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CAFR 2005 Georgetown Comprehensive AnnualComprehensive Annual Financial ReportFinancial Report For the Year EndedFor the Year Ended September 30, 2005September 30, 2005 City of Georgetown, TexasCity of Georgetown, Texas CITY OF GEORGETOWN, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 Prepared by: Division of Finance and Administration Micki Rundell, CGFO - Director Laurie Brewer, CGFO - Controller www.georgetown.org TABLE OF CONTENTS INTRODUCTORY SECTION: Letter of Transmittal......................................................................................................................................i GFOA Certificate of Achievement...............................................................................................................vi Organizational Chart..................................................................................................................................vii Elected Officials and Administrative Officers.............................................................................................viii City of Georgetown Map..............................................................................................................................ix FINANCIAL SECTION: Independent Auditors’ Report.......................................................................................................................1 Management’s Discussion and Analysis......................................................................................................3 Basic Financial Statements Government-wide Financial Statements Statement of Net Assets................................................................................................................16 Statement of Activities...................................................................................................................17 Fund Financial Statements Governmental Funds Balance Sheet...............................................................................................................................21 Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Assets...............................................................................................22 Statement of Revenues, Expenditures, and Changes in Fund Balance..........................................................................................................................23 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance to the Statement of Activities.................................................24 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual – General Fund........................................................................................26 Proprietary Funds Statement of Net Assets................................................................................................................28 Statement of Revenues, Expenses and Changes in Fund Net Assets ........................................29 Statement of Cash Flows..............................................................................................................30 Fiduciary Funds Statement of Fiduciary Net Assets – Agency Funds.....................................................................32 Notes to the Financial Statements.......................................................................................................34 Required Supplementary Information Texas Municipal Retirement System Trend Data................................................................................63 Modified Approach for Streets Infrastructure Capital Assets...............................................................64 Combining and Individual Fund Financial Statements and Schedules Combining Financial Statements – Nonmajor Governmental Funds Combining Balance Sheet.............................................................................................................66 Combining Statement of Revenues, Expenditures and Changes in Fund Balance......................68 Schedules of Revenues and Expenditures – (Budget Basis) – Budget and Actual (Non-GAAP) – Reconciled to GAAP Basis Special Revenue Funds Court Fees..............................................................................................................................70 Fire Billing...............................................................................................................................71 Library Restricted....................................................................................................................72 Main Street Façade................................................................................................................73 Mapping..................................................................................................................................74 Parks.......................................................................................................................................75 Police......................................................................................................................................76 Street Tax...............................................................................................................................77 Tourism...................................................................................................................................78 Village Improvement District...................................................................................................79 Capital Projects Fund - Street Improvements...............................................................................80 Supplementary Individual Fund Financial Statements and Schedules – Major Governmental Funds General Fund Comparative Balance Sheets........................................................................................................82 Comparative Statements of Revenues, Expenditures and Changes in Fund Balances...............83 Schedule of Revenues and Expenditures (Budget Basis) - Budget and Actual............................84 Georgetown Transportation Enhancement Corporation (GTEC) Comparative Balance Sheets........................................................................................................88 Comparative Statements of Revenues, Expenditures and Changes in Fund Balance.................89 Schedule of Revenues and Expenditures (Budget Basis) – Budget and Actual.........................90 Debt Service Fund Comparative Balance Sheets........................................................................................................91 Comparative Statements of Revenues, Expenditures and Changes in Fund Balances...............92 Schedule of Revenues and Expenditures (Budget Basis) – Budget and Actual...........................93 General Capital Projects Comparative Balance Sheet..........................................................................................................94 Comparative Statements of Revenues, Expenditures and Changes in Fund Balances...............95 Schedule of Revenues and Expenditures (Budget Basis) – Budget and Actual...........................96 Combining Financial Statements - Nonmajor Proprietary Funds Enterprise Funds Combining Statement of Net Assets.............................................................................................98 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets.......................99 Combining Statement of Cash Flows..........................................................................................100 Internal Service Funds Combining Statement of Net Assets...........................................................................................102 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets.....................103 Combining Statement of Cash Flows..........................................................................................104 Reconciliation of Operating Income to Net Cash Provided by Operating Activities....................105 Supplementary Individual Fund Financial Statements Enterprise Funds Electric Fund Comparative Statements of Net Assets ...............................................................................108 Comparative Statements of Revenues, Expenses and Changes in Fund Net Assets.........109 Water Services Fund Comparative Statements of Net Assets............................................................................... 110 Comparative Statements of Revenues, Expenses and Changes in Fund Net Assets.........111 Airport Fund Comparative Statements of Net Assets................................................................................112 Comparative Statements of Revenues, Expenses and Changes in Fund Net Assets.........113 Sanitation Fund Comparative Statements of Net Assets ...............................................................................114 Comparative Statements of Revenues, Expenses and Changes in Fund Net Assets.........115 Stormwater Drainage Fund Comparative Statements of Net Assets................................................................................116 Comparative Statements of Revenues, Expenses and Changes in Fund Net Assets.........117 Agency Funds..........................................................................................................................................120 Capital Assets Used In the Operation of Governmental Funds................................................................122 STATISTICAL SECTION Government-wide Expenses by Function.................................................................................................126 Government-wide Revenues....................................................................................................................126 General Governmental Expenditures by Function - Last Ten Fiscal Years.............................................128 General Governmental Revenues by Source - Last Ten Fiscal Years.....................................................130 Property Tax Levies and Collections - Last Ten Fiscal Years..................................................................132 Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years..............................134 Property Tax Rates - Direct and Overlapping Governments - Last Ten Fiscal Years..............................136 Principal Taxpayers..................................................................................................................................137 Computation of Legal Debt Margin...........................................................................................................139 Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General Obligation Bonded Debt Per Capita - Last Ten Fiscal Years........................................140 Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to Total General Governmental Expenditures - Last Ten Fiscal Years.....................................142 Computation of Direct and Estimated Overlapping Bonded Debt............................................................145 Revenue Bond Coverage - Utility Funds - Last Ten Fiscal Years............................................................146 Utility Customer Counts - Last Ten Fiscal Years......................................................................................148 Water Utility Statistical Data.....................................................................................................................149 Wastewater Utility Statistical Data............................................................................................................150 Electric Utility Statistical Data...................................................................................................................151 Demographic Statistics - Last Ten Calendar Years.................................................................................152 Property Value and Construction Permits - Last Ten Fiscal Years..........................................................153 Utility System Condensed Statement of Operations................................................................................154 City’s Equity in Utility System...................................................................................................................155 Miscellaneous Statistics...........................................................................................................................157 Summary of Insurance Coverage.............................................................................................................158 I N T R O D U C T O R Y S E C T I O N January 26, 2006 Honorable Mayor and City Council, City Manager and Citizens of Georgetown, Texas: The comprehensive annual financial report of the City of Georgetown, Texas (the City) for the year ended September 30, 2005, is hereby submitted. The financial statements are presented in conformity with generally accepted accounting principles (GAAP) as set forth by the Governmental Accounting Standards Board (GASB) and have been audited by independent auditors in accordance with generally accepted auditing standards. Management Responsibility for Financial Information. This report consists of management’s representations concerning the finances of the City. The City’s Finance and Administration Division has prepared the Report and is responsible for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures. To the best of our knowledge and belief, the enclosed data is complete and reliable in all material respects. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. Report Format. The comprehensive annual financial report is presented in three sections: introductory, financial, and statistical. • The introductory section includes this transmittal letter, which provides general background and descriptive information and highlights the financial affairs of the City. Also included here are the Government Finance Officers Association (GFOA) Certificate of Achievement, the City's organizational chart, a list of principal officials, and a map showing the location of the City. • The financial section includes the Audit Opinion from the independent auditor, Management’s Discussion and Analysis, the Basic Financial Statements, including the notes, combining and individual fund statements for all of the funds of the City. • The statistical section includes selected financial and demographic information, generally presented on a multi-year basis. The Reporting Entity. This report includes all the funds of the City. The City provides a full range of services, which include police, and fire protection; construction and maintenance of streets and other infrastructure; recreational activities and cultural events. In addition to general government activities, the City also provides electric, wastewater, water, sanitation, stormwater drainage and airport services which are included in the reporting entity. The City is financially accountable for Georgetown Transportation Enhancement Corporation (GTEC), a Texas economic development corporation, which funds transportation projects that enhance economic development, utilizing the ½ cent sales tax approved by the voters. Management Discussion and Analysis. GAAP require that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the report of the independent auditors. Transmittal Letter Page ii DESCRIPTION OF THE CITY Georgetown once was a small town, founded in 1848, with a strong agricultural base, in the heart of Williamson County, 26 miles north of Austin. Today, Georgetown has an estimated population of 38,265, with an additional 12,000 within the extra-territorial jurisdiction (ETJ) and serves as the county seat of Williamson County, the second fastest growing county in Texas. Today's Georgetown struggles to maintain its unique and historic character while managing on-going growth and economic viability. Over the past 20 years, Georgetown has worked to restore and maintain its historic downtown square and to ensure that downtown is the heart of the community. This work was acknowledged when it won the Great American Main Street Award in 1997 and is on-going, as Georgetown continues to ensure the economic vitality of its downtown. The Downtown Master Plan, adopted in 2003, provides guidance for growth and redevelopment in the historic downtown area, preserving its historic character and feel. Due to this unique character and small town charm, Del Webb Corporation elected to build its first Texas development in Georgetown with the 1995 opening of Sun City Texas. Today, over 5,500 retirees make Sun City and Georgetown their home. Del Webb has intentions to expand development beyond its current scope, with an additional 2,500 units over the upcoming five years. Georgetown is a Home Rule Charter City and operates under a Council - Manager form of government. A mayor and seven council members are elected on staggered, three-year terms from single member districts. Georgetown is also the home to Southwestern University, which continues to receive national recognition. The University is ranked No. 10 for “Best College Values” on the National Liberal Arts Colleges list by U.S. News and World Report. With 1,300 students and 430 employees, the University provides substantial economic and cultural contributions to Georgetown. GEORGETOWN'S ECONOMIC DEVELOPMENT OUTLOOK While the overall Texas economy has been slowly recovering from recession, Georgetown’s economy has continued to expand. This is due in part to its proximity to major employers in the area, such as Dell Corporation in Round Rock and other high tech companies in the north Austin area, as well as a large retirement community. The average disposable income in Georgetown and Williamson County continues to be above the state average. Georgetown is located on Interstate 35, the major corridor between Dallas and San Antonio, at the intersection of State Highway 130, currently under construction. SH 130 is a new toll road linking Georgetown with Interstate 10, east of San Antonio, thereby bypassing the highly congested Austin area. The expansion of Parmer Lane, a major arterial from the Austin and Round Rock area, will open many sites between Georgetown and Round Rock for development. This major state construction project is expected to alleviate traffic congestion and provide an economic benefit to the area. Georgetown's unique location has already resulted in increased economic benefit, as the first supplier for the new Toyota plant in San Antonio constructed its Texas plant in Georgetown in 2005. This company, Tasus Corporation, opened in April 2005, and will eventually bring over 100 jobs to the Georgetown area. Georgetown continues to expand its tax base with expanded retail opportunities. In June 2005, Simon Properties opened the first phase of a 750,000 sq. ft. retail center, featuring Target, Best Buy and Old Navy, with full build out expected by 2007. The sales tax revenues generated by these new developments will help the City maintain its low tax rate, while continuing to provide a higher quality of service to its citizens. Simon Properties has also contracted for additional property on the other side of State Highway 29 for future retail and mixed use development. The Downtown area continues to see revitalization and development. The City continues to implement projects outlined in the Downtown Master Plan, which was adopted by City Council in 2003. The purchase of a second downtown parking lot will increase parking availability for the future. At least four Transmittal Letter Page iii new projects are in the first phases of development in the downtown area. These projects include retail, office and residential units. The City is participating with the developers to provide infrastructure improvements to this area and continue to expand retail opportunities Downtown. Georgetown takes an active role in water and wastewater planning with both the Brazos River Authority (BRA) and Lower Colorado River Authority (LCRA) to find regional solutions to the ever increasing demand for services, while protecting the natural environment within the area. Growth within the utilities continues to have strong impacts to the financial and economic conditions of Georgetown. During 2005, the City began preliminary negotiations with LCRA regarding its long term power supply contract, with the current contract expiring in 2016. The City’s goal is to ensure adequate supplies well into the future, with minimal financial impacts to the rate base. In May 2005, the voters approved the adoption of an additional ¼ cent sales tax that is allowed through the state statues to be collected by cities. One eighth percent of this sales tax will be used for the promotion and development of new and expanded business enterprises allowable under Texas Economic Development Corporation 4A and 1/8 cent will be used to reduce property tax rates, as allowed by state statues. Collection of this revenue began in October 2005 and the City is now at the maximum allowable sales tax rate allowed by state law. MAJOR INITIATIVES Utility Rates. The City continues to review rate requirements for all utilities annually, as a part of the budget process. Environmental mandates for water and wastewater continue to be the driving factor in rate analysis. The City uses a conservation water rate structure that allows the users of the peak demand for water to pay for the costs of future plant expansion. The City adopted the second phase of a scheduled wastewater rate increase, as provided by the comprehensive rate study prepared in 2001. This rate increase is attributable to environmental mandates due to the City’s location over the Edward’s Aquifer Recharge Zone. The City prepared a comprehensive rate review in 2004, that identified the components of the rates, as well as the various customer classification. Fuel cost increases over and above the amount included in the base rate are adjusted quarterly through a power cost adjustment process. Utility System Expansion. The City contracted for over $12.8 million to expand the utility system in fiscal year 2005. The City completed construction of a de-watering facility at the Lake Georgetown Plant, and began rehabilitation of the Dove Springs Wastewater Treatment Plant. Other Wastewater projects included the Smith Branch force main, as well as the Wolf Ranch lift station. The City completed the year three of testing and year two of repairs in an eight year plan for Edward’s Aquifer Recharge Zone Inflow and Infiltration plan. Electric capital improvements were completed to expand the utility system for new commercial and residential areas. Transportation. A 2004 quality of life survey of Georgetown citizens indicated transportation was one of the top concerns. Many City streets are expanded and maintained by either Williamson County or the Texas Department of Transportation (TxDot). The Georgetown Transportation Enhancement Corporation (GTEC) completed an agreement with TxDot in 2004 to contribute funding towards improvements to expand State Highway 29, and construction of a new frontage road and bridge in front of the new Simon development. These improvements are expected to be completed in 2006. Street improvements completed in 2005 include major maintenance projects to improve 13th Street as well as Airport Road. Public Safety. Improving emergency response was a major priority for the 2004/05 budget. Council approved a three year staffing plan to bring public safety staffing to acceptable levels, with the addition of six police officers and five firefighters per year. Parks Improvements. The City continues to expand its award winning park system. In 2005, Jack and Cammy Garey announced their intention to dedicate in their wills, their 530 acre ranch for use as a community park. The ranch, which is five miles west of Georgetown, includes pristine natural areas and Transmittal Letter Page iv San Gabriel River frontage. As part of their gift, the Gareys will also donate five million dollars, to be matched by the City, to be used towards making improvements in the park. The Garey Park Master Plan is currently under development and is expected to be adopted in 2006. Facilities Planning. The Council continued to focus resources on long range facility planning in 2005. The City completed construction of a new Animal Shelter, as well as the renovation an existing facility for use as Parks Administration offices. The City broke ground on its new 55,000 square foot public library in August 2005, with completion expected in December 2006. This project was included in the November 2004 $21.4 million bond package. The renovation of the Community Center, another project included in the bond package, will commence in early 2006. FINANCIAL INFORMATION The City is responsible for establishing and maintaining internal controls designed to ensure that the assets of the City are protected from loss, theft or misuse and that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. Internal controls are designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. The City’s Director of Finance and Administration, Controller, and other key staff in the Division of Finance and Administration design and maintain the internal control structure. These controls are under continuing review by management, and under annual review by the independent auditors. During the year, the Finance Division performs internal audits on selected procedures and operations throughout the City organization. The selection of priorities and timing of audits are determined by the Director of Finance and Administration, along with the City Manager. Single Audit. As a recipient of federal and state financial assistance, the City is responsible for ensuring that adequate internal controls are in place to ensure compliance with applicable laws and regulations related to those programs. Internal controls are subject to periodic evaluation by management. The tests relating to the receipt of such funds are known as Single Audit testing. These tests are made to determine the adequacy of internal controls, including that portion related to federal financial assistance programs, as well as to determine that the City has complied with applicable laws and regulations. The reports related to the single audit testing are available in the City’s separately issued Single Audit report. Budgetary Controls. The City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of all funds are included in the annual appropriated budget. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established by division and department within an individual fund. The City also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbered amounts are reserved at year-end and carried forward into the following year. As demonstrated by the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. Cash Management. Cash temporarily idle during the year was invested in demand deposits, U.S. Treasury and agency securities, and the authorized investment pools, TexPool, Texas Term, and TexStar. Demand deposits were either insured by federal depository insurance or collateralized. An independent third party bank in the City’s name held collateral on deposits. The City's investment policy allows investments in collateralized bank certificates of deposit, repurchase agreements, U.S. Treasury and agency securities and investment pools meeting specific criteria. All investments were in compliance with this policy and state law. The City had no realized losses on any securities held during the year. Risk Management. The City strives to enhance its risk management program each year. In order to minimize insurance costs and mitigate future increases, various risk control techniques are employed. Transmittal Letter Page v Those techniques primarily include employee accident prevention training and the review of all accidents resulting in property damage or personal injury. OTHER INFORMATION Independent Audit. The City Charter requires an annual audit by independent certified public accountants. The accounting firm of Brockway, Gersbach, McKinnon & Niemeier was selected by the City Council in May 2005. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended 9/30/05 are free of material misstatement. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City’s financial statements for the fiscal year ended 9/30/05, are fairly presented in conformity with GAAP. The independent auditor’s report on the basic financial statements and schedules are included in the financial section of this report. 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 for its Comprehensive Annual Financial Report for the previous fiscal year ended September 30, 2004. The Certificate of Achievement is the highest form of recognition for excellence in state and local governmental financial reporting. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, whose contents conform to program standards. Such Comprehensive Annual Financial Reports must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year. The City has now received a Certificate of Achievement for eighteen consecutive years. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to the GFOA. We are also proud to report that the GFOA has presented the Distinguished Budget Presentation Award to the City of Georgetown for each of the past seventeen years. We are especially proud of this recognition since our Annual Operating Plan, or budget, is a part of the City's comprehensive plan, the Georgetown Century Plan. Acknowledgments. The presentation of this report on a timely basis could not be accomplished without the efficient and dedicated services of the entire staff of the Finance Division. We would like to express our appreciation to all members of the division who assisted and contributed to its presentation. Special acknowledgment goes to Leticia Zavala, Chief Accountant, Lorie Lankford, Accountant III, Carmen Speis, Accountant II, and Danella Elliott, Administrative Assistant, for their dedication in preparing this report. We would also like to thank the City Manager, Mayor and City Council. The preparation of this report would not be possible without their leadership and support. vi vii PoliceFinance &Administration FireGeorgetownUtility Systems Assistant City Manager TransportationServices Electric Services Water Services CommunityServices Engineering Municipal Court Accounting Support Services CVBMain Street Tourism Parks Recreation Library Planning &DevelopmentServices Inspection Services Airport InformationTechnology A HOME RULE CITY CITY COUNCIL MAYOR (elected at large) SEVEN COUNCIL PERSONS (elected by district) CITIZENS OF GEORGETOWN CITY SECRETARYCITY ATTORNEY MUNICIPAL COURT JUDGE BOARDS &COMMISSIONSCITY MANAGER Utility Billing EconomicDevelopment HumanResources CommunityDevelopment Support Services Administrative Services Animal Services Field Operations Administration Operations = City Divisions Organizational Chart September 30, 2005 viii CITY OF GEORGETOWN, TEXAS ELECTED OFFICIALS AND ADMINISTRATIVE OFFICERS SEPTEMBER 30, 2005 ELECTED OFFICIALS Mayor Gary Nelon City Council Member, District 1 Patty Eason City Council Member, District 2 Gabe Sansing City Council Member, District 3, Mayor Pro Tem Doug Smith City Council Member, District 4 Henry Carr City Council Member, District 5 John Kirby City Council Member, District 6 Farley Snell City Council Member, District 7 Ben Oliver APPOINTED OFFICIALS City Manager Paul Brandenburg City Attorney Patricia Carls, Brown & Carls L.L.P. City Secretary Sandra Lee Municipal Court Judge Randy Stump OTHER CITY OFFICIALS Assistant City Manager Tom Yantis Assistant City Manager -Utilities Jim Briggs Director of Finance and Administration Micki Rundell Fire Chief Anthony Lincoln Police Chief David Morgan ix Location Georgetown is the northern most “gateway” to the gently rolling hills of Central Texas. While Georgetown offers the amenities and charm of a small community rooted in values of days gone by, it’s strategically and centrally located in the middle of the four major metropolitan areas of Texas. Austin is 26 miles south, Dallas is only two hours north, Houston is just two hours southeast and San Antonio is one-and- a-half hours south, placing Georgetown in a very advantageous position for cultural and economic development. Access to Georgetown via the Austin- Bergstrom International Airport and the north/south highway artery of Interstate 35 and east/west highway artery of Highway 29 make traveling to and from Georgetown easy. F I N A N C I A L S E C T I O N 3 CITY OF GEORGETOWN, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of the City of Georgetown financial performance provides an overview of the City’s financial activities for the fiscal year ended September 30, 2005. Please read it in conjunction with the transmittal letter at the front of this report and the City’s financial statements, which follow this section. FINANCIAL HIGHLIGHTS General Fund • At the end of the current fiscal year, undesignated fund balance for the General Fund was $6.3 million, or 34.2% of the FY2005 General Fund expenditures. The undesignated fund balance increased by $1.8 million from FY2004. Of this amount, $255,000 represented an increase in budgeted contingency reserves. Revenues were $1.4 million more than the original budget estimates. • General Fund revenues increased $1.8 million, an increase of 13% over FY 2004. • General Fund expenditures increased by $408,000, an increase of 2.3% over FY 2004. This increase was due to the timing of street maintenance projects, as well as cost of living salary increases and staffing increases in public safety. Governmental Activities • On a government-wide basis for governmental activities, the City had expenses net of program revenue of $6.8 million. General revenues and transfers totaled $27.3 million, resulting in an increase in net assets of $20.5 million. • As of September 30, 2005, the City's governmental activities reported combined ending net asset balances of $134.4 million. The largest element of this balance, $107.7 million, is the value of the City’s investment in capital assets, such as streets, parks and facilities, net of related debt. Other significant balances are restricted for specific purposes such as debt service and capital projects. • During fiscal year ended September 30, 2005, the City issued $13.2 million in General Obligation bonds and Certificates of Obligation, of which $4.2 million was in support of the Georgetown Transportation Enhancement Corporation (GTEC) projects to be repaid through dedicated sales tax collections. The remainder of the debt issues funded general capital projects and public safety equipment. The City also issued $10.9 million in Refunding Bonds to retire outstanding debt issued at a higher interest rate. The City's general obligation debt is rated A+ by Standard & Poor's and Moody's. • The City received over $12 million in roadway contributions in FY 2005. This amount included street improvements in and around the Wolf Ranch retail development, as well as improvements received through the City’s 2005 annexation initiative and County road contributions. • The City recorded a prior period adjustment to recognize an adjusted value for the streets inventory, in conjunction with its streets inventory and condition assessment, which reduced net assets by $1.8 million. CITY OF GEORGETOWN, TEXAS MD&A 4 Business-Type Activities • The net assets of the City's business-type activities increased by $12.6 million in FY 2005, primarily due to $6.6 million of infrastructure assets contributed by developers for the Sun City, the Meadows, and other residential sub-divisions. • The City issued $4 million of utility system revenue bonds for electric and water system expansion. Both Standard & Poor's and Moody's have rated the City's utility system revenue debt as A+. Entity-Wide • The City's total net assets on a government-wide basis totaled $265.1 million at September 30, 2005, an increase of 14% over September 30, 2004. Most of this balance is invested in capital assets, restricted for specific purposes, or related to a long-term receivable. • The City received $20.1 million of grants and other capital contributions in FY 2005. USING THE FINANCIAL SECTION OF THIS COMPREHENSIVE ANNUAL FINANCIAL REPORT This Comprehensive Annual Financial Report consists of three sections: introductory, financial and statistical. As illustrated in the following chart, the financial section of this report has three components: management’s discussion and analysis (this section), the basic financial statements, and required supplementary information. Components of the Financial Section BASIC FINANCIAL STATEMENTS MANAGEMENT’S DISCUSSION AND ANALYSIS FINANCIAL STATEMENTS REQUIRED SUPPLEMENTARY INFORMATION Government-wide Governmental Activities (Full Accrual) Business-Type Activities (Full Accrual) Notes to the Financial Statements Fund Governmental (Modified Accrual) Proprietary (Full Accrual) Fiduciary (Full Accrual) CITY OF GEORGETOWN, TEXAS MD&A 5 GOVERNMENT-WIDE FINANCIAL STATEMENTS The government-wide financial statements report information about the City as a whole, using accounting methods similar to those used by private-sector companies. The statement of net assets includes all of the government’s assets and liabilities, reported using the full accrual basis of accounting. The statement of activities accounts for all of the current year’s revenues and expenses, regardless of when cash is received or paid. The two government-wide statements report the City’s net assets and how they have changed. Net assets, the difference between the City’s assets and liabilities, is one way to measure the financial health of the City. Over time, increases or decreases in the City’s net assets are an indicator of whether its financial health is improving or deteriorating. To assess the overall health of the City, one needs to consider other non-financial factors such as changes in the City’s property tax base and condition of the City’s infrastructure. The government-wide financial statements of the City are divided into two categories: Governmental Activities – Most of the City’s basic services are included here, such as police, fire and other public safety services, parks and recreation, public library, street maintenance and general administration. Property and sales taxes, return on investment from the City’s utility services, and charges for services finance most of these activities. Business-type Activities – The City’s Water Services Fund, which includes water, wastewater and irrigation services, as well as its Electric utility, are reported here. Sanitation, Stormwater Drainage and the City’s Airport are also reported in these activities. Fees charged to customers fund the costs of providing these services. FUND FINANCIAL STATEMENTS The fund financial statements provide more detailed information about the City’s most significant funds and will be more familiar to traditional users of government financial statements. The focus is now on major funds rather than fund types. The City has three types of funds: Governmental Funds – General Fund, Special Revenue Funds, Capital Projects Funds and the Debt Service Fund are governmental funds, which focus on: (1) How cash and other financial assets that can readily be converted to cash flow in and out, and (2) The balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a short-term view that helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, additional information is provided with the governmental fund financial statements that explains the reconciliation between the fund statements and the government-wide statements. CITY OF GEORGETOWN, TEXAS MD&A 6 Proprietary Funds – Services for which the City charges fees and rates that intend to fully recover the cost of providing the service are reported in proprietary funds. Two types of proprietary funds are allowed in governmental accounting: enterprise funds and internal service funds. These funds, like the government-wide statements, provide both long-term and short-term financial information. The City’s enterprise funds are substantially the same as its business-type activities, but the fund financial statements provide more detail and additional information, such as cash flows. The City utilizes enterprise funds to account for its electric, water services, airport, sanitation, and stormwater drainage activities. The City uses internal service funds to report activities that provide supplies and services for the City’s other programs, activities and funds. The City’s internal service funds are used for providing facility maintenance, fleet services, joint services (providing administrative functions to the other funds) as well as information technology services. Fiduciary Funds – The City is trustee, or fiduciary, for certain amounts held on behalf of others, and for certain pass-through arrangements. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. The City’s fiduciary activities are reported in a separate statement of fiduciary net assets. Assets for the City’s flexible spending cafeteria plan, assessment collections for the City's public improvement districts, and pass-through lease agreements for Texas Capital Fund projects are held in fiduciary funds. These fiduciary activities are excluded from the City’s government-wide financial statements because the City cannot use these assets to finance its operations. FINANCIAL ANALYSIS OF THE CITY AS A WHOLE Statement of Net Assets: The following table reflects the condensed Statement of Net Assets: 200520042005200420052004 Current and other assets$32,591$24,700 $42,608$36,352 $75,199$61,052 Capital assets152,255128,237 142,655131,166294,910259,403 Total assets$184,846$152,937 $185,263167,518 $370,109320,455 Long-term liabilities$46,103$34,911 45,105$43,66291,208$78,573 Other liabilities4,3804,115 9,4325,70613,8129,821 Total liabilities$50,483$39,026 $54,537$49,368 $105,020$88,394 Net assets: Invested in capital assets, net of related debt$107,692$94,674 $98,081$88,001 $205,773$182,675 Restricted16,83712,067 1,25238918,08912,456 Unrestricted9,8347,170 31,39329,76041,22736,930 Total net assets$134,363113,911$ $130,726$118,150 $265,089$232,061 Summary Statement of Net Assets (In thousands) Govtl ActivitiesBus-Type ActivitiesTotal Primary Government CITY OF GEORGETOWN, TEXAS MD&A 7 Net Assets - Primary Government- 9/30/05 Govtl - Inv in Net Assets 40.625% Govtl - Restricted 6.351% Bus-Type - Rest. 0.472% Govmtl - Unrest. 3.710% Bus-Type - Inv. In Net Assets 36.999% Bus-Type - Unrest. 11.842% The City's combined net assets increased by $33 million to $265.1 million from $232.1 million in FY 2005. • Net assets of the governmental funds were $134.4 million. Most of these assets are invested in capital assets or restricted for particular purposes, such as debt service or capital projects. • The City's unrestricted net assets for governmental activities, which can be used to finance day to day operations, totaled $9.8 million. • Included in unrestricted net assets are fund balances that are earmarked for particular purposes, such as parks improvements, street maintenance, and tourism. The balance of these funds at September 30, 2005 was $2.1 million. • Net assets increased primarily as a result of increases in capital assets and construction in progress. Projects completed during the year included: • Downtown Parking Lot purchase • Animal Shelter construction • Building purchase from the Williamson County Appraisal District • Design work for: • Relocation of Fire Station 1 • New Public Library • Expansion of Community Center • San Gabriel Park improvements, as well as playground equipment purchases in multiple parks • Transportation improvements including: • Contributions by Georgetown Transportation Enhancement Corporation to the Texas Department of Transportation towards improvements related to the Wolf Ranch development • Improvements to Airport Road • Net assets invested in capital assets net of related debt increased in part due to developer's contributed capital totaling $20.1 million. This included $10.3 million of donated roads and bridge from Williamson County. • Net assets of business-type activities increased by $12.6 million, most of which was due to the recognition of developer contributed capital. CITY OF GEORGETOWN, TEXAS MD&A 8 • During 2005, the City invested $11.3 million towards improving and expansion of utility infrastructure, compared to $6.1 in 2004. Projects included: • Electric residential and commercial system expansion • Smith Branch force main construction • Wolf Ranch wastewater lift station • Dove Springs Wastewater Plant rehabilitation (expected completion in 2006) • Lake Water Treatment Plant dewatering facility • Edward’s Aquifer Recharge Zone Inflow and Infiltration testing and repairs 200520042005200420052004 Revenues: Program Revenues Charges for Service$3,482 $2,681$59,201 $51,585$62,683$54,266 Operating Grants & Contributions901176901176 Capital Grants & Contributions13,4741106,66612,05120,14012,161 General Revenues Property Taxes8,3296,9278,3296,927 Sales Taxes8,4967,3968,4967,396 Other Taxes749586749586 Franchise Taxes1,9421,8451,9421,845 Interest5071727324441,239616 Gain on Sale of Capital Assets8591611,0200 Other1,1694669898832,1581,349 Total Revenues$39,908 $20,359$67,749 $64,963$107,657$85,322 Expenses: Culture-recreation4,7024,7734,7024,773 Development2,0611,9562,0611,956 Fire3,7683,8623,7683,862 General government4,4054,0054,4054,005 Interest on long term debt2,2561,2542,2561,254 Police5,9625,8345,9625,834 Streets1,5222,7521,5222,752 Airport2,6061,9632,6061,963 Electric29,02726,23729,02726,237 Sanitation2,8692,7402,8692,740 Stormwater1,2169871,216987 Water Services14,23513,21814,23513,218 Total Expenses$24,676 $24,436$49,953 $45,145$74,629$69,581 Change in net assets before transfers15,232(4,077)17,79619,81833,02815,741 Transfers5,2205,672(5,220)(5,672) Change in net assets20,4521,59512,57614,14633,02815,741 Net Assets as restated - Beginning 113,911 112,316 118,150 104,004 232,061 216,320 Net Assets - Ending$134,363 $113,911$130,726 $118,150$265,089$232,061 (In thousands) Changes in Net Assets Bus-Type ActivitiesGovtl ActivitiesTotal CITY OF GEORGETOWN, TEXAS MD&A 9 REVENUES ƒ For the fiscal year ended September 30, 2005, program revenues from governmental activities totaled $17.9 million, of which $3.5 million resulted from charges for services. This revenue source increased over $800,875 over the prior year, primarily due to growth in the municipal court and development fee areas. ƒ General property taxes totaled $8.3 million. Included in these taxes are real and personal property levies which are assessed October 1, and payable before the following January 31. ƒ Assessed valuations on existing properties increased 1%, while total assessed valuation increased 6% over the prior year. The variance is attributed to $119 million in new and annexed property. ƒ The ad valorem tax rate for fiscal year 2005 was $0.34626 per $100 of assessed valuation. This represented a 7.6% increase over the prior year rate. Of this amount, 5.7% is attributed to operations increases and the remainder is due to tax supported bonds issued in the Spring of 2004. ƒ Sales taxes, the City’s largest source of general government revenue, totaled $8.5 million for fiscal year 2005, which was an increase of 14.9% over the prior year. This increase was primarily due to new commercial development within the City, including a partial year of Wolf Ranch revenue. Sales tax revenues represent 30.3% of the general revenue total, excluding transfers from the return on investment transfers from the utility funds. ƒ Other taxes, which include hotel/motel taxes and automobile inventory taxes, totaled $749,301. ƒ Program revenues are derived from the program itself and reduce the cost of the function to the City. Total program revenues for both governmental and business-type activities are described below. ƒ Governmental activities program revenue was $17.9 million, an increase of over 400% over the prior year. This increase is due to receipt of capital grants and contributions for streets donated to the City by the County, as well as the receipt of funds for a parks trail grant. Program revenue reported in the category "Charges for Services" represents receipts primarily from development and building inspection fees, parks fees, fire billing for services and court fines. Other governmental program revenues included operating grants for parks, fire and police programs. Revenues - Fiscal Year 2005 Charges for Service 58.22% Grants & Contributions 19.54% Property Taxes 7.74% Sales Taxes 7.89%Other 6.60% CITY OF GEORGETOWN, TEXAS MD&A 10 ƒ Business-type activities program revenues totaled $65.9 million, a 4% increase over the prior year. While capital grants and contributions were over $5 million lower than the prior year, charges for services were over $7 million higher. This increase is primarily due to increased customer revenue, which is the most significant of the program revenues. "Charges for Services”, which represent receipts from utility customers for electric, water, wastewater, and sanitation use, increased over 15%. This increase was primarily related to increased purchased power costs, which were passed along to customers, as well as an increase in wastewater rates. Other program revenues include airport fuel sales, hangar rentals and stormwater drainage fees. Primary Government - Functional Expenses for FY 2005 Culture/Rec 6% Public Safety 13% Streets 2% Electric 39% Other 21% Water Services 19% EXPENSES ƒ Expenses for governmental activities totaled $24.7 million, versus $24.4 million in 2004. Major expenditures include salaries for providing services in the public safety area, as well as for public library and recreation programs. Expenses were $239,496 higher than the prior year. Major increases included increases to salary costs resulting from Council's adoption of a public safety compensation program, which provided a step plan to increase public safety salaries for each year of service, as well as the first year of a public safety staffing plan. Salaries also increased due to a 2.5% cost of living adjustment for all other staff. Higher fuel costs also played a role in the increase in operational expenses for programs. ƒ Expenses for business-type activities totaled $49.9 million, an 11% increase over the prior year, which provided electric, water, and wastewater services for customers, as well as airport and stormwater drainage programs. The increase in expenses relates to increased costs of purchased power, as well as expenses related to additional customers and infrastructure maintenance for the utilities. CITY OF GEORGETOWN, TEXAS MD&A 11 FINANCIAL ANALYSIS OF THE CITY’S FUNDS For the fiscal year ended September 30, 2005, the City's governmental funds reflect a combined fund balance of $26.1 million. Included in this year's increase in fund balance is $2 million in General Fund revenues and other financing sources in excess of expenditures and other financing uses. The primary reason for the General Fund's increase in fund balances is due to increased revenues, due to higher than anticipated sales tax and higher property tax collections, as well as expenditure savings in public safety due to open staff positions. In addition, these other changes in fund balances should be noted: ƒ Georgetown Transportation Enhancement Corporation contributed $7 million in cash and debt funding of street improvements to enhance economic development in 2005. ƒ Direct expenditures for public safety totaled $9.1 million. ƒ Parks, recreation and library expenditures totaled $3.8 million. ƒ General government expenditures include $262,615 of social service contributions to different organizations in the community. ƒ Street maintenance expenditures were $1.7 million, a $200,000 decrease from the prior year. This decrease is a reflection of the timing of expenditures for street projects. ƒ The City spent $3.9 million in the Capital Projects Funds, which included facilities improvements and street improvements. GENERAL FUND BUDGETARY HIGHLIGHTS: The following is a brief review of the budgetary changes from the original to the final budget. The City approved two General Fund budget amendments during fiscal year 2005. The amendments increased overall budgeted expenditures by $37,000 from the original budget, representing a .002% increase in appropriations. This increase was offset by program revenues. The amendments consisted of: ƒ $37,000 for funding a Police Department school resource officer. This expenditure was offset by revenue received from the Georgetown Independent School District for the position. ƒ $20,000 was transferred to accommodate a staff position transfer from the Development Services division to Management Services. This transfer did not impact the overall budgeted expenditures. The City also approved the increase to budgeted contingency reserves, from $3,675,000 to $3,930,000. These “rainy day” funds, or funds that are over and above appropriated expenses, are used only in the case of an emergency. CAPITAL ASSETS The City's governmental activities (including a percentage of internal service funds) had invested $152.3 million in a variety of capital assets and infrastructure. The City has $142.7 million invested in its business-type activities capital assets. The detail is reflected in the following schedule: CITY OF GEORGETOWN, TEXAS MD&A 12 BalanceDeletionsBalance 10/1/2004 Additions& Transfers9/30/2005 Non-depreciable Assets: Land$3,292 $750 $4,042 Construction in progress3,583 8,865 $(2,101) 10,347 Other capital assets Equipment14,729 1,770 (147) 16,352 Buildings19,626 2,064 (433) 21,257 Improvements14,459 4,260 - 18,719 Streets88,781 10,768 - 99,549 Less accumulated depreciation (16,206) (2,303) 498 (18,011) Capital Assets - Governmental$128,264 $26,174 $(2,183) $152,255 BalanceDeletionsBalance 10/1/2004 Additions& Transfers9/30/2005 Non-depreciable Assets: Land $1,650 $(6) $1,644 Construction in progress5,081 $11,708 (11,068) 5,721 Other capital assets - Equipment898 68 - 966 Buildings4,969 - - 4,969 Improvements158,500 16,212 - 174,712 Less accumulated depreciation (39,932) (5,425) - (45,357) Capital Assets - Business-Type$131,166 $22,562 $(11,074) $142,654 City-wide Totals$259,430 $48,736 $(13,257) $294,909 *Includes internal service funds assets, which are allocated to governmental activities Change in Capital Assets* (In thousands) Governmental Activities Change in Capital Assets* (In thousands) Business-Type Activities The City prepared a complete inventory of street infrastructure assets in 2003 and 2004 and assigned a value to the inventory based upon the age of the street and construction indexes. During 2005, the City completed its assessment of the condition of the streets inventory for reporting under the modified approach for GASB 34 reporting. The inventory is recorded as a prior period adjustment. An adjustment to the original inventory to decrease the assets by $1.8 million is recorded as a prior period adjustment to reflect the condition of the assets. The City financial policy establishes an average condition level for the City streets. The Pavement Condition Index is a measurement scale for pavement condition, ranging from zero (poor) to 100 for pavement in perfect condition. The Council adopted an average PCI level of 85, to maintain the streets in “good” condition. The PCI for fiscal year 2005 was 91. The City budgets approximately $825,000 annually of General Fund revenues for on- going street maintenance projects, along with the staff costs and other maintenance costs of the street department. In addition, the City also budgets for the approximate $1.2 million of funds received in the dedicated 1/4 cent sales tax for street maintenance. The CITY OF GEORGETOWN, TEXAS MD&A 13 maintenance funds are allocated among various projects identified by the analysis to ensure funds are spent where needed to maintain the PCI adopted by Council. Utility infrastructure maintenance is budgeted within the utility funds. For fiscal year 2005, funding for electric and water services infrastructure maintenance was $8.6 million. For more detailed notes about the City’s capital assets, please see pages 48-50 of the notes to the financial statements. LONG-TERM DEBT ƒ At September 30, 2005, the City had a total of $48.8 million in general obligation debt outstanding. This represents a 30% increase over prior year. This increase reflects the $4.175 million of self-supporting bonds, issued on behalf of the Georgetown Transportation Enhancement Corporation for the Wolf Ranch development improvements and is supported by dedicated sales taxes. Additional information about the City's long -term debt is presented in Note 7 to the financial statements. ƒ The state limits the legal amount of tax levy available for general obligation debt service to $1.25 per $100 valuation. The City's 2005 debt levy equaled $0.11332 per $100 assessed valuation, or 9% of the maximum allowed. ƒ Total utility system revenue debt was $40 million as of September 30, 2005, including new debt of $4 million issued within the Electric and Water Services Funds to fund system expansion, including the expansion of the Dove Springs Wastewater Plant. This increase is 3% greater than debt reported at September 30, 2004. ƒ A detailed analysis of the City’s long-term debt is located on pages 50-54 in the notes to the financial statements. ECONOMIC FACTORS ƒ Unemployment in the City decreased from 4.76% in 2004 to 4.2% in 2005. ƒ Population continued to grow steadily, at 3% annually, yet utility customer growth averaged approximately 5% for all utilities. This variance represents continued growth within the City's extra territorial jurisdiction (ETJ), that receives City utility services. ƒ Retail development continued to expand, with the opening of the Wolf Ranch shopping center, which includes Target, Old Navy and Best Buy retailers. The expansion is evidenced by the overall increase in general sales tax revenue of 14.9% over 2004. 2005 2004 2005 2004 2005 2004 General Obligation Bonds$44,306$33,194$4,509$4,262$48,815$37,456 Revenue Bonds40,06438,90440,06438,904 Obligation under capital lease256369256369 Compensated absence payable1,5231,3305314972,0541,827 Arbitrage rebate payable18181818 Total Long Term Debt$46,103$34,911$45,104$43,663$91,207$78,574 Govtl ActivitiesBus-Type ActivitiesTotal City of Georgetown Outstanding Debt and Long-Term Liabilities (In thousands) CITY OF GEORGETOWN, TEXAS MD&A 14 CONTACTING THE CITY’S FINANCIAL MANAGEMENT This report is designed to provide City Council, citizens, customers, bond rating agencies, investors and creditors with a general overview of the City’s finances. If you have questions about this report or need additional financial information, contact: Finance Division City of Georgetown 113 East 8th Street Georgetown, Texas 78626 (512) 930-3676 www.georgetown.org Basic Financial Statements CITY OF GEORGETOWN, TEXAS STATEMENT OF NET ASSETS SEPTEMBER 30, 2005 Primary Government GovernmentalBusiness-type Activities Activities TOTAL ASSETS: Cash and cash equivalents$2,581,166$3,979,180$6,560,346 Cash and cash equivalents - restricted4,353,6464,353,646 Investments24,389,37411,645,19736,034,571 Investments - restricted824,577824,577 Prepaid items219,6501,352,0761,571,726 Accounts receivable: Services (net of allowance for uncollectibles)9,532,5639,532,563 Other3,409,014111,9093,520,923 Internal balances(360,999)360,999 Inventories256,0121,355,0381,611,050 Long-term note receivables1,193,5867,726,8158,920,401 Deferred charges - bond issuance costs903,9631,366,1602,270,123 Capital assets: net of accumulated depreciation38,317,659135,289,131173,606,790 Land4,042,5711,644,5895,687,160 Streets99,548,29999,548,299 Construction in progress10,346,0915,720,85816,066,949 TOTAL ASSETS $184,846,386$185,262,738$370,109,124 LIABILITIES AND NET ASSETS: Liabilities: Current Liabilties: Accounts payable$2,170,993$5,394,689$7,565,682 Accrued interest 249,646259,257508,903 Total current liabilities2,420,6395,653,9468,074,585 Liabilities payable from restricted assets: Construction contracts and retainages payable361,254361,254 Customer deposits741,179741,179 Total liabilities payable from restricted assets1,102,4331,102,433 Unearned revenue1,959,9262,675,5424,635,468 Noncurrent liabilities: Due within one year 3,013,3933,426,8586,440,251 Due in more than one year43,089,37641,677,69084,767,066 Total liabilities 50,483,33454,536,469105,019,803 Net Assets: Invested in capital assets (net of related debt)107,692,31998,081,179205,773,498 Restricted for: Debt Service508,151508,151 Capital Projects16,328,6051,251,84417,580,449 Unrestricted9,833,97731,393,24641,227,223 Total net assets 134,363,052130,726,269265,089,321 TOTAL LIABILITIES AND NET ASSETS $184,846,386$185,262,738$370,109,124 The notes to the financial statements are an integral part of this statement. CITY OF GEORGETOWN, TEXAS STATEMENT OF ACTIVITIES FISCAL YEAR ENDED SEPTEMBER 30, 2005 Charges for Operating GrantsCapital GrantsGovernmentalBusiness-Type Expenses Services& Contributions& Contributions ActivitiesActivitiesTotal Functions/Programs Primary government Governmental Activities Culture-recreation$4,701,552$812,920$88,090$589,923$(3,210,619)$$(3,210,619) Development2,061,0171,350,955(710,062)(710,062) Fire3,767,816478,3781,07539,653(3,248,710)(3,248,710) General government4,405,4361,45212,215(4,391,769)(4,391,769) Police5,961,731838,302123,087(5,000,342)(5,000,342) Streets1,522,161676,21412,844,75411,998,80711,998,807 Interest on long term debt2,256,135(2,256,135)(2,256,135) Total governmental activities 24,675,848 3,482,007 900,68113,474,330 (6,818,830)(6,818,830) Business -type Activities Airport$2,606,270$2,352,094$$134,358$$(119,818)$(119,818) Electric29,026,47535,002,038952,5126,928,0756,928,075 Sanitation2,868,7583,227,268358,510358,510Stormwater1,216,2191,572,8541,785,8712,142,5062,142,506 Water14,234,86617,046,7313,792,8876,604,7526,604,752 Total business-type activities 49,952,588 59,200,985 6,665,628 15,914,025 15,914,025 Total primary government $74,628,436 $62,682,992 $900,681$20,139,958 $(6,818,830)$15,914,025 $9,095,195 General revenues: Property Tax$8,329,395$8,329,395 Sales Tax8,496,1608,496,160 Taxes - other749,301749,301 Franchise taxes1,942,2461,942,246 Interest on investments507,038 $732,4611,239,499 Gain on sale of capital assets859,286160,9491,020,235 Other1,167,654988,5662,156,220 Transfers5,220,063(5,220,063)0 Total general revenues and transfers27,271,143(3,338,087)23,933,056 Change in Net Assets 20,452,313 12,575,938 33,028,251 Net Assets as restated, beginning of the year113,910,739118,150,331232,061,070 Net Assets, end of the year $134,363,052 $130,726,269 $265,089,321 The notes to the financial statements are an integral part of this statement. Program Revenues Primary Government Net (Expense) Revenue and Changes in Net Assets Fund Financial Statements CITY OF GEORGETOWN, TEXAS BALANCE SHEET GOVERNMENTAL FUNDS AS OF SEPTEMBER 30, 2005 GEORGETOWN TRANSPORTATIONGENERALNONMAJORTOTAL ENHANCEMENTDEBTCAPITALGOVERNMENTALGOVERNMENTAL GENERAL CORPORATION SERVICE PROJECTS FUNDS FUNDS ASSETS Cash and cash equivalents$1,789,388$63,766$455,978$2,309,132 Investments5,982,547$8,865,547$504,1506,655,7881,470,62223,478,654 Accounts receivable (net of allowance for uncollectible accounts): Delinquent taxes167,67588,604589256,868 Sales tax887,901438,997244,0381,570,936 Grants 123,692123,692 Other 444,544653,964263,3601,361,868 Prepaid items204,750 204,750 Inventories897 897 Long-term note receivable1,193,586 1,193,586 TOTAL ASSETS $10,671,288$9,958,508$592,754$6,719,554$2,558,279$30,500,383 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable $1,259,787$94,942$159,295$158,780$1,672,804 Due to other funds 345,09315,906360,999 Unearned revenue 1,940,547$84,603300,2852,325,435 Total liabilities 3,200,33494,94284,603504,388474,9714,359,238 Fund Balance: Reserved for: Encumbrances975,842 2,473,528 1,465,6711,020,7385,935,779 Inventories897 897 Debt service 508,151508,151 Prepaid items204,750 204,750 Special programs 812,902812,902 Unreserved, reported in: General fund6,289,465 6,289,465 Capital projects funds7,390,0384,749,495249,66812,389,201 Designated for net unrealized gains Total fund balance7,470,9549,863,566508,1516,215,1662,083,30826,141,145 TOTAL LIABILITIES AND FUND BALANCE $10,671,288$9,958,508$592,754$6,719,554$2,558,279$30,500,383 The notes to the financial statements are an integral part of this statement. CITY OF GEORGETOWN, TEXAS RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS SEPTEMBER 30, 2005 Total fund balance - total governmental funds$26,141,145 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not current financial resources and therefore are not reported in the govermental funds balance sheet.145,504,140 The City uses internal service funds to charge the costs of certain activities, such as capital assets, administrative services and information technology to appropriate functions in other funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets. The effect of this consolidation is to increase net assets.7,678,789 Premiums, discounts and debt issuance costs have not been included in the fund financial statements.903,963 Bonds payable and contractual obligations are not due and payable in the current period therefore have not been included in the fund financial statements.(44,306,603) Accrued liabilities for compensated absences are not due and payable in the current period therefore have not been included in the fund financial statements.(1,400,880) Capital leases are not due and payable in the current period, therefore have not been included in the fund financial statements.(255,702) Liabilities for arbitrage are not due and payable in the current period therefore have not been reflected in the fund financial statements.(17,663) Revenues from property taxes are deferred in the fund financial statements until they are considered available to fund current expenditures, but such revenues are recognized in the government- wide statements.252,278 Revenues recognized at the government-wide financial statements are not recognized as revenue in the fund financial statements for court fines.113,231 Interest is accrued on outstanding debt in the government-wide financial statements, whereas in the fund financial statements interest expense is reported when due.