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2013 Comprehensive Annual Financial Report CITY OF Comprehensive ON A p ®R Annual TE XASFinancial Report Year Ended September 30, 2013 V 77 a. 4ib'�L 8 f �yy 1 9 K A 6 � _ CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2013 ISSUED BY: DEPARTMENT OF FINANCE CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2013 TABLE OF CONTENTS Exhibit Page INTRODUCTORY SECTION Letterof Transmittal................................................................................................................................ i-vii GFOA Certificate of Achievement........................................................................................................... viii OrganizationalChart............................................................................................................................... ix Listof Principal Officials.......................................................................................................................... x FINANCIAL SECTION Independent Auditor's Report................................................................................................................. 1-2 Management's Discussion and Analysis ................................................................................................ 3-13 BASIC FINANCIAL STATEMENTS: Statement of Net Position...............................................................................................................A-1 14 Statement of Activities....................................................................................................................A-2 15 Balance Sheet- Governmental Funds ...........................................................................................A-3 16 Reconciliation of the Governmental Funds Balance Sheet to the Statement ofNet Position ..............................................................................................................................A-4 17 Statement of Revenues, Expenditures and Changes in Fund Balances- GovernmentalFunds....................................................................................................................A-5 18 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of the Governmental Funds to the Statement of Activities............................................A-6 19 Statement of Fund Net Position - Proprietary Funds......................................................................A-7 20-21 Statement of Revenues, Expenses and Changes in Fund Net Position - ProprietaryFunds.........................................................................................................................A-8 22 Statement of Cash Flows- Proprietary Funds................................................................................A-9 23-24 Statement of Fiduciary Assets and Liabilities................................................................................A-10 25 Notes to the Financial Statements..................................................................................................... 26-59 REQUIRED SUPPLEMENTARY INFORMATION: Budgetary Comparison Schedule - General Fund..........................................................................B-1 60 Notes to the Required Supplementary Information ........................................................................... 61 Texas Municipal Retirement System -Analysis of Funding Progress- LastTen Plan Years.....................................................................................................................B-2 62 Wichita Falls Firemen's Relief and Retirement Fund -Analysis of Funding Progress....................B-3 63 Wichita Falls Retiree Health Care Plan-Analysis of Funding Progress.........................................B-4 64 CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2013 TABLE OF CONTENTS (CONT'D.) Exhibit Page COMBINING FINANCIAL STATEMENTS: Nonmajor Governmental Funds: CombiningBalance Sheet.........................................................................................................C-1 65 Combining Statement of Revenues, Expenditures and Changes in Fund Balances.................C-2 66 Budgetary Comparison Schedule—Community Development Block Grant Fund ....................C-3 67 Budgetary Comparison Schedule—Section 8 Housing Fund ...................................................C-4 68 Budgetary Comparison Schedule—Home Investment Partnership Agreement Fund ..............C-5 69 Budgetary Comparison Schedule— Hotel/Motel Tax Fund .......................................................C-6 70 Budgetary Comparison Schedule—Golf Fund..........................................................................C-7 71 Budgetary Comparison Schedule—MPEC Fund......................................................................C-8 72 Budgetary Comparison Schedule—Debt Service Fund............................................................C-9 73 Nonmajor Enterprise Funds: Combining Statement of Net Position........................................................................................D-1 74 Combining Statement of Revenues, Expenses and Changes in Fund Net Position.................D-2 75 Combining Statement of Cash Flows........................................................................................D-3 76-77 Internal Service Funds: Combining Statement of Net Position........................................................................................E-1 78 Combining Statement of Revenues, Expenses and Changes in Fund Net Position.................E-2 79 Combining Statement of Cash Flows........................................................................................E-3 80 Agency Fund: Statement of Changes in Assets and Liabilities........................................................................F-1 81 Component Units: Combining Statement of Net Position........................................................................................G-1 82 Combining Statement of Activities.............................................................................................G-2 83 SUPPORTING SCHEDULES: Combined Schedule of Bonded Debt and Interest Maturities.........................................................H-1 84 Combined Schedule of Bonds Payable..........................................................................................H-2 85-90 Debt Service Coverage—Revenue Bonds.....................................................................................H-3 91 Capital Assets Used in the Operation of Governmental Funds- Schedule By Function and Activity...............................................................................................H-4 92 Capital Assets Used in the Operation of Governmental Funds- Schedule of Changes By Function and Activity............................................................................H-5 93 Municipal Airport Fund—Capital Assets and Accumulated Depreciation.......................................H-6 94 Kickapoo Airport Fund—Capital Assets and Accumulated Depreciation.......................................H-7 95 Transit Fund—Capital Assets and Accumulated Depreciation ......................................................H-8 96 Stormwater Drainage Fund -Capital Assets and Accumulated Depreciation ................................H-9 97 Sanitation Fund—Capital Assets and Accumulated Depreciation ................................................H-10 98 CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2013 TABLE OF CONTENTS (CONT'D.) Exhibit Page Water and Sewer Fund—Capital Assets and Accumulated Depreciation.....................................H-11 99 Waterpark Fund—Capital Assets and Accumulated Depreciation................................................H-12 100 Fleet Maintenance Fund—Capital Assets and Accumulated Depreciation...................................H-13 101 Duplicating Services Fund—Capital Assets and Accumulated Depreciation................................H-14 102 Information Technology Fund—Capital Assets and Accumulated Depreciation...........................H-15 103 Wichita Falls Economic Development Corporation—Capital Assets and Accumulated Depreciation...........................................................................................................H-16 104 STATISTICAL SECTION (UNAUDITED) Net Position By Component— Last Ten Fiscal Years..................................................................... 1-1 105 Changes in Net Position—Last Ten Fiscal Years.......................................................................... 1-2 106-107 Fund Balances, Governmental Funds—Last Ten Fiscal Years..................................................... 1-3 108 Changes in Fund Balances, Governmental Funds—Last Ten Fiscal Years.................................. 1-4 109 Tax Revenues By Source, Governmental Funds—Last Ten Fiscal Years .................................... 1-5 110 Assessed and Estimated Actual Value of Taxable Property— Last Ten Fiscal Years.................... 1-6 111 Direct and Overlapping Property Tax Rates— Last Ten Fiscal Years............................................ 1-7 112 Principal Property Taxpayers—Current Year and Nine Years Ago................................................ 1-8 113 Property Tax Levies and Collections— Last Ten Fiscal Years....................................................... 1-9 114 Ratios of Outstanding Debt by Type—Last Ten Fiscal Years....................................................... 1-10 115 Ratios of General Bonded Debt Outstanding— Last Ten Fiscal Years ......................................... 1-11 116 Direct and Overlapping Governmental Activities Debt ................................................................. 1-12 117 Computation of Legal Debt Margin—Last Ten Fiscal Years......................................................... 1-13 118 Pledged Revenue Coverage—Water and Sewer Revenue Bonds— LastTen Fiscal Years.................................................................................................................. 1-14 119 Demographic Statistics—Last Ten Fiscal Years........................................................................... 1-15 120 Principal Employers—Current Year and Ten Years Ago.............................................................. 1-16 121 Full-Time Equivalent City Government Employees by Function/Program— LastTen Fiscal Years.................................................................................................................. 1-17 122 Operating Indicators by Function/Program—Last Ten Fiscal Years............................................. 1-18 123 Capital Asset Statistics by Function/Program—Last Ten Fiscal Years......................................... 1-19 124 Graphics: Cashand Investments...............................................................................................................J-1 125 TotalBonds Payable .................................................................................................................J-2 126 General Obligation Bonds Payable...........................................................................................J-3 127 Revenue Bonds Payable...........................................................................................................J-4 128 GeneralFund Equity .................................................................................................................J-5 129 Comparison of Tax Levy and Collections .................................................................................J-6 130 Revenues by Source— FYE 9/30/13.........................................................................................J-7 131 Expenditures by Function—FYE 9/30/13..................................................................................J-8 132 General Governmental Revenues (General Fund Only)...........................................................J-9 133 General Governmental Expenditures (General Fund Only) ....................................................J-10 134 Introductory Section Wft-- / OFFICE OF THE CITY MANAGER T E X A S 8/u Skr�S olden O,ry rtcwAe-s March 17,2014 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, 2013. 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, 2013, was prepared in accordance with accounting principles as promulgated by the Governmental Accounting Standards Board (GASB). The financial statements and related notes have been audited by the independent audit firm of Edgin, Parkman,Fleming&Fleming,PC,whose report is included herein. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe the data, as presented, are accurate in all material aspects; that they are presented in a manner designed to fairly set forth the financial position and results of operation of the City as measured by the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain understanding of the City's financial activities have been included. The CAFR continues to present financial data using the reporting model promulgated by GASB Statement No. 34. This reporting model changed governmental financial reporting by incorporating government-wide financial statements. The Finance Department believes that this presentation provides better information to users of the report, and it requires management to provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of a Management's Discussion and Analysis(MD&A). The MD&A can be found immediately following the independent auditors' report and is designed to complement this transmittal letter and should be read in conjunction with it. GENERAL INFORMATION-CITY OF WICHITA FALLS,TEXAS The City of Wichita Falls is located in the south-central United States in north-central Texas. Wichita Falls is linked to major southwestern,western, and mid-western cities by Interstate 44,U.S. Highways 82, 281,277, 287, and Texas State Route 79. The city is approximately 130 miles northwest of the Dallas/Fort Worth Metroplex, 15 miles from the Red River that marks the Texas/Oklahoma border, and 125 miles south of Oklahoma City. The city is located in the cross-timbers area of the gently rolling north-central plains and is dissected by the Wichita River. Due to the city's geographic location,Wichita Falls serves as a regional economic hub for north Texas and south central Oklahoma. Wichita Falls is the county seat of Wichita County and the major population center in North Texas. The economy is based on mineral production, retail trade, manufacturing, agribusiness, and government installations. Principal sources of agricultural income include cattle, cotton and wheat. Wichita Falls is home to Sheppard Air Force Base,which operates the Euro-NATO jet pilot training program. The city's major university is Midwestern State University. Principal manufacturers within the area include metal fabrication, industrial and CITY OF WICHITA FALLS 1300 7th St., PO Box 1431,Wichita Falls,TX 76307 t: (940) 761.7404 f: (940)761.8833 commercial equipment, engine components, flexible packaging, and assorted plastic, glass and fiberglass. North Texas State Hospital-Wichita Falls Branch, Midwestern State University, James V. Allred Prison and Sheppard Air Force Base are also large employers located within the city. The City operates a Multi-Purpose Events Center, which includes a coliseum, exhibit hall, and an agricultural arena/show barn. The 2013 population for Wichita Falls, as estimated by the City, is 104,552, an increase of 0.3% from the 2000 Census estimates,and an increase of 8.61%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 Over the past few decades, Wichita Falls has successfully diversified its economy to include new manufacturing, government, medical services, retail and service related commerce. This diversification is in addition to the more typical North Texas industries of agriculture, and oil and gas production. The Wichita Falls MSA houses a robust manufacturing sector, with many companies having employment in excess of 100 persons. This sector of the economy generates almost $261 million in annual payroll, representing approximately 9% of total employment within the city, and accounts for more than$933 million in gross sales annually. Wichita Falls is also a nexus of international investment. Three area manufacturing facilities are foreign-owned,representing France,Sweden,and Germany. The city is the economic hub of a 60-mile radius trade area,populated by an estimated 379,400 people. Of that population,an estimated 240,000 are currently in the workforce and look to Wichita Falls for their employment, shopping, entertainment, educational, cultural and health care needs. Being the largest community within 100 miles,Wichita Falls boasts a larger retail trade than a community its size would normally enjoy. Many national retailers and restaurants have found Wichita Falls to be a superb location. A few years ago, the national recession considerably affected the local economy. During that time, four local manufacturing companies closed, eliminating almost 1,200 jobs and several other companies reduced their workforce by 10 to 20 percent. In response to this downturn in the local economy, efforts were made to nearly double the economic development marketing campaigns and develop a community-wide branding, marketing and public relations campaign. Additionally, the City and 4A Economic Development Corporation has also been aggressive over the last few years in granting economic development incentives for primary job creation. Since 2010, 23 projects have been approved for incentive funding with the potential for creating and/or retaining over 3,000 jobs. Several of these projects have invested in the local economy resulting in the addition or retention of hundreds of jobs. Others are still in the early phases of their expansion plans and the results remain to be seen. Although no major plant developments were announced during the 2012-13 fiscal year, several industries made investments in the local economy to create and/or retain hundreds of primary jobs. The projects that occurred over the 2012-13 fiscal year are outlined below: Health Care Services Corporation Retention Project(DBA Blue Cross and Blue Shield of Texas)—a funding amount up to$820,000 for the retention of 335 primary jobs and creation of 50 new primary jobs. ii Tobol Industries Recycling & Warehousing Center Recruitment Project — a funding amount up to $196,750 for the recruitment of 24 primary jobs at a recycled goods and warehousing center near the former St Gobain/Vetrotex plant. Nocona Transport,Incorporated Retention Project—a funding amount up to$216,000 for a specialty trucking operation including additional office space to the company's existing building,the addition of a 5,000 square foot warehouse, and the addition of a 1,500 square foot maintenance facility. The project assisted in the retention of 20 primary jobs and creation of 44 new positions in Wichita Falls or the surrounding area. Ulm Corporation Project—a funding amount up to $2,396,400 for the creation of 372 primary jobs in oil field trucking for the company's future regional headquarters and distribution center. Eagle Rail Car Service Project — a funding amount up to $928,800 for the creation of 64 primary jobs and the purchase of plant booths, sand blasting booths,air compressors and related equipment. PPG Reclaimed Water Conveyance Facilities Project— a funding amount up to $1,145,000 for the construction of facilities for the transmission of reclaimed water from the Northside Wastewater Treatment Plant to PPG Industries facility. 4A Economic Development Sales tax funds have also been used to assist with activities of the Military Affairs Committee, a regional organization established a few years ago to work directly with Sheppard Air Force Base (SAFB), Air Education and Training Command, the Chief of Staff for the Air Force, and our Congressional, State and Local elected officials. This Committee was formed to increase the value of SAFB, strengthen community development and build a stronger economy. The City, SAFB and surrounding communities are also conducting a Joint Land Use Study (JLUS), which is a cooperative planning initiative to promote compatible community growth that supports military training and operational missions. The inter jurisdictional partnership will result in the identification of actions that can be taken jointly by the community and installation to promote compatible development and address current and future encroachment. The goal of compatibility planning is to promote an environment where both entities(military and civilian)can coexist successfully. Small business manufacturing represents the fastest growing sector of the economy in terms of the number of new businesses. With many area manufacturers having less than 50 employees,small manufacturers represent a vital link in the economy. Companies in food,beverage and clothing are flourishing in Wichita County. The value of construction permits is also an indication of economic activity in the community. Residential permits totaled $52,885,766 during the 2012-13 fiscal year, which is an increase of$22,416,474, or 74% from the prior year. The value of commercial construction permits totaled $72,822,020, which is an increase of $5,228,443,or of 8%from the prior fiscal year. Several commercial construction permits issued were above$1 million in value which directly impacts local construction contractors, and often times results in additional secondary jobs. Those permits include: Seven Day Adventist Church—a total of 16,116 sq.ft.with an estimated value of$1,700,000. Downtown Travel Center-a total of 6,128 sq. ft.with an estimated value of$3,200,000. Municipal Airport—a total of 52,742 sq.ft.with an estimated value of$23,000,000. Raising Canes—a total of 2,715 sq. ft.with an estimated value of$1,000,000. Dental Clinic—a total of 13,200 sq.ft.with an estimated value of$2,644,000. Union Square Federal Credit Union—a total of 13,240 sq. ft.with an estimated value of$3,200,000. Nursing Home—a total of 84,953 sq. ft.with an estimated value of$9,000,000. iii La Quinta Inn—a total of 49,025 sq. ft.with an estimated value of$3,000,000. Parkstone Addition—a total of 61,610 sq.ft.with an estimated value of$5,624,400. Anaerobic Digester Wastewater Plant—a total of 824 sq.ft.with an estimated value of$1,010,000. Another indicator of local economic performance is the retail sales tax. During the 2012-13 fiscal year,the City generated$29,416,487 in retail sales taxes,which was$874,056,or 3.06%more than in the prior fiscal year. MAJOR INITIATIVES For The Year. The City Council continues to identify programs to meet citizens' requests for services and to safeguard the environment. Work was completed on the City's water system improvement projects that were started in 2001. Since 2001, over $130 million in improvements have been made to expand the City's water supply and treatment capabilities and to meet regulatory treatment requirements of the EPA and TCEQ. The final element of this work was the construction of a new 10 million gallon per day conventional water treatment facility, sludge dewatering facilities, chemical building improvements, high service pump station, and miscellaneous site work at the Cypress Water Treatment Plant. Construction of this $45.5 million project began in August 2009 and was completed in April 2013. Over the last 3 years, the City of Wichita Falls has been in an extreme drought. Beginning in 2011 and continuing to date, the City has experienced record setting temperatures and extremely low rainfall, which has decreased the City's water supply from nearly maximum lake capacity to approximately 27%. The City's drought contingency plan requires water restrictions and surcharges for excessive water use when the lake capacity gets below 50% (Stage II-Drought Warning). In February 2013, the City entered Stage III-Drought Emergency at 40% of lake capacity, and Stage IV-Drought Disaster at 30% lake capacity in November. Essentially, all outside irrigation, with the exception of home foundations once per week, has been eliminated, decreasing water consumption by almost 50%. Additionally, in August 2013, the City issued $13 million in Combination Tax and Revenue Certificates of Obligation to construct an emergency above ground pipeline from the River Road Wastewater Treatment Plant to convey 7.5 million gallons per day of treated effluent directly to the Cypress Water Treatment Plant for treatment and distribution. This pipeline and pump station is complete and the City is currently undergoing a 45-day testing period before the water will be allowed into the distribution system. The TCEQ has authorized the City to use water from this system only while the City is in an emergency situation. In April 2012, the City entered into an energy services agreement with an energy services company in the amount of $5.12 million to install energy savings projects in numerous City facilities. The improvements primarily consisted of lighting, heating and cooling units and energy management systems in various City facilities. Additionally, a dehumidification system was installed at the Kay Yeager Coliseum. The Energy Services Agreement required the company to design, engineer, hire contractors, perform construction management services, train City employees on equipment, and guarantee to the City that the cost of these projects will be repaid, and over$1.6 million in cost savings will be realized,through reduced energy bills and lower maintenance expenses over a period of 15 years. The capital cost of these projects was financed from three sources of funds: (1) $4.4 million by using a 13-year capital leasing program, (2) $450,000 in 4B Sales Tax Funds budgeted for the coliseum dehumidification system, and (3) $274,000 in energy rebates from ONCOR. All of the projects are now complete and the first annual debt payment has been made to the capital leasing company. A major undertaking in the downtown area that was completed during the 2012-13 fiscal year, was the construction of a new travel center for various public and private transportation services. This new travel center is serving as a major transportation hub for the region. Property acquisition, demolition of dilapidated property, and design services were completed in 2012 with funds from the Federal Transit Administration (FTA) and the 4A Economic Development Sales Tax Corporation. The cost for these elements of the project was approximately $1 million. Construction of the facility began in October 2012 and was completed in late summer of 2013. The cost of the construction was $4.2 million and was principally being funded with a grant from the FTA. However,the City granted$500,000 of General Funds for the project. Additionally,the City iv and 4A and 413 Sales Tax Corporations provided a three-year loan to the project in the total amount of $941,000. This loan will be repaid to the three organizations with annual entitlement funds from the FTA. In October 2012, the City began construction of Phase I of the new Airport Facilities at the Regional Airport. The cost for this phase is approximately $4.43 million, 90% of which is being funded with grants from the Federal Aviation Administration,with the remaining 10%coming from reserves in the Municipal Airport Fund. The project consists of a new entry road, circular driveway and parking lot to accommodate the new terminal building. It was completed in November 2013. In February 2013, the City issued $19.875 million of 20-Year Combination Tax and Revenue Certificates of Obligation to partially fund Phase II of the Airport Facilities Project at the Regional Airport. The cost of this phase of the project is anticipated to be$28 million,with the remaining costs being funded with grants from the Federal Aviation Administration. The project generally consists of construction of a new terminal building and airport aprons. The debt service for the 20-Year Certificates will be paid from annual entitlement funds received from the Federal Aviation Administration, operating income in the Municipal Airport Fund, and annual grants from the 4A and 4B Sales Tax Corporations and the General Fund. Construction began in August 2013 and is expected to be completed in November 2014. In February 2013, the City refinanced two outstanding General Obligation Bond Issues in the amount of$3.74 million to take advantage of lower interest rates for the remaining life of the bonds. The refinancing of this debt will save the City approximately$250,000 over the remaining five years of this bond issue. During 2013-14, General Funds were used to purchase mowing equipment and hire a crew in the Parks Department to assume mowing responsibility of the major state highways throughout the city in response to reduced mowing efforts by the State. This crew performs the mowing on these major State highways inside the city limits, while the State uses their existing funding levels to mow the minor state highways on a more consistent basis. This new program ties in well with City beautification efforts and the Pride in the Falls Campaign. The annual cost of this program is estimated to be $170,000, with a start-up cost for equipment of $222,000. For The Future. The McNeil Avenue Drainage Project is designed and ready to be constructed when sufficient funds are available in the Storm Water Utility Fund. The engineer's estimate for this drainage project is $4.2 million and it is anticipated that sufficient funding will be available soon. Construction is expected to begin in July 2014. When complete, this project will be a major flood control improvement for numerous residents in the area north of McNeil and Southwest Parkway. The City is also working on plans to construct a permanent pipeline and pump station to convey treated effluent from the River Road Wastewater Treatment Plant to Lake Arrowhead. When complete,this permanent system will replace the temporary emergency above ground pipeline that is about to become operational. Currently,the TCEQ is reviewing the discharge permit application. Once approved, the City will contract with a design engineer,begin 15 miles of land acquisition, and ultimately begin construction. It is estimated that this project will cost approximately $29 million and will be financed with 30-year Combination Tax and Certificates of Obligation. It is also important to note that all of the pipe being used for the Temporary Water Reuse Project will be reused on the permanent system. Another effort to address the drought that was recently undertaken by the City is a Weather Modification Project. Weather modification is a practice that has been ongoing across the state and the country for the past several decades. There are 9 active regions in the State of Texas that have adopted cloud seeding as a water management strategy and numerous other states also have active cloud seeding operations. These states include North Dakota, California, Nevada, Arizona, and New Mexico to name a few. The process involves evaluation of a cloud to determine if it is ripe for seeding, if so, then a seeding agent is applied to the cloud to provide a nuclei for a rain drop. This agent attracts water vapor and causes rain to form. Statistics and data collected over the past several decades have allowed seeding operations to be perfected to the point that is has been proven to increase rainfall by an average 10%to 15%. The cost for this equipment and services is a maximum of$50,000 per month with a six month operational period beginning March 1, 2014 and extending through June. Operations would be suspended during July and August, and then resumed again in September and October. The contract also has provisions for suspension of services at any point during operational period. The target area for the operation includes;King,Cottle,Foard,Knox,Baylor,and Archer Counties. v FINANCIAL INFORMATION In developing and evaluating the City's accounting system, consideration is given to the adequacy of internal control as deemed appropriate by the City Manager. Internal control is designed to provide reasonable,but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition; and(2)the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the evaluation of costs and benefits requires estimates and judgments by the City Manager. All internal control evaluations occur within the above framework. The City believes that its internal control adequately safeguards assets and provides reasonable assurance of proper recording of financial transactions. The Annual Operating Budget is proposed by the City Manager and approved by the City Council following public discussion. Budgetary control is maintained at the class level by the Finance Department within each division by the encumbrance of estimated purchase amounts prior to the release of purchase orders to vendors. Purchase orders which result in an overrun of class level balances are not released until additional appropriations are made available. In instances when budgetary transfers are necessary,management control of the operating budget is maintained at the fund and department level. Transfers within a department of the same fund must be approved by the City Manager. Transfers across departments or funds must be approved by the City Council. Unencumbered appropriation balances lapse at year end and are not carried forward to new budget periods. Open encumbrances are reported as reservations of fund balance at September 30, 2013, and related appropriations are carried forward to the new fiscal year through a