The URL can be used to link to this page

2007 Comprehensive Annual Financial Report Comprehensive Annual Financial Report City of Wichita Falls, Texas 18 82 'm✓ _ T Ic • . 1 :7 Gas tT+„icani _ ;':/'-i M• ��1 �4 A FALLS, For Year Ended September 30, 2007 CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2007 ISSUED BY: DEPARTMENT OF FINANCE Wichita , TEXAS' CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2007 TABLE OF CONTENTS Exhibit Page INTRODUCTORY SECTION Letter of Transmittal i-vii GFOA Certificate of Achievement viii Organizational Chart ix List of Principal Officials x FINANCIAL SECTION Independent Auditor's Report 1-2 Management's Discussion and Analysis 3-12 BASIC FINANCIAL STATEMENTS: Statement of Net Assets A-1 13 Statement of Activities A-2 14 Balance Sheet- Governmental Funds A-3 15 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets A-4 16 Statement of Revenues, Expenditures and Changes in Fund Balances- Governmental Funds A-5 17 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of the Governmental Funds to the Statement of Activities A-6 18 Statement of Fund Net Assets - Proprietary Funds A-7 19-20 Statement of Revenues, Expenses and Changes in Fund Net Assets- Proprietary Funds A-8 21 Statement of Cash Flows- Proprietary Funds A-9 22-23 Statement of Fiduciary Assets and Liabilities A-10 24 Notes to the Financial Statements 25-53 REQUIRED SUPPLEMENTARY INFORMATION: Budgetary Comparison Schedule- General Fund B-1 54 Notes to the Required Supplementary Information 55 Texas Municipal Retirement System -Analysis of Funding Progress- Last Ten Plan Years B-2 56 Wichita Falls Firemen's Relief and Retirement Fund-Analysis of Funding Progress B-3 57 CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2007 TABLE OF CONTENTS (CONT'D.) Exhibit Page COMBINING FINANCIAL STATEMENTS: Nonmajor Governmental Funds: Combining Balance Sheet C-1 58 Combining Statement of Revenues, Expenditures and Changes in Fund Balances C-2 59 Budgetary Comparison Schedule—Community Development Block Grant C-3 60 Budgetary Comparison Schedule—Section 8 Housing Fund C-4 61 Budgetary Comparison Schedule— Home Investment Partnership Agreement Fund C-5 62 Budgetary Comparison Schedule—Hotel/Motel Tax Fun C-6 63 Budgetary Comparison Schedule—Golf Fund C-7 64 Budgetary Comparison Schedule—MPEC Fund C-8 65 Budgetary Comparison Schedule—Debt Service Fund C-9 66 Nonmajor Enterprise Funds: Combining Statement of Net Assets D-1 67 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets D-2 68 Combining Statement of Cash Flows D-3 69-70 Internal Service Funds: Combining Statement of Net Assets E-1 71 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets E-2 72 Combining Statement of Cash Flows E-3 73 Agency Fund: Statement of Changes in Assets and Liabilities F-1 74 Component Units: Combining Statement of Net Assets G-1 75 Combining Statement of Activities G-2 76 SUPPORTING SCHEDULES: Combined Schedule of Bonded Debt and Interest Maturities H-1 77 Combined Schedule of Bonds Payable H-2 78-82 Debt Service Coverage—Revenue Bonds H-3 83 Capital Assets Used in the Operation of Governmental Funds- Schedule By Function and Activity H-4 84 Capital Assets Used in the Operation of Governmental Funds- Schedule of Changes By Function and Activity H-5 85 Municipal Airport Fund—Capital Assets and Accumulated Depreciation H-6 86 Kickapoo Airport Fund—Capital Assets and Accumulated Depreciation H-7 87 Transit Fund—Capital Assets and Accumulated Depreciation H-8 88 Stormwater Drainage Fund- Capital Assets and Accumulated Depreciation H-9 89 Sanitation Fund—Capital Assets and Accumulated Depreciation H-10 90 CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2007 TABLE OF CONTENTS (CONT'D.) Exhibit Page Water and Sewer Fund—Capital Assets and Accumulated Depreciation H-11 91 Fleet Maintenance Fund—Capital Assets and Accumulated Depreciation H-12 92 Duplicating Services Fund—Capital Assets and Accumulated Depreciation H-13 93 Employee Benefit Trust Fund—Capital Assets and Accumulated Depreciation H-14 94 Wichita Falls Economic Development Corporation—Capital Assets and Accumulated Depreciation H-15 95 STATISTICAL SECTION (UNAUDITED) Net Assets By Component—Last Five Fiscal Years I-1 96 Changes in Net Assets—Last Five Fiscal Years 1-2 97-98 Fund Balances, Governmental Funds—Last Ten Fiscal Years 1-3 99 Changes in Fund Balances, Governmental Funds—Last Ten Fiscal Years 1-4 100 Tax Revenues By Source, Governmental Funds—Last Ten Fiscal Years 1-5 101 Assessed and Estimated Actual Value of Taxable Property—Last Ten Fiscal Years 1-6 102 Direct and Overlapping Property Tax Rates—Last Ten Fiscal Years 1-7 103 Principal Property Taxpayers—Current Year and Nine Years Ago 1-8 104 Property Tax Levies and Collections—Last Ten Fiscal Years 1-9 105 Ratios of Outstanding Debt by Type—Last Ten Fiscal Years 1-10 106 Ratios of General Bonded Debt Outstanding—Last Ten Fiscal Years I-11 107 Direct and Overlapping Governmental Activities Debt 1-12 108 Computation of Legal Debt Margin— Last Ten Fiscal Years 1-13 109 Pledged Revenue Coverage—Water and Sewer Revenue Bonds— Last Ten Fiscal Years 1-14 110 Demographic Statistics—Last Ten Fiscal Years 1-15 111 Principal Employers—Current Year and Eight Years Ago 1-16 112 Full-Time Equivalent City Government Employees by Function/Program— Last Nine Fiscal Years 1-17 113 Operating Indicators by Function/Program—Last Ten Fiscal Years 1-18 114 Capital Asset Statistics by Function/Program—Last Ten Fiscal Years 1-19 115 Graphics: Cash and Investments J-1 116 Total Bonds Payable J-2 117 General Obligation Bonds Payable J-3 118 Revenue Bonds Payable J-4 119 General Fund Equity J-5 120 Comparison of Tax Levy and Collections J-6 121 Revenues by Source—FYE 9/30/07 J-7 122 Expenditures by Function—FYE 9/30/07 J-8 123 General Governmental Revenues (General Fund Only) J-9 124 General Governmental Expenditures (General Fund Only) J-10 125 * ri .0 iNN4 Introductory Section Wichita l` _ XAS \ _ \ March 10,2008 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, 2007. 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 fmancial 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, 2007, was prepared in accordance with 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, is accurate in all material aspects; that it is 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 15 miles south of the Red River/Oklahoma border at the intersection of Interstate 44 and U.S. Highway 287. The city is approximately 130 miles northwest of Dallas and 125 miles south of Oklahoma City. Wichita Falls is the county seat of Wichita County and the major population center in North Texas, serving a trade area which extends into southern Oklahoma. Wichita Falls has a strong international presence, unique for a city of its size and location. Sheppard Air Force Base maintains the Euro- NATO jet pilot training program;there is considerable international investment in the area's manufacturing base; and Midwestern State University has significant foreign student representation. Principal employers within the City manufacture fiberglass reinforcements, glass, automotive parts, laundry equipment, and pipe. North Texas State Hospital-Wichita Falls Branch, Midwestern State University, James V. Allied Prison and Sheppard Air Force Base are also large employers located within the City. The City has a Multi-Purpose Events Center,which 1300 7th Street P.O.Box 1431 Wichita Falls,Texas 76307 includes a coliseum,exhibit hall,and an agricultural arena/show barn. The 2007 population for Wichita Falls, as estimated by the City's Community Planning and Development Department, is 107,635, an increase of 3.30% over the 2000 Census estimates,and an increase of 11.54%over the 1990 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. hi addition,the City provides water,sewer,sanitation and transportation services for its citizens. ECONOMIC CONDITION AND ACTIVITY Wichita Falls has successfully diversified its economy to include manufacturing, government, medical services, and education in addition to the more typical North Texas industries of agriculture, and oil and gas production. Manufacturing plays a vital role in the area economy. Wichita Falls has over 185 manufacturing firms representing approximately 14%of total employment within the city and generating in excess of$300 million in annual payroll. Large durable goods manufacturing represents a major portion of the area's employment base including metal fabrication, industrial and commercial machines and equipment, and assorted plastic, glass, and fiberglass products. The remaining manufacturing jobs are in the processing of non-durable goods such as food, printing materials and garments. Six of the local manufacturers are operated by Fortune 500 companies or their subsidiaries. Four area manufacturing facilities are foreign-owned, representing France, Sweden, and Switzerland. The community has benefited in recent years through several major industrial expansions that have contributed in excess of$180 million in new manufacturing investments. In 2007,the City experienced relatively minor industrial development activity. The City continued to develop a new industrial business park in the southeastern portion of the community,which is designed to attract industries to Wichita Falls. Over$3.8 million of 4A Economic Development Sales Tax Funds have been committed to this project for land acquisition, development of streets, water and sewer lines, and landscaping. The Park is complete and is being marketed to potential industries. In fact, in late 2007, a sale of 7 acres of land at the business park was made to Old Dominion Freight Line as the first tenant of the Business Park. Although this is a relatively small development, it does signify the start of things to come. The City and Board of Commerce and Industry were also instrumentally involved in encouraging new construction or operational expansions of Texas Transland,NEW Customer Service Companies, Affiliated Energy Products, and Machinist Solutions. A total of $1.15 million in 4A Economic Development Sales Tax Funds were committed to these expansions for a total capital investment potential of approximately $2.4 million and the creation of over 164 new jobs in the community. Unfortunately, these efforts have been negatively impacted by the recent announcement by Saint-Gobain High Performance Materials of the closure of the company's Vetrotex America plant located in Wichita County. This plant closure will begin in June 2008 and result in the loss of 720 jobs and nearly $160 million of assessed property value. In addition to providing cash incentives for industrial development,4A Economic Development Sales Tax Funds continue to be used to improve economic development marketing efforts. The marketing initiative includes the Cities of Wichita Falls, Burkburnett, Iowa Park and Wichita County and is designed to develop a regional advertising campaign and a national networking alliance. Industries targeted in this initiative are Aerospace, Wind Energy, Tele-service, and General Manufacturing. Sales tax funds have also been used to assist with activities of a recently formed regional organization designed to work directly with Sheppard Air Force Base 11 (SAFB), Air Education and Training Command, the Chief of Staff for the Air Force, and our Congressional, State and Local elected officials. This Military Affairs Committee was formed to increase the value of SAFB, strengthen community development and build a stronger economy. Residential and commercial construction activity continued to remain very strong. Although the value of new residential construction permits in the amount of$46,013,829 was 11.78%below the amount issued in the 2005- 06 fiscal year, the value of commercial construction and expansion permits totaled $126,416,238, which is an increase of 80.00% from the prior fiscal year. The following expansions,new construction or consolidations in excess of$1,000,000 in value were undertaken during the 2006-07 fiscal year: • United Regional Health Care Center, South Tower—A total of 180,505 sq. ft.addition with an estimated value of$42,000,000. • Southern Hills Elementary—A total of 68,767 sq. ft.of new construction with an estimated value of $11,000,000. • Scotland Park Elementary—A total of 75,569 sq. ft.of new construction with an estimated value of $11,000,000. • Grove Apartments—A total of 159,916 sq. ft. of new construction with an estimated value of $6,903,000. • Wal-Mart—A total of 184,109 sq. ft.of new construction with an estimated value of$6,000,000. • Stone Creek Ranch Apartments—A total of 156,009 sq.ft.of new construction with an estimated value of$6,207,554. • Greenbriar Apartments—A total of 94,233 sq. ft. of new construction with an estimated value of $3,847,532. • Days Inn—A total of 34,874 sq. ft. of new construction with an estimated value of$3,200,000. • Baymont Hotel—A total of 36,687 sq. ft. of new construction with an estimated value of $3,600,000. • Holiday Inn Express—A total of 43,887 sq. ft.of new construction with an estimated value of $2,000,000. • Strip Shopping Mall—A total of 5,875 sq. ft.addition with an estimated value of$1,000,000. • Boys/Girls Club -A total of 6,285 sq. ft. addition and remodel with an estimated value of$1,297,840. • River Bend Nature Center—A total of 6,433 sq. ft.addition with an estimated value of$1,397,235. • Michael's Retail Store—A total of 17,883 sq. ft.new construction with an estimated value of $1,519,422. • Bellagio Apartments.-A total of 22,156 sq. ft.new construction with an estimated value of$1,170,000. Another indicator of performance of the local economy is the retail sales tax. The local sales tax rate in the City is two percent. Retail sales in Wichita Falls grew by 4.13%when compared to the prior fiscal year,resulting in an increase in revenue of$1,061,767 from the prior fiscal year. iii MAJOR INITIATIVES For The Year. The City Council has identified programs to meet citizens' requests for services and to safeguard the environment. Work continues on the City's major water system improvement projects. In 2001, the City embarked on a$118 million improvement program designed primarily to expand the City's water supply and treatment capabilities and to meet regulatory treatment requirements of the EPA and TCEQ. Specific projects that are complete, or nearing completion, are the addition of Lake Kemp Reservoir, Pump Station and Pipeline;a state-of-the-art 10 mgd Reverse Osmosis Facility; Secondary Reservoir and Pump Station Expansion; Distribution and Elevated Storage Improvements, Conventional Water Treatment Plant Modifications and Improvements; and new Water Plant Administration and Maintenance Facilities. Other improvements that remain include a High Service Pump Station and Storage; 10 mgd Conventional Water Treatment Expansion;and a Wastewater Reuse Treatment Facility. Needless to say, these improvements will dramatically improve the City's ability to supply and treat water for the citizens of this community. In November 2006, the City issued over $21 million in 20 Year Certificates of Obligation for several capital improvement projects. These projects include a major renovation to the Weeks Park Municipal Golf Course, street and drainage improvements,renovations to the Police Firing Range, construction of a new fire station that will replace an older fire station and improve response times, and construction of four new softball fields and a skateboarding park at the City's Sports Complex. Several of these projects are under construction and are expected to be complete during the 2007-08 fiscal year. The average annual debt service for this indebtedness is approximately $1.6 million and is being funded primarily with 4B Sales Tax Funds, Storm Water Drainage Improvement Funds,and General Funds that were made available due to the retirement of some other outstanding obligations. The City also approved the refunding of approximately $103 million of outstanding 2001 Series Water and Sewer System Revenue Bonds to achieve lower interest rates on the remaining years of the bonds. This refinancing, which was approved in February 2007, resulted in approximately $8 million in actual debt service savings and$4 million in present value debt service savings. In September 2006, the City officially assumed responsibility for the operations of the Multi-Purpose Events Center, that had previously been managed by a private non-profit organization. As a result, the City is now accounting for these operations as a separate special revenue fund. The City continues to utilize a significant portion of its Hotel/Motel Occupancy receipts to fund the operating deficit of the facilities. Work is underway at the River Road Wastewater Treatment Plant on an Odor Control Project that will install an odor control system for the primary clarifiers at the plant. A total of$1.5 million is budgeted in the Water and Sewer Fund for this project, which is anticipated to significantly improve the quality of life to residents living near the treatment facility. In February 2007, the City approved an agreement with a private contractor that was hired by the military to manage all of the housing affairs of Sheppard Air Force Base. This agreement requires the City to provide nearly all municipal services to the Capehart Housing Community at the base, and refuse collection and disposal services for other housing areas of the base. Through this agreement, the City receives payment for these services, which is expected to generate additional revenue to the General Fund in the amount of$295,000 and revenue to the Sanitation Fund in the amount of$200,000. In July 2007, the City experienced significant flooding along the Wichita River that caused damages to hundreds of residential and commercial structures located in the Tanglewood Subdivision and multiple areas of the eastern part of the community. This flooding incident was declared a federal disaster, causing significant governmental involvement in responding to the emergency, clean up efforts, and property repairs. Approximately$900,000 in City costs have been documented and submitted to the Federal Emergency Management Agency for public assistance. It is anticipated that the City's share of these costs will be 25%. In addition, the City may be expending approximately $200,000 for property acquisition and demolition expenses if a Federal Mitigation Grant is approved. The City also recently approved a General Fund appropriation of$50,000 to assist individual flood victims that were significantly affected by the flood. iv For The Future. Now that planned improvements at the Kickapoo Downtown General Aviation Airport are nearing completion, the focus is changing to improvements to the City's Municipal Airport. The City is beginning negotiations with Sheppard Air Force Base for an extension of a long term lease that will pave the way for Federal Aviation Administration Funds to be used at the Municipal Airport. During the 2006-07 fiscal year, improvements have been made to the Taxiway C, which connects Runway 17/35 and Taxiway D to the commercial ramp at the airport. Plans are to continue working toward ways to improve runways, taxiways and terminal improvements at the Municipal Airport. A major project is currently underway that will significantly improve communications and reporting efforts in the police and fire departments. In December 2007, contracts in the amount of$5 million were approved for the installation of a city-wide wireless network, software installation and training, and mobile data workstations. Once installed, the system will interface with the Computer Aided Dispatch and Records Management Systems that have been recently upgraded,allowing for field communications in public safety vehicles. In May 2007, the City Council approved a contract with a consulting firm to prepare a comprehensive plan for the City. This plan has three components: (1) Defense Diversification, (2) Downtown Development, and (3) Local Update. The consultants are currently working with city staff, elected officials, and the public to develop a plan with specific objectives for the future. The Defense Diversification element of the plan is being funded with a$200,000 grant received from the Office of Economic Adjustment of the U.S. Department of Defense and $22,000 in City General Funds. The Downtown element of the plan is being funded with $100,000 of Tax Increment Financing Funds generated from TIF Zone #1. The Local Update is being funded with $37,000 of General City Funds. Overall, the cost of this comprehensive plan is anticipated to be $350,000, and when completed, should provide a roadmap to be used by local governments and over the next several years. During the 2006-07 fiscal year, the City and the Wichita Falls Independent School District entered into an inter- local agreement for the construction of joint use gymnasiums at two of the new elementary schools being constructed by the School District. These two gymnasiums are being upsized for adult programming to be offered in the evenings and weekends by the City. The WFISD agreed to pay the cost for an elementary sized gymnasium at these schools and the City agreed to pay the incremental cost for enlarging the facilities to accommodate the City's needs. It is anticipated that the City will spend $600,000 to $800,000 for this incremental cost and gain the use of two new gymnasiums for its recreation programs. Both entities will equally share in the cost for major repair costs to the facilities over a 75 year term. The WFISD will pay for all minor maintenance costs during this joint use agreement. In August of 2007, the City Council modified an agreement with the Humane Society of Wichita County for animal reclaim and impoundment services. As part of this agreement, the City agreed to hire an architect to conduct a needs assessment of the Humane Society's facilities that are used for the City's animal reclaim and impoundment program, and for the Humane Society's adoption services. This needs assessment is complete and it identified a need to replace all of the structures currently being used for these programs. The cost estimate provided by the architects to replace these facilities was approximately$5 million. As a result, during the next several months, the City and the Humane Society will be exploring possibilities for conducting a joint fund raising campaign to construct new facilities to improve the quality of the services being provided. In addition, the City has begun to explore the needs for a new City Hall and Police facility. An architect is currently working with the City staff to evaluate these needs and is expected to provide recommendations in the near future. The City has begun to respond to GASB 43 and 45 statements which require the City to report its unfunded liability for post employment benefits other than retirement benefits. Principally,this will involve reporting the future unfunded liability for retiree health care benefits that are offered by the City. The City has hired an actuarial firm to determine the unfunded liability and to develop options for addressing the liability over time. A draft of that study is complete and several alternatives to address that future liability are currently being discussed. These alternatives will be discussed during the 2008-09 budget process and decisions will be made with the adoption of the budget. V 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, 2007, and related appropriations are carried forward to the new fiscal year through a supplemental budgetary allocation. TREASURY MANAGEMENT Cash which was temporarily idle during the year, including debt retirement funds, operating funds, and bond proceeds,was invested in public fund investment pools and U. S.government securities. RISK MANAGEMENT During 2006-07, the City of Wichita Falls continued a risk management program for worker's compensation. Various risk control techniques, including employee accident prevention training, have been utilized during the year to minimize accident-related losses. OTHER INFORMATION Independent Audit The City Charter requires an annual audit of the books of account, fmancial 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 CAFR for the fiscal year ended September 30, 2006. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of a state and local government financial report. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. The CAFR 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 our current report continues to conform to the vi Certificate of Achievement program 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, $( 3").1. Jim Dockery Director of Finance vii Certificate of Achievement for Excellence in Financial Reporting Presented to City of Wichita Falls Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2006 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports(CAFRs)achieve the highest standards in government accounting and financial reporting. 