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CC 2010-04-26 Agendas
CITY OF NORTH RICHLAND HILLS CITY COUNCIL WORK SESSION AGENDA NORTH RICHLAND HILLS CITY HALL CITY COUNCIL WORKROOM 7301 NORTHEAST LOOP 820 NORTH RICHLAND HILLS, TEXAS Monday, April 26, 2010 5:30 P.M. A.1 Discuss Items from Regular City Council Meeting A.2 IR 2010-029 Community Garden Project (20 Minutes) B.0 EXECUTIVE SESSION -The City Council may enter into closed Executive Session to discuss the following as authorized by Chapter 551, Texas Government Code B.1 Executive Session: Pursuant to Section 551.071 Texas Government Code for Consultation with Attorney regarding Pending Litigation - 1) Hometown Urban Partners, Ltd. vs. City of North Richland Hills (No. 096-236530-09); 2) Arcadia Land Partners 25 Ltd., et al vs. City of North Richland Hills (No. 067-241297-09); 3) Venue at Hometown vs. City of North Richland Hills, et al (No. 352-237213-09) C.0 Adjournment Certification I do hereby certify that the above notice of meeting of the North Richland Hills City Council was posted at City Hall, City of North Richland Hills, Texas in compliance with Chapter 551, Texas Government Code on April 23, 2010 at ~'. KZ ,rf1R.. ~ r ;~ f ~~~ ~ sist nt City Secretary This facility is wheelchair accessible and accessible parking spaces are available. Requests for accommodations or interpretive services must be made 48 hours prior to this meeting. Please contact the City Secretary's office at 817-427-6060 for further information. The City Council may confer privately with its attorney to seek legal advice on any matter listed on the agenda or on any matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551, Texas Government Code. NRH City Council Agenda -April 26, 2010 Page 1 of 4 CITY OF NORTH RICHLAND HILLS CITY COUNCIL AGENDA CITY HALL COUNCIL CHAMBERS 7301 NORTHEAST LOOP 820 NORTH RICHLAND HILLS, TEXAS Monday, April 26, 2010 7:00 P.M. Copies of the full City Council agenda information packet are accessible prior to every regularly scheduled Monday Council meeting according to the following locations and schedule: o City Hall on the day of the meeting (hard copy available) Additionally, the agenda packet is available for download from the City's web site at www.nrhtx.com after 5:00 p.m. on the Friday prior to every regularly scheduled Council meeting. ---------------------------------------------------------------------------------------------------------------------------- A.0 Call to Order -Mayor Trevino A.1 Invocation -Councilman Barth A.2 Pledge -Councilman Barth A.3 Special Presentation(s) and Recognitions) -Yard of the Month Winners presented by Councilman Lewis A.4 Special Presentation(s) and Recognitions) - IR 2010-030 Certificate of Achievement for Excellence in Financial Reporting for the Comprehensive Financial Report ending September 30, 2008 A.5 Special Presentation(s) and Recognitions) - IR 2010-028 STAR Community Index presented by Councilman Barth A.6 Special Presentation(s) and Recognitions) - A Look Through the Lens -North Richland Hills in Bloom A.7 Citizens Presentation An opportunity for citizens to address the City Council on matters which are not scheduled for consideration by the City Council or another City Board or Commission at a later date. In order to address the Council, please complete a Public Meeting Appearance Card and present it to the City Secretary prior to the start of the Council meeting. The Texas Open Meetings Act prohibits deliberation by the Council of any NRH City Council Agenda -April 26, 2010 Page 2 of 4 subject which is not on the posted agenda, therefore the Council will not be able to discuss or take action on items brought up during the citizens presentation. A.8 Removal of Item(s) from Consent Agenda B.0 CONSIDER APPROVAL OF CONSENT AGENDA ITEMS All consent agenda items listed below are considered to be routine items deemed to require little or no deliberation by the City Council and will be voted on in one motion. There will be no separate discussion of these items unless a Council Member so requests, in which event the item will be removed from the Consent Agenda and considered. B.1 Approval of Minutes of April 12, 2010 City Council Meeting B.2 PU 2010-010 Award Bid 10-026 for NRH2O Food Service Products to C.D. Hartnett, Texas Beverage, Ben E. Keith, La Creme Coffee & Tea and Flowers Baking Co. C.0 PUBLIC HEARINGS No items for this category. D.0 PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. No items for this category. E.0 PUBLIC WORKS No items for this category. F.0 GENERAL ITEMS F.1 GN 2010-021 Presentation of Fiscal Year 2009 Audited Financial Report F.2 GN 2010-024 Appointment to Teen Court Advisory Board -Place 5 G.0 EXECUTIVE SESSION ITEMS G.1 Action on Any Item Discussed in Executive Session Listed on Work Session Agenda H.0 INFORMATION AND REPORTS H.1 Announcements -Mayor Pro Tem Turnage H.2 Adjournment NRH City Council Agenda -April 26, 2010 Page 3 of 4 All items on the agenda are for discussion and/or action. Certification do hereby certify that the above notice of meeting of the North Richland Hills City Council was posted at City Hall, City of North Richland ills, Texas in compliance with Chapter 551, Texas Government Code on April 23, 2010 at -----.;'1, ./I l1 , . ry This facility is wheelchair accessible and accessible parking `spaces are available. Requests for accommodations or interpretive services must be made 48 hours prior to this meeting. Please contact the City Secretary's office at 817-427-6060 for further information. The City Council may confer privately with its attorney to seek legal advice on any matter listed on the agenda or on any matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551, Texas Government Code. NRH City Council Agenda -April 26, 2010 Page 4 of 4 City of North Richland Hills City Council Work Session Meeting Agenda North Richland Hills City Hall City Council Workroom 7301 Northeast Loop 820 North Richland Hills, TX 76180 Monday, April 26, 2010 5:30 P.M. A.1 Discuss Items from Regular City Council Meeting A.2 IR 2010-029 Community Garden Proiect (20 Minutes) B.0 EXECUTIVE SESSION -The City Council may enter into closed Executive Session to discuss the following as authorized by Chapter 551, Texas Government Code B.1 Executive Session: Pursuant to Section 551.071 Texas Government Code for Consultation with Attorney regarding Pending Litigation - 1) Hometown Urban Partners, Ltd. vs. City of North Richland Hills (No. 096-236530-09); 2) Arcadia Land Partners 25 Ltd., et al vs. City of North Richland Hills (No. 067-241297-09~ 3) Venue at Hometown vs. City of North Richland Hills, et al (No. 352-237213-09) C.0 Adjournment CITY OF NORTH R/CHLAND HILLS Department: City Secretary Council Meeting Date: 4-26-2010 Presented by: Agenda No. A.1 Subject: Discuss Items from Regular City Council Meeting INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. IR 2010-029 Date: April 26, 2010 Subject: Community Garden Project An opportunity exists to create a community garden in North Richland Hills in cooperation with Davis Memorial United Methodist Church. Community gardens are places where neighbors can gather to cultivate plants, vegetables and fruits. Such gardens can improve nutrition, physical activity, community engagement, safety, and economic vitality for a neighborhood or city and its residents. By developing a community garden, the City would be promoting healthy eating and active living which supports the Mayor's Health and Fitness Initiative. The City would provide the organizational structure, oversight of construction and coordination of volunteers for the Community Garden. Davis Memorial United Methodist Church has agreed to provide the land for up to 70 garden plots adjacent to the church on Davis Boulevard. Characteristics of a Community Garden After conducting extensive Internet research, City staff along with Councilman Turnage toured the Coppell and Farmers Branch Community Gardens and discovered the following characteristics for a successful program: • Organizational structure built on volunteers • Donation of produce to food pantries • Includes individuals of various ages and backgrounds • Offers educational opportunities and vocational skills for youth • Focuses on "green" principles and organic gardening • Provides an opportunity for workshops and classes for all levels of gardeners • Provides positive social interaction and community building • Enables gardeners to sell their produce through local farmers markets ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS ~ Benefits of a Community Garden Nutrition -Food Security & Access Limited access to healthy foods, such as fruits and vegetables, is a major barrier to healthy eating. Expensive fruits and vegetables may be cost prohibitive for low-income families. Community gardens provide residents of underserved communities the opportunity to grow their own fruits and vegetables, increasing access and affordability. Educational Opportunities Hands-on exposure to community gardens can teach children about the source of fresh produce, demonstrate community stewardship and introduce the importance of environmental sustainability. In addition, gardens are great places for children to learn math, business and communication skills through applied activities and interaction. Environmental Benefits • Green vegetation can reflect as much as 20 to 25 percent of radiation from the sun, thus reducing the heat island effect in cities and cooling the climate in urban areas. • Eating locally produced foods reduces fuel consumption, carbon dioxide emissions, and a variety of other negative environmental consequences associated with the transportation of foods. • Garden soil is an absorbent substance that reduces runoff from the rain and helps minimize surface erosion. • Community gardens reduce pollutants in our air by absorbing carbon dioxide. Community Services Community gardens can be integrated into broader community projects, such as after- school programs for children, service projects for Boy Scouts, activities for the elderly and a resource for food banks. Funding for the Community Garden Capital Cost The estimated cost of materials for constructing the Community Garden is approximately $46,000. The labor would be provided by volunteers and minimal City staff, with support from various organizations. Since funding is not available in this fiscal year, sponsorships and donations would need to be acquired. To fill in sponsorship gaps, a new project for the Community Garden has been included in the Proposed FY 2010/2011 Park Development Corporation Budget. Budget approval of this project will depend on available funding and the projects priority when compared to other submitted projects. Annual Cost The annual costs of most community gardens are minimal because community residents, rather than City employees, are responsible for maintaining the gardens. The most significant costs to the City will be water for irrigation and insurance liability. Staff will provide a PowerPoint Presentation outlining information on initiating a community garden and Council is requested to provide comments on initiating such a project. Respectfully Submitted, Vickie Loftice Managing Director of Community Services CITY OF CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 4-26-2010 Presented by: Agenda No. B.1 Subject: Executive Session: Pursuant to Section 551.071 Texas Government Code for Consultation with Attorney regarding Pending Litigation - 1) Hometown Urban Partners, Ltd. vs. City of North Richland Hills (No. 096-236530-09); 2) Arcadia Land Partners 25 Ltd., et al vs. City of North Richland Hills (No. 067-241297-09); 3) Venue at Hometown vs. City of North Richland Hills, et al (No. 352-237213-09)) CITY OF NORTH R/CHLAND HILLS Department: City Secretary Council Meeting Date: 4-26-2010 Presented by: Agenda No. C.0 Subject: Adjournment City of North Richland Hills City Council Regular Meeting Agenda North Richland Hills City Hall Council Chambers 7301 Northeast Loop 820 North Richland Hills, TX 76180 Monday, April 26, 2010 7:00 P.M. A.0 Call to Order -Mayor Trevino A.1 Invocation -Councilman Barth A.2 Pledge -Councilman Barth A.3 Special Presentation(s) and Recognitions) - Yard of the Month Winners presented by Councilman Lewis A.4 Special Presentation(s) and Recognitions) - IR 2010-030 Certificate of Achievement for Excellence in Financial Reporting for the Comprehensive Financial Report ending September 30, 2008 A.5 Special Presentation(s) and Recognitions) - IR 2010-028 STAR Community Index presented by Councilman Barth A.6 Special Presentation(s) and Recognitions) - A Look Through the Lens -North Richland Hills in Bloom A.7 Citizens Presentation An opportunity for citizens to address the City Council on matters which are not scheduled for consideration by the City Council or another City Board or Commission at a later date. In order to address the Council, please complete a Public Meeting Appearance Card and present it to the City Secretary prior to the start of the Council meeting. The Texas Open Meetings Act prohibits deliberation by the Council of any subject which is not on the posted agenda, therefore the Council will not be able to discuss or take action on items brought up during the citizens presentation. A.8 Removal of Item(s) from Consent Agenda B.0 CONSIDER APPROVAL OF CONSENT AGENDA ITEMS All consent agenda items listed below are considered to be routine items deemed to require little or no deliberation by the City Council and will be voted on in one motion. There will be no separate discussion of these items unless a Council Member so requests, in which event the item wilt be removed from the Consent Agenda and considered. B.1 Approval of Minutes of April 12, 2010 City Council Meeting B.2 PU 2010-010 Award Bid 10-026 for NRH20 Food Service Products to C.D. Hartnett, Texas Beverage, Ben E. Keith, La Creme Coffee & Tea and Flowers Baking Co. C.0 PUBLIC HEARINGS No items for this category. D.0 PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. No items for this category. E.0 PUBLIC WORKS No items for this category. F.0 GENERAL ITEMS F.1 GN 2010-021 Presentation of Fiscal Year 2009 Audited Financial Report F.2 GN 2010-024 Appointment to Teen Court Advisory Board -Place 5 G.0 EXECUTIVE SESSION ITEMS G.1 Action on Any Item Discussed in Executive Session Listed on Work Session Agenda H.0 INFORMATION AND REPORTS H.1 Announcements -Mayor Pro Tem Turnage H.2 Adjournment CITY OF NORTH RICHLAND HILLS Department: City Secretary Presented by: Mayor Oscar Trevino Council Meeting Date: 4-26-2010 Agenda No. A.0 Subject: Call to Order -Mayor Trevino CITY OF CITY OF CITY OF NORTH R/CHLAND HILLS Department: City Secretary Council Meeting Date: 4-26-2010 Presented by: Doris Tipps Agenda No. A.3 Subject: Special Presentation(s) and Recognitions) -Yard of the Month Winners presented by Councilman Lewis The April, 2010 winners are: AREA 1 Isabell Martinez, 3517 Bewley St. AREA 2 Duane Stubblefield, 7105 Briley Dr. AREA 3 Cathy Tucker. 6308 Inverness AREA 4 Barbara Lipper, 7553 Circle Dr. AREA 5 Michael Sherrill, 8016 Ulster Dr. AREA 6 David Vibbard, 7009 Goodnight Ranch Rd. AREA 7 Frank Kossler, 8800 Thornway Dr. AREA 8 Judy C. Young, 7813 Redwood Ct. AREA 9 Jim & Barbara Tedesco, 7712 Silverleaf Drive Business Landscape Don Pablo's, 5121 Rufe Snow Dr SmartScape Gwendolyn Weisell, 7505 Orchard Court CITY OF _-_-_ INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. IR 2010-030 Date: April 26, 2010 Subject: Special Presentation -Certificate of Achievement for ' Excellence in Financial Reporting for the Comprehensive Financial Report ending September 30, 2008 The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Financial Report for the fiscal year ending September 30, 2008. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. The Certificate of Achievement is valid for a period of one year only. The City has been awarded a Certificate of Achievement for the last 26 consecutive years. The GFOA 2007 report of results of the program indicates that of the nearly 1,200 municipalities in the State of Texas 172 or 14% received the award. Of the nearly 36,000 cities in the United States, 1,799 or 5% received the award. The Certificate of Achievement for Excellence in Financial Reporting Program was established by the Government Finance Officers Association (GFOA) in 1945. The GFOA instituted the program to encourage all government units to prepare and publish an easily readable and understandable comprehensive annual financial report (CAFR) covering all funds and financial transactions of the government during the fiscal year. The GFOA believes that governments have a special responsibility to provide the public with a fair presentation of their financial affairs. CAFR's go beyond the requirements of generally accepted accounting principles (GAAP) to provide the many users of government financial statements with a wide variety of information useful in evaluating the financial condition of a government. The Certificate Program provides participants with extensive technical reference materials to improve their financial reporting techniques. Suggestions and comments from reviewers also help staff to improve the document. Another great benefit of the Certificate of Achievement program is that it provides a detailed vehicle by which bond rating analysts, market analysts, investors, potential investors and others may assess the relative attractiveness of our City's bonds compared to alternative investment opportunities. Users of the City financial statements look for this award and regard it as the "Good Housekeeping Seal of Approval" for governmental financial reporting. Council will notice a facsimile of the 2008 certificate on page XIV of the 2009 CAFR in your packet. ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS Fred Werner, Director of Finance with the City of Grapevine and past President of the Government Finance Officers Association of Texas, will be at the Council meeting to present the Certificate of Achievement award to the City. Although no action is needed by Council, we do commend the Accounting staff for their professional efforts that have made it possible for the City to again receive this prestigious award. This is truly a team effort by City Council, Management, and staff and meets Council Goal 4: Financial Stability. Respectfully Submitted, Larry Koonce Director of Finance CITY OF INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. IR 2010-028 Date: April 26, 2010 Subject: STAR Community Index Summary Councilman Tim Barth will brief the City Council and the community on the STAR Community Index, which he has been helping to develop. The STAR Community Index (STAR) is a national, consensus-based framework for gauging the sustainability and livability of American communities. STAR was developed through a partnership between Local Governments for sustainability (ICLEI), the U.S. Green Building Council (USGBC) and the Center for American Progress (CAP). STAR is being developed to be similar to the LEED guidelines for sustainability, but directed towards communities and not individual structures and projects. It is expected that STAR will become the definitive means by which local governments measure and certify their sustainability achievements. Description The STAR Community Index is being developed by ICLEI, USGBC and CAP to answer the growing need of a nationwide framework to guide sustainable community initiatives. While many local governments have developed frameworks that fit their localities' needs, there is no system to compare the progress of one locality against another. This reduces the opportunity to leverage change and share lessons learned. STAR is designed to be this national framework. STAR will provide a national, consensus-based system with indicators and metrics that will help local governments set priorities and maximize their investments in strategic actions. Local governments will now have an opportunity to certify their achievements through independent, third- party verification. STAR will showcase model policies and best practices so other local governments can discover programs that work and help their communities become more livable and sustainable. STAR is based on the success of the LEED rating system for buildings. In fact, one of STAR's creators, USGBC, is behind the LEED rating system. In just 12 years of existence LEED has become the standard to judge the environmentally sustainable design, construction and operation of buildings. STAR hopes to become the same thing to communities. STAR will differ from LEED in that it is planned that STAR certification will not require a fee as LEED certification does. The creators of STAR want to promote participation in the community index. ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS STAR is being developed by local governments and organizations that address the needs and interests of communities. The engagement process is open, consensus- based and led by volunteer committees. Councilman Barth serves on the STAR Community Index's Education, Arts and Community Technical Advisory Committee. That committee is charged with education excellence, arts and culture, and civic engagement and vitality. Dr. Barth's goal on that committee is to increase civic literacy and engagement in sustainability efforts and issues. At the April 26, 2010 City Council Regular Session, Councilman Barth will discuss the development of the STAR Community Index up to this point and his work on the program. Respectfully Submitted, Dr. Tim Barth City Councilman CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 4-26-2010 Presented by: Vickie Loftice Agenda No. A.6 Subject: Special Presentation(s) and Recognitions) - A Look Through the Lens -North Richland Hills in Bloom In celebration of spring and the beautiful natural areas within North Richland Hills, a 2'h minute video will be shown highlighting our City in bloom as well as recent community events. Each month, a one to two minute video will be shown during City Council after the Announcements section of the meeting. These monthly videos will highlight images of various places, parks, hidden natural treasures (like the 250 year pecan tree along Walkers Creek Trail) as well as recent events in the city. The photos and images will be provided by staff and our citizens. The videos will be a positive reflection of the beautiful areas and images of our City and the pride our citizens have for North Richland Hills. CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 4-26-2010 Presented by: Agenda No. A.7 Subject: Citizens Presentation An opportunity for citizens to address the City Council on matters which are not scheduled for consideration by the City Council or another City Board or Commission at a later date. In order to address the Council, please complete a Public Meeting Appearance Card and present it to the City Secretary prior to the start of the Council meeting. The Texas Open Meetings Act prohibits deliberation by the Council of any subject which is not on the posted agenda, therefore the Council will not be able to discuss or take action on items brought up during the citizens presentation. CITY OF NORTH RICHLAND HILLS Department: City Secretary Presented by: Council Meeting Date: 4-26-2010 Agenda No. A.8 Subject: Removal of Item(s) from Consent Agenda CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 4-26-2010 Presented by: Agenda No. B.0 Subject: CONSIDER APPROVAL OF CONSENT AGENDA ITEMS All consent agenda items listed below are considered to be routine items deemed to require little or no deliberation by the City Council and will be voted on in one motion. There will be no separate discussion of these items unless a Council Member so requests, in which event the item will be removed from the Consent Agenda and considered. CITY OF MINUTES OF THE WORK SESSION AND REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, HELD IN THE CITY HALL, 7301 NORTHEAST LOOP 820 -APRIL 12, 2010 WORK SESSION The City Council of the City of North Richland Hills, Texas met in work session on the 12th day of April, 2010 at 6:00 p.m. in the City Council Workroom prior to the 7:00 p.m. regular Council meeting. Present: Oscar Trevino Mayor Scott Turnage Mayor Pro Tem, Council, Place 6 John Lewis Council, Place 1 Ken Sapp Council, Place 2 Tom Lombard Council, Place 3 Tim Barth Council, Place 4 David Whitson Council, Place 5 Tim Welch Council, Place 7 Staff Members: Mark Hindman City Manager Jared Miller Assistant City Manager Karen Bostic Assistant City Manager Mike Curtis Managing Director Vickie Loftice Managing Director Patricia Hutson City Secretary George Staples City Attorney Mary Peters Public Information Officer Elizabeth Reining Assistant to City Manager John Pitstick Director of Planning & Development Larry Koonce Finance Director Craig Hulse Economic Development Director Greg VanNieuwenhuize Assistant Public Works Director Tim Doyle Fleet Services Superintendent Andy Kancel Assistant Police Chief Mike Hamlin Assistant Police Chief Jamie Brockway Purchasing Manager Call to Order Mayor Trevino called the work session to order at 6:00 p.m. A.1 Discuss Items from Regular City Council Meeting There were no questions from Council. A.2 IR 2010-025 Discuss Economic Development Strategic Plan Mr. Craig Hulse, Economic Development Director, presented a PowerPoint presentation on a possible update to the 2003 Economic Development Strategic Plan. The plan has not been updated since its creation. While the plan includes ongoing strategies and actions that continue to support Council's Goals and Actions, Staff is seeking direction from the Council on an update to the plan. The objective of an update would be to validate, revise and reprioritize existing goals and actions. Staff advised Council of recommended steps to update the plan and requested feedback on 1) the need to update the Plan; 2) the process and 3) specific individuals who should be stakeholders and included in the effort. After a brief discussion, the consensus of the Council was to integrate the update with the Council's January 2011 Goals Work Session and obtain input from the Economic Development group after the Goals Work Session and before adoption by Council. A.3 IR 2010-026 Discuss Cities Aggregation Power Project Legislative Efforts Pertaining to the Sunset Commission's Review of the Public Utility Commission and the Electric Reliability Council of Texas Ms. Karen Bostic, Assistant City Manager, presented a PowerPoint presentation explaining a request from the Cities Aggregation Power Project's (CAPP) Board of Directors to member cities to approve a resolution in support of their legislative agenda. The CAPP Board has voted to authorize certain legislative efforts pertaining to the Sunset Commission's review of the Public Utility Commission (PUC) and the Electric Reliability Council of Texas (ERGOT). CAPP has formulated recommendations for the Sunset Advisory Commission as it conducts its PUC and ERGOT reviews. Their recommendations are intended to improve competition in the electric marketplace by making the PUC and ERGOT more accountable to consumers by limiting market power and by creating competitive options for all customers. CAPP will recommend legislative action related to the Sunset Commission's examination of both the PUC and ERGOT. Ms. Bostic gave an overview of the legislative changes proposed by the CAPP Board and advised if Council supported the changes, an item would be placed on a future agenda for approval. Council was also advised that in lieu of approving the resolution, Council could opt for the City Manager to send a letter. After discussion, Council directed Staff to bring their recommendations of legislative efforts to support to an upcoming council work session for Council consensus and then instead of Council approving a resolution the City Manager will send a letter to CAPP. A.4 IR 2010-027 Canvass Date for May 8, 2010 Election Ms. Patricia Hutson, City Secretary, advised Council that in compliance with State law the canvass of the May 8 General election has been set for Monday, May 17 at 6:00 p.m. The Crime District Board of Directors will also meet at 5:45 p.m. on May 17 to canvass the Special Election for the Crime District. B.0 EXECUTIVE SESSION -The City Council may enter into closed Executive Session to discuss the following as authorized by Chapter 551, Texas Government Code No items for this category. C.0 Adjournment Mayor Trevino announced at 6:35 p.m. that the Council would adjourn to the regular Council meeting. REGULAR COUNCIL MEETING A.0 CALL TO ORDER Mayor Trevino called the meeting to order April 12, 2010 at 7:00 p.m. ROLL CALL Present: Oscar Trevino Scott Turnage John Lewis Ken Sapp Tom Lombard Tim Barth David Whitson Tim Welch Staff: Mark Hindman Jared Miller Karen Bostic Mike Curtis Vickie Loftice Patricia Hutson George Staples Mayor Mayor Pro Tem, Council, Place 6 Council, Place 1 Council, Place 2 Council, Place 3 Council, Place 4 Council, Place 5 Council, Place 7 City Manager Assistant City Manager Assistant City Manager Managing Director Managing Director City Secretary Attorney A.1 INVOCATION Mayor Pro Tem Turnage gave the invocation. A.2 PLEDGE OF ALLEGIANCE Cub Scout Pack 525, Den 4 led the pledge of allegiance. A.3 SPECIAL PRESENTATION(S) AND RECOGNITIONS) PROCLAMATION CELEBRATING THE 35TH ANNIVERSARY OF CLAYTON YOUTH ENRICHMENT SERVICES (CLAYTON YES!) Councilman Lombard presented proclamation to Robert Duke, Executive Director, and Kimberly Coleman, Board of Directors member of Clayton Youth Enrichment Services (Clayton YES!) in recognition of their 35'h anniversary of providing youth enrichment activities in the community. A.4 SPECIAL PRESENTATION(S) AND RECOGNITIONS) - PROCLAMATION FOR CHILD ABUSE PREVENTION MONTH PRESENTED BY COUNCILMAN LEWIS Councilman Lewis presented proclamation recognizing Child Abuse Prevention Month to Ms. Nancy Hagan, Executive Director for Alliance for Children. A.4 CITIZENS PRESENTATION None. A.5 REMOVAL OF ITEM(S) FROM THE CONSENT AGENDA None. B.0 APPROVAL OF CONSENT AGENDA ITEMS APPROVED B.1 APPROVAL OF MINUTES OF MARCH 22, 2010 CITY COUNCIL MEETING B.2 GN 2010-023 AMENDING RESOLUTION NO. 2010-008 TO ESTABLISH EARLY VOTING LOCATIONS FOR MAY 8, 2010 ELECTION -RESOLUTION NO. 2010-017 B.3 PU 2010-008 RENEW BID NO. 09-014 TOPSOIL, SAND AND FLEXBASE MATERIAL TO MULTIPLE VENDORS B.4 PW 2010-017 APPROVE A PUBLIC RIGHT-OF-WAY USE AGREEMENT (NATURAL GAS PIPELINE CROSSING) WITH ENTERPRISE TEXAS PIPELINE, LLC, FOR THE INSTALLATION OF A 30-INCH DIAMETER GAS PIPELINE WITHIN ONYX DRIVE SOUTH RIGHT-OF-WAY 6.5 PW 2010-018 APPROVE A PUBLIC RIGHT-OF-WAY USE AGREEMENT (NATURAL GAS PIPELINE CROSSING) WITH TEXAS MIDSTREAM GAS SERVICES, LLC, FOR THE INSTALLATION OF A 24-INCH DIAMETER GAS PIPELINE WITHIN ONYX DRIVE SOUTH RIGHT-OF-WAY B.6 PU 2010-009 AUTHORIZE THE PURCHASE OF AN AERIAL BUCKET TRUCK FROM PHILPOTT MOTORS FLEET IN THE AMOUNT $129,121 COUNCILMAN "WHITSON :MOVED"? TO APPROVE THE CONSENT AGENDA. MAYOR:-PRO TEM TURNAGE SECONDED THE MOTION.. MOTION TO APPROVE CARRIED 7-Q. PUBLIC HEARINGS No items for this category. PLANNING & DEVELOPMENT No items for this category. PUBLIC WORKS E.1 PW 2010-016 AWARD A PROFESSIONAL SERVICES AGREEMENT TO BROCKETTE/DAVIS/DRAKE, INC. IN THE AMOUNT OF $44,500.00 FOR THE BROOKHAVEN DRIVE DRAINAGE IMPROVEMENTS (DR0902) APPROVED Mr. Gregory VanNieuwenhuize, Assistant Public Works Director, presented the item. Staff is requesting approval of a contract in the amount of $44,500 with Brockette/Davis/Drake, Inc for the Brookhaven Drive Drainage Improvements project. The project is one of twelve drainage projects identified in the 2009-10 Capital Projects Budget. Eight of these projects address drainage issues exposed by the significant storm events in the Spring and Summer of 2007. The project consists of the engineering design of a storm drainage system beginning at/around an existing culvert under Brookview Drive (approximately 150' east of Stonybrooke Drive), traversing west along Brookview Drive, north along Stonybrooke Drive, and west along Brookhaven Drive to the end of street. Council inquired if this was the neighborhood that had previously expressed to Council their concerns with drainage. Mr. Curtis advised it was the same neighborhood, but not the same area; the drainage for the project will not discharge into the specific channel of concern. COUNCILMAN WELCH MOVED TO APPROVE PW 2010-016, AWARQWG A PROFESSIONAL SERVICES AGREEMENT TO BROCKETTE/DAVIS/DRAKE, INC. IN THE AMOUNT OF $44,500 FOR THE BROOKHAVEN DRIVE DRAINAGE IMPROVEMENTS (STO902) ANQ AUTHORIZE THE CITY MANAGER TO EXECUTE SUCH PROFESSIONAL SERVICES AGREEMENT. COUNCILMAN LOMBARD SECONDED THE MOTION. MOTION TO APPROVE CARRIEQ 7-0. GENERAL ITEMS F.1 GN 2010-025 AWARD A PROFESSIONAL SERVICES CONTRACT WITH SCHRICKEL, ROLLINS AND ASSOCIATES (SRA) IN THE AMOUNT OF $197,500 FOR PROFESSIONAL SERVICES RELATED TO THE FOOD SERVICES BUILDING AND THE 2011 NEW ATTRACTION AT NRH2O APPROVED Mr. Joe Pack, Capital Projects Superintendent, presented the item. Staff is recommending approval of a contract in the amount of $197,500 with Schrickel, Rollins and Associates for two new NRHzO Capital Improvement Program projects identified as "Food Services Building" and "New Attraction 2011". The contract will include the design of a new water park attraction and a new food