supplemental budgetary allocation. In September 2012, the City adopted a fund balance policy for the General Fund, Water/Sewer Fund, and the Sanitation Fund. The policy requires the City to maintain at least 20% of expenditures in unassigned fund balance in the General Fund, 17% of expenditures (less debt service expenses) in the Water/Sewer Fund, and 15% of expenditures in the Sanitation Fund. These financial statements reflect that this policy has been followed. Additionally,the City maintains an informal policy to limit tax supported debt to no more than 5%of total assessed property value or $1,500 per capita. As of September 30, 2013, the City's tax supported debt was approximately$57 million,which is 1.28%of the taxable value of property,and$549 per capita. OTHER INFORMATION Independent Audit The City Charter requires an annual audit of the books of account, financial records, and transactions of all administrative departments of the City by Certified Public Accountants. The accounting firm of Edgin, Parkman, Fleming & Fleming, PC was selected by the Mayor and City Council to satisfy this charter requirement. The auditors' report on the basic financial statements and combining fund statements and schedules is included in the financial section of this report. In addition to meeting the requirements set forth in the City Charter, the audit also was designed to meet the requirements of the federal Single Audit Act Amendments of 1996 and related OMB Circular A-133, and the State Single Audit Act. These reports are issued under separate cover. Awards The Government Finance Officers Association of the United States and Canada(GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Wichita Falls for its Comprehensive Annual Financial Report for the fiscal year ended September 30, 2012. This was the 18`h consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program's requirements, and we are submitting it to GFOA to determine its eligibility for another certificate. vi Acknowledgments My appreciation is extended to the various elected officials, city manager, department heads and employees responsible for the fair presentation of the CAFR and for contributing to the sound financial position of the City of Wichita Falls. The City of Wichita Falls has been blessed with a group of persons who appreciate and respect principles of fiscal restraint and propriety. In particular,I would like to acknowledge the special efforts of the Department of Finance employees who contributed directly to the development of this report. The continuing support of City Council and City Manager, who remain committed to fiscal integrity and financial leadership,is likewise appreciated. Respectfully submitted, �dmlz:;�� Jim Dockery vii Government Finance Officers Association 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, 2012 Executive Director/CEO viii i CITY OF WICHITA FALLS ORGANIZATIONAL CHART WICHI'FA FALLS CITIZENS CITIZEN COMMISSIONS CITY COUNCIL _ CIIILb"IV BOAItUF MUNICIPAL CITY CT CITY COURT MANAGER AT'FOIINI;I' CLERK JUDGE ASSISTANT CITY PUBLIC ASSISTANT'CITY MANAGER COMMUNICATIONS MANAGER /CF0 X ADMINISTRA'FtVE HUMAN PARKS AND COMMUNITY SUPPORTS FINANCE RESOURCES RECREATION DEVELOPMENT DEPARTMENT DEPARTMENT MUNICIPAL INFORMATION ACCOUNTING RECREATION PARKS PLANNING PERSONNEL BUILDING COURT SYSTEMS MAINTENANCE INSPECTION BUILDING UTILITY PURC EMPLOYEE LEC M.L.K. PROPERTY CODE MAINTENANCE COLTION HASING BENEFITS CENTER LIBRARY MANAGEMENT ENFORCEMENT PRINT SHOP RISK CEMETERY NEIGHBORHOOD HOUSING MANAGEMENT RESOURCES AVIATION, POLICE FIRE TRAFFIC AND HEAI:I H il MUL'1'1-PURPOSE DEPARTMENT DEPARTMENT TRANSPORTATION DEI'.AR I NIENT EVENT CENTER DEPARTMENT TECHNICAL FIELD FIRE ARSON AIRPORTS PUBLIC EANIMAL ENVIRONMEN"I AL ITATION CONVENTION RAYCLYMER SERVICES SERVICES SUPPRESSION INVESTIGATION TRANSIT SERVICES HEALTH VISITORS BUREAU EXHIBIT'HALL BLIC SUPPORT PUBLIC SAFETY EMERGENCY PUBLIC SAFETY TRAFFIC FLEET PUBLIC HEALTH LAB/WATER J.S.BR DWELLKAY YEAGER SERVICES TRAINING PREPAREDNESS TRAINING ENGINEERING MAINTENANCE NURSING POLLUTION RAUTILI PIES AG.CENTER COLISEUMA'!'IONS TRANSPORTATION q'IC PLANNING CITY OF WICHITA FALLS, TEXAS LIST OF PRINCIPAL OFFICIALS SEPTEMBER 30, 2013 Title Name Mayor Glenn Barham Mayor Pro-Tem Michael Smith City Council Member Ben Hoover City Council Member Annetta Pope-Dotson City Council Member Brian Hooker City Council Member Tim Ingle City Council Member Mary Ward City Manager Darron Leiker City Attorney Miles Risley Municipal Court Judge Larry Gillen City Clerk Tracy Norr Assistant City Manager/ Director of Community Development Kevin Hugman Director of Aviation, Traffic and Transportation John Burrus Assistant City Manager/Chief Financial Officer Jim Dockery Director of Public Health Lou Kreidler Police Chief Manuel Borrego Fire Chief Earl Foster Director of Parks and Recreation Jack Murphy Director of Public Works and Public Utilities Russell Schreiber Director of Multi-Purpose Events Center Bob Sullivan x Financial Section Independent Auditor's Report EDGIN, PARKMAN, FLEMING & FLEMING, PC CERTIFIED PUBLIC ACCOUNTANTS MICHAEL D.EDGIN,CPA 4110 KELL BLVD.,SECOND FLOOR P.O.Box 750 DAVID L. PARKMAN,CPA,CFE WICHITA FALLS,TEXAS 76307-0750 A.PAUL FLEMING,CPA ;Paj PH.(940)766-5550 • FAx(940)766-5778 J.MARK FLEMING,CPA Independent Auditor's Report on Financial Statements The Honorable Mayor and Members of the City Council City of Wichita Falls, Texas We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Wichita Falls, Texas (the City) as of and for the year ended September 30, 2013, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall financial statement presentation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City as of September 30, 2013, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. 1 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, the Budgetary Comparison Schedule — General Fund, the schedules on the Texas Municipal Retirement System, the Wichita Falls Firemen's Relief and Retirement Fund, and the Wichita Falls Retiree Health Care Plan be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, supporting schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and supporting schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and supporting schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued under separate cover our report dated March 17, 2014, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Respectfully submitted, E dj,�, qj,;�, q C Edgin, Parkman, Fleming & Fleming, PC March 17, 2014 2 Management Discussion and Analysis �-- / OFFICE OF THE CITY MANAGER T e x a s S/u�Skr�S�olderyOPy�rtcr�r�ies City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2013 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, 2013. It is offered here by the management of the City to the readers of its financial statements. Readers should use the information presented here in conjunction with additional information furnished in our letter of transmittal, which can be found in the Introductory Section of this Comprehensive Annual Financial Report. Financial Highlights The assets of the City of Wichita Falls exceeded its liabilities at September 30, 2013, by $387,040,598 (net position). Of this amount, $32,051,169 (unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors. Net position for the City increased by $11,014,700 over the prior year. This increase can be attributed principally to several factors: (1) net income in the Municipal Airport Fund due to the receipt of$3.6 million in grant funds from the Federal Aviation Administration to begin construction of the new Municipal Airport; (2) net income in the Transit Fund due to the receipt of approximately $3.8 million in Federal Transit Funds and other capital contributions that were principally used in the construction of the new Downtown Travel Center; (3) an improvement of over $1 million in the net position of the Sanitation Fund due to lower than anticipated expenditures for equipment, supplies, and personnel costs; (4) net income of over $1.4 million in the Stormwater Drainage Fund to allow unrestricted net position to grow in anticipation of the ensuing McNeil Drainage Improvement Project; (5) better than anticipated revenue from sales taxes and building permits and salary savings from turnover in the General Fund; and (6) an improvement of over $1.4 million in the net position of the Information Technology Fund to allow unrestricted net position to grow in anticipation of future improvements to public safety communication systems. At September 30, 2013, the City's governmental funds reported combined ending fund balances of $47,216,659. Of this amount, $15,957,309, or 33.80%, is available for spending at the government's discretion, (unassigned fund balance). At the end of the current fiscal year, unassigned fund balance for the General Fund was $16,226,597 or 24.18%of total General Fund expenditures. During the 2012-13 fiscal year, the City's total debt increased by $26,012,323. The City issued $19,875,000 in Combination Tax and Revenue Certificates of Obligation to partially finance the construction of the new Municipal Airport Facility. Additionally, $13,000,000 in Combination Tax and Revenue Certificates of Obligation were issued to pay for a Direct Potable Water Reuse Project. 3 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2013 (continued) The City also issued $3,740,000 in General Obligation Refunding Bonds to capitalize on lower interest rates. Finally, over $2,660,000 of capital lease obligations were incurred for energy retrofit projects in various City facilities through an energy performance contract. This new debt was offset partially as the City continued to retire outstanding General Obligation Bonds, Water and Sewer System Revenue Bonds, and Combination Tax and Revenue Bonds. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The reporting focus is on the City as a whole and on individual major funds. It is intended to present a comprehensive view of the City's financial activities. The basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report contains other supplementary information in addition to the basic financial statements. Government-wide Financial Statements The government-wide financial statements,which can be found on pages 14-15 of this report, include the Statement of Net Position (Exhibit A-1) and the Statement of Activities (Exhibit A-2). These statements are designed to provide readers with a broad overview of the City's finances in a manner similar to a private-sector business. Both are prepared using the economic resources focus and the accrual basis of accounting; meaning that all current year's revenues and expenses are included regardless of when cash is received or paid. Thus, revenues and expenses are reported in these statements for some items that will result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but not used vacation leave). The Statement of Net Position presents information on all of the City's assets and liabilities, including capital assets and long-term obligations. The difference between the City's assets and liabilities is reported as net position. Over time, the increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. Other indicators of the City's financial position should be taken into consideration, such as the change in the City's property tax base and condition of the City's infrastructure (e.g., roads, traffic signals, water and sewer lines, etc.),in order to more accurately assess the overall financial condition of the City. The Statement of Activities presents information showing how the City's net position changed during the most recent fiscal year. It focuses on both the gross and net costs of the government services. This statement includes all current year revenues and expenses. The Statement of Net Position and the Statement of Activities divide the City's activities into three types: Governmental activities — Most of the City's basic services are reported here, including police, fire, parks and recreation, public works, health, traffic and transportation, community development and planning, duplicating services, information technology, health insurance claims, and general administration and finance. The Multi-Purpose Events Center and Champions Golf Course are also 4 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2013 (continued) reported as governmental activities. Property taxes, sales taxes, franchise fees, and various grant funds provide the majority of financing for these activities. Business-type activities—Activities for which the City charges fees to customers to pay most or all of the cost of a service it provides are reported as business-type activities. The City's business-type activities include water and wastewater treatment and distribution, solid waste collection and disposal, municipal airports, transit system, storm water drainage improvements, fleet maintenance services and water park operations. Component Units—Four legally separate organizations, for which the City is financially accountable, are included in these statements as discretely presented component units. These organizations include the Wichita Falls Economic Development Corporation, Wichita Falls 4B Sales Tax Corporation, Wichita Falls Reinvestment Zone#2, and the Wichita Falls Reinvestment Zone#3. Fund Financial Statements The City of Wichita Falls, like other state and local governments, uses fund accounting to provide more detailed information about the City's most significant funds, not the City as a whole. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Some funds are required to be established by state law or bond covenants. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental Funds—These funds are used to account for the majority of the City's activities,which are essentially the same functions reported as governmental funds in the government-wide statements. However, unlike the government-wide financial statements, governmental fund financial statements are reported using an accounting method identified as the modified accrual basis of accounting,which measures cash and all other financial assets that can be readily converted to cash. The governmental fund statements focus on near-term inflows and outflows of expendable resources, as well as expendable resources available at the end of the fiscal year for future spending. Such information may be useful in evaluating a government's near-term financing requirements. The focus of the governmental funds financial statements is narrower than that of the government- wide financial statements. Therefore, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide statements. By doing so,readers may better understand the long-term impact of the government's short term financing decisions. Both the Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances provide a reconciliation to facilitate this comparison. The reconciliation explains the differences between the government's activities reported in the government-wide statements and the information presented in the governmental funds financial statements. The City of Wichita Falls maintains 15 individual governmental funds. Information for the General Fund is presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund 5 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2013 (continued) Statement of Revenues and Changes in Fund Balances because it is considered a major fund of the City. Data for the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the non-major governmental funds are provided in the Combining Financial Statement Section of this report. The Basic Governmental Funds Financial Statements can be found on pages 16-19 of this report. Proprietary Funds — When the City charges customers for services it provides, whether to outside customers or to other units within the City, the activities are generally reported in proprietary funds. The City of Wichita Falls maintains two different types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water and sewer operations, sanitation collection and disposal services, municipal airports, transit operations, storm water utility district, and water park operations. Internal service funds are an accounting device used to report activities that provide supplies and services to other City programs, such as fleet maintenance, print shop services, information technology, and employee benefit trust. Because these services benefit both governmental and business-type functions, they have been allocated between governmental and business-type activities in the government-wide financial statements. Proprietary fund financial statements provide the same type of information as the business-type activities shown in the government-wide financial statements, only in more detail and include some of the internal service fund-type activities. The proprietary fund financial statements provide separate information for the Water and Sewer Fund and the Sanitation Fund since they are considered to be major funds of the City. The non-major proprietary funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for each of the non- major proprietary funds are provided in the Combining Financial Statement Section of this report. Fiduciary Funds — Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City's own programs. The accounting method used for fiduciary funds is much like that used for proprietary funds. Agency funds are a component of 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. 6 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2013 (continued) Notes to the Financial Statements The Notes to the Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. These notes can be found on pages 26-59 of this report. Government-Wide Financial Analysis The City's combined net position was $387,040,598 as of September 30, 2013, an increase of $11,014,700, or 2.93% from the prior year. Using the Tables below, an analysis of the net position of the City can be made. The largest portion of the City's net position, $336,859,692, or 87.03%, is reflected in capital assets (land and improvements, buildings, infrastructure, machinery and equipment), less any related debt used to acquire those assets that is still outstanding. The City uses these assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the City reports its capital assets net of related debt, the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City's net position, $18,129,737, or 4.68%, represents resources that are subject to external restrictions on how they may be used. The remaining balance of net position, $32,051,169, or 8.28%, may be used to meet the government's ongoing obligations to citizens and creditors. Net Position (in thousands) Governmental Business-type Activities Activities Total 2013 2012 2013 2012 2013 2012 Current and Other Assets $ 53,896 $ 38,034 $ 61,845 $ 58,822 $ 115,741 $ 96,856 Capital Assets 175,097 172,672 315,382 302,357 490,479 475,029 Total Assets 228,993 210,706 377,227 361,179 606,220 571,885 Deferred Outflows of Resources - - 2,531 - 2,531 - Long Term Liabilities 68,298 48,214 135,427 128,997 203,775 177,211 Other Liabilities 9,467 9,048 8,519 7,563 17,986 16,611 Total Liabilities 77,765 57,262 143,946 136,560 221,711 193,822 Net Position: Net Investment in Capital Assets 138,319 139,059 198,540 185,088 336,859 324,147 Restricted 6,248 6,931 11,882 11,374 18,130 18,305 Unrestricted 6,661 7,454 25,390 28,157 32,051 35,611 Total Net Position $ 151,228 153,444 $235,812 $224,619 $387,040 &178 663 7 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2013 (continued) CHANGES IN NET POSITION (in thousands) Governmental Business-type Activities Activities Total 2013 2012 2013 2012 2013 2012 Revenues: Program Revenues: Charges For Services $ 9,517 $ 9,388 $ 51,743 $ 55,882 $ 61,260 $ 65,270 Operating Grants and Contributions 11,157 9,869 3,787 2,372 14,944 12,241 Capital Grants and Contributions 4,394 8,066 1,339 182 5,733 8,248 General Revenues: Property Taxes 29,107 28,626 - - 29,107 28,626 Sales Taxes 22,062 21,407 - - 22,062 21,407 Other Taxes/Fees 7,274 7,521 - - 7,274 7,521 Investment Earnings 53 54 28 40 81 94 Miscellaneous 636 327 149 (59) 785 268 Total Revenue 84,200 85,258 57,046 58,417 141,246 143,675 Expenses: Administrative Services 12,782 11,935 - - 12,782 11,935 Police 22,768 22,104 - - 22,768 22,104 Fire 14,226 13,523 - - 14,226 13,523 Parks and Recreation 5,580 5,153 - - 5,580 5,153 Accounting/Finance 924 976 - - 924 976 Community Development 6,729 6,777 - - 6,729 6,777 Public Works 7,748 7,957 - - 7,748 7,957 Health 5,168 5,022 - - 5,168 5,022 Traffic and Transportation 2,757 2,511 - - 2,757 2,511 MPEC 4,137 3,896 - - 4,137 3,896 Interest and Fees on Long-term Debt 2,123 1,711 - - 2,123 1,711 Municipal Airport - - 655 530 655 530 Kickapoo Airport - - 1,496 1,420 1,496 1,420 Transit - - 1,939 1,903 1,939 1,903 Sanitation - - 9,236 8,905 9,236 8,905 Water and Sewer - - 30,136 28,996 30,136 28,996 Stormwater Drainage - - 430 407 430 407 Waterpark - - 1,397 1,376 1,397 1,376 Total Expenses 84,942 81,565 45,289 43,537 130,231 125,102 Increase(Decrease)in Net Position Before Transfers (742) 3,693 11,757 14,880 11,015 18,573 Transfers (1,474) (2,363) 1,474 2,363 - - Increase(Decrease)in Net Position (2,216) 1,330 13,231 17,243 11,015 18,573 Net Position-Beginning of Year 153,444 152,114 224,619 207,376 378,063 359,490 Prior Period Adjustment - - (2,038) - (2,038) - Net Position-End of Year $151,228 153 444 235 812 224 619 38 040 378 063 8 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2013 (continued) Governmental Activities — Governmental Activities reduced the City's net position by $2,215,483 for numerous reasons, including but not limited to: (1) use of$117,000 of Hotel/Motel Fund balance to cover operating losses at the Multi-Purpose Events Center; (2) use of $364,000 of General Fund Balance for planned capital projects; (3) use of prior year grant revenues for the HOME Investment Partnership Program; (4) the planned use of approximately $115,000 in Debt Service Fund balance; (5) $223,000 of expenditures in the MPEC Fund from prior year grant from the 4B Sales Tax Fund for the partial cost of a dehumidification system for the Kay Yeager Coliseum; (6)the use of$363,000 of prior year sales tax receipts for street improvements in the downtown; and (7) use of bond proceeds for miscellaneous capital projects such as the Callfield/Rhea/Lawrence Road Realignment Project, Park Trail System, and the Animal Services Center. Business-Type Activities — Business-type Activities increased the City's net position by $13,230,183, which was 120.11% of the total growth in the City's net position. Over$6.3 million of this increase in net position can be attributed to fund transfers from FAA Airport Improvement Grant Funds and bond proceeds to the Municipal Airport Fund for construction costs related to the new Municipal Airport Facility. The Transit Fund also reflects nearly $3.8 million in intergovernmental revenue from the Federal Transit Administration and other capital contributions, much of which was used for the construction of the new Downtown Travel Center. Other areas of improvement to net position in the business-type activities include over $1 million in the Sanitation Fund due to lower than anticipated expenditures for equipment, supplies, and personnel costs; net income of over $1.4 million in the Stormwater Drainage Fund to allow unrestricted net position to grow in anticipation of the ensuing McNeil Drainage Improvement Project; and approximately $253,000 in net income in the Water Park Fund. Financial Analysis of the City's Funds Governmental Funds — The focus of the governmental funds is to provide information on near-term inflows, outflows and balances of expendable resources. Such information is useful in assessing the City's financing requirements. In particular,unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of September 30, 2013, the City's governmental funds reported combined fund balances of $47,216,659, which is an increase of$16,412,713 from the prior year. Virtually all of this increase is attributable to the amount of bond proceeds remaining in the Airport Construction Fund at the end of the fiscal year. The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the General Fund was $16,226,597, a reduction of$344,078 from the prior year. As a measure of the General Fund's liquidity, it may be useful to compare both the unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 24.18% of total General Fund expenditures, while the total fund balance represents 26.19% of total General Fund expenditures. 9 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2013 (continued) Proprietary Funds — The financial statements of the proprietary funds provide information for two types of funds: the business type (enterprise) funds and the internal service funds. The accounting principles applied to proprietary funds are similar to that of the private sector. Consequently, with the exception of the allocation of internal service fund net income or loss, the net position and changes in net position of the enterprise funds in these financial statements are identical with the net position and changes in net position reflected in the business type activities in the city-wide presentation. The City's internal service funds include the Fleet Maintenance Fund, Employee Benefit Trust Fund, Duplicating Services Fund and the Information Technology Fund. At the close of September 30, 2013, the net position for the City's internal service funds was $24,874,286, an increase of $246,461. Although this increase is not significant,the Fleet Maintenance Fund reflects a reduction of$695,789 in net position principally because depreciation expenses were higher than equipment replacement expenses. Additionally, net position in the Employee Benefit Trust Fund decreased by $453,648 because the cost of employee and retiree health claims exceeded revenues for that program. These reductions in net position were offset, by an increase of$1,432,467 in net position of the Information Technology Fund to increase unrestricted net position to finance future improvements to public safety communication systems. General Fund Budgetary Highlights The final amended expenditure budget for the General Fund, including transfers out, was increased by $1,190,947 from the original adopted budget. The reasons for this increase in appropriations can be briefly summarized as follows: Approximately $1,011,000 of prior year encumbrances for numerous commitments were carried forward to the 2012-13 amended budget, most of which was for street improvements, traffic control equipment and street lights. Approximately $180,000 was appropriated for an adjustment in the amount of the energy retrofit projects conducted in numerous City facilities. Actual revenues in the General Fund for the 2012-13 fiscal year were $64,594,203, which was $728,546 above final budgeted figures. Sales tax receipts accounted for approximately$305,000 of this amount. Building permits,principally from roofing contractors responding to a hail storm also resulted in additional revenues. Finally, contributions received from developers of street and drainage improvements,which are not budgeted,resulted in approximately$196,000 of revenue. Actual expenditures in the General Fund for the 2012-13 fiscal year were $67,094,298, which was $1,055,044 below budgeted expenditures. Much of this variance was due to turnover in personnel that allowed positions to remain unfilled for a period of time. There was also a large encumbrance for street repairs that was not liquidated by the close of the fiscal year that will be expended during the 2013-14 fiscal year. 10 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2013 (continued) Capital Asset and Debt Administration Capital Assets - The City's investment in capital assets for its governmental and business-type activities as of September 30, 2013 amounts to $490,479,015 (net of accumulated depreciation). This investment in capital assets includes land, buildings, equipment, infrastructure and construction in progress. Major capital asset events during this fiscal year included the following: Construction in progress of the new Municipal Airport Facilities Construction in progress of the Direct Potable Water Reuse Project Wastewater Treatment Plant Anaerobic Digester Project Continued water system improvements,principally at Cypress Water Treatment Plant Construction of the City's new Downtown Travel Center Energy retrofit projects in numerous City facilities Street Rehabilitation and Utility Improvement Projects Capital Assets,net of Accumulated Depreciation (in thousands) Governmental Business-type Activities Activities Total 2013 2012 2013 2012 2013 2012 Land $ 10,722 $ 10,614 $9,042 $ 9,004 $ 19,764 $ 19,618 Land Betterments 18,193 18,724 29,474 24,743 47,667 43,467 Buildings, Systems and Improvements 53,930 50,693 238,805 191,751 292,735 242,444 Infrastructure 80,543 78,811 - - 80,543 78,811 Machinery and Equip 11,500 12,131 2,771 2,535 14,271 14,666 Furniture and Fixtures 3 4 - - 3 4 Motor Vehicles - - 16,906 18,095 16,906 18,095 Construction in Progress 206 1,695 18,384 56,230 18,590 57,925 Totals IN2 358 &L75 030 Additional information on the City's capital assets can be found in Note 7 on pages 41-43 of this report. 11 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2013 (continued) Long Term Debt— At the end of the current fiscal year, the City of Wichita Falls had a total bonded debt, notes and capital leases outstanding of$191,696,968. During the 2012-13 fiscal year, the City issued $19,875,000 in Combination Tax and Revenue Certificates of Obligation to partially finance the construction of the new Municipal Airport Facility. Additionally, $13,000,000 in Combination Tax and Revenue Certificates of Obligation were issued to pay for a Direct Potable Water Reuse Project. The City also issued $3,740,000 in General Obligation Refunding Bonds to capitalize on lower interest rates. Finally, over $2,660,000 of capital lease obligations were incurred for energy retrofit projects in various City facilities through an energy performance contract. This new debt was offset partially as the City continued to retire outstanding General Obligation Bonds, Water and Sewer System Revenue Bonds, and Combination Tax and Revenue Bonds. As of September 30, 2013, Moody's Investor's Service had assigned a credit rating of Aa2 for the City's General Obligation Bonds and a rating of Al for the City's Water and Sewer System Revenue Bonds. Standard & Poor's had assigned a credit rating of AA for the City's General Obligation Bonds and a rating of AA-for its Water and Sewer System Revenue Bonds. Outstanding Debt at Year-End (in thousands) Governmental Business-type Activities Activities Total 2013 2012 2013 2012 2013 2012 General Obligation Bonds $ 5,492 $ 4,116 $ 1,930 $ - $ 7,422 $ 4,116 Combination Tax and Revenue Bonds 51,571 35,503 27,888 19,799 79,459 55,302 Utility System Revenue Bonds - - 99,212 102,566 99,212 102,566 Capital Lease Payable 3,833 1,453 1,262 1,704 5,095 3,157 Notes Payable - - 509 544 509 544 Total $ 60,896 $ 41,072 $ 130,801 $ 124,613 $ 191,697 $ 165,685 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 30,2013, was $.63526 per $100, which means that the City has a tax margin of$1.61474 per $100, and could generate up to $72,093,645 additional tax revenue a year from the present assessed valuation of $4,464,721,591 before the limit is reached. The current ratio of general bonded debt outstanding to the assessed value of all taxable property is 1.28%. 12 City of Wichita Falls, Texas Management's Discussion and Analysis September 30, 2013 (continued) Additional information about the City's long-term debt can be found in Note 13 on pages 51-54 of this report. Economic Factors and Next Year's Budget and Rates Total 2013-14 operating revenues, including transfers in from other funds, are budgeted at $159,069,603,which is an increase of$4,315,829, or 2.79%from the 2012-13 adopted budget. In the 2013-14 budget, sales taxes in the General Fund are projected to generate $22,034,341, an increase of $585,524, or 2.73% from the prior year adopted budget. It should be noted that this projection was based upon an estimate of 2012-13 actual receipts and a growth rate of 2.00%. The Property Tax is the largest source of revenue in the City's budget and is also relied heavily upon to provide general City services. The property tax base, as certified by the Wichita County Appraisal District, is $4.55 billion, an increase of$83.9 million, or 1.88% from the prior year. This is the fifth consecutive year that the property tax base has shown very slight growth or remained flat. The property tax rate was maintained at the prior rate of$0.63526 per$100 of taxable property value. The City maintains a reserve account in the General Fund to be used for major emergencies such as a widespread tornado, large legal liabilities or important one-time expenditures. The City's fund balance policy established a goal of maintaining 20% of expenditures in unassigned General Fund balance. Current figures indicate that the City is exceeding this fund balance amount in the General Fund. As a result, the 2013-14 budget included the use of$1,400,575 of General Fund balance for numerous one- time projects and programs. The prior adopted budget included appropriations of $1,518,026 for similar one-time projects, but much of this budgeted amount was not used due to higher than budgeted revenues and lower than budgeted expenditures. The budget also included an 8.5% increase in retail water rates to begin paying debt service on the Direct Potable Water Reuse Project and begin a new dead-end water main flushing program in response to requirements of the Texas Commission on Environmental Quality. Requests for Information This financial report is designed to provide a general overview of the finances of the City of Wichita Falls for all those with an interest in the government's finances. Questions concerning any of the information provided in this report, or request for additional financial information, should be addressed to the City Finance Department, 1300 Seventh Street,Wichita Falls,Texas 76301. 