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Home My WebLink AboutCC 2014-02-24 AgendasCITY OF NORTH RICHLAND HILLS CITY COUNCIL WORK SESSION AGENDA NORTH RICHLAND HILLS CITY COUNCIL WORKROOM 7301 NORTHEAST LOOP 820 NORTH RICHLAND HILLS, TEXAS Monday, February 24, 2014 6:00 P.M. A.0 Discuss Items from Regular City Council Meeting A.1 Fire Department 2013 Annual Report (10 Minutes) A.2 Annual Racial Profiling Report (5 Minutes) A.3 Police Department 2013 Annual Report (15 Minutes) B.0 EXECUTIVE SESSION - The City Council may enter into closed Executive Session to discuss the following as authorized by Chapter 551, Texas Government Code B.1 Executive Session: Pursuant to Section 551.071 Texas Government Code for consultation with attorney to seek advice about pending or threatened litigation or a settlement offer C.0 Adjournment rartifiratinn 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 February 21, 2014 at W. a.m. 1 is ant 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 — February 24, 2014 Page 1 of 4 CITY OF NORTH RICHLAND HILLS CITY COUNCIL AGENDA CITY HALL COUNCIL CHAMBERS 7301 NORTHEAST LOOP 820 NORTH RICHLAND HILLS, TEXAS Monday, February 24, 2014 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: u City Hall on the day of the meeting Additionally, the agenda packet is available for download from the City's web site at www.nrhtx.com after 10 a.m. the day of every regularly scheduled Council meeting. A.0 Call to Order - Mayor Trevino A.1 Invocation - Councilman Barth A.2 Pledge - Councilman Barth A.3 Special Presentation(s) and Recognition(s) No items for this category. 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 — February 24, 2014 Page 2 of 4 B.1 Approval of Minutes of February 10, 2014 City Council Meeting B.2 Award of RFB NO. 14-014 to VMC Landscape Services, LP in the Amount of $340,218 for General Parks Mowing Services B.3 Award of the Construction Materials Testing Contract for the New City Hall Project B.4 Award RFB 2014 -003 for Electrical and Lighting Services to Cable Electric as the Primary contractor and Martex Electric the Secondary contractor C.0 PUBLIC HEARINGS C.1 Conduct a Public Hearing and Approve the 40th Year Community Development Block Grant Program - Resolution No. 2014 -005 C.2 ZC 2014 -04 Public Hearing and Consideration of a request by the City of North Richland Hills to apply the new Freeway Corridor Overlay District to all properties which adjoin or are located within 200 feet of the ultimate right -of -way for Northeast Loop 820 (IH -820) and Airport Freeway (SH 121/SH 183), and are not planned for single - family residential, parks /open space, stormwater drainage easement use or transit oriented development (TOD) as shown on the City's Comprehensive Land Use Plan - Ordinance No. 3299 D.0 PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. No items for this category. E.0 PUBLIC WORKS E.1 Award RFB #14 -009 to Dake Construction in the amount of $104,161 for the UT1304 Pump and Motor Replacements Project F.0 GENERAL ITEMS F.1 Nomination for State Enterprise Project Designation for Tyson Prepared Foods — Resolution No. 2014 -008 F.2 Approval of Continued Participation in Tarrant County's HOME Investment Partnership Program - Resolution No. 2014 -006 F.3 Approve Resolution to Authorize Investment Officers - Resolution No. 2014 -004 F.4 Presentation of Fiscal Year 2013 Audited Financial Report City Council Agenda — February 24, 2014 Page 3 of 4 a F.5 Amending Sections 18 -191 and 18 -277 of the North Richland Hills Code of Ordinances Regulating Food and Food Service Establishments - Ordinance No. 3298 F.6 Consider Approval of Oil, Gas and Mineral Lease Amendment to the TCCD South Unit 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 Turnage 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 February 21, 2014 at 12 a.m. A i t nt CI y 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 — February 24, 2014 Page 4 of 4 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, February 24, 2014 6:00 P.M. A.0 Discuss Items from Regular City Council Meetinq A.1 Fire Department 2013 Annual Report (10 Minutes) A.2 Annual Racial Profiling Report (5 Minutes) A.3 Police Department 2013 Annual Report (15 Minutes) B.0 EXECUTIVE SESSION - The City Council may enter into closed Executive Session to discuss the following as authorized by Chapter 551, Texas Government Code B.1 Executive Session: Pursuant to Section 551.071 Texas Government Code for consultation with attorney to seek advice about pending or threatened litigation or a settlement offer C.0 Adjournment 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. A.0 Discuss Items from Regular City Council Meeting 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. A.1 Fire Department 2013 Annual Report (10 Minutes) Presenter: Stan Tinney, Fire Chief Summary: The North Richland Hills Fire - Rescue Annual Report for 2013 provides a snapshot of the Fire Department's activity during the calendar year. It shows a variety of activity measurements indicating the efforts of the dedicated Fire Department employees. General Description: The men and women of North Richland Hills Fire - Rescue once again did an outstanding job delivering quality public education, improving public safety through proactive fire prevention, maintaining the highest level of personnel competency through quality training and responding to the 7,189 calls for service from our citizens, visitors and neighbors in 2013. The following report summarizes key elements of the past year and will provide insight into our strengths, weaknesses and areas for opportunities. Calls for service in 2013 increased slightly with a portion of the increase contributable to an increase in "Automatic" or "Mutual" aid between North Richland Hills, Richland Hills, Haltom City and Watauga. This is primarily the result of dispatching from a combined communications center and all of the fire departments' commitment to service first, boundaries second. 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. A.2 Annual Racial Profiling Report (5 Minutes) Presenter: Jimmy Perdue, Director of Public Safety Summary: The Police Department hired Alex del Carmen, PH.D., of Del Carmen Consulting to analyze racial profiling data collected by the Police Department during calendar year 2013. Dr. del Carmen concluded that the North Richland Hills Police Department has complied with the Texas Racial Profiling Law (SB1074). General Description: The 77 Regular Session of the Texas Legislature passed Senate gill 1074, an act relating to the prevention of racial profiling by certain peace officers. This law specifically prohibited racial profiling by peace officers in Texas. This law also added, among other things, requirements for the training of peace officers. In addition, this law added Section 2.132 to the Texas Code of Criminal Procedure. This statute requires police departments to adopt a policy on racial profiling, which we have done. The North Richland Hills Police Department provided the required training to all its members before the statutory deadline of September 1, 2003. Most Patrol Section officers received this training before January 1, 2002 when key portions of the statute took effect. The Police Department continues to train new officers. The required policy on racial profiling must include a report to the governing body of each county or municipality served by the agency. The annual report must contain, "information relating to traffic stops in which a citation is issued and to arrests resulting from those traffic stops, including information relating to: a) the race or ethnicity of the individual detained; and b) whether a search was conducted and, if so, whether the person detained consented to the search." If the Police Department did not have video - recording equipment in all patrol cars and audio - recording devices for motorcycle officers, the required data collection and analysis would be much more extensive. It was reported to Dr. del Carmen by the Police Department that during calendar year 2013, no racial profiling complaints were received. The analysis of the 12 -year traffic - related contact data suggested that the North Richland Hills Police Department has been, for the most part, consistent in the racial /ethnic composition of motorists it comes in contact with during a given year. The consistency of contacts for the past 12 years is in place despite the fact the city demographics may have changed, thus, increasing the number of subjects likely to come in contact with the police. Comparison of Four -Year Traffic and Motor Vehicle - Related Search Information I-I I-I u - - --1 21:j -I I-I RacelEthnicity* Motor Vehicle - Related Searches in percent a es 10 10 11 12 13 Caucasian 74 74 60 67 African 15 12 17 16 Hispanic 11 11 21 16 Asian .4 2 1 .9 Native American .2 0 0 0 Middle Eastern 0 .5 .3 .3 Other 0 0 0 0 Total 1 100 ** 1 100 ** 1 100 1 100 * Race/Ethnicity is defined by Texas Senate gill 1074 as being of a "particular descent, including Caucasian, African, Hispanic, Asian, Native American and Middle Eastern ". Figure has been rounded. Comparison of Four -Year Traffic and Motor Vehicle - Related Arrest Information (111110 - -- 12131113) RacelEthnicity* Motor Vehicle - Related Arrests in percent a es 10 11 12 13 Caucasian 73 78 57 63 African 15 12 15 18 Hispanic 11 8 27 17 Asian .4 1 1 1 Native American 1 .2 0 0 Middle Eastern 0 .2 .3 0 Other 0 0 0 0 Total 100 ** 1 100 ** 1 100 1 100 * Race/Ethnicity is defined by Texas Senate gill 1074 as being of a "particular descent, including Caucasian, African, Hispanic, Asian, Native American and Middle Eastern ". Figure has been rounded. 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. A.3 Police Department 2013 Annual Report (15 Minutes) Presenter: Jimmy Perdue, Public Safety Director Summary: The North Richland Hills Police Department Annual Report for 2013 provides a snapshot of the Police Department's activity during the calendar year. It shows a variety of activity measurements indicating the effort of the dedicated Police Department employees. General Description: While there was a slight increase in UCR Part I offenses in 2013 compared to 2012, comparative data over the past eight years indicates the 2013 numbers are in line with the overall trend. However, significant decreases were seen in burglaries and aggravated assaults. Also, a decrease was experienced in Part 11 offenses when compared to the previous year. During 2013, we continued to improve both our efficiency and effectiveness in serving our community. We strengthened partnerships with community members and continued to improve the delivery of shared services. Our commitment to excellence in all police services was demonstrated through several key actions and recognitions we received during 2013. Our programs and accomplishments are detailed within the attached report. SERVICE 8O'NOR IN 7 E G R I T Y Our Vision Our vision is a community environment where the public has full faith and confidence in its police department to provide an atmosphere where people feel safe and secure. Our Mission Our mission is to work in a partnership with our citizens to maintain a safe, peaceful community by providing excellence in all police services dedicated to the highest standards of ethics and integrity while preserving and protecting life and property. Our Philosophies We are committed to maintaining high ethical standards by conducting ourselves with integrity, compassion and accountability. We, both as individuals and as an organization, strive to be leaders in our profession and in the community we serve. Effective leadership will model the way, enable others to act and inspire a shared vision. We endorse the principles embodied in our Constitution. We respect and protect the rights of all citizens, and we endeavor to ensure the safety, security and protection of life and property. Integrity is central to the values we embrace and establishes the foundation for community trust. We are accountable to each other and to the citizens we serve and we expect ethical, legal and moral behavior in all aspects of our lives. We strive to maintain the highest quality of life for all that reside within and visit our community. Our values guide our work and decisions, help us contribute to the quality of life and promote a positive work experience. We are dedicated to preserving the goals and values that make North Richland Hills the "City of Choice." As the journey continues for our department, a brief look back at 2013 provides many opportunities to highlight the exceptional work done by the men and women of our organization. This annual report will give you an overview of these efforts and some of the milestones we achieved. It was another year that was filled with the high expectations that we could live out our mission of working in a partnership with our community. But this credo is not limited to the citizens we serve but also to our surrounding communities and the agencies that represent them. We feel a special bond with our sister cities and believe we share a belief in providing exceptional service at all levels. We join the agencies representing the cities of Haltom City, Richland Hills and Watauga in congratulating all of our employees for being recognized by the International Association of Chiefs of Police with the Webber Seavey award. Given each year to highlight programs that demonstrate exceptional performance, we were all proud that our shared communications and detention program was recognized during its first full year of operation. This program serves each community very well and has brought our agencies closer together and allows us to provide even better service than any of us could do alone. My thanks to all of the employees and to the leadership of each agency for believing in our shared vision and doing the hard work required for such outstanding results. We are accountable to each other and to the community we serve and we expect ethical, legal and moral behavior in all aspects of our lives. These words are a part of the North Richland Hills Police Department organizational philosophies. They are more than words but represent a core belief that we hold each other up to the highest standards and will accept nothing than the very best from each and every member of the organization. This core belief has been emblazoned on our vehicles in the three simple words: Service, Honor, Integrity. They are there to remind us of what we believe and what is expected of us every day we serve. I am very proud of the members of our department and for all they do to serve our citizens. I join them in thanking you, our community, for all of your support. We never take it for granted and remain committed to our vision of providing an atmosphere where people feel safe and secure. The future is bright for our community and are glad to be approaching this future with you. Director of P Ublir 51lety Chippt ot -"dice Administiratmr, 'NiF4 arf Offtue Cr 3 ck I alul Bu i ealu du Nldiugemertil SawIuek BLIlle'LLI Assiskank .1 Ch Z Assist@rA Ginter Uniformed Serwoes Criminal Investigations Adm in sr.rabve Services TeGhnicd :'eMices Carmin Captain Ca pa i n Ocordimptor parol C r in a,— P uson &R S SJ Pirofemmial Standards Fleel Mairilerranue Leute,ar,ls Sergeant Uetrtwwt PatrolklTraffic ProrK-dyFuwoi@llCrir(,e& ................................................................... Sergeants 5er;=nt Rucruiltiinq, Internal Affuir5 RLd Light Carn or@ Pdc,ie Ac:rezflmt�r:nr ---------------- Media Reidbul'� NdruuJuE, "Llard Sergeant (-,r.m m I[ Inity sn rviars Manager 90'a Crurnp. Analy5t .J. 1MMLjmcahnnc SRO'O Uliirrr,elFreventiun Volunteers iSiurnme M&3agpr EdLICabonfTrialming selgedrit Department Hilghtights Jointly sponsored by IACP and Motorola, the Webber Seavey Award is presented annually to agencies and departments worldwide in recognition for promoting a standard of excellence that exemplifies law enforcement's contribution and dedication to the quality of life in local communities. This program helps law enforcement agencies worldwide and the communities they serve by redefining the concept of law enforcement and how it is routinely performed. The award is named for Webber S. Seavey, the IACP's first president, and the awards ceremony is held during the International Association of Chiefs of Police annual conference. s�rm ww� The North Richland Hills Police Department's "Communications and Detention Facility Shared Services Program" was selected as one of the Top 25 Programs for the 2013 Webber Seavey Award. The presentation of this award was October 21, 2013 in Philadelphia. The Webber Seavey Award bears significance that extends far beyond the prestige of winning. The program is designed to raise the standard of quality in law enforcement, to share information on successful police projects, and to bring team members within law enforcement agencies together in an interactive problem - solving process. Winning projects are documented and made available to agencies worldwide through a series of special publications - promoting the exchange of ideas and the sharing of information throughout the entire law enforcement community. These innovative programs serve as a blueprint to help others develop and strengthen their agencies to make their communities safer. Meet Unit 8992 — a John Deere XUV 8251 – otherwise known as Gator 1. This small, but powerful, utility vehicle is designed to allow maneuverability in areas where a full-size vehicle cannot and it offers quick and easy transport as well as positive citizen interaction. This newest addition to the police department's fleet will be a valuable tool to deploy at City events and on occasions when easy navigation and up close observation by on -scene command personnel is desired In September 2013, police volunteers created a new design for two decommissioned police cruisers dedicated to the department's Volunteers In Police Service Program — VIPS. One of the major aspects of the VI PS program is to enhance the efficiency and visibility of the volunteers who provide patrol functions for the department. To set the volunteer units apart from police patrol vehicles, a new color scheme and graphics package was added to their cars. Certain criteria were identified as a guideline during the developmental phase. The final design utilized the colors incorporated into all police department marked vehicles and utilized the NRH star emblem as well. �Management Services Bureau The Management Services Bureau is under the command of Assistant Chief Mike Hamlin. This Bureau is responsible for coordinating the activities of the Administrative Services Division and the Technical Services Division. In addition to the assistant chief, the bureau is staffed by one captain, one lieutenant, two sergeants, six poli ce officers, one civilian division coordinator and 64 full-time civilian personnel. The Administrative Services Division is responsible for planning, research, and policy development for the Police Department and the management of awarded state and federal grants. Charitable outlets and grant funding sources are sought after to build new service programs and supplement police resources not otherwise available to the department. Additionally, the Division oversees the Community Services Section, Professional Standards, and the Training Section. Crime prevention and community relations are the top priorities of the Community Services Section. This section also provides community outreach, partnership, and interaction through the administration of programs such as: t School Resource Officers t Crime Victim Liaison Assistance t Volunteers in Police Service t Citizen's Police Academy and Citizen's Police Academy Association Alumni t Neighborhood C=' eWatch and Crime -Free Multi Housing t Community Resource Assistance t Youth Summer Camp t Heroes and Helpers Since hitting the streets in their blue volunteer patrol units, the 31 specially trained North Richland Hills police volunteers have made a big impact NRH police volunteers average over 30 hours a month per person with ages ranging from 45 to 79. Since the YIPS' inception in 2007 they have contributed over 28,000 volunteer hours dedicated to helping the North Richland Hills Police Department provide better service to the community. The YIPS assist the police in securing a safer environment for all who live, work and visit the City of North Richland Hills. While using their resources as an extra set of "eyes and ears," volunteers are able to work with police officers and citizens in the community to help keep crime down. Al IN, Management Services Bureau The Professional Standards Section ensures optimum department staffing and the highest quality of service delivery by providing the best qualified candidates for police employment. The Police Agency Combined Testing or P.A.C.T. is Y, � the testing device that is used to establish a list of qualified applicants. The six a. participating cities of P.AC.T. — Euless, Hurst; Yeller, Southlake, ColleTUe �s a�mw�w i j f �' �yaa9 ... dpnp Ws and North Richland Hills — have joined forces to recruit the most qualified police officer applicants. This combined testing provides one test with multiple opportunities to become a police officer. North Richland Hills conducted over 70 employment backgrounds and hired 15 employees in 2013. Professional Standards' staff also maintain positive working relationships with the media by remaining accessible, visible, and delivering appropriate responses in a timely manner. In 2013, the Public Information Officer directed over 400 media contacts. Oversight of the police fleet and related equipment in coordination with the city's Equipment Services as well as management of the Red Light Camera Program are responsibilities of the Technical Services Division. Within this Division, the following four sections provide the necessary civilian support functions that are vital to the successful day -to -day operation of the police department F, a rr i A The Communications Section is the public's link to police, fire, ambulance, and City emergency and non - emergency services. The primary responsibility of the Communications Section is to provide citizens with the best possible response to their request for information or the need for public safety services police, fire, ambulance, and emergency equipment This section provides accurate statistical information for administrative use, along with working closely and effectively with all personnel in the police, fire and city departments, as well as outside agencies. The Detention Services Section provides the detention, control and care of all prisoners in the Jail facility. Prisoners are booked in accordance with accepted procedures and held until appropriate terms of release are satisfied. An average of 19 new prisoners are booked in daily in the detention facility, and over 27,000 prisoner meals are served annually. This section is also responsible for proper recording and testing of suspected DWI violators through the department's State Certified Intoxilyzer Program. After years of preparation, an agreement between the cities of North Richland Hills, Watauga, Haltom City and Richland Hills to share these two services became fully implemented in 2012. The Communications and Detention Facility Shared Services Program I as improved efficiency and cooperation between the cities and has saved taxpayers' money. This long- desired operation was achieved by eliminating unnecessary redundancies and compressing excess capacity in physical facilities and personnel. The City of North Richland Hills serves as the host agency for these shared services. The Property Management Section orders and manages the inventory and issuance of all police equipment department -wide. The section provides the storage, safekeeping and disposal of all evidence and found or confiscated property taken in by police personnel. All property is coded, logged in and stored until its legal release, auction or destruction. This Section maintains all the records critical to the proper handling of evidence along with documents required for the ultimate disposal of all property under its care, custody and control.. The Records Section serves as the record liaison for the public, the State and the FBI. This section is responsible for: t Processing and retaining all police department records t Managing the automated records reporting system t Maintaining the record scanning program for archived record retrieval t Responding to open records requests, and t Providing citizen assistance via telephone or in person. Operations Sm, au The Operations Bureau is under the command of Assistant Chief Mike Young who is responsible for coordinating the activities of the Uniformed Services Division and the Criminal Investigations Division. In addition to the assistant chief, the bureau is staffed by two captains, four lieutenants, 13 sergeants, 78 police officers and 25 civilian personnel. The Uniformed Services Division consists of two Sections — the Patrol Section and the Traffic Section— and five specialty units: Bicycle Patrol, Honor Guard, Y -9, Public Service Officers, and Special Weapons and Tactical Team. This division is responsible for controlling and preventing crime through regular patrols, responding to calls for service, apprehending offenders, enforcing criminal and traffic laws, conducting preliminary investigations while working with citizens in a preventive approach to problems within the community. In addition to the uniformed police patrols other services provided are accident investigation and reconstruction, commercial vehicle enforcement and special threat situations. These sections are equally tasked with providing high police visibility while working with citizens in a preventive approach to problems within the community. The contemporary concept in policing — referred to as Beat Management — extends the commitment by our police officers to best serve our community while also forming a partnership with our citizens. District assignments create a famili arity between the beat officer and the community served. The officers are encouraged to stop by and interact with students in schools on their districts, meet residents, attend homeowner's associations meetings, and attend neighborhood watch meetings on their assigned beats. The civilian public service officers focus on completing those tasks In the summer of 2012, the department's first narcotics detection Y -9 unit became operational. The detector canine is trained to be highly effective in detecting specific odors as well as acting as a deterrent to crime. In addition to deployment while on shift, the Y- 9 unit is on -call to assist all officers and detectives in their drug enforcement efforts. Upon completion of the program's first year, the unit deployed on 145 assist calls and seized over 80 lbs. of illegal drugs. This program offers a highly effective resource in helping to fight the crime against drugs within our community and surrounding areas. Operations Bui au The Traffic Section is tasked with enforcement of the traffic laws throughout the city, including city ordinances regulating traffic and parking violations. This section conducts follow -up investigations on hit and run cases, works special city events, and also responds to traffic complaints in congested areas, dangerous locations and as called upon by citizens ' within the community. Assigned to the Traffic Section are 17 school crossing guards who work all � the crossing guard posts throughout the city. A new program with the Traffic Section in 2011 the Commercial Vehicle Enforcement (CVE) Program is charged with keeping our roadways safe for all motorists by monitoring and inspecting the commercial vehicles that utilize these same roadways for transporting goods and services. The CVE Program focuses directly on traffic safety issues that have the greatest potential to harm our citizens by hazardous spills, traffic fatalities, and the degradation of city infrastructure. The new configuration of the Criminal Investigations Division has been structured to improve efficiency and service capabilities. Detectives assigned to CID have received general training in all aspects of criminal investigation as well as specialized training in areas that are specific to each detective. As a component of Beat Management, the general assignment detectives serve as district liaisons for all beat officers. The Crimes Against Persons Section investigates causes of all violent crimes including homicide, robbery, sexual assault, family violence and juvenile crimes. Specialized investigation of activities involve Juvenile offenders and crimes against children. The Property Crimes Section investigates property - related offenses including auto theft, burglary and theft. Detectives perform follow -up investigations such as recovery of stolen property and arrest of fugitives. The detectives in the Financial Crimes Unit focus specialized resources in the following areas: t Fraud Investigations t Credit Card Abuse t Organized Crime Investigations t Embezzlement t Asset Forfeiture The two specialized units within the Division are the Crime Scene Search Unit and the Special Investigations Unit. The Special Investigations Unit investigates na rcotic offenses in North Richland Hills as well as working closely with Federal and State agencies in an attempt to reduce the flow of narcotics into our community. Additionally, specific multi- agency task force assignments extending beyond local jurisdiction promote cooperative and coordinated drug enforcement efforts drawing from the expertise of state and local law enforcement. The Crime Scene Search Unit collects and processes evidence from NRH crime scenes including murder, criminal mischief, burglary, robbery, forgery and assaults. This unit also supervises the multi- agency Automated Fingerprint Identification System (AFIS). Crime Analysis is a law enforcement function involving systematic analysis for identifying and analyzing patterns and trends in crime. Information on patterns can help law enforcement agencies deploy resources in a more effective manner and assist detectives in identifying and apprehending suspects. SpecilaNized Unlits �� y< M� 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 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 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. B.1 Executive Session: Pursuant to Section 551.071 Texas Government Code for consultation with attorney to seek advice about pending or threatened litigation or a settlement offer Presenter: George Staples, Attorney 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 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, February 24, 2014 7:00 P.M. A.0 Call to Order - Mayor Trevino A.1 Invocation - Councilman Barth A.2 Pledge - Councilman Barth A.3 Special Presentation(s) and Recognition(s) No items for this category. 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 February 10, 2014 City Council Meetinq B.2 Award of RFB NO.14 -014 to VMC Landscape Services, LP in the Amount of $340,218 for General Parks Mowing Services B.3 Award of the Construction Materials Testing Contract for the New City Hall Project B.4 Award RFB 2014 -003 for Electrical and Lighting Services to Cable Electric as the Primary contractor and Martex Electric the Secondary contractor C.0 PUBLIC HEARINGS C.1 Conduct a Public Hearing and Approve the 40th Year Community Development Block Grant Proaram - Resolution No. 2014 -005 C.2 ZC 2014 -04 Public Hearina and Consideration of a reauest by the Citv of North Richland Hills to apply the new Freeway Corridor Overlay District to all properties which adjoin or are located within 200 feet of the ultimate right -of -way for Northeast Loop 820 (I1-1-820) and Airport Freeway (SH 1211SH 183), and are not planned for single- family residential, parkstopen space, stormwater drainage easement use or transit oriented development (TOD) as shown on the City's Comprehensive Land Use Plan - Ordinance No. 3299 D.0 PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. No items for this category. E.0 PUBLIC WORKS E.1 Award RFB #14 -009 to Dake Construction in the amount of $104,161 for the UT1304 Pump and Motor Replacements Project F.0 GENERAL ITEMS F.1 Nomination for State Enterprise Project Designation for Tyson Prepared Foods - Resolution No. 2014 -008 F.2 Approval of Continued Participation in Tarrant County's HOME Investment Partnership Program - Resolution No. 2014 -006 F.3 Approve Resolution to Authorize I nvestment Officers - Resolution No. 2014 -004 F.4 Presentation of Fiscal Year 2013 Audited Financial Report F.5 Amendina Sections 18 -191 and 18 -277 of the North Richland Hills Code of Ordinances Regulating Food and Food Service Establishments - Ordinance No. 3298 F.6 Consider Approval of Oil, Gas and Mineral Lease Amendment to the TCCD South Unit G.0 EXECUTIVE SESSION ITEMS C.1 Action on Any Item Discussed in Executive Session Listed on Work Session Agenda H.0 INFORMATION AND REPORTS H.1 Announcements - Councilman Turnaae H.2 Adjournment 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. A.0 Call to Order - Mayor Trevino 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. A.1 Invocation -Councilman Barth 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. A.2 Pledge - Councilman Barth 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. A.3 Special Presentation(s) and Recognition(s) No items for this category. 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 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. 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. A.5 Removal of Item(s) from the Consent Agenda 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. 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. 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. B.1 Approval of Minutes of February 10, 2014 City Council Meeting Presenter: Patricia Hutson, City Secretary Recommendation: To approve the minutes of the February 10, 2014 City Council meeting. MINUTES OF THE WORK SESSION AND REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, HELD IN THE CITY HALL, 7301 NORTHEAST LOOP 820 — FEBRUARY 10, 2014 WORK SESSION The City Council of the City of North Richland Hills, Texas met in work session on the 10th day of February 2014 at 6:00 p.m. in the City Council Workroom prior to the 7:00 p.m. regular Council meeting. Present: Oscar Trevino Tito Rodriguez Rita Wright Oujesky Tom Lombard Tim Barth David Whitson Scott T urn age Tim Welch Staff Members Call to Order Mark Hindman Karen Bostic Jimmy Perdue Mike Curtis Vickie Loftice Patricia Hutson Monica Solko George Staples Mary Peters Kristin James John Pitstick Larry Koonce Greg VanNieuwenhuize Jason Moore Mike Hamlin Mike Young Stan Tinney Kirk Marcum Clayton Comstock Craig Hulse Mayor Mayor Pro Tem, Council, Place 1 Council, Place 2 Council, Place 3 Council, Place 4 Council, Place 5 Council, Place 6 Council, Place 7 City Manager Assistant City Manager Director of Public Safety Managing Director Managing Director City Secretary Assistant City Secretary City Attorney Public Information Officer Assistant to City Manager Director of Planning & Development Finance Director Engineer Management Assistant— Public Works Assistant Police Chief Assistant Police Chief Fire Chief Assistant Fire chief Senior Planner Economic Development Director Mayor Trevino called the work session to order at 6:00 p.m. A.0 Discuss Items from Regular City Council Meeting There were no questions from the Council. A.1 Discuss 2014 Federal Legislative Positions Karen Bostic, Assistant City Manager, presented a PowerPoint presentation and discussed 2014 Federal Legislative positions. The 2014 Federal Legislative positions had not changed from last year. There were no questions from Council. A.2 Discuss options for using the awarded Sustainable Development Project Grant funds from the North Central Texas Council of Governments John Pitstick, Planning and Development Director, presented a PowerPoint presentation to Council on options for using the $2.8 million Council of Governments Sustainable Development Grant awarded in 2009 for the extension of Snider Street. The sustainable development grant guidelines include the following requirements: • Designated mixed use zoning district; • 20% of the improvements funded by the City (COG= $2,545,000; City= $254,550); • Eligible public improvements include streets, signals, sidewalks and landscaping to stimulate and provide connectivity to new private mixed use developments. The original submittal included new street construction with wide sidewalks and street trees and a new signal connecting Snider Street from Main Street to Northeast Parkway. At the time the grant was awarded the proposed private mixed use development component included 216 multifamily units and 30,000 square feet of office, restaurant and retail space. Unfortunately this proposal has been withdrawn by the developer. Without a development planned to meet the requirements of the grant the City is in danger of losing the grant funding. After a brief discussion and questions by the Council, the consensus was to continue the grant scope for new street construction of Snider Street by proactively seeking multifamily development. B.0 EXECUTIVE SESSION - The City Council may enter into closed Executive Session to discuss the following as authorized by Chapter 551, Texas Government Code B.1 Executive Session: Pursuant to Section 551.072, Texas Government Code to Deliberate the Lease of City Property (Mineral Leases) B.2 Executive Session: Pursuant to Section 551.087 Texas Government Code Regarding Economic Development Incentives in Southern Sector of City Mayor Trevino announced at 6:23 p.m. that the Council would convene into Executive Session as authorized by Chapter 551, Texas Government Code, pursuant to the following sections: 1) Section 551.072 to deliberate the lease of city property for mineral lease and 2) Section 551.087 regarding Economic Development incentives in the southern sector of the city. C.0 Adjournment Mayor Trevino announced at 6:58 p.m. that the Council would adjourn to the regular Council meeting. REGULAR COUNCIL MEETING A.0 CALL TO ORDER Mayor Trevino called the meeting to order February 10, 2014 at 7:04 p.m. ROLL CALL Present: Oscar Trevino Tito Rodriguez Rita Wright Oujesky Tom Lombard Tim Barth David Whitson Scott T urn age Tim Welch Staff: Mark Hindman Karen Bostic Jimmy Perdue Mike Curtis Vickie Loftice Patricia Hutson Monica Solko George Staples Mayor Mayor Pro Tem, Council, Place 1 Council, Place 2 Council, Place 3 Council, Place 4 Council, Place 5 Council, Place 6 Council, Place 7 City Manager Assistant City Manager Director of Public Safety Managing Director Managing Director City Secretary Assistant City Secretary Attorney A.1 INVOCATION Councilman Lombard gave the invocation. A.2 PLEDGE OF ALLEGIANCE Councilman Lombard led the pledge of allegiance. A.3 SPECIAL PRESENTATION AND RECOGNITION(S) - PROCLAMATION RECOGNIZING NATIONAL ENGINEERS WEEK PRESENTED BY COUNCILMAN WELCH. Councilman Welch presented the National Engineers Week Proclamation and invited all Engineers present in the audience to come forward and join him at the podium so that they all could be recognized. or* MI T or* MI T A.4 CITIZENS PRESENTATION A.5 REMOVAL OF ITEM(S) FROM THE CONSENT AGENDA B.0 APPROVAL OF CONSENT AGENDA ITEMS ❑ PPRnvPn B.1 APPROVAL OF MINUTES OF JANUARY 27, 2014 CITY COUNCIL MEETING B.2 RESCHEDULING THE MARCH 10, 2014 CITY COUNCIL MEETING TO MARCH 3, 2014 AND THE MAY 26, 2014 CITY COUNCIL MEETING TO MAY 19, 2014 B.3 APPROVE THE DEDICATION OF A PERMANENT ELECTRICAL EASEMENT LOCATED AT 7301 IRON HORSE BOULEVARD TO ONCOR FOR NEW ANIMAL SHELTER COUNCILMAN LOMBARD MOVED To APPROVE THE CONSENT AGENDA. COUNCILMAN TURNAGE SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. C.0 PUBLIC HEARINGS CA TR 2013 -07 PUBLIC HEARING AND CONSIDERATION OF AMENDMENTS TO ARTICLE IV OF THE CITY'S ZONING ORDINANCE FOR THE ESTABLISHMENT OF A NEW "FREEWAY CORRIDOR OVERLAY DISTRICT" ALONG NORTHEAST LOOP 820 AND STATE HIGHWAY 1211183 (AIRPORT FREEWAY) AND SECTION 118 -631 TABLE OF PERMITTED USES - ORDINANCE NO. 3291 APPROVED Mayor Trevino opened the public hearing and called for the applicant to come forward. Mr. Clayton Comstock, Senior Planner, requested to present agenda item CA and agenda item C.2 since they were both related to the Freeway Corridor Overlay District. With Council concurrence, Mayor Trevino opened agenda item C.2. Mr. Comstock presented Staff's report for agenda items CA and C.2. The Freeway Corridor Overlay District includes the entirety of all properties which adjoin or are located within 200 feet of the ultimate Right -of -Way for Northeast Loop 820 (IH -820) and Airport Freeway (SH 1211SH 183), and are not planned for single - family residential, parkstopen space, stormwater drainage easement use or Transit Oriented Development (TOD) as shown on the City's Comprehensive Land Use Plan. Proposed Zoning Text Revisions does the following: • Increases masonry wall requirement between commercial and residential from 6' to 8' masonry, and also includes a requirement for a limestone element (i.e. column or all or part of wall); • Defines the uses permitted in the corridor. This part of the ordinance mostly impacts industrial and heavy commercial uses. Uses are permitted today that the Overlay would prohibit: • Pest Control Service Store • Lawn Maintenance Service Shop • Janitorial Supply & Service Company • Wedding Chapel • Day Care Center 1 Kindergarten • Light Auto Uses in C -2 District The Overlay removes the option to request a Special Use Permit for the following uses: • Mini - Warehouse (Self Storage) • Feed & Seed Store • Moving /Storage Company • Laundry, Self- Service • Farmers Market • Drive - Through Buildings less than 1,400 sq. ft. • Tire & Battery Sales • Automobile Lubrication Center • Automobile Inspection Station • Auto Upholstery Shop • Auto Al a rm/Ste reoNVi nd ow Tinting • Cemetery /Mausoleum • Alcoholic, Narcotic, Psychiatric Rehabilitation Center • Nursing Home 1 Orphanage • Bingo Hall • Commercial Stable • Used Car Sales • Car Wash • Auto Repair 1 Paint & Body Shop • Commercial Carpet Cleaning • Assembling Operations • Truck & Heavy Machinery Sales /Service /Rental • Greenhouse or Plant Nursery (wholesale) • RV/Camper/Boat Sales Proposed Landscape Ordinance text revision (agenda item C.2) will: • Increase evergreen tree requirement adjacent to residential from 40% to 100 %; • Reduce the public street landscape setback from 15 feet to 10 feet; • Specify that trees in the public street landscape setback shall be spaced 50 -foot on- center; • Limit ornamental tree substitutions for large trees to driveways only; • Create a palette of corridor trees to include: Shumard Oak, Chinquapin Oak, Bur Oak, Live Oak, Texas Red Oak, Caddo Maple and Cedar Elm; • Limit Live Oaks to a maximum of 50% along public streets; • Establish limestone hardscape requirements as one of two options: • Option 1: 18" — 30" Leuders Limestone wall with a minimum of 30 square feet of stone facade per 50 linear feet of freeway frontage; a solid cast stone cap of 6" applied to the top. • Option 2: 36" tall by 30" wide bollards with 6" solid cast stone cap; placed 50' on- center, off -set from canopy trees with shrubs in between. The Planning & Zoning Commission recommended approval by a 6 -0 vote. Mayor Trevino called for anyone wishing to speak for or against the request to come forward. There being no one wishing to speak, Mayor Trevino closed the public hearing and entertained a motion for Item C.1. COUNCILMAN LOMBARD MOVED To APPROVE ORDINANCE No. 3291; TR 2013 -07. COUNCILMAN WHITSON SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. C.2 TR 2014 -01 CONSIDERATION OF AN ORDINANCE AMENDING ARTICLE III, CHAPTER 114 OF THE NORTH RICHLAND HILLS CODE OF ORDINANCES (LANDSCAPING AND BUFFERING REGULATIONS); CREATING REGULATIONS FOR A FREEWAY CORRIDOR OVERLAY DISTRICT - ORDINANCE NO. 3292 ❑ PPRC]VPn Mayor Trevino announced that agenda item C.2 was presented and discussed with the previous agenda item C.1. Mayor Trevino entertained a motion for item C.2. COUNCILWOMAN WRIGHT OUJESKY MOVED To APPROVE ORDINANCE No. 3292; TR 2014 -01. MAYOR PRO TEM RODRIGUEZ SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. C.3 ZC 2014 -02 PUBLIC HEARING AND CONSIDERATION OF A REQUEST FROM THE CITY OF NORTH RICHLAND HILLS FOR A ZONING CHANGE FROM 1 -2 MEDIUM INDUSTRIAL TO C -2 COMMERCIAL ON LOT 2R, BLOCK 5, INDUSTRIAL PARK ADDITION LOCATED AT 5757 RUFE SNOW DR. - ORDINANCE NO. 3295 ❑PPRC]VFn Mayor Trevino opened the public hearing and called on John Pitstick to present the item. John Pitstick, Planning and Development Director, summarized the item. The purpose of this request is to continue the ongoing effort to change the zoning category of some of the commercial properties along Rufe Snow Drive from 1 -2 Medium Industrial to one of the commercial zoning districts. The original vision of industrial uses along Rufe Snow near the intersection of what was formerly known as Industrial Park Boulevard, now Iron Horse Boulevard, never materialized and most of the properties developed as retail or office uses instead. Therefore the effort began, under the direction of the Planning and Zoning Commission, to make the Zoning Map reflect the Comprehensive Land Use Plan as well as the actual pattern of development. Since 2012, three parcels have been rezoned from 1 -2 Medium Industrial to either C -1 or C -2 Commercial in this target area. With the permission and cooperation of property owner Dr. Mike McLendon, the City of North Richland Hills is requesting approval of a city- initiated zoning change from 1 -2 Medium Industrial to C -2 Commercial for a 0.62 acre lot at 5757 Rufe Snow Drive. The Planning & Zoning Commission recommended approval by a 6 -0 vote. Mayor Trevino called for anyone wishing to speak for or against the request to come forward. There being no one wishing to speak, Mayor Trevino closed the public hearing and called for the motion. COUNCILMAN TURNAGE MOVED TO APPROVE ORDINANCE NO. 3295; ZC 2014 -02. MAYOR PRO TEM RODRIGUEZ SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. CA ZC 2014 -03 PUBLIC HEARING AND CONSIDERATION OF A REQUEST FROM THE CITY OF NORTH RICHLAND HILLS FOR A ZONING CHANGE FROM 1 -2 MEDIUM INDUSTRIAL TO C -2 COMMERCIAL ON LOTS 3A, 3B AND 4A, NRH INDUSTRIAL PARK ADDITION LOCATED AT 5700 AND 5710 RU FE SNOW DR AND 6700 IRON HORSE BLVD. - ORDINANCE NO. 3296 ❑PPRC]VFn Mayor Trevino opened the public hearing and called on John Pitstick to present the item. John Pitstick, Planning and Development Director, summarized the item. Again, the purpose of this request is to continue the ongoing effort to change the zoning category of some of the commercial properties along the Rufe Snow Drive corridor area from 1 -2 Medium Industrial to one of the commercial zoning districts. With the permission and cooperation of the property owners —Texas Tierra III Ltd and North Fort Worth Bank — the City of North Richland Hills is requesting approval of a city- initiated zoning change from 1 -2 Medium Industrial District to C -2 Commercial for three adjacent lots totaling approximately 3.25 acres located at 5700 and 5710 Rufe Snow Drive and 6700 Iron Horse Boulevard. The Planning & Zoning Commission recommended approval by a 6 -0 vote. Mayor Trevino called for anyone wishing to speak for or against the request to come forward. There being no one wishing to speak, Mayor Trevino closed the public hearing and called for the motion. COUNCILMAN LOMBARD MOVED To APPROVE ORDINANCE No. 3299; ZC 2014 -03. COUNCILWOMAN WRIGHT OUJESKY SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7 -0. C.5 SUP 2014 -01 PUBLIC HEARING AND CONSIDERATION OF A REQUEST FROM THE CITY OF NORTH RICHLAND HILLS FOR A SPECIAL USE PERMIT FOR AN AUTO RENTAL BUSINESS ON LOT 3A, NRH INDUSTRIAL PARK ADDITION LOCATED AT 5700 RUFE SNOW DR. - ORDINANCE NO. 3297 ❑ PPRC]VPn Mayor Trevino opened the public hearing and called on John Pitstick to present the item. John Pitstick, Planning and Development Director, summarized the item. With the approval of the above zoning change (ZC 2014 -03, Agenda Item CA), the existing auto rental business is now considered non - conforming. Auto Rental is a permitted use in the "1 -2" Medium Industrial zone but requires an SUP in the "C -2" Commercial zone. Should the existing Enterprise Rent -A -Car tenant ever vacate the property, this Special Use Permit would allow the auto rental use to continue. With the permission and cooperation of property owner Texas Tierra III Ltd, the City of North Richland Hills is requesting approval of a city- initiated Special Use Permit for Auto Rental at the existing Enterprise Rent -A -Car on a 0.57 acre lot at 5700 Rufe Snow Drive. Mayor Trevino called for anyone wishing to speak for or against the request to come forward. There being no one wishing to speak, Mayor Trevino closed the public hearing and called for the motion. COUNCILMAN BARTH MOVED To APPROVE ORDINANCE No. 3297; SUP 2014 -01. COUNCILMAN WHITSONN 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. No items for this category. No items for this category. E.0 PUBLIC WORKS F.0 GENERAL ITEMS G.0 EXECUTIVE SESSION ITEMS G.1 ACTION ON ANY ITEM DISCUSSED IN EXECUTIVE SESSION LISTED ON WORK SESSION AGENDA ITEM B.1 DELIBERATE THE LEASE OF CITY PROPERTY (MINERAL LEASES) ❑ PPRC]Vpn Karen Bostic, Assistant City Manager presented the item. Chesapeake Energy Corporation has approached the City seeking a three year lease on 0.53 acres in Sunnybrook Addition, Block 1, Lot A1A3. The lease term is $5,250 per acre and 25% royalties. MAYOR PRO TEM RODRIGUEZ MOVED TD AUTHORIZE THE CITY MANAGER TO EXECUTE AN OIL AND GAS LEASE FOR APPROXIMATELY 0.53 ACRES OF CITY PROPERTY LOCATED IN THE SUNNYBROOK ADDITION AT THE CORNER OF CARDINAL LANE AND MARTIN DRIVE. COUNCILMAN WHITSONN SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7-0. H.0 INFORMATION AND REPORTS HA ANNOUNCEMENTS Councilman Whitson made the following announcements. February is Love Your Library Month, and the North Richland Hills Public Library is celebrating with free concerts every Saturday. Shows begin at 1 p.m. in the lobby. For more information, visit the library's website or call 817- 427 -6800. If a disaster or emergency strikes North Richland Hills, the Community Emergency Response Team may be called upon to assist first responders. Residents who would like to join the Community Emergency Response Team must complete a 10 -week training course. The next training begins on March 20th. To sign up or get more information, visit the CERT website or call 817- 427 -6900. Kudos Korner - Debbie Heizer of the Neighborhood Services Department. A resident emailed thanks and appreciation for Debbie's help in resolving an issue with lighting in an apartment complex parking lot. She added that she loves living in North Richland Hills and has had nothing but great experiences in dealing with anyone at the city. H.2 ADJOURNMENT Mayor Trevino adjourned the meeting at 7:32 p.m. Oscar Trevino — Mayor ATTEST: Patricia Hutson, City Secretary 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. B.2 Award of RFB NO.14 -014 to VMC Landscape Services, LP in the Amount of $340,218 for General Parks Mowing Services Presenter: Bill Thornton, Parks and Recreation Assistant Director Summary: The City Council is being asked to award RFB No. 14 -014 to VMC Landscape Services, LP for general parks mowing services. General Description: The Parks and Recreation department contracts mowing services for city parks and municipal facilities. The current contract was executed on October 8, 2007 and allowed for five consecutive one -year renewal periods. This contract expired in December 2013 and staff issued bid specifications for a new mowing contract with 4 additional annual renewal options. Four bids were received on February 10th, as follows: Bidder Total VMC $340,218 Summer Set $341,352 Dyna -mist $369,504 Land Works $517,284 Funding for contract mowing services is allocated in both the General Fund and the Park and Recreation Facilities Development Fund. The total approved budget for FY2013/2014 is $405,914. Awarding the contract to the low bidder, VMC Landscape Services will leave a remaining balance of $65,696. This savings will allow staff to address deferred maintenance items within the park system and better care for our urban forest by way of improved tree and landscaping services. Staff recommends the contract be awarded to the lowest bidder, VMC Landscape Services, LP. VMC has 40 years of experience in this field of work and has performed the parks mowing services since 2005. Responses to requests and concerns have been handled in a timely, professional and efficient manner. Recommendation: To award RFB NO. 14-014 to VMC Landscape Services, LP in the amount of $340,218 for general parks mowing services. 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. B.3 Award of the Construction Materials Testing Contract for the New City Hall Project Presenter: Don Wertzberger, Project Manager Summary: City Council is being asked to authorize the City Manager to Execute a Professional Services Contract with CMJ Engineering, Inc. (CMJ) in the amount of $205,000 for Construction Materials Testing on the New City Hall project. The approved project includes budget line items for Testing Services related to the implementation of the New City Hall project located on approximately 12 acres of land in the Calloway Creek Commercial development (formerly North Hills Mall). CMJ conducted the original geotechnical investigation for the City Hall project upon which the Design Team relied upon for the design, development and completion of the Construction Documents. In addition, CMJ is currently providing construction materials testing services for the Boulevard project. The anticipated construction schedule for the City Hall project is March 2014 through December 2015. General Description: The City issued a Request for Qualifications (RFQ 12 -034 Geotechnical Information Services — New Municipal Complex) due August 7, 2012 for interested firms to submit their qualifications to perform Geotechnical Engineering Services as well as Construction Materials Testing Services for the New City Hall project. The City received a total of 12 responses. The quality of responses was of high caliber representing firms with significant experience in providing these services for a project of this scale and complexity. The City was especially pleased that all the responses were from North Texas based firms, and in particular, several from the Tarrant County 1 Fort Worth area. Per City policy, the City Manager selected a review committee to evaluate the submittals and make a recommendation. The composition of the committee intentionally reflected a wide cross - section of members with first -hand experience working with Geotechnical firms during design and for construction of projects. The committee included staff members as well as representatives from the City Hall Design Team. The committee evaluations and discussions placed emphasis on: municipal client experience, firm's experience working on projects of similar size /budget and complexity, available resources to perform especially during the construction testing phase, proposed staff /resumes, past experience working with NRH, responsiveness during testing, willingness to work with the design team to consider alternate design solutions, and if the firm typically adds value to a project and collaboratively seeks cost - savings measures with the City 1 Design Team. References were checked for the top team(s) under consideration. Following this process, the committee unanimously recommended the firm of CMJ Engineering, Inc. Almost all of the committee members had first -hand experiences with CMJ on previous projects, and were impressed with the personal touch and relationship- focused approach CMJ brought to during the delivery of services. In contacting references, the common themed were those of high quality geotechnical engineering and construction materials testing services, excellent working relationships with municipalities, very responsive, and collaborative with the project team. The committee felt one of the true differentiators became the "value- added" that CMJ brought to all their projects and clients, and a solid performance history of finding economical solutions and design options while working in collaboration with the team 1 Owner. CMJ was founded in 2000 and has a certified in -house laboratory, with a staff of twenty - one (21). They are a Fort Worth firm, located less than 10 minutes from the proposed site of the City Hall project. CMJ has previous experience with NRH, most recently the Recreation Center project, in which they performed in both roles of geotechnical investigation and construction materials testing. Recommendation: To authorize the City Manager to execute a professional services contract with CMG Engineering for professional geotechnical services related to construction materials testing for the City Hall project. 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. B.4 Award RFB 2014 -003 for Electrical and Lighting Services to Cable Electric as the Primary contractor and Martex Electric the Secondary contractor Presenter: Chris Amarante, Facilities & Construction Director Summary: This item is to ask Council to award RFB 2014 -003 annual contract for electrical and lighting services to Cable Electric, Inc. as the primary contractor and Martex Electric as the secondary contractor. General Description: Each budget year, Council appropriates funds for electrical and lighting services for Facility /Construction, NRH20, and Parks and Recreation Department for effective maintenance programs for City owned facilities. The City requested bids for electrical repair and installation contracting services to be performed for the City on an annual and as need basis. All buildings as well as leased spaces operated by the City of North Richland Hills will be covered under this annual contract. Notice of the City's intent to bid was advertised via Public Purchase and posted on the City's Purchasing Department website. Numerous vendors were contacted and requested to participate in this process. The City received three (3) bids from the following vendors. Ed's Electric was not selected due to prior billing issues with the City. Martex Electric Cable Electric Ed's Electric Secondary Primary; Minimum number of hour(s) billed per service call 1 Hour 1 Hour 1 Hour Price per minimum hour(s) $75.00 $40.00 $45.00 Parts Mark Up % 35% 20% 15% Master Electrician Martex Electric Cable Electric Ed's Electric 7:00 a.m. to 6:00 p.m. Hourly Rate $75.00 $50.00 $45.00 6:00 p.m. to 7:00 a.m. Hourly Rate $112.50 $60.00 $67.50 Hourly Rate for Weekends and Holidays Recognized by the $112.50 $60.00 $67.50 Contractor Journeyman Electrician Martex Electric Cable Electric Ed's Electric 7:00 a.m. to 6:00 p.m. Hourly $45.00 $40.00 $45.00 Rate 6:00 p.m. to 7:00 a.m. Hourly $67.50 $55.00 $67.50 Rate Hourly Rate for Weekends and Holidays Recognized by the $67.50 $55.00 $67.50 Contractor Helper Martex Electric Cable Electric Ed's Electric 7:00 a.m. to 6:00 p.m. Hourly $30.00 $20.00 $30.00 Rate 6:00 p.m. to 7:00 a.m. Hourly $45.00 $30.00 $45.00 Rate Hourly Rate for Weekends and Holidays Recognized by the $45.00 $30.00 $45.00 Contractor Equipment Martex Electric Cable Electric Ed's Electric Lift $80 per hour $120 per day $250 per day Bucket Thick $175 per hour $80 per hour $55.00 per hour (to 60 feet) Trencher $50 per hour $250 per day Backhoe $100 per hour Crane Truck to 130 feet $85.00 There are not set required quantities to be purchased under this contract. Specifications call for pricing to remain firm for a twelve (12) month period with the options to review the pricing and extend the annual contract for four (4) additional twelve (12) month periods if it remains beneficial to the City and the vendors. Recommendation: To award RFB No. 2014 -003 for Electrical and Lighting Services to Cable Electric Inc. as the primary contractor and Martex Electric as the secondary contractor. 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. C.0 PUBLIC HEARINGS 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. CA Conduct a Public Hearing and Approve the 40th Year Community Development Block Grant Program - Resolution No. 2014 -005 Presenter: Kristin James, Assistant to the City Manager Summary: The United States Department of Housing and Urban Development (HUD) requires that a public hearing be held so that the City can receive comments and input from citizens regarding the 40th Year Community Development Block Grant program project. Following the public hearing it is necessary for City Council to take action regarding the project to include in the 40th Year Community Development Block Grant (CDBG) program. Tarrant County and the City of North Richland Hills have entered into a joint agreement whereby Tarrant County is given the authority to administer the program. General Description: In 1996, HUD designated the City of North Richland Hills as a metropolitan city to receive direct entitlement of Community Development Block Grant (CDBG) funds. On June 24, 1996 the City Council accepted the direct entitlement designation and entered into an agreement with Tarrant County for the administration of the City's CDBG program. As a result of the direct entitlement designation, the City is awarded an annual grant on a formula basis to help provide a wide range of community development activities. CDBG funds are used in the revitalization of neighborhoods, economic development, and to provide public facilities and services for low to moderate income persons. Eligible CDBG projects include construction or rehabilitation of homes, basic infrastructure development such as water /sewer facilities, streets and other programs that target designated areas or persons. The programs /projects selected by the City must fall in the geographic target area identified by the most recent census (2010 Census) as being in an area with low to moderate income persons. Each program year, the City must prepare and submit a CDBG program outlining the use of these funds in accordance with HUD guidelines. We do not currently know the funding amount, but have been told to estimate the funding at 10% less than the 39th Year CDBG funding. With that being said, we are expecting funding in the amount of $205,340. This money will be used for the replacement of 1,050 linear feet of sewer pipe located along Harmonson Road, between Honey Lane and Lochridge Court. This portion of the sewer line is being proposed as the City's 40th Year CDBG Project because parts of the line have collapsed and it is badly deteriorated. HUD requires that a public hearing be held so that the City can receive comments and input from citizens regarding the 40th Year CDBG program project. Recommendation: Conduct a public hearing to receive public comments regarding the 39th Year CDBG program and approve the 40th Year Community Development Block Grant — Resolution No. 2014 -005. 10114 INS -10]Itej1110124 1L4 [QW*]iiEK1111-i WHEREAS, the City of North Richland Hills will receive direct entitlement of Community Development Block Grant (CDBG) funds for the 401h CDBG program year and WHEREAS, the schedule below represents the cities requested program for the 40th year CDBG program; Project $205,341 mOO Replace 1,050 linear feet of sewer line on Harmonson Road, between Honey Lane and Lochridge Court. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: SECTION 1. THAT the schedule above represents the City's CDBG program for the 40th funding year. PASSED AND APPROVED this the 24th day of February, 2014. Is] IW9 07M24 [0]:i111:INIs]:IWT124 1 III: 11II&I ►:ri III =36 Patricia Hutson, City Secretary Oscar Trevino, Mayor APPROVED AS TO FORM AND LEGALITY: George A. Staples, City Attorney 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. C.2 ZC 2014 -04 Public Hearing and Consideration of a request by the City of North Richland Hills to apply the new Freeway Corridor Overlay District to all properties which adjoin or are located within 200 feet of the ultimate right -of -way for Northeast Loop 820 (IH -820) and Airport Freeway (SH 1211SH 183), and are not planned for single - family residential, parkslopen space, stormwater drainage easement use or transit oriented development (TOD) as shown on the City's Comprehensive Land Use Plan - Ordinance No. 3299 Presenter: Clayton Comstock, Senior Planner CASE SUMMARY: On February 10, 2014, City Council approved TR 2013 -07 (Ordinance No. 3291) establishing standards for the new Freeway Corridor Overlay District. This case would be the final action needed for this project. Although the previous approval established the standards, the City Attorney advised that the language in the ordinance did not specifically apply the new standards to the subject properties through a "zoning change" type ordinance. Therefore, Ordinance No. 3299 (ZC 2014 -04) is a clarification that the new Freeway Corridor Overlay District will apply to the properties specified within the Text Revision ordinance previously approved and shown on the map provided below. PLANNING & ZONING COMMISSION: The Planning & Zoning Commission is scheduled to hold a public hearing and consider this item at their February 20, 2014 meeting. Staff will provide a report on the Commission's recommendation to Council at the February 24 City Council meeting. STAFF RECOMMENDATION: Approval of Ordinance No. 3299, ZC 2014 -04. ORDINANCE NO. 3299 ZONING CASE ZC 2014 -04 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 APPLYING A FREEWAY CORRIDOR OVERLAY DISTRICT TO ALL PROPERTIES WHICH ADJOIN OR ARE LOCATED WITHIN 200 FEET OF THE ULTIMATE RIGHT -OF -WAY FOR NORTHEAST LOOP 820 (IH -820) AND AIRPORT FREEWAY (SH 1211SH 183), AND ARE NOT PLANNED FOR SINGLE - FAMILY RESIDENTIAL, PARKSIOPEN SPACE, STORMWATER DRAINAGE EASEMENT USE OR TRANSIT ORIENTED DEVELOPMENT (TOD) AS SHOWN ON THE CITY'S COMPREHENSIVE LAND USE PLAN; ESTABLISHING A PENALTY; PROVIDING FOR PUBLICATION; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, notice of a hearing before the Planning and Zoning Commission was sent to real property owners within 200 feet of the property herein described at least 10 days before such hearing; and, WHEREAS, notice of a public hearing before the City Council was published in a newspaper of general circulation in the City at least 15 days before such hearing; and, WHEREAS, public hearings to zone the property herein described were held before both the Planning and Zoning Commission and the City Council, and the Planning and Zoning Commission has heretofore made a recommendation concerning the zone change; and, WHEREAS, the City Council is of the opinion that the zone change herein effectuated furthers the purpose of zoning as set forth in the Comprehensive Zoning Ordinance and is in the best interest of the citizens of the City of North Richland Hills; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: Section 1: THAT the Comprehensive Plan, the Comprehensive Zoning Ordinance and the zoning map of the City of North Richland Hills are hereby amended by applying a Freeway Corridor Overlay District to all properties which adjoin or are located within 200 feet of the ultimate right -of -way for Northeast Loop 820 (IH -820) and Airport Freeway (SH 121/SH 183), and are not planned for single - family residential, parkstopen space, stormwater drainage easement use or transit oriented development (TOD) as shown on the City's Comprehensive Land Use Plan, as shown in the map provided as Exhibit A. Section 2: Any person, firm or corporation violating any provision of the Comprehensive Zoning Ordinance as amended hereby shall be deemed guilty of a misdemeanor and upon final conviction thereof fined in an amount not to exceed Two Thousand Dollars ($2,000.00). Each day any such violation shall be allowed to continue shall constitute a separate violation and punishable hereunder. Section 3: The City Secretary is hereby authorized and directed to cause the publication of the descriptive caption and penalty clauses of this ordinance as an alternative method of publication provided by law. Section 4: This ordinance shall be in full force and effect immediately after passage. AND IT IS SO ORDAINED. PASSED AND APPROVED on this 24th day of February, 2014 In Oscar Trevino, Mayor ►:ri III =36 Patricia Hutson, City Secretary ►: 1,,: t0l 1FA= 1ITTIa %]01NLhWA24IQ111I =10il4kWif George A. Staples, City Attorney ►:l,, ;T01FA =1ITTIa %IK0I24 k11 =Ikq kil John Pitstick, Planning & Development Director e�'QWNINGDR S ,5� 10 9�p r) ICK LEIN IF, DR�,� Legend Proposed Freeway Combdor Overlay District Properties in a 200 ft buffer extending from Fwvy Corridor Overlay properties (for notification purposes only) 20,0 ft Buffer of Freeway Right-of-Way .. .. .. .. ........ 200 ft Buffer of Properties in Fwy Corridor Overlay (for noflfirafior7 purposes only) Property lines Freeway Right-of-Wey �!I— —p is fu a,aph,,.l -ty Iha clnti shi— has h— compled by the sy n, Pkem "41nMIAlki ri, g ,pqrtrnenv, of Illonm nnl Momiaton V eft ��Pry n �W II ,Vd� w enww 010 au Lliw y jr Lhi* daW, hwNevon, NO QkMIMUJU of cxurauy ii,, qimi ot impud. N 0 1,000 2,000 3,000 4,000 5,000 Feet EXHIBIT A :2 ca a I1 y�kt J mAm,cwoor.) AVE 7� -7 49f) I IAR*0015 IRD A w1 F 0 is )1F1�EDF(,)RD-F-ULF-SS RD M �7 G.EINVEW DR "ItH Proposed Freeway Corridor Overlay District Decernber 2013 The Freeway Corridor Overlay INStlicl int'llides the entim-ely trf all proliK,flics Arlij(,11 kj(lj(pjij t)y are hit med willkin 200 I'vel of Ithe nifirnalt, Righl-44, ,,, for Niwlheasl Limp 92() IIIA 820) and Aliport Fveeway (Sll 1211Sl3 183), awliiot phtwied for resl(lenthd, or storrriwater diaftiagie easenienl use or Transit 0i,lenwA Development (TOM as shown on the 011)"s Coniprehensive Land Use Nan. 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. D.0 PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. No items for this category. 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. E.0 PUBLIC WORKS 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. EA Award RFB #14 -009 to Dake Construction in the amount of $104,161 for the UT 1304 Pum p and Motor Replacements Project Presenter: Jimmy Cates, Public Works Operations Manager Summary: This item is to award RFB #14 -009 to Dake Construction for replacement of potable water pumps and motors for pump stations located at 7800 Conn Drive and 8501 Harwood. General Description: Utility Capital Project UT1304 is an approved project for FY 2013 -2014. The project consists of replacing three (3) large potable pumps and motors that are over 30 years in age. The pumps and motors are essential in providing safe and reliable quality potable water for the citizens of North Richland Hills. The available budget for this project is $105,000. Notice of the city's intent to bid was advertised as required by state regulations and posted on the city's website and on January 28, 2014 a bid opening was held and only one bid proposal was received. Dake Construction Company submitted a bid proposal of $104,161. Staff contacted the references supplied by Dake and found the City of Fort Worth, Tarrant Regional Water District and the City of Granbury rated Dake exceptional for their work performance. Staff contacted several vendors whom did not submit a bid proposal and found that there are several reasons as to why the city only received one bid proposal. The suppliers of potable water pumps and motors do have vendor territorial requirements in place. The pump and motor size, along with the type of efficiency, also factors into the amount of potential vendors who may submit a bid proposal. Vendors whom install the pumps and motors usually work with a single source distributor and may not be able to supply the types of pumps and motors the specifications required. The pumps and motors specified for this project are energy efficient and provide the best potable water pumping performance for the city with the available budget. Recommendation: Award RFB #14 -009 to Dake Construction Company in the amount of $104,161 for UT1304 Project. �M RALb-HILLS � _� . j /� \� ` � � y \� . Z0 Johnson PS. 0 Replacements EM«S»^® 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. F.0 GENERAL ITEMS 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. F.1 Nomination for State Enterprise Project Designation for Tyson Prepared Foods — Resolution No. 2014 -008 Presenter: Craig Hulse, Economic Development Director Summary: A longstanding City asset, Tyson Prepared Foods (Tyson) continues to look toward ways to improve and enhance its operations at 6350 Browning Court. The opportunity exists for the City of North Richland Hills to nominate Tyson for an Enterprise Project Designation with the State of Texas. The nomination does not obligate the City to provide any financial incentives from City revenues, rather it opens the door for Tyson to receive state sales and use tax refunds based upon employment and capital investment. This nomination would be the second nomination for Tyson Prepared Foods which was initially approved by the State in 2008. General Description: Staff was originally approached by Tyson Prepared Foods (Tyson) in 2008 to participate in the Texas Enterprise Zone Program pursuant to the Texas Enterprise Zone Act, Chapter 2303 for possible State tax incentives. Upon the City's participation and subsequent nomination, Tyson was approved by the state for Enterprise Project Designation. This initial term has expired and Tyson would like to seek City re- nomination. The City's participation would only come in the form of a `nomination' of Tyson to the Office of the Governor, Economic Development and Tourism and does not obligate the City to provide any financial incentives. The Texas Enterprise Zone Program is an economic development tool for local communities to partner with the State of Texas to promote job creation and capital investment. In the case of Tyson, a state sales and use tax rebate of $2,500 per employee will help offset a portion of $13 million in planned capital investment at their 6350 Browning Court location. Currently Tyson's facility has a taxable value of $10 million, while its business property has a taxable value of $20 million. To be eligible for the State designation, 35% of all future employees hired must meet the economically distressed residency requirement. An economically distressed residency falls within a census block group that contains at least 20% of the population living at or below the poverty line. Approximately 425 full time jobs are maintained at this location, which translates into a potential refund of state sales and use taxes of $1,062,500 (425 x 2,500) over a 5 year period. Resolution No. 2014 -008 references Ordinance No. 3010 that was approved on August 26, 2008. This ordinance not only nominated Tyson, but it also served as authorization for the City to participate in the Texas Enterprise Zone program pursuant to the Texas Enterprise Zone Act, Chapter 2303 of the Texas Government Code. The City is eligible to nominate up to six (6) projects for designation each biennium. If approved, the Enterprise Project Designation will retroactively take effect on October, 2013, terminating on March 31, 2019. Recommendation: Approval of Resolution 2014 -008, nominating Tyson Prepared Foods as a Texas Enterprise Project. NRH RESOLUTION NO. 2014 -008 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS TO PARTICIPATE IN THE TEXAS ENTERPRISE ZONE PROGRAM AND NOMINATING TYSON PREPARED FOODS, INC. FOR DESIGNATION AS AN ENTERPRISE PROJECT UNDER THE TEXAS ENTERPRISE ACT, CHAPTER 2303, TEXAS GOVERNMENT CODE WHEREAS, NORTH RICHLAND HILLS (City) has previously passed an Ordinance No. 3010 dated August 26, 2008, a copy of which is attached to this resolution as Exhibit "A ", electing to participate in the Texas Enterprise Zone Program, and the local incentives offered under this resolution are the same on this date as were outlined in that Order; WHEREAS, the Office of the Governor Economic Development and Tourism (EDC) through the Economic Development Bank (Bank) will consider TYSON PREPARED FOODS, INC. (TYSON) as an enterprise project pursuant to a nomination and an application made by the City; WHEREAS, the City desires to pursue the creation of the proper economic and social environment in order to induce the investment of private resources in productive business enterprises located in the City and to provide employment to residents of enterprise zones and to other economically disadvantaged individuals; WHEREAS, pursuant to Chapter 2303, Subchapter F of the Texas Enterprise Zone Act, Texas Government Code (the "Act ", TYSON has applied to the City for designation as an enterprise project; WHEREAS, the City finds that TYSON meets the criteria for designation as an enterprise project under Chapter 2303, Subchapter F of the Act on the following grounds: 1. TYSON is a "qualified business" under Section 2303.402 of the Act since it will be engaged in the active conduct of a trade or business at a qualified business site within the governing board's jurisdiction located outside of an enterprise zone and at least thirty -five percent (35 %) of the business' new employees will be residents of an enterprise zone or economically disadvantaged individuals; and 2. There has been and will continue to be a high level of cooperation between public, private, and neighborhood entities within the area; and 3. The designation of TYSON as an enterprise project will contribute significantly to the achievement of the plans of the City for development and revitalization of the area. WHEREAS, the City finds that TYSON meets the criteria for tax relief and other incentives adopted by the City and nominates TYSON for enterprise project status on the grounds that it will be located at the qualified business site, will create a higher level of employment, economic activity and stability; and WHEREAS, the City finds that it is in the best interest of the City to nominate TYSON as an enterprise project pursuant to the Act; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: That the findings of the City and its actions approving this resolution taken at the council meeting are hereby approved and adopted. BE IT FURTHER RESOLVED that TYSON is a "qualified business" as defined in Section 2303.402 of the Act, and meets the criteria for designation as an enterprise project, as set forth in Section 2303, Subchapter F of the Act. BE IT FURTHER RESOLVED that the enterprise project shall take effect on the date of designation of the enterprise project by the agency and terminate on March 31, 2019 PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS this 24th day of February, 2014. Iy11 W901M24 [0]:i111:INIs]:Iwilkq l III: III In ►:ri III =36 Patricia Hutson, City Secretary ►: l,,: t0l 1FA=1ll rila %]01NLTJK124 IQ111I =10il411 wE George A. Staples, City Attorney 0 :1= t 0l►I =1 I TTI a %I K 0I ,1111 =1124 11 i l Craig Hulse, Economic Development Director Oscar Trevino, Mayor IW:4:ll:►11 r-► ORDINANCE NO. 3010 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, AUTHORIZING THE CITY OF NORTH RICHLAIN'D HILLS TO PARTICIPATE IN THE 'TEXAS ENTERPRISE ZONE PROGRAM PURSUANT TO THE TEXAS ENTERPRISE ZONE ACT, CHAPTER 23103, TEXAS GOVERNMENT CODE ( "�AC�T"), PROVIDING, POSSIBLE TAX INCENTIVES,, IDESIGNATING, A ILIAISON FOR COMMUNICATION 'WITH THE INTERESTED PARTIES, AND NOMINATING, TYSON PREPARED FOODS, INC. TO THE OFFICE OF THE GOVERNOR, ECONO MIC DEVELOPMENT AND TOURISM ( "010GEDT ") THROUGH THE ECONOMIC DEVELOPMENT BANK ( "BANK ") AS AN ENTERPRISE PROJECT ( "PROJECT " "). WHEREAS, the City Council of the City of North Riiclhilaind Hills, Texas (the "City ") desires to create the proper economric and social environment to induce the investment of private resources in ,productive business enterprises located in the City and to (provide employment to residents of the City; and 'WHEREAS, the Project is not located in an area designated as an enterprise zone; and WHEREAS, pursuaint to Chapter 23103, Subchapter F of the Act, Tyson Prepared Foods, Inc. has applied to the City for designation as an Enterprise Project; and WHEREAS, the City finds that Tyson Prepared Foods, Inc. could meet the criteria for tax relief and gather incentives adopted by the City on the grounds that it is located at a qualified business site, will create a higher level) of employment, economic activity and stability; and WHEREAS, a public hearing to consider this ordinance was Iheld by the City Council of the City of (North IRichland Hills, Texas on August 26, 2338, NOW, THEREFORE,, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RIICIHILANID HILL'S, 'TEXAS: SECTION 1 The City nominates Tyson Pirepared (Foods, Inc. for Enterprise Project status. SECTION 2. The local incentives iidentified and summarized briefly in the attached Exhibit A, at the election of the governing Ibod^y, are or could be imade available to the nominated Project or activity of a qualified business. SECTION 3. The City of (North Richland Hills City Council directs and designates the Director of Economic Development or his designee as the City's haiison to communicate with the 00GEIDT through the Bank and Enterprise Ordinance 'No, 30110 Page 4 of 4 Projects) and to communicate with qualified businesses and other entities affected by an Enterprise Project. SECTION 4. The City finds that Tyson (Prepared Foods, (Inc. meets the following criteria for designation as an Enterprise Project sunder Chapter 2303Y Subchapter F of the Act on the following grounds (a.) Tyson (Prepared Foods, Inc. is a "qualified Ibusiness" under Section 2803.402 of the Act since it will be eingaged in the active conduct of a trade or business, at a qualified business site within the governing body's jurisdiction, located outside of an enterprise zonle and has committed than at least thirty -five percent (35 %) of the (Mussiness" new eimployees will be Iresidents of an enterprise zone or ecoinomlically disadvantaged individuals; and (b. There has been and will continue to be a (high Revell of cooperation between Ipublic, (private„ and neighlborhoodl entities in the area„ and (c) The designation of Tyson Prepared Foods, Inc. as an Enterprise Project will contribute significaintly to the achievement of the Iplans of the City" for development alnd revitalization of tlhe area. SECTION 5, The Enterprise Project shall take effect on September 2, 2008 and terminate on September 2, 2013. PASSED AND APPROVED on this the 26th day of August, 2 0 L ..� r �i ry.'"kTES, " Wr � N 40, Q Patricia Hutson, City Secretary QWUMI � . , :A:1 w e A. StapleslCity Attorney APPIO VeEconomic S TO CONTENT: Crali IDevelopment Director Ordinance No, 3010 Page 2 of 4 r Tirevino, Mayor &Exhillblt A Ordinance No. 3010 IPage 3 of 4 Local Sates and 'Use The City may allow sales and use On Case By Case 1 Tax Refunds tax refunds. Basis On Case By Ca—se- 2 .—Tax.Abatement Property tax abqateiment, Basis Property tax exemption for Freeport 3 Fireeploq em Lion p �Citywide Sales Tax for Crime Control and Prevention District, Parks, and Recreation Development District and On Case By Case 4 4B Sales Tax Economic Dievel10 pirneint Basis The City may make zoning chainges Zoning to expedite the development On Case By Case 5 Chan qs./Vanances, R�qc�w Basis The City may provide certain �Building Code building code process exemptions, to On Case By Case 6 Process IBxem tions expedite the devellp anent recess. Basis Impact/ Inspection The City imay exempt impact/ On Case IBy Case 7 —Fee IBxem ptions inspection fees. Basis The City may strearnfline permitting Streamlined procedures to promote economic 8 Permitting activity. Cit ywide Improved Fire and Safety and protection of City ,9 Police Protection residents, Citywide Crime Control andl Prevention District, Neighborhood Watch Community Crime Programs, CrimeReports.coirn, and 10 Prevention Programs Crimeweb.net Capital Improvements In The City may provide resources, for Water and Sewer a capital improvement plan related On Case By Case 11 Facilities to water and sewer service. Basis The City is responsible for maintaining and repairing public 12 ..-Road R epair streets and alleys inside City limits. Citywide _ Parks and Recreation levellopment Creation or District, to develop and imaiintalin Improvement of Jor parks and promote healthy lifestyle 13 ...— Parks City residents,, Cit Provision of Plublicly Owned Land for Development he City may provide Ipulbliiclly owned' On Case By Case 14 —jeurposes land for development rwirooses. Bi.q Ordinance No. 3010 IPage 3 of 4 Exhibit A (continued) Ordinance No. 3010 Page 4 of 4 Name of Incentive nnie-Stop Pleirmitting, Description of Incentive Availability Problern Resolution The City may offer oine-stop 15 —Center irmitti Cut %+ de Promotion nd Northeast Tarrant Chamber of _L6 �Mairkleti p� �Tin Slervice Commerce, it wide Job Training and Employment Offered through ATI-Career Training W.—Seirvices .—Center, and Tarrant Ggynt y College. it��ide differ'e'd through ATI-Caireer Training 18 Retraining Pro ram Center, and Tarrant Coup 'e . G�ywide Literacy and Employment Skills Offered through ATI-Career Training 19 Services Center, and Tarrant Count y CoIIle �e, Offered throlugh ATI-Career Training 20 Vocational Education Ce-nter, and Tarrant Coun!y College, q j ,Custoim,ized Job Offered through ATI-Careeir Training 21 —Training Center, and Tarrant County Colle e. L?2 Infrastructure The City may provide infrastructure On Case By Case J�R Irn rovemen tsIMp rovements for in'dustri'es. Basis Ordinance No. 3010 Page 4 of 4 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. F.2 Approval of Continued Participation in Tarrant County's HOME Investment Partnership Program - Resolution No. 2014 -006 Presenter: Kristin James, Assistant to the City Manger Summary: 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 2014. 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 2014 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. 2014 -006 to continue the participation in Tarrant County's HOME Investment Partnership Program with $36,000 dedicated to the 30% match requirement. NRH RESOLUTION NO. 2014 -006 AGREEING TO MEET ALL MATCH CONTRIBUTION REQUIREMENTS FOR THE EXPENDITURES UNDER THE TARRANT COUNTY HOME INVESTMENT PARTNERSHIPS PROGRAM FOR PROGRAM YEAR 2014 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 24th day of February, 2014. Is] IW9 07M24 [0]:i111:INIs]:Iwilkq lIl:llII&I ATTEST: Patricia Hutson, City Secretary Oscar Trevino, Mayor : 11 011FA = 1ITTIa 110]010 Lh VA24II]I =10il411 wE George A. Staples, City Attorney 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. F.3 Approve Resolution to Authorize Investment Officers - Resolution No. 2014 -004 Presenter: Laury Fiorello, Assistant Finance Director Summary: This resolution will update current investment officer authorizations. General Description: As a result of a recent change in the Accountant II position, a resolution is required amending the list of approved investment officers. The following employees are recommended to be included on the list of authorized individuals who can conduct investment transactions with authorized securities dealers, banking institutions, overnight pools, and custodial and safekeeping service institutions: Director of Finance Larry Koonce Assistant Director of Finance Laury Fiorello Accountant II Amanda Brown The proposed resolution authorizes the City Manager to execute the forms which designate these individuals as the City representatives for investment transactions. Recommendation: To approve Resolution No. 2014 -004. 10114" il. RESOLUTION NO. 2014 -004 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: SECTION 1. THAT the following officers of the City of North Richland Hills, Texas are hereby authorized to execute all investment transactions of the City with all securities dealers, banking institutions, investment pools, and custodial and safekeeping service institutions approved by the "City" investment committee in accordance with City's investment policy. Larry Koonce Director of Finance Signature Laury Fiorello Assistant Director of Finance Signature Amanda Brown Accountant II Signature SECTION 2.THAT the above officers of the City of North Richland Hills, Texas are hereby authorized to execute the Texpool, TexStar, TexasTerm, and Logic Resolutions (Investment Pools) forms amending Authorized representatives on behalf of the governing body of the City. SECTION 3. THAT the City Manager is hereby authorized to execute the amendment forms. PASSED AND APPROVED this the 24th day of February, 2014. CITY OF NORTH RICHLAND HILLS ATTEST: Patricia Hutson, City Secretary Oscar Trevino, Mayor 1= l,,: t0l 1FA=1ll rila %]01NLTII=A24 I III I =10il411 WE George A. Staples, City Attorney 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. F.4 Presentation of Fiscal Year 2013 Audited Financial Report Presenter: Laury Fiorello, Assistant Finance Director Summary: The results of the fiscal year (FY) 2013 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 BKD, LLP will present the audit opinion. General Description: A copy of the CAFR is attached. 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 2013 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 compact disc from the Finance Department and hard copies will be available at the North Richland Hills City Hall and Library. Recommendation: Accept the 2013 fiscal year Audited Financial Report as presented. Cover Photographs: Top row,, from left, Green Valley Raceway, First NRH paid Police Force Midd�le Row: Smithfield Volunteer Fire Deipt�. (1950's), Rufus Snow, Smithfield Elementary Students, (2nd grade, 1952), The Ed Walker house, 1914 (present location of Amundson Road and Main Street), Clarence Jones (develop Bottom, row: NRH 60th Anniversary Logio, Ladies of the Smithfield ome Demonstration Club (1930s), First Plat • the Clarence Jones neighborhood clevelopment (1954) 1 The report cover design is a collaboration between the City Manager's Office, the NPH Finance and Budget Department and the NRH Parts and Recreation Department CITY OF NORTH RICHLAND HILLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 20'13 City Officials Oscar Trevino Mayor Tito Rodriguez Place 1 Mayor Pro Tern Rita Wri ght 0ujesky Tom Lombard Place 2 Place 3 Dr. Tim Barth David Whitson Place 4 Place 5 Scott Turnage Tim Welch Place 6 Place 7 Mark Hindman City Manager Karen Bostic Assistant City Manager Jimmy Perdue Director of Public Safety Mike Curtis Managing Director for Development Services Larry Koonce Director of Finance Prepared by: Finance Department NC+)RTH RICHLAND H I L L 5 City of Ctioice ACKNOWLEDGEMENTS The Comprehensive Annual Financial Report was prepared by the Department of Finance Office of Accounting: Karen Bostic Assistant City Manager Larry Koonce, CPA, CGFO Director Financial Reporting Staff: Laury Fiorello, CGFM, Assistant Director Phyllis O'Neal, Finance Assistant Amy Stephens, Accountant II Huibi Wang, Accountant I Pamela Knapp, Accounting Technician Amanda Brown, Accounting Technician Special appreciation is given to: Budget and Research Department Mark Mills, Director Jennipher Castellanos, Senior Budget Analyst Christopher Smith, Budget 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, 2013 Pa e s Title Page I Table of Contents III - V INTRODUCTORY SECTION Letter of Transmittal Ix- Xil I GFOA Certificate of Achievement XIV Organization Chart XV List of Principal Officials XVI FINANCIAL SECTION Independent Auditors' Report 1 - 3 Management Discussion and Analysis 4-15 BASIC FINANCIAL STATEMENTS Government -wide Financial Statements: Statement of Net Position 19 Statement of Activities 20 Fund Financial Statements: Balance Sheet - Governmental Funds 21 Reconciliation of the Balance Sheet of Governmental Funds to the Statements of Net Position 22 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 23 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 24 Statement of Net Position - Proprietary Funds 25 Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds 26 Statement of Cash Flows - Proprietary Funds 27 Statement of Net Position - Fiduciary Funds 28 Statement of Revenues, Expenses, and Changes in Net Position - Fiduciary Funds 29 Notes to Basic Financial Statements 31 -63 City of North Richland Hills, Texas Table of Contents REQUIRED SUPPPLEMENTARY INFORMATION: Texas Municipal Retirement System Plan - Schedule of Funding Progress North Richland Hills 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 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 Parks and Recreation Development Corporation Fund Promotional Fund Donations Fund Special Investigations Fund Drainage Utility Fund Crime Control District Fund Gas Development Fund Traffic Safety Fund Internal Service Funds: Combining Statement of Net Position Combining Statement of Revenues, Expenses, and Changes in Net Position Combining Statement of Cash Flows STATISTICAL SECTION Government -Wide Information: Net Position by Component Changes in Net Position IV Table 1 Table 2 Pa e s 67 68 69 70 -72 74 -75 76-77 78 79 80 81 82 83 84 85 86 LIM -me 93 94 -97 City of North Richland Hills, Texas Table of Contents Fund Information: Pa e s Fund Balances - Governmental Funds Table 3 99 Changes in Fund Balances - Governmental Funds Table 4 100-101 Appraised and Taxable Value of Property Table 5 102 -103 Property Tax Rates - Direct and Overlapping Governments Table 6 104 -105 Principal Taxpayers Table 7 107 Property Tax Levies and Collections Table 8 108 -109 Ratios of Outstanding Debt by Type Table 9 110 Computation of Direct and Overlapping Debt Table 10 111 Computation of Legal Debt Margin Table 11 112 Pledged Revenue Coverage Table 12 113 Demographic Statistics Table 13 114 Principal Employers Table 14 115 Full -time Equivalent Municipal Employees by Function /Program Table 15 117 Operating Indicators by Function /Program Table 16 118 -119 Capital Asset Statistics by Function /Program Table 17 120-121 v This page intentionally left ,blank. Introductory Section N FAH Vil This page intentionally left ,blank. viii N o K °F °ua K ris I- FI..A'N a F1 F LI - S "INRH TH F CITY OF CHOICE February 24, 2014 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, 2013. This report consists of City management's representations concerning the finances of the City. Consequently, management assumes full responsibilityforthe 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 generally accepted accounting principles ("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 BKD, 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, 2013, 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, 2013, 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 thefinancial 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 accompanythe basic financial statements in the form of Management's Discussion and Analysis ("MD &A "). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditors. P.O. Box 820609 ® North Richland Hills, Texas ® 76182 -0609 7301 Northeast Loop 820 ® Finance ® 817- 427 -6166 ® Fax 817- 427 - 6151 ix Profile of North Richland Hills The City, incorporated in 1953, is a growing community located in the heart of the Dallas/Fort Worth Metropl ex. The City's estimated population is 63,455 for 2013. 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 U5 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 byline 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 anyfund. 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 69 in the required supplementary information segment of the financial statements. The comparisons for other governmental funds with appropriated annual budgets are presented in the other supplementary information of this report. x Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City operates. 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. Localeconomy—North Richland Hills (NRH) continued to expand as all major economic indicators are trending in the right direction. The City remains geographically positioned as the main link between bustling downtown Fort Worth and affluent Northeast Tarrant County. Neighboring the high growth Cities of Colleyville, Keller and Southlake; the City of NRH remains not onlythe largest City in Northeast Tarrant Countywith 64,240 people, but it is expected to eclipse 85,000 people within the next two decades. In 2013, NRH was able to attain pre - recession unemployment levels at just under 5% while increasing its labor force by 2.6 %. The City unemployment rate continues to be much lower than Tarrant County, the ❑FW Metro and Texas. This year also witnessed continued growth in taxable sales, taxable property values and new home starts. Compared to the previous fiscal year taxable sales grew by 2.4 %, a $20 million increase. This figure is all the more significant given the road construction along Northeast Loop 820 where 33% of the City's tax generating business is located. Taxable property value grew for the 3rd straight year, this time over $123 million of which 47% was from new construction. Finally, the City continues steady growth adding another 200 new single family homes valued over $300,000 with two new high end multi - family residential projects in the master planned Home Town area. Like last year, this residential growth was only exceeded by the City of Keller in Northeast Tarrant County. The City maintains a diverse mix of business with eleven primary employers representing 5,000 full time jobs within the healthcare, aerospace and supply chain sectors. Notably the City recently welcomed Portfolio Recovery Associates (NASDAQ: PRAA) with plans to add 400 full time salaried positions to the region's financial sector. The City also anticipates significant growth in new commercial development as construction is expected to begin on two grocery anchored shopping centers scheduled to open in 2015. Commercial redevelopment is also in progress as the expansion of Northeast Loop 820 is now 75% complete and expected to be finished mid -2015. Numerous dining, entertainments, hospitality and recreation uses are in the planning stages and poised to take advantage of the expanded highway. 2014 is projected to be another significant year as the highway project will continue to overshadow select businesses within the construction zone; it continues to facilitate the redevelopment and revitalization of commercial property. The year will also mark the first year of City Point, the master planned commercial area south of Northeast Loop 820 anchored by the new NRH Municipal complex scheduled for completion January 2016. Long -term financialplanning— 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 anew 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, 2016. 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 X1 City Council and management believe development of these projects is needed to improve infrastructure and provide essential services to its citizens. The projects are expected to continue through the year 2011. At least annually, management reviews and updates long -range financial plans for the general operations of the City as well as the proprietary activities. Forecasts are prepared using conservative growth estimates for major sources of revenue. Maintaining this conservative approach, coupled with an aggressive debt repayment policy, have assisted in the City 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 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 primarilyto 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. NRH2O, the City's Waterpark, has funded some new attractions and infrastructure improvements by utilizing cash reserves accumulated from operations. Cash management policies and practices –The City's current bank depository contract 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 yearwas 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 2013 was 0.06 %. The overnight investment's weighted portfolio average at the end of the fiscal year was 57 days. The average yield on all other investments for fiscal year 2012 was 0.41 % compared to 0.79% for the prior year. The portfolio's weighted average maturity ("WAM ") for all other investments at the end of the fiscal year was 512 days, which represents a 266 day increase over last year's WAM which was 246 days. At fiscal year end, approximately 34.3% was invested beyond one year, 26.1% was invested for one year or less, while the remaining 59.4% was invested in the overnight market. The City continues to use the services of PFM Asset Management, LLC as an investment advisor and overseer of our portfolio, which began on October 1, 2009. Risk management — The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. While the City has historically retained a portion of these risks, coverage exists for: general, employment practice, law enforcement, and errors and omissions liability; excess workers' com pensation; 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 policywith respect to health claims. This policy covers City medical claims in excess of $175,000 per individual per year, and/or $6,977,147 in the aggregate for a 12 -month period beginning on January 1, 2013. Self- Insurance Fund claims are funded by charges to other funds and employee, retiree, and dependent premiums. Additional information on the City risk management activity can be found in the notes to the basic financial statements. Pension and otherpost- employment,benefifs— The City participates in the Texas Municipal Retirement System ("TM IRS"), an agency authorized by the State of Texas. Employees of the City contribute a fixed percentage of xii 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 TM RS prior to five years of credited participation, they m ay withdraw from TM RS those funds they contributed plus interest earnings. The City also provides postretirement health and dental care benefits for certain retirees and their dependents. As of the current fiscal year, therewere 119 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, 2012. 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 thirty 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 2013 for the 2013 -2014 operating budget. The Distinguished Budget Presentation award was granted to the City for the twenty-third consecutive year by the GFOA. Acknowledgments — Timely preparation of this Comprehensive Annual Financial Report was made possible by the dedicated service of the Finance Department staff and our independent auditors. We would like to express sincere appreciation to those who contributed to the process. In closing, the continued leadership and support of the Mayor, City Council, and City Manager in planning and conducting the financial operation of the City is sincerely appreciated. Respectfully submitted, r,r Larry Koonce Director of Finance X111 G Laury Fiorello Assistant Director of Finance Government Finance Officers Association C ertificate of Achievement for Excellence in Financial Presented to City of North Richland Hills Texas For its Comprehensive Annual�. Financial. Report . for the Fiscal Year Ended. September 30, 2012 Executive Director/CE0 xiv CITUIENS Mayor & Council Municipal Court Judge City City •Secretary City Attorney Boards & Commissions Manager Economic Assistant to the Development C4 Manager Assistant director , OV City Manager Public Safety — Finance Department Police Department • Accounting • Police • Purchasing • Detention • Utillity Customer Svc. • Dispatch — Budget Department Fire Department • Budget Development • Fire Department • internal Audit • Emergency Migmt. • Tax (Tarrant County) — information Services Neighborhood Services • Computers / Network • Code Compliance • Telephone • Animal Services • Technology — Public Information Functional Responsibility • Citicabl'e • Municipal Compiex Development • Animal' ervices Facility Project Municipal Court • Municipal) Court • Teen Couir, Facifity/Coinst. Mgmt. • Construction Mgmt, fleet Services Functional Responsibility • Fire Equip. Maint. • Franchises • Legislative Analysis • Minerals /' Gas — — — — — — — — — — I I I Solid Waste 11 — — — — — — — — — — — L Managing Director of Development Human Resources • Employment • Risk Management • Civil Service Parks & Recreation t�llbrary • Richillaind Tennis Center Golf Course • NRH20 GO V Public Works • Streets • Traffic • Engineering Utilities • Water • Sewer Planning & Zoning • Planning • 'Zoning Building inspections • Building Inspection • Rental inspection • Permits Functional Responsibility • Development Review Committee • Tarrant Regional Transp, Coalition • Regional Transportation Council • Water Utilities — Fort Worth/TRA • Rail Initiatives LEGEND -Appointed By City Council ------- — U — I II_ Contracted --- I ----------- CITY OF NORTH RICHLAND HILLS, TEXAS List of Principal Officials September 30, 2013 MAYOR OSCAR TREVINO MAYOR PRO TEM, COUNCIL MEMBER, PLACE 1 TITO RODRIGUEZ COUNCIL MEMBER, PLACE 2 RITA WRIGHT OUJESKY 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 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 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 xv i Financial Section N FAH This page intentionally left ,blank. Independent Auditor's Report The Honorable Mayor and Members of the City Council City of North Richland Hills, Texas North Richland Hills, Texas Report on the Financial Statements We have audited the accompanying basic financial statements of the governmental activities, the 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, 2013 and the related notes to the basic financial statements, which collectively comprise the City's basic financial statements listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business - type activities, each major fund, and the aggregate remaining fund information of the City as of September 30, 2013, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the financial statements, in 2013 the City adopted new accounting guidance, Governmental Accounting Standards Board Statement No. 65, Items Previously Reported as Assets and Liabilities. Our opinion is not modified with respect to this matter. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary and pension/other post - employment benefit information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not 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. Supplementary Information 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 fund statements and budget to actual schedules listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic 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 basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole. Other Information Our audit was performed for the statements as a whole. The sections listed in the table o is not a required ,part of the subjected to the auditing pr and accordingly, we do not Dallas, Texas February , 2014 )urpose of forming opinions on the basic financial tpanying information in the introductory and statistical ents is presented for purposes of additional analysis and financial statements. Such information has not been res applied in the audit of the basic financial statements, ss an opinion or provide any assurance on it. CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2013 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 19). Financial Highlights • The assets of the City exceeded its liabilities at the close of the fiscal year ended September 30, 2013 by over $322.8 million (net position). Of this amount, approximately $47 million (unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors. • The City's total net position increased by $2.8 million in fiscal year 2013. Additional details of this increase may be found beginning on page 20. • As of September 30, 2013, the City's governmental funds reported combined fund balances of $100,042,648 which represents an increase of $5,014,847 in comparison to the prior fiscal year's ending balance. • Approximately 30.4% of total governmental fund balance, or $30,430,151, 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 $9,186,072 or 23.6% of General Fund actual expenditures for 2013. • The City's total debt increased by approximately $314,000 during the current fiscal year. This increase represents issuance of $9,845,000 in general obligation bonds, net of scheduled principal payments. 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 Position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial condition of the City is improving or deteriorating. The Statement of Activities presents information showing how the City's net position changed during the fiscal year. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned, unused vacation leave). Both the Statement of Net Position and the Statement of Activities are prepared using the accrual basis of accounting as opposed to the modified accrual basis used in governmental funds. CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2013 In the Statement of Net Position and the Statement of Activities, the City's operations are separated into two types of activities: • Governmental activities - Most of the City's basic services are reported here, including the activities of public safety, culture and recreation, public works, and general government. Property taxes, sales taxes, and franchise fees finance most of these activities. • Business -type activities— For this type of activity, the City charges a fee to customers to cover all or most of the cost of services provided including the recovery of costs of capital assets used in the delivery of such services. The City's water and sewer, golf course, and aquatic park activities are reported here. The government -wide financial statements can be found on pages 19 — 20 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, bond covenants, or Council ordinance. 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 Position 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 21 - 24). The General Fund, General Debt Service Fund, General Capital Projects Fund, Parks and Recreation Development Fund, and Tax Increment Finance District No. 2 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. Proprietary funds - The objective of proprietary funds is to charge customers, both internal and external, for services provided an amount sufficient to cover virtually all costs associated with providing the services including recovery of amounts required to replace assets used in the delivery of such services. These services are generally reported in proprietary funds. Proprietary funds are reported in the same manner that all activities are reported in the Statement of Net Position and the Statement of Activities. In fact, the City's enterprise funds (a component of proprietary funds) are almost identical to the business -type activities that are reported in the government -wide statements, but provide more detail and additional information, such as the statement of cash flows. The internal service funds (the other component of proprietary funds) are utilized to report activities that provide supplies and services for the City's other programs and activities, such as the City's facilities maintenance and construction 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 has two major CITY OF NORTH RICHLAN❑ HILLS, TEXAS Management's Discussion and Analysis September 30, 2013 proprietary funds: Utility and Aquatic Park. Golf course is considered a non -major fund. Financial statements for the enterprise funds can be found on pages 25 - 27 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 31 - 63 of this report. Government -Wide Financial Analysis The government -wide financial analysis highlights the information contained in the Statement of Net Position and Statement of Activities. The City's combined net position was $322,850,762 as of September 30, 2013. Analyzing the net position of governmental and business -type activities separately, governmental activities total net position was $236,290,851 and business -type activities total net position was $86,559,911. This analysis focuses on the net position and changes in program and general revenues and significant expenses of the City's governmental and business -type activities. Statement of Net Postion -The largest portion of the City's net position (82.85 %) reflects its net 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 position as of September 30, 2013 and 2012. Current and other assets include restricted deposit and investment balances. Schedule ofAssets, Liabilities, and Net Position Amounts shown in thousands ($000's) As of September 30, Net Position: Net investor ents in capital assets 205,398 205,162 62,044 62,615 267,442 267,777 Restricted 4,624 4,253 3,762 2,711 8,386 6,964 Unrestricted 26,269 22,597 20,754 22,706 47,023 45,303 Total net position $ 236,291 $ 232,012 $ 86,560 $ 88,032 $ 322,851 $ 320,044 (1) Beginning Governmental Activities amounts have been adjusted in conjunction with the implementation of a new accounting standard, GASB Statement No. 61. (2) Beginning Governmental and Business -type Activities amounts have been adjusted in conjunction with the implementation of new accounting standards, GASB Statement No. 63 and No. 65 (see footnote I.d.). 6 Govemmental Activities Business -Type Activities Total 2012, 2012, 2012, 2013,(2) restated (1) 2013, (2) restated (1) 2013,(2) restated (1 ) Current and other assets $ 117,263 $ 111,386 $ 40,503 $ 40,452 $ 157,766 $ 151,838 Capital assets, net 240,792 239,873 73,815 74,262 314,607 314,135 Total Assets 358,055 351,259 114,318 114,714 472,373 465,973 Total deferred outflows of resources 263 330 21 26 284 356 Long -term liabilities 106,562 103,613 20,960 21,939 127,522 125,552 Other liabilities 15,234 15,707 6,774 4,720 22,008 20,427 Total liabilities 121,796 119,320 27,734 26,659 149,530 145,979 Total deferred inflows of resources 231 257 45 49 276 306 Net Position: Net investor ents in capital assets 205,398 205,162 62,044 62,615 267,442 267,777 Restricted 4,624 4,253 3,762 2,711 8,386 6,964 Unrestricted 26,269 22,597 20,754 22,706 47,023 45,303 Total net position $ 236,291 $ 232,012 $ 86,560 $ 88,032 $ 322,851 $ 320,044 (1) Beginning Governmental Activities amounts have been adjusted in conjunction with the implementation of a new accounting standard, GASB Statement No. 61. (2) Beginning Governmental and Business -type Activities amounts have been adjusted in conjunction with the implementation of new accounting standards, GASB Statement No. 63 and No. 65 (see footnote I.d.). 6 CITY OF NORTH RICHLAN❑ HILLS, TEXAS Management's Discussion and Analysis September 30, 2013 Statement of Activities - Governmental activities increased the City of North Richland Hills' net position by $4,279,015 in fiscal year 2013, and business -type activities decreased net position by ($1,472,252). The following table presents the condensed government -wide statement of activities for the years ended September 30, 2013 and 2012. Changes in Net Position Amounts shown in thousands (000's) Year Ended September 30, Governmental Activities Business -Type Activities Total 2012, 2012, 2012, 2013, (2) restated (1) 2013,(2) restated (1) 2013, (2) restated (1) Revenues: Program revenues: Charges for services $ 13,640 $ 12,230 $ 36,909 $ 35,438 $ 50,549 $ 47,668 Operating grants and contributions 2,545 1,833 139 81 2,684 1,914 Capital grants and contributions 2,939 7,402 7 51 2,946 7,453 General revenues: Property tax 24,126 22,223 - - 24,126 22,223 Sales tax 17,360 16,974 17,360 16,974 Nixed beverage 117 102 117 102 Franchise taxes 4,167 4,269 4,167 4,269 Occupancy taxes 221 210 - - 221 210 Unrestricted investment earnings 259 301 81 50 340 351 Miscellaneous 205 288 5 7 210 295 Total revenue 65,579 65,832 37,141 35,627 102,720 101,459 Expenses: General government 10,656 10,400 - - 10,656 10,400 Fublic safety 30,612 28,881 30,612 28,881 Culture and recreation 11,634 11,680 11,634 11,680 Fublic w orks 8,399 7,794 8,399 7,794 Interest and other fees 3,674 3,453 - - 3,674 3,453 Utility - - 27,623 26,642 27,623 26,642 Aquatic park 4,749 4,754 4,749 4,754 Golf course - - 2,566 2,430 2,566 2,430 Total expenses 64,975 62,208 34,938 33,826 99,913 96,034 Increase in net position before transfers 604 3,624 2,203 1,801 2,807 5,425 Transfers betty een governmental and Business -Type 3,675 3,385 (3,675) (3,385) - - Net Increase (decrease) in net position 4,279 7,009 (1,472) (1,584) 2,807 5,425 Net position - beg. Bal. 232,988 218,816 88,283 89,867 321,271 308,683 Adjustmentto begin ning net position (976) 7,163 (251) - (1,227) 7,163 Net position - end of year 236,291 232,988 86,560 T 887283 322,851 321,271 (1) Beginning Governmental Activities amounts have been adjusted in conjunction with the implementation of a new accounting standard, GASB Statement No. 61. (2) Beginning Govemmental and Business -type Activities amounts have been adjusted in conjunction with the implementation of new accounting standards, GASB Statement No. 63 and No. 65 (see footnote I.d.). Governmental activities - Governmental activities increased the City of North Richland Hills' net position by approximately $4.2 million in fiscal year 2013. The City had an increase in tax revenues of $2,212,698 during 2013. Charges for services increased by 11.5% or approximately $1.4 million over 2012 revenues. The increase was correlated with increase in housing starts, a multi - jurisdictional consolidation of public safety services, and the opening of a new recreation facility. The total expenses for governmental activity increased by approximately $2.8 million over 2012 totals. The increase to expenses for governmental activities is correlated to several cost drivers. Interest and fiscal charges increased by 6% or $221 thousand over the 2012 expenditures levels. 2013 was the first year with higher interest costs due to the large bond issued late in 2012 (approximately $34 million in new debt) for the 2012 Bond Election that approved a new city hall facility. Public safety saw an increase of $1,729,936 or 5.99% in additional expenses compared to the 2012 fiscal year. Several factors contributed, including but not limited to, an increase in salary scales for all certified officers 7 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2013 to bring to market levels, a full year of multi - jurisdictional consolidated services expenditures, and various equipment upgrades (i.e. radio equipment). Public works encompassed the rest of the governmental activities expense increase. This division increased overall expenses of 2013 over 2012 by $604,372 or 7.75% increase over prior year levels. This section of general government saw an increase to overall maintenance expenses for street and infrastructure. A majority of these repairs did not qualify for capitalization and therefore were recognized as costs to the division. Operating grants and contributions increased by $712 thousand from fiscal year 2012 to 2013, while capital grants and contributions decreased by $4.5 million from 2012 to 2013. Operating grants and contributions increase resulted from higher revenues for the consolidated services center (dispatch and detention center) with three other local municipalities. Their increase in contributions to offset operational costs is a direct result from having the first full year of consolidated services and thus having a full year of operational costs reimbursed. However, the decrease in capital grants and contributions was predicted and expected. Major grant funded capital street projects finalized or neared the end of life during the 2012 fiscal year. No other major grant funded infrastructure projects were started to maintain the same level of funding as the previous year. A significant increase in tax revenue relates directly to Property taxes. Property taxes for the City increased approximately 8.6% or $1,903,448 from 2012 to 2013 fiscal year. The City Council passed a higher millage in 2012 for the 2013 fiscal period. The City has seen new construction and valuations of property values increase during that same time period as well. Both of these reasons contributed to higher property tax revenues. Sales and mixed tax beverage taxes increased by $401,220 from fiscal year 2012 to 2013. Increase in the City's retail base and a healthy Texas economy supported this upward trend. Franchise taxes realized a decrease of ($102,650) from 2012 to 2013. This decline is directly associated with electrical franchise fees received. Electrical franchise fees are negotiated a year in advance so therefore 2013 receipts were projected on 2012 consumer history. The electrical prices for this utility have trended downward, and thus consumers are paying less for the same amount of usage. This section of this page is intentionally left blank. Management's Discussion and Analysis is continued on the next page. CITY OF NORTH RICHLAN❑ HILLS, TEXAS Management's Discussion and Analysis September 30, 2013 General Revenues by Source _ Governmental Activities !Unrestricted 9 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2013 Business -wine activ►fies — Business -type activities resulted in a decrease to the City's total net position. The 2013 decrease was ($1,472,252). Overall the Utility operations (before general revenues and transfers to governmental activities) was an increase of $2,676,561. Aquatic park and Golf course both had net decreases in net position (before general revenues and transfers to governmental activities) of ($372,300) and ($188,331), respectively. Utility fund implemented the final phase of utility rate increases. The rates have sufficiently covered operational costs and overhead for this section. Aquatic park and Golf course operations are funded by consumers who utilize the facilities of both of these programs. The facilities and equipment provided are all in the outside environment. 2013 summer season had unforeseen rainy weather which prohibited full usage by the consumers. Aquatic park admissions and golf course golf rounds were both down because of the wetter weather. However, sporadic weather conditions do not impede the need to maintain equipment and golf course even when usage is down. Overhead remained stable while revenues came in under projections. A majority of the decrease in net position is directly related to net transfers out of business -type activities to governmental activities for shared costs of administration, finance, and indirect costs. This section of this page is intentionally left blank. Management's Discussion and Analysis is continued on the next page. 10 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2013 Fund Level Financial Analysis Governmental Funds. The focus of the City of North Richland Hills' governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, the unassigned fund balance may serve as a useful measure of a government's net resources available for discretionary use as they represent the portion of fund balance which has not yet been limited to use for a particular purpose by either an external party, the City's Council itself, or the designated individual delegated the authority to assign resources for use for particular purposes (Council Designated). At September 30, 2013, the City's governmental funds reported combined fund balances of $100,042,648, an increase of $5,014,847 in comparison with prior year. Unassigned fund balance, $9,186,072, is available for spending at the government's discretion. The remainder of the fund balance is either nonspendable, restricted, committed, or assigned to indicate that it is 1) not in spendable form ($696,277), 2) legally required to be maintained intact or to be used for a particular purpose ($64,754,901), 3) committed for particular purposes ($4,161,319), or 5) assigned for particular purposes ($21,244,079). The general fund is the chief operating fund of the City. For 2013, the general fund unassigned fund balance was $9,186,072. Total general fund balance increased $613,509 for 2013. Unassigned fund balance represents approximately, 23.6% of total general fund expenditures, while total fund balance represents 38.3% of that same amount. rfI CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2013 The general fund's modest increase was at the result in receiving more than anticipated tax revenues ($277,291), licenses and permits ($220,130), and intergovernmental ($700,137) revenues. Though operational expenditures increased by approximately 3.84% or $1.4 million, the fund ended with a fund balance increase. The reason for the positive growth is threefold, the first being that departments were instructed to maintain current expenditure amounts 2012 level, and revenue sources above came in above projections. Second, tax revenues increases are directly associated to a large retail base and economic recovery of the sales environment as well as a higher property value and a higher adopted millage rate for 2013. Third, the shared services public safety services (intergovernmental revenues) with three contiguous municipalities, all contributed to the increase to general fund balance for 2013. The General Capital Projects fund increased governmental fund balance by approximately $2.9 million. The City did issue an additional $9,845,000 million in new general obligation debt that remained unused at year end, however, prior bond issuances are now being utilized and capital outlay expenditures are being realized. Thus the gain is a combination of retaining newly issued bond proceeds, while outflows of older bond funds are recognized. General Debt Service fund saw an increase to fund balance of $348,196. 2013 was first year of new millage increase for property taxes to pay tax supported debt service. Parks and Recreation Development Corporation increased governmental fund balance by $837,237. The new Recreation Centre contributed to the overall increase with a positive operational inflow of approximately $351 thousand. This fiscal year was the first full year of operations for this new facility. The other factor for increase is that the debt service requirement for the 1994 and 2001 Sales Tax Revenue bonds transfer out to debt service was reduced by approximately $400. The issuances are in final two years of maturity and interest and debt service balance requirements are sufficient to cease all transfers out to cover future debt service. The remaining major governmental fund, Tax Incremental Finance District #2 Capital Projects Fund, saw the remainder of final capital outlay expense (new Recreation Centre facility) in 2013. The decrease in governmental fund balances of $146,522 is a direct result of that project's closeout. Proprietary Funds. The proprietary funds provide the same type of information found in the government -wide financial statements. General Fund Budgetary Highlights Original budget compared to final budget. During the fiscal year, there were sufficient reasons to increase original estimated revenues and original appropriations. Revenue amendments resulted in a total increase of revenue projections by $1,172,545 and appropriations were increased $1,185,586. The City's economic environment is growing and revenues have reflected this positive gain. License and Permits revenues have grown approximately 35% from the original budget (Increased by $499,286). This growth is correlated to new home construction. City Sales taxes increased by $172,200 from original adoption. Appropriations were amended to accommodate new programs and operational costs. $387,534 increase (shared among all departments) is recognition of encumbrances issued in 2012 year but moved to 2013 fiscal year. The remainder of the appropriations increases primarily results from Emergency Management department requesting additional funding for emergency contracts for radio systems and for emergency preparedness. Total amendment for this department increased appropriations by $466,455. Final budoet compared to actual results. The most significant differences between estimated revenues and estimated appropriations to actual were as follows: 12 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2013 General fund did end the year with a positive balance despite the negative variances in property tax and fines and forfeitures estimates. Departments conservatively monitored expenditures and prevented any unnecessary or unexpected outflows. Property taxes for General Fund came in under what was adopted by the City's Council. However, overall city property tax revenues have increased. The property tax revenue allocated to debt service requirements has shifted from General Fund for higher debt service requirements. Fines and forfeitures ended under budgeted for 2013. This activity is volatile and is dependent upon the criminal system and activity within that system. It was estimated based on prior trends that revenues would increase in 2013, however, actual activity was under what was estimated. Appropriations saw the non - departmental division realize a negative difference ($59,086) for 2013. Non - departmental houses all transactions that effect general fund across all departments within the fund. Two notable reasons for the variance is an administration position salary was under estimated and a year end inventory adjustment was recognized after the annual count. Capital Asset and Debt Administration Capital assets - At the end of fiscal year 2013, the City had $314.6 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, 2013 and 2012. Capital Assets (net of Accumulated Depreciation) Amounts shown in thousands (000's) Estimated Actual Activiti es Revenue source Revenues Revenues Difference Property taxes 14,897,450 14,568,371 [329,079} Fines and forfeitures 2,576,746 2,424,064 (152,682) 2013 Estimated Actual restated (1) Appropriations Appropriations Expenses Difference Non - Departmental 2,191,819 2,250,905 (59,086) General fund did end the year with a positive balance despite the negative variances in property tax and fines and forfeitures estimates. Departments conservatively monitored expenditures and prevented any unnecessary or unexpected outflows. Property taxes for General Fund came in under what was adopted by the City's Council. However, overall city property tax revenues have increased. The property tax revenue allocated to debt service requirements has shifted from General Fund for higher debt service requirements. Fines and forfeitures ended under budgeted for 2013. This activity is volatile and is dependent upon the criminal system and activity within that system. It was estimated based on prior trends that revenues would increase in 2013, however, actual activity was under what was estimated. Appropriations saw the non - departmental division realize a negative difference ($59,086) for 2013. Non - departmental houses all transactions that effect general fund across all departments within the fund. Two notable reasons for the variance is an administration position salary was under estimated and a year end inventory adjustment was recognized after the annual count. Capital Asset and Debt Administration Capital assets - At the end of fiscal year 2013, the City had $314.6 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, 2013 and 2012. Capital Assets (net of Accumulated Depreciation) Amounts shown in thousands (000's) (1)Beginning Governmental Activities amounts have been restated in conjunction with the implementation of anew accounting standardd, GASB Statement No. 61 13 Governmental Activities Business -Type Activiti es Total Total 2012, 2012, 2012, 2013 restated (1) 2013 restated (1) 2013 restated (1) Land & land imp. 79,581 77,631 2,579 2,579 $ 82,160 $ 80,210 Works of art 298 298 - - 298 298 Buildings &imp. 41,761 44,176 2,161 2,309 43,922 46,485 Other imp. 100,561 104,798 13,279 14,168 113,840 118,966 Utility plant - - 50,277 52,575 50,277 52,575 Mach inery& equip. 7,719 8,281 1,923 2,112 9,642 10,393 Const. in progress 10,872 4,689 3,596 518 14,468 5,207 Total capital assets $ 240,792 $ 239,873 $ 73,815 $ 74,261 $314,607 $ 314,134 (1)Beginning Governmental Activities amounts have been restated in conjunction with the implementation of anew accounting standardd, GASB Statement No. 61 13 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2013 This year's major additions included: Description Amount Computer and Machinery Equipment 539,577 Various Vehicles 800,802 Various Water /Sewer Replacements and Improvements 720,475 Various Land Acquisitions 2,793,958 Various street improvement 940,000 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 $80,368,275 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 III.C. in the Footnotes to the financial statements. Debt - At September 30, 2013 and 2012, the City had the following debt outstanding: Outstanding Debt Amounts shown in thousands (000's) In fiscal year 2013, the City issued 9,845,000 in 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's property tax rate is $0.61 per $100 assessed valuation. 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 (III -E) to the financial statem ents. 14 Governmental Activities Business -Type Activities Total 2013 2012 2013 2012 2013 2012 General obligation bonds $ 68,945 $ 64,269 $ 1,760 $ 2,211 $ 70,705 $ 66,480 Certificates of obligation 30,910 33,330 15,300 16,415 46,210 49,745 Sales tax revenue bonds 210 615 - - 210 615 Loans payable 311 840 - - 311 840 Capital lease - - 317 387 317 387 Totals $100,376 $ 99,054 $ 17,377 $ 19,013 $117,753 $118,067 In fiscal year 2013, the City issued 9,845,000 in 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's property tax rate is $0.61 per $100 assessed valuation. 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 (III -E) to the financial statem ents. 14 CITY OF NORTH RICHLAND HILLS, TEXAS Management's Discussion and Analysis September 30, 2013 Risk - The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. While the City has historically retained a portion of these risks, coverage exists for: general, employment practice, law enforcement, and errors and omissions liability; excess workers' compensation; property damage; commercial crime coverage; and employee life insurance. The Self - Insurance Fund is responsible for workers' compensation, health, automobile liability, and general liability insurance. The City maintains a stop loss third party insurance policy with respect to health claims. This policy covers city medical claims in excess of $175,000 per individual, and/or $6,997,147 in the aggregate for a 12- month period beginning on January 1, 2013. 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. After working through a struggling economy, the City of North Richland Hills is finally experiencing a stabilizing economy. Given this rise, the budget process has predicted a steady growth in property values and sales tax retail base. For budget year 2013 -2014, sales tax receipts are anticipated to be 2% higher than the 2013 budget year. Property tax values are anticipated to continue rising due to steady new construction growth plus the stabilization of property values. The City of North Richland Hills expects a 3% growth in property values. The fiscal year 2013 -2014 budget maintains an increase in the property tax rate. For fiscal year 2013 -2014 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. 15 % of Total Tax Rate Tax Rate Distribution Schedule Tax Rate Distribution General Fund - Maintenance & Operations 57.2% 0.349036 Debt Service Fund 42.8% 0.260964 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. 15 This page intentionally left ,blank. 16 BASIC FINANCIAL STATEMENTS 17 This page intentionally left ,blank. 18 CITY OF NORTH RICHLAND HILLS, TEXAS Government -wide Statement of Net Position September 30, 2013 Primary Government Governmental Business -Type A rtiwitip� Artiuitip� Tntal Assets CURRENTASSETS Cash and cash equivalents $ 12,750,716 $ 4,485,193 $ 17,235,909 Investments 23,087,676 14,356,145 37,443,821 Receivables, net of allowances: Accounts 381 ,088 4,801 ,072 5,182,160 Propertytaxes 217,702 - 217,702 Othertaxes 3,362,901 - 3,362,901 Interest receivable 206,984 40,042 247,026 Special assessments 86,147 - 86,147 Intergovernmental 1,656,136 120,728 1,776,864 Other 273,582 - 273,582 Prepaids 569,965 47,985 617,950 Inventories, at cost 225,359 229,692 455,051 Internal balances [3,279,724] 3,279,724 Total current assets 39,538,532 27,360,581 66,899,113 NONCURRENTASSETS Cash and cash equivalents 33,496,837 11,788,582 45,285,419 Investments 44,227,968 1,353,553 45,581,521 Capital assets - net Land and nondepreciable land improvements 79,580,847 2,579,137 82,159,984 Buildings and improvements 59,392,556 4,405,053 63,797,609 Improvements otherthan buildings 183,613,929 24,549,099 208,163,028 Utility plant - 100,155,835 100,155,835 Machinery and equipment 24,093,140 5,060,546 29,153,686 Artwork and historical treasures 298,208 - 298,208 Construction in progress 10,871,577 3,595,655 14,467,232 Accumulated depreciation [117,058,374] [66,530,481 ] (18 3.5 88.8 55) Total capital assets - net 240,791,883 73,814,844 314,606,727 Total noncurrent assets 318,516,688 86,956,979 405,473,667 Total assets 358,055,220 114,317,560 472,372,780 Deferred Outflows of Resources Deferred loss on refunding 263,069 20,612 283,681 Total deferred outflows of resources 263,069 20,612 283,681 Liabilities CURRENT LIABILITIES Accounts payable and accrued liabilities 4,871 ,327 4,976,612 9,847,939 Deposits and other liabilities 1 ,073,318 60,249 1,133,567 Retainage payable 153,893 21,968 175,861 Compensated absences 173,577 34,380 207,957 Unearned revenue 100,384 74,853 175,237 Accrued interest payable 425,904 74,489 500,393 Bondspayable 8,013,148 1,416,852 9,430,000 Loans payable 311 ,349 - 311,349 Capital lease payable - 70,419 70,419 Intergovernmental payables 111,213 - 111,213 Developers' deposits - 44,127 44,127 Total current liabilities 15,234,113 6,773,949 22,008,062 NONCURRENT LIABILITIES Customers' deposits - 2,311 ,466 2,311,466 Bonds payable 93,286,147 15,767,913 109,054,060 Capital lease payable - 246,820 246,820 Compensated absences 2,800,515 441,794 3,242,309 Intergovernmental payables - 862,611 862,611 Other post employment benefits obligation 6,763,037 865,606 7,628,643 Net pension obligation 3,712,197 463,446 4,175,643 Total noncurrent liabilities 106,561,896 20,959,656 127,521,552 Total liabilities 121 ,796,009 27,733,605 149,529,614 Deferred Inflows of Resources Deferred gain on refunding 231 ,429 44,656 276,085 Total deferred inflows of resources 231 ,429 44,656 276,085 Net Position Net investment in capital assets 205,397,867 62,044,064 267,441,931 Restricted for: Debt service 4,623,851 - 4,623,851 Impact fees restricted for construction - 3,762,460 3,762,460 Unrestricted 26,269,133 20,753,387 47,022,520 Total net position $ 236,290,851 $ 86,559,911 $ 322,850,762 The notes to the financial staterrents are an integral part of this staterrent 19 Functions/Programs Expenses Primary Government Governmental activities: General government Public safety Culture and recreation Public works Interest and other fees Total governmental activities Business -type activities: Utility Aquatic park Golf course Total business -type activities CITY OF NORTH RICHLAND HILLS, TEXAS Government -wide Statement of Activities Year Ended September 30, 2013 Program Revenues Operating Capital Grants Charges for Grants and and Services Contributions Contributions Net [Expense] Revenue and Changes in Net Position Governmental Business -type $ 10,656,322 $ 5,497,050 $ 85,218 $ 954,310 $ [4,119,744] 30,611,650 4,204,508 2,299,092 215,985 [23,892,065] 11 ,633,882 3,001 ,249 77,995 118,467 [8,436,171 ] 8,398,711 937,102 82,853 1,650,189 [5,728,567] 3,673,780 - - - [3,673,780] 64,974,345 13,639,909 2,545,158 2,938,951 [45,850,327] - 221,003 Unrestricted investment earnings 258,705 27,623,220 30,160,950 138,831 - 5,380 4,749,688 4,377,388 - - 2,566,632 2,371 ,010 [3,674,512] 7,291 Total general revenue and transfers 34,939,540 36,909,348 138,831 7,291 4,279,015 $ [4,119,744] [23,892,065] [8,436,171 ] [5,728,567] [3,673,780] [45,850,327] 2,676,561 2,676,561 [372,300] [372,300] [188,331] [188,331] Total primary government $ 99,913,885 $ 50,549,257 $ 2,683,989 $ 2,946,242 $ [45,850,327] $ 2,115,930 $ [43,734,397] General revenue: Taxes: Property $ 24,126,068 $ - $ 24,126,068 Sales 17,359,807 17,359,807 Mixed beverage 117,223 117,223 Franchise 4,166,579 4,166,579 Occupancy 221 ,003 - 221,003 Unrestricted investment earnings 258,705 80,950 339,655 Miscellaneous 205,445 5,380 210,825 Transfers between governmental and business -type activities 3,674,512 [3,674,512] - Total general revenue and transfers 50,129,342 [3,588,182] 46,541,160 Change in net position 4,279,015 [1 ,472,252] 2,806,763 Net position- beginning ofyear (as previously reported) 232,987,847 88,283,318 321,271,165 Adjustment to beginning net position, accounting standard implementation (976,011) [251 ,155] [1,227,166] Net position - beginning of year [as restated] 232,011 ,836 88,032,163 320,043,999 Net position- end of year $ 236,290,851 $ 86,559,911 $ 322,850,762 The notes to the financial statements are an integralpart of (his statement. 20 CITY OF NORTH RI CH LAND HILLS, TEXAS Balance Sheet Governmental Funds September 30, 2013 The notes to the financial statements are an integral part of this state ment 21 General Capital General Debt Parks and Recreation Tax Increment General Fund Projects Service Development Finance District #R Other Governmental Total Governmental Assets Cash and cash equivalents $ 5,997,706 $ $ $ 1,306,840 $ $ 4,446,167 $ 11,750,713 Investments 8,239,990 749,243 7,770,849 16,760,082 Receivables, net of allowance Accounts 286,155 - 94,933 381,088 Prepertytaxes 217,702 217,702 Other taxes recei vabl e 1,823,269 739,689 799,943 3,362,901 Interest receivable 7,052 71,188 787 806 12,609 16,097 108,539 Special assessments receivable - 86,147 - - - 86,147 Intergovernmental receivables 6586 1,298,313 218,086 133,151 1,656,136 Other receivables 105,520 61,305 17,%0 71,977 256,782 Due from other funds 147,760 - - - 147,760 Repaid items 134,848 332 1,643 3,275 3,135 143,233 Inventories, at cost 93,143 - 18,617 - 111,760 Advances to otherfunds 441,284 - - 441,284 Restricted: Cash and cash equivalents 20,825,360 1,485,261 503,616 5,061,696 3,208,414 31,084,347 Investments - 31,849,503 1,128,020 49,161 6,089,653 1,111,631 40,227,968 Total assets $ 17,501,015 $ 54,192,148 $ 2,615,711 $ 3,607,313 $ 11,163,958 $ 17,656,297 $ 106,736,442 Liabilities Accounts payable $ 1,208,055 $ 896,815 $ $ 231,236 $ $ 228,196 $ 2,564,302 Retainage payable - 135,919 17,974 153,893 Accrued liabilities 651,232 9,7% 64,726 84,273 810,027 Intergovernmental payables 16,752 - 94,461 111,213 Deposit sand other liabilities 410,506 614,691 22,616 12 1,047,825 Unearned revenue 54,501 - 42,936 633 98,070 Total liabilities 2,341,046 1,657,221 379,488 407,575 4,785,330 Deferred Inflows of Re sou roes Unavailable revenue - propertytaxes 217,702 - 217,702 Unavailable revenue - grants - 1,359,618 152,149 29,918 1,541,685 Unavailable revenue - assessments - 149,077 149,077 Total deferred inflows of resources 217,702 1508,695 152,149 29,918 1,908,464 Fund Balance Nonspendable: Inventories 93,143 - 18,617 111,760 Prepaids 134,848 332 1,643 3,275 3,135 143,233 Advances 441,284 - - - 441,284 Restricted: M nicipa I court technolo gy & se curity 821,953 821,953 Franchise peg fees 301,634 - 301,Q4 Parks and recreation development 2,151,423 - 2,151,423 Crime co ntro l district - 1,240,435 1,240,435 Debt service 2,614,068 2,008,062 4,622,130 Grants 80,692 80,692 Promotional & economi c de vel opment 1,186,434 1,186,434 Public safety - 845,327 845,327 Capital projects Pond 41,566,876 111,116 11,163,958 662,923 53,504,873 Committed: Donations - 962,253 962,253 Drainage utility 1,284,052 1,284,052 Gas development - 1,915,014 1,915,014 Assigned: Savings incentive program 250,360 - 250,360 Retirement stabilization 250,000 250,000 Utility bill ing assistance 8,571 8,571 Rail station project 1,200,000 - 1,200,000 Mnicipal facilities 2,000,000 7,027,477 9,027,477 Recreation centre - 481,691 - 481,691 Capital projects - 9,459,024 - - 9,459,024 Encumbrances 254,402 309,554 3,000 566,956 Unassigned 9,186,072 - - 9,186,072 Tota I fund balance 14,942,267 51,026,232 2,615,711 3,075,676 11,163,958 17,218,804 100,042,648 Total liabilities, deferred inflows and fund balance $ 17,501,015 $ 54,192,148 $ 2,615,711 $ 3,607,313 $ 11,163,958 $ 17,656,297 $ 106,736,442 The notes to the financial statements are an integral part of this state ment 21 CITY OF NORTH RICHLAND HILLS, TEXAS Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position GOVERNMENTAL FUNDS September 30, 2013 Total fund balances -- governmental funds $ 100,042,648 Amounts reported for governmental activities in the statement of net position 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 position in governmental funds. Certain receivables are not available to pay current- period expenditures and, therefore, are reported as unavailable revenue in the funds. 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, net of amounts included in business type activities, are included with governmental activities in the Statement of Net Position but are not included at the fund level. Long -term liabilities and related deferred inflows and outflows, 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. Total net position -- governmental activities The notes to the financial statements are an integral part of this statement. See note II A for additional information on reconciliation calculations. 22 237, 455, 052 1,982,527 11,121,175 (114,310,551) $ 236,290,851 REVENUES Taxes License 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 Publicworks Capital outlay: General government Public safety Culture and recreation Publicworks Debt service: 1 ,514 - 10,116 - - - 23,461 63,681 2,971 5,832 13,177 2,185089 1 ,209079 82,853 117,462 - Other Total Governmental Governmental $ 7,675,047 $ CITY OF NORTH RI CH LAND HILLS, TEXAS Statement of Revenues, Expenditures, and Changes in Fund Balance 855,016 Governmental Funds - Year Ended September 30, 2013 923,282 General Parks and Tax Increment 138,871 Capital General Debt Recreation Finance District General Fund Projects Service Development #2 $ 27,111 ,570 $ $ 6,860,707 $ 4,343,358 $ 1 ,764 D04 - - 3,295,312 830 2,648,892 2,424 D64 - - 1 ,514 - 10,116 - - - 23,461 63,681 2,971 5,832 13,177 2,185089 1 ,209079 82,853 117,462 - Other Total Governmental Governmental $ 7,675,047 $ 45,990,682 - 1 ,764 D04 855,016 6,800D50 - 2,424 D64 923,282 923282 138,871 140 ,385 - 10,116 68,056 177,178 871,552 4,467 ,635 323,285 323285 200216 5,422 183,009 9,578 920,760 1,318,985 37,004516 1,284,506 6,951,953 7,300,067 22,755 11,775,869 64,339,666 9 ,946 ,750 135 214 - - - 591,547 10,673511 22,859,410 - - 5,457,753 28,317,163 3,449225 1,596 5,729,298 110,085 9 290 204 2560746 1 p02,403 - - 3563,149 - 5,505,603 ov er e xpe nd itu res 114,328 5,619,931 63,523 - - 213,865 277,388 - - 433,047 25,508 458555 36,818 3589,450 - 226,605 3052073 Principal retirement 6,049,287 2,474,147 8523,434 Interest and fiscal charges 2,719,124 940,224 3,659,348 Total expenditures 38,916,472 10,234266 8,768,411 6,162,345 10,154,062 74,235,556 Excess (deficiency) of revenues ov er e xpe nd itu res [1,911,956] (8,949,760) (1,816,458) 1,137,722 22,755 1,621,807 (9095,890) OTHER FINANCING SOURCES (USES) I ssu an ce of de bt - 9045p00 - - - - 9045p00 Premium on issuance of debt 300,486 - - - 300,486 Proceeds from sale of assets 600551 195,306 553 2,635 799D45 Transfers in 3,976204 1 ,141 ,465 1,969,348 558,650 136,995 7,782,662 Transfers out (1 ,450739) (486) - (859,688) (169,277) (1,336,266) (3016,456) Total other financing sources (uses) 2525,465 11.887p16 2,164,654 (300,485) (169,277) (1,196,636) 14,910737 Net change in fund balance 613509 2,937256 348,196 837,237 (146,522) 425,171 5p14047 Fund balance - beginning of year 14,328758 48,088,976 2,267,515 2,238,439 11 ,310,480 16,793,633 95,027001 Fund balance - end of the year $ 14,942267 $ 51,026232 $ 2,615,711 $ 3,075,676 $ 11,163,958 $ 17,218,804 $ 100,042,648 The notes to the financial statements are an integral part of this statement. 23 CITY OF NORTH RICHLAND HILLS, TEXAS Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Govemmental Funds to the Statement of Activities Year Ended September 30, 2013 Net change in fund balances- -total governmental funds Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. The net effect of various transactions involving capital assets (i.e. sales, trade -ins, and donations) is to decrease net position. Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Certain long -term liabilities are accrued at the government -wide level but not at the fund level. The current year change in those liabilities is reported as expense in the statement of activities. Expenses recorded for accrual of interest and amortization expense are included in this category. Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long -term liabilities in the statement of net position. Repayment of bond pri ncipal is an expenditure in the governmental funds, but the repayment reduces long- term liabilities in the statement of net position. This is the difference between repayments and proceeds received. Internal service funds are used by management to charge the costs of certain activities, such as insurance and fleet maintenance, to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities (exclusive of capital assets and debt). Change in net position of governmental activities The notes to the financial statements are an integral part of this statement. See note II B for additional information on reconciliation calculations. 24 5,014,847 2,425,921 (1,233,856) 329,833 (1,305,883) (1,542,456) 590,609 $ 4,279,015 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Net Position PROPRIETARY FUNDS September 30, 2013 Governmental Enterprise Funds Activities - Uility Aquatic Park Golf Total Enterprise Internal Service ASSETS Current Cash and cash equivalents $ 3,819,3 $ 665,811 $ - $ 4,45,1 �O $ 1,000,00; Irmestments 10,980,141 2,654,230 721,774 14,356,145 6,327,594 Accounts recei vable, net of allowance: Billed 2,266,413 - - 2,266,413 - Unbilled 2,162,030 - - 2,162,030 - Other 168,090 204,524 15 372,629 16,798 Interest rec ei vable 29,138 4,969 5,934 40,041 24,3W Intergovernmental receivable 120,728 - - 120,728 - Prepaid items 20,460 9,024 18,501 47,95 426,732 Due from other funds 34,208 - - 34,208 - Invertories, at cost 170,323 17,0% 42,273 229,6T 113,600 Total current assets 19,770,913 3,555,654 7n,497 24,115,064 7,909,107 Noncurrent Restricted assets Cash and cash equivalents 11,543,626 72,043 172,913 11,7n,5�2 2,412,490 Investments 1,353,553 - - 1,353,553 4,000,000 Total restricted cash and cash equivalents 12,897,179 72,043 172,913 13,142,135 6,412,490 Addancestootherfunds 169,801 - - 169,801 - Capital assets, at cost Land 75,36 745,771 1,758,000 2,579,137 - Bulding and improvements 1,136,327 2,465,964 802,762 4,405,053 135,455 Otherimprovements - 19,258511 5,290,587 24,549,098 602,769 Uility0am in service 100 55,835 - - 100 55,835 - htachineryandequipment 1,962,M 830,856 2,277,311 5,060,547 8,201,876 Construction in progress 3,505 - - 3,505 67,900 Accumulated depreciation [51,820,427] (8,959,8&4] X5,750,170] (66,530,01) �,7E3,262] Net capital assets 55,0,136 14,341,218 4,378,490 73,814,844 3,336,831 Total noncurrent assets 68,162,178 14,413,261 4,551,40; 87,126,842 9,749,321 Total assets 87,933,091 17,968,915 5,339,900 111,241,906 17,658,428 DEFERRED OUTFLOWS OF RESOURCES Deferred loss on refundng 4,129 - 3,375 7,504 - Total deferred outflows of resources 4,129 - 3,375 7,504 - OABILITIES Current Accounts payable and accrued e )Venses 4,671,340 140,210 105,062 4,976,612 1,496,994 Retainage payable 21,968 - - 21,96 - Other current Iialilities x,029 5,391 16,956 104,376 25,493 Compensated absences 27,262 7,118 - 34,3W 17,673 Unearned revenue - 7,013 67,840 74,853 2,314 Due to other funds - - 181,968 181,96 - Accrued interest payable 39,098 30,60 4,730 74,489 - Bonds payable 686,7n 636,852 93,212 1,416,852 - Capitalleasepayable - - 70,419 70,419 - TotalcurrentliabilRies 5,528,485 827,245 600,187 6,955,917 1,542,474 Noncurrent Customer deposits 2,311,46 - - 2,311,46 - Bonds payable 9,155,044 5,802,027 797,734 151754,805 - Capitalleasepayable - - 246,820 246,820 - Compensated absences 361,801 79,910 - 441,793 232,517 Intergovernmental payables 862,611 - - 862,611 - Advances from other funds - - 611,147 611,147 - Other post employment benefits obligation 743,355 122,251 - 8,606 579,729 Net pension obligation 397,081 6 ,a65 - 4E3,446 313,705 Total noncurrent Iialilities 13,831,440 6,070,553 1,655,701 21,557,694 1,126,011 Total liabil Ries 19,359,925 6,897,798 2'2&5'M 28,513,611 2,668,485 DEFERRED INFLOWS OF RESOURCES Deferred gain on refunding - 44,656 - 44,656 - Total deferred inflows of resources - 44,656 - 44,656 NET POSITION Net investment in capital assets 51,687,875 7,081,262 3,274,937 62,044,064 3,336,831 Impact fees restricted for construction 3,902,636 - - 3,902,636 - Unrestricted (deficit) 12,986,7&4 3,945,209 [187,550] 16,744,443 11,653,112 Total net position $ 68,577,2 $ 11,026,461 $ 3,087,387 $ Z,691,143 $ 14,989,943 Reconciliationto business -type activities: Some amounts reported for business -type activities in the Statement of Net Position are different because certain irternal balances are included with business-type activities. 3,8 ,768 Net Positi on of busines s3ype activities $ 11,119 Al The notes to the financial statements are an integral part of this statement. 25 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Expense, Revenues, and Changes in Net Position PROPRIETARY FUNDS Year Ended September 30, 2013 26 Governmental Enterprise Funds Activities - Utility Aquatic Park Golf Total Enterprise Internal Service OPERATING REVENUES Charges for services: Water and sewer service $ 29,202,286 $ $ $ 29,202,286 $ Service charges 920,210 920,210 Inspection fees 36,235 36,235 Golf course fees and charges - 2,371,010 2,371,010 Aquatic park admissions and services - 4,339,742 - 4,339,742 Other intergovernmental 138,831 - 7,291 146,122 14,902 Risk management - - - 9,786,119 Facilities andfleet management 5,588,912 Information systems management - - - - 2,516,696 Miscellaneous revenues 3,133 37,645 14 40,792 275,827 Total operating revenues 30,300,695 4,377,387 2,378,315 37,056,397 18,182,456 OPERATING EXPENSES Claims - - - - 7,992,402 Contractual services 1,723,129 932,540 2,655,669 1,693,493 Water purchases 8,268,079 - 8,268,079 - Wastewater treatment services 4,715,471 - 4,715,471 - Personnel services 51141,377 1,733,496 - 6,874,873 3,698,611 Golf course sales and service - - 2,089,435 2,089,435 - Repairs and maintenance 3,958,178 410,164 - 4,368,342 1,681,504 Supplies 277,003 575,920 - 852,923 1,363,107 Depreciation 3,209,388 778,214 434,890 4,422,492 867,001 Total operating expenses 27,292,625 4,430,334 2,524,325 34,247,284 17,296,118 Operating income 3,008,070 (52,947) (146,010) 2,809,113 886,338 NONOPERATING REVENUES (EXPENSES) Investment income 53,776 3,450 23,724 80,950 28,897 Interest mdfiscal charges (330,596) (243,661) (35,753) (610,010) - Other income (expense) 16 3,000 2,351 5,367 104,909 Gain (loss) on disposal of assets (913) (75,692) (6,555) (83,160) (137,841) Total nonoperMing revenues (expenses) (277,717) (312,903) (16,233) (606,853) (4,035) Income (loss) before trm sfers 2,730,353 (365,850) (162,243) 2,202,260 882,303 TRANSFERS Transfers in 30 391 421 371,390 Transfers out (3,729,608) (213,058) (4,268) (3,946,934) (391,083) Total transfers - net (3,729,578) (212,667) (4,268) (3,946,513) (19,693) Change in net position (999,225) (578,517) (166,511) (1,744,253) 862,610 Net position - beginning of year 69,703,194 11,720,391 3,262,966 84,686,551 14,127,333 Adjustment to beginning net position, accountingstandardimplemtation (126,674) (115,413) (9,068) (251,155) - Net position -end of year $ 68,577,295 $ 11,026,461 $ 3,087,387 $ 82,691,143 $ 14,989,943 Reconciliation of Change in Net Position - Business -type Activities: Change in net position of enterprise funds (1,744,253) 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 a ctivities 272,001 Change in net position of business -type activities $ (1,472,252) The notes to the financial statements are an integral part of this statement. 26 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Cash Flows PROPRIETARY FUNDS Year Ended September 30, 2013 The notes to the financial statements are an integral part of this statement 27 Governmental Enterprise Funds Activities - Internal Utility Aquatic Park Golf Totals Service Cash flows fro m operating activities: Receipts from customers $ 30,327,646 $ 4,227,923 $ 2,386,622 $ 36,942,191 $ - Receiptsfrominterfund services provided - - - - 17,891,727 Other operating revenue [expense] 821,058 38,128 [27,833] 831 ,353 289,820 Payments to suppliers [19,634,990] [1,906,242] [2,120,549] [23,661 ,781] [12,766,892] Payments to employees [4,976,767] [1,702,910] - [6,679,677] [3,596,415] Net cash provided by operating activities 6,536,947 656,899 238,240 7,432,086 1,818,240 Cash flows fro m noncapital financing activities: Tran sfe rs fro m othe r fun ds 30 391 - 421 371,390 Transfersto otherfunds [3,729,608] [213,058] [4,268] [3,946,934] [391,083] Interfund loan payments - [147,760] [147,760] Net cash used for non cap ital and related financing activities [3,729,578] [212,667] [152,028] [4,094,273] [19,693] Cash flowsfrom capital and related financing activities: Insurance recovery proceeds 16 3,000 2,351 5,367 104,909 Acquisition and construction of capital assets [893,213] [35,989] [47,186] [976,388] [743,574] Principal paid on capital debt [676,546] [847,425] [159,148] [1,683,119] Interest paid on capital debt [325,843] [203,065] [38,182] [567,090] - Proceeds from sale of capital assets - - - 11,528 Net cash used for capital and related financing activities [1,895,586] [1,083,479] [242,165] [3,221 ,230] [627,137] Cash flows from investing activities: Purchase of Investments [11,256,226] [2,426,911 ] [722,088] [14,405,225] [9,812,136] Proceeds from the sale of investments 11,299,358 2,555,000 640,292 14,494,650 7,764,319 Interest and dividends received 71,422 9,591 21,649 102,662 36,402 Net cash provided by investing activities 114,554 137,680 [60,147] 192,087 [2,011,415] equivalents 1,026,337 [501,567] [216,100] 308,670 [840,005] Cash and cash equivalents beginning of year 14,336,671 1,239,421 389,013 15,965,105 4,252,498 Cash and cash equivalents end of year $ 15,363,008 $ 737,854 $ 172,913 $ 16,273,775 $ 3,412,493 Reconciliation of operating income [loss] to net cash provided by operating activities: Operating income [loss] $ 3,008,070 $ [52,947] $ [146,010] $ 2,809,113 $ 886,338 Adjustments to reconcile operating income [loss] to net cash provided by operating activities: Depreciation expense 3,209,388 778,214 434,890 4,422,492 867,001 Other expense - - - - 5,987 [Increase] decrease in accounts receivable 168,915 [111,819] 15,612 72,708 [3,223] [Increase] decrease in intergovernmental receivables 354,822 - - 354,822 - (Increase) decrease in inventories 130,068 124 2,462 132,654 26,696 [Increase] decrease in prepaid items [9,502] [2,829] 20,540 8,209 [133,168] Increase [decrease] in accounts payable [814,264] 20,344 [35,092] [829,012] 64,099 Increase [decrease] in customer deposits payable 295,281 - 295,281 - Increase [decrease] in compensating absences 11,899 5,802 17,701 [26,185] Increase [decrease] in other post employment benefits 171,736 27,916 199,652 134,810 Increase [decrease] in intergovernmental payable 28,991 - 28,991 - Increase [decrease] in other liabilities 568 [5,257] [19,024] [23,713] Increase [decrease] in net pension obligation [19,025] [3,132] [22,157] [14,456] Increase [decrease] in unearned revenues 483 [35,138] [34,655] 2,314 Increase [decrease] in accrued liabilities - - - - 8,027 Total adjustments 3,528,877 709,846 384,250 4,622,973 931,902 Net cash provided by operating activities $ 6,536,947 $ 656,899 $ 238,240 $ 7,432,086 $ 1 ,818,240 Noncash from capital and related financing activities: Capitalized interest 13,809 930 26,701 41,440 - Loss on disposal of assets - - - - [826,155] The notes to the financial statements are an integral part of this statement 27 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Net Position FIDUCIARY FUNDS September 30, 2013 ASSETS Investments, at fair value Mutual funds Total assets NET POSITION OPEB Trust $ 1,058,069 1,058,069 Held in trust for other post employment benefits 1,058,069 Total net position $ 1,058,069 The notes to the financial statements are an integral part of this statement. 28 CITY OF NORTH RICHLAND HILLS, TEXAS Statement of Revenues, Expenses, and Changes in Net Position FIDUCIARY FUNDS For the Year Ended September 30, 2013 The notes to the financial statements are an integral part of this statement. 29 OPEB Trust ADDITIONS Contributions: Employer $1,464,473 Investment earnings 83,765 Total additions 1,548,238 DEDUCTIONS Benefit payments 1,278,708 Investment expense 5,847 Total deductions 1,284,555 Change in net position 263,683 Net position - beginning 794,386 Net position - ending $1,058,069 The notes to the financial statements are an integral part of this statement. 29 This page intentionally left ,blank. 30 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Basic Financial Statements September 30, 2013 Note II Reconciliation of Government -Wide and Governmental Fund Financial Statements 40 A. Balance sheet reconciliation 40 B. Statement of revenues, expenditures, and changes in fund balance reconciliation 41 Note III Detailed Notes on All Funds Page Note I Summary of Significant Accounting Policies Deposits and investments A. Reporting entity 33 B. Government -wide and fund financial statements 33 C. Measurement focus, basis of accounting, and financial statement Investm ents presentation 34 D. Assets, liabilities, and net position or fund balance 45 Deposits and investments 35 Receivables and payables 36 Inventories and prepaid items 36 Restricted assets 36 Capital assets 37 Compensated absences 38 Long -term obligations 38 Deferred outflow /inflows of resources 38 Fund Balance 39 Note II Reconciliation of Government -Wide and Governmental Fund Financial Statements 40 A. Balance sheet reconciliation 40 B. Statement of revenues, expenditures, and changes in fund balance reconciliation 41 Note III Detailed Notes on All Funds 43 A. Deposits and investments 43 Deposits 43 Investm ents 44 Interest rate risk 45 Custodial credit risk 45 Credit risk 46 OPEB Trust Fund Investments 46 Interest rate risk 46 Custodial credit risk 46 Credit risk 46 B. Receivables 47 Unearned revenue 47 C. Capital assets 48 Construction commitments 50 D. Interfund receivables, payables, and transfers 50 Governmental 51 Proprietary 52 E. Long -term debt 52 General obligation bonds 52 Certificates of obligation 53 Sales tax revenue bonds 54 Loans payable 54 Capital leases 54 Changes in long -term liabilities 55 31 Note IV Other Information A. Risk management B. Contingent liabilities C. Conduit debt obligations D. Postemployment 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 32 55 55 56 56 57 57 57 59 59 60 62 62 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 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. These TIF'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 -to -day operational responsibility for the activities of the TIF. B. Government -Wide and Fund Financial Statements The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non - fiduciary activities of the primary government and its blended 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. 33 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment; and grants and contributions that are designated to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual ,basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the financial resources measurement focus and the modified accrual ,basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the City. The City reports the following major governmental funds: The General Fund is the City's primary operating fund. It accounts for all financial resources traditionally associated with governments which are not required to be accounted for in another fund. Major functions financed by the General Fund include general government, public safety, culture and recreation, and public works. Financing is provided from taxes (primarily property, sales, and franchise), licenses and permits, fines, and investment income. The General Capital Projects Fund is used to account for financial resources used for the acquisition and construction of major street, drainage, and municipal facilities capital assets. The General Debt Service Fund accounts for the accumulation of resources for the payment of principal, interest, and related charges on long -term general obligation debt of governmental funds. Financing is provided primarily by a specific annual property tax levy. 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. 34 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 The Tax Increment Financing District #2 provides funding for public improvements that would benefit the participants in and citizens of TIF #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 Aquatic Park Fund (a major fund) accounts for the operation of NRH2O, the City's public water park. All activities necessary to operate the park are accounted for in the fund, including, but not limited to, administration, park operations, park maintenance, and financing and debt service. 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. 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 paym ents. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from non - operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise funds and of the internal service funds are charges to customers for sales and services. The City also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting the definition are reported as non - operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. D. Assets, Liabilities, and Net Position 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. 35 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 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 GAS 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, 2013, 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 III). Receivables and pavables Activities between funds that are representative of lending /borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to /from other funds" (i.e., the non - current portion of interfund loans). Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All trade and property tax receivables are shown net of an allowance for uncollectibles. The City's property tax is levied each October 1 on the assessed value listed as of the prior January 1 for all real property and certain personal property located in the City. Tax liens attach as of February 1. Taxes are due upon receipt of the tax bill. Property taxes are limited by the Texas Constitution to $2.50 per $100 of assessed valuation and by City Charter to $1.50 per $100 assessed valuation. The combined tax rate to finance general governmental service and debt service for the year ended September 30, 2013 was $.61 per $100 of assessed valuation. Inventories and ❑repaid items All inventories are valued at cost using the first- inlFrst -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 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 36 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 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 the 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 medical, dental, prescription, or other risk payables that could arise in future fiscal periods. This fund has a very proactive approach to plan for future claims and ensure that funding is available to pay when and if the need occurs. Capital assets Capital assets, including property, plant, equipment, and infrastructure assets (e.g., roads, bridges, drainage facilities, parks and related improvements, and similar items), are reported in the applicable governmental or business -type activities columns in the government -wide financial statements and in the proprietary fund level financial statements. Capital assets are defined by the City as assets with an initial, individual cost of at least $5,000 and an estimated useful life in excess of one year. Assets purchased or constructed are recorded at historical cost when available or estimated historical cost if 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: 37 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 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* 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. Historically governmental major fund General Fund has liquidated the majority of compensating absences liability. Long -term obligations In the government -wide financial statements and proprietary funds financial statements, long -term debt and other long -term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund statement of net position. Bond premiums and discounts, and losses on bond refundings are deferred and amortized over the life of the related debt using the straight -line method which approximates the interest method. In the fund financial statements, governmental funds recognize bond premiums and discounts 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. Deferred outflows/inflows of resources During fiscal 2013 the City implemented GASB Statement no. 63: Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position and GASB Statement no. 65: Items Previously Reported as Assets and Liabilities. These statements redefined certain transactions and balances previously reported as assets or liabilities to be reported instead as deferred inflow or outflow of resources. Therefore, the City has restated net position for previous elements that will affect future periods of the government either as an acquisition of net position (deferred inflow) or consumption of net position (deferred outflow). In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net 38 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. Historically governmental major fund General Fund has liquidated the majority of compensating absences liability. Long -term obligations In the government -wide financial statements and proprietary funds financial statements, long -term debt and other long -term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund statement of net position. Bond premiums and discounts, and losses on bond refundings are deferred and amortized over the life of the related debt using the straight -line method which approximates the interest method. In the fund financial statements, governmental funds recognize bond premiums and discounts 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. Deferred outflows/inflows of resources During fiscal 2013 the City implemented GASB Statement no. 63: Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position and GASB Statement no. 65: Items Previously Reported as Assets and Liabilities. These statements redefined certain transactions and balances previously reported as assets or liabilities to be reported instead as deferred inflow or outflow of resources. Therefore, the City has restated net position for previous elements that will affect future periods of the government either as an acquisition of net position (deferred inflow) or consumption of net position (deferred outflow). In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net 38 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The government only has one item that qualifies for reporting in this category, the deferred loss on refunding, reported in the government -wide and proprietary fund statement of net position. A deferred loss on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until then. The government only has one item that qualifies for reporting in this category, the deferred gain on refunding, reported in the government -wide and proprietary fund statement of net position. A deferred gain on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. Per GASB statement No. 65, bond issuance costs, treated as a prepaid asset, are to be recognized in restatement of previously reported net position ($251,155) in business -type activities. Fund balance excluding bond insurance costs which should be the period of the debt issue. This resulted in a of ($976,011) for governmental activities and 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. The resolutions or ordinances adopted by Council can only be amended or rescinded by an equivalent Council action via resolution or ordinance. 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. 39 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 Assigned Fund Balance Policy The City's Assigned Fund Balance is under the direction of the City Manager, (as authorized by the City Council). • Implement cost savings measures whereby savings would be accumulated for authorized use at a Savings incentive program represent funds assigned to encourage departments to identify and later date, • Retirement stabilization are funds for anticipated future increases in TM RS 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, • 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, • Recreation Centre assignment is net operations for the program for future infrastructure maintenance and operational needs, • Encumbrances are purchases procured in the current fiscal year, but will not be delivered or services accomplished until the next fiscal year. This assignment of prior year encumbrances insures resources are available to complete the purchases. 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. II. RECONCILIATION OF GOVERNMENT -WIDE AND GOVERNMENTAL FUND FINANCIAL STATEMENTS A. Explanation of certain differences between the governmental fund balance sheet and the government - wide statement of net position. The governmental fund balance sheet includes a reconciliation between fund balance — total governmental funds and net position — governmental activities as reported in the government -wide statement of net position. 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 $237,455,052 difference are as follows: Capital assets, net of depreciation (internal service funds excluded) Construction in progress (internal service funds excluded) Net adjustment to increase fund balance - total governmental funds to arrive at net position - governmental activities 40 $ 226,651,468 10,803,584 $ 237,455,052 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 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 $1,982,527 difference are as follows: Interest earned but not available within 60 days for Govt. Activities $ 74,064 Unearned revenue 1,908,463 Net adjustment to increase fund balance - total governmental funds to arrive at net position - governmental activities $ 1,982,527 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 Position but are not included at the fund level." The details of the $11,121,175 difference are as follows: Net position, internal service funds combined $ 14,989,943 Amount allocated to business -type activities (3,868,768) Net adjustment to increase fund balance - total governmental funds to arrive at net position - governmental activities 11,121,175 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 $(114,310,551) difference are as follows: Bonds payable - short -term Bonds payable - long -term Loans payable - short -term Deferred gain on refunding Deferred loss on refunding Accrued interest payable Compensated absences Other post employment benefits obligation Net pension obligation Net adjustment to reduce fund balance - total governmental funds to arrive at net position - governmental activities (8,013,148) (93,286,147) (311,349) 263,069 (231,429) (425,904) (2,723,903) (6,183,308) (3,398,432) $ (114,310,551) B. Explanation of certain differences between the governmental fund statement of revenues, expenditures, and changes in fund balances and the government -wide statement of activities The governmental fund statement of revenues, expenditures, and changes in fund balances includes reconciliation between net changes in fund balances — total governmental funds and changes in net position 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 $2,425,921 difference are as follows: Ell CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 Capital outlay - assets acquisitions $ 10,103,174 Depreciation expense Other post employment benefits (7,677,253) Net adjustment to decrease net changes in fund balances - 156,055 Compensated absences total governmental funds to arrive at changes in net position Net adjustment to decrease net changes in fund balances - of governmental activities $ 2,425,921 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 position." The details of this $(1,233,856) difference are as follows: Asset retirements and impairments $ (1,348,199) Contribution of Capital Assets from outside organizations 114,343 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ (1,233,856) 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 $329,833 difference are as follows: Investment income not available for current financial resources $ 53,089 Revenue that is earned but not received 276,744 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ 329,833 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 $(1,305,883) difference are as follows: (Excludes Internal Service Funds) Changes in: Accrued interest /interest expense $ (94,026) Other post employment benefits (1,432,368) Net pension obligation 156,055 Compensated absences 64,456 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ (1,305,883) 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 position. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long -term liabilities in the statement of net position. This is the difference between repayments and proceeds received." The details of this $(1,542,456) difference are as follows: (Excludes Internal Service Funds) 42 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 Debt issued or incurred: General obligation bonds $ (9,845,000) Principal repayments: General obligation bonds 5,169,136 Certificates ofobligation bonds 2,420,000 Sales tax revenue bonds 405,000 Loan repayments 529,298 Premium on bond sale (300,486) Current year amortization of bond costs, premium, discount, deferred inflows and outflows (gain and loss) 79,596 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ (1,542,456) Another element of that reconciliation states that "the net revenue (expense) of internal service funds is reported with governmental activities." The details of the $590,609 difference are as follows: Change in net position - internal service funds combined $ 862,610 Income (Expenses) reflected in business -type activities (272,001) Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ 590,609 III. DETAILED NOTES ON ALL FUNDS A. Deposits and investments Deposk - 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 position as "Cash, Cash Equivalents and Investments ". The investment policy of the City is 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 col lateral ization; 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, 2013 the carrying amount of the City's demand deposits were $7,870,498. Accounts with under $250,000 balance of either an interest bearing account or non - interest bearing account are covered by FDIC deposit insurance. The total cash held in demand deposits has been fully collaterized and meets statues' requirements. As of September 30, 2013, 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. 43 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 All security investments are reported at fair value priced by an independent source. The City generally holds all investments to maturity. The City's investment pool, excluding fiduciary funds, held the following cash, cash equivalents, and investments as of September 30, 2013: Tot al Cash on hand (petty cash, cashier tills) $ 16,956 Demand Deposit Accounts 7,870,498 Investment Pools 54,633,874 Certificates of Deposit 400,000 US Treasury Notes 32,242,016 U.S. Agencies 50,383,326 Total deposits and investments $ 145,546,670 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 following table are defined as follows: FHLB — Federal Home Loan Bank, FHLMC — Federal Home Loan Mortgage Corporation, FNMA — Federal National Mortgage Discounted Notes, and USTR — U.S. Treasury Notes. The rating agency acronym is defined as follows: S &P — Standard and Poor's Ratings Services, a division of the McGraw -Hill Companies, Inc. Additional information about the rating agencies or the significance of the ratings provided may be obtained from the 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 blended component units, the City's investment practices and policies disclosed herein apply equally to its component units. During the year ended September 30, 2013, 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 governing board at least partially comprised of pool participants. Duties of the governing boards include oversight responsibility. The Comptroller and the governing boards exercise oversight of the pools' activities via daily, weekly, and monthly reporting requirements. Additionally, per the requirements of the Public Funds Investment Act ("PFIA "), all 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. 44 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 The table below states investments at fair value: Rating Investment Type WAM Rating Agency Total Investm ent pools TexPool 55 AAAm S &P $ 39,386,397 LOGIC 55 AAAm S &P 102% 12,866,026 TexSTAR 51 AAAm S &P 103% 2,381,451 Total pools $ 54,633,874 Certificates of Deposit: 2 NR NR 400,000 Total certificates of deposit $ 400,000 USTR 225 AA+ S &P 32,242,016 Total U.S. Treasuries $ 32,242,016 U.S. Agencies and Government Sponsored Entities: FHLB 11 AA+ S &P $ 5,850,359 FH LMC 43 AA+ S &P 9,486,800 FNMA 224 AA+ S &P 35,046,167 Total U.S. Agencies & Government Sponsored Entities $ 50,383,326 Total Portfolio $ 137,659,216 riTl ANIFTU , VM Interest Rate Risk — Interest rate risk is the potential for a decline in market value due to rising interest rates. In accordance with its formally- adopted investment policy, the City manages its exposure to declines in fair market value by limiting the portfolio's weighted average maturity to a maximum of 730 days. The City also employs an investment maturity laddering structure to stagger investment maturities at various monthly rungs on the ladder. This laddering structure provides the City with the ability to reinvest the proceeds from the maturities in higher - yielding securities given the proceeds are not required to meet immediate cash flow needs. Custodial Cred# 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. 45 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. 45 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 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, 2013 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 $1,058,069 as of September 30, 2013. The Trust's funds are invested in a mutual fund that is 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 Rate Risk — Interest rate risk is the potential for a decline in market value due to rising interest rates. In accordance with its formally- adopted investment policy, the 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 Cred# 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. 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 Fund: Highmark Moderate Total mutual fund $ 1,058,069 $ 1,058,069 Total Portfolio $ 1,058,069 46 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 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: Governm ental Funds: Proprietary Funds: Aquatic Internal Accounts $ 4,779,119 $ 204,524 $ 15 $ 4,983,658 $ 16,798 Total $ 4,779,119 $ 204,524 $ 15 $ 4,983,658 $ 16,798 Allowance (182,586) - - (182,586) - Total (net of allowance) $ 4,596,533 $ 204,524 $ 15 $ 4,801,072 $ 16,798 Unearned Revenue Governmental funds report unearned 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 unearned revenue reported in the governmental funds were as follows: Unearned Parks and Escrow deposits $ Recreation LEOSE Public Safety proceeds 28,747 General Development Non -major Total Accounts $ 4,300,966 $ - $ 98,178 $ 4,399,144 Propertytaxes 712,807 - - 712,807 Other taxes 1,823,269 739,689 799,940 3,362,898 Total $ 6,837,042 $ 739,689 $ 898,118 $ 8,474,849 Allowance (4,509,916) - {3,242} (4,5 Total (net of allowance) $ 2,327,126 $ 739,689 $ 894,876 $ 3,961,691 Proprietary Funds: Aquatic Internal Accounts $ 4,779,119 $ 204,524 $ 15 $ 4,983,658 $ 16,798 Total $ 4,779,119 $ 204,524 $ 15 $ 4,983,658 $ 16,798 Allowance (182,586) - - (182,586) - Total (net of allowance) $ 4,596,533 $ 204,524 $ 15 $ 4,801,072 $ 16,798 Unearned Revenue Governmental funds report unearned 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 unearned revenue reported in the governmental funds were as follows: 47 Unearned General Fund: Escrow deposits $ 24,741 LEOSE Public Safety proceeds 28,747 Oth er 1,013 Sub -total $ 54,501 Parks and Recreati on Development Corporati on: Centre and event deposits for future services $ 42,936 Sub -total $ 42,936 Other governmental: Other $ 633 Sub -total $ 633 Total governmental funds $ 98,070 47 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 Reconciliation of unearned revenues to the Government -wide Statement of Net Position is as follows: Governmental activities for unearned revenue is: Unearned Governmental funds $ 98,070 Internal service funds 2,314 Total unearned revenue $ 100,384 Business -type activities for unearned revenue is: Unearned Deposits, Gift Certificates, Store Credit $ 74,853 Total deferred /uneamed revenue for business funds $ 74,853 C. Capital assets Capital asset activity for the year ended September 30, 2013 was as follows: Primary Government Beginning Ending Governmental activities: Balance Increases Decreases Balance Capital assets, nondepreciable Land $ 77,630,868 $ 2,793,958 $ 843,979 $ 79,580,847 Works of art 298,208 - - 298,208 Construction in progress 4,689,409 10,142,375 3,960,206 10,871,577 Total nondepreciable 82,618,485 12,936,333 4,804,185 90,750,632 Capital assets, depreciable: Buildings 63,401,030 11,652 4,020,126 59,392,556 Other improvements 182,673,929 940,000 - 183,613,929 Machinery and equipment 24,117,479 1,087,929 1,112,268 24,093,140 Total depreciable 270,192,438 2,039,581 5,132,394 267,099,625 Less accumulated depreciation for: Buildings (19,225,161) (1,883,911) (3,477,457) (17,631,615) Other improvements (77,876,242) (5,176,565) - (83,052,807) Machinery and equipment (15,836,906) (1,492,262) (955,216) (16,373,952) Total accumulated depreciation (112,938,309) (8,552,738) (4,432,673) (117,058,374) Total depreciable - net 157,254,129 (6,513,157) 699,721 150,041,251 Governmental activities - net $ 239,872,614 $ 6,423,176 $ 5,503,906 $ 240,791,883 48 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 Primary Government Beginning Business -type activities: Balance Increases Decreases Capital assets, nondepreciable Land Construction in progress Total nondepreciable Capital assets, depreciable: Buildings LltilityPlant Other im provem ents Machinery and equipment Total depreciable Less accumulated depreciation for: Buildings LltilityPlant Other im provem ents Machinery and equipment Total accumulated depreciation Total depreciable - net Business -type activities - net Ending Balance $ 2,579,137 $ - $ - $ 2,579,137 518,124 3,980,865 903,334 3,595,655 3,097,261 3,980,865 903,334 6,174,792 4,405,053 - - 4,405,053 99,445,404 720,478 10,047 100,155,835 24,634,997 12,830 98,729 24,549,098 4,876,154 291,979 107,586 5,060,547 133,361,608 1,025,287 216,362 134,170,533 (2,095,835) (148,081) - (2,243,916) (46,870,531) (3,018,662) (9,886) (49,879,307) (10,467,377) (825,646) (23,037) (11,269,986) (2,764,339) (451,011) (78,076) (3,137,274) (62,198,080) (4,443,400) (110,999) (66,530,481) 71,163,528 (3,418,113) 105,363 67,640,052 $ 74,260,789 $ 562,752 $ 1,008,697 $ 73,814,844 Depreciation expense was charged to functionslprograms of the primary government as follows: Governmental activities: General government Public safety Culture and recreation Public works Internal services Total depreciation expense - governmental activities Business -type activities: Water and sewer Golf course Aquatic park Total depreciation expense - business -type activities $355,194 679,330 2,066,142 4,576,587 867,001 $ 8,544,254 $3,209,388 434,890 778,214 $ 4,422,492 49 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 Construction commitments The City has active construction projects as of September 30, 2013. 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: Streets, drainage, public safety, park improvements, municipal facilities, equipment, and utility improvements D. Interfund receivables, payables, and transfers Expended to Project September 30, Authorization 2013 Committed $ 147,257,875 $ 66,889,600 $80,368,275 At September 30, 2013, 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 full repayment in 2017. The original Utility Fund loan was $536,000. The current estimated pay -off is fiscal year 2017. Due to /due from balances for governmental and proprietary funds are as follows: Governmental activities: Due to Due from Total General Fund Golf Fund $ 147,760 Total $ 147.760 Business -type activities: Due to Due from Total Water and Sewer Fund Golf Fund 34,208 Total $ 34.208 Total for all funds $ 181,968 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. 2013 advances to other funds ending balances were as follows: 50 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 Governmental activities: Advances to General Fund Total Business -type activities: Advances to Advances from Total Golf fund $ 441,284 $ 441,284 Advances from Total Water and Sewer Fund Golf Fund $ 169,863 Total 169,863 Total for all funds $ 611,147 Transfers In /out amounts for Governmental and Proprietary Funds are as follows: Transfer in: Governmental In 2013, General Fund received $367,635 from Parks and Recreation Development Corporation for indirect cost fee. Utility Fund transferred $3,471,481. This transfer is for payment for administration fees, payment in lieu of tax, and franchise fees. Aquatic Parks paid for indirect and administration fees in the total sum of $137,088. 51 General Parks and Internal General Capital General Debt Recreation Other Aquatic Service Fund Projects Service Development Governmental Utility Park Funds Total Transfer out Governmental: General Fund $ $ 850,000 $ - $ 487,102 $ 27,217 $ 30 $ - $ 86,390 $ 1,450,739 General Capital Projects - 95 - - - 391 - 486 Parks and Recreation Development Fund 367,635 17,932 364,343 109,778 - 859,688 Tax Increment Finance District #2 - 169,277 - - 169,277 Other Governmental - 62,202 1,214,064 60,000 1,336,266 Subtotal governmental funds $ 367,635 $ 1 ,099,411 $ 1,578,502 $ 487,102 $ 136,995 $ 30 $ 391 $ 146,390 $ 3,816,456 Proprietary: Utility Fund $ 3,471,481 $ 33,127 $ - $ - $ - $ - $ - $ 225,000 $ 3,729,608 Aquatic Park 137,088 4,422 71 ,548 - 213,058 Golf - 4,268 - 4,268 Subtotal enterprise funds 3,608,569 41 ,817 71 ,548 225,000 3,946,934 Internal Service Funds - 237 390,846 - - 391,083 Grand total $ 3,976,204 $ 1 ,141 ,465 $ 1,969,348 $ 558,650 $ 136,995 $ 30 $ 391 $ 371 ,390 $ 8,154,473 Governmental In 2013, General Fund received $367,635 from Parks and Recreation Development Corporation for indirect cost fee. Utility Fund transferred $3,471,481. This transfer is for payment for administration fees, payment in lieu of tax, and franchise fees. Aquatic Parks paid for indirect and administration fees in the total sum of $137,088. 51 FM CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 General Capital projects received $850,000 from General Fund. These transfers were for permanent street and sidewalk construction projects. The other transfers from Parks and Recreation Development Corporation, Tax Increment Finance District #2, Other Governmental Funds, Utility, Aquatic Park, Golf Fund, and Internal Services represent transfers to cover cost for capital and construction contract administration. These transfers in total were $291,465. General Debt Service receives transfer from self - supporting debt repayment sources each year. Parks and Recreation Development Corporation, Other Governmental, and Internal Service funds transferred $364,343, $1,214,064, and $390,846 respectively for their portion of debt service paid in 2013. The other transfer of $95 was for debt issuance premium allocated erroneously in a prior year to General Capital Projects Fund. Parks and Recreation Development Corporation received a baseline level transfer in from General Fund for the Recreation Centre operations. The transfer amount for 2013 was $487,102. Aquatic Park transfer of $71,548 is an annual transfer to help offset operational costs incurred by the fund for the water park operations. Non -major governmental funds received transfers from General Fund ($27,217) and Parks and Recreation Development Corporation Fund ($109,778). General funds transfer was into ARRA Grant fund for the city's portion of expenses to match the grant. The transfer was the last transaction for the grant it has closed out the program. Parks and Recreation Corporation Fund transferred the annual settlement of sales tax 413 receipts to the economic development fund. Proprietary Utility received a transfer from General Fund totaling $30. Transfer was for an adjustment for costs allocated and corrected. In 2013, $391 was transferred to Aquatic Park from the General Capital Projects Fund. This transfer represents a close out share of a construction project. Internal service funds received additional funding to help offset non - capital project related costs above normal operations. These transfers were respectively $86,390 (General Fund), $60,000 (Other Governmental Funds), and $225,000 (Utility Fund). 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 governmental activities (new municipal facility) during the year ended September 30, 2013. The debt issued was $9,845,000 at an additional premium of $300,486. 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: Interest Principal Purpose Rates Amount Governmental activities 2.00 - 4.75% $ 68,945,252 Business -type activities 52 2.00-4.20% 1,759,748 $ 70,705,000 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 Annual debt service requirements to maturity for general obligations bonds are as follows: Year Ending Governmental Activities Business -type Activities September 30, Principal Interest Principal Interest 2014 $ 5,488,148 $ 2,164, 661 $ 291,852 $ 60,806 2015 5,949,376 1,989,736 325,624 50,313 2016 5,443,918 1,816,095 276,082 39,215 2017 5,007,841 1,650, 050 277,159 28,794 2018 4,742,841 1,490, 563 227,159 19,018 2019 -2023 19,423,128 5,346,356 361,872 36,403 2024 -2028 14,150,000 2,558,526 - - 2029 -2033 8,740,000 566,619 - - $ 68,945,252 $ 17,582,606 $ 1,759,748 $ 234,548 Certificates of Oblioation 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. Certificate of obligation bonds currently outstanding are as follows: Purpose Governmental activities Business -type activities Interest Principal Rates Amount 2.70 - 5.00% $ 30,910, 000 2.00-5.00% 15, 300, 000 $ 46, 210, 000 Annual debt service requirements to maturity for certificates of obligation of the primary government are as follows: Year Ending Governmental Activities Business -type Activities September 30, Principal Interest Principal Interest 2014 $ 2,420,000 $ 1,084,445 $ 1,125,000 2015 2,340,000 1,007,252 1,010,000 2016 2,340,000 932,302 1,000,000 2017 2,290,000 857,919 995,000 2018 2,280,000 783,641 995,000 2019 -2023 10,535,000 2,756,355 4,480,000 2024 -2028 7,975,000 804,284 4,035,000 2029 -2032 730,000 38,518 1,660,000 $ 30,910,000 $ 8,264,716 $ 15,300,000 53 $ 503,394 468,299 436,393 405,908 374,818 1,418,603 663,605 83,325 $ 4,354,344 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 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: Interest Principal Purpose Rates Amount Governmental activities 5.25% $ 210,000 $ 210,000 Revenue bond debt service requirements to maturity are as follows: Year Ending Governmental Activities September 30, Principal Interest 2015 $ 105,000 $ 11,025 2016 105.000 5.513 $ 210,000 $ 16,538 Loans payable Governmental activities acquired a loan to pay for certain land acquisition for the new recreation center 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 2014 $ 311,349 $ 5,933 $ 311,349 $ 5,933 Capital Leases Golf Fund entered into a lease agreement as lessee for the financing the acquisition of golf cart equipment originally valued at $387,845. The equipment has a four year estimated useful life with a remaining net book value of $0.00. 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. 54 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 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 2014 81,799 2015 81,799 2016 81,799 2017 92,399 Total Minimum Lease Payments 337,797 Less: Amount representing interest (20,558) $ 317,239 Chanoes in lono -term liabilities Long -term liability activity for the year ended September 30, 2013, is reflected in the following tables. Beginning Due Within Balance Additions Reductions Ending Balance One Year Governmental Activities: Bonds Payable General Obligation Bonds Certificates of Obligation Sales Tax Revenue Bonds Loans Payable Premium on Bond Issues Discount on Bond Issues Compensated Absences Other Post Employment Benefits Net Pension Obligation Total Governmental Activities Business -Type Activities: Bonds Payable General Obligation Bonds Certificates of Obligation Capital Lease Premium on Bond Issues Discount on Bond Issues Compensated Absences Other Post Employment Benefits Net Pension Obligation Total Business -Type Activities IV. OTHER INFORMATION A. Risk management $ 64,269,388 $ 9,845,000 $ 5,169,136 $ 68,945,252 $ 5,488,148 33,330,000 - 2,420,000 30,910,000 2,420,000 615,000 - 405,000 210,000 105,000 840,426 - 529,077 311,349 311,349 1,034,952 300,486 81,605 1,253,833 - (21,803) - (2,013) (19,790) - 3,059,219 343,991 429,118 2,974,092 173,577 5,195,858 1,567,179 - 6,763,037 - 3,882,708 - 170,511 3,712,197 - $ 112,205,748 $ 12,056,656 $ 9,202,434 $ 115,059,970 $ 8,498,074 $ 2,210,612 $ - $ 450,864 $ 1,759,748 $ 291,852 16,415,000 - 1,115,000 15,300,000 1,125,000 387,846 - 70,607 317,239 70,419 176,630 - 12,610 164,020 - (41,709) - (2,706) (39,003) - 446,458 57,599 27,883 476,174 34,380 665,954 199,652 - 865,606 - 485,603 - 22,157 463,446 - $ 20,746,394 $ 257,251 $ 1,696,415 $ 19,307,230 $ 1,521,651 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 55 W C CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 omissions liability; excess workers' compensation; property damage; commercial crime coverage; and employee life insurance. Premiums are paid into the self - insurance internal service fund by all other participating funds and are available to pay claims, claim reserves, and administrative costs of the program. As of September 30, 2013, the interFund premiums did exceed expenses. Liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for health and dental as well as workers' compensation claims that have been incurred but not reported ("IBNR "). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of inflation, recent claim settlement trends (including frequency and amount of pay- outs), and other economic and social factors. An excess coverage medical insurance policy covers individual claims in excess of $175,000 and/or $6,977,147 in the aggregate for a 12- month period beginning on January 1, 2013. Changes in the balances of claims liabilities during the past two years are as follows: 2013 2012 Unpaid claims, beginning of year $ 1,036,724 $ 866,542 Incurred claims (including IBNR) 8,002,401 7,022,699 Claim expense (7,992,402) (6,852,517) Unpaid claims, end of year $ 1,046,723 $ 1,036,724 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. 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 in 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, 2013, 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 56 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 for repayment of the bonds. Accordingly the bonds are not reported as liabilities in the accompanying financial statements. As of September 30, 2013, there were two issues of Industrial Development Bonds outstanding. The aggregate principal amount payable for the issues dated 1983 and 1985 could not be determined; however, the original issue amounts totaled $7,125,000. D. Postemployment Benefits Deferred Compensation Plan The City offers its employees a deferred compensation plan (the "Plan ") created in accordance with Internal Revenue Code Section 457. The Plan is administered by Public Employees Benefit Services Corporation. In 1998, the City implemented the requirements of GASB No. 32, Accounting and Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. In accordance with this statement and tax law, the City has amended its trust agreements which establish that all assets and income of the trust are for the exclusive benefit of eligible employees and their beneficiaries. Due to the implementation of these changes, the City does not have any fiduciary responsibility or administrative duties relating to the deferred compensation plan other than remitting employees' contributions to the trustees. Accordingly, the City has not presented the assets and liabilities of the Plan in these basic financial statements. Retiree Healthcare Plan Plan Description. The City provides postreti rem ent health and dental care benefits for retirees and their dependents. The City does not have a separate audited generally accepted accounting principles financial report for the retiree health plan. 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. Membership Non - vested active members 405 Fully- vested active members 85 Retirees and beneficiaries currently receiving benefits 116 606 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. 57 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 For fiscal year 2013, the City contributed a total of $1,464,473 to the plan for current premiums. Of the $1,464,473, $185,765 was contributed to the OPEB Trust in addition to regular participation and health insurance premium activity. It is anticipated that governmental fund General Fund will liquidate the majority other post employment benefits liabilities. Annual OPEB Cost and Net OPEB Obligation. The City's annual other postern ployment 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 GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation to N RH R EH P: Annual required contribution Interest on net OPEB obligation Adjustment to annual required contribution Annual OPEB cost (expense) Contributions made Increase (Decrease) in net OPEB obligation Net OPEB obligation- beginning ofyear Net OPEB obligation -end of year 2011 2012 2013 $ 2,587,136 $ 2,712,747 $ 2,991,041 106,681 190,604 263,782 (84,640) (151,228) (209,284) 2,609,177 2,752,123 3,045,539 (744,182) (1,125,966) (1,278,708) 1,864,995 1,626,157 1,766,831 2,370,660 4,235,655 5,861,812 $ 4,235,655 $ 5,861,812 $ 7,628,643 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2011 through 2013: Funded Status and Funding Progress. As of September 30, 2013, the most recent actuarial valuation date, the plan was 2% percent funded. The actuarial accrued liability for benefits was $46,317,371, and the actuarial value of assets was $1,032,303, resulting in an unfunded actuarial accrued liability (UAAL) of $45,285,068. The covered payroll (annual payroll of active employees covered by the plan) was $31,030,924 and the ratio of the UAAL to the covered payroll was 145.9 %. 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 58 Percentage Fiscal Annual of Annual Year OPEB OPEB Cost Net OPEB Ended Cost Contributed Obligation 9/30/2011 $ 2,609,177 28.52% $ 4,235,655 9/30/2012 $ 2,752,123 40.91% $ 5,861,812 9/30/2013 $ 3,045,539 41.99% $ 7,628,643 Funded Status and Funding Progress. As of September 30, 2013, the most recent actuarial valuation date, the plan was 2% percent funded. The actuarial accrued liability for benefits was $46,317,371, and the actuarial value of assets was $1,032,303, resulting in an unfunded actuarial accrued liability (UAAL) of $45,285,068. The covered payroll (annual payroll of active employees covered by the plan) was $31,030,924 and the ratio of the UAAL to the covered payroll was 145.9 %. 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 58 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short -term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long -term perspective of the calculations. In the September 30, 2013, 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 Ievel of the plan at the valuation date, and an annual healthcare cost trend rate of 10.00% initially, reduced by decrements to an ultimate rate of 5.00% 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. The healthcare cost trend rate for the plan used 9.5% for 2013 ending with 4.5% rate 2023 and beyond. E. Employee retirement systems and pension plans Plan Descriotion The City provides pension benefits for all of its full -time employees through a nontraditional, joint contributory, hybrid defined benefit plan in the state -wide Texas Municipal Retirement System (`TMRS "), one of 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. 59 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 Contribution The contribution rate for employees is 7 %, and the City's matching percent is currently 17.87 %, 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 3G -year amortization period. Contributions are made monthly by both the employees and the City. The actuarial valuation is performed annually to determine the City's required contribution percentage. Since the City needs to know its contribution rate in advance for budgetary purposes, there is a one year delay between the actuarial valuation that is the basis for the rate and the calendar year when the rate goes into effect (i.e. December 31, 2011 is effective for rates beginning January 2013). 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 the last three valuations are as follows: Valuation Date 12/31/2010 12/31/2011 12/31/2012 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 27.2 years: 26.3 years: 25.3 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 M arket Market Market Actuarial Assumptions: Investment Rate of Return * 7.0% 7.0% 7.0% 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% in the required contribution rates occurring as a result of the changes in funding method and assumptions, voted to (1) 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 (200 9-2016) 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- 60 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 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 $26,060,893, which represents the difference between the actuarial value of assets of $157,413,007 and the actuarial /accrued liability of $183,473,900. The funded ratio of the City's plan increased from 83.4% to 85.8% as a result of the decreased UAAL. The City's contributions to the plan were $5,537,775, $5,292,291, and $4,958,007, for the years ended September 30, 2013, 2012, and 2011, respectively, in accordance with actuarially determined requirements. Contributions by the City were 17.26% (phase in rate) for the months in calendar year 2012 and 17.87% for the months in calendar year 2011. The total covered payroll in fiscal 2013 was $31,030,924. The following tables shows the components of the City's annual net pension obligation costs for the year, the amount actually contributed to the plan, and changes in the City's net pension obligation: Annual required contribution Interest on net pension obligation Adjustment to net pension obligation Annual PENSION cost (expense) Contributions made Increase in net pension obligation Net pension obligation- beginning of year Net pension obligation -end ofyear 2013 $ 5,310,872 $ 281,941 (247,706) 5,345,107 (5,537,775) (192,668) 4,368,311 2012 2011 5,463,543 $ 6,054,626 266,160 200,330 (228,790) (165,750) 5,500,912 (4,934,866) 566,046 3,802,265 6,089,206 (4,958,007) 1,131,199 2,671,066 $ 4,175,643 $ 4,368,311 $ 3,802,265 Annual pension cost and percentage of pension cost contributed are as follows: It is anticipated that governmental major fund General Fund will liquidate the majority of net pension obligation. 61 Percentage Fiscal Annual of Annual Year Pension Pension Cost Net Pension Ended Cost Contributed Obligation 9/30/2013 $ 5,345,107 104% $ 4,175,643 9/30/2012 5,500,912 90% 4,368,311 9/30/2011 6,089,206 81% 3,802,265 It is anticipated that governmental major fund General Fund will liquidate the majority of net pension obligation. 61 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 F. Subsequent events On October 28, 2013, the City issued $8,890,000 in certificates of obligation bonds and $20,945,000 in general and refunding obligation bonds. The reissued bonds are variable rates. The average interest rate on the bonds is 3.23% and 3.67% and both issues mature in February 2034. G. Implementation of future GASB Statements The Governmental Accounting Standards Board ("GASB ") has issued the following new statements to be implemented in future years. Statement No. BB: Technical Corrections — 2092 — an Amendment of GASB Statements No. 90 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 City in fiscal year 2014. 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 City 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 City in fiscal year 2015. 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; 62 CITY OF NORTH RICHLAND HILLS Notes to Basic Financial Statements September 30, 2013 • 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. Statement No. 70: Accounting and Financial Reporting for Nonexchange Financial Guarantees GASB Statement No. 70: Accounting and Financial Reporting for Nonexchange Financial Guarantees was issued in April 2013. The requirements of this Statement will enhance comparability of financial statements among governments by requiring consistent reporting by those governments that extend nonexchange financial guarantees and by those governments that receive nonexchange financial guarantees. This Statement also will enhance the information disclosed about a government's obligations and risk exposure from extending nonexchange financial guarantees. This Statement also will augment the ability of financial statement users to assess the probability that governments will repay obligation holders by requiring disclosures about obligations that are issued with this type of financial guarantee. This standard becomes effective for the City in fiscal year 2014 Statement No. 71: Pension Transition for Contributions Made Subsequent to the Measurement Date GASB Statement No. 71: Pension Transition for Contributions Made Subsequent to the Measurement Date was issued in November 2013. This statement is to improve accounting and financial reporting by addressing an issue in Statement No. 68, Accounting and Financial Reporting for Pensions, concerning transition provision related to certain pension contributions made to defined benefit pension plans prior to implementation of that statement. The requirements of this Statement will eliminate the source of a potential significant understatement of restated beginning net position and expense in the first year of implementation of Statement 68 in the accrual -basis financial statements of employers and nonemployer contributing entities. This benefit will be achieved without the imposition of significant additional costs. This standard becomes effective for the City in fiscal year 2015. The City has not yet determined the effect on the City's financial statements or disclosures upon implementation of these new accounting standards. 63 This page intentionally left ,blank. 64 REQUIRED SUPPLEMENTARY INFORMATION 65 This page intentionally left ,blank. 66 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, 2012 and each of the six 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 , 2012, the plan's funded ratio increased from 83.4% to 85.8 %. 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, 2012, the plan's ratio of the UAAL to its covered payroll decreased from 93.73% to 81.06 %. In June, 2011, SB 350 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, 2006 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, 2012 TMRS Comprehensive Annual Financial Report (CAFR). City's annual contribution stated as a percentage of covered payroll: For Calendar Year 2013 2012 2011 2010 2009 17.87% 17.77% 17.26% 16.07% 15.50% 2008 2007 13.50% 13.63% Note Source: TM PS Comprehensive Annual Report for the Year Ending December 31, 2012, Actuarial Section and City records. 67 Unfunded Valuation Actuarial Actuarial Actuarial Accrued Annual UAAL Dated Value of Accrued Liability Funded Covered as % of December 31, Assets Liability (UAAL) Ratio Payroll Payroll 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% 2012 157,413,007 183,473,900 26,060,893 85.8% 32,151,055 81.06% Note: The Schedule of Funding Progress summarizes the actuarial value of the plan's assets and actuarial accrued liability as of December 31, 2012 and each of the six 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 , 2012, the plan's funded ratio increased from 83.4% to 85.8 %. 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, 2012, the plan's ratio of the UAAL to its covered payroll decreased from 93.73% to 81.06 %. In June, 2011, SB 350 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, 2006 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, 2012 TMRS Comprehensive Annual Financial Report (CAFR). City's annual contribution stated as a percentage of covered payroll: For Calendar Year 2013 2012 2011 2010 2009 17.87% 17.77% 17.26% 16.07% 15.50% 2008 2007 13.50% 13.63% Note Source: TM PS Comprehensive Annual Report for the Year Ending December 31, 2012, Actuarial Section and City records. 67 CITY OF NORTH RICHLAND HILLS, TEXAS Required Supplementary Information North Richland Hills Other Post Employment Benefits Schedule of Funding Progress 68 Unfunded Valuation Actuarial Dated Actuarial Actuarial Accrued Annual UAAL as September Value of Accrued Liablity Funded Covered % of 30, Assets Liability (AAL) (UAAL) Ratio Payroll Payroll 2009 $ - $ 37,107,498 $ 37,107,498 0.00% $ 29,762,000 124.70% 2010 $ 518,660 $ 38,868,426 $ 38,349,766 1.00% $ 30,952,000 123.90% 2011 $ 595,415 $ 42,098,543 $ 41,450,154 2.00% $ 30,514,794 135.80% 2012 $ 779,748 $ 44,173,440 $ 43,393,624 2.00% $ 31,735,386 136.70% 2013 $ 1,032,303 $ 46,317,371 $ 45,285,068 2.00% $ 31,030,924 145.90% 68 CITY OF NORTH RICHLAND HILLS, TEXAS Required Supplementary Information (unaudited) Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget (Non -GAAP Basis) and Actual GENERALFUND For the Year Ended September 30, 2013 Budgeted Amounts Variance with Final Budget Positive Original Final Actual (Negative) REVENUES Taxes: Property taxes {penalties &interest included) $ 14,949,450 $ 14,897,450 City sales taxes 8,610,000 8,782,200 Mixed beverage taxes 100,000 103,000 Franchise taxes 5,019,236 4,921,720 Sub -total Taxes 28,678,686 28,704,370 Fines and forfeitures 2,399,032 2,576,746 Licenses and permits 1,355,715 1,855,001 Charges forservices 3,188,635 3,438,844 Intergovernmental 4,325,821 4,188, 405 Mscellaneous 793,751 743,480 Sub -total Non -Tax Revenues 12,052,954 12,802,477 Other Appropriations: Court Technology Funds - 14,900 Court Security Funds - 4,904 Utility Assistance Program 20,000 20,000 Encumbrances - 387,534 Sub -Total Appropriations 20,000 427,338 TOTAL REVENUES 40,761,640 41,934,1 EXPENDITURES City Council 123,613 123,613 City Manager 523,907 526,855 Communications 338,178 340,413 City Secretary 454,703 458,382 Legal 338,509 338,509 Human Resources 128,322 139,447 Finance 705,801 742,143 Budget & Research 380,372 383,795 Municipal Court 1,304,927 1,337,276 Planning and Inspections 942,551 933,609 Economic Development 298,066 304,077 Library 1,992,928 2,013,047 Neighborhood Services 1,592,408 1,653,543 Public Works 3,627,315 3,703,306 Parks & Recreation 2,034,302 2,048,165 Police 12,186,527 12,378,629 Emergency Manage meat 7613,584 1,230,039 Fire 9,938,815 10,121,332 Building Services 678,270 678,270 Non - Departmental 2,140,102 2,191,819 Sub -Total Departments 40,494,190 41,646,269 Reserves & Other Expenditures Reserves 183,000 216,507 Informationservices 69,883 69,883 Sub -Total Reserves and Other 252,883 286,390 TOTAL EXPENDITURES 40,747,073 41,932,659 Net Increase $ 14,567 $ 1,526 The notes to Pr regL#red sgpptemetYat dfomiahon is an mtegrct put of tfus scfrdae 69 14,568,371 $ 8,686,713 117,223 4,942,902 _ 28,315,208 2,424,054 1,952,861 3,519,825 4,173,981 742,156 12,812,886 58,860 6,381 387,534 452,775 41.580.869 102,795 526,000 322,447 422,820 318,493 129,946 695,709 365,626 1,285,723 909,050 303,544 1,961,951 1,540,309 3,397,672 1,99:3,750 12,098,984 915,788 9,989,287 678,270 2,250,905 40,209,090 246,715 69,883 316,598 40,525,688 $ 1,055,181 (329,079) {95,487) 14,223 21,182 (389,162) (152,682) 97,860 80,981 (14,425) (1,324) 10,409 (14,900) 53,956 (13,619) 25,437 (353.316) 20,818 855 17,966 35,562 20,016 9,501 46,434 18,170 51,553 24,549 533 51,086 113,234 305,633 54,415 279,645 314,251 132,045 {59.086) 1,437,179 {30,208) {30,208) 1,406,971 $ 1,053,655 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Required Supplementary Information September 30, 2013 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 Grants 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 yearthe City budget appropriations were increased by $1,597,587. Revision Increase Legally Adopted Fund Original Final (Decrease) Explanation General Fund $40,747,073 $41,932,659 $ 1,185,586 Prior year encumbrances totaling $387,534 rolled into FY12113 accounting for a part of this increase. Public Safety Departments (Police, Emergency Management, and Fire Protection) represented the rest of the final increase over original. Consolidation of four City's Police Services (9 11 Dispatch and Detention Center) into one center under the City's management, emergency service expenditures (i.e. radio system) and proprietary fire software were all added during fiscal year. General Debt Service $ 8,452,619 $ 8,518,637 $ 66,018 During the fiscal year, minor adjustments were made to revise budget to include actual, instead of estimated, principal and interest payments. Donations $ 151,297 $ 141,297 $ (10,000) The decrease resulted from a removal of anticipated donation expenditures for a special event. This event was postponed during the 2013 year. Special Investigations $ 550,904 $ 624,128 $ 73,224 During Fiscal Year 2012/2013 a new 911 communications grant was received for specialized communication equipment. This increased the amount of expenditure anticipated. Parks and Recreation $ 7,620,861 $ 7,819,706 $ 198,845 The Debt Service transfer to cover Sales Tax Revenue Bonds principal and interest was reduced due to sufficient debt service reserve balances (Savings $420,789). Management increased the amount to reserve for Capital Improvement for future budget periods in excess of this savings plus any anticipated net revenues from the Parks Maintenance of the fund. Crime Control District $ 4,395,500 $ 4,479,414 $ 83,914 The minor increase in revised budget is related to the consolidation of Police Department services with three other local entities. Total $ 61,918,254 $ 63,515,841 $ 1,597,587 70 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Required Supplementary Information September 30, 2013 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 $ 1,055,181 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 (452,775) The City budgets specific "Reserves" expenditures as a outflow but in GAAP statements it is not an expenditure: Peg Franchise Fees Reserves 152,961 Increase (decrease) in investmentfair value changes are not considered a resource/inflow for budgetary recognition 385 Sources /Inflows 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 (147,760) Outflows of sources for prepaid expenditures for budgetary purposes are immediately recognized as an outflow upon remittance of payment in budgetary basis. GAAP statements delay expenditure recognition until the period of coverage. 127,240 Outflows for expenditures for budgetary basis is recognized in actual period in which resources were used to expend the payment. Litigation expenditures incurred but not paid in current fiscal year were delayed to be appropriated in period the outflows transpired. (78,000) Special funded projects are appropriated through long range capital improvement budget (43,723) 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 $ 613,509 C. General Debt Service 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 $ 406,254 The City budgets specific "Reserves" expenditures as a outflow but in GAAP statements it is not an expenditure: Net Operations from Parks Maintenance, Tennis Center, and Recreation Centre for future capital or operational needs (58,058) Total "Net Change in Fund Balance" from the Statement of Revenues, Expenditures, and Changes in Balances - Governmental Fund -- General Debt Service $ 348,196 D. Parks and Recreation Development Corporation 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 specific "Reserves" expenditures as a outflow but in GAAP statements it is not an expenditure: Net Operations from Parks Maintenance, Tennis Center, and Recreation Centre for future capital or operational needs 1,480,176 Special funded projects inflows /resources are appropriated through long range capital improvement budget 117,912 in which segregated and specific funding is appropriated outside of the operating budget Special funded projects expenditures are appropriated through long range capital improvement budget (760,851) 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-- Parks and Recreation Development Corporation $ 837,237 71 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to Required Supplementary Information September 30, 2013 E. Promotional 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 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 -- Promotional Fund F. Special Investigation Fund Budget -to- Actual Reconciliation 37,875 (39,956) $ (2,081) 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 $ 393,060 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 (252,285) Total "Net Change in Fund Balance" from the Statement of Revenues, Expenditures, and Changes in Balances- Governmental Fund -- Special Investigations Fund $ 140,775 G. Crime Control District 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 The City budgets specific "Reserves" expenditures as a outflow but in GAAP statements it is not an expenditure: Peg Franchise Fees Reserves Total "Net Change in Fund Balance" from the Statement of Revenues, Expenditures, and Changes in Balances- Governmental Fund -- Crime Control District Fund H. Gas Development Fund Budget -to- Actual Reconciliation (15,000) 184,301 $ 169,301 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 $ 861,917 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 (439,843) Special funded projects inflows /resources are appropriated through long range capital improvement budget (3,756) in which segregated and specific funding is appropriated outside of the operating budget Special funded projects expenditures are appropriated through long range capital improvement budget (33,127) 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 -- Gas Development Fund $ 385,191 72 NON -MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS The Promotional Fund accounts for the operations and expenditures for which hotel /motel occupancy taxes are used. Occupancy tax revenues are primarily to attract tourist and new businesses to the City. The Donations Fund holds funds contributed (donated) to the City for special projects earmarked by requests or nonrecurring expenditures. It primarily collects and holds funds that are voluntarily given by the citizens via adding $1.50 to their water utility billing which is then distributed to support the activities of the library and neighborhood services departments. The Special Investigations Fund is mandated by state statue to account for various legal seizure and forfeiture deposits and expenditures. The Drainage Utility Fund accounts for the establishment of drainage facilities within the municipal boundaries of the City and the subsequent billing and collection of fees so established. The 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 Grants Fund is a centralized fund accounting for all private, local, state, and federal grant proceeds. The AR RA 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 through 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 TI F #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. 73 Assets Cash and cash equivalents I nvest ments Receivables, net of allowance Accounts Othertaxes receivable Interest receivable Intergovernmental receivables Other receivables Prepaid items Restricted: Cash and cash equivalents I nest ments Total assets Liabilities Accounts payable Accrued liabilities Intergovernmental payables Deposits and other liabilities Unearned avenue Total liabilities Fund Balance Nonspendables: Prepaiols Restricted: Crime control district Debt service Grants Promotional &economic development Public safety Capital projects (bond funded] Committed: Donations Drainage utility Gas development Assigned: N/Uncipal facilities project Encumbrances Total fund balance Total liabilities and fund balance CITY OF NORTH RICHLAND HILLS, TEXAS Combining Balance Sheet Non -major Govemmental Funds September 30, 2013 Special Special Crime Control Promotional Donations Investigations Drainage Utility District Grants $ 236,984 $ 505,083 $ 379,591 $ 488,451 $ $ 211,063 470,849 273,189 700,255 31,799 - - - 94,933 - 55,524 - - - 744,419 - 234 517 273 413 119 2,249 - - 4,654 - - 128,497 - - - 391 443 1,79:3 148 - - - 552,137 - - - - 34,302 - $ 504,248 $ 976,449 $ 659,500 $ 1,284,052 $ 1,331,125 $ 162,936 $ 29,879 $ 14,184 $ 951 $ - $ 11,205 $ 52,326 2,082 - - 79,337 - 12 - - - - 633 - 29,918 31,951 14,196 1,584 90,542 82,244 443 1,79:3 148 - - 1,240,435 - 80,692 468,844 - - - 656,123 962,253 - - 1,284,052 3,000 - - - - - 472,287 962,253 657,916 1,284,052 1,240,583 80,692 $ 504,248 $ 976,449 $ 659,500 $ 1,284,052 $ 1,331,125 $ 162,936 74 Revenue Debt Service Economic Taxlncrement Tax Inc re ment Sales Tax TotalNorrmajor ARRA Grant Development Gas Development Traffic Safety Finance Distract #1 Finance Districts Revenue Bond Governmental $ $ - $ 2,648,158 $ 187,900 $ - $ $ $ 4,446,167 3,463,579 2,475,084 145,031 7,770,849 - - - 94,933 - - - - 799,943 3,251 1,235 572 5,661 1,483 89 16,097 - - - - - - 133,151 71,586 - - 71,977 - - - 79 672 3,135 1,053,237 590,565 652,665 359,810 3,208,414 - - - 83,314 871,878 122,137 1,111,631 $ $ 4,520,067 $ 5,195,054 $ 333,503 $ 679,540 $ 1,526,105 $ 482,708 $ 17,656,297 $ $ 55,000 $ 1,050 $ 46,984 $ 16,617 $ - $ - $ 228,196 - - 2,854 - 84,273 94,461 94,461 - 12 - - - - 30,551 55,000 1,050 144,299 16,617 - - 437,493 - - - - 79 672 3,135 - - 1,240,435 1,526,026 482,036 2,008,062 - - - 80,692 717,590 - 1,186, 434 - 189,204 - 845,327 - 662,923 662,923 962,253 - 1,284,052 1,915,014 1,915,014 3,747,477 3,280,000 7,027,477 - - - - - - 3,000 4,465,067 5,195,014 189,204 662,923 1,526,105 482,708 17,218,804 $ $ 4,520,067 $ 5,196,054 $ 333,503 $ 679,540 $ 1,526,105 $ 482,708 $ 17,656,297 75 CITY OF NORTH RICH LAND HILLS, TEXAS Combining Statement of Revenues, Expenditures, and Changes in Fund Balance Non -major Governmental Funds Year Ended September 30, 2013 76 Special Special Crime Control Promotional Donations Investigations Drainage Utility District Grants REVENUES Taxes $ 221,003 $ $ $ - $ 4,400,773 $ Charges for services - 852,856 - Civil citations - Contributions - 138,871 - - Investment income 745 1,481 791 1,614 2,334 16,353 Intergovernmental - - 131,823 - - 739,729 Forfeitures - 323,285 - Miscellmeous 3 Total revenues 221,748 140,355 455,899 854,470 4,403,107 756,082 EXPENDITURES General government 101,453 23,315 - 1,947 - 458,277 Public safety - 9,668 215,630 - 4,233,806 169,828 Culture and recreation 82,420 21,295 - - 61370 Capital outlay: General government 25,000 - - - Public safety - - 99,494 108,883 Culture and recreation 14,956 10,552 - - Public works - - Debt service: Principal retirement Interest and fiscal charges - - - - - - Total expenditures 223,829 64,830 315,124 1,947 4,233,806 743,358 Excess [deficiency] of revenues over expenditures [2,081] 75,525 140,775 852,523 169,301 12,724 OTHER FINANCING SOURCES [USES] Proceeds from sale of assets - - - 21635 Transfer in Transfers out [774,221] - Total other financing sources [uses] - - [774,221] - 2,635 Net change in fund balance [2,081] 75,525 140,775 78,302 169,301 15,359 Fund balance- beginning of year 474,368 886,728 517,141 1,205,750 1,071,282 65,333 Fund balance- end of the year $ 472,287 $ 962,253 $ 657,916 $ 1,284,052 $ 1,240,583 $ 80,692 76 Revenue Debt Service Tax Increment $ $ $ - $ $ $ 3,053,271 $ $ 7,675,047 2,160 - 855,016 - 923,282 923,282 138,871 28 8,119 3,491 31,144 1,956 68,056 - - - - - 871,552 - 323,285 - - 920,757 - - - 920,760 28 8,119 922,917 926,773 31,144 3,053,271 1,956 11,775,869 6,555 - 591,547 828,821 5,457,753 - 110,085 59,000 30,328 114,328 5,488 213,865 - - 25,508 226,605 226,605 436,315 10,154,062 28 [50,881] 886,034 92,464 [195,461] 75,215 [434,359] 1,621,807 - - - - 2.63` 27,217 109,778 136,995 27,245 58,897 385,191 32,464 [196,663] 75,215 [434,359] 425,171 [27,245] 4,406,170 4,809,823 156,740 859,586 1,450,890 917,067 16,793,633 $ - $ 4,465,067 $ 5,195,014 $ 189,204 $ 662,923 $ 1,526,105 $ 482,708 $ 17,218,804 77 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget (Non -GAAP Basis) and Actual GENERAL DEBT SERVICE FUND Year Ended September 30, 2013 Notes to required supplementary information is an integral part of this schedule 78 Variance with Final Budget - Positive Original Final Actual (Negative) REVENUES Taxes: Property taxes (penalities & interest included) $ 6,860,707 $ 6,860,707 $ 6,860,707 $ - Sub -total ad valorem taxes $ 6,860,707 $ 6,860,707 $ 6,860,707 $ - Transfers in: Drainage utility 636,851 774,221 774,221 - Parks & recreation facilities development corp. 364,343 364,343 364,343 - Fleet services fund 380,112 370,094 370,094 - Facilities services fund 20,752 20,752 20,752 - Gas development fund - 439,881 439,843 (38) Sub -total transfers in $ 1,402,058 $ 1,969,291 $ 1,969,253 $ (38) Other: Interest income 12,370 12,370 2,971 (9,399) City of Watauga, cip participation 82,853 82,853 82,853 - Miscellaneous Revenues - - 195,402 195,402 Appropriation of fund balance 94,631 58,058 58,058 - Sub -total other $ 189,854 $ 153,281 $ 339,284 $ 186,003 Total revenues $ 8,452,619 $ 8,983,279 $ 9,169,244 $ 185,965 EXPENDITURES Existing bonds & co's $ 7,905,776 $ 8,071,794 $ 8,065,577 $ 6,217 Existing loans 439,843 439,843 549,205 (109,362) Issuance costs/paying agent fees 107,000 7,000 148,208 (141,208) Total expenditures $ 8,452,619 $ 8,518,637 $ 8,762,990 $ (244,353) Net Increase (Decrease) $ - $ 464,642 $ 406,254 $ (58,388) Notes to required supplementary information is an integral part of this schedule 78 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget (Non -GAAP Basis) and Actual PARKS AND RECREATION DEVELOPMENT CORPORATION FUND Year Ended September 30, 2013 Variance with Final Budget - Positive Original Final Actual (Negative) REVENUES Sales tax $ 4,305,000 $ 4,391,100 $ 4,343,358 (47,742) Interest income 9,671 9,671 5,379 (4,292) Youth assn. maintenance fees 43,200 50,250 56,037 5,787 Tennis center revenue 363,400 368,564 364,603 (3,961) Transfer in from aquatic park fund 71,548 71,548 71,548 - Park impact fees 50,000 88,839 110,761 21,922 Insurance - 5,191 5,191 - Other income 1,200 2,459 2,545 86 NRH Centre - Memberships/drop-in passes 1,386,900 1,386,900 1,308,667 (78,233) Fitness 302,290 317,000 338,251 21,251 Recreation /sports 273,890 260,402 263,439 3,037 Grand hall rental 141,520 144,520 129,542 (14,978) Catering & event fees 40,000 40,000 13,368 (26,632) Aquatic programs 53,360 75,000 81,560 6,560 Pool rental 3,000 5,000 5,646 646 Gym rental 3,100 5,100 5,910 810 Concessions /merchandise 13,000 24,200 29,580 5,380 Special events 10,000 10,160 10,542 382 Other 62,680 76,700 108,326 31,626 General fund 487,102 487,102 487,102 - Total revenues $ 7,620,861 $ 7,819,706 $ 7,741,355 $ (78,351) EXPENDITURES Operating Park facilities development administration $ 672,753 $ 679,481 $ 680,471 $ (990) Parks & public grounds 1,871,326 1,890,662 1,701,319 189,343 Tennis center operations 606,376 611,360 573,145 38,215 Sub -total operating $ 3,150,455 $ 3,181,503 $ 2,954,934 $ 226,568 NRH Centre Center management $ 634,538 $ 628,520 $ 609,060 $ 19,460 Fitness 319,794 321,435 294,418 27,017 Building operations 174,637 176,271 168,211 8,060 Aquatic 567,139 511,833 481,301 30,532 Recreation sports 300,848 361,411 279,238 82,173 Event center 206,054 207,489 154,901 52,588 Building services 430,050 430,050 430,050 - Sub -total NRH Centre $ 2,633,060 $ 2,637,009 $ 2,417,180 $ 219,830 Other & Reserves Debt service - revenue bonds $ 420,789 $ - $ - $ - Debt service - CO's 364,343 364,343 364,343 - Indirect costs 367,635 367,635 367,635 - Non- department 81,194 49,577 47,309 2,268 Reserve for capital 351,978 914,786 1,115,422 (200,636) Reserve for economic development 107,625 109,778 109,778 - Reserve for N R H Centre 143,782 195,075 364,754 (169,679) Total other & reserves $ 1,837,346 $ 2,001,194 $ 2,369,241 $ (368,047) Total expenditures $ 7,620,861 $ 7,819,706 $ 7,741,355 $ 78,351 Net Increase (Decrease) $ - $ - $ - - Notes to required supplementary information is an integral part of this schedule. 79 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget (Non -GAAP Basis) and Actual PROMOTIONAL FUND Year Ended September 30, 2013 Notes to required supplementary information is an integral part of this schedule 80 Variance with Final Budget - Positive Original Final Actual (Negative) REVENUES Occupancy tax proceeds $ 210,500 $ 209,494 $ 221,003 11,509 Interest revenue 2,034 2,034 745 (1,289) Total revenues $ 212,534 $ 211,528 $ 221,748 $ 10,220 EXPENDITURES Economic development $ 106,051 $ 106,617 $ 101,203 $ 5,414 Culture &I eisure 104,366 104,366 82,420 21,946 N on- departmental 1,111 545 250 295 Total expenditures $ 211,528 $ 211,528 $ 183,873 $ 27,655 Net Increase $ 1,006 $ - $ 37,875 $ 37,875 Notes to required supplementary information is an integral part of this schedule 80 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget (Non -GAAP Basis) and Actual DONATIONS FUND Year Ended September 30, 2013 81 Variance with Final Budget - Positive Original Final Actual (Negative) REVENUES Contributions NRH water bills $ 88,692 $ 69,204 $ 67,000 (2,204) Shelter fund 5,500 6,000 5,951 (49) Sub -total contributions $ 94,192 $ 75,204 $ 72,951 $ (2,253) Donations Spay /neuter $ 15,000 $ 9,625 $ 8,852 (773) Duncan 15,000 15,000 15,000 - Santa cops 4,000 4,651 4,651 - Sub -total donations $ 34,000 $ 29,276 $ 28,503 $ (773) Proceeds Library book sales $ 10,500 $ 11,250 $ 9,245 (2,005) Sub -total proceeds $ 10,500 $ 11,250 $ 9,245 $ (2,005) Other Interest revenue $ 4,509 $ 4,509 $ 1,481 (3,028) Other income 57,000 33,602 28,174 (5,428) Sub -total other $ 61,509 $ 38,111 $ 29,655 $ (8,456) Total revenues $ 200,201 $ 153,841 $ 140,354 $ (13,487) EXPENDITURES Library - book collections $ 59,988 $ 59,988 $ 16,270 $ 43,718 Neighborhood services Animal services 25,310 25,310 21,899 3,411 Keep nrh beautiful 14,999 14,999 11,994 3,005 Muncipal court - teen court 3,000 3,000 2,500 500 Parks special events and arts 36,000 26,000 2,498 23,502 Police department 12,000 12,000 9,668 2,332 Total expenditures $ 151,297 $ 141,297 $ 64,829 $ 76,468 Net Increase $ 48,904 $ 12,544 $ 75,525 $ 62,981 81 CITY OF NORTH RICH LAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget (Non -GAAP Basis) and Actual SPECIAL INVESTIGATIONS FUND Year Ended September 30, 2013 Notes to required supplementary information is an integral part of this schedule 82 Variance with Final Budget - Positive Original Final Actual (Negative) REVENUES Forfeited funds $ 136,000 $ 275,996 $ 323,285 47,289 AFIS reimbursements 13,500 12,920 12,920 - 911 telecom 120,000 62,000 118,903 56,903 Interest income 2,323 2,323 790 (1,533) Other income 18,604 18,604 - (18,604) Appropriations of fund balance 260,477 252,285 252,285 - Total revenues $ 550,904 $ 624,128 $ 708,184 $ 84,056 EXPENDITURES Federal forefeited funds $ 234,500 $ 302,342 $ 145,012 $ 157,330 State forefeited funds 63,300 63,300 31,111 32,189 Local forfeited funds 1,000 6,382 6,382 0 AFIS maintenance & equipment 113,500 113,500 12,532 100,968 911 telecom 120,000 120,000 118,903 1,097 LEOSE contributions 18,604 18,604 1,184 17,420 Total expenditures $ 550,904 $ 624,128 $ 315,123 $ 309,005 Net Increase $ - $ - $ 393,060 $ 393,060 Notes to required supplementary information is an integral part of this schedule 82 CITY OF NORTH RICHLAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget (Non -GAAP Basis) and Actual DRAINAGE UTILITY FUND Year Ended September 30, 2013 83 Variance with Final Budget - Positive Original Final Actual (Negative) REVENUES Drainage fees $ 849,000 $ 849,000 $ 852,856 3,856 Interest income 6,066 6,066 1,614 (4,452) Total revenues $ 855,066 $ 855,066 $ 854,470 $ (596) EXPENDITURES Debt service (tranfers out) $ 774,221 $ 774,221 $ 774,221 $ - Other expenditures 24,500 24,500 1,947 22,553 Total expenditures $ 798,721 $ 798,721 $ 776,168 $ 22,553 Net Increase $ 56,345 $ 56,345 $ 78,302 $ 21,957 83 CITY OF NORTH RICH LAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget (Non -GAAP Basis) and Actual CRIME CONTROL DISTRICT Year Ended September 30, 2013 REVENUES Sales tax Franchise tax Interest income Previous year encumbrances Total revenues EXPENDITURES Operating Administrative services Investigations Uniform patroll Technical services Propery Evidence Sub -total operating Other & Reserves Partner agency funding Other Investigations Total other & reserves Total expenditures Net Increase (Decrease) Variance with Final Budget - Positive Original Final Actual (Negative) $ 4,305,000 $ 4,391,100 $ 4,329,737 (61,363) 90,500 71,537 71,037 (500) - 1,777 2,334 557 - 15,000 15,000 - $ 4,395,500 $ 4,479,414 $ 4,418,108 $ (61,306) 184,301 580,389 592,010 513,320 78,690 446,225 444,913 436,689 8,224 2,539,899 2,569,661 2,570,542 (881) 485,724 510,613 506,183 4,430 101,825 109,626 106,703 2,923 $ 4,154,062 $ 4,226,823 $ 4,133,437 $ 93,386 $ 51,505 $ 38,535 $ 38,249 $ 286 110,787 65,996 62,121 3,875 79,146 148,060 184,301 (36,241) $ 241,438 $ 252,591 $ 284,671 $ (32,080) $ 4,395,500 $ 4,479,414 $ 4,418,108 $ 61,306 Notes to required supplementary information is an integral part of this schedule. 84 CITY OF NORTH RICH LAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget (Non -GAAP Basis) and Actual GAS DEVELOPMENT FUND Year Ended September 30, 2013 Notes to required supplementary information is an integral part of this schedule 85 Variance with Final Budget - Positive Original Final Actual (Negative) REVENUES Royalties/overrides General fund purposes $ 50,000 $ 772,000 $ 920,757 148,757 Park development purposes 70,000 - - - Economic Development Purposes 20,000 - - - Sub -total royalties 1 overrides $ 140,000 $ 772,000 $ 920,757 $ 148,757 Other Right of way usage fees $ - $ 2,160 $ 2,160 - Interest income $ 20,433 $ 20,433 $ - (20,433) Sub -total other $ 20,433 $ 22,593 $ 2,160 $ (20,433) Appropriation of reserves General fund purposes $ 439,843 $ 439,843 $ 439,843 - Sub -total appropriation of reserves $ 439,843 $ 439,843 $ 439,843 $ - Total revenues $ 600,276 $ 1,234,436 $ 1,362,760 $ 128,324 EXPENDITURES Operating Transfer to debt service $ - $ 439,843 $ 439,843 $ - Transfer to capital projects 439,843 - 61,000 (61,000) Total expenditures $ 439,843 $ 439,843 $ 500,843 $ (61,000) Net Increase $ 160,433 $ 794,593 $ 861,917 $ 67,324 Notes to required supplementary information is an integral part of this schedule 85 CITY OF NORTH RICH LAND HILLS, TEXAS Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget (Non -GAAP Basis) and Actual TRAFFIC SAFETY FUND Year Ended September 30, 2013 Notes to required supplementary information is an integralpart of this schedule 86 Variance with Final Budget - Positive Original Final Actual (Negative) REVENUES Gross fine revenue $ 872,000 $ 872,000 $ 923,282 $ 51,282 Less: Allowable Expenditures Contractor payments 600,000 600,000 571,358 28,642 Program administration 157,889 157,889 153,879 4,010 Total expenditures 757,889 757,889 725,237 32,652 Net Fines Revenue 114,111 114,111 198,045 83,934 Less: State Share 57,056 57,056 94,461 (37,405) Net Fine Revenues to City $ 57,055 $ 57,055 $ 103,584 $ 46,529 Additional revenues Interest income 2,439 2,439 3,491 1,052 Appropriations of fund balance 26,904 26,904 26,904 - Sub -total 29,343 29,343 30,395 1,052 Total reveues, net 86,398 86,398 133,979 47,581 EXPENDITURES Traffic enforcement 72,900 12,900 - 12,900 Pedestrian safety 13,498 13,498 14,611 (1,113) Transfer to fleet services - 60,000 60,000 - Total expenditures 86,398 86,398 74,611 11,787 Net increase $ - $ - $ 59,368 $ 59,368 Notes to required supplementary information is an integralpart of this schedule 86 INTERNAL SERVICE FUNDS Facilities and Construction Services Fund — To account for building maintenance and repair services provided to numerous departments located at various sites throughout the City. Facilities 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. 87 CITY OF NORTH RICHLAND HILLS, TD(AS Combining Statement of Net Position INTERNAL SERVICE September 30, 2013 88 Facilities and Information Total Internal Construction Fleet Se1vlce5 Self Insurance Services Service ASSETS Current Cash and cash equivalents $ 459,401 $ - $ 41,324 $ 499,278 $ 1,000,003 Investments 1,375,738 2,059,454 1,265,003 1,627,399 6,327,594 Accounts receivable, net of allowance: Other 257 340 46 16,155 16,798 Interest receivable 6,521 5,166 9,733 2,960 24,380 Prepaid items 64 - 225,165 201,503 426,732 Inventories, at cost 23,737 89,863 - - 113,600 Total current assets 1,865,718 2,154,823 1,541,271 2,347,295 7,909,107 Nonc urro nt Restricted assets: Cash and cash equivalents 3,380 95,006 2,267,037 47,067 2,412,490 Investments - - 4,000,000 - 4,000,000 Total restricted cash, cash equivalents, and Investments 3,380 95,006 6,267,037 47,067 6,412,490 Capital assets, at cost: Building and improvements 135,455 - - - 135,455 Other improvements - - - 602,769 602,769 Machinery and equipment 417,313 5,301,859 17,312 2,557,392 8,293,876 Construction in progress - 67,993 - - 67,993 Accumulated depreciation (269,082) (3,803,663) (17,312) (1,673,205) (5,763,262) Net capital assets 283,686 1,566,189 1,486,956 3,336,831 Total noncurrent assets 287,066 1,661,195 6,267,037 1,534,023 9,749,321 Total assets 2,152,784 3,816,018 7,808,308 3,881,318 17,658,428 LIABILITIES Current Accounts payable and accrued expenses 291,600 44,351 1,084,156 76,887 1,496,994 Other current liabilities 277 40 25,176 - 25,493 Compensated absences 4,698 5,179 2,283 5,513 17,673 Unearned revenue - - - 2,314 2,314 Total current liabilities 296,575 49,570 1,111,615 84,714 1,542,474 Nonc urre nt Compensated absences 53,968 87,961 32,696 57,892 232,517 Other post employment benefits obligation 147,365 172,141 88,035 172,188 579,729 Net pension obligation 79,029 91,891 50,573 92,272 313,765 Total noncurrent liabilities 280,362 351,993 171,304 322,352 1,126,011 Total liabilities 576,937 401,563 1,282,919 407,066 2,668,485 NET POSITION Net investment in capital assets 283,686 1,566,189 - 1,486,956 3,336,831 Unrestricted 1,292,161 1,848,266 6,525,389 1,987,296 11,653,112 Total net position $ 1,575,847 $ 3,414,455 $ 6,525,389 $ 3,474,252 $ 14,989,943 88 CITY OF NORTH RICHLAND HILLS, TEXAS Combining Statement of Expense, Revenues, and Changes in Net Position INTERNAL SERVICE Year Ended September 30, 2013 89 Facilities and Fleet Self Information Total Internal Construction Services Insurance Systems Service OPERATING REVENUES Other intergovernmental $ - $ - $ - $ 14,902 $ 14,902 Internal service revenues Risk management - - 9,786,119 - 9,786,119 Facilities and fleet management 2,544,394 3,044,518 - - 5,588,912 Information systems management - - - 2,516,696 2,516,696 Miscellaneous revenues 96,072 38,183 - 141,572 275,827 Total operating revenues 2,640,466 3,082,701 9,786,119 2,673,170 18,182,456 OPERATING EXPENSES Claims - - 7,992,402 - 7,992,402 Contractual services 882,196 85,603 440,259 285,435 1,693,493 Personnel services 998,603 1,021,832 570,845 1,107,331 3,698,611 Repairs and maintenance 551,758 216,335 3,322 910,089 1,681,504 Supplies 58,808 1,005,417 4,197 294,685 1,363,107 Depreciation 47,650 429,967 - 389,384 867,001 Total operating expenses 2,539,015 2,759,154 9,011,025 2,986,924 17,296,118 Operating income (loss) 101,451 323,547 775,094 (313,754) 886,338 NONOPERATING REVENUES (EXPENSES) Investment income 23,403 5,494 - - 28,897 Other income - - 104,909 - 104,909 Gain (loss) on disposal of assets (59,297) 11,528 - (90,072) (137,841) Total nonoperating revenues (expenses) (35,894) 17,022 104,909 (90,072) (4,035) Income (loss) before transfers 65,557 340,569 880,003 (403,826) 882,303 TRANSFERS Transfers in - 126,507 - 244,883 371,390 Transfers out (20,752) (370,331) - - (391,083) Total transfers - net (20,752) (243,824) - 244,883 (19,693) Change in net position 44,805 96,745 880,003 (158,943) 862,610 Net position- beginning of year 1,531,042 3,317,710 5,645,386 3,633,195 14,127,333 Net position - end of year 71,575,847 $ 3,414,455 $ 6,525,389 $ 3,474,252 $ 14,989,943 89 CITY OF NORTH RICHLAND HILLS, TEXAS Combining Statement of Cash Flows INTERNAL SERVICE FUNDS Year Ended September 30, 2013 Facilities and Construction Information ' -A- Flaat' -A -Q Salf Incii -nra Sa-i- Tura lc Cash flows from operating activities Receipts from interfund services provided $ 2,544,394 $ 3,044,518 $ 9,786,119 $ 2,516,696 $ 17,891,727 Other operating revenue [expense] 95,824 37,843 [32] 156,185 289,820 Payments to suppliers [1,422,471] [1,287,879] [8,519,143] [1,537,399] (12.76 6.89 2) Payments to employees [964,780] [995,162] [562,360] [1,074,113] [3,596,415] Net cash provided by operating activities 252,967 799,320 704,584 61,369 1 ,818,240 Cash flows from noncapital financing activities: Transfers from other funds - 126,507 - 244,883 371 ,390 Transfers to other funds [20,752] [370,331] - [391 ,083] Net cash provided by [used for] noncapital and related financing activities [20,752] [243,824] - 244,883 [19,693] Cash flows from capital and related financing activities: Insurance recovery proceeds 104,909 - 104,909 Acquisition and construction of capital assets [5,871] [682,243] - [55,460] [743,574] Proceeds from sale of capital assets 11 ,528 - 11 ,528 Net cash provided by [used for] capital and related financing activities [5,871] [670,715] 104,909 [55,460] [627,137] Cash flows from investing activities: Pu rcha se of I nve stments [1,367,784] [1,820,841] [5,058,860] [1,564,651] [9,812,136] Proceeds from the sale of investments 812,633 1 ,719,187 3,932,094 1,300,405 7,764,319 Interest and dividends received 19,806 8,156 6,120 2,320 36,402 Net cash provided by investing activities [535,345] [93,498] [1,120,646] [261 ,926] [2,011 ,415] Net increase [decrease] in cash and cash equivalents [309,001] [208,717] [311,153] [11,134] [840,005] Cash and cash equivalents beginning ofyear 771,782 303,723 2,619,514 557,479 4,252,498 Cash and cash equivalents end of year $ 462,781 $ 95,006 $ 2,308,361 $ 546,345 $ 3,412,493 Reconciliation of operating income [loss] to net cash provided by operating activities: Operating income [loss] $ 101,451 $ 323,547 $ 775,094 $ [313,754] $ 886,338 Adjustments to reconcile operating income [loss] to net cash provided by operating activities: Depreciation expense 47,650 429,967 - 389,384 867,001 Other expense - - 474 5,513 5,987 [Increase] decrease in accounts receivable [248] [340] [32] [2,603] [3,223] [Increase] decrease in inventories 3,832 22,864 - 26,696 [Increase] decrease in prepaid items - - [87,709] [45,459] [133,168] Increase [decrease] in compensating absences 484 [9,178] [9,528] [7,963] [26,185] Increase [decrease] in other post employment benefits 34,630 39,224 18,729 42,227 134,810 Increase [decrease] in net pension obligation [2,986] [5,122] [2,403] [3,945] [14,456] Increase [decrease] in unearned revenues - - 2,314 2,314 Increase [decrease] in accounts payable 66,459 [3,388] 8,272 [7,244] 64,099 Increase [decrease] in accrued liabilities 1,695 1 ,746 1,687 2,899 8,027 Total adjustments 151,516 475,773 [70,510] 375,123 931,902 Net cash provided by [used for] operating activities $ 252,967 $ 799,320 $ 704,584 $ 61,369 $ 1,818,240 Noncash financing activities: Disposal of capital assets $ [77,541] $ [376,443] $ $$ [372,171 $ [826,155] 90 Statistical Section Financial Trends These schedules contain trend information to help the reader understand how the government's financial performance and well -being have changed overtime. Revenue Capacity These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt Capacity These schedules present information to help the reader assess the affordability of the government's current level of outstanding debt and the government's ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. 91 This page intentionally left ,blank. 92 Go ve mme ntal A ctivitie s Net investment in capital assets Restricted Unrestricted Total net position Business -type Activities Net investment in capital assets Restricted Unrestricted Total net position Primary Government Net investment in capital assets Restricted Unrestricted Total net position CITY OF NORTH RICH LAND HILLS, TEXAS Net Position by Component [unaudited] Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Table 1 $ 205,397,867 $ 205,162,006 $ 178,349,544 $ 164,973,337 $ 142,066,447 $ 129,533,935 $ 128,290,273 $ 127,692,821 $ 70,181539 $ 63,351,827 4,634003 4,253,430 3,368,190 3,715,127 4,693,345 3,984,364 3,270,409 2,973,821 2,759D99 2,954,135 26,228262 23572,411 37,099,102 35253,260 52,082,125 54,146,336 44,787548 36,986,785 27,839,936 27,644,041 236,260,932 232,987,847 218,816,836 203,941,724 198,841,917 187,664,635 176,348,230 167,653,427 100,780,574 93,950,003 62,044D64 62,615,382 65,810011 61,160,189 62,354,993 60,828,610 65,485796 62,776,005 63,610252 65,122,142 3,762,460 2,710,553 2,600,187 2,610,287 3,018779 2,709,713 2,937D27 2,712,360 2,267,668 1,241,081 20,753,387 22,957,383 21,455781 21724,799 25,309,106 29p18,350 24,779D76 27,457,208 22,623041 20,443,728 86,559,911 88,283,318 89,866779 85,495,275 90,682078 92556,673 93,201 ,899 92,945,573 88,501 ,761 86006,951 267,441,931 267777,388 244,160,355 226,134,526 204,421,440 190,362,545 193,776,069 190,468,826 133,791,791 128,473,969 8,397263 6,963,983 5,968,377 6,325,414 7,712,124 6,694,077 6,207,436 5,686,181 5,026767 4,195,216 46 981 4x93 4629 794 58.554083 56 P78.925 773,91 31 83164 686 69 566 ��4 64 447 993 50463 777 4 Note: Right -of -way land was added to the financial statements in fiscal year 2006. 93 Expenses Governmental activities: General government Public safety Culture and recreation Public works Interest and other fees Total governmental activities Business -type activities: Utility Aquatic park Golf course 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 utility Aquatic park Golf course 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 Position (unaudited) ?nl-1 ?nl7 ?nlI Table 2 Fiscal Year ?nln ?nna $ 10,656,322 $ 10,399,845 $ 9,886,731 $ 14,653,747 $ 16,355,871 30,611,650 28,881,714 28,512,136 26,172,292 27,772,668 11,633,882 11,679,786 9,352,354 9,468,346 10,718,579 8,398,711 7,794,339 7,679,001 8,388,531 2,126,721 3,673,780 3,453,283 2,108,277 1,761,128 2,269,541 64,974,345 62,208,967 57,538,499 60,444,044 59,243,380 138,831 80,660 - 7,291 50,744 27,623,220 26,642,141 27,981,025 27,313,424 25,121,565 4,749,688 4,753,949 4,507,561 4,188,892 4,105,695 2,566,632 2,429,973 2,227,315 2,236,113 2,217,868 34,939,540 33,826,063 34,715,901 33,738,429 31,445,128 99,913,885 96,035,030 92,254,400 94,182,473 90,688,508 5,497,050 5,490,245 5,466,876 4,204,508 3,426,008 2,668,111 3,001,249 2,381,024 858,241 937,102 932,819 857,809 2,545,158 1,833,138 879,524 2,909,032 7,401,996 17,644,326 19,094,099 21,465,230 28,374,887 30,160,950 28,445,746 28,921,168 4,377,388 4,548,828 4,587,899 2,371,010 2,443,865 2,324,118 138,831 80,660 - 7,291 50,744 4,643,096 37,055,470 35,569,843 40,476,281 56,149,569 57,035,073 68,851,168 (45,880,246) (40,743,737) (29,163,612) 2,115,930 1,743,780 5,760,380 $ (43,764,316) $ (38,999,957) $ (23,403,232) 94 8,619,557 4,547,658 2,918,356 4,922,180 909,267 1,446,132 839,309 1,896,764 964,914 1,142,243 6,806,586 11,341,668 21,057,989 25,296,645 24,324,685 25,060,898 4,090,087 3,858,389 2,264,256 2,509,577 271,624 - 30,950,652 31,428,864 52,008,641 56,725,509 (39,386,055) (33,946,735) (2,787,777) (16,264) $ (42,173,832) $ (33,962,999) Innu I)nn7 Inns Inns ')nnn $ 9,379,422 $ 8,461,142 $ 9,269,861 $ 8,288,137 $ 9,755,719 25,791,827 23,265,259 22,022,696 20,693,721 20,460,665 7,973,359 7,327,532 7,611,710 7,355,182 7,436,113 5,748,315 7,799,706 8,169,282 7,597,475 6,755,207 2,302,096 2,561,837 2,546,791 2,860,149 3,157,963 51,195,019 49,415,476 49,620,340 46,794,664 47,565,667 27,329,181 23,154,259 22,929,665 21,492,504 20,707,959 3,774,757 3,433,492 3,343,073 3,251,524 3,178,835 2,302,670 2,247,272 2,239,404 2,254,198 2,257,534 433,588 - - - - 33,840,196 28,835,023 28,512,142 26,998,226 26,144,328 85,035,215 78,250,499 78,132,482 73,792,890 73,709,995 9,333,482 6,505,029 6,881,843 5,672,569 5,548,912 2,995,693 1,718,460 1,314,329 1,154,807 1,031,326 2,517,122 1,124,777 1,212,343 1,214,590 1,091,618 2,355,161 1,179,302 174,166 61,063 100,192 353,816 1,028,853 1,153,543 1,539,736 612,519 304,514 410,297 2,910,568 4,367,529 6,404,966 17,859,788 11,966,718 13,646,792 14,010,294 14,789,533 26,349,559 21,630,336 25,858,511 22,237,742 20,861,262 3,943,288 3,916,691 3,894,274 3,421,301 2,831,743 2,571,409 2,298,065 1,775,963 2,287,494 2,154,714 - - 66,466 46,847 344,296 - 599,983 1,288,734 1,603,834 2,128,214 32,864,256 28,445,075 32,883,948 29,597,218 28,320,229 50,724,044 40,411,793 46,530,740 43,607,512 43,109,762 (33,335,231) (37,448,758) (35,973,548) (32,784,370) (32,776,134) (975,940) (389,948) 4,371,806 2,598,992 2,175,901 $ (34,311,171) $ (37,838,706) $ (31,601,742) $ (30,185,378) $ (30,600,233) continued 95 Table 2 General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes Sales taxes Moved beverage taxes Franchise taxes Occupancy taxes Unrestricted investment earnings Special items Miscellaneous Transfers Total governmental activities Business -type activities: Unrestricted investment earnings Miscellaneous Transfers Total business -type activities Total primary government Changes in Net Position Governmental activities Business -type activities Total primary government CITY OF NORTH RICHLAND HILLS, TEXAS Changes in Net Position (unaudited) Fiscal Year Table 2 2013 2012 2011 2010 2009 $ 24,126,068 $ 22,222,620 $ 19,339,750 $ 19,909,976 $ 20,605,670 17,359,807 16,974,086 16,645,412 16,428,281 16,058,728 117,223 101,724 128,007 118,253 117,757 4,166,579 4,269,229 4,329,500 3,956,663 3,802,559 221,003 210,324 238,410 240,387 152,220 258,705 300,928 495,386 588,866 1,611,632 205,445 288,093 1,271,555 553,412 188,512 3,674,512 3,384,630 1,590,704 2,690,024 2,586,937 50,129,342 47,751,634 44,038,724 44,485,862 45,124,015 80,950 50,479 171,125 236,674 740,393 5,380 6,909 30,703 53,524 (10,986) (3,674,512) (3,384,630) (1,590,704) (2,690,024) (2,586,937) (3,588,182) (3,327,242) (1,388,876) (2,399,826) (1,857,530) 46,541,160 44,424,392 42,649,848 42,086,036 43,266,485 4,249,096 7,007,897 14,875,112 5,099,807 11,177,280 (1,472,252) (1,583,462) 4,371,504 (5,187,603) (1,873,794) $ 2,776,844 $ 5,424,435 $ 19,246,616 $ (87,796) $ 9,303,486 96 Table 2 2008 2007 2006 2005 2004 $ 19,248,707 $ 18,663,482 $ 18,134,230 $ 17,458,279 $ 16,871,892 17,445,806 16,865,282 15,934,374 15,230,354 16,477,474 161,783 129,860 123,355 115,143 107,164 4,604,523 4,450,441 3,855,169 3,541,130 3,592,682 260,319 284,099 199,850 191,848 172,197 2,245,479 2,757,208 2,047,583 1,088,547 652,153 196,320 1,499,140 - - (1,585,000) 477,026 651,376 2,341,327 688,555 602,568 569,227 712,782 873,867 1,301,085 1,104,810 45,209,190 46,013,670 43,509,755 39,614,941 37,995,940 878,795 1,330,781 945,873 396,903 225,123 8,962 - - - - (557,044) (712,782) (873,867) (1,301,085) (1,104,810) 330,713 617,999 72,006 (904,182) (879,687) 45,539,903 46,631,669 43,581,761 38,710,759 37,116,253 11,873,959 8,564,912 7,536,207 6,830,571 5,219,806 (645,227) 228,051 4,443,812 1,694,810 1,296,214 $ 11,228,732 $ 8,792,963 $ 11,980,019 $ 8,525,381 $ 6,516,020 97 This page intentionally left ,blank. 98 CITY OF NORTH RICHLAND HILLS, TEXAS Fund Balances- Governmental Funds (unaudited) General Fund Nonspendables Restricted Com m itted Assigned Unassigned Total General Fund All Other Governmental Funds Nonspendables Restricted Com m itted Assigned Unassigned Total all other governmental funds Total all governmental funds Fiscal Year Fiscal Year 2013 2012 Fiscal Year 20'1'1 $ 669,275 $ 707,569 $ 926,707 1,123,587 868,715 653,526 0 0 0 3,963,333 3,759,566 1,848,329 9,186,072 8,992,908 9,838,310 $ 14,942,267 $ 14,328,758 $ 13,266,872 $ 27,002 $ 47,202 $ 30,308 63,631,314 60,696,117 30,997,610 4,161,319 3,622,301 6,221,018 17,280,746 16,333,423 6,480,459 0 0 0 $ 85,100,381 $ 80,699,043 $ 43,729,395 $ 100,042,648 $ 95,027,801 $ 56,996,267 Notes: GASB 54 Fund Balance reporting was implemented in 2011. 99 Table 3 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 Fiscal 7AAA $ 45,990,682 $ 43,777,983 $ 40,681,079 $ 40,842,538 $ 40,736,934 1,764,004 1,543,875 1,375,742 1,148,594 988,020 6,800,050 6,715,031 6,076,625 7,588,891 6,562,241 2,424,064 2,421,696 2,665,135 2,631,813 2,677,901 923,282 778,393 674,745 726,274 999,584 140,385 176,740 187,813 192,501 160,194 10,116 200 8,748 - 276,475 177,178 415,326 383,453 538,193 1,250,127 4,467,635 5,732,323 9,070,672 3,188,918 2,477,191 323,285 138,604 183,295 232,054 146,830 1,318,985 1,363,579 445,214 1,876,282 517,492 64,339,666 63,063,750 61,752,521 58,966,058 56,792,989 10,673,511 10,829,793 10,311,297 10,435,250 9,459,393 28,317,163 26,959,990 25,934,692 24,697,961 25,262,159 9,290,204 9,163,107 7,453,931 7,344,261 8,545,815 3,563,149 3,601,659 2,416,186 2,518,081 2,478,800 10,208,747 15,945,071 15,475,441 14,301,095 10,506,569 8,523,434 8,846,947 8,187,696 7,115,319 5,699,394 3,659,348 3,092,172 2,194,444 2,161,325 2,048,696 74,235,556 78,438,739 71,973,687 68,573,292 64,000,826 (9,895,890) (15,374,989) (10,221,166) (9,607,234) (7,207,837) 9,845,000 26,224,251 7,315,000 9,186,475 8,503,525 300,486 546,164 358,270 42,075 242 - 3,699,388 - - - (3,809,076) - - - 799,045 3,145,280 806,479 34,678 188,512 7,782,662 8,705,604 5,659,688 8,158,092 9,274,945 (3,816,456) (4,842,779) (4,304,576) (7,540,830) (7,759,444) 14,910,737 33,668,832 9,834,861 9,880,490 10,207,780 $ 5,014,847 $ 18,293,843 $ (386,305) $ 273,256 $ 2,999,943 23.5% 23.6% 22.5% 20.6% 16.9% 100 Table 4 Year 2008 2007 2006 2005 2004 $ 41,721,138 $ 40,393,165 $ 39,296,101 $ 37,565,652 $ 38,099,241 1,705,703 1,526,636 2,251,292 1,473,542 1,421,831 6,461,012 6,335,104 6,354,199 6,185,782 5,932,134 2,394,920 2,064,187 2,130,968 1,787,547 1,775,899 825,191 - - - - 196,320 170,326 177,273 178,937 176,962 154,125 28,225 8,348 514 - 1,678,921 2,258,877 1,719,493 922,870 569,532 1,200,491 1,267,839 1,730,684 1,792,392 3,139,929 142,874 74,448 86,752 70,117 47,068 9,054,489 8,607,293 9,329,442 8,553,540 8,968,934 26,051,508 23,414,877 22,049,690 21,289,538 20,618,988 7,241,596 6,684,263 6,431,291 6,331,728 6,266,762 2,663,001 2,522,751 2,468,819 2,536,838 2,278,247 5,137,596 3,742,378 4,909,101 9,404,434 12,577,507 6,188,393 6,697,217 6,462,905 6,695,455 6,278,005 2,225,585 2,281,930 2,349,160 2,665,828 2,770,875 58,562,168 53,950,709 54,000,408 57,477,361 59,759,318 4,553,329 1,107,339 1,185,894 (6,429,134) (8,135,952) 4,465,000 2,185,000 3,625,000 - 4,935,000 - 5,085,000 8,245,000 - 3,815,000 - (5,075,787) (8,100,166) - (3,694,386) - 282,000 - - - 16,353 9,864 - - - 355,004 - - - - 5,918,639 5,812,148 4,436,800 3,749,968 4,442,310 (5,899,649) (5,990,349) (5,710,150) (3,794,426) (4,858,894) 4,855,347 2,307,876 2,496,484 (44,458) 4,639,030 $ 9,408,676 $ 3,415,215 $ 3,682,378 $ (6,473,592) $ (3,496,922) 18.7% 21.8% 21.9% 24.2% 23.7% 101 Table 5 CITY OF NORTH RICHLAND HILLS, TEXAS Appraised and Taxable Value of Property Last Ten Fiscal Years (unaudited) Source: Tarrant Appraisal District Certified Tax Roll, July 25, City budget (2007 -2013) Tarrant Appraisal District September Report, City budget (2004 -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. 102 Appraised Appraised Appraised Appraised Fiscal Residential Commercial Industrial Other Year Property Property Property Property (1) 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 2013 2,655,417,917 720,473,286 24,346,385 923,522,505 Source: Tarrant Appraisal District Certified Tax Roll, July 25, City budget (2007 -2013) Tarrant Appraisal District September Report, City budget (2004 -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. 102 Table 5 103 Less: Personal Tax- Exempt Net Taxable Total Direct Property Property Value Tax Rate 348,631,136 382,365,613 3,013,688,483 0.57000 347,217,730 397,233,578 3,133,267,628 0.57000 361,559,520 388,297,207 3,295,289,253 0.57000 342,337,515 421,361,355 3,407,141,199 0.57000 318,594,946 438,489,302 3,575,307,295 0.57000 331,545,812 451,978,018 3,759,485,131 0.57000 311,291,262 465,272,083 3,750,427,552 0.57000 302,449,010 879,728,308 3,602,317,712 0.57000 302,955,622 947,626,573 3,618,184,021 0.57000 312,039,668 903,068,001 3,732,731,760 0.61000 103 Fiscal Year Table 6 CITY OF NORTH RICHLAND HILLS, TEXAS Property Tax Rates - Direct and Overlapping Governments (per $100 assessed value) (unaudited) City of North Richland Hills General Debt service fund (3) fund (3) Total (3) 2004 0.32956 0.24044 0.57000 2005 0.33173 0.23827 0.57000 2006 0.34432 0.22568 0.57000 2007 0.34695 0.22305 0.57000 2008 0.34241 0.22759 0.57000 2009 0.33875 0.23125 0.57000 2010 0.35412 0.21588 0.57000 2011 0.37022 0.19978 0.57000 2012 0.35642 0.21358 0.57000 2013 0.35108 0.25892 0.61000 Sources: (1) Tarrant County. (2) Birdville Independent School District from 2004 -2005. (3) City records. (4) Began using Tarrant County as source in 2006. 104 Table 6 105 Birdville Junior school college (1) district (1)(2) Hospital (1) County (1) Total 0.13938 1.61700 0.23540 0.27250 2.83428 0.13938 1.61700 0.23540 0.27250 2.83428 0.13938 1.61700 (4) 0.23540 0.27250 2.83428 0.13938 1.56500 (4) 0.23540 0.27150 2.78128 0.13938 1.40500 (4) 0.23040 0.26650 2.61128 0.13796 1.41000 (4) 0.22790 0.26400 2.60986 0.13767 1.40500 (4) 0.22790 0.26400 2.60457 0.13764 1.42500 (4) 0.22790 0.26400 2.62454 0.14897 1.43500 (4) 0.22790 0.26400 2.64587 0.14897 1.43500 (4) 0.22790 0.26400 2.68587 105 This page intentionally left ,blank. 106 CITY OF NORTH RICHLAND HILLS, TEXAS Principal Taxpayers (unaudited) Year Ended September30, 2013 Table 7 Percentage of Year Ended September30, 2004 Percentage of 2012 assessed total assessed Taxpayer Type of business valuation' valuation Wal -Mart Retail $ 60,508,435 1.67% Hospital Corporation of America Healthcare Provider 42,733,217 1.18% BGPC Equestrian Real Estate 33,000,000 0.91% Ap Wp N Richland Hills Reit Multi Family 30,589,000 0.85% Chesapeake Operating (W) Gas Utility 27,732,850 0.77% 0ncor Electric Delivery Co. Utility Service Provider 26,353,412 0.73% Venue at Home Town LTD ETAL Property Developer 25,348,600 0.70% AP Wp Green Reit LLC Multi Family 25,265,000 0.70% Company One, LLC Real Estate 25,250,000 0.70% Tyson Prepared Foods Inc Food Manufacturer 22,007,098 0.61% $ 318,787,612 8.81% Year Ended September30, 2004 Percentage of ' Source: Tarrant Appraisal District. 107 2003 assessed total assessed Taxpayer Type of business valuation' valuation Walmart Retail $ 62,195,784 2.06% Home Depot, Inc. Retail 40,856,019 1.36% Kimberly- Clark/Tecnol, Inc. Manufacturer 33,579,232 1.11% Food Brands America, Inc. Manufacturer 26,483,800 0.88% Alliance Park Portfolio, LLC Real Estate 25,094,693 0.83% Five Star Ford /Pack Properties Automotive Dealership 23,893,137 0.79% ONCOR Electric Delivery Utility Service Provider 23,801 ,993 0.79% Meadows NRH Associates LP Real Estate 23,428,746 0.78% Mega Life & Health Ins. Co. Insurance 21,103,399 0.70% Bluffs Iron Horse Ltd. Real Estate 20,406,380 0.68% $ 300,843,183 9.98% ' Source: Tarrant Appraisal District. 107 Fiscal Year CITY OF NORTH RICHLAND HILLS, TEXAS Property Tax Levies and Collections Last Ten Fiscal Years (unaudited) Collected within the Fiscal Year of the Levy Total Percent of tax levy Amount levy Table 8 Collections in Subsequent Years 2004 17,178,024 16,860,430 98.15% $ 291,484 2005 17,859,625 17,679,906 98.99% $ 154,573 2006 18,783,149 18,461,867 98.29% $ 297,383 2007 19,420,705 19,133,840 98.52% $ 261,455 2008 20,379,252 19,980,714 98.04% $ 368,444 2009 21,429,065 21,268,426 99.25% $ 119,685 2010 21,377,437 21,115,928 98.78% $ 210,577 2011 20,533,211 20,281,233 98.77% $ 197,086 2012 20,623,649 20,370,425 98.77% $ 180,839 2013 22,769,664 22,175,814 97.39% $ 376,149 108 Total Collections to Date Percent of Amount Levy 17,151,914 99.85% 17,834,479 99.86% 18,759,250 99.87% 19,395,295 99.87% 20,349,158 99.85% 21,388,111 99.81% 21,326,505 99.76% 20,478,319 99.73% 20,551,265 99.65% 22,551,962 99.04% 109 Table 8 CITY OF NORTH RICHLAND HILLS, TEXAS Ratios of Outstanding Debt by Type Last Ten Fiscal Years (unaudited) Table 9 (dollars in thousands, except per capita) Other govt General Bonded Debt Total Percentage General Bonded Activities Debt Fiscal Estimated Net Taxable General Certificates of Loans general of Debt per Sales tax Year population (1) value (2) obligation bonds obligation payable bonded debt Net Taxable value capita (1) revenue bonds 2004 60,400 3,013,688 40,197 15,537 55,734 1.85% 923 7,890 2005 61,668 3,133,268 35,733 14,481 50,214 1.60% 814 7,095 2006 63,521 3,295,289 38,024 11,048 49,072 1.49% 773 6,270 2007 64,050 3,407,141 37,821 7,842 45,663 1.34% 713 5,410 2008 65,750 3,575,307 37,823 7,041 - 44,864 1.25% 682 4,520 2009 66,100 3,759,485 39,810 7,229 1,550 48,589 1.29% 735 3,600 2010 66,400 3,750,428 41,725 8,255 1,625 51,605 1.38% 777 2,640 2011 63,420 3,602,318 41,000 9,575 1,242 51,817 1.44% 817 1,645 2012 63,420 3,618,184 64,269 33,330 840 98,439 2.72% 1,552 615 2013 63,420 3,732,732 68,945 30,910 311 100,166 2.68% 1,579 210 Business -Type Activities Total Total (3) Total Percentage Fiscal Water & sewer General Certificates of Contractual Capital business -type primary bonded debt of per capita Year revenue bonds obligation bonds obligation obligations leases activities government per capita (1) income (1) 2004 4,258 5,364 104 9,726 73,350 1,214 4.13% 2005 3,598 5,018 40 8,656 65,965 1,070 3.58% 2006 4,255 4,589 - 8,844 64,186 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% 2009 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% 2013 1,760 15,300 17,060 117,436 1,852 5.77% 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. 110 CITY OF NORTH RICHLAND HILLS, TEXAS Computation of Direct and Overlapping Debt September 30, 2013 (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 Net bonded debt outstanding $ 95,108,790 (1) 203,760,361 302,122,934 681,493,167 336,590,000 26,285,000 22,705,000 Source: First Southwest and respective entities' records. (1) Less- self - supporting debt Percentage applicable to City of North Richland Hills (2) 100.00% $ 45.81% 0.07% 4.00% 3.01% 3.01% Table 10 Amount applicable to City of North Richland Hills 95,108, 790 93,342,621 211,486 27,259,727 10,131,359 791,179 3.01% 683,421 132,419,793 $ 227,528,583 (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." IN CITY OF NORTH RICHLAND HILLS, TEXAS Table 11 Computation of Legal Debt Margin September 30, 2013 (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 2013 was established at $.61 per $100 of assessed valuation based on 100% of appraised value. Ism 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 T I F transfer of $1.1 M 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 913012013. (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. (5) Excludes capital outlay 113 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) Coverage 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, 866 1,724,861 795,000 348,170 1,143,170 1.51 2006 4,047,737 2,411,932 1,635,805 825,000 312,553 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 2,824,368 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 1 87,763 1,107,763 0.98 2010 4,211,692 3,027,159 1,184,533 960,000 167,000 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 {1.21} 2013 4,343,358 5,729,298 (5) (1,385,940) (4) 405,000 31,315 436,315 {3.18} (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 T I F transfer of $1.1 M 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 913012013. (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. (5) Excludes capital outlay 113 Sources: (1 ) Birdville Independent School District (2) North Central Texas Council of Governments and City estimates (3) Texas Employment Commission (4) Haltom Richland Chamber of Commerce (1998 -2007) (5) Includes North Richland Hills students only (6) ESP Business Information Solutions, Inc. (2003 -2012) (7) Reported as a percentage of residents with a high school diploma or greater (8) Population was adjusted based on census. 114 CITY OF NORTH RICHLAND HILLS, TEXAS Table 13 Demographic Statistics Last Ten Fiscal Years (unaudited) School Fiscal Estimated Median Per capita Median Education enrollment Unemployment Year population (2) income (6) income (6) age (6) level (4) (7) (1) (5) rate (3) 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 (6) 2008 65,750 69,669 31,278 35.6 91% 10,972 4.7 (6) 2009 66,100 67,850 30,084 35.6 91% 11,179 5.5 (6) 2010 66,400 68,082 29,882 35.6 91% 11,431 6.9 (6) 2011 63,420 (8) 63,594 31,615 38 91% 11,615 7.3 (6) 2012 63,420 78,911 31,175 38.2 91% 10,843 6.3 (6) 2013 63,420 82,051 32,079 38.4 91% 10,883 5.5 Sources: (1 ) Birdville Independent School District (2) North Central Texas Council of Governments and City estimates (3) Texas Employment Commission (4) Haltom Richland Chamber of Commerce (1998 -2007) (5) Includes North Richland Hills students only (6) ESP Business Information Solutions, Inc. (2003 -2012) (7) Reported as a percentage of residents with a high school diploma or greater (8) Population was adjusted based on census. 114 CITY OF NORTH RICHLAND HILLS, TEXAS Principal Employers (unaudited) Year Ended September 30, 2013 Employer Employees Santander Consumer USA, Inc. 1,577 North Hills Hospital 785 Bird�Alle ISD' 766 Wal -Mart Supercenters 752 HealthMarkets 607 City of North Richland Hills 534 Tarrant County College - NE Campus2 452 Tyson Prepared Foods 425 Con -Way Freight, Inc. 290 Silverleaf Resorts 280 6 6,468 Year Ended September 30, 2004 Employer Employees Rank Rank 1 2 3 4 5 6 7 8 9 10 Table '14 Percentage of total City employment* 4.44% 2.21% 2.16% 2.12% 1.71% 1.50% 1.27% 1.20% 0.82% 0.79% 18.22% Percentage of total City employment* UICI - The Insurance Center 1,295 1 5.47% Bird�Alle ISD 1,089 2 4.60% North Hills Hospital 762 3 3.22% Triad Financial Corporation 750 4 3.17% Wal -Mart Supercenter 730 5 3.08% City of North Richland Hills 570 6 2.41% TCC - NE Campus2 472 7 1.99% Tyson Prepared Foods 450 8 1.90% CTS Con -Way Transportation 282 9 1.19% Five Star Ford 265 10 1.12% 6,665 28.15% 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 1f1M This page intentionally left ,blank. IfII CITY OF NORTH RICHLAND HILLS, TEXAS Full -time Equivalent Municipal Employees by Function /Program Last Ten Fiscal Years [unaudited] Source: City operating budget [1] Consolidated services with Haltom City, City of Richland Hills and City of Watauga for Communcation & Dentention Centers [2] Increase due to new staff members for the Recreation Center 117 Table 15 Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 General government Administration 4.70 4.70 4.70 3.70 4.75 5.25 5.25 5.25 5.25 5.25 Legal - - - - - - - - - - Public information 4.00 4.00 4.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Judicial 15.00 15.00 15.00 15.50 15.50 16.50 14.00 14.00 14.00 14.00 Finance 22.00 23.00 23.00 23.00 23.50 23.50 23.50 24.50 24.50 24.50 No ndep artme ntal 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 10.30 8.30 8.30 9.30 11.30 11.30 12.30 11.30 11.30 11.50 Neighborhood services 18.75 18.75 18.75 18.75 19.75 18.75 18.75 18.66 18.66 18.66 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 3.75 6.75 6.75 6.75 7.19 7.19 7.19 7.19 Total general government 83.50 82.50 82.50 87.00 91.55 92.05 90.99 90.90 90.90 91.10 Public safety Police 187.88 186.88 [1] 165.20 164.22 165.22 164.65 159.65 159.65 159.39 161.39 Fire 91.00 90.00 88.00 91.00 91.00 91.00 92.00 92.00 92.00 87.00 Total public safety 278.88 276.88 253.20 255.22 256.22 255.65 251.65 251.65 251.39 248.39 Culture and recreation Parks and recreation 160.25 [2] 145.55 121.53 118.76 118.90 120.22 120.30 114.94 115.10 116.10 Library 27.11 27.11 28.58 28.16 28.16 28.16 23.33 23.33 23.33 23.33 Economic development 4.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Total culture and recreation 191 .36 175.66 153.11 149.92 150.06 151.38 146.63 141.27 141.43 142.43 Public works 79.68 77.68 77.68 78.68 79.68 80.18 79.18 76.18 76.18 79.98 Internal services Building services 15.23 16.23 16.23 16.36 16.36 15.86 14.23 14.23 14.23 14.23 Equipment services 13.00 13.00 13.00 13.50 11.65 11.65 11.65 11.65 11.65 11.65 Self- insurance 5.10 5.10 5.10 5.10 6.00 6.00 6.00 6.00 6.00 6.00 Information services 12.00 11.00 11.00 11.00 12.00 12.00 12.00 12.00 12.00 12.00 Total internal services 45.33 45.33 45.33 45.96 46.01 45.51 43.88 43.88 43.88 43.88 Total full -time equivalents 678.75 658.05 611.82 616.78 623.52 624.77 612.33 603.88 603.78 605.78 Source: City operating budget [1] Consolidated services with Haltom City, City of Richland Hills and City of Watauga for Communcation & Dentention Centers [2] Increase due to new staff members for the Recreation Center 117 Table 15 CITY OF NORTH RICHLAND HILLS, TEXAS Operating Indicators by Function /Program Last Ten Fiscal Years (unaudited) Fiscal Year General government Planning and Inspections Construction Commercial units 25 91 (13) 24 47 Commercial value $ 15,498,935 $ 7,533,480 (13) $ 3,489,824 $ 4,578,000 Residential units 189 168 122 66 Residential value $ 46,472,244 $ 42,138,527 $ 27,218,868 $ 14,289,559 Public safety Police Law violations (1) 3,215 3,463 3,574 (9) 4,071 Part one offenses 1,960 1,791 2,075 (9) 3,452 Traffic violations 22,215 22,155 20,733 24,747 Calls for service 114,269 115,644 137,243 137,645 (8) Case clearance % 58% 26% 42% 40% Fi re Total responses 7,189 7,064 6,850 6,555 Fire responses 2,275 2,235 1,762 1,371 EMS responses 4,914 4,829 5,088 5,184 % responses c 5 minutes 58% 70% 51% (10) 73% Total inspections 768 (14) - (12) 2,005 (11) 2,169 Culture and recreation Parks and recreation Water park admissions 242,490 272,336 270,845 242,554 Golf rounds played 48,229 50,524 51,264 47,594 Library Number of volumes 204,302 206,840 200,982 196,042 Annual circulation 771,994 947,883 840,667 828,889 Annual loans per capita 12.17 14.95 13.26 12.48 Public works Water Avg daily consumption (3) 1,278,326 1,306,524 1,521,220 1,205,104 Peak daily consumption (3) 2,624,198 2,938,102 3,091,043 2,627,674 Streets Street overlay - miles 1 4 6 4 Concrete pavement repair- sq. ft. 6,488 5,322 9,372 16,163 Pothole repair- sq. ft. 2,152 4,577 3,974 6,786 Street cut - sq. ft. 86,160 (15) 176,844 162,577 193,400 Sign fabrication 973 852 935 953 Source: City records (1) Excludes traffic violations (2) Course closed from July 1st to September 15th, 2006 for renovations. (3) Cubic feet (4) Method of calculation was changed by Police Department (5) Overlay was moved into the 2008 -2009 Budget Year because Public Works was assessing program options. (6) Library closed from March 20th to April 19th, 2008 in order to move to new location. (7) 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. (9) Reported from the National Incident -Based Reporting System annual report. (10) Decline in reponse time is due to in -town traffic increasing because of the Hwy 820 expansion causing a longer drive time. (11) Reinspections are down due to corrected violations. (12) Inspection numbers unavailable for the year due to changes in the computer record management system and procedures (13) Remodels included which should not have been Ism Table 16 Table 16 2009 2008 2007 2006 2005 2004 41 51 56 40 29 47 $ 3,790,657 $ 7,907,730 $ 15,083,593 $ 53,708,815 $ 14,139,519 $ 27,210,050 55 116 235 382 420 310 $ 13,295,377 $ 31,498,499 $ 54,190,911 $ 79,332,989 $ 77,631,113 $ 53,937,035 4,270 4,289 3,403 4,694 4,767 3,764 3,190 3,458 3,216 3,318 2,911 3,312 25,111 28,899 20,010 22,124 22,810 21,317 123,877 124,212 103,137 107,096 (4) 114,058 116,877 41% 41% 36% 37% 37% 37% 6,551 6,929 6,749 5,770 5,570 6,992 1,617 1,843 1,651 1,633 1,438 1,696 4,934 5,086 5,098 4,137 4,132 5,296 73% 72% 72% 73% 73% 72% 2,308 2,412 2,007 2,033 1,946 1,020 231,379 233,654 248,205 260,869 250,682 213,285 54,373 56,192 48,838 39,603 (2) 50,187 52,176 192,044 180,737 177,270 179,366 176,719 170,849 764,195 606,639 (6) (7) 660,627 697,013 696,954 723,206 11.56 9.23 (6) 10.31 10.97 11.30 11.97 1,213,697 1,317,622 1,178,439 1,397,254 1,264,837 1,131,712 2,751,337 2,963,770 2,449,372 2,701,738 2,787,834 2,400,668 5 2 (5) 8 9 11 8 12,655 4,404 (5) 14,694 9,485 5,474 1,779 4,303 5,499 (5) 10,480 8,738 12,969 15,282 162,446 121,809 (5) 156,141 179,703 151,706 231,462 1,119 1,455 2,040 1,795 1,556 2,389 ism CITY OF NORTH RICHLAND HILLS, TEXAS Capital Asset Statistics by Function/Program Last Ten Fiscal Years (unaudited) 120 Table 17 1 4 2,139 32 708 20 20 1 1 53 2 1 356 20,420 288 19,141 139 237 2,531 Fiscal Year 2013 2012 2011 Public safety Police Stations 1 1 1 Fire Stations 4 4 4 Fire hydrants 2,162 2,127 2,125 Culture and recreation Parks and recreation Parks 33 33 33 (6) Park acreage 709 709 709 (6) Playgrounds 20 20 20 Trails - miles 21 21 21 (7) Golf Courses 1 1 1 Recreations centers 1 1 1 Athletic fields 53 53 53 Senior centers 1 1 (8) 2 Library Libraries 1 1 1 Public works Water mains - miles 355 351 346 Water connections 20,936 20,792 20,522 Wastewater lines - miles 292 290 288 Wastewater connections 19,603 19,469 19,240 Storm drain - miles 139 139 139 Streets - miles 238 238 238 Street lights 2,545 2,545 2,540 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 120 Table 17 1 4 2,139 32 708 20 20 1 1 53 2 1 356 20,420 288 19,141 139 237 2,531 Table 17 2009 2008 2007 2006 2005 2004 1 1 1 1 1 1 4 4 4 4 4 4 2,100 (4) 2,119 2,077 1,900 1,850 1,840 32 32 32 31 27 25 708 (3) 706 706 (1) 741 720 720 20 20 20 21 17 18 20 20 20 15 12 11 1 1 1 1 1 1 1 1 1 1 1 1 53 53 53 (1) 59 58 57 2 2 2 2 2 2 1 1 1 1 1 1 341 (4) 356 354 342 341 341 20,302 20,282 20,516 19,784 19,356 18,977 285 (4) 245 244 234 233 233 19,068 (5) 19,053 19,350 18,618 18,257 17,898 139 138 137 135 133 133 235 234 232 227 225 221 2,525 2,518 2,513 2,431 (2) 2,062 2,023 121 This page intentionally left ,blank. 122 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. F.5 Amending Sections 18 -191 and 18 -277 of the North Richland Hills Code of Ordinances Regulating Food and Food Service Establishments - Ordinance No. 3298 Presenter: Stephanie East, Environmental Health Supervisor Summary: This ordinance amendment will alter the Weekend Food Vendor definition to specify allowance of only one vendor per approved location, lower the required building square footage from 100,000 to 85,000, and require a permitted, inspected kitchen onsite. General Description: The NRH Code of Ordinances, Ch. 18, Article IV, Food and Food Establishments currently defines a Weekend Food Vendor as a food establishment which operates for no more than three consecutive days over a weekend at a single business with a minimum of 100,000 square feet of building space and is currently vague on number of allowable vendors per approved location. The proposed change to the ordinance will include specific language that would allow for only one vendor per approved location and lower the required building space to 85,000 square feet and require a permitted kitchen onsite. There are currently two permits issued for Weekend Food Vendor at both NRH Home Depots, and these locations will be allowed to maintain a legal, non- conforming status after the ordinance is amended. Under the current 100,000 square feet requirement, nine additional businesses have the option of a Weekend Food Vendor permit. Lowering the square footage from 100,000 to 85,000 with a permitted kitchen will allow for a total of five conforming businesses and two businesses in development that will be eligible for a Weekend Food Vendor permit. Recommendation: To approve Ordinance No. 3298 ORDINANCE NO. 3298 AN ORDINANCE AMENDING ARTICLE IV OF CHAPTER 18 OF THE NORTH RICHLAND HILLS CODE OF ORDINANCES; AMENDING DEFINITION OF A WEEKEND FOOD VENDOR AND FURTHER LIMITING LOCATIONS AND NUMBER OF SUCH BUSINESSES, ESTABLISHING A PENALTY, PROVIDING FOR SEVERABILITY AND FOR PUBLICATION. WHEREAS, City staff has recommended the adoption of amendments to the City's regulations of food and food service establishments to provide more definitive and detailed guidelines and standards and to clarify requirements for fees, inspections and enforcement; and WHEREAS, the City Council finds that the regulations adopted herein are necessary to protect the health and safety of those who consume food within the City; NOW THREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: Section 1: That Sections 18 -191 and 18 -277 of the North Richland Hills Code of Ordinances be amended to read as follows: "FOOD AND FOOD ESTABLISHMENTS 9]►IF►1.-]1001 fiwe►: I 1I:1:.111I WA Sec. 18 -191. Definitions. Weekend food vendor means a food establishment which operates for no more than three consecutive days over a weekend at a single business with a minimum of 85,000 square feet of building space that includes an onsite, permitted kitchen and ten feet of space in front of such business for such vendor. Only one weekend food vendor will be permitted per business. Weekend food vendors are limited to preparation and service of non - potentially hazardous foods and precooked, potentially hazardous food products requiring limited preparation such as heating, seasoning, and serving. "Sec. 18 -277. Weekend food vendors. Weekend food vendors must have a separate license for each location they serve and must provide, in writing, a statement of the location of the commissary that is used by the vendor to store food and equipment associated with the food, which must be inspected by the state department of health, or a Texas city or county health department. No operations shall be permitted in any fire lane and at least four feet of walkway into the building must remain open and unobstructed. No weekend food vendor shall operate in any zoning district other than retail or commercial. All zoning and fire regulations must be complied with. Weekend food vendors shall not be allowed to operate except within the ten feet closest to the front of the business building and shall not be allowed to operate unless the primary business building is open to the public. All existing weekend food vendors have legal, non - conforming status as of the date of adoption of this ordinance." Section 2: It is hereby declared to be the intention of the City Council that the sections, paragraphs, sentences, clauses and phrases of this ordinance are severable and, if any phrase, clause, sentence, paragraph or section of this ordinance shall be declared unconstitutional or otherwise invalid by the final judgment or decree of any court of competent jurisdiction, such invalidity shall not affect any of the remaining phrases, clauses, sentences, paragraphs and sections of this ordinance, since the same would have been enacted by the city council without the incorporation in this ordinance of any such invalid phrase, clause, sentence, paragraph or section. Section 3: Any person, firm or corporation violating any provision of this ordinance shall be deemed guilty of a misdemeanor and upon final conviction thereof fined in an amount not to exceed Five Hundred Dollars ($500.00); provided however, any violation of any provision that governs fire safety, public health, and/or sanitation, shall be punished by a fine not to exceed Two Thousand Dollars ($2,000.00). Each day and any such violation shall be allowed to continue shall constitute a separate violation and punishable hereunder. Section 4: The City Secretary is hereby authorized and directed to cause the publication of the descriptive caption and penalty clauses hereof. PASSED AND APPROVED on the 24th day of February, 2014 CITY OF NORTH RICHLAND HILLS ATTEST: Patricia Hutson, City Secretary Oscar Trevino, Mayor APPROVED AS TO FORM AND LEGALITY: George A. Staples, City Attorney 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. F.6 Consider Approval of Oil, Gas and Mineral Lease Amendment to the TCCD South Unit Presenter: Karen Bostic, Assistant City Manager Summary: Chesapeake Exploration, L.L.C. is requesting to amend and an Oil and Gas Lease that was approved in September 2008. General Description: In September 2008, Chesapeake Exploration, L.L.C. entered into an Oil and Gas Lease with the City of North Richland Hills. Under the Pooling section of the lease, Section 8, the maximum acreage allowed per unit for a gas well or a horizontal completion was not to exceed three hundred twenty (320) acres plus a maximum acreage tolerance of ten percent (10 %). Chesapeake has requested to increase the maximum acreage for the unit to six hundred forty (640) acres, the maximum unit size permitted by the Texas Railroad Commission for the Barnet Shale as well as the amount included in recent leases approved by the City. It is often difficult to evaluate whether an increase in the maximum unit size will be advantageous. The pros and cons of such a change are as follows: the larger the unit size the more diluted the City's interest is in the whole and as a result the smaller the City's royalty share will be on a per well basis; however, operators will often argue that a larger unit size will allow the drilling of more wells, which means the City will derive royalty payments from more wells than would otherwise be possible from a smaller unit. The lease contains 40.88 acres of City owned property. After evaluating the situation staff is recommending approval of the increase in the size of the pool unit to 640 acres. Recommendation: Authorize the City Manager to execute the Oil, Gas and Mineral Lease Amendment to TCCD South Unit. NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. AMENDMENT TO OIL, GAS, AND MINERAL LEASE Reference is hereby made to that certain Oil, Gas and Mineral Lease (hereinafter referred to as "the Lease ") dated the 2nd day of September, 2008, by and between City of North Richland Hills, a home rule municipal corporation of the State of Texas located within Tarrant County Texas, whose address is 7301 NE Loop 820, North Richland Hills, TX 76182, as Lessor, and Chesapeake Exploration, L.L.C., as Lessee, whose address is P.O. Box 18496, Oklahoma City, OK 73154 -0496, which a Memorandum of said Lease is recorded as Document No. D209011160, of the Official Public Records of Tarrant County, Texas. WHEREAS, TOTAL E &P USA, INC., whose address is 1201 Louisiana Street, Suite 1800, Houston, Texas, 77002, acquired an undivided 25% of Chesapeake's working interest in the Lease by Assignment, Bill of Sale and Conveyance, recorded as Document No. D210300998 of the Official Public Records of Tarrant County, Texas; and, WHEREAS, the aforementioned Assignees and Grantees are collectively referred to as "Lessee." WHEREAS, it is the desire of said Lessor and Lessee to amend the lease by changing the pooling provisions in Paragraph Eight (8) of the Lease. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned do hereby delete the entirety of Paragraph Eight (8) of the Lease and in its place insert the following: 8. Pooling. Lessee shall have the right but not the obligation to pool all of the Leased Premises or interests therein with any other lands or interests, and as to any or all substances covered by this lease, either before or after the commencement of production, whenever Lessee deems it necessary or proper to do so in order to prudently develop or operate the Leased Premises, whether or not similar pooling authority exists with respect to such other lands or interests; provided, however, that the entire Leased Premises covered by this Lease, shall be included in any unit created pursuant to the pooling authority granted herein. The unit formed by such pooling for an oil well which is not a horizontal completion shall not exceed eighty (80) acres plus a maximum acreage tolerance of ten percent (10 %) and for a gas well or a horizontal completion shall not exceed six hundred forty (640) acres plus a maximum acreage tolerance of ten percent (10 %). For the purpose of the foregoing, the terms "oil well" and "gas well" shall have the meaning prescribed by applicable law or the appropriate governmental authority, or if no definition is so prescribed, "oil well" means a well with an initial gas -oil ratio of less than 100,000 cubic feet per barrel and "gas well" means a well with an initial gas -oil ratio of 100,000 cubic feet or more per barrel, based on a 24-hour production test conducted under normal producing conditions using standard lease separator facilities or equivalent testing equipment and "horizontal completion" means a well in which the horizontal component of the gross interval in the reservoir exceeds the vertical component thereof. In exercising its pooling rights hereunder, within ninety (90) days of first production, Lessee shall file of record a written declaration describing the unit and stating the effective date of pooling which may be retroactive to first production. In the event Lessor's acreage is included in a well, all of Lessor's acreage shall be included. Production, drilling or reworking operations anywhere on a unit which includes the Leased Premises shall be treated as if it were production, drilling or reworking operations on the Leased Premises, except that the production on which Lessor's royalty is calculated shall be that proportion of the total unit production which the mineral acres covered by this Lease and included in the unit bears to the total number of mineral acres included in the unit. Pooling in one or more instances shall not exhaust Lessee's pooling rights hereunder, and Lessee shall have the recurring right but not the obligation to revise any unit formed hereunder by expansion or contraction or bother, either before or after commencement of production, in order to conform to the well spacing or density pattern prescribed or permitted by the governmental authority having jurisdiction, or to conform to any productive determination made by such governmental authority. In making such a revision, Lessee shall file of record a written declaration describing the revised unit and stating the effective date of revision. If the Lease Premises are included in or excluded from the unit by virtue of such revision, the proportion of unit production on which royalties are payable hereunder shall thereafter be adjusted accordingly. In the absence of production in paying quantities from a unit, or upon permanent cessation thereof, Lessee may terminate the unit by filing of record a written declaration describing the unit and stating the date of termination. Pooling hereunder shall not constitute a cross - conveyance of interests. It is understood and agreed by all parties hereto that in all other respects, the lease and the prior provisions shall remain in full force and effect. FURTHERMORE, each of the undersigned do hereby ratify, adopt and confirm the Lease as hereby amended, as a valid and subsisting Lease and the undersigned Lessor does hereby grant, demise, lease and let unto Lessee, the present owners of the Lease, the lands covered by the Lease, subject to and in accordance with all of the terms and provisions of the Lease as hereby amended. The terms and provisions hereof shall be binding upon and inure to the benefit of the parties hereto, their respective heirs, legal representatives, successors and assigns. This instrument may be executed in one document signed by all the parties or in separate documents which shall be counterparts hereof. If executed in separate counterparts, all such counterparts, when executed by one or more parties, shall constitute but one and the same instrument. The failure of one or more parties to execute this instrument or a counterpart hereof shall not in any manner affect the validity and binding effect of same as to the parties who execute said instrument. EXECUTED the day of 2014, but for all purposes effective the 2nd day of September, 2008. LESSOR: CITY OF NORTH RICHLAND HILLS By: Name: Title: City Manager Date: ATTEST: By: Name: Title: City Secretary Date: APPROVED AS TO FORM AND LEGALITY: By: Name: Title: City Attorney Date: LESSEE: CHESAPEAKE EXPLORATION, L.L.C., an Oklahoma limited liability company By: Name: Title: Date: ACKNOWLEDGEMENT STATE OF TEXAS § COUNTY OF TARRAN'T § The foregoing instrument was acknowledged before me, on this day of 2014 by of City of North Richland Hills, a Texas municipal corporation, on behalf of said corporation. 69aVi GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day and year last above written. Notary Public in and for the State of Texas. Signature of Notary: (Print Name of Notary Here) My Commission Expires: STATE OF OKLAHOMA § COUNTY OF OKLAHOMA § This instrument was acknowledged before me on this day of 2014 by as of Chesapeake Exploration, L.L.C., an Oklahoma limited liability company. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day and year last above written. Notary Public in and for the State of Oklahoma. Signature of Notary: (Print Name of Notary Here) SEAL: My Commission Expires: 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. C.0 EXECUTIVE SESSION ITEMS 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. C.1 Action on Any Item Discussed in Executive Session Listed on Work Session Agenda 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. H.0 INFORMATION AND REPORTS 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Subject: Agenda Item No. HA Announcements - Councilman Turnage Announcements Date: 2 -24 -2014 NRH20 is now accepting applications for its 2014 summer season. Applicants must be at least 15 years old. For job descriptions, applications and more information, please visit nrh2o.comljobs. Volunteers from AARP are assisting residents with their tax returns each Monday and Thursday through April 14th at the NRH Public Library. This free service is available to taxpayers of all ages. To make an appointment or get more information, please call the Library at 817- 427 -6814. Kudos Korner Every Council Meeting, we spotlight our employees for the great things they do. Tonight we recognize: Boe Blankenship and Terry Wreay of the Public Works Department — A resident expressed thanks and appreciation to Boe and Terry for their help in getting some old abandoned phone cables removed from the back of his property. He had previously made numerous inquiries to various companies for assistance but to no avail. After contacting the city, the old lines were finally taken down. He was very impressed with the quick response and stated "great job in caring for your residents." 10114 COUNCIL MEMORANDUM From: The Office of the City Manager Date: 2 -24 -2014 Subject: Agenda Item No. H.2 Adjournment