services building to be generally located in the southwest area of the park between the Accelerator and west property line and in the vicinity of the Hopper. COUNCILMAN SAPP MOVED TO APPROVE GN 201©-025, AWARDING A PROFESSIONAL SERVICES CONTRACT WITH SCHRICKEL, ROLLINS AND ASSOCIATES IN THE AMOUNT OF $197,500 FOR THE PROFESSIONAL SERVICES RELATED TO THE FOOD SERVICES BUILDING AND 2011 NEW ATTRACTION FOR NR20 AND AUTHORIZE THE CITY MANAGER TO EXECUTE SUCH PROFESSIONAL SERVICES CONTRACT. COUNCILMAN BARTH SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7-O. EXECUTIVE SESSION ITEMS G.1 ACTION ON ANY ITEM DISCUSSED IN EXECUTIVE SESSION LISTED ON WORK SESSION AGENDA There were no items for this category. INFORMATION AND REPORTS H.1 ANNOUNCEMENTS Councilman Whitson made the following announcements. The Sounds of Spring Concert Series will be held each Friday from April 16th through May 7th at NRH2O. Gates open at 6 p.m. and the concerts begin at 7 p.m. Admission is FREE. Remember to bring blankets and lawn chairs. For more information, call 817- 427-6600 or visit www.soundsnrh.com. On Saturday, April 17th, residents can get rid of unwanted bulky items during the annual Spring Community Cleanup. Items can be dropped off from 9 a.m. to noon in Parking Lot E at the Tarrant County College Northeast Campus located at 828 Harwood Road. Proof of residency must be presented. For more details, please call 817-427-6663. The NRH Animal Adoption & Rescue Center will host a low cost pet vaccination clinic on Saturday, April 24th from 10 am to noon at Linda Spurlock Park. Rabies vaccinations will be offered for only $5. Residents can also register their pet and get a city license tag for $7. Linda Spurlock Park is located at 6400 Glenview Dr. For more information please call 817-427-6570. Kudos Korner -Dave Pendley, Planning & Development Department. An a-mail was received from a home builder thanking Dave for taking the time to provide him with information on the proper installation of Thermo-Ply Sheathing. Dave definitely saved him time and money. "I greatly appreciate your being proactive in helping educate not only me but other builders," the a-mail stated. H.2 ADJOURNMENT Mayor Trevino adjourned the meeting at 7:29 p.m. Oscar Trevino -Mayor ATTEST: Patricia Hutson, City Secretary CITY OF NORTH RICHLAND HILLS Department: Finance Council Meeting Date: 4-26-2010 Presented by: VLoftice/LKoonce Agenda No. B.2 Subject: PU 2010-010 Award Bid 10-026 for NRH20 Food Service Products to C.D. Hartnett, Texas Beverage, Ben E. Keith, La Creme Coffee & Tea and Flowers Baking Co. Request Council to award Bid 10-026 NRH20 Food Service Products to multiple vendors for a seasonal contract covering a five (5) month period (May 1 through Sept 30). Bidders were requested to submit prices on a list of specific food items as well as specific brands that were high volume over the past year. Evaluation factors include brand of food item offered, price, quality, and customer service response and will be awarded by section as indicated in the bid specification. Due to the annual contract exceeding $50,000 for these resale items we are recommending to council that this contract be awarded by section to multiple vendors. Seventeen (17) vendors were contacted and requested to participate in this process. Bid specifications were viewed on the City Purchasing Website by nine (9) additional vendors. Twelve (12) bids were received from the following firms: Bar W Foods Ben E. Keith Berk Concessions Blue Bell Caffe D Amore C. D. Hartnett Flowers Baking Co. La Creme Coffee & Tea Pizza Supply Pollock Texas Beverage Yumi Ice Cream Section A -Core Foods to be awarded to C. D. Hartnett Section B -Pizza will not be awarded Section C -Nachos to be awarded to Texas Beverage Section D -Misc. Foods to be awarded to Ben E. Keith Section E -Specialty Beverages to be awarded to La Creme Coffee & Tea Section F -Specialty Snacks to be awarded to C. D. Hartnett Section G -Degreasers to be awarded to C. D. Hartnett Section H -Breads to be awarded to Flowers Baking Co. Section I -Paper Products to be awarded to C. D. Hartnett Section J -Novelty Ice Cream section will not be awarded Section B will not be awarded; further evaluation of products and delivery method are still being evaluated to determine the most cost effective method of supplying this product to park patrons. All bids submitted for Section J were incomplete; this section will not be awarded Recommendation: Award Bid 10-026 for NRH2O Food Service Products to C.D. Hartnett, Texas Beverage, Ben E. Keith, La Creme Coffee & Tea and Flowers Baking Co. CITY OF CITY OF CITY OF CITY OF CITY OF NORTH R/CHLAND HILLS Department: Finance Council Meeting Date: 4-26-2010 Presented by: Larry Koonce Agenda No. F.1 Subject: GN 2010-021 Presentation of Fiscal Year 2009 Audited Financial Report The results of the fiscal year (FY) 2009 Comprehensive Annual Financial Report (CAFR) for the City will be presented by Director of Finance, Larry Koonce. A representative of the independent audit firm of Deloitte and Touche will present the audit opinion. A draft of the CAFR is attached to this cover sheet. The final report will be distributed to the Mayor and Council at the meeting on Monday night. The only expected change will be a signature on the Independent Auditors' Report on page 1 of the financial section (see table of contents). This was the first year in several years that Deloitte and Touche were appointed by City Council as independent auditors of the City's financial statements. As a result they started "from scratch" with their audit procedures. They were very thorough in their examination and looked at internal control procedures and detailed accounting transactions. In addition, the Sarbanes-Oxley Act has heavily influenced the scrutiny of audits of municipalities. The auditor's opinion (see Independent Auditor's Report above) is an unqualified opinion or "clean" opinion again this year. This means that they have found the Financial Statements of the City of North Richland Hills to fairly present our financial position. In addition to the Independent Auditors' Report, Deloitte and Touche are required to issue a Report to Management on internal controls procedures and Single Audit Reports (federal grants). These reports will include audit findings and management's responses to auditor recommendations. The reports are being issued to the Mayor and Council through an Informal Report and are not included in the Council packet. The CAFR reflects that operating funds ended the year with positive cash balances. Overall, the City of North Richland Hills' results of operations during the 2009 fiscal year, as well as the financial position at year-end, reflect a sound fiscal condition. This is in fulfillment of Council Goal 4: Financial Stability. Recommendation: Accept GN 2010-029 the 2009 fiscal year Audited Financial Report as presented. DRAFT; ^ .,~ 1 DRAFT Caue~c l~e~s igned ~ Cite /l~axia~en'o (~~,:ce and ~ud~et and 5ieseaxcPc l~epaxt~nent Cite u.~ .NoxtPc J`ti;cPiearcd .`~EcF,~ DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2009 City Officials Oscar Trevino Mayor Scott Turnage Place 6 Mayor Pro Tem John Lewis Ken Sapp Place 1 Place 2 Tom Lombard Dr. Tim Barth Place 3 Place 4 David Whitson Tim Welch Place 5 Place 7 Larry J. Cunningham City Manager Mark Hindman City Manager Incumbent Karen Bostic Assistant City Manager Jared Miller Assistant City Manager Jimmy Perdue Director of Public Safety Mike Curtis Managing Director Development Services Larry Koonce Director of Finance Prepared by: Finance Department DRAFT NORTH RICHLAND H I L L S City of Choice ACKNOWLEDGEMENTS The Comprehensive Annual Financial Report was prepared by the Department of Finance Office of Accounting: Karen Bostic Assistant City Manager Larry Koonce, CPA, CGFM Director Financial Reporting Staff: Laury Fiorello, Assistant Director Phyllis O'Neal, Finance Assistant Dickie Stearns, Accountant I I Huibi Wang , Accountant I Pamela Knapp, Accounting Technician Jennifer Day, Accounting Technician Ana Valdovinos, Accounting Technician Debbie Harris, Secretary Special appreciation is given to: Budget and Research Department Mark Mills, Director Shirley Hoover, Internal Auditor Jennipher Castellanos, Budget Analyst Human Resources Department Patrick Hillis, Director Cameron Rowland, Assistant Director James Edwards, Human Resources Analyst Dell Anne Patterson, Generalist Benefits Jenny Bransford, Payroll Specialist Ellen Cooper, Generalist Employment And to all the departments and personnel throughout the City whose extra effort to contribute, timely financial data for their departments made this report possible. DRAFT City of North Richland Hills, Texas Comprehensive Annual Financial Report For Fiscal Year Ended September 30, 2009 Pa e s Title Page I Table of Contents III - V INTRODUCTORY SECTION Letter of Transmittal IX - XIII GFOA Certificate of Achievement XIV Organizational Chart XV List of Principal Officials XVI FINANCIAL SECTION Independent Auditors' Report 1 Management Discussion and Analysis 3 - 14 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements: Statement of Net Assets 17 Statement of Activities 18 Fund Financial Statements: Balance Sheet -Governmental Funds 19 Reconciliation of the Balance Sheet of Governmental Funds to the Statements of Net Assets 20 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 21 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 22 Statement of Net Assets -Proprietary Funds 23 Statement of Revenues, Expenses, and Changes in Net Assets -- Proprietary Funds 24 Statement of Cash Flows -- Proprietary Funds 25 Notes to Basic financial Statements 27 - 60 DRAFT City of North Richland Hills, Texas Table of Contents Required Supplementary Information: Schedule of Funding Progress -- Texas Municipal Retirement System 63 Other Post Employment Benefits Schedule of Funding Progress 64 Other Post Employment Benefits Schedule of Employer Contributions 64 Schedule of Revenues, Expenditures, and Changes in Fund Balance -- Budget and Actual General Fund 65 Notes to Required Supplementary Information -General Fund 66 Other Supplementary Information: Non-major Governmental Funds: Combining Balance Sheets 68 - 69 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 70 - 71 Schedule of Revenues, Expenditures, and Changes in Fund Balance --Budget and Actual Promotional Fund 72 Donations Fund 73 Special Investigation Fund 74 Drainage Utility Fund 75 General Debt Service Fund 76 Parks and Recreation Development Fund 77 Crime Control District Fund 78 Gas Development Fund 79 Traffic Safety Fund 80 Sales Tax Revenue Bonds Debt Service 81 Internal Service Funds: Combining Statement of Net Assets 84 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets 85 Combining Statement of Cash Flows 86 iv DRAFT City of North Richland Hills, Texas Table of Contents STATISTICAL SECTION (UNAUDITED) Pa e s Government-Wide Information: Net Assets by Component Table 1 89 Changes in Net Assets Table 2 90 - 91 Fund Information: Fund Balances -Governmental Funds Table 3 92 Changes in Fund Balances -Governmental Funds Table 4 93 Assessed and Actual Value of Taxable Property Table 5 94 Property Tax Rates -Direct and Overlapping Governments Table 6 95 Principal Taxpayers Table 7 96 Property Tax Levies and Collections Table 8 97 Ratios of Outstanding Debt by Type Table 9 98 Computation of Direct and Overlapping Debt Table 10 99 Computation of Legal Debt Margin Table 11 100 Pledged Revenue Coverage Table 12 101 Demographic Statistics Table 13 102 Principal Employers Table 14 103 Full-time Equivalent Municipal Employees by Function/Program Table 15 105 Operating Indicators by Function/Program Table 16 106 - 107 Capital Asset Statistics by Function/Program Table 17 108 - 109 v DRAFT N FAH This page intentionally left blank. vi DRAFT Introductory Section N ~r~H ~~~ DRAFT This page intentionally left blank. vni DRAFT Nc~kmH R~r~}iEn~r~ tii~r.s ~~~ THE C17Y CJt CHC~FI: F April 26, 2010 Department of Finance To the Honorable Mayor, Members of City Council, City Manager, and Citizens of the City of North Richland Hills, Texas: We hereby issue the comprehensive annual financial report of the City of North Richland Hills, Texas (the "City") for the fiscal year ended September 30, 2009. This report consists of City management's representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in the report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City's financial statements have been audited by Deloitte & Touche, LLP, independent auditors. 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, 2009, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. 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, 2009, are fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City was part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City's separately issued Single Audit Report. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis ("MD&A"). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditors. P.O. Box 820609 • North Richland Hills, Texas • 76182-0609 7301 Northeast Loop 820 • Finance • 817-427-6166 • Fax 817-427-6151 iX DRAFT Profile of North Richland Hills The City, incorporated in 1953, is a growing community located in the heart of the Dallas/Fort Worth Metroplex. The City's estimated population is 66,100 for 2009. The City is also home to over 1,200 commercial and industrial businesses. The third largest city in Tarrant County, North Richland Hills is only 10 minutes from downtown Fort Worth and 25 minutes from downtown Dallas. Interstate Loop 820 and Texas 121 /183 (Airport Freeway) traverse the City, providing freeway access to five additional interstates and numerous US and state highways. The City is also conveniently located 10 minutes from Dallas/Fort Worth International Airport and 15 minutes from Alliance Airport. D/FW International Airport has over 2,000 flights daily with non-stop service to all major North American cities and many overseas destinations. The Alliance development facilitates the transport of merchandise through both the airport and the Burlington Northern/Santa Fe Intermodal Facility. North Richland Hills operates under a charter adopted in 1964 which provides for aCouncil-Manager form of government. The Mayor and seven Council members are elected at large. The City Council is responsible for all matters of policy and is also the authority for levying taxes, securing revenues, authorizing expenditures of City funds, and incurring City debts. The City Manager is directly responsible to the City Council. An organizational chart follows to show the various levels of responsibility. The City provides a full range of services. These services include police and fire protection; municipal court operations; the construction and maintenance of streets and infrastructure; parks, library, and recreational activities including tennis center operations; neighborhood services activities; planning and inspections; and the operations of a water and wastewater system, a golf course, and a public waterpark. A private contractor, through a franchise agreement, provides solid waste collection and disposal services for the City. The annual budget serves as the foundation for the City's financial planning and control. The City maintains budgetary controls to ensure compliance with provisions in the annual budget adopted by the City Council. Annual operating budgets are adopted for the General Fund, certain Special Revenue Funds, Debt Service Funds, Enterprise Funds, and Internal Service Funds. Project-length financial plans are adopted for the Capital Project Funds. The level of budgetary control (that is, the level at which expenditures/expenses cannot legally exceed the appropriated amount) is established at the fund level. Detail control is accomplished by maintaining appropriations, encumbrances, and expended balances by line item within each operating department, within each operating fund. All annual appropriations lapse at the end of the fiscal year. Budgetary data for proprietary funds has not been presented since reporting on such budgets is not legally required. Prior to September 1, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means of financing them. Public hearings are conducted to obtain taxpayer comments. Prior to September 30, the budget is legally enacted through passage of an ordinance. The appropriated budget is prepared by fund, department, and division. The City Manager is authorized to transfer budgeted amounts between departments within any fund. Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders, contracts) outstanding at year end are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitments will be re-appropriated and honored during the subsequent year. Transfers of appropriations between funds require the approval of the City Council. Budget-to-actual comparisons are provided in the report for each individual governmental fund for which an appropriated annual budget has been adopted. Forthe General Fund comparisons begin on page 67 in the required supplementary information segment of the financial statements. The comparisons for other govemmental funds with appropriated annual budgets are presented in the other supplementary information of this report. x DRAFT Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific envi ronment within which the City operates. Local economy-The impact of the national recession has been much less severe on the City of North Richland Hills. While located in the more stable State of Texas and DFW Metroplex, the City is fortunate to reside in the strong socioeconomic area of Northeast Tarrant County. Neighbors with the Cities of Colleyville, Keller, Hurst and Southlake, the City of North Richland Hills has been able to weather the current recession as evidenced by numerous economic indicators and newsworthy projects. A balanced mix of large employers, broad range of retail and a growing resident population; the City is poised to combat the economic pressures of 2010. Major employers include HealthMarkets, North Hills Hospital and Impel Management Services which employ over 2,400 in the growing healthcare sector; Fitz Manufacturing which employs over 140 in the growing aerospace sector, and Con-Way Freight with over 270 employees in the growing supply chain sector, to name a few. Further deflecting economic pressures is the City's mix of large discount retailers including two Wal-Mart Supercenters, a Sam's Club and a SuperTarget. These discount retailers do well under both economic upturns and downturns, further contributing to the City's economic stability. Albeit projected to be a tough year, North Richland Hills is not only prepared to manage 2010, but ready to take advantage of the not-so-distant future. Long-term financial planning - In February 2003, the voters authorized the development of twenty-two street projects (arterial, collector, and residential), two drainage projects, and four municipal facilities projects with the passage of four propositions in the 2003 Bond Election. The authorized election package totaled $37,210,000 for the aforementioned projects. The City Council and management believe development ofthese projects is needed to improve infrastructure and provide essential services to its citizens. The projects are expected to continue through the year 2010. At least annually, management reviews and updates long-range financial plans for the general operations of the City as well as the proprietary activities. Forecasts are prepared using conservative growth estimates for major sources of revenue. Maintaining this conservative approach, coupled with an aggressive debt repayment policy, have assisted in the City maintaining a favorable bond rating since 1997. Analysis is continuously updated to reflect new bond issues and the repayment thereof, as well as updates to estimates based on new developments, historical trends, changes in applicable legal requirements, and Council and management priorities. The plans for the internal service funds include the accumulation of resources for meeting both current and future needs. For example, facilities and fleet support services as well as information services collect user fees to meet current maintenance needs as well as to meet future capital replacement needs. Similarly, the City's policy with regard to self-insurance premiums has been to collect sufficient amounts to cover current health and dental claims as well as additions to reserves for future claims. In fiscal years 2002 and 2003 the Self Insurance (Internal Service) Fund reserves of $3.1 million were depleted due primarily to spiraling inflation in the health care industry and unforeseeable extraordinary health claims. In fiscal year 2004, City Council adopted a strategy to rebuild reserves over asix-year period beginning in fiscal year 2005. Savings from changes in the health care plan, transfers from existing cash reserves in the General Fund and Water and Sewer Fund, and employee premiums are being used to re-establish the reserves. Similar plans for the build-up of reserves exist for the City's enterprise operations. Funds are set aside to meet future capital replacement needs such as infrastructure replacement and capital asset acquisitions. This approach has allowed the City's water and sewer operation to meet the majority of its capital replacement needs with the xi DRAFT issuance of minimal debt. NRH2O, the City's Waterpark, has funded some new attractions and infrastructure improvements by utilizing cash reserves accumulated from operations. Cash management policies and practices -The City's current bank depository contract with Bank of America expired on September 30, 2009. The new bank depository contract was awarded to J P Morgan Chase Bank, N.A. beginning October 1, 2009 for five years. Cash temporarily idle during the year was invested in four public funds investment pools and Agency securities. The maturities of the investments range from overnight to almost three years with the average maturity of nine to twelve months. The average yield on investments for fiscal year 2009 was 2.16% compared with 4.06% for the prior year. The portfolio's weighted average maturity ("WAM") at the end of the fiscal year was 204 days which represents a 65 day decrease from last year's WAM of 269 days on September 30, 2008. At fiscal year end, approximately 23% of the portfolio was invested beyond one year, 19% was invested for one year or less, while the remaining 58% was invested in the overnight market. The City recently entered into a contractual relationship with PFM, Inc. as investment advisors and overseers of our portfolio. This professional relationship will begin October 1, 2010. Risk management -The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. While the City has historically retained a portion of these risks, coverage exists for: general, employment practice, law enforcement, and errors and omissions liability; excess workers' compensation; property damage; commercial crime coverage; and employee life insurance. The Self-Insurance Fund is responsible for workers' compensation, health, automobile liability, and general liability insurance. The City maintains a stop loss third party insurance policy with respect to health claims. This policy covers City medical claims in excess of $175,000 per individual per year, and/or $4,880,027 in the aggregate fora 12-month period beginning on January 1, 2009. Self-Insurance Fund claims are funded by charges to other funds and employee, retiree, and dependent premiums. Additional information on the City's risk management activity can be found in the notes to the basic financial statements. Pension and other post-emplovment benefits -The City participates in the Texas Municipal Retirement System ("TMRS"), an agency authorized by the State of Texas. Employees of the City contribute a fixed percentage of their gross pay (currently 7%). TMRS participants are immediately vested in those funds they contribute plus allocated interest. Participants are vested in employer contributions after five years of credited participation. If participants withdraw from TMRS prior to five years of credited participation, they may withdraw from TMRS those funds they contributed plus interest earnings. The City also provides postretirement health and dental care benefits for certain retirees and their dependents. As of the current fiscal year, there were 93 retired employees receiving these benefits. Additional information on the City's pension arrangements and post employment benefits can be found in the notes to the basic financial statements. 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, 2008. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded the Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized comprehensive annual financial report whose contents conform to program standards. Such comprehensive annual financial reports must satisfy both GAAP and applicable legal requirements. The Certificate of Achievement is valid for a period of one year only. The City has received a Certificate of Achievement for the last twenty-six consecutive years. Staff believes the current Comprehensive Annual Financial Report continues to conform to the Certificate of Achievement Program requirements and it will be submitted to the GFOA for review. The City also received an award in 2009 for the 2008-2009 operating budget. The Distinguished Budget Presentation award was granted to the City for the nineteenth consecutive year by the GFOA. xu DRAFT AcknowJedgmenfs -Timely preparation of this Comprehensive Annual Financial Report was made possible by the dedicated service of the Finance Department staff and. our independent auditors. We would like to express sincere appreciation to those who contributed to the process. In closing, the continued leadership and support of the Mayor, City Council, and City Manager in planning and conducting the financial operation of the City is sincerely appreciated. Respectfully submitted, Larry Koon Director of Finance Laury Fior o Assistant Director of Finance xni DRAFT Certificate of Achievement for Excellence in Financial Reporting Presented to City of North Richland H1~s Texas For its Comprehensive. Annual Financial Report for the Fiscal Year Ended September 30, 2008 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Offcers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. ~a s~' ~iroa ~~' ~ President Executive Director xiv City of North Richland Hills crr¢eNs Mayor& City Council ' Muicipal Caat "Boards ant Judge Cormnissiats 'City Secret~y "City Attarey 'City tJtanager AasL to the Ctly Ma~gM Community Services Public Safety AdministntlvalFisca[ Development Services. Services LiWary Parks 8 EoixtorMe Po@ce Department Pubic Wales Recreation DevebP.rnent Finance Department Bud9at DepaMleitt Streets Plarxting and 7.orvn9 -Accenting _iRefnal AtWit -0roirege -Purchasing -Tax -En8in9 _ Fire Department .Utiiry Services 8 Coiections Goy Course ~ tJRH2O -E~r9encYM9t .----_.._...J Unities Blaldirg InsPedion9 Neighborhood Ser... Human Resources FaciitieslCaistrticicn... Fleet Servces -0ortstatter Heaph ktfortnation Services -Errlpb7rment -Buldiig Services -Equipment Services .Code CompNarce -Camputers(Nahvorks -Risk Management -Caisi~UOn Mgt. -Fire Equipment -Animal Senrices -i'~~ -Cioif SenAce ~._. __. Pubic Mormation Mtrtiapal Court - ---------_._.._.__.._...__._.___i -0ItiWble I FunUbnal Resnmsidliles i ~ -Da~elopiieru Re~iaw GanmYtee j -TRIG 4 { RTC Fund Resaonsmletles ~umlional ResamsidTilles. 1 , -Wafer Ut~res-Fort Worth ?arks and Rscteatlon Board -820 ExpsnstOn i i ~ -Rai InBIDthes . 1i6rery Bond ~FUndirq DeidoPn~M-Animal _. .._- _._ _ __._-..-_.~. _._.__ .._ ~Ecsramic Oe~slopmara Basra ~ ssMCrs FsGlNles i Soid Waste ._._~ _.._.-- __- III ,IAinerals 1 Ges fadlilies 51Wy ~ +. Funetion~ Resnonsn8illes I K Y ~ ~ ~Franoh6ea . _ ____i i -TAD i CornracYed ~ -~ --~--~--~----._'-._-- -laglslatrve Co«dinatioNAnaysis ~ `APPoinled by i 1 f Coutvl '-- Services.-_..I ~ DRAFT CITY OF NORTH RICH LAND HILLS, TEXAS List of Principal Officials September 30, 2009 MAYOR OSCAR TREVINO COUNCIL MEMBER, PLACE 1 JOHN LEWIS COUNCIL MEMBER, PLACE 2 KEN SAPP COUNCIL MEMBER, PLACE 3 TOM LOMBARD COUNCIL MEMBER, PLACE 4 DR. TIM BARTH COUNCIL MEMBER, PLACE 5 DAVID WHITSON MAYOR PRO TEM, COUNCIL MEMBER, PLACE 6 SCOTT TURNAGE COUNCIL MEMBER, PLACE 7 TIM WELCH City Manager Larry J. Cunningham City Manager Incumbent Mark Hindman Assistant City Manager Karen Bostic Assistant City Manager Jared Miller Director of Public Safety Jimmy Perdue Managing Director of Development Services Mike Curtis City Secretary Patricia Hutson City Attorney George Staples Director of Human Resources Patrick Hillis Director of Finance Larry Koonce Assistant Director of Finance Laury Fiorello Budget Director Mark Mills Director of Economic Development Craig Hulse Director of Planning and Development John Pitstick Public Information Officer Mary Peters Director of Information Services Kyle Spooner Municipal Court Administrator Debbie Durko Director of Neighborhood Services JoAnn Stout Library Director Steve Brown Director of Parks and Recreation Vickie Loftice Director of Fleet Services Thomas Powell Fire Chief Andy Jones Director of Facilities & Construction Chris Amarante xvi DRAFT Financial Section NCH DRAFT This page intentionally left blank. PRELIMINARY DRAFT -FOR DISCUSSION PURPOSES ONLY INDEPENDENT AUDITORS' REPORT The Honorable Mayor and Members of City Council City of North Richland Hills, Texas We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, the aggregate discretely presented component units, and the aggregate remaining fund information of the City of North Richland Hills, Texas (the "City"), as of and for the year ended September 30, 2009, which collectively comprise the City's basic financial statements as listed in the accompanying table of contents. These financial statements are the responsibility of the City of North Richland Hills' management. Our responsibility is to express opinions on the respective financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the respective financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund, the aggregate discretely presented component units, and the aggregate remaining fund information of the City of North Richland Hills, Texas, as of September 30, 2009, and the respective changes in financial position and respective cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in Note V.D. to the financial statements, the City implemented Governmental Accounting Standards Board Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, which requires the measurement, recognition, and display of other postemployment benefits for the year ended September 30, 2009. PRELIMINARY DRAFT -FOR DISCUSSION PURPOSES ONLY In accordance with Government Auditing Standards, we have also issued our report dated April 26, 2010, on our consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Management's Discussion and Analysis, the Schedule of Funding Progress -Texas Municipal Retirement System, the Schedule of Funding Progress -Other Post Employment Benefits, the Schedule of Employer Contributions -Other Post Employment Benefits, and the Budgetary Comparison Schedule -General Fund are not required parts of the basic financial statements, but are supplementary information required by the Governmental Accounting Standards Board. This supplementary information is the responsibility of the City of North Richland Hills's management. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and we do not express an opinion on it. Our audit was conducted for the purpose of forming opinions on the respective financial statements that collectively comprise the City's basic financial statements. The combining and individual fund financial statements and other schedules listed in the foregoing table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. These financial statements and schedules are the responsibility of the City of North Richland Hills' management. Such additional information has been subjected to the auditing procedures applied by us in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. The introductory section and statistical section as listed in the table of contents are presented for the purpose of additional analysis and are not a required part of the basic financial statements for the City. This information is the responsibility of the City of North Richland Hills' management. Such additional information has not been subjected to the auditing procedures applied in our audit of the basic financial statements and, accordingly, we express no opinion on it. April 26, 2010 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2009 The City of North Richland Hills, Texas (the "City") Management's Discussion and Analysis ("MD&A") is designed to (a) assist the reader in focusing on significant financial issues, (b) provide an overview of the City's financial activity, (c) identify changes in the City's financial position (its ability to address the next and subsequent years' challenges), (d) identify any material deviations from the financial plan (the approved budget), and (e) identify individual fund issues or concerns. MD&A is designed to focus on the current year's activities, resulting changes, and currently known facts, and should be read in conjunction with the Letter of Transmittal (beginning on page IX) and the City's financial statements (beginning on page 17). Also, unless otherwise indicated, all discussion and amounts presented herein are based upon the activity of the primary government only. Financial Highlights • The assets of the City exceeded its liabilities at the close of the fiscal year ended September 30, 2009, by over $290 million (net assets). Of this amount, approximately $77 million (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. • The City's total net assets increased by $9,303,486 in fiscal year 2009. Additional details of this increase may be found beginning on page 18. • As of September 30, 2009, the City's governmental funds reported combined fund balances of $57,109,316 which represents an increase of $2,999,943 in comparison to the prior fiscal year's ending balance. • Approximately 29% of total governmental fund balance, or $16,463,232, is available for appropriation at the government's discretion (unreserved, undesignated fund balance). • The City's objective regarding General fund balance is to maintain a sufficient fund balance to operate the City for a period of 60 days or 15% of the following year's budgeted expenditures. This objective was met at year end. • At the end of the current fiscal year, unreserved, undesignated fund balance for the General Fund was $9,612,140 or 27.2% of General Fund actual expenditures for 2009. • The City's total debt (including component units) increased by approximately $13.6 million during the current fiscal year. New general obligation bonds and certificates of obligation in the amounts of $5.7 million and $6.2 million respectively were issued in fiscal year 2009. A bank loan was obtained for $1.6 million for land acquisition. Overview of the Financial Statements MD&A is intended to introduce the reader to the City's basic financial statements. The City's basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. The report also contains other required supplementary information in addition to the basic financial statements. Government-wide financial statements -The government-wide financial statements are designed to provide readers with a broad overview of the City's finances in a manner similar to private-sector business. The Statement of Net Assets presents information on all of the City's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City's net assets changed during the fiscal year. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned, unused vacation leave). Both DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2009 the Statement of Net Assets and the Statement of Activities are prepared using the accrual basis of accounting as opposed to the modified accrual basis used in prior reporting models and in governmental funds. In the Statement of Net Assets and the Statement of Activities, the City's operations are separated into two types of activities: • Governmental activities -Most of the City's basic services are reported here, including the activities of public safety, culture and recreation, public works, and general government. Property taxes, sales taxes, and franchise fees finance most of these activities. • Business-type activities -For this type of activity, the City charges a fee to customers to cover all or most of the cost of services provided including the recovery of costs of capital assets used in the delivery of such services. The City's water and sewer, golf course, and aquatic park activities are reported here. The government-wide financial statements can be found on pages 17 - 18 of the comprehensive annual financial report. Fund financial statements - A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Fund financial statements provide detailed information about the most significant funds, not the City as a whole. Some funds are required to be established by state law or bond covenants. However, management establishes many other funds to help control and manage resources for particular purposes or to show that legal responsibilities for using certain taxes, grants, and other money are being met. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Governmental funds -The majority of the City's basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances available for appropriation at year- end. These funds are reported using an accounting method identified as the modified accrual basis of accounting, which measures cash and all other financial assets that can readily be converted to cash. Statements of governmental funds provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information helps the reader determine whether there are more or fewer financial resources available for appropriation in the near future to finance City programs. By comparing information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements, readers may better understand the long-term impact of the government's near-term financing decisions. The relationship or differences between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds are detailed in a reconciliation following the fund financial statements. The City maintains three major individual governmental funds. Information is presented separately in the Governmental Funds Balance Sheet and in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances for these funds (pages 19 - 21). The General Fund, General Debt Service Fund, and General Capital Projects Fund are the major governmental funds of the City. Data from the other non-major governmental funds are combined into a single, aggregated presentation in the governmental statements. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements (pages 68 - 71). Proorietary funds -The objective of proprietary funds is to charge customers, both internal and external, for services provided an amount sufficient to cover virtually all costs associated with providing the services including recovery of amounts required to replace assets used in the delivery of such services. These services are generally reported in proprietary funds. Proprietary funds are reported in the same manner that all activities are reported in the Statement of Net Assets and the Statement of Activities. In fact, the City's enterprise funds (a component of proprietary funds) are almost identical to the business-type activities that are reported in the government-wide statements, but provide more detail and additional information, such as the statement of cash flows. The internal service funds (the other component of proprietary funds) are utilized to report activities that provide supplies and services for the City's other programs and activities, such as the City's building maintenance services, fleet management, employee and property insurance DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2009 coverage, and telephone and computer services. Because these services benefit both governmental and business-type functions, they have been included in both the governmental and business-type activities in the government-wide financial statements. The City maintains three enterprise funds. The City uses enterprise funds to account for its provision of water and wastewater services, golf course operations, and water park activities. The City considers all enterprise funds to be major funds. Financial statements for the enterprise funds can be found on pages 23 - 25 of the report. Notes to the financial statements -The notes to the financial statements provide additional information that is essential for a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 27- 60 of this report. Government-Wide Financial Analysis The government-wide financial analysis highlights the information contained in the Statement of Net Assets and Statement of Activities. The City's combined net assets were $289,524,795 as of September 30, 2009. Analyzing the net assets of governmental and business-type activities separately, governmental activities net assets equal $198,841,917 and business-type activities net assets total $90,682,878. This analysis focuses on the net assets and changes in general revenues and significant expenses of the City's governmental and business-type activities. Statement of Net Assets -The largest portion of the City's net assets (71.4%) reflects its investment in capital assets (e.g., land, buildings, machinery and equipment) less any related debt used to acquire those assets that is still outstanding. The City uses capital assets to provide services to citizens; consequently, capital assets are not available for future spending. Although the City's investment in capital assets is reported net of related debt, it should be noted the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these obligations. The following table presents the condensed government-wide statement of net assets as of September 30, 2009 and 2008. Current assets include restricted deposit and investment balances. Schedule ofASSets, Liabilities. and Net Assets Amounts shown in thousands (000's} As oT September 30.. Gavernmental Activities Business-Type Activities Totals Totals 2(109 2008 2009 2008 2009 2008 Current and other assets $ 70,564 5 68.407 ~ 37-,729 8 36;043 5 108.293 ~ 104,450 Capital assets, net 190,999 178,375 72.,181 70.445 263,180 248,820 Tatalassets 261,563 246,782 109..910 106,488 371,473 35:3,270 Lang-term liabilities 49,329 44,835 12.569 8,753 61,898 53.588 Other liabilities 13.392 14282 6 X58 5,178 20.050 19.460 Total liabilities 62.721 59,117 19,227 13,331 81.948 73,048 Nei assets. Invested in capital assets, net of related debt 142.057 129.534 62.355 60.829 204.,422 150,363 Restricted 4.693 3.984 3,019 2..710 7.712 6,694 Unrestricted 52:082 54„147 25,309 29:018 77.391 83,165 Total net assets S 198,842 S 187,665 $90..683 S 92,557 ~ 289,525 ~ 280.222 5 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2009 Statement of Activities -Governmental activities increased the City of North Richland Hills' net assets by $11.2 million in fiscal year 2009, and business-type activities decreased net assets by $1.9 million. The following table presents the condensed government-wide statement of activities for the years ended September 30, 2009 and 2008. Changes in Net Assets Amounts shown in thousands (000's) Year Ended September 30, Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Property tax Sales tax Mixed beverage Franchise taxes Occupancy taxes Unrestricted investment earnings Contributions & Miscellaneous Total revenue Expenses: General government Public safety Culture and recreation Public works Interest and other fees Water and sewer Golf course Aquatic park Total expenses Changes in net assets before transfers Transfers between Governmental and Business-Type Net Increase (decrease) in net assets Net assets at the beginning of the year Prior period adj. Restated net assets -beg. Bal. Net assets -end of year Governmental Activities Business-Type Activities 2009 2008 2009 2008 2009 2008 Total Total $ 12,813 $ 17,214 $ 31,429 $ 32,796 $ 44,242 $ 50,010 1,142 354 - - 1,142 354 11,342 305 - - 11,342 305 20,606 19,249 - - 20,606 19,249 16,058 17,446 - - 16,058 17,446 118 162 - - 118 162 3,803 4,605 - - 3,803 4,605 152 260 - - 152 260 1,612 2,244 740 879 2,352 3,123 188 673 (11) 76 177 749 67,834 62,512 32,158 33,751 99,992 96,263 16,356 9,380 - - 16,356 9,380 27,773 25,792 - - 27,773 25,792 10,719 7,973 - - 10,719 7,973 2,127 5,748 - - 2,127 5,748 2,269 2,302 - - 2,269 2,302 - - 25,121 27,441 25,121 27,441 - - 2,218 2,407 2,218 2,407 - - 4,106 3,991 4,106 3,991 59,244 51,195 31,445 33,839 90,689 85,034 8,590 11,317 713 (88) 9,303 11,229 2,587 557 (2,587) (557) - - 11,177 11,874 (1,874) (645) 9,303 11,229 187,665 176,348 92,557 93,202 280,222 269,550 (557) - - - (557) 187,665 175,791 92,557 93,202 280,222 268,993 $ 198,842 $ 187,665 $ 90,683 $ 92,557 $ 289,525 $ 280,222 Governmental activities -Governmental activities increased the City of North Richland Hills' net assets by $11.2 million in fiscal year 2009. The City had a decrease in tax revenues of $1 million during 2009. Charges for services decreased by 25.6% or approximately $4.4 million under 2008 revenues. This decrease is attributed to the decrease in mineral rights leasing and royalty activity on City owned property. The total expenses for governmental activity increased by approximately $8 million over 2008 totals. This was expected due to higher costs of services due to fuel consumption and utility charges, in addition to capital outlay below capitalization threshold for land purchases for the recreation center and right-of-way purchases for upcoming street projects. 6 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2009 Also part of the decrease was a $1.7million loss on disposal of certain assets due to capitalization threshold reviews Operating grants and contributions increased by $788,427 from fiscal year 2008 to 2009. This increase is due to additional cost sharing, totaling $455,687, by a neighboring city for operational activity costs. The additional increase of approximately $332 thousand is due to new grant funds. Sales and mixed beverage taxes decreased ($1.388 million and $44,000 respectively) from fiscal year 2008 to 2009. Franchise taxes realized a decrease of $801,964 from 2008 to 2009. The decrease is directly related to a new cable/fiber optic television utility established during the fiscal year of 2008. This franchise provided a one time influx of revenue and now in 2009 we are seeing a leveling of activity from the new service. Sales taxes are entirely dependent upon the local economy. The City is expecting a slight decrease in sales tax revenues for 2010. The most significant governmental expense occurred in the public safety program ("PS"), which incurred expenses of $27,772,668. This figure represents an increase from the prior fiscal year expenses of approximately $2 million. Approximately 76.2% of the PS costs is related to police and fire protection personnel salaries and related benefits. These costs are estimated at $21,171,518 which represents an approximate increase of $106 thousand from the prior fiscal year. Continued implementation of the compensation and classification study recommendations, changes to insurance premiums, and an increase in the retirement contribution rate are primarily responsible for the increase in personnel-related costs. The remainder of the increase is attributable to the numerous entries, such as compensated absences, depreciation, and the internal service fund allocation, required to prepare the government-wide financial statements. Implementation of Governmental Accounting Standards Board Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, increased PS expenses by $754,870 for all department's employees. Other significant governmental expenses for 2009 include general government ("GG"), which incurred $16,355,871 in expenses, of which an estimated $14.2 million (excluding internal service employees) represent personnel and related charges. Personnel and related benefit expense for general government rose by approximately $2.4 million. Again, continued implementation of the compensation and classification study recommendations, changes to insurance premiums, and an increase in the retirement contribution rate are primarily responsible for the increase in personnel-related costs. The general government expenses increased by approximately $7 million or 74.3%. Of this amount, approximately $2.4 million was due to recognition of net pension obligation and other post employment benefit expense. Internal Service Funds saw a net decrease in net assets of approximately $1 million. Special reserves of these funds were utilized for construction and special projects. Because of the draw down of special reserves, Facilities and Construction, Fleet Services, and Information Services saw a net cumulative decrease of net assets of approximately $2.3 million. Self Insurance continues to build reserves through proper performance analysis of expenses in relation to claims for medical, dental, prescription, and varied other risk activities. Self Insurance added $1,261,576 to the overall net assets of internal service funds. Culture and recreation program expenses increased by approximately 34% from fiscal year 2008 to 2009. The increase is attributed to several items which include but are not limited to a $1.1 million contribution to the Tax Increment Financing District #2 for supplementation to capital improvement project to erect a new recreation center building. Another expense included in this increase is other post employment benefits expense totaling $164,831. DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2009 Expenses and Program Revenues -Governmental Activities $(000's) $ 30,000 $25,000 ~ 20,000 S 15,000 $10,000 $5,000 $0 General Revenues by Source-Governmental Activities 8 General Public Safety Culture & Public Works Interest & Government Recreation Other Fees ^ Expenses Revenues Sales Tax ---~,_ DRAFT CITY OF NORTH RICH LAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2009 Business-type activr~ies -Business-type activities resulted in a minor negative depletion to the City's total net assets. The 2009 decrease was $1,873,794 million. Several factors can explain this pattern. • Water and Sewer Fund realized a $421,341 decrease in receipts of water and sewer sales. The year had a "wet" rainy season and decreased the need for water usage far their customers. • Investment income decreased by 16°r6, or $117,529. This decrease correlates to a slowing of economic growth along with the utilization of funds set aside or held for capital acquisition. • Aquatic Park revenues realized a $76,650 decrease in admission sales. This decrease can be attributed to the economy and higher unemployment. • Golf Course realized a decrease in 2009 of $76,673 of golf course fees and charges. • All business-type activities recorded other post employment benefits expense totaling $152,645. E><perlses and Program Revenues -Business-Type Activities ${D00's) U Sao,o;;u S~s.o~o S~o.o~o yis,u~u S1o.o~0 Ss,ooo SO ~Va:cr & Scw~ GcIFCoursc Aquaticl'~rk ^Lrpenses ae/e~,ies ~ C~\ J Revenues by Source -Business-type Activities tioii course SE rviccs -water & ~'~ Sewer 78:', i ~~kF. Aquatic Park 12"/a U nre~tricted In~estmenl Earnings z ^n 9 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2009 Fund Level Financial Analysis The General Fund added $1.3 million to fund balance for the year ended September 30, 2009 bringing the total fund balance to $15,658,785. Of this,$205,527 is reserved for encumbrances, $151,952 is reserved for inventories, $12,500 is reserved for prepaids, and $328,064 is reserved for advances. Another $5.3 million is designated for economic development, savings incentive, special projects, restoration of insurance reserves, and other special programs. The unreserved, undesignated balance is $9,612,140 which represents approximately 27% of the 2009 fiscal year's expenditures. The General Fund property tax revenues realized an increase from the prior year of $1.4 million, due to an increase in taxable values and an increase in the operations and maintenance allocation. There was no change in the total property tax rate of $.57 which has been in effect since fiscal year 1994. Sales taxes decreased by 8% due to several business closings. Ambulance fees grew by $.6 million over 2008, due to a higher volume of transports and an increase in the average transport charges. The General Capital Projects Fund ("GCP"), ended the year with an increase of fund balance of $5.3 million over 2008. Other financing sources debt proceeds and transfers in amounting to $13.5 million respectively compared to the special projects expense supported by debt proceeds were not utilized by the end of the year. Multiple capital improvement projects were still active and considered open in status at the end of the 2009 fiscal period. This active status supports that revenues exceeds current year's expenditures thus increase overall fund balance. Two of the three Enterprise Funds realized a decrease to their net assets for the year ended September 30, 2009. The Golf Course Fund was the only activity realizing an overall increase to the net assets, of $181 thousand. Close monitoring of golf course expenses is responsible for the fund's increase. The Water and Sewer Fund and the Aquatic Park Fund saw a net decrease of $0.9 million and $195,471 respectively. Expenses increased because repairs and maintenance expenditures for infrastructure did not meet the capitalization threshold to be capitalized. Overall expenses attributed to this increase were $964,571 for the Water and Sewer Fund. General Fund Budgetary Highlights After the 2008 economic downturn the management of the City and Council Members implemented a budget contingency plan. The plan was implemented and departments were told to eliminate all non-necessary or non- mandated costs. Only emergency and essential functions were focused upon. Due to this aggressive and responsible plan the fund saw a positive variance totaling $1,805,978. Revenues were flat only seeing a moderate positive variance of $43,538. The majority of the variance is attributable to departments taking astute care and oversight of their individual budgets. The City's budget for the next fiscal year (2010) was based on an assumption of a major decrease in revenue sources while expenditures were budgeted to remain flat. Below are some highlights of the contingency plan that were implemented: • Delayed filling vacant positions until late in the fiscal year • Reduced Citywide travel and training expenses • Delayed/reduced capital purchases • Evaluated and decreased overtime usage • Various operations changes for efficiency measures and costs measures The ending General Fund fund balance of $15,658,785 continues to meet the City's policy of maintaining a balance of at least 15% of expenditures. The policy was established to protect the City from unforeseen emergencies and to place the City in a more favorable financial position overall. General Fund Revised Budget to Actual Comparison Notable variances occurred in the General Fund revised budget to actual comparison as follows ~o DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2009 • Property taxes had a slight positive variance of $68,320 due to the unanticipated slow down of the housing market in 2008. • Franchise fees reflected a positive variance of $56,518 which is primarily due to increases in gas, water and sewer payments, and cable utilities. Rates for gas and water and sewer utilities increased plus new services from cable franchises were implemented by providers. • General Fund had positive net budget variances totaling approximately $1.7 million. The General Fund activities and their individual variances include: Genera[ Fund Departmental Budget Variances Positive (Negative) City council $ 19,562 City manager 10;.276 Communications 74,342 City secretary 67,315 Legal (38,953) Human resources 10,9(34 Finance 34,475 Budget and research 33,.792 tvtuncipal court 12,843 Planning and inspections 26;.902 Economic development 263 Library 1(33.,899 Neighborhood services 343,896 Public works 247,854 Parks and recreation 262,015 Police 640 Emergency management 37,821 Fire 257,735 Building services (234,..547} Nan-departmental 491,.406 Total genera( fund $ 1,.762,440 General Fund overall savings is partly caused by encumbrances of current year activities which will be carried to 2008-2009 budget and expensed in the new budget period. The total of prior year encumbrances to be expensed in 2008-2009 totals $205,527 (or approximately 12% of net amount under budget). Capital Asset and Debt Administration Capital assets - At the end of fiscal year 2009, the City had $263,180,125 (net of accumulated depreciation) invested in a broad range of capital assets including, but not limited to, police and fire equipment, buildings, park facilities, roads, bridges, aquatic park facilities, golf course assets, and the water and sewer system. The following table provides capital asset balances net of accumulated depreciation for each major category for both governmental and business-type activities for the fiscal years ending September 30, 2009 and 2008. 11 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2009 Capital Assets (Net of Accumulated Depreciation) Amounts shown in thousands (000's) Governmental Activities Business-Type Activities Total Total 2009 2008 2009 2008 2009 2008 Land & land imp. $ 72,111 $ 67,760 $ 2,527 $ 2,527 $ 74,638 $ 70,287 Works of art 72 72 - - 72 72 Buildings & imp. 25,338 11,251 2,055 2,047 27,393 13,298 Other imp. 80,924 77,228 14,413 11,918 95,337 89,146 Utility plant - - 50,140 49,328 50,140 49,328 Machinery & equip. 6,334 4,642 1,207 714 7,541 5,356 Const. in progress 6,220 17,422 1,839 3,911 8,059 21,333 Total capital assets $ 190,999 $ 178,375 $ 72,181 $ 70,445 $263,180 $248,820 This year's additions included: Description Amount Ambulance and Firetruck $ 1,331,255 Computer and Machinery Equipment 1,858,178 NRH2O Improvement 2,217,732 Various Vehicle 277,400 Various Water/Sewer Repl and Impr 4,894,275 Various Land Acq 4,351,385 Park Improvement 2,690,432 Llibrary Building 10,211,517 Smithfield/Bursey Road 305,896 Parks Infrastructure Mnt 124,091 Signal Minter Pk TEA21 174,072 Grand Ave Street & Utl 341,928 Simmons-Mid Cities/Lib 709,073 2008 Street Maintenance 819,745 2009 Tree Planting 28,167 College Hills Well Imprv 10,743 Liberty Park Lake Phase I&II 261,497 Rufe Snow Streetscape 329,555 Schl Zn FI Bcn Cont Upgrd 82,841 Tipps Canine Hol Lighting 7,470 Boulevard 26 Improvements 107,170 Calloway Creek Comm Redev 125,023 Fire Station 1 & 4 Relocation 4,579,084 Fire Training Facility 774,972 Holiday@ Dick Lewis Imp 247,269 Impact Fee Thornbridge 134,550 Club House Renovation 131,462 Capitalized Interest 118,073 Various Streets Funded byCDBG Grant 786,214 12 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2009 Construction commitments and other limitations affecting availability of fund resources: The City prepares an annual Capital Improvement Projects budget that assigns specific funds and resources for use only for these projects. Until appropriations are removed these resources are unavailable for general operations or new capital projects. The City currently has isolated resources totaling $44,183,820 for both the Governmental and Business-type activities. These resources will be used to purchase major equipment, construct new buildings, and add new infrastructure such as water and sewer lines and streets. Debt - At September 30, 2009 and 2008, the City had the following debt outstanding: Outstandino Debt Amounts shown in thousands (000's) Governmental Activities Business-Type Activities 2009 2008 2009 2008 2009 2008 Totals Totals General obligation bonds $39,810 $37,823 $2,350 $2,790 $42,160 $40,613 Certificates of obligation 7,229 7,041 11,254 6,865 18,483 13,906 Sales tax revenue bonds 3,600 4,520 - - 3,600 4,520 Loans payable 1,550 - - - 1,550 - Totals 52,189 49,384 13,604 $9,655 65,793 59,039 In fiscal year 2009, the City issued new debt. The presently outstanding general obligation debt of the City is rated "Aa3" by Moody's and "AA" by S&P. The City also has issues outstanding which are rated "Aaa" by Moody's and "AAA" by S&P through credit enhancement in the form of municipal bond insurance policies. As a home rule city, the City is not limited by law in the amount of debt it may issue. The City's Charter provides that general property taxes are limited to $1.50 per $100 of assessed valuation for general governmental services including the payment of principal and interest on general obligation debt. The City has maintained a property tax rate of $0.57 per $100 assessed valuation for twelve consecutive years. The current ratio of tax- supported debt to assessed value of all taxable property is 1.25%. Additional detailed information on long-term debt activity is disclosed in the notes (IV-E) to the financial statements. Risk -The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. While the City has historically retained a portion of these risks, coverage exists for: general, employment practice, law enforcement, and errors and omissions liability; excess workers' compensation; property damage; commercial crime coverage; and employee life insurance. The Self- Insurance Fund is responsible for workers' compensation, health, automobile liability, and general liability insurance. The City maintains a stop loss third party insurance policy with respect to health claims. This policy covers city medical claims in excess of $175,000 per individual, and/or $4,880,027 in the aggregate fora 12- month period beginning on January 1, 2009. Self-Insurance fund claims are funded by charges to other funds and premiums from employees and retirees for self and dependent coverage. Economic Factors and Next Year's Budgets and Rates The two largest revenue sources for the General Fund are property tax revenues and sales tax receipts. Due to the volatile nature of the sales tax revenue source and the recent departure of major retailers, the City has been conservative in sales tax projections for fiscal year 2009-2010. For budget year 2009-2010, sales tax receipts are anticipated to be aligned with budget and the City does not expect to see growth above the estimated amounts. Sales tax revenue in 2009 ended 2.7% below the budgeted number. When compared to budget year 2008-2009 actual receipts, sales taxes are anticipated to continue to decline in 2010. 13 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2009 The fiscal year 2009-2010 budget incorporates no increase in the property tax rate. For fiscal year 2008-2009 the tax rate distribution for the City is as follows: of Total Tax Rate Tax Rate Distribution Schedule: Tax Rate Distribution General Fund -Maintenance & Operations 59.43% $ 0.338753 Debt Service Fund 40.57% 0.231247 Total distribution of tax rate 100.00% $ 0.570000 By policy, the City maintains an unreserved General fund balance of 15% of budgeted expenditures. The use of available fund balance for one-time expenditures eliminates the financial impact of such purchases on future budgets. The fiscal year 2009-2010 Water and Sewer Fund operating budget includes base and volume rate changes for water service. In addition, sewer base and pass-through rates increased in December 2009. Requests for Information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of North Richland Hills, Director of Finance, P.O. Box 820609, North Richland Hills, Texas 76182-0609. 14 DRAFT BASIC FINANCIAL STATEMENTS 15 DRAFT N FAH This page intentionally left blank. 16 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Government-wide Statement of Net Assets September 30, 2009 Primary Govemment Component Units Tax Increment Tax Increment Governmental Business-Type Financing Financing Activities Activities Total District #1 District #2 Assets CURRENT ASSETS Deposits and investments $ 32,858,737 $ 18,006,491 $ 50,865,228 $ 1,105,069 $ 8,222,969 Receivables, net of allowances: Accounts 1,030,165 3,508,273 4,538,438 - - Propertytaxes 204,072 - 204,072 - - Othertaxes 2,805,469 - 2,805,469 - - Interest receivable 334,254 115,133 449,387 1,907 17,301 Special assessments 86,686 - 86,686 - - Intergovernmental 404,379 514,065 918,444 - - Courtfines and fees 427,345 - 427,345 - - Other 456,306 456,306 - - Prepaids 12,500 42,867 55,367 - - Inventories, at cost 266,241 396,566 662,807 - - Internal balances (3,830,905) 3,830,905 - - - Total current assets 35,055,249 26,414,300 61,469,549 1,106,976 8,240,270 NONCURRENT ASSETS Restricted deposits and investments 34,872,265 11,143,005 46,015,270 - 4,423,568 Capital assets -net: Land and nondepreciable land improvements 72,111,606 2,526,639 74,638,245 - - Buildingsand improvements 39,995,259 3,757,904 43,753,163 - - Improvements other than buildings 145,926,931 22,515,965 168,442,896 - - Utility plant - 88,881,597 88,881,597 - - Machinery and equipment 22,583,859 3,335,897 25,919,756 - - Artworkand historical treasures 72,491 72,491 - - Construction in progress 6,219,634 1,838,539 8,058,173 - - Accumulated depreciation (95,910,441) (50,675,755) (146,586,196) - - Total capital assets -net 190,999,339 72,180,786 263,180,125 - - Bond issue costs, net of amortization 636,335 171,631 807,966 3,252 65,315 Total noncurrent assets 226,507,939 83,495,422 310,003,361 3,252 4,488,883 Total assets 261,563,188 109,909,722 371,472,910 1,110,228 12,729,153 Liabilities CURRENT LIABILITIES Accounts payable and accrued liabilities 3,255,031 2,251,779 5,506,810 - - Deposits and other liabilities 1,242,261 76,928 1,319,189 - - Retainage payable 21,872 161,511 183,383 - - Compensated absences 2,056,770 302,154 2,358,924 - - Uneamed revenue 131,211 114,923 246,134 - - Accrued interest payable 517,655 101,807 619,462 3,910 66,938 Bonds payable 5,685,580 1,296,780 6,982,360 42,640 620,000 Loans payable 292,235 - 292,235 - - Due to other governments 189,982 640,263 830,245 - - Customers' deposits - 1,690,423 1,690,423 - - Developers' deposits - 43,018 43,018 - - Total current liabilities 13,392,597 6,679,586 20,072,183 46,550 686,938 NONCURRENT LIABILITIES General obligation bonds payable 35,730,679 1,890,000 37,620,679 305,551 - Certificatesofobligation 6,103,178 10,384,540 16,487,718 42,640 9,863,519 Sales tax revenue bonds 2,640,000 - 2,640,000 - - Loans payable 1,257,531 - 1,257,531 - - Compensated absences 918,783 120,073 1,038,856 - - Accrued arbitrage liability 165,867 - 165,867 - - Other post employment benefits obligation 1,263,355 152,645 1,416,000 - - Net pension obligation 1,249,281 - 1,249,281 - - Total noncurrent liabilities 49,328,674 12,547,258 61,875,932 348,191 9,863,519 Total liabilities 62,721,271 19,226,844 81,948,115 394,741 10,550,457 Net assets Invested in capital assets, net of related debt 142,066,447 62,354,993 204,421,440 - - Restricted for: Debt service 4,693,345 409,552 5,102,897 715,487 2,178,696 Impact fees restricted for construction - 2,609,227 2,609,227 - - Unrestricted 52,082,125 25,309,106 77,391,231 - - Total net assets $ 198,841,917 $ 90,682,878 $ 289,524,795 $ 715,487 $ 2,178,696 The notes to the financial statements are an integral part of this statement. 