444) L?...e.....0.- T. Cox President \0. rr f *CrExecutive Director viii CITY OF WICHITA FALLS ORGANIZATIONAL CHART I WICHITA FALLS I CITIZENS I CITIZENS —I / I COMMISSIONS CITY COUNCIL BOARDS I I I I I //M,OCITY �IIGREI CITY CITY COMMUNICATIONS — — MANAGER I ATTORNEY I CLERK I I I I I I I TRAFFIC AND FINANCE ASSISTANT CITY HUMAN COMMUNITY HEALTH TRANSPORTATION DEPARTMENT MANAGER RESOURCES DEVELOPMENTI DE DEPARTMENT DEPARTMENT I I • J I AIRPORT TRANPUBLICM.L.K.F SPORTATION ACCOUNTING 1 L.JY( COLLELITYCTION ( CENTER I PERSONNEL �COMPREHENSIVE PLANNING B UILDING INSPECTION I I4DMITRATb0NFNVIR 4 HEALTH RISK ALTH LAB/WATER ENGINEERINGC SERVICES PURCHASING INFORMATION I LBRARY J I MANAGEMENT NAGEMENI'PERTY F ENFORCDEEMENT 1 IP NNURUBLIC SN G OLLUTION CENTRAL 1111I HOUSING 1 I I EMPLOYEEI 1 1 I BUDGET I DEVELOPMENT ' BENEFITS TRANSPORTATION PLANNING IBUILDING MAINTENANCE IPRINT SHOP I GOLF I COURSE I I MUNICIPAL I COURT I I I I 1 POLICE FIRE PARKS AND PUBLIC WORKS/ MULTI-PURPOSE DEPARTMENT DEPARTMENT RECREATION PUBLIC UTILITIES EVENT CENTER `I J 1DEPARTMENT DEPARTMENT DEPARTMENT SERVICESSERV CES SUPPRESSION 1 (INVESTIGATION MAIN ARSON I TENANCE S i ENGINEERING SANITATION I CONVENTION BUREAU A L EX H1E.T I 111 111 JJ 11 I RECREATION H 111 T I f I `VISITORS BUREAU I ❑:11.1. I ADMINISTRATION I I CEMETERY J (MAINTENANCE I UTILITIES 1 AGRICULTURAL ARENA RAL H (1H 1 I`l\1 CITY OF WICHITA FALLS, TEXAS LIST OF PRINCIPAL OFFICIALS SEPTEMBER 30, 2007 Title Name Mayor Lanham Lyne Mayor Pro-Tem Ray Gonzalez City Council Member Glenn Barham City Council Member Michael Smith City Council Member Rick Hatcher City Council Member Dorothy Roberts-Burns City Council Member Charles Elmore City Manager Darron Leiker City Attorney Bill Sullivan Municipal Court Judge Larry Gillen City Clerk Lydia Ozuna Assistant City Manager Matt Benoit Director of Aviation, Traffic and Transportation John Burrus Director of Finance Jim Dockery Director of Community Development David Clark Director of Public Health Lou Franklin Police Chief Dennis Bachman Fire Chief Earl Foster Director of Parks and Recreation Jack Murphy Director of Public Works and Public Utilities Scott Taylor, P.E. Director of Multi-Purpose Events Center Bob Sullivan x Financial Section Independent Auditor's Report 1� . 1 EDGIN, PARKMAN, FLEMING & FLEMING, PC CERTIFIED PUBLIC ACCOUNTANTS MICHAEL D.EDGIN,CPA 1111 a, 4501 NORTHWEST FWY. • P.O.Box 750 DAVID L. PARKMAN,CPA,CFE WICHITA FALLS,TEXAS 76307-0750 A.PAUL FLEMING,CPA,CFE PH.(940)766 5550 • FAX(940)766 5778 J.MARK FLEMING,CPA Independent Auditor's Report 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, as of and for the year ended September 30, 2007, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 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 of Wichita Falls, Texas, as of September 30, 2007, 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. In accordance with Government Auditing Standards, we have also issued under separate cover our report dated March 11, 2008 on our consideration of the City of Wichita Falls, Texas' internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is to describe the scope 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 and should be considered in assessing the results of our audit. 1 The Management's Discussion and Analysis, the schedules on the Texas Municipal Retirement System and Wichita Falls Firemen's Relief and Retirement Fund, and the budgetary comparison information identified as Required Supplementary Information in the table of contents are not a required part of the basic financial statements, but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. 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 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 financial statements and supporting schedules have been subjected to auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. EDGIN, PARKMAN, FLEMING & FLEMING, PC Wichita Falls, Texas March 11, 2008 2 Management Discussion and Analysis Wichita , r TEXAS\U City of Wichita Falls,Texas Management's Discussion and Analysis September 30,2007 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 30,2007. 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 30,2007,by$320,814,225 (net assets). Of this amount, $57,827,576 (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. The City's total net assets increased by $17,337,853. This increase can be attributed primarily to the following: higher than anticipated revenues from sales taxes, franchise fees and interest earnings; infrastructure assets principally donated from developers; grants from the 4B Sales Tax Corporation for debt service payments; grants from the Federal Aviation Administration for improvements to the City's expenses lower than anticipated expenses in employee health claims; and savings in personnel in various departments due to vacancies. At September 30, 2007, the City's governmental funds reported combined ending fund balances of $51,651,224. Of this amount, $46,117,934, or 89.29%, is available for spending at the government's discretion,(unreserved fund balance). At the end of the current fiscal year, unreserved fund balance for the General Fund was $15,569,840 or 27.33%of total General Fund expenditures. The City's total debt increased by $15,104,016 during the current fiscal year. The primary reason for this increase is because the City issued $21,150,000 in additional certificates of obligation debt during this fiscal year, but continued to retire outstanding General Obligation Bonds, Water and Sewer System Revenue Bonds,and Combination Tax and Revenue Bonds. 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 fmancial statements, and 3) notes to the financial statements. This report contains other supplementary information in addition to the basic financial statements. 3 1300 7th Street P.O.Box 1431 Wichita Falls,Texas 76307 City of Wichita Falls,Texas Management's Discussion and Analysis September 30,2007 (continued) Government-wide Financial Statements The government-wide fmancial statements, which can be found on pages 13-14 of this report, include the Statement of Net Assets (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 fmances in a manner similar to a private- 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 Assets 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 assets. Over time, the increases or decreases in net assets 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 assets 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 Assets and the Statement of Activities divide the City's activities into three types: h' 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, and general administration and finance. The Multi-Purpose Events Center is also reported as a governmental activity. Property taxes, sales taxes, franchise fees, and variousgrant fundsprovide the majority of ty p rtya�onty 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, municipal airports,transit system,storm water drainage improvements,and fleet maintenance services. 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#1,and the Wichita Falls Reinvestment Zone#2. 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 fmancial statements are 4 City of Wichita Falls, Texas Management's Discussion and Analysis September 30,2007 (continued) 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 is presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues and Changes in Fund Balances because it is considered a major fund 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 15-18 of this report. 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, municipal airports,transit operations,and storm water utility district. • 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, 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 fmancial statements. Proprietary fund fmancial statements provide the same type of information as the business-type activities shown in the government-wide fmancial statements, only in more detail and include some of the internal service fund-type activities. The proprietary funds financial statements provide separate information for the Water and Sewer Fund and the Sanitation 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 5 City of Wichita Falls, Texas Management's Discussion and Analysis September 30,2007 (continued) 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 25-53 of this report. Government-Wide Financial Analysis The City's combined net assets were $320,814,225 as of September 30, 2007, an increase of$17,337,853, or 5.71% from the prior year. Using the Tables below, an analysis of the net assets of the City can be made. The largest portion of the City's net assets, $248,763,737, or 77.54%, 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 assets, $14,222,912, or 4.43%, represents resources that are subject to external restrictions on how they may be used. The remaining balance of net assets, $57,827,576, or 18.03%,may be used to meet the government's ongoing obligations to citizens and creditors. Net Assets (in thousands) Governmental Business-type Activities Activities Total 2007 2006 2007 2006 2007 2006 Current and Other Assets $ 62,028 $ 36,156 $ 114,324 $ 116,762 $ 176,352 $ 152,918 Capital Assets 148,698 146,588 206,964 201,074 355,662 347,662 Total Assets 210,726 182,744 321,288 317,836 532,014 500,580 Long Term Liabilities 39,774 20,256 156,908 160,920 196,682 181,176 Other Liabilities 8,185 7,467 6,333 8,456 14,518 15,923 Total Liabilities 47,959 27,723 163,241 169,376 211,200 197,099 Net Assets: Invested in Capital Assets, Net of Related Debt 115,911 132,958 132,852 120,263 248,763 253,221 Restricted 1,542 1,374 12,681 16,235 14,223 17,609 Unrestricted 45,314 20,689 12,514 11,962 57,828 32,651 Total Net Assets $ 162.767 $ 155.021 $ 158.047 S 148.460 $ 320.814 $ 303.481 6 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2007 (continued) CHANGES IN NET ASSETS (in thousands) Governmental Business-type Activities Activities Total 2007 2006 2007 2006 2007 2006 Revenues: Program Revenues: Charges For Services $ 8,854 $ 6,915 $ 42,654 $ 46,002 $ 51,508 $ 52,917 Operating Grants and Contributions 12,299 11,110 1,027 1,252 13,326 12,362 Capital Grants and Contributions 3,218 2,667 581 455 3,799 3,122 General Revenues: Property Taxes 24,975 23,523 - - 24,975 23,523 Sales Taxes 20,069 19,272 - - 20,069 19,272 Other Taxes/Fees 7,600 7,487 - - 7,600 7,487 Investment Earnings 2,684 1,409 5,576 5,094 8,260 6,503 Miscellaneous 712 173 - - 712 173 Total Revenue 80,411 72,556 49,838 52,803 130,249 125,359 Expenses: Administrative Services 10,363 10,648 - - 10,363 10,648 Police 18,587 17,734 - - 18,587 17,734 Fire 11,296 10,826 - - 11,296 10,826 Parks and Recreation 4,478 4,211 - - 4,478 4,211 Accounting/Finance 1,893 1,844 - - 1,893 1,844 Community Development 6,574 6,293 - - 6,574 6,293 Public Works 8,616 7,706 - - 8,616 7,706 Health 4,736 4,409 - - 4,736 4,409 Traffic and Transportation 2,590 2,527 - - 2,590 2,527 MPEC 4,291 2,166 - - 4,291 2,166 Interest and Fees on Long-term Debt 1,309 722 - - 1,309 722 Golf - - - 901 901 Municipal Airport - - 276 281 276 281 Kickapoo Airport - - 967 575 967 575 Transit - - 1,373 1,281 1,373 1,281 Sanitation - - 8,638 8,060 8,638 8,060 Water and Sewer - - 26,765 26,380 26,765 26,380 Stormwater Drainage - - 356 329 356 329 Total Expenses 74,733 69,086 38,375 37,807 38,375 106,893 Increase in Net Assets Before Transfers 5,677 3,470 11,661 14,996 17,338 18,466 Transfers 1,973 2,483 (1,973) (2,483) - - Increase in Net Assets 7,650 5,953 9,688 12,513 17,338 18,466 Net Assets-Beginning of Year 155,118 149,068 148,359 135,947 303,477 285,015 Prior Period Adjustment - - - - - - Net Assets-End of Year $162.768 $155.021 $158.047 S 148.460 $320.815 $303.481 7 City of Wichita Falls,Texas Management's Discussion and Analysis September 30, 2007 (continued) Governmental Activities—Governmental activities increased City assets by$7,649,953,thus accounting for 44.12%of total growth. Property tax revenues increased by $1.45 million, or 6.17%, over the prior fiscal year due to growth in the tax base. Sales taxes collected increased by$797,000, or 4.14%over last year. Investment earnings grew due to rising interest rates and contributions from intergovernmental revenue continued to be a strong revenue source for the City. The City also continues to rely heavily on contributions from the 4B Sales Tax Corporation to assist with debt service payments. Although expenditures exceeded the prior year, they were well within budgeted amounts, principally due to savings in personnel related accounts from new positions that went unfilled during most of the fiscal year. Business-Type Activities - Net assets for the City's Business-type Activities increased by $9,687,900, accounting for 55.88%of the total growth in the City's net assets. The City continues to reduce liabilities in its Water and Sewer Fund as debt service payments are made on outstanding revenue bonds. The City also continues to recognize capital assets made to Kickapoo Airport, which are paid for principally with Federal Airport Improvement Funds. In addition,the Stormwater Drainage Fund had lower than budgeted expenditures during the fiscal year. Financial Analysis of the City's Funds Governmental Funds — The focus of the City of Wichita Falls' 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,unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of September 30, 2007, the City's governmental funds reported combined fund balances of $51,651,224. However, over $33.5 million of this amount is designated for subsequent year expenditures for capital projects, special programs, or legal settlements. In addition, $5.5 million is reserved, which indicates it is not available for spending, because it has already been committed to pay for encumbrances, inventory and prepaid items,debt service,and cemetery perpetual care. The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unreserved fund balance of the General Fund was $15,569,840. As a measure of the General Fund's liquidity, it may be useful to compare both the unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 27.33% of total General Fund expenditures, while the total fund balance represents 32.88% of total General Fund expenditures. The fund balance of the General Fund increased by$4,834,692 during the current fiscal year. 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 City's internal service funds include the Fleet Maintenance Fund, Employee Benefit Trust Fund and the Duplicating Services Fund. The net assets for the City's internal service funds are$19.4 million. Of this amount, $15.9 million is invested in capital assets and $2.4 million is reserved for employee life and health benefits. The remainder of net assets of the internal service funds are generally used to replace capital assets. The purpose of the internal service funds is to provide services within the organization on a break-even basis. The net income or loss from these internal service funds has been allocated back to the using departments or funds for the City-wide financial statements. 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 assets 8 City of Wichita Falls,Texas Management's Discussion and Analysis September 30, 2007 (continued) and changes in net assets of the enterprise funds in these financial statements are identical with the net assets and changes in net assets reflected in the city-wide presentation. General Fund Budgetary Highlights The final amended expenditure budget for the General Fund, including transfers out, was increased by $2,848,366 from the original adopted budget. Some of the primary reasons for this increase in appropriations can be briefly summarized as follows: • Approximately $2,171,000 of prior year encumbrances were carried forward to the 2006-07 amended budget, the majority of which was for the Street Overlay Program, Telephone System Replacement Project,and Fire Truck purchase. • Approximately $450,000 was appropriated for to pay off a construction loan to a contractor that provided funding to build the suites at the Kay Yeager Coliseum. • An additional $65,000 was budgeted for architectural services as the City's share of an agreement with the WFISD for joint-use gymnasiums. • An additional $141,000 was budgeted for a new organizational unit that accounts for maintenance costs associated with the Business Park and MPEC Actual revenues in the General Fund for the 2006-07 fiscal year were $60,312,750, which was $3,049,481 above final budgeted figures. However, over$1,303,000 of this amount is due to donations of streets and drainage improvements from private developers that are recorded as revenues under the new reporting model. In addition, the City received significantly more revenue than the amended budget from sales tax collections, interest earnings, franchise fees, property sales, and service charges through an agreement to provide municipal services at SAFB. Actual expenditures in the General Fund for the 2006-07 fiscal year were$56,963,254 compared to a final budget of$61,740,226. Much of this variance is due principally to a delay in a significant street overlay program until the ensuing fiscal year. In addition, salary savings that accrued to the General Fund from vacancies in authorized positions accounted for the majority of the remaining amount. 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, 2007, amounts to $355,661,176 (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: • Continued improvements to the water system, principally at Jasper and Cypress Water Treatment Plants. • Installation of a new Voice over Internet Protocol Telephone System. • Continued improvements at Kickapoo Airport. • Major renovations at Weeks Park Golf Course. • Construction of additional playing fields at the Softball Complex. 9 City of Wichita Falls, Texas Management's Discussion and Analysis September 30,2007 (continued) Capital Assets,net of Accumulated Depreciation (in thousands) Governmental Business-type Activities Activities Total 2007 2006 2007 2006 2007 2006 Land $ 8,819 $ 12,678 $ 8,202 $8,150 $ 17,021 $ 20,828 Land Betterments 13,260 8,365 15,464 15,821 28,724 24,186 Buildings, Systems and Improvements 46,808 47,994 129,793 102,888 176,601 150,882 Infrastructure 65,402 65,174 - - 65,402 65,174 Machinery and Equip 10,668 8,547 2,495 2,106 13,163 10,653 Furniture and Fixtures 14 23 12 16 26 39 Motor Vehicles - - 12,998 12,100 12,998 12,100 Construction in Progress 3,726 3.807 38,000 59,993 41,726 63,800 Totals $ 148.697 $ 146.588 $206.964 $201.074 $ 355.661 $ 347.662 Additional information on the City's capital assets can be found in Note 7 on pages 38-41 of this report. Long Term Debt-At the end of the current fiscal year, the City of Wichita Falls had a total bonded debt and notes outstanding of$185,281,029. The City of Wichita Falls refunded $103,495,000 of the W&S Priority Lien Revenue Bonds-Series 2001 and issued additional bond indebtedness of$21,150,000 for the 2006-A and 2006-B Combination Tax & Revenue Certificates of Obligations during the 2006-07 fiscal year. Moody's Investor's Service has assigned a credit rating of Al for the City's General Obligation Bonds and a rating of A2 for the City's Water and Sewer System Revenue Bonds. As of September 30, 2007, Standard&Poors 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. 10 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2007 (continued) Outstanding Debt at Year-End (in thousands) Governmental Business-type Activities Activities Total 2007 2006 2007 2006 2007 2006 General Obligation Bonds $ 7,390 $ 8,270 $ - $ - $ 7,390 $ 8,270 Combination Tax and Revenue Bonds 25,396 5,360 27,865 30,962 53,261 36,322 Util System Revenue Bonds - - 123,869 124,824 123,869 124,824 Notes Payable 61 120 700 728 761 848 Total $ 32.847 $ 13.750 $ 152.434 $ 156.514 $ 185.281 $ 170.264 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, 2007, was $.59246 per$100, which means that the City has a tax margin of$1.65754 per$100, and could raise up to $65,515,746 additional tax revenue a year from the present assessed valuation of$3,952,589,119 before the limit is reached. The current ratio of general bonded debt outstanding to the assessed value of all taxable property is 0.83%. Additional information about the City's long-term debt can be found in Note 12 on pages 46-49 of this report. Economic Factors and Next Year's Budgets and Rates Overall, operating revenues in the General Fund are budgeted to increase by 4.94% from the 2006-07 adopted budget. The largest revenue source of the City's General Fund is the property tax. Appraised property values for the 2006 tax year, as certified by the Wichita County Appraisal District, increased 6.12% from the prior year certified tax roll. The City maintained the property tax rate at $.59246 per $100 of assessed value, which was the same as the 2006-07 fiscal year. The second largest revenue source of the City's General Fund is the retail sales tax. The City experienced an increase in sales tax collections of approximately 4.00% in 2006-07 compared to the prior fiscal year. In addition, the average annual growth rate for the past several years has been approximately 4.00%and is expected to continue at that rate in the 2007-08 fiscal year. Nevertheless, the City budgeted this revenue source at a fairly conservative growth rate of 2.00% above the amount that was estimated would be generated in 2006-07 when the budget was prepared in July 2007. Retail Water and Sewer rates were increased by 3.00%from the 2006-07 fiscal year. This increase is the first retail rate increase in three years. In addition, the City Council approved significant rate increases to wholesale water customers. 11 City of Wichita Falls, Texas Management's Discussion and Analysis September 30,2007 (continued) Sanitation Collection Rates were increased by 20%to reduce the need to use Sanitation Reserve Funds for operational needs. Requests for Information This financial report is designed to provide a general overview of the City of Wichita Falls' finances 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. 12 _ I Basic Financial Statements EXHIBIT A-1 CITY OF WICHITA FALLS, TEXAS STATEMENT OF NET ASSETS SEPTEMBER 30, 2007 Primary Government Governmental Business-type Component Activities Activities Total Units Assets Cash and cash equivalents $ 51,862,745 $ 20,315,672 $ 72,178,417 $25,769,878 Receivables(net): Taxes and assessments 1,116,852 - 1,116,852 27,812 Customer and trade - 4,724,958 4,724,958 - Component unit 1,516,694 - 1,516,694 - Government agencies 7,674,147 164,180 7,838,327 1,162,484 Other 1,940,244 217,507 2,157,751 - Internal balances (2,649,825) 2,649,825 - - Inventory 348,640 1,764,667 2,113,307 - Prepaid items 172,418 19,409 191,827 85,901 Other assets 46,603 - 46,603 - Deferred charges - 6,808,117 6,808,117 - Restricted assets: Cash and cash equivalents - 71,933,514 71,933,514 - Investments - 5,689,236 5,689,236 - Receivables: Other - 37,032 37,032 - Capital assets not being depreciated 12,544,561 46,202,030 58,746,591 1,486,592 Capital assets net of accumulated depreciation 136,152,946 160,761,639 296,914,585 928,475 Total assets 210,726,025 321,287,786 532,013,811 29,461,142 Liabilities Accounts payable-trade 1,488,962 2,000,990 3,489,952 28,895 Accrued payroll 1,768,131 484,104 2,252,235 - Payable to primary government - - - 1,516,694 Payable to government agencies 335,733 52,359 388,092 - Estimated health claims payable 476,004 - 476,004 - Other liabilities 4,078,977 1,264,904 5,343,881 - Unearned revenue 37,235 - 37,235 - Customer deposits - 2,530,673 2,530,673 - Long-term liabilities: Portion due or payable within one year 2,843,772 6,485,838 9,329,610 - Portion due or payable after one year 36,929,739 150,422,165 187,351,904 - Total liabilities 47,958,553 163,241,033 211,199,586 1,545,589 Net Assets Invested in capital assets,net of related debt 115,911,491 132,852,246 248,763,737 2,415,067 Restricted for debt service 1,541,859 12,681,053 14,222,912 - Unrestricted 45,314,122 12,513,454 57,827,576 25,500,486 Total net assets $ 162,767,472 $ 158,046,753 $320,814,225 $27,915,553 See accompanying notes to the basic financial statements. 