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Comprehensive Annual Financial Report
AMIRM Comprehensive Annual Financial Report CITY OF ALLEN For Fiscal Year Ended September 30, 2015 Fire Station #2 ALLEN, TEXAS CITY OF ALLEN, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF ALLEN FISCAL YEAR ENDED SEPTEMBER 30, 2015 AS PREPARED BY THE FINANCE DEPARTMENT CITY OF ALLEN, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 TABLE OF CONTENTS II. FINANCIAL SECTION Independent Auditor's Report 1 A. MANAGEMENTS DISCUSSION AND ANALYSIS 4 B. BASIC FINANCIAL STATEMENTS Government -Wide Financial Statements EXHIBIT Page I. INTRODUCTORY SECTION Statement of Net Position Letter of Transmittal i Certificate of Achievement v Organizational Chart vi Elected Officials and Administrative Officers vii II. FINANCIAL SECTION Independent Auditor's Report 1 A. MANAGEMENTS DISCUSSION AND ANALYSIS 4 B. BASIC FINANCIAL STATEMENTS Government -Wide Financial Statements Statement of Net Position 1 17 Statement of Activities 2 18 Fund Financial Statements Governmental Funds Financial Statements Balance Sheet— Governmental Funds 3 20 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 4 22 Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds 5 23 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 6 25 Proprietary Funds Financial Statements Statement of Net Position — Proprietary Funds 7 26 Reconciliation of the Fund Level Statement of Net Position of Proprietary Funds to the Government -wide Statement of Net Position 8 27 Statement of Revenues, Expenses and Changes In Net Position — Proprietary Funds 9 28 Reconciliation of the Statement of Revenues, Expenses and Changes in Net Position of Proprietary Funds to the Statement of Activities 10 29 Statement of Cash Flows — Proprietary Funds 11 30 Component Units Financial Statements Statement of Net Position — Component Units 12 31 Statement of Activities — Component Units 13 32 CITY OF ALLEN, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 TABLE OF CONTENTS EXHIBIT Page Notes To Financial Statements A-1 Note 1. Summary of Significant Amounting Policies 33 Note 2. Deposits, Investments and Investment Policies 41 Note 3. Receivables 44 Note 4. Capital Assets 45 Note 5. Long -Term Debt 49 Note 6. Interfund Transfers 57 Note 7. Retirement Plan 58 Note 8. Water and Sewer Contracts 63 Note 9. Deferred Compensation Plan 63 Note 10. Risk Management 63 Note 11. Other Poslemployment Benefits (OPEB) 64 Note 12. Commitments and Contingent Liabilities 67 Note 13. Cumulative Change in Amounting Principle 68 C. REQUIRED SUPPLEMENTARY INFORMATION Schedule of OPEB Funding Progress and Contributions A-1 69 Schedule of Changes in the Net Pension Liability And Related Ratios -TMRS A-2 70 Schedule of Contributions —TMRS A-3 71 General Fund Schedule of Revenues, Expenditures And Changes in Fund Balances — Budget and Actual A4 72 Notes to Required Supplementary Information 73 D. COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Major Governmental Funds Comparative Balance Sheets - General Fund B-1 75 Comparative Statements of Revenues, Expenditures and Changes in Fund Balances—General Fund B-2 76 Comparative Balance Sheets — Debt Service Fund B-3 77 Comparative Statements of Revenues, Expenditures and Changes in Fund Balances— Debt Service Fund B4 78 Budgetary Comparison Schedule — Debt Service Fund B-5 79 Comparative Balance Sheets— General Capital Projects Fund B-6 80 Comparative Statements of Revenues, Expenditures and Changes in Fund Balances — General Capital Projects Fund B-7 81 CITY OF ALLEN, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 TABLE OF CONTENTS EXHIBIT Page Comparative Balance Sheets — General Obligation Bond Fund B-8 82 Comparative Statements of Revenues, Expenditures and Changes in Fund Balance—General Obligation Bond Fund B-9 83 Nonmajor Governmental Funds Combining Balance Sheet C-1 85 Combining Statement of Revenues, Expenditures and Changes in Fund Balances C-2 86 Major Enterprise Funds Comparative Statements of Net Position — Water and Sewer D-1 88 Comparative Statements of Revenues, Expenses and Changes in Fund Net Position — Water and Sewer D-2 89 Comparative Statements of Cash Flows — Water and Sewer D-3 90 Comparative Statements of Net Position — Solid Waste D4 91 Comparative Statements of Revenues, Expenses and Changes in Fund Net Position — Solid Waste D-5 92 Comparative Statements of Cash Flows— Solid Waste D-6 93 Comparative Statements of Net Position — Drainage D-7 94 Comparative Statements of Revenues, Expenses and Changes in Fund Net Position — Drainage D-8 95 Comparative Statements of Cash Flows — Drainage D-9 96 Comparative Statements of Net Position —Golf Course D-10 97 Comparative Statements of Revenues, Expenses and Changes in Fund Net Position — Golf Course Fund D-11 98 Comparative Statements of Cash Flows — Golf Course Fund D-12 99 Internal Service Funds Combining Statement of Net Position E-1 101 Combining Statement of Revenues, Expenses and Changes in Fund Net Position E-2 102 Combining Statement of Cash Flows E-3 103 CITY OF ALLEN, TEXAS F-5 109 COMPREHENSIVE ANNUAL FINANCIAL REPORT G-2 114 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 F-6 110 TABLE OF CONTENTS TABLE Page EXHIBIT Page Discretely Presented Component Units Reconciliation of the Governmental Funds Statement of 6 Comparative Balance Sheets -Economic Development Corporation F-1 105 Reconciliation of the Governmental Funds Balance Sheet to the Ad Valorem Tax Levies and Collections 8 Statement of Net Position F-2 106 Comparative Statements of Revenues, Expenditures and Changes Ratio of General Bonded Debt Outstanding 10 in Fund Balances F-3 107 Reconciliation of the Governmental Funds Statement of Pledged -Revenue Coverage 12 Revenues, Expenditures and Changes in Fund Balance F-4 108 Comparative Balance Sheets -Allen Community Development Corporation F-5 109 Reconciliation of the Governmental Funds Balance Sheet to the G-2 114 Statement of Net Position F-6 110 Comparative Statements of Revenues Expenditures and TABLE Page Changes in Fund Balances F-7 111 Reconciliation of the Governmental Funds Statement of 6 124 Revenues, Expenditures and Changes in Fund Balance F-8 112 Capital Assets Used in the Operations of Governmental Funds Comparative Schedules by Source G-1 113 Schedule by Function and Activity G-2 114 Schedule of Changes by Function and Activity G-3 116 Changes in Fund Balances, Governmental Funds TABLE Page fII inZ-3i[.7_1II&IX91[9J Net Position by Components 1 118 Changes in Net Position 2 119 Fund Balances, Governmental Funds 3 121 Changes in Fund Balances, Governmental Funds 4 122 Assessed Value and Estimated Actual Value of Taxable Property 5 123 Direct and Overlapping Properly Tax Rates 6 124 Principal Property Taxpayers 7 125 Ad Valorem Tax Levies and Collections 8 126 Ratio of Outstanding Debt by Type 9 127 Ratio of General Bonded Debt Outstanding 10 128 Direct and Overlapping Governmental Activities Debt 11 129 Pledged -Revenue Coverage 12 130 Demographic and Economic Statistics 13 131 Principal Employers 14 132 Full -Time Equivalent City Government Employees by Function/Program 15 133 Operating Indicators by Function/Program 16 134 Capital Asset Statistics by Function/Program 17 135 CITY OF �EFIRST RESPECT INTEGRITY DELIVER EXCEL PEpP CITY OF ALLEN March 22, 2016 Honorable Mayor and City Council, City Manager, Citizens of Allen: The Finance Department is pleased to submit the Comprehensive Annual Financial Report (CAFR) of the City of Allen, Texas (the City), for the fiscal year ended September 30, 2015. This report is published to provide the City Council, our citizens, City staff, and other readers with detailed information concerning the financial position and activities of the City. Management has prepared the report and is responsible for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures. To the best of our knowledge and belief, the enclosed data is complete and reliable in all material respects All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. Also included in this report is an unmodified ("clean") opinion on the City of Allen's financial statements for the year ended September 30, 2015 issued by Weaver and Tidwell, L L.P. The independent auditors' report is located in the beginning of the financial section of the CAFR. REPORTING ENTITY This report includes all funds of the City including its component units. Component units are legally separate entities for which the City is financially accountable but are not part of the City's operations. The Allen Economic Development Corporation (AEDC) and Allen Community Development Corporation (ACDC) are included in the financial statements as discretely presented component units. CITY PROFILE The City of Allen is the fourth largest city in population in Collin County, one of the fasted growing counties in the nation. Located 25 miles north of downtown Dallas on US 75, Allen encompasses approximately 27 square miles. The George Bush Tollway and Sam Rayburn Tollway (Hwy 121) provide direct access into the Metroplex and access to Love Field (27 miles) and Dallas Ft Worth International Airport (31 miles). With a population of 3.92 million in a 30 -mile radius, Allen sits in a prime location for restaurants, shopping centers and other retail venues. The quality of the Allen community attracts well- educated residents with a high level of spending power and disposable income. Current population of 93,261 at September 30, 2015 is estimated to grow to 115,000 at build out. Incorporated in 1953, Allen is a home rule charter city. The Charter can be amended only by a vote of the people and provides for seven non-partisan Council members, including the Mayor, to be elected at -large to staggered terms of three years. The Council is responsible for enacting ordinances, resolutions, and regulations governing the City as well as adopting the annual budget which serves as the foundation for financial planning and control. The City Council appoints the City Manager, who has full responsibility for carrying out Council policies and administering City operations. The Council also appoints the Municipal Judge and various advisory boards. City service departments provide a full range of services including police and fire protection emergency ambulance service, municipal courts, building code enforcement, library, parks and recreation, tourism, water and sewer services, sanitation/solid waste services, traffic engineering, and construction and maintenance of streets and infrastructure. The City employs 744.35 full time equivalent positions. 305 CENTURY PARKWAY • ALLEN, TEXAS 75013-8042. 214.509.4100 WEB: w .ciwofilleo.oni • EMAIL: coa@cityofallcn.org ECONOMIC CONDITIONS AND OUTLOOK Regional Economy In February 2013 Forbes magazine reported, from data gathered from Moody's Analytics, that Texas dominates the best cities for good jobs. In fact, it reported that five metropolitan areas in Texas were in the nation's top ten with Dallas taking the top spot. The City of Allen unemployment rate in 2015 was 3.2% and the Collin County unemployment rate was 3 6%, both of which were below the national rate of 5.3%. The Dallas -Fort Worth area has an incredibly diversified economy, excels in a low unemployment rate, a growing labor force, low cost of living, affordable real estate costs and a superior business climate. The lower cost of living creates huge savings to corporations and their employees when relocating to Texas. Allen's Position in the Region Along with an ideal location just 12 miles north of Dallas on US 75, Allen's appealing demographics have spurred along record-breaking growth. The population of 93,261 is expanding with an estimated 2.5% growth rate. Allen has benefited from a well-educated and affluent workforce with an average median family income of $113,476 as reported by the U.S. Census Bureau, American Community Survey. With a median age of 35.5, over 52.5% of adults have a Bachelors degree or higher and the median earnings for a resident with a bachelor's degree is $68,511. Allen is a community that offers exceptional housing, award-winning schools, steady job growth, and dynamic business climate all of which are strong factors in the success of the City's economy. The quality of the Allen community attracts residents with a high level of spending power and disposable income This makes Allen a prime location for restaurants, shopping centers and other retail venues. Allen's progress continues to be recognized as the City was named the second beat city for first-time home buyer in WalletHub, July 2015 and was named 21" Safest City in Texas by SafeWise com, May 2015 Long Range Financial Planning The City's responsiveness to emerging economic challenges and its long -tens planning have been key factors in its fiscal health. The City has a five-year financial plan and a seven year capital improvement plan where departments reevaluate project priorities, review funding sources, and identify new projects as needed. Using this plan allows the City to plan the timing of projects associated with debt issuance and the effects on the tax rate. Standard and Poors credit rating report stated "the city's Financial Management Assessment (FMA) to be 'strong', indicating practices are strong, well embedded and likely sustainable." The City continues to maintain the highest 'AAA' rating from Standard and Poor's and Aal from Moody's on its general obligation, certificate of obligation bonds. The Water and Sewer Revenue Bonds are rated 'AAA' from Standard and Pcor's and Aa2 from Moody's. S&P's May 2014 rating report supporting the 'AAA' rating stated the following credit factors: • Strong local economy • High effective buying income, strong market values • Budgetary flexibility and strong year end reserves and liquidity • History of strong financial management practices that are sustainable • Faster than average debt amortization and moderate overlapping debt, while the debt liabilities profile is adequate During FY2015, the City issued $32,245,000 in General Obligation refunding and improvement debt for streets, parks, building renovations, public art, and public safety projects authorized in the 2007 Bond Program. Due to conservative budgeting and effective management, the City continues to cash finance capital projects thus saving debt issuance and interest costs. In FY2015, the General Fund contributed $2,496,149 for future capital projects, Water and Sewer Fund $370,000 for water/sewer replacements and pump and lift station improvements, the EDC contributed $1,000,000 towards Water & Sewer infrastructure projects, and Solid Waste Fund $900,000 for alley repairs. Fiscal Year 2015 Highlights During FY 2015, the City accomplished many initiatives to enhance livability, improve personal experience, invest in the future, and celebrate the successes. From quality neighborhoods to park development, community safety, and environmental initiatives, it's no surprise that people move here because they want Allen's quality of life. As the city's population continued to grow, the need for new housing continued as well with the Community Development Department issuing over five hundred building permits. The City welcomed a variety of new businesses —Nine Band Brewery, Brass Tap, Bonefish Grill, and Monkey Sports and facilitated several new residential developments including Cypress Meadows, Angel Field West, Cottonwood Crossing, Villas at Twin Creeks, Ansley Meadow, and Bella Terra Multi -family. The City also administered Community Development Block Grant funds which went toward the rehabilitation of fourteen homes within Allen's older neighborhoods. As one of the safest communities in the state and nation, the City of Allen experienced a fifth consecutive year of crime reduction in 2015. The Allen Police Department continually strives to rapidly address emerging crime issues. Innovative Community Relations programs have also enhanced community engagement. The Fire Department also improved their service to the community by working with the Insurance Service Office to maintain our Public Protection Classification (PPC). The PPC for Allen is a Class 2 which places Allen in the top 5% of the ratings. The Fire Department expanded MediSim which is an EMS simulation training program utilizing a high tech patient mannequin. Other service initiatives included the activation of additional features, such as the enhanced use of "address points", in the Computer Aided Dispatching system to further reduce dispatching time. Finally, the department increased inter -operability with neighboring fire departments through joint training and resource sharing. The City's environmental conservation and green initiatives span the entire city through continuation of the CitySmart Program that is aimed at improving energy efficiency of City buildings, enhancing recycling efforts at City facilities, opening a new Chemical Reuse Center, providing special events and public education for state mandated programs related to protecting and conserving natural resources, and developed a 2015 —2020 Water Conservation and Drought Plan. For the first time in FY 2015, the Library checked out over 1 million items and reached new highs in visitors and program attendance while providing a welcoming environment to Allen citizens. Library programs encouraged reading among all segments of the community from infants to seniors, including storytime and Summer and Writer Reading Clubs for children, teens, and adults. Literary, cultural, movie, and musical events supported lifelong learning needs and interests supplemented by programs about food, crafts, travel, health, and financial planning. The Library sustained a vibrant collection of popular and relevant books and audiobooks (both print and electronic) and videos. For patrons' convenience, online payment options were added for Library fines and fees. In 2015, the CDC provided funding for several projects such as the City of Allen Entry Monument, engineering and design of Ford Pool, construction of the Hillside Park play area, various reconstruction and equipment at recreational facilities, renovations to buildings at the historic Heritage Village, share the road bicycle signage, and trail development. The Allen Economic Development Corporation worked to bring a variety of companies and related development to Allen- The Convention Center at Walters Creek, an $85 million convention center with 65,000 s.f of meeting space and a 300 room four star hotel; Quest Medical, a medical device manufacturer, expanded production with $2 million investment and 25 new jobs, Intelligent Epitaxy, a silicon wafer manufacturer, is building a 40,000 s.f manufacturing and office building to relocate and bring 50pbs and $13.7 million in investment, Hams Local Government Solutions relocated its offices with 55 employees and kicked off Corporate Center ill, a 19,000 s.f. office building with $3 million investment, Ad -Tex Electric expanded with a new 20,000 SF headquarters and service center with 70 jobs and $2.5 million investment Gorilla Technologies relocated from California, bringing 25 jobs, Wholesale two broker Lakeland Marketing relocated its corporate headquarters and brought 25 jobs and $800,000 in investment to the Allen CBD These projects not only increased the city's property tax base, but also positively affected the city's economy by increasing the number of jobs in Allen. One of the city's major draws, Allen Event Center, is home to a wide range of entertaining shows and events- Disney on Ice, Riverdance 20"' Anniversary Tour, Theresa Caputo, The Brian Selzer Orchestra, Counting Crows, Lenny Kravitz, Boston, Doobie Brother, collegiate sports, and trade shows. The event center is also the home to professional sports; the Allen American Hockey team, the Dallas Sidekicks Soccer team, and the Texas Revolution Indoor Football team. The Allen Americans capped another successful season by winning, The Kelly Cup, their third consecutive championship. Allen Convention and Visitors Bureau, or CVB, funded by the Hotel Tax Fund, markets Allen as a destination for meeting and sporting event planners. This helps generate economic activity from the visitors to Allen. Events such as the Lone Star Conference Basketball Championships, and the National Collegiate Wrestling Association Championship resulted in over 7,000 visitors that booked over 3,000 hotel room nights, and generated more than $3 million in economic activity. The CVB also stimulates regional tourism by promoting the city for shopping, dining and entertainment. Wth all this happening within Allen's borders, it's clear that the city is working hard to provide every resident and visitor with great experiences, services and safety. Relevant Financial Policies A resolution amending the Debt Management and Fund Balance Reserve Policy to reflect new accounting requirements (GASB 54) was approved by Council in September 2011. The Investment Policy is also approved annually by the Council. All other policies (accounting, budgeting, procurement, capital improvements, asset management, and risk management) are internal policies approved by the Finance department and City Manager. These policies follow guidelines established by management, professional organizations and/or state and federal laws. On a quarterly basis the Finance Department prepares financial and investment reports which are presented to the City Council, AWARDS AND ACKNOWLEDGEMENTS 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 of Allen for its CAFR for the fiscal year ended September 30, 2014. This was the seventeenth consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgements — We would like to express our sincere gratitude to City personnel who contributed to this report, especially Dana Thornhill, Controller and Tru Nguyen, Senior Accountant II. Appreciation is expressed to representatives of Weaver for their invaluable assistance in producing the final document and to the City Managers once and the members of the City Council whose leadership and commitment are vital to the health and vitality of Allen. Respectfully submitted, Eric Cannon, CPA Joanne Stoehr Chief Financial Officer Assistant Chief Financial Officer J Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Allen Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2014 Executive Director/CEO CITY OF ALLEN ORGANIZATIONAL CHART Citizens of Allen {7 City Attorney Cly Manager M Assistant City Manager Assistant Ciy Manager Human Resources City Secretary Public antl Metlie Relations Community Development Community Services w Engineering Finance I I I Fire Library w Information Technology Police M Parks and Recreation CITY OF ALLEN, TEXAS CITY OFFICIALS Councilmembers Mayor Mayor Pro Tem, Place 5 Place 1 Councilmember Place 2 Councilmember Place 3 Councilmember Place 4 Councihnember Place 6 Councilmember Management Staff City Manager Chief Financial Officer Assistant Chief Financial Officer Controller Stephen Terrell Gary L. Caplinger Kurt Kizer Ross Obermeyer Joey Herald Robin L. Sedlacek Baine Brooks Peter H. Vargas Eric Cannon Joanne Stoehr Dana Thornhill CITY OFALLEN P��P��FIRST RESPECT INTEGRITY DELIVER EXCEL weaver} I„uwnn.ry`.AOW,ay INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Members of the City Council City of Allen, Texas Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund and the aggregate remaining fund information of the City of Allen (the City), as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparafion 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 and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit 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. AN INDEPENDENT MEMBER OF WEAVER AND TIDWELL, LL.P. 12221 MERIT DRIVE, SUITE WW, DALLAS, Tx 75251 BAKER TILLV INTERNATIONAL CERTIFIED PUBLIC ACCOUNTANTS ANO ADVISORS P: 972699.1979 F: 972 702 8321 City of Allen, Texas Page 2 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions 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, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Allen, Texas, as of September 30, 2015, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Change in Accounting Principle As discussed in Note 13 to the financial statements, the City adopted new accounting guidance, GASB Statement No. 68, Accounting and Financial Reporting for Pensions - an Amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, an Amendment of GASB Statement No. 68, as of September 30, 2015. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, schedule of changes in net pension liability and related ratios, schedule of contributions, schedule of OPEB funding progress and contributions, and budgetary comparison information on pages 4 through 16 and 69 through 73 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. City of Allen, Texas Page 3 Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's financial statements as a whole. The introductory section, combining and individual major and nonmajor fund financial statements, the discretely presented component units financial statements and schedules, schedules of capital assets used in the operation of governmental funds, and statistical section, are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual fund statements and schedules, as listed in the table of contents, are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Such 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 financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Governmental Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 15, 2016, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. W&.Vft AAA I rN.tua t r.i WEAVER AND TIDWELL, L.L.P. Dallas, Texas March 15, 2016 CITYOFALLEN IN lE`IRST RESPECT INTEGRITY DELIVER EXCEL PEpP MANAGEMENT'S DISCUSSION AND ANALYSIS CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (UNAUDITED) As management of the City of Allen, Texas, we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended. FINANCIAL HIGHLIGHTS • The assets and deferred outflows of resouroes of the City exceeded its liabilities (net position) at September 30, 2015 by $592,870,837. Of this amount, $50,331,748 (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 $5,268,441. The increase is primarily a result of an increase in revenues from property tax, water sales and sewer charges. • The City's governmental funds reported combined ending fund balances of $71,787,052 at September 30, 2015, an increase of $10,485,499 from the prior fiscal year. This increase is due to revenue as a result of the sale of general obligation bonds, actual revenues received being higher than anticipated, and prudent, conservative management of City staff that allowed the City to transfer $2,496,149 to the General Capital Projects Fund for future capital projects, $85,000 to the Golf Course, and $895,851 to the Replacement Fund. • At the end of the fiscal year, the unassigned fund balance for the General Fund was $18,686,921 or 23% of total General Fund expenditures. • On a government -wide basis, the City's total liabilities increased by $21,897,115, primarily as a result of the City implementing GASB Statement No. 68, which requires reporting the net pension liability in the financial statements. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction 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. This report also contains other 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 that of a 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 position of the City is improving or deteriorating. To assess the overall health of the City, other non-financial factors should also be taken into consideration, such as changes in the City's property tax base and the condition of the City's infrastructure. The Statement of Activities presents information showing how the City's net position changed during the fiscal year. All changes in net position are reported when the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. 