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HomeMy WebLinkAboutCAFR 2006 Comprehensive Annual Financial Report For the Year Ended September 30, 2006 City ofCity of Georgetown, TexasGeorgetown, Texas CITY OF GEORGETOWN, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 Prepared by: Division of Finance and Administration Micki Rundell, CGFO – Director Leticia Zavala, CGFO – Controller Lorie Lankford, CGFO – Chief Accountant www.georgetown.org Transmittal Letter Page i January 29, 2007 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, 2006, 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. 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 organization 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, operating and demographic information, generally presented on a multi-year basis. The Reporting Entity. This report includes all the funds of the City, as well as, the City’s discretely presented component unit, the Georgetown Economic Development Corporation (GEDCO), its 4A economic development corporation. 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 also financially accountable for Georgetown Transportation Enhancement Corporation (GTEC), a Texas 4B economic development corporation, which funds transportation projects that enhance economic development within the City. GTEC is presented as a blended component unit within the reporting entity. Management Discussion and Analysis. GAAP requires management to 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 independent auditors’ report located at the front of the financial section of this report. 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 41,294, with an additional 15,000 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. Page ii Transmittal Letter 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 City adopted a Downtown Master Plan in 2003 to provide guidance in managing growth and redevelopment of the area to preserve its historic character and small town “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 4,600 homes with over 6,000 retirees make Sun City and Georgetown their home. Del Webb intends to complete the 7,500 unit development within the next 4 to 5 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 583 employees, the University provides substantial economic and cultural contributions to Georgetown. GEORGETOWN'S ECONOMIC OUTLOOK Community Growth – 2005/06 Review Summary Providing services to a rapidly growing community continues to challenge community leaders. Much headway has been made, as new revenue sources were developed and existing ones expanded. The City’s tax base grew to over $3 billion, while the population topped 41,000. Utility customers have grown to over 22,000, a 6% growth over last year. The City’s electric utility expanded service to the new Premium Outlet Mall and new Scott & White Hospital, both located in the City of Round Rock. Over 100 new jobs were created as Tasus Texas, a major supplier for the new Toyota plant in San Antonio, opened in January 2006. Retail opportunities also increased as Wolf Ranch and the Rivery shopping areas continued their build out. The historic downtown square continues to be a viable business area within the City with several renovation and redevelopment projects underway. Development continues along Williams Drive to serve the over 6,000 residents of Sun City. Residential growth continues with a record 1,300 new building permits issued last year, with over 600 of those being in Sun City. The City annexed over 10,000 acres over the past two years in an attempt to preserve natural areas and ensure quality growth for Georgetown’s gateway areas including along Highway 29 and the new State Highway 130, the new toll road connecting Georgetown to San Antonio, the first phase of which opened in December 2006. Overall, it’s an exciting time to be in Georgetown. Continued Economic Growth While overall economic growth in Texas has been good over the past two years, Georgetown’s growth has been even better. 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 well 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. SH 130 is a new toll road linking Georgetown with Interstate 10, east of San Antonio, thereby bypassing the highly congested Austin area. The final 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 continues to expand its tax base with expanded retail opportunities. Wolf Ranch, a 750,000 sq. ft. retail center that opened in 2005, is home to Target, Best Buy and numerous other national retailers. Revenue from this development continues to increase as build out of the project continues. Full build out is expected by late 2007, once the final road improvements are completed. Transmittal Letter Page iii The Downtown area continues to see revitalization and development. The City continues to implement projects outlined in the Downtown Master Plan. At least four new redevelopment projects are currently underway in the area bringing additional retail, office and residential units to the area. Within the last year, several new businesses have relocated to the area, including Vista solutions, a computer software company that is located over a new downtown sports bar. Several new restaurants have located to the downtown square, including Romeo’s, an Austin based gourmet Italian cafe. All of these additions contribute to making the downtown a vibrant after-hours destination. 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. The City continues preliminary negotiations with LCRA regarding its long term power supply contract, as the current contract expires in 2016. Currently, the City receives 90% of its power needs from the LCRA. The City’s goal is to ensure adequate supplies well into the future, with minimal financial impacts to the rate base. In May 2005, voters adopted the additional ¼ cent sales tax that is allowed through the state statues to be collected by cities, with 1/8 cent of the sales tax designated for the promotion and development of new and expanded business enterprises allowable under Texas Economic Development Corporation 4A and 1/8 cent to be used to reduce property tax rates. Collections of this additional tax began in October 2005. MAJOR INITIATIVES Utility Rates. The City continues to review rate requirements for all utilities annually, as part of the budget process. Rates were not adjusted in 2006. Environmental mandates for water and wastewater continue to be the driving factor in rate analysis. Water and wastewater rates were reviewed by an outside consultant in 2006 to ensure rates were funding the costs of providing services. 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. Wastewater rates are adjusted as needed to fund mandates related to the City’s location over the Edward’s Aquifer Recharge Zone. Electric rates are adjusted through a power cost adjustment, which is used to recover fuel costs greater than those included in the City’s base electric rate. Utility System Expansion. The City contracted for over $18.9 million to expand the utility system in fiscal year 2006. Projects for line expansion in the DB Wood/Booty’s Crossing area were completed. The expansion of the Berry Creek Wastewater Treatment Plant was completed. An irrigation line to expand the City’s use of effluent for irrigation purposes was completed to the Georgetown Country Club. Electric capital improvements were completed to expand the utility system into new residential areas, as well as, various commercial areas, including the Round Rock Outlet Mall and Scott & White hospital located inside the City of Round Rock. Transportation. The 2006 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 completed an interlocal agreement with TxDot to make contributions of 4B sales tax collection to accelerate planned improvements at Williams Drive, as well as, IH 35 at Lakeway. The improvements along State Highway 29, to accommodate traffic requirements for Wolf Ranch were completed in November 2005, and Wolf Ranch Parkway, a connecting road between Wolf Ranch and the Rivery was completed in November 2006. Work continues on the Southeast Arterial One, connecting the City’s Inner Loop to SH 130. This road is expected to be completed in early 2008. Public Safety. Improving public safety response has been a major priority for the last several years. The 2005/06 budget was the second year of a three year plan to bring public safety staffing to acceptable levels, with the addition of another six police officers and five firefighters. In addition, efforts have been made to improve public safety compensation to make Georgetown more competitive with other local governments when hiring new officers. Page iv Transmittal Letter Long Range Planning. Planning for Georgetown’s future is a major priority, as the City began an update of its comprehensive plan. The City has annexed over 10,000 acres and increased its land size by 41%. These annexations were done to ensure quality growth and development along Georgetown’s gateways, including the new SH 130 area. The Williams Drive Gateway study was completed in 2006 for redevelopment of the 85 acre area along IH 35 and Williams Drive. Park Improvements. The City continues to expand its award winning park system through continued development of the City’s trail system along the San Gabriel rivers to Lake Georgetown. The City opened the 5 mile trail between Rivery Park and Lake Georgetown in 2006. Design of the $10 million recreation center expansion approved by the voters in November 2004 began in August 2006. This facility is expected to be completed in early 2008. Renovation of the City’s Community Center, originally built in the 1930’s, was underway, with completion expected in February 2007. Facility Construction. The City continues to implement its long range facility plan. Construction of the new 55,000 sq ft library was completed in December 2006. This new $9.4 million facility, also approved by voters in December 2004, is nearly 4 times the size of the City’s existing library and includes several large rooms for community events. The City also completed repairs to the Grace Church Historical Center and continued construction of a new fire station to relocate the Fire Station 1 from downtown. Completion of the new station is expected in late January 2007. 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 City's receipt of federal and state funding for the year ended September 30, 2006 did not meet the threshold requiring Single Audit testing. 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. Transmittal Letter Page v Cash Management. Cash temporarily idle during the year was invested in demand deposits, US 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. 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. The goal of the independent audit is to provide reasonable assurance that the financial statements of the City for the fiscal year ended September 30, 2006 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 September 30, 2006, 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 fiscal year ended September 30, 2005. The Certificate of Achievement is the highest form of recognition for excellence in state and local government financial reporting. In order to be awarded a Certificate of Achievement, a government 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 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 eighteen 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 Lorie Lankford, Chief Accountant, Joe Lara, Chief Financial Analyst, Lisa Haines, Accountant II, and Danella Elliott, Administrative Analyst, 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. Sincerely, Micki Rundell, CGFO Leticia Zavala, CGFO Director of Finance and Administration Controller vi vii POLICEFINANCE ANDADMINISTRATION FIREGEORGETOWN UTILITY SYSTEMS Assistant City Manager Transportation Services Electric Services Water Services COMMUNITYSERVICES Engineering Municipal Court Accounting Support Services CVBMain StreetTourism Parks Recreation Library Planning & Development Services InspectionServices Airport InformationTechnology A HOME RULE CITY CITY COUNCIL MAYOR (elected at large) SEVEN COUNCIL PERSONS (elected by district) CITIZENS OF GEORGETOWN CITY SECRETARYCITY ATTORNEY MUNICIPALCOURT JUDGE BOARDS &COMMISSIONSCITY MANAGER Utility Billing Economic Development Human Resources COMMUNITYDEVELOPMENT Support Services AdministrativeServices Animal Services Field Operations Administration Operations CITY DIVISIONS viii CITY OF GEORGETOWN, TEXAS ELECTED OFFICIALS AND ADMINISTRATIVE OFFICERS SEPTEMBER 30, 2006 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 Pat Berryman 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 Austin Dallas/Fort Worth San Antonio Lubbock El Paso Amarillo Houston Georgetown 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 two hours north, Houston is two hours southeast and San Antonio is just 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. 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, 2006. 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 $7.9 million, or 37% of the FY2006 General Fund expenditures. The undesignated fund balance increased by $1.6 million from FY2005. Of this amount, $770,000 represented an increase in budgeted contingency reserves. Revenues were $1.6 million more than the original budget estimates. • General Fund revenues increased $2.9 million, an increase of 18% over FY 2005. • General Fund expenditures increased by $3 million, an increase of 17% over FY 2005. This increase was due to increased staffing for the new Library, funding of parks improvements, as well as cost of living salary increases and staffing increases related to public safety. Governmental Activities • On a government-wide basis for governmental activities, the City had expenses net of program revenue of $18.3 million. General revenues and transfers totaled $31 million, resulting in an increase in net assets of $12.7 million. • As of September 30, 2006, the City's governmental activities reported combined ending net asset balances of $147 million. The largest element of this balance, $122.3 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, 2006, the City issued $12.4 million in General Obligation bonds and Certificates of Obligation, of which $1.235 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 $7.8 million in Refunding Bonds to extend the debt repayment schedule to match the life of the corresponding improvements. The City's general obligation debt is rated AA- by Standard & Poor's and Moody's. • The City received over $6 million in roadway contributions in FY 2006. This amount included street improvements in and around the Wolf Ranch retail development, as well as improvements received through the City’s 2006 annexation initiative and County road contributions. CITY OF GEORGETOWN, TEXAS MD&A 4 Business-Type Activities • The net assets of the City's business-type activities increased by $23 million in FY 2006, primarily due to $13.8 million of infrastructure assets contributed by developers for the Pinnacle, Georgetown Village, and other residential sub-divisions. • The City issued $8.7 million of utility system revenue bonds for electric system expansion. The City also issued $3.2 million in Refunding Revenue Bonds to retire outstanding debt issued at a higher interest rate. 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 $300.8 million at September 30, 2006, an increase of 14% over September 30, 2005. Most of this balance is invested in capital assets, restricted for specific purposes, or related to a long-term receivable. • The City received $20.4 million of grants and other capital contributions in FY 2006. 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, which are the difference between the City’s assets and liabilities, are 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: 200620052006200520062005 Current and other assets$38,213$32,591 $47,205$42,608 $85,418$75,199 Capital assets171,394152,255167,570142,655338,964294,910 Total assets$209,607$184,846 $214,775185,263 $424,382370,109 Long-term liabilities$56,354$46,10350,697$45,105107,051$91,208 Other liabilities6,1634,38010,3279,43216,49013,812 Total liabilities$62,517$50,483 $61,024$54,537 $123,541$105,020 Net assets: Invested in capital assets, net of related debt$122,268$107,692 $117,419$98,081 $239,687$205,773 Restricted18,25516,8375,3891,25223,64418,089 Unrestricted6,5679,83430,94331,39337,51041,227 Total net assets$147,090134,363 $153,751$130,726 $300,841$265,089 Summary Statement of Net Assets (In thousands) Govtl ActivitiesBus-Type ActivitiesTotal Primary Government CITY OF GEORGETOWN, TEXAS MD&A 7 Net Assets - Primary Government- 9/30/06 Govtl - Inv in Net Assets 40.642% Govtl - Restricted 6.068% Bus-Type - Rest. 1.791% Govmtl - Unrest. 2.183% Bus-Type - Inv. In Net Assets 39.030% Bus-Type - Unrest. 10.285% The City's combined net assets increased by $35.7 million to $300.8 million from $265.1 million in FY 2005. • Net assets of the governmental funds were $147.1 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 $6.6 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, 2006 was $3.7 million. • Net assets increased primarily as a result of increases in capital assets and construction in progress. Projects completed during the year included: • Williams Drive Pool Rehabilitation • Water Detention Pond at the Municipal Complex • Safety equipment at various facilities • Plan design for the expanded Recreation Center • Construction work for: • Fire Station 1 • New Public Library • 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 widening of Williams Drive. • Road connector between Rivery Park and SH 29. • Net assets invested in capital assets net of related debt increased in part due to developer's contributed capital totaling $20.4 million, including $6.2 million of street improvements and $14.2 million of utility improvements due to annexations and new residential developments. • Net assets of business-type activities increased by $23 million, most of which was due to the recognition of developer contributed capital. CITY OF GEORGETOWN, TEXAS MD&A 8 200620052006200520062005 Revenues: Program Revenues Charges for Service$4,581$3,482$70,604$59,201$75,185$62,683 Operating Grants & Contributions169901169901 Capital Grants & Contributions6,15413,47414,2176,66620,37120,140 General Revenues Property Taxes8,9208,3298,9208,329 Sales Taxes10,9638,49610,9638,496 Other Taxes845749845749 Franchise Taxes2,2091,9422,2091,942 Interest1,3995071,6737323,0721,239 Gain on Sale of Capital Assets85916101,020 Other4621,1693,9399894,4012,158 Total Revenues$35,702$39,908$90,433$67,749$126,135$107,657 Expenses: Culture-recreation5,6494,7025,6494,702 Development2,3262,0612,3262,061 Fire4,3973,7684,3973,768 General government3,6724,4053,6724,405 Interest on long term debt2,0102,2562,0102,256 Police7,3935,9627,3935,962 Streets3,7581,5223,7581,522 Airport 2,7542,6062,7542,606 Electric 37,86729,02737,86729,027 Sanitation3,5192,8693,5192,869 Stormwater1,3701,2161,3701,216 Water Services15,66814,23515,66814,235 Total Expenses$29,205$24,676$61,178$49,953$90,383$74,629 Change in net assets before transfers6,49715,23229,25517,79635,75233,028 Transfers6,2305,220(6,230)(5,220) Change in net assets12,72720,45223,02512,57635,75233,028 Net Assets - Beginning134,363113,911130,726118,150265,089232,061 Net Assets - Ending$147,090$134,363$153,751$130,726$300,841$265,089 (In thousands) Changes in Net Assets Bus-Type ActivitiesGovtl ActivitiesTotal • During 2006, the City invested $11.6 million towards improving and expansion of utility infrastructure, compared to $11.3 in 2005. Projects included: • Electric residential and commercial system expansion • Berry Creek Lift Station • DB Wood/Booty’s Crossing Water Line • Dove Springs Wastewater Plant rehabilitation (expected completion in 2007) • Smith Branch improvements • Edward’s Aquifer Recharge Zone Inflow and Infiltration testing and repairs CITY OF GEORGETOWN, TEXAS MD&A 9 Revenues - Fiscal Year 2006 Charges for Service 60% Grants & Contributions 16% Property Taxes 7% Sales Taxes 9%Other 8% REVENUES ƒ For the fiscal year ended September 30, 2006, program revenues from governmental activities totaled $10.9 million, of which $4.6 million resulted from charges for services. This revenue source increased $1.1 million over the prior year, primarily due to growth in the municipal court and development fee areas. ƒ General property taxes totaled $8.9 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 3.3%, while total assessed valuation increased 9% over the prior year. The variance is attributed to $136 million in new and annexed property. ƒ The ad valorem tax rate for fiscal year 2006 was $0.34626 per $100 of assessed valuation. This is the same tax rate as fiscal year 2005. ƒ Sales taxes, the City’s largest source of general government revenue, totaled $10.96 million for fiscal year 2006, which was an increase of 29% 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 44.2% 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 $844,718. 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 $10.9 million, a decrease of over 39% over the prior year. This is due to a decrease in streets capital contributions. 