17 CITY OF NORTH RICHLAND HILLS, TEXAS Government-wide Statement of Activities Year Ended September 30, 2009 Program Revenues Net (Expense) Revenue and Changes in Net Assets Operating Capital Grants Charges for Grants and and Govemmental Business-type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Primary Govemment Govemmental activities: General govemment $ 16,355,871 $ 4,547,658 $ 532,481 $ - $ (11,275,732) $ (11,275,732) Public safety 27,772,668 4,922,180 386,874 450,516 (22,013,098) (22,013,098) Culture and recreation 10,718,579 1,446,132 80,511 9,846,526 654,590 654,590 Public works 2,126,721 1,896,764 142,377 1,044,626 957,046 957,046 Interest and other fees 2,269,541 - - - (2,269,541) (2,269,541) Total governmental activities 59,243,380 12,812,734 1,142,243 11,341,668 (33,946,735) (33,946,735) Business-type activities: Water and sewer 25,121,565 25,060,898 - - (60,667) (60,667) Golf course 2,217,868 2,509,577 - - 291,709 291,709 Aquatic park 4,105,695 3,858,389 - - (247,306) (247,306) Total business-type activities 31,445,128 31,428,864 - - (16,264) (16,264) Total primary government $ 90,688,508 $ 44,241,598 $ 1,142,243 $ 11,341,668 $ (33,946,735) $ (16,264) $ (33,962,999) w Component units Tax increment financing district #1 Tax increment financing district #2 Total component units Component Units $ 44,946 $ - $ - $ - $ - $ - $ - $ 44,946 10,467,243 - - 1,100,000 - - - 9,367,243 $ 10,512,189 $ - $ - $ 1,100,000 $ - $ - $ - $ 9,412,189 General revenue: Taxes: Property Sales Mixed beverage Franchise Occupancy Unrestricted investment earnings Miscellaneous Transfers between governmental and business-type activities Total general revenue and transfers Change in net assets Net assets -beginning of year Net assets -end of year The notes to the financial statements are an integral part of this statement. $ 20,605,670 $ - $ 20,605,670 $ 2,745,634 16,058,728 - 16,058,728 - 117,757 - 117,757 - 3,802,559 - 3,802,559 - 152,220 - 152,220 - 1,611,632 740,393 2,352,025 319,813 188,512 (10,986) 177,526 - 2,586,937 (2,586,937) - - 45,124,015 (1,857,530) 43,266,485 3,065,447 11,177,280 (1,873,794) 9,303,486 (6,346,742) 187,664,637 92,556,672 280,221,309 9,240,925 $ 198,841,917 $ 90,682,878 $ 289,524,795 $ 2,894,183 D '-'~ DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Balance Sheet GOVERNMENTAL FUNDS September 30, 2009 General Capital General Debt Other Total General Projects Service Governmental Governmental Assets Deposits and investments $ 14,436,277 $ - $ 3,669,174 $ 8,353,723 $ 26,459,174 Receivables, net of allowance Accounts 936,510 - - 93,655 1,030,165 Property taxes 204,072 - - - 204,072 Other taxes receivable 1,409,704 - - 1,395,765 2,805,469 Interest receivable 28,522 65,948 4,613 16,644 115,727 Special assessments receivable - 86,686 - - 86,686 Intergovernmental receivable 44,102 144,629 - 215,648 404,379 Other receivables 347,965 65,480 - 31,403 444,848 Due from other funds 150,000 - - - 150,000 Prepaid items 12,500 - - - 12,500 Inventories, at cost 151,952 - - 14,346 166,298 Advances to other funds 328,064 - - - 328,064 Restricted: Deposits and investments: Construction funds - 26,135,595 - 2,929,750 29,065,345 Transition funds - - - 290,489 290,489 Total assets $ 18,049,668 $ 26,498,338 $ 3,673,787 $ 13,341,423 $ 61,563,216 Liabilities Accounts payable $ 1,049,756 $ 303,813 $ - $ 266,491 $ 1,620,060 Retainage payable - 12,753 - 9,119 21,872 Accrued liabilities 456,484 4,542 - 86,674 547,700 Intergovernmental payables - - - 189,982 189,982 Due to other funds - - - 150,000 150,000 Deposits and other liabilities 613,193 591,373 - 2,433 1,206,999 Deferred revenue 271,450 202,704 - 243,133 717,287 Total liabilities 2,390,883 1,115,185 - 947,832 4,453,900 Fund Balance Reserved for encumbrances 205,527 1,244,668 - 391,969 1,842,164 Reserved for inventories 151,952 - - 14,346 166,298 Reserved for prepaids 12,500 - - - 12,500 Reserved for advances 328,064 - - - 328,064 Reserved for debt service - - 3,673,787 1,019,558 4,693,345 Reserved for capital improvements - 24,138,485 - 3,274,257 27,412,742 Unreserved, designated for: Crime control district transition - - - 842,369 842,369 Economic development 2,500,000 - - - 2,500,000 Muncipal court technology & security 625,873 - - - 625,873 Benefit conversion program 120,000 - - - 120,000 Savings incentive program 250,360 - - - 250,360 Retirement stabilization 250,000 - - - 250,000 Utility billing assistance 94,569 - - - 94,569 Crime control district contingency 200,000 - - - 200,000 Rail station project 800,000 - - - 800,000 Golf course equipment loan 392,000 - - - 392,000 Insurance restoration plan 115,800 - - - 115,800 Unreserved, undesignated for: General fund 9,612,140 - - - 9,612,140 Special revenue - - - 6,851,092 6,851,092 Total fund balance 15,658,785 25,383,153 3,673,787 12,393,591 57,109,316 Total liabilities and fund balance $ 18,049,668 $ 26,498,338 $ 3,673,787 $ 13,341,423 $ 61,563,216 The notes to the financial statements are an integral part of this statement 19 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Reconciliation of the Balance Sheet of Govermental Funds to the Statement of Net Assets GOVERNMENTAL FUNDS September 30, 2009 Total fund balances--governmental funds $ 57,109,316 Amounts reported for governmental activities in the statement of net assets page 18 are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported as assets in governmental funds. 188,004,415 Certain receivables are not available to pay current-period expenditures and, therefore, are deferred in the funds. 1,184,578 Internal service funds are used by the City's management for building and vehicle support services, self insurance, and information services. The assets and liabilities of the internal service funds are included with governmental activities in the Statement of Net Assets but are not included at the fund level. 9,471,435 Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported as liabilities in the funds. (56,927,827) Total net assets--governmental activities $ 198,841,917 The notes to the financial statements are an integral part of this statement. See note II A for additional information on reconciliation calculations. 20 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Revenues, Expenditures, and Changes in Fund Balance GOVERNMENTAL FUNDS Year Ended September 30, 2009 REVENUES Taxes Licenses and permits Charges for services Fines Civil citations Contributions Special assessments Investment income Intergovernmental Drainage fees Tennis center Forfeitures Mineral rights lease income Miscellaneous Total revenues EXPENDITURES General government Public safety Culture and recreation Public works Capital outlay: General government Public safety Culture and recreation Public works Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Issuance of debt Premium on issuance of debt Proceeds from sale of assets Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance -beginning of year Fund balance -end of year General Capital General Debt Other Total General Projects Service Governmental Governmental $ 26,207,388 $ - $ 6,322,088 $ 8,207,458 $ 40,736,934 988,020 - - - 988,020 5,402,259 - - - 5,402,259 2,677,901 - - - 2,677,901 - - - 999,584 999,584 - - - 160,194 160,194 - 276,475 - - 276,475 426,894 392,609 89,265 341,359 1,250,127 234,227 902,249 335,125 1,005,590 2,477,191 - - - 834,075 834,075 - - - 325,907 325,907 - - - 146,830 146,830 - - - 75,282 75,282 280,533 7,053 - 154,624 442,210 36,217,222 1,578,386 6,746,478 12,250,903 56,792,989 9,032,945 - - 426,448 9,459,393 19,559,154 - - 5,703,005 25,262,159 4,313,335 - - 4,232,480 8,545,815 2,478,800 - - - 2,478,800 - 4,116,759 - 4,438 4,121,197 - 5,708 - 439,506 445,214 - 17,654 - 790,406 808,060 - 4,991,139 - 140,959 5,132,098 - - 4,779,394 920,000 5,699,394 - 58,242 1,936,845 53,609 2,048,696 35,384,234 9,189,502 6,716,239 12,710,851 64,000,826 832,988 (7,611,116) 30,239 (459,948) (7,207,837) - 8,503,525 - - 8,503,525 - 242 - - 242 187,433 - - 1,079 188,512 1,622,201 4,950,200 583,803 2,118,741 9,274,945 (1,356,589) (500,000) (89,265) (5,813,590) (7,759,444) 453,045 12,953,967 494,538 (3,693,770) 10,207,780 1,286,033 5,342,851 524,777 (4,153,718) 2,999,943 14,372,752 20,040,302 3,149,010 16,547,309 54,109,373 $ 15,658,785 $ 25,383,153 $ 3,673,787 $ 12,393,591 $ 57,109,316 The notes to the financial statement are an integral part of this statement. 21 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended September 30, 2009 Net change in fund balances--total governmental funds $ 2,999,943 Amounts reported for governmental activities in the statement of activities (page 19) are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. 3,020,080 The net effect of various transactions involving capital assets (i.e. sales, trade-ins, and donations) is to decrease net assets 10,630,740 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 55,134 Certain long-term liabilities are accrued at the government-wide level but not at the fund level. The current year change in those liabilities is reported as expense in the statement of activities. Expenses recorded for accrual of interest and amortization expense are included in this category. (2,703,039) Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long- term liabilities in the statement of net assets. This is the difference between repayments and proceeds received. (2,760,011) Internal service funds are used by management to charge the costs of certain activities, such as insurance and fleet maintenance, to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities. (65,567) Change in net assets of governmental activities $ 11,177,280 The notes to the financial statements are an integral part of this statement. See note II B for additional information on reconciliation calculations. 22 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Net Assets PROPRIETARY FUNDS September 30, 2009 Enterprise Funds Water and Sewer Golf Course Aquatic Park Total Enterprise Internal Service Assets CURRENT ASSETS Deposits and investments $ 13,750,692 $ 598,702 $ 3,657,097 $ 18,006,491 $ 6,399,563 Accounts receivable, net of allowance: Billed 1,693,010 - - 1,693,010 - Unbilled 1,529,147 - - 1,529,147 - Other 163,986 43,432 78,698 286,116 11,458 Interest receivable 97,574 962 16,597 115,133 58,905 Intergovernmentalreceivable 514,065 - - 514,065 - Prepaid items 8,646 32,906 1,315 42,867 - Duefromotherfunds 28,878 - - 28,878 - Inventories, at cost 298,784 71,429 26,353 396,566 99,943 Total current assets 18,084,782 747,431 3,780,060 22,612,273 6,569,869 NONCURRENT ASSETS Restricted assets: Deposits and investments: Construction funds 6,296,132 66,637 - 6,362,769 588,815 Debt service reserve funds 474,494 - 378,809 853,303 - Impact fees construction funds 2,215,619 - - 2,215,619 - Customer deposits 1,627,677 - - 1,627,677 - Future construction - - - - 2,351,325 Future claims - - - - 2,253,149 Other funds 83,637 83,637 323,142 Total deposits and investments 10,613,922 150,274 378,809 11,143,005 5,516,431 Bond issues costs, net of amortization 83,374 13,102 75,155 171,631 - Advances to other funds 235,501 - - 235,501 - Capital assets, at cost: Land 22,868 1,758,000 745,771 2,526,639 - Building and improvements 1,136,327 802,762 1,818,815 3,757,904 272,293 Other improvements - 5,289,657 17,226,308 22,515,965 - Utility plant in service 88,881,597 - - 88,881,597 - Machinery and equipment 1,093,498 1,530,052 712,347 3,335,897 8,310,833 Construction in progress 1,838,539 - - 1,838,539 - Accumulated depreciation (40,046,509) (4,589,422) (6,039,824) (50,675,755) (5,588,202) Net capital assets 52,926,320 4,791,049 14,463,417 72,180,786 2,994,924 Total noncurrent assets 63,859,117 4,954,425 14,917,381 83,730,923 8,511,355 Total assets 81,943,899 5,701,856 18,697,441 106,343,196 15,081,224 Liabilities CURRENT LIABILITIES Accounts payable 2,058,094 47,101 55,146 2,160,341 213,356 Accrued liabilities 57,691 24,627 9,120 91,438 873,914 Retainage payable 31,827 - 129,684 161,511 - Othercurtentliabiilties 41,836 30,559 4,533 76,928 35,262 Compensated absences 262,558 - 39,596 302,154 143,160 Deferred revenue - 114,923 - 114,923 11,535 Due to other funds - 28,878 - 28,878 - Accrued interest payable 67,594 9,692 24,521 101,807 - Bonds payable 348,408 513,212 413,736 1,275,356 - Customer deposits 1,690,423 - - 1,690,423 - Developerdeposits 43,018 - - 43,018 Total current liabilities 4,601,449 768,992 676,336 6,046,777 1,277,227 NONCURRENT LIABILITIES General obligation bonds payable 259,088 735,799 880,000 1,874,887 - Certificates of obligation bonds payable 4,912,012 543,905 4,965,160 10,421,077 - Compensaled absences 103,964 - 16,109 120,073 86,509 Intergovernmental payables 640,263 - - 640,263 - Other post employment benefits obligation 130,414 - 22,231 152,645 87,084 Advances from other funds 563,565 - 563,565 Total noncurtent liabilities 6,045,741 1,843,269 5,883,500 13,772,510 173,593 Total liabilities 10,647,190 2,612,261 6,559,836 19,819,287 1,450,820 Net Assets Invested in capital assets, net of related debt 50,919,422 3,026,462 8,409,109 62,354,993 2,994,923 Impact fees restricted for construction 2,609,227 - - 2,609,227 - Restricted for debt service 409,552 - - 409,552 - Unrestricted 17,358,508 63,133 3,728,496 21,150,137 10,635,481 Total net assets $ 71,296,709 $ 3,089,595 $ 12,137,605 $ 86,523,909 $ 13,630,404 Reconciliation to business-type activities: Some amounts reported for business-type activities in the Statement of Net Assets are different because certain internal balances are included with business-type activities. 4,158,969 Net assets of business-type activities $ 90,682,878 The notes to the financial statements are an integral part of this statement. 23 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Revenues, Expenses, and Changes in Net Assets PROPRIETARY FUNDS Year Ended September 30, 2009 Enterprise Funds OPERATING REVENUES Water and sewer service Water and sewer connections Service charges Inspection fees Assessment revenues Gott course fees and charges Aquatic park admissions Recreation equipment rental Food, beverage, and gifts Sponsorships Other intergovernmental Intemal service revenues Insurance premiums Maintenance services Computer services Telephone services Miscellaneous revenues Total operating revenues OPERATING EXPENSES Claims Contractual services Water purchases Wastewater treatment services Personnel services Golf course sales and service Repairs and maintenance Supplies Administration fees Depreciation Total operating expense Operating income (loss) NONOPERATING REVENUES (EXPENSES) Investment income Interest and fiscal charges Insurance recovery proceeds Other income (expense) Gain (loss) on disposal of assets Total nonoperating revenues (expenses) Income (loss) before transfers TRANSFERS Transfers in Transfers out Total transfers -net Change in net assets Net assets -beginning of year Net assets -end of year Water and Sewer Golf Course Aquatic Park Total Enterprise Intemal Service $ 23,861,531 $ - $ - $ 23,861,531 $ - 148,758 - - 148,758 - 911,619 - - 911,619 - 10,887 - - 10,887 - 1,934 - - 1,934 - - 2,474,373 - 2,474,373 - - - 3,123,319 3,123,319 - - - 53,399 53,399 - - - 625,383 625,383 - - - 24,750 24,750 - 124,431 35,204 - 159,635 8,998 - - - - 8,978,072 - - - - 3,778,076 - - - - 2,012,415 - - - - 405,052 1,738 - 31,538 33,276 134,328 25,060,898 2,509,577 3,858,389 31,428,864 15,316,941 - - - - 6,944,691 2,752,682 - 912,025 3,664,707 1,771,804 6,756,058 - - 6,756,058 - 4,561,547 - - 4,561,547 - 4,634,623 - 1,554,675 6,189,298 3,156,215 - 1,815,582 - 1,815,582 - 1,719,103 - 68,177 1,787,280 1,881,231 222,611 - 592,192 814,803 995,083 1,559,825 - 156,435 1,716,260 - 2,752,637 310,844 644,033 3,707,514 636,265 24,959,086 2,126,426 3,927,537 31,013,049 15,385,289 101,812 383,151 (69,148) 415,815 (68,348) 614,982 13,576 111,835 740,393 306,438 (162,479) (91,442) (178,158) (432,079) - - - - - 312,401 36 - - 36 12,753 (11,022) - (11,022) (1,700,247) 441,517 (77,866) (66,323) 297,328 (1,068,655) 543,329 305,285 (135,471) 713,143 (1,137,003) - 35,270 - 35,270 205,189 (1,461,536) (160,000) (60,000) (1,681,536) (74,424) (1,461,536) (124,730) (60,000) (1,646,266) 130,765 (918,207) 180,555 (195,471) (933,123) (1,006,238) 72,214,916 2,909,040 12,333,076 87,457,032 14,636,642 $ 71,296,709 $ 3,089,595 $ 12,137,605 $ 86,523,909 $ 13,630,404 Reconciliation of Change in Net Assets -Business-type Activities: Change in net assets of business-type activities Some amounts reported for business-type activities in the Statement of Activities are different because the net revenue of certain internal revenue service funds is reported with business-type activities Change in net assets of business-type activities The notes to the financial statements are an intergral part of this statement. $ (933,123) (940,671) $ (1,873,794) 24 DRAFT Cash flows from operating activities: Receipts from customers Receipts from intertund services provided Other cash receipts Payments to suppliers Payments to employees Payments for internal services Net cash provided by (used for) operating activities Cash flows from noncapital financing activities: Transfers from other funds Transfers tc other funds Intertund loan receipts Intertund loan payments Net cash provided by (used for) noncapital and related financing activities Cash flows from capital and related financing activities: Insurance recovery proceeds Proceeds from capital debt Acquisition and construction of capital assets Principal paid on capital debt Interest paid on capital debt Proceeds from the sale of assets Net cash provided by (used for) capital and related financing activities Cash flows from investing activities: Interest and dividends received Net cash provided by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalent beginning of yeas Cash and cash equivalent end of yeas CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Cash Flows Proprietary Funds Year Ended September 30, 2009 Enterprise Funds Water and Aquatic Total Internal Sewer Golf Course Park Enterprise Service $ 25,236,290 $ 2,541,778 $ 3,790,338 $ 31,568,406 $ - - - - - 14,945,677 387,994 35,204 31,538 454,736 384,435 (15,663,636) (1,968,381) (1,521,995) (19,154,012) (12,890,485) (4,438,586) (32,668) (1,524,460) (5,995,714) (3,043,240) (1,559,825) - (156,435) (1,716,260) - 3,962,237 575,933 618,986 5,157,156 (603,613) - 35,270 - 35,270 205,189 (1,461,536) (160,000) (60,000) (1,681,536) (74,424) 26,532 328,064 354,596 - - (100,054) - (100,054) - (1,435,004) 103,280 (60,000) (1,391,724) 130,765 - - - - 312,401 3,115,000 - 1,855,000 4,970,000 - (2,910,296) (164,872) (2,278,529) (5,353,697) (1,724,062) (192,673) (491,137) (337,708) (1,021,518) - (136,164) (95,444) (206,475) (438,083) - - - - - 565,404 (124,133) (751,453) (967,712) (1,843,298) (846,257) 673,273 13,083 129,922 816,278 345,830 673,273 13,083 129,922 816,278 345,830 3,076,373 (59,157) (278,804) 2,738,412 (973,275) 21,288,241 808,133 4,314,710 26,411,084 12,889,269 $ 24,364,614 $ 748,976 $ 4,035,906 $ 29,149,496 $ 11,915,994 Reconciliation of operating income to net cash provided by (used for) operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided by (used for) operating activities: Depreciation expense Other (expense) income (Increase) decrease in accounts receivable (Increase) decrease in inventories (Increase) decrease in prepaid items Increase in customer deposits Increase in deferred revenue Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Total adjustments $ 101,812 $ 383,151 $ (69,148) $ 415,815 $ (68,348) 2,752,637 310,844 644,033 3,707,514 496,220 252,140 (116) 694 252,718 - 183,695 5,660 (36,513) 152,842 82,136 82,240 (4,312) (10,030) 67,898 42,291 1,126 (19,214) (1,315) (19,403) 35,349 117,866 - - 117,866 - 61,745 - 61,745 11,535 321,833 (129,157) 61,050 253,726 (279,816) 148,888 (32,668) 30,215 146,435 (922,980) 3,860,425 192,782 688,134 4,741,341 (535,265) Net cash provided by operating activities $ 3,962,237 $ 575,933 $ 618,986 $ 5,157,156 $ (603,613) Noncash financing activities: Disposal of capital assets $ (11,022) $ - $ - $ - $ (1,716,740) The notes to the financial statements are an integral part of this statement. 25 DRAFT NTr~H This page intentionally left blank. 26 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 Page Note I Summary of Significant Accounting Policies 29 A. Reporting entity 29 B. Government-wide and fund financial statements 29 C. Measurement focus, basis of accounting, and financial statement Presentation 30 D. Assets, liabilities, and net assets or fund balance 32 Deposits and investments 32 Receivables and payables 32 Inventories and prepaid items 33 Restricted assets 33 Capital assets 34 Compensated absences 35 Long-term obligations 35 Fund Balance 35 Note II Reconciliation of Government-Wide and Governmental Fund Financial Statements 36 A. Balance sheet reconciliation 36 B. Statement of revenues, expenditures, and changes in fund balance reconciliation 38 Note III Stewardship, Compliance, and Accountability 39 A. Budgetary information 39 B. Excess expenditures over appropriations 40 C. Deficit fund equity 40 Note IV Detailed Notes on All Funds 40 A. Deposits and investments 40 Deposits 40 Investments 41 Interest rate risk 42 Custodial credit risk 42 Credit risk 43 B. Receivables 43 Deferred revenue 44 C. Capital assets 45 Construction commitments 46 D. Interfund receivables, payables, and transfers 47 E. Long-term debt 49 General obligation bonds 49 Certificates of obligation 50 Component units 50 Revenue bonds 51 Loans payable 51 Changes in long-term liabilities 52 Defeased debt outstanding 53 27 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 Page Note V Other Information 53 A. Risk management 53 B. Contingent liabilities 53 C. Conduit debt obligations 54 D. Post-employment benefits 54 Deferred Compensation Plan 54 Retiree Healthcare Plan 54 E. Employee retirement systems and pension plans 56 Plan description 56 Contribution 57 Supplemental Death Benefits Fund 58 F. Operating leases 59 G. Implementation of GASB Statements 59 Future implementation 59 zs DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of North Richland Hills, Texas (the "City") Home Rule Charter was adopted by the voters at an election held on November 3, 1964. The City operates under aCouncil-Manager form of government. The City provides a full range of services including police and fire protection; municipal court operations; the construction and maintenance of streets and infrastructure; parks, library, and recreational activities including tennis center operations; neighborhood services activities; planning and inspections; and the operations of a water and wastewater system, a golf course, and a public water park. A private contractor, through a franchise agreement, provides solid waste collection and disposal services for the City. The accounting policies of the City conform to accounting principles generally accepted in the United States of America ("GAAP") as applicable to governmental units. The Governmental Accounting Standards Board ("GASB") is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant accounting policies of the City are described below. A. Reporting Entity As required by GAAP, these basic financial statements present the primary government and its component units, entities for which the government is considered to be financially accountable. The blended component units, although legally separate entities, are, in substance, part of the primary government's operations. As such, data from these units is combined with data of the primary government. Discretely presented component units are entities that are legally separate from the City, but for which the City is financially accountable or whose relationships with the City are such that exclusion would be misleading or incomplete. Discretely presented component units of the City are presented in a separate column in the basic financial statements to emphasize they are legally separate from the primary government. The component units have September 30"' year-ends. Blended Component Units -The North Richland Hills Parks and Recreation Facilities Development Corporation ("PRD") is used to account for the accumulation of resources to build and improve City parks and recreational facilities and fund economic development activities. The North Richland Hills Crime Control and Prevention District ("CCD") is used to account for the accumulation and use of half-cent sales tax proceeds dedicated for crime reduction programs. The PRD and CCD are reported as special revenue funds of the primary government. The Boards of Directors of both component units are substantially the same as the City Council. Discretely Presented Component Units -Tax Increment Financing District No. 1 ("TIF #1") was created to fund drainage improvements that would alleviate flooding problems, reduce property damage associated with the flooding, and stimulate development for the benefit of citizens within TIF #1. Tax Increment Financing District No. 2 ("TIF #2") was created to provide funding for public improvements that would benefit the participants in and citizens of TIF #2 as well as others in the Metroplex area. Planned public improvements totaling $65.2 million include construction of a conference center, a recreation center, a library, and infrastructure improvements. These TIFs meet the criteria for being classified as discrete component units as the City appoints a voting majority of the organizations' governing bodies and is able to impose its will on the organizations, and because the organizations are fiscally dependent on the primary government. B. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been eliminated from these statements. However, intertund services provided and used are not eliminated in the consolidation process. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on user fees and charges for support. Likewise, the primary government is 2s DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment; and grants and contributions that are designated to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. The government reports the following major governmental funds: The General Fund is the City's primary operating fund. It accounts for all financial resources traditionally associated with governments which are not required to be accounted for in another fund. Major functions financed by the General Fund include general government, public safety, culture and recreation, and public works. Financing is provided from taxes (primarily property, sales, and franchise), licenses and permits, fines, and investment income. The General Capital Projects Fund is used to account for financial resources used for the acquisition and construction of major street, drainage, and municipal facilities capital assets. The General Debt Service Fund accounts for the accumulation of resources for the payment of principal, interest, and related charges on long-term general obligation debt of governmental funds. Financing is provided primarily by a specific annual property tax levy. 30 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 The government reports the following major proprietary funds The Water and Sewer Fund accounts for the distribution of water, transportation of wastewater, and solid waste removal services provided to the residents of the City. All activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations, maintenance, financing and debt service, and billing and collections. The Golf Course Fund accounts for the operations of Iron Horse Golf Course, the City's public golf course. All activities necessary to operate the course are accounted for in the fund, including, but not limited to, administration, operations, course maintenance, and financing and debt service. The Aquatic Park Fund accounts for the operation of NRH2O, the City's public water park. All activities necessary to operate the park are accounted for in the fund, including, but not limited to, administration, park operations, park maintenance, and financing and debt service. Several additional special revenue funds are used to account for specific revenue sources as well as the specialized operations funded therewith. The Promotional Fund accounts for the operations and expenditures for which hotel/motel occupancy taxes are used. Occupancy tax revenues are primarily to attract tourist and new businesses to the City. The Donations Fund holds funds contributed (donated) to the City for special projects earmarked by requests or nonrecurring expenditures. It primarily collects and holds funds that are voluntarily given by the citizens via adding $1.50 to their water utility billing which is then distributed to support the activities of the library and neighborhood services departments. The Special Investigations Fund is mandated by state statue to account for various legal seizure and forfeiture deposits and expenditures. The Drainage Utility Fund accounts for the establishment of drainage facilities within the municipal boundaries of the City and the subsequent billing and collection of fees so established. The Grant Fund is a centralized fund accounting for all private, local, state, and federal grant proceeds. The Economic Development Fund accounts for the accumulation and expenditure of resources designed to stimulate the local economy, development, and redevelopment. The Traffic Safety Fund accounts for funds collected from various red-light traffic safety cameras. These resources assist with funding of various traffic safety projects. The Sales Tax Revenue Debt Service Fund is used to accumulate monies for the payment of principal, interest, and related charges on sales tax revenue bonds. Internal Service Funds account for building maintenance services, fleet management, computer and telephone service, as well as insurance coverage provided to other departments of the City, on a cost reimbursement basis. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in the 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 the business- type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. 31 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. However, interfund services provided and used are not eliminated in the consolidation process. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. 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 a proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise funds and of the internal service funds are charges to customers for sales and services. The City also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting the definition are reported as non-operating revenues and expenses. When both designated and undesignated resources are available for use, it is the government's policy to use designated resources first, then undesignated resources as they are needed. D. Assets, Liabilities, and Net Assets or Fund Balance Deposits and investments Deposits consist of cash and cash equivalents. Substantially all operating deposits and investments are maintained in pooled deposits and investment accounts. Interest income relating to pooled deposits and investments is allocated monthly to the participating individual funds based on each fund's pro-rata share of total pooled deposits and investments. Investments consist of (1) investments in public fund investment pools, (2) short-term investments that mature in 12 months or less from the time of purchase and (3) investments that mature in greater than 12 months from the time of purchase. Other than investment pools, most of the City's investments are long-term (i.e., at the time of purchase, the maturity equals or exceeds one year) and, accordingly, the investments are carried at fair value in accordance with GASB Statement No. 31, "Accounting and Financial Reporting for Certain Investments and for External Investment Pools." Legal provisions generally permit the City to invest in certificates of deposit, repurchase agreements, public funds investment pools, direct obligations of the United States of America or its subdivisions, and state and local government securities. During the year ended September 30, 2009, the City did not own any types of securities other than those permitted by statute. For the purposes of presenting the statement of cash flows for Proprietary Funds, cash and cash equivalents are defined as cash and the funds' investment in the City's pooled accounts which provide cash-equivalent liquidity (Note Imo. Receivables and oavables Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances." 