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 but unused compensated absences). Both the Statement of Net Position and the Statement of Activities are prepared utilizing the accrual basis of accounting as opposed to the modified accrual basis used in prior reporting models. CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (UNAUDITED) In the government -wide financial statements, pages 17 through 19, the City is divided into three kinds of activities: Governmental activities - Most of the City's basic services are reported here, including the police, fire, library, community development, parks and recreation, municipal court, and general administration. Property and sales taxes, charges for services, franchise fees, and state and federal grants finance most of these activities. • Business -type activities - The City's water, sewer, solid waste, drainage, and golf course operations are reported here. These are functions intended to recover all or a significant portion of their costs through user fees and charges. • Component units - The City includes two separate legal entities in this report: the Allen Economic Development Corporation (AEDC) and the Allen Community Development Corporation (ACDC). Although legally separate, these component units are important because the City is financially accountable for them. Fund financial statements - A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City can be divided into two categories: governmental and proprietary. Governmental Funds - These funds are used to account for the majority of the City's activities, which are essentially the same functions as governmental activities in the government -wide statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near - tern inflows and outflows of spendable resources, as well as resources available for future spending at fiscal year end. These funds are reported using the modified accrual basis of accounting, which measures cash and all other financial assets that can be readily converted to cash. When compared with similar information in the broader govemment-wide financial statements, readers may better understand the long-term impact of the government's near -tern financing decisions. Reconciliation is provided that details the relationships or differences between governmental activities and governmental funds; reconciliation follows the fund financial statements. The City maintains several individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance for the General Fund, Debt Service Fund, General Capital Projects Fund and General Obligation Bond Fund, all of which are considered to be major funds. Data for the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The basic governmental fund financial statements can be found on pages 20 through 25 of this report. Proprietary Funds - The City maintains two different types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business - type activities in the government -wide financial statements. The City uses enterprise funds to account for its water and sewer operations, solid waste collection, disposal services, drainage operations, and golf course operations Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses its internal service funds to account for vehicle, machinery, and equipment replacements and costs associated with workers compensation, liability and property insurance, and employee medical and dental insurance programs. These services have been included within governmental activities in the government -wide financial statements as they predominantly benefit governmental rather than business -type functions. CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (UNAUDITED) Proprietary funds provide the same type of information as the govemment-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water and sewer operations, solid waste collection, and disposal services since they are considered to be major funds of the City. The Drainage Fund and the Golf Course Fund are the only remaining enterprise funds, and they are being presented as major funds even though they do not meet the criteria of a major fund established in Governmental Accounting Standards Board Statement No. 34. All internal service funds are combined into a single aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on pages 26 through 30 of this report Notes to the Financial Statements -Additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements is provided in the notes to the financial statements found on pages 33 through 68 of this report. Other Information - In addition to the basic financial statements and accompanying notes, this report also presents required supplementary information highlighting budgetary information for the Geneml Fund, pension schedules for TMRS, and a funding schedule for OPEB found on pages 69 through 73 of this report The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented following the required supplementary information. Comparative schedules of capital assets used in the operation of governmental funds are found on pages 113 through 116. GOVERNMENT -WIDE FINANCIAL ANALYSIS As noted earlier, over time net position may serve as a useful indicator of the financial position of a government. The assets of the City of Allen exceed the liabilities by $592,870,837 as of September 30, 2015. By far the largest portion of the City's net position ($510,718,642 or 86%) refiects its net investment in capital assets (i.e. land, buildings, infrastructure, vehicles, machinery, and equipment). The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City reports the net investment in its capital assets, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Table 1 Statement of Net Position Governmental Activities Business-tvpa Acrvites Total 2015 2014 2015 2014 2015 2014 Current and other assets $ 96,605,709 $ 84,0112,980 $ 42,271,288 $ 30,489,M2 $ 138,877,057 $122,5]2,830 capital eaeate 491,546,112 502,347,524 109,672,288 109,697,938 601,218,400 612045480 Total Assets 568,1511901 586,430,512 151,943,558 148,18],]78 740,095,457 734,818,290 Deferred inflom of resources 7,364,533 1,700,087 921,0118 321,461 6,285,619 2,021,548 L., -term liabilities 127,]08,3]3 109,6211996 10,291.219 9,282.613 13],99],802 1111,904,809 OB,erliabildies 9,752,936 8,914,758 6,267,830 4,301,8118 16,020,786 13,218,844 Total Liabilities 13],459,309 118,536,752 181559,059 13.564501 154018,3611 132121253 Deferred!outemvs of re...a 1,32],042 - 164,829 1,491,871 Net Position Net investment in capital aieets 408,3711,054 415,]90,43] 102pM.566 100,991,443 510,71x"2 516,]111,880 Restricted! 31,476,026 28,066,205 344,421 28,859 31,820,447 28,093,084 Unresbitled 18,678,003 27,737,205 33,455,745 33,906,438 50,331,748 818/3641 Total Net Position $458730083 $489,593,647 $136140,]54 $131.924,]38 $592,11]0,837 $804,518,585 CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (UNAUDITED) An additional portion of the City's net position, $31,820,447, represents resources that are subject to external restrictions on how they may be used; the remaining balance of $50,331,748 may be used to meet the government's ongoing obligations to citizens and creditors. Analysis of the City's Operations - As of September 30, 2015, City had an overall increase in net position of $5,268,441 for the government as a whole which represents an increase of $2,157,490 for governmental activities and an increase of $3,110,951 for business -type activities. The increase in governmental activities is primarily a result of an increase in revenue related to charges for services, operating grants and contributions, capital grants and contributions, property taxes, franchise taxes, interest earnings, miscellaneous revenue and budgeted transfers. The increase in business -type activities is primarily a result of an increase in water sales due more moderate water restrictions which allowed residents to water more frequently and an increase in sewer charges. A summary of the City's operations for the year ended September 30, 2015 is provided in Table 2. Table 2 Changes In Net Posigon Governmental Aciwities Business-tvce Acavitlea Total 2015 2014 2015 2014 2L1 2014 Revenues: Program Revenues Charges for services $ 14,785,198 $ 14,075,714 $ 44,436,528 $ 39,181,237 $ 59,221,726 $ 53,256,951 Operating grants and contrbutions 1,749,567 1,121,356 1,000,000 1,000,000 2,749,567 2,121,356 Capital grants and contributions 10,552,610 9,571,206 4,416,642 3,685,960 14,969,252 13,257,166 General Revenues: Property taxes 50,143,986 4,232,565 - - 50143,986 46,232,565 Sales tax 18,141,683 18,004,636 - - 18,141,683 18,061,636 Franshestaxes 7,412,417 6,973,705 - - 7,412,447 6,973,705 Hotel motel taxes 1,541,160 1,499,512 - - 1,544,160 1,499,512 Other tares 1,851,397 2,151,232 - - 1,851,397 2,151,232 Interesleemings 1 416,828 194,051 134,988 883,787 551,816 Miscellaneous 2,650,103 2,415,491 1,003,939 850,157 3,654,042 3,29,648 Total Revenues 109,520,887 102,492,245 51,051,160 41,852,342 160,572,047 147,344,587 Expenses: General government 24,464,246 24,940,939 - - 24,464,246 24,940,939 Public sarety 31,607,444 30,408,487 - - 31,1 30,408,487 Pudic aeries 18,349,569 18,252,130 - - 18,349,569 18,252,130 Culture and recreation 32,407,934 30,987,689 - - 32,4m,934 30,987,689 Community development 2,861,704 2,689,517 - - 2,861,704 2,689,517 Interest on long-term debt 3,921,989 3,955,305 - - 3,921,989 3,955,305 Water and sewer - - 32,304,628 30,081,379 32,304,628 30,081,379 Solid waste services - - 5,560,294 5,383,215 5,560,294 5,383,215 Drainage - - 914,322 951,973 914,322 951,973 Gaff course 2,911,476 2,839,098 2,911,476 2,839,098 Total Expenses 113,612,886 111,234,067 41,690,720 39,255,665 155,303,806 150,489,732 Change in net position before transfers (4,091,999) (8,741,822) 9,360,410 5,596,677 5,268,411 (3,145,145) Transfers 6,249,489 5,627.137 (6,249,489) (5,627,137) Change in net position 2,157,490 (3.114,685) 3,110,951 (30460) 5,268,411 (3,145,145) Net position, beginning of year, as restated 454,572,593 472 708.532 133.029.8M 134 955.198 587,602.396 607,663,730 Net position, end at year $456,730,083 $469,593,847 $1%,140754 $134,924,738 $592,870,837 $60,518,585 CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (UNAUDITED) Governmental activities Revenues — The following chart visually illustrates the City's revenue by sources for governmental activities: Revenues by Source- Governmental Activities Other Transfers ChaMesforservice 6% 5%13% Operating grants Franchisetaxes 2% 6% Capital grants 9% Revenues for the City's governmental activities increased by $7,028,642. Major components of revenue increases and decreases are explained as follows: • Property taxes increased by $2,474,203 or 8.5% due to an increase of 9.43°% from prior year's valuation. This increase is due to real property reappraisals and new property additions. • Franchise taxes increased by 6.3% as a result of an increase in public education government access fees, cable franchise fees, access line fees, and solid waste franchise fees increasing. Operating grants and contributions increased by 56°% due to an increase in grant revenue and park dedication fees. • Capital grants and contributions increased by 10.3°% due to an increase in developer contributions for right of way and an increase in intergovernmental revenue for street and parks projects. • Charges for services increased by 5% due to the an increase in ticket and alcohol sales at the Allen Event Center, an increase in revenue generated from the Allen Community Ice Rink, an increase in facility rentals, an increase in street inspection fee revenue, and an increase in revenues generated from the Senior Center hosting trips and other activities. • Fine Revenue (Other Taxes) decreased by 14% as a result of ticket violation revenue decreasing. Interest earnings increased by $272,908, an increase of 65%, as a result of interest rates continuing to increase and additional interest earnings from the City issuing $32,245,000 in general obligation refunding and improvement bonds of which $7,865,000 was a new issue. Expenses for governmental activities increased by $2,378,819 or 2%. Components of increases and decreases are explained as follows: • Expenses include employee annual merit increases, adding 16.77 fulltime equivalent positions throughout various departments in order to address goals in the strategic plan and in order to maintain the current level of service, and an increase of 4.5% for health and dental costs • Expenses for Public Safety increased by 4% due to the City incorporating a new methology for the public safety pay plan in an attempt to maintain competiveness, adding three School Resource Officers to accommodate a request made by the school district, three new Police/Fire EMS dispatchers to enhance staffing levels in the communications unit, one new Animal Control Officer to enhance coverage and a Support Services Technician in the Fire Department to assist with the maintenance of fire facilities and equipment. CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (UNAUDITED) • Expenses for Culture and Recreation increased by 4.6% due to merit increases, increasing the Parks and Recreation FTE by 3.24 to conform to the Patient Protection and Affordable Care Act (PPACA) and to accommodate increasing demand at the Allen Community Ice Rink, an increased in economic grants reimbursed in relation to additional facility fee revenues generated through ticket sales, and an increase in professional services at the Allen Event Center due to an increase in number of events held. • Expenses for General Government decreased by 2% due to prudent, conservative management by city staff. The following chart illustrates the relationship between expenses and program revenues for governmental type activities: Expenses and Program Revenues - Governmental Activities sss,aoo.oao sa,000,soo san,aoo,am s+s,aooaoo s+o,aoo,om ssoao.o$0 .s,p.,,,,. �' •fl.wnuoa W a+�0 Qe a ,bn �a�� eoc CY r m fi F v � Business -type activities - Revenues - The following chart visually illustrates the City's revenue by sources for business -type activities: CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (UNAUDITED) Business -type activities revenues increased $6,198,818 or 14%. Major components of the decreaseslincreases are as follows: • Capital contributions for water and sewer lines and impact fees increased by $730,682 or 19.8% due to an increase in developer contributions for water mains and sewer lines. • Interest earnings increased by $59,063 or 44% as a result of rales for investments continuing to increase during fiscal year 2015. • Charges for services for business -type activities increased by $5,255,291, or 13% due to water sales increasing by 28% as a result of more moderate water restrictions which resulted in citizens watering more frequently, an increase of 6.6% in sewer charges, and an increase of 6.2% in drainage revenues. Expenses for business -type activities increased by $2,435,055, or 6%. The increase was due to an increase of 8.6 % in expenses in the Water and Sewer Fund, an increase of 3 3% in expense in the Solid Waste Fund and an increase of 2.5% in expenses in the Golf Course Fund. The increase in the Water and Sewer Fund and the Solid Waste Fund was primarily a result of an increase in the amount paid to North Texas Municipal Water District (NTMWD) as they proceed with capital expansion plans that increased the City's costs associated with water and sewer service from the District. The increase in the Golf Course Fund was a primarily a result of an increase in liquor state tax expense paid to the State. The following chart illustrates the relationship between expenses and program revenues for business - type activities $40,000,000 $35,000,000 $30,600,000 $25,OW,O00 $2010001000 $15,000,OOD $10,000,000 $5,000,000 Expenses and Program Revenues - Business -type Activities Water and Solid waste Drainage Go0course sewer services 10 e Fxpeneee e Rewnues CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (UNAUDITED) FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS Governmental funds The focus of the City of Allen's 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 measure of a government's net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the governmental funds reported combined ending fund balances of $71,787,052, an increase of $10,485,499 in comparison with the prior fiscal year. Approximately 26%, or $18,686,921, constitutes unassigned fund balances, which are available for spending at the government's discretion. The remaining fund balances are classified as assigned, restricted or nonspendable to indicate that they are not available for new spending allocation The nonspendable portion includes prepaid items ($1,486), restricted funds are for debt service ($1,293,259), capital projects ($42,653,993), tourism ($3,646,160), asset forfeiture ($64,483), state and federal grants ($430,537), park acquisition and development ($1,509,934), tax increment financing agreements ($1,800,064), court technology ($11,861), PEG fees ($674,527), photo red light enforcement ($34,790), cemetery trust ($58,007), and assigned funds include facility maintenance ($914,805) and encumbrances ($6,225). The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the total unassigned fund balance was $18,686,921. Current operating expenditures had savings of $3,543,819, allowing $2,496,149 to be transferred to the capital projects fund for self-financing of capital projects, $85k to the Golf Course Fund, and $895,851 to the Replacement Fund. The total fund balance increased from $19,152,440 to $20,388,622. This increase is due to prudent, conservative management by City staff. The Debt Service Fund fund balance of $1,293,259, all of which is restricted for the payment of debt, increased from the prior year by $403,557. This increase was due to property taxes coming in over the budgeted amount and transfers in. The fund balance meets the FY2015 5-10% of annual debt service requirement of $648,381 to $1,296,761. The General Capital Projects Fund provides information on cash financed capital projects and had an ending fund balance of $22,383,302, an increase of $4,010,334. Revenues and transfers from other funds totaled $8,455,710, which included $600,000 received from the developer for the Montgomery Boulevard extension, $314,178 received from the developer for widening of Bray Central, $2,200,000 from Collin County for Ridgeview Drive, $364,700 in special assessment revenue, $312,752 in miscellaneous revenue for street improvements, and $3,646,149 from other funds to cash finance capital projects. Total expenditures of $4,445,376 consisted of $1.1m for Montgomery Boulevard extension, $729,442 for Ridgeview Drive, $656,065 for Bray Central widening, and $523,075 for citywide street and alley repair. The General Obligation Bond Fund had an ending fund balance of $20,270,691, an increase of $3,902,293 from the prior year. Expenditures totaled $3,821,751 which primarily included $2.1m for Ridgeview Drive, $646,157 for citywide street and alley repair, and $536,665 for Fire Station #2 reconstruction. The City's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. At the end of the year, unrestricted net position for all enterprise funds are as follows: Water and Sewer, $28,614,184, Solid Waste, $3,084,938, Drainage, $633,185, and Golf Course, ($156,648). The total change in net position for the funds was an increase of $3,385,263, a decrease of $383,100 a decrease of $48,049, and an increase of $15,352, respectively after restating the prior year, see Note 13 11 CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (UNAUDITED) The Water and Sewer Fund had an increase in net position as a result of an increase of 17% in operating revenues, The Solid Waste Fund had a decrease in net position due to an increase in contractual services and an increase in transfers out to other funds. The Drainage Fund had a decrease in net position due to the increase in transfers out to other funds The Golf Course Fund had an increase in net position due to a transfer in from the General Fund. General Fund Budgetary Highlights During April and May, all accounts are evaluated to determine it they are in line with the original budgets. Accounts that are under or over budget are revised to meet year-end estimates. New projects are not added to the year-end estimate; only the cost of maintaining the current base operation is revised as needed. As is customary, during FY2014-15, the City Council amended the budget for the General Fund onetime. Adjustments made during the FY2014-15 decreased the original revenue budget by $354,059 and decreased the expenditure budget by $556,461. Due to the actual expenditures being $3,543,819 less than the revised budget, the City was able to transfer $2,496,149 to the General Capital Projects Fund to cash finance future capital projects, $85k to the Golf Course Fund, and $895,851 to the Replacement Fund. The General Fund's operational expenditure reserve increased to 87.75 days from the amended budget of 81.50 days, easily within the City's financial policy of 60 to 90 days. CAPITAL ASSETS The City's investment in capital assets for its governmental and business -type activities as of September 30, 2015, amounts to $601,218,400 (net of accumulated depreciation), This investment in capital assets includes land and improvements, buildings, vehicles, machinery and equipment, park land and facilities, roads and bridges. About 82% of the capital assets are governmental and 18% are business -type activities. There was a decrease of 2% in the investment in capital assets for the current fiscal year. Table 3 capital Assats at Year -and Net of Accumulated Depreciation Governmental Activities Business -rte Activities Total 2015 2014 2015 2014 2015 2014 Lara $131,973,606 $130,614,642 $4,072,882 $4,072,882 $136,046,488 $134,687,524 Buildings 102,299,610 105,633,070 - - 102,299,610 105,633,070 Tourers, tanks and pump stations - - 101,053,489 98,650,225 101,053,489 98,650,225 Other Improvements 234,039,688 247,355,482 342,832 355,096 234,382,520 247,710,578 Furniture and fixtures 614,6]6 593,747 - - 644,676 593,747 Vehicles 4,613,647 4,781,800 77,881 122,800 4,691,328 4,904,600 Machinery and equipment 3,566,010 3,676,557 1,943,015 1,911,045 5,509,025 5,587,602 CensimdOn in progress 14,408,875 9,892,227 2,182,389 4,585,888 16,591,264 14,278,115 Total $481.546.112 $502.30].525 $109.6]2.288 5109.89].938 $801.218.400 5812.045.461 The major governmental -type capital improvement projects and developer contributions during the current fiscal year included the following: Developer contributed right of way $ 5,438,894 Cottonwood Creek Trail 927,357 Administration software 810,437 Fire Station #2 reconstruction 599,387 Street construction: Ridgeview Drive -Alma to Stacy 2,878,706 FY14 Street & Alley Repair 1,169,232 Montgomery Boulevard extension 1,068,212 12 CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (UNAUDITED) Business -type capital improvement projects and developer contributions during the current fiscal year include the following Developer contributed water mains and sewer lines $ 3,136,580 Fountain Park Phase 1 82 water & sanitary sewer 1,194,755 Cottonwood Creek 21" sewer line 485,079 Ridgeview Drive waterline -Alma Drive to Stacy Road 99,593 Additional information on the City's capital assets can be found in Note 4 of this report. DEBT ADMINISTRATION As shown in Table 4, the City's total outstanding debt at September 30, 2015 was $190,291,256 of which $127,706,373 was governmental, $10,291,229 was business -type activities and $52,293,664 was component units'. Total gross bonded debt was $155,375,000 which includes $95,690,000 of General Obligation (G.O.) bonds backed by the full faith and credit of the government, $490,000 of Certificates of Obligation backed by taxes and revenue generated from the golf course, $6,735,000 secured solely by water and sewer revenue, and the component unit's total of $48,060,000 secured by future sales tax revenue and a $4,400,000 note payable. Other long-term debt relates to compensating absences, net pension liability, capital leases, deferred charges on refundings, and issuance premiums and discounts. In fiscal year 2015, the City issued $32,245,000 of G.O. Refunding and Improvement Bonds. The revenue bond debt for both component units relates to debt issued in order to support public infrastructure improvements and construction of the Allen Event Center. The notes payable debt is due to an loan agreement Allen Economic Development Corporation entered into in relation to the purchase of 31 acres of land. Total debt for the component units decreased by 4.8%. Total debt for the Allen Economic Development Corporation increased by 20% and the Allen Community Development Corporation debt decreased by 3.5%. T.W. 4 outtMing Dart 4 yeare„ l Wrestled other Long Tell Debt 13 Graemmenw Pc8v6i. avuneeHwe Amin. Co,noomunt Unit IgMl 2015 21114 2015 2014 am ZQ1g MIS 2014 Ore. Behead DW General E 95,698000 5 98245,000 $ - $ - S $ - $ 85,940,094 3 89,245,000 Obllgra on Bods CaNfiratad 490.000 WIND - - - 490,000 538000 Obligar an Bonds Revenue Bands _ 6,735,943 8515500 - - 6,7M,= 8.015,000 Payable 8a1. T. - - 48,080.000 58085,000 48080,990 5.0e5,0o9 Revenue Bonds Note Payable 4.b0.000 4.400.000 TeWI Ore. %,100,000 ii 87'38000 8,015,000 52,488000 58065,000 155,375,000 15},855,000 Balled Debt Omer LongTenn Debit Campe.skd 5,52],172 4,998425 831,820 578,119 - - 8,156992 5,5T2514 Pbeenc. Net Paoamn 18,74.452 234,922 2,327,709 - - - 21,088,181 234,922 Liability Capital leas - 7,537 370,811 435,58] - - 370,811 M$120 Main. Premiums 7,258749 4,608112 225,889 258910 (168348) (167,420) 7,318,282 4,696,602 W.1a Text Omer L" 31528]73 8,8461998 3,556,229 1,267,612 (188348) (167,420) 34,918,256 10,947,168 Tenn Deal Total E 127,706,373 E 1096219% $10291229 E 9,282,612 55220654 $4989]500 $ 190.291.258 $ 188.802.188 13 CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (UNAUDITED) The underlying credit ratings from both Moody's Investors Service and Standard and Poor's for the City's General Obligation Bonds, Certificates of Obligation, Water and Sewer Revenue Bonds, Community Development Corporation's Sales Tax Bonds and Economic Development Sales Tax Revenue Bonds are shown below in Table 5. Additional information on the City's long-term debt can be found in Note 5. Table 5 Bond Ratings ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES The economy continues to be moderately strong for the City of Allen and the North Central Texas area. Focused on having a balanced community, the City takes a proactive approach to economic development with its business recmitment and retention efforts, as well as with its variety of housing options. In addition, the City conservatively manages its budget. The fiscal year 2015-2016 budget reflects the commitment of the City Council and staff to provide services and facilities to our citizens while maintaining a strong financial position. The City revenues most impacted by a moderately strong economy are property taxes and sales taxes. The property tax revenue source experienced growth due to new construction and reappraisal increases of existing real property. For fiscal year 2015-2016, reappraisal values for existing real (residential and commercial) properties increased 7.84% compared to FY2015, while valuations for existing business personal property increased 0.62%. Additional tax abatements on commercial property had a small impact of reducing the taxable property valuation by 0.03%. New construction of residential and commercial property resulted in an increase in valuation of 2.61%. The overall increase in valuation from all categories was 11.10%; however, the property tax revenue increase was budgeted at 9.04% as a result of lowering the tax rate by one cent. Overall sales tax is expected to increase by about 1.94%. As the City's sizable retail developments near capacity the rate of growth of sales tax is expected to increase at a rate that is a combination of population growth and increases in prices for retail items. The rate of residential growth has steadily increased as the economy has recovered. The City estimates issuance of 450 single family permits in FY2016. The population of approximately 91,429 as of September 30, 2015 is expected to reach approximately 115,000 at build out in the next eleven years. The population projection at build out has been increased recently due to the construction of additional mufti -family units, changes to protected land use plans, and an overall increase in the density of the developments. The various infrastructure and operational needs of the City have resulted in the annual expenditure budget increasing from $157.34 million in FY2011. to $199.38 million for FY2016 for all funds combined. The certified assessed property value for 2015-2016 equates to an overall increase of approximately $1.017 billion (11.10%) from the preceding year. The FY2016 tax rate was set at $0.530 per $100 valuation. Of the total tax rate, $0.406273 is dedicated to operations and maintenance in the General Fund, and $0.123727 is dedicated to general obligation debt service. 14 Moody's Investors Standard & Service Poor's General Obligation Bonds Aai AAA Certificates of Obligation Aai AAA Water & Sewer Revenue Bonds Aa2 AAA CDC Sales Tax Revenue Bonds At EDC Sales Tac Revenue Bonds Aa3 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES The economy continues to be moderately strong for the City of Allen and the North Central Texas area. Focused on having a balanced community, the City takes a proactive approach to economic development with its business recmitment and retention efforts, as well as with its variety of housing options. In addition, the City conservatively manages its budget. The fiscal year 2015-2016 budget reflects the commitment of the City Council and staff to provide services and facilities to our citizens while maintaining a strong financial position. The City revenues most impacted by a moderately strong economy are property taxes and sales taxes. The property tax revenue source experienced growth due to new construction and reappraisal increases of existing real property. For fiscal year 2015-2016, reappraisal values for existing real (residential and commercial) properties increased 7.84% compared to FY2015, while valuations for existing business personal property increased 0.62%. Additional tax abatements on commercial property had a small impact of reducing the taxable property valuation by 0.03%. New construction of residential and commercial property resulted in an increase in valuation of 2.61%. The overall increase in valuation from all categories was 11.10%; however, the property tax revenue increase was budgeted at 9.04% as a result of lowering the tax rate by one cent. Overall sales tax is expected to increase by about 1.94%. As the City's sizable retail developments near capacity the rate of growth of sales tax is expected to increase at a rate that is a combination of population growth and increases in prices for retail items. The rate of residential growth has steadily increased as the economy has recovered. The City estimates issuance of 450 single family permits in FY2016. The population of approximately 91,429 as of September 30, 2015 is expected to reach approximately 115,000 at build out in the next eleven years. The population projection at build out has been increased recently due to the construction of additional mufti -family units, changes to protected land use plans, and an overall increase in the density of the developments. The various infrastructure and operational needs of the City have resulted in the annual expenditure budget increasing from $157.34 million in FY2011. to $199.38 million for FY2016 for all funds combined. The certified assessed property value for 2015-2016 equates to an overall increase of approximately $1.017 billion (11.10%) from the preceding year. The FY2016 tax rate was set at $0.530 per $100 valuation. Of the total tax rate, $0.406273 is dedicated to operations and maintenance in the General Fund, and $0.123727 is dedicated to general obligation debt service. 