13 CITY OF WICHITA FALLS, TEXAS STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2007 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary government: Governmental activities: Administrative services $ 10,363,134 $ 3,327,519 $ 293,972 $ - Police 18,587,210 700,216 560,068 - Fire 11,295,623 5,434 6,542 - Parks and recreation 4,478,311 443,827 159,468 - Accounting/finance 1,893,389 - -Community development 6,573,917 1,138,671 6,661,788 Public works 8,616,348 7,286 688,389 1,303,415 Health 4,736,162 803,115 1,828,029 - Traffic and transportation 2,590,309 212,911 - 1,914,588 Multi-Purpose Events Center 4,291,434 2,215,411 463,521 - Interest and fees on long-term debt 1,308,748 - 1,636,818 - Total governmental activities 74,734,585 8,854,390 12,298,595 3,218,003 Business-type activities: Municipal Airport 276,368 441,471 - - Kickapoo Airport 966,961 789,522 - - Transit 1,373,283 206,109 1,026,685 - Sanitation 8,638,374 9,917,386 - - Water and sewer 26,764,879 30,031,969 - 580,729 Stormwater drainage 355,697 1,267,533 - - Total business-type activities 38,375,562 42,653,990 1,026,685 580,729 Total primary government $ 113,110,147 $ 51,508,380 $ 13,325,280 $ 3,798,732 Component units: Community development $ 5,699,279 $ 106,800 $ 208,143 $ - General revenues and transfers: Taxes: Property tax Sales tax Franchise fees Hotel occupancy tax Beverage tax Bingo tax Investment earnings Miscellaneous Transfers Total general revenues and transfers Change in net assets Net assets-beginning Net assets-ending See accompanying notes to the basic financial statements. 14 EXHIBIT A-2 Net(Expense)Revenue and Changes in Net Assets Primary Government Governmental Business-type Component Activities Activities Total Units $ (6,741,643) $ - $ (6,741,643) $ - (17,326,926) - (17,326,926) - (11,283,647) - (11,283,647) - (3,875,016) - (3,875,016) - (1,893,389) - (1,893,389) - 1,226,542 - 1,226,542 - (6,617,258) - (6,617,258) - (2,105,018) - (2,105,018) - (462,810) - (462,810) - (1,612,502) - (1,612,502) - 328,070 - 328,070 - (50,363,597) - (50,363,597) - - 165,103 165,103 - - (177,439) (177,439) - - (140,489) (140,489) - - 1,279,012 1,279,012 - - 3,847,819 3,847,819 - - 911,836 911,836 - - 5,885,842 5,885,842 - (50,363,597) 5,885,842 (44,477,755) - - - - (5,384,336) 24,975,158 - 24,975,158 246,400 20,068,529 - 20,068,529 6,689,510 5,780,311 - 5,780,311 - 1,417,397 - 1,417,397 - 236,367 - 236,367 - 166,223 - 166,223 - 2,684,388 5,575,703 8,260,091 1,331,682 712,358 199,174 911,532 - 1,972,819 (1,972,819) - - 58,013,550 3,802,058 61,815,608 8,267,592 7,649,953 9,687,900 17,337,853 2,883,256 155,117,519 148,358,853 303,476,372 25,032,297 $ 162,767,472 $ 158,046,753 $ 320,814,225 $ 27,915,553 EXHIBIT A-3 CITY OF WICHITA FALLS, TEXAS BALANCE SHEET-GOVERNMENTAL FUNDS SEPTEMBER 30, 2007 Total Nonmajor Governmental General Governmental Funds Assets Cash and cash equivalents $ 18,260,550 $ 30,518,235 $ 48,778,785 Receivables(net): Taxes and assessments 884,890 231,962 1,116,852 Other City funds 1,846,817 - 1,846,817 Component unit - 1,516,694 1,516,694 Government agencies 3,372,753 4,301,394 7,674,147 Other 1,844,475 95,769 1,940,244 Inventory 257,544 80,295 337,839 Prepaid items 121,244 22,411 143,655 Other assets 100 46,503 46,603 Total assets $ 26,588,373 $ 36,813,263 $ 63,401,636 Liabilities and Fund Balances Liabilities: Accounts payable $ 622,511 $ 726,126 $ 1,348,637 Accrued payroll 1,619,553 142,239 1,761,792 Payable to other City funds - 1,788,473 1,788,473 Payable to government agencies 210,722 125,011 335,733 Notes payable - 61,093 61,093 Other liabilities 3,183,832 895,146 4,078,978 Deferred revenue 1,997,070 155,567 2,152,637 Claims and judgments payable 223,069 - 223,069 Total liabilities 7,856,757 3,893,655 11,750,412 Fund balances: Reserved for encumbrances 2,782,888 29,539 2,812,427 Reserved for inventory and prepaid items 378,888 22,411 401,299 Reserved for debt service - 1,470,676 1,470,676 Reserved for perpetual care - 848,888 848,888 Unreserved, designated for subsequent years expenditures reported in: General Fund 3,000,000 - 3,000,000 Special Revenue Funds - 7,058,854 7,058,854 Capital Projects Funds - 23,458,510 23,458,510 Unreserved, undesignated reported in: General Fund 12,569,840 - 12,569,840 Special Revenue Fund - 30,730 30,730 Total fund balances 18,731,616 32,919,608 51,651,224 Total liabilities and fund balances $ 26,588,373 $ 36,813,263 $ 63,401,636 See accompanying notes to the basic financial statements. 15 EXHIBIT A-4 CITY OF WICHITA FALLS, TEXAS RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS SEPTEMBER 30, 2007 Total fund balances -governmental funds (Exhibit A-3) $ 51,651,224 Amounts reported for governmental activities in the Statement of Net Assets (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 $249,917,413 Related accumulated depreciation 101,287,500 148,629,913 Property taxes receivable and municipal court fines are not available to pay for current period expenditures and therefore are deferred in the funds. 2,115,402 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: General obligation bonds payable 32,786,016 Accrued vacation and sick leave 6,423,448 Claims and judgments payable 158,032 Accrued interest 120,822 (39,488,318) Internal service funds are used by management to charge the costs of duplicating services and health insurance claims to the individual funds. The assets and liabilities of these internal service funds are included with the governmental activities. 2,311,448 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. (2,452,197) Total net assets -governmental activities (Exhibit A-1) $ 162,767,472 See accompanying notes to the basic financial statements. 16 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, 2007 Total Nonmajor Governmental General Governmental Funds Revenues Taxes $ 49,987,680 $ 2,649,638 $ 52,637,318 Charges for services 2,623,082 579,617 3,202,699 Licenses and permits 2,215,813 - 2,215,813 Fines and forfeitures 1,908,597 218,465 2,127,062 Intergovernmental revenue 49,005 11,087,428 11,136,433 Contributions 1,443,274 2,923,687 4,366,961 Miscellaneous revenue 2,085,299 4,579,016 6,664,315 Total revenues 60,312,750 22,037,851 82,350,601 Expenditures Administrative services 8,731,238 1,234,256 9,965,494 Police 17,448,846 619,322 18,068,168 Fire 11,220,603 17,819 11,238,422 Parks and recreation 4,005,655 367,805 4,373,460 Accounting/finance 1,811,690 - 1,811,690 Community development 1,625,846 5,026,316 6,652,162 Public works 4,990,429 1,048,361 6,038,790 Health 2,775,968 1,952,446 4,728,414 Traffic and transportation 2,132,162 223,087 2,355,249 Multi-Purpose Events Center - 3,498,189 3,498,189 Capital outlay 2,220,817 4,872,819 7,093,636 Debt service- principal - 2,510,000 2,510,000 Debt service- interest and paying agent fees - 1,271,106 1,271,106 Total expenditures 56,963,254 22,641,526 79,604,780 Excess of revenues over (under) expenditures 3.349,496 (603,675) 2,745,821 Other Financing Sources(Uses) Proceeds from general obligation bonds - 21,150,000 21,150,000 Premiums on general obligation bonds - 552,048 552,048 Transfers in 2,418,384 3,503,707 5,922,091 Transfers out (933,189) (4,468,376) (5,401,565) Total other financing sources (uses) 1,485,195 20,737,379 22,222,574 Net change in fund balance 4,834,691 20,133,704 24,968,395 Fund balances-beginning 13,896,925 12,785,904 26,682,829 Fund balances-ending $ 18,731,616 $ 32,919,608 $ 51,651,224 See accompanying notes to the basic financial statements. 17 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, 2007 Net change in fund balances-total governmental funds(Exhibit A-5) $ 24,968,395 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: Capital outlay during the year $ 7,124,338 Depreciation expense for the year 4,956,310 2,168,028 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. (147,079) 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 revenues increased by this amount this year. (271,471) The issuance of long-term debt provides current financial resources to governmental funds. However,the issuance increases long-term liabilities in the Statement of Net Assets. Long- term debt issued in 2006-2007 was: (21,702,048) 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 Assets. Bond principal payments in 2006-07 were: 2,546,032 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 (233,294) Claims and judgments payable 17,836 (215,458) 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 funds 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 increase in accrued interest is as follows: Accrued interest at September 30, 2006 47,149 Accrued interest at September 30,2007 120,822 (73,673) Internal service funds are used by management to charge the costs of duplicating services and health insurance claims to the individual funds.The net revenues of these internal service funds are included with the governmental activities. 881,879 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. (504,651) Change in net assets of governmental activities(Exhibit A-2) $ 7,649,954 See accompanying notes to the basic financial statements. 18 EXHIBIT A-7 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF FUND NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30,2007 Enterprise Funds Nonmajor Water and Enterprise Internal Sewer Sanitation Funds Total Service Funds Assets Current assets: Cash and cash equivalents $ 13,501,029 $ 2,780,268 $ 3,441,886 $ 19,723,183 $ 3,676,449 Restricted cash, cash equivalents and investments: Cash and cash equivalents 71,933,514 - - 71,933,514 - Investments 5,689,236 - - 5,689,236 - Receivables(net): Customer and trade 3,684,523 918,583 121,852 4,724,958 - Government agencies 51,419 - 112,761 164,180 - Other 116,226 - 53,309 169,535 47,972 Other(restricted) 37,032 - - 37,032 - Inventory 900,971 - 35,986 936,957 838,511 Prepaid items 105 300 7,356 7,761 40,411 Total current assets 95,914,055 3,699,151 3,773,150 103,386,356 4,603,343 Long-term assets: Deferred charges 6,808,117 - - 6,808,117 - Capital assets, net of accumulated depreciation 173,296,830 5,063,474 12,775,793 191,136,097 15,895,166 Total long-term assets 180,104,947 5,063,474 12,775,793 197,944,214 15,895,166 Total assets 276,019,002 8,762,625 16,548,943 301,330,570 20,498,509 See accompanying notes to the basic financial statements. 19 EXHIBIT A-7 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF FUND NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30,2007 Enterprise Funds Nonmajor Water and Enterprise Internal Sewer Sanitation Funds Total Service Funds Liabilities Current liabilities: Accounts payable-trade 1,348,455 104,108 175,554 1,628,117 513,198 Accrued payroll 261,050 115,434 42,493 418,977 71,466 Accrued vacation and sick leave 268,479 103,273 36,051 407,803 57,435 Payable to other City funds 58,344 - - 58,344 - Payable to government agencies - 52,051 308 52,359 - Estimated health claims payable - - - - 476,004 Other liabilities 1,233,339 - 31,565 1,264,904 - Revenue bonds-current maturities 5,367,327 - - 5,367,327 - Accrued interest-revenue bonds 1,118,511 - - 1,118,511 - Total current liabilities 9,655,505 374,866 285,971 10,316,342 1,118,103 Long-term liabilities: Payable to U.S. Government 699,748 - - 699,748 - Revenue bonds, less current maturities 146,366,845 - - 146,366,845 - Estimated liability for landfill closure and post-closure care costs - 2,891,365 - 2,891,365 - Customer deposits 2,530,673 - - 2,530,673 - Total long-term liabilities 149,597,266 2,891,365 - 152,488,631 - Total liabilities 159,252,771 3,266,231 285,971 162,804,973 1,118,103 Net Assets Invested in capital assets, net of related debt 99,185,407 5,063,474 12,775,793 117,024,674 15,895,166 Restricted for debt service 12,681,053 - - 12,681,053 - Unrestricted 4,899,771 432,920 3,487,179 8,819,870 3,485,240 Total net assets $116,766,231 $ 5,496,394 $ 16,262,972 138,525,597 $19,380,406 Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds 19,521,156 Net assets of business type activities $158,046,753 See accompanying notes to the basic financial statements. 20 Wichita TEXAS \.\ EXHIBIT A-8 CITY OF WICHITA FALLS, TEXAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2007 Enterprise Funds Nonmajor Water and Enterprise Internal Sewer Sanitation Funds Total Service Funds Operating revenues: Charges for services $ 29,848,635 $ 9,906,329 $ 1,421,014 $41,175,978 $ 9,068,821 Rents, concessions and other 183,334 11,057 1,283,621 1,478,012 346,586 Contributions - - - - 7,922,996 Total operating revenues 30,031,969 9,917,386 2,704,635 42,653,990 17,338,403 Operating expenses: Personnel services 7,316,800 3,250,475 1,102,873 11,670,148 1,916,885 Supplies and materials 1,442,890 305,914 683,620 2,432,424 3,118,944 Maintenance and repairs 1,467,042 288,982 283,815 2,039,839 1,800,783 Utilities and other services 5,223,122 3,936,030 299,088 9,458,240 134,818 Insurance and contract support 492,589 90,373 85,057 668,019 6,217,868 Other expenses 1,331,419 589,017 266,950 2,187,386 1,183,396 Depreciation and amortization 3,833,935 97,499 317,631 4,249,065 3,179,310 Total operating expenses 21,107,797 8,558,290 3,039,034 32,705,121 17,552,004 Operating income(loss) 8,924,172 1,359,096 (334,399) 9,948,869 (213,601) Nonoperating revenues(expenses): Interest income 5,261,403 139,884 174,416 5,575,703 94,429 Gain on sale/abandonment of capital assets 802 - - 802 198,372 Interest expense and paying agent fees (6,626,333) - - (6,626,333) - Intergovernmental operating grants - - 1,026,685 1,026,685 - Total nonoperating revenues(expenses) (1,364,128) 139,884 1,201,101 (23,143) 292,801 Income(loss)before contributions and transfers 7,560,044 1,498,980 866,702 9,925,726 79,200 Capital contributions 580,729 - - 580,729 - Transfers in - - 2,478,113 2,478,113 1,995,041 Transfers out (1,179,686) (2,576,755) (610,239) (4,366,680) (627,000) Change in net assets 6,961,087 (1,077,775) 2,734,576 8,617,888 1,447,241 Net assets-beginning 109,805,144 6,574,169 13,528,396 17,933,165 Net assets-ending $116,766,231 $ 5,496,394 $16,262,972 $ 19,380,406 Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds 1,070,012 Change in net assets of business type activities $ 9,687,900 See accompanying notes to the basic financial statements. 21 EXHIBIT A-9 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2007 Enterprise Funds Nonmajor Water and Enterprise Internal Sewer Sanitation Funds Total Service Funds Cash flows from operating activities: Received from customers and users $ 30,145,900 $ 9,885,382 $ 2,718,344 $ 42,749,626 $ 17,314,227 Payments to suppliers (14,318,028) (5,767,781) (1,722,329) (21,808,138) (12,552,507) Payments to employees (5,493,665) (2,416,909) (855,368) (8,765,942) (1,457,962) Net cash provided by(used in)operating activities 10,334,207 1,700,692 140,647 12,175,546 3,303,758 Cash flows from noncapital financing activities: Intergovernmental operating grants - - 1,021,671 1,021,671 - Transfers in from other funds 3,365,381 - 2,478,113 5,843,494 1,995,041 Transfers out to other funds (4,545,067) (2,576,755) (610,239) (7,732,061) (627,000) Net cash provided(used)by noncapital financing activities (1,179,686) (2,576,755) 2,889,545 (866,896) 1,368,041 Cash flows from capital and related financing activities: Acquisition and construction of capital assets (5,982,954) (206,130) (2,613,820) (8,802,904) (4,034,184) Proceeds from sale of capital assets 802 - - 802 215,456 Proceeds from sale of refunding bonds 103,932,938 - - 103,932,938 - Payments to escrow agent for refunded bonds (106,709,687) - - (106,709,687) - Payment of bond issuance costs (1,215,630) - - (1,215,630) - Principal paid on long-term debt (4,533,291) - - (4,533,291) - Interest and fees paid on long-term debt (6,784,973) - - (6,784,973) - Net cash provided by(used for)capital and related financing activities (21,292,795) (206,130) (2,613,820) (24,112,745) (3,818,728) Cash flows from investing activities: Interest on investments 5,261,403 139,884 174,416 5,575,703 94,428 Sale of investments 6,252 - - 6,252 - Net cash provided by(used for)investing activities 5,267,655 139,884 174,416 5,581,955 94,428 Net Increase(Decrease)in Cash and Cash Equivalents (6,870,619) (942,309) 590,788 (7,222,140) 947,499 Cash and Cash Equivalents-Beginning 92,305,162 3,722,577 2,851,098 98,878,837 2,728,950 Cash and Cash Equivalents-Ending $ 85,434,543 $ 2,780,268 $ 3,441,886 $ 91,656,697 $ 3,676,449 Reconciliation of cash and cash equivalents on the balance sheet to the statement of cash flows: Cash and cash equivalents $ 13,501,029 $ 2,780,268 $ 3,441,886 $ 19,723,183 $ 3,676,449 Restricted assets-cash and cash equivalents 71,933,514 - - 71,933,514 - Total cash and cash equivalents at end of year $ 85,434,543 $ 2,780,268 $ 3,441,886 $ 91,656,697 $ 3,676,449 See accompanying notes to the basic financial statements. 22 EXHIBIT A-9 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2007 Enterprise Funds Nonmajor Water and Enterprise Internal Sewer Sanitation Funds Total Service Funds Reconciliation of Operating Income(Loss)to Net Cash Provided by(Used in)Operating Activities: Operating income(loss) $ 8,924,172 $ 1,359,096 $ (334,399) $ 9,948,869 $ (213,601) Adjustments to reconcile operating income(loss) to net cash provided by(used in)operating activities: Depreciation and amortization 3,833,935 97,499 317,631 4,249,065 3,179,310 Customer deposits received 43,358 - - 43,358 - (Increase)decrease in current assets: Receivables: Customer and trade 46,794 (32,004) 439 15,229 - Other 23,779 - 13,270 37,049 (24,176) Inventory (85,184) - 19,323 (65,861) (104,898) Prepaid items 22,470 (100) 1,155 23,525 (24,385) Increase(decrease)in current liabilities: Accounts payable-trade (1,184,449) 46,354 102,919 (1,035,176) 338,681 Accrued payroll (91,670) 1,951 503 (89,216) (1,339) Accrued vacation and sick leave 11,646 (9,424) 6,948 9,170 9,227 Payable to other City funds 41,832 - - 41,832 - Estimated health claims payable - - - - 144,939 Payable to government agencies - 6,704 (88) 6,616 - Other liabilities (1,252,476) - 12,946 (1,239,530) - Estimated liability for landfill closure - 230,616 - 230,616 - Total adjustments 1,410,035 341,596 475,046 2,226,677 3,517,359 Net cash provided by(used in) operating activities $ 10,334,207 $ 1,700,692 $ 140,647 $ 12,175,546 $ 3,303,758 Noncash capital and financing activities: Capital assets received from developers $ 580,729 $ - $ - $ 580,729 $ - See accompanying notes to the basic financial statements. 23 EXHIBIT A-10 CITY OF WICHITA FALLS, TEXAS STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES SEPTEMBER 30, 2007 Agency Fund Assets Cash and cash equivalents $ 95,593 Liabilities Other liabilities $ 95,593 See accompanying notes to the basic financial statements. 24 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30,2007 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. 39, 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. 25 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) The Wichita Falls 48 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.E Section 4B. Since the City appoints a oints 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#1. On March 18, 1986, 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 #1 (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 650 acres and includes the central business district 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, 1986, 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, 2008, 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 #1 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 #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 31, 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. 26 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) 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 Director of Finance 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 Senior Accountant 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 assets 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. 27 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) 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 accounting and financial statement presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary 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, sales tax and sales interest 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. 28 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2007 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) The City reports the following major governmental fund: 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. 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 water and sewer utility services 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. 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, and employee health and life insurance. 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. GASB Statement No. 34 eliminates the presentation of account groups but provides for these records to be maintained and incorporates the information into the Governmental Activities column in the government-wide Statement of Net Assets. Private-sector standards of accounting and financial reporting (as issued by the Financial Accounting Standards Board) issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The City has elected to follow subsequent private-sector guidance. 29 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) 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. 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. 30 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30, 2007 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) 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. E. Assets, liabilities and net assets or eauitv 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 Inventories of the general and proprietary funds consist of supplies and various materials used for the maintenance of fixed 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. 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 improvement 20-59 years Infrastructure 8-100 years Machinery, vehicles and other equipment 3 -25 years Furniture and equipment 3 - 10 years 31 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) For business-like 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. For the fiscal year ended September 30, 2007, the City's business-like activities incurred a total of $6,701,440 of interest costs. Of this amount, $75,107 was capitalized on construction projects and $6,626,333 was charged to expense. 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. Lona-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. 5. 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, Bureau of Justice Assistance, and numerous health-related grants. 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. 32 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) 6. Reserves and Designations Portions of fund equity are segregated for future use, and are therefore not available for future appropriation or expenditure. Amounts reserved for revenue bond debt service and retirement represent portions of fund equity which are required to be segregated in accordance with the City's bond ordinances. Amounts reserved for inventory and prepaid items have already been expended and represent a portion of the fund balance that is not available for future expenditures. Amounts reserved for encumbrances are commitments for materials and services on purchase orders and contracts which are unperformed. Designations of unreserved fund balances in governmental funds indicate City management's tentative plans for use of financial resources in a future period. 7. 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. 8. 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. 9. 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. 33 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) 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 $150,000. 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. The City is also self-insured up to $250,000 for workers' compensation claims. Such claims are processed by the City's risk management department. The City's estimated liability for workers' compensation claims payable at September 30, 2007 is based on management's estimate of probable losses in the amount of $381,101. 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. $223,069 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, 2005 to September 30, 2007: Health Workers' Care Compensation Liability balance, October 1, 2005 $ 806,286 $ 421,088 Incurred claims/adjustments 5,693,158 1,122,990 Claim payments ( 6.168.379) ( 1.156,312) Liability balance, September 30, 2006 331,065 387,766 Incurred claims/adjustments 5,870,151 1,171,349 Claim payments ( 5.725.212) ( 1.178,014) Liability balance, September 30, 2007 $ 476.004 $ 381.101 Note 2 - COMPLIANCE AND ACCOUNTABILITY Finance-Related Legal and Contractual Provisions In accordance with GASB Statement No. 38, "Certain Financial Statement Note Disclosures", violations of finance-related legal and contractual provisions are reported below, along with actions taken to address such violations. Violation Action Taken None 34 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 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, 2007, the total amount of the City's demand and time deposits per the general ledgers was $284,021, and the total amount per the City's September 30, 2007 bank statements was $1,362,637. 