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2003 Comprehensive Annual Financial Report Comprehensive Annual Financial Report City of Wichita Falls, Texas 77----186t82 1;ifitri to It 410,44,, eS For Year Ended September 30, 2003 CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2003 ISSUED BY: DEPARTMENT OF FINANCE Wichita CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2003 TABLE OF CONTENTS Exhibit Page INTRODUCTORY SECTION Letter of Transmittal i-vi GFOA Certificate of Achievement vii Organizational Chart viii List of Principal Officials ix FINANCIAL SECTION Independent Auditor's Report 1-2 Managements 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 Net Assets A-10 24 Notes to the Financial Statements 25-58 REQUIRED SUPPLEMENTARY INFORMATION: Budgetary Comparison Schedule-General Fund B-1 59 Notes to the Required Supplementary Information 60 Texas Municipal Retirement System -Analysis of Funding Progress - Last Ten Plan Years B-2 61 Wichita Falls Firemen's Relief and Retirement Fund -Analysis of Funding Progress B-3 62 CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2003 TABLE OF CONTENTS (CONT'D.' Exhibit Page COMBINING FINANCIAL STATEMENTS: Nonmajor Governmental Funds: Combining Balance Sheet C-1 63 Statement of Revenues, Expenditures and Changes in Fund Balances C-2 64 Nonmajor Enterprise Funds: Combining Statement of Net Assets D-1 65 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets D-2 66 Combining Statement of Cash Flows D-3 67-68 Internal Service Funds: Combining Statement of Net Assets E-1 69 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets E-2 70 Combining Statement of Cash Flows E-3 71 Component Units: Combining Balance Sheet F-1 72 Combining Statement of Revenues, Expenditure and Changes in Fund Balances F-2 73 SUPPORTING SCHEDULES: Combined Schedule of Bonded Debt and Interest Maturities G-1 74 Combined Schedule of Bonds Payable G-2 75-78 Debt Service Coverage— Revenue Bonds G-3 79 Capital Assets Used in the Operation of Governmental Funds—Schedule By Function and Activity G-4 80 Capital Assets Used in the Operation of Governmental Funds— Schedule of Changes By Function and Activity G-5 81 Golf Fund —Capital Assets and Accumulated Depreciation G-6 82 Municipal Airport Fund —Capital Assets and Accumulated Depreciation G-7 83 Kickapoo Airport Fund —Capital Assets and Accumulated Depreciation G-8 84 Transit Fund —Capital Assets and Accumulated Depreciation G-9 85 Sanitation Fund—Capital Assets and Accumulated Depreciation G-10 86 Water and Sewer Fund —Capital Assets and Accumulated Depreciation G-11 87 Stormwater Drainage Fund — Capital Assets and Accumulated Depreciation G-12 88 Fleet Maintenance Fund —Capital Assets and Accumulated Depreciation G-13 89 Duplicating Services Fund —Capital Assets and Accumulated Depreciation G-14 90 Employee Benefit Trust Fund—Capital Assets and Accumulated Depreciation G-15 91 Wichita Falls Economic Development Corporation —Capital Assets G-16 92 CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2003 TABLE OF CONTENTS (CONT'D.l Exhibit Page STATISTICAL SECTION (UNAUDITED) General Governmental Expenditures by Function (General Fund Only)— Last Ten Fiscal Years H-1 93 General Governmental Revenues by Source (General Fund Only)— Last Ten Fiscal Years H-2 94 Property Tax Levies and Collections— Last Ten Fiscal Years H-3 95 Assessed and Estimated Actual Value of Taxable Property— Last Ten Fiscal Years H-4 96 Property Tax Rates and Tax Levies— Direct and Overlapping Governments— Last Ten Fiscal Years H-5 97 Ten Largest Taxpayers H-6 98 Special Assessment Collections (Capital Improvement Assessments Fund)— Last Ten Fiscal Years H-7 99 Computation of Legal Debt Margin H-8 100 Ratio of Net General Bonded Debt to Assessed Value and Net General Bonded Debt Per Capita— Last Ten Fiscal Years H-9 101 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures— Last Ten Fiscal Years H-10 102 Computation of Direct and Overlapping General Bonded Debt H-11 103 Revenue Bond Coverage—Water and Sewer Revenue Bonds— Last Ten Fiscal Years H-12 104 Demographic Statistics— Last Ten Fiscal Years H-13 105 Property Value, Building Permits and Bank Deposits— Last Ten Fiscal Years H-14 106 Miscellaneous Statistical Data H-15 107 Schedule of Insurance Coverage H-16 108-112 Graphics: Cash and Investments I-1 113 Total Bonds Payable 1-2 114 General Obligation Bonds Payable 1-3 115 Revenue Bonds Payable 1-4 116 General Fund Equity 1-5 117 Comparison of Tax Levy and Collections 1-6 118 Revenues By Source— FYE 9/30/03 1-7 119 Expenditures By Function — FYE 9/30/03 1-8 120 General Governmental Revenues (General Fund Only) 1-9 121 General Governmental Expenditures (General Fund Only) 1-10 122 Wichita 1 INTRODUCTORY SECTION Wichita March 5,2004 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, 2003. The purpose of this report is to provide the City Council,City Manager,citizens and other interested parties with detailed information concerning the financial condition of the City of Wichita Falls. In addition, this report provides assurance that the City presents fairly its financial position as verified by independent auditors. COMPREHENSIVE ANNUAL FINANCIAL REPORT The CAFR of the City of Wichita Falls, Texas, for the year ended September 30, 2003, 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 Mathis,West,Huffines&Co.,P. C.,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. This year's CAFR implements GASB Statement No. 34 which changes the governmental financial reporting by incorporating new government-wide financial statements. The Finance Department believes that this new presentation will provide better information to users of the report. The new reporting model requires that management 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). This transmittal letter is designed to complement the MD&A and should be read in conjunction with it. The MD&A can be found immediately following the independent auditors' report. The CAFR of the City of Wichita Falls, Texas, is reported in three sections; introductory, financial and statistical. The introductory section, which is unaudited, includes this transmittal letter, the GFOA Certificate of Achievement for Excellence in Financial Reporting, the government's organizational chart and a list of principal City officials. The financial section contains the independent auditors' report, MD&A, financial statements and related notes,required supplementary information, and combining fund financial statements and schedules. The statistical section includes selected financial and demographic information,generally presented on a multi-year basis. 1300 7th Street P.O.Box 1431 Wichita Falls,Texas 76307 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 and is equidistant from Dallas and Oklahoma City, approximately 125 miles. 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. Allred Prison and Sheppard Air Force Base are also large employers located within the city. The City has a Multi-Purpose Events Center, which includes a coliseum,exhibit hall,and an agricultural arena/show barn. The 2003 population for Wichita Falls is estimated at 104,712, an increase of .49% over the 2000 Census estimates, and an increase of 8.78%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. In addition, the City provides water, sewer, sanitation and transportation services for its citizens. ECONOMIC CONDITION AND ACTIVITY 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. Seven 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. Although 2003 was not an extremely strong year for major industrial development activities in Wichita Falls, there were a few developments that are worthy of note. The City undertook a major industrial initiative with the development of a new business park in the southeastern portion of the city. Approximately $1.5 million of 4A Economic Development Sales Tax Funds are earmarked for land acquisition, site improvements, and marketing efforts to attract industry to this area of Wichita Falls. The City and Board of Commerce and Industry were also instrumentally involved in expansions ii at the Wichita Clutch facilities, Cryovac Corporation, and Pratt and Whitney Canada, all of which announced plans to expand their operations and create new jobs in the community. Residential and commercial construction activity continued to remain strong. The total value of new residential construction permits for the 2002-03 fiscal year was $52,152,358, which is an increase of $15,916,671, or 43.93% over the prior year. Commercial real estate transactions and new construction over the last year have also been extremely healthy. Although the value of building permits for commercial construction and expansion decreased by 1.76% from the prior year, the total value remained strong at$54,871,098. The following entities announced expansion, new construction or consolidations in excess of$1,000,000 in value during the 2002-03 fiscal year: • North Texas Neurology (Phase II). A total of 15,148 sq. ft. addition with an estimated cost of $1,668,147. • Grace Church. A total of 56,511 sq. ft. with an estimated cost of$4,500,000. • United Supermarket. A total of 39,593 sq. ft. with an estimated cost of$2,947,487. • The Home Depot. A total of 121,247 sq. ft. with an estimated cost of$3,500,000. • Crescent Apartments. A total of 37,708 sq. ft. with an estimated cost of$1,623,329. In addition, the City of Wichita Falls is in the process of constructing a Public Safety Training Center, which is 27,736 sq. ft. with an estimated cost of$3,885,000; and new buildings at the Cypress Water Treatment Plant totaling 37,500 sq. ft. with an estimated cost of$14,177,000. Another indicator of performance of the local economy is the retail sales tax. The local sales tax rate in the city is two percent. Statewide, cities experienced a growth in sales tax collections of 1.29% for the 2002-03 fiscal year. By comparison, retail sales in Wichita Falls grew by 2.32% during the same period, resulting in an increase in revenue of$499,597. MAJOR INITIATIVES For The Year. The City Council has identified programs to meet citizens' requests for services and to safeguard the environment. During this fiscal year, 4B Sales Tax Corporation funds were expended for the construction of a police-fire training center to replace existing facilities that are obsolete and inadequate. The building is a state-of-the-art training center that will improve coordinated training efforts in the City's public safety programs. The facility will include classrooms, a physical fitness area, fire apparatus bay, storage areas for training materials, and limited office space. Additionally, the facility will provide space to house a new public safety dispatching area. Construction is underway, and final completion is expected in the summer of 2004. Construction cost estimates are projected to be $4.6 million. In addition, 4B Sales Tax Corporation funds were expended for the construction of a new training field for the Fire Department. This facility was completed at a cost of$1.1 million and will provide a multitude of amenities designed to simulate fires and other incident responses. Another significant public safety related project funded with 4B Sales Tax funds is the Public Safety Communications Project. Consultants have been retained to assist in the planning and acquisition of an integrated public safety communication system including two-way radio, computer-aided dispatching and records management computer systems. Proposals for both the two-way radio and computer systems have been received and the City is currently in contract negotiations for these iii projects. The installation of this equipment is expected to cost approximately $9 million, much of which is planned to be funded with debt financing. Work continues on the City's major water system improvement projects. In September 2001, the City issued $118,770,000 of Water and Sewer System Revenue Bonds for improvements to the system designed primarily to meet regulatory treatment requirements of the EPA and TCEQ and to expand water supply and treatment capacities. Specific projects to be completed include (1) Kemp Reservoir Pump Station and Pipeline; (2) 10 Million Gallon Per Day Reverse Osmosis Facility; (3) Cypress Water Plant High Service Pump Station and Storage; (4) 10 Million Gallon Per Day Conventional Treatment Expansion at the Cypress Water Plant; (5) Secondary Reservoir and Pump Station Expansion; (6) Jasper Water Treatment Plant Modifications and Improvements; (7) River Road Advanced Water Treatment Facility; (8) Distribution and Elevated Storage Improvements; and (9) New Water Plant Administration and Maintenance Facilities. Needless to say, these improvements will dramatically improve the City's ability to supply and treat water for the citizens of this community. Debt service payments began during the 2001-02 fiscal year at $7.2 million. The average annual debt service for the life of the bonds is $8.9 million. Water rates were increased in October 2000, February 2001, and October 2003 to generate revenues sufficient to finance this new debt service obligation. Finally, in January 2003, the Kay Yeager Coliseum opened for business. This $20 million facility was the third phase of the Multi-Purpose Events Center and was financed with the use of approximately $8 million of existing cash reserves in various City funds, $5 million in private contributions, and $7 million in bond proceeds. The debt service for the bonds is being paid annually with funds from the Hotel/Motel Tax Fund, Tax Increment Financing Fund and contractual payments from the West Texas Utilities Company. For The Future. Financial planning is complete and renovation has begun to adaptively reuse the former Holt Hotel property located in the downtown district. Through a public/private partnership, this abandoned historic structure is being completely renovated into an upscale apartment complex. The ultimate owner of the complex will be the Wichita County Heritage Society, but the facility will be developed and managed by a professional management firm. The financial plan includes support from local foundations, City support from Community Development Block Grants and Tax Increment Financing Funds, historic preservation tax credits, an Economic Development Initiative Grant from the federal government, and a private bank loan. Overall, this public/private partnership project is estimated to cost approximately $6 million. Street milling and overlay continues to be a high priority of the City Council. In the last two fiscal years, funds have been appropriated to increase the program from 8 miles of roadway overlay to approximately 21 miles each year. This increased funding should provide sufficient funds to address street overlays on a fifteen year cycle. A project is underwayto make significant improvements to Kickapoo Downtown Ai ark. The g P P Airpark. will include the reconstruction of the runway, taxiway and connectors; extension and widening of the runway; improvements to the runway extended safety area; storm water drainage improvements; runway lighting enhancements; and airfield signage improvements. The cost for Phase I of these improvements is estimated to be $3.4 million, 90% of which will be funded with Federal Aviation Entitlement Funds. The remaining 10% will be paid for from reserve funds in the City's two airport funds. A substantial flood control project to address flooding in the Faith Village Subdivision is currently underway. In July 2003, Phase I of this project was approved by the City Council in the amount of $2.4 million. In addition, City Council recently approved funding to begin engineering design for iv • Phases II and III. Much of this project will be funded with proceeds from the Storm Water Utility District that was established in May 2001. In addition, capital project funds remaining from previous bond issues for the Holliday and McGrath Creek Flood Control Projects, will be used for construction of Phases II and III. 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, 2003, 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 2002-03, 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. v OTHER INFORMATION Independent Audit The City Charter requires an annual audit of the books of account, financial records, and transactions of all administrative departments of the City by Certified Public Accountants. The accounting firm of Mathis, West, Huffines &Co., P.C. 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-33, 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, 2002. 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 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, 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 Wichita Falls' elected officials and City Manager, who remain committed to fiscal integrity and financial leadership, is likewise appreciated. Respectfully submitted, Jim Dockery Director of Finance vi 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, 2002 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. ksl*t &•1Z's Z Hues `"o°" President CORrORATUN S� iginr de040 Executive Director vii J CITY OF WICHITA FALLS ORGANIZATIONAL CHART WICHITA FALLS CITIZENS I I CRIZENS CITY COUNCIL CITIZENS COMMISSIONS BOARDS I • I I I I I MUNICIPAL I CITY MANAGER 1 I CITY ATTORNEY J I CITY CLERK 1 JUDGE I I I I I TRAFFIC AND FINANCE ASSISTANT CITY ADMINISTRATIVE 1 IIOUSING& TRANSPORTATION DEPARTMENT MANAGER SERVICES COMMUNITY HEALTH DEPARTMENT DEPARTMENT DEVELOPMENT DEPARTMENT FINANCE-PUBLIC 1 I-'• d AIRPORT F TRANSPORTATION ACCOUNTING 1 COLLECTION ON 1 CENTERH COMMUN CATION M.L.K PUBLIC / 1 COMPREHENSIVEF,i BUILDING 4 PLANNING INSPECTION ENVIRONMENTAL LITY III !!! 111 �ADMINISTRATlONF HEALTH i 111 ARMERS I TRAFFIC CENTRAL j1 PURCHASING ORMTION LIBRARY I FMA I HOUSING F. ENFOCODE RCEMENT P�NURSO TI H POLLUTION I ENGINEERINGSERVICES SYSTEMS 11 !!! I AUDITORIUM I BUILDING MAINTENANCE I PROPERTYH TRANSPORTATION 1 MANAGEMENT PLANNING I PERSONNEL i I DUPLICATING 1! SERVICES GOLF I COURSE I MUNICIPAL 1{ COURT 1 • I POLICE FIRE PARKS AND PUBLIC WORKS/ DEPARTMENT DEPARTMENT IRECREATION PUBLIC UTILITIES 11 FIELD 1 �I 1` DEPARTMENT I DEPARTMENT SERVICESCHNICAL SERVICES 1 I SUPPRESSION 1 1 INVESATIGATION ATION ON J ( RECREATION MAINTENANCE RKS I ENGINEERING SANITATION IADMINISTRATIONJ I CEMETERY J ( STREET MAIN'I'ENANCF.1H UTILITIES i m - = - III CITY OF WICHITA FALLS, TEXAS LIST OF PRINCIPAL OFFICIALS SEPTEMBER 30, 2003 Title Name Mayor William K. Altman Mayor Pro-Tem Johnny Burns City Council Member James Esther, Jr. City Council Member Linda Ammons City Council Member Mike Norrie City Council Member Harold Hawkins City Council Member Arthur Bea Williams City Manager James Berzina City Attorney Bill Sullivan Municipal Court Judge Larry Gillen City Clerk Lydia Torres Assistant City Manager Matt Benoit Assistant City Manager- Director of Aviation, Traffic and Transportation Darron Leiker Director of Finance Jim Dockery Director of Community Development David Clark Director of Public Health Barbara Clements Director of Administrative Services Jan Stricklin Police Chief Ken Coughlin Fire Chief Harold Lindsey, Jr. Director of Parks and Recreation Jack Murphy Director of Public Works and Public Utilities Scott Taylor, P.E. ix !"P FINANCIAL SECTION INDEPENDENT AUDITOR'S REPORT — �— MATHIS, WEST, HUFFINES & CO., P.C. Capital center • Indiana at Seventh Certified Public Accountants P.O.Box 97000 • Wichita Falls,Texas 76307-7000 (940)723-1471 • FAX(940)723-2251 Email mwhamwhoc.com • www.mwhpc.com 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, 2003, 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 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, at September 30. 2003, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended, in conformity with accounting principles generally accepted in the United States of America. As explained in Note 1.A, the City has implemented a new financial reporting model, as required by Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis — for State and Local Governments, GASB Statement No. 37, Basic Financial Statements — and Management's Discussion and Analysis— for State and Local Governments: Omnibus— an Amendment of GASB Statements 21 and 34, and GASB Interpretation No. 6, Recognition and Measurement of Certain Liabilities in Governmental Fund Financial Statements, as of October 1, 2002. Furthermore, the City revised its note disclosures, as required by Statement No. 38, Certain Financial Statement Disclosures. 1 In accordance with Government Auditing Standards, we have also issued under separate cover our report dated January 29, 2004, 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 grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. The Management's Discussion and Analysis and the budgetary information identified as Required Supplementary Information in the table of contents is not a required part of the general purpose financial statements, but is supplementary information required by the Governmental Accounting Standards Board. 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 combining financial statements and the supplementary information listed as supporting schedules in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements of the City of Wichita Falls, Texas. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The supplementary information in the statistical section as listed in the table of contents has not been audited by us, and we do not express an opinion on it. "lAtutttA5, (,Je9f, MATHIS, WEST, HUFFINES &CO., P.C. Wichita Falls, Texas January 29, 2004 2 1 MANAGEMENT DISCUSSION & ANALYSIS Wichita TE \ City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2003 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, 2003. 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 on pages i-vi of this report. This discussion and analysis does not include comparative data for prior years,as this information is not available for the first year of implementation of Governmental Accounting Standards Board Statement No. 34. Future years will include, when available, a comparative analysis of government-wide data. Financial Highlights The assets of the City of Wichita Falls exceeded its liabilities at September 30, 2003, by $201,067,551 (net assets). Of this amount, $30,670,291 (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$12,496,915. This increase can be attributed primarily to a contribution from the private sector to assist with the cost to construct the Kay Yeager Coliseum; transfer of funds from the Wichita Falls 4B Sales Tax Corporation to a capital projects fund to construct the Public Safety Training Center and Fire Drill Field; significant improvements to the City's Water Utility System; increased landfill revenues; revenues in the Storm Water Drainage Utility; and investment income primarily from bond proceeds being used for major water system improvements. At September 30, 2003, the City's governmental funds reported combined ending fund balances of $20,893,166. Of this amount, $15,737,824, or 75.33%, 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 $8,368,357,or 17.20%of total General Fund expenditures. The City's total debt decreased by$6,101,101 during the current fiscal year. The primary reason for this decrease is because the City retired $4,570,000 of outstanding principle of General Obligation Bonds and $3,981,101 in Water and Sewer Revenue Bonds. It should be noted, however, that $2,450,000 of the General Obligation Bonds that were retired, were refunded at lower interest rates. 1300 7th Street P.O.Box 1431 Wichita Falls,Texas 76307 City of Wichita Falls, Texas Management's Discussion and Analysis September 30,2003 (continued) Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Wichita Falls' basic fmancial statements. The new reporting focus is on the City as a whole and on individual major funds. It is intended to present a more comprehensive view of the City's financial activities. The basic financial statements are comprised of three components: 1) government- wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report contains other supplementary information in addition to the basic financial statements. Government-wide Financial Statements The government-wide financial statements include the Statement of Net Assets and the Statement of Activities. These statements are designed to provide readers with a broad overview of the City's finances 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 this statement for some items that will only 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 two types: Governmental activities — Most of the City's basic services are reported here, including police, fire, parks and recreation, public works, health, traffic and transportation, community development and planning, and general administration and finance. Property taxes, sales taxes, franchise fees,and various grant funds provide the majority of financing for these activities. Business-type activities—Activities for which the City charges fees to customers to pay most or all of the cost of a service it provides are reported as business-type activities. The City's business-type activities include water and wastewater treatment and distribution, solid waste collection and disposal, municipal airports, transit system, storm water drainage improvements, fleet maintenance services,and the municipal golf course. The government-wide financial statements are found on pages 13-14 of this report. 4 City of Wichita Falls,Texas Management's Discussion and Analysis September 30, 2003 (continued) Fund Financial Statements The City of Wichita Falls, like other state and local governments, uses fund accounting to provide more detailed information about the City's most significant funds, not the City as a whole. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Some funds are required to be established by state law or bond covenants. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental Funds — These funds are used to account for the majority of the City's activities, which are essentially the same functions reported as governmental funds in the government-wide statements. However, unlike the government-wide financial statements, governmental fund financial statements are reported using an accounting method identified as the modified accrual basis of accounting, which measures cash and all other financial assets that can be readily converted to cash. The governmental fund statements focus on near-term inflows and outflows of expendable resources, as well as expendable resources available at the end of the fiscal year for future spending. Such information may be useful in evaluating a government's near-term financing requirements. The focus of the governmental funds financial statements is narrower than that of the government-wide financial statements. Therefore. it is useful to compare the information presented for governmental funds with similar information presented for governmental funds 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 12 individual governmental funds. Information is presented separately in the governmental fund Balance Sheet and in the governmental fund Statement of Revenues and Changes in Fund Balances for the General Fund,which is considered a major fund. Data for the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the non-major governmental funds is provided in the form of combining fund statements elsewhere in 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, municipal golf course, transit operations, and storm water utility district. 5 City of Wichita Falls,Texas • Management's Discussion and Analysis September 30,2003 (continued) • 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 financial statements. Proprietary funds financial statements provide the same type of information as the government- wide financial 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 operations, and the sanitation operation, which 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. Fiduciary Funds-Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City's own programs. The accounting method used for fiduciary funds is much like that used for proprietary funds. Agency funds are a component of fiduciary funds and are used to account for situations where the City's role is purely custodial, such as receipt, temporary investment and remittance of fiduciary funds to individuals, private organizations or other governments. The City maintains one fiduciary fund. This fund is an agency fund used to account for property that has been abandoned or unclaimed pending escheatment to the State of Texas. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding or the data provided in the government-wide and fund financial statements. The Notes to the Financial Statements can be found on pages 25-58 of this report. Government-Wide Financial Analysis The City's combined net assets were $201,067,551 as of September 30, 2003, an increase of $12,496,915, or 6.63% from the prior year. An analysis of the net assets of the City can be made from the Tables below of Net Assets and Changes in Net Assets. The largest portion of the City's net assets, $154,316,173, or 76.75%, 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, $16,081,087, or 8.00%, represents resources that are subject to external restrictions on how they may be used. The remaining balance of netassets, $30,670,291 may be used to meet the government's ongoing obligations to citizens and creditors. 6 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2003 (continued) Net Assets Governmental Business-type Activities Activities Total 2003 2003 2003 Current and Other Assets $ 30,381,226 $ 166,427,365 $ 196,808,591 Capital Assets 79,922,910 130,158,412 210,081,322 Total Assets 110,304,136 296,585,777 406,889,913 Long Term Liabilities 21,940,024 173,087,053 195,027,077 Other Liabilities 6,571,948 4,223,333 10,795,281 Total Liabilities 28,511,972 177,310,386 205,822,358 Net Assets: Invested in Capital Assets,Net of Related Debt 64,632,911 89,683,262 154,316,173 Restricted 597,966 15,483,121 16,081,087 Unrestricted 16,561,287 14,109,004 30,670,291 Total Net Assets $ 81,792,164 $11199 275387 L_.__201,067 5.51 7 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2003 (continued) Changes in Net Assets Governmental Business-type Activities Activities Total 2003 2003 2003 Revenues: Program Revenues: Charges For Services $ 5,739,905 $ 39,862,551 $ 45,602,456 Operating Grants and Contributions 9,469,723 817,451 10,287,174 Capital Grants and Contributions 2,608,168 879,222 3,487,390 General Revenues: Property Taxes 20,890,964 20,890,964 Sales Taxes 16,598,733 16,598,733 Other Taxes/Fees 6,934,601 6,934,601 Investment Earnings 404,146 2,238,809 2,642,955 Miscellaneous 312,213 (46,637) 265,576 Total Revenue 62,958,453 43,751,396 106,709,849 Expenses: Administrative Services 9,816,232 9,816,232 Police i 6,082,473 16,082,473 Fire 9,742,147 9,742,147 Parks and Recreation 4,112,071 4,112,07 I Accounting/Finance 1,721,239 1,721,239 Community Development 7,536,269 '7,536,269 Public Works 5,627,020 5,627,020 Health 4,632,486 4,632,486 Traffic and Transportation 2,138,240 2,138,240 MPEC 622,406 622,406 Capital Outlay Interest and Fees on Long-term Debt 905,959 905,959 Golf 747,356 747,356 Municipal Airport 220,970 220,970 Kickapoo Airport 295,987 295,987 Transit • 1,101,145 1,101,145 Sanitation 7,087,574 7,087,574 Water and Sewer 25,076,194 25,076,194 Stormwater Drainage 10,633 10,633 Total Expenses 62,936,542 34,539,859 97,476,401 Increase in Net Assets Before Special Item and Transfers 21,911 9,211,537 9,233,448 Special Item 1,213,792 1,213,792 Transfers 5,748,106 (3,698,431) 2,049,675 Increase in Net Assets 5,770,017 6,726,898 12,496,915 Net Assets—Beginning of Year 76,022,147 112,548,489 188,570,636 Net Assets—End of Year $ 81.792 1164 1 119,275,387 $201,067 551 8 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2003 (continued) Financial Analysis of the Governmental Activities 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, 2003, the City's governmental funds reported combined fund balances of $20,893,166. Approximately 75.33%,or$15,737,824 constitutes unreserved fund balance,which is available for spending at the government's discretion. The remainder of the fund balance is reserved to indicate that it is not available for spending because it has already been committed to pay for encumbrances ($3,729,845), inventory and prepaid items ($235,869), debt service ($597,966),and perpetual care($591,662). 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 $8,368,357. 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 17.20% of total General Fund expenditures, while the total fund balance represents 21.14% of total General Fund expenditures. The fund balance of the General Fund increased by $1,192,632 during the current fiscal year. Following are the key factors in this increase: • A significant street overlay project was delayed until the ensuing fiscal year. • Franchise fees from the gas and electric companies exceeded budgetary expectations due to a change in the definition of the companies' gross receipts, an increase in the gas franchise payment percentage from 3%to 4%of gross receipts,and higher gas prices. • The collection rate of property taxes exceeded budgetary projections. • Vacancies in the Police Department resulted in salary savings. Financial Analysis of the Business-type Activities Net assets for the City's Business-type Activities increased by$6,726,898,accounting for 53.83% of the total growth in the City's net assets. Following are the key elements of this increase: • Significant improvements to the City's capital assets of the water utility. • Increased landfill revenues resulting from several major industrial customers that were previously utilizing a privately operated landfill. • A reduction of approximately$1,214,000 in the estimated liability for landfill closure and post-closure care costs due to a change in the formula for making the liability calculation. • Revenues exceeded expenditures in the Storm Water Drainage Utility by approximately $1,025,000. • Investment income in the business-type activities, principally from bond proceeds for major water system improvements. 9 • City of Wichita Falls, Texas Management's Discussion and Analysis September 30,2003 (continued) General Fund Budgetary Highlights The final amended expenditure budget for the General Fund was increased by $781,215 from the original adopted budget. Some of the reasons for this increase in appropriations can be briefly summarized as follows: • Approximately$580,000 of prior year encumbrances were carried forward to the 2002-03 amended budget, $344,000 of which was for the street overlay program that was contracted for, but not completed, at the close of the 2001-02 fiscal year. • Approximately $68,000 was appropriated to allow the City to begin operating the police department's vehicle impounding operation that was previously operated by a private contractor. • An additional $100,000 was appropriated for a legal settlement. It should also be noted that budgetary adjustments were made to realign appropriations within the General Fund to address increasing costs for workers compensation and employee health claims. These adjustments did not result in additional appropriations, but rather, a realignment from areas in the General Fund that were experiencing savings. Actual revenues in the General Fund for the 2002-03 fiscal year were $48,469,562, which was $1,462,724 more than final budgeted figures. Much 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 initially anticipated from franchise fees from the electric and gas companies. Actual expenditures in the General Fund for the 2002-03 fiscal year were $48,650,233 compared to a final budget of$50,264,889. This variance is due principally to salary savings that accrued to the General Fund from vacancies in authorized positions; savings in materials for street maintenance; and a delay in a significant street overlay program until the ensuing fiscal year. 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, 2003, amounts to $210,081,322 (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: • Completion of the Kay Yeager Coliseum • Construction in progress on the water system, particularly the Cypress Water Treatment Plant • Construction of the Fire Drill Field • Construction of the Police/Fire Training Facility 10 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2003 (continued) Capital Assets,net of Accumulated Depreciation Governmental Business-type Activities Activities Total 2003 2003 2003 Land $ 12,664,067 $ 8,102,346 $ 20,766,413 Land Betterments 8,699,646 11,317,706 20,017,352 Buildings, Systems and Improvements 44,251,942 89,529,548 133,781,490 Infrastructure 10,945,765 10,945,765 Machinery and 1,789,965 1,506,804 3,296,769 Equipment Furniture and Fixtures 47,399 27,400 74,799 Motor Vehicles 11,707,896 11,707,896 Construction in Progress 1,524,126 7,966,712 9,490,838 Totals $ 79 922,910 $ 130,158 412 $ 210,081�322 Additional information on the City's capital assets can be found in Note 7 on pages 40-43 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$184,754,752. No additional debt was issued during the current fiscal year; however, $2,450,000 in outstanding General Obligation Bonds were refunded at lower interest rates. Governmental Business-type Activities Activities Total 2003 2003 2003 General Obligation Bonds $ 15,290,000 $ $ 15,290,000 Revenue Bonds 168,368,339 168,368,339 Notes Payable 288,739 807,674 1,096,413 Total $ 15,578,739 $ 169,1.76,013 $ 1844754 752 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. Standard & Poors has assigned a credit rating of AA for the City's General Obligation Bonds and a rating of A+ for its Water and Sewer System Revenue Bonds. 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, 2003, was $.59246 per $100, which means that the City has a tax margin of 11 City of Wichita Falls, Texas Management's Discussion and Analysis September 30,2003 (continued) $1.65754 per $100, and could raise up to $56,817,184 additional tax revenue a year from the present assessed valuation of$3,427,801,695 before the limit is reached. The current ratio of net tax-supported debt to the assessed value of all taxable property is 0.43%. Additional information about the City's long-term debt can be found in Note 12 on pages 48-51 of this report. Economic Factors and Next Year's Budgets and Rates The largest revenue source of the City's General Fund is the property tax. Appraised property values for the 2003 tax year, as certified by the Wichita County Appraisal District, increased 3.03% 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 2002-03 fiscal year. The second largest revenue source of the City's General Fund is the retail sales tax. Due to recent volatility of the sales tax, the City was conservative in making sales tax projections for the 2003-04 fiscal year. The 2003-04 budget projects an increase of 1.75% in overall receipts over the 2002-03 revised estimate. Overall, revenues in the General Fund are budgeted to increase by 2.20% from the 2002-03 adopted budget. The budget also anticipates the use of$368,680 in General Fund reserves for one-time needs. For the last two fiscal years, water sales have been significantly lower than budgetary projections principally because of mandatory water conservation measures and higher water rates that were approved in February 2001. As a result, water and sewer rates were increased by 8.50%, effective October 1, 2003. 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 BASIC FINANCIAL STATEMENTS EXHIBIT A-1 CITY OF WICHITA FALLS, TEXAS STATEMENT OF NET ASSETS SEPTEMBER 30, 2003 Primary Government Governmental Business-type Component Activities Activities Total Units Assets Cash and cash equivalents $13,072,648 $ 26,037,849 $ 39,110,497 $19,479,158 Investments 5,991,693 8,026,880 14,018,573 - Receivables(net): Taxes and assessments 1,092,699 - 1,092,699 28,714 Customer and trade - 3,678,930 3,678,930 - Component unit 2,013,519 - 2,013,519 - Government agencies 6,383,840 106,676 6,490,516 993,258 Other 1,820,521 236,848 2,057,369 90,407 Internal balances (244,481) 244,481 - - Inventory 72,676 1,576,890 1,649,566 41,576 Prepaid items 175,111 34,293 209,404 22,711 Other assets 3,000 - 3,000 7,460 Deferred charges - - 2,604,134 2,604,134 - Restricted assets: Cash and cash equivalents - 113,432,117 113,432,117 - Investments - 10,396,353 10,396,353 - Receivables: Other - 51,914 51,914 - Capital assets, net of accumulated depreciation 79,922,910 130,158,412 210,081,322 34,043 Total assets 110,304,136 296,585,777 406,889,913 20,697,327 Liabilities Accounts payable-trade 1,437,652 1,594,063 3,031,715 80,910 Accrued payroll 768,220 212,636 980,856 19,520 Payable to primary government - - - 2,013,519 Payable to government agencies 428,871 45,991 474,862 249,221 Estimated health claims payable 853,999 - 853,999 - Tax anticipation notes payable 340,000 - 340,000 - Other liabilities 2,695,291 128,494 2,823,785 28,370 Deferred revenue 47,915 - 47,915 - Customer deposits - 2,242,149 2,242,149 - Long-term liabilities: - Portion due or payable within one year 3,110,456 5,574,425 8,684,881 - Portion due or payable after one year 18,829,568 167,512,628 186,342,196 48,864 Total liabilities 28,511,972 177,310,386 205,822,358 2,440,404 Net Assets Invested in capital assets, net of related debt 64,632,911 89,683,262 154,316,173 (14,821) Restricted for debt service 597,966 15,483,121 16,081,087 - Unrestricted 16,561,287 14,109,004 30,670,291 18,271,744 Total net assets $81,792,164 $ 119,275,387 $201,067,551 $18,256,923 See accompanying notes to the basic financial statements. 