14 CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (UNAUDITED) Ad valorem taxes are the General Fund's largest revenue source and will contribute $41.239 million or 46.09% of the fund's budgeted revenues in FY2016. Appraisal values are established by the Central Appraisal District of Collin County, and collections are certified at 100% by the Collin County Tax Assessor -Collectors office. New retail development and population growth will continue to increase sales tax at a moderate rate of 3.29% over the revised FY2015. The General Fund ended 2014-2015 with an approximate increase of $1,447,148 as compared to the revised budgeted fund balance. This brings the ending fund balance to an equivalent 87.75 days of operating expenditures, which exceeds the amended estimate of 81.5 days, and is within the range of the City's financial policy of 60 to 90 days. The 2015-2016 General Fund expenditure budget reflects a 2.96% increase from the revised 2014-2015 budget. This is primarily due to adding over 18.6 fulltime equivalent position throughout various departments, an increase of 4.5% for health and dental budgeted expenses, implementation of a pay plan study recommendation for adjustments in employee pay ranges with particular emphasis on Public Safely employees, and continued increases in economic development incentives as two major retail developments continued to generate increased sales taxes pursuant to the development agreements. These changes will allow the City retain staff, to meet its strategic goals, and continue its commitment to maintaining a high level of service to the public. The City chose to not increase the water and sewer rates as proposed in the rates study, which was updated in 2012, because the fund balance is projected to end at the upper range of the policy without an increase to rates. The budget includes an increase in rates to the city from NTMWD. Also included in the FY2016 budget is $1.995 million to cash finance water and sewer capital projects related to water lines, sewer lines, sewer lift station maintenance, and pump station maintenance. The Water and Sewer Fund is expected to finish the fiscal year 2016 with approximately $11.829 million in working capital reserves resulting in 117.75 days of operating expenses in reserve, which is within the City policy of 90 to 120 days. This healthy balance is necessary to fund the future City and NTMWD capital projects, ongoing maintenance projects that are planned to ensure the water and sewer infrastructure will meet the demand when the City reaches build out, and also provides reserves that can be used during drought related watering restrictions that would have an impact on revenues. The Solid Waste Fund represents a stable operational service and staff continues its educational outreach programs through several key programs and events held throughout the year. Staff also continues to seek grant funding for future cycles. The City's current contract is with Community Waste Disposal (CWD) as the solid waste provider. No commercial CPI solid waste fee increases are planned in 2016. The contract includes an agreement to adjust the variable fuel adjustment fee (VFAF) on commercial accounts to a higher fuel cost starting point, which is beneficial to the City's commercial customers With the continuing decline in fuel costs, the VFAF will probably not be charged. The Solid Waste fund balance at the end of FY2016 is expected to be $2.62 million which is approximately 134 operating days of reserve and is greater than the City's policy of 90 to 120 days. The Drainage Fund is supported by drainage fees on utility bills and development inspection fees. The fund continues to sustain a fund balance which supports drainage maintenance, mosquito abatement, Texas Pollution Discharge Elimination System (TPDES), and capital improvement activities. The City's golf course, formerly called Chase Oaks, is in its third full year of operation of a redesigned course renamed as The Courses at Watters Creek. The renovated course opened in January 2013. The completion of the 33 holes has helped to improve the overall golf experience for the established players and create an enthusiastic environment for new golfers of all ages. There is an 18 hole course, a 9 hole course, 6 additional holes for short iron play, new putting greens, and a lighted driving range.. This last year of operations saw a decrease in revenue attributed to an exorbitant number of bad weather days. The budget anticipates an average number of bad weather days. Budgeted support from the General Fund was provided to the Golf Course, but was primarily necessary to cover depreciation and lease expenses. 15 CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (UNAUDITED) For 2015-2016, the Risk Management Fund reflects no changes in health care costs, due largely to restructuring the plans to shift health care liability to the employees and increased scrutiny in prescription claims. For FY2015, the City will incur a 1 % increase in costs from the revised FY2015 budget. For the FY2016 budget, a contribution of $220,000 is budgeted to be put into a trust fund for other post - employment benefits. This amount is determined from an actuarial study every two years. The FY2016 budget was decreased in both revenues and expenses by $1.5 million due to United Healthcare administering the city's claims, as well as, the city's reinsurance or stop loss. Prior to FY2016 the city would pay claims over the stop loss amounts and then get reimbursed. United Healthcare is able to manage the stop loss once claims have reached the stop loss threshold. Worker's compensation premiums will remain relatively flat since the Risk Administrator has increased training to address areas that had higher worker's compensation claims activity in the past. Property and liability insurance rates for fiscal year 2016 are expected to remain relatively flat as compared to fiscal year 2015 since there are no significant additions of newly insured property. The Risk Fund continues to be in good financial condition. The City of Allen's budget continues to be positively impacted by moderately strong growth and by conservative fiscal management. The 2015-2016 budget reflects the efforts of the governing body and city staff to address the need to provide services and facilities to support our vibrant and growing community, while maintaining a strong financial position Request for Information The financial report is designed to provide our citizens, customers, investors, and creditors with a general overview of the City's finances. If you have questions about this report or need any additional information, contact the Finance Department at 305 Century Parkway, Allen, Texas, 75013, or call (214)509-0626. 16 BASIC FINANCIAL STATEMENTS CITY OF AV PEpPI E FIRST RESPECT INTEGRITY DELIVER EXCEL CITY OF ALLEN, TEXAS 405,378,050 102.340,588 510,718,642 EXHIBIT 1 STATEMENT OF NET POSITION SEPTEMBER 30, 2015 062,381 344,421 1,206,782 1,849,234 Capital projects 1$383302 - 2$383,302 - Tounsm 3,848,160 PRIMARY GOVERNMENT 3.646.160 - Park aoguim1iand deWopmenl 1,509,934 - 1EN'So 0 GOVERNMENTAL BUSINESS -TYPE 430,537 COMPONENT 43.537 ACTNITIES ACTIWTIES TOTAL UNITS ASSETS Other purposes 843,888 - Cash and cash egu mects $ 37,732,610 $ 13,144,874 $ 50,8P,284 $ 10,]]0,348 Imestments 53,523,A2 17,876,118 71,398,890 16,286,217 Receivables fast of allowance $ (13,356,521) foruncylecubles) 8,158,362 8,550,115 14)06,4]7 3,119,]5] Internal balances (1,280,086) 1,280,085 - - Prepaidname and other aasets 471,131 5850 476,181 6,298 Imentones - 30,612 30,612 - Restncted cash and cash epuwalents - 1,305,613 1,385,813 - Caustalassets Iondepommule 148,382,481 6,255,271 152,637,752 0,993,086 Depreciable (net a depreciator) 315,163,631 10314171017 418,500,846 842,116 TOTALASSETS 506,151,901 151803,558 740,095,457 38917,822 DEFERRED OUTFLOWS OF RESOURCES Deferred charges on reasoning 2,119,420 269,600 2,389,032 - Deferreloulfi0wa0freaaices-Pension 5,245,105 651,402 5,096,587 TOTAL DEFERRED OUTFLOWS OF RESOURCES 7,381 921,088 8.285,619 LUUNLRIES Accounts payable 5,859,785 4,235,489 10,095,274 83.083 Accrued lialoldies 3,147,544 205,536 3,353,080 17,335 Accrued imered payable 457,214 56,192 523,408 204,590 Customer deposes - 1,66.018 1,686,018 - Unearned naenue 179,306 - 179,306 - percentage payable 109,007 74,595 183,882 28,701 Noncurrent habdibes Due within one year 12,190,075 1,692,987 13,883,042 2,881,852 Due in more than me War 115,516,290 8,588,262 124,114,560 49,611,802 TOTAL LIABILITIES 137,459309 16,559,059 150,018,388 53,174,303 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources - penman 1,327,042 160,828 1,491,871 TOTAL DEFERRED OUTFLOWS OF RESOURCES 1,327,042 184,029 1,491,871 NET POSITION Net awasomert in capital assets 405,378,050 102.340,588 510,718,642 9,635,202 Restricted for Debtservlce 062,381 344,421 1,206,782 1,849,234 Capital projects 1$383302 - 2$383,302 - Tounsm 3,848,160 - 3.646.160 - Park aoguim1iand deWopmenl 1,509,934 - 1EN'So 0 - Seem and federal 9rants 430,537 - 43.537 - TaxlncrementFinarrLg 1800,084 - 1,800,064 Other purposes 843,888 - 843,889 - Unnamded 18,876,003 33455745 5.331740 (24,340,957) TOTAL NET POSITION $ 456,730.083 $ 136.144754 $ 592 870837 $ (13,356,521) The Notes to Financial Statements are an integral part of this statement 17 CITY OF ALLEN, TEXAS STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30.2015 Generelrevenues - Tams: Property taxes, levied for general purycaes Sales taxes Frenchisetaxes Hotel motel tares Other Was Investmemeamings Mismllaneous Trensfers Total general revenues and transfer CHANGE IN NET POSITION NET POSITION, beginning of year, as restated NET POSITION, end of year TM Notes to Financial Statements are an integral pan of this statement 18 Cinemas for Operating Grants Capital Stands Expellees Services and Contributions And Contributions FunctionsfProgram Activities PRIMARY GOVERNMENT: Governmental Activities General government $ 24,484,248 $ ]05,064 $ 215,000 $ - Publicsafety 31,607,444 1,64],40] 323,003 - Pudicwor8s 18,349,569 233,808 2$360 10,552,610 Culture and recreation 32,407,934 9,1]],211 1,176,521 - Community development 2,861,704 3,021,708 12,683 - Interestonlong-term debt 3,921,989 Total governmental adle ies 113.812.886 14,785,198 1,749,567 10,552,610 Business -type Activities Water and sewer 32,304,828 34,135,]14 1'00,000 4,416,642 Solid waste 5,560,294 8,4]4,388 - - Drainage 914,322 1,465,044 - - GoMcoume 2.911.478 2,361,361 Tom business -type activities 41.890.720 44.436,528 1,000,000 4,416,842 TOTAL PRIMARY GOVERNMENT E 155.303.806 E 59.221.]26 _$ 2.749.507 E 14.969252 COMPONENT UNIT$: AIIen Economic Development Cororabon $ 4,107,657 $ - $ - $ - Alan Community Development CoWabon 5,335,116 TOTAL COMPONENT UNITS $ 9442,6]3 $ $ $ Generelrevenues - Tams: Property taxes, levied for general purycaes Sales taxes Frenchisetaxes Hotel motel tares Other Was Investmemeamings Mismllaneous Trensfers Total general revenues and transfer CHANGE IN NET POSITION NET POSITION, beginning of year, as restated NET POSITION, end of year TM Notes to Financial Statements are an integral pan of this statement 18 Net (Expense) Revenue and Chanes in Net Position EXHIBIT 2 Primary Government Gsysrnmental Business - Type COMPMN Activities Activities TOTAL UNITE $ (23,544,182) $ - $ (23,544,182) E - (2,8W,034) 18,141,683 - (29,63],034) - (7,54,791) - - (7,540,791) - (22,o ,202) 1,551,397 - (22,054,202) - 1]2,68] 184,051 - 1]2,88] - (3,Wl,989) 3,654,042 70,454 (3,921,969) (6,249,489) (8,525.511) 88883,001 (5.051.499) (06.525,511) 18,02,423 2,157,490 3,110,951 5,288,Ml 8,583,750 454572,593 - 587.1102.396 ],24],728 7,247,]28 - - $ H3.3565211 914,092 914,092 - - 550,722 550,722 - (550,m) (550,092) 8,162,450 8,162,450 - $ (86525.5111 $ 0162450 $ 08363.0811 E $ $ 5 - S (4407,557) (5,335,116) $ 5 $ L__19."2.6.]31 S K143,W6 S - $ 50,143,9$8 $ - 18,141,803 - 18,141,683 17,787,338 ],412,44] - ],412,44] - 1,w,160 - 1,544,160 - 1,551,397 - 1,051,397 - W9,7W 184,051 083,]8] 168,631 2,650,103 1,003,939 3,654,042 70,454 6,249.489 (6,249,489) 88883,001 (5.051.499) 83.831.W2 18,02,423 2,157,490 3,110,951 5,288,Ml 8,583,750 454572,593 133,029.803 587.1102.396 (21,940,2]11 $ 4W.730.083 $ 135.140.754 $ 592.8]0.03] $ H3.3565211 19 CITY OF ALLEN, TEXAS BALANCE SHEET GOVERNMENTALFUNDS SEPTEMBER 30, 2015 ASSETS Cash and cash equivalents Investments Receivables, net of allowances for uncollectibles: Atl valorem taxes Sales taxes Accounts receivable Accrued interest Other Special assessments Prepaid items TOTAL ASSETS LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES LIABILITIES Accounts payable Accrued liabilities Unearned revenue Retainage payable TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes TOTAL DEFERRED INFLOWS OF RESOURCES GENERAL DEBT CAPITAL GENERAL SERVICE PROJECTS $ 7,478,648 $ 1,270,448 $ 10,664,833 13,151,416 667 13,214,488 72,9]9 26,316 - 3,063,112 - - 75,870 22,146 50,356 2,288,090 - - - 4,401 1,486 $ 26 131 601 $ 1,319,5]5 $ 23,934,078 $ 3,948,273 $ - $ 1,085,231 1,719,327 - 385,809 2,400 - ]9,736 5.670.000 1. 50,776 ]2,9]9 26,316 ]2.9]9 26.316 FUND BALANCES Nonspendable Prepaid items 1,486 - - Restricted Debtservice - 1,293,259 - Capital projects - - 22,383,302 Tourism - Asset forfeiture State and federal grants Park acquisition and development - - - Tax increment financing agreement - - - Court technology 11,861 - - PEG feea 674,527 - - Photo red light enforcement 34,790 - - Cemetery tmst 58,007 - - Assgned Facilities maintenance 914,805 - - Other 6,225 - - Unassigned 18,686,921 TOTAL FUND BALANCES 20,388,622 1,293.259 22.383.302 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES $ 26,131,601 $ 1,319.575 $ 23,934,078 The Notes to Financial Statements are an integrel part of this statement 20 EXHIBIT 3 GENERAL OTHER TOTAL OBLIGATION GOVERNMENTAL GOVERNMENTAL BOND FUNDS FUNDS $ ],809,44] $ 3,023,230 $ 30,246,604 12,926,357 4,390.730 43,683,658 99,295 3,063,112 460,436 460,436 40,603 15,430 204,405 - 2,288,090 4,401 1,486 $ 201776,407 $ 7,889,826 $ 80,051,487 $ 476,365 $ 202,768 $ 5,712,637 3,646,160 - 58,974 2,164,110 64,483 - 176,906 179,306 29,351 1,509,934 1,509,934 109,087 505,716 1, WOW 438.648 8.165.140 11,861 99.295 - 34,790 99.295 1,486 1.293.259 20,270,691 - 42,653,993 - 3,646,160 3,646,160 - 64,483 64,483 - 430,537 430,537 - 1,509,934 1,509,934 - 1,800,064 1, WOW 11,861 674,527 - 34,790 - 58,007 - 914,805 - 6,225 18,688,921 20,270.691 7.451,178 71.787.052 $ 20,776,407 $ 7,889,826 $ 80,051,487 21 CITY OF ALLEN, TEXAS EXHIBIT 4 RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2015 Total fund balances- governmental funds $ 71,787,052 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the governmental funds balance sheet. 491,546,112 Funds comprising the net other post employment benefit asset are not cuff ant financial resources and therefore are not reported in the governmental funds balance sheet. 356,773 Interest payable on long-term debt does not require current financial resources, therefore interest payable is not reported as a liability in the governmental funds balance sheet. (457,214) Internal service funds are used by management to charge the cost of certain activfies, such as insurance and fleet management, to individual funds. The assets and liabilities of the internal service funds are net of the amount allocated to business -type activities ($1,280,086) and to capital assets ($7,252,548). 15,066,947 Revenues earned but not available within sixty days of the year end are not recognized as revenue on the fund financial statements. 99,295 Deferred outflows of resources and deferred inflows of resources related to the the implementation of GASB No. 68 are not reported in the fund financials. 3,918,063 Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the fund financial statements. (125,586,945) Net position of governmental activities $ 456,730,083 The Notes to Financial Statements are an integral pan of this statement. 22 CITY OF ALLEN AF E fIRST RESPECT INTEGRITY DELIVER EXCEL PEppl CITY OF ALLEN, TEXAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2015 REVENUES Ad valorem taxes, penalties and interest Franchise taxes Municipal sales tax Licenses, permits and fees Charges for services Fines Gifts and contributions Hotel l motel fees Intergovernmental Investment earnings Miscellaneous Total ravenuaa EXPENDITURES Current General government Public safety Publicvrorks Culture and recreation Communitytlevelopmenl Capital outlay Debt service Principal retirement Interest and fiscal charges Total expenditures Excess (defidency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Refunding bonds issued Premium on bontls issued Payment to refunded bond esum agent Transfers in Transfers out Proceeds from sale of capital assets Total other financing sources (uses) NET CHANGE IN FUND BALANCES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR The Notes to Financial Statements are an integral pad of this statement 23 GENERAL DEBT CAPITAL GENERAL SERVICE PROJECTS $ 36,623,546 It 13,010,674 $ - 7,412,447 - - 17,704,665 - - 2,993,829 - - 11,454,620 - 279,724 1,805,230 - - 797,103 11,826 - 2,621,300 204,791 39,926 154,011 1,517,173 1,754,526 80,525.230 13,050,600 4,809,661 22,982,774 - 96,651 30,454,701 - - 3,428,366 - 753,863 21,134,475 - 62,565 2,199,241 - - - - 3,532,297 7,637 9,315,000 - 23 4,247,448 80,207,117 13,562,446 4,445,376 318,113 (511,846) 364,185 - 24,815,000 - - 3,239,156 - - (27,782,010) - 5,353,099 643,257 3,646,149 (4,452,116) - - 17,086 918'89 915,403 3,646,149 1,236,182 403,557 4,010,334 19.152,M0 889,702 18,372,968 $ 20,388,622 $ 1,293,259 $ 22,383,302 EXHIBIT 5 GENERAL OTHER TOTAL OBLIGATION GOVERNMENTAL GOVERNMENTAL BOND FUNDS FUNDS $ - $ 543,620 $ 50,177,840 - - 7,412,467 - 437,018 18,141,683 - 140,722 3,134,551 - - 11,734,344 - - 1,805,230 - 215,000 1,012,103 - 1,544,160 1,544,160 - 937,611 3,570,737 131,722 46,564 577,014 32,245,000 148,742 3,420,41 131,722 4,013,437 102,530,550 110,417 806,756 23,996,598 3,194 273,415 30,731,310 684,209 22,360 4,888,798 783 1,342,693 22,540,516 - 681,639 2,880,880 3,023,148 - 6,555,45 - - 9,322,537 4,247,469 3,821,751 3,126,863 105,163,553 (3,690,029) 886,574 (2,633,003) 7,430,000 - 32,245,000 532,977 - 3,772,133 - - (27,782,010) - 69,060 9,711,565 (370,655) (25,000) (4,847,771) 2,499 19,585 7,592,322 46,559 13,118,502 3,902,293 933.133 10,485,499 16,368,396 6,518,045 61,301,553 $ 20,270,691 $ 7,451,178 $ 71,787,052 24 CITY OF ALLEN, TEXAS EXHIBIT 6 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30. 2015 Net change in fund balances -total governmental funds $ 10,465,499 Amounts reported for governmental activities in the statement of activities (3,772,133) are different because: 28,097,931 Governmental funds report capital outlays as expenditures. However, in the statement of 9,322,537 activities the cost of those assets is allocated over their estimated useful lives and reported 1,121,496 as depreciation expense. This is the amount of capital assets recorded in the current period. 7,238,171 Governmental funds do not recognize contributed capital assets. However, in the statement of activities the fair market value of those assets is recognized as revenue, then allocated over their estimated useful lives and reported as depreciation expense. 6,854,236 Depreciation expense on capital assets is reported in the statement of activities but does not require the use of current financial resources. Therefore, depreciation expense is not reported as expenditures in the governmental funds. (25,431,134) In governmental fund financial statements, the proceeds from sale of assets are shown as an increase in financial resources. However, in the statement of activities, the gain or loss is calculated and reported. (2,435) The proceeds from issuance of long-term debt provides current financial resources to governmental funds, while the payment of the principal of long-term debt consumes the current financial resources of governmental funds. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued. However, these amounts are amortized in the government -wide financial statements. Refunding bonds issued (32,245,009) Premium on bonds issued (3,772,133) Payment to refunding bond escrow agent 28,097,931 Bond and capital lease principal retirement 9,322,537 Amortization of bond premiums 1,121,496 Amortization of deferred charges on refundings (1,153,591) 1,371,240 Current year changes in long-term habilkies for compensated absences, pension, and the current year changes in the opeb asset do not require the use of current financial resources and, therefore, are not reported in governmental funds. 144,530 Current year changes in accrued interest payable do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. 41,630 Internal service funds are used by management to charge the costs of certain activities, such as insurance and fiest management, to individual funds. The net operating and non-operating income and transfers of the internal service funds is reported with governmental activities net of amounts allocated to business -type activities 1,489,607 Certain revenues in the government -wide statement of activities that do not provide current financial resources are not reported as revenue in the governmental funds. (33,854) Change in net positron of governmental acbvbies $ 2,157,490 The Notes to Financial Statements are an integral pan of this statement. 25 CITY OF ALLEN, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30,2015 EXHIBIT 7 SUSI NESSTYPE ACTMTIES ENTERPRISE FUNDS GOVERNMENTAL ACTIVITIES WATERNAND SOLID poll INTERNAL SERVICE SEWER WASR DRAINAGE COURSE TOTAL FUNDS ASSETS CURRENT ASSETS CRN ane caiA'Wrele,Ile S 19735,505 $ 1.uS,701 S 001.131 E 518.855 $ td1M,674 S 7 485003 IneuMenb 15]12480 1,11IIEG. ass... - 17.575.118 9610.114 R...... n N N allo..N r vIp11NCIbes. A=AA 7,999998 WCOSa haws - 8.367,912 - AwuMFIBMI 55.751 1,115 1,504 - 84371 38.623 01. - 127.762 - - 127.782 - InreMonae 30,912 - - - W612 - Pnpi,ine -am 50.50 112.872 F.Int CW a14. I... eE 1395919 11385,513 TeWeummle.. ss.952,750 3917,472 $7,990 539838 0991152 1747.915 NONCUIUENTASSEm CAPRALMSETS Lai 4,072,812 4,02,982 ComhucSon In triennia 2.112,389 2.182,350 705.187 OIMrIm"RINARnN - 4.1. - 725192 '—' Anis snit pump a W.. 179859,14 - - - 179,59,147 - "'MA .7,959 12,@3 alsm Bi$251 ITERS,51 MMIIMry MU I.Coneol 5232,338 12,585 449,950 1,023275 57la. 4,335159 TOYI ea,lim nada 192,314,711 2`,518 872.800 1.023.275 lw.338A04 157al,381 Lees. eau TIMING disne 4on (8345829) (18 Sd9) (582538) UGE721) (04384,1191 po.l' 31 Cepilel vol, on demmJebO d.1.10n 1[9,89712 5.520 380332 397,554 1[8,672.288 7252.54 Tomraneum,N nMa 1[.989782 Sam 380.332 397.554 IW,672,AS 7252.618 TOTAL ASSETS 1721241.532 3,623,OW 1,24Al2 951,460 150.603470 'U.M..163 DEFMMD OUTFLOWS OF RESOURCES CNe-d tlla,gee on refunding 299,550 - 282,934 .-it ..— d nn.—N-penal- 435,994 48,987 45.199 121,4381 951112 TOTAL DEFERRED OUTFLOWS OF RESOURCES 7.,998 09..7 45,1. 122,W 9210e8 LIAN UTES, DEFERRED INFLOWS OF RESOURCES, AND NET POSITION CUMENTUMIUVE9 A.U. ASMo'e 3120,508 2.,333 47.570 leassa 4135,40 147.14 AWued 9WII91es 12145 25.850 12.1 .7. 205,536 - FINIV ap No. 74,595 - - - 74.50 - Am,ed¢mPnnamedeN.--wnenl 377795 95,025 4,038 iwm 589.195 - rvuaN not. Wooed GNma 990.41 Pnyn9 Ro MIM. Voi Re ..n0e0cYeNe-wmM 975 000 - - - 975.000 - Cepal NVAs ..-wmM - - - 131.41 131,471 - Av In.. p.rel9. NEW - - 99192 - CuelamxWp..'ISON 1,851,863 31,155 1859018 TWI eanIR IYNI1Mn ."Al.8 481,511 099,879 40,550 7.1.7 11N,592 NONCURRENT LIASILITES Rerenue 5onda panda 5995989 - 5ass ass CapAW leans pan o, 398,31] 239,950 - NetWVmriaOlMY 11.5. 1738. 181,485 47.761 2.1070 - A¢,uadwmpenvMdaSnnma 1312]9 3.38] al. Zan. 45,]24 Tual nmwumM HIMNIMles 753133 177,551 1.,879 N22. 9,599122 TOTAL WYIl1TE5 1A518.651 598.502 297.958 TIMFE50 19.559 )ME 1,130,582 DEFERRED INFLOWS OF RESOURCES DefMa]Inflon of—u,we-,amyl 11001 12.313 1145 SO as 16IMM MTALOWERREDOU7FLOW8OFRESOUMN 11001 12313 11436 30,80 1.,812 NO POSITION Nn llnealmaM In oanul Roam, 101 WERE ano 390.2 29,74 103A0.MW 7252572 Ren Io„-oondlrVAW.nu4Nea1 TSM 421 372.41 - UIe.d 28,914160 3OMM 933,1. (1599721 32.175,999 law,. TOTALNUMO ON S 130696499 S 3,060.558 S 1,013517 S (128,935) S 194@9.388 $ 23,500.531 The Notes t0 Financial Statements are an integral pad at this statement. 26 CITY OF ALLEN, TEXAS EXHIBIT 8 RECONCILIATION OF THE STATEMENT OF NET POSITION OF PROPRIETARY FUNDS TO THE GOVERNMENT — WIDE STATEMENT OF NET POSITION AS OF SEPTEMBER 30, 2015 Amounts reported for business -type activities in the statement of net position are different because: Total net position per statement of net position $ 134,860,668 Internal service funds are used by management to charge the costs of replacing machinery and equipment, fleet management, workers compensation, property liability loss, medical and dental insurance, and health claims to individual funds. The assets and liabilities of internal service funds are included in the governmental activities in the government -wide statement of net position. The amount shown represents the net receivable from internal service funds allocated to business -type activities since the adoption of GASB 34. 1,280,086 Total net position of business -type activities The Notes to Finanual Statements are an Integral part of this statement. 27 $ 136,140,754 CITY OF ALLEN, TEXAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2015 EXHIBIT 9 BUSINEM-. FNSACnNnES ENTERPRISE FUNDS ..AND SOLID OOIF .a Wg81E DRAINGE COURSE TOTAL NOWCE FUNDS OP.NG PEVFNUEB ..,a-lonalez enJ zerv¢ez Wa,w sales f 19.X1,.[8 f - f - f $ 3 a., N1,e6 - - 13.N+.06 - 1N,ne - m.ad'.' Bexsm - am�e�m�m . N1, 11X114..z,aN 61 S.I.. x67.61 ua6,36 u.9�.0amea - I,Np,mX - M-1191 nNnumna Nawiu�...e In". v]teN IOezX :ase IB.epB 1 W30MX6,3v TOM np.,.8ne laMenuea INaro 14.21. 1WIND zarz.1H i8ia0.b] RnlaE EXPENSES P—'. avwa v.eW.iei 879.460 M]STi 1,.0918 184431 K9.B5v CanlMuvl ee,rvaz 31.07x.]07 4x8,1[0 73,M 1,.,3N 1DN9,@a MCMenana 08457 4013 311795 SI,SM B1'. - 81{pbe 181..7 79.533 30.]&1 3[,117 an SPS Depmtla n gISO 1. Bas x3,739 123.051 0816,3x3 I,SM,IDS an.z 1.:.S a1,91s 4.1 x073 TMIBpen4n9 v...... 8x,neX79 S,SE03W 914321 2A11,4M 41,.0em 12,76,11 OPERATNG INCOME(LOSS) 071,393 .3,818 S..YI (5%.X31 48.407 6318 NG ME HUES IEVENSES) 79794. 187,793 21s1. Vb - 1w61 11.81 - cainanazpavlmupnaay.N TOM1l nenp.rtllnp mnnuu M1apen.p OB,M31 21.510 &a. 15x781 T,181 INCOME (LOSS) BEFORE D SF4TA- CONUUNN NSS AND TRANSFERS 3,020950 07,28 553139 639ax1 00,.13 Mad CAPITAL CONMISUTIONS AND TRANSFERS DeaelymeM 1x48 12KON - - - I.... - Da6RcomnB.Ibna 318X6 - a1N.56 luno 5a..1,],0 555 TnnvlenlO WneannOe (X,060. 5111 II..i.5M) k63]81 18.a12.Y21 TWI upNl mnlX .....d In m (XX3San d.74 ) 1!003.) 5•,,1X1 n'.'.) Irises gINIGE IN NET POSITION 3, a.. (8x81001 (X1079) 15311 2.8940 1,831,03 NET PoSITON BEGINNING OF VEM A&RESTATED 12]$013. 047.850 161.56 n.'aj 2160X80 NETPo9mON, ENOOF YEAR 3 179,9.,460 3 OWO,.a 3 1,63.517 f 119.651 f 13X.60.6a 6 23, 509 N1 The Nates t0 Finandal Statements are an integral part of this statement. 28 CITY OF ALLEN, TEXAS EXHIBIT 10 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION OF PROPRIETARY FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2015 Amounts reported for business -type activities in the statement of activities are different because: Net change in fund net position -total proprietary funds $ 2,969,466 Internal service funds are used by management to charge the costs of replacing machinery and equipment, fleet management, workers compensation, property liability loss, medical and dental insurance, and health claims to individual funds. The net expenses of certain activities of internal service funds is allocated to business -type activities. 141,485 Change in net position of business -type activities $ 3,110,951 The Notes to Financial Statements are an integral part of this statement. 29 CITY OF ALLEN, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (62,019) 21,510 61,114 4,919 - (1.473.874) 61,114 1111 EXHIBIT 11 11,64,660) Therefore n lmm other lulls BUSINESS -TYPE ACTIVITIES - (1,2792%) 554,644 593,693 1,385,6% ENTERPRISEFUHM (4.966.578) (1,197,526) GOVERNMENTAL 12,64,03 (Eadi 21 315.113 Natcaeh preNdM Wished lnl nansaoUl financing Fe6Vlgu (4,86,329) (1,197,526) ACTIVITIES SSI.6M WATER AND SOLID CASH FLOWS FROM CAPITAL AND GOLF (43,094) INTERNAL (45188) SEWER WASTE DRAINAGE COURSE TOTAL SERVICE FUNDS CASH FLOM FROM OPERATING ACTIVITIES 2a11,341 (18,117) Principal ped an menus Cell maW,'Nee n':do'000) - - Cmnreceireahomcuclamen $ 19,084.&°0 S 6 77E $ 1464.881 $ 2,52,184 S 43.691 $ Cesn rearivea hon transactions with other funds (2579%) 33529 announced. . rmsVWKn of cal suets (2.61 (6,245) 12,889,584 Cron paid to dnpbyees for wheady (4,460388) 14E6,4651 (40,998) (1,289.0211 /6.&2,6301 (480.854) Cash paid far haler and seVlys (0,214,554) (4,822&21 (388.307) (1403.872) (26.906.515) 0,1]9,551) Casa psi i fwtlaims (121.794) 163419 Payment to refunded MM wanow spent 4,462318 - 18,116,000) Nat cash PreNd4C By hall no dilettanti acanOea 8,388,740 1406 782 589848 Rada 881 10.060.659 1563.491 MN CIMG MMT ES (62,019) 21,510 61,114 4,919 - (1.473.874) 61,114 1111 Result) 112.267 11,64,660) Therefore n lmm other lulls 39,249 - (1,2792%) 554,644 593,693 1,385,6% Thers(msaulmr11-rlun6s (4.966.578) (1,197,526) (606,218) 12,64,03 (Eadi 21 315.113 Natcaeh preNdM Wished lnl nansaoUl financing Fe6Vlgu (4,86,329) (1,197,526) 160.2781 SSI.6M 163494891 1,She 695 CASH FLOWS FROM CAPITAL AND 1,40,008 (43,094) (443,657) (45188) (122.62) (01,46) RELATED RMANCING AC7MTES 1,736.65 265,573 14,936 (Q142) 2a11,341 (18,117) Principal ped an menus Cell maW,'Nee n':do'000) - - - (1,280 =1 12.86 Interest and lees pad on longieml dell (257,996) 6,BO 21,165 - (2579%) 33529 announced. . rmsVWKn of cal suets (2.61 (6,245) (24,90) (28,807) (2734,67) (2861 Deposition of uynal assets 56939 - - 18Y - Cap"'knerepsTInent - - - (121.794) (121.794) 163419 Payment to refunded MM wanow spent 4,462318 - - - 5,214,162 64459 ComdCNons inn developer 1,26,06 S 50848 S 13975881 S 10,888.89 S 138(/.882 $ 64.46 Met cash used! In cap" and $ i S 64.400 S nlabd NungY aeSWtlee (2.640151 16.245) (24,943) 0505991 11109.797) (261,65) PVUaee IN'rxe4 wo ies Ploc front ss a all meluMles efinresMem mcunties Indwwtmiww.d. Net ern provided By (aced 1.) ma sate sctivi NET CHANGE IN CASH ANO CASH EOW VAUM CASH Mo CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR RECONCILIATION OF OPERATING WCOME (LOSS) TO NET CASH PROVIDED BY OPEMMNG ACTIVITIES fish C er&Yq ircome Noss) Adroitness ro,e¢nale operate ancient (low) to ret roan award by (rhea int and", aeai oepreuction and assists downae Clvnps in assets and listed, AqurMs TCNVaps, Other wassandrady Man ower Innocence D.Iencaoume«s-pension Accounts payable Redinepe Marche Aman lwardea Nelpansirmiaemry Conspiratorial down as Deposits DMeved strawys-paoioh T.1 answernsnb Ne cash pros a.a By (nand m) opsrw nB amnlw NONLASH INVESTING ACTIVITIES: CR geinlhelannalueWnnesanene MON4mH RNMCIMO ACTIVITIES CmNWllms N capital sante imm daveocers RacmnNaaen Or l own 0 the anywhere of not pesiaen cash am ®w eRawalents -eu rem R.... cash 9q W5n equivalents CASH ANO CASH EQUIVALENTS, END OF YEAR The Notes to Finan oal Statements are an integral part olihis statement. 