fund, and the Sanitation Fund. The policy requires the City to maintain at least 20% of expenditures in unassigned fund balance in the General Fund, 17% of expenditures (less debt service expenses) in the Water/Sewer Fund, and 15% of expenditures in the Sanitation Fund. These financial statements reflect that the policy has been followed in the General Fund and Sanitation Fund. Persisting drought conditions and water restrictions resulted in much lower water sales this fiscal year, causing the City to fall below the stated reserve requirements in the Water/Sewer Fund. However, the City Council approved substantial retail water rate increases in August 2014 in an effort to replenish these reserves over the next several years as outlined in the policy. The City also maintains an informal policy to limit tax supported debt to no more than 5% of total assessed property value or $1,500 per capita. As of September 30, 2014, the City's tax supported debt was approximately $54 million, which is 1.19% of the taxable value of property, and $516 per capita. vl OTHER INFORMATION Independent Audit The City Charter requires an annual audit of the books of account, financial records, and transactions of all administrative departments of the City by Certified Public Accountants. The accounting firm of Edgin, Parkman, Fleming & Fleming, PC was selected by the Mayor and City Council to satisfy this charter requirement. The auditors' report on the basic financial statements and combining fund statements and schedules is included in the financial section of this report. In addition to meeting the requirements set forth in the City Charter, the audit also was designed to meet the requirements of the federal Single Audit Act Amendments of 1996 and related OMB Circular A-133, and the State Single Audit Act. These reports are issued under separate cover. Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Wichita Falls for its Comprehensive Annual Financial Report for the fiscal year ended September 30, 2013. This was the 19th consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program's requirements, and we are submitting it to GFOA to determine its eligibility for another certificate. Acknowledgments My appreciation is extended to the various elected officials, city manager, department heads and employees responsible for the fair presentation of the CAFR and for contributing to the sound financial position of the City of Wichita Falls. The City of Wichita Falls has been blessed with a group of persons who appreciate and respect principles of fiscal restraint and propriety. In particular, I would like to acknowledge the special efforts of the Department of Finance employees who contributed directly to the development of this report. The continuing support of City Council and City Manager, who remain committed to fiscal integrity and financial leadership, is likewise appreciated. Respectfully submitted, Jim Dockery Vll Government Finance Officers Association Certificate of Achievement for Excellence in Financial • i i City of Wichita Falls I A V For its Comprehensive Annual Financial Report for the Fiscal Year ended September 30, 2013 kklvjog; Executive Director/CEO CITY OF WICHITA FALLS, TEXAS LIST OF PRINCIPAL OFFICIALS SEPTEMBER 30, 2014 Title Name Mayor Glenn Barham Mayor Pro-Tem Michael Smith City Council Member Ben Hoover City Council Member Annetta Pope -Dotson City Council Member Brian Hooker City Council Member Tim Ingle City Council Member Tom Quintero City Manager Darron Leiker City Attorney Kinley Hegglund Municipal Court Judge Larry Gillen City Clerk Tracy Norr Assistant City Manager / Director of Community Development Kevin Hugman Director of Aviation, Traffic and Transportation John Burrus Assistant City Manager / Chief Financial Officer Jim Dockery Director of Public Health Lou Kreidler Police Chief Manuel Borrego Fire Chief Jon Reese Director of Parks and Recreation Jack Murphy Director of Public Works and Public Utilities Russell Schreiber Director of Multi -Purpose Events Center Bob Sullivan x Financial Section Independent Auditor's Report EDGIN, PARKMAN, FLEMING & FLEMING, PC CERTIFIED PUBLIC AccoUNTANTS MICHAEL D. EDGIN, CPA 4110 KELL BLVD., SECOND FLOOR P.O. Box 750 DAVID L. PARKMAN, CPA, CFE WICHITA FALLS, TExAs 76307-0750 A. PAUL FLEMING, CPA PH. (940) 766-5550 m FAx (940) 766-5778 J. MARK FLEMING, CPA Independent Auditor's Report on Financial Statements The Honorable Mayor and Members of the City Council City of Wichita Falls, Texas We have audited the accompanying financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Wichita Falls, Texas (the City) as of and for the year ended September 30, 2014, 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 Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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 City'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 City'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 financial statement presentation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City as of September 30, 2014, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, the Budgetary Comparison Schedule — General Fund, the schedules on the Texas Municipal Retirement System, the Wichita Falls Firemen's Relief and Retirement Fund, and the Wichita Falls Retiree Health Care Plan be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, supporting schedules, and statistical section are 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 supporting schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the 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 supporting schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued under separate cover our report dated March 23, 2015, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Respectfully submitted, Edgin, Parkman, Fleming & Fleming, PC March 23, 2015 2 Management Discussion and Analysis OFFICE OF THE CITY MANAGER plmev,qA'Ie,,q. o&bewt, , City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2014 Management's discussion and analysis provides a narrative overview of the financial activities and changes in the financial position of the City of Wichita Falls, Texas, for the fiscal year ended September 30, 2014. It is offered here by the management of the City to the readers of its financial statements. Readers should use the information presented here in conjunction with additional information furnished in our letter of transmittal, which can be found in the Introductory Section of this Comprehensive Annual Financial Report. Financial Highlights The assets of the City of Wichita Falls exceeded its liabilities at September 30, 2014, by $399,283,025 (net position). Of this amount, $28,361,918 (unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors. Net position for the City increased by $12,242,431 over the prior year. This increase can be attributed principally to several factors: (1) net income in the Regional Airport Fund due to the receipt of approximately $11 million in grant funds from the Federal Aviation Administration to construct the new Airport Terminal and Apron; (2) net income of nearly $2.1 million in the Sanitation Fund principally due to a delay in expenditures for a landfill shop and miscellaneous equipment that is encumbered, higher than anticipated revenue at the landfill, salary savings due to turnover in several positions, and various projects finishing under budgeted expenditures; (3) an improvement of nearly $2.4 in the Storm Water Utility Fund to allow unrestricted net position to grow in anticipation of the ensuing McNeil Drainage Improvement Project; (4) an improvement of over $650,000 in the net position of the Information Technology Fund to allow unrestricted net position to grow in anticipation of future improvements to public safety communication systems. Some of this increase in net position is offset by a reduction of over $2.2 million in the Water/Sewer Fund due to much lower water sales as conservation efforts continue to save the City's water supply. At September 30, 2014, the City's governmental funds reported combined ending fund balances of $3313421536. Of this amount, $14,425,316, or 43.26%, is available for spending at the government's discretion, (unassigned fund balance). At the end of the current fiscal year, unassigned fund balance for the General Fund was $14,886,199 or 22.18% of total General Fund expenditures. During the 2013-14 fiscal year, the City's total debt decreased by $10,791,351. This decrease is a result of the City not issuing any new debt and continuing to retire outstanding General Obligation Bonds, Water and Sewer System Revenue Bonds, and Combination Tax and Revenue Bonds. 3 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2014 (continued) Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The reporting focus is on the City as a whole and on individual major funds. It is intended to present a comprehensive view of the City's financial activities. The basic financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report contains other supplementary information in addition to the basic financial statements. Government -wide Financial Statements The government -wide financial statements, which can be found on pages 14-15 of this report, include the Statement of Net Position (Exhibit A-1) and the Statement of Activities (Exhibit A-2). These statements are designed to provide readers with a broad overview of the City's finances in a manner similar to aprivate-sector business. Both are prepared using the economic resources focus and the accrual basis of accounting; meaning that all current year's revenues and expenses are included regardless of when cash is received or paid. Thus, revenues and expenses are reported in these statements for some items that will result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but not used vacation leave). The Statement of Net Position presents information on all of the City's assets and liabilities, including capital assets and long-term obligations. The difference between the City's assets and liabilities is reported as net position. Over time, the increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. Other indicators of the City's financial position should be taken into consideration, such as the change in the City's property tax base and condition of the City's infrastructure (e.g., roads, traffic signals, water and sewer lines, etc.), in order to more accurately assess the overall financial condition of the City. The Statement of Activities presents information showing how the City's net position changed during the most recent fiscal year. It focuses on both the gross and net costs of the government services. This statement includes all current year revenues and expenses. The Statement of Net Position and the Statement ofActivities divide the City's activities into three types: Governmental activities — Most of the City's basic services are reported here, including police, fire, parks and recreation, public works, health, traffic and transportation, community development and planning, duplicating services, information technology, health insurance claims, and general administration and finance. The Multi -Purpose Events Center and Champions Golf Course are also reported as governmental activities. Property taxes, sales taxes, franchise fees, and various grant funds provide the majority of financing for these activities. Business -type activities — Activities for which the City charges fees to customers to pay most or all of the cost of a service it provides are reported as business -type activities. The City's business -type activities include water and wastewater treatment and distribution, solid waste collection and disposal, regional and municipal airports, transit system, storm water drainage improvements, fleet maintenance services and water park operations. 11 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2014 (continued) Component Units — Four legally separate organizations, for which the City is financially accountable, are included in these statements as discretely presented component units. These organizations include the Wichita Falls Economic Development Corporation, Wichita Falls 4B Sales Tax Corporation, Wichita Falls Reinvestment Zone #2, and the Wichita Falls Reinvestment Zone #3. Fund Financial Statements The City of Wichita Falls, like other state and local governments, uses fund accounting to provide more detailed information about the City's most significant funds, not the City as a whole. 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. Some funds are required to be established by state law or bond covenants. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental Funds — These funds are used to account for the majority of the City's activities, which are essentially the same functions reported as governmental funds in the government -wide statements. However, unlike the government -wide financial statements, governmental fund financial statements are reported using an accounting method identified as the modified accrual basis of accounting, which measures cash and all other financial assets that can be readily converted to cash. The governmental fund statements focus on near -term inflows and outflows of expendable resources, as well as expendable resources available at the end of the fiscal year for future spending. Such information may be useful in evaluating a government's near -term financing requirements. The focus of the governmental funds financial statements is narrower than that of the government -wide financial statements. Therefore, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide statements. By doing so, readers may better understand the long-term impact of the government's short 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. The reconciliation explains the differences between the government's activities reported in the government -wide statements and the information presented in the governmental funds financial statements. The City of Wichita Falls maintains 15 individual governmental funds. Information for the General Fund and the Airport Improvement Grant Fund is presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances because they are considered major funds of the City. Data for the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the non -major governmental funds are provided in the Combining Financial Statement Section of this report. The Basic Governmental Funds Financial Statements can be found on pages 16-19 of this report. City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2014 (continued) Proprietary Funds — When the City charges customers for services it provides, whether to outside customers or to other units within the City, the activities are generally reported in proprietary funds. The City of Wichita Falls maintains two different types of proprietary funds: enterprise funds and internal service 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 its water and sewer operations, sanitation collection and disposal services, regional and municipal airports, transit operations, storm water utility district, and water park operations. • Internal service funds are an accounting device used to report activities that provide supplies and services to other City programs, such as fleet maintenance, print shop services, information technology, and employee benefit trust. Because these services benefit both governmental and business -type functions, they have been allocated between governmental and business -type activities in the government -wide financial statements. Proprietary fund financial statements provide the same type of information as the business -type activities shown in the government -wide financial statements, only in more detail and include some of the internal service fund -type activities. The proprietary fund financial statements provide separate information for the Water and Sewer Fund, the Sanitation Fund and the Regional Airport Fund since they are considered to be major funds of the City. The non -major proprietary funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for each of the non -major proprietary funds are provided in the Combining Financial Statement Section of this report. Fiduciary Funds — Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City's own programs. The accounting method used for fiduciary funds is much like that used for proprietary funds. Agency funds are a component of fiduciary funds and are used to account for situations where the City's role is purely custodial, such as receipt, temporary investment and remittance of fiduciary funds to individuals, private organizations or other governments. The City maintains one fiduciary fund. This fund is an agency fund used to account for property that has been abandoned or unclaimed pending escheatment to the State of Texas. 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. These notes can be found on pages 26-59 of this report. 2 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2014 (continued) Government -Wide Financial Analysis The City's combined net position was $399,283,025 as of September 30, 2014, an increase of $1212421431, or 3.16% from the prior year. Using the Tables below, an analysis of the net position of the City can be made. The largest portion of the City's net position, $353,745,333, or 88.60%, is reflected in capital assets (land and improvements, buildings, infrastructure, machinery and equipment), less any related debt used to acquire those assets that is still outstanding. The City uses these assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the City reports its capital assets net of related debt, the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City's net position, $17,175,774, or 4.30%, represents resources that are subject to external restrictions on how they may be used. The remaining balance of net position, $28,361,918, or 7.10%, may be used to meet the government's ongoing obligations to citizens and creditors. Net Position (in thousands) Governmental Business -type Activities Activities Total 2014 2013 2014 2013 2014 2013 Current and Other Assets $ 43,721 $ 531896 $ 50,573 $ 611845 $ 94,294 $ 1151741 Capital Assets 173,893 175,097 342,677 315,382 516,570 490,479 Total Assets 217,614 228,993 393,250 377,227 610,864 606,220 Deferred Outflows of Resources - - 2,330 2,531 2,330 2,531 Long Term Liabilities 65,288 689298 1281368 135,427 193,656 203,775 Other Liabilities 13,077 9,467 7,178 8,519 20,255 17,986 Total Liabilities 78,365 77,765 135,546 143,946 213,911 221,711 Net Position: Net Investment in Capital Assets 128,169 138,319 225,576 198,540 353,745 336,859 Restricted 5,290 6,248 111886 1102 17,176 18,130 Unrestricted 5,790 6,661 22,572 25,390 28,362 32,051 Total Net Position 139 249 151 228 $260,034 235 812 399 283 387 040 7 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2014 (continued) CHANGES IN NET POSITION (in thousands) Governmental Business -type Activities Activities Total 2014 2013 2014 2013 2014 2013 Revenues: Program Revenues: Charges For Services $ 91035 $ 91517 $ 501856 $ 51,743 $ 59,891 $ 611260 Operating Grants and Contributions 10,837 11,157 1,830 3,787 1207 141944 Capital Grants and Contributions 12,957 4,394 11018 1,339 13,975 5,733 General Revenues: Property Taxes 29,784 299107 - - 299784 291107 Sales Taxes 22,398 221062 - - 22,398 221062 Other Taxes/Fees 7,561 7,274 - - 7,561 7,274 Investment Earnings 33 53 12 28 45 81 Miscellaneous 880 636 138 149 1,018 785 Total Revenue 93,485 84,200 53,854 57,046 147,339 141,246 Expenses: Administrative Services 13,874 12,782 - - 131874 12,782 Police 231195 22,768 - - 239195 22,768 Fire 14,3 87 141226 - - 149387 141226 Parks and Recreation 5,574 51580 - - 5,574 51580 Accounting/Finance 924 924 - - 924 924 Community Development 6,498 6,729 - - 6,498 61729 Public Works 8,156 7,748 - - 8,156 71748 Health 5,166 5,168 - - 5,166 5,168 Traffic and Transportation 2,618 2,757 - - 2,618 2,757 MPEC 4,302 4,137 - - 4,302 41137 Interest and Fees on Long-term Debt 1,992 21123 - - 11992 21123 Regional Airport - - 856 655 856 655 Kickapoo Airport - - 11424 1,496 11424 11496 Transit - - 21416 1,939 2,416 11939 Sanitation - - 9,333 9,236 9,333 91236 Water and Sewer - - 321365 30,136 32,365 30,136 Stormwater Drainage - - 560 430 560 430 Waterpark - - 1,456 1,397 1456 1,397 Total Expenses 8606 84,942 48,410 45,289 1351096 130,231 Increase (Decrease) in Net Position Before Transfers 6,799 (742) 51444 11,757 129243 111015 Transfers (I 8,778) (11474) 181778 1,474 - - Increase (Decrease) in Net Position (11,979) (21216) 24,222 13,231 12,243 111015 Net Position - Beginning of Year 151,228 1535444 2351812 224,619 387,040 3781063 Prior Period Adjustment - - - (2,038) - (21038) Net Position - End of Year 139 249 S151 $260,034 S235812 399 283 S387MO H City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2014 (continued) Governmental Activities — Governmental Activities reduced the City's net position by $11,979,457 principally because proceeds previously received from Certificates of Obligation were transferred from the Airport Construction Fund to the Regional Airport Fund for the construction of a new airport terminal and aircraft apron. Business -Type Activities — Business -type Activities increased the City's net position by $24,221,888, which was 197.85% of the total growth in the City's net position. Over $23 million of this increase in net position can be attributed to fund transfers from FAA Airport Improvement Grant Funds and bond proceeds to the Regional Airport Fund for construction costs related to the new Regional Airport Facility. The Sanitation Fund shows an increase of net position of nearly $2.1 million principally due to a delay in expenditures for a landfill shop and miscellaneous equipment that is encumbered, higher than anticipated revenue at the landfill, salary savings due to turnover in several positions, and various projects finishing under budgeted expenditures. The Storm Water Utility Fund shows improvement of nearly $2.4 in net position to allow unrestricted net position to grow in anticipation of the ensuing McNeil Drainage Improvement Project. Over $650,000 is due to an increase in net position in the Information Technology Fund to allow unrestricted net position to grow in anticipation of future improvements to public safety communication systems. Some of these increases in net position are offset by a reduction of over $2.2 million in the Water/Sewer Fund due to much lower water sales as conservation efforts continue to save the City's water supply. Financial Analysis of the City's Funds Governmental Funds — The focus of the governmental funds is to provide information on near - term inflows, outflows and balances of expendable resources. Such information is useful in assessing the City's financing requirements. In 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. As of September 30, 2014, the City's governmental funds reported combined fund balances of $33,342,536, which is a decrease of $13,874,119 from the prior year. Virtually all of this decrease is attributable to the expenditure of bond proceeds from the Airport Construction Fund during the fiscal year. The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the General Fund was $14,886,199, a reduction of $1,340,398 from the prior year. As a measure of the General Fund's liquidity, it may be useful to compare both the unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 22.19% of total General Fund expenditures, while the total fund balance represents 25.36% of total General Fund expenditures. Proprietary Funds —The financial statements of the proprietary funds provide information for two types of funds: the business type (enterprise) funds and the internal service funds. The accounting principles applied to proprietary funds are similar to that of the private sector. Consequently, with the exception of the allocation of internal service fund net income or loss, the net position and changes in net position of the enterprise funds in these financial statements are identical with the net position and changes in net position reflected in the business type activities in the city-wide presentation. 