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Comprehensive Annual Financial Report
f_ CITY OF ALLEN Comprehensive Annual Financial Report For Fiscal Year Ended September 30, 2016 Fire Station #2 :a Official Copy ALLEN, TEXAS CITY OF ALLEN, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF ALLEN FISCAL YEAR ENDED SEPTEMBER 30, 2016 AS PREPARED BY THE FINANCE DEPARTMENT CITY Of ALLEN IRST RESPECT INTEGRITY DELIVER EXCEL PE�P�EF CITY OF ALLEN, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016 TABLE OF CONTENTS EXHIBIT Page I. INTRODUCTORY SECTION Letter of Transmittal Certifcate of Achievement vi Organizational Chart vii Elected Officials and Administrative Officers viii It. FINANCIAL SECTION Independent Auditor's Report 1 A. MANAGEMENT'S 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, 2016 TABLE OF CONTENTS C. REQUIRED SUPPLEMENTARY INFORMATION Schedule of OPEB Funding Progress and Contributions EXHIBIT Page Notes To Financial Statements Note 1. Summary of Significant Accounting Policies 33 Note 2. Deposits, Investments and Investment Policies 41 Note 3. Receivables 45 Note 4. Capital Assets 46 Note 5. Long -Term Debt 50 Note 6. Interfund Transfers 58 Note 7. Retirement Plan 59 Note 8. Water and Sewer Contracts 64 Note 9. Deferred Compensation Plan 64 Note 10. Risk Management 64 Note 11. Other Postemployment Benefits (OPEB) 65 Note 12. Commitments and Contingent Liabilities 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, 2016 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 D-4 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 G-1 Corporation COMPREHENSIVE ANNUAL FINANCIAL REPORT Reconciliation of the Governmental Funds Balance Sheet to the 114 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016 F-6 110 Comparative Statements of Revenues Expenditures and TABLE OF CONTENTS Changes in Fund Balances F-7 111 EXHIBIT Page Discretely Presented Component Units F-8 112 1 Comparative Balance Sheets -Economic Development Corporation F-1 105 Reconciliation of the Governmental Funds Balance Sheet to the Fund Balances, Governmental Funds 3 Statement of Net Position F-2 106 Comparative Statements of Revenues, Expenditures and Changes Assessed Value and Estimated Actual Value of Taxable Property 5 in Fund Balances F-3 107 Reconciliation of the Governmental Funds Statement of Principal Property Taxpayers 7 Revenues, Expenditures and Changes in Fund Balance F-4 108 Comparative Balance Sheets -Allen Community Development G-1 Corporation F-5 109 Reconciliation of the Governmental Funds Balance Sheet to the 114 Statement of Net Position F-6 110 Comparative Statements of Revenues Expenditures and Changes in Fund Balances F-7 111 Reconciliation of the Governmental Funds Statement of 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 TABLE Page STATISTICAL SECTION Net Position by Component 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 Property 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 INTRODUCTORY SECTION CITYofALLEN PEOP`E`IRSt RESPECT INTEGRITY DELIVER EXCEL CITY OF ALLEN March 14, 2017 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, 2016. 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, 2016 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 4.39 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 94,576 at September 30, 2016 is estimated to grow to 125,000 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 792.95 full time equivalent positions. 305 CENTURY PARKWAY • ALLEN, TEXAS 75013-6042 •214.509 4100 WEB: www crtvofallrn ore • EMAIL: a oe(racityofsllen.org ECONOMIC CONDITIONS AND OUTLOOK Regional Economy In November 2016 the Dallas Morning News ranked Allen as the #2 Best Neighborhood in North Texas citing the "small-town feel" and "hometown pride". The City of Allen unemployment rete as of September 2016 was 3.6% and the Collin County unemployment rate was 3.3%, both of which were below the national rate of 4.7%. 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 papulation of 94,576 is expanding with an estimated 4.2% growth rate. Allen has benefited from a well-educated and affluent workforce with an average family income of $131,714 as reported by the U.S. Census Bureau, American Community Survey. With an average age of 35.7, over 53.0% of adults have a Bachelor's degree or higher and the average earnings for a resident with a bachelor's degree is $67,770. Allen is a community that offers exceptional housing, award-winning schools, steadyjob 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 fourth best city for families by WalletHub, October 2016 and was named 5th Best City to Live in Texas by Niche.com, June 2016. Long Range Financial Planning The City's responsiveness to emerging economic challenges and its long-term 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 rete. Standard and Poor's 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 confinues to maintain the highest 'AAA' rating from Standard and Poore and during 2016 received a rating increase from Aa1 to Aaa from Moody's on its general obligation, certificate of obligation bonds. This increase makes the City of Allen just one of seven Cities in the State of Texas to have both a AAA rating with both S&P and Moody's. The Water and Sewer Revenue Bonds are rated 'AAA' from Standard and Poors and Aa2 from Moody's. S&P's August 2016 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 FY2016, the City completed a CIP Bond Program totaling $93 million estimated to be completed over the next seven years. For more infornation, related to this program please visit the following link: http://www.cityofallen.org/1718/Allen-Bond-2016. Additionally, during FY2016 the City issued $6,910,000 in General Obligation refunding bonds and $1,940,000 in Tax Notes for the purchase of public safety radio equipment. Due to conservative budgeting and effective management, the City continues to cash finance capital projects thus saving debt issuance and interest costs. In FY2016, the General Fund contributed $3,603,938 for future capital projects, Water and Sewer Fund $1,995,000 for water/sewer replacements and pump and lift station improvements, and Solid Waste Fund $500,000 for alley repairs. Fiscal Year 2016 Highlights During FY2016, 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 four hundred building permits. The City welcomed a variety of new businesses to the city, including TOPS Software, Formulife, EpiTek, Texas Revolution, Dallas Sidekicks, KONE and Kendra Scott. Facilitated several new residential developments including Connemara Crossing, Angel Field East, Ridgeview Villas, Montgomery Farm Estates, The Village at Twin Creeks - Phase II, Estates of Twin Creeks — Phase II, and Montgomery Ridge — Phase It. The City also administered Community Development Block Grant funds which went toward the rehabilitation of ten homes within Allen's older neighborhoods. Despite a slight rise in crime statistics in 2016, the City of Allen remains one of the safest communities in the state and nation. 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 added additional features to the Station Alerting system to further reduce response times, re -wrote medical treatment protocols to include the latest advancements, attended training on radar data interpretation to aid in evaluating severe weather, expanded development programs for staff, replaced cardiac monitors with the latest technology. Additionally, staff researched and implemented practices to comply with the Affordable Care Act and other government mandates. Lastly, the department increased interoperability 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 second consecutive year, 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 story time and Summer and Winter 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. Im In 2016, 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 Watters Creek, an $85 million convention center with 65,000 s.f. of meeting space and a 300 room four star hotel; Kaizen Development Partners agreed to a deal which would create a scalable office park just outside of Watters Creek which would include 125,000 s.f. of Class -A office space; TOPS Software, a developer of packaging optimization software, was recruited to Allen; Forumlife, a nutritional supplements manufacturer, has also been recruited to office in Allen; EDC staff assisted Jack Henry and Associates to acquire the Texas Enterprise Zone Program designation that secured their 600 jobs and added $6.7 million in future capital investments; EDC staff also facilitated the acquisition of the former Okmetic building by EpiTek, thus saving 35 existing jobs and will add at least 20 additional jobs and $14 million in future investments; OrthoTexas agreed to a deal to construct a new 36,000 s.f. orthopedic and surgery center. 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 20th Anniversary Tour, Theresa Caputo, The Brian Setzer Orchestra, Counting Crows, Lenny Kravitz, Twenty One Pilots, Meghan Trainor, Halsey, amateur and collegiate sports, and trade shows. The event center is also the home to professional sports; the Legacy Fighting Championship 46; 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 fourth 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 8,000 visitors that booked approximately 3,500 hotel room nights, and generated more than $3.4 million in economic activity. The CVB also stimulates regional tourism by promoting the city for shopping, dining and entertainment. With 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 and are reviewed on a periodic basis. Recently, the Training/Travel Policy was updated to reflect changes in city processes and provide added flexibility for travelers, as well as provide greater ease for Finance staff during the reconciliation process. On a quarterly basis the Finance Department prepares financial and investment reports which are presented to the City Council. AWARDS AND ACKNOWLEDGEMENTS Awards -- The Govemment 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, 2015. This was the seventeenth consecutive year that the w 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 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 office 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 Spurgin Chief Financial Officer Assistant Chief Financial Officer 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, 2015 *10011P-4 Amok" Executive Director/CEO CIN OF ALLEN ORGANIZATIONAL CHART Citizens otalen City Council QyAttaney Cy Manager Municipal Judge Assistant City Manager Assistant City Manager Human Resources City Sxrelery Publican Metlle Relagms Conmunly Development CommunityS Mces I I I Engneuing Finance I I I Fine lituary W linkrmatlon Technology Police I I I Pana and Recreation vii CITY OF ALLEN, TEXAS CITY OFFICIALS Councilmembers Mayor Stephen Terrell Mayor Pro Tem, Place 5 Gary L. Caplinger Place 1 Councilmember Kurt Kizer Place 2 Councihnember Ross Obermeyer Place 3 Councihnember Joey Herald Place 4 Councilmember Robin L. Sedlacek Place 6 Councilmember Baine Brooks Management Staff City Manager Peter H. Vargas Chief Financial Officer Eric Cannon Assistant Chief Financial Officer Joanne Spurgin ha FINANCIAL SECTION CITY OFALLEN PEOpIE`IRSt RESPECT INTEGRITY DELIVER EXCEL weavery Asswana 11 A.—, 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, 2016, 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 preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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 auditors 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, L L.P. 12221 M1ERIT DRIVE, SUITE 1400, DALLAS, TX 75251 BAKER TILLY INTERNATIONAL CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS P: 98490.1970 F9727028821 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, 2016, 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. 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 fund statements and schedules, 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 fairy 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 13, 2017, 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 Citys internal control over financial reporting and compliance. '�(f,Q/A/M A#A l40a"lil.i WEAVER AND TIDWELL, L.L.P. Dallas, Texas March 13, 2017 CITYofALLEN 19 lE`IRST RESPECT INTEGRITY DELIVER EXCEL pEpP MANAGEMENT'S DISCUSSION AND ANALYSIS CITYofALLEN AV IEFIRST RESPECT INTEGRITY DELIVER EXCEL PEpP CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2016 (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 resources of the City exceeded its liabilities and deferred inflows of resources (net position) at September 30, 2016 by $603,763,141. Of this amount, $47,598,032 (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 $10,892,304. 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 $68,711,730 at September 30, 2016, a decrease of $3,075,322 from the prior fiscal year. This decrease is attributed to the payments associated with construction and acquisition of capital projects. • At the end of the fiscal year, the unassigned fund balance for the General Fund was $21,190,991 or 25% of total General Fund expenditures. • On a government -wide basis, the City's total liabilities decreased by $517,235, primarily as a result of the City refunding some of its existing debt. However, the majority of these savings were offset by the change in the net pension liability. 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 deferred outflows of resources and liabilities and deferred inflows of resources, with the difference 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 Acfivities 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 liming 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. CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2016 (UNAUDITED) In the govemment-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- term 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 government -wide financial statements, readers may better understand the long -tens impact of the government's near-term 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 non -major 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, 2016 (UNAUDITED) Proprietary funds provide the same type of information as the government -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. 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 General 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 non -major governmental funds and internal service funds are presented following the required supplementary information. 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 $603,763,141 as of September 30, 2016. By far the largest portion of the City's net position ($523,463,272 or 87%) reflects 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 -type Activities Ty -tall 2016 2015 11¢ 2015 2016 2015 Current and other assets $ 93,550,322 $ 96,605,789 $ 39,475,285 $ 42,271,268 $ 133,025,607 $138,877,057 Capital assets 498,231,793 491,546,112 112164,832 109,672,288 610,396,625 601,218,400 Total Assets 591,782,115 588,151,901 151,640,117 151,943,556 743,422,232 740,095,457 Deferred inllo of resources 13,623,868 7,364,533 1,601,761 921,086 15,225,629 8,285,619 Long-term labdNes 130,168,562 127,706,373 10,181,900 10,291,229 140,350,462 137,997,602 Other habtl8ies 9,517,882 9,752,936 3,632,789 6,267,830 13,150,671 16,020,766 Total Liabilities 139,686,444 137,459,309 13,814,689 16,559,059 153,501,133 154,018,368 Deferred outflows of resources 1,230,633 1,327,042 152,954 164,82920 1,383,587 1,491,871.00 Net Position: Net investment in capital assets 417,289,081 400,378,054 106,174,191 102,340,588 523,463,272 510,718,642 Restricted 32,485,173 31,476,026 216,664 344,421 32,701,837 31,820,447 Unrestricted 14,714,652 16,876,003 32,083,380 33,455,745 47,598,032 50,331,748 Total Net Position $ 464,488,906 $456,730,083 $139,270.235 $136,140,754 $ 603,763,141 $592,870,837 CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2016 (UNAUDITED) An additional portion of the City's net position, $32,701,837, represents resources that are subject to external restrictions on how they may be used; the remaining balance of $47,598,032 may be used to meet the government's ongoing obligations to citizens and creditors. Analysis of the City's Operations - As of September 30, 2016, City had an overall increase in net position of $10,892,304 for the government as a whole which represents an increase of $7,758,823 for governmental activities and an increase of $3,133,481 for business -type activities. The increase in governmental activities is primarily a result of an increase in revenue related to charges for services, capital grants and contributions, property taxes, sales taxes, hotel/motel taxes, interest earnings and miscellaneous revenue. The increase in business -type activities is primarily a result of an increase in capital grants and contributions provided by various developers. A summary of the City's operations for the year ended September 30, 2016 is provided in Table 2. Table 2 Changes In Net Position Governmental Activities Business-tvoe Activities Total 2016 2015 2016 2015 2016 2015 Revenues: Program Revenues: Charges for services $ 15,986,721 $ 14,785,198 $ 47,24$254 $ 44,436,528 $ 63,234,975 $ 59,221,726 Operating grants and contributions 1,557,260 1,749,567 - 1,000,000 1,557,260 2,749,567 Capital grants and contributions 16,039,869 10,552,810 6,172,301 4,416,642 22,212,170 14,969,252 General Revenues. Property taxes 54,102,952 50,143,076 - - 54,102,952 50,143,986 Sales tax 19,274,983 18,141,683 - - 19,274,983 18,141,883 Franchise taxes 7,295,931 7,412,447 - - 7,295,931 7,412,447 Hotel motel tares 1,607,263 1,544,160 - - 1,807,263 1,544,160 Other taxes 1,621,012 1,851,397 - - 1,621,012 1,851,397 Interest earnings 735,832 689,736 197,125 194,051 932,957 883,787 Gain on sale of capital asset - - 15,503 - 15,503 - Nax,ellieeous 3,794,2]] 2,650,103 1,003,939 3,794,277 3,654,042 Total Revenues 122,016,100 108520,887 53,633,163 51,051,160 175,649,283 160,572,047 Expenses General government 25,304,811 24,484,248 - - 25,304,811 24,484,246 Public safety 35,199,937 31,607.444 - - 35,199,937 31,607,44 Public works 19,083,214 18349,569 - - 19,073,214 18,349,589 Culture and recreation 32,851,598 32,407,934 - - 32,851,598 321407,gM Community development 3,251,555 2,861,704 - - 3,251,555 2,861,704 Interesl on long -tens debt 3,356,234 3.921,989 - - 3,356,234 3,921,989 Water ..it sewer - - 35,604,182 32,304,628 35,604,182 32,304,828 Solid waste services - - 5,870,289 5,560,294 5,870,269 5,568294 Drainage - - 1,146,138 914,322 1,146,138 914,322 GORcourse - 3,088041 2,911,476 3,089.041 2,911,476 Total Expenses 118047,349 113,612,886 45,709,830 41,690720 184,756,979 155,303,806 Change in net position before transfers 2,968751 (4,091,999) 7,923,553 9,380,440 10,892,304 5,268,41 Transfers 4,790,072 6,249,489 (4790072) (6249489) Change in net position 7,758,823 2,157,490 3,133,481 3,110,951 10,892,306 5,2611 1 Net position, beginning of year, as restated 456,730.083 454.572,593 136 140 754 130,009,803 592,870,837 587,602,396 Net Nation, end of year 5464,488,906 $456,730,083 $139,274,235 $138,140,754 $603,763,141 $592,870,83] CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2016 (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 Charges for service 6% 4% 12% Operating grants Franchise taxes 1% 6% Capital grants 13% Revenues for the City's governmental activities increased by $12,495,213. Major components of revenue increases and decreases are explained as follows: • Property taxes increased by $3,958,966 or 8% due to an increase of 10% from prior year's valuation. This increase is due to real property reappraisals and new property additions. • Sales taxes increased by 6% over prior year collections. • Capital grants and contributions increased by 52% due to an increase in developer contributions for infrastructure and right of way and an increase in intergovernmental revenue for street projects. • Charges for services increased by 8% due to an increase in ticket, alcohol and concession sales at the Allen Event Center, an increase in Fire EMS services, and an increase in street inspection fee revenue. • Fine Revenue (Other Taxes) decreased by 12% as a result of warrant revenue decreasing. • Interest earnings increased by $46,096, an increase of 7%, as a result of interest rates continuing to increase. Expenses for governmental activities increased by $5,434,463 or 5%. Components of increases and decreases are explained as follows: • Expenses include employee annual merit increases, non-public safety salary market adjustment, adding 16.10 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. • Expenses for Public Safety increased by 11% due primarily to the increase in personnel services and the addition of 2 additional FTEs for both Police and