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. Investments The investment policies of the City and its discretely presented component units are governed by State statutes. 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, 2007 are as follows: Fair Value/ Average Weighted Average Carrying Credit Quality/ Months to Types of Investments Amount Cost Ratings Maturity Primary Government: TexPool $131,181,134 $131,181,134 N/A 1.00 LOGIC 1,423,639 1,423,639 N/A 1.00 Money market account 10,763,859 10,763,859 N/A 1.00 Federal agency notes 5,689,236 5,680,065 AAA/Aaa 6.20 Total primary government investments 149,057,868 149,048,697 Component Units: TexPool 26.262,823 26,262,823 N/A 1.00 Total component unit investments 26,262.823 26.262.823 Total investments $175.320,691 $175.311,520 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 71st 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. The fair value of the City's position in TexPool is the same as the value of the pool shares. 35 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 3 - DEPOSITS AND INVESTMENTS (CONT'D.) 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. 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. 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 significantly 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. At year end, the City was not exposed to interest rate risk since the City holds all direct investments to maturity. 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. 36 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 4- RECEIVABLES Receivables at September 30, 2007 consist of the following: Nonmajor Nonmajor Totals Totals Governmental Water and Enterprise Internal Primary Component Reporting General Funds Sewer Sanitation Funds Service Government Units Entity Receivables: Taxes and assessments $1,532,027 $ 316,972 $ - $ - $ - $ - $ 1,848,999 $ 27,812 $ 1,876,811 Customer and trade - - 4,456,509 1,174,640 156,461 - 5,787,610 - 5,787,610 Other City funds 1,846,817 - - - - - 1,846,817 - 1,846,817 Component unit - 1,516,694 - - - 1,516,694 - 1,516,694 Government agencies 3,372,753 4,301,394 51,419 - 112,761 - 7,838,327 1,162,484 9,000,811 v Other 1,844,475 95,769 116,226 - 53,309 47,972 2,157,751 - 2,157,751 Restricted—other - - 37,032 - - - 37.032 - 37.032 Gross receivables 8,596,072 6,230,829 4,661,186 1,174,640 322,531 47,972 21,033,230 1,190,296 22,223,526 1 Less: Allowance for uncollectible accounts ( 647,136) ( 85.010) ( 771.986) ( 256.057) ( 34,609) - ( 1,794,798) - ( 1,794,798) Net total receivables $7 948 936 $6 145.819 $3,889 200 $ 918 583 $287 922 $47,972 $19238 432 $1.190 296 $20 4211728 There are no receivables, other than delinquent property taxes, that the City does not expect to collect within a year. The City expects to collect approximately$300,000 of the $1,727,109 total delinquent property taxes. This amount is similar to the amounts collected in previous years. CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 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, 2007 was $.59246 per $100 which means that the City has a tax margin of $1.65754 per $100, and could raise up to $65,515,746 additional tax revenue a year from the present assessed valuation of$3,952,589,119 before the limit is reached. Note 6 - RESTRICTED ASSETS- WATER AND SEWER FUND Restricted assets in the Water and Sewer Fund, held for specific purposes in accordance with bond ordinances or other legal restrictions, are comprised of the following: For Debt Service: Cash and cash equivalents $12,681,053 For Capital Improvements: Cash and cash equivalents 56,721,788 Investments 5,689,236 Receivables 37,032 For Customer Deposits: Cash and cash equivalents 2.530,673 Total $77.659.782 Note 7 - CAPITAL ASSETS Capital asset activity for the year ended September 30, 2007 was as follows: 38 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2007 Note 7 - CAPITAL ASSETS (CONT'D.) Balance Balance Governmental activities: October 1, September 30, 2006 Increases Decreases 2007 Capital assets not being depreciated: Land $ 12,677,759 $ 80,614 $3,939,844 $ 8,818,529 Construction in progress 3.807,264 3.996,040 4,077,272 3,726,032 Total capital assets not being depreciated 16,485,023 4.076,654 8.017.116 12,544.561 Capital assets being depreciated: Land betterments 10,842,772 4,996,284 - 15,839,056 Buildings, systems and improvements 59,230,407 19,231 - 59,249,638 Infrastructure 140,752,981 3,059,468 1,406,622 142,405,827 Machinery and equipment 16,851,594 2,981,753 79,777 19,753,570 Furniture and fixtures 224,864 - - 224,864 Motor vehicles 31,485 - - 31,485 Total capital assets being depreciated 227,934,103 11,056.736 1,486,399 237.504,440 Less accumulated depreciation for: Land betterments 2,438,203 140,495 - 2,578,698 Buildings, systems and improvements 11,227,697 1,213,672 - 12,441,369 Infrastructure 75,579,202 2,727,529 1,302,683 77,004,048 Machinery and equipment 8,287,110 873,199 74,607 9,085,702 Furniture and fixtures 201,392 8,800 - 210,192 Motor vehicles 31,485 - - 31,485 Total accumulated depreciation 97.765.089 4.963,695 1.377.290 101,351,494 Total capital assets being depreciated, net 130.169,014 6.093.041 109,109 136,152,946 Governmental activities capital assets, net $146.654.037 $10.169.695 $8.126.225 $148.697.507 39 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 7 - CAPITAL ASSETS (CONT'D.) Balance Balance Business-type activities: October 1, September 30, 2006 Increases Decreases 2007 Capital assets not being depreciated: Land $ 8,149,918 $ 52,000 $ - $ 8,201,918 Construction in progress 59.992.818 5,061.405 27,054,111 38,000.112 Total capital assets not being depreciated 68.142.736 5,113.405 27,054.111 46.202.030 Capital assets being depreciated: Land betterments 26,193,141 118,710 - 26,311,851 Buildings, systems and improvements 170,378,373 30,367,725 371,000 200,375,098 Machinery and equipment 5,978,942 689,674 6,034 6,662,582 Furniture and fixtures 45,379 - - 45,379 Motor vehicles 38.223.962 3.992.548 1.719,640 40.496.870 Total capital assets being depreciated 240.819.797 35,168,657 2,096,674 273,891,780 Less accumulated depreciation for: Land betterments 10,412,057 436,148 - 10,848,205 Buildings, systems and improvements 67,498,058 3,454,940 371,000 70,581,998 Machinery and equipment 3,889,476 284,215 6,037 4,167,654 Furniture and fixtures 29,779 3,472 - 33,251 Motor vehicles 26.125.530 3.076.059 1,702.556 27,499.033 Total accumulated depreciation 107.954.900 7.254,834 2,079,593 113.130.141 Total capital assets being depreciated, net 132,864.897 27.913.823 17.081 160,761.639 Business-type activities capital assets, net $201.007.633 $33.027 228 $27 071.192 $206 963.669 Depreciation expense was charged to functions as follows: Governmental activities: Administrative services $ 314,450 Police 642,974 Fire 123,537 Parks and recreation 73,016 Accounting/finance 104,009 Community development 22,530 Public works 2,515,696 Health 103,454 Traffic and transportation 256,345 Multi-Purpose Events Center 807.684 Total governmental depreciation $4.963.695 40 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30, 2007 Note 7 - CAPITAL ASSETS (CONT'D.) Business-type activities: Municipal Airport $ 49,252 Kickapoo Airport 220,192 Transit 273,941 Sanitation 2,299,717 Water and sewer 4,369,800 Stormwater drainage 41,932 Total business-type depreciation $7.254,834 Note 8 - RETIREMENT PLANS Texas Municipal Retirement System Plan Description The City provides pension benefits for substantially all of its full-time employees, except firefighters, through a nontraditional, joint contributory, defined benefit plan in the state-wide Texas Municipal Retirement System (TMRS), one of 821 administered by TMRS, an agent multiple-employer public employee retirement system. Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the City-financed monetary credits, with interest. At the date the plan began, the City granted monetary credits for service rendered before the plan began of a theoretical amount equal to two times what would have been contributed by the employee, with interest, prior to establishment of the plan. Monetary credits for service since the plan began are a percent (200)/0) of the employee's accumulated contributions. In addition, the City can grant, as often as annually, another type of monetary credit referred to as an updated service credit which is a theoretical amount which, when added to the employee's accumulated contributions and the monetary credits for service since the plan began, would be the total monetary credits and employee contributions accumulated with interest if the current employee contribution rate and City matching percent had always been in existence and if the employee's salary had always been the average of his salary in the last three years that are one year before the effective date. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions with interest were used to purchase an annuity. Members can retire at ages 60 and above with 10 or more years of service or with 25 years of service regardless of age. A member is vested after 10 years. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS and within the actuarial constraints also in the statutes. 41 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 8 - RETIREMENT PLANS(CONT'D.) Contributions The contribution rate for all employees is 5%, except police officers which is 7%, and the City matching ratio is currently 2 to 1, both as adopted by the governing body of the City. Under the state law governing TMRS, the actuary annually determines the City contribution rate. This rate consists of the normal cost contribution rate and the prior service contribution rate, both of which are calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the currently accruing monetary credits due to the City matching percent, which are the obligation of the City as of an employee's retirement date, not at the time the employee's contributions are made. The normal cost contribution rate is the actuarially determined percent of payroll necessary to satisfy the obligation of the City to each employee at the time his/her retirement becomes effective. The prior service contribution rate amortizes the unfunded (overfunded) actuarial liability (asset) over the remainder of the plan's 25-year amortization period. When the City periodically adopts updated service credits and increases in annuities in effect, the increased unfunded actuarial liability is to be amortized over a new 25-year period. The unit credit actuarial cost method is used for determining the City contribution rate. Both the employees and the City make contributions monthly. Since the City needs to know its contribution rate in advance to budget for it, there is a one-year delay between the actuarial valuation that is the basis for the rate and the calendar year when the rate goes into effect (i.e. December 31, 2006 valuation is effective for rates beginning January 2008). 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 2.28% (2.10% prior to August 5, 1998) of the firefighter's highest three year average salary calculated over the seventy-eight consecutive pay periods during the firefighter's period of service covered by the Plan, which produces the highest average, multiplied by 2.167. 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. 42 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30, 2007 Note 8 - RETIREMENT PLANS (CONT'D.) Contributions The contribution rate for the firefighters is 11% (increased from 9% effective August 5, 1998) and the City contributes 10.46% (increased from 9% effective September 26, 2001). 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 entry age actuarial cost method, the plan's normal cost is determined as a percentage of payroll. The actuarial assumptions included (a) 8% investment rate of return (net of administrative expenses, (b) projected salary increases due to inflation of 4.75% per year, compounded annually, and (c) projected salary increases due to seniority/merit raises of 4.75% per year, compounded annually. The actuarial value of assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a ten-year period. The unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on a closed basis. The remaining amortization period at December 31, 2006 was 34.6 years. Schedule of Actuarial Liabilities and Funding Progress Texas Municipal Firemen's Retirement Relief and System Retirement Total Actuarial Valuation Date 12/31/06 12/31/06 Actuarial Value of Assets $ 69,201,457 $35,584,639 $104,786,096 Actuarial Accrued Liability (AAL) 100,991,795 47,582,190 148,573,985 Percentage Funded 68.5% 74.8% 70.5% Unfunded Actuarial Accrued Liability (UAAL) 31,790,338 11,997,551 43,787,889 Annual Covered Payroll 33,791,762 7,697,370 41,489,132 UAAL as a Percentage of Covered Payroll 94.1% 155.9% 105.5% Net Pension Obligation (NPO) at the Beginning of the Period -0- -0- -0- Annual Pension Cost: Annual Required Contribution (ARC) $ 4,268,611 $ 836,038 $ 5,104,649 Interest on NPO -0- -0- -0- Adjustment to the ARC -0- -0- -0- Annual Pension Cost $ 4.268.611 $ 836.038 $ 5.104.649 43 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 8 - RETIREMENT PLANS (CONT'D.) Texas Municipal Firemen's Retirement Relief and System Retirement Total Percentage of Annual Pension Costs Contributed 100% 100% 100% Contributions Made $ 4,268,611 $ 836,038 $ 5,104,649 Increase in NPO -0- -0- -0- NPO At the End of the Period $ -0- $ -0- $ -0- Two preceding years: 2005: Annual Pension Cost $ 4,012,343 $ 783,396 $ 4,795,739 Percentage of Annual Pension Costs Costs Contributed 100% 100% 100% NPO At the End of the Period -0- -0- -0- 2004: Annual Pension Cost $ 3,845,167 $ 743,445 $ 4,588,612 Percentage of Annual Pension Costs 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 Unit Credit Entry Age Amortization Method Level Percent of Payroll Level Percent of Payroll Remaining Amortization Period 25 years 34.6 years Amortization Period Open Closed Asset Valuation Method Amortized Cost Smooth Market Value Investment Rate of Return 8% 8% Projected Salary Increases None 4.75% Includes Inflation at None 4.75% Cost-of-Living Adjustments None None Both of the stand-alone financial reports for the Texas Municipal Retirement System and Firemen's Relief and Retirement Fund can be obtained from the City's Director of Finance at 1300 7th Street, Wichita Falls, Texas. 44 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 9 - 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 10 - AIRPORT LEASE The Municipal Airport facilities are located on land at Sheppard Air Force Base. The land is leased from the Department of the Air Force at a cost of$1.00 per year for a period of fifty years, beginning May 15, 1959 and expiring May 14, 2009. Additional rent is based on landing fees at a rate of $1.8264 per scheduled landing. Landing fees collected and paid on this lease were $4,224 for the fiscal year ended September 30, 2007. Note 11 - 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, 2007. 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, 2007: Year ending September 30: 2008 $ 85,333 2009 56,002 2010 30,598 2011 10,262 Total minimum payments required $182.195 The total minimum payments do not include contingent rentals which may be paid under the airport lease based on the number of scheduled landings. The following schedule shows the composition of total rental expenses for all operating leases for the year ended September 30, 2007: Minimum rentals $142,576 Contingent rentals 4,224 Total rentals $146.800 45 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2007 Note 12 - LONG-TERM LIABILITIES Long-term liabilities transactions for the year ended September 30, 2007 are summarized as follows: Balance at Balance at October 1, Retired and September 30, Due Within 2006 Issued Transferred(1) 2007 One Year Governmental Activities: General obligation bonds $ 8,270,000 $ - $ 880,000 $ 7,390,000 $ 910,000 Combination tax and revenue bonds 5,360,000 21,702,048 1,666,032 25,396,016 1,528,788 Note payable 120,443 - 59,350 61,093 61,093 Accrued vacation and sick leave payable 6,191,086 1,742,845 1,509,452 6,424,479 1,700,000 Claims and judgments payable 387.766 1,171,349 1.178.014 381,101 223.069 Total governmental activities 20.329.295 24.616.242 4,537,848 39,652,689 4.422.950 Business-tvoe Activities: Utility system revenue bonds, net of premium(discount) 124,824,242 103,932,938 104,887,852 123,869,328 1,981,716 Combination tax and revenue bonds 30,961,933 - 3,097,089 27,864,844 3,385,612 Accrued vacation and sick leave payable 460,097 487,341 539,635 407,803 400,000 Note payable 728,039 - 28,291 699,748 29,211 Landfill closure,post-closure costs 2,660,749 230,616 - 2.891.365 - Total business-type activities 159.635.060 104.650.895 108.552.867 155,733.088 5.796.539 Total long-term liabilities $179.964.075 $129.267.137 $113 090 715 $195 385 777 $10 219 489 (1) Includes bond premium amortization of $43,788 related to the combination tax and revenue bonds (governmental activities), $97,852 related to revenue bonds, and $297,089 related to the combination tax and revenue bonds (business-type activities). The portion of long-term liabilities due within one year as reflected on Exhibit A-1 includes $120,822 and $1,118,510 of accrued interest in governmental activities and business-type activities, respectively. For governmental activities, claims and judgments payable and compensated absences are generally liquidated by the General Fund. Bonds Payable Bonds payable at September 30, 2007, 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 9/30/07 General Obligation Bonds: General Obligation Construction 3.75%- 9/01/21 $175,000 to $10,205,000 $ 7,390,000 and Refunding Bonds, Series 2001 5.375% $945,000 Total General Obligation Bonds 7.390.000 46 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2007 Note 12 - LONG-TERM LIABILITIES(CONT'D.) Range of Final Annual Bonds Interest Maturity Serial Bonds Outstanding Rates Date Payments Authorized at 9/30/07 Combination Tax and Revenue Bonds: Combination Tax and Revenue 3.00%- 9/01/18 $335,000 to 7,550,000 4,605,000 Certificates of Obligation, 4.00% $775,000 Series 2003 Combination Tax and Revenue 2.00%- 8/01/12 $685,000 to 18,840,000 16,865,000 Refunding Bonds,Series 2004 5.00% $3,645,000 Plus bond premium 541,465 Combination Tax and Revenue 4.90%- 8/01/16 $115,000 to 14,020,000 9,700,000 Refunding Bonds,Series 2005 5.00% $2,650,000 Plus bond premium 758,379 Combination Tax and Revenue 3.55%- 9/01/26 $580,000 to 16,875,000 16,170,000 Certificates of Obligation, 5.00% $1,225,000 Series 2006A Plus bond premium 419,370 Combination Tax and Revenue 5.20%- 9/01/26 $130,000 to 4,275,000 4,105,000 Certificates of Obligation, 6.25% $345,000 Series 2006B Plus bond premium 96.646 Total Combination Tax and Revenue Bonds 53.260.860 Revenue Bonds: Water and Sewer Revenue Bonds: Water&Sewer System Priority 4.05%- 8/01/18 $180,000 to 5,500,000 3,565,000 Lien Revenue Bonds,Series 1998B 4.65% $400,000 Water&Sewer System Priority 3.75%- 8/01/27 $1,220,000 to 118,770,000 7,420,000 Lien Revenue Bonds,Series 2001 5.375% $11,515,000 Plus bond premium 1,131,158 Water&Sewer Subordinate Lien 3.14%- 8/01/18 $25,000 to 8,060,000 7,835,000 Revenue Bonds,Series 1998 4.59% $3,320,000 Water&Sewer System Priority 4.00%- 8/01/27 $225,000 to 103,495,000 103,495,000 Lien Refunding Revenue Bonds, 4.50% $11,070,000 Series 2007 Plus bond premium 423.170 Total Revenue Bonds 123.869.328 Total All Bonds 1184.520.188 47 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30, 2007 Note 12 - LONG-TERM LIABILITIES (CONT'D.) 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. These bonds are serviced by the Debt Service Fund with an apportionment of the ad valorem tax levy. At September 30, 2007, $554,179 was available in this fund to service these bonds. 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 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. 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, 2007 is classified as follows: Long-term $670,537 Current portion 29.211 Total $699.748 The City issued a note payable in December 2002 for the acquisition of an ice plant at the Multi- Purpose Events Center Coliseum. The note is due in five annual installments of $62,780 beginning in December 2003. The note carries an interest rate of 2.81%. 48 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 12 - LONG-TERM LIABILITIES (CONT'D.) Aggregate maturities of the long-term debt(principal and interest) for the years subsequent to September 30, 2007 are as follows: Combination Tax and Year Ending General Obliaation Bonds Revenue Bonds Revenue Bonds Notes Payable Total September 30, Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 2008 $ 910,000 $ 350,169 $ 4,914,400 $ 2,295,590 $ 1,981,716 $ 5,412,727 $ 90,305 $ 24,295 $ 7,896,421 $ 8,082,781 2009 945,000 312,631 4,636,966 2,135,675 2,045,871 5,337,669 30,161 21,813 7,657,998 7,807,788 2010 745,000 273,650 4,776,768 1,931,555 2,144,997 5,259,841 31,142 20,831 7,697,907 7,485,877 2011 340,000 241,988 4,921,926 1,769,450 2,223,966 5,170,244 32,155 19,818 7,518,047 7,201,500 2012 355,000 227,112 5,081,768 1,583,095 2,312,897 5,076,814 33,201 18,772 7,782,866 6,905,793 2013-2017 2,035,000 866,763 16,711,259 5,062,243 24,718,962 23,122,357 182,927 76,941 43,648,148 29,128,304 cc. 2018-2022 2,060,000 274,544 6,356,325 2,420,897 42,988,175 16,078,538 214,680 45,188 51,619,180 18,819,167 2023-2027 - - 5.861.448 787,188 45.452.744 5.630,400 146,270 9,617 51.460.462 6.427,205 Totals $7.390,000 $2.546,857 $53.260 860 $17,985,693 $123,869,328 $71.088.590 $760,841 $237,275 $185.281.029 $91,858,415 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2007 Note 13 - DEFEASED DEBT Current Year On February 1, 2007, the City issued water and sewer system priority lien refunding revenue bonds of$103,495,000 (par value) with interest rates ranging from 4.00% to 4.50%. The debt was issued to refund revenue bonds with interest rates ranging from 3.75% to 5.375% and a par value of $103,085,000. The revenue bonds to be refunded mature through August 1, 2027, and are callable on August 1, 2011. The refunding met the requirements of an in-substance debt defeasance and the original revenue bonds were removed from the Water and Sewer Fund. As a result of the refunding, the City reduced its total debt service requirements by $8,253,517 resulting in an economic gain (difference between the present value of the debt service payments on the old and new debt) of$4,237,507. Note 14 - 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 $2,891,365 as of September 30, 2007, which is based on 15% usage of the landfill. The City will recognize the remaining estimated cost of closure and postclosure care of $16,315,390 as the remaining estimated capacity is filled. The landfill is expected to be filled to capacity in 2153. Actual costs may be higher due to inflation, change in technology, or changes in regulations. Note 15 - INTERFUND BALANCES Balances due to and due from other funds at September 30, 2007 consisted of the following: Due To Fund Due From Fund Amount Purpose General Fund Nonmajor Governmental Funds $1,788,473 Short-term loan General Fund Water and Sewer Fund 58.344 Short-term loan Total $1 846.817 All amounts due are scheduled to be repaid within one year. Balances due to and due from component units at September 30, 2007 consisted of the following: Due To Fund Due From Fund Amount Purpose Nonmajor Governmental Funds Wichita Falls 4B Sales Tax Corp. $1 516.694 Construction funding 50 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2007 Note 15 - INTERFUND BALANCES (CONT'D.) All amounts due are scheduled to be repaid within one year. Transfers to and from other funds during the year ended September 30, 2007 were as follows: Transfers From Transfers To Amount Reason General Fund Nonmajor Governmental Funds $ 198,132 Fund operating deficits General Fund Nonmajor Enterprise Funds 109,186 Supplement operating grants General Fund Nonmajor Governmental Funds 117,657 Supplement operating grants General Fund Internal Service Fund 508,214 Purchase capital assets Nonmajor Governmental Funds Nonmajor Governmental Funds 473,829 Fund debt service payment Nonmajor Governmental Funds Nonmajor Governmental Funds 1,619,060 Fund operating deficit Nonmajor Governmental Funds Nonmajor Enterprise Funds 2,368,927 Purchase capital assets Nonmajor Governmental Funds Internal Service Funds 6,560 Purchase capital assets Water and Sewer Fund General Fund 679,686 Administrative overhead Water and Sewer Fund Nonmajor Governmental Funds 500,000 Fund debt service payment Sanitation Fund General Fund 1,111,698 Administrative overhead Sanitation Fund Internal Service Funds 1,465,057 Purchase capital assets Nonmajor Enterprise Funds Nonmajor Governmental Funds 145,424 Supplement operating grant Nonmajor Enterprise Funds Nonmajor Governmental Funds 449,604 Fund debt service payment Nonmajor Enterprise Funds Internal Service Funds 15,211 Purchase capital assets Internal Service Funds General Fund 627,000 Administrative overhead Total $10.395.245 Note 16 - COMMITMENTS AND CONTINGENCIES Litigation The City is a defendant in numerous lawsuits. In the opinion of the City's management, any 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 $6,423,448 at September 30, 2007. This accrual is recorded as a long-term liability in the Government-wide Statement of Net Assets. Post-Retirement Health Care and Life Insurance Benefits In addition to providing pension benefits, the City provides certain health care and life insurance benefits for retired employees. Substantially all of the City's employees may become eligible for those benefits if they reach normal retirement age while working for the City. The cost of retiree health care is paid for by the retirees. The cost of life insurance benefits for 10 retirees is partially funded by the City. The City's portion of these costs is recognized as expense when paid. For the fiscal year ended September 30, 2007, these costs were not material to the financial statements. 