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HomeMy WebLinkAboutCC 2013-03-25 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 25, 2013 6:00 P.M. A.0 Discuss Items from Regular City Council Meeting A.1 Presentation of Municipal Complex Boulevard Naming Recommendations (15 Minutes) A.2 Introduction of Senator Kelly Hancock's District Staff & State Legislative Session 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 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, exas in compliance with Chapter 551, Texas Government Code on March 22, 2013 at ve a.m. 4117 � r ssi ant CI y ecretary 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. City Council Agenda — March 25, 2013 Page 1 of 4 r CITY OF NORTH RICHLAND HILLS CITY COUNCIL AGENDA CITY HALL COUNCIL CHAMBERS 7301 NORTHEAST LOOP 820 NORTH RICHLAND HILLS, TEXAS Monday, March 25, 2013 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 Turnage A.2 Pledge - Councilman Turnage A.3 Special Presentation(s) and Recognition(s) - Certificate of Achievement for Excellence in Financial Reporting for the Comprehensive Financial Report ending September 30, 2011 AA 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.5 Removal of Item(s) from the 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. City Council Agenda — March 25, 2013 Page 2 of 4 B.1 Approval of Minutes of March 4, 2013 City Council Meeting C.0 PUBLIC HEARINGS C.1 ZC 2013 -01 Public Hearing and Consideration of a request from Trinity Partners for a Zoning Change from AG Agricultural and C -2 Commercial to PD Planned Development on Tracts 1 OF, 11 D and 11 D1 of the T. Peck Survey and Lot 1 R, Block 1, D.J. Anderson Addition located at 8525, 8533 and 8601 Davis Boulevard - Ordinance No. 3243 D.0 PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. D.1 RP 2013 -01 Consideration of a Request from the City of North Richland Hills for a Replat to create Lots 1R1 & 1R2, Block J, Calloway Farm Addition on 1.384 acres at 7608 Boulevard 26 E.0 PUBLIC WORKS No items for this category. F.0 GENERAL ITEMS F.1 Presentation of Fiscal Year 2012 Audited Financial Report F.2 Approval of Amendments to the TIF #2 Bylaws, Changing the Month of Annual Meetings from November to April - Resolution No. 2013 -011 F.3 Approval of Continued Participation in Tarrant County's HOME Investment Partnership Program - Resolution No. 2013 -012 F.4 Certification of Unopposed Candidates, Cancelling Election and Declaring Unopposed Candidates Elected to Office - Ordinance No. 3242 F.5 Appointments to Library Board - Place 3 & Alternate F.6 Authorize the City Manager to Execute a Professional Services Contract with Brinkley Sargent Architects for the Updating of the NRH2O Family Waterpark's Master Plan 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 Rodriguez City Council Agenda — March 25, 2013 Page 3 of 4 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 22, 2013 at a.m. � �,Om 0 4sint " 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. City Council Agenda — March 25, 2013 Page 4 of 4 CITY OF NORTH RICHLAND HELLS CITY COUNCIL WORK SESSION AGENDA NORTH RICHLAND HILLS CITY COUNCIL WORKROOM 7301 NORTHEAST LOOP 820 NORTH RICHLAND HILLS, TEXAS Monday, March 25, 2013 6:00 P.M. A.0 Discuss Items from Regular City Council Meeting A.1 Presentation of Municipal Complex Boulevard Naming Recommendations (15 Minutes) A.2 Introduction of Senator Kelly Hancock's District Staff & State Legislative Session 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 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 22, 2013. 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 817427 -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. CITY OF NORTH RICHLAND HILLS CITY COUNCIL AGENDA CITY HALL COUNCIL CHAMBERS 7301 NORTHEAST LOOP 820 NORTH RICHLAND HILLS, TEXAS Monday, March 25, 2013 7:04 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 Turnage A.2 Pledge - Councilman Turnage A.3 Special Presentation(s) and Recognition(s) - Certificate of Achievement for Excellence in Financial Reporting for the Comprehensive Financial Report ending September 30, 2011 A.4 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.5 Removal of Item(s) from the 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 March 4, 2013 City Council Meeting C.0 PUBLIC HEARINGS C.1 ZC 2013 -01 Public Hearing and Consideration of a request from Trinity Partners for a Zoning Change from AG Agricultural and C -2 Commercial to PD Planned Development on Tracts 10F, 11 D and 11 D1 of the T. Peck Survey and Lot 1 R, Block 1, D.J. Anderson Addition located at 8525, 8533 and 8601 Davis Boulevard - Ordinance No. 3243 D.0 PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. D.1 RP 2013 -01 Consideration of a Request from the City of North Richland Hills for a Replat to create Lots 1 R1 & 1 R2, Block J, Calloway Farm Addition on 1.384 acres at 7608 Boulevard 26 E.0 PUBLIC WORKS No items for this category. 121 1 = e l :ll 01:7 0 011 :11 ► ►►1: 1 F.1 Presentation of Fiscal Year 2012 Audited Financial Report F.2 Approval of Amendments to the TI'F #2 Bylaws, Changing the Month of Annual Meetings from November to April - Resolution No. 2013 -011 F.3 Approval of Continued Participation in Tarrant County's HOME Investment Partnership Program - Resolution No. 2013 -012 FA Certification of Unopposed Candidates, Cancelling Election and Declaring Unopposed Candidates Elected to Office - Ordinance No. 3242 F.5 Appointments to Library Board - Place 3 & Alternate F.6 Authorize the City Manager to Execute a Professional Services Contract with Brinkley Sargent Architects for the Updating of the NRH20 Family Waterpark's Master Plan G.0 EXECUTIVE SESSION ITEMS G.1 Action on Any Item Discussed in Executive Session Listed on Work Session Agenda :98= 10176 1aVi►AI_1I1[e]►1 =1A191:7: 1901 a - ; 11 H.1 Announcements - Councilman Rodriguez 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 22, 2013. 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 817427 -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. City of North. Richland Hills Work Session Work Session Meeting Agenda North Richland Hills City Hall City Council Workroom 7301 Northeast Loop 820 North Richland Hills, TX 76180 Monday, March 25, 2013 6:00 P.M. A.0 Discuss Items from Reaular Citv Council Meetina A.1 Presentation of Municipal Complex Boulevard Namina Recommendations (15 Minutes) A.2 Introduction of Senator Kellv Hancock's District Staff & State Leqislative Session B.0 EXECUTIVE SESSION - The Citv Council may enter into closed Executive Session to discuss the followina as authorized by Chapter 551. Texas Government Code C.0 Adiournment M RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. A.a Discuss Items from Regular City Council Meeting M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. A.1 Presentation of Municipal Complex Boulevard Naming Recommendations (15 Minutes) Presenter: Jimmy Perdue, Public Safety Director Following a presentation to the Council on January 28, 2013, the City contracted with a public relations firm to help provide guidance in evaluating potential names for the new boulevard. The firm conducted historical research and telephone interviews with community leaders to gain an understanding of the nature of the community. They have completed their work and have submitted recommendations for consideration. A presentation was made earlier to the Naming Board who will advise the Council on their suggestions. M RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. A.2 Introduction of Senator Kelly Hancock's District Staff & State Legislative Session Presenter: Mark Hindman, City Manager Susan Young, District Director with State Senator Kelly Hancock, will be present to introduce herself and District Staff Ann -Marie Craig to the City Council. M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. 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 M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. C.0 Adjournment City of North Richland Hills Regular Session City Council Regular Meeting Agenda North Richland Hills City Hall Council Chambers 7301 Northeast Loop 820 North Richland Hills, TX 76180 Monday, March 25, 2013 7:00 P.M. A.0 Call to Order - Mavor Trevino A.1 Invocation - Councilman Turnaae A.2 Pledae - Councilman Turnaae A.3 Special Presentation(s) and Recoanition(s) - Certificate of Achievement for Excellence in Financial Reportina for the Comprehensive Financial Report endina September 30, 2011 A.4 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.5 Removal of Item(s) from the Consent Aaenda 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 March 4, 2013 Citv Council Meetina C.0 PUBLIC HEARINGS C.1 ZC 2013 -01 Public Hearina and Consideration of a request from Trinitv Partners for a Zonina Chanae from AG Aaricultural and C -2 Commercial to PD Planned Development on Tracts 1 OF, 11 D and 11 D1 of the T. Peck Survev and Lot 1 R, Block 1, D.J. Anderson Addition located at 8525, 8533 and 8601 Davis Boulevard - Ordinance No. 3243 D.0 PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. D.1 RP 2013 -01 Consideration of a Request from the Citv of North Richland Hills for a Replat to create Lots 1 R1 & 1 R2, Block J, Callowav Farm Addition on 1.384 acres at 7608 Boulevard 26 E.0 PUBLIC WORKS No items for this category. F.0 GENERAL ITEMS F.1 Presentation of Fiscal Year 2012 Audited Financial Report F.2 Approval of Amendments to the TIF #2 Bvlaws, Chanaina the Month of Annual Meetinas from November to April - Resolution No. 2013 -011 F.3 Approval of Continued Participation in Tarrant Countv's HOME Investment Partnership Proaram - Resolution No. 2013 -012 F.4 Certification of Unopposed Candidates, Cancellinq Election and Declarinq Unopposed Candidates Elected to Office - Ordinance No. 3242 F.5 Appointments to Library Board - Place 3 & Alternate F.6 Authorize the Citv Manaaer to Execute a Professional Services Contract with Brinklev Saraent Architects for the Updatina of the NRH20 Familv Watemark's Master Plan G.0 EXECUTIVE SESSION ITEMS G.1 Action on Anv Item Discussed in Executive Session Listed on Work Session Aqenda H.0 INFORMATION AND REPORTS H.1 Announcements - Councilman Rodriquez H.2 Adiournment M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. A.0 Call to Order - Mayor Trevino M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. A.1 Invocation - Councilman Turnage M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. A.2 Fledge - Councilman Turnage M RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. A.3 Special Presentation(s) and Recognition(s) - Certificate of Achievement for Excellence in 'Financial Reporting for the Comprehensive Financial Report ending September 30, 2011 Presenter: Larry Koonce, Finance Director Summarv: 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, 2011. 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 29 consecutive years. The GFOA report of results of the FY 2010 awards indicates that of the nearly 1,200 municipalities in the State of Texas, 178 or 15% received the award. Of the nearly 36,000 cities in the United States, 1,852 or 5% received the award. General Descrir)tion: 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. Fred Werner, Past 'President of the Government Finance Officers Association of Texas, and an NRH citizen, will be at the Council meeting to present the Certificate of Achievement award to the City. Mr. Werner has been the Director of Finance for the City of Grapevine and the City of Wichita Falls in his illustrious career. He is currently a consultant in various capacities for cities in the DFW area. 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. M RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. A.4 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. M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. A.5 Removal of Item (s) from the Consent Agenda M RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. B.a 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. M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. B.1 Approval of Minutes of March 4, 2013 City Council Meeting Presenter: Patricia Hutson, City Secretary Recommendation: To approve the minutes of the March 4, 2013 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 — MARCH 4, 2013 I'AY61;1:1- '14'1 -'1 IQ The City Council of the City of North Richland Hills, Texas met in work session on the 4 th day of March 2013 at 6:00 p.m. in the City Council Workroom prior to the 7:00 p.m. regular Council meeting. Present: Oscar Trevino Tom Lombard Tito Rodriguez Rita Wright Oujesky Tim Barth David Whitson Scott Turnage Tim Welch Mayor Mayor Pro Tem, Council, Place 3 Council, Place 1 Council, Place 2 Council, Place 4 Council, Place b Council, Place 6 Council, Place 7 Staff Members: Mark Hindman Jared Miller Karen Bostic Mike Curtis Vickie Loftice Patricia Hutson George Staples Kristin ,James John Pitstick Larry Koonce Stan Tinney JoAnn Stout Craig Hulse Chris Amarante Kirk Marcum Bill Thornton Don Wertzberger Andy Kancel Greg VanNieuwenhuize Clayton Comstock Jerry Lewandowski Stacey Udoni City Manager Assistant City Manager Assistant City Manager Managing Director Managing Director City Secretary City Attorney Assistant to City Manager Director of Planning & Development Finance Director Fire Chief Neighborhood Services Director Economic Development Director Director of Facilities & Construction Assistant Fire Chief Assistant Parks Director Project Manager Assistant Police Chief Engineer Senior Planner Purchasing Manager Public Works Management Assistant Call to Order Mayor Trevino called the work session to order at 6:00 p.m. A.0 Discuss Items from Regular Citv Council Meeting There were no questions from the Council. A.1 NRH Animal Adoption & Rescue Center New Facilitv Update Mr. Jared Miller, Assistant City Manager, gave a brief update on the design process for the new Animal Adoption & Rescue Center Facility project advising Council the facility has been relocated from where it was originally planned. Mr. Miller presented the previous location and the new 'location and explained the rationale for changing the location. Ms. Kim Dowdy, Quorum Architects, presented renderings of the proposed site plan, floor plan and exterior elevations. Council concurred with the new location and the schematic designs presented. A.2 Discuss 2013 Federal Leaislative Positions Ms. Karen Bostic, Assistant City Manager, presented the City's 2013 Federal Legislative positions. Council was advised that as in previous years four guiding principles were used to determine positions — local control, predictable and sufficient level of revenue to provide for residents, opposition to unfunded mandates and quality of life. These are also the same principles used for the State Legislative Program. The highest priorities are expected to be transportation, rights of way, online sales tax and maintaining tax exempt status municipal bonds. The City's positions are: • Transportation — The City supports full funding for federal transportation programs and initiatives that support bridges, roads, highways, transit and high- speed rail. The City supports public- private partnerships that support transportation priorities. • Rights of Way - The City opposes any legislation that will restrict the ability to manage our rights -of -way or that allows rights -of -way user access without appropriate compensation to the City. • Online Sales Tax - The City supports federal legislation to level the playing field between e- commerce and brick and mortar retailers by giving state and local governments the authority to collect sales taxes on remote sales. • Maintaining tax - exempt status municipal bonds - The City of supports continuation of the tax - exempt status for municipal bonds, thereby providing the primary funding source for local infrastructure projects. Council concurred with the 2013 Federal legislative positions for the City. B.0 EXECUTIVE SESSION - Session to discuss the Government Code No items for this category. C.0 Adiournment The Citv Council may enter into closed Executive followina as authorized by Chapter 551. Texas Mayor Trevino announced at 6:31 p.m. that the Council would adjourn to the regular Council meeting. 10 *ell] W-11 Zi 16111 k' D]10�Jl=1 =1 I I ► IL9 A.0 CALL TO ORDER Mayor Trevino called the meeting to order March 4, 2013 at 7:00 p.m. :1011 I&Y-Al I I Present: Oscar Trevino Tom Lombard Tito Rodriguez Rita Wright Oujesky Tim Barth David Whitson Scott Turnage Tim Welch Staff: Mark Hindman Jared Miller Karen Bostic Mike Curtis Vickie Loftice Patricia Hutson George Staples Mayor Mayor Pro Tem, Council, Place 3 Council, Place 1 Council, Place 2 Council, Place 4 Council, Place 5 Council, Place 6 Council, Place 7 City Manager Assistant City Manager Assistant City Manager Managing Director Managing Director City Secretary Attorney A.1 INVOCATION Councilman Rodriguez gave the invocation. A.2 PLEDGE OF ALLEGIANCE Councilman Rodriguez led the pledge of allegiance. A.3 SPECIAL PRESENTATION AND RECOGNITION(S) No items for this category. AA CITIZENS PRESENTATION None. A.5 REMOVAL OF ITEM(S) FROM THE CONSENT AGENDA ►C7iT� B.0 APPROVAL OF CONSENT AGENDA ITEMS APPROVED B.1 APPROVAL OF MINUTES OF FEBRUARY 25, 2013 CITY COUNCIL MEETING MAYOR PRO TEM LOMBARD MOVED TO APPROVE THE CONSENT AGENDA. COUNCILMAN WHITSON SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. C.0 PUBLIC HEARINGS CA SUP 2013 -01 PUBLIC HEARING AND CONSIDERATION OF A REQUEST FROM RICK JORDAN FOR A SPECIAL USE PERMIT FOR AN ACCESSORY BUILDING LARGER THAN 540 SQUARE FEET ON 1.0077 ACRES AT 7416 EDEN ROAD - ORDINANCE NO. 3241 APPROVED Mayor Trevino opened the public hearing. Mr. Rick Jordan, 7416 Eden Road, applicant, presented his request for a special use permit for 1,500 square foot accessory building on his property on Eden Road. Council was advised the building's primary purpose was for the storage of lawn and garden equipment. Mr. Jordan presented a PowerPoint presentation showing the proposed location of the building on property, the rural characteristics of the surrounding AC property, and the proposed building elevations of the building. The Council was advised the proposed building is 30 feet by 50 feet, by 10 feet 6 inches high. The building will be steel framed and metal sheathed on a concrete foundations with a 4:12 roof pitch to match residence. A masonry exterior will be provided on all four sides in a neutral off white /light stone color. Two car garage type doors are proposed on the east and west sides with a walk door and a smaller than standard garage door on the north side. The building as proposed is of sufficient size to store all equipment and material that is currently stored outside or in other accessory buildings on the property. All accessory buildings remaining on the property will be removed with the completion of the new building. Mr. Clayton Comstock, Senior Planner, presented Staff's Report and the recommendations of the Planning and Zoning Commission. Staff is recommending denial of the special use permit for the following reasons: The size of the proposed 1,500 square foot accessory building is not proportionally "accessory" to the primary 1,800 square foot residence or the one -acre lot on which it sits. The proposed accessory building would be close in size and height to the residence. The property is also unplatted and zoned AG and is thus considered legal nonconforming because the lot area and the primary use of the lot do not meet the AG zoning district standards. If /when the property redevelops, a plat will be required and right of way will be necessary for Eden 'Road causing the acreage of the property to drop below one acre. There is currently no zoning category for properties less than one acre that would allow accessory buildings greater than 500 square feet. While this property may be zoned AG, it would otherwise not have the option to develop an accessory building larger than 500 square feet. Because a Special Use Permit is equivalent to a zoning change, it is not recommended that an increase in the nonconforming status of the property be approved. The Planning and Zoning Commission recommended approval of the special use permit on February 21, 2013 by a vote of 6 -1. Mayor Trevino called for those wishing to speak in support or in opposition of the request to come forward. There being no one wishing to speak, Mayor Trevino closed the public hearing. MAYOR PRO TEM LOMBARD MOVED To APPROVE SUP 2013 -01, ORDINANCE No. 3241. COUNCILMAN TURNAGE SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. C.2 TR 2013 -01 PUBLIC HEARING AND CONSIDERATION OF AMENDMENTS TO THE TRANSIT ORIENTED DEVELOPMENT (TOD) DISTRICT CODE IN THE COMPREHENSIVE ZONING ORDINANCE OF THE CITY OF NORTH RICHLAND HILLS. ORDINANCE NO. 3240 APPROVED Mayor Trevino opened the public hearing. Mr. John Pitstick, Director of Planning & Development, presented the item. Mr. Pitstick reviewed the history of the Transit Oriented Development Code (TOD). Following work sessions and a Planning and Zoning public hearing, ten text revisions are being brought forward for Council's consideration. The proposed changes will initially affect the Smithfield area. Mr. Pitstick highlighted the ten text changes to the TOD. The Planning and Zoning Commission recommended approval of the TOD revisions on February 21 by a vote of 7 -0. Mayor Trevino called for those wishing to speak in support or in opposition of the proposed text revisions to the TOD Cone to come forward. There being no one wishing to speak Mayor Trevino closed the public hearing. COUNCILMAN WHITSON MOVED TO APPROVE ORDINANCE No. 3240. COUNCILMAN RODRIGUEZ 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 AUTHORIZE THE CITY MANAGER TO EXECUTE A PROFESSIONAL AGREEMENT WITH LEE ENGINEERING IN THE AMOUNT OF $51,400 FOR THE SIGNAL TIMING SYNCHRONIZATION UPDATE PROJECT ST1301 APPROVED Mr. Jimmy Cates, Public Works Operations Manager, presented the item. Council is being asked to consider a professional agreement with Lee Engineering for the Signal Timing Synchronization Update project. The project consists of updating and optimizing the signal timing plans on eleven signalized intersections along Davis Boulevard and three signalized intersections on Precinct Line Road. COUNCILMAN WELCH MOVED TO AUTHORIZE THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICE AGREEMENT WITH LEE ENGINEERING IN THE AMOUNT OF $51,400.. COUNCILMAN WHITSON SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. F.0 GENERAL ITEMS F.1 AWARD RFB NO. 13 -010 FOR STREET RIGHTS -OF -WAY MOWING SERVICES TO VMC LANDSCAPE SERVICES, LP FOR $159,705.00 APPROVED Mr. Jimmy Cates, Public Works Operations Manager, presented the item. The City Council is being asked to award a contract to VMC Landscape Services for street rights - of -way mowing services. Staff reviewed the two lowest bid proposals and determined that the lowest bidder, Lawn Pros, did not meet specifications and requirements. Staff is recommending the contract be awarded to the second lowest bidder. COUNCILMAN WHITSON MOVED To AWARD RFB No. 13 -010 TO VMC LANDSCAPE SERVICES, LP IN THE AMOUNT OF $159,705.00 FOR RIGHT OF WAY MOWING SERVICES. MAYOR PRO TEM LOMBARD SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. F.2 RENEW ANNUAL CONTRACT WITH VMC LANDSCAPING SERVICES FOR PARKS MOWING SERVICES APPROVED Mr. Bill Thornton, Assistant Parks 'Director, presented the item. Staff is requesting Council approve the fifth and final annual renewal of the contract with VMC Landscaping Services for parking mowing services. The current contract with VMC Landscape Services was executed in 2007 and can be renewed for five consecutive one -year periods. VMC has notified Purchasing of their acceptance of the final renewal option. MAYOR PRO TEM LOMBARD MOVED TO APPROVE THE FINAL ANNUAL RENEWAL OF THE CONTRACT WITH VMC LANDSCAPING SERVICES FOR PARK MOWING SERVICES. COUNCILWOMAN WRIGHT OUJESKY SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. F.3 CONSIDER A RESOLUTION DECLARING THE CITY'S SUPPORT OF AND CONSENT TO THE CREATION OF THE COTTON BELT COMMUTER RAIL IMPROVEMENT DISTRICT - RESOLUTION NO. 2013 -001 APPROVED Mr. Mark Hindman, City Manager, introduced the item. Council is being asked to consider a resolution indicating the City's support for creation of the Cotton Belt Rail Improvement District under the authority granted by Chapter 375 of the Texas Local Government Code. The purpose of the special district will be for funding and constructing the proposed Cotton Belt Corridor rail system utilizing a public- private partnership. North Central Texas Council of Governments has been brought in to help overcome some of the barriers of a regional rail system that crosses multiple cities, counties and transit authorities and coordinate the development of a regional rail system in a unified fashion. Mr. Kevin Feldt, Program Manager, North Central Texas Council of Governments briefed the Council on the project and the need for the legislature to establish a Cotton Belt Rail Improvement District to fund and manage the project. Council was asked to consider approval of a resolution that will declare the City's support of and consent to the creation of a Cotton Belt Rail Improvement District COUNCILMAN WELCH MOVED TO APPROVE RESOLUTION NO. 2013_001. COUNCILMAN HITSON SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. G.0 EXECUTIVE SESSION ITEMS GA ACTION ON ANY ITEM DISCUSSED IN EXECUTIVE SESSION LISTED ON WORK SESSION AGENDA No items for this category. H.0 INFORMATION AND REPORTS H.1 ANNOUNCEMENTS Mayor Pro Tern Lombard made the following announcements. Young Adult Book Club The Library has partnered with a group of local young adult residents to host a book club called the Boojum. This book club, with target members ages 16-30, will meet to discuss contemporary and classic books with the goal of igniting curiosity, discussion, and appreciation of reading, friendship and fun. College -aged young adults will partner with and mentor high school readers through book club interaction. They will meet the third Wednesday of each month, with their first meeting on Wednesday, March 20 at 7:00 p.m. Those interested may contact the Library at 817 - 427 -6800. Warrant Roundup The North Richland Hills Municipal Court will be participating in the 2013 Statewide Warrant Roundup, which runs thru March 10 The focus of the roundup is to encourage anyone who thinks they may have a Class C warrant outstanding to contact the Court so they can make arrangements to clear their warrants. For more information, please contact Municipal Court at 817- 427 -6700. Code Red As the spring storm season nears, the City of North Richland Hills reminds residents to register their phone number with Code Red. The City uses the Code Red system to notify residents by phone of severe weather and other emergencies. To register your phone number with the Code Red system, visit the City's web site at nrhtx.com and click on the Code Red link. If you do not have internet access, you may register by calling 817- 427 -6060 during normal business hours. If you have registered your phone number in the past, you do not need to register it again. Kudos Korner — Entire City Management and Employees. An email was received from a new NRH homeowner stating that she cannot say enough good things about the community, city and its employees. Whether the police department responds to her home alarm, the city utilities responds to marking her water /sewer lines, or animal services responds to her request to pick up a dead animal in the roadway, everyone has been so efficient in responding. She also enjoys the NRH Centre and all of the activities hosted by the city from the Mayor's walk, Neighborhood Initiative to the Night of Holiday Magic, she is so proud to call North Richland Hills her home. H.2 ADJOURNMENT Mayor Trevino adjourned the meeting at 8:18 p.m. Oscar Trevino — Mayor Patricia Hutson, City Secretary M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. C.0 PUBLIC HEARINGS I! =!� COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. C.1 ZC 2013 -01 Public Hearing and Consideration of a request from Trinity Partners for a Zoning Change from AG Agricultural and C -2 Commercial to PD Planned Development on Tracts 10F, 11 1) and 11D1 of the T. Peck Survey and Lot 1 R, Block 1, D.J. Anderson Addition located at 8525, 8533 and 8601 Davis Boulevard - Ordinance No. 3243 Presenter: Clayton Comstock, Senior Planner CASE SUMMARY: On behalf of William C. Anderson, Leonard Hayes Newman and Haltom City Animal Hospital, Trinity Partners is requesting a zoning change from AG Agricultural and C -2 Commercial to PD Planned Development with amended CS Community Services uses and regulations on 8.1937 acres located on the west side of Davis Blvd at 8525, 8533 and 8601 Davis Blvd. CASE DESCRIPTION: Following an unsuccessful attempt for a straight CS Community Services zoning change on this site at their January 28, 2013 City Council meeting (Case ZC 2012 -15), the applicant has amended their request to a PD Planned Development zoning change and has provided specific regulations that would help limit and buffer the use of the property from the neighboring residents to the west. The following chart summarizes what would have been required under the straight CS Zoning District and what is proposed under the PD Zoning District request: Residential Screening Wall Building Setback from Residential Maximum Building Height Residential Landscape Buffer 6 -foot Masonry 35 feet 1.5 feet per 1 foot of setback 15' buffer with one large tree per 30 linear feet; 40% of trees must be evergreen 8 -foot Masonry 50 feet 35 feet 20' buffer with one large tree per 15 linear feet; 100% of trees must be evergreen Additionally, a list of uses typically permitted by right in the CS Community Services Zoning District has been proposed to be removed from this district. See the proposed PD Zoning Regulations attached. CURRENT PLATTING: The properties are currently described as Tracts 1OF, 11 D and 11D1 of the Thomas Peck Survey, Abstract No. 1209 and Lot 1R, Block 1, D.J. Anderson Addition. Plats) must be approved by City Council for this property prior to construction of any new development. CURRENT ZONING: AG Agricultural (8.0297 ac.) & C -2 Commercial (0.184 ac.) COMPREHENSIVE PLAN: The Comprehensive Land 'Use Plan recommends "Office" for this property. The Office Land Use is intended to permit professional and organizational offices with accessory and related uses. If approved, the PD zoning would also change the Comprehensive Land Use Plan to "Retail." The "Office" designation is likely in place on the property because of its existing underdeveloped state and its adjacency to single family residential. Both properties to the north and south, however, are planned for "Retail" and the property is situated in an area that is highly viable for restaurant and retail use. ADJACENT ZONINGILAND USE: 4 *za su ,� O r as �.H LKI ` A ' :e r' i . Direction Zr a Use North PD Retail South C -2 Retail East Davis Blvd; C -1 Retail across West R -2 I Low Density Residential THOROUGHFARE PLAN: The subject property has approximately 900 feet of frontage along Davis Boulevard (FM 1938), which is designated on the Thoroughfare Plan as a "P6D" 6 -lane divided principal arterial. The southernmost portion of the property will have access to an existing right -in- right -out driveway through existing access easements. As the northern portion of the property develops, a fourth arm to the existing signalized intersection would be required to serve the site. Depending on the uses proposed, it is likely that deceleration lanes (and appropriate right -of -way) will be required prior to occupancy. NEIGHBORHOOD INPUT: Staff has been informed by the applicant that they hosted an informational and input - seeking meeting with the neighboring Steeple Ridge residents at Fire Station No. 1 following the City Council meeting on January 28. According to the applicant, the proposed PD regulations reflect some of the issues discussed at that meeting. Representatives from the proposed grocer were also present to answer questions. One person from the Steeple Ridge neighborhood stood up in opposition of this request at the Planning & Zoning Commission hearing. No other letters or petitions have been filed at this time. PLANNING & ZONING COMMISSION: The Planning & Zoning Commission held a public hearing and considered this item at their March 7, 2013 meeting and voted to recommend approval (5 -0) as proposed, adding clarification with additional screening of evergreen trees on the loading area, plus the detention pond will be part of the PD. STAFF REVIEW & RECOMMENDATION: The Planning & Zoning Commission's recommendations have been incorporated into the PD regulations proposed here. This includes increased buffer standards adjacent to loading bays and the entitlement right to detain storm water runoff in a detention facility that meets the new detention pond standards recently approved by Council. Staff recommends approval of Ordinance No. 3243; ZC 2013 -01. �i LOCATION MAP C fy of Keller a Shady Grove Rd AERIAL PHOTO PROPERTY OWNER NOTIFICATION ,, NOTICE OF PUBLIC HEARING CITY OF NORTH RICHLAND HILLS PLANNING AND ZONING COIVMISSION AND CITY COUNCIL Case Numbers: ZC 2013- 01 Applicant: Trinity Partners Locati ern: 8525 — 8601 Davis Blvd You are receiving this notice because you are a property owner of record within 200 feet of the property shown on the attached map. Puraose of Public Hearinsa: A Public Hearing is being held to Consider a request from Trinity Partners for a Zoning Change from AG Agricultural and C -2 Commercial to PD Planned Development on Tracts 1OF. 11D and 11D1 of the T. Peck Surrey fA- 1209'1 and Lot 1R. Block 1, D-J. Anderson Addition located at 8525. 8533 and 8601 Davis Boulevard. Public Hearing Schedule: Public Hearing Dates: PLANNING AND ZONING COMMISSION THURSDAY, MARCH 7. 2013 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 25. 2013 Both Meeting Times: 7:40 P.M. Both Meeting Locations CITY COUNCIL CHAMBERS 7301 N. E. LOOP 820 NORTH RICHLAN'D HILLS, TEXAS If you have any questions or wish to submit a petition or letter concerning the above ceq please contact:. PlanningDepaifinent- Ciheof North Richland Hills 7301 Northeast Loop 828 North Richland Hills. Texas 76180 Phone (817, 427 -6300 Fax (817, 427 -6303 LIST OF NOTIFIED PROPERTY OWNERS Hernandez, Melissa Etvir M Alexander, William G Caulkins, Daniel Etux Soraya 8600 Shadybrooke Dr 8604 Shadybrooke far 8608 Shadybrooke Dr NRH Tx 76182 -8336 NRH Tx 76182 -8336 NRH Tx 76182 -8335 Jenkins- Walker, Aimee Etvir Brian 8612 Shadybrooke Or NRH Tx 76182 -8336 Lynn, Virgil Etux Anita 8616 Shadybrooke Dr NRH Tx 76182 -8336 Wright, Robby D Etux Amy K 8520 Shadybrooke Dr NRH Tx 76182 -8336 Kocian, Marilyn J 8624 Shadybrooke Or NRH Tx 76182 -8336 Burrow, John L & Danielle: 8605 Shadybrooke Dr NRH Tx 76182 -8335 Beccone, Gregory Etux Therese 8617 Shadybrooke Dr NRH Tx 76182 -8335 B of A Nrh LIP 8333 Douglas Ave Ste 1540 Dallas Tx 75225 -5822 Inland Western N Richland H D PO Box 9273 Oak Brook 1160522-9273 Newman, L H II 8601 Davis Blvd Fort Worth Tx 76182 -8310 Patterson Land Investment Ltd PO Box 132040 Tyler Tx 75713 -2040 West, Kenneth G Etux Virginia 8628 Shadybrooke Dr NRH Tx 76182 -8336 Buss, Scott A & Billie J 8609 Shadybrooke Dr NRH Tx 76182-8335 Corbel[, Terry R & Jacqueline Corbell Trust 8621 Shadybrooke Dr NRH Tx 76182 -8335 Monsky Brothers Family LP PO Sox 67 San Marcos Ca 92079 -0€767 Fort Worth Community Credit Un 1945 Forest fridge Dr Bedford Tx 76421 -5724 Haltom City Animal Hospital 5705 E Belknap St Fart Worth Tx 76117 -4144 Y & L Enterprises LLC 1190 Lees Meadow Ot Great Falls Va 22066 -1859 Walker, Autumn M Etvir Stephen 8601 Shadybrooke Dr NRH Tx 76182 -8335 Bronstad, Roland L Etux Carol 8613 Shadybrooke Dr NRH Tx 75182 -8335 X T 0 Energy Inc 810 Houston St Ste 2000 Fort Worth Tx 76102-0000 Target Corporation PO Box 9456 Minneapolis Mn 55440 -9456 Anderson, William C 8525 Davis Blvd Fort Worth Tx 76182 -8311 Rhp Real Estate Ltd Etal 100 Independence PI Ste 200 Tyler Tx 75743 -1327 Vanwie, Steven L 8551 Shadybrooke Ct NRH Tx 75182 -8330 Underwood, William E IV & Maxi Ferguson, Maria C Minacapelli, Renato Etux Sally 8555 Shadybrooke Ct 8559 Shadybrooke Ct 85£2 Shadybrooke Ct NRH Tx 761828330 NRH Tx 76182-8330 NRH Tx 76182 -6330 Jarzombek, Jerry J Etux Tricia 8558 Shadybrooke Ct NRR Tx 76182 -8330 Boyett, Rosa L 8554 Shadybrooke Ct NRH Tx 76182 -8330 Child, Shannon R 3225 Green Tee Dr Apt 122 Pantego Tx 76013 -3076 ORDINANCE NO. 3243 ZONING CASE ZC 2013 -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 AN 8.1937 ACRE TRACT OF PROPERTY FROM AG (AGRICULTURAL) AND C -2 (COMMERCIAL) TO PD (PLANNED DEVLOPMENT) 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 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 an 8.1937 acre tract of land located at 8525, 8533 and 8801 Davis Boulevard 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) and C -2 (Commercial) to PD (Planned Development) zoning and approving the PD land use and development regulations and corresponding site plan documents for such property attached hereto as Exhibit B. 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. U 14111 PASSED AND APPROVED on this 25th day of March, 2013. In Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: George A. Staples, City Attorney APPROVED AS TO CONTENT: �el Ir' &r]M Z163;4d:INIs]:IWG1 Z al:I IIwi Oscar Trevino, Mayor John Pitstick. Planning & Development Director EXHIBIT A 4 TRACT 1A (3.2421 AC.) BEING ALL THAT CERTAIN LOT, TRACT OR PARCEL OF LAND SITUATED IN THE CITY - OF NORTH RICHLAND HILLS, TARRANT COUNTY, TEXAS, AND BEING ALL OF 3.32 ACRE TRACT OF LAND DESCRIBED IN A DEED TO WILLIAM C. ANDERSON AND RECORDED IN VOLUME 12214, PAGE 1062, VOLUME 12342, PAGE 1666 AND VOLUME 12342 PAGE 1676 OF THE DEED RECORDS OF TARRANT COUNTY, TEXAS AND BEING MORE PARTICULARLY DESCRIBED MY METES AND BOUNDS AS FOLLOWS; BEGINNING AT A 5/8 IRON ROD SET FOR THE SOUTHEAST CORNER OF SAID 3.32 ACRE WILLIAM C. ANDERSON TRACT, SAID CORNER BEING IN THE NORTHWEST RIGHT-OF' WAY LINE OF DAMS BOULEVARD (F. hi. 1938) AND BEING AT A DISTANCE OF SOUTH 89° 40' 00" EAST AT A DISTANCE OF 14.55 FEET FROM THE NORTHEAST CORNER OF LOT 1 R, BLOCK 1 OF D. J. ANDERSON AUDITION, AN ADDITION TO THE CITY OF NORTH RICHLAND DILLS, TARRANT COUNTY, TEXAS ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME CABINET A, PAGE 12125 OF THE PLAT RECORDS OF TARRANT COUNTY, TEXAS; THENCE NORTH 89° 40' 00" 'WEST AND DEPARTING THt NORTHWEST RIGHT -OF -WAY LIFE OF SAID DAVIS BOULEVARD (F. M. 1938) AND ALONG THE SOUTH LINE OF SAID 3.32 ACRE WILLIAM C. ANDERSON TRACT AND PASSING AT A DISTANCE OF 14.55 FEET THE NORTHENST CORNER OF SAID LOT 1 R, AND ALONG THE NORTH LINE OF SAID LOT 1R ARID THE SOUTH LIME OF SAID 3.32 ACRE WILLIAM C. ANDERSON TRACT AND PASSING AT A DISTANCE OF 199.31 FEET THE NORTHWEST CORNER OF SAID LOT 1R AND A COMMON CORNER OF LOT 2 OF BLOCK 1 OF D.J. ANDERSON ADDITION, AN ADDITION TO THE CITY OF NORTH RICHLAND HILLS, TARRANT COUNTY, TEXAS ACCORDING TO THE FLAT THEREOF RECORDED IN CABINET "A ", SLIDE 12125 OF THE PLAT RECORDS OF TARRANT COUNTY, TEXAS, AND CONTNUING ALONG THE SOUTH LINE OF SAID 3.32 ACRE WILLIAM C. ANDERSON TRACT AND THE COMMON NORTH . LINE OF SAID LOT 2, FOR A TOTAL DISTANCE OF 308.22 FEET TO A 5 /8" IRON ROD SET FOR THE NORTHWEST CORNER OF SAID LOT 2 AND THE SOUTHWEST CORNER OF SAID 3.32 ACRE WILLIAM C. ANDERSON TRACT AND BEING IN THE EAST LINE OF BLOCK 1 OF STEEPLE RIDGE ADDITION, AN ADDITION TO THE CITY OF NORTH RICHLAND HILLS, TARRANT COUNTY, TEXAS ACCORDING TO THE PLAT THEREOF RECORDED III CABINET "A". SLIDE 873 OF THE PLAT RECORDS OF TARRANT COUNTY, TEXAS; THENCE NORTH 00' 18' 45" EAST AND FOLLOWING ALONG THE WEST LINE OF SAID 332 ACRE WILLIAM C. ANDERSON T€ JiGT AND THE EAST LINE OF SAfO BLpC:K 1 OF STEEPLE: RIDGE ADDITION, FOR A DISTANCE OF 332.43 FEET TO A 5 /8" IRON ROD SET FOR THE NORTHWEST CORNER OF SAID 3.32 AC. -°- WILLIAM C. ANDERSON TRACT; THENCE SOUTH 89° 59' 46" V "JEST AND DEPARTING THE EAST LINE OF BLOCK 1 OF SAID STEEPLE RIDGE ADDITION AND ALONG THE NORTH LINE OF SAID 3.32 ACRE WILLIAM C. ANDERSON TRACT, FOR A DISTANCE OF 538,52 FEET TO A 5 /B" IRON ROD SET FOR THE NOTHEAST CORNER OF SAID 3.32 ACNE WILLIAM C. ANDERSON! TRACT, SAME BEING IN THE NORTHWEST FIGHT --OF -WAY LIME OF DAVE BOULEVARD (F.M. 1938); THENCE SOUTH 34° 46' 33" WEST AND FOLLOWING ALONG THE NORTHWEST RIGHT -OF -WAY . LINE OF DAMS BOULEVARD (F. M. 1938) FAR A DISTANCE OF 446.94 FEET TO THE POINT OF BEGINNIMO AND CONTAINING 3.2421 ACRES OF LAND, MORE OR LESS. EXHIBIT A (CONT.) TRACT 18 (0. 1640 AC.) BEING ALL THAT CERTAIN LOT, TRACT OR PARCEL OF LAND SITUATED IN THE CITY OF NORTH RICHLAND HILLS, TARRANT COUNTY, IrXAS, AND BEING ALL OF LOT 1R, BLOCK 1 OF D. J. ANDERSON ADDRION, AN ADDITION TO THE CITY OF NORTH RrHLAND HILLS, TARRANT COUNTY, TEXAS ACCORDING TO THE PLAT THEREOF RECORDED IN CABTNEI' A, PAGE 12125 OF THE PLAT RECORDS OF TARRANT C OUN TY, TEXAS ADD BEING THE SAME TRACT OF LAND DESCRIBED IN A DEED TO HAL OM CITY ANIMAL HOSPITAL, INC. AND RECORDED IN CABINET A. PAGE 12125 OF THE DEED RECORDS OF TARRANT COUNTY, TEXAS AND BEING MORE PARTICULARLY DESCRIBED MY METES AND BOUNDS AS FOLLOWS: BEG INNING AT A 5/ IRON ROD SET FOR THE SOUTHEAST CORNER OF SAID LOT "J R. SAID CORDER BEING IN THE NORTHWEST RIGHT—OF—WAY LINE OF DAMS BOULEVARD (F. M. 1 938 ), SAID POINT ALSO BEING THE COMMON NORTHEAST CORNER OF LOT 2 OF BLOCK 1 OF D.J. ANDERSON ADDITION, AN ADDITION TO THE CITY OF FORTH RICHLAND HILLS, TARRANT COUNTY, TEXAS ACCORDING TO THE PLAT THEREOF RECORDED IN CABINET "A ", SLIDE 12125 OF THE PLAT RECORDS OF TARRANT COUNTY, I'EXAS; THENCE NORTH 56' 10' 00" WEST AND DEPAR'nNG THE NORTHWE RIGHT—OF—WAY LIT OF DA.AS BOULEVARD (F. M. 1 38) AND ALONG THE COMMON LINE OF SAKE LOT 1 R AND LOT 2, FOR A DISTANCE E OF 1 46.85 FEET TO A 5/'B IRON ROD SET FOR THE COMMON CORNIER OF LOT 1 R AND LOT 2, SAID POINT BEING IN THE SOUrH LINE OF SAID 3.32 AIDE VAL LAM C. ANDERSON TRACT; THENCE SOUTH 89' 40' 00" EAST AND FOLLOWING ALONG THE NORTH LIME OF SAID LOT 1 R AND THE SOUTH LINE OF SAID 3.32 ACRE WILLIAM C. ANDERSON TRACT, FOR A DISTANCE O F 176.76 FEET TO A 5/8" IRON ROCS SET FOR THE NORTHEAST CORNER OF SAID LOT 1 R, SAID POINT BEING IN THE NORTHWEST RIGHT—OF—WAY OF—INA"Y LINE OF DA' AS BOULEVARD (F. M. 1938) THENCE SOUTH 34` 47' 00� WEST AND FOLLOWING ALONG THE NORTHWEST RIGHT—OF—WAY LINE OF SAID DAVIS BOULEVARD (F. M. 1938) FOR A DISTANCE OF 32.77 FEE TO A 5/8 IRON ROD SET FOR CORNER, S OUTH THENCE O. RIGHT—OF—WAY LINE OF SAO DAMS ar FO R A DISTANCE OF 64.79 FEET TO THE POINT OF MORE OR LESS, B EGfNNING AND CONTA)NING 0.1540 ACRES OF LANk EXHIBIT A (CONT.) TRACT 2 (4.787+6 AC.) BEING ALL THAT CERTAIN LOT, TRACT OR PARCEL OF LAND SITUATED IN THE CITY OF NORTH RICHLAND HILLS, TARRANT COUNTY, TEXAS, AND BEING THE SAME TRACT OF LAND DESCRIBED IN A DEED TO L. 41 . NEWMAN 11 AND RECORDED IN VOLUME 4858, PAGE 526, OF THE DEED RECORDS OF TARRANT COUNTY, TEXAS, AND BEING MORE PARTICULARLY DESCRIBED MY METES AND BOUNDS AS FOLLOWS. BEGINNING AT A 5/8" IRON ROD SET FOR CORNER IN THE NORTHWEST RIGHT --OF -WAY LINE OF DAVIS BOULEVARD (F. M. 1936 )SATE BEING THE SOUTHEAST CORNER OF TRACT 2 OF BRENTWOOD ESTATES, AN ADDITION TO THE CITY OF OF NORTH RICHLAND HILLS, TARRANT COUNTY, TEXAS ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 388 --97, PAGE 31 OF THE PLAT RECORDS OF TARRANT COUNTY, TEXAS, THENCE SOUTH 34° 13' 1€3" WEST AND FOLLOWING ALONG THE NORTHWEST FIGHT --OF -WAY LINE OF DAMS BOULEVARD (F. M. 1938) FOR A DISTANCE OF 399.70 FEET TO A 5/8" IRON ROD SET FOR CORNER, SAME BEING THE NORTHEAST CORNER OF A 3.32 ACRE TRACT OF LAND DESCRIBED IN A DEED TO WILLIAM C. ANDERSON AND RECORDED IN VOLUME12214, PAGE 1062, VOLUME 12342 PAGE 16761 OF THE DEED RECORDS OF TARRANT COUNTY, TEXAS; THENCE SOUTH 89" 59' 46" WEST AND DEPARTING THE NORTHWEST RIGHT -OF -WAY LINE OF DAVIS BOULEVARD (F. M. 1938) FOR A DISTANCE OF 538.52 FEET TO A 5/8" IRON ROD SET FOR CORNIER IN THE FAST LINE OF 13LOCK 'I OF STEEPLE MIDGE ADDITION, AN ADDITION TO THE CITY OF NORTH RICHLAND HILLS, TARRANT COUNTY, TEXAS ACCORDING TO THE PLAT THEREOF RECORDED IN CABINET "A", SLIDE 873 OF THE PLAT RECORDS OF TARRANT COUNTY, TEXAS, THENCE kORTH 00 16' 53" FAST AND FOLLOWING ALONG THE WEST LINE OF SAID 3.32 ACRE WILLIAM C. ANDERSON TRACT AND THE EAST LINE OF SAID BLOCK 1 OF STEEPLE RIDGE ADDITION, FOR A DISTANCE OF 314.03 FEET TO A 5f8" IRON ROD SET OR CORNER IN THE SOUTH LIFE OF TRACT 2 OF AFORESAID BRENTWOOD ESTATES; THENCE NORTH W 45' 30" 'EAST AND DEPARTING THE EAST LINE OF BLOCK 1 OF SAID STEEPLE RIDGE ADDITION AND ALONG THE SOUTH LINE OF AFORESAID BRENTWOOD ESTATES, FOR A DISTANCE OF 761.76 FEET TO THE POINT OF BEGINNING AND CONTAINING 4.7876 ACRES OF LAND, MORE OR LESS. EXHIBIT A (CONT.) V rj v , 1 1 CURRENT ZONING: PROPOSED ZONING: R 4 M r— TRACT 2 A c 0 r_- t: r V"O MR 3 m-K T;l 4 it vmm w2 ra Mr- lb b // / f i 1. ww , =-- , z r-- WWI =. —­ 1 . - 1 ' 17. lb R X EMM 'AhOU a "6 M r— =a' w a r_- t: r MR 3 m-K T;l vmm w2 ra Mr- M& Ki a. Bo"AwrropcGRAPNro suwFy 8.1937 ACRES OF LAND 71=_ Vg= z L.N. NEWMAN. 11 PROPERTY "ne FV% l W=Vll.T_ — VM WILLIAM C. ANDERSON PROPERTY CV4:I1 :1I11 i:] Nonresidential Planned Development (NR-PD) District No. 67 Land Use and Development Regulations for 8525, 8533 and 8601 Davis Blvd North Richland Hills, Texas This Nonresidential Planned Development (NR -PD) District shall adhere to all the conditions of the North Richland Hills Code of Ordinances, as amended, and adopt a "base district" of "CS" Community Services District. The following regulations shall be specific to this NR -PD District. Where these regulations conflict with or overlap another ordinance, easement, covenant or deed restriction, the more stringent restriction shall prevail. ZONING I. Permitted Land Uses. Uses in this NR -PD shall be those permitted in the "CS" Community Service District and shall include a Detention Pond facility which meets the design criteria of Chapter 102 and Section 118 -729 of the Code of Ordinances but shall exclude the following items: 1. Movie Theater 2. Telemarketing Office 3. Mortuary/Funeral Parlor 4. Department Store 5. Grocery Stores/Supermarkets Greater than 30,000 Square Feet 6. Pet Day Care 7. Municipal Senior citizens center 8. Shopping Mall or Shopping Center Greater than 30,000 Square Feet 9. Museum 10. Wedding Chapel II. Development Regulations. This NR -PD shall follow the development regulations of the "CS" Community Services District, with the following additions and exceptions: 1. Screening Fence. An 8' masonry screening wall shall be provided. 2. Dumpster Enclosures. Dumpster enclosures shall be equipped with solid metal gates to be closed at all times, except during loading and unloading of refuse, unless the dumpster is already located inside a Screened Loading Area as defined below. 3. Residential Setback. All buildings shall be setback a minimum of 50 feet from any residential property line. 4. Building Height. There shall be a maximum building height of 35 feet. EXHIBIT B (CONT.) 5. Screening of Loading Areas. Any commercial loading areas facing residential property shall be screened by solid evergreen trees, installed at a minimum height of eight feet and maintained by the property owner. Ill. Administrative Approval of Site Plans. The purpose of this NR -PD is to provide Land Use and Development Regulations beyond the scope of what is typically required. Site plans which comply with all development - related ordinances and this Ordinance shall be administratively approved by the staff Development Review Committee. Deviations from the regulations provided herein shall require City Council approval of a zoning change to revise this Nonresidential Planned Development. LANDSCAPING I. Buffer Yard Regulations. A minimum twenty foot (20') landscape buffer shall be maintained along all residential property lines. Said buffer shall have, at a minimum, the following plant material: 1. One (1) Large Tree per 15 Linear Feet of Buffer; one hundred percent (100%) of which shall be Afghan (Eldarica) Pine, Arizona Cypress, or similar, or a combination thereof. The placement of these trees shall be credited toward the tree replacement requirements of Section 114 -35 of the Tree Ordinance. 11. Detention Pond Landscaping. 1. A minimum of one (1) large tree with irrigation shall be provided per 50 linear feet of width along the eastern boundary of the Detention Pond. The placement of these trees shall be credited toward the tree replacement requirements of Section 114 -35 of the Tree Ordinance. EXHIBIT B (CONT.): ILLUSTRATIVE DEVELOPMENT PLAN �. r J �(�{� r r f ! Il '�� J _ J I c] XTO PROPERTY GROCERY STORE _ �S-Kj O LANE ]EcfL T NNJ LAN PROPOIDED RGHTIN-ROHTWT DAVIS BOULEVARD 70 OFINFWAY (F M. 1 D38) �T� T� RM RIGHTIM-R[GHTIT 90 BE 01-011E!�� FQ Be MWIMED FOR hE1Y ORIVEVVAYJ I TARGET SHOWING CENTER 0 fiO 128 18O 249 O HIC SCALE N FEET 1 – 1 . CONCEPT PLAN 0361IAERC[a!)EVEL07— 1)"ISOLVD NORTH 104 A HILL& TEW ga Lu 0- 0 ci > 0 C13 D cl U-I 0 L) 0 z C-4.0 iJI Ilk EXHIBIT B (CONT.): DETENTION POND SITE PLAN - Z , A START F TMIN WAI�. " crl. 01 . vz\\ LU 2 EL DETE]TM PMD 0 LLJ Ln C) C) w LLI :E 0 0 z 0 20 10 6U so IN FEET DETENTION POND PLAN WMMEFtlaDEYELO W DAYI86L N,)RTHRICI0.AH W" TO" C-3,1 EXCERPT FROM THE MINUTES OF THE MARCH 7, 2013 PLANNING AND ZONING COMMISSION MEETING ZC 2013 -01 Public Hearing and Consideration of a request from Trinity Partners for a Zoning Change from AG Agricultural and C -2 Commercial to PD Planned Development on Tracts 10F, 11 D and 11 D1 of the T. Peck Survey and Lot 1 R, Block 1, D.J. Anderson Addition located at 8525, 8533 and 8601 Davis Boulevard Kevin McIntosh, 401 Polo Ct., Colleyville, TX came forward representing Trinity Partners, stating they came through a few months ago and requested a CS zoning and was approved by the Planning and Zoning Commission but denied by City Council (5- 2). The neighboring residents filed a petition and it required a super majority. We are back with a PD request with more information to allow a more informed decision. Now we are requesting a zoning change from C -2 and AG to a PD Planned Development on the said tracts above. There was a Power Point presentation showing the current zonings and showed why they believe this property should be zoned CS via PD. This is obviously a regional shopping destination with other office type uses on the proposed site with at least a half million square feet of retail and restaurant at the intersection today including Wal -Mart and Target and there are approximately 72,000 cars per day in this area. There are residential neighborhoods directly to the west and major arterial streets are surrounding the site including Davis Blvd, Precinct Line and North Tarrant Parkway. Over time Davis Blvd has become an arterial thoroughfare carrying lots of traffic. We met with members of the HOA on numerous occasions (10/22/12, 01115113 and 02/19113) to discuss the project and some of their concerns. We are currently under contract with Aldi Grocery Store, just over 16,000 square feet and are ready to move forward with approval from the City. Capital One Bank is proposed and we are finalizing a lease with them pending city approval. In addition, the fast food restaurant in the foreground is Chick- 'Fil- A. There has been approval on a real estate and operations level so now we are just negotiating the final site plan. One other undeveloped piece of land north of the fast food has an offer from a national dentist to occupy about 5000 square feet in a free standing building. Some of the highlights of the PD are: 17 We have agreed to not do any more than 30,000 square feet with Aldi Grocery Store 2) We have agreed not to build a shopping/ strip center larger than 30,000 square feet 3) We have increased the buffer yard to 20 feet and the tree requirement from one tree every 30 feet to one tree every 15 feet, change types of trees to 100% evergreen 4) We will be increasing masonry wall to 8 feet and feel the buffer between the residential and development will be much better than other areas of the city 5) We have increased the building setback to 50 feet 6) We have agreed to a 35 feet maximum height for all buildings 7) We have added dumpster enclosures equipped with a solid metal gate 9) We have agreed to install a 6 foot screening wall (plant or masonry to be decided) between residential and commercial for loading areas There is also a representative from Aldi here to answer any questions that the Commission has. Chairman Shiflet asked where would the 5000 square foot dentist office be located on the site plan? Mr. McIntosh said to the north of the fast food location. There will be a location for detention behind the dentist office. Clayton Comstock came forward saying this is a Public Hearing for ZC 2013 -01, a request by Trinity Partners on behalf of William C. Anderson and Leonard Haynes Newman for a Zoning Change from AG and C2 to NR -PD Planned Development with amended CS Community Service zoning district uses and regulations on about 8 acres located at 8525, 8533 and 8601 Davis Blvd. The site plan and aerial photographs were shown on the presentation. The zoning is Agricultural and a portion being C -2 at the corner. The future land use designation is Office and staff feels with the inclusion of Davis Blvd going all the way to Hwy. 114 and the completion of North Tarrant Parkway this is really a regional retail center and is appropriate for more commercial uses. The applicant did provide a concept (plan which includes the general lay out of buildings that would meet the PD zoning regulations as proposed. They are adopting the CS Community Services uses and regulations as a base district and eliminated a few uses from being permitted in that district including pet day cares, department store, movie theater, wedding chapel„ etc. As far as the regulations are concerned, this is the core reason they are returning with a PD with the amount of feedback they got at the City Council meeting with a straight zoning request. The masonry wall and landscape buffer came up, among other things. It was intended that if they came back with a PD it would be more favorable to meet the residents and City Council concerns. They have added an 8 foot masonry screening wall instead of the minimum 6 foot, solid metal gates on the dumpster enclosures, increased residential setback to 50 feet from the minimum 35 feet, decreased the maximum building height to 35 feet, screening of loading areas will have solid evergreen trees. It is not clarified here, but going forward to City Council there needs to be an 8 feet note in the PD. When future site plans for the potential tenants come forward and meet the regulations of this PD, they can go through the DRC process and not go through Planning and Zoning Commission and City Council. If you are familiar with the PD that the Wal -Mart is on, any additional development has to go back through the P &Z and City Council approval. If they meet the ordinance, guidelines and other regulations, they can just go through the Development Review Committee. The buffer yard regulations have been increased to 20 foot buffer with one large tree per 15 linear feet; 100% trees must be evergreen. Staff recommends approval of this request. Don Bowen asked if an agreement is reached with the dentist, would it have to come back to P &Z? Clayton Comstock said no, it would not. If for some reason any of the potential tenants were to pull out, they would still have the regulations in ,place that should accommodate any concerns as far as buffering and things of that nature. Chairman Shiflet asked for clarification of the 8 foot tree height. Clayton Comstock said the applicant had mentioned an 8 foot screening of the loading areas, but it is not on their PD right now. So if this is recommended to City Council just make part of the motion. There was a discussion regarding the buffer yard screening /fencing and the loading area /fencing. Chairman Shiflet opened the Public Hearing on ZC 2013 -01 and asked if anyone wished to speak. Steve Vanwie, 8551 Shadybrook Ct. came forward stating he has lived there over 20 years and did a lot of research before moving based on the future land use. Several of the neighbors bought their property based on an ordinance from 2001 stating there would be offices as a buffer to the neighborhood. There are concerns with light pollution from the grocery store and fast food being open late, noise pollution, smell to the neighborhood, traffic and safety concerns. Office uses would have lower density of traffic than a grocery store. Chairman Shiflet closed the Public Hearing and entertained a motion. Steve Bowman, Director of Real Estate with Aldi came forward and is very excited about coming to North Richland Hills and looks forward to being in this community. The store hours are only open until 9:00 Monday through Saturday, 8:40 on Sunday so there will not be late hours to cause issues with the neighbors. Clayton Comstock said that the new lighting ordinance is one of the most restrictive in Northeast Tarrant County and will only allow for'/ foot candle at the residential property line and all luminaires must be fully shielded from view at the residential property line. Also, depending on how the motion goes tonight and before going to City Council, have the aesthetics of the detention pond be addressed and have the rights to it in the PD. With the new detention pond ordinance that was passed, they would be required to get an SUP, but we are not going to put an SUP on top of a PD, so we would be changing the PD at that point for the detention pond. Brad Bowen, with Trinity Partners, 508 Wagon Wheel, Colleyville, same forward saying the area behind the bank and Chick- Fil -A is the area where the detention pond will be. It will encompass approximately 115 of the total area, very shallow 4 foot pond, not raised edges built into the existing slope. It will not be holding any water unless there is a heavy rain and it needs to be slowed down as it is released downstream. The facility itself will be graded, erosion control, ground cover, mowed and maintained. APPROVED Bill Schopper motioned to approve ZC 2413 -41 as proposed with adding clarification with additional screening of evergreen trees on the loading area, plus the detention pond will be part of the PD. The motion was seconded by Don Bowen. The motion passed unanimously (5 -4). Chairman Shiflet said he wanted to address some concerns. The lights will not be an issue at all with the lighting standards. Considering what could be there, this is probably as light as you're going to get out with. The residents' concerns in the 1990's are why we have a tree ordinance now because the lot was clear cut. We have city ordinance to regulate the smell, but the traffic is on ongoing issue because of all the construction. The traffic light at Target will probably be activated more frequently to give Shady Grove a break. Don Bowen said this is at the confluence of three major arterials so there will be traffic M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. D.0 PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. D.1 RP 2013 -01 Consideration of a Request from the City of North Richland Hills for a Replat to create Lots 1 R1 & 1 R2, Block J, Calloway Farm Addition on 1.384 acres at 7608 Boulevard 26 Presenter: Clayton Comstock, Senior Planner CASE SUMMARY: On behalf of SRI Real Estate Properties LLC, the City of North Richland Hills is requesting approval of a Replat for the purpose of subdividing one commercial lot of 1.384 acres in to two lots at 7608 Boulevard 26, at the northeast corner of Road to the Mall and Boulevard 26. DESCRIPTION: The property is currently occupied by a Sonic Drive In restaurant and the City is under contract to purchase the undeveloped 0.526 acre at the corner of Boulevard 26 and Road to the Mall so that a landscaped entry feature to the new City Hall and surrounding development can be provided. It is not the City's intent, once purchased, to develop the property other than the entry feature. The only easement to be dedicated by this plat that did not already exist is a sight visibility triangle easement on the City's future lot. Staff is currently researching the details of the "Marquee Sign Area Operating Agreement" that is shown on the City's future lot. It was dedicated by separate instrument in 1978 and thus cannot be abandoned by this plat. If staff's research shows there to be a possible issue, the City will pursue abandoning the "agreement" through a separate instrument. CURRENT PLATTING: Lot 1, Block J, Calloway Farm Addition CURRENT ZONING: "C -1" Commercial 10/01/41 UN= 1: 14►RILV1=I;jW,1L 11 THOROUGHFARE PLAN: Boulevard 26 is planned as a P6D 6 -lane divided principal arterial roadway with 130' of right -of -way. There is currently a 115' foot of right -of -way present in this section, however staff does not believe that requiring 15' of right -of -way dedication from the Sonic property would be roughly proportional to the request for a replat to convey property. No development or redevelopment is proposed by either party, so there is essentially little or no trigger to support right -of -way dedication. PLANNING & ZONING COMMISSION: The Planning & Zoning Commission is scheduled to consider this item at their March 21, 2013 meeting. Staff will present the recommendation of the Commission at City Council. This plat is being expedited through the approval process to accommodate a March 28, 2013 closing date to purchase the property prior to the April 5 City Hall groundbreaking ceremonies. STAFF RECOMMENDATION: Approval of RP 2013 -01 iw•llf_rd19111, V M. 1-1 =1 V 1-10,: M to] o � CL _ k r f ir s 4 { b ell r ,tom ,. It 0 a �`r REPLAT EXHIBIT BRITTA €N & C.RA L4AW aURYGY4'G 0 . � I.__ .eii rev rvs. rener irvc Yoiovc onlcr a ... p on pYp*YVypm {pap Z .. n -\ LOT IRS, RLOCIC 7 O.B58 ACRES Tai. «. w�.h. e.....> a.,,,.. «.n.,m..aro..�.......,..sa.n.,,m max.. (37.974 S@, FT.) xz revru•mwa 7 �F , a. xrrimwrmnee�rran.nsavwnv+ Huirvrw �� � N �9p�18 "8 f *acmae uc. e�+++«w� s �. w r �. .. �a- le�a.oe alrcaemm.marepaa uc LOT JRl, RLOCK f 0.520 ACRES awe ,ogre / \, (28,895 58. FT.) yaw �, d c=m.00' _.. !! / uawwnM.�rn'�eaa ert« urmxorrtcaaci ..1 e % / ?lt9F MNW REPLA.r �f - - LOTS 1 Rl M D 1 R2, BLOCK J Ca4LLQWd1Y FARM f4Q01TIQN . s — - n�r4 "' xx xrmxo me,rcumarrealwer wxe «sn G THYHIR CO?NrV.TWb - -_ -_ - - 1.8@V MFEB OJrCF rrEwLLxW w. VM1.4eCE 8uR4EV.199rKMGl rap.lp ��r•;�• _ � � ruwumra mmm,ncxwo BFJHGA FEN�]49F WTI. BYX%l.CNLOrYAV FARFr MrOR10N I _ - - MMUe A11],rE L[r9 P iL4r FYFL Ae lei. N0, tl . MlE - HlH OIY NO NN1fp1 M RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. E.0 PUBLIC WORKS No items for this category. M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. F.0 GENERAL ITEMS M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. F.1 Presentation of Fiscal Year 2012 Audited Financial Report Presenter: Laury Fiorello, Assistant Finance Director Summarv: The results of the fiscal year (FY) 2012 Comprehensive Annual Financial Report (CAFR) for the City will be presented by Assistant Director of Finance Laury Fiorello. A representative of the independent audit firm of Deloitte and Touche will present the audit opinion. General Descrit)tion: A copy 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. 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 2012 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. An electronic copy of the CAFR will be made available on the City's website. Individuals may also request a copy on a diskette from the Finance Department and hard copies will be available at the North Richland Hills City Hall and Library. Recommendation: Accept the 2012 fiscal year Audited Financial Report as presented. t 64 IL ss " • 6" s k . `= 7 Comprehensive Annual Financial Report For Fiscal Year Ended September 30, 2012 Y $ r.it of Forth R ichland Hills Tayas lo s �, r,��Jra�► ��' A l + li! , r , � • , ;q ,,}, r l J l jJf l ►I kf P 2 VI L N q � t . 7 �� eauex Deaigttaed C'.ity. Atatu�',3 Office and J3udgd & J` -ejea wh -Depa gment of .Na dh J` "iw d Niffi, 9 exw CITY OF NORTH RICHLAND HILLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2012 City Officials Oscar Trevino Mayor Tom Lombard Place 3 Mayor Pro Tem Tito Rodriguez Rita Wright Oujesky Place 1 Place 2 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 of Development Services Larry Koonce Director of Finance Prepared by: Finance Department NCORTH RICHLAND H I L L S City of Choice ACKNOWLEDGEMENTS The Comprehensive Annual Financial Report was prepared by the Department of Finance Office of Accounting: Karen Bostic Assistant City Manager Larry Koonce, CPA, CGFM Director Financial Reporting Staff; Laury Fiorello, Assistant Director Phyllis O'Neal, Finance Assistant Amy Stephens, Accountant II Huibi Wang, Accountant I Pamela Knapp„ Accounting Technician Amanda Brown, Accounting Technician Jullian Kyoshabire, Accounting Technician Special appreciation is given to: Budget and Research Department Mark Mills, Director Jennipher Castellanos, Budget Analyst Orsheka Moore, Financial Analyst Human Resources Department Patrick Hillis, Director Cameron Rowland, Assistant Director James Edwards, Human Resources Analyst Ellen Cooper, Benefits Coordinator Jenny Bransford, Payroll Specialist Chelsea Barbour„ 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. City of North Richland Hills, Texas Comprehensive Annual Financial Report For Fiscal Year Ended September 30, 2012 Page(s Title Page I Table of Contents 111-V INTRODUCTORY SECTION Letter of Transmittal IX - XIII GFOA Certificate of Achievement XIV Organizational Chart XV List of Principal Officials XVI FINANCIAL SECTION Independent Auditors' Report 1 Management Discussion and Analysis 3-14 BASIC FINANCIAL STATEMENTS Government -wide Financial Statements: Statement of Net Assets 17 Statement of Activities 18 Fund Financial Statements: Balance Sheet - Governmental Funds 19 Reconciliation of the Balance Sheet of Governmental Funds to the Statements of Net Assets 20 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 21 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 22 Statement of Net Assets - Proprietary Funds 23 Statement of Revenues, Expenses, and Changes in Net Assets - Proprietary Funds 24 Statement of Cash Flows - Proprietary Funds 25 Statement of Fiduciary Net Assets - Fiduciary Funds 26 Statement of Changes in Fiduciary Net Assets - Ficuciary Funds 27 Notes to Basic Financial Statements 29 -62 City of North Richland Hills, Texas Table of Contents REQUIRED SUPPPLEMENTARY INFORMATION: Schedule of Funding Progress -- Texas Municipal Retirement System Other Post Employment Benefits Schedule of Funding Progress Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual General Fund Notes to Required Supplementary Information - General Fund OTHER SUPPLEMENTARY INFORMATION: Non -major Governmental Funds: Combining Balance Sheets Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual General Debt Service Fund Promotional Fund Donations Fund Special Investigation Fund Drainage Utility Fund Parks and Recreation Development Fund Crime Control District Fund Gas Development Fund Traffic Safety Fund Internal Service Funds: Combining Statement of Net Assets Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets Combining Statement of Cash Flows STATISTICAL SECTION Government -Wide Information: Net Assets by Component Changes in Net Assets Table 1 Table 2 Paae(s) 65 66 67 68 -69 72 -73 74 -75 76 77 78 79 80 81 82 83 84 LIR 87 88 91 92 -95 IKA City of Worth Richland Hills, Texas Table of Contents Fund Information: Pa e s Fund Balances - Governmental Funds Table 3 97 Changes in Fund Balances - Governmental Funds Table 4 98 -99 Appraised and Actual Value of Taxable Property Table 5 100 Property Tax Rates - Direct and Overlapping Governments Table 6 101 Principal Taxpayers Table 7 102 Property Tax Levies and Collections Table 8 103 Ratios of Outstanding Debt by Type Table 9 104 Computation of Direct and Overlapping Debt Table 10 105 Computation of Legal Debt Margin Table 11 106 Pledged Revenue Coverage Table 12 107 Demographic Statistics Table 13 108 Principal Employers Table 14 109 Full -time Equivalent Municipal Employees by Function/Program Table 15 111 Operating Indicators by Function/Program Table 16 112 -113 Capital Asset Statistics by Function/Program Table 17 114 -115 OVA This page intentionally left blank. Introductory Section NCH This page intentionally left blank. N O F T H K r C H L A N U HILLS IqRH T I I F CITY O 1 CHOICE March 25, 2013 Department of Finance To the Honorable Mayor, Members of City Council, City Manager, and Citizens of the City of North Richland Hills, Texas: We hereby issue the comprehensive annual financial report of the City of North Richland Hills, Texas (the "City") for the fiscal year ended September 30, 2012. 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, 2012, 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, 2012, are fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City was part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City's separately issued Single Audit Report. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis ( "MD&K). 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 -0649 7301 Northeast Loop 820 • Finance * 817 - 427 -6166 • Fax 817- 427 -6151 I►1 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 63,455 for 2012. 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 for which an appropriated annual budget has been adopted. For the 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. 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. 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— North Richland Hills continues to be home to a stable mix of large employers and retail business amidst a growing resident population each driving City revenue streams upward. The City is centrally positioned in the strong socioeconomic area of North Central Texas. Neighbors with the high growth Cities of Colleyvil le, Keller and Southlake, the City of North Richland Hills remains not only the largest, but the second fastest growing City in Northeast Tarrant County, an 11 City area that contains over 400,000 people. 2012 witnessed a continued decline in unemployment and residential foreclosures. Another 1 % drop in unemployment down to 5 %n at the end of 2012, the City continues to be much lower than Tarrant County, the QFW Metro and Texas. Residential foreclosures continue to trend downward from the peak periods during the recession, with the City's current rate 20% less than Tarrant County, 53 % less than the U.S. overall. This year also witnessed continued increases in taxable sales, taxable property values and new home starts. Compared to the previous fiscal year taxable sales grew by 1.6 %, representing a $12 million increase. This number is significant given the amount of road construction along Northeast Loop 820 where 33 % of the City's tax generating business is located. Taxable property value in 2012 grew for the second straight year, this time by over $85 million of which 35% was the result of new construction. Finally, in 2012 not only did the City realize a 51 % increase in new home starts with 185 versus the previous year, the new start average home value increased by 8 % to $250,000. This growth in new starts was only exceeded by the City of Keller in Northeast Tarrant County. One benefit in being 3` largest City in all of Tarrant County behind Fort Worth and Arlington, the City is able to maintain a diverse mix of major employers that include HealthMarkets, North Hills Hospital and Impel Management Services which employ over 1,600 in the growing healthcare sector; Fitz Manufacturing and SeyTec Aerospace which employ over 250 in the growing aerospace sector, and Con -Way Freight with over 300 employees in the growing supply chain sector, just to name a few. 2013 is projected to be another momentous year as the construction of the Northeast Loop 820 expansion is planned to impact six of the eight ramps in the City. Expected to slightly slow commerce in the immediate area, the project continues to facilitate the redevelopment and revitalization of commercial property along the highway corridor. Lona -term financial olannina — In 2012, the voters authorized the construction of a new municipal facilities building and location. The election authorized $40 million in general obligation debt for the project. The new facility will be the center of a new economic environment in the oldest part of the city. Located in a formal retail (a mall) site, the plans provide for mixed use where commercial and multiple family housing stimulate the revitalization of the area. Projected completion of the new facility is estimated to be January, 2015. 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. U At least annually, management reviews and updates long -range financial plans for the general operations of the City as well as the proprietary activities. Forecasts are prepared using conservative growth estimates for major sources of revenue. Maintaining this conservative approach, coupled with an aggressive debt repayment policy, have assisted in the City maintaining a favorable bond rating since 1997. Analysis is continuously updated to reflect new bond issues and the repayment thereof, as well as updates to estimates based on new developments, historical trends, changes in applicable legal requirements, and Council and management priorities. The plans for the internal service funds include the accumulation of resources for meeting both current and future needs. For example, facilities and fleet support services as well as information services collect user fees to meet current maintenance needs as well as to meet future capital replacement needs. Similarly, the City's policy with regard to self - insurance premiums has been to collect sufficient amounts to cover current health and dental claims as well as additions to reserves for future claims. In fiscal years 2002 and 2003 the Self Insurance (Internal Service) Fund reserves of $3.1 million were depleted due primarily to spiraling inflation in the health care industry and unforeseeable extraordinary health claims. In fiscal year 2004, City Council adopted a strategy to rebuild reserves over 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 Water and Sewer 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 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 1, 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. The average yield for overnight investments for fiscal year 2012 was 0.15 %. The overnight investment's weighted portfolio average at the end of the fiscal year was 45 days. The average yield on all other investments for fiscal year 2012 was 0.79% compared to 1.27% for the prior year. The portfolio's weighted average maturity ( "WAM ") for all other investments at the end of the fiscal year was 246 days, which represents a 44 day decrease over last year's WAM which was 290 days. At fiscal year end, approximately 35.9% was invested beyond one year, 10.9% was invested for one year or less, while the remaining 53.2% 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 $4,994,679 in the aggregate for a 12 -month period beginning on January 1, 2012. 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 xu 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 113 retired employees receiving these benefits. Additional information on the City's pension arrangements and post employment benefits can be found in the notes to the basic financial statements. Awards — The Government Finance Officers Association of the United States and Canada. ( "GFOA ") awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report for the fiscal year ended September 30, 2011. 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 -nine 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 2012 for the 2012 -2013 operating budget. The Distinguished Budget Presentation award was granted to the City for the twenty- second consecutive year by the GFOA. Acknowledtimenfs — 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 =cce Director of Finance I i L t_aury Fiore Assistant Director of Finance XIII 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, 2411 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United Mates 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. P i�E 0 kN FT UTED STATES AND CGt<IM ' - President CORP4.�11TION CNiCA54 Executive Director *4LVA City of North 'Richland Hills CITIZENS 1 Mayor & City Council Municipal Court " Shards and Judge Commissions * City Secretary H `CityAttomey " City Manager I Community Services } I Public Safety Fleet Services Human resources - - Equipment Services — - Employment - Purchasing Police Department -Fire Equipment -Risk Management - Utility Services & Collections Engineering -Civil S ervice 4 Planni�Zwi-q Public information Fire Department Neighborhood Services FaciiitiesJConstruction Mgt. _ - Citioable -Emergency Mgt. - Consumer Health --- - Building Services Building inspections -Code Compliance - Construction Mgt. -Animal Services -Parks and Recreation Board [Development Resaw Cummatee Fumtional Re;pnsibilitlea - Funding eewlapmeM- Anlmal Sermces Facilities -Ec numic Dewlapment Board - Mimrals f Gas Fune.HiorW Resoonsibnitles �a20 Expanaton - Municipal Complex Construction I Adminletrative0scal } Devetopment Services Budget Department - Internal Audit -Tax information Services -Computers/Networks - Phones Parks Recreation Library j Golf Course NRH20 SoIld Waste Finance Department PubllcWoft Economic Development — - Accounting Streets - Purchasing �' D - Utility Services & Collections Engineering 4 Planni�Zwi-q Public information _ - Citioable _I -- UUlkies Municipal Court — Building inspections Functional ResponsiblilUes I F16ectipr Reg�� ibllities -Parks and Recreation Board [Development Resaw Cummatee - Library Board -TRTC. •Franchises .RTC TACT -Water Utilities -Fat Worth - LeglslaUve CocmdinatioWAnaiysis -Rail lniliat1ws i KEY "Appointed by Contracted Council L servrces XV CITY OF NORTH RICHLAN❑ HILLS, TEXAS List of Principal Officials September 30, 2012 MAYOR OSCAR TREVINO COUNCIL MEMBER, PLACE 1 TITO RODRIGUEZ COUNCIL MEMBER, PLACE 2 RITA WRIGHT OUJESKY MAYOR PRO TEM, COUNCIL MEMBER, PLACE 3 TOM LOMBARD COUNCIL MEMBER, PLACE 4 DR. TIM BARTH COUNCIL MEMBER, PLACE 5 DAVID WHITSON COUNCIL 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 Managing Director of Community Services Vickie Loftice 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 Director of Budget and Research 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 Cecilia Hurt Barham Director of Fleet Services Thomas Powell Fire Chief Stan Tinney Director of Facilities & Construction Chris Amarante Q0 Financial Section NCH This page intentionally left blank. Deloitte INDEPENDENT AUDITORS' REPORT The Honorable Mayor and Members of the City Council City of North Richland Hills, Texas Deloitte & Touche LLP 2200 Ross Ave. Suite 1600 Dallas, TX 75201 USA Tel: +1 214 840 7000 Fax: +1 214 840 7050 www.deloitte.com We have audited the accompanying basic financial statements of the _governmental activities, business -type activities, each major fund, 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, 2012, 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 regiure 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 desig_nmg 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 ex aminin g, 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, and the aggregate remaining fund information of the City, as of September 30, 2012, 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. As discussed in Note IA, the City adopted the provisions of Statement No. 61 of the Governmental Accounting Standards Board, The Financial Reporting Entity: Ownibus —an amendment o, f GASB Statements No. 14 and No. 34, effective October 1, 2011. Beginning net assets were restated for the blending of certain component units in accordance with the implementation of this standard. In accordance with Government Auditing Standards, we have also issued our report dated March 18, 2013, 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 Member of Deloitte Touche Tohmatw Limited 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. Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, the Schedule of Funding Progress — Texas Municipal Retirement System, the Schedule of Funding Progress — North Richland Hills Other Post Employment Benefits, and the Budgetary Comparison Schedule - General Fund be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the 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 financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and other schedules listed in the foregoing table of contents are fairly stated in all material respects in relation to the financial statements as a whole. 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 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. Such 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. D � 7&-U� 1. L P March 18, 2013 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2012 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 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, 2012 by over $321.3 million (net assets). Of this amount, approximately $46 million (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. • The City's total net assets increased by $5.4 million in fiscal year 2012. Additional details of this increase may be found beginning on page 18. • As of September 30, 2012, the City's governmental funds reported combined fund balances of $95,027,801 which represents an increase of $18,293,843 in comparison to the prior fiscal year's ending balance. • During fiscal 2012 the City implemented, Governmental Accounting Standard's Board (GASB) Statement No. 61 and two component units previously reflected as discrete are now blended. • Approximately 30.6% of total governmental fund balance, or $29,085,897, is available for appropriation at the government's discretion (assigned and unassigned fund balance). • The City's objective regarding General Fund fund balance is to maintain a minimum unassigned fund balance to operate the City for a period of 60 days or 15% of the following year's appropriated budgeted expenditures. This objective was met at year end. • At the end of the current fiscal year, unassigned fund balance for the General Fund was $8,992,908 or 23.9% of General Fund actual expenditures for 2012. • The City's total debt increased by approximately $36.2 obligation bonds and certificates of obligation in the respectively were issued in fiscal year 2012. million during the current fiscal year. New general amounts of $30.545 million and $5.66 million 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 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2012 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 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 -tune 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 five 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 - 22). The General Fund, General Debt Service Fund, General Capital Projects Fund, and Parks and Recreation Development 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. Pronrietary 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, CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2012 such as the City's building maintenance services, fleet management, employee and property insurance coverage, and telephone and computer services. Because these services benefit both governmental and business -type functions, they have been included in both the governmental and business -type activities in the government -wide financial statements. The City maintains three enterprise funds. The City uses enterprise funds to account for its provision of water and wastewater services, golf course operations, and water park activities. The City considers all enterprise funds to be major funds. Financial statements for the enterprise funds can be found on pages 23 - 25 of the report. Notes to the financial statements - The notes to the financial statements provide additional information that is essential for a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 29 - 62 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 $321,271,165 as of September 30, 2012. Analyzing the net assets of governmental and business -type activities separately, governmental activities net assets equal $232,987,847 and business -type activities net assets total $88,283,318. 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 (83.3 %) 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, 2011 and 2012. Current and other assets include restricted deposit and investment balances. Schedule of Assets, Liabilities, and Net Assets Amounts shown in thousands ($000's) As of September 30, Current and Other Assets Capital Assets, Net Total Assets Long -term Liabilities Other Liabilities Total Liabilities Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Net Assets Governmental Activities 2011, 2011, 2012 restated (1) $112,362 $ 74,385 239,873 214,923 352,235 289,308 103,540 55, 041 15,707 15,451 119,247 70,492 Business -Type Activities 21,962 16,620 125,502 71,661 4,720 3,451 20,427 18,902 26,682 20,071 145,929 90,563 205,162 2011, 2012 restated (1 } $ 40,703 $ 34,372 74,262 75,566 114,965 109,938 21,962 16,620 125,502 71,661 4,720 3,451 20,427 18,902 26,682 20,071 145,929 90,563 205,162 Total 62,615 2011, 2012 restated (1) $153,065 $ 108,757 314,135 290,489 467.200 399.246 21,962 16,620 125,502 71,661 4,720 3,451 20,427 18,902 26,682 20,071 145,929 90,563 205,162 178,610 62,615 65,811 267,777 244,421 4,253 2,873 2,711 2,600 6,964 5,473 23,573 37,333 22,957 21,456 46,530 58,789 $232,988 $ 218,816 $ 88,283 $ 89,867 $321,271 $ 308,683 (1) Beginning Governmental Activities amounts have been restated in conjunction with the implementation of a new accounting standard, GAS Statement standard, GASB Statement No. 61 (see footnote 1.A.) 0 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2012 Statement of Activities - ! Govemmental activities increased the City of !North Richland Hills' net assets by $7,007,987 in fiscal year 2012, and business -type activities decreased net assets by ($1,583,462). The following table presents the condensed government -wide statement of activities for the years ended September 30, 20111 and 2012. Changes in Net Assets Amounts shown in thousands (000'x) Year Ended September 30, Governmental Activities Business -Type Activities Total 2011, 2011, restated 2011, restated 2012 (1) 2012 restated (1) 2012 (1) Revenues: Program revenues Charges for services $ 12,230 $ 9,850 $ 35,438 $ 35,833 $ 47,668 $ 45,683 Operating grants and contributions 1,833 880 81 - 1,914 880 Capital grants and contributions 7,402 17,644 51 4,643 7,453 22,287 General revenues: Property tax 22,223 19,340 - - 22,223 19,340 Sales tax 16,974 16,645 - - 16,974 16,645 Nixed beverage 102 128 - - 102 128 Franchise taxes 4,269 4,330 - - 4,269 4,330 Occupancytaxes 210 238 - - 210 238 Unrestricted investment earnings 301 495 50 171 351 666 Miscellaneous 288 1,272 7 31 295 1,303 Total revenue 65,832 70,822 35,627 40,678 101,459 111,500 Expenses: General government 10,400 9,887 - - 10,400 9,887 Public safety 28,881 28,512 - - 28,881 28,512 Culture and recreation 11,680 9,352 - - 11,680 9,352 Public works 7,794 7,679 - - 7 7,679 Interest and other fees 3,453 2,108 - - 3,453 2,108 Utility - - 26,642 27,981 26,642 27,981 Golf course - - 2,430 2,227 2,430 2,227 Aquatic park - - 4,754 4,508 4,754 4,508 Total expenses 62,208 57,538 33,826 34,716 96,034 92,254 Increase in net assets before transfers 3,624 13,284 1,801 5,962 5,425 19,246 Transfers between governmental and Business -Type 3,385 1,591 (3,385) (1,591) - - Net Increase (decrease) in net assets 7,009 14,875 (1,584) 4,371 5,425 19,246 Net assets - beg. Bal. 218,816 203,941 89,867 85,496 308,683 289,437 Adjustment to beginning net assets 7,163 - - - 7,163 - Net assets - end of year $ 232,988 $ 218,816 $ 88,283 $ 89,867 $ 321,271 $ 308,683 (1) Beginning Governmental Activities amounts have been restated in conjunction w ith the implementation of a new accounting standard, GASB Statement standard, GASB Statement No. 61 (see footnote 1.A.) Governmental activities - Governmental activities increased the City of North Richland Hills' net assets by approximately $7 million in fiscal year 2012. The City had an increase in tax revenues of $3,O96,904 during 2012. Charges for services increased by 24.1% or approximately $2.4 million over 2011 revenues. The increase was correlated with increase in housing starts, a multi jurisdictional consolidation of public safety services, and opening of new recreation facility. The total expenses for governmental activity increased by approximately $3.4 million over 2011 totals. The increase to expenses for governmental activities is correlated to several cost drivers. The City opened new recreational facility which has significant operational expenses over the former site. The facilities also increased personnel levels. The Public Safety Police Division 6 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2012 assimilated services of call center (911) and jail services for three other local municipalities. The Police Department increased personnel by the employees for those other entities who joined the consolidation. Operating grants and contributions increased by $953 thousand from fiscal year 2011 to 2012, while capital grants and contributions decreased by $10.2 million from 2011 to 2012. Capital Grants and Contributions increased due to one factor. Developer had contributed infrastructure for Hometown Neighborhood was received in total during 2011. No infrastructure was contributed in 2012 fiscal period. Sales and mixed beverage taxes increased by $302,391 from fiscal year 20111 to 2012. Franchise taxes realized a decrease of ($60,271) from 2011 to 2012. This decrease is within utility franchise fees to General Fund. 2012 saw a normal weather pattern and therefore water sales were slightly lower versus sales during the drought pattern of 2011. Sales taxes are entirely dependent upon the local economy. The City is expecting a slight increase in sales tax revenues for 2013. The most significant governmental expense occurred in the public safety program ( "PS "), which incurred expenses of $28,881,714. This figure represents an increase from the prior fiscal year expenses of approximately $369 thousand. The increase is directly due to the consolidation of three other local call centers (911) and jail services into one central location within the Police Department. All operational costs to run consolidated center was assumed by the City. Culture and recreation program expenses increased by approximately 24.9% (approximately $2.3 million) from fiscal year 2011 to 2012. This division's increase is due to the opening of new recreation facility. Additional personnel and larger facility added to operational cost. Fitness equipment was purchased at approximately $390 thousand. Expenses and Program Revenues - Governmental Activities $pops) else I's see FL■ VA Government Recreation Other Fees ■ Expenses Revenues General Public Safety Culture & Public Works Interest & CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2012 General Revenues by Source - Governmental Activities Unrestricted Mixed 8 o.: Property Taxes 46.756 Safes 41.0 Business -type activities — Business -type activities resulted in a decrease to the City's total net assets. The 2012 decrease was ($1,583,462). The decrease is correlated to the operating losses in the Aquatic Park. The loss was ($205,121). The other component of the loss is due to transfer to governmental activities ($3,384,630) for services provided to business -type activities. This section of this page is intentionally left blank. Management's Discussion and Analysis are continued on the next page. OccuuanevTaxes investment Earnings CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2012 Expenses and Program Revenues - Business -Type Activities $(000 °s) - ill Golf Course a Expenses Revenues Aquatic Park Revenues by Source - Business -type Activities Services- Utility 80.7% Golf Course 6.5% Aquatic Park 12.8% 9 53 OOO 525,000 52Q OOO $15,000 51Q 000 $5,000 $0 Utility - ill Golf Course a Expenses Revenues Aquatic Park Revenues by Source - Business -type Activities Services- Utility 80.7% Golf Course 6.5% Aquatic Park 12.8% 9 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2012 Fund Level Financial Analysis The General Fund fund balance for the year ended September 30, 2012 was $14,328,758, which was an increase of $1,061,886 from 2011. Of this amount, nonspendable fund balance amounts for inventories, prepaids, and advances were $73,232, $45,293, and $589,044 respectively. Assignment of fund balances total $3,759,566. Of this amount $387,534 are encumbrances from 2012 unspent but obligated to vendors at year end. Restrictions from outside or legal authorities of fund balances total $868,715 which are statutorily isolated for the municipal court technology, security, juvenile programs, and franchise peg fees for communication activities. The unassigned fund balance amount of $8,992,908 is approximately 63% of available fund balance. The General Fund property tax revenues realized a decrease from the prior year of ($360,629). Property tax receipts are downward fluctuation is continued stressors from a recuperating economy from the recession of 2008. The City has seen some appraisal values be adjusted along with the slower housing starts. The City has reached approximately 80% build -out of available undeveloped housing plats. With the City's 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 increased by 1% or $123,905 respectively. Ambulance fees grew by $246,807 over 2011, due to an increase in resident rates in fiscal year 2011. The General Capital Projects Fund ( "GCP ") ended the year with an increase of fund balance of $25,228,126 over 2011. The funds increase was due to selling bonds for the new municipal facilities project. $25 million was sold for the project late in the fiscal year. All proceeds from the sale remained unspent at year end. Enterprise Funds realized a decrease to their net assets for the year ended September 30, 2012. The Utility Fund and Aquatic Fund realized losses of ($1,624,772) and ($396,616) respectively. Utility had approximately $918 thousand increase and repair and maintenance costs and a loss of ($404,829) on disposal of an asset. The Aquatic Park saw a decrease in admissions of ($119,704) due to a milder summer compared to the 2011 drought attributing to this variance. Additionally, Aquatic Park saw an additional increase to fiscal debt charges of approximately $275 thousand due to current year refunding of debt. 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, a pattern since late 2008, economic conditions have negatively impacted municipal revenue streams. Implementation of the City's contingency plan was not required during 2012; 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 unassigned General Fund fund balance of $8,992,908 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: • Franchise fees reflected an increase of $42,166 which is primarily due to increases in gas, water and sewer payments, and cable utilities. Rates for gas and water and sewer utilities increased due to higher water sales due to the 2012 drought plus new services from cable franchises were implemented by providers. 10 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2012 • General Fund had positive net budget variances totaling approximately $852,385. The General Fund activities and their individual variances include: General Fund Departmental Budget Variances Positive (Negative) City Council $ 37,650 City Manager 15,640 Communications 13,898 City Secretary 24,660 Legal 76,043 Human Resources 5,579 Finance 12,819 Budget & Research 24,895 Municipal Court 84,617 Planning and Inspections 3,778 Economic Development 6,553 Library 77,102 Neighborhood Services 76,391 Public Works 331,295 Parks & Recreation 118,775 Police 134,482 Emergency Management 182,976 Fire 78,414 Non - Departmental (453,182) Total General Fund $ 852,385 General Fund overall savings is partly caused by encumbrances of current year activities which will be carried to 2012 -2013 budget and expensed in the new budget period. The total of 2011 -2012 encumbrances to be expended in 2012 -2013 totals $387,534 (or approximately 45% of net amount under budget). Capital Asset and Debt Administration Capital assets - At the end of fiscal year 2012, the City had $314 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, 2011 and 2012. 11 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2012 Capital Assets (net of Accumulated Depreciation) Amounts shown in thousands (000's) (1) Beginning Governmental Activities amounts have been restated in conjunction w ith the implementation of a new accounting standard, GASB Statement standard, GASB Statement No_ 61 (see footnote 1.A.) This year's additions included: Description Computer and Machinery Equipment NRH Improvement Various Vehicle Various Water/Sewer Replacement and Improvements Various Land Acquisition Park Improvement Recreation Center and NRH20 Building Various street improvement Capitalized Interest Amount 2,897,572 350,903 445,510 1,105,654 942,571 764,159 24,724,485 21,434,894 14,738 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 resources totaling $72,937,135 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. 12 Governmental Activities Business -Tvoe Activities Total Total 2011, 2011, 2011, 2012 restated (1) 2012 restated (1) 2012 restated (1 } Land & land imp. $ 77,631 $ 76,688 $ 2,579 $ 2,579 $ 80,210 $ 79,267 Works of art 298 298 - - 298 298 Buildings & imp. 44,176 22,229 2,309 1,800 46,485 24,029 Other imp. 104,798 87,528 14,168 14,637 118,966 102,165 Utility plant - - 52,575 54,148 52,575 54,148 Machinery & equip. 8,281 7,868 2,112 1,369 10,393 9,237 Const. in progress 4,689 35,894 518 1,033 5,207 36,927 Total capital assets $239,873 $ 230,505 $ 74,261 $ 75,566 $314,134 $ 306,071 (1) Beginning Governmental Activities amounts have been restated in conjunction w ith the implementation of a new accounting standard, GASB Statement standard, GASB Statement No_ 61 (see footnote 1.A.) This year's additions included: Description Computer and Machinery Equipment NRH Improvement Various Vehicle Various Water/Sewer Replacement and Improvements Various Land Acquisition Park Improvement Recreation Center and NRH20 Building Various street improvement Capitalized Interest Amount 2,897,572 350,903 445,510 1,105,654 942,571 764,159 24,724,485 21,434,894 14,738 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 resources totaling $72,937,135 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. 12 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2012 Debt - At September 30, 2011 and 2012, the City had the following debt outstanding: Outstanding Debt Amounts shown in thousands (DOD's) General obligation bonds Certificates of obligation Governmental Activities 2011, 2012 restated (1) $ 64,269 $ 41,300 33,330 37,420 2011, Business -Type Activities 2012 restated (1) 2011, 2012 restated (1) Totals Totals $ 66,480 $ 42,705 49,745 50,030 Sales tax revenue bonds Loans payable Capital lease Totals 615 1,645 840 1,242 $ 99,054 $ 81,607 $ 2,211 $ 1,405 16,415 12,610 387 - $ 19,013 $ 14,015 615 1,645 840 1,242 387 - $118, 067 $ 95,622 ( 1) Beginning Governmental Activities amounts have been restated in conjunction w ith the implementation of a new accounting standard, GASB Statement standard, GASB Statement No. 61 {see footnote 1 _A.) In fiscal year 2012, 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 property tax rate of $0.57 per $100 assessed valuation for twelve consecutive years. The current ratio of tax - supported debt to assessed value of all taxable property is 1.25 %. Additional detailed information on long -term debt activity is disclosed in the notes (IV -E) to the financial statements. ,Risk - The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. While the City has historically retained a portion of these risks, coverage exists for: general, employment practice, law enforcement, and errors and omissions liability; excess workers' compensation; property damage; commercial crime coverage; and employee life insurance. The Self - Insurance Fund is responsible for workers' compensation, health, automobile liability, and general liability insurance. The City maintains a stop loss third party insurance policy with respect to health claims. This policy covers city medical claims in excess of $175,000 per individual, and/or $4,994,679 in the aggregate for a 12- month period beginning on January 1, 2012. 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 2011 -2012. For budget year 2012 -2013, 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 2012 ended 1% above the budgeted number. When compared to budget year 2011 -2012 actual receipts, sales taxes are anticipated to continue to remain flat in 2013. 13 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2012 The fiscal year 2012 -2013 budget incorporates an increase in the property tax rate. For fiscal year 2012 -2013 the tax rate distribution (per $100 assessed value) for the City is as follows: By policy, the City maintains an unassigned 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. Requests for Information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of North Richland Hills, Director of Finance, P.O. Box 820609, North Richland Hills, Texas 76182 -0609. 14 % of Total Tax Rate Tax Rate Distribution Schedule Tax Rate Distribution General Fund - Maintenance & Operations 57.6% 0.351076 Debt Service Fund 42.4% 0.258924 Total distribution of tax rate 100.0% $0.610000 By policy, the City maintains an unassigned 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. Requests for Information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of North Richland Hills, Director of Finance, P.O. Box 820609, North Richland Hills, Texas 76182 -0609. 14 BASIC FINANCIAL STATEMENTS 15 This page intentionally left blank. 16 CITY OF NORTH RICHLAiND HILLS, TEXAS Govern ment -wide Statement of Net Assets September 30, 2012 17 Primary Govemment Governmental Business -Type Activities Activities Total Assets CURRENT ASSETS Cash, cash equivalents, and investments $ 30,832,996 $ 18,111,420 $ 48,944,416 Receivables, net of allowances: Accounts 542,759 4,873,780 5,416,539 Properly taxes 195,780 - 195,780 Othertaxes 3,295,156 - 3,295,156 Interest receivable 216,918 61,753 278,671 Special assessments 86,652 - 86,652 Intergovernmental 1,649,944 475,550 2,125,494 Other 836,469 - 836,469 Prepaids 364,451 56,194 420,645 Inventories, at cost 235,136 362,346 597,482 Internal balances (2 859 963) 859 963 - Total current assets 3��, %9 98 26,01,1t06 62,197,304 NONCURRENT ASSETS Restricted cash, cash equivalents, and investments 75,989,057 13,652,808 89,641,865 Capital assets - net: Land and nondepreciable land improvements 77,630,868 2,579,137 80,210,005 Buildings and improvements 63,401,030 4,405,050 67,806;080 Improvements other than buildings 182,673,929 24,634,997 207,308,926 Utility plant - 99,445,407 99,445,407 Machinery and equipment 24,117,479 4,876,154 28,993,633 Artwork and historical treasures 298,208 - 298,208 Construction in progress 4,689,409 518,124 5,207,533 Accumulated depreciation 112 938,309) 6Z, 198 080] 175,136 389] Total capital assets - net 3 7Z, 614 4� 0 89 14 133,03 Bored issue costs, net of amortization )7611 251,156 127,167 Total noncurrent assets 316 837 682 88 164 753 405,002 435 Total assets 352�3AHO 114)65 9 467,199,159 Liabilities CURRENT LIABILITIES Accounts payable and accrued liabilities 4,184,169 2,720,276 6,904,445 Deposits and other liabilities 1,157,344 61,614 1,218,958 Retainage payable 1,279,484 46,344 1,325,828 Compensated absences 183,114 31,761 214,875 Unearned revenue 84,544 109,508 194,052 Accrued interest payable 382,042 68,722 450,764 Bonds and certificates of obligation payable 7,994,136 1,565,964 9,560,000 Loans payable 415,082 - 415,082 Capital lease payable - 70,419 70,419 Intergovemmental payables 26,655 563 27,218 Developers' deposits - 44,128 44 128 Total current liabilities 15,706,570 4,719,199 20,425,N9 NONCURRENT LIABILITIES Customers' deposits - 2,016,185 2,016,185 General obligation bonds payable 59,950,563 1,067,323 61,017,886 Certificates of obligation 30,998,986 16,150,983 47,149,969 Sales tax revenue bonds 210,000 - 210,000 Loans payable 425,343 - 425,343 Capital lease payable - 317,426 317,426 Compensated absences 2,876,105 426,711 3,302,816 Intergovemmental payabies - 833,057 833,057 Other post employment benefits obligation 5,195,858 665,954 5,861,812 Net pension obligation 3,882,708 485,603 4,368 311 Total noncurrent liabilities 103 539,563 21,963,242 125 502115 Total liabilities 11946,133 26,682,441 1462,9,tM Net assets Invested in capital assets, net of related debt 2415,162,006 62,615,382 267,777,388 Restricted for Debt service 4,253,430 - 4,253,430 Impact fees restricted for construction - 2,710,553 2,710,553 Unrestricted 23 57 411 22,957 383 46 529 794 Y1, Total net assets $ 23A87)W $ 8983 18 $ 321 65 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, 2012 Program Revenues Net (Expense) Revenue and Changes in Net Assets Operating Capital Grants Charges for Grants and and Governmental Business -type Functions /Programs Expenses Services Contributions Contributions Activities Activities Total Primary Government Governmental activities: General government $ 10,399,845 $ 5,490,245 $ 45,154 $ 4,105,209 $ (759,237) $ (759,237) Public safety 28,881,714 3,426,008 1,576,369 58,425 (23,820,912) (23,820,912) Culture and recreation 11,679,786 2,381,024 128,762 271,903 (8,898,097) (8,898,097) Public works 7,794,339 932,819 82,853 2,966,459 (3,812,208) (3,812,208) Interest and other fees 3,453,283 - - - (3,453,283) (3,453,283) Total governmental activities 62,208,967 12,230,096 1,833,138 71401,996 (40,743,737) (40,743,737) Business -type activities: Utility 26,642,141 28,445,746 80,660 - 1,884,265 1,884,265 Golf course 2,429,973 2,443,865 - 50,744 64,636 64,636 Aquatic park 4,753,949 4,548,828 - - (205,121) (205,121) Total business -type activities 33,826,063 35,438,439 80,660 50,744 1,743,780 1,743,780 Total primary government $ 96,035,030 $ 47,668,535 $ 1,913,798 $ 7,452,740 $ (40,743,737) $ 1,743,780 $ (38,999,957) General revenue: Taxes: Property $ 22,222,620 $ - $ 22,222,620 Sales 16,974,086 - 16,974,086 Mixed beverage 101,724 - 101,724 Franchise 4,269,229 4,269,229 Occupancy 210,324 - 210,324 Unrestricted investment earnings 300,928 50,479 351,407 Miscellaneous 288,093 6,909 295,002 Transfers between governmental and business -type activities 3,384,630 (3,384,630) - Total general revenue and transfers 47,751,634 (3,327,242) 44,424,392 Change in net assets 7,007,897 (1,583,462) 5,424,435 Net assets - beginning of year (as previously reported) 218,816,836 89,866,780 308,683,616 Adjustment to beginning net assets, accounting standard implementation 7,163,114 - 7,163,114 Net assets - beginning of year (as restated) 225,979,950 89,866,780 315,846,730 Net assets - end of year $ 232,987,847 $ 88,283,318 $ 321,271,165 The notes to the financial statements are an integral part of this statement. CITY OF NORTH RICHLAND HILLS, TEXAS Balance Sheet Governmental Funds September 30, 2012 General Capital General Debt Parks and Recreation Tax Increment General Fund Projedts Service Development Finance District #2 Assets Cash, cash equivaenls, and investments $ 12,558,130 $ - $ - $ 1,566,442 $ 3 Receivables, net of allowance Accounts 443,002 2,263,711 - Property taxes 151,251 11,867,863 $ Other taxes receivable 1,792,D40 - Interest receivable 11,910 92,324 Special assessments receivable - 86,652 Intergovernmental receivables 145,609 1,372,487 Otherreoerva6es 68,826 61,551 Due from other funds 886,916 - Prepaid items 45,293 500 Inventories, at cast 73,232 - Advances to other funds 589,044 - Restncted: Cash, cash equivalents, and investments Construction funds - 49,787,752 Transition funds - Debt service funds - - Total assets $ 16,765,253 $ 51,401,266 $ Liabilities Accounts payable $ 981,236 $ 719,337 Retairage payable - 754,991 Accrued liabilities 536,923 8,172 Intergovernmental payables - Due to other funds - Depceits and other liabilities 499,356 613,503 Deferred revenue 418,980 1,216,287 Total liabilities 2,436,495 3,312,290 Fund Balance Monspendable: Inventories 73,232 - Prepaids 45,293 500 Advances 589,044 - Restricted: Municipal court technology & security 720,043 Franchise peg fees 148,672 Parks and recreation development - Gnme controt district Debt service Grants Promotional & economic development Public safety Oapillal projects (bond funded) Comrnitted: 38,865,372 Donations Drainage utility Gas development - Assigned: Savings incentive program 250,360 Retirement stabilization 250,D00 Utility billing assistance 71,672 Rail station project 800,1300 Municipal Facilities 2,000,040 - Oapital projects - 9,223,104 Encumbrances 387,534 - Unassigned 8,992,908 - Total fund balance 14,328,758 48,088,976 Total liabilities and fund balance $ 16,765,253 $ 51,401,266 $ The notes to the financial statements are an integral part of this statement - 44,529 - 720,207 - 3,804 3,445 22,471 69,781 24,916 7,437 21,608 62,738 11,800,863 2,263,711 - - 2,267,515 $ 2,476,134 $ 11,867,863 $ $ 125,174 $ 36,243 $ 3,352 521,140 53,333 3,295,156 23,763 164,059 32,073 - 237,695 557,383 21,608 7,437 1,899,840 2,267,515 309,554 11,310,486 2,267,515 2,238,439 11,310,484 2,267,515 $ 2,476,134 $ 11,867,863 3 19 Other 65,834,609 Governmental Total Govemmentai 9,280,112 $ 23,404,644 99,757 542,759 - 195,784 782,909 3,295,156 30 164,059 - 86,652 62,067 1,649,944 667,601 822,894 48,924 886,916 17,657 70,887 _ 94,844 589,044 4;183,256 65,834,609 423,123 423,123 2,363,691 4,627,402 17,9%678 $ 102,688,709 217,998 $ 2,079,988 - 1,279,483 80,882 679,310 26,655 26,655 739,156 739,156 3,430 1,140,052 48,924 1,716,264 1,117,045 7,660,908 - 94,840 17,657 70,887 - 589,044 886,728 886,728 1,20,750 1,205,750 1,529,823 1,529,823 720,043 148,672 - 1,899,840 1,054,615 1,054,615 2,367,957 4,635,472 27,688 27,688 1,128,458 1,128,458 645,052 605,02 859,586 51,344,992 886,728 886,728 1,20,750 1,205,750 1,529,823 1,529,823 250,360 250,000 71,672 8D0,000 7,027,477 9,027,477 - 9,223,104 82,842 476,376 8,992,908 16,793,633 95,627,801 17,910,678 $ 102,688,709 CITY OF NORTH RICHLAND HILLS, TEXAS Reconciliation of the Balance Sheet of Govermental Funds to the Statement of Net Assets GOVERNMENTAL FUNDS September 30, 2012 Total fund balances -- governmental funds $ 95,027,801 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. 236,262,987 Certain receivables are not available to pay current - period expenditures and, therefore, are deferred in the funds. 1,660,417 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. 10,530,566 Long -term liabilities and related deferred costs , 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. (110,493,924) Total net assets -- governmental activities $ 232,987,847 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, 2012 The notes to the financial statements are an integral part of this statement 21 General Parks and Tax Increment Capital General Debt Recreation Finance District Other Total General Fund Projects Service Development #2 Govemmental Governmental REVENUES Taxes $ 26,834,278 $ $ 5,274542 $ 4,241,341 $ $ 7,427,822 $ 43,777,983 License and permits 1,543,875 - - - 1,543,875 Charges for services 3,361,293 1,913,704 1,440,034 6,715,031 Fines 2,421,696 - - - 2,421,696 Civil citations - - - 778,393 778,393 Contributions 3,420 - 1,700 171,620 176,740 Special assessments - 200 - - - - 200 Investment income 83,247 124,295 6,905 21,574 116,239 63,066 415,326 Intergovemmental 1,485,752 2,574,512 82,852 271,903 1,317,304 5,732,323 Forfeitures - - - - 138,604 138,604 Miscellaneous 252,382 - - 355,713 - 755,48.4 1,363,579 Total revenues 35,985,943 2,699,007 5,364,299 6,805,935 116,239 12,092,327 63,063,750 EXPENDITURES General government 9,945,696 474,016 - 410,081 10,829,793 Public safety 21,633,596 3,284 - - 5,323,110 26,959,990 Culture and recreation 3,301,801 81,078 - 5,580,061 200,167 9,163,107 Public works 2,514,266 1,087,393 - - - 3,601,659 Capital outlay: General government - 841,657 - 296,902 1,138,559 Public safety 49,659 771 - - 60,799 111,229 Culture and recreation - - - 3,302,285 6,242,929 191,552 9,736,766 Public works 33,457 4,896,600 - - 28,460 4,958,517 Debt service: Principal retirement - - 5,542,696 394,251 - 2,910,000 8,846,947 Interest and fiscal charges - - 2,02406 2,151 - 1,065,335 3,092,172 Total expenditures 37,478,475 7,384,799 7,567,382 9,278,748 6,242,929 10,486,406 78,438,739 Excess (deficiency) of revenues over expenditures (1,492,532) (4,685,792) (2,203,083) (2,472,813) [6,126,690] 1,605,921 [15,374,989] OTHER FINANCING SOURCES (USES) Issuance of debit 25,830,000 - 394,251 - 26,224,251 Proceeds from refunding of debt - 2,884,934 - 814,454 3,699,388 Premium on issuance of debt 255,000 236,542 54,622 546,164 Payment to refunded bond escrow agent - (2,940,000) - (869,076) (3,809,076) Proceeds from sale of assets 1,592 3,142,032 1,656 - 3,145,280 Transfers in 3,991,159 875,000 2,067,541 555,243 1,216,661 8,705,604 Transfers out (1,438,333) (188,114) - (1,923,917) (1,292,415) (4,842,779) Total other financing sou roes (uses) 2,554,418 29,913,918 2,249,017 (972,767) (75,754) 33,668,832 Net change in fund balance 1,061,886 25,228,126 45,934 (3,445,580) (6,126,690) 1,530,167 18,293,843 Fund balance - beginning of year (as previously reported) 13,266,872 22,860,850 2,221,581 5,684,019 - 12,962,945 56,996,267 Adjustment to beginning fund balance, accounting standard implementation - - - - 17,437,170 2,300521 19,737,691 Fund balance - beginning of year (as restated) 13,266,872 22,860,850 2,221,581 5,68.4,019 17,437,170 15263,466 76,733,958 Fund balance - end of the year $ 14,328,758 $ 48,088,976 $ 2,267,515 $ 2,238,439 $ 11,310,480 $ 16,793,633 $ 95,027,801 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, 2012 Net change in fund balances - -total governmental funds $ 18,293,843 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. 9,288,350 The net effect of various transactions involving capital assets (i.e. sales, trade -ins, and donations) is to increase net assets. (170,654) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. (955,424) 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. (1,721,190) 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. (18,179,724) 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 (exclusive of capital assets and debt). 452,696 Change in net assets of governmental activities $ 7,007,897 The notes to the financial statements are an integral part of this statement. See note II B for additional information on reconciliation calculations. PA CITY OF NORTH RICH LAN D HILLS, TEXAS Statement of Net Assets PROPRIETARY FUNDS September 30, 2612 Governmental Enterprise Funds Activities - Utility Goff Aquatic Park Total Enterprise Internal Service ASSETS Current Cash, cash equivalents, and investments $ 13,539,122 $ 639,978 $ 3,932,320 $ 18,111,420 $ 7,428,352 Accounts receivable, net of allowance: Billed 2,453,255 - - 2,453,255 - Unbiled 1,946,324 - - 1,946,324 - Other 365,869 15,627 92,705 474,201 13,575 Interest receivable 46,784 3,859 11,110 61,753 31,885 Intergovernmental receivable 4T5,550 - - 4T5,550 - Prepaid items 10,958 39,041. 6,195 56,194 293,564 Due from other funds 34,208 - - 34,208 - Inventories, at cost 300,391 44,735 17,220 362,346 140,296 Total current assets 19,172,461 743,240 4,059,550 23,9T5,251 7,907,672 Noncurrent Restricted assets Cash, cash equivalents, and investments Construction funds 9,388,772 389,013 89 9,867,205 146,314 Impact fees construction funds 1,769,418 - - 1,769,418 - Customer deposits 2,016,185 - - 2,016,185 - Future claims - - - - 4,957,609 Total restricted cash and cash equivalents 13,174,375 389,013 89,420 13,652,808 5,103,923 Bond issue costs, net of amortization 126,675 9,068 115,413 251,156 - Advances to other funds 169,863 - - 169,863 - Capital assets, at cast Land 75,366 1,758,000 T45,771 2,579,137 272,293 Building and improvements 1,136,327 802,762 2,465,961 4,405,050 - Other improvements - 5,290,587 19,344,410 24,634,997 602,769 Utility plant in service 99 - - 99,445,407 - Mactiinery and equipment 1,767,655 2,277,644 830,855 4,876,154 8,413,456 Construction nprogress 518,124 - - 518,124 43,525 Accumulated depredation (48,620,173) (5,373,200] (8,204,707) (62,198,080) (5,722,416) Net capital assets 54,322,706 4,755,793 15,182,290 74,260,789 3,609,627 Total noncurrent assets 67,793,619 5,153,874 15,387,123 88,334,616 8,713,550 Total assets 86,966,080 5,897,114 19,446,673 112,309,867 16,621,222 LIABILITIES Current Accounts payable and accrued expenses 2,400,256 200,154 119,866 2,720,276 1,424,868 Retairk'W payable 17,798 - 28,546 46,344 - Other current liabilities 81,461 19,024 5,257 105,742 25,019 Compensated absences 25,140 - 6,621 31,761 18,146 Unearned revenue - 102,978 6,530 109,508 - Due to other funds - 181,968 - 181,968 Accrued interest payable 30,217 3,784 34,721 68,722 - Bonds payable 681,788 93,212 790,864 1,565,864 - Capital lease payable - 70,419 - 70,419 - Total current liabilities 3,236,660 671,539 992,405 4,900,604 1,468,033 Noncurrent Customer deposits 2,016,185 - - 2,016,185 - General obligation bonds payable 9,667 182,004 8T5,652 1,067,323 - Certificates of obligation bonds payable 9,826,923 704,272 5,619,788 16,150,983 - Capital lease payable - 317,426 - 317,426 - Compensated absences 352,106 - 74,605 426,711 252,716 Intergovernmental payables 833,62f1 - - 833,620 - Advances from other funds - 758,907 - 758,907 - O her post employment benefits obligation 571,619 - 94,335 665,954 444,919 Net pension obligation 416,106 - 69 485,603 328,221 Total noncurrent liabilities 14,026,226 1,962,609 6,733,877 22,722,712 1,025,856 Total liabilities 17,262,886 2,634,148 7,726,282 27,623,316 2,493,889 NET ASSETS Invested in capital assets, net of related debt 51,047,518 3,669,235 7,898,629 62,615,382 3,609,627 Impact fees restricted for construction 2,710,553 - - 2,T10,553 - Unrestricted (deficit) 15,945,123 (406,269) 3,821,762 19,360,616 10,517,706 Total net assets $ 69,703,194 $ 3,262,966 $ 11,720,391 $ 84,686,551 $ 14,127,333 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. 3,596,7677 Net assets of business-type activities $ 88.283 318 The notes to the financial statements are an integral part of this statement. 23 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Expense, Revenues, and Changes in Net Assets PROPRIETARY FUNDS Year 'Ended September 30, 2012 Enterprise Funds Utility Golf Aquatic Park OPERATING REVENUES (3,746,060) (198,701) Charges for services: (396,616) (1,944,892) Water and sewer service $ 27,831,190 $ $ Service charges 936,136 (1,944,892) Inspection fees 67,467 $ Golf course fees and charges - 2,438,409 Aquatic park admissions and services - - Other intergovernmerdal 80,660 50,744 Risk management - - Facility and fleet management Information systems management - Miscellaneous revenues 15,782 - Total operating revenues 28,931,235 2,489,153 OPERATING EXPENSES Claims - - Contractual services 1,628,276 Water purchases 7,922,294 Wastewater treatment services 3,845,819 Personnel services 5,038,489 - Golf course sales and service - 2,024,795 Repairs and maintenance 4,707,076 - Supplies 258,760 Depreciation 3,078,135 368,511 Total operating expenses 26,478,849 2,393,306 Operating income 2,452,386 95,847 NONOPERATING REVENUES (EXPENSES) Investment income 38,304 4,969 Interest and fiscal charges (163,292) (36,667) Other income (expense) 18 6,891 Gain (lass) on disposal of assets (404,829) 5,456 Total nonoperating revenues (expenses) (529,799) (19,351) Income (loss) before transfers 1,922,587 76,496 TRANSFERS Transfers in - - Transfers out (3,547,359) Total transfers - net (3,547,359) - Change in net assets (1,624,772) 76,496 Net assets - beginning of year 71,327,966 3,186,470 Net assets - end of year $ 69,703,194 $ 3,262,966 3 Reconciliation of Change in Net Assets - Business -type Activities: Change in net assets of enterprise funds 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 4,514,598 33,230 4,547,828 937,108 1,824,579 75,017 715,370 759,839 4,311,913 235,915 7,206 (442,036) 1,000 (433,830) (197,915) Total Enterprise $ 27,831,190 $ 936,136 67,467 2,438,409 4,514,598 131,404 49,012 35,968,216 2,565,384 7,922,294 3,845,819 6,863,068 2,024,795 4,782,093 974,130 4,206,485 33,184,068 2,784,148 50,479 (641,995) 6,909 (398,373) (982,980) 1,801,168 (198,701) (3,746,060) (198,701) (3,746,060) (396,616) (1,944,892) 12,117,007 86,631,443 11,720,391 $ 84,686,551 $ (1,944,892) 361,430 $ (1,583,462) Governmental Activities - Intemal Service 43,883 8,577,291 5,258,763 2,370,885 281,944 16,532,766 6,852,518 1,993,276 3,546,077 1,348,538 1,227,224 806,717 15,774,350 758,416 22,443 111,105 38,927 172,475 930,891 301,231 (417,996) (116,765) 814,126 13,313,207 14,127,333 24 CITY OF NORTH RICHLAND HILLS, TEXAS Combining Statement of Cash Flows PROPRIETARY FUNDS Year Ended September 30, 2012 Utility Cash flows from operating activities: Govemrrental Receipts from customers $ 28,840,206 Receipts from interfund services provided Activities - - Other operating revenue 222,478 Payments to suppliers Internal (17,358,595) Payments to employees (4,821,809) Net cash provided by (used for) operating activities $ 2,437,741 6,882,280 Cash flows from noncapital financing activities: $ 35,751,156 Transfers from other funds - - Transfers to other funds (3,547,359) Interfund loan receipts 84,097 Net cash provided by (used for) noncapital and 343,743 related financing activities (1,987,628) (3,547,359) Cash flows from capital and related financing activities: (21,088,451) Insurance recovery proceeds - 18 Proceeds from capital debt 5,365,000 Acquisition and construction of capital assets 534,210 (1,672,204) Principal paid on capital debt (413,964) Interest paid on capital debt - (211,026) Developer contributions (44,128) Proceeds from sale of capital assets - - Net cash provided by (used for) capital and (3,746,060) related financing activities (147,760) 3,023,696 Cash flows from investing activities: (147,760) Interest and dividends received (147,760) 33,554 Net cash provided by investing activities 33,554 equivalents 6,891 6,392,171 Cash and cash equivalent beginning of year 20,321,326 Cash and cash equivalent end of year $ 26,713,497 Reconciliation of operating income (loss) to net cash 5,660,000 provided by (used for) operating activities: (221,425) Operating income (loss) $ 2,452,386 Adjustments to reconcile operating income (loss) to net (67,192) cash provided by (used for) operating activities: (882,455) Depreciation expense (35,742) 3,078,135 (Increase) decrease in accounts receivable 5,413 (Increase) decrease in intergovernmental receivables - (86,057) (Increase) decrease in inventories 17,594 (Increase) decrease in prepaid items 5,456 (809) Increase (decrease) in accounts payable 1,011,363 Increase (decrease) in customer deposits payable (17,012) 123,469 Increase (decrease) in compensating absences (5,390) Increase (decrease) in other post employment benefits 3,275 164,730 Increase (decrease) in intergovernmental payable 88,624 Increase (decrease) in other liabilities 3,275 43,722 Increase (decrease) in net pension obligation 57,340 Increase (decrease) in unearned revenues 372,713 - Increase (decrease) in accrued liabilities (68,240) Total adjustments 656,278 4,429,894 Net cash provided by (used for) operating activities $ 6,882 280 Noncash from capital and related financing activities: $ 1,028,991 $ Refunding of debt principal $ - Premium received on refunding $ 95,847 - Bond costs paid on refunding $ - Capital lease to purchase machinery and equipment 368,511 - Capitalized interest 13,809 Loss on disposal of assets (668) (404,829) The notes to the financial statements are an integral part of this statement. (36,644) 25 Govemrrental Enterprise Funds Activities - Internal Golf Aquatic Park Totals Service $ 2,437,741 $ 4,473,209 $ 35,751,156 $ - - - - 16,206,939 84,097 37,168 343,743 321,384 (1,987,628) (1,742,228) (21,088,451) (11,286,013) - (1,784 (6,606,375) (3,358,158) 534,210 983 8,400,073 1 - - - 301,231 - (198,701) (3,746,060) (417,996) (147,760) - (147,760) - (147,760) (198,701) (3,893,820) (116,765) 6,891 - 6,909 111,105 295,000 - 5,660,000 - (221,425) (1,060,027) (2,953,656) (1,050,706) (67,192) (401,299) (882,455) - (35,742) (462,519) (709,287) - - - (44,128) - 5,456 1,000 6,456 38,927 (17,012) (1,922,845) 1,083,839 (900,674) 3,275 6 „027 42,856 10,02E 3,275 6,027 42,856 10,026 372,713 (1,131,936) 5,632,948 876,739 656,278 5,153,676 26,131,280 11,655,536 $ 1,028,991 $ 4,021,740 $ 31,764,228 $ 12,532,275 $ 95,847 $ 235,915 $ 2,784,148 $ 758,416 368,511 759,839 4,206,485 806,717 (668) (41,389) (36,644) 7,091 - - (86,057) - 3,163 (1,506) 19,251 (51,345) (16,301) 1 (15,290) (121,750) 116,051 (3,882) 1,123,532 1,219,323 - - 123,469 - 4,500 (890) 21,424 26 191,073 123,587 - 88,624 - (23,540) 679 20,861 14,670 - 9,170 66,510 42,908 33,353 3,938 37,291 (11,534) (42,206) (11 (122,290) (925,355) 438,363 747,668 5,615,925 1,125,736 $ 534.210 $ 983,583 $ 8400,073 $ 1,884,152 $ - $ 1,015,612 $ 1,015,612 $ - - 68,113 68,113 - (23,909) (23,909) 387,846 - 387,846 930 26,701 41,440 - - (404,829) CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Net Assets FIDUCIARY FUNDS September 30, 2012 The notes to the financial statements are an integral part of this statement. Kze OPEB Trust ASSETS Investments, at fair value Mutual funds $ 794,386 Total assets 794,386 NET ASSETS Held in trust for other post employment benefits 794,386 Total net assets $ 794,386 The notes to the financial statements are an integral part of this statement. Kze CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Revenues, Expenses, and Changes in Net Assets FIDUCIARY FUNDS For the Year Ended September 30, 2012 The notes to the financial statements are an integral part of this statement. 27 OPEB Trust ADDITIONS Contributions: Employer $ 1,225,966 Investment earnings 105,460 Total additions 1,331,426 DEDUCTIONS Benefit payments 1,125,966 Investment expense 6,489 Total deductions 1,132,455 Change in net assets 198,971 Net assets - beginning 595,415 Net assets - ending $ 794,386 The notes to the financial statements are an integral part of this statement. 27 This page intentionally left blank. 28 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2012 Note II Reconciliation of Government -Wide and Governmental Fund Financial Statements 38 A. Balance sheet reconciliation 38 B. Statement of revenues, expenditures, and changes in fund balance reconciliation 39 Note III Stewardship, Compliance, and Accountability Page Note I Summary of Significant Accounting Policies Deficit fund equity A. Reporting entity 31 B. Government -wide and fund financial statements 32 C. Measurement focus, basis of accounting, and financial statement 41 presentation 32 D. Assets, liabilities, and net assets or fund balance Deposits and investments 34 Receivables and payables 34 Inventories and prepaid items 35 Restricted assets 35 Capital assets 36 Compensated absences 36 Long -term obligations 36 Fund Balance 37 Note II Reconciliation of Government -Wide and Governmental Fund Financial Statements 38 A. Balance sheet reconciliation 38 B. Statement of revenues, expenditures, and changes in fund balance reconciliation 39 Note III Stewardship, Compliance, and Accountability 41 A. Deficit fund equity 41 Note IV Detailed Notes on All Funds 41 A. Deposits and investments 41 Deposits 41 Investments 42 Interest rate risk 43 Custodial credit risk 43 Credit risk 44 OPEB Trust Fund Investments 44 Interest rate risk 44 Custodial credit risk 44 Credit risk 44 B. Receivables 45 Deferred revenue 45 C. Capital assets 46 Construction commitments 48 D. Interfund receivables, payables, and transfers 48 Govemmental 50 Proprietary 50 E. Long -term debt 50 General obligation bonds 50 Certificates of obligation 51 Sales Tax Revenue bonds 52 Loans payable 52 Capital leases 52 Refunding of debt 53 Changes in long -term liabilities 54 Defeased debt outstanding 54 29 Note V Other Information A. Risk management B. Contingent liabilities C. Conduit debt obligations D. Post - employment benefits Deferred Compensation Plan Retiree Healthcare Plan E. Employee retirement systems and pension plans Plan description Contribution F. Subsequent events G. Implementation of GASB Statements 54 54 55 55 56 56 56 58 58 58 60 60 30 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 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. 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. 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 within the zone of TIF #1. In 2008, TIF #1 was expanded to provide funding for intersection improvements and the burial of utility lines to enhance economic revitalization in the area. Tax Increment Financing District #2 ("TIF #2 ") was created to provide funding for public improvements that would benefit the participants in and citizens of TIF #2. Effective fiscal year 2012, these TIIF's meet the criteria for blending as the City Council and TIF Boards are substantially the same. In addition, although other entities are involved in the TIF, the primary financial benefit or burden relationship is between the City and the TIF's, and management of the City has day - today operational responsibility for the activities of the TIF. During fiscal 2012 the City early implemented GASB Statement no. 61: The Financial Reporting Entity. Omnibus — an Amendment of GASB Statements No. 14 and No. 39. This statement added additional guidance and requirements regarding when a component unit should be blended into the City's financial statements. In light of this additional guidance, along with the recent activity of the TIF's in relation to the City, management has now determined that the TIF's clearly meet the criteria for blending. Therefore, as part of the implementation of GASB 61, the TIF's are no longer reflected as discretely presented, but rather as blended component units. Therefore beginning net assets and fund balances of the City, as well as various other components of the City's financial statements, have been restated for a change in reporting entity related to the implementation of a new accounting standard. 31 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 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 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. 32 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 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. 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 Tax Increment Financing District #2 provides funding for public improvements that would benefit the participants in and citizens of TI F #2 as well as others in the Metroplex area. The City reports the following proprietary funds: The Utility Fund (a major 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 (a major 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. 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 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 enterprise or business type activity 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 33 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 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. 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, 2012, 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 Davables 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 34 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 governmental service and debt service for the year ended September 30, 2011 was $.57 per $100 of assessed valuation. Inventories and prepaid items All inventories are valued at cost using the first-in/first-out ( "FIFO ") method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Inventories are offset by a fund balance reserve account in applicable governmental funds to indicate the inventory values are not available for appropriation and are not expendable available financial resources. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. Restricted assets Certain resources set aside for the repayment of outstanding City debt are classified as 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 five 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 Information Services (Internal Service) Fund contains assets used 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 used for building and equipment maintenance and replacement. The building reserve is used to accumulate funds for the implementation of the multi -year plan. Equipment reserve is used to accumulate funds for the replacement of vehicles and heavy equipment. The Self- Insurance (Internal Service) Fund contains assets used 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. 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 35 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 has a very proactive approach to plan for future claims and ensure that funding is available to pay when and if the need occurs. Cat)ital 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 actual cost is unavailable. Donated capital assets are recorded at estimated fair value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Capital assets of the primary government are capitalized at the following thresholds and are depreciated using the straight -line method over the following estimated useful lives: Asset Category Land Buildings and improvements Other improvements Water, sewer system and other infrastructure Start-up costs, furniture and fixtures, and certain machinery and equipment Firetrucks and ambulances Other machinery and equipment including vehicles Capitalization Useful Life Threshold $ 100,000 30 years 100,000 30 years 100,000 33 years 100,000 10 years 5,000 20 years 25,000 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. Lana-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 36 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 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 Fund balances are reported within one of the fund balance categories list below. 1. Nonspendable, such as fund balances associated with inventories, prepaids, long -term loans and notes receivable, and property held for resale (unless the proceeds are restricted, committed, or assigned), 2. Restricted fund balance category includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation, 3. Committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the City's Council (the city's highest level of authority), 4. Assigned fund balance classification are intended to be identified and authorized for specific purposes by the City's authorized representative by the Council (City Manager) and for other purposes that cannot be classified as restricted or committed, 5. Unassigned fund balance is the residual classification for the government's general fund and includes all spendable amounts not contained in the other classifications. Committed Fund Balance Policy Fund balances are committed by the City Council under specific resolutions or ordinances which were adopted to restrict the utilization of special revenue sources. Fund balance reporting as a result of resolutions and ordinances passed by City Council: • General Donations or contributions to the City that do not have specific goals designated by the donor are committed by council resolution to keep the original general intent for which they were received. • Drainage Utility Fees are to be utilized for the infrastructure or debt service for such infrastructure. • Gas Development funds are to be used for specific projects for various reasons such as deemed necessary by city management. Management has committed these funds for Davis Boulevard Property acquisition ($3.2 million). Assigned Fund Balance Policy The City's Assigned Fund Balance is under the direction of the City Manager, (as authorized by the City Council). • Savings incentive program represent funds assigned to encourage departments to identify and implement cost savings measures whereby savings would be accumulated for authorized use at a later date, • Retirement stabilization are funds for anticipated future increases in TMRS funding requirements, • Rail Station Project is intended to support future infrastructure for alternative transportation methods for citizens, • Utility Billing Assistance is from a TXU Settlement to be used to help water and sewer customers who are able to prove need of assistance in paying their utility bill, 37 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 Municipal Facilities are funds for anticipated future construction or debt service needs of the 2012 Bond election building construction project, Capital projects are proceeds assigned by management through budget appropriations to fund special capital projects not funded through bond proceeds, The assignments for general government, public safety, culture and recreation, and public works are encumbrances outstanding at year end. Order of Fund Balance Spending Policy The City's policy is to apply an expenditure to amounts available in multiple fund balance classifications, the order in which resources will be expended is as follows: restricted fund balance, followed by committed fund balance, assigned fund balance, and lastly, unassigned fund balance. Minimum Fund Balance At the end of each fiscal year, the General Fund should maintain a minimum unassigned fund balance that is no less than 15% of the subsequent year's General Fund Appropriated Expenditure budget. This target amount has been established in order to provide a reasonable level of assurance that the City's day -to -day operations will be able to continue even if circumstances occur where revenues are insufficient to cover expenditures. 