Fire. CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2016 (UNAUDITED) • Expenses for Culture and Recreation increased by 1°/ due to merit increases, increasing the Parks and Recreation FTE by 4.6 for the Ford Pool redesign and expansion, to address administrative duties at the service center, and to address growing maintenance. Additionally, there was an increase in professional services at the Allen Event Center due to an increase in number of events held. • Expenses for General Government increased by 3% 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 $40,600.000 W35,000.000 ,000,000 — — $25,DD0,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Expenses A ,A ue Pc A •Revenues �y� y� 4P 'Po x9�. �o �9 �k cP Business -type activities — Revenues — The following chart visually illustrates the City's revenue by sources for business -type activities: Revenues by Source- Business -type Activities Capital grants anci OMer 0% contributions 12% Charges for services 88% CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2016 (UNAUDITED) Business -type activities revenues increased $2,582,023 or 5%. Major components of the decreasestiincreases are as follows: • Capital contributions increased by $1,755,659 or 40% due to an increase in developer contributions for water mains and sewer lines. This large increase offsets a $1,000,000 decrease in operating contributions. • Charges for services for business -type activities increased by $2,811,726, or 6% due to water sales increasing by 5% as a result of less water restrictions which resulted in citizens watering more frequently, an increase of 5% in sewer charges, and an increase of 4% in drainage revenues. A significant portion of this increase was offset by a $1,003,939 decrease in miscellaneous revenues. Expenses for business -type activities increased by $4,018,910, or 10%. The increase was due to an increase of 10% in expenses in the Water and Sewer Fund, an increase of 6% in expense in the Solid Waste Fund, and an increase of 6% 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 primarily a result of an increase in maintenance casts as two greens were destroyed by storms during the beginning of the fiscal year. The following chart illustrates the relationship between expenses and program revenues for business -type activities: Expenses and Program Revenues - Business -type Activities $45,OD0.000 $40,000,000 $35,000,000 —._..... - $30,000,000 $25,000,000 •Expenses $20,000,000 • Revenues $15,000,000 $10,000,000 $5,000,000 $0 Water and Solid waste Drainage Golf course sewer services 10 CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2016 (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 govemment'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 $68,711,730, a decrease of $3,075,322 in comparison with the prior fiscal year. Approximately 31%, or $21,190,991, constitutes unassigned fund balances, which are available for spending at the government's discretion. The remaining fund balances are classified as assigned, restricted or non -spendable to indicate that they are not available for new spending allocation. The non -spendable portion includes prepaid items ($2,129), restricted funds for debt service ($1,254,401), capital projects ($36,800,683), toudsm ($4,359,540), asset forfeiture ($85,621), state and federal grants ($249,096), park acquisition and development ($1,581,633), tax increment financing agreements ($2,279,728), court technology ($15,770), PEG fees ($811,867), photo red light enforcement ($21,737), and cemetery trust ($58,534). 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 $21,190,991. Current operating expenditures had savings of $3,355,540 allowing monies to be transferred to the capital projects fund for self-financing of capital projects. The total fund balance increased from $20,388,622 to $22,101,028. This increase is due to prudent, conservative management by City staff. The Debt Service Fund balance of $1,254,401, all of which is restricted for the payment of debt, decreased from the prior year by $38,858. This decrease was due to a decrease in the total debt portfolio. The fund balance meets the FY2016 5-10% of annual debt service requirement of $640,073 to $1,280,146. The General Capital Projects Fund provides information on cash financed capital projects and had an ending fund balance of $22,164,716, a decrease of ($218,586). Revenues and other financing sources totaled $9,841,221, which included $700,000 received from developer for the Montgomery Boulevard extension, $503,655 received from TASPP for the Fire Department expenditures, $557,924 for Allen Water Station Trail, $450,000 for Molsen Farm land, $158,788 for Alma Drive improvement from Collin County, $368,072 in miscellaneous revenue for street improvements, $1.7M for AISD land and building capital lease obligations, and $4,242,639 from other funds to cash finance capital projects. Total expenditures of $10,059,807 consisted of $1,873,563 for Montgomery Boulevard extension, $2,272,272 for Ridgeview Drive, $1.7M for AISD land and building, and $1,192,388 for citywide street and alley repair. The General Obligation Bond Fund had an ending fund balance of $14,635,967, a decrease of ($5,634,724) from the prior year. Expenditures totaled $7,473,935 which primarily included $3,966,093 for Fire Station #2 reconstruction, $1,889,608 for Molsen farm land, and $436,978 for Alma Drive improvement. The Citys 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, $28,581,811, Solid Waste, $2,844,622, Drainage, $552,547, and Golf Course, ($235,769). The total change in net position for the funds was an increase of $3,428,934, a decrease of $108,147, an increase of $35,845, and a decrease of $83,234. 11 CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2016 (UNAUDITED) The Water and Sewer Fund had an increase in net position as a result of an increase in capital Contributions. The Solid Waste Fund had a decrease in net position due to an increase in contractual services. The Drainage Fund had an increase in net position due to the decrease in transfers out to other funds. The Golf Course Fund had a decrease in net position due to an increase in operating expenses. General Fund Budgetary Highlights During April and May, all accounts are evaluated to determine if 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 yearend estimate, only the cost of maintaining the current base operation is revised as needed. As is customary, during FY2015-16, the City Council amended the budget for the General Fund one time. Adjustments made during the FY2015-16 increased the original revenue budget by $1,443,188 and increased the expenditure budget by $835,435. Due to the actual expenditures being $3,355,540 less than the revised budget and actual revenues being $982,695 more than revised budget, the City was able to transfer $3,686,000 to the General Capital Projects Fund to cash finance future capital projects. The General Fund's operational expenditure reserve increased to 89.17 days from the amended budget of 87.26 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, 2016, amounts to $610,396,625 (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 an increase of 2% in the investment in capital assets for the current fiscal year. Table 3 Capital Assets at Yearend Net of Accumulated Depreciation Governmental Activdies Business -two Activities Total 2011 2015 2916 2015 2016 29.13 Land $137,644912 $131,973,603 $4,072,882 $4,072,882 $141,717,794 $136,046,488 Buildings 99.927,334 102,299,610 - - 99,927,334 102,299,610 Towers, tanks and pump stations - - 103,444,030 101,053,489 103,444,030 101,053,489 other Improvements 228,304085 234,039,688 330,567 342,832 228,634,652 234,382,520 Fumcure and future40 s 9.4M 644,676 - - 409.434 644676 Vehicles 4,372.358 4,613,647 320,744 77,681 4,693,102 4,891,328 Ma&.mery and equpment 4,514,573 3,566,010 1,91 1,943,015 6,452,015 5,509,025 Construction in progress 23,059,097 14,408,875 2059.167 2,182,389 25.118,264 16,591,264 Total $498.231.793 5491.546.112 $112.164.832 $109.612.288 1610.396.625 $601.218.400 The major governmental -type capital improvement projects and developer contributions during the current fiscal year included the following: Developer Contributed street, alley and right of way $8,705,568 Fire Station #2 Reconstruction 4,537,190 Ford Pool Reconstruction 3,100,627 Molsen Farm Land Acquisition 2,339,608 Street construction: Ridgeview - Alma to Stacy 2,272,272 Montgomery Blvd. Extension 1,873,563 FYI Street and Alley Repair 1,192,388 12 CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2016 (UNAUDITED) Business -type capital improvement projects and developer contributions during the current fiscal year include the following: SbSwa Developer contributed water mains and sewer lines $4,636,530 Fountain Park Phase 1 & 2 water & sanitary sewer 2,602,807 Custer Tower interior repaint 328,503 Cottonwood Creek 21" sewer line 253,177 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, 2016 was $191,053,899 of which $130,168,562 was governmental, $10,181,900 was business -type activities and $50,703,437 was component units'. Total gross bonded debt and notes payable was $145,333,147 which includes $86,445,000 of General Obligation (G.O.) bonds backed by the full faith and credit of the government, $450,000 of Certificates of Obligation backed by taxes and revenue generated from the golf course, $5,760,000 secured solely by water and sewer revenue, and the component unit's total of $46,930,000 secured by future sales tax revenue and $5,748,147 of notes payable. Other long-term debt relates to compensating absences, net pension liability, capital leases, and issuance premiums and discounts. In fiscal year 2016, the City issued $6,910,000 of G.O. Refunding and Improvement Bonds and $1,940,000 of Tax Notes. The Allen Community Development Corporation issued $31,235,000 of Sales Tax Revenue and Refunding 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 a 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 3%. Total debt for the Allen Economic Development Corporation decreased by 7%, and the Allen Community Development Corporation debt decreased by 1%. Gross Banded Debt coronal obogaAm Bons CetSficets of Obligafion Bon. Revenue Balls Payade Saks Ta` ae.etsa Bonds Note Payable Total Groes Banded Dem Other LmgTeml Debt ccan'sated ALaences Net Pension usable, Capital leases asuance, Femiten 6 D,smmts Tonal Dtb L Table Outstanding Debt m Yearand Bonds and Other Lang Term Debt Gwemmenta AAA les suaneas� beAtWes Cm 000nintUrvls TSI 2016 able 2016 2215 2016 20152016 29.14 000 $ 8614451 $ 95,680,000 $ - $ - 5 - $ - 5 86,445,000 $ 95690800 450,000 490,400 5,711 6.735.000 459,9994%.W0 8,735,000 46,930.000 461060.000 46.930,000 48.060.000 1,840.000 3806147 4400000 5.748.147 4,400,11W 85915000 96,180,000 5,780,900 6,735000 50,736,147 52,460,000 10.5,333.147155,375041D 5,825,3&5,527,172 SbSwa 631820 - - 6,311,378 6,1511,982 26,532,334 18,740,452 3,287.519 2,327]09 - 29,819.853 21A6B.161 1,700,400 - 252,519 37,811 - - 1,952.519 370A11 7,475,B4 7.258749 1880 95 225,889 (34.710) (166,348) 7,637.002 7,318,292 Term Debit an9 41,333,582 31.526.373 4,421,900 3.556,229 (34,710) (1W,Se6) 45,70752 341919256 Total E 130.188.553 f 127]116.373 510.181.900 E 10.291129 $ W.7D3.437 $52.295.854 f 191.053.899 E 190.291.258 13 CITY OF ALLEN, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2016 (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 recruitment and retention efforts, as well as with its variety of housing options. In addition, the City conservatively manages its budget. The fiscal year 2016-2017 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 2016-2017, reappraisal values for existing real (residential and commercial) properties increased 7.24°/ compared to FY2016. Additional tax abatements on commercial property had a small impact of reducing the taxable property valuation by 0.1%. New construction of residential and commercial property resulted in an increase in valuation of 2.06%. The overall increase in valuation from all categories was 10.28%; however, the property tax revenue increase was budgeted at 8.23% as a result of lowering the tax rate by one cent. Overall sales tax is expected to increase by about 2.83%. As the City's sizeable 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 425 single family permits in FY2017. The population of approximately 94,576 as of September 30, 2016 is expected to reach approximately 125,000 at build out in the next thirteen years. The population projection at build out has been increased recently due to the construction of additional multi -family units, changes to projected 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 $210.79 million for FY2017 for all funds combined. The certified assessed property value for 2016-2017 equates to an overall increase of approximately $1.046 billion (1028%) from the preceding year. The FY2017 tax rate was set at $0.520 per $100 valuation. Of the total tax rate, $0.396273 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 Poore General Obligation Bonds Aaa AAA Certificates of Obligation Aaa AAA Water & Sewer Revenue Bonds Aa2 AAA CDC Sales Tax Revenue Bonds Aa2 EDC Sales Tax Revenue Bonds Aa2 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 recruitment and retention efforts, as well as with its variety of housing options. In addition, the City conservatively manages its budget. The fiscal year 2016-2017 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 2016-2017, reappraisal values for existing real (residential and commercial) properties increased 7.24°/ compared to FY2016. Additional tax abatements on commercial property had a small impact of reducing the taxable property valuation by 0.1%. New construction of residential and commercial property resulted in an increase in valuation of 2.06%. The overall increase in valuation from all categories was 10.28%; however, the property tax revenue increase was budgeted at 8.23% as a result of lowering the tax rate by one cent. Overall sales tax is expected to increase by about 2.83%. As the City's sizeable 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 425 single family permits in FY2017. The population of approximately 94,576 as of September 30, 2016 is expected to reach approximately 125,000 at build out in the next thirteen years. The population projection at build out has been increased recently due to the construction of additional multi -family units, changes to projected 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 $210.79 million for FY2017 for all funds combined. The certified assessed property value for 2016-2017 equates to an overall increase of approximately $1.046 billion (1028%) from the preceding year. The FY2017 tax rate was set at $0.520 per $100 valuation. Of the total tax rate, $0.396273 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, 2016 (UNAUDITED) Ad valorem taxes are the General Fund's largest revenue source and will contribute $44.137 million or 46.70% of the fund's budgeted revenues in FY2017. Appraisal values are established by the Central Appraisal District of Collin County, and collections are certified at 100% by the Collin County Tax Assessor -Collector's office. New retail development and population growth will continue to increase sales tax at a moderate rate of 3.06% over the revised FY2016. The General Fund ended 2015-2016 with an approximate increase of $1,716,488 as compared to the revised budgeted fund balance. This brings the ending fund balance to an equivalent 84.28 days of operating expenditures, which is lower than the amended estimate of 87.26 days, and is within the range of the City's financial policy of 60 to 90 days. The 2016-2017 General Fund expenditure budget reflects a 6.33% increase from the revised 2015-2016 budget. This is primarily due to a compensation market adjustment in employee pay ranges with particular emphasis on Public Safety employees, an update of our microwave connectivity systems, and continued increases in economic development incentives as two major retail developments continued to generate increased property and sales taxes pursuant to the development agreements. These changes will allow the City to 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 FY2017 budget is $3.345 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 2017 with approximately $13.615 million in working capital reserves resulting in 119.89 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 confinues 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 changed. The Solid Waste fund balance at the end of FY2017 is expected to be $2.31 million which is approximately 122 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 fourth year of operafion. After the course was redesigned, it was 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 puffing greens, and a lighted driving range. This last year of operations saw a decrease in revenue attributed to damage to several of our greens because of flooding. During that time, the City installed temporary greens and provided a price reduction to players in order to encourage the use of the facility. Even though revenues didn't meet our initial projections, considering the circumstances, its performance was in line with our revised expectations. 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, 2016 (UNAUDITED) For 2016-2017, 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 FY2017, the City will incur a 1% increase in costs from the revised FY2016 budget. For the FY2017 budget, a contribution of approximately $220 thousand 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 FY2017 budget was increased in both revenues and expenses by over $100 thousand as the number of assets being insured in our Property & Liability portfolio, as well as an increase in Worker's Comp premium. 