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HomeMy WebLinkAboutCC 2011-03-07 Agendas CITY OF NORTH RICHLAND HILLS CITY COUNCIL WORK SESSION AGENDA NORTH RICHLAND HILLS CITY COUNCIL WORKROOM 7301 NORTHEAST LOOP 820 NORTH RICHLAND HILLS, TEXAS Monday, March 7, 2011 6:00 P.M. A.1 Discuss Items from Regular City Council Meeting A.2 Recreation Center Naming Recommendation Update (15 Minutes) A.3 Presentation of New Grant Funded CERT Web -site (10 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) City of North Richland Hills v. Laura Friend, et al (No. 02 -09- 00166 -CV) 2) Hometown Urban Partners, Ltd. vs. City of North Richland Hills (No. 096- 236530 -09); 3) Arcadia Land Partners 25 Ltd., et al vs. City of North Richland Hills (No. 067 - 241297 -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 March 4, 2011 at a.m. ) 4 (1 Sato si ant ity 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 — March 7, 2011 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, March 7, 2011 7:00 P.M. ------------------------------------------------------------------------------------------------------------------------- Hard 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: ❑ City Hall on the day of the meeting Additionally, the agenda packet is available for download from the City's web site at www.nrhtx.com after 10 a.m. the day of 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 Recognition(s) - Certificate of Achievement for Excellence in Financial Reporting for the Comprehensive Financial Report ending September 30, 2009 A.4 Special Presentation(s) and Recognition(s) - Annual Bunny and Bear Drive presented by Haley Whatley A.5 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.6 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. NRH City Council Agenda — March 7, 2011 Page 2 of 4 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 February 28, 2011 City Council Meeting B.2 PU 2011 -009 Revise the FY2010/2011 Capital Projects Budget in the amount of $41,958 and Award the Bid for Replacement of the Green Extreme Switchgear to Hurst Electric in the amount of $41,958 C.0 PUBLIC HEARINGS C.1 SUP 2010 -07 Public Hearing and Consideration of a Request from Arfa Group LLC for a Special Use Permit (SUP) for an Auto Rental business at 7109 Boulevard 26. (Requested continuance by applicant) C.2 ZC 2011 -02 Public Hearing and Consideration of a Request from Janet Hallman for a Zoning Change from AG Agricultural to R -1 Single Family on Lot 2, Block 1, French Addition located at 8808 Amundson Drive - Ordinance No. 3131 C.3 ZC 2011 -01 Public Hearing and Consideration of a Request from Brian James for a Zoning Change from AG Agricultural to R -1 Single Family on Tract 2T, Abstract 1055 located at 6832 Clift Street - Ordinance No. 3130 C.4 GN 2011 -020 Public Hearing to Consider Sign Variance Request SRB 2011 -02 Regarding Section 106(12) of the Code of Ordinances by Golden Corral Restaurant located at 7660 Boulevard 26 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 2011 -018 Presentation of Fiscal Year 2010 Audited Financial Report F.2 PU 2011 -010 Authorizing the Purchase of Proxim Traffic Signal Radio Communication Equipment from Anixter, Inc. in the Amount of $40,478.27 and Sole Source Radio Communication Equipment Installation through JTS in the Amount of $52,974.38 F.3 GN 2011 -020 Support Proposed Resolutions of the 35W Coalition NRH City Council Agenda — March 7, 2011 Page 3 of 4 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 - Councilman Lombard H.2 Adjournment All items on the agenda are for discussion and /or action. 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 March 4, 2011 at ! a.m. ' 4sisnt 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 — March 7, 2011 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, March 7, 2011 6:00 P.M. A.1 Discuss Items from Regular City Council Meeting A.2 Recreation Center Naming Recommendation Update (15 Minutes) A.3 Presentation of New Grant Funded CERT Web -site (10 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) City of North Richland Hills v Laura Friend et al (No. 02 -09- 00166 -CV) 2) Hometown Urban Partners Ltd vs City of North Richland Hills (No. 096- 236530 -09); 3) Arcadia Land Partners 25 Ltd et al vs. City of North Richland Hills (No. 067 - 241297 -091 C.0 Adjournment CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Agenda No. A.1 Subject: Discuss Items from Regular City Council Meeting CITY OF NORTH RICHLAND HILLS Department: Parks and Recreation Council Meeting Date: 3 -7 -2011 Presented by: Vickie Loftice Agenda No. A.2 Subject: Recreation Center Naming Recommendation Update (15 Minutes) Summary The Naming Board is submitting two naming recommendations for Council's consideration based on comments and input received at the February 14 Work Session. General Description At the February 14 Work Session, naming of the recreation center was discussed. Utilizing Council comments and input from this discussion, the Naming Board then discussed approximately 20 additional names. After deliberation and discussion, the Naming Board arrived at two names for Council's consideration, with the first being the unanimously preferred name. 1. NRH Centre 2. NRH Community Centre Both names incorporate NRH in the name and are simple, classic and timeless. The names are broad in scope, which is helpful given the multiple functions and amenities of the facility. Each name can also be creatively presented and used, providing a variety of opportunities for branding. Upon approval of a name, "the recreation center" will henceforth be referred to by the approved name. Staff will then begin working with BrandEra on logo and graphic development of the name along with strategic positioning and branding of the new facility. The Naming Board will reconvene at a later date for naming considerations of the banquet/events center and the senior center. The Naming Board is requesting Council's input on the recommended names. The item will be formally considered at the March 28th City Council Meeting. CITY OF NORTH RICHLAND HILLS Department: Fire Council Meeting Date: 3 -7 -2011 Presented by: Sean Hughes Agenda No. A.3 Subject: Presentation of New Grant Funded CERT Web -site (10 Minutes) Summary The North Richland Hills Community Emergency Response Team (CERT) Program has launched a new website: www.nnccert.org that is designed to provide a comprehensive overview of the CERT program. General Description The new CERT website offers online education about disaster preparedness and training in basic disaster response skills, such as fire safety, light search and rescue, team organization, and disaster medical operations. CERT members, upon registration, will be able to maintain service hours and certifications online and will have access to the events calendar. Additionally, useful links are available to many other NRH departments. The website was designed by NRH CERT member, Tammy Gordon, and will be maintained by CERT members. However, the City will, at all times, maintain administrative authority. This site is fully funded for ten years through CERT grant funding. CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Agenda No. B.0 Subject: EXECUTIVE SESSION - The City Council may enter into closed Executive Session to discuss the following as authorized by Chapter 551, Texas Government Code CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 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) City of North Richland Hills v. Laura Friend, et al (No. 02 -09- 00166 -CV) 2) Hometown Urban Partners, Ltd. vs. City of North Richland Hills (No. 096- 236530 -09); 3) Arcadia Land Partners 25 Ltd., et al vs. City of North Richland Hills (No. 067 - 241297 -09) CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 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, March 7, 2011 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 Recognition(s) - Certificate of Achievement for Excellence in Financial Reporting for the Comprehensive Financial Report ending September 30, 2009 A.4 Special Presentation(s) and Recognition(s) - Annual Bunny and Bear Drive presented by Haley Whatley A.5 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.6 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 February 28, 2011 City Council Meeting B.2 PU 2011 -009 Revise the FY2010/2011 Capital Protects Budget in the amount of $41,958 and Award the Bid for Replacement of the Green Extreme Switchgear to Hurst Electric in the amount of $41,958 C.0 PUBLIC HEARINGS C.1 SUP 2010 -07 Public Hearing and Consideration of a Request from Arfa Group LLC for a Special Use Permit (SUP) for an Auto Rental business at 7109 Boulevard 26. (Requested continuance by applicant) C.2 ZC 2011 -02 Public Hearing and Consideration of a Request from Janet Hallman for a Zoning Change from AG Agricultural to R -1 Single Family on Lot 2, Block 1, French Addition located at 8808 Amundson Drive - Ordinance No. 3131 C.3 ZC 2011 -01 Public Hearing and Consideration of a Request from Brian James for a Zoning Change from AG Agricultural to R -1 Single Family on Tract 2T Abstract 1055 located at 6832 Clift Street - Ordinance No. 3130 CA GN 2011 -020 Public Hearing to Consider Sign Variance Request SRB 2011 -02 Regarding Section 106(12) of the Code of Ordinances by Golden Corral Restaurant located at 7660 Boulevard 26 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 2011 -018 Presentation of Fiscal Year 2010 Audited Financial Report F.2 PU 2011 -010 Authorizing the Purchase of Proxim Traffic Signal Radio Communication Equipment from Anixter, Inc. in the Amount of $40,478.27 and Sole Source Radio Communication Equipment Installation through JTS in the Amount of $52,974.38 F.3 GN 2011 -020 Support Proposed Resolutions of the 35W Coalition 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 - Councilman Lombard H.2 Adiournment CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Mayor Oscar Trevino Agenda No. A.0 Subject: Call to Order - Mayor Trevino CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Councilman Tim Barth Agenda No. A.1 Subject: Invocation - Councilman Barth CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Councilman Tim Barth Agenda No. A.2 Subject: Pledge - Councilman Barth CITY OF NORTH RICHLAND HILLS Department: Finance Council Meeting Date: 3 -7 -2011 Presented by: Larry Koonce Agenda No. A.3 Subject: Special Presentation(s) and Recognition(s) - Certificate of Achievement for Excellence in Financial Reporting for the Comprehensive Financial Report ending September 30, 2009 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, 2009. 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 27 consecutive years. The GFOA report of results of the FY 2008 awards indicates that of the nearly 1,200 municipalities in the State of Texas, 175 or 15% received the award. Of the nearly 36,000 cities in the United States, 1,814 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 2009 certificate on page XIV of the 2010 CAFR in your packet. 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. CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Haley Whatley Agenda No. AA Subject: Special Presentation(s) and Recognition(s) - Annual Bunny and Bear Drive presented by Haley Whatley Haley Whatley, a young North Richland Hills resident, is coordinating her 11th Annual Bunny & Bear Drive benefiting Cook Children's Medical Center in Fort Worth. Her goal is to give every child at Cook's a bunny or bear during their time in the hospital. This year stuffed bunnies and bears will be collected March 21 through April 1 at several locations throughout our community including North Richland Hills City Hall. Haley has asked to make a special presentation to the City Council to raise awareness about this year's Bunny & Bear Drive. CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Agenda No. A.5 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 Council Meeting Date: 3 -7 -2011 Presented by: Agenda No. A.6 Subject: Removal of Item(s) from Consent Agenda CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 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 NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Agenda No. B.1 Subject: Approval of Minutes of February 28, 2011 City Council Meeting Recommendation To approve the minutes of the February 28, 2011 City Council Meeting. 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 — FEBRUARY 28, 2011 WORK SESSION The City Council of the City of North Richland Hills, Texas met in work session on the 28 day of February 2011 at 6:00 p.m. in the City Council Workroom prior to the 7:00 p.m. regular Council meeting. Present: Oscar Trevino Mayor Ken Sapp Mayor Pro Tem, Council, Place 2 John Lewis Council, Place 1 Tom Lombard Council, Place 3 Tim Barth Council, Place 4 David Whitson Council, Place 5 Scott Turnage Council, Place 6 Tim Welch Council, Place 7 Staff Members: Mark Hindman City Manager Jared Miller Assistant City Manager Karen Bostic Assistant City Manager Jimmy Perdue Director of Public Safety Mike Curtis Managing Director Vickie Loftice Managing Director Patricia Hutson City Secretary Monica Solko Assistant City Secretary George Staples City Attorney Dana Alden Assistant to City Manager Mary Peters Public Information Officer John Pitstick Director of Planning & Development Larry Koonce Finance Director Thomas Powell Fleet Services Director Craig Hulse Economic Development Director Gregory Van NieuwenhuizeAssistant Public Works Director Mike Hamlin Assistant Police Chief Jamie Brockway Purchasing Manager Dave Pendley Building Official 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 the Council. A.2 Discuss Federal Legislative Positions Ms. Karen Bostic highlighted the City's proposed 2011 Federal Legislative Positions. As in previous years, four guiding principles were used to determine positions on city related issues expected to come forward during the legislative session. Ms. Bostic highlighted the four guiding principles — local control, predictable and sufficient level of revenue to provide for our citizens, opposition to unfunded mandates and quality of life. The highest priorities and the city's positions were presented — Transportation, Rights of Way, Community Development Block Grant, Public Safety Collective Bargaining, Border Security and Immigration and Healthcare Reform. Ms. Bostic clarified that in the Council's packet of information the reference under the material on Healthcare Reform to part time employees is part time employees who work a minimum of 30 hours per week. There were no questions from the Council. Council concurred with the City's 2011 Federal Legislative Positions. 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 551.072, Texas Government_ Code to deliberate the purchase exchange, lease or value of property - 1) Parcel 96 located at 6720 Northeast Loop 820; 2) Parcel 135 located at 7301 Northeast Loop 820: 3) Parcel 152 located at 820 and Cummings Drive; 4) Parcel 150 located at 4816 Cummings Drive East; 5) Parcel 134B located at Holiday Lane and Maplewood Avenue B.2 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) Mayor Trevino announced at 6:08 p.m. that the Council would convene into Executive Session as authorized by Chapter 551, Texas Government Code, pursuant to Section 551.072 to deliberate the purchase, exchange, lease or value of property — 1) Parcel 96 located at 6720 Northeast Loop 820; 2) Parcel 135 located at 7301 Northeast Loop 820; 3) Parcel 152 located at 820 and Cummings Drive; 4) Parcel 150 located at 4816 Cummings Drive East; and Parcel 134B located at Holiday Lane and Maplewood Avenue and Section 551.071 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). C.0 Adjournment Mayor Trevino announced at 6:45 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 February 28, 2011 at 7 :00 p.m. ROLL CALL Present: Oscar Trevino Mayor Ken Sapp Mayor Pro Tern, Council, Place 2 John Lewis Council, Place 1 Tom Lombard Council, Place 3 Tim Barth Council, Place 4 David Whitson Council, Place 5 Scott Turnage Council, Place 6 Tim Welch Council, Place 7 Staff: Mark Hindman City Manager Jared Miller Assistant City Manager Karen Bostic Assistant City Manager Jimmy Perdue Director of Public Safety Mike Curtis Managing Director Vickie Loftice Managing Director Patricia Hutson City Secretary Monica Solko Assistant City Secretary George Staples Attorney A.1 INVOCATION Councilman Turnage gave the invocation. A.2 PLEDGE OF ALLEGIANCE Councilman Turnage led the pledge of allegiance. A.3 SPECIAL PRESENTATION(S) AND RECOGNITION(S) No items for this category. 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 FEBRUARY 14, 2011 CITY COUNCIL MEETING B.2 GN 2011 -017 AUTHORIZE REPLACEMENT DEED COUNCILMAN WHITSON MOVED TO APPROVE THE CONSENT AGENDA. MAYOR PRO TEM SAPP SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. C.0 PUBLIC HEARINGS C.1 GN 2011 -013 CONDUCT A PUBLIC HEARING FOR THE 37TH YEAR COMMUNITY BLOCK GRANT PROGRAM Mayor Trevino opened the public hearing. Ms. Dana Alden, Assistant to the City Manager, presented the item. Community Development Block Grant (CDBG) funds are used to revitalize neighborhoods, economic development and to provide public facilities and services for low to moderate income persons. Eligible CDBG projects include construction or rehabilitation of homes, and basic infrastructure development that target designated areas /persons. The projects selected by the City must fall in the geographic area identified by the most recent census as being an area with low to moderate income persons. The City has prepared a program for the 37 CDBG program year that proposes total funds of $245,091 to be used in the following manner: $200,091 for the design and replacement of a portion of the sanitary sewer line for the 3900 and 4000 blocks of Scruggs Drive (approximately 1200 linear feet between Glenview on the north and Harmonson on the south) $45,000 to be used for the rehabilitation of residential homes located within the target area identified by the most recent census as being low to moderate income. The City has submitted application to Tarrant County who administers the program. The City is required to hold a public hearing to receive comments and input from citizens regarding the proposed 37 CDBG program. Following the public hearing, a resolution to approve the program is required. Mayor Trevino called for comments on the 37 year CDBG program. There being no one wishing to speak, Mayor Trevino closed the public hearing. C.2 GN 2011 -014 APPROVE 37TH YEAR (2011/2012) COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM - RESOLUTION NO. 2011 -009 (THIS ITEM IS NOT A PUBLIC HEARING BUT RELATED TO ITEM C -1) APPROVED This item is the second part to the Community Development Block Grant (CDBG) process. Following the public hearing held during Item C.1, City Council is required to take action on the projects to be included in the 37 Year CDBG program. COUNCILMAN LOMBARD MOVED TO APPROVE GN'' 2011 -014, RESOLUTION NO. 2011 -009. COUNCILMAN WHITSON SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. D.0 PLANNING & DEVELOPMENT Items to follow do not require a public hearing. No items for this category. E.0 PUBLIC WORKS E.1 PW 2011 -004 APPROVE AN AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH FREESE AND NICHOLS, INC. IN THE AMOUNT OF $78,000 FOR THE DAVIS BOULEVARD AND MID - CITIES BOULEVARD INTERSECTION IMPROVEMENTS PROJECT (ST0401) APPROVED Mr. Gregory VanNieuwenhuize, Assistant Public Works Director, presented the item. Council is being asked to amend an existing professional services contract for the Davis Boulevard /Mid - Cities Boulevard Intersection (TEA 21) Capital Improvements Project. Freese and Nichols was awarded a professional services agreement in 2008 for the project. Because Davis Boulevard is a state highway, City Staff and Freese and Nichols have been working with the State on the design and construction of the project. As a result of complying with TxDOT requirements, additional design requirements requested by the Fort Worth District Office will necessitate the acquisition of additional right of way, additional utility relocations, etc. Council is being requested to approve a proposed amendment in the amount of $78,000 that addresses the additional work required of Freese and Nichols in order to comply with TxDOT's requirements. MAYOR PRO TEM SAPP MOVED TO APPROVE PW 2011 -004, APPROVING THE AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH FREESE AND NICHOLS, INC. IN THE AMOUNT OF $78,000 FOR THE DAVIS BOULEVARD AND MID - CITIES BOULEVARD INTERSECTION IMPROVEMENTS PROJECTS. COUNCILMAN TURNAGE SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. F.0 GENERAL ITEMS F.1 PU 2011 -007 REVISE THE FY 2010/2011 CAPITAL PROJECTS BUDGET, APPROVE THE PURCHASE OF FRAZER AMBULANCE FROM DALLAS DODGE CHRYSLER JEEP IN THE AMOUNT OF $179,200 AND AUTHORIZE THE CITY MANAGER TO SIGN GRANT AMENDMENT WITH THE NORTH CENTRAL TEXAS COUNCIL OF GOVERNMENTS FOR THE ON -ROAD HEAVY -DUTY REPLACEMENT AND REPOWER PROGRAM - RESOLUTION NO. 2011 -006 APPROVED Mr. Thomas Powell, Director of Fleet Services, presented an item for Council to consider approval of additional funding under the On -Road Heavy -Duty Replacement and Repower Program administered by the North Central Texas Council of Governments ( NCTCOG). American Recover and Reinvestment Act (ARRA) grant funding was approved in FY 2009 -2010 in the amount of $188,850 to assist with the purchase of a Fire Department ambulance and pumper truck. Of the original grant funding, the amount utilized was $171,850 leaving an available balance of $17,000. In February 2011 the original grant funding was increased by $33,000 resulting in a total available balance of $50,000. The balance can be used to assist with the replacement of a 1996 ambulance currently scheduled to be replaced in FY 2011 -2012. To satisfy the deadline requirements of the grant and to take advantage of the remaining balance it will be necessary to purchase the ambulance prior to the end of FY 2010 -2011. Council is requested to approve a revision to the FY 2010 -2011 Capital Projects Budget, approve Resolution No. 2011 -006, approve execution of the grant agreement with NCTCOG in the amount of $221,850 and approve the purchase of a Frazier Ambulance from Dallas Dodge Chrysler Jeep in the amount of $179,200. Certificates of Obligation in the amount of $150,000 will be issued to cover the remaining funding requirements. COUNCILMAN LOMBARD MOVED TO APPROVE PU 2011 -007, REVISING THE FY 2010 -2011 CAPITAL PROJECTS BUDGET, APPROVING RESOLUTION NO. 2011 -006, AND APPROVING THE PURCHASE OF A FRAZIER AMBULANCE FROM DALLAS DODGE CHRYSLER JEEP IN THE AMOUNT OF $179,200. COUNCILMAN BARTH SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. F.2 GN 2011 -015 AMENDING APPENDIX A FEE SCHEDULE OF THE CODE OF ORDINANCES PLUMBING PERMITS - ORDINANCE NO. 3129 APPROVED Mr. Dave Pendley, Building Official, presented the item. Council is being requested to consider Ordinance No. 3129 which will eliminate the registration fee of plumbing contractors and update the fees charged for plumbing permits. During the last legislative session, SIB 1354 was passed prohibiting municipalities from charging plumbing contractors a local registration fee. Because of inconsistent language in the text, several cities including North Richland Hills, continued to charge the registration fee. On September 30, 2010 Staff stopped collecting this fee at the direction of the City Attorney. In an effort to recoup the fees that supports staff time committed to managing registrations, several options were considered. Staff concluded the best option to be a 30% across - the -board increase. The option is fair to all contractors and creates less of an impact on the smaller, frequent permits. A fee survey was conducted and Staff found that a 30% increase did not put North Richland Hills out of line with fees currently being charged by neighboring municipalities. COUNCILMAN WELCH MOVED TO APPROVE GN 2011 -015, ORDINANCE NO. 3129.. COUNCILMAN WHITSON SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0.. F.3 PU 2011 -008 AUTHORIZE THE PURCHASE OF GRANT - FUNDED EQUIPMENT FROM ICX TECHNOLOGIES IN THE AMOUNT OF $ 115,293.01 APPROVED Mr. Mike Hamlin, Assistant Police Chief, presented the item. Council is being requested to authorize the purchase of a grant- funded mobile elevated observation platform from ICX Technologies. The equipment will initially be purchased from the Department's Special Investigations Fund. The City will be reimbursed 100% of the $80,000 grant once the purchase is completed. COUNCILMAN TURNAGE MOVED TO APPROVE PU 2011 -008, AUTHORIZING THE PURCHASE OF GRANT - FUNDED :EQUIPMENT FROM ICX TECHNOLOGIES IN THE AMOUNT OF $115,293.01. COUNCILMAN LOMBARD SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. F.4 GN 2011 -016 APPOINTMENTS TO NAMING BOARD APPROVED Mayor Trevino advised Council that Councilmen Lombard, Barth and Turnage have been serving on the Naming Board for several years and that one of the members had requested to step down. Mayor Trevino advised he was recommending the appointment of Councilmen Lombard, Whitson, and Turnage to the Board. MAYOR PRO TEM SAPP MOVED TO APPROVE GN 2011 -016, APPROVING THE RECOMMENDATION OF THE MAYOR TO APPOINT COUNCILMAN LOMBARD, COUNCILMAN WHITSON, AND COUNCILMAN TURNAGE TO THE NAMING BOARD. COUNCILMAN WELCH SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. G.0 EXECUTIVE SESSION ITEMS G.1 ACTION ON ANY ITEM DISCUSSED IN EXECUTIVE SESSION LISTED ON WORK SESSION AGENDA B.1 CONSIDERATION OF THE PURCHASE, EXCHANGE, LEASE OR VALUE OF PROPERTY LOCATED AT 1) PARCEL 96 LOCATED AT 6720 NORTHEAST LOOP 820; 2) PARCEL 135 LOCATED AT 7301 NORTHEAST LOOP 820; 3) PARCEL 152 LOCATED AT 820 AND CUMMINGS DRIVE; 4) PARCEL 150 LOCATED AT 4816 CUMMINGS DRIVE EAST; AND 4) PARCEL 134B LOCATED AT HOLIDAY LANE AND MAPLEWOOD AVENUE RESOLUTION NOS. 2011- 010, 2011 -011, 2011-012, 2011 -013, 2011 -014 APPROVED Mr. Jimmy Perdue, Director of Public Safety, presented the following items from Executive Session requiring Council action. Council was asked to consider Resolution Nos. 2011 -010 and 2011 -011 authorizing the City Manager to execute Possession and Use Agreements for Transportation Purposes with NTE Mobility Partners for Parcels 96 and 135 of the Loop 820 Construction Project. Execution of the agreements will allow NTE to take possession of the city's property located at 6720 and 7301 Northeast Loop 820 without diminishing the City's rights. Resolution No. 2011 -010 authorizes the City Manager to execute a Possession and Use Agreement for a 22,099 square foot of parcel of land known as Parcel 96 for the Loop 820 Widening Project. Resolution No. 2011 -011 authorizes the City Manager to execute a Possession and Use Agreement for an 11,055 square foot parcel of land known as Parcel 135 for the Loop 820 Widening Project. COUNCILMAN WELCH MOVED '° TO APPROVE RESOLUTION NOS. 2011 -010 AND :'2011 -011 AUTHORIZING THE CITY MANAGER TO EXECUTE POSSESSION AND USE AGREEMENTS WITH NTE MOBILITY PARTNERS FOR PARCEL 96 AND PARCEL 1135 OF THE LOOP 820 PROJECT. COUNCILMAN WHITSON SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. Council was next asked to consider Resolution Nos. 2011 -012, 2011 -013, and 2011- 014 to authorize the sale of City owned land identified as Parcels 150, 152 and 134B of the Loop 820 Construction Project and authorize the City Manager to execute a deed of sale for the properties to the State of Texas. • Resolution No. 2011 -012 authorizes the sale of a 3,159 square foot parcel of property owned by the City for $7,108 to the State of Texas (Parcel 150). Parcel 150 located at 4816 Cummings Drive is jointly owned by the City, Tarrant County and Birdville Independent School District. • Resolution No. 2011 -013 authorizes the sale of a 1,426 square foot parcel of property owned by the City for $2,139.00 to the State of Texas (Parcel 152). Parcel 152 is located at the south side of Northeast Loop 820, 180 feet southeast of East Cummings Drive. • Resolution No. 2011 -014 authorizes the sale of a 492 square foot parcel of property owned by the City for $1,000.00 to the State of Texas (Parcel 1348). Parcel 134B is located at the northeast corner of Holiday Lane and Maplewood Avenue. COUNCILMAN LOMBARD MOVED TO APPROVE RESOLUTION NOS. 2011 -012, 2011 -013 AND 2011 -014 AUTHORIZING THE SALE OF CITY OWNED LAND IDENTIFIED AS PARCEL 150, PARCEL 152 AND PARCEL 134BE OF THE LOOP 820 CONSTRUCTION PROJECT AND AUTHORIZE THE CITY MANAGER TO EXECUTE A DEED OF SALE FOR SAME PROPERTY. COUNCILMAN BARTH SECONDED THE MOTION.. MOTION TO APPROVE CARRIED 7 -0. H.0 INFORMATION AND REPORTS H.1 ANNOUNCEMENTS Mayor Pro Tern Sapp made the following announcements. NRH2O is searching for team members who want a fun job this summer. Applicants must be at least 15 years old. For job descriptions, applications and more information, please visit nrh2o.com /jobs. Volunteers from AARP are continuing to assist residents with their tax returns each Monday through April 11th at the NRH Public Library. This free service is available to taxpayers of all ages. To make an appointment or get more information, please call the Library at 817 - 427 -6814. The Common Ground Community Garden is selling T- shirts, with all proceeds going into the garden fund. The shirts are $20 each. Visit the website nnccommunitygarden.com for an order form. Kudos Korner — Cary Sieve, Bobby Thomas and Michael Autrey, Fire Department. A resident called to thank Cary, Bobby and Michael for their assistance during a winter storm earlier this month. While returning to the station after a call, these employees noticed several vehicles stuck in the snow and ice on Harwood Road. They blocked traffic, shoveled snow to free the stuck vehicles, and helped them turn around and get moving again. These men went out of their way to help and are an asset to the city, the caller stated. H.2 ADJOURNMENT Mayor Trevino adjourned the meeting at 7:31 p.m. Oscar Trevino — Mayor ATTEST: Patricia Hutson, City Secretary CITY OF NORTH RICHLAND HILLS Department: Parks and Recreation Council Meeting Date: 3 -7 -2011 Presented by: Chris Swartz Agenda No. B.2 Subject: PU 2011 -009 Revise the FY2010/2011 Capital Projects Budget in the amount of $41,958 and Award the Bid for Replacement of the Green Extreme Switchgear to Hurst Electric in the amount of $41,958 Summary Council is being asked to approve a budget revision for the Capital Budget the amount of $41,958. These funds will be used to purchase and install replacement switchgear for NRH Family Waterpark's signature attraction, the Green Extreme. Funding is available in prior project savings. General Description NRH depends on the consistent delivery of electricity to operate its rides and attractions. The electricity comes from the generation and transmission equipment through the park's various transformers, routes through the electrical switchgear and then, depending on the required voltages and distribution schemes, is sent directly to the rides and attractions or is further distributed through panels. In basic terms, switchgear is a large version of the electrical panels found in homes. The switchgear for the park's signature attraction, the Green Extreme, is in need of replacement. This is the original switchgear installed when the attraction opened (June 1998) and due to the corrosive and humid environment in which it is housed, has deteriorated more rapidly than expected. It was originally planned to be replaced for the 2012 season, however given the accelerated deterioration, staff recommends moving forward with the replacement. The need to replace the switchgear this year was confirmed by an electrician during a recent inspection in which it was noted that the internal components of the switchgear were corroded. This switchgear is custom manufactured and requires weeks to assemble, deliver and install. If failure were to occur during the operating season, the ride would be closed for up to six weeks causing guest dissatisfaction and possible reduced attendance and associated revenue. The estimated cost for this replacement is $41,958. This includes removal of the existing switchgear and installation of the replacement switchgear. The new switchgear is of a more modern type and will use circuit breakers rather than the fuse based systems installed originally. Because it will be smaller, it will also be mounted higher away from the floor. This should help to lessen the environmental deterioration. Bids were received in accordance with approved policies and the recommendation is for the lowest bid who can meet the installation timeline which is before the park opens for the 2011 Season. Funding is available through previous project savings, but would need to be re- appropriated to project WP1101, a current year project. Recommendation To revise the FY2010/2011 Capital Projects Budget in the amount of $41,958 and award the bid for replacement of the Green Extreme switchgear to Hurst Electric in the amount of $41,958. Aquatic Park Capital Projects General Facility Improvements WP11O1 PROJECT DESCRIPTION & JUSTIFICATION Costs for additional construction such as drainage improvements, site improvements, miscellaneous building improvements or capital acquisitions are calculated and submitted on an annual basis. These costs also include safety improvements to/for the facility that are identified during the current operating season. The project also funds unforeseen equipment failures and emergency items necessary to operate the park. This project is important for emergency items and for general improvements to the park that are not included in the operating budget. items may include safety items, ride equipment replacement, new initiatives to improve guest service, guest safety and /or to provide more aesthetically pleasing surroundings. PROJECT STATUS Original 2010/11 Original 2010/11 Start Date Revision End Date Revision Engineering /Design 10110 10/10 09/11 09/11 Construction 10/10 10/10 09/11 09/11 REVISION EXPLANATION Add funding for Green Extreme switchgear replacement. FINANCIAL DATA Adopted Proposed Revised Total Funding Source Budget Thru Project Budget Thru Remaining Project 2010111 Revision 2010/11 Balance Cost Prior Funding Allocations: $60,000 $41,958 $101,958 $0 $101,958 0 0' 0 0 0 Total $60,000 $41,958' $101,958 $0 $101,958 Protect Expenditures Engineering $0 $0' $0 $0 $0 Construction 60,000 i 41,958P 101,958 0 101,958 Total $60,000 $41,9581 1 $o $101,958 IMPACT ON OPERATING BUDGET No operating impact is projected other than increased guest satisfaction. Annual Operating Impact 2010/2011 2011/2012 201212013 2013/2014 2014/2015 Total Projected $0 $0 $0 $0 $0 $0 CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Agenda No. C.0 Subject: PUBLIC HEARINGS CITY OF NORTH RICHLAND HILLS Department: Planning and Development Council Meeting Date: 3 -7 -2011 Presented by: John Pitstick Agenda No. C.1 Subject: SUP 2010 -07 Public Hearing and Consideration of a Request from Arfa Group LLC for a Special Use Permit (SUP) for an Auto Rental business at 7109 Boulevard 26. (Requested continuance by applicant) Case Summary: Matthew Arfa the owner of Richland Shopping Center at 7109 Boulevard 26 is making a special use permit request in a C -2 Commercial district to allow for offices for Allied Rent a Car. All auto, truck and trailer rentals require a special use permit in the C -2 district. The purpose of the special use permit includes the allowance for special conditions that may need to be considered to reduce the adverse affects on adjacent or surrounding properties. Conditions related to SUP approval shall be evaluated by the Planning & Zoning Commission and City Council as to its probable effect on the adjacent property and the community welfare and may be approved or denied as the findings indicate appropriate. There are 21 separate items in the SUP regulations that can be considered as standards or conditions for approval. The Richland Shopping Center is currently deficient in landscaping, signs and parking setbacks from a public street. Staff and the Development Review Committee have had conversations with Mr. Arfa encouraging some upgrade of the center as part of this SUP request. Currently the Richland Shopping Center is an older non conforming shopping area along Boulevard 26 with a pole sign, no landscaping and asphalt parking up to the right of way. Staff has encouraged the owner to consider reducing at least some of the non conformities by upgrading the building fagade, replacing the pole sign with a monument sign or adding some landscaping. Staff has also notified the owner of the City's business incentive & growth program (BIG) which allows for a 25% match of funds for exterior improvements up to $20,000 and also includes additional funds for the removal and replacement of non conforming signs. The owner has responded that potential improvements would cost about $20,000 and since many spaces are vacant, the shopping center is not generating enough revenue and is requesting the rental car use to be a catalyst for improvement without any improvements. Staff has also indicated that similar requests in the past few years have been required as part of the SUP approvals by City Council. Most recent SUP requests that have been approved with significant upgrades include: SUP 2008 -06 Chuck E. Cheese's expansion SUP 2008 -08 Jerry Conger's Paw Spa SUP 2009 -04 Rock `n Roll Offroad SUP 2010 -05 Goheen Industries To be consistent with recent past SUP approvals and based on the current non conformity with a pole sign and inadequate landscape buffers, the owner has been informed that staff would not recommend approval of this request without at least making some improvements to begin to conform to current regulations. Staff Recommendation: Staff recommended denial of SUP 2010 -07 prior to the P &Z public hearing because the addition of a rental car agency without some conforming site improvements to the existing Richland shopping center will not improve adjacent properties and will not generally benefit the community welfare. Planning & Zoning Commission Recommendation: The Commission met on February 17, 2011 and recommended approval after much discussion with the stipulation to remove the pole sign and establish minimum of 5 ft green space or landscaping on both sides of the drive with 18 foot width of landscaping with monument sign and irrigation. The applicant has agreed to make some changes to the site as a result of discussion at the P &Z Commission meeting and has requested a continuance of the public hearing before the City Council until May 23, 2011 to allow him to develop a site plan. i 1 LOCATION MAP O "rO G lenview D r AW i� J� i AERIAL PHOTO ILL Glenview Dr ca r rs t� ` i v ; x r . ' c ' LETTER FROM APPLICANT LLicia RENT A CAR 1333 S. MAIN STREET SANTA ANA, CA 92707 TEL: 714 - 8354990 / FAX: 714 - 8354944 City of North Richland Hills Planning & Development Department 7301 Northeast Loop 820 North Richland Hills, T X 76182 February 18, 2011 Re: Case SUP 200 -07- Special Use Permit, Allied Rent -A -Car, 7109 Blvd. 26 To Whom it May Concern: Thank you for approving the Special Use Permit for Allied. In order to be better prepared with the required exhibit, we would like to request the City Council hearingto be moved to a date in May 2011 instead of on March 7, 2011. Please update and provide a revised letter with the new date. If any further information or materials is needed please feel free to contact me at 714- 726 -9909 or my assistant Ariana Rosales at 714 -689 -9966. Thank you, Matthew Arfa CEO PROPERTY OWNER NOTIFICATION ` cH NOTICE OF PUBLIC HEARING CITY OF NORTH RICHLAND HILLS PLANNING AND ZONING COMMISSION TExPS AND CITY COUNCIL Case #: SUP 2010- 07 Applicant: Arfa Group LLC Location: 7109 Boulevard 26 You are receiving this notice because you are a property owner of record within 200 feet of the property shown on the attached map. Purpose of Public Hearing: A Public Hearing to Consider a Request from Arfa Group LLC for a Special Use Permit for an Auto Rental business at 7109 Boulevard 26. Public Hearing Schedule: Public Hearing Dates: PLANNING AND ZONING COMMISSION THURSDAY, FEBRUARY 17, 2011 If recommended for approval by the Planning and Zoning Commission, this zoning request will be heard by the City Council on: CITY COUNCIL MONDAY, MARCH 7, 2011 Both Meeting Times: 7:00 P.M. Both Meeting Locations: CITY COUNCIL CHAMBERS 7301 N. E. LOOP 820 NORTH RICHLAND HILLS, TEXAS If you have any questions or wish to submit a petition or letter concerning the above request, please contact: Planning Department - City of North Richland Hills 7301 Northeast Loop 820 North Richland Hills, Texas 76180 Phone (817) 427 -6300 Fax (817) 427 -6303 LIST OF NOTIFIED PROPERTY OWNERS Arfa Group LLC Shaban, H A G & S Investment Co Ltd PO Box 10074 401 N Beach St PO Box 100112 Santa Ana Ca 92711 -0074 Fort Worth Tx 76111 -7011 Fort Worth Tx 76185 -0112 Leroy T Thatcher Wainwright Apartments LLC World Bible Translation Ctr 7101 Boulevard 26 2663 Fallbrook Dr PO Box 820648 NRH Tx 76180 -8607 Merced Ca 95340 -8308 Fort Worth Tx 76182 -0648 Republic Western Ins Co Decasas Properties LLC Lisa Stevens PO Box 29046 5005 Caliente Dr 4100 Daley Ave Phoenix Az 85038 -9046 Arlington Tx 76017 -3428 Fort Worth Tx 76180 -8638 Stanford Alma Walgreens LP Planning and Community 104 Wilmot Rd # 1435 Development Deerfield 11 60015-5121 3200 Diana Drive Richland Hills, TX 76118 EXHIBIT 131.46' --- - - - - -- ---- - - - - � o I I � op ara oil i for AM d Rmo-A- Car ; •; x \ J 0 I RICHLAND CENTER PARKING LO T 10.6 \ / 44' Richland Shopping Center SCALE: 1" = 10' -0" ALLIED RENT -A -CAR (ARFA GROUP LLC) 7104 BOULEVARD 26 NORTH RICHLAND HILLS, TX. 76180 WALKER, A G ADDITION LOT: 4 BLOCK: I LOT SIZE: 25,700 SQ.FT. Intended Purpose: There are 23 existing parking spaces in the Richland Center parking lot. Allied Rent -A -Car proposes to move into suite #16 of Richland Center with the intent to reserve 4 adjacent parking spaces for rental vehicle parking. The roughly 575 sq.fC. of office space is to be used as a satellite office only No servicing, washing, etc. of vehicles will be performed at this location. The existing building signage is to be replaced with Allied Rent -A -Car signage. No other alteration to the existing building or signage is required at this time. NORTH GRAPHIC SCALE ( lE FEET i arch - 10 fL To have this plot plan print at the shown scale, be sure to use no greater than .5" margins EXCERPT FROM THE MINUTES OF THE FEBRUARY 17, 2011 PLANNING AND ZONING COMMISSION MEETING SUP 2010 -07 Public Hearing and Consideration of a Request from Arfa Group LLC for a Special Use Permit for an Auto Rental Business at 7109 Boulevard 26. John Pitstick came forward and stated that this is a request for a special use permit for Allied Rental Car. Basically in our current regulations all auto, truck and trade or rentals require a special use permit in the C -2 district. The purpose of the SUP includes the allowance for special conditions that may need to be considered to reduce the adverse affects on adjacent or surrounding properties. Conditions related to the SUP approval shall be evaluated by the Planning & Zoning Commission and the City Council as to its probable affect on the adjacent property and the community welfare. It may be approved or denied as the findings indicate appropriate. There are 21 items that are listed in our special use permit as items that could be or should be considered. The standards or conditions for approval of the SUP. Currently the Richland Shopping Center is deficient in landscaping, they have a pole sign and parking setbacks on the street. This is an older area of town and it is a revitalization area and certainly staff is encouraged about trying to promote businesses in this area however based on the non - conformities with the pole sign, no landscaping and asphalt parking right up to the right of way. Staff has recommended to the developer that at least something be brought into conformance. In the past 4 years we have had 4 cases of similar SUP's similar to this and in all cases the city council has approved those but with the stipulation that at least some conformities be made to the property. We have talked to the owner and have made him aware of our business improvement and growth program that allows for improvements to the signs and to the fagade of the building. The city would reimburse improvements up to 25% match. Staff is recommending denial of the SUP primarily because without some conforming site improvements we don't think that the center will improve the adjacent properties or be a benefit to the community welfare at that point. It is not that we are against the use but we are doing everything that we can do to revitalize that area. Matthew Arfa, Newport, California came forward as applicant. Bill Schopper asked what he proposed to do to the site in regards to improvements? Matthew Arfa said that we bought the building back in 2007 and were told that the area is actually improving but we haven't been able to get any kind of tenant in the property. So we are trying to put the business that we have in California and put a branch or satellite office with a few cars in that location. That allows us to put one of our employees here and gives us some more cash flow to start improving the property. At this point we are in a negative cash flow every month and since we have been running this way for the past few years there isn't any funds for us to do any improvement to the property. Even though the city is paying 25% we would still have to come up with 75% and everything that needs to be done is going to cost around $20,000 to $30,000. We are trying to create some cash flow and in the mean time get the center a little more occupied so we can encourage other businesses to come in. The businesses that come in are new businesses that end up closing after a few months. That area of town there isn't a lot of traffic and it is very difficult to get tenants in and keep them. Public Hearing opened 7:07 pm With none wishing to speak public hearing closed at 7:07 pm Don Bowen said that unless the applicant is willing to consider some type of improvements right now then I move that we deny this request. I think that we need to remain consistent on the requirements for improvements for Boulevard 26. Mike Benton seconded the motion. Bill Schopper opened discussion on the denying the request. I know in my opinion it seems counter intuitive to deny this request on a soft part of the city south of 820. That is a real rough part of the city and what we are trying to do is change that area by making things nicer. Is there anything aesthetically you could do out by the street or change the sign? Matthew Arfa said that he is willing to make changes and that is why I am interested in opening a business in there. This would give us more opportunity to start making improvements to the building. We are going to change the doors and we can go ahead and change the signage. But if you allow us to put the business and start making the improvements as we go so it gives us more funds to get it done. This would allow us to make it look better and create more tax revenue for the city instead of just being a vacant property. Bill Schopper is there any specific improvements that you propose? Matthew Arfa said that he proposes to get it started and try to do things that don't accrue too much expense such as painting the entire building to make it look better. We have been putting money into the building. We have replaced the roof and replaced the new air conditioning equipment. Since we have purchased the building it has cost us over $50,000 in improvements. I am open to suggestions to get this thing going. Mike Benton said that he knows you are from California and one of the things that we are doing in this area is revitalize this entire area. We even changed the name to Boulevard 26. We are hoping that it will one day be a beautiful street. If we start cutting back on our requirements for you and others than we are not going to get the full feel of what we originally wanted for Blvd 26. We had some standards that we had set and I feel that if you aren't going to take the pole sign down and improve the outside, putting in landscape buffers and some of the main requirements that we have established than I don't think I can approve that. Bill Schopper said that when you look at the last few folks that we have required them to make those changes and they spent the money to get it done. Chuck E Cheese's expansion, The Paw Spa, Rock and Roll Offroad. There are a bunch of them that have done that and if you look at the aerial your pavement goes right up to the side of the road. That is one of the things that we are trying to accomplish by breaking up by placing some green landscaping in. I don't know how difficult it would be to allow a green space along that road and lose the pole sign. If we could do something with the setback and the signs, but I agree with the others that I'm not willing to compromise our standards that we have set for Blvd 26. Matthew Arfa said that he does want to do the improvements but we are not Chuck E Cheese and those have a lot more money than we do. I want to put as much money as possible in there but again if you look at that whole area like across the street from us. It became an empty vacant building now and has been vacant for 2 years. Bill Schopper said that across the street is in a different city. Matthew Arfa said that the building on the left hand side is an empty lot and has been that way for over 2 years and the one on the right hand side used to be UHaul and is now empty. That whole area is becoming empty and we are trying to do something for the shopping center to get tenants in there and make that area more lively. We can change the sign and around the sign we can put grass. Dianna Madar asked if they are willing to make the improvements if we are to approve the SUP on that basis or later? Matthew Arfa said that they could commit to making the change in the sign and around the sign put a grass area and landscaping to start. It is our property and we want it to look better but we have to have the funds available to do that. Bill Schopper asked John Pitstick what is required as far as setback and greenbelt? Could you point out on the aerial what would have to be moved ? John Pitstick said that typically if you look up and down Boulevard 26 you don't normally see the full 15 foot landscape buffer. We realize that it was built a long time ago. I think that the primary issue would be from the city council would be the sign. The sign is the biggest visible issue. If we could a monument sign down there and maybe get some landscaping around the monument sign in that area that would be a good start. If we could get 5 foot of landscaping or something like that. I realize that 15 feet of landscaping would just destroy the driveway. If we could remove the pole sign and get a monument sign that is to code and get some adjacent landscape around there. I think that would be a good start. If he begins to get some income then there is also some programs available to him and he can get reimbursed for a portion of the improvements that he makes to the actual building. The BIG program actually pays for the removal of the sign and then they could get reimbursed a portion of the new monument sign. Mike Benton asked if we do approve some minimal standards like that our hands are tied as far as having him improve it beyond that or are we locked in to what is approved? John Pitstick said that if he expands the building or does any changes in the building than he would have to conform or come back to request a variance. There are many non conforming areas and I think that the two biggest issues would be removing the pole sign and putting up a new monument sign and landscape in that area. We would also just encourage Mr. Arfa to make changes to the building such as fresh paint etc. We can't necessarily require it but we could certainly encourage that. Mike Benton asked if there is a sidewalk required in that area along the curb? John Pitstick said that potentially there could be a requirement for sidewalks. That is difficult for us to determine unless there are any changes to the roadway I don't know how we would get many sidewalks in that area. The Boulevard 26 study isn't really a walkable area like Hometown. It is based on roadway requirements and sidewalks right there on the street may not be able to happen. Don Bowen said that Boulevard 26 is a State Highway. John Pitstick said yes. That is correct. Bill Schopper asked if we would like to amend the previous motion? Don Bowen said that if the staff is satisfied, I feel like I can amend my motion if he will remove the pole sign and there should be funds to help with that. Establish a minimum green space. Does anyone have any suggestions on defining the amount of space? Mike Benton said if we put 5 -7 foot of grass off of that curb will that eliminate some parking that is needed? Matthew Arfa said yes. Mike Benton said that there is no way that they would be able to do that. Matthew Arfa said no. We are limited on the amount of parking that we have. Bill Schopper asked about the landscaping on the sign? Matthew Arfa said that we could do that. Bill Schooper asked how much space would you anticipate? Instead of taking these spaces where there is head in parking if we went to another place and put a sign ? Matthew Arfa said that it would be equal to 1 Y2 parking spaces. That would be the amount of landscaping that we could put around the sign. Mike Benton asked about on the east end of the corner of the street. Is there any room there for landscaping? Bill Schopper said that he could see cars backing out right into it. Mike Benton said that he didn't want to see a bunch of asphalt. I would like to see some landscaping. Matthew Arfa said that area is where the dumpster and garbage trucks will be going. Don Bowen said that he thought that they are talking about the area by the snow cone stand. Mike Benton said yes. Don Bowen said that if you put it over there you would still lose those 3 parking spaces because you wouldn't be able to get in them. Bill Schopper said that if you angled them in it might be alright. John Pitstick said that if we could get the monument sign in the front area and some landscaping and not interfere with any parking. All the parking by the building is still good. We wouldn't ask for 10 or 15 feet but just what we could get in that area. That would be a significant improvement. Bill Schopper said that they will have a rental car business in there and it is going to be busy with cars. Matthew Arfa asked if there would be anyway that he could do some landscaping up by the building. Mike Benton said that he would really like to see more toward the street. Matthew Arfa said that this where the sign is and we can do the landscape around the sign. That wouldn't take away the parking spaces that we have. Bill Schopper said that car folks generally want their cars by the road so people can see them. Matthew Arfa said that we would go down from the 4 spaces they have now to 3 spaces so it would take one space to do the landscape. Mike Benton said that when you go down Rufe Snow and see the Enterprise Rental Care do they have a landscape buffer? Don Bowen said that the Enterprise just south of here does. Mike Benton do we know how much of a buffer is there? John Pitstick said that is probably 5 -10 feet. Matthew Arfa said that Enterprise Rent a Car has a free standing building. That is the only business that is on that lot. We are talking about a shopping center that has 18 stores in there. Every single parking space counts. Dianna Madar said that towards the right there aren't any parking spaces towards the road. Bill Schopper said that if you are parking head in you aren't going to be able to back out without it being in the way. Dianna Madar said that she would like to see a business there rather than an empty building but still stay conforming to the plan. Mike Benton said that he is looking to the future for Boulevard 26. We as citizens will be living here and he won't be here and could possibly sell the property and we would be stuck with nothing done. Matthew Arfa said that they would like to do whatever is possible to the property because it is our property. Right now we are running on negative cash flow and we would like to change it and we want to get as much done as possible. Mike Benton said that he isn't trying to pick on him but just trying to think of what would be the best solution for our community. We have set some standards. Matthew Arta said that it would make it better than it is now. Anything that would bring traffic into this area would be good. Mike Benton said that we are making improvements and there used to be a business on the corner of Glenview and Blvd 26 that has now been torn down. This is the main area that needs to be revitalized. Bill Schopper asked if we can take the sign down and replace with monument sign and give us those 2 parking spaces as green area? Matthew Arfa said yes. Bill Schopper asked if that is something that everyone can live with or do they want the entire frontage? Mike Benton said that he liked John's depiction of what they could. Bill Schopper said that this area is a zero lot line and there isn't a lot they can do with it. I have had rental car agencies as tenants before and it will overwhelm the shopping center. Mike Benton said that on the other side of the drive where there isn't any parking. Is there anyway you could put some landscape there? Matthew Arfa said that we could put a small area of landscape there. If it is too big then it would block cars from passing. Don Bowen said that we can establish 5 feet back from the curb for landscaping. Bill Schopper on the other side of the driveway and around the sign and make them look the same. Mike Benton said that they would need to look the same. Bill Schopper said that it would be an improvement. Mike Benton said yes. With the monument sign. Matthew Arfa asked if they wanted it 5 feet from the curb? Bill Schopper said that you would have to figure out where your property line is. Don Bowen asked if that would still allow space for a car to pass? Matthew Arfa said yes. Mike Benton asked what the requirements for the buffer area, is it curbed completely around? Mow would that be constructed? John Pitstick said that you would have to have a landscaped area. The smaller it is the harder it will be to maintain. We would normally require it to be irrigated and in parking lots when we require 5% of a parking lot to be landscaped we normally encourage them to bunch it in big areas so that you can maintain it better that way. Don Bowen said that we are going to take the pole sign out and we have 5 feet back , how wide are we going to require. Bill Schopper said the width of 2 parking spaces. Mike Benton said 18 feet. Bill Schopper said yes. Matthew Arfa said that where the sign is now is taking one parking space so we could use that and 1 more additional space and use that. Bill Schopper said that you can take the monument sign between the two parking spaces and place it in the middle of the landscaping. We would like to figure out a way to irrigate it. You can do that as time permits. Matthew Arfa said that they will run irrigation to it. APPROVED SUP 2010 -07 Don Bowen motioned to approve SUP 2010 -07 with the amendments to remove the pole sign and establish minimum of 5 ft green space or landscaping on both sides of the drive with 18 foot width of landscaping with monument sign and irrigation, seconded by Mike Benton. The motion carried unanimously (5 -0). CITY OF NORTH RICHLAND HILLS Department: Planning and Development Council Meeting Date: 3 -7 -2011 Presented by: John Pitstick Agenda No. C.2 Subject: ZC 2011 -02 Public Hearing and Consideration of a Request from Janet Hallman for a Zoning Change from AG Agricultural to R -1 Single Family on Lot 2, Block 1, French Addition located at 8808 Amundson Drive - Ordinance No. 3131 Case Summary: The property owner, Janet Hallman, is requesting a zoning change on a 0.782 acre parcel from AG (Agricultural) to R -1 (Single family). The applicant desires to operate a counseling business in the home. Although this is an approved home occupation according to the Code of Ordinances, home occupations are not permitted in the AG district. This change in zoning would accomplish both the goal of bringing the business activity on the property into conformance as well as properly zoning a single family home. Background: The property at 8808 Amundson is currently designated Agricultural and has never been zoned. The applicants, Mr. & Mrs. Hallman have purchased the property which includes a .782 acre parcel and approximately 1,700 square foot older home that is likely to have been built in the 1950's. Building Inspections has approved some remodeling permits within the past year that included remodeling of approximately half of the building. A couple of the neighborhood residents were present to speak at the zoning request with concerns over the Hallman's not living in the residence but utilizing the building for the counseling business. Staff pointed out that the structure would have to be used as a permanent residence before any customary home occupation could be allowed and this would be enforced and any complaints would be investigated. We understand that the primary residence for the Hallmans is in Fort Worth and they spend time daily in the Amundson home. Current regulations do not specify primary residence as a requirement under the zoning regulations. Staff has pointed out to the Hallmans that the definition for "Dwelling unit means a room suite or set of rooms occupied, or suitable for occupancy, as a family residence and having sleeping, kitchen and bathroom facilities together with appropriate appurtenances and designed for use and used as a permanent residence for one family." Currently the home is only partially remodeled and may need further remodeling to be suitable for a permanent residence that clearly distinguishes the counseling business as an incidental use to the permanent residential home. At this point staff is supportive of the rezoning from Agricultural to R1, but has some concerns regarding the proposed use as a customary home occupation. From a principal standpoint staff is opposed to rezoning the property to a residential use (R1) if the primary intended use is essentially of a commercial nature. Staff also believes that a review of the City's customary home occupation regulations would be beneficial to clarify the rules in situations such as this case. Plat Status: This parcel has been previously platted as Lot 2, Block 1, French Addition. Existing Site Conditions: There is an existing residential structure located on the triangular shaped lot. Comprehensive Plan: The Comprehensive Plan depicts low density residential uses for this area. Thoroughfare Plan: The lot has frontage on Amundson Drive which is designated as a C4U, Major Collector Street. Surrounding Zoning / Land Use: North: Railroad Right -of -Way East: AG & R -2 South: AG West: AG & R -1 Planning & Zoning Commission Recommendation: The Commission met on February 17 and recommended 5 -0 to approve ZC 2011 -02. Staff Recommendation: Approval of Zoning Change request ZC 2011 -02. LOCATION MAP IT i 1 J, _ r C� i� 1 y y ' •y y r , AERIAL PHOTO Ln O a T Z� r � �r .... v N. x �. � 5 vr�• a � .t LETTER FROM APPLICANT February 25, 2011 To Whom It May Concern: We have been asked by Mr. John Pitstick to write a letter explaining why we qualify for re- zoning our home at 8808 Amundson Drive from AG to R1. This request was approved by the Planning and Zoning Commission on February 17, 2011. In 2010, we decided to buy a home in Nortl Richland Hills. At that time, our oldest child had been attending Birdville ISD for about 2 years (Kindergarten and 1" grade), in the open enrollment program. We were very impressed with the school and knew that we wanted permanent residency in North Richland Hills to enable both of our children to attend this school district until they graduate. Since they attend school in the BISD, we were spending a lot of time in NRH. We wanted a home so that we can be close to the school, attend school functions, and be closer to the kids' friends. We bought our home in NRH, due to its proximity to their school, the nearby park, and the walking trail. We were impressed with the low crime rates in the area, as well. We feel that our home is in a safe neighborhood. Our home was in disrepair when we bought it. We have coordinated with Penny Peterson during the planning and remodeling of our home. We have obtained permits for all of the remodeling and have passed all inspections to qualify as a residence that is livable. We conduct our lives as any other citizen. Our home has a living room, bathroom /shower, bedroom, closet, dining room, and kitchen facilities to store cold food and cook. We believe there has been some confusion that we were using our home as a commercial occupancy. This is not the case. Janet is a psychologist, and her area of specialization is Infant Mental Health, meaning that she often works with very young children, age birth through 6, and their families. Counseling services will be limited in one multi- purpose room of our home. The primary use of this occupancy is a single family residence. The counseling work will be a secondary use. Please grant our request for re- zoning of 8808 Amundson Drive from AG to R1. We are using our house as a home and do not intend to use it as a farm Our request was approved by the Planning and Zoning Commission on February 17, 2011. Thank you, X Jan and Doug Hallman O PROPERTY OWNER NOTIFICATION NOTICE OF PUBLIC HEARING °.z CITY OF NORTH RICHLAND HILLS ti PLANNING AND ZONING COMMISSION TEXPS AND CITY COUNCIL Case #: ZC 2011- 02 Applicant: Janet Hallman Location: 8808 Amundson Drive You are receiving this notice because you are a property owner of record within 200 feet of the property shown on the attached map. Purpose of Public Hearing: A Public Hearing to consider a request from Janet Hallman for a zoning change from AG Agricultural to R -1 Single Family on Lot 2, Block 1, French Addition located at 8808 Amundson Drive. Public Hearing Schedule: Public Hearing Dates: PLANNING AND ZONING COMMISSION THURSDAY, FEBRUARY 17, 2011 If recommended for approval by the Planning and Zoning Commission, this zoning request will be heard by the City Council on: CITY COUNCIL MONDAY, MARCH 7, 2011 Both Meeting Times: 7:00 P.M. Both Meeting Locations: CITY COUNCIL CHAMBERS 7301 N. E. LOOP 820 NORTH RICHLAND HILLS, TEXAS If you have any questions or wish to submit a petition or letter concerning the above request, please contact: Planning Department - City of North Richland Hills 7301 Northeast Loop 820 North Richland Hills, Texas 76180 Phone (817) 427 -6300 Fax (817) 427 -6303 LIST OF NOTIFIED PROPERTY OWNERS Doug Etux Janet Hallman Scott D Brandt Kimberly Etvir Douglas Garber 7308 Trice Ct 8908 Amundson Or 6912 Clift St Fort Worth Tx 76120 -1608 NRH Tx 76182 -4204 NRH Tx 76182 -4207 Craig K Stone Perry Etux Donna Wright Edith M Thames 6904 Clift St 6920 Clift St /o Kory Thames NRH Tx 76182 -4207 NRH Tx 76182 -4207 6271 Gayle Or NRH Tx 76180 -4725 Scott D Etux Carol R Brandt Kenneth M Etux Leah J Murrah M Ray Etux Carmen Mitcham 8908 Amundson Or 8900 Amundson Or 8661 Madison Or Fort Worth Tx 761824204 NRH Tx 76182 -4204 Fort Worth Tx 76182 -3670 Regional Rail Row Co Derek A McKean Troy Etux Gay Morrison Attn: Dallas Area Rapid Transi 8804 Amundson Or 7005 Eden Rd PO Box 660163 Fort Worth Tx 76182 -4203 NRH Tx 76182 -3202 Dallas Tx 75266 -0163 Adiene Jones PO Box 821508 NRH Tx 76182 -1508 ORDINANCE NO. 3131 ZONING CASE ZC 2011 -02 AN ORDINANCE AMENDING THE COMPREHENSIVE PLAN AND THE COMPREHENSIVE ZONING ORDINANCE OF THE CITY OF NORTH RICHLAND HILLS; AMENDING THE ZONING MAP OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, AND REZONING A 0.782 ACRE TRACT OF PROPERTY FROM AG (AGRICULTURAL) TO R -1 (SINGLE FAMILY RESIDENTIAL) ZONING; ESTABLISHING A PENALTY; PROVIDING FOR PUBLICATION; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, notice of a hearing before the Planning and Zoning Commission was sent to real property owners within 200 feet of the property herein described at least 10 days before such hearing; and, WHEREAS, notice of a public hearing before the City Council was published in a newspaper of general circulation in the City at least 15 days before such hearing; and, WHEREAS, public hearings to zone the property herein described were held before both the Planning and Zoning Commission and the City Council, and the Planning and Zoning Commission has heretofore made a recommendation concerning the zone change; and, WHEREAS, the City Council is of the opinion that the zone change herein effectuated furthers the purpose of zoning as set forth in the Comprehensive Zoning Ordinance and is in the best interest of the citizens of the City of North Richland Hills; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: Section 1: THAT the Comprehensive Plan, the Comprehensive Zoning Ordinance and the zoning map of the City of North Richland Hills are hereby amended by rezoning a 0.782 acre tract of land located in the City of North Richland Hills, Tarrant County, Texas, more particularly described in the legal description attached hereto as Exhibit A from AG (Agricultural) to R -1 (Single Family Residential) zoning. Section 2: Any person, firm or corporation violating any provision of the Comprehensive Zoning Ordinance as amended hereby shall be deemed guilty of a misdemeanor and upon final conviction thereof fined in an amount not to exceed Two Thousand Dollars ($2,000.00). Each day any such violation shall be allowed to continue shall constitute a separate violation and punishable hereunder. Section 3: The City Secretary is hereby authorized and directed to cause the publication of the descriptive caption and penalty clauses of this ordinance as an alternative method of publication provided by law. Section 4: This ordinance shall be in full force and effect immediately after passage. AND IT IS SO ORDAINED. PASSED AND APPROVED on this 7th day of March, 2011. CITY OF NORTH RICHLAND HILLS By: Oscar Trevino, Mayor ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: George A. Staples, City Attorney APPROVED AS TO CONTENT: John Pitstick, Planning & Development Director EXHIBIT A DLSCRIPTION OP PROPERTY Being Lot 2. Block 1. French Addition, being an addition to the City of North Richland ]-]ills. Tarrant County. Texas. according to the plat thereof recorded in Volume 388 -157. Page 80. Plat Records. Tarrant County. Texas. and being more parlicularly described as follows: BEGINNING at a point being. located 562.2 feet West and 438.5 feet South of the northwest property corner of Lot 6. Dawn King. Addition. Smithfield- Tarrant County. Texas according to the plat recorded in Volume 388 -TA. Page 105. Deed Records, Tarrant County. Texas; THENCE West 39.0 feet ton point: THENCE North 27 degrees 33 minutes 55 Seconds West a distance of 273.25 feet to a point in the southerly rwhl -of -way line of Amundson Road: THENCE. North 55 deurees 49 minutes East. alone said right -of way line of Amundson Road a distance of 200.0 feet to a point: T11ENCF South a distance of 354.6 PLACE OF BEGINNING and containing 0.782 acres of land. ZONING EXHIBIT 4 mm too f yyww �� � t• F € � it PROM AC PO 1` LdT 18i�'. t FRENCH ADDMOM AlL i�l - ',s ✓.s OfR,M�� `•! ci" ---- _----- _-- - - - - -� mo w„,. . "a....... °w •. ,r_. .. s_, - iAi M EXCERPT FROM THE MINUTES OF THE FEBRUARY 17, 2011 PLANNING AND ZONING COMMISSION MEETING ZC 2011 -02 Public Hearing and Consideration of a Request from Janet Hallman for a Zoning Change from AG Agricultural to R -1 Single Family on Lot 2, Block 1, French Addition located at 8808 Amundson Drive. John Pitstick came forward and stated that this is a request for a lot currently zoned AG to R -1 Single Family. The property owner Janet Hallman is requesting a zoning change for approximately .7 acres. Currently there is a house on the property and they would like to live in and operate it as a customary home occupation. In customary home occupation there can be no visible signs or activity that there is a business there. Staff is recommending approval of this request. If it was new the house does not meet all of the requirements and is a frame and brick house on that lot but by rezoning it to R -1 that establishes it as a residential lot and any improvements would have conform to the R -1 district standards. Janet and Doug Hallman, 8808 Amundson, NRH, TX 76180 came forward and stated that they purchased the property in 2010. There was a little old farm house that was built in the 1950's. We did a remodel job on about half of it which was about all we could afford. It is zoned AG and we can't use it for that. We don't have the real legal acreage for Agricultural and we would like to use it as a home. We live in it, eat in it and sleep there sometimes. This is not our primary home. We use the bike trail and our kids go to school in that area. My wife is a Psychologist and provides a service and would like to use it as a home occupation as well. Janet Hallman stated that her specialty is very young children aged birth to age 6. 1 see children and their parents sometimes. It is very low volume and I see maybe 10 to 12 people a week. It is not very busy and I don't foresee having a lot of people there. I do not see sex offenders or drug addicts or severe mental illness patients. It would be safe. It would be fairly transparent and the neighborhood probably wouldn't even know it was going on to the neighborhood. There will not be any signage. Public Hearing opened 7:31 pm Ginger Burton, 6921 Clift Street, NRH, TX 76180, came forward and stated that she is not against the rezoning to residential but my concern is the business aspect of it. Are there rules in the city whether it must be a primary residence in order for you to run a business out of it? The reason I ask that is because I don't think that they are living there full time now. It appears that it was bought specifically for the purpose of running this business out of it rather than using it as their residence and home occupation. John Pitstick said that the R -1 requires a residential property. The customary home occupation would be allowed as long as there is no evidence of the home occupation. The property is maintained as a residence. It is established as a residential property. Bill Schopper said that it is a residential property but you don't have to live there? John Pitstick said that it would be very difficult to enforce that. It has to be maintained as a residence. It has to have restrooms, kitchen etc. Ginger Burton asked if they had to maintain this as their primary residence? They can live in another part of the city and just come there 3 days a week and conduct business? Is that the city regulation? John Pitstick just said that it just has to be established as a residential property. Ginger Burton said that the city is not concerned that they aren't living there full time? John Pitstick said that we cannot determine where and when someone is living there but I will say that if we get a call and complaint and there are 5 cars parked out there and it is a nuisance or there is a sign in the window then we will shut them down from the business perspective. Jane Munoz, 6901 Clift, North Richland Hills, TX 76180. Does it have to be a residence? Will you go in and inspect that they have remodeled the whole thing and that half of it isn't just a shell of the house and the rest of it for the business? Because right now I don't think that it has restrooms or kitchen facilities or anything like that in the house. I believe that has been gutted. Would it have to be completed? John Pitstick said yes. Jane Munoz asked in order for them to run their business even if they do not live there all the time they have to complete it to be like a house with all of the facilities. John Pitstick said that the primary use would have to be a residence. Jane Munoz asked if they would have to finish the remodel? John Pitstick said that it is hard for me to say because I have not been in the house. It would have to be occupied as a residence with full residential facilities. Jane Munoz said that right now she doesn't think that it is a full residence with all of the facilities. Don Bowen said that if there is a major remodel there had to be a permit from the city for the work. The permit would have to be signed off by the inspector. Mike Benton asked if there is a Certificate of Occupancy required? John Pitstick said no. We don't issue Certificate of Occupancy for houses. Doug Hallman said that the building that we bought was pier and beam. We only remodeled about 900 square feet. We did put a full bathroom with shower and we have a kitchenette with refrigerator, sink, and microwave. Janet Hallman said that it is set up in the old part of the house that isn't fixed up to have the refrigerator and stove. We can have it in there but we don't have it installed now. We don't use it very often. I shower there and I exercise across the street. I bring my pets and my children there. We have a TV and we use it as a residence. Bill Schopper asked if they obtained a permit to do the work? Janet Hallman said yes. It has all been inspected and passed the final inspection. Mike Benton asked if they are residing there? Doug Hallman said no. We do not live there full time but we spend a great deal of time there and I would say that we are there 7 days a week. Janet Hallman said that they are there everyday and we have slept there also. Public Hearing closed 7:37 pm APPROVED Mark Haynes motioned to approve ZC 2011- 02, seconded by Don Bowen. The motion carried unanimously (5 -0). CITY OF NORTH RICHLAND HILLS Department: Planning and Development Council Meeting Date: 3 -7 -2011 Presented by: John Pitstick Agenda No. C.3 Subject: ZC 2011 -01 Public Hearing and Consideration of a Request from Brian James for a Zoning Change from AG Agricultural to R -1 Single Family on Tract 2T, Abstract 1055 located at 6832 Clift Street - Ordinance No. 3130 Case Summary: The applicant, Brian James, is requesting a zoning change on a 2.237 acre parcel from AG (Agricultural) to R -1 (Single Family). Mr. James is proposing to divide the tract into three lots for the construction of single - family homes. He plans to build his personal home on one of the lots and sell the remaining two. Background: Mr. James originally purchased the 2.2 acre parcel to construct two single family homes. Following extensive cleanup of the property Mr. James realized that there was significant property to allow 3 large R1 lots of .95 acre, .648 acre and .57 acre lots. Mr. James does not have interest in utilizing the property for R1 S zoning that would allow for livestock and barns. A couple of the surrounding property owners requested at the Planning & Zoning Commission hearing to require 1 acre lots. However, the Comprehensive Plan stipulates low density residential zoning and there have been rezoning in the area to R1 zoning. Plat Status: This parcel has not been platted. A preliminary plat for the three proposed lots is running concurrent with this zoning request. Existing Site Conditions: The former single family home on the parcel has been demolished and removed. The southern and eastern portions of the property are densely wooded. Comprehensive Plan: The Comprehensive Plan depicts low density residential uses for this area. Thoroughfare Plan: The proposed lots have frontage on either Clift Street or Walter Road, both designated R2U local streets. (The applicant has requested that the city consider changing the current street designations on the Thoroughfare Plan to a new designation called a Rural Street. This request is separate from the zoning case.) Surrounding Zoning / Land Use: North:AG & R -1 East: AG South: AG West: AG Planning & Zoning Recommendation: The Planning & Zoning Commission met on February 17, 2011 and recommend 5 -0 approval of ZC 2011 -01. Staff Recommendation: Approval of Zoning Change request ZC 2011 -01. LO CATION MAP \, i a� L s AERIAL PHOTO • t PROPERTY OWNER NOTIFICATION .o NOTICE OF PUBLIC HEARING x CITY OF NORTH RICHLAND HILLS ti PLANNING AND ZONING COMMISSION TEX AND CITY COUNCIL Case #: ZC 2011- 01 Applicant: Brian James Location: 6832 Clift Street You are receiving this notice because you are a property owner of record within 200 feet of the property shown on the attached map. Purpose of Public Hearing: A Public Hearing to consider a request from Brian James for a zoning change from AG Agricultural to R -1 Single Family on Tract 2T, Abstract 1055 located at 6832 Clift Street. Public Hearing Schedule: Public Hearing Dates: PLANNING AND ZONING COMMISSION THURSDAY, FEBRUARY 17, 2011 If recommended for approval by the Planning and Zoning Commission, this zoning request will be heard by the City Council on: CITY COUNCIL MONDAY, MARCH 7, 2011 Both Meeting Times: 7:00 P.M. Both Meeting Locations: CITY COUNCIL CHAMBERS 7301 N. E. LOOP 820 NORTH RICHLAND HILLS, TEXAS If you have any questions or wish to submit a petition or letter concerning the above request, please contact: Planning Department - City of North Richland Hills 7301 Northeast Loop 820 North Richland Hills, Texas 76180 Phone (817) 427 -6300 Fax (817) 427 -6303 LIST OF NOTIFIED PROPERTY OWNERS Brian James Martha Branch Reeves Mary Jane Munoz 6832 Clift St 6832 Walter St 6901 Clift St Fort Worth Tx 76182 -4205 Fort Worth Tx 76182 -4213 NRH Tx 76182 -4208 Eric R Etux Kimberly Anderson Eddie Sue Brackeney Edith M Thames 6828 Clift St 6900 Walter St to Kory Thames Fort Worth Tx 76182 -4205 Fort Worth Tx 76182 -4222 6271 Gayle Dr NRH Tx 76180 -4725 Craig K Stone Randy Etux Ginger Burton Carrol F Etux Loreft Sullivan 6904 Clift St 6921 Clift St Sullivan Trust NRH Tx 76182 -4207 NRH Tx 76182 -4208 6829 Clift St NRH Tx 76182 -4206 Vic & Kathryn Akers (Trs) Paul J Muise David Etux Ginna P Sauerwein Vic & Kathryn Akers Trust Bldg 1 6821 Crane Rd 6826 Clift St 2653 Blue Mound Rd W Ste 100 NRH Tx 76182 -4306 NRH Tx 76182 -4205 Haslet Tx 76052 -3867 ORDINANCE NO. 3130 ZONING CASE ZC 2011 -01 AN ORDINANCE AMENDING THE COMPREHENSIVE PLAN AND THE COMPREHENSIVE ZONING ORDINANCE OF THE CITY OF NORTH RICHLAND HILLS; AMENDING THE ZONING MAP OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, AND REZONING A 2.237 ACRE TRACT OF PROPERTY FROM AG (AGRICULTURAL) TO R -1 (SINGLE FAMILY RESIDENTIAL) ZONING; ESTABLISHING A PENALTY; PROVIDING FOR PUBLICATION; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, notice of a hearing before the Planning and Zoning Commission was sent to real property owners within 200 feet of the property herein described at least 10 days before such hearing; and, WHEREAS, notice of a public hearing before the City Council was published in a newspaper of general circulation in the City at least 15 days before such hearing; and, WHEREAS, public hearings to zone the property herein described were held before both the Planning and Zoning Commission and the City Council, and the Planning and Zoning Commission has heretofore made a recommendation concerning the zone change; and, WHEREAS, the City Council is of the opinion that the zone change herein effectuated furthers the purpose of zoning as set forth in the Comprehensive Zoning Ordinance and is in the best interest of the citizens of the City of North Richland Hills; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: Section 1: THAT the Comprehensive Plan, the Comprehensive Zoning Ordinance and the zoning map of the City of North Richland Hills are hereby amended by rezoning a 2.237 acre tract of land located in the City of North Richland Hills, Tarrant County, Texas, more particularly described in the legal description attached hereto as Exhibit A from AG (Agricultural) to R -1 (Single Family Residential) zoning. Section 2: Any person, firm or corporation violating any provision of the Comprehensive Zoning Ordinance as amended hereby shall be deemed guilty of a misdemeanor and upon final conviction thereof fined in an amount not to exceed Two Thousand Dollars ($2,000.00). Each day any such violation shall be allowed to continue shall constitute a separate violation and punishable hereunder. Section 3: The City Secretary is hereby authorized and directed to cause the publication of the descriptive caption and penalty clauses of this ordinance as an alternative method of publication provided by law. Section 4: This ordinance shall be in full force and effect immediately after passage. AND IT IS SO ORDAINED. PASSED AND APPROVED on this 7th day of March, 2011. CITY OF NORTH RICHLAND HILLS By: Oscar Trevino, Mayor ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: George A. Staples, City Attorney APPROVED AS TO CONTENT: John Pitstick, Planning & Development Director EXHIBIT A PROPERTY DESCRIPTION BEING a 2.237 acre tract of land in the Tandy K. Martin Survey, Abstract Number, 1055, situated in the City of North Richland Hills, Tarrant County, Texas, and being all of that certain tract of land described in deed to Brian James, recorded in Instrument Number D210165900, Deed Records, Tarrant County, Texas. The bearings for this description are based on the Texas State Plane Coordinate System, as referenced to City of North Richland Hills Control Monument Number 24. Said 2.243 acre tract of land being described by metes and bounds as follows: Beginning at a 3/8" iron rod found on the south right of way line of Walter Street, a variable width public right of way at the northeast corner of the said Brian James tract, same being the northwest corner of that certain tract of land described in deed to Martha Branch Reeves, recorded in Instrument Number D203376917, Deed Records, Tarrant County, Texas; THENCE South 0 °48'25" East, leaving the said south right of way line and continuing along the common line of the said Brian James tract and the said Martha Branch Reeves tract, a distance of 289.43 Feet to a'' /a" iron rod with plastic cap stamped "MOAK" found on the north line of that certain tract of land described in deed to Kimberly and Eric R. Anderson, recorded in Volume 13813, Page 375, Deed Records, Tarrant County, Texas; THENCE South 87 °49'25" West, along the said north line, a distance of 303.82 Feet to a 14-" iron rod with plastic cap stamped "RPLS 4818" set on the occupied east line of Clifr Street, a called 30' public right of way; THENCE North 12 0 52'23" West, along the said east right of way line of Clift Street, a distance of 297.94 Feet to a' /" iron rod with plastic cap stamped "RPLS 4818" set at the northwest corner of the said Brian .Tames tract and being on the south right of way of said Walter Street; THENCE North 88 °21'10" East, along the said south right of way line, a distance of 366.06 Feet to the POINT OF BEGINNING, and containing a computed area of 2.237 Acres, more or less. Compiled from field ties and record data on January 11, 2011 by Whitfield -Hall Surveyors. A survey exhibit of even survey date accompanies this description. °F a oh n D.E. Williams y ,r Re i ered Professional Land Surveyor or;� "V 6 vn.Ciwn„ Texas Registration No. 4818 ; 4"'4818 "'T'' ZONING EXHIBIT ��L PRUPI.Rui UVIUM W." 2.23", ACRES t, ME SURVD, NORM RICIIIAND 111LUS. EXCERPT FROM THE MINUTES OF THE FEBRUARY 17, 2011 PLANNING AND ZONING COMMISSION MEETING ZC2011 -01 Public Hearing and Consideration of a Request from Brian James for a Zoning Change from AG to R -1 Single Family on Tract 2T, Abstract 1055 located at 6832 Clift Street. John Pitstick said that this is an Agricultural property that has never been zoned and Mr. James has requested to rezone to R -1. This is on our comprehensive land use plan for low density residential. R -1 is a very appropriate zoning for this area. The next item you will see is for the preliminary plat also in order to subdivide this lot into 3 lots. There is a .6 acre, .9 acre lots. Staff recommends approval of this and would be more than happy to answer any questions. Brian James, 8920 Rumfield Rd, North Richland Hills, TX 76180, came forward as the applicant. This has been a lot of work and has been a bigger project than what I considered in the beginning. As a family we are excited to be working to Clift Street. We do have our house up for sale on Rumfield and this is going to be our primary residence as well as my brother and sister in law. The reason that we like it is because it is a nice quiet addition and it has great features which is hard to find that in this area. Our Number 1 goal in dividing these lots was to allow our kids grow up together. We all have our plans together and we would like to show the neighbors so that they can see the quality of homes that we will be building. We have put a lot of time, effort, and money into this and are trying to maintain the same kind of standards that are already set. We really like the housing addition and houses. We think that it has a lot of potential. The original property owner had passed away and it had fallen into the hands of family members and had a lot of people living there. The property went downhill and the city ended up condemning the property. We got the property in that state and we went in there were 9 dumpsters of trash taken out and the house was demolished. It was hard to see what was there with so much stuff there. Once it was cleared we had the surveyors come out. There was a lot of trash there and it was really bad. The water had been cut off for 3 months before it was condemned. People were just piling trash and it was just like a dumpster behind the fences. Once we got the survey and went into it the property was a lot larger than what we expected. We knew what the acreage was as far as the surveying but when you actually saw it we started thinking about how we would position our houses on there. It just made sense to break it into 3 separate lots. The primary lot which will be my lot and is the larger lot to utilize the back part of the lot since there isn't any street access to it. Then the other 2 lots would not be on Clift but will be on Walter. One is a little bigger than the other just because the way the survey came out. They are .57 acres and .65 acres are the actual sizes. I did some research and looked at it and our lots are comparable to the other size lots that were recently built on. The home that we will be building on Clift looks very similar to our house on Rumfield with a few changes here and there. My sister in laws house is the same quality or nicer than our home. The actual homes are about 4000 square feet. We are just trying to improve the neighborhood and it is already great and we love it. We are just doing our part and keep the standards as high as possible. With adding the third lot we don't have any plans to build on it right now. It just worked out with the survey to try to break it into 3 lots based on the land the dimensions after we went to the building code. Public Hearing opened at 7:47 pm Ginger Burton, 6921 Clift Street, North Richland Hills, TX, came forward. The property that Mr. James is talking about is just caddy cornered from our home. I have no problem with them rezoning the property to residential but I do have a problem with separating the property into 3 lots. That particular street is a small, dead end street. There are 11 families that live on this street. Of the 11 families, 6 of those families have property that is equivalent to about 1 acre, 3 families have 2+ acres. We have spoken to several other people on our street and we would like to keep that neighborhood to the 1 acre size lots. We want to maintain the country atmosphere. Mr. James had mentioned several times about the quiet, nice neighborhood which is what attracted him there as well as our larger lots. It is an area with lot of trees and we welcome Mr. James but we would prefer it to just be 2 lots at 1 acre each. I would appreciate your consideration. Bill Schopper said that this public hearing is just regarding the zoning change and not about the breakdown of the lots. Jane Munoz, 6901 Clift Street, North Richland Hills, TX came forward. I am not against them changing the lots from Agricultural to residential however all along we were told that they were going to build 2 houses with 1 acre each. We were happy with this and didn't realize that there was a change until we had called the city regarding the zoning that it had been changed to 3 lots. He could take 2 acres and face 2 houses on Walter and each have a full acre. It is not like the lot is unusual like it was in the other situation down the street where you had another house already built there therefore you couldn't really create 2 acres. The other was unusual and that is why it ended up with 3 houses on that one. We would really like it to be 2 one acre lots to fit in with the rest of the neighborhood. Public Hearing closed at 7:50 pm APPROVED Mike Benton motioned to approve ZC 2011 -01, seconded by Dianna Madar. The motion carried unanimously (5 -0). CITY OF NORTH RICHLAND HILLS Department: Planning and Development Council Meeting Date: 3 -7 -2011 Presented by: Dave Pendley Agenda No. CA Subject: GN 2011 -020 Public Hearing to Consider Sign Variance Request SRB 2011- 02 Regarding Section 106(12) of the Code of Ordinances by Golden Corral Restaurant located at 7660 Boulevard 26 Summary The applicant is proposing to install a new 250 square foot pole sign near the northwest corner of their property along Boulevard 26. The proposed pole sign is located approximately 275 feet south of Loop 820 (which is 75 feet outside the 200 foot freeway overlay district limits) and does not have direct freeway frontage. As a result, the proposed sign is not eligible to receive a sign permit. The applicant is requesting a sign variance to provide relief from these restrictions and to allow them to construct a pole sign that is located outside of the freeway overlay district on a parcel that does not have direct freeway frontage. General Description The applicant currently has a 20 foot tall, non - conforming, pole sign on the southwest corner of the property, but believes the store would enjoy improved visibility from Loop 820 if this sign was removed and replaced with a 60 foot tall pole sign located near the northwest corner of their property (see exhibit A & B). The applicant is currently in the process of obtaining a building permit to make significant improvements to their building and believes that a new and improved pole sign is necessary to compliment their construction project. This remodel includes new equipment, furniture, flooring, interior and exterior paint, landscaping and lighting. The applicant has also indicated that they will be installing a new, fully compliant, monument sign along Rodger Line Road; however, no variance is needed for this portion of the project. The applicant has indicated that should the Sign Review Board approve their request they will commit nearly $500,000 towards major improvements to the building's interior, exterior and equipment; and has recently submitted drawings for the building permit (currently under review). The applicant has agreed to make the above improvements prior to constructing the new pole sign. The applicant has also indicated that they would agree to relocate /modify the new pole sign should it be discovered that it obscures or hinders the viewing of future businesses constructed in the Calloway Creek Commercial Area. The Sign Ordinance authorizes the Sign Review Board to grant variances to the Ordinance that will not be contrary to the public interest and where, because of special conditions, the enforcement of the ordinance would result in an unnecessary hardship. Staff is of the opinion that the proposed pole sign would not be contrary to the public interest and that conditions exist which warrant the approval of this request under several restrictions. Recommendation: Approve GN 2011 -020 (aka SRB 2011 -02) subject to the following conditions: 1. A permit to construct the new pole sign cannot be approved by staff until the remodeling project which is currently under plan review and all upgrades and improvements that are planned that do not need plan review are complete and total approximately $500,000. 2. At the direction of the Sign Review Committee, the pole sign must be relocated or modified at the owner's expense should it become necessary to maximize visibility of any future development at the Calloway Creek Commercial Area. 3. This is for Golden Corral at 7660 Boulevard 26 only. Any different use at this address would not be permitted under this variance request. EXHIBIT A l _ E z Y r h a Z d0' 8 S.1 8 C EXHIBIT B 4 � r a LL y + l \ Y � r m 3 U 4 j k CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Agenda No. D.0 Subject: PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. No items for this category. CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Agenda No. E.0 Subject: PUBLIC WORKS No items for this category. CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Agenda No. F.0 Subject: GENERAL ITEMS CITY OF NORTH RICHLAND HILLS Department: Finance Council Meeting Date: 3 -7 -2011 Presented by: Larry Koonce Agenda No. F.1 Subject: GN 2011 -018 Presentation of Fiscal Year 2010 Audited Financial Report Summary The results of the fiscal year (FY) 2010 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. General Description A draft of the CAFR is attached to this cover sheet. The auditor's opinion (see Independent Auditor's Report, page 1 of the CAFR) 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 represent the city's 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 2010 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 2011 -018 the 2010 fiscal year Audited Financial Report as presented. f � omprehensi a Annua Financial Report 3 Ar IV, o i q u M, rw • slims* r �� • .. -. O w I A "�� wow W ' ro t e",u Deai 6 Bo,%i N ewman euftuAae a%b / specud &wAb eootdin� CITY OF NORTH RICHLAND HILLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2010 City Officials Oscar Trevino Mayor Ken Sapp Place 2 Mayor Pro Tern John Lewis Tom Lombard Place 1 Place 3 Dr. Tim Barth David Whitson Place 4 Place 5 Scott Turnage Tim Welch Place 6 Place 7 Mark Hindman City Manager 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 TH RICHLAND H I L L 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 II Huibi Wang, Accountant I Pamela Knapp, Accounting Technician Jennifer Day, Accounting Technician Ana Valdovinos, Accounting Technician Special appreciation is given to: Budget and Research Department Mark Mills, Director Shirley Hoover, Internal Auditor Jennipher Castellanos, Budget Analy st 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. 11 City of North Richland Hills, Texas Comprehensive Annual Financial Report For Fiscal Year Ended September 30, 2010 Page(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 24 -25 Statement of Revenues, Expenses, and Changes in Net Assets -- Proprietary Funds 26 -27 Statement of Cash Flows -- Proprietary Funds 28 -29 Statement of Fiduciary Net Assets - Fiduciary Funds 30 Statement of Changes in Fiduciary Net Assets - Ficuciary Funds 31 Notes to Basic Financial Statements 33 -66 ui City of North Richland Hills, Texas Table of Contents Required Supplementary Information: Schedule of Funding Progress -- Texas Municipal Retirement System 69 Other Post Employment Benefits Schedule of Funding Progress 70 Other Post Employment Benefits Schedule of Employer Contributions 70 Schedule of Revenues, Expenditures, and Changes in Fund Balance -- Budget and Actual General Fund 71 Notes to Required Supplementary Information - General Fund 72 Other Supplementary Information: Non -major Governmental Funds: Combining Balance Sheets 74-75 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 76-77 Schedule of Revenues, Expenditures, and Changes in Fund Balance -- Budget and Actual General Debt Service Fund 78 Promotional Fund 79 Donations Fund 80 Special Investigation Fund 81 Drainage Utility Fund 82 Parks and Recreation Development Fund 83 Crime Control District Fund 84 Gas Development Fund 85 Traffic Safety Fund 86 Sales Tax Revenue Bonds Debt Service 87 Internal Service Funds: Combining Statement of Net Assets 90 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets 91 Combining Statement of Cash Flows 92 IV City of North Richland Hills, Texas Table of Contents Page(s Component Units: Combining Statement of Revenues, Expenses, and Changes in Net Assets 94 Statement of Activities 95 STATISTICAL SECTION (UNAUDITED) Government -Wide Information: Net Assets by Component Table 1 99 Changes in Net Assets Table 2 100-101 Fund Information: Fund Balances - Governmental Funds Table 3 102 Changes in Fund Balances - Governmental Funds Table 4 103 Assessed and Actual Value of Taxable Property Table 5 104 Property Tax Rates - Direct and Overlapping Governments Table 6 105 Principal Taxpayers Table 7 106 Property Tax Levies and Collections Table 8 107 Ratios of Outstanding Debt by Type Table 9 108 Computation of Direct and Overlapping Debt Table 10 109 Computation of Legal Debt Margin Table 11 110 Pledged Revenue Coverage Table 12 111 Demographic Statistics Table 13 112 Principal Employers Table 14 113 Full -time Equivalent Municipal Employees by Function /Program Table 15 115 Operating Indicators by Function /Program Table 16 116-117 Capital Asset Statistics by Function /Program Table 17 118-119 v This page intentionally left blank. vi Introductory Section Vil This page intentionally left blank. vui NoKrH K ICHI - AND PIIEt.s IqR r H F C i t y o t c K O t k� t Department of Finance March 7, 2011 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, 2010. 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, 2010, 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, 2010, 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 auditing requirements of the 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 the grant 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 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 66,400 for 2010. 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 a Council- 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 forwhich 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 governmental funds with appropriated annual budgets are presented in the other supplementary information of this report. x 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 environment within which the City operates. Local economy The City is fortunate to reside in the strong socioeconomic area of Northeast Tarrant County in North Central Texas. Neighbors with the Cities of Colleyville, Keller, Hurst and Southlake, the City of North Richland Hills weathered the past recession and is quite well as evidenced by numerous economic indicators and newsworthy projects. A balanced mix of large employers, broad range of retail and a growing resident population; revenue streams are diverse enough enabling the City to weather sectoral downturns. 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. Most recently the City was chosen for relocation by eMortgage Logic, a real estate software company with plans to employ 300 primary jobs in 2011. The City's mix of large discount retailers that includes two Wal -Mart Supercenters, Sam's Club and SuperTarget enabled the City to grow it's FY 2010 sales tax base by 4% over FY 2009. These discount retailers do well under both economic upturns and downturns, further contributing to the City's economic stability. 2011 is projected to be a critical year in the life of North Richland Hills as construction will commence on IH 820, doubling existing lane capacity to accommodate regional growth. 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 of these projects is needed to improve infrastructure and provide essential services to its citizens. The projects are expected to continue through the year 2011. 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 upgrading its 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 a six -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 Utility Fund, and employee premiums are being used and continue 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 issuance of minimal debt. NRH 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 is with JP Morgan Chase Bank, N.A. which began on October 1, 2009 and will be in effect through October 31, 2014. Cash temporarily idle during the year was invested in three public funds investment pools, certificates of deposit, agency securities, and U.S. Treasury Notes. The maturities of the investments range from overnight to three years, with one CDARS CD extending to 4 years. The average yield on investments for fiscal year 2010 was 2.03% compared to 2.16% for the prior year. The portfolio's weighted average maturity ( "WAM ") at the end of the fiscal year was 282 days, which represents a 78 day increase over last year's WAM which was 204 days. At fiscal year end, approximately 36.2% was invested beyond one year, 24.4% was invested for one year or less, while the remaining 39.4% was invested in the overnight market. The City continues to use the services of PFM Asset Management, LLC as an investment advisor and overseer of our portfolio, which began on October 1, 2009. 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 $6,829,329 in the aggregate for a 12 -month period beginning on January 1, 2010. 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- employment 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 105 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 ( "GFOX) 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, 2009. 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 -seven 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 2010 for the 2009 -2010 operating budget. The Distinguished Budget Presentation award was granted to the City for the twentieth consecutive year by the GFOA. xn Acknowledgments — 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 La Fior to Director of Finance Assistant Director of Finance X111 Certificate of Achievement for Excellence in Financial Reporting Presented to City of North Richland Hills Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2009 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. �s z 7 AND President Executive Director XIV i City of North Richland Hills CITIZENS L Mayor J Council "Municipal `Boards& CourtJud a Comm'ss' 'City `City Secrets • City Manager Alto Asst. to the C Mana er Community Ad mnistrative 1 Development SerHCes Fiscal Seruces Services Parks &Recreation r Eco nom 17'... partmen t Finance Department Budget Department PublicliYCMs- Flan nine andrn ing r na Development - Accounting -Intel Audit - Streets Libra N Purchasing - Tax - Drainage ,I - Utility Services & - Engineering Ccllectiore i GolfCoume NRH20 Fleet Services Facilities! Fue Department Information Servieec Human Resources L Buildinglnspedions - Equipment Services Construction - Emergency - Computers! - Employmerd - Fire Equipment Management Management Nd od(s - R" Management - Building Services - Phones - Civil Service - Construction Management Function ftes onsbi ties Neighb rrrooa ' Public formation MunicipalCourt Functional r Res onsi "I ties. -Pa MS and Recreation Board ! - Ciicable Development Re rery Committee - Library Board -Cons I— Heatth - TRTC - Economic Development Board - C ode L umpliance RTC - Minerals / Ga - Animal Services Wata Utdiies- FortWorth Rai iniiatives Functional Re onsi billt— SeidWaste ' -820 Expansion - Funding Development- Animal Services F acildies - Facilities Study Functional Responsibilitie Franchises TAD ROW Acquisition KEY •Appointedby Contracted i Council XV CITY OF NORTH RICHLAND HILLS, TEXAS List of Principal Officials September 30, 2010 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, COUNC IL MEMBER, PLACE 6 SCOTT TURNAGE COUNCIL MEMBER, PLACE 7 TIM WELCH City Manager 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 Financial Section This page intentionally left blank. Deloitte > Deloitte & Touche LLP JPMorgan Chase Tower 2200 Ross Avenue, Suite 1600 Dallas, TX 75201 -6778 USA Tel: +1 214 840 7000 www.deloitte.com INDEPENDENT AUDITORS' REPORT The Honorable Mayor and Members of the City Council City of North Richland Hills, Texas We have audited the accompanying basic financial statements 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 (the "City "), as of and for the year ended September 30, 2010, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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 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 aggregate remaining fund information of the City, as of September 30, 2010, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated March 4, 2011, on our consideration of City's internal control over financial reporting and on 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 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. 1 Member of Deloitte Touche Tohmatsu Management's Discussion and Analysis, the Schedule of Funding Progress — Texas Municipal Retirement System, the Schedule of Funding Progress — 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's management. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the City's respective financial statements that collectively comprise the City's basic financial statements. The combining and individual nonmajor 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's management. Such additional information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The 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's management. Such additional information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on it. March 4, 2011 2 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2010 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, 2010 by over $289 million (net assets). Of this amount, approximately $57 million (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. • The City's total net assets decreased by $87 thousand in fiscal year 2010. Additional details of this decrease may be found beginning on page 18.. • As of September 30, 2010, the City's governmental funds reported combined fund balances of $57,382,572 which represents an increase of $273,256 in comparison to the prior fiscal year's ending balance. • Approximately 37% of total governmental fund balance, or $21,099,602, is available for appropriation at the government's discretion (unreserved, undesignated fund balance). • The City's objective regarding General Fund 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 $9,623,056 or 27% of General Fund actual expenditures for 2010. • The City's total debt (including discrete component units) increased by approximately $30 million during the current fiscal year. New general obligation bonds and certificates of obligation in the amounts of $5.9 million and $23.7 million respectively were issued in fiscal year 2010. A bank loan was obtained for $.4 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 3 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2010 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 74 - 77). • Proprietary 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 4 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2010 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 24 - 29 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 33 - 66 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 $289,436,999 as of September 30, 2010. Analyzing the net assets of governmental and business -type activities separately, governmental activities net assets equal $203,941,724 and business -type activities net assets total $85,495,275. 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 (78 %) 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 2010. Current assets include restricted deposit and investment balances. Schedule of Assets, Liabilities, and Net Assets Amounts shown in thousands ($000's) As of September 30, Gowmmental Activities Business -Type Activities Total 2010 2009 2010 2009 2010 2009 Current and Other Assets $76,035 $70,564 $33,596 $37,729 $109,631 $108,293 Capital Assets, Net 198,035 190,999 71,511 72,181 269,546 263,180 Total Assets 274,070 261,563 105,107 109,910 379,177 371,473 Long -term Liabilities 53,434 49,329 12,629 12,569 66,063 61,898 Other Liabilities 16,695 13,392 6,983 6,658 23,678 20,050 Total Liabilities 70,129 62,721 19,612 19,227 89,741 81,948 Net Assets Invested in Capital Assets, Net of Related Debt 164,973 142,067 61,160 62,355 226,133 204,422 Restricted 3,715 4,693 2,610 3,019 6,325 7,712 Unrestricted 35,253 52,082 21,725 25,309 56,978 77,391 Total Net Assets $203, $198,8 $85,495 $90,683 $289,436 $289,525 5 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2010 Statement of Activities - Governmental activities increased the City of North Richland Hills' net assets by $5.1 million in fiscal year 2010, and business -type activities decreased net assets by $5.2 million. The following table presents the condensed government -wide statement of activities for the years ended September 30, 2009 and 2010. Changes in Net Assets Amounts shown in thousands (000's) Year Ended September 30, Governmental Activities Business -Type Activities Total 2010 2009 2010 2009 2010 2009 Revenues: Program revenues: Charges for services $13,286 $12,813 $30,679 $31,429 $43,965 $44,242 Operating grants and contributions 965 1,142 0 0 965 1,142 Capital grants and contributions 6,807 11,342 272 0 7,079 11,342 General revenues: Property tax 19,910 20,606 0 0 19,910 20,606 Sales tax 16,428 16,058 0 0 16,428 16,058 Mixed beverage 118 118 0 0 118 118 Franchise taxes 3,957 3,803 0 0 3,957 3,803 Occupancy taxes 240 152 0 0 240 152 Unrestricted investment earnings 589 1,612 237 740 826 2,352 Miscellaneous 553 188 54 (11) 607 177 Total revenue 62,853 67,834 31,242 32,158 94,095 99,992 Expenses: General government 14,654 16,356 0 0 14,654 16,356 Public safety 26,172 27,773 0 0 26,172 27,773 Culture and recreation 9,468 10,719 0 0 9,468 10,719 Public works 8,389 2,127 0 0 8,389 2,127 Interest and other fees 1,761 2,269 0 0 1,761 2,269 Utility 0 0 27,313 25,121 27,313 25,121 Golf course 0 0 2,236 2,218 2,236 2,218 Aquatic park 0 0 4,190 4,106 4,190 4,106 Total expenses 60,444 59,244 33,739 31,445 94,183 90,689 Increase in net assets before transfers 2,409 8,590 (2,497) 713 (88) 9,303 Transfers between govemmental and Business -Type 2,690 2,587 (2,690) (2,587) 0 (103) Net Increase (decrease) in net assets 5,099 11,177 (5,187) (1,874) (88) 9,303 Net assets - beg. Bal. 198,842 187,665 90,683 92,557 289,524 280,222 Net assets - end of year $203,941 $198,842 $85,496 $90,683 $289,436 $289,525 Governmental activities - Governmental activities increased the City of North Richland Hills' net assets by $5.1 million in fiscal year 2010. The City had a decrease in tax revenues of $(83,374) during 2010. Charges for services increased by 3.7% or approximately $.5 million over 2009 revenues. The total expenses for governmental activity increased by approximately $1,200,664 over 2009 totals. This was primarily due to $1.4 million increase in debt principal retirement and defeased debt and an increase in expenses in public works for various street projects and savings in overall expense for various departments (see page 11 for General Fund budget variances). Operating grants and contributions decreased by $177,329 from fiscal year 2009 to 2010, while capital grants and contributions decreased by $4.5 million from 2009 to 2010. Sales and mixed beverage taxes increased by $370,049 from fiscal year 2009 to 2010. Franchise taxes realized an increase of $154,104 from 2009 to 2010. This increase is directly related to a new cable /fiber optic television 6 CITY OF NORTH RICH LAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2010 utility established during the fiscal year of 2008. This franchise provided a one time influx of revenue and now in 2010 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 increase in sales tax revenues for 2011. The most significant governmental expense occurred in the public safety program ( "PS "), which incurred expenses of $26,172,292. This figure represents a decrease from the prior fiscal year expenses of approximately $1.6 million. Approximately 66% of the PS costs is related to police and fire protection personnel salaries and related benefits. These costs are estimated at $18,539,414 which represents an approximate decrease of $2,632,104 from the prior fiscal year. Overall, the decrease is represented by a stabilization of turnover of police officers that has been seen in prior fiscal periods. Also, fiscal years 2008 and 2009 facilitated some overstaffing of officers to ensure vacancies in key positions would be filled when available (a formal succession plan was implemented). With succession plan finalized, expenses for this function should have decreased for this reason. Internal Service Funds saw a net decrease in net assets of approximately $1.5 million. Internal Services of Facilities and Construction, Fleet Services, and Information Services shared a cumulative loss of $(1,582,189). The majority of the decrease was directly attributed to Self Insurance realizing a net decrease to net assets totaling $1,122,932 (relatively 71 %) of total decrease. Risk activities for 2010 showed a negative trend with higher than projected medical claims. Culture and recreation program expenses decreased by approximately 11.2% from fiscal year 2009 to 2010. The variance of expense levels between fiscal years is directly attributed to the contribution made to component unit for the construction of new recreation facility. The contribution done in prior year was a one year event and this fluctuation was expected and normal between the fiscal years. l Expenses and Program Revenues - Governmental Activities $(000's) $30,000 $25,000 $20,000 _ $15,000 $10,000 $5,000 . General Public Safety Culture & Public Works Interest & Government Recreation Other Fees ■Expenses Revenues 7 i CITY OF NORTH RICH LAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2010 General Revenues by Source - Governmental Activities Franchise Fees 9.5% Unrestricted Investment Earnings 1.5 °6 Sales Tax 39.6% Property Taxes 47.6% Miscellaneous 1.9% Business-type activities — Business -type activities resulted in a decrease to the City's total net assets. The 2010 decrease was $5.2 million. $1.2 million, or 22.38 %, of this reduction is attributed to absorbing internal service activities on the government wide level. Net operations for Aquatic Park and Golf Course have remained flat and accounts for a margin of the loss for 2010. Utility operations loss of $3,927,793 was correlated to several fiscal factors: • Utility operations implemented the final phase of rate increases for water and wastewater services which was at the louver end of the increases in the past. With higher costs to provide services with a rate increase not correlation to current costs rates the revenue for service declined $736,261. • Expenses for the Utility function, increased by $2.2 million dollars (9 %) over the prior year. This activity saw a very extreme weather conditions which produced late winter snow fall that resulted in major influx into the wastewater system. On record the area buffered major downpours of rain water in short periods of time to accommodate the late winter snow event. We saw an increase in wastewater processing fees accessed to the City (this was late winter 2009). Also, raw water purchase cost increased due to late in fiscal year heat wave incurred causing an increase in consumption. Very unusual to bear both weather conditions within a fiscal period. However, this unusual circumstance reflects in operational decrease to net assets. i I i CITY OF NORTH RICH LAND H ILLS, TEXAS Management's Discussion and Analysis September 30, 2010 Expenses and Program Revenues - Business-Type Activities $(000's) - - -- $25,000 $20,000 $15,000 $5,000 3 Utility Golf Course Aquatic Park Expenses Revenues Revenues by Source - Business -type Activities services- Utility Golf Course 7 3 °.6 79.4°6 Aquatic Park 13.3% 9 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2010 Fund Level Financial Analysis The General Fund fund balance for the year ended September 30, 2010 was $13,123,663, which was a decrease of $2 million from 2009. Of this amount, $218,346 is reserved for encumbrances, $146,201 is reserved for inventories, $31,058 is reserved for prepaids, and $720,064 is reserved for advances. Another $2.4 million is designated for municipal court technology, savings incentive, special projects, radio equipment, and other special programs. The unreserved, undesignated balance is $9,623,056, which represents approximately 26.7% of the 2010 fiscal year's general fund expenditures. The General Fund property tax revenues realized an increase from the prior year of $371,664. Property tax increase is remaining flat in comparison to prior years significant upward trends. The City has reached approximately 80% build -out of available undeveloped housing plats. With the economy in a recession and the close proximity to build -out status, property tax revenues are projected to remain flat. 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 $.2 million over 2009, due to an increase in resident rates in fiscal year 2010 and a change to another ambulance transport billing provider. The General Capital Projects Fund ( "GCP ") ended the year with a decrease of fund balance of $400,546 over 2009. Net activity for this fund is seeing a fairly minor trend downward for 2010. This trend is an accumulation of several reasons. Capital Improvement projects were carefully analyzed due to the recession. So an influx of bond proceeds was smaller than prior years due to the conservative approach of necessity planning. Also utilization of prior bond proceeds saw activity during the fiscal year, thus the slight decrease in fund balance. Enterprise Funds realized a decrease to their net assets for the year ended September 30, 2010. The Golf Course Fund realized a decrease to the net assets of $15 thousand. The Utility Fund and the Aquatic Park Fund saw a net decrease of $4 million and $70 thousand, respectively. Expenses increased because of an increase in repairs and maintenance expenses. General Fund Budgetary Highlights North Richland Hills has been more fortunate than other areas of the country that have been significantly impacted by the recent recession. However, since late 2008, economic conditions have negatively impacted municipal revenue streams. Unlike 2009, implementation of the City's contingency plan was not required during 2010; however, steps were taken in response to projected declines in revenue. Departments were briefed on projected revenues and directed to approach their spending conservatively, with a focus on core services and critical needs. The majority of the variance is attributable to departments taking astute care and oversight of their individual budgets. In addition, the City implemented a rolling freeze on all vacant, non -sworn positions. Each vacant position was held open for thirty days, after which time it was re- evaluated. The ending unrestricted General Fund fund balance of $9,623,056 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: • Property taxes had a slight decrease below projections totaling $60,672. This variance is not large but it is significant due to property tax supplying a majority of resources for the functions to continue operations. • Franchise fees reflected a increase of $293,948 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. 10 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2010 • General Fund had positive net budget variances totaling approximately $1.3 million. The General Fund activities and their individual variances include: General Fund Departmental Budget Variances Positive (Negative) City Council $ 38,447 City Manager 13,530 Communications 40,291 City Secretary 51,194 Legal 130,506 Human Resources 2,366 Finance 47,555 Budget & Research 4,821 Municipal Court 52,543 Planning and Inspections 32,238 Economic Development (266) Library 62,402 Neighborhood Services 194,697 Public Works 208,268 Parks & Recreation 273,354 Police 322,163 Emergency Management 97,221 Fire 231,006 Building Services - Non- Departmental (482,481) Total General Fund $ 1,319,855 General Fund overall savings is partly caused by encumbrances of current year activities which will be carried to 2010 -2011 budget and expensed in the new budget period. The total of 2009 -2010 encumbrances to be expended in 2010 -2011 totals $218,346 (or approximately 23% of net amount under budget). Capital Asset and Debt Administration Capital assets - At the end of fiscal year 2010, the City had $269 million (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 2010. Capital Assets (net of Accumulated Depreciation) Amounts shown in thousands (000's) Governmental Activities Business -Type Activities Total Total 2010 2009 2010 2009 2010 2009 Land & land imp. $ 75,550 $ 72,111 $ 2,527 $ 2,527 $ 78,077 $ 74,638 Works of art 252 72 - - 252 72 Buildings & imp. 23,588 25,338 1,927 2,055 25,515 27,393 Other imp. 79,185 80,924 13,728 14,413 92,913 95,337 Utility plant - - 48,839 50,140 48,839 50,140 Machinery & equip. 7,374 6,334 1,421 1,207 8,795 7,541 Const. in progress 12,085 6,220 3,069 1,839 15,154 8,059 Total capital assets $ 198,034 $190,999 $ 71,511 $ 72,181 $269,545 $263,180 11 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2010 This year's additions included: Description Amount Ambulance and Firetruck $ 1,571,446 Armadillo and Weather Sculptures 157,804 CISCO IP Phone system 698,602 College Hills Well 161,292 Computer and Machinery Equipment 1,371,175 Library Building 19,956 NRH2O Pool Area Improvement 68,933 Park Improvement 418,662 Street Funded by CDBG Grant 308,057 Street Improvement 1,058,639 Various Land Acquisitions 2,756,602 Various Vehicles 158,504 Water and Sewer line 1,184,337 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 $51,733,930 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. More information on capital assets can be found in footnote IV.C. in the Footnotes to the financial statements. Debt - At September 30, 2009 and 2010, the City had the following debt outstanding: Outstanding Debt Amounts shown in thousands (000's) Governmental Activities Business -Type Activities 2010 2009 2010 2009 2010 2009 Totals Totals General obligation bonds $ 41,725 $ 39,810 $ 1,890 $ 2,350 $ 43,615 $ 42,160 Certificates of obligation 8,255 7,229 11,285 11,254 19,540 18,483 Sales tax revenue bonds 2,640 3,600 0 0 2,640 3,600 Loans payable 1,625 1,550 0 0 1,625 1,550 Totals $ 54,245 $ 52,189 $ 13,175 $ 13,604 $ 67,420 $ 65,793 In fiscal year 2010, the City issued new debt. The presently outstanding general obligation debt of the City is rated "AA2" 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 12 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2010 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 $6,829,329 in the aggregate for a 12- month period beginning on January 1, 2010. 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 2010 -2011, 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 2010 ended 2.9% above the budgeted number. When compared to budget year 2009 -2010 actual receipts, sales taxes are anticipated to continue to remain flat in 2011. The fiscal year 2009 -2010 budget incorporates no increase in the property tax rate. For fiscal year 2009 -2010 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 62.1% 0.354116 Debt Service Fund 37.9% 0.215884 Total distribution of tax rate 100.0% $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. A utility rate analysis has been presented to City Council. If approved, water and sewer base and volume rate increases will be phased in for three years beginning in fiscal year 2011 -2012. 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. 13 This page intentionally left blank. 14 BASIC FINANCIAL STATEMENTS 15 This page intentionally left blank. 16 CITY OF NORTH RICHLAND HILLS, TEXAS Government -wide Statement of Net Assets September 30, 2010 Primary Government Governmental Business -Type Component Activities Activities Total Units Assets CURRENT ASSETS Deposits and investments $ 30,600,836 $ 17,038,650 $ 47,639,486 $ 11,735,156 Receivables, net of allowances: Accounts 593,937 3,601,540 4,195,477 - Property taxes 202,203 - 202,203 Othertaxes 3,325,238 - 3,325,238 - Interest receivable 290,244 90,099 380,343 50,707 Special assessments 86,686 - 86,686 - Intergovernmental 3,834,351 330,129 4,164,480 Other 1,601, 340 149,129 1,750,469 Prepaids 31,058 19,752 50,810 Inventories, at cost 276,693 553,236 829,929 Internal balances (2,264,072) 2,264,072 - - Total current assets 38,578,514 24,046,607 62,625,121 11,785,863 NONCURRENT ASSETS Restricted deposits and investments 36,973,316 9,386,049 46,359,365 22,403,282 Capital assets - net: Land and nondepreciable land improvements 75,549,765 2,526,639 78,076,404 - Buildings and improvements 39,311,658 3,757,904 43,069,562 Improvements other than buildings 148,313,585 22,587,522 170,901,107 Utility plant - 90,289,635 90,289,635 Machinery and equipment 22,064,301 3,863,686 25,927,987 Artwork and historical treasures 252,295 - 252,295 - Construction in progress 12,085,062 3,068,971 15,154,033 1,519,435 Accumulated depreciation (99,542,126) (54,583,489) (154,125,615) - Total capital assets - net 198,034,540 71,510,868 269,545,408 1,519,435 Bond issue costs, net of amortization 483,934 163,272 647,206 190,804 Total noncurrent assets 235,491,790 81,060,189 316,551,979 24,113,521 Total assets 274,070,304 105,106,796 379,177,100 35,899,384 Liabilities CURRENT LIABILITIES Accounts payable and accrued liabilities 6,565,469 2,661,585 9,227,054 141,508 Deposits and other liabilities 1,380,749 70,198 1,450,947 - Retainage payable 194,848 114,597 309,445 Compensated absences 2,072,749 329,066 2,401,815 Unearned revenue 155,754 45,815 201,569 - Accrued interest payable 287,204 67,098 354,302 257,512 Bonds payable 5,565,000 1,235,000 6,800,000 1,840,000 Loans payable 384,774 - 384,774 - Due to other governments 87,914 685,528 773,442 Customers' deposits - 1,784,493 1,784,493 Developers' deposits - 44,128 44,128 - Total current liabilities 16,694,461 7,037,508 23,731,969 2,239,020 NONCURRENT LIABILITIES General obligation bonds payable 37,578,310 1,365,306 38,943,616 288,741 Certificates of obligation 7,441,738 10,549,695 17,991,433 27,944,328 Sales tax revenue bonds 1,645,000 - 1,645,000 - Loans payable 1,240,310 - 1,240,310 Compensated absences 1,028,656 117,392 1,146,048 Other post employment benefits obligation 2,115,103 255,557 2,370,660 Net pension obligation 2,385,002 286,063 2,671,065 - Total noncurrent liabilities 53,434,119 12,574,013 66,008,132 28,233,069 Total liabilities 70,128, 580 19, 611, 521 89, 740,101 30,472, 089 Net assets Invested in capital assets, net of related debt 164,973,337 61,160,189 226,133,526 (27,644,320) Restricted for: Debt service 3,714,261 - 3,714,261 33,071,615 Impact fees restricted for construction 2,610,287 2,610,287 - Unrestricted 35,254,126 21,724,799 56,978,925 - Total net assets $ 203,941,724 $ 85,495,275 $ 289,436,999 $ 5,427,295 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, 2010 Functions /Programs Primary Government Governmental activities: General government Public safety Culture and recreation Public works Interest and other fees Total governmental activities Business -type activities: Utility Golf course Aquatic park Total business -type activities Total primary government Component units Program Revenues Operating Capital Grants Charges for Grants and and Expenses Services Contributions Contributions Net (Expense) Revenue and Changes in Net Assets Governmental Business -type Activities Activities Total $ 14,653,747 $ 8,619,557 $ 768,852 $ 686,793 $ (4,578,545) - $ (4,578,545) 26,172,292 2,918,356 8,913 298,077 (22,946,946) 3,956,663 (22,946,946) 9,468,346 909,267 187,149 364,787 (8,007,143) - (8,007,143) 8,388,531 839,309 - 5,456,929 (2,092,293) 606,936 (2,092,293) 1,761,128 - - - (1,761,128) (2,399,826) (1,761,128) 60,444,044 13,286,489 964,914 6,806,586 (39,386,055) 198,841,917 (39,386,055) 27,313,424 24,324,685 - 271,624 $ 289,436,999 (2,717,115) (2,717,115) 2,236,113 2,264,256 - - 28,143 28,143 4,188,892 4,090,087 - - (98,805) (98,805) 33,738,429 30,679,028 - 271,624 (2,787,777) (2,787,777) $ 94,182,473 $ 43,965,517 $ 964,914 $ 7,078,210 $ (39,386,055) $ (2,787,777) $ (42,173,832) Tax increment financing district #1 $ 9,401 $ $ $ Tax increment financing district #2 588,445 - Total component units $ 597,846 $ $ $ 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. Component Units $ (9,401) (588,445) $ (597,846) $ 19,909,976 $ - $ 19,909,976 $ 3,013,628 16,428,281 - 16,428,281 - 118,253 - 118,253 - 3,956,663 - 3,956,663 - 240,387 - 240,387 - 588,866 236,674 825,540 112,763 553,412 53,524 606,936 4,567 2,690,024 (2,690,024) - - 44,485,862 (2,399,826) 42,086,036 3,130,958 5,099,807 (5,187,603) (87,796) 2,533,112 198,841,917 90,682,878 289,524,795 2,894,183 $ 203,941,724 $ 85,495,275 $ 289,436,999 $ 5,427,295 18 CITY OF NORTH RICHLAND HILLS, TEXAS Balance Sheet Governmental Funds September 30, 2010 General Fund General Capital Projects General Debt Service Other Governmental Total Governmental Assets Deposits and investments $ 12,175,596 $ Receivables, net of allowance Accounts 496,481 Property taxes 202,203 Other taxes receivable 1,817,388 Interest receivable 32,028 Special assessments receivable - Intergovernmental receivables 60,261 Other receivables 27,395 Due from other funds 170,000 Prepaid items 31,058 Inventories, at cost 146,201 Advances to other funds 720,064 Restricted: Deposits and investments: Construction funds - Transition funds - Total assets $ 15,878,675 $ Liabilities Accounts payable $ 981,632 $ Retainage payable Accrued liabilities 409,286 Intergovernmental payables - Due to other funds - Deposits and other liabilities 765,404 Deferred revenue 598,690 Total liabilities 2,755,012 Fund Balance Reserved for encumbrances 218,346 Reserved for inventories 146,201 Reserved for prepaids 31,058 Reserved for advances 720,064 Reserved for debt service - Reserved for capital improvements Unreserved, designated for: Crime control district transition - Muncipal court technology & security 532,024 Savings incentive program 250,360 Retirement stabilization 250,000 Utility billing assistance 88,054 Rail station project 800,000 Golf course equipment loan 164,500 Radio equipment 150,000 Hometown litigation 150,000 Unreserved, undesignated for: General fund 9,623,056 Special revenue - Total fund balance 13,123,663 Total liabilities and fund balance $ 15,878,675 $ The notes to the financial statements are an integral part of this statemen $ 2,800,727 $ 79,930 3,289 86,686 - 3,323,755 - 61,305 7,512 28,500,619 32,052,295 $ 3,442,857 $ 127,007 3,399 604,215 2,892,210 7,069,688 2,811,528 $ 24,982,607 24,982,607 32,052,295 $ 19 2,811,528 2,811,528 2,811,528 $ 9,993,668 $ 97,456 1,507,850 25,809 450,335 1,482,523 19,353 3,813,341 29,917 17,420,252 $ 234,714 $ 67,841 80,872 87,914 170,000 574 313,563 955,478 110,308 19,353 902,733 3,309,056 646,778 11,476,546 16,464,774 17,420,252 $ 24,969,991 593,937 202,203 3,325,238 141,056 86,686 3,834,351 1,578,735 170,000 31,058 165,554 720,064 32,313,960 29,917 68,162,750 4,659,203 194,848 493,557 87,914 170,000 1,370,193 3,804,463 10,780,178 328,654 165,554 31,058 720,064 3,714,261 28,291,663 646,778 532,024 250,360 250,000 88,054 800,000 164,500 150,000 150,000 9,623,056 11,476,546 57,382,572 68,162,750 CITY OF NORTH RICHLAND HILLS, TEXAS Reconciliation of the Balance Sheet of Govermental Funds to the Statement of Net Assets GOVERNMENTALFUNDS September 30, 2010 Total fund balances -- governmental funds $ 57,382,572 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities resources (excluding internal service capital assets) are not financial resources and, therefore, are not reported as net assets in governmental funds. 194,380,010 Certain receivables are not available to pay current - period expenditures and, therefore, are deferred in the funds. 3,795,044 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. 9,064,079 Long -term liabilities, including bonds payable, loans payable, accrued interest payable, bond issuance costs, compensated absences, other post employment benefits, and net pension obligation, are not due and payable in the current period and, therefore, are not reported as liabilities in the funds. (60,679,981) Total net assets -- governmental activities $ 203,941,724 The notes to the financial statements are an integral part of this statement. See note II A for additional information on reconciliation calculations. 20 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds Year Ended September 30, 2010 General Capital General Debt Other Total General Fund Projects Service Governmental Governmental REVENUES Taxes License and permits Charges for services Fines Civil citations Contributions Investment income Intergovernmental Drainage fees Tennis center Forfeitures Mineral rights lease income Right of way usage fees 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) Proceeds from Issuance of debt Premium on issuance of debt Proceeds from sale of assets Transfer in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance - beginning of year Fund balance - end of the year $ 26,717,925 $ 1,148,594 5,349,622 2,631, 813 212,158 465,227 298,628 36,823,967 9,973,256 5,800,000 $ 8,324,613 461,994 10,435,250 19,373,634 - 1,148,594 5,324,327 24,697,961 4,224, 390 - 3,119,871 7,344,261 2,514,498 3,583 - 2,518,081 - 2,387,711 178,508 - 2,387,711 3,748 650,480 538,193 312,811 967,039 1,399 30,831 - 854,938 887,168 - 9,901,994 - 157,183 10,059,177 - 6,155,319 960,000 7,115,319 - - 1,994,325 167,000 2,161,325 36,090,925 12,974,599 8,149,644 11,358,124 68,573,292 733,042 (11,072,755) (2,243,496) 2,975,975 (9,607,234) - 9,186,475 - - 9,186,475 - - 42,075 - 42,075 18 24,258 - 10,402 34,678 1,402,667 1,463,476 1,339,162 3,952,787 8,158,092 (4,670,849) (2,000) - (2,867,981) (7,540,830) (3,268,164) 10,672,209 1,381,237 1,095,208 9,880,490 (2,535,122) (400,546) (862,259) 4,071,183 273,256 15,658,785 25,383,153 3,673,787 12,393,591 57,109,316 $ 13,123,663 $ 24,982,607 $ 2,811,528 $ 16,464,774 $ 57,382,572 $ 5,800,000 $ 8,324,613 $ 40,842,538 - - 1,148,594 - - 5,349,622 - - 2,631,813 726,274 726,274 13,993 - 178,508 192,501 157,116 23,296 145,623 538,193 1,730,735 82,852 910,104 3,188,918 - - 839,309 839,309 - 309,559 309,559 - 232,054 232,054 - 1,386,208 1,386,208 - 1,090,401 1,090,401 - - 191,446 490,074 1,901,844 5,906,148 14,334,099 58,966,058 The notes to the financial statements are an integral part of this statement. 21 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, 2010 Net change in fund balances - -total governmental funds Amounts reported for governmental activities in the statement of activities 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. The net effect of various transactions involving capital assets (i.e. sales, trade -ins, and donations) is to increase net assets. Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 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. 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. 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. Change in net assets of governmental activities The notes to the financial statements are an integral part of this statement. See note II B for additional information on reconciliation calculations. $ 273,256 5,249,402 1,126,193 2,610,466 (1,619,691) (2,132,463) (407,356) 5,099,807 22 N fp**�H This page intentionally left blank. 23 24 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Net Assets PROPRIETARY FUNDS September 30, 2010 Governmental Enterprise Funds Activities - Utility Golf Aquatic Park Total Enterprise Internal Service ASSETS Current Deposits and investments $ 12,689,273 $ 595,517 $ 3,753,860 $ 17,038,650 $ 5,630,845 Accounts receivable, net of allowance: Billed 1,841,881 - - 1,841,881 - Unbilled 1,759,659 - - 1,759,659 - Other 59,416 16,834 72,879 149,129 22,605 Interest receivable 72,470 2,353 15,276 90,099 39,313 Intergovernmental receivable 330,129 - - 330,129 - Prepaid items 4,543 15,209 19,752 Due from other funds 31,430 - - 31,430 - Inventories, at cost 451,408 76,232 25,596 553,236 111,139 Total current assets 17,240,209 706,145 3,867,611 21,813,965 5,803,902 Noncurrent Restricted assets: Deposits and investments: Construction funds 5,113,204 31,782 5,144,986 158,887 Debt service reserve funds 473,869 378,898 852,767 - Impact fees construction funds 1,677,269 - 1,677,269 Customer deposits 1,627,401 1,627,401 - Future construction - - 1,959,394 Future claims - - 2,252,768 Otherfunds - 83,626 - 83,626 258,390 Total deposits and investments 8,891,743 83,626 410,680 9,386,049 4,629,439 Bond issue costs, net of amortization 80,455 11,402 71,415 163,272 - Advances to other funds 204,071 - - 204,071 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 3,757,904 875,062 Other improvements 5,289,658 17,297,866 22,587,524 - Utility plant in service 90,289,635 - - 90,289,635 - Machinery and equipment 1,469,102 1,680,886 713,697 3,863,685 7,534,935 Construction in progress 2,989,060 - 79,911 3,068,971 175,056 Accumulated depreciation (42,997,909) (4,872,836) (6,712,742) (54,583,487) (4,937,396) Net capital assets 52,909,083 4,658,470 13,943,318 71,510,871 3,647,657 Total noncurrent assets 62,085,352 4,753,498 14,425,413 81,264,263 8,277,096 Total assets 79,325,561 5,459,643 18,293,024 103,078,228 14,080,998 24 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Net Assets PROPRIETARY FUNDS September 30, 2010 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. 2,984,130 Net assets of business -type activities $ 85,495,275 The notes to the financial statements are an integral part of this statement. 25 Governmental Enterprise Funds Activities - Utility Golf Aquatic Park Total Enterprise Internal Service LIABILITIES Current Accounts payable 2,333,498 33,208 114,070 2,480,776 350,585 Accrued liabilities 133,636 37,111 10,059 180,806 1,080,176 Retainage payable 114,597 - - 114,597 - Intergovemmental payables 415 - - 415 - Other current liabilities 37,752 27,549 4,897 70,198 10,556 Compensated absences 287,006 - 42,060 329,066 159,139 Deferred revenue - 45,815 - 45,815 11,534 Due to other funds - 31,430 - 31,430 - Accrued interest payable 29,706 6,755 30,637 67,098 Bonds payable 510,196 530,764 631,535 1,672,495 Customer deposits 1,784,493 - - 1,784,493 Developer deposits 44,128 - - 44,128 - Total current liabilities 5,275,427 712,632 833,258 6,821,317 1,611,990 Noncurrent General obligation bonds payable 254,750 262,614 870,000 1,387,364 - Certificates of obligation bonds payable 5,178,634 485,589 4,425,919 10,090,142 - Compensated absences 99,982 - 17,410 117,392 65,375 Intergovernmental payables 685,113 - - 685,113 - Advances from other funds 924,135 - 924,135 - Other post employment benefits obligation 218,338 - 37,219 255,557 158,112 Net pension obligation 244,401 - 41,662 286,063 197,306 Total noncurrent liabilities 6,681,218 1,672,338 5,392,210 13,745,766 420,793 Total liabilities 11,956,645 2,384,970 6,225,468 20,567,083 2,032,783 NET ASSETS Invested in capital assets, net of related debt 49,543,742 3,404,193 8,212,254 61,160,189 3,620,472 Impact fees restricted for construction 2,610,287 - - 2,610,287 - Unrestricted 15,214,887 (329,520) 3,855,302 18,740,669 8,427,743 Total net assets $ 67,368,916 $ 3,074,673 $ 12,067,556 $ 82,511,145 $ 12,048,215 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. 2,984,130 Net assets of business -type activities $ 85,495,275 The notes to the financial statements are an integral part of this statement. 25 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Expense, Revenues, and Changes in Net Assets PROPRIETARY FUNDS Year Ended September 30, 2010 26 Governmental Enterprise Funds Activities - utility Golf Aquatic Park Total Enterprise Internal Service OPERATING REVENUES Water and sewer service $ 23,188,158 $ $ $ 23,188,158 $ Water and sewer connections. 191,754 191,754 Service charges 848,634 848,634 Inspection fees 10,569 10,569 Assessment revenues 1,950 1,950 Golf course fees and charges - 2,186,837 2,186,837 Aquatic park admissions - 3,316,837 3,316,837 Recreation equipment rental 68,026 68,026 Food, beverage, and gifts 659,808 659,808 Sponsorships - - 35,500 35,500 Other intergovernmental 74,260 65,657 - 139,917 Internal service revenues Insurance premiums - - - 8,765,590 Maintenace services 3,759,204 Computer services 1,883,763 Telephone services - - - 411,469 Miscellaneous revenues 9,312 - 41,974 51,286 242,174 Total operating revenues 24,324,637 2,252,494 4,122,145 30,699,276 15,062,200 OPERATING EXPENSES Claims - - - - 8,341,616 Contractual services 2,147,631 833,207 2,980,838 1,934,028 Water purchases 7,145,638 - 7,145,638 - Wastewater treatment services 4,696,923 - 4,696,923 - Personnel services 5,125,165 - 1,610,478 6,735,643 3,882,895 Golf course sales and service - 1,878,648 - 1,878,648 - Repairs and maintenance 3,140,541 - 1,232 3,141,773 1,293,501 Supplies 266,245 625,960 892,205 1,634,658 Administration fees 1,637,816 - 163,644 1,801,460 - Depreciation 2,951,401 292,912 679,405 3,923,718 785,955 Total operating expenses 27,111,360 2,171,560 3,913,926 33,196,846 17,872,653 Operating income (loss) (2,786,723) 80,934 208,219 (2,497,570) (2,810,453) 26 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Expense, Revenues, and Changes in Net Assets PROPRIETARY FUNDS Year Ended September 30, 2010 NONOPERATING REVENUES (EXPENSES) Investment income Interest and fiscal charges Developer contributions 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 947,929 (1,402,667) (50,124) (62,400) (1,515,191) Governmental (1,402,667) Enterprise Funds (1,515,191) Activities - utility Golf Aquatic Park Total Enterprise Internal Service 191,986 7,059 37,632 236,677 100,420 (202,064) (64,553) (274,966) (541,583) - 271,624 - 271,624 66,728 - - 53,524 53,524 72,393 51 11,382 (29,895) (18,462) 14,810 - 380 (2,163) (1,783) 75,984 261,597 (45,732) (215,868) (3) 330,335 (2,525,126) 35,202 (7,649) (2,497,573) (2,480,118) 947,929 (1,402,667) (50,124) (62,400) (1,515,191) (50,000) (1,402,667) (50,124) (62,400) (1,515,191) 897,929 (3,927,793) (14,922) (70,049) (4,012,764) (1,582,189) 71,296,709 3,089,595 12,137,605 86,523,909 13,630,404 $ 67,368,916 $ 3,074,673 $ 12,067,556 $ 82,511,145 $ 12,048,215 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 integral part of this statement. $ (4,012,764) (1,174,839) $ (5,187,603) 27 CITY OF NORTH RICHLAND HILLS, TEXAS Combining Statement of Cash Flows PROPRIETARY FUNDS Year Ended September 30, 2010 Cash flows from operating activities: Receipts from customers Receipts from interfund services provided Other operating revenue 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 to other funds Interfund loan receipts 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 Developer contributions 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 28 Governmental Enterprise Funds Activities - utility Golf Aquatic Park Totals Internal Service $ 24,060,323 $ 2,144,329 $ 4,085,990 $ 30,290,642 $ - - - - - 14,820,030 308,689 62,647 42,338 413,674 231,026 (17,194,149) (1,869,715) (1,398,468) (20,462,332) (12,896,215) (4,772,374) (1,550,063) (6,322,437) (3,619,718) (1,637,816) (163,644) (1,801,460) 764,673 337,261 1,016,153 2,118,087 (1,464,877) - - - - 947,929 (1,402,667) (50,124) (62,400) (1,515,191) (50,000) 28,878 365,674 394,552 - (1,402,667) (50,124) (62,400) (1,515,191) 897,929 - 53,524 53,524 87,203 805,000 225,000 1,030,000 - (2,851,342) (148,950) (321,047) (3,321,339) (1,438,689) (385,028) (513,212) (560,320) (1,458,560) (232,934) (66,527) (261,232) (560,693) - 272,734 - 272,734 66,728 - 380 380 75,984 (2,391,570) (728,309) (864,075) (3,983,954) (1,208,774) 217,088 5,665 38,956 261,709 120,012 217,088 5,665 38,956 261,709 120,012 (2,783,598) (69,833) 128,634 (2,724,797) (1,655,710) 24,364,614 748,976 4,035,906 29,149,496 11,915,994 $ 21,581,016 $ 679,143 $ 4,164,540 $ 26,424,699 $ 10,260,284 28 CITY OF NORTH RICHLAND HILLS, TEXAS Combining Statement of Cash Flows PROPRIETARY FUNDS Year Ended September 30, 2010 Cash flows from operating activities: Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation expense Other expense (Increase) decrease in accounts receivable (Increase) decrease in intergovernmental receivables (Increase) decrease in inventories (Increase) decrease in prepaid items Increase (decrease) in accounts payable Increase (decrease) in customer deposits payable Increase (decrease) in compensating absences Increase (decrease) in other post employment benefits Increase (decrease) in intergovernmental payable Increase (decrease) in other liabilities Increase (decrease) in net pension obligation Increase (decrease) in deferred revenues Increase (decrease) in accrued liabilities Total adjustments Net cash provided by (used for) operating activities Governmental Enterprise Funds Activities - utility Golf Aquatic Park Totals Internal Service $ (2,786,723) $ 80,934 $ 208,219 $ (2,497,570) $ (2,810,453) 2,951,401 292,912 679,405 3,923,718 785,958 - - - - (24,706) (274,812) 26,600 5,819 (242,393) (11,147) 183,936 - - 183,936 (152,624) (4,803) 757 (156,670) (11,196) 4,103 17,697 1,315 23,115 - 275,404 (16,445) 58,920 317,879 137,228 94,070 - 94,070 - 20,466 3,765 24,231 (5,156) 87,924 14,988 102,912 71,027 45,265 - 45,265 - (4,084) (3,010) 364 (6,730) - 244,401 41,662 286,063 197,306 - (69,108) - (69,108) - 75,946 12,484 939 89,369 206,262 3,551,396 256,327 807,934 4,615,657 1,345,576 $ 764,673 $ 337,261 $ 1,016,153 $ 2,118,087 $ (1,464,877) The notes to the financial statements are an integral part of this statement. 29 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Net Assets FIDUCIARY FUNDS September 30, 2010 O PEB Trust ASSETS Deposits and investments $ 518,660 Total assets 518,660 NET ASSETS Held in trust for other post employment benefits 518,660 Total net assets $ 518,660 The notes to the financial statements are an integral part of this statement. 30 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Revenues, Expenses, and Changes in Net Assets FIDUCIARY FUNDS For the Year Ended September 30, 2010 OPEB Trust ADDITIONS Contributions: Employer $ 500,000 Investment earnings 20,875 Total additions 520,875 DEDUCTIONS Investment expense 2,215 Total deductions 2,215 Change in net assets 518,660 Net assets - beginning - Net assets - ending $ 518,660 The notes to the financial statements are an integral part of this statement. 31 This page intentionally left blank. 32 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2010 Page Note I Summary of Significant Accounting Policies A. Reporting entity 35 B. Government -wide and fund financial statements 35 C. Measurement focus, basis of accounting, and financial statement presentation 36 D. Assets, liabilities, and net assets or fund balance Deposits and investments 38 Receivables and payables 38 Inventories and prepaid items 38 Restricted assets 39 Capital assets 39 Compensated absences 40 Long -term obligations 40 Fund Balance 40 Note II Reconciliation of Government -Wide and Governmental Fund Financial Statements 41 A. Balance sheet reconciliation 41 B. Statement of revenues, expenditures, and changes in fund Balance reconciliation 42 Note III Stewardship, Compliance, and Accountability 44 A. Budgetary information 44 B. Excess expenditures over appropriations 46 C. Deficit fund equity 46 Note IV Detailed Notes on All Funds 46 A. Deposits and investments 46 Deposits 46 OPEB Trust Fund Investment 47 Investments 47 Interest rate risk 48 Custodial credit risk 48 Credit risk 49 B. Receivables 49 Deferred revenue 50 C. Capital assets 51 Construction commitments 53 D. Interfund receivables, payables, and transfers 53 Governmental 54 Proprietary 54 E. Long -term debt 56 General obligation bonds 56 Certificates of obligation 56 Component units 57 Sales Tax Revenue bonds 57 Loans payable 57 Changes in long -term liabilities 58 Defeased debt outstanding 58 33 Note V Other Information 59 A. Risk management 59 B. Contingent liabilities 59 C. Conduit debt obligations 59 D. Post - employment benefits 60 Deferred Compensation Plan 60 Retiree Healthcare Plan 60 E. Employee retirement systems and pension plans 62 Plan description 62 Contribution 62 F. Operating leases 64 G. Condensed Financial Information For Component Units 65 H. Implementation of GASB Statements 65 GASB 54: Fund Balance Reporting and Governmental Fund Type Definitions 65 GASB 59: Financial Instruments Omnibus 65 GASB 60: Accounting and Financial Reporting for Service Concession Arrangements 66 GASB 61: The Financial Reporting Entity: Omnibus -an amendment of GASB Statements No. 14 and No. 34 66 GASB 62: Codification of Accounting and Financial Reporting Guidance in 66 Pre - November 30, 1989 FASB and AICPA Pronouncements 34 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 I. 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 a Council- 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. 1A ( "TIF #1A") was created to provide funding for intersection improvements and the burial of utility lines. TIF #1A improvements will enhance economic revitalization in this area. 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 non - fiduciary 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, interfund 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 35 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 significant extent on user fees and charges for support. Likewise, the primary government is 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, proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statements. 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 and fiduciary 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 City 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 City. The City 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. 36 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 The City reports the following major proprietary funds: The Utility 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 NRH 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. 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. The City also reports for one fiduciary fund. The OPEB Trust Fund accounts for the activities of the long term funding of the City's other post employment benefits provided. These funds are contributed by the City on an annual basis to help offset future costs and outflows for post employment benefits payments. 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. 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 restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then undesignated resources as they are needed. 37 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 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, 2010, 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 IV). Receivables and payables 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." 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, 2010 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. 38 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 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 restricted assets on the balance sheet because their use is limited. The "debt service reserve funds" are used to segregate resources accumulated for 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. In the Utility 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 for a 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 Utility 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 restricted by management for the following: The Crime Control and Prevention District (Special Revenue) Fund contains assets restricted 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 restricted assets will be used to fund those activities until an alternate funding source can be identified (i.e., during the transition period). The Self- Insurance (Internal Service) Fund contains assets restricted for future insurance claims. Funds will be accumulated until needed to cover these 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 restricted 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 restricted 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 City 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 39 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 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: Capitalization Asset Category Useful Life Threshold Buildings and improvements 30 years $ 100,000 Other improvements 30 years $ 100,000 Water and sewer system 33 years $ 100,000 Start -up costs, furniture and fixtures, and certain machinery and equipment 10 years $ 5,000 Firetrucks and ambulances 20 years $ 25,000 Other machinery and equipment including vehicles 3 -6 years $ 5,000- 25,000 *Range is due to different machinery and equipment having different levels of capitalization thresholds within fiscal policy 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. Long -term obligations 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 40 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 purpose. Designations of fund balance represent tentative management plans that are subject to change. The General Fund balances contains multiple designations. The information provided will define each designation. • 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. • 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. • 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. • Radio equipment — funds to purchase capital equipment to upgrade public safety communications. • Hometown litigation — the City is a defendant in a planning and zoning dispute. This contingency will serve for future offset of legal fees and costs. The Crime Control and Prevention District (Special Revenue) Fund fund balance contains a designation for transition. Assets have been designated in an amount equal to the designation. The Crime Control and Prevention District Sales Tax referendum was approved by the citizens to extend for an additional 20 years in May 2010. 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 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 (excluding internal service capital assets) are not financial resources and, therefore, are not reported as assets in governmental funds." The details of the $194,380,010 difference are as follows: Capital assets, net of depreciation (internal service funds excluded) $ 182,294,948 Construction in progress 12,085,062 Net adjustment of increase fund balance - total governmental funds to arrive at net assets - governmental activities $ 194,380,010 41 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 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 $3,795,044 difference are as follows: Miscellaneous revenues $ 24,926 Interest earnings 109,875 Deferred revenue 3,660,243 Net adjustment to increase fund balance - total governmental funds to arrive at net assets - governmental activities $ 3,795,044 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 $9,064,079 difference are as follows: Net assets, internal service funds combined $ 12,048,215 Amount allocated to business -type activities (2,984,136) Net adjustment to increase fund balance - total governmental funds to arrive at net assets - governmental activities $ 9,064,079 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 $(60,679,981) difference are as follows: Bonds payable - short-term $ (5,915,578) Bonds payable - long -term (46,314,470) Loans payable - short-term (384,774) Loans payable - long -term (1,240,310) Accrued interest payable (287,204) Bond issuance costs 483,934 Compensated absences (2,876,891) Other post employment benefits payable (1,956,992) Net pension obligation (2,187,696) Net adjustment to reduce fund balance - total governmental funds to arrive at net assets - governmental activities $ (60,679,981) 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 $5,249,402 difference are as follows: 42 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 Capital outlay - assets acquisitions $ 11 ,057,788 Depreciation expense (5,808,386) Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ 5,249,402 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 $1,126,193 difference are as follows: Gain (loss) on disposal of assets (134,527) Contribution of Capital Assets from outside organziations 1,260,720 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ 1,126,193 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 $2,610,466 difference are as follows: Investment income not available for current financial resources $ (49,747) Deferred revenue that is earned in but not received 3,062,632 Allowance for Muncipal Court Receivables (427,345) Miscellaneous 24,926 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ 2,610,466 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 $(1,619,691) difference are as follows: Changes in: Accrued interest /interest expense $ 230,451 Other post employment benefits (780,721) Net pension obligation (938,414) Compensated absences (131,007) Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ (1,619,691) 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 $(2,132,463) difference are as follows: 43 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 Debt issued or incurred: General obligation bonds $ (5,850,000) Certificates of obligation bonds (2,910,000) Loan proceeds (426,475) Principal repayments: General obligation bonds 3,670,000 Certificates of obligation bonds 1,951,516 Sales tax revenue bonds 995,000 Arbritrage liability 165,867 Loan repayments 498,803 Amortized bond issuance cost expense (227,174) Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ (2,132,463) Another element of that reconciliation states that "the net revenue (expense) of internal service funds is reported with governmental activities." The details of the $(407,356) difference are as follows: Change in net assets - internal service funds combined $ (1,582,189) Income (Expenses) reflected in business -type activities 1,174,833 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ (407,356) 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 yearend. 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 City budget appropriations were increased by $1,542,667. 44 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 Revision Increase Legally Adopted Fund Original Final (Decrease) Explanation General Fund $ 38,631,516 $ 38,932,584 $ 301,068 Prior year encumbrances rolled into FY09 /10 accountforthe majorityof this increase. Additionally, legal expenditures increased during the year as a result of ongoing litigation and contributed to this variance. General Debt $ 8,320,141 $ 9,233,288 $ 913,147 In 2010 a positive fiscal opportunity allowed for Service the defeasance of older certificate of obligation debt resulting in the needed increase in appropriations for principal and interest payments. Promotional $ 237,301 $ 245,496 $ 8,195 The increase is entirely due to prior year encumbrances rolled into FY09 /10. Donations $ 165,009 $ 182,586 $ 17,577 The majority of the increase resulted from a prior year encumbrance rolled into FY09 /10 utilitzed for special events. Special $ 256,921 $ 436,401 $ 179,480 Forfeited fund expenditures increased as a Investigations resultof prior year encumbrances rolled into FY09 /10 as well as additional costs to fund the Community Resource Coordinator. Drainage Utility Fund $ 737,219 $ 825,020 $ 87,801 Bond defeasance accounts for the majority of the expenditure increase in this fund. Other minor expenditures taking place within this fund account for a slight portion of this increase. Parks and $ 4,739,893 $ 4,623,197 $ (116,696) The decrease in this fund is primarilydue to Recreation revising down debtservice as a result of defeasance of existing debt. Salary savings occuring within the Parks & Public Grounds division during the year also contributed to this decrease. Crime Control $ 4,450,764 $ 4,376,342 $ (74,422) Salary savings in the Uniform Patrol and District Detention Services divisions contributed to the decrease in operating expenditures forthis fund. Gas Development $ 460,000 $ 684,022 $ 224,022 The majority of the increase resulted from a transfer to debt service for the purchase of commercial property occuring during 2009. Traffic Safety $ 50,000 $ 52,495 $ 2,495 The entire variance is due to increases in capital expenditures for traffic enforcement. Total $ 58,048,764 $ 59,591,431 $ 1,542,667 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. 45 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 B. Excess expenditures over appropriations For the year ended September 30, 2010, expenditures exceeded appropriations at the fund level (the legal level of budgetary control) of ($1,111,405) for General Debt Service Fund. These expenditures were funded by utilizing fund balance. Defeasance of debt in 2010 caused the total expenditure in excess of appropriations. C. Deficit fund equity The Grant and ARRA Grant Funds had a deficit fund balance of $77,283 and $12,337 respectively as of September 30, 2010. 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 balances will correct upon receipt of receivable and recording of revenues 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, 2010 the carrying amount of the City's demand deposits and cash on hand was $10,371,780. 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, 2010, the City had $1.1 million in Golf Course funds which were uninsured or uncollateralized. As of September 30, 2010, 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. 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. This section of this page is intentionally left blank. Notes are continued on the next page. 46 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 The City held the following cash, cash equivalents, and investments as of September 30, 2010: Primary Government Component Units Governmental Business -type Total Primary 11F #1 TIF #1A TIF #2 Cash on hand (petty cash, cashier tills) $ 5,902 $ 2,900 $ 8,802 $ - $ - $ - Demand Deposit Accounts 2,181, 097 5,339,448 7,520,545 151,640 896,459 1,803,136 Certificates of Deposit 822,640 385,560 1,208,200 19,040 - 2,372,760 U.S. Treasury Notes 7,771,714 2,890,359 10, 662, 073 124,407 - 2,673,727 Ovemight Investments 33,058,055 7,143,379 40,201,434 552,022 - 5,835,811 U.S. Agencies 23, 734, 744 10, 663, 053 34, 397, 797 498,764 - 19, 210, 672 Total deposits and i mestments $67,574,152 $ 26, 424, 699 $ 93, 998, 851 $1,345,873 $ 896,459 $31,896,106 OPEB Trust Fund Investments - The City has contracted with Public Agency Retirement Services (PARS) for trust administration and Union Bank serves as the trustee for all investments of the OPEB Trust Fund. The OPEB Plan does not have a formal policy for custodial credit risk. As of September 30, 2010 all investments are registered in the name of the OPEB Plan's custodian established through a master trust custodial agreement. The OPEB Trust Fund investments are carried at fair value of $518,660 as of September 30, 2010. The City's funds are commingled in a pool of investments that are invested in equity, money market and fixed income mutual funds. The investment strategy of the OPEB Trust Fund is to provide current income with capital appreciation as a secondary objective. The City has determined that currently all securities purchased for the OPEB Trust Fund have readily ascertainable market values and shall be easily marketable. The credit rating and weighted average maturity is not available for the pool. 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, FAMN — Farmer Mac Domestic Medium Term Bonds, FNMA — Federal National Mortgage Discounted Notes, and USTR — U.S. Treasury Notes. 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, 2010, 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. 47 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 TexPool falls under the purview of the Texas Comptroller of Public Accounts ( "Comptroller ") who is responsible for oversight of TexPool operations. LOGIC and TexSTAR have 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: Primary Government Component Units Tax Increment Tax Increment Rating Governmental Business -type Financing Financing Investment Type WAM Rating Agency Activities Activities Total District #1 District #2 Overnight: TexPool N/A AAAm S &P $ 27,797,569 $ 4,987,974 $ 32,785,543 $ 453,270 $ 3,607,993 LOGIC N/A AAAm S &P 4,444,014 1,991,922 6,435,936 91,159 941,979 TexSTAR N/A AAAm S &P 816,472 163,483 979,955 7,593 1,285,839 Total overnight $ 33,058,055 $ 7,143,379 $ 40,201,434 $ 552,022 $ 5,835,811 U. S. Treasury Notes - USTR 516 TSY S &P $ 7,771,714 $ 2,890,359 $ 10,662,073 $ 124,407 $ 2,673,727 Total US Treasury Notes 7,771,714 ,890,359 10,662,073 124,407 2,673,727 CD's - Banks 510 A -1 S &P $ 822,640 $ 385,560 $ 1,208,200 $ 19,040 $ 2,372,760 Total Certificates of Deposit $ 822,640 $ 385,560 $ 1,208,200 $ 19,040 $ 2,372,760 U.S. Agencies: FHLB 303 AAA S &P $ 9,369,061 $ 4,253,151 $ 13,622,212 $ 198,510 $ 7,774,651 FMDN 584 A -1+ S &P 5,422,431 2,348,246 7,770,677 119,335 4,435,797 FNMA 398 AAA S &P 6,519,056 2,925,468 9,444,524 124,810 6,491,126 FAMN 287 Aai Moody's 1,828,881 857,172 2,686,053 42,329 384,078 FFCB 201 AAA S &P 595,315 279,016 874,331 13,779 125,020 Total U.S. Agencies $ 23,734,744 $ 10,663,053 $ 34,397,797 $ 498,764 $ 19,210,672 Total Portfolio 282 $ 65,387,153 $ 21,082,351 $ 86,469,503 $ 1,194,233 $ 30,092,970 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 730 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 37 months or less, with exception of one Certificate of Deposit Account Registry Service CD at 45 months. 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 48 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 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 a third -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% The percentages as shown reflect the requirement based on market value of the pledged securities. 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 Non -major Total Accounts $1,034,335 $ 99,801 $ 1,134,136 Propertytaxes 615,094 - 615,094 Other taxes 1,817,388 1,507,850 3,325,238 Total $ 3,466,817 $1,607,651 $ 5,074,468 Allowance (950,745) (2,345) (953,090) Total(net of allowance) $2,516,072 $1,605,306 $ 4,121,378 49 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 Proprietary Funds: Aquatic Internal Utility Golf Park Total Service Accounts $ 3,799,246 $ 22,758 $ 72,879 $ 3,894,883 $ 22,605 Total $ 3,799,246 $ 22,758 $ 72,879 $ 3,894,883 $ 22,605 Allowance (138,290) (5,925) - (144,215) - Total (net of allowance) $ 3, 660,956 $ 16,834 $ 72,879 $ 3,750,669 $ 22,605 Deferred Revenue 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) $ 202,203 $ - Ambulance billing receivables (General Fund) 291,595 - Recreation memberships /fees (General Fund) - 60,261 Escrow Deposits /customer deposits (General Gund) - 44,633 Hotel Occupancy Tax Receivable (Promotional Fund) 35,286 - Deferred Revenue (Park and Recreation Fund) 146,797 - Special assessments (General Capital Projects Fund) 140,416 - Grant proceeds (Grant Fund) 128,980 2,500 Accounts (developer) receivable (General Capital Projects Fund) 2,390,741 36,825 Accounts (developer) receivable (General Capital Projects Fund) 324,226 - Total deferred /unearned revenue for governmental funds $ 3,660,244 $144,219 Reconciliation of unearned revenues to the Government -wide Statement of Net Assets is as follows: Governmental activities unearned revenue is: Governmental activities for unearned revenue is: Unearned Governmental funds $ 144,219 Internal service funds 11,535 Total unearned revenue $ 155,754 Business -type activities for unearned revenue is: Business -type activities for unearned revenue is: Unearned Deposits, Check and Gift Certificates $ 43,301 Store Credit 2,514 Total deferred /unearned revenue for business funds $ 45,815 50 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 C. Capital assets Capital asset activity for the year ended September 30, 2010 was as follows: Component units: (Tax Increment Financing District #2) Beginning Ending Balance Increases Decreases Balance Capital assets, nondepreciable Construction in progress $ - $ 1,706,584 $ 187,149 $ 1,519,435 Total nondepreciable $ - $ 1,706,584 $ 187,149 $ 1,519,435 Primary Government Beginning Ending Governmental activities: Balance Increases Decreases Balance Capital assets, nondepreciable Land $ 72,111,606 $ 3,438,159 $ - $ 75,549,765 Works of art 72,491 179,804 - 252,295 Construction in progress 6,219,634 12,402,707 6,537,279 12,085,062 Total nondepreciable 78,403,731 16,020,670 6,537,279 87,887,122 Capital assets, depreciable: Buildings 39,995,259 19,956 703,557 39,311,658 Other improvements 145,926,931 2,386,654 - 148,313,585 Machinery and equipment 22,583,859 2,648,021 3,167,579 22,064,301 Total depreciable 208,506,049 5,054,631 3,871,136 209,689,544 Less accumulated depreciation for: Buildings (14,657,676) (1,087,713) (21,353) (15,724,036) Other improvements (65,002,645) (4,128,801) (3,618) (69,127,828) Machinery and equipment (16,250,120) (1,402,800) (2,962,658) (14,690,262) Total accumulated depreciation (95,910,441) (6,619,314) (2,987,629) (99,542,126) Total depreciable - net 112,595,608 (1,564,683) 883,507 110,147,418 Governmental activities - net $ 190,999,339 $14,455,987 $7,420,786 $ 198,034,540 This section of this page is intentionally left blank. Notes are continued on the next page. 51 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 Primary Government Beginning Ending Business -type activities: Balance Increases Decreases Balance Capital assets, nondepreciable Land $ 2,526,639 $ - $ - $ 2,526,639 Construction in progress 1,838,539 3,368,050 2,137,618 3,068,971 Total nondepreciable 4,365,178 3,368,050 2,137,618 5,595,610 Capital assets, depreciable: Buildings 3,757,904 - - 3,757,904 Utility Plant 88,881,597 1,408,038 - 90,289,635 Other improvements 22,515,965 71,557 - 22,587,522 Machinery and equipment 3,335,897 598,751 70,962 3,863,686 Total depreciable 118,491,363 2,078,346 70,962 120,498,747 Less accumulated depreciation for: Buildings (1,702,035) (128,986) - (1,831,021) Utility Plant (38,741,814) (2,708,975) - (41,450,789) Other improvements (8,102,647) (756,426) - (8,859,073) Machinery and equipment (2,129,259) (379,146) (65,799) (2,442,606) Total accumulated depreciation (50,675,755) (3,973,533) (65,799) (54,583,489) Total depreciable - net 67,815,608 (1,895,187) 5,163 65,915,259 Business -type activities - net $ 72,180,786 $ 1,472,863 $2,142,781 $ 71,510,868 The component unit, Tax Incremental Financing District #2, began a construction project for the new municipal recreation center. Depreciation expense was charged to functions /programs of the primary government as follows: Governmental activities: General government $ 329,359 Public safety 742,004 Culture and recreation 1,172,549 Public works 3,589,447 Internal services 785,956 Total depreciation expense - governmental activities $ 6,619,314 Business -type activities: Utility $ 2,951,403 Golf course 342,725 Aquatic park 679,405 Total depreciation expense - business -type activities $ 3,973,533 52 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 Construction commitments The City has active construction projects as of September 30, 2010. The projects include street construction, widening, and streetscaping; as well as construction of drainage facilities, parks and park improvements, and municipal facilities. At year -end the City's commitments with contractors were as follows: Expended to Project September 30, Authorization 2010 Committed Streets, drainage, public safety, park improvements, and utility improvements $ 111,721,941 $ 59,988,011 $51,733,930 D. Interfund receivables, payables, and transfers At September 30, 2010, 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 Utility 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 Utility 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 and ARRA Grant Fund for a reimbursable grant activity totaling $170,000. 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: Governmental activities: Due to Due from Total General Fund rant Fund ARRA Grant Fund 20,000 Total $ 170 ,000 Business -type activities: Due to Due from Total Utility Fund Golf Fund $ 3 1,4 30 Total $ 31,430 Total for all funds $ 201,430 Advances to other funds activity are expected to be reimbursed during a longer period of one year. The General Fund and the Utility Fund have advanced funds to Golf Fund for various equipment and machinery purchases. 2010 advances to other funds ending balances were as follows: 53 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 Governmental activities: Advances from Advances to Total General Fund Golf fund $ 720,064 Total $ 720,064 Business -type activities: Advances from Advances to Total Utility Fund Golf Fund $ 204,071 Total $ 204,071 Total for all funds $ 924,135 Governmental In 2010, General Fund received $1,402,667 for payment from Utility Fund for payment in lieu of taxes and franchise fees. Each year funds transfer funds into the General Debt Service Fund to help pay for principal retirement and interest expenditures associated with their funds. These transfers total $1,339,162 and were transferred in from Gas Development Fund, Drainage Utility Fund, and Parks and Recreation Development Fund. Another set of transfers went toward the construction or acquisition of capital assets for general capital projects from Parks and Recreation Development Corporation, Gas Development Fund, Golf Fund, Self Insurance Fund, and General Fund totaling $1,463,476. Non -major Governmental funds had transfers totaling $3,952,787. Of this amount, a transfer totaling $2,522,920 to Economic Development Fund from General Fund was for future development and various undesignated future projects. This transfer was appropriated to help build the economic health of the City at large. Other significant transfers include $250,000 to Crime Control District from General Fund for annual support and $995,811 from Parks and Recreation Development Corporation Fund to Parks Sales Tax Revenue Bond Debt Service for annual debt service requirements for the revenue bonds. Proprietary The General Fund transferred to the Internal Services funds a total of $947,929 in 2010. Of this amount, $115,800 was for a City Council approved transfer to rebuild Self Insurance Fund reserves. This transfer is the final transfer for this plan. Other transfers to Self Insurance, Facilities and Construction, and Fleet Services were transfers of additional support for construction projects and long term financial plans for these services. The total of these other transfers was $832,129. This section of this page is intentionally left blank. Notes are continued on the next page. 54 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 Transfers In /Out amounts for Governmental and Proprietary Funds are as follows: Governmental Transfer In to Transfer Out of Amount General Fund Utility Fund $ 1,402,667 Subtotal General Fund $ 1,402,667 General Debt Service Gas Development Fund $ 346,084 Drainage Utility Fund $ 819,310 Parks and Rec Dev Fund $ 173,768 Subtotal General Debt Service $ 1,339,162 General Capital Projects Parks and Rec Development Fund $ 75,414 Gas Development Fund $ 337,938 Golf Fund $ 50,124 Self Insurance Fund $ 50,000 General Fund $ 950,000 Subtotal Gen Cap Projects $ 1,463,476 Non -Major Governmental Parks and Rec Dev Corp Aquatic Park Fund $ 62,400 Crime Control District General Fund $ 250,000 Grant Fund General Capital Projects $ 2,000 Economic Development Fund General Fund $ 2,522,920 Parks and Rec Dev Corp $ 119,656 Sales Tax Revenue Bond Debt Service Parks and Rec Dev Corp $ 995,811 Subtotal Non -major Governmental Funds $ 3,952,787 Grand Total Governmental Funds $ 8,158,092 Business -type Activities Transfer In to Transfer Out of Amount Internal Service Funds Self Insurance Fund General Fund $ 215,800 Facilities and Construction Fund General Fund $ 200,000 Fleet Services Fund General Fund $ 200,000 Information Services General Fund $ 332,129 Subtotal Internal Service Funds $ 947,929 Grand Total Business -type Activities $ 947,929 Grand Total Government Wide $ 9,106,021 55 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 E. Long -term debt General Obligation Bonds 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, $5,850,000 in new general obligation bonds was issued. The City issued $5,550,000 bonds for street improvements in various locations throughout the city and $300,000 in drainage improvements in the Meadowview Estates area. 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. Annual debt service requirements to maturity for general obligations bonds are as follows: Year Ending Governmental Activities Business -type Activities Component Units September30, Principal Interest Principal Interest Principal Interest 2011 $3,670,000 1,643,185 __F_ 85,000 64,310 5,000 $11,413 2012 3,820,000 1,440,866 210,000 49,688 45,000 10,538 2013 3,445,000 1,291,627 215,000 42,244 45,000 8,963 2014 3,460,000 1,161,528 210,000 34,710 45,000 7,388 2015 3,440,000 1,028,296 205,000 26,845 45,000 5,700 2016 -2020 13,250,000 3,376,644 565,000 32,073 120,000 7,200 2021 -2025 7,170,000 1,348,884 0 0 0 0 2026 -2030 3,470,000 289,714 0 0 0 0 $41,725,000 $11,580,744 $1,890,000 $249,870 $305,000 $51,202 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 2010, new CO's were issued in the amounts of $19,800,000 for component units, $2,910,000 for governmental activities, $805,000 for the Utility Fund and $225,000 for the Aquatic Fund. Interest rates on the outstanding CO's range from 2.75% 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 Business -type Activities Component Units September 30, Principal Interest Principal Interest Principal Interest 2011 $ 900,000 $ 330,999 $ 750,000 $ 430,484 $ 1,835,000 $1,196,470 2012 895,000 271,322 710,000 397,550 1,835,000 975,450 2013 885,000 234,741 710,000 372,176 1,835,000 910,250 2014 725,000 202,134 715,000 347,267 1,835,000 847,356 2015 720,000 173,500 715,000 322,044 1,835,000 787,490 2016 -2020 1,980,000 578,177 3,420,000 1,218,818 9,110,000 3,034,474 2021 -2025 1,240,000 315,969 2,700,000 607,651 8,540,000 1,421,864 2026 -2030 910,000 84,130 1,565,000 126,254 2,855,000 106,570 $ 8,255,000 $2,190,972 $11,285,000 $ 3,822,244 $ 29,680,000 $ 9,279,924 56 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 Component Unit Certificates of Obligation - 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 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 (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 $2,640,000 in revenue bonds outstanding. Interest rates on outstanding sales tax revenue bonds range from 4.5% 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 2011 $ 995,000 $ 123,254 2012 1,030,000 78,479 2013 405,000 30,789 2014 105,000 11,026 2015 105,000 5,513 $ 2,640,000 $ 249,061 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 December 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 $1,625,084. The loan payable debt service requirements to maturity are as follows: Year Ending Governmental Activities September 30, Principal Interest 2011 $ 384,774 $ 55,107 2012 399,547 40,334 2013 415,082 24,761 2014 402,379 8,700 2015 23,302 147 $ 1,625,084 $ 129,049 57 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 Changes in long -term liabilities Long -term liability activity for the year ended September 30, 2010, is reflected in the following tables. Beginning Ending Due Within Balance Additions Reductions Balan O n e Yea Governmental Activities: Bonds Payable General Obligation Bonds $ 39,810,000 $ 5,850,000 $3,935,000 $41,725,000 $3,670,000 Certificates of Obligation 7,228,758 2,910,000 1,883,758 8,255,000 900,000 Sales Tax Revenue Bonds 3,600,000 - 960,000 2,640,000 995,000 Loans Payable 1,549,766 426,475 351,157 1,625,084 384,774 Deferred Loss on Refunding (527,888) - (51,198) (476,690) - Premium on Bond Issues 64,030 42,075 5,249 100,856 - Discounton Bond Issues (15,463) - (1,345) (14,118) - Arbitrage Liability 165,867 - 165,867 - - Compensated Absences 2,975,553 438,294 312,442 3,101,405 2,072,749 Total Governmental Activities $ 54,850,623 $ 9,666,844 $ 7,560,930 $56,956,537 $ 8,022,523 Business -Type Activities: Bonds Payable General Obligation Bonds $ 2,350,000 $ - $ 460,000 $ 1,890,000 $ 485,000 Certificates of Obligation 11,253,560 1,030,000 998,560 11,285,000 750,000 Deferred Loss on Refunding (42,924) - (3,230) (39,694) - Premium on Bond Issues 12,955 4,939 928 16,966 - Discount on Bond Issues (2,271) - (304) (2,271) - Compensated Absences 422,226 59,394 35,162 446,458 329,066 Total Business -Type Activities $ 13,993,546 $ 1,094,333 $1,491,116 $13,596,459 $1,564,066 Component Unit Activities: Bonds Payable General Obligation Bonds $ 305,000 $ - $ - $ 305,000 $ 5,000 Certificates of Obligation 10,570,280 19,800,000 690,280 29,680,000 1,835,000 Deferred Loss on Refunding (6,113) - (719) (5,394) - Premium on Bond Issues 5,717 94,936 6,719 93,934 Discount on Bond Issues (534) - (63) (471) - Total Component Unit Activities $ 10,874,350 $19,894,936 $ 696,217 $30,073,069 $1,840,000 Defeased Debt Outstanding In prior years, the City defeased certain general obligation and other bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. $3.29 million of bonds outstanding are considered defeased. 58 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 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, 2010, 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 $6,829,329 in the aggregate for a 12- month period beginning on January 1, 2010. Changes in the balances of claims liabilities during the past two years are as follows: 2010 2009 Unpaid claims, beginning of year 840,238 1,883,712 Incurred claims (including IBNR) 8,542,527 6,473,064 Claim expense (8,341,616 (7,516,538 Unpaid claims, end of year $ 1,041,149 $ 840,238 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. 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. 59 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 As of September 30, 2010, 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, 2010, 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 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, 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 60 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 Benefits as determined annually by the City's council members. For fiscal year 2010, the City contributed a total of $1,477,340 to the plan for current premiums. Of the $1,477,340, $500,000 was contributed to the OPEB Trust in addition to regular participation and health insurance premium activity. 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: 2010 2009 Annual required contribution $ 2,419,000 $ 2,326,000 Interest on net OPEB obligation 64,000 - Adjustment to annual required contribution (51,000) - Annual OPEB cost (expense) 2,432,000 2,326,000 Contributions made (1,477,340) (910,000) Increase (Decrease) in net OPEB obligation 954,660 1,416,000 Net OPEB obligation- beginning of year 1,416,000 - Net OPEB obligation -end of year The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2010: Percentage Fiscal Annual of Annual Year OPEB OPEB Cost Net OPEB Ended Cost Contributed Obligation 9/30/2009 $ 2,326,000 39.10% $ 1,416,000 9/30/2010 $ 2,432,000 60.75% $ 2,370,660 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 %. 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 61 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 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, 2010, was closed twenty -nine years. E. Employee retirement systems and pension plans Plan Description 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 a publicly - 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 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. 62 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 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 December 31, 2008 December 31, 2009 Actuarial Cost Method Projected Unit Credit Projected Unit Credit Amortization Method Level Percent of Payroll Level Percent of Payroll GASB 25 Equivalent Single 30 years: closed period 29 years: closed period Amortization Period Amortization Period for new 30 years 30 years Gains /Losses Asset Valuation Method Amortized Cost Amortized Cost Actuarial Assumptions: Investment Rate of Return 7 %" 7 %* Projected Salary Increases Varies by age and service Varies by age and service "Includes Inflation at 3% 3% Cost -of- Living Adjustments 2.1% 2.1% 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. 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. The changes in actuarial funding method and assumptions adopted for the 2010 valuation resulted in an unfunded actuarial accrued liability ( "UAAL ") of $38,460,797, which represents an increase over an actuarial value of assets of $87,571,762 and in actuarial /accrued liability of $126,032,523. The funded ratio of the city's plan dropped from 69.51 % to 69.48% as a result of the increased UAAL. The City's contributions to the plan were $4,491,126, $4,078,510, and $4,057,393, for the years ended September 30, 2010, 2009, and 2008, respectively, in accordance with actuarially determined requirements. Contributions by the City were 15.90% (phase in rate) for the months in calendar year 2010 and 14.26% for the months in calendar year 2009. The total covered payroll in the current fiscal year was $29,618,737. 63 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 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: 2010 2009 2008 Annual required contribution $5,895,498 $5,327,791 $4,057,393 Interest on net pension obligation 93,696 - - Adjustment to net pension obligation (76,284) - - Annual Pension cost (expense) 5,912,910 5,327,791 4,057,393 Contributions made (4,491,126) (4,078,510) (4,057,393) Increase (Decrease) in net pension obligation 1,421,784 1,249,281 Net pension obligation- beginning of year 1,249,281 - Net pension obligation -end of year $2,671,065 $1,249,281 $ - Annual pension cost and percentage of pension cost contributed are as follows: Percentage Fiscal Annual of Annual Year Pension Pension Cost Net Pension Ended Cost Contributed Obligation 9/30/2010 $ 5,895,498 76% $ 2,671,066 9/30/2009 $ 5,327,791 76% $ 1,249,281 9/30/2008 $ 4,057,394 100% $ - F. 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 for a 36 month term. Year Ending September 30, 2010 $ 94,891 2011 94,891 2012 86,984 Total minimum payments required $ 276,766 This section of this page is intentionally left blank. Notes are continued on the next page. 64 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 G. Condensed Financial Information For Component Units Condensed financial information for all component units is presented below: Condensed Schedule of Net Assets: TIF TIF TIF #1 #1A #2 Total ASSETS Current $ 1,347,865 $ 107,170 $ 10,437,998 $ 11,893,033 Noncurrent 2,910 901,956 23,208,655 24,113,521 Total assets 1,350,775 1,009,126 33,646,653 36,006,554 LIABILITIES Current 118,042 118,926 2,109,222 2,346,190 Noncurrent 288,741 889,795 27,054,533 28,233,069 Total liabilities 406,783 1,008,721 29,163,755 30,579,259 NET ASSETS $ 943,992 $ 405 $ 4,482,898 $ 5,427,295 Condensed Schedule of Revenues, Expenses, and Changes in Net Assets: TIF TIF TIF #1 #1A #2 Total Revenues $ 237,906 $ 405 $ 2,892,647 $ 3,130,958 Expenses 9,401 - 588,445 597,846 Change in net assets 228,505 405 2,304,202 2,533,112 Net assets - beginning 715,487 - 2,178,696 2,894,183 Net assets - ending $ 943,992 $ 405 $ 4,482,898 $ 5,427,295 H. Implementation of future GASB Statements GASB 54: Fund Balance Reporting and Governmental Fund Type Definitions GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, addresses the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. This statement establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. Additionally, the statement clarifies the definitions of the general fund, special revenue fund type, capital projects fund type, debt service fund type, and permanent fund type. This statement is effective for the City in fiscal year 2011. GASB 59: Financial Instruments Omnibus GASB Statement No. 59, Financial Instruments Omnibus, was issued in June 2010 to update and improve existing standards regarding financial reporting and disclosure requirements of certain financial instruments and external investment pools for which significant issues have been identified in practice. The standard is intended to improve financial reporting by providing more complete information, by improving consistency of measurements, and by providing clarifications of existing standards; applying the reporting provisions of Statement 31 for interest - earning investment contracts to unallocated insurance contracts improves consistency of investment measurements that are 65 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2010 reported by pension and other postemployment benefit plans; emphasizing the applicability of SEC requirements to 2a7 -like external investment pools provides practitioners with improved guidance; limiting interest rate risk disclosures for investments in mutual funds, external investment pools, and other pooled investments to debt investment pools provides better guidance regarding the applicability of interest rate risk disclosures; and finally, addressing the applicability of Statement 53 to certain financial instruments refines which financial instruments are within the scope of that Statement. This statement is effective for the City in fiscal year 2011. GASB 60: Accounting and Financial Reporting for Service Concession Arrangements GASB Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements, was issued in December 2010 to improve financial reporting by addressing issues related to service concession arrangements (SCAs), which are a type of public - private or public - public partnership. The standard addresses SCAs in which there is an arrangement between a transferor (a government) and an operator (governmental or nongovernmental entity) in which (1) the transferor conveys to an operator the right and related obligation to provide services through the use of infrastructure or another public asset (a "facility ") in exchange for significant consideration and (2) the operator collects and is compensated by fees from third parties. The statement also includes required disclosures about the SCAs. This standard becomes effective for the City in fiscal year 2013. GASB 61: The Financial Reporting Entity. Omnibus —an amendment of GASB Statements No. 14 and No. 34 GASB Statement No. 61, The Financial Reporting Entity: Omnibus —an amendment of GASB Statements No. 14 and No. 34, was issued in November 2010 to improve financial reporting for a governmental reporting entity. The standard modifies certain requirements for inclusion of component units, amends criteria for blending, and clarifies the reporting of equity interests in legally separate entities. This standard becomes effective for the City in fiscal year 2013. GASB 62: Codification of Accounting and Financial Reporting Guidance in Pre - November 30, 1989 FASB and AICPA Pronouncements GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance in Pre - November 30, 1989 FASB and AICPA Pronouncements, was issued in December 2010 to incorporate into the GASB's authoritative literature certain accounting and financial reporting guidelines that is included in Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board Opinions and Accounting Research Bulletins of the American Institute of Certified Public Accountants' (AICPA) Committee on Accounting Procedure issued on or before November 30, 1989, which does not conflict with or contradict GASB pronouncements. This standard becomes effective for the City in fiscal year 2013. The City has not yet determined the effect on the City's financial statement or disclosures upon implementation of these new accounting standards. 66 REQUIRED SUPPLEMENTARY INFORMATION 67 This page intentionally left blank. 68 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 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% 2009 87,571,726 126,032,523 38,460,797 69.48% 29,618,737 129.85% Note: The Schedule of Funding Progress summarizes the actuarial value of the plan's assets and actuarial accrued liability as of December 31, 2009 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, 2009, the plan's funded ratio dropped from 69.51 % to 69.48 %. 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, 2009, the plan's ratio of the UAAL to its covered payroll decreased from 138.70% to 129.85 %. 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 2010 2009 2008 2007 2006 City's annual contribution stated as a percentage of covered payroll 17.26% 15.50% 13.50% 13.63% 13.20% Note Source: TMRS Comprehensive Annual Report for the Year Ending December 31, 2009, Actuarial Section and City records. 69 CITY OF NORTH RICHLAND HILLS, TEXAS Required Supplementary Information North Richland Hills Other Post Employment Benefits Schedule of Funding Progress Unfunded Valuation Actuarial Dated Actuarial Actuarial Accrued Annual UAAL December Value of Accrued Liablity Covered as % of 31, Assets Liability (UAAL) Fund Ratio Payroll Payroll 2009 $ - $ 37,107,000 $ 37,107,000 0.00% $ 29,762,000 124.68% CITY OF NORTH RICHLAND HILLS, TEXAS Required Supplementary Information North Richland Hills Other Post Employment Benefits Schedule of Employer Contributions Valuation Dated December Annual OPEB Percentage Net OPEB 31, Cost Contributed Obligation 2009 $ 2,326,000 39.1% $ 1,416,000 2010 $ 2,432,000 60.8% $ 2,370,660 70 CITY OF NORTH RICHLAND HILLS, TEXAS Required Supplementary Information (unaudited) Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget (Non -GAAP Basis) and Actual GENERALFUND For the Year Ended September 30, 2010 Budgeted Amounts Variance with Final Budget Positive Original Final A (Negative) REVENUES Taxes Property taxes (penalties & interest included) $ 14,545,724 $ 14,714,251 $ 14,653,579 $ (60,672) City sales taxes 8,377,626 8,182,393 8,423,382 240,989 Mixed beverage taxes 130,000 112,200 118,253 6,053 Franchise taxes 4,540,944 4,316,200 4,610,148 293,948 Sub -total Taxes 27,594,294 27,325,044 27,805,362 480,318 Fines and forfeitures 2,418,000 2,121,200 2,631,813 510,613 Liscenses and permits 1,055,750 1,208,373 1,301,823 93,450 Charges for services 3,282,231 3,303,358 2,997,039 (306,319) Intergovernmental 2,628,721 2,628,721 2,628,973 252 Miscellaneous 1,125,647 1,017,756 863,587 (154,169) Sub -total Non -Tax Revenues 10,510,349 10,279,408 10,423,235 143,827 Appropriations from fund balances Legal settlement - 196,301 196,301 - Insurance Reserves 115,800 115,800 115,800 Golf Course Loans 392,000 392,000 392,000 Retirement Conversion 120,000 120,000 120,000 CCD Designated Reserves - - - Court Technology Funds 232,885 232,885 Utility Assistance Program 64,500 64,500 Previous Year Encumbrances - 206,646 206,646 Sub -Total Appropriations 627,800 1,328,132 1,328,132 TOTAL REVENUES 38,732,443 38,932,584 39,556,729 624,145 EXPENDITURES City Council 126,318 126,318 87,871 38,447 City Manager 510,879 427,249 413,719 13,530 Communications 493,646 512,762 472,471 40,291 City Secretary 498,448 499,737 448,543 51,194 Legal 347,884 647,884 517,378 130,506 Human Resources 103,678 109,678 107,312 2,366 Finance 738,395 747,516 699,961 47,555 Budget & Research 360,094 360,094 355,273 4,821 Municipal Court 1,217,283 1,234,796 1,182,253 52,543 Planning and Inspections 909,329 909,329 877,091 32,238 Economic Development 179,995 179,995 180,261 (266) Library 1,912,924 1,918,368 1,855,966 62,402 Neighborhood Services 1,576,225 1,585,422 1,390,725 194,697 Public Works 3,611,554 3,622,766 3,414,498 208,268 Parks & Recreation 2,645,257 2,643,178 2,369,824 273,354 Police 10,063,064 10,101,695 9,779,532 322,163 Emergency Management 766,207 788,383 691,162 97,221 Fire 9,284,333 9,310,208 9,079,202 231,006 Building Services 491,893 491,893 491,893 - Non- Departmental 1,786,310 1,841,884 2,324,365 (482,481) Sub -Total Departments 37,623,716 38,059,155 36,739,300 1,319,855 Reserves & Other Expenditures Reserves 615,800 388,929 1,238,929 (850,000) Golf Course Loans 392,000 392,000 392,000 Legal settlement - 92,500 242,500 (150,000) Sub -Total Reserves and Other 1,007,800 873,429 1,873,429 (1,000,000) TOTAL EXPENDITURES 38,631,516 38,932,584 38,612,729 319,855 Net Increase (Decrease) $ 100,927 $ - $ 944,000 $ 944,000 The notes to the required supplemental information is an integral part of this schedule. 71 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 $ 944,000 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 (1,328,132) Uses /Outflows for advances given to other funds are not recognized as expenditures in 392,000 GAAP statements; Only recognized as asset on balance sheet and not a transfer out Special funded projects are appropriated through long range capital improvement budget (20,070) in which segregated and specific funding is appropriated outside of the operating budget Transfer for Econcomic Development Capital Improvement Project funding was appropriated (2,522,920) in a prior fiscal year Total "Net Change in Fund Balance" from the Statement of Revenues, Expenditures, and Changes in Balances - Governmental Fund -- General Fund $ (2,535,122) 72 NON -MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS 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 Parks and Recreation Facilities Development Fund accounts for the accumulation and use of resources to build and improve City parks and recreation facilities as well as economic development projects. The Crime Control and Prevention District Fund accounts for the accumulation and use of half -cent sales tax proceeds dedicated for crime prevention and reduction programs. The Grant Fund is a centralized fund accounting for all private, local, state, and federal grant proceeds. The ARRA Fund is for reporting federal grant funds received due to the American Recovery and Reinvestment Act of 2009. The Economic Development Fund accounts for the accumulation and expenditure of resources designed to stimulate the local economy, development, and redevelopment. The Gas Development Fund accounts for the accumulation and expenditures of resources from gas drilling and exploration on City owned property. 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. DEBT SERVICE FUND 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. 73 CITY OF NORTH RICHLAND HILLS, TEXAS Balance Sheet Non -major Governmental Funds September 30, 2010 Special Parks and Special Recreation Crime Control Promotional D o n at i ons Investigations Drainage Utility D e v e l op m e n t District Assets Deposits and investments $ 289,490 $ 760,658 $ 535,592 $ 1,168,923 $ 2,184,503 $ Receivables, net of allowance Accounts - 97,456 - Other taxes receivable 77,591 - - 745,791 684,468 Interest receivable 473 1,320 951 2,122 2,182 524 Intergovernmental receivables - - - 147,098 - Other receivables 7,102 Inventories, at cost 19,353 Restricted: Deposits and investments: Construction funds 487,113 - Transition funds - - - - 29,917 Total assets $ 367,554 $ 761,978 $ 536,543 $ 1,268,501 $ 3,593,142 $ 714,909 Liabilities Accounts payable $ 4,488 $ 3,021 $ 34,193 $ $ 86,604 $ 3,352 Retainage payable - - - - - Accrued liabilities 22,197 57,245 Intergovernmental payables - - Due to other funds - - Deposits and other liabilities 14 560 Deferred revenue 35,286 - - 146,797 - Totalliabilities 39,774 3,035 34,193 256,158 60,597 Fund Balance Reserved for encumbrances 995 84,663 8,575 7,534 Reserved for inventories - - 19,353 - Reserved for debt service - Reserved for capital improvements 3,309,056 Unreserved, designated for: Crime control district transition - - - - 646,778 Unreserved, undesignated for: Special revenue 327,780 757,948 417,687 1,268,501 - Total fund balance 327,780 758,943 502,350 1,268,501 3,336,984 654,312 Total liabilities and fund balance $ 367,554 $ 761,978 $ 536,543 $ 1,268,501 $ 3,593,142 $ 714,909 74 Revenue Debt Service Economic Sales Tax Revenue Total Non -major Grants ARRA Grant Development Gas Development Tr Sa Bond Debt Service Go $ 50,583 $ 4,377 $ 810,257 $ 2,990,441 $ 297,521 $ 901,323 $ 9,993,668 - - - - - - 97,456 - - - - - 1,507,850 2,129 - 7,983 5,680 435 2,010 25,809 269,491 33,746 - - - - 450,335 392 - 1,475,029 1,482,523 - - 19,353 0 0 3,326,228 3,813,341 - - - 29,917 $ 322,595 $ 38,123 $ 4,144,468 $ 4,471,150 $ 297,956 $ 903,333 $ 17,420,252 $ 38,836 $ 17,890 $ - $ - $ 45,730 $ 600 $ 234,714 67,841 - - - 67,841 - 233 1,197 80,872 24,058 - 63,856 87,914 150,000 20,000 - 170,000 - 574 119,143 12,337 - 313,563 399,878 50,460 110,783 600 955,478 - - 8,541 110,308 - - 19,353 902,733 902,733 - 3,309,056 - - - 646,778 (77,283) (12,337) 4,144,468 4,471,150 178,632 - 11,476,546 (77,283) (12,337) 4,144,468 4,471,150 187,173 902,733 16,464,774 $ 322,595 $ 38,123 $ 4,144,468 $ 4,471,150 $ 297,956 $ 903,333 $ 17,420,252 75 CITY OF NORTH RI CHLAND HILLS, TEXAS Statement of Revenues, Expenditures, and Changes in Fund Balance Non -major Governmental Funds Year Ended September 30, 2010 Special Parks an Special Recreation Crime Control Pr Donation Invesitgations D Ut Development District REVENUES Taxes $ 240,387 $ $ $ $ 4,211,692 $ 3,872,534 Civil citations - - - Conlributions - 177,008 1,500 - Investment income 2,638 8,045 6,241 13,004 16,901 8,692 Intergovernmental - - 5,202 - 78,070 - Drainage fees - 839,309 - Tennis center - - 309,559 Forfeitures 232,054 - Mineral rights lease income - Right of way usage fees - - - Miscellaneous 3 576 - 190,867 - Totalrevenues 243,025 185,056 244,073 852,313 4,808,589 3,881,226 EXPENDITURES General government 218,207 36,928 - 3,346 - - Public safety - 4,857 133,898 - - 4,320,483 Culture and recreation 89,648 - 3,027,159 - Capital outlay: Public safety - 64,443 - Culture and recreation - 694,473 Public works - Debt service: Principal retirement Interest and fiscal charges - - - - - - Total expenditures 218,207 131,433 198,341 3,346 3,721,632 4,320,483 Excess (deficiency) of revenues over expenditures 24,818 53,623 45,732 848,967 1,086,957 (439,257) OTHER FINANCING SOURCES (USES) Proceeds from sale of assets - - - - 7,682 1,200 Transfer in 62,400 250,000 Transfers out (819,310) (1,364,649) - Total other financing sources (uses) (819,310) (1,294,567) 251,200 Net change in fund balance 24,818 53,623 45,732 29,657 (207,610) (188,057) Fund balance - beginning of year 302,962 705,320 456,618 1,238,844 3,544,594 842,369 Fundbalance - endoftheyear $ 327,780 $ 758,943 $ 502,350 $ 1,268,501 $ 3,336,984 $ 654,312 76 Revenue Debt Service Economic Sales Tax Revenue Total Non -major Grants A Grant Development Gas Development Tr Sa Bonds Debt Service Governmental $ $ $ $ $ $ $ 8,324,613 726,274 726,274 - 178,508 11,054 31,344 29,726 3,614 14,364 145,623 686,951 32,711 107,170 - - - 910,104 - - - 839,309 309,559 - 232,054 1,386,208 1,386,208 1,090,401 1,090,401 - - - - - 191,446 698,005 32,711 138,514 2,506,335 729,888 14,364 14,334,099 183,106 20,407 - - - - 461,994 203,026 - 662,063 5,324, 327 3,064 - 3,119,871 238,832 - - 9,536 312,811 28,653 24,641 107,171 - 854,938 - - 157,183 - 157,183 - 960,000 960,000 - - - - 167,000 167,000 656,681 45,048 264,354 - 671,599 1,127,000 11,358,124 41,324 (12,337) (125,840) 2,506,335 58,289 (1,112,636) 2,975,975 1,520 - - - 10,402 2,000 2,642,576 995,811 3,952,787 - - (684,022) (2,867,981) 3,520 2,642,576 (684,022) - 995,811 1,095,208 44,844 (12,337) 2,516,736 1,822,313 58,289 (116,825) 4,071,183 (122,127) 1,627,732 2,648,837 128,884 1,019,558 12,393,591 $ (77,283) $ (12,337) $ 4,144,468 $ 4,471,150 $ 187,173 $ 902,733 $ 16,464,774 77 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual GENERAL DEBT SERVICE Year Ended September 30, 2010 Variance with Final Budget - Positive Original Final A ctua l (Negative) REVENUES Taxes $ 5,800,000 $ 5,800,000 $ 5,800,000 $ Investment income - - 23,296 23,296 Intergovernmental 82,853 82,853 82,852 (1) Total revenues 5,882,853 5,882,853 5,906,148 23,295 EXPENDITURES Debt service Principal 5,071,664 5,071,664 6,155,319 (1,083,655) Interest and fiscal agent charges 1,924,500 1,924,500 1,994,325 (69,825) Total expenditures 6,996,164 6,996,164 8,149,644 (1,153,480) Excess (deficiency) of revenues over expenditures (1,113,311) (1,113,311) (2,243,496) (1,130,185) OTHER FINANCING SOURCES (USES) Transfers in 1,257,071 1,257,071 1,339,162 82,091 Premium on issuance of debt - - 42,075 - Total other financing sources (uses) 1,257,071 1,257,071 1,381,237 82,091 Net change in fund balance $ 143,760 $ 143,760 $ (862,259) $ (1,048,094) Fund balance - beginning of year 3,673,787 Fund balance - end of the year $ 2,811,528 The budget is reflected on a GAAP basis. 78 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual PROMOTIONAL FUND Year Ended September 30, 2010 Variance with Final Budget - Positive Original Final A ctual (Negative) REVENUES Taxes $ 205,000 $ 205,000 $ 240,387 $ 35,387 Investment income 5,215 5,764 2,638 (3,126) Miscellaneous 27,086 34,732 - (34,732) Total revenues 237,301 245,496 243,025 (2,471) EXPENDITURES General Government 237,301 245,496 218,207 27,289 Total expenditures 237,301 245,496 218,207 27,289 Excess of revenues over expenditures - - 24,818 24,818 Net change in fund balance $ $ $ 24,818 $ 24,818 Fund balance - beginning of year 302,962 Fund balance - end of the year $ 327,780 The budget is reflected on a GAAP basis. 79 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual DONATIONS FUND Year Ended September 30, 2010 Variance with Final Budget - Positive Original Final Actual (Negative) REVENUES Contributions $ 163,892 $ 187,239 $ 177,008 $ (10,231) Investment income 13,795 15,535 8,045 (7,490) Miscellaneous - 13,322 3 (13,319) Total revenues 177,687 216,096 185,056 (31,040) EXPENDITURES General Government 57,509 57,509 36,928 20,581 Public safety - 4,257 4,857 (600) Culture and recreation 107,500 120,820 89,648 31,172 Total expenditures 165,009 182,586 131,433 51,153 Excess of revenues over expenditures 12,678 33,510 53,623 20,113 Net change in fund balance $ 12,678 $ 33,510 $ 53,623 $ 20,113 Fund balance - beginning of year 705,320 Fund balance - end of the year $ 758,943 The budget is reflected on a GAAP basis. 80 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual SPECIAL INVESTIGATIONS FUND Year Ended September 30, 2010 Variance with Final Budget - Positive Original Final Actual (Negative) REVENUES Investment income $ 8,363 $ 10,682 $ 6,241 $ (4,441) Intergovernmental 7,537 34,503 5,202 (29,301) Forfeitures 60,500 224,500 232,054 7,554 Miscellaneous 180,521 67,536 576 (66,960) Total revenues 256,921 337,221 244,073 (93,148) EXPENDITURES Public safety 121,921 236,797 133,898 102,899 Capital outlay: Public safety 135,000 199,604 64,443 135,161 Total expenditures 256,921 436,401 198,341 238,060 Excess (deficiency) of revenues over expenditures - (99,180) 45,732 144,912 Net change in fund balance $ $ (99,180) $ 45,732 $ 144,912 Fund balance - beginning of year 456,618 Fund balance - end of the year $ 502,350 The budget is reflected on a GAAP basis, 81 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual DRAINAGE UTILITY FUND Year Ended September 30, 2010 Variance with Final Budget - Positive Original Final Actual (Negative) REVENUES Investment income $ 15,097 $ 18,698 $ 13,004 $ (5,694) Drainage fees 830,000 834,000 839,309 5,309 Total revenues 845,097 852,698 852,313 (385) EXPENDITURES General government - 87,801 3,346 84,455 Total expenditures - 87,801 3,346 84,455 Excess of revenues over expenditures 845,097 764,897 848,967 84,070 Transfers out (737,219) (737,219) (819,310) (82,091) Total other financing sources (uses) (737,219) (737,219) (819,310) (82,091) Net change in fund balance $ 107,878 $ 27,678 $ 29,657 $ 1,979 Fund balance - beginning of year 1,238,844 Fund balance - end of the year $ 1,268,501 The budget is reflected on a GAAP basis. 82 CITY OF NORTH RI CHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual PARKS AND RECREATIONS DEVELOPMENT CORPORATION FUND Year Ended September 30, 2010 Operating Budget Variance with Less: Actual Final Budget - Capital Project Operating Positive Original Final Actual Expenditures Actua ( Negative) REVENUES Taxes $ 4,188,813 $ 4,091,196 $ 4,211,692 $ $ 4,211,692 $ 120,496 Contributions 3,000 3,500 1,500 1,500 (2,000) Investment income 38,280 26,302 16,901 16,901 (9,401) Intergovernmental - - 78,070 78,070 78,070 Tennis center 314,400 305,150 309,559 309,559 4,409 Miscellaneous 133,000 134,649 190,867 190,867 56,218 Total revenues 4,677,493 4,560,797 4,808,589 4,808,589 247,792 EXPENDITURES Culture and recreation 3,201,260 3,263,644 3,027,159 3,027,159 236,485 Capital Outlay - 388,920 694,473 674,144 20,329 368,591 Total expenditures 3,201,260 3,652,564 3,721,632 674,144 3,047,488 605,076 Excess (deficiency) of revenues over expenditures 1,476,233 908,233 1,086,957 (674,144) 1,761,101 852,868 OTHER FINANCING SOURCES (USES) Proceeds from sale of assets - - 7,682 7,682 7,682 Transfers in 62,400 62,400 62,400 62,400 - Transfers out (1,538,633) (1,359,553) (1,364,649) (1,364,649) (5,096) Total other financing sources (uses) (1,476,233) (1,297,153) (1,294,567) (1,294,567) 2,586 Net change in fund balance $ - $ (388,920) $ (207,610) $ (674,144) $ 466,534 $ 855,454 Net Change (207,610) Fund balance- beginning of year 3,544,594 Fund balance - end of year $ 3,336,984 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. 83 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual CRIME CONTROL DISTRICT FUND Year Ended September 30, 2010 Variance with Final Budget - Positive Original Final A ctual (Negative) REVENUES Taxes $ 4,220,410 $ 3,851,300 $ 3,872,534 $ 21,234 Investment income 21,476 4,667 8,692 4,025 Miscellaneous 208,878 520,375 - (520,375) Total revenues 4,450,764 4,376,342 3,881,226 (495,116) EXPENDITURES Public safety 4,450,764 4,376,342 4,320,483 55,859 Total expenditures 4,450,764 4,376,342 4,320,483 55,859 Excess of revenues over expenditures - - (439,257) (439,257) Proceeds from sale of assets 1,200 1,200 Transfers in 250,000 250,000 Total other financing sources (uses) 251,200 251,200 Net change in fund balance $ $ $ (188,057) $ (188,057) Fund balance - beginning of year 842,369 Fund balance - end of the year $ 654,312 The budget is reflected on a GAAP basis. 84 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual GAS DEVELOPMENT FUND Year Ended September 30, 2010 Variance with Final Budget - Positive Original F i n al Actual (Negative) REVENUES Investment income $ 89,059 $ 57,845 $ 29,726 $ (28,119) Mineral rights lease income 160,000 1,079,313 1,386,208 306,895 Right of way usage fees - - 1,090,401 1,090,401 Miscellaneous 460,000 100,000 - (100,000) Total revenues 709,059 1,237,158 2,506,335 1,269,177 EXPENDITURES Total expenditures - - - - Excess of revenues over expenditures 709,059 1,237,158 2,506,335 1,269,177 Transfers out (460,000) (684,022) (684,022) - Total other financing sources (uses) (460,000) (684,022) (684,022) - Net change in fund balance $ 249,059 $ 553,136 $ 1,822,313 $ 1,269,177 Fund balance - beginning of year 2,648,837 Fund balance - end of the year $ 4,471,150 The budget is reflected on a GAAP basis. 85 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual TRAFFIC SAFETY FUND Year Ended September 30, 2010 Variance with Final Budget - Positive Or igin a l Final Actual (N egat iv e) REVENUES Investment income $ - $ 9,275 $ 3,614 $ (5,661) Civil citations 978,468 720,000 726,274 6,274 Total revenues 978,468 729,275 729,888 613 EXPENDITURES Public safety 804,177 678,430 662,063 16,367 Capital outlay Public safety 50,000 52,495 9,536 42,959 Total expenditures 854,177 730,925 671,599 59,326 Excess of revenues over expenditures 124,291 (1,650) 58,288 59,938 Net change in fund balance $ (124,291) $ 1,650 $ 58,288 $ 59,938 Fund balance - beginning of year 128,885 Fund balance - end of the year $ 187,173 The budget is reflected on a GAAP basis. 86 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual SALES TAX REVENUE BOND DEBT SERVICE Year Ended September 30, 2010 Variance with Final Budget - Positive Original Final Actual (Negative) REVENUES Investment income $ $ $ 14,364 $ 15,032 Total revenues 14,364 15,032 EXPENDITURES Debt service Principal 960,000 960,000 960,000 - Interst and fiscal agent charges 164,300 164,300 167,000 (2,700) Total expenditures 1,124,300 1,124,300 1,127,000 (2,700) Excess (deficiency) of revenues over expenditures (1,124,300) (1,124,300) (1,112,636) 12,332 Transfers in 1,126,402 995,811 995,811 - Transfers out - - - Total other financing sources (uses) 1,126,402 995,811 995,811 - Net change in fund balance $ 2,102 $ (128,489) $ (116,825) $ 12,332 Fund balance - beginning of year 1,019,558 Fund balance - end of the year $ 902,733 The budget is reflected on a GAAP basis. 87 This page intentionally left blank. 88 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. 89 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Net Assets INTERNAL SERVICE September 30, 2010 Facilities and Information Total Internal Construction Fleet Serv Self Insurance Services Service ASSETS Current Deposits and investments $ 785,985 $ 1,087,570 $ 2,255,938 $ 1,501,353 $ 5,630,846 Accounts receivable, net of allowance: Other - - 17,237 5,368 22,605 Interest receivable 3,749 8,506 17,798 9,259 39,312 Inventories, at cost 12,756 98,383 - - 111,139 Total current assets 802,490 1,194,459 2,290,973 1,515,980 5,803,902 Noncurrent Restricted assets: Deposits and investments: Construction funds 23,532 95,328 40,027 158,887 Future construction 259,860 934,232 - 765,302 1,959,394 Future claims - - 2,252,768 - 2,252,768 Otherfunds 258,390 - - 258,390 Total deposits and investments 283,392 1,287,950 2,252,768 805,329 4,629,439 Capital assets, at cost: Building and improvements 272,293 - - 602,769 875,062 Machinery and equipment 230,214 5,187,906 17,312 2,099,503 7,534,935 Construction in progress 17,900 - - 157,156 175,056 Accumulated depreciation (214,157) (3,777,477) (17,312) (928,450) (4,937,396) Net capital assets 306,250 1,410,429 - 1,930,978 3,647,657 Total noncurrent assets 589,642 2,698,379 2,252,768 2,736,307 8,277,096 Total assets 1,392,132 3,892,838 4,543,741 4,252,287 14,080,998 LIABILITIES Current Accounts payable 63,940 41,057 22,133 223,455 350,585 Accrued liabilities 11,184 10,632 1,046,714 11,646 1,080,176 Other current liabilities 252 790 9,514 - 10,556 Compensated absences 34,445 68,172 21,856 34,666 159,139 Deferred revenue - - - 11,534 11,534 Total current liabilities 109,821 120,651 1,100,217 281,301 1,611,990 Noncurrent Compensated absences 15,984 18,999 9,775 20,617 65,375 Other post employment benefits obligation 43,146 50,733 43,230 21,003 158,112 Net pension obligation 48,296 56,788 33,967 58,255 197,306 Total noncurrent liabilities 107,426 126,520 86,972 99,875 420,793 Total liabilities 217,247 247,171 1,187,189 381,176 2,032,783 NET ASSETS Invested in capital assets, net of related debt 306,250 1,413,210 - 1,901,012 3,620,472 Unrestricted 868,635 2,232,457 3,356,552 1,970,099 8,427,743 Total net assets $ 1,174,885 $ 3,645,667 $ 3,356,552 $ 3,871,111 $ 12,048,215 90 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Expense, Revenues, and Changes in Net Assets INTERNAL SERVICE Year Ended September 30, 2010 Facilities and Fleet Self Information Total Internal Construction Services Insurance Systems Service OPERATING REVENUES Internal service revenues Insurance premiums $ - $ - $8,765,590 $ $ 8,765,590 Maintenace services 1,797,415 1,961,789 3,759,204 Computer services - - 1,883,763 1,883,763 Telephone services - - 411,469 411,469 Miscellaneous revenues 110,951 9,481 - 121,742 242,174 Total operating revenues 1,908,366 1,971,270 8,765,590 2,416,974 15,062,200 OPERATING EXPENSES Claims - - 8,341,616 - 8,341,616 Contractual services 768,606 80,698 841,086 243,638 1,934,028 Personnel services 967,039 929,004 996,919 989,933 3,882,895 Repairs and maintenance 505,136 - 3,718 784,647 1,293,501 Supplies 60,975 1,097,681 5,384 470,618 1,634,658 Depreciation 26,676 408,618 - 350,661 785,955 Total operating expenses 2,328,432 2,516,001 10,188,723 2,839,497 17,872,653 Operating income (loss) (420,066) (544,731) (1,423,133) (422,523) (2,810,453) NONOPERATING REVENUES (EXPENSES) Investment income 9,049 21,506 47,198 22,667 100,420 Developer contributions - 66,728 - - 66,728 Insurance recovery proceeds - 72,393 72,393 Other income (expense) - 14,810 - 14,810 Gain (loss) on disposal of assets 90,018 - (14,034) 75,984 Total nonoperating revenues (expenses) 9,049 178,252 134,401 8,633 330,335 Income (loss) before transfers (411,017) (366,479) (1,288,732) (413,890) (2,480,118) TRANSFERS Transfers in 200,000 200,000 215,800 332,129 947,929 Transfers out - - (50,000) - (50,000) Total transfers - net 200,000 200,000 165,800 332,129 897,929 Change in net assets (211,017) (166,479) (1,122,932) (81,761) (1,582,189) Net assets - beginning of year 1,385,902 3,812,146 4,479,484 3,952,872 13,630,404 Net assets - end of year $ 1,174,885 $ 3,645,667 $ 3,356,552 $ 3,871,111 $12,048,215 91 CITY OF NORTH RICHLAND HILLS, TEXAS Combining Statement of Cash Flows INTERNAL SERVICE FUNDS Year Ended September 30, 2010 Facilities and Construction Fleet Self Information Services Services Insurance Services Totals Cash flows from operating activities: Receipts from interfund services provided $ 1,797,416 $ 1,961,790 $ 8,765,590 $ 2,295,234 $ 14,820,030 Other operating revenue 110,951 12,486 (13,025) 120,614 231,026 Payments to suppliers (1,329,002) (1,194,936) (9,021,133) (1,351,144) (12,896,215) Payments to employees (897,440) (848,081) (972,751) (901,446) (3,619,718) Net cash provided by (used for) operating activities (318,075) (68,741) (1,241,319) 163,258 (1,464,877) Cash flows from noncapital financing activities: Transfers from other funds 200,000 200,000 215,800 332,129 947,929 Transfers to other funds - (50,000) - (50,000) Net cash provided by (used for) noncapital and related financing activities 200,000 200,000 165,800 332,129 897,929 Cash flows from capital and related financing activities: Insurance recovery proceeds - - 87,203 - 87,203 Acquisition and construction of capital assets (102,914) (275,650) - (1,060,125) (1,438,689) Developer contributions 66,728 66,728 Proceeds from sale of capital assets 90,018 - (14,034) 75,984 Net cash provided by (used for) capital and related financing activities (102,914) (118,904) 87,203 (1,074,159) (1,208,774) Cash flows from investing activities: Interest and dividends received 10,734 24,037 56,992 28,249 120,012 Net cash provided by investing activities 10,734 24,037 56,992 28,249 120,012 Net increase (decrease) i n cash and cash equivalents (210,255) 36,392 (931,324) (550,523) (1,655,710) Cash and cash equivalent beginning of year 1,279,632 2,339,128 5,440,030 2,857,204 11,915,994 Cash and cash equivalent end of year $ 1,069,377 $ 2,375,520 $ 4,508,706 $ 2,306,681 $ 10,260,284 Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss) $ (420,066) $ (544,731) $ (1,423,133) $ (422,523) $ (2,810,453) Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation expense 26,677 408,619 - 350,661 785,957 Other expense - (1,831) (22,875) - (24,706) (Increase) decrease in accounts receivable - 3,005 (13,025) (1,128) (11,148) (Increase) decrease in inventories 3,087 (14,283) - (11,196) Increase (decrease) in compensating absences 3,928 3,705 (22,019) 9,231 (5,155) Increase (decrease) in other post employment benefits 17,375 20,430 12,220 21,003 71,028 Increase (decrease) in net pension obligation 48,296 56,788 33,967 58,255 197,306 Increase (decrease) in accounts payable 2,460 (61) (12,930) 147,759 137,228 Increase (decrease) in accrued liabilities 168 (382) 206,476 - 206,262 Total adjustments 101,991 475,990 181,814 585,781 1,345,576 Net cash provided by (used for) operating activities $ (318,075) $ (68,741) $ (1,241,319) $ 163,258 $ (1,464,877) 92 COMPONENT UNITS Tax Increment Financing District #1 — 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 #1A — to provide funding for public infrastructure improvements that would benefit the participants in and citizens of TIF #1A as well as others in the Metroplex area. Tax Increment Financing District #2 — 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. 93 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Revenue, Expenses, and Changes in Net Assets COMPONENT UNITS September 30, 2010 Tax Increment Tax Increment Tax Increment Total Financing Financing Financing Component District #1 District #1A District #2 Units Assets CURRENT ASSETS Deposits and investments $ 1,345,873 $ $ 10,389,283 $ 11,735,156 Interest receivable 1,992 48,715 50,707 Due from other component unit - 107,170 - 107,170 Internal balances - - - Total current assets 1,347,865 107,170 10,437,998 11,893,033 NONCURRENT ASSETS Restricted deposits and investments 896,459 21,506,823 22,403,282 Capital assets - net: Construction in progress - 1,519,435 1,519,435 Total capital assets - net - - 1,519,435 1,519,435 Bond issue costs, net of amortization 2,910 5,497 182,397 190,804 Total noncurrent assets 2,910 901,956 23,208,655 24,113,521 Total assets 1,350,775 1,009,126 33,646,653 36,006,554 Liabilities CURRENT LIABILITIES Accounts payable and accrued liabilities - - 141,508 141,508 Accrued interest payable 5,872 3,926 247,714 257,512 Bonds payable 5,000 115,000 1,720,000 1,840,000 Due to other component units 107,170 - - 107,170 Total current liabilities 118,042 118,926 2,109,222 2,346,190 NONCURRENT LIABILITIES General obligation bonds payable 288,741 - - 288,741 Certificates of obligation - 889,795 27,054,533 27,944,328 Total noncurrent liabilities 288,741 889,795 27,054,533 28,233,069 Total liabilities 406,783 1,008,721 29,163,755 30,579,259 Net assets Invested in capital assets, net of related debt - - (27,644,320) (27,644,320) Restricted for: Debt service 943,992 405 32,127,218 33,071,615 Total net assets $ 943,992 $ 405 $ 4,482,898 $ 5,427,295 94 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Activities COMPONENT UNITS Year Ended September 30, 2010 Tax Increment Tax Increment Tax Increment Total Financing Financing Financing Component District #1 District #1A District #2 Units Expenses $ 9,401 $ 588,445 $ 597,846 Total expense $ 9,401 $ $ 588,445 $ 597,846 General revenue: Taxes: Property $ 221,177 $ $ 2,792,451 $ 3,013,628 Unrestricted investment earnings 12,162 405 100,196 112,763 Miscellaneous revenues 4,567 - - 4,567 Total general revenues 237,906 405 2,892,647 3,130,958 Change in net assets 228,505 405 2,304,202 2,533,112 Net assets - beginning of the year 715,487 - 2,178,696 2,894,183 Net assets - end of year $ 943,992 $ 405 $ 4,482,898 $ 5,427,295 95 This page intentionally left blank. 96 STATISTICAL SECTION 97 This page intentionally left blank. 98 CITY OF NORTH RICHLAND HILLS,TEXAS Table 1 Net Assets by Component (unaudited) Fiscal Year 2010 2009 2008 2007 2006 2005 2004 2003 Governmental Activities Invested in capital assets net of related debt $ 164,973,337 $ 142,066,447 $ 129,533,935 $ 128,290,273 $ 127,692,821 $ 70,181,539 $ 63,351,827 $ 58,568,310 Restricted 3,715,127 4,693,345 3,984,364 3,270,409 2,973,821 2,759,099 2,954,135 2,858,468 Unrestricted 35,253,260 52,082,125 54,146,336 44,787,548 _ 36,986,785 27,839,936 27,644,041 27,303,419 Total net assets 203,941,724 198,841 187,664,636 176,348,230 1 67,653,427 100,780,574 93 88,730,197 Business - type Activities Invested in capital assets net of related debt 61,160,189 62,354,993 60,828,610 65,485,796 62,776,005 63,610,252 65,122,142 64,023,232 Restricted 2,610,287 3,018,779 2,709,713 2,937,027 2,712,360 2,267,668 1,241,081 2,450,610 Unrestricted 21,724,799 25,309,106 29,018,350 24,779,076 27,457,208 22 20,443,728 19,036,895 Total net assets 85,495,275 90,682 92,556,673 93,201,899 92 88,501,761 86,806,951 85,510,737 Primary Government Invested in capital assets net of related debt 226,134,526 204,421,440 190,362,545 193,776,069 190,468,826 133,791,791 128,473,969 122,591,542 Restricted 6,325,414 7,712,124 6,694,077 6,207,436 5,686,181 5,026,767 4,195,216 5 Unrestricted 56,978,925 77,391,231 83,164,686 69,566,624 _ 64,443,993 50,463,777 48,087,769 46,340,314 Total net assets $ 289,438,865 $ 289,524,795 $ 280,221,309 $ 269,550,129 $ 260,599,000 $ 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. 99 CITY OF NORTH RICHLAND HILLS, TEXAS Table 2 Changes in Net Assets (unaudited) Fiscal Year 2010 2009 2008 2007 2006 2005 2004 2003 Expenses Governmental activities: General government $ 14,653,747 $ 16,355,871 $ 9,379,422 $ 8,461,142 $ 9,269,861 $ 8,288,137 $ 9,755,719 $ 9,292,156 Public safety 26,172,292 27,772,668 25,791,827 23,265,259 22,022,696 20,693,721 20,460,665 21,078,401 Culture and recreation 9,468,346 10,718,579 7,973,359 7,327,532 7,611,710 7,355,182 7,436,113 7,102,491 Public works 8,388,531 2,126,721 5,748,315 7,799,706 8,169,282 7,597,475 6,755,207 6,917,896 Interest and other fees 1,761,128 2,269,541 2,302,096 2,561,837 2,546,791 2,860,149 3,157,963 3,853,040 Total governmental activities 60,444,044 59,243,380 51,195,019 49,415,476 49,620,340 46,794,664 47,565,667 48,243,984 Business -type activities: utility 27,313,424 25,121,565 27,329,181 23,154,259 22,929,665 21,492,504 20,707,959 20,415,859 Golf course 2,236,113 2,217,868 2,302,670 2,247,272 2,239,404 2,254,198 2,257,534 2,353,454 Aquatic park 4,188,892 4,105,695 3,774,757 3,433,492 3,343,073 3,251,524 3,178,835 3,121,298 Interest and other fees 0 433,588 Total business -type activities 33,738,429 31,445,128 33,840,196 28,835,023 28,512,142 26,998,226 26,144,328 25,890,611 Total primary government 94,182,473 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 8,619,557 4,547,658 9,333,482 6,505,029 6,881,843 5,672,569 5,548,912 5,221,263 Public safety 2,918,356 4,922,180 2,995,693 1,718,460 1,314,329 1,154,807 1,031,326 1,062,295 Culture and recreation 909,267 1,446,132 2,517,122 1,124,777 1,212,343 1,214,590 1,091,618 1,363,337 Public works 839,309 1,896,764 2,355,161 1,179,302 174,166 61,063 100,192 475,788 Operating grants and contributions 964,914 1,142,243 353,816 1,028,853 1,153,543 1,539,736 612,519 865,108 Capital grants and contributions 6,806,586 11,341,668 304,514 410,297 2,910,568 4,367,529 6,404,966 2,087,935 Total governmental activities 21,057,989 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 utility 24,324,685 25,060,898 26,349,559 21,630,336 25,858,511 22,237,742 20,861,262 20,945,508 Golf course 2,264,256 2,509,577 2,571,409 2,298,065 1,775,963 2,287,494 2,154,714 2,356,941 Aquatic park 4,090,087 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 contributions 271,624 599,983 1,288,734 1,603,834 2,128,214 1,303,870 Total business -type activities 30,950,652 31,428,864 32,864,256 28,445,075 32,883,948 29,597,218 28,320,229 27,563,496 Total primary government 52,008,641 56,725,509 50,724,044 40,411,793 46,530,740 43,607,512 43,109,762 38,639,222 Net (Expense) Revenue Governmental activities (39,386,055) (33,946,735) (33,335,231) (37,448,758) (35,973,548) (32,784,370) (32,776,134) (37,168,258) Business -type activities (2,787,777) (16,264) (975,940) (389,948) 4,371,806 2,598,992 2,175,901 1,672,885 Total primary government $ (42,173,832) $ (33,962,999) $ (34,311,171) $ (37,838,706) $ (31,601,742) $ (30,185,378) $ (30,600,233) $ (35,495,373) (continued) 100 CITY OF NORTH RICHLAND HILLS, TEXAS Table 2 Changes in Net Assets (unaudited) (concluded) Fiscal Year 2010 2009 2008 2007 2006 2005 2004 2003 General Revenues and Other Changes in Net Assets Governmental activities: Taxes Property taxes $ 19,909,976 $ 20,605,670 $ 19,248,707 $ 18,663,482 $ 18,134,230 $ 17,458,279 $ 16,871,892 $ 16,871,892 Sales taxes 16,428,281 16,058,728 17,445,806 16,865,282 15,934,374 15,230,354 16,477,474 16,477,474 Mixed beverage taxes 118,253 117,757 161,783 129,860 123,355 115,143 107,164 107,164 Franchise taxes 3,956,663 3,802,559 4,604,523 4,450,441 3,855,169 3,541,130 3,592,682 3,592,682 Occupancy taxes 240,387 152,220 260,319 284,099 199,850 191,848 172,197 172,197 Unrestricted investment earnings 588,866 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 553,412 188,512 477,026 651,376 2,341,327 688,555 602,568 602,568 Transfers 2,690,024 2,586,937 569,227 712,782 873,867 1,301,085 1,104,810 1,104,810 Total governmental activities 44,485,862 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 investment earnings 236,674 740,393 878,795 1,330,781 945,873 396,903 225,123 225,123 Miscellaneous 53,524 (10,986) 8,962 - - - - - Transfers (2,690,024) (2,586,937) (557,044) (712,782) (873,867) (1,301,085) (1,104,810) (1,104,810) Total business -type activities (2,399,826) (1,857,530) 330,713 617,999 72,006 (904,182) (879,687) (879,687) Total primary government 42,086,036 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 Governmental activities 5,099,807 11,177,280 11,873,959 8,564,912 7,536,207 6,830,571 5,219,806 827,682 Business -type activities (5,187,603) (1,873,794) (645,227) 228,051 4,443,812 1,694,810 1,296,214 793,198 Total primary government $ (87,796) $ 9,303,486 _L 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 GASS #34 for the City. 101 CITY OF NORTH RICHLAND HILLS, TEXAS Fund Balances - Governmental Funds Last Ten Fiscal Years (unaudited) Table 3 102 Fiscal Year 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 General Fund Reserved $ 1,115,669 $ 698,043 $ 623,072 $ 833,307 $ 597,644 $ 544,903 $ 632,000 $ 660,637 $ 1,300,795 $ 927,566 Unreserved 12,007,994 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 Total General Fund $ 13,123,663 $ 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 All Other Governmental Funds Reserved $ 32,135,585 $ 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 Unreserved 12,123,324 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 Total all other governmental funds $ 44,258,909 $ 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 Total all governmental funds $ 57,382,572 $ 57,109,316 $ 54,109,375 $ 45,258,245 $ 41,485,182 $ 37,802,804 $ 44,276,396 $ 47,773,318 $ 50,241,131 $ 43,994,068 102 CITY OF NORTH RICHLAND HILLS, TEXAS Changes in Fund Balances - Governmental Funds Last Ten Fiscal Years Table 4 103 Fiscal Year 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Revenues Taxes $ 40,842,538 $ 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 Licenses and permits 1,148,594 988,020 1,705,703 1,526,636 2,251,292 1,473,542 1,421,831 1,432,955 1,268,203 1,293,114 Charges for services 5,349,622 5,402,259 5,309,838 5,203,037 5,237,388 5,109,802 4,849,344 4,817,750 4,639,573 4,292,940 Fines 2,631,813 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 Civil Citations 726,274 999,584 825,191 - - - - - - - Contributions 192,501 160,194 196,320 170,326 177,273 178,937 176,962 177,162 137,791 124,299 Special assessments - 276,475 154,125 28,225 8,348 514 - 57,169 99,024 35,428 Investment income 538,193 1,250,127 1,678,921 2,258,877 1,719,493 922,870 569,532 822,474 1,477,290 2,491,631 Intergovernmental 3,188,918 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 Drainage fees 839,309 834,075 830,338 819,370 806,414 795,475 793,415 771,430 767,958 723,256 Tennis center 309,559 325,907 320,836 312,697 310,397 280,505 289,375 328,110 305,159 268,081 Forfeitures 232,054 146,830 142.874 74,448 86,752 70,117 47,068 33,874 106,358 35,346 Mineral rights lease income 1,386,208 75,282 6,239,616 - - - - - - - Right of way usage fees 1,090,401 - - - - - - - - - Miscellaneous 490,074 442,210 395,186 939,241 1,431,192 1,070,874 460,770 777,753 1,224,113 188,847 Total revenues 58,966,058 56,792,989 63,115,497 55,058,048 55,186,302 51,048,227 51,623,366 48,300,586 48,263,930 47,186,077 Expenditures General government 10,435,250 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 Public safety 24,697,961 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 Culture and recreation 7,344,261 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 Public works 2,518,081 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 Capital outlay 14,301,095 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 Debt service Principal 7,115,319 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 Interest 2,161,325 2,048,696 2,225,585 2,281,930 2,349,160 2,665,828 2,770,875 3,126,375 2,923,604 3,610,800 Total expenditures 68,573,292 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 Excess of revenues over (under) expenditures (9,607,234) (7,207,837) 4,553,329 1,107,339 1,185,894 (6,429,134) (8,135,952) (7,093,785) (2,047,748) (2,099,995) Other Financing Sources (Uses) Proceeds from borrowing 9,186,475 8,503,525 4,465,000 2,185,000 3,625,000 - 4,935,000 2,750,000 7,250,000 4,235,000 Premium on issuance of debt 42,075 242 - - - - - - - - Proceeds from refunding - - - 5,085,000 8,245,000 - 3.815,000 - 10,255,000 8,624,000 Payments to escrow agent - - - (5,075.787) (8,100,166) - (3,694,386) - (10,394,890) (8,330,537) Insurance recovery proceeds - - - 282,000 - - - - - - Proceeds from sale of assets 34,678 188,512 16,353 9,864 - - - - - - Payment in lieu of taxes - - 355,004 - - - - - - - Transfers in 8,158,092 9,274,945 5,918,639 5,812,148 4,436,800 3,749,968 4,442,310 6,878,744 7,554,672 6,179,405 Transfers out (7,540,830) (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) Net component unit transfers - - - - - - - - - - Total other financing sources (uses) 9,880,490 10,207,780 4,855,347 2,307,876 2,496,484 (44,458) 4,639,030 4.625,972 8,294,813 5,742,355 Net change in fund balances $ 273,256 $ 2,999,943 $ 9,408,676 $ 3,415,215 $ 3,682,378 $ (6,473,592) $ (3,496,922) $ (2,467,813) $ 6,247,065 $ 3,642,360 Debt service as a percentage of noncapital expenditures 17.09% 14.5% 15.7% 17.9% 18.0% 19.5% 19.2% 19.0% 17.5% 21.7% 103 CITY OF NORTH RICHLAND HILLS, TEXAS Appraised and Taxable Value of Property Last Ten Fiscal Years (unaudited) Table 5 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. 104 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 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 2010 2,536,677,612 755,382,876 24,238,120 588,109,765 311,291,262 465,272,083 3,750,427,552 0.57000 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. 104 CITY OF NORTH RICHLAND HILLS, TEXAS Property Tax Rates - Direct and Overlapping Governments (per $100 assessed value) (unaudited) Junior college (1) 0.10641 0.10641 0.13938 0.13938 0.13938 0.13938 0.13938 0.13938 0.13796 0.13767 Birdville City of North Richland Hills Fiscal General Debt service Year fund (3) fund (3) Total (3) 2001 $ 0.33164 $ 0.23836 $ 0.57000 $ 2002 0.33531 0.23469 0.57000 2003 0.32935 0.24065 0.57000 2004 0.32956 0.24044 0.57000 2005 0.33173 0.23827 0.57000 2006 0.34432 0.22568 0.57000 2007 0.34695 0.22305 0.57000 2008 0.34241 0.22759 0.57000 2009 0.33875 0.23125 0.57000 2010 0.35412 0.21588 0.57000 Sources: (1) Tarrant County. 1.40500 (4) (2) Birdville Independent School District from 1998 -2006. 0.26650 1.41000 (3) City records. 0.22790 0.26400 (4) Began using Tarrant County as source in 2006. (4) Junior college (1) 0.10641 0.10641 0.13938 0.13938 0.13938 0.13938 0.13938 0.13938 0.13796 0.13767 Birdville school district (1)(2) Hospital (1) County (1) $ 1.56980 $ 0.23407 $ 0.27479 1.56980 0.23407 0.27479 1.61700 0.23240 0.27250 1.61700 0.23540 0.27250 1.61700 0.23540 0.27250 1.61700 (4) 0.23540 0.27250 1.56500 (4) 0.23540 0.27150 1.40500 (4) 0.23040 0.26650 1.41000 (4) 0.22790 0.26400 1.40500 (4) 0.22790 0.26400 105 Table 6 Total 2.75507 2.75507 2.83128 2.83428 2.83428 2.83428 2.78128 2.61128 2.60986 2.60457 CITY OF NORTH RICHLAND HILLS, TEXAS Table 7 Principal Taxpayers (unaudited) Year Ended September 30, 2010 Percentage of 2009 assessed total assessed Taxpayer Type of business valuation* valuation Wal -Mart Retail $ 62,770,218 1.67% Western RIM Investors 2001 -3 LP/1997 -2 Real Estate 42,849,166 1.14% Hospital Corporation of America Healthcare Provider 34,993,639 0.93% Oncor Electric Delivery Co. Utility Service Provider 27,481,805 0.73% BGPC Equestrian Real Estate 24,500,000 0.65% Delaware Oak River, LLC Property Developer 19,900,000 0.53% Mega Life & Health Ins. Co. Insurance Provider 18,042,360 0.48% Company One, LLC Real Estate 17,700,000 0.47% Gateway Grant Inc. Commercial Development 17,477,390 0.47% Bradbury Pointe LLC Commercial Business 17,459,087 0.47% $ 283,173,665 7.55% Year Ended September 30, 2001 Percentage of 2000 assessed total assessed Taxpayer Type of business valuation* valuation Kimberly Clark/Tecnol, Inc. Manufacturer $ 38,004,174 1.78% Walmart Retail 34,526,100 1.62% Food Brands America, Inc. Food Manufacturer 29,576,921 1.38% Home Depot, Inc. Retail 26,454,650 1.24% Alliance Park Portfolio, LLC Commercial /Real Estate 24,421,833 1.14% Texas Utilities Electric Co. Utility Co. 23,076,425 1.08% Five Star Ford /Pack Properties Automotive Dealership 22,655,923 1.06% Northeast Crossing LP Commercial /Real Estate 21,476,284 1.01% Richland Centre, Inc. Property Developer 19,358,274 0.91% Meadows NRH Associates LP Real Estate 19,312,366 0.90% $ 258,862,950 12.12% * Source: Tarrant Appraisal District. 106 00 d H 0 0 0 0 0 0 0 0 0 0 0 y C (D N W M In (D M aD �+ d d ro co W ao W ao ao m J O) Gi Ci Oi Oi Oi Oi Oi m co d m m m m m m m m m m oa H C O .; N N O v m (o N (D M ao O 00 (n Cl (— I-- n m 'V' N N U M O P" O oc M O m (O m r V' M O m p M M M (n w M a p - n O a0 n M M M ~ E . r (2 r r W N N N a M O (n m o (n N n N y y Q V cc N m (n M m W C C p w (O I- m N m m F O O O' ` ti R M w m v R W y .� M N N N N N M J = U m U r s c 69 = m An a J F = x o F (a 0 0 0 0 0 0 0 0 0 0 C (n O 47 m m N C (n 00 f d r o0 00 co co co co 0o CD co a m m m m m m m m m m ° 0 a rw o U . m (0 a+ m o m o (o (� o v (o co V O v M O O V N N cc '4 m oo co r- 'I m A O 0 W W O m co O 00 (n V Mn (n r m (D n (n �2 co (o LL p O VL h W (o m N Q b9 O N (n N N a O (f) (o M VL N (n O (D rl N O V O (n (o co m Cl) O m m I- R N V � O oc r � V M V M O � (p a0 m O H � N N N ce (0 N M V (n O r co m O u 4) O O O O O O O O O .— V! 41 O O O O O O O O O O E Y N N N N N N N N N N 01 O 0) O O N O O O O O d Y a r r 0) O) O) r N O a (D M M OD O a r O y O M O Oct O N ? i(1 (D (D d �R N M r tD M W 00 M a H > r O m w r r (D N a M N C lD N a s C) (7 N N M m U) y C d 4 d d L > R C d U N d d O • C 0 U d a C •- Q O d M It r M m a M M N m r lD O O N 'O (D O M N r a0 M r M m N r N DI CD C W O QI D) a0 r r (D r r d M M N N O O O DD M O 0 CL v C v c " c d o `w d 6% a to O d m m (D o uo lD (D oo M o r r N N d j a N W (D M N N M C N 00 O M D1 Q) r O r O) 1 y N N �- r r r r E' d (D N 0) co M N a O w N r c a m � r r r r m w u� �w m x d o E x e `> d F ° c a d to z h O N a N M a M N O d a N (0 a O O M lD a N d O D) M LC •- r to <D O 6 O r N N (D a N r y (D (D (D r N O (D aD N (D to r OD r r (0 au V 0 O A 'O r M N O M a G0 d O M O O O w m 0 M M r r r r r Ol C V O y A a f» a f» N N i i i i O N O a a O i i w d do M N N (D O a N O N ,w W J A N O. J d N J C V d a � Z } 69 v> co _ H a _ C L L d w M M M r r a0 N N N V d C C G O N N O 00 a s N 04 y N y N d v y C l0 M N N 00 O N N W C N F O c (t0i m m 0 O J O w •- _ LM O 0 z 0 m 0 O a N n. LL ' d U O w O d U A d C N r M 0 r M a M O M O W r a OD D] (0 w V a 0) O QI N N N '- N • j OD a fD (D �- 00 (D fD O) M y C a) M a r O 00 00 m r G T a M O t!'1 O c0 N N d a d C d (p N C O - y d O a y U c a d i d � U m L N l0 N M M O a0 Ol r r N OD y O W W ll') r O O O C a N (D M a0 tD O0 O 00 N N r (D (0 m l0 M m u1 m U X C d m N M (D N N M a s _ (D M O N N N N r M 67 yj N d a N l0 01 OJ M M tl) r Y'J m O 0 M M M a M a M N N . V A r M r — Q) O r x d M W O _ N a w r r y C 'O •- C F N N N M M M M N C N d> t C C O z N O O ate. Hf C 6% y A N L J a E O o 3 C m lM O, d C m r O O a0 O 0 0 O d 0 m N N O C V d W O m N 0 O O N N N O O y a .Ld. +-' O -d p U O O O N O r d a ep U" C N E R r OD T O .- M v M W ID C 0 y N 7 to Ln N O O O O (0 O O M d C N a cc a w p m> C d N N O N N d d d Ot ti N a m y ID t H H 3 16 N M a 0 0 r O O co 0 O U O O O N M a 0 0 O O O N co 01 O O A O O O O O O O d A O O O 1p y d O O O O O O O O O O y d O O O O O O O O O O (n Lo C O IL 7' N N N N N N N N N N LL } N N N N N N N N N N d a z CITY OF NORTH RICHLAND HILLS, TEXAS Table 10 Computation of Direct and Overlapping Debt September 30, 2010 (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 $ 44,013,715 (1) 100.00% $ 44,013,715 Birdville Independent School District 237,995,204 44.47% 105,836,467 Hurst - Euless- Bedford Independent School District 205,151,727 0.08% 164,121 Keller Independent School District 725,718,459 4.28% 31,060,750 Tarrant County 322,210,000 3.00% 9,666,300 Tarrant County Hospital District 28,000,000 3.00% 840,000 Tarrant County College District 36,495,000 3.00% 1,094,850 Total overlapping debt 148,662,488 Total direct and overlapping debt $ 192,676,203 Source: First Southwest and respective entities' records . (1) Less - self - supporting debt 109 CITY OF NORTH RICHLAND HILLS, TEXAS Table 11 Computation of Legal Debt Margin September 30, 2010 (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 2010 was established at $.57 per $100 of assessed valuation based on 100% of appraised value. 110 N W (D M r— V M V 00 M OO O O ti Ln V' (D M O O a) y a) O O C (p (6 F- d > > > O O V p U w N C C C � f6 � (6 � r — w LO LO O M M M M O m 'O M �2 M V' r- Ln aO LO (D O a) M O O Ln O O r� O O e- ((D ( LO to V M M QO O N LL w V C d O ~ N � C O O 0 m L 73 a C 0 00 Lw M V r` LM m LO (D C) � O > V M (fl O LD O O r- O LL y r } A 06 O O 00 � 00 r.- r- (/I X (C) V � M M M N N N + + a 16 O _y fA O N X +� R W C C U W c o 0 0 0 0 0 0 0 0 a) c m o 0 0 0 0 o O o 0 0 � 0 E o C C 0 C 0 0 0 0 o p vj a) LO LO O LO LO O O O O > @ J 0) p L!') 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C) co CL () a) J W t .L) 70 U U C O C N C C N C W 00 V ti ti O O N N a) 3 N a) O V Lb M N M V (D (D O 0) U C N x N (.D OO M O r- O N (D O uJ y0 LL 7 Cl) O LO V' 00 O f� U <6 > = M M O N O N = L (n y� ' - C a) N (/) m N a) c j CL (» o > 0 c c CD a) N (D `o a = . m U _ R C- N co LO (D rl- 00 O O C U (0 O O O O O O O O O = N O 0 a) O O O O O O O O O O U U O O lL >- N N N N N N N N N N N Z U M C a7 a) a E O v— M n LO M a .. vi cri v c v v ri v ui 6 E a, c D D Qo ( r N N r r M r LO O cc o0 P- O _ V C O O O O O O O O a) oo E fO r — u o N `c a) n � � c ao 0 jp N M M o 0 0 0 0 0 0 0 a) r r 0) 0) O 0) CD O) m m O > W a) Q N X W ~ n Ui c R V V LO M O a0 O CD (D (D J N ` M V V m LO LO LO m LO LO LD _ ' U @ a) M co co M M M M M m M N (D R a) Q u a) J _U in O 2 t E j O U ° c m r n (D co 00 00 V N 0o O D) V LO 1l M W _ E ~ n M M (D M co [O (D Lc N_ C cc O N �-' Lo LO w m T O O m O- N (D J 'p. M N N N N N M M M Cl) N "6 0 U d W E O L O a U U n } C O N U m r m (0 E r O O V V N LO (D L 0 N p 3 n r n V' '- V N 0) aO oc O U O _ c M LO LO M LO O r 0) r 00 N n O C LO LO O O (O O O O O O U W O � cc 'O d 'O 0) ON N h 2w E oo r) rn C_ C U O N O a C U pl C E U O C O > E C U N iA 0 O E : 3 N _ C O 7 j n of c 00 r� O O c0 O O O O O O N y U N O ca N ,5 .2 O) N O O (D N U Lo O O O — to 0 = N v (D co v! (D O O n v o - 'E c o y 7 LO LO LO (D (D (D co (O (DD (D E O d O L -, a) W o Cl N p U m m O CL N m N C V U Z5 N y E K co x w ani aci o m o c ao U E U Z . c c a) o E Q' w N U @ N E a m m N N M V LO (D CO 0) O_ 'j m O t U A O O O O O O O O O - O x 0) a! O O O O O O O O O O O S a) M U (n E N N N N N N N N N N cc Z m H 2 C W (n O U CITY OF NORTH RICHLAND HILLS, TEXAS Table 14 Principal Employers (unaudited) Year Ended September 30, 2010 Percentage of total City Employer Employees Rank employment* Birdville ISD' 1,127 1 3.91% HealthMarkets 960 2 3.33% North Hills Hospital 828 3 2.87% Santander Consumer USA 794 4 2.76% City of North Richland Hills 597 5 2.07% Tarrant County College - NE Campus 505 6 1.75% Wal -Mart Supercenter 820 497 7 1.73% Wal -Mart Supercenter N. Tarrant 398 8 1.38% Tyson Prepared Foods 398 9 1.38% ATI Career Training School 309 10 1.07% 6,413 22.26% Year Ended September 30, 2001 Percentage of total City Employer Employees Rank employment* Birdville ISD 875 1 4.04% North Hills Hospital 767 2 3.54% Kimberly Clark/Tecnol Division 713 3 3.29% TCJC - NE Campus 615 4 2.84% Mega Life & Health Insurance 600 5 2.77% City of North Richland Hills 574 6 2.65% Wal -Mart 550 7 2.54% H & M Food Systems 432 8 1.99% Sam's Club 275 9 1.27% Five Star Ford 264 10 1.22% 5,665 26.16% 'Num ber denotes employees working in schools in the City of NRH Z SPlit w ith Hurst 3 Actu al number of employees employed at time of reporting * Source: City records 113 This page intentionally left blank. 114 F - ( q 0 0 0 0 0 0 0 O O M m o m M M O N ro M U) O O M O N O O O Iq O O U) U) O O r M O M N M U r 7 N 0 0 0 m M 0 U) r U) U) 7 r r (O 7 M Ih M 0 7 7 7 M N 0 0) (D M 7 N N r N r r m (p 00 N N 7 r r r 7 U) O O O O O O (D O m 0 m O M m M O N CO CO U) C) 000 I� N n O O � O O (O (0 O r (D M O M N C) O CO 7 N (D O O W M N O U) In 7 N r r CO 7 CO n 0 O O 7 7 N N M W 7 r O M V O r r r r N r r r CD ((7 0 0 0 0 0 0 CD O m 0 m O m m M O N (p M (O 0 0 W h (•l t` O O (p O O U) CD O r (D M O M r C) O U) 7 N O O O oV W C'j O U) U) 7 N oD r r ((7 7 M r m (D 7 O N M 7 00 C) 0 7 r (O � O N r r r r N r r r r (D U) O O O O O O M O M O M O M O Cl) O M W M m 0 0- W N O O ((') 0 0 U) (R O r M O M r M 0 7 M N o O O O r E p U7 U) r r r W M C` r n CO O M M N M .- Co N M U) N r N r r M Cp W 7 r N 7 I- r r r 7 O N r r (D m O d U7 U) O O O O O O M O m O M O O O CM O Cl) M Cl) U7 O O co 00 U) N 0 O U7 O O Cl) (0 O r m M O M r M 0 7 r N (D O O M r Q p (0 U) U) 7 r r W M r O m N u7 Cl) Cl) O � (D N Cl) M XW U N r N r m C) N N C` r r 7 O 7 10 LL U U) O O O O O O (D O M O U7 O U) 7 M 0 W M LO J O O W O y (O N 0 O U) O O M CD O r O) CD O (D m M O N N (D 0 0 00 co T J O r y LL p U) U) 7 7 r r r W M it-- O m N 7 C4 M CD 7 r O N M M = y N N — M M r (17 N 7 r r r 7 O N N N r (D T (U Z a } U) O O O O O O (O O M m U) O U) O co O CM W M U) O O O M N O O U7 O O Mr-� O r M (D O CD M M O (O r N (o O O M M C (O Lo 7 M r r N W M C• O M N r O M M (o m 7 r 10 N M N V W jl N r N r r m � m N r 7 co CL a) v r _ L 0 0 0 0 0 o n o u)u) no(n N ooaD 0 m(noor F C N W N O U) U) O O M n O t` O O O CD N r O M r M CO O O (O r O N p (O U) (D M m M (D N 7 U7 0 00 M O U) r (0 N LO 7 r 0 J N r N r r m (D m U) N U7 00 r r r It N Z N r M 0 N �; U) 0 0 0 0 0 0 U" O CO CO C:, N N O (D O COO CO U1 O O r N O) t` O U) U) O O M n O r U) N O N M r 0 0 CD M (D O O O U) 7 p 7 CO U) M r r m M O Lo O W M M O M (O r O N (O M U w N r N r m (D m N N U) r r r 7 04 N E O O O O O Cl Cl U7 O LL) O N O N O (D O N W (D O O O (D C` O (- O U) D O O M C` O n O N O N r r O m (D M U) r O m r Cl) U') (!7 M r r m W M (D C` 7 Lo W 00 co m 00 CD M Lo r U) CD LL N r N r 00 m M N N t` r r r 7 CD N m y C C NZ U C G p a V N N y c6 E C y (1 (U N N d N O Qy�77 .0 U U > C C C U C O d C O U V j "O d U d) N N a a y o E o o a 0 o E C O O y Y N f0 C N T p (6 O N L C (� Of U U_ • d y C O C E y N (1 C C C R 4 R (O E N m E y CD N m 'c L v a� a y p 3 c c - E c m o m u m n Y m co U u = a ` �� r a y > c o 'm m a o m .. m U m a y a a) _ a m :3 o¢ .i a - ) i z x a m a o � CL o � CL ui o = m w cn o 0 0 0 F- a I- U r a = r F U) CITY OF NORTH RICHLAND HILLS, TEXAS Table 16 Operating Indicators by Function /Program Last Ten Fiscal Years (unaudited) Fiscal Year 2010 2009 2008 2007 General government Planning and Inspections Construction Commercial units 47 41 51 56 Commercial value $ 4,578,000 $ 3,790,657 $ 7,907,730 $ 15,083,593 Residential units 66 55 116 235 Residential value $ 14,289,559 $ 13,295,377 $ 31,498,499 $ 54,190,911 Public safety Police Law violations (2) 4,071 4,270 4,289 3,403 Part one offenses 3,452 3,190 3,458 3,216 Traffic violations 24,747 25,111 28,899 20,010 Calls for service 137,645 (9) 123,877 124,212 103,137 Case clearance % 40% 41% 41% 36% Fire Total responses 6,555 6,551 6,929 6,749 Fire responses 1,371 1,617 1,843 1,651 EMS responses 5,184 4,934 5,086 5,098 % responses < 5 minutes 73% 73% 72% 72% Total inspections 2,169 2,308 2,412 2,007 Culture and recreation Parks and recreation Water park admissions 242,554 231,379 233,654 248,205 Golf rounds played 47,594 54,373 56,192 48,838 Library Number of volumes 196,042 192,044 180,737 177,270 Annual circulation 828,889 764,195 606,639 (7) 660,627 Annual loans per capita 12.48 11.56 9.23 (7) 10.31 Public works Water Avg daily consumption (4) 1,205,104 1,213,697 1,317,622 1,178,439 Peak daily consumption (4) 2,627,674 2,751,337 2,963,770 2,449,372 Streets Street overlay - miles 4 5 2 (6) 8 Concrete pavement repair - sq. ft. 16,163 12,655 4,404 (6) 14,694 Pothole repair - sq. ft. 6,786 4,303 5,499 (6) 10,480 Street cut - sq. ft. 193,400 162,446 121,809 (6) 156,141 Sign fabrication 953 1,119 1,455 2,040 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 dosed from March 20th to April 19th, 2008 in order to move to new location. (8) Loan period changed from 2 weeks to 3 weeks. (9) FY 2009 -2010 calculated on a Fiscal Year basis and additional call types now being tracked. 116 Table 16 2006 2005 2004 2003 2002 2001 40 29 47 59 43 46 $ 53,708,815 $ 14,139,519 $ 27,210,050 $ 14,309,787 $ 34,989,928 $ 18,124,797 382 420 310 292 277 348 $ 79,332,989 $ 77,631,113 $ 53,937,035 $ 47,548,847 $ 40,133,683 $ 53,605,960 4,694 4,767 3,764 4,141 4,214 4,710 3,318 2,911 3,312 3,363 3,461 3,014 22,124 22,810 21,317 28,729 26,638 20,405 107,096 5) 114,058 116,877 118,427 118,992 115,946 37% 37% 37% 39% 38% 39% 5,770 5,570 6,992 6,824 5,665 5,505 1,633 1,438 1,696 1,682 1,672 1,843 4,137 4,132 5,296 5,142 3,993 3,662 73% 73% 72% 74% 74% 75% 2,033 1,946 1,020 1,169 521 331 260,869 250,682 213,285 228,992 266,655 250,406 39,603 (3 50,187 52,176 50,368 50,663 44,000 179,366 176,719 170,849 162,020 148,238 135,756 697,013 696,954 723,206 731,499 671,955 521,989 10.97 11.30 11.97 8.47 11.46 9.08 1,397,254 1,264,837 1,131,712 1,190,464 1,165,894 1,205,488 2,701,738 2,787,834 2,400,668 2,976,738 2,576,385 2,927,130 9 11 8 8 6 6 9,485 5,474 1,779 4,471 2,142 1,201 8,738 12,969 15,282 11,322 12,632 27,934 179,703 151,706 231,462 210,232 166,131 144,182 1,795 1,556 2,389 3,331 1,280 2,376 117 CITY OF NORTH RICHLAND HILLS, TEXAS Table 17 Capital Asset Statistics by Function/ Program Last Ten Fiscal Years (unaudited) Fiscal Year 2010 2009 2008 2007 Public safety Police Stations 1 1 1 1 Fire Stations 4 4 4 4 Fire hydrants 2,139 2,100 (4) 2,119 2,077 Culture and recreation Parks and recreation Parks 32 32 32 32 Park acreage 708 708 (3) 706 706 (1) Playgrounds 20 20 20 20 Trails - miles 20 20 20 20 Golf Courses 1 1 1 1 Recreations centers 1 1 1 1 Athletic fields 53 53 53 53 (1) Senior centers 2 2 2 2 Library Libraries 1 1 1 1 Public works Water mains - miles 356 341 (4) 356 354 Water connections 20,420 20,302 20,282 20,516 Wastewater lines - miles 288 285 (4) 245 244 Wastewater connections 19,141 19,068 (5) 19,053 19,350 Storm drain - miles 139 139 138 137 Streets - miles 237 235 234 232 Street lights 2,531 2,525 2,518 2,513 Source: City records Unavailable data is reflected as on the report. (1) Subtracted Thomas Acres (BI SD property no longer maintaining) (2) Oncor performed a city -wide audit of streetlights in 2006. Subsequent years' counts are based on Oncor bill ings. (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. 118 Table 17 2006 2005 2004 2003 2002 2001 1 1 1 1 1 1 4 4 4 4 4 4 1,900 1,850 1,840 1,830 1.775 1,700 31 27 25 24 18 18 741 720 720 701 675 675 21 17 18 18 13 13 15 12 11 7 6 6 1 1 1 1 1 1 1 1 1 1 1 1 59 58 57 57 47 47 2 2 2 2 2 2 1 1 1 1 1 1 342 341 341 334 325 319 19,784 19,356 18,977 18,611 18,329 18,091 234 233 233 229 224 219 18,618 18,257 17,898 17,588 17,020 16,654 135 133 133 131 129 129 227 225 221 214 212 211 2,431 (2) 2,062 2,023 2,012 2,100 2,070 119 CITY OF NORTH RICHLAND HILLS Department: Finance Council Meeting Date: 3 -7 -2011 Presented by: Jimmy Cates Agenda No. F.2 Subject: PU 2011 -010 Authorizing the Purchase of Proxim Traffic Signal Radio Communication Equipment from Anixter, Inc. in the Amount of $40,478.27 and Sole Source Radio Communication Equipment Installation through JTS in the Amount of $52,974.38 Summary: This item is a request for authorization to purchase and install traffic signal radio communication equipment at signalized intersections along Rufe Snow Drive from Meadow Lakes Drive to Starnes Road, Mid - Cities Boulevard from Holiday Lane to Home Depot/Birdville Fine Arts Complex, and Holiday Lane from Lola Drive to Dick Lewis Drive. This project includes a turn key implementation by Anixter, Inc. and JTS in the amount of $93,452.65. General Description This signal radio communication equipment is being purchased as part of the Capital Improvement Project ST1004, the Traffic Signal Light Adaptive System. Funding for the project was approved by Council in the Capital Improvements Budget for Fiscal Year 2010/2011. Council also approved a grant through the American Recovery and Reinvestment Act (ARRA) for stimulus funds on February 8, 2010 that will help cover some of the equipment cost. The project is designed to operate traffic signal lights in a real time environment by being responsive to the changing traffic flow and demand. The real time operation will optimize the signal timing plans which will reduce stops, travel time, delay and fuel consumption for motorists traveling along the arteries. This radio communication equipment purchase and installation is the start of the project. The equipment will allow the traffic signal light controllers to communicate with each other in an electronic digital format. Other equipment for the project such as signal controllers and hardware will be purchased and installed in the near future that will control the operation of the traffic signal lights in a real time environment. The required Proxim radio equipment will be purchased through Anixter's Department of Information Resources (DIR) contract DIR -SDD -1466 with installation to be done by Johnson Technical Services (JTS) under DIR contract DIR -SDD -1529. Sufficient funding is available for the purchase and installation of the equipment. Recommendation: Approve PU 2011 -010 Authorizing the purchase of Proxim Traffic Signal Radio Communication Equipment from Anixter, Inc. in the amount of $40,478.27 and sole source radio communication equipment installation through JTS in the amount of $52,974.38 for a grand total of $93,452.65. QUOTATION Date' 2/15/2011 A N O IK E 1, Quote #: 06839 See stfochad Anoder Terms anc Conditions of SaW Customer 839609 GAYLON CREMEEN NORTH RICHLAND HILLS, CITY OF Anixter Inc. P,O, BOX 820609 Corporate Headquarters 2301 Patriot Blvd. NORTH RICHLAND HILLS, TX 76182 Glenview, IL 60026 Phom ADAPTIVE SIGNAL SYSTEM BROADBAND WIRELESS QUOTE' Fax: ALL PRICING REFLECTS STATE CONTRACT DIR-SOD-1463 Item Quantit An ixter Catalog Number and Description Unit Unit Price Extended Price 01 8 NIS EA 1469.26 $11,754,08 PROXIM 5054-BSUR-US TSUNAMI M P. 11 MODEL 5054-R BASE STATION UNIT WITH TYPE N CONNECTOR- US /CAN PSU *'DIR-SDD-1463 02 30 NIS EA 80.85 $2,425.50 PROXIM ETH-STP-75 75M OUTDOOR, RJ45 TERMINATED UV RATED, STIR SHIELDED CATSE CABLE —DIR-SOD-1463— 03 30 WS EA 58-06 $1,741.80 PROXIM ETH-SURGE-1G POE (POWER OVER ETHERNET) SURGE ARRESTOR FOR TSUNAMI MP. I I (R MODELS). 1000 MBPS WITH SHIELDED RJ45 *'DIR-SDD-1463 04 8 N/S EA 50.71 $405.68 PROXIM 5054-SURGE SURGE ARRESTOR 5 GHZ - STAND. N FEMALE TO FEMALE — DIR-SDD-1463- Page Total: $16,327.06 TERMS NET30, subject to credit approval Quota Total. $40,478.27 F.O.B. SHIRPT., PREPAID SHIPMENT: *******QUOTE VALID FOR 10 BUSINESS DAYS*****—' NOTES, THIS QUOTE CONTAINS PRODUCT MADE OF COPPER. STEEL & OTHER RAW MATERIALS. IF MFG CHANGED PRIOR TO SALE, THE COST Please refer all inquiries to: ANIXTER - DALLAS SALES Phone; 972-353-7271 BURKETT, HOLLY 1601 WATERS RIDGE ROAD Fax: 972-353-7201 LEWISVILLE, TX 75057 COMMENTS: WILL BE ADJUSTED BY THE SAME PERCENTAGE. YOU WILL BE NOTIFIED OF ANY PRICE CHANGE PRIOR TO ORDER PLACEMENT, QUOTATION Date 2/1512011 AMUR Quote #: 06839 See attached Anixter Terms and Conditions o(Sale Customer 839609 GAYLON CREMEEN NORTH RICHLAND HILLS, CITY OF Anbder Inc. P.Q. BOX 820609 Corporate Headquarters 2301 Patriot Blvd. NORTH RICHLAND HILLS, TX 76182 Glenview, IL 60026 Phone: ADAPTIVE SIGNAL SYSTEM BROADBAND WIRELESS QUOTE Fax: ALL PRICING REFLECTS STATE CONTRACT DIR-SOD-1463 Item Quantity Anixter Cataloo Number and Description Unit Unit Price Extended Price 05 16 NIS EA 7150 51,176.00 PROXIM CBL-5054-600-6 6 FT LOW LOSS ANTENNA CABLE ST-N MALE-MALE LMR 600 *'DIR-SDD-1463 06 3 NIS EA 106,57 5319YI PROXIM 5054-PA-23 23 081 PANEL ANTENNA - ST-N FEMALE - 5,725-5.875 GHZ ­DIR-SDD-1463** 07 1 NIS EA 330:00 $330.00 PROXIM 5054-SA60-17 17 DBI SECTOR ANTENNA ST-N FEMALE - 4.9-5.875 GHZ 60 DEGREES **DIR-SDD-1463** 08 4 NIS EA 29126 $1,173.04 PROXIM 5054-SAl20-14 14 DBI SECTOR ANTENNA ST-N FEMALE - 4.9-5,875 GHZ 120 DEGREES — DIR-$DD-1463** 09 18 NIS EA 88126 $15,862.68 PROXIM 5054-SUR-US TSUNAMI MP. 11 MODEL 5054-R SUBSCRIBER UNIT WI INTEGRATED 23-DBI ANTENNA - US PSU ­DIR-SDD-1463** Page Total $18,861.43 TERMS N ET30, subject to credit approval Quota Total. $0,478,27 F.O.B. SHIP.PT., PREPAID SHIPMENT: * VALID FOR 10 BUSINESS DAYS******' NOTES: THIS QUOTE CONTAINS PRODUCT MADE OF COPPER, STEEL & OTHER RAW MATERIALS. IF MFG CHANGED PRIOR TO SALE, THE COST Please refer all inquiries to: ANIXTER - DALLAS SALES Phone: 972-363-7271 BURKETT, HOLLY 1601 WATERS RIDGE ROAD Fax: 972-353-7201 LEWISVILLE, TX 75057 COMMENTS; WILL BE ADJUSTED BY THE SAME PERCENTAGE, YOU WILL BE NOTIFIED OF ANY PRICE CHANGE PRIOR TO ORDER PLACEMENT, QUOTATION Date: 211512011 ����� Quote #: 06839 See attached Arixter Terms and Condgbons of Sale Customer 839609 GAYLON CREMEEN NORTH RICHLAND HILLS, CITY OF AnIxter Inc. P.O. BOX 820609 Corporate Headquarters 2301 Patriot Blvd. NORTH RICHLAND HILLS, TX 76182 Glenview, IL 60026 Phone: ADAPTIVE SIGNAL SYSTEM BROADBAND WIRELESS QUOTE Fax: ALL PRICING REFLECTS STATE CONTRACT DIR-SOO-1463 Item Quantity Anixter Catalog Number and Description Unit Unit Price Extended Price 10 1 N/S EA 1469.26 $1,469.26 PROXIM PVES-1 00 PROXIM VISION ES - SUPPORTS 100 NODES — DIR-SDD-1463*' 11 2 N/S EA 1910.26 $3,820.62 PROXIM 5054-08-US TSUNAMI QUICKBRIDGEA 1 MODEL 5054-R BUNDLE -US /CAN PSU, INCL BSU (1) AND SU (1) BOTH WITH INTEGRATED 21 -DBI ANTENNAS, SOFTWARE AND MANUAL (CABLE NOT INCLUDED) *'DIR-SOD-1463*' Page Total: $5,289.78 TERMS NET30, subject to credit approval Quote Total: $40,47817 F.O.B. SHIP.PT_ PREPAID SHIPMENT. — ­QUOTE VALID FOR 10 BUSINESS DAYS* NOTES: THIS QUOTE CONTAINS PRODUCT MADE OF COPPER, STEEL & OTHER RAW MATERIALS. IF MFG CHANGED PRIOR TO SALE. THE COST Please refer all inquiries to: ANIXTER - DALLAS SALES Phow 972-353-7271 BURKETT, HOLLY 1601 WATERS RIDGE ROAD Fax: 972-353-7201 LEWISVILLE, TX 75067 COMMENTS: WILL BE ADJUSTED BY THE SAME PERCENTAGE, YOU WILL BE NOTIFIED OF ANY PRICE CHANGE PRIOR TO ORDER PLACEMENT. JTS Proposal 5310 S Cockrell Hill RoacPhone 972- 620 -1435 Dallas, TX 75236 Fax 972- 247 -5023 JTS05629 -05 Architects and Builders of Data, Voice, and Video Highways" 02,'15!11 Kyle Fuller City of North Richland Hills City of North Richland Hills North Richland Hills Gaylon Cremeen Gaylon Cremeen Proxim Project 7200A Dick Fisher Drive South 7200A Dick Fisher Drive South North Richland Hills, TX 76180 North Richland Hills, TX 76180 This quotation is per the inital Scope of Work provided by Kimley -Horn on August 24. This quotation does not include Proxim equipment (Access Points, Bridges.. and Repeaters). This quotation is a budgetary estimate only, and is not engineered. Pricing is in accordance with State of Texas DIR contract #DIR -SDD -1529. "DIR -SDD- 1529" and the above Quote # MUST be referenced on the PO. Contract Term End Date for DIR -SDD -1529 is 08. Expiration date of this contract is 08/26/2014. This quotation assumes commercial AC is available (via an outlet) for usage within the existing traffic control cabinets at the intersections. At locations with more than two devices, JTS will furnish an industrial grade power strip to extend the number of AC outlets. Pole extensions may vary, depending on obstructions. Generally the pole extension , ,All be 5' or 10'. The radio will mount either on the light pole or boom, depnding on which provides the best radio path. Lantech IES -2008 8 port managed industrial ethernet switches are budgeted into the project for Water Tower, 80' pole and Service Center. The model can be changed to match city equipment if needed. It is assumed others will furnish ethernet switches for the intersections. Crane costs are included for 80' pole. PO acceptance is contingent on an approved credit application. Pricing is FOB: Destination. Pricing does not include any sales tax which may apply. Terms are NET 30. JTS' tax ID number is: 752621300. JTS warrants all workmanship for a period of one (1) year from the date of installation completion. All equipment and component warranties are pass - through from their respective OEMs. Project Management 2 1 Project Management, meetings, coordiation 3 1 Pre - installation calculations, network details 4 SubTotal Project Management $9,571.43 5 Field Intersections (18 Total) (3 6 2 -Alan crew (8 -5) with DIR Discount 7 1,100 Mileage Charqe A 5 Spectrum .4naiysis Study tger node) with DIR Discount Proposal JTS05629 -05 JTS City of North Richland Hills 12109/10 Page 1 9 18 Mounting Hardware, 'Pole. Extensions 10 2,600 Cat 5e 11 8 Industrial Grade Surge Protectors, 6 -Outlet 12 1 Mise Hardware (included patch cords, connectors, cable glands, weatherseal. etc.) 13 SubTotal - Field Intersections $23,177.49 14 15 Water Tower 16 3 2 -Man crew (8 -5) with DIR Discount '17 180 Mileage Charge 18 3 Mounting Hardware 19 Goo Cat 5e 20 20 Electrical Contractor 21 1 Enclosure 22 1 Industrial Ethernet Switch, 8 Port IE 23 1 Misc Hardware (included patch cords, connectors, cattle glands, weatherseal, etc.) 24 SubTatal - Water Tower $11,804.14 25 26 80' Monopole 27 2 2 -NIan crew (8-5) with DIR Discount 28 120 Mileage Charge 29 2 Mounting Hardware 30 300 Cat 5e 31 1 Enclosure 32 1 industrial Ethernet Switch, 8 Port IE 33 1 hlisc Hardware (included patch cords, connectors, cable glands, weatherseal, etc.) 34 1 Crane rental 35 SubTotal - 80' Monopole $8,581.93 36 37 Service Center 38 2 2 -Man crew (8 -5) with DIR Discount 39 300 Mileage Charge 40 2 Mounting Hardware 41 400 Cat 5e 42 1 Industrial Ethernet Switrh, 8 Port IE 43 1 Misc Hardware (included patch cords, connectors, cable glands, weatherseal, etc_) 44 SubTotal - Service Center $7,839.39 SubTotal $52,974.38 Sales Tax :0.00 Shipping $0.00 Total $52,974.38 Submitted Accepted ty le I z a-Mee Date 121912010 Print Name Date JTS City of North Richland Hills CITY OF NORTH RICHLAND HILLS Department: City Manager's Office Council Meeting Date: 3 -7 -2011 Presented by: Karen Bostic Agenda No. F.3 Subject: GN 2011 -020 Support Proposed Resolutions of the 35W Coalition Summary The City of North Richland Hills, as a member of the 35W Coalition, has been asked to support two resolutions that have been proposed by the Coalition. The first resolution supports the use of public - private partnerships to specifically enable the completion of all segments of the North Tarrant Express. The second resolution supports the delivery of SH183 and IH35E. General Description The 35W coalition is a nonprofit membership organization of concerned citizens, business and land owners, developers, city, county and state officials and transportation experts that advocate for transportation improvements along Interstate 35 in northern Tarrant County and southern Denton County. The 35W Coalition has supported improving mobility along north IH35W, northeast IH820 and SH121/183 Airport Freeway through the use of innovative funding concepts, public private partnerships and other funding alternatives. The 35W Coalition is seeking city support of a resolution for the delivery of all segments of the North Tarrant Express by the Texas Department of Transportation through public - private partnerships. Currently segment 1 and a portion of segment 2 of the project are under construction. The resolution supports the continued development of segments 2E, 3A, 3B, 3C and 4. The resolution goes on to state support of necessary legislative changes to reauthorize and grant, for a minimum of 4 years, the Texas Department of Transportation the authority to implement the North Tarrant Express project through public - private partnerships or other similar mechanisms. It also supports, encourages, and requests the Texas Department of Transportation to proceed with the delivery of the projects listed above as quickly as possible. In the second resolution the Coalition is seeking city support for the delivery of IH35E and SH183 by the Texas Department of Transportation through public - private partnerships, specifically IH35E managed lanes from US380 to IH635 and SH183 managed lanes from SH161 to IH35E/Trinity Parkway. The resolution goes on to state support for necessary legislative changes to grant the Texas Department of Transportation the authority to implement these projects through public - private partnerships or other similar mechanisms. It also supports, encourages, and requests the Texas Department of Transportation to proceed with a public - private partnership delivery model for these projects as quickly as possible upon adoption of the necessary legislative authority. Recommendation Approve GN 2011 -020 in support of the proposed resolutions of the 35W Coalition. RESOLUTION OF 35W COALITION SUPPORTING THE DELIVERY OF THE NORTH TARRANT EXPRESS BY THE TEXAS DEPARTMENT OF TRANSPORTATION THROUGH PUBLIC - PRIVATE PARTNERSHIPS WHEREAS, Interstate 35 (IH35) in the State of Texas, the "NAFTA Superhighway," is one of the most important international trade and commerce routes and has been designated by the U.S. Congress as a National High Priority Corridor; and WHEREAS, IH35 through Tarrant and Denton Counties has become significantly congested, resulting in increased transportation time and costs and jeopardizing the region's ability to expand existing economic development programs and compete nationally and globally for new economic development opportunities; and WHEREAS, the 35W Coalition is a nonprofit membership organization of concerned citizens, business and land owners, developers, city, county and state officials and transportation experts that advocate for transportation improvements along the IH35W North Corridor in Fort Worth, northern Tarrant County and southern Denton County; and WHEREAS, the 35W Coalition has supported improving mobility along north IH35W, northeast IH820 and SH121/183 Airport Freeway through the use of innovative funding concepts, public private partnerships and other funding alternatives; and WHEREAS, the Texas Department of Transportation (TxDOT) and NTE Mobility Partners entered into two Comprehensive Development Agreements on June 23, 2009 to develop, design, construct, finance, operate, and maintain the North Tarrant Express including Segments 1, 2, 3, and 4; and WHEREAS, the North Tarrant Express (NTE) partnership between NTE Mobility Partners and the Texas Department of Transportation (TxDOT) is currently constructing and developing a program of general purpose lane expansion and managed lane improvements for Segment 1 and a portion of Segment 2 (Segment 2W) on Interstate 820 (IH820) and State Highway 121 /State Highway 183 (Airport Freeway) corridor between Interstate 35 West (IH35W) and Industrial Boulevard in North Tarrant County; and WHEREAS, the 35W Coalition together with the City of Fort Worth worked with TxDOT and NTE Mobility Partners to identify construction funding for Segment 3A and 3B for expansion and managed lane improvements on IH35W from Interstate 30 (1 -30) to United State 287 (US 287) and partial interchange improvements at IH35W and IH820; and WHEREAS, the 35W Coalition together with the City of Fort Worth is working with NTE Mobility Partners, TxDOT, and the community and business leadership along the IH35W corridor to identify design and construction funding to complete the interchange improvements at IH35W and IH820 and to continue the expansion and managed lane improvements for Segment 3C north along IH35W from US 287 to State Highway 170 (SH170); and NOW, THEREFORE BE IT RESOLVED THAT: Section 1: The 35W Coalition strongly supports the continued development of the following North Tarrant Express project segments as public - private partnerships to be implemented by TxDOT and NTE Mobility Partners: (1) Segment 2E: SH183 from Industrial Boulevard in Northern Tarrant County to SH161; (2) Segments 3A, 3B and 135W and 1820 Interchange: 135W from IH30 to US287; (3) Segment 3C: 135W from US287 to SH170; and (4) Segment 4: IH820 from SH183 North to South of Randol Mill Road. Section 2: The 35W Coalition strongly supports necessary legislative changes to reauthorize and grant, for a minimum of 4 years, the Texas Department of Transportation the authority to implement the North Tarrant Express project segments identified in Section 1 through public - private partnership or other similar mechanism. Section 3: The 35W Coalition strongly supports, encourages, and requests the Texas Department of Transportation to proceed with the delivery of the projects identified in Section 1 as expediently as possible. 35W Coalition Mac Churchill, Chairman L. Russell Laughlin, President I hereby certify that this resolution was adopted by the 35W Coalition on February 24, 2011. Gail Cooksey, Secretary 35W Coalition RESOLUTION OF 35W COALITION SUPPORTING THE DELIVERY OF IH35E AND SH183 BY THE TEXAS DEPARTMENT OF TRANSPORTATION THROUGH PUBLIC - PRIVATE PARTNERSHIPS WHEREAS, Interstate 35 (IH35) in the State of Texas, the "NAFTA Superhighway," is one of the most important international trade and commerce routes and has been designated by the U.S. Congress as a National High Priority Corridor; and WHEREAS, IH35 through Tarrant and Denton Counties has become significantly congested, resulting in increased transportation time and costs and jeopardizing the region's ability to expand existing economic development programs and compete nationally and globally for new economic development opportunities; and WHEREAS, the Federal Highway Administration (FHWA) has designated the use of managed toll lanes on Interstate 35 East (IH35E) through the approval of an Express Lane Demonstration Program entered into between the Texas Department of Transportation (TxDOT) and FHWA on September 30, 2009; and WHEREAS, THE 35W Coalition is a nonprofit membership organization of concerned citizens, business and land owners, developers, city, county and state officials and transportation experts that advocate for transportation improvements along Interstate 35 in northern Tarrant County and southern Denton County; and WHEREAS, Denton County pledged its Regional Toll Revenue in the amount of $535 million, in addition to voter approved County Road Bond funds in the amount of $55 million, to help finance the completion of the entire IH35E project; and WHEREAS, the North Texas Tollway Authority (NTTA) and the Regional Transportation Council (RTC) adopted a joint resolution on February 10, 2011, supporting the delivery of IH35E and SH183 by the Texas Department of Transportation through public - private partnerships; and WHEREAS, on November 16, 2010 the City Council of Denton voted to support the authorization of innovative funding concepts, public private partnerships and other funding alternatives which can be implemented by reauthorizing TxDOT to enter into contracts with private sector partners to complete IH35E, as designed, in 5 -7 years; and NOW, THEREFORE BE IT RESOLVED THAT: Section 1: The 35W Coalition strongly supports the continued development of the following projects as public - private partnerships to be implemented by the Texas Department of Transportation: (1) IH35E Managed Lanes from US380 to IH635; (2) SH183 Managed Lanes from SH161 to IH35E/Trinity Parkway; and Section 2: The 35W Coalition strongly supports necessary legislative changes to grant the Texas Department of Transportation the authority to implement the projects identified in Section 1 through public - private partnership or other similar mechanism. Section 3: The 35W Coalition strongly supports, encourages, and requests the Texas Department of Transportation to proceed with a public - private partnership delivery model for the projects identified in Section 1 as expeditiously as possible upon adoption of the necessary legislative authority. 35W Coalition Mac Churchill, Chairman L. Russell Laughlin, President I hereby certify that this resolution was adopted by the 35W Coalition on February 24, 2011. Gail Cooksey, Secretary 35W Coalition CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Agenda No. G.0 Subject: EXECUTIVE SESSION ITEMS CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 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: 3 -7 -2011 Presented by: Agenda No. H.0 Subject: INFORMATION AND REPORTS CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Councilman Tom Lombard Agenda No. H.1 Subject: Announcements - Councilman Lombard Announcements More than 140 local businesses are now participating in the Shop NRH program and offering exclusive discounts and coupons to residents. To take advantage of these special offers, log on to the website shopnrh.com. The NRH Recreation Center is offering several art classes for adults this spring. Upcoming classes include jewelry making, screen printing and painting. To register or get more information, contact the Recreation Center at 817 - 427 -6600. A Job Seekers Help Group meets from 6:30 p.m. to 7:30 p.m. each Thursday at the NRH Public Library. Participants will receive resume, cover letter and interview advice from experts and other job seekers. Call the Library at 817- 427 -6814 for more details. Kudos Korner Every Council Meeting, we spotlight our employees for the great things they do. Wesley Millsap, Public Works Department — A resident wrote the City to express thanks for the prompt and courteous response he received to a water service call on New Year's Day. "Wesley was pleasant, efficient and made a great impression on everyone," the resident stated. The resident said he tried to tip Wesley for troubling him on a holiday and he politely declined citing policy. "This gentleman is a true professional, an honorable city employee," the letter said. CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 3 -7 -2011 Presented by: Agenda No. H.2 Subject: Adjournment