9 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2014 (continued) The City's internal service funds include the Fleet Maintenance Fund, Employee Benefit Trust Fund, Duplicating Services Fund and the Information Technology Fund. At the close of September 30, 2014, the net position for the City's internal service funds was $24,295,913, a decrease of $578,371. The Fleet Maintenance Fund reflects a reduction of $1,857,235 in net position principally because depreciation expenses were higher than equipment replacement expenses. The Employee Benefit Trust Fund reflects an increase of $642,116 in net position because revenues exceeded the cost of employee and retiree health claims during the year. The Information Technology Fund reflects an increase of $652,911 in net position as the City continues to increase this Fund's unrestricted net position to finance future improvements to our public safety communication systems. General Fund Budgetary Highlights The final amended expenditure budget for the General Fund, including transfers out, was increased by $1,967,744 from the original adopted budget. The reasons for this increase in appropriations can be briefly summarized as follows: • Approximately $959,000 of prior year encumbrances for street repair projects was carried forward to the 2013-14 amended budget. • A total of $810,000 was budgeted to assist the Water/Sewer Fund with needs for cloud seeding and water evaporation suppression efforts, and a long range water supply study. • The City Council approved the use of $200,000 to partially finance the cost of a new video scoreboard for the Kay Yeager Coliseum. Actual revenues in the General Fund for the 2013-14 fiscal year were $65,528,748, which was $737,365 above final budgeted figures. Sales tax receipts accounted for approximately $95,000 of this amount. Natural gas franchise revenue accounted for approximately $305,000 due to higher natural gas prices. An increase in mixed beverage tax revenue accounted for $75,000 which can be attributed to a rate change made by the State for the calculation of mixed beverage taxes. Actual expenditures in the General Fund for the 2013-14 fiscal year were $67,125,525, which was $2,112,612 below budgeted expenditures. Almost all of this variance was due to large encumbrances for street repairs, emergency tree watering, traffic control equipment and street lights that weren't liquidated by the close of the fiscal year that will be expended in the 2014-15 fiscal year. 10 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2014 (continued) Capital Asset and Debt Administration Capital Assets — The City's investment in capital assets for its governmental and business -type activities as of September 30, 2014 amounts to $516,569,674 (net of accumulated depreciation). This investment in capital assets includes land, buildings, equipment, infrastructure and construction in progress. Major capital asset events during this fiscal year included the following: • Construction in progress of the new Regional Airport Facilities • Construction in progress of the Direct Potable Water Reuse Project • Construction in progress of the McNeil Avenue Drainage Improvement Project • Completion of the Wastewater Treatment Plant Anaerobic Digester Project • Completion of the City's new Downtown Travel Center • Construction in progress of new slide at Castaway Cove Water Park • Construction in progress of the Wayfinding Signage Project • New Scoreboard at the Multi -Purpose Events Center • Street Rehabilitation and Utility Improvement Projects Capital Assets, net of Accumulated Depreciation (in thousands) Governmental Business -type Activities Activities Total 2014 2013 2014 2013 2014 2013 Land $ 1003 $ 10,722 $ 9,042 $ 9,042 $ 191725 $ 191764 Land Betterments 17,682 18,193 331679 299474 519361 471667 Buildings, Systems and Improvements 521252 53,930 24309 238,805 2961141 2921735 Infrastructure 82,384 801543 - - 821384 801543 Machinery and Equip 101107 11,500 2,674 21771 12,781 141271 Furniture and Fixtures 2 3 - - 2 3 Motor Vehicles - - 15,340 16,906 151340 16,906 Construction in Progress 783 206 38,053 18,384 38,836 18,590 Totals 173 8,93 S175097 342 677 315 3 82 S516.570 490 479 Additional information on the City's capital assets can be found in Note 7 on pages 41-43 of this report. 11 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2014 (continued) Long Term Debt — At the end of the current fiscal year, the City of Wichita Falls had a total bonded debt, notes and capital leases outstanding of $180,905,617. During the 2013-14 fiscal year, the City did not issue any new long term debt obligations or refinance any outstanding bond issues, and continued to retire outstanding General Obligation Bonds, Water and Sewer System Revenue Bonds, and Combination Tax and Revenue Bonds. As of September 30, 2014, Moody's Investor's Service had assigned a credit rating of Aa2 for the City's General Obligation Bonds and a rating of Al for the City's Water and Sewer System Revenue Bonds. Standard & Poor's had assigned a credit rating of AA for the City's General Obligation Bonds and a rating of AA- for its Water and Sewer System Revenue Bonds. Outstanding Debt at Year -End (in thousands) Governmental Business -type Activities Activities Total 2014 2013 2014 2013 2014 2013 General Obligation Bonds $ 41680 $ 5,492 $ 11930 $ 1,930 $ 61610 $ 71422 Combination Tax and Revenue Bonds 491302 511571 241285 27,888 739587 791459 Utility System Revenue Bonds - - 95,724 99,212 95,724 991212 Capital Lease Payable 31511 31833 1,000 1,262 4,511 51095 Notes Payable - - 474 509 474 509 Total $ 57,493 $ 60,896 $ 123,413 $ 13001 $ 1801906 $ 1911697 The City is permitted by its Home Rule Charter to levy taxes up to $2.25 per $100 of assessed valuation for general governmental services, including the payment of principal and interest on long-term debt. The combined tax rate to finance general governmental services for the year ended September 30, 2014, was $.63526 per $100, which means that the City has a tax margin of $1.61474 per $100, and could generate up to $73,438,583 additional tax revenue a year from the present assessed valuation of $4,548,012,853 before the limit is reached. The current ratio of general bonded debt outstanding to the assessed value of all taxable property is 1.18%. Additional information about the City's long-term debt can be found in Note 13 on pages 51-54 of this report. 12 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2014 (continued) Economic Factors and Next Year's Budget and Rates Total 2014-15 operating revenues, including transfers in from other funds, are budgeted at $165,407,761, which is an increase of $6,338,158, or 3.98% from the 2013-14 adopted budget. In the 2014-15 budget, sales taxes in the General Fund are projected to generate $23,009,663, an increase of $975,322, or 4.43% from the prior year adopted budget. It should be noted that this projection was based upon an estimate of 2013 -14 actual receipts and a growth rate of 2.00%. The Property Tax is the largest source of revenue in the City's budget and is also relied heavily upon to provide general City services. The property tax base, as certified by the Wichita County Appraisal District, is $4.62 billion, an increase of $71.8 million, or 1.58% from the prior year. This is the sixth consecutive year that the property tax base has shown very slight growth or remained flat. The property tax rate was maintained at the prior rate of $0.63526 per $100 of taxable property value. The 2014-15 budget increased the property tax rate from $0.63526 to $0.65526 per $100 of taxable property. This rate is estimated to generate $1,364,383 in additional property tax revenue for the General Fund during the 2014-15 fiscal year and will be used entirely to provide increases to the City's pay plans that have remained significantly unchanged for several years. The City maintains a reserve account in the General Fund to be used for major emergencies such as a widespread tornado, large legal liabilities or important one-time expenditures. The City's fund balance policy established a goal of maintaining 20% of expenditures in unassigned General Fund balance. Current figures indicate that the City is exceeding this fund balance amount in the General Fund. As a result, the 2014-15 budget included the use of $1,517,270 of General Fund balance for numerous one-time projects and programs. The prior adopted budget included appropriations of $1,400,575 for similar one-time projects, but only 553,000 was used due to higher than budgeted revenues and lower than budgeted expenditures. The budget provided for an average increase of 53% to retail water rates that was approved on August 5, 2014. This rate increase was needed to provide for approximately $1.4 million of anticipated annual debt service on the Indirect Potable Water Reuse Project, set aside $1 million annually for a future water supply project that will be determined, and to adjust for significantly lower water sales due to lower water consumption/demand. Requests for Information This financial report is designed to provide a general overview of the finances of the City of Wichita Falls for all those with an interest in the government's finances. Questions concerning any of the information provided in this report, or request for additional financial information, should be addressed to the City Finance Department, 1300 Seventh Street, Wichita Falls, Texas 76301. 13 Basic Financial Statements EXHIBIT A-1 CITY OF WICHITA FALLS, TEXAS STATEMENT OF NET POSITION SEPTEMBER 30, 2014 Primary Government Governmental Business -type Component Activities Activities Total Units Assets Cash and cash equivalents $ 33,866,835 $ 1457117200 $ 487578,035 $1878757700 Receivables (net): Taxes and assessments 873,717 - 873,717 - Customer and trade - 5,8427269 5,842,269 - Government agencies 111265,252 11264,820 12,530,072 1,260,174 Other 11406, 753 165,191 1,571,944 - Internal balances (7,775,110) 71775,110 - - Inventory 215,522 1,945,530 23161,052 - Prepaid items 86,432 285,231 371,663 - Other assets 212,761 - 2121761 - Restricted assets: Cash and cash equivalents 31568,494 18,5837808 22,1527302 - Capital assets not being depreciated 1114657899 47,0957168 5815617067 1,469,797 Capital assets net of accumulated depreciation 16214277255 29515817352 458,0081607 756741 Total assets 21716137810 39312497679 610,8631489 2273627412 Deferred Outflows of Resources Deferred losses on bond refundings - 21330,160 2,3301160 - Liabilities Accounts payable - trade 51057,557 257577289 7,8141846 187685 Accrued payroll 11542,286 410,716 1,9531002 - Accrued interest payable 3301011 799,153 1,1291164 - Payable to government agencies 723,910 72,634 7961544 - Estimated health claims payable 595,540 - 5951540 - Other liabilities 41789,893 2742410 5,0641303 - Unearned revenue 37,236 - 371236 - Customer deposits - 218642032 238641032 - Long-term liabilities: Portion due or payable within one year 51975,127 85219,947 1471951074 - Portion due or payable after one year 5913137328 12051477555 179,4601883 - Total liabilities 7813647888 13515457736 213,9101624 18,685 Net Position Net investment in capital assets 128,168,873 225,576,460 353,745,333 2,226,538 Restricted for: Perpetual care (nonexpendable) 9645154 - 9641154 - Debt service (expendable) 647,697 11,885,698 12,533,395 - Capital projects (expendable) 1,362,885 - 1,362,885 - Federal grant programs (expendable) 21285,619 - 2,285,619 - Tourism (expendable) 29,721 - 29,721 - Unrestricted 5,789,973 22,571,945 28,361,918 20,117,189 Total net position $ 139,248,922 $ 260,034,103 $ 399,283,025 $ 22,343,727 See accompanying notes to the basic financial statements. 14 N a F— m x W r CD Ln M r CO N L0 I,- (.0 1-t I- N O O 0) M N C (n O O LC) N O O7 07 C � cM 0 �= 00 f` co N (M N r M O It O_ C O It N r I- M r O CO Co f� f� O N O N O N N U O f� CO I� O CO O O r Lf) CO m It I� ti r Lf') I` M N CO Cl O) w w O� O r Lf) M'IT � M N N CO N CO M CO r M I- N I- 00 It It It C0 O M Cl N O 00 00 m O co O N O " 00 CV I� O O OD r CO r- Cl! 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C0 0 o (6 M O a) C (n U (B �~ N (n to d fn Li 2 m m> (n to Q n N i31 N O ca U (� O O C �, >o Q d I i d Q U a 2 A Y H cA (A p O (x0 V aoi (a N R U C E 'i IL a m _Q (� O IZ U E O 0 U U) H U Z Z Lo r EXHIBIT A-3 CITY OF WICHITA FALLS, TEXAS BALANCE SHEET - GOVERNMENTAL FUNDS SEPTEMBER 30, 2014 Airport Total Improvement Nonmajor Governmental General Grant Governmental Funds Assets Cash and cash equivalents $ 12,040,509 $ - $ 19,579,984 $ 31,620,493 Receivables (net): Taxes and assessments 704,188 - 169,529 873,717 Other City funds 7,393,960 - - 7,393,960 Government agencies 3,868,706 4,939,152 2,457,394 11,265,252 Other 1,219,212 - 187,575 1,406,787 Inventory 142,613 - 72,909 215,522 Prepaid items 38,280 - 47,664 85,944 Other assets - - 212,762 212,762 Total assets $ 25,407,468 $ 4,939,152 $ 22,727,817 $ 53,074,437 Liabilities Accounts payable $ 1,369,641 $ 83,447 $ 3,436,940 $ 4,890,028 Accrued payroll 1,404,684 - 107,573 1,512,257 Payable to other City funds - 51128,601 1,253,686 6,382,287 Payable to government agencies 621,398 - 102,512 723,910 Other liabilities 3,643,501 187,987 958,693 4,790,181 Claims and judgments payable 90,618 - - 90,618 Unearned revenue - - 37,236 37,236 Total liabilities 7,129,842 5,400,035 5,896,640 18,426,517 Deferred inflows of resources Unavailable revenues 1,260,643 - 44,741 1,305,384 Fund balances Nonspendable: Inventory and prepaid items 180,992 - 120,573 301,565 Restricted for: Perpetual care - - 964,154 964,154 Debt service - - 602,956 602,956 Capital projects - - 9,951,925 95951,925 Federal and state grant programs - - 2,285,619 25285,619 Tourism - - 29,721 29,721 Committed for: Golf course - - 106,888 106,888 Multi -Purpose Events Center - - 144,065 144,065 Local projects - - 2,580,535 2,580,535 Assigned for: Subsequent year's expenditures 1,949,792 - - 1,949,792 Unassigned 14,886,199 (460,883) - 14,425,316 Total fund balances 17,016,983 (460,883) 16,786,436 33,342,536 Total liabilities, deferred inflows of resources and fund balances $ 25.407.468 $ 4.939.152 $ 22.727.817 $ 53.074.437 See accompanying notes to the basic financial statements. 16 EXHIBIT A-4 CITY OF WICHITA FALLS, TEXAS RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2014 Total fund balances - governmental funds (Exhibit A-3) Amounts reported for governmental activities in the Statement of Net Position (Exhibit A-1) are different because: Capital assets used in governmental activities are not financial resources and therefore not reported in the funds. Capital assets at year-end consist of: Gross capital assets Related accumulated depreciation $ 33, 342, 536 $ 301,461,506 128,436,840 173,024,666 Property taxes receivable and municipal court fines are not available to pay for current period expenditures and therefore are reported as deferred inflows of resources in the funds. Long-term liabilities are not due and payable in the current period and therefore not reported as liabilities in the funds. Long-term liabilities at year-end consist of: Bonds payable Capital lease payable Accrued vacation and sick leave Claims and judgments payable Accrued interest 1,305,384 53, 982, 370 31510,950 71613,033 37,128 330,011 (65,473,492) Internal service funds are used by management to charge the costs of duplicating services, information technology and health insurance claims to the individual funds. The assets and liabilities of these internal service funds are included with the governmental activities. 51584,808 Internal service funds are used by management to charge the costs of central garage services to the individual funds. The assets and liabilities of this fund are included with the business -type activities. This amount represents the governmental activity portion of the central garage activity. (8,534,980) Total net position - governmental activities (Exhibit A-1) $ 139,248,922 See accompanying notes to the basic financial statements. 17 EXHIBIT A-5 CITY OF WICHITA FALLS, TEXAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2014 Revenues Taxes Charges for services Licenses and permits Fines and forfeitures Intergovernmental revenue Contributions Miscellaneous revenue Total revenues Expenditures Administrative services Police Fire Parks and recreation Accounting/finance Community development Public works Health Traffic and transportation Multi -Purpose Events Center Capital outlay Debt service - principal Debt service - interest and paying agent fees Total expenditures Excess of revenues over (under) expenditures Other Financing Sources (Uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balances - beginning Fund balances - ending Airport Total Improvement Nonmajor Governmental General Grant Governmental Funds $ 57,124, 524 $ - $ 2,615,021 $ 59, 739, 545 2,582,658 - 748,525 3,331,183 2,048,293 - - 2,048,293 21209,697 - 193,097 214025794 8,537 10,630,478 714421783 18,081,798 276,224 - 5,435,966 5,712,190 1,278,815 - 2,363,340 3,642,155 65, 528, 748 10, 630,478 18, 798, 732 94, 957, 958 12,035,548 - 1,311,481 13,347,029 21,343,577 - 196,243 21,539,820 13,972,673 - 112,546 14,085,219 4,871,353 - 326,238 5,197,591 831,313 - - 831,313 1,816,232 - 41742, 832 6,559,064 5,266,380 - 346,727 5,613,107 23714,462 - 2,343,484 5,057,946 13894,231 - 3801018 25274,249 - - 3,536,661 3,536,661 213791756 - 2,850,513 5,230,269 - - 350001000 3,000,000 - - 25342,331 25342,331 6711251525 - 21,4891074 88, 614, 599 (1,596,777) 10,6307478 (2,690,342) 653435359 23871,815 - 137711698 16,643,513 (1,828,148) (10,822,073) (24,210,770) (36,860,991) 15043,667 (10,822,073) (10,439,072) (20,217,478) (553,110) (191,595) (13,129,414) (13,874,119) 17,570,093 (269,288) 29,915,850 471216,655 $ 17,016,983 $ (460,883) $ 16,786,436 $ 33,342,536 See accompanying notes to the basic financial statements. 18 EXHIBIT A-6 CITY OF WICHITA FALLS, TEXAS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2014 Net change in fund balances - total governmental funds (Exhibit A-5) Amounts reported for governmental activities in the Statement of Activities (Exhibit A-2) are different because: Capital outlays are reported in governmental funds as expenditures. However, in the Statement of Activities, the cost of those assets are allocated over their estimated useful lives as depreciation expense. The net difference between the two is as follows: $ (13,874,119) Capital outlay during the year $ 5,260,869 Depreciation expense for the year 6,361,333 (1,100,464) Proceeds from the sale of capital assets are recorded as revenues when received in the governmental funds. In the Statement of Activities, the difference between the proceeds and the book value of the capital asset is reported as a gain (loss) from sale. (170,563) Because property tax receivables and municipal court receivables will not be collected for several months after the City's fiscal year ends, they are not considered 'available' revenues and are deferred in the governmental funds. Deferred inflows decreased by this amount this year. (56,502) Repayment of long-term debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. Bond and capital lease principal payments in 2013-14 were: 3,402,621 Included in long-term debt are obligations for accrued vacation and sick leave, and claims and judgments payable. The changes in these obligations are not included in the governmental fund financial statements, but are included in the government -wide financial statements. The changes in these long-term obligations were: Accrued vacation and sick leave (392,939) Claims and judgments payable 18,564 (374,375) Interest on long-term debt in the Statement of Activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the fundc- when it is due, and thus requires the use of current financial resources. In the Statement of Activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. The decrease in accrued interest is as follows: Accrued interest at September 30, 2013 600,242 Accrued interest at September 30, 2014 330,011 270,231 Internal service funds are used by management to charge the costs of duplicating services, information technology and health insurance claims to the individual funds. The nei revenues of these internal service funds are included with the governmental activities. 1,063,358 Internal service funds are used by management to charge the costs of central garage services to the individual funds. The net revenue of this fund is included with the business -type activities. This amount represents the governmental activity portion of the central garage activity. (1,139,644) Change in net position of governmental activities (Exhibit A-2) $ (11,979,457) See accompanying notes to the basic financial statements. 19 EXHIBIT A-7 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF FUND NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2014 Enterprise Funds Nonmajor Water and Regional Enterprise Internal Sewer Sanitation Airport Funds Total Service Funds Assets Current assets: Cash and cash equivalents $ 1,377,845 $ 6,417,629 $ 140,908 $ 6,271,638 $ 14,208,020 $ 2,749,522 Restricted cash and cash equivalents 17,927,834 - 655,974 - 18,583,808 3,568,494 Receivables (net): Customer and trade 4,077,349 1,484,761 - 280,159 5,842,269 - Government agencies 71,859 - - 1,192,961 1,264,820 - Other 45,149 - 22,597 69,452 137,198 27,958 Inventory 1,085,293 - - 77,531 1,162,824 782,706 Prepaid items - - 27,644 4,476 32,120 253,599 Total current assets 24,585,329 7,902,390 847,123 7,896,217 41,231,059 7,382,279 Long-term assets: Capital assets, net of accumulated depreciation 239,078,342 7,867,521 40,554,138 37,080,566 324,580,567 18,964,440 Total long-term assets 239,078,342 7,867,521 40,554,138 37,080,566 324,580,567 18,964,440 Total assets 263,663,671 15,769,911 41,401,261 44,976,783 365,811,626 26,346,719 Deferred Outflows of Resources Deferred losses on bond refundings 2,330,160 - - - 2,330,160 - See accompanying notes to the basic financial statements. 20 EXHIBIT A-7 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF FUND NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2014 Enterprise Funds Nonmajor Water and Regional Enterprise Internal Sewer Sanitation Airport Funds Total Service Funds Liabilities Current liabilities: Accounts payable - trade 1,398,178 169,975 1,120 986,434 2,555,707 369,109 Accrued payroll 220,453 88,366 2,456 46,052 357,327 83,421 Accrued vacation and sick leave 407,326 142,380 6,918 38,608 595,232 147,162 Payable to other City funds 54,368 - - 840,659 895,027 116,646 Payable to government agencies - 68,366 310 3,958 72,634 - Estimated health claims payable - - - - - 595,540 Other liabilities 129,193 - 15,000 127,100 271,293 2,829 Payable to U.S. Government - current maturity 36,548 - - - 36,548 - Capital leases - current maturities 25,378 - - - 25,378 237,820 Revenue bonds - current maturities 7,341,467 - - - 7,341,467 - Accrued interest - revenue bonds 799,153 - - - 799,153 - Total current liabilities 10,412,064 469,087 25,804 2,042,811 12,949,766 1,552,527 Long-term liabilities: Payable to U.S. Government, less current maturities 437,652 - - - 437,652 - Capital leases, less current maturities 238,129 - - - 238,129 498,279 Revenue bonds, less current maturities 114,597,026 - - - 114,597,026 - Estimated liability for landfill closure and post -closure care costs - 4,267,165 - - 4,267,165 - Customer deposits 2,864,032 - - - 2,864,032 - Total long-term liabilities 118,136,839 4,267,165 - - 122,404,004 498,279 Total liabilities 128,548,903 4,736,252 25,804 2,042,811 135,353,770 2,050,806 Net Position Net investment in capital assets 122,714,381 7,867,521 40,554,138 37,080,566 208,216,606 18,228,341 Restricted for debt service 11,885,698 - - - 11,885,698 - Unrestricted 2,844,849 3,166,138 821,319 5,853,406 12,685,712 6,067,572 Total net position $ 137,444,928 $ 11,033,659 $ 41,375,457 $ 42,933,972 232,788,016 $ 24,295,913 Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds 27,246,087 Net position of business type activities $ 260,034,103 See accompanying notes to the basic financial statements. 