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 have increased due to the number of hours worked by public safety personnel. Property and liability insurance rates for fiscal year 2017 are expected to increase compared to fiscal year 2016 as there were 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 2016-2017 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, Alen, Texas, 75013, or call (214) 5094626. iL �a CITYofALLEN Aw PEOPIE`IRST RESPECT INTEGRITY DELIVER EXCEL BASIC FINANCIAL STATEMENTS CITY OF PEOPIE FIRSI RESPECT INTEGRITY DELIVER EXCEL CITY OF ALLEN, TEXAS EXHIBIT 1 STATEMENT OF NET POSITION SEPTEMBER 30,2016 PRIMARY GOVERNMENT GOVERNMENTAL BUSINESS -TYPE COMPONENT ACTIVITIES ACTIVITIES TOTAL UNITS ASSETS Cash and cash equivalents $ 33,680,088 $ 12,015274 $ 4.5,695,362 $ 11.832,094 Investrnents 52,338,550 18,014,855 70.353,405 18,662,454 Receivables(net of allowance for umdleclibles) 7,891 6,935,902 14.830.943 3,499,135 Internal balances (1.140.169) 1,140,169 - - Pm,,d fiems aM other assets 776,812 5,050 701,862 6.298 Inrentories - 91,D10 91,010 - ResNptedcashaMcashequwalents - 1,273.025 1,273,025 - Capitelasaets. Nondep,eclable 169,704,009 6.132,049 166,836,1158 9,023.086 Depreciable(net of depreciator) 337,527,784 106,02,783 443,560,567 488,784 TOTAL ASSETS 591,782,115 151,640,117 743.422,232 43,511,851 DEFERRED OUTFLOWS OF RESOURCES Defense charges on refunding 2,432,165 217,746 2,649,911 729,120 Deferred outflows of resources -pennon 11,191,703 11304,015 12,575,710 TOTAL DEFERRED OUTFLOWS OF RESOURCES 131623,868 1,601]61 15,225,829 729.120 LIABILITIES Accounts payable 4.960.835 1,546,889 6,515,724 669,885 Accrued 6abil6¢a 3,431,466 241,261 3,672,727 18,205 Accrued interest payable 417,1330 561361 474,191 111,918 Customer deposit - 1JD5.364 1,705,364 - uneamM revenue 207.135 - 207,135 - pelainage payable 492,616 82.914 575,530 198,471 Nonaumentliabilibes! Due Wmin one year 13,035,298 1,772,004 15,607.302 3,240,690 Due in more Nan one year 1161333,264 8,409,896 124)43,160 47,454,747 TOTAL LIABILITIES 139,686,444 13,814,689 153,501,133 51)OL916 DEFERRED INFLOWS OF RESOURCES Defamed inflows of resources - pension 1,230,633 152.954 1,383,587 TOTAL DEFERRED INFLOWS OF RESOURCES 1,230,633 152,954 1,3313,587 NET POSITION Net samstrnent in capital assets 417,289,061 106,174,191 523,463,272 9,511,87D Resmcted far. Oebtservlce 8%p931 216.664 1,OT3,595 040,713 Capital protects 22,164,716 - 2$164)16 - Tourism 4,359,540 - 4,359540 - Pmk acquisition and development 1,581,633 - 1,581,633 - State and federal grams 249,096 - 249,096 Tax Increment Finarcirg 2,279)28 - 2,Vgjtb8 - OlMrpurposes 993,529 - 693,529 - Unrestricted 14,714,652 32,863,330 47.598,032 (17,813,528) TOTAL NET POSITION $ 464,488,906 $ 139,274,235 $ 603,763,141 $ (7,860,945) 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, 2016 The Notes to Financial Statements are an integral part of this statement General revenues Taxes Property texas, levied for Senator purposes Sales taxes Franchise taxes Hotel motel taxes Other Was Investment earnings Gain on sale of assets Miscellaneous Transfers Total general revenues and transfers CHANGE IN NET POSITION NET POSITION, beginning of year NET POSITION, end of year 18 Charges for Operating Grents Capital Grants Expenses Services and Contributions and Contributions Functionshiro9ram Activities PRIMARY GOVERNMENT: Governmental Activities: General government $ 25.304,811 $ 46])86Public safety 35,199,937 1.001,904 494,328 - Pubiworks 19,083,214 210,607 - 16,039,869 Culture and recreatbn 32,051,598 10,289.465 11051,055 - Gommuntydevelopment 3,251.555 3,216,799 11.877 - Interest on long-term debt 3,356,234 Total governmental activities 119.047.349 15,986721 1.557.260 16,039,869 Business -type Activities Water and sewer 35,04,182 36.335.868 - 6.172,301 Solid waste 5,870.269 6,687,182 - - Dtoinage 1,146,138 1,519.405 - - Golf course 3,089,041 2,705,799 Total business -type activities 45,709.630 47.248.254 6,172,301 TOTAL PRIMARY GOVERNMENT $ 164.756.979 $ fi3.234.975 Eiiiiiiiiiiiii1.557.260 $ 22.212170 COMPONENT UNITS: Allen Economic Development Corporation $ 3,876.981 $ - 3 - $ - Allen Community Development Corporation 9.529.816 TOTAL COMPONENT UNITSE 13.406.799 $ $ $ The Notes to Financial Statements are an integral part of this statement General revenues Taxes Property texas, levied for Senator purposes Sales taxes Franchise taxes Hotel motel taxes Other Was Investment earnings Gain on sale of assets Miscellaneous Transfers Total general revenues and transfers CHANGE IN NET POSITION NET POSITION, beginning of year NET POSITION, end of year 18 NO (Expense) Revenue and EXHIBIT 2 Primary Government Governmental Business - Type COMPONENT A tivlUes ActivNes TOTAL UNITS $ (24,837,025) $ - $ (24,837,025) E - (32,903,625) - (32,903,625) - (2,832,6W) - (2,832,650) - (21,511,078) - (21,511,078) - (22,879) - (22,879) - (3,3W,234) 1,621,012 (3,356,234) (05,4(53,499) - (85.83,498) 197,125 932,957 - 6.903,987 6,903.987 - - 818,913 016,913 - - 373,267 3]3,26] - 4.]90.0]2 (383,242) (383,242) ],]10,925 ].]10.925 $ 185.463.4991 $ ].]10.925 E 1]].]52.5]41 $ E (3,876,901) (9,529.818) S E $ E (13.408.]991 5 54,102,952 $ - $ 54.102,952 $ - 19,274,983 - 19,274,983 10,876,040 7,295,931 - 7,295,931 - 1,607,263 - 1,607,263 - 1,621,012 - 1,621,012 - 735,832 197,125 932,957 200,143 - 15,503 15,W3 - 3,794,277 - 3.794,277 218,184 4.]90.0]2 (4,790,072) 93,222,322 (4,5]],444) 80.644.870 19,302,375 7.7W,823 3,133,401 10.892.304 5,095,578 4%730,083 136.140.754 592,870,037 (13,356,521) 4 464.488.906 $ 139.2]4.235 $ 603763.141 $ (7.4W.945) 19 CITY OF ALLEN, TEXAS BALANCE SHEET GOVERNMENTALFUNDS SEPTEMBER 30, 2016 The Notes to Finanaal Statements are an integral part of this statement 20 GENERAL DEBT CAPITAL GENERAL SERVICE PROJECTS ASSETS Cash and cash equivalents $ 9,331,023 $ 538,398 $ 7,827,767 Investments 12,229,724 672,136 14,598,278 Receivables, net of allowances for uncollectibles: Ad valorem taxes 77,755 20,360 - Sales taxes 3,465,828 - - Accounts recervable - - - Accrued interest 122,106 31,041 77,819 Other 2,558,011 12,826 953,655 Prepaid items 2,129 TOTAL ASSETS $ 27,786,576 $ 1,274,761 $ 23,457,519 LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES LIABILITIES Accounts payable $ 3,605,104 $ - $ 729,254 Accrued liabilities 1,994,989 - 322,971 Unearned revenue 7,700 - - Retainage payable 240,578 TOTAL LIABILITIES 5,607,793 1,292,803 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes 77,755 20,360 TOTAL DEFERRED INFLOWS OF RESOURCES 77,755 20,360 FUND BALANCES Nonspendable Prepaid items 2,129 - - Resincted Deblservice - 1,254,401 - Capital projects - - 22,164,716 Tourism - - - Asset forfeiture - - - State and federal grants - - - Parkacguisltionanddevelopment - - - Taxincrementfinancingagreement - - - Courttechnology 15,770 - - PEG fees 811,867 - - Photo red light enforcement 21,737 - - Cemeten7trusl 58,534 - - Unassigned 21,190,991 TOTAL FUND BALANCES 22,101,028 1,254,401 22,164,716 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES $ 27,786,576 $ 1,274,761 $ 23,457,519 The Notes to Finanaal Statements are an integral part of this statement 20 EXHIBIT 3 GENERAL OTHER TOTAL OBLIGATION GOVERNMENTAL GOVERNMENTAL BOND FUNDS FUNDS $ 5,653,185 $ 3,272,765 $ 26,623,138 9,316,683 5,172,558 41,989,379 98,115 - 3,465,828 416,621 416,621 71,121 27,477 329,564 - - 3,524,492 2,129 $ 15,040,989 $ 8,889,421 $ 76,449,266 $ 158,175 $ 89,454 $ 4,581,987 - 39,723 2,357,683 - 199,435 207,135 246,847 5,191 492,616 405,022 333,803 7,639,421 98,115 98,115 2,129 - - 1,254,401 14,635,967 - 36,800,683 - 4,359,540 4,359,540 - 85,621 85,621 - 249,096 249,096 - 1,581,633 1,581,633 - 2,279,728 2,279,728 - 15,770 811,867 21,737 58,534 21,190,991 14,635,967 8,555,618 68,711,730 $ 15,040,989 $ 8,889,421 $ 76,449,266 21 CITY OF ALLEN, TEXAS EXHIBIT 4 RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2016 Total fund balances - governmental funds $ 68,711,730 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. 498,231,793 Funds comprising the net other post employment benefit asset are not current financial resources and therefore are not reported in the governmental funds balance sheet. 572,683 The following deferred outflows of resources and deferred inflows of resources are not reported in governmental funds: Deferred charges on refunding 2,432,165 Deferred outflows of resources - pension 11,191,703 Deferred inflows of resources - pension (1,230,633) 12,393,235 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. (417,830) Internal service funds are used by management to charge the cost of certain activities, such as insurance and fleet management, to individual funds. The assets and liabilities of the internal service funds ($24,324,149) are net of the amount allocated to business -type activities ($1,140,169) and to capital assets ($8,116,238). 15,067,742 Revenues earned but not available within sixty days of the year end are not recognized as revenue on the fund financial statements. 98,115 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. Long-term liabilities consist of: General obligation bonds (86,445,000) Certificates of obligation (450,000) Tax notes (1,940,000) Capital lease payable (1,700,000) Premiums/discounts (7,475,844) Compensated absences (5,625,384) Net pension liability (26,532,334) (130,168,562) Net position of governmental activities $ 464,488,906 The Notes to Finanaal Statements are an integral part of this statement 22 CITY OF ALLEN PEppl E flRst RESPECT INTEGRITY DELIVER EXCEL CITY OF ALLEN, TEXAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2016 EXPENDITURES - 6,910,000 GENERAL Current - DEBT CAPITAL General govemmeat GENERAL SERVICE PROJECTS REVENUES 32,660,050 - - Ad valorem taxes, penalties and interest $ 4,93$998 $ 12,463,038 $ Franchise taxers 7,295,931 - - Municipalsalestax 18,821,587 - - Licenses,Wi-mics and fees 2,891,704 - - Char9esfor services 12,368,922 - 633,848 Fines 1,579,628 - - GiRs and contributions 832,211 - - Homl I motel fees - - - Intergovernmental 128,237 - t798.t90 Investinent earnings 245,985 68,221 139,631 Miscellaneous 2,249,309 1,326,913 Total revenues 87,352,512 12,531,259 3,898,582 EXPENDITURES - 6,910,000 - Current - - - General govemmeat 22,537,520 - 490,828 PUNk safety 32,660,050 - - PUNkwnrics 3,3]7,872 - 1,279,169 Culture and recreation 23,150,698 - 202,119 Communilydevelopment 2,362,059 - - Capital outlay - - 8,087,691 Debt service (1,551,907) 366,695 5,942,639 Principal retirement - 9.135,0DO - Interest and fiscal charges 20,388,622 3,801,812 22,383,302 TWIeplandirums 84,088,199 12,936,812 10,059,807 Excess (deficiency) of revenues over (under) expenditures 3,264,313 (405,553) (6,161,225) OTHER FINANCING SOURCES (USES) Issuance of refunding balls - 6,910,000 - Issuance of boruls - - - Premium on bonds issued - 995,753 - Payment to refunded bond escrow agent - (7,789,058) - Capitalleaseobligations - - 1,700,000 Transfers in 4,556,699 250,000 4,242,639 Transfers out (6,119,341) - - Proceeds from sale of capital assets 10,735 Total other financing sources (uses) (1,551,907) 366,695 5,942,639 NET CHANGE IN FUND BALANCES 1,712,406 (38,858) (218,586) FUND BALANCES, BEGINNING OF YEAR 20,388,622 1,293,259 22,383,302 FUND BALANCES, END OF YEAR $ 22,101,028 $ 1,254,401 $ 22,164,716 The Notes to Financial Statements are an Integral part of this statement. 23 EXHIBIT 5 GENERAL OTHER TOTAL OBLIGATION GOVERNMENTAL GOVERNMENTAL BOND FUNDS FUNDS $ - $ 702,096 $ 54,104,132 - - 7,295,931 - 453,396 19,274,983 - 172,876 3,064,580 - - 13,002,770 - - 1,579,628 9,137,082 - 832,211 - 1,607,263 1,607,263 - 718,662 2,645,089 120,503 53,420 627,760 (5,634,724) 135,648 3,711,870 120,503 3,843,361 107,746217 66,815 1,006,474 24,101,637 21,736 284,479 32,966,265 208,390 - 4,865,431 600 933,965 24,287,382 - 470.952 2,833,011 7,176,394 144,208 15,408,293 9,135,000 3,801,812 7,473,935 2,640,078 117,398,831 (7,353,432) 1,003,283 (9,652,614) - - 6,910,OOD 1,940,000 - 1,94Q000 4&857 - 1,039,610 - - (7,789,058) - - 1,700,000 - 87,744 9,137,082 (265,149) - (6,384,490) 13,413 24,148 1,718,708 101,157 6,577,292 (5,634,724) 1,104,440 (3,075,322) 20,270,691 7,451,178 71,787,052 $ 14,635,967 $ 8,555,618 $ 68,711,730 24 CITY OF ALLEN, TEXAS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2016 EXHIBIT 6 Net change in fund balances -total governmental funds $ (3,075,322) Amounts reported for governmental activities in the statement of activities are different because - Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount of capital assets recorded in the current period. 15,577,015 Governmental funds do not recognize contributed capital assets. However, in the statement of activities the acquisition value of those assets is recognized as revenue, then allocated over their estimated useful lives and reported as depreciation expense. 14,185,620 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. (23,875,233) 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. (65,410) 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 (6,910,000) Bondsissued (1,940,000) Premium on bonds issued (1,039,610) Payment to refunding bond escrow agent 7,789,058 Issuance of a capital lease (1,700,000) Bond and capital lease principal retirement 9,135,000 Amortization of bond premiums 822,515 Amortization of deferred charges on refundings (416,321) 5,740,642 Current year changes for compensated absences, net pension liability, deferred inflows/outflows related to pensions, and the opeb asset do not require the use of current financial resources and, therefore, am not reported in governmental funds. (1,631,177) 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. 39,384 Internal service funds are used by management to charge the costs of certain activities, such as insurance and fleet management, to individual funds. The net operating and non-operating income and transfers of the internal service funds is reported with govemmental activities net of amounts allocated to business -type activities 864,485 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. (1,181) Change in net position of governmental activities $ 7,758,823 The Notes to Financial Statements are an integral part of this statement. 25 CITY OF ALLEN, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2016 EXHIBIT 7 aUSINERS-TYPE ACTVITIES ENTERPRISE FUNDS GOVEANMENrAL ACTMTES 8OUD. GOIF IH AL SERVICE SEWER 10441E DPAIX.WE COURSE TOTAL FONDS ASSETS CURRENTA8.9ET8 Cnn..a MIM 'Ina.. E 10.03.158 E 1.1]6.590 E 352J20 E G50.90G E 12.4152]0 II ].0..960 I-oneMa 15 m.aw 1.029.689 398.306 - 18014M 10.3G9.1]1 NmomMnMmnN of all- la urcallectieb X¢unp 6.3!0.182 2](,918 K.2 - 860.4,312 MivallMcal 93.248 9.557 2.1 110,110 60.421 Onso 146.887 Kt 61 47,334 - I.-MaNd 91,010 - - 91,010 Man.. I. - - 50.50 N. 202.A'U .... no cea. rywuMend 1.273.025 1,213,V15 T., ..-a Mend. ..619.781 3440.671 .1.1. 4555:1 39.33.116 l7bf RT f2 NONCURRENTPaRIM CKRRL "EET3 Tam 4.a72.eaz - - - 4....2 Cwn4utllm in M'- 2.59.187 - - 2,109,157 NEER OOly imprcuemen6 - 496.132 - d96.132 - Tw.v¢.unMz,and PIMP auticna 186525,652 - - NR525.682 .NZ 853.145 tIO,IM 1515% 1.145.1. 12319.519 .ma, and anal l 5492410 12.359 422231 1.039,.41 1%STN DAPI Tonal cpNal uaW 1990.,1$56 182.710 1.69.917 1.C69.TN 2111266]12 15.]91.25 1s¢ xcumulaled ft..fon (.7.748307) 05,0101 (8]3.402) 1]60.5]11 (89.100.8901 (10.6]5.281) Cpaal aasNa,M W emrmulada depreclNlm 111.23.. 131.7. 496816 MO. I I3 1.532 .,116.. Ta.I mrcumM aaw. 111,256,09 ta].759 491.15 ..I. 112.164832 8116.. TOTRL ASSETS 1M.874... 3.5]..4. 1315.519 T31.1W 150.499.94. 3,]84.]. DEFERRED OUTFLOWS OF RESOURCES clMl.-MMIMn9217.748 217.7. - DMerMIMMMIKMMI -Maim MM¢ 905ao1 107,73 ..542 m1m 1.354.015 TOTAL DEFERRED OUTFLOWS OF RESOURCES 1.1D141 10795 99 542 2]0.6. 1,601,]61 UMIUTIES, DEFERRED INFLOWS OF RESOURCES, AIND NET POSITION CURRENT IIAE RITES accounts paya6M I O...0 338.427 482.1 81.3fi0 1.518..9 3%,845 Acpuea lla6illle¢ 150..3 19!68 19,171 47,719 241,31 M7 Nod.-Me.44510.52,94 52,914 - .-.-pen¢a1N adaMaa- curter 31.00 9,311 El.. 111.670 8.,963 nam. 6ul net rep -...a - - - - - 1.0]3,3. .M... ron.and -- RevenueaoonesPeya.k- curer 1.000,000 - - 1.000.0"0 - Oda.Ileas Mo Mand. -curter - - 13.041 M., - n cMat'Ib 3.31 - - M., - Nzlumr.epoL.peyede 1672134 .,2. 1.]05.4 Tonal want llWlllWe 4.439.618 MRIM 1IRRN 410.3 5404..3 1.1..631 NONCURRENT WSILITES Rexnue Gnda MoyaLM 6.955.Bfi5 - - d.. a.. .P,."- P.. 118.4]. 116,4]8 - NalMaMan,iadRy 2.1]1.57] 251,316 232,699 W1,.S 3.37.519 - Pawedmm ema.a aa,- 13.867 4.628 3.95 27.an 50.031 To.I...unarm 1DINT".. 7,141,312 23.774 2..493 7`.39 8.403.986 TUTAL UNNITNES 11.Ed"I 602.4"0 355.IM 1,1..337 13810,8. DEFERRED INFLOWS OF RESWRCES .1.Ml- of ---pension 102,1.] 11.355 10.53 21.] 152.9% TOTAL DEFERRED OUTFLOWS OF RESOURCES 102.447 11,33 1053 26.7 152,8. NET POSITION (DEFICIT) Nat wMer In pl.1 a.. 105,516,957 137.759 4%.515 .1,110 1.,1]4191 6116.2. RnNcled 1. M- Ona paMpl an. int.ml 21... 216.664 W,mMOe. 3,.1811 2%4fi3 552%7 (235,]69) 317/8211 1837,911 TOTALIETPOMTON(OEFICO( E 134,5154. E 2,982411 E 1,049.362 $ (213.1.) E 1m,1S4.. E 24.32410.9 The Notes W Fimndal Statements are an integral part of 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, 2016 Amounts reported for business -type activities in the statement of net position are different because: Total net position per statement of net position $ 138,134,066 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 GASS 34. 1,140,169 Total net position of business -type activities The Notes to Financial Statements are an integral pad of this statement 27 $ 139,274,235 CITY OF ALLEN, TEXAS EXHIBIT 9 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2016 BUS W ESSbPE ACTIVITIES ENTERPRISE FUNDS GOVERNMENTAL ACTMT IES WATERAND SOLID GOLF INTERNAL SEWER WASTE DRAINAGE COURSE TOTAL SERVICE FUNDS OPERATING REVENUES Clsr9¢. si. eM.'. walssalea $ x0s¢,ee0 5 - i $ - $ a.. an 9 Sero'[Ba9e-s 14.M.692 - - 14,23;692 Lmnecppn iees ase.l. - a.1. - GaR;e<dlatims SAIll x - 661],1¢2 S—.Tager 83.84 - 0.5,]00 xAMNAMO 3.429,359 12,739418 Oalnzgelces - 1.0.9.435 - 1453035 - Muuuancws 3RL4. ]0,003 20.938 a. 4]3,99 19]428 Taal[paring rewnuef 3&335,989 6,617,182 1.519,05 4.7es 412.2. 12.934818 OPERATING EXPENSES Pwmrrelaercms d..'ES SAM'. 0".14 1514861 1412100 314,114 C -...1l A-- 235N9.9d] RIPS. 91.95 613161 29,814998 1216.764 Walmm�anm 39 A. V. 38]A5C 119793 9N,536 Supplles mm M.T85 ]4.49] 231,381 SARM pepredatim S.A. 42]1 29.69 I$RW 6.l.'1 INSA9 GNe' 29,61x 8510 5014 81,E 410312 Thal AN.,..npanse. 34251.394 SV02. 1.146,1M 3.099,.1 4493$09 14 %17,060 OPERATING INCOME (LOSS) 1,084.4S! 816.913 S73 61 (300,22) 1.8914E 11,51044) NON-OPERATING REVENUES EXPENSES) rmpnml zemlrys 1]1,115 17,916 5.096 8 1921. IR.S. eslnpense (212,891) (24,891) Ganm415ppsal of caplli amM 1593 Is. 148.8.4 Tial —'.n. mvnux lnWnxal (23283) 17,916 5.496 8 1x9) 2939 INCOME (LOSS) BEFORE CAPTAL CONTRIBUTIO N S AN D TROOPSHIPS 1,06141 Was, 3.,353 1.333) 1A91,189 (1,312,912) CAPITAL CONTE IBNIONS AND TRANSFERS oaMnpm-I I— l..7Tl - - 1 711 Capumc0nvlfiwms 4.63569 - 4.63kS1T I.— In M,35s - 330.aao 330,365 2W]n8D T,ar¢ w1 (3,111 (W.9Ifi1 (.29n (5,Is.7) Thal mMUI —..1— Mrd I—MAn 2.36].]13 (W.8Tfi1 (342.50a 3J3.IXe 1 38242 2,00],480 CHANGE IN NO POSITION 3425&. (1..147) ..S (833%) 0273,SA 84,568 NO PORTION, BEGINNING OF YEAR 1T.WWASE 31159 1.)351] 0 -,En 1MIRWA61 2399.591 NET POSITION. END OF YEAR 5 134A15d32 5 23%2,11 5 last 2 S 1x..131 5 131,1MAM i MOSIJ49 The Notes l0 Fioandal 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, 2016 Amounts reported for business -type activities in the statement of activities are different because: Net change in fund net position -total proprietary funds $ 3,273,398 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. (139,917) Change in net position of business -type activities $ 3,133,481 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, 2016 EXHIBIT 11 CASH FLOWS FROM INVESTING ACTIVITIES R,nAazec inreSMent deparle5 Mdal on Investments NescaN proNdM be(usatl M) Ieyout Vnotation NET CHANGE IN WSH AND CASH EQUIVALENTS CASH MD CASH EOU WALEMS, BEGINNING OF YEAR CASH MO CASH EOUWALEMS, END OF YEAR RECONCRUITIOX OF OPERATING INCOME ILOSS)TO NET CASH PROVIDED BY (USED IN) OPERATING ACTMmES Net andengmwme fans) ALI mMen6 to reconnte opiating Fops (lass) to an wn pecodel by (used in) opened, xUNB¢ oapreci anon and emendation espdsee Change In a55eb and Ilsbilants accounts reolopen gbnreaaeabla Frepdds Invioneded Debould oul-pealm Acwanb pal Rdainage payable Acm Ntubalia Nat lsenmm badtity G peaatailabedca Oepc4ib DeapredlnMn- pension Tell atjueMenb Net Cale provided by (esed In) epdea ng aatNt« NONCASH INVESTING ACTIVITIES: CtanW in be fair value of bod mdib XIXILASH FINANCING ACTrvmE4: Ioieaeon W eental lease oda indeas W codes assets from dewlopen (39.833) (105.800) SUSINESSi ACTIVITIES 29,052 (147.587) (758401) 1".08 17.016 ENTERPRISE FUNDS 8 188.501 GOVERNMENTAL 104.835 (87,944) 2,302 8 18504 1406823) ACTMTIES (282,111) WATERAXD SOLID (1.241.988) GOLF 12121.550 INTERNAL 401,131 SEWER WASTE DRAINAGE COURSE TOTAL SERMCEFUNOS CASH FLOWS FROM OPERATING ACTIVmES $ 13388238 E 7,056.950 (5X119)(54343) (149.164) Cash—aunt Som aa.. S 37.985.594 f Sall It 1,621.]58 $ 2.705.]8] E 48,900.851 S Casa rrdvi M1om Iranaec0onawth ouserfunds13.183.M 330,049 8,318 CW and to annoyance for servlres (4,594044) (sal (55m) (1.481,5]9) (],142.623) 014,414) CW pled for goods sued s— (27,163,313) (5,28855]) (531,024) (1,50],437) (34.488,231) (1,c6RW1) C pale fa tldrm - 17.319 K2,17 14.247 8.881 111.481.b4) Xan cash naNtlel by fusee In) Winning actiN5e5 RY1B0.17 859249 437,634 (261]231 7.281 318,589 CASH FLOWS FROM MON{MITAL - 1].8%1 (858) >1303 12.4031 FINANCING ACTIVITIES 5,141.853 T2335 04.287 120.018 TrnNersinf—Hourbod, Name E 6138137 $ 310,000 336,356 2,037,480 TrdWersMlodhdfunes (3840953) 1502,9201 (342,408) - (5.136.437) f = Net cash provMal4(uses In) non -capital financing adeddes (8850,5081 19425081 (342508) 300,000 (4.]93.0n) 2(32480 CASH FLOWS MOM CAPITN MD S $ 17417 S 114n E 4,036,530 $ RELATED FINANCING ACTIVITIES T— f S 4.6#530 Pnnapal paid on rerenoe bond mmulba (9]5,500) - - - (W5.0N1 - InlermtandteespaidonlonVenndebl (222712) - (u2.7121 Acquisition and wnstrucbm V capiall awls (884188) (140040) (1481351 - (3,979,741) (2509,572) Procal ft. sale alcanal a as. 15502 15,502 148,8]0 pounds lease Paymenl - - (131.]3]) (13,1737) CoonWms food dertk9ers 1,s35.71t 1.5150) NM cash veal In capital and Maned financial ecMlNp (3,339.805) (140.410) (im.1m) (134,]37) (3,750,0171 (2362]02) CASH FLOWS FROM INVESTING ACTIVITIES R,nAazec inreSMent deparle5 Mdal on Investments NescaN proNdM be(usatl M) Ieyout Vnotation NET CHANGE IN WSH AND CASH EQUIVALENTS CASH MD CASH EOU WALEMS, BEGINNING OF YEAR CASH MO CASH EOUWALEMS, END OF YEAR RECONCRUITIOX OF OPERATING INCOME ILOSS)TO NET CASH PROVIDED BY (USED IN) OPERATING ACTMmES Net andengmwme fans) ALI mMen6 to reconnte opiating Fops (lass) to an wn pecodel by (used in) opened, xUNB¢ oapreci anon and emendation espdsee Change In a55eb and Ilsbilants accounts reolopen gbnreaaeabla Frepdds Invioneded Debould oul-pealm Acwanb pal Rdainage payable Acm Ntubalia Nat lsenmm badtity G peaatailabedca Oepc4ib DeapredlnMn- pension Tell atjueMenb Net Cale provided by (esed In) epdea ng aatNt« NONCASH INVESTING ACTIVITIES: CtanW in be fair value of bod mdib XIXILASH FINANCING ACTrvmE4: Ioieaeon W eental lease oda indeas W codes assets from dewlopen (39.833) (105.800) (1,897) 29,052 (147.587) (758401) 1".08 17.016 4,199 8 188.501 SRB% 104.835 (87,944) 2,302 8 18504 1406823) (813.118) (282,111) (48,807) (9]8521 (1.241.988) (42X058) 12121.550 1.458,701 401,131 548850 14.530,287 7,486,006 $ 11.306.481 S 1,178,590 $ 352324 $ 450.904 $ 13388238 E 7,056.950 S 1,084,46c $ 816.913 $ 373187 S (3011 S 1.891 S (1.51 800523] RT]1 29,052 130,850 81520)0 1.51 1,04X728 2585 2,153 (0) 1.Sai - 124411 - - (24411 09.120) I5D,398) (e) - I4ro.9D]) (5X119)(54343) (149.164) (now) (2.841.180) 38,081 052 (8].145) (2,060,603) 330,049 8,318 8,318 - 27,170 (].102) 8(Us 0.059 3885 - et].041 (861) t84a34 857,728 - 17.319 K2,17 14.247 8.881 13.710 61,174 - 1].2]1 28]5 law 10,316 - 1].8%1 (858) >1303 12.4031 00.209 5,141.853 T2335 04.287 120.018 5.383,575 1,000.81 E 6138137 $ fill $ 437.6141 $ 1203.2231 f 7,289.007 E 316,550 $ (],390) $ - $ - f = $ (7.650) E E $ S $ 17417 S 114n E 4,036,530 $ T— f S 4.6#530 Re ncinatanotM lDashWBomW Onopwl08n CuhaMwncyuivelmb-anent S 10.035458 S 1.1]8.590 S 352,324 $ 440,905 $ 12.015274 S 7.056,050 Rounded open and cash wurvaldRs 1.271M5 1,217.025 CASH AND WISH EQUIVALENTS, ENO OF YEAR $ 11,30,431 $ 1.175.590 $ 353.324 S 450,504 $ 13.25l E 7.051 The Notes to Finantlal Statemert5 are an integre) part of this statement. 