13 CITY OF WICHITA FALLS, TEXAS STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30,2003 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary government: Governmental activities: Administrative services $ 9,816,232 $ 3,259,315 $ 159,017 $ - Police 16,082,473 401,168 567,851 - Fire 9,742,147 2,062 3,761 - Parks and recreation 4,112,071 513,109 101,451 - Accounting/finance 1,721,239 - - - Community development 7,536,269 771,418 6,005,641 - Public works 5,627,020 - 502,308 - Health 4,632,486 590,441 1,909,406 - Traffic and transportation 2,138,240 202,392 220,288 - MPEC 622,406 - - - Capital outlay - - - 2,608,168 Interest and fees on long-term debt 905,959 - - - Total governmental activities 62,936,542 5,739,905 9,469,723 2,608,168 Business-type activities: Golf 747,356 687,153 - - Municipal Airport 220,970 359,006 - - Kickapoo Airport 295,987 348,512 - - Transit 1,101,145 160,749 817,451 - Sanitation 7,087,574 8,783,064 - - Water and sewer 25,076,194 28,488,384 - 879,222 Stormwaterdrainage 10,633 1,035,683 - - Total business-type activities 34,539,859 39,862,551 817,451 879,222 Total primary government $ 97,476,401 $ 45,602,456 $ 10,287,174 $ 3,487,390 Component units: Community development $ 2,144,064 $ - $ - $ - Multi-Purpose Events Center 3,279,996 2,734,487 5,683 - Total component units $ 5,424,060 $ 2,734,487 $ 5,683 $ - General revenues: Taxes: Property tax Sales tax Franchise fees Hotel occupancy tax Beverage tax Bingo tax Investment earnings Gain(loss)on sale of capital assets Miscellaneous Special item-change in estimated closure/post-closure liability of solid waste landfill due to increased capacity Transfers Total general revenues,special item,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 $ (6,397,900) $ - $ (6,397,900) $ - (15,113,454) - (15,113,454) - (9,736,324) - (9,736,324) - (3,497,511) - (3,497,511) - (1,721,239) - (1,721,239) - (759,210) - (759,210) - (5,124,712) - (5,124,712) - (2,132,639) - (2,132,639) - (1,715,560) - (1,715,560) - (622,406) - (622,406) - 2,608,168 - 2,608,168 - (905,959) - (905,959) - (45,118,746) - (45,118,746) - - (60,203) (60,203) - - 138,036 138,036 - 52,525 52,525 -- - (122,945) (122,945) - - 1,695,490 1,695,490 - - 4,291,412 4,291,412 - - 1,025,050 1,025,050 - - 7,019,365 7,019,365 - (45,118,746) 7,019,365 (38,099,381) - - - - (2,144,064) - - - (539,826) - - - (2,683,890) 20,890,964 - 20,890,964 207,454 16,598,733 - 16,598,733 5,532,910 5,286,038 - 5,286,038 - 1,221,620 - 1,221,620 - 196,663 - 196,663 - 230,280 - 230,280 - 404,146 2,238,809 2,642,955 248,291 3,045 (46,637) (43,592) 5,787 309,168 - 309,168 62,119 1,213,792 1,213,792 - 5,748,106 (3,698,431) 2,049,675 (2,049,675) 50,888,763 (292,467) 50,596,296 4,006,886 5,770,017 6,726,898 12,496,915 1,322,996 76,022,147 112,548,489 188,570,636 16,933,927 $ 81,792,164 $ 119,275,387 $ 201,067,551 $ 18,256,923 EXHIBIT A-3 CITY OF WICHITA FALLS, TEXAS BALANCE SHEET-GOVERNMENTAL FUNDS SEPTEMBER 30, 2003 Total Nonmajor Governmental General Governmental Funds Assets Cash and cash equivalents $ 2,961,477 $ 9,137,849 $ 12,099,326 Investments 5,991,693 - 5,991,693 Receivables(net): Taxes and assessments 878,865 213,834 1,092,699 Other City funds 1,265,041 - 1,265,041 Component unit - 2,013,519 2,013,519 Government agencies 3,086,619 3,297,221 6,383,840 Other 1,808,966 11,555 1,820,521 Inventory 63,469 - 63,469 Prepaid items 152,375 20,025 172,400 Other assets - 3,000 3,000 Total assets $ 16,208,505 $ 14,697,003 $ 30,905,508 Liabilities and Fund Balances Liabilities: Accounts payable $ 455,269 $ 549,069 $ 1,004,338 Accrued payroll 715,014 49,460 764,474 Accrued vacation and sick leave 290,000 - 290,000 Payable to other City funds 302,943 1,265,041 1,567,984 Payable to government agencies 156,582 272,289 428,871 Tax anticipation notes payable - 340,000 340,000 Notes payable - 288,739 288,739 Other liabilities 1,548,737 1,146,735 2,695,472 Deferred revenue 1,966,488 175,476 2,141,964 Claims and judgments payable 490,500 - 490,500 Total liabilities 5,925,533 4,086,809 10,012,342 Fund balances: Reserved for encumbrances 1,698,771 2,031,074 3,729,845 Reserved for inventory and prepaid items 215,844 20,025 235,869 Reserved for debt service - 597,966 597,966 Reserved for perpetual care - 591,662 591,662 Unreserved, designated for subsequent years expenditures reported in: General Fund 3,000,000 - 3,000,000 Special Revenue Funds - 3,679,047 3,679,047 Capital Projects Funds - 4,601,725 4,601,725 Unreserved, undesignated reported in: General Fund 5,368,357 - 5,368,357 Special Revenue Fund - 484,787 484,787 Capital Projects Fund - (1,396,092) (1,396,092) Total fund balances 10,282,972 10,610,194 20,893,166 Total liabilities and fund balances $ 16,208,505 $ 14,697,003 $ 30,905,508 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, 2003 Total fund balances-governmental funds (Exhibit A-3) $ 20,893,166 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 $ 100,573,944 Related accumulated depreciation 20,736,903 79,837,041 Property taxes receivable and municipal court fines are not available to pay for current period expenditures and therefore are deferred in the funds. 2,094,048 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 15,290,000 Accrued vacation and sick leave 5,306,102 Claims and judgments payable 228,004 Accrued interest 45,395 (20,869,501) 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. 346,996 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. (509,586) Total net assets -governmental activities (Exhibit A-1) $ 81,792,164 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, 2003 Total Nonmajor Governmental General Governmental Funds Revenues Taxes $ 41,160,049 $ 3,265,057 $ 44,425,106 Charges for services 2,155,570 183,108 2,338,678 Licenses and permits 2,001,117 - 2,001,117 Fines and forfeitures 1,569,135 204,314 1,773,449 Intergovernmental revenue 81,979 9,387,744 9,469,723 Contributions 711,862 1,987,068 2,698,930 Miscellaneous revenue 789,850 749,213 1,539,063 Total revenues 48,469,562 15,776,504 64,246,066 Expenditures Administrative services 8,591,274 578,156 9,169,430 Police 14,764,510 822,156 15,586,666 Fire 9,444,152 12,717 9,456,869 Parks and recreation 3,397,352 523,005 3,920,357 Accounting/finance 1,604,484 - 1,604,484 Community development 1,247,973 6,321,323 7,569,296 Public works 4,467,697 844,043 5,311,740 Health 2,360,222 2,153,547 4,513,769 Traffic and transportation 1,534,507 388,669 1,923,176 MPEC Coliseum - 57,848 57,848 Capital outlay 1,238,062 9,095,458 10,333,520 Debt service-principal - 2,120,000 2,120,000 Debt service-interest and paying agent fees - 924,557 924,557 Total expenditures 48,650,233 23,841,479 72,491,712 Other Financing Sources (Uses) Transfers in 1,858,235 2,151,252 4,009,487 Transfers in-component units 45,762 2,750,015 2,795,777 Transfers out (530,694) (1,160,337) (1,691,031) Transfers out-component units - (746,102) (746,102) Proceeds from refunding bonds - 2,450,000 2,450,000 Payment to refunded bonds escrow agent - (2,450,000) (2,450,000) Total other financing sources (uses) 1,373,303 2,994,828 4,368,131 Net change in fund balance 1,192,632 (5,070,147) (3,877,515) Fund balances-beginning 9,052,740 15,680,341 24,733,081 Prior period adjustment 37,600 - 37,600 Fund balances-ending $ 10,282,972 $ 10,610,194 $ 20,893,166 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, 2003 Net change in fund balances-total governmental funds(Exhibit A-5) $ (3,877,515) 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 are as follows: Capital outlay during the year $ 10,364,189 Depreciation expense for the year 1,804,812 8,559,377 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 from sale. 3,045 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. 204,252 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 2002-03 were: 2,120,000 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 (294,307) Claims and judgments payable 16,772 (277,535) 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 decrease in accrued interest is as follows: Accrued interest at September 30,2002 63,993 Accrued interest at September 30,2003 45,395 18,598 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. (470,619) 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. (509,586) Change in net assets of governmental activities(Exhibit A-2) $ 5,770,017 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 30,2003 Enterprise Funds Nonmajor Water and Enterprise Internal Sewer Sanitation Funds Total Service Funds Assets Current assets: Cash and cash equivalents $ 20,571,603 $ 2,284,533 $ 2,837,705 $ 25,693,841 $ 911,831 Investments 4,003,870 4,023,010 - 8,026,880 - Receivables(net): Customer and trade 2,869,629 716,189 93,112 3,678,930 - Government agencies 51,419 - 55,257 106,676 - Other City funds - - - - 402,957 Other 141,752 22,049 52,410 216,211 20,637 Inventory 715,864 - 97,350 813,214 772,883 Prepaid items 18,660 - 7,034 25,694 11,310 Total current assets 28,372,797 7,045,781 3,142,868 38,561,446 2,119,618 Restricted assets: Cash and cash equivalents 113,432,117 - - 113,432,117 - Investments 10,396,353 - - 10,396,353 - Receivables: Other 51,914 - - 51,914 - Total restricted assets 123,880,384 - - 123,880,384 - Capital assets, net of accumulated depreciation 108,643,491 3,736,465 2,934,523 115,314,479 14,929,804 Other assets: Deferred charges 2,604,134 - - 2,604,134 - Total assets 263,500,806 10,782,246 6,077,391 280,360,443 17,049,422 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 30,2003 Enterprise Funds Nonmajor Water and Enterprise Internal Sewer Sanitation Funds Total Service Funds Liabilities Current liabilities: Accounts payable-trade 1,003,488 180,873 79,957 1,264,318 357,382 Accrued payroll 104,603 48,598 24,351 177,552 38,830 Accrued vacation and sick leave 223,674 91,596 35,646 350,916 61,895 Payable to other City funds 67,374 32,640 - 100,014 - Payable to government agencies - 40,450 5,541 45,991 - Estimated health claims payable - - - - 853,999 Other liabilities 106,669 - 21,525 128,194 300 Total current liabilities 1,505,808 394,157 167,020 2,066,985 1,312,406 Current liabilities payable from restricted assets: Revenue bonds-current maturities 4,155,440 - - 4,155,440 - Accrued interest-revenue bonds 1,393,285 - - 1,393,285 - Total current liabilities payable from restricted assets 5,548,725 - - 5,548,725 - Long-term liabilities: Payable to U.S. Government 807,674 - - 807,674 - Revenue bonds, less current maturities 164,212,898 - - 164,212,898 - Estimated liability for landfill closure and post-closure care costs - 2,106,229 - 2,106,229 - Total long-term liabilities 165,020,572 2,106,229 - 167,126,801 - Long-term liabilities payable from restricted assets: Customer deposits 2,242,149 - - 2,242,149 - Total liabilities 174,317,254 2,500,386 167,020 176,984,660 1,312,406 Net Assets Invested in capital assets, net of related debt 68,168,341 3,736,465• 2,934,523 74,839,329 14,929,804 Restricted for debt service 15,483,121 - - 15,483,121 - Unrestricted 5,532,090 4,545,395 2,975,848 13,053,333 807,212 Total net assets $ 89,183,552 $ 8,281,860 $ 5,910,371 103,375,783 $15,737,016 Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds 15,899,604 Net assets of business type activities $119,275,387 See accompanying notes to the basic financial statements. 20 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 30,2003 Enterprise Funds Nonmajor Water and Enterprise Internal Sewer Sanitation Funds Total Service Funds Operating revenues: Charges for services $ 27,861,561 $ 8,779,900 $1,794,526 $38,435,987 $ 7,232,940 Rents,concessions and other 626,823 3,164 796,579 1,426,566 381,462 Contributions - - - - 5,962,341 Total operating revenues 28,488,384 8,783,064 2,591,105 39,862,553 13,576,743 Operating expenses: Personnel services 6,377,309 2,906,965 1,323,097 10,607,371 1,794,448 Supplies and materials 1,150,382 54,030 181,560 1,385,972 2,013,798 Maintenance and repairs 1,278,451 410,171 249,407 1,938,029 1,637,272 Utilities and other services 3,627,548 2,792,310 221,180 6,641,038 99,840 Insurance and contract support 453,010 93,757 104,621 651,388 6,888,042 Other expenses 1,218,994 447,590 152,598 1,819,182 251,594 Depreciation and amortization 3,118,937 79,160 169,837 3,367,934 2,994,939 Total operating expenses 17,224,631 6,783,983 2,402,300 26,410,914 15,679,933 Operating income(loss) 11,263,753 1,999,081 188,805 13,451,639 (2,103,190) Nonoperating revenues(expenses): Interest income 2,093,802 114,271 30,736 2,238,809 16,873 Loss on sale/abandonment of capital assets (4) - - (4) (46,633) Interest expense and paying agent fees (8,402,809) - - (8,402,809) - Intergovernmental operating grants - - 817,451 817,451 - Total nonoperating revenues(expenses) (6,309,011) 114,271 848,187 (5,346,553) (29,760) Income(loss)before contributions and transfers 4,954,742 2,113,352 1,036,992 8,105,086 (2,132,950) Capital contributions 879,222 - _ 879,222 - Special item - 1,213,792 - 1,213,792 - Transfers in 22,840 - 201,975 224,815 372,974 Transfers out (1,004,292) (1,249,791) (350,161) (2,604,244) (312,000) Change in net assets 4,852,512 2,077,353 888,806 7,818,671 (2,071,976) Net assets-beginning 84,331,040 6,204,507 5,021,565 17,808,992 Net assets-ending $ 89,183,552 $ 8,281,860 $5,910,371 $ 15,737,016 Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds (1,091,773) Change in net assets of business type activities $ 6,726,898 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 30,2003 Enterprise Funds Nonmajor Water and Enterprise Internal Sewer Sanitation Funds Total Service Funds Cash flows from operating activities: Received from customers and users $ 28,413,104 $ 8,786,502 $ 2,578,630 $ 39,778,236 $ 13,166,105 Payments to employees (4,980,670) (2,197,333) (1,132,753) (8,310,756) (10,905,066) Payments to suppliers (8,630,762) (4,375,922) (1,048,078) (14,054,762) (1,390,441) Net cash provided by operating activities 14,801,672 2,213,247 397,799 17,412,718 870,598 Cash flows from noncapital financing activities: Intergovernmental operating grants - - 1,025,232 1,025,232 - Transfers in from other funds - - 28,855 28,855 372,974 Transfers out to other funds (1,004,292) (1,249,791) (461,812) (2,715,895) (312,000) Net cash provided(used)by noncapital financing activities (1,004,292) (1,249,791) 592,275 (1,661,808) 60,974 Cash flows from capital and related financing activities: Acquisition and construction of capital assets (4,773,595) (132,318) (160,046) (5,065,959) (1,866,958) Proceeds from sale of capital assets - - - - 102,403 Principal paid on long-term debt (3,895,000) - - (3,895,000) - Interest paid on long-term debt (8,412,955) - - (8,412,955) - Net cash provided by(used for)capital and related • financing activities (17,081,550) (132,318) (160,046) (17,373,914) (1,764,555) Cash flows from investing activities: Interest on investments 2,093,801 114,271 30,736 2,238,808 16,873 Purchase of investments (1,650,347) (2,033,132) - (3,683,479) - Net cash provided by(used for)investing activities 443,454 (1,918,861) 30,736 (1,444,671) 16,873 Net Increase(Decrease)in Cash and Cash Equivalents (2,840,716) (1,087,723) 860,764 (3,067,675) (816,110) Cash and Cash Equivalents-Beginning 136,844,436 3,372,256 1,976,941 142,193,633 1,727,941 Cash and Cash Equivalents-Ending $ 134,003,720 $ 2,284,533 $ 2,837,705 $ 139,125,958 $ 911,831 Reconciliation of cash and cash equivalents on the balance sheet to the statement of cash flows: Cash and cash equivalents $ 20,571,603 $ 2,284,533 $ 2,837,705 $ 25,693,841 $ 911,831 Restricted assets-cash and cash equivalents 113,432,117 - - 113,432,117 - Total cash and cash equivalents at end of year $ 134,003,720 $ 2,284,533 $ 2,837,705 $ 139,125,958 $ 911,831 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 30,2003 Enterprise Funds Nonmajor Water and Enterprise Internal Sewer Sanitation Funds Total Service Funds Reconciliation of Operating Income(Loss)to Net Cash Provided by Operating Activities: Operating income(loss) $ 11,263,753 $ 1,999,081 $ 188,805 $ 13,451,639 $ (2,103,190) Adjustments to reconcile operating income(loss) to net cash provided by(used in)operating activities: Depreciation and amortization 3,118,937 79,160 169,837 3,367,934 2,994,939 Customer deposits received 90,717 - 4,761 95,478 - (Increase)decrease in current assets: Receivables: Customer and trade (32,231) 4,538 4,586 (23,107) - Other City funds - - - - (758,824) Other (43,049) (470) (28,329) (71,848) (7,681) Inventory (55,261) - (38) (55,299) 2,941 Prepaid items 1,089 3,258 7,070 11,417 411 Increase(decrease)in current liabilities: Accounts payable-trade 309,706 91,199 33,584 434,489 123,818 Accrued payroll 16,046 8,344 3,527 27,917 8,927 Accrued vacation and sick leave 12,288 3,488 5,912 21,688 17,761 Payable to other City funds 67,374 32,640 - 100,014 355,867 Estimated health claims payable - - - - 235,829 Payable to government agencies - (223) (3,140) (3,363) - Deferred revenue - - (2,710) (2,710) - Other liabilities 52,303 (7,768) 13,934 58,469 (200) Total adjustments 3,537,919 214,166 208,994 3,961,079 2,973,788 Net cash provided by(used in) operating activities $ 14,801,672 $ 2,213,247 $ 397,799 $ 17,412,718 $ 870,598 Noncash capital and financing activities: Capital assets received from developers $ 879,222 $ - $ - $ 879,222 $ - See accompanying notes to the basic financial statements. 23 EXHIBIT A-10 CITY OF WICHITA FALLS, TEXAS STATEMENT OF FIDUCIARY NET ASSETS SEPTEMBER 30, 2003 Agency Fund Assets Cash and cash equivalents $ 30.910 Liabilities Other liabilities $ 30,910 See accompanying notes to the basic financial statements. 24 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2003 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. Implementation of New Pronouncements For fiscal year 2002-2003, the City has implemented the following new statements of financial accounting standards issued by the GASB: Statement No. 34— Basic Financial Statements —and Management's Discussion and Analysis— for State and Local Governments. Statement No. 37— Basic Financial Statements—and Management's Discussion and Analysis— for State and Local Governments. Statement No. 38—Certain Financial Statement Disclosures. Interpretation No. 6 — Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund Financial Statements. GASB Statement No. 34 (as amended by Statement No. 37) represents a significant change in the financial reporting model used by state and local governments. The financial statements now include government-wide financial statements that are designed to provide a broad overview of the City's finances. Fund financial statements now present information for individual major funds rather than by fund type, with all nonmajor funds presented in one total column. GASB 34 also requires a narrative presentation of management's discussion and analysis. The government-wide statements are prepared on an accrual basis of accounting and include both noncurrent assets and noncurrent liabilities of the City that were previously recorded in the General Fixed Assets Account Group and the General Long-Term Debt Account Group. In addition, the government-wide Statement of Activities reflects depreciation expenses on the City's capital assets, including infrastructure. GASB Statement No. 38 requires certain disclosures to be made in the notes to the financial statements concurrent with the implementation of Statement No. 34. While this Statement did not affect amounts reported in the financial statements of the City, certain note disclosures have been added and or amended including descriptions of activities of major funds, violations of legal or contractual provisions, future debt service and lease obligation in five-year increments, short-term obligations, interest rates, and interfund balances and transactions. 25 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) GASB Interpretation No. 6 clarifies the existing modified accrual standards for distinguishing the portion of a liability that should be reported as a governmental fund liability / expenditure from the portion that should be reported as a general long-term liability (i.e., government-wide reporting only). B. Financial Reporting Model In June 1999, the GASB issued Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis — for State and Local Governments. This statement, known as the "Reporting Model" statement, affects the way the City prepares and presents financial information. State and local governments traditionally have used a financial reporting model substantially different from the one used to prepare privilege-sector financial reports. GASB Statement No. 34 established new requirements and a new reporting model for the annual financial reports of state and local governments. The Statement was developed to make annual reports easier to understand and more useful to the people who use governmental financial information to make decisions and includes: Management's Discussion and Analysis — GASB Statement No. 34 requires that financial statements be accompanied by a narrative introduction and analytical overview of the government's financial activities in the form of a "management's discussion and analysis" (MD&A). This analysis is similar to the analysis the private sector provides in their annual reports. Government-wide Financial Statements — The reporting model includes financial statements prepared using full accrual accounting for all of the government's activities. Government-wide financial statements do not provide information by fund or account group, but distinguish between the City's governmental activities, business-type activities and activities of its discretely presented component units on the statement of net assets and statement of activities. Significantly, the City's statement of net assets includes both noncurrent assets and noncurrent liabilities of the City, which were previously recorded in the General Fixed Assets Account Group and the General Long-term Obligations Account Group (such as buildings and infrastructure, including bridges and roads, and general obligation debt). Accrual accounting also reports all of the revenues and cost of providing services each year, not just those received or paid in the current year or soon thereafter. In addition to the fixed assets previously recorded in the General Fixed Assets Account Group, the City retroactively capitalized infrastructure assets. In addition, the government-wide statement of activities reflects depreciation expenses on the City's capital assets, including infrastructure. In addition to the government-wide financial statements, the City has prepared governmental fund financial statements which continue to use the modified accrual basis of accounting and the current financial resources measurement focus. Accordingly, the accounting and financial reporting for the City's General Fund and Debt Service Funds, the City's major governmental funds, is similar to that previously presented in the City's financial statements, although the format of financial statements has been modified by GASB Statement No. 34. 