51 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30, 2007 Note 16 - COMMITMENTS AND CONTINGENCIES (CONT'D.) 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, 2007 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. Construction Contracts At September 30, 2007, the City was committed to several construction contracts. The amounts for which the various funds are committed to complete these contracts are as follows: General Fund $ 2,601,995 Nonmajor Governmental Funds 2,398,787 Water and Sewer Fund 5,769,184 Sanitation Fund 1,056,176 Nonmajor Enterprise Funds 60,000 Total contract commitments $11.886.142 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, Bureau of Justice Assistance, 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. 52 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONTD.) SEPTEMBER 30,2007 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, 2007 is as follows: Wichita Falls Wichita Falls Economic 4B Sales Wichita Falls Wichita Falls Development Tax Reinvestment Reinvestment Corporation Corporation Zone#1 Zone#2 Totals Condensed statement of net assets: Cash,investments and other current assets $19,106,738 $7,657,811 $281,526 $ - $27,046,075 Capital assets,net of accumulated depreciation 2.415.067 - - - 2,415,067 Total assets 21.521.805 7.657,811 281.526 - 29.461.142 Accounts payable and other current liabilities 271 28,624 - - 28,895 Amount due to primary government - 1.516.694 - - 1,516,694 Total liabilities 271 1,545,318 - - 1.545.589 Net assets $21.521.534 $6.112.493 $281,526 $ - $27.915.553 Condensed statement of activities: Expenses: Community development $ 2.199.438 $3.172.483 $229,000 $98,358 $ 5.699.279 Program revenues: Charges for services 106,800 - - - 106,800 Operating grants and contributions - 208.143 - - 208.143 Total program revenues 106.800 208.143 - - 314.943 Net program expense ( 2.092,638) ( 2.964.340) ( 229,000) ( 98,358) ( 5.384.336) General revenues: Tax revenues 3,344,755 3,344,755 149,074 97,326 6,935,910 Non-tax general revenues 910.876 402.321 17.453 1 032 1.331,682 Total general revenues and transfers 4.255.631 3,747.076 166.527 98.358 8.267.592 Change in net assets 2,162,993 782,736 ( 62,473) - 2,883,256 Beginning net assets 19.358.541 5,329,757 343.999 - 25.032.297 Ending net assets $21.521.534 $6.112.493 $281,526 $ - $27.915,553 53 Ly�� Required Supplemental Information Wichita TEXAS la EXHIBIT B-1 CITY OF WICHITA FALLS, TEXAS REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE -GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2007 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Taxes $ 49,059,913 $ 49,059,913 $ 49,987,681 $ 927,768 Charges for services 2,414,627 2,414,627 2,623,083 208,456 Licenses and permits 2,270,736 2,270,736 2,215,811 (54,925) Fines and forfeitures 2,233,000 2,233,000 1,908,596 (324,404) Intergovernmental revenue 80,500 80,500 49,004 (31,496) Contributions - - 1,443,274 1,443,274 Miscellaneous revenue 1,204,493 1,204,493 2,085,301 880,808 Total revenues 57,263,269 57,263,269 60,312,750 3,049,481 Expenditures: Current: Administrative services 10,360,246 10,054,985 8,731,238 1,323,747 Police 17,892,651 18,185,031 17,448,846 736,185 Fire 11,015,800 11,222,304 11,220,603 1,701 Parks and recreation 4,141,160 4,353,643 4,005,655 347,988 Accounting/finance 1,902,177 1,950,954 1,811,690 139,264 Community development 1,722,330 1,775,169 1,625,846 149,323 Public works 4,785,021 5,037,473 4,990,429 47,044 Health 2,806,480 2,891,447 2,775,968 115,479 Traffic and transportation 2,242,331 2,297,418 2,132,162 165,256 Capital outlay 2,075,260 3,971,802 2,220,817 1,750,985 Total expenditures 58,943,456 61,740,226 56,963,254 4,776,972 Excess of revenues over(under)expenditures (1,680,187) (4,476,957) 3,349,496 7,826,453 Other financing sources(uses): Transfers in 2,418,384 2,559,625 2,418,384 (141,241) Transfers out (423,197) (474,793) (933,189) (458,396) Total other financing sources(uses) 1,995,187 2,084,832 1,485,195 (599,637) Excess of revenues and other sources over(under)expenditures and other uses 315,000 (2,392,125) 4,834,691 7,226,816 Fund balance-beginning 13,896,926 13,896,926 13,896,926 - Fund balance-ending $ 14,211,926 $ 11,504,801 $ 18,731,617 $ 7,226,816 54 CITY OF WICHITA FALLS, TEXAS NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2007 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 $2,796,770 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. 55 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) 12/31/97 $ 51,833,203 $ 67,746,553 76.5% $ 15,913,350 $ 24,726,606 64.4% 12/31/98 53,779,205 70,332,145 76.5% 16,552,940 25,833,511 64.1% 12/31/99 58,074,582 76,394,376 76.0% 18,319,794 26,932,278 68.0% 12/31/00 62,462,023 82,680,887 75.5% 20,218,864 27,754,660 72.8% 12/31/01 66,919,614 88,721,318 75.4% 21,801,704 29,061,189 75.0% 12/31/02 69,770,838 93,176,395 74.9% 23,405,557 31,065,101 75.3% 12/31/03 72,469,506 98,017,025 73.9% 25,547,519 31,516,130 81.1% 12/31/04 70,462,244 98,405,860 71.6% 27,943,616 33,522,283 83.4% 12/31/05 71,393,893 101,093,789 70.6% 29,699,896 32,846,479 90.4% 12/31/06 69,201,457 100,991,795 68.5% 31,790,338 33,791,762 94.1% 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. 56 EXHIBIT B-3 CITY OF WICHITA FALLS, TEXAS WICHITA FALLS FIREMEN'S RELIEF AND RETIREMENT FUND - ANALYSIS OF FUNDING PROGRESS (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) 12/31/97 $ 19,916,831 $ 25,193,592 79.1% $ 5,276,761 $ 4,712,854 112.0% 12/31/98(a) - - - - - - 12/31/99(a) - - - - - - 12/31/00 26,930,018 31,419,892 85.7% 4,489,874 5,858,962 76.6% 12/31/01 (a) - - - - - - 12/31/02(b) 27,439,565 37,003,896 74.2% 9,564,331 6,609,807 144.7% 12/31/03(a) - - - - - - 12/31/04(b) 32,240,524 42,178,490 76.4% 9,937,966 7,175,196 138.5% 12/31/05(a) - - - - - - 12/31/06(b) 35,584,639 47,582,190 74.8% 11,997,551 7,697,370 155.9% 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. (b) For the 2002,2004 and 2006 valuations, retirement was assumed to occur once a member both attained age 57 and completed 20 years of service. In prior years, retirement was assumed to occur at age 55 and 20 years of service. There were no changes made in actuarial methods. 57 Combining Financial Statements Wichita Is TEXAS\'aU 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 legally restricted to be expended for specified 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 Aareement 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. Airport Improvement Grant Fund The Airport Improvement Fund accounts for federal funds received to make capital improvements to the Kickapoo Downtown Airport. 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 Special 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. 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 bonds 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. 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. 2006-A Bond Fund This fund was established to account for projects financed by the Combination Tax and Revenue Certificates of Obligation, Series 2006A. These funds will be used for street and drainage improvements, a police firing range, the construction of a new fire station, four softball fields, and a skate park. Miscellaneous Capital Proiects 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. The interest earnings of this fund may be used for maintenance of the City's cemeteries. CITY OF WICHITA FALLS, TEXAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2007 Special Revenue Home Community Investment Hotel/ Airport Development Section 8 Partnership Motel Improvement Golf Block Grant Housing Agreement Tax Grant Fund ASSETS Cash and cash equivalents $ 50 $ 3,889,986 $ - $ - $ 195,661 $ 43,838 Receivables: Taxes and assessments - - - 121,890 - - Component Unit - - - - - - Government agencies 1,334,544 - 895,004 - 481,166 - Other - 10,224 - - - - Inventory - - - - - 27,606 Prepaid items 271 - - - - - Other assets - - - - - Total assets $ 1,334,865 $ 3,900,210 $ 895,004 $ 121,890 $ 676,827 $ 71,444 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable-trade $ 31,844 $ 1,233 $ - $ 3,131 $ 211,915 $ 25,453 Accrued payroll 5,461 9,742 2,438 - - - Payable to other City funds 506,351 - 87,205 88,029 - - Payable to government agencies - 98,931 - - 18,053 - Notes payable - - - - - Other liabilities - - 44,744 - 82,024 10,565 Deferred revenue - - - - - - Total liabilities 543,656 109,906 134,387 91,160 311,992 36,018 Fund balance: Reserved for encumbrances 25,573 - - - - - Reserved for prepaid items 271 - - - - - Reserved for debt service - - - - - - Reserved for perpetual care - - - - - - Unreserved: Designated for subsequent years expenditures 765,365 3,790,304 760,617 - 364,835 35,426 Undesignated - - - 30,730 - - Total fund balance 791,209 3,790,304 760,617 30,730 364,835 35,426 Total liabilities and fund balance $ 1,334,865 $ 3,900,210 $ 895,004 $ 121,890 $ 676,827 $ 71,444 58 EXHIBIT C-1 Permanent Debt Service Capital Projects Fund Total Miscellaneous Miscellaneous Nonmajor MPEC Special Debt Excess 4B Sales 2006-A Capital Perpetual Governmental Fund Revenue Service Sales Tax Tax Projects Bond Fund Projects Care Funds $ 538,650 $ 1,137,932 $ 548,008 $ 462,391 $ - $ 16,177,928 $ 6,674,903 $ 848,888 $ 30,518,235 - - 110,072 - - - - - 231,962 - - - - 1,516,694 - - - 1,516,694 - 1,122,144 14,430 454,106 - - - - 4,301,394 84,745 800 - - - - - - 95,769 52,689 - - - - - - - 80,295 22,140 - - - - - - - 22,411 43,503 3,000 - - - - - - 46,503 $ 741,727 $ 2,263,876 $ 672,510 $ 916,497 $ 1,516,694 $ 16,177,928 $ 6,674,903 $ 848,888 $ 36,813,263 $ 121,100 $ 79,784 $ - $ - $ 8,986 $ 228,816 $ 13,864 $ - $ 726,126 54,811 69,787 - - - - - - 142,239 - 771,261 - - - - 335,628 - 1,788,474 5,069 2,958 - - - - - - 125,011 - - - - - - 61,093 - 61,093 224,258 270,926 - - - 51,078 211,550 - 895,145 - 37,236 118,331 - - - - - 155,567 405,238 1,231,952 118,331 - 8,986 279,894 622,135 - 3,893,655 - 3,966 - - - - - - 29,539 22,140 - - - - - - - 22,411 - - 554,179 916,497 - - - - 1,470,676 - - - - - - - 848,888 848,888 314,349 1,027,958 - - 1,507,708 15,898,034 6,052,768 - 30,517,364 - - - - - - - - 30,730 336,489 1,031,924 554,179 916,497 1,507,708 15,898,034 6,052,768 848,888 32,919,608 $ 741,727 $ 2,263,876 $ 672,510 $ 916,497 $ 1,516,694 $ 16,177,928 $ 6,674,903 $ 848,888 $ 36,813,263 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES-NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2007 Special Revenue Home Community Investment Hotel/ Airport Development Section 8 Partnership Motel Improvement Golf Block Grant Housing Agreement Tax Grant Fund Revenues: Taxes $ - $ - $ - $ 1,388,636 $ - $ - Charges for services 12,194 - - - - 144,037 Fines and forfeitures - - - - - - Intergovernmental revenue 1,433,139 4,762,898 494,794 - 1,914,588 - Contributions - - - - - - Miscellaneous revenue 47,801 151,507 62,158 873 - 107,935 Total revenues 1,493,134 4,914,405 556,952 1,389,509 1,914,588 251,972 Expenditures: Current Administrative services 125,000 - - 95,700 - 450,104 Police - - - - - - Fire - - - - - - Parks and recreation - - - - - - Community development 877,258 3,390,257 536,223 - - - Public works 111,078 - - - - - Health - - - - - - Traffic and transportation - - - - 57,071 - Multi-Purpose Events Center - - - - - - Capital outlay 17,920 - - - - - Debt service: Principal retirement - - - - - - Interest and paying agent fees - - - - - - Total expenditures 1,131,256 3,390,257 536,223 95,700 57,071 450,104 Excess of revenues over (under)expenditures 361,878 1,524,148 20,729 1,293,809 1,857,517 (198,132) Other financing sources(uses): Proceeds from general obligation bonds - - - - - - Premiums on general obligation bonds - - - - - - Transfers in - - - - 145,424 198,132 Transfers out - - - (1,405,497) (1,979,640) - Total other financing sources(uses) - - - (1,405,497) (1,834,216) 198,132 Net change in fund balance 361,878 1,524,148 20,729 (111,688) 23,301 - Fundbalance-beginning 429,331 2,266,156 739,888 142,418 341,534 35,426 Fund balance-ending $ 791,209 $ 3,790,304 $ 760,617 $ 30,730 $ 364,835 $ 35,426 59 EXHIBIT C-2 Permanent Debt Service Capital Projects Fund Total Miscellaneous Miscellaneous Nonmajor MPEC Special Debt Excess 4B Sales 2006-A Capital Perpetual Governmental Fund Revenue Service Sales Tax Tax Projects Bond Fund Projects Care Funds $ - $ - $ 806,896 $ 454,106 $ - $ - $ - $ - $ 2,649,638 239,446 183,940 - - - - - - 579,617 218,465 - - - - - - 218,465 2,482,009 - - - - - - 11,087,428 453,521 288,038 1,636,818 - 350,000 - 195,310 - 2,923,687 1,975,964 890,590 41,721 45,068 - 697,633 480,673 77,093 4,579,016 2,668,931 4,063,042 2,485,435 499,174 350,000 697,633 675,983 77,093 22,037,851 - 324,030 - - - - 239,422 - 1,234,256 - 615,803 - - 2,489 1,030 - - 619,322 - 16,233 - - - 1,586 - - 17,819 - 263,880 - - - 103,925 - - 367,805 - 222,578 - - - - - - 5,026,316 - 336,474 - - - 587,450 13,359 - 1,048,361 - 1,952,446 - - - - - - 1,952,446 166,016 - - - - - - 223,087 3,488,189 10,000 - - - - - - 3,498,189 273,836 - - 243,553 1,262,668 3,067,142 7,700 4,872,819 - - 2,510,000 - - - - - 2,510,000 - 1,265,962 - - - 5,144 - 1,271,106 3,488,189 4,181,296 3,775,962 - 246,042 1,956,659 3,325,067 7,700 22,641,526 (819,258) (118,254) (1,290,527) 499,174 103,958 (1,259,026) (2,649,084) 69,393 (603,675) - - - - - 16,875,000 4,275,000 - 21,150,000 - - - - 448,769 103,279 - 552,048 1,368,527 188,332 1,423,433 - - - 179,859 - 3,503,707 (179,859) (40,264) - (473,829) (350,000) (39,287) - - (4,468,376) 1,188,668 148,068 1,423,433 (473,829) (350,000) 17,284,482 4,558,138 - 20,737,379 369,410 29,814 132,906 25,345 (246,042) 16,025,456 1,909,054 69,393 20,133,704 (32,921) 1,002,110 421,273 891,152 1,753,750 (127,422) 4,143,714 779,495 12,785,904 $ 336,489 $ 1,031,924 $ 554,179 $ 916,497 $ 1,507,708 $ 15,898,034 $ 6,052,768 $ 848,888 $ 32,919,608 EXHIBIT C-3 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE -COMMUNITY DEVELOPMENT BLOCK GRANT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2007 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Charges for services $ - $ - $ 12,194 $ 12,194 Intergovernmental revenue 1,633,139 1,433,139 1,433,139 - Miscellaneous revenue - - 47,801 47,801 Total revenues 1,633,139 1,433,139 1,493,134 59,995 Expenditures: Administrative services 125,000 125,000 125,000 - Parks 39,000 39,000 - 39,000 Community development 1,006,015 1,307,718 877,258 430,460 Public works 150,000 111,078 111,078 - Capital outlay 313,124 313,124 17,920 295,204 Total expenditures 1,633,139 1,895,920 1,131,256 764,664 I Excess of revenues over(under) expenditures - (462,781) 361,878 824,659 Fund balance- beginning 429,331 429,331 429,331 - Fund balance-ending $ 429,331 $ (33,450) $ 791,209 $ 824,659 60 EXHIBIT C-4 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE -SECTION 8 HOUSING FUND FOR THE YEAR ENDED SEPTEMBER 30, 2007 Variance ✓Vith Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Intergovernmental revenue $ 4,677,034 $ 4,677,034 $ 4,762,898 $ 85,864 Miscellaneous revenue - - 151,507 151,507 Total revenues 4,677,034 4,677,034 4,914,405 237,371 Expenditures: Community development 4,677,034 4,676,685 3,390,257 1,286,428 Total expenditures 4,677,034 4,676,685 3,390,257 1,286,428 Excess of revenues over(under) expenditures - 349 1,524,148 1,523,799 Fund balance- beginning 2,266,156 2,266,156 2,266,156 - Fund balance-ending $ 2,266,156 $ 2,266,505 $ 3,790,304 $ 1,523,799 61 EXHIBIT C-5 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE -HOME INVESTMENT PARTNERSHIP AGREEMENT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2007 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Intergovernmental revenue $ 494,794 $ 494,794 $ 494,794 $ - Miscellaneous revenue - - 62,158 62,158 Total revenues 494,794 494,794 556,952 62,158 Expenditures: Community development ment 494,794 1,267,127 536,223 730,904 , Total expenditures 494,794 1,267,127 536,223 730,904 Excess of revenues over(under) expenditures - (772,333) 20,729 793,062 Fund balance- beginning 739,888 739,888 739,888 - Fund balance-ending $ 739,888 $ (32,445) $ 760,617 $ 793,062 62 EXHIBIT C-6 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - HOTEL/MOTEL TAX FUND FOR THE YEAR ENDED SEPTEMBER 30, 2007 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Taxes $ 1,300,000 $ 1,389,509 $ 1,388,636 $ (873) Miscellaneous revenue - - 873 873 Total revenues 1,300,000 1,389,509 1,389,509 - Expenditures: Administrative services 98,200 95,700 95,700 - Total expenditures 98,200 95,700 95,700 - Excess of revenues over(under) expenditures 1,201,800 1,293,809 1,293,809 - Other financing sources (uses): Transfers out (1,331,241) (1,405,501) (1,405,497) 4 Total other financing sources (uses) (1,331,241) (1,405,501) (1,405,497) 4 Excess of revenues and other sources over(under) expenditures and other uses (129,441) (111,692) (111,688) 4 Fund balance-beginning 142,418 142,418 142,418 - Fund balance-ending $ 12,977 $ 30,726 $ 30,730 $ 4 63 EXHIBIT C-7 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE -GOLF FUND FOR THE YEAR ENDED SEPTEMBER 30, 2007 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Charges for services $ 555,352 $ 555,352 $ 144,037 $ (411,315) Miscellaneous revenue 273,752 273,752 107,935 (165,817) Total revenues 829,104 829,104 251,972 (577,132) Expenditures: Administrative services 829,104 829,104 450,104 379,000 Total expenditures 829,104 829,104 450,104 379,000 Excess of revenues over(under) expenditures - - (198,132) (198,132) Other financing sources (uses): Transfers in - - 198,132 198,132 Total other financing sources (uses) - - 198,132 198,132 Excess of revenues and other sources over(under) expenditures and other uses - - - - Fund balance- beginning 35,426 35,426 35,426 - Fund balance-ending $ 35,426 $ 35,426 $ 35,426 $ - 64 EXHIBIT C-8 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - MPEC FUND FOR THE YEAR ENDED SEPTEMBER 30, 2007 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Charges for services $ 316,752 $ 249,741 $ 239,446 $ (10,295) Contributions - - 453,521 453,521 Miscellaneous revenue 2,064,772 1,904,284 1,975,964 71,680 Total revenues 2,381,524 2,154,025 2,668,931 514,906 Expenditures: MPEC 3,416,728 3,922,061 3,488,189 433,872 Total expenditures 3,416,728 3,922,061 3,488,189 433,872 Excess of revenues over(under) expenditures (1,035,204) (1,768,036) (819,258) 948,778 Other financing sources (uses): Transfers in 1,035,204 1,830,836 1,368,527 (462,309) Transfers out - (62,800) (179,859) (117,059) Total other financing sources (uses) 1,035,204 1,768,036 1,188,668 (579,368) Excess of revenues and other sources over(under)expenditures and other uses - - 369,410 369,410 Fund balance-beginning (32,921) (32,921) (32,921) - Fund balance-ending $ (32,921) $ (32,921) $ 336,489 $ 369,410 65 EXHIBIT C-9 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - DEBT SERVICE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2007 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Taxes $ 790,934 $ 790,934 $ 806,896 $ 15,962 Contributions - - 1,636,818 1,636,818 Miscellaneous revenue 1,204,493 - 41,721 41,721 Total revenues 1,995,427 790,934 2,485,435 1,694,501 Expenditures: Debt service-principal 3,190,000 2,510,000 2,510,000 - Debt service-interest and paying agent fees 695,697 1,347,745 1,265,962 81,783 Total expenditures 3,885,697 3,857,745 3,775,962 81,783 Excess of revenues over(under)expenditures (1,890,270) (3,066,811) (1,290,527) 1,776,284 Other financing sources (uses): Transfers in 2,012,044 3,060,251 1,423,433 (1,636,818) Total other financing sources(uses) 2,012,044 3,060,251 1,423,433 (1,636,818) Excess of revenues and other sources over(under) expenditures and other uses 121,774 (6,560) 132,906 139,466 Fund balance-beginning 421,273 421,273 421,273 - Fund balance-ending $ 543,047 $ 414,713 $ 554,179 $ 139,466 66 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. Municipal Airport Fund The Municipal Airport Fund was established to account for the operating revenues and expenses of the Wichita Falls Municipal Airport. The airport is operated on land leased from the Department of Defense. Commercial and private aviation share airport facilities and runways owned by Sheppard Air Force Base. 