30 CITY OF ALLEN, TEXAS STATEMENT OF NET POSITION COMPONENT UNITS SEPTEMBER 30,2016 9,023,086 - EXHIBIT 12 Furniture and fixtures ALLEN ALLEN 66,075 Improvements other than buildings ECONOMIC COMMUNITY 3,128,689 Total capital assets DEVELOPMENT DEVELOPMENT 12,217,850 Less: accumulated depreciation CORPORATION CORPORATION TOTALS ASSETS 9,511,870 9,511,870 CURRENT ASSETS 9,511,870 9,511,870 Cash and cash equivalents $ 8,029,021 $ 3,803,073 $ 11,832,094 Investments 12,332,494 6,329,960 18,662,454 Sales taxreceivable 1,689,157 1,689,157 3,378,314 Accounts receivable 700 11,503 12,203 Accrued interest receivable 70,328 38,290 108,618 Prepaid items 6,298 - 6,298 Total current assets 22,127,998 11,871,983 33,999,981 NONCURRENT ASSETS CAPITAL ASSETS Land 9,023,086 - 9,023,086 Furniture and fixtures 66,075 - 66,075 Improvements other than buildings 3,128,689 3,128,689 Total capital assets 12,217,850 - 12,217,850 Less: accumulated depreciation (2,705,980) (2,705,980) Capital assets, net of accumulated depreciation 9,511,870 9,511,870 Total noncurrent assets 9,511,870 9,511,870 TOTAL ASSETS 31,639,868 11,871,983 43,511,851 DEFERRED OUTFLOWS OF RESOURCES Defamed charges on refunding 729,120 729,120 TOTAL DEFERRED OUTFLOWS OF RESOURCES 729,120 729,120 LIABILITIES AND NET POSITION CURRENT LIABILITIES Accounts payable 269,488 400,397 669,885 Retainage payable - 198,471 198,471 Accrued interest payable 55,177 56,741 111,918 Accrued and other babilibes 18,205 - 18,205 Revenue bonds payable - current 1,533,690 1,715,000 3,248,690 Total current liabilities 1,876,560 2,370,609 4,247,169 NONCURRENT LIABILITIES Revenue bonds payable (net of unamortized discounts) 17,934,747 29,520,000 47,454,747 Total noncurtent liabilities 17,934,747 29,520,000 47,454,747 TOTAL LIABILITIES 19,811,307 31,890,609 51,701,916 NET POSITION Investment in capital assets 9,511,870 - 9,511,870 Restricted for debt service 696,536 144,177 840,713 Unrestricted 1,620,155 (19,433,683) (17,813,528) TOTAL NET POSITION $ 11,828,561 (7,460,945) The Notes to Financial Statements are an integral Part of this statement 31 CITY OF ALLEN, TEXAS STATEMENT OF ACTIVITIES COMPONENT UNITS FOR THE YEAR ENDED SEPTEMBER 30, 2016 EXHIBIT 13 COMPONENT UNITS Allen Ecanomc Development COmare9m Allen limmunity Developmnnt Co,pa,,tcn TOTAL COMPONENT UNITS f 3.876,981 f - $ S Sunni) f - $ (3,876,981) 9529.018 (8,5ID,818) IRSR8,8181 f 13406.798 f $S 13.876.8811 f 18.529.8181 E 113.408.7991 Gaa—lre Bales Mae, Inlereet On lnveatmenk Mlscellanmus Tatty Oawl r ...... CHANGE IN NET POSITION NET POSITION, beginning of Liver NET POSITION, and of "or The Notes to Financial Statements are an Integrzl part of this statement. 32 8 9.438.024 $ 9.438 024 NM Examine) Rol and Program Revenum Chase. In NA P.15. 25,023 193,161 COMPONENT UNITS ALIEN ALIEN 0.594,802 Operates ECONOMIC COMMUNITY Charges Nr Gnual OEVELOPMENT DEVELOPMENT Espen. Services Contributions CORPORATION CORPORATION TOTALS Fled.Pno9rem ACLmBes COMPONENT UNITS Allen Ecanomc Development COmare9m Allen limmunity Developmnnt Co,pa,,tcn TOTAL COMPONENT UNITS f 3.876,981 f - $ S Sunni) f - $ (3,876,981) 9529.018 (8,5ID,818) IRSR8,8181 f 13406.798 f $S 13.876.8811 f 18.529.8181 E 113.408.7991 Gaa—lre Bales Mae, Inlereet On lnveatmenk Mlscellanmus Tatty Oawl r ...... CHANGE IN NET POSITION NET POSITION, beginning of Liver NET POSITION, and of "or The Notes to Financial Statements are an Integrzl part of this statement. 32 8 9.438.024 $ 9.438 024 f 18.876W 131.755 76 Us 208,143 25,023 193,161 218184 0.594,802 9,707,573 19302,375 5.717,821 177,755 489595 6.110.740 119,4117,2811 113,356.5211 S it626.561 S 118.268.5061 $ I7A609451 CITYOFALLEN PEppl E FIRST RESPECT INTEGRITY DELIVER EXCEL NOTES TO FINANCIAL STATEMENTS CITY OFALLEN PEppl EFIRST RESPECT INTEGRITY DELIVER EXCEL CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 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 specific 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, 2016 NOTE 1. 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. W CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE1. 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, 2016 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. Facility Maintenance Fund - The Facility Maintenance Fund accumulates resources to address large repairs and aging facility infrastructure. The accumulation of resources will help address major building repairs and prevent building deterioration. 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. Govemmental 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. 36 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES —CONTINUED Measurement Focus and Basis of Accounting - Continued 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. 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 Citys 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 $9,981,944,224. Taxes are due on October 1 and are 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, 2016 was $0.53 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. 37 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES —CONTINUED Property Taxes - Continued 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. 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 Interfund 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, 2016, ACDC contributed $387,858 and AEDC contributed $101,780 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 signity 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 both the measurable and available criteria have been met (generally when collected). M1 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2018 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES —CONTINUED 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 acquisition 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. Assets capitalized have an original cost of $5,000 or more and over one year of useful life. 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 -owned 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 to/deductions 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. 88, Accounting and Financial Reporting for Pensions. 39 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Deferred OutflowsMflows 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 outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) 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. • 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 rive 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 period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has three types of items that qualify for reporting in this category. In the statement of net position, the City reports the difference in expected and actual pension experience and the changes in actuarial assumptions. These are 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 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 form, 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, 2016 NOTE1. 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 tern 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 can be assigned by the City Manager or the Chief Financial Officer. This classification includes insurance deductibles, encumbrances, program start-up casts, 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 60 to 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). Deficit Fund Equity At September 30, 2016, the Golf Course Fund had a deficit balance in net position of $213,139. This deficit will be eliminated when resources are obtained (e.g. from revenues and transfers in). 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, 2016, with collateral required by state statutes. At yearend, the carrying amount of the City's deposits was $10,020,210 and the bank balance was $12,951,518. Of the bank balance, federal depository insurance covered $250,000 and the remainder was covered by collateral held by the pledging financial insttution's agent in the City's name. The City's petty cash balance at September 30, 2016 was $46,025. The carrying amount of deposits for ACDC and AEDC, discretely presented component units, were $398,062 and $1,034,757, respectively, with no corresponding bank balances as they are pooled with the City's deposits. AEDC's petty cash balance at September 30, 2016 was $100. 41 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30.2016 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 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. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. GASB Statement No. 72, Fair Value Measurement and Application provides a framework for measuring fair value which establishes a three-level fair value hierarchy that describes the inputs that are used to measure assets and liabilities. • Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets that a government can access at the measurement date. • Level 2 inputs are inputs—other than quoted prices included within Level 1—that are observable for an asset or liability, either directly or indirectly. • Level 3 inputs are unobservable inputs for an asset or liability. 42 Maximum Authorized Maximum Investment Investment Type Maturity In One Issuer Certificates of Deposit 5 years None Repurchase Agreements 5 years None U. S. Treasure Obligations 5 years None Municipal Investment Pool 5 years None Commercial Bank Savings Account 5 years None Money Market Mutual Fund 5 years None U. S. Government Securities (non -callable) 5 years None U. S. Government Securities (callable) 5 years None U. S. Government Sponsored Corp. 5 years None Instruments: non -callable U. S. Government Sponsored Corp. 5 years None Instruments: callable Commercial Paper 5 years None Bankers Acceptance 5 years None Guaranteed Investment Contracts 5 years None State or Local Governmental Obligations 5 years None The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. GASB Statement No. 72, Fair Value Measurement and Application provides a framework for measuring fair value which establishes a three-level fair value hierarchy that describes the inputs that are used to measure assets and liabilities. • Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets that a government can access at the measurement date. • Level 2 inputs are inputs—other than quoted prices included within Level 1—that are observable for an asset or liability, either directly or indirectly. • Level 3 inputs are unobservable inputs for an asset or liability. 42 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE 2. DEPOSITS, INVESTMENTS AND INVESTMENT POLICIES —CONTINUED The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. If a price for an identical asset or liability is not observable, a government should measure fair value using another valuation technique that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs. If the fair value of an asset or a liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement. The City's investments are measured as presented in the table below. The City's investment balances, weighted average maturity, and credit risk of such investments are as follows - ImesMenl Troe Primary Crn'anMat AEW ACDC TWI 8epbmbar 30. 2016 Sill oMx observable di (12) Weighed %ot Tgal Ary. all InresMeft (Years) Cradll Facing- Inrestr entl Measured at AmMzeE Co I. TexPool $ 18,882,122 $ 6994,153 $ 3,405,011 $ 28291,296 $ - 2148% 012 A oke InvaaMeffi Meaa ped a1 NAV TexSTAR 3.001,989 - - 3,001,969 - 220% 012 Aki Teras CUSS 15.018.061 - - 15,018.061 - 1102% 015 AAAm ImeaMmb Measured at Cast. C.r Anda IDepots 33.153.322 - - 33,15J.322 - 2432% 035 Na Inmtal Subject to Fair Value, US Agencies 36,311,98] 12,048,014 6.183,944 54,573,925 51,573.925 4003% 163 Al Municipal Bonds 858.116 284.481 146,016 1188,613 1,288.613 095% 114 M - Total $107.255.557 $19.328,658 $ 9,73pt,971 $138317,186 $55.862.538 Investment Pools and certificates of deposits are measured at amortized cost, net asset value, or cost and are not required to be reported by levels in the table. Tel is an external investment pool measured at amortized cost. In order to meet the criteria to be recorded at amortized cost, investment pools must transact at a stable net asset value per share and maintain certain maturity, quality, liquidity and diversification requirements within the investment pool. The investment pools transact at a net asset value of $1.00 per share, have weighted average maturity of 60 days or less and weighted average life of 120 days or less, investments held are highly rated by nationally recognized statistical rating organization, have no more than 5% of portfolio with one issuer (excluding US government securities), and can meet reasonably foreseeable redemptions. TexPool has a redemption notice period of one day and no maximum transaction amounts. The investment pools' authority may only impose restrictions on redemptions in the event of a general suspension of trading on major securities market, general banking moratorium or national or state emergency that affects the pools' liquidity. Texas CLASS and Tel investment pools are external investment pools measured at their net asset value. Texas CLASS and Tel strategy are to seek preservation of principal, liquidity and current income through investment in a diversified portfolio of short-term marketable securities. The City has no unfunded commitments related to the investment pools. Texas CLASS and TexSTAR have a redemption notice period of one day and may redeem daily. The investment pools' authorities may only impose restrictions on redemptions in the event of a general suspension of trading on major securities market, general banking moratorium or national or state emergency that affects the pools' liquidity. 43 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE2. DEPOSITS, INVESTMENTS AND INVESTMENT POLICIES—CONTINUED The Texas Comptroller of Public Accounts is the sole officer, director, and shareholder of the Texas Treasury Safekeeping Trust Company, which is authorized to operate TexPool. In addition, the TexPool Advisory Board advises on TexPool's Investment Policy. This Board is composed equally of participants in TexPool and other persons who do not have a business relationship with TexPool who are qualified to advise TexPool. Texas CLASS (Texas Cooperative Liquid Assets Security System) was organized in March 1996 under a trust agreement executed by and among Texas local governmental entities in accordance with the Public Funds Investment Act, and the Texas Government Code and remains in full compliance with Chapter 2256. The fund is administered by Public Trust Advisors, LLC and is rated AAAm by Standard & Poor s Rating Services. 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. 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 terns of the credit ratings issued by a nationally recognized statistical rating organization. The City reduces the risk of issuer default by limiting investinents to those instruments allowed by the Public Funds Investment Act, Chapter 2256, Texas Government Code. The City's investments in U.S. Agency securities (FFCB, FHLB, FHLMC, and FNMA) are rated AA+ by Standard & Poor's and Aaa by Moody's Investors Service. The City's investments in municipal bonds are rated AA- by Standard and Poors and Aa3 by Moody's Investors Service. Investments in TexPool, TexSTAR, and Texas CLASS carried a credit rating of AAAm by Standard & Poor's as of September 30, 2016. 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, 2016, with the exception of funds invested in TexPool, TexSTAR, or Texas CLASS, the following table represents 5% or more of the City's investments. Issuer Investment Type Reported Amount Percentage FNMA Federal agency securities $ 12,437,327 9.12% FFCB Federal agency securities 20,518,288 15.05% FHLB Federal agency securities 12,051,750 8.84% FHLMC Federal agency securities 9,566,560 7.02% 44 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 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 party. 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, 2016, the City's deposits with financial institutions above the federal depository limits were fully collateralized. NOTE 3. RECEIVABLES Receivables at September 30, 2016 for both governmental and business -type activities, including the applicable allowances for uncollectible accounts, consist of the following: General Fund Debt Service General Capital Projects GO Bond Fund Nonmajer Governmental Funds Water and Saver Solid Waste Damage Ge8 Course Internal Sernce Funds Gross Receivables Less: Allowance for Uncclledibles Total Net Receivables, PnmaryGovernment Component Units Property Sales Accrued (368,741) Tax Taxes Accounts Interest Other Total $ $ 3,378,314 E $324,315 $ 3,465,828 $ - $ 122,106 $2,558,011 $ 6,470,260 127,960 - - 31,041 12,826 171,827 - - - 77,819 953,655 1,031,474 - - - 71,121 - 71,121 - - 416,621 27,477 - 444,098 - - 6,354,763 93,248 - 6,448,011 - - 277,948 9,557 146,887 434,392 - - 65,242 2,391 441 68,074 6 6 60,421 60,421 452,275 3,465,828 7,114,574 495,181 3,671,826 15,199,684 (354,160) - (14,581) (368,741) $ 98,115 $ 3,465,820 $ 7,099,993 $ 495,181 $ 3,671,826 $ 14,830,943 $ $ 3,378,314 E $ 108,618 $ 12,203 $ 3,499,135 The Water and Sewer Fund accounts receivable include unbilled charges for services rendered through September 30, 2016. 45 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE 4. CAPITAL ASSETS Capital asset activity for the year ended September 30, 2016 was as follows: Governmental Activities Balance Balance September 30, Aeluatmental September 30, 2015 Addition, Medal0on. Tren.fc. 2016 Govammental Funi General capital assets not being depreciated: Land and tend impromments $ 131,973,606 $ 5.671,306 $ - $ - $ 137,644,912 construction in progress 13.702,688 16,776.643 - (9,o3fi,560) 22,442,771 Tool capital assets not being depreciated 145,676,294 22,447,949 - (8,01 160,087,683 General capital assets being depreciated Buildings 131,330,347 325.000 (389738) 674.062 131,939,671 Improvements other than buildings 484,877,368 6748,871 7,290,537 498,916776 Furniture and fixtures 7,973,242 - (14,520) - 7,958,722 Vehicles 2,477,078 74,113 (211,327) - 2,3391 Llbmrybooks 1,862785 - (230.659) - 16321126 Nachman, and equipment 11,421,675 166,702 (295,927) 71,961 11.364.411 Total capital assets being depreciated 639,942.495 7.314,686 (1,142,171) 8,036.560 654,151,570 Les. accumulated depreciation for. Building. (29.030,737) (3,328,876) 347,276 - (32.012,337) Improvements other than buildings (250,837,680) (19,775,011) - - (270,612,691) Furniture and humane (7,919,493) (35,451) 14,520 - (7,M,424) Vehicles (2,167,962) (78,647) 188,379 - (2,058,230) Ldi books (1,271,858) (199790) 230,659 - (1,240,98)) Machinery and equipment (10,097,495) (457,458) 295,927 (f0.259.026) Total accumulated depreciation (301,325,225) (23,875,233) 1.076761 (324,123.697) Total general capital assets being depreciated, net 338,617,270 (16,560,547) (65,410) 8.0361560 330,027,873 General capital assets, net $ 484.293.564 $ 5,887,402 8 (fi5,410) E $ 490,115,556 46 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE 4. CAPITAL ASSETS —CONTINUED Balance Balance Septembei Adjustments? September 30, 2015 Additions Dispositions Transfers M16 Internal Service Funds: Internal service funds assets not being depreciated Constri In progress $ 708,187 $ 741,032 $ $ (830,893) $ 618,326 Total capital asset not being depreciated 706,187 741,032 (830,893) 616,326 Internal serace $ 4,072,882 $ - $ - It - $ 4,0Y2,882 assets being depreciated 2,182389 3,118,139 (3241,361) 2,059,167 Vehicles 11,693,051 968,623 (393,155) - 12,268,519 Machinery and equipment 4,335,153 799,917 (59,283) 830,893 5'athi 80 Total internal service asset being depreciated 16,021 1,761 (452,438) 830.893 18,175,199 Less accumulated 5,232,338 550,584 (290,512) - 5,492.410 depreciation for: 867,955 24,445 (39,255) 853,145 Vehiles (7,386520) (1,182430) 393,155 - (8,177,795) Machinery and equipment (2,093,323) (483,452) 59,283 3,241,381 (2,497,492) Total accumulated depreciation (9,481,843) (1,645,882) 452,436 - (10,675,287) Total Internal service funds (3,729,997) (433.252) 290,512 - (3,8M,737) capital assets being depreciated, net 6,546381 122,658 39.255 830.893 7,499,912 Total Internal service funds capital assets, net 7,252,548 863,690 8,118,238 Governmental activities capital assets, net $ 481,546,112 $ 8,751,092 $ (65,410) $ $ 491 Business -Type Activities Water and sewer Activii Capital assets not being Eepreclatetl "no $ 4,072,882 $ - $ - It - $ 4,0Y2,882 Canstructlon in progress 2,182389 3,118,139 (3241,361) 2,059,167 Total capital assets not being depreciated 1 3,118,139 (3,241,361) 6.132,049 Capital Assets Being depreciated: Towers, taxi&pump. stations 171 4,838,529 (1,311,355) 3,241,381 186524682 Machinery and equipment 5,232,338 550,584 (290,512) - 5,492.410 Vehicles 867,955 24,445 (39,255) 853,145 Total carnal assets bean, depreciate! 