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 $236,262,987 difference are as follows: Capital assets, net of depreciation (internal service funds excluded) $ 231,617,103 Construction in progress 4,645,884 Net adjustment to increase fund balance - total governmental funds to arrive at net assets - governmental activities $ 236,262,987 Another element of that reconciliation explains that "certain receivables are not available to pay current - period expenditures and, therefore, are deferred in the funds." The details of the $1,660,417 difference are as follows: Interest eamed but not available within 60 days for Govt. Activities $ 28,697 Deferred revenue (unearned portion) 1,631,720 Net adjustment to increase fund balance - total governmental funds to arrive at net assets - governmental activities $ 1,660,417 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 $10,692,515 difference are as follows: 38 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 Net assets, internal service funds combined $ 14,127,333 Amount allocated to business -type activities (3,596,767) Net adjustment to increase fund balance - total governmental funds to arrive at net assets - governmental activities $ 10,530,566 The last element of that reconciliation explains that "long -term liabilities (excluding internal service funds), including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds." The details of the $(110,493,924) difference are as follows: Bonds payable - short-term $ (7,994,136) Bonds payable - long -term (91,159,549) Loans payable - short-term (415,082) Loans payable - long -term (425,343) Accrued interest payable (382,042) Bond issuance costs 976,011 Compensated absences (2,788,357) Other post employment benefits obligation (4,750,939) Net pension obligation (3,554,487) Net adjustment to reduce fund balance - total governmental funds to arrive at net assets - govemmental activities $ (110,493,924) L 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 $9,288,350 difference are as follows: Capital outlay - assets acquisitions $ 16,133,185 Depreciation expense (6,844,835) Net adjustment to decrease net changes in fund balances - total governmental funds to anive at changes in net assets of governmental activities $ 9,288,350 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 $(170,654) difference are as follows: Asset retirements and impairments $ (615,367) Contribution of Capital Assets from outside organziations 444,713 Net adjustment to decrease net changes in fund balances - total governmental funds to anive at changes in net assets of govemmental activities $ (170,654) 39 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 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 $ {955,424} difference are as follows: Investment income not available for current financial resources $ (138,841) Deferred revenue that is earned but not received (818,583) Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ (955,424) 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 $(1,721,190) difference are as follows: (Excludes Internal Service Funds) Changes in Accrued interest/interest expense $ 7,750 Other post employment benefits (1,311,497) Net pension obligation (458,828) Compensated absences 39,185 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets 3,955,000 of governmental activities $ (1,721,190) 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 $(18,179,724) difference are as follows: (Excludes Internal Service Funds) Debt issued or incurred: General obligation bonds $ (25,830,000) Refunding of bonds (3,899,388) Capital lease (394,251) Principal repayments: General obligation bonds 3,955,000 General Obligation bonds - refunding 3,770,000 Certificates of obligation bonds 2,925,000 Sales tax revenue bonds 1,030,000 Loan repayments 399,547 Capital lease repayments 394,251 Premium on bond sale (548,184) Bond costs on current year issuance 240,153 Deferred gain on bond refunding (193,433) Current year amortization of bond costs, premium, discount, gain and loss (230,439) Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ (18,179,724) 40 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 Another element of that reconciliation states that "the net revenue (expense) of internal service funds is reported with governmental activities." The details of the $614,645 difference are as follows: Change in net assets - internal service funds combined $ 814,126 Income (Expenses) reflected in business -type activities (361,430) Net adjustment to decrease net changes in fund balances total governmental funds to arrive at changes in net assets of governmental activities $ 452,696 Ill. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A. Deficit fund equity The ARRA Grant Funds had a deficit fund balance of $27,245 as of September 30, 2012. 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 available and therefore deferred. This negative fund balances will be eliminated upon receipt of receivable and recognizing of revenues from deferred status. IV. DETAILED NOTES ON ALL FUNDS A. Deposits and investments Deposits - The City maintains an entity wide 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 "Cash and Cash Equivalents ". 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, 2012 the carrying amount of the City's demand deposits and cash on hand were $9,594,585. 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, 2012, the City's investment pool portfolio (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. 41 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 The City's investment pool held the following cash, cash equivalents, and investments as of September 30, 2012: Total Cash on hand (petty cash, cashier tills) $ 16,060 Demand Deposit Accounts 9,194,414 Investment Pools 68,824,790 Certificates of Deposit 400,000 US Treasury Notes 32,395,779 U.S. Agencies 27,755,237 Total deposits and investments $ 138,586,281 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, 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, 2012, the City did not own any types of securities other than those permitted by statute. On August 5, 2011 Standard and Poors, one of three nationally recognized raters of US debt and securities, downgraded the rating of long -term US and government sponsored entities sovereign debt from AAA to AA+ for the first time since 1941 with a negative outlook. The two other national raters, Moody's and Fitch, continue to have the highest ratings, but also have the debt on their watch lists. The pools in which the City is currently participating seek to maintain a stable $1 net asset value per share or unit. Accordingly, the fair value of the City's position in these pools is substantially the same as the market value of the shares in each of the pools. TexPool falls under the purview of the Texas Comptroller of Public Accounts ( "Comptroller ") who is responsible for oversight of TexPool operations. LOGIC and TexSTAR have established a goveming 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 pools 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. 06 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 The table below states investments at fair value: Rating Investment Type WAM Rating Agency Total Investment pools: TexPool 44 AAAm S &P $ 53,598,479 LOGIC 46 AAAm S &P 102% 12,847,254 TexSTAR 40 AAAm S &P 103% 2,379,057 Total pools $ 68,824,790 Certificates of Deposit: 5 NR NR 400,000 Total certificates of deposit $ 400,000 U.S. Treasuries 280 A4+ S &P 32,395,779 Total U.S. Treasuries $ 32,395,779 U.S. Agencies and Government Sponsored Entities: FHLB 46 AA+ S &P $ 7,035,556 FHLMC 87 AA+ S &P 11,631,126 FNMA 122 AA+ S &P 9,088,555 Total U.S. Agencies & Government Sponsored Entities $ 27,755,237 Total Portfolio $ 129,375,806 NR - not rated Interest Rafe 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 Iaddering structure to stagger investment maturities at various monthly rungs on the ladder. This Iaddering 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. Custodial Credit Risk — Custodial credit risk is the risk that a government will not be able to recover (a) deposits if the depository financial institution fails or (b) the value of investment or collateral securities that are in the possession of an outside party if the counterparty to the investment or deposit transaction fails. To minimize such risk, the City requires collateralization of most deposits in excess of coverage, utilizes the delivery vs. payment method for investment purchases, and contracts with 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. The percentages as shown reflect the requirement based on market value of the pledged securities. 43 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. 43 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 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. 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, 2012 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 $794,386 as of September 30, 2012. The Trust's funds are invested in a mutual fund 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. The credit rating and weighted average maturity is not available for the pool. Interest Rafe Risk— Interest rate risk is the potential for a decline in market value due to rising interest rates. In accordance with its formally- adapted investment policy, the Trust committee has chosen to use moderate risk levels. Exposure to market fluctuations can occur, and the investment strategy is reviewed annually to insure that exposure to these market fluctuations is appropriate level to invest. 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 parry if the counterparty to the investment or deposit transaction fails. The Trust is not covered by any collaterization agreement or FDIC insurance. Credit Risk — The Credit Risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The risk tolerance chosen by the Trust is moderate. The mutual fund investment is not rated. Investment Type Total Mutual Funds: Highmark Moderate $ 794,386 Total mutual funds $ 794,386 Total Portfolio $ 794,386 NR - not rated EV CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 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: Proprietary Funds: Utility Accounts $ 4,934,948 Total $ 4,934,948 Allowance (169, 500) Total (not of allowance) $ 4,765,448 Deferred Revenue Parks and Recreation Development Tax Increment Finance District #2 it - - 381,738 720,207 - $ 720,207 $ 381,738 - (337,209) $ 720,207 $ 44,529 General Accounts $ 3,057,484 Property taxes 623,293 Othertaxes 1,792,041 Total $ 5,472,818 Allowance (3,086,525) Total (net of allowance) $ 2,386,293 Proprietary Funds: Utility Accounts $ 4,934,948 Total $ 4,934,948 Allowance (169, 500) Total (not of allowance) $ 4,765,448 Deferred Revenue Parks and Recreation Development Tax Increment Finance District #2 it - - 381,738 720,207 - $ 720,207 $ 381,738 - (337,209) $ 720,207 $ 44,529 Non -major $ 102,103 782,909 $ 885,012 (2,346) $ 882,666 Total $ 3,159, 587 1,005,031 3,295,157 $ 7,459,775 (3,426,080) $ 4,033,695 Aquatic Golf Park $ 30,646 $ 92,705 $ 30,646 $ 92,705 (15,019) - $ 15,627 $ 92,705 Non -major $ 102,103 782,909 $ 885,012 (2,346) $ 882,666 Total $ 3,159, 587 1,005,031 3,295,157 $ 7,459,775 (3,426,080) $ 4,033,695 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: Internal Total Service $ 5,058,299 $ 13,575 $ 5,058,299 $ 13,575 (184,519) - $ 4,873,780 $ 13,575 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: rk, Total Deferred Unavailable Unearned Revenue Delinquent property taxes receivable (General Fund) $ 151,251 $ - $ 151,251 Ambulance (General Fund) 220,293 - 220,293 Escrow Deposits (General Fund) - 18,625 18,625 LEOSE Public Safety proceeds (General Fund) - 28,811 28,811 Forfeitures proceeds (Special Investigations Fund) - 5,035 5,035 Deferred Revenue (Park and Recreation Fund) - 32,073 32,073 Grant proceeds (Grant Fund) 43,889 - 43,889 Grant proceeds (General Capital Projects) 1,008,539 - 1,008,539 Special Assessments (General Capital Projects) 207,748 - 207,748 Total deferredlunearned revenue for governmental funds $ 1,631,720 $ 84,544 $ 1,716,264 rk, CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 Reconciliation of unearned revenues to the Government -wide Statement of Net Assets is as follows: Governmental activities for unearned revenue is: Unearned Governmental funds $ 84,544 Total uneamed revenue $ 84,544 Business -type activities for unearned revenue is: Unearned Deposits, Check and Gift Certificates $ 102,978 Store Credit 6,530 Total deferredluneamed revenue for business funds $ 109,508 C. Capital assets Capital asset activity for the year ended September 30, 2012 was as follows: Primary Government Governmental activities: Capital assets, nondepreciable Land Works of art Construction in progress Total nondepreciable Capital assets, depreciable: Buildings Other improvements Machineryand equipment Total depreciable Less accumulated depreciation for: Buildings Other improvements Machineryand equipment Total accumulated depreciation Beginning 24,077,339 Balance, restated (1) Increases $ 76,688,297 $ 942,571 $ 298,209 - 35,894,353 38,031,821 112,880,859 38,974,392 39,323,691 24,077,339 160,689,487 21,984,442 23,125,281 1,902,436 223,138,459 47,964,217 (17,094,532) (2,130,629) (73,163,441) (4,712,801) (15,256,595) (1,432,878) (105,514,568) (8,276,308) Ending Decreases Balance - $ 77,630,868 1 298,208 69,236,765 4,689,409 69,236,766 82,618,485 - 63,401,030 - 182,673,929 910,238 24,117,479 910,238 270,192,438 - (19,225,161) - (77,876,242) (852,567) (15,836,906) (852,567) (112,938,309) Total depreciable - net 117,623 39,687,909 57,671 157,254,129 Governmental activities net $ 230,504,750 $ 78,662,301 $ 69,294,437 $ 239,872,614 (1) Beginning amounts have been restated in conjunction with the implementation of a new accounting standard, GASB Statement NCI. 61 (see footnote IA.) 46 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 Primary Government Beginning Business -type activities: Balance Increases Capital assets, nondepreciable Land Construction in progress Total nondepreciable Capital assets, depreciable Ending Decreases Balance $ 2,579,137 $ - $ - $ 2,579,137 1,033,303 2,674,122 3,189,301 518,124 3,612,440 2,674,122 3,189,301 3,097,261 Buildings 3,757,904 647,146 - 4,405,050 Utility Plant 98,295,308 1,744,131 594,032 99,445,407 Other improvements 24,283,165 351,832 - 24,634,997 Machineryand equipment 3,900,868 1,101,282 125,996 4,876,154 Total depreciable 130,237,245 3,844,391 720,028 133,361,608 Less accumulated depreciation for: Buildings (1,958,035) (137,800) - (2,095,835) Utility Plant (44,147,564) (2,911,977) (189,010) (46,870,531) Other improvements (9,646,163) (821,214) - (10,467,377) Machinery and equipment (2,532,092) (357,242) (124,997) (2,764,337) Total accumulated depreciation (58,283,854) (4,228,233) (314,007) (62,198,080) Total depreciable - net 71,953,391 (383,842) 406,021 71,163,528 Business -type activities - net $ 75,565,831 $ 2,290,280 $ 3,595,322 $ 74,260,789 Depreciation expense was charged to functions /programs of the primary government as follows: Governmental activities: General government $ 360,641 Public safety 711,818 Culture and recreation 2,257,459 Public works 4,139,673 Internal services 806,717 Total depreciation expense - govemmental activities $ 8,276,308 Business -type activities: Water and sewer $ 3,078,135 Golf course 368,511 Aquatic park 781,587 Total depreciation expense - business -type activities $ 4,228,233 47 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 Construction commitments The City has active construction projects as of September 30, 2012. 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 2012 Committed Streets, drainage, public safety, park improvements, municipal facilities, equipment, and utility improvements $ 134,126,739 $ 61,189,604 $72,937,135 D. Interfund receivables, payables, and transfers At September 30, 2012, 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 loans were $886,564 (which is an interest free loan) and is scheduled for repayment in 2017. The original Utility Fund loan was $536,000. The current estimated pay -off is fiscal year 2017. The General Fund provided temporary cash to the Grant Fund and ARRA Grant Fund for a reimbursable grant activity totaling $739,156. 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 Grant Fund $ 150,000 ARRA Grant Fund 589,156 Golf Fund 147,760 Total $ 886,916 Business -type activities: Due to Due from Total Water and Sewer Fund Golf Fund 34,208 Total $ 34,208 Total for all funds $ 921,124 48 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 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. 2012 advances to other funds ending balances were as follows: Governmental activities: Advances to Advances from Total General Fund Golf fund $ 589,044 Total $ 589,{)44 Business -type activities: Advances to Advances from Total Water and Sewer Fund Golf Fund $ 169,863 Total 169,863 Total for all funds $ 758,907 Transfers In/Out amounts for Governmental and Proprietary Funds are as follows: Transfer in: 49 General Parks and Internal General Capital General Recreation Other Service Fund Projects Debt Service Development Governmental Funds Total Transfer out: Governmental: General Fund $ - $ 875,000 $ - $ 487,102 $ - $ 76,231 $1,438,333 General Capital Projects 188,114 - - - 188,114 Parks and Recreation Development Fund 350,126 - 357,130 - 1,216,661 1,923,917 Other Governmental - - 1,292.415 - - - 1,292,415 Subtotal governmental funds $ 538,240 $ 875,000 $1,649,545 $ 487,102 $ 1,216,661 $ 76,231 $ 4,842,779 Proprietary. Utility Fund $ 3,322,359 $ - $ - $ - $ - $ 225,000 $ 3,547,359 Aquatic Park 130,560 - - 68,141 - - 198,701 Subtotal enterprise funds 3,452,919 - - 68,141 - 225,000 3,746,060 Internal Service Funds - - 417,996 - - - 417,996 Grand total $ 3,991,159 $ 875,000 $ 2,067,541 $ 555,243 $ 1,216,661 $ 301,231 $ 9,006,835 49 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 Governmental In 2012, General Fund received $1,516,667 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 $2,067,541 and were transferred in from Gas Development Fund, Drainage Utility Fund, Parks and Recreation Development Fund, Facilities and Construction, and Fleet Services Fund. Another set of transfers went toward the construction or acquisition of capital for general government $875,000. Parks and Recreation Development Fund received $487,102 from General Fund. This amount represents prior budget level before new recreation facility became operational. This transfer is to maintain General Fund's support before new facility. Non -major Governmental funds had transfers totaling $1,216,661. The significant transfer includes the annual support from Parks and Recreation Development Corporation Fund to Parks Sales Tax Revenue Bond Debt Service for annual debt service requirements for the revenue bonds. This transfer totaled $1,109,573. Economic Development also received $107,088 from Parks and Recreation Development Corporation. This transfer is state law 4B sales tax proceeds that can be used for economic developments. Provrietary The General Fund transferred to the Internal Services funds a total of $76,231 in 2012. This amount includes transfers to Fleet Service and Information Systems Funds. All transfer amounts of $76,231 signifies a transfer in for additional support for future capital improvements. Additional funds were transferred from the Utility Fund to Fleet Services and Information Systems Funds. These transfers were $50,000 and $175,000 respectively. Both transfers were for additional future project reserves for continuing future improvements to the infrastructure of the services provided by these internal service funds. 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, $25,830,000 in new general obligation bonds was issued. The City issued $24,796,800 bonds for new municipal facilities and $1,033,200 in drainage improvements. Included also was issuance of $4.715 million for refunding of bonds. General obligation bonds are direct obligations and pledge the full faith and credit of the government. These bonds generally are issued as 20 -year serial bonds with equal amounts of principal maturing each year. General obligation bonds currently outstanding are as follows: Purpose Governmental activities Business -type activities Interest Principal Rates Amount 2.00 - 5.50% $ 64,269,388 2.00-4.20% 2,210,612 $ 66, 480, 000 50 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 Annual debt service requirements to maturity for general obligations bonds are as follows: Year Ending Governmental Activities September 30, Principal Interest 2013 $ 5,169,136 $ 2,079,817 2014 5,163,148 1,895,779 2015 5,284,376 1,730,753 2016 4,948,918 1,567,0113 2017 4,512,841 1,410,867 2018 -2022 18,334,205 5,044,779 2023 -20127 12,406,764 2,412,994 20128 -2032 8,450,000 619,843 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 2012, new CO's were issued in the amounts of $5,6601,0010 for business -type activities. Certificate of obligation bonds currently outstanding are as follows: Purpose Governmental activities Business -type activities $ 64,269,388 $ 16,761,846 $ 2,2101,612 $ 307,244 Business -type Activities Principal Interest $ 450,864 $ 72,696 291,852 60,807 325,624 50,313 276,082 39,215 277,159 28,794 515,795 53,955 73,236 1,465 Interest Principal Rates Amount 2.00 - 5.00% $ 33,330,000 2.00-5.00% 16,415,000 $ 49, 745, 000 Annual debt service requirements to maturity for certificates of obligation of the primary government and component units are as follows: Year Ending September 30, 2013 2014 2015 2016 2017 2018 -2022 2023 -2027 2028 -2032 Governmental Activities Principal I Interest $ 2,420, 000 $ $1,166,612 $ 33, 330, 000 $9,431,342 $16,415,000 $4,900,392 Business -type Activities Principal Interest $ 1,115, 000 $ 546,041 1,125, 000 503,394 1,010,000 468,300 1,000,000 436,394 995,000 405,908 4,635,000 1,569,153 4,130,000 815,138 2,405, 000 156,065 51 51 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 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. 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. Sales tax revenue bonds currently outstanding are as follows: Purpose Govemmental activities Interest Principal Rates Amount 2.00 - 4.75% $ 615,000 $ 615,000 Revenue bond debt service requirements to maturity are as follows: Year Ending Governmental Activities September 30, Principal Interest 2013 $ 405,000 $ 15,789 2014 105,000 11,026 2015 105,000 5,513 $ 615,000 $ 32,328 Loans oavable Governmental activities acquired a loan to pay for certain land acquisition for the new recreation center erection in 2012. 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 %. The loan payable debt service requirements to maturity are as follows: Year Ending Governmental Activities September 30, Principal Interest 2013 $ 415,082 $ 24,761 2014 402,379 8,700 2015 22,965 486 $ 840,426 $ 33,947 Capital Leases Golf Fund entered into a lease agreement as lessee for the financing the acquisition of golf cart equipment valued at $387,845. The equipment has a 4 year estimated useful life. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of future minimum lease payments as of the inception date. 52 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 The future minimum lease obligations and the net present value of these minimum lease payments were as follows: Year Ending Business -type September 30, Activities 2013 $ 81,799 2014 81,799 2015 81,799 2016 81,799 2017 92,400 Total Minimum Lease Payments 419,597 Less: Amount representing interest (31 ,751) $ 387,846 Refunding of Debt On January 11, 2012, the City issued $4.715 million in General Obligation Bonds with an average interest rate of 3.758 percent to partial refund $4.805 million of outstanding 2002 and 2003 General Obligation and Certificate of Obligations with an average interest rate of 4.738 percent. The net proceeds of $5,034,454 million (after payment of $117,167 in underwriting fees, insurance, and other issuance costs) plus an additional $117,167 of debt service fund monies were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the bonds. As a result, the bonds are considered to be defeased and the liability for those bonds has been removed from the government -wide statement of net assets. The refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $246,537. This difference, reported in the accompanying financial statements as an increase from deferred gain on refunding, is being charged to operations through the year 2023. The City completed the refunding to reduce its total debt service payments over the next 10 years of $785,000 to obtain an economic gain (difference between the present values of the old and new debt service payments) of $227,682. This section of this page is intentionally left blank. Notes are continued on the next page. 53 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 Changes in Iona -term liabilities Long -term liability activity for the year ended September 30, 2012, is reflected in the following tables. Governmental Activities: Bonds Payable General Obligation Bonds Certificates of Obligation Sales Tax Revenue Bonds Loans Payable Capital Lease Deferred Loss on Refunding Deferred Gain on Refunding Premium on Bond Issues Discount on Bond Issues Compensated Absences Total Governmental Activities Beginning Balance, Due Within restated (1) Additions Reductions Fording Balance One Year $ 41,300,000 $ 29,529,388 $ 6,560,000 $ 64,269,388 $ 5,169,136 37,420,000 - 4,090,000 33,330,000 2,420,000 1,645,000 - 1,030,000 615,000 405,000 1,241,671 - 401,245 840,426 415,082 - 394,251 394,251 - - (470,537) - (139,736) (330,801 ) - - 193,433 (63,515) 256,948 - 514,039 546,164 25,251 1,034,952 - (14,283) - 7,520 (21,803) - 3,076,980 416,595 434,356 3,059,219 183,114 $ 84,712,870 $ 31,079,831 $12,739,372 $ 103,053,329 $ 8,592,332. (1) Beginning amounts have been restated in conjunction with the implementation of a newaccounting standard, GASB Statement standard, GASB Statement NO. 61 (see footnote 1.A.) Business -Type Activities: Bonds Payable General Obligation Bonds $ 1,405,000 $ 1,015,612 $ 210,000 $ 2,210,612 $ 450,864 Certificates of Obligation 12,607,445 5,660,000 1,852,445 16,415,000 1,115,000 Capital Lease - 387,846 - 387,846 70,419 Deferred Loss on Refunding (32,480) - (6,633) (25,847) - Deferred Gain on Refunding - 53,104 3,621 49,483 - Premium on Bond Issues 29,136 82,513 (64,981) 176,630 - Discount on Bond Issues (2,481) - 39,228 (41,709) - Compensated Absences 446,458 51,507 39,493 458,472 31,761 Total Business -Type Activities $14,453,078 $ 7,250,582 $ 2,073,173 $ 19,630,487 $1,668,044 Defeased Debt Outstandina 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. $175 thousand of bonds outstanding are considered defeased. 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 IM CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 participating funds and are available to pay claims, claim reserves, and administrative costs of the program. As of September 30, 2012, the interfund premiums did not exceed expenses. Liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for health and dental as well as workers' compensation claims that have been incurred but not reported ( "IBNR "). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of inflation, recent claim settlement trends (including frequency and amount of pay- outs), and other economic and social factors. An excess coverage medical insurance policy covers individual claims in excess of $175,000 and/or $4,994,679 in the aggregate for a 12- month period beginning on January 1, 2012. Changes in the balances of claims liabilities during the past two years are as follows: 2012 2011 Unpaid claims, beginning of year $ 866,542 $ 1,041,149 Incurred claims (including IBNR) 7,022,699 6,283,789 Claim expense (6,852,517) (6,458,396) Unpaid claims, end of year $ 1,036,724 $ 866,542 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. ti« Conduit debt obligations The City has issued Health Facilities Development Bonds to provide financial assistance to private - sector entities to promote and develop new, expanded or improved health facilities to assist the maintenance of public health and welfare. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Ownership of the acquired facilities is with the private - sector entity served by the bond issuance. The City is not obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of September 30, 2012, 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. 55 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 As of September 30, 2012, 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 CASB 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 88 full retirement, 22 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. For fiscal year 2012, the City contributed a total of $1,225,966 to the plan for current premiums. Of the $1,225,966, $100,000 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 required contribution (ARC), an amount actuarially determined in accordance with the parameters of CASB 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: 56 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2012: 2010 2011 2012 Annual required contribution $ 2,419,000 $ 2,587,136 $ 2,712,747 Interest on net OPEB obligation 64,000 106,681 190,604 Adjustment to annual required contribution (51,000) (84,640) (151,228) Annual OPEB cost (expense) 2,432,000 2,609,177 2,752,123 Contributions made (1,477,340) (744,182) (1,125,966) Increase (Decrease) in net OPEB obligation 954,660 1,864,995 1,626,157 Net OPEB obligation- beginning of year 1,416,000 2,370,660 4,235,655 Net OPEB obligation -end of year $ 2,370,660 $ 4,235,655 $ 5,861,812 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2012: Funded Status and Funding Progress. As of September 30, 2012, the most recent actuarial valuation date, the plan was 2% percent funded. The actuarial accrued liability for benefits was $44,173,440, and the actuarial value of assets was $779,748, resulting in an unfunded actuarial accrued liability (UAAL) of $43,393,624. The covered payroll (annual payroll of active employees covered by the plan) was $31,735,386 and the ratio of the UAAL to the covered payroll was 136.7 %. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long -term perspective of the calculations. 57 Percentage Fiscal Annual of Annual Year OPEB OPEB Cost Net OPEB Ended Cost Contributed Obligation 9130/2010 $ 2,432,000 60.75% $ 2,370,660 9/3012011 2,609,177 28.52% 4,235,655 9130/2012 2,752,123 40.91% 5,861,812 Funded Status and Funding Progress. As of September 30, 2012, the most recent actuarial valuation date, the plan was 2% percent funded. The actuarial accrued liability for benefits was $44,173,440, and the actuarial value of assets was $779,748, resulting in an unfunded actuarial accrued liability (UAAL) of $43,393,624. The covered payroll (annual payroll of active employees covered by the plan) was $31,735,386 and the ratio of the UAAL to the covered payroll was 136.7 %. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long -term perspective of the calculations. 57 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 In the September 30, 2011, 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% initially, reduced by decrements to an ultimate rate of 4.5 % after ten years. The UAAL is being amortized as a level percentage of projected payroll on a closed basis. Each component of the calculation is being amortized over a thirty year period since inception. 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 842 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 17.26 %, both as adopted by the City Council. Under the state law governing TMRS, the actuary annually determines the City contribution rate. The rate consists of the normal cost contribution rate and the prior service contribution rate, both of which are calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the currently accruing monetary credits due to the City matching percent, which are the obligation of the City as of an employee's retirement date, not at the time the employee's contributions are made. The normal cost contribution rate is the actuarially determined percent of payroll necessary to satisfy the obligation of the City to each employee at the time his retirement becomes effective. The prior service contribution rate amortizes the unfunded actuarial liability over the remainder of the plan's 30 -year amortization period. Contributions are made monthly by both the employees and the City. The actuarial valuation is performed annually to determine the City's required contribution percentage. Since the City needs to know its contribution rate in advance for budgetary purposes, there is a one year delay between the actuarial valuation that is the basis for the rate and the calendar year when the 58 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 rate goes into effect (i.e. December 31, 2006 is effective for rates beginning January 2008). Effective for the valuation dated December 31, 2010, 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 1213112009 12/31/2010 12/31/2011 Actuarial Cost Method Projected Unit Credit Projected Unit Credit Projected Unit Credit Amortization Method Level Percent of Level Percent of Level Percent of Payroll Payroll Payroll GASB 25 Equivalent Single 28.1 years: 27.2 years: 26.3 years: Amortization Period closed period closed period closed period Amortization Period for new 30 years 30 years 30 years Gains /Losses Asset Valuation Method 10 year Smoothed 10 year Smoothed 10 year Smoothed Market Market Market Actuarial Assumptions: Investment Rate of Return ' 7.5% 7.0% 7.0 %Q Projected Salary Increases ' Varies by Varies by Varies by age and service age and service age and service " Includes Inflation at 3.0 % 3.0 % 3.0 %® Cost -of- Living Adjustments 2.1% 2.1% 2.1 % The TMRS Board of Trustees, in an effort to assist cities with increases greater than .5 %n 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 2012 valuation resulted in an unfunded actuarial accrued liability ( "UAAL") of $30,827,568, which represents an increase over an actuarial value of assets of $133,721,663 and in actuarial /accrued liability of $164,549,231. The funded ratio of the City's plan increased from 69.5% to 81.3 % as a result of the decreased UAAL. 59 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 The City's contributions to the plan were $4,934,866, $4,958,007, and $4,491,126, for the years ended September 30, 2012, 2011, and 2010, respectively, in accordance with actuarially determined requirements. Contributions by the City were 17.77% (phase in rate) for the months in calendar year 2012 and 17.26% for the months in calendar year 2011. The total covered payroll in fiscal 2012 was $29,986,516. The following tables shows the components of the City's annual net pension obligation costs for the year, the amount actually contributed to the plan, and changes in the City's net pension obligation: Annual pension cost and percentage of pension cost contributed are as follows: 2012 2011 2010 Annual required contribution $ 5,463,543 $ 6,054,626 $ 5,895,498 Interest on net pension obligation 266,160 200,330 93,696 Adjustment to net pension obligation (228,790) (165,750) (76,283) Annual PENSION cost (expense) 5,500,912 6,089,206 5,912,911 Contributions made (4,934,866) (4,958,007) (4,491,126) Increase (Decrease) in net pension obligation 566,046 1,131,199 1,421,785 Net pension obligation- beginning of year 3,802,265 2,671,066 1,249,281 Net pension obligation -end of year $ 4,368,311 $ 3,802,265 $ 2,671,066 Annual pension cost and percentage of pension cost contributed are as follows: F. Subsequent events On October 3, 2012, the City issued $9,845,000 in general obligation bonds. These bonds were approved in the 2012 Bond Election to fund construction of a new municipal facility. The average interest rate on the bonds is 2.94 percent and matures in February 2033. G. Implementation of future GASB Statements The Governmental Accounting Standards Board ( "GASB ") has issued the following new statements to be implemented in future years. GASB 60. Accounting and Financial Reporting for Service Concession Arrangements Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements, which is effective for the District beginning in fiscal year 2013. This Statement addresses how to account for and report service concession arrangements (SCRs) by establishing recognition, measurement, and disclosure requirements for SCAB for both transferors and governmental operators. 60 Percentage Fiscal Annual of Annual Year Pension Pension Cost Net Pension Ended Cost Contributed Obligation 9/3012012 $ 5,500,912 90% $ 4,368,311 9/3012011 6,089,206 82% 3,802,265 913012010 5,912,911 76% 2,671,066 F. Subsequent events On October 3, 2012, the City issued $9,845,000 in general obligation bonds. These bonds were approved in the 2012 Bond Election to fund construction of a new municipal facility. The average interest rate on the bonds is 2.94 percent and matures in February 2033. G. Implementation of future GASB Statements The Governmental Accounting Standards Board ( "GASB ") has issued the following new statements to be implemented in future years. GASB 60. Accounting and Financial Reporting for Service Concession Arrangements Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements, which is effective for the District beginning in fiscal year 2013. This Statement addresses how to account for and report service concession arrangements (SCRs) by establishing recognition, measurement, and disclosure requirements for SCAB for both transferors and governmental operators. 60 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 GASB 62: Codification of Accounting and Financial Reporting Guidance Contained in Pre - November 30, 1989 FASB and AICPA Pronouncements Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre - November 30, 1989 FASB and AICPA Pronouncements was issued in December 2010. The objective of this Statement is to incorporate into the GASB's authoritative literature certain accounting and financial reporting guidance that is included in the following pronouncements issued on or before November 30, 1989, which does not conflict with or contradict GASB pronouncements: • Financial Accounting Standards Board (FASB) Statements and Interpretations • Accounting Principles Board Opinions • Accounting Research Bulletins of the American Institute of Certified Public Accountants' (AICPA) Committee on Accounting Procedure. Hereinafter, these pronouncements collectively are referred to as the "FASB and AICPA pronouncements. "This Statement also supersedes Statement No_ 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting, thereby eliminating the election provided in paragraph 7 of that Statement for enterprise funds and business -type activities to apply post- November 30, 1989 FASB Statements and Interpretations that do not conflict with or contradict GASB pronouncements. However, those entities can continue to apply, as other accounting literature, post - November 30, 1989 FASB pronouncements that do not conflict with or contradict GASB pronouncements, including this Statement. This Statement is effective for the City's financial periods beginning October 1, 2012. Statement No. 63: Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, is effective for the District for the year ending June 30, 2013. The standard will standardize the presentation of deferred outflows of resources and deferred inflows of resources and their effects on a government's net position, rather than net assets. Statement No. 65: Items Previously reported as Assets and Liabilities GASB Statement No. 65: Items Previously Reported as Assets and Liabilities - GASB 65 was issued in March 2012 and establishes accounting and financial reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes, as outflows of resources of inflows of resources, certain items that were previously reported as assets and liabilities. This standard becomes effective for the District in fiscal year 2014. Statement No. 66: Technical Corrections - 2012 - an Amendment of GASB Statements No. 10 and No. 62 GASB Statement No. 66: Technical Corrections - 2012 - an Amendment of GASB Statements No. 10 and No. 62- GASB 66 was issued in March 2012 and amends Statement No. 10, Accounting and Financial Report for Risk Financing and Related Insurance Issues, by removing the provision that limits fund -based reporting of a state and local government's risk financing activities to the general fund and the internal service fund type.GASB 66 also modifies the specific guidance on accounting for (1) operating lease payments that vary from a straight -line basis, (2) the difference between the initial investment (purchase price) and the principal amount of a purchased loan or group of loans, and (3) servicing fees related to mortgage loans that are sold when the stated service fee rate differs significantly from a current (normal) servicing fee rate. This standard becomes effective for the District in fiscal year 2014. 61 CITY OF NORTH RICHLAND WILLS Notes to Basic Financial Statements September 30, 2012 Statement No. 67: Financial Reporting for Pension Plans GASB Statement 67: Financial Reporting for Pension Plans, was issued in June 2012. This Statement replaces the requirements of Statements No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans, and No. 50, Pension Disclosures, as they relate to pension plans that are administered through trusts or equivalent arrangements that meet certain criteria. Most significantly, this statement requires the net pension liability to be measured as the total pension liability, less the amount of the pension plan's fiduciary net position. Actuarial valuations of the total pension liability are required to be performed at least every two years, with more frequent valuations encouraged. This standard becomes effective for the District in fiscal year 2014. Statement No. 68: Accounting and Financial Reporting for Pensions GASB Statement No. 68: Accounting and Financial Reporting for Pensions was also issued in June 2012. This statement establishes accounting and financial reporting requirements related to pensions for governments whose employees are provided with pensions through pension plans, as well as for non - employer governments that have a legal obligation to contribute to those plans. This statement requires the recognition of the entire net pension liability and a more comprehensive measure of pension expense, along with additional required footnote disclosures. This standard becomes effective for the District in fiscal year 2015. The District has not evaluated the impact of these statements. Statement No. 69: Government Combinations and Disposals of Governmental Operations GASB Statement No. 69: Government Combinations and Disposals of Government Operations was issued in January 2013. The objective of this Statement is to improve accounting and financial reporting for U.S. state and local governments' combinations and disposals of government operations. Government combinations include mergers, acquisitions, and transfers of operations. A disposal of government operations can occur through a transfer to another government or a sale. The new standard provides guidance for: • Determining whether a specific government combination is a government merger, a government acquisition, or a transfer of operations; • Using carrying values (generally, the amounts recognized in the pre - combination financial statements of the combining governments or operations) to measure the assets, deferred outflows of resources, liabilities, and deferred inflows of resources combined in a government merger or transfer of operations; • Measuring acquired assets, deferred outflows of resources, liabilities, and deferred inflows of resources based upon their acquisition values in a government acquisition; and • Reporting the disposal of government operations that have been transferred or sold. This Statement is effective for the City's financial periods beginning October 1, 2014. The City has not yet determined the effect on the City's financial statement or disclosures upon implementation of these new accounting standards. 62 REQUIRED SUPPLEMENTARY INFORMATION 63 This page intentionally left blank. 64 CITY OF NORTH RICHLAND HILLS, TEXAS Required Supplementary Information Texas Municipal Retirement System Plan Schedule of Funding Progress Note: The Schedule of Funding 'Progress summarizes the actuarial value of the plan's assets and actuarial accrued liability as of December 31, 2010 and each of the seven 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, 2010, the plan's funded ratio increased from 69.5% to 81:3 %_ 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, 2010, the plan's ratio of the UAAL to its covered payroll decreased from 129.85% to 102.80 %. In June, 2011, SB 35D was enacted by the Texas Legislature, resulting in a restructure of the TMRS Funds. This legislation provided for the actuarial valuation to be completed, as if restructuring had occurred on December 31, 2010_ In addition, the actuarial assumptions were updated for the new fund structure, based on an actuarial experience study that was adopted by the TMRS board at their May, 2011 meeting (the review compared actual to expected experience for the four -year period of January 1, 2DD6 through December 1, 2009) . For a complete description of the combined impact of the legislation and new actuarial assumptions, including the effects on TMRS city rates and funding ratios, please see the December 31, 2010 TMRS Comprehensive Annual Financial Report (CAFR). City's annual contribution stated as a percentage of covered payroll: For Calendar Year 2012 Unfunded 17.77% 17.26% 16_D7% 15.50% 13.50% 20D7 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 84.7% $ 23,787,759 52.89% 2005 72,129,416 86,165,248 14,035,832 83.7% 24,586,641 57.D9% 2006 75,748,895 90,985,317 15,236,422 83.3% 25,328,096 60.16% 2007 79,089,871 112,285,789 33,195,918 70.4% 24,915,619 133.23% 2008 83,565,864 120,213,148 36,647,284 69.5% 26,422,388 138.70% 2009 87,571,726 126,032,523 38,460,797 69.5% 29,618,737 129.85% 2010 133,721,663 164,549,231 30,827,568 81.3% 29,986,516 102.80% 2011 145,529,766 174,478,790 28,949,024 83.4% 30,884,594 93.73% Note: The Schedule of Funding 'Progress summarizes the actuarial value of the plan's assets and actuarial accrued liability as of December 31, 2010 and each of the seven 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, 2010, the plan's funded ratio increased from 69.5% to 81:3 %_ 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, 2010, the plan's ratio of the UAAL to its covered payroll decreased from 129.85% to 102.80 %. In June, 2011, SB 35D was enacted by the Texas Legislature, resulting in a restructure of the TMRS Funds. This legislation provided for the actuarial valuation to be completed, as if restructuring had occurred on December 31, 2010_ In addition, the actuarial assumptions were updated for the new fund structure, based on an actuarial experience study that was adopted by the TMRS board at their May, 2011 meeting (the review compared actual to expected experience for the four -year period of January 1, 2DD6 through December 1, 2009) . For a complete description of the combined impact of the legislation and new actuarial assumptions, including the effects on TMRS city rates and funding ratios, please see the December 31, 2010 TMRS Comprehensive Annual Financial Report (CAFR). City's annual contribution stated as a percentage of covered payroll: Note Source: TMRS Comprehensive Annual Report for the Year Ending December 31, 2010, Actuarial Section and City records. 65 For Calendar Year 2012 2011 201D 2009 2008 17.77% 17.26% 16_D7% 15.50% 13.50% 20D7 2006 13.63% 13.2D% Note Source: TMRS Comprehensive Annual Report for the Year Ending December 31, 2010, Actuarial Section and City records. 65 CITY OF NORTH RICHLAND HILLS, TEXAS Required Supplementary Information North Richland Hills Other Post Employment Benefits Schedule of Funding Progress Unfunded Valuation Annual UAAL as Actuarial Dated Actuarial Actuarial Accrued September Value of Accrued Liablity 30, Assets Liability (AAL) (UAAL) 2009 $ - $ 37,107,498 $ 37,107,498 2010 $ 518,660 $ 38,868,426 $ 38,349,766 2011 $ 595,415 $ 42,098,543 $ 41,450,154 2012 $ 779,748 $ 44,173,440 $ 43,393,624 66 Annual UAAL as Covered % of Fund Ratio Payroll Payroll 0.00% $ 29,762,000 124.70% 1.00% $ 30,952,000 123.90% 2.00% $ 30,514,794 135.80% 2.00% $ 31,735,386 136.70% 66 CITY OF NORTH RICHLAND HILLS, TEXAS Required Supplementary Information (unaudited) Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget (Nan -GAAP Basis) and Actual GENERALFUND For the Year Ended September 30, 2012 Budgeted Amounts Variance with Final Budget Positive Original Final Actual (Negative) REVENUES Taxes: Property taxes (penalties & interest included) $ 14,429,455 $ 14,542,752 $ 14,409,705 $ (133,047) City sales taxes 8,417,919 8,567,000 8,482,679 (84,321) Mixed beverage taxes 90,000 100,00{1 101,724 1,724 Franchise taxes 4,873,500 4,974,199 5,012,365 42,166 Sub -total Taxes 27,810,874 28,179,951 28,006,473 (173,478) Fines and forfeitures 2,657,750 2,413,461 2,421,696 8,235 Licenses and permits 1,213,675 1,468,774 1,734,744 265,970 Charges for services 2,605,784 2,876,205 3,083,393 207,188 Intergovernmental 2,474,492 3,495,734 3,502,686 6,952 Miscellaneous 842,274 800,091' 669,716 (130,375) Sub -total Nan -Tax Revenues 9,793,975 11,054,265 11,412,235 357,970 Other Appropriations: Golf Course Loans 147,760 147,769 147,760 - Court Technology Funds - 19,235 19,235 Utility Assistance Program 20,000 2{1,00{1 20,000 Previous Year Encumbrances - 469,281 469,281 Sub -Total Appropriations 167,760 656,276 656,276 - TOTAL REVENUES 37,772,609 39,890,492 40,074,984 184,492 EXPENDITURES City Council 123,904 123,904 86,254 37,650 City Manager 517,090 523,519 507,879 15,640 Communications 328,922 334,074 320,176 13,898 City Secretary 442,893 447,717 423,057 24,660 Legal 348,194 348,104 272,461 76,043 Human Resources 1112,998 113,961 108,382 5,579 Finance 724,646 730,593 717,774 12,819 Budget & Research 359,247 360,296 335,401 24,895 Municipal Court 1,297,919 1,321,387 1,236,770 84,617 Planning and Inspections 835,738 891,571 887,793 3,778 Economic Development 246,696 284,734 278,181 6,553 Library 1,950,202 1,974,519 1,897,417 77,102 Neighborhood Services 1,586,947 1,615,341 1,538,950 76,391 Public Works 3,557,179 3,679,018 3,347,723 331,295 Parks & Recreation 1,495,378 1,523,159 1,404,384 118,775 Police 10,439,174 11,272,925 11,138,443 134,482 Emergency Management 790,811 920,317 737,341 182,976 Fire 9,668,900 9,886,047 9,807,633 78,414 Building Services 673,270 673,270 673,270 - Non- Deparbnental 1,631,235 2,067,095 2,520,277 (453,182) Sub -Total Departments 37,130,353 39,091,551 38,239,166 852,385 Reserves & Other Expenditures Reserves - 70,085 55,900 14,185 Capital Improvements 50,000 95,331 95,331 - Recreation Centre 487,102 487,102 487,102 Legal settlement - 7,750 7,750 - Sub -Total Reserves and Other 537,102 660,268 646,083 14,185 TOTAL EXPENDITURES 37,667,455 39,751,819 38,885,249 866,570 Net Ina (Decrease) $ 105,154 $ 138,673 $ 1,189,735 $ 1,051,062 The notes to the required supplemental information is an integral part of this schedule. 67 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Required Supplementary Information September 30, 2012 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, and Traffic Safety. The General Capital Projects Fund and Grant Fund adopt project - length budgets_ All annual appropriations lapse at fiscal year end_ Prior to September 1, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means of financing them_ Public hearings are conducted to obtain taxpayer comments_ Prior to September 30, the budget is legally enacted through passage of an ordinance_ The appropriated budget is prepared by fund, department, and division. The City Manager is authorized to transfer budgeted amounts between departments within any fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council_ The legal Level of budgetary control (i_e_, the level at which expenditures may not legally exceed appropriations) is the fund level. During the year the City budget appropriations were increased by $5,933,472. Revision Increase Legally Adopted Fund Original Final (Decrease) General Fund $ 37,667,455 $ 39,751,819 $ 2,084,364 General Debt Service $ 7,424,936 $ 10,481,725 $ 3,056,789 Promotional $ 158,832 $ 171,182 $ 12,350 Donations $ 164,009 $ 176,392 $ 12,383 Explanation Prior year encumbrances totalling approximately $474 thousand rolled into FY11112 account for a part of this increase. Police department consolidated services with three other cities assuming the expenditure increase of additional staff, equipment, supplies, and contractual services_ This consolidation increased the Police expenditure budget totaling $833,751. Approximately $388,655 increase to help absorb additional bad debt activity of the ambulance billing service. $254 thousand was additional transfers for capital improvement projects_ Fire department saw attrition of employees and incurred approximately $150 thousand and in lump sum retirement payouts. In 2012 a positive fiscal opportunity allowed for the refunding of older debt resulting in the needed increase in appropriations for principal and interest payments. The $12 thousand increase is a minor adjustment to expenditures projections for the fiscal year. The increase is due to mid -year adjustment to expenditure projections for special events paid for with donated funds. Special Investigations $ 560,913 $ 516 „540 $ (44,373) Parks and Recreation $ 7,184,608 $ 7,813,228 $ 628,620 Crime Control District $ 4,248,216 $ 4,301,447 $ 53,231 Traffic Safety $ 784,319 $ 914,427 $ 130,108 Total $ 58,1 93,288 $ 64,126,760 $ 5,933,472 The $44 thousand decrease is a reduction in FY11/12 expected purchases did not transpire and will be delayed to later fiscal periods. 2012 increase was the addition and adjustment of expenditures to accommodate the new Recreation Centre operations that opened in April, 2012. The payoff of capital lease purchase for various recreation equipment accounts for $394 thousand. The remaining variance is various other operational expenditures adjusted for first year expectations. The minor increase in revised budget is related to the consolidation of 'Police Department services with three other local entities. The entire variance is due to increase payments to third party biller for their services provided. 68 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Required Supplementary Information September 30, 2012 B_ 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 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 Increase (decrease) in investment fair value changes are not considered a resource /inflow for budgetary recognition Sources/I nflows for advances given to other funds are not recognized as revenues in GAAP statements; Only recognized as reduction of an asset on balance sheet and not a transfer in Increase (decrease) in charges for services due to the activities bilfed to customers are considered revenues in budgetary basis but not in GAAP recognition Special funded projects are appropriated through long range capital improvement budget in which segregated and specific funding is appropriated outside of the operating budget Total "Net Change in Fund Balance" from the Statement of Revenues, Expenditures, and Changes in Balances - Governmental Fund -- General Fund 1,1 89,735 (508,516) 76,133 (147,760) 482,794 (30,500) 1,061,886 69 This page intentionally left blank. 70 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 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. Tax Increment Financing District #1 is 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. 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. The Tax Increment Financing Districts (TIF's) Debt Service Fund is used to accumulate monies for the payment of principal, interest, and related charges on the debts of Districts No. 1 and No. 2. rA M CITY OF NORTH RICHLAND HILLS, TEXAS Balance Sheet Non -major Governmental Funds September 30, 2012 Special Spepal Unme Control Promotional Donations Investigations Drainage Utility District Grants Assets Cash, cash equivalents, and investments $ 412,383 $ 898,356 $ 524,465 $ 1,104,081 $ $ 188,607 Receivables, net of allowance Accounts - - - 99,757 Other taxes receivable 57,425 - - - 725,484 Interest receivable 670 1,393 673 1,912 119 1,478 Intergovernmental receivables - - - - - 54,456 Other receivables - 97 - - 70,444 Prepaid items 4,603 - 987 1,667 10,400 Restricted: Cash, cash equivalents, and investments Construction funds - - - - Transition funds 423,123 Debt Service Funds - - - - - Total assets $ 475,081 $ 899,846 $ 526,125 $ 1,205,750 $ 1,150,393 $ 325,385 Liabilities Accounts payable $ 70 $ 13,108 $ 529 $ - $ 5,110 $ 65,689 Accrued liabilities 643 - - 74,001 474 Intergovernmental payables - - - - Due to other funds - - 150,000 Deposits and other liabilities 10 3,420 - Deferred revenue - - 5,035 - 43,889 Total liabilities 713 13,118 8,984 79,111 260,052 Fund Balance Nonspendables: Prepaids 4,603 - 987 1,667 10,400 Restricted: Crime control district - - 1,054,615 Debt service - - Orants - 54,933 Promotional & economic development 469,765 - - Public safety - 448,312 Capital projects (bond funded) - - Committed: Donations 886,728 - - Drainage utility - - 1,205,750 Gas development - Assigned: Munapal facilities project - Encumbrances - - 67,842 - 15,000 - Total fund balance (as restated) 474,368 886,728 517,141 1,245,750 1,071,282 65,333 Total liabilities and fund balance $ 475,081 $ 899,846 $ 526,125 $ 1,205,750 $ 1,150,393 $ 325,385 M Revenue Debt Service Economic I ax Increment I ax Increment Sales I ax Total Nan -major ARRA Grant Development Gas Development Traffic Safety Finance District #1 Finance Districts Revenue Bond Governmental $ 561,911 $ 1,076,602 $ 4,226,385 $ 287,322 $ - $ $ $ 9,280,112 - - - - 99,757 - - - 782,909 - 11,984 7,398 518 94 3,368 898 30,505 7,611 - - - - 62,067 - 597,060 - 667,601 - - - - 17,657 3,317,584 - 865,672 4,183,256 - - - - - 423,123 - - - - 1,447,522 916,169 2,363,691 $ 569,522 $ 4,4D6,170 $ 4,830,843 $ 287,840 $ 865,766 $ 1,450,890 $ 917,067 $ 17,910,678 $ 7,611 $ $ 21,020 $ 98,681 $ 6,180 $ - $ - $ 217,998 - - 5,764 - 80,882 - 26,655 26,655 589,156 - 739,156 - - 3,430 - - - - 48,924 596,767 21,020 131,100 6,180 1,117,045 (27,245) - 658,693 - 1,529,823 3,747,477 3,280,000 (27,245) 4,46,170 4,809,823 569,522 $ 4,4D6,170 $ 4,830,843 $ 17,657 1,054,615 - 1,450,890 917,067 2,367,957 - - - 27,688 - 1,128,458 156,740 605,052 - 859,586 859,586 - 886,728 - 1,245,750 - 1,529,823 - 7,027,477 - - - 82,842 156,740 859,586 1,450,890 917,067 16,793,633 287,840 $ 865,766 $ 1,450,890 $ 917,067 $ 17,910,678 73 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Revenues, Expenditures, and Changes in Fund Balance Nan -mayor Governmental Funds Year Ended September 30, 2012 74 Special Special Crime Control Promotional Donations Investigations Drainage Utility District Grants REVENUES Taxes $ 210,324 $ $ $ - $ 4,323,540 $ Charges for services - 842,440 Civil citations - Contributions - 1171,620 - - - Investment income 1,495 2,304 1,016 3,538 1,592 7,554 Intergovernmental - - 92,048 - - 556,089 Forfeitures - 138,604 - Miscellaneous - 2 - - - - Total revenues 211,819 173,926 231,668 845,978 4,325,132 563,643 EXPENDITURES General government 141,754 16,495 - 1,191 - 219,317 Public safety - 8,539 202,604 - 4,023,623 139,116 Culture and recreation 79,973 - - 1,446 Capital outlay: General government - - - Public safety - 27,289 - Culture and recreation 10,552 - 181,000 Public works - - Debt service: Principal retirement Interest and fiscal charges - - - - - Total expenditures 141,754 115,559 229,893 1,191 4,023,623 540,879 Excess (deficiency) of revenues over expenditures 70,065 58,367 1,775 844,787 301,509 22,764 OTHER FINANCING SOURCES (USES) Proceeds from the refunding of debt - - - - - - Premium on issuance of debt Payment to refunded bond escrow agent Transfer in Transfers out (852,534) Total other financing sources (uses) - - - (852,534) - - Net change in fund balance 70,065 58,367 1,775 (7,747) 301,509 22,764 Fund balance - beginning of year (as previously reported) 404,303 828,361 515,366 1,213,497 769,773 42,569 Adjustment to beginning fund balance, accounting standard implementation - - - - - - Fund balance - beginning of year (as restated) 404,303 828,361 515,366 1,213,497 759,773 42,569 Fund balance - end of the year $ 474,368 $ 886,728 $ 517,141 $ 1,205,750 $ 1,071,282 $ 65,333 74 Revenue Economic ARRA Grant Development Gas Development Traffic Safety $ rk. Debt Service 597,594 I ax Increment - 20,403 10,987 6C 669,167 - - Governmental - - 755,482 $ 7,427,822 669,167 20,403 1,364,063 779,0( 31,324 - - 778,393 96,389 - 852,& 118,748 9,293 - 63,066 - - 296,902 1,317,304 - 33,51 246,461 - 296,902 886,34 422,706 20,403 1,067,161 (107,34 - 107,088 410,081 - (439,881) 5,323,110 - 107,088 (439,881) 200,167 422,706 127,491 627,280 (107,34 (449,951) 4,278,679 4,182,543 264,0E (449,951) 4,278,679 4,182,543 264,0E (27,245) $ 4,406,170 $ 4,809,823 $ 156,74 rk. Debt Service I ax Increment Finance District Tax Increment Sales Tax Revenue Total Non -major #1 Finance Districfks Bands Governmental $ 2,893,958 $ $ 7,427,822 1,440,034 778,393 - 171,620 424 9,293 3,852 63,066 1,317,304 138,604 - - 755,484 424 2,903,251 3,852 12,092,327 - - 410,081 5,323,110 200,167 296,902 60,799 - 191,552 28,460 - 28,460 - 1,880,000 1,030,000 2,910,000 - 985,260 80,075 1,065,335 28,460 2,865,260 1,110,075 10,486,406 (28,036) 37,991 (1,ID6,223) 1,605,921 814,454 814,454 54,622 54,622 (869,076) - (869,076) 1,109,573 1,216,661 - (1,292,415) - 1,109,573 (75,754) (28,036) 37,991 3,350 1,530,167 - - 913,717 12,962,945 887,622 1,412,899 - 2,300,521 887,622 1,412,899 913,717 15,263,466 859,586 $ 1,450,890 $ 917,067 $ 16,793,633 rk. 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, 2012 REVENUES Taxes Investment income Intergovernmental Total revenues EXPENDITURES Debt service Principal Interest and fiscal agent charges Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Bond defeasance / bond refunding Payment to refunded bond escrow agent Premium on issuance of debt Total other financing sources (uses) Net change in fund balance Fund balance - beginning of year Fund balance - end of the year The budget is reflected on a GAAP basis. Original Final Actual $ 5,274,542 $ 5,274,542 $ 5,274,542 $ - 11,446 6,905 82,853 82,853 82,852 5,357,395 5,368,841 5,364,299 5,439,881 5,542,696 5,542,696 1,985, 055 2,125, 554 2,024, 686 7,424, 936 7,668, 250 7,567, 382 (2,067,541) (2,299,409) (2,203,083) 2,067, 541 SH, 2,067, 541 rce 2,067, 541 2,067, 541 2,884,934 2,884,934 (2,813,475) (2,940,000) 186,693 236,542 2,325,693 2,249,017 26,284 $ 45,934 $ 2,221, 581 $ 2,267,515 Variance with Final Budget - Positive (Negative) (4,541) (1) (4,542) 100,868 100,868 96,326 (126, 525) 49,a49 (76, 676) 19,650 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual PROMOTIONAL FUND Year Ended September 30, 2012 Variance with Final Budget Positive (Negative) (5,835) (260) (6,095) 29,428 29,428 23,333 23,333 77 Original Final Actual REVENUES Taxes $ 206,350 $ 216,159 $ 210,324 $ Investment income 3,113 1,755 1,495 Total revenues 209,463 217,914 211,819 EXPENDITURES General Government 158,832 171,182 141,754 Total expenditures 158,832 171,182 141,754 Excess of revenues over expenditures 50,631 46,732 70,065 Net change in fund balance $ 50,631 $ 46,732 $ 70,065 $ Fund balance - beginning of year 404,303 Fund balance - end of the year $ 474,368 The budge[ is reflected on a GAAP basis. Variance with Final Budget Positive (Negative) (5,835) (260) (6,095) 29,428 29,428 23,333 23,333 77 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual DONATIONS FUND Year Ended September 30, 2012 Variance with Final Budget - Positive (Negative) (13,122) (2,135) 2 (15,255) 30,014 13,461 27,910 (10,552) 60,833 45,578 45.578 78 Original Final Actual REVENUES Contributions $ 197,692 $ 184,742 $ 171 ,620 $ Investment income 9,093 4,439 2,304 Miscellaneous 1,060 - 2 Total revenues 207,785 189,181 173,926 EXPENDITURES General Government 50,009 46,509 16,495 Public safety 13,000 22,000 8,539 Culture and recreation 101,000 107,883 79,973 Culture and recreation (Capital Outlay) - - 10,552 Total expenditures 164,009 176,392 115,559 Excess of revenues over expenditures 43,776 12,789 58,367 Net change in fund balance $ 43,776 $ 12,789 $ 58,367 $ Fund balance - beginning of year 828,361 Fund balance - end of the year $ 886,728 The &AVet is reflected an a GRAPbasis. Variance with Final Budget - Positive (Negative) (13,122) (2,135) 2 (15,255) 30,014 13,461 27,910 (10,552) 60,833 45,578 45.578 78 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, 2012 Variance with Final Budget Positive (Negative) (2,529) (38,073) (12,396) (52,998) 100,209 186,438 286,647 233,649 233,649 79 ChiginaV Final Actual REVENUES Investment income $ 6,045 $ 3,545 $ 1,016 $ Intergovemmental 46,500 130,121 92,048 Forfeitures 225,000 151,000 138,604 Total revenues 277,545 284,666 231,668 EXPENDITURES Public safety 291,113 302,813 202,604 Capital outlay: Public safety 269,800 213,727 27,289 Total expenditures 560,913 516,540 229,893 Excess (deficiency) of revenues over expenditures (283,368) (231,874) 1,775 Net change in fund balance $ (283,368) $ (231,874) $ 1,775 $ Fund balance - beginning of year 515,366 Fund balance - end of the year $ 517,141 The budget is reflected on a GAAP basis. Variance with Final Budget Positive (Negative) (2,529) (38,073) (12,396) (52,998) 100,209 186,438 286,647 233,649 233,649 79 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, 2012 Variance with Final Budget Positive (Negative) (4,735) 1,440 (3,295) 1,309 1,309 (1,986) (1,986) 80 Original Final Actual REVENUES Investment income $ 14,782 $ 8,273 $ 3,538 $ Drainage fees 834,000 841,000 842,440 Total revenues 848 ,782 849,273 845,978 EXPENDITURES General government 2,500 2,500 1,191 Total expenditures 2,500 2,500 1,191 Excess of revenues over expenditures 846 ,282 846,773 844,787 Transfers out (852,534) (852,534) (852,534) Total other financing sources (uses) (852,534) (852,534) (852,534) Net change in fund balance $ (6,252) $ (5,761) $ (7,747) $ Fund balance - beginning of year 1,213,497 Fund balance - end of the year $ 1,205,750 The budget is reflected on a GAAPbasis. Variance with Final Budget Positive (Negative) (4,735) 1,440 (3,295) 1,309 1,309 (1,986) (1,986) 80 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual PARKS AND RECREATIONS DEVELOPMENT CORPORATION FUND Year Ended 'September 30, 2012 Operating Budget Variance with 81 Operating Less: Actual Actual Final Budget - Actual (GAAP Capital Project (Budget Positive Original Final Basis) Expenditures - Basis) (Negative) REVENUES Taxes $ 4,208,960 $ 4,283,500 $ 4,241,341 $ $ 4,241,341 $ (42,159) Contributions 500 64,713 1,700 1,700 (53,013) Investment income 13,337 7,018 21,574 21,574 14,556 Intergovernmental - - 271,903 271,903 271,943 Recreation centre 1,400,136 1,735,397 1,481,012 1,481,012 (254,385) Tennis center 384,727 379,367 432,692 432,692 53,325 Miscellaneous 50,004 203,428 355,713 355,713 152,285 Total revenues 6,057,660 6,673,423 6,B05,935 6,805,935 132,512 EXPENDITURES Culture and recreation $ 5,612,628 $ 6,026,320 $ 5,580,061 $ $ 5,580,061 $ 446,259 Capital Outlay - 213,117 3,302,285 3,643,815 (341,530) 554,647 Debt Service Principal - 394,251 - 394,251 (394,251) Interest and fiscal agent charges - - 2,151 - 2,151 (2,151) Total expenditures 5,612,628 6,239,437 9,278,748 3,643,815 5,634,933 604,504 Excess (deficiency) of revenues over expenditures 445,032 433,986 (2,472,813) (3,643,815) 1,171,002 737,016 OTHER FINANCING SOURCES (USES) Issuance of debt - - 394,251 394,251 394,251 Proceeds from sale of assets - - 1,656 1,656 1,656 Transfers in 555,243 555,243 555,243 555,243 - Transfers out (1,571,980) (1,573,791) (1,923,917) (1,923,917) (350,126) Total other financing sources (uses) (1,016,737) (1,018,548) (972,767) (972,767) 45,781 Net change in fund balance $ (571,705) $ (584,562) $ (3,445,580) $ (3,643,815) $ 198,235 $ 782,797 Fund Balance - beginning of year 5,684,019 Fund Balance - end of the year $ 2,238,439 "" Capital Projects expedilures are budgeted on a multi -year schedule and are not included in the operating budget. 81 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, 2012 Variance with Final Budget - Positive (Negative) 24,080 (395) 23,685 277,824 277,824 301,509 3171,509 82 OriginaV Final Actual REVENUES Taxes $ 4,246,228 $ 4,299,460 $ 4,323,540 $ Investment income 1,988 1,987 1,592 Total revenues 4,248,216 4,301,447 4,325,132 EXPENDITURES Public safety 4,248,216 4,301,447 4,023,623 Total expenditures 4,248,216 4,301,447 4,023,623 Excess of revenues over expenditures - - 301,509 Net change in fund balance $ - $ - $ 301,509 $ Fund balance - beginning of year 769,773 Fund balance - end of the year $ 1,071,282 The budge[ is reflected on a GAAP basis. Variance with Final Budget - Positive (Negative) 24,080 (395) 23,685 277,824 277,824 301,509 3171,509 82 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, 2012 Variance with Final Budget - Positive (Negative) (16,053) 615,482 1,000 600.429 (296,902) (296,902) 303,527 303,527 83 Original Final Actual REVENUES Investment income $ 47,094 $ 27,040 $ 10,987 $ Mineral rights lease income 140,000 140,000 755,482 Right of way usage fees - 596,594 597,594 Total revenues 187,094 763,634 1,364,063 EXPENDITURES Capital oufiay: General government - - 296,902 Total expenditures - - 296,902 Excess of revenues over expenditures 187,094 763,634 1,067,161 OTHER FINANCING SOURCES (USES) Transfers out (439,881) (439,881) (439,881) Total other financing sources (uses) (439,881) (439,881) (439,881) Net change in fund balance $ (252,787) $ 323,753 $ 627,280 $ Fund balance - beginning of year 4,182,543 Fund balance - end of the year $ 4,809,823 The budget is retkaed on a GAAP basis. Variance with Final Budget - Positive (Negative) (16,053) 615,482 1,000 600.429 (296,902) (296,902) 303,527 303,527 83 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, 2012 Variance with Final Budget - Positive (Negative) (1,212) (93,607) (94,819) (21,267) 49,345 28,078 (66,741) (66,741) 84 Original Final Actual REVENUES Investment income $ 2,780 $ 1,820 $ 608 $ Civil citations 772,875 872,000 778,393 Total revenues 775,655 873,820 779,001 EXPENDITURES Public safety 755,519 831,572 852,839 Capital outlay Public safety 28,800 82,855 33,510 Total expenditures 784,319 914,427 886,349 Excess of revenues over expenditures (8,664) (40,607) (107,348) Net change in fund balance $ (8,664) $ (40,607) $ (107,348) $ Fund balance - beginning of year 264,088 Fund balance - end of the year $ 156,740 The budget is reflected on a GAAP basis. Variance with Final Budget - Positive (Negative) (1,212) (93,607) (94,819) (21,267) 49,345 28,078 (66,741) (66,741) 84 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. 85 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Net Assets INTERNAL SERVICE September 30, 2012 Facilities and Information Total Internal Construction Fleet Services Self Insurance Services Service ASSETS Current Cash, cash equivalents, and investments $ 1,588,987 $ 2,1£6,240 $ 1,800,142 $ 1,872,983 $ 7,428,352 Accounts receivable, net of allowance Other 9 - 14 13,552 13,575 Interest receivable 2,924 7,828 15,853 5,280 31,885 Prepaid items 64 - 137,456 156,044 293,564 Inventories, at cwt 27,569 112,727 - - 140,296 Total current assets 1,619,553 2,286,795 1,953,465 2,047,859 7,907,672 Noncurrent Restricted assets: Cash, cash equivalents, and investments Construction funds 3,382 95,283 - 47,649 146,314 Future claims - - 4,957,609 - 4,957,609 Total restricted cash and cash equivalents 3,382 95,283 4,957,609 47,649 5,103,923 Capital assets, at wst Building and improvements 272,293 - - - 272,293 Other improvements - - - 662,769 602,769 Machinery and equipment 411,442 5,064,052 17,312 2,920,650 8,413,456 Construction in progress - - - 43,525 43,525 Accumulated depreciation (298,973) (3,75Q,139) (17,312) (1,655,992) (5,722,416) Net capital assets 384,762 1,313,913 - 1,910,952 3,609,627 Total noncurrent assets 388,144 1,409,196 4,957,609 1,958,601 8,713,550 Total assets 2,007,697 3,695,991 6,911,074 4,066,460 16,621,222 LIABILITIES Current Accounts payable and accrued expenses 223,446 45,993 1,074,197 81,232 1,424,868 Other current liabilities 277 40 24,702 - 25,019 Compensated absences 5,383 4,226 2,669 5,868 18,146 Deferred revenue - - - - - Total current liabilities 229,106 50,259 1,101,568 87,106 1,468,033 Noncurrent Compensated absences 52,799 98,092 41,838 59,987 252,716 Other post employment benefits obligation 112,735 132,917 69,306 129,961 444,919 Net pension obligation 82,015 97,013 52,976 96,217 328,221 Total noncurrent Viabilities 247,549 328,022 164,120 286,165 1,025,856 Total liabilities 476,655 378,281 1,265,688 373,265 2,493,889 NET ASSETS Invested in capital assets, net of related debt 384,762 1,313,913 - 1,910,952 3,609,627 Unrestricted 1,146,280 2,D 3,797 5,645,386 1,722,243 10,517,706 Total net assets $ 1,531,£142 $ 3,317,710 $ 5,645,386 $ 3,633,195 $ 14,127,333 86 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Expense, Revenues, and Changes in Net Assets INTERNAL SERVICE Year Ended September 30, 2012 87 Facilities and Fleet Self Information Total Internal Construction Services Insurance Systems Service OPERATING REVENUES Other intergovernmental $ - $ - $ 32,019 $ 11,864 $ 43,883 Internal service revenues Risk management - - 8,577,291 - 8,577,291 Facilities and fleet management 2,413,419 2,845,344 - - 5,258,763 Information systems management - - - 2,370,885 2,370,885 Miscellaneous revenues 94,346 33,984 - 153,614 281,944 Total operating revenues 2,507,765 2,879,328 8,609,310 2,536,363 16,532,766 OPERATING EXPENSES Claims - - 6,852,518 - 6,852,518 Contractual services 811,518 82,590 758,498 340,670 1,993,276 Personnel services 1,001,833 1,032,767 498,423 1,013,054 3,546,077 Repairs and maintenance 290,679 202,150 3,640 852,069 1,348,538 Supplies 54,729 986,471 5,382 180,642 1,227,224 Depreciation 46,939 365,492 - 394,286 806,717 Total operating expenses 2,205,698 2,669,470 8,118,461 2,780,721 15,774 „350 Operating income (loss) 302,067 209,858 490,849 (244,358) 758,416 NONOPERATING REVENUES (EXPENSES) Investment income 2,249 5,150 11,365 3,679 22,443 Other income (expense) - - 111,105 - 111,105 Gain (loss) on disposal of assets - 40,781 - (1,854) 38,927 Total nonoperating revenues (expenses) 2,249 45,931 122,470 1,825 172,475 Income (loss) before transfers 304,316 255,789 613,319 (242,533) 930,891 TRANSFERS Transfers in 20,331 50,000 - 230,900 301,231 Transfers out (20,206) (397,790) - - (417,996) Total transfers - net 125 (347,790) - 230,900 (116,765) Change in net assets 304,441 (92,001) 613,319 (11,633) 814,126 Net assets - beginning of year 1,226,601 3,409,711 5,032,067 3,644,828 13,313,207 Net assets - end of year $ 1,531,042 $ 3,317,710 $ 5,645,386 $ 3,633,195 $ 14,127,333 87 CITY OF NORTH RICHLAND HILLS, TEXAS Combining Statement of Cash Flows INTERNAL SERVICE FUNDS Year Ended September 30, 2011 Facilities and Construction Information Services Fleet Services Self Insurance Services Totals Cash flows from operating activities: Receipts from interfund services provided Other operating revenue Payments to suppliers Payments to employees Net cash provided by (used for) operating activities Cash flows from noncapital financing activities: Transfers from other funds Transfers to other funds Net cash provided by (used for) noncapital and related financing activities Cash flows from capital and related financing activities: Insurance recovery proceeds Acquisition and construction of capital assets Proceeds from sale of capital assets Net cash provided by (used for) capital and related financing activities Cash flows from investing activities: Interest and dividends received Net cash provided by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalent beginning of year Cash and cash equivalent end of year $ 2,413,419 $ 2,845,344 $ 8,577,291 95,087 48,957 32,005 (997,616) (1,332,489) (7,433,509) (951,184) (980,773) (479,117) 559,706 581,039 696,670 20,331 50,000 (20,206) (397,790) $ 2,370,885 $ 16,206,939 145,335 321,384 (1,522,399) (11,286,013) (947,084) (3,358,158) 46,737 1 „884,152 230,900 301,231 - (417,996) 125 (347,790) 230,900 (116,765) - 111,105 (42,215) (517,222) - (491,269) - 40,781 - (1,854) (42,215) (476,441) 11 (493,123) 954 2,371 4,529 954 2,371 4,529 518,570 (240,821) 812,394 1,073,799 2,502,344 5,945,447 $ 1,592,369 $ 2,261,523 $ 6,757,751 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 inventories (Increase) decrease in prepaid items Increase (decrease) in compensafing absences Increase (decrease) in other post employment benefits Increase (decrease) in net pension obligation Increase (decrease) in deferred revenues Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Total adjustments Net cash provided by (used for) operating activities $ Noncash financing activities: Disposal of capital assets $ 111,105 (1,050,706) 38,927 (900,674) 2,172 10,026 2,172 10,026 (213,314) 876,739 2,133,946 11,655,536 $ 1 $ 12,532,275 302,067 $ 209,858 $ 490,849 $ (244,358) $ 758,416 46,939 365,492 - 394,286 806,717 - (810) 15,460 - 14,670 741 14,973 (14) (8,609) 7,091 (11,413) (39,932) - (51,345) (64) - (3,096) (118,590) (121,750) 6,366 1,793 (4,808) 18,073 21,424 32,849 37,238 117,887 35,613 123,587 11,434 12,963 6,227 12,284 42,908 - - - (11,534) (11,534) 169,975 (21,677) 13,406 (30,939) 130,765 812 1,141 160,739 511 163,203 257,639 371,181 205,821 291,095 1,125,736 559,708 $ 581,039 $ 696,670 $ 46,737 $ 1,884,152 - $ (409,261) $ - $ (37,011) $ (446,272) 88 Statistical Section "IP446-EM4 This page intentionally left blank. Notes: Fiscal year 2003 was the implementation year of GASI3 #34 for the City Figures from fiscal years priorto 2003 are unavailable for inclusion in the tables Right -of -way land was added to the financial slatements in fiscal year2006 91 CITY OF NORTH RICHLAND HILLS, TEXAS Table 1 Net Assets by Component (unaudited) Fiscal Year 2012 2011 2010 2909 2008 2007 2006 2005 2004 2003 Govemmental Activities Invested in capital assets net of related debt $ 205,162,008 $ 178,349,544 $ 164,973,337 $ 142,066,447 $ 129,533,935 $ 128290,273 $ 127,692,821 $ 70,181,539 $ 63,351,827 $ 58,568,310 Restricted 4,253,430 3,368,190 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 23,572,411 37,099,102 35,253260 52,082,125 54, 146, 336 44 ,787,548 36,986,785 27,839,936 27,644,041 27,303,419 Total net assets 232,987,847 218,816,836 203,941,724 198,841,917 187,664,636 176,348,230 167,653,427 100,780,574 93,950,003 88,730,197 Business -type Activities Invested in capital assets net of related debt 62,615,382 65,810,811 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 2,710,553 2,600,187 2,610287 3,018,779 2,709,713 2,937,027 2,712,360 2,267,668 1,241,081 2,450,610 Unrestricted 22,957,383 21,455,781 21,724,799 25,309,106 29,018,350 24,779,076 27,457208 22,623,841 20,443,728 19 ,036,895 Total net assets 88 ,283,318 89,866,779 85,495275 90 ,682,878 92,556,673 93201,899 92,945,573 88,501,761 86,806,951 85,510,737 Primary Govemmen( Iwasted in capital assets net of related debt 267, 777, 388 244,160,355 226,134,526 204,421,440 190,352,545 193,776,059 190,468,826 133,791,791 128,473,959 122,591,542 Restricted 6,953,983 5,968,377 6,325,414 7,712,124 6,694,077 6,207,436 5,686,181 5,026,767 4,195,216 5,309,078 Unrestricted Total net assets 46,529794 $ 321,271 .)65 58``5�54\\8�83 $ 308,683,ri15 56``9.7_,8``9�2_,5 $ 289,431,865 77 $ 289,524,795 83164 86 $ 28t�12I, 69 $ 215 ;3,)29 64\\4�_4_3\\9�.9_.3_ $ 26U,S99,W 50463777 $ 169 335 48 $ 18U,I56 46340 $ 174240,934 Notes: Fiscal year 2003 was the implementation year of GASI3 #34 for the City Figures from fiscal years priorto 2003 are unavailable for inclusion in the tables Right -of -way land was added to the financial slatements in fiscal year2006 91 Expenses Governmental activities: General government Public safety Culture and recreation Public works Interest and other fees Total governmental activities Business -type activities: Water and sewer Goff course Aquatic park Interest and other fees Total business -type activities Total primary government Program Revenues Governmental activities: Charges for services General government Public safety Culture and recreation Public works Operating grants and contributions Capital grants and contributions Total governmental activities Business -type activities: Charges for services Water and sewer Golf course Aquatic park Operating grants and contributions Capital grants and contributions Total business -type activities Total primary government Net (Expense) Revenue Governmental activities Business -type activities Total primary government CITY OF NORTH RICHLAND HILLS, TEXAS Changes in Net Assets (unaudited) 2012 2011 2010 Table 2 Fiscal Year 2009 2008 $ 10,399,845 $ 9,886,731 $ 14,653,747 $ 16,355,871 $ 9,379,422 28,881,714 28,512,136 26,172,292 27,772,668 25,791,827 11,679,786 9,352,354 9,468,346 10,718,579 7,973,359 7,794,339 7,679,001 8,388,531 2,126,721 5,748,315 3,453,283 2,108,277 1,761,128 2,269,541 2,302,096 62,208,967 57,538,499 60,444,044 59,243,380 51,195,019 26,642,141 27,981,025 27,313,424 25,121,565 27,329,181 2,429,973 2,227,315 2,236,113 2,217,868 2,302,670 4,753,949 4,507,561 4,188,892 4,105,695 3,774,757 - - - - 433,588 33,826,063 34,715,901 33,738,429 31,445,128 33,840,196 96,035,030 92,254,400 94,182,473 90,688,508 85,035,215 5,490,245 5,466,876 8,619,557 4,547,658 9,333,482 3,426,008 2,668,111 2,918,356 4,922,180 2,995,693 2,381,024 858,241 909,267 1,446,132 2,517,122 932,819 857,809 839,309 1,896,764 2,355,161 1,833,138 879,524 964,914 1,142,243 353,816 7,401,996 17,644,326 6,806,586 11,341,668 304,514 21,465,230 28,374,887 21,057,989 25,296,645 17,859,788 28,445,746 28,921,168 24,324,685 25,060,898 26,349,559 2,443,865 2,324,118 2,264,256 2,509,577 2,571,409 4,548,828 4,587,899 4,090,087 3,858,389 3,943,288 80,660 - - - - 50,744 4,643,096 271,624 - - 35,569,843 40,476,281 30,950,652 31,428,864 32,864,256 57,035,073 68,851,168 52,008,641 56,725,509 50,724,044 (40,743,737) (29,163,612) (39,386,055) (33,946,735) (33,335,231) 1,743,780 5,760,380 (2,787,777) (16,264) (975,940) $ (38,999,957) $ (23,403,232) $ (42,173,832) $ (33,962,999) $ (34,311,171) A Table 2 2007 2006 2005 2004 2003 $ 8,461,142 $ 9,269,861 $ 8,288,137 $ 9,755,719 $ 9,292,156 23,265,259 22,022,696 20,693,721 20,460,665 21,078,401 7,327,532 7,611,710 7,355,182 7,436,113 7,102,491 7,799,706 8,169,282 7,597,475 6,755,207 6,917,896 2,561,837 2,546,791 2,860,149 3,157,963 3,853,040 49,415,476 49,620,340 46,794,664 47,565,667 48,243,984 23,154,259 22,929,665 21,492,504 20,707,959 20,415,859 2,247,272 2,239,404 2,254,198 2,257,534 2,353,454 3,433,492 3,343,073 3,251,524 3,178,835 3,121,298 28,835,023 28,512,142 26,998,226 26,144,328 25,890,611 78,250,499 78,132,482 73,792,890 73,709,995 74,134,595 6,505,029 6,881,843 5,672,569 5,548,912 5,221,263 1,718,460 1,314,329 1,154,807 1,031,326 1,062,295 1,124,777 1,212,343 1,214,590 1,091,618 1,363,337 1,179,302 174,166 61,063 100,192 475,788 1,028,853 1,153,543 1,539,736 612,519 865,108 410,297 2,910,568 4,367,529 6,404,966 2,087,935 11,966,718 13,646,792 14,010,294 14,789,533 11,075,726 21,630,336 25,858,511 22,237,742 20,861,262 20,945,508 2,298,065 1,775,963 2,287,494 2,154,714 2,356,941 3,916,691 3,894,274 3,421,301 2,831,743 2,892,843 - 66,466 46,847 344,296 64,334 599,983 1,288,734 1,603,834 2,128,214 1,303,870 28,445,075 32,883,948 29,597,218 28,320,229 27,563,496 40,411,793 46,530,740 43,607,512 43,109,762 38,639,222 (37,448,758) (35,973,548) (32,784,370) (32,776,134) (37,168,258) (389,948) 4,371,806 2,598,992 2,175,901 1,672,885 $ (37,838,706) $ (31,601,742) $ (30,185,378) $ (30,600,233) $ (35,495,373) continued 93 CITY OF NORTH RICHLAND HILLS, TEXAS Changes in Net Assets (unaudited) General Revenues and Other Changes in Net Assets Governmental activities: Taxes Property taxes Sales taxes Mixed beverage taxes Franchise taxes Occupancy taxes Unrestricted investment earnings Special items Miscellaneous Transfers Total governmental activities Business -type activities: Unrestricted investment earnings Special items Miscellaneous Transfers Total business -type activities Total primary government Changes in Net Assets Governmental activities Business -type activities Total primary government 2012 2011 2010 Table 2 Fiscal Year 2009 2008 $ 22,222,620 $ 19,339,750 $ 19,909,976 $ 20,605,670 $ 19,248,707 16, 974, 086 16, 645,412 16, 428, 281 16,058,728 17,445,806 1 01,724 128,007 11 8,253 117,757 161,783 4,269,229 4,329,500 3,956,663 3,802,559 4,604,523 210,324 238,410 240,387 152,220 260,319 300,928 495,386 588,866 1,611,632 2,245,479 - - - - 196,320 288,093 1,271,555 553,412 188,512 477,026 3,384,630 1,590,704 2,690,024 2,586,937 569,227 47,751,634 44,038,724 44,485,862 45,124,015 45,209,190 50,479 171,125 236,674 740,393 878,795 6,909 30,703 53,524 (10,986) 8,962 (3,384,630) (1,590,704) (2,690,024) (2,586,937) (557,044) (3,327,242) (1,388,876) (2,399,826) (1,857,530) 330,713 44,424,392 42,649,848 42,086,036 43,266,485 45,539,903 7,007,897 14,875,112 5,099,807 11,177,280 11,873,959 (1,583,462) 4,371,504 (5,187,603) (1,873,794) (645,227) $ 5,424,435 $ 19,246,616 $ (87,7961 $ 9,303,486 $ 11,228,732 Notes: Fiscal year 2003 was the implementation year of GASB #34 for the City. Sri Table 2 2007 2006 2005 2004 2003 18,663,482 $ 18,134,230 $ 17,458,279 $ 16,871,892 $ 16,871,892 16, 865,2 82 15, 934, 374 15, 230, 354 16,477,474 16,477,4 74 129,860 123,355 115,143 107,164 107,164 4,450,441 3,855,169 3,541,130 3,592,682 3,592,682 284,099 199,850 191,848 172,197 172,197 2,757,208 2,047,583 1,088,547 652,153 652,153 1,499,140 - - (1,585,000) (1,585,000) 651,376 2,341,327 688,555 602,568 602,568 712,782 873,867 1,301,085 1,104,810 1,104,810 46,013,670 43,509,755 39,614,941 37,995,940 37,995,940 1,330,781 945,873 396,903 225,123 225,123 (712,782) (873,867) (1,301,085) (1,104,810) (1,104,810) 617,999 72,006 (904,182) (879,687) (879,687) 46,631,669 43,581,761 38,710,759 37,116,253 37,116,253 8,564,912 7,536,207 6,830,571 5,219,806 827,682 228,051 4,443,812 1,694,810 1,296,214 793,198 $ 8,792,963 $ 11,980,019 $ 8,525,381 $ 6,516,020 $ 1,620,880 RIi This page intentionally left blank. Rit CITY OF NORTH 'RICHLAND HILLS, TEXAS Fund Balances - Governmental Funds (unaudited) General Fund Nonspendables Restricted Committed Assigned Unassigned Total General Fund All [Other Governmental Funds Nonspendables Restricted Committed Assigned Unassigned Total all other governmental funds Total all governmental funds Fiscal Year Fiscal Year 2012 2011 $ 707,569 $ 926,707 868,715 653,526 0 0 3,759,566 1,848,329 8,992,908 9,838,310 $ 14,328,758 $ 13,266,872 $ 47,202 $ 30,308 60,696,117 30,997,610 3,622,301 6,221,018 16,333,423 6,480,459 0 0 $ 80,699,043 $ 43,729,395 $ 95,027,801 $ 56,996,267 Notes: GASB 54 Fund Balance reporting was implemented in 2011. Table 3 97 Revenues Taxes Licenses and permits Charges for services Fines Civil Citations Contributions Special assessments Investment income Intergovernmental Forfeitures Miscellaneous Total revenues Expenditures General government Public safety Culture and recreation Public works Capital outlay Debt service Principal Interest Total expenditures Excess of revenues over (under) expenditures Other Financing Sources (Uses) Proceeds from borrowing Premium on issuance of debt Proceeds from refunding Payments to escrow agent Insurance recovery proceeds Proceeds from sale of assets Payment in lieu of taxes Transfers in Transfers out Net component unit transfers Total other financing sources (uses) Net change in fund balances Debt service as a percentage of noncapital expenditures CITY OF NORTH RICHLAND HILLS, TEXAS Changes in Fund Balances - Governmental Funds Last Ten Fiscal Years Table 4 23.6% 22.5% 20.6% 16.9% 18.7% 98 Fiscal 2012 2011 2010 . 2009 2008 $ 43,777,983 $ 40,681,079 $ 40,842,538 $ 40,736,934 $ 41,721,138 1,543,875 1,375,742 1,148,594 988,020 1,705,703 6,715,031 6,076,625 7,588,891 6,562,241 6,461,012 2,421,696 2,665,135 2,631,813 2,677,901 2,394,920 778,393 674,745 726,274 999,584 825,191 176,740 187,813 192,501 160,194 196,320 200 8,748 - 276,475 154,125 415,326 383,453 538,193 1,250,127 1,678,921 5,732,323 9,070,672 3,188,918 2,477,191 1,200,491 138,604 183,295 232,054 146,830 142,874 1,363,579 445,214 1,876,282 517,492 6,634,802 63,063,750 61,752,521 58,966,058 56,792,989 63,115,497 10,829,793 10,311,297 10,435,250 9,459,393 9,054,489 26,959,990 25,934,692 24,697,961 25,262,159 26,051,508 9,163,107 7,453,931 7,344,261 8,545,815 7,241,596 3,601,659 2,416,186 2,518,081 2,478,800 2,663,001 15,945,071 15,475,441 14,301,095 10,506,569 5,137,596 8,846,947 8,187,696 7,115,319 5,699,394 6,188,393 3,092,172 2,194,444 2,161,325 2,048,696 2,225,585 78,438,739 71,973,687 68,573,292 64,000,826 58,562,168 (15,374,989) (10,221,166) (9,607,234) (7,207,837) 4,553,329 26,224,251 7,315,000 9,186,475 8,503,525 4,465,000 546,164 358,270 42,075 242 - 3,699,388 - - - - (3,809,076) - - - - 3,145,280 806,479 34,678 188,512 16,353 - - - - 355,004 8,705,604 5,659,688 8,158,092 9,274,945 5,918,639 (4,842,779) {4,304,576} (7,540,830) (7,759,444) (5,899,649) 33,668,832 9,834,861 9,880,490 10,207,780 4,855,347 $ 18,293,843 $ (386,305) $ 273,256 $ 2,999,943 $ 9,408,676 23.6% 22.5% 20.6% 16.9% 18.7% 98 Table 4 Year 2007 2006 2005 2004 2003 $ 40,393,165 $ 39,296,101 $ 37,565,652 $ 38,099,241 $ 36,455,642 1,526,636 2,251,292 1,473,542 1,421,831 1,432,955 6,335,104 6,354,199 6,185,782 5,932,134 5,917,290 2,064,187 2,130,968 1 ,787,547 1,775,899 1,582,165 170,326 177,273 178,937 176,962 177,162 28,225 8,348 514 - 57,169 2,258,877 1,719,493 922,870 569,532 822,474 1,267,839 1,730,684 1,792,392 3,139,929 1,044,102 74,448 86,752 70,117 47,068 33,874 939,241 1,431,192 1,070,874 460,770 777,753 55,058,048 55,186,302 51,048,227 51,623,366 48,300,586 8,607,293 9,329,442 8,553,540 8,968,934 8,323,987 23,414,877 22,049,690 21,289,538 20,618,988 20,543,273 6,684,263 6,431,291 6,331,728 6,266,762 5,988,300 2,522,751 2,468,819 2,536,838 2,278,247 3,270,197 3,742,378 4,909,101 9,404,434 12,577,507 8,315,345 6,697,217 6,462,905 6,695,455 6,278,005 5,826,894 2,281,930 2,349,160 2,665,828 2,770,875 3,126,375 53,950,709 54,000,408 57,477,361 59,759,318 55,394,371 1,107,339 1,185,894 (6,429,134) (8,135,952) (7,093,785) 2,185,000 3,625,000 - 4,935,000 2,750,000 5,085,000 8,245,000 - 3,815,000 - (5,075,787) (8,100,166) - (3,694,386) - 282,000 - - - - 9,864 - - - - 5,812,148 4,436,800 3,749,968 4,442,310 6,878,744 (5,990,349) (5,710,150) (3,794,426) (4,858,894) (5,002,772) 2,307,876 2,496,484 (44,458) 4,639,030 4,625,972 $ 3,415,215 $ 3,682,378 $ (6,473,592) $ (3,496,922) $ (2,467,813) 21.8% 21.9% 24.2% 23.7% 23.5% RX CITY OF NORTH RICHLAND HILLS, TEXAS Appraised and Taxable Value of Properly Last Ten Fiscal Years (unaudited) Personal Property 338,839,069 34 8,6 31,136 347,217,730 361,559,520 342,337,515 318,5 94, 946 331,545,812 311,291,262 302,449,010 302,955,622 Less: Tax - Exempt Property 374,046,137 382,365,613 397,233,578 388.297.207 421,361,355 438,489,302 451,978,018 465,272,083 879,728,308 947,626,573 Net Taxable Value 2, 816, 939,495 3,013,688,483 3,133,267,628 3,295,289,253 3,407,141,199 3,575,307,295 3,759,485,131 3,750,427,552 3,602, 317, 712 3.618.184.021 Table 5 Total Direct Tax Rate 0.57000 0.57000 0.57000 0.57000 0.57000 0.57000 0.57000 0.57000 0,57000 0.57000 M Appraised Appraised Appraised Appraised Fiscal Residential Commercial Industrial Other Year Property Property Property Property (1) 2003 1,879,625,473 616,511,643 34,642,976 321,366,471 2004 2,020,935,083 637,135,490 30,121,580 359,230,807 2005 2,125,365,452 660,915,079 25,319,238 371,683,707 2006 2,208,222,079 693,344,286 23,766,206 396,694,369 2007 2,322,672,063 706,800,208 24,219,035 432,473,733 2008 2,454,968,837 732,299,884 25,008,737 482,924,193 2009 2,527,941,808 723,655,894 24,685,405 603,634,230 2010 2,536,677,612 755,382,876 24,238,120 588,109,765 2011 2,599,141,890 719,345,087 23,749,165 837,360,868 2012 2,611,659,424 686,273,536 24,818,749 940,103,263 Source: Tarrant Appraisal District Certified Tax Roll, July 25, City budget (2007 -2012) Tarrant Appraisal District September Report, City budget (2002 -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. Personal Property 338,839,069 34 8,6 31,136 347,217,730 361,559,520 342,337,515 318,5 94, 946 331,545,812 311,291,262 302,449,010 302,955,622 Less: Tax - Exempt Property 374,046,137 382,365,613 397,233,578 388.297.207 421,361,355 438,489,302 451,978,018 465,272,083 879,728,308 947,626,573 Net Taxable Value 2, 816, 939,495 3,013,688,483 3,133,267,628 3,295,289,253 3,407,141,199 3,575,307,295 3,759,485,131 3,750,427,552 3,602, 317, 712 3.618.184.021 Table 5 Total Direct Tax Rate 0.57000 0.57000 0.57000 0.57000 0.57000 0.57000 0.57000 0.57000 0,57000 0.57000 M CITY OF NORTH RICHLAND HILLS, TEXAS Table 6 Property Tax Rates - 0irect and Overlapping Governments (per $100 assessed value) (unaudited) Sources: (1) Tarrant County. (2) Birdville Independent School District from 2002 -2006. (3) Oily records. (4) Began using Tarrant County as source in 2006. HE City of North Richland Hills Birdville Fiscal General Debt service ,Junior school Year fund (3) fund (3) Total (3) college (1) district (1 )(2) Hospital (11 County (11 Total 2003 0.32935 0.24D65 0.57000 0.13938 1.61700 0.23240 0.27250 2.83128 2004 0.32956 0.241344 0.57000 0.13938 1.61700 0.23540 0.27250 2.83428 2005 0.33173 0.23827 0.57000 0.13938 1.61700 0.23540 0.27250 2.83428 2006 0.34432 0.22568 0.57000 0.13938 1.61700 (4) 0.23540 0.27250 2.83428 2007 0.34695 0.22305 0.57000 0.13938 1.56500 (4) 0.23540 0.27150 2.78128 2008 0.34241 0.22759 0.57000 0.13938 1.40500 (4) 0.23040 0.26650 2.61128 2009 0.33875 0.23125 0.57000 0.13796 1.41000 (4) 0.22790 026400 2.6D986 2010 0.35412 0.21588 0.57000 0.13767 1.40500 (4) 0.22790 0.26400 2.60457 2011 0.37022 0.19978 0.57000 0.13764 1.42500 (4) 0.22790 0.26400 2.62454 2012 0.35642 0.21358 0.57000 0.14697 1.43500 (4) 0.227897 0.26400 2.64587 Sources: (1) Tarrant County. (2) Birdville Independent School District from 2002 -2006. (3) Oily records. (4) Began using Tarrant County as source in 2006. HE Taxpayer Wal -Mart Hospital Corporation of America Venue at Home Town LTD ETAL Alliance PP2 FX3 LP Oncor Electric Delivery Co. BGPC Equestrian Ap Wp N Richland Hills Reit AP Wp Green Reit LLC Company One, LLC Five Star Ford Taxpayer Walmart Home Depot, Inc. Kimberly- ClarkfTecnol, Inc. Food Brands America, Inc. Alliance Park Portfolio, LLC Five Star Ford /Pack Properties ONCOR Electric Delivery MidStar Properties/NH Mall Meadows NRH Associates LP Haverhill Associates LP Source: Tarrant Appraisal District. CITY OF NORTH RICHLAND HILLS, TEXAS Principal Taxpayers (unaudited) Year Ended September 30, 2012 Type of business Retail Healthcare Provider Property Developer Commercial /Real Estate Utility Service Provider Real Estate Multi Family Multi Family Real Estate Automotive Dealership Year Ended September 30, 2003 Type of business Retail Retail Manufacturer Manufacturer Real Estate Automotive Dealership Utility Service Provider Real Estate Real Estate Real Estate 2011 assessed valuation" $ 64,586,924 42,733,217 27,700,000 26,214,378 26,167,878 25,000,O00 23,430,000 23,000,000 19,741,000 15,397,540 $ 293,970,937 2002 assessed valuation" $ 45,941,918 40,909,913 31,132,574 26,111,782 25,094,693 23,884,599 23,733,453 20,909,920 19,175,403 18,000,000 $ 274 894,255 Table 7 Percentage of total assessed valuation 1.79 %v 1.18 % 0.77% 0.72% 0.72% 0.69 %v 0.65 %v 0.64% 0.55 %v 0.43% 8.12% Percentage of total assessed valuation 1.63% 1.45 % 1.11% 0.93% 0.89% 0.85% 0.84% 0.74% 0.68% 0.64% 9.76% 1111 CITY OF NORTH RICHLAND HILLS, TEXAS Property Tax Levies and Collections Last Ten Fiscal Years (unaudited) Table 8 Total Collections to Date Collected within the Amount Levy $ 16,030,165 Fiscal Year of the Levy Collections Fiscal Total 99.86% Percent of in Subsequent Year tax levy Amount levy Years 2003 $ 16,056,553 $ 15,798,849 98.40% $ 231,316 2004 17,178,024 16,860,430 98.15% 291,679 2005 17,859,625 17,679,906 98.99% 154,919 2006 18,783,149 18,461,867 98.29% 294,875 2007 19,420,705 19,133,840 98.52% 255,012 2008 20,379,252 19,980,714 98.04% 353,568 2009 21,429,065 21,268,426 99.25% 95,007 2010 21,377,437 21,115,928 98.78% 182,241 2011 20,533,211 20,281,233 98.77% 100,727 2012 20,623,649 20,370,425 98.77% 233,637 Table 8 Total Collections to Date Percent of Amount Levy $ 16,030,165 99.84% 17,152,109 99.85% 17,834,825 99.86% 18,756,742 99.86% 19,388,852 99.84% 20,334,282 99.78% 21,363,433 99.69% 21,298,169 99.63% 20,381,960 99.26% 20,604,062 99.91% 103 CITY OF NORTH RICHLAND HILLS, TE Ratios of Outstanding Debt by Type Last Ten Fiscal Years (unaudited) Table 9 (dollars in thousands, except per capita) Other gov "t General Bonded Debt Total Percentage General Bonded Activities Debt Fiscal Estimated Net Taxable General Certificates of Loans general of Debt per Sales tax Year population (1) value (2) obligation bonds obligation payable bonded debt Net Taxable value capita (1) revenue bonds 2003 59,800 $ 2,815,939 $ 38,408 $ 17,287 $ $ 55,695 1.9B% $ 931 $ 8,850 2004 60,400 3,013,688 40,197 15,537 55,734 1.85% 923 7,890 2005 61,668 3,133,268 35,733 14,481 50,214 1.60% 814 7,095 2006 63,521 3,295,289 38,024 11,048 - 49,072 1.49% 773 6,270 2007 64,050 3,407,141 37,821 7,842 - 45,663 1.34% 713 5,410 2008 65,750 3,575,307 37,823 7,041 - 44,864 125% 682 4,520 2009 66,100 3,759,485 39,810 7,229 1,550 48,589 1.293' 735 3,600 2010 66.400 3,750,428 41,725 8,255 1,625 51,605 1.38% 777 2,840 2011 63,42 .0 3,602,318 41,000 9,575 1,242 51,817 1.44% 817 1,545 2012 63,420 3,618,184 64,269 33,330 840 98,439 2.72% 1,552 615 Business- Tyy Total Total (3) Total Percentage Fiscal Water & sewer General Certi #Kates of Contractual Capital business -type primary bonded debt of per capita Year revenue bonds obligation bonds obligation obligations leases activities government per capita (1) income (1) 2003 $ 2,335 $ 3,061 $ 5,161 $ - $ 164 $ 10,721 $ 75,068 $ 1,255 4.39% 2004 - 4,258 5,364 - 104 9,726 73,350 1,214 4.13% 2005 - 3,596 5,018 - 40 8,656 65,965 1,070 3.58% 2006 - 4,255 4,589 - 8,844 54,186 1;010 3.30% 2007 - 3,537 4,866 - - 8,403 59,476 929 2.94% 2008 - 2,790 6,865 - 9,655 59,038 898 2.87% 2.009 - 2,350 11,254 - 13,604 65,793 995 3.31% 2010 1,890 11,285 - - 13,175 67,420 1,015 3.40% 2011 - 1,405 12,610 - - 14,015 67,477 1,064 3.37% 2012 2,210 16,415 - - 18,625 117,679 1,856 5.95% Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. (1) See Table 13 for additional population statistics. (2) See Table 5 for additional information on net taxable value. (3) Includes general bonded debt, other governmental activities debt, and business -type activities debt. 104 CITY OF NORTH RICHLAND HILLS, TEXAS Computation of Direct and Overlapping Debt September 30, 2012 (unaudited) Jurisdiction City of North Richland Hills Birdville Independent School District Hurst-Euless-Bedford Independent School District Keller Independent School District Tarrant County Tarrant County Hospital District Tarrant County College District Total overlapping debt Total direct and overlapping debt Table 10 22,705,000 2.97% 674,339 135,636,884 $ 194,028,844 Source: First Southwest and respective entities' records. (1) Less - self- supporting debt (2) First Southwest - "Expenditures of the various taxing entities within the territory of the City are paid out of ad valorem taxes levied by such entities on properties within the City. Such entities are independent of the City and may incur borrowings to finance their expenditures. This statement of direct and estimated overlapping ad valorem tax debt ( "Tax Debt') was developed from information contained in "Texas Municipal Reports" published by the Municipal Advisory Council of Texas. Except for the amounts relating to the City, the City has not independently verified the accuracy or completeness of such information, and no person should rely upon such information as being accurate or complete. Furthermore, certain of the entities listed may have issued additional Tax Debt since the date hereof, and such entities may have programs requiring the issuance of substantial amounts of additional Tax Debt, the amount of which cannot be determined." `111.7 Percentage Amount Net bonded applicable to applicable to debt City of North City of North outstanding Richland Hills (2) Richland Hills $ 58,391,960 (1) 100.00% $ 58,391,960 213,969,754 44.47 % 95,152,350 312,938,426 0.08% 250,351 685,578,167 4.28 % 29,342,746 317,725,000 2.97% 9,436,433 26,285,000 2.97% 780,665 22,705,000 2.97% 674,339 135,636,884 $ 194,028,844 Source: First Southwest and respective entities' records. (1) Less - self- supporting debt (2) First Southwest - "Expenditures of the various taxing entities within the territory of the City are paid out of ad valorem taxes levied by such entities on properties within the City. Such entities are independent of the City and may incur borrowings to finance their expenditures. This statement of direct and estimated overlapping ad valorem tax debt ( "Tax Debt') was developed from information contained in "Texas Municipal Reports" published by the Municipal Advisory Council of Texas. Except for the amounts relating to the City, the City has not independently verified the accuracy or completeness of such information, and no person should rely upon such information as being accurate or complete. Furthermore, certain of the entities listed may have issued additional Tax Debt since the date hereof, and such entities may have programs requiring the issuance of substantial amounts of additional Tax Debt, the amount of which cannot be determined." `111.7 CITY OF NORTH RICHLAND HILLS, TEXAS Table 11 Computation of Legal Debt Margin September 30, 2012 (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 2012 was established at $.57 per $100 of assessed valuation based on 100% of appraised value. 