21 EXHIBIT A-8 CITY OF WICHITA FALLS, TEXAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2014 Enterprise Funds Nonmajor Water and Regional Enterprise Internal Operating revenues: Charges for services $ 31,012,987 $ 13,123,951 $ - $ 3,988,804 $ 48,125,742 $ 12,995,163 Rents, concessions and other 259,985 72,538 775,829 1,621,682 2,730,034 404,737 Contributions - - - - - 11,592,049 Total operating revenues 31,272,972 13,196,489 775,829 5,610,486 50,855,776 24,991,949 Operating expenses: Personnel services 9,162,429 3,417,234 102,866 2,014,998 14,697,527 3,217,275 Supplies and materials 2,104,142 228,414 5,025 1,312,598 3,650,179 4,653,745 Maintenance and repairs 2,549,432 349,453 4,469 373,664 3,277,018 2,582,060 Utilities and other services 4,906,797 3,958,362 110,617 695,750 9,671,526 294,925 Insurance and contract support 780,075 88,587 4,669 103,938 977,269 9,775,960 Other expenses 1,478,509 440,964 114,865 361,114 2,395,452 2,006,333 Depreciation and amortization 6,597,956 219,571 559,511 918,554 8,295,592 4,130,567 Total operating expenses 27,579,340 8,702,585 902,022 5,780,616 42,964,563 26,660,865 Operating income (loss) 3,693,632 4,493,904 (126,193) (170,130) 7,891,213 (1,668,916) Nonoperating revenues (expenses): Interest income 7,573 1,694 327 2,086 11,680 179,025 Gain/(loss) on sale/abandonment of capital assets 48,496 - - (2,101) 46,395 92,023 Interest expense and paying agent fees (5,456,165) - - - (5,456,165) (15,291) Intergovernmental operating grants - - - 1,830,334 1,830,334 - Total nonoperating revenues (expenses) (5,400,096) 1,694 327 1,830,319 (3,567,756) 255,757 Income (loss) before contributions and transfers (1,706,464) 4,495,598 (125,866) 1,660,189 4,323,457 (1,413,159) Capital contributions 211,055 - - 806,772 1,017,827 - Transfers in 864,422 - 23,572,144 - 24,436,566 1,185,180 Transfers out (1,591,258) (2,435,899) (370,173) (656,547) (5,053,877) (350,392) Change in net position (2,222,245) 2,059,699 23,076,105 1,810,414 24,723,973 (578,371) Net position - beginning 139,667,173 8,973,960 18,299,352 41,123,552 24,874,284 Net position - ending $ 137,444,928 $ 11,033,659 $ 41,375,457 $ 42,933,966 $ 24,295,913 Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds (502,085) Change in net position of business type activities $ 24,221,888 See accompanying notes to the basic financial statements. 22 EXHIBIT A-9 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2014 Cash flows from operating activities: Received from customers and users Payments to suppliers Payments to employees Net cash provided by operating activities Cash flows from noncapital financing activities: Intergovernmental operating grants Interfund loans received (repaid) Transfers in from other funds Transfers out to other funds Net cash provided (used) by noncapital financing activities Cash flows from capital and related financing activities: Acquisition and construction of capital assets Proceeds from sale of capital assets Principal paid on long-term debt Interest and fees paid on long-term debt Net cash used for capital and related financing activities Cash flows from investing activities: Interest on investments Net cash provided by investing activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents - Beginning Cash and Cash Equivalents - Ending Reconciliation of cash and cash equivalents on the balance sheet to the statement of cash flows: Cash and cash equivalents Restricted assets - cash and cash equivalents Total cash and cash equivalents at end of year Enterprise Funds Nonmajor Water and Regional Enterprise Internal Sewer Sanitation Airport Funds Total Service Funds $ 31,297,197 $ 13,132,968 $ 760,890 $ 5,569,578 $ 50,760,633 $ 24,971,244 (16,375,590) (5,823,052) (284,495) (2,848,788) (25,331,925) (20,378,999) (6,436,482) (2,326,363) (74,097) (1,576,845) (10,413,787) (2,288,334) 8,485,125 4,983,553 402,298 1,143,945 15,014,921 2,303,911 - - - 2,224,209 2,224,209 48,403 - - - (132,509) (132,509) - 864,422 - 23,572,144 - 24,436,566 1,185,180 (1,591,258) (2,435,899) (370,173) (656,547) (5,053,877) (350,392) (9,676,436) (472,758) (23,571,619) (3,176,638) (36,897,451) (2,430,037) 48,496 - - 1,304 49,800 97,372 (7,150,908) - - - (7,150,908) (237,820) (5,545,343) - - - (5,545,343) (15,291) (22,324,191) (472,758) (23,571,619) (3,175,334) (49,543,902) (2,585,776) 7,573 17694 327 2,086 11,680 179,025 7,573 1,694 327 2,086 11,680 179,025 (14,558,329) 2,076,590 32,977 (594,150) (13,042,912) 780,351 33,864,008 4,341,039 763,905 6,865,788 45,834,740 5,537,665 $ 19,305,679 $ 6,417,629 $ 796,882 $ 6,271,638 $ 32,791,828 $ 6,318,016 $ 1,377,845 $ 6,417,629 $ 140,908 $ 6,271,638 $ 14,208,020 $ 2,749,522 $ 19,305,679 $ 6,417,629 $ 796,882 $ 6,271,638 $ 32,791,828 $ 6,318,016 See accompanying notes to the basic financial statements. 23 EXHIBIT A-9 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2014 Enterprise Funds Nonmajor Water and Regional Enterprise Internal Sewer Sanitation Airport Funds Total Service Funds Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities: Operating income (loss) $ 3,693,632 $ 4,493,904 $ (126,193) $ (170,130) $ 7,891,213 $ (1,668,916) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation and amortization 6,597,956 219,571 559,511 918,554 8,295,592 4,130,567 Customer deposits repaid (24,097) - - (24,097) - (Increase) decrease in current assets: Receivables: Customer and trade 96,306 (63,521) - (15,823) 16,962 - Government agencies (4,505) - - - (4,505) - Other (43,479) - (14,939) (25,085) (83,503) 8,861 Inventory (128,114) - - (28,751) (156,865) (42,325) Prepaid items 5,510 240 (4,507) (4,241) (2,998) (253,030) Increase (decrease) in current liabilities: Accounts payable - trade (1,512,780) 75,764 (10,093) 532,955 (914,154) 40,077 Accrued payroll 41,774 24,874 440 12,030 79,118 21,135 Accrued vacation and sick leave 59,838 27,097 (1,704) 7,910 93,141 29,965 Payable to other City funds - - - - - - Estimated health claims payable - - - - 67,143 Payable to government agencies - (1,190) (217) 730 (677) - Other liabilities (296,916) (10,028) - (84,204) (391,148) (29,566) Estimated liability for landfill closure - 216,842 - - 216,842 - Total adjustments 4,791,493 489,649 528,491 1,314,075 7,123,708 3,972,827 Net cash provided by operating activities $ 8,485,125 $ 4,983,553 $ 402,298 $ 1,143,945 $ 15,014,921 $ 2,303,911 Noncash capital and financing activities: Capital assets received from developers $ 211,055 $ - $ - $ - $ 211,055 $ - See accompanying notes to the basic financial statements. 24 EXHIBIT A-10 CITY OF WICHITA FALLS, TEXAS STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES SEPTEMBER 30, 2014 Assets Cash and cash equivalents Liabilities Other liabilities Agency Fund $ 103,132 $ 103,132 See accompanying notes to the basic financial statements. 25 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2014 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting and reporting policies of the City of Wichita Falls, Texas (City) conform to accounting principles generally accepted in the United States of America (GAAP) applicable to state and local governments. GAAP for local governments includes those principles prescribed by the Governmental Accounting Standards Board (GASB), which includes all statements and interpretations of the National Council on Governmental Accounting (NCGA) unless modified by the GASB, and those principles prescribed by the American Institute of Certified Public Accountants in the publication entitled Audits of State and Local Governmental Units. The following is a summary of the more significant policies and practices used by the City. A. Reporting Entity The City is a municipal corporation governed by an elected Mayor and six -member City Council. As required by Governmental Accounting Standards Board (GASB) Statement No. 61, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are in substance, part of the City's operations and data from these units are combined with data presented by the City. A discretely presented component unit, on the other hand, is reported in a separate column in the basic financial statements to emphasize it is legally separate from the City. Each blended and discretely presented component unit has a September 30th year end. Blended Component Unit Employee Benefit Trust Fund. On October 1, 1983, an "Agreement and Declaration of Trust" was made and entered into between the City and the Employee Benefit Trust Committee, acting as Trustee to administer the Employee Benefit Trust (Trust). The Trust Committee consists of four Trustees selected by the City, who may, but need not be, beneficiaries of the health and welfare program funded by the Trust, and/or officers or employees of the City. The purpose of the Trust is to provide health and welfare benefits, which may include life, accidental death and dismemberment, disability, medical and dental insurance, and any other benefits as determined by the Trustee Committee. The Trust is funded through contributions by the City and employees who choose to participate. It may be terminated in writing, at any time, by either party. The Employee Benefit Trust Fund is presented in the accompanying financial statements as an internal service fund. Discretely Presented Component Units The Wichita Falls Economic Development Corporation. The Wichita Falls Economic Development Corporation is a non-profit corporation formed in May 1997 for the purpose of increasing employment opportunities, primarily through assisting qualifying enterprises with funds provided by a portion of the local sales tax. Assistance may be in the form of incentive grants, loans or leases which call for discounted rates or rebates for job development. The Corporation operates under the authority of Vernon's Civil Statutes, Article 5190.6, Section 4A. Since the City Council appoints its Board of Directors, approves its budgets, and exercises final authority over its operations, the Wichita Falls Economic Development Corporation is considered to be part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The Wichita Falls Economic Development Corporation utilizes full accrual accounting. 26 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) The Wichita Falls 4B Sales Tax Corporation. The Wichita Falls 4B Sales Tax Corporation is a non-profit corporation formed in May 1997 for the purpose of increasing employment opportunities and for public improvement projects such as parks, auditoriums, learning centers, open space improvements, athletic and exhibition facilities, and the related maintenance and operating costs of such projects. The Corporation operates under the authority of Vernon's Civil Statutes, Article 5190.6, Section 4B. Since the City Council appoints its Board of Directors, approves its budgets, and exercises final authority over its operations, the Wichita Falls 4B Sales Tax Corporation is considered to be part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The Wichita Falls 4B Sales Tax Corporation utilizes full accrual accounting. Wichita Falls Reinvestment Zone #2. On August 16, 2005, the City of Wichita Falls, Texas, with the advice and consent of the Wichita Falls Independent School District and Wichita County, approved the creation of the Wichita Falls Reinvestment Zone #2 (Zone). This Zone is permitted by Article 1066e of the State of Texas Tax Increment Financing Act passed in 1981. The area of the Zone is approximately 236 acres and includes the Lawrence Road area of the City. The purpose of the Zone is to capture increments of growth in real property values in the Zone from base values established on January 1, 2004, and use the ad valorem taxes derived from these increments to contribute to the zoned area. Tax funds derived from the increment can only be spent for public improvements in the Zone or for the payment of debt service on bonds issued to provide funds for public improvements. The Zone terminates on December 311 2025, or when all debt has been paid if later. After all costs have been paid at the end of the tax increment financing period, any money remaining is to be remitted to the taxing entities. Since the City Council appoints a majority of its Board, approves its budget, and exercises final authority over its operations, the Wichita Falls Reinvestment Zone #2 is considered to be part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The Zone utilizes full accrual accounting. Wichita Falls Reinvestment Zone #3. On September 1, 2009, the City of Wichita Falls, Texas, with the advice and consent of the Wichita Falls Independent School District and Wichita County, approved the creation of the Wichita Falls Reinvestment Zone #3 (Zone). This Zone is permitted by Article 1066e of the State of Texas Tax Increment Financing Act passed in 1981. The area of the Zone is approximately 630 acres and includes a significant portion of the Eastside Neighborhood. The purpose of the Zone is to capture increments of growth in real property values in the Zone from base values established on January 1, 2009, and use the ad valorem taxes derived from these increments to contribute to the zoned area. Tax funds derived from the increment can only be spent for public improvements in the Zone or for the payment of debt service on bonds issued to provide funds for public improvements. The Zone terminates on December 31, 2029. After all costs have been paid at the end of the tax increment financing period, any money remaining is to be remitted to the taxing entities. Since the City Council appoints a majority of its Board, approves its budget, and exercises final authority over its operations, the Wichita Falls Reinvestment Zone #3 is considered to be part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The Zone utilizes full accrual accounting. 27 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) No separate audited financial statements are available for the City's blended and discretely presented component units. Complete financial statements for the individual component units may be obtained from the City's Assistant City Manager/CFO at 1300 7th Street, Wichita Falls, Texas. Excluded From the Reporting Entity Wichita Falls Firemen's Relief and Retirement Fund. The Wichita Falls Firemen's Relief and Retirement Fund was established and is controlled through various State of Texas legislative enactments. This Fund is administered locally by a seven -member board, independent of the City Council. City management and the City Council do not influence or control the administrative and financial affairs of the Fund, and the assets of the Fund are not the property of the City. The seven -member Board of Trustees, composed of the Mayor, the Finance Manager from the City's Finance Department, three firefighters elected by a majority vote of the firefighters and two citizens, who are not employees or officers of the City and are chosen by the unanimous vote of the first five Trustees, are subject to the administrative supervision of and report to the State Firemen's Pension Board. The activities of the Firemen's Relief and Retirement Fund, in the City's judgment, are not a part of the City and thus are excluded from the accompanying financial statements. B. Basis of Presentation Government -wide financial statements The basic financial statements include both government -wide (based on the City as a whole) and fund financial statements. The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all non -fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. However, interfund services provided and used are not eliminated in the process of consolidation. 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 government -wide statement of activities demonstrates the degree to which the direct expenses of a functional category (police, public works, etc.) or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, 2) grants and contributions that are restricted to meeting operational requirements of a particular function or segment, and 3) grants and contributions that are restricted to meeting the capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported instead as general revenues. 28 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) Fund financial statements Separate fund -based financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds and major enterprise funds are reported as separate columns in the fund financial statements. GASB Statement No. 34 sets forth minimum criteria (percentage of assets, liabilities, revenues or expenditures/expenses of either fund category for governmental and enterprise) for the determination of major funds. The major governmental fund is the General Fund. The major enterprise funds are the Water and Sewer Fund and the Sanitation Fund. Non -major funds are combined in a column in the fund financial statements. Non -major funds are detailed in the combining section of the statements. Internal service funds, which traditionally provide services primarily to other funds of the government, are presented in the summary form as part of the proprietary fund financial statements. Because the principal users of internal services are the City's governmental and business -type activities, financial statements of internal service funds are allocated (based on the percentage of goods or services provided) between the governmental and business -type activities when presented at the government -wide level. The government -wide focus is more on the sustainability of the City as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. The focus of the fund financial statements is on the major individual funds of the governmental and business -type categories. Each presentation provides valuable information that can be analyzed and compared to enhance the usefulness of the information. C. Measurement focus. basis of accountina and financial statement Dresentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds. 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 in which they are levied. Grants and similar items are recognized as soon as all eligibility requirements imposed by the provider have been met. Government fund -level financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property tax, franchise fees, and sales tax associated with the current fiscal period are all susceptible to accrual and have been recognized as revenues of the current fiscal period. All of the revenue items are considered to be measurable and available only when cash is received. 29 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) The City reports the following major governmental funds: The General Fund is the City's primary operating fund. All general tax revenues and other receipts that are not allocated by law or contractual agreement to some other fund are accounted for in this fund. From the fund are paid general operating costs, fixed charges, and capital improvement costs that are not paid through other funds. The Airport Improvement Grant Fund is used to account for improvements made to the City's Regional Airport that are funded by state and federal grants. Other governmental funds are a summarization of all the non -major governmental funds. The City reports the following major proprietary funds: The Water and Sewer Fund accounts for the water and sewer utility services provided to residents of the City. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations, maintenance, finance and related debt service. The Sanitation Fund accounts for refuse collection services to the residents of the City as well as the operations of the City's landfill. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations and maintenance. The Regional Airport Fund accounts for the operations of the Wichita Falls Regional Airport. Operational activities, including administration, operations and maintenance, of the airport are accounted for in this fund. Other enterprise funds are a summarization of all of the non -major proprietary funds. The City additionally reports the following fund types: Internal service funds are used to account for the financing of materials and services provided by one department of the City to other departments of the City on a cost -reimbursement basis. The City uses internal service funds to report the activities of fleet maintenance, duplicating services, employee health and life insurance, and information technology. An agency fund is used to account for any unclaimed vendor or payroll checks that will be escheated to the State if they remain unclaimed. These funds are held on a purely custodial basis. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expense generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's water and sewer, sanitation, transit, and airport funds are charges to customers for services. Operating expenses for the enterprise funds and internal service funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues not meeting this definition are reported as nonoperating revenues and expenses. 30 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed. Capital improvement assessments are recorded as revenues in the fiscal period when the assessment becomes both measurable and available to finance expenditures of the fiscal period. Assessment revenues are considered measurable and available when collected by the City and recognized as revenue at that time. Payments for capital improvement assessments received in advance of the levy are reflected as deferred revenue. D. Nonexchange Transactions In a nonexchange transaction, a government gives (or receives) value without directly receiving (or giving) equal value in return. The statement defines when the City should recognize revenue or expense for nonexchange transactions involving financial or capital resources and how to account for timing and purpose restrictions. The timing of recognition depends on whether a nonexchange transaction is (a) a derived tax revenue (b) an imposed nonexchange revenue transaction or (c) a government -mandated or voluntary nonexchange transaction. Under this standard, revenue transactions with purpose restrictions are recorded as restricted resources until the purpose restrictions are met. Nonexchange transactions include the following classifications: • Derived tax revenues result from assessments imposed by government on exchange transactions. • Imposed nonexchange revenues result from assessments by governments on nongovernmental entities, other than assessments on exchange transactions. • Government -mandated nonexchange transactions occur when a government at one level provides resources to a government at another level and require that government to use them for a specific purpose or purposes established in the provider's enabling legislation. • Voluntary nonexchange transactions result from legislative or contractual agreements, other than exchanges, entered into willingly by two or more parties. Examples of the City's voluntary nonexchange transactions include capital grants, state shared revenue and private donations. Providers of government -mandated nonexchange transactions and voluntary nonexchange transactions should recognize liabilities and expenses/expenditures and recipients should recognize receivables (or decrease in liabilities) and revenue when all applicable eligibility requirements, including time requirements are met. All nonexchange transactions occurring in governmental fund types are also subject to the modified accrual revenue recognition criteria. Accordingly, assets and revenue should not be recognized unless measurable and available. 31 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) E. Assets, liabilities and net position or fund balances 1. Cash, cash equivalents and investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments are carried at fair value. Fair value is determined as the price at which two willing parties would complete an exchange. Interest earned on investments is recorded in the funds in which the investments are recorded. 