(249,646) Net Assets of Governmental Activities $134,363,052 The notes to financial statements are an integral part of this statement. CITY OF GEORGETOWN, TEXAS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2005 GEORGETOWN TRANSPORTATIONGENERALNONMAJORTOTAL ENHANCEMENTDEBTCAPITALGOVERNMENTALGOVERNMENTAL GENERAL CORPORATION SERVICE PROJECTS FUNDS FUNDS REVENUES: Property taxes: Current$5,470,721$2,708,365$8,179,086 Delinquent107,14553,943161,088 Penalties and interest67,976 67,976 Other147,427$283,676431,103 Property assessment 89,13489,134 Sales tax4,823,378$2,448,5211,224,2618,496,160 Franchise taxes1,942,246 1,942,246 Licenses and permits1,266,295 1,266,295 Charges for service823,980131,960955,940 Fines and forfeitures714,59659,286773,882 Donations and grants1,155797,667798,822 Investment income166,095171,31947,098$72,99149,535507,038 Other revenue412,2881,347,125110,760264,0112,134,184 Total revenues 15,943,3023,966,9652,809,406183,7512,899,53025,802,954 EXPENDITURES: Current: Culture - recreation 3,808,0221,389,6875,197,709 Development1,933,07619,3981,952,474 Fire services 3,518,597156,4363,675,033 General government1,802,752184,2941,987,046 Highways and streets1,691,87649,3411,741,217 Police 5,603,521194,9115,798,432 Capital outlay 6,774,6273,812,0581,329,39111,916,076 Debt service: Principal retirement 2,500,9012,500,901 Interest and fiscal charges 100,0001,670,424127,2251,897,649 Total expenditures 18,357,8447,058,9214,171,3253,939,2833,139,16436,666,537 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (2,414,542)(3,091,956)(1,361,919)(3,755,532)(239,634)(10,863,583) OTHER FINANCING SOURCES (USES): Transfers in 4,804,6051,165,372313,165116,8916,400,033 Transfers out (355,914)(1,072,849)(1,124,326)(138,122)(2,691,211) Sale of property 896,113896,113 Payment to refunding escrow agent(9,243,904)(9,243,904) Certificate of obligation bond issued4,175,0009,180,1669,030,00022,385,166 Total other financing sources (uses) 4,448,6913,102,1511,101,6349,114,952(21,231)17,746,197 NET CHANGE IN FUND BALANCES2,034,14910,195(260,285)5,359,420(260,865)6,882,614 FUND BALANCES, Beginning of period5,436,8059,853,371768,436855,7462,344,17319,258,531 FUND BALANCES, End of period $7,470,954$9,863,566$508,151$6,215,166$2,083,308$26,141,145 The notes to financial statements are an integral part of this statement. CITY OF GEORGETOWN, TEXAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES FISCAL YEAR ENDED SEPTEMBER 30, 2005 Net change in fund balances - governmental funds $6,882,614 Amounts reported for governmental activities in the statement of activities are different because: The City uses internal service funds to charge the costs of certain activities, such as fleet management and information technology to appropriate functions in other funds. The assets and liabilities of internal service funds are allocated to the governmental activities on the statement of net assets. The effect of this consolidation is to increase net assets. The entry on the statement of activities reflects the change for FY 2005, which is allocated to governmental activities 1,081,503 Current year capital outlays are expenditures in the fund statements, but are shown as increases in capital assets in the government-wide financial statements. The total reflects $6,638,224 in construction in progress additions. The effect of removing the 2005 capital outlays is to increase net assets.24,780,113 Depreciation is not recognized as an expenditure in governmental funds since it does not require the use of current financial resources. The effect of recording current year depreciation is to decrease net assets.(1,144,983) Amortization of costs associated with debt issuances are not recognized as an expenditure in governmental funds since it does not require the use of current financial resources. The effect of recording the current year's amortization is to decrease net assets.(279,736) Current year long-term debt principal payments on contractual obligation bonds payable and capital lease payments are expenditures in the fund financial statements,but are shown as reductions in long term debt in the government-widefinancial statements.11,386,320 The notes to financial statements are an integral part of this statement.(continued) Current year bond proceeds on certificates of obligation ($22,385,165) and related debt issuance costs ($571,318), along with the transferred capita lease ($368,787) are not shown as revenue and expenditures in the government- wide financial statements.$(22,182,634) Interest is accrued on outstanding debt in the government-wide financia statements, whereas in the fund financial statements, the expenditure is reported when due.(23,562) Additions to vested sick leave and vacation liabilities are not shown in the fund financial statements. The net effect of the current year's increase is to decrease net assets.(184,577) Revenue from property taxes and court fines are recognized in the fund financial statements on the modified accrual basis but are recognized on the accrual basis in the government-wide financial statements.137,255 Change in Net Assets of Governmental Activities $20,452,313 The notes to financial statements are an integral part of this statement. CITY OF GEORGETOWN, TEXAS GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FISCAL YEAR ENDED SEPTEMBER 30, 2005 2005 ACTUAL BUDGETARYVARIANCE TO ORIGINALFINALBASISFINAL BUDGET REVENUES: Property taxes : Current$5,475,000 $5,475,000$5,470,721$(4,279) Delinquent32,000 32,000107,14575,145 Penalties and interest30,000 30,00067,97637,976 Sales tax4,300,000 4,300,0004,823,378523,378 Franchise taxes1,981,400 1,981,4001,942,246(39,154) Licenses and permits 876,625 876,6251,266,295389,670 Charges for services 776,100 813,100823,98010,880 Fines and forfeitures 595,000 595,000714,596119,596 Other taxes180,000 180,000147,427(32,573) Investment income35,000 35,000167,426132,426 Miscellaneous434,100 434,100596,063161,963 Total revenues 14,715,225 14,752,22516,127,2531,375,028 EXPENDITURES: Current: Culture - recreation3,858,311 3,858,3113,833,93324,378 Development2,002,600 2,022,6002,007,54315,057 Fire services3,656,148 3,656,1483,519,995136,153 General government 1,979,439 1,959,4391,800,747158,692 Highways and streets1,975,792 1,975,7921,946,29829,494 Police services5,981,280 6,018,2805,725,297292,983 Total expenditures 19,453,570 19,490,57018,833,813656,757 EXCESS EXPENDITURES OVER REVENUES (4,738,345) (4,738,345)(2,706,560)2,031,785 OTHER FINANCING SOURCES (USES): Transfers in 4,675,500 4,675,5004,804,605129,105 Transfers out (357,785) (357,785)(355,914)1,871 Total other financing sources (uses) 4,317,715 4,317,7154,448,691130,976 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES)(420,630) (420,630)1,742,1312,162,761 FUND BALANCES, Beginning of period4,370,172 4,370,1724,744,968374,796 FUND BALANCES, End of period $3,949,542$3,949,5426,487,099$2,537,557 Adjustments to GAAP: Reverse current year encumbrances975,842 Record net unrealized gain on investments8,013 FUND BALANCE - GAAP BASIS, End of period $7,470,954 The notes to the financial statements are an integral part of this statement. BUDGETED AMOUNTS CITY OF GEORGETOWN, TEXAS STATEMENT OF NET ASSETS PROPRIETARY FUNDSAS OF SEPTEMBER 30, 2005 Business-type Activities Enterprise Funds WATEROTHER ELECTRICSERVICESENTERPRISEGOVERNMENTAL ACTIVITIES FUND FUND FUNDS TOTAL INTERNAL SERVICE FUNDS ASSETS: Current Assets: Cash and cash equivalents$941,256$2,814,333$223,591$3,979,180$272,034 Cash and cash equivalents - restricted170,4713,758,565424,6104,353,646 Investments3,146,3347,750,322748,54111,645,197910,720 Investments - restricted570,708253,869824,577 Prepaid expenses1,352,0761,352,07614,900 Accounts receivable: Services (net of allowance for uncollectibles)5,895,6792,859,453777,4319,532,56395,650 Other29,93081,979111,909 Due from other funds415,360415,360 Inventories1,311,64843,3901,355,038255,115 Total current assets 12,066,02619,203,9782,299,54233,569,546 1,548,419 Noncurrent Assets: Long-term note receivables1667,726,6497,726,815 Deferred charges - bond issuance costs283,086923,909159,1651,366,160 Capital assets: Land and land rights193,735469,354981,5001,644,589214,065 Distribution system48,232,974110,834,0559,923,366168,990,395 Buildings and improvements73,7073,019,7947,597,18710,690,6881,279,886 Machinery, furniture and equipment536,096236,382193,627966,10514,481,240 Construction in progress486,6775,035,060199,1215,720,858124,879 Less accumulated depreciation (16,423,792)(23,588,226)(5,346,039)(45,358,057)(9,349,592) Total capital assets (net of accumulated depreciation)33,099,39796,006,41913,548,762142,654,578 6,750,478 Total noncurrent assets 33,382,649104,656,97713,707,927151,747,553 6,750,478 TOTAL ASSETS $45,448,675$123,860,955$16,007,469$185,317,099$8,298,897 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable$4,049,110$881,851$463,728 $5,394,689$498,189 Compensated absence87,53264,92926,432178,89340,013 Due to other funds 54,36154,361 Current portion of long-term debt782,2642,221,749243,9523,247,965 Accrued interest 58,443173,33227,482259,257 Total current liabilities payable from unrestricted assets 4,977,3493,341,861815,9559,135,165 538,202 Current liabilities payable from restricted assets: Construction contracts and retainages payable361,254361,254 Customer deposits741,179741,179 Total current liabilities payable from restricted assets 741,179361,2541,102,433 Total current liabilities 5,718,5283,703,115815,95510,237,598538,202 Noncurrent liabilities: Compensated absence169,506128,22054,530352,25681,906 Unearned revenue2,675,5422,675,542 Long-term debt9,085,77227,974,2284,265,43441,325,434 Total noncurrent liabilities 9,255,27830,777,9904,319,96444,353,23281,906 Total liabilities 14,973,80634,481,1055,135,91954,590,830 620,108 Net Assets: Invested in capital assets (net of related debt)23,231,36165,810,4429,039,37698,081,1796,750,478 Restricted for: Future construction1,251,8441,251,844 Unrestricted7,243,50822,317,5641,832,17431,393,246928,311 Total net assets 30,474,86989,379,85010,871,550130,726,269 7,678,789 TOTAL LIABILITIES AND NET ASSETS $45,448,675$123,860,955$16,007,469$185,317,099$8,298,897 The notes to the financial statements are an integral part of this statement. CITY OF GEORGETOWN, TEXAS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2005 Business-type Activities Enterprise Funds WATEROTHERGOVERNMENTAL ELECTRICSERVICESENTERPRISEACTIVITIES FUND FUND FUNDS TOTAL INTERNAL SERVICE FUNDS OPERATING REVENUES: Charges for sales and services: Service charges $8,131,722 Electric$33,800,761$33,800,761 Water $10,530,22710,530,227 Waste 6,075,181$3,150,4939,225,674 Other1,201,277441,3214,001,7255,644,323 Total operating revenues35,002,03817,046,7297,152,21859,200,9858,131,722 OPERATING EXPENSES: Electric2,721,5072,721,507 Water 1,740,8481,740,848 Waste 1,207,027 1,207,027 Depreciation2,035,0772,681,160709,2515,425,4881,158,113 Utility contracts23,790,6964,490,3782,868,75831,149,832 Plant management 2,719,194 2,719,194 Other 2,903,3562,903,3568,043,625 Total operating expenses28,547,28012,838,6076,481,36547,867,2529,201,738 NET OPERATING INCOME (LOSS)6,454,7584,208,122670,85311,333,733(1,070,016) NONOPERATING REVENUES (EXPENSES): Investment earnings131,732573,38627,343732,46152,479 Donations and grants 134,358134,358 Interest and fiscal charges(479,195)(1,396,256)(209,881)(2,085,332) Gain (loss) on disposed assets160,949160,949(57,594) Other599,7031,495,88963,8072,159,399229,192 Total nonoperating revenues (expenses)252,240833,96815,6271,101,835224,077 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS6,706,9985,042,090686,48012,435,568(845,939) CONTRIBUTIONS AND TRANSFERS: Capital contributions788,4342,786,1281,785,8715,360,433416,199 Transfers in 1,711,224 Transfers out(2,938,894)(1,905,618)(375,551)(5,220,063)(199,981) Total contributions and transfers(2,150,460)880,5101,410,320140,3701,927,442 CHANGE IN NET ASSETS4,556,5385,922,6002,096,80012,575,9381,081,503 TOTAL NET ASSETS - beginning25,918,33183,457,2508,774,750118,150,3316,597,286 TOTAL NET ASSETS - ending $30,474,869$89,379,850$10,871,550$130,726,269$7,678,789 The notes to the financial statements are an integral part of this statement. CITY OF GEORGETOWN, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2005 Business-type Activities Enterprise Funds WATEROTHERGOVERNMENTAL ELECTRICSERVICESENTERPRISEACTIVITIES FUND FUND FUNDS TOTAL INTERNAL SERVICE FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers$34,739,266$20,492,357$7,030,381$62,262,004$8,100,989 Payments to suppliers(22,575,964)(8,951,796)(5,115,466)(36,643,226)(3,691,789) Franchise fees(700,348)(344,308)(94,010)(1,138,666) Payments to employees for services(1,349,589)(1,060,047)(434,968)(2,844,604)(4,159,991) Net cash provided by (used for) operating activities10,113,36510,136,2061,385,93721,635,508249,209 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in 1,711,224 Transfers out(2,938,894)(1,905,618)(375,551)(5,220,063)(199,981) Payments from (to) other funds(292,458)(59,475)(351,933) Net cash provided by (used for) noncapital financing activities(2,938,894)(2,198,076)(435,026)(5,571,996)1,511,243 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITES: Acquisition of capital assets(3,607,388)(7,441,532)(396,019)(11,444,939)(1,550,855) Gain on sale of capital assets160,949160,949 Donations and grants 134,358134,358 Impact fees 970,482970,482 Proceeds from issuance of long-term debt575,0003,450,000435,0004,460,000 Principal paid on revenue and certificates of obligation bonds(765,552)(2,099,199)(264,349)(3,129,100) Interest paid on revenue and certificates of obligation bonds(459,893)(1,313,865)(208,468)(1,982,226) Net asset transfer 9,2429,242 Net cash provided by (used for) capital and related financing activities(4,257,833)(6,263,923)(299,478)(10,821,234)(1,550,855) CASH FLOWS FROM INVESTING ACTIVITIES: Interest received131,732573,38627,343732,46152,479 Change in temporary investments(2,525,615)254,063(267,504)(2,539,056)(293,866) Net cash provided by (used for) investing activities(2,393,883)827,449(240,161)(1,806,595)(241,387) Net increase (decrease) in cash and cash equivalents522,7552,501,656411,2723,435,683(31,790) Cash and cash equivalents at beginning of year588,9724,071,242236,9294,897,143303,824 Cash and cash equivalents at end of year1,111,7276,572,898648,2018,332,826272,034 Classified as: Current assets941,2562,814,333223,5913,979,180272,034 Restricted assets170,4713,758,565424,6104,353,646 Total $1,111,727 $6,572,898 $648,201 $8,332,826 $272,034 Non-cash disclosure Developer contributions$788,434$2,786,128$1,785,871$5,360,433 Equity transfers to internal service funds $12,668 Governmental transfers to internal service funds 416,199 Capital lease transfer to general debt (368,787) The notes to the financial statements are an integral part of this statement.(continued) CITY OF GEORGETOWN, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDSFISCAL YEAR ENDED SEPTEMBER 30, 2005 Business-type Activities Enterprise Funds WATEROTHERGOVERNMENTAL ELECTRICSERVICESENTERPRISEACTIVITIES FUND FUND FUNDS TOTAL INTERNAL SERVICE FUNDS OPERATING INCOME (LOSS)$6,454,758$4,208,122$670,853$11,333,733$(1,070,016) Adjustments to reconcile operating income (loss) to cash provided by (used in) operating activities: Depreciation2,035,0772,681,160709,2515,425,4881,158,113 Other income599,703525,40763,8071,188,917229,192 Bad debt expense26,2167,8121,88735,915 Increase (decrease) in unearned revenue1,410,6181,410,618(11,704) Decrease (increase) in prepaid expenses(422,405)(422,405) Decrease (increase) in inventories191,041(30,699)160,342(60,349) Decrease (increase) in accounts receivable(1,052,917)(445,341)(187,531)(1,685,789)(30,733) Decrease (increase) in customer deposits164,226164,226 Decrease (increase) in notes receivable1,947,1321,947,132 Increase (decrease) in accounts payable1,669,734217,965155,3402,043,03926,033 Increase (decrease) in compensated absences payable25,5275,7363,02934,2928,673 Net cash provided by operating activities$10,113,365$10,136,206$1,385,937$21,635,508$249,209 The notes to the financial statements are an integral part of this statement. CITY OF GEORGETOWN, TEXAS STATEMENT OF FIDUCIARY NET ASSETS AGENCY FUNDS AS OF SEPTEMBER 30, 2005 ASSETS: Cash and cash equivalents$25,786 Accounts receivable1,223,823 TOTAL ASSETS $1,249,609 LIABILITIES: Accounts payable$29,381 Due to other governments1,220,228 TOTAL LIABILITIES $1,249,609 The notes to financial statements are an integral part of this statement. Notes to the Financial Statements CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 34 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting and reporting policies of the City of Georgetown, Texas, (“City”), included in the accompanying basic financial statements conform to the generally accepted accounting principles (GAAP) applicable to state and local governments. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The following notes to the financial statements are an integral part of the City's Comprehensive Annual Financial Report. A. Financial Reporting Entity The City of Georgetown was incorporated under the laws of the State of Texas in 1848 and operates under a Council-Manager form of government. The City’s financial statements include the accounts of all City operations. Generally accepted accounting principles require all funds that are controlled by or are dependent on the City Council to be included in the City’s financial statements. The reporting entity is the primary government, or the City, and those component units for which the primary government is financially accountable. Financial accountability is defined as the appointment of a voting majority of the potential component unit‘s board and either the ability to impose its will by the primary government or the possibility that the component unit will provide a financial benefit or impose a financial burden on the primary government. Blended component units, although legally separate entities are, in substance, part of the government’s operations and so data from these units are combined with the data of the primary government. The following blended component unit has a September 30 year end. BLENDED COMPONENT UNIT Georgetown Transportation Enhancement Corporation (GTEC) is a legally separate entity from the City and is governed by a seven member board appointed by City Council, including four Council members. The City Council maintains budgetary control over the corporation. The City Manager serves as the General Manager of the corporation and City’s Director of Finance and Administration acts as the Financial Manager. For financial reporting purposes, GTEC is presented as a blended component unit within City operations because its sole purpose is to utilize sales tax revenues for the improvement of the City’s transportation system. The revenues and expenditures for GTEC are accounted for in a general capital projects fund. The City issues debt on behalf of GTEC in exchange for pledged sales tax revenue that is transferred to the City to reimburse for debt service related to the bonds. GTEC’s debt is shown in the Governmental Activities in the Statement of Net Assets. RELATED ORGANIZATIONS The Mayor and City Council are responsible for appointing a voting majority of the members of some local boards and commissions, but the City's accountability for these organizations does not extend beyond making the appointments. These entities are the Georgetown Industrial Development Corporation, Georgetown Hospital Authority, and Georgetown Higher Education Finance Corporation. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 35 B. Basis of Presentation BASIC FINANCIAL STATEMENTS The basic financial statements include both government-wide financial statements (based on the City as a whole) and fund financial statements. Both sets of financial statements classify activities as either governmental, which are supported by taxes and intergovernmental revenues, or business-type activities, which rely on fees and charges for support. Government-wide financial statements. The government-wide Statement of Activities demonstrates the degree to which the direct expenses of a given program or function are offset by the program’s revenues. Direct expenses are those that are clearly identifiable with a specific program. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given program and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Taxes and other items not properly included among program revenues are reported instead as general revenues. The effect of interfund activity within the governmental and business- type activities columns has been removed from these statements. Fund financial statements. The City segregates transactions related to certain functions or activities in separate funds in order to aid financial management and to demonstrate legal compliance. Each fund is considered a separate accounting entity and the operations of each fund are accounted for using a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Separate statements are presented for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. These statements present each major fund as a separate column on the fund financial statements; all non-major funds are aggregated and presented in a single column. The government wide focus is on the sustainability of the City as an entity and the change in net 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 a different focus, which allows the reader to compare and analyze the information to enhance the usefulness of the statements. GOVERNMENTAL FUND TYPES Governmental Funds are those funds through which most governmental functions typically are financed. The measurement focus of governmental funds (in the fund financial statements) is on the sources, uses and balance of current financial resources and include the General Fund, Special Revenue Funds, Debt Service Fund and Capital Projects Funds. The individual funds are described as follows: Major Governmental Funds General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Georgetown Transportation Enhancement Corporation (GTEC) – This capital projects fund is used to account for the City’s 4B Corporation, created to administer the voter approved ½ cent sales tax for transportation improvements that aid in economic development efforts. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 36 Debt Service Fund - The Debt Service Fund is used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs. General Capital Projects Funds – This capital projects fund is used to account for financial resources to be used for the acquisition or construction of parks, buildings, and other facilities. Such resources are derived from proceeds of general obligation bonds or other sources of revenue specifically set aside for capital projects. Non-major Governmental Funds Special Revenue Funds - The Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than expendable trusts or major capital projects) that are restricted to expenditures for specified purposes. Streets Capital Projects Fund – This capital projects fund is used to account for financial resources used to construct major streets utility infrastructure. PROPRIETARY FUND TYPES The Proprietary Fund Types are used to account for the City's organization and activities which are similar to those often found in the private sector. These funds are financed and operated in a manner similar to private business enterprises – where the intent of the City is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered mainly through user charges; or where the governing body has decided that periodic determination of revenues earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. Major Proprietary Funds Electric Fund – This fund accounts for the City’s electric utility, including operations, maintenance of the infrastructure and expansion of the system within the City’s service territory. Water Services Fund – This fund accounts for the City’s water, sewer and water reuse systems, including operations, contracted maintenance, internal maintenance, expansion of the system within the City’s service territory and the costs of environmental mandates that arise. Non-major Proprietary Funds Enterprise Funds - The funds that are operated as enterprise funds within the City but are not considered major funds are the Sanitation, Stormwater Drainage and Airport Funds. Internal Service Funds - The Internal Service Funds, which provide services primarily to other funds of the government, are presented in the summary form as part of the proprietary fund financial statements. The financial statements of the internal service funds are allocated in the governmental column when presented at the government-wide level. Various operations are accounted for as internal service funds, such as operational costs associated with automobile and heavy equipment owned by the City and made available to various departments, costs related to maintaining and repairing City owned facilities, operational costs associated with the City's computer equipment within various departments, as well as jointly shared administrative departments. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 37 Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the proprietary funds principal on-going operations. Operating expenses for the proprietary funds include the cost of personnel and contractual services, supplies and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. FIDUCIARY FUND TYPE – AGENCY FUNDS The City’s fiduciary fund is presented in the fund financial statements by type. Since by definition, these assets are being held for the benefit of a third party (cafeteria plan participants, local grantees, public improvement district, etc.) and cannot be used to address activities or obligations of the government, these funds are not incorporated in the government-wide statements. C. Measurement Focus/Basis of Accounting The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Measurement focus refers to what is being measured and basis of accounting refers to timing of revenue and expenditure recognition in the financial statements. The government-wide statements and fund financial statements for proprietary funds are reported using the economic resources measurement focus and the accrual basis of accounting. The agency fund also uses the accrual basis of accounting. The economic resources measurement focus means all assets and liabilities (whether current or non-current) are included on the statement of net assets and the operating statements present increases (revenues) and decreases (expenses) in net total assets. Under the accrual basis of accounting, revenues are recognized when earned, including unbilled utility services which are accrued. Expenses are recognized at the time the liability is incurred. Private-sector standards of accounting and financial reporting issued prior to November 30, 1989 generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private- sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The City has elected not to follow private-sector guidance issued subsequent to November 30, 1989. Governmental fund financial statements are reported using the current financial resources measurement focus and are accounted for using the modified accrual basis of accounting. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City considers all revenues available if they are collected within sixty (60) days after year-end. Expenditures are recognized when the related fund liability is incurred, if measurable, except for principal and interest on general long-term debt, which are recorded when due, and compensated absences, which are recorded when payable from current available financial resources. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 38 Ad valorem, sales, hotel, and franchise tax revenues recorded in the Governmental Fund Types are recognized under the susceptible to accrual concept. Licenses and permits, charges for services, fines and forfeitures, and miscellaneous revenues (except earnings on investments) are recorded as revenues when received in cash because they are generally not measurable until actually received. Investment earnings are recorded as earned since they are measurable and available. D. Budgets At least 30 days prior to the end of each fiscal year, the City Manager submits a proposed budget presenting a complete financial plan for the ensuing fiscal year to the City Council (the Council). Public hearings are conducted, at which time all interested persons' comments concerning the budget are heard. The budget must be legally adopted by the Council through passage of an ordinance no later than the twenty-seventh day of the last month of the fiscal year. Formal budgetary integration is employed as a management control device during the year for all Governmental and Proprietary Fund Types. Budgets for all funds were legally adopted for the period. Budgetary control is exercised at the division level. All budgets are prepared on the budgetary basis, recognizing encumbrances outstanding at year-end as expenditures against that year’s appropriation. These encumbrances are reconciled to generally accepted accounting principles where appropriate. The Council may transfer any unencumbered appropriation balance or portion thereof from one division, office, department or agency to another at any time. The City Manager has authority, without Council approval, to transfer appropriation balances from one expenditure account to another within a single division, office, department, or agency of the City; however, unbudgeted transfers between funds are prohibited. The Council may authorize by a majority plus one vote, an emergency expenditure as an amendment to the original budget, but only in a case of grave public necessity, to meet an unusual and unforeseen condition that could not have been included in the original budget through the use of reasonable, diligent thought and attention. Budget amounts are as originally adopted, or as transferred pursuant to authorization of the City Manager or amended by the City Council. Individual amendments were not material in relation to the original appropriations. Unencumbered appropriations lapse each year at September 30. The Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual- General Fund presents a comparison of budgetary data to actual results. The General Fund utilizes the same basis of accounting for both budgetary purposes and actual results, except for the effect of encumbrances and unrealized investment gains and losses, which are reconciled to the actual results for this comparison. E. Encumbrances Encumbrance accounting is employed as an extension of formal budgetary control in all funds. Encumbrance accounting is a process whereby purchase orders, contracts and other commitments for the expending of monies are recorded in order to reserve that portion of the applicable appropriation. Outstanding year-end encumbrances are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitments are carried forward into the subsequent fiscal year. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 39 F. Cash and Investments For cash flow purposes, cash and cash equivalents consist of demand deposits, certificates of deposits and deposits in authorized investment pools. The operating cash balances from all funds are consolidated in pooled cash and investment accounts. Excess pooled balances are invested in U.S. Treasury securities, U.S. Government agency securities, fully collateralized money market funds and local government investment pools. Maturities on all investments are consistent with the City’s cash flow requirements. Investments are stated at fair value, or market price as of September 30, 2005. Interest earnings are then allocated to each fund based on average monthly pooled equity balances. Separate cash and investment accounts are maintained for restricted cash such as debt service and bond proceeds reserved for future construction. G. Restricted Assets Historically, the utility funds, based on certain bond covenants, were required to establish and maintain prescribed amounts of resources that could be used only to service outstanding debt. In July 1998 all outstanding revenue bonds were defeased and debt covenants modernized, eliminating required debt reserves in utility funds. Included in the restricted assets are capital recovery fees (impact fees), that are, by law, restricted for future capital improvements. In addition, the funds also maintain restricted assets for construction of future debt funded capital improvements. Restricted assets consist of cash and investments, including customer deposits. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. H. Long-term Receivables As part of the Del Webb Development Agreement that provided infrastructure improvements for Sun City Texas, the City funded water, wastewater and other improvements for a 10,500 unit development. In April 2003, the City and Del Webb agreed to the Seventh Amendment to the Development Agreement, whereby the number of units in Sun City was reduced to 5,000 and costs already spent associated with the additional units were identified as "stranded". As part of the Seventh Amendment, Del Webb will repay the stranded costs over seven years at 5.25% interest, as well as a minimum 300 units, annually for seven years, of previously agreed upon service improvement fees for improvements in Sun City. The outstanding balance as of September 30, 2005 was $7,683,184 in the Water Services Fund and $1,193,586 in the General Fund. This agreement is discussed in detail in the Commitments and Contingency section of these notes. Total long-term receivables in the Water Services Fund is $7,726,649, which also includes long term tap repayment plans from customers. I. Inventories Inventories consist of motor fuel, office and other supplies valued at the weighted average cost method and are recognized as expenditures or expenses when used. J. Interfund Receivables and Payables Short-term advances between funds are accounted for in the appropriate interfund receivable and payable accounts. Negative balances incurred in pooled cash at year-end are treated as interfund receivables of the Water Fund and interfund payables of the deficit fund. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 40 K. Interfund Transactions All legally authorized transfers have been appropriately presented as interfund transfers and are included in the fund financial statements of both Governmental and Proprietary Fund Types. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. L. Intergovernmental Revenues Intergovernmental revenues represent entitlements and shared revenues which are accounted for within the fund financed. Such revenues, received for purposes normally financed through the general government, are accounted for within the Special Revenue Funds. M. Compensated Absences All employees may accumulate a maximum of two times their annual vacation, up to an absolute cap of 240 hours, or 30 days. Upon termination, non-Civil Service employees are paid for one-half of their accumulated sick leave up to a maximum of 120 days, as well as any unused accumulated vacation hours. Upon termination, Civil Service employees are paid for the entire balance of their sick leave earned after October 30, 2003 or October 30, 2005 (the effective date of the regulations in the City for fire civil service and police civil service employees, respectively), up to a maximum of 90 days. Civil Service employees hired prior to the effective date of the adoption of Civil Service regulations are eligible under city policy to receive one-half of their sick leave up to 120 days. Sick leave in excess of the maximums for both regular and Civil Service employees is not paid upon termination, but will be paid only upon illness while in the employ of the city. Accumulated vacation and sick leave, which is expected to be liquidated with expendable available financial resources, is reported as an expenditure and a fund liability of the governmental fund that will pay it. Amounts of accumulated vacation leave within governmental funds that are not expected to be liquidated with expendable available financial resources are reported as a long- term liability on the statement of net assets. No expenditure is reported for these amounts in the fund financial statements. Accumulated vacation and sick leave of proprietary fund types are recorded as an expense and liability of those funds as the benefits accrue to employees. N. Capital Assets Capital Assets other than Streets & Drainage: Capital assets, which include property, plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities column in the government-wide financial statements and in the fund financial statements for proprietary funds. All capital assets are valued at their historical cost or estimated historical cost if actual historical cost is not available. Donated assets are valued at their fair market value on the date donated. Repairs and maintenance are recorded as expenses. Renewals and betterments are capitalized. Assets capitalized, not including infrastructure assets, have an original cost of $5,000 or more and an expected useful life of over one year. Interest incurred during the construction phase of capital assets of business-type activities is capitalized. Interest of $162,849 was capitalized in enterprise funds during the 2005 fiscal year. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 41 Depreciation for assets not following the modified approach is computed using the straight-line method on the composite assets based upon the estimated useful lives as follows: Distribution systems 25-50 years Buildings and improvements 10-20 years Furniture, fixtures and equipment 3-10 years The City records capital contributions to proprietary funds as revenue. Total capital contributions to the enterprise funds in fiscal year 2005 were $5,360,433 and $47,414 in the internal service funds. Capital Assets - Streets & Drainage: Governmental Accounting Standards Board Statement # 34 provides for an alternative approach to depreciation for measuring the value of infrastructure assets and the related costs incurred to maintain their service life at a locally established minimum standard. In order to adopt this alternative method, the City must use an asset management system, and must determine if the minimum standards are being maintained. This measurement occurs every three years at a minimum. The City has elected to use this alternative method for reporting its street infrastructure assets. The City contracted with the engineering firm of Kasberg, Patrick and Associates to complete pavement condition surveys for the City’s street network during 2005. This fiscal year is the first year to utilize the asset management system. The City uses the CarteGraph PavementView Pavement Management Information System to track the condition levels of each of the street sections. The entire streets inventory is captured in the system and the condition of the pavement is based on the following factors: • Type of Distress • Amount of Distress • Severity of Distress • Deduct Values (function of the first three) The Pavement Condition Index (PCI) is a measurement scale based upon a condition index ranging from zero for a failed pavement to 100 for pavement with perfect condition. The condition index is used to classify pavement in the following conditions: The PCI for 2005 was 91. The City’s administrative policy is to maintain an average PCI level of 85. An 85 PCI is considered maintaining the streets in a “good” condition. Staff prepares a street maintenance budget that meets this target for Council’s consideration during the budget process. O. Long-term Obligations The portion of long-term general obligation debt used to finance proprietary fund operations and payable from the revenues of the Enterprise Funds is recorded in such funds. General obligation bonds and other forms of long-term debt supported by general revenues are obligations of the City as a whole and not its individual funds. Accordingly, such unmatured obligations of the City are accounted for on the statement of net assets and payments of principal and interest relating to the general obligation bonds are recorded as expenditures when they are paid in the fund statements. PCIRating 100 - 85Good 84 - 45Fair 44 - 0Poor CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 42 Self-supporting general obligation debt, which will be repaid from non-general revenue sources, is recorded in the appropriate proprietary fund. P. Bond Issuance Costs For Governmental fund types, bond premiums and discounts, as well as issuance costs, are recognized during the current period on the fund financial statements. Bond proceeds are reported as other financing source net of the applicable premium or discount. Issuance costs, even if withheld from the actual net proceeds received, are reported as debt service expenditures. For Proprietary Fund types and on the government-wide statements, premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight line method which does not differ significantly from the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Issuance costs are reported as deferred charges and amortized over the term of the related debt. Q. Comparative Data/Reclassification Comparative total data for the prior year have been presented in selected sections of the accompanying financial statements in order to provide an understanding of the changes in the City’s financial position and operations. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year’s presentation. R. Post Employment Benefits (other than pension benefits) Except for health insurance provided pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA), the City provides no post employment benefits and thus has no related obligation. S. Risk Financing Activity The City of Georgetown is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omission; injuries to employees; and natural disasters. During fiscal year 2005, the City purchased general liability and property insurance from Texas Municipal League Intergovernmental Risk Pool (TML-IRP). The City pays an annual premium to TML-IRP for such coverage. TML-IRP purchases reinsurance, and the City does not retain risks of loss exceeding deductibles. Settled claims have not exceeded insurance coverage in the past three years. The workers compensation plan is administered and paid through the Texas Municipal League- Intergovernmental Risk Pool (TML-IRP). Under this plan, the City does not retain risks of loss exceeding the deductibles. TML-IRP also brokers the City’s Aviation and Underground Storage Tank Pollution liability insurance, as well as, the canine and surgical vet coverage. The City does not retain the risks of loss exceeding the deductibles. T. Credit Risk Financial investments which potentially subject the City to concentrations of credit risk consist principally of cash, investments and accounts receivable. At September 30, 2005, there was not a significant risk arising from cash, investments or accounts receivable. U. Nature and Purpose of Reservations and Designation of Fund Equity In fund financial statements, governmental funds report reservations for amounts that are not available for appropriation or are legally restricted by outside parties for a specific purpose. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 43 Fund balances and net assets are restricted and/or reserved for the following purposes: Restrictions: • Debt Service - tax funds levied and reserved for retirement of general long-term debt. • Capital Projects - funds identified for capital outlay including infrastructure and other capital projects; these funds were collected either through impact fees or bonds proceeds, both legally restricted for capital needs. Impact fees are legally restricted by Texas legislation enabling their use. Bond proceeds are considered restricted because of ordinances authorizing their issuance and documents filed with the State Attorney General specifying the usage of the related proceeds. Reservations: • Encumbrances - funds reserved for payment of outstanding commitments related to unperformed contracts for goods or services, i.e. open purchase orders. • Prepaid Items and Inventories - assets such as supplies and fuel that are unavailable for spending. • Special Programs - funds relating to grants, hotel/motel tax, and other restricted sources. V. Prior Period Adjustment The City elected to adopt the modified approach of infrastructure assessment allowed under GASB 34 for its street and drainage infrastructure. A complete inventory was prepared in fiscal year 2003 and the valuation of this inventory was completed in 2004, based on the age of the street and construction indexes. In 2005, a complete assessment of the condition of the streets inventory was completed. A full description of this inventory is included in Note N. This resulted in $1.8 million of street improvements being reduced from the previous balance recorded. As a result of this adjustment, net assets as of October 1, 2004 are reconciled as follows: Governmental Activities Net Assets, October 1, 2004, as previously recorded $115,753,180 Adjust streets assets based upon current condition (1,842,441) Net Assets, October 1, 2004, as restated $113,910,739 2. CASH AND INVESTMENTS For Cash flow purposes, cash and temporary investments consist of demand deposits, certificates of deposits, and in authorized investment pools. The operating cash balance from all funds is consolidated in pooled cash and investment accounts. Excess pooled balances are invested in U.S. Treasury securities, U.S. Government agency securities, fully collateralized money market funds and local government investment pools. Maturities on all investments are consistent with the City’s cash flow requirements. Investments are recorded at cost. Interest earnings are allocated to each fund based on average monthly pooled equity balances. Separate cash and investment accounts are maintained for restricted cash such as debt service, utility debt reserves, and bond proceeds reserved for future construction. The investment policies of the City are governed by State statues and a City Council adopted Investment Policy. Major provisions of the City’s investment policy include: responsibility for investments, authorized investments, security dealer selection and qualifying procedures, safekeeping and custodial procedures, statement of investment objectives, and investment reporting requirements. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 44 DEPOSITS Texas Statutes require that all bank deposits be insured or fully collateralized by the U.S. government obligations or obligations of the State of Texas and its agencies. Market value of the collateral pledged must equal at least 100% of the bank deposits not covered by federal deposit insurance. At year-end, the carrying amount of the City’s bank deposits was a negative $3,853 and the bank balances were $609,357 all of which were entirely covered by Federal depository insurance or by collateral held by the City’s agent bank in the City’s name. The negative carrying amount of cash and positive bank balance reflected above are the result of disbursement float (checks which have been issued but not yet presented to the bank for payment). In order to maximize interest earnings, the City utilizes a controlled disbursement account, which allows the City to deposit only as much money as needed to fund checks presented each day. The required amount is withdrawn from the investment pools and transferred to the City’s local depository. INVESTMENTS The City is authorized to invest in certificates of deposit, direct obligations of the US government, US government agency securities, fully collateralized direct repurchase agreements, no-load money market funds whose portfolio meet the City’s investment requirements, and in qualified local government investment pools as approved by the City Council. The City’s investments carried at fair value as of September 30, 2005, are: Interest Rate Risk - In compliance with the City’s Investment Policy, as of September 30, 2005, the City minimized the interest rate risk, related to the decline in market value of securities due to rising interest rates in the portfolio by; limiting the weighted average maturity of security types to no longer than 2 years; structuring the investment portfolio so that securities matured to meet cash requirements for ongoing operations and capital improvement projects; monitoring credit ratings of portfolio positions to assure compliance with rating requirements imposed by the Public Funds Investment Act; and investing operating funds primarily in shorter-term securities and similar government investment pools. FairWeighted Average Category 1ValueMaturity (days) Investments U S Treasury Securities$2,994,648$2,994,648251 U S Government Agency Securities23,643,20323,643,203370 Texas Local Government Investment Pool (TexPool)3,776,3161 Texas Local Government Investment Pool (TexasTERM)1,553,2651 Texas Short Term Asset Reserve Program (TexSTAR)15,809,5611 Total Fair Value of Investments:$26,637,851 $47,776,993 Portfolio weighted average maturity: 148 Carrying Amount $(3,853) Total Cash & Investments:$47,773,140 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 45 Credit Risk – In compliance with the City’s Investment Policy, as of September 30, 2005, the City minimized credit risk losses due to default of security issuer or backer by; limiting investments to the safest types of securities. All City’s purchased investments in U.S. Agencies were rated AAA, AAA, and Aaa by Standard & Poors, Fitch and Moody’s respectively; pre-qualifying the financial institutions, broker/dealers, intermediaries, and advisors with which the City will do business; and diversifying the investment portfolio so that potential losses on individual securities were minimized. For short-term liquidity requirements, the City primarily utilizes the Texas Short Term Asset Reserve Program (TexSTAR). JPMorgan Fleming Asset Management, Inc. and First Southwest Asset Management, Inc. serve as co-administrators under an agreement with the TexSTAR board of directors to provide investment and participant services for this pool. JPMorgan Chase Bank or its subsidiary J.P. Morgan Investor Services Co. provides the custodial, transfer agency, fund accounting, and depository services for this pool. The City also maintains an account with the Texas Local Government Investment Pool (TexPool). Under the TexPool Participation Agreement, administrative and investment services to TexPool are provided by Lehman Brothers Inc. and Federated Investors, Inc. through an agreement with the State of Texas Comptroller of Public Accounts. The State of Texas Comptroller of Public Accounts is the sole officer, director, and shareholder of the Texas Treasury Safekeeping Trust Company authorized to operate TexPool. The City also maintains an account with the Local Government Investment Pool (TexasTERM). Administrative and investment services to the pool are provided by PFM Asset Management LLC, under an agreement with the TexasTERM Advisory Board and act on behalf of the pool participants. TexSTAR and TexPool operate on a $1 net asset value basis. In order to maintain a stable $1 price of the fund, the pools will sell portfolio holdings if the ratio of the market value of the portfolio divided by the book value of the portfolio is less than .995 or greater than 1.005. The pools are stated at their fair value, which is $13,208 lower than the book value for the pools at 9/30/05. During 2005, the City realized no gains or losses from the sale of investments, as the City’s investment strategy is to invest to maturity. The City recognized a net decrease in the fair value of investments held at year-end of $33,392. 3. TAXES Property Taxes - Property is appraised and a lien on such property becomes enforceable as of January 1st of each year. Taxes are levied on and payable the following October 1st. Taxes become delinquent February 1st of the following year and are subject to interest and penalty charges. Under an agreement which began August 1, 2000, Williamson County Tax Office collects the City's taxes. In the fund financial statements, City property tax revenues are recognized when levied to the extent that they are collected in the current year. Taxes collected prior to the levy date to which they apply are recorded as unearned revenues and recognized as revenue of the period to which they apply. All collections from prior year levies are considered delinquent tax revenue for reporting purposes in the year collected. The allowance for uncollectible taxes at September 30, 2005 was $6,467. The City is permitted by the State of Texas to levy taxes up to $2.50 per $100 of assessed valuation for general government services and for the payment of principal and interest on general long-term debt. The combined current tax rate to finance general government services, including debt service for the fiscal year ended September 30, 2005, was $.34626 per $100 of assessed valuation. The Williamson County Appraisal District (Appraisal District) is responsible for the recording and appraisal of property for all taxing units in Williamson County. The Appraisal District is required to CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 46 assess property at 100% of its appraised value. Real property must be reappraised at least every four years. The City may, at its own expense, require annual reviews by the Appraisal District through various appeals and, if necessary, legal action. Under this system, if the rate, excluding tax rates for bonds and other contractual obligations adjusted for new improvements, exceeds the rate for the previous year by more than 8%, qualified voters of the City may petition for an election to determine whether to limit the tax rate to an increase of no more than 8%. In September 2004, voters approved an initiative to freeze property taxes for homeowners over the age of 65 or disabled. This measure mirrors the State of Texas Constitutional Amendment Proposition 13, which passed overwhelmingly statewide in 2003. “Prop 13” gives local governments the option of “freezing” taxes for the elderly and disabled. Sales Taxes - The City has adopted the provisions of Article 1066C, Vernon's Texas Civil Statutes, as amended, which grant the City the power to impose and levy a 1% Local Sales and Use Tax within the City. Proceeds of the tax are credited to the General Fund except for sales taxes generated at the airport which are credited to the Airport (Enterprise) Fund. Collections and enforcements are effected through the offices of the Comptroller of Public Accounts, State of Texas, who remits to the City monthly the proceeds of the tax, after deduction of a 2% service fee. On October 1, 2001, the City began collecting an additional ½ cent sales tax for its component unit, GTEC, to fund transportation improvements that promote economic development. These funds are reported in the GTEC General Capital Projects Fund, a blended component unit of the City. On April 1, 2003, the City began collecting an additional ¼ cent sales tax in accordance with Texas House Bill 445 to fund maintenance on streets that were in existence at the time the sales tax was adopted by the voters. The tax has a sunset provision and will expire in November, 2006, unless readopted by the citizens. These funds are reported in the Streets Special Revenue Fund. 4. INTERFUND RECEIVABLES / PAYABLES AND TRANSFERS Interfund receivables and payables relate to negative positions in pooled cash equity. All balances are expected to be resolved within six months. InterfundInterfund ReceivablesPayables GOVERNMENTAL FUND TYPES: Governmental funds: Major funds: General capital projects$345,093 Total major funds 345,093 Nonmajor funds: Village improvement district 724 Police special revenue 15,182 Total nonmajor funds 15,906 Governmental net total:$360,999 PROPRIETARY FUND TYPES: Enterprise funds: Major funds: Water services$415,360 Total major funds415,360 Nonmajor funds Sanitation 54,361 Total nonmajor funds 54,361 Enterprise net total:$360,999 TOTAL INTERFUND RECEIVABLES & PAYABLES $360,999$360,999 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 47 Transfers InTransfers Out FundDescription Governmental Funds: Major funds General fund$4,550,972 Enterprise funds8% Return on Investment General fund203,632 Water services fundProvide water hydrant maintenance General fund40,000 Tourism special revenue fundWayfaring signage General fund10,000 Court fees special revenue fundBaliff expenses General fund$80,000 Joint services fundMerit bonuses General fund17,539 Cemetery special revenueSubsidize the cemetery General fund191,665 General capital projectsGeneral capital projects General fund43,940 Tourism special revenue fundFund portion of Main Street Department General fund22,770 Police special revenue fundGrant matching GTEC1,061,649 Debt serviceDebt service GTEC11,200 Special revenue fundMapping expenses Debt service1,061,649 GTECDebt service Debt service61,592 Fire special revenue fundFire truck Debt service42,131 Information services fundVerizon lease General capital projects191,665 General fundGeneral capital projects General capital projects8,000 Information services fundToughbooks General capital projects88,500 Joint services fundEquipment purchases General capital projects25,000 Electric fundEquipment purchases General capital projects1,092,074 Fleet management fundEquipment purchases General capital projects32,253 Information services fundSystem upgrades Total major funds6,283,141 2,553,090 Nonmajor funds Special revenue funds116,891 138,122 Transfer between major governmental funds Internal service funds1,711,224 199,981 Transfer between major governmental and major enterprise funds Total nonmajor funds1,828,115 338,103 Total governmental funds8,111,256 2,891,193 Total net governmental funds5,220,063 Enterprise Funds: Major funds Electric$2,801,394 General fund8% Return on Investment Electric25,000 General capital projectsEquipment purchases Electric112,500 Internal service fundsInternal service fund transfer Water services1,374,028 General fund8% Return on Investment Water services203,632 General fundProvide water hydrant maintenance Water services294,240 Internal service fundsInternal service fund transfer Water services33,718 Fleet management fundEquity transfer Total major funds4,844,512 Nonmajor funds Nonmajor enterprise funds375,551 General fund8% Return on Investment Total nonmajor funds funds375,551 Total enterprise funds5,220,063 TOTAL INTERFUND TRANSFERS$5,220,063 $5,220,063 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 48 5. CAPITAL ASSETS Capital asset activity for the year ended September 30, 2005 was as follows: Balance 10/01/04DeletionsBalance (as restated)Additions& Transfers9/30/05 Governmental activities: Capital assets not being depreciated Land$3,292,452 $750,119 $4,042,571 Construction in progress3,582,988 8,864,530 $(2,101,427) 10,346,091 Total capital assets not being depreciated6,875,440 9,614,649 (2,101,427) 14,388,662 Capital assets being depreciated Equipment14,728,991 1,770,438 (146,762) 16,352,667 Buildings19,625,883 2,064,158 (433,050) 21,256,991 Improvements14,458,851 4,260,180 18,719,031 Streets88,780,600 10,767,699 99,548,299 Total capital assets being depreciated137,594,325 18,862,475 (579,812) 155,876,988 Less accumulated depreciation for: Equipment(8,628,043) (1,226,681) 98,634 (9,756,090) Buildings(3,624,936) (503,199) 399,517 (3,728,618) Improvements(3,953,104) (573,216) (4,526,320) Total accumulated depreciation(16,206,083) (2,303,096) 498,151 (18,011,028) Total capital assets being depreciated, net 121,388,242 16,559,379 (81,661) 137,865,960 Governmental activities capital assets, net$128,263,682 $26,174,028 $(2,183,088) $152,254,622 Electric activities: Capital assets not being depreciated Land$193,735 $193,735 Construction in progress$3,567,957 $(3,081,280) 486,677 Total capital assets not being depreciated193,735 3,567,957 (3,081,280) 680,412 Capital assets being depreciated Equipment496,664 39,432 536,096 Buildings73,707 73,707 Improvements44,363,262 3,869,712 48,232,974 Total capital assets being depreciated44,933,633 3,909,144 - 48,842,777 Less accumulated depreciation for: Equipment(355,645) (52,075) (407,720) Buildings(9,814) (4,110) (13,924) Improvements(14,023,256) (1,978,892) (16,002,148) Total accumulated depreciation(14,388,715) (2,035,077) - (16,423,792) Total capital assets being depreciated, net 30,544,918 1,874,067 - 32,418,985 Electric activities capital assets, net$30,738,653 $5,442,024 $(3,081,280) $33,099,397 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 49 Balance 10/01/04DeletionsBalance (as restated)Additions& Transfers9/30/05 Water services activities: Capital assets not being depreciated Land$475,070 $(5,716) $469,354 Construction in progress4,985,311 $7,743,719 (7,693,970) 5,035,060 Total capital assets not being depreciated5,460,381 7,743,719 (7,699,686) 5,504,414 Capital assets being depreciated Equipment207,947 28,435 236,382 Buildings3,019,794 3,019,794 Improvements100,570,493 10,263,562 110,834,055 Total capital assets being depreciated103,798,234 10,291,997 - 114,090,231 Less accumulated depreciation for: Equipment(178,112) (15,219) (193,331) Buildings(1,064,340) (95,242) (1,159,582) Improvements(19,664,615) (2,570,698) (22,235,313) Total accumulated depreciation(20,907,067) (2,681,159) - (23,588,226) Total capital assets being depreciated, net 82,891,167 7,610,838 - 90,502,005 Water services activities capital assets, net$88,351,548 $15,354,557 $(7,699,686) $96,006,419 Other nonmajor business type activities: Capital assets not being depreciated Land$981,500 $981,500 Construction in progress95,975 $396,019 $(292,873) 199,121 Total capital assets not being depreciated1,077,475 396,019 (292,873) 1,180,621 Capital assets being depreciated Equipment193,627 193,627 Buildings1,875,808 1,875,808 Improvements13,566,000 2,078,745 15,644,745 Total capital assets being depreciated15,635,435 2,078,745 - 17,714,180 Less accumulated depreciation for: Equipment(161,943) (9,948) (171,891) Buildings(901,919) (96,387) (998,306) Improvements(3,572,926) (602,916) (4,175,842) Total accumulated depreciation(4,636,788) (709,251) - (5,346,039) Total capital assets being depreciated, net 10,998,647 1,369,494 - 12,368,141 Other nonmajor business-type activities capital assets, net $12,076,122 $1,765,513 $(292,873) $13,548,762 Total Business-type activities: Capital assets not being depreciated Land$1,650,305 - (5,716) $1,644,589 Construction in progress5,081,286 $11,707,695 $(11,068,123) 5,720,858 Total capital assets not being depreciated6,731,591 11,707,695 (11,073,839) 7,365,447 Capital assets being depreciated Equipment898,238 67,867 - 966,105 Buildings4,969,309 - - 4,969,309 Improvements158,499,755 16,212,019 - 174,711,774 Total capital assets being depreciated164,367,302 16,279,886 - 180,647,188 Less accumulated depreciation for: Equipment(695,700) (77,242) - (772,942) Buildings(1,976,073) (195,739) - (2,171,812) Improvements(37,260,797) (5,152,506) - (42,413,303) Total accumulated depreciation(39,932,570) (5,425,487) - (45,358,057) Total capital assets being depreciated, net 124,434,732 10,854,399 - 135,289,131 Total business-type activities capital assets, net $131,166,323 $22,562,094 $(11,073,839) $142,654,578 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 50 BalanceBalance October 1,September 30,Due within 2004AdditionsRetirements2005one year Governmental activities: General obligation bonds$33,194,673$22,385,165$(11,273,235)$44,306,603$2,387,035 (payable from tax pledge) Compensated absences1,329,545 642,421(449,165)1,522,801512,339 Obligation under capital lease368,787(113,085)255,702114,019 Arbitrage rebate payable17,66317,663 Total governmental activities 34,910,66823,027,586(11,835,485)46,102,7693,013,393 Business-type activities: Revenue bonds38,903,7634,025,000(2,864,751)40,064,0123,004,013 Compensated absences496,860 197,834(163,542)531,152178,893 General obligation bonds4,261,5642,239,835(1,992,015)4,509,384243,952 (payable from airport and stormwater revenues) Total business-type activities 43,662,1876,462,669(5,020,308)45,104,5483,426,858 TOTAL LONG-TERM DEBT$78,572,855$29,490,255$(16,855,793)$91,207,317$6,440,251 Depreciation expense was charged to function/programs of the primary government as follows: 6. OPERATING LEASES The City leases computer equipment with Koch Financial Corporation for Gateway Computers, which expires in March 2006. The following is a schedule by year of the lease obligation: Year Ending September 30 Amount 2006$62,910 Total$62,910 7. LONG-TERM DEBT A. Overview The following is a summary of long-term debt transactions of the City for the fiscal year ended September 30, 2005: Governmental activities: Culture-recreation$199,406 Development8,041 Economic development1,250 Fire32,828 General government605,414 Highways & streets263,265 Police34,779 Internal service funds1,158,113 Total depreciation expense governmental activities$2,303,096 Business-type activities: Electric$2,035,077 Water services2,681,159 Nonmajor709,251 Total depreciation expense business-type activities$5,425,487 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 51 The annual requirements to retire all debt outstanding as of September 30, 2005 including interest payments of $33,309,368 are as follows: At September 30, 2005 there was $10,500,000 of authorized but unissued general obligation bonds. There are no authorized but unissued revenue bonds. The City is in compliance with all bond ordinances. B. General Obligation Debt A summary of Tax-Supported General Obligation Debt outstanding at September 30, 2005 follows: $5,185,000, 1997 Combination tax & revenue certificates of obligation due in annual installments of $70,000 to $610,000 through August 15, 2017; interest at 5% to 7% $5,220,000, 1998 Combination tax & revenue certificates of obligation due in annual installments through August 15, 2018; interest at 4% to 5% (portion included below) $6,750,000, 1999 Combination tax & revenue certificates of obligation due in annual installments through August 15, 2019; interest at 4.3% to 5.5% (portion