26 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) Statement of Net Assets — The Statement of Net Assets is designed to display the financial position of the primary government (government and business-type activities) and its discretely presented component units. Governments report all capital assets, including infrastructure, in the government-wide Statement of Net Assets and report depreciation expense — the cost of "using up" capital assets— in the Statement of Activities. The net assets of a government will be broken down into three categories, 1) invested in capital assets, net of related debt; 2) restricted; and 3) unrestricted. Statement of Activities — The new government-wide statement of activities reports expenses and revenues in a format that focuses on the cost of each of the government's functions. The expense of individual functions is compared to the revenues generated directly by the function (for instance, through user charges or intergovernmental grants). C. 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. 14, 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. 27 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30, 2003 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) 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 is presented as a governmental fund type. 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 5190.6, Section 4B. Since the City Council appoints its Board of Directors, approves its budgets, and exercises final authority over its operations, the Wichita Falls 4B Sales Tax Corporation is considered to be part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The Wichita Falls 4B Sales Tax Corporation is presented as a governmental fund type. 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 each member of its Board, 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 is presented as a governmental fund type. Wichita Falls/Wichita County Multi-Purpose Events Center (MPEC). The Wichita Falls/Wichita County Multi-Purpose Events Center (a non-profit entity) was established to operate the Multi- Purpose Events Center (Center) for the City. The Center consists of a Coliseum, an Exhibit Hall and an Agricultural Complex. Since the City appoints five members of the seven-member MPEC Board, MPEC is considered to be a part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The operations of MPEC also include the operations of the Convention &Visitors Bureau. 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. 28 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2003 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) 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. D. 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. 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. 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. 29 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) 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. E. Measurement focus, basis of accountina 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. 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 is a summarization of all the non-major governmental funds. 30 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) 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 is 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. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. 31 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2003 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, golf 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. F. 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 requires 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. 32 I CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2003 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. G. Assets. liabilities and net assets or equity 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 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 $500 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the 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 8-75 years Machinery, vehicles and other equipment 3 -25 years Furniture and equipment 3-10 years 33 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) The City's infrastructure reported at September 30, 2003 does not include costs prior to October 1, 2002 for streets, alleys, drainage or trails. The City intends to include these costs in future years. 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, 2003, the City's business-like activities incurred a total of $8,402,809 of interest costs. Of this amount, none was capitalized on construction projects and $8,402,809 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 a nonoperating revenue in the Water and Sewer Fund. 4. Long-Term Obligations Long-term debt and other obligations for general government purposes are recorded in the government-wide statement of net assets. Long-term debt and other obligations financed by proprietary funds are reported as liabilities in the appropriate funds. For the government-wide financial statements and proprietary fund types, bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method in the government-wide financial statements. Bonds payable are reported net of the applicable bond premium or discount. Issuance costs are reported as deferred bond issue costs and amortized over the term of the related debt. In addition, gains or losses on proprietary fund bond refunding are amortized over the term of the lesser of the new bonds or the refunded bonds' life using the effective interest method. In the governmental fund financials, bond proceeds are reported as another financing source. Bond premiums and discounts in governmental funds are also recognized currently as other financing sources or uses. Issuance costs, even if withheld from the actual net proceeds received, are reported as debt service expenditures. 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, North Texas Regional Narcotics Task Force, 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. 34 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) 6. Reserves and Desianations 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 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. 35 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2003 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, 2003 is based on management's estimate of probable losses in the amount of $601,504. 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 liability has been recorded in the General Long-Term Debt Account Group, except for $373,500 which 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, 2001 to September 30, 2003: Health Workers' Care Compensation Liability balance, October 1, 2001 $ 679,732 $ 391,016 Incurred claims/adjustments 5,262,305 1,113,859 Claim payments ( 5.323.867) ( 1.340.903) Liability balance, September 30, 2002 618,170 368,001 Incurred claims/adjustments 6,339,067 2,087,765 Claim payments ( 6,103,238) ( 1,854,262) Liability balance, September 30, 2003 $ 853.999 $ 601.504 Note 2 - COMPLIANCE AND ACCOUNTABILITY Finance-Related Leaal 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 Deficiency in revenue bond debt City increased water rates in order to service coverage as required by raise net earnings of Water and bond covenants Sewer Fund Failure to comply with competitive City will more closely monitor purchasing bidding requirements activities to ensure compliance 36 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 2 - COMPLIANCE AND ACCOUNTABILITY(CONT'D.) Fund Deficits At September 30, 2003, the MPEC Coliseum Construction Fund had a deficit fund balance of $1,140,819. The City intends to recover this deficit with transfers from other funds. Budget During the year ended September 30, 2003, the City's General Fund expenditures exceeded appropriations in Administrative Services by$187,028. 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, 2003, the total amount of the City's demand and time deposits per the general ledgers was $171,824,479, and the total amount per the City's September 30, 2003 bank statements was $172,254,536. 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, 2003 are as follows: Component City Units Totals U.S. Government securities $ 24,414,925 $ - $ 24,414,925 Texas Local Government Investment Pool (TexPool) 137,191,831 19,048,097 156,239,928 Local Government Investment Cooperative (LOGIC) 1,241,326 - 1,241,326 Totals $162,848,082 $19.048,097 $181.896.179 37 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2003 Note 3 - DEPOSITS AND INVESTMENTS(CONT'D.) 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. 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 City's investments that are represented by specific identifiable investment securities are categorized below to give an indication of the level of risk assumed by the City at year end. Category 1 includes investments that are insured or registered, or for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the counterparty's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty's safekeeping department, but not in the City's name. Category Carrying Fair Description 1 2 3 Amount Value • Primary Government: U.S. Government Securities $24.414,925 $_ $ 24,414,925 $ 24,414,925 Investments not subject to categorization: . Public Funds Investment Pool 138.433,157 138.433.157 Subtotal 162,848,082 162,848,082 Component Units: Investments not subject to categorization: Public Funds Investment Pool 19.048.097 19.048,097 Total $181.896.179 $181.896.179 * The fair value of the City's position in the Public Funds Investment Pool is the same as the value of the Pool shares. 38 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 4- RECEIVABLES Receivables at September 30, 2003 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 $1,463,994 $ 306,204 $ - $ - $ - $ - $ 1,770,198 $ 28,714 $ 1,798,912 Customer and trade - - 3,182,767 842,975 93,112 - 4,118,854 - 4,118,854 Other City funds 1,265,041 - - - - 402,957 1,667,998 - 1,667,998 Component unit - 2,013,519 - - - - 2,013,519 - 2,013,519 Government agencies 3,086,619 3,297,221 51,419 - 55,257 - 6,490,516 993,258 7,483,774 w Other - 11,555 141,752 22,049 52,410 20,637 248,403 90,407 338,810 Restricted-other 4.307,770 - 51.914 - - - 4.359.684 - 4.359.684 Gross receivables 10,123,424 5,628,499 3,427,852 865,024 200,779 423,594 20,669,172 1,112,379 21,781,551 Less: Allowance for uncollectible accounts ( 3.083.933) ( 92.370) ( 313.138) ( 126,786) - - ( 3.616.227) - ( 3.616.227) Net total receivables $7 039 491 15.536,129 $3 114 714 $738,238 $ $423,594 517.052945 $1.112 379 $18 165_324 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$350,000 of the $1,585,851 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 (CONTD.) SEPTEMBER 30, 2003 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, 2003 was $.59246 per $100 which means that the City has a tax margin of $1.65754 per $100, and could raise up to $56,817,184 additional tax revenue a year from the present assessed valuation of$3,427,801,695 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 $ 15,483,121 For Capital Improvements: Cash and cash equivalents 95,706,847 Investments 10,396,353 Receivables 51,914 For Customer Deposits: Cash and cash equivalents 2,242,149 Total $123.880.384 Note 7 - CAPITAL ASSETS Capital asset activity for the year ended September 30, 2003 was as follows: 40 • CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2003 Note 7 - CAPITAL ASSETS(CONT'D.) Balance Balance Governmental activities: October 1, September 30, 2002 Increases Decreases 2003 Capital assets not being depreciated: Land $12,664,067 $ - $ - $12,664,067 Construction in progress 17.632.581 1.218.298 17,326,753 1.524.126 Total capital assets not being depreciated 30.296.648 1,218,298 17,326,753 14.188.193 Capital assets being depreciated: Land betterments 10,752,148 43,307 702 10,794,753 Buildings, systems and improvements 27,644,388 24,446,752 - 52,091,140 Infrastructure 13,379,453 1,736,281 47,310 15,068,424 Machinery and equipment 8,071,282 266,678 35,996 8,301,964 Furniture and fixtures 214,110 - 1,478 212,632 Motor vehicles 31.485 - - 31.485 Total capital assets being depreciated 60.092.866 26.493.018 85,486 86,500,398 Less accumulated depreciation for: Land betterments 1,984,658 111,151 702 2,095,107 Buildings,systems and improvements 7,018,610 820,588 - 7,839,198 Infrastructure 3,850,402 319,567 47,310 4,122,659 Machinery and equipment 5,971,417 553,159 12,577 6,511,999 Furniture and fixtures 155,479 11,232 1,478 165,233 Motor vehicles 31.485 - - 31.485 Total accumulated depreciation 19.012.051 1,815.697 62,067 20,765.681 Total capital assets being depreciated, net 41,080,815 24,677,321 23,419 65.734,717 Governmental activities capital assets, net $71.377.463 $25.895.619 $17.350.172 $79.922.910 41 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2003 Note 7 - CAPITAL ASSETS(CONT'D.) Balance Balance Business-type activities: October 1, September 30, 2002 Increases Decreases 2003 Capital assets not being depreciated: Land $ 8,102,346 $ - $ - $ 8,102,346 Construction in progress 5,720,522 2.801,126 554,936 7.966.712 Total capital assets not being depreciated 13,822,868 2,801,126 554.936 16.069.058 Capital assets being depreciated: Land betterments 20,693,942 43,084 - 20,737,026 Buildings, systems and improvements 145,520,802 3,435,597 248,000 148,708,399 Machinery and equipment 4,563,352 230,049 3,395 4,790,006 Furniture and fixtures 48,553 - - 48,553 Motor vehicles 33,128,100 1,850,128 1,692,517 33.285,711 Total capital assets being depreciated 203.954,749 5.558,858 1,943,912 207,569,695 Less accumulated depreciation for: Land betterments 9,076,985 342,335 - 9,419,320 Buildings, systems and improvements 56,681,770 2,745,081 248,000 59,178,851 Machinery and equipment 3,071,528 214,390 2,716 3,283,202 Furniture and fixtures 17,111 4,042 - 21,153 Motor vehicles 20,255,106 2,866,191 1.543.482 21.577.815 Total accumulated depreciation 89,102,500 6.172,039 1,794,198 93,480,341 Total capital assets being depreciated, net 114,852,249 ( 613.181) 149.714 114,089.354 Business-type activities capital assets, net $128,675.117 $2.187,945 $ 704.650 $130.158.412 Depreciation expense was charged to functions as follows: Governmental activities: Administrative services $ 303,546 Police 228,247 Fire 108,782 Parks and recreation 69,501 Accounting/finance 106,615 Community development 35,510 Public works 114,431 Health 62,860 Traffic and transportation 221,647 MPEC 564,558 Total governmental depreciation $1.815.697 42 • CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 7 - CAPITAL ASSETS (CONT'D.) Business-type activities: Golf $ 14,732 Municipal Airport 80,934 Kickapoo Airport 53,488 Transit 186,459 Sanitation 2,061,674 Water and sewer 3,770,295 Stormwater drainage 4,457 Total business-type depreciation $6,172,039 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 774 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%) 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. 43 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2003 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, 2002 valuation is effective for rates beginning January 2004). 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 his 24 month average monthly salary (within the last 36 months) multiplied by his years of service. 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. 44 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2003 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, 2000 was 35.9 years. Schedule of Actuarial Liabilities and Fundina Progress Texas Municipal Firemen's Total Retirement Relief and (Memorandum System Retirement Only) Actuarial Valuation Date 12/31/02 12/31/02 Actuarial Value of Assets $69,770,838 $27,439,565 $ 97,210,403 Actuarial Accrued Liability(AAL) 93,176,395 37,003,896 130,180,291 Percentage Funded 74.9% 74.2% 74.7% Unfunded Actuarial Accrued Liability(UAAL) 23,405,557 9,564,331 32,969,888 Annual Covered Payroll 31,065,101 6,609,807 37,674,908 UAAL as a Percentage of Covered Payroll 75.3% 144.7% 87.5% Net Pension Obligation(NPO)at the Beginning of the Period -0- -0- -0- Annual Pension Cost: Annual Required Contribution (ARC) $ 3,653,245 $ 711,831 $ 4,365,076 Interest on NPO -0- -0- -0- Adjustment to the ARC -0- -0- -0- Annual Pension Cost $ 3.653.245 $ 711.831 $ 4.365.076 45 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 8 - RETIREMENT PLANS (CONT'D.) Texas Municipal Firemen's Total Retirement Relief and (Memorandum System Retirement Only' Percentage of Annual Pension Costs Contributed 100% 100% 100% Contributions Made $ 3,653,245 $ 711,831 $ 4,365,076 Increase in NPO -0- -0- -0- NPO At the End of the Period $ -0- $ -0- S -0- Two preceding years: 2001: Annual Pension Cost $ 3,473,150 $ 670,703 $ 4,143,853 Percentage of Annual Pension Costs Costs Contributed 100% 100% 100°A NPO At the End of the Period -0- -0- -0- 2000: Annual Pension Cost $ 3,197,051 $ 537,013 $ 3,734,064 Percentage of Annual Pension Costs Contributed 100% 100% 100% NPO At the End of the Period -0- -0- -0- Actuarial Assumptions Texas Municipal Firemen's Retirement Relief and System Retirement Actuarial Cost Method Unit Credit Entry Age Amortization Method Level Percent of Payroll Level Percent of Payroll Remaining Amortization Period 25 years 35.9 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 both 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. 46 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30, 2003 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 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 $2,450 for the fiscal year ended September 30, 2003. 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, 2003. 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, 2003: Year ending September 30: 2004 $116,839 2005 153,161 2006 57,548 2007 48,707 2008 17,243 2009—2013 687 Total minimum payments required $394,185 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, 2003: Minimum rentals $156,255 Contingent rentals 2,450 Total rentals $158,705 47 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2003 Note 12 - LONG-TERM LIABILITIES Long-term liabilities transactions for the year ended September 30, 2003 are summarized as follows: Balance at Balance at October 1, Retired and September 30, Due Within 2002 Issued Transferred(1) 2003 One Year Governmental Activities: General obligation bonds $ 17,410,000 $2,450,000 $ 4,570,000 $ 15,290,000 $2,230,000 Note payable - 288,739 - 288,739 54,561 Accrued vacation and sick leave payable 5,301,795 295,591 - 5,597,386 290,000 Claims and judgments payable 485,001 2,087,765 1.854.262 718.504 490.500 Total governmental activities 23.196.796 5.122.095 6.424.262 21.894,629 3.065.061 Business-type Activities: Utility system revenue bonds, net of premium(discount) 172,349,440 _ - 3,981,101 168,368,339 4,155,440 Arbitrage payable 243,216 - 243,216 - - Accrued vacation and sick leave payable 373,603 37,924 - 411,527 - Note payable 832,565 - 24,891 807,674 25,700 Landfill closure,post-closure costs 3.320.021 - 1.213.792 2,106,229 - Total business-type activities 177.118.845 37.924 5.463.000 171,693,769 4.181.140 Total long-term liabilities $200 315.641 15,16.0.419 511,887 262 $193 588 398 $7 246 201 (1) Includes bond premium amortization of$86,101 relative to the revenue bonds payable. The portion of long-term liabilities due within one year as reflected on Exhibit A-1 includes $45,395 and $1,393,285 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, 2003, 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 9/30/03 General Obligation Bonds: General Obligation Refunding 4.10%- 9/01/06 $570,000 to $ 9,000,000 $ 3,225,000 Bonds,Series 1996 5.30% $1,130,000 General Obligation Construction 3.75%- 9/01/21 $175,000 to 10,205,000 9,615,000 and Refunding Bonds, Series 2001 5.375% $945,000 General Obligation Refunding 1.60%- 9/01/06 $775,000 to 2,450,000 2,450,000 Bonds,Series 2003 2.35% $860,000 Total General Obligation Bonds 15.290.000 48 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2003 Note 12 - LONG-TERM LIABILITIES (CONT'D.) Range of Final Annual Bonds Interest Maturity Serial Bonds Outstanding Rates Date Payments Authorized at 9/30/03 Revenue Bonds: Water and Sewer Revenue Bonds: Water and Sewer System 3.90%- 8/01/07 $95,000 to 12,830,000 5,385,000 Refunding Revenue Bonds, 5.20% $1,450,000 Series 1995 Water and Sewer System 4.10%- 8/01/07 $305,000 to 5,360.000 2,320,000 Refunding Revenue Bonds, 5.40% $625,000 Series 1996 Water&Sewer System 4.05%- 8/01/18 $180,000 to 5,500,000 4,505,000 Priority Lien Revenue Bonds, 4.65% $400,000 Series 1998E Water&Sewer System 3.75%- 8/01/27 $1,220,000 to 118,770,000 115,885,000 Priority Lien Revenue 5.375% $11,515,000 Bonds, Series 2001 Plus bond premium 1,468,339 Water&Sewer Subordinate 3.35%- 8/01/16 $25,000 to 11,420,000 10,765,000 Lien Revenue Bonds, 4.95% $2,750,000 Series 1996 Water&Sewer Subordinate 3.14%- 8/01/18 $25,000 to 8,060,000 7,935,000 Lien Revenue Bonds, 4.59% $3,320,000 Series 1998 Water&Sewer System 3.65%- 8/01/12 $375,000 to 22,795,000 20,105,000 Subordinate Lien 4.50% $3,770,000 Refunding Revenue Bonds, Series 1998A Total Revenue Bonds 168,368,339 Total All Bonds $183,658 339 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, 2003, $309,007 was available in this fund to service these bonds. All of the Water and Sewer Revenue Bonds were issued for purposes of improving the City's water and sewer systems and are serviced by the net revenues of the Water and Sewer Fund. 49 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 12 - LONG-TERM LIABILITIES (CONT'D.) 