13 Basic Financial Statements EXHIBIT A-1 CITY OF WICHITA FALLS, TEXAS STATEMENT OF NET POSITION SEPTEMBER 30, 2013 Primary Government Governmental Business-type Component Activities Activities Total Units Assets Cash and cash equivalents $ 47,128,551 $ 18,803,519 $ 65,932,070 $ 16,842,408 Investments 725,000 - 725,000 - Receivables(net): Taxes and assessments 927,421 - 927,421 Customer and trade - 5,859,231 5,859,231 - Government agencies 6,965,227 847,420 7,812,647 1,317,228 Other 1,405,778 92,514 1,498,292 - Internal balances (6,341,815) 6,341,815 - - Inventory 381,244 1,746,340 2,127,584 - Prepaid items 88,739 29,122 117,861 - Other assets 201,727 - 201,727 - Restricted assets: Cash and cash equivalents 2,414,417 28,125,199 30,539,616 - Capital assets not being depreciated 10,927,595 27,426,361 38,353,956 1,469,797 Capital assets net of accumulated depreciation 164,169,237 287,955,822 452,125,059 813,613 Total assets 228,993,121 377,227,343 606,220,464 20,443,046 Deferred Outflows of Resources Deferred losses on bond refundings - 2,531,352 2,531,352 - Liabilities Accounts payable-trade 2,263,340 3,660,852 5,924,192 138,114 Accrued payroll 1,208,073 314,127 1,522,200 - Accruedinterestpayable 630,599 888,331 1,518,930 - Payable to government agencies 478,153 72,784 550,937 - Estimated health claims payable 528,397 - 528,397 - Other liabilities 4,321,105 694,836 5,015,941 - Unearned revenue 37,236 - 37,236 - Customer deposits - 2,888,129 2,888,129 - Long-term liabilities: Portion due or payable within one year 5,865,526 7,913,714 13,779,240 - Portion due or payable after one year 62,432,309 127,513,707 189,946,016 - Totalliabilities 77,764,738 143,946,480 221,711,218 138,114 Net Position Net investment in capital assets 138,319,208 198,540,484 336,859,692 2,283,410 Restricted for: Perpetual care(nonexpendable) 998,109 - 998,109 - Debt service(expendable) 692,576 11,881,663 12,574,239 - Capital projects(expendable) 1,962,270 - 1,962,270 - Federal grant programs(expendable) 2,577,728 2,577,728 - Tourism(expendable) 17,391 - 17,391 - Unrestricted 6,661,101 25,390,068 32,051,169 18,021,522 Total net position $ 151,228,383 $ 235,812,215 $ 387,040,598 $20,304,932 See accompanying notes to the basic financial statements. 14 EXHIBIT A-2 CITY OF WICHITA FALLS, TEXAS STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2013 Net(Expense)Revenue and Program Revenues Changes in Net Position Operating Capital Primary Government Charges for Grants and Grants and Governmental Business-type Component Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Units Primary government: Governmental activities: Administrative services $ 12,782,404 $ 4,304,737 $ 231,660 $ $ (8,246,007) $ - $ (8,246,007) $ Police 22,767,560 624,272 317,829 (21,825,459) - (21,825,459) Fire 14,226,064 18,459 75,725 153,484 (13,978,396) - (13,978,396) Parks and recreation 5,579,717 524,519 187,803 - (4,867,395) - (4,867,395) Accounting/finance 924,240 - - (924,240) - (924,240) Community development 6,729,171 1,131,684 4,978,980 - (618,507) - (618,507) Public works 7,747,847 116,035 322,465 595,257 (6,714,090) - (6,714,090) Health 5,167,794 1,073,172 2,020,387 - (2,074,235) - (2,074,235) Traffic and transportation 2,757,545 126,163 810,454 3,645,297 1,824,369 - 1,824,369 Multi-Purpose Events Center 4,136,952 1,597,702 - - (2,539,250) - (2,539,250) Interest and fees on long-term debt 2,122,969 - 2,212,045 - 89,076 - 89,076 Total governmental activities 84,942,263 9,516,743 11,157,348 4,394,038 (59,874,134) - (59,874,134) Business-type activities: Municipal Airport 655,452 769,557 - - - 114,105 114,105 Kickapoo Airport 1,495,562 1,255,153 - - - (240,409) (240,409) Transit 1,938,827 410,737 3,787,014 592,313 - 2,851,237 2,851,237 Sanitation 9,236,474 12,606,675 - - - 3,370,201 3,370,201 Water and sewer 30,135,738 32,798,786 496,952 - 3,160,000 3,160,000 Stormwater drainage 430,012 2,503,255 - - 2,073,243 2,073,243 Waterpark 1,397,270 1,398,164 250,000 - 250,894 250,894 Total business-type activities 45,289,335 51,742,327 3,787,014 1,339,265 - 11,579,271 11,579,271 Total primary government $ 130,231,598 $ 61,259,070 $ 14,944,362 $ 5,733,303 (59,874,134) 11,579,271 (48,294,863) Component units: Community development $ 8,265,005 $ 106,800 $ 368,617 $ - - - - (7,789,588) General revenues and transfers: Taxes: Property tax 29,107,168 - 29,107,168 442,910 Sales tax 22,062,365 - 22,062,365 7,354,122 Franchise fees 5,423,680 - 5,423,680 - Hotel occupancy tax 1,578,764 - 1,578,764 Beverage tax 230,728 - 230,728 Bingo tax 40,122 - 40,122 - Investment earnings 53,244 27,902 81,146 18,996 Miscellaneous 636,417 149,173 785,590 35,062 Transfers (1,473,837) 1,473,837 - - Total general revenues and transfers 57,658,651 1,650,912 59,309,563 7,851,090 Change in net position (2,215,483) 13,230,183 11,014,700 61,502 Net position-beginning 153,443,866 224,619,149 378,063,015 20,243,430 Prior period adjustment - (2,037,117) (2,037,117) - Net position-ending $ 151,228,383 $ 235,812,215 $ 387,040,598 $ 20,304,932 See accompanying notes to the basic financial statements. 15 EXHIBIT A-3 CITY OF WICHITA FALLS, TEXAS BALANCE SHEET-GOVERNMENTAL FUNDS SEPTEMBER 30, 2013 Total Nonmajor Governmental General Governmental Funds Assets Cash and cash equivalents $ 13,880,144 $ 31,219,136 $ 45,099,280 Investments 725,000 - 725,000 Receivables(net): Taxes and assessments 738,658 188,763 927,421 Other City funds 4,574,630 - 4,574,630 Government agencies 3,977,688 2,987,539 6,965,227 Other 1,314,939 90,839 1,405,778 Inventory 309,242 72,002 381,244 Prepaid items 75,232 12,938 88,170 Other assets - 201,727 201,727 Total assets $ 25,595,533 $ 34,772,944 $ 60,368,477 Liabilities Accounts payable $ 1,432,356 $ 692,941 $ 2,125,297 Accrued payroll 1,089,032 92,646 1,181,678 Accrued interest payable - 30,357 30,357 Payable to other City funds - 3,533,218 3,533,218 Payable to government agencies 375,338 102,815 478,153 Other liabilities 3,731,229 589,876 4,321,105 Claims and judgments payable 82,888 - 82,888 Unearned revenue - 37,236 37,236 Total liabilities 6,710,843 5,079,089 11,789,932 Deferred inflows of resources Unavailable revenues 1,314,595 47,291 1,361,886 Fund balances Nonspendable: Inventory and prepaid items 384,574 84,940 469,514 Restricted for: Perpetual care - 998,109 998,109 Debt service 645,285 645,285 Capital projects 22,695,587 22,695,587 Federal and state grant programs 2,577,728 2,577,728 Tourism 17,391 17,391 Committed for: Golf course 29,029 29,029 Multi-Purpose Events Center 154,824 154,824 Local projects - 2,712,959 2,712,959 Assigned for: Subsequent year's expenditures 958,924 - 958,924 Unassigned 16,226,597 (269,288) 15,957,309 Total fund balances 17,570,095 29,646,564 47,216,659 Total liabilities,deferred inflows or resources and fund balances $ 25,595,533 $ 34,772,944 $ 60,368,477 See accompanying notes to the basic financial statements. 16 EXHIBIT A-4 CITY OF WICHITA FALLS, TEXAS RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2013 Total fund balances-governmental funds (Exhibit A-3) $ 47,216,659 Amounts reported for governmental activities in the Statement of Net Position (Exhibit A-1) are different because: Capital assets used in governmental activities are not financial resources and therefore not reported in the funds. Capital assets at year-end consist of: Gross capital assets $ 297,928,097 Related accumulated depreciation 123,632,404 174,295,693 Property taxes receivable and municipal court fines are not available to pay for current period expenditures and therefore are reported as deferred inflows of resources in the funds. 1,361,886 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 57,062,301 Capital lease payable 3,833,640 Accrued vacation and sick leave 7,220,094 Claims and judgments payable 55,692 Accrued interest 600,242 (68,771,969) Internal service funds are used by management to charge the costs of duplicating services, information technology and health insurance claims to the individual funds. The assets and liabilities of these internal service funds are included with the governmental activities. 4,689,413 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. (7,563,299) Total net position -governmental activities (Exhibit A-1) $ 151,228,383 See accompanying notes to the basic financial statements. 17 EXHIBIT A-5 CITY OF WICHITA FALLS, TEXAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2013 Total Nonmajor Governmental General Governmental Funds Revenues Taxes $ 56,183,817 $ 2,429,798 $ 58,613,615 Charges for services 2,648,471 774,150 3,422,621 Licenses and permits 2,234,081 - 2,234,081 Fines and forfeitures 2,116,103 319,522 2,435,625 Intergovernmental revenue 10,176 11,712,348 11,722,524 Contributions 338,223 3,490,639 3,828,862 Miscellaneous revenue 1,063,332 2,400,093 3,463,425 Total revenues 64,594,203 21,126,550 85,720,753 Expenditures Administrative services 11,451,591 1,226,276 12,677,867 Police 20,520,034 364,710 20,884,744 Fire 13,572,017 235,682 13,807,699 Parks and recreation 4,912,277 245,140 5,157,417 Accounting/finance 793,960 - 793,960 Community development 1,848,692 4,912,134 6,760,826 Public works 5,192,943 132,070 5,325,013 Health 2,763,801 2,240,580 5,004,381 Traffic and transportation 1,997,362 470,689 2,468,051 Multi-Purpose Events Center - 3,365,932 3,365,932 Capital outlay 4,041,621 3,825,847 7,867,468 Debt service-principal - 2,515,000 2,515,000 Debt service-interest and paying agent fees - 1,618,299 1,618,299 Debt service-bond issuance costs - 310,777 310,777 Total expenditures 67,094,298 21,463,136 88,557,434 Excess of revenues over(under)expenditures (2,500,095) (336,586) (2,836,681) Other Financing Sources (Uses) Issuance of bonds - 19,875,000 19,875,000 Premium on issuance of bonds - 96,293 96,293 Issuance of refunding bonds - 3,740,000 3,740,000 Premium on issuance of refunding bonds - 157,968 157,968 Issuance of capital lease 777,681 1,888,562 2,666,243 Payment to refunded bond escrow agent - (3,831,570) (3,831,570) Transfers in 2,984,416 4,197,102 7,181,518 Transfers out (1,626,392) (9,009,666) (10,636,058) Total other financing sources(uses) 2,135,705 17,113,689 19,249,394 Net change in fund balance (364,390) 16,777,103 16,412,713 Fund balances-beginning 17,934,485 12,869,461 30,803,946 Fund balances-ending $ 17,570,095 $ 29,646,564 $ 47,216,659 See accompanying notes to the basic financial statements. 18 EXHIBIT A-6 CITY OF WICHITA FALLS, TEXAS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30,2013 Net change in fund balances-total governmental funds(Exhibit A-5) $ 16,412,713 Amounts reported for governmental activities in the Statement of Activities(Exhibit A-2) are different because: Capital outlays are reported in governmental funds as expenditures.However,in the Statement of Activities,the cost of those assets are allocated over their estimated useful lives as depreciation expense.The net difference between the two is as follows: Capital outlay during the year $ 8,033,659 Depreciation expense for the year 6,092,429 1,941,230 Proceeds from the sale of capital assets are recorded as revenues when received in the governmental funds. In the Statement of Activities,the difference between the proceeds and the book value of the capital asset is reported as a gain(loss)from sale. (122,246) Because property tax receivables and municipal court receivables will not be collected for several months after the City's fiscal year ends,they are not considered'available'revenues and are deferred in the governmental funds.Deferred inflows decreased by this amount this year. (102,782) The issuance of long-term debt provides current financial resources to governmental funds. However,the issuance increases long-term liabilities in the Statement of Net Position.Long-term debt issued in 2012-2013 was: Capital lease payable (2,666,243) General obligation bonds issued (23,869,261) (26,535,504) Repayment of long-term debt principal is an expenditure in the governmental funds,but the repayment reduces long-term liabilities in the Statement of Net Position.Bond and capital lease principal payments in 2012-13 were: 6,723,555 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 (238,534) Claims and judgments payable 24,752 (213,782) Interest on long-term debt in the Statement of Activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due,and thus requires the use of current financial resources. In the Statement of Activities,however,interest expense is recognized as the interest accrues,regardless of when it is due.The increase in accrued interest is as follows: Accrued interest at September 30,2012 309,126 Accrued interest at September 30,2013 600,242 (291,116) Internal service funds are used by management to charge the costs of duplicating services, information technology and health insurance claims to the individual funds.The net revenues of these internal service funds are included with the governmental activities. 998,205 Internal service funds are used by management to charge the costs of central garage services to the individual funds.The net revenue of this fund is included with the business-type activities. This amount represents the governmental activity portion of the central garage activity. (1,025,756) Change in net position of governmental activities(Exhibit A-2) $ (2,215,483) See accompanying notes to the basic financial statements. 19 EXHIBIT A-7 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF FUND NET POSITION PROPRIETARY FUNDS SEPTEMBER 30,2013 Enterprise Funds Nonmajor Water and Enterprise Internal Sewer Sanitation Funds Total Service Funds Assets Current assets: Cash and cash equivalents $ 6,607,399 $ 4,341,040 $ 6,761,103 $ 17,709,542 $ 3,123,248 Restricted cash and cash equivalents 27,256,609 - 868,590 28,125,199 2,414,417 Receivables(net): Customer and trade 4,173,655 1,421,240 264,336 5,859,231 - Government agencies 67,354 - 780,066 847,420 - Other 1,670 - 54,025 55,695 36,819 Inventory 957,179 - 48,780 1,005,959 740,381 Prepaid items 5,510 240 23,372 29,122 569 Total current assets 39,069,376 5,762,520 8,800,272 53,632,168 6,315,434 Long-term assets: Capital assets, net of accumulated depreciation 235,533,251 7,614,334 52,365,418 295,513,003 20,670,319 Total long-term assets 235,533,251 7,614,334 52,365,418 295,513,003 20,670,319 Total assets 274,602,627 13,376,854 61,165,690 349,145,171 26,985,753 Deferred Outflows of Resources Deferred losses on bond refundings 2,531,352 - - 2,531,352 - See accompanying notes to the basic financial statements. 20 EXHIBIT A-7 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF FUND NET POSITION PROPRIETARY FUNDS SEPTEMBER 30,2013 Enterprise Funds Nonmajor Water and Enterprise Internal Sewer Sanitation Funds Total Service Funds Liabilities Current liabilities: Accounts payable-trade 2,910,958 94,211 464,694 3,469,863 329,032 Accrued payroll 178,679 63,492 36,068 278,239 62,283 Accrued vacation and sick leave 347,488 115,283 39,320 502,091 117,199 Payable to other City funds - - 973,168 973,168 68,244 Payable to government agencies - 69,556 3,228 72,784 - Estimated health claims payable - - - - 528,397 Other liabilities 426,109 10,028 226,304 662,441 32,395 Payable to U.S. Government-current maturity 35,397 - - 35,397 - Capital leases-current maturities 24,222 - 24,222 237,820 Revenue bonds-current maturities 7,091,275 - 7,091,275 - Accrued interest-revenue bonds 888,331 - - 888,331 - Total current liabilities 11,902,459 352,570 1,742,782 13,997,811 1,375,370 Long-term liabilities: Payable to U.S.Government, less current maturities 474,199 - - 474,199 - Capital leases, less current maturities 263,522 - 263,522 736,099 Revenue bonds, less current maturities 121,938,493 - 121,938,493 - Estimated liability for landfill closure and post-closure care costs - 4,050,323 4,050,323 - Customer deposits 2,888,129 - 2,888,129 - Total long-term liabilities 125,564,343 4,050,323 129,614,666 736,099 Total liabilities 137,466,802 4,402,893 1,742,782 143,612,477 2,111,469 Net Position Net investment in capital assets 119,665,471 7,614,334 52,365,418 179,645,223 19,696,400 Restricted for debt service 11,881,663 - - 11,881,663 - Unrestricted 8,120,043 1,359,627 7,057,490 16,537,160 5,177,886 Total net position $139,667,177 $ 8,973,961 $ 59,422,908 208,064,046 $24,874,286 Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds 27,748,169 Net position of business type activities $235,812,215 See accompanying notes to the basic financial statements. 21 EXHIBIT A-8 CITY OF WICHITA FALLS, TEXAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013 Enterprise Funds Nonmajor Water and Enterprise Internal Sewer Sanitation Funds Total Service Funds Operating revenues: Charges for services $ 32,616,089 $12,529,632 $ 3,962,171 $ 49,107,892 $ 12,736,400 Rents,concessions and other 182,697 77,043 2,374,695 2,634,435 380,322 Contributions - - - - 10,934,977 Total operating revenues 32,798,786 12,606,675 6,336,866 51,742,327 24,051,699 Operating expenses: Personnel services 8,525,191 3,298,232 1,903,495 13,726,918 3,223,064 Supplies and materials 1,963,736 278,533 1,413,566 3,655,835 4,465,812 Maintenance and repairs 1,568,635 310,773 277,145 2,156,553 2,143,377 Utilities and other services 5,021,594 3,985,795 740,484 9,747,873 408,836 Insurance and contract support 697,853 21,520 107,210 826,583 10,111,236 Other expenses 1,383,342 473,775 222,505 2,079,622 2,072,021 Depreciation and amortization 6,058,079 203,535 1,206,880 7,468,494 4,017,534 Total operating expenses 25,218,430 8,572,163 5,871,285 39,661,878 26,441,880 Operating income(loss) 7,580,356 4,034,512 465,581 12,080,449 (2,390,181) Nonoperating revenues(expenses): Interest income 18,689 3,575 5,638 27,902 234,234 Gain/(loss)on sale/abandonment of capital assets (13,574) - 9,657 (3,917) 153,090 Interest expense and paying agent fees (5,300,054) - (5,300,054) (18,829) Bond issuance costs (160,881) - (160,881) Intergovernmental operating grants - - 3,787,014 3,787,014 - Total nonoperating revenues(expenses) (5,455,820) 3,575 3,802,309 (1,649,936) 368,495 Income(loss)before contributions and transfers 2,124,536 4,038,087 4,267,890 10,430,513 (2,021,686) Capital contributions 496,952 - 842,313 1,339,265 - Transfers in 407,552 - 6,836,549 7,244,101 2,580,147 Transfers out (1,918,609) (2,984,410) (1,154,689) (6,057,708) (312,000) Change in net position 1,110,431 1,053,677 10,792,063 12,956,171 246,461 Net position-beginning 140,593,863 7,920,284 48,630,845 24,627,825 Prior period adjustment (2,037,117) - - Net position-ending $139,667,177 $ 8,973,961 $59,422,908 $ 24,874,286 Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds 274,012 Change in net position of business type activities $ 13,230,183 See accompanying notes to the basic financial statements. 22 EXHIBIT A-9 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2013 Enterprise Funds Nonmajor Water and Enterprise Internal Sewer Sanitation Funds Total Service Funds Cash flows from operating activities: Received from customers and users $ 33,039,914 $ 12,510,288 $ 6,347,489 $ 51,897,691 $ 24,407,045 Payments to suppliers (11,942,777) (6,270,557) (3,201,740) (21,415,074) (19,897,440) Payments to employees (6,100,090) (2,320,873) (1,477,112) (9,898,075) (2,341,580) Net cash provided by operating activities 14,997,047 3,918,858 1,668,637 20,584,542 2,168,025 Cash flows from noncapital financing activities: Intergovernmental operating grants - - 3,707,239 3,707,239 68,244 Interfund loans received(repaid) - 848,085 848,085 (10,150) Transfers in from other funds 407,552 6,836,549 7,244,101 2,580,147 Transfers out to other funds (1,918,609) (2,984,410) (1,154,689) (6,057,708) (312,000) Net cash provided(used)by noncapital financing activities (1,511,057) (2,984,410) 10,237,184 5,741,717 2,326,241 Cash flows from capital and related financing activities: Capital contributions 842,313 842,313 - Acquisition and construction of capital assets (9,530,531) (435,686) (11,025,879) (20,992,096) (3,348,653) Proceeds from sale of capital assets 10,346 13,061 23,407 154,162 Proceeds from issuance of long-term debt 14,933,851 - 14,933,851 - Principal paid on long-term debt (8,264,666) (8,264,666) (428,365) Interest and fees paid on long-term debt (5,319,042) (5,319,042) (18,829) Bond issuance costs paid (160,881) (160,881) Net cash used for capital and related financing activities (8,330,923) (435,686) (10,170,505) (18,937,114) (3,641,685) Cash flows from investing activities: Interest on investments 18,689 3,575 5,638 27,902 234,234 Net cash provided by investing activities 18,689 3,575 5,638 27,902 234,234 Net Increase(Decrease)in Cash and Cash Equivalents 5,173,756 502,337 1,740,954 7,417,047 1,086,815 Cash and Cash Equivalents-Beginning 28,690,252 3,838,703 5,888,739 38,417,694 4,450,850 Cash and Cash Equivalents-Ending $ 33,864,008 $ 4,341,040 $ 7,629,693 $ 45,834,741 $ 5,537,665 Reconciliation of cash and cash equivalents on the balance sheet to the statement of cash flows: Cash and cash equivalents $ 6,607,399 $ 4,341,040 $ 6,761,103 $ 17,709,542 $ 3,123,248 Restricted assets-cash and cash equivalents 27,256,609 - 868,590 28,125,199 2,414,417 Total cash and cash equivalents at end of year $ 33,864,008 $ 4,341,040 $ 7,629,693 $ 45,834,741 $ 5,537,665 See accompanying notes to the basic financial statements. 23 EXHIBIT A-9 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2013 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) $ 7,580,356 $ 4,034,512 $ 465,581 $ 12,080,449 $ (2,390,181) Adjustments to reconcile operating income(loss) to net cash provided by operating activities: Depreciation and amortization 6,058,079 203,535 1,206,880 7,468,494 4,017,534 Customer deposits received 46,099 - - 46,099 - (Increase)decrease in current assets: Receivables: Customer and trade 160,104 (96,387) 7,345 71,062 Government agencies (15,935) - (15,935) - Other 50,860 3,278 54,138 324,106 Inventory 59,145 - 13,584 72,729 74,037 Prepaid items (5,000) (240) 6,860 1,620 (102) Increase(decrease)in current liabilities: Accounts payable-trade 2,116,163 (470,592) (3,297) 1,642,274 137,391 Accrued payroll 29,921 10,084 7,215 47,220 5,932 Accrued vacation and sick leave 12,140 2,744 1,360 16,244 33,962 Payable to other City funds (88,142) - - (88,142) - Estimated health claims payable - - (65,894) Payable to government agencies 2,345 (1,728) 617 - Otherliabilities (1,006,743) 727 (38,441) (1,044,457) 31,240 Estimated liability for landfill closure - 232,130 - 232,130 - Total adjustments 7,416,691 (115,654) 1,203,056 8,504,093 4,558,206 Net cash provided by operating activities $ 14,997,047 $ 3,918,858 $ 1,668,637 $ 20,584,542 $ 2,168,025 Noncash capital and financing activities: Capital assets received from developers $ 496,952 $ - $ - $ 496,952 $ - See accompanying notes to the basic financial statements. 24 EXHIBIT A-10 CITY OF WICHITA FALLS, TEXAS STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES SEPTEMBER 30, 2013 Agency Fund Assets Cash and cash equivalents $ 86,238 Liabilities Other liabilities $ 86,238 See accompanying notes to the basic financial statements. 25 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30,2013 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting and reporting policies of the City of Wichita Falls, Texas (City) conform to accounting principles generally accepted in the United States of America (GAAP) applicable to state and local governments. GAAP for local governments includes those principles prescribed by the Governmental Accounting Standards Board (GASB), which includes all statements and interpretations of the National Council on Governmental Accounting (NCGA) unless modified by the GASB, and those principles prescribed by the American Institute of Certified Public Accountants in the publication entitled Audits of State and Local Governmental Units. The following is a summary of the more significant policies and practices used by the City. A. Reporting Entity The City is a municipal corporation governed by an elected Mayor and six-member City Council. As required by Governmental Accounting Standards Board (GASB) Statement No. 61, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are in substance, part of the City's operations and data from these units are combined with data presented by the City. A discretely presented component unit, on the other hand, is reported in a separate column in the basic financial statements to emphasize it is legally separate from the City. Each blended and discretely presented component unit has a September 30th year end. Blended Component Unit Employee Benefit Trust Fund. On October 1, 1983, an "Agreement and Declaration of Trust" was made and entered into between the City and the Employee Benefit Trust Committee, acting as Trustee to administer the Employee Benefit Trust (Trust). The Trust Committee consists of four Trustees selected by the City, who may, but need not be, beneficiaries of the health and welfare program funded by the Trust, and/or officers or employees of the City. The purpose of the Trust is to provide health and welfare benefits, which may include life, accidental death and dismemberment, disability, medical and dental insurance, and any other benefits as determined by the Trustee Committee. The Trust is funded through contributions by the City and employees who choose to participate. It may be terminated in writing, at any time, by either party. The Employee Benefit Trust Fund is presented in the accompanying financial statements as an internal service fund. Discretely Presented Component Units The Wichita Falls Economic Development Corporation. The Wichita Falls Economic Development Corporation is a non-profit corporation formed in May 1997 for the purpose of increasing employment opportunities, primarily through assisting qualifying enterprises with funds provided by a portion of the local sales tax. Assistance may be in the form of incentive grants, loans or leases which call for discounted rates or rebates for job development. The Corporation operates under the authority of Vernon's Civil Statutes, Article 5190.6, Section 4A. Since the City Council appoints its Board of Directors, approves its budgets, and exercises final authority over its operations, the Wichita Falls Economic Development Corporation is considered to be part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The Wichita Falls Economic Development Corporation utilizes full accrual accounting. 26 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2013 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) The Wichita Falls 4B Sales Tax Corporation. The Wichita Falls 4B Sales Tax Corporation is a non-profit corporation formed in May 1997 for the purpose of increasing employment opportunities and for public improvement projects such as parks, auditoriums, learning centers, open space improvements, athletic and exhibition facilities, and the related maintenance and operating costs of such projects. The Corporation operates under the authority of Vernon's Civil Statutes, Article 5190.6, Section 4B. Since the City Council appoints its Board of Directors, approves its budgets, and exercises final authority over its operations, the Wichita Falls 413 Sales Tax Corporation is considered to be part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The Wichita Falls 4B Sales Tax Corporation utilizes full accrual accounting. Wichita Falls Reinvestment Zone #2. On August 16, 2005, the City of Wichita Falls, Texas, with the advice and consent of the Wichita Falls Independent School District and Wichita County, approved the creation of the Wichita Falls Reinvestment Zone#2 (Zone). This Zone is permitted by Article 1066e of the State of Texas Tax Increment Financing Act passed in 1981. The area of the Zone is approximately 236 acres and includes the Lawrence Road area of the City. The purpose of the Zone is to capture increments of growth in real property values in the Zone from base values established on January 1, 2004, and use the ad valorem taxes derived from these increments to contribute to the zoned area. Tax funds derived from the increment can only be spent for public improvements in the Zone or for the payment of debt service on bonds issued to provide funds for public improvements. The Zone terminates on December 31, 2025, or when all debt has been paid if later. After all costs have been paid at the end of the tax increment financing period, any money remaining is to be remitted to the taxing entities. Since the City Council appoints a majority of its Board, approves its budget, and exercises final authority over its operations, the Wichita Falls Reinvestment Zone #2 is considered to be part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The Zone utilizes full accrual accounting. Wichita Falls Reinvestment Zone #3. On September 1, 2009, the City of Wichita Falls, Texas, with the advice and consent of the Wichita Falls Independent School District and Wichita County, approved the creation of the Wichita Falls Reinvestment Zone#3 (Zone). This Zone is permitted by Article 1066e of the State of Texas Tax Increment Financing Act passed in 1981. The area of the Zone is approximately 630 acres and includes a significant portion of the Eastside Neighborhood. The purpose of the Zone is to capture increments of growth in real property values in the Zone from base values established on January 1, 2009, and use the ad valorem taxes derived from these increments to contribute to the zoned area. Tax funds derived from the increment can only be spent for public improvements in the Zone or for the payment of debt service on bonds issued to provide funds for public improvements. The Zone terminates on December 31, 2029. After all costs have been paid at the end of the tax increment financing period, any money remaining is to be remitted to the taxing entities. Since the City Council appoints a majority of its Board, approves its budget, and exercises final authority over its operations, the Wichita Falls Reinvestment Zone #3 is considered to be part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The Zone utilizes full accrual accounting. 27 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2013 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) No separate audited financial statements are available for the City's blended and discretely presented component units. Complete financial statements for the individual component units may be obtained from the City's Assistant City Manager/CFO at 1300 7th Street, Wichita Falls, Texas. Excluded From the Reporting Entity Wichita Falls Firemen's Relief and Retirement Fund. The Wichita Falls Firemen's Relief and Retirement Fund was established and is controlled through various State of Texas legislative enactments. This Fund is administered locally by a seven-member board, independent of the City Council. City management and the City Council do not influence or control the administrative and financial affairs of the Fund, and the assets of the Fund are not the property of the City. The seven-member Board of Trustees, composed of the Mayor, the Finance Manager from the City's Finance Department, three firefighters elected by a majority vote of the firefighters and two citizens, who are not employees or officers of the City and are chosen by the unanimous vote of the first five Trustees, are subject to the administrative supervision of and report to the State Firemen's Pension Board. The activities of the Firemen's Relief and Retirement Fund, in the City's judgment, are not a part of the City and thus are excluded from the accompanying financial statements. B. Basis of Presentation Government-wide financial statements The basic financial statements include both government-wide (based on the City as a whole) and fund financial statements. The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all non-fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. However, interfund services provided and used are not eliminated in the process of consolidation. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The government-wide statement of activities demonstrates the degree to which the direct expenses of a functional category (police, public works, etc.) or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, 2) grants and contributions that are restricted to meeting operational requirements of a particular function or segment, and 3) grants and contributions that are restricted to meeting the capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported instead as general revenues. 