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. ƒ Business-type activities program revenues totaled $84.8 million, a 29% increase over the prior year. Capital grants and contributions were over $7 million higher than the prior year, due to increased developments and new subdivisions CITY OF GEORGETOWN, TEXAS MD&A 10 added. Charges for services were over $11 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 19%. This increase was primarily related to increased purchased power costs, which were passed along to customers, as well as an increase in customers. Other program revenues include airport fuel sales, hangar rentals and stormwater drainage fees. Primary Government - Functional Expenses for FY 2006 Culture/Rec 6% Public Safety 13% Streets 4% Electric 43% Other 17% Water Services 17% EXPENSES ƒ Expenses for governmental activities totaled $29.2 million, versus $24.7 million in 2005. Major expenditures include salaries for providing services in the public safety area, as well as for public library and recreation programs. Expenses were $4.5 million 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 second year of a public safety staffing plan. Salaries also increased due to a 4% 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 $61.2 million, an 23% 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, 2006, the City's governmental funds reflect a combined fund balance of $29.9 million. $1.5 million is included 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 balance is due to increased revenues, due to higher than anticipated sales tax and increased franchise fees and the return on investment revenue from the utility funds due to increase growth and sales. General Capital Project Fund included $990,000 of increased fund balance for FY2006. This increase is due to the timing of projects. The City expended $10.7 million in various general capital projects including $7.4 million for the Library, $1.5 million for the Fire Station, and $858,000 for the Community Center projects. Non-major governmental funds included $1.6 million of excess revenues over expenditures primarily relating to the timing of street improvement projects in the Sales Tax Maintenance Fund and Streets Capital Improvement Fund. General Debt Service Fund included $370,000 of increased fund balance for FY2006. This increase was due to refunding bonds issued in FY2006 which reduced the current year debt payment schedule. Georgetown Transportation Enhancement Corporation, the City’s blended component unit, had a decrease in fund balance of $610,101. This decrease is primarily related to timing of street improvement projects funded in FY2005. In addition, these other changes in fund balances should be noted: ƒ Georgetown Transportation Enhancement Corporation contributed $4.7 million in cash and debt funding of street improvements to enhance economic development in 2006. ƒ Direct expenditures for public safety totaled $11 million. ƒ Parks, recreation and library expenditures totaled $4.6 million. ƒ General government expenditures include $284,571 of social service contributions to different organizations in the community. ƒ Street maintenance expenditures were $1.8 million. GENERAL FUND BUDGETARY HIGHLIGHTS: BUDGET ADJUSTMENTS The following is a brief review of the budgetary changes from the original to the final budget. The City approved three General Fund budget amendments during fiscal year 2006. The amendments increased overall budgeted expenditures by $1.2 million from the original budget, representing a .002% increase in appropriations. This increase was offset by program revenues and unallocated prior year fund balances. The amendments consisted of: CITY OF GEORGETOWN, TEXAS MD&A 12 BalanceDeletionsBalance 10/1/2005 Additions& Transfers9/30/2006 Non-depreciable Assets: Land$4,042 $- - $4,042 Construction in progress10,347 14,713 $(1,563) 23,497 Other capital assets Equipment15,900 2,235 (945) 17,190 Buildings21,257 - - 21,257 Improvements18,719 169 - 18,888 Streets99,549 6,681 - 106,231 Capital lease452 - - 452 Less accumulated depreciation (18,011) (2,633) 482 (20,162) Capital Assets - Governmental$152,255 $21,165 $(2,025) $171,394 BalanceDeletionsBalance 10/1/2005 Additions& Transfers9/30/2006 Non-depreciable Assets: Land $1,644 - - $1,644 Construction in progress5,721 $17,278 $(12,815) 10,184 Other capital assets Equipment966 - - 966 Buildings4,969 - - 4,969 Improvements174,712 26,397 - 201,109 Less accumulated depreciation (45,357) (5,946) - (51,303) Capital Assets - Business-Type$142,655 $37,730 $(12,815) $167,570 City-wide Totals$294,909 $58,895 $(14,840) $338,964 *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 ƒ $1.1 million for funding of general capital projects including the Community Center and Fire Station construction projects, as well as, contributions to the commuter rail project. These expenditures were offset by excess fund balances from prior year. ƒ $43,000 for increased public safety compensation STEP plan adjustments to be more competitive with surrounding cities. This expenditure was funded with increased sales tax revenue. ƒ $40,000 for costs associated with the computer system rebuild due to a failed server in the Municipal Court department which was funded with increased court revenues. The City also approved the increase to budgeted contingency reserves, from $3,930,000 to $4,700,000. 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 $171.4 million in a variety of capital assets and infrastructure. The City has $167.6 million invested in its business-type activities capital assets. The detail is reflected in the following schedule: CITY OF GEORGETOWN, TEXAS MD&A 13 2006 2005 2006 2005 2006 2005 General Obligation Bonds$54,430$44,306$4,266$4,510$58,696$48,816 Revenue Bonds45,88540,06445,88540,064 Obligation under capital lease142256142256 Compensated absence payable1,7671,5235465312,3132,054 Arbitrage rebate payable15181518 Total Long Term Debt$56,354$46,103$50,697$45,105$107,051$91,208 Govtl ActivitiesBus-Type ActivitiesTotal City of Georgetown Outstanding Debt and Long-Term Liabilities (In thousands) 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 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 2006 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 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 2006, funding for electric and water services infrastructure maintenance was $6.6 million. For more detailed notes about the City’s capital assets, please see pages 51-53 of the notes to the financial statements. LONG-TERM DEBT ƒ At September 30, 2006, the City had a total of $58.7 million in general obligation debt outstanding. This represents a 21% 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 6 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 2006 debt levy equaled $0.13913 per $100 assessed valuation, or 11% of the maximum allowed. ƒ Total utility system revenue debt was $46 million as of September 30, 2006, including new debt of $8.7 million issued within the Electric Services Funds to fund system expansion. This increase is 15% greater than debt reported at September 30, 2005. CITY OF GEORGETOWN, TEXAS MD&A 14 ƒ A detailed analysis of the City’s long-term debt is located on pages 53-58 in the notes to the financial statements. ECONOMIC FACTORS ƒ Unemployment in the City decreased from 4.2% in 2005 to 4.09% in 2006. ƒ Population continued to grow steadily, at 5% annually, yet utility customer growth averaged approximately 8% 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 29% over 2005. ƒ Annexations for the City are primarily related to the protection of our community gateways. As of September 30, 2006, the total assessed valuation of the annexed properties is $33.7 million and encompasses 7,249 acres. DISCRETELY PRESENTED COMPONENT UNIT The Georgetown Economic Development Corporation (GEDCO) has been included in the reporting entity as a discretely presented component unit since it provides benefits to other entities aside from the City. Separate audited financial statements are not issued for GEDCO. Unaudited financial statements may be obtained from the City’s Finance office at the address below. 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, 2006 Primary Government Unit Georgetown Economic & GovernmentalBusiness-typeDevelopment Activities Activities TOTAL Corporation ASSETS: Cash and cash equivalents $4,637,411 $3,792,867$8,430,278 $103,129 Cash and cash equivalents - restricted690,689690,689 Investments28,104,13819,060,86047,164,998503,514 Investments - restricted1,207,4631,207,463 Prepaid items3,3061,548,0851,551,391 Accounts receivable: Services (net of allowance for uncollectibles)10,943,52210,943,522 Other3,351,3751,875,4625,226,837131,172 Internal balances(117,320)117,320 0 Inventories257,5033,508,2163,765,719 Long-term note receivable895,6862,928,1773,823,863 Deferred charges - bond issuance costs1,081,2491,532,2252,613,474 Capital assets: net of accumulated depreciation37,626,142155,740,630193,366,772 Land4,042,5711,644,5895,687,160 Streets106,229,595106,229,595 Construction in progress23,495,95710,184,33733,680,294 TOTAL ASSETS $209,607,613 $214,774,442 $424,382,055 $737,815 LIABILITIES AND NET ASSETS: Liabilities: Current Liabilties: Accounts payable $3,789,485 $6,455,326 $10,244,811 Accrued interest 298,783301,852600,635 Total current liabilities4,088,2686,757,17810,845,446 Liabilities payable from restricted assets: Construction contracts and retainages payable357,844357,844 Customer deposits839,611839,611 Total liabilities payable from restricted assets1,197,4551,197,455 Unearned revenue2,074,2692,372,2884,446,557 Noncurrent liabilities: Due within one year3,408,9373,570,5816,979,518 Due in more than one year52,945,40547,126,305100,071,710 Total liabilities 62,516,87961,023,807123,540,686 Net Assets: Invested in capital assets (net of related debt)122,268,551117,419,122239,687,673 Restricted for: Debt Service878,668878,668 Capital Projects17,375,8615,389,06322,764,924 $737,815 Unrestricted6,567,65430,942,45037,510,104 Total net assets 147,090,734153,750,635300,841,369737,815 TOTAL LIABILITIES AND NET ASSETS $209,607,613 $214,774,442 $424,382,055 $737,815 The notes to the financial statements are an integral part of this statement. Component CITY OF GEORGETOWN, TEXAS STATEMENT OF ACTIVITIES FISCAL YEAR ENDED SEPTEMBER 30, 2006 Charges forOperating GrantsCapital Grants ExpensesServices& Contributions& Contributions Functions/Programs Primary government Governmental Activities Culture-recreation$5,649,191$991,505$67,296 Development2,325,7611,761,166 Fire4,397,108210,4531,300 General government3,671,786635,546 $146,440 Police7,392,816880,807100,267 Streets3,757,919101,685 6,007,197 Interest on long term debt2,010,409 Total governmental activities29,204,9904,581,162168,8636,153,637 Business -type Activities Airport$2,753,948$2,595,764$$389,988 Electric37,866,85342,526,7281,030,107 Sanitation3,519,4873,446,566 Stormwater1,370,2671,716,0664,508,718 Water15,668,06120,318,6038,288,481 Total business-type activities61,178,61670,603,72714,217,294 Total primary government$90,383,606$75,184,889$168,863$20,370,931 Component Unit Georgetown Economic & Development Corportation $(35,180)$$$ General revenues: Property Tax Sales Tax Taxes - other Franchise taxes Interest on investments Other Transfers Total general revenues and transfers Change in Net Assets Net Assets, beginning of the year Net Assets, end of the year The notes to the financial statements are an integral part of this statement. Program Revenues Component Unit Georgetown Economic & GovernmentalBusiness-TypeDevelopment ActivitiesActivitiesTotalCorporation $(4,590,390)$$(4,590,390) (564,595)(564,595) (4,185,355)(4,185,355) (2,889,800)(2,889,800) (6,411,742)(6,411,742) 2,350,9632,350,963 (2,010,409)(2,010,409) (18,301,328)(18,301,328) $$231,804$231,804 5,689,9825,689,982 (72,921)(72,921) 4,854,5174,854,517 12,939,02312,939,023 23,642,40523,642,405 $(18,301,328)$23,642,405$5,341,077 $(35,180) 8,919,6948,919,694 10,962,79010,962,790760,125 844,718844,718 2,209,2352,209,235 1,398,7061,673,1673,071,87312,870 463,719 3,938,9424,402,661 6,230,148(6,230,148) 31,029,010(618,039)30,410,971772,995 12,727,68223,024,366 35,752,048 737,815 134,363,052130,726,269265,089,321 $147,090,734$153,750,635$300,841,369$737,815 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, 2006 GEORGETOWN TRANSPORTATIONGENERALNONMAJORTOTAL ENHANCEMENTDEBTCAPITALGOVERNMENTALGOVERNMENTAL GENERAL CORPORATION SERVICE PROJECTS FUNDS FUNDS ASSETS Cash and cash equivalents$1,469,606$2,352,772$595,3854,417,763$ Investments7,174,508$9,063,418$871,5597,015,3812,906,86827,031,734 Accounts receivable (net of allowance for uncollectible accounts): Delinquent taxes168,812101,515270,327 Sales tax1,155,127508,510310,5241,974,161 Grants 21,61421,614 Other 796,2237,865148,168952,256 Inventories1,911 1,911 Long-term note receivable895,686 895,686 TOTAL ASSETS $11,661,873$9,571,928$973,074$9,376,018$3,982,55935,565,452$ LIABILITIES AND FUND BALANCE Liabilities: Accounts payable $737,742$216,878$2,171,105$36,3623,162,087$ Due to other funds 101,58515,735117,320 Unearned revenue 1,967,817$94,406275,2642,337,487 Total liabilities $2,705,559$318,463$94,406$2,171,105$327,3615,616,894$ Fund Balance: Reserved for: Encumbrances$1,036,847$2,901,905$4,678,907$375,1778,992,836$ Inventories1,911 1,911 Debt service $878,668878,668 Prepaid items Special programs 2,379,5202,379,520 Unreserved, reported in: General fund7,917,556 7,917,556 Capital projects funds6,351,5602,526,006900,5019,778,067 Total fund balance$8,956,314$9,253,465$878,668$7,204,913$3,655,19829,948,558$ TOTAL LIABILITIES AND FUND BALANCE $11,661,873$9,571,928$973,074$9,376,018$3,982,55935,565,452$ 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, 2006 Total fund balance - total governmental funds$29,948,558 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.164,585,649 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.7,719,073 Premiums, discounts and debt issuance costs have not been included in the fund financial statements.1,081,249 Bonds payable and contractual obligations are not due and payable in the current period therefore have not been included in the fund financial statements.(54,429,567) Accrued liabilities for compensated absences are not due and payable in the current period therefore have not been included in the fund financial statements.(1,621,380) Capital leases are not due and payable in the current period, therefore have not been included in the fund financial statements.(142,633) Liabilities for arbitrage are not due and payable in the current period therefore have not been reflected in the fund financial statements.(14,650) 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.263,218 Interest is accrued on outstanding debt in the government-wide financial statements, whereas in the fund financial statements interest expense is reported when due.(298,783) Net Assets of Governmental Activities $147,090,734 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, 2006 GEORGETOWN TRANSPORTATIONGENERALNONMAJORTOTAL ENHANCEMENTDEBTCAPITAL GOVERNMENTAL GOVERNMENTAL GENERAL CORPORATION SERVICE PROJECTS FUNDS FUNDS REVENUES: Property taxes: Current$5,460,756$3,447,998$8,908,754 Delinquent50,65725,41876,075 Penalties and interest63,087 63,087 Other158,205$374,340532,545 Property assessment 173,011173,011 Sales tax6,402,041$3,040,4991,520,25010,962,790 Franchise taxes2,209,235 2,209,235 Licenses and permits1,723,082 1,723,082 Charges for service941,718125,7421,067,460 Fines and forfeitures846,01061,973907,983 Donations and grants14,790154,073168,863 Investment income394,992342,52090,178$463,086107,9301,398,706 Other revenue555,198512,61718,460342,2101,428,485 Total revenues 18,819,7713,895,6363,563,594481,5462,859,52929,620,076 EXPENDITURES: Current: Culture - recreation 4,330,337638,5654,968,902 Development2,112,84515,0822,127,927 Fire services 4,078,79692,7314,171,527 General government2,152,667149,7502,302,417 Highways and streets1,758,2893,2051,761,494 Police 6,918,948151,1407,070,088 Capital outlay 4,467,37110,506,240976,53115,950,142 Debt service: Principal retirement 2,387,0352,387,035 Interest and fiscal charges 35,0002,072,752200,0942,307,846 Total expenditures 21,351,8824,652,1214,459,78710,706,3341,877,25443,047,378 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (2,532,111)(756,485)(896,193)(10,224,788)982,275(13,427,302) OTHER FINANCING SOURCES (USES): Transfers in 5,749,5971,173,504975,000682,3258,580,426 Transfers out (1,732,126)(1,088,616)(995,465)(123,812)(3,940,019) Sale of property 31,10231,102 Payment to refunding escrow agent(7,736,794)(7,736,794) Certificate of obligation bond issued1,235,0007,830,00011,235,00020,300,000 Total other financing sources (uses) 4,017,471146,3841,266,71011,214,535589,61517,234,715 NET CHANGE IN FUND BALANCES1,485,360(610,101)370,517989,7471,571,8903,807,413 FUND BALANCES, Beginning of period7,470,9549,863,566508,1516,215,1662,083,30826,141,145 FUND BALANCES, End of period $8,956,314$9,253,465$878,668$7,204,913$3,655,198$29,948,558 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, 2006 Net change in fund balances - governmental funds $3,807,413 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 2006, which is allocated to governmental activities 40,284 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 $13,149,867 in construction in progress additions. The effect of removing the 2006 capital outlays is to increase net assets.20,467,360 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.(1,385,854) 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.(84,714) 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.10,293,118 The notes to financial statements are an integral part of this statement.(continued) Current year bond proceeds on certificates of obligation ($20,300,000) and related debt issuance costs ($262,000) are not shown as revenue and expenditures in the government-wide financial statements.$(20,038,000) Interest is accrued on outstanding debt in the government-wide financia statements, whereas in the fund financial statements, the expenditure is reported when due.(49,137) 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.(220,500) Revenue from property taxes 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.(102,288) Change in Net Assets of Governmental Activities $12,727,682 CITY OF GEORGETOWN, TEXAS GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FISCAL YEAR ENDED SEPTEMBER 30, 2006 2006 ACTUAL BUDGETARYVARIANCE TO ORIGINALFINALBASISFINAL BUDGET REVENUES: Property taxes : Current$5,542,765 $5,542,765$5,460,756$(82,009) Delinquent32,000 32,00050,65718,657 Penalties and interest30,000 30,00063,08733,087 Sales tax6,125,000 6,168,0006,402,041234,041 Franchise taxes2,003,000 2,003,0002,209,235206,235 Licenses and permits 1,114,000 1,114,0001,767,533653,533 Charges for services 794,830 794,830897,269102,439 Fines and forfeitures 725,250 765,250846,01080,760 Other taxes170,600 170,600158,205(12,395) Investment income172,000 172,000387,605215,605 Miscellaneous410,300 491,893650,608158,715 Total revenues 17,119,745 17,284,33818,893,0061,608,668 EXPENDITURES: Current: Culture - recreation4,380,446 4,460,1564,351,122109,034 Development2,369,811 2,393,5822,312,68680,896 Fire services4,279,094 4,297,5824,102,765194,817 General government 2,553,668 2,518,5782,266,252252,326 Highways and streets2,088,059 1,608,7621,496,631112,131 Police services7,043,716 7,152,1446,949,278202,866 Total expenditures 22,714,794 22,430,80421,478,734952,070 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(5,595,049) (5,146,466)(2,585,728)2,560,738 OTHER FINANCING SOURCES (USES): Transfers in 5,104,870 5,106,7875,749,597642,810 Transfers out (169,708) (1,744,708)(1,732,126)12,582 Total other financing sources (uses) 4,935,162 3,362,0794,017,471655,392 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES)(659,887) (1,784,387)1,431,7433,216,130 FUND BALANCES, Beginning of period5,360,276 6,484,7766,487,0992,323 FUND BALANCES, End of period $4,700,389$4,700,3897,918,842$3,218,453 Adjustments to GAAP: Reverse current year encumbrances1,036,847 Record net unrealized gain on investments625 FUND BALANCE - GAAP BASIS, End of period $8,956,314 The notes to the financial statements are an integral part of this statement. BUDGETED AMOUNTS CITY OF GEORGETOWN, TEXAS STATEMENT OF NET ASSETS PROPRIETARY FUNDS AS OF SEPTEMBER 30, 2006 Business-type Activities Enterprise Funds WATER OTHER ELECTRICSERVICESENTERPRISEGOVERNMENTAL ACTIVITIES FUND FUND FUNDS TOTAL INTERNAL SERVICE FUNDS ASSETS: Current Assets: Cash and cash equivalents$3,561,023$231,844$3,792,867$219,648 Cash and cash equivalents - restricted$142,735104,578443,376690,689 Investments5,592,70912,336,0961,132,05519,060,8601,072,404 Investments - restricted696,878510,5851,207,463 Prepaid expenses1,548,0851,548,0853,306 Accounts receivable: Services (net of allowance for uncollectibles)6,916,5943,209,702817,22610,943,522133,017 Other1,812,37963,0831,875,462 Due from other funds895,647895,647 Inventories3,483,88924,3273,508,216255,592 Total current assets 18,645,18422,165,7162,711,91143,522,811 1,683,967 Noncurrent Assets: Long-term note receivables2,928,1772,928,177 Deferred charges - bond issuance costs487,243897,498147,4841,532,225 Capital assets: Land and land rights193,735469,354981,5001,644,589214,065 Distribution system54,766,867125,998,52214,622,484195,387,873 Buildings and improvements73,7073,019,7947,597,18710,690,6881,279,886 Machinery, furniture and equipment536,096236,382193,627966,10515,416,177 Construction in progress3,530,6655,939,470714,20210,184,337 Less accumulated depreciation (18,597,632)(26,586,449)(6,119,955)(51,304,036)(10,101,512) Total capital assets (net of accumulated depreciation)40,503,438109,077,07317,989,045167,569,5566,808,616 Total noncurrent assets 40,990,681112,902,74818,136,529172,029,9586,808,616 TOTAL ASSETS $59,635,865$135,068,464$20,848,440$215,552,769$8,492,583 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable$5,424,270$631,453$450,763 $6,506,486$627,398 Compensated absence95,30169,62626,246191,17348,407 Due to other funds355,980422,347778,327 Current portion of long-term debt948,8012,176,198254,4093,379,408 Accrued interest 116,650158,99226,210301,852 Total current liabilities payable from unrestricted assets 6,941,0023,036,2691,179,97511,157,246675,805 Current liabilities payable from restricted assets: Construction contracts and retainages payable306,684306,684 Customer deposits839,611839,611 Total current liabilities payable from restricted assets 839,611306,6841,146,295 Total current liabilities 7,780,6133,342,9531,179,97512,303,541675,805 Noncurrent liabilities: Compensated absence173,255131,10550,919355,27997,705 Unearned revenue2,372,2882,372,288 Long-term debt16,859,99125,900,0104,011,02546,771,026 Total noncurrent liabilities 17,033,24628,403,4034,061,94449,498,59397,705 Total liabilities 24,813,85931,746,3565,241,91961,802,134773,510 Net Assets: Invested in capital assets (net of related debt)22,694,64681,000,86513,723,611117,419,1226,356,506 Restricted for: Future construction5,389,0635,389,063 Unrestricted12,127,36016,932,1801,882,91030,942,4501,362,567 Total net assets 34,822,006103,322,10815,606,521153,750,6357,719,073 TOTAL LIABILITIES AND NET ASSETS $59,635,865$135,068,464$20,848,440$215,552,769$8,492,583 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, 2006 Business-type Activities Enterprise Funds WATEROTHERGOVERNMENTAL ELECTRICSERVICESENTERPRISEACTIVITIES FUND FUND FUNDS TOTAL INTERNAL SERVICE FUNDS OPERATING REVENUES: Charges for sales and services: Service charges $8,996,411 Electric$41,338,196$41,338,196 Water$12,848,07812,848,078 Waste 6,861,481$3,397,25510,258,736 Other1,188,532609,0444,361,1416,158,717 Total operating revenues42,526,72820,318,6037,758,39670,603,7278,996,411 OPERATING EXPENSES: Electric3,360,4673,360,467 Water 1,993,0491,993,049 Waste 1,199,790 1,199,790 Depreciation2,173,8412,998,223773,9175,945,9811,246,934 Utility contracts31,816,7444,831,0453,519,48740,167,276 Plant management3,154,931 3,154,931 Other 3,137,9213,137,9219,383,643 Total operating expenses37,351,05214,177,0387,431,32558,959,41510,630,577 NET OPERATING INCOME (LOSS)5,175,6766,141,565327,07111,644,312(1,634,166) NONOPERATING REVENUES (EXPENSES): Investment earnings260,0001,340,11373,0541,673,167112,530 Donations and grants 389,988389,988 Interest and fiscal charges(515,801)(1,491,023)(212,377)(2,219,201) Gain (loss) on disposed assets (449,932) Other2,322,4731,555,93860,5313,938,942275,671 Total nonoperating revenues (expenses)2,066,6721,405,028311,1963,782,896(61,731) INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS7,242,3487,546,593638,26715,427,208(1,695,897) CONTRIBUTIONS AND TRANSFERS: Capital contributions1,030,1078,288,4814,508,71813,827,306146,440 Transfers in10,37656210,9381,702,682 Transfers out(3,925,318)(1,903,192)(412,576)(6,241,086)(112,941) Total contributions and transfers(2,895,211)6,395,6654,096,7047,597,1581,736,181 CHANGE IN NET ASSETS4,347,13713,942,2584,734,97123,024,36640,284 TOTAL NET ASSETS - beginning30,474,86989,379,85010,871,550130,726,2697,678,789 TOTAL NET ASSETS - ending $34,822,006$103,322,108$15,606,521$153,750,635$7,719,073 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, 2006 Business-type Activities Enterprise Funds WATEROTHERGOVERNMENTAL ELECTRICSERVICESENTERPRISEACTIVITIES FUND FUND FUNDS TOTAL INTERNAL SERVICE FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers$42,144,435$24,553,462$7,798,028$74,495,925$8,959,044 Payments to suppliers(33,624,956)(10,048,173)(6,096,595)(49,769,724)(4,363,068) Franchise fees(760,696)(356,538)(93,694)(1,210,928) Payments to employees for services(1,628,282)(1,212,931)(464,818)(3,306,031)(4,580,385) Net cash provided by operating activities6,130,50112,935,8201,142,92120,209,24215,591 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in 10,37656210,9381,702,682 Transfers out(3,925,318)(1,903,192)(412,576)(6,241,086)(112,941) Payments from (to) other funds355,980(480,289)367,986243,677 Net cash provided by (used for) noncapital financing activities(3,569,338)(2,373,105)(44,028)(5,986,471)1,589,741 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITES: Acquisition of capital assets(8,496,614)(7,834,967)(705,481)(17,037,062)(1,608,564) Donations and grants 389,988389,988 Impact fees 1,466,0501,466,050 Proceeds from issuance of long-term debt8,665,0008,665,000 Principal paid on revenue and certificates of obligation bonds(798,582)(2,250,431)(243,952)(3,292,965) Interest paid on revenue and certificates of obligation bonds(587,414)(1,348,288)(201,969)(2,137,671) Net cash used for capital and related financing activities(1,217,610)(9,967,636)(761,414)(11,946,660)(1,608,564) CASH FLOWS FROM INVESTING ACTIVITIES: Interest received260,0001,340,11473,0541,673,168112,530 Change in temporary investments(2,572,545)(4,842,490)(383,514)(7,798,549)(161,683) Net cash provided by (used for) investing activities(2,312,545)(3,502,376)(310,460)(6,125,381)(49,153) Net increase (decrease) in cash and cash equivalents(968,992)(2,907,297)27,019(3,849,270)(52,385) Cash and cash equivalents at beginning of year1,111,7276,572,898648,2018,332,826272,034 Cash and cash equivalents at end of year142,7353,665,601675,2204,483,556219,649 Classified as: Current assets3,561,023231,8443,792,867219,648 Restricted assets142,735104,578443,376690,689 Total $142,735 $3,665,601 $675,220 $4,483,556 $219,648 Non-cash disclosure Developer contributions$1,030,107$8,288,481$4,508,718$13,827,306 Equity transfers to internal service funds $146,440 The notes to the financial statements are an integral part of this statement.(continued) CITY OF GEORGETOWN, TEXAS STATEMENT OF CASH FLOWS (CONTINUED) PROPRIETARY FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2006 Business-type Activities Enterprise Funds WATEROTHERGOVERNMENTAL ELECTRICSERVICESENTERPRISEACTIVITIES FUND FUND FUNDS TOTAL INTERNAL SERVICE FUNDS OPERATING INCOME (LOSS)$5,175,676$6,141,565$327,071$11,644,312$(1,634,166) Adjustments to reconcile operating income (loss) to cash provided by operating activities: Depreciation2,173,8412,998,223773,9175,945,9811,246,934 Other income2,322,47389,89060,5312,472,894275,671 Bad debt expense44,81020,4501,13966,399 Increase (decrease) in unearned revenue(303,254)(303,254)11,594 Decrease (increase) in prepaid expenses(196,009)(196,009) Decrease (increase) in inventories(2,172,241)19,063(2,153,178)(477) Decrease (increase) in accounts receivable(2,848,008)(370,699)(22,038)(3,240,745)(37,367) Decrease (increase) in customer deposits98,43298,432 Decrease (increase) in notes receivable4,798,4724,798,472 Increase (decrease) in accounts payable1,324,000(250,398)(12,965)1,060,637129,209 Increase (decrease) in compensated absences payable11,5187,580(3,797)15,30124,193 Net cash provided by operating activities$6,130,501$12,935,820$1,142,921$20,209,242$15,591 CITY OF GEORGETOWN, TEXAS STATEMENT OF FIDUCIARY NET ASSETS AGENCY FUNDS AS OF SEPTEMBER 30, 2006 ASSETS: Cash and cash equivalents$55,615 Accounts receivable1,159,673 TOTAL ASSETS $1,215,288 LIABILITIES: Accounts payable$64,650 Due to other governments1,150,638 TOTAL LIABILITIES $1,215,288 The notes to the 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, 2006 36 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. Based upon these considerations, the City’s financial statements include the Georgetown Transportation Enhancement Corporation as a blended component unit. Discretely presented component units, on the other hand, are reported in a separate column in the government-wide financial statements to emphasize they are legally separate from the primary government, and whose exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. Based upon these considerations, the City’s financial statements include the Georgetown Economic Development Corporation as a discretely presented component unit. BLENDED COMPONENT UNIT The Georgetown Transportation Enhancement Corporation (GTEC), the City’s 4B economic development corporation, is a legally separate entity from the City that was created in May 2001 by voters approving an additional sales tax. GTEC is governed by a seven member board appointed by City Council, of which, four are 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. DISCRETELY PRESENTED COMPONENT UNIT The Georgetown Economic Development Corporation (GEDCO) has been included in the reporting entity as a discretely presented component unit. GEDCO can not be considered a blended component unit because the revenues are not only for the benefit of the City. GEDCO was created by the City in May 2005, although no activity took place until fiscal year 2006, under the Texas Development Act of 1979 for the purpose of promoting, assisting, and CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 37 enhancing economic and development activities on behalf of the City. It is funded through voter authorized sales tax. The five member Board, which includes three City Council members, is appointed by and serves at the discretion of the City Council. City Council approval is required for annual budgets and bonded debt issuance. In the event of dissolution, net assets of GEDCO shall be converted to the City. The City accounts for GEDCO as a discretely presented component unit on the government-wide financial statements. Separate audited financial statements are not issued for GEDCO. Unaudited financial statements may be obtained from the City’s finance office. 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. 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 is 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. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 38 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 Fund. 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. 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 Fund – 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. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 39 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. 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 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 40 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. 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 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 41 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, with the exception of amendments related to capital projects, LCRA and Avgas fuel purchases and refunding bonds issued, whose actual costs were unknown when the budget was adopted. 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. 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, 2006. 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. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 42 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, 2006 was $2,903,537 in the Water Services Fund and $895,686 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 are $2,928,177, 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. 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, 2006 (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 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 43 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 $19,040 was capitalized in enterprise funds during the 2006 fiscal year. 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 2006 were $13,827,306 and $146,440 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 2006. This fiscal year is the second year to utilize the asset management system. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 44 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 2006 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. 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. PCIRating 100 - 85Good 84 - 45Fair 44 - 0Poor CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 45 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 2006, 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, 2006, 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. 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. • 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. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 46 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. 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 $890,193 and the bank balances were $263,763 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). The City’s discretely presented component unit had a carrying amount of $45,985 at year end. 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. 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. Interest Rate Risk - In compliance with the City’s Investment Policy, as of September 30, 2006, 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. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 47 The City’s investments carried at fair value as of September 30, 2006, are: Credit Risk – In compliance with the City’s Investment Policy, as of September 30, 2006, 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. Fair Weighted Average ValueMaturity (days) Investments U S Treasury Securities$1,995,43021 U S Government Agency Securities31,545,887243 U.S. Treasury Plus MMKT Fund - Chase (sweep)5,057,4291 Texas Local Government Investment Pool (TexPool)4,132,3431 Texas Local Government Investment Pool (TexasTERM)4,666,0081 Texas Short Term Asset Reserve Program (TexSTAR)10,986,5241 Total Fair Value of Investments:$58,383,621 Portfolio weighted average maturity:132 Carrying Amount $(890,193) Total Cash & Investments:$57,493,428 Fair Weighted Average ValueMaturity (days) Investments Texas Short Term Asset Reserve Program (TexSTAR)560,6581 Total Fair Value of Investments:$560,658 Portfolio weighted average maturity:1 Carrying Amount $45,985 Total Cash & Investments:$606,643 Primary Government Component Unit CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 48 At year end, balances in TexSTAR and TexPool were rated AAAm by Standard & Poor’s. Balances in Texas TERM were rated AAAf by Standard & Poor’s. 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 $2,818 greater than the book value for the pools at 9/30/06. During 2006, 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 $7,984. 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, 2006 was $6,749. 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, 2006, was $.34626 per $100 of assessed valuation. The Williamson Central 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 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. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 49 InterfundInterfund ReceivablesPayables MAJOR FUNDS: Georgetown Tranportation Enhancement Corporation$101,585 Electric fund 355,980 Water Services fund$895,647 Total major funds895,647457,565 NONMAJOR FUNDS: Village Improvement District15,735 Sanitation funds 422,347 Total nonmajor funds438,082 TOTAL INTERFUND RECEIVABLES & PAYABLES $895,647$895,647 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. In November 2006, the citizens readopted this ¼ cent sales tax option. The sunset provision will expire in March 2011. These funds are reported in the Streets Special Revenue Fund. On October 1, 2005, the City began collecting an additional 1/8 cent 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. GEDCO is reported as a discretely presented component unit of the City. On October 1, 2005, the City began collecting an additional 1/8 cent sales tax to be used toward the reduction of ad valorem property taxes. Proceeds are credited to the City’s General 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. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 50 TOTAL General FundDebt Service Gen. Capital Projects Water Services Nonmajor FundsInternal Services TRANSFERS OUT Governmental Funds: Major Funds T General fund975,000 667,326 89,800 1,732,126 R GTEC1,088,616 1,088,616 A Gen. capital projects 995,465 995,465 N S Nonmajor Funds F Special revenue funds (SRFs)55,870 52,942 15,000 123,812 E Internal service funds76,417 31,946 4,579 112,943 R SEnterprise Funds: Major funds O Electric3,452,006 10,376 562 462,374 3,925,318 U Water services1,752,728 150,464 1,903,192 T Nonmajor funds Nonmajor enterprise funds412,576 412,576 TOTAL TRANSFERS IN5,749,597 1,173,504 975,000 10,376 682,887 1,702,682 10,294,046 Transfers eliminated in Government-wide statements:(4,063,898) Net Transfers:6,230,148 TRANSFERS IN Nonmajor FundsMajor Funds The net transfers between the governmental types and business types total $6,230,148. Per the city’s fiscal and budgetary policy, utility operations transfer eight percent of is gross billings for utility services to the General fund as a payment of the profits of the fund or a return on investment. Other types of transfers include grant matching, fire hydrant testing, equipment purchases and capital project funding. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 51 BalanceDeletionsBalance 10/01/05Additions& Transfers9/30/06 Governmental activities: Capital assets not being depreciated Land$4,042,571 $4,042,571 Construction in progress10,346,091 $14,712,691 $(1,562,825) 23,495,957 Total capital assets not being depreciated14,388,662 14,712,691 (1,562,825) 27,538,528 Capital assets being depreciated Equipment15,900,558 2,235,241 (944,947) 17,190,852 Buildings21,256,991 21,256,991 Improvements18,719,031 168,665 18,887,696 Streets99,548,299 6,681,296 106,229,595 Capital Lease452,109 452,109 Total capital assets being depreciated155,876,988 9,085,202 (944,947) 164,017,243 Less accumulated depreciation for: Equipment(9,665,668) (1,235,904) 482,310 (10,419,262) Buildings(3,728,618) (525,357) (4,253,975) Improvements(4,526,320) (781,105) (5,307,425) Capital lease(90,422) (90,422) (180,844) Total accumulated depreciation(18,011,028) (2,632,788) 482,310 (20,161,506) Total capital assets being depreciated, net 137,865,960 6,452,414 (462,637) 143,855,737 Governmental activities capital assets, net$152,254,622 $21,165,105 $(2,025,462) $171,394,265 Electric activities: Capital assets not being depreciated Land$193,735 $193,735 Construction in progress486,677 $8,702,065 $(5,658,077) 3,530,665 Total capital assets not being depreciated680,412 8,702,065 (5,658,077) 3,724,400 Capital assets being depreciated Equipment536,096 - 536,096 Buildings73,707 73,707 Improvements48,232,974 6,533,893 54,766,867 Total capital assets being depreciated48,842,777 6,533,893 - 55,376,670 Less accumulated depreciation for: Equipment(407,720) (47,188) (454,908) Buildings(13,924) (4,110) (18,034) Improvements(16,002,148) (2,122,542) (18,124,690) Total accumulated depreciation(16,423,792) (2,173,840) - (18,597,632) Total capital assets being depreciated, net 32,418,985 4,360,053 - 36,779,038 Electric activities capital assets, net$33,099,397 $13,062,118 $(5,658,077) $40,503,438 5. CAPITAL ASSETS Capital asset activity for the year ended September 30, 2006 was as follows: CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 52 BalanceDeletionsBalance 10/01/05Additions& Transfers9/30/06 Water services activities: Capital assets not being depreciated Land$469,354 $469,354 Construction in progress5,035,060 $7,870,631 $(6,966,221) 5,939,470 Total capital assets not being depreciated5,504,414 7,870,631 (6,966,221) 6,408,824 Capital assets being depreciated Equipment236,382 236,382 Buildings3,019,794 3,019,794 Improvements110,834,055 15,164,467 125,998,522 Total capital assets being depreciated114,090,231 15,164,467 - 129,254,698 Less accumulated depreciation for: Equipment(193,331) (15,954) (209,285) Buildings(1,159,582) (91,711) (1,251,293) Improvements(22,235,313) (2,890,558) (25,125,871) Total accumulated depreciation(23,588,226) (2,998,223) - (26,586,449) Total capital assets being depreciated, net 90,502,005 12,166,244 - 102,668,249 Water services activities capital assets, net$96,006,419 $20,036,875 $(6,966,221) $109,077,073 Other nonmajor business type activities: Capital assets not being depreciated Land$981,500 $981,500 Construction in progress199,121 $705,481 $(190,400) 714,202 Total capital assets not being depreciated1,180,621 705,481 (190,400) 1,695,702 Capital assets being depreciated Equipment193,627 193,627 Buildings1,875,808 1,875,808 Improvements15,644,745 4,699,119 20,343,864 Total capital assets being depreciated17,714,180 4,699,119 - 22,413,299 Less accumulated depreciation for: Equipment(171,891) (7,956) (179,847) Buildings(998,306) (96,387) (1,094,693) Improvements(4,175,842) (669,574) (4,845,416) Total accumulated depreciation(5,346,039) (773,917) - (6,119,956) Total capital assets being depreciated, net 12,368,141 3,925,202 - 16,293,343 Other nonmajor business-type activities capital assets, net $13,548,762 $4,630,683 $(190,400) $17,989,045 Total Business-type activities: Capital assets not being depreciated Land$1,644,589 - - $1,644,589 Construction in progress5,720,858 $17,278,177 $(12,814,698) 10,184,337 Total capital assets not being depreciated7,365,447 17,278,177 (12,814,698) 11,828,926 Capital assets being depreciated Equipment966,105 - - 966,105 Buildings4,969,309 - - 4,969,309 Improvements174,711,774 26,397,479 - 201,109,253 Total capital assets being depreciated180,647,188 26,397,479 - 207,044,667 Less accumulated depreciation for: Equipment(772,942) (71,098) - (844,040) Buildings(2,171,812) (192,208) - (2,364,020) Improvements(42,413,303) (5,682,674) - (48,095,977) Total accumulated depreciation(45,358,057) (5,945,980) - (51,304,037) Total capital assets being depreciated, net 135,289,131 20,451,499 - 155,740,630 Total business-type activities capital assets, net $142,654,578 $37,729,676 $(12,814,698) $167,569,556 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 53 Depreciation expense was charged to function/programs of the primary government as follows: Governmental activities: Culture-recreation$284,526 Development6,501 Economic development1,250 Fire38,403 General government663,460 Highways & streets330,113 Police61,600 Internal service funds1,246,935 Total depreciation expense governmental activities$2,632,788 Business-type activities: Electric$2,173,841 Water services2,998,223 Nonmajor773,917 Total depreciation expense business-type activities$5,945,981 6. 