11.411,8551 1W175 (62,019) 21,510 61,114 4,919 - (1.473.874) 61,114 1111 Result) 112.267 11,64,660) (40.5091 8,933 - (1,2792%) I61e27Q (703,264) 102.52 24,30 6,541 (89,88) 330.81 12,64,03 1351 315.113 512,315 15.1690 1,1551019 $ 12,121.599 S 1,459,701 S 401,131 $ 548,90 S 14.530,297 $ 1,40,008 S 19]756 S Si S 553.481 S (0936) $ 4.84491 S 68.216 5,63,910 625 22139 123,01 5,97110 1,66,634 (3,D22.56) 20,684 (2,922) - (2141,818) - (815) - - (015) - 18758 6,116 6,116 - (43,094) (443,657) (45188) (122.62) (01,46) 1,736.65 265,573 14,936 (Q142) 2a11,341 (18,117) (695/8) (88,378) - 12.86 774 714 6,BO 21,165 - Bill 33529 11.436 81.390 414.184 - 19.W3 am 4,30 24.18 55.70 - cosso 3,175 45,555 - 110,W1 12,313 6Di 30,933 163419 4,462318 553.85 38,165 14178 5,214,162 1495275 S B.M.7Q S 1.411 S 50848 S 13975881 S 10,888.89 S 1,563491 $ 64.46 S $ i S 64.400 S S 3,P$00 S $ 3 S 3.13fl0o S S 10.735,989 S IAMI.701 S 401,131 S 548.856 S 13.144674 S Tria W 11385,613 1.85,813 S 12121,599 $ 145 11 $ 401.131 S 518.88 $ 14510 287 $ ],46600 30 CITY OF ALLEN, TEXAS STATEMENT OF NET POSITION COMPONENT UNITS SEPTEMBER 30, 2015 66,741 563,322 EXHIBIT 12 Retainage payable ALLEN ALLEN 8,993,086 - 8,993,086 ECONOMIC COMMUNITY - 66,075 Improvements other than buildings DEVELOPMENT DEVELOPMENT Total capital assets 12,187,850 CORPORATION CORPORATION TOTALS ASSETS Capital assets, net of accumulated depreciation 9,635,202 9,635,202 CURRENT ASSETS 9,635,202 9,635,202 TOTAL ASSETS Cash and cash equivalents $ 5,976,111 $ 4,794,237 $ 10,770,348 Inves"ents 10,025,083 6,261,134 16,286,217 Sales tax receivable 1,531,556 1,531,556 3,063,112 Accrued interest receivable 35,676 20,969 K645 Prepaid items 6,298 6,298 Total current assets 17,574,724 12,607,896 30,182,620 NONCURRENT ASSETS 66,741 563,322 CAPITAL ASSETS Retainage payable - Land 8,993,086 - 8,993,086 Furniture and fixtures 66,075 - 66,075 Improvements other than buildings 3,128,689 3,128,689 Total capital assets 12,187,850 - 12,187,850 Less: accumulated depreciation (2,552,648) (2,552,648) Capital assets, net of accumulated depreciation 9,635,202 9,635,202 Total noncurrent assets 9,635,202 9,635,202 TOTAL ASSETS 27,209,926 12,607,896 39,817,822 LIABILITIES AND NET POSITION CURRENT LIABILITIES Accounts payable 66,741 563,322 630,063 Retainage payable - 28,701 28,701 Accrued interest payable 57,885 146,705 204,590 Accrued and other liabilities 17,335 - 17,335 Revenue bonds payable - current 1,491,852 1,190,000 2,687,852 Total current liabilities 1,633,813 1,928,728 3,562,541 NONCURRENT LIABILITIES Revenue bonds payable (net of unamorazed discounts) 19,465,373 30,146,429 49,611,802 Total noncurrent liabilities 19,465,373 30,146,429 49,611,802 TOTAL LIABILITIES 21,099,186 32,075,157 53,174,343 NET POSITION Invesanent in capital assets 9,635,202 - 9,635,202 Restricted for debt service 694,431 954,803 1,649,234 Unrestricted (4,218,893) (20,422,064) (24,640,957) TOTAL NET POSITION $ 6,110,740 $ (19,467,261) $ (13,356,521) The Notes to Financial Statements are an integral pad of this statement. 31 CITY OF ALLEN, TEXAS STATEMENT OF ACTIVITIES COMPONENT UNITS FOR THE YEAR ENDED SEPTEMBER 30, 2015 I::4:II-3YiFi Gerlerel revenues Interest on Inv6MCMe Mlsrellereous Total B-..I—.noes CHANGE IN NET POSITION NET POSITION, bell B of year NET FOSITION, and of year TM Notes to Fireanual Statements are an Integral pan of this statement. of f 8,80,Yfl $ 8,883,888 E 17,787,338 Net Expense) Revenue and dal 169,831 Prvovem Revenues Charlie. In Net Poi 70.454 COMPONENTUNITS 9.0883% 8.0.'0p35 18.025.423 ALIEN ALLEN Oedral ECONOMIC COMMUNITY 8583.150 1149,838 China lar Grants and DEVELOPMENT DEVELOPMENT E ... cons Services Containments CORPORATION CORPOMTON TOTALS FunMn9m,n m AcdvNes E 113IA.5211 COMPONENTUNITS Alen Economic Development Co,pmetion E 4.107557 S - E - 6 (4,107.W) S - E (4.107551) Alen community Oevtlommarm Corporation 5.335,116 (5,335,116) (51335,116) TOTAL COMPONENT UNITS E BM2.673 $ E f N.107.W a 153%1161 _Li .8731 Gerlerel revenues Interest on Inv6MCMe Mlsrellereous Total B-..I—.noes CHANGE IN NET POSITION NET POSITION, bell B of year NET FOSITION, and of year TM Notes to Fireanual Statements are an Integral pan of this statement. of f 8,80,Yfl $ 8,883,888 E 17,787,338 104.285 dal 169,831 18454 70.454 9.0883% 8.0.'0p35 18.025.423 4.960,031 3.822,919 8583.150 1149,838 (23,000.1801 (21.140.211) _L 8.110]40 E (18487.2811 E 113IA.5211 13X3 II3AI730 A1/N931NI 133dS3d 1Shc� N377b'-40A113 NOTES TO FINANCIAL STATEMENTS CITY OFALLEN AF PEDPIE F�RSt RESPECT INTEGRITY DELIVER EXCEL CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Statement The City of Allen (the City) was incorporated in 1953, under the provisions of Chapter 11, Title 28, Texas Revised Civil Statutes of 1925. In 1979, the City adopted a charter making it a home rule city operating under a Council -Manager form of government. The City provides such services as are authorized by its charter to advance the welfare, health, comfort, safety and convenience of its inhabitants. The accounting and reporting policies of the City relating to the funds included in the accompanying basic financial statements conform to accounting principles generally accepted in the United States of America applicable to state and local governments. Generally accepted accounting principles for local governments include those principles prescribed by the Governmental Accounting Standards Board (GASB), and the American Institute of Certified Public Accountants in the publication entitled Audits of State and Local Governmental Units. The more significant accounting policies of the City are described below. Financial Reporting Entity As required by accounting principles generally accepted in the United States of America, the financial statements of the City include the primary government and organizations for which the primary government is financially accountable and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The City is financially accountable for legally separate organizations if its officials appoint a voting majority of an organization's governing body and either it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose speck financial burdens on, the primary government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on it. A primary government has the ability to impose its will on an organization if it can significantly influence the programs, projects, or activities of, or the level of services performed or provided by, the organization A financial benefit or burden relationship exists if the primary government (a) is entitled to the organization's resources; (b) is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide financial support to, the organization; or (c) is obligated in some manner for the debt of the organization. Some organizations are included as component units because of their fiscal dependency on the primary government. An organization is fiscally dependent on the primary government if it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval by the primary government. The following entities were found to be component units of the City and are included in the basic financial statements: Allen Economic Development Corporation (AEDC) - The AEDC is responsible for aiding, promoting and furthering economic development within the City. Allen Community Development Corporation (ACDC) - The ACDC is responsible for supporting the improvements in community parks and recreation, streets and sidewalks, public safety and the community library 33 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED Financial Reporting Entity—Continued The members of both the AEDC's and ACDC's Boards of Directors are appointed by the City Council. Both the AEDC and ACDC are fiscally dependent upon the City as the City Council approves their budgets and must approve any debt issuance. However, the component units do not qualify for blending because the component services directly benefit the community rather than the City itself. The AEDC and ACDC are discretely presented as governmental fund types and do not issue separate financial statements. Basis of Presentation 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 component units. The effect of interfund activity, within the governmental and business -type activities columns, has been removed from these statements; however, interfund services provided and used are not eliminated in the process of consolidation. 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 fees and charges for support. Additionally, the primary government is reported separately from the legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given program are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific program. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given program and 2) operating or capital grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Taxes and other items not properly included among program revenues are reported instead as general revenues. Fund Financial Statements The City segregates transactions related to certain functions or activities in separate funds in order to aid financial management and to demonstrate legal compliance. Separate statements are presented for governmental funds and proprietary funds. These statements present each major fund as a separate column on the fund financial statements; all nonmajor funds are aggregated and presented in a single column. Governmental funds are those funds through which most governmental functions typically are financed. The measurement focus of governmental funds is on the sources, uses and balances of current financial resources. The City has presented the following major governmental funds: General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources not accounted for in other funds. All general tax revenues and other receipts that are not restricted by law or contractual agreement to some other fund are accounted for in this fund. General operating expenditures, fixed charges and capital improvement costs that are not paid through other funds are paid from the General Fund. 34 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES —CONTINUED Basis of Presentation — Continued Debt Service Fund - The Debt Service Fund is used to account for the accumulation of financial resources for the payment of principal, interest and related costs on general long-term debt paid primarily from taxes levied by the City. The fund balance of the Debt Service Fund is reserved to signify the amounts that are restricted exclusively for debt service expenditures. General Capital Projects Fund - The General Capital Projects Fund is used to account for resources used for the acquisition and/or construction of capital facilities by the City, except those financed by proprietary funds and not accounted for by another capital projects fund. General Obligation Bond Capital Projects Fund - To account for financing, acquisitions, and construction of improvements to City facilities and infrastructure not accounted for by other bond funds. Proprietary Funds are accounted for using the economic resources measurement focus and the accrual basis of accounting. The accounting objectives are determinations of net income, financial position and cash flow. All assets and liabilities are included on the Statement of Net Position. The City has presented the following major proprietary funds: Enterprise Funds: Water and Sewer Fund - The Water and Sewer Fund is used to account for the provision of water and sewer services to the residents of the City. Activities for the fund include administration, operations and maintenance of the water and sewer system and billing and collection activities. The fund also accounts for the accumulation of resources for, and the payment of, long-term debt principal and interest for water and sewer debt. All costs are financed through charges to utility customers with rates reviewed regularly and adjusted if necessary to ensure integrity of the fund. Solid Waste Fund - The Solid Waste Fund is used to account for the provision of solid waste services to residents of the City. Drainage Fund - The Drainage Fund is used to account for the provision of developing and maintaining proper drainage services to the residents of the City. Golf Course Fund - The Golf Course Fund is used to account for activities associated with the operations of The Courses at Watters Creek Golf Course purchased by the City in October 2004. 35 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED Basis of Presentation —Continued Internal Service Funds: Replacement Fund - The Replacement Fund is an internal service fund that accounts for the costs associated with the acquisition and replacement of vehicles, machinery, and equipment through the rental of such items to other departments. Risk Management Fund - The Risk Management Fund accounts for the costs associated with workers compensation, liability and property insurance and medical and dental programs established for City employees and their covered dependents. 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. Operating expenses for the proprietary funds include the cost of personnel and contractual services, supplies and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. Measurement Focus and Basis of Accounting Measurement focus refers to what is being measured. Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurement made, regardless of the measurement focus applied. The government-wide statements and fund financial statements for proprietary funds are reported using the economic resources measurement focus and the accrual basis of accounting. The economic resources measurement focus means all assets and liabilities (whether current or non - current) are included on the statement of net position and the operating statements present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized when earned, including unbilled water and sewer services which are accrued. Expenses are recognized at the time the liabilities are incurred. Governmental fund financial statements are reported using the current financial resources measurement focus and are accounted for using the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual; i.e., when they become both measurable and available. "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City considers all revenues as available if they are collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long- term debt which is recognized when due, and certain compensated absences and claims and judgments which are recognized when the obligations are expected to be liquidated with expendable available financial resources. The revenues susceptible to accrual are property and sales taxes, franchise taxes and interest income. Other receipts (special assessments) become measurable and available when cash is received by the City and are recognized as revenue at that time. 36 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES —CONTINUED Cash, Cash Equivalents and Investments State statutes and policy as established by the City Council authorize the City to invest in certificates of deposit, direct obligations of the U.S. Treasury, investment pools consisting of such U.S. Treasury obligations, repurchase agreements, commercial paper and mutual funds. Substantially all operating cash and cash equivalents are maintained in pooled cash and time deposit accounts. Interest income relating to pooled deposits is allocated to the individual funds based on each fund's pro rata share of total pooled deposits. For purposes of the statement of cash Flows, the proprietary funds consider all highly liquid investments (including restricted assets) with an original maturity of three months or less when purchased to be cash equivalents, as they are available for withdrawal on demand. Investments are recorded at amortized cost when original maturity at the time of purchase is less than one year or at market if greater than one year. Encumbrances Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of funds are recorded in order to reserve that portion of the applicable appropriation, is utilized in the governmental funds. Under the City's budgetary process, appropriations lapse at fiscal year-end. Encumbrances are reported as assigned fund balance because they do not constitute expenditures or liabilities. Property Taxes The City's property tax is levied each October 1 on the assessed value listed as of the prior January 1 for all real and certain personal property located within the City. Appraised values are established by the Central Appraisal District of Collin County at 100% of estimated market value and certified by the Appraisal Review Board. The assessed value upon which the 2014 levy was based is $9,034,079,516. Taxes are due on October 1 and am delinquent after the following January 31. The City is permitted by Article XI, Section 5 of the State of Texas Constitution to levy taxes up to $2.50 per $100 of assessed valuation for general governmental services, including the payment of principal and interest on general obligation long-term debt. The combined tax rate to finance general governmental services including the payment of principal and interest on long-term debt for the year ended September 30, 2015 was $0.540 per $100 of assessed valuation. In Texas, countywide central appraisal districts are required to assess all property within the appraisal district on the basis of 100% of its appraised value and are prohibited from applying any assessment ratios. The value of property within the appraisal district must be reviewed every three years; however, the City may, at its own expense, require annual reviews of appraised values. The City may challenge appraised values established by the appraisal district through various appeals and, if necessary, legal action. Under this legislation, the City continues to set tax rates on City property. However, if the effective maintenance and operations tax rate, increased by 8% excluding other contractual obligations, adjusted for new improvements, plus the calculated debt tax rate is less than the proposed city tax rate, then qualified voters of the City may petition for an election to determine whether to limit the tax rate to no more than the rollback tax rate. 37 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES —CONTINUED Interfund Receivables and Payables Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are reported as 'due to/from other funds". Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances". Transactions Between Funds and Between Funds and Component Units Intedund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are property applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as a reduction of expenditures/expenses in the fund reimbursed. All other interfund transactions, except transactions between the component units and the primary government are recorded as transfers. Transactions between the component units and the primary government are accounted for as external transactions (revenues and expenses). During the fiscal year ended September 30, 2015, ACDC contributed $395,307 and AEDC contributed $98,643 to the General Fund for administrative costs and for the Allen U.S.A. Celebration. These revenues were reflected as grants and contributions for the primary government in the government-wide statement of activities. Inventories and Prepaid Items Inventories, which are expended when consumed, are recorded using the average cost method, and are valued at cost. Prepaid items are for payments made by the City in the current year to provide services occurring in the subsequent fiscal year. Prepaid items are reported as nonspendable fund balance in the governmental funds in the fund level financial statements to signify that a portion of fund balance is not available for other subsequent expenditures. Special Assessments The City has the authority to make special assessments to property owners as part of the financing of capital improvements. Such assessments are recorded in the capital projects fund as receivables when assessed and are recognized as revenue when bath the measurable and available criteria have been met (generally when collected). Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements and in the fund financial statements for proprietary funds. All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated assets are valued at fair market value on the date donated. The costs of normal repairs and maintenance that do not add to the value of the asset or materially extend the asset lives are not capitalized. Renewals and betterments are capitalized. Interest has not been capitalized during the construction period on property, plant and equipment. 38 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES —CONTINUED Capital Assets — Continued Assets capitalized have an original cost of $5,000 or more and over one year of useful lite Depreciation has been calculated on each class of depreciable property using the straight-line method. Estimated useful lives are as follows. Buildings 15 - 40 Years Towers, tanks, and pump stations 30 Years Infrastructure 10 - 50 Years Machinery and equipment 3 -15 Years Vehicles 2 -15 years Library books 5 Years Furniture and fixture 5 Years Other improvements 2 - 30 Years The City has established the Replacement Fund to account for the replacement of the City-0wned vehicle, machinery, and equipment. Charges for use in the form of user payments are made by City departments to the Replacement Fund to provide for future acquisitions and replacements. Compensated Absences City employees earn vacation and sick leave, which may either be taken or accumulated, up to certain amounts, until paid upon retirement or termination. Upon termination or retirement, an employee is reimbursed up to a maximum number of hours of vacation pay and sick leave based upon the years of service. Accumulated vacation and sick leave is accrued when incurred in the government -wide, proprietary, and fiduciary fund financial statements. Pensions For purposes of measuring the net pension liability, pension related deferred outflows and inflows of resources, and pension expense, City specific information about its Fiduciary Net Position in the Texas Municipal Retirement System (TMRS) and additions toldeductions from the City's Fiduciary Net Position have been determined on the same basis as they are reported by TMRS. For this purpose, plan contributions are recognized in the period that compensation is reported for the employee, which is when contributions are legally due. Benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Information regarding the City's Total Pension Liability is obtained from TMRS through a report prepared for the City by TMRS consulting actuary, Gabriel Roeder Smith & Company, in compliance with Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. Deferred Outflowsllnflows of Resources In addition to assets, the statement of net position and/or balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outf lows of resources, represents a consumption of net positron that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditum) until then. The City has the following items that qualify for reporting in this category: • Deferred charges on refundings — A deferred charge 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. 0 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTEt. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED Deferred Outflows/inflows of Resources — Continued • Pension contributions after measurement date — These contributions are deferred and recognized in the following fiscal year. • Difference in projected and actual earnings on pension assets — This difference is deferred and amortized over a closed five year period. In addition to liabilities, the statement of net position and/or balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future penod(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has only two types of item that qualifies for reporting in this category. In the statement of net position, the City reports the difference in expected and actual pension experience. This is deferred and recognized over the estimated average remaining lives of all members determined as of the measurement date. In the balance sheet for the governmental funds, the City reports unavailable revenue for property taxes not received within 60 days of year end. Net Position Net position represents the difference between assets, liabilities, and deferred inflows and outflows. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition, construction or improvements of those assets, and adding back unspent proceeds. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislations adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. Fund Balance Fund balance classifications, under GASB 54 are nonspendable, restricted, committed, assigned, and unassigned. These classifications reflect not only the nature of funds, but also provide clarity to the level of restriction placed upon fund balance. Fund balance can have different levels of constraint, such as external versus internal compliance requirements. Unassigned fund balance is a residual classification within the General Fund. The General Fund should be the only fund that reports a positive unassigned balance. In all other funds, unassigned is limited to negative residual fund balance. The City classifies governmental fund balances as follows. Nonspendable — includes amounts that cannot be spent because they are either not in spendable forth, or, for legal or contractual reasons, must be kept intact. This classification includes inventories, prepaid items and long term receivables. 40 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES —CONTINUED Fund Balance — Continued Restricted -- includes fund balance amounts that are constrained for specific purposes which are externally imposed by providers, such as creditors or amounts restricted due to constitutional provisions or enabling legislation. This classification includes retirement of long term debt, construction programs, and other federal and state grants. Committed — includes fund balance amounts that are constrained for specific purposes that are internally imposed by the City through formal action of the highest level of decision making authority. Committed fund balance is reported pursuant to resolution passed by the City Council. Assigned — includes fund balance amounts that are self-imposed by the City to be used for a particular purpose. Fund balance win be assigned by the City Manager or the Chief Financial Officer. This classification includes insurance deductibles, encumbrances, program start-up costs, projected budget deficit for subsequent years and other legal uses. Unassigned -- includes residual positive fund balance within the General Fund which has not been classified within the other above mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund If expenditures exceed amounts restricted, committed, or assigned for those specific purposes. When multiple categories of fund balance are available for expenditure, the City will start with the most restricted category and spend those funds first before moving down to the next category with available funds. Minimum General Fund Unassigned Fund Balance - It is the goal of the City to achieve and maintain an unassigned General Fund balance that is within a range of 6010 90 days of annual expenditures. If unassigned General Fund balance falls below the goal or has a deficiency, the City will establish a timeframe and work plan to replenish the fund balance. The work plan may include tax increases, fee increases, reduction of services, and/or reduction of expenditures (i.e. hiring freeze, salary freeze, or reduction of travel/training). NOTE 2. DEPOSITS, INVESTMENTS AND INVESTMENT POLICIES Deposits — State statutes require that all deposits be fully collateralized by U.S. Government obligations or obligations of Texas and its agencies that have a market value of not less than the principal amount of the deposits. The City's demand deposits and certificates of deposit were fully insured or collateralized at September 30, 2015, with collateral required by state statutes. At yearend, the carrying amount of the City's deposits was $13,178,934 and the bank balance was $13,446,463. Of the bank balance, federal depository insurance covered $250,000 and the remainder was covered by collateral held by the pledging financial institution's agent in the City's name. The City's petty cash balance at September 30, 2015 was $46,978. The carrying amount of deposits for ACDC and AEDC, discretely presented component units, were $490,135 and $95,827, respectively, with no corresponding bank balances as they are pooled with the City's deposits. AEDC's petty cash balance at September 30, 2015 was $100. 