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 Fund 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 Drainage 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. CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF NET ASSETS NONMAJOR ENTERPRISE FUNDS SEPTEMBER 30, 2007 Municipal Kickapoo Airport Airport ASSETS Current assets: Cash and cash equivalents $ 613,411 $ 147,033 Receivables (net of allowance for uncollectible accounts): Customer and trade - - Government agencies - - Other 25,796 27,513 Inventory - 35,986 Prepaid items 5,697 1,659 Total current assets 644,904 212,191 Capital assets, net of accumulated depreciation 644,082 8,168,036 Total assets 1,288,986 8,380,227 LIABILITIES Current liabilities payable from current assets: Accounts payable -trade 9,088 3,646 Accrued payroll 2,786 7,488 Accrued vacation and sick leave 6,491 5,955 Payable to government agencies 271 37 Other liabilities 2,750 216 Total current liabilities payable from current assets 21,386 17,342 Net assets: Invested in capital assets 644,082 8,168,036 Unrestricted 623,518 194,849 Total net assets $ 1,267,600 $ 8,362,885 67 EXHIBIT D-1 Total Nonmajor Stormwater Enterprise Transit Drainage Funds $ 26,564 $ 2,654,878 $ 3,441,886 121,852 121,852 112,761 - 112,761 53,309 35,986 7,356 139,325 2,776,730 3,773,150 614,167 3,349,508 12,775,793 753,492 6,126,238 16,548,943 3,830 158,990 175,554 27,960 4,259 42,493 16,878 6,727 36,051 308 28,599 31,565 48,668 198,575 285,971 614,167 3,349,508 12,775,793 90,657 2,578,155 3,487,179 $ 704,824 $ 5,927,663 $ 16,262,972 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2007 Municipal Kickapoo Airport Airport Operating revenues: Charges for services Rents, concessions and other 441,471 789,522 Total operating revenues 441,471 789,522 Operating expenses: Personnel services 75,021 198,317 Supplies and materials 1,704 450,667 Maintenance and repairs 58,002 10,747 Utilities and other services 78,104 93,042 Insurance and contract support 14,010 12,594 Other expenses 47,977 34,233 Depreciation and amortization 46,429 196,361 Total operating expenses 321,247 995,961 Operating income (loss) 120,224 (206,439) Nonoperating revenues (expenses): Interest income 33,951 8,163 Intergovernmental operating grants - - Total nonoperating revenues (expenses) 33,951 8,163 Income (loss) before transfers 154,175 (198,276) Transfers: Transfers in 53,644 2,275,996 Transfers out (145,424)Net transfers (91,780) 2,275,996 Net income (loss) 62,395 2,077,720 Net assets - beginning 1,205,205 6,285,165 Net assets - ending $ 1,267,600 $ 8,362,885 68 EXHIBIT D-2 Total Nonmajor Stormwater Enterprise Transit Drainage Funds $ 206,109 $ 1,214,905 $ 1,421,014 52,628 1,283,621 206,109 1,267,533 2,704,635 713,516 116,019 1,102,873 230,749 500 683,620 198,163 16,903 283,815 82,557 45,385 299,088 58,453 - 85,057 48,538 136,202 266,950 32,907 41,934 317,631 1,364,883 356,943 3,039,034 (1,158,774) 910,590 (334,399) 132,302 174,416 1,026,685 - 1,026,685 1,026,685 132,302 1,201,101 (132,089) 1,042,892 866,702 109,186 39,287 2,478,113 (464,815) (610,239) 109,186 (425,528) 1,867,874 (22,903) 617,364 2,734,576 727,727 5,310,299 13,528,396 $ 704,824 $ 5,927,663 $ 16,262,972 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2007 Municipal Kickapoo Airport Airport Cash flows from operating activities: Receipts from customers and users $ 449,113 $ 795,084 Payments to suppliers (214,613) (665,510) Payments to employees (58,419) (151,292) Net cash provided (used) by operating activities 176,081 (21,718) Cash flows from noncapital financing activities: Intergovernmental operating grants - - Transfers out to other funds (145,424) - Transfers from other funds 53,644 2,275,996 Net cash provided (used) by noncapital financing activities (91,780) 2,275,996 Cash flows from capital and related financing activities: Acquisition and construction of capital assets (53,644) (2,275,996) Net cash provided by(used for)capital and related financing activities (53,644) (2,275,996) Cash flows from investing activities: Interest on investments 33,951 8,163 Net cash provided by investing activities 33,951 8,163 Net Increase (Decrease) in Cash and Cash Equivalents 64,608 (13,555) Cash and Cash Equivalents- Beginning 548,803 160,588 Cash and Cash Equivalents- Ending $ 613,411 $ 147,033 69 EXHIBIT D-3 (Page 1 of 2) Total Nonmajor Stormwater Enterprise Transit Drainage Funds $ 206,175 $ 1,267,972 $ 2,718,344 (772,753) (69,453) (1,722,329) (560,339) (85,318) (855,368) (1,126,917) 1,113,201 140,647 1,021,671 - 1,021,671 (464,815) (610,239) 109,186 39,287 2,478,113 1,130,857 (425,528) 2,889,545 (18,839) (265,341) (2,613,820) (18,839) (265,341) (2,613,820) 132,302 174,416 132,302 174,416 (14,899) 554,634 590,788 41,463 2,100,244 2,851,098 $ 26,564 $ 2,654,878 $ 3,441,886 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF CASH FLOWS (CONT'D.) NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2007 Municipal Kickapoo Airport Airport Cash flows from operating activities: Operating income (loss) $ 120,224 $ (206,439) Adjustments to reconcile operating income (loss) to net cash provided by(used in) operating activities: Depreciation and amortization 46,429 196,361 (Increase) decrease in current assets: Receivables: Customer and trade - - Other 7,642 5,562 Inventory - 19,323 Prepaid items 650 400 Increase (decrease) in current liabilities: Accounts payable-trade 3,235 (39,562) Accrued payroll (1,201) 1,447 Accrued vacation and sick leave (862) 1,083 Payable to government agencies (36) (52) Other liabilities - 159 Total adjustments 55,857 184,721 Net cash provided by(used in) operating activities $ 176,081 $ (21,718) 70 EXHIBIT D-3 (Page 2 of 2) Stormwater Transit Drainage Totals $(1,158,774) $ 910,590 $ (334,399) 32,907 41,934 317,631 439 439 66 - 13,270 19,323 105 1,155 (1,279) 140,525 102,919 163 94 503 6,727 6,948 - - (88) 12,787 12,946 31,857 202,611 475,046 $(1,126,917) $ 1,113,201 $ 140,647 Wichita r, TEXAS`� � 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 to account for and administer group health insurance, which is self-insured by the City, and life insurance for employees and covered dependents. EXHIBIT E-1 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS SEPTEMBER 30, 2007 Employee Fleet Duplicating Benefit Maintenance Services Trust Totals ASSETS Current assets: Cash and cash equivalents $ 592,489 $ 74,909 $ 3,009,051 $ 3,676,449 Receivables: Other 47,972 - - 47,972 Inventory 827,710 10,801 - 838,511 Prepaid items 11,648 28,638 125 40,411 Total current assets 1,479,819 114,348 3,009,176 4,603,343 Capital assets, net of accumulated depreciation 15,827,572 66,466 1,128 15,895,166 Total assets 17,307,391 180,814 3,010,304 20,498,509 LIABILITIES Current liabilities: Accounts payable-trade 372,873 4,604 135,721 513,198 Accrued payroll 65,127 2,596 3,743 71,466 Accrued vacation and sick leave 56,404 1,031 - 57,435 Estimated health claims payable - - 476,004 476,004 Total current liabilities 494,404 8,231 615,468 1,118,103 NET ASSETS Invested in capital assets 15,827,572 66,466 1,128 15,895,166 Unrestricted 985,415 106,117 2,393,708 3,485,240 Total net assets $ 16,812,987 $ 172,583 $ 2,394,836 $ 19,380,406 71 EXHIBIT E-2 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2007 Employee Fleet Duplicating Benefit Maintenance Services Trust Totals Operating revenues: Charges for services $ 8,818,313 $ 230,551 $ 19,957 $ 9,068,821 Rents, concessions and other 24,399 294 321,893 346,586 Contributions - - 7,922,996 7,922,996 Total operating revenues 8,842,712 230,845 8,264,846 17,338,403 Operating expenses: Personnel services 1,700,087 77,447 139,351 1,916,885 Supplies and materials 3,085,420 27,678 5,846 3,118,944 Maintenance and repairs 1,800,528 255 - 1,800,783 Utilities and other services 111,042 1,296 22,480 134,818 Insurance and contract support 60,370 190 6,157,308 6,217,868 Other expenses 170,364 128,262 884,770 1,183,396 Depreciation and amortization 3,171,924 6,785 601 3,179,310 Total operating expenses 10,099,735 241,913 7,210,356 17,552,004 Operating income (loss) (1,257,023) (11,068) 1,054,490 (213,601) Nonoperating revenues (expenses): Interest income - - 94,429 94,429 Gain on sale of capital assets 198,372 - - 198,372 Total nonoperating revenues (expenses) 198,372 - 94,429 292,801 Income (loss) before transfers (1,058,651) (11,068) 1,148,919 79,200 Transfers: Transfers in 1,995,041 - - 1,995,041 Transfers out (627,000) - - (627,000) Total transfers 1,368,041 - - 1,368,041 Net income (loss) 309,390 (11,068) 1,148,919 1,447,241 Net assets- beginning 16,503,597 183,651 1,245,917 17,933,165 Net assets-ending $ 16,812,987 $ 172,583 $ 2,394,836 $ 19,380,406 72 EXHIBIT E-3 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2007 Employee Fleet Duplicating Benefit Maintenance Services Trust Totals Cash flows from operating activities: Receipts from customers and users $ 8,818,536 $ 230,845 $ 8,264,846 $ 17,314,227 Payments to suppliers (5,503,844) (200,387) (6,848,276) (12,552,507) Payments to employees (1,294,927) (56,605) (106,430) (1,457,962) Net cash provided (used)by operating activities 2,019,765 (26,147) 1,310,140 3,303,758 Cash flows from noncapital financing activities: Transfers in from other funds 1,995,041 - - 1,995,041 Transfers out to other funds (627,000) - - (627,000) Net cash provided by noncapital financing activities 1,368,041 - - 1,368,041 Cash flows from capital and related financing activities: Acquisition of capital assets (4,032,684) (1,500) - (4,034,184) Proceeds from sale of capital assets 215,456 - - 215,456 Net cash used for capital and related financing activities (3,817,228) (1,500) - (3,818,728) Cash flows from investing activities: Interest on investments - - 94,428 94,428 Net Increase(Decrease) in Cash and Cash Equivalents (429,422) (27,647) 1,404,568 947,499 Cash and Cash Equivalents- Beginning 1,021,911 102,556 1,604,483 2,728,950 Cash and Cash Equivalents- Ending $ 592,489 $ 74,909 $ 3,009,051 $ 3,676,449 Cash flows from operating activities: Operating income(loss) $ (1,257,023) $ (11,068) $ 1,054,490 $ (213,601) Adjustments to reconcile operating income to net cash provided (used)by operating activities: Depreciation and amortization 3,171,924 6,785 601 3,179,310 (Increase)decrease in current assets: Receivables: Other (24,176) - - (24,176) Inventory (102,751) (2,147) - (104,898) Prepaid items (11,648) (12,762) 25 (24,385) Increase(decrease)in current liabilities: Accounts payable-trade 234,205 (7,174) 111,650 338,681 Accrued payroll 106 120 (1,565) (1,339) Accrued vacation and sick leave 9,128 99 - 9,227 Estimated health claims payable - - 144,939 144,939 Total adjustments 3,276,788 (15,079) 255,650 3,517,359 Net cash provided (used)by operating activities $ 2,019,765 $ (26,147) $ 1,310,140 $ 3,303,758 73 Agency Fund g Y 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. Wichita s S►\ \( EXHIBIT F-1 CITY OF WICHITA FALLS, TEXAS AGENCY FUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED SEPTEMBER 30, 2007 Balance Balance 10/1/2006 Additions Deductions 9/30/2007 ESCHEATMENT FUND Assets Cash and cash equivalents $ 92,605 $ 12,094 $ 9,106 $ 95,593 Liabilities Other liabilities $ 92,605 $ 12,094 $ 9,106 $ 95,593 74 Wichita TEXAS\ 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#1 The Wichita Falls Reinvestment Zone #1 was created in March 1986 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#1 is to capture increments of growth in real property values in the designated zone area from base values established in January 1986 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#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 :41,5_, TEXASLLL EXHIBIT G-1 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF NET ASSETS COMPONENT UNITS SEPTEMBER 30, 2007 Wichita Falls Economic Wichita Falls Wichita Falls Wichita Falls Development 4B Sales Tax Reinvestment Reinvestment Corporation Corporation Zone#1 Zone#2 Totals Assets Cash and cash equivalents $18,525,496 $ 6,990,668 $ 253,714 $ - $25,769,878 Receivables: Taxes and assessments - - 27,812 - 27,812 Government agencies 581,242 581,242 - - 1,162,484 Prepaid items - 85,901 - - 85,901 Capital assets, net of accumulated depreciation 2,415,067 - - - 2,415,067 Total assets 21,521,805 7,657,811 281,526 - 29,461,142 Liabilities Accounts payable-trade 271 28,624 - - 28,895 Payable to primary government - 1,516,694 - - 1,516,694 Total liabilities 271 1,545,318 - - 1,545,589 Net assets Investment in capital assets, net of related debt 2,415,067 - - - 2,415,067 Unrestricted 19,106,467 6,112,493 281,526 - 25,500,486 Total net assets $21,521,534 $ 6,112,493 $ 281,526 $ - $27,915,553 75 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF ACTIVITIES COMPONENT UNITS FOR THE YEAR ENDED SEPTEMBER 30, 2007 Program Revenue Operating Charges for Grants and Expenses Services Contributions Community development Wichita Falls Economic Development Corporation $ 2,199,438 $ 106,800 $ - Wichita Falls 4B Sales Tax Corporation 3,172,483 - 208,143 Wichita Falls Reinvestment Zone#1 229,000 - - Wichita Falls Reinvestment Zone#2 98,358 - - Total component units $ 5,699,279 $ 106,800 $ 208,143 General revenues: Taxes: Property tax Sales tax Investment earnings Total general revenues Change in net assets Net assets-beginning Net assets-ending 76 EXHIBIT G-2 Net(Expense) Revenue and Changes in Net Assets Wichita Falls Economic Wichita Falls Wichita Falls Wichita Falls Development 4B Sales Tax Reinvestment Reinvestment Corporation Corporation Zone#1 Zone#2 Totals $ (2,092,638) $ - $ - $ - $ (2,092,638) - (2,964,340) - - (2,964,340) - - (229,000) - (229,000) - - - (98,358) (98,358) (2,092,638) (2,964,340) (229,000) (98,358) (5,384,336) - - 149,074 97,326 246,400 3,344,755 3,344,755 - - 6,689,510 910,876 402,321 17,453 1,032 1,331,682 4,255,631 3,747,076 166,527 98,358 8,267,592 2,162,993 782,736 (62,473) - 2,883,256 19,358,541 5,329,757 343,999 - 25,032,297 $ 21,521,534 $ 6,112,493 $ 281,526 $ - $ 27,915,553 Wichita \41,s TEXASa Supporting Schedules Wichita .0 TE XAS\\\\ CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDED DEBT AND INTEREST MATURITIES SEPTEMBER 30,2007 Fiscal Year General Obligation Bonds Combination Tax and Revenue Bonds Water and Sewer Ending Serial Bond Interest Total Bonds Serial Bond Interest Total Bonds Serial Bond September 30, Maturities on Bonds and Interest Maturities(1) on Bonds and Interest Maturities(2) 2008 $ 910,000 $ 350,169 $ 1,260,169 $ 4,914,400 $ 2,024,978 $ 6,939,378 $ 1,956,715 2009 945,000 312,631 1,257,631 4,636,966 1,891,211 6,528,177 2,020,871 2010 745,000 273,650 1,018,650 4,776,768 1,725,825 6,502,593 2,119,997 2011 340,000 241,987 581,987 4,921,926 1,592,050 6,513,976 2,198,967 2012 355,000 227,113 582,113 5,081,767 1,439,272 6,521,039 2,287,897 2013 370,000 210,694 580,694 3,651,402 1,251,458 4,902,860 3,751,664 2014 385,000 193,581 578,581 3,706,868 1,189,335 4,896,203 3,898,431 2015 405,000 175,775 580,775 3,865,811 1,021,268 4,887,079 4,059,980 2016 425,000 154,512 579,512 4,053,240 843,970 4,897,210 4,226,352 2017 450,000 132,200 582,200 1,433,939 656,100 2,090,039 4,392,537 2018 475,000 108,013 583,013 1,481,894 597,000 2,078,894 4,578,541 2019 500,000 82,481 582,481 1,144,725 534,500 1,679,225 8,224,396 2020 530,000 55,606 585,606 1,192,410 484,210 1,676,620 8,575,823 2021 555,000 28,444 583,444 1,239,945 430,750 1,670,695 8,951,741 2022 - - - 1,297,351 374,438 1,671,789 9,337,675 2023 - - - 1,364,222 307,062 1,671,284 9,748,174 2024 - - - 1,425,925 235,938 1,661,863 10,177,748 2025 - - - 1,497,469 161,375 1,658,844 10,621,792 2026 - - - 1,573,832 82,812 1,656,644 11,085,785 2027 - _ - - 3,819,245 $ 7,390,000 $ 2,546,856 $ 9,936,856 $ 53,260,860 $ 16,843,552 $ 70,104,412 $ 116,034,331 (1)Includes amortization of bond premium of$1,815,860. (2)Includes amortization of bond premium of$1,554,328. 77 EXHIBIT H-1 Priority Lien Revenue Bonds Water and Sewer Subordinate Lien Revenue Bonds Totals-All Bonded Debt Interest Total Bonds Serial Bond Interest Total Bonds Serial Bond Interest Total Bonds on Bonds and Interest Maturities on Bonds and Interest Maturities on Bonds and Interest $ 5,054,685 $ 7,011,400 $ 25,000 $ 358,041 $ 383,041 $ 7,806,115 $ 7,787,873 $ 15,593,988 4,980,625 7,001,496 25,000 357,044 382,044 7,627,837 7,541,511 15,169,348 4,903,820 7,023,817 25,000 356,021 381,021 7,666,765 7,259,316 14,926,081 4,815,270 7,014,237 25,000 354,974 379,974 7,485,893 7,004,281 14,490,174 4,722,912 7,010,809 25,000 353,902 378,902 7,749,664 6,743,199 14,492,863 4,618,190 8,369,854 325,000 352,804 677,804 8,098,066 6,433,146 14,531,212 4,470,630 8,369,061 310,000 338,374 648,374 8,300,299 6,191,920 14,492,219 4,308,338 8,368,318 300,000 324,455 624,455 8,630,791 5,829,836 14,460,627 4,138,637 8,364,989 275,000 310,835 585,835 8,979,592 5,447,954 14,427,546 3,961,744 8,354,281 3,180,000 298,350 3,478,350 9,456,476 5,048,394 14,504,870 3,777,550 8,356,091 3,320,000 152,388 3,472,388 9,855,435 4,634,951 14,490,386 3,595,450 11,819,846 - - - 9,869,121 4,212,431 14,081,552 3,239,325 11,815,148 - - - 10,298,233 3,779,141 14,077,374 2,856,825 11,808,566 - - - 10,746,686 3,316,019 14,062,705 2,457,000 11,794,675 - - - 10,635,026 2,831,438 13,466,464 2,039,400 11,787,574 - - - 11,112,396 2,346,462 13,458,858 1,602,900 11,780,648 - - - 11,603,673 1,838,838 13,442,511 1,146,600 11,768,392 - - - 12,119,261 1,307,975 13,427,236 669,825 11,755,610 - - - 12,659,617 752,637 13,412,254 171,675 3,990,920 - - - 3,819,245 171,675 3,990,920 $ 67,531,401 $ 183,565,732 $ 7,835,000 $ 3,557,188 $ 11,392,188 $ 184,520,191 $ 90,478,997 $ 274,999,188 CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE SEPTEMBER 30, 2007 Final Interest Rates Issue Maturity Annual and(Dates) Date Date Serial Payments General Obligation and Construction 3.75,3.85,4.00,4.125 03/01/01 09/01/21 175,000 (2002) Refunding Bonds,Series 2001 4.25,4.375,4.625,5.00 415,000 (2003) 5.125,5.25,5.375 435,000 (2004) (3/1,9/1) 445,000 (2005) 465,000 (2006) 880,000 (2007) 910,000 (2008) 945,000 (2009) 745,000 (2010) 340,000 (2011) 355,000 (2012) 370,000 (2013) 385,000 (2014) 405,000 (2015) 425,000 (2016) 450,000 (2017) 475,000 (2018) 500,000 (2019) 530,000 (2020) 555,000 (2021) Total General Obligation Bonds Combination Tax and Revenue Bonds: Combination Tax and Revenue 3.00,3.10,3.30,3.40 11/15/03 09/01/18 740,000 (2004) Certificates of Obligation, 3.55,3.65,3.75,3.90, 715,000 (2005) Series 2003 4.00 735,000 (2006) (3/1,9/1) 755,000 (2007) 775,000 (2008) 380,000 (2009) 390,000 (2010) 405,000 (2011) 420,000 (2012) 435,000 (2013) 335,000 (2014) 345,000 (2015) 360,000 (2016) 375,000 (2017) 385,000 (2018) 78 EXHIBIT H-2 (Page 1 of 5) Bonds Retired or Authorized Issued Refunded Outstanding $ 10,205,000 $ 10,205,000 $ 2,815,000 $ 7,390,000 10,205,000 10,205,000 2,815,000 7,390,000 7,550,000 7,550,000 2,945,000 4,605,000 CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE(CONT'D.) SEPTEMBER 30,2007 Final Interest Rates Issue Maturity Annual and(Dates) Date Date Serial Payments Combination Tax and Revenue 2.00,2.25,2.75,3.50, 09/01/04 08/01/12 685,000 (2005) Refunding Bonds, 4.00,5.00 640,000 (2006) Series 2004 (2/1,8/1) 650,000 (2007) 3,115,000 (2008) 3,230,000 (2009) 3,375,000 (2010) 3,500,000 (2011) 3,645,000 (2012) Combination Tax and Revenue Refunding Bonds,Series 2004-Premium Combination Tax and Revenue 4.90,5.00 09/01/05 08/01/16 115,000 (2005) Refunding Bonds, (2/1,8/1) 2,055,000 (2006) Series 2005 2,150,000 (2007) 2,210,000 (2013) 2,350,000 (2014) 2,490,000 (2015) 2,650,000 (2016) Combination Tax and Revenue Refunding Bonds,Series 2005-Premium Combination Tax and Revenue 3.55,3.60,3.90,4.00 11/15/06 09/01/26 705,000(2007) Certificates of Obligation, 4.10,4.20,4.25,5.00 580,000(2008) Series 2006A (3/1,9/1) 605,000(2009) 625,000(2010) 650,000(2011) 680,000(2012) 705,000(2013) 735,000(2014) 760,000(2015) 795,000(2016) 825,000(2017) 855,000(2018) 890,000(2019) 930,000(2020) 965,000(2021) 1,010,000(2022) 1,060,000(2023) 1,110,000(2024) 1,165,000(2025) 1,225,000(2026) Combination Tax and Revenue Certificates of Obligation,Series 2006A-Premium 79 EXHIBIT H-2 (Page 2 of 5) Bonds Retired or Authorized Issued Refunded Outstanding 18,840,000 18,840,000 1,975,000 16,865,000 - 1,060,889 519,424 541,465 14,020,000 14,020,000 4,320,000 9,700,000 - 1,050,891 292,512 758,379 16,875,000 16,875,000 705,000 16,170,000 - 448,769 29,399 419,370 CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE(CONT'D.) SEPTEMBER 30, 2007 Final Interest Rates Issue Maturity Annual and(Dates) Date Date Serial Payments Combination Tax and Revenue 5.20,5.30,6.00,6.25 11/15/06 09/01/26 170,000(2007) Certificates of Obligation, (3/1,9/1) 130,000(2008) Series 2006B 135,000(2009) 140,000(2010) 150,000(2011) 155,000(2012) 165,000(2013) 175,000(2014) 185,000(2015) 190,000(2016) 205,000(2017) 215,000(2018) 230,000(2019) 240,000(2020) 255,000(2021) 270,000(2022) 290,000(2023) 305,000(2024) 325,000(2025) 345,000(2026) Combination Tax and Revenue Certificates of Obligation,Series 2006E-Premium Total Combination Tax and Revenue Bonds Revenue Bonds: Priority Lien: Water and Sewer System 4.05,4.10,4.25,4.35, 10/01/98 08/01/18 215,000 (1999) Priority Lien Revenue Bonds, 4.45,4.55,4.625,4.65 180,000 (2000) Series 1998B (2/1,8/1) 190,000 (2001) 200,000 (2002) 210,000 (2003) 220,000 (2004) 230,000 (2005) 240,000 (2006) 250,000 (2007) 260,000 (2008) 270,000 (2009) 280,000 (2010) 295,000 (2011) 305,000 (2012) 320,000 (2013) 335,000 (2014) 350,000 (2015) 365,000 (2016) 385,000 (2017) 400,000 (2018) 80 EXHIBIT H-2 (Page 3 of 5) Bonds Retired or Authorized Issued Refunded Outstanding 4,275,000 4,275,000 170,000 4,105,000 - 103,279 6,633 96,646 61,560,000 64,223,828 10,962,968 53,260,860 5,500,000 5,500,000 1,935,000 3,565,000 CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE (CONT'D.) SEPTEMBER 30, 2007 Final Interest Rates Issue Maturity Annual and(Dates) Date Date Serial Payments Water and Sewer System 3.75,4.00,4.375,4.50 09/01/01 08/01/27 1,665,000 (2002) Priority Lien Revenue 5.00,5.10, 5.375 1,220,000 (2003) Bonds,Series 2001 (2/1,8/1) 1,265,000 (2004) 1,320,000 (2005) 1,365,000 (2006) 1,430,000 (2007) 1,360,000 (2008) 1,410,000 (2009) 1,490,000 (2010) 1,545,000 (2011) 1,615,000 (2012) Water and Sewer System Priority Lien Revenue Bonds,Series 2001 -Premium Water and Sewer System 4.00,4.25,4.375,4.50 02/01/07 08/01/27 225,000 (2008) Priority Lien Refunding Revenue (2/1,8/1) 230,000 (2009) Bonds,Series 2007 240,000 (2010) 250,000 (2011) 260,000 (2012) 3,325,000 (2013) 3,460,000 (2014) 3,610,000 (2015) 3,765,000 (2016) 3,915,000 (2017) 4,090,000 (2018) 8,140,000 (2019) 8,500,000 (2020) 8,885,000 (2021) 9,280,000 (2022) 9,700,000 (2023) 10,140,000 (2024) 10,595,000 (2025) 11,070,000 (2026) 3,815,000 (2027) Water and Sewer System Priority Lien Refunding Revenue Bonds,Series 2007-Premium Total Priority Lien Revenue Bonds 81 EXHIBIT H-2 (Page 4 of 5) Bonds Retired or Authorized Issued Refunded Outstanding 118,770,000 118,770,000 111,350,000 7,420,000 1,634,193 503,035 1,131,158 103,495,000 103,495,000 - 103,495,000 437,938 14,768 423,170 227,765,000 229,837,131 113,802,803 116,034,328 CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE (CONT'D.) SEPTEMBER 30, 2007 Final Interest Rates Issue Maturity Annual and(Dates) Date Date Serial Payments Water and Sewer System 3.14,3.39,3.49,3.59, 05/22/98 08/01/18 25,000 (1999) Subordinate Lien Revenue 3.64,3.69,3.79,3.89, 25,000 (2000) Bonds,Series 1998 3.94,3.99,4.09,4.19, 25,000 (2001) 4.29,4.39,4.44,4.49, 25,000 (2002) 4.54,4.59 25,000 (2003) (2/1,8/1) 25,000 (2004) 25,000 (2005) 25,000 (2006) 25,000 (2007) 25,000 (2008) 25,000 (2009) 25,000 (2010) 25,000 (2011) 25,000 (2012) 325,000 (2013) 310,000 (2014) 300,000 (2015) 275,000 (2016) 3,180.000 (2017) 3.320.000 (2018) Total Subordinate Lien Bonds Total Revenue Bonds Total All Bonds 82 EXHIBIT H-2 (Page 5 of 5) Bonds Retired or Authorized Issued Refunded Outstanding 8,060,000 8,060,000 225,000 7,835,000 8,060,000 8,060,000 225,000 7,835,000 235,825,000 237,897,131 114,027,803 123,869,328 $ 307,590,000 $ 312,325,959 $ 127,805,771 $ 184,520,188 Wichita Als1 EXHIBIT H-3 CITY OF WICHITA FALLS, TEXAS DEBT SERVICE COVERAGE - REVENUE BONDS SEPTEMBER 30, 2007 Water and Sewer Revenue Bonds: Change in net assets (Exhibit A-8) $ 6,961,087 Add: Depreciation and amortization $ 3,833,935 Interest expense and paying agent fees 6,626,333 Transfers out 4,545,067 15,005,335 Subtract: West Texas Utilities water revenues 433,260 Gain on sale/abandonment of capital assets 802 Capital contributions from developers 580,729 Transfers in 3,365,381 (4,380,172) Net earnings for determining debt service coverage $17,586,250 Priority Subordinate Lien Bonds Lien Bonds Net earnings for determining debt service coverage $17,586,250 Principal and interest requirements to maturity $ 183,565,732 $11,392,188 Number of years remaining to pay bonds 20 11 Average annual principal and interest requirement 9,178,287 1,035,653 Minimum bond covenant debt service coverage 1.25 1.10 Minimum debt service coverage requirement $ 11,472,858 $ 1,139,219 12,612,077 Excess over debt service coverage requirements $ 4,974,173 83 CITY OF WICHITA FALLS, TEXAS CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY SEPTEMBER 30, 2007 Buildings Machinery Land and and and Betterments Improvements Equipment Administrative services: Mayor and City Council $ - $ 3,797 $ 1,376 City Manager 1,062,849 336,872 49,516 Personnel/Risk Management - - 13,044 Martin Luther King Center - 349,839 7,641 Library 477,942 4,523,930 638,781 General Public Information - - 326,069 Building Maintenance - 1,076,622 39,248 Nondepartmental - 518,881 182,799 Municipal Court 230,000 316,527 212,988 Legal - - 3,604 City Clerk - - 8,111 Homeland security - - 537,458 Training Center - - 32,105 Golf course 48,019 16,861 86,935 Total administrative services 1,818,810 7,143,329 2,139,675 Police 1,122,584 6,067,418 12,736,788 Fire 252,459 5,710,267 327,690 Parks and recreation: Recreation 655,246 1,903,345 291,212 Park maintenance 9,009,598 1,039,126 68,860 Cemetery 27,900 - 11,115 Total parks and recreation 9,692,744 2,942,471 371,187 Accounting/finance: Accounting/finance - - 13,265 Information Systems - - 2,649,355 Total accounting/finance - - 2,662,620 Community development: Planning - - 73,385 Inspection - - 43,958 Code enforcement - - 67,568 Property management 1,161,884 420,891 75,147 Lake lot administration - - 1,018 Weed and Seed program - 14,073 Total community development 1,161,884 420,891 275,149 Public works: Engineering 125,806 29,665 148,275 Street maintenance 28,547 98,073 27,458 Infrastructure - - - Total public works 154,353 127,738 175,733 Health: Administration 34,820 2,848,938 415,397 General City nursing 76,411 1,123 96,599 Environmental health - 8,956 27,814 Lab water pollution - - 36,406 Total health 111,231 2,859,017 576,216 Traffic and transportation - 31,045 134,924 Multi-Purpose Events Center 9,277,513 33,947,462 353,588 Wichita Falls Business Park 1,066,007 - - Total capital assets used in the operation of governmental funds $ 24,657,585 $ 59,249,638 $ 19,753,570 84 EXHIBIT H-4 Motor Furniture Vehicles and and Construction Fixtures Equipment Infrastructure in Progress Totals $ 5,218 $ - $ - $ - $ 10,391 15,050 - - - 1,464,287 3,425 - - - 16,469 12,486 - - 17,920 387,886 90,579 - - - 5,731,232 3,184 - - - 329,253 - - - 1,115,870 - - - - 701,680 4,043 - - - 763,558 - - - 3,604 - - - 8,111 - - - - 537,458 - - - - 32,105 3,175 - - 2,871,832 3,026,822 137,160 - - 2,889,752 14,128,726 11,788 - - 118,279 20,056,857 1,755 - - 67,173 6,359,344 12,818 - - - 2,862,621 -- 579,518 10,697,102 - - - - 39,015 12,818 - - 579,518 13,598,738 - - - - 13,265 - - - - 2,649,355 - - - - 2,662,620 1,025 - - - 74,410 - - - - 43,958 - - - 67,568 31,485 - - 1,689,407 - - - 1,018 - - - - 14,073 1,025 31,485 - - 1,890,434 3,355 - - - 307,101 1,393 - - - 155,471 - - 134,735,423 - 134,735,423 4,748 - 134,735,423 - 135,197,995 21,835 - - 22,139 3,343,129 5,447 - - - 179,580 - - - 36,770 - - - - 36,406 27,282 - - 22,139 3,595,885 - - 7,670,404 49,171 7,885,544 28,288 - - - 43,606,851 - - - - 1,066,007 $ 