2. Inventory and Prepaid Items Inventories of the general and proprietary funds consist of supplies and various materials used for the maintenance of capital assets. The consumption method is used to account for these inventories. Under this method, inventory acquisitions are recorded in inventory accounts initially and charged as expenditures when used. Inventories are stated at average cost. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. 3. Capital Assets Capital assets, which include property, plant and equipment, and infrastructure assets (e.g. roads, bridges, sidewalks and similar items), are reported in the applicable governmental or business -like activities columns in the government -wide financial statements. The City defines capital assets as assets with an initial, individual cost of more than $1,000 and an estimated useful life in excess of one year. 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 time received. Capital assets are depreciated using the straight line method over the following useful lives: Assets Years Buildings, systems and improvements 20-59 years Infrastructure 8-100 years Machinery, vehicles and other equipment 3 - 25 years Furniture and equipment 3 - 10 years For business -type activities' capital assets, interest is capitalized on construction costs incurred during the year at an average interest rate on borrowed funds (revenue bonds) in accordance with generally accepted accounting principles. 32 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) For the fiscal year ended September 30, 2014, the City's business -type activities incurred a total of $5,471,456 of interest costs. This entire amount was charged to expense as there was no capitalized interest in the current year. Contributions of funds from federal, state, or local grants restricted for the purpose of purchasing plant and equipment are recorded as revenue when received. The cost of water and sewer lines installed by developers is valued by the contractor and recorded as nonoperating revenue in the Water and Sewer Fund. 4. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element 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 year ended September 30, 2014, the City has only one item that qualifies for reporting in this category: deferred losses on bond refunding. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflow of resources. This separate financial statement element represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has only two types of item that qualifies for reporting in this category. Property taxes receivable ($802,512) and municipal court fines receivable ($502,872) are unavailable and therefore cannot be recognized as revenue in the governmental funds until they are received. 5. Long -Term Obligations Long-term debt and other obligations for general government purposes are recorded in the government -wide statement of net assets. Long-term debt and other obligations financed by proprietary funds are reported as liabilities in the appropriate funds. For the government -wide financial statements and proprietary fund types, bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method in the government -wide financial statements. Bonds payable are reported net of the applicable bond premium or discount. Issuance costs are reported as deferred bond issue costs and amortized over the term of the related debt. In addition, gains or losses on proprietary fund bond refunding are amortized over the term of the lesser of the new bonds or the refunded bonds' life using the effective interest method. In the governmental fund financials, bond proceeds are reported as another financing source. Bond premiums and discounts in governmental funds are also recognized currently as other financing sources or uses. Issuance costs, even if withheld from the actual net proceeds received, are reported as debt service expenditures. 33 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) 6. Fund Balances — Governmental Funds Fund balances of the governmental funds are classified as follows: Nonspendable Fund Balance — represents amounts that cannot be spent because they are either not in spendable form (such as inventory or prepaid insurance) or legally required to remain intact (such as notes receivable or principal of a permanent fund). Restricted Fund Balance — represents amounts that are constrained by external parties, constitutional provisions or enabling legislation. Committed Fund Balance — represents amounts that can only be used for a specific purpose by adoption of an ordinance by the City Council. Committed amounts cannot be used for any other purpose unless the governing board removes those constraints through the adoption of another ordinance. Committed fund balance amounts differ from restricted balances in that the constraints on their use do not come from outside parties, constitutional provisions, or enabling legislation, but rather from inside the City. Assigned Fund Balance — represents amounts which the City intends to use for a specific purpose, but that do not meet the criteria to be classified as restricted or committed. The City Council has by resolution authorized the Assistant City Manager/CFO to assign fund balance. Specific amounts that are not restricted or committed in a special revenue, capital projects, debt service or permanent fund are assigned for purposes in accordance with the nature of their fund type or the fund's primary purpose. Assignments within the General Fund convey that the intended use of those amounts is for a specific purpose that is narrower than the general purposes of the City itself. Unlike commitments, assignments only exist temporarily. Therefore additional action does not normally have to be taken for the removal of an assignment. Unassigned Fund Balance — represents amounts which are unconstrained in that they may be spent for any purpose. Only the General Fund reports a positive unassigned fund balance. Other governmental funds might report a negative balance in this classification because of overspending for specific purposes for which amounts had been restricted, committed or assigned. When an expenditure is incurred for a purpose for which both restricted and unrestricted fund balance is available, the City considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds. 7. Federal and State Grants Grants and shared revenues are generally accounted for within the appropriate fund of the City to be financed by such grants or shared revenues. Federal grants include Community Development Block Grant, Section 8 Housing Assistance, Home Investment Partnership Agreement Program, and numerous health -related grants. 34 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) Each Federal grant is accounted for in a separate special revenue fund. State grant revenues received for purposes normally financed through the general government are accounted for within the General Fund. 8. Transactions Between Funds Outstanding balances between funds are reported as "due to/from other City funds." Any residual balances between governmental activities and business -type activities are reported in the government -wide statements as "internal balances." Nonrecurring or non -routine transfers of equity between funds are accounted for as transfers. 9. Vacation and Sick Leave All full-time employees accumulate vacation benefits based on length of service up to 15 days per year. The maximum allowable accumulation is 30 days. Upon leaving the employment of the City, employees will be paid for unused vacation days which they have accrued. Sick leave is earned at the rate of 4.62 hours per pay period up to a maximum of ninety days. Additionally, police officers and firefighters may accumulate an unlimited number of sick leave days while employed with the City. Upon termination, police officers and firefighters are compensated for up to 720 hours and 1,080 hours, respectively. 10. Risk Management The government is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the government carries commercial insurance. For insured programs, there have been no significant reductions in insurance coverage. Settlement amounts have not exceeded insurance coverage for the current year or the three prior years. The City maintains a group health insurance plan for employees and dependents which is partially self -insured by the City. A group life insurance plan is maintained through an insurance company. Contributions to the plans are provided for by both the City and participating employees. These contributions are recognized as revenues in the internal service fund used to account for these plans. The contributions made by the City are recorded as expenditures or expenses of the various funds as appropriate. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of $500,000. Liabilities include an amount for claims that have been incurred but not reported. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of pay -outs and other economic and social factors. 35 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) The City is also self -insured up to $250,000 for workers' compensation claims. Such claims are processed by a third party administrator. The City's estimated liability for workers' compensation claims payable at September 30, 2014 is based on management's estimate of probable losses in the amount of $127,746. The payment dates of such claims cannot be precisely determined, but are expected to be paid on a periodic basis over the next few years. Accordingly, the long-term liability has been recorded in the government -wide financial statements. $90,618 is believed by City management to be currently payable from available resources and is recorded in the General Fund. The following represents changes in the amount of claims liabilities for the City from October 1, 2012 to September 30, 2014: Liability balance, September 30, 2012 Incurred claims/adjustments Claim payments Liability balance, September 30, 2013 Incurred claims/adjustments Claim payments Liability balance, September 30, 2014 Note 2 - COMPLIANCE AND ACCOUNTABILITY Finance -Related Legal and Contractual Provisions Health Workers' Care Compensation $ 594, 291 $ 1577843 97288,892 8507639 ( 9,354,786) ( 869,902) 528, 397 1387580 91021,053 5171796 ( 8,953,910) ( 528,630) $ 595, 540 $ 127, 746 The City had no violations of finance -related legal and contractual provisions for the year ended September 30, 2014. Deficit Fund Balances — Individual Funds The Airport Improvement Grant Fund, a major special revenue fund, had a deficit fund balance of $460,883 as of September 30, 2014. This deficit occurred because the City only requests grant funds as disbursements are made. This deficit will be alleviated within a year. Note 3 - DEPOSITS AND INVESTMENTS Deposits All of the City's demand and time depository accounts are held in local banking institutions under the terms of written depository contracts. At September 30, 2014, the total amount of the City's demand and time deposits per the general ledger was $2,968,793, and the total amount per the City's September 30, 2014 bank statements was $3,099,864. The entire amount of the year-end bank statement balances was covered by federal depository insurance or by collateral held by the City's agent in the City's name. 36 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 3 - DEPOSITS AND INVESTMENTS (CONTD.) In\/PCtmPntC The investment policies of the City and its discretely presented component units are governed by The Public Funds Investment Act. Authorized investments include obligations of the U.S. Treasury, agencies and instrumentalities, obligations of the State of Texas and related agencies, obligations of states, agencies, counties, cities and political subdivisions of any state rated A or above by a nationally recognized investment rating firm, repurchase agreements, public funds investment pools, and commercial paper. The investments of the City and its discretely presented component units at September 30, 2014 are as follows: Fair Value/ Average Weighted Average Carrying Credit Quality/ Months to Types of Investments Amount Cost Ratings Maturity Primary Government: TexPool $ 44,561,579 $ 44,561,579 Not rated 1.00 LOGIC 111140,800 111140,800 Not rated 1.00 Money market account 12,525,453 12,525,453 Not rated 1.00 Total primary government investments 68,227,832 68,227,832 Component Units: TexPool 18,419,279 18,419,279 Not rated 1.00 Total component unit investments 18,419,279 18,419,279 Total investments $ 86,647,111 $ 86,647,111 TexPool is a public funds investment pool administered by the Treasurer of the State of Texas pursuant to the Interlocal Cooperation Act passed in 1989 by the 71 st Texas Legislature. This Act authorized the City to delegate to TexPool the authority to make investment purchases and to hold legal title as custodian of the investment securities. All TexPool investments are in the possession of the Texas Treasury Safekeeping Trust Company and held in its book -entry safekeeping account at the Federal Reserve Bank of Dallas. The Texas Treasury Safekeeping Trust Company was created in 1986 by the 69th Texas Legislature to enable the Treasurer of the State of Texas to manage, safekeep, and invest public funds of state agencies and political subdivisions more efficiently and economically. TexPool is not registered with the Securities and Exchange Commission (SEC) as an investment company. TexPool is operated in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. Therefore, the fair value of the City's position in TexPool is the same as the value of the pool shares. LOGIC was also established pursuant to the Interlocal Cooperation Act passed by the State of Texas and is administered by Southwest Securities Group, Inc. LOGIC's governing body is a five - member board of directors comprised of three government officials and two other persons with expertise in public finance. LOGIC's investments are only those authorized by the Texas Public Funds Investment Act governing pools for local governments. LOGIC presently offers two investment pools, each of which is separately managed and has a different investment objective. 37 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 3 - DEPOSITS AND INVESTMENTS (CONTD.) Each participating government owns an undivided beneficial interest in the assets of the pool represented by units. Participants may terminate their participation in LOGIC at any time by redeeming their units. LOGIC is not registered with the Securities and Exchange Commission (SEC) as an investment company. LOGIC is operated in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. Therefore, the fair value of the City's position in LOGIC is the same as the value of the pool shares. GASB Statement No. 40 requires a determination as to whether the City was exposed to the following specific investment risks at year end and if so, the reporting of certain related disclosures: a. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The ratings of securities by nationally recognized rating agencies are designed to give an indication of credit risk. At year end, the City was not exposed to credit risk. b. Custodial Credit Risk Deposits are exposed to custodial credit risk if they are not covered by depository insurance and the deposits are uncollateralized, collateralized with securities held by the pledging financial institution, or collateralized with securities held by the pledging financial institution's trust department or agent but not in the City's name. Investment securities are exposed to custodial risk if the securities are uninsured, are not registered in the name of the government, and are held by either the counterparty or the counterparty's trust department or agent but not in the City's name. At year end, the City was not exposed to custodial credit risk. c. Concentration of Credit Risk This risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. At year end, the City was not exposed to concentration of credit risk. d. Interest Rate Risk This is the risk that changes in interest rates will adversely affect the fair value of an investment. In accordance with its investment policy, the City manages its exposure to interest rate risk by allowing no more than 20% of the City's portfolio to be invested for a period greater than one year. e. Foreign Currency Risk This is the risk that exchange rates will adversely affect the fair value of an investment. At year end, the City was not exposed to foreign currency risk. 38 H cn z O CO F— i— ., z C � J G r J N a ao LL F M a J � a_m = zw V za 30 �w LL w O O V w F- O z O O i O 4-0 U O N O co E CO O vJ LU m m O 00 f` O co co O CD rl- N� T 4-1 N 000 CY) N U ( P- M O ,- O o0 O � p+_ C = I- d) dF) ti LO ti — O Q LJJ CO f�- LC) M 00 O — 00 P, M � N M N (� 0g (n U L ti a) p � O O (n E N N a) 0 O O U >N,— +_ N U L a) N 000 � O � .� Co ti OM � r O �_ d') ti M LO LO O 00 a) L > ~ O CO I` N N J i (7 60- coCo � (D >' O C6 U a� 00 � 00 U ) �}} N ti N O U CU ��a) LON 00 ^ co M N %w O .0 � �� O O i co Q O N O 1 O E L C ti m co � rn 0 O C M Z W co ti ti to O O Lr� Lo +� O .� a) Q N N O E _ CO oo 00 00 C\l (D o00 coU O O L U ) N N = m X d') d') d') _ N c CU LO 00 It m O co 1 Ln P �� " 00 O x �Lri L o �� o � 't LO co 0� f` 00 O 0 a ,N 00 M U') 00 co O :3 E 1 ti ti CO N Q Z >O N N a O cr (6 4- — O N CNI �--' }, 00 o o `� C6 N ."Q. O O c4 N I� N M W O � T- Ln O � O r- N co N M 00 di M co OZ O +4-+ N 000 N Lo O (� I� M M (o CD O cn U (D O LO a) a CO E U 0 c L cn � C � N v a) U O N C L a) co > C > .°� a)Ca E F U c v 4-0X L (� 0 _� a (� (� 1 a) O M M o ° o N Q LUO(DO o C: C (D m z .00 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 5 - PROPERTY TAXES Property taxes attach as an enforceable lien on property as of the prior January 1. Taxes are levied on October 1, and become delinquent after January 31, unless the half -payment option is elected, in which case one-half of the tax is due November 30, and the balance the following June 30. The City is permitted by its Home Rule Charter to levy taxes up to $2.25 per $100 of assessed valuation for general governmental services including the payment of principal and interest on long-term debt. The combined tax rate to finance general governmental services for the year ended September 30, 2014 was $.63526 per $100 which means that the City has a tax margin of $1.61474 per $100, and could raise up to $73,438,583 additional tax revenue a year from the present assessed valuation of $4,548,012,853 before the limit is reached. Note 6 - RESTRICTED ASSETS Restricted assets in the Water and Sewer Fund, Regional Airport Fund, and Internal Service Funds, are held for specific purposes in accordance with bond ordinances or other legal restrictions. Water and Sewer restricted assets are comprised of the following: For Debt Service: Cash and cash equivalents $11,8857698 For Capital Improvements: Cash and cash equivalents 6,042,136 Total $17, 927, 834 Regional Airport restricted assets are comprised of the following: For Passenger Facility Charges: Cash and cash equivalents $1441075 For Customer Facility Charges: Cash and cash equivalents 511,899 Total 655 974 Internal Service Fund restricted assets are comprised of the following: For Employee Insurance: Cash and cash equivalents $3,568,494 ►e CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 7 - CAPITAL ASSETS Capital asset activity for the year ended September 30, 2014 was as follows: Balance Balance Governmental activities: October 1, September 30, Capital assets not being depreciated: Land $ 10,721,895 $ - $ 39,075 $ 10,682,820 Construction in progress 205,700 577,379 - 783,079 Total capital assets not being depreciated 10,927,595 577,379 39,075 11,465,899 Capital assets being depreciated: Land betterments 23,441,809 13,121 321286 23,422,644 Buildings, systems and improvements 73,514,193 2,950 96,343 73,420,800 Infrastructure 167,656,548 4,436,275 615,358 171,477,465 Machinery and equipment 23,157,770 498,433 935,276 22,720,927 Furniture and fixtures 173,489 - 9,121 164,368 Total capital assets being depreciated 287,943,809 4,950,779 1,688,384 291,206,204 Less accumulated depreciation for: Land betterments 5,248,789 498,049 6,909 5739,929 Buildings, systems and improvements 19,583,853 1,666,918 811742 21,169,029 Infrastructure 877113,484 2,546,338 566,670 89,093,152 Machinery and equipment 11,657,507 1,849,050 8927456 12,614,101 Furniture and fixtures 170,939 920 9,121 162,738 Total accumulated depreciation 123,774,572 6,561,275 1,556,898 128,7781949 Total capital assets being depreciated, net 164,169,237 ( 1,610,496) 131,486 162,427,255 Governmental activities capital assets, net $175, 096, 832 ($1, 033,1 U) $ 170,561 $173, 893,154 41 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 7 - CAPITAL ASSETS (CONTD.) Balance Balance Business -type activities: October 1, September 30, 2013 Increases Decreases 2014 Capital assets not being depreciated: Land $ 9,042,199 $ - $ - $ 9,042,199 Construction in progress 18,384,162 31,254,456 11,585,649 38,052,969 Total capital assets not being depreciated 27,426,361 31,254,456 11,585,649 47,095,168 Capital assets being depreciated: Land betterments 43,418,549 5,384,127 662,332 48,140,344 Buildings, systems and improvements 339,432,274 11,981,929 301,982 35151123221 Machinery and equipment 8,464,273 356,454 19,115 8,801,612 Furniture and fixtures 405819 - 1,645 39,174 Motor vehicles 51,398,490 2,160,850 848,028 52,711,312 Total capital assets being depreciated 442,754,405 19,883,360 1,833,102 460,804,663 Less accumulated depreciation for: Land betterments 13,944,811 11179,302 662,332 1454611781 Buildings, systems and improvements 100,626,948 6,898,110 301,984 1071223,074 Machinery and equipment 5,693,639 449,997 15,710 6,127,926 Furniture and fixtures 405819 - 1,645 39,174 Motor vehicles 34,492,365 3,721,672 842,681 37,371,356 Total accumulated depreciation 154,798,582 12,249,081 1,824,352 165,223,311 Total capital assets being depreciated, net 287,955,823 7,634,279 8,750 295,581,352 Business -type activities capital assets, net $315, 382,184 $38, 888, 735 $11, 594, 399 $342, 676, 520 Depreciation expense was charged to functions as follows: Governmental activities: Administrative services $ 8611582 Police 1,425,876 Fire 151,474 Parks and recreation 250,168 Accounting/finance 1053981 Community development 73902 Public works 233003005 Health 1593732 Traffic and transportation 319,057 Multi -Purpose Events Center 979,498 Total governmental depreciation $6,561,275 5K CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 7 - CAPITAL ASSETS (CONTD.) Business -type activities: Regional Airport Kickapoo Airport Transit Sanitation Water and sewer Stormwater drainage Waterpark Total business -type depreciation Note 8 - PENSION PLANS Texas Municipal Retirement System Plan Description $ 5645050 4325217 521,175 2, 871, 029 7,441,401 232,233 186,976 $121249, 081 The City provides pension benefits for all of its eligible employees, except firefighters, through a nontraditional, joint contributory, hybrid defined benefit plan in the state-wide Texas Municipal Retirement System (TMRS), an agent multiple -employer public employee retirement system. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. TMRS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information (RSI) for TMRS; the report also provides detailed explanations of the contributions, benefits and actuarial methods and assumptions used by the System. This report may be obtained by writing TMRS, P.O. Box 149153, Austin, TX 78714-9153 or by calling 800-924-8677; in addition, the report is available on TMRS' website at www.TMRS.com. Plan provisions for the City were as follows: Employee deposit rate Matching ratio (City to employee) Years required for vesting Service retirement eligibility (expressed as age / years of service) Updated Service Credit Annuity Increase (to retirees) Plan Year 2013 5%/7% 2 to 1 10 60/10, 0/25 50% Repeating, Transfers 70% of CPI Repeating Plan Year 2014 5%/7% 2 to 1 10 60/10, 0/25 50% Repeating, Transfers 70% of CPI Repeating 43 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 8 - PENSION PLANS (CONTD.) C'nntrihi itinnc Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Projected Unit Credit actuarial cost method. This rate consists of the normal cost contribution rate and the prior service cost contribution rate, which is calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the portion of an active member's projected benefit allocated annually; the prior service contribution rate amortizes the unfunded (overfunded) actuarial liability (asset) over the applicable period for that city. Both the normal cost and prior service contribution rates include recognition of the projected impact of annually repeating benefits, such as Updated Service Credits and Annuity Increases. The City contributes to the TMRS Plan at an actuarially determined rate. Both the employees and the City make contributions monthly. Since the City needs to know its contribution rate in advance for budgetary purposes, there is a one-year delay between the actuarial valuation that serves as the basis for the rate and the calendar year when the rate goes into effect. Wichita Falls Firemen's Relief and Retirement Fund Plan Description The City provides pension benefits for all of its firefighters through a single employer defined benefit pension plan. The Wichita Falls Firemen's Relief and Retirement Fund (Fund) operates under an act passed in 1937 by the Texas State Legislature and adopted by the City's firefighters. Benefits are determined on a "formula" or a "final salary" plan. A firefighter who qualifies for a retirement benefit will receive monthly retirement equal to 2.55% of the firefighter's average salary, multiplied by the member's years of credited service. Benefits are calculated based upon a member's average salary for the 78 consecutive biweekly pay periods which produce the highest average. Members can receive a service retirement at ages 50 and above with 20 or more years of service. Members are eligible for actuarially reduced early retirement benefits before age 50, provided the employee has accrued at least 20 years of service. The plan also provides death and disability benefits. Members who terminate their service and are nonvested are entitled to the excess of the member's contributions over any benefits previously received. r.nntrihi itinnc The contribution rate for the firefighters is 12% and the City contributes 13.08%. Both the firefighters and City make contributions bi-weekly. Contribution requirements are not actuarially determined, however, state law requires that each plan of benefits adopted by the Fund must be approved by a qualified actuary. The actuary certifies that the contribution commitments by the firefighters and the City provide an adequate financing arrangement. Using the individual entry age normal cost method, the plan's normal cost is determined as a percentage of payroll. 44 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 8 - PENSION PLANS (CONTD.) The actuarial assumptions included (a) 8% investment rate of return, compounded annually (net of trust expenses), (b) projected salary increases for individual members of 4.75% per year, compounded annually, and (c) increases in total payroll of 4.75% per year, compounded annually. Active members are assumed to retire once they have both attained age 57 and completed at least 20 years of service. Benefits for vested terminated members are assumed to start on the date the member attains age 50 or, if later, the date the member would have completed 20 years of service. The actuarial value of assets was determined using a method that is market related and is consistent with the classes of current and anticipated assets. The method is consistent with the assumptions used to develop the actuarial present value of total projected benefits, and actuarial standards for valuation. Schedule of Actuarial Liabilities and Funding Progress Texas Municipal Firemen's Retirement Relief and System Retirement Total Actuarial Valuation Date 12/31 /13 12/31 /12 * Actuarial Value of Assets $182,5777734 $41,964,674 $224,5427408 Actuarial Accrued Liability (AAL) 227,6141915 667606,163 294,2217078 Percentage Funded 80.2% 63.0% 76.3% Unfunded Actuarial Accrued Liability (UAAL) 45,0377181 247641,489 69,6787670 Annual Covered Payroll 4077027275 81962,581 4976647856 UAAL as a Percentage of Covered Payroll 110.7% 274.9% 140.3% Net Pension Obligation (NPO) at the Beginning of the Period -0- -0- -0- Annual Pension Cost: Annual Required Contribution (ARC) $ 514187883 $ 17264,827 $ 616837710 Interest on NPO -0- -0- -0- Adjustment to the ARC -0- -0- -0- Annual Pension Cost $ 51418,883 $ 1,264,827 $ 6,683;710 * The Wichita Falls Firemen's Relief and Retirement Fund has not had an actuarial valuation since this date. A valuation is planned for December 31, 2014. 45 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 8 - PENSION PLANS (CONTD.) Percentage of Annual Pension Costs Contributed Contributions Made Increase in NPO NPO At the End of the Period Texas Municipal Firemen's Retirement Relief and System Retirement Total 100% 100% 100% $ 5,418, 883 $ 11264, 827 $ 61683, 710 -0- -0- -0- -0- -0- -0- Two preceding years: 2013: Annual Pension Cost $ 5,2911494 $ 17211,583 $ 61503,077 Percentage of Annual Pension Costs Contributed 100% 100% 100% NPO At the End of the Period -0- -0- -0- 2012: Annual Pension Cost $ 55218,722 $ 15174,529 $ 6,3935251 Percentage of Annual Pension Costs Contributed 100% 100% 100% NPO At the End of the Period -0- -0- -0- Actuarial Assumptions Texas Municipal Firemen's Retirement Relief and System Retirement Actuarial Cost Method Amortization Method Amortization Period Remaining Amortization Period Amortization Period for New Gains/Losses Asset Valuation Method Investment Rate of Return Projected Salary Increases Includes Inflation at Cost -of -Living Adjustments Entry Age Normal Level Percent of Payroll Closed 20 Years 30 Years 10-Year Smoothed Market 7.0% Varies by Age & Service 3.0% 2.1% Individual Entry Age Level Percent of Payroll Open N/A 30 Years Smooth Market Value 8% 4.75% 4.75% None The stand-alone financial reports for both the Texas Municipal Retirement System and Firemen's Relief and Retirement Fund can be obtained from the City's Assistant City Manager / CFO at 1300 7th Street, Wichita Falls, Texas. A schedule of funding progress is presented as required supplementary information for both the Texas Municipal Retirement System and the Firemen's Relief and Retirement Fund. These schedules provide multi -year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. S CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 9 - POST -EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS Plan Description The City administers the City of Wichita Falls Retiree Health Care Plan for all permanent employees who retire after satisfying eligibility retirement requirements through a single -employer defined benefit plan. All employees who retire and are actively in one of the City's health plans can continue to receive health care benefits under the City's plan for themselves and any dependents for as long as the retiree and/or dependents live. The plan does not issue a stand- alone financial report. Retiree Contributions Pre -Medicare Eligibility Retirees share in the cost of the Plan by paying premiums according to the following schedule: BC/BS BC/BS Core Plan Enhanced Plan Retiree Only (under 65) $171 $278 Retiree Only (over 65) N/A N/A Retiree/Spouse (both < 65) $321 $492 Retiree/Spouse (both > 65) N/A N/A Retiree/Spouse (1 >, 1 < 65) $583 $690 Retiree/Child $294 $465 Retiree/Family $364 $578 Dental premiums are included in the under 65 premiums above. Benefits for Spouses of Retired Employ Spouses of retirees are eligible to participate in a retiree health care program. Spouses are eligible to continue with same coverage after the death of retiree. Non -Medicare and Medicare -Eligible Provisions Medicare -eligible retirees and spouses on Medicare are eligible to participate in a Medicare supplement health care plan. Effective January 1, 2009, the following changes will be implemented to Medicare eligible retirees: For retirees already on Medicare as of January 1, 2009, the City will provide $250 in premium assistance towards the full premium for a Medicare subsidy program. The $250 is expected to be a fixed amount. Spouses currently covered in the health plan will also be eligible for the $250 premium assistance. For members retired as of January 1, 2009 but not yet Medicare -eligible, the City will provide $100 in premium assistance towards the full premium for a Medicare subsidy program. The $100 is expected to be a fixed amount. Spouses can participate in the Medicare subsidy program, but will receive no premium assistance. 47 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 9 - POST -EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (CONTD.) For members who retire on or after January 1, 2009, the City will provide no premium assistance once Medicare -eligible. The retiree premium for post-65 coverage is $421/month for each covered member as of June 1, 2010. Vision Coverage There is no vision coverage provided as of September 30, 2014. Dental Coverage Retirees and spouses prior to qualifying for Medicare are eligible to participate in the same dental care program as active employees. There is no dental coverage for retiree or spouses on the Medicare supplement. Life Insurance Coverage Life Insurance of $7,500 is provided to each retiree. There is no Life coverage for spouses of retirees. Funding Policy and Annual OPEB Cost The City's annual other post -employment benefits (OPEB) cost is based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of accrual that, if paid on an ongoing basis, is projected to cover the normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The City's OPEB cost for the year ended September 30, 2014 is as follows: Annual Required Contribution $25404,595 Interest on OPEB obligation - Adjustment to ARC - Annual OPEB cost (expense) end of year 21404,595 Net estimated employer contributions ( 2,274,645) Increase (decrease) in net OPEB obligation 129,950 Net OPEB obligation — beginning of year - Net OPEB obligation — end of year $ 1291950 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the fiscal year ending September 30, 2014 and the preceding two fiscal years were as follows: Employer Annual Amount Percentage Net OPEB Fiscal Year Ended OPEB Cost Contributed Contributed Obligation September 30, 2012 $2,3731230 $21373,230 100.0% $ - September 30, 2013 21444,427 2,444,427 100.0% - September 30, 2014 21404,595 2,2747645 94.6% 1295950 ►.; CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 9 - POST -EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (CONTD.) Schedule of Actuarial Liabilities and Funding Status Actuarial Valuation Date 12/31/12 Actuarial Value of Assets $ 1,7091516 Actuarial Accrued Liabilities $321117,774 Unfunded Actuarial Accrued Liability (UAAL) $30,4081258 Funded Ratio 5.32% Annual Covered Payroll $4834921352 UAAL as a Percentage of Annual Covered Payroll 62.71 % Actuarial Methods and Assumptions The Individual Entry -Age actuarial cost method is used to calculate the GASB ARC for the City's retiree health care plan. Using the plan benefits, the present health premiums and a set of actuarial assumptions, the anticipated future payments are projected. The projected unit credit method then provides for a systematic funding for these anticipated payments. The yearly ARC is computed to cover the cost of benefits being earned by covered members as well as to amortize a portion of the accrued liability. Projections of health benefits are based on the plan as understood by the City and include the types of benefits in force at the valuation date and the pattern of sharing benefit costs between the City and its employees to that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Significant methods and assumptions were as follows: Inflation rate Investment rate of return Actuarial cost method Amortization method Amortization period Salary growth Healthcare cost trend rate 3.00% per annum 7.5%, net of expenses Individual entry -age Level as a percentage of employee payroll Open 30 year period 3.0% per annum Initial rate of 7.50% declining to an ultimate rate of 4.50% after 8 years Actuarial valuations involve estimates of the value of reported amounts and assumptions about the profitability of events in the future. Amounts determined regarding the funded status and the annual required contributions of the City's retiree health care plan 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 presented as required supplementary information provides multi -year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 10 - DEFERRED COMPENSATION PLAN The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to the employees until termination, retirement, death, or an unforeseen emergency. Note 11 - AIRPORT LEASE The Regional Airport facilities are located on land at Sheppard Air Force Base. The land is leased from the Department of the Air Force for a period of fifty years, beginning May 15, 2009 and expiring May 14, 2059. The City's expense for the year ended September 30, 2014 was $39,380. The lease payment increases by 3% per year with a final lease payment of $141,307 in 2059. Note 12 - DESCRIPTION OF LEASING ARRANGEMENTS The majority of the City's operating leases contain an option for annual renewal at the end of the initial lease term. In most cases, these leases will be canceled or replaced by other leases. The City leases certain equipment under operating leases expiring at various times through the year ending September 30, 2014. The following is a schedule by years of future minimum rental payments required under operating leases that have initial or remaining noncancellable lease terms in excess of one year as of September 30, 2014: Year ending September 30: 2015 $ 1651955 2016 156,691 2017 123, 965 2018 1013440 2019 60,299 2020-2024 236,883 2025-2029 2743612 2030-2034 3181351 2035-2039 3699056 2040-2044 4271837 2045-2049 495,981 2050-2054 5747978 2055-2059 666,557 Total minimum payments required $3,972,605 The total rental expenses for all operating leases for the year ended September 30, 2014 was $166,740. There were no contingent rentals during the year ended September 30, 2014. 50 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 13 - LONG-TERM LIABILITIES Long-term liabilities transactions for the year ended September 30, 2014 are summarized as follows: Balance at Balance at October 1, Retired and September 30, Due Within 2013 Issued Transferred (1 L 2014 One Year Governmental Activities: General obligation bonds $ 5,491,678 $ - $ 811,812 $ 4,679,866 $ 829,160 Combination tax and revenue bonds 51,570,623 - 2,268,120 49,302,503 2,592,210 Accrued vacation and sick leave payable 7,263,313 2,134,957 1,730,881 7,667,389 2,125,000 Capital lease payable 3,833,640 - 322,690 3,510,950 338,139 Claims and judgments payable 138,580 517,796 528,630 127,746 90,618 Total governmental activities 68,297,834 2,652,753 5,662,133 65,288,454 5,975,127 Business -type Activities: Utility system revenue bonds, net of premium (discount) 99,211,869 - 3,488,364 95,723,505 3,637,413 Combination tax and revenue bonds 27,887,899 - 3,602,912 24,284,987 3,704,055 General obligation bonds 1,930,000 - - 1,930,000 - Accrued vacation and sick leave payable 576,071 649,392 544,343 681,120 575,000 Note payable 509,596 - 35,396 474,200 36,548 Capital leases payable 1,261,663 - 262,057 999,606 266,932 Landfill closure, post -closure costs 4,050,323 216,842 - 4,267,165 - Total business -type activities 135,427,421 866,234 7,933,072 128,360,583 8,219,948 Total long-term liabilities $203,725,255 $3,518,987 $13,595,205 $193,649,037 $14,195,075 (1) Includes bond premium amortization of $26,812 related to the general obligation bonds, $53,120 related to combination tax and revenue bonds (governmental activities), $28,364 related to revenue bonds, and $167,912 related to the combination tax and revenue bonds (business -type activities). For governmental activities, claims and judgments payable and compensated absences are generally liquidated by the General Fund. Bonds Payable Bonds payable at September 30, 2014, including net unamortized premium on the revenue bonds, are comprised of the following individual issues: Range of Final Annual Bonds Interest Maturity Serial Bonds Outstanding Rates Date Payments Authorized at 9/30/14 General Obligation Bonds: General Obligation Refunding 1.50% - 9/01/21 $4051000 to $ 4,3657000 $ 37135,000 Bonds, Series 2011 3.00% $4857000 Plus bond premium 109,866 General Obligation Refunding 1.50% - 9/01/18 $3351000 to 37407000 37365,000 Bonds, Series 2013 3.00% $21305,000 Total General Obligation Bonds 6,609,866 51 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 13 - LONG-TERM LIABILITIES (CONTD.) Range of Final Annual Bonds Interest Maturity Serial Bonds Outstanding Rates Date Payments Authorized at 9/30/14 Combination Tax and Revenue Bonds: Combination Tax and Revenue 4.90% - 8/01/16 $115,000 to 14,020,000 3,230,000 Refunding Bonds, Series 2005 5.00% $2,650,000 Plus bond premium 80,400 Combination Tax and Revenue 3.55% - 9/01 /26 $580,000 to 16,875,000 11,590,000 Certificates of Obligation, Series 2006A 5.00% $1,225,000 Plus bond premium 194,930 Combination Tax and Revenue 5.20% - 9/01/26 $130,000 to 41275,000 3,055,000 Certificates of Obligation, Series 2006B 6.25% $345,000 Plus bond premium 45,432 Combination Tax and Revenue 2.25% - 10/01/29 $340,000 to 1018201000 81800,000 Certificates of Obligation, Series 2009 4.75% $7807000 Combination Tax and Revenue 5.60% 2/01/25 $1652000 to 319301000 331801000 Certificates of Obligation, Series 2010 $375,000 Combination Tax and Revenue 2.00% - 8/01/18 $170,000 to 9,830,000 8,200,000 Refunding Bonds, Series 2010 4.00% $37600,000 Plus bond premium 279,588 Combination Tax and Revenue 2.00% - 9/01/31 $1357000 to 352001000 2,930,000 Certificates of Obligation, Series 2011 4.00% $2207000 Plus bond premium 77,112 Combination Tax and Revenue 2.00% - 9/01/33 $530,000 to 1958751000 19,345,000 Certificates of Obligation, Series 2013 3.375% $173155000 Plus bond premium 85,028 Combination Tax and Revenue 2.00% - 9/01/33 $505,000 to 13,0007000 1214955000 Certificates of Obligation, Series 2013A 4.625% $9051000 Total Combination Tax and Revenue Bonds 73.587.490 Revenue Bonds: Water & Sewer System Priority 4.00%- 8/01 /27 $225,000 to 103,495,000 95,505,000 Lien Refunding Revenue Bonds, 4.50% $1130707000 Series 2007 Plus bond premium 218,505 Total Revenue Bonds 95,723,505 Total All Bonds $175,920,861 All of the General Obligation Bonds were issued on the full faith and credit of the City and are secured by ad valorem taxes levied against all taxable property. With the exception of a portion of the Series 2013 General Obligation Refunding Bonds, these bonds are serviced by the Debt Service Fund with an apportionment of the ad valorem tax levy. At September 30, 2014, $39,776 was available in this fund to service these bonds. 52 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 13 - LONG-TERM LIABILITIES (CONTD.) The Combination Tax and Revenue Bonds are secured by ad valorem taxes levied against all taxable property as well as a pledge of surplus net revenues of the City's combined waterworks and sewer system. The Series 2003, 2010 and 2011 Certificates will be serviced by the Debt Service Fund by contributions from the Wichita Falls 4B Economic Development Corporation. The Series 2004 and the Series 2005 Certificates will be serviced by the net revenues of the Water and Sewer Fund, as well as the Series 2010 Combination Tax and Revenue Refunding Certificates and a portion of the Series 2013 General Obligation Refunding Bonds. All of the Water and Sewer Revenue Bonds were issued for purposes of improving the City's water and sewer systems and are serviced by the net revenues of the Water and Sewer Fund. Notes Payable The City of Wichita Falls and Wichita County Water Improvement District Number 2, upon the completion of the Lake Kemp reconstruction project in January 1976 by the U.S. Government, are required to reimburse the U.S. Government 22.7% of its reported total cost of $8,774,705, or $1,991,858. The City's share of this amount is 66.11 %, or $1,316,817, payable in forty-nine annual installments through January 2025 of $51,974, which includes interest at the rate of 3.253%. The City's share of the total costs ($5,800,957) as well as the U.S. Government funded portion ($4,484,140) is reflected as capital assets in the Water and Sewer Enterprise Fund. This contractual arrangement is strictly a cost -sharing agreement and is not considered a joint venture as defined in Section J50 of the Codification of Governmental Accounting and Financial Reporting Standards. The remaining debt payable to the U.S. Government at September 30, 2014 is classified as follows: Long-term $4371652 Current portion 36,548 Total $474.200 Capital Leases Payable The City issued a capital lease in 2012 for the purchase of fire department equipment in the amount of $1,466,854. The asset is listed under "Motor Vehicles" in the business -type activities. The lease carries an interest rate of 1.57% and matures in 2016. This capital lease is recorded in the Fleet Maintenance Internal Service Fund and is included in the business -type activities of the government -wide statements. The City also entered into a capital lease agreement in 2012 to finance a portion of an energy efficiency project that includes several City facilities. The capital lease financed $4,419,310 of the total project. The assets are listed under "Buildings, systems and improvements" in both Governmental Activities and Business -type Activities. The lease carries an interest rate of 2.54% and is for a period of 12 years, with final payment due in fiscal year 2024. 