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, 2006: BalanceBalance October 1,September 30,Due within 2005AdditionsRetirements2006one year Governmental activities: General obligation bonds$44,306,603$20,300,000$(10,177,036)$54,429,567$2,755,592 (payable from tax pledge) Compensated absences1,522,801757,030(512,339)1,767,492583,077 Obligation under capital lease255,702(113,069)142,63370,268 Arbitrage rebate payable17,663(3,013)14,650 Total governmental activities 46,102,76921,057,030(10,805,457)56,354,3423,408,937 Business-type activities: Revenue bonds40,064,01211,870,000(6,049,012)45,885,0003,125,000 Compensated absences531,152194,191(178,891)546,452191,173 General obligation bonds4,509,384(243,950)4,265,434254,408 (payable from airport and stormwater revenues) Total business-type activities 45,104,54812,064,191(6,471,853)50,696,8863,570,581 TOTAL LONG-TERM DEBT$91,207,317$33,121,221$(17,277,310)$107,051,228$6,979,518 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 54 Fiscal Year Ending September 30 Principal Interest Principal Interest Principal Interest 20072,755,592$ 2,070,843$ 3,379,409$ 2,396,950$ 6,135,001$ 4,467,793$ 20082,690,6852,738,3193,339,3162,121,6106,030,0014,859,929 20092,865,3512,150,5923,429,6491,976,5666,295,0004,127,158 20102,893,2102,032,6123,511,7911,824,1166,405,0013,856,728 20112,869,8821,922,5393,280,1181,670,0246,150,0003,592,563 2012-201616,030,8067,693,48115,989,1966,101,34232,020,00213,794,823 2017-202115,214,0414,046,87211,550,9552,813,93626,764,9966,860,808 2022-20269,110,000978,0335,670,000659,32914,780,0001,637,362 54,429,567$ 23,633,291$ 50,150,434$ 19,563,873$ 104,580,001$ 43,197,164$ GovernmentalTotalBusiness-type At September 30, 2006 there was $9,400,000 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, 2006 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% $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 $985,000, 2004 Limited tax notes due in annual installments through February 15, 2011; interest at 2.5% to 4.0% $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) $ 170,000 2,169,900 687,960 190,000 4,255,000 1,584,289 500,000 3,215,000 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 55 $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) $7,100,000, 2005A General obligation and Refunding bonds due in annual installments through August 15, 2025; interest at 3.5% to 4.75% $4,135,000, 2006 Combination tax & revenue certificates of obligation due in annual installments through August 15, 2026; interest at 4% to 4.625% Subtotal Tax-Supported General Obligation Debt – City Portion 13,576,707 7,100,000 4,135,000 37,583,856 $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%; 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%; portion refunded in 2006 $4,175,000, 2005 Combination tax & revenue certificates of obligation due in annual installments through August 15, 2025; interest at 3% to 4.5%; designated for GTEC capital improvements to be paid through revenues from the ½ cent GTEC sales tax $1,235,000, 2006 Combination tax & revenue certificates of obligation due in annual installments through August 15, 2026; interest at 4% to 4.625%; designated for GTEC capital improvements to be paid through revenues from the ½ cent GTEC sales tax $7,830,00, 2006 Combination tax & revenue refunding bonds due in annual installments through August 15, 2024; interest at 4.2% to 5% Subtotal Tax-Supported General Obligation Debt – GTEC portion Subtotal Tax-Supported General Obligation Debt -Combined 2,765,000 490,711 495,000 4,030,000 1,235,000 7,830,000 16,845,711 $54,429,567 A summary of Self-Supporting General Obligation Debt outstanding at September 30, 2006: $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, $129,208, to be paid with Airport fees. Portion dedicated for CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 56 MaturitiesSeries 2004-LTN 2007 335,000$ 2008 345,000 2009 135,000 2010 105,000 2011 6,870,000 7,790,000$ Stormwater Drainage Improvements, $2,274,059, to be paid through monthly fees charged to utility customers within City limits $ 1,850,100 $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 257,040 $435,000, 2005 Combination tax & revenue certificates of obligation due in annual installments through August 15, 2025; interest at 3% to 4.5% 420,000 $1,804,835, 2005 General obligation and Refunding bonds due in annual installments through August 15, 2020; interest at 3% to 4.75% 1,738,294 Subtotal Self-Supporting General Obligation Debt 4,265,434 Total outstanding General Obligation Debt as of September 30, 2006 $58,695,00 C. Advanced Refunding/Defeasance 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, 2006, the outstanding balance of the defeased bonds is $10,320,000. On May 18, 2006, the City issued $7,830,000 in Combination Tax and Refunding Bonds with an average interest rate of 4.5% to advance refund $7,790,000 of outstanding Series 2004 Limited tax notes with average interest rates of 3.25%. 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 extend the debt repayment schedule to match the corresponding site improvements and to obtain a net economic gain (difference between the present values of debt service payments on the old and new debt) of $551,237. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 57 D. Revenue Debt A summary of Revenue Debt outstanding at September 30, 2006 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% $15,325,000 $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% 590,000 $4,320,000, 2000 Utility System Revenue bonds due in annual installments through August 15, 2020; interest at 5.1% to 5.9% 565,000 $1,900,000, 2001 Utility System Revenue bonds due in annual installments through August 15, 2021; interest at 4.75% to 5.12% $1,485,000 $6,500,000, 2002 Utility System Revenue bonds due in annual installments through August 15, 2022; interest at 4.0% to 5.0% 5,780,000 $6,940,000, 2003 Utility System Revenue bonds due in annual installments through August 15, 2023; interest at 3.55% to 4.55% 6,430,000 $4,025,000 2005 Utility System Revenue bonds due in annual installments through August 15, 2025; interest at 2.85% to 4.75% 3,885,000 $8,665,000 2006 Utility System Revenue bonds due in annual installments through August 15, 2026; interest at 4% to 4.625% 8,665,000 $3,205,000, 2006 Utility System Revenue & Refunding bonds due in annual installments through August 15, 2020; interest at 4% to 4.5% 3,160,000 Total outstanding Revenue Debt as of September 30, 2006 $45,885,000 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, 2006. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 58 Governmental YearActivities 2007$71,222 200865,930 200913,996 Total principal and interest151,148 less - Applicable interest(8,515) Total principal $142,632 MaturitiesSeries 2000 2010 205,000$ 2011 220,000 2012 230,000 2013 240,000 2014 255,000 2015 270,000 2016 285,000 2017 300,000 2018 315,000 2019 330,000 2020 350,000 3,000,000$ 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, 2006, the outstanding balance of the defeased bonds is $10,970,000. On May 18, 2006, the City issued $3,205,000 in Utility System Revenue & Refunding bonds with an average interest rate of 4.25% to advance refund $3,000,000 of outstanding Series 2000 Utility System Revenue bonds with average interest rates of 5.50%. 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 $127,896. and to obtain a net economic gain (difference between the present values of debt service payments on the old and new debt) of $94,328. 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: CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 59 7. 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 811 municipalities having the benefit plan administered by TMRS, an agent multiple-employer public employee retirement system. Each of the 811 municipalities have an annual, individual actuarial valuation performed. The following assumptions were used for the December 31, 2005 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, 2005 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 7%, and the City matching ratio is currently 2 to 1, both as adopted by the governing body of the City. Under the state law governing TMRS, the actuary annually determines the City contribution rate. This rate consists of the normal cost contribution rate and the prior service contribution rate, both of which are calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the currently accruing monetary credits due to the City matching percent, which are the obligation of the City as of an employee's retirement date, not at the time the employee's contributions are made. The normal cost contribution rate is the actuarially determined percent of payroll necessary to satisfy the obligation of the City to each CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 60 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, 2005 valuation is effective for rates beginning January 2007). The City’s total payroll in fiscal year 2006 was $17,066,535 and the City’s contributions were based on a payroll of $17,057,843. Both the City and the covered employees made the required contributions, amounting to $1,771,043 for the City and $1,181,566 for the employees. The City’s contribution amounted to 10.68% of the covered payroll for the calendar year. The employees’ contribution amounted to 7% of covered payroll. Schedule of Actuarial Liabilities and Funding Progress Actuarial Valuation Date 12/31/2005 Actuarial Value of Assets (A) $ 23,848,360 Actuarial Accrued Liability (B) $ 31,247,055 Percentage funded (C)=(A)/(B) 76.3% Unfunded (Over-funded) Actuarial Accrued Liability (UAAL) (D)=(B)-(A) $ 7,398,695 Annual Covered Payroll (E) $ 16,585,727* UAAL as a Percentage of Covered Payroll (D)/(E) 44.6% *Based on calendar year ending 12/31/05, 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 09/30/04 $ 1,183,700 $ 1,183,700 0 8.35 09/30/05 $ 1,312,070 $ 1,312,070 0 8.79 09/30/06 $ 1,771,043 $ 1,771,043 0 10.68 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, 2006 61 8. 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. 9. 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 $2,386,945 for the fiscal year ended September 30, 2006. 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, 2006 is $52.50 and the City paid a total of $1,672,256 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 $629,244 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 $770,662 for water under this agreement in 2005/06. (3) Colorado River Basin Water - This agreement, effective September 1, 2001 required BRA to make available to the City a total of 6,944 acre-feet of water per year. In June 2006, the City replaced the 6,944 acre-feet originating out of the LCRA basin with 10,000 acre-feet from the Brazos basin thru Lake Stillhouse Hollow. The City paid $272,350 under the original and amended agreements for 2005/06. 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 $31 million, including principal and interest, to be repaid annually through 2032. The City began paying its allocated costs related to the project in fiscal year 2002. The amount for fiscal year 2006 was $609,300. The following schedule reflects the City's obligation: CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 62 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 $204,063 as of September 30, 2006. (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 $284,227 as of September 30, 2006. (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 $284,227 as of September 30, 2006. 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 4.36 mgd, not to exceed 28% of the off-peak plant capacity. CTSUD will then pay prorata operating costs for all water utilized As of September 30, 2006 the City has transferred 4.36 mgd of capacity, with a value of $1,681,070. 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, 2006, 4,171 units have been completed. Year Ending September 30 Amount 2007$779,464 2008808,557 2009853,324 2010963,297 20111,365,598 2012-203223,353,825 Total$28,124,065 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 63 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. In May 2006, the City approved the Eighth Amendment to the Development Agreement with Del Webb. The Eighth Amendment set the build out at 7,500 age restricted units at Sun City. Additionally, it escalated the payment of “stranded costs” and addressed the water and wastewater capacity needed to serve the 2,500 age restricted units above the 5,000 units originally defined in the Seventh Amendment. The SIP fee for units 5,001 through 7,000 was also set in this agreement at $3,292.00 per unit. 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, 2006, 37 total permits were issued for this development and 318 units paid to date. 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, CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 64 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 $109,370 was recognized for 2006. As of September 30, 2006 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, 2006, 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, 2006, 58 homes had been completed for this development. PID assessment collection began in 2002. In 2006, PID assessments were $283,348. The developer was reimbursed $266,769 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, 2006, $10,555,000 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. 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 CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 65 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 2006 for the public utility improvement assessment. The public road assessment for Wolf Ranch was $1,151,977 including interest as of September 2006. 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 $226,185 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. 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. CITY OF GEORGETOWN, TEXAS NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 66 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 $4,930,358 for Governmental Fund Types and approximately $7,403,896 for Enterprise Funds. 10. DEFICIT FUND EQUITY At September 30, 2006, the Sanitation Fund had negative unrestricted net assets of $215,859. This deficit is due to the timing of a future debt issue to pay for current year expenses related to drainage maintenance on the old city landfill property. 11. SUBSEQUENT EVENTS Annexation of 8,909 acres of property was completed by the City in December 2006, in accordance with the City’s annexation plan. This annexation represents a 41% increase in land mass for the City. The key areas annexed include the State Highway 130 toll road, as well as, various infill locations. Infrastructure improvements, primarily wastewater and roads, for these areas will impact future capital costs and will be incorporated in the City’s capital planning program. These improvements will be funded through developer contributions, impact fees, and other long-range funding sources. In November 2006, the City entered into a 10 year tax abatement agreement with Citigroup, NA, Inc who is constructing of a $475 million data center within the City. The abatement will begin in tax year 2008 (fiscal year 2008/09). The Georgetown Economic Development Corporation (GEDCO) also entered into an agreement with Citicorp, NA to fund $1.5 million of offsite wastewater improvements as an incentive for the creation of 50 jobs. In November 2006, the City entered into a development agreement with ABG for development of a master planned 2,700 acre development in the southwest quadrant of the City. This development will include over 6,500 units. Infrastructure for the project is funded by the developer, who will be reimbursed on a per unit basis through the City’s San Gabriel South Fork defined area wastewater impact fee. In November 2006, the City created the Williams Drive Tax Increment Financing Zone (TIRZ) to fund improvements needed for redevelopment of the Williams Drive gateway area. A master plan for the area was developed in 2006, with implementation planned for future years. In November 2006, the City renewed its 1/4 cent sales tax option for street maintenance extending the tax thru March 31, 2011. CITY OF GEORGETOWN, TEXAS REQUIRED SUPPLEMENTARY INFORMATION – TEXAS MUNICIPAL RETIREMENT SYSTEM TREND DATA – LAST TEN FISCAL YEARS 67 UnfundedUAAL ActuarialActuarialActuarial Annualas a % of FiscalValue of Accrued LiabilityPercentageAccrued LiabilityCoveredCovered Year (1)Assets(AAL) (1)Funded(UAAL) (1)PayrollPayroll 19976,822,635$ 7,749,553$ 88.0%926,918$ 7,210,336$ 12.9% 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% 200623,848,36031,247,05576.3%7,398,69516,585,72744.6% 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 68 PCI Rating by Functional Class Arterial91.91 Collector88.38 Local91.00 Total90.87 Costs to Maintain System at Designated Level Estimated Maintenance Cost$2,288,034 Budgeted Maintenance Cost$861,640 Actual Maintenance Cost$558,084 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. 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 43 of the notes. The following is additional information for the City’s streets infrastructure for fiscal year 2006. This information is updated every three years therefore there will be no comparative data until 2008. 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 Texas Department of Transportation grant for a Selective Traffic Enforcement Project (STEP) related to overtime costs and the receipt and expenditure of seized 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. Downtown and Wolf Ranch Tax Increment Financing Districts (TIF) – to account for public improvements within an area that will generate private-sector development. The tax base is frozen at a pre-development level and the increases in taxes derived from increases in assessed valuations are to retire bonds originally issued for the development or to leverage future growth in the assigned areas. 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, 2006 FIREMAIN COURTBILLING AND LIBRARY STREET FEES DONATIONS RESTRICTED FACADE MAPPING PARKS ASSETS: Cash and cash equivalents$12,367$17,778$9,330$4,018$9,243$55,357 Investments60,37886,80145,55119,61845,125270,272 Accounts receivable: Sales tax Grants 6,385 Other 44,482103,539 TOTAL ASSETS $72,745$149,061$54,881$23,636$54,368$435,553 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable$167$6,908$998$3,198 Due to other funds Unearned revenue44,4826,250182,363 Total liabilities 16751,3907,248185,561 Fund Balance: Reserved for: Encumbrances22,74225,72079$6,250 Special programs49,83671,95147,554$23,63648,118249,992 Unreserved, designated for: Capital projects Unreserved Total fund balance72,57897,67147,63323,63654,368249,992 TOTAL LIABILITIES AND FUND BALANCE $72,745$149,061$54,881$23,636$54,368$435,553 SPECIAL REVENUE FUNDS CAPITAL TOTAL PROJECTS FUND2006 VILLAGE WOLF IMPROVEMENTDOWNTOWNRANCHSTREET POLICE STREETS TOURISM DISTRICT TIF TIF IMPROVEMENTS $14,526$266,369$39,814$3,021$$163,562$595,385 70,9111,300,505194,38714,750798,5702,906,868 258,83035,049$16,645310,524 15,229 21,614 147 148,168 $100,666$1,825,704$269,397$16,645$17,771$$962,132$3,982,559 $4,938$16,763$3,390$36,362 $15,73515,735 91041,259275,264 4,93816,76316,64544,649327,361 19,851$235,41748,13616,982$375,177 75,8771,590,287204,498$17,7712,379,520 900,501900,501 95,7281,825,704252,63417,771917,4833,655,198 $100,666$1,825,704$269,397$16,645$17,771$$962,132$3,982,559 SPECIAL REVENUE FUNDS CITY OF GEORGETOWN, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2006 FIREMAIN COURTBILLING ANDLIBRARYSTREET FEES DONATIONS RESTRICTED FAÇADE MAPPING PARKS REVENUES: Grants and entitlements$6,367$18,902 Hotel/Motel tax Property assessments Sales tax Court fees$61,973 Investment earnings3,566$6,2792,253$772$2,13911,813 Donations 1,30025,4681,000769 Mapping fees 36,084 Fire incident billings89,658 Other 16,345215,351 Total revenues 65,539 113,582 34,088 1,772 38,223246,835 EXPENDITURES: Culture - recreation37,65625,09296,656 Development 15,082 Fire services92,731 Highways and streets Police94,437 Capital outlay 28,112 Total expenditures94,43792,731 37,656 25,09215,082124,768 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (28,898) 20,851 (3,568) (23,320)23,141122,067 OTHER FINANCING SOURCES (USES): Sale of property Transfers in 15,00019,449 Transfers out (10,000)(52,942) Total other financing sources (uses) (10,000) (52,942) 15,00019,449 NET CHANGE IN FUND BALANCE(38,898)(32,091) (3,568) (8,320)23,141141,516 FUND BALANCES, Beginning of period 111,476129,76251,20131,95631,227108,476 FUND BALANCES, End of period $72,578$97,671$47,633$23,636$54,368$249,992 SPECIAL REVENUE FUNDS TOTAL 2006 VILLAGEWOLF IMPROVEMENTDOWNTOWNRANCHSTREET POLICE STREETS TOURISM DISTRICT TIF TIF IMPROVEMENTS $74,693 $99,962 $374,340 374,340 $109,370$17,771$45,870173,011 $1,520,250 1,520,250 61,973 2,91652,2516,1831,485$18,273107,930 25,574 54,111 36,084 89,658 24,94148,57015,31821,685342,210 128,1241,572,501 429,093126,17317,77145,87039,9582,859,529 352,571126,590638,565 15,082 92,731 3,205 3,205 56,703 151,140 42,532902,437 3,450976,531 99,235905,642 352,571126,5903,4501,877,254 28,889666,859 76,522(417)17,77145,87036,508982,275 31,10231,102 3,30544,571600,000682,325 (15,000)(45,870)(123,812) 3,305 29,571(45,870)631,102589,615 32,194666,859 106,093(417)17,771667,6101,571,890 63,5341,158,845146,541417249,8732,083,308 $95,728$1,825,704$252,634$$17,771$$917,483$3,655,198 PROJECTS FUND CAPITAL SPECIAL REVENUE FUNDS CITY OF GEORGETOWN, TEXAS COURT FEES SPECIAL REVENUE FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2006 ORIGINAL BUDGET FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Court fees$40,000$40,000$53,525$13,525 Investment earnings8008003,5662,766 Total revenues 40,80040,80057,09116,291 EXPENDITURES: Capital31,91573,91571,1152,800 Total expenditures 31,91573,915 71,115 2,800 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES8,885(33,115)(14,024)19,091 OTHER FINANCING SOURCES (USES): Transfers out (10,000)(10,000)(10,000) Total other financing sources (uses) (10,000)(10,000)(10,000) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(1,115)(43,115)(24,024)19,091 FUND BALANCE, Beginning of period 1,11543,11573,86030,745 FUND BALANCE - BUDGETARY BASIS, End of period$$49,836$49,836 Adjustments to GAAP: Reverse current year encumbrances22,742 FUND BALANCE - GAAP BASIS End of period $72,578 2006 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, 2006 ORIGINAL BUDGET FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO FINAL BUDGET REVENUES: Investment earnings$2,000$2,000$6,279 $4,279 Donations 1,0001,0001,300300 Fire incident billings121,500121,50094,903(26,597) Other 28,00028,00011,100(16,900) Total revenues 152,500152,500113,582(38,918) EXPENDITURES: Operations99,800119,550118,4511,099 Total expenditures 99,800119,550 118,451 1,099 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES52,70032,950(4,869)(37,819) OTHER FINANCING (USES): Transfers out (52,700)(52,950)(52,942)8 Total other financing (uses) (52,700)(52,950)(52,942)8 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(20,000)(57,811)(37,811) FUND BALANCE, Beginning of period 20,000129,762109,762 FUND BALANCE - BUDGETARY BASIS, End of period$$71,951 $71,951 Adjustments to GAAP: Reverse current year encumbrances25,720 FUND BALANCE - GAAP BASIS End of period $97,671 2006 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, 2006 ORIGINAL & FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Grants and entitlements$6,367$6,367 Investment earnings$7002,2531,553 Donations 20,00025,4685,468 Total revenues 20,70034,08813,388 EXPENDITURES: Personnel2,1272,127 Operations46,17035,54310,627 Total expenditures 48,29737,670 10,627 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(27,597)(3,582)24,015 FUND