186,059,440 5.211,558 (1,641,122) 3,241,381 191 Less accumulated depreciation for. Towers, tanks,&pumps stations (78,905,658) (5,487,351) 1,311,355 - (83,081,656) Machinery and equipment (3,729,997) (433.252) 290,512 - (3,8M,737) Vehicles (796274) (42,797) 39.255 insane) Total accumulated depreciation (81 (5,963,400) 1,641,122 (Si Total capital assets being depreciated. net 102,633,511 (751,842) 3241,361 105,123,030 Water and sewer activities capital assets, net $ 106886782 $ 2,366,297 $ $ $ 111,255,079 47 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE4. CAPITAL ASSETS -CONTINUED Less accumulated depreciation for Machinery and equipment Balance (1,249) Balance (7,988) September 30, (12,923) September 30, 12,923 2015 Additions Dispositions 2016 Solid Waste Activities depreciation Capital assets being depreciated: (8,271) 13,159 (15,010) Machinery and equipment $ 12,595 $ - $ (236) $ 12,359 Vehicles 12,923 140,440 (12,923) 140,440 Total capital assets $ 137,789 being depreciated 25,518 140,440 (13,159) 152,799 Less accumulated depreciation for Machinery and equipment (6,975) (1,249) 236 (7,988) Vehicles (12,923) (7,022) 12,923 (7,022) Total accumulated depreciation (19,898) (8,271) 13,159 (15,010) Solid waste activities capital assets, net $ 5,620 $ 132,169 $ - $ 137,789 Drainage Activities: Capital assets being depreciated: Other improvements $ 496,132 $ - $ - $ 496,132 Vehicles 31,379 134,734 (14,559) 151,554 Machinery and equipment 445,389 11,401 (34,559) 422,231 Total capital assets being depreciated 972,900 146,135 (49,118) 1,069,917 Less accumulated depreciation for: Other improvements (153,300) (12,265) - (165,565) Vehicles (31,379) (6,736) 14,559 (23,556) Machinery and equipment (407,889) (10,651) 34,559 (383,981) Total accumulated depreciation (592,568) (29,652) 49,118 (573,102) Drainage activities capital assets, net $ 380,332 $ 116,483 $ - $ 496,815 Golf Course Activities: Capital assets being depreciated: Machinery and equipment $ 1,023,275 $ 16,445 $ - $ 1,039,720 Total capital assets being depreciated 1,023,275 16,445 - 1,039,720 Less accumulated depreciation for: Machinery and equipment (625,721) (138,850) - (764,571) Total accumulated depreciation (625,721) (138,850) - (764,571) Golf course activities capital assets, net 397,554 (122,405) - 275,149 Business -type activities capital assets, net $109,672,288 $ 2,492,544 $ $ 112,164,832 EU CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE4. CAPITAL ASSETS—CONTINUED U11 Balance Balance September 30, September 30, 2015 Additions Disposl6ons 2016 Component Units: Capital assets not being depreciated: Land $ 8,993,086 $ 30,000 $ - $ 9,023,086 Capital assets being depreciated Improvements other than buildings 3,128,889 - - 3,128,689 Furniture and fixtures 66,075 60,075 Total capital assets being depreciated 3,194,764 3,194,764 Less accumulated depredation for: Improvements other than buildings (2,486,573) (153,333) - (2,639,906) Furniture and fixtures (66,075) (66,075) Total accumulated depreciation (2,552,648) (153,333) (2,705,981) Total capital assets being depreciated, net 642,116 (153,333) 468,783 Component units capital assets, net $ 9,635,202 $ 123,333 $ - $ 9,511,869 Depreciation expense was charged as direct expense to programs of the primary government and component units as follows: Governmental activities: General government $ 1,073,541 Public safety 722,143 Publicworks 14,051,606 Culture and recreation 8,023,973 Community development 3,970 Total depreciation expense -General capital assets 23,875,233 Internal Service Funds 1,645,882 Total depreciation expense- Governmental activities $ 25,521,115 U11 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE4. CAPITAL ASSETS—CONTINUED Business -type activities Water and sewer $ 5,963,400 Solid waste 8,271 Drainage utility 29,652 Golf course 138,850 Total depreciation expense - Business -type activities 6,140,173 Component units: Allen Economic Development Corporation $ 153,333 Outstanding commitments at September 30, 2016, under authorized construction contracts were $2,064,134. 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, 2016, bonds payable consisted of the following individual issues: General Obligation Sands: $1,595,000 Series 2006 Bantls due in annual installments of $50,000 to $115,000 through August 15,2026; interest at 4 0% to 4.20%. $ 960,000 $11,145.000 Series 2007 Bontls due in annual installments of $380,000 to $815,000 through August 15, 2027; interest at 4.0% to 5.0%. 525,000 $10,185,000 Series 2008 Bontls due in annual installments of $250,000 to $745,000 through August 15, 2028, Interest at 3.5% to 4.60%. 495.000 $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 4.5%. 3,955,000 $12,000.000 Series 2010 Bonds due in annual installments of $370,000 to $865,000 through August 15, 2029; interest at 2.0%to 4.0% 9,025,000 50 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTES. LONG-TERM DEBT -CONTINUED General Obligation Bonds -continued $8,785,000 Senes 2010A Refunding Bonds due in annual Installments of $110,000 to $970,000 thmugh August 15, 2022; Interest at 2.0% to 3 0%. $ 5,380,000 $8,840,000 Senes 2011 Refunding and Improvement Bonds $ 450,000 due in annual installments of $255,000 to $795,000 through August 15,2030; interest at 2.0% to 4.25%. 5,400,000 $13,865,000 Senes 2012 Refunding and Improvement Bonds due in annual installments of $350000 to $1,600,000 through $ 1,940,000 August 15, 2024; interest at 2.0% to 5 0% 11,075,000 $5,065,000 Sores 2013 Bonds due in annual installments of $190,000 to $340,000 Mmugh August 15, 2032; interest at 2 0% to 3.5%. 4,430,000 $10,595,000 Senes 2014 Bonds due in annual installments 1,825,000 of $375,000 to $740,000 through August 15, 2033; interest at 2.0%M 4.0%. 9,770,000 $32,245,000 Series 2015 Refunding and Improvement Bonds 3,025,000 due in annual installments of $160,000 to $3,605,000 through August 15, 2034, interest at 2 0% to 5.0%. 28,520,000 $6,910,000 Series 2016 Refunding Bonds due in annual 910,000 installments of $775,000 to $1,000000 through $ 5780,000 August 15, 2028; interest at 2.0%to 4.0%. 6,910,000 $ 86,445000 Certificates of Obligation: $765,000 Senes 20048 Combination T.8 Revenue Golf Course Cerhficales of Obligation due in annual installments of $25,000 to $70,000 through September 1. 2024; interest at 4.875% to 5.50%. $ 450,000 $ 450,000 Tax Nates: $1,940000 Series 2016 Tax Notes due in annual installments of $620,000 to $685,000 through August 15, 2019; interest at 2.0%. $ 1,940,000 $ 1,940,000 Water and Sewer Revenue Bonds: $5,795,000 Senes 2009 Refunding Bonds due installments $530,000 to $630,000 Mrough June L 2019, Interest at 12% to 3.5%. 1,825,000 $3,370,00 Sedan 2013 Refunding Bonds due installments $90,000 to $385,000 Mrough June 1, 2025, Interest at 2.0% to 3.0%. 3,025,000 $1,280,000 Senes 2014 Refunding Bonds due Installments $105,000 to $265,W0 through June 1, 2024, interest at 2.1 %. 910,000 $ 5780,000 51 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE5. LONG-TERM DEBT—CONTINUED AEDC Sales Tax Revenue Bonds: galea¢ $15,335,000 Series 2008 Sales Tax Revenue Bonds due in annual installments of $390,000 to $940,000 Due through September 1, 2032; interest at 3.50% to 4.50%. $ 11,190,000 $1,605,000 Series 2010A Sales Tax Revenue Bonds due in annual installments of $440,000 to $595,000 Whin beginning September 1, 2023 through September 1, of Year 2025; interest at 4.00%. 1,605,000 $5,165,000 Series 2010B Sales Tax Revenue Bands One Year due in annual installments of $105,000 to $520,000 through September 1, 2023; interest at 1.35% to 5.10%. 2,900,000 $ 15,695,000 AEDC Promissory Note: $ 95.694000 $4,400,000 Promissory Note due in annual installments $ (16,155000) of $679,853 through June 11, 2022; interest at 2.00%. $ 3,808,147 Cerlifmates of obligation $ 3,808,147 ACDC Sales Tax Revenue Bonds: (44000) $31,235,000 Series 2016 Refunding Bonds due in 451000 annual installments of $1,715,000 to $3,825,000 through - September 1, 2025; interest at 0.750% to 2.353%. $ 31,235,000 1,940,000 $ 31,235,000 The following is a summary of long-term debt transactions, including current portion, of the City for the year ended September 30, 2016: 1,700,000 52 galea¢ Balance Due Beginning End Whin of Year Increase Docassissess f Year One Year Governmental ActW IBes General obigatun hoods $ 95.694000 $ 6,910,000 $ (16,155000) $ 06,445,000 S 9,715.000 Cerlifmates of obligation 490A00 - (44000) 450000 451000 T. note. - 1,940,000 - 1,940,000 885000 Capital lease payable - 1,700,000 - 1,700,000 450A00 Piemlums(dismunts) 7,258,749 1.039,609 (822,514) 7,475,844 - Campensatedabsences 5,527,172 3,91,360 (3,193,148) 5,625,364 2,944280 Net pension liabOdy 18174D,452 7,791,882 28,532,334 Gorxmmental activity long-term debt $ 87.]08.373 S 22,872.851 $ 120.210.8821 1.582 4 130.98 $ 13,835298 52 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTES. LONG-TERM DEBT—CONTINUED The general fund has typically been used to liquidate the liability for compensated absences for governmental activities. Balence Balance Due Beginning End Within .fYear Increases Decreases of Year One Year Buslreess-Type Acevltlea Water and sewer revenue bonds $ 3)35.000 $ $ (975,000) $ 5]60,000 S 1,000,000 Capital lease payable 370.811 18,445 (134.)3)) 252,518 136.043 Premiums(docoun6) 225,889 - (30,021) 195,868 Net pension liability 2,327]09 958,810 - 3.287,519 - compensated absences 631,820 414.091 (359,917) 685,994 635,964 Business-twe activity long-to,m debt $ 10,291,229 $ 1390.348 E (1499,075) $ 10.181900 $ 11))2,004 Component Dna Allen Community Development Corporation Sales tax revenue bonds $ 31.465,000 $ 31.235,000 S (31,465,000) $ 31,235,000 $ 1,715,000 Prem,ams(iiswunts) (128,571) 128,571 ACDC long-teim debt $ 31,336,429 $ 31,235,000 $ 131,338.429) $ 31,235,00(5 $ 1,715,000 Allen Economic Development corporation Sales tax revenue bontls $ 16.595,000 $ - $ (900,000) $ 15,695,000 $ Sort Note payable 4,400,000 - (591,053) 3,808,147 603,690 Premiums(discounts) (37,775) 3,085 (34,710) AEDC long-term debt $ 20,957,225 $ $ .ee11,488,)801 $ 19488,437 $ 1.533.690 Component unit bng-taim debt $ 62.293,654 eL 31235,000 $132.81 $ 50,733.437 $ 3248690 Advance Refunding In 2016, the City issued $6,910,000 of general obligation refunding 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 $7,060,000 of general obligation bonds. 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 12 years by $956,040 and resulted in an economic gain of $770,369. In 2016, the ACDC issued $31,235,000 of sales tax revenue refunding 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 $30,275,000 of sales tax revenue bonds. 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 16 years by $8,615,841 and resulted in an economic gain of $7,004,266. 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, 2016, are on the following pages. 53 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE 5. 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 Activities Fiscal Year Ending September 30 Principal Interest Total 2017 $ 9,715,000 $ 3,311,287 $ 13,026,287 2018 9,015,000 3,020,828 12,035,828 2019 8,570,000 2,647,347 11,217,347 2020 7,810,000 2,297,565 10,107,565 2021 7,160,000 1,988,127 9,148,127 2022-2026 26,770,000 6,320,069 33,090,069 2027-2031 14,090,000 1,854,961 15,944,961 2032-2034 3,315,000 199,763 3,514,763 Tolal $ 86,445,000 $ 21,639.947 $ 108,084,947 Certificates of Obligation Annual debt service requirements to maturity for the Certificates of Obligation, including interest, are as follows: Govemmemal Activities Fiscal Year Ending September 30 Pdnclpal Interest Total 2017 $ 45,000 $ 24,150 $ 69,150 2018 45,000 21,810 68,810 2019 50,000 19,470 69,470 2020 55,000 16,820 71,820 2021 60,000 13,905 73,905 2022-2024 195,000 21,940 216,940 Total $ 450,000 $ 118,095 $ 568,095 Tax Notes Annual debt service requirements to maturity for the Tax Notes, including interest, are as follows: Governmental Activities Fiscal Year Ending September 30 Principal Interest Total 2017 $ 685,000 $ 35,782 $ 720,782 2018 620,000 25,100 645,100 2019 635,000 12,700 647,700 Total $ 1,940,000 $ 73,582 $ 2,013,582 Ii CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30.2016 NOTE5. LONG-TERM DEBT -CONTINUED Annual Requirements to Retire Debt Obligations - Continued Water and Sewer Revenue Bonds Revenue bond debt service requirements to maturity, including interest, are as follows Business-tvoe Activities Fiscal Year Ending AEDC September 30 Pnncipal Interest Total 2017 $ 1,000,000 $ 169,082 $ 1,169,082 2018 1,040,000 141.674 1,181, 674 2019 1,070,000 108,426 1,178,426 2020 455,000 74,176 529,176 2021 465,000 61,573 526,573 2022-2025 1,730,000 113,794 1,843,794 Total $ 5,760,000 $ 668,725 $ 6,428,725 2032 940,000 AEDC Sales Tax and Revenue Bonds 982,300 Total $ Sales Tax Revenue bond debt service requirements to maturity, including interest, are as follows: Fiscal Year Ending AEDC September 30 Principal Interest Total 2017 $ 930,000 $ 662,125 $ 1,592,125 2018 970,000 627,500 1,597,500 2019 1,010,000 590,288 1,600,288 2020 1,050,000 549,466 1,599,466 2021 1,090,000 505,579 1,595,579 2022-2026 5,580,000 1,792,123 7,372,123 2027-2031 4,125,000 781,090 4,906,090 2032 940,000 42,300 982,300 Total $ 15,695,000 $ 5,550,471 $ 21,245,471 AEDC Note Payable The note payable debt service requirements to maturity, including interest, are as follows 55 AEDC Fiscal Year Ending September 30 Principal Interest Total 2017 $ 603,690 $ 76,163 $ 679,853 2018 615,763 64,090 679,853 2019 628,080 51,773 679,853 2020 640,640 39,213 679,853 2021 653,454 26,399 679,853 2022 666,520 13,331 679,851 Total 3,808,147 270,969 4,079,116 55 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE5. LONG-TERM DEBT—CONTINUED Annual Requirements to Retire Debt Obligations — Continued 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 Prinupal Interest Total 2017 $ 1,715,000 $ 694,668 $ 2,409,668 2018 1,715,000 695,581 2,410,581 2019 1735,000 676,819 2,411,819 2020 1,755,000 654489 2,409,489 2021 1,785,000 626,868 2,411,666 2022-2026 9,470,000 2,585,399 12,055,399 2027-2031 10,725,000 1,335,413 12,060,413 2032 2,335,000 74.090 2,409,090 Total $ 31,235,000 $ 7,343,325 $ 38578,325 A schedule of authorized but unissued direct General Obligation Bonds as of September 30, 2016, is as follows: Date of Original Amount Issued in Issued Unissued Service Center Facilities 5112/2007 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 $216,664 at September 30, 2016 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, 2016 of $1,273,025 are adequate to meet the reserve requirements. 56 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTES. LONG-TERM DEBT—CONTINUED Annual Requirements to Retire Debt Obligations—Continued Water and Sewer Revenue Bonds — Continued At September 30, 2016, restricted assets, which include Water and Sewer Revenue Bond Debt Service and Reserve Funds, were as follows: Revenue bond debt service $ 883,176 Revenue bond reserve fund 389,849 $ 1,273,025 Net position reserved for Water and Sewer revenue bond retirement is detailed as follows: Restricted assets, revenue bond debt Service and reserve funds $ 1,273,025 Accrued interest, payable from restricted assets (56,361) Current maturities of revenue bonds, payable from restricted assets (1,000,000) Reserved for revenue bond principal and interest $ 216,664 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, 2016 was 1.205 times. Capital Leases The City has acquired office equipment, a building, and land under various leases accounted for as capital leases. As of September 30, 2016, the capitalized costs of the governmental leased property and business -type leased property under capital leases were $1,700,000 and $649,385, 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, 2016 are as follows: Fiscal Year Ending Governmental Activities Business -type Activities September 30 Principal Total Principal Interest Total 2017 $ 450,000 $ 450,000 $ 136,040 $ 7,013 $143,053 2018 450,000 450,000 93,168 2,146 95,314 2019 800,000 800,000 16,288 561 16,849 2020 7,023 78 7,101 Total $ 1,700,000 $1,700,000 $ 252,519 $ 9,798 $262,317 57 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 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 $398,200 for the fiscal year ended September 30, 2016. Future minimum lease payments, by year and in the aggregate, under the non -cancelable lease commitments are as follows: Fiscal Year Ending Transfers Out September 30 Amount 2017 $ 230,014 2018 209,264 2019 92,277 2020 41,659 2021 20,830 Total $ 594,044 NOTE 6. 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 2016 were as follows: Fund Major Governmental Funds: General Fund General Capital Projects General Obligation Bonds Debt Service Fund Total Major Governmental Funds Nonmajor Govemmental Funds: Grants and Special Revenue Total Nonmajor Governmental Funds Major Enterprise Funds Water and Sewer Fund Solid Waste Fund Drainage Utility Fund Golf Course Fund Total Major Enterprise Funds Internal Service Funds: Facility Maintenance Fund Risk Management Fund Total Internal Service Funds Total Transfers Transfers In Transfers Out $ 4,556,699 $ 6,119,341 4,242,639 - - 265,149 250,000 9,049,338 6,384,490 87,744 87,744 36,365 3,840,953 - 942,976 - 342,508 300,000 336,365 5,126,437 1,592,105 - 445,375 2,037,480 $ 11,510,927 $ 11,510,927 58 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 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 $9,137,082 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 $6,384,490 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 $336,365 mainly represent amounts transferred into the Golf Course to support operations. The total transfer out of $5,126,437 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 $2,037,480 represents the amounts needed for repairs of aging facility infrastructure, and administrative support. NOTE T RETIREMENT PLAN Plan Description The City participates as one of 866 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, Subtitle 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 if 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 member's 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. 59 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE7. 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 employer -financed 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 refirees 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 rate 7% Matching ratio (City to employee) 2 to 1 Years required for vesting 5 Service retirement eligibility 20 years at any age, 5 years at age 60 and above Updated Service Credit 100% Repeating Annuity Increase to retirees 70% of CPI Repeating The City does not participate in Social Security. Employees covered by benefit terms: At the December 31, 2015 valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 163 Inactive employees entitled to, but not yet receiving benefits 360 Active employees 710 Total 1,233 Contributions The contribution rates for employees in TMRS are either 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 the 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. The contribution rates for the City were 14.19% and 13.71% in calendar years 2015 and 2016, respectively. The City's contributions to TMRS for the year ended September 30, 2016 were $6,181,797, and were equal to the required contribution. Net Pension Liability The City's Net Pension Liability (NPL) was measured as of December 31, 2015, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. Lill CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE7. RETIREMENT PLAN—CONTINUED Actuarial assumptions: The Total Pension Liability in the December 31, 2015 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.5% per year Overall payroll growth 3 0% per year Investment Rate of Return 6.75%, 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 Tables with Blue Collar Adjustment, with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis by scale BS to account for future mortality improvements. For disabled annuitants, the gender -distinct RP2000 Disabled Retiree Mortality Tables with Blue Collar Adjustment are used with males rates multiplied by 109% and female rates multiplied by 103% with a 3 year set -forward for both males and females. In addition a 3% minimum mortality rate is applied to reflect the impairment for younger members who become disabled. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements subject to the 3% floor. Actuarial assumptions used in the December 31, 2015, valuation were based on the results of actuarial experience studies. The experience study in TMRS was for the period December 31, 2010 through December 31, 2014. 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 are reviewed annually. No additional changes were made for the 2014 valuation. After the Asset Allocation Study analysis and experience investigation study, the Board amended the long -tern expected rate of return on pension plan investments from 7% to 6.75%. Plan assets are 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 -tern and long -tern 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) are developed for each major asset class. These ranges are 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. In determining their best estimate of a recommended investment return assumption under the various alternative asset allocation portfolios, GRS focused on the area between (1) arithmetic mean (aggressive) without an adjustment for time (conservative) and (2) the geometric mean (conservative) with an adjustment for time (aggressive). At its meeting on July 30, 2015, the TMRS Board approved a new portfolio target allocation. The target allocation and best estimates of real rates of return for each major asset class are summarized in the following table: Long -Term Expeded Target Real Rate of Return Asset Class Allocation (Adthmetic) Domestic Equity 175% 4.55% Inlemational Equity 175% 6.10% Core Fixed Income 100% 1.00% Non -Core Fixed Income 20.0% 3.65% Real Relum 10.0% 4.03% Real Estate 10.0% 5.00% Absolute Return 10.0% 4.00% Private Equity 5.0% 8.00% Total 100.0% 61 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE7. RETIREMENT PLAN—CONTINUED Discount Rate The discount rate used to measure the Total Pension Liability was 6.75%. The projection of cash flows used to determine the discount rete assumed that employee and employer contributions will be made at the rates specked 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 active and inactive employees. Therefore, the long-temr expected rete 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 12/31/2014 Changes for the year: Service cost Interest Change of benefit terms Difference between expected and actual experience Changes of assumptions Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Netchanges Balance at 12/31/2015 Increase (Decrease Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) -(b) $ 148,832,394 $ 127,764,233 $ 21,068,161 7,377,440 - 7,377,440 10,562,818 - 10,562,818 196,259 - 196,259 (231,950) - (231,950) - 6,063,051 (6,063,051) - 3,021,766 (3,021,766) - 188,559 (188,559) (3,247,435) (3,247,435) - - (114,830) 114,830 (5,671) 5,671 14,657,132 5,905,440 8,751,692 163,489,526 133,669,673 $ 29,819,853 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 6.75%, as well as what the City's net pension liability would be if it were calculated using a discount rate that is 1 -percentage -point lower (5.75%) or 1-pementage-point higher (7.75%) than the current rete: 1%Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate (5.75%) (6.75%) (7.75%) City's net pension liability $ 57,437,403 $ 29,819,853 $ 7,563,825 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.tmrs.com. 62 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE7. RETIREMENT PLAN—CONTINUED Pension Expense and Defamed Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended September 30, 2016, the City recognized pension expense of $7,837,782. At September 30, 2016, 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 Defamed Outflows of Resources Deferred Inflows of Resources $ 161,767 $ (1,192,401) - (191,186) 7,895,066 - 4,518,885 12,575,718(1,383,587) Deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date of $4,518,885 will be recognized as a reduction of the net pension liability for the measurement year ending December 31, 2016 (i.e. recognized in the city's financial statements September 30, 2017). Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Measurement yearended December 31: 2016 2017 2018 2019 2020 Total 63 $ 1,742,284 1,742,284 1,742,283 1,450,726 (4,331) $ 6,673,246 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 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 terns 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, 2016, the cost of water purchased under this contract was $13,765,666. 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 2016, the cost for transportation, treatment and disposal of sewage and other wastes was $7,630,296. 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, 2016, 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. 64 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 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, 2016 was $1,073,336. 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 errors/omissions), 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 expenditures/expenses 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 2016, the City contributed $423,084 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 2016, the City contributed $611,078 for property and general liability. NOTE 11. OTHER POSTEMPLOYMENT BENEFITS (OPEB) Proaram 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. 65 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 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 2016 983,434 8,076,640 7,986,738 1,073,336 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 errors/omissions), 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 expenditures/expenses 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 2016, the City contributed $423,084 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 2016, the City contributed $611,078 for property and general liability. NOTE 11. OTHER POSTEMPLOYMENT BENEFITS (OPEB) Proaram 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. 65 CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE 11. OTHER POSTEMPLOYMENT BENEFITS (OPEB) — CONTINUED Program Description — Continued Current OPEB benefits are made on a pay-as-you-go basis from the Risk Management Fund. In 2016, retirees paid $107,654 in the form of premiums and incurred $303,250 in expenses. Fundino Policy In October 2014, an actuarial study update was completed. This study estimated the actuarial accrued liability decreased from $2,790,177 to $970,603; therefore, the annual required contribution (ARC) decreased to ($25,684). 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 (OPEB), 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 $4,488,554 available in the Risk Management Fund exceeds the $970,603 actuarial accrued liability, therefore, OPER 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 pa0em of sharing costs between the employer and plan members to that point. Annual required contribution (ARC) $ (25,684) Interest on net OPEB obligation (17,839) Adjustment to the ARC 23,209 Annual OPEB cost (20,314) Contributions made (195,596) Increase in OPEB obligation (asset) (215,910) Net OPEB obligation (asset), beginning of the year (356,773) Net OPEB obligation (asset), end of the year$ (572,683) M CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 NOTE 11. OTHER POSTEMPLOYMENT BENEFITS (OPEB) — CONTINUED Annual OPEB costs and NET OPEB Obligation — 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 Rale 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 8.99% 5.00% level dollar, open, 30 years Avg. 5.8% Yrs 1-10, 60.08% Yrs 11-20,44.1% Ages 50-55-2%,56-60-5%,60-64-15%,65+ 100% 20%/40% RP 2000 EE/Combined Market value on valuation dale Projected unit credit 5 8% Medical inflation and 5.52% dental inflation 10/1/14 $1,365,426 $970,603 140.7 ($394,823) $41,371,001 (.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. Annual Actual Percentage Net Fiscal OPEB Contribution of OPEB OPEB Year Cost Made Contributed Asset 2014 $ 218,877 $ 220,000 101% $ (115,284) 2015 $ (23,949) $ 217,540 908% $ (356,773) 2016 $ (20,314) $ 195,596 963% $ (572,683) 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 Rale 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 8.99% 5.00% level dollar, open, 30 years Avg. 5.8% Yrs 1-10, 60.08% Yrs 11-20,44.1% Ages 50-55-2%,56-60-5%,60-64-15%,65+ 100% 20%/40% RP 2000 EE/Combined Market value on valuation dale Projected unit credit 5 8% Medical inflation and 5.52% dental inflation 10/1/14 $1,365,426 $970,603 140.7 ($394,823) $41,371,001 (.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. CITY OF ALLEN, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2016 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 rete as determined by an annual actuarial valuation. The rate is equal to the cost of providing one-year tens 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 tens life insurance during employee's entire careers. The City's contributions to the TMRS SDBF for retiree's for the years ended 2016, 2015, and 2014 were $60,990, $56,423, and $50,597, 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, if 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 grant(s) 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. 68 REQUIRED SUPPLEMENTARY INFORMATION CITY OF I PEOPLE FIRst RESPECT INTEGRITY DELIVER EXCEL CITY OF ALLEN, TEXAS SCHEDULE OF OPEB FUNDING PROGRESS AND CONTRIBUTIONS FOR THE YEAR ENDED SEPTEMBER 30, 2016 Required Supplementary Information Schedule of Other Postemployment Benefits Funding Progress and Contributions Last Three Valuation Years (unaudited) Actuanal Valuation Fiscal Year Value of Assets AAL' UAAL" Date 10/1/2012 2014 1,065,372 2,790,177 1,724,805 10/1/2014 2015 1,365,426 970,603 (394,823) 10/1/2014 2016 1,365,426 970,603 (394,823) 'Actuarial Accrued Liability "Unfunded Actuarial Accrued Liability M EXHIBIT A-1 UAALasa Funded Ratio Covered Payroll % of Covered Payroll 382% 35,875,962 4.8% 140.7% 40,214,969 -1.0% 140.7% 41,371,001 -1.0% CITY OF ALLEN, TEXAS 3,021,766 EXHIBIT A-2 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS (3,213,118) FOR THE MEASUREMENT YEARS ENDED DECEMBER 31, 2015 AND 2014 (69,397) (114,830) 2014' 2015" Total pension liability 5,905,440 Service cost $ 6,407,942 $ 7,377,440 Interest (on the total pension liability) 9,749,386 10,562,818 Changes in benefit terms - - Difference in expected and actual experience (1,791,341) 196,259 Change in assumptions - (231,950) Benefit payments, including refunds of employee contributions (3,213,118) (3,247,435) Net change in total pension liability 11,152,869 14,657,132 Total pension liability, beginning of year Total pension liability, ending of year Plan fiduciary net position Contributions -employer Contributions -employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending Net pension liability- ending Plan fiduciary net position as a %of total pension liability Covered employee payroll 137,679,525 148,832,394 -Fl-48,832,394 $ 163,489,526 $ 5,455,902 $ 6,063,051 2,754,779 3,021,766 6,648,346 188,559 (3,213,118) (3,247,435) (69,397) (114,830) (5,706) (5,671) 11,570,806 5,905,440 Net pension liability as a %of covered employee payroll The schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 70 116,193,427 127,764,233 $ 127,764,233 $ 133,669,673 $ 21,068,161 $ 29,819,853 83.51% 77.69% $ 39,335,988 $ 43,142,910 53.56% 69.12% CITY OF ALLEN, TEXAS SCHEDULE OF CONTRIBUTIONS FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015 EXHIBIT A-3 2015' 2016' Actuarially determined contributions $ 5,785,220 $ 6,028,939 Actual contributions (5,797,651) (6,181,797) Contributions deficiency (excess) $ (12,431) $ 152,858 City covered employee payroll $40,985,314 $43,564,466 Ratio of actual contributions to covered payroll amount 14.15% 14.19% 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, 13 months. Methods and Assumptions Used to Determine Contribution Rates: Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage of Payroll, Closed Remaining Amortization Period 30 years Asset Valuation Method 10 year smoothed market; 15% soft corridor Inflation 2.50% Salary Increases 3.50% to 10.5% including inflation Investment Rate of Return 6.75% Retirement Age Experience -based table of rates that are specific to the City's plan of benefits. Last updated for the 2015 valuation pursuant to an experience study of the period 2010 - 2014 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 There were no benefit changes during the year. 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, 2016 REVENUES Ad valorem taxes, penalties and interest Municipal sales tax Franchise taxes Licenses, permits and fees Charge for services Fines Gifts and contributions Investment earnings Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Public vorks Culture and recreation Community development Total expenditures Excess (deficiency) of revenues over (under) expenditures EXHIBIT A-4 23,909,552 24,213,047 22,537,520 VARIANCE WITH BUDGE TED AMOUNTS 32,660,050 FINAL BUDGET - 4,175,119 3,575,069 3,377,872 POSITIVE ORIGINAL FINAL ACTUAL (NEGATIVE) 2,565,586 2,570,086 2,362,059 208,027 $ 41,239,370 $ 41,136,040 $ 40,938,998 $ (197,042) 18,552,221 18,549,549 18,821,587 272,038 7,439,910 7,280,945 7,295,931 14,986 1,952,700 2,589,100 2,891,704 302,604 11,275,767 12,308,268 12,368,922 60,654 1,868,382 1,686,182 1,579,628 (106,554) 600,306 600,838 832,211 231,373 162,000 194,400 245,985 51,585 1,835,973 2,024,495 2,377,546 353,051 84,926,629 86,369,817 87,352,512 982,695 23,909,552 24,213,047 22,537,520 1,675.527 32,589,848 32,713,183 32,660,050 53,133 4,175,119 3,575,069 3,377,872 197,197 23,368,199 24,372,354 23,150,698 1,221,656 2,565,586 2,570,086 2,362,059 208,027 86,608,304 87,443,739 84,88,199 3,355,540 (1,681,675) (1,073,922) 3,264,313 4,338,235 OTHER FINANCING SOURCES (USES) Transfers in 4,556,699 4,556,699 4,556,699 - Transfers out (702,426) (2,345,402) (6.119,341) (3,773,939) Sale of capital assets - 10,735 10,735 Total other financing sources (uses) 3,854,273 2,211,297 (1,551,907) (3,763,204) NET CHANGE IN FUND BALANCE 2,172,598 1,137,375 1,712,406 575,031 FUND BALANCES, BEGINNING OF YEAR 20,388,622 20,388,622 20,388,822 - FUND BALANCES, END OF YEAR $ 22,561,220 $ 21,525,997 $ 22,101.028 $ 575,031 72 CITY OF ALLEN, TEXAS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED SEPTEMBER 30, 2016 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 3 CITY OF ALLEN AV PEppl EFIRST RESPECT INTEGRITY DELIVER EXCEL COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES CITYOFALLEN Ar PEpPI EFIRST 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 COMPARATIVE BALANCE SHEETS GENERALFUND SEPTEMBER 30, 2016 AND 2015 ASSETS Cash and cash equivalents Investments Receivables: Ad valorem taxes (net of allowances for uncollectibles of $246,560 in 2016 and $173,266 in 2015) 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 PEG fees Photo red light enforcement Cemetery trust Assigned Facilities maintenance Other Unassigned TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCE 75 EXHIBIT B-1 2016 2015 $ 9,331,023 $ 7,478,648 12,229,724 13,151,416 77,755 72,979 3,465,828 3,063,112 2,558,011 2,288,090 122,106 75,870 2,129 1,486 $ 27,786,576 $ 26,131,601 $ 3,605,104 $ 3,948,273 1,994,989 1,719,327 7,700 2,400 5,607,793 5,670,000 77,755 72,979 77,755 72,979 2,129 1,486 15,770 11,861 811,867 674,527 21,737 34,790 58,534 58,007 - 914,805 - 6,225 21,190,991 18,686,921 22,101,028 20,388,622 $ 27,786,576 $ 26,131,601 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GENERALFUND FOR THE YEARS ENDED SEPTEMBER 30. 2016 AND 2015 REVENUES Ad valorem taxes, penalties and interest Franchise taxes Municipal sales tax Licenses, permits and fees Charges for services Fines Gifts and contributions Intergovernmental Investment earnings Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Public works 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 2016 2015 $ 40,938,998 $ 36,623,546 7,295,931 7,412,447 18,821,587 17,704,665 2,891,704 2,993,829 12,368,922 11,454,620 1,579,628 1,805,230 832,211 797,103 128,237 11,826 245,985 204,791 2,249,309 1,517,173 87,352,512 80,525,230 22,537,520 22,982,774 32,660,050 30,454,701 3,377,872 3,428,366 23,150,698 21,134,475 2,362,059 2,199,241 - 7,537 1,236,182 23 84,088,199 80,207,117 3,264,313 318,113 4,556,699 5,353,099 (6,119,341) (4,452,116) 10,735 17,086 (1,551,907) 918,069 1,712,406 1,236,182 20,388,622 19,152,440 $ 22,101,028 $ 20,388,622 CITY OF ALLEN, TEXAS COMPARATIVE BALANCE SHEETS DEBT SERVICE FUND SEPTEMBER 30, 2016 AND 2015 EXHIBIT B•3 2016 2015 ASSETS Cash and cash equivalents $ 538,398 $ 1,270,446 Investments 672,136 667 Receivables: Ad valorem taxes (net of allowances for uncollectibles of $107,600 in 2016 and $85,258 in 2015) 20,360 26,316 Accrued interest receivable 31,041 22,146 Other receivable 12,826 Total assets $ 1,274,761 $ 1,319,575 DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes $ 20,360 $ 26,316 Total deferred inflows of resources 20,360 26,316 FUND BALANCE Restricted for debt service 1,254,401 1,293,259 TOTAL DEFERRED INFLOWS OF RESOURCES AND FUND BALANCE $ 1,274,761 $ 1,319,575 77 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES DEBT SERVICE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015 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 B-4 2016 2015 $ 12,463,038 $ 13,010,674 68,221 39,926 12,531,259 13,050,600 9,135,000 9,315,000 3,801,812 4,247,446 12,936,812 13,562,446 (405,553) (511,846) 6,910,000 24,815,000 995,753 3,239,156 (7,789,058) (27,782,010) 250,000 643,257 366,695 915,403 (38,858) 403,557 1,293,259 889,702 $ 1,254,401 $ 1,293,259 CITY OF ALLEN, TEXAS BUDGETARY COMPARISON SCHEDULE DEBT SERVICE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2016 EXHIBIT B-5 VARIANCE WITH FINAL BUDGETED AMOUNTS BUDGET POSITIVE ORIGINAL FINAL ACTUAL (NEGATIVE) REVENUES Ad valorem taxes $ 12,667,803 $12,542,540 $12,463,038 $ (79,502) Investment earnings 36,500 43,800 68,221 24,421 Total revenues 12,604,303 12,586,340 12,531,259 (55,081) EXPENDITURES Principal retirement 9,135,000 9,135,000 9,135,000 - Interest and fiscal charges 3,666,457 3,666,462 3,801,812 (135,350) Total expenditures 12,801,457 12,801,462 12,936,812 (135,350) OTHER FINANCING SOURCES (USES) Issuance of refunding bonds - 6,910,000 6,910,000 - Premium on issuance of bonds - 995,753 995,753 - PaymeM to refund bond escrow agent (9,750) (7,938,958) (7,789,058) 149,900 Transfers in 250,000 250,000 250,000 Total other financing sources (uses) 240,250 216,795 366,695 149,900 NET CHANGE IN FUND BALANCES 43,096 1,673 (38,858) (40,531) FUND BALANCE, BEGINNING OF YEAR 1,293,259 1,293,259 1,293,259 FUND BALANCE, END OF YEAR $ 1,336,355 $ 1,294,932 $ 1,254,401 $ (40,531) 79 CITY OF ALLEN, TEXAS COMPARATIVE BALANCE SHEETS GENERAL CAPITAL PROJECTS FUND SEPTEMBER 30, 2016 AND 2015 ASSETS Cash and cash equivalents Investments Accrued interest receivable Special assessments receivable Other 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 EN EXHIBIT B-6 2016 2015 $ 7,827,767 $ 10,664,833 14,598,278 13,214,488 77,819 50,356 - 4,401 953,655 $ 23,457,519 $ 23,934,078 $ 729,264 $ 1,085,231 240,578 79,736 322,971 385,809 1,292,803 1,550,776 22,164,716 22,383,302 22,164,716 22,383,302 $ 23,457,519 $ 23,934,078 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GENERAL CAPITAL PROJECTS FUND FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015 REVENUES Charges for services Intergovernmental Investment earnings Miscellaneous Total revenues EXPENDITURES General government Culture and recreation Public works Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Capital lease obligations Transfers in Total other financing sources (uses) NET CHANGE IN FUND BALANCES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR 81 EXHIBIT B-7 2016 2015 $ 633,848 $ 279,724 1,798,190 2,621,300 139,631 154,011 1,326,913 1,754,526 3,898,582 4,809,561 490,828 96,651 202,119 62,565 1,279,169 753,863 8,087,691 3,532,297 10,059,807 4,445,376 (6,161,225) 364,185 1,700,000 - 4,242,639 3,646,149 5,942,639 3,646,149 (218,586) 4,010,334 22,383,302 18,372,968 $ 22,164,716 $ 22,383,302 CITY OF ALLEN, TEXAS COMPARATIVE BALANCE SHEETS GENERAL OBLIGATION BOND FUND SEPTEMBER 30, 2016 AND 2015 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 2016 2015 $ 5,653,185 $ 7,809,447 9,316,683 12,926,357 71,121 40,603 $ 15,040,989 $ 20,776,407 $ 158,175 $ 476,365 246,847 29,351 405,022 505,716 14,635,967 20,270,691 14,635,967 20,270,691 $ 15,040,989 $ 20,776,407 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GENERAL OBLIGATION BOND FUND FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015 REVENUES Investment earnings Miscellaneous Total revenues 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 EXHIBIT B-9 120,503 131,722 66,815 2010 600 2015 21,736 3,194 208,390 684,209 $ 120,503 $ 131,722 120,503 131,722 66,815 110,417 600 783 21,736 3,194 208,390 684,209 7,176,394 3,023,148 7,473,935 3,821,751 (7,353,432) (3,690,029) (265,149) (370,655) 43,857 532,977 1,940,000 7,430,000 1,718,708 7,592,322 (5,634,724) 3,902,293 20,270,691 16,368,398 $ 14,635,967 $ 20,270,691 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 CIN OF ALLEN, TEXAS EXHIBIT C-1 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2016 FUND BALANCES GRANTS Resblctetl TOTAL HOTEL AND Tourism 4.359.540 TAX NON -MAJOR - OCCUPANCY ASSET SPECIAL - PARK INCREMENT GOVERNMENTAL - 85,621 TAX FORFEITURE REVENUE DEDICATION FINANCING FUNDS ASSETS Pah acquis0ion and tlevebpment - - - 1,581,633 - 1,5811633 Tax increment financing agreement Cash and cash equivalents $ 1,625,618 $ 107,163 $ 53,254 $ 569,867 $ 916,863 $ 3,2]2,]65 Inves9nsms 2,6461815 120,943 63,346 85,621 1,028,816 1,304,638 5,172,558 Accounts receivable 141,60.5 - 223.036 - 51,940 416,621 A cnjetl Interest 340,311 13,980 774 675 5,761 6.267 2,477 TOTALA$SETS $ 4,428,058 $ 236,880 $ 340.311 $ 1,604.444 $ 2,279728 $ 8,009.421 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable $ 50,810 $ 11,534 $ 1,490 $ 17,620 $ - $ 89.454 A .ab Imnaleies 91708 23,944 6,071 - - 39,723 Relmnage payable - - - 5,191 - 51191 Uneameb revenue 115.781 B3 S54 199.435 TOTAL LIABILITIES 68,518 1511259 91,215 22,811 333,803 FUND BALANCES Resblctetl Tourism 4.359.540 - - - - 4,359,540 Asset foriellure - 85,621 - - - 85,621 Slate antl federal grants - - 249,096 - - 249,096 Pah acquis0ion and tlevebpment - - - 1,581,633 - 1,5811633 Tax increment financing agreement 2.279728 2,279728 TOTALFUND BALANCES 4,359,540 85,621 249,096 1,581,633 2,29,720 8.555.618 TOTAL LIABILDIES AND FUND BAIANCES$ 4,420,058 $ 236,880 $ 340,311 $ 1,604,444 $ 2.279,728 $ 8,809,421 85 CITY OF ALLEN EXHIBIT C-2 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2016 OTHER FINANCING SOURCES (USES) Transfamm - - GRANTS - - TOTAL Sale of capital assets HOTEL 13,413 AND TAX NON -MAJOR OCCUPANCY ASSET SPECIAL PARK INCREMENT GOVERNMENTAL TAX FORFEITURE REVENUE DEDICATION FINANCING FUNDS REVENUES NET CHANGE IN FUND BALANCES 713.390 Ad alarem taxes, penalties and interest $ - $ - $ - $ - E 702,098 $ 702.096 Muncipal sales Mx - - - - 453,396 453,396 Lmenses. permits, and fees - - - 172.876 - 172.876 Hotel l must taxes 1.607.263 - - - - 1,607,263 Inter9wemmental - - 593,343 - 125,319 718,662 Inastmenteamin9s 26,629 1,821 1,769 11,035 12,186 53.420 Miscellaneous 120,154 15,490 1351648 Total revenues 1,633,892 121,975 61DfV6 183911 1292,977 3,843,361 EXPENDRURES General goamment - - 193,161 - 813,313 1.006,474 Public safety - 100,475 176,004 - - 284.479 Culture and remeabon 894,291 - 39,674 - - 933,965 Community development - - 470,952 - - 470,952 Capital outlay 26.221 5,775 112,212 144,208 Total expenditures 920.512 114,250 879,791 112,212 813,313 2,040,078 Ercew(deficiency) of revenues over (under) expenddures 713,300 7,725 (269,185) 71,699 479.664 1,003,283 OTHER FINANCING SOURCES (USES) Transfamm - - 87,744 - - 87744 Sale of capital assets 13,413 13,413 Taal other financing sources (uses) 13,413 87,744 101,157 NET CHANGE IN FUND BALANCES 713.390 21,138 (181,441) 71,699 479,664 111041440 FUND BALANCES, BEGINNING OF YEAR 3.W.169 64,433 430,537 1150919M 11800,064 7,451,178 FUND BALANCES, END OF YEAR 6 4359540 $ 85,621 $ 249,096 $ 1,581.633 $ 2279.728 $ 8,555,618 M 133X3 113/11130 U18931N' 133dS3N 15113� N377V.10 A1,0 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, 2016 AND 2015 ASSETS CURRENT ASSETS Cash and cash e,mvalems InveaMems Accra. Acauea 9Neren aAeMudea Resented cash and cash eymvalamc Total current Assets NONCURRENT ASSETS CARTALASSETS land Texas, tanks, and Wmp atathons Vendee Machines, ant ad,aMeM Cmm,ucton in progress Total capital Assets Lass accumMalel depedatlon capital assets, net of accumulated depracialion Tota nmau,..t see. TOTALMSETS DEFERRED OUTFLOWS OF RESOURCES Carrel bsa on MUMi, Mhaned oulAona of rescurces -pension TOTAL DEFERRED OUTFLOWS OF RESOURCES LIABILITIES AND NET POSITION CURRENT LIABILITIES Accounts papde Aimed IiaWflies Relainago payable Payable kora restricted assets Revenue bonds payada -cuneM Accrued iMerrst payada Accmed compensaed absences -cement Cascara, dsrys85 payable Total current liabilities NONCURRENT LIABILITIES Revecue hands payable Net penson lability Amued compensated absences Tota noncurrent liabilities TOTALLIASILITIES DEFERRED INFLOWS OF RESOURCES Oefened inflm2 ol... -pension TOTAL DEFERRED INFLOWS OF RESOURCES NET POSITION Nat investmem in capital asses RestdctW Restricted for. -nue Md prkwyal ant interest Unrestricted TOTAL NET POSITION 88 EXHIBIT D-1 2016 2015 2171.577 1551.566 S 10,035,458 E 10,Ta5,980 15.186.580 15.754.880 6,34D102 1,989,908 93,2F8 55,751 91,010 30.612 1,03,025 1,385,813 33.619,781 35.952.150 28,581.811 28,614,184 4,072,862 4,072802 108,525,602 179,959,141 853.10.5 867.955 5,492410 5,232,339 2,059,181 2,102.389 199,003386 192,314,712 (87.748307) (83,425830) 111355.078 108,8061702 111,255,079 108808,782 144,874,860 1",641,532 217.748 269.604 906,001 435.094 1,123,747 104.690 1,018.880 3,720.070 154803 121,425 82,914 14,595 1,000,000 915,000 SESIN E6.182 394.524 377,785 1.672.134 1854.063 4,855,860 5,985,889 2171.577 1551.566 13,867 13.270 7,141,312 7,553,733 11.580,728 14,549.651 102.447 110.081 102."7 110,081 105,516,957 101,927,893 218804 344,421 28,581.811 28,614,184 S 134,315432 $ 1J0,808,498 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION WATER AND SEWER ENTERPRISE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015 4,751,662 EXHIBIT D-2 Contractual and other services 2016 2015 OPERATING REVENUES 392,650 460,577 Water sales $ 20,832,880 $ 19,771,508 Sewer charges 14,233,692 13,591,909 Connection fees 208,154 180,976 Service charges 698,672 591,321 Gifts and contributions - 1,000,000 Miscellaneous 362,470 971,556 Total operating revenues 36,335,868 36,107,270 OPERATING EXPENSES Personnel services 4,751,662 4,463,491 Contractual and other services 23,558,947 21,092,300 Maintenance 392,650 460,577 Supplies 332,063 188,537 Depreciation 5,963,400 5,802,108 Other 252,662 192,865 Total operating expenses 35,251,384 32,199,878 OPERATING INCOME 1,084,484 3,907,392 NON-OPERATING REVENUES (EXPENSES) Interest income 174,115 167,793 Interest expense (212,881) (246,235) Gain on disposal of capital assets 15,503 Total non-operating expenses (23,263) (78,442) INCOME BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS 1,061,221 3,828,950 CAPITAL CONTRIBUTIONS AND TRANSFERS Development fees 1,535,771 1,280,062 Capital contributions 4,636,530 3,136,580 Transfers in 36,365 38,249 Transfers out (3,840,953) (4,898,578) Total capital contributions and transfers 2,367,713 (443,687) CHANGE IN NET POSITION 3,428,934 3,385,263 NET POSITION, BEGINNING OF YEAR 130,886,498 127,501,235 NET POSITION, END OF YEAR $ 134,315,432 $ 130,886,498 M. CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF CASH FLOWS WATER AND SEWER ENTERPRISE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015 EXHIBIT 0-3 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 37,985,594 E 33,084,680 Cash paid to employees for services (4.595,844) (4,480.386) Cash paid for goods antl senaces (27,163,313) (2(1,214,554) NO cash Provided by operating activities 6,226.437 8,389740 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Tmnsfefa in 36,355 38.249 Teamsters out (3.840.953) (4,898.578) Net cash used in noncapital financing activities (3,804,588) (4,660,329) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid on revenue bond maturities (975,000) (1,280,000) Interest and fees pad on long-term debt (222,712) (25],996) Acquisition and construction of capital assets (3,693,166) (2,674,019) Contributions from developers 1,535,]]1 1,280,082 Disposition of capital assets 15,502 3,938 Net cash used In capital and related financing activities (3.339,605) (2,920,015) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investment securities (39,030) (1,411,855) Interen an investments 144,468 10],1]5 Net cash provided by (used In) Investing activities 104,638 11,304,8807 NET INCREASE IN CASH AND CASH EQUIVALENTS (013.118) (703,284) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 12,121,599 12.824.883 CASH AND CASH EQUIVALENTS, END OF YEAR $ 11.308.481 $ 12.121.599 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Net operating Income $ 1,084,484 $ 3,907,392 Adjustments to reemmule net operating income to net cash provided by operating actunume Depreciation and amordzetpn expense 5,985,237 5,823,940 Change in assals end liabilities: Amounts recerbable 1,649,726 (3,022,590) Inventories (60,398) 61116 Deferred oaMovm- pension (4]0.90]) (435,094) Accounts payable (2,641,198) 1,736,925 Accrued liabilities 2],1]8 12,850 Retainage payable 8,319 (98,378) Compensates absences 17,348 19,089 Net pansbn liability 617,011 289,029 Utility deposits 1],2]1 4'380 Defer dinflovs-pensions (7,634) 110,081 Total adjustments 5,141,953 4,482,348 Net cash provitletl by operating activities $ 6,228,43] $ 8,389,740 NON-CASH INVESTING ACTIVITIES Change in the fairvalue of Investments $ p,850) $ 64,400 NON-CASH FINANCING ACTIVITIES Contributions of capital assets tram developers E 4,836,530 $ 3,136,588 RECONCILIATION OF CASH Cash and cash equivalent,- current E 10,035,456 $ 10.735,986 Restricted cash and cash equlv4lents 1,273.025 1,385,613 $ 11,308.481 $ 12,121.599 M CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF NET POSITION SOLID WASTE ENTERPRISE FUND SEPTEMBER 30, 2016 AND 2015 140,440 EXHIBIT D4 Machinery and equipment 2016 2015 ASSETS 152,799 25,518 CURRENT ASSETS (15,010) (19,898) Cash and cash equivalents $ 1,176,590 $ 1,458,701 Investments 1,829,689 1,723,829 Receivables, net of allowance for uncollectibles: 3,578,460 3,623,066 Accounts 277,948 300,038 Other 146,887 127,762 Accrued interest 9,557 7,116 Total current assets 3,440,671 3,617,446 NONCURRENT ASSETS CAPITAL ASSETS Vehicles 140,440 12,923 Machinery and equipment 12,359 12,595 Total capital assets 152,799 25,518 Less. accumulated depreciation (15,010) (19,898) Capital assets, net of accumulated depreciation 137,789 5,620 Total noncurrent assets 137,789 5,620 TOTAL ASSETS 3,578,460 3,623,066 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources - pension 107,786 48,667 TOTAL DEFERRED OUTFLOWS OF RESOURCES 107,786 48,667 LIABILITIES AND NET POSITION CURRENT LIABILITIES Accounts payable 338,427 299,336 Accrued compensated absences -current 78,511 65,025 Accrued liabilities 19,768 26,950 Total current liabilities 436,706 391,311 NONCURRENT LIABILITIES Net pension liability 251,346 173,884 Accrued compensated absences 4,428 3,667 Total noncurrent liabilities 255,774 177,551 TOTAL LIABILITIES 692,480 568,862 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources- pension 11,355 12,313 TOTAL DEFERRED INFLOWS OF RESOURCES 11,355 12,313 NET POSITION Net investment in capital assets 137,789 5,620 Unrestricted 2,844,622 3,084,938 TOTAL NET POSITION $ 2,982,411 $ 3,090,558 E 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, 2016 AND 2015 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 NET POSITION, END OF YEAR 92 2016 2015 $ 6,617,182 $ 6,474,386 70,000 18,824 6,687,182 6,493,210 564,532 470,480 5,176,928 4,976,900 3,243 4,842 44,785 39,532 8,271 625 72,510 67,915 5,870,269 5,560,294 816,913 932,916 17,916 21,510 834,829 954,426 (942,976) (1,337,526) (108,147) (383,100) 3,090,558 3,473,658 $ 2,982,411 $ 3,090,558 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF CASH FLOWS SOLID WASTE ENTERPRISE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015 EXHIBIT D-6 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 6,687,706 $ 6,776,089 Cash paid to employees for services (532,900) (466,465) Cash paid for goods and services (5,265,557) (4,822,842) Net cash provided by operating activities 889,249 1,486,782 CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES Transfers out (942,976) (1,337,526) Net cash used in non -capital financing activities (942,976) (1,337,526) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets (140,440) (6,245) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of investments (105,860) (62,019) Interest on investments 17,916 21,510 Net cash used In investing activities (87,944) (40,509) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (282,111) 102,502 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 1,458,701 1,356,199 CASH AND CASH EQUIVALENTS, END OF YEAR $1,176,590 $ 1,458,701 RECONCILIATION OF OPERATING INCOME TO NET CASH USED BY OPERATING ACTIVITIES Net operating income $ 816,913 $ 932,916 Adjustments to reconcile net operating income to net cash provided by operating activities: Depreciation 8,271 625 Change in assets and liabilities: Accounts receivable 2,985 283,694 Other receivables (2,441) (815) Deferred outflows - pension (59,119) (48,667) Accounts payable 39,091 265,573 Accrued liabilities (7,182) 774 Net pension liability 77,462 32,329 Accrued compensated absences 14,247 8,040 Deferred inflows - pension (958) 12,313 Total adjustments 72,336 553,866 Net cash provided by operating activities $ 889,249 $ 1,486,782 93 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF NET POSITION DRAINAGE ENTERPRISE FUND SEPTEMBER 30, 2016 AND 2015 48,222 EXHIBIT D-7 Accrued compensated absences 2016 2015 ASSETS 19,171 12,401 CURRENT ASSETS 118,651 102,979 Cash and cash equivalents $ 352,324 $ 401,131 Investments 398,306 396,409 Receivables: 3,795 3,184 Accounts 65,242 68,036 Accrued interest 2,391 1,504 Other 441 Total current assets 818,704 867,080 NONCURRENT ASSETS 10,555 11,436 CAPITAL ASSETS Other improvements 496,132 496,132 Vehicles 151,554 31,379 Machinery and equipment 422,231 445,389 Total capital assets 1,069,917 972,900 Less: accumulated depreciation (573,102) (592,568) Capital assets, net of accumulated depreciation 496,815 380,332 Total noncurrent assets 496,815 380,332 TOTAL ASSETS 1,315,519 1,247,412 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows W resources - pension 99,542 45,199 TOTAL DEFERRED OUTFLOWS OF RESOURCES 99,542 45,199 LIABILITIES AND NET POSITION CURRENT LIABILITIES Accounts payable 48,222 47,570 Accrued compensated absences 51,258 43,008 Accrued liabilities 19,171 12,401 Total cement liabilities 118,651 102,979 NONCURRENT LIABILITIES Net pension liability 232,698 161,495 Accrued compensated absences 3,795 3,184 Total noncurrent liabilities 236,493 164,679 TOTAL LIABILITIES 355,144 267,658 DEFERRED INFLOWS OF RESOURCES Defamed inflows of resources - pension 10,555 11,436 TOTAL DEFERRED INFLOWS OF RESOURCES 10,555 11,436 NET POSITION Net investment in capital assets 496,815 380,332 Unrestricted 552,547 633,185 TOTAL NET POSITION $ 1,049,362 $ 1,013,517 S CITY OF ALLEN, TEXAS EXHIBIT D-8 COMPARATIVE STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION DRAINAGE ENTERPRISE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015 OPERATING REVENUES Drainage fees Service charges 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 Total transfers CHANGE IN NET POSITION NET POSITION, BEGINNING OF YEAR NET POSITION, END OF YEAR 95 2016 2015 $ 1,453,035 $ 1,350,684 45,764 114,360 20,606 2,759 1,519,405 1,467,803 577,140 487,577 91,925 73,974 367,850 290,705 74,497 34,780 29,652 22,739 5,074 4,547 1,146,138 914,322 373,267 553,481 5,086 4,748 378,353 558,229 (342,508) (606,278) (342,508) (606,278) 35,845 (48,049) 1,013,517 1,061,566 $ 1,049,362 $ 1,013,517 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF CASH FLOWS DRAINAGE ENTERPRISE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers Cash paid to employees for services Cash paid for goods and services Net cash provided by operating activities CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES Transfers out Net cash used in non -capital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of capital assets Net cash used in capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investments Purchase of investment securities Interest on investments Net cash provided by investing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Net operating income Adjustments to reconcile net operating income to net cash provided by operating activities: Depreciation Change in assets and liabilities: Accounts receivable Defamed outflows- pension Accounts payable Accrued liabilities Net pension liability Compensated absences Deferred inflows - pension Total adjustments Net cash provided by operating activities M EXHIBIT D-9 2016 2015 $ 1,521,758 $ 1,464,881 (552,300) (486,928) (531,924) (388,307) 437,534 589,646 (342,508) (606,278) (342,508) (606,278) (146,135) (24,943) (146,135) (24,943) 652 14,985 61,114 (1,897) - 4,199 4,819 2,302 65,933 (48,807) 24,358 401,131 376,773 $ 352,324 $ 401,131 $ 373,267 $ 553,481 29,652 22,739 2,353 (2,922) (54,343) (45,199) 652 14,985 6,770 714 (881) 11,436 8,861 4,386 71,203 30,026 64,267 36,165 $ 437,534 $ 589,646 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF NET POSITION GOLF COURSE ENTERPRISE FUND SEPTEMBER 30, 2016 AND 2015 81,360 EXHIBIT D-10 Accrued liabilities 2016 2015 ASSETS 111,670 100,698 CURRENT ASSETS 136,041 131,471 Cash and cash equivalents $ 450,904 $ 548,856 Other receivable 6 - Prepaid items 5,050 5,050 Total current assets 455,960 553,906 NONCURRENT ASSETS 631,898 437,764 CAPITAL ASSETS 27,941 25,195 Machinery and equipment 1,039,720 1,023,275 Less: accumulated depreciation (764,571) (625,721) Capital assets, net of accumulated depreciation 275,149 397,554 Total noncurrent assets 275,149 397,554 TOTAL ASSETS 731,109 951,460 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources - pension 270,686 122,522 TOTAL DEFERRED OUTFLOWS OF RESOURCES 270,686 122,522 LIABILITIES AND NET POSITION CURRENT LIABILITIES Accounts payable 81,360 168,505 Accrued liabilities 47,719 38,760 Accrued compensated absences 111,670 100,698 Capital leases payable - current 136,041 131,471 Customer deposits payable 33,230 31,155 Total current liabilities 410,020 470,589 NONCURRENT LIABILITIES Capital leases payable 116,478 239,340 Net pension liability 631,898 437,764 Accrued compensated absences 27,941 25,195 Total noncurrent liabilities 776,317 702,299 TOTAL LIABILITIES 1,186,337 1,172,888 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources - pension 28,597 30,999 TOTAL DEFERRED INFLOWS OF RESOURCES 28,597 30,999 NET POSITION Net investment in capital assets 22,630 26,743 Unrestricted (235,769) (156,648) TOTAL NET POSITION $ (213,139) $ (129,905) M 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, 2016 AND 2015 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 NON-OPERATING REVENUES Interest income LOSS BEFORE TRANSFERS TRANSFERS Transfers in Total transfers CHANGE IN NET POSITION NET POSITION, BEGINNING OF YEAR NET POSITION, END OF YEAR M 2016 2015 $ 2,684,923 $ 2,361,384 20,876 10,800 (83,234) 15,352 2,705,799 2,372,184 $ (213,139) 1,518,865 1,302,873 989,186 1,027,384 119,793 54,576 234,381 334,717 138,850 123,851 87,966 68,075 3,089,041 2,911,476 (383,242) (539,292) 8 (383,234) (539,292) 300,000 554,644 300,000 554,644 (83,234) 15,352 (129,905) (145,257) $ (213,139) CITY OF ALLEN, TEXAS EXHIBIT D-12 COMPARATIVE STATEMENTS OF CASH FLOWS GOLF COURSE ENTERPRISE FUND FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 2,705,793 $ 2,372,184 Cash paid to employees for services (1,461,579) (1,288,821) Cash paid for goods and services (1,507,437) (1,480,872) Net cash used in operating activities (263,223) (397,509) CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES Transfers in 300,000 554,644 Net cash provided by non -capital financing activities 300,000 554,644 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets - (28,800) Capital lease payment (134,737) (121,794) Net cash used In capital and related financing activities (134,737) (150,594) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 8 Net cash provided by investing activities 8 - NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (97,952) 6,541 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 548,856 542,315 CASH AND CASH EQUIVALENTS, END OF YEAR $ 450,904 $ 548,856 RECONCILIATION OF OPERATING LOSS TO NET CASH USED IN OPERATING ACTIVITIES Net operating loss $ (383,242) $ (539,292) Adjustments to reconcile net operating loss to net cash used in operating activities: Depreciation 138,850 123,851 Change in assets and liabilities: Amounts receivable (6) - Deferred ouffims-pension (148,164) (122,522) Accounts payable (87,145) (6,142) Accrued liabilities 8,959 6,847 Customer deposits 2,075 3,175 Net pension liability 194,134 81,390 Compensated absences 13,718 24,185 Defamed inflows - pension (2,402) 30,999 Total adjustments 120,019 141,783 Net cash used In operating activities$ (263,223) CITY OFA IEFIRST RESPECT INTEGRITY DELIVER EXCEL PEEP 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. Facility Maintenance Fund - The Facility Maintenance Fund accumulates resources to address large repairs and aging facility infrastructure. The accumulation of resources will help address major building repairs and prevent building deterioration. 