41 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE 2. DEPOSITS, INVESTMENTS AND INVESTMENT POLICIES—CONTINUED Investments — State statutes authorize the City to invest in U.S. Government obligations, obligations of Texas and its agencies and fully collateralized repurchase agreements. The City, AEDC and ACDC invest in Texpool which is an investment fund authorized by the Texas Legislature and administered by the Texas State Treasury, The Texas Treasury Safekeeping Trust Company is trustee of Texpool and is a limited purpose trust company authorized pursuant to Texas Government Code. The purpose of Texpool is to allow for the pooling of public funds to provide a higher yield on the pooled investment than would be possible with the investment of the individual public entity's funds. Texpool investments are subject to the same investment policies maintained by the State Treasury for all state funds. The Legislature has authorized only certain investment instruments for public funds, including repurchase agreements, U.S. Treasury bills and bonds, securities of other U.S. Government agencies, commercial paper and other safe instruments. The investment in Texpool and any accrued interest may be redeemed at the City's discretion. The City's position in the pool is not materially different from the value of the pool shares. The table below identifies the investment types that are authorized for the City by the Public Funds Investment Act. (Government Code Chapter 2256). The table also identifies certain provisions of the City's investment policy that address interest rate risk, credit risk, and concentration of credit risk. Authorized Investment Type Certificates of Deposit Repurchase Agreements U. S. Treasure Obligations Municipal Investment Pool Commercial Bank Savings Account Money Market Mutual Fund U. S. Government Securities (non -callable) U. S. Government Securities (callable) U. S. Government Sponsored Corp. Instruments: non -callable U. S. Government Sponsored Corp. Instruments: callable Commercial Paper Bankers Acceptance Guaranteed Investment Contracts State or Local Governmental Obligations Disclosures Relating To Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Investments with interest rates that are fixed for longer periods of time are more likely to be subject to increased variability in their fair values due to changes in the market interest rates. The City manages its exposure to market price changes by avoiding over - concentration of assets in a specific maturity sector, limitation of average maturity of operating funds investments to less than eighteen months, and avoidance of over -concentration of assets in specific instruments other than U.S. Treasury Securities and authorized investment pools. 42 Maximum Maximum Maximum Percentage Investment Maturity of Portfolio In One Issuer 5 years 50% None 5 years 30% None 5 years 100% None 5 years 100% None 5 years 30% None 5 years 15% None 5 years 100% None 5 years 70% None 5 years 75% None 5 years 70% None 5 years 20% None 5 years 10% None 5 years 25% None 5 years 30% None Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Investments with interest rates that are fixed for longer periods of time are more likely to be subject to increased variability in their fair values due to changes in the market interest rates. The City manages its exposure to market price changes by avoiding over - concentration of assets in a specific maturity sector, limitation of average maturity of operating funds investments to less than eighteen months, and avoidance of over -concentration of assets in specific instruments other than U.S. Treasury Securities and authorized investment pools. 42 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE 2. DEPOSITS, INVESTMENTS AND INVESTMENT POLICIES—CONTINUED Disclosures Relating To Interest Rate Risk— Continued 8.77% 15,005,611 As of September 30, 2015, the City had the following investments: 8.41% 12,527,127 9.15% Fair Value Weighted Investment Primary Avg. Maturity Type Government AEDC ACDC Total (Mean:) FFCB $ 10,308,049 $ 2,891,814 $ 1,805,908 $ 15,005,611 2.83 FHLB 7,911,996 2,218,473 1,388,165 11,519,834 3.22 FHLMC 8,605,463 2,414,005 1,507.659 12,527,127 3.00 FNMA 8,252,883 2,315,099 1,445,888 12,013,870 2.81 Municipal Bond 659,105 184,892 115,474 959,471 0.84 Certificates of Deposd 35,861,394 - - 35,661,394 1.71 Texpool 39,051,310 5,880,184 4,304,102 49235,5% 0.11 Total $ 110,450,200 $ 15,905,267 $ 10,565,236 $ 136,920,703 Disclosures Relating To Credit Risk The City's Investment policy, in conjunction with state law, specifies the type of credit rating of all authorized investments. Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This type of risk is typically expressed in terms of the credit ratings issued by a nationally recognized statistical rating organization. The City reduces the risk of issuer default by limiting investments to those instruments allowed by the Public Funds Investment Act, Chapter 2256, Texas Government Code. The City's Investments in U.S. Agency securities (FHLB, FHLMC, and FNMA) are rated AA+ by Standard & Poor's and Ass by Moody's Investors Service. The City's investments in municipal bonds are rated AA- by Standard and Poor's and Aa3 by Moody's Investors Service. Investments in the Texas Local Government Pool (TexPool) carried a credit rating of AAAm by Standard & Poors as of September 30, 2015. Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The City's investment policy controls concentration of credit risk by limiting the amount of investment with a single issuer to no more than 35% of the total portfolio with the exception of State approved investment pools and U.S. Government Securities As of September 30, 2015, with the exception of funds invested at Texpool, the following table represents 5% or more of the City's investments. Issuer Investment Type FNMA Federal agency securities FFCB Federal agency securities FHLB Federal agency securities FHLMC Federal agency securities 43 Reported Amount Percentage $ 12,013,870 8.77% 15,005,611 10.96% 11,517,634 8.41% 12,527,127 9.15% CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE 2. DEPOSITS, INVESTMENTS AND INVESTMENT POLICIES—CONTINUED Custodial Credit Risk The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of failure of the counterparty, to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside parry. The City's investment policy minimizes custodial credit risk by requiring pledged securities to be in the name of the City. The Public Funds Investment Act does require that financial institutions secure deposits made by state or local governmental bodies by pledging securities in an undivided collateral pool held by a depository regulated under state law. The market value of the pledged securities of the collateral must always remain at least equivalent to the bank balance less the FDIC insurance. As of September 30, 2015, the City's deposits with financial institutions above the federal depository limits were fully collateralized. NOTE 3. RECEIVABLES Receivables at September 30, 2015 for both governmental and business -type activities, including the applicable allowances for uncollectible accounts, consist of the following: The Water and Sewer Fund accounts receivable include unbilled charges for services rendered through September 30, 2015. 44 PrcPBlry Saks Au,usd Tax Taxes AcmuMa In1snsd Assessmenk Omar Total Gsmral Fund 6246.245 53,083,112 $ - $ 75,870 $ - 52,288,090 §5,8]3.31] Dabl$e,vire 111,574 - - 22.146 - - 133,]20 General Capital Prgecs - - - 50,358 4.401 - 54,757 G O Bond Fund - - - 40,803 - - 40.603 Nonmalor Gowmmenlal Funds - - 460,438 15,430 - - 475,886 We end Seger - - 8,004.409 55,751 - - 0,000,240 Solo Wass, - - 300,038 7,116 - 127762 434,918 Drtme9e - - 60.036 1,504 - - 891540 b rn.1 S.,i Fund. - 30,823 38,623 Gross Rec .Wa . $7,819 3,063,112 0.832.899 307,399 4,401 2,415,a52 14,981,502 Less'. All.n. M, Unmlk ubles2( 58,5J- - (14,5811 (273,105) Total Net Recewabk., Pnmery Government 69,295 53,003,112 $ 8,818,418 5 307,399 $ 4.401 8,415,852 514,708,4A Component UndS $ P.A ,112 $ - 5 58,845 $ - 5 - $ 3.119.757 The Water and Sewer Fund accounts receivable include unbilled charges for services rendered through September 30, 2015. 44 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE4. CAPITALASSETS Capital asset activity for the year ended September 30, 2015 was as follows: Governmental Activities 45 Bala... Balance Septambar 2x Adfrolmi September 30, 2014 Rddmoro DMpoeill.ne Trenarare 2015 Governmental Funb> Generating depreciate not being depreciated: iat.tl: lantlantl land improvements $ 130,814,842 S 1,358,984 E - $ - $ 131,973,888 ('.On81r11000n In progress 9.400.923 7,901,930 13.599.5851 13.702,688 Total capital assets not being depreciated 140,014.90 9,260,094 13.599.5551 145,8]8,294 General oapdal seems being depreciated'. Buildings 131,330,347 - - - 131,33.347 Improvement. otM1er Man buildings 477,197,874 4,079,929 - 3,599,585 484,8]].388 Furniture and fixtures ],9]3,242 - - - ],9]3,242 vehicles 2,415,833 48,3]] (17,135) - 2,477,078 lustily books 1,599,188 263,59]- - 1,882,]85 Madhineny and equipment 11,0 M.885 439.610 (62,;00) 11,421,875 Total wmlal assets being depreciated 831,591,352 4,831,513 (79,05) 3.590.505 839,612,495 Less accumulated depreciation for'. Buildings (25,807,277) (3,333,480) - - (291 Improvements Met than buildings (230,379,245) (2,458,435) - - (20,837,680) Fumltum and Mums (],3]9,495) (539,998) - - (],919,493) whole, (2,105,02) (79,845) 17,135 - (2,187,982) Lib2rybooks (1,082,330) (201 - - (1,2]1,858) Machinery and equipment (9,34],]88) (810,074) 81 (1 0p9]495) Total accumulated depmoation (2]5,9]1,591) (25.431,134) ]],500 (301,325,225) Total generel capital aseete bang demeoaled, net 355.819,](51 (20.59x821) (8,05) 3,599,585 338,81],2]0 General capital asset, net $ 495,81 $ (11,330,]2]) S (2,435) S $ 484293,584 45 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE4. CAPITAL ASSETS—CONTINUED Business -Type Activities Water and Seepar Activities: Capital assets not being depreciated Land Balance $ - $ - Balance $ 4,072,882 September 30. 4,585,886 2,195,059 Adjustments/ September 30, (4,598,558) 2014 Additions Dispositions Transfers 2015 Iinternal Service Funds: being depreciated! 8,658,770 Intemal service funds assets (4,598,558) 6,255,271 Capital Assets Being depreciated: not being depredated Constrepmp in progress $ 291,903 $ 414,284 $ $ $ 706,187 Total capital assets Machinery and equipment 4,W,845 458,689 (71,196) not being deprecated 291,903 414,284 864,128 706,187 Internal service - 867,955 Total capital assets assets being depreuatetl being depreciated Vehicles 10,811,534 1,2.607 (145,090) - 11,693,051 Machinery and equipment 3,730,730 625,492 (21,069) 4,335,153 Total internal service Towers, tanks, 8 pumps stations (73,573,785) (5,331,873) - assets be, depreciated 14,542,284 1,652,099 (188,159) 161 Less accumulated - (3,729,997) Vehicles (741,327) depreGatan for 13,315 (790,274) Total accumulated Vehicles (6,370,118) (1,163,492) 145,090 - (7,388,520) Machmery and equipment (1,751,251) (363,141) 21,069 (2,093,323) Total accumulated Total capital assets depreaakon (8,121,369) (1.526,833) 166159 (8,481,843) Total Internal s se ce funds 4,598,558 102,833,511 Water and sewer adie ies capdal assets being depreciated net 8,420,895 125,466 6,54.381 Total Internal sernce funds $ 8,491 $ (3,934) $ - $ 108,888782 capital assets, net 6,712,798 539,750 7,252,548 Governmental activities capital assets, net $ 502,347,524 $ (10,798,977) $ (2,435) $ $ 491,54.112 Business -Type Activities Water and Seepar Activities: Capital assets not being depreciated Land $ 4,072,882 $ - $ - $ - $ 4,072,882 Construi in progress 4,585,886 2,195,059 (4,598,558) 2,182,389 Total capital assets not being depreciated! 8,658,770 2,195,059 (4,598,558) 6,255,271 Capital Assets Being depreciated: Towers, tanks, 8 pumps stations 172,224,009 3,136,580 - 4,598,558 179,959,147 Machinery and equipment 4,W,845 458,689 (71,196) - 5,232,338 Vehicles 864,128 20,271 (16,4M) - 867,955 Total capital assets being depreciated 177,932,982 3,615,540 (87,840) 4,598,558 186,059,440 Less accumulated depredation for Towers, tanks, 8 pumps stations (73,573,785) (5,331,873) - - (78,905,658) Machinery and equipment (3,392,415) (407,973) 70,391 - (3,729,997) Vehicles (741,327) (62,262) 13,315 (790,274) Total accumulated tlepreciabon (7.707,527) (5,802,108) 83,708 (83,425,929) Total capital assets being depreciated. net 100,225,455 (2,186,568) (3,934) 4,598,558 102,833,511 Water and sewer adie ies capital assets, net $ 108,884,225 $ 8,491 $ (3,934) $ - $ 108,888782 46 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE 4. CAPITAL ASSETS - CONTINUED Drainage Activities: Balance Balance Capital assets being depreciated: September 30, Machinery and equipment September 30, Other improvements 2014 Additions Dispositions 2015 Solid Waste Activities 31,379- 937,453 - 31,379 Capital assets being depreciated. 430,346 24,943 (9,900) 445,389 Machinery and equipment $ 8,392 $ 6,245 $ (2,042) $ 12,595 Vehicles 12,923 24,943 (9,900) 12,923 Total capital assets depreciation (501,870) (123,851) (625,721) being depreciated 21,315 6,245 (2,042) 25,518 Less accumulated depreciation for: (141,036) (12,264) - (153,300) Machinery and equipment (8,392) (625) 2,042 (6,975) Vehicles (12,923) (10,475) 9,900 (12,923) Total accumulated depreciation (21,315) (625) 2,042 (19,898) Solid waste activities capital assets, net $ $ 5,620 $ $ 5,620 Drainage Activities: Capital assets being depreciated: Capital assets being depreciated: Machinery and equipment $ 937,453 Other improvements $ 496,132 $ - $ - $ 496,132 Vehicles 31,379- 937,453 - 31,379 Machinery and equipment 430,346 24,943 (9,900) 445,389 Total capital assets Machinery and equipment (501,870) being depreciated 957,857 24,943 (9,900) 972,900 Less accumulated depreciation (501,870) (123,851) (625,721) depreciation for: capital assets, net Other improvements (141,036) (12,264) - (153,300) Vehicles (31,379) - - (31,379) Machinery and equipment (407,314) (10,475) 9,900 (407,889) Total accumulated depreciation (579,729) (22,739) 9,900 (592,568) Drainage activities capital assets, net $ 378,128 $ 2,204 $ $ 380,332 Golf Course Activities: Capital assets being depreciated: Machinery and equipment $ 937,453 $ 85,822 $ $ 1,023,275 Total capital assets being depreciated 937,453 85,822 1,023,275 Less accumulated depreciation for: Machinery and equipment (501,870) (123,851) (625,721) Total accumulated depreciation (501,870) (123,851) (625,721) Golf course activities capital assets, net 435,583 (38,029) 397,554 Business -type activities capital assets, net $109,697,936 $ (21,714) $ (3,934) $ 109,672,288 47 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE4. CAPITAL ASSETS—CONTINUED Component Units: Capital assets not being depreciated Land Capital assets being depreciated: Improvements other than buildings Fumgure and fixtures Total capital assets being depreciated Less accumulated depreciation for: Balance Balance September 30, September 30, 2014 Additions Dispoations 2015 (66,075) $ 3,973,042 $6,013,633 $ (993,589) $ 8,993,086 3,128,689 - - 3,128,689 66,075 66,075 Total capital assets being depreciated, net 3,194,764 3,194,764 Improvements other man buildings (2,333,240) (153,333) - (2,486,573) Fumiture and fixtures (66,075) (66,075) Total accumulated depredation (2,399,315) (153,333) (2,552,648) Total capital assets being depreciated, net 795,449 (153,333) 642,116 Component units capital assets, net $ 4,766,491 $5,660,300 $ (993,589) $ 9,635,202 Depreciation expense was charged as direct expense to programs of the primary government and component units as follows: Governmental activities: General government Public safety Public works Culture and recreation Community development Total depreciation expense- General capital assets Internal Service Funds Total depreciation expense- Governmental activities 48 $ 821,852 873,479 14,051,181 9,655,921 28,701 25,431,134 1,526,633 $ 26,957,767 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE4. CAPITAL ASSETS—CONTINUED Water and sewer $ 5,802,108 Solid waste 625 Drainage utility 22,739 Goff course 123,851 Total depreciation expense - Business -type activities 5,949,323 Component units Allen Economic Development Corporation $ 153,333 Outstanding commitments at September 30, 2015, under authorized construction contracts were $4,686,175. These outstanding commitments for capital projects will be funded from unexpended bond proceeds and additional general obligation bonds. NOTE 5. LONG-TERM DEBT At September 30, 2015, bonds payable consisted of the following individual issues: General Obligation Bonds: $1,595,000 Series 2006 Bonds due in annual installments of $50,000 to $115,000 through August 15, 2026; interest at 4.0% to 4.20% $11,145,000 Series 2007 Bonds due in annual installments of $380,000 to $815,D00 through August 15, 2027, interest at 4 0% to 5 0% $10,185,000 Series 2008 Bonds due in annual installments of $250,000 to $745,000 through August 15, 2028; interest at 15% to 4.60%. 49 $ 1,035,000 1,030,000 970,000 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTES. LONG-TERM DEBT -CONTINUED General Obligation Bonds - continued $15,400,000 Series 2009 Bonds due in annual installments of $435,000 to $1,140,000 through August 15, 2028; interest at 2.5% to 45% $ 11,720,000 $12,00,000 Series 2010 Bonds due in annual installments of $370,000 to $865,000 through August 15, 2029, interest at 2.0% to 4.0%. 9,570,000 $8,785,000 Sense 2010A Refunding Bonds due in annual installments of $110,000 to $970,000 through August 15, 2022, interest at 2 0% to 3.0%. 6,195,000 $8,840,000 Series 2011 Refunding and Improvement Bonds due in annual installments of $255,000 to $795,000 through August 15, 2030, interest at 2,0% to 4 25%. 5,895,000 $13,865,000 Series 2012 Refunding and Improvement Bands due in annual installments of $350,000 to $1,600,000 through August 15, 2024; interest at 2.0% to 5.0%. 12,315,000 $5,065,000 Series 2013 Bonds due in annual installments of $190,000 to $340,000 through August 15, 2032, interest at 2.0% to 3 5% 4,655,000 $10,595,000 Series 2014 Bonds due in annual installments of $375,000 to $740,000 through August 15, 2033; interest at 2.0% to 4.0% 10,220,000 $32,245,000 Series 2015 Refunding and Improvement Bonds due in annual installments of $160,000 to $3,605,000 through August 15, 2034; interest at 2 0% to 5.0% 32,085,000 $ 95,690,000 Certificates of Obligation: $765,000 Series 20048 Combination Tax 8 Revenue Goff Course Certificates of Obligation due in annual installments of $25,000 to $70,000 through September 1, 2024; interest at 4.875% to 5.50%. $ 490,000 $ 490,000 Water and Banner Revenue Bonds: $4,300,000 Series 2005 Bonds due in annual installments of $140,000 to $310,000 through June 1, 2025; interest at 3.75%to 6.625%. $ 210,000 $5,795,000 Series 2009 Refunding Bonds due installments $530,000 to $630,000 through June 1, 2019, interest at 1.2% to 3.5%. 2,395,000 $3,370,000 Series 2013 Refunding Bonds due installments $90,000 to $385,000 through June 1, 2025, interest al 2.0% to 3.0%. 3,115,000 $1,280,000 Series 2014 Refunding Bonds due installments $105,000 to $265,000 through June 1, 2024; interest at 2 1%. 1,015,000 $ 6,735,000 CITY OF ALLEN, TERAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE5. LONG-TERM DEBT—CONTINUED AEDC Sales Tax Revenue Bonds: $15,335,000 Series 2008 Sales Tax Revenue Bonds due in annual installments of $390,000 to $940,000 through September 1, 2032; interest at 3.50% to 4.50%. $ 11,690,000 $1,605,000 Series 2010A Sales Tax Revenue Bonds due in annual installments of $440,000 to $595,000 beginning September 1, 2023 through September 1, 2,295,000 2025; interest at 4.00%. 1,605,000 $5,165,000 Series 20108 Sales Tax Revenue Bonds due in annual Installments of $105,000 to $520,000 through September 1, 2023; interest at 1.35% to 5.10%. 3,300,000 AEDC Promissory Note: $4,400,000 Promissory Note due in annual installments 29,170,000 of $679,853 through June 11, 2022; Interest at 2.00% 4,400,000 $ $ 20,995,000 ACDC Sales Tax Revenue Bonds: $5,600,000 Sense 2006 Refunding Bonds due in annual installments of $290,000 to $785,000 through September 1, 2019; interest at 3.75% to 5.0%. $ 2,295,000 $32,835,000 Series 2008 Sales Tax Revenue Bonds due in annual installments of $345,000 to $2,785,000 through September 1, 2032; interest at 4.00% to 6 00%. 29,170,000 $ 31,465,000 The following is a summary of long -tens debt transactions, including current portion, of the City for the year ended September 30, 2015: atom. Men. Due Beginning End Wthm of Year In.... Deueaeee WY.. One Ymr Governmental Ardlvxles General Obligation Bolls $ 99,245,000 $ 32,245,000 $ (35,800,000) It 95,690,000 It 9,095,000 Ceref.tes of Oblige. 530,000 - (40,000) 490,000 40,000 Capital Wase oet,eble ],53] - (7,537) - - Premium✓dumun% 4.608,112 3,A2,133 (1,121.4%) 7,258,749 - Compensefedebsenoes 4,993,425 3,388,039 (2,85],292) 5,527,172 3,055,075 Municipal pension obligaton 231,822 - (23,1an) - - Net pension Iiabiliry 18.740.452 18,740452 Govemmmbl amviry long-term debt _L_j $ 58.145.824 E r40W1.24]I $ 12Z]Ofi 393 $ 12190,0]5 51 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTES. LONG-TERM DEBT—CONTINUED The general fund has typically been used to liquidate the liability for compensated absences for governmental activities. Balance Balance Due Beginning End widen of Year Increases Decreases of Year One Year Business Type ActW es Water and Sever Revenue Bonds E 81015,000 $ - $ (1,280,000) $ 8,735,000 E 975,000 Cagtel lease payable 435,502 57,023 (121]94) 370,811 131,471 Premmmsldismunle 255,911 - (30.022) 225,689 - Net pensionliability - 2,32],]09 - 2,327,709 - compensated absences 576,120 395,5]2 (339,872) 831,820 580,496 Business -type ac0v8y long-term debt $ 9,282,613 E 2,]80.304 $ (1.771,688) $ 10291,229 $ 1,692,967 Component UnN Allen community Development corporation Sales Tax Revenue Bonds $ 32,000,000 $ - $ (1,135,000) $ 31,465,000 $ 1,190,000 Premiumsrdecounta (12.500) (1,991) (128,571) ACDC Mg -term debt S 32,473,420 $ $ (1,136,991) $ 31,338,428 $ 1,190.000 Allen Economic Development Corporation sales Tax Revenue Bords S 1]465,000 $ - $ (B7D,000) $ 16,595,000 $ 900.000 Note payable - 4,400,000 - 4,400,000 591,052 PremWms/Eiscounts (40,840) 3,065 (3],7]5) AEDC long-term debt $ 17,424,160 $ 4,01)800 $ (888,935) S 20,95],225 $ 1/81,852 Component unit ong-tern debt $ 49897,580 S 4,401),1100 E ($003,820) E 52,293,854 $ 2,681852 Advance Refunding In 2015, the City issued $32,245,000 of general obligation refunding and improvement bonds to provide resources to purchase U.S. Government State and Local Government Series securities that were placed in an irrevocable trust for the purpose of generating resources for all future debt service payments of $26,525,000 of general obligation bonds in addition to providing $7,865,000 for projects. As a result, the refunded bonds are considered defeased and the liability has been removed from the governmental activities column of the statement of net position. This amount is being amortized over the remaining life of the refunded debt, which is shorter than the life of the new debt issued. The advance refunding was undertaken to reduce total debt service payments over the next 13 years by $$2,390,620 and resulted in an economic gain of $2,042,089. Annual Requirements to Retire Debt Obligations The City Intends to retire all of its general long-term liabilities, plus accrued interest, from ad valorem taxes and other current revenues. The proprietary fund type long-term debt will be repaid, plus accrued interest, from operating revenues of the Water and Sewer Fund. The annual aggregate maturities for each bond type for the years subsequent to September 30, 2015, are on the following pages. 52 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTES. LONG-TERM DEBT -CONTINUED Annual Requirements to Retire Debt Obligations- Continued General Obligation Bonds Annual debt service requirements to maturity for general obligation bonds, Including interest, are as follows: Governmental Ac8vi0es Fiscal Year Ending interest, are as follows: September 30 Principal Interest Total 2016 $ 9,095,000 $ 3,640,225 3 12,735,225 2017 8,715,000 3,405,170 12,120,170 2018 9,015,000 3,117,196 12,132,196 2019 8,570,000 2,743,714 11,313,714 2020 7,810,000 2,393,933 10,203,933 2021-2025 29,860,000 7,841,820 37,701,620 2026-2030 17,820,000 2,594,591 20,414,591 2031-2034 4,805,000 373,019 5A78 019 Tolel $ 95,690,000 $ 26,109,668 5 121,799,668 Certificates of Obligation Annual debt service requirements to maturity for the Certificates of Obligation, including interest, are as follows: Governmental Activities Fiscal Year Ending September 30 Principal Interest Total 2016 $ 40,000 $ 26,230 $ 68,230 2017 45,000 24,150 69,150 2018 45,000 21,810 66,810 2019 50,000 19,470 69,470 2020 55,000 16,820 71,820 2021-2025 255,000 35,845 290,845 Total $ 490,000 $ 144,325 $ 634,325 Water and Sewer Revenue Bonds Revenue bond debt service requirements to maturity, including interest, are as follows: Business -type Activities Fiscal Year Ending September 30 Principal Interest Total 2016 $ 975,000 $ 198,578 $ 1,173,576 2017 1,000,000 169,081 1,169,061 2018 1,040,000 141,675 1,181,675 2019 1,070,000 108,426 1.178,426 2020 455,000 74,177 529,177 2021-2025 2,195,000 175,366 2,370,366 Total $ 8,735,000 $ 867,301 1 7,602,301 53 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTES. LONG-TERM DEBT—CONTINUED Annual Requirements to Retire Debt Obligations — Continued AEDC Sales Tax and Revenue Bonds Sales Tax Revenue bond debt service requirements to maturity, including interest, are as follows: AEDC Fiscal Year Ending September 30 Principal Interest Total 2016 $ 900,000 $ 694,625 $ 1,594,625 2017 930,000 662,125 1,592,125 2018 970,000 627,500 1,597,500 2019 1,010,000 590,288 1,60D,288 2020 1,050,000 549,466 1,599,466 2021-2025 5,945,000 2,041,462 7,986,462 2026-2030 3,950,000 954,529 4,904,529 2031 -2032 1,840,000 125,100 1,965,100 Total $ 16,595,000 $ 6245,095 $ 22,640,095 AEDC Note Pavab/e The note payable debt service requirements to maturity, including interest, are as follows: AEDC Fiscal Year Ending September 30 September 30 Principal Interest Total 1,190,000 2016 $ 591,852 $ 841 $ 679,852 1,705,145 2m7 603,690 76,163 679,853 2,951,820 2018 615,763 64,089 679,852 2020 2019 628,080 51,774 679,854 8,420,000 2020 640,640 39,212 679,852 3,673,258 2021-2025 1,319,975 39,730 1,359,705 5,901,700 Total $ 4400,000 S 358,968 4,758,968 ACDC Sales Tax and Revenue Bonds Sales Tax Revenue bond debt service requirements to maturity, including interest, are as follows: ACDC Fiscal Year Ending September 30 Principal Interest Total 2016 $ 1,190,000 $ 1,760,455 $ 2,950,455 2017 1,245,000 1,705,145 2,950,145 2018 1,305,000 1,646,820 2,951,820 2019 1,370,000 1,583,420 2,953,420 2020 1,435,000 1,514,420 2,949,420 2021-2025 8,420,000 6,337,558 14,757,558 2026-2030 11,090,000 3,673,258 14,763,258 2031-2032 5,410,000 491,700 5,901,700 Total S 31,465,000 $ 18,712,775 $ 50,177,775 54 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTES. LONG-TERM DEBT—CONTINUED Annual Requirements to Retire Debt Obligations —Continued A schedule of authorized but unissued direct General Obligation Bonds as of September 30, 2015, is as follows: Date a Onginal Amount Issued m Issued Unissued Service Center Facilities 5/122007 14,500,000 12,500,000 - 2,000,000 Municipal Building 5/122007 1,700,000 1,450,000 250,000 - St.m 5/122007 27,200,000 25,20,000 1,950," - Perks 5122007 17,250," 13,800,000 3,450,000 - Public ArlProjects 5122007 1,390,000 1,155,000 235,000 - PublicSafety 5122007 15,855,000 13,875,000 1.980000 $ 97,395,000 $ 70,80.5,000 $ 7,865,000 $ 18,685,000 Water and Sewer Revenue Bonds The City is required by the applicable revenue bond indentures to pledge the net revenues of the Water and Sewer Enterprise Fund for the retirement of its outstanding revenue bonds, including interest thereon, and is required to maintain debt service funds and bond reserve funds for all such bonds outstanding. Funds aggregating $344,421 at September 30, 2015 are restricted within the Water and Sewer Enterprise Fund for servicing of the debt. The respective bond indentures require the City to make equal monthly payments to the restricted accounts to accumulate the annual principal and interest requirements as they become due. Water and Sewer Revenue Bonds and Refunding Bonds are payable solely from and, equally secured by, a first lien on and pledge of the net revenue of the City's combined waterworks and sanitary sewer systems. The ordinances authorizing the Revenue Bonds stipulate that the City will deposit, in addition to principal and interest requirements, certain amounts in a reserve fund. Amounts in the reserve fund are to be used to pay principal and interest on outstanding bonds at any time sufficient funds are not available in the bond interest and redemption fund. The bond indentures require that the City accumulate reserves to an amount equal to the average annual principal and interest requirements of all outstanding bonds secured by the net revenues of the system. Such reserves are funded up to the required level in equal monthly installments over a maximum five-year period, as defined in the indentures. Amounts in the reserve fund at September 30, 2015 of $1,385,813 are adequate to meet the reserve requirements. 