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HomeMy WebLinkAboutFY 2008 -- Popular Annual Financial Report ����uuuuuuuuuuuuum����.. I�No„°��Illllllllli�iuimmm��������,.��� .��..� Fiscal Year 2008 „000111 City of College Station POPULAR ANNUAL FINANCIAL REPORT As part of our continuous effort to keep you informed of how your tax dollars are being spent, we are pleased to present the 2008 Popular Annual Financial Report (PAFR). The PAFR is a summary of the finan- cial activities of the City's governmental and proprietary funds and was drawn from information found in the 2008 Comprehensive Annual Financial Report (CAFR). The CAFR was prepared in conformance with generally accepted accounting principles (GAAP) and includes financial statements audited by Ingram, Wallis & Co., P.C. Unlike the CAFR, the PAFR is unaudited and presented on a non-GAAP basis. The GAAP basis presenta- tion in the CAFR includes the presentation of individual funds, as well as full disclosure of all material events, financial and non-financial, in notes to the financial statements. Copies of the CAFR are available for public viewing at City Hall and online at: http://www.cstx.govihome/index.asp?page=258. FINANCIAL COLLEGE . . . The assets of the City of College Station exceeded College Station was incorporated in 1938 and has its liabilities at the close of the fiscal year by $371.6 an estimated population of 89,903 as of September million (net assets). Of this amount, $103.7 million 30, 2008. The city covers 47.2 miles in East Central (unrestricted net assets) may be used to meet the Texas and is the home of Texas A&M University, government's ongoing obligations to citizens and one of the top 50 universities in the United States. creditors. The City is a home-rule municipality and utilizes a The City's total net assets increased by $19.2 mil- Council-Manager form of government organized un- lion during the fiscal year. der the constitution and laws of the State of Texas. The City Council is composed of a mayor and six council Sales and mixed beverage taxes increased $1.8 mil- members elected at large. lion (9.7%) during the year. In addition, property tax revenues increased $2.1 million (11.3(i). Sales The City Council appoints the City Manager, City taxes and property taxes account for 55% of the Attorney, City Secretary, Municipal Court Judge city's Governmental Revenues and 77% of the Gen- and Internal Auditor. Almost all other City staff eral Fund's revenues. work under the direction of the City Manager. The City employed approximately 900 full-time equiva- lent (full-time, part-time and seasonal/temporary) employees in 2008. BOND RATING • • • The City received its most recent bond ratings in August 2008. The City received an upgrade from Standard &Poor's to AA from AA-. Moody's Investors Service confirmed the City's bond rating of Aa3. The "AA" rat- ing is reserved for organizations characterized by competent management, stable economies and manageable debt level. As with bonds rated "AAA", an "AA" obligor is judged to have a very strong capacity to meet its financial commitments. MAJOR INITIATIVES . . . ECONOMIC DEVELOPMENT During fiscal year 2008, the priorities of public safety, exceptional College Station has seen continued infrastructure, multi modal mobility and a destination place to growth in fiscal year 2008, despite live and work were addressed. $45 million in new provisions for the significant slowing of the na- governmental capital projects and $42 million in business-type tional economy. The concentration projects were made available in 2008. of stable employment sectors such as government and higher educa- The Fire Station #3 relocated in April 2008. The station, designed tion contribute to the steady growth to harmonize with the surrounding neighborhoods and blend that College Station has experienced with the environment, earned Fire Chief Magazine's top "Gold over the last several years. College Satellite" award for the station's design. The new station's loca- Station continued to see housing and tion improves response time and coverage to citizens. commercial development during the year with 685 new housing starts The Community Emergency Operations Center (CEOC) opened during 2008. Commercial develop- in June 2008. Staffed with management personnel from College ment continued to be strong with Station, Bryan, Brazos County and Texas A&M, full activation of both new and redevelopment. The this new emergency facility occurred in response to Hurricane Ike University Drive corridor continued in September 2008. to have new business