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) is reflected in capital assets, and the City's share of the U.S. Government funded portion ($4,484,140) is reflected as contributed capital 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, 2003 is classified as • follows: Long-term $781,974 Current portion (included in other liabilities) 25,700 Total $807,674 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%. 50 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 12 - LONG-TERM LIABILITIES (CONT'D.) Aggregate maturities of the long-term debt(principal and interest) for the years subsequent to September 30, 2003 are as follows: Year Ending General Obligation Bonds Revenue Bonds Notes Payable Total September 30, Principal Interest Principal Interest Principal Interest Principal Interest 2004 $ 2,230,000 $ 654,890 $ 4,155,440 $ 8,241,473 $ 80,261 $ 34,493 $ 6,465,701 $ 8,930,856 2005 2,335,000 577,171 4,339,709 8,055,863 82,650 32,104 6,757,359 8,665,138 2006 2,455,000 487,431 4,528,947 7,864,683 85,110 29,643 7,069,057 8,381,757 2007 880,000 387,569 4,738,084 7,657,224 87,645 27,109 5,705,729 8,071,902 2008 910,000 350,169 4,952,180 7,438,727 90,210 24,499 5,952,390 7,813,395 2009-2013 2,755,000 1,266,075 27,977,630 33,859,180 160,941 98,927 30,893,571 35,224,182 2014-2018 2,140,000 764,081 35,273,947 26,624,095 188,878 70,991 37,602,825 27,459,167 vi 2019-2023 1,585,000 166,531 45,101,055 16,685,575 221,664 38,205 46,907,719 16,890,311 2024-2028 - - 37,301,347 4.246.336 99.054 4.859 37,400,401 4.251.195 Totals $15.290,000 $4.653,917 $168,368,339 $120,673.156 $1.096,413 $360,830 $184.754.752 $125.687.903 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 13 - DEFEASED DEBT Current Year On September 23, 2003, the City issued general obligation refunding bonds of $2,450,000 (par value) with interest rates ranging from 1.60% to 2.35%. The debt was issued to refund general obligation bonds with interest rates ranging from 3.50% to 5.50% and a par value of $2,450,000. The general obligation bonds to be refunded mature through September 1, 2006, and were callable on September 1, 2003. The refunding met the requirements of an in-substance debt defeasance and the original general obligation bonds were removed from the City's General Long- Term Debt Account Group. As a result of the refunding, the City reduced its total debt service requirements by $159,474 resulting in an economic gain (difference between the present value of the debt service payments on the old and new debt) of$137,820. Prior Years In prior years, the City defeased certain outstanding revenue bonds by placing the proceeds of new bonds and additional cash in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust escrow accounts and the defeased bonds are not included in the City's financial statements. At September 30, 2003, $8,070,000 of the 1986 Water and Sewer Revenue Refunding Bonds are considered defeased. Note 14 - TAX ANTICIPATION NOTES PAYABLE During the year ended September 30, 1997, the City of Wichita Falls, Texas issued tax anticipation notes in the amount of$2,000,000. The proceeds provided by these notes were used for the renovation of the City's Activities Center to house the Wichita Falls Public Library. These notes bear interest ranging from 4.45% to 7.00% and mature over a period of seven years. While these notes are, in effect, long-term financing, the City has recorded the liability for these tax anticipation notes as a current liability in the Library Renovations Fund as required by generally accepted accounting principles established by the Governmental Accounting Standards Board. The annual requirements to pay principal and interest on the tax anticipation notes outstanding at September 30, 2003 are as follows: Year Ending September 30: Principal Interest Total 2004 $340.000 $8,075 $348.075 During the year ended September 30, 2003, the City paid $23,590 of interest on the tax anticipation notes. 52 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2003 Note 15 - LANDFILL AND TRANSFER STATION CLOSURE AND POSTCLOSURE CARE COSTS State and federal laws and regulations require that the City place a final cover on its landfill when closed, and perform certain maintenance and monitoring functions at the landfill site for thirty years after closure. In accordance with the Texas Administrative Code, Title 30, Part 1, Chapter 7, the City annually submits a financial assurance letter to the Texas Commission on Environmental Quality (TCEQ). In addition to operating expenses related to current activities of the landfill, an expense provision and related liability are being recognized based on the future closure and postclosure care costs that will be incurred near or after the date the landfill no longer accepts waste. The recognition of these landfill closure and postclosure care costs is based on the amount of the landfill used during the year. The estimated liability for landfill closure and postclosure care costs has a balance of $2,106,229 as of September 30, 2003, which is based on 12% usage of the landfill. The City will recognize the remaining estimated cost of closure and postclosure care of $15,044,488 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 16 - INTERFUND BALANCES Balances due to and due from other funds at September 30, 2003 consisted of the following: Due To Fund Due From Fund Amount Purpose General Fund Nonmajor Governmental Funds $1,265,041 Short-term loan Internal Service Fund General Fund 302,943 Short-term loan Internal Service Fund Water&Sewer Fund 67,374 Short-term loan Internal Service Fund Sanitation Fund 32,640 Short-term loan Total $1.667.998 All amounts due are scheduled to be repaid within one year. Balances due to and due from component units at September 30, 2003 consisted of the following: Due To Fund Due From Fund Amount Purpose Nonmajor Governmental Funds Wichita Falls 4B Sales Tax Corp. $2.013.519 Construction funding The amount is scheduled to be repaid within one year. Transfers to and from other funds during the year ended September 30, 2003 were as follows: 53 1 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 16 - INTERFUND BALANCES (CONT'D.) Transfers From Transfers To Amount Reason General Fund Nonmajor Enterprise Funds $ 173,120 Fund operating deficit General Fund Nonmjor Governmental Funds 282,306 Supplement operating grants General Fund Internal Service Funds 75,268 Purchase capital assets Nonmajor Governmental Funds Nonmajor Governmental Funds 113,997 Fund construction costs Nonmajor Governmental Funds Nonmajor Governmental Funds 752,376 Fund debt service payment Nonmajor Governmental Funds Nonmajor Governmental Funds 30,697 Fund operating deficit Nonmajor Governmental Funds Water and Sewer Fund 22,840 Purchase capital assets Nonmajor Governmental Funds Nonmajor Enterprise Funds 28,855 Purchase capital assets Nonmajor Governmental Funds Internal Service Funds 61,572 Purchase capital assets Water and Sewer Fund General Fund 504,292 Administrative overhead Water and Sewer Fund Nonmajor Governmental Funds 500,000 Fund debt service payment Sanitation Fund General Fund 1,033,647 Administrative overhead Sanitation Fund Internal Service Funds 216,144 Purchase capital assets Nonmajor Enterprise Funds General Fund 8,295 Administrative overhead Nonmajor Enterprise Funds Nonmajor Governmental Funds 321,876 Supplement operating grant Nonmajor Enterprise Funds Internal Service Funds 19,990 Purchase capital assets Internal Service Funds General Fund 312,000 Administrative overhead Private-Purpose Trust Fund Nonmajor Governmental Funds 150,000 Fund debt service payment Total $4.607.275 Transfers to and from component units during the year ended September 30, 2003 were as follows: Transfers From Transfers To Amount Reason MPEC General Fund $ 45.762 Purchase of equipment MPEC Nonmajor Governmental Funds 225,000 Fund construction costs Nonmajor Governmental Funds MPEC 746,102 Fund operating deficit 4B Sales Tax Nonmajor Governmental Funds 2,076,425 Fund construction costs 4B Sales Tax Nonmajor Governmental Funds 343,590 Fund debt service payment TIF Nonmajor Governmental Funds 105,000 Fund debt service payment Total $3.541.879 Note 17 - 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. However, the City was not successful in defending one lawsuit and has been ordered to pay damages ranging from $117,000 to $142,000. Though the City intends on appealing the decision, $117,000 has been accrued in the General Fund for this lawsuit. 54 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 17 - COMMITMENTS AND CONTINGENCIES (CONT'D.) Accrued Vacation and Sick Leave The City's liability for accrued vacation and sick leave excluding the amount recorded in the proprietary funds was $5,644,966 at September 30, 2003. This accrual is recorded in the General Long-Term Debt Account Group, except for$290,000 which is believed by City management to be currently payable from available resources and is recorded in the General Fund. 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, 2003, these costs were not material to the financial statements. 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, 2003 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. Multi-Purpose Events Center The City owns an activities complex known as the Multi-Purpose Events Center (MPEC). These assets are recorded in the government-wide statement of net assets. The management and operations of the MPEC are contracted with a third party in which the City will fund any operating deficits of the MPEC from the City's undesignated hotel/motel taxes. During the year ended September 30, 2003, the City paid $746,102 to the third party to fund these operating deficits. 55 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30, 2003 Note 17 - COMMITMENTS AND CONTINGENCIES (CONT'D.) Construction Contracts At September 30, 2003, 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 $ 1,461,382 Nonmajor Governmental Funds 3,542,214 Water and Sewer Fund 19,413,034 Sanitation Fund 415,392 Nonmajor Enterprise Funds 2,376,500 Internal Service Funds 28,126 Total contract commitments $27,236,648 Economic Development Contracts - Discretely Presented Component Units At September 30, 2003, the Wichita Falls Economic Development Corporation and the Wichita Falls 4B Sales Tax Corporation were committed to several economic development contracts. The- amounts for which the component units are committed to complete these contracts are as follows: Wichita Falls Economic Development Corporation $1,241,000 Wichita Falls 4B Sales Tax Corporation 500,000 Total contract commitments $1.741.0QQ 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, North Texas Regional Narcotics Task Force, 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. Note 18 - 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, 2003 is as follows: 56 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2003 Note 18 - CONDENSED FINANCIAL INFORMATION FOR DISCRETELY PRESENTED COMPONENT UNITS Wichita Falls Wichita Falls Multi- Economic 4B Sales Wichita Falls Purpose Development Tax Reinvestment Events Corporation Corporation Zone#1 Center Totals Condensed statement of net assets: Cash,investments and other capital assets $12,590,960 $7,180,168 $565,890 $ 326,266 $20,663,284 Capital assets,net of accumulated depreciation - - - 34.043 34.043 Total assets 12,590,960 7,180,168 565.890 360.309 20.697.327 Accounts payable and other current liabilities 19,027 - 22,473 385,385 426,885 Amount due to primary govemment - 2.013.519 - - 2.013.519 Total liabilities 19.027 2.013.519 22,473 385,385 2.440.404 Net assets $12.571,933 $5.166.649 $543.417 ($ 25.076) $18.256.923 Condensed statement of activities: Expenses: Multi-Purpose Events Center $ - $ - $ - $3,279,996 $ 3,279,996 Community development 1.891.435 188.139 64.490 - 2.144.064 Total expenses 1.891.435 188.139 64.490 3,279.996 5.424.060 Program revenues: Charges for services - - - 2,734,487 2,734,487 Operating grants and contributions - - - 5.683 5.683 Total program revenues - - - 2,740,170 2,740,170 Net program expense ( 1.891.435) ( 188.139) ( 64,490) ( 539.826) ( 2.683.890) General revenues: Tax revenues 2,766,455 2,766,455 207,454 - 5,740,364 Non-tax general revenues 215,296 89,896 5,218 - 310,410 Gain on sale of capital assets 5,787 - - - 5,787 Transfers from(to)primary government - ( 2.420.015) ( 105,000) 475.340 ( 2.049.675) Total general revenues and transfers 2.987.538 436.336 107,672 475.340 4.006.886 Change in net assets 1,096,103 248,197 43,182 ( 64,486) 1,322,996 Beginning net assets 11.475.830 4.918.452 500.235 39.410 16,933.927 Ending net assets $12.571.933 $5.166.649 $543,417 ($ 25_076) $18.256.923 57 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2003 Note 19 - SUBSEQUENT EVENT In November 2003, the City issued Combination Tax and Revenue Certificates of Obligation, Series 2003 in the amount of $7,550,000. The proceeds will be used for the construction of a Municipal Public Safety Training Center as well as a Radio Communications Project and a Computer Aided Dispatch I Records Management System. Note 20 - SPECIAL ITEM During the year ended September 30, 2003, the City purchased additional land for the City's landfill and also acquired a permit that allows for above ground storage. These items extended the life of the landfill by 132 years. As a result the percentage of the landfill used decreased from 50% to 12%. As a result, the City's estimated closure and postclosures costs related to the landfill decreased by $1,213,792. This adjustment was recorded as a special item in the Sanitation Fund. Note 21 - PRIOR PERIOD ADJUSTMENT During the year ended September 30, 2003, the City discovered an error made in a prior period by not recording traffic signal inventory. Adjustments related to this error increased the amount of traffic signal inventory and fund balance as of September 30, 2002 by $37,600 in the General Fund. 58 n REQUIRED SUPPLEMENTAL INFORMATION Wichita k.4i‘ EXHIBIT B-1 CITY OF WICHITA FALLS, TEXAS REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE-GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2003 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Taxes $ 39,962,192 $ 39,962,192 $ 41,160,049 $ 1,197,857 Charges for services 2,154,559 2,222,359 2,155,570 (66,789) Licenses and permits 1,981,682 1,981,682 2,001,117 19,435 Fines and forfeitures 2,077,780 2,077,780 1,569,135 (508,645) Intergovernmental revenue 68,500 68,500 81,979 13,479 Miscellaneous revenue 688,325 694,325 1,501,712 807,387 Total revenues 46,933,038 47,006,838 48,469,562 1,462,724 Expenditures: Current: Administrative services 7,901,407 8,404,246 8,591,274 (187,028) Police 15,092,152 14,930,840 14,764,510 166,330 Fire 9,381,440 9,459,488 9,444,152 15,336 Parks and recreation 3,448,354 3,520,146 3,397,352 122,794 Accounting/finance 1,790,948 1,766,274 1,604,484 161,790 Community development 1,272,691 1,332,189 1,247,973 84,216 Public works 4,368,232 4,733,494 4,467,697 265,797 Health 2,320,117 2,456,012 2,360,222 95,790 Traffic and transportation 1,541,361 1,569,616 1,534,507 35,109 Capital outlay 2,366,972 2,092,584 1,238,062 854,522 Total expenditures 49,483,674 50,264,889 48,650,233 1,614,656 Excess of revenues over(under)expenditures (2,550,636) (3,258,051) (180,671) 3,077,380 Other financing sources(uses): Transfers in 1,858,234 1,858,234 1,858,235 1 Transfers in-component units - - 45,762 45,762 Transfers out (506,814) (455,428) (530,694) (75,266) Total other financing sources(uses) 1,351,420 1,402,806 1,373,303 (29,503) Excess of revenues and other sources over(under)expenditures and other uses (1,199,216) (1,855,245) 1,192,632 3,047,877 Fund balance-beginning 9,052,740 9,052,740 9,052,740 - Prior period adjustment - - 37,600 37,600 Fund balance-ending $ 7,853,524 $ 7,197,495 $ 10,282,972 $ 3,085,477 59 CITY OF WICHITA FALLS, TEXAS NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2003 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 general purpose 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 all governmental funds on a basis which is consistent with generally accepted accounting principles. However, the budgets for the Capital Projects Funds are adopted for specific projects, are not binding, and may exceed one year. 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 $545,056 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. During the year ended September 30, 2003, the City's General Fund expenditures exceeded appropriations in Administrative Services by $187,028. 60 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) 12/31/93 $ 40,008,407 $ 49,758,664 80.4% $ 9,750,257 $ 20,657,576 47.2% 12/31/94 42,728,204 53,833,753 79.4% 11,105,549 21,343,153 52.0% 12/31/95 46,420,960 59,450,213 78.1% 13,029,253 22,768,262 57.2% 12/31/96 48,533,798 62,979,458 77.1% 14,445,660 23,859,734 60.5% 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% 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. 61 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) 4/30/94(b) $ - $ - $ - $ -- - 4/30/95(a) 14,966,425 17,882,791 83.7% 2,916,366 4,051,390 72.0% 12/31/95 16,529,273 18,648,105 88.6% 2,118,832 4,214,096 50.3% 12/31/96 18,276,026 20,042,040 91.2% 1,766,014 4,794,594 36.8% 12/31/97 19,916,831 25,193,592 79.1% 5,276,761 4,712,854 112.0% 12/31/98(b) - - - - - - 12/31/99(b) - - - - - - 12/31/00 26,930,018 31,419,892 85.7% 4,489,874 5,858,962 76.6% 12/31/01 (b) - - - - - - 12/31/02(c) 27,439,565 37,003,896 74.2% 9,564,331 6,609,807 144.7% Analysis of the dollar amounts of the actuarial value of assets,actuarial accrued liability,and unfunded actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a percentage of the actuarial accrued liability provides one indication of the City's funding status on a going-concern basis. Analysis of this percentage over time indicates whether the system is becoming financially stronger or weaker. Generally,the greater this percentage,the stronger the pension plan. Trends in unfunded actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing the unfunded actuarial accrued liability as a percentage of annual covered payroll approximately adjusts for the effects of inflation and aids analysis of the City's progress made in accumulating sufficient assets to pay benefits when due. Generally,the smaller the percentage,the stronger the pension plan. (a) During 1995,the plan was amended to increase standard retirement benefits from 2.01%to 2.10%of the firefighter's average salary multiplied by years of service. Additionally,the minimum benefit for retired firefighters was raised from$300 per month to$400 per month. Widows minimum monthly payments were raised to remain two-thirds of the minimum for retired firefighters. Two additional payment options were also added to the plan's provisions. These amendments increased the actuarial accrued liability as of October 1, 1995 by approximately$660,000. (b) Historical trend information is presented for as many years as such information about the plan is available. No actuarial valuation or update was performed as of these dates. Texas state law does not require an actuarial valuation to be completed annually. The last actuarial valuation update was completed as of December 31,2002. Additional historical trend information will be disclosed in future periods as it becomes available. (c) For the 2002 valuation,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. 62 COMBINING FINANCIAL STATEMENTS i 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 Agreement Fund The Home Investment Partnership Agreement Fund accounts for federal funds received to provide home ownership opportunities to low income, first-time homebuyers through the acquisition, rehabilitation and resale of single-family dwellings that are currently owned by governmental agencies. Hotel/Motel Tax Fund The Hotel/Motel Tax Fund accounts for revenues derived from an occupancy tax which is expended on programs promoting the growth of the City of Wichita Falls. 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. MPEC Coliseum This fund was established to account for the construction of the Multi-Purpose Events Center's (MPEC) Coliseum. Miscellaneous Capital Projects Funds This fund is an accumulation of several projects that have been undertaken over the years including library renovations, street improvements and drainage improvements. Permanent Fund The permanent fund is used to account for principal trust amounts received and related interest income. 