55 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTES. LONG-TERM DEBT—CONTINUED Annual Requirements to Retire Debt Obligations— Continued Water and Sewer Revenue Bonds — Continued At September 30, 2015, restricted assets, which include Water and Sewer Revenue Bond Debt Service and Reserve Funds, were as follows: Revenue bond debt service $ 880,633 Revenue bond reserve fund 504,980 $ 1,385,613 Net position reserved for Water and Sewer revenue bond retirement is detailed as follows Restricted assets, revenue bond debt Service and reserve funds $ 1,385,613 Accrued interest, payable from restricted assets (66,192) Current maturities of revenue bonds, payable from restricted assets (975,000) Reserved for revenue bond principal and interest $ 344,421 The City is in compliance with the various requirements of the bond ordinances. This covenant requires that operating revenues, as defined, cover the current debt requirement including principal and interest by a minimum of 1.2 times. Such coverage at September 30, 2015 was 6.52 times. Capital Leases The City acquired office equipment under various leases accounted for as capital leases. As of September 30, 2015, the capitalized costs of the Governmental leased property and Business -type leased property under capital leases were $851,183 and $1,023,275, respectively. The terms of the leases range from 3 - 5 years and call for monthly and annual payments over the life of the leases. The future minimum lease payments under the capitalized leases and the net present value of the future minimum lease payments at September 30, 2015 are as follows: Fiscal Year Ending Business -type Activities September 30, Principal Interest Total 2016 $ 131,471 $ 11,664 $ 143,135 2017 132,013 6,673 138,686 2018 89,018 1,928 90,946 2019 12,011 470 12,481 2020 6,298 75 6,373 Total $ 370,811 $ 20,810 $ 391,621 FS:3 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTES. LONG-TERM DEBT—CONTINUED Annual Requirements to Retire Debt Obligations — Continued Operating Leases The City leases machinery and equipment under non -cancelable operating leases. Total costs for such leases were $366,769 for the fiscal year ended September 30, 2015. Future minimum lease payments, by year and in the aggregate, under the non -cancelable lease commitments are as follows: Fiscal Year Ending September 30, 2016 2017 2018 2019 Total Amount $ 275,046 86,030 65,280 16,510 $ 442,866 NOTE S. INTERFUND TRANSFERS All interfund transfers between the various funds are approved supplements to the operations of those funds. Individual fund operating transfers for fiscal year 2015 were as follows: Fund Transfers In Transfers Out Major Governmental Funds, General Fund $ 5,353,099 $ 4,452,116 General Capital Projects 3,646,149 - General Obligation Bonds - 370,655 Debt Service Fund 643,257 Total Major Governmental Funds 9,642,505 4,822,771 Nonmajor Governmental Funds: Grants and Special Revenue 69,060 - Hotel Occupancy Tax 25,000 Total Nonmajor Governmental Funds 69,060 25,000 Major Enterprise Funds Water and Sewer Fund 38,249 4,898,578 Solid Waste Fund - 1,337,526 Drainage Utility Fund - 606,278 Golf Course Fund 554,644 Total Major Enterprise Funds 592,893 6,842,382 Internal Service Funds: Replacement Fund 895,851 - Risk Management Fund 489,844 Total Internal Service Funds 1,385,695 Total Transfers $ 11,690,153 $ 11,690,153 57 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE 6. INTERFUND TRANSFERS—CONTINUED Transfers are used to 1) move amounts from funds receiving administrative and operating support to the appropriate fund incurring the administrative and operating costs and 2) to move unrestricted funds to finance various programs that the City must account for in other funds in accordance with budgetary authorizations, including amounts provided as subsidies or matching funds for various grant programs and to support cash financing of capital projects. The fund financial statements show: Governmental funds: Total transfers in of $9,711,565 include funding for capital projects, grant matching funds, and reimbursement for operating and administrative costs incurred to provide technology, procurement, human resources, building maintenance, financial and administrative support. Transfers out totaling $4,847,771 include cash financing of capital projects, support of programs recorded in non -major governmental funds and internal service funds. Proprietary funds: Total enterprise funds transfers in of $592,893 mainly represent amounts transferred into the Golf Course to support operations. The total transfer out of $6,842,382 represents the amount provided by other funds for technology, procurement, human resources, building maintenance, financial and administrative support. The internal service funds total transfer in of $1,385,695 represents the amounts needed for Fire department SCBA, and administrative support for the Risk Management Fund. NOTE7. RETIREMENTPLAN Plan Description The City participates as one of 860 plans in the nontraditional, joint contributory, hybrid defined benefit pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency created by the State of Texas and administered in accordance with the TMRS Act, Subfile G, Title 8, Texas Government Code (the TMRS Act) as an agent multiple -employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the System with a six -member Board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS's defined benefit pension plan is a tax -qualified plan under Section 401 (a) of the Internal Revenue Code. TMRS issues a publicly available comprehensive annual financial report (CAFR) that can be obtained at www.tmrs.com. All eligible employees of the city are required to participate in TMRS. Benefits Provided TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS At retirement, the benefit is calculated as fi the sum of the employee's contributions, with interest, and the city -financed monetary credits with interest were used to purchase an annuity. Members may choose to receive their retirement benefit in one of seven actuarially equivalent payments options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of the members deposits and 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 200% of the employee's accumulated contributions. 58 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30.2015 NOTE 7. RETIREMENT PLAN — CONTINUED Beginning in 1993, the City granted an annually repeating (automatic) basis a monetary credit referred to as an updated service credit (USC) which is a theoretical amount which takes into account salary Increases or plan improvements. If at any time during their career an employee earns a USC, this amount remains in their account earning interest at 5% until retirement. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the employer match plus employerfnarlced monetary credits, such as USC, with Interest were used to purchase an annuity. Additionally, initiated In 1993, the City provided on an annually repeating (automatic) basis cost of living adjustments (COLA) for retirees equal to a percentage of the change in the consumer price index (CPI). A summary of plan provisions for the City are as follows: Employee deposit rale 7% Matching ratio (City to employee) 2 to 1 Years required for vesting 5 Service retirement eligibility 20 years at arty age, 5 years at age 60 and above Updated Service Credit 75% Repeating Annuity Increase to retirees 50% of CPI Repeating Employees covered by benefit terms — At the December 31, 2014 valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficlaries currently receiving benefits 149 Inactive employees entitled to, but not yet receiving benefits 311 Active employees 689 Total 1149 Contributions The contribution rates for employees in TMRS are elther 5%, 6%, or 7% of employee gross earnings, and the city matching percentages are either 100%, 150%, or 200%, both as adopted by the governing body of the city. Under the state law governing TMRS, the contribution rate for each city is determined annually by the consulting actuary, using vire Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal year. For fiscal year 2015, the City made contributions of 13.95%, which provided for an additional voluntary contribution of .65 percentage points over the required contribution of 13.30% for the months in 2014 and 1.50 percentage points over the actuarially required contribution of 12.45% for the months in 2015. Net Pension Liability The City's Net Pension Liability (NPL) was measured as of December 31, 2014, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that dale. .11 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30.2015 NOTE 7. RETIREMENT PLAN — CONTINUED Actuarial assumptions — The Total Pension Liability in the December 31, 2014 actuarial valuation was determined using the following actuarial assumptions: Inflation 3.0% per year Overall payroll growth 3.0% per year Investment Rate of Return 7.0%, net of pension plan investment expense, including inflation Salary increases were based on a service -related table. Mortality rates for active members, retirees, and beneficiaries were based on the gender -distinct RP2000 Combined Healthy Mortality Table, with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements. For disabled annuitants, the gender -distinct RP2000 Disabled Retiree Mortality Table is used, with slight adjustments. Actuarial assumptions used in the December 31, 2014, valuation were based on the results of actuarial experience studies. This experience study was for the period January 1, 2006 through December 31, 2009, first used in the December 31, 2010 valuation. Healthy post-retirement mortality rates and annuity purchase rates were updated based on a Mortality Experience Investigation Study covering 2009 through 2011, and dated December 31, 2013. These assumptions were first used in the December 31, 2013 valuation, along with a change to the Entry Age Normal (EAN) actuarial cost method. Assumptions am reviewed annually. No additional changes were made for the 2014 valuation. The long-term expected rate of return on pension plan investments is 7.0%. The pension plan's policy in regard to the allocation of invested assets is established and may be amended by the TMRS Board of Trustees. Plan assets am managed on a total return basis with an emphasis on both capital appreciation as well as the production of income, in order to satisfy the short-term and long-term funding needs of TMRS. The long-term expected rate of return on pension plan investments was determined using a building- block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) am developed for each major asset class. These ranges am combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Long -Term Expected m Target Real Rate of Return Asset Class Allocation (Arithmetic) Domestic Equity 17.5% 4.80% International Equity 17.5% 6.05% Core Fixed Income 30.0% 1.50% Non -Core Fixed Income 10.0% 3.50% Real Return 5.0% 1.75% Real Estate 10.0% 5.25% Absolute Return 5.0% 4.25% Private Equity 5.0% 8.50% Total 100.0% m CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE7. RETIREMENT PLAN—CONTINUED Discount Rate— The discount rate used to measure the Total Pension Liability was 7.0%. The projection of cash flows used to determine the discount rate assumed that employee contributions will remain at the current 7% and employer contributions will be made at the rates specified in statute. Based on that assumption, the pension plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. Changes in the Net Pension Liability Balance at 12/31/2013 Changes for the year: Service cost Interest Change of benefit terms Difference between expected and actual experience Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Netchanges Balance at 12/31/2014 Increase (Decrease Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) - (b) $ 137,679,525 $ 116,193,427 $ 21,486,098 6,407,942 - 6,407,942 9,749,386 - 9,749,386 (1,791,341) - (1,791,341) - 5,455,902 (5,455,902) - 2,754,779 (2,754,779) - 6,648,346 (6,646,346) (3,213,118) (3,213,118) - - (69,397) 69,397 (5,706) 5,706 11,152,869 11,570,806 (417,937) $ 148,832,394 $ 127,764,233 $ 21,068,161 Sensitivity of the net pension liability to changes in the discount rate — The following presents the net pension liability of the City, calculated using the discount rate of 7.0%, as well as what the City's net pension liability would be if it were calculated using a discount rete that is 1 -percentage -point lower (6.0%) or 1 -percentage -point higher (8.0%) than the current rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate (6.0%) (7.0%) (8.0%) City's net pension liability $ 46,628,160 $ 21,068,161 $ 506,112 Pension Plan Fiduciary Net Position — Detailed information about the pension plan's Fiduciary Net Position is available in a separately -issued TMRS financial report. That report may be obtained on the Internet at www.tmre.com 61 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE7. RETIREMENT PLAN—CONTINUED Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended September 30, 2015, the City recognized pension expense of $5,341,681. At September 30, 2015, the City reported deferred outflows and inflows of resources related to pensions from the following sources: Differences between expected and actual experience Changes in actuarial assumptions Difference between projected and actual investment earnings Contributions subsequent to the measurement date Total Deferred Deferred Outflows of Inflows of Resources Resources $ - $ (1,491,871) 1,186,155 - 4,708,432 $ 5,896,587 $ (1,491,871) Deferred outflows of resources related to pensions resufling from contributions subsequent to the measurement date of $4,708,432 will be recognized as a reduction of the net pension liability for the measurement year ending December 31, 2015 (i.e. recognized in the city's financial statements September 30, 2016). Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Measurement yearended December3l: 2015 2016 2017 2018 2019 Total M. $ (2,431) (2,431) (2,431) (2,432) (293,991) $ (303,716) CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTES. WATER AND SEWER CONTRACTS In 1972, the City entered into a forty -year contract with the North Texas Municipal Water District (District) for the purchase of water. Under the terms of this contract, the City is obligated to make a minimum annual payment (adjusted annually) in return for a minimum volume of gallons of water per year. During 1998, the City was annexed into the North Texas Municipal Water District, which guaranteed the City a minimum volume of water. During the year ended September 30, 2015, the cost of water purchased under this contract was $12,383,088 In 1978, the City entered into a contract with the District for the transportation, treatment and disposal of sanitary sewage and other waste. The contract will continue in force at least until all bonds issued by the District pursuant to the contract have been paid in full and will remain in force thereafter throughout the useful life of the District's sanitary sewer system. The contract requires the City to pay varying amounts based on the costs associated with sewage transported and/or treated and disposed of. The cost includes the City's proportionate share of the District's operating and maintenance expenses and related debt service costs. During fiscal year 2015, the cost for transportation, treatment and disposal of sewage and other wastes was $6,849,761. NOTE 9. DEFERRED COMPENSATION PLAN As a result of legislative changes, all amounts of compensation deferred, all property and rights purchased, and all income, property or rights are (until paid or made available to the employee or other beneficiary) held in trust for the exclusive benefit of the participants and their beneficiaries, whereas, prior to these legislative changes, these amounts were solely the property and rights of the City subject only to the claims of the City's general creditors. As a result at September 30, 2015, the deferred compensation investments are not reported in the City's financial statements. NOTE 10. RISK MANAGEMENT Health and Dental Insurance The City provides health and dental insurance benefits to City employees under a modified self- insurance plan. Under the plan, the City and the employee pay a portion of a predetermined monthly premium, which is based on the estimated claims cost for the plan and the extent of medical coverage selected by the employee. To cover annual costs, premium payments are reported as operating revenues of the Risk Management Fund and operating expenditures/expenses of the participating funds. A commercial insurance carrier is utilized to adjudicate and pay medical claims on behalf of the City. The City's medical claims liability is limited by a stop loss insurance policy covering an individual's medical claims in excess of $125,000 per plan year. Aggregate stop loss coverage of $2,000,000 per plan year provides protection to limit claim liability for the plan as a whole. The liabilities for insurance claims reported are based on GASB No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. 63 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE10. RISK MANAGEMENT—CONTINUED Health and Dental Insurance — Continued These liabilities include an estimate for incurred but not reported claims. The estimated amount at September 30, 2015 was $983,434. Changes in the Risk Management liability during the past five fiscal years were as follows: Workers Compensation, Property and Liability Insurance The City participates in the Texas Municipal League Intergovernmental Risk Pool (TMLIRP) for workers compensation claims, liability (general, automobile, law enforcement, and errorslomissions), and property insurance. The cost is based on the pool's claims cost, which is adjusted to reflect the City's individual claims experience. As claims arise they are submitted to and paid by TMLIRP. To cover annual costs, premium payments are reported as operating revenues of the Risk Management Fund and operating expenditurestexpenses of the participating funds. The City has a workers' compensation deductible of $25,000 per occurrence, with an annual aggregate deductible of $282,222. During 2015, the City contributed $290,059 to the Risk Management Fund for workers' compensation. The City has various levels of insurance deductibles for property, liability, and automobile insurance with the maximum deductible set at $10,000. All insured claims are paid by TMLIRP, less the appropriate deductible. During 2015, the City contributed $590,845 for property and general liability. NOTE 11. OTHER POSTEMPLOYMENT BENEFITS (OPEB) Program Description In addition to the pension benefits described in Note 7, as required by state law the City makes health care benefits available to all retired employees through a single employer defined benefit medical plan. Retirees must make a one-time irrevocable decision to continue benefits at the time of retirement, after that their eligibility for this benefit ends. The retiree benefit consists of medical, dental and vision care until age 65. Due to the significant increase in retiree premium costs, the City elected to create a separate plan for retirees effective January 1, 2013. Employees who retired on or before December 31, 2012, were "grandfathered" and allowed to pay blended medical premium rates the same as COBRA participants which are the total cost of premiums (no City subsidy) plus 2% administration fees. They will also be subject to the same rate increases as COBRA participants. Retirees retiring on or after January 1, 2013, can elect health care coverage but will be required to pay the (higher) unblended rate. M., Balance at Current Year Claims Balance at Year Ending Beginning of and Changes in Claim End of September 30, Fiscal Year Estimates Payments Fiscal Year 2011 $ 739,965 $ 5,444,705 $ 5,459,311 $ 725,359 2012 725,359 6,631,188 6,524,565 831,982 2013 831,982 5,691,732 5,711,304 812,410 2014 812,410 7,054,662 6,931,808 935,264 2015 935,264 7,393,719 7,345,549 983,434 Workers Compensation, Property and Liability Insurance The City participates in the Texas Municipal League Intergovernmental Risk Pool (TMLIRP) for workers compensation claims, liability (general, automobile, law enforcement, and errorslomissions), and property insurance. The cost is based on the pool's claims cost, which is adjusted to reflect the City's individual claims experience. As claims arise they are submitted to and paid by TMLIRP. To cover annual costs, premium payments are reported as operating revenues of the Risk Management Fund and operating expenditurestexpenses of the participating funds. The City has a workers' compensation deductible of $25,000 per occurrence, with an annual aggregate deductible of $282,222. During 2015, the City contributed $290,059 to the Risk Management Fund for workers' compensation. The City has various levels of insurance deductibles for property, liability, and automobile insurance with the maximum deductible set at $10,000. All insured claims are paid by TMLIRP, less the appropriate deductible. During 2015, the City contributed $590,845 for property and general liability. NOTE 11. OTHER POSTEMPLOYMENT BENEFITS (OPEB) Program Description In addition to the pension benefits described in Note 7, as required by state law the City makes health care benefits available to all retired employees through a single employer defined benefit medical plan. Retirees must make a one-time irrevocable decision to continue benefits at the time of retirement, after that their eligibility for this benefit ends. The retiree benefit consists of medical, dental and vision care until age 65. Due to the significant increase in retiree premium costs, the City elected to create a separate plan for retirees effective January 1, 2013. Employees who retired on or before December 31, 2012, were "grandfathered" and allowed to pay blended medical premium rates the same as COBRA participants which are the total cost of premiums (no City subsidy) plus 2% administration fees. They will also be subject to the same rate increases as COBRA participants. Retirees retiring on or after January 1, 2013, can elect health care coverage but will be required to pay the (higher) unblended rate. M., CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE 11. OTHER POSTEMPLOYMENT BENEFITS (OPEB) —CONTINUED Program Description—Continued Current OPEB benefits are made on a payors -you -go basis from the Risk Management Fund. In 2014, retirees paid $181,216 in the form of premiums and incurred $313,559 in expenses. In 2015, retirees paid $128,370 in the form of premiums and incurred $287,229 in expenses. Funding Policy In October 2014, an actuarial study update was completed. This study estimated the actuarial accrued liability increased slightly from $2,790,177 to $970,603; therefore, the annual required contribution (ARC) decreased from $217,491 to ($25,684). The decrease in the ARC is because the City created a separate plan for retirees. Employees retiring on or after January 1, 2013 can elect health care coverage but will be required to pay a higher, unblended rate. In March 2011, the City established a Section 115 Trust (the Trust) to comply with the requirements of Governmental Accounting Standards Board Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits other than Pensions (OPER), for the purpose of funding and providing certain benefits to its eligible retirees and dependents. The single -employer defined benefit plan is created by City ordinance and appoints the City Manager as Plan Administrator for the program. The trust was established with Public Agency Retirement Services Company (PARS). Prior to establishment of the trust, the ARC was contributed to the Risk Management Fund where all medical costs are incurred. Net position of $4,923,896 available in the Risk Management Fund exceeds the $970,603 actuarial accrued liability, therefore, OPEB costs will continue to be covered by the Risk Management Fund until the funded ratio of the trust is more positive. The City has budgeted for annual actuarial study updates to determine if funding requirements need to be changed. Annual OPEB costs and NET OPEB Obligation The City's annual other postemployment benefit (OPEB) cost is calculated based on the annual required contribution of the City (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. Calculations are based on the OPEB benefits provided under the terms of the substantive plan in effect at the time of each valuation and on the pattern of sharing costs between the employer and plan members to that point. Annual required contribution (ARC) $ (25,684) Interest on net OPEB obligation (5,764) Adjustment to the ARC 7,499 Annual OPEB cost (23,949) Contributions made (217,540) Increase in OPEB obligation (asset) (241,489) Net OPEB obligation (asset), beginning of the year (115,284) Net OPEB obligation (asset), end of the year T__256 ,773) 65 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE 11. OTHER POSTEMPLOYMENT BENEFITS (OPEB) —CONTINUED Annual OPEB costs and NET OPEB Oblioation —Continued Three -Year Trend Information: Actuarial valuations for the OPEB plan involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations of the OPEB plan reflect a long-term perspective. Significant methods and assumptions used for this were: Investment return Discount Rate Amortization Method/Period Health Care Cost Trend Rate Retirement Rates Retiree/Spouse Participation Rate Mortality Actuarial Value of Assets Actuarial Cost Method Inflation Rate Schedule of Funding Information Actuarial valuation date Actuarial value of assets Actuarial Accrued Liability (AAL) Funded Ratio Unfunded Actuarial Accrued Liability (UAAL) Annual covered payroll UAAL as % of covered payroll 8.86% 500% level dollar, open, 30 years Avg. 5.8% Yrs 1-10, 60.08% Yrs 11-20, 44 1% Ages 50-552%, 56-60-5%, 60-64-15%, 65+ 100% 20%/40% RP 2000 EE/Combined Market value on valuation date Projected unit credit 5.8% Medical inflation and 5.52% dental inflation 10/1/14 $1,365,426 $970,603 140.7 ($394,823) $40,214,969 (.010%) 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 held in an irrevocable trust is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. U9 Annual Actual Percentage Net Fiscal OPEB Contribution of OPEB OPEB Year Cost Made Contributed Asset 2013 $ 217,592 $ 325,000 149% $ (114,161) 2014 $ 218,877 $ 220,000 101% $ (115,284) 2015 $ (23,949) $ 217,540 908% $ (356,773) Actuarial valuations for the OPEB plan involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations of the OPEB plan reflect a long-term perspective. Significant methods and assumptions used for this were: Investment return Discount Rate Amortization Method/Period Health Care Cost Trend Rate Retirement Rates Retiree/Spouse Participation Rate Mortality Actuarial Value of Assets Actuarial Cost Method Inflation Rate Schedule of Funding Information Actuarial valuation date Actuarial value of assets Actuarial Accrued Liability (AAL) Funded Ratio Unfunded Actuarial Accrued Liability (UAAL) Annual covered payroll UAAL as % of covered payroll 8.86% 500% level dollar, open, 30 years Avg. 5.8% Yrs 1-10, 60.08% Yrs 11-20, 44 1% Ages 50-552%, 56-60-5%, 60-64-15%, 65+ 100% 20%/40% RP 2000 EE/Combined Market value on valuation date Projected unit credit 5.8% Medical inflation and 5.52% dental inflation 10/1/14 $1,365,426 $970,603 140.7 ($394,823) $40,214,969 (.010%) 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 held in an irrevocable trust is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. U9 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2015 NOTE 11. OTHER POSTEMPLOYMENT BENEFITS (OPEB)—CONTINUED Annual OPEB costs and NET OPEB Obligation —Continued Supplemental Death Benefits Plan: Program Description The City also participates in the cost sharing multiple -employer defined benefit group -term life insurance plan operated by the Texas Municipal Retirement System (TMRS) known as the Supplemental Death Benefits Fund (SDBF). The City elected, by ordinance, to provide group -term life insurance coverage to both current and retired employees. The City may terminate coverage under and discontinue participation in the SDBF by adopting an ordinance before November 1 of any year to be effective the following January 1. The death benefit for active employees provides a lump -sum payment approximately equal to the employee's annual salary (calculated based on the employee's actual earnings, for the 12 -month period preceding the month of death). Retired employees are insured for $7,500 and this coverage is reported as an "other postemployment benefit" or (OPEB). Contributions and Funding Policy The City contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation. The rate is equal to the cost of providing one-year term life insurance. The funding policy for the SDBF program is to assure that adequate resources are available to meet all death benefit payments for the upcoming year; the intent is not to pre -fund retiree term life insurance during employee's entire careers. The City's contributions to the TMRS SDBF for retiree's for the years ended 2015, 2014, and 2013 were $56,423, $50,597, and $49,157, respectively, which equals the required contributions (ARC) each year. NOTE 12. COMMITMENTS AND CONTINGENT LIABILITIES Federal Grants The City participates in a number of State and Federal assisted grant programs. Amounts received or receivable from grant agencies 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 which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, 'd any, to be immaterial. Litigation The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. Economic Development Grant The City has several economic development agreements whereby it has agreed to pay a grants) to a developer and/or business in return for the design, construction, operating and/or managing of the business within the City of Allen. All grants are performance based and do not constitute a liability on the City's financial records. 67 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30. 2015 NOTE 13. CUMULATIVE CHANGE IN ACCOUNTING PRINCIPLE The City implemented GASB Statement No. 68, "Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27' and Statement No. 71, "Pension Transition for Contributions Made Subsequent to the Measurement Date — an Amendment of GASB Statement No. 68". These statements change the focus of pension accounting for employers from whether they are responsibly funding their plan over time to a point -in -time liability that is reflected in the employer's financial statements for any actuarially unfunded portion of pension benefits earned to date. The implementation of Statement Nos. 68 and 71 resulted restatement of beginning net position for the elimination of the previously reported net pension obligation, the recording of the beginning net pension liability and the beginning deferred outflow for contributions made after the measurement date. Applying this change results in the adjustment below: Net position at September 30, 2014, as previously reported Elimination of net pension obligation, as of September 30, 2014 Recording of net pension liability, as of September 30, 2014 Deferral for pension contributions, made after the measurement date Government -wide Statements Governmental Business -type Activities Activities $469,593,847 $134,924,738 234,922 (19,112,211) (2,373,885) 3,856,035 478,950 Net position, beginning of year, as restated $454,572,593 $133,029,803 Net position at September 30, 2014, as previously reported Recording of net pension liability, as of September 30, 2014 Deferral for pension contributions, made after the measurement date Fund Statements Water and Solid Sewer Waste Drainage Goff $128,766,772 $ 3,615,213 $1,193,035 $211,117 (1,585,404) (177,333) (164,698) (446,448) 319,867 35,778 33,229 90,074 Net position, beginning of year, as restated $127,501,235 $ 3,473,658 $1,061,566 $ 1145,257) REQUIRED SUPPLEMENTARY INFORMATION CITY OF Ar PEppl EFIRST RESPECT INTEGRITY DELIVER EXCEL CITY OF ALLEN, TEXAS SCHEDULE OF OPEB FUNDING PROGRESS AND CONTRIBUTIONS FOR THE YEAR ENDED SEPTEMBER 30.2016 EXHIBIT A-1 'Actuarial Accrued Liability **Unfunded Actuarial Accrued Liability M, Required Supplementary Information Schedule of Other Postemployment Benefits Funding Progress and Contributions Last Three Valuation Years (unaudited) Actuarial URAL as a Valuation Fiscal Year Value of Assets AAL` URAL" Funded Ratio Coveretl Payroll %of Date Covered Payroll 10/112012 2013 678,092 2,790,177 2,112,065 24.3% 34,304)23 6.2% 1WIM013 2014 1,065,372 2,790,177 1,724,805 38.2% 35,875,982 48% 10/1/2011 2015 1,385,428 970,603 (39,823) 140.7% 40,214,969 -10% 'Actuarial Accrued Liability **Unfunded Actuarial Accrued Liability M, CITY OF ALLEN, TEXAS SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS FOR THE MEASUREMENT YEAR ENDED DECEMBER 31, 2014 EXHIBIT A-2 2014' Total pension liability Service cost $ 6,407,942 Interest (on the total pension liability) 9,749,386 Changes in benefit terms - Diferrenoe in expected and actual experience (1,791,341) Change in assumptions - Benefit payments, including refunds of employee contributions (3,213,118) Net change in total pension liability 11,152,869 Total pension liability, beginning of year 137,679,525 Total pension liability, ending of year $ 148,832,394 Plan fiduciary net position Contributions -employer $ 5,455,902 Contributions -employee 2,754,779 Net investment income 6,648,346 Benefit payments, including refunds of employee contributions (3,213,118) Administrative expense (69,397) Other (5,706) Net change in plan fiduciary net position 11,570,806 Plan fiduciary net position - beginning 116,193,427 Plan fiduciary net position - ending $ 127,764,233 Net pension liability -ending $ 21,068,161 Plan fiduciary net postion as a % of total pension liability 83.51% Covered employee payroll $ 39,335,988 Net pension liability as a % of covered employee payroll 53.56% ' The schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 70 CITY OF ALLEN, TEXAS SCHEDULE OF CONTRIBUTIONS FOR THE YEAR ENDED SEPTEMBER 30, 2015 EXHIBIT A-3 2015' Actuarially determined contributions $ 5,785,220 Actual contributions (5,797,851) Contributions deficiency (excess) $ (12,431) City covered employee payroll $ 39,335,988 Ratio of actual contributions to covered payroll amount 14.74% ' The schedule is intended to show information for 10 years. Additional years will be displayed as they become available. Notes to Schedule Valuation Date Actuarial determined contribution rates are calculated as of December 31st each year and become effective in January, 12 months and a day later. Methods and Assumptions Used to Determine Contribution Rates: Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage of Payroll, Closed Remaining Amortization Period 19 years Asset Valuation Method 10 year smoothed market; 150% soft corridor Inflation 3.0% Salary Increases 3.5% to 12.0% including inflation Investment Rate of Return 7.0% Retirement Age Experience -based table of rates that are specific to the City's plan of benefits. Last updated for the 2010 valuation pursuant to an experience study of the period 2005 - 2009. Mortality RP2000 Combined Mortality Table with Blue Collar Adjustment with male rates multiplied by 109% and female rates multiplied by 103% and projected on a fully generational basis with scale BB. 71 CITY OF ALLEN, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2015 5,353,099 EXHIBIT A-0 5,353,099 - Transfersout (767,990) VARIANCE WITH (4,452,116) BUDGETED AMOUNTS 8,000 FINAL BUDGET - 17,086 5,586 Total other financing sources(uses) 4,593,109 POSITIVE 918,069 ORIGINAL FINAL ACTUAL (NEGATIVE) REVENUES 1,374,740 FUND BALANCES, BEGINNING OF YEAR 19,152,440 19,152,440 Ad valorem taxes, penalties and interest $ 36,362,212 $ 36,395,038 $ 36,623,546 $ 228,508 Municipal sales tax 17,702,308 17,952,931 17,704,865 (248,266) Franchisetaxes 7,057,329 7,230,686 7,412,447 181,761 Licenses, permits and fees 1,862,700 2,283,700 2,993,829 710,129 Charge for services 12,632,749 11,609,463 11,454,620 (154,843) Fines 1,987,912 1,654,295 1,805,230 150,935 Gigs and contributions 590,950 612,315 797,103 184,788 Investment earnings 139,900 162,000 204,791 42,791 Miscellaneous 1,317,894 1,399,467 1,528,999 129,532 Total revenues 79,653,954 79,299,895 80,525,230 1,225,335 EXPENDITURES Current: General government 25,295,377 24,775,304 22,990,334 1,784,970 Public safety 30,494,441 30,754,623 30,454,701 299,922 Publicwotks 3,461,346 3,999,212 3,428,366 570,846 Culture and recreation 22,756,453 21,940,468 21,134,475 805,993 Community development 2,299,780 2,281,329 2,199,241 82,088 Total expenditures 84,307,397 83,750,936 80,207,117 3,543,819 Excess (deficiency) of revenues over (under) expenditures (4,653,443) (4,451,041) 318,113 4)69,154 OTHER FINANCING SOURCES (USES) Transfers in 5,353,099 5,353,099 5,353,099 - Transfersout (767,990) (1,052,116) (4,452,116) (3,400,000) Sale of capital assets 8,000 11,500 17,086 5,586 Total other financing sources(uses) 4,593,109 4,312,483 918,069 (3,394,414) NET CHANGE IN FUND BALANCE (60,334) (138,558) 1,236,182 1,374,740 FUND BALANCES, BEGINNING OF YEAR 19,152,440 19,152,440 19,152,440 FUND BALANCES, END OF YEAR $ 19,092,106 $ 19,013,882 $ 20,388,622 $ 1,374,740 72 CITY OF ALLEN, TEXAS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED SEPTEMBER 30, 2015 BUDGETARY INFORMATION The City Council adheres to the following procedures in establishing the budgets reflected in the financial statements: 1. Each year the City Manager is required to submit to the City Council a proposed budget for the fiscal year beginning on the following October 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayers' comments. 3. Prior to October 1, the budget is legally enacted by the City Council through passage of an ordinance. 4. Annual budgets are legally adopted for the General Fund and Debt Service Fund on a basis consistent with accounting principles generally accepted in the United States of America. Formal budgetary integration is not employed for proprietary funds. However, the City does adopt an annual budget for those funds for managerial control. 5. The City Manager is authorized to adjust budgeted amounts; however, such revisions may not result in total expenditures (appropriations) in excess of budgeted expenditures without approval of the City Council. Therefore, the legal level of budgetary control is the combined total budgeted expenditures for all fund types. 6. Formal budgetary integration is not employed for Special Revenue Funds, Proprietary Funds or Capital Projects Funds. However, the City does adopt an annual budget for those funds for managerial control. 7. Budgetary data for the Special Revenue Funds and Capital Projects Funds has not been presented in the accompanying basic financial statements as such funds are budgeted over the life of the respective grant or project and not on an annual basis. Budgetary information for the Proprietary Funds has not been presented since reporting on such budgets is not legally required. The Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual — General Fund presents a comparison of budgetary data to actual results. The General Fund utilizes the same basis of accounting for both budgetary purposes and actual results. 73 CITY OFALLEN PEOPLE FIRSt RESPECT INTEGRITY DELIVER EXCEL COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES CITY OF ALL EN RESPECT INTEGRITY DELIVER EXCEL MAJOR GOVERNMENTAL FUNDS GENERALFUND The General Fund is used to account for resources associated with traditional governmental functions that are not required legally or by sound financial management to be accounted for in another fund. DEBT SERVICE FUND The Debt Service Fund is used to account for the accumulation of resources for and the payment of general obligation bonds, certificate of obligation bonds, and interest from governmental resources. MAJOR CAPITAL PROJECTS FUNDS The Capital Projects Funds account for all resources used for the acquisition and/or construction of major capital facilities by the City, except those financed by proprietary funds and trust funds. The following Capital Projects Funds are classified as major funds: General Capital Projects Fund — To account for the acquisition and/or construction of capital facilities and infrastructure, except those financed by proprietary and trust funds and not accounted for by the other capital project funds. Proceeds from nonrecurring revenue sources are allocated to this fund General Obligation Bond Fund — To account for bond proceeds used for financing, acquisitions, and construction of improvements to City facilities and infrastructure not accounted for by other bond funds. Proceeds from the sale of general obligation bonds provide financing for this fund. 74 CITY OF ALLEN, TEXAS EXHIBIT B-1 COMPARATIVE BALANCE SHEETS GENERALFUND SEPTEMBER 30, 2015 AND 2014 2015 2014 ASSETS Cash and cash equivalents Investments Receivables: Ad valorem taxes (net of allowances for uncollectibles of $173,266 in 2015 and $268,708 in 2014) Sales taxes Other, net Accrued interest Prepaid items TOTAL ASSETS LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCE LIABILITIES Accounts payable Accrued liabilities Unearned revenue TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenue -property taxes TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES Nonspendable Prepaid items Restricted Court technology Juvenile case manager PEG fees Photo red light enforcement Child safety fees Cemetery trust Assigned Facilities maintenance Other Unassigned TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCE $ 7,478,648 $ 7,237,090 13,151,416 11,495,067 72,979 3,063,112 2,288,090 75,870 1,486 $ 26,131,601 $ 3,948,273 1,719,327 2,400 5,670,000 72,979 101,053 2,872,313 2,021,208 72,267 4,767 $ 23,803,763 $ 3,017,140 1,532,630 500 4,550,270 101,053 72,979 101,053 1,486 4,767 11,861 25,614 674,527 632,143 34,790 38,340 58,007 56,141 914,805 600,000 6,225 148,200 18,686,921 17,647,235 20,388,622 19,152,440 $ 26,131,601 $ 23,803,763 75 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GENERALFUND FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 REVENUES Ad valorem taxes, penalties and interest Franchise taxes Municipal sales tax Licenses, permits and fees Charges for services Fines Gifts and conhibu8ons Intergovernmental Investment earnings Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Public vrorks Culture and recreation Community development Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess of revenues over expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Sale of capital assets Total other financing sources (uses) NET CHANGE IN FUND BALANCES FUND BALANCE, BEGINNING OF YEAR FUND BALANCE, END OF YEAR 76 EXHIBIT B-2 2015 2014 $ 36,623,546 $ 33,936,634 7,412,447 6,973,705 17,704,665 17,592,860 2,993,829 2,863,226 11,454,620 10,300,677 1,805,230 2,160,168 797,103 815,408 11,826 11,826 204,791 154,788 1,517,173 2,023,573 80,525,230 76,832,865 22,982,774 20,469,625 30,454,701 29,025,421 3,428,366 3,489,328 21,134,475 20,326,175 2,199,241 2,031,281 7,537 9,986 23 94 80,207,117 75,351,910 318,113 1,480,955 5,353,099 5,314,988 (4,452,116) (4,191,984) 17,086 15,829 918,069 1,138,833 1,236,182 2,619,788 19,152,440 16,532,652 $ 20,388,622 $ 19,152,440 CITY OF ALLEN, TEXAS EXHIBIT B-3 COMPARATIVE BALANCE SHEETS DEBT SERVICE FUND SEPTEMBER 30, 2015 AND 2014 2015 2014 ASSETS Cash and cash equivalents $ 1,270,446 $ 668,533 Investments 667 200,427 Receivables: Ad valorem taxes (net of allowances for uncollectibles of $85,258 in 2015 and $121,529 in 2014) 26,316 32,096 Accrued interest receivable 22,146 20,742 Total assets $ 1,319,575 $ 921,798 DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes 26,316 $ 32,096 Total deferred inflows of resources 26,316 32,096 FUND BALANCE Restricted for debt service 1,293,259 889,702 TOTAL DEFERRED INFLOWS OF RESOURCES AND FUND BALANCE $ 1,319,575 $ 921,798 77 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES DEBT SERVICE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 REVENUES Ad valorem taxes Investment earnings Total revenues EXPENDITURES Principal retirement Interest and fiscal charges Total expenditures Deficiency of revenues under expenditures OTHER FINANCING SOURCES(USES) Issuance of refunding bonds Premium on issuance of bonds Payment to refund bond escrow agent Transfers in Total other financing sources (uses) NET CHANGE IN FUND BALANCES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR 78 EXHIBIT B4 2015 2014 $ 13,010,674 $ 11,678,213 39,926 46,941 13,050,600 11,725,154 9,315,000 8,355,000 4,247,446 3,882,300 13,562,446 12,237,300 (511,846) (512,146) 24,815,000 - 3,239,156 - (27,782,010) - 643,257 500,000 915,403 500,000 403,557 (12,146) 889,702 901,848 $ 1,293,259 $ 889,702 CITY OF ALLEN, TEXAS EXHIBIT B-5 BUDGETARY COMPARISON SCHEDULE $13,010,674 DEBT SERVICE FUND Investment earnings FOR THE YEAR ENDED SEPTEMBER 30, 2015 36,500 39,926 3,426 Total revenues VARIANCE 13,013,948 WITH FINAL BUDGETED AMOUNTS BUDGET POSITIVE ORIGINAL FINAL ACTUAL (NEGATIVE) REVENUES Ad valorem hazes $ 12,977,448 $12,977,448 $13,010,674 $ 33,226 Investment earnings 43,700 36,500 39,926 3,426 Total revenues 13,021,148 13,013,948 13,050,600 36,652 EXPENDITURES Principal retirement 8,355,000 9,315,000 9,315,000 - interestandfiscelcharges 3,935,300 3,652,618 4,247,446 (594,828) Total expenditures 12,290,300 12,967,618 13,562446 (594,828) OTHER FINANCING SOURCES Issuance of refunding bonds - - 24,815,000 24,815,000 Premium on issuance of bonds - - 3,239,156 3,239,156 Payment to refund bond escrow agent - - (27,782,010) (27,782,010) Transfers in 500,000 643,257 643,257 Total other financing sources 500,000 643,257 915,403 272,146 NET CHANGE IN FUND BALANCES 1,230,848 689,587 403,557 (286,030) FUND BALANCE, BEGINNING OF YEAR 889,702 889,702 889,702 FUND BALANCE, END OF YEAR $ 2,120,550 $ 1,579,289 $ 1.293,259 $ (286,030) 79 CITY OF ALLEN, TEXAS COMPARATIVE BALANCE SHEETS GENERAL CAPITAL PROJECTS FUND SEPTEMBER 30, 2015 AND 2014 ASSETS Cash and cash equivalents Investments Accrued interest receivable Special assessments receivable Total assets LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable Retainage payable Accrued liabilities Total liabilities FUND BALANCES Restricted for capital projects Total fund balances TOTAL LIABILITIES AND FUND BALANCES 80 EXHIBIT BB 2015 2014 $ 10,664,833 $ 7,973,437 13,214,488 12,207,442 60,356 45,684 4,401 187,557 $ 23,934,078 $ 20,414,120 $ 1,085,231 $ 1,234,030 79,736 235,885 385,809 571,237 1,550,776 2,041,152 22,383,302 18,372,968 22,383,302 18,372,966 $ 23,934,078 $ 20,414,120 CITY OF ALLEN, TEXAS EXHIBIT B-7 COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GENERAL CAPITAL PROJECTS FUND FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 2015 2014 REVENUES Charges for services $ 279,724 $ 279,876 Intergovernmental 2,621,300 1,048,596 Investment earnings 154,011 82,725 Gifts and contributions - 4,000 Miscellaneous 1,754,526 1,354,431 Total revenues 4,809,561 2,769,628 EXPENDITURES General government 96,651 2,100,516 Culture and recreation 62,565 - Public works 753,863 - Capital outlay 3,532,297 4,788,883 Total expenditures 4,445,376 6,889,399 Excess (deficiency) of revenues over (under) expenditures 364,185 (4,119,771) OTHER FINANCING SOURCES (USES) Transfers in 3,646,149 3,402,959 NET CHANGE IN FUND BALANCES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR 81 4,010,334 (716,812) 18, 372, 968 19, 089, 780 $ 22,383,302 $ 18,372,968 CITY OF ALLEN, TEXAS COMPARATIVE BALANCE SHEETS GENERAL OBLIGATION BOND FUND SEPTEMBER 30.2015 AND 2014 ASSETS Cash and cash equivalents Investments Accrued interest receivable Total assets LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable Retainage payable Total liabilities FUND BALANCES Restricted for capital projects Total fund balances TOTAL LIABILITIES AND FUND BALANCES 82 EXHIBIT B-8 2015 2014 $ 7,809,447 $ 6,917,487 12,926,357 9,564,392 40,603 26,485 $ 20,776,407 $ 16,508,364 $ 476,365 $ 73,246 29,351 66,720 505,716 139,966 20,270,691 16,368,398 20,270,691 16,368,398 $ 20,776,407 $ 16,508,364 CITY OF ALLEN, TEXAS 168,626 EXHIBIT B-9 COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES 3,194 - AND CHANGES IN FUND BALANCES 588,633 3,023,148 GENERAL OBLIGATION BOND FUND 3,821,751 2,260,724 FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 8,602,385 16,368,398 7,766,013 2015 2014 REVENUES Investment earnings $ 131,722 $ 33,020 Miscellaneous 651 Total revenues 131,722 33,671 EXPENDITURES General government Culture and recreation Public safety Public works Capital outlay Total expenditures Deficiency of revenues under expenditures OTHER FINANCING SOURCES (USES) Transfers out Premium on debt issuance Issuance of debt Total other financing sources (uses) NET CHANGE IN FUND BALANCES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR 83 110,417 168,626 783 13,667 3,194 - 684,209 588,633 3,023,148 1,489,798 3,821,751 2,260,724 (3,690,029) (2,227,053) (370,655) (198,441) 532,977 432,879 7,430,000 10,595,000 7,592,322 10,829,438 3,902,293 8,602,385 16,368,398 7,766,013 $ 20,270,691 $ 16,368,398 NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Hotel Occupancy Tax Fund - To account for funds received from hotel occupancy tax and expend as allowed by state law. Asset Forfeiture Fund — To account for activities associated with assets legally seized and forfeited. Grants and Special Revenue Fund - To account for monies received from other governmental agencies that have restricted legal requirements and multi-year budgets. Park Dedication Fund -To account for funds received and expended for the acquisition of additional park land and for the development of neighborhood parks. Tax Increment Financing Fund - To account for the tracking of property tax and sales tax revenue and associated expenses for the City's Tax Increment Financing agreements. 84 CITY OF ALLEN, TEXAS EXHIBIT C-1 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2015 85 GRANTS TOTAL HOTEL AND TAX NON -MAJOR OCCUPANCY ASSET SPECIAL PARK INCREMENT GOVERNMENTAL TAX FORFEITURE REVENUE DEDICATION FINANCING FUNDS ASSETS Cash and cash seurvalents $ 1,290,342 $ 174.442 $ 184,330 $ 84],]91 S 746,325 $ 3,023,230 Investments 2,271,348 62,142 195,579 858Am 1.002.854 4,30.730 Accounts receivable 137,216 - 276,272 - 46,940 460,436 Accrued] Interest 7,471 241 445 3,336 3,937 15,430 TOTAL ASSETS $ 3,708,377 $ 238,825 $ 636,626 S 1,509,934 $ 1,800,064 $ 7,809,026 LIABILITIES AND FUND BAIANCES LIABILITIES Accounts payable $ 54,783 $ 8,275 $ 139,730 $ - $ - $ 202.780 Ao;med] liabilitles 5,454 48.288 5.234 - - 58,974 Unearned] revenue 115,701 61,125 176,906 TOTAL LIABILITIES 60,217 172.342 208,089 43$,818 FUND BALANCES Restricted! Tourism 3,646,160 - - - - 3,648,180 Asset forfeiture - 64,483 - - - 6,483 State and federal grants - - 430,537 - - 430,537 Park ao$uNieon and d]evebpment - - - 1509,934 - 1,509,934 Tax increment enandng agreement 1,000.084 1.800A84 TOTAL FUND BALANCES 3,646,160 64463 430,537 1509930 1900064 7,451,178 TOTAL LIABILITIES AND FUND BALANCES$ 3.706.377 $ 236,825 $ 636,626 $ 1509,931 $ 1,000,064 S 7,889,825 85 CITY OF ALLEN COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2016 EXHIBIT C-2 86 GRANTS TOTAL HOTEL AND TM NON -MAJOR OCCUPANCY ASSET SPECIAL PARK INCREMENT GOVERNMENTAL TAX FORFEITURE REVENUE DEDICATION FINANCING FUNDS REVENUES Ad valorem taxes, penalties and interest $ - S - $ - $ - S 543,820 $ 543,620 Munigpalsalestax - - - 437,018 437,010 Licenses, permits, and was - - - 140,722 - 140,722 Hotel l motel taxes 1,544,180 - - - - 1,544,180 Gifts and contributions - - 216,000 - - 215,000 Intergovemmenial - - 811]35 - 125,876 937,611 limasanenleamings 23,311 M 1,333 8,281 11,869 48,684 Miscellaneous 131,924 16,818 148,742 Total revenues 1,587,01 132,694 1044888 150,003 1,118,383 4,013,437 EXPENDITURES General government - - - - 808,758 808,758 Public as" - 112,425 160,880 - - 273,415 Publ,..*a - 22,360 - - 22,380 Culture and recreation 1,123,781 - 218,912 - - 1,342,893 Community development 681,039 881,639 Total expendhurea 1,123,781 112,425 1,083,901 808,758 3,126,863 Excess (deficiency) of revenues over(under) expenditures 03,690 21),289 (38,015) 150,003 311,627 886,574 OTHER FINANCING SOURCES (USES) Transfers in - - 69,060 - - 89,060 Transfers out (25,000) - - - (25,OOD) Sale of capital assets 2,499 2,498 Total other financing sources (uses) (25,000) 2,498 89080 46,559 NET CHANGE IN FUND BALANCES 418,890 22,768 30,045 150,003 311.627 933,133 FUND BALANCES, BEGINNING OF YEAR 3,227,470 41,715 400,492 1,359,931 1488,437 6,518045 FUND BALANCES, END OF YEAR $ 3,048180 S 84.483 $ 430,537 $ 1,509,934 S 1,800,084 $ 7,451.178 86 CITYOFALLEN I�FIRST RESPECT INTEGRITY DELIVER EXCEL PEEP MAJOR ENTERPRISE FUNDS The Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises where the intent is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or where the City's council has decided that periodic determination of net income is appropriate for accountability purposes. Water and Sewer Fund — To account for the provision of water and sewer services to the residents of the City. Solid Waste Fund —To account for the provision of solid waste services to the residents of the City. Drainage Fund — To account for the provision of developing and maintaining proper drainage services to the residents of the City Golf Course Fund — To account for activities associated with the operations of the Chase Oaks Golf Course purchased by the City in October 2004. 87 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF NET POSITION WATER AND SEWER ENTERPRISE FUND SEPTEMBER 30, 2015 AND 2014 ASSETS CURRENTASSETS Casb and wall equndlenb IrnxaMenls Receivables, net of allcearm for unwludires Auwnts .ad in.. Inventories RrSltlged wall eM an eyutormas Tod cuarmrd eh NONCURMNITASSETS CAPITAL ASSETS Land Towas, tanks, and pump summer valades MaebbNy and e9upment Conswgimn In pt%reu Total ... ital asreb Less. re.bodaud depredation Capital assets, net of accurealatea depredation Toted noncurranl aswb TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES oerened Iris on refunding DerenM numbers of rewurus- Pension TOTAL DEFERRED OUTFLOWS OF RESOURCES LIABILITIES AND NET POSITION OURRENTUABILITIES Actaeon. Payable Areata.. uabiidea Reuinagc payable Payable from resltMed asset: Revenue bonds payable -moent Accrued! Interest payable AmuM mmpensatsd absmue - wnem Customer aePnatla payable Topilcunanllleblll8es NONCURRENT LIABILITIES Revenue bonds PayNle Net pen%on ladli, prepared urepresented abaenma Tod noncumnt liabilities TOTALLIABILITIES DEFERRED INFLOWS OF RESOURCES Deferred 081454s of rewurees- penem TOTAL DEFERRED INFLOWS OF RESOURCES NETPOSITION Net lnvanment in capital deal Ream de" ResOlctd for revenue bond primped and Interest Unreteieed TOTAL NET POSITION 88 EXHIBIT D-1 2013 2014 a 10,73.5,988 a 11,140,071 15,754,880 11,278,625 7,989,908 1.87,318 55,751 58,533 30,912 39, M8 1,385.813 1,384,812 35.952,750 32.167087 4,072,882 4,0728112 173959.10 172$24,009 867.05 aw,128 5,232,338 4,80,&5 2.182.389 4.588888 192314,711 188,591]52 183.425.929) 97.707,5271 154,888,782 108.884,u5 108.888,782 108,884$25 10,841,532 141.051,312 290,804 321,461 ss.9w 754..90 321.461 3,720,079 1,983,lw 127,425 114,575 71,695 172,973 975,900 1$80,000 a6,192 77.953 377,765 359,324 1,654,883 1814,03 8,985,918 5,502,01 5.985,889 SN0,910 1,551,508 - 13,278 12,63. 7.553.733 7,003,540 14,513651 12.1138,001 110.01 110.081 101,927,893 103,913.315 314421 23&59 28,614,184 28.123598 a 130.11811.454 a 128.769.772 CITY OF ALLEN, TEXAS EXHIBIT D-2 COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION WATER AND SEWER ENTERPRISE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 OPERATING EXPENSES Personnel services 2015 2014 OPERATING REVENUES 21,092,300 18,611,905 Water sales $ 19,771,508 $ 15,475,216 Sewer charges 13,591,909 12,749,253 Connection fees 180,976 178,003 Service charges 591,321 552,810 Intergovemmental - 11,800 Gifts and contributions 1,000,000 1,000,000 Miscellaneous 971,556 800,515 Total operating revenues 36,107,270 30,767,597 OPERATING EXPENSES Personnel services 4,463,491 4,383,437 Contractual and other services 21,092,300 18,611,905 Maintenance 460,577 351,292 Supplies 188,537 242,449 Depreciation 5,802,108 5,869,169 Other 192,865 165,765 Total operating expenses 32,199,876 29,624,017 OPERATING INCOME 3,907,392 1,143,580 NON-OPERATING REVENUES (EXPENSES) Interest income 167,793 120,402 Interest expense (246,235) (442,441) Total non-operating expenses (78,442) (322,039) INCOME BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS 3,828,950 821,541 CAPITAL CONTRIBUTIONS AND TRANSFERS Development fees 1,280,062 1,271,549 Capital contributions 3,136,580 2,402,611 Transfers in 38,249 33,375 Transfers out (4,898,578) (4,678,035) Total capital contributions and transfers (443,687) (970,500) CHANGE IN NET POSITION 3,385,263 (148,959) NET POSITION, BEGINNING OF YEAR, AS RESTATED 127,501,235 128,915,731 NET POSITION, END OF YEAR $ 130,886,498 $ 128,766,772 M CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF CASH FLOWS WATER AND SEWER ENTERPRISE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 EXHIBIT D-3 2015 2014 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 33,084,680 $ 31,392,906 Cash paid to employees for services (4,480,386) (4,335,248) Cash paid for goods and services (20,214,554) (18,431,520) Net cash provided by operating activities 8,389,740 8,626.138 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in 38,249 33,375 Transfers out (4,898,578) (4,678,035) Net cash used in noncapital financing activities (4,860,329) (4,(44,660) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid on revenue bond maturities (1,280,000) (1,205,000) Proceeds from debt issuance - 4,650,000 Payment to refunded bond escrow agent (4,800,000) Interest and fees paid on long-term debt (257,996) (491,328) Acquisition and construction of capital assets (2,674,019) (3,915,426) Contributions from developers 1,280,062 1,271,549 Disposition of capital assets 3,938 Net cash used In capital and related financing activities (2,928,015) (4,490,205) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investment severities (1,411,855) (346,490) Proceeds from the sale and maturities of investment securities - Interest on investments 107,175 192,964 Net cash used In Investing activities (1,304,880) (153,526) NET INCREASE IN CASH AND CASH EQUIVALENTS (703,284) (662,253) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 12,824,883 13,487,136 CASH AND CASH EQUIVALENTS, END OF YEAR $ 12,121,599 $ 12,824,883 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Net operating income $ 3,907,392 $ 1,143,580 Adjustments to reconcile net operating income to net cash provided by operating activilies'. Depreciation and amortization expense 5,823,940 5,910,821 Change in assets and liabilities: Accounts receivable (3,022,590) 625,309 Inventories 6,116 10,583 Defamed ouMows - pension (435,094) Accounts payable 1,736,925 708,373 Accrued liabilities 12,850 11,261 Retainage payable (98,378) 126,720 Compensated absences 19,089 48,189 Net pension liability 289,029 Utility deposits 40,380 41,302 Deferred inflows - pensions 110,081 Total adjustments 4,482,348 7,482,558 Net cash provided by operating activities $ 6,389,740 $ 816261136 NONCASH INVESTING ACTIVITIES Change in the fair value of investments $ 64,400 $ (57,85(1) NONCASH FINANCING ACTIVITIES Contributions of capital assets from developers $ 3.136,580 $ 2,402,611 RECONCILIATION OF CASH Cash and cash equivalents -camenl $ 10,735,986 $ 11440,071 Resldctetl cash and cash equivalents 1,385,613 1,384,812 S 12,121,599 $ 12,82A,883 90 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF NET POSITION SOLID WASTE ENTERPRISE FUND SEPTEMBER 30, 2015 AND 2014 12,923 EXHIBIT D-4 Machinery and equipment 2015 2014 ASSETS 25,518 21,315 CURRENT ASSETS (19,898) (21,315) Cash and cash equivalents $ 1,458,701 $ 1,356,199 Investments 1,723,829 1,661,810 Receivables, net of allowance for uncollectibles. 3,623,066 3,735,804 Accounts 300,038 284,409 Other 127,762 427,085 Accrued interest 7,116 6,301 Total current assets 3,617,446 3,735,804 NONCURRENT ASSETS CAPITAL ASSETS Vehicles 12,923 12,923 Machinery and equipment 12,595 8,392 Total capital assets 25,518 21,315 Less: accumulated depreciation (19,898) (21,315) Capital assets, net of accumulated depreciation 5,620 Total noncurrent assets 5,620 - TOTAL ASSETS 3,623,066 3,735,804 DEFERRED OUTFLOWS OF RESOURCES 177,551 3,238 Deferred ouflows of resources - pension 48,667 120,591 TOTAL DEFERRED OUTFLOWS OF RESOURCES 48,667 LIABILITIES AND NET POSITION CURRENT LIABILITIES Accounts payable 299,336 33,763 Accrued compensated absences -current 65,025 57,414 Accrued liabilities 26,950 26,176 Total current liabilities 391,311 117,353 NONCURRENT LIABILITIES Net pension liability 173,884 - Accrued compensated absences 3,667 3,238 Total noncurrent liabilities 177,551 3,238 TOTAL LIABILITIES 568,862 120,591 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources - pension 12,313 TOTAL DEFERRED INFLOWS OF RESOURCES 12,313 NET POSITION Net mvestment in capital assets 5,620 - Unrestricted 3,084,938 3,615,213 TOTAL NET POSITION $ 3,090,558 $ 3,615,213 91 CITY OF ALLEN, TEXAS EXHIBIT D5 COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION SOLID WASTE ENTERPRISE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 OPERATING REVENUES Garbage collections Other Total operating revenues OPERATING EXPENSES Personnel services Contractual and other services Maintenance Supplies Depreciation Other Total operating expenses OPERATING INCOME NON-OPERATING REVENUES Interest income INCOME BEFORE TRANSFERS TRANSFERS Transfers out CHANGE IN NET POSITION NET POSITION, BEGINNING OF YEAR, AS RESTATED NET POSITION, END OF YEAR 92 2015 2014 $ 6,474,386 $ 6,309,729 18,824 42,380 $ 3,090,558 6,493,210 6,352,109 470,480 480,593 4,976,900 4,792,608 4,842 1,903 39,532 15,542 625 270 67,915 92,299 5,560,294 5,383,215 932,916 968,894 21,510 11,842 954,426 980,736 (1,337,526) (709,363) (383,100) 271,373 3,473,658 3,343,840 $ 3,090,558 $ 3,615,213 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF CASH FLOWS SOLID WASTE ENTERPRISE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 EXHIBIT Dai 2015 2014 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 6,776,089 $ 6,212,427 Cash paid to employees for services (466,465) (475,571) Cash paid for goods and services _ _ (4,822,842) (4,900,136) Net cash provided by operating activities 1,486,782 836,720 CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES Transfers out (1,337,526) (709,363) Net cash used in non -capital financing activities (1,337,526) (709,363) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets (6,245) - CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investments (62,019) (200,775) Interest on investments 21,510 11,842 Net cash used in investing activities (40,509) (188,933) NET INCREASE IN CASH AND CASH EQUIVALENTS 102,502 (61,576) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 1,356,199 1,417,775 CASH AND CASH EQUIVALENTS, END OF YEAR $1,458,701 $ 1,356,199 RECONCILIATION OF OPERATING INCOME TO NET CASH USED BY OPERATING ACTIVITIES Net operating income $ 932,916 $ 968,894 Adjustments to reconcile net operating income to net cash provided by operating activities: Depreciation 625 270 Change in assets and liabilities: Accounts receivable 283,694 (141,135) Other receivables (815) 1,453 Deferred outflows - pension (48,667) - Accounts payable 265,573 2,033 Accrued liabilities 774 183 Net pension liability 32,329 - Accrued compensated absences 8,040 5,022 Deferred inflows - pension 12,313 Total adjustments 553,866 (132,174) Net cash provided by operating activities $1 486,782 $ 836,720 93 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF NET POSITION DRAINAGE ENTERPRISE FUND SEPTEMBER 30, 2015 AND 2014 EXHIBIT D-7 2015 2014 ASSETS CURRENT ASSETS Cash and cash equivalents $ 401,131 $ 378,773 Investments 396,409 457,523 Receivables: Accounts 68,036 65,114 Accrued interest 1,504 1,575 Total current assets 867,080 900,985 NONCURRENT ASSETS CAPITAL ASSETS Other improvements 496,132 496,132 Vehicles 31,379 31,378 Machinery and equipment 445,389 430,347 Total capital assets 972,900 957,857 Less accumulated depreciation (592,568) (579,729) Capital assets, net of accumulated depreciation 380,332 378,128 Total noncurrent assets 380,332 378,128 TOTAL ASSETS 1,247,412 1,279,113 DEFERRED OUTFLOWS OF RESOURCES Deferred ou0ov,s of resources - pension 45,199 TOTAL DEFERRED OUTFLOWS OF RESOURCES 45,199 LIABILITIES AND NET POSITION CURRENT LIABILITIES Accounts payable 47,570 32,585 Accrued compensated absences 43,008 38,924 Accrued liabilities 12,401 11,687 Total current liabilities 102,979 83,196 NONCURRENT LIABILITIES Net pension liability 161,495 - Accrued compensated absences 3,184 2,882 Total noncurrent liabilities 164,679 2,882 TOTAL LIABILITIES 267,658 86,078 DEFERRED INFLOWS OF RESOURCES Deferred in lows of resources - pension 11,436 TOTAL DEFERRED INFLOWS OF RESOURCES 11,438 NET POSITION Net investment in capital assets 380,332 378,128 Unrestricted 633,185 814,907 TOTAL NET POSITION $ 1,013,517 $ 1,193,035 0 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION DRAINAGE ENTERPRISE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 EXHIBIT D-8 2015 2014 OPERATING REVENUES Drainage fees $ 1,350,684 $ 1,325,448 Service charges 114,360 53,214 Other 2,759 2,868 Total operating revenues 1,467,803 1,381,530 OPERATING EXPENSES Personnel services 487,577 481,402 Contractual and other services 73,974 172,355 Maintenance 290,705 219,477 Supplies 34,780 51,042 Depreciation 22,739 24,165 Other 4,547 3,532 Total operating expenses 914,322 951,973 OPERATING INCOME 553,481 429,557 NON-OPERATING REVENUES Interest income (loss) 4,748 2,744 INCOME BEFORE TRANSFERS 558,229 432,301 TRANSFERS Transfers out (606,278) (481,701) Total transfers (606,278) (481,701) CHANGE IN NET POSITION (48,049) (49,400) NET POSITION, BEGINNING OF YEAR, AS RESTATED 1,061,566 1,242,435 NET POSITION, END OF YEAR $ 1,013,517 $ 1,193,035 95 CITY OF ALLEN, TEXAS EXHIBIT D-9 COMPARATIVE STATEMENTS OF CASH FLOWS DRAINAGE ENTERPRISE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 2015 2014 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 1,464,881 $ 1,387,138 Cash paid to employees for services (486,928) (476,073) Cash paid for goods and services (388,307) (450,646) Net cash provided by operating activities 589,646 460,419 CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES Transfers out (606,278) (481,701) Net cash used in non -capital financing activities (606,278) (481,701) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of capital assets (24,943) (16,564) Net cash used in capital and related financing activities (24,943) (16,564) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investments 61,114 - Purchase of investment securities - (50,402) Interest on investments 4,819 3,330 Net cash provided by (used in) investing activities 65,933 (47,072) NET INCREASE IN CASH AND CASH EQUIVALENTS 24,358 (84,918) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 376,773 461,691 CASH AND CASH EQUIVALENTS, END OF YEAR $ 401,131 $ 376,773 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Net operating income $ 553,481 $ 429,557 Adjustments to reconcile net operating income to net cash provided by operating activities: Depreciation 22,739 24,165 Change in assets and liabilities: Accounts receivable (2,922) 5,608 Deferred outflows - pension (45,199) - Accounts payable 14,985 (7,223) Accrued liabilities 714 2,983 Net pension liability 11,436 - Compensated absences 4,386 5,329 Defamed inflows - pension 30,026 Total adjustments 36,165 30,862 Net cash provided by operating activities $ 589,646 $ 460,419 01 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF NET POSITION GOLF COURSE ENTERPRISE FUND SEPTEMBER 30, 2015 AND 2014 168,505 EXHIBIT D-10 Accrued liabilities 2015 2014 ASSETS 100,698 81,353 CURRENT ASSETS 131,471 116,578 Cash and cash equivalents $ 548,856 $ 542,315 Prepaid items 5,050 5,050 Total current assets 553,906 547,365 NONCURRENT ASSETS 239,340 319,005 CAPITAL ASSETS 437,764 - Machinery and equipment 1,023,275 937,453 Less: accumulated depreciation (625,721) (501,870) Capital assets, net of accumulated depreciation 397,554 435,583 Total noncurrent assets 397,554 435,583 TOTAL ASSETS 951,460 982,948 DEFERRED OUTFLOWS OF RESOURCES 30,999 Defamed oullows of resources- pension 122,522 TOTAL DEFERRED OUTFLOWS OF RESOURCES 122,522 - LIABILITIES AND NET POSITION CURRENT LIABILITIES Accounts payable 168,505 174,647 Accrued liabilities 38,760 31,913 Accrued compensated absences 100,698 81,353 Capital leases payable - current 131,471 116,578 Customer deposits payable 31,155 27,980 Total current liabilities 470,589 432,471 NONCURRENT LIABILITIES Capital leases payable 239,340 319,005 Net pension liability 437,764 - Accrued compensated absences 25,195 20,355 Total noncurrent liabilities 702,299 339,360 TOTAL LIABILITIES 1,172,888 771,631 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources - pension 30,998 TOTAL DEFERRED INFLOWS OF RESOURCES 30,999 NET POSITION Net investment in capital assets 26,743 - Unrestdcted (156,648) 211,117 TOTAL NET POSITION $ (129,905) $ 211,117 97 CITY OF ALLEN, TEXAS EXHIBIT D-11 COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION GOLF COURSE ENTERPRISE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 OPERATING REVENUES Service charges Miscellaneous Total operating revenues OPERATING EXPENSES Personnel services Contractual and other services Maintenance Supplies Depreciation Other Total operating expenses OPERATING LOSS TRANSFERS Transfers in Total transfers CHANGE IN NET POSITION NET POSITION, BEGINNING OF YEAR, AS RESTATED NET POSITION, END OF YEAR hn 2015 2014 $ 2,361,384 $ 2,537,564 10,800 4,394 2,372,184 2,541,958 1,302,873 1,302,901 1,027,384 1,035,399 54,576 52,719 334,717 263,148 123,851 113,587 68,075 71,344 2,911,476 2,839,098 (539,292) (297,140 554,644 208,587 554,644 208,587 15,352 (88,553) (145,257) 299,670 $ (129,905) $ 211,117 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF CASH FLOWS GOLF COURSE ENTERPRISE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers Cash paid to employees for services Cash paid for goods and services Net cash used in operating activities CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES Transfers in Net cash provided by non -capital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital lease payment Net cash used in capital and related financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR RECONCILIATION OF OPERATING LOSS TO NET CASH USED IN OPERATING ACTIVITIES Net operating loss Adjustments to reconcile net operating loss to net cash used in operating activities: Depreciation Change in assets and liabilities: Accounts receivable Prepaid items Deferred outflows - pension Accounts payable Accrued liabilities Customer deposits Net pension liability Compensated absences Deferred inflows - pension Total adjustments Net cash used in operating activities n EXHIBIT D-12 2015 2014 $ 2,372,184 $ 2,544,780 (1,288,821) (1,295,405) (1,480,872) (1,393,667) (397,509) (144,292) 554,644 208,587 554,644 208,587 (121,794) (113,587) (150,594) (113,587) 6,541 (49,292) 542,315 591,607 $ 548,856 $ 542,315 $ (539,292) $ (297,140) 123,851 113,587 - 2,822 6,000 (122,522) - (6,142) 25,283 6,847 (7,190) 3,175 4,850 81,390 - 24,185 7,496 30,999 141,783 152,848 _L_(2 $ (144,292) CITY OF ALLEN PEOPLE`NRSt RESPECT /INTEGRITY DELIVER EXCEL INTERNAL SERVICE FUNDS The Internal Service Funds are used to account for financing of services provided by one department to other departments of the City on a cost -reimbursement basis. Replacement Fund - accounts for the costs associated with the acquisition of vehicles, machinery, and equipment through the rental of such items to other departments. Risk Management Fund — accounts for the costs associated with workers compensation, liability and property insurance and medical and dental programs established for City employees and their covered dependents. 100 CITY OF ALLEN, TEXAS EXHIBIT E-1 COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30,2015 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2014( RISK TOTALS REPLACEMENT MANAGEMENT FUND FUND 2015 2014 ASSETS CURRENT ASSETS Cash and cash equivalents $ 5,091,987 $ 2,394,019 $ 7,486,006 $ 7,155,019 Investments 6,425,149 3,414,965 9,840,114 9,111,573 Accrued interest receivable 25,561 13,062 38,623 38,168 Prepaid items 112,872 112,872 266,630 Total current assets 11,542,697 5,934,918 17,477,615 16,571,390 CAPITAL ASSETS Machinery and equipment 4,335,153 - 4,335,153 3,730,730 Vehicles 11,693,051 - 11,693,051 10,811,534 Construction in progress 706,187 - 706,187 291,903 Accumulated depreciation (9,481,843) (9,481,843) (8,121,369) Capital assets, net of accumulated depreclation 7,252,548 7,252,548 6,712,798 TOTAL ASSETS 18,795,245 5,934,918 24,730,163 23,284,188 LIABILITIES AND NET POSITION LIABILITIES Accounts payable 119,560 27,588 147,148 372,763 Accrued liabilities - _ 7,672 Incurred but not reported claims 983,434 983,434 935,264 TOTAL LIABILITIES 119,560 1,011,022 1,130,582 1,315,699 NET POSITION Net investment in capital assets 7,252,548 - 7,252,548 6,712,798 Unrestricted 11,423,137 4,923,896 16,347,033 15,255,691 TOTAL NET POSITION $ 18,675,685 $ 4,923,896 $ 23,599,581 $ 21,958,489 101 CITY OF ALLEN, TEXAS EXHIBIT E-2 COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2014) RISK TOTALS REPLACEMENT MANAGEMENT FUND FUND 2015 2014 OPERATING REVENUES Charges for services Other income Total operating revenues OPERATING EXPENSES Personal services Contractual services Depreciation Total operating expenses $ 1,999,620 $ 10,309,685 $ 12,309,305 $ 11,265,035 2,088 463,235 465,323 641,471 2,001,708 10,772,920 12,774,628 11,906,506 37,583 112,722 72,442 Gain on disposal of capital assets - 469,854 469,854 480,241 467,669 10,242,256 10,709,925 10,092,293 1,526,633 INCOME BEFORE TRANSFERS 1,526,633 1,501,430 1,994,302 10,712,110 12,706,412 12,073,964 OPERATING INCOME (LOSS) 7,406 60,810 68,216 (167,458) NON-OPERATING REVENUES Investment earnings 75,139 37,583 112,722 72,442 Gain on disposal of capital assets 64,459 64,459 87,327 Total non-opsra0ng revenues 139,598 37,563 177,181 159,769 INCOME BEFORE TRANSFERS 147,004 98,393 245,397 (7,669) TRANSFERS Transfers in 895,851 489,844 1,385,695 854,314 Total transfers 895,851 489,844 1,385,695 854,314 CHANGE IN NET POSITION 1,042,855 588,237 1,631,092 846,625 NET POSITION, BEGINNING OF YEAR 17,632,830 4,335,659 21,968,489 21,121,864 NET POSITION, END OF YEAR $ 18,675,685 $ 4,923,896 $ 23,599,581 $ 21,968,489 102 CITY OF ALLEN, TEXAS EXHIBIT E-3 COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2015 (WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2014) RISK TOTALS REPLACEMENT MANAGEMENT FUND FUND MIS 2014 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from transactions wit atiier funds Cash Paid m employees for services Cash paid for goods and services Cash Paid for Gaims Net cash provided by operating activities CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES Transfers in Net cash Provided by non -capital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets Proceeds horn sale of cegtal assets Net cast used in capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of evesbnent securities Proceeds from sale and maturities of investinent secuntes Interest on investments Net cash provided by (used In) Investing activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Net operabrif income (Indo) Adjustments to reconcile operating Income (loss) to net cash provided by operating =mbes' Depreciation Change in assets and liabilities Prepaids Accounts payable Total adjustments Net cash Provided by oparating activities $ 2,062,886 $ 10,926,678 $12,989,564 $ 11,748,771 - (469,854) (469,854) (480,241) (46],868) (6,711,883) (],1]9,551) (6,487,236) - (3,776.668) (3,)8,668) (3,301,372) 1,595,218 (31,727)) 1,563,491 1,479.922 $ 1,595218 E (31,]2]) $ 1563491 $ 1.479,922 095,851 409.844 1,385,695 854.314 895,851 489,844 1,38$695 854,314 (2,066,384) - (2,066,364) (1,135,769) 64,459 84459 87,327 (2,001,925) (2,001,925) (1,048.442) (321,600) (406,941) (728,541) (903,380) 75,03 38,664 112,267 77.835 (245,997) (370,277) (616274) (825,545) 243,147 87,540 330,987 460,249 4,848,840 2,306.179 7,155,019 6,694]]0 1 5,091,98] $ 2,394,019 $ 74W 006 IS 7,155,019 $ 7,406 IS 60,810 $ 68,216 $ (16],458) 1,526,634 - 1,526,634 1,W1,430 - 153,758 153,758 (93,50) 61,178 (246,295) (185,117) 239.500 1,587,812 (92,W7) 1,495,275 1,647,380 $ 1,595218 E (31,]2]) $ 1563491 $ 1.479,922 103 DISCRETELY PRESENTED COMPONENT UNITS Allen Economic Development Corporation (AEDC) — AEDC is a legally separate entity from the City and is responsible for aiding, promoting and furthering economic development within the City. Allen Community Development Corporation (ACDC) —ACDC is a legally separate entity from the City and is responsible for supporting the improvements in community parks and recreation, streets and sidewalks, public safety and the community library. 104 CITY OF ALLEN, TEXAS EXHIBIT F-1 COMPARATIVE BALANCE SHEETS ALLEN ECONOMIC DEVELOPMENT CORPORATION SEPTEMBER 30, 2015 AND 2014 2015 2014 ASSETS CURRENT ASSETS Cash and cash equivalents $ 5,976,111 $ 5,581,166 Investments 10,025,083 6,891,910 Sales tax receivable 1,531,556 1,436,156 Accounts receivable - 2,534 Accrued interest receivable 35,676 26,813 Prepaid items 6,298 6,298 TOTAL ASSETS $ 17,574,724 $ 13,944,877 LIABILITIES AND FUND BALANCES CURRENT LIABILITIES Accounts payable $ 66,741 $ 65,095 Accrued and other liabilities 17,335 13,878 TOTAL LIABILITIES 84,076 78,973 FUND BALANCES Nonspendable 6,298 6,298 Restricted Debt service 752,316 751,646 Unassigned 16,732,034 13,107,960 TOTAL FUND BALANCES 17,490,648 13,865,904 TOTAL LIABILITIES AND FUND BALANCES $ 17,574,724 $ 13,944,877 105 CITY OF ALLEN, TEXAS EXHIBIT F-2 RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION ALLEN ECONOMIC DEVELOPMENT CORPORATION SEPTEMBER 30, 2015 Total governmental fund balance $ 17,490,648 Amounts reported for governmental activities in the statement of net position are different because: Interest payable on long-term debt does not require current financial resources, therefore interest payable is not reported as a liability in the governmental funds balance sheet. (57,885) Long-term liabilities, including bonds payable are not due and payable in the current period and, therefore, are not reported in the fund financial statements. (20,957,225) Capital assets (net of accumulated depreciation) used in governmental activities are not current financial resources and therefore are not reported in the governmental funds balance sheet. 9,635,202 Net position of governmental activities $ 6,110,740 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALLEN ECONOMIC DEVELOPMENT CORPORATION FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 REVENUES Sales and other taxes Investment earnings Miscellaneous Total revenues EXPENDITURES Current: Economic development Capital projects: Economic development Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES Issuance of debt Proceeds from sale of capital assets Total other financing sources NET CHANGE IN FUND BALANCE FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR 107 EXHIBIT F-3 2016 2014 $ 8,893,669 $ 8,832,627 107,330 47,044 3,250 31,184 9,004,249 8,910,855 3,232,759 4,047,711 6,013,633 30,000 870,000 845,000 723,905 750,440 10,840,297 5,673,151 (1,836,048) 3,237,704 4,400,000 - 1,060,792 743,750 5,460,792 743,750 3,624,744 3,981,454 13,865,904 9,884,450 $ 17,490,648 $ 13,865,904 CITY OF ALLEN, TEXAS EXHIBIT F-4 RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE ALLEN ECONOMIC DEVELOPMENT CORPORATION FOR THE YEAR ENDED SEPTEMBER 30, 2015 Net change in fund balances- total governmental funds $ 3,624,744 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report the effect of premiums, dismounts, and similar items when debt is first issued. However, these amounts are amortized in the government -wide financial statements. (3,055) The proceeds from issuance of long -teem debt (e.g. bonds and capital lease obligations) provides wnent financial resources to governmental funds ($4,400,000). However, this doesn't have any effect on net assets. (4,400,000) The repayment of the principal of long-term debt consumes the current financial resources of governmental funds ($870,000). 570,000 Current year changes in accrued interest payable do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. 2,440 In the governmental fund financial statements, the proceeds from a sale of assets are shown as an increase in financial resources. However in the statement of activities, the gain or loss is calculated and reported (993,588) Depreciation expense on capital assets is reported in the statement of activities but does not require the use of current financial resources. Therefore, depreciation expense is not reported as expenditures in the governmental funds. (153,333) Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets are allocated over their estimated useful lives and reported as depreciation expense. 6,013,633 Change in net position of governmental activities 108 $ 4,960,831 CITY OF ALLEN, TEXAS COMPARATIVE BALANCE SHEETS ALLEN COMMUNITY DEVELOPMENT CORPORATION SEPTEMBER 30, 2015 AND 2014 ASSETS CURRENT ASSETS Cash and cash equivalents Investments Sales tax receivable Accounts receivable Accrued interest receivable TOTAL ASSETS LIABILITIES AND FUND BALANCES CURRENT LIABILITIES Accounts payable Retainage payable TOTAL LIABILITIES FUND BALANCES Restricted Debt service Assigned for capital projects Unassigned TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND BALANCES 109 EXHIBIT F-5 2015 2014 $ 4,794,237 $ 3,983,275 6,261,134 4,220,285 1,531,556 1,436,156 - 2,534 20,969 15,917 $ 12,607,896 $ 9,658,167 $ 563,322 $ 104,703 28,701 27,795 592,023 132,498 1,101,508 1,100,500 7,819,170 4,245,452 3,095,195 4,179,717 12,015,873 9,525,669 $ 12,607,896 $ 9,658,167 CITY OF ALLEN, TEXAS EXHIBIT F-6 RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION ALLEN COMMUNITY DEVELOPMENT CORPORATION SEPTEMBER 30,2015 Total governmental fund balance $ 12,015,873 Amounts reported for governmental activities in the statement of net position are different because: Interest payable on long-term debt does not require current financial resources, and, therefore, is not reported as a liability in the governmental funds balance sheet. (146,705) Long-term liabilities, including bonds payable are not due and payable in the current period and, therefore, are not reported in the fund financial statements. (31,336,429) Net position of governmental activities 110 $ (19,467,261) CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALLEN COMMUNITY DEVELOPMENT CORPORATION FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014 REVENUES Sales and other taxes Investment earnings Total revenues EXPENDITURES Current: Community development Capital projects: Community development Debt service: Principal retirement Interest and fiscal charges Total expenditures NET CHANGE IN FUND BALANCES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR 111 EXHIBIT F-7 2015 2014 $ 8,893,669 $ 8,832,627 64,366 28,842 8,958,035 8,861.469 2,101,123 1,206,190 1,415,343 2,102,671 1,135,000 1,090,000 1,816,365 1,862,835 6,467,831 6,261,696 2,490,204 2,599,773 9,525,669 6,925,896 $ 12,015,873 $ 9,525,669 CITY OF ALLEN, TEXAS EXHIBIT F-8 RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE ALLEN COMMUNITY DEVELOPMENT CORPORATION FOR THE YEAR ENDED SEPTEMBER 30, 2015 Net change in fund balances - total governmental funds $ 2,490,204 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report the effect of premiums, discounts, and similar items when debt is first issued However, these amounts are amortized in the government -wide financial statements. (14,423) Current year changes in accrued interest payable do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. 12,138 Repayment of the principal on long-term debt consumes the current financial resources of governmental funds. However, these transactions have no effect on net position. 1,135,000 Change in net position of governmental activities $ 3,522,919 112 CITY Of ALLEN AF IEEFIRST RESPECT INTEGRITY DELIVER EXCEL PEpP CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS CITY OF Ar lE FIRST RESPECT INTEGRITY DELIVER EXCEL PEEP CITY OF ALLEN, TEXAS EXHIBIT G-1 COMPARATIVE SCHEDULES BY SOURCE (a) AS OF SEPTEMBER 30, 2015 GOVERNMENTAL FUNDS CAPITAL ASSETS Land and land improvements Buildings Machinery and equipment Furniture and fixtures Vehicles Books Infrastructure Total property and equipment In service Construction in progress Total governmental funds capital assets INVESTMENTS IN GOVERNMENTAL FUNDS CAPITAL ASSETS BY REVENUE SOURCE General obligation bond proceeds and interest income Revenue bonds Contributions Other governments General and other fund operations Special revenue funds Total governmental funds capital assets 2015 2014 10,475,000 10,475,000 $ 131,973,606 $ 130,614,642 131,330,347 131,330,347 11, 421, 675 11, 044, 865 7,973,242 7,973,242 2,477,078 2,445,836 1,862,785 1,599,188 484,877,368 477,197,874 771,916,101 762,205,994 13,702,688 9,400,323 $ 785,618,789 $ 771,606,317 $ 192,892,418 $ 189,869,270 10,475,000 10,475,000 383,601,240 378,162,347 9,951,500 9,951,500 166,685,149 161,326,074 22,013,482 21,822,126 $ 785,618,789 It 771,606,317 (a) This schedule presents only the capital asset balances related to governmental funds, including infrastructure. Accordingly, the capital assets reported in the internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net position. 113 CITY OF ALLEN, TEXAS SCHEDULE OF CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS BY FUNCTION AND ACTIVITY (a) AS OF SEPTEMBER 30. 2015 Function and Activity Land GENERAL GOVERNMENT 78,932 Municipal court $ 631,788 City administration 2,719,532 Information technology - Internal services - Finance 111,715,429 Total general government 3,351,320 PUBLIC SAFETY Police - Fire 78,932 Total public safety 78,932 PUBLIC WORKS Community services & streets 51,274,858 Engineering 80,"0,571 Total public works 111,715,429 CULTURE & RECREATION Parks &recreation 15,512,837 Library Total culture and recreation 15,512,837 COMMUNITY DEVELOPMENT Building & code compliance - Planning &tlevelopment $ Total community development 131,330,347 GRANT ADMINISTRATION Grant Administration 500,000 Total grant administration 500,000 Machinery & Land Improvements Buildings Equipment It - $ 289,669 137,584 8,871,016 451.695 - 1,066,227 371,109 9,160,685 2,026,615 8,528,747 647,708 9,470,738 899,823 17,999,485 1,547,531 13,184,077 571,001 7,625,113 160.284 20,609,190 731,255 $15,088 70,288,315 5436,748 11,041,387 457,946 815,088 81,329,702 5,894,694 16,988 16,988 2,031,285 1,204,562 2,031,285 1,204,562 Construction in Progress Total governmental funds capital assets $ 131,158,518 $ 815,088 $ 131,330,347 $ 11,/21,675 (a) This schedule presents only the capital asset balances related to governmental funds, including infrastructure. Accordingly, the capital assets reported in the internal service funds are excluded from the above amounts Generally, the capital assets of internal service funds are included as governmental activities in the statement of net position. 114 EXHIBIT G-2 Furniture& 344,647 OMer Construction in - 10,916,475 Fudums Vehicles Books Improvements Progress Total $ - $ - $ - $ 6,178 $ - $ 1,065,219 838,708 25,348 - - 12,906,299 12,978 19,942 - 5,539,835 - 6,638,982 14.623 122,770 4,311 - 512,813 23,600 554,386,599 23,600 889,909 168,060 5,550,324 21,146,913 247,040 344,647 - 1,148,333 - 10,916,475 289,841 1,076,547 110,682 11,926,563 536,881 1,421,194 1,259,015 22,843,038 57,718 97,649 - 263,604,721 - 328,790,024 468,878 62,749 156,838,980 225,596,575 526,596 160,398 420,443,701 554,386,599 5,173,234 455,081 - 55,140,503 837,256 - 1,849,655 3,519 6,010,490 455,081 1,849,655 55,144,022 13,619 9,366 19,848 9,366 33,467 238,878 13,130 2,480,306 238,878 13,130 2,480,306 152,821,806 14,189,763 167,011,569 13,619 46,202 59,821 6.468,161 6,468,161 13,702,688 13,702,688 $ 7,973,242 $ 2,477,078 $ 1,862,785 $ 484,877,368 $ 13,702,688 $ 785,618789 115 CITY OF ALLEN, TEXAS SCHEDULE OF CHANGES IN CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS — BY FUNCTION AND ACTIVITY (a) FOR THE YEAR ENDED SEPTEMBER 30, 2015 EXHIBIT G-3 Govemmenlal Funds Governmental Funds Cached Means Develose_ Caaeal Asans Furotion and Achi OCtober 1. 2014 Contributions Additions Deductions Tmnsfera Siamuni r30. 2o15 GENERAL GOVERNMENT Municipal Court $ 1,065,219 $ - $ - $ $ - $ 1,085,218 CityAdminieha9on 12,732,305 - 173994 - 12,906,299 Information Technology 6,602,630 - 36,352 - - 6,638,982 Human Resources - _ - InamedSe aces 512,013 - - - - 512,813 Finance 23M 23.600 Total General Government 20.998567 210.349 21148913 PUBLIC SAFETY Pollce 10,891 - 23,029 - - 10,916,475 Fire 11.928.583 - - 11.928 583 Total Public Safety 22.820,009 23,029 22,81 PUBLIC WORK$ Community services& streets 323,111,939 4,079,929 0,740 (40,700) 1,838118 328.790,024 Engineering 223,011,82] 1,358,964 (1],135) 442.819 225.596,575 Total PuNlCWods 548,923.008 5,438.893 8,740 (1 2,072,935 550,386,589 CULTURE & RECREATION Pella& Recreation 151,083,659 - 233,617 (22,100) 1,526,830 152,821.806 Ubiary 13,828188 - 283,587 14,189.783 Total Culi & Recession 165.009.825 497,214 (22,100) 1.526,830 107,011,599 COMMUNITY DEVELOPMENT Building & Code Compliance 13,619 - - - - 13,619 Planning &Development 46,202 - 48202 Total Community Development 59,821 - 59.821 GRANTADMINISTRATION G,anl Atlmimstiabon 6.455906 12.255 6.480.161 Total Giant Adminishaton 5.455,908 - 12.255 8.468,161 Total geneial mphal assets allocated by function 782,205.994 5,438,$83 751.584 (79,835) 3,591 ]]1,916,101 Communion in progress 9,400,323 7,901,930 (3,599,565) 13.702.688 Total governmental funs rappel assets $ 771,60,317 $ 4438.893 $ 8$53.514 $ (],935) $ $ ]85618,]89 (a) This schedule presents Only Me capital asset balances !elated to pournmentsl funds, Including Infres"atum A=mmgly, the capital saw%reported in Me internal serece funds are excluded fmm the above amounts. Generally Me capllel assets of Intemal serves funds are included as governmental activities in the statement of net poslton 116 STATISTICAL SECTION (UNAUDITED) CITY OAr F w PEOPIEFIRSt RESPECT INTEGRITY DELIVER EXCEL STATISTICAL SECTION This part of the City of Allen's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, notes disclosures, and required supplementary information says about the Citys overall financial health. This information has not been audited by the independent auditor. Contents Table #s Financial Trends 1, 2, 3 & 4 These tables contain trend information to help the reader understand how the Citys financial performance and well-being have changed over time. Revenue Capacity 5, 6,7 & 8 These tables contain information to help the reader assess the City's two most significant local revenue sources, the property and sales taxes. Debt Capacity g, 16,11 & 12 These tables present information to help the reader assess the affordability of the Citys current levels of outstanding debt and the City's ability to issue additional debt in the future. Economic and Demographic Information 13 & 14 These tables offer economic and demographic indicators to help the reader understand the environment within which the City's financial activities take place. Operating Information 15, 16 & 17 These tables contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides. 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