53 Lf) OO 00 00 N cfl � C� Z O V W F 0% Z J J N Q Q � LL F- M Q J w am V C = Z W Z a LL ♦♦vW^^ I LL W O H O t cn W F- O Z O O 4- U) L r C) N co N E a) 0- V J 0 40 L c� L 0 L CD Q .Q CD E z U O C ) O CD L J +� CU ca C6 C� N z 0 � J Q M N O z C7) N r CO M f` LO M O i O ,:1- 00 O 00 f` r N CO CO 00 f` m r U) CO N "t N 0) LO r O) r - CO Cfl L1) Ln LC) 1` H} r C5- O ~ LO ti O N � _ O00 L� f� f- r f- r O LO Ln 00 C9 LC) Ln P- N U ,:1- 00 N N It N LO 00 i r r r r N N r r N r O N 00 (9 E9} N 00 O 00 ,:I- N O Ln r CA r O m }, CO O Ln O) r I` 00 CO M LO 00 LO m r r N Cn N J N f� CO LC) O co CO r 1` 00 O +' V O Lo Ln CY) O LC) Ln C9 CO 'Zi I` Ln CO co co M M O + N N M N O O 1` M 't m M O to ' N i Lr) Ili M r O O r r r r r r co m 0- Cn 0 CU 00 f` N r M M z0 Cl _ U LO m N LOIt ' (D CO M f- co 00 O M It r It 00 O (14 LC) N OM + CO O Ln � O I- O r 00 � LO N ' r C7) O z N CO Ln Cn N r (N LO O O M CY) f- r- LO r f- r O � - Ili M M cli N r r O m �} CU M O C9 O N 00 CD r It N It CO r CM M LO N CO LO 00 00 ' U M CO CA f- ' O) r CO r 00 CA Liz a M M M It 00 (D N � LO It O L) L� ti r COO LO LO (D O CO M CU CU N 00 N O CO M O O) d) O M O (D (D CO (fl (D zl- 00 00 M U) xr r r r r r Ln N C N O_ }' C m O M It LO O 00 LO > (fl "t M N r M O M't't 't LO M M � N CO N r E U O M Ni C14 ti LO N LO N co O CC) It N LO a) 00 Us= a CO ":ICO 1- CO M CO 00 to;- r r Cfl O N O r N o M r O 00 CA (CS O r r Ctf f LUC) M .. (D M 1 1 U O N O r 00 C6 N � 00 69- N O O co o 0 0 � C= E w i a)N N U') co ti 00 O O r r r r r N O O O O O O N N Lf) C) co O O Liz CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 14 - INTERFUND BALANCES Due To Fund Due From Fund Amount Purpose General Fund Airport Improvement Grant Fund $531289601 Short-term loan General Fund Nonmajor Governmental Funds 17253,686 Short-term loan General Fund Water and Sewer Fund 54,368 Short-term loan General Fund Nonmajor Enterprise Funds 840,659 Short-term loan General Fund Internal Service Funds 116,646 Short-term loan Total $7393, 960 All amounts due are scheduled to be repaid within one year. Transfers to and from other funds during the year ended September 30, 2014 were as follows: Transfers From General Fund General Fund General Fund General Fund General Fund General Fund Airport Improvement Grant Fund Airport Improvement Grant Fund Airport Improvement Grant Fund Nonmajor Governmental Funds Nonmajor Governmental Funds Nonmajor Governmental Funds Nonmajor Governmental Funds Water and Sewer Fund Water and Sewer Fund Water and Sewer Fund Sanitation Fund Sanitation Fund Sanitation Fund Sanitation Fund Regional Airport Fund Regional Airport Fund Regional Airport Fund Nonmajor Enterprise Funds Nonmajor Enterprise Funds Nonmajor Enterprise Funds Nonmajor Enterprise Funds Nonmajor Enterprise Funds Internal Service Funds Internal Service Funds Transfers To Amount Reason Nonmajor Governmental Funds $ 1,000,529 Supplement operating deficits Nonmajor Governmental Funds 279,445 Supplement capital projects Nonmajor Governmental Funds 158,855 Supplement operating grants Internal Service Funds 947102 Purchase capital assets Water and Sewer Fund 2937500 Supplement operating projects Water and Sewer Fund 17717 Purchase capital assets Nonmajor Governmental Funds 87453,356 Supplement capital grants Regional Airport Fund 1,7141105 Purchase capital assets Nonmajor Governmental Funds 6547612 Fund debt service payment Nonmajor Governmental Funds 280,000 Fund debt service payment Nonmajor Governmental Funds 1,535,920 Fund operating deficits Regional Airport Fund 21,8587040 Purchase capital assets Water and Sewer Fund 536,810 Fund construction projects General Fund 1,011,203 Administrative overhead Nonmajor Governmental Funds 5007000 Fund debt service payment Internal Service Funds 80,055 Purchase capital assets General Fund 17413,445 Administrative overhead Water and Sewer Fund 32,395 Purchase capital assets Internal Service Funds 8367536 Purchase capital assets Internal Service Funds 153,523 Purchase software Nonmajor Governmental Funds 318,179 Fund debt service payment Nonmajor Governmental Funds 467994 Supplement operating grant Nonmajor Governmental Funds 57000 Supplement project funding General Fund 1167111 Administrative overhead General Fund 197056 Interfund services Nonmajor Governmental Funds 49,602 Supplement operating grant Nonmajor Governmental Funds 4507813 Fund debt service payment Internal Service Funds 207965 Purchase capital assets General Fund 3127000 Administrative overhead Nonmajor Governmental Funds 38,392 Purchase software Total $42.265,260 55 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 15 - LANDFILL AND TRANSFER STATION CLOSURE AND POSTCLOSURE CARE COSTS State and federal laws and regulations require that the City place a final cover on its landfill when closed, and perform certain maintenance and monitoring functions at the landfill site for thirty years after closure. In accordance with the Texas Administrative Code, Title 30, Part 1, Chapter 7, the City annually submits a financial assurance letter to the Texas Commission on Environmental Quality (TCEQ). In addition to operating expenses related to current activities of the landfill, an expense provision and related liability are being recognized based on the future closure and postclosure care costs that will be incurred near or after the date the landfill no longer accepts waste. The recognition of these landfill closure and postclosure care costs is based on the amount of the landfill used during the year. The estimated liability for landfill closure and postclosure care costs has a balance of $4,200,721 as of September 30, 2014, which is based on 19% usage of the landfill. The City will recognize the remaining estimated cost of closure and postclosure care of $16,931,402 as the remaining estimated capacity is filled. The landfill is expected to be filled to capacity in 2153. Additionally, the City has recorded a liability of $66,444 for closure and postclosure care costs related to the City's transfer station. Actual costs may be higher due to inflation, change in technology, or changes in regulations. Note 16 - COMMITMENTS AND CONTINGENCIES Litigation The City is a defendant in numerous lawsuits. In the opinion of the City's management, any unrecorded liabilities resulting from such suits will not materially affect the financial position of the City. Accrued Vacation and Sick Leave The City's liability for accrued vacation and sick leave, excluding the amount recorded in the proprietary funds, was $7,667,389 at September 30, 2014. This accrual is recorded as a long- term liability in the Government -wide Statement of Net Position. Contract Commitment With West Texas Utilities Company In 1977, the City and Wichita County Water Improvement District Number 2 entered into a sixty - year contract with the West Texas Utilities Company (the Company) and agreed to provide an adequate water supply for the Company's use in generating power upon completion of the Company's construction of a power plant adjacent to the Lake Kemp -Lake Diversion System. The significant terms of the contract provide for standby charges to be paid to the City and the Wichita County Water Improvement District Number 2 in equal amounts. Minimum charges for the calendar year 1997 and all years thereafter until the end of contract will be $500,000 per year. For water actually consumed, the Company shall pay the City and Wichita County Water Improvement District Number 2 equally, at the base rate of $0.23 per one thousand gallons, which is adjusted annually. The rate for the year ended September 30, 2014 was $.404046 per one thousand gallons. This contract can be terminated at any time by the Company. If the contract is terminated, the Company is required to make a maximum termination payment equal to the minimum charges which would have become due and payable during the following twenty-four month period. 56 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 16 - COMMITMENTS AND CONTINGENCIES (CONTD.) Contract Commitments At September 30, 2014, the City was committed to various contracts. The amounts for which the various funds are committed to complete these contracts are as follows: General Fund $ 11586,340 Airport Improvement Grant Fund 251,818 Nonmajor Governmental Funds 11772,669 Water and Sewer Fund 112817429 Sanitation Fund 113347907 Nonmajor Enterprise Funds 614083730 Internal Service Funds 1,228,787 Total contract commitments - City $ 13,864,680 Additionally, component units are committed to various contracts as of September 30, 2014. The remaining commitments are as follows: Wichita Falls Economic Development Corporation $ 537,050 Wichita Falls 4B Sales Tax Corporation $ 159,994 Federal and State Grants - Compliance Audits The City participates in numerous Federal and State grants, on both a direct and state pass - through basis, as well as on a service -provider basis. Principal among these are Community Development Block Grants, Section 8 Housing Assistance, Home Investment Partnership Agreement Program, and numerous health -related grants. In connection with these grants, the City is required to comply with specific terms and agreements as well as applicable Federal and State laws and regulations. Such compliance is subject to review and audit by the grantors and their representatives. In the opinion of management, the City has complied with all requirements. However, since such programs are subject to future audit or review, the possibility of disallowed expenditures exists. In the event of any disallowance of claimed expenditures, the City expects the resulting liability to be immaterial. 57 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 17 - CONDENSED FINANCIAL INFORMATION FOR DISCRETELY PRESENTED COMPONENT UNITS The City has four component units that are discretely presented in the City's basic financial statements. Condensed financial information for the year ended September 30, 2014 is as follows: Wichita Falls Wichita Falls Economic 4B Sales Wichita Falls Wichita Falls Development Tax Reinvestment Reinvestment Corporation Corporation Zone #2 Zone #3 Totals Condensed statement of net position: Cash, investments and other current assets $ 17,470,802 $ 2,432,821 $ - $ 2321249 $20,1351874 Capital assets, net of accumulated depreciation 2,226,538 - - - 2,226,538 Total assets 19,697,340 2,432,821 - 232,249 22,362,412 Accounts payable and other current liabilities 16,113 2,572 - - 18,685 Total liabilities 16,113 2,572 - - 18,685 Net position $ 19,681,227 $ 2,430,249 $232,249 $22,343,727 Condensed statement of activities: Expenses: Community development $ 3,077,579 $ 4,109,835 $410,236 - $ 7,597,650 Program revenues: Charges for services 1061800 - - - 1061800 Operating grants and contributions - 410,236 - - 410,236 Total program revenues 106,800 410,236 - - 517,036 Net program expense ( 2,970,779) ( 3,699,599) ( 410,236) - ( 7,080,614) General revenues and special item: Tax revenues 317325923 3,732,923 410,164 60,497 7,9367507 Non -tax general revenues 7355537 117,525 72 64 8537198 Special item 329,701 - - - 329,701 Total general revenues and special item 4,798,161 3,850,448 410,236 60,561 9,119,406 Change in net position 1,8271382 150,849 - 607561 2,0381792 Beginning net position 17,853,844 2,279,400 - 171,688 20,304,935 Ending net position $ 19,681,226 $ 2,430,249 $232,249 $22,343,727 58 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2014 Note 18 - SUBSEQUENT EVENT In January 2015, the City issued "Combination Tax and Revenue Certificates of Obligation, Series 2015" in the amount of $33,545,000. The proceeds from these bonds will be used to finance the construction of the Indirect Potable Reuse Project as the City continues to increase water conservation. The bonds will be financed by revenues of the Water and Sewer Fund and will be repaid over 30 years in principal amounts ranging from $720,000 to $1,745,000. Note 19 - SUBSEQUENT PRONOUNCEMENTS In June 2012, the GASB issued GASB Statement No. 68 to amend GASB Statements 27 and 50. The statement is effective for years beginning after June 15, 2014 and addresses accounting and financial reporting for pensions that are provided to the employees of state and local government employers. This statement will affect the City's reporting of its governmental activities and business -type activities on the government -wide statements as well as the enterprise fund statements as of and for the year ended September 30, 2015, although the impact of applying the statement is unknown at this time. 59 Required Supplementary Information EXHIBIT B-1 CITY OF WICHITA FALLS, TEXAS REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE -GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 Revenues: Taxes Charges for services Licenses and permits Fines and forfeitures Intergovernmental revenue Contributions Miscellaneous revenue Total revenues Expenditures: Current: Administrative services Police Fire Parks and recreation Accounting/finance Community development Public works Health Traffic and transportation Capital outlay Total expenditures Excess of revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Excess of revenues and other sources over (under) expenditures and other uses Fund balance - beginning Fund balance - ending Variance With Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) $ 56, 874, 962 $ 56, 874, 962 $ 57,124, 524 $ 249,562 21709, 034 21709, 034 2,582,658 (126,376) 1,971,653 1,971,653 2,048,293 76,640 2,080,000 2,080,000 25209,697 129,697 141146 141146 8,537 (5,609) 136,261 136,261 276,224 139,963 1,005,327 1,005,327 15278,815 273,488 64, 791, 383 64, 791, 383 65, 528, 748 737,365 12,313,320 12,270,211 12,035,548 234,663 21,340,667 211418,658 21,343,577 75,081 13, 551,421 13, 981, 382 13, 972, 673 8,709 5,211,477 5,081,561 4,871,353 210,208 7961416 8385991 831,313 71678 119627127 119241223 1,816,232 107,991 553067840 512711471 592665380 51091 310087853 217261014 217141462 111552 118387249 119211059 118941231 261828 353037486 318041567 213795756 114245811 68, 632, 856 6912381137 67,125, 525 21112 5612 (3,841,473) (4,446, 754) (1,596,777) 2,849,977 258521759 258521759 25871,815 19,056 (411,861) (1,774,324) (1,828,148) (53,824) 2,4401898 1, 078,435 1, 043, 667 (34,768) (1,400,575) (31368,319) (553,110) 21815,209 CITY OF WICHITA FALLS, TEXAS NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2014 Demonstrating compliance with the adopted budget is an important component of a government's accountability to the public. Many citizens participate in the process of establishing the annual operating budgets of state and local governments, and have a keen interest in following the actual financial progress of their governments over the course of the year. The City and many other governments revise their original budgets over the course of the year for a variety of reasons. Under the new reporting model, governments will continue to provide budgetary comparison information in their annual reports. An important change, however, is a requirement to add the government's original budget to the current comparison of final budget and actual results. The City adheres to the following procedures in establishing the operating budget reflected in the basic financial statements: On or before August 15 of each year, the City Manager submits to the City Council a proposed budget for the fiscal year beginning the following October 1. The operating budget includes proposed expenditures and the means of financing them. Public hearings are conducted. The budget is legally enacted by the City Council through passage of appropriation and tax levying ordinances prior to September 30 and is published under a separate cover. An annual budget, including debt service requirements, is legally adopted for the General Fund, the Community Development Block Grant Fund, the Section 8 Housing Fund, the HOME Investment Partnership Agreement Fund, the Hotel/Motel Tax Fund, the Golf Fund, the MPEC Fund and the Debt Service Fund, on a basis which is consistent with generally accepted accounting principles. The City Council must approve any transfer of appropriation balances or portions thereof from one department to another. The City Manager has the authority, without City Council approval, to transfer appropriation balances from one expenditure account to another within a single department of the City. Supplemental appropriations of $605,281 were approved by the City Council. The reported budgetary data includes amendments made during the year. At the close of each fiscal year, any unencumbered appropriated balance lapses to the unreserved fund balance. The unencumbered appropriation balances in the Capital Projects Funds do not lapse at year end. 61 EXHIBIT B-2 CITY OF WICHITA FALLS, TEXAS TEXAS MUNICIPAL RETIREMENT SYSTEM - ANALYSIS OF FUNDING PROGRESS - LAST TEN PLAN YEARS (UNAUDITED)* (1) (2) (3) (4) (5) (6) Unfunded UAAL as a Actuarial Actuarial Actuarial Percentage Actuarial Accrued Annual Percentage of Valuation Value Accrued Funded Liability (UAAL) Covered Covered Payroll Date of Assets Liability (AAL) (1) _ (2) (2) - (1) Payroll (4) _ (5) 12/31 /04 $ 70,4621244 $ 985405,860 71.6% $ 275943,616 $ 335522,283 83.4% 12/31/05 715393,893 1015093,789 70.6% 2956995896 3258465479 90.4% 12/31 /06 69, 201,457 100, 991, 795 68.5% 31, 790, 338 33, 791, 762 94.1 % 12/31/07 (1) 7055617545 1205374,701 58.6% 4%8135156 35,8735970 138.9% 12/31 /08 68,9107226 1225001,202 56.5% 53,090,976 38,2725312 138.7% 12/31 /09 71,505,945 125,3251301 57.1 % 53,81 %356 39,020,039 137.9% 12/31 /10 (2) 155,809,040 1935990,630 80.3% 38,181,590 38,337,008 99.6% 12/31 /11 164,2061444 201,1601651 81.6% 36,954,207 387791,669 95.3% 12/31 /12 1725839,281 2065427,900 83.7% 33,588,619 3%52%771 85.0% 12/31 /13 1825577,734 2275614,915 80.2% 45,037,181 40,702,275 110.7% Analysis of the dollar amounts of the actuarial value of assets, actuarial accrued liability, and unfunded actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a percentage of the actuarial accrued liability provides one indication of the City's funding status on a going -concern basis. Analysis of this percentage over time indicates whether the system is becoming financially stronger or weaker. Generally, the greater this percentage, the stronger the pension plan. Trends in unfunded actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing the unfunded actuarial accrued liability as a percentage of annual covered payroll approximately adjusts for the effects of inflation and aids analysis of the City's progress made in accumulating sufficient assets to pay benefits when due. Generally, the smaller this percentage, the stronger the pension plan. * This City retirement plan is substantially a defined contribution plan. These voluntary disclosures, similar to the disclosures required for a defined benefit plan, are provided for additional analysis of the plan. (1) TMRS made changes to both the actuarial funding method and actuarial assumptions for the 2007 valuation. (2) TMRS, with the approval of the Texas Legislature, amended the fund structure of the plan as of December 31, 2010. •+ EXHIBIT B-3 CITY OF WICHITA FALLS, TEXAS WICHITA FALLS FIREMEN'S RELIEF AND RETIREMENT FUND - ANALYSIS OF FUNDING PROGRESS (UNAUDITED) (1) Actuarial Actuarial Valuation Value P1 _1 _ _l A _ _ _ 1_ 12/31 /04 $ 32 7240, 524 12/31 /05 (a) - 12/31 /06 35,584,639 12/31 /07 (a) - 12/31 /08 39, 358, 309 12/31 /09 (a) - 12/31 /10 417107,385 12/31 /11 (a) - 12/31 /12 41,964,674 12/31 /13 (a) - (2) (3) (4) (5) (6) Unfunded UAAL as a Actuarial Percentage Actuarial Accrued Annual Percentage of Accrued Funded Liability (UAAL) Covered Covered Payroll Liability (AAL) (1) _ (2) (2) - (1) Payroll (4) _ (5) $ 4211787490 76.4% $ 91937,966 $ 7,175,196 138.5% 47, 582,190 74.8 % 11, 997, 551 7,697,370 155.9% 541260, 301 72.5% 14, 901, 992 8,915,419 167.1 % 60,152,150 68.3% 19,044,765 8,527,417 223.3% 66,606,163 63.0% 24,641,489 8,962,581 274.9% Analysis of the dollar amounts of the actuarial value of assets, actuarial accrued liability, and unfunded actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a percentage of the actuarial accrued liability provides one indication of the City's funding status on a going -concern basis. Analysis of this percentage over time indicates whether the system is becoming financially stronger or weaker. Generally, the greater this percentage, the stronger the pension plan. Trends in unfunded actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing the unfunded actuarial accrued liability as a percentage of annual covered payroll approximately adjusts for the effects of inflation and aids analysis of the City's progress made in accumulating sufficient assets to pay benefits when due. Generally, the smaller the percentage, the stronger the pension plan. (a) Historical trend information is presented for as many years as such information about the plan is available. No actuarial valuation or update was performed as of these dates. Texas state law does not require an actuarial valuation to be completed annually. 63 EXHIBIT B-4 Actuarial Actuarial Valuation Value r,%_i_ _r n __ _i_ 12/31 /06 (a) $ - 12/31 /07 (b) - 12/31 /08 - 12/31 /09 (b) - 12/31 /10 853,478 12/31 /11 (b) - 12/31/12 17709,516 12/31 /13 (b) - CITY OF WICHITA FALLS, TEXAS WICHITA FALLS RETIREE HEALTH CARE PLAN - ANALYSIS OF FUNDING PROGRESS (UNAUDITED) (2) (3) (4) (5) (6) Unfunded UAAL as a Actuarial Percentage Actuarial Accrued Annual Percentage of Accrued Funded Liability (UAAL) Covered Covered Payroll Liability (AAL) (1) _ (2) (2) - (1) Payroll (4) _ (5) $ 29,656,852 0.0% $ 29,656,852 $ 40,021,675 74.1 % 32 7143, 378 0.0 % 32,143, 378 43, 571, 340 73.8% 3274097858 2.6% 31,556,380 473297,531 66.7% 327117,774 5.3% 30,408,258 48,492,352 62.7% Analysis of the dollar amounts of the actuarial value of assets, actuarial accrued liability, and unfunded actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a percentage of the actuarial accrued liability provides one indication of the City's funding status on a going -concern basis. Analysis of this percentage over time indicates whether the system is becoming financially stronger or weaker. Generally, the greater this percentage, the stronger the pension plan. Trends in unfunded actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing the unfunded actuarial accrued liability as a percentage of annual covered payroll approximately adjusts for the effects of inflation and aids analysis of the City's progress made in accumulating sufficient assets to pay benefits when due. Generally, the smaller the percentage, the stronger the pension plan. (a) The first actuarial valuation was performed as of December 31, 2006 as the City began to prepare for the implementation of GASB 45. (b) Historical trend information is presented for as many years as such information about the plan is available. No actuarial valuation or update was performed as of these dates. Texas state law does not require an actuarial valuation to be completed annually. 64 Combining Financial Statements Nonmajor Governmental Funds Special Revenue Funds The special revenue funds are used to account for the proceeds from specific revenue sources (other than for major capital projects or proprietary funds) that are either legally restricted to be expended for specified purposes or have revenue sources committed for specific purposes. Community Development Block Grant Fund The Community Development Block Grant Fund accounts for federal block grant revenues and related expenditures. Section 8 Housing Fund The Section 8 Housing Fund accounts for federal funds received to subsidize rents and housing payments for lower income families within the City. Home Investment Partnership Agreement Fund The Home Investment Partnership Agreement Fund accounts for federal funds received to provide home ownership opportunities to low income, first-time homebuyers through the acquisition, rehabilitation and resale of single-family dwellings that are currently owned by governmental agencies. Hotel/Motel Tax Fund The Hotel/Motel Tax Fund accounts for revenues derived from an occupancy tax which is expended on programs promoting the growth of the City of Wichita Falls. Golf Fund The Golf Fund accounts for the activities at the Weeks Park Golf Course. MPEC Fund The MPEC Fund is used to account for the operations of the City's Multi -Purpose Events Center. Miscellaneous SDecial Revenue Fund The Miscellaneous Special Revenue Fund accounts for various revenues generated in the form of contributions, fees, concessions, rents and other charges and their related expenditures. This fund also includes revenues derived from various grants for health and police programs. The revenues in this fund are expended to support the activity generating the revenue or as designated by the contributor. This fund is not required to have a legally adopted budget; therefore no budgetary comparison schedule is presented. Debt Service Funds Debt Service Fund The Debt Service Fund is established by ordinances authorizing the issuance of general obligation bonds to provide for the payment of bond principal and interest. An ad valorem tax rate and tax levy are required to be computed and levied which will be sufficient to produce the funds required to pay principal and interest as they come due. This fund is also used to provide for the payment of paying agent fees. Excess Sales Tax Fund The Excess Sales Tax Fund is used to account for and administer the excess sales tax collected related to the property reduction tax. This fund is not required to have a legally adopted budget; therefore no budgetary comparison schedule is presented. Capital Projects Funds The capital projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities, other than those financed by federal grants or proprietary funds. 4B Sales Tax Proiects This fund was established to account for projects financed by the Wichita Falls 4B Sales Tax Corporation. Significant projects accounted for in this fund included the construction of three fire stations and the renovation of the second floor of the Wichita Falls Public Library building for recreational purposes. Airport Construction Fund This fund was established to account for the construction of a new terminal building at Municipal Airport. This fund includes the proceeds of the Combination Tax and Revenue Certificates of Obligation, Series 2013, which will be used to fund a portion of the construction project. The City will also receive federal grant funding for a portion of the project. Miscellaneous Capital Projects Funds This fund is an accumulation of several projects that have been undertaken over the years including library renovations, street improvements and drainage improvements. Permanent Fund The permanent fund is used to account for principal trust amounts received and related interest income. 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U CO a) c a) U D U p .O- c 0 y _ �-� O C p-0 L 'O i a) L C L a) a) a) O p C O C C°)n C 7 > O c U p U p Co 0 O c a) a) a) U O O " 6 U U C E i E C N c C a) to p O H Cn O] a) c x a`) . .�� C = a) Y E L C6 C6 N .0 a) H 0 -0 O m O C a) C c Q ii U d= H .Q d p '1 C6 CL 7 CL 7 4) 0 0� c co C6 a) C � -p U) U) C6 f6 co c c Q> m L -0 -0 a) mc O > H U LLcn U ll� O 7 C6 a) a U U D W a) C O O C6 C6 U U �_ 00 tZ o0 d U d H H W O Z LL LL EXHIBIT C-3 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE -COMMUNITY DEVELOPMENT BLOCK GRANT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 Variance With Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Charges for services $ - $ - $ 12,230 $ 125230 Intergovernmental revenue 1,156,356 15156,356 15156,356 - Total revenues 15156,356 15156,356 15168,586 125230 Expenditures: Administrative services 120,000 119,999 119,999 - Community development 819,271 1,346,170 823,458 522,712 Public works 100,000 100,000 100,000 - Capital outlay 1575085 130,746 - 1305746 Total expenditures 151965356 15696,915 15043,457 653,458 Excess of revenues over (under) expenditures (40,000) (540,559) 125,129 665,688 Other financing sources (uses): Transfers out - - (130,746) (130,746) Total other financing sources (uses) - - (130,746) (130,746) Net change in fund balance (40,000) (540,559) (5,617) 534,942 Fund balance - beginning 542,358 542,358 535,387 (6,971) Fund balance - ending $ 502,358 $ 11799 $ 529,770 $ 527,971 67 EXHIBIT C-4 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE -SECTION 8 HOUSING FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 Variance With Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Intergovernmental revenue $ 3,569,066 $ 3,569,066 $ 3,224,227 $ (344,839) Miscellaneous revenue - - 4,595 4,595 Total revenues 3,569,066 3,569,066 3,228,822 (340,244) Expenditures: Community development 3,567,650 3,567,650 3,445,970 121,680 Capital outlay 15416 1,416 - 1,416 Total expenditures 3,569,066 3,569,066 3,445, 970 123,096 Excess of revenues over expenditures - - (217,148) (217,148) Fund balance - beginning 1,234,910 15234,910 15234,910 - Fund balance - ending $ 1,234,910 $ 15234,910 $ 1,017,762 $ (217,148) .: EXHIBIT C-5 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE -HOME INVESTMENT PARTNERSHIP AGREEMENT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 Variance With Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Intergovernmental revenue $ 325,444 $ 325,444 $ 325,444 $ - Miscellaneous revenue - - 4,324 4,324 Total revenues 325,444 325,444 329,768 4,324 Expenditures: Community development 325,444 995,105 399,111 595,994 Total expenditures 325,444 995,105 399,111 595,994 Excess of revenues over (under) expenditures - (669,661) (69,343) 600,318 Fund balance - beginning 8075431 8075431 8075430 (1) Fund balance - ending $ 8075431 $ 1375770 $ 7385087 $ 600,317 EXHIBIT C-6 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE -HOTEL/MOTEL TAX FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 Variance With Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Taxes $ 1,600,000 $ 1,600,000 $ 1,641,749 $ 41,749 Total revenues 1,600,000 1,600,000 1,641,749 411749 Expenditures: Administrative services 93,500 93,500 93,499 1 Total expenditures 93,500 93,500 93,499 1 Excess of revenues over expenditures 1,506,500 1,506,500 1,548,250 41,750 Other financing sources (uses): Transfers out (1,535,920) (1,535,920) (1,535,920) - Total other financing sources (uses) (1,535,920) (1,535,920) (1,535,920) - Excess of revenues and other sources over (under) expenditures and other uses (29,420) (29,420) 12,330 413750 Fund balance - beginning 17,391 17,391 17,391 - Fund balance - ending $ (12,029) $ (12,029) $ 29,721 $ 41,750 70 EXHIBIT C-7 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE -GOLF FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 Variance With Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Charges for services $ 740,000 $ 740,000 $ 458,754 $ (281,246) Miscellaneous revenue - - 329,683 329,683 Total revenues 740,000 740,000 788,437 48,437 Expenditures: Administrative services 850,000 850,000 840,218 9,782 Total expenditures 850,000 850,000 840,218 9,782 Excess of revenues over (under) expenditures (110,000) (110,000) (51,781) 58,219 Other financing sources (uses): Transfers in 110,000 110,000 129,781 19,781 Total other financing sources (uses) 110,000 110,000 129,781 19,781 Excess of revenues and other sources over (under) expenditures and other uses - - 78,000 78,000 Fund balance - beginning 311780 31,780 311780 - Fund balance - ending $ 315780 $ 31,780 $ 109,780 $ 78,000 71 EXHIBIT C-8 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - MPEC FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 Variance With Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Charges for services $ 180,644 $ 180,644 $ 185,322 $ 4,678 Miscellaneous revenue 1,516,823 1,516,823 1,368,409 (148,414) Total revenues 1,697,467 1,697,467 1,553,731 (143,736) Expenditures: MPEC 3,246,014 3,603,442 3,494,371 109,071 Capital outlay - 190,533 - 190,533 Total expenditures 3,246,014 3,793,975 3,494, 371 299,604 Excess of revenues over (under) expenditures (1,548,547) (2,096,508) (1,940,640) 155,868 Other financing sources (uses): Transfers in 1,548,547 1,828,547 1,940,640 112,093 Total other financing sources (uses) 1,548,547 1,828,547 1,940,640 112,093 Excess of revenues and other sources over (under) expenditures and other uses - (267,961) - 267,961 Fund balance - beginning 236,369 236,369 236,369 - Fund balance - ending $ 236,369 $ (31,592) $ 236,369 $ 267,961 72 EXHIBIT C-9 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE -DEBT SERVICE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 Variance With Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Taxes $ 7187884 $ 718,884 $ 7051096 $ (13,788) Contributions 4,6061535 476067535 254021930 (2,2037605) Miscellaneous revenue - - 28 28 Total revenues 553257419 57325,419 351081054 (2,217,365) Expenditures: Debt service - principal 31000,000 31000,000 3,000,000 - Debt service - interest and paying agent fees 21375,419 213757419 253421331 331088 Total expenditures 55375,419 573757419 553421331 335088 Excess of revenues over (under) expenditures (50,000) (50,000) (25234,277) (2,184,277) Other financing sources (uses): Transfers in - - 272031604 272037604 Total other financing sources (uses) - - 272037604 272037604 Excess of revenues and other sources over (under) expenditures and other uses (50,000) (50,000) (30,673) 191327 Fund balance - beginning 707448 701448 707449 1 Fund balance - ending $ 207448 $ 201448 $ 397776 $ 195328 73 Nonmajor Enterprise Funds Nonmajor enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises. The intent of the governing body is that the cost of providing the service to the general public on a continuing basis be recovered primarily through user charges. Kickapoo Airport Fund During the year ended September 30, 2000, the City acquired Kickapoo Downtown Airport, a private airport. The Kickapoo Airport Fund was established to account for the operating revenues and expenses of the airport. Transit Rind The Transit Fund accounts for the operation of the Wichita Falls transit system. This system is supported from passenger fees, subsidies from the General Fund and subsidies from the Federal Transit Administration. Stormwater Drainaae Fund The Stormwater Drainage Fund was established to account for operating revenues and expenses associated with the Storm Water Drainage Utility System (System). The System was established effective May 1, 2001 and provides a funding mechanism for drainage improvements in the City. Waterpark Fund The Waterpark Fund was established to account for the operating revenues and expenses of the Castaway Cove Waterpark. 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O a)N N — O N +r O >, OL O E o MU O (o (n a) Co O a)� U) i E"0 m >+ U 0) �--. � Co c O ° � a) °� m a) 0-Q > O Co U a) O O fn En c' a) U (n Co a> j .� (n '� O O N z C cn � o L O � Z- Q H E 0 co a)> a) Q a> M U U A U O> a� U U U m �--� m c U Q Q Q a 0 a O m co 0 0 Internal Service Funds Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City on a cost -reimbursement basis. Fleet Maintenance Fund The Fleet Maintenance Fund accounts for the costs associated with the operation, maintenance and replacement of the City's vehicle and equipment fleet. City departments which use the vehicles and equipment are charged a monthly rental fee based upon actual operating costs associated with each class of vehicle or equipment. Duplicating Services Fund The Duplicating Services Fund accounts for the costs associated with the operation and maintenance of the City's duplicating equipment. City departments which use the duplicating services are charged a fee based upon actual usage. Employee Benefit Trust Fund The Employee Benefit Trust Fund is used insurance, which is self -insured by the City, dependents. Information Technology Fund to account for and administer group health and life insurance for employees and covered The Information Technology Fund accounts for the costs associated with the operation and maintenance of the City's Information Technology assets. City departments which use information technology are charged a fee based on usage. EXHIBIT E-1 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30, 2014 Employee Information Fleet Duplicating Benefit Technology Maintenance Services Trust Fund Totals ASSETS Current assets: Cash and cash equivalents $ 503,180 $ - $ (421,414) $ 2,667,756 $ 2,749,522 Restricted cash and cash equivalents - - 3,568,494 - 3,568,494 Receivables: Other 27,993 - (35) - 27,958 Inventory 782,706 - - - 782,706 Prepaid items 253,111 488 - - 253,599 Total current assets 1,5667990 488 31147,045 207,756 7,382,279 Capital assets, net of accumulated depreciation 18,095,953 2,861 - 865,626 18,964,440 Total assets 19,662,943 3,349 3,147,045 3,533,382 26,346,719 LIABILITIES Current liabilities: Accounts payable - trade 201,580 8,210 17,149 1429170 3699109 Accrued payroll 539389 1,007 2,368 26,657 83,421 Accrued vacation and sick leave 929806 - - 54,356 1479162 Payable to other City funds - 46,916 69,730 - 1169646 Estimated health claims payable - - 595,540 - 595,540 Other liabilities 3,116 - (287) - 2,829 Capital leases - current maturities 2377820 - - - 2371820 Total current liabilities 588,711 56,133 6847500 2231183 175521527 Long-term liabilities: Capital leases, less current maturities 498,279 - - - 4981279 Total liabilities 1,0861990 56,133 684,500 2231183 2,0501806 NET POSITION Net investment in capital assets 179359,854 2,861 - 865,626 18,2289341 Unrestricted 15216,099 (55,645) 2,462,545 25444,573 6,067,572 Total net position $ 18,575,953 $ (52784) $ 2,462,545 $ 3,310,199 $ 24,295,913 78 EXHIBIT E-2 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2014 Employee Information Fleet Duplicating Benefit Technology Maintenance Services Trust Fund Totals Operating revenues: Charges for services $ 9,842,682 $ 154,267 $ - $ 2,998,214 $ 12,995,163 Rents, concessions and other 35,136 - 369,601 - 4041737 Contributions - - 11,592,049 - 11,592,049 Total operating revenues 9,877,818 154,267 11,961,650 2,998,214 24,991,949 Operating expenses: Personnel services 1,999,199 41,198 100,761 1,076,117 3,217,275 Supplies and materials 4,108,311 8,613 309 536,512 4,653,745 Maintenance and repairs 2,037,362 21 830 543,847 2,582,060 Utilities and other services 82,532 2,089 77,686 132,618 294,925 Insurance and contract support 132,827 39 9,643,094 - 9,775,960 Other expenses 199,483 1177296 1,675,879 13,675 2,006,333 Depreciation and amortization 3,930,628 1,174 - 198,765 47130,567 Total operating expenses 12490,342 170,430 11,498,559 2,501,534 26,660,865 Operating income (loss) (2,612,524) (16,163) 463,091 496,680 (1,668,916) Nonoperating revenues (expenses): Interest income - - 179,025 - 179,025 Gain on sale of capital assets 92,023 - - - 92,023 Interest expense (15,291) - - - (15,291) Total nonoperating revenues (expenses) 76,732 - 179,025 - 2555757 Income (loss) before transfers (2,535,792) (16,163) 642,116 496,680 (1,413,159) Transfers in 990,557 - - 194,623 11185,180 Transfers out (312,000) - - (38,392) (350,392) Change in net position (1,857,235) (16,163) 642,116 652,911 (578,371) Net position - beginning 20,433,188 (36,621) 1,820,429 2,657,288 24,874,284 Net position - endinc $ 18,575,953 $ (52,784) $ 2,462,545 $ 3,310,199 $ 24,295,913 79 EXHIBIT E-3 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2014 Employee Information Fleet Duplicating Benefit Technology Maintenance Services Trust Fund Totals Cash flows from operating activities: Received from customers and users $ 9,857,366 $ 154,267 $ 11,961,397 $ 2,998,214 $ 24,971,244 Payments to suppliers (7,402,876) (143,023) (11,366,202) (1,466,898) (20,378,999) Payments to employees (1,405,356) (31,026) (71,688) (780,264) (2,288,334) Net cash provided (used) by operating activities 1,049,134 (19,782) 523,507 751,052 2,303,911 Cash flows from noncapital financing activities: Interfund loans received - 19,782 28,621 - 48,403 Interfund loans repaid - - - - - Transfers in from other funds 990,557 - - 194,623 1,185,180 Transfers out to other funds (312,000) - - (38,392) (350,392) Net cash provided (used) by noncapital financing activities 678,557 19,782 28,621 156,231 883,191 Cash flows from capital and related financing activities: Acquisition of capital assets (2,162,749) - - (267,288) (2,430,037) Proceeds from sale of capital assets 97,372 - - - 97,372 Principal paid on long-term debt (237,820) - - - (237,820) Interest and fees paid on long-term debt (15,291) - - - (15,291) Net cash used for capital and related financing activities (2,318,488) - - (267,288) (2,585,776) Cash flows from investing activities: Interest on investments - - 179,025 - 179,025 Net cash provided by investing activities - - 179,025 - 179,025 Net Increase (Decrease) in Cash and Cash Equivalents (590,797) - 731,153 639,995 780,351 Cash and Cash Equivalents - Beginning 1,093,977 - 2,415,927 2,027,761 5,537,665 Cash and Cash Equivalents - Ending $ 503,180 $ - $ 3,147,080 $ 2,667,756 $ 6,318,016 Cash flows from operating activities: Operating income (loss) $ (2,612,524) $ (16,163) $ 463,091 $ 496,680 $ (1,668,916) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation and amortization 3,930,628 1,174 - 198,765 4,130,567 (Increase) decrease in current assets: Receivables: Other 8,826 - 35 - 8,861 Inventory (42,325) - - - (42,325) Prepaid items (253,111) 81 - - (253,030) Increase (decrease) in current liabilities: Accounts payable - trade 10,591 (1,696) (6,917) 38,099 40,077 Accrued payroll 17,501 175 443 3,016 21,135 Accrued vacation and sick leave 18,826 (3,353) - 14,492 29,965 Estimated health claims payable - - 67,143 - 67,143 Other liabilities (29,278) - (288) - (29,566) Total adjustments 3,661,658 (3,619) 60,416 254,372 3,972,827 Net cash provided (used) by operating activities $ 1,049,134 $ (19,782) $ 523,507 $ 751,052 $ 2,303,911 80 Agency Fund Escheatment Fund - The agency fund is used to account for assets held by the City of Wichita Falls in a custodial capacity. The assets in this fund have been abandoned or remain unclaimed pending escheatment to the State of Texas. EXHIBIT F-1 CITY OF WICHITA FALLS, TEXAS AGENCY FUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED SEPTEMBER 30, 2014 Balance Balance 10/1/2013 Additions Deductions 9/30/2014 ESCHEATMENT FUND Assets Cash and cash equivalents Liabilities Other liabilities $ 86,238 $ 24,353 $ 71459 $ 103,132 $ 86,238 $ 245353 $ 75459 $ 1035132 81 Component Units Discretely Presented Component Units of the City of Wichita Falls are legally separate entities; however, the City is considered to be financially accountable for their operations. The four discretely presented component units are as follows: Wichita Falls Economic Development Corporation The Wichita Falls Economic Development Corporation is a nonprofit corporation formed in May 1997 for the purpose of increasing employment opportunities, primarily through assisting qualified enterprises with funds provided by a portion of the local sales tax. The Corporation operates under the authority of Vernon's Civil Statutes, Article 5190.6, Section 4A. Wichita Falls 4B Sales Tax Corporation The Wichita Falls 4B Sales Tax Corporation is a nonprofit corporation formed in May 1997 for the purpose of increasing employment opportunities and for public improvement projects such as parks, auditoriums, learning centers, open space improvements, athletic and exhibition facilities and the related maintenance and operating costs of such projects. These projects are funded by a portion of the local sales tax. The Corporation operates under the authority of Vernon's Civil Statutes, Article 5190.6, Section 4B. Wichita Falls Reinvestment Zone #2 The Wichita Falls Reinvestment Zone #2 was created in August 2005 by the City, with the advice and consent of the Wichita Falls Independent School District and Wichita County. The purpose of the Wichita Falls Reinvestment Zone #2 is to capture increments of growth in real property values in the designated zone area from base values established in January 2004 and use the ad valorem taxes derived from the increments to contribute to the zoned area. Tax funds derived from the increment can only be spent for public improvements in the zoned area or for payment of debt service on bonds issued to provide funds for public improvements. Wichita Falls Reinvestment Zone #3 The Wichita Falls Reinvestment Zone #3 was created in September 2009 by the City, with the advice and consent of the Wichita Falls Independent School District and Wichita County. The purpose of the Wichita Falls Reinvestment Zone #3 is to capture increments of growth in real property values in the designated zone area from base values established in January 2009 and use the ad valorem taxes derived from the increments to contribute to the zoned area. Tax funds derived from the increment can only be spent for public improvements in the zoned area or for payment of debt service on bonds issued to provide funds for public improvements. EXHIBIT G-1 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF NET POSITION COMPONENT UNITS SEPTEMBER 30, 2014 Assets Cash and cash equivalents Receivables: Government agencies Capital assets, net of accumulated depreciation Total assets Liabilities Accounts payable - trade Total liabilities Net position Net investment in capital assets Unrestricted Total net position Wichita Falls Economic Wichita Falls Wichita Falls Wichita Falls Development 46 Sales Tax Reinvestment Reinvestment Corporation Corporation Zone #2 Zone #3 Totals $ 16, 840,486 $ 1,802,505 $ - $ 2321709 $ 18, 875, 700 A*in *ii R nqn q1 F _ larM 1 9(;n 17a 19, 697, 340 2,432, 821 16,113 2,572 16,113 2,572 7 99A r11R _ - 232,251 22,362,412 - - 18,685 - - 18,685 $ 19,681,227 $ 2,430,249 $ - $ 232,251 $ 22,343,727 82 N H _m 2 X LU C6 "- O O O CD f� O M f- LO N ' O O O f— O r m CD It `. 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I z O L! w J a) Q J U) N Q G o LL Z m Q m W Lu H w m M _ 02 w mLU t� J D a ow �� wU LL = O � o w _ z C� m O F- V a� E E o a) a, m � •c � � U) c O c L 7 O O O N N NN L J U) J Vj C O L m o C o m c L O m d Q f4 C6 O 0 O m EXHIBIT H-3 CITY OF WICHITA FALLS, TEXAS DEBT SERVICE COVERAGE -REVENUE BONDS SEPTEMBER 30, 2014 Water and Sewer Revenue Bonds: Change in net position (Exhibit A-8) $ (21222,245) Add: Depreciation and amortization $ 61597,956 Interest expense and paying agent fees 5,456,165 Transfers out 1,591,258 1376451379 Subtract: West Texas Utilities water revenues 5971919 Gain (loss) on sale/abandonment of capital assets 481496 Capital contributions from developers 2111055 Transfers in 8641422 (1)721,892) Net earnings for determining debt service coverage $ 97701,242 Priority Subordinate Lien Bonds Lien Bonds Net earnings for determining debt service coverage $ 9,7011242 Principal and interest requirements to maturity $ 12932923812 $ - Number of years remaining to pay bonds 13 N/A Average annual principal and interest requirement 91945,601 N/A Minimum bond covenant debt service coverage 1.25 1.10 Minimum debt service coverage requirement $ 1254329001 $ - 121432,001 Deficit under debt service coverage requirements $ (29730,759) 91 Z LL J Q H z CO w Q z W H O~ O U iii LLo� J OZo J ZQc14 Q Ozo LL QO� H azm 2 O=LL w U w>- � - MWa w LL z?� O Ww CON U ~ w cn cn Q J Q H a Q U O r O I- M M M M r P- r Nq;r r 0 r f- LO Il- CO O r CO r,I- r N In r O M r O LO r - CO O O 00 O (O N LO MI- CO O O (O O M It I- N N LO Nt (` Cl) M r� u) L() r 07 O M O) N N Il M - L() (O Ln M N L() Il - 1-: O co 't LO r N f- CO N Cl) O O Cl) O Iq O LO (O N Il- Uf) NT 00 �t I` I` LL) M Il- N I- LS) r t 0 Lf) N q7 (fl r% r- N LS) O r CV va O Q i i i i i i i i i i i i i i i Orl i i i i i U Lo O N L c � U •E 0') O O O M �t M I- r N �t O �t (O O (O 00 Cl) Il- �t M O O) �t (O (O M 0') N 00 (O 0') 00 M LO Cl) rl- LIr L() f� CO r r 0') LO r O LO LO O �t N ti M N Cl) m 0')M f� O CD CD (D (O N O Il- O N Cl N— I.- N a) ' O (O ' Lf) OC(O Lr O M":f ti N r O N r M Cy � N ' r r O cl 0i Ln ' M ti cl ' ti ti (O lzz N O O N C)) ' Cy C -O E N M U) N LO O M r U) (O LO O �t co CO - M I` O O CO �t CO f- CO N CO m O O N O� N O O 1- r LO �t 00 N co �t O U) It Iq co r N N N N co N co Ln M r r fM M Cl) m N U@ .Q r I- LC) CO N N M co 00 r r M r M I - cc CT `G Lu N r N N N K3 Efl 00 I` N (D It� co O (D N (D N O N N O N LO Cl) CO r LO LO O O O It It It m N co O O N LO 00 co O) CD O LO LO N LO r't 't O O U) ' 00 ' �t O ' N I` LO ' ' ' ' CO CO LO O (O 't ' r ' ' ' ' ' 00 ' ' CO I- r ' CO r r M ' CO r O CO ' 00 - LO O) r O O (O r Ln r N -zi M O O O M O M I- r 0 r O) r O O c (O �t r 1,. O r M N co LO "t r LO N N r 0 r I- N O M I- N > N f- Ln I- Cl) Cl) LO LO N O I- m (O r r 00 co N r Co O q7 N O O I- r N N M (O f� M m Q r co Il- E 61? uli N fl- O In � O LO (0 I` LC) O �t O�t ti N O O r I` co O f-- 't m 't CDI` co � O CD CO O V) N CD I` r N co co (DW -0 ' ' ' ' W ' ' M O ' ' ' ' M (O ti L() (O Lf) (O O ' ' ' ' ' co' co co ' r r CO 00 It ' ti W ' N LO 't � C m0 f� co CD co N (D.tCO N � O L() O O O � (.O O CD mLn f- I- M O Cfl co O LO O O M I� O r 0 M Il- LO CO O m O -O 't N coLO I- Ln r�t M r LO M M r N LO O c a) co L(i CT cr J �N M 69, 04 U) U E o L U 10) (> U a) a)= c U E 0 - U O m O �O c � U c c c c .E a) L Y U .0+ c U CD '- c a) m C aw m U E O U m c U 76 a) � J 0 0) a Q a) coo 0) O O in O o mac- L a) -0 -0 .- U O C OU ~ �2Ua2JCDcoz2-1 M: 0 Q c a) m U) C7 O E a) a) p E E L c p U u) v c c c c w (n io (a L) O c N c > ° O p) "a O E a) a) - E a) a) OU U U O c c � c c E > O ca o . U) Z3 W U O a) Q a) O (6 c p a) (0 (n .� .. 0) 00 O C Q .>_'. C Q L m m _ c O (0 a) a) O U) .