BALANCE, Beginning of period 27,59751,13623,539 FUND BALANCE - BUDGETARY BASIS, End of period$47,554$47,554 Adjustments to GAAP: Reverse current year encumbrances79 FUND BALANCE - GAAP BASIS End of period$47,633 2006 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, 2006 ORIGINAL BUDGET FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Investment earnings$100$100$772$672 Donations 2002001,000800 Total revenues 3003001,7721,472 EXPENDITURES: Operations17,68747,25625,09222,164 Total expenditures 17,68747,25625,092 22,164 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(17,387)(46,956)(23,320)23,636 OTHER FINANCING SOURCES: Transfers in 15,00015,00015,000 Total other financing sources 15,00015,00015,000 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES - BUDGETARY BASIS(2,387)(31,956)(8,320)23,636 FUND BALANCE, Beginning of period 31,95631,95631,956 FUND BALANCE - BUDGETARY BASIS, End of period$29,569$23,636$23,636 Adjustments to GAAP: Reverse current year encumbrances FUND BALANCE - GAAP BASIS End of period $23,636 2006 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, 2006 ORIGINAL & FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Investment earnings$188$2,139$1,951 Mapping fees 20,35036,08415,734 Other11,200(11,200) Total revenues 31,73838,2236,485 EXPENDITURES: Operations46,02821,33224,696 Total expenditures 46,02821,33224,696 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(14,290)16,89131,181 FUND BALANCE, Beginning of period 14,29031,22716,937 FUND BALANCE - BUDGETARY BASIS, End of period$48,118$48,118 Adjustments to GAAP: Reverse current year encumbrances6,250 FUND BALANCE - GAAP BASIS End of period$54,368 2006 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, 2006 2006 ORIGINAL BUDGET FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Grants and entitlements$$$18,902$18,902 Investment earnings2,3002,30011,8129,512 Donations 769769 Other 108,250113,250215,351102,101 Total revenues 110,550115,550246,834131,284 EXPENDITURES: Personnel18,90218,902 Operations227,791213,889102,977110,912 Total expenditures 227,791 232,791121,879110,912 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(117,241)(117,241)124,955242,196 OTHER FINANCING SOURCES: Transfers in 19,44919,44919,449 Total other financing sources 19,44919,44919,449 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(97,792)(97,792)144,404242,196 FUND BALANCE, Beginning of period 98,25798,257105,588 7,331 FUND BALANCE - BUDGETARY BASIS, End of period$465$465249,992$249,527 Adjustments to GAAP: Reverse current year encumbrances FUND BALANCE - GAAP BASIS End of period $249,992 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, 2006 ORIGINAL BUDGET FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Grants and entitlements$30,000$49,469$74,693$25,224 Investment earnings8408402,9152,075 Donations 25,20025,20025,574374 Other5,5005,50024,94119,441 Total revenues 61,54081,009128,12347,114 EXPENDITURES: Personnel47,69547,69521,46426,231 Operations26,40645,87532,16213,713 Capital outlay48,73848,7383,21445,524 Total expenditures 122,839142,30856,84085,468 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(61,299)(61,299)71,283132,582 OTHER FINANCING SOURCES (USES): Transfers in 15,88815,8883,305(12,583) Total other financing sources (uses) 15,88815,8883,305(12,583) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(45,411)(45,411)74,588119,999 FUND BALANCE, Beginning of period 68,12968,1291,271(66,858) FUND BALANCE - BUDGETARY BASIS, End of period$22,718$22,71875,859$53,141 Adjustments to GAAP: Reverse current year encumbrances 19,869 FUND BALANCE - GAAP BASIS End of period $95,728 2006 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, 2006 ORIGINAL BUDGET FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Sales tax$1,548,900$1,548,900$1,520,249$(28,651) Investment earnings2,5002,50052,25149,751 Total revenues 1,551,4001,551,4001,572,50021,100 EXPENDITURES: Capital outlay1,545,5001,800,500265,8161,534,684 Total expenditures 1,545,5001,800,500265,8161,534,684 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES5,900(249,100)1,306,6841,555,784 FUND BALANCE, Beginning of period 4,003259,003283,60324,600 FUND BALANCE - BUDGETARY BASIS, End of period$9,903$9,9031,590,287$1,580,384 Adjustments to GAAP: Reverse current year encumbrances 235,417 FUND BALANCE - GAAP BASIS End of period $1,825,704 2006 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, 2006 ORIGINAL BUDGET FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Hotel/Motel tax $270,000$270,000$374,340$104,340 Investment earnings3,9503,9506,1832,233 Other 32,83432,83448,57015,736 Total revenues 306,784306,784429,093122,309 EXPENDITURES: Personnel146,292142,272142,23933 Operations198,295212,315216,008(3,693) Total expenditures 344,587354,587358,247 (3,660) EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(37,803)(47,803)70,846118,649 OTHER FINANCING SOURCES (USES): Transfers in44,57144,57144,571 Transfers out (15,000)(15,000)(15,000) Total other financing sources (uses) 29,57129,57129,571 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(8,232)(18,232)100,417118,649 FUND BALANCE, Beginning of period 112,550112,550104,081(8,469) FUND BALANCE - BUDGETARY BASIS, End of period$104,318$94,318204,498$110,180 Adjustments to GAAP: Reverse current year encumbrances48,136 FUND BALANCE - GAAP BASIS End of period $252,634 2006 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, 2006 ORIGINAL & FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Property assessments$93,978$109,370$15,392 Investment earnings5001,485985 Other 31,69515,318(16,377) Total revenues 126,173126,173 EXPENDITURES: Operations126,590126,590 Total expenditures 126,590126,590 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(417)(417) FUND BALANCE, Beginning of period 417417 FUND BALANCE - BUDGETARY BASIS, End of period$$ Adjustments to GAAP: Reverse current year encumbrances FUND BALANCE - GAAP BASIS End of period$ 2006 CITY OF GEORGETOWN, TEXAS DOWNTOWN TIF SPECIAL REVENUE FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2006 ORIGINAL & FINAL BUDGET ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET REVENUES: Property assessments$18,429$17,771$(658) Investment earnings Other Total revenues 18,42917,771(658) EXPENDITURES: Capital 18,42918,429 Total expenditures 18,42918,429 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES17,77117,771 FUND BALANCE, Beginning of period FUND BALANCE - BUDGETARY BASIS, End of period$17,771$17,771 Adjustments to GAAP: Reverse current year encumbrances FUND BALANCE - GAAP BASIS End of period$17,771 2006 CITY OF GEORGETOWN, TEXAS WOLF RANCH TIF SPECIAL REVENUE FUND SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2006 ORIGINAL BUDGET FINAL BUDGET ACTUAL BUDGETAR Y BASIS VARIANC E TO BUDGET REVENUES: Property assessments$47,570$47,570$45,870$(1,700) Investment earnings Other Total revenues 47,57047,57045,870(1,700) EXPENDITURES: Operations 1,1001,100 Total expenditures 1,1001,100 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES47,57046,47045,870(600) OTHER FINANCING SOURCES (USES): Transfers out (47,570)(46,470)(45,870)600 Total other financing sources (uses) (47,570)(46,470)(45,870)600 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS FUND BALANCE, Beginning of period FUND BALANCE - BUDGETARY BASIS, End of period$$$ Adjustments to GAAP: Reverse current year encumbrances FUND BALANCE - GAAP BASIS End of period $ 2006 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, 2006 VARIANCE REVENUES: Investment earnings$2,000$2,000$18,273$16,273 Donations00 Other16,80016,80021,8905,090 Total revenues18,80018,80040,16321,363 EXPENDITURES: Capital outlay100,00020,43279,568 Bond issuance cost Total expenditures100,00020,43279,568 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES18,800(81,200)19,731100,931 OTHER FINANCING SOURCES: Bond proceeds Sale of Property 31,10231,102 Transfers in100,000600,000500,000 Total other financing sources 100,000631,102 531,102 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES - BUDGETARY BASIS 18,80018,800650,833632,033 FUND BALANCES, Beginning of period203,768203,768249,66845,900 FUND BALANCES - BUDGETARY BASIS, End of Period $222,568$222,568900,501$677,933 Adjustments to GAAP: Reverse current year encumbrances16,982 FUND BALANCES - GAAP BASIS, End of period $917,483 FINAL BUDGET ACTUAL BUDGETARY BASIS ORIGINAL BUDGET 2006 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, 2006 AND 2005 20062005 ASSETS: Cash and cash equivalents$1,469,606$1,789,388 Investments7,174,5085,982,547 Accounts receivable (net of allowance for uncollectible accounts): Delinquent taxes 168,812167,675 Sales taxes 1,155,127887,901 Other 796,223444,544 Prepaid items 204,750 Inventories1,911897 Long-term note receivable895,6861,193,586 TOTAL ASSETS $11,661,873$10,671,288 LIABILITIES AND FUND BALANCE: Liabilities: Accounts payable$737,742$1,259,787 Unearned revenue 1,967,8171,940,547 Total liabilities 2,705,5593,200,334 Fund Balance: Reserved for: Encumbrances1,036,847975,842 Inventories1,911897 Prepaid items 204,750 Unreserved7,917,5566,289,465 Total fund balance8,956,3147,470,954 TOTAL LIABILITIES AND FUND BALANCE $11,661,873$10,671,288 CITY OF GEORGETOWN, TEXAS GENERAL FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FISCAL YEARS ENDED SEPTEMBER 30, 2006 AND 2005 20062005 REVENUES: Property taxes: Current$5,460,756 $5,470,721 Delinquent50,657 107,145 Penalties and interest63,087 67,976 Other158,205 147,427 Sales tax6,402,041 4,823,378 Franchise taxes2,209,235 1,942,246 Licenses and permits1,723,082 1,266,295 Charges for service941,718 823,980 Fines846,010 714,596 Donations and grants14,790 1,155 Investment income394,992 166,095 Other income555,198 412,288 Total revenues 18,819,77115,943,302 EXPENDITURES: Current: Culture - recreation4,330,3373,808,022 Development2,112,8451,933,076 Fire services4,078,7963,518,597 General government2,152,6671,802,752 Highways and streets1,758,2891,691,876 Police6,918,9485,603,521 Total expenditures 21,351,88218,357,844 EXCESS EXPENDITURES OVER REVENUES (2,532,111)(2,414,542) OTHER FINANCING SOURCES (USES): Transfers in 5,749,5974,804,605 Transfers out (1,732,126)(355,914) Total other financing sources (uses) 4,017,4714,448,691 EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES)1,485,3602,034,149 FUND BALANCES, Beginning of period7,470,9545,436,805 FUND BALANCES, End of period $8,956,314$7,470,954 CITY OF GEORGETOWN, TEXAS GEORGETOWN TRANSPORTATION ENHANCEMENT CORPORATION COMPARATIVE BALANCE SHEETS AS OF SEPTEMBER 30, 2006 AND 2005 20062005 ASSETS: Cash and cash equivalents Investments$9,063,418$8,865,547 Accounts receivable: Sales Tax 508,510438,997 Other 653,964 TOTAL ASSETS $9,571,928 $9,958,508 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable$216,878$94,942 Due to other funds101,585 Total liabilities 318,46394,942 Fund Balance: Reserved for: Encumbrances2,901,9052,473,528 Capital projects6,351,5607,390,038 Total fund balance9,253,4659,863,566 TOTAL LIABILITIES AND FUND BALANCE $9,571,928 $9,958,508 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, 2006 (WITH COMPARATIVE FOR 2005) 2006 ACTUAL2005 ACTUAL ORIGINALFINALBUDGETARY VARIANCEBUDGETARY BUDGETBUDGETBASIS TO BUDGETBASIS REVENUES: TAXES: Property tax: Current$5,542,765$5,542,765$5,460,756$(82,009)$5,470,721 Delinquent 32,00032,00050,65718,657107,145 Penalties and interest 30,00030,00063,08733,08767,976 Total property tax 5,604,7655,604,7655,574,500(30,265)5,645,842 Sales tax 6,125,0006,168,0006,402,041234,0414,823,378 Franchise taxes 2,003,0002,003,0002,209,235206,2351,942,246 Other 170,600170,600158,205(12,395)147,427 Total taxes 13,903,36513,946,36514,343,981397,61612,558,893 LICENSES AND PERMITS: Permits and inspection fees 1,096,7351,096,7351,757,240660,5051,246,527 Licenses 17,26517,26510,293(6,972)19,768 Total licenses and permits 1,114,0001,114,0001,767,533653,5331,266,295 CHARGES FOR SERVICES: Library 42,00042,00046,6724,67245,602 Animal services35,00035,00035,65065038,924 Parks and recreation630,330630,330729,48299,152653,957 Fire protection 60,00060,00060,00060,000 Police support 27,50027,50025,465(2,035)25,497 Total charges for services 794,830794,830897,269102,439823,980 FINES AND FORFEITURES 725,250765,250846,01080,760714,596 INTEREST AND OTHER: Investment income 172,000172,000387,605215,605167,426 Rent 60,00060,00016,030(43,970)70,934 Miscellaneous 350,300431,893634,578202,685525,129 Total interest and other 582,300663,8931,038,213374,320763,489 TOTAL REVENUES17,119,74517,284,33818,893,0061,608,66816,127,253 EXPENDITURES: CULTURE - RECREATION: Parks: Personnel 863,099855,595846,2639,332749,884 Operations 647,263688,663665,30623,357615,958 Capital outlay 89,90090,08090,070107,000 Total parks 1,600,2621,634,3381,601,63932,6991,372,842 Recreation: Personnel 566,689583,661561,86621,795521,551 Operations 226,110227,190227,1819209,446 Capital 17,50017,50016,542958 Total recreation 810,299828,351805,58922,762730,997 Recreation programs: Personnel 380,394382,339331,82350,516279,991 Operations 460,859473,319473,28732442,713 Capital outlay 15,000Total recreation 841,253855,658805,11050,548737,704 (continued) 2006 ACTUAL2005 ACTUAL ORIGINALFINALBUDGETARY VARIANCEBUDGETARY BUDGETBUDGETBASIS TO BUDGETBASIS Library: Personnel $718,320 $717,357 $714,349 $3,008 $653,323 Operations 320,062332,662332,6539248,802 Capital outlay 90,25091,79091,782890,265Total library1,128,6321,141,8091,138,7843,025992,390 TOTAL CULTURE - RECREATION4,380,4464,460,1564,351,122109,0343,833,933 DEVELOPMENT:Current planning: Personnel626,989582,599531,65250,947536,752 Operations 227,564271,004271,0031198,770 Capital outlay6,7406,7337Total current planning854,553860,343809,38850,955735,522 Long range planning: Personnel191,572204,664204,6568168,720 Operations 218,934223,524223,521342,801Total long range planning410,506428,188428,17711211,521 Inspection services: Personnel 617,025620,174616,9863,188567,768 Operations 128,445121,405121,399698,917 Total inspection services745,470741,579738,3853,194666,685 Code enforcement: Personnel286,345286,965260,23426,731294,551 Operations 72,93776,50776,502599,264Total fire prevention359,282363,472336,73626,736393,815 TOTAL DEVELOPMENT 2,369,8112,393,5822,312,68680,8962,007,543 FIRE SERVICES:Fire administration: Personnel 231,021234,625231,4613,164216,426 Operations 246,193246,193243,3462,847190,181Total fire administration477,214480,818474,8076,011406,607 Fire operations: Personnel 3,322,9973,337,8813,156,323181,5582,706,278 Operations 463,883463,883456,6357,248407,110 Capital outlay 15,00015,00015,000Total fire operations3,801,8803,816,7643,627,958188,8063,113,388 TOTAL FIRE SERVICES 4,279,094 4,297,5824,102,765194,8173,519,995 GENERAL GOVERNMENT: General government: Operations 1,351,8511,308,8681,148,126160,742824,609 Total general government 1,351,8511,308,8681,148,126160,742824,609 City council: Personnel89,55793,75191,2662,48582,474 Operations 182,079182,079156,67925,400181,240 Total city council 271,636275,830247,94527,885263,714 (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, 2006 (WITH COMPARATIVE FOR 2005) 2006 ACTUAL2005 ACTUAL ORIGINALFINALBUDGETARY VARIANCEBUDGETARY BUDGETBUDGETBASIS TO BUDGETBASIS City manager's office: Personnel $546,645$550,344$541,831$8,513$482,143 Operations 233,536233,536229,4584,078156,558 Capital 150,000150,00098,89251,10873,723 Total city manager's office930,181933,880870,18163,699712,424 TOTAL GENERAL GOVERNMENT 2,553,6682,518,5782,266,252252,3261,800,747 HIGHWAYS AND STREETS: Streets operating: Personnel 672,502693,205587,346105,859586,886 Operations 590,557653,917653,9161523,810 Capital outlay825,000261,640255,3696,271835,602 Total streets operating2,088,0591,608,7621,496,631112,1311,946,298 TOTAL HIGHWAYS AND STREETS2,088,0591,608,7621,496,631112,1311,946,298 POLICE SERVICES: Organization and administration: Personnel 593,237597,415596,835 580 556,990 Operations 344,747367,807367,8025325,032 Capital outlay16,50092,53092,526418,119 Total organization and administration954,4841,057,7521,057,163589900,141 Support services bureau: Personnel 1,899,7531,560,0601,429,343130,7171,200,281 Operations 201,556198,686184,85113,835154,611 Capital outlay 067,97039,55928,41161,200 Total support services bureau2,101,3091,826,7161,653,753172,9631,416,092 Field operations bureau: Personnel 2,665,4472,912,2442,901,06011,1842,279,498 Operations 514,905477,405477,057348454,227 Capital outlay 12,60015,02015,01282,024 Total field operations bureau3,192,9523,404,6693,393,12911,5402,735,749 Animal services: Personnel331,733344,057344,0543286,967 Operations 110,959122,629122,6227101,238Total animal services442,692466,686466,67610388,205 Municipal court: Personnel 275,565266,567248,81017,757215,206 Operations 76,714129,754129,747769,904Total municipal court 352,279396,321378,55717,764285,110 TOTAL POLICE SERVICES7,043,7167,152,1446,949,278202,8665,725,297 (continued) 2006 ACTUAL2005 ACTUAL ORIGINALFINALBUDGETARY VARIANCEBUDGETARY BUDGETBUDGETBASIS TO BUDGETBASIS TOTAL EXPENDITURES$22,714,794$22,430,804$21,478,734$952,070$18,833,813 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(5,595,049)(5,146,466)(2,585,728)2,560,738(2,706,560) OTHER FINANCING SOURCES (USES): Transfers in5,104,8705,106,7875,749,597642,8104,804,605 Transfers out(169,708)(1,744,708)(1,732,126)12,582(355,914) Total other financing sources (uses)4,935,1623,362,0794,017,471655,3924,448,691 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(659,887)(1,784,387)1,431,7433,216,1301,742,131 FUND BALANCE - BUDGETARY BASIS, Beginning of period5,360,276 6,484,776 6,487,0992,3234,744,968 FUND BALANCE - BUDGETARY BASIS, End of period $4,700,389$4,700,3897,918,842$3,218,4536,487,099 Adjustments to GAAP: Reverse current year encumbrances1,036,847975,842 Record net unrealized gain on investments6258,013 FUND BALANCE - GAAP BASIS, End of period $8,956,314$7,470,954 CITY OF GEORGETOWN, TEXAS GEORGETOWN TRANSPORTATION ENHANCEMENT CORPORATION COMPARATIVE BALANCE SHEETS AS OF SEPTEMBER 30, 2006 AND 2005 20062005 ASSETS: Cash and cash equivalents Investments$9,063,418$8,865,547 Accounts receivable: Sales Tax 508,510438,997 Other 653,964 TOTAL ASSETS $9,571,928 $9,958,508 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable$216,878$94,942 Due to other funds101,585 Total liabilities 318,46394,942 Fund Balance: Reserved for: Encumbrances2,901,9052,473,528 Capital projects6,351,5607,390,038 Total fund balance9,253,4659,863,566 TOTAL LIABILITIES AND FUND BALANCE $9,571,928 $9,958,508 CITY OF GEORGETOWN, TEXAS GEORGETOWN TRANSPORTATION ENHANCEMENT CORPORATION COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FISCAL YEAR ENDED SEPTEMBER 30, 2006 AND 2005 20062005 REVENUES: Sales tax $3,040,499$2,448,521 Development contributions512,6171,347,125 Investment earnings342,520171,319 Total revenues 3,895,6363,966,965 EXPENDITURES: General government 149,750184,294 Capital outlay 4,467,3716,774,627 Total expenditures 4,617,1216,958,921 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (721,485)(2,991,956) OTHER FINANCING SOURCES (USES): Bond proceeds1,235,0004,175,000 Interest and fiscal charges (35,000)(100,000) Transfers Out (1,088,616)(1,072,849) Total other financing sources (uses) 111,3843,002,151 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDI- TURES AND OTHER FINANCING (USES)(610,101)10,195 FUND BALANCES, Beginning of period 9,863,566 9,853,371 FUND BALANCES, End of period $9,253,465$9,863,566 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, 2006 (WITH COMPARATIVE FOR 2005) ORIGINAL & FINAL BUDGET 2006 ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET 2005 ACTUAL BUDGETARY BASIS REVENUES: Sales tax$3,036,300$3,040,499$4,199$2,448,521 Franchise fees Court fees Investment earnings65,000341,001276,001167,467 Other 450,042493,65643,6141,347,125 Total revenues 3,551,3423,875,156323,8143,963,113 EXPENDITURES: Personnel Operations280,200156,965123,235214,906 Capital outlay10,645,0754,869,5935,775,4828,802,855 Total expenditures 10,925,275 5,026,5585,898,717 9,017,761 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(7,373,933)(1,151,402)6,222,531(5,054,648) Unearned revenue OTHER FINANCING SOURCES (USES): Bond proceeds2,920,0001,235,000(1,685,000)4,175,000 Bond issuance costs(51,600)(35,000)16,600(100,000) Transfers out(1,332,200)(1,088,616)243,584(1,061,649) Total other financing sources (uses) 1,536,200111,384(1,424,816)3,013,351 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(5,837,733)(1,040,018)4,797,715(2,041,297) FUND BALANCES, Beginning of period 6,733,9297,393,065659,1369,434,362 FUND BALANCES - BUDGETARY BASIS, End of period$896,1966,353,047$5,456,8517,393,065 Adjustments to GAAP: Reverse current year encumbrances2,901,9052,473,528 Record net unrealized loss on investment(1,487)(3,027) FUND BALANCES - GAAP BASIS End of period$9,253,465$9,863,566 CITY OF GEORGETOWN, TEXAS DEBT SERVICE FUND COMPARATIVE BALANCE SHEETS SEPTEMBER 30, 2006 AND 2005 20062005 ASSETS: Investments$871,559$504,150 Accounts receivable: Delinquent taxes 101,51588,604 TOTAL ASSETS $973,074$592,754 LIABILITIES AND FUND BALANCE: Liabilities: Deferred Revenue$94,406$84,603 Total liabilities 94,40684,603 Fund Balances: Reserved for debt service878,668508,151 TOTAL LIABILITIES AND FUND BALANCES $973,074$592,754 CITY OF GEORGETOWN, TEXAS DEBT SERVICE FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FISCAL YEARS ENDED SEPTEMBER 30, 2006 AND 2005 20062005 REVENUES: Ad valorem taxes: Current$3,447,998$2,708,365 Delinquent 25,41853,943 Total ad valorem taxes 3,473,4162,762,308 Investment earnings and other 90,17847,098 Total revenues 3,563,5942,809,406 EXPENDITURES: Principal retirement 2,387,0352,500,901 Interest and fiscal charges 2,072,7521,670,424 Total expenditures4,459,7874,171,325 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES(896,193)(1,361,919) OTHER FINANCING SOURCES (USES): Bond Proceeds7,830,0009,180,166 Payment to refunding escrow agent(7,736,794)(9,243,904) Transfers in1,173,5041,165,372 Total other financing sources (uses)1,266,7101,101,634 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES)370,517(260,285) FUND BALANCES, Beginning of period 508,151768,436 FUND BALANCES, End of period $878,668$508,151 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, 2006 (WITH COMPARATIVE FOR 2005) ORIGINAL BUDGET FINAL BUDGET 2006 ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET 2005 