included below) $1,450,000, 2000 Combination tax & revenue certificates of obligation due in annual installments through August 15, 2020; interest at 5.15% to 5.9% $5,470,000, 2001 Combination tax& revenue certificates of obligation due in annual installments through August 15, 2021; interest at 4.35% to 5.0% $325,000, 2003 Public Property Finance Contractual Obligations due in annual installments through July 1, 2006; interest at 4.68% $1,862,867, 2003 Combination tax & revenue certificates of obligation due in annual installments through August 15, 2023; interest at 3.0% to 4.5%; $567,133 designated for GTEC capital improvements to be paid through revenues from the ½ cent GTEC sales tax $ 325,000 2,299,260 899,080 245,000 4,450,000 65,988 1,659,289 Fiscal GeneralGeneral Year EndingObligationObligation September 30 Tax-Supported Self-Supported Revenue Total 2006$4,235,786$445,659$4,856,966$9,538,411 2007 4,235,969 446,223 4,665,637 9,347,829 2008 3,994,610 475,248 4,316,057 8,785,915 2009 3,853,294 473,455 4,265,940 8,592,689 2010 3,851,885 446,821 4,220,465 8,519,171 2011-201522,543,6512,252,14917,965,64042,761,440 2016-202012,294,4041,459,22910,856,43424,610,067 2021-2025 5,545,445 164,970 4,323,430 10,033,845 $60,555,044$6,163,754$55,470,569$122,189,367 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 52 $985,000, 2004 Limited tax notes due in annual installments through February 15, 2011; interest at 2.5% to 4.0%; $8.825M designated for GTEC capital improvements to be paid through revenues from the ½ cent GTEC sales tax $4,130,000, 2005 Combination tax & revenue certificates of obligation due in annual installments through August 15, 2025; interest at 3% to 4.5% (portion included below) $14,080,165, 2005 General obligation and Refunding bonds due in annual installments through August 15, 2020; interest at 3% to 4.75% (portion included below) Subtotal Tax-Supported General Obligation Debt – City Portion 750,000 3,505,000 13,942,275 28,140,892 $3,125,000, 2002 Combination tax & revenue certificates of obligation due in annual installments through August 15, 2022; interest at 3.0% to 5.0%; entire issue designated for GTEC capital improvements to be paid through revenues from ½ cent GTEC sales tax $567,133, 2003 Combination tax & revenue certificates of obligation due in annual installments through August 15, 2023; interest at 3.0% to 4.5%; $567,133 designated for GTEC capital improvements to be paid through revenues from the ½ cent GTEC sales tax $8,825,000, 2004 Limited tax notes due in annual installments through February 15, 2011; interest at 2.5% to 4.0%; $8.825M designated for GTEC capital improvements to be paid through revenues from the ½ cent GTEC sales tax $4,175,000, 2005 Combination tax & revenue certificates of obligation due in annual installments through August 15, 2025; interest at 3% to 4.5% (portion included below) Subtotal Tax-Supported General Obligation Debt – GTEC portion Subtotal Tax-Supported General Obligation Debt -Combined 2,890,000 490,711 8,610,000 4,175,000 16,165,711 $44,306,603 A summary of Self-Supporting General Obligation Debt outstanding at September 30, 2005: $5,220,000, 1998 Combination tax & revenue certificates of obligation due in annual installments through August 15, 2018; interest at 4% to 5%, portion dedicated for Airport Improvements, $129,208, to be paid with Airport fees. Portion dedicated for Stormwater Drainage Improvements, $2,274,059, to be paid through monthly fees charged to utility customers within City limits 1,960,740 $6,750,000, 1999 Combination tax & revenue certificates of obligation due in annual installments through August 15, 2019; interest at 4.3% to 5.5%; portion dedicated for Airport Improvements, $1,775,000 to be paid with Airport fees 435,000 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 53 $1,804,835, 2005 General obligation and Refunding bonds due in annual installments through August 15, 2020; interest at 3% to 4.75% $ 1,777,725 Subtotal Self-Supporting General Obligation Debt 4,509,385 Total outstanding General Obligation Debt as of September 30, 2005 $48,815,988 C. Advanced Refunding/Defeasance On May 19, 2005, the City issued $10,985,000 in General Obligation Refunding Bonds with an average interest rate of 4.15% to advance refund $625,000 of outstanding 1994 series, $465,000 of 1995 series, $4,115,000 of 1997 series, $4,290,000 of 1999 series and $1,005,000 of 2000 series bonds with average interest rates of 6.10%, 5.38%, 5.03%, and 5.50%, respectively. The net proceeds (after insurance and other issuance costs) were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the defeased series bonds. As a result, the following bonds are considered to be defeased and the liabilities for those bonds have been removed from the financial statements. The City advanced funded these bonds to reduce its total debt service payments over the next 15 years by approximately $578,252 and to obtain a net economic gain (difference between the present values of debt service payments on the old and new debt) of $426,457. D. Revenue Debt A summary of Revenue Debt outstanding at September 30, 2005 follows: $27,770,000, 1998-A Utility System Revenue & Refunding bonds due in annual installments through August 15, 2018; interest at 3.8% to 5.0% $17,240,000 $1,225,000, 1998-B Taxable Utility System Revenue & Refunding bonds due in annual installments through August 15, 2015; interest at 6.15% to 6.65% 745,000 $4,320,000, 2000 Utility System Revenue bonds due in annual installments through August 15, 2020; interest at 5.1% to 5.9% 3,735,000 MaturitiesSeriesSeries SeriesSeriesSeries 19941995 199719992000Total 2006 145,000$ 35,000$ 180,000$ 2007 150,00035,000185,000 2008 160,00040,000175,000$ 375,000 2009 170,00040,000185,000395,000 2010 45,000375,000345,000$ 70,000$ 835,000 2011 50,000390,000355,00075,000870,000 2012 50,000415,000375,00075,000915,000 2013 55,000435,000395,00080,000965,000 2014 55,000465,000415,000 85,0001,020,000 2015 60,000485,000435,000 90,0001,070,000 2016 580,000455,00095,0001,130,000 2017 610,000480,000100,0001,190,000 2018 505,000105,000610,000 2019 530,000110,000640,000 2020 120,000120,000 625,000$ 465,000$ 4,115,000$ 4,290,000$ 1,005,000$ 10,500,000$ CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 54 $1,900,000, 2001 Utility System Revenue bonds due in annual installments through August 15, 2021; interest at 4.75% to 5.12% $1,550,000 $6,500,000, 2002 Utility System Revenue bonds due in annual installments through August 15, 2022; interest at 4.0% to 5.0% 6,030,000 $325,000, 2003 Public Property Finance Contractual Obligations due in annual installments through July 1, 2006; interest at 4.68% 49,012 $6,940,000, 2003 Utility System Revenue bonds due in annual installments through August 15, 2023; interest at 3.55% to 4.55% 6,690,000 $4,025,000 2005 Utility System Revenue bonds due in annual installments through August 15, 2025; interest at 2.85% to 4.75% 4,025,000 Total outstanding Revenue Debt as of September 30, 2005 $40,064,012 All net revenues of the utility system are pledged for the payment of debt service for the revenue bonds. Net revenues, as defined by the various bond ordinances, include income and revenues derived from the operation of the system, after deduction of the amount necessary to pay all operating, maintenance, replacement and betterment charges of the system. These bond ordinances require that the net revenues, as defined, equal at least 1.25 times the average annual debt service on all revenue bonds. The City was in compliance with this requirement at September 30, 2005. In prior years, the City defeased revenue bonds by placing the proceeds of the refunding bonds in an irrevocable trust to provide for all future debt service payments on the defeased bonds. Accordingly, the trust account assets and liabilities for the defeased bonds are not included in the City’s financial statements. At September 30, 2005, the outstanding balance of the defeased bonds is $12,730,000. Lease payable represents the remaining principal amounts payable under a lease purchase agreement for the acquisition of a Voiceover Internet Protocol phone system and hardware. The lease is recorded as a capital lease. Remaining requirements including interest, under the lease is as follows: Governmental YearActivities 2006$125,083 200770,268 200865,930 200913,996 Total principal and interest275,276 less - Applicable interest(19,575) Total principal $255,701 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 55 8. RETIREMENT PLAN A. Plan Description The City provides pension benefits for all of its full-time employees through a non-traditional joint contributory hybrid defined benefit plan, in the state-wide Texas Municipal Retirement System (TMRS). The City of Georgetown is one of 801 municipalities having the benefit plan administered by TMRS, an agent multiple-employer public employee retirement system. Each of the 801 municipalities have an annual, individual actuarial valuation performed. The following assumptions were used for the December 31, 2004 valuations: Actuarial Cost Method Unit Credit Amortization Method Level Percent of Payroll Remaining Amortization Period 25 Years – Open Period Asset Valuation Method Amortized Cost Investment Rate of Return 7% Projected Salary Increases None Includes Inflation At 3.5% Cost-of-Living Adjustments None Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the City- financed monetary credits, with interest. At the date the plan began, the City granted monetary credits for service rendered before the plan began of a theoretical amount equal to two times what would have been contributed by the employee, with interest, prior to establishment of the plan. Monetary credits for service since the plan began are a percent (100%, 150%, or 200%) of the employee's accumulated contributions. In addition, the City can grant, as often as annually, another type of monetary credit referred to as an updated service credit, which is a theoretical amount which, when added to the employee's accumulated contributions and the monetary credits for service since the plan began, would be the total monetary credits and employee contributions accumulated with interest if the current employee contribution rate and City matching percent had always been in existence and if the employee's salary had always been the average of his salary in the last three years that are one year before the effective date. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the employer-financed monetary credits with interest were used to purchase an annuity. The December 31, 2004 calculations were based upon the following benefits. Members can retire at ages 60 and above with 5 years or more of service or with 20 years of service regardless of age. A member is vested after 5 years. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS and within the actuarial constraints also in the statutes. B. Contributions The contribution rate for the employees is 6%, and the City matching ratio is currently 2 to 1, both as adopted by the governing body of the City. Under the state law governing TMRS, the actuary annually determines the City contribution rate. This rate consists of the normal cost contribution rate and the prior service contribution rate, both of which are calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the currently accruing monetary credits due to the City matching percent, which are the obligation of the City as of an employee's retirement date, not at the time the employee's contributions are made. The normal cost contribution rate is the actuarially CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 56 determined percent of payroll necessary to satisfy the obligation of the City to each employee at the time his/her retirement becomes effective. The prior service contribution rate amortizes the unfunded (overfunded) actuarial liability (asset) over the remainder of the plan's 25 year amortization period. The unit credit actuarial cost method is used for determining the City contribution rate. Both the employees and the City make contributions monthly. Since the City needs to know its contribution rate in advance to budget for it, there is a one-year delay between the actuarial valuation that is the basis for the rate and the calendar year when the rate goes into effect. (i.e. December 31, 2004 valuation is effective for rates beginning January 2006). The City’s total payroll in fiscal year 2005 was $15,214,438 and the City’s contributions were based on a payroll of $15,196,795. Both the City and the covered employees made the required contributions, amounting to $1,312,070 for the City and $911,810 for the employees. The City’s contribution amounted to 8.79% of the covered payroll for the calendar year. The employees’ contribution amounted to 6% of covered payroll. Schedule of Actuarial Liabilities and Funding Progress Actuarial Valuation Date 12/31/2004 Actuarial Value of Assets (A) $ 20,947,687 Actuarial Accrued Liability (B) $ 25,168,237 Percentage funded (C)=(A)/(B) 83.2% Unfunded (Over-funded) Actuarial Accrued Liability (UAAL) (D)=(B)-(A) $ 4,220,550 Annual Covered Payroll (E) $ 14,985,460* UAAL as a Percentage of Covered Payroll (D)/(E) 28.2% *Based on calendar year ending 12/31/04, which varies from the City’s fiscal year. Annual Pension Cost Fiscal Year Funding Annual Pension Cost (APC) APC funded Net Pension Obligation (NPO) Employer’s Contribution as a % of Covered Payroll 09/30/03 $ 1,030,560 $ 1,030,560 0 7.92 09/30/04 $ 1,183,700 $ 1,183,700 0 8.35 09/30/05 $ 1,312,070 $ 1,312,070 0 8.79 A copy of the TMRS Comprehensive Annual Financial Report may be obtained by contacting TMRS at P.O. Box 149153, Austin, Texas 78714-9153. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 57 9. DEFERRED COMPENSATION PLAN The City offers its employees a deferred compensation plan 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. Participation in the plan is optional. The deferred compensation is not available to employees until termination, retirement, death or an unforeseeable emergency. 10. COMMITMENTS AND CONTINGENCIES Long-Term Agreements The City has the following long-term agreements, which represent significant commitments: A. Wholesale Power Agreement with the Lower Colorado River Authority (LCRA) - The City must purchase 90% of its electrical power requirements from the LCRA under a long-term contract, which extends through 2016. Under the contract, the City's monthly cost of purchased power averaged $1,756,323 for the fiscal year ended September 30, 2005. B. Brazos River Authority (BRA) Water Contracts - Effective September 1, 2001, the City revised its previous water availability agreements with the BRA to further plan for future water needs and to standardize the pricing to a system-wide rate. The effective system-wide rate for BRA’s fiscal year beginning September 1, 2005 is $49.65 and the City paid a total of $1,426,938 for water during the fiscal year. The City has three separate agreements with the BRA as follows: (1) Lake Georgetown Water - This agreement, effective September 1, 2001 and expiring August 31, 2050, requires BRA to make available to the City 6,720 acre-feet of water per year at BRA’s system wide rate. The City paid $309,624 for water under this agreement for the City’s fiscal year. (2) Lake Stillhouse Hollow Water - This agreement, effective September 1, 2001 and expiring August 31, 2040, requires BRA to make available to the City 15,448 acre-feet of water per year at BRA’s system wide rate. The City paid $711,767 for water under this agreement for the City’s fiscal year. (3) Colorado River Basin Water - This agreement, effective September 1, 2001 and expiring August 31, 2051, requires BRA to make available to the City a total of 6,944 acre-feet of water per year. Because this water is made available to BRA through the Lower Colorado River Authority (LCRA), the pricing structure is based upon the cost of water set by LCRA. The rate for BRA’s fiscal year beginning September 1, 2004 is $53.91 per acre-foot. The City paid $405,547 under this agreement for the City’s fiscal year. C. Brazos River Authority - Williamson County Regional Raw Water Line Agreement - The City is a party to an agreement dated June 30, 1986, with the Brazos River Authority (BRA), City of Round Rock and Jonah Water Special Utility District to design, construct and operate a pipeline to transport water from Lake Stillhouse Hollow to Lake Georgetown. Total project construction cost for the raw water line is approximately $40 million. In 2000, BRA issued approximately $37 million in debt obligations, to be repaid through annual payments from the participants. The City’s obligation is $33.5 million, including principal and interest, to be repaid annually through 2034. The City began paying its allocated costs related to the project in fiscal year 2002. The amount for fiscal year 2005 was $460,240. The following schedule reflects the City's obligation: CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 58 D. Texas Capital Fund Programs - The City has received awards from this program, which is operated by the State of Texas to assist in local economic development. Two types of assistance are provided to businesses relocating to the area: (1) infrastructure improvements and (2) low cost funding for facility construction. Infrastructure improvements become the asset of the City upon construction, without repayment of the grant to the State. If the City receives funding to construct a facility for a business, the City owns the facility and leases it to the business. These lease payments are then repaid to the State. The leases and pass through payments are recorded in the Agency Fund of the City. The City has three active awards for facility construction, where long term agreements are in effect: (1) Reedholm Instruments, Inc. - This facility was completed in 1997 and lease payments began in March 1997. The business is current on lease payments and has an outstanding balance of $223,652 as of September 30, 2005. (2) Xycarb Ceramics, USA, Inc. - This facility was completed in January 1998 and lease payments began in February 1998. The business is current on lease payments and has an outstanding balance of $309,227 as of September 30, 2005. (3) Schunk Quartz - This facility was completed in January 1998 and lease payments began in February 1998. The business is current on lease payments and has an outstanding balance of $309,227 as of September 30, 2005. E. Chisholm Trail Special Utility District - In February 1999, the City and Chisholm Trail Special Utility District (CTSUD) entered into an agreement which will provide CTSUD needed water in exchange for allowing Georgetown the right to provide water service in the Highway 195 and expanded Sun City areas. The City will transfer to CTSUD a phased financial position in the Lake Water Treatment Plant up to 4.26 mgd, not to exceed 28% of the off-peak plant capacity. CTSUD will then pay prorata operating costs for all water utilized. In addition, upon acceptance of the Williamson County Raw Water Line, the City will transfer 840 acre feet of the Lake Stillhouse Hollow water rights to CTSUD, which will assume payment for these rights to the BRA. As of September 30, 2005 the City has transferred 2.0 mgd of capacity, with a value of $701,740. The remaining 2.251 mgd, which is expected to be transferred in 2006, has a value of $979,330, for a total value of $1,681,070. Year Ending September 30 Amount 2006$584,214 2007730,480 2008767,132 2009829,801 2010883,764 2011-203428,670,248 Total$32,465,639 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 59 F. Del Webb Corporation (Sun City Texas) - The Del Webb Corporation (Del Webb) began development in April 1995 of a proposed 9,500 unit; 5,300 acre active retirement community to be called Sun City Texas. The City, through a Development Agreement, and in exchange for payment of Service Improvement Fees (SIP fee - discussed below) provides fire protection, wastewater, water and electric service to Sun City. The project is annexed into the City limits as phases of the project are platted. Home sales began in June 1995 and were expected to average 425 homes per year for 20 years. As of September 30, 2005, 4,171 units have been completed. In November 2002, Del Webb filed a revised Concept Plan that reduces the size of Sun City from 10,500 to 5,000 age-restricted units on the southern portion of the property. The Concept Plan also allows the northern 2,500 acres to be developed as a non-age restricted community. In response to the significant changes in the revised Concept Plan, a Seventh Amendment to the Development Agreement was approved in April 2003 for fiscal year 2003. That Seventh Amendment re-calculates the SIP fee for Sun City at 5,000 units. The Seventh Amendment also accelerates the schedule for payment of the SIP Fees from a pure per-unit basis to an annual minimum payment of SIP Fees for 300 units per year, at $4,324.50 per unit, with build out completed by 2009. The City anticipates it will be able to make all infrastructure and debt payments using the SIP Fees without cash shortfalls or additional increases in overall service rates for water and wastewater. The Seventh Amendment further identifies the ”stranded costs,” or the costs of infrastructure built by the City under the Development Agreement for 10,500 units, but not needed as result of Del Webb's decision to downsize Sun City to 5,000 units. The total Stranded Costs were approximately $8.4 million. Under the Seventh Amendment, Del Webb paid the City $1.7 million towards the $8.4 million of Stranded Costs, leaving a balance of $6,670,064. The City agreed to allow Del Webb to pay the balance, including 5.25% annual interest, over 7 years. The Stranded Cost payment is $1,139,700 annually, and is being paid on a per unit basis for the remaining Sun City units. These fees are in addition to SIP fees. Finally, the Seventh Amendment adjusted the amount of the fiscal surety from $4 million total, to $2 million for SIP Fees, and $3.8 million for Stranded Costs. The Seventh Amendment also addressed the possibility of Del Webb selling the Northern Lands to a third party. In such instance, all stranded costs that remain unpaid as of the date of closing would require either full payment to the City or 100% fiscal surety for the balance and Del Webb would not be released from obligation to pay any outstanding SIP fees. Another element of the Seventh Amendment was a Water Wastewater Agreement to reserve the Northern Land capacity for future use through 2015, so long as Del Webb makes reservation payments to the City. The City received $261,039 from Del Webb for reservation fees related to the Water and Wastewater Agreement. G. Escalera Ranch - In 1999, the City of Georgetown and Escalera Ranch, Ltd. entered into an agreement for a 500 home residential subdivision to be built over a period of eight years. The City agreed to fund the off-site costs of infrastructure improvements required to provide roadway system improvements and water service, including fire flow, to the development. Escalera reimburses the City for all costs for the improvements on a per home basis. Escalera pays the City based on the proposed build out schedule rather than actual permits issued. As of September 30, 2005, 8 total permits were issued for this development and 315 units paid to date. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 60 H. Georgetown Village Public Improvement District - In 1999, the City of Georgetown created the Georgetown Village Public Improvement District No. 1, pursuant to Chapter 372 of the Texas Local Government Code. The City is required to construct and provide operation, repair and maintenance of parks, recreational facilities, alleyways, lighting, landscaping and related improvements to the district that are above the standards that are met elsewhere in the City. Property owners are assessed an annual maintenance assessment of $0.20 per $100 valuation. Assessment revenue of $89,134 was recognized for 2005. As of September 30, 2005 all costs associated with the Georgetown Village Public Improvement District have been reimbursed. I. Shell Road Public Improvement District - In 2001, the City created the Shell Road Public Improvement District, pursuant to Chapter 372 of the Texas Local Government Code. The City was required to design and construct the realignment of Shell Road, which will be accomplished through an interlocal agreement with Williamson County. The cost of the construction was $832,500 and will be repaid by the property owners in the PID through an assessment based on each property’s linear feet of the Shell Road alignment. Each assessment is due at the time the tract is platted, at the time of the sale of the tract, or within seven years after the realignment of the road, whichever is earlier. Assessments totaling $832,500 were billed in fiscal year 2004. As of September 30, 2005, outstanding assessments totaled $378,122. J. Cimarron Hills Public Improvement District - In May 2000, the City and Paloma Cimarron Hills, L.P. entered into a development agreement for a 606 home, 813 acre subdivision within the City’s Extraterritorial Jurisdiction (ETJ). As part of this agreement, the City created the Cimarron Hills PID to reimburse the developer for costs of certain infrastructure improvements. Each lot within the development is assessed an annual fee based on its type of usage. Once the revenue stream is stabilized, and reserve fund requirements are met, the PID may issue revenue bonds to reimburse the developer. As part of the agreement, the developer will construct a wastewater treatment plant, to be transferred to the City, who will then operate the plant. The City will also collect a per unit transportation fee which will be used to fund necessary roadway improvements and bridge crossings in the area. As of September 30, 2005, 65 homes had been completed for this development. PID assessment collection began in 2002. In 2005, PID assessments were $277,116. The developer was reimbursed $302,527 from current year collections and available fund balance. The assessments and related disbursements are recorded in the Agency Funds. K. Wolf Ranch Towne Center - In July 2003, the City approved a development agreement with Simon Properties for the 750,000 sq ft Wolf Ranch Towne Center. The project will include Target and 70 other retailers and restaurants. As part of the agreement, the City will provide utility improvements to the site, as well as, fund $10.5 million of highway improvements for the project. The $10.5 million to be funded with debt issued and repaid by GTEC, will improve SH 29, as well as, provide the badly needed frontage roads for IH-35. As of September 30, 2005, $8,825,000 of GTEC debt had been issued for this project. Texas Department of Transportation will be contributing over $7 million for these improvements as well. The City’s development agreement with Simon includes a sales tax rebate allowable under Chapter 380 of the Texas Local Government Code. 53% of the 1% general operating sales tax revenue generated at the development is rebated to Simon as an economic development incentive. This arrangement continues for 20 years or up to $15 million, which funds the public on-site improvements paid by Simon. In October 2004, the City created Wolf Ranch Tax Increment Reinvestment Zone (TIRZ) as a part of the development agreement and is created solely for the purpose of refinancing the City’s obligation to Simon under the development agreement. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 61 In June 2004, the City created the Wolf Ranch Public Improvement District (PID) #1 for all Simon owned property within the Wolf Ranch development. In the event that revenues from the project are insufficient to fund any outstanding debt related to the project, an assessment would be levied against the property in the PID to protect the City from potential revenue shortfalls. Should revenues meet or exceed expectations, no assessment is made. The utility revenue collected for this project exceeded the debt service due in 2005 for the public utility improvement assessment. The public road assessment for Wolf Ranch was $653,964 as of September 2005. L. TASUS Texas Corporation – In November 2003, the City Council approved an economic development incentive package for TASUS to locate its plastic injection molding facility in Georgetown. This package included infrastructure and utility improvements, including water and wastewater, as well as road improvements, paid for through Georgetown Transportation Enhancement Corporation (GTEC) economic development sales tax. Infrastructure improvements totaled $200,950. The City also approved a property tax abatement to TASUS for fiscal year 2004/05 – 2009/10, based upon job creation. The project is expected to create over 102 jobs for the community. M. 400 Main Street, LP – In August 2004, the City Council approved a development agreement for a redevelopment project in the downtown area. This agreement included infrastructure and utility improvements, paid through the City and the Georgetown Transportation Enhancement Corporation (GTEC) economic development sales tax. Improvements total $113,093 for Phase I of the project and $139,057 for Phase II. N. San Gabriel River Place Partners, LTD – In October 2004, the City Council approved an economic development agreement for a development project in the downtown area. This agreement includes infrastructure and utility improvements, paid through the City and the Georgetown Transportation Enhancement Corporation (GTEC) economic development sales tax. Infrastructure improvements totaled $750,000. In addition, the City agreed to contribute 50% of the annual 1% general sales tax revenue generated within the development back to the developer for up to 20 years, or $1,000,000, whichever comes first. O. Municipal Utility District (MUD) No. 15 – In December 2004, the City Council approved a consent agreement to allow a MUD to be created within its extra-territorial jurisdiction (ETJ). The agreement outlines future annexation requirements and utility service provisions. P. 500 South Austin Avenue, LP – In August 2005, the City Council approved a development agreement for a redevelopment project in the downtown area. This agreement included infrastructure and utility improvements paid through the City and the Georgetown Transportation Enhancement Corporation (GTEC) economic development sales tax, as well as fee waivers. Improvements are capped at $506,000 and fee waivers at $109,481. These expenditures are expected for fiscal year 2006. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 62 Grants Amounts received or receivable from grantor agencies, principally the federal government, are subject to audit and adjustment by the agencies. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. Litigation The City is involved in various legal actions in which claims of varying amounts are being asserted against the City. The City follows the practice of providing for these claims only when they become probable and reasonably determinable in amount. In the opinion of City management, these actions will not result in a significant change in the City's financial position. Construction Contracts Estimated costs to complete significant construction projects in progress at year-end totaled approximately $4,887,393 for Governmental Fund Types and approximately $6,537,772 for Enterprise Funds. 11. SUBSEQUENT EVENTS On October 1, 2005, the City began collecting an additional 1/8% sales tax in accordance with the Texas Development Corporation Act of 1979, Article 5190.6, Section 4A Texas Revised Civil Statues for the promotion and development of new and expanded business enterprises. This sales tax is administered through the Georgetown Economic Development Corporation (GEDCO), a legally separate entity from the City of Georgetown. GEDCO will be presented in the 9/30/06 financial statements of the City as a discretely presented component unit. On October 1, 2005, the City began collecting an additional 1/8% sales tax to be used toward the reduction of ad valorem property taxes. This sales tax revenue was factored in the 2005 property tax calculation, which was levied October 1, 2005. The City approved an increase in the contribution toward city employee retirement through the Texas Municipal Retirement System to 7% (see Note 8), effective November 1, 2005. This action increased the City’s contribution from 8.79% of payroll to 10.68%. The City issued $7.1 million of general obligation bonds for the construction of a new public library. These bonds were approved through a referendum in November 2004 and funds were received from this issue in December 2005. Annexation of 4,815 acres of property was completed by the City in December 2005, in accordance with the City’s annexation plan. Revenues and expenditures for the annexed property are not expected to significantly impact the financial condition of the City. CITY OF GEORGETOWN, TEXAS REQUIRED SUPPLEMENTARY INFORMATION - TEXAS MUNICIPAL RETIREMENT SYSTEM TREND DATA - LAST TEN FISCAL YEARS 63 UnfundedUAAL ActuarialActuarialActuarial Annualas a % of FiscalValue of Accrued LiabilityPercentageAccrued LiabilityCoveredCovered Year (1)Assets(AAL) (1)Funded(UAAL) (1)PayrollPayroll 1996$5,731,751$6,501,85188.2%$770,100$5,379,25214.3% 19976,822,6357,749,55388.0%926,9187,210,33612.9% 19988,007,3469,049,05088.5%1,041,7047,812,22313.3% 19998,989,0249,889,40590.9%900,3818,426,31210.7% 200010,556,98111,677,54190.4%1,120,5608,602,72813.0% 200112,223,28814,104,23986.7%1,880,95110,127,47018.6% 200213,594,00516,130,45384.3%2,536,44811,269,42222.5% 200315,549,04918,658,88483.3%3,109,83512,183,51025.5% 200418,195,56722,347,39681.4%4,151,82913,698,26030.3% 200520,947,68725,168,23783.2%4,220,55014,985,46028.2% Source: Texas Municipal Retirement System ("TMRS") Annual Report and City payroll reports Notes: (1)Trend data presented is information as of December 31 of the previous year, which is the fiscal year of the TMRS. CITY OF GEORGETOWN, TEXAS REQUIRED SUPPLEMENTARY INFORMATION - MODIFIED APPROACH FOR STREETS INFRASTRUCTURE CAPITAL ASSETS 64 GASB Statement 34 allows the City to use the Modified Approach with respect to infrastructure assets instead of depreciating these assets. The City’s system for reporting assets is fully discussed in Note N on page 41 of the notes. The following is additional information for the City’s streets infrastructure for fiscal year 2005. Since 2005 is the first year to implement this system, historical information is not presented, but will be presented in future years to evaluate trends. Condition Rating Summary Center % ofLine% of ConditionRatingSegmentsSegmentsMilesSegments Very Good90-1001,581 65.1%128.1 64.9% Good80-90439 18.1%37.0 18.7% Fair45-80392 16.1%31.4 15.9% Poor< 4518 0.7%1.0 0.5% 2,430 100.0%197.5 100.0% Notes: [a] Center line miles will vary from the total number of center line due to street segments that were omitted from the survey. Street segments that were either scheduled or currently receiving maintenance were omitted from the street survey. Costs to Maintain System at Designated Level Estimated Maintenance Cost$2,125,534 Budgeted Maintenance Cost$2,205,000 Actual Maintenance Cost$2,069,900 PCI Rating by Functional Class Arterial91.91 Collector88.38 Local91.00 Total90.87 Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Special Revenue Funds Special Revenue Funds are used to account for specific revenues that are legally restricted for expenditures for particular purposes. Court Fees - to account for the receipt and expenditure of court fees that are legally restricted for court security and technology. Fire Billing and Donations - to account for the receipt and expenditures of funds received by the City for various fire services, including calls for service, donations, abandoned vehicle revenue and inspections. Library Restricted - to account for the receipt and expenditure of restricted donations such as memorials and gifts for a designated library purchase or program. Also accounts for the receipt of the Telecommunication Infrastructure grant for computer hardware and software. Main Street Façade - to account for the receipt of private donations, grants, and money raised through special events to provide assistance to building/property owners for maintaining the appearance of the downtown historic district. Funds are distributed through an application/approval process with either a low- interest loan or grant. Mapping - to account for expenditures relating to City-wide mapping projects. Parks - to account for revenues earned by the City from activities on City park land, which are restricted for improvements to park land and for parkland dedication fees paid by developers, which are restricted by zones for new parks. Also accounts for the partial administration of a federal drug prevention grant in coordination with Georgetown Project. Police - to account for a grant received from the U.S. Department of Justice Community Oriented Policing Services (C.O.P.S.) for two patrol officers, a U.S. Department of Justice Local Law Enforcement Block grant for equipment, an Office of the Governor grant for a Victim Service’s Coordinator, a Texas Department of Transportation grant for a Selective Traffic Enforcement Project (STEP) related to overtime costs and the receipt and expenditure of seized and donated funds. Streets Sales Tax - to account for the receipt and expenditure of revenues collected from the ¼ cent sales tax approved by the citizens in November 2001 under Texas House Bill 445. The funds are required to be spent on maintenance of streets that were in existence at the time of adoption of the tax. Tourism - to account for the receipt and expenditure of funds received by the City from the assessment of hotel and motel occupancy tax. Usage of funds is restricted to promotion of tourism and arts within the City. Village Public Improvement District - to account for the receipt and expenditure of the revenues collected from property assessments paid by Georgetown Village Public Improvement District residents and the developer to fund maintenance on upgraded parks facilities within the subdivision. Capital Projects Funds Capital Projects Funds are used to account for revenues and expenditures for the acquisition or construction of major capital facilities, other than those financed by Proprietary Fund Types. Streets Improvements - to account for street fees and other revenue used to construct streets infrastructure improvements. CITY OF GEORGETOWN, TEXAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS AS OF SEPTEMBER 30, 2005 FIREMAIN COURTBILLING ANDLIBRARY STREET FEES DONATIONS RESTRICTED FACADE MAPPING PARKS ASSETS: Cash and cash equivalents $25,639$32,561$12,352$7,350$7,182$13,639 Investments85,837109,008 41,35324,60624,045 45,666 Accounts receivable: Sales tax Grants 91,545 Delinquent taxes Other 112,689 138,039 TOTAL ASSETS $111,476 $254,258 $53,705 $31,956 $31,227$288,889 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable $11,806$510$3,226 Due to other funds Unearned revenue 112,690 1,994177,187 Total liabilities 124,496 2,504180,413 Fund Balance: Reserved for: Encumbrances $37,615 652,888 Special programs 73,861129,76251,136$31,956$31,227105,588 Unreserved, designated for: Capital projects Total fund balance 111,476 129,76251,20131,95631,227108,476 TOTAL LIABILITIES AND FUND BALANCE $111,476 $254,258 $53,705 $31,956 $31,227$288,889 SPECIAL REVENUE FUNDS VILLAGE IMPROVEMENTSTREETTOTAL POLICE STREETS TOURISM DISTRICT IMPROVEMENTS 2005 $24,644$239,729 $31,969$60,913$455,978 26,583802,572107,026 203,926 1,470,622 219,499 24,539244,038 32,147 123,692 $589589 12,632263,360 $83,374 $1,261,800 $163,534 $13,221$264,839 $2,558,279 $4,658$102,955 $16,993$11,491$7,141$158,780 15,18272415,906 5897,825300,285 19,840102,955 16,99312,80414,966474,971 62,263875,24242,4602051,020,738 1,271283,603 104,081417812,902 249,668 249,668 63,5341,158,845 146,541417249,873 2,083,308 $83,374 $1,261,800 $163,534 $13,221$264,839 $2,558,279 SPECIAL REVENUE FUNDS CAPITAL PROJECTS FUND CITY OF GEORGETOWN, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2005 FIREMAIN COURTBILLING ANDLIBRARYSTREET FEES DONATIONS RESTRICTED FAÇADE MAPPING PARKS REVENUES: Grants and entitlements$39,653$6,806$589,923 Hotel/Motel tax Property assessments Sales tax Court fees$59,286 Investment earnings2,3643,7181,272$537$5874,709 Donations 1,07537,511767 Mapping fees 17,898 Fire incident billings114,062 Other 73,1786105,718 Total revenues 61,650 231,686 45,595 537 18,485701,117 EXPENDITURES: Culture - recreation 42,4776,993855,930 Development 19,398 Fire services156,436 Highways and streets Police19,579 Capital outlay Total expenditures19,579156,436 42,477 6,99319,398855,930 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 42,071 75,250 3,118 (6,456)(913)(154,813) OTHER FINANCING SOURCES (USES): Transfers in 21,44211,20017,539 Transfers out (10,000)(61,592)(5,088) Total other financing sources (uses) (10,000) (61,592) 21,4426,11217,539 NET CHANGE IN FUND BALANCE32,07113,658 3,118 14,9865,199(137,274) FUND BALANCES, Beginning of period 79,405116,10448,08316,97026,028245,750 FUND BALANCES, End of period $111,476$129,762$51,201$31,956$31,227$108,476 SPECIAL REVENUE FUNDS VILLAGE IMPROVEMENTSTREETTOTAL POLICE STREETS TOURISM DISTRICT IMPROVEMENTS 2005 $85,422 $721,804 $283,676283,676 $89,13489,134 $1,224,2611,224,261 59,286 1,77021,7663,949936$7,92749,535 36,510 75,863 17,898 114,062 50,64412,21522,250264,011 123,7021,246,027 338,269102,28530,1772,899,530 382,419101,8681,389,687 19,398 156,436 49,34149,341 175,332 194,911 959,356370,0351,329,391 175,3321,008,697 382,419101,868370,0353,139,164 (51,630)237,330 (44,150)417(339,858)(239,634) 22,77043,940116,891 (61,442)(138,122) 22,770 (17,502)(21,231) (28,860)237,330 (61,652)417(339,858)(260,865) 92,394921,515208,193589,7312,344,173 $63,534$1,158,845$146,541$417$249,873$2,083,308 SPECIAL REVENUE FUNDSPROJECTS FUND CAPITAL CITY OF GEORGETOWN, TEXAS COURT FEES SPECIAL REVENUE FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 ORIGINAL & FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Court fees$40,000$59,286$19,286 Investment earnings8002,3641,564 Total revenues 40,80061,65020,850 EXPENDITURES: Operations101,15049,25551,895 Total expenditures 101,150 49,255 51,895 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(60,350)12,39572,745 OTHER FINANCING SOURCES (USES): Transfers out (10,000)(10,000) Total other financing sources (uses) (10,000)(10,000) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(70,350)2,39572,745 FUND BALANCE, Beginning of period $70,35071,4651,115 FUND BALANCE - BUDGETARY BASIS, End of period 73,860$73,860 Adjustments to GAAP: Reverse current year encumbrances37,616 FUND BALANCE - GAAP BASIS End of period$111,476 2005 CITY OF GEORGETOWN, TEXAS FIRE BILLING SPECIAL REVENUE FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 ORIGINAL & FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO FINAL BUDGET REVENUES: Investment earnings$2,000$3,718$1,718 Donations 1,0001,07575 Fire incident billings121,500120,477(1,023) Other 77,058106,41629,358 Total revenues 201,558231,68630,128 EXPENDITURES: Operations251,492148,734102,758 Total expenditures 251,492 148,734 102,758 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(49,934)82,952132,886 OTHER FINANCING SOURCES (USES): Operating transfers out (61,600)(61,592)8 Total other financing sources (uses) (61,600)(61,592)8 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(111,534)21,360132,894 FUND BALANCE, Beginning of period $111,534108,402(3,132) FUND BALANCE - BUDGETARY BASIS, End of period129,762$129,762 Adjustments to GAAP: Reverse current year encumbrances FUND BALANCE - GAAP BASIS End of period$129,762 2005 CITY OF GEORGETOWN, TEXAS LIBRARY RESTRICTED SPECIAL REVENUE FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 ORIGINAL BUDGET FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Grants and entitlements$8,800$6,806$(1,994) Investment earnings$7007001,272572 Donations 20,00022,50037,51715,017 Total revenues 20,70032,00045,59513,595 EXPENDITURES: Personnel14,29214,292 Operations40,64737,65527,9239,732 Total expenditures 40,647 51,94742,215 9,732 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(19,947)(19,947)3,38023,327 FUND BALANCE, Beginning of period $19,947$19,94747,75627,809 FUND BALANCE - BUDGETARY BASIS, End of period 51,136$51,136 Adjustments to GAAP: Reverse current year encumbrances65 FUND BALANCE - GAAP BASIS End of period $51,201 2005 CITY OF GEORGETOWN, TEXAS MAIN STREET FACADE SPECIAL REVENUE FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 ORIGINAL & FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Investment earnings$100$537$437 Donations 200(200) Total revenues 300537237 EXPENDITURES: Operations29,8836,99322,890 Total expenditures 29,8836,993 22,890 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(29,583)(6,456)23,127 OTHER FINANCING SOURCES (USES): Transfers in 15,00021,4426,442 Total other financing sources (uses) 15,00021,4426,442 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(14,583)14,98629,569 FUND BALANCE, Beginning of period $14,58316,9702,387 FUND BALANCE - BUDGETARY BASIS, End of period31,956$31,956 Adjustments to GAAP: Reverse current year encumbrances FUND BALANCE - GAAP BASIS End of period$31,956 2005 CITY OF GEORGETOWN, TEXAS MAPPING SPECIAL REVENUE FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 ORIGINAL & FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Investment earnings$188$587$399 Mapping fees 20,35017,898(2,452) Total revenues 20,53818,485(2,053) EXPENDITURES: Operations38,38819,39818,990 Total expenditures 38,38819,39818,990 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(17,850)(913)16,937 OTHER FINANCING SOURCES (USES): Transfers in 11,20011,200 Transfers out(5,088)(5,088) Total other financing sources (uses) 6,1126,112 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(11,738)5,19916,937 FUND BALANCE, Beginning of period $11,73826,02814,290 FUND BALANCE - BUDGETARY BASIS, End of period 31,227$31,227 Adjustments to GAAP: Reverse current year encumbrances FUND BALANCE - GAAP BASIS End of period$31,227 2005 CITY OF GEORGETOWN, TEXAS PARKS SPECIAL REVENUE FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 2005 ORIGINAL & FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Grants and entitlements$590,000$589,923$(77) Investment earnings2,3004,7092,409 Donations 767767 Other 132,250105,718(26,532) Total revenues 724,550701,117(23,433) EXPENDITURES: Operations850,433819,66930,764 Total expenditures 850,433819,66930,764 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(125,883)(118,552)7,331 OTHER FINANCING SOURCES (USES): Transfers in 17,53917,539 Total other financing sources (uses) 17,53917,539 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(108,344)(101,013)7,331 FUND BALANCE, Beginning of period $108,344206,601 98,257 FUND BALANCE - BUDGETARY BASIS, End of period105,588$105,588 Adjustments to GAAP: Reverse current year encumbrances2,888 FUND BALANCE - GAAP BASIS End of period$108,476 CITY OF GEORGETOWN, TEXAS POLICE SPECIAL REVENUE FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 ORIGINAL BUDGET FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Grants and entitlements$65,049$130,959$85,422$(45,537) Investment earnings1,3401,3401,770430 Donations 25,20039,70036,510(3,190) Total revenues 91,589171,999123,702(48,297) EXPENDITURES: Personnel89,69099,19287,09012,102 Operations13,20326,04126,041 Capital outlay36,996104,613104,613 Total expenditures 139,889229,846217,74412,102 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(48,300)(57,847)(94,042)(36,195) OTHER FINANCING SOURCES (USES): Transfers in 24,64124,64122,770(1,871) Total other financing sources (uses) 24,64124,64122,770(1,871) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(23,659)(33,206)(71,272)(38,066) FUND BALANCE, Beginning of period $23,659$23,65972,54348,884 FUND BALANCE - BUDGETARY BASIS, End of period 1,271$1,271 Adjustments to GAAP: Reverse current year encumbrances62,263 FUND BALANCE - GAAP BASIS End of period $63,534 2005 CITY OF GEORGETOWN, TEXAS STREET TAX SPECIAL REVENUE FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 ORIGINAL BUDGET FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Sales tax$1,133,000$1,133,000$1,224,261$91,261 Investment earnings2,5002,50021,76619,266 Total revenues 1,135,5001,135,5001,246,027110,527 EXPENDITURES: Capital outlay1,280,0001,500,0001,347,398152,602 Total expenditures 1,280,0001,500,0001,347,398152,602 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(144,500)(364,500)(101,371)263,129 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS (144,500)(364,500)(101,371)263,129 FUND BALANCE, Beginning of period 412,187412,187384,974(27,213) FUND BALANCE - BUDGETARY BASIS, End of period$267,687$47,687283,603$235,916 Adjustments to GAAP: Reverse current year encumbrances 875,242 FUND BALANCE - GAAP BASIS End of period $1,158,845 2005 CITY OF GEORGETOWN, TEXAS TOURISM SPECIAL REVENUE FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 ORIGINAL BUDGET FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Hotel/Motel tax $250,000$250,000$283,676$33,676 Investment earnings3,9503,9503,949(1) Other 36,38451,38450,644(740) Total revenues 290,334305,334338,26932,935 EXPENDITURES: Personnel136,542134,142134,06676 Operations200,599243,557243,053504 Total expenditures 337,141377,699377,119 580 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(46,807)(72,365)(38,850)33,515 OTHER FINANCING SOURCES (USES): Transfers in43,94043,94043,940 Transfers out (55,000)(61,442)(61,442) Total other financing sources (uses) (11,060)(17,502)(17,502) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(57,867)(89,867)(56,352)33,515 FUND BALANCE, Beginning of period 146,159146,159160,43314,274 FUND BALANCE - BUDGETARY BASIS, End of period$88,292$56,292 104,081$47,789 Adjustments to GAAP: Reverse current year encumbrances42,460 FUND BALANCE - GAAP BASIS End of period $146,541 2005 CITY OF GEORGETOWN, TEXAS VILLAGE IMPROVEMENT DISTRICT SPECIAL REVENUE FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 ORIGINAL & FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Property assessments$91,675$89,134$(2,541) Investment earnings500936436 Other 38,77512,215(26,560) Total revenues 130,950102,285(28,665) EXPENDITURES: Operations130,950101,86829,082 Total expenditures $130,950101,86829,082 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES417417 FUND BALANCE - BUDGETARY BASIS, End of period 417$417 Adjustments to GAAP: Reverse current year encumbrances FUND BALANCE - GAAP BASIS End of period$417 2005 CITY OF GEORGETOWN, TEXAS STREET IMPROVEMENTS FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 VARIANCE REVENUES: Investment earnings$2,000$7,927 $5,927 Other16,80022,2505,450 Total revenues18,80030,17711,377 DEFICIENCY OF REVENUES OVER EXPENDITURES18,80030,17711,377 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES - BUDGETARY BASIS 18,80030,17711,377 FUND BALANCES, Beginning of period95,059219,491124,432 FUND BALANCES - BUDGETARY BASIS, End of Period $113,859249,668 $135,809 Adjustments to GAAP: Reverse current year encumbrances205 FUND BALANCES - GAAP BASIS End of period$249,873 ORIGINAL & FINAL BUDGET ACTUAL BUDGETARY BASIS 2005 Supplementary Individual Fund Financial Statements and Schedules – Major Governmental Funds These supplementary statements and schedules are included to provide management additional information for financial analysis. CITY OF GEORGETOWN, TEXAS GENERAL FUND COMPARATIVE BALANCE SHEETS AS OF SEPTEMBER 30, 2005 AND 2004 20052004 ASSETS: Cash and cash equivalents$1,789,388$1,774,007 Investments5,982,5473,595,091 Accounts receivable (net of allowance for uncollectible accounts): Delinquent taxes 167,675184,268 Sales taxes 887,901737,779 Other 444,544139,888 Prepaid items204,750267,193 Inventories 897 Long-term note receivable1,193,5861,491,486 TOTAL ASSETS $10,671,288$8,189,712 LIABILITIES AND FUND BALANCE: Liabilities: Accounts payable$1,259,787$742,278 Unearned revenue 1,940,5472,010,629 Total liabilities 3,200,3342,752,907 Fund Balance: Reserved for: Encumbrances975,842685,155 Inventories897 Prepaid items204,750267,193 Unreserved6,289,4654,484,457 Total fund balance7,470,9545,436,805 TOTAL LIABILITIES AND FUND BALANCE $10,671,288$8,189,712 CITY OF GEORGETOWN, TEXAS GENERAL FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FISCAL YEARS ENDED SEPTEMBER 30, 2005 AND 2004 20052004 REVENUES: Property taxes: Current$5,470,721 $4,891,350 Delinquent107,145 18,550 Penalties and interest67,976 83,362 Other147,427 146,171 Sales tax4,823,378 4,217,991 Franchise taxes1,942,246 1,844,683 Licenses and permits1,266,295 1,078,048 Charges for service823,980 818,407 Fines714,596 634,446 Donations and grants1,155 2,438 Investment income166,095 38,662 Other income412,288 391,438 Total revenues 15,943,30214,165,546 EXPENDITURES: Current: Culture - recreation3,808,0223,719,476 Development1,933,0761,888,150 Fire services3,518,5973,246,583 General government1,802,7521,741,600 Highways and streets1,691,8761,879,105 Police5,603,5215,474,007 Total expenditures 18,357,84417,948,921 EXCESS EXPENDITURES OVER REVENUES (2,414,542)(3,783,375) OTHER FINANCING SOURCES (USES): Transfers in 4,804,6055,367,736 Transfers out (355,914)(131,661) Total other financing sources (uses) 4,448,6915,236,075 EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES)2,034,1491,452,700 FUND BALANCES, Beginning of period5,436,8053,984,105 FUND BALANCES, End of period $7,470,954$5,436,805 CITY OF GEORGETOWN, TEXAS GENERAL FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 (WITH COMPARATIVE FOR 2004) 2005 ACTUAL2004 ACTUAL ORIGINALFINALBUDGETARY VARIANCEBUDGETARY BUDGETBUDGETBASIS TO BUDGETBASIS REVENUES: TAXES: Property tax: Current$5,475,000$5,475,000$5,470,721$(4,279)$4,891,350 Delinquent 32,00032,000107,14575,14518,550 Penalties and interest 30,00030,00067,97637,97683,362 Total property tax 5,537,0005,537,0005,645,842108,8424,993,262 Sales tax 4,300,0004,300,0004,823,378523,3784,217,991 Franchise taxes 1,981,4001,981,4001,942,246(39,154)1,844,683 Other 180,000180,000147,427(32,573)146,171 Total taxes 11,998,40011,998,40012,558,893560,49311,202,107 LICENSES AND PERMITS: Permits and inspection fees 870,625870,6251,246,527375,9021,064,918 Licenses 6,0006,00019,76813,76813,130 Total licenses and permits 876,625876,6251,266,295389,6701,078,048 CHARGES FOR SERVICES: Library 42,00042,00045,6023,60243,484 Animal services28,00028,00038,92410,92433,258 Parks and recreation608,600608,600653,95745,357629,398 Fire protection 60,00060,00060,00060,000 Police support 37,50074,50025,497(49,003)52,267 Total charges for services 776,100813,100823,98010,880818,407 FINES AND FORFEITURES 595,000595,000714,596119,596634,446 INTEREST AND OTHER: Investment income 35,00035,000167,426132,42651,341 Rent 85,00085,00070,934(14,066)75,235 Miscellaneous 349,100349,100525,129176,029386,006 Total interest and other 469,100469,100763,489294,389512,582 TOTAL REVENUES14,715,22514,752,22516,127,2531,375,02814,245,590 EXPENDITURES: CULTURE - RECREATION: Parks: Personnel 788,001749,884749,884829,621 Operations 554,581615,958615,958552,996 Capital outlay 7,0007,000104,975 Total parks 1,342,5821,372,8421,372,8421,487,592 Recreation: Personnel 521,948521,551521,551396,383 Operations 194,864209,446209,446180,786 Total recreation 716,812730,997730,997577,169 (continued) 2005 ACTUAL2004 ACTUAL ORIGINALFINALBUDGETARY VARIANCEBUDGETARY BUDGETBUDGETBASIS TO BUDGETBASIS Recreation programs: Personnel $329,391$285,376$279,991$5,385$281,104 Operations 436,758442,713442,713413,208 Capital outlay15,00015,000 Total recreation 766,149743,089737,7045,385694,312 Library: Personnel691,926670,526653,32317,203590,695 Operations 250,592250,592248,8021,790264,812 Capital outlay 90,25090,26590,26590,189 Total library1,032,7681,011,383992,39018,993945,696 TOTAL CULTURE - RECREATION3,858,3113,858,3113,833,93324,3783,704,769 DEVELOPMENT: Administration: Personnel261,134192,651192,651282,223 Operations 113,265148,423148,423121,428 Total administration374,399341,074341,074403,651 Current planning: Personnel317,592344,101344,101353,136 Operations 53,13850,34750,34725,195 Total current planning370,730394,448394,448378,331 Long range planning: Personnel178,997168,720168,720130,028 Operations 45,67442,80142,80172,962 Total long range planning224,671211,521211,521202,990 Inspection services: Personnel 559,711575,241567,7687,473455,510 Operations 97,56398,91798,91791,665 Total inspection services657,274674,158666,6857,473547,175 Code enforcement: Personnel298,915302,135294,5517,584284,955 Operations 76,61199,26499,26470,331 Total fire prevention375,526401,399393,8157,584355,286 TOTAL DEVELOPMENT2,002,6002,022,6002,007,54315,0571,887,433 FIRE SERVICES: Fire administration: Personnel 216,937221,165216,4264,739230,791 Operations 184,309190,181190,181185,575 Total fire administration401,246411,346406,6074,739416,366 Fire operations: Personnel 2,859,3562,835,7562,706,278129,4782,496,551 Operations 395,546409,046407,1101,936347,485 Total fire operations3,254,9023,244,8023,113,388131,4142,844,036 TOTAL FIRE SERVICES 3,656,148 3,656,1483,519,995136,1533,260,402 (continued) CITY OF GEORGETOWN, TEXAS GENERAL FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 (WITH COMPARATIVE FOR 2004) 2005 ACTUAL2004 ACTUAL ORIGINALFINALBUDGETARY VARIANCEBUDGETARY BUDGETBUDGETBASIS TO BUDGETBASIS GENERAL GOVERNMENT: General government: Operations $842,627$842,627$824,609$18,018$742,731 Total general government 842,627842,627824,60918,018742,731 City council: Personnel85,22685,22682,4742,75279,964 Operations 182,251183,951181,2402,711158,351 Total city council 267,477269,177263,7145,463238,315 City manager's office: Personnel 514,758495,058482,14312,915444,233 Operations 166,577164,577156,5588,019174,230 Capital 188,000188,00073,723114,277211,115 Total city manager's office869,335847,635712,424135,211829,578 TOTAL GENERAL GOVERNMENT 1,979,4391,959,4391,800,747158,6921,810,624 HIGHWAYS AND STREETS: Streets operating: Personnel 621,973603,396586,88616,510574,660 Operations 528,819536,794523,81012,984609,769 Capital outlay825,000835,602835,602739,540 Total streets operating1,975,7921,975,7921,946,29829,4941,923,969 TOTAL HIGHWAYS AND STREETS1,975,7921,975,7921,946,29829,4941,923,969 POLICE SERVICES: Organization and administration: Personnel 564,206565,110556,990 8,120 509,343 Operations 319,755325,032325,032288,973 Capital outlay15,00018,11918,119 Total organization and administration898,961908,261900,1418,120798,316 Support services bureau: Personnel 1,560,9291,434,7071,200,281234,4261,368,661 Operations 170,845170,845154,61116,234175,737 Capital outlay 72,00061,20010,8009,241 Total support services bureau1,731,7741,677,5521,416,092261,4601,553,639 Field operations bureau: Personnel 2,269,3482,280,7612,279,4981,2632,122,144 Operations 409,269454,227454,227378,051 Capital outlay 20,00020,0002,02417,9767,654 Total field operations bureau2,698,6172,754,9882,735,74919,2392,507,849 (continued) 2005 ACTUAL2004 ACTUAL ORIGINALFINALBUDGETARY VARIANCEBUDGETARY BUDGETBUDGETBASIS TO BUDGETBASIS Animal services: Personnel$278,033$286,967$286,967$270,013 Operations 84,621101,238101,238105,283 Total animal services362,654388,205388,205375,296 Municipal court: Personnel 230,243219,370215,206$4,164170,267 Operations 59,03169,90469,90469,098 Total municipal court 289,274289,274285,1104,164239,365 TOTAL POLICE SERVICES5,981,2806,018,2805,725,297292,9835,474,465 TOTAL EXPENDITURES19,453,57019,490,57018,833,813656,75718,061,662 DEFICIENCY OF REVENUES OVER EXPENDITURES(4,738,345)(4,738,345)(2,706,560)2,031,785(3,816,072) OTHER FINANCING SOURCES (USES): Transfers in4,675,5004,675,5004,804,605129,1055,367,736 Transfers out(357,785)(357,785)(355,914)1,871(131,661) Total other financing sources (uses)4,317,7154,317,7154,448,691130,9765,236,075 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(420,630)(420,630)1,742,1312,162,7611,420,003 FUND BALANCE - BUDGETARY BASIS, Beginning of period4,370,1724,370,1724,744,968374,7963,324,965 FUND BALANCE - BUDGETARY BASIS, End of period $3,949,542$3,949,5426,487,099$2,537,5574,744,968 Adjustments to GAAP: Reverse current year encumbrances975,842685,156 Record net unrealized gain on investments8,0136,681 FUND BALANCE - GAAP BASIS, End of period $7,470,954$5,436,805 CITY OF GEORGETOWN, TEXAS GEORGETOWN TRANSPORTATION ENHANCEMENT CORPORATION COMPARATIVE BALANCE SHEETS AS OF SEPTEMBER 30, 2005 AND 2004 20052004 ASSETS: Cash and cash equivalents Investments$8,865,547$9,588,656 Accounts receivable: Sales Tax 438,997364,810 Other 653,9641,808 TOTAL ASSETS $9,958,508 $9,955,274 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable$94,942$101,903 Total liabilities 94,942101,903 Fund Balance: Reserved for: Encumbrances2,473,528660,399 Capital projects7,390,0389,192,972 Total fund balance9,863,5669,853,371 TOTAL LIABILITIES AND FUND BALANCE $9,958,508 $9,955,274 CITY OF GEORGETOWN, TEXAS GEORGETOWN TRANSPORTATION ENHANCEMENT CORPORATION COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FISCAL YEAR ENDED SEPTEMBER 30, 2005 AND 2004 20052004 REVENUES: Sales tax$2,448,521$2,118,443 Development contributions1,347,125 Investment earnings171,31964,748 Total revenues 3,966,9652,183,191 EXPENDITURES: General government184,294162,379 Capital outlay6,774,6273,657,796 Total expenditures6,958,9213,820,175 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (2,991,956)(1,636,984) OTHER FINANCING SOURCES (USES): Bond proceeds4,175,0009,392,133 Interest and fiscal charges(100,000)(48,164) Total other financing sources (uses) 3,002,1519,070,760 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDI- TURES AND OTHER FINANCING (USES)10,1957,433,776 FUND BALANCES, End of period $9,863,566$9,853,371 CITY OF GEORGETOWN, TEXAS GEORGETOWN TRANSPORTATION ENHANCEMENT CORPORATION SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 (WITH COMPARATIVE FOR 2004) ORIGINAL BUDGET FINAL BUDGET 2005 ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET 2004 ACTUAL BUDGETARY BASIS REVENUES: Sales tax$2,142,300 $2,142,300$2,448,521$306,221$2,118,443 Court fees Investment earnings65,000 65,000167,467102,46771,628 Other 1,156,7861,156,7861,347,125190,339 Total revenues 3,364,0863,364,0863,963,113599,0272,190,071 EXPENDITURES: Personnel Operations250,200250,200214,90635,294162,379 Capital outlay13,438,83312,538,8338,802,8553,735,9783,030,075 Total expenditures 13,689,03312,789,0339,017,7613,771,2723,192,454 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(10,324,947)(9,424,947)(5,054,648)4,370,299(1,002,383) OTHER FINANCING SOURCES (USES): Bond proceeds4,214,9004,214,9004,175,000(39,900)9,392,133 Bond issuance costs(181,500)(181,500)(100,000)81,500(48,164) Operating transfers out (1,356,853)(1,356,853)(1,061,649)295,204(273,209) Total other financing sources (uses) 2,676,5472,676,5473,013,351336,8049,070,760 FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS (7,648,400)(6,748,400)(2,041,297)4,707,1038,068,377 FUND BALANCES, Beginning of period 9,304,1159,304,1159,434,362130,2471,131,474 FUND BALANCES - BUDGETARY BASIS, End of period$1,655,715 $2,555,715 7,393,065 $4,837,3509,199,851 Adjustments to GAAP: Reverse current year encumbrances 2,473,528660,399 Record net unrealized loss on investment(3,027)(6,879) FUND BALANCES - GAAP BASIS End of period $9,863,566$9,853,371 CITY OF GEORGETOWN, TEXAS DEBT SERVICE FUND COMPARATIVE BALANCE SHEETS SEPTEMBER 30, 2005 AND 2004 20052004 ASSETS: Investments$504,150$757,759 Accounts receivable: Delinquent taxes 88,60499,069 TOTAL ASSETS $592,754$856,828 LIABILITIES AND FUND BALANCE: Liabilities: Unearned revenue$84,603$88,392 Total liabilities 84,60388,392 Fund Balances: Reserved for debt service508,151768,436 TOTAL LIABILITIES AND FUND BALANCES $592,754$856,828 CITY OF GEORGETOWN, TEXAS DEBT SERVICE FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FISCAL YEARS ENDED SEPTEMBER 30, 2005 AND 2004 20052004 REVENUES: Ad valorem taxes: Current$2,708,365$2,212,776 Delinquent 53,94311,404 Total ad valorem taxes 2,762,3082,224,180 Investment earnings and other 47,09817,098 Total revenues 2,809,4062,241,278 EXPENDITURES: Principal retirement 2,500,9011,262,782 Interest and fiscal charges 1,670,4241,146,741 Total expenditures4,171,3252,409,523 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(1,361,919)(168,245) OTHER FINANCING SOURCES: Bond Proceeds9,180,166 Payment to refunding escrow agent(9,243,904) Operating transfers in1,165,372273,037 Total other financing sources 1,101,634273,037 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURE AND OTHER FINANCING (USES)(260,285)104,792 FUND BALANCES, Beginning of period 768,436663,644 FUND BALANCES, End of period $508,151$768,436 CITY OF GEORGETOWN, TEXAS DEBT SERVICE FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 (WITH COMPARATIVE FOR 2004) ORIGINAL BUDGET FINAL BUDGET 2005 ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET 2004 ACTUAL BUDGETARY BASIS REVENUES: Ad valorem taxes$2,710,000$2,710,000$2,762,308$52,308$2,224,180 Investment earnings15,00015,00047,31832,31817,241 Total revenues 2,725,0002,725,0002,809,62684,6262,241,421 OTHER FINANCING SOURCES (USES): Principal, interest and fiscal charges(3,843,828)(4,210,089)(4,171,325)38,764(2,409,666) Bond proceeds9,180,1659,180,165 Payment to refunding escrow agent(9,243,904)(9,243,904) Transfers in1,107,8841,107,8841,165,37257,488273,037 Total other financing sources (uses) (2,735,944)(3,165,944)(3,069,692)96,252(2,136,629) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING SOURCES - BUDGETARY BASIS(10,944)(440,944)(260,066)180,878104,792 FUND BALANCE, Beginning of period 729,7941,159,794768,217(391,577)663,644 FUND BALANCE - BUDGETARY BASIS, End of period$718,850$718,850 508,151$(210,699) 768,436 Adjustments to GAAP: Reverse current year encumbrances FUND BALANCE - GAAP BASIS End of period $508,151$768,436 CITY OF GEORGETOWN, TEXAS GENERAL CAPITAL PROJECTS COMPARATIVE BALANCE SHEET AS OF SEPTEMBER 30, 2005 AND 2004 20052004 ASSETS: Cash and cash equivalents$63,766$6,423 Investments6,655,788908,921 TOTAL ASSETS $6,719,554$915,344 LIABILITIES AND FUND BALANCES: Liabilities: Accounts payable$159,295$59,598 Due to other funds345,093 Total liabilities504,38859,598 Fund Balances: Reserved for encumbrances1,465,671582,119 Reserved for capital projects4,749,495273,627 Total fund balances6,215,166855,746 TOTAL LIABILITIES AND FUND BALANCES $6,719,554$915,344 CITY OF GEORGETOWN, TEXAS GENERAL CAPITAL PROJECTS COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FISCAL YEAR ENDED SEPTEMBER 30, 2005 AND 2004 REVENUES: Investment earnings$72,991$19,314 Other110,76081,782 Total revenues183,751101,096 EXPENDITURES: Capital outlay3,812,0581,237,241 Total expenditures3,812,0581,237,241 DEFICIENCY OF REVENUES OVER EXPENDITURES(3,628,307)(1,136,145) OTHER FINANCING SOURCES (USES) Bond proceeds9,030,0002,847,867 Interest and fiscal charges(127,225)(59,029) Sale of property896,113 Tranfers in313,16587,745 Transfers out(1,124,326)(1,035,066) Total other financing sources (uses)8,987,7271,841,517 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES5,359,420705,372 FUND BALANCES, Beginning of period855,746150,374 FUND BALANCES, End of period $6,215,166$855,746 20052004 CITY OF GEORGETOWN, TEXAS GENERAL CAPITAL PROJECTS FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2005 (WITH COMPARATIVE FOR 2004) ORIGINAL BUDGET FINAL BUDGET 2005 ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET 2004 ACTUAL BUDGETARY BASIS REVENUES: Investment earnings$15,991$15,991$65,784$49,793$19,482 Donations Other 110,760110,76081,782 Total revenues15,99115,991176,544160,553101,264 EXPENDITURES: Capital outlay2,376,2758,857,8454,636,3964,221,4491,697,368 Bond issuance cost68,010186,440186,44059,029 Total expenditures2,444,2859,044,2854,822,8364,221,4491,756,397 DEFICIENCY OF REVENUES OVER EXPENDITURES(2,428,294)(9,028,294)(4,646,292)4,382,002(1,655,133) OTHER FINANCING SOURCES (USES): Bond proceeds1,900,0009,000,0009,030,00030,0002,847,867 Sale of Property800,000800,000896,11296,112 Transfers in 313,165313,165323,73810,57313,220 Tranfers out(741,600) (1,241,600) (1,124,327) 117,273(1,035,065) Total other financing sources (uses) 2,271,565 8,871,5659,125,523253,9581,826,022 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES - BUDGETARY BASIS(156,729)(156,729)4,479,2314,635,960170,889 FUND BALANCES, Beginning of period171,229171,229270,26499,035102,738 FUND BALANCES - BUDGETARY BASIS, End of Period $14,500$14,5004,749,495$4,734,995273,627 Adjustments to GAAP: Reverse current year encumbrances1,465,671582,119 FUND BALANCES - GAAP BASIS, End of period $6,215,166$855,746 . Combining Financial Statements Nonmajor Proprietary Funds Enterprise Funds - The City's utilities are accounted for and operated in a manner similar to private business enterprises. Each utility, accounted for as an independent entity, is an enterprise fund. Enterprise fund accounting is used where the intent of the City Council is to finance or recover the costs of providing goods or services to the general public on a continuing basis primarily through user charges or when the City Council has decided that periodic determination of net income is appropriate for accountability purposes. Airport Fund - used to account for revenues and expenses related to the operation and maintenance of the City's airport. All activities necessary to provide such services are accounted for in this fund including, but not limited to, administration, operations, maintenance, financing and related debt service, billing, collection and capital improvements. Sanitation Fund - used to account for revenues and expenses relating to the operations of the City's sanitation contract. Stormwater Drainage Fund - used to account for revenues and expenses related to the operations, capital projects, and debt service of the stormwater drainage facilities. Internal Service Fund - This fund is used to account for services performed by one government organization or department for others. Fleet Management Fund - The City uses this fund to purchase and account for all major equipment and vehicles. Each item is assigned an annual lease value which the leasing department pays to the Internal Service Fund. The annual lease value is determined by the projected replacement cost divided by the years of useful life of the item. The payments made by the departments enable the Internal Service Fund to replace equipment and vehicles on a pre-planned schedule to minimize maintenance costs and reduce safety risks due to worn out equipment and vehicles. The fund also provides maintenance for all vehicles through the Vehicle Service Center. Joint Services Fund - The Joint Services Fund is composed of departments which provide services to more than one city fund. Charges for services provided are determined by allocating each specific department's cost to the using fund. Facilities Maintenance Fund - The City uses this fund to account for janitorial service, light maintenance, painting, landscape maintenance and roofing and air conditioning repairs for all City buildings. Each building is assigned an annual maintenance cost, which is paid to the Internal Service Fund by the occupying departments, based on square footage occupied. The payments made by the departments enable the Internal Service Fund to provide major and minor facility repairs on a pre- planned schedule to minimize maintenance costs and provide preventative care to reduce long-term maintenance and replacement costs. Information Services Fund - The City uses this fund to account for purchases and maintenance of the City’s computer systems. Each department pays an annual predetermined lease payment, based upon the equipment the department has. These payments enable the fund to replace older equipment and upgrade the City’s computer resources and provide assistance in maintenance of equipment. This fund also provides for the management of the City’s computer systems through personnel in the Information Services department. CITY OF GEORGETOWN, TEXAS COMBINING STATEMENT OF NET ASSETS NONMAJOR ENTERPRISE FUNDS AS OF SEPTEMBER 30, 2005 Business-type Activities Enterprise Funds STORMWATERTOTAL AIRPORTSANITATIONDRAINAGENONMAJOR FUND FUND FUND ENTERPRISE FUNDS ASSETS: Current Assets: Cash and cash equivalents$133,677$89,914$223,591 Cash and cash equivalents - Restricted 424,610424,610 Investments447,527301,014748,541 Accounts receivable: Services (net of allowance for uncollectibles)153,644$420,547203,240777,431 Other81,97981,979 Inventories43,39043,390 Total current assets 860,217420,5471,018,7782,299,542 Noncurrent Assets: Deferred charges - bond issuance costs68,16591,000159,165 Capital assets: Land and land rights981,500981,500 Distribution system 9,923,3669,923,366 Buildings and improvements7,597,1877,597,187 Machinery, furniture and equipment127,57752,00014,050193,627 Construction in progress133,49665,625199,121 Less accumulated depreciation (4,332,497)(52,000)(961,542)(5,346,039) Total capital assets (net of accumulated depreciation)4,507,2639,041,49913,548,762 Total noncurrent assets 4,575,4289,132,49913,707,927 TOTAL ASSETS $5,435,645$420,547$10,151,277$16,007,469 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable$203,298$233,650$26,780$463,728 Compensated absence12,08814,34426,432 Due to other funds54,36154,361 Current portion of long-term debt113,680130,272243,952 Accrued interest 11,58915,89327,482 Total current liabilities 340,655288,011187,289815,955 Noncurrent liabilities: Compensated absence26,31428,21654,530 Long-term debt1,625,8592,639,5754,265,434 Total noncurrent liabilities1,652,1732,667,7914,319,964 Total liabilities 1,992,828288,0112,855,0805,135,919 Net Assets: Invested in capital assets (net of related debt)2,767,7246,271,6529,039,376 Unrestricted675,093132,5361,024,5451,832,174 Total net assets3,442,817132,5367,296,19710,871,550 TOTAL LIABILITIES AND NET ASSETS $5,435,645$420,547$10,151,277$16,007,469 CITY OF GEORGETOWN, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS NONMAJOR ENTERPRISE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2005 Business-type Activities Enterprise Funds STORMWATERTOTAL AIRPORTSANITATIONDRAINAGENONMAJOR FUND FUND FUND ENTERPRISE FUNDS OPERATING REVENUES: Waste $3,150,493 $3,150,493 Other$2,352,094 76,777$1,572,8544,001,725 Total operating revenues2,352,0943,227,2701,572,8547,152,218 OPERATING EXPENSES: Depreciation429,491 279,760709,251 Utility contracts 2,868,758 2,868,758 Other2,096,005 807,3512,903,356 Total operating expenses2,525,4962,868,7581,087,1116,481,365 NET OPERATING INCOME (LOSS)(173,402)358,512485,743670,853 NONOPERATING REVENUES (EXPENSES): Investment earnings13,02414,31927,343 Donations and grants134,358 134,358 Interest and fiscal charges(80,773)(129,108)(209,881) Other63,807 63,807 Total nonoperating revenues (expenses)130,416 (114,789)15,627 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS (42,986)358,512370,954686,480 CONTRIBUTIONS AND TRANSFERS: Capital contributions 1,785,8711,785,871 Transfers out (256,182)(119,369)(375,551) Total contributions and transfers (256,182)1,666,5021,410,320 CHANGE IN NET ASSETS (42,986)102,3302,037,4562,096,800 TOTAL NET ASSETS - beginning3,485,80330,2065,258,7418,774,750 TOTAL NET ASSETS - ending $3,442,817$132,536$7,296,197$10,871,550 CITY OF GEORGETOWN, TEXAS COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2005 Business-type Activities Enterprise Funds STORMWATERTOTAL AIRPORTSANITATIONDRAINAGENONMAJOR FUND FUND FUND ENTERPRISE FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers$2,303,942$3,190,910$1,535,529$7,030,381 Payments to suppliers(1,761,477)(2,811,208)(542,781)(5,115,466) Franchise fees (64,045)(29,965)(94,010) Payments to employees for services(204,985)(229,983)(434,968) Net cash provided by operating activities337,480315,657732,8001,385,937 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers out (256,182)(119,369)(375,551) Payments from (to) other funds (59,475)(59,475) Net cash provided by (used for) noncapital financing activities $(315,657)(119,369)(435,026) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITES: Acquisition of capital assets(83,496)(312,523)(396,019) Donations and grants134,358134,358 Proceeds from issuance of long-term debt 435,000435,000 Principal paid on revenue and certificates of obligation bonds(121,759)(142,590)(264,349) Interest paid on revenue and certificates of obligation bonds(75,366)(133,102)(208,468) Net cash provided by (used for) capital and related financing activities(146,263)(153,215)(299,478) CASH FLOWS FROM INVESTING ACTIVITIES: Interest received13,02414,31927,343 Change in temporary investments(194,962)(72,542)(267,504) Net cash provided by (used for) investing activities (181,938)(58,223)(240,161) Net increase (decrease) in cash and cash equivalents9,279401,993411,272 Cash and cash equivalents at beginning of year124,398112,531236,929 Cash and cash equivalents at end of year 133,677 514,524 648,201 Classified as: Current assets133,67789,914223,591 Restricted assets 424,610424,610 Total $133,677 $514,524 $648,201 Non-cash disclosure Developer contributions $1,785,871$1,785,871 (continued) CITY OF GEORGETOWN, TEXAS COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2005 Business-type Activities Enterprise Funds STORMWATERTOTAL AIRPORTSANITATIONDRAINAGENONMAJOR FUND FUND FUND ENTERPRISE FUNDS OPERATING INCOME (LOSS)$(173,402)$358,512$485,743$670,853 Adjustments to reconcile operating income (loss) to cash provided by (used in) operating activities: Depreciation429,491279,760709,251 Other income63,80763,807 Bad debt expense 9069811,887 Decrease (increase) in inventories(30,699)(30,699) Decrease (increase) in accounts receivable(111,959)(37,266)(38,306)(187,531) Increase (decrease) in accounts payable158,454(6,495)3,381155,340 Increase (decrease) in compensated absences payable1,7881,2413,029 Net cash provided by operating activities$337,480$315,657$732,800$1,385,937 INTERNAL SERVICE FUNDS AS OF SEPTEMBER 30, 2005 JOINT SERVICESTOTALS FUND 2005 ASSETS: Current: Cash and cash equivalents$159,173$71,492$13,730$27,639$272,034 Investments532,882239,34445,96592,529910,720 Prepaid expense1,7212,49610,68314,900 Accounts receivable1,53794,11395,650 Inventories255,115255,115 Total current assets693,592661,78562,191130,8511,548,419 Property and equipment: Land and land rights214,065214,065 Buildings and improvements38,145813,681428,0601,279,886 Machinery, furniture and equipment11,107,5151,013,867311,9482,047,91014,481,240 Construction in progress124,879 124,879 Total property and equipment cost11,270,5392,041,613740,0082,047,91016,100,070 Less accumulated depreciation(5,701,699)(1,790,308)(460,418)(1,397,167)(9,349,592) Net property and equipment5,568,840251,305279,590650,7436,750,478 TOTAL ASSETS $6,262,432$913,090$341,781$781,594$8,298,897 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable$25,450$404,615$15,054$53,070$498,189 Compensated absence10,0863,89926,02840,013 Total current liabilities35,536404,61518,95379,098538,202 Long term liabilities: Compensated absence20,9978,10452,80581,906 Total liabilities56,533404,61527,057131,903620,108 Net Assets: Invested in capital assets (net of related debt)5,568,840251,305279,590650,7436,750,478 Unrestricted637,059257,17035,134(1,052)928,311 Total net assets6,205,899508,475314,724649,6917,678,789 TOTAL LIABILITIES AND NET ASSETS $6,262,432$913,090$341,781$781,594$8,298,897 CITY OF GEORGETOWN, TEXAS INFORMATION SERVICES FLEET MANAGEMENT COMBINING STATEMENT OF NET ASSETS FUND FUND FACILITIES MAINTENANCE FUND CITY OF GEORGETOWN, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2005 FLEETJOINTFACILITIESINFORMATION MANAGEMENT SERVICESMAINTENANCE SERVICES FUND FUND FUND FUND 2005 OPERATING REVENUES - Charges for services$1,192,546$4,937,167$670,815$1,331,194$8,131,722 OPERATING EXPENSES: Administration 725,014725,014 Accounting 511,807511,807 City wide HR services 426,831426,831 Customer service 119,930119,930 Economic development administration326,559326,559 Employee and organizational services374,480374,480 Facilities maintenance contracts 500,065500,065 Facilities maintenance services 116,458116,458 Finance and administration 389,388389,388 Fleet management operations165,979 165,979 Information resources 719,126719,126 Information resources capital replacement & contracts 589,493589,493 Joint services contracts 448,074448,074 Legal services 311,853311,853 Purchasing and properties 384,554384,554 Service center596,512 596,512 Systems engineering 581,102581,102 Utility office 756,400756,400 Depreciation922,7226,24854,709174,4341,158,113 Total operating expenses 1,685,2135,362,240671,2321,483,0539,201,738 NET OPERATING INCOME (LOSS)(492,667)(425,073)(417)(151,859)(1,070,016) NONOPERATING REVENUES (EXPENSES): Investment earnings16,11016,8916,72012,75852,479 Loss on sale of assets(48,128)(9,466)(57,594) Other 44,910184,282229,192 Total nonoperating revenues (expenses)12,892191,7076,72012,758224,077 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS (479,775)(233,366)6,303(139,101)(845,939) CONTRIBUTIONS AND TRANSFERS: Capital contributions8,197408,002416,199 Transfers in1,338,814240,000132,4101,711,224 Transfers out (149,850)(50,131)(199,981) Total contributions and transfers1,347,01190,150490,2811,927,442 CHANGE IN NET ASSETS 867,236(143,216)6,303351,1801,081,503 NET ASSETS, Beginning of period5,338,663651,691308,421298,5116,597,286 NET ASSETS, End of period $6,205,899$508,475$314,724$649,691$7,678,789 TOTAL CITY OF GEORGETOWN, TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2005 FLEETJOINTFACILITIESINFORMATION MANAGEMENTSERVICESMAINTENANCESERVICESTOTALS FUND FUND FUND FUND 2005 CASH FLOWS FROM OPERATING ACTIVITIES: Department contributions$1,191,009$4,907,971$670,815$1,331,194$8,100,989 Payments to suppliers(439,301)(2,022,822)(527,499)(702,167)(3,691,789) Payments to employees for services(261,919)(3,224,854)(85,353)(587,865)(4,159,991) Net cash provided by (used for) operating activities 489,789(339,705)57,96341,162249,209 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in1,338,814240,000132,4101,711,224 Transfers out (149,850)(50,131)(199,981) Net cash provided by (used for) noncapital financing activities 1,338,81490,15082,2791,511,243 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITES: Acquisition of capital assets(1,321,040)(7,000)(33,466)(189,349)(1,550,855) Net cash provided by (used for) capital and related financing activities (1,321,040)(7,000)(33,466)(189,349)(1,550,855) CASH FLOWS FROM INVESTING ACTIVITIES: Interest received16,11016,8916,72012,75852,479 Change in temporary investments(420,066)129,491(26,885)23,594(293,866) Net cash provided by (used for) investing activities (403,956)146,382(20,165)36,352(241,387) Net increase (decrease) in cash 103,607(110,173)4,332(29,556)(31,790) Cash and cash equivalents at beginning of year55,566181,6659,39857,195303,824 Cash and cash equivalents at end of year 159,173 71,492 13,730 27,639 272,034 Classified as: Current assets159,17371,49213,73027,639272,034 Total $159,173 $71,492 $13,730 $27,639 $272,034 Non-cash disclosure Equity transfer$(21,050)$33,718 $12,668 Transfer of capital lease to general debt (368,787)$(368,787) Governmental tranfers to internal service funds $8,197408,002 $416,199 (continued) CITY OF GEORGETOWN, TEXAS STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 FLEETJOINTFACILITIESINFORMATION MANAGEMENTSERVICESMAINTENANCESERVICES FUND FUND FUND FUND 2005 OPERATING INCOME (LOSS)$(492,667)$(425,073)$(417)$(151,859)$(1,070,016) Adjustments to reconcile operating income (loss) to cash provided by (used in) operating activities: Depreciation922,7226,24854,709174,4341,158,113 Other income44,910184,282229,192 Decrease (increase) in prepaid expenses(1,021)(10,683)(11,704) Decrease (increase) in inventories(60,349)(60,349) Decrease (increase) in accounts receivable(1,537)(29,196)(30,733) Increase (decrease) in accounts payable14,980(14,596)2,15123,49826,033 Increase (decrease) in compensated absences payable1,3811,5205,7728,673 Net cash provided by (used for) operating activities $489,789 $(339,705)$57,963 $41,162 $249,209 TOTALS Supplementary Individual Fund Financial Statements – Enterprise Funds These supplementary statements are included to provide management additional information for financial analysis. CITY OF GEORGETOWN, TEXAS ELECTRIC FUND COMPARATIVE STATEMENTS OF NET ASSETS AS OF SEPTEMBER 30, 2005 and 2004 TOTALS 2005 2004 ASSETS: Current Assets: Cash and cash equivalents$941,256$398,578 Cash and cash equivalents - restricted170,471190,394 Investments3,146,334804,869 Investments - restricted570,708386,558 Accounts receivable: Services (net of allowance for uncollectibles)5,895,6794,877,967 Other29,93020,276 Inventories1,311,6481,502,689 Total current assets 12,066,0268,181,331 Noncurrent Assets: Long-term note receivables166832 Deferred charges - bond issuance costs283,086307,753 Total noncurrent assets 283,252308,585 Property and Equipment: Land and land rights193,735193,735 Distribution system48,232,97444,363,262 Buildings and improvements73,70773,707 Machinery, furniture and equipment536,096496,664 Construction in progress486,677 Total cost property and equipment 49,523,18945,127,368 Less accumulated depreciation (16,423,792)(14,388,715) Net property and equipment 33,099,39730,738,653 TOTAL ASSETS $45,448,675$39,228,569 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable$4,049,110$2,379,376 Compensated absence87,53276,868 Current portion of long-term debt782,264765,552 Accrued interest 58,44363,810 Total current liabilities payable from unrestricted assets 4,977,3493,285,606 Current liabilities payable from restricted assets: Customer deposits741,179576,953 Total current liabilities payable from restricted assets 741,179576,953 Total current liabilities 5,718,5283,862,559 Long term liabilities: Compensated absence169,506154,643 Long-term debt9,085,7729,293,036 Total noncurrent liabilities 9,255,2789,447,679 Total liabilities 14,973,80613,310,238 Net Assets: Invested in capital assets (net of related debt)23,231,36120,680,065 Restricted for: Unrestricted7,243,5085,238,266 Total net assets 30,474,86925,918,331 TOTAL LIABILITIES AND NET ASSETS $45,448,675$39,228,569 CITY OF GEORGETOWN, TEXAS ELECTRIC FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FISCAL YEARS ENDED SEPTEMBER 30, 2005 AND 2004 2005 2004 OPERATING REVENUES: Electric services$33,800,761$29,199,618 Other: Penalties 340,808301,900 Connection and hookup fees860,469651,424 Total other 1,201,277953,324 TOTAL OPERATING REVENUES35,002,03830,152,942 OPERATING EXPENSES: Electric operations: Personnel 1,375,1161,301,435 Operations 1,346,3911,029,800 Total electric operations2,721,5072,331,235 Depreciation 2,035,0771,889,471 Electric contracts 23,790,69621,518,386 TOTAL OPERATING EXPENSES 28,547,28025,739,092 NET OPERATING INCOME 6,454,7584,413,850 NONOPERATING REVENUES (EXPENSES): Investment earnings 131,73246,466 Interest and fiscal charges(479,195)(497,981) Other 599,703508,437 Total nonoperating revenues (expenses) 252,24056,922 INCOME BEFORE CONTRIBUTIONS AND TRANSFERS6,706,9984,470,772 CONTRIBUTIONS AND TRANSFERS: Capital contributions 788,434613,926 Transfers out (2,938,894)(3,637,109) Total contributions and transfers (2,150,460)(3,023,183) CHANGE IN NET ASSETS4,556,5381,447,589 NET ASSETS, Beginning of period25,918,33124,470,742 NET ASSETS, End of period $30,474,869$25,918,331 CITY OF GEORGETOWN, TEXAS WATER SERVICES FUND COMPARATIVE STATEMENTS OF NET ASSETS AS OF SEPTEMBER 30, 2005 and 2004 TOTALS 2005 2004 ASSETS: Current Assets: Cash and cash equivalents$2,814,333$3,034,938 Cash and cash equivalents - restricted3,758,5651,036,304 Investments7,750,3225,779,605 Investments - restricted253,8692,478,649 Prepaid expenses1,352,076929,671 Accounts receivable: Services (net of allowance for uncollectibles)2,859,4532,421,924 Due from other funds415,360122,902 Total current assets 19,203,97815,803,993 Noncurrent Assets: Long-term note receivables7,726,6499,673,781 Deferred charges - bond issuance costs923,9091,010,365 Total noncurrent assets 8,650,55810,684,146 Property and Equipment: Land and land rights469,354475,070 Distribution system110,834,055100,570,493 Buildings and improvements3,019,7943,019,794 Machinery, furniture and equipment236,382207,947 Construction in progress5,035,0604,985,311 Total cost property and equipment 119,594,645109,258,615 Less accumulated depreciation (23,588,226)(20,907,067) Net property and equipment 96,006,41988,351,548 TOTAL ASSETS $123,860,955$114,839,687 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable$881,851$663,885 Compensated absence64,92961,405 Current portion of long-term debt2,221,7492,101,330 Accrued interest 173,332177,396 Total current liabilities payable from unrestricted assets 3,341,8613,004,016 Current liabilities payable from restricted assets: Construction contracts and retainages payable361,254243,643 Total current liabilities payable from restricted assets 361,254243,643 Total current liabilities 3,703,1153,247,659 Long term liabilities: Compensated absence128,220126,008 Unearned revenue2,675,5421,264,924 Long-term debt27,974,22826,743,846 Total noncurrent liabilities 30,777,99028,134,778 Total liabilities 34,481,10531,382,437 Net Assets: Invested in capital assets (net of related debt)65,810,44259,506,372 Restricted for: Future construction1,251,844389,312 Unrestricted22,317,56423,561,566 Total net assets 89,379,85083,457,250 TOTAL LIABILITIES AND NET ASSETS $123,860,955$114,839,687 CITY OF GEORGETOWN, TEXAS WATER SERVICES FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FISCAL YEARS ENDED SEPTEMBER 30, 2005 AND 2004 2005 2004 OPERATING REVENUES: Water/Irrigation: Water services$9,838,920$8,809,186 Wastewater services5,696,8585,425,273 Irrigation services249,543130,498 Water taps 820,087717,469 Total water/irrigation16,605,40815,082,426 Other: Penalties 195,010181,388 Connection and hookup fees82,89077,110 Service fees 163,421159,377 Total other 441,321417,875 TOTAL OPERATING REVENUES17,046,72915,500,301 OPERATING EXPENSES: Water services distribution: Personnel 1,065,7831,014,193 Operations 1,882,0921,816,913 Total water services distribution2,947,8752,831,106 Depreciation 2,681,1602,224,838 Water services plant management2,719,1942,438,397 Water services contracts4,490,3784,301,102 TOTAL OPERATING EXPENSES 12,838,60711,795,443 NET OPERATING INCOME 4,208,1223,704,858 NONOPERATING REVENUES (EXPENSES): Investment earnings 573,386377,521 Interest and fiscal charges(1,396,256)(1,422,905) Gain on disposed asset160,949 Other 1,495,8891,184,751 Total nonoperating revenue (expenses) 833,968139,367 INCOME BEFORE CONTRIBUTIONS AND TRANSFERS5,042,0903,844,225 CONTRIBUTIONS AND TRANSFERS: Capital contributions2,786,1287,326,368 Transfers out (1,905,618)(1,693,696) Total contributions and transfers880,5105,632,672 CHANGE IN NET ASSETS5,922,6009,476,897 NET ASSETS, Beginning of period83,457,25073,980,353 NET ASSETS, End of period $89,379,850$83,457,250 CITY OF GEORGETOWN, TEXAS AIRPORT FUND COMPARATIVE STATEMENTS OF NET ASSETS AS OF SEPTEMBER 30, 2005 and 2004 TOTALS 2005 2004 ASSETS: Current Assets: Cash and cash equivalents$133,677$124,398 Investments447,527252,565 Accounts receivable: Services (net of allowance for uncollectibles)153,644122,875 Other81,979789 Inventories43,39012,691 Total current assets 860,217513,318 Noncurrent Assets: Deferred charges - bond issuance costs68,16517,500 Total noncurrent assets68,16517,500 Property and Equipment: Land and land rights981,500981,500 Buildings and improvements7,597,1877,597,187 Machinery, furniture and equipment127,577127,577 Construction in progress133,49650,000 Total cost property and equipment 8,839,7608,756,264 Less accumulated depreciation (4,332,497)(3,903,006) Net property and equipment 4,507,2634,853,258 TOTAL ASSETS $5,435,645$5,384,076 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable$203,298$44,844 Compensated absence12,08811,510 Current portion of long-term debt113,680100,120 Accrued interest 11,58911,051 Total current liabilities 340,655167,525 Long term liabilities: Compensated absence26,31425,104 Long-term debt1,625,8591,705,644 Total noncurrent liabilities 1,652,1731,730,748 Total liabilities1,992,8281,898,273 Net Assets: Invested in capital assets (net of related debt)2,767,7243,047,494 Unrestricted675,093438,309 Total net assets3,442,8173,485,803 TOTAL LIABILITIES AND NET ASSETS $5,435,645$5,384,076 CITY OF GEORGETOWN, TEXAS AIRPORT FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FISCAL YEARS ENDED SEPTEMBER 30, 2005 AND 2004 2005 2004 OPERATING REVENUES: Fuel sales $1,898,554$1,223,120 Contract leases 137,232125,775 Hangar/tiedown rental fees 313,145314,769 Terminal sales 3,1633,489 TOTAL OPERATING REVENUES2,352,0941,667,153 OPERATING EXPENSES: Administration: Personnel 206,773199,239 Operations 1,800,5911,243,901 Capital 88,641 Total administration 2,096,0051,443,140 Depreciation 429,491424,212 TOTAL OPERATING EXPENSES2,525,4961,867,352 NET OPERATING LOSS(173,402)(200,199) NONOPERATING REVENUES (EXPENSES) Investment earnings 13,0245,243 Interest and fiscal charges(80,773)(95,473) Donations and grants 134,358181 Other 63,80748,083 Total nonoperating revenues (expenses)130,416(41,966) CHANGE IN NET ASSETS(42,986)(242,165) NET ASSETS, Beginning of period 3,485,8033,727,968 NET ASSETS, End of period $3,442,817$3,485,803 CITY OF GEORGETOWN, TEXAS SANITATION FUND COMPARATIVE STATEMENTS OF NET ASSETS AS OF SEPTEMBER 30, 2005 and 2004 TOTALS 2005 2004 ASSETS: Current Assets: Accounts receivable: Services (net of allowance for uncollectibles)$420,547$384,187 Total current assets 420,547384,187 Property and Equipment: Machinery, furniture and equipment52,00052,000 Total cost property and equipment 52,00052,000 Less accumulated depreciation (52,000)(52,000) Net property and equipment TOTAL ASSETS $420,547$384,187 LIABILITIES AND NET ASSETS:Liabilities: Current liabilities: Accounts payable$233,650$240,145 Due to other funds54,361113,836 Total current liabilities 288,011353,981 Net Assets: Unrestricted132,53630,206 Total net assets132,53630,206 TOTAL LIABILITIES AND NET ASSETS $420,547$384,187 CITY OF GEORGETOWN, TEXAS SANITATION FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FISCAL YEARS ENDED SEPTEMBER 30, 2005 AND 2004 2005 2004 OPERATING REVENUES: Sanitation: Sanitation services$3,150,493$2,887,822 Total sanitation3,150,4932,887,822 Other: Penalties 35,93931,249 Connection and hookup fees15,71413,409 Other 25,124 Total other 76,77744,658 TOTAL OPERATING REVENUES 3,227,2702,932,480 OPERATING EXPENSES: Sanitation contracts 2,868,7582,740,495 TOTAL OPERATING EXPENSES 2,868,7582,740,495 NET OPERATING INCOME 358,512191,985 INCOME BEFORE TRANSFERS358,512191,985 TRANSFERS (OUT): Transfers out (256,182)(234,598) Total transfers (out)(256,182)(234,598) CHANGE IN NET ASSETS 102,330(42,613) NET ASSETS, Beginning of period30,20672,819 NET ASSETS, End of period $132,536$30,206 CITY OF GEORGETOWN, TEXAS STORMWATER DRAINAGE FUND COMPARATIVE STATEMENTS OF NET ASSETS AS OF SEPTEMBER 30, 2005 and 2004 TOTALS 2005 2004 ASSETS: Current Assets: Cash and cash equivalents$89,914$112,531 Cash and cash equivalents - restricted424,610 Investments301,014228,472 Accounts receivable: Services (net of allowance for uncollectibles)203,240165,915 Total current assets 1,018,778506,918 Noncurrent Assets: Deferred charges - bond issuance costs91,00066,177 Total noncurrent assets91,00066,177 Property and Equipment: Distribution system9,923,3667,844,621 Machinery, furniture and equipment14,05014,050 Construction in progress65,62545,975 Total cost property and equipment 10,003,0417,904,646 Less accumulated depreciation (961,542)(681,782) Net property and equipment 9,041,4997,222,864 TOTAL ASSETS $10,151,277$7,795,959 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable$26,780$23,399 Compensated absence14,34413,760 Current portion of long-term debt130,272137,119 Accrued interest 15,89316,699 Total current liabilities 187,289190,977 Long term liabilities: Compensated absence28,21627,559 Long-term debt2,639,5752,318,682 Total noncurrent liabilities 2,667,7912,346,241 Total liabilities2,855,0802,537,218 Net Assets: Invested in capital assets (net of related debt)6,271,6524,767,063 Unrestricted1,024,545491,678 Total net assets7,296,1975,258,741 TOTAL LIABILITIES AND NET ASSETS $10,151,277$7,795,959 CITY OF GEORGETOWN, TEXAS STORMWATER DRAINAGE FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FISCAL YEARS ENDED SEPTEMBER 30, 2005 AND 2004 2005 2004 OPERATING REVENUES: Stormwater drainage fees$1,551,823$1,314,241 Other: Penalties13,38311,467 Service fees7,6486,253 Total other21,03117,720 TOTAL OPERATING REVENUES1,572,8541,331,961 OPERATING EXPENSES: Stormwater drainage: Personnel231,224224,095 Operations576,127536,607 Total stormwater drainage807,351760,702 Depreciation279,760188,672 TOTAL OPERATING EXPENSES 1,087,111949,374 NET OPERATING INCOME485,743382,587 NONOPERATING REVENUES (EXPENSES): Investment earnings14,31914,937 Interest and fiscal charges(129,108)(37,502) Total nonoperating revenue (expenses) (114,789)(22,565) INCOME BEFORE CONTRIBUTIONS AND TRANSFERS370,954360,022 CONTRIBUTIONS AND TRANSFERS: Capital contributions1,785,8713,252,691 Transfers out(119,369)(106,557) Total contributions and transfers1,666,5023,146,134 CHANGE IN NET ASSETS2,037,4563,506,156 NET ASSETS, Beginning of period 5,258,7411,752,585 NET ASSETS, End of period $7,296,197 $5,258,741 Agency Funds Statement of Changes in Assets and Liabilities The Agency Fund is used to account for assets and liabilities held by the City acting as an agent for others. Cafeteria Plan-Flexible Spending - to account for the City’s Internal Revenue Code Section 125 Cafeteria Plan for employees. Public Improvement Districts (PID) - to account for the receipt of the revenue collected from property assessments paid by Cimarron Hills residents to fund the infrastructure of the new development. The City acts as an agent for the collection of the assessments and then sends the revenue to an Escrow Agent for Cimarron Hills. to account for the receipt of the revenue collected from property assessments paid by property owners in the Shell Road Public Improvement District. The City acts as an agent for the creation of the PID and collection of the assessments and then sends the revenue to Williamson County, who provided the initial up-front costs for road construction. Texas Capital Fund Repayments - to account for the lease payments received from businesses who have benefited from the Texas Capital Fund economic development grants and the corresponding payments to the state to repay the grants. Reedholm Instruments, Inc., Xycarb Ceramics, and USA Schunk Quartz, Inc., are the businesses currently in the repayment/lease mode for these grants. CITY OF GEORGETOWN, TEXAS AGENCY FUNDS STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FISCAL YEAR ENDED SEPTEMBER 30, 2005 BALANCE BALANCE OCTOBER 1,SEPTEMBER 30, 2004 ADDITIONSDEDUCTIONS 2005 Cafeteria Plan-Flex Spending: ASSETS: Cash and cash equivalents$8,971$140,731$138,189$11,513 TOTAL ASSETS $8,971$140,731$138,189$11,513 LIABILITIES: Accounts payable$8,971$140,731$138,189$11,513 TOTAL LIABILITIES $8,971 $140,731 $138,189 $11,513 Public Improvement Districts: ASSETS: Cash and cash equivalents$38,905$281,576$306,208$14,273 Accounts receivable532,3573,595154,235381,717 TOTAL ASSETS $571,262$285,171$460,443$395,990 LIABILITIES: Accounts payable$41,625$285,171$308,928$17,868 Due to other governments529,637151,515378,122 TOTAL LIABILITIES $571,262$285,171$460,443$395,990 Texas Capital Fund Repayments: ASSETS: Accounts receivable$911,696$$69,590$842,106 