100 CITY OF ALLEN, TEXAS EXHIBIT E-1 COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30, 2016 (WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2015) 101 RISK FACILITY TOTALS REPLACEMENT MANAGEMENT MAINTENANCE FUND FUND FUND 2016 2015 ASSETS CURRENT ASSETS Cash and cash equivalents $ 4,170,541 $ 2,408,185 $ 478.224 $ 7,056,950 $ 7,486.006 Imestmenls 6,852,521 3,164,618 332,032 101349,111 9,840,114 Acomed interest moercable 39,329 19.433 1,662 60,421 NAM Prepaid items 202,000 202,000 112,872 Total cument assets 11,062,391 5,794,233 811,918 17,668,542 17,471,615 CAPITAL ASSETS Macbinery and equipment 51906,680 - - 5,906,680 4,335,153 Vehicles 12,268,519 - - 12,268,519 11,693,051 Construction in Mogress 616,326 - 616,328 706,187 Agqumulated depreciation (10,675287) (10,675,287) (9,481,843) Capital assets, net of accumulated depreciation 8,116,236 8,116238 7,252,548 TOTAL ASSETS 19,178,629 5,794,233 811,918 25784)80 24,730,163 LIABILITIES AND NET POSITION LIABILITIES Accounts payable 51,434 231,896 103,516 M'm 147,148 Accrued liabilities - 447 - 447 - Incumed but not repgded claims 1,073,338 1,07.1336 983,434 TOTAL LIABILITIES 51,434 1,335,679 103,518 1.460,631 1,136.562 NET POSITION Net investment In capital assets 8,116,238 - 8,1161 7,252,548 Unrestricted 11,010,957 4,488,554 706,400 16,207,911 16,347,033 TOTAL NET POSITION $ 19,127,195 $ 4.488554 $ 70$400 $24,324.149 $23.599,581 101 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, 2016 (WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2015) RISK FACILITY TOTALS REPLACEMENT MANAGEMENT MAINTENANCE FUND FUND FUND 2016 VMS OPERATING REVENUES Charges for services $ ?113,832 $ 10,625,586 $ - $ 12,739,418 $ 12.309,305 Other income 5,388 147,40 197,428 465,323 Total operating revenues 2.164,220 10,772,626 - 12,93,846 12,774,628 OPERATING EXPENSES Personal seMces - 314,414 - 314,414 469,854 Conlrsetual serves 285,954 11,374,745 886,065 12,546)64 10,709.925 Depreciation 1.645,882 - 1,645,882 1,524633 Total operating expenses 1,931,836 11,689,159 8851065 14,507,060 12,706,412 OPERATING INCOME (LOSS) 23,384 (916,533) 1856,651 (1,570,214) 68,216 140"PERATING REVENUES Investment earnings 72,256 35,816 2,360 110,32 112,722 Gain on disposal of capital assets 14,870 14,870 64,459 Total non-operating revenues 219,126 35,816 2.360 257.302 177.181 INCOME BEFORE TRANSFERS 451,510 (880,717) (883,705) (1,312,912) 245,397 TRANSFERS Transfers in 445,375 1,592,105 2,037,480 1,385.695 Total transfers 445,375 1,592,105 2,037,480 1,385,695 CHANGE IN NET POSITION 451,510 (435,342) 708,400 724,568 1,631,092 NET POSITION, BEGINNING OF YEAR 18,675.685 4,923,896 23,599,581 21,968,489 NET POSITION, END OF YEAR $ 19,127,195 $ 4,488,554 $ 708400 _L24.324,149 $ 23,599,581 102 CITY OF ALLEN, TEXAS EXHIBIT E-3 COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2016 (WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2015) RSK FACILITY TOTALS REPLACEMENT MANAGEMENT MAINTENANCE FUND FUND FUND 2018 2015 CASH FLOWS FROM OPERATING ACTIVITIES $ 232.w $ (916,533) $ (eel (1,570,214) $ 63.216 Cash acad froon tan[asoahs with other Sell $ 2,096,094 $ 11,087.814 $ - $13,183,908 $12,939.584 Cash pail th" oyses for 5ervtss (2.543.572) 014,4141 - (314.414) (469.854) Cash pail b good, am 58"vkn (285,954) - (782.547) (1.089.501) (].1]9,551) Cash pal for clelma (2,362]02) (ry,48140q (11.4,54.409) (3,776,668) Net cash provided by operating aclivMNs 1,810,140 (711.004) 082.5471 316,589 1,563.481 CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES (427.38) M,657 (332,032( (759,404) (728.541) T.Wea in 1,577,756 445.375 1,5921105 2,D37,480 11385.695 Net cash provMM by nmrcepOel ihancing Indshis 53,480 445,375 1.592.105 2,037,180 1,385,695 CASH FLOWS FROM CAPITAL AND RELATED $ 232.w $ (916,533) $ (eel (1,570,214) $ 63.216 FINANCING ACTNATIES Ac'undon 0 capllal assets (2.543.572) - - (2.501 (2.066,W) Roceeds flan As of caplal assets 146.870 - 140,870 64,459 Net cash used In capital sntl related financing losialtW (2,362]02) (2,362,702) (2.091.925) CASH FLOWS FROM INVESTING ACTIVITIES (89,128) (65.128) 153.756 Purchase of lnaeshn,m notable (427.38) M,657 (332,032( (759,404) (728.541) Pmceedsfrmm sale and mebarnes oflmeshnent secunlis 1,577,756 250,347 1m.518 250.347 1,495,275 Invest on lnvesbnel6 53,480 28,448 B_a8 85,634 112,267 Net cash provided by (used in) Investing activities (368884) 279.795 (331,334) (420,423) (616,274) NET INCREASE DECREASE) IN CASH AND CASH EQUIVALENTS (921,446) 14.188 478,224 (429,056) 338937 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 501 2.394.019 7,186.006 7.155,019 CASH AND CASH EQUIVALENTS, END OF YEAR $ 4,170.541 $ 2403485 $ 4]8,224 $ 7,058950 $ 7.486.093 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Net operating lacome(lov) $ 232.w $ (916,533) $ (eel (1,570,214) $ 63.216 PpinMals to rewndle operating i,lmne (less) R, net cash boy ds Ey (used 11) operating a[trntis. Deasdamn 1.095682 - 1164.5,682 1,526,834 Chaffy, In este and liabilities iAlltisPf,sMa pripeds (89,128) (65.128) 153.756 Accounts payable (88126) M,657 103.518 330,1149 (18511]) Totalal(utmsb 1,577,756 21M.529 1m.518 1,886,803 1,495,275 Na open a.vld.d by(usl in)oprmOq xlMNs $ 1,6101140 S 011.0041 $ 082.54]) $ 316,599 $ 1,563,491 103 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 COMPARATIVE BALANCE SHEETS ALLEN ECONOMIC DEVELOPMENT CORPORATION SEPTEMBER 30, 2016 AND 2015 EXHIBIT F-1 2016 2015 ASSETS CURRENT ASSETS Cash and cash equivalents $ 8,029,021 $ 5,976,111 Investments 12,332,494 10,025,083 Sales tax receivable 1,689,157 1,531,556 Accounts receivable 700 - Accrued interest receivable 70,328 35,676 Prepaid items 6,298 6,298 TOTAL ASSETS $ 22,127,998 $ 17,574,724 LIABILITIES AND FUND BALANCES CURRENT LIABILITIES Accounts payable $ 269,488 $ 86,741 Accrued and other liabilities 18,205 17,335 TOTAL LIABILITIES 287,693 84,076 FUND BALANCES Nonspendable 6,298 6,298 Restricted Debt service 751,713 752,316 Unassigned 21,082,294 16,732,034 TOTAL FUND BALANCES 21,840,305 17,490,648 TOTAL LIABILITIES AND FUND BALANCES $ 22,127,998 $ 17,574,724 105 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, 2016 Total governmental fund balance $ 21,840,305 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. (55,177) 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. (19,468,437) 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. 9,511,870 Net position of governmental activities 106 $ 11,828,561 CITY OF ALLEN, TEXAS COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALLEN ECONOMIC DEVELOPMENT CORPORATION FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015 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.T 2016 2015 $ 9,438,024 $ 8,893,669 134,820 107,330 23 3,250 9,572,867 9,004,249 2,943,733 3,232,759 30,000 6,013,633 1,491,853 870,000 782,624 723,905 4,349,657 5,248,210 10,840,297 4,324,657 (1,836,048) - 4,400,000 25,000 1,060,792 25,000 5,460,792 4,349,657 3,624,744 17,490,648 13,865,904 $ 21,840,305 $ 17,490,648 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, 2016 Net change in fund balances -total governmental funds $ 4,349,657 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. (3,065) The repayment of the principal of long-term debt consumes the current financial resources of governmental funds 1,491,853 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 2,709 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 30,000 Change in net position of governmental activities 108 $ 5,717,821 CITY OF ALLEN, TEXAS COMPARATIVE BALANCE SHEETS ALLEN COMMUNITY DEVELOPMENT CORPORATION SEPTEMBER 30, 2016 AND 2015 EXHIBIT F-5 2016 2015 ASSETS CURRENT ASSETS Cash and cash equivalents $ 3,803,073 $ 4,794,237 Investments 6,329,960 6,261,134 Sales tax receivable 1,689,157 1,531,556 Accounts receivable 11,503 - Accrued interest receivable 38,290 20,969 TOTAL ASSETS $ 11,871,983 $ 12,607,896 LIABILITIES AND FUND BALANCES CURRENT LIABILITIES Accounts payable $ 400,397 $ 563,322 Retainage payable 198,471 28,701 TOTAL LIABILITIES 598,868 592,023 FUND BALANCES Restricted Debt service 200,918 1,101,508 Assigned for capital projects 7,819,170 7,819,170 Unassigned 3,253,027 3,095,195 TOTAL FUND BALANCES 11,273,115 12,015,873 TOTAL LIABILITIES AND FUND BALANCES $ 11,871,983 $ 12,607,696 109 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, 2016 Total governmental fund balance $ 11,273,115 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 (56,741) 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. (30,505,880) Net position of governmental activities 110 $ (19,289,506) CITY OF ALLEN, TEXAS 1,415,343 EXHIBIT F-7 COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES 2,650,530 1,816,365 AND CHANGES IN FUND BALANCES ALLEN COMMUNITY DEVELOPMENT CORPORATION FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015 2016 2015 REVENUES Sales and other taxes $ 9,438,024 $ 8,893,669 Investment earnings 76,388 64,366 Miscellaneous 193,161 Total revenues 9,707,573 8,958,035 EXPENDITURES Current: Community development Capital projects: Community development Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES AND (USES) Issuance of debt Payment to refund bond escrow agent Total other financing sources (uses) NET CHANGE IN FUND BALANCES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR 111 1,491,191 2,101,123 5,480,052 1,415,343 1,190,000 1,135,000 2,650,530 1,816,365 10,811,773 6,467,831 (1,104,200) 2,490,204 31,235,000 - (30,873,558) 361,442 (742,758) 2,490,204 12,015,873 9,525,669 $ 11,273,115 $ 12,015,873 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, 2016 Net change in fund balances -total governmental funds $ (742,758) Amounts reported for governmental activities in the statement of activities are different because: The proceeds from issuance of long-term debt (e.g. bonds) provides current financial resources to governmental funds ($31,235,000), while the repayment to escrow of long -ten debt for refunding consumes the current financial resources of governmental funds ($30,873,558). (361,442) 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. 1,991 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. 89,964 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. 1,190,000 Change in net position of governmental activities $ 177,755 112 a. CITY OF ALL EN AV IEFIRST RESPECT INTEGRITY DELIVER EXCEL PEEP CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS CITY OF T RESPECT INTEGRITY DELIVER EXCEL PE�PIEFI R,S CITY OF ALLEN, TEXAS COMPARATIVE SCHEDULES BY SOURCE (a) AS OF SEPTEMBER 30, 2016 EXHIBIT G-1 2016 2015 GOVERNMENTAL FUNDS CAPITAL ASSETS Land and land improvements $ 137,644,912 $ 131,973,606 Buildings 131,939,671 131,330,347 Machinery and equipment 11,364,411 11,421,675 Furniture and fixtures 7,958,722 7,973,242 Vehicles 2,339,864 2,477,078 Books 1,632,126 1,862,785 Infrastructure 498,916,776 484,877,368 Total property and equipment in service 791,796,482 771,916,101 Construction in progress 22,442,771 13,702,688 Total governmental funds capital assets $ 814,239,253 $ 785,618,789 INVESTMENTS IN GOVERNMENTAL FUNDS CAPITAL ASSETS BY REVENUE SOURCE General obligation bond proceeds and interest income $ 199,727,699 $ 192,892,418 Revenue bonds 10,475,000 10,475,000 Contributions 392,306,809 383,601,240 Other governments 9,951,500 9,951,500 General and other fund operations 179,745,191 166,685,149 Special revenue funds 22,033,054 22,013,482 Total governmental funds capital assets $ 814,239,253 $ 785,618,789 (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, 2016 Land & Land Function and Adrvity Improvements GENERAL GOVERNMENT Municipal court $ 631,788 City adminishadon 2,719,532 Information technology - intemal services - Finance 51,274,858 Total general government 3,351,320 PUBLIC SAFETY 115,047,127 Police - Fire 78,932 Total pudic safety 78,932 PUBLIC WORKS Community services & streets 51,274,858 Engineering 63,772,289 Total public vnrks 115,047,127 CULTURE & RECREATION Parks & recession 18,667,533 CVB - Ubrary Total cuiture and recreation 18,667,533 COMMUNITY DEVELOPMENT Building & code compliance Planning & development Total community development GRANT ADMINISTRATION Grant Administration 500,000 Total grant administration 500,000 Construction in Progress Machinery & Buildings Equipment $ - $ 289,669 137,584 8,871,016 523,936 - - 1,066,227 371,109 9,160,685 2,098,856 8,528,747 630,587 9,081,000 711,390 17,609,747 1,341,977 13,184,077 571,001 _ 8,624,175 160,284 21,808,252 731,285 70,288,315 5,512,797 _ 11,041,387 457,946 81,329,702 5,970,743 16,988 16,988 2,031,285 1,204,562 2,031,285 1,204,562 Total governmental funds capital assets 5 137,644,912 $ $ 131,939,671 $ 11,364,411 (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 he above amounts. Generally, the capital assets of internal service funds are induced as governmental activities in the statement of net position. 114 EXHIBIT G-2 FemY re& 258,240 Over Constr cfiw In - 10,810,342 Fi#eres Vehidw Books Improvements Progress Total $ - $ - $ - $ 6,178 $ - $ 1,065,219 838,708 25,348 - - - 12,978,540 12,978 39,570 - 5,539,835 - 6,658610 14,623 122,770 - 4,311 - 512,813 23,600 433,269,068 571,508,107 23,600 889,909 187,688 5,55,324 21,238,782 244,435 258,240 - 1,148,333 - 10,810,342 288,428 994,624 110,682 11,265,056 532,863 1,252,864 1,259,015 22,075,398 57,718 71,479 - 270,353,592 - 335,512,725 468,878 54,300 162,915,476 235,995,382 526,596 125,719 433,269,068 571,508,107 5,162,732 474,967 - 58354,544 - 15,460,888 - 26,221 - - - 26,221 837,256 1,622,199 3,519 13.962,307 5,999,988 51,188 1,622,199 56,358,063 170,449,416 13,619 9,366 19,848 9,366 33467 238,878 9,927 2,480,306 238,878 9,927 2,480,306 13,619 46,202 59,821 6,464,958 6,464,958 22,442,771 22,442,771 $ 7,958,722 $ 2,339,864 $ 1,632,126 $ 498,916,716 $ 22,442,771 $ 814,239,253 115 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, 2016 13,619 EXHIBIT G-3 - - Gommmental Funds Planning & Development 4,202 Governmental Funds 46,202 Capital Assets, Developer 59,821 Capital Assets Function and Activity October 1, 2015 Conbibutons Additions Deducitons Transfers September 3W, 2016 GENERAL GOVERNMENT Grant Administration 6.468,161 Municipal Court $ 1.065,219 $ - $ - $ - $ - $ 1,065,219 City Administiawn 12,906,299 - 72,241 - 12,978.540 Infomlatlon Technology 6,630,982 - 19,628 - - 6,650,610 Human Resources - - - - - - IntemalSernces 512,813 - - - - 512,813 RMarce 23,600 2,800 Total General Govemment 21,146,913 91,8139 21,238,782 PUBLIC SAFETY Police 10,916,475 - 5,775 (111,900) - 10,810,3@ Fire 11.928.563 (681,507) 11,265,056 Total Public Safety 22,843.038 5,775 (773,415) 2,075.390 PUBLIC WORKS Cammunity services&streets 32879,024 6,740,871 - (26,170) - 335.512725 Engineering 225,596,575 1.956.690 1,700,000 (81449) 8,75,558 235,995.382 Total Public Works 554,388,599 8.705.569 170.000 (34,619) 675.558 57115081107 CULTURE&RECREATION Perim &Recreation 152,821,8M - 2,456.5 (103,478) 1,286,002 15614601888 CVB - - 26,221 - - 2.221 Library 14,189,763 (22],4561 13,962,307 TWal Cubma & Recreation 167,011,569 2,402778 1330.9311 1,286.002 170.449,416 COMMUNITYDIV LOPMENT Building& Cada Compliance 13,619 - - - - 13.619 Planning & Development 4,202 46,202 Tadd Community Development 59,821 59,821 GRANT ADMINISTRATION Grant Administration 6.468,161 (3,203) 6,464,950 Total Grant Adminiswe l 8.468.161 (3,273) 6.464,958 Total general capital assets allocated by function 771,916,101 8705,569 428.423 (1,142,171) 0.038.580 791.798,482 Construction M progress 13702,680 16,78,643 (&038.5801 2,442,771 Total govemmental Funds capital assets $ 785,618789 $ 8705.569 $ 21,07,M $ 0,142,171) $ $ 814,239,253 (a) This schedule presents antsy Me capital asset balances related W governments? funds, Including Infrastructure. Accordingly, the capital asset reported! In Me Internal seMca funds are excluded Imm Me above amounts Generally the capital assets of Internal service funds are Included as governmental ac04ties in Me statement of net ,such. 116 STATISTICAL SECTION (UNAUDITED) it CITY OF Ar P�ppl EFIRST 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 City's overall financial health. This information has not been audited by the independent auditor. Contents Table #s Financial Trends 1, 2, 3 8 4 These tables contain trend information to help the reader understand how the Citys financial performance and well-being have changed overtime. Revenue Capacity 5, 6, 7 8 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 9, 10, 11 8 12 These tables present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Economic and Demographic Information 13 814 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. Source: Unless otherwise noted, the information in these tables is derived from the comprehensive annual financial reports for the relevant year. 117 CITY OF ALLEN,TEXAS TABLE 1 NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (Accrual Basis of Accounting) (Unauditedl Fiscal Year m no 2U 2013 2010 2015 2016 GovemmeMal nowines Net investment In otpAal assets $333.490,2]5 $3%.608833 5415,201,199 3428,55,870 $419,22],646 $426150.901 3422,1]2,4)3 $415,]90,43] $4083]0050 141],289,081 Rearrital 1,%8%8 1,151,014 1068651 08W9 18.656.870 21042,413 28,511,231 28066205 31,476,029 3$485,173 Vinarnicled 33,02,994 389%,825 43,584591 4,218,786 24,181,393 24,814,505 25R84,BG 27,]37,205 18,87B.W3 14,714,52 Thal tiro ental act.M.nH p.d.a $.7,N3,26] $40.4284]3 5459.854,441 5459,659,95 $462,W1,909 E4]1,BU,819 503.%0.388 $489,mm S4mmD.W3 $4&,408,950 Business-type a ovilies Net nvesimmt in oaplal asstls $ 83,485,274 $ 95,820414 E 92,988242 $ 94.903,309 $ 96280,053 $ N960,794 $ 98544,466 5150.991.443 Slm.340,588 51501]4,191 Reatnoted for deN semce 338842 922063 654.521 376.962 30.8092 428,648 364,510 26,859 344421 216,664 Unreabicbd 22,107,342 26,254327 28.450.857 27,145,W 3,718,11W 32830,970 35,144959 33.908,38 33,455.]45 32883,380 Total tanness4ype adivXies net poaiben $105.9284% L122.797,804 $122,083,620 $122.W5.600 E 12]256.5)5 S 133,20.410E 135 503,935 $134924 730 $1381M,]54 3139,2]4235 lonmarygovammanl Net nves8nml in capital auela $416875,549 546223,24] 3508,189,441 $523,534,179 5515,511650 $528168.695 $521718,939 5516]81,060 $510.]18.642 5523,443,272 RetNtled for delft service 1.438040 2.074,677 1,723.172 1,288,401 19,506,562 21.01,059 28,875,141 26,093,504 31,02,447 32,701,837 Ilnreelnoted 55,510,336 64921,153 72,035,448 67,364,105 54900,223 57.245,05 50428843 61,50,641 5,331,70 0,5%,032 Total pimerygovemmeMel net pcation E47382L,725 5529,226,0)] ESBt948.W13592104]]5 5589,418,04 3644.885.129 5803.022,323 5504,518,585 35920]0,83] 5809,]83,141 soume:Compmhensve Mnual Finanaal Repod 118 'G.'.$�_nR glamgm 126 R �,��mn8 mm��8 4 T P _ R8 'N'91111 �81 sams� Ery RIMs Pig!. 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W 0 Q �w• qo Z a w w, r 'i c @ m c E wwW " E' as n L y 0 LL 6 2 z a U C U a 2 N on w ac OUR' d A rNS�yw_ Q O d y y yCC Z F 0 U 6 U Q U W LL U F 4 d Q YU 2 ! § ) \ ] 2 ) \ ] ) § ! 9 ( ] 2 \ § \ | ] 2 § ;G/ ' ; Eo | | - 73(! ;) ! a ! | 2 ! , at Is. f ! \ 2! 2 | | . h) / E E — Hw J) EE�IE !!! e l,,,,,|§ {.�` {\/ ).`!! {� !\j !j/ CITY OF ALLEN, TEXAS TABLE 17 CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM FOR THE YEAR ENDED SEPTEMBER 30,2016 Nnauditedl Fiscal Year Function/Program 2007 2008 2009 2010 2011 2012 203 2014 2015 2016 Public Safety Police Stations 1 1 1 1 1 1 1 1 1 1 Police Patrol Units 18 23 24 23 23 27 27 27 27 28 Fire Stations 4 4 4 4 4 5 5 5 5 5 Police Motorcycle Units 4 4 4 4 4 4 4 4 4 4 Development Services Streets-Paved(miles) 307 312 314 318 321 325 326 330 331 336 Alleys-Paved(miles) 159 161 161 163 163 163 163 165 166 167 Cultural and Recreational Parks(acres) 578 578 578 576 576 597 597 599 599 607 Playgrounds 32 32 32 32 32 32 32 32 32 32 Swimming Pools(outdoor) 1 1 1 1 1 1 1 1 1 1 Recreation Centers 1 1 1 1 1 1 1 1 1 1 Senior Center 1 1 1 1 1 1 1 1 1 1 Tennis Courts 5 5 5 5 5 5 5 5 5 5 Natatorium 1 1 1 1 1 1 1 1 1 1 Visitor(Youth)Center 1 1 1 1 1 1 1 1 1 1 Golf Course 1 1 1 1 1 1 1 1 1 1 Event Center - - - 1 1 1 1 1 1 1 Water and Sewer Water Mains(miles) 427 439 445 452 456 461 467 471 474 481 Fire Hydrants 3,894 3,941 3,954 3,981 4,022 4,144 4,210 4,329 4,398 4,560 Sanitary Sewers(miles) 329 334 336 339 342 346 352 354 356 361 Stone Sewer Lines(miles) 101 103 104 105 106 107 108 109 110 112 Source:City Departments 135