28 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2013 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) Fund financial statements Separate fund-based financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major enterprise funds are reported as separate columns in the fund financial statements. GASB Statement No. 34 sets forth minimum criteria (percentage of assets, liabilities, revenues or expenditures/expenses of either fund category for governmental and enterprise) for the determination of major funds. The major governmental fund is the General Fund. The major enterprise funds are the Water and Sewer Fund and the Sanitation Fund. Non-major funds are combined in a column in the fund financial statements. Non-major funds are detailed in the combining section of the statements. Internal service funds, which traditionally provide services primarily to other funds of the government, are presented in the summary form as part of the proprietary fund financial statements. Because the principal users of internal services are the City's governmental and business-type activities, financial statements of internal service funds are allocated (based on the percentage of goods or services provided) between the governmental and business-type activities when presented at the government-wide level. The government-wide focus is more on the sustainability of the City as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. The focus of the fund financial statements is on the major individual funds of the governmental and business-type categories. Each presentation provides valuable information that can be analyzed and compared to enhance the usefulness of the information. C. Measurement focus, basis of accounting and financial statement presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year in which they are levied. Grants and similar items are recognized as soon as all eligibility requirements imposed by the provider have been met. Government fund-level financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property tax, franchise fees, and sales tax associated with the current fiscal period are all susceptible to accrual and have been recognized as revenues of the current fiscal period. All of the revenue items are considered to be measurable and available only when cash is received. 29 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2013 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) The City reports the following major governmental fund: The General Fund is the City's primary operating fund. All general tax revenues and other receipts that are not allocated by law or contractual agreement to some other fund are accounted for in this fund. From the fund are paid general operating costs, fixed charges, and capital improvement costs that are not paid through other funds. Other governmental funds are a summarization of all the non-major governmental funds. The City reports the following major proprietary funds: The Water and Sewer Fund accounts for the water and sewer utility services provided to residents of the City. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations, maintenance, finance and related debt service. The Sanitation Fund accounts for refuse collection services to the residents of the City as well as the operations of the City's landfill. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations and maintenance. Other enterprise funds are a summarization of all of the non-major proprietary funds. The City additionally reports the following fund types: Internal service funds are used to account for the financing of materials and services provided by one department of the City to other departments of the City on a cost-reimbursement basis. The City uses internal service funds to report the activities of fleet maintenance, duplicating services, employee health and life insurance, and information technology. An agency fund is used to account for any unclaimed vendor or payroll checks that will be escheated to the State if they remain unclaimed. These funds are held on a purely custodial basis. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expense generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's water and sewer, sanitation, transit, and airport funds are charges to customers for services. Operating expenses for the enterprise funds and internal service funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues not meeting this definition are reported as nonoperating revenues and expenses. 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. 30 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2013 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) Capital improvement assessments are recorded as revenues in the fiscal period when the assessment becomes both measurable and available to finance expenditures of the fiscal period. Assessment revenues are considered measurable and available when collected by the City and recognized as revenue at that time. Payments for capital improvement assessments received in advance of the levy are reflected as deferred revenue. D. Nonexchange Transactions In a nonexchange transaction, a government gives (or receives)value without directly receiving (or giving) equal value in return. The statement defines when the City should recognize revenue or expense for nonexchange transactions involving financial or capital resources and how to account for timing and purpose restrictions. The timing of recognition depends on whether a nonexchange transaction is (a) a derived tax revenue (b) an imposed nonexchange revenue transaction or (c) a government-mandated or voluntary nonexchange transaction. Under this standard, revenue transactions with purpose restrictions are recorded as restricted resources until the purpose restrictions are met. Nonexchange transactions include the following classifications: • Derived tax revenues result from assessments imposed by government on exchange transactions. • Imposed nonexchange revenues result from assessments by governments on nongovernmental entities, other than assessments on exchange transactions. • Government-mandated nonexchange transactions occur when a government at one level provides resources to a government at another level and require that government to use them for a specific purpose or purposes established in the provider's enabling legislation. • Voluntary nonexchange transactions result from legislative or contractual agreements, other than exchanges, entered into willingly by two or more parties. Examples of the City's voluntary nonexchange transactions include capital grants, state shared revenue and private donations. Providers of government-mandated nonexchange transactions and voluntary nonexchange transactions should recognize liabilities and expenses/expenditures and recipients should recognize receivables (or decrease in liabilities) and revenue when all applicable eligibility requirements, including time requirements are met. All nonexchange transactions occurring in governmental fund types are also subject to the modified accrual revenue recognition criteria. Accordingly, assets and revenue should not be recognized unless measurable and available. 31 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2013 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) E. Assets, liabilities and net position or fund balances 1. Cash, cash equivalents and investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments are carried at fair value. Fair value is determined as the price at which two willing parties would complete an exchange. Interest earned on investments is recorded in the funds in which the investments are recorded. 2. Inventory and Prepaid Items Inventories of the general and proprietary funds consist of supplies and various materials used for the maintenance of capital assets. The consumption method is used to account for these inventories. Under this method, inventory acquisitions are recorded in inventory accounts initially and charged as expenditures when used. Inventories are stated at average cost. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. 3. Capital Assets Capital assets, which include property, plant and equipment, and infrastructure assets (e.g. roads, bridges, sidewalks and similar items), are reported in the applicable governmental or business-like activities columns in the government-wide financial statements. The City defines capital assets as assets with an initial, individual cost of more than $1,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the time received. Capital assets are depreciated using the straight line method over the following useful lives: Assets Years Buildings, systems and improvements 20-59 years Infrastructure 8-100 years Machinery, vehicles and other equipment 3 -25 years Furniture and equipment 3- 10 years For business-type activities' capital assets, interest is capitalized on construction costs incurred during the year at an average interest rate on borrowed funds (revenue bonds) in accordance with generally accepted accounting principles. 32 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2013 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) For the fiscal year ended September 30, 2013, the City's business-type activities incurred a total of $5,318,883 of interest costs. This entire amount was charged to expense as there was no capitalized interest in the current year. Contributions of funds from federal, state, or local grants restricted for the purpose of purchasing plant and equipment are recorded as revenue when received. The cost of water and sewer lines installed by developers is valued by the contractor and recorded as nonoperating revenue in the Water and Sewer Fund. 4. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. For the year ended September 30, 2013, the City has only one item that qualifies for reporting in this category: deferred losses on bond refunding. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflow of resources. This separate financial statement element represents an acquisition of net position that applies to a future period(s)and so will not be recognized as an inflow of resources (revenue) until that time. The City has only two types of item that qualifies for reporting in this category. Property taxes receivable ($799,104) and municipal court fines receivable ($562,782) are unavailable and therefore cannot be recognized as revenue in the governmental funds until they are received. 5. Long-Term Obligations Long-term debt and other obligations for general government purposes are recorded in the government-wide statement of net assets. Long-term debt and other obligations financed by proprietary funds are reported as liabilities in the appropriate funds. For the government-wide financial statements and proprietary fund types, bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method in the government-wide financial statements. Bonds payable are reported net of the applicable bond premium or discount. Issuance costs are reported as deferred bond issue costs and amortized over the term of the related debt. In addition, gains or losses on proprietary fund bond refunding are amortized over the term of the lesser of the new bonds or the refunded bonds' life using the effective interest method. In the governmental fund financials, bond proceeds are reported as another financing source. Bond premiums and discounts in governmental funds are also recognized currently as other financing sources or uses. Issuance costs, even if withheld from the actual net proceeds received, are reported as debt service expenditures. 33 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2013 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) 6. Fund Balances—Governmental Funds Fund balances of the governmental funds are classified as follows: Nonspendable Fund Balance — represents amounts that cannot be spent because they are either not in spendable form (such as inventory or prepaid insurance) or legally required to remain intact(such as notes receivable or principal of a permanent fund). Restricted Fund Balance — represents amounts that are constrained by external parties, constitutional provisions or enabling legislation. Committed Fund Balance — represents amounts that can only be used for a specific purpose because of a formal action by the City Council. Committed amounts cannot be used for any other purpose unless the governing board removes those constraints by taking the same type of formal action. Committed fund balance amounts may be used for other purposes with appropriate due process by the governing board. Commitments are typically done through adoption and amendment of the budget. Committed fund balance amounts differ from restricted balances in that the constraints on their use do not come from outside parties, constitutional provisions, or enabling legislation. Assigned Fund Balance — represents amounts which the City intends to use for a specific purpose, but that do not meet the criteria to be classified as restricted or committed. Intent may be stipulated by the governing board or by an official or body to which the governing board delegates the authority. Specific amounts that are not restricted or committed in a special revenue, capital projects, debt service or permanent fund are assigned for purposes in accordance with the nature of their fund type or the fund's primary purpose. Assignments within the General Fund convey that the intended use of those amounts is for a specific purpose that is narrower than the general purposes of the City itself. Unassigned Fund Balance — represents amounts which are unconstrained in that they may be spent for any purpose. Only the General Fund reports a positive unassigned fund balance. Other governmental funds might report a negative balance in this classification because of overspending for specific purposes for which amounts had been restricted, committed or assigned. When an expenditure is incurred for a purpose for which both restricted and unrestricted fund balance is available, the City considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds. 7. Federal and State Grants Grants and shared revenues are generally accounted for within the appropriate fund of the City to be financed by such grants or shared revenues. Federal grants include Community Development Block Grant, Section 8 Housing Assistance, Home Investment Partnership Agreement Program, and numerous health-related grants. 34 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2013 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) Each Federal grant is accounted for in a separate special revenue fund. State grant revenues received for purposes normally financed through the general government are accounted for within the General Fund. 8. Transactions Between Funds Outstanding balances between funds are reported as "due to/from other City funds." Any residual balances between governmental activities and business-type activities are reported in the government-wide statements as "internal balances." Nonrecurring or non-routine transfers of equity between funds are accounted for as transfers. 9. Vacation and Sick Leave All full-time employees accumulate vacation benefits based on length of service up to 15 days per year. The maximum allowable accumulation is 30 days. Upon leaving the employment of the City, employees will be paid for unused vacation days which they have accrued. Sick leave is earned at the rate of 4.62 hours per pay period up to a maximum of ninety days. Additionally, police officers and firefighters may accumulate an unlimited number of sick leave days while employed with the City. Upon termination, police officers and firefighters are compensated for up to 720 hours and 1,080 hours, respectively. 10. Risk Management The government is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the government carries commercial insurance. For insured programs, there have been no significant reductions in insurance coverage. Settlement amounts have not exceeded insurance coverage for the current year or the three prior years. The City maintains a group health insurance plan for employees and dependents which is partially self-insured by the City. A group life insurance plan is maintained through an insurance company. Contributions to the plans are provided for by both the City and participating employees. These contributions are recognized as revenues in the internal service fund used to account for these plans. The contributions made by the City are recorded as expenditures or expenses of the various funds as appropriate. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of $500,000. Liabilities include an amount for claims that have been incurred but not reported. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of pay-outs and other economic and social factors. 35 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2013 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) The City is also self-insured up to $250,000 for workers' compensation claims. Such claims are processed by a third party administrator. The City's estimated liability for workers' compensation claims payable at September 30, 2013 is based on management's estimate of probable losses in the amount of $138,580. The payment dates of such claims cannot be precisely determined, but are expected to be paid on a periodic basis over the next few years. Accordingly, the long-term liability has been recorded in the government-wide financial statements. $82,888 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, 2011 to September 30, 2013: Health Workers' Care Compensation Liability balance, September 30, 2011 $ 744,982 $ 163,899 Incurred claims/adjustments 8,397,787 401,867 Claim payments ( 8,548,478) ( 407,923) Liability balance, September 30, 2012 594,291 157,843 Incurred claims/adjustments 9,288,892 850,639 Claim payments ( 9,354,786) ( 869,902) Liability balance, September 30, 2013 $ 528, 997 $ 138,580 Note 2 - COMPLIANCE AND ACCOUNTABILITY Finance-Related Legal and Contractual Provisions The City had no violations of finance-related legal and contractual provisions for the year ended September 30, 2013. Deficit Fund Balances—Individual Funds The Airport Improvement Grant Fund, a nonmajor special revenue fund, had a deficit fund balance of $269,288 as of September 30, 2013. This deficit occurred because the City only requests grant funds as disbursements are made. At September 30, 2013, the Airport Improvement Grant Fund reported $333,467 in Retainages Payable to contractors. This deficit will be alleviated within a year. Note 3 - DEPOSITS AND INVESTMENTS Deposits All of the City's demand and time depository accounts are held in local banking institutions under the terms of written depository contracts. At September 30, 2013, the total amount of the City's demand and time deposits per the general ledger was $819,128, and the total amount per the City's September 30, 2013 bank statements was $1,095,745. The entire amount of the year-end bank statement balances was covered by federal depository insurance or by collateral held by the City's agent in the City's name. 36 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2013 Note 3 - DEPOSITS AND INVESTMENTS (CONTD.) Investments The investment policies of the City and its discretely presented component units are governed by The Public Funds Investment Act. Authorized investments include obligations of the U.S. Treasury, agencies and instrumentalities, obligations of the State of Texas and related agencies, obligations of states, agencies, counties, cities and political subdivisions of any state rated A or above by a nationally recognized investment rating firm, repurchase agreements, public funds investment pools, and commercial paper. The investments of the City and its discretely presented component units at September 30, 2013 are as follows: Fair Value/ Average Weighted Average Carrying Credit Quality/ Months to Types of Investments Amount Cost Ratings Maturity Primary Government: TexPool $ 57,539,442 $ 57,539,442 Not rated 1.00 LOGIC 23,101,156 23,101,156 Not rated 1.00 Municipal bonds 725,000 725,000 Aa2 7.60 Money market account 11,965,939 11,965,939 Not rated 1.00 Total primary government investments 93,331,537 93,331,537 Component Units: TexPool 19,941,619 19,941,619 Not rated 1.00 Total component unit investments 19,941,619 19,941,619 Total investments $113,273,156 $113,273,156 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. TexPool is not registered with the Securities and Exchange Commission (SEC) as an investment company. TexPool is operated in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. Therefore, the fair value of the City's position in TexPool is the same as the value of the pool shares. LOGIC was also established pursuant to the Interlocal Cooperation Act passed by the State of Texas and is administered by Southwest Securities Group, Inc. LOGIC's governing body is a five- member board of directors comprised of three government officials and two other persons with expertise in public finance. LOGIC's investments are only those authorized by the Texas Public Funds Investment Act governing pools for local governments. LOGIC presently offers two investment pools, each of which is separately managed and has a different investment objective. 37 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30,2013 Note 3 - DEPOSITS AND INVESTMENTS (CONTD.) Each participating government owns an undivided beneficial interest in the assets of the pool represented by units. Participants may terminate their participation in LOGIC at any time by redeeming their units. LOGIC is not registered with the Securities and Exchange Commission (SEC) as an investment company. LOGIC is operated in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. Therefore, the fair value of the City's position in LOGIC is the same as the value of the pool shares. GASB Statement No. 40 requires a determination as to whether the City was exposed to the following specific investment risks at year end and if so, the reporting of certain related disclosures: a. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The ratings of securities by nationally recognized rating agencies are designed to give an indication of credit risk. At year end, the City was not exposed to credit risk. b. Custodial Credit Risk Deposits are exposed to custodial credit risk if they are not covered by depository insurance and the deposits are uncol lateral ized, collateralized with securities held by the pledging financial institution, or collateralized with securities held by the pledging financial institution's trust department or agent but not in the City's name. Investment securities are exposed to custodial risk if the securities are uninsured, are not registered in the name of the government, and are held by either the counterparty or the counterparty's trust department or agent but not in the City's name. At year end, the City was not exposed to custodial credit risk. c. Concentration of Credit Risk This risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. At year end, the City was not exposed to concentration of credit risk. d. Interest Rate Risk This is the risk that changes in interest rates will adversely affect the fair value of an investment. In accordance with its investment policy, the City manages its exposure to interest rate risk by allowing no more than 20% of the City's portfolio to be invested for a period greater than one year. e. Foreign Currency Risk This is the risk that exchange rates will adversely affect the fair value of an investment. At year end, the City was not exposed to foreign currency risk. 38 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2013 Note 4- RECEIVABLES Receivables at September 30, 2013 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 $ 1,262,964 $ 214,440 $ - $ - $ - $ $ 1,477,404 $ $ 1,477,404 Customer and trade - - 5,647,721 1,948,436 349,995 7,946,152 7,946,152 Other City funds 4,574,630 - - - - 4,574,630 4,574,630 Government agencies 3,977,688 2,987,539 67,354 780,066 7,812,647 1,317,228 9,129,875 Other 1,314,939 90,839 1,670 54,025 36,819 1,498,292 1,498,292 Gross receivables 11,130,221 3,292,818 5,716,745 1,948,436 1,184,086 36,819 23,309,125 1,317,228 24,626,353 Less: Allowance for uncollectible accounts ( 524,306) ( 25,677) ( 1,474,066) ( 527,196) ( 85,659) - ( 2,636,904) - ( 2,636,904) Net total receivables $10,605,915 &1�267,141 R4.24�,679 $1.421240 $1 098,427 $36,819 520,672,221 $1 317,228 V-1,989,449 There are no net 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 $1,477,404 total delinquent property taxes. This amount is similar to the amounts collected in previous years. CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 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, 2013 was $.63526 per $100 which means that the City has a tax margin of $1.61474 per $100, and could raise up to $72,093,645 additional tax revenue a year from the present assessed valuation of$4,464,721,591 before the limit is reached. Note 6 - RESTRICTED ASSETS Restricted assets in the Water and Sewer Fund, Municipal Airport Fund, and Internal Service Funds, are held for specific purposes in accordance with bond ordinances or other legal restrictions. Water and Sewer restricted assets are comprised of the following: For Debt Service: Cash and cash equivalents $11,881,663 For Capital Improvements: Cash and cash equivalents 15,374,946 Total $27 256 009 Municipal Airport restricted assets are comprised of the following: For Passenger Facility Charges: Cash and cash equivalents $491,949 For Customer Facility Charges: Cash and cash equivalents 376,641 Total 868 590 Internal Service Fund restricted assets are comprised of the following: For Employee Insurance: Cash and cash equivalents $2 414 417 40 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 7 - CAPITAL ASSETS Capital asset activity for the year ended September 30, 2013 was as follows: Balance Balance Governmental activities: October 1, September 30, 2012 Increases Decreases 2013 Capital assets not being depreciated: Land $ 10,614,124 $ 107,771 $ - $ 10,721,895 Construction in progress 1,695,575 - 1,489,875 205,700 Total capital assets not being depreciated 12,309,699 107,771 1,489,875 10,927,595 Capital assets being depreciated: Land betterments 23,478,232 60,597 97,020 23,441,809 Buildings,systems and improvements 68,727,942 4,786,251 - 73,514,193 Infrastructure 164,601,119 4,247,810 1,192,381 167,656,548 Machinery and equipment 22,138,305 1,139,221 119,756 23,157,770 Furniture and fixtures 173,489 173,489 Total capital assets being depreciated 279,119,087 10,233,879 1,312,137 287,943,809 Less accumulated depreciation for: Land betterments 4,754,024 494,765 - 5,248,789 Buildings,systems and improvements 18,034,791 1,549,062 - 19,583,853 Infrastructure 85,790,379 2,406,404 1,083,299 87,113,484 Machinery and equipment 10,007,671 1,756,429 106,593 11,657,507 Furniture and fixtures 169,568 1,372 170,939 Total accumulated depreciation 118,756,433 6,208,032 1,189,892 123,774,572 Total capital assets being depreciated, net 160,362,654 4,025,847 122,245 164,169,237 Governmental activities capital assets, net $172 672,$53 $ 4,133,618 $1,612 120 $175 096 832 41 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 7 - CAPITAL ASSETS (CONTD.) Balance Balance Business-type activities: October 1, September 30, 2012 Increases Decreases 2013 Capital assets not being depreciated: Land $ 9,003,505 $ 38,694 $ - $ 9,042,199 Construction in progress 56,230,140 16,885,387 54,731,365 18,384,162 Total capital assets not being depreciated 65,233,645 16,924,081 54,731,365 27,426,361 Capital assets being depreciated: Land betterments 38,505,448 5,698,438 785,337 43,418,549 Buildings,systems and improvements 286,429,168 53,382,106 379,000 339,432,274 Machinery and equipment 7,834,118 632,625 2,467 8,464,273 Furniture and fixtures 40,819 - - 40,819 Motor vehicles 51,547,946 2,517,375 2,666,831 51,398,490 Total capital assets being depreciated 384,357,499 62,230,544 3,833,635 442,754,405 Less accumulated depreciation for: Land betterments 13,762,599 964,145 781,933 13,944,811 Buildings,systems and improvements 94,678,732 6,303,522 355,304 100,626,948 Machinery and equipment 5,298,712 397,397 2,470 5,693,639 Furniture and fixtures 40,819 - - 40,819 Motor vehicles 33,452,534 3,705,592 2,665,759 34,492,365 Total accumulated depreciation 147,233,396 11,370,656 3,805,466 154,798,582 Total capital assets being depreciated, net 237,124,103 50,859,888 28,169 287,955,823 Business-type activities capital assets, net $302 357 748 $ 7 7 3%9 $54 759 534 s315 382 184 Depreciation expense was charged to functions as follows: Governmental activities: Administrative services $ 738,894 Police 1,405,070 Fire 150,236 Parks and recreation 244,524 Accounting/finance 117,919 Community development 9,494 Public works 2,168,955 Health 155,993 Traffic and transportation 310,610 Multi-Purpose Events Center 906,337 Total governmental depreciation S6 208 332 42 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 7 - CAPITAL ASSETS (CONTD.) Business-type activities: Municipal Airport $ 364,848 Kickapoo Airport 425,275 Transit 451,606 Sanitation 2,830,834 Water and sewer 6,897,242 Stormwater drainage 213,875 Waterpark 186,976 Total business-type depreciation $11,370 656 Note 8 - PENSION PLANS Texas Municipal Retirement System Plan Description The City provides pension benefits for all of its eligible employees, except firefighters, through a nontraditional, joint contributory, hybrid defined benefit plan in the state-wide Texas Municipal Retirement System (TMRS), an agent multiple-employer public employee retirement system. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. TMRS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information (RSI) for TMRS; the report also provides detailed explanations of the contributions, benefits and actuarial methods and assumptions used by the System. This report may be obtained by writing TMRS, P.O. Box 149153, Austin, TX 78714-9153 or by calling 800-924-8677; in addition, the report is available on TMRS' website at www.TMRS.com. Plan provisions for the City were as follows: Plan Year 2012 Plan Year 2013 Employee deposit rate 5%/7% 5%/7% Matching ratio(City to employee) 2 to 1 2 to 1 Years required for vesting 10 10 Service retirement eligibility (expressed as age/years of service) 60/10, 0/25 60/10, 0/25 Updated Service Credit 50% Repeating,Transfers 50% Repeating,Transfers Annuity Increase(to retirees) 70% of CPI Repeating 70%of CPI Repeating 43 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 8 - PENSION PLANS (CONTD.) Contributions Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Projected Unit Credit actuarial cost method. This rate consists of the normal cost contribution rate and the prior service cost contribution rate, which is calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the portion of an active member's projected benefit allocated annually; the prior service contribution rate amortizes the unfunded (overfunded) actuarial liability (asset) over the applicable period for that city. Both the normal cost and prior service contribution rates include recognition of the projected impact of annually repeating benefits, such as Updated Service Credits and Annuity Increases. The City contributes to the TMRS Plan at an actuarially determined rate. Both the employees and the City make contributions monthly. Since the City needs to know its contribution rate in advance for budgetary purposes, there is a one-year delay between the actuarial valuation that serves as the basis for the rate and the calendar year when the rate goes into effect. Wichita Falls Firemen's Relief and Retirement Fund Plan Description The City provides pension benefits for all of its firefighters through a single employer defined benefit pension plan. The Wichita Falls Firemen's Relief and Retirement Fund (Fund) operates under an act passed in 1937 by the Texas State Legislature and adopted by the City's firefighters. Benefits are determined on a "formula" or a "final salary" plan. A firefighter who qualifies for a retirement benefit will receive monthly retirement equal to 2.55% of the firefighter's average salary, multiplied by the member's years of credited service. Benefits are calculated based upon a member's average salary for the 78 consecutive biweekly pay periods which produce the highest average. Members can receive a service retirement at ages 50 and above with 20 or more years of service. Members are eligible for actuarially reduced early retirement benefits before age 50, provided the employee has accrued at least 20 years of service. The plan also provides death and disability benefits. Members who terminate their service and are nonvested are entitled to the excess of the member's contributions over any benefits previously received. Contributions The contribution rate for the firefighters is 12% and the City contributes 13.08%. Both the firefighters and City make contributions bi-weekly. Contribution requirements are not actuarially determined, however, state law requires that each plan of benefits adopted by the Fund must be approved by a qualified actuary. The actuary certifies that the contribution commitments by the firefighters and the City provide an adequate financing arrangement. Using the individual entry age normal cost method, the plan's normal cost is determined as a percentage of payroll. 