TOTAL ASSETS $911,696$$69,590$842,106 LIABILITIES: Due to other governments$911,696$$69,590$842,106 TOTAL LIABILITIES $911,696$$69,590$842,106 TOTAL AGENCY FUNDS ASSETS: Cash and cash equivalents$47,876$422,307$444,397$25,786 Accounts receivable1,444,0533,595223,8251,223,823 TOTAL ASSETS $1,491,929$425,902$668,222$1,249,609 LIABILITIES: Accounts payable$50,596$425,902$447,117$29,381 Due to other governments1,441,333221,1051,220,228 TOTAL LIABILITIES $1,491,929$425,902$668,222$1,249,609 Capital Assets Used in the Operation of Governmental Funds CITY OF GEORGETOWN, TEXAS CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS COMPARATIVE SCHEDULES BY SOURCE SEPTEMBER 30, 2005 and 2004 2004 2005(as restated) GOVERNMENTAL FUNDS CAPITAL ASSETS Land $3,828,506$3,078,386 Buildings 20,810,53619,179,428 Improvements 117,433,899102,424,474 Machinery, furniture and equipment 1,871,4271,519,708 Construction in progress 10,221,2123,582,988 TOTAL GOVERNMENTAL FUNDS CAPITAL ASSETS $154,165,580$129,784,984 INVESTMENT IN GOVERNMENTAL FUNDS CAPITAL ASSETS General Fund $6,394,789$6,350,301 Capital Projects Funds: General obligation bonds and certificates of obligation41,415,95832,509,152 State grant 200,000200,000 Other 95,497,64078,770,213 Special Revenue Funds: Federal grant 2,265,5062,225,943 Other 2,211,2982,211,298 State grant 2,351,9753,689,663 Transfer from proprietary fund 1,851,9751,851,975 Acquisitions prior to August 31, 1985 - source undetermined 1,976,4391,976,439 TOTAL INVESTMENT IN GOVERNMENTAL FUNDS CAPITAL ASSETS $154,165,580$129,784,984 CITY OF GEORGETOWN, TEXAS CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY SEPTEMBER 30, 2005 LANDBUILDINGSIMPROVEMENTSEQUIPMENT CONSTRUCTION IN PROGRESS TOTAL FUNCTION AND ACTIVITY Culture-recreation Library$1,292,711 $61,340 $275,549 $1,629,600 Parks administration639,193 1,779,127 14,583 2,432,903 Parks maintenance$743,579 5,985 2,339,965 214,014 3,303,543 Recreation 36,560 25,425 61,985 Total culture-recreation 743,579 1,937,889 4,216,992 529,571 7,428,031 Development Planning administration 21,995 65,280 87,275 Current planning 25,000 25,000 Long range planning 9,212 9,212 Inspections 29,206 29,206 Total development 21,995 128,698 150,693 Economic development Administration 25,000 5,489 30,489 Total economic development 25,000 5,489 30,489 Fire Administation 13,615 14,890 28,505 Operations367,101 142,724 241,408 751,233 Total fire 367,101 156,339 256,298 779,738 General Government City council593,084 784,722 146,832 107,998 1,632,636 City manager's office296,852 15,592 23,621 336,065 Facilities223,810 9,677,592 518,926 19,304 10,439,632 General government479,964 7,190,181 3,585,185 219,023 11,474,353 Total general government 1,593,710 17,652,495 4,266,535 369,946 23,882,686 Highways and streets Bridges 6,539,783 6,539,783 Streets 99,548,299 99,548,299 Streets capital improvements1,491,217 2,186,875 373,082 4,051,174 Total highways and streets 1,491,217 108,274,957 373,082 110,139,256 Police Administration65,521 466,831 44,330 576,682 Support services bureau 38,840 38,840 Field operations bureau 46,035 46,035 Animal services787,530 5,250 70,804 863,584 Municipal court 8,334 8,334 Total police 853,051 472,081 208,343 1,533,475 TOTAL CAPITAL ASSETS 3,828,506 20,810,536 117,433,899 1,871,427 143,944,368 CONSTRUCTION IN PROGRESS $10,221,212 10,221,212 10,221,212 10,221,212 TOTAL GOVERNMENTAL FUNDS CAPITAL ASSETS $3,828,506 $20,810,536 $117,433,899 $1,871,427 $10,221,212 $154,165,580 This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets related to internal service funds are excluded from the above amounts. CITY OF GEORGETOWN, TEXAS CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY FISCAL YEAR ENDED SEPTEMBER 30, 2005 BALANCE 10/1/2004 (as restated) ADDITIONS DELETIONS BALANCE 9/30/2005 FUNCTION AND ACTIVITY Culture-recreation Library$1,629,600 $1,629,600 Parks administration2,420,053 $12,850 2,432,903 Parks maintenance2,348,141 955,402 3,303,543 Recreation53,795 8,190 61,985 Total culture-recreation 6,451,589 976,442 7,428,031 Development Planning administration87,275 87,275 Current planning25,000 25,000 Long range planning9,212 9,212 Inspections29,206 29,206 Total development 150,693 150,693 Economic development Administration30,489 30,489 Total economic development 30,489 30,489 Fire Administation14,890 13,615 28,505 Operations694,700 56,533 751,233 Total fire 709,590 70,148 779,738 General Government City council1,640,636 $(8,000) 1,632,636 City manager's office336,065 336,065 Facilities10,735,903 128,779 (425,050) 10,439,632 General government9,260,934 2,213,419 11,474,353 Total general government 21,973,538 2,342,198 (433,050) 23,882,686 Highways and streets Bridges4,277,690 2,262,093 6,539,783 Streets88,780,600 10,767,699 99,548,299 Streets capital improvements3,119,163 932,011 4,051,174 Total highways and streets 96,177,453 13,961,803 - 110,139,256 Police Administration576,682 576,682 Support services bureau38,840 38,840 Field operations bureau46,035 46,035 Animal services38,753 824,831 863,584 Municipal court8,334 8,334 Total police 708,644 824,831 - 1,533,475 TOTAL CAPITAL ASSETS 126,201,996 18,175,422 (433,050) 143,944,368 CONSTRUCTION IN PROGRESS 3,582,988 8,739,651 (2,101,427) 10,221,212 3,582,988 8,739,651 (2,101,427) 10,221,212 TOTAL GOVERNMENTAL FUNDS CAPITAL ASSETS $129,784,984 $26,915,073 $(2,534,477) $154,165,580 This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets related to internal service funds are excluded from the above amounts. S T A T I S T I C A L S E C T I O N CITY OF GEORGETOWN, TEXAS GOVERNMENT-WIDE EXPENSES BY FUNCTION LAST TEN FISCAL YEARS FISCAL CULTURE-GENERAL INTEREST ONYEARRECREATIONDEVELOPMENTFIREGOVERNMENTLONG TERM DEBT 2003$4,165,382$1,607,886$3,611,523$3,715,369$1,241,202 20044,773,0591,956,2433,862,1684,005,0791,253,934 20054,701,5522,061,0173,767,8164,405,4362,256,135 Source: Current year government-wide financials Note: City of Georgetown first applied GASB Statement No. 34 in fiscal year 2003; therefore, government-wide financial information for years prior to fiscal year 2003 is not available. GOVERNMENT-WIDE REVENUES LAST TEN FISCAL YEARS FISCAL CHARGES FOR OPERATING GRANTS CAPITAL GRANTSYEARSERVICES& CONTRIBUTIONS & CONTRIBUTIONS 2003$49,548,649$228,828$3,770,954 200454,265,972176,16912,161,173 200562,682,992900,68120,139,958 Source: Current year government-wide financials Note: City of Georgetown first applied GASB Statement No. 34 in fiscal year 2003; therefore, government-wide financial information for years prior to fiscal year 2003 is not available. PROGRAM REVENUES STORM-T POLICESTREETSAIRPORT ELECTRICSANITATION WATER WATER TOTAL $5,476,245$3,267,717$1,773,928$23,957,507$2,577,159$841,591$11,727,956$63,963,465 5,833,6442,752,2251,962,82626,237,0732,740,495986,87613,218,34969,581,971 5,961,7311,522,1612,606,27029,026,4752,868,7581,216,21914,234,86674,628,436 EXTRA-FRANCHISE INTEREST ONORDINARYTAXESTAXESINVESTMENTSITEMOTHER TOTAL $13,032,245$1,579,729$356,967$13,623,784$3,429,743$85,570,899 14,909,0161,844,683616,1181,349,525$85,322,656 17,574,8561,942,2461,239,4993,176,455$107,656,687 GENERAL REVENUES CITY OF GEORGETOWN, TEXAS GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION LAST TEN FISCAL YEARS GENERAL ECO-FINANCEPLANNINGGEORGETOWN FISCAL GOVERN-NOMICAND ANDUTILITY COMMUNITY PARKS & YEAR MENTDEVEL.ADMIN.DEVEL.SYSTEMS/STREETSSERVICESRECREATION 1996$1,562,102$517,795$788,069$620,105$234,581$940,668 19971,723,910793,6991,034,875844,465526,9011,341,113 19982,145,945924,6551,301,416923,664657,4172,284,301 19991,943,998135,221(1)1,276,021971,154669,8692,587,431 20002,070,926156,1281,284,0171,032,006678,4842,989,751 20012,182,504(2)$329,712163,3291,253,3381,193,9791,358,9422,520,044 20023,466,322396,595217,4371,666,4891,885,222(3)2,611,676 20032,381,789(4)(4)1,565,6121,587,1543,904,361(4) 20042,739,9411,914,2231,931,7824,509,436 20052,843,5241,952,4741,741,2175,197,709 Expenditures presented include the General, Special Revenue, Debt Service and Capital Projects funds. (1) Beginning in 1999, administrative departments were transferred to the Joint Services Internal Service Fund, thereby reducing both the expense and the interfund charges for service. (2) Beginning in 2000, the Economic Development function was added. (3) Beginning in 2001, the Community Services division was eliminated and the functions were consolidated into General government. (4) Beginning in 2003, departments were reorganized to reflect functions for GASB 34. The following changes occurred. Animal Services and Municipal Court are moved to Police and the Library is moved to Parks and Recreation. CAPITAL INTERFUND INFOR-OUTLAY CHARGES FIREPOLICEMATIONDEBT ANDFOR SERVICESSERVICESRESOURCESSERVICEOTHERSERVICESTOTAL $1,481,988$2,218,453$630,086$981,750$2,779,312$(950,958)$11,803,951 1,757,4292,798,512881,4271,086,1447,450,727(1,423,881)18,815,321 1,815,6293,085,20110,0001,292,6135,916,050(1,786,848)18,570,043 2,415,3713,626,2582,4651,676,4384,902,985(734,213)(1)19,472,998 2,513,8323,867,00110,0001,709,8024,248,563(821,512)19,738,998 3,104,7144,081,7942,375,7525,726,880(739,719)23,551,269 3,400,2394,351,8022,204,7973,325,393(843,739)22,682,233 3,507,2435,359,643(4)2,400,8619,749,963(762,433)29,694,193 3,832,3205,585,0022,516,7166,570,321(833,962)28,765,779 3,675,0335,798,4324,398,55011,916,076(856,478)36,666,537 CITY OF GEORGETOWN, TEXAS GENERAL GOVERNMENTAL REVENUES BY SOURCE LAST TEN FISCAL YEARS SALES AND LICENSES FISCAL AD VALOREMOTHER ANDINTER- YEAR TAXESTAXESPERMITSGOVERNMENTAL 1996$2,008,801$3,051,092$809,909$522,935 19972,494,6493,254,884567,9361,211,758 19983,491,3013,678,293512,8181,194,178 19994,224,0474,189,934530,8961,471,358 20004,797,7645,143,020662,344942,251 20015,186,9335,337,327731,600171,240 20025,991,0687,092,195827,395214,356 20036,596,2468,057,144866,451228,827 20047,217,4429,642,4301,078,048286,246 20058,408,15010,869,5091,266,295798,822 (1) Recreation fees were recorded in interest and other prior to 2002. CHARGESINTEREST FORFINES AND AND SERVICESFORFEITURESOTHERTOTAL $101,933$116,027$2,015,089$8,625,786 105,104162,6075,181,380 12,978,318 110,415219,7913,054,803 12,261,599 116,541239,5111,573,773 12,346,060 121,931319,8862,104,681 14,091,877 130,031417,1922,012,136 13,986,459 817,255(1)419,2971,274,227 16,635,793 946,450533,7033,737,716 20,966,537 919,219684,9991,018,457 20,846,841 955,940773,8822,730,356 25,802,954 CITY OF GEORGETOWN, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS CURRENT PERCENT DELINQUENT FISCAL TOTALTAX OF LEVY TAX YEAR TAX LEVY COLLECTIONSCOLLECTED COLLECTIONS 1996$1,985,203$1,938,93897.67%$43,769 19972,466,5602,422,65098.22%49,326 19983,442,3283,394,19298.60%64,205 19994,195,9034,145,35198.80%48,279 20004,952,6884,726,48995.43%56,614 20015,357,8515,115,25595.47%64,518 20026,201,997 5,979,605 96.41%22,186 20036,912,129 6,598,745 95.47%46,401 20047,525,174 7,215,477 95.88%30,046 20058,694,027 8,274,192 95.17%161,088 Source: City of Georgetown Tax Assessor. TOTAL OUTSTANDING COLLECTIONSDELINQUENT AS A PERCENT OUTSTANDINGTAXES AS A TOTAL TAX OF CURRENTDELINQUENTPERCENT OF COLLECTIONSLEVYTAXESCURRENT LEVY $1,982,707 99.87%$195,046 9.82% 2,471,976 100.22%181,820 7.37% 3,458,397 100.47%163,595 4.75% 4,193,630 99.95%161,326 3.84% 4,783,103 96.58%169,585 3.42% 5,179,773 96.68%178,078 3.32% 6,001,791 96.77%200,206 3.23% 6,645,146 96.14%266,983 3.86% 7,245,523 96.28%279,652 3.72% 8,435,280 97.02%258,746 2.98% CITY OF GEORGETOWN, TEXAS ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS REAL PROPERTY PERSONAL PROPERTY ESTIMATEDESTIMATED FISCALASSESSED ACTUAL ASSESSEDACTUAL YEAR VALUE(1)VALUE VALUE(1)VALUE 1996$467,611,075$467,611,075$71,336,431$71,336,431 1997558,828,511558,828,51174,640,53974,640,539 1998900,336,306900,336,30683,786,89383,786,893 19991,103,282,6621,103,282,66296,548,57096,548,570 20001,278,247,0741,278,247,074131,824,968131,824,968 20011,450,396,2271,450,396,227178,948,682178,948,682 20021,660,732,5071,660,732,507178,037,876178,037,876 20031,915,334,7941,915,334,794200,707,337200,707,337 20041,935,628,3001,935,628,300196,487,678196,487,678 20052,094,066,9742,094,066,974166,921,359166,921,359 Source: City of Georgetown Tax Assessor. (1) Net of exemptions. TOTALRATIO OF TOTAL ESTIMATED ASSESSED VALUE ASSESSED ACTUAL TO TOTAL ESTIMATED VALUE(1)VALUE ACTUAL VALUE $538,947,506 $538,947,506 100.00% 633,469,050633,469,050 100.00% 984,123,199984,123,199 100.00% 1,199,831,2321,199,831,232 100.00% 1,410,072,0421,410,072,042 100.00% 1,629,344,9091,629,344,909 100.00% 1,838,770,3831,838,770,383 100.00% 2,116,042,1312,116,042,131 100.00% 2,132,115,9782,132,115,978 100.00% 2,260,988,3332,260,988,333 100.00% CITY OF GEORGETOWN, TEXAS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS (PER $100 OF ASSESSED VALUE) LAST TEN FISCAL YEARS CITY OF GEORGETOWN DEBT GEORGETOWN FISCALGENERALSERVICETOTAL INDEPENDENTWILLIAMSON YEAR FUNDFUNDCITY SCHOOL DISTRICT COUNTY TOTAL 19960.20%0.17%0.37%1.44%0.32%2.13 19970.210.170.381.440.32 2.14 19980.200.150.351.620.35 2.32 19990.210.140.351.750.35 2.45 20000.210.130.341.630.35 2.32 20010.200.110.311.740.40 2.45 20020.200.110.311.690.40 2.40 20030.200.100.301.730.46 2.49 20040.220.100.321.770.48 2.57 20050.230.110.341.760.51 2.61 Source: Information furnished by respective tax assessors. CITY OF GEORGETOWN, TEXAS PRINCIPAL TAXPAYERS SEPTEMBER 30, 2005 PERCENTAGE OF TOTAL ASSESSEDASSESSED TAXPAYERTYPE OF BUSINESSVALUEVALUE(1) Del Webb Texas LTDDevelopment$16,709,0920.74% Wal-Mart Real EstateDevelopment15,683,1080.69% JP Morgan Chase BankBank15,156,8640.67% Verizon SouthwestUtility13,458,9300.60% Watersedge - Georgetown LTDDevelopment10,562,1590.47% HE Butt GroceryGrocer 10,428,9310.46% Rivery Partners, LTDDevelopment10,063,9530.45% Watersedge - Georgetown II LTDDevelopment9,919,4820.44% Republic Square LTDDevelopment8,867,1500.39% HD Development Properties LPDevelopment8,761,9200.39% Total$119,611,5895.29% (1) The total assessed valuation for the fiscal year ended September 30, 2005 was certified at $2,260,988,333 Sources: City Tax Assessor/Collector. * Per certified roll. Does not include some major property owners whose property is under protest as of date of certification. CITY OF GEORGETOWN, TEXAS COMPUTATION OF LEGAL DEBT MARGIN SEPTEMBER 30, 2005 ASSESSED VALUATION $2,260,988,333 Allowable tax levy for annual debt service purpose: $1.25 per $100 of assessed valuation, assuming 90% collection rate25,436,119 2005 annual debt service requirements for general obligation debt: Principal$2,765,249 Interest and fiscal charges1,880,3054,645,554 Legal margin for annual debt service requirements$20,790,565 NOTE: All taxable property within the City is subject to the assessment, levy and collection by the City of a continuing, direct annual ad valorem tax sufficient to provide for the payment of principal and interest on the Bonds within the limits prescribed by law. Article XI, Section 5, of the Texas Constitution is applicable to the City, and limits the maximum ad valorem tax rate to $2.50 per $100 assessed valuation (for all City purposes). The Charter of the City adopts the provisions of the constitution without further limitation. Under rules promulgated by the Office of the Attorney General of Texas, such office will not approve tax bonds of the City unless the City can demonstrate its ability to pay debt service requirements on all outstanding City tax bonds, including the issue to be approved, from a tax levy of $1.25 per $100 of valuation, based on 90% collection of tax. The legal margin computation includes the general obligation debt that will be repaid by self-supporting sources such as the Airport, Stormwater Drainage and Georgetown Transportation Enhancement Corporation (GTEC) funds. CITY OF GEORGETOWN, TEXAS RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO ASSESSED VALUE AND NET GENERAL OBLIGATION BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS GROSSLESS SELFTOTAL TAX FISCALASSESSEDBONDEDSUPPORTINGSUPPORTED YEAR POPULATION VALUE (1)DEBT (2)DEBT (3)DEBT 199620,300$538,947,506$6,805,000$1,123,455$5,681,545 199724,000633,469,05011,330,0001,081,30010,248,700 199825,500984,123,19915,810,0003,441,66912,368,331 199926,4001,199,831,23221,545,0005,166,12216,378,878 200028,3281,410,072,04222,005,0005,056,90816,948,092 200130,0001,629,344,90926,110,0004,939,38521,170,615 200234,2731,838,770,38324,800,0004,734,37420,065,626 200335,3002,116,042,13126,731,4864,514,03122,217,455 200436,3592,132,115,97837,456,2374,261,56433,194,673 200538,2652,260,988,33348,815,9884,509,38544,306,603 Sources: City of Georgetown Planning and Development Division and the Georgetown Chamber of Commerce. (1) Net of exemptions. (2) Includes all long-term general obligation debt. (3) Includes general obligation debt repaid from other sources (Airport and Stormwater Drainage funds). (4) Less debt service funds available. RATIO OF NETRATIO OF GROSS LESS DEBTNETBONDED DEBTBONDED DEBTNET BONDEDTOTAL BONDED SERVICE FUNDSBONDEDTO ASSESSEDTO ASSESSEDDEBT PERDEBT PER AVAILABLE DEBT VALUE (4)VALUE (4)CAPITA (4)CAPITA (4) $236,930$5,444,615 1.01%1.22%$268.21 $323.55 353,9139,894,787 1.56%1.73%412.28 457.34 522,84611,845,485 1.20%1.55%464.53 599.50 625,91315,752,965 1.31%1.74%596.70 792.39 868,58416,079,508 1.14%1.50%567.62 746.13 628,28820,542,327 1.26%1.56%684.74 849.39 657,75719,407,869 1.06%1.31%566.27 704.41 663,64421,553,811 1.02%1.23%610.59 738.47 768,43632,426,237 1.52%1.72%891.84 1,009.04 508,15143,798,452 1.94%2.14%1,144.61 1,262.45 CITY OF GEORGETOWN, TEXAS RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL OBLIGATION BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES LAST TEN FISCAL YEARS TOTALLESS DEBT INTERESTTOTALSERVICE FISCALTOTAL AND FISCAL DEBTSELF SUPPORTED YEAR PRINCIPALCHARGESSERVICEG O DEBT (1) 1996$575,000$485,052$1,060,052$102,736 1997660,000508,0271,168,027104,973 1998740,000656,2811,396,281104,122 19991,015,001883,7551,898,756222,317 2000989,7491,085,0182,074,767364,965 20011,365,0011,229,2842,594,285368,533 20021,310,0001,344,8632,654,863450,066 20031,380,0011,359,0582,739,059553,294 20041,515,2491,433,9532,949,202539,679 20052,765,2491,880,3054,645,5542,816,611 (1) Includes principal, interest and fiscal charges for self supporting general obligation debt of the Airport, Stormwater Drainage, and Georgetown Transportation Enhancement Corporation. (2) Includes General, Special Revenue, Debt Service, and Capital Projects Funds. RATIO OF TOTAL RATIO OF NET NETTOTALDEBT SERVICE TODEBT SERVICE TO DEBTGENERALTOTAL GENERAL TOTAL GENERAL SERVICEEXPENDITURES (2)EXPENDITURESEXPENDITURES $957,316$11,803,951 8.98%8.11% 1,063,05418,815,321 6.21%5.65% 1,292,15918,570,043 7.52%6.96% 1,676,43919,472,998 9.75%8.61% 1,709,80219,738,998 10.51%8.66% 2,225,75223,551,269 11.02%9.45% 2,204,79722,682,233 11.70%9.72% 2,185,76529,694,193 9.22%7.36% 2,409,52328,493,859 10.35%8.46% 1,828,94336,666,537 12.67%4.99% CITY OF GEORGETOWN, TEXAS COMPUTATION OF DIRECT AND ESTIMATED OVERLAPPING BONDED DEBT SEPTEMBER 30, 2005 DEBTCITY'S SHARE (2) PER TAXING BODY AMOUNT AS OFPERCENT AMOUNTCAPITA (1) ESTIMATED OVERLAPPING DEBT: Georgetown I.S.D.$65,219,9776-30-0573.46%$47,910,595$1,252 Williamson County426,350,0009-30-0512.04% 51,332,5401,342 Total estimated overlapping debt491,569,97720.19% 99,243,1352,594 DIRECT DEBT - City of Georgetown44,306,6039-30-05100.00% 44,306,6031,158 DIRECT AND ESTIMATED OVERLAPPING DEBT$535,876,580$143,549,738$3,751 Source: Jurisdiction listed. (1) GISD population - 52,090 Williamson County population - 317,938 City of Georgetown population - 38,265 (2) Information represents the share of the respective debt which are obligations of the citizens of the City of Georgetown CITY OF GEORGETOWN, TEXAS REVENUE BOND COVERAGE UTILITY FUNDS (1) LAST TEN FISCAL YEARS OPERATING EXPENSESNET REVENUE FISCALELIGIBLEINTEREST(EXCLUDINGAVAILABLE FOR YEAR REVENUESEARNINGSDEPRECIATION)DEBT SERVICE 1996$26,305,298$649,084$14,949,418$12,004,964 199726,261,446585,65016,141,63810,705,458 199829,682,527754,17818,413,51212,023,193 199931,107,463879,40619,205,97612,780,893 200036,216,903995,27221,872,92015,339,255 200140,844,1331,202,41825,762,11016,284,441 200241,550,381610,79126,227,23215,933,940 200346,041,368155,95130,122,87816,074,441 200447,346,431423,98733,420,22614,350,192 200554,144,359705,11836,669,65018,179,827 (1) Electric, Water and Wastewater only. DEBT SERVICE REQUIREMENTS INTEREST ANDTIMES PRINCIPAL FISCAL CHARGES TOTALCOVERAGE $935,000$1,374,495$2,309,495 5.20 1,285,0001,357,1042,642,104 4.05 1,215,1791,215,179 9.89 145,0001,471,3411,616,341 7.91 1,080,0001,393,9042,473,904 6.20 1,915,0001,809,4363,724,436 4.37 2,070,0001,640,6743,710,674 4.29 2,145,0001,668,8193,813,819 4.21 2,534,7511,920,8864,455,637 3.22 2,864,7511,875,4514,740,202 3.84 CITY OF GEORGETOWN, TEXAS UTILITY CUSTOMER COUNTS LAST TEN YEARS FISCAL YEARELECTRICWATERWASTEWATERSTORMWATERSANITATION 19969,6789,1927,0847,0987,397 199710,81110,1738,1008,5948,855 199811,718 11,0358,8879,3929,619 199912,41311,5739,5199,94510,350 200013,48212,65210,45010,79711,101 200114,269 13,518 11,33811,53211,980 200215,15314,19811,97212,12012,641 200315,81214,87812,66912,66113,430 200416,35615,63013,35413,35713,987 200517,40316,65614,48014,34615,076 CITY OF GEORGETOWN, TEXAS WATER UTILITY STATISTICAL DATA WATER USAGE (Gallons) Avg DayPeak DayTotal Fiscal UsageUsageUsage Year(000's)(000's)(000's) 19964,46610,4921,630,257 19975,13012,0931,877,073 19986,39713,4792,335,035 19996,26613,1172,287,137 20007,42515,8002,710,006 20017,52516,7002,774,100 20028,29616,4003,019,800 20037,46418,3002,724,275 20047,97016,1002,909,050 200510,09020,5313,683,017 TEN LARGEST WATER CUSTOMERS (Gallons) (12 Mos ending 09-30-05) (000 Gal) CustomerConsumed% Total Sun City215,0397.78% Chisholm Trail SUD184,0536.66% Southwestern University72,7482.63% City of Georgetown36,0111.30% Georgetown ISD31,3111.13% Rivery Towne Crossing30,9421.12% Georgetown Country Club19,2090.69% Indian Creek Apartments15,3090.55% Housing Authority14,1100.51% The Oaks at Georgetown13,7930.50% MONTHLY WATER RATES (effective 10/01/03) Customer Customer Charge per Month: Meter SizeInside CityOutside City 3/4 inch$16.50$21.80 1 inch23.0027.00 1 1/2 inch29.5035.00 2 inch48.0056.00 3 inch181.50211.50 4 inch231.00269.50 6 inch346.50404.50 8 inch462.00539.00 Cost per thousand$2.25$2.60 CONSERVATION WATER RATES (effective 06/01/02) Residential Only Effective on Billings June 1 - October 31 Inside CityOutside City Per 1,000 Gallons Per 1,000 Gallons 0 Thru 19,000 Gallons $ 2.25$2.60 20,000 Thru 29,000 Gallons3.003.35 30,000 Thru 39,000 Gallons4.504.85 40,000 and up6.006.35 Information provided to comply with continuing disclosure requirements of SEC Rule 15c2-12 CITY OF GEORGETOWN, TEXAS WASTEWATER UTILITY STATISTICAL DATA DAILY FLOW (Wastewater Treatment) Average Daily Wastewater Flow Fiscal YearGallons 19961,812,000 19972,557,000 19982,709,000 19992,688,000 20002,840,000 20013,122,000 20022,631,000 20032,890,000 20043,070,000 20053,020,000 TEN LARGEST WASTEWATER CUSTOMERS (12 Mos ending 09-30-05) CustomerVolume% Total Southwestern University35,6883.10% Georgetown ISD23,2152.02% Indian Creek Apartments15,1881.32% Georgetown Housing Authority14,1181.23% Georgetown Hospital13,8611.20% Wesleyan Homes12,4001.08% Georgetown Place Apartments12,3251.07% The Oaks at Georgetown11,2400.98% Georgetown Park Apartments9,5200.83% San Gabriel Apartments9,4510.82% MONTHLY SEWER RATES (effective on billings after 11/15/04) Customer Charge $11.75 per month Cost per 1,000 gallons $3.25 Residential rates (Based on average winter water use) Non-Residential (Based on monthly use) Information provided to comply with continuing disclosure requirements of SEC Rule 15c2-12 CITY OF GEORGETOWN, TEXAS ELECTRIC UTILITY STATISTICAL DATA MONTHLY ELECTRIC RATES (effective on billings after 11/15/04) All Customers: Power Cost AdjustmentVariable Residential Sales TaxInside City Limits: 2.0% of total electric charges Outside City Limits: None Commercial Sales TaxInside City Limits:8.25% of total electric charges Outside City Limits:6.25% of total electric charges Residential Service: Customer Charge$6.00 per month Energy Charge Small General Service: Customer Charge$12.00 per month Energy Charge$0.0865 per kWh School Charge: Customer Charge$12.00 per month Energy Charge$0.0976 per kWh Municipal Water & Wastewater Pumping Service: Customer Charge$12.00 per month Energy Charge$0.0776 per kWh Large General Service: Customer Charge$20.00 per month Demand Charge$7.30 per kW, but not less than $365.00 Energy Charge$0.0574 per kWh Minimum Bill$385.00 Industrial Customer Charge$50.00 per month Demand Charge$6.15 per kW, but not less than $3,075.00 Energy Charge$0.0570 per kWh Minimum Bill$3,125.00 Large Industrial Service Customer Charge$100.00 per month Demand Charge$5.20 per kW, but not less than $10,400.00 Energy Charge$0.0560 per kWh Minimum Bill$10,500.00 Large Institutional Service Customer Charge$20.00 per month Energy Charge$0.0795 per kWh Minimum Bill$20.00 Municipal Service Customer Charge$12.00 per month Energy Charge$0.0790 per kWh Minimum Bill$12.00 MONTHLY GUARD LIGHT SERVICE RATES (effective on billings after 11/15/05) Guard Light Service:Retail street lighting service Security lighting service 100 Watt HPL per light ( 35 kWh) $4.50 per month $7.50 per month 200 Watt HPLper light ( 71 kWh) $8.30 per month$12.75 per month 250 Watt HPLper light ( 86 kWh) $9.85 per month$14.50 per month 400 Watt HPLper light (137 kWh)$15.35 per month$20.20 per month Information provided to comply with continuing disclosure requirements of SEC Rule 15c2-12 TEN LARGEST ELECTRIC CUSTOMERS (12 Mos ending 09-30-05) Due to electric deregulation and the confidentiality of the electric system, the ten largest electric customers are not being presented. $0.0889 per kWh CITY OF GEORGETOWN, TEXAS DEMOGRAPHIC STATISTICS LAST TEN CALENDAR YEARS CALENDAR SCHOOLUNEMPLOYMENT YEAR POPULATIONENROLLMENTRATE 199620,3006,6502.50% 199724,0006,9202.70% 199825,5007,2002.50% 199926,4007,5512.33% 200028,6007,9001.88% 200130,0008,3002.96% 200234,2738,4575.90% 200335,3008,6006.02% 200436,3598,8204.76% 200538,2658,9024.20% Sources: Population:2005 information obtained from the City of Georgetown Planning and Development Division. School Enrollment:Georgetown Independent School District. Year shown is school year, not calendar year. Unemployment Rate:Texas Workforce Commission, Labor Market Information Department. All figures are an annual average. 2005 is average of the preliminary monthly estimates. CITY OF GEORGETOWN, TEXAS PROPERTY VALUE AND CONSTRUCTION PERMITS LAST TEN FISCAL YEARS COMMERCIAL RESIDENTIAL CONSTRUCTION CONSTRUCTION FISCALPROPERTYNUMBERNUMBER YEARVALUE(1)OF UNITSVALUEOF UNITSVALUE 1996$538,947,50626 $18,864,855 1,243 $174,263,170 1997633,469,05040 27,766,100 881 118,305,068 1998984,123,19935 50,835,410 730 93,486,217 19991,199,831,23241 29,100,000 675 93,647,489 20001,410,072,04243 15,663,210 757 105,212,405 20011,629,344,90923 17,126,030 984 165,352,383 20021,838,770,38331 38,210,061 687 128,834,005 20032,116,042,13132 13,669,958 603 79,667,625 20042,132,115,97865 40,034,747 963 177,932,230 20052,260,988,333142 54,656,434 1086 208,886,431 Sources: City of Georgetown Inspection Services Department (amounts listed include activity in the E.T.J.) (1) Estimated actual value. CITY OF GEORGETOWN, TEXAS UTILITY SYSTEM CONDENSED STATEMENT OF OPERATIONS (2) 20052004200320022001 Revenues: Water System$16,605,408$15,082,426$14,648,293$13,635,949$12,789,401 Electric System33,800,76129,199,61825,916,55723,412,20224,340,991 Miscellaneous3,738,1901,371,1993,285,6572,647,8852,217,825 Interest Earnings705,118423,987155,951610,7911,202,418 Total revenues54,849,47746,077,23044,006,45840,306,82740,550,635 Expenses: (1) Water System2,947,8752,831,1061,588,6171,504,1621,338,135 Electric System2,721,5072,331,2351,889,9651,850,3451,199,854 Utility Contracts31,000,26828,257,88526,644,29522,872,72523,224,121 Total expenses36,669,65033,420,22630,122,87726,227,23225,762,110 NET AVAILABLE FOR DEBT SERVICE$18,179,827$12,657,004$13,883,581$14,079,595$14,788,525 1) Excludes depreciation costs 2) Electric, Water & Wastewater only Information provided to comply with continuing disclosure requirements of SEC Rule 15c2-12. Average Annual Principal and Interest Requirements, 2006-2023 $2,773,422 Coverage of Average Requirements by Fiscal Year 2005 Net Income 3.60 times Maximum Principal and Interest Requirements, 2006 $4,854,835 Coverage of Maximum Requirements by Fiscal Year 2005 Net Income 6.30 times FOR FISCAL YEAR ENDED SEPTEMBER 30, CITY OF GEORGETOWN, TEXAS CITY'S EQUITY IN UTILITY SYSTEM (1) 20052004200320022001 Utility system (1)$163,596,097$149,400,672$125,750,396$104,850,674$88,470,161 Less: Accumulated depreciation(40,012,018)(35,295,782)(31,675,236)(23,780,397)(21,203,791) Net value of system123,584,079114,104,89094,075,16081,070,27767,266,370 Plus: Construction fund5,521,7374,985,31111,384,5763,970,8523,249,523 Net plant129,105,816119,090,201105,459,73685,041,12970,515,893 Plus: Working capital22,950,79417,695,70213,101,17816,757,98622,060,143 Total152,056,610136,785,903118,560,914101,799,11592,576,036 Revenue bond debt (2)40,064,01238,903,76434,498,51430,005,00032,075,000 CITY'S EQUITY IN SYSTEM$111,992,598$97,882,139$84,062,400$71,794,115$60,501,036 PERCENTAGE CITY'S EQUITY IN SYSTEM73.65%71.56%70.90%70.53%65.35% (1) Electric, Water and Wastewater Funds only (2) Changes in bond ordinances no longer require reservation of interest and sinking or reserve funds for utility revenue debt. Information provided to comply with continuing disclosure requirements of SEC Rule 15c2-12. FOR FISCAL YEAR ENDED SEPTEMBER 30, CITY OF GEORGETOWN, TEXAS MISCELLANEOUS STATISTICS SEPTEMBER 30, 2005 Miscellaneous Statistics Number of square miles in city limits 34.18 Public Safety Police Fire Number of stations14 Number of officers/firefighters6456 (exclusive of volunteer firefighters) EducationCity EmployeesBudgeted Attendance Centers15 Full time395.00 Number of students8,902 Part time23.75 New construction building permits issued Oct. 2004 - Sept. 2005 - 1,062 Total number of utility customers as of September 30, 2005: Electric - 17,403Water - 16,656 Sanitation - 15,076Wastewater - 14,480 InfrastructureRecreation & Culture Miles of streets422 Number of parks23 Number of street lights2,589 Acres of parks380 Miles of water mains365 Miles of sanitary sewers290 Miles of storm sewers41 Number of libraries 1 public Miles of electric distribution lines287 Number of volumes85,312 Annual electric sales - mWh376,917 Library circulation350,716 Peak demand - mW105 Library visits262,565 CITY OF GEORGETOWN, TEXAS SUMMARY OF INSURANCE COVERAGE SEPTEMBER 30, 2005 POLICY TYPE INSURER AGENT POLICY NUMBER Airport LiabilityTexas Municipal Texas Municipal2903 LeagueLeague Automobile LiabilityTexas Municipal Texas Municipal2903 LeagueLeague Automobile Physical DamageTexas Municipal Texas Municipal2903 LeagueLeague Boiler & MachineryTexas Municipal Texas Municipal2903 LeagueLeague General Liability Texas Municipal Texas Municipal2903 LeagueLeague Law Enforcement LiabilityTexas Municipal Texas Municipal2903 LeagueLeague Mobile EquipmentTexas Municipal Texas Municipal2903 LeagueLeague Public Employee DishonestyTexas Municipal Texas Municipal2903 BondLeagueLeague Public Officials Texas Municipal Texas Municipal2903 LeagueLeague Real/Personal PropertyTexas Municipal Texas Municipal2903 LeagueLeague Workers' CompensationTexas Municipal Texas Municipal2903 LeagueLeague Pollution LiabilityAmgripTexas MunicipalBTA2149987-05 League Animal Mortality/TheftTexas Municipal Texas Municipal2903 LeagueLeague Errors and Omissions LiabilityTexas Municipal Texas Municipal2903 LeagueLeague COVERAGE POLICY PERIOD DESCRIPTION LIMIT PREMIUM October 1, 2004 toAirport, Aviation$20,000,000occ$16,821 September 30, 2005Non-owned aircraft, 50,000Fire (Hangarkeepers)Hangar2,000,000Aircraft Liability5,000,000occ October 1, 2004 toDamage caused by5,000,000occ44,334 September 30, 2005 City Vehicles25,000person October 1, 2004 toDamage caused toACV42,349 September 30, 2005 City Vehicles October 1, 2004 toLibrary HVAC 2,000,000accidentincluded September 30, 2005 Direct Damage October 1, 2004 toGeneral Liability10,000,000agg annual71,464 September 30, 20055,000,000occ October 1, 2004 toPolice Department10,000,000annual33,293 September 30, 20055,000,000occ October 1, 2004 toDamage toper schedule9,106 September 30, 2005 Mobile Equipment1,732,287 October 1, 2004 toCrime/Public Employee500,0003,353 September 30, 2005Crime/Theft disappearance Destruction (inside/outside)300,0001,116 October 1, 2004 toMayor, Council, City Attorney10,000,000annualIncluded with Errors & September 30, 2005 Boards, Commissions5,000,000occOmissions Liability and Employees October 1, 2004 toReal / Personal78,159,51399,041 September 30, 2005 Propertyper schedule October 1, 2004 toLosses as Prescribedper TWCC86,472 September 30, 2005 by the Texas Workers'Statuteest. Compensation Law October 1, 2004 toPollution Liability1,000,000ann agg2,099 September 30, 2005 Underground Storage Tanks1,000,000occ(inc fees/taxes) October 1, 2004 toPolice Canine Loss of use/per schedule500 September 30, 2005 Theft mortality/Vet/Surgical1 PD canines October 1, 2004 toErrors and Omissions5,000,000wrongful agg September 30, 2005Includes Public Officials10,000,000annual92,588