106 CITY OF NORTH RICHLAND HILLS, TEXAS Pledged Revenue Coverage Last Ten Fiscal Years (unaudited) Table 12 (1) Includes interest and fiscal agent charges. (2) 2009 current expenditures totaling $4,090,209 found in the Combining Statement of Revenues, Expenditures, and Changes in Fund Balances for Nonmajor Governmental Funds includes a one time T1 transfer of $1.1M for the Recreation Center project. For purposes of pledged revenue coverage current expenditures have been reduced by this amount. (3) The Reserve balance is in compliance with the bond covenant as of 9/3012012. (4) Bond convenant for sales tax revenue bonds mandates sufficient fund balance to cover average debt service payments unpaid. Negative coverage indicates that fund balance reserves are being used to cover debt service requirements. The City has sufficient fund balance coverage to pay all debt service due. 107 Park and Recreation Facilities Development Sales Tax Revenue Bonds Fiscal Sales Tax Less: Current Net Revenue Debt Service Year Revenues Expenditures Available Principal Interest Total (1 ) Covera 2003 4,041,388 1,780,254 2,261,134 725,000 429,635 1,154,635 1.96 2004 4,107,934 2,064,928 2,043,006 760,000 391,045 1,151,045 1.77 2005 3,855,727 2,130, 886 1,724,&61 795,000 348,170 1,143,170 1.51 2006 4,047,737 2,411,932 1,635,806 825,000 312,553 1,137,553 1.44 2007 4,284,040 2,426,805 1,857,235 860,000 278,083 1,138,083 1.63 2008 4,410,260 2,824,3658 1,585, 892 890,000 291,953 1,181,953 1.34 2009 4,077,162 2,990,209 (2) 1,086,953 920,000 187,763 1,107,763 0.98 2010 4,211,592 3,027,159 1,184,533 960,000 157,000 1,127,000 1.05 2011 4,179,388 3,284,467 894,921 995,000 123,349 1,118,349 0.80 2012 4,241,341 5,580,061 (1,338,720) (4) 1,030,000 80,075 1,110,075 -1 (3) (1) Includes interest and fiscal agent charges. (2) 2009 current expenditures totaling $4,090,209 found in the Combining Statement of Revenues, Expenditures, and Changes in Fund Balances for Nonmajor Governmental Funds includes a one time T1 transfer of $1.1M for the Recreation Center project. For purposes of pledged revenue coverage current expenditures have been reduced by this amount. (3) The Reserve balance is in compliance with the bond covenant as of 9/3012012. (4) Bond convenant for sales tax revenue bonds mandates sufficient fund balance to cover average debt service payments unpaid. Negative coverage indicates that fund balance reserves are being used to cover debt service requirements. The City has sufficient fund balance coverage to pay all debt service due. 107 CITY OF NORTH RICHLAND HILLS, TEXAS Demographic Statistics Last Ten Fiscal Years (unaudited) Table 13 Sources: (1) Birdville Independent School District (2) North Central Texas Council of Governments and City estimates (3) Bureau of Census, Department of Commerce (1998-2002) (4) Texas Employment Commission (5) Haltom Richland Chamber of Commerce (1998 -2007) (6) Includes North Richland Hills students only (7) ESRI Business Information Solutions, Inc (2003 -2012) (8) Starting in 2003, reported as a percentage of residents with a high school diploma or greater (9) Population was adjusted based on census. Im School Fiscal Estimated Median Per capita Median Education enrollment Unemployment Year population (2) income (3) (7) income (3) (7) age (3) (7) level (5) (8) (1) (6) rate (4) 2003 59,800 61,442 28,616 33.5 90% 10,562 4.1 2004 60,400 63,146 29,393 35.3 90% 10,651 4.0 2005 61,668 65,421 29,881 35.6 90% 10,873 4.4 2006 63,521 66,215 30,641 35.8 90% 10,827 4.1 2007 64,050 67,951 31,558 35.9 90% 10,724 3.8 2008 65,750 69,669 31,278 35.6 91% (7) 10,972 4.7 2009 66,100 67,850 30,084 35.6 91% (7) 11,179 5.5 2010 66,400 68,082 29,882 35.6 91% (7) 11,431 6.9 2011 63,420 (9) 63,594 31,615 38 91% (7) 11,615 7.3 2012 63,420 78,911 31,175 38.2 91% (7) 10,843 63 Sources: (1) Birdville Independent School District (2) North Central Texas Council of Governments and City estimates (3) Bureau of Census, Department of Commerce (1998-2002) (4) Texas Employment Commission (5) Haltom Richland Chamber of Commerce (1998 -2007) (6) Includes North Richland Hills students only (7) ESRI Business Information Solutions, Inc (2003 -2012) (8) Starting in 2003, reported as a percentage of residents with a high school diploma or greater (9) Population was adjusted based on census. Im CITY OF NORTH RICHLAND HILLS, TEXAS Table 14 Principal Employers (unaudited) Year Ended September 30, 2012 Percentage of total City Employer Employees Rank employment* Santander Consumer USA, Inc. 1,343 1 3.92% North Hills Hospital 818 2 2.38% Wal -Mart Supercenters 752 3 2.20% Birdville ISD' 732 4 2.14% HealthMarkets 556 5 1.62% City of North Richland Hills 534 6 1.56% Tarrant County College - NE Campus 449 7 1.31% Tyson Prepared Foods 425 8 1.24% Silverleaf Resorts 386 9 1.13% Con -Way Freight, Inc. 290 10 0.85% 6,285 18.35 % Year Ended September 30, 2003 Percentage of total City Employer Employees Rank employment* UICI - The Insurance Center 1,400 1 6.09 % Birdville ISD 1,059 2 4.60% North Hills Hospital 767 3 3.33% Triad Financial Corporation 520 4 2.26 % City of North Richland Hills 510 5 2.22% TCC - NE Campus 485 6 2.11% Kimberly ClarkfTecnol Division 450 7 1.96% KPR Foods/Tyson 427 8 1.86 %© Wal -Mart Supercenter 400 9 1.74% Silverleaf Resorts 328 10 1.43% 6,346 27.59% Number denotes employees working in schools in the City of NRH 2 Split with Hurst 3 Actual number of employees employed at time of reporting * Source: City records 109 This page intentionally left blank. 110 CITY OF NORTH RICHLAND HILLS, TEXAS Full -time Equivalent Municipal Employees by FunctionlProgram Last Ten Fiscal Years (unaudited) Fiscal Year 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 General government Administration 4.70 4.70 3.70 4.75 5.25 5.25 5.25 5.25 5.25 5.75 Public information 4.00 4.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Judicial 15.00 15.00 15.50 15.50 16,50 14.00 14.00 14.00 14.00 14,00 Finance 23.00 23.00 23.00 23.50 23.50 23.50 24.50 24.50 24.50 24.50 Nondepartmental 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Human resources 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Planning and inspections 8.30 8.30 9.30 11.30 11.30 12.30 11.30 11.30 11.50 15.50 Neighborhood services 18.75 18.75 18.75 19.75 18.75 18.75 18,66 18.66 18.66 14.66 Budget and research 3.00 3.00 3.00 3,00 3.00 3.00 3.00 3.00 3.00 3.00 Public relations 3.75 3.75 6.75 6.75 6.75 7.19 7.19 7.19 7.19 7.19 Total general government 82.50 82.50 87.00 91.55 92.05 90.99 90.90 90.90 91.10 91.60 Public safety Police 186.88 (1) 165.20 164.22 165.22 164.65 159.65 159,65 159.39 161.39 161.39 Fire 90.00 88.00 91.00 91.00 91.00 92.00 92.00 92.00 87.00 87.00 Total public safety 276.88 253.20 255.22 256.22 255.65 251.65 251.65 251.39 248.39 248.39 Culture and recreation Parks and recreation 145.55 121.53 118.76 118,90 120.22 120.30 114.94 115.10 116,10 116.19 Library 27.11 28.58 28,16 28.16 28.16 23.33 23.33 23.33 23.33 23.33 Economic development 3,00 3.00 3.00 3.00 3.00 3.00 3.00 3,00 3.00 3.00 Total culture and recreation 175.66 153.11 149.92 150.06 151.38 146.63 141.27 141.43 142.43 142.52 Public works 77.68 77.68 78.68 79.68 80.18 79.18 76.18 76.18 79.98 80.48 Internal services Building services 16.23 16.23 16.36 16.36 15.86 14.23 14.23 14.23 14.23 14.23 Equipment services 13.00 13.00 13.50 11.65 11.65 11.65 11.65 11.65 11.65 11.65 Self- insurance 5.10 5.10 5.10 6.00 6.00 6.00 6.00 6.00 6.00 6.00 Information services 11.00 11.00 11.00 12.00 12.00 12.00 12.00 12.00 12.00 13.00 Total internal services 45.33 45.33 45.96 701 45.51 43.88 - 73 - 8 388 43.88 43.88 44.88 Total full -time equivalents 658.05 611.82 616.77 623.52 624.77 612.33 603.88 603.78 605,78 607.87 Table 15 Source: City operating budget (1) Consolidated services with Haltom City, City of Richland Hills and City of Watauga for Communcation & Dentention Centers 111 CITY OF NORTH RICHLAND HILLS, TEXAS Operating Indicators by FundionlProgram Last Ten Fiscal Years (unaudited) Source: City records (1) Unavailable data is reflected as "-'on the report. (2) Excludes traffic violations (3) Course dosed from July 1 st 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 closed 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. (10) Reported from the Nation at Incident Based Reporting System annual report- (11 ) Decline in reponse ti me is due to in -town traffic increasing because of the Hwy 820 expansion causing a longer drive time (12) Reinspections are down due to corrected violations_ (13) Inspection numbers unavailable for the year due to changes in the computer record management system and procedures Table 16 tfilra Fiscal Year 2012 2011 2010 2009 General government Planning and Inspections Construction Commercial units 91 24 47 41 Commercial value $ 7,533,480 $ 3,489,824 $ 4,578,000 $ 3,790,657 Residential units 168 122 66 55 Residential value $ 42,138,527 $ 27,218,868 $ 14,289,559 $ 13,295,377 Public safety Police Law violations (2) 3,463 3,574 (1 D) 4,071 4,270 Part one offenses 1,791 2,075 (1 D) 3,452 3,190 Traffic violations 22,155 20,733 24,747 25,111 Calls for service 115,644 137,243 137,645 (9) 123,877 Case clearance % 26% 42% 40% 41% Fire Total responses 7,{364 6,850 6,555 6,551 Fire responses 2,235 1,762 1,371 1,617 EMS responses 4,829 5,088 5,184 4,934 % responses < 5 minutes 70% 51%(11) 73% 73% Total inspections - (13) 2,005 (12) 2,169 2,308 Culture and recreation Parks and recreation Water park admissions 272,336 270,845 242,554 231,379 Golf rounds played 50,524 51,264 47,594 54,373 Library Number of volumes 206,840 200,982 196,042 192,044 Annual circulation 947,883 840,667 828,889 764,195 Annual loans per capita 14.95 1326 12.48 11.56 Public works Water Avg daily consumption (4) 1,306,524 1,521,220 1,205,104 1,213,697 Peak daily consumption (4) 2,938,102 3,091,043 2,627,674 2,751,337 Streets Street overlay - miles 4 6 4 5 Concrete pavement repair - sq. ft_ 5,322 9,372 16,163 12,655 Pothole repair - sq. ft_ 4,577 3,974 6,786 4,303 Street cut - sq. ft. 176,844 162,577 193,400 162,446 Sign fabrication 852 935 953 1,119 Source: City records (1) Unavailable data is reflected as "-'on the report. (2) Excludes traffic violations (3) Course dosed from July 1 st 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 closed 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. (10) Reported from the Nation at Incident Based Reporting System annual report- (11 ) Decline in reponse ti me is due to in -town traffic increasing because of the Hwy 820 expansion causing a longer drive time (12) Reinspections are down due to corrected violations_ (13) Inspection numbers unavailable for the year due to changes in the computer record management system and procedures Table 16 tfilra Table 16 2008 2007 2006 2005 2004 2003 51 56 40 29 47 59 $ 7,907,730 $ 15,083,593 $ 53,708,815 $ 14,139,519 $ 27,210,050 $ 14,309,787 116 235 382 420 310 292 $ 31,498,499 $ 54,190,911 $ 79,332,989 $ 77,631,113 $ 53,937,035 $ 47,548,847 4,289 3,403 4,694 4,767 3,764 4,141 3,458 3,216 3,318 2,911 3,312 3,363 28,899 20,010 22,124 22,810 21,317 28,729 124,212 103,137 107,096 (5) 114,058 116,877 118,427 41% 36% 37% 37% 37% 39% 6,929 6,749 5,770 5,570 6,992 6,824 1,843 1,651 1,633 1,438 1,696 1,682 5,086 5,G98 4,137 4,132 5,296 5,142 72% 72% 73% 73% 72% 74% 2,412 2,007 2,D33 1,946 1,02D 1,169 233,654 248,205 260,869 250,682 213,285 228,992 56,192 48,838 39,603 (3) 50,187 52,176 50,368 180,737 177,270 179,366 176,719 170,849 162,020 606,639 (7) {E 660,627 697,013 696,954 723,206 731,499 923 (7) 1031 1097 1130 1197 847 1,317,622 1,178,439 1,397,254 1,264,837 1,131,712 1,190,464 2,963,770 2,449,372 2,701,738 2,787,834 2,400,668 2,976,738 2 (6) 8 9 11 8 8 4,404 (6) 14,694 9,485 5,474 1,779 4,471 5,499 (6) 10,48D 8,738 12,969 15,282 11,322 121,809 (6) 156,141 179,703 151,706 231,462 210,232 1,455 2,04D 1,795 1,556 2,389 3,331 113 CITY OF NORTH RICHLAND HILLS, TEXAS Capital Asset Statistics by Function /Program Last Ten Fiscal Years (unaudited) Fiscal Year 2012 2011 2010 Public safety Police Stations 1 1 1 Fire Stations 4 4 4 Fire hydrants 2,127 2,125 2,139 Culture and recreation Parks and recreation Parks 33 33 (6) 32 Park acreage 709 709 (6) 708 Playgrounds 20 20 20 Trails - miles 21 21 (7) 20 Golf Courses 1 1 1 Recreations centers 1 1 1 Athletic fields 53 53 53 Senior centers 1 (8) 2 2 Library Libraries 1 1 1 Public works Water mains - miles 351 346 356 Water connections 20,792 20,522 20,420 Wastewater lines - miles 290 288 288 Wastewater connections 19,469 19,240 19,141 Storm drain - miles 139 139 139 Streets - miles 238 238 237 Street lights 2,545 2 „540 2,531 Source: City records Unavailable data is reflected as ` on the report. (1) Subtracted Thomas Acres (BISD property no longer maintaining) (2) Oncor performed a city -wide audit of streetlights in 2006. Subsequent years” counts are based on Oncor billings. (3) Acquisition of easements for Little Bear Creek trail. (4) Department implemented a complete inventory system in 2009 that will provide more accurate counts. (5) Indicates active accounts. Source: NRH Utility Customer Service Department. (6) Adjusted to include Stormy Plaza completed in 2010. (7) Added Randy Moresi Trail in 2011. (8) New Senior Center in NRH Centre combined /closed Dan Echols and Bursey Road Senior Citizen Centers Table 17 2009 1 4 2,100 (4) 32 708 (3) 20 20 1 1 53 2 1 341 (4) 20,302 285 (4) 19,068 (5) 139 235 2.525 114 Table 17 2008 2007 2006 2005 2004 2003 1 1 1 1 1 1 4 4 4 4 4 4 2,119 2,077 1,900 1,850 1,840 1,830 32 32 31 27 25 24 706 706 (1) 741 720 720 701 20 20 21 17 18 18 20 20 15 12 11 7 1 1 1 1 1 1 1 1 1 1 1 1 53 53 (1) 59 58 57 57 2 2 2 2 2 2 1 1 1 1 1 1 356 354 342 341 341 334 20,282 20,516 19,784 19,356 18,977 18,611 245 244 234 233 233 229 19,053 19,350 18,618 18,257 17,898 17,588 138 137 135 133 133 131 234 232 227 225 221 214 2,518 2,513 2,431 (2) 2,062 2,023 2,012 115 This page intentionally left blank. 116 M RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. F.2 Approval of Amendments to the TIF #2 Bylaws, Changing the Month of Annual Meetings from November to April - Resolution No. 2013- 411 Presenter: Larry Koonce, Finance Director Summarv: Staff is requesting that City Council consider a resolution amending the Bylaws of TIF District No. 2 changing the month of annual meetings from November to April. This will allow both Board meetings of TIF #1 (whose board meeting is required in April each year) and TIF #2, which have some board members in common, to be held on the same day in April each year. General Description: When the TIF Districts were established, annual board meetings were required. TIF No. 1 required a board meeting in April, and TIF No. 2 required a board meeting in November. An April meeting is preferable for both boards since both boards have members in common and can meet on the same day back to back. The resolution presented for Council consideration will amend the TIF 2 bylaws changing the meeting to April. If approved, The TIF 2 Board will adopt this resolution at a meeting in April 2013. Recommendation: Approve Resolution No. 2013 -011 amending the Bylaws of TIF District No. 2 changing the month of annual meetings from November to April. RH RESOLUTION NO. 2013 -011 A RESOLUTION AMENDING THE BYLAWS OF REINVESTMENT ZONE NUMBER 2, CITY OF NORTH RICHLAND HILLS; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, pursuant to the provisions of the Tax Increment Financing Act., V.T.C.A., Tax Code, Chapter 311, as amended (the "Act "), and pursuant to Ordinance No. 2420, adopted on October 25, 1999 by the City Council (the "Council ") of the City of North Richland Hills, Texas (the "City "), the City created a reinvestment zone known as Reinvestment Zone Number 2. City of North Richland Hills (the "Zone "); and WHEREAS, on November 1, 1999, the Board of Directors of the Zone (the "Board ") adopted and approved the bylaws of the Zone (the "Bylaws "); and WHEREAS, Article IV, Section 2 of the Bylaws permits the Bylaws to be amended at any time by the Council, after consultation with the Board, by adopting an amendment by resolution of the Council and delivering the Bylaws to the Secretary of the Board; and WHEREAS, the Council has consulted with the Board and hereby finds and determines that the Bylaws should be amended as set forth herein; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: SECTION 1. Bvlaws Amendment Approval. The last sentence of Article II, Section 3 of the Bylaws shall be and is hereby amended in its entirety to read as follows "There shall be at least one Regular Meeting held each year in the month of April." SECTION 2. Bvlaws Remain Otherwise Unchanged. Aside from the change to the above - referenced section of the Bylaws approved by this Resolution as aforestated, all other terms and conditions of the Bylaws shall remain unchanged and shall continue to be in full force and effect. SECTION 3. Severabilitu. If any provision of this Resolution or the application thereof to any circumstance shall be held to be invalid, the remainder of this Resolution and the application thereof to other circumstances shall nevertheless be valid, and the Council hereby declares that this Resolution would have been enacted without such invalid provision. SECTION 4. Incorporation of Findings and Determinations. The findings and determinations of the Council contained in the preamble hereof are hereby incorporated by reference and made a part of this Resolution for all purposes as if the same were restated in full in this Section. SECTION 5. Public Meeting. It is officially found, determined and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended. SECTION 6. Effective Date. This Resolution shall be in full force and effect from and after its passage on the date shown below and it is so resolved. PASSED AND APPROVED this the 25th day of March, 2013. ►,r011 =916 Patricia Hutson, City Secretary 1,1 »: �] ►1 �l �1_l±'� �fl �i]:a i'i I_1' 11111 =15HUl11 h Viii George A. Staples, City Attorney Oscar Trevino, Mayor Larry Koonce, Director of Finance M RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. F.3 Approval of Continued Participation in Tarrant County's HOME Investment Partnership Program - Resolution No. 2013 -012 Presenter: Kristin Weegar, Assistant to the City Manager Summarv: The HOME Program was created by the National Affordable Housing Act of 1990 (NAHA) and is intended to provide decent affordable housing to lower- income households, expand the capacity of nonprofit housing providers, strengthen the ability of state and local government to provide housing and leverage private - sector participation. To participate in this program the City must commit to the required 30% match on an annual basis. The HOME program for North Richland Hills is administered by Tarrant County. It is Staff's recommendation to allocate $36,000 toward the 30% match requirement for 2013. General Description: The HOME Program was created by the National Affordable (Housing Act of 1990 (NAHA) and is intended to provide decent affordable housing to lower- income households, expand the capacity of nonprofit housing providers, strengthen the ability of state and local government to provide housing and leverage private - sector participation. In 2011, City Council approved Resolution No. 2011 -024 which allowed for automatic renewal of the HOME Investment Partnership Grant for three years, running through 2012, 2013 and 2014. The HOME Investment Partnership Grant requires municipalities to provide 30% matching funds. We must specify in a resolution the amount of matching funds that will be appropriated to the program. The maximum amount of HOME Funds a municipality can request is $200,000. The approval of this resolution will allow the City of North Richland Hills to request $120,000 in HOME Funds for 2013 and will appropriate 30% in matching funds or $36,000. Tarrant County reported that the average cost per project covered under the HOME Program is $24,000. With that, the $120,000 would cover improvements to approximately five (5) homes. The matching funds will be paid out of the existing Neighborhood Initiative Program funding. Recommendation: Approve Resolution No. 2013 -012 to continue the participation in Tarrant County's HOME Investment Partnership Program with $36,000 dedicated to the 30% match requirement. M RH RESOLUTION NO. 2013 -012 AGREEING TO MEET ALL MATCH CONTRIBUTION REQUIREMENTS FOR THE EXPENDITURES UNDER THE TARRANT COUNTY HOME INVESTMENT PARTNERSHIPS PROGRAM FOR PROGRAM YEAR 2013 WHEREAS, the HOME Program was created by the National Affordable Housing Act of 1990 (NAHA) and is intended to provide decent affordable housing to lower- income households; expand the capacity of nonprofit housing providers; strengthen the ability of state and local government to provide housing, and; leverage private- sector participation; and WHEREAS, Tarrant County is a Participating Jurisdiction under the HOME Investment Partnerships Program in accordance with § 92.105; and WHEREAS, the City of North Richland Hills is a member of the Tarrant County Urban County Community Development/HOME Consortium and is eligible to participate in the HOME program; and WHEREAS, the City of North Richland Hills has requested $120,000 in HOME funding to be expended on HOME eligible activities within the city's jurisdiction and has agreed to meet all applicable matching contribution requirements in accordance with §92.218; §92.219; and §92.220. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: SECTION 1. THAT The City of North Richland Hills hereby agrees to commit $36,000 in match contribution to affordable housing for all activities undertaken through the HOME program. PASSED AND APPROVED this the 25th day of March, 2013. ] 11WKS]M►ICA11:1N[91:IW_►►1Nl:III ATTEST: Oscar Trevino, Mayor Patricia Hutson, City Secretary r,1:21,:t91►►=1 IF :1 11911 to] N k►, W :► ► I •l I =10 I I rip George A. Staples, City Attorney M RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. F.4 Certification of Unopposed Candidates, Cancelling Election and Declaring Unopposed Candidates Elected to Office - Ordinance No. 3242 Presenter: Patricia Hutson, City Secretary Summarv: At the conclusion of the filing deadline for the May 11 City Council election, all candidates were unopposed. State law provides that City Council may pass an ordinance to cancel the election and declare the unopposed candidates elected to office. General Description: The Texas Election Code provides for the cancellation of an election when each candidate whose name is to appear on a ballot is unopposed. The filing deadline for a place on the ballot for the May 11, 2013 City Council Election was March 1, 2013. At the conclusion of the filing deadline, the candidates who filed for a place on the ballot were unopposed. The law states that the authority responsible for preparing the official ballot (City Secretary) shall certify in writing and deliver to the governing body a certification of unopposed status as soon as possible after the statutory filing deadlines. Attached is the certification of unopposed status certifying that the following persons have filed for place on the May 11, 2013 ballot, each candidate is unopposed, and no write -in candidates have filed for a place on a list of write -in candidates. Council Place 1 Tito Rodriguez Council Place 3 Tom Lombard Council 'Place 5 David Whitson Council Place 7 Tim Welch On receipt of the certification from the City Secretary, the law states that the City Council by ordinance may declare unopposed candidates elected to office and an election is not held. Ordinance No. 3242 declares the above candidates elected to office and cancels the May 11 election. In accordance with State law, the newly elected officers will be sworn in after the May 11 election date. Recommendation: To accept the certificate of unopposed status and to approve Ordinance No. 3242. N RH CITY OF NORTH RICHLAND HILLS NOTICE OF CANCELLATION OF GENERAL ELECTION ORDINANCE NO. 3242 AN ORDINANCE CANCELLING THE MAY 11, 2013, GENERAL ELECTION OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, AND DECLARING EACH UNOPPOSED CANDIDATE ELECTED TO OFFICE. WHEREAS, the City of 'North Richland Hills, Texas is a home rule municipality located in Tarrant County, operating pursuant to the enabling legislation of the State of Texas; and WHEREAS, in accordance with law a general election has been ordered for May 11, 2013, for the purpose of electing council members to serve on the city council in the City of North Richland Hills; and WHEREAS, the city secretary has certified in writing that each candidate on the ballot is unopposed for election to office; and WHEREAS, the filing deadlines for placement on the ballot and declaration of write -in candidacy have passed; and WHEREAS, in these circumstances Section 2.053, Texas Election Code authorizes a governing body to declare each unopposed candidate elected to office and cancel the election; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: Section 1: THAT the following candidates, who are unopposed in the May 11, 2013, election, are hereby declared elected to office, and shall be issued a certificate of election: PLACE 1: Tito Rodriguez. PLACE 3: Tom Lombard WA[ T] r t i 7► 0! a C� i 1 Section 2: The city secretary is directed to post a copy of this ordinance at each designated polling place on May 11, 2013. AND IT IS SO ORDAINED. PASSED AND APPROVED on this the 25th day of March, 2013. ATTEST: Patricia Hutson, City Secretary 1,1 »: +] ►1 �I �7_[�� +l ��]:1 iii I_1'►11l41 xcliI II Iva . 011Vigo ]az191A9:10IN:1W =1►1I1:I14I&i Oscar Trevino, Mayor George A. Staples, City Attorney CERTIFICATION OF CITY SECRETARY I, Patricia Hutson, City Secretary of the City of North Richland Hills, Texas, and the authority responsible for having the official ballot prepared for the May 11, 2013, do hereby certify that the following candidates are unopposed for election to the office of Council Places 1, 3, 5 and 7; and that no write -in candidates have filed to be placed on the list of write -in candidates. PLACE 1: Tito Rodriguez A[ffl:&�C•Tii R•Tii1+�T* UWA[�] •' FL9Cli1iYft •T PLACE 7: Tim. Welch Patricia Hutson, City Secretary Date: M RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. F.5 Appointments to Library Board - Place 3 & Alternate Presenter: Patricia Hutson, City Secretary Summarv: The City Council is being asked to approve Mayor Pro Tem Lombard's nomination of Kathy Antropik to the Place 3 position and Mayor Trevino's nomination of Holly Mitchell as Alternate to the Library Board. General Description: Ms. Mary Shilcutt who has been serving in the Place 3 position on the Library Board has submitted her resignation from the Board. The Code of Ordinances provides that the City Councilmember who holds the corresponding council place will make appointments to this Board. Mayor Pro Tern Lombard is recommending that Kathy Antropik, who is currently serving as an alternate, be appointed to the Place 3 position. Ms. Antropik has served on this board in the alternate position since duly 2002. Mayor Trevino is recommending that Holly Mitchell be appointed to replace Ms. Antropik as the alternate. Recommendation: To consider the appointment of Kathy Antropik to the Place 3 position and Holly Mitchell to the Alternate position on the Library Board. M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. F.6 Authorize the City Manager to Execute a Professional Services Contract with Brinkley Sargent Architects for the Updating of the NRH20 Family Waterpark's Master Plan Presenter: Chris Swartz, NRH20 Park Manager Summarv: City Council is being asked to authorize the City Manager to Execute a Professional Services Contract with Brinkley Sargent Architects in the amount of $96,770 for Professional Services related to updating the NRH20 Master Plan for development. This approved project (WP1304) will address future expansion and development, replacement of original existing attractions, theming, signage, parking and other issues as identified. It will guide park development over the next several years potentially to final build out. The consulting team consists of Brinkley Sargent Architects, William Haralson and Associates, Counsilman Hunsaker and Associates and MESA Design. This group has extensive experience working together as a team and all firms have completed projects for the City of North Richland Hills. In addition, with the exception of MESA Design, all firms have done work at NRH20 Family Waterpark. General Description: The City issued a Request for Qualifications (RFQ 13 -001) due October 18, 2012. The requirements of this RFQ are unique due to the fact that the Long Range Plan will guide the park's expansion into the undeveloped areas, and it will guide the ultimate build out of NRH20. The plan will include a comprehensive assessment of the existing attractions, themes within the park, signage, buildings, parking lot and circulation of pedestrians and vehicles. Due to these unique requirements, the qualified team of professionals will be comprised of, but not limited to, individuals who possess expertise in Architecture, Landscape Architecture, amusement park design, water park design, park planning, aquatic engineering, business development and ADA access. Proposals were received from Water Technology, Inc., Dunaway Associates and Brinkley Sargent Architects. Per City policy, an evaluation committee comprised of Antonio Evangelista, Iron Horse General Manager, Mark Mills, Budget Director, Don Wertzberger, Municipal Complex Project Manager, Bill Thornton, Assistant Director of Parks and Recreation and Chris Swartz, NRH20 General Manager, met to evaluate the three firms. After evaluating the proposals, all three firms were invited to participate in the formal interview process. After the interview process had concluded, the committee was of the unanimous decision that a contract should be sought with the team led by Brinkley Sargent Architects. Brinkley Sargent demonstrated a fresh project approach and well established collaborative process. Using a multi- tiered approach to production of the final product, it included visioning, business assessment and facility assessment. Brinkley's collaborative team is well diversified with equal emphasis of project ownership by the team members and The City of North Richland Hills. Over the span of several years, Brinkley Sargent Architects (BSA) has completed multiple projects for the City. In addition to these projects, BSA was also the lead designers for NRH20 Family Waterpark. Haralson and Associates has worked on waterpark projects on multiple occasions both for the original project and also as lead consultant for the 2005 Strategic Plan update. Haralson has completed economic feasibility and demographic research projects for clients around the world and is considered one of the pioneers of this discipline. Counsilman Hunsaker and Associates is very well regarded throughout the aquatics industry and partnered with Brinkley on the original NRH20 project. In addition to the original project, they also worked on the highly regarded Splashatory project which opened at NRH in 2004. MESA Design successfully completed the design of the Cotton Belt Trail and Walkers Creek Park, immediately adjacent to NRH20. MESA Design is also providing Landscape Architectural services in partnership with BSA for the new City Hall. Recommendation: Authorize the City Manager to execute a professional services contract with Brinkley Sargent Architects for professional services related to updating the NRH20 Master Plan for development. M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. G.0 EXECUTIVE SESSION ITEMS M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. G.1 Action on Any Item discussed in Executive Session Listed on Work Session Agenda M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. H.0 INFORMATION AND REPORTS M RH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject: Agenda Item No. H.1 Announcements - Councilman Rodriguez Announcements Come join us for the groundbreaking of the new NRH City Hall on April 5th at 3:00 pm. The location of the event is at the former North Hills Mall Site next to the Calloway Creek Medical Office Building. You may access the site from Boulevard 26. Everyone is welcome and it is free to attend. The North Richland Hills Youth Advisory Committee is hosting a Dog Show from 1 p.m. to 3 p.m. on Sunday, April 7, 2013 at Tipps Canine Hollow Dog Park located at 7804 Davis Boulevard. Categories include Best Costume, Best Small Dog, Best Big Dog, Best Trick, Cutest Puppy, People's Choice and Best in Show. Participants can register in advance, or on site from 1 p.m. to 2 p.m. the day of the show. The entry fee is $5 per event or $10 for 3 events. All proceeds benefit the NRH Animal Adoption & Rescue Center. The Texas Coalition for Animal Protection will be offering low cost vaccines at the event. For more information call 817 -427 -6015. On Saturday, April 13, 2013 residents can get rid of unwanted bulky items during the annual Spring Community Cleanup. Items can be dropped off from 9 a.m. to 1 p.m. at the Tarrant County College- Northeast. Campus, 828 Harwood Road (Parking 'Lot E.1 by the tennis courts). Proof of residency (driver's license or water bill) must be presented. Residents may get rid of brush, furniture, stoves, washers, dryers, dishwashers, containerized bricks, rocks or concrete and other bulky items. Goodwill Industries will be on site to collect donations. For more details, please call 817427 -6663. Kudos Korner Every Council Meeting, we spotlight our employees for the great things they do. Tim Horvath, Planning and Development — An email was received thanking Tim for all his assistance and guidance in getting the requirements of their new home met properly and final inspection received. He is so professional and such a wonderful asset to the city as well as the community. The couple truly appreciated everything he did for them. M KH COUNCIL MEMORANDUM From: The Office of the City Manager Date: 3 -25 -2013 Subject Agenda Item No. H.2 Adjournment