44 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 8 - PENSION PLANS (CONTD.) The actuarial assumptions included (a) 8% investment rate of return, compounded annually (net of trust expenses), (b) projected salary increases for individual members of 4.75% per year, compounded annually, and (c) increases in total payroll of 4.75% per year, compounded annually. Active members are assumed to retire once they have both attained age 57 and completed at least 20 years of service. Benefits for vested terminated members are assumed to start on the date the member attains age 50 or, if later, the date the member would have completed 20 years of service. The actuarial value of assets was determined using a method that is market related and is consistent with the classes of current and anticipated assets. The method is consistent with the assumptions used to develop the actuarial present value of total projected benefits, and actuarial standards for valuation. Schedule of Actuarial Liabilities and Fundinq Progress Texas Municipal Firemen's Retirement Relief and System Retirement Total Actuarial Valuation Date 12/31/12 12/31/12 Actuarial Value of Assets $172,839,281 $41,964,674 $214,803,955 Actuarial Accrued Liability(AAL) 206,427,900 66,606,163 273,034,063 Percentage Funded 83.7% 63.0% 78.7% Unfunded Actuarial Accrued Liability(UAAL) 33,588,619 24,641,489 58,230,108 Annual Covered Payroll 39,529,771 8,962,581 48,492,352 UAAL as a Percentage of Covered Payroll 85.0% 223.3% 120.1% Net Pension Obligation (NPO)at the Beginning of the Period -0- -0- -0- Annual Pension Cost: Annual Required Contribution (ARC) $ 5,291,494 $ 1,211,583 $ 6,503,077 Interest on NPO -0- -0- -0- Adjustment to the ARC -0- -0- -0- Annual Pension Cost $ 5,291,494 $ 1,211,583 6,503,077 45 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 8 - PENSION PLANS (CONTD.) Texas Municipal Firemen's Retirement Relief and System Retirement Total Percentage of Annual Pension Costs Contributed 100% 100% 100% Contributions Made $ 5,291,494 $ 1,211,583 $ 6,503,077 Increase in NPO -0- -0- -0- NPO At the End of the Period -0- -0- -0- Two preceding years: 2012: Annual Pension Cost $ 5,218,722 $ 1,174,529 $ 6,393,251 Percentage of Annual Pension Costs Contributed 100% 100% 100% NPO At the End of the Period -0- -0- -0- 2011: Annual Pension Cost $ 5,300,506 $ 1,136,628 $ 6,437,134 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 Projected Unit Credit Individual Entry Age Amortization Method Level Percent of Payroll Level Percent of Payroll Amortization Period Closed Open Remaining Amortization Period 25.0 Years N/A Amortization Period for New Gains/Losses 30 Years 30 Years Asset Valuation Method 10-Year Smoothed Market Smooth Market Value Investment Rate of Return 7.0% 8% Projected Salary Increases Varies by Age & Service 4.75% Includes Inflation at 3.0% 4.75% Cost-of-Living Adjustments 2.1% None The stand-alone financial reports for both the Texas Municipal Retirement System and Firemen's Relief and Retirement Fund can be obtained from the City's Assistant City Manager / CFO at 1300 7th Street, Wichita Falls, Texas. A schedule of funding progress is presented as required supplementary information for both the Texas Municipal Retirement System and the Firemen's Relief and Retirement Fund. These schedules provide multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. 46 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2013 Note 9 - POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS Plan Description The City administers the City of Wichita Falls Retiree Health Care Plan for all permanent employees who retire after satisfying eligibility retirement requirements through a single-employer defined benefit plan. All employees who retire and are actively in one of the City's health plans can continue to receive health care benefits under the City's plan for themselves and any dependents for as long as the retiree and/or dependents live. The plan does not issue a stand-alone financial report. Retiree Contributions Pre-Medicare Eligibility Retirees share in the cost of the Plan by paying premiums according to the following schedule: BC/BS BC/BS Core Plan Enhanced Plan Retiree Only(under 65) $171 $278 Retiree Only(over 65) N/A N/A Retiree/Spouse (both < 65) $321 $492 Retiree/Spouse (both > 65) N/A N/A Retiree/Spouse (1 >, 1 < 65) $583 $690 Retiree/Child $294 $465 Retiree/Family $364 $578 Dental premiums are included in the under 65 premiums above. Benefits for Spouses of Retired Employees Spouses of retirees are eligible to participate in a retiree health care program. Spouses are eligible to continue with same coverage after the death of retiree. Non-Medicare and Medicare-Eligible Provisions Medicare-eligible retirees and spouses on Medicare are eligible to participate in a Medicare supplement health care plan. Effective January 1, 2009, the following changes will be implemented to Medicare eligible retirees: For retirees already on Medicare as of January 1, 2009, the City will provide $250 in premium assistance towards the full premium for a Medicare subsidy program. The $250 is expected to be a fixed amount. Spouses currently covered in the health plan will also be eligible for the $250 premium assistance. For members retired as of January 1, 2009 but not yet Medicare-eligible, the City will provide $100 in premium assistance towards the full premium for a Medicare subsidy program. The $100 is expected to be a fixed amount. Spouses can participate in the Medicare subsidy program, but will receive no premium assistance. 47 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2013 Note 9 - POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (CONTD.) For members who retire on or after January 1, 2009, the City will provide no premium assistance once Medicare-eligible. The retiree premium for post-65 coverage is $421/month for each covered member as of June 1, 2010. Vision Coverage There is no vision coverage provided as of September 30, 2013. Dental Coverage Retirees and spouses prior to qualifying for Medicare are eligible to participate in the same dental care program as active employees. There is no dental coverage for retiree or spouses on the Medicare supplement. Life Insurance Coverage Life Insurance of $7,500 is provided to each retiree. There is no Life coverage for spouses of retirees. Funding Policy and Annual OPEB Cost The City's annual other post-employment benefits (OPEB) cost is based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The City's OPEB cost for the year ended September 30, 2013 is as follows: Annual Required Contribution $2,444,427 Interest on OPEB obligation - Adjustment to ARC - Annual OPEB cost (expense) end of year 2,444,427 Net estimated employer contributions ( 2,444,427) Increase (decrease) in net OPEB obligation Net OPEB obligation—beginning of year Net OPEB obligation—end of year $ - The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the fiscal year ending September 30, 2013 and the preceding two fiscal years were as follows: Employer Annual Amount Percentage Net OPEB Fiscal Year Ended OPEB Cost Contributed Contributed Obligation September 30, 2011 $2,437,686 $2,437,686 100.0% $ - September 30, 2012 2,373,230 2,373,230 100.0% - September 30, 2013 2,444,427 2,444,427 100.0% - 48 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 9 - POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS(CONTD.) Schedule of Actuarial Liabilities and Funding Status Actuarial Valuation Date 12/31/12 Actuarial Value of Assets $ 1,709,516 Actuarial Accrued Liabilities $32,117,774 Unfunded Actuarial Accrued Liability (UAAL) $30,408,258 Funded Ratio 5.32% Annual Covered Payroll $48,492,352 UAAL as a Percentage of Annual Covered Payroll 62.71% Actuarial Methods and Assumptions The Projected Unit Credit actuarial cost method is used to calculate the GASB ARC for the City's retiree health care plan. Using the plan benefits, the present health premiums and a set of actuarial assumptions, the anticipated future payments are projected. The projected unit credit method then provides for a systematic funding for these anticipated payments. The yearly ARC is computed to cover the cost of benefits being earned by covered members as well as to amortize a portion of the accrued liability. Projections of health benefits are based on the plan as understood by the City and include the types of benefits in force at the valuation date and the pattern of sharing benefit costs between Wichita Falls and its employees to that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Significant methods and assumptions were as follows: Inflation rate 3.00% per annum Investment rate of return 7.5%, net of expenses Actuarial cost method Individual entry-age actuarial cost method Amortization method Level as a percentage of employee payroll Amortization period Open 30 year period Salary growth 3.0% per annum Healthcare cost trend rate Initial rate of 7.50% declining to an ultimate rate of 4.50% after 8 years Actuarial valuations involve estimates of the value of reported amounts and assumptions about the profitability of events in the future. Amounts determined regarding the funded status and the annual required contributions of the City's retiree health care plan are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The required schedule of funding progress presented as required supplementary information provides multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. 49 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 10 - DEFERRED COMPENSATION PLAN The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to the employees until termination, retirement, death, or an unforeseen emergency. Note 11 - AIRPORT LEASE The Municipal Airport facilities are located on land at Sheppard Air Force Base. The land is leased from the Department of the Air Force for a period of fifty years, beginning May 15, 2009 and expiring May 14, 2059. The City's expense for the year ended September 30, 2013 was $36,279. The lease payment increases by 3% per year with a final lease payment of$141,307 in 2059. Note 12 - DESCRIPTION OF LEASING ARRANGEMENTS The majority of the City's operating leases contain an option for annual renewal at the end of the initial lease term. In most cases, these leases will be canceled or replaced by other leases. The City leases certain equipment under operating leases expiring at various times through the year ending September 30, 2013. 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, 2013: Year ending September 30: 2014 $ 166,740 2015 165,733 2016 153,187 2017 122,742 2018 101,440 2019-2023 242,146 2024-2028 266,614 2029-2033 309,079 2034-2038 358,307 2039-2043 415,376 2044-2048 481,535 2049-2053 558,231 2054-2058 647,142 2059 141,307 Total minimum payments required $4 129 579 The total rental expenses for all operating leases for the year ended September 30, 2013 was $167,861. There were no contingent rentals during the year ended September 30, 2013. 50 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 13 - LONG-TERM LIABILITIES Long-term liabilities transactions for the year ended September 30, 2013 are summarized as follows: Balance at Balance at October 1, Retired and September 30, Due Within 2012 Issued Transferred(1) 2013 One Year Governmental Activities: General obligation bonds $ 4,116,109 $ 1,810,000 $ 434,431 $ 5,491,678 $ 811,812 Combination tax and revenue bonds 35,503,123 19,971,293 3,903,793 51,570,623 2,598,120 Accrued vacation and sick leave payable 6,984,110 2,033,292 1,754,089 7,263,313 2,050,000 Capital lease payable 1,452,760 2,660,642 279,762 3,833,640 322,706 Claims and judgments payable 157,843 850,639 869,902 138,580 82,888 Total governmental activities 48,213,945 27,325,866 7,241,977 68,297,834 5,865,526 Business-type Activities: Utility system revenue bonds, net of premium(discount) 102,566,093 - 3,354,224 99,211,869 3,488,364 Combination tax and revenue bonds 19,798,342 13,000,000 4,910,443 27,887,899 3,602,911 General obligation bonds - 1,930,000 - 1,930,000 - Accrued vacation and sick leave payable 566,534 590,356 580,819 576,071 525,000 Note payable 543,877 - 34,281 509,596 35,397 Capital leases payable 1,704,341 3,851 446,529 1,261,663 262,042 Landfill closure,post-closure costs 3,818,193 232,130 - 4,050,323 - Total business-type activities 128,997,380 15,756,337 9,326,296 135,427,421 7,913,714 Total long-term liabilities $177,211,325 $43,082,203 $16568,273 $203,725,255 $13,779,240 (1) Includes bond premium amortization of $29,431 related to the general obligation bonds, $43,793 related to combination tax and revenue bonds (governmental activities), $29,224 related to revenue bonds, and $195,443 related to the combination tax and revenue bonds (business-type activities). For governmental activities, claims and judgments payable and compensated absences are generally liquidated by the General Fund. Bonds Payable Bonds payable at September 30, 2013, 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 9/30/13 General Obligation Bonds: General Obligation Refunding 1.50%- 9/01/21 $405,000 to $ 4,365,000 $ 3,545,000 Bonds,Series 2011 3.00% $485,000 Plus bond premium 136,678 General Obligation Refunding 1.50%- 9/01/18 $335,000 to $ 3,740,000 3,740,000 Bonds,Series 2013 3.00% $2,305,000 Total General Obligation Bonds 7,421,678 51 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 13 - LONG-TERM LIABILITIES (CONTD.) Range of Final Annual Bonds Interest Maturity Serial Bonds Outstanding Rates Date Payments Authorized at 9/30/13 Combination Tax and Revenue Bonds: Combination Tax and Revenue 4.90%- 8/01/16 $115,000 to 14,020,000 5,580,000 Refunding Bonds,Series 2005 5.00% $2,650,000 Plus bond premium 157,703 Combination Tax and Revenue 3.55%- 9/01/26 $580,000 to 16,875,000 12,325,000 Certificates of Obligation,Series 2006A 5.00% $1,225,000 Plus bond premium 222,982 Combination Tax and Revenue 5.20%- 9/01/26 $130,000 to 4,275,000 3,230,000 Certificates of Obligation,Series 2006B 6.25% $345,000 Plus bond premium 51,945 Combination Tax and Revenue 2.25%- 10/01/28 $340,000 to 10,820,000 9,235,000 Certificates of Obligation,Series 2009 4.75% $780,000 Combination Tax and Revenue 5.60% 2/01/25 $165,000 to 3,930,000 3,385,000 Certificates of Obligation,Series 2010 $375,000 Combination Tax and Revenue 2.00%- 8/01/18 $170,000 to 9,830,000 8,780,000 Refunding Bonds,Series 2010 4.00% $3,600,000 Plus bond premium 370,196 Combination Tax and Revenue 2.00%- 9/01/31 $135,000 to 3,200,000 3,065,000 Certificates of Obligation,Series 2011 4.00% $220,000 Plus bond premium 84,403 Combination Tax and Revenue 2.00%- 9/01/33 $530,000 to 19,875,000 19,875,000 Certificates of Obligation,Series 2013 3.375% $1,315,000 Plus bond premium 96,293 Combination Tax and Revenue 2.00%- 9/01/33 $505,000 to 13,000,000 13,000,000 Certificates of Obligation,Series 2013A 4.625% $905,000 Total Combination Tax and Revenue Bonds 79,458,522 Revenue Bonds: Water&Sewer System Priority 4.00%- 8/01/27 $225,000 to 103,495,000 98,965,000 Lien Refunding Revenue Bonds, 4.50% $11,070,000 Series 2007 Plus bond premium 246,869 Total Revenue Bonds 99,211,869 Total All Bonds S186,092,069 All of the General Obligation Bonds were issued on the full faith and credit of the City and are secured by ad valorem taxes levied against all taxable property. With the exception of a portion of the Series 2013 General Obligation Refunding Bonds, these bonds are serviced by the Debt Service Fund with an apportionment of the ad valorem tax levy. At September 30, 2013, $70,499 was available in this fund to service these bonds. 52 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 13 - LONG-TERM LIABILITIES (CONTD.) The Combination Tax and Revenue Bonds are secured by ad valorem taxes levied against all taxable property as well as a pledge of surplus net revenues of the City's combined waterworks and sewer system. The Series 2003, 2010 and 2011 Certificates will be serviced by the Debt Service Fund by contributions from the Wichita Falls 4B Economic Development Corporation. The Series 2004 and the Series 2005 Certificates will be serviced by the net revenues of the Water and Sewer Fund, as well as the Series 2010 Combination Tax and Revenue Refunding Certificates and a portion of the Series 2013 General Obligation Refunding Bonds. All of the Water and Sewer Revenue Bonds were issued for purposes of improving the City's water and sewer systems and are serviced by the net revenues of the Water and Sewer Fund. Notes Payable The City of Wichita Falls and Wichita County Water Improvement District Number 2, upon the completion of the Lake Kemp reconstruction project in January 1976 by the U.S. Government, are required to reimburse the U.S. Government 22.7% of its reported total cost of $8,774,705, or $1,991,858. The City's share of this amount is 66.11%, or$1,316,817, payable in forty-nine annual installments through January 2025 of$51,974, which includes interest at the rate of 3.253%. The City's share of the total costs ($5,800,957) as well as the U.S. Government funded portion ($4,484,140) is reflected as capital assets in the Water and Sewer Enterprise Fund. This contractual arrangement is strictly a cost-sharing agreement and is not considered a joint venture as defined in Section J50 of the Codification of Governmental Accounting and Financial Reporting Standards. The remaining debt payable to the U.S. Government at September 30, 2013 is classified as follows: Long-term $474,199 Current portion 35,397 Total 509 596 Capital Leases Payable The City issued a capital lease in 2012 for the purchase of fire department equipment in the amount of$1,466,854. The asset is listed under"Motor Vehicles" in the business-type activities. The lease carries an interest rate 1.57% and matures in 2016. This capital lease is recorded in the Fleet Maintenance Internal Service Fund and is included in the business-type activities of the government-wide statements. The City also entered into a capital lease agreement in 2012 to finance a portion of an energy efficiency project that includes several City facilities. The capital lease financed $4,419,310 of the total project. The assets are listed under "Buildings, systems and improvements" in both Governmental Activities and Business-type Activities. The lease carries an interest rate of 2.54% and is for a period of 12 years, with final payment due in fiscal year 2024. 53 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2013 Note 13 - LONG-TERM LIABILITIES(CONTD.) Aggregate maturities of the long-term debt(principal and interest)for the years subsequent to September 30, 2013 are as follows: Combination Tax and Year Ending General Obligation Bonds Revenue Bonds Revenue Bonds Notes Payable Capital Lease Payable Total September 30, Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 2014 $ 811,812 $126,113 $ 5,871,032 $ 2,353,146 $ 3,488,364 $ 4,357,561 $ 35,397 $ 16,577 $ 584,747 $121,201 $ 10,791,352 $ 6,974,598 2015 829,160 113,065 6,296,265 1,992,454 3,637,413 4,211,462 36,548 15,426 605,072 108,552 11,404,458 6,440,959 2016 2,752,122 101,103 4,592,940 1,938,500 3,791,420 4,059,030 37,737 14,237 633,556 95,418 11,807,775 6,208,288 2017 789,373 60,777 6,827,323 1,862,755 3,940,386 3,900,052 38,964 13,009 655,060 81,590 12,251,106 5,918,183 2018 801,559 44,841 7,018,114 1,669,116 4,114,310 3,734,740 40,232 11,742 316,513 67,248 12,290,728 5,527,687 2019-2023 1,437,652 57,847 18,815,681 6,207,223 44,596,753 14,096,247 221,664 38,205 1,858,862 205,771 66,930,612 20,605,293 2024-2028 - - 18,274,954 2,782,193 35,643,223 3,567,776 99,054 4,859 441,492 11,345 54,458,723 6,366,173 2029-2033 11,762,213 681,154 11,762,213 681,154 Totals $7 421,678 $503 746 $79,458,522 $19,486,541 $99,211,869 $37,926,868 $509 596 $114 055 $5 095,302 $691 125 $191,696,967 $58,722,335 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 14 - DEFEASED DEBT On March 15, 2013, the City issued general obligation refunding bonds of$3,740,000 (par value) with interest rates ranging from 1.50% to 3.00%. The debt was issued to refund combination tax and revenue certificates of obligation with rates ranging from 3.00% to 5.00% and a par value of $3,710,000. The combination tax and revenue certificates of obligation to be refunded matured through September 1, 2018. The proceeds of the new bonds, as well as an additional contribution by the City, were placed into 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, 2013, $1,910,000 of the Series 2005 Combination Tax and Revenue Refunding Bonds are considered defeased. As a result of the refunding, the City reduced its total debt service by $253,747, resulting in an economic gain (difference between the present value of the debt service payments on the old and new debt)of$249,541. 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$3,960,711 as of September 30, 2013, which is based on 19% usage of the landfill. The City will recognize the remaining estimated cost of closure and postclosure care of $17,120,495 as the remaining estimated capacity is filled. The landfill is expected to be filled to capacity in 2153. Additionally, the City has recorded a liability of $65,461 for closure and postclosure care costs related to the City's transfer station. Actual costs may be higher due to inflation, change in technology, or changes in regulations. Note 16 - INTERFUND BALANCES Due To Fund Due From Fund Amount Purpose General Fund Nonmajor Governmental Funds $3,533,218 Short-term loan General Fund Nonmajor Enterprise Funds 973,168 Short-term loan General Fund Internal Service Funds 68,244 Short-term loan Total $4.574,630 All amounts due are scheduled to be repaid within one year. 55 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 16 - INTERFUND BALANCES (CONTD.) Transfers to and from other funds during the year ended September 30, 2013 were as follows: Transfers From Transfers To Amount Reason General Fund Nonmajor Governmental Funds $ 769,440 Supplement operating deficits General Fund Nonmajor Enterprise Funds 380,613 Supplement operating grants General Fund Nonmajor Governmental Funds 132,729 Supplement operating grants General Fund Internal Service Fund 343,610 Purchase capital assets Nonmajor Governmental Funds Nonmajor Governmental Funds 280,000 Fund debt service payment Nonmajor Governmental Funds Nonmajor Governmental Funds 1,569,924 Fund operating deficits Nonmajor Governmental Funds Nonmajor Enterprise Funds 6,455,936 Purchase capital assets Nonmajor Governmental Funds Internal Service Funds 322,344 Purchase capital assets Nonmajor Governmental Funds Water and Sewer Fund 381,462 Fund construction projects Water and Sewer Fund General Fund 1,118,693 Administrative overhead Water and Sewer Fund Nonmajor Governmental Funds 500,000 Fund debt service payment Water and Sewer Fund Internal Service Funds 299,916 Purchase capital assets Sanitation Fund General Fund 1,553,723 Administrative overhead Sanitation Fund Internal Service Funds 1,430,687 Purchase capital assets Nonmajor Enterprise Funds Nonmajor Governmental Funds 494,826 Supplement operating grant Nonmajor Enterprise Funds Nonmajor Governmental Funds 450,183 Fund debt service payment Nonmajor Enterprise Funds Water and Sewer Fund 26,090 Fund construction project Nonmajor Enterprise Funds Internal Service Funds 183,590 Purchase capital assets Internal Service Funds General Fund 312,000 Administrative overhead Total $17 005 766 Note 17 - COMMITMENTS AND CONTINGENCIES Litigation The City is a defendant in numerous lawsuits. In the opinion of the City's management, any unrecorded liabilities resulting from such suits will not materially affect the financial position of the City. Accrued Vacation and Sick Leave The City's liability for accrued vacation and sick leave, excluding the amount recorded in the proprietary funds, was $7,263,313 at September 30, 2013. This accrual is recorded as a long- term liability in the Government-wide Statement of Net Position. Contract Commitment With West Texas Utilities Company In 1977, the City and Wichita County Water Improvement District Number 2 entered into a sixty- year contract with the West Texas Utilities Company (the Company) and agreed to provide an adequate water supply for the Company's use in generating power upon completion of the Company's construction of a power plant adjacent to the Lake Kemp-Lake Diversion System. The significant terms of the contract provide for standby charges to be paid to the City and the Wichita County Water Improvement District Number 2 in equal amounts. Minimum charges for the calendar year 1997 and all years thereafter until the end of contract will be $500,000 per year. 56 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 17 - COMMITMENTS AND CONTINGENCIES (CONTD.) 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, 2013 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. Contract Commitments At September 30, 2013, the City was committed to various contracts. The amounts for which the various funds are committed to complete these contracts are as follows: General Fund $ 652,259 Nonmajor Governmental Funds 5,407,140 Water and Sewer Fund 7,423,152 Sanitation Fund 32,737 Nonmajor Enterprise Funds 2,022,428 Internal Service Funds 969,991 Total contract commitments - City $16 507 707 Additionally, component units are committed to various contracts as of September 30, 2013. The remaining commitments are as follows: Wichita Falls Economic Development Corporation $ 2,211,951 Wichita Falls 4B Sales Tax Corporation $ 110,525 Federal and State Grants- Compliance Audits The City participates in numerous Federal and State grants, on both a direct and state pass- through basis, as well as on a service-provider basis. Principal among these are Community Development Block Grants, Section 8 Housing Assistance, Home Investment Partnership Agreement Program, and numerous health-related grants. In connection with these grants, the City is required to comply with specific terms and agreements as well as applicable Federal and State laws and regulations. Such compliance is subject to review and audit by the grantors and their representatives. In the opinion of management, the City has complied with all requirements. However, since such programs are subject to future audit or review, the possibility of disallowed expenditures exists. In the event of any disallowance of claimed expenditures, the City expects the resulting liability to be immaterial. 57 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 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, 2013 is as follows: Wichita Falls Wichita Falls Economic 4B Sales Wichita Falls Wichita Falls Development Tax Reinvestment Reinvestment Corporation Corporation Zone#2 Zone#3 Totals Condensed statement of net position: Cash,investments and other current assets $15,707,941 $2,280,007 $ - $171,688 $18,159,636 Capital assets,net of accumulated depreciation 2,283,410 - 2,283,410 Total assets 17,991,351 2,280,007 171,688 20,443,046 Accounts payable and other current liabilities 137,507 607 138,114 Total liabilities 137,507 607 138,114 Net position $17 853 844 $2 279 400 S 171 688 $20 304 932 Condensed statement of activities: Expenses: Community development $ 3,646,538 $4,234,205 $384,262 $ $ 8,265,005 Program revenues: Charges for services 106,800 - - 106,800 Operating grants and contributions - 368,617 368,617 Total program revenues 106,800 368,617 - 475,417 Net program expense ( 3,539,738) ( 3,865,588) ( 384,262) ( 7,789,588) General revenues: Tax revenues 3,677,061 3,677,061 384,033 58,877 7,797,032 Non-tax general revenues 49,906 3,807 229 116 54,058 Total general revenues 3,726,967 3,680,868 384,262 58,993 7,851,090 Change in net position 187,229 ( 184,720) - 58,993 61,502 Beginning net position 17,666,615 2,464,120 112,695 20,243,430 Ending net position $17 853 844 S 2 279 400 $171 688 S20 304 932 58 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30,2013 Note 19 - PRIOR PERIOD ADJUSTMENT During the year ended September 30, 2013, the City implemented GASB Statements No. 63 and 65. These pronouncements state that bond issuance costs are no longer to be capitalized and amortized, but rather expensed as incurred. Therefore, bond issuance costs capitalized in the Water and Sewer Fund and Business-type Activities in prior years were written off in the current year. These charges resulted in a decrease to beginning net position of$2,037,117. The effect on the prior year's change in net position would have been immaterial. 59 Required Supplementary Information EXHIBIT B-1 CITY OF WICHITA FALLS, TEXAS REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE- GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2013 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Taxes $ 55,972,210 $ 55,972,210 $ 56,183,817 $ 211,607 Charges for services 2,751,614 2,751,614 2,648,471 (103,143) Licenses and permits 1,984,072 1,984,072 2,234,081 250,009 Fines and forfeitures 2,034,000 2,034,000 2,116,103 82,103 Intergovernmental revenue 15,200 15,200 10,176 (5,024) Contributions 145,315 145,315 338,223 192,908 Miscellaneous revenue 963,246 963,246 1,063,332 100,086 Total revenues 63,865,657 63,865,657 64,594,203 728,546 Expenditures: Current: Administrative services 11,173,453 11,651,413 11,451,591 199,822 Police 21,240,044 20,935,423 20,520,034 415,389 Fire 13,448,367 13,591,034 13,572,017 19,017 Parks and recreation 5,227,926 5,146,050 4,912,277 233,773 Accounting/finance 807,950 818,665 793,960 24,705 Community development 1,922,128 1,946,353 1,848,692 97,661 Public works 5,218,847 5,193,696 5,192,943 753 Health 2,930,416 2,849,304 2,763,801 85,503 Traffic and transportation 1,918,207 2,021,426 1,997,362 24,064 Capital outlay 3,671,508 3,995,978 4,041,621 (45,643) Total expenditures 67,558,846 68,149,342 67,094,298 1,055,044 Excess of revenues over(under)expenditures (3,693,189) (4,283,685) (2,500,095) 1,783,590 Other financing sources (uses): Capital lease proceeds - - 777,681 777,681 Transfers in 2,984,416 2,984,416 2,984,416 - Transfers out (809,253) (1,409,704) (1,626,392) (216,688) Total other financing sources(uses) 2,175,163 1,574,712 2,135,705 560,993 Excess of revenues and other sources over(under)expenditures and other uses (1,518,026) (2,708,973) (364,390) 2,344,583 Fund balance-beginning 17,934,485 17,934,485 17,934,485 - Fund balance-ending $ 16,416,459 $ 15,225,512 $ 17,570,095 $ 2,344,583 60 CITY OF WICHITA FALLS, TEXAS NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2013 Demonstrating compliance with the adopted budget is an important component of a government's accountability to the public. Many citizens participate in the process of establishing the annual operating budgets of state and local governments, and have a keen interest in following the actual financial progress of their governments over the course of the year. The City and many other governments revise their original budgets over the course of the year for a variety of reasons. Under the new reporting model, governments will continue to provide budgetary comparison information in their annual reports. An important change, however, is a requirement to add the government's original budget to the current comparison of final budget and actual results. The City adheres to the following procedures in establishing the operating budget reflected in the basic financial statements: On or before August 15 of each year, the City Manager submits to the City Council a proposed budget for the fiscal year beginning the following October 1. The operating budget includes proposed expenditures and the means of financing them. Public hearings are conducted. The budget is legally enacted by the City Council through passage of appropriation and tax levying ordinances prior to September 30 and is published under a separate cover. An annual budget, including debt service requirements, is legally adopted for the General Fund, the Community Development Block Grant Fund, the Section 8 Housing Fund, the HOME Investment Partnership Agreement Fund, the Hotel/Motel Tax Fund, the Golf Fund, the MPEC Fund and the Debt Service Fund, on a basis which is consistent with generally accepted accounting principles. The City Council must approve any transfer of appropriation balances or portions thereof from one department to another. The City Manager has the authority, without City Council approval, to transfer appropriation balances from one expenditure account to another within a single department of the City. Supplemental appropriations of $590,496 were approved by the City Council. The reported budgetary data includes amendments made during the year. At the close of each fiscal year, any unencumbered appropriated balance lapses to the unreserved fund balance. The unencumbered appropriation balances in the Capital Projects Funds do not lapse at year end. 61 EXHIBIT B-2 CITY OF WICHITA FALLS, TEXAS TEXAS MUNICIPAL RETIREMENT SYSTEM -ANALYSIS OF FUNDING PROGRESS - LAST TEN PLAN YEARS (UNAUDITED)* (1) (2) (3) (4) (5) (6) Unfunded UAAL as a Actuarial Actuarial Actuarial Percentage Actuarial Accrued Annual Percentage of Valuation Value Accrued Funded Liability(UAAL) Covered Covered Payroll Date of Assets Liability(AAL) (1) _ (2) (2)- (1) Payroll (4) _ (5) 12/31/03 $ 72,469,506 $ 98,017,025 73.9% $ 25,547,519 $ 31,516,130 81.1% 12/31/04 70,462,244 98,405,860 71.6% 27,943,616 33,522,283 83.4% 12/31/05 71,393,893 101,093,789 70.6% 29,699,896 32,846,479 90.4% 12/31/06 69,201,457 100,991,795 68.5% 31,790,338 33,791,762 94.1% 12/31/07 (1) 70,561,545 120,374,701 58.6% 49,813,156 35,873,970 138.9% 12/31/08 68,910,226 122,001,202 56.5% 53,090,976 38,272,312 138.7% 12/31/09 71,505,945 125,325,301 57.1% 53,819,356 39,020,039 137.9% 12/31/10 (2) 155,809,040 193,990,630 80.3% 38,181,590 38,337,008 99.6% 12/31/11 164,206,444 201,160,651 81.6% 36,954,207 38,791,669 95.3% 12/31/12 172,839,281 206,427,900 83.7% 33,588,619 39,529,771 85.0% Analysis of the dollar amounts of the actuarial value of assets, actuarial accrued liability, and unfunded actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a percentage of the actuarial accrued liability provides one indication of the City's funding status on a going-concern basis. Analysis of this percentage over time indicates whether the system is becoming financially stronger or weaker. Generally, the greater this percentage, the stronger the pension plan. Trends in unfunded actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing the unfunded actuarial accrued liability as a percentage of annual covered payroll approximately adjusts for the effects of inflation and aids analysis of the City's progress made in accumulating sufficient assets to pay benefits when due. Generally, the smaller this percentage, the stronger the pension plan. This City retirement plan is substantially a defined contribution plan. These voluntary disclosures, similar to the disclosures required for a defined benefit plan, are provided for additional analysis of the plan. (1) TMRS made changes to both the actuarial funding method and actuarial assumptions for the 2007 valuation. (2) TMRS, with the approval of the Texas Legislature, amended the fund structure of the plan as of December 31, 2010. 