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 30,2003 Special Revenue Home Community Investment Hotel/ Miscellaneous Development Section 8 Partnership Motel Special Block Grant Housing Agreement Tax Revenue ASSETS Cash and cash equivalents $ - $ 985,966 $ 17,336 $ 402,920 $ 1,916,306 Receivables: Taxes and assessments - - - 91,583 30 Component Unit - - - - - Government agencies 1,725,682 - 693,158 - 772,051 Other 2,136 9,274 - - - Prepaid items 18,000 - - - 2,025 Other assets - - - - 3,000 Total assets $ 1,745,818 $ 995,240 $ 710,494 $ 494,503 $ 2,693,412 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable-trade $ 58,358 $ 2,897 $ 29,073 $ 7,691 $ 108,318 Accrued payroll 3,640 5,603 1,641 - 38,576 Payable to other City funds 567,115 - - - 697,930 Payable to government agencies - 270,382 - - 1,907 Tax anticipation notes payable - - - - - Notes payable - - - - - Other liabilities 87,985 - 44,744 - 47,732 Deferred revenue - - - - 47,915 Total liabilities 717,098 278,882 75,458 7,691 942,378 Fund balance: Reserved for encumbrances 386,147 - - - 47,954 Reserved for prepaid items 18,000 - - - 2,025 Reserved for debt service - - - - - Reserved for perpetual care - - - - - Unreserved: Designated for subsequent years expenditures 624,573 716,358 635,036 - 1,701,055 Undesignated - - - 486,812 - Total fund balance 1,028,720 716,358 635,036 486,812 1,751,034 Total liabilities and fund balance $ 1,745,818 $ 995,240 $ 710,494 $ 494,503 $ 2,693,412 63 EXHIBIT C-1 Permanent Debt Service Capital Projects Fund Total Miscellaneous Nonmajor Debt Excess 4B Sales MPEC Capital Perpetual Governmental Service Sales Tax Tax Projects Coliseum Projects Care Funds $ 299,683 $ 197,293 $ - $ 40,376 $ 4,686,307 $ 591,662 $ 9,137,849 122,221 - - - - - 213,834 - - 2,013,519 - - - 2,013,519 14,664 91,666 - - - - 3,297,221 - - - - 145 - 11,555 - - - - - - 20,025 - - - - - - 3,000 $ 436,568 $ 288,959 $ 2,013,519 $ 40,376 $ 4,686,452 $ 591,662 $ 14,697,003 $ - $ - $ 340,982 $ 1,750 $ - $ - $ 549,069 - - - - - - 49,460 - - - - - - 1,265,045 - - - - - - 272,289 - - - - 340,000 - 340,000 - - - 288,739 - - 288,739 - - 75,564 890,706 - - 1,146,731 127,561 - - - - - 175,476 127,561 - 416,546 1,181,195 340,000 - 4,086,809 - - 1,596,973 - - - 2,031,074 - - - - - - 20,025 309,007 288,959 - - - - 597,966 - - - - - 591,662 591,662 - - - - 4,603,750 - 8,280,772 - - - (1,140,819) (257,298) - (911,305) 309,007 288,959 1,596,973 (1,140,819) 4,346,452 591,662 10,610,194 $ 436,568 $ 288,959 $ 2,013,519 $ 40,376 $ 4,686,452 $ 591,662 $ 14,697,003 • CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2003 Special Revenue Home Community Investment Hotel/ Miscellaneous Development Section 8 Partnership Motel Special Block Grant Housing Agreement Tax Revenue Revenues: Taxes $ - $ - $ - $ 1,199,810 $ - Charges for services 17,211 - - - 165,897 Fines and forfeitures - - - - 204,314 Intergovernmental revenue 1,828,000 3,901,416 621,000 - 3,037,328 Contributions - - - - 90,762 Miscellaneous revenue 31,441 17,119 32,129 12,517 528,204 Total revenues 1,876,652 3,918,535 653,129 1,212,327 4,026,505 Expenditures: Current: Administrative services 202,502 - - 221,411 154,243 Police - - - - 821,957 Fire - - - - 12,717 Parks and recreation 138,521 - - - 384,484 Community development 1,509,874 3,852,206 604,823 - 354,420 Public works 544,063 - - - 106,115 Health 100,993 - - 2,052,554 Traffic and transportation - - - - 388,669 MPEC Coliseum - - - - - Capital outlay 343,224 3,818 - - 61,899 Debt service: Principal retirement - - - - - Interest and paying agent fees - - - - - Total expenditures 2,839,177 3,856,024 604,823 221,411 4,337,058 Excess of revenues over(under)expenditures (962,525) 62,511 48,306 990,916 (310,553) Other financing sources(uses): Transfers in - - - - 634,879 Transfers in-component units - - - - - Transfers out (86,837) (30,902) - (783,073) (109,525) Transfers out-component units - - - (746,102) - Proceeds of refunding bonds - - - - - Payment to refunded bonds escrow agent - - - - - Total other financing sources(uses) (86,837) (30,902) - (1,529,175) 525,354 Excess of revenues and other sources over(under)expenditures and other uses (1,049,362) 31,609 48,306 (538,259) 214,801 Fund balance-beginning 2,078,082 684,749 586,730 1,025,071 1,536,233 Fund balance-ending $ 1,028,720 $ 716,358 $ 635,036 $ 486,812 $ 1,751,034 64 i EXHIBIT C-2 Permanent Debt Service Capital Projects Fund Total Miscellaneous Nonmajor Debt Excess 4B Sales MPEC Capital Perpetual Governmental Service Sales Tax Tax Projects Coliseum Projects Care Funds • $ 1,973,581 $ 91,666 $ - $ - $ - $ - $ 3,265,057 - - - - - 183,108 - - - - - 204,314 - - - - - - 9,387,744 - - 1,896,306 - - 1,987,068 16,977 4,457 - 21,394 59,580 25,395 749,213 1,990,558 96,123 - 1,917,700 59,580 25,395 15,776,504 - - - - - - 578,156 - - 199 - - - 822,156 - - - - - - 12,717 - - - - - - 523,005 - - - - - 6,321,323 - - - - 193,865 - 844,043 - - - - - - 2,153,547 - - - - - - 388,669 - - - 57,848 - - 57,848 - - 2,513,530 6,172,987 - - 9,095,458 2,120,000 - - - - - 2,120,000 854,457 - - 46,510 23,590 - 924,557 2,974,457 - 2,513,729 6,277,345 217,455 - 23,841,479 (983,899) 96,123 (2,513,729) (4,359,645) (157,875) 25,395 (8,064,975) 573,786 - - 598,997 343,590 - 2,151,252 448,590 - 2,076,425 225,000 - - 2,750,015 - (150,000) - - - - (1,160,337) - - - - - - (746,102) 2,450,000 - - - - - 2,450,000 (2,450,000) - - - - - (2,450,000) 1,022,376 (150,000) 2,076,425 823,997 343,590 - 2,994,828 38,477 (53,877) (437,304) (3,535,648) 185,715 25,395 (5,070,147) 270,530 342,836 2,034,277 2,394,829 4,160,737 566,267 15,680,341 $ 309,007 $ 288,959 $ 1,596,973 $ (1,140,819) $ 4,346,452 $ 591,662 $ 10,610,194 -7s ..1 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. Golf Fund The Golf Fund was established to account for the operating revenues and expenses of the Weeks Park Golf Course. The operations of the golf course, which include maintenance, the pro shop and food service, are supported by green and cart fees, and merchandise and food sales. 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, 2003 Municipal Kickapoo Golf Airport Airport ASSETS Current assets: Cash and cash equivalents $ 64,242 $ 293,481 $ 138,588 Receivables (net of allowance for uncollectible accounts): Customer and trade - - - Government agencies - - - Other 93 24,797 27,500 Inventory 78,497 - 18,853 Prepaid items - 2,626 4,408 Total current assets 142,832 320,904 189,349 Capital assets, net of accumulated depreciation 91,894 738,780 1,404,728 Total assets 234,726 1,059,684 1,594,077 LIABILITIES Current liabilities payable from current assets: Accounts payable -trade 25,311 26,885 21,628 Accrued payroll 8,995 692 2,773 Accrued vacation and sick leave 10,676 2,506 5,586 Payable to government agencies 3,169 2,203 169 Other liabilities 5,495 - 4,761 Total current liabilities payable from current assets 53,646 32,286 34,917 Net assets: Invested in capital assets 91,894 738,780 1,404,728 Unrestricted 89,186 288,618 154,432 Total net assets $ 181,080 $ 1,027,398 $ 1,559,160 65 EXHIBIT D-1 Total Nonmajor Stormwater Enterprise Transit Drainage Funds $ 12,475 $ 2,328,919 $ 2,837,705 93,112 93,112 55,257 - 55,257 20 - 52,410 - - 97,350 - 7,034 67,752 2,422,031 3,142,868 634,681 64,440 2,934,523 702,433 2,486,471 6,077,391 5,183 950 79,957 11,891 - 24,351 16,878 - 35,646 - - 5,541 11,269 21,525 33,952 12,219 167,020 634,681 64,440 2,934,523 33,800 2,409,812 2,975,848 $ 668,481 $ 2,474,252 $ 5,910,371 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2003 Municipal Kickapoo Golf Airport Airport Operating revenues: Charges for services $ 590,833 $ - $ 6,488 Rents, concessions and other 96,320 359,006 342,025 Total operating revenues 687,153 359,006 348,513 Operating expenses: Personnel services 497,480 39,107 154,293 Supplies and materials 85,987 1,024 3,721 Maintenance and repairs 23,582 35,057 16,641 Utilities and other services 72,777 54,949 52,458 Insurance and contract support 2,781 8,697 12,827 Other expenses 45,095 36,006 30,414 Depreciation and amortization 14,733 78,695 50,487 Total operating expenses 742,435 253,535 320,841 Operating income (loss) (55,282) 105,471 27,672 Nonoperating revenues (expenses): Interest income 755 4,822 2,977 Intergovernmental operating grants - - - Total nonoperating revenues (expenses) 755 4,822 2,977 Income (loss) before transfers (54,527) 110,293 30,649 Transfers: Transfers in - - - Transfers out (28,285) (186,688) (135,188) Net transfers (28,285) (186,688) (135,188) Net income (loss) (82,812) (76,395) (104,539) Net assets - beginning 263,892 1,103,793 1,663,699 Net assets - ending $ 181,080 $ 1,027,398 $ 1,559,160 66 EXHIBIT D-2 Total Non major Stormwater Enterprise Transit Drainage Funds $ 161,521 $ 1,035,684 $ 1,794,526 (772) - 796,579 160,749 1,035,684 2,591,105 632,217 - 1,323,097 90,828 - 181,560 174,127 - 249,407 40,426 570 221,180 80,316 - 104,621 35,477 5,606 152,598 21,465 4,457 169,837 1,074,856 10,633 2,402,300 (914,107) 1,025,051 188,805 22,182 30,736 817,451 - 817,451 817,451 22,182 848,187 (96,656) 1,047,233 1,036,992 201,975 - 201,975 (350,161) 201,975 - (148,186) 105,319 1,047,233 888,806 563,162 1,427,019 5,021,565 $ 668,481 $ 2,474,252 $ 5,910,371 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2003 Municipal Kickapoo Golf Airport Airport Cash flows from operating activities: Receipts from customers and users $ 687,060 $ 357,459 $ 321,844 Payments to suppliers (304,213) (129,552) (136,445) Payments to employees (411,327) (29,427) (116,069) Net cash provided (used) by operating activities (28,480) 198,480 69,330 Cash flows from noncapital financing activities: Intergovernmental operating grants - - - Transfers out to other funds (28,285) (186,688) (135,188) Transfers from other funds - -Net cash provided (used) by noncapital financing activities (28,285) (186,688) (135,188) Cash flows from capital and related financing activities: Acquisition and construction of capital assets (45,422) (21,870)Net cash provided by(used for) capital and related financing activities (45,422) (21,870) - Cash flows from investing activities: Interest on investments 755 4,822 2,977 Net cash provided by investing activities 755 4,822 2,977 Net Increase (Decrease) in Cash and Cash Equivalents (101,432) (5,256) (62,881) Cash and Cash Equivalents - Beginning 165,674 298,737 201,469 Cash and Cash Equivalents- Ending $ 64,242 $ 293,481 $ 138,588 67 EXHIBIT D-3 (Page 1 of 2) Total Nonmajor Stormwater Enterprise Transit Drainage Funds $ 160,729 $ 1,051,538 $ 2,578,630 (557,317) (5,226) (1,132,753) (491,255) - (1,048,078) (887,843) 1,046,312 397,799 1,025,232 - 1,025,232 (111,651) - (461,812) 28,855 - 28,855 942,436 - 592,275 (42,169) (50,585) (160,046) (42,169) (50,585) (160,046) 22,182 30,736 22,182 30,736 12,424 1,017,909 860,764 51 1,311,010 1,976,941 $ 12,475 $ 2,328,919 $ 2,837,705 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF CASH FLOWS (CONT'D.) NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2003 Municipal Kickapoo Golf Airport Airport Cash flows from operating activities: Operating income (loss) $ (55,282) $ 105,471 $ 27,672 Adjustments to reconcile operating income (loss) to net cash provided by(used in) operating activities: Depreciation and amortization 14,733 78,695 50,487 Customer deposits received - - 4,761 (Increase) decrease in current assets: Receivables: Customer and trade - - - Other (93) (1,547) (26,669) Inventory 1,021 - (1,059) Prepaid items 2,122 2,209 1,723 Increase (decrease) in current liabilities: Accounts payable -trade 4,613 17,715 8,876 Accrued payroll 99 235 820 Accrued vacation and sick leave 2,163 824 2,925 Payable to government agencies (522) (2,412) (206) Deferred revenue - (2,710) - Other liabilities 2,666 - - Total adjustments 26,802 93,009 41,658 Net cash provided by(used in) operating activities $ (28,480) $ 198,480 $ 69,330 68 EXHIBIT D-3 (Page 2 of 2) Stormwater Transit Drainage Totals $ (914,107) $ 1,025,051 $ 188,805 21,465 4,457 169,837 4,761 4,586 4,586 - (20) - (28,329) (38) 1,016 - 7,070 1,430 950 33,584 2,373 - 3,527 5,912 (3,140) - (2,710) 11,268 13,934 26,264 21,261 208,994 $ (887,843) $ 1,046,312 $ 397,799 Wichita 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. P 9 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, 2003 Employee Fleet Duplicating Benefit Maintenance Services Trust Totals ASSETS Current assets: Cash and cash equivalents $ 344,008 $ 84,723 $ 483,100 $ 911,831 Receivables: Other City funds - - 402,957 402,957 Other 20,637 - - 20,637 Inventory 763,676 9,207 - 772,883 Prepaid items 8,599 2,711 - 11,310 Total current assets 1,136,920 96,641 886,057 2,119,618 Capital assets, net of accumulated depreciation 14,843,934 83,787 2,083 14,929,804 Total assets 15,980,854 180,428 888,140 17,049,422 LIABILITIES Current liabilities: Accounts payable-trade 329,744 7,221 20,417 357,382 Accrued payroll 35,084 1,083 2,663 38,830 Accrued vacation and sick leave 60,611 1,284 - 61,895 Estimated health claims payable - - 853,999 853,999 Other liabilities 300 - - 300 Total current liabilities 425,739 9,588 877,079 1,312,406 NET ASSETS Invested in capital assets 14,843,934 83,787 2,083 14,929,804 Unrestricted 711,181 87,053 8,978 807,212 Total net assets $ 15,555,115 $ 170,840 $ 11,061 $ 15,737,016 69 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, 2003 Employee Fleet Duplicating Benefit Maintenance Services Trust Totals Operating revenues: Charges for services $ 6,927,686 $ 268,917 $ 36,337 $ 7,232,940 Rents, concessions and other 78,883 5,295 297,284 381,462 Contributions - - 5,962,341 5,962,341 Total operating revenues 7,006,569 274,212 6,295,962 13,576,743 Operating expenses: Personnel services 1,580,1.74 67,748 146,526 1,794,448 Supplies and materials 1,959,931 50,542 3,325 2,013,798 Maintenance and repairs 1,622,869 14,403 - 1,637,272 Utilities and other services 83,063 183 16,594 99,840 Insurance and contract support 93,409 - 6,794,633 6,888,042 Other expenses 133,672 110,734 7,188 251,594 Depreciation and amortization 2,984,053 10,655 231 2,994,939 Total operating expenses 8,457,171 254,265 6,968,497 15,679,933 Operating income(loss) (1,450,602) 19,947 (672,535) (2,103,190) Nonoperating revenues (expenses): Interest income - - 16,873 16,873 Loss on sale of capital assets (46,633) - - (46,633) Total nonoperating revenues (expenses) (46,633) - 16,873 (29,760) Income(loss)before transfers (1,497,235) 19,947 (655,662) (2,132,950) Transfers: Transfers in 372,974 - - 372,974 Transfers out (312,000) - - (312,000) Total transfers 60,974 - - 60,974 Net income(loss) (1,436,261) 19,947 (655,662) (2,071,976) Net assets-beginning 16,991,376 150,893 666,723 17,808,992 Net assets-ending $ 15,555,115 $ 170,840 $ 11,061 $ 15,737,016 70 EXHIBIT E-3 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2003 Employee Fleet Duplicating Benefit Maintenance Services Trust Totals Cash flows from operating activities: Receipts from customers and users $ 6,998,888 $ 274,212 $ 5,893,005 $ 13,166,105 Payments to suppliers (4,074,935) (196,005) (6,634,126) (10,905,066) Payments to employees (1,225,445) (50,383) (114,613) (1,390,441) Net cash provided (used)by operating activities 1,698,508 27,824 (855,734) 870,598 1 Cash flows from noncapital financing activities: Transfers in from other funds 372,974 - - 372,974 Transfers out to other funds (312,000) - - (312,000) Net cash provided by noncapital financing activities 60,974 - - 60,974 Cash flows from capital and related financing activities: Acquisition of capital assets (1,859,869) (4,775) (2,314) (1,866,958) Proceeds from sale of fixed assets 102,403 - - 102,403 Net cash used for capital and related financing activities (1,757,466) (4,775) (2,314) (1,764,555) Cash flows from investing activities: Interest on investments - - 16,873 16,873 Net Increase(Decrease)in Cash and Cash Equivalents 2,016 23,049 (841,175) (816,110) Cash and Cash Equivalents- Beginning 341.992 61,674 1,324,275 1,727,941 Cash and Cash Equivalents-Ending $ 344,008 $ 84,723 $ 483,100 $ 911,831 Cash flows from operating activities: Operating income(loss) $ (1,450,602) $ 19,947 $ (672,535) $ (2,103,190) Adjustments to reconcile operating income to net cash provided(used)by operating activities: Depreciation and amortization 2,984,053 10,655 231 2,994,939 (Increase)decrease in current assets: Receivables: Other City funds - - (758,824) (758,824) Other (7,681) - - (7,681) Inventory 1,365 1,576 - 2,941 Prepaid items (4,220) 4,631 - 411 Increase(decrease)in current liabilities: Accounts payable-trade 151,092 (10,488) (16,786) 123,818 Accrued payroll 8,224 219 484 8,927 Accrued vacation and sick leave 16,477 1,284 - 17,761 Payable to other City funds - - 355,867 355,867 Estimated health claims payable - - 235,829 235,829 Other liabilities (200) - - (200) Total adjustments 3,149,110 7,877 (183,199) 2,973,788 Net cash provided(used)by operating activities $ 1,698,508 $ 27,824 $ (855,734) $ 870,598 71 I 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/Wichita County Multi-Pupose Events Center The Wichita Falls/Wichita County Multi-Purpose Events Center (a nonprofit entity) was established to operate the Multi-Purpose Events Center (Center) for the City. The Center consists of a Coliseum, an Exhibit Hall, and an Agricultural Complex. 11 EXHIBIT F-1 CITY OF WICHITA FALLS, TEXAS COMBINING BALANCE SHEET COMPONENT UNITS SEPTEMBER 30, 2003 Wichita Falls WF/WC Economic Wichita Falls Wichita Falls Multi-Purpose Development 4B Sales Tax Reinvestment Events Corporation Corporation Zone#1 Center Totals ASSETS , Cash and cash equivalents $12,094,331 $ 6,683,539 $ 537,176 $ 164,112 $ 19,479,158 Receivables: Taxes and assessments - - 28,714 - 28,714 Government agencies 496,629 496,629 - - 993,258 Other - - - 90,407 90,407 Inventory - - - 41,576 41,576 Prepaid items - - - 22,711 22,711 Other assets - - - 7,460 7,460 Capital assets, net of accumulated depreciation - - - 34,043 34,043 Total assets $ 12,590,960 $ 7,180,168 $ 565,890 $ 360,309 $ 20,697,327 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable-trade $ 19,027 $ - $ 22,473 $ 39,410 $ 80,910 Accrued payroll - - - 19,520 19,520 Payable to primary government - 2,013,519 - - 2,013,519 Payable to government agencies - - - 249,221 249,221 Other liabilities - - - 28,370 28,370 Long-term liabilities - - - 48,864 48,864 Total liabilities 19,027 2,013,519 22,473 385,385 2,440,404 Equity and other credits: Investment in capital assets - - - (14,821) (14,821) Fund balance: Reserved for encumbrances 1,241,000 500,000 - - 1,741,000 Unreserved: Designated for subsequent years expenditures 11,330,933 • 4,666,649 543,417 (10,255) 16,530,744 Total equity and other credits 12,571,933 5,166,649 543,417 (25,076) 18,256,923 Total liabilities and fund balance $ 12,590,960 $ 7,180,168 $ 565,890 $ 360,309 $ 20,697,327 72 EXHIBIT F-2 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -COMPONENT UNITS FOR THE YEAR ENDED SEPTEMBER 30, 2003 Wichita Falls WF/AC Economic Wchita Falls Wchita Falls Multi-Pu roc:. Development 4B Sales Tax Reinvestment Eveiits Corporation Corporation Zone#1 Center Totals Revenues: Taxes $ 2,766,455 $ 2,766,455 $ 207,454 $ - $ 5,740,364 Charges for services - - - 2,734,487 2,734,487 Miscellaneous revenue 215,296 89,896 5,218 5,683 316,093 Total revenues 2,981,751 2,856,351 212,672 2,740,170 8,790,944 Expenditures: Current: Community development 1,891,435 188,139 64,490 - 2,144,064 Multi-Purpose Events Center - - - 3,279,996 3,279,996 Total expenditures 1,891,435 188,139 64,490 3,279,996 5,424,060 Excess revenues over(under)expenditures 1,090.316 2.668,212 148,182 (539,826) 3,366,884 Other financing sources(uses): Sale of capital assets 605,787 - - - 605,787 Transfers in-primary government - - - 746,102 746,102 Transfers out-primary government - (2,420,015) (105,000) (270,762) (2,795,777) Total other financing sources(uses) 605,787 (2,420,015) (105,000) 475,340 (1,443,888) Excess of revenues and other sources over(under)expenditures and other uses 1,696,103 248,197 43,182 (64,486) 1,922,996 Fund balance-beginning 10,875,830 4,918,452 500,235 39,410 16,333,927 Fund balance-ending $ 12,571,933 $ 5,166,649 $ 543,417 $ (25,076) $ 18,256.923 73 Wichita Wichita i CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDED DEBT AND INTEREST MATURITIES SEPTEMBER 30, 2003 Fiscal Year General Obligation Bonds Water and Sewer PriorityLien Revenue Bonds 9 Ending Serial Bond Interest Total Bonds Serial Bond Interest Total Bonds September 30, Maturities on Bonds and Interest Maturities(1) on Bonds and Interest 2004 $ 2,230,000 $ 654,890 $ 2,884,890 $ 3,355,440 $ 6,510,173 $ 9,865,613 2005 2,335,000 577,171 2,912,171 3,509,709 6,359,888 9,869,597 2006 2,455,000 487,431 2,942,431 3,658,947 6,201,857 9,860,804 2007 880,000 387,569 1,267,569 3,838,084 6,029,678 9,867,762 2008 910,000 350,169 1,260,169 1,702,180 5,847,841 7,550,021 2009 945,000 312,631 1,257,631 1,761,394 5,782,781 7,544,175 2010 745,000 273,650 1,018,650 1,850,579 5,715,176 7,565,755 2011 340,000 241,987 581,987 1,919,611 5,636,226 7,555,837 2012 355,000 227,113 582,113 1,998,606 5,553,869 7,552,475 2013 370,000 210,694 580,694 3,452,440 5,459,546 8,911,986 2014 385,000 193,581 578,581 3,630,067 5,280,780 8,910,847 2015 405,000 175,775 580,775 3,817,567 5,092,463 8,910,030 2016 425,000 154,512 579,512 4,014,931 4,893,706 8,908,637 2017 450,000 132,200 582,200 4,212,151 4,684,400 8,896,551 2018 475,000 108,013 583,013 4,439,231 4,464,494 8,903,725 2019 500,000 82,481 582,481 8,136,144 4,232,338 12,368,482 2020 530,000 55,606 585,606 8,564,874 3,798,306 12,363,180 2021 555,000 28,444 583,444 9,018,266 3,340,894 12,359,160 2022 - - - 9,456,786 2,892,394 12,349,180 2023 - - - 9,924,985 2,421,644 12,346,629 2024 - - - 10,442,382 1,895,336 12,337,718 2025 - - - 10,989,377 1,341,250 12,330,627 2026 - - - 11,526,453 792,750 12,319,203 2027 - - - 4,343,135 217,000 4,560,135 $ 15,290,000 $ 4,653,917 $ 19,943,917 $ 129,563,339 $ 104,444,790 $ 234,008,129 (1)Includes amortization of bond premium of$1,468,339. 