224,864 $ 31,485 $ 142,405,827 $ 3,726,032 $ 250,049,001 EXHIBIT H-5 CITY OF WICHITA FALLS, TEXAS CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY FOR THE YEAR ENDED SEPTEMBER 30,2007 Beginning Ending Balance Balance 10/1/2006 Additions Deletions 9/30/2007 Administrative services: Mayor and City Council $ 10,391 $ - $ - $ 10,391 City Manager 1,464,287 - - 1,464,287 Personnel/Risk Management 18,577 - 2,108 16,469 Martin Luther King Center 369,966 17,920 - 387,886 Library 5,737,154 23,155 29,077 5,731,232 General Public Information 323,297 8,399 2,443 329,253 Building Maintenance 1,111,998 3,872 - 1,115,870 Nondepartmental 700,180 1,500 - 701,680 Municipal Court 751,576 13,158 1,176 763,558 Legal 2,254 1,350 - 3,604 City Clerk 6,700 1,411 - 8,111 Homeland security 422,811 114,647 - 537,458 Training center - 32,105 - 32,105 Golf course - 3,026,822 - 3,026,822 Total administrative services 10,919,191 3,244,339 34,804 14,128,726 Police 19,659,220 405,658 8,021 20,056,857 Fire 6,286,506 72,838 - 6,359,344 Parks and recreation: Recreation 2,848,514 14,107 - 2,862,621 Park maintenance 10,045,698 660,971 9,567 10,697,102 Cemetery 31,315 7,700 - 39,015 Total parks and recreation 12,925,527 682,778 9,567 13,598,738 Accounting/finance: Accounting/finance 13,265 - - 13,265 Information Systems 2,105,227 559,202 15,074 2,649,355 Total accounting/finance 2,118,492 559,202 15,074 2,662,620 Community development: Planning 79,473 - 5,063 74,410 Inspection 42,930 1,028 - 43,958 Code enforcement 67,568 - - 67,568 Property management 1,688,141 1,266 - 1,689,407 Lake lot administration 1,018 - - 1,018 Weed and Seed program 14,073 - - 14,073 Total community development 1,893,203 2,294 5,063 1,890,434 Public works: Engineering 307,101 - - 307,101 Street maintenance 140,582 14,889 - 155,471 Infrastructure 134,204,425 1,836,720 1,305,722 134,735,423 Total public works 134,652,108 1,851,609 1,305,722 135,197,995 Health: Administration 3,331,822 16,567 5,260 3,343,129 General city nursing 179,580 - - 179,580 Environmental health 30,014 8,956 2,200 36,770 Lab water pollution 43,285 1,200 8,079 36,406 Total health 3,584,700 26,723 15,539 3,595,885 Traffic and transportation 7,746,363 240,079 100,898 7,885,544 Multi-Purpose Events Center 43,608,127 - 1,276 43,606,851 Wichita Falls Business Park 870,696 195,311 - 1,066,007 Total capital assets $ 244,264,133 $ 7,280,831 $ 1,495,964 $ 250,049,001 85 EXHIBIT H-6 CITY OF WICHITA FALLS, TEXAS MUNICIPAL AIRPORT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2007 Balance Balance 10/1/2006 Additions Deletions 9/30/2007 Capital Assets: Land and betterments $ 1,461,823 $ - $ - $ 1,461,823 Buildings and improvements 1,549,912 - - 1,549,912 Machinery and equipment 35,337 - - 35,337 Furniture and fixtures 36,705 - - 36,705 Construction in progress - 53,643 - 53,643 Total capital assets 3,083,777 53,643 - 3,137,420 Accumulated Depreciation: Land and betterments 1,448,542 9,887 - 1,458,429 Buildings and improvements 958,741 30,796 - 989,537 Machinery and equipment 18,373 2,333 - 20,706 Furniture and fixtures 21,252 3,414 - 24,666 Total accumulated depreciation 2,446,908 46,430 - 2,493,338 Net capital assets $ 636,869 $ 7,213 $ - $ 644,082 86 EXHIBIT H-7 CITY OF WICHITA FALLS, TEXAS KICKAPOO AIRPORT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2007 Balance Balance 10/1/2006 Additions Deletions 9/30/2007 Capital Assets: Land and betterments $5,324,443 $ 52,000 $ - $ 5,376,443 Buildings and improvements 385,377 - - 385,377 Machinery and equipment 507,836 455,238 - 963,074 Construction in progress 219,409 1,768,758 - 1,988,167 Total capital assets 6,437,065 2,275,996 - 8,713,061 Accumulated Depreciation: Land and betterments 227,841 152,533 - 380,374 Buildings and improvements 74,767 11,524 - 86,291 Machinery and equipment 46,056 32,304 - 78,360 Total accumulated depreciation 348,664 196,361 - 545,025 Net capital assets $6,088,401 $ 2,079,635 $ - $ 8,168,036 87 EXHIBIT H-8 CITY OF WICHITA FALLS, TEXAS TRANSIT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2007 Balance Balance 10/1/2006 Additions Deletions 9/30/2007 Capital Assets: Land and betterments $ 61,925 $ - $ - $ 61,925 Buildings and improvements 626,868 - - 626,868 Machinery and equipment 225,912 14,839 - 240,751 Furniture and fixtures 1,152 - - 1,152 Construction in progress - 4,000 - 4,000 Total capital assets 915,857 18,839 - 934,696 Accumulated Depreciation: Buildings and improvements 178,992 7,730 - 186,722 Machinery and equipment 107,478 25,177 - 132,655 Furniture and fixtures 1,152 - - 1,152 Total accumulated depreciation 287,622 32,907 - 320,529 Net capital assets $ 628,235 $ (14,068) $ - $ 614,167 88 EXHIBIT H-9 CITY OF WICHITA FALLS, TEXAS STORMWATER DRAINAGE FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2007 Balance Balance 10/1/2006 Additions Deletions 9/30/2007 Capital Assets: Drainage $2,597,005 $ 1,000 $ - $2,598,005 Machinery and equipment 71,398 - - 71,398 Construction in progress 536,049 264,341 - 800,390 Total capital assets 3,204,452 265,341 - 3,469,793 Accumulated Depreciation: Drainage 51,511 7,293 - 58,804 Machinery and equipment 26,842 34,639 - 61,481 Total accumulated depreciation 78,353 41,932 - 120,285 Net capital assets $3,126,099 $ 223,409 $ - $3,349,508 89 EXHIBIT H-10 CITY OF WICHITA FALLS, TEXAS SANITATION FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2007 Balance Balance 10/1/2006 Additions Deletions 9/30/2007 Capital Assets: Land and betterments $2,715,221 $ 116,099 $ - $2,831,320 Buildings and improvements 2,370,382 - - 2,370,382 Machinery and equipment 191,563 90,031 1,504 280,090 Construction in progress 1,095,185 - - 1,095,185 Total capital assets 6,372,351 206,130 1,504 6,576,977 Accumulated Depreciation: Land and betterments 131,114 29,965 - 161,079 Buildings and improvements 1,174,939 49,782 - 1,224,721 Machinery and equipment 111,455 17,752 1,504 127,703 Total accumulated depreciation 1,417,508 97,499 1,504 1,513,503 Net capital assets $4,954,843 $ 108,631 $ - $5,063,474 90 EXHIBIT H-11 CITY OF WICHITA FALLS, TEXAS WATER AND SEWER FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2007 Balance Balance 10/1/2006 Additions Deletions 9/30/2007 Capital Assets: Land and betterments $ 24,345,990 $ - $ - $ 24,345,990 Buildings, systems and improvements 158,824,169 30,366,725 371,000 188,819,894 Machinery and equipment 4,409,367 92,040 4,533 4,496,874 Furniture and fixtures 1,164 - - 1,164 Motor vehicles 1,235 - - 1,235 Construction in progress 58,135,467 2,970,661 27,054,109 34,052,019 Total capital assets 245,717,392 33,429,426 27,429,642 251,717,176 Accumulated Depreciation: Land and betterments 8,604,560 243,632 - 8,848,192 Buildings, systems and improvements 63,406,745 3,266,905 371,000 66,302,650 Machinery and equipment 3,114,545 157,181 4,533 3,267,193 Furniture and fixtures 1,018 58 - 1,076 Motor vehicles 1,235 - - 1,235 Total accumulated depreciation 75,128,103 3,667,776 375,533 78,420,346 Net capital assets $170,589,289 $ 29,761,650 $27,054,109 $173,296,830 91 EXHIBIT H-12 CITY OF WICHITA FALLS, TEXAS FLEET MAINTENANCE FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2007 Balance Balance 10/1/2006 Additions Deletions 9/30/2007 Capital Assets: Land and betterments $ 433,658 $ 2,611 $ - $ 436,269 Buildings and improvements 4,024,660 - - 4,024,660 Machinery and equipment 537,529 37,526 - 575,055 Furniture and fixtures 6,358 - - 6,358 Motor vehicles 38,222,727 3,992,548 1,719,640 40,495,635 Construction in progress 6,706 - - 6,706 Total capital assets 43,231,638 4,032,685 1,719,640 45,544,683 Accumulated Depreciation: Land and betterments -other - 131 - 131 Buildings and improvements 1,652,363 80,908 - 1,733,271 Machinery and equipment 464,727 14,829 - 479,556 Furniture and fixtures 6,357 - - 6,357 Motor vehicles and equipment 26,124,295 3,076,057 1,702,556 27,497,796 Total accumulated depreciation 28,247,742 3,171,925 1,702,556 29,717,111 Net capital assets $ 14,983,896 $ 860,760 $ 17,084 $15,827,572 92 EXHIBIT H-13 CITY OF WICHITA FALLS, TEXAS DUPLICATING SERVICES FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2007 Balance Balance 10/1/2006 Additions Deletions 9/30/2007 Capital Assets: Machinery and equipment $ 126,395 $ 1,500 $ - $ 127,895 Accumulated Depreciation: Machinery and equipment 54,644 6,785 - 61,429 Net capital assets $ 71,751 $ (5,285) $ - $ 66,466 93 EXHIBIT H-14 CITY OF WICHITA FALLS, TEXAS EMPLOYEE BENEFIT TRUST FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2007 Balance Balance 10/1/2006 Additions Deletions 9/30/2007 Capital Assets: Machinery and equipment $ 3,693 $ - $ - $ 3,693 Accumulated Depreciation: Machinery and equipment 1,965 600 - 2,565 Net capital assets $ 1,728 $ (600) $ - $ 1,128 94 EXHIBIT H-15 CITY OF WICHITA FALLS, TEXAS WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2007 Balance Balance 10/1/2006 Additions Deletions 9/30/2007 Capital Assets: Land and betterments $ 1,486,592 $ - $ - $ 1,486,592 Buildings and improvements 957,191 - - 957,191 Total capital assets 2,443,783 - - 2,443,783 Accumulated Depreciation: Buildings and improvements 9,572 19,144 - 28,716 Net capital assets $ 2,434,211 $ (19,144) $ - $ 2,415,067 95 Statistical Section (Unaudited) Wichita '41s This part of the City of Wichita Falls, Texas' comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. Contents Page Financial Trends 96 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 102 These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt Capacity 106 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 '111 These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. Operating Information 113 These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. EXHIBIT I-1 CITY OF WICHITA FALLS, TEXAS NET ASSETS BY COMPONENT LAST FIVE FISCAL YEARS (UNAUDITED) Fiscal Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Governmental activities Invested in capital assets,net of related debt $ 64,632,911 $ 90,045,882 $ 127,366,654 $ 132,958,014 $ 115,911,491 Restricted 597,966 626,256 1,200,845 1,373,786 1,541,859 Unrestricted 16,561,287 25,286,103 20,500,308 20,689,055 45,314,122 Total governmental activities net assets $ 81,792,164 $ 115,958,241 $ 149,067,807 $ 155,020,855 $ 162,767,472 Business-type activities Invested in capital assets, net of related debt $ 89,683,262 $ 99,419,642 $ 112,568,870 $ 120,263,391 $ 132,852,246 Restricted 15,483,121 15,436,872 15,679,474 16,234,804 12,681,053 ca Unrestricted 14,109,004 10,631,269 7,698,134 11,962,104 12,513,454 rn Total business-type activities net assets $ 119,275,387 $ 125,487,783 $ 135,946,478 $ 148,460,299 $ 158,046,753 Primary government Invested in capital assets, net of related debt $ 154,316,173 $ 189,465,524 $ 239,935,524 $ 253,221,405 $ 248,763,737 Restricted 16,081,087 16,063,128 16,880,319 17,608,590 14,222,912 Unrestricted 30,670,291 35,917,372 28,198,442 32,651,159 57,827,576 Total primary government net assets $ 201,067,551 $ 241,446,024 $ 285,014,285 $ 303,481,154 $ 320,814,225 Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. EXHIBIT 1-2 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS CHANGES IN NET ASSETS LAST FIVE FISCAL YEARS(UNAUDITED) Fiscal Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Expenses Governmental activities: Administrative services $ 9,816,232 $ 9,524,291 $ 9,174,786 $ 10,648,044 $ 10,363,134 Police 16,082,473 16,283,542 17,107,502 17,733,480 18,587,210 Fire 9,742,147 10,058,363 10,337,851 10,825,964 11,295,623 Parks and recreation 4,112,071 4,164,247 4,220,079 4,210,463 4,478,311 Accounting/finance 1,721,239 1,851,988 1,841,475 1,843,810 1,893,389 Community development 7,536,269 7,897,167 7,181,397 6,293,156 6,573,917 Public works 5,627,020 6,404,132 6,742,355 7,706,209 8,616,348 Health 4,632,486 4,523,907 4,435,702 4,409,374 4,736,162 Traffic and transportation 2,138,240 1,983,322 2,181,799 2,527,270 2,590,309 Multi-Purpose Events Center 622,406 1,589,670 2,015,329 2,166,331 4,291,434 Interest and fees on long-term debt 905,959 921,705 843,358 721,762 1,308,748 Total governmental activities expenses 62,936,542 65,202,334 66,081,633 69,085,863 74,734,585 Business-type activities: Golf 747,356 760,705 779,151 901,454 - co v Municipal Airport 220,970 250,807 243,414 281,117 276,368 Kickapoo Airport 295,987 338,957 377,299 574,929 966,961 Transit 1,101,145 1,028,491 1,240,131 1,280,540 1,373,283 Sanitation 7,087,574 7,418,146 7,715,572 8,059,991 8,638,374 Water and Sewer 25,076,194 24,721,561 25,604,413 26,380,183 26,764,879 Stormwater drainage 10,633 112,082 125,989 328,833 355,697 Total business-type activities expenses 34,539,859 34,630,749 36,085,969 37,807,047 38,375,562 Total primary government expenses $ 97,476,401 $ 99,833,083 $ 102,167,602 $ 106,892,910 $ 113,110,147 Program Revenues Governmental activities: Charges for services: Administrative services $ 3,259,315 $ 3,631,020 $ 3,640,715 $ 3,691,411 $ 3,327,519 Police 401,168 372,510 361,201 402,583 700,216 Fire 2,062 3,233 1,458 5,195 5,434 Parks and recreation 513,109 479,204 455,861 473,121 443,827 Community development 771,418 1,265,897 1,078,293 1,195,203 1,138,671 Public works - - - 48,871 7,286 Health 590,441 668,491 711,399 807,002 803,115 Traffic and transportation 202,392 214,266 195,585 292,234 212,911 Multi-Purpose Events Center - - - - 2,215,411 Operating grants and contributions 9,469,723 11,968,460 14,734,689 11,109,618 12,298,595 Capital grants and contributions 2,608,168 6,970,138 1,176,107 2,667,389 3,218,003 Total governmental activities program revenues 17,817,796 25,573,219 22,355,308 20,692,627 24,370,988 EXHIBIT 1-2 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS CHANGES IN NET ASSETS(CONT'D.) LAST FIVE FISCAL YEARS(UNAUDITED) Fiscal Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Business-type activities: Charges for services: Golf 687,153 677,498 622,434 828,055 - Municipal Airport 359,006 416,573 446,388 448,384 441,471 Kickapoo Airport 348,512 385,871 270,194 347,761 789,522 Transit 160,749 194,388 162,018 214,771 206,109 Sanitation 8,783,064 8,920,801 9,133,955 9,517,673 9,917,386 Water and Sewer 28,488,384 27,857,286 30,208,286 33,436,585 30,031,969 Stormwater drainage 1,035,683 1,036,450 1,042,278 1,209,196 1,267,533 Operating grants and contributions 817,451 937,025 926,088 1,251,770 1,026,685 Capital grants and contributions 879,222 376,437 862,398 455,217 580,729 Total business-type activities program revenues 41,559,224 40,802,329 43,674,039 47,709,412 44,261,404 Total primary government program revenues $ 59,377,020 $ 66,375,548 $ 66,029,347 $ 68,402,039 $ 68,632,392 Net(Expense)/Revenue Governmental activities $ (45,118,746) $ (39,629,115) $ (43,726,325) $ (48,393,236) $ (50,363,597) co Business-type activities 7,019,365 6,171,580 7,588,070 9,902,365 5,885,842 co Total primary government net expense $ (38,099,381) $ (33,457,535) $ (36,138,255) $ (38,490,871) $ (44,477,755) General Revenues and Other Changes in Net Assets Governmental activities: Taxes: Property tax $ 20,890,964 $ 21,404,857 $ 22,578,788 $ 23,522,746 $ 24,975,158 Sales tax 16,598,733 17,192,703 17,845,505 19,272,204 20,068,529 Franchise fees 5,286,038 5,218,860 5,191,741 5,740,202 5,780,311 Hotel occupancy tax 1,221,620 1,278,102 1,262,518 1,333,747 1,417,397 Beverage tax 196,663 202,841 204,727 234,075 236,367 Bingo tax 230,280 209,825 164,128 178,666 166,223 Investment earnings 404,146 379,150 754,935 1,409,188 2,684,388 Gain(loss)on sale of capital assets 3,045 (24,061) - - - Miscellaneous 309,168 482,908 166,648 172,500 712,358 Transfers 5,748,106 2,241,628 473,644 2,482,958 1,972,819 Total governmental activities 50,888,763 48,586,813 48,642,634 54,346,286 58,013,550 Business-type activities: Investment earnings 2,238,809 1,764,311 3,417,875 5,094,418 5,575,703 Miscellaneous 1,167,155 518,133 (73,611) - 199,174 Transfers (3,698,431) (2,241,628) (473,644) (2,482,958) (1,972,819) Total business-type activities (292,467) 40,816 2,870,620 2,611,460 3,802,058 Total primary government $ 50,596,296 $ 48,627,629 $ 51,513,254 $ 56,957,746 $ 61,815,608 Change in Net Assets Governmental activities $ 5,770,017 $ 8,957,698 $ 4,916,309 $ 5,953,050 $ 7,649,953 Business-type activities 6,726,898 6,212,396 10,458,690 12,513,825 9,687,900 Total primary government $ 12,496,915 $ 15,170,094 $ 15,374,999 $ 18,466,875 $ 17,337,853 CITY OF WICHITA FALLS, TEXAS FUND BALANCES, GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS (UNAUDITED) 1997-1998 1998-1999 1999-2000 2000-2001 General Fund Reserved $ 1,668,836 $ 1,293,074 $ 468,513 $ 1,328,430 Unreserved 10,420,831 10,213,293 9,787,838 8,750,034 Total general fund $ 12,089,667 $ 11,506,367 $ 10,256,351 $ 10,078,464 All other Governmental Funds Reserved $ 1,780,037 $ 2,470,672 $ 2,174,801 $ 1,853,775 Unreserved, reported in: Special revenue funds 4,461,023 4,390,321 4,601,572 4,485,021 Capital projects funds 4,326,105 7,796,760 5,557,493 19,496,303 Total all other governmental funds $ 10,567,165 $ 14,657,753 $ 12,333,866 $ 25,835,099 99 EXHIBIT 1-3 Fiscal Year 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 $ 685,011 $ 1,914,615 $ 1,516,079 $ 2,439,595 $ 2,393,129 $ 3,161,776 8,367,731 8,368,357 9,507,595 10,608,472 11,503,795 15,569,840 $ 9,052,742 $ 10,282,972 $ 11,023,674 $ 13,048,067 $ 13,896,924 $ 18,731,616 $ 1,937,961 $ 3,240,727 $ 11,092,483 $ 5,102,543 $ 3,179,513 $ 2,371,514 5,769,119 4,163,834 4,673,755 4,299,100 4,746,615 7,089,584 7,064,161 3,205,633 3,394,688 3,738,484 4,857,539 23,458,510 $ 14,771,241 $ 10,610,194 $ 19,160,926 $ 13,140,127 $ 12,783,667 $ 32,919,608 CITY OF WICHITA FALLS, TEXAS CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS (UNAUDITED) 1997-1998 1998-1999 1999-2000 2000-2001 Revenues Taxes $ 35,942,790 $ 37,161,615 $ 40,069,102 $ 40,422,984 Charges for services 2,098,408 2,309,728 1,763,969 1,825,170 Licenses and permits 435,572 535,989 660,715 1,892,099 Fines and forfeitures 1,692,722 1,268,941 1,551,929 1,404,205 Intergovernmental revenue 7,824,216 7,355,808 9,442,324 8,207,044 Contributions 376,228 106,902 88,612 3,451,239 Miscellaneous revenue 2,392,793 2,465,570 2,700,040 2,906,992 Total revenues 50,762,729 51,204,553 56,276,691 60,109,733 Expenditures Administrative services 6,993,406 7,430,191 8,020,057 8,592,476 Police 12,007,525 12,535,741 13,944,759 14,062,836 Fire 7,575,584 7,881,872 8,389,594 8,447,773 Parks and recreation 3,392,125 3,312,665 4,025,279 3,626,134 Accounting/finance 1,141,181 1,300,773 1,331,432 1,489,661 Community development 5,701,686 5,474,886 5,518,983 5,635,484 Public works 6,444,668 5,276,132 6,048,016 4,760,212 Health 3,743,887 4,006,009 3,687,213 3,872,347 Traffic and transportation 1,829,116 1,723,929 1,768,336 1,778,879 Multi-Purpose Events Center - - - - Capital outlay 2,413,607 753,120 3,809,884 4,852,858 Debt service- principal 1,472,149 1,537,350 1,612,677 1,690,000 Debt service - interest 1,037,896 939,934 866,006 875,128 Total expenditures 53,752,830 52,172,602 59,022,236 59,683,788 Excess of revenues over(under) expenditures (2,990,101) (968,049) (2,745,545) 425,945 Other Financing Sources (Uses) Transfers in 2,051,424 5,499,480 2,688,753 14,439,112 Transfer out (418,669) (982,275) (3,031,155) (9,310,328) Proceeds from general obligation bonds - - - 10,218,670 Payment to refunded bonds escrow agent - - - (3,025,400) Total other financing sources (uses) 1,632,755 4,517,205 (342,402) 12,322,054 Net change in fund balances $ (1,357,346) $ 3,549,156 $ (3,087,947) $ 12,747,999 Debt service as a percentage of noncapital expenditures 4.89% 4.82% 4.49% 4.68% 100 EXHIBIT 1-4 Fiscal Year 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 $ 41,798,664 $ 44,425,106 $ 45,512,949 $ 47,236,518 $ 50,228,509 $ 52,637,318 2,153,223 2,338,678 2,452,353 2,480,148 2,597,044 3,202,699 1,918,690 2,001,117 2,292,695 2,218,119 2,206,023 2,215,813 1,797,795 1,773,449 2,189,001 2,161,782 2,481,816 2,127,062 9,000,057 9,469,723 11,444,840 13,003,816 9,682,237 11,136,433 837,213 2,698,930 7,493,758 2,906,980 4,094,770 4,366,961 1,833,247 1,539,063 2,007,303 1,985,383 2,816,865 6,664,315 59,338,889 64,246,066 73,392,899 71,992,746 74,107,264 82,350,601 8,491,188 9,169,430 9,330,631 8,701,521 10,103,642 9,965,494 14,716,145 15,586,666 15,996,964 16,731,373 17,228,066 18,068,168 9,084,534 9,456,869 9,851,203 10,196,605 10,739,651 11,238,422 3,821,791 3,920,357 4,016,394 4,106,476 4,110,013 4,373,460 1,702,554 1,604,484 1,757,006 1,754,186 1,765,350 1,811,690 5,970,759 7,569,296 8,137,672 7,282,012 6,355,136 6,652,162 6,204,297 5,311,740 4,488,704 4,653,539 5,128,384 6,038,790 4,146,598 4,513,769 4,452,507 4,391,270 4,407,758 4,728,414 2,261,335 1,923,176 1,768,336 1,937,424 2,309,854 2,355,249 - 57,848 783,244 1,205,153 1,355,846 3,498,189 13,910,949 10,333,520 8,235,652 10,171,128 7,244,115 7,093,636 1,805,000 2,120,000 2,970,000 3,050,000 3,190,000 2,510,000 1,181,524 924,557 900,526 852,624 731,921 1,271,106 73,296,674 72,491,712 72,688,839 75,033,311 74,669,736 79,604,780 (13,957,785) (8,245,646) 704,060 (3,040,565) (562,472) 2,745,821 3,450,446 6,805,264 7,142,007 6,922,585 3,282,459 5,922,091 (1,436,580) (2,437,133) (6,393,643) (7,878,421) (2,227,586) (5,401,565) - 2,450,000 7,549,000 - - 21,702,048 - (2,450,000) - - - - 2,013,866 4,368,131 8,297,364 (955,836) 1,054,873 22,222,574 $(11,943,919) $ (3,877,515) $ 9,001,424 $ (3,996,401) $ 492,401 $ 24,968,395 5.03% 4.90% 6.01% 6.02% 5.82% 5.21% 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 1997-1998 $15,139,681 $14,280,125 $ 5,243,568 $ 916,330 $ 171,350 $ 191,736 $35,942,790 1998-1999 15,793,043 14,567,316 5,422,604 1,026,786 166,792 181,553 37,158,094 1999-2000 17,327,503 15,832,239 5,519,843 1,048,419 163,916 173,603 40,065,523 2000-2001 18,049,023 16,323,752 4,612,917 1,088,850 176,680 171,763 40,422,985 2001-2002 19,055,248 16,222,571 4,933,338 1,201,114 188,517 197,875 41,798,663 2002-2003 20,891,772 16,598,733 5,286,038 1,221,620 196,663 230,280 44,425,106 2003-2004 21,410,615 17,192,706 5,218,860 1,278,102 202,841 209,825 45,512,949 2004-2005 22,567,902 17,845,502 5,191,741 1,262,518 204,727 164,128 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 52,637,318 101 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 1997-1998 $2,145,423,750 $ 554,851,453 $2,700,275,203 $0.51284 $2,700,275,203 100.00% 1998-1999 2,237,301,030 595,201,382 2,832,502,412 0.51284 2,832,502,412 100.00% 1999-2000 2,448,370,999 605,524,662 3,053,895,661 0.55194 3,053,895,661 100.00% 2000-2001 2,550,564,079 622,493,821 3,173,057,900 0.55194 3,173,057,900 100.00% 2001-2002 2,671,429,859 667,334,298 3,338,764,157 0.55194 3,338,764,157 100.00% 2002-2003 2,775,175,780 652,625,915 3,427,801,695 0.55194 3,427,801,695 100.00% 2003-2004 2,901,708,013 629,284,576 3,530,992,589 0.59246 3,530,992,589 100.00% 2004-2005 3,047,463,928 632,056,253 3,679,520,181 0.59246 3,679,520,181 100.00% 2005-2006 2,992,717,987 726,512,178 3,719,230,165 0.59246 3,719,230,165 100.00% 2006-2007 3,208,236,037 744,353,082 3,952,589,119 0.59246 3,952,589,119 100.00% 102 EXHIBIT 1-7 CITY OF WICHITA FALLS, TEXAS DIRECT AND OVERLAPPING PROPERTY TAX RATES- LAST TEN FISCAL YEARS (UNAUDITED) Fiscal City of Wichita Burkburnett City View Iowa Park Wichita Falls Year Wichita Falls County I.S.D. (1) I.S.D. (2) C.I.S.D. (3) I.S.D.