62 EXHIBIT B-3 CITY OF WICHITA FALLS, TEXAS WICHITA FALLS FIREMEN'S RELIEF AND RETIREMENT FUND - ANALYSIS OF FUNDING PROGRESS (UNAUDITED) (1) (2) (3) (4) (5) (6) Unfunded UAAL as a Actuarial Actuarial Actuarial Percentage Actuarial Accrued Annual Percentage of Valuation Value Accrued Funded Liability(UAAL) Covered Covered Payroll Date of Assets Liability(AAL) (1) _ (2) (2) - (1) Payroll (4) _ (5) 12/31/02 $ 27,439,565 $ 37,003,896 74.2% $ 9,564,331 $ 6,609,807 144.7% 12/31/03 (a) - - - - - - 12/31/04 32,240,524 42,178,490 76.4% 9,937,966 7,175,196 138.5% 12/31/05 (a) - - - - - - 12/31/06 35,584,639 47,582,190 74.8% 11,997,551 7,697,370 155.9% 12/31/07 (a) - - - - - - 12/31/08 39,358,309 54,260,301 72.5% 14,901,992 8,915,419 167.1% 12/31/09 (a) - - - - - - 12/31/10 41,107,385 60,152,150 68.3% 19,044,765 8,527,417 223.3% 12/31/11 (a) - - - - - - 12/31/12 41,964,674 66,606,163 63.0% 24,641,489 8,962,581 274.9% Analysis of the dollar amounts of the actuarial value of assets, actuarial accrued liability, and unfunded actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a percentage of the actuarial accrued liability provides one indication of the City's funding status on a going-concern basis. Analysis of this percentage over time indicates whether the system is becoming financially stronger or weaker. Generally, the greater this percentage, the stronger the pension plan. Trends in unfunded actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing the unfunded actuarial accrued liability as a percentage of annual covered payroll approximately adjusts for the effects of inflation and aids analysis of the City's progress made in accumulating sufficient assets to pay benefits when due. Generally, the smaller the percentage,the stronger the pension plan. (a) Historical trend information is presented for as many years as such information about the plan is available. No actuarial valuation or update was performed as of these dates. Texas state law does not require an actuarial valuation to be completed annually. 63 EXHIBIT B-4 CITY OF WICHITA FALLS, TEXAS WICHITA FALLS RETIREE HEALTH CARE PLAN - ANALYSIS OF FUNDING PROGRESS (UNAUDITED) (1) (2) (3) (4) (5) (6) Unfunded UAAL as a Actuarial Actuarial Actuarial Percentage Actuarial Accrued Annual Percentage of Valuation Value Accrued Funded Liability(UAAL) Covered Covered Payroll Date of Assets Liability(AAL) (1) _ (2) (2) - (1) Payroll (4) _ (5) 12/31/06 (a) $ - $ 29,656,852 0.0% $ 29,656,852 $ 40,021,675 74.1% 12/31/07 (b) - - - - - - 12/31/08 - 32,143,378 0.0% 32,143,378 43,571,340 73.8% 12/31/09 (b) - - - - - - 12/31/10 853,478 32,409,858 2.6% 31,556,380 47,297,531 66.7% 12/31/11 (b) - - - - - - 12/31/12 1,709,516 32,117,774 5.3% 30,408,258 48,492,352 62.7% Analysis of the dollar amounts of the actuarial value of assets, actuarial accrued liability, and unfunded actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a percentage of the actuarial accrued liability provides one indication of the City's funding status on a going-concern basis. Analysis of this percentage over time indicates whether the system is becoming financially stronger or weaker. Generally, the greater this percentage, the stronger the pension plan. Trends in unfunded actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing the unfunded actuarial accrued liability as a percentage of annual covered payroll approximately adjusts for the effects of inflation and aids analysis of the City's progress made in accumulating sufficient assets to pay benefits when due. Generally, the smaller the percentage,the stronger the pension plan. (a) The first actuarial valuation was performed as of December 31, 2006 as the City began to prepare for the implementation of GASB 45. (b) Historical trend information is presented for as many years as such information about the plan is available. No actuarial valuation or update was performed as of these dates. Texas state law does not require an actuarial valuation to be completed annually. 64 Combining Financial Statements Nonmajor Governmental Funds Special Revenue Funds The special revenue funds are used to account for the proceeds from specific revenue sources (other than for major capital projects or proprietary funds) that are either legally restricted to be expended for specified purposes or have revenue sources committed for specific purposes. Community Development Block Grant Fund The Community Development Block Grant Fund accounts for federal block grant revenues and related expenditures. Section 8 Housing Fund The Section 8 Housing Fund accounts for federal funds received to subsidize rents and housing payments for lower income families within the City. Home Investment Partnership Agreement Fund The Home Investment Partnership Agreement Fund accounts for federal funds received to provide home ownership opportunities to low income, first-time homebuyers through the acquisition, rehabilitation and resale of single-family dwellings that are currently owned by governmental agencies. Hotel/Motel Tax Fund The Hotel/Motel Tax Fund accounts for revenues derived from an occupancy tax which is expended on programs promoting the growth of the City of Wichita Falls. Airport Improvement Grant Fund The Airport Improvement Grant Fund accounts for federal funds received to make capital improvements to the Kickapoo Downtown Airport. This fund is not required to have a legally adopted budget; therefore no budgetary comparison schedule is presented. Golf Fund The Golf Fund accounts for the activities at the Weeks Park Golf Course. MPEC Fund The MPEC Fund is used to account for the operations of the City's Multi-Purpose Events Center. Miscellaneous Special Revenue Fund The Miscellaneous Special Revenue Fund accounts for various revenues generated in the form of contributions, fees, concessions, rents and other charges and their related expenditures. This fund also includes revenues derived from various grants for health and police programs. The revenues in this fund are expended to support the activity generating the revenue or as designated by the contributor. This fund is not required to have a legally adopted budget; therefore no budgetary comparison schedule is presented. Debt Service Funds Debt Service Fund The Debt Service Fund is established by ordinances authorizing the issuance of general obligation bonds to provide for the payment of bond principal and interest. An ad valorem tax rate and tax levy are required to be computed and levied which will be sufficient to produce the funds required to pay principal and interest as they come due. This fund is also used to provide for the payment of paying agent fees. Excess Sales Tax Fund The Excess Sales Tax Fund is used to account for and administer the excess sales tax collected related to the property reduction tax. This fund is not required to have a legally adopted budget; therefore no budgetary comparison schedule is presented. Capital Projects Funds The capital projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities, other than those financed by federal grants or proprietary funds. 4B Sales Tax Projects This fund was established to account for projects financed by the Wichita Falls 4B Sales Tax Corporation. Significant projects accounted for in this fund included the construction of three fire stations and the renovation of the second floor of the Wichita Falls Public Library building for recreational purposes. Airport Construction Fund This fund was established to account for the construction of a new terminal building at Municipal Airport. This fund includes the proceeds of the Combination Tax and Revenue Certificates of Obligation, Series 2013, which will be used to fund a portion of the construction project. The City will also receive federal grant funding for a portion of the project. Miscellaneous Capital Projects Funds This fund is an accumulation of several projects that have been undertaken over the years including library renovations, street improvements and drainage improvements. Permanent Fund The permanent fund is used to account for principal trust amounts received and related interest income. The interest earnings of this fund may be used for maintenance of the City's cemeteries. EXHIBIT C-1 CITY OF WICHITA FALLS, TEXAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2013 Permanent Special Revenue Debt Service Capital Projects Fund Home Total Community Investment Hotel/ Airport Miscellaneous Airport Miscellaneous Nonmajor Development Section 8 Partnership Motel Improvement Golf MPEC Special Debt Excess 4B Sales Construction Capital Perpetual Governmental Block Grant Housing Agreement Tax Grant Fund Fund Revenue Service Sales Tax Tax Projects Fund Projects Care Funds ASSETS Cash and cash equivalents $ $ 1,315,797 $ 50,300 $ - $ $ $ 298,832 $ 3,151,194 $ 100,600 $ 266,441 $ 1,706,026 $ 19,733,596 $ 3,598,241 $ 998,109 $ 31,219,136 Receivables: Taxes and assessments - - 154,646 - - 34,117 - - - - - 188,763 Government agencies 717,475 803,033 - 526,860 - 615,867 15,909 308,395 2,987,539 Other - - - 53,526 37,313 - - 90,839 Inventory 72,002 - 72,002 Prepaid items 2,751 9,544 643 12,938 Other assets - - - - - 143,864 54,863 3,000 - - - - - - 201,727 Total assets $ 717,475 $ 1,315,797 $ 853,333 $ 154,646 $ 526,860 $ 146,615 $ 488,767 $ 3,808,017 $ 150,626 $ 574,836 $ 1,706,026 $ 19,733,596 $ 3,598,241 $ 998,109 $ 34,772,944 LIABILITIES AND FUND BALANCE Liabilities Accounts payable-trade $ 34,798 $ 1,466 $ - $ - $ 444,679 $ 70,890 $ 42,380 $ 98,728 $ - $ - $ - $ - $ - $ - $ 692,941 Accrued payroll 2,772 6,696 1,158 - - 44,293 37,727 - 92,646 Accrued interest payable - - - - - - - - 30,357 - - 30,357 Payable to other City funds 144,518 - - 137,255 18,002 43,263 - 897,134 - 2,292,284 762 3,533,218 Payable to government agencies - 72,725 20,000 - - - 7,788 2,302 - - - - 102,815 Other liabilities - 24,744 333,467 682 157,936 21,288 2,529 20,000 23,583 5,647 589,876 Unearned revenue - - - - - - - 37,236 - - - - 37,236 Total liabilities 182,088 80,887 45,902 137,255 796,148 114,835 252,397 1,094,415 32,886 20,000 2,315,867 6,409 5,079,089 Deferred inflows of resources Unavailable revenues - - - - - - - - 47,291 - - - 47,291 Fund balance: Nonspendable: Inventory and prepaid items 2,751 81,546 643 - - 84,940 Restricted for: Perpetual care - - - - - 998,109 998,109 Debt service 70,449 574,836 - - - - 645,285 Capital projects - - - - - 1,686,026 17,417,729 3,591,832 22,695,587 Federal and state grant programs 535,387 1,234,910 807,431 - - - - 2,577,728 Tourism - - - 17,391 - 17,391 Committed for: Golf course - 29,029 - 29,029 Multi-Purpose Events Center - 154,824 - 154,824 Local projects - 2,712,959 2,712,959 Unassigned - - - - (269,288) - - - - - - - - - (269,288) Total fund balance 535,387 1,234,910 807,431 17,391 (269,288) 31,780 236,370 2,713,602 70,449 574,836 1,686,026 17,417,729 3,591,832 998,109 29,646,564 Total liabilities,fund balance and deferred inflows of resources $ 717,475 $ 1,315,797 $ 853,333 $ 154,646 $ 526,860 $ 146,615 $ 488,767 $ 3,808,017 $ 150,626 $ 574,836 $ 1,706,026 $ 19,733,596 $ 3,598,241 $ 998,109 $ 34,772,944 65 EXHIBIT C-2 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2013 Permanent Special Revenue Debt Service Capital Projects Fund Home Total Community Investment Hotel/ Airport Miscellaneous Airport Miscellaneous Nonmajor Development Section 8 Partnership Motel Improvement Golf MPEC Special Debt Excess 4B Sales Construction Capital Perpetual Governmental Block Grant Housing Agreement Tax Grant Fund Fund Revenue Service Sales Tax Tax Projects Fund Projects Care Funds Revenues: Taxes $ - $ $ $ 1,545,411 $ $ - $ - $ - $ 575,992 $ 308,395 $ $ $ $ $ 2,429,798 Charges for services 1,596 - 518,730 165,433 88,391 - - 774,150 Fines and forfeitures - - - 319,522 319,522 Intergovernmental revenue 1,085,104 3,666,284 346,257 3,645,297 2,969,406 - 11,712,348 Contributions - - - - - - 725,109 2,212,046 - 553,484 3,490,639 Miscellaneous revenue - 6,605 2,900 - - 272,664 1,432,269 546,627 116 442 - 6,681 82,445 49,344 2,400,093 Total revenues 1,086,700 3,672,889 349,157 1,545,411 3,645,297 791,394 1,597,702 4,649,055 2,788,154 308,837 553,484 6,681 82,445 49,344 21,126,550 Expenditures: Current: Administrative services 113,936 - - 92,500 - 833,834 - 186,006 - - - - - - 1,226,276 Police - - - 364,710 - - 364,710 Fire 85,767 149,915 - - 235,682 Parks and recreation - - - 237,963 - 6,893 284 245,140 Community development 583,464 3,669,129 477,956 181,585 - - 4,912,134 Public works 100,000 - - 28,249 3,821 132,070 Health - 2,239,993 587 2,240,580 Traffic and transportation - 470,689 - 470,689 Multi-Purpose Events Center 3,365,932 - - - - 3,365,932 Capital outlay 2,122,298 372,422 - 767,112 553,950 10,065 3,825,847 Debt service: Principal retirement - - 2,515,000 - - - 2,515,000 Interest and paying agent fees 1,618,299 - - 1,618,299 Bond issuance costs - - - - - - - - 244,379 66,398 - 310,777 Total expenditures 797,400 3,669,129 477,956 92,500 833,834 5,488,230 4,167,384 4,133,299 - 917,027 244,379 631,649 10,349 21,463,136 Excess of revenues over (under)expenditures 289,300 3,760 (128,799) 1,452,911 3,645,297 (42,440) (3,890,528) 481,671 (1,345,145) 308,837 (363,543) (237,698) (549,204) 38,995 (336,586) Other financing sources(uses): Bond proceeds - - - - - - 19,875,000 - 19,875,000 Premium on bond proceeds 96,293 - 96,293 Bond proceeds-refunding bonds - 3,740,000 3,740,000 Premium on refunding bond proceeds - 157,968 157,968 Capital lease proceeds 1,888,562 - 1,888,562 Payment to refunded bond escrow agent - - - - - (3,831,570) (3,831,570) Transfers in 394,904 42,440 1,772,339 757,236 1,230,183 4,197,102 Transfers out (296,271) (1,569,924) (4,040,201) - - (422,213) - (280,000) (2,315,866) (85,191) (9,009,666) Total other financing sources(uses) (296,271) - (1,569,924) (3,645,297) 42,440 3,660,901 335,023 1,230,183 (280,000) 17,655,427 (18,793) 17,113,689 Net change in fund balance (6,971) 3,760 (128,799) (117,013) - (229,627) 816,694 (114,962) 28,837 (363,543) 17,417,729 (567,997) 38,995 16,777,103 Fund balance-beginning 542,358 1,231,150 936,230 134,404 (269,288) 31,780 465,997 1,896,908 185,411 545,999 2,049,569 - 4,159,829 959,114 12,869,461 Fundbalance-ending $ 535,387 $ 1,234,910 $ 807,431 $ 17,391 $ (269,288) $ 31,780 $ 236,370 $ 2,713,602 $ 70,449 $ 574,836 $ 1,686,026 $ 17,417,729 $ 3,591,832 $ 998,109 $ 29,646,564 66 EXHIBIT C-3 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - COMMUNITY DEVELOPMENT BLOCK GRANT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2013 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Charges for services $ - $ - $ 1,596 $ 1,596 Intergovernmental revenue 1,235,104 1,085,104 1,085,104 - Total revenues 1,235,104 1,085,104 1,086,700 1,596 Expenditures: Administrative services 113,935 113,936 113,936 - Community development 821,169 937,672 583,464 354,208 Public works 100,000 100,000 100,000 - Capital outlay 200,000 588,694 - 588,694 Total expenditures 1,235,104 1,740,302 797,400 942,902 Excess of revenues over(under)expenditures - (655,198) 289,300 944,498 Other financing sources (uses): Transfers out - - (296,271) (296,271) Total other financing sources(uses) - - (296,271) (296,271) Net change in fund balance - (655,198) (6,971) 648,227 Fund balance-beginning 542,358 542,358 542,358 - Fund balance-ending $ 542,358 $ (112,840) $ 535,387 $ 648,227 67 EXHIBIT C-4 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - SECTION 8 HOUSING FUND FOR THE YEAR ENDED SEPTEMBER 30, 2013 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Intergovernmental revenue $ 3,808,976 $ 3,808,976 $ 3,666,284 $ (142,692) Miscellaneous revenue - - 6,605 6,605 Total revenues 3,808,976 3,808,976 3,672,889 (136,087) Expenditures: Community development 3,807,560 3,807,560 3,669,129 138,431 Capital outlay 1,416 1,416 - 1,416 Total expenditures 3,808,976 3,808,976 3,669,129 139,847 Excess of revenues over expenditures - - 3,760 3,760 Fund balance-beginning 1,231,150 1,231,150 1,231,150 - Fund balance-ending $ 1,231,150 $ 1,231,150 $ 1,234,910 $ 3,760 68 EXHIBIT C-5 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - HOME INVESTMENT PARTNERSHIP AGREEMENT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2013 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Intergovernmental revenue $ 346,257 $ 346,257 $ 346,257 $ - Miscellaneous revenue - - 2,900 2,900 Total revenues 346,257 346,257 349,157 2,900 Expenditures: Community development 346,257 1,147,617 477,956 669,661 Total expenditures 346,257 1,147,617 477,956 669,661 Excess of revenues over(under)expenditures - (801,360) (128,799) 672,561 Fund balance-beginning 936,230 936,230 936,230 - Fund balance-ending $ 936,230 $ 134,870 $ 807,431 $ 672,561 69 EXHIBIT C-6 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - HOTEL/MOTEL TAX FUND FOR THE YEAR ENDED SEPTEMBER 30, 2013 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Taxes $ 1,580,000 $ 1,580,000 $ 1,545,411 $ (34,589) Total revenues 1,580,000 1,580,000 1,545,411 (34,589) Expenditures: Administrative services 92,500 92,500 92,500 - Total expenditures 92,500 92,500 92,500 - Excess of revenues over expenditures 1,487,500 1,487,500 1,452,911 (34,589) Other financing sources (uses): Transfers out (1,487,500) (1,570,500) (1,569,924) 576 Total other financing sources(uses) (1,487,500) (1,570,500) (1,569,924) 576 Excess of revenues and other sources over(under)expenditures and other uses - (83,000) (117,013) (34,013) Fund balance-beginning 134,404 134,404 134,404 - Fund balance-ending $ 134,404 $ 51,404 $ 17,391 $ (34,013) 70 EXHIBIT C-7 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - GOLF FUND FOR THE YEAR ENDED SEPTEMBER 30, 2013 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Charges for services $ 725,000 $ 725,000 $ 518,730 $ (206,270) Miscellaneous revenue - - 272,664 272,664 Total revenues 725,000 725,000 791,394 66,394 Expenditures: Administrative services 850,000 850,000 833,834 16,166 Total expenditures 850,000 850,000 833,834 16,166 Excess of revenues over(under)expenditures (125,000) (125,000) (42,440) 82,560 Other financing sources (uses): Transfers in 125,000 125,000 42,440 (82,560) Total other financing sources (uses) 125,000 125,000 42,440 (82,560) Excess of revenues and other sources over(under)expenditures and other uses - - - - Fund balance-beginning 31,780 31,780 31,780 - Fund balance-ending $ 31,780 $ 31,780 $ 31,780 $ - 71 EXHIBIT C-8 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - MPEC FUND FOR THE YEAR ENDED SEPTEMBER 30, 2013 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Charges for services $ 182,828 $ 182,828 $ 165,433 $ (17,395) Miscellaneous revenue 1,513,509 1,513,509 1,432,269 (81,240) Total revenues 1,696,337 1,696,337 1,597,702 (98,635) Expenditures: MPEC 3,160,870 3,452,127 3,365,932 86,195 Capital outlay - 498,080 2,122,298 (1,624,218) Total expenditures 3,160,870 3,950,207 5,488,230 (1,538,023) Excess of revenues over(under)expenditures (1,464,533) (2,253,870) (3,890,528) (1,636,658) Other financing sources (uses): Capital lease proceeds - - 1,888,562 1,888,562 Transfers in 1,464,533 1,774,533 1,772,339 (2,194) Total other financing sources (uses) 1,464,533 1,774,533 3,660,901 1,886,368 Excess of revenues and other sources over(under)expenditures and other uses - (479,337) (229,627) 249,710 Fund balance-beginning 465,997 465,997 465,997 - Fund balance-ending $ 465,997 $ (13,340) $ 236,370 $ 249,710 72 EXHIBIT C-9 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE- DEBT SERVICE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2013 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Taxes $ 581,222 $ 581,222 $ 575,992 $ (5,230) Contributions 3,457,294 3,457,294 2,212,046 (1,245,248) Miscellaneous revenue - - 116 116 Total revenues 4,038,516 4,038,516 2,788,154 (1,250,362) Expenditures: Debt service-principal 2,465,000 2,515,000 2,515,000 - Debt service-interest and paying agent fees 1,623,516 1,623,516 1,618,299 5,217 Total expenditures 4,088,516 4,138,516 4,133,299 5,217 Excess of revenues over(under)expenditures (50,000) (100,000) (1,345,145) (1,245,145) Other financing sources(uses): Transfers in - - 1,230,183 1,230,183 Total other financing sources(uses) - - 1,230,183 1,230,183 Excess of revenues and other sources over(under)expenditures and other uses (50,000) (100,000) (114,962) (14,962) Fund balance-beginning 185,411 185,411 185,411 - Fund balance-ending $ 135,411 $ 85,411 $ 70,449 $ (14,962) 73 Nonmajor Enterprise Funds Nonmajor enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises. The intent of the governing body is that the cost of providing the service to the general public on a continuing basis be recovered primarily through user charges. 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. Waterpark Fund The Waterpark Fund was established to account for the operating revenues and expenses of the Castaway Cove Waterpark. The waterpark was purchased on February 4, 2010. EXHIBIT D-1 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF NET POSITION NONMAJOR ENTERPRISE FUNDS SEPTEMBER 30, 2013 Total Nonmajor Municipal Kickapoo Stormwater Enterprise Airport Airport Transit Drainage Waterpark Funds ASSETS Current assets: Cash and cash equivalents $ (104,685) $ 273,871 $ 624,593 $ 4,632,375 $ 1,334,949 $ 6,761,103 Restricted cash and cash equivalents 868,590 - - - - 868,590 Receivables (net of allowance for uncollectible accounts): Customer and trade - - - 264,336 - 264,336 Government agencies - - 780,066 - - 780,066 Other 9,658 44,367 - - - 54,025 Inventory - 48,780 - - - 48,780 Prepaid items 23,137 - - 235 - 23,372 Total current assets 796,700 367,018 1,404,659 4,896,946 1,334,949 8,800,272 Capital assets, net of accumulated depreciation 17,539,505 10,256,052 5,095,733 16,237,991 3,236,137 52,365,418 Total assets 18,336,205 10,623,070 6,500,392 21,134,937 4,571,086 61,165,690 LIABILITIES Current liabilities payable from current assets: Accounts payable -trade 11,215 4,494 315,012 133,973 - 464,694 Accrued payroll 2,016 4,477 22,559 4,267 2,749 36,068 Accrued vacation and sick leave 8,622 6,155 16,878 1,916 5,749 39,320 Payable to other City funds - - 973,168 - - 973,168 Payable to government agencies - 121 - - 3,107 3,228 Other liabilities 15,000 20,057 184,416 6,831 - 226,304 Total current liabilities payable from current assets 36,853 35,304 1,512,033 146,987 11,605 1,742,782 Net position: Net investment in capital assets 17,539,505 10,256,052 5,095,733 16,237,991 3,236,137 52,365,418 Unrestricted 759,847 331,714 (107,374) 4,749,959 1,323,344 7,057,490 Total net position $ 18,299,352 $ 10,587,766 $4,988,359 $ 20,987,950 $ 4,559,481 $ 59,422,908 74 EXHIBIT D-2 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013 Total Nonmajor Municipal Kickapoo Stormwater Enterprise Airport Airport Transit Drainage Waterpark Funds Operating revenues: Charges for services $ - $ - $ 410,525 $ 2,503,255 $ 1,048,391 $ 3,962,171 Rents, concessions and other 769,557 1,255,153 212 - 349,773 2,374,695 Total operating revenues 769,557 1,255,153 410,737 2,503,255 1,398,164 6,336,866 Operating expenses: Personnel services 89,899 217,419 1,003,450 147,820 444,907 1,903,495 Supplies and materials 1,645 733,232 474,268 8,323 196,098 1,413,566 Maintenance and repairs 27,621 4,552 184,543 23,830 36,599 277,145 Utilities and other services 116,559 103,224 61,287 13,119 446,295 740,484 Insurance and contract support 6,316 17,661 27,965 100 55,168 107,210 Other expenses 91,482 39,500 39,353 22,471 29,699 222,505 Depreciation and amortization 361,017 398,394 46,843 213,650 186,976 1,206,880 Total operating expenses 694,539 1,513,982 1,837,709 429,313 1,395,742 5,871,285 Operating income (loss) 75,018 (258,829) (1,426,972) 2,073,942 2,422 465,581 Nonoperating revenues (expenses): Interest income 863 214 - 3,805 756 5,638 Gain (loss)on sale of capital assets (2,154) (1,250) 13,061 - - 9,657 Intergovernmental operating grants - - 3,787,014 - - 3,787,014 Total nonoperating revenues (expenses) (1,291) (1,036) 3,800,075 3,805 756 3,802,309 Income (loss) before contributions and transfers 73,727 (259,865) 2,373,103 2,077,747 3,178 4,267,890 Capital contributions - - 592,313 - 250,000 842,313 Transfers in 6,356,067 53,130 427,352 - - 6,836,549 Transfers out (444,943) (49,883) (14,090) (645,773) - (1,154,689) Net transfers 5,911,124 3,247 1,005,575 (645,773) 250,000 6,524,173 Net income (loss) 5,984,851 (256,618) 3,378,678 1,431,974 253,178 10,792,063 Net position - beginning 12,314,501 10,844,384 1,609,681 19,555,976 4,306,303 48,630,845 Net position -ending $ 18,299,352 $ 10,587,766 $ 4,988,359 $ 20,987,950 $ 4,559,481 $ 59,422,908 75 EXHIBIT D-3 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013 Total Nonmajor Municipal Kickapoo Stormwater Enterprise Airport Airport Transit Drainage Waterpark Funds Cash flows from operating activities: Receipts from customers and users $ 777,366 $ 1,250,622 $ 410,737 $ 2,510,600 $ 1,398,164 $ 6,347,489 Payments to suppliers (262,930) (945,131) (816,278) (346,265) (831,136) (3,201,740) Payments to employees (60,957) (158,801) (765,991) (113,978) (377,385) (1,477,112) Net cash provided (used) by operating activities 453,479 146,690 (1,171,532) 2,050,357 189,643 1,668,637 Cash flows from noncapital financing activities: Intergovernmental operating grants - - 3,707,239 - - 3,707,239 Interfund loan received - - 848,085 - - 848,085 Transfers out to other funds (444,943) (49,883) (14,090) (645,773) - (1,154,689) Transfers from other funds 6,356,067 53,130 427,352 - - 6,836,549 Net cash provided (used) by noncapital financing activities 5,911,124 3,247 4,968,586 (645,773) - 10,237,184 Cash flows from capital and related financing activities: Capital contributions - - 592,313 - 250,000 842,313 Acquisition and construction of capital assets (6,356,067) (82,289) (3,777,835) (772,341) (37,347) (11,025,879) Proceeds from sale of capital assets - - 13,061 - - 13,061 Net cash provided (used)for capital and related financing activities (6,356,067) (82,289) (3,172,461) (772,341) 212,653 (10,170,505) Cash flows from investing activities: Interest on investments 863 214 - 3,805 756 5,638 Net cash provided by investing activities 863 214 - 3,805 756 5,638 Net Increase in Cash and Cash Equivalents 9,399 67,862 624,593 636,048 403,052 1,740,954 Cash and Cash Equivalents- Beginning 754,506 206,009 - 3,996,327 931,897 5,888,739 Cash and Cash Equivalents- Ending $ 763,905 $ 273,871 $ 624,593 $ 4,632,375 $ 1,334,949 $ 7,629,693 76 EXHIBIT D-3 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF CASH FLOWS (CONT-D.) NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013 Municipal Kickapoo Stormwater Airport Airport Transit Drainage Waterpark Totals Cash flows from operating activities: Operating income (loss) $ 75,018 $ (258,829) $(1,426,972) $ 2,073,942 $ 2,422 $ 465,581 Adjustments to reconcile operating income (loss) to net cash provided by(used in) operating activities: Depreciation and amortization 361,017 398,394 46,843 213,650 186,976 1,206,880 (Increase) decrease in current assets: Receivables: Customer and trade - - - 7,345 - 7,345 Other 7,809 (4,531) - - - 3,278 Inventory - 13,584 - - - 13,584 Prepaid items 3,021 4,074 - (235) - 6,860 Increase (decrease) in current liabilities: Accounts payable -trade 405 (2,407) 205,335 (206,620) (10) (3,297) Accrued payroll 511 112 3,262 2,029 1,301 7,215 Accrued vacation and sick leave 5,915 (1,798) - (3,678) 921 1,360 Payable to government agencies (217) 17 - - (1,528) (1,728) Other liabilities - (1,926) - (36,076) (439) (38,441) Total adjustments 378,461 405,519 255,440 (23,585) 187,221 1,203,056 Net cash provided by(used in) operating activities $ 453,479 $ 146,690 $(1,171,532) $ 2,050,357 $ 189,643 $ 1,668,637 77 Internal Service Funds Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City on a cost-reimbursement basis. Fleet Maintenance Fund The Fleet Maintenance Fund accounts for the costs associated with the operation, maintenance and replacement of the City's vehicle and equipment fleet. City departments which use the vehicles and equipment are charged a monthly rental fee based upon actual operating costs associated with each class of vehicle or equipment. Duplicating Services Fund The Duplicating Services Fund accounts for the costs associated with the operation and maintenance of the City's duplicating equipment. City departments which use the duplicating services are charged a fee based upon actual usage. Employee Benefit Trust Fund The Employee Benefit Trust Fund is used to account for and administer group health insurance, which is self-insured by the City, and life insurance for employees and covered dependents. Information Technology Fund The Information Technology Fund accounts for the costs associated with the operation and maintenance of the City's Information Technology assets. City departments which use information technology are charged a fee based on usage. EXHIBIT E-1 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30,2013 Employee Information Fleet Duplicating Benefit Technology Maintenance Services Trust Fund Totals ASSETS Current assets: Cash and cash equivalents $ 1,093,977 $ $ 1,510 $ 2,027,761 $ 3,123,248 Restricted cash and cash equivalents - 2,414,417 - 2,414,417 Receivables: Other 36,819 - 36,819 Inventory 740,381 740,381 Prepaid items 569 - - 569 Total current assets 1,871,177 569 2,415,927 2,027,761 6,315,434 Capital assets,net of accumulated depreciation 19,869,180 4,036 797,103 20,670,319 Total assets 21,740,357 4,605 2,415,927 2,824,864 26,985,753 LIABILITIES Current liabilities: Accounts payable-trade 190,989 9,906 24,066 104,071 329,032 Accrued payroll 35,888 831 1,925 23,639 62,283 Accrued vacation and sick leave 73,980 3,355 - 39,864 117,199 Payable to other City funds - 27,134 41,110 - 68,244 Estimated health claims payable - - 528,397 528,397 Other liabilities 32,395 - 32,395 Capital leases-current maturities 237,820 237,820 Total current liabilities 571,072 41,226 595,498 167,574 1,375,370 Long-term liabilities: Capital leases,less current maturities 736,099 - - - 736,099 Total liabilities 1,307,171 41,226 595,498 167,574 2,111,469 NET POSITION Net investment in capital assets 18,895,261 4,036 - 797,103 19,696,400 Unrestricted 1,537,927 (40,657) 1,820,429 1,860,187 5,177,886 Total net position $ 20,433,188 $ (36,621) $ 1,820,429 $ 2,657,290 $ 24,874,286 78 EXHIBIT E-2 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2013 Employee Information Fleet Duplicating Benefit Technology Maintenance Services Trust Fund Totals Operating revenues: Charges for services $ 9,736,183 $ 145,112 $ - $ 2,855,105 $ 12,736,400 Rents,concessions and other 29,602 - 350,720 - 380,322 Contributions - - 10,934,977 - 10,934,977 Total operating revenues 9,765,785 145,112 11,285,697 2,855,105 24,051,699 Operating expenses: Personnel services 1,896,713 44,454 96,739 1,185,158 3,223,064 Supplies and materials 4,249,063 10,422 14,536 191,791 4,465,812 Maintenance and repairs 1,639,304 - 6,771 497,302 2,143,377 Utilities and other services 77,403 1,941 199,168 130,324 408,836 Insurance and contract support 206,447 - 9,903,910 879 10,111,236 Other expenses 182,698 123,690 1,752,455 13,178 2,072,021 Depreciation and amortization 3,901,932 1,174 114,428 4,017,534 Total operating expenses 12,153,560 181,681 11,973,579 2,133,060 26,441,880 Operating income(loss) (2,387,775) (36,569) (687,882) 722,045 (2,390,181) Nonoperating revenues(expenses): Interest income - 234,234 - 234,234 Gain on sale of capital assets 153,090 - - 153,090 Interest expense (18,829) - (18,829) Total nonoperating revenues (expenses) 134,261 234,234 - 368,495 Income(loss)before transfers (2,253,514) (36,569) (453,648) 722,045 (2,021,686) Transfers in 1,869,725 710,422 2,580,147 Transfers out (312,000) - - (312,000) Change in net position (695,789) (36,569) (453,648) 1,432,467 246,461 Net position-beginning 21,128,977 (52) 2,274,077 1,224,823 24,627,825 Netposition-ending $ 20,433,188 $ (36,621) $ 1,820,429 $ 2,657,290 $ 24,874,286 79 EXHIBIT E-3 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2013 Employee Information Fleet Duplicating Benefit Technology Maintenance Services Trust Fund Totals Cash flows from operating activities: Received from customers and users $ 10,100,521 $ 145,112 $ 11,306,307 $ 2,855,105 $24,407,045 Payments to suppliers (6,717,896) (142,022) (11,971,152) (1,066,370) (19,897,440) Payments to employees (1,383,261) (30,916) (69,890) (857,513) (2,341,580) Net cash provided(used)by operating activities 1,999,364 (27,826) (734,735) 931,222 2,168,025 Cash flows from noncapital financing activities: Interfund loans received - 27,134 41,110 - 68,244 Interfund loans repaid - - (10,150) - (10,150) Transfers in from other funds 1,869,725 710,422 2,580,147 Transfers out to other funds (312,000) - - (312,000) Net cash provided(used)by noncapital financing activities 1,557,725 