and traffic. During 2008, the City completed Dartmouth Extension Phase II, The one major asset of the City of Bee Creek to Southwest Parkway Drainage Project, the Bike Loop College Station is that it is the home Project, Pedestrian Improvements on 2818 and on University and of Texas A&M University (TAMU). numerous park improvements, including Veteran's Park Phase II TAMU has a significant economic road extension, Oaks Park Basketball Pavilion, Southwood Park impact on the City, contributing Little League lights,West Park and Gabbard Park. A new forestry over a billion dollars annually to the shop for Parks and Recreation also finished construction in 2008. local economy. Student enrollment at TAMU was 46,542 as of Septem- In August 2008, the City issued$35.8 million in debt that will per- ber 2008. TAMU employs more than mit significant improvements to the City's infrastructure and pro- 20,000 full-time and part-time staff. vide a higher quality of life to its citizens. Included in the newly funded projects is $7.3 million for General Government projects, We continue to monitor the effect of the majority of which being the $6.7 million Memorial Cemetery, the nationwide economic slowdown with its Aggie Field of Honor, a project the entire community will locally. Fortunately, the impact has be proud to have. Other projects funded with the August 2008 been minimal to date. issuance were $1.5 million in parks and recreation improvements, $11.2 million in street/traffic improvements and $15.8 million in Water, Wastewater and Electric system improvements. One of the significant projects faced during 2008 was the prepara- tion for the 2008 bond election. The Capital Improvement Com- mittee prepared and Council approved the list of projects that went to the voters in November 2008. Voters approved 4 of 6 propositions for $76.95 million for streets and transportation, city library, fire station and parks and recreation. At September 30, 2008, the City's governmental funds tainable Revenue Sources Balanced with Needs; reported a combined fund balance of $72.3 million, a Exceptional Multi Modal Mobility; Sustainable $2.9 million increase over the prior year. These financial Quality City Workforce; Exceptional Infrastructure activities comprise the major changes in governmental and Core Services;Diverse Growing Economy; and fund balances: Destination Place to Live and Work. The following illustrates the City's governmental GOVERNMENTAL REVENUES ® • • expenditures. Public Safety (27%) and capital out- lay (22(70) are the largest uses of funds, followed Total revenues of the governmental funds increased by debt service (15%), parks and recreation (100), $4.2 million or 7.3% over the prior year. Below are public works (8%) and general government (8%). details accounting for the increase: Other Gen Govt • Property taxes increased $2.1 million (11.3%) 11% 8% during the year. This is primarily the result of � Debt Service the total ad valorem assessed valuations in- ° Alk Public Saftey creasing by $491 million over the previous fis 15/o 26% cal year. olosi • Sales and mixed beverage taxes increased $1.8 Capital Outlay million (9.70) during the year. This is attribut- 22% Public Works able to sustained economic growth in the area. 8% Interest and investment income decreased byParks • 10% $1.1 million (25.3%) during the year. This is attributable to lower interest rates on govern- Total expenditures of the governmental funds in- mental investments. creased $12.6 million to $90.4 million. The prima- ry causes of the increase were due to higher fuel The following illustrates the City's governmental and transportation costs during most of 2008, an revenues by source. Property tax (33%) and sales increase in Capital Outlays (amounts used for the tax (32%) are the largest sources of funds, followed purchase of equipment, roads, bridges and other by other taxes (9%), charges for services (6%) and capital assets) of $5.3 million and increasing per- fines and penalties (6%). sonnel costs. Fines and For 2009, other post employment benefit costs Charges for Penalties Investment (OPEB)will be between$10 thousand and$2.2 mil- Services 6% Income lion, government-wide, depending on the design 6% 5% adopted by the City for its OPEB plan. Because ac- counting rules changed, the City will recognize its Other Other Taxes /o� OPEB liability for the first time in 2009. 