74 EXHIBIT G-1 Water and Sewer Subordinate Lien Revenue Bonds Totals-All Bonded Debt Serial Bond Interest Total Bonds Serial Bond Interest Total Bonds Maturities on Bonds and Interest Maturities on Bonds and Interest $ 800,000 $ 1,731,300 $ 2,531,300 $ 6,385,440 $ 8,896,363 $ 15,281,803 830,000 1,695,975 2,525,975 6,674,709 8,633,034 15,307,743 870,000 1,662,825 2,532,825 6,983,947 8,352,113 15,336,060 900,000 1,627,545 2,527,545 5,618,084 8,044,792 13,662,876 3,250,000 1,590,885 4,840,885 5,862,180 7,788,895 13,651,075 3,385,000 1,460,750 4,845,750 6,091,394 7,556,162 13,647,556 3,505,000 1,320,997 4,825,997 6,100,579 7,309,823 13,410,402 3,660,000 1,173,664 4,833,664 5,919,611 7,051,877 12,971,488 3,820,000 1,016,174 4,836,174 6,173,606 6,797,156 12,970,762 2,625,000 847,997 3,472,997 6,447,440 6,518,237 12,965,677 2,750,000 722,016 3,472,016 6,765,067 6,196,377 12,961,444 2,885,000 588,538 3,473,538 7,107,567 5,856,776 12,964,343 ' 3,025,000 446,960 3,471,960 7,464,931 5,495,178 12,960,109 3,180,000 298,350 3,478,350 7,842,151 5,114,950 12,957,101 3,320,000 152,388 3,472,388 8,234,231 4,724,895 12,959,126 - - - 8,636,144 4,314,819 12,950,963 - - - 9,094,874 3,853,912 12,948,786 - - - 9,573,266 3,369,338 12,942,604 - - - 9,456,786 2,892,394 12,349,180 - - - 9,924,985 2,421,644 12,346,629 - - - 10,442,382 1,895,336 12,337,718 - - - 10,989,377 1,341,250 12,330,627 - - - 11,526,453 792,750 12,319,203 - - - 4,343,135 217,000 4,560,135 $ 38,805,000 $ 16,336,364 $ 55,141,364 $ 183,658,339 $ 125,435,071 $ 309,093,410 CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE SEPTEMBER 30, 2003 Final Interest Rates Issue Maturity Annual and(Dates) Date Date Serial Payments General Obligation Bonds: General Obligation Refunding 4.10,4.40,4.60,4.70 04/01/96 09/01/06 570,000 (1997) Bonds,Series 1996 4.80,5.00,5.10,5.20, 775,000 (1998) 5.30 805,000 (1999) (3/1,9/1) 845,000 (2000) 885,000 (2001) 925,000 (2002) 970,000 (2003) 1,020,000 (2004) 1,075,000 (2005) 1,130,000 (2006) 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) General Obligation Refunding 1.60,2.05,2.35 09/23/03 09/01/06 775,000 (2004) Bonds,Series 2003 815,000 (2005) 860,000 (2006) Total General Obligation Bonds 75 EXHIBIT G-2 (Page 1 of 4) Bonds Retired or Authorized Issued Refunded Outstanding $ 9,000,000 $ 9,000,000 $ 5,775,000 $ 3,225,000 10,205,000 10,205,000 590,000 _9,615,000 2,450,000 2,450,000 - 2,450,000 21,655,000 21,655,000 6,365,000 15,290,000 CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE(CONT'D.) SEPTEMBER 30, 2003 Final Interest Rates Issue Maturity Annual and(Dates) Date Date Serial Payments Revenue Bonds: Priority Lien: Water and Sewer System 3.90,4.00,4.20,4.30, 06/01/95 08/01/07 95,000 (1996) Refunding Revenue Bonds, 4.50,4.60,4.70,4.80, 920,000 (1997) Series 1995 5.00,5.10,5.20 960,000 (1998) (2/1,8/1) 1,000,000 (1999) 1,045,000 (2000) 1,090,000 (2001) 1,140,000 (2002) 1,195,000 (2003) 1,250,000 (2004) 1,310,000 (2005) 1,375,000 (2006) 1,450,000 (2007) Water and Sewer System 4.10,4.40,4.60,4.70, 04/01/96 08/01/07 305,000 (1997) Refunding Revenue Bonds, 4.80,4.90,5.00,5.10, 405,000 (1998) Series 1996 5.20,5.30,5.40 425,000 (1999) (2/1,8/1) 440,000 (2000) 465,000 (2001) 490,000 (2002) 510,000 (2003) 535,000 (2004) 565,000 (2005) 595,000 (2006) 625,000 (2007) 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) 76 EXHIBIT G-2 (Page 2 of 4) Bonds Retired or Authorized Issued Refunded Outstanding 12,830,000 12,830,000 7,445,000 5,385,000 5,360,000 5,360,000 3,040,000 2,320,000 5,500,000 5,500,000 995,000 4,505,000 CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE(CONT'D.) SEPTEMBER 30, 2003 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) 3,055,000 (2013) 3,220,000 (2014) 3,395,000 (2015) 3,580,000 (2016) 3,760,000 (2017) 3,975,000 (2018) 8,075,000 (2019) 8,510,000 (2020) 8,970,000 (2021) 9,415,000 (2022) 9,890,000 (2023) 10,415,000 (2024) 10,970,000 (2025) 11,515,000 (2026) 4,340,000 (2027) Water and Sewer System Priority Lien Revenue Bonds,Series 2001 -Premium Total Priority Lien Revenue Bonds Subordinate Lien: Water and Sewer Subordinate Lien 3.35,3.60,3.75,3.85, 06/01/96 08/01/16 100,000 (1998) Revenue Bonds,Series 1996 3.95,4.05,4.15,4.25, 100,000 (1999) 4.35,4.45,4.55,4.65, 105,000 (2000) 4.70,4.75,4.80,4.85, 110,000 (2001) 4.90,4.95,4.95 115,000 (2002) (2/1,8/1) 125,000 (2003) 135,000 (2004) 135,000 (2005) 145,000 (2006) 150,000 (2007) 25,000 (2008) 25,000 (2009) 25,000 (2010) 25,000 (2011) 25,000 (2012) 2,300,000 (2013) 2,440,000 (2014) 2,585,000 (2015) 2,750,000 (2016) 77 EXHIBIT G-2 (Page 3 of 4) Bonds Retired or Authorized Issued Refunded Outstanding 118,770,000 118,770,000 2,885,000 115,885,000 1,634,193 165,854 1,468,339 142,460,000 144,094,193 14,530,854 129,563,339 11,420,000 11,420,000 655,000 10,765,000 CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE(CONT'D.) SEPTEMBER 30,2003 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) Water and Sewer System 3.65,3.75,3.95,4.00, 10/01/98 08/01/12 375,000 (1999) Subordinate Lien Refunding 4.125,4.20,4.30,4.40, 550,000 (2000) Revenue Bonds,Series 1998A 4.50 570,000 (2001) (2/1,8/1) 585,000 (2002) 610,000 (2003) 640,000 (2004) 670,000 (2005) 700,000 (2006) 725,000 (2007) 3,200,000 (2008) 3,335,000 (2009) 3,455,000 (2010) 3,610,000 (2011) 3,770,000 (2012) Total Subordinate Lien Bonds Total Revenue Bonds Total All Bonds 78 EXHIBIT G-2 (Page 4 of 4) Bonds Retired or Authorized Issued Refunded Outstanding 8,060,000 8,060,000 125,000 7,935,000 22,795,000 22,795,000 2,690,000 20,105,000 42,275,000 42,275,000 3,470,000 38,805,000 184,735,000 186,369,193 18,000,854 168,368,339 $ 206,390,000 $ 208,024,193 $ 24,365,854 $ 183,658,339 n i EXHIBIT G-3 CITY OF WICHITA FALLS, TEXAS DEBT SERVICE COVERAGE - REVENUE BONDS SEPTEMBER 30, 2003 Water and Sewer Revenue Bonds: Change in net assets (Exhibit A-8) $ 4,852,512 Add: Depreciation and amortization $ 3,118,937 Loss on sale/abandonment of capital assets 4 Interest expense and paying agent fees 8,402,809 Transfers out 1,004.292 12,526,042 Subtract: West Texas Utilities water revenues 529,567 Transfers in 22,840 Capital contributions from developers 879,222 (1,431,629) Net earnings for determining debt service coverage $15,946,925 Priority Subordinate Lien Bonds Lien Bonds Net earnings for determining debt service coverage $15,946,925 Principal and interest requirements to maturity $ 234,008,129 $55,141,364 Number of years remaining to pay bonds 24 15 Average annual principal and interest requirement 9,750,339 3,676,091 Minimum bond covenant debt service coverage 1.25 1.10 Minimum debt service coverage requirement $ 12,187,923 $ 4,043,700 16,231,623 Excess (deficiency) over debt service coverage requirements $ (284,698) 79 CITY OF WICHITA FALLS, TEXAS CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY SEPTEMBER 30, 2003 Buildings Machinery Land and and and Betterments Improvements Equipment Administrative services: Mayor and City Council $ - $ 3,797 $ 2,901 City Manager 1,062,849 336,872 49,516 Personnel/Risk Management - - 14,036 Martin Luther King Center - 349,839 7,641 Library 477,942 4,523,930 623,370 General Public Information - - 240,017 Building Maintenance - 1,076,622 28,136 Nondepartmental - 518,881 165,859 Municipal Court 230,000 313,818 178,555 Legal - - 2,254 City Clerk - - 6,700 Total administrative services 1,770,791 7,123,759 1,318,985 Police 1,112,592 1,374,498 3,276,800 Fire 252,459 5,504,046 280,694 Parks and recreation: Recreation 655,246 1,903,345 244,588 Park maintenance 8,943,251 1,016,451 52,900 Cemetery 20,200 - 11,115 Total parks and recreation 9,618,697 2,919,796 308,603 Accounting/finance: Accounting/finance - - 13,265 Information Systems - - 1,865,216 Total accounting/finance - - 1,878,481 Community development: Planning - - 80,670 Inspection - - 36,618 Code enforcement - - 73,892 Property management 1,161,884 420,891 68,829 Lake lot administration - - 1,018 Weed and Seed program - - 5,171 Total community development 1,161,884 420,891 266,198 Public works: Engineering 125,806 18,837 136,088 Street maintenance 28,547 86,373 20,692 Infrastructure - - - Total public works 154,353 105,210 156,780 Health: Administration 34,820 1,008,175 224,759 General City nursing 76,411 1,123 99,239 Environmental health - - 30,014 Lab water pollution - - 41,893 Total health 111,231 1,009,298 395,905 Traffic and transportation - 31,045 121,919 Multi-Purpose Events Center 9,277.513 33,601,897 297,599 Total capital assets used in the operation of governmental funds $ 23,459,520 $ 52,090,440 $ 8,301,964 80 EXHIBIT G-4 Motor Furniture Vehicles and and Construction Fixtures Equipment Infrastructure in Progress Totals $ 5,218 $ $ - $ - $ 11,916 15,050 - - - 1,464,287 3,425 - - - 17,461 12,486 - - - 369,966 90,578 - - - 5,715,820 - - - - 240,017 - - - - 1,104,758 - - - - 684,740 4,043 - - - 726,416 - - - - 2,254 - - - - 6,700 130,800 - - - 10,344,335 11,788 - - 1,422,326 7,198,004 1,755 - - 101,800 6,140,754 12,818 - - - 2,815,997 - - - - 10,012,602 - - - - 31,315 12,818 - - - 12,859,914 - - - - 13,265 - - - - 1,865,216 - - - - 1,878,481 1,025 - - - 81,695 - - - - 36,618 - - - - 73,892 - 31,485 - - 1,683,089 - - - - 1,018 - - - - 5,171 1,025 31,485 - - 1,881,483 3,355 - - - 284,086 1,393 - - - 137,005 - - 7,944,041 7,944,041 4,748 - 7,944,041 - 8,365,132 15,963 - - - 1,283,717 5,447 - - - 182,220 - - - - 30,014 - - - - 41,893 21,410 - - - 1,537,844 - - 7,124,383 - 7,277,347 28,288 - - - 43,205,297 $ 212,632 $ 31,485 $ 15,068,424 $ 1,524,126 $ 100,688,591 EXHIBIT G-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 30,2003 Beginning Ending Balance Balance 10/1/2002 Additions Deletions Adjustments 9/30/2003 Administrative services: Mayor and City Council $ 11,916 $ - $ - $ $ 11,916 City Manager 1,464,287 - - - 1,464,287 Personnel/Risk Management 17,461 - - - 17,461 Martin Luther King Center 369,966 - - - 369,966 Library 5,687,986 29,759 1,925 - 5,715,820 General Public Information 240,017 - - - 240,017 Building Maintenance 1,110,271 - 5,513 - 1,104,758 Nondepartmental 684,740 - - - 684,740 Municipal Court 726,416 - - - 726,416 Legal 2,254 - - - 2,254 City Clerk 6,700 - - - 6,700 Total administrative services 10,322,014 29,759 7,438 - 10,344,335 Police 6,059,786 1,140,944 2,726 - 7,198,004 Fire 4,979,731 1,163,130 2,107 - 6,140,754 Parks and recreation: Recreation 2,804,808 11,189 - - 2,815,997 Park maintenance 10,014,127 - 1,525 - 10,012,602 Cemetery 31,315 - - - 31,315 Total parks and recreation 12,850,250 11,189 1,525 - 12,859,914 Accounting/finance: Accounting/finance 13,265 - - - 13,265 Information Systems 1,856,011 9,205 - - 1,865,216 Purchasing 1,435 - 1,435 - - Total accounting/finance 1,870,711 9,205 1,435 - 1,878,481 Community development: Planning 79,429 2,266 - - 81,695 Inspection 36,618 - - - 36,618 Code enforcement 73,892 - - - 73,892 Property management 1,679,271 3,818 - - 1,683,089 Lake lot administration 1,018 - - - 1,018 Weed and Seed program 5,171 - - - 5,171 Total community development 1,875,399 6,084 - - 1,881,483 Public works: Engineering 285,179 - 1,093 - 284,086 Street maintenance 137,005 - - - 137,005 Infrastructure 6,456,478 1,487,563 - - 7,944,041 Total public works 6,878,662 1,487,563 1,093 - 8,365,132 Health: Administration 1,263,548 20,169 - - 1,283,717 General city nursing 182,220 - - - 182,220 Environmental health 30,014 - - - 30,014 Lab water pollution 41,893 - - - 41,893 Total health 1,517,675 20,169 - - 1,537,844 Traffic and transportation 7,048,737 297,772 69,162 - 7,277,347 Multi-Purpose Events Center 36,986,549 6,218,748 - - 43,205,297 Total capital assets $ 90,389,514 $ 10,384,563 $ 85,486 $ - $ 100,688,591 81 EXHIBIT G-6 CITY OF WICHITA FALLS, TEXAS GOLF FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2003 Balance Balance 10/1/2002 Additions Deletions 9/30/2003 Capital Assets: Land and betterments $ 4,935 $ 43,084 $ - $ 48,019 Buildings and improvements 13,267 - - 13,267 Machinery and equipment 77,498 2,338 - 79,836 Furniture and fixtures 3,175 - - 3,175 Total capital assets 98,875 45,422 - 144,297 Accumulated Depreciation: Land and betterments 1,250 1,059 - 2,309 Buildings, systems and improvements 4,369 955 - 5,324 Machinery and equipment 30,306 12,401 - 42,707 Furniture and fixtures 1,746 318 - 2,064 Total accumulated depreciation 37,671 14,733 - 52,404 Net capital assets $ 61.204 $ 30.690 $ - $ 91,894 82 EXHIBIT G-7 CITY OF WICHITA FALLS, TEXAS MUNICIPAL AIRPORT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2003 Balance Balance 10/1/2002 Additions Deletions 9/30/2003 Capital Assets: Land and betterments $1,461,823 $ - $ - $1,461,823 Buildings and improvements 1,452,202 21,870 - 1,474,072 Machinery and equipment 16,283 - - 16,283 Furniture and fixtures 36,705 - - 36,705 Total capital assets 2,967,013 21,870 - 2,988,883 Accumulated Depreciation: Land and betterments 1,311,721 45,152 - 1,356,873 Buildings and improvements 840,238 29,061 - 869,299 Machinery and equipment 12,139 986 - 13,125 Furniture and fixtures 7,310 3,496 - 10,806 Total accumulated depreciation 2,171,408 78,695 - 2,250,103 Net capital assets $ 795,605 $ (56,825) $ - $ 738,780 83 EXHIBIT G-8 CITY OF WICHITA FALLS, TEXAS KICKAPOO AIRPORT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2003 Balance Balance 10/1/2002 Additions Deletions 9/30/2003 Capital Assets: Land and betterments $ 954,677 $ - $ - $ 954,677 Buildings and improvements 566,233 - - 566,233 Machinery and equipment 60,179 - - 60,179 Total capital assets 1,581,089 - - 1,581,089 Accumulated Depreciation: Land and betterments 89,763 35,905 - 125,668 Buildings and improvements 28,670 11,524 - 40,194 Machinery and equipment 7,441 3,058 - 10,499 Total accumulated depreciation 125,874 50,487 - 176,361 Net capital assets $1,455,215 $ (50,487) $ - $ 1,404,728 84 EXHIBIT G-9 CITY OF WICHITA FALLS, TEXAS TRANSIT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2003 Balance Balance 10/1/2002 Additions Deletions 9/30/2003 Capital Assets: Land and betterments $ 61,925 $ - $ - $ 61,925 Buildings and improvements 626,868 - - 626,868 Machinery and equipment 104,479 42,169 - 146,648 Furniture and fixtures 1,152 - - 1,152 Total capital assets 794,424 42,169 - 836,593 Accumulated Depreciation: Buildings and improvements 148,074 7,730 - 155,804 Machinery and equipment 31,221 13,736 - 44,957 Furniture and fixtures 1,152 - - 1,152 Total accumulated depreciation 180,447 21,465 - 201,912 Net capital assets $ 613,977 $ 20,704 $ - $ 634,681 85 EXHIBIT G-10 CITY OF WICHITA FALLS, TEXAS SANITATION FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2003 Balance Balance 10/1/2002 Additions Deletions 9/30/2003 Capital Assets: Land and betterments $1,790,582 $ - $ - $1,790,582 Buildings and improvements 2,370,382 - - 2,370,382 Machinery and equipment 117,092 - - 117,092 Construction in progress 494,614 132,316 - 626,930 Total capital assets 4,772,670 132,316 - 4,904,986 Accumulated Depreciation: Land and betterments 44,220 16,587 - 60,807 Buildings and improvements 975,264 49,953 - 1,025,217 Machinery and equipment 69,877 12,620 - 82,497 Total accumulated depreciation 1,089,361 79,160 - 1,168,521 Net capital assets $3,683,309 $ 53,156 $ - $3,736,465 86 EXHIBIT G-11 CITY OF WICHITA FALLS, TEXAS WATER AND SEWER FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30,2003 Balance Balance 10/1/2002 Additions Deletions Adjustments 9/30/2003 Capital Assets: Land and betterments $ 24,088,689 $ - $ - $ - $ 24,088,689 Buildings, systems and improvements 136,481,753 2,858,792 248,000 554,936 139,647,481 Machinery and equipment 3,678,633 125,217 3,395 - 3,800,455 Furniture and fixtures 1,164 - - - 1,164 Motor vehicles 1,235 - - - 1,235 Construction in progress 5,219,201 2,668,809 - (554,936) 7,333,074 Total capital assets 169,470,675 5,652,817 251,395 - 174,872,097 Accumulated Depreciation Land and betterments 7,630,032 243,632 - - 7,873,664 Buildings, systems and improvements 53,353,875 2,565,678 248,000 - 55,671,553 Machinery and equipment 2,554,407 129,620 2,716 - 2,681,311 Furniture and fixtures 785 58 - - 843 Motor vehicles 1,235 - - - 1,235 Total accumulated depreciation 63,540,334 2,938,988 250,716 - 66,228,606 Net capital assets $ 105,930,341 $ 2,713,829 $ 679 $ - $ 108,643,491 87 EXHIBIT G-12 CITY OF WICHITA FALLS, TEXAS STORMWATER DRAINAGE FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2003 Balance Balance 10/1/2002 Additions Deletions 9/30/2003 Capital Assets: Machinery and equipment $ 19,275 $ 50,586 $ - $ 69,861 Accumulated Depreciation: Machinery and equipment 964 4,457 - 5,421 Net capital assets $ 18,311 $ 46,129 $ - $ 64,440 88 EXHIBIT G-13 CITY OF WICHITA FALLS, TEXAS FLEET MAINTENANCE FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2003 Balance Balance 10/1/2002 Additions Deletions 9/30/2003 Capital Assets: Land and betterments $ 433,658 $ - $ - $ 433,658 Buildings and improvements 4,010,098 - - 4,010,098 Furniture and equipment 6,358 - - 6,358 Motor vehicles and equipment 33,616,778 1,859,869 1,692,517 33,784,130 Construction in progress 6,706 - - 6,706 Total capital assets 38,073,598 1,859,869 1,692,517 38,240,950 Accumulated Depreciation: Buildings and improvements 1,331,283 80,179 - 1,411,462 Furniture and equipment 6,119 171 - 6,290 Motor vehicles and equipment 20,619,042 2,903,703 1,543,481 21,979,264 Total accumulated depreciation 21,956,444 2,984,053 1,543,481 23,397,016 Net capital assets $16,117,154 $ (1,124,184) $ 149,036 $14,843,934 89 EXHIBIT G-14 CITY OF WICHITA FALLS, TEXAS DUPLICATING SERVICES FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2003 Balance Balance 10/1/2002 Additions Deletions 9/30/2003 Capital Assets: Machinery and equipment $ 107,559 $ 4,775 $ - $ 112,334 Accumulated Depreciation: Machinery and equipment 17,892 10,655 - 28,547 Net capital assets $ 97,316 $ (5,880) $ - $ 83,787 90 EXHIBIT G-15 CITY OF WICHITA FALLS, TEXAS EMPLOYEE BENEFIT TRUST FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2003 Balance Balance 10/1/2002 Additions Deletions 9/30/2003 Capital Assets: Machinery and equipment $ - $ 2,314 $ - $ 2,314 Accumulated Depreciation: Machinery and equipment - 231 - 231 Net capital assets $ - $ 2,083 $ - $ 2,083 91 EXHIBIT G-16 CITY OF WICHITA FALLS, TEXAS WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION CAPITAL ASSETS FOR THE YEAR ENDED SEPTEMBER 30, 2003 Balance Balance 10/1/2002 Additions Deletions 9/30/2003 Capital Assets: Land and betterments $ 140,480 $ - $ 140,480 $ - Buildings and improvements 459,520 - 459,520 - Net capital assets $ 600,000 $ - $ 600,000 $ - 92 MP, tics ono%1ml 11107111/1 STATISTICAL SECTION (UNAUDITED) WA• n 'mkt S5LI t"r CITY OF WICHITA FALLS, TEXAS GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION (GENERAL FUND ONLY) - LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Administrative Parks and Accounting Community Year Services Police Fire Recreation and Finance Development 1993-1994 $ 4,721,396 $ 10,014,195 $ 5,916,985 $ 2,398,537 $ 250,402 $ 394,032 1994-1995 5,079,725 10,420,291 6,249,987 2,458,983 257,479 399,234 1995-1996 6,764,670 11,067,074 6,752,959 2,890,848 282,522 501,149 1996-1997 10,030,518 11,635,291 6,979,178 2,689,630 283,958 549,654 1997-1998 ' 5,675,204 11,445,357 7,567,904 2,947,658 1,141,181 990,993 1998-1999 6,315,733 12,010,858 7,881,632 2,896,955 1,300,773 1,048,202 1999-2000 6,980,200 13,159,401 8,367,462 3,072,384 1,331,432 1,058,585 2000-2001 7,263,876 13,293,997 8,412,257 3,059,595 1,489,661 1,102,205 2001-2002 7,619,095 14,050,692 9,028,643 3,289,405 1,702,554 1,102,996 2002-2003 8,591,274 14,764,510 9,444,152 3,397,352 1,604,484 1,247,973 ' Effective October 1, 1997,the City significantly modified its accounting system and functional reporting. Consequently,there are some differences in reporting of expenditures by function between years. 93 EXHIBIT H-1 Debt Service Interest Public Traffic and Capital Principal and Paying Works Health Transportation Outlay Retirement Agent Fees Totals $ 4,101,886 $ 2,813,235 $ 1,152,782 $ - $ - $ - $ 31,763,450 4,526,548 3,020,266 1,319,641 - - , - 33,732,154 4,790,242 3,189,847 1,422,119 - - - 37,661,430 4,576,974 3,396,582 1,449,844 - - - 41,591,629 5,709,866 2,203,927 1,487,177 1,773,519 2,149 558 40,945,493 4,814,939 2,341,125 1,561,804 299,312 2,350 357 40,474,040 5,799,148 2,050,913 1,553,984 144,788 2,677 134 43,521,108 • 4,408,476 2,080,081 1,707,211 1,365,232 - - 44,182,591 4,900,411 2,223,359 1,986,855 352,733 - - 46,256,743 4,467,697 2,360,222 1,534,507 1,238,062 - - 48,650,233 CITY OF WICHITA FALLS, TEXAS GENERAL GOVERNMENTAL REVENUES BY SOURCE (GENERAL FUND ONLY) - LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Charges Licenses Fines and Year Taxes for Services and Permits Forfeitures 1993-1994 $27,462,908 $ 1,067,816 $ 674,853 $1,409,882 1994-1995 28,685,546 1,103,978 632,676 1,309,204 1995-1996 30,140,802 1,394,190 684,633 1,262,361 1996-1997 31,487,703 1,338,867 673,422 1,495,921 1997-1998 * 32,544,840 2,077,990 435,572 1,486,985 1998-1999 34,009,242 2,279,994 535,989 1,187,927 1999-2000 36,460,971 1,733,552 660,715 1,417,891 2000-2001 36,944,112 1,783,301 1,892,099 1,259,742 2001-2002 38,462,368 2,007,218 1,918,690 1,598,751 2002-2003 41,160,049 2,155,570 2,001,117 1,569,135 * Effective October 1, 1997, the City significantly modified its accounting system and functional reporting. Consequently, there are some differences in reporting of revenues between years. 