(4) Totals Tax Rates Per$100 Valuation 1997-1998 $ 0.51 $ 0.38 $ 1.30 $ 1.34 $ 1.25 $ 1.46 $ 6.24 1998-1999 0.51 0.38 1.49 1.41 1.30 1.50 6.59 1999-2000 0.55 0.38 1.49 1.60 1.24 1.50 6.76 2000-2001 0.55 0.40 1.59 1.69 1.40 1.54 7.17 2001-2002 0.55 0.40 1.61 1.69 1.40 1.54 7.19 2002-2003 0.59 0.42 1.63 1.69 1.61 1.56 7.50 2003-2004 0.59 0.45 1.64 1.69 1.58 1.56 7.51 2004-2005 0.59 0.46 1.64 1.73 1.58 1.56 7.56 2005-2006 0.59 0.46 1.63 1.75 1.58 1.56 7.57 2006-2007 0.59 0.45 1.50 1.60 1.45 1.39 6.98 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 103 EXHIBIT 1-8 CITY OF WICHITA FALLS, TEXAS PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO SEPTEMBER 30, 2007 2006-2007 1997-1998 Percentage Percentage Taxable of Total Taxable of Total Assessed Assessed Assessed Assessed Taxpayer Value Rank Valuation Value Rank Valuation Sikes Senter LP $ 54,110,143 1 1.16% $ - N/A 0.00% TXU Electric Delivery Co 40,617,599 2 0.87% 30,679,917 3 1.19% Wal-Mart 33,788,039 3 0.73% 11,035,565 6 0.43% Southwestern Bell 29,033,837 4 0.62% 44,111,410 2 1.71% Lowe's Home Center 13,215,404 5 0.28% 10,895,111 7 0.42% Cingular Wireless LLC 12,988,813 6 0.28% 15,774,600 4 0.61% HD Development Properties 11,952,464 7 0.26% - N/A 0.00% Kell West Regional Hospital 11,542,268 8 0.25% - N/A 0.00% Wichita Falls Clinic Real Estate Pa 11,109,762 9 0.24% - N/A 0.00% Time Warner Cable 9,812,987 10 0.21% - N/A 0.00% JMB Group Trust III - N/A 0.00% 45,329,282 1 1.76% ABB Control - N/A 0.00% 12,808,348 5 0.50% Deauville Partnership - N/A 0.00% 10,776,707 8 0.42% Panhandle Manufacturing - N/A 0.00% 9,668,197 9 0.37% Vetrotex Certainteed - N/A 0.00% 4,403,800 10 0.17% Totals $ 228,171,316 4.90% $ 195,482,937 7.57% 104 Wichita TEXAS\` 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 1997-1998 $ 13,848,037 $ 13,376,885 96.60% $ 421,473 $ 13,798,358 99.64% 1998-1999 14,526,149 13,952,221 96.05% 517,314 14,469,535 99.61% 1999-2000 16,115,557 15,690,461 97.36% 355,442 16,045,903 99.57% 2000-2001 16,791,261 16,365,706 97.47% 341,691 16,707,397 99.50% 2001-2002 17,635,425 17,210,516 97.59% 352,245 17,562,761 99.59% 2002-2003 19,439,511 18,962,880 97.55% 376,320 19,339,200 99.48% 2003-2004 20,039,039 19,646,529 98.04% 265,911 19,912,440 99.37% 2004-2005 20,919,473 20,494,272 97.97% 220,931 20,715,203 99.02% 2005-2006 22,034,951 21,612,888 98.08% 148,110 21,760,998 98.76% 2006-2007 23,421,270 23,043,185 98.39% - 23,043,185 98.39% 105 CITY OF WICHITA FALLS, TEXAS RATIOS OF OUTSTANDING DEBT BY TYPE - LAST TEN FISCAL YEARS (UNAUDITED) Governmental Activities General Combination Utility Fiscal Obligation Tax and Note System Year Bonds Revenue Bonds Payable Revenue Bonds 1997-1998 $ 16,850,000 $ - $ 5,027 $ 56,995,000 1998-1999 15,315,000 - 2,676 61,040,000 1999-2000 13,705,000 - - 58,695,000 2000-2001 19,215,000 - - 176,649,193 2001-2002 17,410,000 - - 172,349,440 2002-2003 15,290,000 - 54,561 168,368,339 2003-2004 13,060,000 6,810,000 234,186 144,747,898 2004-2005 10,725,000 6,095,000 178,149 126,538,189 2005-2006 8,270,000 5,360,000 120,443 124,824,242 2006-2007 7,390,000 25,396,016 61,093 123,869,328 106 EXHIBIT I-10 Business-type Activities Combination Total Percentage Tax and Note Primary of Personal Per Revenue Bonds Payable Government Income Capita $ - $ - $ 73,850,027 2.28% $ 709.27 - 902,629 77,260,305 2.12% 728.87 - 880,018 73,280,018 1.95% 683.72 - 856,671 196,720,864 5.25% 1,887.97 - 832,565 190,592,005 4.95% 1,823.08 - 807,674 184,520,574 4.70% 1,762.17 19,900,889 781,974 185,534,947 4.56% 1,769.98 33,975,588 755,438 178,267,364 4.16% 1,667.98 30,961,933 728,039 170,264,657 3.81% 1,581.87 27,864,844 699,748 185,281,029 4.01% 1,721.38 EXHIBIT I-11 CITY OF WICHITA FALLS, TEXAS RATIOS OF GENERAL BONDED DEBT OUTSTANDING - LAST TEN FISCAL YEARS (UNAUDITED) Governmental Activities Percentage of General Combination Actual Taxable Fiscal Obligation Tax and Value of Per Year Bonds Revenue Bonds Total Property Capita 1997-1998 $ 16,850,000 $ - $ 16,850,000 0.62% $ 161.83 1998-1999 15,315,000 - 15,315,000 0.54% 144.48 1999-2000 13,705,000 - 13,705,000 0.45% 127.87 2000-2001 19,215,000 - 19,215,000 0.61% 184.41 2001-2002 17,410,000 - 17,410,000 0.52% 166.53 2002-2003 15,290,000 - 15,290,000 0.45% 146.02 2003-2004 13,060,000 6,810,000 19,870,000 0.56% 189.56 2004-2005 10,725,000 6,095,000 16,820,000 0.46% 157.38 2005-2006 8,270,000 5,360,000 13,630,000 0.37% 126.63 2006-2007 7,390,000 25,396,016 32,786,016 0.83% 304.60 107 EXHIBIT 1-12 CITY OF WICHITA FALLS, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT (UNAUDITED) SEPTEMBER 30, 2007 Percentage Amount Gross Applicable Applicable General Bonded to City of to City of Debt(1) Wichita Falls (2) Wichita Falls Direct: City of Wichita Falls $ 13,630,000 100% $ 13,630,000 Overlapping: Wichita County 3,785,000 100% 3,785,000 Burkburnett Independent School District 14,571,553 25% 3,642,888 City View Independent School District 10,279,254 90% 9,251,329 Iowa Park Consolidated Independent School District 4,652,491 2% 93,050 Wichita Falls Independent School District 82,196,517 99% 81,374,552 Total overlapping 115,484,815 98,146,819 Total direct and overlapping bonded debt $ 129,114,815 $ 111,776,819 Sources: (1) Listed taxing jurisdictions (2) City of Wichita Falls Planning Department 108 CITY OF WICHITA FALLS, TEXAS COMPUTATION OF LEGAL DEBT MARGIN - LAST TEN FISCAL YEARS (UNAUDITED) Total assessed property value per 2006 tax roll $ 3,952,589,119 Maximum tax rate* $ 2.25/$100 Current tax rate for 2006 tax year .59246/$100 Maximum tax rate in excess of 2006 tax rate 1.65754/$100 Total legal debt margin $ 65,515,746 1997-1998 1998-1999 1999-2000 2000-2001 Assessed value $ 2,700,275,203 $ 2,832,502,412 $ 3,053,895,661 $ 3,173,057,900 Maximum tax rate $ 2.25/$100 $ 2.25/$100 $ 2.25/$100 $ 2.25/$100 Current tax rate .512838/$100 .512838/$100 .55194/$100 .55194/$100 Maximum tax rate in excess of current rate 1.737162/$100 1.737162/$100 1.69806/$100 1.69806/$100 Total legal debt margin $ 46,908,155 $ 49,205,156 $ 51,856,981 $ 53,880,427 There is no debt limit established by law. The limit is,therefore, governed by the City's ability to levy and collect taxes to service the outstanding indebtedness. The City's maximum legal tax rate established under its Charter is$2.25 per$100 assessed valuation. The 2006 tax rate is$.59246 per$100 assessed valuation. * Maximum tax levy established by City Charter 109 EXHIBIT 1-13 Fiscal Year 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 $ 3,338,764,157 $ 3,427,801,695 $ 3,530,992,589 $ 3,679,520,181 $ 3,719,230,165 $ 3,952,589,119 $ 2.25/$100 $ 2.25/$100 $ 2.25/$100 $ 2.25/$100 $ 2.25/$100 $ 2.25/$100 .55194/$100 .59246/$100 .59246/$100 .59246/$100 .59246/$100 .59246/$100 1.69806/$100 1.65754/$100 1.65754/$100 1.65754/$100 1.65754/$100 1.65754/$100 $ 56,694,219 $ 56,817,184 $ 58,527,615 $ 60,989,519 $ 61,647,728 $ 65,515,746 CITY OF WICHITA FALLS, TEXAS PLEDGED REVENUE COVERAGE -WATER AND SEWER REVENUE BONDS - LAST TEN FISCAL YEARS (UNAUDITED) Net Revenue Fiscal Gross Operating Available For Year Revenues (1) Expenses (2) Debt Service 1997-1998 $ 21,050,438 $ 12,868,869 $ 8,181,569 1998-1999 22,692,770 13,726,601 8,96E3,169 1999-2000 21,974,510 13,688,360 8,286,150 2000-2001 26,832,875 14,507,635 12,325,240 2001-2002 29,768,543 13,569,831 16,198,712 2002-2003 30,052,619 14,105,694 15,946,925 2003-2004 29,021,062 14,100,412 14,920,650 2004-2005 29,680,713 15,693,788 13,986,925 2005-2006 32,976,347 16,986,210 15,990,137 2006-2007 29,598,709 17,273,862 12,324,847 Notes: (1) Includes operating revenues exclusive of water sales to West Texas Utilities and capital contributions from developers of the Water and Sewer Fund (see Exhibit H-3). (2) Includes operating expenses of the Water and Sewer Fund exclusive of depreciation and amortization (see Exhibit H-3). (3) Excludes bond premium amortization. 110 EXHIBIT 1-14 Debt Service Requirement Principal (3) Interest Total Coverage $1,855,000 $ 2,674,570 $ 4,529,570 1.81 2,140,000 2,889,642 5,029,642 1.78 2,345,000 2,776,148 5,121,148 1.62 2,555,000 2,567,085 5,122,085 2.41 4,220,000 8,087,504 12,307,504 1.32 3,895,000 8,412,955 12,307,955 1.30 4,070,000 8,403,349 12,473,349 1.20 4,385,000 8,078,748 12,463,748 1.12 4,505,000 7,600,831 12,105,831 1.32 4,985,000 6,608,627 11,593,627 1.06 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) 1997-1998 104,121 $ 3,244,930,965 $ 31,165 35.4 13.1 16,382 4.4% 1998-1999 106,000 3,640,252,000 34,342 35.4 13.1 14,780 4.7% 1999-2000 107,178 3,754,338,162 35,029 35.4 13.1 14,084 4.4% 2000-2001 104,197 3,747,004,498 35,961 35.4 13.1 13,896 3.9% 2001-2002 104,544 3,849,710,474 36,824 35.4 13.1 14,059 6.3% 2002-2003 104,712 3,929,158,919 37,523 35.4 13.1 13,765 5.5% 2003-2004 104,823 4,067,057,042 38,799 35.4 13.1 13,857 3.6% 2004-2005 106,876 4,287,700,173 40,118 35.4 13.1 13,755 4.8% 2005-2006 107,635 4,464,967,184 41,482 35.4 13.1 13,743 4.2% 2006-2007 107,635 4,616,776,069 42,893 34.9 13.1 14,707 4.1% Sources: (1) City of Wichita Falls Planning Department for all years,except 2000-01 from U.S. 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 111 EXHIBIT 1-16 CITY OF WICHITA FALLS, TEXAS PRINCIPAL EMPLOYERS CURRENT YEAR AND EIGHT YEARS AGO(UNAUDITED) SEPTEMBER 30, 2007 2006-2007 1998-1999 (1) Percentage Percentage of Total of Total City City Employer Employees Rank Employment Employees Rank Employment Sheppard Air Force Base 12,887 1 16.93% 13,088 1 N/A Wichita Falls ISD 2,000 2 2.63% 1,700 3 N/A North Texas State Hospital 1,987 3 2.61% 1,055 6 N/A United Regional Health Care System 1,800 4 2.37% 2,100 2 N/A City of Wichita Falls 1,615 5 2.12% 1,394 4 N/A Wal-Mart-3 Locations 1,426 6 1.87% - N/A - Midwestern State University 1,225 7 1.61% - N/A - Howmet Corporation 1,000 8 1.31% 1,078 5 N/A James B. Allred Prison Unit 990 9 1.30% 837 8 N/A AT&T Wireless 836 10 1.10% - N/A - Cryovac Division-Sealed Air Corp. 746 11 0.98% 738 9 N/A Vetrotex America 725 12 0.95% 1,000 7 N/A Stanley Works, Mechanics Division - N/A - 550 10 N/A Totals 27,237 35.79% 23,540 0.00% (1) This data was not available for 1997-1998. Therefore the City used the 1998-1999 data. Sources: 1998-1999 data is from Texas Workforce Commission. 2006-2007 data is from Wichita Falls BC' &Texas A&M. 112 CITY OF WICHITA FALLS, TEXAS FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM LAST NINE FISCAL YEARS (UNAUDITED) 1998-1999 1999-2000 2000-2001 Administrative services 85.1 85.3 84.3 Police 260.5 265.5 264.5 Fire 155.0 155.0 156.0 Parks and recreation 70.6 70.9 71.1 Accounting/finance 19.5 19.5 21.5 Community development 34.6 35.8 35.9 Public works 80.0 80.0 79.0 Health 99.6 84.5 82.8 Traffic and transportation 47.0 50.0 51.1 Multi-Purpose Events Center - - - Water and sewer 159.9 160.6 162.6 Sanitation 92.9 88.9 82.9 Golf 19.5 18.6 20.4 Municipal Airport 1.0 1.0 1.0 Kickapoo Airport - - 5.3 Transit 19.7 18.6 19.6 Stormwater Drainage - - - 113 EXHIBIT 1-17 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 87.5 91.6 92.3 95.5 99.9 103.0 268.5 278.5 285.5 286.5 286.5 294.0 156.0 156.0 156.0 156.0 156.0 162.0 75.0 74.7 75.8 75.8 75.8 75.8 22.6 22.6 22.4 22.4 22.4 24.5 36.4 39.4 38.7 38.7 38.7 40.7 79.3 79.6 80.0 80.2 80.2 80.2 81.8 80.0 84.1 76.9 77.1 74.9 51.4 51.4 51.3 51.5 51.5 52.6 - - - - - 22.4 166.9 166.9 169.2 172.0 177.5 179.5 81.0 81.0 81.0 81.0 81.0 81.0 20.3 20.3 19.8 19.7 19.2 19.4 1.0 1.0 1.0 1.0 1.0 1.6 6.5 6.5 4.8 5.0 5.0 4.4 18.0 17.0 19.3 19.3 19.3 19.2 0.3 1.3 1.3 1.3 CITY OF WICHITA FALLS, TEXAS OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) 1997-1998 1998-1999 1999-2000 2000-2001 General government Building permits issued 2,535 7,172 8,769 10,541 Building inspections conducted - - - - Police Physical arrests 5,972 5,950 5,851 5,406 Parking violations 2,465 601 1,049 1,009 Traffic violations 7,625 8,659 20,805 17,553 Fire Emergency responses 6,299 6,667 6,912 7,484 Fires extinguished 752 747 832 864 Inspections 850 850 850 850 Refuse collection Refuse collected (tons) 73,880 72,371 71,971 75,229 Recyclables collected - - - - Library Volumes in collection 129,364 127,460 129,890 137,502 Total volumes borrowed - - - - Water New connections - - - 245 Water main breaks - - 869 996 Average daily consumption 26,733 27,391 24,591 24,280 (thousands of gallons) Wastewater Average daily sewage treatment - - 11,348 13,224 (thousands of gallons) Transit Total route miles 416,531 427,259 426,081 422,673 Passengers 181,603 171,945 200,237 223,502 Notes: Data was not available for all items for all years. The City will provide more data as it becomes available. 114 EXHIBIT 1-18 Fiscal Year 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 9,177 10,270 10,159 8,904 7,553 7,813 10,076 12,276 12,600 13,092 12,591 12,048 7,992 7,927 7,847 8,284 8,571 7,279 1,024 558 1,284 1,615 327 383 18,978 19,946 23,385 21,075 24,126 17,904 7,542 7,040 7,535 7,677 8,234 8,634 663 775 668 757 792 554 850 850 850 850 850 900 73,435 74,426 82,973 79,555 78,165 182,855 - - 1,926 2,328 2,018 19,034 150,686 157,641 210,976 225,941 172,391 179,728 - 292,359 304,644 295,088 293,884 302,565 292 327 335 312 325 310 795 737 691 573 881 741 21,700 21,900 20,400 22,100 23,680 19,936 12,560 12,348 11,026 12,404 11,097 13,930 424,115 407,121 - 450,938 435,446 476,758 196,217 245,908 - 247,303 229,601 294,670 CITY OF WICHITA FALLS, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) 1997-1998 1998-1999 1999-2000 2000-2001 Police Stations 1 1 1 1 Patrol units - - - - Fire stations 9 9 9 8 Refuse collection Collection trucks - - - - Other public works Streets(miles) 525 585 565 542 Streetlights 7,000 7,026 7,166 7,377 Traffic signals - - - - Parks and recreation Acreage 1,092 1,100 1,100 1,100 Playgrounds 36 37 38 39 Golf courses 1 1 1 1 Water Water mains(miles) 708 708 712 712 Fire hydrants - - - - Storage capacity(thousands of gallons) - - - - Wastewater Sanitary sewers(miles) 499 499 506 506 Storm sewers(miles) 40 40 41 41 Treatment capacity(thousands of gallons) - - - - Transit Buses 12 12 12 12 Notes: Data was not available for all items for all years. The City will provide more data as it becomes available. 115 co a) V N- N (D O N- ,— a) 6) O .- CO O N co a) N (A 0 V V A- 0 CO 0) N- U) O) N OD 0 LP) L V OO (fl A-- _- CO N N N _ (D X 0 W N N- V aD V lf) O N 0 ("- ,- O O O 0) OD 0 N CO a) N O O V co O O N O) 0 ,t- A- U7 O) <- N CC) O O LC) OD CO (4 �: O CO- CD N LO 0 0 N ' aO ' U) U7 1- O N- — OD ' ' co a) ' N a) N ,— O V CO N 0) A- O LC) aO N . N «) (n O r N V O O N • ' a) ' N a0 ,— O (n N- V ' ' CO A- ' N V C) A- 0 V I- 0 V ,I-- O U) r (() O N- N M O O N A- ' OD ' N O O) 0 CO A- 0 ' ' (D r- ' N CO U) (00 O N V CV 0 N U V O O n A- N CV (p O a) O } N 3. (n It .— ' co ' N N ' O A- A- U ' ' (.fl ' N N LO V O OD 0 N N O O N * Wichita i TEXAS 6 U. Graphics EXHIBIT J-1 CITY OF WICHITA FALLS , TEXAS CASH AND INVESTMENTS 180 _- --- —---- . 160 .. 140 y'' --. : 120 ,, o ! i E 100 O ON J J�. II 3 o 80 0 o 3, I 60 ;.;, ; iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiik 40 kw 20 2003 2004 2005 September 30, 2006 2007 (UNAUDITED) 116 EXHIBIT J-2 CITY OF WICHITA FALLS , TEXAS TOTAL BONDS PAYABLE 200 I ` Cl) , ... x; �' • • y a a ® ,. ? 'o d aaa. o � ✓$$$$$$$$$$$$$$$vvv 4 ' 7.•.d' v93d3�rd❖•:dd•::•` Y ¢ ';;ev::dddddM.•3ov .......p•. •• :avM: •S❖.M.•• ;•;; ° ❖❖ :a as.,v av .......S.......v.....,...................,....�.;..............z..............a °❖ ............................ .0.a. a❖a. • .. ..,I.,., _H.aan•4✓ :v•••53:;: .' ••.S�.M.. ; w..... , ,,.. .4,; a::4a .•• .v • • S ¢S o ..M _ vMvvvM°�a,°enMeanarM'•.d vvv•v•v•sv•Z• v•�r .m.vMaa anMda.-evvo svvv • ...*******A**********'..".v¢¢ va -°'sssiss°sv `� • •••• M :'• ••• ••• v4a 0,,M A A••M '• • ,vaa, • •. %3a�'as;0�vM'd•.3a•�.M. M.vvvv• —.AIM , • .. , :te °` v :rJas : a rav o�'v v3a, v3•?;3•»,,aax,avdgMMMo L, • dAM • 4..........,o•. :'da9 o aMd � . v .. a.vv . $ ` ,p, .M v :hd ¢.vM4 S• •�• ' a • ¢•. v has e .- Cim Sv `' yd M 3 vR .�0w W :' 3•' ¢ ••:••�:°°v3S vbSd a a aaa�vs a � •.:• v dvv¢asd ¢d.6d°d'd v . y :M. v4 aaMwv�.•d•`•vIv.W•❖ d' �VM s'°•v da:a;C:aq3";e•r,vtM•; v d vy•:a;::.AN v ° rva• `ear?? ? 55: :. •a ' .•vs •• • a:•• nv3 ; gL ;molVII • �a ` y4°w.v4y444 ¢ " v a° 338a ; ea vy ra � . v v• ” o :iwee'SSS:••: 1v v '$ i ✓o � e«*: d • v ev• v•.vvv.ov v .• v eAv * } o.v3VX,00vv ¢ .. ,, `v v 4 : °Sdy`Fa8 •v ?irk.e.d�¢ > aAss..¢i vSy33 v v A 3 , 3�� 3 ag sa •S� °°vv d Z¢v d ¢v °as vd ?a a •S4veva $4 v ¢i °a°O .A :•„° M *asy v d 3 ov$ av v di�• : ov ' . • a•Agdd'3avAMMvvwM .,. a S . .¢,,,„......„........,Ate,„*"...,..,....,..„.„...,..,. °440 :440 yy ? ¢ag¢a 0»vv vagM ¢ d a? ,S;; :;; 44 d.... ::,..4: ,3,... ; $1:a 04.44.: ¢dv ¢:* a $ a n :::::::.':::'::::$:: 44 •' A•` 3 ° yv' ¢3> .;;....... 4 :vvdvv yy3v4. d¢a : e v{•MA•. ¢ a b g•vMv ::s:.3 ¢; S 40'°4. 1 'vv .qd•: . d d4•••••v3svL 3o M�d ¢0• **** 444•: ::SS aSdv.v ,a,vva3¢�: ;••.d••Ay� a• aq a baa•A• ••••••d;d ov:44* ** vvvMWQvV ;;; ,. '� : a . d¢° MMV....... . 8 .aZd � v v ,,, ' 4'.'•�3fa.:::,aA°O;.¢a y•a. a•;. ':•:¢O•• L aa �• v °M ^A °w4 vwvvv dv. a a3Lv ww � aa ¢,¢�a v::• vvvvvwvr?a3 •s �a•avw : .WWA3v :: � • `.150 - M4R4 Nkv °a a dvvvSw•v,v,v .Ma a r y• � , • omm 2003 3 �ad9r: aa¢`32004 Le :¢....MANNAVA, OWOOVAMMAAA3• 2005 `0 2006 2007 September 30, (UNAUDITED) 117 EXHIBIT J-3 CITY OF WICHITA FALLS , TEXAS GENERAL OBLIGATION BONDS PAYABLE 25 20 VI I O I 15 -14; 711 C i as q I 0 • 3•, �s �I ...':. 5 < 0 2003 �- 2004 2005 September 30, 2006 2007 (UNAUDITED) I 118 EXHIBIT J-4 CITY OF WICHITA FALLS, TEXAS REVENUE BONDS PAYABLE 200 175 K 150 - •— _y8�'•y•r,v.yS,.�,.S•w'eO"B''o'm'3'':,�:��.v3..M. p�c.,a•aSe es v•evyvv �3�CSv oBJee.0 C9.e✓ev..e. ....✓..',..�. ' e.'.e.e.m, e• E �pyen L ee �: � � :� �.Sz:y �yy,y.�� =:viv� ;:•,,�,vvr$vy >' rZ, if.ow,:::: :edv:. ':v ` ��h .• i .✓✓ ---,. ,. .I,,,,, yc 100 .' ,`� ❖ ',,. ,` 'y'.:"tiSe'•y vs v• 0.a a:`:v`o• °�.9�' v�� I CU eA vwv dpy' • 75 vvtot:to `',Z .o v''vv O :,0 v° d:. o ew.�`^v`vevd �e3`evv. an�v•xb' d ov'yy i I �y�g � 've', $S. i 50 .....'..•` •.'.. .e vibe� •h°:•:::• :ee'•' e 4. • , j t kve;m3 L Ov... 3 e.ovv 2003 ' 2004 2005 _____ _____________ j September 30, 2006 2007 (UNAUDITED) 119 EXHIBIT J-5 CITY OF WICHITA FALLS , TEXAS GENERAL FUND EQUITY 20 18 = 16 j a 2003 2004 2005 September 30. 2006 2007 0Reserved/Designated OUntlesiynated EXHIBIT J-6 CITY OF WICHITA FALLS , TEXAS COMPARISON OF TAX LEVY AND COLLECTIONS „...i.i.i.:.:.!...i...:..i...i,,i 25 Cl) . .....i .sumumear •'•iiiii:itiiIiiiiii11411111....r...i.i.! 4 _ n ;Ii.11.ii.11 �� a 10 O i o 5iiii '-:44 1 il `. rya i.::....t.::::1.:•...:-.,,,,., l�7 ------1/ — :;:;:x /.....:. .::::1 `� �' 1999 r'`' 2000 2001 2002 �� Tax Levy 2003 2004 2005 Tax Collections Years Ended September 30, 2006 2007 O Tax Collections O Tax Levy (UNAUDITED) 121 EXHIBIT J-7 CITY OF WICHITA FALLS, TEXAS REVENUES BY SOURCE - FYE 9/30/07 Fines and forfeitures 2% Wa,• :0•V;VVVVMA•: WA _.• Charges for services 1.%%%%%%%%%%,..%.,.,.%.,.%.ti,.1 •••.'•••••••••••••�•••••••••••••••�••••S•.••.•••••••••••••••••••••••••••••• 35% 4 ti1L11�4�4�4�4�4�4�4�4�\�\?4�\�\�ti�\�•�•1•.. ••• '. ��4�.... O.• 4�'. •M1 �4 J1++1fyJLr1J1J1J1JM1J�IyJ�J�J1J1JM1J1rir1Jiry rL+�J4r•r•J•J•J•J•J•J•J•J•J•r•r•r•r•r•r• r.Jtirtiltil:rtiftifti•. .J•f1fM1rM1•1.1.1.1.4.4•M1•M1•1.4.4•M1•1.4• . •M1•4•M1•M1•4.1.1.1•L•1.4.4.4 �4�4�4�4�4�4�4�ti:ti:ti�til1�ti�ti:ti r:�� ' , '.. .J%r%r1r~J~ryr:r1r~r~ryr~ryryryryryriririr1ryr1ririr:ryryJ~lyr:r~r •.� F(O.. 1 1jM1jM11M1fM1•1r1r4r1r1r1r1r1r1r1r1r1r4r1r1r1r1r1r1r1r1r1 .yF S ryyF x^m B FF 4 1 1 M1 4 M1 L1Ljtijtijtijtijlfl.LltijLjti.tijtijtijtijtijti.ti.Ljtijtijtijtijti.tijtijtijhjl f'ri!�r�Y 1aYa 'S!' _ 8''O 4.4.4r4r4.4 4:.:y{.2...{..rr:d.{r1r1r4.4.4.4.Sr4r1rS.S.S.ti.{r.1.5.{.{. . f : F 2k o si1I • • x;:: fyfyfyfyl:J~J:l:J:l%Jul~J:f:J~J:J~f~fyr:J:r1fyJyr:i1i1f~f.r. :,:/.<i C,/� ,F«.F...NSF i 4r}rM1rM1r_ - ../ =� azf. fa,F'•^�'`,t: Y>'• .'. 4.4. ..F..•«� d xw. .M1•1.4.4-M1•M1•M1•4.4•M1•M1-4.4.4.4-M1•1.4.4.4.4.4.4.4•M1•4•M1•4.4.4.4.4.4.4.4 . 1.1•ti•ti•1.1•ti•ti•1.1.1•ti.1.1.1.1.1.1.1.1.1.1•L•1.1.1.1.1.1.1•L•1.1.1.1 _•• .r•r•r•r•r•r•r•r•r•r•r•r•r•r•r•r•r.r.r.r-r•r•r•r•r•r•r•r•r•r•r•r•r •••_� fifiJ:rlrlrM1r.r1r1r1r1?1r1r1r1rM1rM1rM1rM1rM1rM1rM1rlrM1r.rM1r4r1.1.1.M1.4.1.1.1. _ s9C_a„• / .�/....'..O'. f•J•Jirif.J•J•J•r•r.r.r.r.J~r.r.r.r.r.r.r.r~r~J:r•r•r•J•r•r•r•r•r )?;! _. J+ryJ1JyJ1J�J1JyJhJyJyJyJyr1ryryryryr1ryr1ryryryryryryr1rLr�r1ryr1riryryr. _ _ w•..,��, r r{r•{r r rrr • 5ti54:ti:ti:tilti:Llti:ti5ti�ti5ti5ti5ti5ti5ti:ti:ti5ti�ti5ti5ti:ti�ti�ti�ti:y:y:tillSti�1•\rM1 �+ TaxeJ jtij1:1j1r1r1 M1r1JLj M1.M1•M1•M1•M1�ti:y:llti:y:ti:y:ti:L:1.L•yjtij�ftijl`M1f4f1 •r•r•r•r•r•r•J•r•r•r•r•r•J•r•r •,4.4.4• 41% M1.M1.M1.1.M1.M1.4.4.4.M1.M1.M1.1.M1. M1 4 J r r Licenses and permits 2% • Intergovernmental ..L.R. Contributions 10% Miscellaneous 6% 4% (UNAUDITED) 122 EXHIBIT J-8 CITY OF WICHITA FALLS, TEXAS EXPENDITURES BY FUNCTION - FYE 9/30/07 Administrative Services Police 13% 13% Fire Debt Service �, A s,�s ,��,, s` -,'-. o �. +` .*....♦++..+ 8/o r+ ♦+++++++++++++....++i. yam,« �'�� '�`*"� `� � ,op•, ,o,,,•++0,,;.+++ Parks and Recreation Capital Outlay :'s+'y s� +i ♦♦ OOOO,pp.;.,..�.!+... o 5% >` .`,``>,><>` Accounting/Finance < 'iyiti1i:i�ii}•i'r'r..r r r r i;i"• r• .f.f�.i1V.itiiLiLitiitiiti.ti.ti.L.ti.ti.ti.:ti.ti.ti.ti•.:.:- 4::i:kr•r•r•r•r•r•r•r.r r r r \.ti.4.ti.ti.ti.ti.\. :.e:ti..ti \\\ r.r.r.r.r.r.r.r�}.r.r r r r r r r r r r MPECr1f1r�Jyryfyryryryr r r r r r • •rr: y rrLr L r1`;; \ g -- -, Community Development •yr,�r;r•r•r•r•r•r•r~•r•• •i•r•r•r•r•r•r•• Fk ,, .F 2.L.,,tic, .� Traffic and Transportatio 11% Health Public Works 3% 27% (UNAUDITED) 123 EXHIBIT J-9 CITY OF WICHITA FALLS , TEXAS GENERAL GOVERNMENTAL REVENUES (GENERAL FUND ONLY) 65 60 55 50 45 ia°. • acn r�� N 35 ' a �s'` s i secse� •s � • O a .• ••i yZ � VO 44'4:e:' -•• ° e......•:1 a4�eJQ.t .VJ e. O� O• e.,a4 as •. ,p` 11111111111111111111111311111111 i. :: •G6 • F.Q 20 ' s�• ;s ° ........my, e 14.114444 ,, % • >°15 :as. , ay3'yas , ca : 1:.:11111:::.:1!..11.111:::::41:Ififj.:::::1:.::::,,:: B�s•3•,s.,a. a pi,•"�° `'eyg�$beBe•Aae d•3•'�a >!ee• y a �e �F�•e°:ae. aeF .�.5'0'ed .•��F° S .•:.:1,••••1•;•:*:::$+III:*t:il'.I:r.".;:;•••••••ii:••••IA*:::).•••:4'1;:..4••;,t.••:;:v1:.11;:.1.1 1..*$:..it;***$'.I.4.1:1•:".•I's*:.1'14:4.11: 5 • a • • y �eeYS. v e.e • e .eea v itil 1 I.:i)i 1,1;1: ^•.••••••••••••4:,,,,....., , .X.:.:, .:: .1.1 i;4:,...1 p.a.tr::If..i,:x.:11.41:14.**1::1;ot...,.:1.14:1•.••.i 1.0..:**::.41:41...§.4;1 it*Ill 1998 >`' F 1999 2001 ---_/ � 2000 ° 2002 2003 2004 Years Ended September 30, %()F 2007 (UNAUDITED) 124 EXHIBIT J-10 CITY OF WICHITA FALLS , TEXAS GENERAL GOVERNMENTAL EXPENDITURES (GENERAL FUND ONLY) 60 55 50 ��4rr' m � •'k44d❖ rrrr �3:4k<�der3er*�� 4o•4004. i. � M..O.ma .rr O .' ••;dam Z44,;$ rra ?4 44 rre3rra ...4v+.w -- 45 0•;de+4'`❖'aa 4m❖.,0:40Y.•..;❖e❖•.•e.+p4'4ee..o:.4:•.0+.r v..:.•;+•eO.:. °'.0❖•`•'4•0a'0�•..•m•❖;,a•av•,..••3•:a .;;+:: 4.w••.e,0•;d...ve4.•..3;•4.•.O•w3.'4..r`.e 4.;.4...r•�,4ZS•❖v•,..•.•••.,.a..k:e .S m.e...: .:c e>4. •.•:3s:. -✓+,:a.d..d4•m•m`..•....%�...°`,0.'Z�.4:•.m�4�.�.•••❖3•a.r m�4 •:0 ..d +ay:k.4..;•a.+..vv;.... ;k,...✓..:•; ae`••'.:...'❖.•..,A..❖......•,. •d:•dv3•+,rdw..34oy'dC.',rrgr.r. - 'o..:4.:....•.. •r..••o.ae.rp+••++,...: 3?0 4 ° 4r d •,`,+ M 4?•.04e•.4 ,...4.+D .'s ❖:i•• .'?'..a. 4.?•:.ev•:,.❖44s:1v4 -. Z:•,v:::3�:r4C,•::3•'o:;-:::•ie3m,:r:::b: i4e-::❖i: ?::`:;•:+3S.- `•••43' �A„• 0,r '.d .•d'• ❖..'•.4r :•eeo4•d em 4v.•a••d' •d'a 4,.•4 - 3m9❖44 e3 � �` d ;;, .... . 3:;• •••••••••••• d3:34•Y''•'r 3r 44. 3.� ` :.' ':�� •40004 y3`?O e4.,:)..:4m4`a•t�:v::0.4❖3�pa.e O 4v '3mm.4m.✓.❖deem. 3o•v. mvme V40. 35 3: 0 02 >: s� •d •� � :•44•.r r .444 �❖m❖.❖.+. r.....44 .... :• • .❖4a p` +0dd. -n. b i. oe °:,3• . ............... : v:y` •; .:Sd4❖??: ❖..e.e :orraor•e.rA•••• r..mk4 44e❖0eAdd44 44 :ddd � .❖3•33•❖•• �7 y v3.f%�I{{%%�:r:: ,.. ...•r4emk❖ »m .v• v.• 4em• ..• . •33.. ..' . e C30 v • ................................. ero......:. ..... tea•r•43 . k.44v 4``C4e 4.hN.o4. . m e.. m .+ • s S�� yy��neev ................ ' 4 k: : p � 3i• �� 5.�.�a•..a;$ p:`4'.e:emr3: :'v: dm.V..:44 3✓a0.m.. 0••4❖°, ..r.4.4,.,>•.mm .�. k•3.'.:.•' A<.4. r...kr.p: s: d :...k.. .• k'00v:d.e•.d44k+.. �3;44 Y✓f 44.• ..•a '' : ?..4° v:: {a $' �S•..•.r`k L- 25 ,.a..k•0d. -.....e .3 .• d..: e44v.�4m❖a• .................................. ...�$e raeevs• dd...`rr :A+❖k• :❖ y+.4:v3 e • 44 v.43w.o,4..,,.•., .n........,, e4O..k•e,F .�r d .:v?$.,.d3:•:, S3k+• k erk .. ..•. .4+ .kev . my ? : ....40G , ::aemarrrr. ..: .a .?4. .•.rra. • •.......:.•v..,, .v..4m rr: • am❖r a4v.a❖+:Jaa mama. .a. a..ra�• r•ee444samra. w< 4+'�44mw: 20 � er .••••ddd•'•: 0. • .edSdeeS❖:d 4J ❖ 333.m. 4. r 3�d•A....::: mamd••••• _wee:k ❖•. +....+.•+•.•+•.•.•." :N.: ;•:•;•:❖34e:: 6. e .•r•.rrrrr 'a• 8. r `':33 0•: .r 4� de.e m' .m.`.eeeevae •.�0•we0a :m.a �d 0�m.+.❖.•.44eee .aam .B.e 44e. xe'e:. s,%0©go..•3 3.; - .e• e.... e v e.e,.4;. a3v.••3;.;.;.;.;.;.3;. 4. 4. 3So.>3: 3`��:: ••;•? 4 e0 4. a,,.33 0..,.,.,.,.,..,. 444� u:` :•°rr. ✓o�� ed �; eri; e: .,,,,,,,.4.0.;.: e�.e4e•. :Se❖.•.v.❖.`.`.ee 4 44 40,0 :: ...................................:• ,.• _:e�.•+.++++•+' aa•r 444a'3k4v.;. 4ee;❖.X.:•`:, ., e '✓.3,., .+ � ''• -44.�❖.• F';'•'•'•'•':+'•+o.;'' 4440.;:•3:•0o,:;3Y e 4 ddde40 L330.asdeq.. `� ..... r'r?'%o• yy44k"✓•y3:,,,, 'ram•444.ay.... •: k4 444e0 ,•.•,3•,•,•,od. „r +'`4.4 .'�. ...... dd4 ❖?•.:4: :d❖ r•.:; ❖k4,4•4 4'+44 �`::::;:.44va: M.....a.••... C .a4 ...............• ' , a ••i:•••••••; 3m••••-•4•+•43ee. re x �� ee. re❖3333 4 2544 ar .4mR.•...•..a., 3•,•'04v�•:`5.:.❖:•: ad❖:❖h:•❖.o: 0 4va`.`.•.`.v.❖.❖.• ..a•a..... d3?m m3••,a..4 :•eJ'::':❖::: 3:• a7.❖.•.•::..+••4 3.N.O•.`. aOe•.,e. .� 10 ❖: :ddd❖Sc4;n •• ay.: 40rnenve•. 44 .,.,o:�};4.; -r444:SvIi::::tiSS:} 4h'44vae`.•.rreev.• .••••••✓a•. ❖Y�3d`S'•d;:;:::;t �e e%✓'•:::::'••,v:::;1 4aoo•.v....rra 4440❖o.•.•a r.••4oe• 44m.444e ❖a✓e�$•3;$❖ ................. -4.;; :•evra44• :•.3:• a.... -ke: 4•e:•.. 2?e3?:s:}::::i}i::f odd:::::.•errs o•.o• '.:ddo3��4?::: •a•. .4a�.• .e:•• •••••••`':• •.rra`.••.••+.+:..•••••••• 44...•.•.•..•.•.•.•:•..•• ,...............`` ":ys'�,!!"'e ::4�•:::4❖F .v.• v.0•.o❖.o4v.•.•ne•: 4e4r v.0..4.,. d.•..,3';.,.,.a44k. 4+•••..•+. . .................... 4d ...... . .•❖3.ae`4'J••a :•:❖rr:0: 4444'.•O ❖.w?44 •y k4• :a•••♦ rr 4`••O rraM ❖ad .. IL :•:•.3a.4,••,e•❖; . .e❖� 'e. ee:•3 ..,., 43:•0. � .e e4.;v„✓ ... 043:•:` .$ - :dde❖3:$ rv.e'- ::+: e ,.ram•• ❖• 4 _ 4.•.•.v e4 W,.;:;r.�,.' :':va:.e •0,444'�•••Rw{.,� 4434r44r44. y :3�v4e 4•0`i •'•4••4•+e •.4...p4m d 1*.ii nilinlit •a {vy❖'44333a 1999 2000 2001 `w 2002 2003 �_.. 2004 Years Ended September 30, 2005 2007 (UNAUDITED) 125