27,134 30,960 710,422 2,326,241 Cash flows from capital and related financing activities: Acquisition of capital assets (2,627,555) - - (721,098) (3,348,653) Proceeds from sale of capital assets 154,162 154,162 Principal paid on long-term debt (428,365) (428,365) Interest and fees paid on long-term debt (18,829) (18,829) Net cash used for capital and related financing activities (2,920,587) - (721,098) (3,641,685) Cash flows from investing activities: Interest on investments 234,234 234,234 Net cash provided by investing activities - - 234,234 - 234,234 Net Increase(Decrease)in Cash and Cash Equivalents 636,502 (692) (469,541) 920,546 1,086,815 Cash and Cash Equivalents-Beginning 457,475 692 2,885,468 1,107,215 4,450,850 Cash and Cash Equivalents-Ending $ 1,093,977 $ - $ 2,415,927 $ 2,027,761 $ 5,537,665 Cash flows from operating activities: Operating income(loss) $ (2,387,775) $ (36,569) $ (687,882) $ 722,045 $ (2,390,181) Adjustments to reconcile operating income to net cash provided(used)by operating activities: Depreciation and amortization 3,901,932 1,174 - 114,428 4,017,534 (Increase)decrease in current assets: Receivables: Other 303,496 - 20,610 - 324,106 Inventory 74,037 - - 74,037 Prepaid items - (102) - (102) Increase(decrease)in current liabilities: Accounts payable-trade 82,369 6,727 (1,793) 50,088 137,391 Accrued payroll 772 139 224 4,797 5,932 Accrued vacation and sick leave (6,707) 805 - 39,864 33,962 Estimated health claims payable - - (65,894) - (65,894) Other liabilities 31,240 - 31,240 Total adjustments 4,387,139 8,743 (46,853) 209,177 4,558,206 Net cash provided(used)by operating activities $ 1,999,364 $ (27,826) $ (734,735) $ 931,222 $ 2,168,025 80 Agency Fund Escheatment Fund - The agency fund is used to account for assets held by the City of Wichita Falls in a custodial capacity. The assets in this fund have been abandoned or remain unclaimed pending escheatment to the State of Texas. EXHIBIT F-1 CITY OF WICHITA FALLS, TEXAS AGENCYFUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED SEPTEMBER 30, 2013 Balance Balance 10/1/2012 Additions Deductions 9/30/2013 ESCHEATMENT FUND Assets Cash and cash equivalents $ 81,226 $ 9,040 $ 4,028 $ 86,238 Liabilities Other liabilities $ 81,226 $ 9,040 $ 4,028 $ 86,238 81 Component Units Discretely Presented Component Units of the City of Wichita Falls are legally separate entities; however, the City is considered to be financially accountable for their operations. The four discretely presented component units are as follows: Wichita Falls Economic Development Corporation The Wichita Falls Economic Development Corporation is a nonprofit corporation formed in May 1997 for the purpose of increasing employment opportunities, primarily through assisting qualified enterprises with funds provided by a portion of the local sales tax. The Corporation operates under the authority of Vernon's Civil Statutes, Article 5190.6, Section 4A. Wichita Falls 4B Sales Tax Corporation The Wichita Falls 4B Sales Tax Corporation is a nonprofit corporation formed in May 1997 for the purpose of increasing employment opportunities and for public improvement projects such as parks, auditoriums, learning centers, open space improvements, athletic and exhibition facilities and the related maintenance and operating costs of such projects. These projects are funded by a portion of the local sales tax. The Corporation operates under the authority of Vernon's Civil Statutes, Article 5190.6, Section 4B. Wichita Falls Reinvestment Zone#2 The Wichita Falls Reinvestment Zone #2 was created in August 2005 by the City, with the advice and consent of the Wichita Falls Independent School District and Wichita County. The purpose of the Wichita Falls Reinvestment Zone#2 is to capture increments of growth in real property values in the designated zone area from base values established in January 2004 and use the ad valorem taxes derived from the increments to contribute to the zoned area. Tax funds derived from the increment can only be spent for public improvements in the zoned area or for payment of debt service on bonds issued to provide funds for public improvements. Wichita Falls Reinvestment Zone#3 The Wichita Falls Reinvestment Zone #3 was created in September 2009 by the City, with the advice and consent of the Wichita Falls Independent School District and Wichita County. The purpose of the Wichita Falls Reinvestment Zone#3 is to capture increments of growth in real property values in the designated zone area from base values established in January 2009 and use the ad valorem taxes derived from the increments to contribute to the zoned area. Tax funds derived from the increment can only be spent for public improvements in the zoned area or for payment of debt service on bonds issued to provide funds for public improvements. EXHIBIT G-1 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF NET POSITION COMPONENT UNITS SEPTEMBER 30, 2013 Wichita Falls Economic Wichita Falls Wichita Falls Wichita Falls Development 413 Sales Tax Reinvestment Reinvestment Corporation Corporation Zone#2 Zone#3 Totals Assets Cash and cash equivalents $ 15,049,327 $ 1,621,393 $ - $ 171,688 $ 16,842,408 Receivables: Government agencies 658,614 658,614 - - 1,317,228 Capital assets,net of accumulated depreciation 2,283,410 - - - 2,283,410 Total assets 17,991,351 2,280,007 - 171,688 20,443,046 Liabilities Accounts payable-trade 137,507 607 - - 138,114 Total liabilities 137,507 607 - 138,114 Net position Net investment in capital assets 2,283,410 - - - 2,283,410 Unrestricted 15,570,434 2,279,400 - 171,688 18,021,522 Total net position $ 17,853,844 $ 2,279,400 $ - $ 171,688 $ 20,304,932 82 EXHIBIT G-2 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF ACTIVITIES COMPONENT UNITS FOR THE YEAR ENDED SEPTEMBER 30, 2013 Net(Expense) Revenue and Program Revenue Changes in Net Position Wichita Falls Operating Economic Wichita Falls Wichita Falls Wichita Falls Charges for Grants and Development 4B Sales Tax Reinvestment Reinvestment Expenses Services Contributions Corporation Corporation Zone#2 Zone#3 Totals Community development Wichita Falls Economic Development Corporation $ 3,646,538 $ 106,800 $ - $ (3,539,738) $ - $ - $ - $ (3,539,738) Wichita Falls 413 Sales Tax Corporation 4,234,205 - 368,617 - (3,865,588) - - (3,865,588) Wichita Falls Reinvestment Zone#2 384,262 - - - - (384,262) - (384,262) Wichita Falls Reinvestment Zone#3 - - - - - - - - Total component units $ 8,265,005 $ 106,800 $ 368,617 (3,539,738) (3,865,588) (384,262) - (7,789,588) General revenues: Taxes: Property tax - - 384,033 58,877 442,910 Sales tax 3,677,061 3,677,061 - - 7,354,122 Investment earnings 14,844 3,807 229 116 18,996 Miscellaneous 35,062 - - - 35,062 Total general revenues 3,726,967 3,680,868 384,262 58,993 7,851,090 Change in net position 187,229 (184,720) - 58,993 61,502 Net position-beginning 17,666,615 2,464,120 - 112,695 20,243,430 Net position-ending $ 17,853,844 $ 2,279,400 $ - $ 171,688 $ 20,304,932 83 Supporting Schedules EXHIBIT H-1 CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDED DEBT AND INTEREST MATURITIES SEPTEMBER 30,2013 Fiscal Year General Obligation Bonds Combination Tax and Revenue Bonds Water and Sewer Priority Lien Revenue Bonds Totals-All Bonded Debt Ending Serial Bond Interest Total Bonds Serial Bond Interest Total Bonds Serial Bond Interest Total Bonds Serial Bond Interest Total Bonds September 30, Maturities(1) on Bonds and Interest Maturities(2) on Bonds and Interest Maturities(3) on Bonds and Interest Maturities on Bonds and Interest 2014 $ 811,812 $ 126,113 $ 937,925 $ 5,871,032 $ 2,353,146 $ 8,224,178 $ 3,488,364 $ 4,357,561 $ 7,845,925 $ 10,171,208 $ 6,836,820 $ 17,008,028 2015 829,160 113,065 942,225 6,296,265 1,992,454 8,288,719 3,637,413 4,211,462 7,848,875 10,762,838 6,316,981 17,079,819 2016 2,752,122 101,103 2,853,225 4,592,940 1,938,500 6,531,440 3,791,420 4,059,030 7,850,450 11,136,482 6,098,633 17,235,115 2017 789,373 60,777 850,150 6,827,323 1,862,755 8,690,078 3,940,386 3,900,052 7,840,438 11,557,082 5,823,584 17,380,666 2018 801,559 44,841 846,400 7,018,114 1,669,116 8,687,230 4,114,310 3,734,740 7,849,050 11,933,983 5,448,697 17,382,680 2019 468,681 28,619 497,300 3,487,395 1,466,560 4,953,955 8,163,252 3,572,198 11,735,450 12,119,328 5,067,377 17,186,705 2020 479,266 19,384 498,650 3,619,505 1,370,883 4,990,388 8,520,949 3,218,376 11,739,325 12,619,720 4,608,643 17,228,363 2021 489,705 9,844 499,549 3,756,446 1,252,802 5,009,248 8,903,475 2,838,350 11,741,825 13,149,626 4,100,996 17,250,622 2022 - - - 3,898,112 1,127,813 5,025,925 9,295,889 2,441,111 11,737,000 13,194,001 3,568,924 16,762,925 2023 4,054,223 989,165 5,043,388 9,713,189 2,026,211 11,739,400 13,767,412 3,015,376 16,782,788 2024 4,210,154 843,292 5,053,446 10,150,366 1,592,534 11,742,900 14,360,520 2,435,826 16,796,346 2025 4,390,902 689,642 5,080,544 10,602,415 1,139,185 11,741,600 14,993,317 1,828,827 16,822,144 2026 4,176,434 538,935 4,715,369 11,074,332 665,493 11,739,825 15,250,766 1,204,428 16,455,194 2027 2,696,747 391,853 3,088,600 3,816,109 170,565 3,986,674 6,512,856 562,418 7,075,274 2028 2,800,717 318,471 3,119,188 - - - 2,800,717 318,471 3,119,188 2029 2,909,658 241,761 3,151,419 2,909,658 241,761 3,151,419 2030 2,203,516 178,478 2,381,994 2,203,516 178,478 2,381,994 2031 2,287,340 132,414 2,419,754 2,287,340 132,414 2,419,754 2032 2,141,120 84,699 2,225,819 2,141,120 84,699 2,225,819 2033 - - - 2,220,579 43,802 2,264,381 - - - 2,220,579 43,802 2,264,381 $ 7,421,678 $ 503,746 $ 7,925,424 $ 79,458,522 $ 19,486,541 $ 98,945,063 $ 99,211,869 $ 37,926,868 $ 137,138,737 $ 186,092,069 $ 57,917,155 $ 244,009,224 (1)Includes amortization of bond premium of$136,678. (2)Includes amortization of bond premium of$983,522. (3)Includes amortization of bond premium of$246,869. 84 EXHIBIT H-2 (Page 1 of 6) CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE SEPTEMBER 30, 2013 Final Bonds Interest Rates Issue Maturity Annual Retired or and(Dates) Date Date Serial Payments Authorized Issued Refunded Outstanding General Obligation Bonds: General Obligation Refunding Bonds, 1.50,2.00,3.00 10/15/11 09/01/21 415,000 (2012) $ 4,365,000 $ 4,365,000 $ 820,000 $ 3,545,000 Series 2011 (3/1,9/1) 405,000 (2013) 410,000 (2014) 420,000 (2015) 425,000 (2016) 435,000 (2017) 445,000 (2018) 455,000 (2019) 470,000 (2020) 485,000 (2021) General Obligation Refunding Bonds, - 194,300 57,622 136,678 Series 2011 -Premium General Obligation Refunding Bonds, 1.50,2.00,3.00 03/15/13 09/01/18 375,000 (2014) $ 3,740,000 $ 3,740,000 $ - $ 3,740,000 Series 2013 (3/1,9/1) 385,000 (2015) 2,305,000 (2016) 335,000 (2017) 340,000 (2018) Total General Obligation Bonds 8,105,000 8,299,300 877,622 7,421,678 Combination Tax and Revenue Bonds: Combination Tax and Revenue 4.90,5.00 09/01/05 08/01/16 115,000 (2005) 14,020,000 14,020,000 8,460,000 5,580,000 Refunding Bonds, (2/1,8/1) 2,055,000 (2006) Series 2005 2,150,000 (2007) 2,210,000 (2013) 2,350,000 (2014) 2,490,000 (2015) 2,650,000 (2016) Combination Tax and - 1,050,891 893,188 157,703 Revenue Refunding Bonds,Series 2005-Premium 85 EXHIBIT H-2 (Page 2 of 6) CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE (CONT-D.) SEPTEMBER 30, 2013 Final Bonds Interest Rates Issue Maturity Annual Retired or and(Dates) Date Date Serial Payments Authorized Issued Refunded Outstanding Combination Tax and Revenue 3.55,3.60,3.90,4.00 11/15/06 09/01/26 705,000(2007) 16,875,000 16,875,000 4,550,000 12,325,000 Certificates of Obligation, 4.10,4.20,4.25,5.00 580,000(2008) Series 2006A (3/1,9/1) 605,000(2009) 625,000(2010) 650,000(2011) 680,000(2012) 705,000(2013) 735,000(2014) 760,000(2015) 795,000(2016) 825,000(2017) 855,000(2018) 890,000(2019) 930,000(2020) 965,000(2021) 1,010,000(2022) 1,060,000(2023) 1,110,000(2024) 1,165,000(2025) 1,225,000(2026) Combination Tax and - 448,769 225,787 222,982 Revenue Certificates of Obligation, Series 2006A-Premium Combination Tax and Revenue 5.20,5.30,6.00,6.25 11/15/06 09/01/26 170,000(2007) 4,275,000 4,275,000 1,045,000 3,230,000 Certificates of Obligation, (3/1,9/1) 130,000(2008) Series 2006B 135,000(2009) 140,000(2010) 150,000(2011) 155,000(2012) 165,000(2013) 175,000(2014) 185,000(2015) 190,000(2016) 205,000(2017) 215,000(2018) 230,000(2019) 240,000(2020) 255,000(2021) 270,000(2022) 290,000(2023) 305,000(2024) 325,000(2025) 345,000(2026) Combination Tax and - 103,279 51,334 51,945 Revenue Certificates of Obligation, Series 2006B-Premium 86 EXHIBIT H-2 (Page 3 of 6) CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE (CONT-D.) SEPTEMBER 30, 2013 Final Bonds Interest Rates Issue Maturity Annual Retired or and(Dates) Date Date Serial Payments Authorized Issued Refunded Outstanding Combination Tax and Revenue 2.25,2.50,2.75,3.00, 01/15/09 10/01/28 340,000(2010) 10,820,000 10,820,000 1,585,000 9,235,000 Certificates of Obligation, 3.25,3.50,4.00,4.125, 405,000(2011) Series 2009 4.25,4.50,4.625,4.75 415,000(2012) (4/1, 10/1) 425,000(2013) 435,000(2014) 450,000(2015) 460,000(2016) 475,000(2017) 490,000(2018) 505,000(2019) 525,000(2020) 550,000(2021) 570,000(2022) 595,000(2023) 620,000(2024) 650,000(2025) 675,000(2026) 710,000(2027) 745,000(2028) 780,000(2029) Combination Tax and Revenue 5.60(2/1,8/1) 01/01/10 02/01/25 165,000(2011) 3,930,000 3,930,000 545,000 3,385,000 Certificates of Obligation, 185,000(2012) Series 2010 195,000(2013) 205,000(2014) 215,000(2015) 230,000(2016) 240,000(2017) 255,000(2018) 270,000(2019) 285,000(2020) 300,000(2021) 320,000(2022) 335,000(2023) 355,000(2024) 375,000(2025) Combination Tax and Revenue 2.00,3.00,3.50,4.00 05/01/10 08/01/18 170,000(2010) 9,830,000 9,830,000 1,050,000 8,780,000 Refunding Bonds,Series 2010 (2/1,8/1) 285,000(2012) 595,000(2013) 580,000(2014) 575,000(2015) 555,000(2016) 3,470,000(2017) 3,600,000(2018) Combination Tax and Revenue - 685,333 315,137 370,196 Refunding Bonds,Series 2010- Premium 87 EXHIBIT H-2 (Page 4 of 6) CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE (CONT-D.) SEPTEMBER 30, 2013 Final Bonds Interest Rates Issue Maturity Annual Retired or and(Dates) Date Date Serial Payments Authorized Issued Refunded Outstanding Combination Tax and Revenue 2.00,3.00,4.00 10/15/11 09/01/31 135,000 (2013) $ 3,200,000 $ 3,200,000 $ 135,000 $ 3,065,000 Certificates of Obligation, (3/1,9/1) 135,000 (2014) Series 2011 140,000 (2015) 145,000 (2016) 145,000 (2017) 150,000 (2018) 150,000 (2019) 155,000 (2020) 160,000 (2021) 165,000 (2022) 165,000 (2023) 170,000 (2024) 180,000 (2025) 185,000 (2026) 190,000 (2027) 195,000 (2028) 205,000 (2029) 210,000 (2030) 220,000 (2031) Combination Tax and Revenue - 98,494 14,091 84,403 Certificates of Obligation, Series 2011 -Premium Combination Tax and Revenue 2.00,3.00,3.25,3.375 03/01/13 09/01/33 530,000 (2014) 19,875,000 19,875,000 - 19,875,000 Certificates of Obligation, (3/1,9/1) 795,000 (2015) Series 2013 815,000 (2016) 830,000 (2017) 845,000 (2018) 860,000 (2019) 890,000 (2020) 915,000 (2021) 940,000 (2022) 970,000 (2023) 1,000,000 (2024) 1,030,000 (2025) 1,060,000 (2026) 1,090,000 (2027) 1,125,000 (2028) 1,160,000 (2029) 1,195,000 (2030) 1,235,000 (2031) 1,275,000 (2032) 1,315,000 (2033) Combination Tax and Revenue - 96,293 96,293 Certificates of Obligation,Series 2013- Premium 88 EXHIBIT H-2 (Page 5 of 6) CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE (CONT-D.) SEPTEMBER 30, 2013 Final Bonds Interest Rates Issue Maturity Annual Retired or and(Dates) Date Date Serial Payments Authorized Issued Refunded Outstanding Combination Tax and Revenue 2.00,3.00,3.125, 3.25, 08/15/13 09/01/33 505,000 (2014) 13,000,000 13,000,000 13,000,000 Certificates of Obligation, 3.625, 3.75,4.00,4.25, 500,000 (2015) Series 2013A 4.375,4.50,4.625 510,000 (2016) (3/1, 9/1) 520,000 (2017) 530,000 (2018) 545,000 (2019) 560,000 (2020) 580,000 (2021) 595,000 (2022) 615,000 (2023) 630,000 (2024) 650,000 (2025) 675,000 (2026) 700,000 (2027) 730,000 (2028) 760,000 (2029) 795,000 (2030) 830,000 (2031) 865,000 (2032) 905,000 (2033) Total Combination Tax and Revenue Bonds 95,825,000 98,308,059 18,869,537 79,458,522 Water and Sewer System 4.00,4.25,4.375,4.50 02/01/07 08/01/27 225,000 (2008) 103,495,000 103,495,000 4,530,000 98,965,000 Priority Lien Refunding Revenue (2/1,8/1) 230,000 (2009) Bonds,Series 2007 240,000 (2010) 250,000 (2011) 260,000 (2012) 3,325,000 (2013) 3,460,000 (2014) 3,610,000 (2015) 3,765,000 (2016) 3,915,000 (2017) 4,090,000 (2018) 8,140,000 (2019) 8,500,000 (2020) 8,885,000 (2021) 9,280,000 (2022) 9,700,000 (2023) 10,140,000 (2024) 10,595,000 (2025) 11,070,000 (2026) 3,815,000 (2027) 89 EXHIBIT H-2 (Page 6 of 6) CITY OF WICHITA FALLS, TEXAS COMBINED SCHEDULE OF BONDS PAYABLE (CONT-D.) SEPTEMBER 30, 2013 Final Bonds Interest Rates Issue Maturity Annual Retired or and(Dates) Date Date Serial Payments Authorized Issued Refunded Outstanding Water and Sewer System - 437,938 191,069 246,869 Priority Lien Refunding Revenue Bonds,Series 2007-Premium Total Priority Lien Revenue Bonds 103,495,000 103,932,938 4,721,069 99,211,869 Total All Bonds $ 207,425,000 $ 210,540,297 $ 24,468,228 $ 186,092,069 90 EXHIBIT H-3 CITY OF WICHITA FALLS, TEXAS DEBT SERVICE COVERAGE- REVENUE BONDS SEPTEMBER 30, 2013 Water and Sewer Revenue Bonds: Change in net position (Exhibit A-8) $ 1,110,431 Add: Depreciation and amortization $ 6,058,079 Interest expense and paying agent fees 5,300,054 Transfers out 1,918,609 13,276,742 Subtract: West Texas Utilities water revenues 597,919 Gain (loss)on sale/abandonment of capital assets (13,574) Capital contributions from developers 496,952 Transfers in 407,552 (1,488,849) Net earnings for determining debt service coverage $ 12,898,324 Priority Subordinate Lien Bonds Lien Bonds Net earnings for determining debt service coverage $ 12,898,324 Principal and interest requirements to maturity $ 137,138,737 $ - Number of years remaining to pay bonds 14 N/A Average annual principal and interest requirement 9,795,624 N/A Minimum bond covenant debt service coverage 1.25 1.10 Minimum debt service coverage requirement $ 12,244,530 $ - 12,244,530 Excess over debt service coverage requirements $ 653,794 91 EXHIBIT H-4 CITY OF WICHITA FALLS, TEXAS CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY SEPTEMBER 30, 2013 Buildings Machinery Furniture Land and and and and Construction Betterments Improvements Equipment Fixtures Infrastructure in Progress Totals Administrative services: Mayor and City Council $ $ - $ - $ 5,218 $ $ $ 5,218 City Manager 265,898 2,019 13,644 281,561 Personnel/Risk Management - 4,658 4,660 9,318 Martin Luther King Center - 786,763 6,206 9,120 802,089 Library 477,942 4,524,199 452,965 89,052 5,544,158 General Public Information - - 380,711 3,184 383,895 Building Maintenance - 2,770,246 50,349 - 2,820,595 Nondepartmental 46,347 380,754 56,131 - 483,232 Municipal Court 230,000 316,527 212,562 1,435 760,524 Legal - - 3,357 - 3,357 City Clerk 1,411 1,411 Homeland security 806,165 806,165 Training Center - - 536,254 536,254 Golf course 3,808,375 531,686 45,150 - 4,385,211 Total administrative services 4,562,664 9,576,073 2,557,938 126,313 - 16,822,988 Police 1,131,749 10,231,506 15,931,844 8,760 205,700 27,509,559 Fire 194,065 7,079,019 250,214 - - 7,523,298 Parks and recreation: Recreation 741,485 1,744,656 231,943 1,727 2,719,811 Park maintenance 4,625,642 913,482 60,708 - 5,599,832 Cemetery 141,685 - 9,423 - 151,108 Total parks and recreation 5,508,812 2,658,138 302,074 1,727 8,470,751 Accounting/finance: Accounting/finance - - - - - Information Systems 2,916,173 2,916,173 Total accounting/finance 2,916,173 2,916,173 Community development: Planning 26,833 26,833 Inspection - - 5,998 5,998 Property management 10,334,824 420,892 29,590 10,785,306 Weed and Seed program - - 7,504 7,504 Hazard Mitigation grant 170,800 - - 170,800 Total community development 10,505,624 420,892 69,925 10,996,441 Public works: Engineering 28,786 29,665 127,832 186,283 Street maintenance 10,147 100,108 34,183 - 144,438 Infrastructure 1,300,172 - - 158,100,407 159,400,579 Total public works 1,339,105 129,773 162,015 - 158,100,407 159,731,300 Health: Administration 34,820 2,877,755 336,547 14,573 - 3,263,695 General City nursing 76,411 1,123 19,678 - 97,212 Environmental health - 8,956 9,660 18,616 Lab water pollution - - 44,229 44,229 Animal reclaim center 150,737 3,321,311 30,808 - 3,502,856 Total health 261,968 6,209,145 440,922 14,573 - 6,926,608 Traffic and transportation - 31,045 130,220 - 9,556,141 9,717,406 Multi-Purpose Events Center 9,560,210 37,178,600 396,445 22,116 - 47,157,371 Wichita Falls Business Park 1,099,507 - - - - - 1,099,507 Total capital assets used in the operation of governmental funds $ 34,163,704 $ 73,514,191 $ 23,157,770 $ 173,489 $ 167,656,548 $ 205,700 $ 298,871,402 92 EXHIBIT H-5 CITY OF WICHITA FALLS, TEXAS CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY FOR THE YEAR ENDED SEPTEMBER 30, 2013 Beginning Ending Balance Balance 10/1/2012 Additions Deletions 9/30/2013 Administrative services: Mayor and City Council $ 5,218 $ $ $ 5,218 City Manager 281,561 281,561 Personnel/Risk Management 14,092 4,774 9,318 Martin Luther King Center 802,089 - - 802,089 Library 5,543,467 17,486 16,795 5,544,158 General Public Information 292,745 91,150 - 383,895 Building Maintenance 1,669,212 1,153,699 2,316 2,820,595 Nondepartmental 484,395 2,267 3,430 483,232 Municipal Court 746,785 13,739 - 760,524 Legal 1,869 1,488 3,357 City Clerk 1,411 - 1,411 Homeland security 802,766 3,399 806,165 Training center 536,254 - 536,254 Golf course 4,385,211 - 4,385,211 Total administrative services 15,567,077 1,283,228 27,315 16,822,988 Police 27,314,366 211,268 16,075 27,509,559 Fire 7,523,298 - 7,523,298 Parks and recreation: Recreation 2,619,751 101,632 1,572 2,719,811 Park maintenance 13,032,059 29,194 7,461,421 5,599,832 Cemetery 141,042 10,066 - 151,108 Total parks and recreation 15,792,852 140,892 7,462,993 8,470,751 Accounting/finance: Accounting/finance - - - - Information Systems 2,233,148 721,098 38,073 2,916,173 Total accounting/finance 2,233,148 721,098 38,073 2,916,173 Community development: Planning 28,465 - 1,632 26,833 Inspection 5,998 - - 5,998 Property management 3,227,873 7,557,433 10,785,306 Weed and Seed program 7,504 - 7,504 Hazard Mitigation Grant 170,800 - 170,800 Total community development 3,440,640 7,557,433 1,632 10,996,441 Public works: Engineering 284,172 2,318 100,207 186,283 Street maintenance 142,622 1,816 - 144,438 Infrastructure 156,596,230 3,663,955 859,606 159,400,579 Total public works 157,023,024 3,668,089 959,813 159,731,300 Health: Administration 3,282,391 5,976 24,672 3,263,695 General city nursing 98,412 - 1,200 97,212 Environmental health 19,998 1,382 18,616 Lab water pollution 44,229 - - 44,229 Animal reclaim center 3,484,191 18,665 - 3,502,856 Total health 6,929,221 24,641 27,254 6,926,608 Traffic and transportation 9,466,177 584,005 332,776 9,717,406 Multi-Purpose Events Center 45,039,473 2,122,297 4,399 47,157,371 Wichita Falls Business Park 1,099,507 - 1,099,507 Total capital assets $ 291,428,783 $ 16,312,951 $ 8,870,330 $ 298,871,402 93 EXHIBIT H-6 CITY OF WICHITA FALLS, TEXAS MUNICIPAL AIRPORT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2013 Balance Balance 10/1/2012 Additions Deletions 9/30/2013 Capital Assets: Land and betterments $ 7,278,719 $ 5,030,254 $ 783,867 $11,525,106 Buildings and improvements 1,698,058 - - 1,698,058 Machinery and equipment 32,406 - 1,443 30,963 Furniture and fixtures 36,705 - - 36,705 Construction in progress 5,596,902 6,173,742 4,847,928 6,922,716 Total capital assets 14,642,790 11,203,996 5,633,238 20,213,548 Accumulated Depreciation: Land and betterments 1,900,835 333,487 781,712 1,452,610 Buildings and improvements 1,132,485 25,763 - 1,158,248 Machinery and equipment 26,156 1,767 1,443 26,480 Furniture and fixtures 36,705 - - 36,705 Total accumulated depreciation 3,096,181 361,017 783,155 2,674,043 Net capital assets $ 11,546,609 $ 10,842,979 $4,850,083 $17,539,505 94 EXHIBIT H-7 CITY OF WICHITA FALLS, TEXAS KICKAPOO AIRPORT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2013 Balance Balance 10/1/2012 Additions Deletions 9/30/2013 Capital Assets: Land and betterments $ 8,694,086 $ 77,289 $ 1,470 $ 8,769,905 Buildings and improvements 3,259,730 5,000 - 3,264,730 Machinery and equipment 591,325 - - 591,325 Construction in progress 35,247 - - 35,247 Total capital assets 12,580,388 82,289 1,470 12,661,207 Accumulated Depreciation: Land and betterments 1,227,054 259,609 221 1,486,442 Buildings and improvements 552,752 107,349 - 660,101 Machinery and equipment 227,176 31,436 - 258,612 Total accumulated depreciation 2,006,982 398,394 221 2,405,155 Net capital assets $10,573,406 $ (316,105) $ 1,249 $ 10,256,052 95 EXHIBIT H-8 CITY OF WICHITA FALLS, TEXAS TRANSIT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2013 Balance Balance 10/1/2012 Additions Deletions 9/30/2013 Capital Assets: Land and betterments $ 193,525 $ 263,729 $ - $ 457,254 Buildings and improvements 694,102 - - 694,102 Machinery and equipment 315,410 43,070 - 358,480 Construction in progress 389,950 3,810,613 170,914 4,029,649 Total capital assets 1,592,987 4,117,412 170,914 5,539,485 Accumulated Depreciation: Land and betterments - 5,274 - 5,274 Buildings and improvements 237,290 11,126 - 248,416 Machinery and equipment 159,619 30,443 - 190,062 Total accumulated depreciation 396,909 46,843 - 443,752 Net capital assets $1,196,078 $ 4,070,569 $170,914 $ 5,095,733 96 EXHIBIT H-9 CITY OF WICHITA FALLS, TEXAS STORMWATER DRAINAGE FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2013 Balance Balance 10/1/2012 Additions Deletions 9/30/2013 Capital Assets: Drainage $ 14,498,523 $ 2,053,208 $ - $16,551,731 Land betterments 24,800 132,706 - 157,506 Machinery and equipment 72,508 16,509 - 89,017 Construction in progress 1,806,777 249,120 1,679,202 376,695 Total capital assets 16,402,608 2,451,543 1,679,202 17,174,949 Accumulated Depreciation: Drainage 653,699 206,946 224 860,421 Land betterments 517 2,466 - 2,983 Machinery and equipment 69,091 4,463 - 73,554 Total accumulated depreciation 723,307 213,875 224 936,958 Net capital assets $ 15,679,301 $ 2,237,668 $ 1,678,978 $16,237,991 97 EXHIBIT H-10 CITY OF WICHITA FALLS, TEXAS SANITATION FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2013 Balance Balance 10/1/2012 Additions Deletions 9/30/2013 Capital Assets: Land and betterments $6,146,195 $ 233,154 $ - $6,379,349 Buildings and improvements 2,669,095 195,658 - 2,864,753 Machinery and equipment 358,314 34,175 1,027 391,462 Construction in progress 127,196 99,895 127,196 99,895 Total capital assets 9,300,800 562,882 128,223 9,735,459 Accumulated Depreciation: Land and betterments 566,406 119,416 - 685,822 Buildings and improvements 1,223,174 57,084 - 1,280,258 Machinery and equipment 129,037 27,035 1,027 155,045 Total accumulated depreciation 1,918,617 203,535 1,027 2,121,125 Net capital assets $7,382,183 $ 359,347 $ 127,196 $7,614,334 98 EXHIBIT H-11 CITY OF WICHITA FALLS, TEXAS WATER AND SEWER FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2013 Balance Balance 10/1/2012 Additions Deletions 9/30/2013 Capital Assets: Land and betterments $ 24,345,465 $ - $ - $ 24,345,465 Buildings, systems and improvements 256,099,606 51,111,883 379,000 306,832,489 Machinery and equipment 4,905,207 445,051 - 5,350,258 Furniture and fixtures 1,164 - - 1,164 Motor vehicles 1,235 - - 1,235 Construction in progress 48,274,066 6,514,670 47,906,125 6,882,611 Total capital assets 333,626,743 58,071,604 48,285,125 343,413,222 Accumulated Depreciation: Land and betterments 10,066,351 243,632 - 10,309,983 Buildings, systems and improvements 88,216,750 5,639,296 355,080 93,500,966 Machinery and equipment 3,891,471 175,152 - 4,066,623 Furniture and fixtures 1,164 - - 1,164 Motor vehicles 1,235 - - 1,235 Total accumulated depreciation 102,176,971 6,058,080 355,080 107,879,971 Net capital assets $231,449,772 $ 52,013,524 $47,930,045 $235,533,251 99 EXHIBIT H-12 CITY OF WICHITA FALLS, TEXAS WATERPARK FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2013 Balance Balance 10/1/2012 Additions Deletions 9/30/2013 Capital Assets: Land and betterments $ 389,894 $ - $ - $ 389,894 Buildings and improvements 3,362,609 - - 3,362,609 Machinery and equipment 188,457 - - 188,457 Construction in progress - 37,347 - 37,347 Total capital assets 3,940,960 37,347 - 3,978,307 Accumulated Depreciation: Buildings and improvements 500,156 168,130 - 668,286 Machinery and equipment 55,038 18,846 - 73,884 Total accumulated depreciation 555,194 186,976 - 742,170 Net capital assets $ 3,385,766 $ (149,629) $ - $ 3,236,137 100 EXHIBIT H-13 CITY OF WICHITA FALLS, TEXAS FLEET MAINTENANCE FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2013 Balance Balance 10/1/2012 Additions Deletions 9/30/2013 Capital Assets: Land and betterments $ 436,269 $ - $ - $ 436,269 Buildings and improvements 4,147,445 16,357 - 4,163,802 Machinery and equipment 1,370,488 93,820 - 1,464,308 Furniture and fixtures 2,950 - - 2,950 Motor vehicles 51,546,711 2,517,375 2,666,831 51,397,255 Total capital assets 57,503,863 2,627,552 2,666,831 57,464,584 Accumulated Depreciation: Land and betterments -other 1,436 261 - 1,697 Buildings and improvements 2,162,424 87,826 - 2,250,250 Machinery and equipment 741,124 108,255 - 849,379 Furniture and fixtures 2,950 - - 2,950 Motor vehicles 33,451,297 3,705,590 2,665,759 34,491,128 Total accumulated depreciation 36,359,231 3,901,932 2,665,759 37,595,404 Net capital assets $21,144,632 $ (1,274,380) $ 1,072 $19,869,180 101 EXHIBIT H-14 CITY OF WICHITA FALLS, TEXAS DUPLICATING SERVICES FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2013 Balance Balance 10/1/2012 Additions Deletions 9/30/2013 Capital Assets: Machinery and equipment $ 14,047 $ - $ 3,430 $ 10,617 Accumulated Depreciation: Machinery and equipment 8,837 1,174 3,430 6,581 Net capital assets $ 5,210 $ (1,174) $ - $ 4,036 102 EXHIBIT H-15 CITY OF WICHITA FALLS, TEXAS INFORMATION TECHNOLOGY FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2013 Balance Balance 10/1/2012 Additions Deletions 9/30/2013 Capital Assets: Machinery and equipment $ 211,593 $ 721,098 $ - $ 932,691 Accumulated Depreciation: Machinery and equipment 21,159 114,429 - 135,588 Net capital assets $ 190,434 $ 606,669 $ - $ 797,103 103 EXHIBIT H-16 CITY OF WICHITA FALLS, TEXAS WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2013 Balance Balance 10/1/2012 Additions Deletions 9/30/2013 Capital Assets: Land and betterments $ 1,469,797 $ - $ - $ 1,469,797 Buildings and improvements 957,191 - - 957,191 Total capital assets 2,426,988 - - 2,426,988 Accumulated Depreciation: Buildings and improvements 124,435 19,143 - 143,578 Net capital assets $ 2,302,553 $ (19,143) $ - $ 2,283,410 104 Statistical Section (Unaudited) This part of the City of Wichita Falls, Texas' comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. Contents Page Financial Trends 105 These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time. Revenue Capacity ill These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt Capacity 115 These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. Demographic and Economic Information 120 These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. Operating Information 122 These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. EXHIBIT 1-1 CITY OF WICHITA FALLS, TEXAS NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 Governmental activities Net investment in capital assets $ 90,045,882 $ 127,366,654 $ 132,958,014 $ 133,737,880 $ 139,868,969 $ 138,550,295 $ 135,957,279 $ 138,876,124 $ 139,058,565 $ 138,319,208 Restricted 626,256 1,200,845 1,373,786 1,541,859 1,631,963 1,186,730 5,006,079 6,048,238 6,931,511 6,248,074 Unrestricted 25,286,103 20,500,308 20,689,055 27,487,733 21,189,932 14,880,792 9,263,524 7,189,782 7,453,791 6,661,101 Total governmental activities net position $ 115,958,241 $ 149,067,807 $ 155,020,855 $ 162,767,472 $ 162,690,864 $ 154,617,817 $ 150,226,882 $ 152,114,144 $ 153,443,867 $ 151,228,383 Business-type activities Net investment in capital assets $ 99,419,642 $ 112,568,870 $ 120,263,391 $ 132,852,246 $ 143,023,239 $ 156,170,924 $ 172,590,416 $ 172,634,321 $ 185,087,683 $ 198,540,484 Restricted 15,436,872 15,679,474 16,234,804 12,681,053 12,945,497 12,958,909 12,942,163 11,734,924 11,374,316 11,881,663 Unrestricted 10,631,269 7,698,134 11,962,104 12,513,454 12,810,854 10,712,005 10,734,533 23,006,940 28,157,150 25,390,068 Total business-type activities net position $ 125,487,783 $ 135,946,478 $ 148,460,299 $ 158,046,753 $ 168,779,590 $ 179,841,838 $ 196,267,112 $ 207,376,185 $ 224,619,149 $ 235,812,215 Primary government Net investment in capital assets $ 189,465,524 $ 239,935,524 $ 253,221,405 $ 266,590,126 $ 282,892,208 $ 294,721,219 $ 308,547,695 $ 311,510,445 $ 324,146,248 $ 336,859,692 Restricted 16,063,128 16,880,319 17,608,590 14,222,912 14,577,460 14,145,639 17,948,242 17,783,162 18,305,827 18,129,737 Unrestricted 35,917,372 28,198,442 32,651,159 40,001,187 34,000,786 25,592,797 19,998,057 30,196,722 35,610,941 32,051,169 Total primary government net position $ 241,446,024 $ 285,014,285 $ 303,481,154 $ 320,814,225 $ 331,470,454 $ 334,459,655 $ 346,493,994 $ 359,490,329 $ 378,063,016 $ 387,040,598 105 EXHIBIT 1-2 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS CHANGES IN NET POSITION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-13 Expenses Governmental activities: Administrative services $ 9,524,291 $ 9,174,786 $ 10,648,044 $ 10,363,134 $ 11,662,086 $ 12,026,311 $ 10,043,369 $ 10,881,691 $ 11,934,804 $ 12,782,404 Police 16,283,542 17,107,502 17,733,480 18,587,210 20,527,967 21,008,696 21,133,526 21,822,371 22,103,892 22,767,560 Fire 