94 EXHIBIT H-2 Intergovernmental Miscellaneous Revenue Contributions Revenue Totals $ 1,955,422 $ - $ 1,013,323 $33,584,204 2,064,914 - 1,304,875 35,101,193 2,540,646 - 1,195,670 37,218,302 2,540,616 - 1,431,250 38,967,779 67,290 - 1,570,592 38,183,269 61,782 12,155 1,533,500 39,620,589 46,985 - 1,508,539 41,828,653 33,319 32,901 1,463,780 43,409,254 85,499 62,575 823,898 44,958,999 81,979 711,862 789,850 48,469,562 CITY OF WICHITA FALLS, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS - LAST TEN FISCAL YEARS (UNAUDITED) Percent of Delinquent Fiscal Total Current Tax Current Taxes Tax Year Tax Levy Collections Collected Collections 1993-1994 $15,220,570 $14,847,803 97.55% $ 254,153 1994-1995 15,817,317 15,507,777 98.04% 318,839 1995-1996 16,742,241 16,407,759 98.00% 326,841 1996-1997 17,482,018 16,936,754 97.00% 426,840 1997-1998 13,848,037 13,376,885 96.59% 536,999 1998-1999 14,526,149 13,952,221 96.05% 388,755 1999-2000 16,115,557 15,690,461 97.36% 472,161 2000-2001 16,791,261 16,365,706 97.47% 121,858 2001-2002 17,635,425 17,210,516 97.59% 297,405 2002-2003 19,439,511 18,962,880 97.55% 331,023 95 EXHIBIT H-3 Ratio of Ratio of Total Tax Outstanding Delinquent Total Tax Collections to Delinquent Taxes to Collections Total Tax Levy Taxes Total Tax Levy $15,101,956 99.22% $1,719,578 11.30% 15,826,616 100.06% 1,638,633 10.36% 16,734,600 99.95% 1,646,500 9.83% 17,363,594 99.32% 1,704,839 9.75% 13,913,884 100.47% 1,600,924 11.56% 14,340,976 98.73% 1,588,798 10.94% 16,162,622 100.29% 1,551,462 9.63% 16,487,564 98.19% 1,577,119 9.39% 17,507,921 99.28% 1,560,565 8.85% 19,293,903 99.25% 1,585,821 8.16% CITY OF WICHITA FALLS, TEXAS ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY- LAST TEN FISCAL YEARS (UNAUDITED) Real Property Personal Property Fiscal Assessed Estimated Assessed Estimated Year Value Actual Value Value Actual Value 1993-1994 $ 1,772,576,420 $1,772,576,420 $487,009,356 $487,009,356 1994-1995 1,860,859,604 1,860,859,604 492,382,781 492,382,781 1995-1996 1,979,667,520 1,979,667,520 494,250,305 494,250,305 1996-1997 2,053,175,337 2,053,175,337 530,055,655 530,055,655 1997-1998 2,145,423,750 2,145,423,750 554,851,453 554,851,453 1998-1999 2,237,301,030 2,237,301,030 595,201,382 595,201,382 1999-2000 2,448,370,999 2,448,370,999 605,524,662 605,524,662 2000-2001 2,550,564,079 2,550,564,079 622,493,821 622,493,821 2001-2002 2,671,429,859 2,671,429,859 667,334,298 667,334,298 2002-2003 2,775,175,780 2,775,175,780 652,625,915 652,625,915 96 EXHIBIT H-4 Ratio of Total Total Assessed to Assessed Estimated Total Estimated Value Actual Value Actual Value $2,259,585,776 $ 2,259,585,776 100.00% 2,353,242,385 2,353,242,385 100.00% 2,473,917,825 2,473,917,825 100.00% 2,583,230,992 2,583,230,992 100.00% 2,700,275,203 2,700,275,203 100.00% 2,832,502,412 2,832,502,412 100.00% 3,053,895,661 3,053,895,661 100.00% 3,173,057,900 3,173,057,900 100.00% 3,338,764,157 3,338,764,157 100.00% 3,427,801,695 3,427,801,695 100.00% CITY OF WICHITA FALLS, TEXAS PROPERTY TAX RATES AND TAX LEVIES - DIRECT AND OVERLAPPING GOVERNMENTS - LAST TEN FISCAL YEARS (UNAUDITED) Fiscal City of Wichita Burkburnett City View Year Wichita Falls County I.S.D. (1) I.S.D. (2) Tax Rates Per$100 Valuation 1993-1994 $ 0.67 $ 0.36 $ 1.22 $ 1.20 1994-1995 0.67 0.36 1.22 1.20 1995-1996 0.67 0.37 1.24 1.23 1996-1997 0.67 0.37 1.25 1.26 1997-1998 0.51 0.38 1.30 1.34 1998-1999 0.51 0.38 1.49 1.41 1999-2000 0.55 0.38 1.49 1.60 2000-2001 0.55 0.40 1.59 1.69 2001-2002 0.55 - 0.40 1.61 1.69 2002-2003 0.59 0.42 1.63 1.69 Tax Levies 1993-1994 $ 15,220,570 $ 11,545,265 $ 5,351,692 $1,022,231 1994-1995 15,817,317 11,989,730 5,645,214 1,071,679 1995-1996 16,742,241 13,058,786 5,993,746 1,151,028 1996-1997 17,482,018 13,681,903 6,364,575 1,232,641 1997-1998 13,848,037 14,643,356 6,426,976 1,325,139 1998-1999 14,526,149 14,625,183 7,104,951 1,448,831 1999-2000 16,115,557 15,177,829 7,087,371 1,549,000 2000-2001 16,791,261 15,538,168 7,816,180 1,772,270 2001-2002 17,635,425 16,834,585 8,226,508 2,069,834 2002-2003 19,439,511 19,213,989 8,300,614 2,347,083 Notes: (1) Burkburnett Independent School District-25% in Wichita Falls city limits (2) City View Independent School District- 90% in Wichita Falls city limits for 1997-98 and after and 84% in 1996-97 and prior (3) Iowa Park Consolidated Independent School District- 2% in Wichita Falls city limits. Only for 1997-98 and after due to City annexation. (4) Wichita Falls Independent School District- 99% in Wichita Falls city limits (5) County Education Districts were created by the Texas Legislature in 1991. All property tax revenues received by the County Education District were distributed to local educational agencies within the County on a prorata basis. Effective September 1, 1993, all County Education Districts were abolished by the Texas Legislature. As of this date, all assets and liabilities of the Wichita County Education District were transferred to the Wichita Falls Independent School District as successor-in-interest. 97 EXHIBIT H-5 County Iowa Park Wichita Falls Education C.I.S.D. (3) I.S.D. (4) District (5) Totals $ - $ 1.28 $ - $ 4.73 - 1.34 - 4.79 - 1.34 - 4.85 - 1.38 - 4.93 1.25 1.46 - 6.24 1.30 1.50 - 6.59 1.24 1.50 - 6.76 1.40 1.54 - 7.17 1.40 1.54 - 7.19 1.61 1.56 - 7.50 $ - $27,967,742 $ - $61,107,500 - 30,444,581 - 64,968,521 - 31,977,379 - 68,923,180 - 34,453,561 - 73,214,698 3,755,263 37,270,618 - 77,269,389 4,308,152 38,641,115 - 80,654,381 4,936,005 39,842,969 - 84,708,731 5,041,838 42,992,685 - 89,952,402 5,212,807 45,115,529 - 95,094,688 5,741,673 46,307,125 - 101,349,995 EXHIBIT H-6 CITY OF WICHITA FALLS, TEXAS TEN LARGEST TAXPAYERS(UNAUDITED) SEPTEMBER 30, 2003 Percentage January 1, 2003 of Total Assessed Assessed Taxpayer Type of Business Valuation Valuation Southwestern Bell Telephone Utility $ 45,872,012 1.34% Texas Utilities/Oncor Electric Utility 42,843,090 1.25% Sikes Coyote Mall LP Shopping Center 42,045,000 1.23% Wal-Mart Retail Store 36,064,620 1.05% Clinics of North Texas Medical Center 13,992,264 0.41% Kell West Regional Hospital Medical Center 13,829,399 0.40% Lowe's Home Improvement Center Retail Store 13,746,383 0.40% Time Warner Cable Television 12,972,531 0.38% Southwestern Bell Wireless LLC Telephone Utility 12,969,900 0.38% Sams East Inc Wholesale Store 9,830,788 0.29% Totals $ 244,165,987 7.12% 98 EXHIBIT H-7 CITY OF WICHITA FALLS, TEXAS SPECIAL ASSESSMENT COLLECTIONS (CAPITAL IMPROVEMENT ASSESSMENTS FUND) - LAST TEN FISCAL YEARS (UNAUDITED) Special Special Ratio of Fiscal Assessments Assessments Collections Year Due Collected to Amount Due 1993-1994 191,745 2,184 1.14% 1994-1995 173,940 5,267 3.03% 1995-1996 158,976 1,222 0.77% 1996-1997 158,106 1,200 0.76% 1997-1998 157,580 526 0.33% 1998-1999 * - - - 1999-2000 * - - - 2000-2001 * - - - 2001-2002 * - - - 2002-2003 * - - - *-The City wrote off the balance of the Special Assessments due the City during the year ended September 30, 1999 and no longer records the receivable balance. 99 n rt r EXHIBIT H-8 CITY OF WICHITA FALLS, TEXAS COMPUTATION OF LEGAL DEBT MARGIN (UNAUDITED) SEPTEMBER 30, 2003 Total assessed property value per 2002 tax roll $3,427,801,695 Maximum tax rate * $ 2.25/$100 Current tax rate for 2002 tax year .59246/$100 Maximum tax rate in excess of 2002 tax rate 1.65754/$100 Total legal debt margin $ 56,817,184 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 2002 tax rate is $.59246 per$100 assessed valuation. * Maximum tax levy established by City Charter 100 CITY OF WICHITA FALLS, TEXAS RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET GENERAL BONDED DEBT PER CAPITA -LAST TEN FISCAL YEARS (UNAUDITED) Gross Less Debt Fiscal Estimated Assessed General Service Year Population (1) Value Bonded Debt Funds 1993-1994 99,500 $2,259,585,776 $ 21,655,000 $ 944,860 1994-1995 101,155 2,353,242,385 20,530,000 1,093,940 1995-1996 102,790 2,473,917,825 19,555,000 996,075 1996-1997 103,312 2,583,230,992 18,320,000 1,511,795 1997-1998 104,121 2,700,275,203 16,850,000 1,560,640 1998-1999 106,000 2,832,502,412 15,315,000 1,578,437 1999-2000 107,178 3,053,895,661 13,705,000 1,585,571 2000-2001 104,197 3,173,057,900 19,215,000 195,773 2001-2002 104,544 3,338,764,157 17,410,000 270,530 2002-2003 104,712 3,427,801,695 15,290,000 597,966 Sources: (1) City of Wichita Falls Planning Department for all years, except 2000-01 from U.S. Bureau of Census. 101 EXHIBIT H-9 Ratio of Net General Bonded Debt Net General Net General To Assessed Bonded Debt Bonded Debt Value Per Capita $20,710,140 0.92% $ 208 19,436,060 0.83% 192 18,558,925 0.75% 181 16,808,205 0.65% 163 15,289,360 0.57% 147 13,736,563 0.48% 130 12,119,429 0.40% 113 19,019,227 0.60% 183 17,139,470 0.51% 164 14,692,034 0.43% 140 EXHIBIT H-10 CITY OF WICHITA FALLS, TEXAS RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES -LAST TEN FISCAL YEARS (UNAUDITED) Total Ratio of Interest and General Debt Service Fiscal Paying Total Debt Governmental to General Year Principal Agent Fees Service Expenditures Expenditures 1993-1994 $ 1,065,000 $ 1,416,594 $ 2,481,594 $ 31,763,450 7.81% 1994-1995 1,125,000 1,408,898 2,533,898 33,732,154 7.51% 1995-1996 1,190,000 1,334,768 2,524,768 37,661,430 6.70% 1996-1997 1,235,000 1,090,448 2,325,448 41,591,629 5.59% 1997-1998 1,470,000 934,270 2,404,270 40,945,493 5.87% 1998-1999 1,535,000 868,315 2,403,315 40,474,040 5.94% 1999-2000 1,610,000 796,975 2,406,975 43,521,108 5.53% 2000-2001 1,690,000 823,768 2,513,768 44,182,591 5.69% 2001-2002 1,805,000 1,143,555 2,948,555 46,256,743 6.37% 2002-2003 2,120,000 854,457 2,974,457 48,650,233 6.11% 102 EXHIBIT H-11 CITY OF WICHITA FALLS, TEXAS COMPUTATION OF DIRECT AND OVERLAPPING GENERAL BONDED DEBT(UNAUDITED) SEPTEMBER 30, 2003 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 $ 15,290,000 100% $ 15,290,000 Overlapping: Wichita County 5,805,000 100% 5,805,000 Burkburnett Independent School District 17,016,604 25% 4,254,151 City View Independent School District 10,596,355 90% 9,536,720 Iowa Park Consolidated Independent School District 5,977,491 2% 119,550 Wichita Falls Independent School District 29,723,716 99% 29,426,479 Total overlapping 69,119,166 49,141,899 Total direct and overlapping bonded debt $ 84,409,166 $ 64,431,899 Sources: (1) Listed taxing jurisdictions (2) City of Wichita Falls Planning Department 103 CITY OF WICHITA FALLS, TEXAS REVENUE BOND 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 1993-1994 $ 15,307,931 $ 10,695,460 $ 4,612,471 1994-1995 17,701,086 11,252,304 6,448,782 1995-1996 19,939,255 11,684,476 8,254,779 1996-1997 19,578,557 12,352,266 7,226,291 1997-1998 21,050,438 12,868,869 8,181,569 1998-1999 22,692,770 13,726,601 8,966,169 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 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 F-3). (2) Includes operating expenses of the Water and Sewer Fund exclusive of depreciation and amortization (see Exhibit G-3). (3) Excludes bond premium amortization. 104 1 ' EXHIBIT H-12 Debt Service Requirement Principal (3) Interest Total Coverage $1,150,000 $ 2,899,583 $4,049,583 1.14 1,230,000 2,875,069 4,105,069 1.57 1,405,000 2,450,529 3,855,529 2.14 1,605,000 2,740,348 4,345,348 1.66 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 EXHIBIT H-13 CITY OF WICHITA FALLS, TEXAS DEMOGRAPHIC STATISTICS - LAST TEN FISCAL YEARS (UNAUDITED) Median Fiscal Estimated Household Education School Unemployment Year Population (1) Income (2) Level (3) Enrollment (3) Rate (4) 1993-1994 99,500 $ 28,437 13.1 15,892 5.8% 1994-1995 101,155 29,527 13.1 15,793 5.9% 1995-1996 102,790 30,142 13.1 15,805 5.1% 1996-1997 103,312 31,148 13.1 16,606 4.3% 1997-1998 104,121 31,165 13.1 16,382 4.4% 1998-1999 106,000 34,342 - 13.1 14,780 4.7% 1999-2000 107,178 35,029 13.1 14,084 4.4% 2000-2001 104,197 35,961 13.1 13,896 3.9% 2001-2002 104,544 36,824 13.1 14,059 6.3% 2002-2003 104,712 37,523 13.1 13,765 5.5% 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 for all years, except 1994-95 and prior from Sales & Marketing Management (3) Wichita Falls I.S.D. - Educational level is grade equivalent of graduating senior (4) Texas Workforce Commission 105 EXHIBIT H-14 CITY OF WICHITA FALLS, TEXAS PROPERTY VALUE, BUILDING PERMITS AND BANK DEPOSITS - LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Property Building Bank Year Value (1) Permits (2) Deposits * 1993-1994 $2,259,585,776 $ 71,208,827 Not Available 1994-1995 2,353,242,385 73,692,291 Not Available 1995-1996 2,589,218,286 92,604,277 Not Available 1996-1997 2,707,854,487 89,861,493 Not Available 1997-1998 2,827,444,408 80,401,597 Not Available 1998-1999 2,889,152,460 102,641,877 Not Available 1999-2000 3,053,895,661 98,144,551 Not Available 2000-2001 3,173,057,900 102,578,860 Not Available 2001-2002 3,338,764,157 112,934,860 Not Available 2002-2003 3,427,801,695 107,379,873 Not Available Sources: (1) City of Wichita Falls Accounting/Finance Department (2) City of Wichita Falls Planning Department * Local branches of Bank One, Norwest, and Wells Fargo are not required, nor have they chosen, to release deposit information on individual branches. Therefore, total bank deposit information is not available for these years. 106 EXHIBIT H-15 CITY OF WICHITA FALLS, TEXAS MISCELLANEOUS STATISTICAL DATA (UNAUDITED) SEPTEMBER 30, 2003 Date of incorporation 1889 Form of government Council - Manager Area 71 square miles Miles of streets 542 Number of street lights 6,737 Fire protection: Number of stations 8 Number of firemen and officers 147 Police protection: Number of stations 1 Number of police officers 182 Municipal water department: Number of consumers - active 33,818 Average daily production 21,900,000 gallons treated water Miles of water mains 720 Sewers: Number of customers - active 30,836 Miles of sanitary sewers 506 Miles of storm sewers (enclosed) 41 Building permits issued: Number issued 10,270 Amount issued $107,379,873 Recreation and culture: Number of parks 39 with 1,200 acres Number of golf courses 4 Number of libraries 1 Number of volumes (books) 157,641 Employees- full-time 1,088 107 EXHIBIT H-16 (Page 1 of 5) CITY OF WICHITA FALLS, TEXAS SCHEDULE OF INSURANCE COVERAGE (UNAUDITED) SEPTEMBER 30, 2003 Insurance Code A Policy: Building and Contents Company: Barnard Insurance Group Policy Period: October 1, 2002 to October 1, 2003 Perils: Fire, Extended Coverage, Vandalism and Malicious Mischief, including Difference in Condition, Extra Expense, Valuable Papers, EDP, Demolition/CC Coverages: $73,718,886 Building and Contents $100,000 Extra Expense Deductible: $75,000 Coinsurance: Agreed Value, Replacement Cost Premium: $84,552 B Policy: Boiler and Machinery Company: Texas Municipal League Policy Period: October 1, 2002 to October 1, 2003 Perils: Comprehensive Blanket Coverage: $5,000,000 Per Occurrence Deductible: $1,000 Coinsurance: N/A Premium: (Included in Building and Contents Premium) C Policy: Electronic Data Processing Equipment Company: Barnard Insurance Group Policy Period: October 1, 2002 to October 1, 2003 Perils: All Risks Coverage: $2,395,672 Deductible: $75,000 Coinsurance: 100% Premium: $2,748 D Policy: Airport Liability (Municipal Airport) Company: Marsh Aviation Policy Period: March 17, 2003 to March 17, 2004 Perils: Owner's, Landlord, and Tenants Liability Coverage: $1,000,000 CSL Deductible: $1,000 Coinsurance: N/A Premium: $4,435 108 EXHIBIT H-16 (Page 2 of 5) CITY OF WICHITA FALLS, TEXAS SCHEDULE OF INSURANCE COVERAGE (UNAUDITED) (CONTD.) SEPTEMBER 30, 2003 Insurance Code E Policy: Airport Liability (Kickapoo Downtown Airpark) Company: Marsh Aviation Policy Period: March 17, 2003 to March 17, 2004 Perils: Owners, Landlord, and Tenants Liability Coverage: $1,000,000 CSL Deductible: $1,000 Coinsurance: N/A Premium: $9,635 F Policy: Public Official Bond Company: Fidelity & Deposit Company Bond No.: FD 09688496 Bond Period: June 27, 2003 to June 27, 2004 Insured: City Manager-Jim Berzina Coverage: $25,000 Premium: $100 G Policy: Public Official Bond Company: Fidelity & Deposit Company Bond No.: FD 30237391 Bond Period: August 1, 2003 to August 1, 2004 Insured: Purchasing Agent-Margaret Elizabeth (Peggy) Gahagan Coverage: $2,500 Premium: $100 H Policy: Blanket Employees' Dishonesty-Theft, Disappearance Coverage Company: Fidelity & Deposit Company Bond No. FD 02897925 Bond Period: January 15, 2003 to January 15, 2004 Insured: Public Employee Blanket-Water Office Manager Coverages: $10,000 Inside Premises $3,000 Outside Premises $10,000 Per Employee $15,000 Excess Limit (Water Office Manager) Premium: $2,000 109 EXHIBIT H-16 (Page 3 of 5) CITY OF WICHITA FALLS, TEXAS SCHEDULE OF INSURANCE COVERAGE (UNAUDITED) (CONTD.) SEPTEMBER 30, 2003 Insurance Code Policy: Public Official Bond Company: Fidelity & Deposit Company Bond No.: FD 30523655 Bond Period: October 1, 2001 to October 1, 2004 Insured: City Clerk- Lydia Torres Coverage: $25,000 Premium: $100 J Policy: Public Official Bond Company: Aetna Insurance Company Bond No.: S 10084654 Bond Period: August 6, 2003 to August 6, 2004 Insured: Director of Public Works- Scott Taylor Coverage: $2,500 Premium: $50 K Policy: Public Official Bond Company: Aetna Insurance Company Bond No.: S 100841241 Bond Period: August 24, 2003 to August 24, 2004 Insured: Municipal Court Administrator-Judith Elaine Bourgoin Coverage: $2,500 Premium: $50 L Policy: Public Official Bond Company: Aetna Insurance Company Bond No.: S 18072205 Bond Period: February 15, 2003 to February 15, 2004 Insured: Director of Finance-Jim Dockery Coverage: $25,000 Premium: $125 M Policy: Public Official Bond Company: Aetna Insurance Company Bond No.: 71 S 100648903 Bond Period: May 21, 2003 to May 21, 2004 Insured: Municipal Court Judge - Larry Gillen Coverage: $2,500 Premium: $100 110 EXHIBIT H-16 (Page 4 of 5) CITY OF WICHITA FALLS, TEXAS SCHEDULE OF INSURANCE COVERAGE (UNAUDITED)(CONTD.) SEPTEMBER 30, 2003 Insurance Code N Policy: Public Official Bond Company: Travelers Bond No.: S101099963 Bond Period: December 17, 2002 to December 17, 2003 Insured: MPEC Director-George Casper Coverage: $25,000 Premium: $88 O Policy: Health Insurance Company: J. Allan Hall &Associates, Inc. Policy No.: City of Wichita Falls Employee Benefits Trust Policy Period: December 1, 2002 through November 30, 2003 Perils: Illness and Accidental Injury (Non-work Related) Coverage: $1,000,000 Lifetime Maximum Deductible: Various Amounts Depending on Plan Option Chosen by Employee Coinsurance: Coinsurance coverage begins when a limit of 20% or 30% reaches $3,500, $5,000, $10,000 or$15,000 yearly, then insurance company pays 100% of eligible expenses. Premium: $320,675 P Policy: Dental Insurance Company: J. Allan Hall &Associates, Inc. Policy No.: City of Wichita Falls Employee Benefits Trust Policy Period: December 1, 2002 through November 30, 2003 Perils: Basic Dental Coverage with Orthodontics for Children Under 19 Coverages: $1,000 Annual Maximum- Basic Coverage $1,000 Lifetime Maximum-Orthodontics Deductible: Basic Coverage-$100 Annually Per Person (Maximum 3 Family Members); No Deductible for Orthodontics Coinsurance: 80-20 Basic, 50-50 Orthodontics, 50-50 Periodontics Premium: (Included in Health Premium) O Policy: Life Insurance Company: TMRS Policy No.: Not Applicable Policy Period: October 1, 2002 through September 30, 2003 Perils: Death and Dismemberment Benefits Deductible: N/A Premium: One Times Employee's Annual Salary 111 (Page 5 of 5) CITY OF WICHITA FALLS, TEXAS SCHEDULE OF INSURANCE COVERAGE (UNAUDITED) (CONTD.) SEPTEMBER 30, 2003 Insurance Code R Policy: Life Insurance (Directors Only) Company: Pilot Life Insurance Company Policy No.: 0548 (Group#1) Policy Period: January 1, 2003 to December 31, 2003 Perils: Death and Dismemberment Benefits Coverage: $25,000 Deductible: Premium: Annual Estimate $338 112 i EXHIBIT I-1 CITY OF WICHITA FALLS , TEXAS CASH AND INVESTMENTS 200--! j 180— r � r r'r ri II rrr fff l 160 K*0 '*'*'********** h .h*********a *�7**''****. ' '•�/� 140—/ **:s*********`z**�z***hri 400*0040******0 s:)0.;z;z'<' ':z ;'i;.'2:0,:, r ir`**-,rsr>r:{'yrs}{`':Z ??.'.yr;{<. 'IIiP7IZ4I. :2:2 �S{f hZ{{r�r'c`fi{;> 0 {`{ ,^ fit#¢L'. "d'}'a_y+.. hh �,�ee(�e,(�ee(�.(e(rh(!� r� �( z�ri,......... L c'at♦ '1- Y K^CYYYYYY Y Y`7... >:2•0*:...>:t:.'',: }x >> )>:z.yf 'r r'ir ." t r ry g :1? *)>rir4r � �rfx':::>*- r0( 0 ; . t� mi. rr r� rzr2.f f l r?;s,.,,h' O ** *> > A*******,?*- •{; m *• ' rz ' r s # S ',>60— 4 s :s sh ' . - :...:.., s shsr7z*z *l z .sa ,s 1.11 {irr �r {>r >.40 s z #; Ns u sfsi t: .' t , % ' ti . }' ****** **: 4V1 r > > > • r ,, � { ....„,,,,,,,,.. . „. ,,,,, fr' ,,,, hsh.< >': >l` ,,' ' , � ' •''',z r' "r,,,' >ti' r, � z r {: zz :z,:yrrz}:z. : 0 * , '' 2 't' ti''v' irrr rfrrrr r ! f 20— ' '''• .o' r �� � � ' � �. ****rr ' '*d*** �''' >SS?t34rrh '!>'5 , rr r rr • ' * r * Y 0 0 ti 'ziti?'z{'z .>.,,,�zr>'>z;`hzhly s..: 0— • * 'r 2'�r '2 r'2r * 't'r '�,s'rhr,2 2T{i . i> >{>>��•.`s >'z 'r z t 4..0**fzr'z zr;;s> > >> •; 1999 Fr y * '' :z z z.z r z:'S(MO y >::, 2001 f'>l. 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F+++i +++0+i+t++f+ .( E +' tA + o t+ * + :+ff + ++ {* 'oi �4 . � +IttI+ + ;.�;; + 40 '31 *ic ' +* +*+ O �4 +* +PP+ T 4++ + V �F ' * Fl4 !lti'�ti''\ ' '{iY_/ - hh hh[+4 \ rt. ::\+%4'.4 1 4 k+++4t:4:+444 1 1.4* 1.** 1k+44+4a4 4\44 1 n;+4 ilfej:,:::**404,.4i,..' In i;411 reilt„litri fi Rill 14.<.,4%.1 itill Iti ++*may% * ;$T3.ice''i�+.. , ** o *. 4i�.i� . $$$ f .+1.4 f +4 ' .. + t. il in \ .409+kalialill 5 L''..+�+.++'kr*'4*�.'�4+`++*4+:+z i.4`4+414`t.`+ioo`�.w'r*'�.`++*14 i'4+�r`$$$$L`+4o004+90.$�.+ +++ ++t**+ '_* ++ kik4,0**,wia ttimitikliriti ++SatattiNt4 t,+.4.,..is.33:+4:14,.**L$1 L+:41.„...44L.4.4.1.14,:t++.0....k.v. p.,+40.0* ***% o+ *44**xy+*4 +4,kr40+4, ,,v4*. 4, li + -sow 2000 0f** ' * ,� ,�,�Y . 2001 - + �� * September 30, 2002 2003 (UNAUDITED) 115 EXHIBIT 1-4 CITY OF WICHITA FALLS , TEXAS REVENUE BONDS PAYABLE 200 - --------- +4 +4 1y. arat�+*+*+*+*++a'i«+•4't'++r + 1 - .hr�1ia+444444+[ *+ 4+ #:+y ** K 22.�...*bF:' KW. •2.2i?f•2Yi2 • .'*+. 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t=$r t+.. .+++++y+�+++++++++4 *+ ++ f:**:*++*+0+#4!++ *+*+4444+*+*y+y+++t4*y .. s 0�+4++t - 1996 +7f+4 ,tt '++'O*4++�+ ++A+ 1 997 #a*Q+C+ff `++f4*+*4*++++f 4++f4+1 **********r*r*#*#*i+i+ t++t*it�4t4+t}T++++++ -- 1998 *...oi+sii+i*. 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