` (a U n3 S U E O O O E .r c O E 'C COc NE~ U U a) a) N i O U U O o QMN -0 •EC C) U •T. L U �WQCW Ja)� a) EXHIBIT H-5 CITY OF WICHITA FALLS, TEXAS CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITIY FOR THE YEAR ENDED SEPTEMBER 30, 2014 Beginning Ending Balance Balance 10/1/2013 Additions Deletions 9/30/2014 Administrative services: Mayor and City Council $ 5,218 $ - $ - $ 5,218 City Manager 281,561 - - 281,561 Personnel/Risk Managemeni 9,318 - - 9,318 Martin Luther King Center 802,089 - 52,642 749,447 Library 5,544,158 124,808 115,353 5,553,613 General Public Informatior 383,895 43,943 8,815 419,023 Building Maintenance 2,820,595 4,344 2,080 2,822,859 Nondepartmental 483,232 - 10,617 472,615 Municipal Court 760,524 - 22,663 737,861 Legal 3,357 - - 3,357 City Clerk 1,411 - - 1,411 Homeland security 806,165 - 80,373 725,792 Training center 536,254 - - 536,254 Golf course 4,385,211 - - 4,385,211 Total administrative services 16,822,988 173,095 292,543 16,703,540 Police 27,509,559 86,533 363,631 27,232,461 Fire 7,523,298 40,759 78,350 7,485,707 Parks and recreation; Recreation 2,719,811 29,740 2,186 2,747,365 Park maintenance 5,599,832 1,230 39,075 5,561,987 Cemetery 151,108 - - 151,108 Total parks and recreatior 8,470,751 30,970 41,261 8,460,460 Accounting/finance: Information Systems 2,916,173 267,288 218,246 2,965,215 Total accounting/finance 2,916,173 267,288 218,246 2,965,215 Community development: Planning 26,833 - - 26,833 Inspection 5,998 - 1,028 4,970 Property management 10,785,306 - 2,591 10,782,715 Weed and Seed program 7,504 - - 7,504 Hazard Mitigation Grant 170,800 - - 170,800 Total community development 10,996,441 - 3,619 10,992,822 Public works: Engineering 186,283 20,464 70,237 136,510 Street maintenance 144,438 2,780 - 147,218 Infrastructure 159,400,579 3,290,893 468,352 162,223,120 Total public works 159,731,300 3,314,137 538,589 162,506,848 Health: Administration 3,263,695 23,385 29,230 3,257,850 General city nursing 97,212 - - 97,212 Environmental health 18,616 8,911 6,165 21,362 Lab water pollution 44,229 - - 44,229 Animal reclaim center 31502,856 - - 3,502,856 Total health 6,926,608 32,296 35,395 6,923,509 Traffic and transportation 9,717,406 1,147,377 147,006 10,717,777 Multi -Purpose Events Center 47,157,371 435,703 8,817 47,584,257 Wichita Falls Business Park 1,099,507 - - 1,099,507 Total capital assets $ 298,871,402 $ 5,528,158 $ 1,727,457 $ 302,672,103 93 EXHIBIT H-6 CITY OF WICHITA FALLS, TEXAS REGIONAL AIRPORT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2014 Capital Assets: Land and betterments Buildings and improvements Machinery and equipment Furniture and fixtures Construction in progress Total capital assets Accumulated Depreciation: Land and betterments Buildings and improvements Machinery and equipment Furniture and fixtures Total accumulated depreciation Net capital assets Balance Balance 10/1/2013 Additions Deletions 9/30/2014 $ 11, 525,106 $ 478237541 1, 698, 058 - 307963 32,498 36,705 - $ 662, 331 $15, 686, 316 225982 17675, 076 109553 525908 17645 35,060 2072131548 277149,597 472727964 43,090,181 1,4527610 5307357 6627331 1, 320, 636 1,1581248 25762 22, 982 1,161, 028 267480 3, 392 10, 553 19, 319 36705 - 11645 35, 060 2, 674, 043 5597511 6971511 2)536,043 $ 17, 539, 505 $ 26, 590, 086 $ 3, 575 7453 $ 40, 554,138 94 EXHIBIT H-7 CITY OF WICHITA FALLS, TEXAS KICKAPOO AIRPORT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2014 Balance 10/1/2013 Additions Deletions Capital Assets: Land and betterments Buildings and improvements Machinery and equipment Construction in progress Total capital assets Accumulated Depreciation: Land and betterments Buildings and improvements Machinery and equipment Total accumulated depreciation Net capital assets Balance $ 81769,905 $ - $ - $ 81769,905 31264,730 - - 312645730 5911325 21390 - 593, 715 351247 251788 - 611035 121661, 207 281178 - 12, 689, 385 11486,442 261,504 - 11747,946 660,101 1071433 - 7677534 2581612 317555 - 2907167 274057155 4001492 - 278051647 $ 1072567052 $ (372,314) $ - $ 918831738 95 EXHIBIT H-8 CITY OF WICHITA FALLS, TEXAS TRANSIT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2014 Balance Balance 10/1/2013 Additions Deletions 9/30/2014 CaDital Assets: Land and betterments $ 4571254 $ - $ - $ 457,254 Buildings and improvements 6941102 4,441,855 - 57135,957 Machinery and equipment 358,480 69918 79531 3575867 Construction in progress 41029,649 - 4,029,649 - Total capital assets 5,5391485 474487773 47037,180 57951,078 Accumulated Depreciation: Land and betterments 51274 101549 - 151823 Buildings and improvements 2487416 55,685 - 304,101 Machinery and equipment 190,062 32,619 4,126 2187555 Total accumulated depreciation 4431752 981853 41126 5383479 Net capital assets $5,095,733 $ 4,349,920 $ 4,033,054 $ 57412,599 99 EXHIBIT H-9 CITY OF WICHITA FALLS, TEXAS STORMWATER DRAINAGE FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2014 Capital Assets: Drainage Land betterments Machinery and equipment Construction in progress Total capital assets Accumulated Depreciation: Drainage Land betterments Machinery and equipment Total accumulated depreciation Net capital assets Balance Balance 10/1/2013 Additions Deletions 9/30/2014 $ 16, 551, 731 $ 691, 827 $ - $17, 243, 558 157, 506 - - 1575506 895017 - - 89,017 17,174, 949 273177516 1367620 19, 355, 845 8601421 225, 302 - 1, 085, 723 21983 47815 - 77798 9361958 2321233 - 1,1691191 $ 16, 237, 991 $ 2, 085, 283 $ 136, 620 $18,1861654 97 EXHIBIT H-10 CITY OF WICHITA FALLS, TEXAS SANITATION FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2014 Balance 10/1/2013 Additions Deletions Capital Assets: Land and betterments Buildings and improvements Machinery and equipment Construction in progress Total capital assets Accumulated Depreciation: Land and betterments Buildings and improvements Machinery and equipment Total accumulated depreciation Net capital assets Balance $ 6, 379, 349 $ 5607586 $ - $ 6, 939, 935 278641753 77286 - 278723039 3915462 47781 - 396,243 977357459 5727653 997895 1072081217 6851822 1285183 - 8143005 1,2807258 62,157 - 1,342,415 2,1211125 219, 571 - 27340, 696 $ 7, 614, 334 $ 353, 082 $ 993895 $ 7, 867, 521 EXHIBIT H-11 CITY OF WICHITA FALLS, TEXAS WATER AND SEWER FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2014 Balance Balance 10/1/2013 Additions Deletions 9/30/2014 Capital Assets: Land and betterments $ 24,3451465 $ - $ - $ 24,345,465 Buildings, systems and improvements 306,832,489 61840,961 279,000 313,3941450 Machinery and equipment 5,350,258 307,967 1,031 516571194 Furniture and fixtures 17164 - - 1,164 Motor vehicles 17235 - - 1,235 Construction in progress 618827611 61761,007 31744,032 91899,586 Total capital assets 343,413,222 13,909,935 41024,063 353,299,094 Accumulated Depreciatior: Land and betterments 10,309,983 243,632 - 10,553,615 Buildings, systems and improvements 93,5007966 61165,404 279,000 99,387,370 Machinery and equipment 41066,623 2111776 1,031 4,277,368 Furniture and fixtures 17164 - - 1,164 Motor vehicles 17235 - - 1,235 Total accumulated depreciation 107,8797971 61620,812 280,031 114,220,752 Net capital assets $ 235,5337251 $ 71289,123 $ 31744,032 $ 23910781342 01 EXHIBIT H-12 CITY OF WICHITA FALLS, TEXAS WATERPARK FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2014 Balance Balance 10/1/2013 Additions Deletions 9/30/2014 Capital Assets: Land and betterments Buildings and improvements Machinery and equipment Construction in progress Total capital assets Accumulated Depreciatior: Buildings and improvements Machinery and equipment Total accumulated depreciation Net capital assetc. $ 389,894 $ - $ - $ 38%894 31362,609 - - 3,362,609 188,457 - - 188,457 37,347 548,414 - 585,761 31978,307 548,414 - 4,526,721 668,286 168,130 - 836,416 73,884 18,846 - 921730 7421170 186,976 - 929,146 $ 31236,137 $ 361,438 $ - $ 31597,575 100 EXHIBIT H-13 CITY OF WICHITA FALLS, TEXAS FLEET MAINTENANCE FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2014 Balance Balance 10/1/2013 Additions Deletions 9/30/2014 CaDital Assets: Land and betterments $ 4361269 $ - $ - $ 436,269 Buildings and improvements 411631802 - - 471633802 Machinery and equipment 17464,308 15900 - 1,4663208 Furniture and fixtures 27950 - - 27950 Motor vehicles 51,3971255 21160,850 848,028 527710,077 Total capital assets 577464,584 211625750 8485028 587779,306 Accumulated Depreciation: Land and betterments - other 11697 261 - 17958 Buildings and improvements 2,2501250 88,235 - 273387485 Machinery and equipment 8491379 120,462 - 969,841 Furniture and fixtures 21950 - - 21950 Motor vehicles 34,4917128 3,7217670 8427679 37,3707119 Total accumulated depreciation 377595,404 37930,628 842,679 40,6831353 Net capital assets $19,869,180 $ (177677878) $ 5,349 $18,095,953 101 EXHIBIT H-14 CITY OF WICHITA FALLS, TEXAS DUPLICATING SERVICES FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2014 Balance 10/1/2013 Additions Deletions Capital Assets: Machinery and equipment Accumulated DeDreciation: Machinery and equipment Net capital assets $ 10,617 Balance $ 101617 6, 581 17175 - 77756 $ 47036 $ (17175) $ - $ 27861 102 EXHIBIT H-15 CITY OF WICHITA FALLS, TEXAS INFORMATION TECHNOLOGY FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2014 Balance 10/1/2013 Additions Deletions Capital Assets: Machinery and equipment Construction in progress Total capital assets Accumulated Depreciation: Machinery and equipment Net capital assets Balance $ 9325691 $ 1223267 $ - $ 1,0545958 - 1455021 - 1455021 9325691 2673288 - 1,199, 979 1355588 1985765 - 334,353 $ 7971103 $ 683523 $ - $ 8653626 103 EXHIBIT H-16 CITY OF WICHITA FALLS, TEXAS WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2014 Balance Balance 10/1/2013 Additions Deletions 9/30/2014 Capital Assets: Land and betterments Buildings and improvements Total capital assets Accumulated DeDreciation: Buildings and improvements Net capital assets $ 1,469,797 $ - $ 37728 $ 174327069 9571191 - - 9573191 274265988 - 379728 213899260 1431578 19,144 - 1627722 $ 27283,410 $ (193144) $ 373728 $ 27226,538 104 Statistical Section (Unaudited This part of the City of Wichita Falls, detailed information as a context fo statements, note disclosures, and government's overall financial health. Contents Texas' comprehensive annual financial report presents r understanding what the information in the financial required supplementary information says about the Page Financial Trends 105 These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time. Revenue Capacity 111 These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt Capacity 115 These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. Demographic and Economic Information 120 These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. 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It M 00 C) ';I- r In Lf) r (D r o In r r 00 r 00 00 ;T N I- O I- CO r CO I- N Ln N O N r (D 00 N M O N O U) r r 1- 00 M M 1- L() CO CO :T r O LC") N � r r O (D ' co U*) ' ' ' Lf) I;t 00 It O O CO O 00 -- CO CO LC) N -- -- CD CD ;I- N M -- 1- Ln -- O N M O N 00 Ln O O CV CO CO r CO O O 00 M O M O O m 00 Ln O) co O 1` Ln LO co 't N I` V) m ON 't N_ r CDM M O I-- I-- r r I- N M CO M N r CD00 CD CD mco O O) CD1-_ N N N M N r r o0 (O O" 44 r r O CM Ln M CO I` M N U? U) O U) a)a) (1) Cn O U O a) a) C:U) cn 00, co =5 O a) O Cn c) U) U)cn c c U)_ cn a>i c cam.) s= N U)> c-) cam.) a) 0 _ 0_ Q (1) > U) w .- w =3 c C a) Cn Z3 O E N a) _ O CO ) c Q O � Co 0 co C Cn a) � •� U Cn � E •U _ d Cn � LL a) �_ E w w m a) Q a X (� O O O O - a) i OU (a `� = 0- -Q -Q � O (n U 0- >, s= O Cn > U +� O O-0 O i (0 U O D N m a) a) a) O Q a) O m cv C) +� U (3) �U� XQwiiwQUw2H�U�� X X wUaHH w w(D O z O c rn O r EXHIBIT 1-5 CITY OF WICHITA FALLS, TEXAS TAX REVENUES BY SOURCE, GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Hotel Year Property Sales Franchise Occupancy Beverage Bingo Total 2004-2005 $ 22,567,902 $ 17,845,502 $ 5,191,741 $ 1,262,518 $ 204,727 $ 1641128 $ 47,236,518 2005-2006 23,469,615 19,272,204 5,740,202 1,333,747 234,075 178,666 50,228,509 2006-2007 24, 968,481 20, 068, 529 5,780,311 1,417, 397 236,367 166,233 52, 637, 318 2007-2008 26,217,499 21,353,896 5,598,406 1,565,523 251,386 168,864 55,155,574 2008-2009 27,865,394 20,451,906 5,570,399 1,506,423 249,121 109,739 55,752,982 2009-2010 27,501,412 20,033,820 5,593,573 1,513,484 246,541 77,883 54,966,713 2010-2011 28, 554, 029 21, 082, 994 5,593,781 1,572,105 248,350 70,747 571122, 006 2011-2012 28,679,076 21,406,823 5,574,882 1,677,100 2071735 61,696 57,607,312 2012-2013 29,277,956 22,062,365 5,423,680 1,578,764 230,728 40,122 58,613,615 2013-2014 29,780,795 22,397,536 5,558,599 1,684,329 281,598 36,688 59,739,545 110 EXHIBIT 1-6 CITY OF WICHITA FALLS, TEXAS ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY - LAST TEN FISCAL YEARS (UNAUDITED) Personal Ratio of Total Real Property Property Total Total Assessed to Fiscal Assessed Assessed Assessed Direct Estimated Total Estimated Year Value Value Value Tax Rate Actual Value Actual Value 2004-2005 $ 3,0477463,928 $ 632,0567253 $ 3,6797520,181 $0.59246 $ 37679,520,181 100.00% 2005-2006 2,9927717,987 726,5127178 3,719,230,165 0.59246 37719,230,165 100.00% 2006-2007 3,2087236,037 744,3537082 3,952,589,119 0.59246 3,952,589,119 100.00% 2007-2008 313897094,572 80214497151 411911543,723 0.59246 45191,543,723 100.00% 2008-2009 3,553,825,553 877,0307381 45430,855,934 0.59526 4,430,855,934 100.00% 2009-2010 3,6227501,148 803,6977677 45426,198,825 0.60526 41426,198,825 100.00% 2010-2011 3,6937399,778 728,6427824 41422,042,602 0.62526 47422,0427602 100.00% 2011-2012 3,7147449,662 716,3657316 41430,814,978 0.62526 47430,814,978 100.00% 2012-2013 3,7497608,055 715,1137536 414643721,591 0.63526 474641721,591 100.00% 2013-2014 3,7777010,620 771,0027233 4,548,012,853 0.63526 4,548,012,853 100.00% um EXHIBIT 1-7 CITY OF WICHITA FALLS, TEXAS DIRECT AND OVERLAPPING PROPERTY TAX RATES - LAST TEN FISCAL YEARS (UNAUDITED) Tax Rates Per $100 Valuation Fiscal City of Wichita Falls Wichita County Burkburnett ISD (1) Year M&O I&S Total M&O I&S Total M&O I&S Total 2004-2005 $ 0.54 $ 0.05 $ 0.59 $ 0.44 $ 0.02 $ 0.46 $ 1.50 $ 0.14 $ 1.64 2005-2006 0.55 0.04 0.59 0.44 0.02 0.46 1.50 0.13 1.63 2006-2007 0.57 0.02 0.59 0.43 0.02 0.45 1.37 0.13 1.50 2007-2008 0.57 0.02 0.59 0.43 0.01 0.44 1.17 0.11 1.28 2008-2009 0.58 0.02 0.60 0.43 - 0.43 1.17 0.14 1.31 2009-2010 0.59 0.02 0.61 0.48 - 0.48 1.17 0.14 1.31 2010-2011 0.61 0.01 0.62 0.52 - 0.52 1.17 0.14 1.31 2011-2012 0.61 0.01 0.62 0.53 - 0.53 1.17 0.14 1.31 2012-2013 0.62 0.01 0.63 0.52 - 0.52 1.17 0.13 1.30 2013-2014 0.62 0.01 0.63 0.51 - 0.51 1.17 0.12 1.29 City View ISD (2) Iowa Park CISD (3) Wichita Falls ISD (4) Grand M&O I&S Total M&O I&S Total M&O I&S Total Total 2004-2005 $ 1.50 $ 0.23 $ 1.73 $ 1.49 $ 0.09 $ 1.58 $ 1.50 $ 0.06 $ 1.56 $ 7.56 2005-2006 1.50 0.25 1.75 1.49 0.09 1.58 1.50 0.06 1.56 7.57 2006-2007 1.50 0.23 1.73 1.36 0.09 1.45 1.33 0.06 1.39 7.11 2007-2008 1.37 0.23 1.60 1.04 0.08 1.12 1.04 0.15 1.19 6.22 2008-2009 1.04 0.22 1.26 1.04 0.08 1.12 1.04 0.16 1.20 5.92 2009-2010 1.17 0.23 1.40 1.04 0.11 1.15 1.04 0.16 1.20 6.15 2010-2011 1.17 0.25 1.42 1.04 0.10 1.14 1.04 0.16 1.20 6.21 2011-2012 1.17 0.25 1.42 1.04 0.09 1.13 1.04 0.17 1.21 6.22 2012-2013 1.17 0.25 1.42 1.04 0.24 1.28 1.04 0.17 1.21 6.36 2013-2014 1.17 0.25 1.42 1.04 0.24 1.28 1.04 0.17 1.21 6.34 Notes: (1) Burkburnett Independent School District - 25% in Wichita Falls city limits (2) City View Independent School District - 90% in Wichita Falls city limits (3) Iowa Park Consolidated Independent School District - 2% in Wichita Falls city limits (4) Wichita Falls Independent School District - 99% in Wichita Falls city limits 112 EXHIBIT 1-8 CITY OF WICHITA FALLS, TEXAS PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO SEPTEMBER 30, 2014 2013-2014 2004-2005 Percentage Percentage Taxable of Total Taxable of Total Assessed Assessed Assessed Assessed Taxpayer Value Rank Valuation Value Rank Valuation GGP - Sikes Senter LLC $ 51,500,000 1 1.13% $ 53,365,018 1 1.45% Oncor Electric Delivery Co 40,015,926 2 0.88% 44,679,932 2 1.21 % Texas Express Pipeline LLC 27,000,000 3 0.59% - N/A 0.00% Wal-Mart Stores Texas LP 227129,220 4 0.49% 341439,397 3 0.94% Quail Creek Crossing Ltd 20,162,000 5 0.44% - N/A 0.00% Wal-Mart Stores East Inc 19,559,600 6 0.43% - N/A 0.00% Southwestern Bell 15,448,654 7 0.34% 32,309,153 4 0.88% Kell West Regional Hospital 15,060,037 8 0.33% 11,903,053 10 0.32% Atmos Energy / Mid -Tex Division 13,503,380 9 0.30% - N/A 0.00% North American Pipe Corp 13,031,894 10 0.29% - N/A 0.00% Clinics of North Texas - N/A 0.00% 15,825,801 5 0.43% Home Depot USA Inc - N/A 0.00% 12,951,193 6 0.35% Lowe's Home Improvement Center - N/A 0.00% 12,907,926 7 0.35% Time Warner - N/A 0.00% 12,801,498 8 0.35% Southwestern Bell Wireless LLC - N/A 0.00% 12,630,912 9 0.34% Totals $ 237,410,711 5.22% $ 243,813,883 6.62% 113 EXHIBIT 1-9 CITY OF WICHITA FALLS, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS - LAST TEN FISCAL YEARS (UNAUDITED) Collected within the Taxes Levied Fiscal Year of the Levy Collections Total Collections to Date Fiscal for the Percentage in Subsequent Percentage Year Fiscal Year Amount of Levy Years Amount of Levy 2004-2005 $ 2079197473 $ 2074947272 97.97% $ 326,361 $ 207820,633 99.53% 2005-2006 22, 034, 951 21, 612, 888 98.08% 3201355 21, 933, 243 99.54 % 2006-2007 2374217270 2370437185 98.39% 2921471 2313357656 99.63% 2007-2008 247833,219 247408,683 98.29% 2981446 2477071129 99.49% 2008-2009 267375,113 2579057854 98.22% 3611260 2672677114 99.59% 2009-2010 261752,242 2671667043 97.81 % 3731633 2675395676 99.21 % 2010-2011 271649,264 277179,642 98.30% 2841894 2754647536 99.33% 2011-2012 27, 704 3114 27, 306, 706 98.57% 2517300 277558, 006 99.47% 2012-2013 28, 362, 591 27, 906, 520 98.39% 178,419 28, 084, 939 99.02% 2013-2014 2818767552 281375563 98.27% - 287375,563 98.27% 114 O 00 ti 00 0o CM T N 00 T CA (A c0 cM f` T O O T Lid LO L y N 'ITr � T- N N Q pp CD co 00 LO N r` co r-C9 co LO CM co ti U = T T T T T T T T T T X60=1� w mo o^ o a o 810 0 o a o 0} T T T It M O T r-- 0 E N i O T It 00 CM O 4 r- M M r_ O 00 T (9 T ti CD ti r_ ti L) C O L C M_ I` C-0O O T co O_ O O_ 4 � O co 4 m CD CD Ln E co N CD N 00 N co M CD N r T LSD r` 00 CD m O co W o N > O 0-0 O 0c0 ti 00 � � � m 17 co rn V T T T T T T T T T T >- W LU H H m � H Q J W LLLL w Z Q LU Q J V H U OLL LL Z 0 LL W O U)� O cn F a—i C5 0� T Q/ T M CD N CD N C Y) It CD O , O C9 CD M CD CD a CU ^ T T CU Ce) M 00 M I- M ti a) O N -0 � O r� LO cM N O 00 LO N O CB Ln 00 OLO 0) Orl- OIct O rlrl- M O� ' Z ti ti CD CD CO CD LO � LO � d 69 C O O C/) O O O O _o co co IL m m CY) OT T 00 00 CM M It N M 00 CD 00 It r` LO N It 6) rl- O') CD p c c Co LC) Ln O) T 00 Iti N O Ili4 rl ti O M 00 00 O� r- 4 Cc O ti m CD 0') CD 00 ti � O O It r� CD O') O-) ti c0 00 co N EO ~> co co O rl- N lt N T N ti N M N O T r� It N N U � U), fn -p �0 >+ E ` 0) o0 V- CN N 't N 00 N coco O cM T r_ T rl- T r- T 00 ti I� rl M O O (6 m LO CD O 00 LO r M ) :3 M LQ N c0 CD 00 00 00 It w O LO rl- N CD LO T N N r- E O > (.O N T 4 N T CM N T T N T d r T ti O T L6 O T N O T d LLCM m CD (U O (fl r` O O � Lf) CD O') (0 Oco U J a T U-) c7 CYi O O r't I- M O co Q 17 1 1 1 1 1 1 Z m T T Cn O O O O CD T 00 N CD N rI- 00 N CO M N M co"O N O C 70 O O O O O N r- CD T T co LO O m (B p m O CO co m C) CD 00 N LO T- O O T O Ln �O LO co CD M� N N co co co LO � m o o a o 0 0 0 ° U) C6 � wi N CT ti CT O CT 00 L6 M CT O CT LO CO T G m t` ° ti N M U') f` T T (D Cp O 00 r\ CD LO It It It LO - OT 69- LO CD t` 00 m O T N M � (a L O O CD CD O T T T T T U O O O O O O O O O O 4 6 6 ti 00 O O r N M O CD CD O O O T T T T O O O O O O O O O O N N N N N N N N N N EXHIBIT 1-11 CITY OF WICHITA FALLS, TEXAS RATIOS OF GENERAL BONDED DEBT OUTSTANDING - LAST TEN FISCAL YEARS (UNAUDITED) Governmental Activities General Combination Fiscal Obligation Tax and Year Bonds Revenue Bonds Total 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 $ 10, 725, 000 8,270,000 77390, 000 674803000 515357000 4, 790, 000 434507000 471167110 574913678 47679,866 $ 670957000 57360, 000 257396, 016 2378677228 33, 524, 726 35, 918, 687 34 7104 7162 35,5037123 51, 570, 623 49, 302, 503 $ 16, 820, 000 13, 630, 000 327786, 016 307347,228 39, 059, 726 40,708,687 38, 554,162 39,619,233 57, 062, 301 53, 982, 369 Percentage of Actual Taxable Value of Per Property Capita 0.46% $ 157.38 0.37% 126.63 0.83% 304.60 0.72% 281.39 0.88% 368.71 0.92% 389.36 0.87% 368.75 0.89% 381.21 1.28% 545.78 1.19% 514.62 116 EXHIBIT 1-12 CITY OF WICHITA FALLS, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT (UNAUDITED) SEPTEMBER 30, 2014 Direct: City of Wichita Falls Overlapping: Wichita County Burkburnett Independent School District City View Independent School District Iowa Park Consolidated Independent School District Wichita Falls Independent School District Total overlapping Total direct and overlapping bonded debt Gross Governmental Activities Debt (1) Percentage Applicable to City of Wichita Falls (2) Amount Applicable to City of Wichita Falls $ 60, 895, 941 100 % $ 60, 895, 941 175,181 100% 1757181 9,7171621 25% 2,429,405 101999,617 90% 95899,655 16, 592, 533 2 % 331,851 477427,108 99% 46,9529837 84, 912, 060 59, 788, 929 $ 145, 808, 001 $120, 684, 870 Sources: (1) Listed taxing jurisdictions (2) City of Wichita Falls Planning Department calculated based on percentage of taxing entity within the City of Wichita Falls city limits. 117 (M T- _m X w a Zo w �LU i/) ~ Z J w� Q LLJ Q W J J 6L Q C) U Z fA o O o LO O O O 00 O EF} 6s 6s Lt'� r N LO O M O ( r N N r M N O N LO M CO M r M O LO N O O O LO O O O M Ln (-C� r r LO (D M N � N L O N (o coco co ti O U), N O CD O � CD CD CDN r r r (V C E!? 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Ln (o I- co O O r N co � (6 L O O O O O O O O O O r O r O r O r r O O U U o N N N N N N N N N N O 6 O (D O I` O o0 O & O O r T r N M r r O N O N O N O N O N CD N O N O N O O N N N N 4- Z) o c m0 X Q N � U +- X N N o o U N c6 � L _� LL O N C _0 o L X 2 o Co �+ N N X W O o cu N c O N X co �0 co �: coco N M N -0 Q O = O N _ 0= m-0 c6.0 O M _ co ( co � W N70 o L U o V Q U -0 w cJi N 4- T N M o Z 0) r EXHIBIT 1-15 CITY OF WICHITA FALLS, TEXAS DEMOGRAPHIC STATISTICS - LAST TEN FISCAL YEARS (UNAUDITED) Per Capita Fiscal Estimated Personal Personal Median Education School Unemployment Year Population (1) Income Income (2) Age Level (3) Enrollment (3) Rate (4) 2004-2005 106,876 $ 412873700,173 $ 40,118 35.4 13.1 13,755 4.8% 2005-2006 107,635 41464,967,184 411482 35.4 13.1 13,743 4.2% 2006-2007 107,635 4,616,776,069 42,893 34.9 13.1 141707 4.1 % 2007-2008 107,847 43783,148,919 44,351 34.9 13.3 14,533 5.5% 2008-2009 105,935 25470,050,408 23,317 33.2 13.5 15,473 8.2% 2009-2010 104,553 25205,022,770 21,090 32.3 13.3 16,217 7.3% 2010-2011 104,553 21766,263,274 26,458 32.8 13.2 15,539 6.6% 2011-2012 103,931 2,330,756,606 22,426 32.4 13.2 14,569 6.9% 2012-2013 104,552 23499,106,456 23,903 32.5 13.1 14,639 6.2% 2013-2014 104,898 2,336,602,950 221275 32.5 13.2 15,181 4.9% Sources: (1) City of Wichita Falls Planning Department for all years, except for 2009-10 and 2010-11 from US Bureau of Census. (2) C.A.C.I. Marketing Services (3) Wichita Falls I.S.D. - Educational level is grade equivalent of graduating senior (4) Texas Workforce Commission 120 EXHIBIT 1-16 CITY OF WICHITA FALLS, TEXAS PRINCIPAL EMPLOYERS CURRENT YEAR AND TEN YEARS AGO (UNAUDITED) SEPTEMBER 30, 2014 Employer Sheppard Air Force Base North Texas State Hospital Wichita Falls ISD United Regional Health Care System Midwestern State University City of Wichita Falls Howmet Corporation Wal-Mart - 3 locations Cryovac Division - Sealed Air Corp. James B. Allred Prison Unit Vetrotex America Stanley Works, Mechanics Division 2013-2014 Percentage of Total City Employees Rank Employment 107015 1 14.01 % 27071 2 2.90% 17925 3 2.69% 13739 4 2.43% 13297 5 1.81% 17175 6 1.64% 1,090 7 1.52% 1,026 8 1.43% 896 9 1.25% 869 10 1.22% N/A N/A 2003-2004 Percentage of Total City Employees Rank Employment 13,088 1 18.30% 1,055 5 1.48% 1700 3 2.38% 1700 2 2.38% - N/A - 17477 4 2.07% 903 8 1.26% - N/A - 738 9 1.03% 930 7 1.30% 17000 6 1.40% 550 10 0.77% Totals 22,103 30.90% 23,141 32.37% Sources: 2003-2004 data is from Texas Workforce Commission. 2013-2014 data is from Wichita Falls Chamber of Commerce. 121 r` r O LO r 0 0 LO f` r M r LO CO It N 00 . . . . . . . . . . . . . . . r O O N N I` N 00 00 CO N O M , r M CD r CV m O CO m NZt I` ti LO N 00 00 N M r r M O N co M LO LO M O CDLn O CD M r Ln CO �� 00 . . . . . . . . . . . . . . . . r O 4 m N N I- N 00 r M N N r , r CO 4 r CF) O CD 0) N 1� J` 00 LO N 00 00 N N , N r r N r O N N O LO O I` O O LO O (0 00 N LO CO Cfl N M . . . . . . . . . . . . . . . . r O It 00 N M I` O M N M N O N , r LO N r m m CO 00 NZt I` ti LO N 00 00 N N N O N r O Ln Cl f- O O NU) CD 00 CD Ln CO It CO M . . . . . . . . . . . . . . . . f- CD N 00 Ln O CA r N N CD N , r Ln r r O N , O CA CD 00 N It J` 1- LO N f� 00 N N r r O T- O N O O O O 00 O r 00 't ti O r LO CD It CO M . . . . . . . . . . . . . . r O N LO It It CD O O 00 r M O N , r Lf) r r O m CD M NItil 00 CD LO N 00 00 N N r N r r O O O N O CD O O O O O 00 O CD O M LO CD 't r M . . . . . . . . . . . . . . . . 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