ACTUAL BUDGETARY BASIS REVENUES: Ad valorem taxes$3,488,439$3,488,439$3,473,416$(15,023)$2,762,308 Investment earnings15,00015,00090,17875,17847,318 Other Total revenues 3,503,4393,503,4393,563,59460,1552,809,626 OTHER FINANCING SOURCES (USES): Principal, interest and fiscal charges(4,839,117)(4,932,317)(4,459,787)472,530(4,171,325) Bond proceeds7,830,0007,830,0009,180,165 Payment to refunding escrow agent(7,736,800)(7,736,794)6(9,243,904) Transfers in1,416,8461,416,8461,173,504(243,342)1,165,372 Total other financing sources (uses) (3,422,271)(3,422,271)(3,193,077)229,194(3,069,692) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING SOURCES - BUDGETARY BAS81,16881,168370,517289,349(260,066) FUND BALANCE, Beginning of period 368,273368,273508,151139,878768,217 FUND BALANCE - BUDGETARY BASIS, End of period$449,441$449,441 878,668$429,227 508,151 Adjustments to GAAP: Reverse current year encumbrances FUND BALANCE - GAAP BASIS End of period $878,668$508,151 CITY OF GEORGETOWN, TEXAS GENERAL CAPITAL PROJECTS COMPARATIVE BALANCE SHEET AS OF SEPTEMBER 30, 2006 AND 2005 20062005 ASSETS: Cash and cash equivalents$2,352,772$63,766 Investments7,015,3816,655,788 Accounts Receivable7,865 TOTAL ASSETS $9,376,018$6,719,554 LIABILITIES AND FUND BALANCES: Liabilities: Accounts payable$2,171,105$159,295 Deferred revenue Due to other funds345,093 Total liabilities2,171,105504,388 Fund Balances: Reserved for encumbrances4,678,9071,465,671 Reserved for capital projects2,526,0064,749,495 Total fund balances7,204,9136,215,166 TOTAL LIABILITIES AND FUND BALANCES $9,376,018$6,719,554 CITY OF GEORGETOWN, TEXAS GENERAL CAPITAL PROJECTS COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FISCAL YEAR ENDED SEPTEMBER 30, 2006 AND 2005 REVENUES: Investment earnings $463,086$72,991 Donations Other18,460110,760 Total revenues481,546183,751 EXPENDITURES: Capital outlay10,506,2403,812,058 Bond issuance cost Total expenditures10,506,2403,812,058 DEFICIENCY OF REVENUES OVER EXPENDITURES(10,024,694)(3,628,307) OTHER FINANCING SOURCES (USES) Bond proceeds11,235,0009,030,000 Interest and fiscal charges(200,094)(127,225) Sale of property 896,113 Tranfers in975,000313,165 Transfers out(995,465)(1,124,326) Total other financing sources (uses)11,014,4418,987,727 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES)989,7475,359,420 FUND BALANCES, Beginning of period6,215,166855,746 FUND BALANCES, End of period $7,204,913$6,215,166 20062005 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, 2006 (WITH COMPARATIVE FOR 2005) ORIGINAL BUDGET FINAL BUDGET 2006 ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET 2005 ACTUAL BUDGETARY BASIS REVENUES: Investment earnings$20,000$20,000$458,325$438,325$65,784 Donations 0 Other110,760173,39018,460(154,930)110,760 Total revenues130,760193,390476,785283,395176,544 EXPENDITURES: Capital outlay13,555,26315,499,58813,719,9331,779,6554,636,396 Bond issuance cost426,600426,600200,094226,506186,440 Total expenditures13,981,86315,926,18813,920,0272,006,1614,822,836 DEFICIENCY OF REVENUES OVER EXPENDITURES(13,851,103)(15,732,798)(13,443,242)2,289,556(4,646,292) OTHER FINANCING SOURCES (USES): Bond proceeds11,090,60011,450,60011,235,000(215,600)9,030,000 Sale of Property 896,112 Transfers in 975,000975,000323,738 Tranfers out(591,400) (995,465) (995,465) (1,124,327) Total other financing sources (uses) 10,499,200 11,430,13511,214,535(215,600)9,125,523 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING (USES) - BUDGETARY BASIS(3,351,903)(4,302,663)(2,228,707)2,073,9564,479,231 FUND BALANCES, Beginning of period3,570,346 4,521,106 4,749,495228,389270,264 FUND BALANCES - BUDGETARY BASIS, End of Period $218,443$218,4432,520,788$2,302,3454,749,495 Adjustments to GAAP: Reverse voided POs 459 Reverse Mkt to Mkt Adjs 4,759 Reverse current year encumbrances4,678,9071,465,671 FUND BALANCES - GAAP BASIS, End of period$7,204,913$6,215,166 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, 2006 Business-type Activities Enterprise Funds STORMWATERTOTAL AIRPORTSANITATIONDRAINAGENONMAJOR FUND FUND FUND ENTERPRISE FUNDS ASSETS: Current Assets: Cash and cash equivalents$128,729$103,115$231,844 Cash and cash equivalents - Restricted 443,376443,376 Investments628,502503,5531,132,055 Accounts receivable: Services (net of allowance for uncollectibles)141,855$458,902216,469817,226 Other63,08363,083 Inventories24,32724,327 Total current assets 986,496458,9021,266,5132,711,911 Noncurrent Assets: Deferred charges - bond issuance costs63,29684,188147,484 Capital assets: Land and land rights981,500981,500 Distribution system 14,622,48414,622,484 Buildings and improvements7,597,1877,597,187 Machinery, furniture and equipment127,57752,00014,050193,627 Construction in progress589,910124,292714,202 Less accumulated depreciation (4,734,698)(52,000)(1,333,257)(6,119,955) Total capital assets (net of accumulated depreciation)4,561,47613,427,56917,989,045 Total noncurrent assets 4,624,77213,511,75718,136,529 TOTAL ASSETS $5,611,268$458,902$14,778,270$20,848,440 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable$177,719$252,414$20,630$450,763 Compensated absence11,92014,32626,246 Due to other funds422,347422,347 Current portion of long-term debt117,375137,034254,409 Accrued interest 10,98815,22226,210 Total current liabilities 318,002674,761187,2121,179,975 Noncurrent liabilities: Compensated absence25,86725,05250,919 Long-term debt1,508,4842,502,5414,011,025 Total noncurrent liabilities1,534,3512,527,5934,061,944 Total liabilities 1,852,353674,7612,714,8055,241,919 Net Assets: Invested in capital assets (net of related debt)2,935,61710,787,99413,723,611 Unrestricted823,298(215,859)1,275,4711,882,910 Total net assets3,758,915(215,859)12,063,46515,606,521 TOTAL LIABILITIES AND NET ASSETS $5,611,268$458,902$14,778,270$20,848,440 CITY OF GEORGETOWN, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS NONMAJOR ENTERPRISE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2006 Business-type Activities Enterprise Funds STORMWATERTOTAL AIRPORTSANITATIONDRAINAGENONMAJOR FUND FUND FUND ENTERPRISE FUNDS OPERATING REVENUES: Waste $3,397,255 $3,397,255 Other$2,595,764 49,311$1,716,0664,361,141 Total operating revenues2,595,7643,446,5661,716,0667,758,396 OPERATING EXPENSES: Depreciation402,202 371,715773,917 Utility contracts 3,519,487 3,519,487 Other2,273,172 864,7493,137,921 Total operating expenses2,675,3743,519,4871,236,4647,431,325 NET OPERATING INCOME (LOSS)(79,610)(72,921)479,602327,071 NONOPERATING REVENUES (EXPENSES): Investment earnings31,70141,35373,054 Donations and grants389,988 389,988 Interest and fiscal charges(78,574)(133,803)(212,377) Other52,0318,50060,531 Total nonoperating revenues (expenses)395,146 (83,950)311,196 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS315,536(72,921)395,652638,267 CONTRIBUTIONS AND TRANSFERS: Capital contributions 4,508,7184,508,718 Transfer in562 562 Transfers out (275,474)(137,102)(412,576) Total contributions and transfers 562(275,474)4,371,6164,096,704 CHANGE IN NET ASSETS316,098(348,395)4,767,2684,734,971 TOTAL NET ASSETS - beginning3,442,817132,5367,296,19710,871,550 TOTAL NET ASSETS - ending $3,758,915$(215,859)$12,063,465$15,606,521 CITY OF GEORGETOWN, TEXAS COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2006 Business-type Activities Enterprise Funds STORMWATERTOTAL AIRPORTSANITATIONDRAINAGENONMAJOR FUND FUND FUND ENTERPRISE FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers$2,678,480$3,408,211$1,711,337$7,798,028 Payments to suppliers(2,055,510)(3,438,111)(602,974)(6,096,595) Franchise fees (62,612)(31,082)(93,694) Payments to employees for services(224,793)(240,025)(464,818) Net cash provided by (used for) operating activities398,177(92,512)837,2561,142,921 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in 562562 Transfers out (275,474)(137,102)(412,576) Payments from (to) other funds 367,986367,986 Net cash provided by (used for) noncapital financing activities 56292,512(137,102)(44,028) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITES: Acquisition of capital assets(456,414)(249,067)(705,481) Donations and grants389,988389,988 Principal paid on revenue and certificates of obligation bonds(113,680)(130,272)(243,952) Interest paid on revenue and certificates of obligation bonds(74,306)(127,663)(201,969) Net cash used for capital and related financing activities(254,412)(507,002)(761,414) CASH FLOWS FROM INVESTING ACTIVITIES: Interest received31,70141,35373,054 Change in temporary investments(180,976)(202,538)(383,514) Net cash provided by (used for) investing activities (149,275)(161,185)(310,460) Net increase (decrease) in cash and cash equivalents(4,948)31,96727,019 Cash and cash equivalents at beginning of year133,677514,524648,201 Cash and cash equivalents at end of year 128,729 546,491 675,220 Classified as: Current assets128,729103,115231,844 Restricted assets 443,376443,376 Total $128,729 $$546,491 $675,220 Non-cash disclosure Developer contributions $4,508,718$4,508,718 (continued) CITY OF GEORGETOWN, TEXAS COMBINING STATEMENT OF CASH FLOWS (CONTINUED) NONMAJOR ENTERPRISE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2006 Business-type Activities Enterprise Funds STORMWATERTOTAL AIRPORTSANITATIONDRAINAGENONMAJOR FUND FUND FUND ENTERPRISE FUNDS OPERATING INCOME (LOSS)$(79,610)$(72,921)$479,602$327,071 Adjustments to reconcile operating income (loss) to cash provided by (used in) operating activities: Depreciation402,202371,715773,917 Other income52,0318,50060,531 Bad debt expense 8462931,139 Decrease (increase) in inventories19,06319,063 Decrease (increase) in accounts receivable30,685(39,201)(13,522)(22,038) Increase (decrease) in accounts payable(25,579)18,764(6,150)(12,965) Increase (decrease) in compensated absences payable(615)(3,182)(3,797) Net cash provided by (used in) operating activities$398,177$(92,512)$837,256$1,142,921 INTERNAL SERVICE FUNDS AS OF SEPTEMBER 30, 2006 JOINT SERVICESTOTALS FUND 2006 ASSETS: Current: Cash and cash equivalents$104,155$62,775$17,227$35,491$219,648 Investments508,522306,48984,111173,2821,072,404 Prepaid expense8102,4963,306 Accounts receivable391132,626133,017 Inventories255,592255,592 Total current assets613,068758,292103,834208,7731,683,967 Property and equipment: Land and land rights214,065214,065 Buildings and improvements38,145813,681428,0601,279,886 Machinery, furniture and equipment 11,910,5331,013,867393,0042,098,77315,416,177 Total property and equipment cost 11,948,6782,041,613821,0642,098,77316,910,128 Less accumulated depreciation(6,282,183)(1,797,512)(518,873)(1,502,944)(10,101,512) Net property and equipment 5,666,495244,101302,191595,8296,808,616 TOTAL ASSETS $6,279,563$1,002,393$406,025$804,602$8,492,583 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable$25,910$511,927$31,518$58,043$627,398 Compensated absence6,14716,53425,72648,407 Total current liabilities32,057511,92748,05283,769675,805 Long term liabilities: Compensated absence10,09937,26350,34397,705 Total liabilities42,156511,92785,315134,112773,510 Net Assets: Invested in capital assets (net of related debt)5,666,495244,101302,191143,7196,356,506 Unrestricted570,912246,36518,519526,7711,362,567 Total net assets6,237,407490,466320,710670,4907,719,073 TOTAL LIABILITIES AND NET ASSETS $6,279,563$1,002,393$406,025$804,602$8,492,583 FUND FUND FACILITIES MAINTENANCE FUND CITY OF GEORGETOWN, TEXAS INFORMATION SERVICES FLEET MANAGEMENT COMBINING STATEMENT OF NET ASSETS CITY OF GEORGETOWN, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2006 FLEETJOINTFACILITIESINFORMATION MANAGEMENT SERVICESMAINTENANCE SERVICES FUND FUND FUND FUND 2006 OPERATING REVENUES - Charges for services $1,228,179$5,454,437$877,046$1,436,749$8,996,411 OPERATING EXPENSES: Administration 808,110808,110 Accounting 550,245550,245 City wide HR services398,654398,654 Customer service 129,168129,168 Economic development administration355,441355,441 Employee and organizational services390,569390,569 Facilities maintenance contracts 461,146461,146 Facilities maintenance services 369,226369,226 Finance and administration419,311419,311 Fleet management operations248,509248,509 Information resources 752,462752,462 Information resources capital replacement & contracts 985,305985,305 Joint services contracts579,175579,175 Legal services 428,421428,421 Purchasing and properties329,871329,871 Service center648,574648,574 Systems engineering675,549675,549 Utility office 853,907853,907 Depreciation1,075,4997,20458,454105,7771,246,934 Total operating expenses 1,972,5825,925,625888,8261,843,54410,630,577 NET OPERATING INCOME (LOSS)(744,403)(471,188)(11,780)(406,795)(1,634,166) NONOPERATING REVENUES (EXPENSES): Investment earnings41,30428,96018,88923,377112,530 Loss on sale of assets(449,932)(449,932) Other99,360121,61954,692275,671 Total nonoperating revenues (expenses)(309,268)150,57918,88978,069(61,731) INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS (1,053,671)(320,609)7,109(328,726)(1,695,897) CONTRIBUTIONS AND TRANSFERS: Capital contributions146,440146,440 Transfers in940,934380,000277381,4711,702,682 Transfers out(2,195)(77,400)(1,400)(31,946)(112,941) Total contributions and transfers1,085,179302,600(1,123)349,5251,736,181 CHANGE IN NET ASSETS 31,508(18,009)5,98620,79940,284 NET ASSETS, Beginning of period6,205,899508,475314,724649,6917,678,789 NET ASSETS, End of period $6,237,407$490,466$320,710$670,490$7,719,073 TOTAL CITY OF GEORGETOWN, TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2006 FLEETJOINTFACILITIESINFORMATION MANAGEMENTSERVICESMAINTENANCESERVICESTOTALS FUND FUND FUND FUND 2006 CASH FLOWS FROM OPERATING ACTIVITIES: Department contributions$1,229,325$5,415,924$877,046$1,436,749$8,959,044 Payments to suppliers(555,266)(2,283,320)(481,287)(1,043,195)(4,363,068) Payments to employees for services(256,834)(3,405,736)(290,827)(626,988)(4,580,385) Net cash provided by (used for) operating activities 417,225(273,132)104,932(233,434)15,591 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in940,934380,000277381,4711,702,682 Transfers out(2,195)(77,400)(1,400)(31,946)(112,941) Net cash provided by (used for) noncapital financing activities 938,739302,600(1,123)349,5251,589,741 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITES: Acquisition of capital assets(1,476,645)(81,056)(50,863)(1,608,564) Net cash provided by (used for) capital and related financing activities (1,476,645)(81,056)(50,863)(1,608,564) CASH FLOWS FROM INVESTING ACTIVITIES: Interest received41,30428,96018,88923,377112,530 Change in temporary investments24,360(67,145)(38,145)(80,753)(161,683) Net cash provided by (used for) investing activities 65,664(38,185)(19,256)(57,376)(49,153) Net increase (decrease) in cash (55,017)(8,717)3,4977,852(52,385) Cash and cash equivalents at beginning of year159,17371,49213,73027,639272,034 Cash and cash equivalents at end of year 104,156 62,775 17,227 35,491 219,649 Classified as: Current assets104,15562,77517,22735,491219,648 Total $104,155 $62,775 $17,227 $35,491 $219,648 Non-cash disclosure Equity transfer$146,440 $146,440 (continued) CITY OF GEORGETOWN, TEXAS STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS (CONTINUED) RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006 FLEETJOINTFACILITIESINFORMATION MANAGEMENTSERVICESMAINTENANCESERVICES FUND FUND FUND FUND 2006 OPERATING INCOME (LOSS)$(744,403)$(471,188)$(11,780)$(406,795)$(1,634,166) Adjustments to reconcile operating income (loss) to cash provided by (used in) operating activities: Depreciation1,075,4997,20458,454105,7771,246,934 Other income99,360121,61954,692275,671 Decrease (increase) in prepaid expenses91110,68311,594 Decrease (increase) in inventories(477)(477) Decrease (increase) in accounts receivable1,146(38,513)(37,367) Increase (decrease) in accounts payable460107,31216,4644,973129,209 Increase (decrease) in compensated absences payable(14,837)41,794(2,764)24,193 Net cash provided by (used for) operating activities $417,225 $(273,132)$104,932 $(233,434)$15,591 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, 2006 and 2005 TOTALS 2006 2005 ASSETS: Current Assets: Cash and cash equivalents$941,256 Cash and cash equivalents - restricted$142,735170,471 Investments5,592,7093,146,334 Investments - restricted696,878570,708 Accounts receivable: Services (net of allowance for uncollectibles)6,916,5945,895,679 Other1,812,37929,930 Inventories3,483,8891,311,648 Total current assets 18,645,18412,066,026 Noncurrent Assets: Long-term note receivables166 Deferred charges - bond issuance costs487,243283,086 Total noncurrent assets 487,243283,252 Property and Equipment: Land and land rights193,735193,735 Distribution system54,766,86748,232,974 Buildings and improvements73,70773,707 Machinery, furniture and equipment536,096536,096 Construction in progress3,530,665486,677 Total cost property and equipment 59,101,07049,523,189 Less accumulated depreciation (18,597,632)(16,423,792) Net property and equipment 40,503,43833,099,397 TOTAL ASSETS $59,635,865$45,448,675 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable$5,424,270$4,049,110 Compensated absence95,30187,532 Due to other funds355,980 Current portion of long-term debt948,801782,264 Accrued interest 116,65058,443 Total current liabilities payable from unrestricted assets 6,941,0024,977,349 Current liabilities payable from restricted assets: Customer deposits839,611741,179 Total current liabilities payable from restricted assets 839,611741,179 Total current liabilities 7,780,6135,718,528 Long term liabilities: Compensated absence173,255169,506 Long-term debt16,859,9919,085,772 Total noncurrent liabilities 17,033,2469,255,278 Total liabilities 24,813,85914,973,806 Net Assets: Invested in capital assets (net of related debt)22,694,64623,231,361 Unrestricted12,127,3607,243,508 Total net assets 34,822,00630,474,869 TOTAL LIABILITIES AND NET ASSETS $59,635,865$45,448,675 CITY OF GEORGETOWN, TEXAS ELECTRIC FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FISCAL YEARS ENDED SEPTEMBER 30, 2006 AND 2005 2006 2005 OPERATING REVENUES: Electric services$41,338,196$33,800,761 Other: Penalties 374,810340,808 Connection and hookup fees813,722860,469 Total other 1,188,5321,201,277 TOTAL OPERATING REVENUES42,526,72835,002,038 OPERATING EXPENSES: Electric operations: Personnel 1,639,8001,375,116 Operations 1,720,6671,346,391 Total electric operations3,360,4672,721,507 Depreciation 2,173,8412,035,077 Electric contracts 31,816,74423,790,696 TOTAL OPERATING EXPENSES 37,351,05228,547,280 NET OPERATING INCOME 5,175,6766,454,758 NONOPERATING REVENUES (EXPENSES): Investment earnings 260,000131,732 Interest and fiscal charges(515,801)(479,195) Other 2,322,473599,703 Total nonoperating revenues (expenses) 2,066,672252,240 INCOME BEFORE CONTRIBUTIONS AND TRANSFERS7,242,3486,706,998 CONTRIBUTIONS AND TRANSFERS: Capital contributions 1,030,107788,434 Transfers out (3,925,318)(2,938,894) Total contributions and transfers (2,895,211)(2,150,460) CHANGE IN NET ASSETS4,347,1374,556,538 NET ASSETS, Beginning of period30,474,86925,918,331 NET ASSETS, End of period $34,822,006$30,474,869 CITY OF GEORGETOWN, TEXAS WATER SERVICES FUND COMPARATIVE STATEMENTS OF NET ASSETS AS OF SEPTEMBER 30, 2006 and 2005 TOTALS 2006 2005 ASSETS: Current Assets: Cash and cash equivalents$3,561,023$2,814,333 Cash and cash equivalents - restricted104,5783,758,565 Investments12,336,0967,750,322 Investments - restricted510,585253,869 Prepaid expenses1,548,0851,352,076 Accounts receivable: Services (net of allowance for uncollectibles)3,209,7022,859,453 Due from other funds895,647415,360 Total current assets 22,165,71619,203,978 Noncurrent Assets: Long-term note receivables2,928,1777,726,649 Deferred charges - bond issuance costs897,498923,909 Total noncurrent assets 3,825,6758,650,558 Property and Equipment: Land and land rights469,354469,354 Distribution system125,998,522110,834,055 Buildings and improvements3,019,7943,019,794 Machinery, furniture and equipment236,382236,382 Construction in progress5,939,4705,035,060 Total cost property and equipment 135,663,522119,594,645 Less accumulated depreciation (26,586,449)(23,588,226) Net property and equipment 109,077,07396,006,419 TOTAL ASSETS $135,068,464$123,860,955 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable$631,453$881,851 Compensated absence69,62664,929 Current portion of long-term debt2,176,1982,221,749 Accrued interest 158,992173,332 Total current liabilities payable from unrestricted assets 3,036,2693,341,861 Current liabilities payable from restricted assets: Construction contracts and retainages payable306,684361,254 Total current liabilities payable from restricted assets 306,684361,254 Total current liabilities 3,342,9533,703,115 Long term liabilities: Compensated absence131,105128,220 Unearned revenue2,372,2882,675,542 Long-term debt25,900,01027,974,228 Total noncurrent liabilities 28,403,40330,777,990 Total liabilities 31,746,35634,481,105 Net Assets: Invested in capital assets (net of related debt)81,000,86565,810,442 Restricted for: Future construction5,389,0631,251,844 Unrestricted16,932,18022,317,564 Total net assets 103,322,10889,379,850 TOTAL LIABILITIES AND NET ASSETS $135,068,464$123,860,955 CITY OF GEORGETOWN, TEXAS WATER SERVICES FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FISCAL YEARS ENDED SEPTEMBER 30, 2006 AND 2005 2006 2005 OPERATING REVENUES: Water/Irrigation: Water services$11,916,401$9,838,920 Wastewater services6,261,2625,696,858 Irrigation services283,474249,543 Water/Wastewater tap fees1,248,422820,087 Total water/irrigation19,709,55916,605,408 Other: Penalties 197,277195,010 Connection and hookup fees90,92082,890 Service fees320,847163,421 Total other 609,044441,321 TOTAL OPERATING REVENUES20,318,60317,046,729 OPERATING EXPENSES: Water services distribution: Personnel1,220,5111,065,783 Operations1,972,3281,882,092 Total water services distribution3,192,8392,947,875 Depreciation2,998,2232,681,160 Water services plant management3,154,9312,719,194 Water services contracts4,831,0454,490,378 TOTAL OPERATING EXPENSES 14,177,03812,838,607 NET OPERATING INCOME 6,141,5654,208,122 NONOPERATING REVENUES (EXPENSES): Investment earnings 1,340,113573,386 Interest and fiscal charges(1,491,023)(1,396,256) Gain on disposed asset 160,949 Other 1,555,9381,495,889 Total nonoperating revenue (expenses) 1,405,028833,968 INCOME BEFORE CONTRIBUTIONS AND TRANSFERS 7,546,5935,042,090 CONTRIBUTIONS AND TRANSFERS: Capital contributions8,288,4812,786,128 Transfers in 10,376 Transfers out(1,903,192)(1,905,618) Total contributions and transfers6,395,665880,510 CHANGE IN NET ASSETS13,942,2585,922,600 NET ASSETS, Beginning of period89,379,85083,457,250 NET ASSETS, End of period $103,322,108$89,379,850 CITY OF GEORGETOWN, TEXAS AIRPORT FUND COMPARATIVE STATEMENTS OF NET ASSETS AS OF SEPTEMBER 30, 2006 and 2005 TOTALS 2006 2005 ASSETS: Current Assets: Cash and cash equivalents$128,729$133,677 Investments628,502447,527 Accounts receivable: Services (net of allowance for uncollectibles)141,855153,644 Other63,08381,979 Inventories24,32743,390 Total current assets 986,496860,217 Noncurrent Assets: Deferred charges - bond issuance costs63,29668,165 Total noncurrent assets63,29668,165 Property and Equipment: Land and land rights981,500981,500 Buildings and improvements7,597,1877,597,187 Machinery, furniture and equipment127,577127,577 Construction in progress589,910133,496 Total cost property and equipment 9,296,1748,839,760 Less accumulated depreciation (4,734,698)(4,332,497) Net property and equipment 4,561,4764,507,263 TOTAL ASSETS $5,611,268$5,435,645 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable$177,719$203,298 Compensated absence11,92012,088 Current portion of long-term debt117,375113,680 Accrued interest 10,98811,589 Total current liabilities 318,002340,655 Long term liabilities: Compensated absence25,86726,314 Long-term debt1,508,4841,625,859 Total noncurrent liabilities 1,534,3511,652,173 Total liabilities1,852,3531,992,828 Net Assets: Invested in capital assets (net of related debt)2,935,6172,767,724 Unrestricted823,298675,093 Total net assets3,758,9153,442,817 TOTAL LIABILITIES AND NET ASSETS $5,611,268$5,435,645 CITY OF GEORGETOWN, TEXAS AIRPORT FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FISCAL YEARS ENDED SEPTEMBER 30, 2006 AND 2005 2006 2005 OPERATING REVENUES: Fuel sales $2,136,173$1,898,554 Contract leases 139,656137,232 Hangar/tiedown rental fees 315,929313,145 Terminal sales 4,0063,163 TOTAL OPERATING REVENUES2,595,7642,352,094 OPERATING EXPENSES: Administration: Personnel 224,178206,773 Operations 2,047,0941,800,591 Capital 1,90088,641 Total administration 2,273,1722,096,005 Depreciation 402,202429,491 TOTAL OPERATING EXPENSES2,675,3742,525,496 NET OPERATING LOSS(79,610)(173,402) NONOPERATING REVENUES (EXPENSES) Investment earnings 31,70113,024 Interest and fiscal charges(78,574)(80,773) Donations and grants 389,988134,358 Other 52,03163,807 Total nonoperating revenues (expenses)395,146130,416 TRANSFERS: Transfers in 562 Total transfers 562 CHANGE IN NET ASSETS316,098(42,986) NET ASSETS, Beginning of period 3,442,8173,485,803 NET ASSETS, End of period $3,758,915$3,442,817 CITY OF GEORGETOWN, TEXAS SANITATION FUND COMPARATIVE STATEMENTS OF NET ASSETS AS OF SEPTEMBER 30, 2006 and 2005 TOTALS 2006 2005 ASSETS: Current Assets: Accounts receivable: Services (net of allowance for uncollectibles)$458,902$420,547 Total current assets 458,902420,547 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 $458,902$420,547 LIABILITIES AND NET ASSETS:Liabilities: Current liabilities: Accounts payable$252,414$233,650 Due to other funds422,34754,361 Total current liabilities 674,761288,011 Net Assets: Unrestricted(215,859)132,536 Total net assets(215,859)132,536 TOTAL LIABILITIES AND NET ASSETS $458,902$420,547 CITY OF GEORGETOWN, TEXAS SANITATION FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FISCAL YEARS ENDED SEPTEMBER 30, 2006 AND 2005 2006 2005 OPERATING REVENUES: Sanitation: Sanitation services$3,397,255$3,150,493 Total sanitation3,397,2553,150,493 Other: Penalties 34,08235,939 Connection and hookup fees15,22915,714 Other 25,124 Total other 49,31176,777 TOTAL OPERATING REVENUES3,446,5663,227,270 OPERATING EXPENSES: Sanitation contracts 3,519,4872,868,758 TOTAL OPERATING EXPENSES 3,519,4872,868,758 NET OPERATING INCOME (LOSS)(72,921)358,512 INCOME (LOSS) BEFORE TRANSFERS(72,921)358,512 TRANSFERS (OUT): Transfers out(275,474)(256,182) Total transfers (out)(275,474)(256,182) CHANGE IN NET ASSETS(348,395)102,330 NET ASSETS, Beginning of period132,53630,206 NET ASSETS, End of period $(215,859)$132,536 CITY OF GEORGETOWN, TEXAS STORMWATER DRAINAGE FUND COMPARATIVE STATEMENTS OF NET ASSETS AS OF SEPTEMBER 30, 2006 and 2005 TOTALS 2006 2005 ASSETS: Current Assets: Cash and cash equivalents$103,115$89,914 Cash and cash equivalents - restricted443,376424,610 Investments503,553301,014 Accounts receivable: Services (net of allowance for uncollectibles)216,469203,240 Total current assets 1,266,5131,018,778 Noncurrent Assets: Deferred charges - bond issuance costs84,18891,000 Total noncurrent assets84,18891,000 Property and Equipment: Distribution system14,622,4849,923,366 Machinery, furniture and equipment14,05014,050 Construction in progress124,29265,625 Total cost property and equipment 14,760,82610,003,041 Less accumulated depreciation (1,333,257)(961,542) Net property and equipment 13,427,5699,041,499 TOTAL ASSETS $14,778,270$10,151,277 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable$20,630$26,780 Compensated absence14,32614,344 Current portion of long-term debt137,034130,272 Accrued interest 15,22215,893 Total current liabilities 187,212187,289 Long term liabilities: Compensated absence25,05228,216 Long-term debt2,502,5412,639,575 Total noncurrent liabilities 2,527,5932,667,791 Total liabilities2,714,8052,855,080 Net Assets: Invested in capital assets (net of related debt)10,787,9946,271,652 Unrestricted1,275,4711,024,545 Total net assets12,063,4657,296,197 TOTAL LIABILITIES AND NET ASSETS $14,778,270$10,151,277 CITY OF GEORGETOWN, TEXAS STORMWATER DRAINAGE FUND COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FISCAL YEARS ENDED SEPTEMBER 30, 2006 AND 2005 2006 2005 OPERATING REVENUES: Stormwater drainage fees$1,694,272$1,551,823 Other: Penalties14,34213,383 Service fees7,4527,648 Total other21,79421,031 TOTAL OPERATING REVENUES1,716,0661,572,854 OPERATING EXPENSES: Stormwater drainage: Personnel236,843231,224 Operations627,906576,127 Total stormwater drainage864,749807,351 Depreciation371,715279,760 TOTAL OPERATING EXPENSES 1,236,4641,087,111 NET OPERATING INCOME479,602485,743 NONOPERATING REVENUES (EXPENSES): Investment earnings41,35314,319 Interest and fiscal charges(133,803)(129,108) Other 8,500 Total nonoperating revenue (expenses) (83,950)(114,789) INCOME BEFORE CONTRIBUTIONS AND TRANSFERS395,652370,954 CONTRIBUTIONS AND TRANSFERS: Capital contributions4,508,7181,785,871 Transfers out(137,102)(119,369) Total contributions and transfers4,371,6161,666,502 CHANGE IN NET ASSETS4,767,2682,037,456 NET ASSETS, Beginning of period 7,296,1975,258,741 NET ASSETS, End of period $12,063,465$7,296,197 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, 2006 BALANCE BALANCE OCTOBER 1,SEPTEMBER 30, 2005 ADDITIONSDEDUCTIONS 2006 Cafeteria Plan-Flex Spending: ASSETS: Cash and cash equivalents$11,513$157,258$147,052$21,719 TOTAL ASSETS $11,513$157,258$147,052$21,719 LIABILITIES: Accounts payable$11,513$157,258$147,052$21,719 TOTAL LIABILITIES $11,513 $157,258 $147,052 $21,719 Public Improvement Districts: ASSETS: Cash and cash equivalents$14,273$286,460$266,837$33,896 Accounts receivable381,7176,6031,163387,157 TOTAL ASSETS $395,990$293,063$268,000$421,053 LIABILITIES: Accounts payable$17,868$293,063$268,000$42,931 Due to other governments378,122378,122 TOTAL LIABILITIES $395,990$293,063$268,000$421,053 Texas Capital Fund Repayments: ASSETS: Accounts receivable$842,106$$69,590$772,516 TOTAL ASSETS $842,106$$69,590$772,516 LIABILITIES: Due to other governments$842,106$$69,590$772,516 TOTAL LIABILITIES $842,106$$69,590$772,516 TOTAL AGENCY FUNDS ASSETS: Cash and cash equivalents$25,786$443,718$413,889$55,615 Accounts receivable1,223,8236,60370,7531,159,673 TOTAL ASSETS $1,249,609$450,321$484,642$1,215,288 LIABILITIES: Accounts payable$29,381$450,321$415,052$64,650 Due to other governments1,220,22869,5901,150,638 TOTAL LIABILITIES $1,249,609$450,321$484,642$1,215,288 Discretely Presented Component Units Fund Based Financial Statements CITY OF GEORGETOWN, TEXAS COMPARATIVE BALANCE SHEETS AS OF SEPTEMBER 30, 2006 AND 2005 20062005 ASSETS: Cash and cash equivalents$103,129$ Investments503,514 Accounts receivable: Sales Tax131,172 TOTAL ASSETS $737,815$ LIABILITIES AND FUND BALANCE Fund Balance: Reserved for: Capital projects737,815 Total fund balance737,815 TOTAL LIABILITIES AND FUND BALANCE $737,815$ ECONOMIC DEVELOPMENT SALES TAX - Discretely presented component unit CITY OF GEORGETOWN, TEXAS ECONOMIC DEVELOPMENT SALES TAX - Discretely presented component unit COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FISCAL YEAR ENDED SEPTEMBER 30, 2006 AND 2005 20062005 REVENUES: Sales tax$760,125$ Investment earnings12,870 Total revenues 772,995 EXPENDITURES: Operating35,180 Total expenditures35,180 EXCESS OF REVENUES OVER EXPENDITURES737,815 FUND BALANCES, Beginning of period FUND BALANCES, End of period $737,815$ CITY OF GEORGETOWN, TEXAS ECONOMIC DEVELOPMENT SALES TAX - Discretely presented component unit SCHEDULE OF REVENUES AND EXPENDITURES (BUDGET BASIS) - BUDGET AND ACTUAL (NON-GAAP) - RECONCILED TO GAAP BASIS FISCAL YEAR ENDED SEPTEMBER 30, 2006 (WITH COMPARATIVE FOR 2005) ORIGINAL BUDGET FINAL BUDGET 2006 ACTUAL BUDGETARY BASIS VARIANCE TO BUDGET 2005 ACTUAL BUDGETARY BASIS REVENUES: Sales tax$651,406$651,406$760,125$108,719$ Investment earnings19,93912,731(7,208) Total revenues 651,406671,345772,856101,511 EXPENDITURES: Operations36,88035,1801,700 Capital outlay651,406435,000435,000 Total expenditures 651,406471,88035,180436,700 EXCESS OF REVENUES OVER EXPENDITURES 199,465737,676538,211 FUND BALANCES, Beginning of period FUND BALANCES - BUDGETARY BASIS End of period$$199,465737,676$538,211 Adjustments to GAAP: Record net unrealized loss on investment139 FUND BALANCES - GAAP BASIS End of period$737,815$ 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, 2006 and 2005 20062005 GOVERNMENTAL FUNDS CAPITAL ASSETS Land $3,828,506$3,828,506 Buildings 20,810,53620,810,536 Improvements 124,283,860117,433,899 Machinery, furniture and equipment2,226,7841,871,427 Construction in progress 23,495,95710,221,212 TOTAL GOVERNMENTAL FUNDS CAPITAL ASSETS $174,645,643$154,165,580 INVESTMENT IN GOVERNMENTAL FUNDS CAPITAL ASSETS General Fund $6,496,610$6,394,789 Capital Projects Funds: General obligation bonds and certificates of obligation54,659,94041,415,958 State grant 200,000200,000 Other 102,610,61595,497,640 Special Revenue Funds: Federal grant 2,265,5062,265,506 Other 2,232,5842,211,298 State grant 2,351,9752,351,975 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 $174,645,643$154,165,580 CITY OF GEORGETOWN, TEXAS CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY SEPTEMBER 30, 2006 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 37,909 2,456,229 Parks maintenance$743,579 5,985 2,370,389 214,014 3,333,967 Recreation 118,456 175,080 293,536 Total culture-recreation 743,579 1,937,888 4,329,313 702,552 7,713,332 Development Planning administration21,995 65,279 87,275 Current planning 25,000 25,000 Long range planning 9,212 9,212 Inspections 29,206 29,206 Total development 21,995 128,697 150,693 Economic development Administration 25,000 5,489 30,488 Total economic development 25,000 5,489 30,488 Fire Administation 13,615 24,021 37,636 Operations367,101 142,724 241,408 751,233 Total fire 367,101 156,339 265,429 788,869 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 9,677,592 539,600 33,929 10,474,931 General government479,964 7,190,181 3,585,185 219,023 11,474,353 Total general government 1,593,710 17,652,494 4,287,209 384,570 23,917,985 Highways and streets Bridges 6,539,783 6,539,783 Streets 106,716,428 231,164 106,947,592 Streets capital improvements1,491,217 1,735,713 253,106 3,480,036 Total highways and streets 1,491,217 114,991,924 484,270 116,967,411 Police Administration65,521 466,829 75,632 607,982 Support services bureau 38,840 38,840 Field operations bureau 46,035 46,035 Animal services787,531 5,250 81,669 874,449 Municipal court 13,602 13,602 Total police 853,052 472,079 255,777 1,580,908 TOTAL CAPITAL ASSETS 3,828,506 20,810,536 124,283,860 2,226,784 151,149,685 CONSTRUCTION IN PROGRESS 23,495,957 23,495,957 23,495,957 23,495,957 TOTAL GOVERNMENTAL FUNDS CAPITAL ASSETS $3,828,506 $20,810,536 $124,283,860 $2,226,784 $23,495,957 $174,645,642 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, 2006 BALANCE 10/1/2005 ADDITIONS DELETIONS BALANCE 9/30/2006 FUNCTION AND ACTIVITY Culture-recreation Library$1,629,600 $1,629,600 Parks administration2,432,903 $23,326 2,456,229 Parks maintenance3,314,101 19,866 3,333,967 Recreation51,427 242,109 293,536 Total culture-recreation 7,428,031 285,301 7,713,332 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 Administration30,488 30,489 Total economic development 30,488 30,489 Fire Administation28,505 9,131 37,636 Operations751,233 751,233 Total fire 779,738 9,131 788,869 General Government City council1,632,636 1,632,636 City manager's office336,065 336,065 Facilities10,439,632 35,299 10,474,931 General government11,474,353 11,474,353 Total general government 23,882,686 35,299 23,917,985 Highways and streets Bridges6,539,783 6,539,783 Streets100,190,780 6,792,484 106,983,264 Streets capital improvements3,408,693 35,671 3,444,364 Total highways and streets 110,139,256 6,828,155 116,967,411 Police Administration576,682 31,300 607,982 Support services bureau38,840 38,840 Field operations bureau46,035 46,035 Animal services863,584 10,865 874,449 Municipal court8,334 5,268 13,602 Total police 1,533,475 47,433 1,580,908 TOTAL CAPITAL ASSETS 143,944,368 7,205,318 151,149,686 CONSTRUCTION IN PROGRESS 10,221,212 14,712,692 $(1,437,946) 23,495,957 10,221,212 14,712,692 (1,437,946) 23,495,957 TOTAL GOVERNMENTAL FUNDS CAPITAL ASSETS $154,165,580 $21,918,009 $(1,437,946) $174,645,643 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. Statistical Section This part of the City of Georgetown’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health. Contents: Financial Trend......................................................................................................................135 These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time. Revenue Capacity..................................................................................................................142 These schedules contain information to help the reader assess the government’s most significant local revenue source, the property tax. Debt Capacity........................................................................................................................152 These schedules present information to help the reader assess the affordability of the government’s current levels of outstanding debt and the government’s ability to issue additional debt in the future. Demographic and Economic Information...............................................................................162 These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place. Operating Information............................................................................................................166 These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report related to the services the government provides and the activities it performs Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented Statement 34 in 2003; schedules presenting government-wide information include information beginning in that year. CITY OF GEORGETOWN, TEXAS NET ASSETS BY COMPONENT LAST FOUR FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2006200520042003 Governmental activities Invested in capital assets, net of related debt122,268,551$ 107,692,319$ 96,516,068$ 102,199,237$ Restricted18,254,529 16,836,756 12,067,284 5,073,123 Unrestricted6,567,654 9,833,977 7,169,828 6,886,592 Total governmental activities net assets147,090,734$ 134,363,052$ 115,753,180$ 114,158,952$ Business-type activities Invested in capital assets, net of related debt117,419,122$ 98,081,179$ 88,000,994$ 74,920,347$ Restricted5,389,063 1,251,844 389,312 844,225 Unrestricted30,942,450 31,393,246 29,760,025 28,239,895 Total business-type activities net assets153,750,635$ 130,726,269$ 118,150,331$ 104,004,467$ Primary government Invested in capital assets, net of related debt239,687,673$ 205,773,498$ 184,517,062$ 177,119,584$ Restricted23,643,592 18,088,600 12,456,596 5,917,348 Unrestricted37,510,104 41,227,223 36,929,853 35,126,487 Total primary government net assets300,841,369$ 265,089,321$ 233,903,511$ 218,163,419$ Source: Audited Financial Statements of City of Georgetown. CITY OF GEORGETOWN, TEXAS CHANGES IN NET ASSETS LAST FOUR FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2006200520042003 Expenses Governmental activities: Culture-recreation5,649,191$ 4,701,552$ 4,773,059$ 4,165,382$ Development2,325,761 2,061,017 1,956,243 1,607,886 Fire4,397,108 3,767,816 3,862,168 3,611,523 General government3,671,786 4,405,436 4,005,079 3,715,369 Police7,392,816 5,961,731 5,833,644 5,476,245 Streets3,757,919 1,522,161 2,752,225 3,267,717 Interest on long-term debt2,010,409 2,256,135 1,253,934 1,241,202 Total governmental activities expenses29,204,990 24,675,848 24,436,352 23,085,324 Business-type activities Airport2,753,948 2,606,270 1,962,826 1,773,928 Electric37,866,853 29,026,475 26,237,073 23,957,507 Sanitation3,519,487 2,868,758 2,740,495 2,577,159 Stormwater1,370,267 1,216,219 986,876 841,591 Water15,668,061 14,234,866 13,218,349 11,727,956 Total business-type activities expenses61,178,616 49,952,588 45,145,619 40,878,141 Total primary government expenses90,383,606$ 74,628,436$ 69,581,971$ 63,963,465$ Program Revenues Governmental activities: Charges for services: Culture-recreation991,505$ 812,920$ 672,882$ 643,950$ Development1,761,166 1,350,955 1,097,581 887,830 Fire210,453 478,378 141,280 209,207 General government635,546 1,452 - - Police880,807 838,302 769,389 602,434 Streets101,685 - - - Operating grants and contributions168,863 900,681 176,169 228,828 Capital grants and conributions6,153,637 13,474,330 110,077 1,700,000 Total governmental activities program revenues10,903,662 17,857,018 2,967,378 4,272,249 Business-type activitites: Charges for services: Airport2,595,764 2,352,094 1,667,154 1,459,523 Electric42,526,728 35,002,038 30,152,942 26,689,395 Sanitation3,446,566 3,227,268 2,932,480 2,791,467 Stormwater1,716,066 1,572,854 1,331,962 1,209,132 Water20,318,603 17,046,731 15,500,302 15,055,711 Operating grants and contributions- - - - Capital grants and conributions14,217,294 6,665,628 12,051,096 2,070,954 Total business-type activities program revenues84,821,021 65,866,613 63,635,936 49,276,182 Total primary government program revenues95,724,683$ 83,723,631$ 66,603,314$ 53,548,431$ Net (expense)/revenue Governmental activities(18,301,328)$ (6,818,830)$ ##########(18,813,075)$ Business-type activitites23,642,405 15,914,025 18,490,317 8,398,041 Total primary governement net expense5,341,077$ 9,095,195$ (2,978,657)$ (10,415,034)$ CITY OF GEORGETOWN, TEXAS CHANGES IN NET ASSETS (CONTINUED) LAST FOUR FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2006200520042003 General Revenues and Other Changes in Net Assets Governmental activities: Property Tax 8,919,694$ 8,329,395$ 6,927,438$ 6,380,597$ Sales Tax 10,962,790 8,496,160 7,395,657 6,091,190 Taxes - other844,718 749,301 585,921 560,458 Franchise taxes2,209,235 1,942,246 1,844,683 1,579,729 Interest on investments1,398,706 507,038 171,949 197,103 Gain on sale of capital assets- 859,286 - - Other463,719 1,167,654 466,185 2,420,183 Transfers6,230,148 5,220,063 5,671,960 4,661,635 Total governmental activities 31,029,010$ 27,271,143$ 23,063,793$ 21,890,895$ Business-type activities: Interest on investments1,673,167$ 732,461$ 444,169$ 159,864$ Gain on sale of capital assets- 160,949 - - Extraordinary item- - - 13,623,784 Other3,938,942 988,566 883,338 1,009,560 Transfers(6,230,148) (5,220,063) (5,671,960) (4,661,635) Total business-type activities (618,039) (3,338,087) (4,344,453) 10,131,573 Total primary government30,410,971$ 23,933,056$ 18,719,340$ 32,022,468$ Changes in Net Assets Governmental activities12,727,682$ 20,452,313$ 1,594,819$ 3,077,820$ Business-type activities23,024,366 12,575,938 14,145,864 18,529,614 Total primary government35,752,048$ 33,028,251$ 15,740,683$ 21,607,434$ CITY OF GEORGETOWN, TEXAS FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 2006200520042003 General Fund Reserved1,038,758$ 1,181,489$ 952,348$ 879,218$ Unreserved7,917,556 6,289,465 4,484,457 3,104,887 Total general fund8,956,314$ 7,470,954$ 5,436,805$ 3,984,105$ All other governmental funds Reserved11,214,177$ 6,280,990$ 4,166,714$ 4,040,224$ Unreserved, reported in: Special revenue funds462,040 279,158 Capital projects funds9,778,067 12,389,201 9,192,972 1,948,752 Total all other governmental funds20,992,244$ 18,670,191$ 13,821,726$ 6,268,134$ 200220012000199919981997 256,987$ 199,071$ 71,899$ 72,774$ 549,297$ 2,180,878$ 2,749,025 3,516,422 3,870,170 2,569,654 3,189,525 174,559 3,006,012$ 3,715,493$ 3,942,069$ 2,642,428$ 3,738,822$ 2,355,437$ 9,700,650$ 9,971,623$ 8,659,997$ 8,560,393$ 6,847,792$ 5,826,557$ (1,513,403) (56,377) (57,377) (186,544) (1,193,116) (470,982) 8,187,247$ 9,915,246$ 8,602,620$ 8,373,849$ 5,654,676$ 5,355,575$ CITY OF GEORGETOWN, TEXAS CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 2006200520042003 Revenues Property taxes9,047,916$ 8,408,150$ 7,217,442$ 6,596,246$ Property assessment173,011 89,134 81,916 76,816 Sales tax and other taxes11,495,335 8,927,263 7,797,747 6,477,415 Franchise taxes2,209,235 1,942,246 1,844,683 1,579,729 Licenses and permits1,723,082 1,266,295 1,078,048 866,451 Charges for service1,067,460 955,940 919,219 946,450 Fine and forfeitures907,983 773,882 684,999 533,703 Donations and grants168,863 798,822 286,246 228,827 Investment income1,398,706 507,038 171,949 197,102 Other revenue1,428,485 2,134,184 764,592 3,463,798 Total revenues29,620,076 25,802,954 20,846,841 20,966,537 Expenditures Culture - recreation4,968,902 5,197,709 4,509,436 3,904,361 Development2,127,927 1,952,474 1,914,223 1,565,612 Fire services4,171,527 3,675,033 3,832,320 3,507,243 General government2,302,417 1,987,046 1,905,979 1,619,356 Highways and streets1,761,494 1,741,217 1,931,782 1,587,154 Police7,070,088 5,798,432 5,585,002 5,359,643 Capital outlay15,950,142 11,916,076 6,570,321 9,749,963 Debt service Principal retirement2,387,035 2,500,901 1,262,782 1,159,660 Interest and fiscal charges2,307,846 1,897,649 1,253,934 1,241,201 Total expenditures43,047,378 36,666,537 28,765,779 29,694,193 Excess (deficiency) of revenues over expenditures(13,427,302) (10,863,583) (7,918,938) (8,727,656) Other financing sources (uses) Transfers in8,580,426 6,400,033 5,856,656 5,190,366 Transfers out(3,940,019) (2,691,211) (1,454,546) (528,730) Sale of property31,102 896,113 Capital lease issued283,120 Payment to refunding escrow agent(7,736,794) (9,243,904) Certificate of obligation bond issued20,300,000 22,385,166 12,240,000 3,125,000 Total other financing sources (uses)17,234,715 17,746,197 16,925,230 7,786,636 Net change in fund balances3,807,413$ 6,882,614$ 9,006,292$ (941,020)$ Debt service as a percentage of noncapital expenditures17.3%17.8%11.3%12.0% 200220012000199919981997 5,991,068$ 5,165,637$ 4,797,764$ 4,224,047$ 3,491,301$ 2,494,649$ 39,450 21,296 - - - - 5,563,400 3,958,624 3,755,243 3,137,685 2,787,458 2,442,218 1,489,345 1,378,703 1,387,777 1,052,249 890,835 812,666 827,395 731,600 662,344 530,896 512,818 567,936 817,255 130,031 121,931 116,541 110,415 105,104 419,297 417,192 319,886 239,511 219,791 162,607 284,052 227,965 1,082,421 1,608,949 1,213,461 2,293,271 404,008 646,471 714,567 453,730 819,112 318,444 800,523 1,308,940 1,249,944 982,452 2,216,408 3,781,423 16,635,793 13,986,459 14,091,877 12,346,060 12,261,599 12,978,318 2,611,676 2,520,044 2,989,751 2,587,431 2,284,301 1,341,113 1,666,489 1,253,338 1,284,017 1,276,021 1,301,416 1,034,875 3,400,239 3,104,714 2,513,832 2,415,371 1,815,629 1,757,429 3,019,178 3,131,439 1,937,898 1,762,119 1,865,625 2,372,759 1,885,222 1,193,979 1,032,006 971,154 923,664 844,465 4,569,239 4,245,123 4,023,129 3,761,479 3,085,201 2,798,512 3,325,393 5,726,880 4,198,563 4,902,985 5,916,050 7,450,727 1,104,989 1,247,477 880,535 964,454 697,102 617,845 1,099,808 1,128,275 879,267 831,984 681,055 597,596 22,682,233 23,551,269 19,738,998 19,472,998 18,570,043 18,815,321 (6,046,440) (9,564,810) (5,647,121) (7,126,938) (6,308,444) (5,837,003) 3,614,115 5,933,886 6,553,059 5,052,659 5,942,880 4,237,493 (5,156) (753,026) (827,526) (1,353,212) (768,683) (938,288) 75,270 66,378 5,470,000 1,450,000 4,975,000 2,816,733 5,185,000 3,608,959 10,650,860 7,175,533 8,749,717 7,990,930 8,550,583 (2,437,481)$ 1,086,050$ 1,528,412$ 1,622,779$ 1,682,486$ 2,713,580$ 11.4%13.3%11.3%12.3%10.9%10.7% 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 19972,466,560$ 2,422,650$ 98.22%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 20069,442,953 9,096,910 96.34%76,076 Source: City of Georgetown Tax Assessor. TOTAL OUTSTANDING COLLECTIONSDELINQUENT AS A PERCENT OUTSTANDINGTAXES AS A TOTAL TAX OF CURRENTDELINQUENTPERCENT OF COLLECTIONSLEVYTAXESCURRENT LEVY 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% 9,172,986 97.14%277,077 2.93% 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 1997558,828,511$ 558,828,511$ 74,640,539$ 74,640,539$ 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 20062,367,099,1442,367,099,144157,265,408157,265,408 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 633,469,050$ 633,469,050$ 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% 2,524,364,5522,524,364,552 100.00% 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 YEARFUNDFUNDCITYSCHOOL DISTRICTCOUNTYTOTAL 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 20060.210.140.351.730.50 2.58 Source: Information furnished by respective tax assessors. CITY OF GEORGETOWN, TEXAS PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR & NINE YEARS AGO PERCENTAGEPERCENTAGE OF TOTALOF TOTAL ASSESSEDASSESSEDASSESSEDASSESSED TAXPAYERTYPE OF BUSINESSVALUERANKVALUE(1)VALUERANKVALUE(1) SPG Wolf Ranch LPDevelopment$54,533,897 12.16% Del Webb Texas LTDDevelopment21,526,255 20.85% Rivery Towne Crossings LPDevelopment16,082,723 30.64% Wal-Mart Real EstateDevelopment15,396,720 40.61%$7,066,541 31.12% HE Butt GroceryGrocer 13,379,262 50.53% 6,001,859 40.95% Hewlett Holdings LTDAutomobile dealer12,159,158 60.48% Watersedge - Georgetown LTDDevelopment11,280,732 70.45% Republic Square LTDDevelopment11,217,641 80.44%2,935,454 80.46% Watersedge - Georgetown II LTDDevelopment10,571,039 90.42% Verizon SouthwestUtility10,535,640 100.42% David S. StarrApartments8,418,049 11.33% General TelephoneUtility8,183,130 21.29% Commonwealth Land & Title Co.Development4,286,412 50.68% Bridge-Georgetown Park LtdDevelopment3,586,944 60.57% La Quinta Dev Partners LPHotel/Motel3,359,933 70.53% Kelly More Paint Co IncRetail2,916,526 90.46% Kenneth B. BaggottDevelopment2,622,312 100.41% Total$176,683,0677.00%$49,377,1607.79% (1) The total assessed valuation for the fiscal year ended September 30, 2006 was certified at $2,524,364,552 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. 20061997 CITY OF GEORGETOWN, TEXAS TAXABLE SALES BY CATEGORY LAST TEN FISCAL YEARS 2006200520042003 Agriculture, forestry, fishing1,926,798 2,342,144 1,886,679 1,587,032 Construction19,082,596 19,126,285 13,523,384 10,344,948 Manufacturing7,134,008 5,622,123 4,995,059 4,615,388 Transportation, communications, utilities20,079,870 18,392,408 16,709,247 15,252,296 Wholesale trade32,639,071 21,501,948 16,610,129 18,307,879 Retail trade484,373,022 315,349,888 282,911,937 234,713,895 Finance, insurance, real estate- 85,337 36,928 48,986 Services32,131,233 26,631,564 26,491,291 26,351,599 Public Administration14,586,112 10,102,695 8,340,851 7,696,163 Other36,585,952 4,954,115 125,181 - Total648,538,662 424,108,507 371,630,686 318,918,186 City direct sales tax rate2.00%1.75%1.75%1.75% Source: Window on State Government - Susan Combs, Texas Comptroller of Public Accounts website 200220012000199919981997 1,353,247 1,136,583 659,105 935,211 1,026,334 515,904 7,920,453 8,121,175 10,964,602 6,603,008 9,042,977 5,302,731 5,341,134 7,442,465 7,199,965 6,646,803 7,434,343 5,018,377 13,183,428 11,696,473 9,906,842 9,927,907 9,159,699 7,527,904 16,882,885 15,403,048 12,477,416 12,020,426 6,941,068 5,124,242 212,810,904 209,521,177 206,468,551 186,066,531 179,079,311 150,784,975 47,113 413,182 - - 25,454 - 28,655,331 29,036,528 26,438,953 23,370,272 18,814,737 19,480,481 6,888,989 6,725,228 4,642,274 - - 4,287,253 - - - - - - 293,083,484 289,495,859 278,757,708 245,570,158 231,523,923 198,041,867 1.50%1.00%1.00%1.00%1.00%1.00% CITY OF GEORGETOWN, TEXAS DIRECT AND OVERLAPPING SALES TAX RATES LAST TEN FISCAL YEARS CITY FISCALDIRECTSTATE OF YEARRATETEXAS 19971%6.25% 19981%6.25% 19991%6.25% 20001%6.25% 20011%6.25% 20021%6.25% 20031%6.25% 20041%6.25% 20051%6.25% 20061%6.25% Source: Information furnished by City of Georgetown CITY OF GEORGETOWN, TEXAS SALES TAX REVENUE PAYERS BY INDUSTRY FISCAL YEARS 2006 AND 1997 Number PercentTax PercentNumber PercentTax Percent of Filersof TotalLiabilityof Totalof Filersof TotalLiabilityof Total Agriculture, forestry, fishing1503.73%38,537$ 0.30%1273.45%5,159$ 0.26% Mining30.07%- 0.00%40.11%- 0.00% Construction2185.43%381,652 2.94%2617.10%53,027 2.68% Manufacturing1413.51%142,680 1.10%2145.82%50,184 2.53% Transportation, communications, utilities842.09%401,597 3.10%772.09%75,279 3.80% Wholesale trade1433.56%652,781 5.03%1333.62%51,242 2.59% Retail trade1,59839.78%9,687,460 74.69%1,89251.47%1,507,850 76.14% Finance, insurance, real estate220.55%- 0.00%70.19%- 0.00% Services88321.98%642,625 4.95%94025.57%194,805 9.84% Public administration170.42%291,722 2.25%160.44%42,873 2.16% Nonclassifiable establishments00.00%- 0.00%10.03%- 0.00% Other75818.87%731,719 5.64%40.11%- 0.00% Totals4,017100.00%12,970,774$ 100.00%3,676100.00%1,980,419$ 100.00% Source: Window on State Government Note: The City direct sales tax rate for 2006 and 1997 is 2% and 1%, respectively. Due to confidentiality issues, the names of the ten larg revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources of the City's rev 20061997 CITY OF GEORGETOWN, TEXAS RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS GeneralArbitrage FiscalObligationCompensatedCapitalRebate YearBondsAbsencesLeasesPayable 199710,248,700$ 565,250$ -$ -$ 199812,368,331 627,954 - - 199916,378,878 740,402 - 34,433 200016,948,092 775,779 - 89,235 200121,170,615 901,139 - 106,910 200220,065,626 999,881 - 67,774 200322,217,455 1,252,751 166,968 63,277 200433,194,673 1,329,545 368,787 17,663 200544,306,603 1,522,801 255,702 17,663 200654,429,567 1,767,492 142,633 14,650 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Governmental Activities GeneralTotal RevenueCompensatedObligationPrimary BondsAbsencesBondsGovernment 24,670,000$ 246,323$ 1,081,300$ 36,811,573$ 28,995,000 281,128 3,441,669 45,714,082 28,850,000 336,595 5,166,122 51,506,430 32,090,000 317,852 5,056,908 55,277,866 32,075,000 362,325 4,939,385 59,555,374 30,005,000 405,004 4,734,374 56,277,659 34,498,514 470,239 4,514,031 63,183,235 38,903,763 496,860 4,261,564 78,572,855 40,064,012 531,152 4,509,384 91,207,317 45,885,000 546,452 4,265,434 107,051,228 Business-Type Activities 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 FISCALASSESSED BONDEDSUPPORTINGSUPPORTED YEARPOPULATIONVALUE (1) DEBT (2)DEBT (3)DEBT 199724,000633,469,050$ 11,330,000$ 1,081,300$ 10,248,700$ 199825,500984,123,199 15,810,000 3,441,669 12,368,331 199926,4001,199,831,232 21,545,000 5,166,122 16,378,878 200028,3281,410,072,042 22,005,000 5,056,908 16,948,092 200130,0001,629,344,909 26,110,000 4,939,385 21,170,615 200234,2731,838,770,383 24,800,000 4,734,374 20,065,626 200335,3002,116,042,131 26,731,486 4,514,031 22,217,455 200436,3592,132,115,978 37,456,237 4,261,564 33,194,673 200538,2652,260,988,333 48,815,988 4,509,385 44,306,603 200641,2942,524,364,552 58,695,001 4,265,434 54,429,567 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. Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. RATIO OF NETRATIO OF GROSS LESS DEBTNETBONDED DEBTBONDED DEBTNET BONDEDTOTAL BONDED SERVICE FUNDSBONDEDTO ASSESSEDTO ASSESSEDDEBT PERDEBT PER AVAILABLE DEBTVALUE (4)VALUE (4)CAPITA (4)CAPITA (4) 353,913$ 9,894,787$ 1.56%1.73%412.28$ 457.34$ 522,846 11,845,485 1.20%1.55%464.53 599.50 625,913 15,752,965 1.31%1.74%596.70 792.39 868,584 16,079,508 1.14%1.50%567.62 746.13 628,288 20,542,327 1.26%1.56%684.74 849.39 657,757 19,407,869 1.06%1.31%566.27 704.41 663,644 21,553,811 1.02%1.23%610.59 738.47 768,436 32,426,237 1.52%1.72%891.84 1,009.04 508,151 43,798,452 1.94%2.14%1,144.61 1,262.45 878,668 53,550,899 2.12%2.29%1,296.82 1,400.11 CITY OF GEORGETOWN, TEXAS COMPUTATION OF DIRECT AND ESTIMATED OVERLAPPING BONDED DEBT SEPTEMBER 30, 2006 DEBTCITY'S SHARE (2) PER TAXING BODY AMOUNT AS OFPERCENT AMOUNTCAPITA (1) ESTIMATED OVERLAPPING DEBT: Georgetown I.S.D.$157,134,9776-30-0678.06%$122,660,335$2,970 Williamson County523,620,0009-30-0612.38% 64,843,0361,570 Total estimated overlapping debt680,754,97727.54% 187,503,3714,540 DIRECT DEBT - City of Georgetown58,695,0019-30-06100.00% 58,695,0011,421 DIRECT AND ESTIMATED OVERLAPPING DEBT$739,449,978$246,198,372$5,961 Source: Jurisdiction listed. (1) GISD population - 52,900 Williamson County population - 333,457 City of Georgetown population - 41,294 (2) Information represents the share of the respective debt which are obligations of the citizens of the City of Georgetown CITY OF GEORGETOWN, TEXAS COMPUTATION OF LEGAL DEBT MARGIN SEPTEMBER 30, 2006 2006200520042003 Debt Limit 28,399,101$ 25,436,119$ 23,986,305$ 23,805,474$ Total net debt applicable to limit 4,916,116 4,645,554 2,949,202 2,739,059 Legal debt margin 23,482,985$ 20,790,565$ 21,037,103$ 21,066,415$ Total net debt applicable to limit as a percentage of debt limit 17.31%18.26%12.30%11.51% ASSESSED VALUATION 20062,524,364,552$ Allowable tax levy for annual debt service purpose: assuming 90% collection rate 28,399,101 2006 annual debt service requirements for general obligation debt: Principal$2,630,987 Interest and fiscal charges2,285,1294,916,116 Legal margin for annual debt service requirements23,482,985$ 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 pro- visions 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 ser- vice requirements on all outstanding City tax bonds, including the issue to be approved, from a tax levy of $1.25 per $100 of valuation, based on 90% collection of tax. The legal margin computation includes the general obligation debt that will be repaid by self-supporting sources such as the Airport, Stormwater Drainage and Georgetown Transportation Enhancement Corporation (GTEC) funds. 200220012000199919981997 20,686,167$ 18,330,130$ 15,863,310$ 13,498,101$ 11,071,386$ 7,126,527$ 2,654,863 2,594,285 2,074,767 1,898,756 1,396,281 1,168,027 18,031,304$ 15,735,845$ 13,788,543$ 11,599,345$ 9,675,105$ 5,958,500$ 12.83%14.15%13.08%14.07%12.61%16.39% CITY OF GEORGETOWN, TEXAS REVENUE BOND COVERAGE UTILITY FUNDS (1) LAST TEN FISCAL YEARS OPERATING EXPENSESNET REVENUE FISCALELIGIBLEINTEREST (EXCLUDINGAVAILABLE FOR YEAR REVENUESEARNINGSDEPRECIATION)DEBT SERVICE 199726,261,446$ 585,650$ 16,141,638$ 10,705,458$ 199829,682,527 754,178 18,413,512 12,023,193 199931,107,463 879,406 19,205,976 12,780,893 200036,216,903 995,272 21,872,920 15,339,255 200140,844,133 1,202,418 25,762,110 16,284,441 200241,550,381 610,791 26,227,232 15,933,940 200346,041,368 155,951 30,122,878 16,074,441 200447,346,431 423,987 33,420,226 14,350,192 200554,144,359 705,118 36,669,650 18,179,827 200666,723,744 1,600,113 46,356,026 21,967,831 Source: Finance and Administration Division. Notes: (1) Electric, Water and Wastewater only. DEBT SERVICE REQUIREMENTS INTEREST AND TIMES PRINCIPAL FISCAL CHARGES TOTAL COVERAGE 1,285,000$ 1,357,104$ 2,642,104$ 4.05 - 1,215,179 1,215,179 9.89 145,000 1,471,341 1,616,341 7.91 1,080,000 1,393,904 2,473,904 6.20 1,915,000 1,809,436 3,724,436 4.37 2,070,000 1,640,674 3,710,674 4.29 2,145,000 1,668,819 3,813,819 4.21 2,534,751 1,920,886 4,455,637 3.22 2,864,751 1,875,451 4,740,202 3.84 6,049,012 2,006,822 8,055,834 2.73 CITY OF GEORGETOWN, TEXAS DEMOGRAPHIC & ECONOMIC STATISTICS LAST TEN FISCAL YEARS Per Capita FiscalPersonalPersonalSchoolUnemployment Year PopulationIncomeincomeEnrollmentRate 199724,000 599,832,000$ 24,993$ 6,650 2.70% 199825,500 715,963,500 28,077 6,920 2.50% 199926,400 800,052,000 30,305 7,321 2.33% 200028,328 890,887,272 31,449 7,551 1.88% 200130,000 886,680,000 29,556 7,900 2.96% 200234,273 951,315,661 27,757 7,900 5.90% 200335,300 994,683,400 28,178 8,300 6.02% 200436,359 1,045,103,096 28,744 2,600 4.76% 200538,265 1,124,187,435 29,379 8,820 4.20% 200641,294 1,240,017,526 30,029 9,400 4.09% Sources: Population: City of Georgetown Planning and Development Division. Per Capital Personal Income: Texas Workforce Commission, Labor Market Information TRACER. School Enrollment: Georgetown Independent School District. Unemployment Rate: Texas Workforce Commission, Labor Market Information TRACER. Notes: Personal income and per capita personal income is for Williamson County. 2005 and 2006 personal income and per capita personal income are estimations. CITY OF GEORGETOWN, TEXAS PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO PercentagePercentage of Total Cityof Total City Employer EmployeesRankEmploymentEmployeesRankEmployment Georgetown ISD1,42013.59%1,00024.28% Williamson County1,300 23.28%800 33.43% St Davids Hospital600 31.51%500 42.14% Southwestern Univ583 41.47%430 51.84% HE Butt Grocer477 51.20%275 61.18% City of Georgetown453 61.14%263 71.13% WalMart306 70.77%180 100.77% Sun City Texas240 80.61%1,500 16.42% Wesleyan Homes240 90.61%- - Airborne, Inc.230 100.58%221 80.95% Manitex- - 190 90.81% Totals5,84914.77%5,35922.95% Source: Finance and Administration Division. 20061997 CITY OF GEORGETOWN, TEXAS FULL TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 20062005200420032002 Function General Government Culture & Recreation Parks21.518.518.519.519.5 Recreation25.526.526.52424 Rec. Programs 33331.5 Library17.517.515.515.515.5 Development Administration4.534.5 Dev. Process Team Current Planning910577 Long Range Planning 43222 Inspection Svcs.111111108 Code Enforcement5.55.55.5 Fire Services Administration 33344 Operations5651464643 Prevention & Comm. Analysis5.55.5 Gen. Govt. Gen. Govt.3333.52 City Council 11111 City Manager's Office6.56.56.55.55.5 Legal Svcs Highways / Streets14.7514.7514.7511.7511.75 Police Services Org. & Administration 88833 Support Svcs.3131323029 Field Operations4741354238 Special Operations Information Mgmt. Professional Standards Animal Svcs.7.56.756.756.756.5 Municipal Court 54433 Fleet Mgmt.5544.54.5 Facilities Mgmt.43211 Information Svcs.10 9888 Joint Svcs.53515046.7542.75 Water1414141317.25 Sewer12129106.25 Electric3025252222 Other Enterprises1111111111 Total418.75395.00374.50362.25347.00 Source: City Finance & Administration Division. Notes: A full-time employee is scheduled to work 2,088 hours per year (including vacation and sick leave). Full-time equivalent employment is calculated by dividing total labor hours by 2,088. 20012000199919981997 19.51816.51615.5 24.252521.519.7519.25 3.53.53.53.53.5 14.51616.251513 676.56.54 77.2589.25 7 91010109.75 4443.753 4334.5332222 64443.75 2.5221.5 6.56.755.254.753.25 5554.5 12.7512.751211.7511.75 34422 22 45333027.526 131515.511 171717.7517 332.252 6.565.754.754.25 2.52.5222 4.54444 11111 876.254.57 39.2538.7536.7539.533.5 15.2515.2514.7513.2513.25 6.25 7764 191716.251619.25 9.7511.7510.7510.59.25 338.00336.25320.25298.50279.50 CITY OF GEORGETOWN, TEXAS OPERATING INDICATORS BY FUNCTIONS LAST TEN FISCAL YEARS Function 2006200520042003 Culture and recreation Recreation Center memberships4,294 2,074 1,538 1,589 CVB number of visitor inquiries37,062 40,117 41,426 33,063 Library Circulation347,662 350,716 330,171 318,820 Number of patrons added1,784 1,684 1,533 1,611 Economic Development Number of proposals generated72 71 59 20 Community Development Inspections/Code Enforcement Number of inspections47,197 39,677 28,389 24,631 New residential permits issued1,316 930 890 612 New commercial permits issued/TFO/Industrial152 132 75 33 Number of code enforcement violations15,603 11,187 2,026 1,948 Planning and Development Services Development applications filed397 280 209 203 Annexations (in acres)8,909 5,062 443 700 Fire Services Number of calls for service4,257 3,957 3,402 3,335 General Govt Bond rating - S&PAA-A+A+A+ City Manager's Office Number of public information requests process 786 616 702 545 Highways and streets Center line miles251 230 202 189 Police Services Number of calls for service48,739 40,649 41,986 36,002 Number of traffic accidents1,513 1,510 1,382 1,425 Animal Services Number of pets impounded1,452 1,775 1,591 1,337 Number of adoptions642 793 696 456 Municipal Court Number of court cases13,824 11,279 11,018 9,417 Number of warrants served398 712 819 489 Utility Office Number of utility customers21,365 19,862 18,621 18,198 Water Number of new connects1,281 670 912 705 Average daily water treated (million gallons)11.888.717.978.21 Average daily consumption (million gallons 3.76 2.79 2.27 2.49 Sewer Number of new connects1,307 1,021 922 685 Average daily wastewater treated (million gallo 2.953.283.072.70 Electric kWhs consumed 419,651,791 377,198,661 350,104,864 343,553,661 Number of new connects1,134 817 473 861 AMR Total reads by AMR34,781 31,373 30,121 26,462 Other Enterprises Stormwater & drainage Number of detention ponds cleaned228 164 113 100 Number of work orders705 - 116 741 Airport Gallons of fuel sold 773,340842,223688,719610,710 Sources: Various City departments and City-Monthly Activity Indicators Report 200220012000199919981997 1,592 2,127 1,976 1,963 - - 15,179 21,190 - 13,000 7,331 5,449 326,282 330,503 276,000 240,319 220,430 206,505 1,781 1,730 1,989 1,836 3,006 2,494 14 6 - - - - 15,602 21,775 23,342 22,842 - - 648 825 931 25 950 891 31 46 48 30 30 25 3,266 2,599 1,126 1,348 - - 182 159 - - - - 101 253 121 58 1,613 996 3,374 3,277 3,194 2,439 2,623 2,422 A+A+AAAA 565 248 80 79 79 103 186 180 172 168 156 146 30,156 33,298 29,428 27,226 - - 1,429 928 1,299 - - - 1,367 1,280 1,352 1,413 1,691 1,418 529 537 - - - - 5,767 6,054 5,854 4,742 4,887 4,174 366 92 - - - - 17,496 16,939 15,718 14,501 13,419 12,531 568 338 - - - - 9.00- - - - - 2.46 2.13 2.46 1.86 2.02 1.36 453 224 - - - - 3.10- - - - - 324,263,223 312,817,728 299,583,307 267,442,707 251,306,259 218,336,403 1,265 230 - - - - 24,351 20,625 - - - - 45 54 15 14 9 4 1,605 1,635 - - - - 709,293653,916631,377379,318301,252260,248 CITY OF GEORGETOWN, TEXAS SUMMARY OF INSURANCE COVERAGE 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 SEPTEMBER 30, 2006 COVERAGE POLICY PERIOD DESCRIPTION LIMIT PREMIUM October 1, 2005 toAirport, Aviation$20,000,000occ$16,821 September 30, 2006Non-owned aircraft, 50,000Fire (Hangarkeepers)Hangar2,000,000Aircraft Liability5,000,000occ October 1, 2005 toDamage caused by5,000,000occ45,422 September 30, 2006 City Vehicles25,000person October 1, 2005 toDamage caused toACV48,422 September 30, 2006 City Vehicles October 1, 2005 toLibrary HVAC 2,000,000accident Included September 30, 2006 Direct Damage October 1, 2005 toGeneral Liability10,000,000agg annual69,322 September 30, 20065,000,000occ October 1, 2005 toPolice Department10,000,000annual34,229 September 30, 20065,000,000occ October 1, 2005 toDamage toper schedule10,390 September 30, 2006 Mobile Equipment1,732,287 October 1, 2005 toCrime/Public Employee500,0003,524 September 30, 2006Crime/Theft disappearance Destruction (inside/outside)300,0001,116 October 1, 2005 toMayor, Council, City Attorney10,000,000annual Included September 30, 2006 Boards, Commissions5,000,000occ and Employees October 1, 2005 toReal / Personal78,159,513147,106 September 30, 2006 Propertyper schedule October 1, 2005 toLosses as Prescribedper TWCC84,432 September 30, 2006 by the Texas Workers'Statute Compensation Law October 1, 2005 toPollution Liability1,000,000ann agg2,395 September 30, 2006 Underground Storage Tanks1,000,000occ October 1, 2005 toPolice Canine Loss of use/per schedule500 September 30, 2006 Theft mortality/Vet/Surgical1 PD canines October 1, 2005 toErrors and Omissions5,000,000wrongful agg September 30, 2006Includes Public Officials10,000,000annual83,404 TOTAL 547,083$ Compliance Section Report on internal control over financial reporting and on compliance and other matters based on an audit of financial statements performed in accordance with Government Auditing Standards.