9% 11 o, 9% Sales Tax 14�11� Property Tax LONG-TERM DEBT • « • 32% 33% The City issues long-term debt to fund long-term governmental projects (using general obligation bonds and certificates of obligation) and business- type projects (using utility revenue bonds and cer- tificates of obligation). At 2008, the City had $224 The City of College Station's governmental fund's million in long term debt outstanding, of which spending in fiscal year 2008 reflects the priorities $14.9 million will mature during fiscal 2009. The set by the Council based on the City's Strategic City's total debt increased by $21.4 million (10.5%) Plan. Those Core Services are: Citywide Safety and during fiscal year 2008. The increase in total debt Security; Effective Communications; Growing Sus- resulted from the City issuing $9.4 million in gen- al obligation bonds and $26.4 million in certificates Water Fund Revenues and Expenses of obligation. These amounts were used to fund 2008 j,°P; .,. governmental and business-type projects and also 2007 i retire $14.6 million of previouslyissued debt. ®Revenues Y 2006 �"` p""""" •••••••••• °Expenses - I 2005 General Obligation debt is payable from the City 2004 property tax revenues (the debt service property tax levy). Utility revenue bonds are payable from $0 $5 $10 Minion l5 a portion of the charges for utility service. Certifi- cates of obligation are paid from either source, de- WASTEWATER FUND pending on the project being funded. The Wastewater Fund ended fiscal year 2008 with an operating income of $3.7 million on $11.1 mil- lion of revenue. The Wastewater Fund's operating wastewater debt revenues have been increasing due to an expanding $38 Million customer base and rate increases. The Wastewater Fund received $2.6 million in non-cash developer o Million debt $101„M contributions during fiscal year 2008. The follow- Water debt ing chart displays water revenues and expenses for $48.3 Million441 ,1 / this year and the previous four years. ( II 114 Iv 1till. PI Wastewater Fund Revenues and Expenses 1111111 I. "f Ii �^ 2008 w�w�r� mwp 441 1 i I -all a l 2007 -I j I ®Revenues 2006 °Expenses I I I A . . Zoos w�./w,rew� mwwwwww.mo PROPRIET 2004 iwc°wc�w'sawc wcia&wcnweiiwg itlxuwg """"wwwas. paqrNpuwwrwwwuswavwuswuvwavwuswawp I I I I College Station currently owns and operates its $0 $2 $4 $6 $8 $10MiIIions12 own water and wastewater plants and transmits and distributes its own electricity. The financial ac- tivities of each operation are recorded in the City's ELECTRIC FUND respective Water, Wastewater and Electric funds. Operating Revenues for each fund have shown The Electric fund generated an operating income steady growth in response to the expanding cus- of $7.7 million on $76.6 million of operating rev- tomer base and rate increases which correspond to enues. The net assets of the Electric Fund also in- rising costs. crease each year through developer contributions of installed electric lines. In fiscal year 2008, this WATER FUND non-cash contribution was valued at$632,029. The following chart displays electric revenues and ex- The Water Fund ended the current fiscal year with penses for this year and the previous four years. an operating income of$5.1 million on$11.8 million in operating revenues. The Water Fund's revenues Electric Fund Revenues and Expenses have been gradually increasing due to an increase 1 1 2008 1 in the number of customers and rate increases. The I 2007 n wn in1"n in Nwn 7 �NW�"P,�N�"J�N�NJ liN JV f"I Water Fund also receives developer contributions -I I 11 ea Revennes of installed water infrastructure. The Water Fund I °Expenses received $2.1 million in these non-cash donations 2005 '41' "'1"'1"'1"'1"lom"rg"m II 1 during fiscal year 2008. The following chart dis- 2004 „ ww,lu gilililgilililgilililgililili ddt III I I plays water revenues and expenses for this year $0 $20 $40 $60 $80 Ivi"nt100 and the previous four years. TYPES C of the GENERAL FUND Most City services and projects are accounted for Fund balance is the excess of what the City owns in a general category referred to as Governmental (assets) over what the City owes (debts or liabili- Funds. These brief descriptions provide basic in- ties). Fund balance is either reserved, unreserved formation about the governmental fund types. (designated), or unreserved (undesignated). Fund balance that is unreserved (undesignated) is the • The General Fund accounts for revenues and amount of funds available to spend at the city's expenditures associated with the general op- discretion. The City's fiscal and budgetary poli- erations of the City that are not required to be cies require that the General Fund's unreserved accounted for in separate funds. (undesignated) fund balance be at least equal to 15 percent of budgeted