32 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All trade and property tax receivables are shown net of an allowance for uncollectibles. The City's property tax is levied each October 1 on the assessed value listed as of the prior January 1 for all real property and certain personal property located in the City. Tax liens attach as of February 1. Taxes are due upon receipt of the tax bill. Property taxes are limited by the Texas Constitution to $2.50 per $100 of assessed valuation and by City Charter to $1.50 per $100 assessed valuation. The combined tax rate to finance general governmental service and debt service for the year ended September 30, 2009 was $.57 per $100 of assessed valuation. Inventories and prepaid items All inventories are valued at cost using the first-in/first-out ("FIFO") method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Inventories are offset by a fund balance reserve account in applicable governmental funds to indicate the inventory values are not available for appropriation and are not expendable available financial resources. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Restricted assets Certain resources set aside for the repayment of outstanding City debt are classified as designated assets on the balance sheet because their use is limited. The "debt service reserve funds" are used to segregate resources accumulated for the current portion of outstanding debt. The "construction funds" account includes, but is not limited to, unspent bond proceeds that are limited as to use for financing the acquisition or construction of capital assets. Fund balances have been reserved for the excess of restricted assets over related liabilities to the extent such restricted assets were accumulated from revenues (i.e., in some cases, restricted assets were obtained in total or in part from bond proceeds). In the Water and Sewer Fund, impact fees are a restriction imposed by the City's governing body for the purpose of collection of funds from developers for specific utility infrastructure improvement projects. State of Texas Statues grants this authority to the City Council which upon their approval is valid fora 5 year period. Every five years, the impact fee plan expires and a new program must be developed and submitted to Council for approval. Also designated in the Water and Sewer Fund are customer deposits. This restriction is contractually supported. The City is not allowed to use the funds unless it is to refund back to the customer for good standing account history or that they default upon the terms of the agreement. Assets have also been designated by management for the following: The Crime Control and Prevention District (Special Revenue) Fund contains assets designated for transition. The "transition" term is used to identify funds that management and city council has designated to offset future unforeseen circumstances (i.e. dissolution of fund due to citizens vote to end operations of the district). If indeed the half-cent sales tax funding CCD activities is discontinued, the designated assets will be used to fund those activities until an alternate funding source can be identified (i.e., during the transition period). 33 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 The Self-Insurance (Internal Service) Fund contain assets designated for future insurance claims. Funds will be accumulated until needed to cover the costs of excessive claims or until management has determined sufficient funds have been accumulated to cover future claims. The Information Services (Internal Service) Fund contains assets designated for future system improvements. The intended purpose is to fund major computer system software and hardware system replacements and upgrades. The Facilities and Construction Services and Fleet Services (Internal Service) Funds contain assets designated for building and equipment maintenance and replacement. The building restriction is used to accumulate funds for the implementation of the multi-year plan. Equipment restrictions are used to accumulate funds for the replacement of vehicles and heavy equipment. Future claims of the Self-Insurance Internal Service Fund are funds set and obligated for future medical, dental, prescription, or other risk payables that could arise in future fiscal periods. This fund has a very proactive approach to plan for future claims and ensure that funding is available to pay when and if the need occurs. Capital assets Capital assets, including property, plant, equipment, and infrastructure assets (e.g., roads, bridges, drainage facilities, parks and related improvements, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements and in the proprietary fund level financial statements. Capital assets are defined by the government as assets with an initial, individual cost of at least $5,000 and an estimated useful life in excess of one year. Assets purchased or constructed are recorded at historical cost when available or estimated historical cost if actual cost is unavailable. Donated capital assets are recorded at estimated fair value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Capital assets of the primary government are capitalized at the following thresholds and are depreciated using the straight-line method over the following estimated useful lives: Asset Category Buildings and improvements Other improvements Water and sewer system Capitalized interest Start-up costs, furniture and fixtures, and certain machinery and equipment Firetrucks and ambulances Other machinery and equipment including vehides Assets purchased or constructed with Federal or State grant funds Useful Life 30 years 30 years 33 years 33 years 10 years 20 years 3-6 years various Capitalization Threshold $ 100,000 $ 100,000 $ 100,000 $ 5,000 $ 5,000 $ 25,000 $ 5,000-25,000 * $ 5,000 *Range is due to different machinery and equipment having different levels of capitalization thresholds within fiscal policy 34 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 Compensated absences City employees are granted vacation leave in varying amounts depending on length of service. Sick leave is also granted to employees after six months of service. In the event of termination after one or more years of service, an employee is paid for all accumulated unused vacation. No reimbursement is made for unused accumulated sick leave upon termination of employment, except upon retirement. Upon retirement, an employee may convert up to six weeks of accrued sick leave to vacation. Sick pay is recorded when taken. All vacation pay is accrued as vested and included in accrued liabilities in the government-wide and proprietary fund financial statements. Accrued vacation pay, including converted sick leave, that is expected to be liquidated within one year, is reported as a short-term liability. The remainder of the liability is reflected as long-term. Compensated absences are reported in governmental funds only if they have matured. Accrued vacation pay and potential sick leave conversion reported on the government-wide financial statements at September 30, 2009 consisted of the following: COMPENSATED BALANCES Governmental activities: Vacation Retirement sick leave conversion Total governmental activities Business-type activities: Vacation Retirement sick leave conversion Total business-type activities Long-term obligations Beginning Ending Due within Balance Additions Reductions Balance One Year $1,927,558 $1,436,120 $1,403,488 $1,960,190 $1,323,912 1,000,723 412,169 397,529 1,015,363 732,858 $2.928.281 $1,848,289 $1,801,017 $2.975.553 $2,056,770 $249,026 $215,829 $193,960 $270,895 $182,962 120,490 90,091 59,249 151,332 119,192 369 516 305 920 253 209 422 227 302 154 In the government-wide financial statements and proprietary funds financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund statement of net assets. Bond premiums and discounts, issuance costs, and losses on bond refundings are deferred and amortized over the life of the related debt using the straight-line method which approximates the interest method. Bonds payable are reported net of the applicable unamortized loss on refunding. In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund balance In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally designated by outside parties for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. 35 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 The General Fund balances contains multiple designations. The information provided will define each designation. • Economic development ("ED") -Council and management have established an ED cash reserve to participate in approved economic development activities throughout the City. • Municipal court technology and security -state statues allow the City to reserve portions of certain court fines and costs for technology and security improvements to our local judicial operations. • Benefit conversion program - funds to be used for retirements of long standing employees who have earned their vacation leave and retirement leave • Savings incentive program -funds to encourage departments to identify and implement cost saving measures whereby savings would be accumulated for authorized use at a later date • Retirement stabilization - funds for anticipated future increases in TMRS funding requirements. • Utility billing assistance - a TXU settlement to be used to help water and sewer customers who are able to prove need of assistance in paying their bills. • Crime control district contingency - to help with the transition of this program when the referendum expires in 2011 (see further information in the following paragraph). • Rail station project -intended to support future infrastructure for alternative transportation methods for the citizens. • Golf course equipment loan -planned loan for funding new equipment and course upgrades. • Insurance restoration plan -restoration of self-insurance reserves plan approved by Council (see following paragraphs for further details) The Crime Control and Prevention District (Special Revenue) Fund balance contains a designation for transition. Assets have been designated in an amount equal to the designation. In the event that the half-cent sales tax funding CCD activities is discontinued at the conclusion of the current referendum in 2011, appropriations from the designation and the associated assets will be used to fund those activities until an alternate funding source can be identified (i.e., during the transition period). The Crime Control and Prevention District Sales Tax referendum will be voted up by the citizens to extend for an additional 10 years in May 2010. In fiscal years 2002 and 2003 the Self-Insurance (Internal Service) Fund reserves were depleted due primarily to spiraling inflation in the health care industry and unforeseeable extraordinary health claims. In fiscal year 2004, City Council adopted a strategy to rebuild reserves over asix-year period beginning in fiscal year 2005. Savings from changes in the health care plan, transfers from existing cash reserves in the General Fund and Water and Sewer Fund, and employee premiums are being used to re-establish the reserves. For fiscal year 2009, the fund recorded a net increase in deposits and investments of $264,019 to end the year at a balance of $5,440,030. II. RECONCILIATION OF GOVERNMENT-WIDE AND GOVERNMENTAL FUND FINANCIAL STATEMENTS A. Explanation of certain differences between the governmental fund balance sheet and the government-wide statement of net assets 36 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 The governmental fund balance sheet includes a reconciliation between fund balance -total governmental funds and net assets -governmental activities as reported in the government-wide statement of net assets. One element of that reconciliation explains that "capital assets used in governmental activities are not financial resources and, therefore, are not reported as assets in governmental funds." The details of the $188,004,415 difference are as follows: Capital assets, net of depreciation Construction in progress Net adjustment of increase fund balance -total govemmental funds to arrive at net assets - govemmental activities $ 181,784,781 6, 219, 634 $ 188,004,415 Another element of that reconciliation explains that "certain receivables are not available to pay current-period expenditures and, therefore, are deferred in the funds." The details of the $1,184,509 difference are as follows: Municipal court receivables, net $ 427,345 Interest receivable 159,622 Other deferred revenue 597,611 Net adjustment to increase fund balance -total governmental funds to arrive at net assets -governmental activities $ 1,184,578 The third element of that reconciliation explains that "the assets and liabilities of the internal service funds are included with governmental activities in the Statement of Net Assets but are not included at the fund level." The details of the $9,073,863 difference are as follows: Net assets, internal service funds combined $ 13,630,404 Amount allocated to business-type activities (4,158,969) Net adjustment to increase fund balance -total governmental funds to arrive at net assets -governmental activities $ 9,471,435 The last element of that reconciliation explains that "long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds." The details of the $56,927,827 difference are as follows: Bonds payable -short-term Bonds payable -long-term Loans payable -short-term Loans payable -long-term Accrued interest payable Arbritrage liability Bond issuance costs Compensated absences Other post employment benefits payable Net pension obligation Net adjustment to reduce fund balance -total governmental funds to arrive at net assets - govemmental activities (5, 685, 580) (44, 473, 857) (292, 235) (1,257,531) (517, 656) (165, 867) 636,336 (2, 745, 884) (1,176,271) (1,249,282) $ (56,927,827) 37 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 B. Explanation of certain differences between the governmental fund statement of revenues, expenditures, and changes in fund balances and the government-wide statement of activities The governmental fund statement of revenues, expenditures, and changes in fund balances includes reconciliation between net changes in fund balances -total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that "governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this $3,020,080 difference are as follows: Capital outlay expense $ 10,506,569 Less: capital outlay expense below capitalization threshold (1,458,998) Depreciation expense (6,027,491) Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ 3,020,080 The next element of that reconciliation explains that "the net effects of various miscellaneous transactions involving capital assets (i.e. sales, trade-ins, and donations) is to decrease net assets." The details of this $10,630,740 difference are as follows: Gain (loss) on disposal of assets $ (2,000) Contribution of capital assets from outside organizations 10,632,740 Net adjustment to increase net changes in fund balances - total govemmental funds to arrive at changes in net assets of govemmental activities $ 10,630,740 The next element of that reconciliation explains that "revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds." The details of this $55,134 difference are as follows: Investment income not available for current financial resources $ 55,134 Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ 55,134 The next element of that reconciliation explains that "certain long-term liabilities are accrued at the government-wide level but not at the fund level." The details of this $(2,703,039) difference are as follows: Changes in: Accrued interest/interest expense $ (243,515) Other post employment benefits expense (1,176,271) Net pension obligation (1,249,281) Compensated absences (33,972) Net adjustment to decrease net changes in fund balances - total govemmental funds to arrive at changes in net assets of governmental activities $ (2,703,039) 38 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 Another element of that reconciliation states that "bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. This is the difference between repayments and proceeds received." The details of this $(2,760,011) difference are as follows: Debt issued or incurred: General obligation bonds Certificates of obligation bonds Loan proceeds Principal repayments: General obligation bonds Certificates of obligation bonds Sales tax revenue bonds Loan principal payments Amortized bond issuance cost expense Net adjustment to decrease net changes in fund balances - total govemmental funds to arrive at changes in net assets of governmental activities (5, 695, 000) (1, 235, 000) (1,573,526) 3, 707, 655 1, 047, 980 920, 000 23,759 44,121 $ (2, 760, 011) Another element of that reconciliation states that "the net revenue (expense) of internal service funds is reported with governmental activities." The details of the $(463,139) difference are as follows: Change in net assets -internal service funds combined $ (1,006,238) Income reflected in business-type activities 940,671 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ (65,567) III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A. Budgetary information Annual budgets are adopted on a basis consistent with generally accepted accounting principles for the following governmental funds: General ,General Debt Service, Promotional, Donations, Special Investigation, Drainage Utility, Parks and Recreation Development, Crime Control District, Gas Development, Traffic Safety, and Sales Tax Revenue Bond Debt Service. The General Capital Projects fund and Grant fund adopt project-length budgets. All annual appropriations lapse at fiscal year end. Prior to September 1, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means of financing them. Public hearings are conducted to obtain taxpayer comments. Prior to September 30, the budget is legally enacted through passage of an ordinance. The appropriated budget is prepared by fund, department, and division. The City Manager is authorized to transfer budgeted amounts between departments within any fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the fund level. During the year, the budget appropriations were decreased by 39 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 $201,297 due to the reduction of the general fund's department titled building services. The department's budget was reduced at midyear in the amount of $234,547. This department's budget primarily houses the costs associated with the internal service fund, Facilities and Construction, which is their internal service charge to general fund. At midyear 2009, management approved a reduction in this appropriation (original appropriation of $641,893) to help support general fund through the tough economic time. At year end management approved the original level of appropriation due to the positive variance from the fund as a whole. This allowed 100% support from general fund to facility and construction fund to maintain their service levels. Overall, the general fund saw a net decrease to departmental appropriations of $201,297 including the afore mentioned transaction. Management stayed within their authoritative level of budget by not allowing General Fund to have a net negative variance as a whole fund. Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders, contracts) outstanding at year end are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitments will be re-appropriated and honored during the subsequent year. B. Excess expenditures over appropriations For the year ended September 30, 2009, expenditures exceeded appropriations at the fund level (the legal level of budgetary control) of $18,986 and $2,159, for Traffic Safety Fund and Drainage Utility Fund respectively. These expenditures were funded by greater than anticipated revenues for both funds. C. Deficit fund equity The Grant fund had a deficit fund balance of $122,127 as of September 30, 2009. This fund records grant transactions for governmental fund activities. During the year the grant activity recorded were reimbursable grant expenditures which at year end were not to be reimbursed and received within 60 days of fiscal year end. This negative fund balance will correct upon receipt of receivable and recording of revenue from deferred status. IV. DETAILED NOTES ON ALL FUNDS A. Deposits and investments Deposits -The City maintains a cash and investment pool that is available for use by all funds. Each fund's portion of the pool is displayed on the statement of net assets as "Deposits and Investments". The investment policy of the City are governed by State statue and a Council adopted City Investment Policy. Major controls stipulated in the Investment Policy include: depository limitations require Federal Deposit Insurance Corporation ("FDIC") insurance or full 100 percent collateralization; depositories are limited to Texas banking institutions; all collateral for repurchase agreements and deposits in held by independent third party trustees; all settlement is delivery versus payment; all authorized investments are defined; and diversification guidelines are set as are maximum maturity and maximum weighted average maturity. State statues require all time and demand deposits to be fully insured or collateralized. At September 30, 2009 the carrying amount of the City's demand deposits and cash on hand was $196,876. Accounts with under $250,000 balance of either an interest bearing account or non- interest bearing account are covered by FDIC deposit insurance. As of September 30, 2009, the City had $709,549 in funds which were uninsured or uncollateralized. As of September 30, 2009, the City's investment portfolio and discretely presented component units' investment portfolios (excluding bank deposits) are held by the City's custodian in the City's name under written agreements. The City's custodian is JP Morgan Chase. 40 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 All security investments are reported at fair value priced by an independent source. The City generally holds all investments to maturity, for investment and income, not speculation. The City held the following cash, cash equivalents, and investments as of September 30, 2009: Primary Government Component Units Governmental Business-type Total Primary TIF#1 TIF#2 Cash on hand (petty cash, cashier tills) $ 6,202 $ 5,000 $ 11,202 $ - $ - Demand Deposit Accounts (833,963) 1,030,839 196,876 - - Certificates of Deposit 1,997,840 936,360 2,934,200 46,240 419,560 Overnightlnvestments 41,032,561 15,365,609 56,398,170 488,037 7,022,334 U.S. Agencies 25,528,362 11,811,688 37,340,050 570,792 5,204,643 Total deposits and investments $ 67,731,002 $ 29,149,496 $ 96,880,498 $1,105,069 $12,646,537 Investments -Weighted average maturity ("WAM") of the portfolio by investment type categories reflected in the following table is stated in days. Investment type acronyms displayed in the previous table are defined as follows: FHLB -Federal Home Loan Bank, FMDN -Freddie Mac U.S. Domestic Medium Term Notes, FFCB -Federal Farm Credit Bank, FNM -Fannie Mae U.S. Domestic Notes, and FAMN -Farmer Mac Domestic Medium Term Bonds. The rating agency acronyms are defined as follows: S&P -Standard and Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc.; Moody's - Moody's Investor Service, Inc.; and, Fitch -Fitch Ratings. Additional information about the rating agencies or the significance of the ratings provided may be obtained from each agency's web site. Legal provisions generally permit the City to invest in certificates of deposit, repurchase agreements, public funds investment pools, direct obligations of the United States of America or its subdivisions, and state and local government securities. Because the City is responsible for the investment portfolio of its component units, the City's investment practices and policies disclosed herein apply equally to its component units. During the year ended September 30, 2009, the City did not own any types of securities other than those permitted by statute. The City's investment pools are 2a7-like pools. A 2a7-like pool is one which is not registered with the Securities and Exchange Commission ("SEC") as an investment company, but nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. This type of pool uses amortized investment costs rather than market values to compute participant share values. Furthermore, the pools in which the City is currently participating seek to maintain a stable $1 net asset value per share or unit. Accordingly, the fair value of the City's position in these pools is substantially the same as the market value of the shares in each of the pools. TexPool falls under the purview of the Texas Comptroller of Public Accounts ("Comptroller") who is responsible for oversight of TexPool operations. LOGIC, TexSTAR, and MBIA Class has established a governing board at least partially comprised of pool participants. Duties of the governing boards include oversight responsibility. The Comptroller and the governing boards exercise oversight of the pools' activities via daily, weekly, and monthly reporting requirements. Additionally, per the requirements of the Public Funds Investment Act ("PFIA"), all portfolios will maintain an AAA or equivalent rating from at least one nationally recognized rating agency. The PFIA also requires an annual examination of the financial statements of the pools by an independent certified public accounting firm. The table below states investments in fair value: 41 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 Primary Government Rating Governmental Business-type Investment Type v~/AM Rating Agency Activities Activities Total Overnight: TexPool LOGIC TexSTAR MBIA Classic Total overnight Component Units Tax Tax Increment Increment Financing Financing District #1 District #2 N/A AAAm S&P $ 28,807,507 $ 11,094,556 $ 39,902,063 $ 488,037 $ 7,022,334 N/A AAAm S&P 8,566,259 3,325,284 11,891,543 - - N/A AAAm S8~P 1,634,632 634,539 2,269,171 - - N/A AA/V1+ Fitch 2,024,163 311,230 2,335,393 - - Certificates of Deposit: A-1 Total certificates of deposit U.S. Agencies FHLB 434 Aaa FMDN 712 Aaa FMN 486 Aaa FAMN 579 Aaa FFCB 250 Aaa Total U.S. Agencies $ 41,032,561 $ 15,365,609 $ 56,398,170 $ 488,037 $ 7,022,334 S&P $ 1,997,840 $ 936,360 $ 2,934,200 $ 46,240 $ 419,560 $ 1,997,840 $ 936,360 $ 2,934,200 $ 46,240 $ 419,560 Moody's $ 13,210,430 $ 6,100,003 $ 19,310,433 $ 293,760 $ 2,680,714 Moody's 4,148,136 1,938,003 6,086,139 95,200 864,830 Moody's 3,076,571 1,417,470 4,494,041 68,000 621,084 Moody's 2,491,557 1,142,827 3,634,384 54,400 497,760 S&P 2,601,667 1,213,386 3,815,053 59,432 540,256 $ 25,528,362 $ 11,811,688 $ 37,340,050 $ 570,792 $ 5,204,643 Total Portfolio 204 $ 68,558,763 $ 28,113,657 $ 96,672,420 $ 1,105,069 $12,646,537 Interest Rate Risk -Interest rate risk is the potential for a decline in market value due to rising interest rates. In accordance with its formally-adopted investment policy, the City manages its exposure to declines in fair market value by limiting the portfolio's weighted average maturity to a maximum of 365 days. The City also employs an investment maturity laddering structure to stagger investment maturities at various monthly rungs on the ladder. This laddering structure provides the City with the ability to reinvest the proceeds from the maturities in higher-yielding securities given the proceeds are not required to meet immediate cash flow needs. The City's current investments mature in 36 months or less. The following details the maturity schedule for the City's investments as of September 30, 2009. Custodial Credit Risk -Custodial credit risk is the risk that a government will not be able to recover (a) deposits if the depository financial institution fails or (b) the value of investment or collateral securities that are in the possession of an outside party if the counterparty to the investment or deposit transaction fails. To minimize such risk, the City requires collateralization of most deposits in excess of coverage, utilizes the delivery vs. payment method for investment purchases, and contracts with athird-party safekeeping agent. Per the terms of its depository agreement, for bank deposits in excess of the coverage provided by the FDIC, the City requires the depository bank to pledge to the City securities (collateral) equal to the following percentages, as applicable, to the largest balances the City maintains in the Bank. U.S. Other Maturity of Collateral Treasuries Securities 1 year or less 101 % 102% 1 year to 5 years 102% 105% Over 5 years 103% 110% 42 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 The percentages as shown reflect the requirement based on market value of the pledged securities. On September 30, 2009, the City's bank balances had $709,549 in funds which were uninsured or uncollaterized. The City's depository bank also acts as its safekeeping agent per the terms of the depository contract. City policy dictates that all securities rendered for payment will be sent delivery vs. payment meaning that the funds required for purchase of a security will not be released until the safekeeping agent has received the security purchased in the City's name. No broker holds City funds. The City does not purchase securities from its depository bank or any subsidiary banks of the same bank holding company. Credit Risk -The Credit Risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. In order to minimize credit risk, the City limits investments to those rated as to investment quality of not less than "A" or its equivalent by a nationally recognized rating firm. Diversification of the portfolio is also employed to manage credit risk. The investment policy limits the percentage of the portfolio that may be invested in any specific type of security. Ratings for the City's investments and the percentage of the total portfolio of each investment type held at the end of year can be found on the first table in this section. B. Receivables Governmental and Business-type funds' receivables as of year end for the City's major funds and non-major in the aggregate, net of the applicable allowances for uncollectible accounts, are as follows: Governmental Funds: General General Capital Debt General Projects Service Non-major Total Accounts $ 1,136,190 $ - $ - $ 93,655 $ 1,229,845 Property taxes 574,557 - - - 574,557 Other taxes 1, 409, 704 - - 1, 395, 765 2, 805,469 Interest 28,522 65,948 4,613 16,644 115,727 Special assessments - 86,686 - - 86,686 Intergovernmental 44,102 144,629 - 215,648 404,379 Other 347,965 65,480 - 31,403 444,848 Total $ 3,541,040 $362,743 $ 4,613 $1,753,115 $ 5,661,511 Allowance (570,166) - - - (570,166) Total $ 2,970,875 $362,743 $ 4,613 $1,753,115 $ 5,091,346 This section of this page is intentionally left blank. Notes are continued on the next page 43 DRAFT Proprietary Funds: Accounts Interest Intergovernmental Total Allowance Total (net of allowance) Deferred Revenue CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 Water and Aquatic Sewer Golf Park Tota I Enterprise Internal Funds Service $ 3,453,882 $ 43,532 $ 78,698 $ 3,576,112 $ 11,458 97,574 962 16,597 115,133 58,905 514,065 - - 514,065 - $ 4,065,521 $ 44,494 $ 95,295 $ 4,205,310 $ 70,363 (67,739) (100) - (67,839) - $ 3,997,782 $ 44,394 $ 95,295 $ 4,137,471 $ 70,363 Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows: Unavailable Unearned Delinquent property taxes receivable (General Fund) $ 204,072 $ - Rental deposits (General Fund) 5,669 Recreation memberships/fees (General Fund) - 27,122 Escrow Deposits/customer deposits (General Fund) - 34,587 Deferred Revenue (Park and Recreation Fund) 236,268 2,719 Special assessments (General Capital Projects Fund) 137,224 - Grant proceeds (Grant Fund) - 4,146 Accounts (developer) receivable (General Capital Projects Fund) 20,047 45,433 Total deferred/unearned revenue for governmental funds $ 597,611 $ 119,676 Reconciliation of unearned revenues to the Government-wide Statement of Net Assets is as follows: Governmental activities unearned revenue is: Unearned Governmental funds $ 119,676 Internal service funds 11,535 Total unearned revenue $ 131,211 Business-type activities for unearned revenue is: Unearned Golf Deposits, Check and Gift Certificates $ 112,264 Pro Shop Store Credit 2,659 Total unearned revenue for business-type $ 114,923 44 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 C. Capital assets Capital asset activity for the year ended September 30, 2009 was as follows: Component units (Tax Increment Fnancing District #2): Beginning Ending Balance Increases Decreases Balance Capital assets, nondepreciable Construction in progress $ 9,846,527 $ - $ 9,846,527 $ - Total nondepreciable $ 9,846,527 $ - $ 9,846,527 $ - Primary Government Beginning Ending Governmental activities: Balance Increases Decreases Balance Capital assets, nondepreciable Land $ 67,760,221 $ 4,351,385 $ - $ 72,111,606 Works of art 72,491 - - 72,491 Construction in progress 17,421,997 7,126,537 18,328,900 6,219,634 Total nondepreciable 85,254,709 11,477,922 18,328,900 78,403,731 Capital assets, depreciable: Buildings 24,429,686 15,565,573 - 39,995,259 Infrastructure 138,148,421 7,778,510 - 145,926,931 Machinery and equipment 20,107,315 2,800,347 323,803 22,583,859 Total depreciable 182,685,422 26,144,430 323,803 208,506,049 Less accumulated depreciation for: Buildings (13,179,165) (1,478,511) - (14,657,676) Infrastructure (60,920,728) (4,081,917) - (65,002,645) Machinery and equipment (15,464,595) (1,103,328) 317,803 (16,250,120) Total accumulated depreciation (89,564,488) (6,663,756) 317,803 (95,910,441) Total depreciable-net 93,120,934 19,480,674 6,000 112,595,608 Govemmental activities -net $ 178,375,643 $ 30,958,595 $ 18,334,900 $ 190,999,339 This section of this page is intentionally left blank. Notes are continued on the next page. 45 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 Primary Government Beginning Ending Business-type activities: Balance Increases Decreases Balance Capital assets, nondepreciable Land $ 2,526,639 $ - $ - $ 2,526,639 Construction in progress 3,911,262 5,414,600 7,487,323 1,838,539 Total nondepreciable 6,437,901 5,414,600 7,487,323 4,365,178 Capital assets, depreciable: Buildings Utility Plant Infrastructure Machinery and equipment Total depreciable 3,626,441 131,463 85,465,115 3,474,883 19,291,700 3,224,265 2,697,025 704,642 - 3,757,904 58,401 88,881,597 - 22,515,965 65,770 3,335,897 124,171 118,491,363 Less accumulated depreciation for: Buildings Utility Plant Infrastructure Machinery and equipment Total accumulated depreciation Total depreciable -net Business-type activities -net 111,080,281 7,535,253 (1,579,185) (122,850) - (1,702,035) (36,136,524) (2,645,109) (39,819) (38,741,814) (7,373,759) (728,888) - (8,102,647) (1,983,360) (210,668) (64,769) (2,129,259) (47,072,828) (3,707,515) (104,588) (50,675,755) 64,007,453 3,827,738 19,583 67,815,608 $ 70,445,354 $ 9,242,338 $ 7,506,906 $ 72,180,786 The component unit, Tax Incremental Financing District #2, completed a construction project for the new municipal library building. The building was contributed to the governmental activities in 2009. The decrease in construction in progress above is attributable to this contribution. Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government $ 352,790 Public safety 953,374 Culture and recreation 1,147,797 Public works 3,573,529 Internal services 636,265 Total depreciation expense -governmental activities $ 6,663,756 Business-type activities: Water and sewer $ 2,752,638 Golf course 310,844 Aquatic park 644,033 Total depreciation expense -business-type activities $ 3,707,515 Construction commitments The City has active construction projects as of September 30, 2009. The projects include street construction, widening, and streetscaping; as well as construction of drainage facilities, parks and 46 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 park improvements, and municipal facilities. At year-end the City's commitments with contractors were as follows: Expended to Project September 30, Authorization 2009 Committed Streets, drainage, public safety, park improvements, and Utility Improvements $ 75,327,364 $ 31,143,544 $ 44,183,820 D Interfund receivables, payables, and transfers At September 30, 2009, interfund balances consisted of the following: Due to and due from other funds are the short-term portion of the advances to and advances from other funds. The Golf Course Fund is currently repaying two interfund loans to the General Fund and the Water and Sewer Fund. The original General Fund loan was $328,400 with an interest rate of 0.00% and is scheduled for repayment in 2014. The original Water and Sewer Fund loan was $536,000 with an interest rate of 8.50%. The loan is currently being repaid based on water consumption. The current estimated pay-off is fiscal year 2016. The General Fund provided temporary cash to the Grant Fund for a reimbursable grant activity totaling $150,000. Funds are expected to be reimbursed during the next fiscal period due to grantors reimbursing the City for the expenses covered. Due to/due from balances for governmental and proprietary funds are as follows: Go~emmental Funds: Due to Due from Total General Fund Grant Fund $ 150,000 Total $ 150,000 Proprietary Funds: Due to Due from Total Water and Sewer Fund Golf Fund $ 28,878 Total $ 28, 878 Advances to other funds activity are expected to be reimbursed during a longer period of one year. The General Fund and the Water and Sewer Fund have advanced funds to Golf Fund for various equipment and machinery purchases. 2009 advances to other funds ending balances were as follows: 47 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 Govemmental Funds: Advances from Advances to Total General Fund Golf fund $ 328,064 Total ~r Proprietary Funds: Advances from Advances to Total Water and Sewer Fund Golf Fund 235,501 Total In 2009 transfers for governmental funds were made from the General Fund, General Capital Projects Fund, and General Debt Service. General Fund had various appropriations to transfer funding to other activities and operations. $1,100,000 was transferred to General Capital Projects Fund for 2009 capital projects. Crime Control District Fund received $200,000 from the General Fund for additional operating support. The General Fund continued the support to the City's Self- Insurance Fund by transferring $47,589. This transfer was to satisfy a fiscal plan to reestablish the total net assets reserves of the internal service activity. In 2009 General Fund transferred $9,000 to Information Services Fund (Citicable) to reimburse the fund for the city's video production expenses. $89,265 was transferred from General Debt Service to the General Fund to transfer interest earnings to the fund. General Capital Projects returned unused construction funds to Parks and Recreation Development Fund totaling $500,000. Various transfers were made from the non-major funds in 2009 to support other activities and operations. The Drainage Utility Fund transferred $354,198 to the General Debt Service Fund for the fund's portion of the debt payment. Crime Control District Fund transferred $60,000 to Information Services Fund for 2009 capital projects. Parks and Recreations Facilities Development Fund appropriated and transferred $209,441 for Economic Development activity. Transfers were made for the fund's portion of debt service payments: $180,381 to General Debt Service Fund and $1,124,300 to Sales Tax Debt Service Fund. Gas Development appropriated and transferred funding to General Capital Projects for $3,750,000 and Golf Course Fund for $35,270 for 2009 capital projects. Traffic Safety Fund transferred $100,000 to General CIP Fund to support general capital projects. In the proprietary funds transfers were made from Water and Sewer, Golf Course Fund and Aquatic Park in 2009. Water and Sewer transferred $1,372,936 to General Fund for general service activities, $50,000 to the Fleet Services Fund to support general equipment service in the City and $38,600 to Self Insurance Fund for additional support to the fund. Golf Course Fund transferred $160,000 to General Fund to repay a loan from the General Fund. The Aquatic Park Fund transferred $60,000 to Parks and Recreations Facilities Development Fund for landscaping. Internal Service Fund transfers for 2009 were made from Facilities and Construction Management Fund and from the Self Insurance Fund. Facilities and Construction Management Fund transferred $49,224 to General Debt Service Fund for their portion of the debt service payment and $200 to General Capital Projects for 2009 capital projects. The Self Insurance Fund transferred $25,000 to the Parks and Recreations Facilities Fund to repay insurance deductibles. 48 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 Transferred out of: Governmental Funds: General General Capital Projects General Debt Service Non-maior funds Drainage Utility Crime Control District Parks and Recreation Development Gas Development Traffic Safety Enterprise Funds: Water and Sewer Transferred into: General Capital Projects Crime Control District Self Insurance Information Services Total Parks and Recreation Development Total General Fund Total General debt service Information Services Economic Development General debt service Sales Tax Rev. Bond Debt Service General Capital Projects Golf General Capital Projects Total Total Governmental Funds General Fleet Services Self Insurance Total Amount $ 1,100, 000 200, 000 47, 589 9, 000 1, 356, 589 500, 000 500, 000 89, 265 89, 265 354,198 60, 000 209,441 180, 381 1,124, 300 3, 750, 000 35, 270 100, 000 5, 813, 590 $ 7,759,444 $ 1,372,936 50, 000 38, 600 1,461,536 Goff Aquatic Park Internal Service Funds: Facilities and Construction Self Insurance E. Long-term debt General Obligation Bonds General Fund Total Parks and Recreation Development Total Total Enterprise Funds General Debt Service General Capital Projects Parks and Recreation Total Internal Service Funds 160, 000 160, 000 60, 000 60, 000 $ 1,681,536 $ 49, 224 200 25, 000 $ 74,424 The City issues general obligation bonds to provide funds for the acquisition and construction of major capital assets such as streets, drainage structures, and municipal facilities, as well as for the purpose of refunding a portion of its outstanding debt. General obligation bonds have been issued for both governmental and business-type activities. During the year, $5,695,000 in new general obligation bonds was issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. These bonds generally are issued as 20-year serial bonds with equal amounts of principal maturing each year. General obligation bonds currently outstanding are as follows: 49 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 Interest Purpose Rates Amount Governmental activities -improvement 3.00 - 5.60% $ 30,935,000 Governmental activities -refunding 3.50 - 5.60% 8,875,000 Business-type activities -refunding 3.50 - 4.63% 2,350,000 Component units -refunding 3.50 - 4.00% 305,000 Total: $ 42,465,000 Annual debt service requirements to maturity for general obligations bonds are as follows: Year Ending Governmental Activities Business-type Activities Component Units September 30, Principal Interest Principal Interest Principal Interest 2010 $3,600,000 $1,624,367 $ 460,000 $ 85,407 $0 $11,500 2011 3,610,000 1,418,212 485,000 64,310 5,000 11,413 2012 3,625,000 1,261,104 210,000 49,688 45,000 10,538 2013 3,150,000 1,115,414 215,000 42,244 45,000 8,963 2014 3,165,000 991,953 210,000 34,710 45,000 7,388 2015-2019 13,060,000 3,217,805 770,000 58,918 165,000 12,900 2020-2024 6,900,000 1,184,991 0 0 0 0 2025-2029 2,700,000 243,199 0 0 0 0 $39,810,000 $11,057,045 $2,350,000 $335,277 $305,000 $62,702 Certificates of Obligation The City also issues certificates of obligation ("CO's") to finance the acquisition and construction of capital assets including certain capital improvement projects, municipal facilities, and machinery and equipment. In fiscal year 2009, the City issued new CO's in the amount of $6,205,000. Interest rates on the outstanding CO's range from 3.00% to 5.13%. Annual debt service requirements to maturity for certificates of obligation of the primary government and component units are as follows: Year Ending Governmental Activities September 30, Principal Interest 2010 $ 1,125,580 $ 302,564 2011 1,125,578 240,555 2012 900,000 195,934 2013 890,000 156,183 2014 555,000 124,520 2015-2019 1,560,000 342,385 2020-2024 625,000 167,491 2025-2029 447,600 39,691 $7,228,758 $1,569,323 Business-type Activities Principal Interest $ 836,780 $ 475,509 831,780 392,589 640,000 366,305 635,000 343,343 640,000 320,846 3,150,000 1,251,782 2,665,000 672,134 1,855,000 261,753 $11,253,560 $4,084,261 Component Units Principal Interest $ 662,640 $ 444,648 610,000 421,856 610,000 396,184 615,000 367,659 620,000 341,290 3,130,000 1, 318, 757 3,110,000 632,239 1,212,640 62,400 $ 10,570,280 $3,985,033 Component Unit Certificates of Deposit - In fiscal year 1998, the City created the Richland Plaza Tax Increment Financing District (TIF #1). The original issue for the amount allocated to TIF #1 was $850,000. A portion of the outstanding 1998 certificates were refunded in fiscal year 2006 with general obligation bonds. The TIF #1 portion of the refunded debt was $295,684 and its portion of 50 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 the refunding debt was $310,000. All TIF District funds are deposited in TexPool until needed for payments. During the 1999 fiscal year, the City, along with Tarrant County, Tarrant County College and Tarrant County Hospital District created the Town Center Tax Increment Reinvestment Zone (TIF #2). In 2003, $1,450,000 of Certificates of Obligation, Series 2003 were issued for costs associated with land acquisition and design of the new library to be located within the boundaries of TIF #2. In fiscal year 2006, the City issued $8,750,000 of Certificates of Obligation for construction of the library. All TIF District funds are deposited in TexPool until needed for payments. Sales tax revenue bonds Activity of the Park and Recreation Facilities Development Corporation is reflected in the financial statements of the City as a blended component unit. The corporation issues sales tax revenue bonds to finance new parks and recreation facilities as well as renovations and updates to existing parks and recreation facilities. Currently, the corporation has $3,600,000 in revenue bonds outstanding. Interest rates on outstanding sales tax revenue bonds range from 4.38% to 5.25%. Sales tax revenues are accumulated for the repayment of these revenue bonds. The debt and associated resources for repayment are included in the City's governmental activities. Revenue bond debt service requirements to maturity are as follows: Year Ending Governmental Activities September 30, Principal Interest 2010 $ 960,000 $ 165,202 2011 995,000 123,254 2012 1,030,000 78,479 2013 405,000 30,789 2014 105,000 11,026 2015-2018 105,000 5,513 $ 3,600,000 $ 414,261 Loans payable Governmental activities acquired a loan to pay for certain land acquisition for the new recreation center erection in 2012. Construction is to begin in mid 2010. The loan will be repaid with proceeds from the City's gas development and royalties sources. The original loan principal totaled $1,573,525 with an annual interest rate of 3.75%. Current principal outstanding is $1,549,766. The loan payable debt service requirements to maturity are as follows: Year Ending Governmental Activities September 30, Principal Interest 2010 $ 292,235 $ 53,849 2011 303,541 42,543 2012 315,198 30,886 2013 327,481 18,603 2014 311,311 5,933 $ 1,549,766 $ 151,814 51 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 Chanaes in Iona-term liabilities Long-term liability activity for the year ended September 30, 2009, is reflected in the following tables. Governmental activities: Bonds payable General obligation bonds Certificates of obligation Sales tax revenue bonds Loans payable Deferred loss on refunding Premium on bond issues Discount on Bond issues Arbritrage liability Compensated absences Total governmental activities Business-type activities: Bonds payable General obligation bonds Certificates of obligation Deferred loss on refunding Premium on bond issues Discount on Bond issues Compensated absences Total business-type activities Component unit activities: Bonds payable General obligation bonds Certificates of obligation Deferred loss on refunding Premium on bond issues Discount on Bond issues Total component unit activities Beginning Ending Due within Balance Additions Reductions Balance One Year $ 37,822,655 $ 5,695,000 $ 3,707,655 7,041, 738 1,235,000 1, 047,980 4,520,000 - 920,000 - 1,573,525 23,759 (594,902) - (67,014) 69,026 242 5,238 (16,808) - (1,345) 165,867 - - 2,928,281 1, 848,289 1,801,017 $51,935,857 $10,352,056 $7,437,290 $ 2,789,738 $ - $ 439,738 6,865,340 4,970,000 581,780 (48,617) - (5,693) 12,859 996 900 (2,576) - (305) 369,516 305,920 253,209 $ 9,986,260 $ 5,276,916 $1,269,629 $ 305,000 $ - $ - 11,217,920 - 647,640 (5,478) (1,354) (719) 6,227 792 1,302 (751) - (217) $11,522,918 $ (562) $ 648,006 $39,810,000 $3,600,000 7,228,758 1,125,580 3,600,000 960,000 1,549,766 292,235 (527,888) - 64,030 - (15,463) - 165,867 - 2,975,553 2,056,770 $54,850,623 $8,034,585 $ 2,350,000 $ 460,000 11,253,560 836,780 (42,924) - 12,955 - (2,271) - 422,226 302,154 $13,993,546 $1,598,934 $ 305,000 $ - 10,570,280 662,640 (6,113) - 5,717 - (534) - $10,874,350 662,640 52 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 Defeased Debt Outstanding At September 30, 2009, certain outstanding debt of the city is considered to be defeased. The following table details such outstanding defeased debt: Defeased Debt Type of Obligation Outstanding General Obligation Bonds $ 1,215,000 Certifications of Obligation 920,000 Total $ 2,135,000 V. OTHER INFORMATION A. Risk management The government is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. While the City has historically retained a portion of these risks, coverage exists for: general, employment practice, law enforcement, and errors and omissions liability; excess workers' compensation; property damage; commercial crime coverage; and employee life insurance. Premiums are paid into the self-insurance internal service fund by all other participating funds and are available to pay claims, claim reserves, and administrative costs of the program. As of September 30, 2009, the interfund premiums did not exceed expenses. Liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for health and dental as well as workers' compensation claims that have been incurred but not reported ("IBNR"). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of inflation, recent claim settlement trends (including frequency and amount of pay-outs), and other economic and social factors. An excess coverage medical insurance policy covers individual claims in excess of $175,000 and/or $4,880,027 in the aggregate fora 12-month period beginning on January 1, 2009. Changes in the balances of claims liabilities during the past two years are as follows: Unpaid claims, beginning of year Incurred claims (including IBNR) Paid Claims Unpaid claims, end of year 2009 2008 $ 1,883,712 $ 1,372,185 6,473,064 6,684,299 (7,516,538) (6,172,772) $ 840,238 $ 1,883,712 B. Contingent liabilities The City has participated in a number of State and Federal assistance grant programs. Amounts received or receivable under these programs are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. The City is a defendant in certain lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the City's counsel the resolution of these matters will not have a material adverse effect on the financial condition of the City. 53 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 C. Conduit debt obligations The City has issued Health Facilities Development Bonds to provide financial assistance to private- sector entities to promote and develop new, expanded or improved health facilities to assist the maintenance of public health and welfare. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Ownership of the acquired facilities is with the private-sector entity served by the bond issuance. The City is not obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of September 30, 2009, there was one issue of Health Facilities Development Bonds outstanding. The aggregate principal amount payable for the issue dated 1994 could not be determined; however, the original issue amount totaled $5,700,000. Additionally, from time to time, the City has issued Industrial Development Bonds to provide financial assistance to private-sector entities for the acquisition and construction of industrial and commercial facilities to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Ownership of the acquired facilities is with the private-sector entity served by the bond issuance. The City is not obligated in any manner for repayment of the bonds. Accordingly the bonds are not reported as liabilities in the accompanying financial statements. As of September 30, 2009, there were two issues of Industrial Development Bonds outstanding. The aggregate principal amount payable for the issues dated 1983 and 1985 could not be determined; however, the original issue amounts totaled $7,125,000. D. Postemployment Benefits Deferred Compensation Plan The City offers its employees a deferred compensation plan (the "Plan") created in accordance with Internal Revenue Code Section 457. The Plan is administered by Public Employees Benefit Services Corporation. In 1998, the City implemented the requirements of GASB No. 32, Accounting and Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. In accordance with this statement and tax law, the City has amended its trust agreements which establish that all assets and income of the trust are for the exclusive benefit of eligible employees and their beneficiaries. Due to the implementation of these changes, the City does not have any fiduciary responsibility or administrative duties relating to the deferred compensation plan other than remitting employees' contributions to the trustees. Accordingly, the City has not presented the assets and liabilities of the Plan in these basic financial statements. Retiree Healthcare Plan Implementation of GASB 45. During the year ended September 30, 2009, the City implemented GASB Statement No. 45 and recorded an obligation for other post-employment benefits. Plan Description. The City provides postretirement health and dental care benefits for retirees and their dependents. The benefits vary depending upon a retiree's years of service. Retirees fall into three categories: full retirement, early retirement, and combined service retirement. The full retirement retiree pays 100% of the current premiums for health and dental care coverage for themselves and covered dependents. Early retirement and combined service retirement employees pay premiums for health and dental care coverage for themselves and covered dependents at 150% and 175%, respectively, of the current premium. The City's regular health and dental care benefit providers underwrite the retirees' policies. Retirees may not convert the benefit into an in-lieu payment to secure coverage under independent plans. As of year end, there were 61 full retirement, 54 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 35 early retirement, and 3 combined service retirement retirees receiving postretirement health and dental care benefits. The City Of North Richland Hills Retired Employees Healthcare Plan (NRHREHP) is a single- employer defined benefit healthcare plan and is self administered through an internal oversight committee (appointed by the City Manager through conveyed authority from City Council). NRHREHP provides medical, prescription, and dental insurance benefits to eligible retirees and their spouses. City council is the authoritative body granting health care benefits for both active and retired employees. Funding Policy. The contribution requirements of plan members and the state are established and may be amended by the City Council members. The required contribution is based on projected pay- as-you-go financing requirements, with an additional amount to prefund Benefits as determined annually by the City's council members. For fiscal year 2009, the City contributed $910,000 to the plan for current premiums. Annual OPEB Cost and Net OPEB Obligation. The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer annually required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation to NRHREHP: Annual required contribution Interest on net OPEB obligation Adjustment to annual required contribution Annual OPEB cost (expense) Contributions made Increase (Decrease) in net OPEB obligation Net OPEB obligation-beginning of year Net OPEB obligation-end of year $ 2,326,000 2,326,000 (910, 000) 1, 416, 000 $ 1,416,000 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2009: Percentage Fiscal Annual of Annual Year OPEB OPEB Cost Net OPEB Ended Cost Contributed Obligation 9/30/2009 $ 2,326,000 39.1 % $ 1,416,000 Funded Status and Funding Progress. As of September 30, 2009, the most recent actuarial valuation date, the plan was 0% percent funded. The actuarial accrued liability for benefits was $37,107,000, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $37,107,000. The covered payroll (annual payroll of active employees covered by the plan) was $29,762,411 and the ratio of the UAAL to the covered payroll was 82.5%. 55 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short- term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the September 30, 2009, actuarial valuation, the entry age actuarial cost method was used. The actuarial assumptions included a 4.5 percent investment rate of return (net of administrative expenses), which is a the interest rate of the expected long-term investment returns on plan assets and on the employer's own investments calculated based on the funded level of the plan at the valuation date, and an annual healthcare cost trend rate of 9.5% percent initially, reduced by decrements to an ultimate rate of 5 percent after ten years. The UAAL is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at September 30, 2009, was thirty years. E. Employee retirement systems and pension plans Plan Descriotion The City provides pension benefits for all of its full-time employees through a nontraditional, joint contributory, hybrid defined benefit plan in the state-wide Texas Municipal Retirement System ("TMRS"), one of 833 administered by TMRS, an agent multiple-employer public employee retirement system. TMRS issues apublicly-available annual financial report that may be obtained by writing to TMRS, P.O. Box 149153, Austin, Texas 78714-9153. Benefits depend upon the sum of the employees' 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% and 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. An updated service credit 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. Members can retire at ages 60 and above with 5 or more years of service or with 20 years of service regardless of age. The plan also provides death and disability benefits. A member is vested after 5 56 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 years. The plan provisions are adopted by the City Council, within the options available in the state statutes governing TMRS and within the actuarial constraints also in the statutes. Contribution The contribution rate for employees is 7%, and the City's matching percent is currently 2 to 1, both as adopted by the City Council. Under the state law governing TMRS, the actuary annually determines the City contribution rate. The rate consists of the normal cost contribution rate and the prior service contribution rate, both of which are calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the currently accruing monetary credits due to the City matching percent, which are the obligation of the City as of an employee's retirement date, not at the time the employee's contributions are made. The normal cost contribution rate is the actuarially determined percent of payroll necessary to satisfy the obligation of the City to each employee at the time his retirement becomes effective. The prior service contribution rate amortizes the unfunded actuarial liability over the remainder of the plan's 30-year amortization period. Contributions are made monthly by both the employees and the City. The actuarial valuation is performed annually to determine the City's required contribution percentage. Since the City needs to know its contribution rate in advance for budgetary purposes, there is a one year delay between the actuarial valuation that is the basis for the rate and the calendar year when the rate goes into effect (i.e. December 31, 2006 is effective for rates beginning January 2008). Effective for the valuation dated December 31, 2007, the TMRS Board of Trustees elected to change the actuarial cost (funding) method and assumptions. Significant assumptions used in preparation of that valuation as well as the previous valuation are as follows: Valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method December 31, 2006 Unit Credit Level Percent of Payroll 30 years -open period Amortized Cost December 31, 2007 Projected Unit Credit Level Percent of Payroll 30 years -closed period Amortized Cost Actuarial assumptions: Investment rate of return Project salary increases 7%" None "includes inflation at 0% and cost of living adjustments at 3.0%. 7%* None The TMRS Board of Trustees, in an effort to assist cities with increases greater than .5% in the required contribution rates occurring as a result of the changes in funding method and assumptions, voted to (2) extend the period for amortizing the unfunded actuarial accrued liability ("UAAL") to a 30 year closed period, and (2) allow the contribution rate increase to be phased in over an 8-year period (2009-2016) in determining the required contribution rate. Both options are automatic, but not mandatory. At a city's request, TMRS will recalculate the contribution rate for a city that chooses a 25-year, closed amortization period. Cities may also choose to pay contributions in excess of the phase-in rate. The City chose the phase-in rate of 14.26%. For cities with repeating features in their plans, these changes in the valuation methodology would likely result initially in higher required contributions and lower funded ratios. However, the funded ratio should show steady improvement over time. NRH has adopted the updated service credit and annuity increase provisions on an annually repeating basis. The schedule of funding progress, presented as Required Supplementary Information immediately following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. 57 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 The changes in actuarial funding method and assumptions adopted for the 2008 valuation resulted in an unfunded actuarial accrued liability ("UAAL") of $36,647,284, which represents an increase over an actuarial value of assets of $83,565,864, in actuarial/accrued liability of $120,213,148 and the prior valuation of over $3 million. The funded ratio of the city's plan dropped from 70.44% to 69.50% as a result of the increased UAAL. The City's contributions to the plan were $4,078,509, $4,057,393, and $3,587,475, for the years ended September 30, 2009, 2008, and 2007, respectively, in accordance with actuarially determined requirements. Contributions by the City were 14.26% (phase in rate) for the months in calendar year 2009 and 13.63% for the months in calendar year 2008. The total covered payroll in the current fiscal year was $28,908,253. The following tables shows the components of the City's annual net pension obligation costs for the year, the amount actually contributed to the plan, and changes in the City's net pension obligation: Annual required contribution Adjustment to net pension obligation Annual pension expense Contributions made Increase (decrease) to net pension obligation Net. pension obligation -beginning of year Net pension obligation obligation-end of year $ 5,327,791 5,327,791 4,078,510 1,249,281 $ 1,249,281 Annual pension cost and percentage of pension cost contributed are as follows: Net Pension Annual Percentage Obligation at Year Ended Pension Cost Contributed Year End September 30, 2009 $5,327,791 76% $1,249,281 September 30, 2008 $4,057,394 100% - September 30, 2007 $3,587,475 100% - Supplemental Death Benefits Fund The City also participates in the cost sharing multiple-employer defined benefit group-term life insurance plan operated by the Texas Municipal Retirement System (TMRS) known as the Supplemental Death Benefits Fund (SDBF). The City elected, by ordinance, to provide group-term life insurance coverage to both current and retired employees. The City may terminate coverage under and discontinue participation in the SDBF by adopting an ordinance before November 1 of any year to be effective the following January 1. The death benefit for active employees provides alump-sum payment approximately equal to the employee's annual salary (calculated based on the employee's actual earnings for the 12-month period preceding the month of death); retired employees are insured for $7,500; this coverage is an "other postemployment benefit," or OPEB. Plan Year Plan Year Supplemental death offered to: 2008 2009 Active employees Retirees Yes Yes Yes Yes 58 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 The City contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation. The rate is equal to the cost of providing one-year term life insurance. The funding policy for the SDBF program is to assure that adequate resources are available to meet all death benefit payments for the upcoming year; the intent is not to pre-fund retiree term life insurance during employees' entire careers. The City's contributions to the TMRS SDBF for the years ended 2009, 2008, and 2007 were $51,817, $52,462, and $49,450, respectively, which equaled the required contributions each year. Subsequent to this fiscal year, the City has canceled its participation in the supplementary death benefit option in 2010. Operating leases In July, 2009 the City entered into an operating lease contract for golf carts and utility vehicle equipment for the Golf Course Fund operations. The operating lease is fora 36 month term. Year Ending September 30, 2009 $ 7,908 2010 94,891 2011 94,891 2012 86,984 Total minimum payments required $ 284,674 G. Implementation of future GASB Statements In June 2008, GASB issued Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. This statement addresses the recognition measurement and disclosure of information regarding derivative instruments entered into by state and local governments. This statement is effective for the City's financial periods beginning after June 15, 2009. In March 2009, the GASB issued Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. This Statement is intended to improve the usefulness of information provided to financial report users about fund balance by providing clearer more structured fund balance classifications and by clarifying the definitions of existing governmental fund types. Fund balance amounts will be reported in the following classifications: designated, committed, assigned, and unassigned. This statement is effective for the City's financial periods beginning after June 15, 2010. In December 2009, the GASB issued Statement No. 57, OBEB Measurements by Agent Employers and Agent-Multiple Employer Plans. This Statement amends Statement No. 45, Accounting and Financial Reporting by Employers of Postemployment Benefits Other than Pensions to permit an agent employer that has an individual-employer OBEB plan with fewer than 100 total plan members to use the alternative measurement method at its option, regardless of the number of total plan members in the agent multiple-employer OPEB plan in which it participates. This Statement also amends a Statement No. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans requirement that a defined benefit OPEB plan obtain an actuarial valuation. The amendment permits the requirement to be satisfied for an agent multiple-employer OPEB plan by reporting an aggregation of results of actuarial valuations of the individual-employer OPEB plans or measurements resulting from use of the alternative measurement method for individual-employer OPEB plans that are eligible. In addition, this Statement clarifies that when actuarially determined OPEB measures are reported by an agent multiple-employer OPEB plan and its participating employers. The provisions related to the use and reporting of the alternative method are effective immediately. The provisions related to the frequency and timing of measurements are effective for 59 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2009 actuarial valuations first used to report funded status information in OPEB plans financial statements for City's financial periods beginning after June 15, 2011. In December 2009, the GASB issued Statement No. 58, Accounting and Financial Reporting for Chapter 9 Bankruptcies. The objective of this Statement is to provide accounting and financial reporting guidance for governments that have petitioned for protection from creditors by filing for bankruptcy under Chapter 9 of the United States Bankruptcy Code. It requires governments to remeasure liabilities that are adjusted in bankruptcy when the bankruptcy court confirms a new payment plan. This statement is effective for the City's financial periods beginning after June 15, 2009. The City has not yet determined the effect on the City's financial statement or disclosures upon implementation of these new accounting standards. ***«„* so DRAFT REQUIRED SUPPLEMENTARY INFORMATION 61 DRAFT This page intentionally left blank. s2 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Required Supplementary Information Texas Municipal Retirement System Plan Schedule of Funding Progress Unfunded Valuation Actuarial Actuarial Actuarial Accrued Annual UAAL Dated Value of Accrued Liability Fund Covered as % of December 31, Assets Liability (UAAL) Ratio Payroll Payroll 2003 $ 64,726,698 $ 79,113,589 $ 14,386,891 81.81% $ 24,485,409 58.76% 2004 69,410,855 81,993,021 12,582,166 84.65% 23,787,759 52.89% 2005 72,129,416 86,165,248 14,035,832 83.71% 24,586,641 57.09% 2006 75,748,895 90,985,317 15,236,422 83.25% 25,328,096 60.16% 2007 79,089,871 112,285,789 33,195,918 70.44% 24,915,619 133.23% 2008 83,565,864 120,213,148 36,647,284 69.51% 26,422,388 138.70% Note: The Schedule of Funding Progress summarizes the actuarial value of the plan's assets and actuarial accrued liability as of December 31, 2008 and each of the five preceding calendar years. The data presented in the schedule was obtained annually from TMRS and are based on the annual actuarial valuation for the years represented. The City is financially responsible for its own portion of the plan. Therefore, the numbers shown above reflect only the position of the City's plan. The schedule is presented to provide a consistent basis for measuring the plan's annual progress toward funding its actuarial accrued liability in accordance with its actuarial funding method. The primary measure of funding progress is the plan's funded ratio (i.e., actuarial value of assets expressed as a percentage of the actuarial accrued liability). An increase in the funded ratio indicates improvement in the plan's ability to pay all projected benefits as they come due. The plan is fully funded if the funded ratio is greater than or equal to 100%. During the year ended December 31, 2008, the plan's funded ratio dropped from 70.44% to 69.51%. The Schedule of Funding Progress also discloses the relationship between the plan's covered payroll (i.e., all elements included in compensation paid to active members on which contributions are based) and the unfunded actuarial accrued liability ("UAAL"). This relationship, expressed as a ratio, is a measure of the significance of the UAAL relative to the capacity to pay all contributions required to fund the liability. During the year ended December 31, 2008, the plan's ratio of the UAAL to its covered payroll increased from 133.23% to 138.70%. For the actuarial valuation dated December 31, 2007, the TMRS Board of Trustees adopted changes in the actuarial funding method and assumptions; as such, those changes are reflected in the above numbers. For a complete description of these changes, see Note E Employee Retirement Systems and pension plans in the accompanying notes to the financial statements. For Calendar Year 2009 2008 2007 2006 2005 City's annual contribution stated as a percentage of covered payroll 15.50% 13.50% 13.63% 13.20% 13.42% Note Source: TMRS Comprehensive Annual Report for the Year Ending December 31, 2008, Actuarial Section and City records. 63 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Required Supplementary Information North Richland Hills Other Post Employment Benefits Schedule of Funding Progress Unfunded Valuation Actuarial Actuarial Accrued Annual UAAL Dated Value of Actuarial Liablity Fund Covered as % of December 31, Assets Accrued Liability (UAAL) Ratio Payroll Payroll 2009 $ - $ 37,107,000 $ 37,107,000 0.00% $ 29,762,000 82.50% CITY OF NORTH RICHLAND HILLS, TEXAS Required Supplementarylnformation North Richland Hills Other Post Employment Benefits Schedule of Employer Contributions Year Ended Annual OPEB Percentage Net OPEB September 30, Cost Contributed Obligation 2009 $ 2,326,000 39.1 % $ 1,416,000 64 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget (Non-GAAP Basis) and Actual GENERAL FUND For the Year Ended September 30, 2009 Budgeted Amounts REVENUES Taxes Property taxes (penalties and interest included) City sales taxes Mixed beverage taxes Franchise taxes Total taxes Original Variance with Final Budget Positive (Negative) $ 14,273,565 $ 14,215,264 $ 14,283,584 $ 68,320 9,008,200 8,377,626 8,154,321 (223,305) 130,000 130,000 117,757 (12,243) 4,397,007 4,658,327 4,714,845 56,518 27,808,772 27,381,217 27,270,507 (110,710) Final Actual Fines and forteitures 2,089,410 2,418,000 2,677,901 259,901 Liscenses and permits 1,636,650 1,149,564 1,140,070 (9,494) Charges for services 3,330,098 3,239,562 3,020,726 (218,837) Intergovernmental 2,946,481 2,675,365 2,625,366 (49,999) Miscellaneous 929,394 791,940 964,616 172,676 Sub-total revenues 10,932,033 10,274,431 10,428,679 154,248 Appropriations from fund balance Legal settlement - 112,308 112,308 - Insurance reserves 115,800 47,589 47,589 - Golf course loans 168,064 168,064 168,064 - Retirement conversion - 100,000 100,000 - CCD Designated reserves - 200,000 200,000 - Previous years encumbrances - 590,474 590,474 - Sub-total appropriations 283,864 1,218,435 1,218,435 - Total revenues 39,024,669 38,874,083 38,917,621 43,538 EXPENIDTURES City council 136,504 122,221 102,659 19,562 City manager 554,578 552,490 542,214 10,276 Communications 533,220 546,458 472,116 74,342 City secretary 506,687 500,465 433,150 67,315 Legal 350,000 350,000 388,953 (38,953) Human resources 123,521 122,088 111,184 10,904 Finance 893,084 885,303 850,828 34,475 Budget and research 386,779 383,924 350,132 33,792 Muncipal court 1,256,827 1,230,165 1,217,322 12,843 Planning and inspections 1,046,918 1,029,458 1,002,556 26,902 Economic development 166,836 166,076 165,813 263 Library 1,933,659 1,923,868 1,819,969 103,899 Neighborhood services 1,628,257 1,758,254 1,414,358 343,896 Public works 3,591,051 3,525,304 3,277,450 247,854 Parks and recreation 2,771,201 2,744,689 2,482,674 262,015 Police 10,440,514 10,219,172 10,218,532 640 Emergency management 397,612 396,151 358,330 37,821 Fire 9,364,937 9,374,546 9,116,811 257,735 Building services 641,893 407,346 641,893 (234,547) Non-departmental 1,487,102 1,771,905 1,280,499 491,406 Sub-total departments 38,211,180 38,009,883 36,247,443 1,762,440 Reserves and other expenditures Reserves 415,800 547,589 547,589 - Golf course loans 168,064 168,064 168,064 - Market adjustments 188,634 - - - Legal settlements - 112,308 112,308 - Sub-total reserves and other 772,498 827,961 827,961 - Total expenditures 38,983,678 38,837,844 37,075,404 1,762,440 Net increase to budgetary fund balance $ 40,991 $ 36,239 $ 1,842,217 $ 1,805,978 The notes to the required supplemental informaiton schedule is an integral part of this schedule 65 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION General Fund BUDGETARY COMPARISIONS A. General Fund Budget-to-Actual Reconciliation An explanation of the differences between budgetary inflows and outflows and revenues and expenditures determined in accordance with generally accepted accounting principles follows: Net increase (decrease) to budgetary unreserved undesignated fund balance $ 1,842,217 The City budgets "appropriations from fund balance" as a resource/inflow but in GAAP statements it is not a revenue or inflow source for current year revenue recognition (1,218,435) Increase (decrease) in investment fair value changes are not considered aresource/inflow for budgetary recognition 164,239 Uses/Outflows for advances given to other funds are not recognized as expenditures in GAAP statements; Only recognized as asset on balance sheet and not a transfer out 328,064 Interest revenue for internal agencies functions (i.e. payroll liabilitities) are not recognized as a budgetary resource/inflow 3,433 Grant transactions budgeted originally as a use/outflow and reimbursement for such g rant expenditures in a future year is not recognized as available for budgeting use 166,515 Total "Net Change in Fund Balance" from the Statement of Revenues, Expenditures, and Changes in Balances -Governmental Fund -- General Fund $ 1,286,033 ss DRAFT NON-MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Promotional Fund - to account for the operations and expenditures for which hotel/motel occupancy taxes are used. Occupancy tax revenues are used primarily to attract tourists and new businesses to the City. Donations Fund - to account for the operations for which voluntary contributions by citizens are used. Contributions are used primarily to support library activities, animal control, and special events/public art. Special Investigation Fund - to account for the accumulation and use of resources from the forfeiture of contraband and certain other specialized police activities. Traffic Safety Fund - to account for sources that will assist in various traffic safety areas. Drainage Utility Fund - to account for the establishment of drainage facilities within the municipal boundaries of the City and the subsequent billing and collection of fees so established. Grant Fund - to account for certain grant programs of the City. Economic Development Fund - to account for the accumulation and expenditure of resources designed to stimulate the local economy, development, and redevelopment. Parks and Recreation Facilities Development Fund - to account for the accumulation and use of resources to build and improve City parks and recreation facilities as well as economic development projects. Crime Control and Prevention District Fund - to account for the accumulation and use of half-cent sales tax proceeds dedicated for crime prevention and reduction programs. Gas Development Fund - to account for the accumulation and expenditures of resources from gas drilling and exploration on City owned property. DEBT SERVICE FUND Sales Tax Revenue Debt Service Fund - to accumulate monies for the payment of interest and principal on sales tax revenue bonds. Financing is provided by sales tax revenue. 67 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Combining Balance Sheet NONMAJOR GOVERNMENTAL FUNDS Year Ended September 30, 2009 Special Parks and Recreation Special Development Promotional Donations Investigations Drainage Utility Fund ASSETS Deposits and investments $ 274,663 $ 705,332 $ 460,517 $ 1,143,212 $ 1,048,210 Receivables (net of allowance): Accounts - - - 93,655 - Othertaxes receivable 98,311 - - - 680,617 Interest receivable 477 1,234 799 1,977 1,823 Intergovernmental receivable - - - - 110,508 Other receivables - - - - 24,119 Inventories, at costs - - - - 14,346 Restricted: Deposits and investments: Construction funds - - - - 1,968,940 Transition funds - - - - - Total assets $ 373,451 $ 706,566 $ 461,316 $ 1,238,844 $ 3,848,563 Liabilities and Fund Balance Liabilities Accounts payable $ 1,561 $ 1,233 $ 4,698 $ - $ 99,516 Retainage payable - - - - 9,119 Accrued liabilities - - - - 22,855 Intergovernmental payable - - - - - Due from other funds - - - - - Deposits and other liabilities - 13 - - 2,420 Deferred revenue 68,928 - - - 170,059 Total liabilities 70,489 1,246 4,698 - 303,969 Fund Balance Reserved for encumbrances 8,195 13,320 99,179 - 255,991 Reserved for inventories - - - - 14,346 Reserved for debt service - - - - - Reserved for capital improvements - - - - 3,274,257 Unreserved, Undesignated: Transition - - - - - Unreserved, undesignated for: Special revenue 294,767 692,000 357,439 1,238,844 - Total fund balance 302,962 705,320 456,618 1,238,844 3,544,593 Total liabilities and fund balance $ 373,451 $ 706,566 $ 461,316 $ 1,238,844 $ 3,848,563 68 DRAFT Revenue Debt Service Sales Tax Revenue Crime Control Economic Gas Bonds Debt Total Nonmajor District Grant Development Development Traffic Safety Service Governmental $ - $ 36,166 $ 664,468 $ 2,637,374 $ 366,046 $ 1,017,735 $ 8,353,723 _ _ _ _ _ - 93,655 616,837 - - - - - 1,395,765 - 673 2,454 4,571 813 1,823 16,644 - 105,140 - - - - 215,648 - 392 - 6,892 - - 31,403 14, 346 - - 960,810 - - - 2,929,750 290,489 - - - - - 290,489 $ 907,326 $ 142,371 $ 1,627,732 $ 2,648,837 $ 366,859 $ 1,019,558 $ 13,341,423 $ 2,718 $ 110,683 $ 62,239 - - (331) - 150,000 - 4,146 _ 64,957 264,498 - 5,200 842,369 - - $ - $ 46,082 $ - $ 266,491 - - - - 9,119 - - 1,580 - 86,674 - - 190,313 - 189,982 - - - - 150,000 - - - - 2,433 - - - - 243,133 - - 237,975 - 947,832 614 - 9,470 - 391,969 - - - 14, 346 - - - 1,019,558 1,019,558 - - - - 3,274,257 - - - - 842,369 - 11L/,JL/~ I,VLl,I 10 L,VYV,VJ/ IIJ,Y IY - 842,369 (122,127) 1,627,732 2,648,837 128,884 1,019,558 12,393,591 $ 907,326 $ 142,371 $ 1,627,732 $ 2,648,837 $ 366,859 $ 1,019,558 $ 13,341,423 69 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Combining Statement of Revenues, Expenditures, and Changes in Fund Balances NONMAJOR GOVERNMENTAL FUNDS Year Ended September 30, 2009 REVENUES Taxes Civil citations Contributions Investment income Intergovernmental Drainage fees Tennis center Forfeitures Mineral rights lease income Miscellaneous Total revenues EXPENDITURES General government Public safety Culture and recreation Capital Outlay General government Public safety Culture and recreation Public works Debt Service Principal Interest and fiscal agent charges Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Proceeds from sale of assets Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance -beginning of year Fund balance -end of year Special Parks and Special Drainage Recreation Promotional Donations Investigations Utility Development $ 152,220 $ - $ - $ - $ 4,077,162 - 156,694 - - 3,500 7, 587 18, 559 12, 371 33, 701 41,237 - - 361,914 - - - - - 834,075 - - - - - 325, 907 - - 146, 830 - - 448 2 1, 044 - 153,130 160,255 175,255 522,159 867,776 4,600,936 202,859 27,989 - 2,159 - - 2,464 476,624 - - - 108,792 - - 4,090,209 - - 17,432 - - - - - - 790,406 202,859 139,245 494,056 2,159 4,880,615 (42,604) 36,010 28,103 865,617 (279,679) - - 1,079 - - - - - - 585,000 - - - (354,198) (1,514,122) - 1,079 (354,198) (929,122) (42,604) 36,010 29,182 511,419 (1,208,801) 345,566 669,310 427,436 727,425 4,753,395 $ 302,962 $ 705,320 $ 456,618 $ 1,238,844 $ 3,544,594 70 DRAFT Revenue Debt Service Sales Tax Crime Revenue Control Economic Gas Bonds Debt Total Nonmajor District Grants Development Development Traffic Safety Service Governmental $ 3,978,076 $ - $ - $ - $ - $ - $ 8,207,458 _ _ - - 999,584 - 999,584 _ _ _ _ _ - 160,194 19,910 13,733 42,331 105,518 12,899 33,513 341,359 - 643,676 - - - - 1,005,590 _ _ _ _ - - 834,075 _ _ _ _ - - 325,907 _ _ _ _ _ - 146, 830 - - - 75,282 - - 75,282 _ _ _ _ _ - 154,624 3,997,986 657,409 42,331 180,800 1,012,483 33,513 12,250,903 - 193,441 - - - - 426,448 4,193,065 175,479 - - 855,373 - 5,703,005 - 33,479 - - - - 4,232,480 - 4,438 - - - - 4,438 - 411,414 - - 10,660 - 439,506 _ _ _ _ _ - 790,406 - - 140,959 - - - 140,959 _ _ _ _ - 920,000 920,000 _ _ _ _ - 53,609 53,609 4,193,065 818,251 140,959 - 866,033 973,609 12,710,851 (195,079) (160,842) (98,628) 180,800 146,450 (940,096) (459,948) _ _ _ _ _ - 1, 079 200,000 - 209,441 - - 1,124,300 2,118,741 (60,000) - - (3,785,270) (100,000) - (5,813,590) 140,000 - 209,441 (3,785,270) (100,000) 1,124,300 (3,693,770) (55,079) (160,842) 110,813 (3,604,470) 46,450 184,204 (4,153,718) 897,448 38,715 1,516,919 6,253,307 82,434 835,354 16,547,309 $ 842,369 $ (122,127) $ 1,627,732 $ 2,648,837 $ 128,884 $1,019,558 $ 12,393,591 71 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Promotional Fund Year Ended September 30, 2009 REVENUES Taxes Investment income Miscellaneous Total revenues EXPENDITURES General government Total expenditures Excess (deficiency) of revenues over expenditures Net change in fund balance Fund balance -beginning of year Fund balance -end of year The budget is reflected on a GAAP basis. Variance with Final Budget - Budget Positive Original Final Actual (Negative) $ 205,000 $ 205,000 $ 152,220 $ (52,780) 7,686 7,686 7,587 (99) - - 448 448 212,686 212,686 160,255 (52,431) 228,567 228,567 228,567 228,567 202,859 25,708 202,859 25,708 (15,881) (15,881) $ (15,881) $ (15,881) (42,604) (26,723) (42,604) $ (26,723) 345,566 $ 302,962 72 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Donation Fund Year Ended September 30, 2009 Budget REVENUES Contributions Investment income Miscellaneous Total revenues Original Final $ 217,400 20,406 $ 217,400 20,406 237,806 237,806 EXPENDITURES General government Public safety Cultures and recreation Total expenditures Excess (deficiency) of revenues over expenditures Net change in fund balance Fund balance -beginning of year Fund balance -end of year The budget is reflected on a GAAP basis. 66,874 163,400 230,274 66,874 163,400 230,274 7,532 7,532 $ 7,532 $ 7,532 Actual Variance with Final Budget - Positive (Negative) $ 156,694 $ (60,706) 18,559 (1,847) 2 2 175,255 (62,551) 27,989 38,885 2,464 (2,464) 108,792 54,608 139,245 91,029 36,010 28,478 36,010 $ 28,478 669,310 $ 705,320 73 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Special Investigations Fund Year Ended September 30, 2009 REVENUES Investment income Intergovernmental Forfeitures Miscellaneous Total revenues EXPENDITURES Public safety Capital Outlay Public safety Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Proceeds from sale of assets Total other financing sources (uses) Net change in fund balance Fund balance -beginning of year Fund balance -end of year The budget is reflected on a GAAP basis. Variance with Final Budget - Budget Positive Original Final Actual (Negative) $ 14,486 $ 14,486 $ 12,371 $ (2,115) 353,000 353,000 361,914 8,914 51,000 51,000 146,830 95,830 208,535 208,535 1,044 (207,491) 627,021 627,021 522,159 (104,862) 563,221 563,221 476,624 63,800 63,800 17,432 627,021 627,021 494, 056 - - 28,103 $ - $ - 1,079 1,079 86,597 46,368 132,965 28,103 1,079 1,079 29,182 $ 29,182 74 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Drainage Utility Fund Year Ended September 30, 2009 Variance with Final Budget - Budget Positive Original Final Actual (Negative) REVENUES Investment income $ 17,736 $ 17,736 $ 33,701 $ 15,965 Drainage fees 820,000 820,000 834,075 14,075 Total revenues $ 837,736 $ 837,736 $ 867,776 $ 30,040 EXPENDITURES General government - - 2,159 (2,159) Total expenditures - - 2,159 (2,159) Excess (deficiency) of revenues over expenditures 837,736 837,736 865,617 27,881 OTHER FINANCING SOURCES (USES) Transfers out 354,198 354,198 354,198 - Total other financing sources (uses) 354,198 354,198 354,198 - Net change in fund balance $ 483,538 $ 483,538 511,419 $ 27,881 Fund balance -beginning of year 727,425 Fund balance -end of year $ 1,238,844 The budget is reflected on a GAAP basis. 75 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget Basis Budget and Actual General Debt Service Fund Year Ended September 30, 2009 REVENUES Taxes Investment income Intergovernmental Total revenues EXPENDITURES Debt Service Principal Interest and fiscal agent charges Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance -beginning of year Fund balance -end of year The budget is reflected on a GAAP basis. Variance with Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) $ 6,322,088 $ 6,322,088 $ 6,322,088 $ - - - 89,265 89,265 $ 5,028,235 $ 5,028,235 $ 4,779,394 $ 248,841 2,082,611 2,082,611 1,936,845 145,766 $ 7,110,846 $ 7,110,846 $ 6,716,239 $ 394,607 (788,758) (788,758) 30,239 818,997 534,579 534,579 583,803 (49,224) - - (89,265) 89,265 534,579 534,579 494,538 40,041 $ (254,179) $ (254,179) $ 524,777 $ 859,038 ~s DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Parks and Recreation Development Fund Year Ended September 30, 2009 REVENUES Taxes Contributions Investment income Tennis center Miscellaneous Total revenues EXPENDITURES Culture and recreation Capital Outlay (non LT Cap Proj Exp) Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance -beginning of year Fund balance -end of year Operating Budget Variance with Less: Actual Final Budget - Capital Project Operating Positive Original Final Actual Expenditures"" Actual (Negative) $4,606,600 $ 4,606,600 $ 4,077,162 $ - $4,077,162 $ (529,438) 3,000 3,000 3,500 - 3,500 500 155,000 155,000 41,237 - 41,237 (113,763) 313,200 313,200 325,907 - 325,907 12,707 176,750 176,750 153,130 - 153,130 (23,620) 5,254,550 5,254,550 4,600,936 - 4,600,936 (653,614) 3,775,188 3,775,188 4,090,209 500,000 3,590,209 184,979 4,000 4,000 790,406 790,406 - 4,000 3,779,188 3,779,188 4,880,615 1,290,406 3,590,209 188,979 1,475,362 1,475,362 (279,679) (1,290,406) 1,010,727 (464,635) 60,000 60,000 585,000 585,000 - (60,000) (2,134,711) (2,134,711) (1,514,122) - (1,514,122) 620,589 (2,074,711) (2,074,711) (929,122) 585,000 (1,514,122) 560,589 $ (599,349) $ (599,349) $(1,208,801) $ (705,406) $ (503,395) $ 95,954 Net Change (1,208,801) 4,753, 395 $ 3,544, 594 The budget is reflected on a GAAP basis. " Capital Projects expeditures are budgeted on a multi-year schedule and are not included in the operating budget. 77 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Crime Control District F und Year Ended September 30, 2009 Variance with Final Budget - Budget Positive Original Final Actual (Negative) REVENUES Taxes $ 4,225,095 $ 4,225,095 $ 3,978,076 $ (247,019) Investment income 19,134 19,134 19,910 776 Total revenues 4,244,229 4,244,229 3,997,986 (246,243) EXPENDITURES Public safety 4,847,318 4,847,318 4,193,065 654,253 Total expenditures 4,847,318 4,847,318 4,193,065 654,253 Excess (deficiency) of revenues over expenditures (603,089) (603,089) (195,079) 408,010 OTHER FINANCING SOURCES (USES) Transfers in - - 200,000 200,000 Transfers out (60,000) (60,000) (60,000) - Total other financing sources (uses) (60,000) (60,000) 140,000 200,000 Net change in fund balance $ (663,089) $ (663,089) (55,079) $ 608,010 Fund balance -beginning of year 897,448 Fund balance -end of year $ 842,369 The budget is reflected on a GAAP basis. 78 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Gas Development Fund Year Ended September 30, 2009 Variance with Final Budget - Budget Positive Original Final Actual (Negative) REVENUES Investment income $ 153,707 $ 153,707 $ 105,518 $ (48,189) Mineral rights lease income 500,000 500,000 75,282 (424,718) Total revenues 653,707 653,707 180,800 (472,907) EXPENDITURES Total expenditures - - - - Excess (deficiency) of revenues over expenditures 653,707 653,707 180,800 (472,907) OTHER FINANCING SOURCES (USES) Transfers out - (3,785,270) (3,785,270) - Total other financing sources (uses) - (3,785,270) (3,785,270) - Net change in fund balance $ 653,707 $ (3,131,563) (3,604,470) $ (472,907) Fund balance -beginning of year 6,253,307 Fund balance -end of year $ 2,648,837 The budget is reflected on a GAAP basis. 79 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Traffic Safety Fund Year Ended September 30, 2009 REVENUES Civil citations Investment income Total revenues EXPENDITURES Public safety Capital Outlay Public safety Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Transfers out Total other financing sources (uses) Net change in fund balance Fund balance -beginning of year Fund balance -end of year The budget is reflected on a GAAP basis. Variance with Final Budget - Budget Positive Original Final Actual (Negative) $ 864,000 $ 959,287 $ 999,584 $ 40,297 - - 12,899 12,899 589,861 836,317 855,373 (19,056) 10,730 10,730 10,660 70 600,591 847,047 866,033 (18,986) 263,409 112,240 146,450 34,210 (100,000) (100,000) (100,000) - (100,000) (100,000) (100,000) - $ 163,409 $ 12,240 46,450 $ 34,210 82,434 80 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Sales Tax Revenue Bonds Debt Service Year Ended September 30, 2009 Variance with Final Budget - Budget Positive Original Final Actual (Negative) REVENUES Investment income $ - $ - $ 33,513 $ 33,513 Total revenues - - 33,513 33,513 EXPENDITURES Debt Service Principal 920,000 920,000 920,000 - Interest and fiscal agent charges 205,500 205,500 53,609 151,891 Total expenditures 1,125,500 1,125,500 973,609 151,891 Excess (deficiency) of revenues over expenditures (1,125,500) (1,125,500) (940,096) 185,404 OTHER FINANCING SOURCES (USES) Transfers in - - 1,124,300 1,124,300 Total other financing sources (uses) - - 1,124,300 1,124,300 Net change in fund balance $ (1,125,500) $ (1,125,500) 184,204 $ 1,309,704 Fund balance -beginning of year 835,354 Fund balance -end of year $ 1,019,558 The budget is reflected on a GAAP basis. s~ DRAFT N FAH This page intentionally left blank. a2 DRAFT INTERNAL SERVICE FUNDS Facility and Construction Services Fund - To account for building maintenance and repair services provided to numerous departments located at various sites throughout the city. Facility and Construction Services Fund operations are financed by charges to user departments. Fleet Services Fund - To account for the maintenance, repair service, and replacement of vehicles and equipment provided to numerous departments responsible for the operation of city vehicles and equipment. Fleet Services Fund operations are financed by charges to user departments. Self-Insurance Fund - To account for the payment of substantially all claims except for fire insurance coverage and employee life insurance coverage. Self-Insurance Fund operations are financed by charges to user departments and employee contributions. Information Services Fund - To account for the acquisition, maintenance, and support of computer and telephone hardware and software. Information Services Fund operations are financed by charges to user departments. 83 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Combining Statement of Net Assets INTERNAL SERVICE FUNDS September 30, 2009 Facilities and Information Total Internal Construction Fleet Services Self Insurance Services Services Assets CURRENT ASSETS Deposits and investments $ 738,500 $ 1,030,126 $ 3,186,881 $ 1,444,056 $ 6,399,563 Accounts receivable, net of allowance: Other - 3,005 4,212 4,241 11,458 Interest receivable 5,435 11,037 27,592 14,841 58,905 Inventories, at costs 15,843 84,100 - - 99,943 Total current assets 759,778 1,128,268 3,218,685 1,463,138 6,569,869 NONCURRENT ASSETS Restricted assets: Deposits and investments Construction funds - 116,176 - 472,639 588,815 Future construction 476,426 934,390 - 940,509 2,351,325 Future claims - - 2,253,149 - 2,253,149 Other funds 64,706 258,436 - - 323,142 Total deposits and investments 541,132 1,309,002 2,253,149 1,413,148 5,516,431 Capital assets, at cost: - Land - - - - - Building and improvements 272,293 - - - 272,293 Other improvements - - - - - Utility plant in service - - - - - Machinery and equipment 145,199 5,442,600 17,312 2,705,722 8,310,833 Construction in progress - - - - - Accumulated depreciation (187,480) (3,899,203) (17,312) (1,484,207) (5,588,202) Net capital assets 230,012 1,543,397 - 1,221,515 2,994,924 Total noncurrent assets 771,144 2,852,399 2,253,149 2,634,663 8,511,355 Total assets 1,530,922 3,980,667 5,471,834 4,097,801 15,081,224 Liabilities CURRENT LIABILITIES Accounts payable 61,480 41,117 35,063 75,696 213,356 Accrued liabilities 11,016 11,014 840,238 11,646 873,914 Other current liabiilties 252 2,621 32,389 - 35,262 Compensated absences 26,368 64,954 25,044 26,794 143,160 Deferred revenue - - - 11,535 11,535 Total current liabilities 99,116 119,706 932,734 125,671 1,277,227 NONCURRENT LIABILITIES Compensated absences 20,133 18,512 28,606 19,258 86,509 Other post employment benefits 25,771 30,303 31,010 - 87,084 Total noncurrent liabilities 45,904 48,815 59,616 19,258 173,593 Total liabilities 145,020 168,521 992,350 144,929 1,450,820 Net Assets Invested in capital assets, net of related debt 230,011 1,543,397 - 1,221,515 2,994,923 Unrestricted 1,155,891 2,268,749 4,479,484 2,731,357 10,635,481 Total net assets $ 1,385,902 $ 3,812,146 $ 4,479,484 $ 3,952,872 $ 13,630,404 The notes to the Fnancial statements are an integral part of this statement. 84 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Combining Statement of Revenues, Expenses, and Changes in Net Assets INTERNAL SERVICE FUNDS Year Ended September 30, 2009 OPERATING REVENUES Insurance premiums Maintenance services Computer services Telephone services Intergovernmental Other Total operating revenues OPERATING EXPENSES Claims Contractual services Personnel services Repairs and maintenance Supplies Depreciation Total operating expense Operating income (loss) NONOPERATING REVENUES (EXPENSES) Investment income Insurance recovery proceeds Other income (expense) Gain (loss) on disposal of assets Total nonoperating revenues (expenses) Income (loss) before transfers TRANSFERS Transfers in Transfers out Total transfers -net Change in net assets Net assets -beginning of year Net assets -end of year Facilities and Construction Information Totallnternal Services Fleet Services Self Insurance Services Services $ - $ - $ 8,978,072 $ - $ 8,978,072 1,828,758 1,949,318 - - 3,778,076 - - - 2,012,415 2,012,415 - - - 405,052 405,052 - 8,998 - - 8,998 30 13,272 - 121,026 134,328 1,828,788 1,971,588 8,978,072 2,538,493 15,316,941 - - 6,944,691 - 6,944,691 738,281 75,989 757,302 200,232 1,771,804 851,075 888,588 536,739 879,813 3,156,215 955,794 - 4,051 921,386 1,881,231 50,797 632,991 4,775 306,520 995,083 22,426 362,288 - 251,551 636,265 2,618,373 1,959,856 8,247,558 2,559,502 15,385,289 (789,585) 11,732 730,514 (21,009) (68,348) 21,513 61,421 146,147 77,357 306,438 - - 312,401 - 312,401 - 1,428 11,325 - 12,753 (767,132) (267,345) - (665,770) (1,700,247) (745,619) (204,496) 469,873 (588,413) (1,068,655) (1,535,204) (192,764) 1,200,387 (609,422) (1,137,003) - 50,000 86,189 69,000 205,189 (49,424) - (25,000) - (74,424) (49,424) 50,000 61,189 69,000 130,765 (1,584,628) (142,764) 1,261,576 (540,422) (1,006,238) 2,970,530 3,954,910 3,217,908 4,493,294 14,636,642 $ 1,385,902 $ 3,812,146 $ 4,479,484 $ 3,952,872 $ 13,630,404 85 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Combining Statement of Cash Flows INTERNAL SERVICE FUNDS Year Ended September 30, 2009 Cash flows from operating activities: Receipts from intertund services provided Other operating revenue Payments to suppliers Payments to employees Net cash provided by (used for) operating activities Cash flows from noncapital financing activities: Transfers from other funds Transfers to other funds Net cash provided by (used for) noncapital and related financing activities Cash flows from capital and related financing activities: Insurance recovery proceeds Acquisition and construction of capital assets Proceeds from sale of capital assets Net cash provided by (used for) capital and related financing activities Cash flows from investing activities: Interest and dividends received Net cash provided by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalent beginning of year Cash and cash equivalent end of year Facilities and Construction Information Services Fleet Services Self Insurance Services Totals $ 1,828,758 $ 1,947,523 $ 8,751,929 $ 2,417,467 $14,945,677 30 22,270 228,145 133,990 384,435 (1,979,615) (817,834) (8,673,011) (1,420,025) (12,890,485) (810,999) (855,072) (495,903) (881,266) (3,043,240) (961,826) 296,887 (188,840) 250,166 (603,613) - 50,000 86,189 69,000 205,189 (49,424) - (25,000) - (74,424) (49,424) 50,000 61,189 69,000 130,765 - - 312,401 - 312,401 (778,839) (352,542) 11,325 (604,006) (1,724,062) 547,485 17,919 - - 565,404 (231,354) (334,623) 323,726 (604,006) (846,257) 36,100 64,911 157,944 86,875 345,830 36,100 64,911 157,944 86,875 345,830 (1,206,504) 77,175 354,019 (197,965) (973,275) 2,486,136 2,261,953 5,086,011 3,055,169 12,889,269 $ 1,279,632 $ 2,339,128 $ 5,440,030 $ 2,857,204 $11,915,994 Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss) $ (789,585) $ 11,732 $ 730,514 $ (21,009) $ (68,348) Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation expense (Increase) decrease in accounts receivable (Increase) decrease in inventories (Increase) decrease in prepaid items Increase (decrease) in deferred revenues Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Total adjustments Net cash provided by (used for) operating activities Noncash financing activities: Disposal of capital assets 22,426 222,243 - 251,551 496,220 (9,500) (1,795) 92,002 1,429 82,136 - 42,291 - - 42,291 - - 35,349 - 35,349 - - - 11,535 11,535 (224,873) (11,819) (51,237) 8,113 (279,816) 39,706 34,235 (995,468) (1,453) (922,980) (172,241) 285,155 (919,354) 271,175 (535,265) $ (961,826) $ 296,887 $ (188,840) $ 250,166 $ (603,613) $ (767,132) $ (283,838) $ - $ (665,770) $ (1,716,740) 86 DRAFT STATISTICAL SECTION $~ DRAFT N FAH This page intentionally left blank. ss DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Table 1 Net Assets by Component (unaudited) Fiscal Year 2009 2008 2007 2006 2005 2004 2003 Governmental Activities Invested in capital assets net of related debt $ 142,066,447 $ 129,533,935 $ 126,290,273 $ 127,692,821 $ 70,181,539 $ 63,351,827 $ 58,568,310 Restricted 4,693,345 3,984,364 3,270,409 2,973,821 2,759,099 2,954,135 2,858,468 Unrestricted 52,082,125 54,146,336 44,787,548 36,986,785 27,839,936 27,644,041 27,303,419 Total net assets 198 841 917 664 636 187 176,348,230 167,853,427 100,780,574 93 950 003 88,730,197 , , , , Business-type Activities Invested in capital assets net of related debt 62,354,993 60,828,610 65,485,796 82,776,005 83,610,252 65,122,142 64,023,232 Restricted 3,018,779 2,709,713 2,937,027 2,712,360 2,267,668 1,241,081 2,450,810 Unrestricted 25,309,106 29,018,350 24,779,076 27,457,208 22,623,841 20,443,728 19,036,895 Total net assets 90 682 878 556,673 92 93,201,899 92,945,573 88,501,761 86,808,951 65,510,737 , , , Primary Government Invested in capital assets net of related debt 204,421,440 190,362,545 193,776,069 190,468,826 133,791,791 128,473,969 122,591,542 Restricted 7,712,124 6,694,077 6,207,436 5,686,181 5,026,787 4,195,216 5,309,078 Unrestricted 77,391,231 83,164,888 69,566,624 64,443,993 50,463,777 48,087,769 46,340,314 Total net assets $ 289,524,795 $ 280,221,309 $ 269,550,129 $ 280,599,000 $ 189,282,335 $ 180,756,954 $ 174,240,934 Notes: Fiscal year 2003 was the implementation year of GASB #34 for the City. Figures from fiscal years prior to 2003 are unavailable for inclusion in the tables. Right-of-way land was added to the financial statements in fiscal year 2006. 89 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Table 2 Changes in Net Assets (unaudited) 2009 2008 2007 2008 2005 2004 2003 Expenses Governmental activities: General government $ 16,355,871 $ 9,379,422 $ 8,461,142 $ 9,269,861 $ 8,288,137 $ 9,755,719 $ 9,292,156 Public safety 27,772,668 25,791,827 23,265,259 22,022,696 20,693,721 20,460,665 21,078,401 Culture and recreation 10,718,579 7,973,359 7,327,532 7,611,710 7,355,182 7,436,113 7,102,491 Public works 2,126,721 5,748,315 7,799,706 8,169,282 7,597,475 6,755,207 6,917,896 Intereslandotherfees 2,269,541 2,302,096 2,561,837 2,546,791 2,860,149 3,157,963 3,653,040 Total govemmental activities 59,243,380 51,195,019 49,415,476 49,620,340 46,794,664 47,565,667 48,243,984 Business-type activities: Walerand sewer 25,121,565 27,329,181 23,154,259 22,929,665 21,492,504 20,707,959 20,415,859 Golf course 2,217,868 2,302,670 2,247,272 2,239,404 2,254,198 2,257,534 2,353,454 Aquatic park 4,105,695 3,774,757 3,433,492 3,343,073 3,251,524 3,178,835 3,121,298 Interest and olherfees 433,588 - - Total business-type activities 31,445,128 33,840,196 28,835,023 28,512,142 26,998,226 26,144,328 25,890,611 Total primary govemment 90,688,508 85,035,215 78,250,499 78,132,482 73,792,890 73,709,995 74,134,595 Program Revenues Governmental activities: Charges for services General government 4,547,658 9,333,482 6,505,029 6,881,843 5,672,569 5,548,912 5,221,263 Public safely 4,922,180 2,995,693 1,718,460 1,314,329 1,154,807 1,031,326 1,062,295 Culture andrecrealion 1,446,132 2,517,122 1,124,777 1,212,343 1,214,590 1,091,618 1,363,337 Public works 1,896,764 2,355,161 1,179,302 174,166 61,063 100,192 475,788 Operating grants and contributions 1,142,243 353,816 1,028,853 1,153,543 1,539,736 612,519 865,108 Capital grants and conVibutions 11,341,668 304,514 410,297 2,910,568 4,367,529 6,404,966 2,087,935 Total govemmental activities 25,296,645 17,859,788 11,966,718 13,646,792 14,010,294 14,789,533 11,075,726 Business-type activities: Charges for services Water and sewer 25,060,898 26,349,559 21,630,336 25,858,511 22,237,742 20,861,262 20,945,508 Golf course 2,509,577 2,571,409 2,298,065 1,775,963 2,287,494 2,154,714 2,356,941 Aquatic park 3,858,389 3,943,288 3,916,691 3,894,274 3,421,301 2,831,743 2,892,843 Operating grants and contributions - - - 66,466 46,847 344,296 64,334 Capital grants and conVibutions - - 599,983 1,288,734 1,603,834 2,128,214 1,303,870 Total business-type activities 31,428,864 32,864,256 28,445,075 32,883,948 29,597,218 28,320,229 27,563,496 Total primary govemment 56,725,509 50,724,044 40,411,793 46,530,740 43,607,512 43,109,762 36,639,222 Net (Expense)Revenue Governmentalactivities (33,946,735) (33,335,231) (37,448,758) (35,973,548) (32,784,370) (32,776,134) (37,168,258) Business-typeaclivities (16,264) (975,940) (389,948) 4,371,806 2,596,992 2,175,901 1,672,885 Total primary govemment $ (33,962,999) $ (34,311,171) $ (37,838,706) $ (31,601,742) $ (30,185,378) $ (30,600,233) $ (35,495,373) 90 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Table 2 Changes in Net Assets (unaudited) Fiscal Year 2009 2008 2007 2006 2005 2004 2003 General Revenues and Other Changes in Net Assets Governmental activities: Taxes Property taxes $ 20,605,670 $ 19,248,707 $ 18,663,482 $ 18,134,230 $ 17,458,279 $ 16,871,892 $ 16,871,892 Sales taxes 16,058,728 17,445,806 16,865,282 15,934,374 15,230,354 16,477,474 16,477,474 Mixed beverage taxes 117,757 161,783 129,860 123,355 115,143 107,164 107,164 Franchise taxes 3,802,559 4,604,523 4,450,441 3,855,169 3,541,130 3,592,682 3,592,682 Occupancy taxes 152,220 260,319 284,099 199,850 191,848 172,197 172,197 Unrestricted investmenteamings 1,611,632 2,245,479 2,757,208 2,047,583 1,088,547 652,153 652,153 Special items - 196,320 1,499,140 - - (1,585,000) (1,585,000) Miscellaneous 186,512 477,026 651,376 2,341,327 688,555 602,568 602,568 Transfers 2,586,937 569,227 712,782 873,867 1,301,085 1,104,810 1,104,810 Totalgovemmenlalactivities 45,124,015 45,209,190 46,013,670 43,509,755 39,614,941 37,995,940 37,995,940 Business-type activities: Unrestricted investmenteamings 740,393 878,795 1,330,781 945,873 396,903 225,123 225,123 Special items - - - - - - - Miscellaneous (10,986) 8,962 - - - - - Transfers (2,586,937) (557,044) (712,782) (873,867) (1,301,085) (1,104,810) (1,104,810) Total business-type activities (1,857,530) 330,713 617,999 72,006 (904,182) (879,687) (879,687) Total primary govemment 43,266,485 45,539,903 46,631,669 43,581,761 38,710,759 37,116,253 37,116,253 Changes in Net Assets Govemmental activities 11,177,280 11,873,959 8,564,912 7,536,207 6,830,571 5,219,806 827,682 Business-type activities (1,873,794) (645,227) 228,051 4,443,812 1,694,810 1,296,214 793,198 Total primary govemment $ 9,303,486 $ 11,228,732 $ 8,792,963 $ 11,980,019 $ 8,525,381 $ 6,516,020 $ 1,620,880 Notes: Fiscal year 2003 was the implementation year of GASB #34 for the City. Figures from fiscal years prior to 2003 are unavailable for inclusion in the tables 91 CITY OF NORTH RICHLAND HILLS, TEXAS Fund Balances -Governmental Funds Last Ten Fiscal Years (unaudited) Table 3 Fiscal Year 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 General Fund Reserved $ 698,043 $ 623,072 $ 833,307 $ 597,644 $ 544,903 $ 632,000 $ 660,637 $ 1,300,795 $ 927,566 $ 880,447 Unreserved 14,960,742 13,749,681 13,482,057 12,823,749 11,147,990 10,087,107 9,403,250 8,742,689 8,357,236 7,437,950 Total General Fund $ 15,658,785 $ 14,372,753 $ 14,315,364 $ 13,421,393 $ 11,692,893 $ 10,719,107 $ 10,063,887 $ 10,043,484 $ 9,284,802 $ 8,318,397 N All Other Govemmental funds Reserved $ 33,757,070 $ 29,467,707 $ 26,246,317 $ 23,279,769 $ 22,253,738 $ 29,120,849 $ 31,018,651 $ 32,934,009 $ 27,162,504 $ 23,592,861 Unreserved 7,693,461 10,268,915 4,696,564 4,784,020 3,856,173 4,436,440 $ 6,690,780 7,263,638 7,546,762 8,440,448 Total all other govemmentalfunds $ 41,450,531 $ 39,736,622 $ 30,942,881 $ 28,063,789 $ 26,109,911 $ 33,557,289 $ 37,709,431 $ 40,197,647 $ 34,709,266 $ 32,033,309 Totalaligovemmentalfunds $ 57,109,316 $ 54,109,375 $ 45,258,245 $ 41,485,182 $ 37,802,804 $ 44,276,396 $ 47,773,318 $ 50,241,131 $ 43,994,068 $ 40,351,706 D -~ w Revenues Taxes Licenses and permits Charges for services Fines Civil Citations Contributions Special assessments Investment income Intergovernmental Drainage fees Tennis center Forfeitures Mineral rights lease income Miscellaneous Total revenues Expenditures General government Public safety Culture and recreation Public works Capital outlay Debt service Principal Interest Total expenditures Excess of revenues over (under) expenditures Other Financing Sources (Uses) Proceeds from borrowing Premium on issuance of debt Proceeds from refunding Payments to escrow agent Insurance recovery proceeds Proceeds from sale of assets Payment in lieu of taxes Transfers in Transfers out Net wmponent unit transfers Total other financing sources (uses) Net change in fund balances Debt service as a percentage of noncapital expenditures 2009 2008 2007 Fiseal Year 2005 2004 2003 2002 2001 2000 Table 4 $ 40,736,934 $ 41,721,138 $ 40,393,165 $ 39,296,101 $ 37,565,652 $ 38,099,241 $ 36,455,642 $ 35,866,286 $ 34,848,255 $ 32,935,292 988,020 1,705,703 1,526,636 2,251,292 1,473,542 1,421,831 1,432,955 1,268,203 1,293,114 1,391,263 5,402,259 5,309,836 5,203,037 5,237,388 5,109,802 4,849,344 4,817,750 4,639,573 4,292,940 4,559,674 2,677,901 2,394,920 2,064,187 2,130,968 1,787,547 1,775,899 1,582,165 1,821,922 1,864,181 1,550,554 999,584 825,191 - - - - - - - - 160,194 196,320 170,326 177,273 178,937 176,962 177,162 137,791 124,299 103,756 276,475 154,125 28,225 8,348 514 - 57,169 99,024 35,428 8,691 1,250,127 1,678,921 2,258,877 1,719,493 922,870 569,532 822,474 1,477,290 2,491,631 2,396,457 2,477,191 1,200,491 1,267,839 1,730,684 1,792,392 3,139,929 1,044,102 550,253 1,020,699 1,076,730 834,075 830,338 819,370 806,414 795,475 793,415 771,430 767,958 723,256 765,153 325,907 320,836 312,697 310,397 280,505 289,375 326,110 305,159 268,081 231,065 146,630 142,874 74,448 86,752 70,117 47,068 33,874 106,358 35,346 39,121 75,282 6,239,616 - - - - - - - - 442,210 395,186 939,241 1,431,192 1,070,874 460,770 777,753 1,224,113 188,847 167,695 56,792,969 63,115,497 55,058,048 55,186,302 51,048,227 51,623,366 48,300,586 48,263,930 47,186,077 45,225,451 9,459,393 9,054,489 8,607,293 9,329,442 8,553,540 8,968,934 8,323,987 8,260,838 7,091,278 6,705,976 25,262,159 26,051,508 23,414,877 22,049,690 21,289,538 20,618,988 20,543,273 19,912,790 17,822,650 17,162,067 8,545,815 7,241,596 6,684,263 6,431,291 6,331,728 6,266,762 5,988,300 5,633,847 5,331,237 4,847,691 2,478,800 2,663,001 2,522,751 2,468,819 2,536,838 2,278,247 3,270,197 7,012,492 1,953,501 2,005,802 10,506,569 5,137,596 3,742,378 4,909,101 9,404,434 12,577,507 8,315,345 849,446 8,181,310 5,865,897 5,699,394 6,188,393 6,697,217 6,462,905 6,695,455 6,278,005 5,826,894 5,718,661 5,295,296 4,365,834 2,048,696 2,225,585 2,281,930 2,349,160 2,665,826 2,770,875 3,126,375 2,923,604 3,610,800 3,752,752 64,000,826 58,562,168 53,950,709 54,000,408 57,477,361 59,759,318 55,394,371 50,311,678 49,286,072 44,706,019 (7,207,837) 4,553,329 1,107,339 1,185,694 (6,429,134) (8,135,952) (7,093,785) (2,047,748) (2,099,995) 519,432 8,503,525 4,465,000 2,185,000 3,625,000 - 4,935,000 2,750,000 7,250,000 4,235,000 5,035,000 242 - - - - - - - - - - - 5,085,000 8,245,000 - 3,815,000 - 10,255,000 8,624,000 - - - (5,075,787) (8,100,166) - (3,694,386) - (10,394,690) (8,330,537) - - - 262,000 - - - - - - - 188,512 16,353 9,864 - - - - - - - - 355,004 - - - - - - - - 9,274,945 5,916,639 5,812,148 4,436,800 3,749,968 4,442,310 6,878,744 7,554,672 6,179,405 4,817,875 (7,759,444) (5,899,649) (5,990,349) (5,710,150) (3,794,426) (4,858,894) (5,002,772) (6,369,969) (4,965,513) (4,464,628) 207 780 10 347 4 855 2,307,876 2,496,484 (44,458) 4,639,030 4,625,972 8,294,813 5,742,355 5,388,247 , , , , $ 2,999,943 $ 9,408,676 $ 3,415,215 $ 3,662,378 $ (6,473,592) $ (3,496,922) $ (2,467,813) $ 6,247,065 $ 3,642,360 $ 5,907,679 14.5% 15.7% 17.9% 18.0% 19.5% 19.2% 19.0% 17.5% 21.7% 20.9% CITY OF NORTH RICHLAND HILLS, TEXAS Changes in Fund Balances - Governmental Funds Last Ten Fiscal Years 2006 D CITY OF NORTH RICHLAND HILLS, TEXAS Appraised and Taxable Value of Property Last Ten Fiscal Years (unaudited) Table 5 Appraised Appraised Appraised Appraised Less: Fiscal Residential Commercial Industrial Other Personal Tax-Exempt Net Taxable Total Direct Year Property Property Property Property (1) Property Property Value Tax Rate 2000 $ 1,377,817,960 $ 427,669,772 $ 26,415,578 $ 309,047,695 $ 296,528,347 $ 301,384,670 $ 2,136,094,682 $ 0.57000 2001 1,452,682,259 520,578,309 31,376,923 315,338,873 330,473,763 333,485,510 2,316,964,617 0.57000 2002 1,656,247,313 584,864,722 37,825,972 331,401,729 347,188,197 358,315,055 2,599,212,878 0.57000 2003 1,879,625,473 616,511,643 34,642,976 321,366,471 338,839,069 374,046,137 2,816,939,495 0.57000 2004 2,020,935,083 637,135,490 30,121,580 359,230,807 348,631,136 382,365,613 3,013,688,483 0.57000 2005 2,125,365,452 660,915,079 25,319,238 371,683,707 347,217,730 397,233,578 3,133,267,628 0.57000 2006 2,208,222,079 693,344,286 23,766,206 396,694,369 361,559,520 388,297,207 3,295,289,253 0.57000 2007 2,322,672,063 706,800,208 24,219,035 432,473,733 342,337,515 421,361,355 3,407,141,199 0.57000 2008 2,454,968,837 732,299,884 25,008,737 482,924,193 318,594,946 438,489,302 3,575,307,295 0.57000 2009 2,527,941,808 723,655,894 24,685,405 603,634,230 331,545,812 451,978,018 3,759,485,131 0.57000 A Source: Tarrant Appraisal District Certified Tax Roll, July 25, City budget (2007-2009) Tarrant Appraisal District September Report, City budget (1998-2006) (1) This category includes properties under protest with the appraisal review board and properties classified as incomplete by Tarrant Appraisal District at the time NRH City Council approves the Tax Rolls for the budget year. The net taxable values are those approved by City Council by resolution. D cn CITY OF NORTH RICHLAND HILLS, TEXAS Property Tax Rates -Direct and Overlapping Governments (per $100 assessed value) (unaudited) City of North Richland Hills Birdville Fiscal General Debt service Junior school Year fund (3) fund (3) Total (3) college (1) district (1)(2) 2000 $ 0.32422 $ 0.24578 $ 0.57000 $ 0.10641 $ 1.53250 2001 0.33164 0.23836 0.57000 0.10641 1.56980 2002 0.33531 0.23469 0.57000 0.10641 1.56980 2003 0.32935 0.24065 0.57000 0.13938 1.61700 2004 0.32956 0.24044 0.57000 0.13938 1.61700 2005 0.33173 0.23827 0.57000 0.13938 1.61700 2006 0.34432 0.22568 0.57000 0.13938 1.61700 (4) 2007 0.34695 0.22305 0.57000 0.13938 1.56500 (4) 2008 0.34241 0.22759 0.57000 0.13938 1.40500 (4) 2009 0.33875 0.23125 0.57000 0.13796 1.41000 (4) Sources: (1) Tarrant County. (2) Birdville Independent School District from 1998-2006. (3) City records. (4) Began using Tarrant County as source in 2006. Table 6 Hospital (1) County (1) Total $ 0.23407 $ 0.26484 $ 2.70782 0.23407 0.27479 2.75507 0.23407 0.27479 2.75507 0.23240 0.27250 2.83128 0.23540 0.27250 2.83428 0.23540 0.27250 2.83428 0.23540 0.27250 2.83428 0.23540 0.27150 2.78128 0.23040 0.26650 2.61128 0.22790 0.26400 2.60986 D DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Principal Taxpayers (unaudited) Year Ended September 30, 2009 Taxpayer Type of business Wal-Mart Hospital Corporation of America Western RIM Investors LP Oncor Electric Delivery Co. BGPC Equestrian Delaware Oak River, LLC Mega Life & Health Ins. Co. Company One, LLC Venue at Home Town, LTD AR -Hightower LP Etal Retail Healthcare Provider Real Estate Utility Service Provider Real Estate Property Developer Insurance Provider Real Estate Property Developer Real Estate 2008 assessed valuation* $ 65,187,259 45,042,523 43,634,317 28,558,415 25,850,000 23,000,000 19,439,255 19,164,236 18,444,510 17,800,000 $ 306,120,515 Year Ended September 30, 2000 Taxpayer Type of business Kimberly Clark/Tecnol, Inc. H & M Food Richland Center, Inc. Texas Utilities Electric Co. Five Star Ford/Pack Properties Meadows NRH, Assoc., LP Walmart Mid Star Properties Ltd. Alliance Park Portfolio Fairfield Rufe Snow Apartments Manufacturer Food Manufacturer Property Developer Utility Service Provider Automotive Dealership Real Estate Retail Commercial/Real Estate Commercial/Real Estate Real Estate * Source: Tarrant Appraisal District. 1999 assessed valuation* $ 33,486,565 21,996,901 20,228,500 19,867,630 19,655,766 19,363,602 18, 756,139 16, 513, 027 15,718,000 14,786,560 $ 200,372,690 Table 7 Percentage of total assessed valuation 1.73% 1.20% 1.16% 0.76% 0.69% 0.61 0.52% 0.51 0.49% 0.47% 8.14% Percentage of total assessed valuation 1.57% 1.03% 0.95% 0.93% 0.92% 0.91 0.88% 0.77% 0.74% 0.69% 9.38% 96 Fiscal Year Total tax levy 2000 $ 12,164,692 2001 13,450,403 2002 14,745,229 2003 16,056,553 2004 17,178,024 2005 17,859,625 2006 18,783,149 2007 19,420,705 2008 20,379,252 2009 21,429,065 CITY OF NORTH RICHLAND HILLS, TEXAS Property Tax Levies and Collections Last Ten Fiscal Years (unaudited) Collected within the Fiscal Year of the Lev Percent of Amount levy $ 11,932,523 98.09% 13,052,419 97.04% 14,472,560 98.15% 15,798,849 98.40% 16,860,430 98.15% 17,679,906 98.99% 18,461,867 98.29% 19,133,840 98.52% 19,980,714 98.04% 21,268,426 99.25% Collections in Subsequent Years 217,452 378,707 246,125 237,550 288,534 149,964 289,701 243,039 330,388 Total Collections to Date Percent of Amount Levy $ 12,149,975 99.88% 13,431,126 99.86% 14,718,685 99.82% 16,036,399 99.87% 17,148,964 99.83% 17,829,870 99.83% 18,751,568 99.83% 19,376,879 99.77% 20,311,102 99.67% 21,268,426 99.25% Table 8 ~7 D CITY OF NORTH RICHLAND HILLS, TEXAS Ratios of Outstanding Debt by Type Last Ten Fiscal Years (unaudited) Table 9 (dollars in thousands, except per capita) Other govt General Bonded Debt Total Percentage General Bonded Activities Debt Fiscal Estimated Net Taxable General Certificates of Loans general of Debt per Sales tax Year population (1) value (2) obligation bonds obligation payable bonded debt Net Taxable value capita (1) revenue bonds 2000 56,500 $ 2,136,095 $ 44,303 $ 10,259 $ 158 $ 54,720 2.56% $ 968 $ 10,340 2001 57,498 2,316,965 42,915 12,668 82 55,665 2.40% 968 10,070 2002 58,627 2,599,213 39,357 18,333 - 57,690 2.22°/a 984 9,375 2003 59,800 2,816,939 38,408 17,287 - 55,695 1.96% 931 8,650 2004 60,400 3,013,688 40,197 15,537 - 55,734 1.85% 923 7,890 2005 61,668 3,133,268 35,733 14,481 - 50,214 1.60% 814 7,095 2006 63,521 3,295,289 38,024 11,048 - 49,072 1.49% 773 6,270 2007 64,050 3,407,141 37,821 7,842 - 45,663 1.34% 713 5,410 2008 65,750 3,575,307 37,823 7,041 - 44,864 1.25% 682 4,520 2009 66,100 3,759,485 39,810 7,229 1,550 48,589 1.29% 735 3,600 Bu siness-Type Activities Total Total (3j Total Percentage Fiscal Water 8 sewer General Certificates of Contractual Capital business-type primary bonded debt of per capita Year revenue bonds obligation bonds obligation obligations leases activities government per capita (1) income (1) ~ ao 2000 $ 3,560 $ 3,835 $ 4,512 $ - $ - $ 11,907 $ 76,967 $ 1,362 11.45% 2001 3,170 3,621 3,980 - - 10,771 76,506 1,331 5.24% 2002 2,760 3,376 3,448 - 220 9,804 76,869 1,311 5.16% 2003 2,335 3,061 5,161 - 164 10,721 75,066 1,255 4.39% 2004 - 4,258 5,364 - 104 9,726 73,350 1,214 4.13% 2005 - 3,598 5,018 - 40 8,656 65,965 1,070 3.58% 2006 - 4,255 4,569 - - 8,844 64,186 1,010 3.30% 2007 - 3,537 4,866 - - 8,403 59,476 929 2.94% 2006 - 2,790 6,865 - - 9,655 59,038 898 2.87% 2009 - 2,350 11,254 - - 13,604 65,793 995 3.31% Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. (1) See Table 13 for additional population statistics. (2) See Table 5 for additional information on net taxable value. (3) Includes general bonded debt, other governmental activities debt, and busines s-type activities debt. D DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Table 10 Computation of Direct and Overlapping Debt September 30, 2009 (unaudited) Percentage Amount Net bonded applicable to applicable to debt City of North City of North Jurisdiction outstanding Richland Hills Richland Hills City of North Richland Hills $ 31,568,888 (1) 100.00% $ 31,568,888 Birdville Independent School District 255,639,102 44.53% 113,836,092 Hurst-Euless-Bedford Independent School District 212,152,032 0.09% 190,937 Keller Independent School District 735,369,467 4.49% 33,018,089 Tarrant County 322,210,000 3.19% 10,278,499 Tarrant County Hospital District 28,810,000 3.19% 919,039 Tarrant County College District 42,785,000 3.19% 1,364,842 Total overlapping debt 159,607,498 Total direct and overlapping debt $ 191,176,386 Source: Respective entities' records. (1) Less -self-supporting debt ss DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Table 11 Computation of Legal Debt Margin September 30, 2009 (unaudited) Article XI, Section 5 of the State of Texas Constitution states in part: "...no tax for any purpose shall ever be lawful for any one year, which shall exceed two and one-half percent of the taxable property of such city." As a home rule city, the City of North Richland Hills is not limited by law in the amount of debt it may issue. The City's Charter provides that general property taxes are limited to $1.50 per $100 of assessed valuation for general governmental services including the payment of principal and interest on general obligation bonds. The tax rate for fiscal 2009 was established at $.57 per $100 of assessed valuation based on 100% of appraised value. goo DRAFT N _d .C H Q~ X W H J O J_ ~ ` _ ~ N ~ p Z U } -o J ~ U ~ _y U_ > ~ ~ ~ ~ ~ v F- N v1 ~ ~ J N Z ~ O H V N ao O O r ~ M ~ 00 ~ M CO O O N l!7 V (O M O O U O 0~0 ~ M ~ ~ lM OMD l! j (MO CO M CO O_ ~ O O ~ ~ - M ~ ~' M f~ 00 I~ ~ (D (O ~ lf') ~ M M 00 O l7 N tt ~+ fR N V O 00 ~ M ~ ~ ~ a0 U') (D O M CO O ~ O O ~ y OO CA O 00 N 00 f~ ~ ~ ~ ~ ~ dN' M M M N N ~ d a c H .6 C O m m 3 C x H N m R 0 0 0 0 0 0 0 0 0 0 O O o 0 0 o O o 0 ~ ~n ~n ui o ~n ui o 0 0 ~ m O N (D O N tD O N 'rj ~ cD CO I~ ~ r O 00 O 0 a m ~ d ~ M ~ M O OOD aOD N 000 0 d ~ O 00 ~f ~ M d' to I~ ~ (D > t0 I~ ~ O) cD st N M ~ O ao d~ 00 N M N O f~ (O aV ~ O ~~ N N N N N ~ ''- ~ ~ ~ ;a Z y~ M_ ~, O O) '~ oo M N to aD 0 y` M M a0D N ONi a00 OMi- ao M N V 'p M (O f~ h O ~ V' ao m C - ~ ~ ~ N N N N N N tii y J W (A ~ W V' 00 M N M V' (D CO K W ~ c0 a0 M 0 h ti O N ~ ~ O ~ M d' O tip ~ 0~0 O ~ ~ M O aD O N ~' O y d N V V 'V' ~ M ~ V' ~ ~ > V' V t6 O O O O O O O O O O LL ~' N ON N N N N N N N N O 0) 0 w w LL C O d C R Y a 101 N O (6 N ~ O p U ~ ~ c c~ c ~ (0 ~ m 00 -p ~ N C O 3 ~ ~ ~ C ~ .N O N y O N C N ~p O L ~- U ~ -a Cl C ~ f0 O LL N N p ~ 'o c a m n w x ~ w U ~ c c .~ a~ ~ > ~ ~ U O ~ C N a~ w ~ o ~~ rn C_ fR C O w O U c m ~ w •- . u- c .c ~ ~ N O O p ~ f6 O ~ tl) m f0 O p T V) >, O ~ ~ ~ f6 O N N U 'O U L t~ ffl 7 'O U U C O C N C .p .C U C 01 p ~ G N f0 ~ ~ 7 ~ U ~ ~ ~ > U ~ w -0 .~-. 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O 102 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Table 14 Principal Employers (unaudited) Year Ended September 30, 2009 Percentage of total City Employer Employees' Rank employment** HealthMarkets 1,400 1 4.05% Birdville ISD~ 1,122 2 3.24% North Hills Hospital 825 3 2.39% Triad Financial Corporation 675 4 1.95% City of North Richland Hills 616 5 1.78% Tarrant Country College - NE Campus 495 6 1.43% Wal-Mart Supercenter 443 7 1.28% Wal-Mart Supercenter 441 8 1.27% Silverleaf Resorts 421 9 1.22% Tyson Prepared Foods 410 10 1.19% 6,848 19.79% Year Ended September 30, 2000 Percentage of total City Employer Employees Rank employment** Birdville ISD 875 1 4.17% MEGA Life & Health Insurance Center 740 2 3.53% Kimberly ClarklTecnol Division 733 3 3.49% TCJC - NE Campus2 615 4 2.93% North Hills Hospital 613 5 2.92% City of North Richland Hills 537 6 2.56% H & M Food Systems, Inc. 432 7 2.06% Wal-Mart 400 8 1.91 Walker Building Corporation 250 9 1.19% Bates Containers 210 10 1.00% 5,405 25.76% ~Numbe r denotes employees working in schools in the City of NRH ZSpli t with Hurst 3Actua I number of employees employed at time of reporting * Source: City records 103 DRAFT N ~ZH This page intentionally left blank. 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G N m~ N f0 y i 0 ~ •~ f0 n ~~ c E c rn .o a °1 0 ~~ a ~ m o U ~ ~~ •~ ;~ `o c ~ w ~~ y> j 5 0~ 1° ~m >> m a o ._ m +• m~ v m a ~ c m m m m a ~ a~ ii z x az m a o ~dw c ~a:~w o = c .rmwv~_ 0 0 w C7 F- a F- V -- a 5 F- -- 105 d O) 7 rn c .~ m a O U U 0 N DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Table 16 Operating Indicators by Function/Program Last Ten Fiscal Years (unaudited) Fiscal Year 2009 2008 2007 2006 General government Planning and Inspections Construction Commercial units 41 51 56 40 Commercial value $ 3,790,657 $ 7,907,730 $ 15,083,593 $ 53,708,815 Residential units 55 116 235 382 Residential value $ 13,295,377 $ 31,498,499 $ 54,190,911 $ 79,332,989 Public safety Police Law violations (2) 4,270 4,289 3,403 4,694 Part one offenses 3,190 3,458 3,216 3,318 Traffic violations 25,111 28,899 20,010 22,124 Calls for service 123,877 124,212 103,137 107,096 (5) Case Gearance % 41% 41% 36% 37% Fire Total responses 6,551 6,929 6,749 5,770 Fire responses 1,617 1,843 1,651 1,633 EMS responses 4,934 5,086 5,098 4,137 responses < 5 minutes 73% 72% 72% 73% Total inspections 2,308 2,412 2,007 2,033 Culture and recreation Parks and recreation Water park admissions 231,379 233,654 248,205 260,869 Golf rounds played 54,373 56,192 48,838 39,603 (3) Library Number of volumes 192,044 180,737 177,270 179,366 Annual circulation 764,195 606,639 (7) (8) 660,627 697,013 Annual loans per capita 11.56 9.23 (7) 10.31 10.97 Public works Water Avg daily consumption (4) 1,213,697 1,317,622 1,178,439 1,397,254 Peak daily consumption (4) 2,751,337 2,963,770 2,449,372 2,701,738 Streets Street overlay -miles 5 2 (6) 8 9 Concrete pavement repair - sq. ft. 12,655 4,404 (6) 14,694 9,485 Pothole repair - sq. ft. 4,303 5,499 (6) 10,480 8,738 Street cut - sq. ft. 162,446 121,809 (6) 156,141 179,703 Sign fabrication 1,119 1,455 2,040 1,795 Source: City records (1) Unavailable data is reflected as "" on the report. (2) Excludes traffic violations (3) Course closed from July 1st to September 15th, 2006 for renovations. (4) Cubic feet (5) Method of calculation was changed by Police Department (6) Overlay was moved into the 2008-2009 Budget Year because Public Works was assessing program options. (7) Library Gosed from March 20th to April 19th, 2008 in order to move to new location. (8) Loan period changed from 2 weeks to 3 weeks. 106 DRAFT Table 16 2005 2004 2003 2002 2001 2000 29 47 59 43 46 66 $ 14,139,519 $ 27,210,050 $ 14,309,787 $ 34,989,928 $ 18,124,797 $ 54,733,881 420 310 292 277 348 351 $ 77,631,113 $ 53,937,035 $ 47,548,847 $ 40,133,683 $ 53,605,960 $ 45,817,144 4,767 3,764 4,141 4,214 4,710 6,191 2,911 3,312 3,363 3,461 3,014 3,043 22,810 21,317 28,729 26,638 20,405 28,455 114, 058 116, 877 118, 427 118, 992 115, 946 115, 635 37% 37% 39% 38% 39% 36% 5,570 6,992 6,824 5,665 5,505 5,124 1,438 1,696 1,682 1,672 1,843 1,981 4,132 5,296 5,142 3,993 3,662 3,143 73% 72% 74% 74% 75% 74% 1,946 1,020 1,169 521 331 76 250,682 213,285 228,992 266,655 250,406 260,500 50,187 52,176 50,368 50,663 44,000 53,906 176, 719 170, 849 162, 020 148, 238 135, 756 119, 956 696,954 723,206 731,499 671,955 521,989 430,420 11.30 11.97 8.47 11.46 9.08 7.62 1,264,837 1,131,712 1,190,464 1,165,894 1,205,488 1,237,752 2,787,834 2,400,668 2,976,738 2,576,385 2,927,130 3,025,134 11 8 8 6 6 7 5,474 1,779 4,471 2,142 1,201 - 12,969 15,282 11,322 12,632 27,934 17,206 151,706 231,462 210,232 166,131 144,182 126,405 1,556 2,389 3,331 1,280 2,376 2,019 107 DRAFT CITY OF NORTH RICHLAND HILLS, TEXAS Capital Asset Statistics by Function/Program Last Ten Fiscal Years (unaudited) Fiscal Year 2009 2008 2007 Public safety Police Stations 1 1 1 Fire Stations 4 4 4 Fire hydrants 2,100 (4) 2,119 2,077 Culture and recreation Parks and recreation Parks 32 32 32 Park acreage 708 (3) 706 706 (1) Playgrounds 20 20 20 Trails -miles 20 20 20 Golf Courses 1 1 1 Recreations centers 1 1 1 Athletic fields 53 53 53 (1) Senior centers 2 2 2 Library Libraries 1 1 1 Public works Water mains -miles 341 (4) 356 354 Water connections 20,302 20,282 20,516 Wastewater lines -miles 285 (4) 245 244 Wastewater connections 19,068 (5) 19,053 19,350 Storm drain -miles 139 138 137 Streets -miles 235 234 232 Street lights 2,525 2,518 2,513 Source: City records Unavailable data is reflected as "" on the report. (1) Subtracted Thomas Acres (BISD property no longer maintaining) (2) Oncor performed acity-wide audit of streetlights in 2006. Subsequent years' counts are based on Oncor billings. (3) Acquisition of easements for Little Bear Creek trail. (4) Department implemented a complete inventory system in 2009 that will provide more accurate counts. (5) Indicates active accounts. Source: NRH Utility Customer Service Department. Table 17 1 4 1, 900 31 741 21 15 1 1 59 2 1 342 19,784 234 18,618 135 227 2,431 (2) 108 DRAFT Table 17 2005 2004 2003 2002 2001 2000 1 1 1 1 1 1 4 4 4 4 4 4 1,850 1,840 1,830 1,775 1,700 1,677 27 25 24 18 18 18 720 720 701 675 675 667 17 18 18 13 13 13 12 11 7 6 6 6 1 1 1 1 1 1 1 1 1 1 1 1 58 57 57 47 47 47 2 2 2 2 2 2 1 1 1 1 1 1 341 341 334 325 319 315 19, 356 18, 977 18,611 18,329 18,091 18,048 233 233 229 224 219 233 18, 257 17,898 17,588 17,020 16,654 17,158 133 133 131 129 129 127 225 221 214 212 211 208 2,062 2,023 2,012 2,100 2,070 2,030 109 CITY OF NORTH RICHLAND HILLS Department: City Secretary Presented by: Patricia Hutson Council Meeting Date: 4-26-2010 Agenda No. F.2 Subject: GN 2010-024 Appointment to Teen Court Advisory Board -Place 5 The Place 5 position on the Teen Court Advisory Board is currently vacant. Councilman Whitson is recommending the appointment of Ms. Nikki Novak to fill the vacancy. Ms. Novak is a North Richland Hills resident and currently volunteers with Teen Court. Recommendation: To appoint Ms. Nikki Novak to Place 5 on the Teen Court Advisory Board, term expiring June 30, 2011. CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 4-26-2010 Presented by: Agenda No. G.0 Subject: EXECUTIVE SESSION ITEMS CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 4-26-2010 Presented by: Agenda No. G.1 Subject: Action on Any Item Discussed in Executive Session Listed on Work Session Agenda CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 4-26-2010 Presented by: Agenda No. H.0 Subject: INFORMATION AND REPORTS CITY OF NORTH RICHLAND HILLS Department: City Secretary Presented by: Subject: Announcements -Mayor Pro Tem Turnage Council Meeting Date: 4-26-2010 Agenda No. H.1 Announcements Early voting for the May 8th election began today, April 26t", and continues through May 4th at the NRH Recreation Center. The position of Mayor and City Council Places 2, 4 and 6 will be on the ballot, along with a referendum on whether the Crime Control & Prevention District should be continued for 20 years. For more information about this election, visit the City's web site at www.nrhtx.com or call 817-427-6060. The Sounds of Spring Concert Series continues every Friday night through May 7th at NRH2O. Gates open at 6 p.m. and the concerts begin at 7 p.m. Admission is free. Remember to bring blankets and lawn chairs. For more information, visit the City's web site or call 817-427-6600. The City of North Richland Hills is hosting four Energy Efficiency Workshops in May. Participants will learn simple techniques to make their home more energy efficient. Participants will also receive a free Energy Efficiency Tool Kit. To sign up and get more details, please call 817-427-6650. Kudos Korner Every Council Meeting, we spotlight our employees for the great things they do. Geoffrey Sherman, Parks & Recreation Department Several emails were received from residents who attended the Spring in the Garden Seminar. They thanked Geoffrey for presenting valuable information in a fun and relaxed way. They also thanked the entire team of employees who are responsible for continuously maintaining our beautiful city landscape day after day. CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 4-26-2010 Presented by: Agenda No. H.2 Subject: Adjournment