10,058,363 10,337,851 10,825,964 11,295,623 12,492,842 13,028,146 13,065,768 13,291,048 13,523,616 14,226,064 Parks and recreation 4,164,247 4,220,079 4,210,463 4,478,311 5,107,579 5,757,363 5,687,527 5,405,955 5,152,616 5,579,717 Accounting/finance 1,851,988 1,841,475 1,843,810 1,893,389 2,231,952 2,473,024 2,428,055 2,534,141 975,863 924,240 Community development 7,897,167 7,181,397 6,293,156 6,573,917 6,921,352 7,584,142 7,243,744 7,084,165 6,777,614 6,729,171 Public works 6,404,132 6,742,355 7,706,209 8,616,348 8,314,596 8,282,184 8,035,626 7,613,089 7,956,752 7,747,847 Health 4,523,907 4,435,702 4,409,374 4,736,162 4,873,643 4,995,764 4,931,859 4,911,165 5,021,625 5,167,794 Traffic and transportation 1,983,322 2,181,799 2,527,270 2,590,309 2,679,026 2,499,869 2,525,097 2,451,154 2,510,936 2,757,545 Multi-Purpose Events Center 1,589,670 2,015,329 2,166,331 4,291,434 4,335,968 4,027,612 4,181,379 4,295,871 3,895,665 4,136,952 Interest and fees on long-term debt 921,705 843,358 721,762 1,308,748 1,405,383 1,620,854 1,781,245 1,765,406 1,711,328 2,122,969 Total governmental activities expenses 65,202,334 66,081,633 69,085,863 74,734,585 80,552,394 83,303,965 81,057,195 82,056,056 81,564,711 84,942,263 Business-type activities: Golf 760,705 779,151 901,454 - - - - - - - Municipal Airport 250,807 243,414 281,117 276,368 310,980 289,195 337,946 435,774 529,827 655,452 Kickapoo Airport 338,957 377,299 574,929 966,961 1,245,021 1,354,624 1,108,515 1,262,976 1,419,681 1,495,562 Transit 1,028,491 1,240,131 1,280,540 1,373,283 1,793,369 1,616,322 1,602,362 1,847,362 1,903,560 1,938,827 Sanitation 7,418,146 7,715,572 8,059,991 8,638,374 9,199,341 8,509,153 9,152,130 8,959,973 8,904,795 9,236,474 Water and Sewer 24,721,561 25,604,413 26,380,183 26,764,879 28,126,920 30,165,844 30,250,390 32,969,719 28,996,520 30,135,738 Stormwater drainage 112,082 125,989 328,833 355,697 407,035 477,415 785,543 533,715 406,570 430,012 Waterpark - - - - - - 1,253,557 1,399,255 1,375,832 1,397,270 Total business-type activities expenses 34,630,749 36,085,969 37,807,047 38,375,562 41,082,666 42,412,553 44,490,443 47,408,774 43,536,785 45,289,335 Total primary government expenses $ 99,833,083 $ 102,167,602 $ 106,892,910 $ 113,110,147 $ 121,635,060 $ 125,716,518 $ 125,547,638 $ 129,464,830 $ 125,101,496 $ 130,231,598 Program Revenues Governmental activities: Charges for services: Administrative services $ 3,631,020 $ 3,640,715 $ 3,691,411 $ 3,327,519 $ 3,211,546 $ 4,267,891 $ 4,414,667 $ 4,499,281 $ 4,390,463 $ 4,304,737 Police 372,510 361,201 402,583 700,216 600,020 470,020 495,459 527,007 541,201 624,272 Fire 3,233 1,458 5,195 5,434 2,612 4,369 2,042 11,400 14,613 18,459 Parks and recreation 479,204 455,861 473,121 443,827 517,707 513,682 515,008 513,746 525,505 524,519 Accounting/finance - - - - - - - 65,000 - - Community development 1,265,897 1,078,293 1,195,203 1,138,671 1,124,534 891,803 1,042,574 1,017,718 942,649 1,131,684 Public works - - 48,871 7,286 100,000 165,363 2,600 2,740 24,420 116,035 Health 668,491 711,399 807,002 803,115 864,874 888,890 908,415 965,741 1,075,277 1,073,172 Traffic and transportation 214,266 195,585 292,234 212,911 154,941 164,350 201,961 184,138 217,262 126,163 Multi-Purpose Events Center - - - 2,215,411 2,141,584 1,789,269 1,767,398 1,644,569 1,656,358 1,597,702 Operating grants and contributions 11,968,460 14,734,689 11,109,618 12,298,595 11,468,654 10,891,021 14,606,807 13,268,583 9,868,484 11,157,348 Capital grants and contributions 6,970,138 1,176,107 2,667,389 3,218,003 3,097,319 1,631,109 6,145,852 2,315,245 8,066,065 4,394,038 Total governmental activities program revenues 25,573,219 22,355,308 20,692,627 24,370,988 23,283,791 21,677,767 30,102,783 25,015,168 27,322,297 25,068,129 106 EXHIBIT 1-2 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS CHANGES IN NET POSITION (CONT'D.) LAST TEN FISCAL YEARS(UNAUDITED) Fiscal Year 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-13 Business-type activities: Charges for services: Golf 677,498 622,434 828,055 - - - - - - - Municipal Airport 416,573 446,388 448,384 441,471 430,561 544,332 624,298 681,639 716,608 769,557 Kickapoo Airport 385,871 270,194 347,761 789,522 1,025,300 745,444 798,034 988,457 1,153,038 1,255,153 Transit 194,388 162,018 214,771 206,109 224,856 229,483 274,577 367,374 405,852 410,737 Sanitation 8,920,801 9,133,955 9,517,673 9,917,386 10,939,617 12,025,478 11,826,882 11,911,026 12,807,160 12,606,675 Water and Sewer 27,857,286 30,208,286 33,436,585 30,031,969 33,042,845 33,888,553 33,264,688 40,679,751 36,771,008 32,798,786 Stormwater drainage 1,036,450 1,042,278 1,209,196 1,267,533 1,318,340 1,252,544 1,272,430 2,485,346 2,552,650 2,503,255 Waterpark - - - - - - 1,283,919 1,633,155 1,475,842 1,398,164 Operating grants and contributions 937,025 926,088 1,251,770 1,026,685 1,389,202 1,142,191 2,312,062 1,323,581 2,371,658 3,787,014 Capital grants and contributions 376,437 862,398 455,217 580,729 1,021,644 456,743 108,471 192,620 181,759 1,339,265 Total business-type activities program revenues 40,802,329 43,674,039 47,709,412 44,261,404 49,392,365 50,284,768 51,765,361 60,262,949 58,435,575 56,868,606 Total primary government program revenues $ 66,375,548 $ 66,029,347 $ 68,402,039 $ 68,632,392 $ 72,676,156 $ 71,962,535 $ 81,868,144 $ 85,278,117 $ 85,757,872 $ 81,936,735 Net(Expense)/Revenue Governmental activities $ (39,629,115) $ (43,726,325) $ (48,393,236) $ (50,363,597) $ (57,268,603) $ (61,626,198) $ (50,954,412) $ (57,040,888) $ (54,242,414) $ (59,874,134) Business-type activities 6,171,580 7,588,070 9,902,365 5,885,842 8,309,699 7,872,215 7,274,918 12,854,175 14,898,790 11,579,271 Total primary government net expense $ (33,457,535) $ (36,138,255) $ (38,490,871) $ (44,477,755) $ (48,958,904) $ (53,753,983) $ (43,679,494) $ (44,186,713) $ (39,343,624) $ (48,294,863) General Revenues and Other Changes in Net Position Governmental activities: Taxes: Property tax $ 21,404,857 $ 22,578,788 $ 23,522,746 $ 24,975,158 $ 26,160,116 $ 27,869,849 $ 27,570,092 $ 28,556,762 $ 28,625,696 $ 29,107,168 Sales tax 17,192,703 17,845,505 19,272,204 20,068,529 21,353,896 20,451,906 20,033,820 21,082,993 21,406,823 22,062,365 Franchise fees 5,218,860 5,191,741 5,740,202 5,780,311 5,598,406 5,570,399 5,593,573 5,593,781 5,574,882 5,423,680 Hotel occupancy tax 1,278,102 1,262,518 1,333,747 1,417,397 1,560,353 1,506,423 1,553,674 1,572,105 1,677,100 1,578,764 Beverage tax 202,841 204,727 234,075 236,367 251,386 249,121 246,541 248,350 207,735 230,728 Bingo tax 209,825 164,128 178,666 166,223 168,864 109,739 77,883 70,747 61,696 40,122 Investment earnings 379,150 754,935 1,409,188 2,684,388 1,727,671 415,156 129,653 49,239 54,579 53,244 Gain (loss)on sale of capital assets (24,061) - - - (397,404) - - - - - Miscellaneous 482,908 166,648 172,500 712,358 242,811 134,983 160,949 - 326,861 636,417 Transfers 2,241,628 473,644 2,482,958 1,972,819 525,898 (2,439,625) (8,802,705) 1,754,171 (2,363,233) (1,473,837) Total governmental activities 48,586,813 48,642,634 54,346,286 58,013,550 57,191,997 53,867,951 46,563,480 58,928,148 55,572,139 57,658,651 Business-type activities: Investment earnings 1,764,311 3,417,875 5,094,418 5,575,703 2,949,036 602,872 194,428 50,858 39,865 27,902 Miscellaneous 518,133 (73,611) - 199,174 - 147,536 153,223 (41,792) (58,924) 149,173 Transfers (2,241,628) (473,644) (2,482,958) (1,972,819) (525,898) 2,439,625 8,802,705 (1,754,171) 2,363,233 1,473,837 Total business-type activities 40,816 2,870,620 2,611,460 3,802,058 2,423,138 3,190,033 9,150,356 (1,745,105) 2,344,174 1,650,912 Total primary government $ 48,627,629 $ 51,513,254 $ 56,957,746 $ 61,815,608 $ 59,615,135 $ 57,057,984 $ 55,713,836 $ 57,183,043 $ 57,916,313 $ 59,309,563 Change in Net Position Governmental activities $ 8,957,698 $ 4,916,309 $ 5,953,050 $ 7,649,953 $ (76,606) $ (7,758,247) $ (4,390,932) $ 1,887,260 $ 1,329,725 $ (2,215,483) Business-type activities 6,212,396 10,458,690 12,513,825 9,687,900 10,732,837 11,062,248 16,425,274 11,109,070 17,242,964 13,230,183 Total primary government $ 15,170,094 $ 15,374,999 $ 18,466,875 $ 17,337,853 $ 10,656,231 $ 3,304,001 $ 12,034,342 $ 12,996,330 $ 18,572,689 $ 11,014,700 107 EXHIBIT 1-3 CITY OF WICHITA FALLS, TEXAS FUND BALANCES, GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-13 General Fund Reserved $ 1,516,079 $ 2,439,595 $ 2,393,129 $ 3,161,776 $ 2,686,432 $ 1,499,613 $ 1,392,329 $ - $ - $ - Unreserved 9,507,595 10,608,472 11,503,795 15,569,840 14,500,836 13,042,044 14,294,519 - - - Nonspendable - - - - - - - 478,617 352,835 384,574 Assigned - - - - - - - 579,022 1,010,976 958,924 Unassigned - - - - - - - 16,002,361 16,570,675 16,226,597 Total general fund $ 11,023,674 $ 13,048,067 $ 13,896,924 $ 18,731,616 $ 17,187,268 $ 14,541,657 $ 15,686,848 $ 17,060,000 $ 17,934,486 $ 17,570,095 All other Governmental Funds Reserved $ 11,092,483 $ 5,102,543 $ 3,179,513 $ 2,371,514 $ 2,888,944 $ 6,254,620 $ 11,753,749 $ - $ - $ - Unreserved, reported in: Special revenue funds 4,673,755 4,299,100 4,746,615 7,089,584 6,180,559 4,808,127 1,713,168 - - - Capital projects funds 3,394,688 3,738,484 4,857,539 23,458,510 15,033,333 10,963,970 1,850,806 - - - Nonspendable - - - - - - - 81,376 89,668 84,940 Restricted - - - - - - - 10,927,373 10,744,065 26,934,100 Committed - - - - - - - 1,762,248 2,305,013 2,896,812 Unassigned - - - - - - - (24,418) (269,288) (269,288) Total all other governmental funds $ 19,160,926 $ 13,1401127 $ 12,783,667 $ 32,919,608 $ 24,102,836 $ 22,026,717 $ 15,317,723 $ 12,746,579 $ 12,869,458 $ 29,646,564 Note : GASB 54 was implemented in 2010-11,which changed the terminology for fund balances. Prior years were not reclassified. 108 EXHIBIT 1-4 CITY OF WICHITA FALLS, TEXAS CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-13 Revenues Taxes $ 45,512,949 $ 47,236,518 $ 50,228,509 $ 52,637,318 $ 55,155,574 $ 55,752,982 $ 55,006,901 $ 57,122,006 $ 57,607,312 $ 58,613,615 Charges for services 2,452,353 2,480,148 2,597,044 3,202,699 3,270,930 3,689,717 3,715,832 3,886,160 3,710,371 3,422,621 Licenses and permits 2,292,695 2,218,119 2,206,023 2,215,813 2,116,140 1,887,434 1,990,328 2,064,972 2,002,559 2,234,081 Fines and forfeitures 2,189,001 2,161,782 2,481,816 2,127,062 1,964,391 1,970,612 2,214,884 2,209,026 2,409,792 2,435,625 Intergovernmental revenue 11,444,840 13,003,816 9,682,237 11,136,433 8,428,310 9,287,371 14,783,860 11,041,679 14,488,236 11,722,524 Contributions 7,493,758 2,906,980 4,094,770 4,366,961 6,137,663 3,234,759 5,711,904 4,542,149 3,446,313 3,828,862 Miscellaneous revenue 2,007,303 1,985,383 2,816,865 6,664,315 5,369,689 3,804,438 3,597,927 3,216,734 3,261,049 3,463,425 Total revenues 73,392,899 71,992,746 74,107,264 82,350,601 82,442,697 79,627,313 87,021,636 84,082,726 86,925,632 85,720,753 Expenditures Administrative services 9,330,631 8,701,521 10,103,642 9,965,494 10,873,576 11,315,351 9,694,632 10,235,720 12,158,781 12,677,867 Police 15,996,964 16,731,373 17,228,066 18,068,168 19,524,824 20,182,150 20,182,168 20,235,012 20,545,965 20,884,744 Fire 9,851,203 10,196,605 10,739,651 11,238,422 12,206,774 12,833,183 12,671,757 12,897,810 13,277,876 13,807,699 Parks and recreation 4,016,394 4,106,476 4,110,013 4,373,460 4,841,597 5,457,410 5,359,692 4,966,060 4,833,743 5,157,417 Accounting/finance 1,757,006 1,754,186 1,765,350 1,811,690 2,087,572 2,327,608 2,279,241 2,367,814 845,076 793,960 Community development 8,137,672 7,282,012 6,355,136 6,652,162 6,925,581 7,433,617 7,315,631 7,124,851 6,829,018 6,760,826 Public works 4,488,704 4,653,539 5,128,384 6,038,790 5,606,784 5,452,172 5,355,585 5,170,624 5,777,249 5,325,013 Health 4,452,507 4,391,270 4,407,758 4,728,414 4,775,418 4,950,213 4,896,841 4,796,934 4,894,351 5,004,381 Traffic and transportation 1,768,336 1,937,424 2,309,854 2,355,249 2,459,070 2,292,890 2,245,038 2,233,311 2,194,962 2,468,051 Multi-Purpose Events Center 783,244 1,205,153 1,355,846 3,498,189 3,506,091 3,208,713 3,358,470 3,436,052 3,062,507 3,365,932 Capital outlay 8,235,652 10,171,128 7,244,115 7,093,636 15,219,394 12,088,928 8,758,421 7,600,491 8,537,049 7,867,468 Debt service - principal 2,970,000 3,050,000 3,190,000 2,510,000 2,395,000 2,065,000 2,240,000 2,115,000 2,270,000 2,515,000 Debt service - interest 900,526 852,624 731,921 1,271,106 1,456,540 1,364,831 1,781,176 1,934,935 1,604,392 1,618,299 Debt service - bond issuance costs - - - - - - - - 137,461 310,777 Total expenditures 72,688,839 75,033,311 74,669,736 79,604,780 91,878,221 90,972,066 86,138,652 85,114,614 86,968,430 88,557,434 Excess of revenues over(under) expenditures 704,060 (3,040,565) (562,472) 2,745,821 (9,435,524) (11,344,753) 882,984 (1,031,888) (42,798) (2,836,681) Other Financing Sources (Uses) Proceeds from bonds 7,549,000 - - 21,702,048 - 10,840,779 3,930,000 - 7,836,338 23,869,261 Capital lease proceeds - - - - - - - - 1,452,760 2,666,243 Payment to refunded bonds escrow agent - - - - - - - - (4,484,698) (3,831,570) Transfers in 7,142,007 6,922,585 3,282,459 5,922,091 7,268,938 5,530,309 5,676,896 6,239,483 6,411,855 7,181,518 Transfer out (6,393,643) (7,878,421) (2,227,586) (5,401,565) (8,194,534) (9,433,265) (16,053,685) (6,405,589) (10,176,091) (10,636,058) Total other financing sources (uses) 8,297,364 (955,836) 1,054,873 22,222,574 (925,596) 6,937,823 (6,446,789) (166,106) 1,040,164 19,249,394 Net change in fund balances $ 9,001,424 $ (3,996,401) $ 492,401 $ 24,968,395 $(10,361,120) $ (4,406,930) $ (5,563,805) $ (1,197,994) $ 997,366 $ 16,412,713 Debt service as a percentage of noncapital expenditures 6.01% 6.02% 5.82% 5.21% 5.02% 4.35% 5.20% 5.22% 4.94% 5.12% 109 EXHIBIT 1-5 CITY OF WICHITA FALLS, TEXAS TAX REVENUES BY SOURCE, GOVERNMENTAL FUNDS- LAST TEN FISCAL YEARS(UNAUDITED) Fiscal Hotel Year Property Sales Franchise Occupancy Beverage Bingo Total 2003-2004 $ 21,410,615 $ 17,192,706 $ 5,218,860 $ 1,278,102 $ 202,841 $ 209,825 $45,512,949 2004-2005 22,567,902 17,845,502 5,191,741 1,262,518 204,727 164,128 47,236,518 2005-2006 23,469,615 19,272,204 5,740,202 1,333,747 234,075 178,666 50,228,509 2006-2007 24,968,481 20,068,529 5,780,311 1,417,397 236,367 166,233 52,637,318 2007-2008 26,217,499 21,353,896 5,598,406 1,565,523 251,386 168,864 55,155,574 2008-2009 27,865,394 20,451,906 5,570,399 1,506,423 249,121 109,739 55,752,982 2009-2010 27,501,412 20,033,820 5,593,573 1,513,484 246,541 77,883 54,966,713 2010-2011 28,554,029 21,082,994 5,593,781 1,572,105 248,350 70,747 57,122,006 2011-2012 28,679,076 21,406,823 5,574,882 1,677,100 207,735 61,696 57,607,312 2012-2013 29,277,956 22,062,365 5,423,680 1,578,764 230,728 40,122 58,613,615 110 EXHIBIT 1-6 CITY OF WICHITA FALLS, TEXAS ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY- LAST TEN FISCAL YEARS(UNAUDITED) Personal Ratio of Total Real Property Property Total Total Assessed to Fiscal Assessed Assessed Assessed Direct Estimated Total Estimated Year Value Value Value Tax Rate Actual Value Actual Value 2003-2004 $2,901,708,013 $ 629,284,576 $3,530,992,589 $0.59246 $3,530,992,589 100.00% 2004-2005 3,047,463,928 632,056,253 3,679,520,181 0.59246 3,679,520,181 100.00% 2005-2006 2,992,717,987 726,512,178 3,719,230,165 0.59246 3,719,230,165 100.00% 2006-2007 3,208,236,037 744,353,082 3,952,589,119 0.59246 3,952,589,119 100.00% 2007-2008 3,389,094,572 802,449,151 4,191,543,723 0.59246 4,191,543,723 100.00% 2008-2009 3,553,825,553 877,030,381 4,430,855,934 0.59526 4,430,855,934 100.00% 2009-2010 3,622,501,148 803,697,677 4,426,198,825 0.60526 4,426,198,825 100.00% 2010-2011 3,693,399,778 728,642,824 4,422,042,602 0.62526 4,422,042,602 100.00% 2011-2012 3,714,449,662 716,365,316 4,430,814,978 0.62526 4,430,814,978 100.00% 2012-2013 3,749,608,055 715,113,536 4,464,721,591 0.63526 4,464,721,591 100.00% 111 EXHIBIT 1-7 CITY OF WICHITA FALLS, TEXAS DIRECT AND OVERLAPPING PROPERTY TAX RATES- LAST TEN FISCAL YEARS(UNAUDITED) Tax Rates Per$100 Valuation Fiscal City of Wichita Falls Wichita County Burkburnett ISD(1) Year M&O AS Total M&O AS Total M&O AS Total 2003-2004 $ 0.53 $ 0.06 $ 0.59 $ 0.43 $ 0.02 $ 0.45 $ 1.50 $ 0.14 $ 1.64 2004-2005 0.54 0.05 0.59 0.44 0.02 0.46 1.50 0.14 1.64 2005-2006 0.55 0.04 0.59 0.44 0.02 0.46 1.50 0.13 1.63 2006-2007 0.57 0.02 0.59 0.43 0.02 0.45 1.37 0.13 1.50 2007-2008 0.57 0.02 0.59 0.43 0.01 0.44 1.17 0.11 1.28 2008-2009 0.58 0.02 0.60 0.43 - 0.43 1.17 0.14 1.31 2009-2010 0.59 0.02 0.61 0.48 0.48 1.17 0.14 1.31 2010-2011 0.61 0.01 0.62 0.52 0.52 1.17 0.14 1.31 2011-2012 0.61 0.01 0.62 0.53 0.53 1.17 0.14 1.31 2012-2013 0.62 0.01 0.63 0.52 - 0.52 1.17 0.13 1.30 City View ISD(2) Iowa Park CISD(3) Wichita Falls ISD(4) Grand M&O AS Total M&O AS Total M&O AS Total Total 2003-2004 $ 1.50 $ 0.19 $ 1.69 $ 1.50 $ 0.08 $ 1.58 $ 1.50 $ 0.06 $ 1.56 $ 7.51 2004-2005 1.50 0.23 1.73 1.49 0.09 1.58 1.50 0.06 1.56 7.56 2005-2006 1.50 0.25 1.75 1.49 0.09 1.58 1.50 0.06 1.56 7.57 2006-2007 1.50 0.23 1.73 1.36 0.09 1.45 1.33 0.06 1.39 7.11 2007-2008 1.37 0.23 1.60 1.04 0.08 1.12 1.04 0.15 1.19 6.22 2008-2009 1.04 0.22 1.26 1.04 0.08 1.12 1.04 0.16 1.20 5.92 2009-2010 1.17 0.23 1.40 1.04 0.11 1.15 1.04 0.16 1.20 6.15 2010-2011 1.17 0.25 1.42 1.04 0.10 1.14 1.04 0.16 1.20 6.21 2011-2012 1.17 0.25 1.42 1.04 0.09 1.13 1.04 0.17 1.21 6.22 2012-2013 1.17 0.25 1.42 1.04 0.24 1.28 1.04 0.17 1.21 6.36 Notes: (1) Burkburnett Independent School District-25%in Wichita Falls city limits (2) City View Independent School District-90%in Wichita Falls city limits (3) Iowa Park Consolidated Independent School District-2%in Wichita Falls city limits (4) Wichita Falls Independent School District-99%in Wichita Falls city limits 112 EXHIBIT 1-8 CITY OF WICHITA FALLS, TEXAS PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO SEPTEMBER 30, 2013 2012-13 2003-2004 Percentage Percentage Taxable of Total Taxable of Total Assessed Assessed Assessed Assessed Taxpayer Value Rank Valuation Value Rank Valuation GGP-Sikes Senter LLC $ 52,243,735 1 1.17% $ 47,622,240 1 1.35% Oncor Electric Delivery Co 37,907,410 2 0.85% 44,060,747 2 1.25% Wal-Mart Stores Texas LP 21,736,750 3 0.49% 34,683,131 4 0.98% Wal-Mart Stores East Inc 20,364,442 4 0.46% - N/A 0.00% Quail Creek Crossing Ltd 19,848,000 5 0.44% - N/A 0.00% Southwestern Bell 17,021,110 6 0.38% 39,378,848 3 1.12% North American Pipe Corp 13,587,762 7 0.30% - N/A 0.00% Kell West Regional Hospital 12,577,717 8 0.28% 15,758,361 5 0.45% Atmos Energy/Mid-Tex Division 12,358,307 9 0.28% - N/A 0.00% Lowe's Home Centers, Inc. 12,009,365 10 0.27% 12,894,119 9 0.37% Clinics of North Texas - N/A 0.00% 13,451,980 6 0.38% Time Warner N/A 0.00% 13,422,908 7 0.38% Southwestern Bell Wireless LLC N/A 0.00% 13,023,779 8 0.37% Sams East Inc - N/A 0.00% 9,553,470 10 0.27% Totals $ 219,654,598 4.92% $ 243,849,583 6.92% 113 EXHIBIT 1-9 CITY OF WICHITA FALLS, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS- LAST TEN FISCAL YEARS(UNAUDITED) Collected within the Taxes Levied Fiscal Year of the Levy Collections Total Collections to Date Fiscal for the Percentage in Subsequent Percentage Year Fiscal Year Amount of Levy Years Amount of Levy 2003-2004 $20,039,039 $ 19,646,529 98.04% $ 320,872 $ 19,967,401 99.64% 2004-2005 20,919,473 20,494,272 97.97% 320,464 20,814,736 99.50% 2005-2006 22,034,951 21,612,888 98.08% 311,425 21,924,313 99.50% 2006-2007 23,421,270 23,043,185 98.39% 282,633 23,325,818 99.59% 2007-2008 24,833,219 24,408,683 98.29% 286,891 24,695,574 99.45% 2008-2009 26,375,113 25,905,854 98.22% 341,579 26,247,433 99.52% 2009-2010 26,752,242 26,166,043 97.81% 342,125 26,508,168 99.09% 2010-2011 27,649,264 27,179,642 98.30% 240,247 27,419,889 99.17% 2011-2012 27,704,114 27,306,706 98.57% 188,089 27,494,795 99.24% 2012-2013 28,362,591 27,906,520 98.39% - 27,906,520 98.39% 114 EXHIBIT 1-10 CITY OF WICHITA FALLS, TEXAS RATIOS OF OUTSTANDING DEBT BY TYPE- LAST TEN FISCAL YEARS (UNAUDITED) Governmental Activities Business-type Activities General Combination Capital Utility Combination Capital Total Percentage Fiscal Obligation Tax and Note Lease System Tax and Note Leases Primary of Personal Per Year Bonds Revenue Bonds Payable Payable Revenue Bonds Revenue Bonds Payable Payable Government Income Capita 2003-2004 $ 13,060,000 $ 6,810,000 $ 234,186 $ - $ 144,747,898 $ 19,900,889 $ 781,974 $ - $ 185,534,947 4.56% $ 1,769.98 2004-2005 10,725,000 6,095,000 178,149 - 126,538,189 33,975,588 755,438 - 178,267,364 4.16% 1,667.98 2005-2006 8,270,000 5,360,000 120,443 - 124,824,242 30,961,933 728,039 - 170,264,657 3.81% 1,581.87 2006-2007 7,390,000 25,396,016 61,093 - 123,869,328 27,864,844 699,748 - 185,281,029 4.01% 1,721.38 2007-2008 6,480,000 23,867,228 - - 121,887,613 24,479,232 670,537 - 177,384,610 3.71% 1,644.78 2008-2009 5,535,000 33,524,726 - - 119,841,741 21,004,768 640,377 722,464 181,269,076 7.34% 1,711.13 2009-2010 4,790,000 35,918,687 - - 107,501,744 27,744,748 609,234 549,621 177,114,034 8.03% 1,694.01 2010-2011 4,450,000 34,104,162 - - 105,277,778 23,969,757 577,079 371,696 168,750,472 6.10% 1,614.02 2011-2012 4,116,110 35,503,123 - 1,452,760 102,566,093 19,798,342 543,877 1,704,341 165,684,646 7.11% 1,594.18 2012-2013 5,491,678 51,570,623 - 3,833,640 99,211,869 27,887,899 509,596 1,261,663 189,766,968 7.59% 1,815.05 115 EXHIBIT 1-11 CITY OF WICHITA FALLS, TEXAS RATIOS OF GENERAL BONDED DEBT OUTSTANDING - LAST TEN FISCAL YEARS (UNAUDITED) Governmental Activities Percentage of General Combination Actual Taxable Fiscal Obligation Tax and Value of Per Year Bonds Revenue Bonds Total Property Capita 2003-2004 $ 13,060,000 $ 6,810,000 $ 19,870,000 0.56% $ 189.56 2004-2005 10,725,000 6,095,000 16,820,000 0.46% 157.38 2005-2006 8,270,000 5,360,000 13,630,000 0.37% 126.63 2006-2007 7,390,000 25,396,016 32,786,016 0.83% 304.60 2007-2008 6,480,000 23,867,228 30,347,228 0.72% 281.39 2008-2009 5,535,000 33,524,726 39,059,726 0.88% 368.71 2009-2010 4,790,000 35,918,687 40,708,687 0.92% 389.36 2010-2011 4,450,000 34,104,162 38,554,162 0.87% 368.75 2011-2012 4,116,110 35,503,123 39,619,233 0.89% 381.21 2012-2013 5,491,678 51,570,623 57,062,301 1.28% 545.78 116 EXHIBIT 1-12 CITY OF WICHITA FALLS, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT (UNAUDITED) SEPTEMBER 30, 2013 Gross Percentage Amount Governmental Applicable Applicable Activities to City of to City of Debt(1) Wichita Falls (2) Wichita Falls Direct: City of Wichita Falls $ 60,895,941 100% $ 60,895,941 Overlapping: Wichita County 195,330 100% 195,330 Burkburnett Independent School District 8,685,913 25% 2,171,478 City View Independent School District 9,525,661 90% 8,573,095 Iowa Park Consolidated Independent School District 17,549,225 2% 350,985 Wichita Falls Independent School District 55,266,545 99% 54,713,880 Total overlapping 91,222,674 66,004,767 Total direct and overlapping bonded debt $ 152,118,615 $126,900,708 Sources: (1) Listed taxing jurisdictions (2) City of Wichita Falls Planning Department calculated based on percentage of taxing entity within the City of Wichita Falls city limits. 117 EXHIBIT 1-13 CITY OF WICHITA FALLS, TEXAS COMPUTATION OF LEGAL DEBT MARGIN- LAST TEN FISCAL YEARS(UNAUDITED) Total assessed property value per 2012 tax roll $ 4,464,721,591 Maximum tax rate* $ 2.25/$100 Current tax rate for 2012 tax year .63526/$100 Maximum tax rate in excess of 2012 tax rate 1.61474/$100 Total legal debt margin $ 72,093,645 Fiscal Year 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 Assessed value $ 3,530,992,589 $ 3,679,520,181 $ 3,719,230,165 $ 3,952,589,119 $ 4,191,543,723 $ 4,430,855,934 $ 4,426,198,825 $ 4,422,042,602 $ 4,430,814,978 $ 4,464,721,591 Maximum tax rate $ 2.25/$100 $ 2.25/$100 $ 2.25/$100 $ 2.25/$100 $ 2.25/$100 $ 2.25/$100 $ 2.25/$100 $ 2.25/$100 $ 2.25/$100 $ 2.25/$100 Current tax rate .59246/$100 .59246/$100 .59246/$100 .59246/$100 .59246/$100 .59526/$100 .60526/$100 .62526/$100 .62526/$100 .63526/$100 Maximum tax rate in excess of current rate 1.65754/$100 1.65754/$100 1.65754/$100 1.65754/$100 1.65754/$100 1.65474/$100 1.64474/$100 1.62474/$100 1.62474/$100 1.61474/$100 Total legal debt margin $ 58,527,615 $ 60,989,519 $ 61,647,728 $ 65,515,746 $ 69,476,514 $ 73,319,145 $ 72,799,463 $ 71,846,695 $ 71,989,223 $ 72,093,645 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$100 assessed valuation. The 2012 tax rate is$.63526 per$100 assessed valuation. Maximum tax levy established by City Charter 118 EXHIBIT 1-14 CITY OF WICHITA FALLS, TEXAS PLEDGED REVENUE COVERAGE -WATER AND SEWER REVENUE BONDS - LAST TEN FISCAL YEARS (UNAUDITED) Net Revenue Fiscal Gross Operating Available For Debt Service Requirement Year Revenues(l) Expenses (2) Debt Service Principal (3) Interest Total Coverage 2003-2004 $ 29,021,062 $ 14,100,412 $ 14,920,650 $ 4,070,000 $ 8,403,349 $ 12,473,349 1.20 2004-2005 29,680,713 15,693,788 13,986,925 4,385,000 8,078,748 12,463,748 1.12 2005-2006 32,976,347 16,986,210 15,990,137 4,505,000 7,600,831 12,105,831 1.32 2006-2007 29,598,709 17,273,862 12,324,847 4,985,000 6,608,627 11,593,627 1.06 2007-2008 33,514,257 17,896,263 15,617,994 5,165,000 6,424,544 11,589,544 1.35 2008-2009 33,662,220 19,546,745 14,115,475 5,410,000 6,185,216 11,595,216 1.22 2009-2010 33,264,688 19,924,687 13,340,001 5,615,000 5,879,680 11,494,680 1.16 2010-2011 40,084,478 22,422,525 17,661,953 5,805,000 5,646,250 11,451,250 1.54 2011-2012 36,405,921 19,501,942 16,903,979 6,130,000 5,364,300 11,494,300 1.47 2012-2013 32,200,867 19,160,351 13,040,516 3,325,000 4,518,925 7,843,925 1.66 Notes: (1) Includes operating revenues exclusive of water sales to West Texas Utilities and capital contributions from developers of the Water and Sewer Fund (see Exhibit H-3). (2) Includes operating expenses of the Water and Sewer Fund exclusive of depreciation and amortization (see Exhibit H-3). (3) Excludes bond premium amortization. 119 EXHIBIT 1-15 CITY OF WICHITA FALLS, TEXAS DEMOGRAPHIC STATISTICS- LAST TEN FISCAL YEARS(UNAUDITED) Per Capita Fiscal Estimated Personal Personal Median Education School Unemployment Year Population(1) Income Income(2) Age Level(3) Enrollment(3) Rate(4) 2003-2004 104,823 $ 4,067,057,042 $ 38,799 35.4 13.1 13,857 3.6% 2004-2005 106,876 4,287,700,173 40,118 35.4 13.1 13,755 4.8% 2005-2006 107,635 4,464,967,184 41,482 35.4 13.1 13,743 4.2% 2006-2007 107,635 4,616,776,069 42,893 34.9 13.1 14,707 4.1% 2007-2008 107,847 4,783,148,919 44,351 34.9 13.3 14,533 5.5% 2008-2009 105,935 2,470,050,408 23,317 33.2 13.5 15,473 8.2% 2009-2010 104,553 2,205,022,770 21,090 32.3 13.3 16,217 7.3% 2010-2011 104,553 2,766,263,274 26,458 32.8 13.2 15,539 6.6% 2011-2012 103,931 2,330,756,606 22,426 32.4 13.2 14,569 6.9% 2012-2013 104,552 2,499,106,456 23,903 32.5 13.1 14,639 6.2% Sources: (1) City of Wichita Falls Planning Department for all years,except for 2009-10 and 2010-11 from US Bureau of Census. (2) C.A.C.I.Marketing Services (3) Wichita Falls I.S.D.-Educational level is grade equivalent of graduating senior (4) Texas Workforce Commission 120 EXHIBIT 1-16 CITY OF WICHITA FALLS, TEXAS PRINCIPAL EMPLOYERS CURRENT YEAR AND TEN YEARS AGO(UNAUDITED) SEPTEMBER 30, 2013 2012-2013 2003-2004 Percentage Percentage of Total of Total City City Employer Employees Rank Employment Employees Rank Employment Sheppard Air Force Base 10,015 1 14.01% 13,088 1 18.30% Wichita Falls ISD 2,574 2 3.60% 1,700 3 2.38% North Texas State Hospital 1,987 3 2.78% 1,055 5 1.48% United Regional Health Care System 1,668 4 2.33% 1,700 2 2.38% City of Wichita Falls 1,499 5 2.10% 1,477 4 2.07% Midwestern State University 1,309 6 1.83% - N/A - Wal-Mart-3 locations 1,251 7 1.75% - N/A - Howmet Corporation 1,084 8 1.52% 903 8 1.26% James B. Allred Prison Unit 980 9 1.37% 930 7 1.30% Cryovac Division -Sealed Air Corp. 780 10 1.09% 738 9 1.03% Vetrotex America - N/A - 1,000 6 1.40% Stanley Works, Mechanics Division - N/A - 550 10 0.77% Totals 23,147 32.37% 23,141 32.37% Sources: 2003-2004 data is from Texas Workforce Commission. 2012-2013 data is from Wichita Falls Chamber of Commerce. 121 EXHIBIT 1-17 CITY OF WICHITA FALLS, TEXAS FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 Administrative services 92.3 95.5 99.9 103.0 105.1 104.6 102.0 97.0 94.6 94.3 Police 285.5 286.5 286.5 294.0 293.0 294.0 295.0 296.5 298.5 299.5 Fire 156.0 156.0 156.0 162.0 164.0 164.0 164.0 162.0 162.0 162.5 Parks and recreation 75.8 75.8 75.8 75.8 82.9 82.9 84.8 88.7 89.7 92.9 Accounting/finance 22.4 22.4 22.4 24.5 25.5 26.0 26.0 25.0 27.0 27.0 Community development 38.7 38.7 38.7 40.7 40.5 41.0 40.1 40.0 40.0 42.0 Public works 80.0 80.2 80.2 80.2 80.2 80.8 80.8 79.2 78.5 78.5 Health 84.1 76.9 77.1 74.9 72.5 69.0 68.4 71.5 72.0 81.9 Traffic and transportation 51.3 51.5 51.5 52.6 52.6 50.6 51.7 52.6 53.6 53.6 Multi-Purpose Events Center - - - 22.4 22.8 23.0 23.0 22.8 22.8 22.8 Water and sewer 169.2 172.0 177.5 179.5 179.5 179.9 180.1 179.6 180.2 182.1 Sanitation 81.0 81.0 81.0 81.0 82.0 82.5 82.5 82.5 82.5 81.5 Golf 19.8 19.7 19.2 19.4 - - - - - - Municipal Airport 1.0 1.0 1.0 1.6 1.6 1.6 1.6 1.6 1.6 1.6 Kickapoo Airport 4.8 5.0 5.0 4.4 4.4 4.4 5.4 5.4 5.6 6.4 Transit 19.3 19.3 19.3 19.2 19.6 22.1 21.6 21.6 22.2 24.7 Stormwater Drainage 0.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.8 122 EXHIBIT 1-18 CITY OF WICHITA FALLS, TEXAS OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 General government Building permits issued 10,159 8,904 7,553 7,813 7,420 6,769 6,802 8,130 7,303 9,979 Building inspections conducted 12,600 13,092 12,591 12,048 11,425 9,565 11,038 13,321 11,834 12,823 Police Physical arrests 7,847 8,284 8,571 7,279 6,752 7,186 6,235 5,845 6,182 5,978 Parking violations 1,284 1,615 327 383 197 - 109 125 529 65 Traffic violations 23,385 21,075 24,126 17,904 16,236 23,253 25,558 23,780 21,660 21,651 Fire Emergency responses 7,535 7,677 8,234 8,634 8,684 8,687 8,693 9,139 9,027 8,979 Fires extinguished 668 757 792 554 1,340 718 654 703 583 591 Inspections 850 850 850 900 2,647 3,250 3,281 3,114 3,221 3,198 Refuse collection Refuse collected (tons) 82,973 79,555 78,165 182,855 168,681 161,243 156,630 141,251 116,961 124,250 Recyclables collected 1,926 2,328 2,018 19,034 21,624 22,010 16,923 16,780 18,743 18,884 Library Volumes in collection 210,976 225,941 172,391 179,728 184,231 185,009 185,009 193,064 177,229 173,996 Total volumes borrowed 304,644 295,088 293,884 302,565 352,408 368,685 368,685 344,107 327,336 276,065 Water New connections 335 312 325 310 212 146 48 64 119 134 Water main breaks 691 573 881 741 898 872 724 1,250 1,028 954 Average daily consumption 20,400 22,100 23,680 19,936 22,511 19,200 19,851 25,798 20,269 15,564 (thousands of gallons) Wastewater Average daily sewage treatment 11,026 12,404 11,097 13,930 11,410 7,670 12,435 10,080 10,551 9,217 (thousands of gallons) Transit Total route miles - 450,938 435,446 476,758 488,842 530,771 536,181 552,238 586,893 572,744 Passengers - 247,303 229,601 294,670 324,666 327,463 340,181 374,277 485,101 460,484 Notes: Data was not available for all items for all years. The City will provide more data as it becomes available. 123 EXHIBIT 1-19 CITY OF WICHITA FALLS, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 Police Stations 1 1 1 1 1 1 1 1 1 1 Patrol units - - 114 114 103 105 115 114 114 113 Fire stations 8 8 8 8 8 8 8 8 8 8 Refuse collection Collection trucks - - 34 34 36 36 36 36 36 36 Other public works Streets(miles) 542 585 585 587 515 529 514 514 515 515 Streetlights 7,738 7,825 7,926 7,922 7,976 8,203 7,958 8,084 7,931 7,942 Traffic signals 111 111 102 98 102 104 104 104 104 104 Parks and recreation Acreage 1,100 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 Playgrounds 45 47 47 47 47 40 39 39 39 39 Golf courses 1 1 1 1 1 1 1 1 1 1 Water Water mains(miles) 714 566 830 846 720 720 572 572 577 578 Fire hydrants - - 6,000 6,019 2,264 2,264 2,545 2,547 2,579 2,588 Storage capacity(thousands of gallons) - - 14,000 21,500 21,000 22,500 37,000 37,000 37,000 37,000 Wastewater Sanitary sewers(miles) 508 529 529 531 538 550 543 543 545 546 Storm sewers(miles) 41 96 96 96 117 117 97 97 97 98 Treatment capacity(thousands of gallons) - - 56,600 21,410 21,410 22,800 21,410 24,410 24,410 21,410 Transit Buses 12 12 12 12 12 12 14 14 14 14 Notes: Data was not available for all items for all years. The City will provide more data as it becomes available. 124 Graphics EXHIBIT J-1 CITY OF WICHITA FALLS, TEXAS CASH AND INVESTMENTS 120 100 U) 80 O E 60 L co 0 40 20 0 2009 2010 2011 2012 September 30, 2013 (UNAUDITED) 125 EXHIBIT J-2 CITY OF WICHITA FALLS, TEXAS TOTAL BONDS PAYABLE 200 150 C O 100 c� O 0 50 0 2009 2010 2011 2012 2013 September 30, (UNAUDITED) 126 EXHIBIT J-3 CITY OF W ICH ITA FALLS, TEXAS GENERAL OBLIGATION BONDS PAYABLE 10 O 5 ---- » c� ------ — 0 2009 2010 1 2011 2012 September 30, 2013 (UNAUDITED) 127 EXHIBIT J-4 CITY OF W ICH ITA FALLS, TEXAS REVENUE BONDS PAYABLE . . _ . 200 -- -� 175 150 p 125 E 100 L 75 O 50 25 0 2009 2010 2011 2012 September 30, 2013 (UNAUDITED) 128 EXHIBIT J-5 CITY OF W ICHITA FALLS , TEXAS GENERAL FUND EQUITY --------------- 18 16 14 � o � % off 2009 2010 2011 2012 129 i EXHIBIT J-6 CITY OF W ICH ITA FALLS, TEXAS COMPARISON OF TAX LEVY AND COLLECTIONS 30 25 -- - -- — - U C 20 E U) 15 L 0 10 5 0 2005 2006 2007 2008 Tax Levy 2009 Years Ended September 30,2010 2011 2012 Tax Collections GTax Collections ®Tax Levy 2013 (UNAUDITED) 130 EXHIBIT J-7 CITY OF WICHITA FALLS, TEXAS REVENUES BY SOURCE - FYE 9/30/13 Fines and forfeitures 2016 YS 4K 5K•4• Y.}hl 4 hr.M.r Charges for services 4•Y4.Y4 4 4•YS•S•4 .t ` 4K•4 4K•M 4K 4K•S•Y4• 4n`r{�*'Y�Y rya`+ 4 rYN•M}Y•l hr hr.M•M.J 's X r 37°/4A•4KKK•{.SK•tiK S•4 4K•S.YS'H'. {..; O r..hhlYY M r lY.hl hl+M•M•lY.l SK YS YL 4 S 4 4 4.Y4 YSKK•YY4.SK•4 M rY•}YY M r r•rY+r M•M•M•rY•r• .4K 4K.5K 4.4.4 4.4.4K 4K.4.Y4.Y4.4K.4K �M M}Y•r•d.r M r 1•rWr hhM.r,vr•r..r•r.M ,. 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