expenditures, a percentage • Special Revenue Funds account for proceeds equal to 55 days of expenditures. At the end of the of specific revenue sources that are legally re- fiscal year, the unreserved, undesignated fund bal- stricted for specific purposes (as an example, ance is approximately 18 percent of fiscal year 2008 Community Development Block Grants and budgeted expenditures and exceeds the minimum Red Light Cameras). requirement set by policy. • Debt Service Funds account for the accumula- At the end of the current fiscal year,unreserved and tion of resources for,and the payment of, gener- undesignated fund balance decreased by $2.1 mil- al long-term debt principal, interest and related lion from fiscal year 2007, while the General Fund costs. reserved fund balance increased by $1.2 million. Overall, the total General Fund balance reached • Capital Projects Funds account for the financial $11.9 million, a decrease of $947,200 (7.3%) during resources used for the construction and/or ac- the current fiscal year. The primary factor for this quisition of major capital facilities. reduction was an increase in expenditures, primar- ily driven by an increase in the price of fuel, trans- Proprietary (business-type) funds account for ac- portation and petroleum based products as well as tivities the City operates in a manner similar to pri- increasing personnel costs. The City filled vacant vate businesses. There are two types of proprietary positions, including several top management posi- funds: Enterprise funds and Internal Service funds. tions, funded through the General Fund during the The City has five enterprise funds (Electric, Wa- fiscal year. ter, Wastewater, Sanitation and Northgate Parking Garage) and eight internal service funds (Commu- The following chart displays the General Fund Bal- nication Services, Employee Benefits, Equipment ance for the current year and four previous years. Replacement, Fleet Maintenance, Property and Ca- sualty, Unemployment, Utility Customer Service $10,170,525 $12,932,589 and Workers' Compensation). $15,000,000 $10 702 952 91 $10i19 2 008 $11i"985 389 1111111111111111111111 „ 11����IIIII IIIIIIIIII IIIIIIIII11' klll" ����������IIIIIIIIIIIIIIIII�""" ''l The PAFR focuses on the City's major funds,which sio,000 oo0 are of most interest to citizens: the General Fund, Electric Fund, Water Fund and Wastewater Fund. 5 000 000 • • In addition, we aggregate resent the a ate financial ac- tivities of the Governmental Funds. $0 2004 2005 2006 2007 2008 MISSION STATEMENT On behalf of the citizens of College Station, home of Texas A&M University, we will continue to promote and advance the community's quality of life. CITY OF COLLEGE STATION CORE VALUES To Promote... Organizational Values... • The health, safety & general well being of the • Respect everyone community • Deliver excellent service • Excellence in customer service • Risk, Create, Innovate • Fiscal responsibility • Be one city, one team • Involvement & participation of citizenry • Be personally responsible • Collaboration & cooperation • Do the right thing— act with integrity, honesty • Regionalism: be active member of the Brazos • Have fun Valley community &beyond • municipal-empowering activities FINANCIAL REPORTING AWARDS • The City received the following awards from the Government Finance Officers Association (GFOA) in 2008: • Certificate of Achievement for Excellence in Financial Reporting for the year ended September 30, 2007. For twenty out of the last twenty-one years, the Government Finance Officers Association has awarded the City a Certificate of Achievement for Excellence in Financial Reporting. This award is the highest form of recognition for excellence in state and local government financial reporting. • Distinguished Budget Presentation Award for the year beginning October 1, 2007. The GFOA established the this program in 1984 to encourage and assist state and local governments to prepare budget documents of the very highest quality that reflect both the guidelines established by the National Advisory Council on State and Local Budgeting and the GFOA's recommended practices on budgeting. ACKNOWLEDGEMENT • • • The preparation of this report could not have been accomplished without the efforts of the entire staff of the Fiscal Services Department. We would also like to express our thanks to the City's Public Communications Department and IT staff for their support on the City's first PAFR. Our appreciation is also extended to the Mayor and City Council for their interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner.