Comprehensive Annual Financial ReportCITY OF ALLEN, TEXAS
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
CITY OF ALLEN
FISCAL YEAR ENDED
SEPTEMBER 30, 2005
AS PREPARED BY THE
FINANCE DEPARTMENT
CITY OF ALLEN, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005
TABLE OF CONTENTS
It. FINANCIAL SECTION
Independent Auditor's Report 1
A. MANAGEMENT'S DISCUSSION AND ANALYSIS 3
B. BASIC FINANCIAL STATEMENTS
Government -Wide Financial Statements
EXHIBIT Page
I. INTRODUCTORY SECTION
Statement of Net Assets
Letter of Transmittal
i
Certificate of Achievement
viii
Organizational Chart
ix
Elected Officials and Administrative Officers
x
It. FINANCIAL SECTION
Independent Auditor's Report 1
A. MANAGEMENT'S DISCUSSION AND ANALYSIS 3
B. BASIC FINANCIAL STATEMENTS
Government -Wide Financial Statements
Statement of Net Assets
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 Government
Funds to the Statement of Net Assets
4
22
Statement of Revenues, Expenditures and
Changes in Fund Balances — Governmental Funds
5
24
Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances
of Governmental Funds to the Statement
of Activities
6
26
Proprietary Funds Financial Statements
Statement of Net Assets — Proprietary Funds
7
27
Reconciliation of the Statement of Net Assets
of Proprietary Funds
8
28
Statement of Revenues, Expenses and Changes
In Net Assets — Proprietary Funds
9
29
Reconciliation of the Statement of Revenues,
Expenses and Changes in Net Assets of
Proprietary Funds to the Statement of Activities
10
30
Statement of Cash Flows — Proprietary Funds
11
31
Component Units Financial Statements
Statement of Net Assets — Component Units
12
32
Statement of Activities — Component Units
13
33
CITY OF ALLEN, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005
TABLE OF CONTENTS
C. REQUIRED SUPPLEMENTARY INFORMATION
General Fund Schedule of Revenues, Expenditures
And Changes in Fund Balances - Budget and Actual A-1 65
Notes to Required Supplementary Information 66
D. COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Major Governmental Funds
EXHIBIT
Page
Notes To Financial Statements
B-1
Note 1.
Summary of Significant Accounting Policies
35
Note 2.
Deposits, Investments and Investment Policies
43
Note 3.
Receivables
46
Note 4.
Capital Assets
47
Note 5
Long -Term Debt
51
Note 6.
Interfund Receivables and Payables
59
Note 7.
Interfund Transfers
59
Note 8.
Retirement Plan
61
Note 9.
Water and Sewer Contracts
63
Note 10.
Deferred Compensation Plan
63
Note 11.
Risk Management
63
Note 12.
Commitments and Contingent Liabilities
64
C. REQUIRED SUPPLEMENTARY INFORMATION
General Fund Schedule of Revenues, Expenditures
And Changes in Fund Balances - Budget and Actual A-1 65
Notes to Required Supplementary Information 66
D. COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Major Governmental Funds
Comparative Balance Sheets - General Fund
B-1
68
Comparative Statements of Revenues, Expenditures and
Changes in Fund Balances - General Fund
B-2
69
Comparative Balance Sheets - Debt Service Fund
B-3
70
Comparative Statements of Revenues, Expenditures and
Changes in Fund Balances - Debt Service Fund
B4
71
Budgetary Comparison Schedule - Debt Service Fund
B-5
72
Comparative Balance Sheets - Facilities Agreement Fund
B-6
73
Comparative Statements of Revenues, Expenditures and
Changes in Fund Balances - Facilities Agreement Fund
B-7
74
Comparative Balance Sheets - General Capital Projects Fund
B-8
75
Comparative Statements of Revenues, Expenditures and
Changes in Fund Balances - General Capital Projects Fund
B-9
76
CITY OF ALLEN, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005
TABLE OF CONTENTS
EXHIBIT
Page
Comparative Balance Sheets - Street Improvements Fund
8-10
77
Comparative Statements of Revenues, Expenditures and
Changes in Fund Balances - Street Improvements Fund
B-11
78
Comparative Balance Sheets - Park Improvements Fund
B-12
79
Comparative Statements of Revenues, Expenditures and
Changes in Fund Balances - Park Improvements Fund
B-13
80
Comparative Balance Sheets - Library Fund
B-14
81
Comparative Statements of Revenues, Expenditures and
Changes in Fund Balances - Library Fund
8-15
82
Comparative Balance Sheets -General Obligation Bond Fund
B-16
83
Comparative Statements of Revenues, Expenditures and
Changes in Fund Balance - General Obligation Bond Fund
B-17
84
Non -major Governmental Funds
Combining Balance Sheet
C-1
86
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
C-2
88
Major Enterprise Funds
Comparative Statements of Net Assets - Water and Sewer
D-1
92
Comparative Statements of Revenues, Expenses and
Changes in Fund Net Assets - Water and Sewer
0-2
93
Comparative Statements of Cash Flows - Water and Sewer
0-3
94
Comparative Statements of Net Assets - Solid Waste
D-4
95
Comparative Statements of Revenues, Expenses and
Changes in Fund Net Assets - Solid Waste
D-5
96
Comparative Statements of Cash Flows - Solid Waste
D-6
97
Comparative Statements of Net Assets - Drainage
D-7
98
Comparative Statements of Revenues, Expenses and
Changes in Fund Net Assets - Drainage
D-8
99
Comparative Statements of Cash Flows - Drainage
D-9
100
Statement of Net Assets - Golf Course
D-10
101
Statement of Revenues, Expenses and
Changes in Fund Net Assets - Golf Course Fund
D-11
102
Statement of Cash Flows - Golf Course Fund
D-12
103
Internal Service Funds
Combining Statement of Net Assets
E-1
105
Combining Statement of Revenues, Expenses and
Changes in Fund Net Assets
E-2
106
Combining Statement of Cash Flows
E-3
107
CITY OF ALLEN, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005
TABLE OF CONTENTS
EXHIBIT
Page
Discretely Presented Component Units
Comparative Balance Sheets -Economic Development Corporation
F-1
109
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Assets
F-2
110
Comparative Statements of Revenues, Expenditures and Changes
in Fund Balances
F-3
111
Reconciliation of the Governmental Funds Statement of
Revenues, Expenditures and Changes in Fund Balance
F-4
112
Comparative Balance Sheets -Allen Community Development
Corporation
F-5
113
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Assets
F-6
114
Comparative Statements of Revenues Expenditures and
Changes in Fund Balances
F-7
115
Reconciliation of the Governmental Funds Statement of
Revenues, Expenditures and Changes in Fund Balance
F-8
116
E. CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
Comparative Schedules by Source
G-1
117
Schedule by Function and Activity
G-2
118
Schedule of Changes by Function and Activity
G-3
120
TABLE
Page
STATISTICAL SECTION
Net Assets by Components
1
122
Changes in Net Assets, Last Three Fiscal Years
2
123
Fund Balances, Governmental Funds
3
125
Changes in Fund Balances, Governmental Funds
4
126
Assessed Value and Estimated Actual Value of Taxable Property
5
127
Direct and Overlapping Property Tax Rates
6
128
Principal Property Tax Payers
7
129
Ad Valorem Tax Levies and Collections
8
130
Ratio of Outstanding Debt by Type
9
131
Ratio of General Bonded Debt Outstanding
10
132
Direct and Overlapping Governmental Activities Debt
11
133
Pledged -Revenue Coverage
12
134
Demographic and Economic Statistics
13
135
Principal
Employers
14
136
Full -Time
Equivalent City Government Employees by
Function/Program
15
137
Operating Indicators by Function/Program
16
138
Capital Asset Statistics by Function/Program
17
139
CITY OF ALLEN
March 28, 2606
To the Honorable Mayor, Members of the City
Council,
And Citizens of the City of Allen, Texas
The Comprehensive Annual Financial Report
(CAFR) of the City of Allen, Texas (the "City"),
for the fiscal year ended September 30, 2005, is
hereby submitted.
The report was prepared by the Finance
Department and our independent auditors,
Weaver and Tidwell, L.L.P. This report is
prepared to provide the City Council, City staff,
our citizens, our bondholders, and other
interested parties with detailed information
concerning the financial condition and
activities of the City government.
Responsibility for both the accuracy of ..
the presented data and the
completeness and fairness of the
presentation, including all
disclosures, rests with the City.
To the best of our knowledge and belief
the enclosed data, as presented, is accurate
and presented in a manner designed to fairly set
forth, in all material respects, the financial
position and results of operations of the City with
all disclosures necessary to enable the reader to
gain an understanding of the City's financial
affairs.
The CAFR is presented in three sections:
Introductory, Financial and Statistical. The
Introductory section includes this transmittal
letter, Certificate of Achievement, the City's
organizational chart, and a list of principal
officials. The Financial section includes the
independent auditors report on the financial
statements and schedules, Management's
Discussion and Analysis (MD&A), basic financial
statements government -wide and major fund
presentations, required supplementary
information, combining and individual fund
statements, as well as the independent auditor's
report on the financial statements and
schedules. This letter of transmittal is designed
to complement and should be read in
conjunction with the MD&A. The Financial
Section is prepared in accordance with
generally accepted accounting
" principles for governments as
prescribed by the Government
_ Accounting Standards Board (GASB).
The Statistical section reflects changes
E•
to meet Governmental Accounting
Standards Statement No. 44, Economic
Condition Reporting. This statement Improves
the understandability and usefulness of the
information presented as supplementary
information in the statistical section. The City is
implementing this change one year earlier than
required.
CITY OF ALLEN PROFILE
The City of Allen is 25 miles north of downtown
Dallas on U.S. 75. It is in the midst of the growth
ALLEN CIVIC PLAZA • 305 CENTURY PARKWAY • ALLEN, TEXAS 75013-8042
214.509.4100
EMAIL: waOcityofallen.org
emanating from Dallas and its northern suburbs.
The City has established a reputation in the
Dallas/Fort Worth Metroplex and in the state of
Texas for being at the forefront of development
and is promoting commercial and residential
growth in ways that will aid in having a balanced
community.
The relocation of high technology companies to
the north Dallas and Richardson areas has
significantly increased employment opportunities
for Allen citizens. The City's population
continues to increase from 43,686 in 2000 to
69,891 in 2005, and it is estimated to surpass
97,900 by the year 2011. The City estimates the
current population (January 31, 2006) is 71,037.
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.
Public hearings are conducted to obtain
taxpayers' comments. Prior to October 1, the
budget is legally enacted by the City Council
through passage of an ordinance, setting the
limit for expenditures during the fiscal year.
Expenditure appropriations in the adopted
budget are by department and may be amended
during the year. The City Manager is authorized
to adjust budgeted amounts; however, such
revisions may not result in total expenditures
exceeding budgeted expenditures without
approval of the City Council.
Allen was settled in the early 1850s from land Formal budgetary integration is not employed for
grants given by the Republic of Texas as an Special Revenue Funds, Proprietary Funds or
inducement for settlers to come to the frontier. Capital Project Funds. However, the City does
The City is a home rule city operating under the adopt an annual budget for those funds for
Council -Manager form of government and was managerial control.
incorporated in 1953. The City Council is
comprised of the Mayor and six Council
members, who enact local laws, determine
policies and adopt the annual budget. The City
Council appoints the City Manager, who has full
responsibility for carrying out Council policies
and administering City operations. City service
departments provide a full range of services
including police and fire protection,
sanitation/solid waste service, water and sewer
services, construction and maintenance of
streets, recreational activities and cultural
events.
The annual budget serves as the foundation for
Allen's financial planning and control. Annual
budgets are legally adopted for the General
Fund and Debt Service Fund. Each year the
City Manager is required to submit to the City
FACTORS AFFECTING THE CITY'S
FINANCIAL CONDITION
Economic Development - In 1992 Allen voters
approved a half -cent sales tax to fund economic
development and the Allen Economic
Development Corporation (AEDC) was formed.
With its proactive approach to economic
development, Allen has earned a reputation as a
premier location for high-tech manufacturing,
assembly/distribution facilities, and corporate
headquarters, retail and services. Accordingly,
Allen's business parks offer space available
from 1,000 to 100,000+ square feet with the
high-tech infrastructure required by these
businesses including dual -feed electric power
from separate substations, fiber-optic availability
and stateof-theart high speed
telecommunications.
11
' New development activity in Allen is creating
new opportunities for office and officettech
users, medical professional offices, and retail,
' restaurant and entertainment venues. Major
projects underway in Allen to meet the needs of
the growing region are:
• The Corporate Center at Twin Creeks -
Multi -phased project for smaller office
and officettech users.
• Presbyterian
Hospital expansion
- doubles number
of beds, adds ICU,
and enhances
diagnostic services.
• Presbyterian
Medical Office
Building II -
Additional three-
story medical office space in conjunction
with the expansion of Presbyterian
Hospital.
• Twin Creeks Medical Center II - Part of
a three -building medical office project
south of the hospital.
• Hampton Inn & Suites - A 102 -room
hotel located adjacent to the Allen
Premium Outlets scheduled to open in
May 2006.
• Holiday Inn Express & Suites - An 87 -
room hotel located in Twin Creeks
Business Park.
Scheduled to open in
summer 2006.
• Blue Star Investments
broke ground on the
residential portion of
StarCreek, located
north of Stacy Road,
west of Allen Premium
restaurants. The 529 acres on SH 121,
just west of US 75, has plans for 900
single-family homes.
Montgomery Farm Garden District -
Unique project that will include upscale
restaurants and shops in a lifestyle
center environment on 500 acres at the
southwest corner of Bethany and US 75
includes several hundred residences.
Time Fitness, Cinemark and other
family-oriented entertainment and
11
Businesses already located
in Allen grew last year
generating new
construction activity and
filling vacant space.
Business expansions
included:
• Quest Medical -
Added employees in an internal
expansion.
Accudata - occupies 5,000 square feet
in The Corporate Center at Twin
Creeks.
AirGATE Technologies - Relocated to
11,600 square feet in Bethany Tech
Center.
Allen Premium Outlets - Phase III
construction completed, adding 67,000
square feet and exciting new stores
including Nike Factory Store, Ann Taylor
Factory Store and
ar r • more.
Jack Henry &
Associates -
Purchased the
adjacent building at
1025 Central
Expressway South
" to expand their
presence in Allen.
J. Suzette & Company - Leased an
additional 20,000 square feet in Allen
Station Park.
WQuest - With two expansions in one
year, this rapidly growing company is
moving into 34,000 square feet at 915
Enterprise.
outlets. There are
879 single-family homes planned to be
built, priced from the $300,000. The
529 acre project announced In 2004
t
includes retail and commercial
development along SH 121.
• StarCreek Commercial Developments -
The first phase, approximately 80 acres
a
west of Cottonwood Creek, includes Life
Time Fitness, Cinemark and other
family-oriented entertainment and
11
Businesses already located
in Allen grew last year
generating new
construction activity and
filling vacant space.
Business expansions
included:
• Quest Medical -
Added employees in an internal
expansion.
Accudata - occupies 5,000 square feet
in The Corporate Center at Twin
Creeks.
AirGATE Technologies - Relocated to
11,600 square feet in Bethany Tech
Center.
Allen Premium Outlets - Phase III
construction completed, adding 67,000
square feet and exciting new stores
including Nike Factory Store, Ann Taylor
Factory Store and
ar r • more.
Jack Henry &
Associates -
Purchased the
adjacent building at
1025 Central
Expressway South
" to expand their
presence in Allen.
J. Suzette & Company - Leased an
additional 20,000 square feet in Allen
Station Park.
WQuest - With two expansions in one
year, this rapidly growing company is
moving into 34,000 square feet at 915
Enterprise.
AEDC's recruitment projects were responsible
for bringing approximately 700 primary jobs to
Allen. Allen's unemployment rate continues to
decline, with 3.5% unemployment reported in
December 2005. Recruitment efforts resulted in
filling approximately 600,000 square feet of
space (including 256,000 square feet of new
construction). Those projects include:
• Advanced Optical Components
• ACH Direct
• Applied Signal Technology
• BSM Financial
• Cinemark
• Cintas
• Diebold Election Systems
• Life Time Fitness
• Nextel Retrofit &
Refurbishment
• Specialize Resources
Property Values — Assessed
property values increased $352
-' million (7.9%) from the preceding year. The
increase is accounted for by $234 million in new
property and a $118 million increase in the value
of existing property. Assessed property value
has increased 67% over the past five years and
accounts for 48% of the General Fund revenue.
Increases in assessed property value along with
continued economic growth have allowed the
City Council to lower the property tax rete for the
thirteenth consecutive year while improving
quality services to its citizens.
• Enhance neighborhood livability and
safety.
• Cultivate alliances and partnerships
with agencies and governmental units
that affect Allen.
• Improve regional mobility through
transportation initiatives.
• Signify City of Allen identity through
recreation and leasure opportunities
and beautification efforts.
• Systematically invest in public
infrastructure.
• Achieve operational
excellence in City
government services.
Retail Sales — The General Fund's second
largest revenue source is sales tax generated
from a variety of businesses operating in the
City of Allen. Sales tax receipts resulted in
revenue of $7.7 million in fiscal year 2004-05, a
9.7% increase over the prior year. Recent
increases in sales tax revenues are indicative of
increased consumer confidence and spending
and increased numbers of retailers and
restaurants.
Long -Term Financial Planning — The City's
annual budget process involved incorporating
the goals and strategies identified by the City
Council's three-year Strategic Plan to provide for
the community's highest priority needs. The goal
statements developed by the City Council are:
Individual departments develop
their goals and objectives in
terms of these all-
encompassing organizational
goals.
Strategic Financial Plan — An appropriate
financial plan for the City of Allen requires many
elements all working in concert with one
another. Current expectations are for continued
sales tax revenue growth, potential reductions of
state revenue sharing, and additional demands
for "essential" City services such as police, fire,
water, sewer, drainage and street improvement.
The Finance Department's management role will
be to maintain and enhance financial plan
elements and ensure the continued financial
stability for the City of Allen.
Financial Resource Planning — Strategic
planning begins with determining the City's fiscal
capacity based upon long-term financial
forecasts of recurring available revenues.
Financial forecasts coupled with financial trend
analysis techniques and careful reserve analysis
will preserve the fiscal well being of Allen.
Strategic planning is a critical element not only
to meet long-term financial stability goals but
also to determine City Council objectives that
will require special financial planning to achieve
success.
Strategic Capital Improvement Program
Planning — The City of Allen's Capital
Improvement Program (CIP) is a mull -year
financial plan for the acquisition, expansion, or
rehabilitation of infrastructure, capital assets, or
productive capacity of City services. The City's
operating and capital projects budgets are
closely linked.
Revenues for the capital budget come primarily
from bond sales, supplemented by development
fees and some current revenues. The capital
improvement program unlike the operating
budget is a five-year plan and is reviewed and
projects are repriorhized on an ongoing basis.
Although not formally adopted as part of the
annual budget, project budgets are used as a
guide for project, debt and other related budget
planning. As such, future years are subject to
change: in addition, debt issuance for many
future projects is subject to voter approval.
'
Throughout the year
projects are
monitored and
repriorilized as
'
needed. The City
utilizes the project
accounting and
budgeting
components of the
financial software to
assist with the
monitoring aspect of
the process.
Pre0, W.W rte..
Monthly reports are
provided to Council to keep them informed of the
status of projects.
In Spring, 2006 Allen residents will be
encouraged to participate in a planning process
to determine the future capital improvement
projects for the City of Allen as part of the 2006-
2012 bond program. With support provided by
City staff, interested residents will serve on a
special bond committee to identify and prioritize
needs as related to Finance, Parks/Recreation,
Streets/Drainage, Water/Sewer, Public Safety
and other City facilities.
Debt Management — All debt issuances are for
the purposes of financing capital infrastructure
or long-lived costly assets. Each debt issuance
is evaluated against multiple policies
addressing: debt service as a percent of
operating expenditures, tax and revenue bases
for the repayment of debt, the overall debt
burden on the community, statutory limitations
and market factors affecting tax-exempt interest
costs. Sizing of the City's capital improvement
program based on debt capacity in conjunction
with conservatively estimated payors -you -go
revenues will help stabilize per capita debt and
lower annual debt service costs to the City over
the long-term. To take advantage of lower
interest rates, in April, 2005 the City issued
$32,330,000 in General Obligation Refunding
bonds to advance refund $32,170,000 of G.O.
Bond Series 1996, 1998, 1999, 2000, and G.O.
Improvement Bonds Series 2001 to obtain an
economic gain of $1,124,880.
Cash Management Policies and Practices —
The City of Allen's investment policy is to invest
all City funds at the highest
available interest rate, assuring
that all monies are fully secured
with emphasis on safety of
principal, liquidity, yield,
diversification, and public trust.
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 utilizes a
pooled cash concept in order to
invest greater amounts of cash at
one time and therefore receives
more favorable interest rates.
Insurance and Risk Management - The City
has a comprehensive risk management
program, including property, liability, safety,
workers' compensation, health, dental and
wellness. Administration of these functions
requires participation from the Risk Manager,
outside legal counsel and consultants.
The City has established a self-insurance plan
for City employees and their covered
dependents for medical and dental care. A
commercial insurance company re -insures the
City for individual claims in excess of $75,000.
The City participates in the Texas Municipal
League Intergovernmental Risk Pool (TMLIRP),
which provides the City with a full range of
insurance products and services. TMLIRP
carries the City's general liability, property and
casualty insurance and workers compensation.
Each category of coverage has a speck
deductible per occurrence. The Texas Tort
Claims Act limits the liability of a municipality to
a maximum of
$250,000 for each
person and $500,000
for each occurrence for
bodily injury or death
and $100,000 for each
occurrence or injury to
or destruction of
property.
The City of Allen also
has a safety incentive
program that promotes
job and focuses on risk control techniques
designed to minimize accident -related losses. In
addition to the safety program's preventive
measure, claims are closely monitored in order
to minimize the City's liability exposure.
Allen a "livable" community for future
generations.
Providing new facilities is not just a one time
Procurement Planning- Under the Finance
Department, the Purchasing division is
responsible for the procurement of
items required to operate and
maintain the City. This division
assists all departments in planning
and maintaining the City's financial
health, by establishing a uniform
procedure for obtaining goods and
services in an effective and timely
manner in accordance with
generally accepted purchasing
procedures and legally mandated
procurement standards. The City has
contracted with DemandStar.com for the
maintenance of an automated vendor list which
categorizes each vendor by commodity codes
for the specific goods or services offered by the
vendor.
capital expenwru'e, u
long-term annual investment the
City makes in order to provide
resources for the ongoing
operations and maintenance of the
facilities. As a result additional
personnel, facility and building
services were spent for the new
Municipal Library and Civic
Auditorium and Allen Station Park
Phase II which includes a youth
center, a skate park and hockey
laza, trails, orchard, parking and
pedestrian oridges.
In October, 2004 Chase Oaks Goff Course, a
260 acre course offering 27 holes of
championship golf, was purchased for $4.8
million. The transition from a private club to a
municipal golf course required significant
modifications and renovations intended to
improve the playability of the
course and increase the
number of rounds played.
Also, the City of Allen, In
conjunction with the cities of
Plano and Frisco, began the
design and engineering
phase of a regional
performing arts complex,
The Arts of Collin County,
located within Allen's city
FISCAL YEAR 2005 HIGHLIGHTS
The City of Allen's fiscal year 2004-2005 budget
continued to maintain a fiscally conservative
approach yet at the same time met the
challenge of providing a full range of city
services to an increasing citizen population.
Numerous drainage, water and sewer, park and
recreation and street renovations and
construction projects were completed, making
vi
limits.
Street construction was completed on Allen
Drive, Coats Drive, St. Mary Drive, Ridgemont
Drive, Exchange Parkway and Watters Road.
Also, Community Development Block Grants
made sidewalk improvements for Hillside and
Windridge subdivisions.
Bethany Lakes park playground was redesigned
and improved and Glendover, Bethany Ridge,
Dayspring Nature Preserve Phase It, Quail Run,
Ford Park East, Stacy Ridge and Story
neighborhood parks were completed.
The City continues to anticipate steady growth,
although at a slower pace than in previous
years. Several residential developments are in
various states of completion. The City expects
to issue about 1,300 single family permits in
FY2006. In addition, Montgomery Farms and
Star Creek, two mixed-use developments, broke
ground in 2005 and are in various stages of
development. These developments will have a
steady impact on the growth of the City of
Allen's assessed valuations, populations and
sales tax revenues over the next several years.
The City will continue to monitor economic
conditions, and is prepared to make adjustments
as necessary should circumstances change.
AWARDS AND ACKNOWLEDGEMENTS
The Government Finance r, Devefupme
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 comprehensive
annual financial report for
the fiscal year ended
September 30, 2004. This
was the seventh
consecutive year that the government has
achieved this prestigious award. In order to be
awarded a Certificate of Achievement, a
government must publish an easily readable and
efficiently organized comprehensive annual
financial report. This report must satisfy both
generally accepted accounting principles and
applicable legal requirements.
A Certificate of Achievement is valid for a period
of one year only. We believe that our current
comprehensive annual financial report 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.
Many people are responsible for the preparation
of this report, and for the maintenance of
records upon which it is based. Appreciation is
Respectfully submitted,
expressed to representatives
of Weaver and Tidwell L.L.P.
for their invaluable
assistance in producing the
final document and to Dana
Murray, Senior Accountant,
and Tru Nguyen, Accountant,
who were instrumental in the
completion of this report.
JWe would also like to thank
the City Manager's office and
the members of the City Council for their interest
and support in planning and conducting the
financial operations of the City in a responsible
and progressive manner.
Kevin Hammeke Joanne Stoehr
Director of Finance Assistant Finance Director
vii
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, 2004
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Crovermrtent Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in govermnent accounting
and financial reporting.
a.
President
Executive Director
City of Allen
Organizational Chart
CITY OF ALLEN, TEXAS
CITY OFFICIALS
IVES
CITY OF ALLEN
Council Members
Mayor
Stephen Terrell
Mayor Pro Tem, Place 5
Kenneth Fulk
Place 1 Council Member
Debbie Stout
Place 2 Council Member
Ross Obermeyer
Place 3 Council Member
Mark Pacheco
Place 4 Council Member
Susan Bartlemay
Place 6 Council Member
Jeff McGregor
Management Staff
City Manager Peter H. Vargas
Finance Director Kevin Hammeke
Assistant Finance Director Joanne Stoehr
We have audited the accompanying financial statements of the governmental activities,
the business -type activities, the aggregate discreetly 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, 2005, which collectively comprise the City's
t basic financial statements, as listed in the table of contents. These basic financial
statements are the responsibility of the City's management. Our responsibility is to
express an opinion on these basic financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America and Govemment 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 includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as
' evaluating the overall financial statement presentation. We believe that our audit provides
a reasonable basis for our opinions.
In our opinion the basic financial statements referred to above present fairly, in all material
respects, the financial position of the governmental activities, the business -type activities,
the aggregate discreetly presented component units, each major fund, and the aggregate
remaining fund information of the City of Allen at September 30, 2005, and the respective
I' changes in financial position and cash Flows, where applicable, thereof, for the year then
ended in conformity with accounting principles generally accepted in the United States of
America.
In accordance with Government Auditing Standards, we have also issued our report
dated March 1, 2006, on our consideration of the City's internal control over financial
reporting and 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
DALLAS describe the scope of our testing of internal control over financial reporting and
rw.ee F.e.. P1a compliance and the results of the testing, and not to provide an opinion on the internal
'
122211-1 LI control over financial reporting or on compliance. That report is an integral part of an
SA... 1400 audit performed in accordance with Government Auditing Standards and should be
Dau.,. Tern. )5251-2280 Considered in assessing the results of our audit.
922 NON 1970
F 922702 8321
The accompanying management's discussion and analysis and budgetary comparison
FORT WORT. information on pages 3 through 15 and 65 through 66, respectively, are not a required part
1600 Wert s .e S-11 of the basic financial statements but are supplementary information required by the GASB.
sn,.e 300 We have applied certain limited procedures, which consisted principally of inquiries of
sa„W.tA, r a. 24102.2500 management regarding the methods of measurement and presentation of the required
803329995
FBIZl295936 supplementary information However, we did not audit the information and express no
opinion on it.
WWW L LOU
AN INDEPENDENTNEPENDET MEMBER OF
BAKER TILLY
INTCRNAT,ONAL 1
II I
INDEPENDENT AUDITOR'S REPORT
'
WEAVER
TIDWELL
LLP
Honorable Mayor and Members of
the City Council
CERTIFIED PUBLIC
ACCOUNTANTS
CITY OF ALLEN, TEXAS
'
AND CONSULTANTS
We have audited the accompanying financial statements of the governmental activities,
the business -type activities, the aggregate discreetly 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, 2005, which collectively comprise the City's
t basic financial statements, as listed in the table of contents. These basic financial
statements are the responsibility of the City's management. Our responsibility is to
express an opinion on these basic financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America and Govemment 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 includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as
' evaluating the overall financial statement presentation. We believe that our audit provides
a reasonable basis for our opinions.
In our opinion the basic financial statements referred to above present fairly, in all material
respects, the financial position of the governmental activities, the business -type activities,
the aggregate discreetly presented component units, each major fund, and the aggregate
remaining fund information of the City of Allen at September 30, 2005, and the respective
I' changes in financial position and cash Flows, where applicable, thereof, for the year then
ended in conformity with accounting principles generally accepted in the United States of
America.
In accordance with Government Auditing Standards, we have also issued our report
dated March 1, 2006, on our consideration of the City's internal control over financial
reporting and 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
DALLAS describe the scope of our testing of internal control over financial reporting and
rw.ee F.e.. P1a compliance and the results of the testing, and not to provide an opinion on the internal
'
122211-1 LI control over financial reporting or on compliance. That report is an integral part of an
SA... 1400 audit performed in accordance with Government Auditing Standards and should be
Dau.,. Tern. )5251-2280 Considered in assessing the results of our audit.
922 NON 1970
F 922702 8321
The accompanying management's discussion and analysis and budgetary comparison
FORT WORT. information on pages 3 through 15 and 65 through 66, respectively, are not a required part
1600 Wert s .e S-11 of the basic financial statements but are supplementary information required by the GASB.
sn,.e 300 We have applied certain limited procedures, which consisted principally of inquiries of
sa„W.tA, r a. 24102.2500 management regarding the methods of measurement and presentation of the required
803329995
FBIZl295936 supplementary information However, we did not audit the information and express no
opinion on it.
WWW L LOU
AN INDEPENDENTNEPENDET MEMBER OF
BAKER TILLY
INTCRNAT,ONAL 1
II
1 City of Allen, Texas
Page Two
1 Our audit was made for the purpose of forming opinions on the basic financial statements
1 taken as a whole. The introductory section, combining and individual major and non -major
fund financial statements and statistical tables listed in the table of contents are presented
for purposes of additional analysis and are not a required part of the basic financial
statements of the City. The combining and individual major and non -major fund financial
1 statements and schedules have been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, are fairly stated, in all material
respects in relation to the basic financial statements taken as a whole. The introductory
1 section and statistical tables have not been subjected to the auditing procedures applied in
the audit of the basic financial statements and, accordingly, we express no opinion on such
data.
1
l/saf -- www ✓W
1
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
1
March 1, 2006
1
1
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i
1
1
1
1
1
1
1
1
1
1
1
1
1 MANAGEMENT'S DISCUSSION
1 AND ANALYSIS
1
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*QESPEGT iF �N Tec '
R r
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CITY OF ALU'-'
CITY OF ALLEN, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(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
September 30, 2005. -
FINANCIAL HIGHLIGHTS
• The assets of the City exceeded its liabilities (net assets) at September 30, 2005
by $411,773,342. Of this amount, $43,022,499 may be used to meet the
government's ongoing obligations to citizens and creditors (unrestricted net
assets).
• The City's net assets increased by $48,372,850.
• The City's governmental funds reported combined ending fund balances of
$30,587,919 at September 30, 2005, a decrease of $20,460,937 from the prior
year. The decrease was due to the advancement and completion of many major
capital projects such as the new public library and civic auditorium, a senior citizen
center, a youth center, skate park and street and park improvements.
• Unreserved fund balance for the General Fund was $9,435,175 at year end or 28%
of total general fund expenditures for the reported fiscal year.
• The City's total non-current liabilities of $110,074,738 increased by $3,682,455.
• The City's total bonded debt increased by $3,636,749. During the reported fiscal
year the City issued $32,330,000 of General Obligation Refunding Bonds,
$765,000 and $4,735,000 of Combination Tax and Golf Course Revenue
Certificates of Obligations and $4,300,000 in Water and Sewer Revenue Bonds.
■ 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 Assets presents information on all of the City's assets and liabilities, with
the difference between the two reported as net assets. Over time, increases or decreases in
net assets may serve as a useful indicator of whether the financial position of the City is
improving or deteriorating. To assess the overall health of the City, other non-financial factors
should also be taken into consideration, such as changes in the City's property tax base and the
condition of the City's infrastructure.
' The Statement of Activities presents information showing how the City's net assets changed
during the fiscal year. All changes in net assets are reported when the underlying event giving
rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and
expenses are reported in this statement for some items that will only result in cash flows in
future fiscal periods (e.g. uncollected taxes and earned but unused compensated absences).
3
CITY OF ALLEN, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(UNAUDITED)
Both the Statement of Net Assets and the Statement of Activities are prepared utilizing the
accrual basis of accounting as opposed to the modified accrual basis used in prior reporting
models.
In the government -wide financial statements, pages 17 through 19, the City is divided into three
kinds of activities:
• Governmental activities - Most of the City's basic services are reported here,
including the police, fire, library, community development, parks and recreation,
municipal court, and general administration. Property and sales taxes, charges for
services, franchise fees, and state and federal grants finance most of these
activities.
• Business -type activities - The City's water, sewer, solid waste, drainage, and golf
course operations are reported here. These are functions intended to recover all
or a significant portion of their costs through user fees and charges.
• Component units - The City includes two separate legal entities in this report: the
Allen Economic Development Corporation and the Community Development
Corporation. 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-term 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, Facilities
Agreement Fund, General Capital Projects Fund, Street Improvements Fund, Park
Improvements Fund, Library 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.
CITY OF ALLEN, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(UNAUDITED)
The basic governmental fund financial statements can be found on pages 20 through 26 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 benefd governmental rather than business -type functions.
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, disposal services, and
golf course operations since they are considered to be major funds of the City. The Drainage
Fund is the only remaining enterprise fund, so it is being presented as a major fund even though
it does not meet the criteria of a major fund established in Governmental Accounting Standards
Board Statement No. 34. All internal service funds are combined into a single aggregated
presentation in the proprietary fund financial statements. Individual fund data for the internal
service funds is provided in the form of combining statements elsewhere in this report.
The basic proprietary fund financial statements can be found on pages 27 through 31 of this
report.
Notes to the Financial Statements - The notes provide additional information that is essential
to a full understanding of the data provided in the government -wide and fund financial
statements. The notes to the financial statements can be found on pages 35 through 64 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 found on pages 65 through 66 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.
Comparative schedules of capital assets used in the operation of governmental funds are found
on pages 117 through 120.
CITY OF ALLEN, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30.2005
(UNAUDITED)
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, over time net assets may serve as a useful indicator of the financial position of
a government. The assets of the City of Allen exceed the liabilities by $411,773,342 as of
September 30, 2005.
Net Asset.
Inanded In capital
assets, net of related
debt 296,]32.99] 258,362,043 70,510,150 60,]74331 367,249,145 319,138374
R.WhAed 1,273,809 228.047 082,063 1,501.898 862,043
unrestricted 28089318 335]],088 16,963,181 10.023]8] 43022499 43,601.05
Total Net Asset 3 324.075,880 291,939,]91 $ 0],69].3]8 ]1,450.]81 E 411,]]3,3/2 383,000,492
The largest portion of the City's net assets is its investment in capital assets: $461,514,404, (i.e.
land, buildings, infrastructure, vehicles, machinery, and equipment), less any related debt used
to acquire those assets that is still outstanding; see Table 1 above. The City uses these capital
assets to provide services to its citizens; consequently, they are not available for future
spending. Although the City reports its capital assets net of related debt, 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.
The restricted net asset amount of $1,501,696 represents resources that are subject to external
restrictions on how they may be used; the remaining balance of $43,022,499 may be used to
meet the government's ongoing obligations to citizens and creditors.
Analysis of the City's Operations - As of September 30, 2005, the City had an overall
increase in net assets for the government as a whole with an increase in the net assets of the
governmental activities and an increase in net assets for business -type activities.
Table 2, provides a summary of the City's operations for the year ended September 30, 2005.
Governmental activities increased the City's net assets by $32,136,233. Business -type
activities increased the City's net assets by $16,236,617.
6
Table 1
Ned Meade
B mess
Govenenternal
AWyl-
2095
229
2ON
3005
7999
Current and oPer assets
$ 40,972,058
86,204.257
$ 27,941180
17,505,707 3
]4913,038
83,800,054
Capital assets
377]5]010
325,629,OT7
83]5]384
74,532.203
461,514,404
400,181,280
Totalmset
424720088
391923,334
111,691), 174
92038000
538420242
483981334
Long-term liabdities
09,013,570
89,034,335
19,849,482
18,757,940
109,883.052
108.392,283
Other tatbOnes
10,739,534
103191286
4062314
3,819,291
14791048
14,168,559
Total Liabi110es
100,653,104
99,903,603
24001788
20,577,239
124854000
120,580,042
Net Asset.
Inanded In capital
assets, net of related
debt 296,]32.99] 258,362,043 70,510,150 60,]74331 367,249,145 319,138374
R.WhAed 1,273,809 228.047 082,063 1,501.898 862,043
unrestricted 28089318 335]],088 16,963,181 10.023]8] 43022499 43,601.05
Total Net Asset 3 324.075,880 291,939,]91 $ 0],69].3]8 ]1,450.]81 E 411,]]3,3/2 383,000,492
The largest portion of the City's net assets is its investment in capital assets: $461,514,404, (i.e.
land, buildings, infrastructure, vehicles, machinery, and equipment), less any related debt used
to acquire those assets that is still outstanding; see Table 1 above. The City uses these capital
assets to provide services to its citizens; consequently, they are not available for future
spending. Although the City reports its capital assets net of related debt, 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.
The restricted net asset amount of $1,501,696 represents resources that are subject to external
restrictions on how they may be used; the remaining balance of $43,022,499 may be used to
meet the government's ongoing obligations to citizens and creditors.
Analysis of the City's Operations - As of September 30, 2005, the City had an overall
increase in net assets for the government as a whole with an increase in the net assets of the
governmental activities and an increase in net assets for business -type activities.
Table 2, provides a summary of the City's operations for the year ended September 30, 2005.
Governmental activities increased the City's net assets by $32,136,233. Business -type
activities increased the City's net assets by $16,236,617.
6
CITY OF ALLEN, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(UNAUDITED)
Table 2
Changes in Not
Assets
Governmental
Activises
Business -Noe
Acbvaies
IQW
2005
2004
2445
2404
2045
2DG4
Revenues
Pmgram Revenues.
Chargee for services S
6.133.748
5,301,520 $
24,901,084
20,721,816 S
31034,813
28,023.336
Opereung glands and
.tnbutlpns
2,028,083
829.913
2,828.863
029,913
Capital grab and
contribWans
30,431,255
8016.085
7,912,082
2,139.123
46,944,117
11.155,208
General Revenuea-
Property taxss
27,414,742
25,157725
27,414.742
25,157.725
Sales tax
7,749,879
7,061,601
7,749,679
7,064.801
Franchise taxes
4.021,020
3,880.556
4.021.020
3,688556
Hotel motel taxes
346,753
282,392
348753
262,392
Other taxes
1784,508
1,567,378
1]84,506
1,567,370
Interest earnings
1,071,768
1,271,209
206,415
172,964
1,270,183
1,4",173
Miscellaneous
1069.285
1,176,479
1089285
1.176.473
Total Revenues
90.831,620
56307.052
3362054/
23.033.903
123,851,981
78.341,755
Expenses:
General govem cent
6,354753
5,004,045
8,354,753
5,084045
Public safety
16,938,526
15,062.018
16,930,520
15.082,018
Publicwolke
11,284.098
10,709,180
11,261,090
10,709,180
Culture and
recreatlon
11,004,820
10,805,972
11,004,020
10,805,972
Community
oW.1opment
1,701,816
1,527,010
1,761,918
1,527,010
Grano Adminlsma6on
$4,661
34801
Interest on long -tern,
debt
4,388.211
4,327,605
4,368,211
4,327,605
Water and sewer
15.915,201
18 W.999
15,915,281
16,097.999
Erwimnmental waste
services
3.470.83
3,370.034
3,470,383
3.370,034
Drainage
730.530
643,388
730,530
643,388
Gdf.O..
1,810,613
1.610.613
Total Expenses
53,752,324
47650.691
21728787
20.112.221
75478111
67,862912
Increase In net assets
before oromfan
37,079,290
7,757,181
11,293,554
2,921,882
48,372,850
10,678,843
Tmnafaa
(4943063)
5691.406
4949063
(5,091,468)
Increase in net ease%
32,136,233
13,440,027
16,236,817
(2,709784)
48,372,050
10,870,843
NO assets, beginning of
year
291.939.731
278,491,104
71480701
74.230.545
363,400,492
352721.649
Net assets. end of year 8
324.75,984
291.939,"1 a
87,697.378
71,468781 $
411.7!3.342
383,400,492
CITY OF ALLEN, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(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 financing requirements. In particular, unreserved
fund balance may serve as a useful measure of a government's net resources available for
spending at the end of the fiscal year.
As of the end of the current fiscal year, the City's governmental funds reported combined fund
balances of $30,587,919. Approximately 75% or $22,942,385 constitutes unreserved fund
balances, which are available for spending at the government's discretion. The remaining fund
balances are reserved to indicate that they are not available for new spending because the
funds have already been committed to pay for encumbrances ($6,125,407) and debt service
($1,521,331) and to provide for prepaid items ($7,796). The following charts show the
governmental funds' sources of revenue and expenditure by percentage.
Governmental Funds
Sources of Revenue
es% ❑7%
■13% ■9%
■7%
■ 13%
■45%
e Net bond proceeds
■ Franchise fees
■ Sales taxes
Y property taxes i
■ Services. fees 8 fines
i O Intergovernmental&
Grants
O GIM, Interest, 8 fv5sc.
Governmental Funds n General govern,nent
Expenditures 0Public safety
❑13% 010% opublic works
1*,
■Culture 8 recreation
11121%❑ Communitydevebprnent
m4%0 Capital outlay
0 31■ Net transfers out 8 Other
3%
o2% ❑ Debt service
8
' CITY OF ALLEN, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
' (UNAUDITED)
General Fund and Budgetary Highlights - The General Fund is the chief operating fund of the
' City. 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 year-end estimate; only the cost of maintaining
' the current base operation is revised as needed. As is customary, during FY2004-05, the City
Council amended the budget for the General Fund one time.
' Small adjustments made during FY2004-05, increased the original revenue budget by $120,413
and reduced the expenditure budget by $346,270. At the end of FY2005 revenues exceeded
the revised budget by $601,327 due to larger receipts from franchise taxes and court fines.
' Hurricane support caused the public safety expenditures to exceed the revised budget;
however, all other areas reduced costs resulting in a $322,029 positive variance from the
revised expenditure budget. The net result of positive revenues and expenditure budget
variances allowed the General Fund to transfer $400,119 to the Golf Course Fund for first year
' operating costs being more than expected and adding to the Replacement Fund for future
technology needs.
' The resulting General Fund balance increased $1,008,599 which was $541,916 more than
budgeted and increased the funds operational expenditure reserve from the budgeted 75 days
to 95.7 days, well above the City's financial policy of 60 days. At September 30, 2005, the
' General Fund unreserved fund balance was $9,427,379 while total fund balance reached
$9,435,175.
' Debt Service Fund - The Debt Service Fund has a fund balance of $1,512,331, all of which is
reserved for the payment of debt service. The net decrease in fund balance during the current
fiscal year was $28,926 due to refunding costs.
' Special Revenue Fund - The Facilities Agreement Fund records the use of funds received from
builders and developers on specific facility agreements. In this fiscal year expenditures were
slightly less than revenue resulting in a $259,839 net increase in fund balance.
General Capital Projects Fund - The General Capital Projects Fund provides information on
cash financed capital projects with multi-year budgets. During this fiscal year, $1.6 million was
' received from the county for street improvements and $580,652 was transferred in from other
funds to cash finance capital expenditures. Capital project expenditures were $6.2 million and
$6.9 million was transferred to the Water and Sewer fund for cash financing of water and sewer
' projects. The net decrease in fund balance during the current fiscal year was $9,820,009.
Street Improvements Park Improvements Library Fund and GO Bond Funds - These funds
t record the use of bond funds for capital projects. Expenditures in FY2005 totaled $2,963,544
for various street construction and improvement projects, $2,277,540 for park construction and
improvement projects, $1,908,641 towards finishing the new municipal library and civic
' auditorium, and $3,031,702 in expenditures for construction of the new senior center and design
and engineering for the new performing arts center. No additional bonds were sold in FY2005.
Other Governmental Funds - Special revenue funds that are legally restricted to expenditures
for specific purposes and capital project funds that do not qualify as major funds are aggregated
here. The three largest funds in this group are the Grants and Special Revenue Fund, Parks
and Recreation Enterprise Fund and Certificate of Obligation Fund. The Grants and Special
' 9
CITY OF ALLEN, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(UNAUDITED)
Revenue fund recorded the receipt and expenditure of state and federal awards with the largest
being $248,260 -Community Development Block Grant, $641,502 -Homeland Security, and
$468,575 -Texas Parks and Wildlife. The Parks and Recreation Special Revenue Fund, records
the City's recreation services. Membership and user fees are insufficient to cover all expenses;
therefore, the General Fund transferred $1,195,300 to supplement citizens' recreation activities.
In addition, the Certificate of Obligation Fund was created to account for the $5.5 million
Certificates of Obligation issued in 2005 for the acquisition of Chase Oaks Golf Course, related
facilities, and improvements to the course.
Proprietary Funds - The City's proprietary funds provide the same type of information found in
the government -wide financial statements, but in more detail.
Unrestricted net assets in the Water and Sewer Fund, the Solid Waste Fund, Drainage Fund,
and Golf Course Fund at the end of the current fiscal year amounted to $14,973,530, $728,995,
$739,229, and $12,345, respectively. All four funds had an increase in net assets totaling
$16,019,811, a result of transfers from other funds, capital contributions and the issuance of
$4.3 million of water and sewer revenue bonds. Water and sewer rates were increased 6%, the
third year of a rate plan study. The increases were necessary as North Texas Municipal Water
District proceeds with capital expansion plans and the City implements conservation water
rates. The Water and Sewer fund contributed $1,385,500 towards the Custer Road Pump
Station, waterline replacements and other various water and sewer capital projects.
This was the first year of operations for the Golf Course Fund. Repairs and maintenance were
needed to transition from a private club to a municipal golf course. This was accomplished with
$400,119 transferred in from the General Fund and $10,000 from the Parks and Recreation
Enterprise Fund.
The following two charts show the proprietary funds' sources of revenue and expenditure by
percentage.
Proprietary Funds -
-
swatefeales,
Revenue by Activity
■Sewer charges
■ 18%
■ SerNce fees, Interest &
Misc.
D Solid waste
D13%■33%.
■ Drainage
*[33%
E3Net transfers in
® 2■
Capital contributions
D❑
Development fees
■ 16%
t0
CITY OF ALLEN, TEXAS
MANAGEMENTS DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(UNAUDITED)
Proprietary Funds
■ Personal services
Expenses by Activity
Table 3
■ Contractual services
■ So
[ED 17% 018%
Capital Assets at Year-end Net of
❑ Supplies & Maintenance
CI 3%
0 Depreciation &
Govammenlal Activities
Amortization
Activities
■ Interest E)Vense & Other
■ 57%
CAPITAL ASSETS
The City's investment in capital assets for its governmental and business -type activities as of
September 30, 2005, amounts to $461,514,404 (net of accumulated depreciation.) This
investment in capital assets includes land and their 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. The total increase in investment
in capital assets for the current fiscal year was 13%, out of which 85% was governmental and.
15% was business -type activities.
'
Table 3
Capital Assets at Year-end Net of
Accumulated Depreciation
Govammenlal Activities
Business -tylia
Activities
Total
t
24QS
SD-
299
2004
9M
M
Land $
84.474,787
61,662,118 $
874,042
822,643 s
85,348,829
62,484,761
'
Buildings
31,713,619
32,777,619
31,713,619
32,777,619
Tourers, tanks
and pump stations
75,566,433
71.255246
75,566,433
71,255,246
'
OMer Improvements
215,417,306
201,813,646
215,417,306
201,813,646
Furniture and fixtures
1,134,900
477,232
2,457
4,094
1,137,357
481,326
Vehicles
3,314,159
2,539,765
114,915
209,712
3,429,074
2,749,477
'
Machinery and equipment
1,439,758
824,409
1,749,476
1,405,394
3,189,234
2,229,803
Conslmction in progress
40,282481
25,534,288
5.450,071
835,114
45,712,552
28369,402
'
Total 4
377,757,010
325,629,077 9
83,757,394
74,532,203 s
461,514404
400,161,280
11
CITY OF ALLEN, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(UNAUDITED)
Governmental -type capital improvement projects and developer contributions during the current
fiscal year included the following:
Projects
• Developers contributed right of way and park land
$ 20,156,660
• Goff Course purchase and improvements
5,703,456
• Main Library
3,203,262
• Senior Center
3,086,617
• Main Street Extension, Allen Heights to FM2551
2,828,283
• Allen Station Park, Phase 2
2,019,599
• Allen Drive
1,090,284
• Bethany Drive East Expansion
922,286
• Ridgemont Drive
751,761
• Twin Creeks Drainage
610,207
• St. Mary Drive Phase 2
551,674
Business -type capital improvement projects and developer contributions during the current
fiscal year include the following:
Proiects
• Developers contributed water mains and sewer lines $ 6,823,517
• Prestige Circle water tower 2,655,151
• East Main water line 1,536,991
Additional information on the City's capital assets can be found in Note 4 on pages 47-51
of this report.
DEBT ADMINISTRATION
At September 30, 2005, the City had long -tens debt totaling $118,077,734 shown in Table 4.
General Obligation Bonds totaling $81,430,670 comprises debt backed by the full faith and
credit of the government, Certificates of Obligation totaling $5,500,000 comprises of debt
backed by taxes and revenue generated from the golf course facility, $19,735,000 represents
bonds secured solely by water and sewer revenue, and $8,055,000 represents bonds secured
by 4B sales tax revenue. The other long-term debt relates to capital leases, compensating
absences, interest, discounts and leases payable.
Governmental activities' total debt increased by .25%, business -type activities' debt increased
by 16.88% and component unit's debt decreased by 5.21%. The City had authorized but un-
issued direct general obligation bonds totaling $20,285,000 at fiscal year end. The City's
indebtedness increased $3,210,451 during the fiscal year. The increase was primarily due to
the following debt issued:
• $32,330,000 General Obligation Refunding Bonds which were used to advance refund
outstanding bonds resulting in an economic gain of $1,124,880.
12
CITY OF ALLEN, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(UNAUDITED)
6 $5,500,000 of Combination Tax & Revenue Golf Course Certificate of Obligations which
were used to acquire the Chase Oaks Golf Course facility, related property, and make
improvements to the course.
at $4,300,000 Water and Sewer Revenue Bonds to be used to improve and extend the
water and sewer system.
Other Lone Tom Debt
C.....attoo
T.bt.4
AOeorcse
1.617.0,9
,585.m
281,55] fal
oubammng O.M at
1650435
Copilot Lone
amid..- Man Long To. boat
Payable
13],0]5
91
Y10,6.6
Gli.manal MEuili
Btln.Anno Acl Component
Unix
Total
1a691B1 (91,553)
7�i
70Q9
20Ii 7�4 7005
7ffl5
7a>fi
iDpS
Gi BmME Not
Inbrtat
1,176.773
2,1",a96
1,176773
Genera
Obligation
Bond. 5
Bt/30.670.
85,833,931
5
01
85,833.921
Coati of
Design n
Bond.
5.500.003
550],000
i nut
Bonds Payable
19,735.003 15,775.000
19.]35.0)0
18,]]5000
Solea Tat
aen no
Omda
8,MOOO
0A75,=
6.0550m
B.a75.000
Total Gmea
W1,10 Oebt
8ogol.U0
85800921
19.735.000 15.]]5.000 8.055.0.tl
6475.00)
114,720870
1110&1921
Other Lone Tom Debt
C.....attoo
AOeorcse
1.617.0,9
,585.m
281,55] fal
1,595.90
1650435
Copilot Lone
Payable
13],0]5
91
Y10,6.6
375.721
90,3N
14.1- n9
(1,515,351)
1a691B1 (91,553)
(1802.2691
(91.51
Mt2ad
Inbrtat
1,176.773
2,1",a96
1,176773
2.144.698
proon.
vrem,umea
olamuna 155]354 (1417) (10,652) 1.56993]
"I Omer
Lure Tom
Debt 2982900 3890414 426168 170521 3409068 ]]93.914
Total S 09913,5]0 89,834,335 20,161,106 1 755].94f1 8.055,003 0,475,CN E 110,129.]38 114,0]>,A35
The City's General Obligation Bond, Community Development Corporation's Sales Tax Bond
and Water and Sewer Revenue Bond ratings are listed in Table 5 below. The City's bonds are
insured thus holding credit ratings from both Moody's Investors Service and Standard and
Poor's as shown below. Additional information on the City's long-term debt can be found in
Note 5.
' General Obligation Bonds
Water & Sewer Revenue Bonds
CDC Sales Tax Revenue Bonds
[l
Table 5
Bond Ratings
Moody's Investors
Service Standard & Poor's
Aa3 AA -
A2 AA -
A3
13
CITY OF ALLEN, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(UNAUDITED)
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
Allen's current population is 71,037 and it is expected to surpass 97,900 by the year 2011.
National employment statistics show the region as leading the country in employment growth,
ahead of much larger metropolitan areas. With its proactive approach to economic
development, Allen has earned a reputation as a premier location for high-tech manufacturing,
assembly/distribution facilities and corporate headquarters, retail and services. The reasonable
cost of living, a highly rated school district and home prices below the national average continue
to make Allen an attractive area for businesses to locate. The 2005-2006 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.
At the end of fiscal year 2004-2005 the unreserved General Fund balance increased by
$1,008,599 which was $541,916 more than budgeted. This increased the operational
expenditures in reserve from the budgeted 75 days to 95.7 days, which is well above the City's
financial policy of 60 days. This will have a positive effect on the 2005-2006 budget estimate of
approximately 75 days.
Assessed property values have increased 50% over the past five years, equaling $5.16 billion
for 2005-2006 which equates to an overall increase of approximately $377 million (7.8%) from
the preceding year. This has afforded the opportunity for the City to reduce the property tax rate
for the thirteenth straight year from $0.560 to $0.559 per $100 valuation. Of the total tax rate,
$0.37624 is dedicated to operations and maintenance in the General Fund, and $0.18276 is
dedicated to general obligation debt service.
Due to an improved economic outlook from increased commercial development, Allen sales tax
receipts are projected to increase 8.5%. As of January 2006, sales tax revenue is 18.61%
above budget. Finance staff will monitor the monthly sales tax revenues and make adjustments
as needed.
The 2005-2006 General Fund expenditure budget reflects a 10.9% increase from the original
2004-2005 budget. Beginning with the purchase of Chase Oaks Golf Course in October 2004,
followed by the completion of the Allen Civic Plaza, the groundbreaking of the Allen Senior
Center, the grand opening of the Allen Public Library and Civic Auditorium, and the grand
opening of the Edge @ Allen Station Park, the City continues to add to the community
landscape by providing high quality public use facilities for the residents of Allen. While the City
is excited to provide these facilities, the 2005-2006 budget demonstrates the significant
commitment to operate and maintain each facility and the increasing staffing levels they require.
City wide staffing levels will increase by 34.68 full-time equivalent positions, 22.68 from the
General Fund and 14 from revenue supported funds.
As a result of salary surveys the 2005-2006 fiscal year budget provides for an 8% increase for
public safety employees and 1% for non-public safety employees. In addition, the budget
includes funds for a maximum 6% merit increase for public safety employees and 4% for non-
public safety employees based on performance evaluations. Total funds budgeted for salary
increases are approximately $477,520.
14
CITY OF ALLEN, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
' (UNAUDITED)
In 2005-2006 the City plans to issue $1,595,000 of the $3,571,500 remaining un -issued 1999
' general obligation bonds. The City will continue to take advantage of lower interest rates by
refunding bonds in the spring of 2006. Also, Allen residents have been asked to participate in a
planning process to determine the future capital improvement projects for the City of Allen as
part of the 2006-2012 Bond Program.
Annual 6% increases in the water and sewer rates were implemented in 2004-2005 and again in
2005-2006. Due to recent drought conditions the City has implemented a water conservation
policy. The rate increases are necessary as North Texas Municipal Water District proceeds with
capital expansion plans and the City implements conservation water rates. The City cash
financed CIP water and sewer projects of approximately $1,385,500 in 2004-2005 and will
contribute $2.5 million in 2005-2006 for the purchase of land to be used for a future service
center. Cash financing of water and sewer projects has reduced working capital; however, the
City will meet bond coverage requirements necessary to maintain working capital minimum of
1.2 times the annual debt service obligations. A current rate plan study is underway and could
impact the 2006-2007 budget.
The Solid Waste fund will completely contract out all litter collection. Proposed to start in May
2006, this fully outsourced service is predicated on a one dollar per month fee increase in the
Solid Waste Fund.
The Parks and Recreation Enterprise Fund will now record only revenue generating activities
and related costs. Operation and maintenance expenditures for facilities will now be budgeted
' in the General Fund. In other words, it will now require all revenue generating programs to be
100% self sustaining.
' The City finished the first year of operating the Chase Oaks Golf Course. Over $1 million was
spent renovating the course to improve the playability of the course which should lead to more
rounds being played and additional revenue for golf operations.
' Since healthcare costs continue to rise, the 2005-2006 budget includes a 14% budget increase
to cover projected costs for health insurance claims, prescription medications, dental and vision
claims, claims handling administration, immunizations and physicals for our employees.
' Premium costs for employees will increase 11.8% with the City making up the difference with an
additional 12.8% increase.
Request for Information
The financial report is designed to provide our citizens, customers, investors, and creditors with
a general overview of the City's finances. If you have questions about this report or need any
additional information, contact the Finance Department at 305 Century Parkway, Allen, Texas,
75013, or call (214)509-4626.
[l
11 15
PESp ECT * I NTEG
circ OF
BASIC FINANCIAL STATEMENTS
16
ae .FGT * IN �.tNC
• Rei^.
w
A
•
m
x
n
m
Clrr OF P�•1•�•-
CITY OF ALLEN, TEXAS EXHIBIT 1
STATEMENT OF NET ASSETS
AS OF SEPTEMBER 30, 2005
The Notes to Financial Statements
are an integral part of this statement.
17
PRIMARY GOVERNMENT
GOVERNMENTAL
BUSINESS -TYPE
COMPONENT
ACTIVITIES
ACTIVITIES
TOTAL
UNITS
ASSETS
Cash and cash equivalents
$ 13,097,435
$
8,588,150
$
21,685,585
$
3,880,715
Investments
31,223,434
11,820,693
43,044,127
6,278,242
Receivables (net of allowance for uncollectibles)
2,808,101
4,703,676
7,511,777
1,391,400
Internal balances
(509,082)
509,082
Prepaid items and other assets
7,796
11,050
18,646
Inventories
74,674
74,674
Restricted cash and cash equivalents
2,063,465
2,063,465
Capital asset:
Non -depreciable
124,737,268
6,324,113
131,061,381
4,813,964
Depreciable(net of depreciation)
253,019,742
77,433,281
330,453,023
1,982,317
Deferred charges
344,374
170,990
515,364
TOTALASSETS
$ 424,729,068
$
111,699,174
$
536,428,242
$
18,346,638
LIABILITIES
Accounts payable
$ 2,969,929
$
1,943,863
$
4,913,792
$
389,079
Accrued liabilities
2,297,438
396,115
2,693,553
Accrued interest payable
390,480
290,418
680,898
33,038
Customer deposits
1,210,232
1,210,232
Deferred revenue
4,183,254
4,183,254
Retainage payable
898,433
898,433
64,611
Non-current liabilities:
Due within one year
6,460,250
1,756,686
8,216,936
445,000
Due in more than one year
83,453,320
18,404,482
101,857,802
7,610,000
TOTAL LIABILITIES
$ 100,653,104
24,001,796
124,654,900
8,541,728
NET ASSETS
Invested in capital assets(net of related debt)
296,732,997
70,516,150
367,249,147
(1,258,719)
Restricted for:
Debt service
1,273,649
228,047
1,501,696
Unrestricted
26,069,318
16,953,181
43,022,499
11,063,629
TOTAL NET ASSETS
$ 324,075,964
$
87,697,378
$
411,773,342
$
9,804,910
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, 2005
The Notes to Financial Statements
are an integral pad of this statement
General revenues'.
Taxes:
Property taxes, levied for general purposes
Sales taxes
Franchise taxes
Hotel motel taxes
Other taxes
Investment earnings
Miscellaneous
Transfers
Total general revenues and transfers
CHANGE IN NET ASSETS
NET ASSETS, beginning of year
NET ASSETS, end of year
18
Program Revenues
Charges for
Operating Grants
Capital Grants
Expenses
Serwces
and Contributions
and Contributions
Functions/Program Activities
PRIMARY GOVERNMENT:
Governmental Activities:
General government
$ 8,354,753 $
358,546
$ $
Public safety
16,938,526
731,979
937,384
Publicworks
11,284,098
300,881
38,431,255
Culture and recreation
11,004,820
2,294,878
868,970
Community development
1,781,916
2,447,465
1,002,509
Interest on long -tens debt
4,388,211
Total governmental activities
53,752,324
6,133,749
2,828,853
38,431,255
Business -type Activities:
Water and sewer
15,915,281
19,428,212
7,912,862
Environmental waste services
3,470,363
3,330,542
Drainage
730,530
937,774
Golf Course
1,610,613
1.204.536
Total business -type activities
21,726,787
24,901,064
7,912,862
TOTAL PRIMARY GOVERNMENT
$ 75.479.111 $
31.034.813
$ 2.828.863 $
46.344.117
COMPONENT UNITS:
Allen Economic Development Corporation
$ 3,825,835
Allen Community Development Corporation
2.731,119
TOTAL COMPONENT UNITS
$ 8.556.954 $
$ $
The Notes to Financial Statements
are an integral pad of this statement
General revenues'.
Taxes:
Property taxes, levied for general purposes
Sales taxes
Franchise taxes
Hotel motel taxes
Other taxes
Investment earnings
Miscellaneous
Transfers
Total general revenues and transfers
CHANGE IN NET ASSETS
NET ASSETS, beginning of year
NET ASSETS, end of year
18
EXHIBIT 2
Net (Expense) Revenue and
Changes in Net Assets
Primary Government
Governmental Business - Type COMPONENT
Ac8vi8es AchviBes TOTAL UNITS
$ (7,996,207) $
$
(7.996,207) $
(15,269,163)
7,749,679
(15,269,163)
27,448,038
7,749,056
27,448,038
(7,820,972)
4,021,020
(7,820,972)
1,668,058
1,668,058
(4,388,211)
1,764,506
(4,388,211)
1,764,506
(6,358,457)
1,071,768
(6,358,457)
1,278,183
140,058
1,069,285
11,425,793
11,425,793
919,769
(139,821)
(139,821)
207,244
207,244
5,149,478
(406,077)
(406,077)
32,136,233
11,087,139
11,087,139
$ (6.358.4571 $11.087.139
$
4.728682 $
363,400,492
7,552,981
$ $
$
$ (3,825,835)
9.804.910
(2,731,119)
8 $
$
$ (6.556.9541
$ 27,414,742 $
$
27,414,742 $
7,749,679
7,749,679
7,749,056
4,021,020
4,021,020
346,753
346,753
1,764,506
1,764,506
1,071,768
206,415
1,278,183
140,058
1,069,285
1,069,285
919,769
(4,943,063)
4,943,063
38.494,690
5,149,478
43,644,168
8,808,883
32,136,233
16,236,617
48,372,850
2,251,929
291,939.731
71,460,761
363,400,492
7,552,981
$ 324.075.964 $
87.697.378 $
411.773.342 $
9.804.910
19
CITY OF ALLEN, TEXAS
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2005
The Notes to Finanaal Statements
are an integral part of this statement
20
GENERAL
DEBT
FACILITIES
CAPITAL
GENERAL
SERVICE
AGREEMENT
PROJECTS
ASSETS
Cash and cash equivalents
$
903,616 $
1,510,128 $
1,335,754
$
1,844,932
Investments
8,877,403
5,454,581
7,375,601
Receivables, net of allmanres for
uncolledibles:
Ad valorem taxes
262,202
151,798
Sales taxes
1,369,666
Accounts receivable
Accrued interest
27,097
16,649
22,513
Other
529,976
2,203
Special assessments
187,557
Due from other funds
155,000
Prepaid items
7,796
TOTALASSETS
$
11,977,756 $
1,664,129 $
6,806984
$
9,585,603
LIABILITIES AND FUND BALANCES
UABILITIES
Accounts payable
$
1,083,165 $
$
127,161
$
935,437
Accrued liabilities
1,097,214
589,150
Retainage payable
30,532
237,864
Due to other funds
100,000
Defemad revenue
262,202
151,798
4,169,347
TOTAL LIABILITIES
2,642,581
151,798
4,327,040
1,762,451
FUND BALANCES
Reserved for.
Enwmbrances
460,759
4,212,487
Prepaid hems
7,796
Debt service
1,512,331
Unreserved, reported in:
General fund
9,427,379
Facilities agreement
2,019,185
Street improvements
Parc improvements
Library fund
General obligation bond fund
Spacial revenue funds
Capital projects funds
3,610.665
TOTAL FUND BALANCES
9,435,175
1,512,331
2,479,944
7,823,152
TOTAL LIABILITIES AND FUND BALANCES
$
11,977,756 $
1,664,129 $
6,806,984
$
9,585,603
The Notes to Finanaal Statements
are an integral part of this statement
20
EXHIBIT 3
$ 16,913 $ 58,283 $ 8,577 $ 523,291 $ 97,125 $ 2,849,952
83,789 1,770,153
119,598 157,588 28,881 286.208 37,762 898,433
65,000 165,000
139_07 4,597,254
136,_11
215,871
37,458
GENERAL
OTHER
TOTAL
STREET
PARK
LIBRARY
OBLIGATION
GOVERNMENTAL
GOVERNMENTAL
IMPROVEMENTS
IMPROVEMENTS
FUND
BOND
FUNDS
FUNDS
2,377,302
2,242,465
$ 399,278 $
847,119 $
102,334 $
1,016,447 $
1,750,442 $
9,710,050
844,658
2,080,887
2,710,768
933,053
28,276,951
64,876 2,925,990
2,502,052
30,687,919
414,000
E 1,262,423 E
2.934,358 $
102,334 $ 3,735,489 $
2,799,635 $
1,369,666
15,909
116,140
132,049
2,578
6,352
8,274
$3,463
532,179
187,557
155,000
7,796
$ 1,262,423 $
2,934,358 $
102,334 $
3,735,469 $
2,799,635 $
40,868,711
$ 16,913 $ 58,283 $ 8,577 $ 523,291 $ 97,125 $ 2,849,952
83,789 1,770,153
119,598 157,588 28,881 286.208 37,762 898,433
65,000 165,000
139_07 4,597,254
136,_11
215,871
37,458
809,499
297,583
10,280,792
2,454,972
2,454,972
396,744
263,515
20,745
548,688
222,469
6,125,407
7,796
1.512.331
9,427,379
2,019,185
729,168
729,168
2,454,972
2,454,972
44,131
",131
2,3T,302
2,377,302
2,242,465
2,242,465
37,118
3,64] 783
1,125,912
2,718,487
64,876 2,925,990
2,502,052
30,687,919
E 1,262,423 E
2.934,358 $
102,334 $ 3,735,489 $
2,799,635 $
40,868,711
21
CITY OF ALLEN, TEXAS
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET ASSETS
SEPTEMBER 30, 2005
EXHIBIT 4
Total fund balances - governmental funds
$ 30,587,919
Amounts reported for governmental activities in the statement of net assets
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.
377,757,010
Costs associated with the issuance of governmental long-term debt are expensed
when incurred in the fund statements and capitalized and amortized over the
life of the debt in the government -wide financial statements.
344,374
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.
(390,480)
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 are net of the amount allocated
to business -type activities ($499,082) and capital assets ($1,824,547).
5,276,711
Revenues earned but not available within sixty days of the year end are not
recognized as revenue on the fund financial statements.
414,000
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.
(89,913,570)
Net assets of governmental activities
$ 324,075,964
The Notes to the Basic Financial Statements
are an integral part of this statement. 22
. * of SV ECT * I NTEG
RST.
n
A
m
x
G
T
CITY OF
CITY OF ALLEN, TEXAS
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
FOR THE YEAR ENDED SEPTEMBER 30 200'_
GENERAL
DEBT
FACILITIES
CAPITAL
GENERAL
SERVICE
AGREEMENT
PROJECTS
REVENUES
Ad valorem taxes, penalties and interest $
17,473,438 $
9,841,387 $
$
Franchise taxes
3,978,385
Municipal sales tax
7,749,679
Licenses, permits and fees
1,402,565
795,698
Charges for services
1,386,248
Court fines
1,669,687
76,790
1,002,509
23,326
Gifts and wntnbutions
Hotel / motel fees
Recreation fees
175,000
1,653,715
Intergovernmental
180,172
138,100
84,839
224,377
Investment earnings
679,165
251.075
Miscellaneous
Total revenues
34596,129
9979.487
1262,348
2948.391
EXPENDITURES
Current
General government
6,785,161
229,683
Public safety
16,190,179
Public works
2,926,473
Culture and recreation
6,244,521
Community development
1,693,019
1,002,509
6,247,141
Capital outlay
Debt service'.
4,563,251
Principal retirement
Interest and fiscal charges
5564,814
Total expenditures
33,839,353
10128.065
1002,509
6476,824
Excess (deficiency) of revenues
over (under) expenditures
756,776
(148,578)
259.839
(3.528,433)
OTHER FINANCING SOURCES (USES)
Proceeds from sale of refunding bonds
32,330,000
Premium on issuance of debt
1,567,354
Proceeds from sale of bonds
Proceeds from cepital lease obligations
140,663
Transfers from other funds
2,266,104
580,652
Payment to refund bond escrow agent
(33,777,702)
Transfers to other funds
(2,155,144)
(6,872,228)
Total other financing sources(uses)
251,823
119,652
(8291576)
NET CHANGE IN FUND BALANCES
1,008,599
(28,926)
259,839
(9,820,009)
FUND BALANCES, BEGINNING OF YEAR
8.426.576
1,541,257
2,220,105
17 643161
FUND BALANCES, END OF YEAR $
9,435,175
$ 1,512.331
$ 2.479.944
$ 7,823,152
The Notes to Financial Statements
are an integral part of this statement.
24
EXHIBIT 5
U
25
STREET
PARK
LIBRARY
GENERAL
OBLIGATION
OTHER
GOVERNMENTAL
TOTAL
GOVERNMENTAL
IMPROVEMENTS
IMPROVEMENTS
FUND
BOND
FUNDS
FUNDS
$ $
$
$
$ $
42,635
27,314,825
4,021,020
7,749,679
215,430
1,617,995
94,819
2,182,146
1,764,506
73,087
1,175,712
346,753
346,753
1,931,423
1,931,423
1,676,477
3,505,192
65,833
72,220
27,349
106,536
76,035
975,461
60
446,620
1,376 920
65,833
72,280
27,349
106,536
4,903,279
53,961,632
540,369
196,837
7,752,050
683,975
16,874,154
14,820
56,386
2,997,679
13,201
3,920,747
10,178,469
144,960
1,837,979
'
2,963,544
2,277,540
1,908,641
3,031,702
7,80.491
25,231,568
4,563,251
5,564,814
2,978,364
2,290,741
1,908,641
3,572,071
12,803396
74,999,964
(2,912,531)
(2,218,461)
(1,881,292)
(3,465,535)
(7,900,117)
(21,038,332)
32,330,000
1,567,354
5,500,000
5,500,000
140,863
1,413,742
4,260,498
'
(33,777,702)
(416,246)
(9,443,618)
6,497496
577,395
(2,912,531)
(2,218,461)
(1,881,292)
(3,465,535)
(1,402,621)
(20,460,937)
4,038,443
4,936,948
1,946,168
6,391,525
3,904673
51,048,856
$ 1,125,912 $
2,718,487
$ 64,876
2,925,990
$ 2,502,052 $
30.587.919
U
25
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, 2005
EXHIBITS
Net change in fund balances -total governmental funds $
(20,460,937)
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 anent period
27,430,320
Governmental funds do not recognize assets contributed by developers However, in the
statement of activities the fair market value of those assets is recognized as revenue,
then allocated over their estimated useful lives and reported as depreciation expense.
36,754,214 .
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 govemmental funds
(12,767,572)
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
(88,408)
The proceeds from issuance of long-term debt (e.g. bonds) provides current financial
resources to governmental funds ($37,830,00(1), while the repayment of the principal of
long-term debt consumes the current financial resources of governmental funds
($38,525,075). Neither transaction, however, has any effect on net assets.
605,075
Current year proceeds from capital leases are other financing sources in the fund
financial statements. However, these amounts are reported as increases in the
liabilities within the government -wide financial statements.
(140,863)
Governmental funds report the effect of issuance costs, premiums, discounts, and similar
items when debt is first issued. However, these amounts are deferred and amortized
in the government -wide financial statements.
(1,400,336)
Current year changes in long -tens liability for compensated absences do not require
the use of current financial resources, therefore, are not reported as expenditures
in governmental funds.
(51,667)
Current year changes in accrued interest payable do not require the use of current
financial resources; therefore, are not reported as expenditures in governmental funds.
41,660
Internal service funds are used by management to charge the costs of certain activities,
such as insurance and Peet management, to individual funds The net operating and
non-operating income and transfers of the internal service funds is reported with
governmental activities net of amounts allocated to business -type activities.
1,146,905
Current year accretion on capital appreciation bonds is not refiected in the fund financial
statements, but is shown as an increase in the accreted interest on the government -wide
financial statements. Payments of accreted interest on capital appreciation bonds are
expenditures in the fund financial statements, but are shown as reductions in long -tens
debt in the government -wide financial statements
967,925
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
99,917
Change in Net Assets of Governmental activities $
32,136,233
The Notes to the Basic Financial Statements
are an integral part of this statement
26
CRY OF ALLEN, TEXAS
EXHIBIT 7
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30,2005
BUSINESS-TYPE ACTIVITIES
ENTERPRISE FUNDS
GOVERNMENTAL
ACTIVITIES
WATER AND
SOLID
GOLF
INTERNA-SERVICE
SEVER
WASTE
DRAINAGE
COURSE
TOTAL
FUNDS
ASSETS
CURRENT ASSETS
Cash and ash xluasieMa
g 7.007.281 $
751,526It
730.016 S
98,287 S
8,588,150
$ 3,387,395
InwMmanb
f18W,8B3
11.820,093
2,816,483
ReaiwWas, ml of alloxans W unmlleaiwa
A¢atda
4.287,336
181.338
40.485
15,686
4.501.854
WIN
A ed iMercA
35,092
35,062
0,%4
Met160,]6
182,]10
Cu. huM
um other ts
10,000
10,000
In a ones
74,674
74,674
Plepab Berm
11.05)
11,050
Rawkwiashalpashe9urvabMe
2.083.465
2.063.485
Total wmrs aaab
25269,541
1.075,602
770.532
fall
27,271708
8,423,055
CAPITAL ASSETS
Land
874.042
874,042
Other im rwnb
495,132
496,132
Towel, Lanka, and Pump atalions
105,782.186
105,782,15)
Vshkbe
]51,8]6
44.448
1W.W7
956963
2,900,822
Matlhineryandwuig l
2,104,071
9.019
373,730
296,790
2.784.414
475,737
Furniture aM !puree
8,187
8,187
construction'n progress
5.450.071
5,45)071
Total aPBal assets
114,850435
511287
1,05),500
298,790
116.331,995
3,376.3%
Less acwmulated do,rwation
132121]5)
(30,428)
(355.9(!)
all
02.574601)
(1,551.812)
Capital asset. net 0 a=MUMW depreciation
6.820.683
23638
674,530
25),313
83,]5],394
1824.547
DEFERREDCIWRGES
Bad Lunen« was. nst of amott".
170,990
1M.990
TOTAL ASSETS
g 108.25).211 S
"Dial It
1445,%2 g
358.378 5
111,25).092
S 0.247,62
UMBILITIES AND NET ASSETS
CURRENT LIABILITIES
Aaanb pryable
g 1585,370 3
302,919 $
ii.am
43169 a
1,943,863
g 119,9P
A ed liabiM¢5
331,128
21,593
0,885
34,511
396,115
t.,w led not reP.,tm Mn.tla
527.285
Payable from reslrclM aseMs
Revenue 4nGe Pawlas-.17W
1,51606
1.545 000
Capital leases payable - .treed
90,730
5),75)
Awned Merest made
26.416
MANN
Awned ampenaled abwe oas-.00171
112,854
112,955
Custaner EeppsM; payable
1,183.552
ISM
1,210.232
Total. 17800 l'ab.1sas
5,056422
324,512
W,T30
183,56
5,597,314
647,262
NON -CURRENT LIABILITIES
R.-Weds payable
18,095.665
18,WS,6E5
Camel Maws Maw
1369113
139,916
Awned wncensaled abaenas
107,465
am
10,513
26628
166W1
Tobl..rat radmies
18,203.130
22.495
10,513
168744
1643,482
TOTAL LIABILITIES
23,281552
316607
31.303
362334
24,5)1,798
647,262
NET ASSETS
ImeaMd M capital asses, nM of related daW
89,8265)5
23,6911
674,530
(61303)
70,516,15)
1,824,547
ReaVbed lw
Rewtne bad pnnapal eM interest
228,017
228,047
U,raM led
14.9]3.55)
728,995
739,229
12.315
16,451099
5.775,793
TOTAL NET ASSETS
3 5),027.66 g
752033 S
1413,759 a
4,042 g
81,196298
4 7.65).340
The Notes to Financial Statements
are an integral part of this statement.
27
CITY OF ALLEN, TEXAS EXHIBIT 8
RECONCILIATION OF THE STATEMENT OF NET ASSETS
OF PROPRIETARY FUNDS TO THE
GOVERNMENT -WIDE STATEMENT OF NET ASSETS
AS OF SEPTEMBER 30, 2005
Amounts reported for business -type activities in the statement of net
assets are different because:
Total net assets per statement of net assets
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 assets. The amount shown
represents the net receivable from internal service funds allocated to business -type
activities since the adoption of GASB 34.
Total net assets of business -type activlties
The Notes to Financial Statements
are an integral part of this statement.
w
$ 87,198,296
499,082
$ 87,697,378
II
' The Notes to Finandal Statements
are an integral part of this statement
1 29
CRY OF ALLEN, TEXAS
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
EXHIBIT 9
BUSINESS -TYPE ACTMTIES
ENTERPRISE FUNDS
GOVERNMENTAL
ACTMTIES
WATER AND
SOLD
GOLF
INTERNAL SERVICE
SEWER
WASTE
DRAINAGE
COURSE
TOTAL
FUNDS
OPERATING REVENUES
Charges far miss and semces:
W reales
E 15.892,109
$
E
$
E 12,650,109
$
5,892,489
5,892,989
Connecherges
Garbage nfees
282,481
262,481
3,295,542
3,295,592
Se,noe haTesions
Semcee
547,168
138,293
1,201,237
1,804,896
5,883,982
me.
Drainage foes
801481
601,481
Miscellaneous
65.485
35.000
3,299
103]84
91.433
Total operatmg revenues
19,428,212
3.330,542
937.774
1,204,536
24,901,O64
5,925,395
OPERATING EXPENSES:
Personnel services
2,699,435
24],95]
262,308
753,889
3,963,669
133,041
COMradual semces
8,542,403
3,1,13,040
153,005
815,423
12453,871
4,506,]55
Maintenance
Supplies
1B0,054162,89,1
122035
6.215
19,771
74,492
79,351
417,440
229,372
Depmaetion and amdtiae5on
3,639,895
10,292
72,331
68,447
3,788,965
266,210
011ier
138,691
60,859
0,141
21,011
280,702
Total operebng expenses
15,322,513
3,470,363
730,530
1,610,613
21,134.019
4,506,008
OPERATING INCOME (LOSS)
4,105,899
(139.821)
207,2,14
(406,077)
3,767.045
1,019,389
NON-OPERATING REVENUES (EXPENSES)
Imesbnent eamiNs
167,208
20,978
18,231
206,415
89,962
Interest expense
(809,574)
(809,574)
Gain on disposal 0f capital assets
14,303
Development lees
1,089,345
1,089,345
Total nonopembn9 revenues
446,9]9
20,978
18,231
486,186
104,265
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS
4,552,678
(118.845)
225,475
(406077)
4,253,231
1,123.654
'
CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital conlnbulions
8823,517
8,823,517
Transfers 6om other fonds
8,912,235
19,344
410,119
7,341,898
259,400
Transfers to other Funds
(2,118,475)
(92,960)
(187,200)
(2,398,835)
(18343)
Total capdsl centobubons and transfers
11,617,271
(92960)
(167,858)
410,119
11]68,580
240,057
CHANGE IN NET ASSETS
16,169,955
(211,805)
57,619
4,042
16,019,811
1,353,711
NET ASSETS, BEGINNING OF YEAR
60,857707
91P1,638
1,358,140
71,178,485
6,236,629
NET ASSETS, END OF YEAR
$ 85,027,862
S 752,833
$ 1,413,759
E 4,042
$ 87,198,296
$ 7,600,340
II
' The Notes to Finandal Statements
are an integral part of this statement
1 29
CITY OF ALLEN, TEXAS EXHIBIT 10
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS OF PROPRIETARY FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 200°
Amounts reported for business -type activities in the statement of activities
are different because:
Net change in fund net assets -total proprietary funds
$ 16,019,811 ,
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. 216,8116
Change in net assets of business -type activities $ 16,236,617
The Notes to Financial Statements
are an integral part of this statement.
30
CITY OF ALLEN, TEXAS
Net case provided ly nisdinl donaLL,9 atlMlies
6,081.2/5
1113093)
205.815
EXHIBIT 11
ENTERPRISE FUNDS
Interest and fees pad on lmglarm ad
CASH FLOM FROM NO"ITAL
STATEMENT OF CASH FLOWS
AoIasNon and conswalm M capital aged.
FINANCINGACTIVITIES
(leas)
PROPRIETARY FUNDS
(5,079.903)
N.Iae,n9(
Capital lease Wen Pinto
Transient from other NMs
0.912.235
FOR THE YEAR ENDED SEPTEMBER 30 2005
19,392
(5e111)
5.911,579
proceeds heirsale of easel assets
TlantlerelooMerNMs
8.118.6]5)
82,9801
BUSINESSTYPE ACTIVITIES
400,119
(1998.51m
'
Nelp"peeked 6y(u5etle)ne-capM1l finntllq octal
--SH
4,]93.]00
ENTERPRISE FUNDS
(1678561
40).118
GOVERNMENTAL
ContriWlbna hem JevNopers
G FLOWS FROM CAPITAL AND
ACTIVITIES
WATER AND
SOLID
GOLF
INTERNALSERWCE
Net rado(used in) rapial and relalPo financial Worries
SEWER
WASTE DRAINAGE
COURSE
TOTAL
FUNDS
CASH FLOWS FROM OPERATING ACTNITIES
CASH FLOM FROM INVESTING ACTMTIES
cash recalvedfrom casronnre E
17,713,207 $
9,301,315 f 692,944 S
1,180,6(0 S
23.120.330
$
Ca50
8wle VansadbnawlN olMrfuMe
N1820.683)
(2.918,403)
Proceeds from uN and wastes N resonant sevMMe
5,975,349
5,8]2,508
Cash Paio
Zid in eufw sntate
(21552,015)
(333503) (255.656)
025,061)
(3,]92,055)
(133,0!1)
fo pods
Cash paid for geode and serncae
(9,899,11])
(3,160,935) (385.63]1
(706,46])
(13.382.159)
(056,107)
Gain aid 1w tlams
Net asn pr -d. in, (u edi rid mesfi,g amvNes
1311015➢
1.3]3.001
259.100
1183131
21005]
Principal pad on revenue tend maWntln
Net case provided ly nisdinl donaLL,9 atlMlies
6,081.2/5
1113093)
205.815
1212,088)
5,901.309
Interest and fees pad on lmglarm ad
CASH FLOM FROM NO"ITAL
O76,]119)
AoIasNon and conswalm M capital aged.
FINANCINGACTIVITIES
(leas)
(5,079.903)
N.Iae,n9(
Capital lease Wen Pinto
Transient from other NMs
0.912.235
19,392
(5e111)
5.911,579
proceeds heirsale of easel assets
TlantlerelooMerNMs
8.118.6]5)
82,9801
(187200)
400,119
(1998.51m
'
Nelp"peeked 6y(u5etle)ne-capM1l finntllq octal
--SH
4,]93.]00
829801
(1678561
40).118
dao ,C&I
ContriWlbna hem JevNopers
G FLOWS FROM CAPITAL AND
.009.as
RELATED FINANCING ACTMTIES
Net rado(used in) rapial and relalPo financial Worries
8,030.270)
1.3]3.001
259.100
1183131
21005]
Principal pad on revenue tend maWntln
(I.M.B00)
(1.M.000(
Interest and fees pad on lmglarm ad
(7/0,7161
O76,]119)
AoIasNon and conswalm M capital aged.
(5.092,620)
(leas)
(5,079.903)
N.Iae,n9(
Capital lease Wen Pinto
(58,144)
(5e111)
proceeds heirsale of easel assets
55,493
Bond proceeds
4,25.]]1
1,251,7/1
ContriWlbna hem JevNopers
.03¢445
.009.as
Net rado(used in) rapial and relalPo financial Worries
8,030.270)
(1¢4431
(58144)
(2,713,757)
(1051286)
CASH FLOM FROM INVESTING ACTMTIES
Purchase of in... seculNes
(11.020,093)
N1820.683)
(2.918,403)
Proceeds from uN and wastes N resonant sevMMe
5,975,349
5,975,340
2,100,0136
Interest on Investments
150.628
ffi876
lent
188.035
97.890
Net asn pr -d. in, (u edi rid mesfi,g amvNes
(5,694.719)
20.970
10,231
156555121
(159.5931
NET CHANGE IN CASH AND CASH EGUNALENTS
2,524,018
(215.0)])
1f6,877
Mason
2.525.103
(199,018(
CASH AND CASH EQUIVALENTS. BEGINNING OF YEAR
6.546,740
860.603
613.169
5,126,512
35a M3
CASH AND CASH EQUIVALENTS, END OF YEAR
$ 9.0]0,]59 $
751.526 f
]30.048 $
43.207 $
10,551,615 5
3.387.305
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Net opaened notion (Was)
$ 4105699 S (139.921)$
207.244 6
(also $
3.767,045 $
1.01¢399
AdrydmenM to lemntik aperafing Income (loa)
to net cash plmmed W (user in) openfing actions,
Bremerton and annnieadon¢spans¢
3833477
10,292
72,331
5644]
3,)02,54]
265210
Change in 44 nets and fateRnes'.
(Inmos¢)In—unh received¢
(1115.005)
(25,050)
(938)
(15,598)
(1,756,59")
(52,708)
(increase)in other receivades
(24,137)
(24,137)
(herefore) In prefers
of deal
(1 1,0.50)
Demease In Inventories
10,395
10,395
maaase devrnarri aewumspryaae
(402,704)
18.891
(Wt)
43668
1340,715)
140,111
Increase on acmuM Iia00eka
222.095
2,188
as
34,511
259,x2
Ine a ne, in relaina,e payaNe
16,00
16,680
Increase an wmpensaled aheences
146500
14,454
5,932
28,828
196,804
Increase In utility deposits
90.695
60,695
TWIad,..n.
1.955,518
(32]2)
78.601
losses
2.194244
353.615
NH cash rywiEer in, (uxd in) ai emfi,p adviser
f 6.061.245 $
f143W3) a
285."5 $ (243689) It
5.561.309 a
1 ]]3.N4
NON-0ASH FINANCING ACTNITIES
ConaiWigne d Ned assNe hom Qmdpee, Is 6.823517 $ $ i $ 6,823,517 $
Reconciliation of Wdl rash to the statement of net a ante,
Cash and man aluivalenls - omen $ 7.W7291 is 75.526 $ 730,046 E 98237 E 0,550,150 $ 3.387,385
Resniged cash and rash Nonvoters 1003485 2,003.485
CASH AND CASH EQUIVALENTS, ENO OF YEAR $ 9.070,756 It 751,528 $ 730.046 a 99.20] E 10,651,615 f 3.387.385
The Notes to Financial Statements
are an integral part of this statement.
31
CITY OF ALLEN, TEXAS
EXHIBIT 12
COMPONENT UNITS
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2005
ALLEN
ALLEN
ECONOMIC
COMMUNITY
DEVELOPMENT
DEVELOPMENT
CORPORATION
CORPORATION
TOTALS
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$ 1,707,300
$ 2,173,415
$ 3,880,715
Investments
3,854,982
2,423,260
6,278,242
Sales tax receivable
684,833
684,833
1,369,666
Accounts receivable
1,285
1,285
2,570
Accrued interest receivable
11,767
7,397
19,164
Total current assets
6,260,167
5,290,190
11,550,357
CAPITAL ASSETS
Land
4,419,996
4,419,996
Land improvements
207,278
207,278
Furniture and fixtures
74,028
74,028
Improvements other than buildings
2,942,599
2,942,599
Construction in progress
186,690
186,690
Total capital assets
7,830,591
7,830,591
Less: accumulated depreciation
(1,034,310)
(1,034,310)
Capital assets, net of accumulated depreciation
6,796,281
6,796,281
TOTAL ASSETS
$ 13,056,448
$ 5,290,190
$ 18,348,638
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts payable
$ 305,426
$ 83,653
$ 389,079
Accrued interest payable
33,038
33,038
Retainage payable
9,683
54,928
64,611
Revenue bonds payable - current
445,000
445,000
Total current liabilities
315,109
616,619
931,728
NON-CURRENT LIABILITIES
Revenue bonds payable
7,610,000
7,610,000
Total noncurrent liabilities
7,610,000
7,610,000
TOTAL LIABILITIES
315,109
8,226,619
8,541,728
NET ASSETS (ACCUMULATED DEFICIT)
Invested in capital assets,
net of related debt
6,796,281
(8,055,000)
(1,258,719)
Unrestncted
5,945,058
5,118,571
11,063,629
TOTAL NET ASSETS
(ACCUMULATED DEFICIT)
$ 12,741,339
$ (2,936,429)
$ 9,804,910
The Notes to Financial Statements
are an integral part of this statement.
32
CITY OF ALLEN, TEXAS EXHIBIT 13
STATEMENT OF ACTIVITIES
COMPONENT UNITS
FOR THE YEAR ENDED SEPTEMBER 30 2005
Net (Expense) Revenue and
Program Revenues Changes in Net Assets
COMPONENT UNITS
ALLEN ALLEN
Operating ECONOMIC COMMUNITY
Charges for Grants and DEVELOPMENT DEVELOPMENT
Expenses Services Contributions CORPORATION CORPORATION TOTALS
FunctlonlProgram Activities
COMPONENT UNITS
Allen Economic
Development Corporation $ 3,825,835 It $ S (3,825,835) $ $ (3,825,835)
Allen Community
Devebpment Corporation 2,731,119 (2,731,119) (2,731,119)
TOTAL COMPONENT UNITS $. 6.556.954 S $ 8 (3.825.835) $ (2.731.119) $ (6.556.954)
General revenues.
Selestaxes
Interest on investments
Miscellaneous
Total general revenues
CHANGE IN NET ASSETS
NET ASSETS, beginning of year
NET ASSETS, end of year
The Notes to Financial Statements are
an integral part of this statement 33
$ 3,874,528
Is 3,874,528 $
7,749,056
58,957
81,101
140,058
919,769
919,769
4,853,254
3,955,629
8,808,883
1,027,419
1,224,510
2,251,929
11,713,920
(4,160,939)
7,552,981
It 12.741.339
$ (2.936.429) $ 9.804.910
RESPECT + ""ta
x ?+a.
C+TP OF
� NOTES TO
� FINANCIAL STATEMENTS
aESPECT * INT FG
* R, ,
■ G/TY
OF: A``EN
I
CITY OF ALLEN, TEXAS
' NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
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), the American Institute of Certified Public Accountants in the publication entitled Audits of State
and Local Governmental Units and by the Financial Accounting Standards Board (when applicable). As
' allowed by Governmental Accounting and Financial Reporting Standards, the City has elected not to
apply Financial Accounting Standards Board Statements and Interpretations, Accounting Principles
Board Opinions, and Accounting Research Bulletins of the Committee of Accounting Procedure issued
after November 30, 1989. The more significant accounting policies of the City are described below.
tFinancial 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.
km
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -continued
Financial Reporting Entity - continued
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.
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 discreetly presented as governmental fund types and do
not issue separate financial statements.
Basis of Presentation
The government -wide financial statements (the statement of net assets and the statement of activities)
report information on all of the activities of the City, except for fiduciary funds. The effect of interfund
activity, within the governmental and business -type activities columns, has been removed from these
statements. 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.
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 non -major 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:
36
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Basis of Presentation — continued
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.
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.
Facilities Agreement Special Revenue Fund -
The Facilities Agreement Special Revenue Fund is used to account for funds received from
builders and developers used on specific facility agreements such as neighborhood parks, paving
and assessments in new developments.
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.
Street Improvements Capital Projects Fund -
The Street Improvements Capital Projects Fund is used to account for funds received and
expended for construction of and improvements to the City's streets. The construction is financed
by the proceeds of general obligation bonds and interest on investments.
Park Improvements Capital Projects Fund -
The Park Improvements Capital Projects Fund is used to account for the financing, improvements,
and enlargements of the City's parks. These improvements and enlargements are funded by
general obligation bond proceeds and interest on investments
Library Capital Projects Fund -
The Library Capital Projects Fund is used to account for the financing, construction and furnishing
of library facilities with the proceeds of general obligation bonds and interest on investments
37
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -continued
Basis of Presentation - continued
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 Assets. The City
has presented the following major proprietary 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 Chase
Oaks Golf Course purchased by the City in October 2004.
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
vehicles to other departments.
Risk Management Fund -
The Risk Management Fund accounts for the costs associated workers compensation, liability and
property insurance and medical and dental programs established for City employees and their
covered dependents.
38
■ CITY OF ALLEN, TEXAS
' NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
' NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -continued
' Basis of Presentation - continued
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 noncurrent) are
included on the statement of net assets and the operating statements present increases (revenues)
and decreases (expenses) in total net assets. Under the accrual basis of accounting, revenues are
' recognized when earned, including unbilled water and sewer services which are accrued. Expenses
are recognized at the time the liabilities are incurred.
Governmental fund financial statements are reported using the current financial resources
' measurement focus and are accounted for using the modified accrual basis of accounting. Under the
modified accrual basis of accounting, revenues are recognized when susceptible to accrual; i.e., when
they become both measurable and available. "Measurable" means the amount of the transaction can
be determined and "available" means collectible within the current period or soon enough thereafter to
be used to pay liabilities of the current period. The City considers all revenues as available if they are
collected within 60 days after year end. Expenditures are recorded when the related fund liability is
incurred, except for unmatured interest on general long-term debt which is recognized when due, and
' certain compensated absences and claims and judgments which are recognized when the obligations
are expected to be liquidated with expendable available financial resources.
The revenues susceptible to accrual are property and sales taxes, franchise taxes and interest income.
Other receipts (special assessments) become measurable and available when cash is received by the
City and are recognized as revenue at that time.
' 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.
39
1
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -continued
Cash, Cash Equivalents and Investments - continued
For purposes of the statement of cash flows, the proprietary funds consider all highly liquid
investments (including restricted assets) with an original maturity of three months or less when
purchased to be cash equivalents, as they are available for withdrawal on demand.
Investments are recorded at amortized cost when original maturity at the time of purchase is less than
one year or at market if greater than one year.
Encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of funds are recorded in order to reserve that portion of the applicable appropriation, is
utilized in the governmental funds. Under the City's budgetary process, appropriations lapse at fiscal
year end. Encumbrances are reported as reservations of fund balances 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 2004 levy was based is
$4,785,147,808. 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, 2005 was $0.560 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 five years; however, the City may, at its own
expense, require annual reviews of appraised values.
The City may challenge appraised values established by the appraisal district through various appeals
and, if necessary, legal action. Under this legislation, the City continues to set tax rates on City
property. However, if the effective tax rate, excluding tax rates for bonds and other contractual
obligations, adjusted for new improvements, exceeds the rate for the previous year by more than 8%,
qualified voters of the City may petition for an election to determine whether to limit the tax rate to no
more than 8% above the tax rate of the previous year
Fill
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30.2005
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—continued
Intertund Receivables and Payables
Activity 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
Intertund 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 properly 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 year ended September 30, 2005, the AEDC
contributed $36,000 to the general fund and the ACDC contributed $36,000 to the general fund The
revenues were reflected as grants and contributions for the primary government in the 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. A reserve for prepaid items is recognized in the governmental funds in the
fund level financial statements to signify that a portion of fund balance is not available for other
subsequent expenditures.
Special Assessments
The City has the authority to make special assessments to property owners as part of the financing of
capital improvements. Such assessments are recorded in the capital projects fund as receivables when
assessed and are recognized as revenue when both the measurable and available criteria have been
met (generally when collected).
41
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
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 fair market value on the date donated. The costs of normal repairs and maintenance that do
not add to the value of the asset or materially extend the asset lives are not capitalized. Renewals and
betterments are capitalized. Interest has not been capitalized during the construction period on
property, plant and equipment.
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 of the vehicle 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, unfit 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.
Net Assets
Net assets represent the difference between assets and liabilities Net assets invested in capital
assets, net of related debt 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 assets are 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.
42
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30.2005
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,
2005, with collateral required by state statutes. At year-end, the carrying amount of the City's deposits was
$2,047,042 and the bank balance was $2,868,606. Of the bank balance, federal depository insurance
covered $200,000 and the remainder was covered by collateral held by the pledging financial institution's
agent in the City's name. The City's petty cash balance at September 30, 2005 was $10,250.
The carrying amount of deposits for ACDC and AEDC, discretely presented component units, were $5,085
and $5,719, respectively, with no corresponding bank balances as they are pooled with the City's deposits
Investments — State statutes authorize the City to invest in U.S. Government obligations, obligations of
Texas and its agencies and fully collateralized repurchase agreements. The City, AEDC and ACDC invest
in Texpool which is an investment fund authorized by the Texas Legislature and administered by the Texas
State Treasury. The Texas Treasury Safekeeping Trust Company is trustee of Texpool and is a limited
purpose trust company authorized pursuant to Texas Government Code. The purpose of Texpool is to
allow for the pooling of public funds to provide a higher yield on the pooled investment than would be
possible with the investment of the individual public entity's funds. Texpool investments are subject to the
same investment policies maintained by the State Treasury for all state funds. The Legislature has
authorized only certain investment instruments for public funds, including repurchase agreements, U.S.
Treasury bills and bonds, securities of other U.S. Government agencies, commercial paper and other safe
instruments. The investment in Texpool and any accrued interest may be redeemed at the City's
discretion. The City's position in the pool is not materially different from the value of the pool shares.
The table below identifies the investment types that are authorized for the City by the Public Funds
Investment Act. (Government Code Chapter 2256). The table also identifies certain provisions of the City's
investment policy that address interest rate risk, credit risk, and concentration of credit risk.
43
Maximum
Maximum
Authorized
Maximum
Percentage
Investment
Investment Tvoe
Ma uri
of Portfolio
In One Issuer
Certificates of Deposit
5 years
30%
None
Repurchase Agreements
5years
30%
None
U. S. Treasure Obligations
5 years
100°/0
None
Municipal Investment Pool
5 years
100%
None
Commercial Bank Savings Account
5 years
15%
None
U. S. Government Securities (non -callable)
5 years
100%
None
U. S. Government Securities (callable)
5 years
70%
None
U. S. Government Sponsored Corp.
5 years
75%
None
Instruments: non -callable
U. S. Government Sponsored Corp.
5 years
70^/
None
Instruments: callable
Commercial Paper
5 years
20%
None
Bankers Acceptance
5 years
10%
None
Guaranteed Investment Contracts
5 years
25%
None
State or Local Governmental Obligations
5 years
30%
None
43
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 2. DEPOSITS, INVESTMENTS AND INVESTMENT POLICIES -continued
Disclosures relating to interest rate risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Investments with interest rates that are fixed for longer periods of time are more likely to
be subject to increased variability in their fair values due to changes in the market interest rates. The
City manages it 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.
As of September 30, 2005, the City had the following investments:
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the
investment. This type of risk is typically expressed in terms of the credit ratings issued by a nationally
recognized statistical rating organization. The City reduces the risk of issuer default by limiting
investments to those instruments allowed by the Public Funds Investment Act, Chapter 2256, Texas
Government Code. The City's investments in U.S. Agency securities (FHLB, FNMA, FFCB, and
FHLMC) are rated AAA by Standard & Poore and Aaa by Moody's Investors Service. The investment
in the Texas Local Government Pool (TexPool) carried a credit rating of AAAm by Standard & Poor's as
of September 30, 2005. The City's investments in commercial paper are rated P-1 and Fl.
44
Fair Value
Weighted
Investment
Primary
Avg Maturity
Type
Government
AEDC
ACDC
Total (Years)
FFC
$ 2,393,750
$ $
$ 2,393,750 2.93
Commercial Paper
3,442,133
3,442,133 .14
FHLB
10,460,232
1,083,739
681,244
12,225,215 1.16
FNMA
12,418,050
1,286,579
808,750
14,513,379 .37
FHLMC
14,329,962
1,484,664
933,266
16,747,892 1.40
Texpool
21.691.858
1.701.481
2.168.330
25.561.669 .003
Total
54.735.985
S $
4.591.590
$ 74.884.038
Disclosures relating to credit risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the
investment. This type of risk is typically expressed in terms of the credit ratings issued by a nationally
recognized statistical rating organization. The City reduces the risk of issuer default by limiting
investments to those instruments allowed by the Public Funds Investment Act, Chapter 2256, Texas
Government Code. The City's investments in U.S. Agency securities (FHLB, FNMA, FFCB, and
FHLMC) are rated AAA by Standard & Poore and Aaa by Moody's Investors Service. The investment
in the Texas Local Government Pool (TexPool) carried a credit rating of AAAm by Standard & Poor's as
of September 30, 2005. The City's investments in commercial paper are rated P-1 and Fl.
44
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 2. DEPOSITS, INVESTMENTS AND INVESTMENT POLICIES -continued
Concentration of Credit Risk
The City's investment policy does not contain stipulations regarding the amount of funds that can be
invested in any single issuer. As of September 30, 2005, with the exception of funds invested at
Texpool, the following table represents 5% or more of the City's investments.
Issuer
Investment Type
Reported Amount
Percentage
FHLB
Federal agency securities
$12,225,214
16.33%
FNMA
Federal agency securities
$14,513,378
19.38%
FHLMC
Federal agency securities
$16,747,892
22.37%
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 does not contain specific policy
or legal requirements that address the potential for custodial credit risk for investments.
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, 2005, the City's deposits with financial institutions above the federal depository
limits were fully collateralized.
45
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 3. RECEIVABLES
Receivables at September 30, 2005 for the government's individual major funds and non -major, and
internal service funds in the aggregate, including the applicable allowances for uncollectible accounts,
consist of the following:
Property Sales Axrued
Tax Taxes Accounts Interest Assessments Other Total
General Fund $435,878 $1,369,666 $ $ 27,097 $ $ 529,976 $2,362,617
Debt Service 255,398 2,203 257,601
Facilities
Agreement
16,649
16,649
General Capital
Pmjeds
22,513
187,557
210,070
Street
Improvements
15,909
2,578
18,487
Park
Improvements
6,352
6,352
G.O. Bond Fund
8.274
8,274
Non -major
Governmental Funds
116,140
116,140
Water and Sewer
4,301,917
36,082
4,337,999
Solid Waste
161,336
162,740
324,076
Drainage
40,486
40,486
GoBCourse
15,696
15,696
Internal Service
Funds
80.193
8994
89.187
Gross Receivables 691,276
1,369,666
4,615,537
128,539
187,557 811,059
7,803,634
LessAllowance for
Uncollectibles ( 277.2761
( 14.5811
( 291.8571
Total Net Receivables,
Primary Govemment $414,000
$1,369,666
$ 4,600,956
$ 128,539
$ 187,557 $ 811,059
$7,511,777
Component Units
1.369.666
2.570
19.154
1.391.400
Total Net Receivables,
Reporting Entity $ 416 nnn
8 2 ]39 332
A 4 ROi qR
Z 3
$ 1R] 55]
$ A 9031 ]]
The Water and Sewer Fund accounts receivable
include
unbilled charges for services rendered through
September 30, 2005.
46
■
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE4. CAPITALASSETS
Capital asset activity for the year ended September 30, 2005 was as follows:
Governmental Activities
Balance
Sales or
Balance
September 30,
Other
AdjusMenW
September 30,
2004
Additions
Dispositions
Transfers
2005
Governmental Funds:
'
General capital assets
not being depreciated
Land and land improvements
$ 61,662,118
$ 22,812,669
$
$
$ 84,474,787
construction in progress
25.534.288
22.379.106
( 107.7651
( 7.643.1481
40.262.481
'
Total capital assets
no being depreciated
87,196,406
45.191.775
( 107.7651
( 7.543.1481
124.737.268
General capital assets
'
being depreciated
Buildings
37,203,288
119,333
37,322,621
Improvements
other than buildings
267,133,760
16,616,548
7,251,221
291,001,529
Furniture and fixtures
1,594,504
890,016
2,484,520
Vehicles
3,116,830
495,163
( 268,863)
( 45,059)
3,298,071
Library books
2,573,525
192,014
( 177,435)
2,588,104
Machinery and equipment
2.658.166
799.018
( 17.0101
217.653
3.657.827
Total capital assets being
depreciated
314.280.073
18.992.759
( 463.3081
7.543.148
_340.352.672
Less accumulated
depreciation for
'
Buildings
( 4,425,669)
( 1,183,333)
( 5.609.002)
Improvements
other than buildings
( 65,713,550)
( 10,328,792)
( 76,(P42,342)
Fumdure and fixtures
( 1,117,272)
( 232,348)
( 1,349,620)
'
Vehicles
( 1,471,663)
( 348,868)
295,295
( 1,525,236)
Library Books
( 2,180,089)
( 127,331)
177,435
( 2,129,985)
Machinery and equipment
( 1.964.327)
1 546.9001
9.935
( 2.501.2921
Total accumulated
depreciation
( 76.872.5701
( 12.767.5721
482665
( 89.157.4771
Total general capital assets
being depreciated, net
237.407.503
6225.187
19.357
7.543.148
251.195.195
'
General capital assets, net
$ 324.603.909
$ 51 416 962
($ $8.4081
$
$ 375.932463
47
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 4. CAPITAL ASSETS - continued
Balance
Sales or
Balance
September 30,
Other
Adjustmentsl
September 30,
2004
Additions
Disposition.
Transfers
2005
Internal Service Funds:
Capital assets being depreciated
Vehicles
$ 2,157,525
$ 915,649
($ 172,552)
$
$ 2,900.622
Machinery and equipment
284.60]
191.130
475.737
Total internal service
assets being depreciated
2,442,132
1,106,779
( 172,552)
3,376,359
Less accumulated
depredation for:
Vehicles
( 1,262,927)
( 227,733)
131,362
( 1,359,298)
Machinery and equipment
1 154.0371
( 38.477)
( 192.5141
Total accumulated
depreciation
( 14169641
( 266.2101
131362
( 1551.8121
Internal service funds
capital assets, net
$ 1 025 168
$ 840.569
($ 41.199
$
$ 1.824.547
Governmental activities
capital assets, net
S 395 629 077S
52 25v g�
(G 199 59a)
$
8 3]] ]57 010
Business -Type Activities
Water and Sewer Activities:
Capital assets not being depreciated
Land
$ 822,643
$ 51,399
$
$
$ 874,042
Construction in progress
835.114
5.382.357
1 767.4001
5.450.071
Total capital assets not
being depreciated
1.657.757
5.433.756
1 767.4001
6.324.113
Capital Assets Being depreciated.
Towers, tanks, 8 pumps stations
98,163,493
6,831,293
767,400
105,762,186
Furniture and fixtures
8,187
8,187
Machinery and equipment
1,736,559
397,512
( 30,000)
2,104,071
Vehicles
700.302
27.994
23.582
751.878
Total capital assets
being depreciated
100.608.541
7.256.799
L 6.418)
767.400
108.626.322
Less accumulated
depreciation for.
Towers, tanks, 8 pumps stations
( 27,385,983)
( 3,275,564)
( 30,661,547)
Furniture and fixtures
( 4,093)
( 1,637)
( 5,730)
Machinery and equipment
( 563,635)
( 238,233)
30,000
( 771,888)
Vehicles
( 542.0321
( 116.9931
( 23.5821
( 682.6071
Total accumulated
depreciation
( 28,495,7431
( 3,632,4271
6418
( 32.121.7521
Total capital assets
Win depreciated, net
72.112.798
3,624,372
76] 400
76.504.5]0
Water and sewer adwities
capital assets, net
$ 73770555
S 9058.128
$
$
$ 82.828.683
587
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 4. CAPITAL ASSETS -continued
Balance
Sales or
Balance
September 30,
Other
Adjustments)
September 30,
2004
Addition.
Disoosieons
Transfers
2005
Solid Waste Activities
Capital assets being depreciated
Machinery and equipment
$ 9,819
$
$
$
$ 9,819
Vehicles
".Mit
44448
Total capital assets
being depreciated
54.267
54267
Less accumulated
depreciation for:
Machinery and equipment
( 1,705)
( 1,399)
( 3,104)
Vehicles
( 184321
( 88931
( 27.3251
Total accumulated
depreciation
( 20.1371
( 102921
( 30.429)
Solid waste activities
capital assets, net
$ 34.130
($ 102921
$
$
$ 23838
Drainage Activities:
Capital assets being depreciated
Other improvements
$ 496.132
$
$
$
$ 496,132
Vehicles
115,179
45,458
160,637
Machinery and equipment
373.734
373734
Total capital assets
being depreciated
985045
45.,158
1.030503
Less accumulated
depreciation for
Other improvements
( 18,396)
( 11,942)
( 30,338)
Vehicles
( 89,753)
( 16,248)
( 26,115)
( 132,116)
Machinery and equipment
( 149.3]81
( M.1411
( 193.519)
Total accumulated
depreciation
( 2575271
( 72.3311
( 26.1151
( 355.973)
Drainage acbvnies
capital assets, net
$ 727.518
($ 72.3311
$ 19.343
$
$ 674.530
Golf Course Activities:
Capital assets being depreciated
Machinery and equipment
$
$ 296790
$
$
$ 296790
Less accumulated
depreciation for
Machinery and equipment
( 66"71
( 66"7
Total accumulated
depreciation
( 66A47
( 664471
Goff course activities
capital assets, net
$
$ 230,343
$
8
$ 230 343
Business -type activities
capital assets, net
$ ]d 519 901
$ 9 705 Bd6
$ 1 o aqi
$
$ 63 757 3%
49
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 4. CAPITAL ASSETS — continued
$ 733,365
Public safety
791,535
Public works
Balance
Culture and recreation
Sales or
Balance
33,643
September 30,
6.386
Other Adjustments/
September 30,
Internal Service Funds
2004
Additions
Disoositons Transfers
2005
Component Units
Capital assets not being depreciated
Land
$ 4,574,600
$ 44,335
($ 198,939) $
$ 4,419,996
Land improvements
207,278
207,278
Construction in progress
186.690
186.690
Total capital assets
not being depreciated
$ 4.988.568
$ 44.335
is 198.9391 $
$ 4.813.964
Capital assets being depreciated:
Improvements other
than buildings
2,942,599
2,942,599
Furniture and fixtures
74.028
74.028
Total capital assets being
depreciated
3,016,627
3,016,627
Less accumulated
depreciation toc
Buildings
( 809,214)
( 147,130)
( 956,344)
Furniture and fixtures
( 66.6261
( 11.3401
( 77.966)
Total accumulated
depreciation
( 875.840)
( 158.470)
( 1.034.310)
Total capital assets
being depreciated, net
2.140 787
( 158.4701
1.982.317
Component units
capital assets, net
17 109 355
Depreciation expense was charged as direct expense to programs of the primary government as follows
Governmental activities:
General government
$ 733,365
Public safety
791,535
Public works
8,313,788
Culture and recreation
2,888,855
Community development
33,643
Grant administration
6.386
Total depreciation expense - General capital assets
12,767,572
Internal Service Funds
266.210
Total depreciation expense - Governmental activities
$ 13.033.782
50
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30.2005
NOTE 4. CAPITAL ASSETS -continued
Business -type activities:
Water and sewer $ 3,632,427
Solid waste 10,292
Drainage utility 72,331
Golf course 66.447
Total depreciation expense - Business -type activities 3.781.497
Component units:
Allen Economic Development Corporation $ 158.740
Total depreciation expense - Component units $
Outstanding commitments at September 30, 2005, under authorized construction contracts were
$8,150,844. These outstanding commitments for capital projects will be funded from unexpended bond
proceeds and additional general obligation bonds. Authorization to issue additional bonds may be
requested from the qualified voters of the City.
NOTE 5. LONG-TERM DEBT
At September 30, 2005, bonds payable consisted of the following individual issues:
General Obligation Bonds:
Governmental Business-tvoe
$1,978,921 Series 1992 Capital Appreciation Bonds with
principal and interest due upon maturity on September 1,
2005 and September 1, 2006; interest at 6.25% to 6.35%. $ 955,670 $
$7,100,000 Series 1996 Bonds due in annual installments
of $130,000 to $585,000 through September 1, 2016;
interest at 5.0% to 7.0%. 330,000
$10,000,000 Series 1998 Bonds due in annual installments
of $95,000 to $795,000 through September 1, 2008;
interest at 4.5% to 6.5%.
1,360,000
$13,340,000 Series 1999 Bonds due in annual installments
of $320,000 to $1,055,000 through September 1, 2019;
interest at 4.875% to 6.375%.
2,330,000
$11,100,000 Series 2000 Bonds due in annual installments
of $115,000 to $915,000 through September 1, 2020;
interest at 5.0% to 6.5%
2,335,000
$20,715,000 Series 2001 Bonds due in annual installments
of $160,000 to $2,110,000 through September 1, 2021;
interest at 4.0% to 5 25%.
10,765,000
51
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTES. LONG-TERM DEBT—continued
General Obligation Bonds -continued:
$13,000,000 Series 2002 Bonds due in annual installments
of $175,000 to 1,020,000 through September 1, 2022;
interest at 4.2% to 5.5%.
$2,705,000 Series 2003 Bonds due in annual Installments
of $25,000 to $955,000 through September 1, 2007;
interest at 2.0% to 3.0%.
$7,210,000 Series 2003 Bonds due in annual installments
of $175,000 to $515,000 through September 1, 2023;
interest at 2.75% to 4.25%.
$11,700,000 Series 2004 Bonds due in annual installments
of $395,000 to $790,000 through September 1, 2024;
interest at 4.0% to 5.25%.
$32,330,000 Series 2005 Bonds due in annual installments
of $75,000 to $3,505,000 through August 15, 2021;
interest at 3.0% to 5.00%.
Certificates of Obligation
$4,735,000 Series 2004A Combination Tax 8 Revenue
Golf Course Certificates of Obligation due in annual
installments of $165,000 to $390,000 through
September 1, 2024, interest at 3 50% to 5.00%.
$765,000 Series 2004B Combination Tax & Revenue
Golf Course Certificates of Obligation due in annual
installments of $25,000 to $70,000 through
September 1, 2024;mterest at 4.875% to 5.50%.
52
Governmental Business -Noe
$ 11,980,000 $
945,000
6,780,000
11,450,000
32.200.000
$ 81 430 670 $
$ 4,735,000 $
rrr
rr rrr
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 5. LONG-TERM DEBT - continued
Water and Sewer Revenue Bonds:
Governmental Business -type
$12,545,000 Series 1999 Bonds due in annual installments
of $330,000 to $950,000 through June 1, 2019; interest
at 3.55% to 5.0%. $ $ 8,990,000
$6,710,000 Series 2004 Bonds due in annual installments
of $175,000 to $490,000 through June 1, 2024; interest
at 4.75% t0 5.0%. 6,445,000
$4,300,000 Series 2005 Bonds due in annual installments
of $140,000 to $310,000 through June 1, 2025; interest
at 3.75% to 6.625%. 4.300.000
$ $ 19.735.000
ACDC Sales Tax Revenue Bonds:
$5,350,000 Series 1997 Bonds due in annual installments
of $125,000 to $435,000 through September 1, 2017;
interest at 4.625% to 6.625%. $ 3,900,000 $
$5,125,000 Series 1999 Bonds due in annual installments
of $55,000 to $400,000 through September 1, 2017; interest
at 4.5% to 6.0%. 4.155.000
$ 8.055.000 $
The following is a summary of long-term debt transactions, including current portion, of the City for the year
ended September 30, 2005:
Governmental activity
Long-term debt 89 634 345 $ 3q.3
53
Balance
Balance
Due
Beginning
End
Within
of Year
Increases
Decreases
of Year
One Year
Governmental Activities
General Obligation Bonds
$ 85,833,921
$ 32,330,000 ($
36,733,251)
$ 81,430,670
$ 4,725,670
Certificates of Obligation
5,500,000
5,500,000
Capital lease payable
90,334
140,863 (
94,122)
137,075
50,047
Compensated absences
1,565,382
160,027 (
108,360)
1,617,049
507,760
Accreted interest
2,144,698
263,824 (
1,231,749)
1,176,773
1,176,773
Less deferred amounts:
For issuance premiums
1,567,354
1,567,354
For refundings
( 1.607.702)
92.351
( 1.515.3511
Governmental activity
Long-term debt 89 634 345 $ 3q.3
53
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 5. LONG-TERM DEBT — continued
Annual Requirements to Retire Debt Obligations
The annual aggregate maturities for each bond type for the years subsequent to September 30, 2005, are
as follows:
General Obligation Bonds
Annual debt service requirements to maturity for general obligation bonds, including interest of $34,771,348
are as follows
Fiscal Year Ending
September 30
2006
2007
2008
2009
2010
2011-2015
2016-2020
2021-2025
Total
Governmental Activities
Principal Interest Total
4,725,670
6,085,000
4,115,000
4,305,000
4,505,000
25,960,000
24,185,000
7.550.000
$ 81 430 670
54
5,021,981
3,515,357
3,230,715
3,051,215
2,871,353
11,255,357
5,096,385
728.985
$ 34 771.348
9,747,651
9,600,357
7,345,715
7,356,215
7,376,353
37,215,357
29,281,385
8.278.985
$ 116.202 018
Balance
Balance
Due
Beginning
End
Within
of Year
Increases Decreases
of Year
One Year
Business Type Activities
Water and Sewer Revenue
Bonds
$16,775,000
$ 4,300,000 ($1,340,000)
$19,735,000
$ 1,545,000
Compensated absences
85,053
250,418 (53,614)
281,857
112,956
Capital lease payable
296,790 (58,144)
238,646
98,730
Less deferred amounts:
For refundings
( 91,553)
4,635
( 86,918)
For issuance discounts / premiums
( 10.5521
3.135
( 7.4171
Business -type activity
Long-term debt
$ i6 757 aa8
4.PA] 20 f$ 14419881
$ 20 161 i6B
$ i ]58.68({
Component Units
Sales Tax Revenue Bonds
$ 8.475000
$ ($ 420.0001
$ 8.055.000
$ 455.000
Component units
Long -tens debt
$ 8475000
$ ($ 420.0(10)
8$
$ 455000
The City intends to refire 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.
Annual Requirements to Retire Debt Obligations
The annual aggregate maturities for each bond type for the years subsequent to September 30, 2005, are
as follows:
General Obligation Bonds
Annual debt service requirements to maturity for general obligation bonds, including interest of $34,771,348
are as follows
Fiscal Year Ending
September 30
2006
2007
2008
2009
2010
2011-2015
2016-2020
2021-2025
Total
Governmental Activities
Principal Interest Total
4,725,670
6,085,000
4,115,000
4,305,000
4,505,000
25,960,000
24,185,000
7.550.000
$ 81 430 670
54
5,021,981
3,515,357
3,230,715
3,051,215
2,871,353
11,255,357
5,096,385
728.985
$ 34 771.348
9,747,651
9,600,357
7,345,715
7,356,215
7,376,353
37,215,357
29,281,385
8.278.985
$ 116.202 018
CITY OF ALLEN, TEXAS
I' NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
1
55
NOTE S. LONG-TERM DEBT - continued
Certificates of Obligation
'
Annual debt service requirements to maturity for the Certificates of Obligation,
including interest of
$2,878,821 are as follows:
Governmental Activities
Fiscal Year Ending
September 30
Principal
Interest
Total
2006
243,450
243,450
'
2007
2008
190,000
200,000
243,450
233,825
433,450
433,825
2009
205,000
223,700
428,700
2010
220,000
213,325
433,325
2011-2015
2016-2020
1,290,000
1,685,000
904,753
614,564
2,194,753
2,299,564
2021-2024
1.710.000
201.754
1.911.754
Total
$ 5 500 0fI0
2 978 82
a 37a 8 7
Water and Sewer Revenue Bonds
Revenue bond debt service requirements to maturity, including interest of $7,872,513 are as follows:
Business -type Activities
Fiscal Year Ending
'
September 30
Principal
Interest
Total
2006
1,545,000
900,729
2,445,729
2007
1,580,000
862,757
2,442,757
2008
2009
1,575,000
1,035,000
789,358
709,408
2,364,358
1,744,408
2010
1,085,000
659,089
1,744,089
2011-2015
5,920,000
2,475,522
8,395,522
2016-2020
2021 -2025
4,600,000
2.395 000
1,157,864
317.786
5,757,864
2.712.786
Total
19.735 rN10
R ] fl72513
$ 27 fi07 573
'
Component Units
Sales Tax Revenue bond debt
service requirements to maturity, including interest of $3,015,904 are as
follows:
Governmental Activities
Fiscal Year Ending
September 30
Principal
Interest
Total
'
2006
445,000
396,451
841,451
2007
470,000
372,983
842,983
2008
495,000
348,220
843,220
2009
2010
520,000
555,000
321,900
294,000
841,900
849,000
2011-2015
3,240,000
1,044,462
4,284,462
2016-2017
2.330.000
237.888
2,567,888
'
Total
8 054(NI
075 904
17 070.9
1
55
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 5. LONG-TERM DEBT — continued
General Obligation Bonds
The City issues general obligation bonds to provide funds for the acquisition and construction of major
capital facilities and infrastructure. The City is required by ordinance to create from ad valorem tax
revenues a sinking fund sufficient to pay the current interest and principal installments as they become due.
The Debt Service Fund has $1,512,331 available to service the general obligation debt at September 30,
2005. There are a number of limitations and restrictions contained in the various general obligation bond
indentures. The City is in compliance with all significant limitations and restrictions at September 30, 2005.
A schedule of authorized but unissued direct General Obligation Bonds as of September 30, 2005, is as
follows:
Date of
Amount
Previously 2005
Team Body Authorization
Pumose
Authorized
Issued Issue
unissued
City of Allen 08-12-99
Fire Stn & Equip
$ 4,900,000
$ 3,565,000 $
$ 1,335,000
08-12-99
Streets
20,500,000
20,309,600
190,500
08-12-99
Drainage
1,500,000
1,365,000
135,000
08-12-99
Parks
22,000,000
20,089,000
1,911,000
11415412
Performing Ads Center
19500000
2786500
16313.500
Total
$69 4W 000
$ dA 115 Ono 8
Son v9s nnn
Debt Defeasance
On March 1, 2005, the City issued $32,330,000 in General Obligation Refunding Bonds with an average
Interest rate of 4.09 percent to (i) advance refund $32,170,000 of combined and outstanding General
Obligation Bonds Series 1996, 1998, 1999, 2000, and General Obligation and Improvement Bonds Series
2001 with an average interest rete of 5.10 percent and (ii) to pay the costs of issuance of the bonds. The
net proceeds were used to purchase U.S. Securities that were deposited in an irrevocable trust with an
escrow agent In sufficient amounts to provide for all future payments of the refunded debt. As a result, the
refunded debt is considered defeased and the liability for those bonds has been removed from the
Governmental Statement of Net Assets.
The City completed the advance refunding to reduce its total debt service payments over the next ten (17)
years by $1,607,308 and to obtain an economic gain (difference between the present values of the old and
new debt service payments) of $1,124,880.
In prior years, the City legally defeased certain outstanding general obligation and revenue bonds by
placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on
the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not
included in the City's financial statements.
56
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30.2005
NOTES. LONG-TERM DEBT—continued
Certificates of Obligedon
During 2005, the City issued $765,000 and $4,735,000 of Combination Tax and Golf Course Revenue
Certificates of Obligation Series 2004-B and Series 2004-A, respectively, to (i) acquire an existing golf
course and related facilities and personal property, (ii) to make initial improvements to the course, and (iii)
to pay the costs associated with the issuance of the certificates. The certificates constitute direct
obligations of the City payable as to both principal and interest from an annual ad valorem tax levied
against all taxable property in the City, within the limits prescribed by law, and are additionally payable from
and secured by a pledge of Net Revenues from the operation of the City's Golf Course Facilities. The City
has never defaulted in the payment of its general obligation indebtedness.
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 $228,047 at September 30, 2005 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, 2005 of $2,063,465 are adequate to meet the reserve requirements.
At September 30, 2005, restricted assets, which include Water and Sewer Revenue Bond Debt Service
and Reserve Funds, were as follows
Revenue bond debt service
$ 819,154
Revenue bond reserve fund
1,244,311
Utility deposits
1.193.551
$ 3.257.016
57
CITY OF ALLEN,TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTES. LONG-TERM DEBT—continued
Water and Sewer Revenue Bonds - continued
Retained earnings reserved for Water and Sewer revenue bond retirement is detailed as follows:
Restricted assets, revenue bond debt
Service and reserve funds $ 2,063,465
Accrued interest, payable from restricted assets ( 290,418)
Current maturities of revenue bonds,
payable from restricted assets ( 1.545.000)
Reserved for revenue bond principal and interest 228.047
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, 2005 was 3.2 times.
Capital Leases
The City acquired office equipment under various leases accounted for as capital leases. These leases
meet the criteria of a capital lease as defined by Statement of Financial Accounting Standards No. 13,
"Accounting for Leases", which defines a capital lease generally as one which transfers benefits and risks
of ownership to the lessee. As of September 30, 2005, the capitalized costs of the Governmental leased
property and Business -type leased property under capital leases were $566,812 and $296,790,
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, 2005 are as follows:
Total S 238646
58
Governmental Activities
Fiscal Year Ending
September 30
Principal
Interest
Total
2006
50,046
6,600
56,646
2007
50,038
3,700
53,738
2008
36.991
893
37.884
Total
$�3Z OZ4Z
$ 11 193
S 148.268
Business -type Activities
Fiscal Year Ending
September 30
Principal
Interest
Total
2006
98,731
10,034
108,765
2007
88,712
4,993
93,705
2008
36,063
1,490
37,553
2009
9,954
584
10,538
2010
5.186
_. 83
5,269
Total S 238646
58
CITY OF ALLEN, TEXAS
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 6. INTERFUND RECEIVABLES AND PAYABLES
The purpose of interfund receivables and payables is to record loans and transfers between funds. All
balances are expected to be settled within one year. Due to/Due from other funds at September 30, 2005
consisted of the following individual fund receivables and payables:
Fund Receivable Payable
General Capital Projects
General Fund $ 100,000 $
Grants and Special Revenue 55,000
Golf Course
Parks and Recreation 10,000
Grants and Special Revenue
General Capital Projects 55,000
Parks and Recreation
Golf Course 10,000
General Fund
General Capital Projects 100,000
NOTE 7. 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 2005 were as follows
Transfers Transfers
Fund In Out Puroose of Transfer
General Fund:
Water and Sewer $ 2,100,080 $ Operational
Solid Waste Services 30,024 Operational
Drainage Utility Fund 135,120 Operational
Golf Course
400,119
Operational
Non -Bond Capital Projects
280,107
Capital Projects
Parks & Rec Special Revenue
1,195,300
Operational
Grants & Special Revenue
41,648
Operational
Replacement Fund
85,000
Technology
Risk Management
153,070
Operational
Water and Sewer Fund:
General Fund
2,100,960
Operational
Solid Waste Fund
40,008
Operational
Non -Bond Capital Projects
6,872,228
Capital Projects
Risk Management
17,515
Operational
Solid Waste Services:
General Fund
30,024
Operational
Water and Sewer Fund
40,008
Operational
Grants and Special Revenue
21,193
Operational
Risk Management
1,735
Operational
CITY OF ALLEN, TEXAS
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 7. INTERFUND TRANSFERS - continued
Transfers Transfers
Fund In Out
Drainage Utility:
General Fund 135,120
Risk Management 2,080
Non -Bond Capital Projects 50,000
Replacement Fund
Golf Course Fund:
General Fund
Parks and Rao Special Revenue
Drainage Improvements:
Non -bond Capital Projects
Certificate of Obligations:
Non -bond Capital Projects
Non -Bond Capital Projects:
General Fund
Water and Sewer
Drainage Utility
Drainage Improvements
Certificate of Obligations
Antenna Rental
Antenna Rental Fund:
Non -Bond Capital Projects
Parks and Rao Special Revenue
Arts Alliance Fund:
Parks and Rec Special Revenue
Parks & Rec Special Revenue:
General Fund
Antenna Rental
Arts Alliance Fund
Golf Course Fund
Grants 8 Special Revenue:
General fund
Solid Waste
Replacement Fund:
General fund
Drainage Utility
Risk Management:
General fund
Water and Sewer
Solid Waste
Drainage Utility
19,343
400,119
10,000
545
200,000
280,107
6,872,228
50,000
545
200,000
50,000
50,000
155,000
701
1,195,300
155,000
701
10,000
41,548
21,193
85,000
19,343
153,070
17,515
1,735
2.080
11 881 59 $
11 981596
60
Pumose of Transfer
Operational and Capital Projects
Operational
Capital Projects
Technology
Capital Projects
Operational
Capital Projects
Capital Projects
Capital Projects
Capital Projects
Capital Projects
Capital Projects
Capital Projects
Operational
Capital Projects
Capital Projects
Capital Projects
Operational
Operational
Operational
Operational
Operational
Operational
Technology
Technology
Operational
Operational
Operational
Operational
CITY OF ALLEN, TEXAS
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30.2005
NOTES. RETIREMENT PLAN
Plan Description
The City provides pension benefits for all of its full-time employees through a non-traditional, joint
contributory, hybrid defined benefit plan in the state-wide Texas Municipal Retirement System (TMRS), 1
of 794 administered by TMRS, an agent multiple -employer public employee retirement system.
Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the City -
financed monetary credits, with interest. At the date the plan began, the City granted monetary credits
for service rendered before the plan began of a theoretical amount equal to two times what would have
been contributed by the employee, with interest, prior to establishment of the plan. Monetary credits for
service since the plan began are a percentage (100%, 150%, or 200%) of the employee's accumulated
contributions. In addition, the City can grant, as often as annually, another type of monetary credit
referred to as an updated service credit which is a theoretical amount which, when added to the
employee's accumulated contributions and the monetary credits for service since the plan began, would
be the total monetary credits and employee contributions accumulated with interest if the current
employee contribution rate and City matching percent had always been in existence and if the
employee's salary had always been the average of his salary in the last three years that are one year
before the effective date. At retirement, the benefit is calculated as if the sum of the employee's
accumulated contributions with interest and the employer -financed monetary credits with interest were
used to purchase an annuity.
Members can retire at ages 60 and above with 5 or more years of service or with 20 years of service
regardless of age. A member is vested after 5 years. The plan provisions are adopted by the governing
body of the City, within the options available in the state statutes governing TMRS and within the
actuarial constraints also in the statutes.
The pension plan does not issue separate reports on the pension plan. However, TMRS does issue a
publicly available report that includes financial statements and supplementary information for the plan as
a whole, but not for individual employers. That report can be obtained by writing to: Texas Municipal
Retirement System, P O. Box 149153, Austin, Texas 78714-9153.
Contributions
The contribution rate for the employees is 7%, and the City matching ratio is currently 2 to 1, both as
adopted by the governing body of the City. Under the state law governing TMRS, the actuary annually
determines the City contribution rate. This rate consists of the normal cost contribution rate and the prior
service contribution rale, both of which are calculated to be a level percent of payroll from year to year
The normal cost contribution rate finances the currently accruing monetary credits due to the City
matching percent, which are the obligation of the City as of an employee's retirement date, not at the time
the employee's contributions are made. The normal cost contribution rate is the actuarially determined
percent of payroll necessary to satisfy the obligation of the City to each employee at the time his/her
retirement becomes effective. The prior service contribution rate amortizes the unfunded (over funded)
actuarial liability (asset) over the remainder of the plan's 25 -year amortization period. The unit credit
actuarial cost method is used for determining the City contribution rate. Both the employees and the City
make contributions monthly. Since the City needs to know its contribution rate in advance for budgetary
purposes, there is a one-year delay between the actuarial valuation that is the basis for the rate and the
calendar year when the rate goes into effect. (i.e. December 31, 2004 valuation is effective for rates
beginning January 2006).
61
CITY OF ALLEN, TEXAS
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTES. RETIREMENT PLAN -continued
Contributions - continued
Schedule of Actuarial Liabilities and Funding Progress
Actuarial Valuation Date
2004
2003
2002
2001
2000
1999
of Payroll
Actuarial value of assets (1)
$30,154,132
$26,378,242
$23,100,250
$19,247,568
$16,375,900
$14,193,181
Actuarial accrued liability (1)
36,451,050
33,315,146
28,115,556
24,411,638
22,396,483
17,723,052
Percentage funded
83%
79%
82%
79%
73%
80 %
Unfunded (Over -funded) Actuarial
None
None
None '
3.5%
None
None
Accrued Liability (UAAL)
6,296,918
6,936,904
5,015,406
5,164,070
6,020,583
3,529,871
Annual covered payroll (2)
21,251,268
18,963,358
17,651,515
14,778,443
11,938,005
10,994,145
UAAL as a percentage of
covered payroll
30%
37%
28%
35%
50%
32%
Net Pension Obligation (NPO)
at the beginning of period
Annual pension cost (1):
Annual Required Contribution (ARC)
2,307,968
1,943,352
1,868,305
1,756,583
1,315,729
1,218,421
Interest on NPO
Adjustment to ARC
Contributions made (2)
2,307,968
1,943,352
1,868,305
1,756,583
1,315,729
1,218,421
Increase in NPO
NPO at the end of the period
Annual City TMR pension cost and related information for the last three years is as follows:
Annual required contribution (ARC)
Actual contribution
Net pension obligation
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Actuarial Assumptions:
Investment Rate of Return
Projected Salary Increases
Includes Inflation At
Cost of Living Adjustments
2005 2004
$ 2,307,968 $ 1,943,352
2.307.968 1.943.352
2003
$ 1,868,305 ,
1.868.305
Unit Credit
Unit Credit
Unit Credit
Level Percent
Level Percent
Level Percent
of Payroll
of Payroll
of Payroll
25 Years — Open Period
25 Years — Open Period
25 Years — Open Period t
Amortized Cost
Amortized Cost
Amortized Cost
(to accurately reflect
(to accurately reflect
(to accurately reflect
the requirements of
the requirements of
the requirements of
,
GASB stmt, No. 25,
GASB stmt, No. 25,
GASB stmt, No. 25,
paragraphs 36e and 138)
paragraphs 36e and 138)
paragraphs 36e and 138)
7%
7%
8%
None
None
None '
3.5%
None
None
None
None
None
62
I
CITY OF ALLEN, TEXAS
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE 9. WATER AND SEWER CONTRACTS
In 1972, the City entered into a forty -year contract with the North Texas Municipal Water District (District) for
the purchase of water. Under the terms of this contract, the City is obligated to make a minimum annual
payment (adjusted annually) in return for a minimum volume of gallons of water per year. During 1998, the
City was annexed into the North Texas Municipal Water District, which guaranteed the City a minimum
' volume of water. During the year ended September 30, 2005, the cost of water purchased under this
contract was $4,296,442.
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 2005, the cost for transportation, treatment and disposal of sewage and other wastes
was $3,328,345.
NOTE 10. DEFERRED COMPENSATION PLAN
iAs 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, 2005, the deferred
compensation investments are not reported in the City's financial statements.
NOTE 11. RISK MANAGEMENT
The City self -insures its employees and their dependents for medical and dental care up to certain amounts
per insured person and in the aggregate. At September 30, 2005, the annual limitation on City health claim
expense was $75,000 per person. A commercial insurance company re -insures the City for individual
' claims in excess of $75,000 up to a lifetime maximum of $2,000,000. The maximum claim for all
employees, in the aggregate, is based upon a formula. All claims and maximums are calculated for a plan
year ending each December 31.
There has been no significant reduction in insurance coverage in prior fiscal years and the amount of claim
settlements has not exceeded insurance coverage for the past five fiscal years.
Accrued liabilities include provisions for claims reported and claims incurred but not reported. The
provision for reported claims is determined by estimating the amount that will ultimately be paid to each
claimant. The provision for claims incurred but not yet reported is estimated based on the City's
experience since the inception of the program.
Premium payments are reported as interfund services provided and used and, accordingly, are treated as
operating revenues of the Risk Management Fund and operating expenditures/expenses of the
participating funds.
i' 63
CITY OF ALLEN, TEXAS
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2005
NOTE11. RISK MANAGEMENT -continued
Changes in the medical and dental claims liability during fiscal years ended September 30, 2001 through
2005 were as follows:
Current Year
Claims and
Balance at
Year Ending
Beginning of
September 30,
Fiscal Year
2001
$ 272,791
2002
307,765
2003
303,246
2004
362,020
2005
424,616
Current Year
Claims and
Balance at
Changes in
Claim
End of
Estimates
Payments
Fiscal Year
$ 2,414,770
$ 2,379,796
$ 307,765
2,467,587
2,472,106
303,246
3,011,365
2,952,591
362,020
3,827,089
3,764,493
424,616
4,506,755
4,404,086
527,285
The City is exposed to varying degrees of risk and loss from liability claims, auto and vehicle liability,
mechanical breakdown of equipment, and loss of property due to natural disasters and vandalism. To
cover this risk, the City participates in the Texas Municipal League Joint Self -Insurance Fund (TMLIF) to
provide general liability, workers' compensation claims and property insurance. The City, along with other
participating entities, contributes annual amounts determined by TMLIF management. As claims arise they
are submitted to and paid by TMLIF. During 2005, the City contributed $947,352 to the fund for property,
general liability, and workers compensation.
NOTE 12. COMMITMENTS AND CONTINGENT LIABILITIES
Federal Grants
The City participates in a number of State and Federally 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 entered into an economic development agreement whereby it has agreed to pay a grant to a
developer in return for the developer designing, constructing, operating, and managing a retail shopping
center. The grant is calculated at $22 per gross leasable square feet up to a maximum of 458,000 square
feet. The grant is payable solely from sales tax receipts imposed by the City, AEDC, and ACDC, attributed
only to sales by retailers at the retail shopping center for a period not to exceed 15 years from the date of
certificate of occupancy. If the developer has not completed a minimum of 418,000 square feet within six
years after the commencement of construction, then the City is no longer obligated to make any future grant
payments. The developer had completed construction of 346,590 square feet of the retail shopping center
as of September 30, 2005.
M
REQUIRED SUPPLEMENTARY
INFORMATION
aSSVeGT * lxrEc
C+ry OF AULti.
CIN OF ALLEN, TEXAS EXHIBIT A-1
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2005
EXPENDITURES
Current:
General government
Public safety
Publicworks
Culture and recreation
Community development
Total expenditures
Excess (deficiency) of revenues
over expenditures
OTHER FINANCING SOURCES (USES)
Proceeds from capital leases
Transfers from other funds
Transfers to other funds
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
7,022,669
6,94$625
6,785,161
163,464
VARIANCE WITH
16,150,009
BUDGETED AMOUNTS
(40,170)
FINAL BUDGET -
3,032,476
2,926,473
106,003
6,425,984
POSITIVE
6,244,521
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES
34,431,609
34,161,392
Ad valorem taxes, penalties and interest
$ 17,400,418 $
17,496,055 $
17,473,438
$ (22,627)
Franchise taxes
3,647,545
3,655,595
3,976,385
322,790
Municipal sales tax
8,096,000
7,784,360
7,749,679
(34,681)
Licenses, permits and fees
1,307,450
1,319,240
1,402,565
83,325
Charge for services
1,225,382
1,371,882
1,366,248
14,366
Court fines
1,541,689
1,483,600
1,669,687
186,087
Gifts and contributions
3,262
76,790
73,528
Investment earnings
277,495
288,529
180,172
(108,357)
Miscellaneous
372,410
592,269
679,165
86,896
Total revenues
33,868,389
33,994,802
34,596,129
601,327
EXPENDITURES
Current:
General government
Public safety
Publicworks
Culture and recreation
Community development
Total expenditures
Excess (deficiency) of revenues
over expenditures
OTHER FINANCING SOURCES (USES)
Proceeds from capital leases
Transfers from other funds
Transfers to other funds
Total other financing sources (uses)
NET CHANGE IN FUND BALANCE
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
7,022,669
6,94$625
6,785,161
163,464
16,201,661
16,150,009
16,190,179
(40,170)
3,078,409
3,032,476
2,926,473
106,003
6,425,984
6,315,766
6,244,521
71,245
1,702,886
1,714,516
1,693,019
21,497
34,431,609
34,161,392
33,839,353
322,039
(563,220)
(166,590)
756,776
923,366
140,863
140,863
2,344,115
2,338,115
2,266,104
(72,011)
(1,780,895)
(1,704,842)
(2,155,144)
(450,302)
563,220
633,273
251,823
(381,450)
466,683
1,008,599
541,916
8,426,576
8,426,576
8,426,576
$ 8,426,576
$ 8,893,259
$ 9,435,175
$ 541,916
65
CITY OF ALLEN, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
YEAR ENDED SEPTEMBER 30, 2005
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 total budgeted expenditures.
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.
Fm
COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
��SpECT � �~rFc
x Ria
ctrY OF PU
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 and interest from governmental resources.
MAJOR SPECIAL REVENUE FUND
The Special Revenue Funds account for the proceeds of specific revenue sources (other than expendable
trust or capital projects) that are legally restricted to expenditures for specific purposes. The City classifies
the following Special Revenue Fund as a major fund:
Facilities Agreement Fund — To account for funds received from builders and developers used on
specific facility agreements such as neighborhood parks, paving and assessments in new developments.
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 resources used for the acquisition and/or construction
of capital facilities by the City, except those financed by proprietary and trust funds and not accounted for
by the other capital project funds.
Street Improvements Fund — To account for the financing and construction of improvements to and the
extension of the City's streets. The construction is financed primarily by the proceeds of general
obligation bonds and interest on investments
Park Improvements Fund — To account for the financing, improvements, and enlargements of the City's
parks. These improvements and enlargements are funded by general obligation bond proceeds and
interest on investments.
Library Fund — To account for the financing, construction and furnishing of library facilities with the
proceeds of general obligation bonds and interest on investments.
General Obligation Bond Fund — To account for financing, acquisitions, and construction of
improvements to City facilities and infrastructure not accounted for by other bond funds.
rYJ
CITY OF ALLEN, TEXAS
GENERALFUND
COMPARATIVE BALANCE SHEETS
SEPTEMBER 30, 2005 AND 2004
ASSETS
Cash and cash equivalents
Investments
Receivables:
Ad valorem taxes (net of allo%vances for uncollectibles
of $173,676 in 2005 and $133,779 in 2004)
Sales taxes
Accrued interest
Other
Prepaid items
TOTAL ASSETS
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable
Accrued liabilities
Due to other funds
Deferred revenue
TOTAL LIABILITIES
FUND BALANCES
Reserved for prepaid items
Unreserved, undesignated
TOTAL FUND BALANCES
TOTAL LIABILITIES AND FUND BALANCE
EXHIBIT B-1
2005 2004
$ 903,616 $
2,841,150
8,877,403
6,265,000 '
262,202
201,622
1,369,666
'
1,277,546
27,097
27,492
529,976
601,506
7,796
4,713
,
7,796
$ 11,977,756 $
11,219,029
8,421,863
$ 1,083,165 $
1,180,470
1,097,214
910,361
100,000
500,000
262,202
201,622
2,542,581
2,792,453
7,796
4,713
9,427,379
8,421,863
9,435,175
8,426,576
$ 11,977,756 $
11,219,029
CITY OF ALLEN, TEXAS EXHIBIT B-2
GENERALFUND
COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEARS ENDED SEPTEMBER 30, 2005 AND 2004
2005 2004
REVENUES
Ad valorem taxes, penalties and interest
Franchise taxes
Municipal sales tax
Licenses, permits and fees
Charge for services
Court fines
Gifts and contributions
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 AND (USES)
Proceeds from capital lease obligation
Transfers from other funds
Transfers to other funds
Total other financing uses
NET CHANGE IN FUND BALANCES
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
!]
$ 17,473,438 $
16,058,384
3,978,385
3,620,703
7,749,679
7,064,601
1,402,565
1,334,767
1,386,248
1,254,012
1,669,687
1,470,473
76,790
72,069
180,172
252,841
679,165
691,736
7,432,287
34,596,129
31,819,586
6,785,161
5,203,277
16,190,179
14,692,247
2,926,473
2,777,589
6,244,521
5,487,172
1,693,019
1,559,050
587,209
147.107
Rk)fkA]kbir�IrZ1.'kx:I.il
756,776
1,365,935
140,863
2,266,104
2,214,073
(2,155,144)
(2,585,719)
251,823
(371,646)
1,008,599
994,289
8,426,576
7,432,287
$ 9,435,175 $
8,426,576
CITY OF ALLEN, TEXAS EXHIBIT B-3
DEBT SERVICE FUND
COMPARATIVE BALANCE SHEETS
SEPTEMBER 30, 2005 AND 2004
ASSETS:
Cash and rash equivalents
Investments
Receivables:
Ad valorem taxes (net of allowances for uncollectibles
of 103,600 in 2005 and $82,150 in 2004)
Accrued interest receivable
Other receivables
Total assets
LIABILITIES AND FUND BALANCES:
LIABILITIES
Deferred revenue
Total liabilities
FUND BALANCE
Reserved for debt service
TOTAL LIABILITIES AND FUND BALANCE
70
2005 2004
$ 1,510,128 $ 147,139
1,385,000
151,798 112,461
7,613
2,203 1,505
$ 1,664,129 $ 1,653,718
$ 151,798 $ 112,461
151,798 112,461
1,512,331 1,541,257
$ 1,664,129 $ 1,653,718
CITY OF ALLEN, TEXAS EXHIBIT B4
DEBT SERVICE FUND
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEARS ENDED SEPTEMBER 30, 2005 AND 2004
REVENUES
Ad valorem taxes
Investment earnings
Total revenues
EXPENDITURES
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over expenditures
OTHER FINANCING SOURCES AND (USES)
Proceeds from sale of refunding bonds
Premium on issuance of bonds
Payment to refund bond escrow agent
Total other financing sources
NET CHANGE IN FUND BALANCES
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
71
2005
2004
$ 9,841,387
9,023,530
138,100
80,423
9,979,487
9,103,953
4,563,251
5,110,000
5,564,814
3,830,366
10,128,065
8,940,366
(148,578)
163,587
32,330,000
1,567,354
(33,777,702)
119,652
(28,926)
163,587
1,541,257
1,377,670
$ 1,512,331 $
1,541,257
CITY OF ALLEN, TEXAS EXHIBIT B-5
DEBT SERVICE FUND
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2005
REVENUES
Ad valorem taxes
Investment earnings
Total revenues
EXPENDITURES
Principal refirement
Interest and fiscal charges
Total expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES AND (USES)
Proceeds from refunding bonds
Premium on issuance of bonds
Payment to refund bond escrow agent
Total other financing sources
NET CHANGE IN FUND BALANCES
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
$ 9,843,610 $
9,853,510 $
9,841,387 $
(12,123)
109,854
152,606
138,100
(14,506)
9,953,464
10,006,116
9,979,487
(26,629)
119,652
119,652
4,433,525
4,563,251
4,563,251
244,926
5,713,159
5,716,717
5,564,814
151,903
$ 1,348,037 $
1,267,405
10,146,684
10,279,968
10,128,065
151,903
(193,220) (273,852) (148,578) 125,274
72
32,330,000
32,330,000
1,567,354
1,567,354
(33,777,702)
(33,777,702)
119,652
119,652
(193,220)
(273,852)
(28,926)
244,926
1,541,257
1,541,257
1,541,257
$ 1,348,037 $
1,267,405
$ 1,512,331 $
244,926
72
CITY OF ALLEN, TEXAS EXHIBIT B-6
FACILITIES AGREEMENT FUND
COMPARATIVE BALANCE SHEETS
SEPTEMBER 30, 2005 AND 2004
ASSETS
Cash and rash equivalents
Investments
Accrued interest receivable
Total assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
Retainage payable
Deferred revenue
Total liabilities
FUND BALANCES
Reserved for encumbrances
Unreserved, undesignated
Total fund balances
Total liabilities and fund balances
73
2005 2004
$ 1,335,754 $
2,779,495
5,454,581
3,991,923
16,649
12,722
$ 6,806,984 $
6,784,140
$ 127,161 $
30,532
4,169,347 4,564,035
4,327,040 4,564,035
460,759 90,811
2,019,185 2,129,294
2,479,944 2,220,105
$ 6,806,984 $ 6,784,140
CITY OF ALLEN, TEXAS EXHIBIT B-7
FACILITIES AGREEMENT FUND
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEARS ENDED SEPTEMBER 30, 2005 AND 2004
74
2005
2004
REVENUES
Gifts and contributions
$ 1,002,509 $
186,734
Investment earnings
84,839
103,238
Intergovernmental
175,000
Total revenues
1,262,348
289,972
EXPENDITURES
Capital outlay
1,002,509
186,734
Total expenditures
1,002,509
186,734
NET CHANGE IN FUND BALANCES
259,839
103,238
FUND BALANCES, BEGINNING OF YEAR
2,220,105
2,116,867
FUND BALANCES, END OF YEAR
$ 2,479,944 $
2,220,105
74
CITY OF ALLEN, TEXAS EXHIBIT B-8
GENERAL CAPITAL PROJECTS FUND
COMPARATIVE BALANCE SHEETS
SEPTEMBER 30, 2005 AND 2004
ASSETS
Cash and cash equivalents
Investments
Accrued interest receivable
Special assessments receivable
Due from other funds
Total assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
Retainage payable
Accrued liabilities
Total liabilities
FUND BALANCES
Reserved for encumbrances
Unreserved, designated
Total fund balances
Total liabilities and fund balances
75
2005 2004
$ 1,844,932 $
9,951,632
7,375,601
7,030,673
22,513
22,406
187,557
208,796
155,000
1,000,000
$ 9,585,603 $
18,213,507
$ 935,437 $ 107,927
237,864 76,504
589,150 385,915
1,762,451 570,346
4,212,487
3,610,665 17,643,161
7,823,152 17,643,161
$ 9,585,603 $ 18,213,507
CITY OF ALLEN, TEXAS EXHIBIT B-9
GENERAL CAPITAL PROJECTS FUND
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEARS ENDED SEPTEMBER 30, 2005 AND 2004
REVENUES
Charges for services
Intergovernmental
Investment earnings
Gifts and contributions
Miscellaneous
Total revenues
EXPENDITURES
General government
Capital outlay
Total expenditures
Deficiency of revenues over expenditures
OTHER FINANCING SOURCES (USES)
Transfers from other funds
Transfers to other funds
Total other financing sources (uses)
NET CHANGE IN FUND BALANCES
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
W
2005 2004
$ 795,898 $
818,873
1,653,715
2,030,971
224,377
317,018
23,326
120,000
251,075
88,629
2,948,391
3,375,491
229,683
323,535
6,247,141
5,179,894
6,476,824
5,503,429
(3,528,433)
(2,127,938)
580,652
5,615,105
(6,872,228)
(6,291,576)
5,615,105
(9,820,009)
3,487,167
17,643,161
14,155,994
$ 7,823,152 $
17,643,161
CITY OF ALLEN, TEXAS EXHIBIT B-10
STREET IMPROVEMENTS FUND
COMPARATIVE BALANCE SHEETS
SEPTEMBER 30, 2005 AND 2004
ASSETS
Cash and cash equivalents
Investments
Accounts receivable
Accrued interest receivable
Total assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
Retainage payable
Total liabilities
FUND BALANCES
Reserved for encumbrances
Unreserved, undesignated
Total fund balances
Total liabilities and fund balances
77
2005 2004
$ 399,278 $
2,379,294
844,658
2,000,000
15,909
2,578
6,374
$ 1,262,423 $
4,385,668
$ 16,913 $ 269,884
119,598 77,341
136,511 347,225
396,744 1,016,872
729,168 3,021,571
1,125,912 4,038,443
$ 1,262,423 $ 4,385,668
CITY OF ALLEN, TEXAS EXHIBIT B-11
STREET IMPROVEMENTS FUND
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEARS ENDED SEPTEMBER 30, 2005 AND 2004
REVENUES
Investment earnings
Total revenues
EXPENDITURES
Public works
Capital outlay
Total expenditures
Deficiency of revenues over expenditures
OTHER FINANCING SOURCES
Proceeds from sale of bonds
Total other financing sources
NET CHANGE IN FUND BALANCES
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
78
2005 2004
$ 65,833 $
118,312
65,833
118,312
14,820
13,773
2,963,544
4,648,150
2,978,364
4,661,923
(2,912,531)
(4,543,611)
2,549,500
2,549,500
(2,912,531)
(1,994,111)
4,038,443
6,032,554
$ 1,125,912 $
4,038,443
CITY OF ALLEN, TEXAS EXHIBIT B-12
PARKIMPROVEMENTSFUND
COMPARATIVE BALANCE SHEETS
SEPTEMBER 30, 2005 AND 2004
ASSETS
Cash and cash equivalents
Investments
Accounts receivable
Accrued interest receivable
Total assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
Retainage payable
Total liabilities
FUND BALANCES
Reserved for encumbrances
Unreserved, undesignated
Total fund balances
Total liabilities and fund balances
79
2005 2004
$ 647,119 $
2,227,671
2,080,887
3,355,000
1,980
6,352
15,294
$ 2,934,358 $
5,599,945
$ 58,283 $ 455,055
157,588 207,942
215,871 662,997
263,515 1,215,557
2,454,972 3,721,391
2,718,487 4,936,948
$ 2,934,358 $ 5,599,945
CITY OF ALLEN, TEXAS
PARKIMPROVEMENTSFUND
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEARS ENDED SEPTEMBER 30, 2005 AND 2004
REVENUES
Investment earnings
Miscellaneous revenue
Total revenues
EXPENDITURES
Culture and recreation
Capital outlay
Total expenditures
Deficiency of revenues over expenditures
OTHER FINANCING SOURCES (USES)
Transfers to other funds
Proceeds from sale of bonds
Total other financing sources
NET CHANGE IN FUND BALANCES
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
T
EXHIBIT B-13
2005 2004
$ 72,220 $ 125,169
60
72,280
125,169
13,201
14,827
2,277,540
4,474,390
2,290,741
4,489,217
(2,218,461)
(4,364,048)
(54,000)
1,559,000
1,505,000
(2,218,461)
(2,859,048)
4,936,948
7,795,996
$ 2,718,487 $
4,936,948
CITY OF ALLEN, TEXAS EXHIBIT B-14
LIBRARY FUND
COMPARATIVE BALANCE SHEETS
SEPTEMBER 30, 2005 AND 2004
81
2005
2004
ASSETS
Cash and cash equivalents
$
102,334
$
2,869,292
Total assets
$
102,334
$
2,869,292
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
$
8,577
$
407,270
Retainage payable
28,881
515,854
Total liabilities
37,458
923,124
FUND BALANCES
Reserved for encumbrances
20,745
1,822,719
Unreserved, undesignated
44,131
123,449
Total fund balances
64,876
1,946,168
Total liabilities and fund balances
$
102,334
$
2,869,292
81
CITY OF ALLEN, TEXAS EXHIBIT B-15
LIBRARY FUND
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEARS ENDED SEPTEMBER 30, 2005 AND 2004
REVENUES
Investment earnings
Total revenues
EXPENDITURES
Capital outlay
Total expenditures
NET CHANGE IN FUND BALANCES
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
9F
2005 2004
$ 27,349 $ 79,728
27,349 79,728
1,908,641 5,302,416
1,908,641 5,302,416
(1,881,292) (5,222,688)
1,946,168 7,168,856
$ 64,876 $ 1,946,168
CITY OF ALLEN, TEXAS EXHIBIT B-16
GENERAL OBLIGATION BOND FUND
COMPARATIVE BALANCE SHEETS
SEPTEMBER 30, 2005 AND 2004
ASSETS
Cash and cash equivalents
Investments
Accrued interest receivable
Total assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
Retainage payable
Total liabilities
FUND BALANCES
Reserved for encumbrances
Unreserved, undesignated
Total fund balances
Total liabilities and fund balances
83
2005 2004
$ 1,016,447 $ 1,375,591
2,710,768 5,000,000
8,274 15,934
$ 3,735,489 $ 6,391,525
$ 523,291 $
286,208
809,499
548,688
2,377,302 6,391,525
2,925,990 6,391,525
$ 3,735,489 $ 6,391,525
CITY OF ALLEN, TEXAS
EXHIBIT B-17 '
GENERAL OBLIGATION BOND FUND '
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
SEPTEMBER 30, 2005 AND 2004 '
REVENUES
Investment earnings
Total revenues
EXPENDITURES
General government
Capital outlay
Total expenditures
Excess of revenues over expenditures
OTHER FINANCING SOURCES (USES)
Proceeds from sale of bonds
Transfers to other funds
Total other financing sources
NET CHANGE IN FUND BALANCES
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
84
2005 2004
$ 106,536 $ 31,294
106,536 31,294
540,369 26,269
3,031,702
3,572,071 26,269
(3,465,535) 5,025
6,786,500
(400,000)
6,386,500
(3,465,535) 6,391,525
6,391,525
$ 2,925,990 $ 6,391,525
NON -MAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
The Special Revenue Funds account for the proceeds of specific revenue sources (other than expendable
trust or capital projects) that are legally restricted to expenditures for specific purposes. Non -major Special
Revenue Funds are as follows:
Antenna Rental Fund — To account for funds received and expended for capital items for the City.
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.
Allen Arts Alliance Fund — To account for funds received and expended to promote, nurture and
support the arts in the City of Allen.
Grants and Special Revenue Fund — To account for monies received from other governmental
agencies that have restricted legal requirements and multi-year budgets.
Parks and Recreation Fund — To account for the provision of recreation services to the residents of the
City, account for the operations and maintenance of the City's leisure and competitive swimming pools
and to account for funds received and expended for the City of Allen swim team activities.
Library Acquisition Fund — To account for funds received and expended for the acquisition of library
books and other resources.
Park Dedication Fund — To account for funds received and expended for the acquisition of additional
park land and for the development of neighborhood parks.
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 non -major funds:
Certificates of Obligation Fund — To account for the acquisition of Chase Oaks Golf Course, related
facilities, personal property and improvements to the course.
Public Safety Fire Fund — To account for the financing of construction and renovation of fire stations
and the acquisition of fire fighting equipment General fund revenues, general obligation bond proceeds
and interest on investments are the sources of financing for building renovation and equipment
purchases.
Public Safety Police Fund — To account for the financing of construction and renovation to the Police
and Court Building. The construction is financed primarily by the proceeds of general obligation bonds
and interest on investments.
Drainage Improvements Fund — To account for the financing and construction of improvements to and
the extension of the City's drainage system. The construction is financed primarily by the proceeds of
general obligation bonds and interest on investments.
85
CITY OF ALLEN, TEXAS
NON -MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
SEPTEMBER 30, 2005
86
GRANTS
HOTEL
ALLEN
AND
PARKS
ANTENNA
OCCUPANCY
ASSET
ARTS
SPECIAL
AND
RENTAL
TAX
FORFEITURE
ALLIANCE
REVENUE
RECREATION
ASSETS
Cash and rash equivalents
$
118,575
$ 109,764 $
28,066
$ 3,750
$
132,889
$ 306,473
Investments
Accounts receivable
32,895
75.666
4.731
TOTAL ASSETS
$
118,575
$ 142,659 $
28,066
$ 3,750
$
208,555
$ 311,204
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
$
$ 29,787 $
$ 3,750
$
16,292
$ 47,296
Retainage payable
21,321
Acaued liabilities
1,826
8,245
73,718
Due to other funds
55,000
10,000
Deferred revenue
13.907
TOTAL LIABILITIES
29,787
1,826
3,750
114,765
131.014
FUND BALANCES
Reserved for encumbrances
Unreserved
118,575
112,872
26,240
93.790
180,190
TOTAL FUND BALANCES
118,575
112,872
26,240
93,790
180,190
TOTAL LIABILITIES AND FUND BALANCES$
118575
E 142,659 $
28,066
$ 3.750
E
208.555
$ 311,204
86
EXHIBIT C-1
83,789
65,000
13.907
16,441
CAPITAL PROJECTS
218,721
3,748
222,469
230,110
1,480 686
37,118
2,279,583
230,110
1,699,409
40,866
2502,052
TOTAL
1,699,409 $
57,307 $ $ E
CERTIFICATES
PUBLIC
PUBLIC
NOMI M OR
LIBRARY
PARK
OF
SAFETY
SAFETY
DRAINAGE
GOVERNMENTAL
ACQUISITION
DEDICATION
OBLIGATION
FIRE
POLICE
IMPROVEMENTS
FUNDS
$ 230,110
$ 763,508
$ 57,307
$
$
$
$ 1,750,442
933,053
933,053
2,848
116,140
$ 230,110
$ 1,699,409
$ 57,307
$
$
E
$ 2,799,635
$
$
$
$
$
$
$ 97,125
16,401
37,762
83,789
65,000
13.907
87
16,441
297,583
218,721
3,748
222,469
230,110
1,480 686
37,118
2,279,583
230,110
1,699,409
40,866
2502,052
$ 230,110 $
1,699,409 $
57,307 $ $ E
$ 2,799,635
87
CITY OF ALLEN, TEXAS
NON -MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED SEPTEMBER 30 2005
Z
GRANTS
HOTEL
ALLEN
AND
PARKS
ANTENNA
OCCUPANCY
ASSET
ARTS
SPECIAL
AND
RENTAL
TAX
FORFEITURE
ALLIANCE
REVENUE
RECREATION
REVENUES
Franchise taxes
$
$
$
$ $
42,635
$
Licenses, permits, and fees
Courtfines
94,819
Hotel/motel taxes
346,753
Recreation fess
1,931,423
Gifts and contributions
62,850
Intergovernmental
1,676,477
Investment earnings
4,770
2,625
481
187
11,242
5,658
Miscellaneous
270,345
63,599
106,331
Total revenues
275,115
349,378
64,080
187
1.825,173
2,106.262
EXPENDITURES
General govemment
94,579
Public safety
48,187
635,788
Public works
8,133
47,378
Culture and recreation
112,112
307,575
34,982
3,466,078
Community development
144,960
Capital outlay
865,822
Total expenditures
112,112
307,575
48,187
6,133
1.623,509
3,466,078
Excess (deficiency) of revenues over
expenditures
163,003
41,803
15,893
(7,946)
1,664
(1,359,816)
OTHER FINANCING SOURCES (USES)
Proceeds from sale of bonds
Tmnsfers from other funds
62,741
1,351,001
Transfers to other funds
(205,000)
(701)
(10.000)
Total other financing sources (uses)
(205,000)
(701)
62.741
1,341,001
NET CHANGE IN FUND BALANCES
(41,997)
41,803
15,893
(8,647)
64,405
(18,815)
FUND BALANCES, BEGINNING OF YEAR 160.572
71 069
10.347
8.647
29.385
199,005
FUND BALANCES, END OF YEAR
$ 118,575
$ 112,872
$ 26,240
$ $
93,790
$ 180,190
Z
ti
CAPITAL PROJECTS
EXHIBIT C-2
16,306 (275,884) (5,259,134) (337,810) (12,713) (885,483) (7,900,117)
5,500,000
5,50.000
TOTAL
1,413,742
(200,000)
CERTIFICATES
(416,246)
'
NON -MAJOR
(545)
LIBRARY
PARK
OF
PUBLIC SAFETY
PUBLIC SAFETY
DRAINAGE
GOVERNMENTAL
213,804 1,975,293
'
ACQUISITION
DEDICATION
OBLIGATION
FIRE
POLICE
IMPROVEMENTS
FUNDS
1
$ $
$
$
$
$ $
42,635
215,430
215,430
94,819
346,763
1,931,423
10,237
73,087
1,676,477
'
6,069
30,922
2,849
11,232
76.035
6,345
446,620
16,306
246,352
6,345
2,849
11,232
4,903,279
20,000
82,258
196,837
683,975
I
422
453
56,386
3,920,747
144,960
502,236
5,183,221
340,237
12,713
896,262
7,800,491
522,236
5,265,479
340,659
12,713
896,715
12,803,396
16,306 (275,884) (5,259,134) (337,810) (12,713) (885,483) (7,900,117)
89
5,500,000
5,50.000
1,413,742
(200,000)
(545)
(416,246)
'
5,300,000
(545)
6,497,496
16,306 (275,884)
40,888 (337,810)
(12,713) (886,028)
(1,402,621)
213,804 1,975,293
337,810
12,713 8W,028
3,904,673
$ 230,110 $ 1,699,409
$ 40.8% $ E
$
E 2,502,052
1
89
aOSVeCT
* R/a
A
m
x
n
r
CITY OF Albs•
11
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 ureter 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.
1 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.
C
91
it
CITY OF ALLEN, TEXAS
EXHIBIT D-1
WATER AND SEWER ENTERPRISE FUND
COMPARATIVE STATEMENTS OF NET ASSETS
SEPTEMBER 30, 2005 AND 2004
2005
2004
ASSETS
CURRENTASSETS
Cash and cash equivalents
$ 7,007,291
$ 3,145,857
Investments
11,620,693
5,975,346
Receivables, net of allowance for uncollectibles.
Accounts
4,287,336
2,572,331
Accrued interest
36,082
19,502
Inventories
74,674
85,069
Restricted cash and cash equivalents
2,063,465
3,400,883
Total current assets
25,289,541
15,198,988
CAPITAL ASSETS
Land
874,042
822,643
Towers, tanks, and pump stations
105,762,186
98,163,493
Vehicles
751,878
700,302
Machinery and equipment
2,104,071
1,736,559
Furniture and fixtures
8,187
8,187
Construction in progress
5,460,071
835,114
Total capital assets
114,950,435
102,266,298
Less: accumulated depredation
(32,121,752)
(28,495,743)
Capital assets, net of accumulated depreciation
82,828,683
73,770,555
DEFERRED CHARGES - bond issuance costs, net of amortization
170,990
130,232
TOTAL ASSETS
108,289,214
89,099,775
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts payable
1,585,370
1,988,074
Accrued liabilities
331,126
109,028
Payable from restricted assets'
Revenue bonds payable - current
1,545,000
1,340,000
Accrued interest payable
290,418
265,383
Accrued compensated absences -current
112,956
Customer deposits payable
1,193,552
1,132,857
Total current liabilities
5,058,422
4,835,342
NON-CURRENT LIABILITIES
Revenue bonds payable
18,095,665
15,332,895
Accrued compensated absences
107,465
73,831
Total non-cunent liabilities
18,203,130
15,406,726
TOTAL LIABILITIES
23,261,552
20,242,068
NET ASSETS
Invested in capital assets, net of related debt
69,826,085
60,012,683 _
Restricted
Restricted for revenue bond principal and interest
228,047
662,643
Unrestricted
14,973,530
8,182,381
TOTAL NET ASSETS
$ 85,027,662
$ 68,857,707
92
CITY OF ALLEN, TEXAS EXHIBIT D-2
WATER AND SEWER ENTERPRISE FUND
COMPARATIVE STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
SEPTEMBER 30, 2005 AND 2004
2005 2004
OPERATING REVENUES
Water sales
$ 12,660,109
$ 10,981,255
Sewer charges
5,892,969
4,858,352
Connection fees
262,481
246,349
Service charges
547,168
402,945
Miscellaneous
65,485
76,643
Total operating revenues
19,428,212
16,565,544
OPERATING EXPENSES
Personnel services
2,699,435
2,368,074
Contractual and other services
8,542,403
8,083,840
Maintenance
180,054
168,237
Supplies
122,035
122,100
Depreciation and amortization
3,639,895
4,734,302
Other
138,691
66,671
Total operating expenses
15,322,513
15,543,224
OPERATING INCOME
4,105,699
1,022,320
NON-OPERATING REVENUES (EXPENSES)
Interest income
167,208
157,904
Interest expense
(809,574)
(730,791)
Development fees
1,089,345
730,978
Total non-operating expense
446,979
158,091
INCOME BEFORE CAPITAL CONTRIBUTIONS
AND TRANSFERS
4,552,678
1,180,411
CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital contributions
6,823,517
1,408,145
Transfers from other funds
6,912,235
13,644
Transfers to other funds
(2,118,475)
(5,399,866)
Total capital contributions and transfers
11,617,277
(3,978,077)
CHANGE IN NET ASSETS
16,169,955
(2,797,666)
NET ASSETS, BEGINNING OF YEAR
68,857,707
71,655,373
NET ASSETS, END OF YEAR
$ 85,027,662
$ 68,857,707
93
CITY OF ALLEN, TEXAS
EXHIBIT D-3
WATER AND SEWER ENTERPRISE FUNDS
COMPARATIVE STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2005 AND 2004
2005
2004
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers
$
17,713,207
$ 16,629,018
Cash paid 0 employees for services
(2,552,845)
(2,370,897)
Cash paid for goods and services
(9,099,117)
(7,883,562)
Net rash provided by operating activities
6,061,245
6,374,559
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Transfers from other funds
8,912,235
13,644
Transfers to other funds
(2,118,475)
(5,399,866)
Net cash provided by (used in) non-capital financing activities
4,793,760
(5.386,222)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Principal paid on revenue bond maturities
(1,340,000)
(4,460,000)
Proceeds from issuance of bonds
4,251,774
6,892,352
Interest and fees pad on long-term debt
(776,769)
(698,209)
Acquisition and construction of capital assets
(5,860,620)
(1,005,548)
Contributions from developers
1,089,345
730,978
Net cash provided by (used in) caphal and related financing activities
(2,636,270)
1,459,573
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities
(11,820,693)
(5,975,346)
Proceeds from the sale and maturities of investment securities
5,975,346
4,094,822
Interest on investments
150,628
154,766
Net cash used in investing activities
(5,694,719)
(1,725,758)
NET INCREASE IN CASH AND CASH EQUIVALENTS
2,524,016
722,152
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
6,54Q740
5,824,588
CASH AND CASH EQUIVALENTS, END OF YEAR
$
9,070,756
$ 6,546,740
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Net Operating income
$
4,105,699
$ 1022320
Adjustments to reconcile net operating income
to net cash provided by operating activities:
Depreciation and amortization expense
3,633,477
4,644,953
Change in assets and liabilities:
(Increase) in accounts receivable
(1,715,005)
(117,470)
(Increase) decrease in inventories
10,395
(68,954)
Increase (decrease) in accounts payable
(402,704)
765,482
Increase in accrued liabilities
222,098
53,776
Increase (decrease) in compensated absences
146,590
(2,823)
Increase in utility deposits
60,695
75,275
Total adjustments
1,955,546
5,352,239
Net cash provided by operating activities
$
6,061,245
$ Q374,559
NON-CASH FINANCING ACTIVITIES -
Contributionsoffixedassetsfromdevelopers
$
6,823,517
$ 1,408,145
94
' CITY OF ALLEN, TEXAS EXHIBIT D-4
SOLID WASTE ENTERPRISE FUND
COMPARATIVE STATEMENTS OF NET ASSETS
SEPTEMBER 30, 2005 AND 2004
2005 2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$ 751,526
$ 966,603
Receivables, net of allowance for uncollectibles:
Accounts
161,336
136,276
Other
162,740
138,603
Total current assets
1,075,602
1,241,482
CAPITAL ASSETS
Vehicles
44,448
44,448
Machinery and equipment
91819
9,819
Total capital assets
54,267
54,267
Less: accumulated depreciation
(30,429)
(20,137)
Capital assets, net of accumulated depreciation
23,838
34,130
TOTAL ASSETS
1,099,440
1,275,612
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts payable
302,919
283,928
Accrued liabilities
21,593
19,405
Total current Iiabili8es
324,512
303,333
NON-CURRENT LIABILITIES
Accrued compensated absences
22,095
7,641
Total noncurrent liabilities
22,095
7,641
TOTAL LIABILITIES
346,607
310,974
NET ASSETS
Invested in capital assets, net of related debt
23,838
34,130
Unrestricted
728,995
930,508
TOTAL NET ASSETS
$ 752,833
$ 964,638
95
CITY OF ALLEN, TEXAS EXHIBIT D-5
SOLID WASTE ENTERPRISE FUND
COMPARATIVE STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
FOR THE YEARS ENDED SEPTEMBER 30, 2005 AND 2004
OPERATING REVENUES
Garbage collections
Other
Total operating revenues
OPERATING EXPENSES
Personnel services
Contractual and other services
Supplies
Depreciation
Other
Total operating expenses
OPERATING INCOME
NON-OPERATING REVENUES
Interest income
INCOME BEFORE TRANSFERS
TRANSFERS
Transfers to other funds
Total transfers
CHANGE IN NET ASSETS
NET ASSETS, BEGINNING OF YEAR
NET ASSETS, END OF YEAR
2005 2004
$ 3,295,542 $
3,288,339
35,000
1,500
3,330,542
3,289,839
247,957
211,882
3,143,040
3,082,614
8,215
6,135
10,292
12,874
60,859
57,329
3,470,363
3,370,834
(139,821)
(80,995)
20,976 9,362
(118,845) (71,633)
(92,960) (51,972)
(92,960) (51,972)
(211,805) (123,605)
964,638 1,088,243
$ 752,833 $ 964,638
CITY OF ALLEN, TEXAS
EXHIBIT D-6
SOLID WASTE ENTERPRISE FUND
COMPARATIVE STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2005 AND 2004
2005
2004
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers
$ 3,281,345
$ 3,500,028
Cash paid to employees for services
(233,503)
(210,012)
Cash paid for goods and services
(3,190,935)
(3,016,618)
Net cash provided by (used in) operating activities
(143,093)
273,398
CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES
Transfers to other funds
(92,960)
(51,972)
Net cash used in non -capital financing activities
(92,960)
(51,972)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition of capital assets
(8,369)
Net cash used in capital and related financing activities
(8,369)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments
20,976
9,362
Net cash provided by investing activities
20,976
9,362
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(215,077)
222,419
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
966,603
744,184
CASH AND CASH EQUIVALENTS, END OF YEAR
$ 751,526
$ 966,603
RECONCILIATION OF OPERATING (LOSS) TO
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
Net operating (loss)
$ (139,821)
$ (80,995)
Adjustments to reconcile net operating (loss)
to net cash provided by (used in) operating activities:
Depreciation
10,292
12,874
Change in assets and liabilities
Decrease (increase) in accounts receivable -
(25,060)
198,875
Decrease (increase)in other receivables
(24,137)
11,314
Increase in accounts payable
18,991
126,276
Increase in accrued liabilities
2,188
3,184
Increase in accrued compensated absences
14,454
1,870
Total adjustments
(3,272)
354,393
Net cash provided by (used in) operating activities
$ (143,093)
$ 273,398
M
CITY OF ALLEN, TEXAS
DRAINAGE ENTERPRISE FUND
COMPARATIVE STATEMENTS OF NET ASSETS
SEPTEMBER 30, 2005 AND 2004
EXHIBIT D-7
2005
2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$ 730,046
$ 613,169
Accounts receivable
40,486
39,650
Total current assets
770,532
652,819
CAPITAL ASSETS
Other improvements
496,132
496,132
Vehicles
160,637
115,179
Machinery and equipment
373,734
373,734
Total capital assets
1,030,503
985,045
Less: accumulated depreciation
(355,973)
(257,527)
Capital assets, net of accumulated depreciation
674,530
727,518
TOTAL ASSETS
1,445,062
1,380,337
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts payable
11,905
12,576
Accrued liabilities
8,885
8,040
Total current liabilities
20,790
20,616
NON-CURRENT LIABILITIES
Accrued compensated absences
10,513
3,581
Total non-current liabilities
10,513
3,581
TOTAL LIABILITIES
31,303
24,197
NET ASSETS
Invested in capital assets, net of related debt
674,530
727,518
Unrestricted
739,229
628,622
TOTAL NET ASSETS
$ 1,413,759
$ 1,366,140
4.1
CITY OF ALLEN, TEXAS EXHIBIT D-8
DRAINAGE ENTERPRISE FUND
COMPARATIVE STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
FOR THE YEARS ENDED SEPTEMBER 30, 2005 AND 2004
2005 2004
OPERATING REVENUES
Drainage fees
Service charges
Total operating revenues
OPERATING EXPENSES
Personnel services
Contractual and other services
Maintenance
Supplies
Depreciation
Other
Total operating expenses
OPERATING INCOME
Nan -operating revenues - interest income
INCOME BEFORE TRANSFERS
OTHER FINANCING SOURCES AND USES
Transfers from other funds
Transfers to other funds
Total other financing sources (uses)
CHANGE IN NET ASSETS
NET ASSETS, BEGINNING OF YEAR
NET ASSETS, END OF YEAR
M
$ 801,481 $
771,856
136,293
94,577
937,774
866,433
262,388
255,300
153,005
75,590
162,894
159,160
19,771
12,252
72,331
92,963
60,141
48,123
730,530
643,388
207,244
223,045
18,231
5,698
225,475
228,743
19,344
(187,200)
(253,272)
(167,856)
(253,272)
57,619
(24,529)
1,356,140
1,380,669
$ 1,413,759 $
1,356,140
CITY OF ALLEN, TEXAS
DRAINAGE ENTERPRISE FUND
COMPARATIVE STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2005 AND 2004
EXHIBIT D-9
2005
2004
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers
$
936,938
$ 866,266
Cash paid to employees for services
(255,456)
(255,123)
Cash paid for goods and services
(395,637)
(295,759)
Net cash provided by operating activities
285,845
315,384
CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES
Transfers from other funds
19,344
Transfers to other funds
(187,200)
(253,272)
Net cash used in non -capital financing activities
(167,856)
(253,272)
CASH FLOWS FROM CAPITAL
AND RELATED FINANCING ACTIVITIES:
Acquisition of capital assets
(19,343)
Net cash used in capital and related financing activities
(19,343)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments
18,231
5,698
Net cash provided by investing activities
18,231
5,698
NET INCREASE IN CASH AND CASH EQUIVALENTS
116,877
67,810
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
613,169
545,359
CASH AND CASH EQUIVALENTS, END OF YEAR
$
730,046
$ 613,169
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Net operating income
$
207,244
$ 223,045
Adjustments to reconcile net operating income
to net cash provided by operating activities:
Depreciation
72,331
92,963
Change in assets and liabilities:
(Increase) in accounts receivable
(836)
(167)
(Decrease) in accounts payable
(671)
(3,649)
Increase in accrued liabilities
845
3,015
Increase in compensated absences
6,932
177
Total adjustments
78,601
92,339
Net cash provided by operating activities
$
285,845
$ 315,384
100
CITY OF ALLEN, TEXAS EXHIBIT D-10
GOLF COURSE ENTERPRISE FUND
STATEMENT OF NET ASSETS
SEPTEMBER 30.2005
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$ 99,287
Accounts receivable
15,696
Due from other funds
10,000
Prepaid items
11,050
Total current assets
136,033
CAPITAL ASSETS
Machinery and equipment
296,790
Less: accumulated depreciation
(66,447)
Capital assets, net of accumulated depreciation
230,343
TOTALASSETS
366,376
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts payable
43,669
Accrued liabilities
34,511
Capital leases payable - current
98,730
Customer deposits payable
16,680
Total current liabilities
193,590
NON-CURRENT LIABILITIES
Capital leases payable
139,916
Accrued compensated absences
28,828
Total non-current liabilities
168,744
TOTAL LIABILITIES
362,334
NET ASSETS
Invested in capital assets, net of related debt
(8,303)
Unrestricted
12,345
TOTAL NET ASSETS
$ 4,042
101
CITY OF ALLEN, TEXAS EXHIBIT D-11
GOLF COURSE ENTERPRISE FUND ,
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS '
FOR THE YEAR ENDED SEPTEMBER 30, 2005
OPERATING REVENUES
Service charges
$ 1,201,237
Miscellaneous
3.299
Total operating revenues
1,204,536
OPERATING EXPENSES
Personnel services
753,889
Contractual and other services
615,423
Maintenance
74,492
Supplies
79,351
Depreciation
66,447
Other
21,011
Total operating expenses
1,610,613
OPERATING LOSS
(406,077)
Transfers from other funds
410,119
CHANGE IN NET ASSETS
4,042
NET ASSETS, BEGINNING OF YEAR
NET ASSETS, END OF YEAR
$ 4,042
102
CITY OF ALLEN, TEXAS EXHIBIT D-12
GOLF COURSE ENTERPRISE FUND
STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers
$ 1,188,840
Cash paid to employees for services
(725,061)
Cash paid for goods and services
(706,467)
Net cash used in operating activities
(242,688)
CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES
Operating transfers from other funds
400,119
Net cash provided by non -capital financing activities
400,119
CASH FLOWS FROM CAPITAL
AND RELATED FINANCING ACTIVITIES
66,447
Capital lease downpayment
(58,144)
Net cash used in capital and related financing activities
(58,144)
NET DECREASE IN CASH AND CASH EQUIVALENTS
99,287
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
$ 99,287
RECONCILIATION OF OPERATING LOSS TO NET CASH
USED IN OPERATING ACTIVITIES
Net operating loss
$ (406,077)
Adjustments to reconcile net operating loss
to net cash used in operating activities:
Depreciation
66,447
Change in assets and liabilities:
(Increase) in accounts receivable
(15,696)
(Increase)in prepaids
(11,050)
Increase in accounts payable
43,669
Increase in accrued liabilities
34,511
Increase in retainage payable
16,680
Increase in compensated absences
28,828
Total adjustments
163,389
Net cash used in operating activities
$(242,688)
103
pEgPECT * IN TFO
s qir.
n
A
•
m
x
n
m
ClTT OF
11
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,
t]
I
1
104
CITY OF ALLEN, TEXAS EXHIBIT E-1
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET ASSETS
SEPTEMBER 30,2005
(WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2004)
RISK TOTALS
REPLACEMENT MANAGEMENT
FUND FUND 2005 2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$ 1,943,353 $
1,444,032
$ 3,387,385
$ 3,584,203
Investments
2,946,483
2,946,483
2,100,000
Accounts receivable
18,998
61,195
80,193
27,487
Accrued interest receivable
8,994
8,994
6,922
Total current assets
4,917,828
1,505,227
6,423,055
5,718,612
CAPITAL ASSETS
Machinery and equipment
475,737
475,737
284,607
Vehicles
2,900,622
2,900,622
2,157,525
Accumulated depreciation
(1,551,812)
(1,551,812)
(1,416,964)
Capital assets,
net of accumulated depreciation
1,824,547
1,824,547
1,025,168
TOTAL ASSETS
6,742,375
1,505,227
8,247,602
6,743,780
LIABILITIES AND NET ASSETS
LIABILITIES
Accounts payable
119,977
119,977
82,535
Incurred but not reported claims
527,285
527,285
424,616
TOTAL LIABILITIES
647,262
647,262
507,151
NET ASSETS
Invested in capital assets,
net of related debt
1,824,547
1,824,547
1,025,168
Unrestricted
4,917,828
857,965
5,775,793
5,211,461
TOTAL NET ASSETS
$ 6,742,375 $
857,965
$ 7,600,340
$ 6,236,629
105
CITY OF ALLEN, TEXAS EXHIBIT E-2
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2004)
RISK TOTALS
REPLACEMENT MANAGEMENT
FUND FUND 2005 2004
OPERATING REVENUES
Charges for services
$ 1,211,003 $
4,672,959
$ 5,883,962 $
4,789,329
Other income
41,433
41,433
50,892
Total operating revenues
1,211,003
4,714,392
5,925,395
4,840,221
OPERATING EXPENSES
Personal services
133,041
133,041
55,214
Contractual services
4,506,755
4,506,755
3,827,089
Depreciation
266,210
266,210
221,310
Total operating expenses
266,210
4,639,796
4,906,006
4,103,613
OPERATING INCOME
944,793
74,596
1,019,389
736,608
NON-OPERATING REVENUES
Investment earnings
61,930
28,032
89,962
105,230
Gain on disposal of capital assets
14,303
14,303
11,742
Total non-operating revenues
76,233
28,032
104,265
116,972
INCOME BEFORE TRANSFERS
1,021,026
102,628
1,123,654
853,580
TRANSFERS
Transfers from other funds
85,000
174,400
259,400
Transfers to other funds
(19,343)
(19,343)
Total transfers
65,657
174,400
240,057
CHANGE IN NET ASSETS
1,086,683
277,028
1,363,711
853,580
NET ASSETS, BEGINNING OF YEAR
5,655,692
580,937
6,236,629
5,383,049
NET ASSETS, END OF YEAR
$ 6,742,375 $
857,965
$ 7,600,340 $
6,236,629
106
CITY OF ALLEN, TEXAS EXHIBIT E-3
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
(WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 3.2004)
RISK TOTALS
REPLACEMENT MANAGEMENT
FUND FUND 2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from tra suactwns with other funds
Cash paid to employees for services
Cash paid for goods and services
Cash paid for claims
Net rash provided by operating activities
CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES
Transfers from other funds
Transfers to other funds
Net cash provided by noncapital financing activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition of capital assets
Proceeds from sale of capital assets
Net cash used in capital and related financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities
Proceeds from sale and maturities of investment securities
Interest on investments
Net cash pmvWed by (used in) 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 ope sting income
Adjustments to reconcile operating income
to net rash provided by operating activities:
Depreciation
Change in assets and liabilities:
(Increase) in accounts receivables
Increase in accounts payable
Total adjustments
Net cash provided by operating activities
1,199,032 $ 4,673,657 $ 5,872,689 IS 4,832,441
(133,041) (133,041) (58,394)
(956,487) (956,487) (494,054)
(3,410,157) (3,410,157) (3,222,437)
1,199,032 173,972 1,373,004 1,057,556
85,000
174,400
259,400
(19,343)
55,493
(19,343)
65,657
174,400
240,057
(1,106,779)
74,596 $
(1,106,779)
(342,930)
55,493
55,493
11,742
(11,971)
(40,735)
(1,051,286)
(7,780)
(1,051,286)
(331,166)
140,111
107,418
254,239
99,376
(2,946,483)
320,948
(2,946,483)
(2,100,000)
2,000,000
100,000
2,10.000
1,994.000
59,310
28,580
87,890
106,896
(887,173)
128,580
(758,593)
896
(673,770)
476,952
(196,818)
727,264
2,617,123
967,080
3,5Bg203
2,856,939
$ 1,943.353 $
1;444,032
$ 3,387,385 $
3,584,203
$ 944793 $
74,596 $
1,019,389 $
736,608
266,210
266,210
221,310
(11,971)
(40,735)
(52,708)
(7,780)
140,111
140,111
107,418
254,239
99,376
353,615
320,948
$ 1,199,032 E
173.972 $
1,373,004 $
1057,556
107
11
II DISCRETELY PRESENTED COMPONENT UNITS
L
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 entityfrom the City and
is responsible for supporting the improvements in community parks and recreation, streets and sidewalks,
public safety and the community library.
108
CITY OF ALLEN, TEXAS EXHIBIT F-1
ALLEN ECONOMIC DEVELOPMENT CORPORATION
COMPARATIVE BALANCE SHEETS
SEPTEMBER 30, 2005 AND 2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Investments
Sales tax receivable
Accounts receivable
Accrued interest receivable
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
CURRENT LIABILITIES
Accounts payable
Accrued and other liabilities
Retainage payable
TOTAL LIABILITIES
FUND BALANCES
Unrestricted
TOTAL LIABILITIES AND FUND BALANCES
109
2005 2004
$ 1,707,300 $
3,491,958
3,854,982
550,000
684,833
638,773
1,285
1,145
11,767
3,021
$ 6,260,167 $
4,684,897
$ 305,426 $ 62,895
9,683 8,287
9,150
315,109 80,332
5,945,058 4,604,565
$ 6,260,167 $ 4,684,897
CITY OF ALLEN, TEXAS EXHIBIT F-2
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
ALLEN ECONOMIC DEVELOPMENT CORPORATION
SEPTEMBER 30,2005
Total governmental fund balance $ 5,945,058
Amounts reported for governmental activities in the statement of net assets
are different because:
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. 6,796,281
Net assets of governmental activities $ 12,741,339
110
CITY OF ALLEN, TEXAS EXHIBIT F-3
ALLEN ECONOMIC DEVELOPMENT CORPORATION
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEARS ENDED SEPTEMBER 30, 2005 AND 2004
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 of revenues over expenditures
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
111
2005 2004
$ 3,874,528 $ 3,532,301
58,957 63,558
1,118,708 184,080
5,052,193 3,779,939
3,711,700 1,359,435
230,365
4,288
11,453
3,711,700 1,605,541
1,340,493 2,174,398
4,604,565 2,430,167
$ 5,945,058 $ 4,604,565
CITY OF ALLEN, TEXAS
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT
OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
TO THE STATEMENT OF ACTIVITIES
ALLEN ECONOMIC DEVELOPMENT CORPORATION
FOR THE YEAR ENDED SEPTEMBER 30, 2005
EXHIBIT F-4
Net change in fund balances - total governmental funds
$ 1,340,493
Amounts reported for governmental activities in the statement of activities
are different because:
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.
(158,470)
In governmental fund financial statements, the proceeds from sale of assets are
shown as an increase in financial resources. In the government -wide financial
statements, the gain or loss is calculated and reported.
(198,939)
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.
44,335
Change in net assets of governmental activities
$ 1,027,419
112
CITY OF ALLEN, TEXAS EXHIBIT F-5
ALLEN COMMUNITY DEVELOPMENT CORPORATION
COMPARATIVE BALANCE SHEETS
SEPTEMBER 30, 2005 AND 2004
ASSETS
CURRENTASSETS
Cash and cash equivalents
Investments
Sales tax receivable
Accounts receivable
Accrued interest receivable
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
CURRENT LIABILITIES
Accounts payable
Retainage payable
TOTAL LIABILITIES
FUND BALANCES
Reserved for encumbrances
Unreserved
Total fund balance
TOTAL LIABILITIES AND FUND BALANCES
113
2005 2004
$ 2,173,415 $
3,822,516
2,423,260
500,000
684,833
638,773
1,285
1,145
7,397
1,593
$ 5,290,190 $
4,964,027
$ 83,653 $ 544,595
54,928 70,119
138,581 614,714
101,240
5,050,369 4,349,313
5,151,609 4,349,313
$ 5,290,190 $____1,964 027
� I CITY OF ALLEN, TEXAS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
ALLEN COMMUNITY DEVELOPMENT CORPORATION
SEPTEMBER 30, 2005
EXHIBIT F-6
Total governmental fund balance $ 5,151,609
Amounts reported for governmental activities in the statement of net assets
are different because:
Interest payable on long -tens debt does not require current financial resources,
therefore interest payable is not reported as a liability in the governmental
funds balance sheet. (33,038)
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. (8,055,000)
Net assets of governmental activities $ (2,936,429)
114
CITY OF ALLEN, TEXAS EXHIBIT F-7
ALLEN COMMUNITY DEVELOPMENT CORPORATION
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEARS ENDED SEPTEMBER 30, 2005 AND 2004
REVENUES
Sales and other taxes
Investment earnings
Total revenues
EXPENDITURES
Current:
Community development
Capital projects:
Community development
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess of revenues over expenditures
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
115
2005 2004
$ 3,874,528 $ 3,532,300
81,101 73,731
3,955,629 306,031
425,449
111,812
1,884,858
2,327,337
420,000
689,316
423,026
459,792
3,153,333
3,588,257
802,296
17,774
4,349,313
4,331,539
$ 5,151,609 $
4,349,313
CITY OF ALLEN, TEXAS EXHIBIT F-8
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT
OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
TO THE STATEMENT OF ACTIVITIES
ALLEN COMMUNITY DEVELOPMENT CORPORATION
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Net change in fund balances - total governmental funds $ 802,296
Amounts reported for governmental activities in the statement of activities
are different because:
Current year changes in accrued interest payable do not require the use of current
financial resources: therefore, are not reported as expenditures in governmental funds. 2,214
Repayment of the principal on long-term debt consumes the current financial
resources of governmental funds, However, these transactions have no
effect on net assets. 420,000
Change in net assets of governmental activities $ 1,224,510
116
PESp EGT # INTEG
CITY OF A��'�•-
i CAPITAL ASSETS
1 USED IN THE OPERATION
1 OF GOVERNMENTAL FUNDS
1
i
1
1
i
1
1
1
i
1
II
Q�sv EGT f I NTFG
n
A
m
x
m
G'TT OF AL�'�•
CITY OF ALLEN, TEXAS
EXHIBIT G-1
COMPARATIVE SCHEDULES OF CAPITAL ASSETS USED IN
THE OPERATION OF GOVERNMENTAL FUNDS - BY SOURCE (a)
SEPTEMBER 30, 2005 AND 2004
2005 2004
GOVERNMENTAL FUNDS CAPITAL ASSETS
Land and land improvements
Buildings
Machinery and equipment
Furniture and fixtures
Vehicles
Books
Infrastructure
Total property and equipment in service
Construction in progress
' Total governmental funds capital assets
INVESTMENTS IN GOVERNMENTAL FUNDS CAPITAL ASSETS
BY REVENUE SOURCE
General obligation bond proceeds and interest income
Revenue bonds
Contributions
Other governments
General and other fund operations
Special revenue funds
fTotal governmental funds capital assets
$ 84,474,787 $
61,662,118
37,322,621
37,203,288
3,657,827
2,658,166
2,484,520
1,594,504
3,298,071
3,116,830
2,588,104
2,573,525
291,001,529
267,133,760
424,827,459
375,942,191
40,262,481
25,534,288
$ 465,089,940 $
401,476,479
$ 101,886,958 $
85,273,098
10,475,000
10,475,000
267,505,984
230,751,770
9,951,500
8,351,500
67,025,815
60,750,994
8,244,683
5,874,117
$ 465,089,940 $ 401,476,479
' (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 assets.
117
CITY OF ALLEN, TEXAS
SCHEDULE OF CAPITAL ASSETS USED IN THE OPERATION OF
GOVERNMENTAL FUNDS - BY FUNCTION AND ACTIVITY (a)
AS OF SEPTEMBER 30, 2005
CULTURE 8 RECREATION
Parks 8 recreation
Land
768,767
Machinery 8
Function and Activity
Land Improvements
Buildings
Equipment
1,289,526
COMMUNITY DEVELOPMENT
GENERAL GOVERNMENT
10,790
Planning 8 development
Municipal court
$ 631,788 $ $
289,669
$ 5,480
City administration
507,332
8,622,747
157,462
Information technology
612,454
143,382
Human Resources
612,454
Construction in Progress
Internal Services
(6.784)
Total general government
1,139.120
9,112,416
299,540
PUBLIC SAFETY
Police
6,483,775
317,397
Fire
6,916,587
757,370
Total public safety
13.400.362
1,074,767
PUBLIC WORKS
Community services 8 streets
51,212,522
342.360
Engineering
23,057,660
21.397
Total public works
74,270,182
363,757
CULTURE 8 RECREATION
Parks 8 recreation
8,223,329 842,156 12,914,765
768,767
Library
1,895,078
520759
Total culture 8 recreation
8.223,329 842,156 14.809.843
1,289,526
COMMUNITY DEVELOPMENT
Building and code compliance
10,790
Planning 8 development
6,993
Total community development
17,783
GRANT ADMINISTRATION
Grant administration
612,454
Total grant administration
612,454
Construction in Progress
Total governmental funds capital assets $ 83,632,fi31 $ 842.158 $ 37,322,821 $ 3,657,827
(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 assets
118
EXHIBIT G-2
Furniture 8
605,807
Other Construction In
1,648,340
Fixtures
Vehicles
Books Improvements Progress
Total
$ $
$
$ $ $
926,937
829,193
147,343
10,318,734
14,665
9,682
222,321
389,950
3,336
3,336
18,321
187,474
64,128
11,537
865,415
9,682
222,321
11,60,494
213,330
518,527
71,867
7,804,896
235,398
1,386,183
289,885
9,565,423
40,262,481
40,262,481
448,728
1,904,710
341,752
17,170,319
$ 2,484,520 $
311,766
256,319,843
308,186,491
17,701
131,289
32,365,165
55,593,212
17,701
443,055
288,885,008
363,779,703
315,420
837258
605,807
2,523,976
1,648,340
25,318,584
5,777,089
1,152,676
605,807
2,523,976
1,648,340
31,095,653
147,343
158,133
8,993
147,343
165,126
187,474
64,128
104,108
968,164
187,474
64,128
104,108
968,164
40,262,481
40,262,481
40,262,481
40,262,481
$ 2,484,520 $
3,298.071 $
2,588,109 $
291 001.529 $
40,282,481 $
485.089,940
119
CITY OF ALLEN, TEXAS EXHIBIT G-3
SCHEDULE OF CHANGES IN CAPITAL ASSETS USED IN THE OPERATION
OF GOVERNMENTAL FUNDS - BY FUNCTION AND ACTIVITY (a)
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005
CULTURE & RECREATION
Parks &rupsalu i
turnery
Total cu0ura & recrest.
COMMUNITY DEVELOPMENT
Builds, & coda mmplan.
Planning & devebpmant
Total community devebpmant
GRANTADMINISTRATION
Grant administration
Thal grant adminotra4m
Total9eneralf edassal
91loreted by Nnman
Constr nIn pmgRss
Thal governmental funds
capital assets
19,789,ako
GovemmeMal FulMs
5,051216
1,D56,a31
25,316,564
4,511,561
Govemmarial FunM
(177,438)
Cap9al Pawls
Devebpar
24,331,411
1]96,866 4,077,990
(177,438)
Capeal Assets
FY11Cwn eM AcErMy
canner 1, 2001
Contributions
Ackhbcvs
Deduotlnnn
TlanMers
September 30. 2005
11,626
10,790
158,133
6.993
GENERAL GOVERNMENT
6.993
142,500
11,920
10,790
165,126
Municipalmud
$ 921,457 $
$
$ $
5,400 3
92&937
Cil, adminlsaa6on
10,173,980
91.419
51,329
10,316]34
IMomllion technology
362508
2!,442
309,950
Human Resources
3,338
3,338
Internal Sawcas
1,9111
9,573
11,537
Total genaral9pyemrreM
11,463,251
126,434
55,009
11548,494
PUBLIC SAFETY
Poll.
7,608,848
33,574
(76,212)
30,088
7,604,895
Fire
9,321.581
201,017
(151.4%)
194,320
9.565,423
Toll public safety
16,939,212
234591
(227,6911)
233,214
17,170,319
PUBLIC WORKS
Calomundy semces&street
307,935,925
285,441
(34,045)
308,188,491
E,,.nq
14,464,418
31,957,248
19,374
(23,329)
0,175,501
55.593,212
TWal public works
322,400,343
34,957,248
304,785
(58.94)
6,95,501
363.779.703
CULTURE & RECREATION
Parks &rupsalu i
turnery
Total cu0ura & recrest.
COMMUNITY DEVELOPMENT
Builds, & coda mmplan.
Planning & devebpmant
Total community devebpmant
GRANTADMINISTRATION
Grant administration
Thal grant adminotra4m
Total9eneralf edassal
91loreted by Nnman
Constr nIn pmgRss
Thal governmental funds
capital assets
19,789,ako
1j95,968 2,664,934
5,051216
1,D56,a31
25,316,564
4,511,561
1,412,916
(177,438)
(107,763) 47543,1481
5.m1099
24,331,411
1]96,866 4,077,990
(177,438)
1,068534
- 31,095,653
$ 401,475,479 $
38754,214 $
27,430,320
$ (5710731 $ E
185.088,910
135.515
11,626
10,790
158,133
6.993
6.993
142,500
11,920
10,790
165,126
674.465 293,690 968,164
674,465 293,090 988,164
375,942,191
30,754.214
5,051216
(463,31D) 7,543,140
424,027,459
25,531,280
22379,101
(107,763) 47543,1481
40252481
$ 401,475,479 $
38754,214 $
27,430,320
$ (5710731 $ E
185.088,910
(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 assets.
120
STATISTICAL SECTION
(UNAUDITED)
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 & 4
These tables contain trend information to help the reader understand how the City's
financial performance and well-being have changed over time.
Revenue Capacity
5, 6, 7 & 8
These tables contain information to help the reader assess the City's two most significant
local revenue sources, the property and sales taxes.
Debt Capacity
9, 10, 11 & 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 & 14
These tables offer economic and demographic indicators to help the reader understand the
environment within which the City's financial activities take place.
Operating Information
15, 16 & 17
These tables contain service and infrastructure data to help the reader understand how the
information in the City's financial report relates to the services the City provides.
Source: Unless otherwise noted, the information in these tables is derived from the comprehensive annual
financial reports for the relevant year. The City implemented GASB Statement 34 in fiscal year 2003: tables
presenting govemment-wide information include information beginning in that year.
121
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CITY OF ALLEN, TEXAS
COMMUNICATION OF INTERNAL CONTROL STRUCTURE
RELATED MATTERS NOTED DURING THE AUDIT
FOR THE YEAR ENDED SEPTEMBER 30, 2005
I I I
March 14,20D6
WEAVER
TIDWELL
L c P.
To the Honorable Mayor,
City Council and City Manager
crRT,r�Eo r"euc
ACCO U"iANTS
CitY of Allen, Texas
AND CONSULTANTS
Management of the City of Allen, Texas (the "City") is responsible for establishing and
maintaining the City's internal control structure. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related costs
of internal control structure policies and procedures.
The City's internal control structure consists of policies and procedures established by
management to provide reasonable, but not absolute, assurance that the financial data
are recorded, processed, summarized, and reported consistent with the assertions
embodied in the financial statements. In establishing those policies and procedures,
management assesses their expected benefits and related costs. Because of the
inherent limitations in any internal control structure, errors or irregularities may
nevertheless occur and not be detected. Also, projection of any assessment of the
internal control structure to future periods is subject to the risk that policies or procedures
may become inadequate because of changes in conditions or that the degree of
compliance with the policies or procedures may deteriorate.
In planning and performing our audit of the basic financial statements of the City of Allen for
the year ended September 30, 2005, we considered its internal control structure in order to
determine our auditing procedures for the purpose of expressing our opinion on the
financial statements and not to provide assurance on the internal control structure.
However, during our audit, we noted certain matters involving accounting internal control
structure and other operational matters that are presented for your consideration. These
matters, which were considered by us during our audit of the financial statements and do
not modify the opinion expressed in our report dated March 1, 2006, are presented in the
following paragraphs. We will review the status of these comments during our next audit
engagement. Our comments and recommendations are intended to improve the internal
control structure or result in other operating efficiencies. Additionally, we evaluated the
status of the comments from our audit of the previous year.
CURRENTCOMMENTS
DALLAS
These, Foe,,, v1o:" Approval of Journal Entries
12221 M ..I IT—
S„,,.1400 Observation:
DI Tixas75251-2286
91490.1920 During our audit, we noted that numerous transactions related to property and equipment
F 972702.6321 and to interfund transfers were recorded by a department staff without the approval of the
rop, wow,„ department's supervisor and were without support or lacked conclusive evidential
substance. In most cases, the recorded transactions created discrepancies between
1600 w,r s—sh 5— transfer accounts which caused the overall transfers to and transfers from funds to not be in
Surs. 300
For, W-4, Texas 76101 balance at the time of the audit.
9173327905
F 917429.5936 Also, the transactions referred to above created disagreements between the balances in the
www r,EA.ENANOT,°wELL CON capital assets accounts per general ledger and the balances reported in the capital assets
ANINDEPENDENT "E"eE 9°. projects module and sub ledgers. The upkeep and retention of accurate capital assets
BAKER TILLY records is an important management tool in maintaining control over capital assets and
"T`""ATS°""` related charges to depreciation.
CITY OF ALLEN, TEXAS
March 14, 2006
Page Two
Although correcting entries were proposed and made during the audit, the time spent by the
City personnel and the auditor in reconciling such items was significant due to the large
volume of transfers that were made and similar amounts of capital assets balance
discrepancies that needed to be resolved.
Recommendations
We recommend that the finance department consider enhancing and strengthening the
current review process over the approval and recording of journal entries. Significant,
unusual, and non-recurring transactions should specifically be reviewed and approved by
management to ensure that proper accounting is followed and generally accepted
accounting principles are applied consistently across all funds.
Additionally, we recommend that management implement measures to ensure that transfers
between funds get proper prior approval, possess economic substance, and the purpose of
the transfers are in accordance with management's intentions. We also recommend that
capital asset transactions are reviewed monthly so that discrepancies such as those
described above can be more easily and quickly researched and resolved. In addition,
regular comparisons of capital assets balances from the projects module and sub ledgers
with recorded capital assets per general ledger should be performed to help maintain
control over the City's assets.
dr Management's Response
Late in September 2005, management noticed that budget variances were negative in
interfund transfer accounts. The entries were an attempt to move prior year fixed asset
entries to different funds. Management and the auditors were not consulted to determine
r if in fact the purpose of the entries causing the variance was correct. Management
explained to the staff member that only budgeted entries could be recorded to these
accounts and to communicate with management when complicated accounting
dr adjustments were needed. The staff member made correcting entries that eliminated the
variances then shortly thereafter left the employment of the City.
4F
AV Another staff member recently hired was then asked to take over the accounting of
capital projects, fixed assets and depreciation. At the end of September 2005, the
AV department then began preparing year-end reconciliations and schedules for the audit.
I During the audit, the correcting entries were determined to also be incorrect and the new
aI staff member had to make more correcting entries which were difficult due to the lack of
documentation with the incorrect entries. Since fixed assets and depreciation schedules
had already been completed, reversing the incorrect entries required additional time for
both current staff and the auditors.
Is
The auditors recommend that review processes in the department be strengthen and to
implement prior approval for interfund transfers. Budget variances are the indicators
already used to monitor problem areas. Unfortunately this is an isolated incident caused
by an employee who is no longer with the City. Current staff has good working
relationships among each other and have been encouraged to keep open communication
with management and to discuss accounting issues together to determine the appropriate
action to take.
Current staffing levels restrict time spent on each accounting function. An additional
degreed accountant will be requested for the 2006-2007 fiscal year to improve work
levels.
CITY OF ALLEN, TEXAS
March 14, 2006
Page Three
Liability for Compensated Absences
Observation
During our audit of long-term liabilities, we noted that while it is the policy of the City to make
payments to employees upon termination for a portion of their balance of unused sick leave,
the City does not have a documented approach to measure the amount of the liability for
sick leave earned that is estimated to be paid at termination. To date, the City has relied
upon automated balances generated by the payroll system for determining the amount of
earned but unused sick leave.
Sick leave does not qualify as a compensated absence because it is contingent on a future
event (namely, illness) that is beyond the control of both employer and employee. However,
when a portion of sick leave is payable upon termination, it is no longer contingent upon a
future event. The amount of the liability to be recorded should be an estimate of the earned
sick leave that will be paid.
Recommendation:
We recommend that management develop a methodology to estimate the amount of sick
leave that is earned and expected to be paid at the time of employee termination.
Management's Response:
Staffing limitations have made the department rely on the automated process to calculate
the compensated absence balances. Since this entry is based on estimations rather than
actual amounts, the department will develop a methodology to estimate the sick leave
and implement this change during the 2005-2006 fiscal year.
Status of Prior Year Comments
Accompanying this letter is a summary of the status of prior year comments, which should
be read along with our current observations and recommendations.
Concluding Comments
We appreciate the opportunity to be of service and wish to express our appreciation to the
officials and employees of the City for their cooperation and assistance during the course of
the audit. We would be pleased to discuss these recommendations in greater detail or
otherwise assist in their implementation.
This report is intended solely for the information and use of the City council, management,
and others within the organization
WEAVER AND TIDWELL, L.L.P.
CITY OF ALLEN, TEXAS
March 14, 2006
Page Four
STATUS OF PRIOR YEAR COMMENTS
The status of prior year's recommendations is based upon discussion with management and limited review of
their implementation. Such recommendations were reported to the City Council and are more fully described
in prior year's Communication of Internal Control Structure Related Matters Noted during the Audit.
Implementation
Recommendations Implemented Not Implemented In Process
1. We recommended that the staffing needs
of the finance department be assessed and
that consideration be given to increasing
capacity through hiring or reorganizing X
2. We recommended the reconciliations of capital
assets general ledger balances to the sub ledger
be performed on a regular basis when any
discrepancies can be more easily and quickly
researched and resolved. X
3. In addition, we recommended that regular
comparisons of capital expenditure with
recorded capital assets additions should be
performed to help ensure all capital
expenditures are entered into the fixed
assets module X
CITY OF ALLEN, TEXAS
INDEPENDENT AUDITOR'S REPORTS
ON FEDERAL AND STATE AWARDS
YEAR ENDED SEPTEMBER 30, 2005
TABLE OF CONTENTS
Page
Independent Auditor's Report on Internal Control Over Financial Reporting and
on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 1
Independent Auditor's Report on Compliance with Requirements Applicable
To Each Major Federal and State Program and on Internal Control Over
Compliance In Accordance with OMB Circular A-133 and on the Schedule
of Expenditures of Federal and State Awards 3
Schedule of Findings and Questioned Costs
Corrective Action Plan
Schedule of Prior Audit Findings
3
7
10
Supplementary Information:
Schedule of Expenditures of Federal and State Awards 11
Notes to Schedule of Expenditures of Federal and State Awards 13
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON INTERNAL
IIIIII, We have audited the financial statements of the governmental activities, the business -type
qr activities, the aggregate discreetly 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, 2005, which collectively comprise the City of Allen's basic financial
statements and have issued our report thereon dated March 1, 2006. We conducted our
audit in accordance with generally accepted auditing standards and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States.
41111 Internal Control Over Financial Reporting
In planning and performing our audit we considered the City's internal control over
financial reporting in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and not to provide assurance on the
internal control over financial reporting However, we noted certain matters involving the
4V internal control over financial reporting and its operation that we consider to be reportable
conditions. Reportable conditions involve matters coming to our attention relating to
significant deficiencies in the design or operation of the internal control over financial
40 reporting that in our judgment, could adversely affect the City's ability to record, process,
summarize and report financial data consistent with the assertions of management in the
• general purpose financial statements. The reportable conditions are described in the
41110 accompanying schedule of findings and questioned costs as finding 2005-01 and 2005-02.
A material weakness is a condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low level the risk that
misstatements in amounts that would be material in relation to the financial statements
DALLAS being audited may occur and not be detected within a timely period by employees in the
re...£N... I I'D- normal course of performing their assigned functions. Our consideration of the internal
12221 McOt Dr— control over financial reporting would not necessarily disclose all matters in the internal
Smlr 1400
Dann, T.,,,. 75251-2280 control over financial reporting that might be reportable conditions and accordingly, would
972,4'901970 not disclose all reportable conditions that are considered to be material weaknesses
£'727028321 However, we believe the reportable conditions described above are not material
Pweaknesses.
FORT wDR.N
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WWW wEwERArvonoweu COM
AN INDEPENDENT MEMBER D!
CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF
WEAVER
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
TIDWELL
WITH GOVERNMENTAUDITING STANDARDS
LLP
CERTIFIED PUBLIC
ACCOUNTANTS
AHO CONSULTANTS
To the Honorable Mayor,
City Council and City Manager
City Of Allen
Allen, Texas
IIIIII, We have audited the financial statements of the governmental activities, the business -type
qr activities, the aggregate discreetly 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, 2005, which collectively comprise the City of Allen's basic financial
statements and have issued our report thereon dated March 1, 2006. We conducted our
audit in accordance with generally accepted auditing standards and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States.
41111 Internal Control Over Financial Reporting
In planning and performing our audit we considered the City's internal control over
financial reporting in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and not to provide assurance on the
internal control over financial reporting However, we noted certain matters involving the
4V internal control over financial reporting and its operation that we consider to be reportable
conditions. Reportable conditions involve matters coming to our attention relating to
significant deficiencies in the design or operation of the internal control over financial
40 reporting that in our judgment, could adversely affect the City's ability to record, process,
summarize and report financial data consistent with the assertions of management in the
• general purpose financial statements. The reportable conditions are described in the
41110 accompanying schedule of findings and questioned costs as finding 2005-01 and 2005-02.
A material weakness is a condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low level the risk that
misstatements in amounts that would be material in relation to the financial statements
DALLAS being audited may occur and not be detected within a timely period by employees in the
re...£N... I I'D- normal course of performing their assigned functions. Our consideration of the internal
12221 McOt Dr— control over financial reporting would not necessarily disclose all matters in the internal
Smlr 1400
Dann, T.,,,. 75251-2280 control over financial reporting that might be reportable conditions and accordingly, would
972,4'901970 not disclose all reportable conditions that are considered to be material weaknesses
£'727028321 However, we believe the reportable conditions described above are not material
Pweaknesses.
FORT wDR.N
1600 W.a SeA—h S---
S.,,300
nnlSvn300
A..W..h.T... 16102-2506
8173327905
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WWW wEwERArvonoweu COM
AN INDEPENDENT MEMBER D!
City of Allen, Texas
Page 2
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements
are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts and grants, noncompliance with which could have
a direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit
and, accordingly, we do not express such an opinion. The results of our tests disclosed no
instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards
This report is intended for the information and use of the City council, management, and
federal awarding agencies and pass-through entities, and is not intended to be and should
not be used by anyone other than these specified parties.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
March 1. 2006
2
WEAVER
TIDWELL
L L.P
CERTIFIED PUBLIC
ACCOUNTANTS
AHO CONSULTANTS
DALLAS
1 1, 14 O
u 7100
"1901930
'Fra 102 Bad 1
FLF, W.—
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81 129 5936
AN INDEPENDENT ME KEN OF
BAKER 71LLY
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL
OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 AND ON THE
SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS
To the Honorable Mayor,
City Council and City Manager
City Of Allen
Allen, Texas
Compliance
We have audited the compliance of the City of Allen (the City), with the types of compliance
requirements described in the U. S. Office of Management and Budget (OMB) Circular A-
133 Compliance Supplement and the Uniform Grant Management Standards issued by the
Governor's Office of Budget and Planning that are applicable to its major federal and state
programs for the year ended September 30, 2005. The City's major federal and state
programs are identified in the summary of auditor's results section of the accompanying
schedule of audit findings. Compliance with the requirements of laws, regulations,
contracts and grants applicable to its major federal program is the responsibility of the
City's management. Our responsibility is to express an opinion on the City's compliance
based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing
standards: the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States, and OMB Circular A-
133, Audits of States, Local Governments, and Ni Organizations and the Uniform
Grant Management Standards issued by the Governors Office of Budget and Planning.
Those standards and OMB Circular A-133 require that we plan and perform the audit to
obtain reasonable assurance about whether noncompliance with the types of compliance
requirements referred to above that could have a direct and material effect on a major
federal or state program occurred. An audit includes examining, on a test basis, evidence
about the City's compliance with those requirements and performing such other
procedures, as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion. Our audit does not provide a legal
determination on the City's compliance with those requirements.
In our opinion, the City complied, in all material respects, with the requirements referred to
above that are applicable to its major federal and state programs for the year ended
September 30, 2005.
Internal Control Over Compliance
The management of the City of Allen is responsible for establishing and maintaining
effective internal control over compliance with requirements of laws, regulations, contracts
and grants applicable to federal and state programs. In planning and performing our audit,
we considered the City's internal control over compliance with requirements that could
have a direct and material effect on a major federal or state program in order to determine
our auditing procedures for the purpose of expressing our opinion on compliance and to
test and report on internal control over compliance in accordance with OMB Circular A-133
and the Uniform Grant Management Standards.
City of Allen, Texas
Page 2
Our consideration of the internal control over compliance would not necessarily disclose all
matters in the internal control that might be material weaknesses. A material weakness is
a condition in which the design or operation of one or more of the internal control
components does not reduce to a relatively low level the risk that noncompliance with
applicable requirements of laws, regulations, contracts, and grants that would be material
in relation to a major federal program being audited may occur and not be detected within a
timely period by employees in the normal course of performing their assigned functions.
We noted no matters involving the internal control over compliance and its operation that
we consider to be material weaknesses.
Schedule of Expenditures of Federal and State Awards
• We have audited the financial statements of the governmental activities, the business -type
40 activities, the aggregate discretely presented component units, each major fund, and the
40 aggregate remaining fund information of the City of Allen, Texas as of and for the year
ended September 30, 2005, and have issued our report thereon dated March 1, 2006. Our
audit was performed for the purpose of forming opinion on the basic financial statements
which collectively comprise the City of Allen's basic financial statements. The
accompanying Schedule of Expenditures of Federal and State Awards is presented for
40 purposes of additional analysis as required by OMB Circular A-133 and by the Uniform
Grant Management Standards issued by the Governors Office of Budget and Planning and
41F is not a required part of the basic financial statements. Such information has been
r subjected to the auditing procedures applied in the audit of the basic financial statements,
and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial
• statements taken as a whole.
W This report is intended for the information of the City council, management, and federal
awarding agencies and pass-through entities, and is not intended to be and should not be
used by anyone other than these specified parties.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
March 1. 2006
4
CITY OF ALLEN, TEXAS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Section I -Summary of Auditor's Results
FINANCIAL STATEMENTS:
that are not considered to be material
An unqualified opinion was issued on the financial statements.
weakness(es)? _Yes
X None
Internal control over financial reporting
Any audit findings disclosed that are
• Material weakness(es) identified?
_Yes
X No
• Reportable conditions) identified
X No
Major programs include:
that are not considered to be
• Federal Programs
material weakness(es)?
X Yes
_No
Noncompliance material to financial
97 008 Urban Area Security Initiative
statements noted?
Yes
X No
FEDERAL AWARDS:
Dollar threshold used to distinguish
Internal control over major programs.
between type A and type B programs.
• Material weakness(es) identified?
_Yes
X No
• Reportable condition(s) identified
that are not considered to be material
weakness(es)? _Yes
X None
An unqualified opinion was issued on compliance for major program.
Any audit findings disclosed that are
required to be reported in accordance
with section 510(a) or Circular A-133? _Yes
X No
Major programs include:
• Federal Programs
CFDA Number(s) Name of Program or Cluster
14 219 Community Development Block Grant
97 008 Urban Area Security Initiative
• State Programs
Allen Station Park, Phase II
Dollar threshold used to distinguish
between type A and type B programs.
Federal Programs30$
0.000
State Programs
$300,000
Auditee qualified as low-risk auditee? X Yes
_No
1.1
CITY OF ALLEN, TEXAS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Section II - Financial Statement Findings
Finding # 2005-01 —Approval of Journal Entries
Criteria or Specific Requirement:
The upkeep and retention of accurate capital assets records is an important management tool in
maintaining control over capital assets and related charges to depreciation. Regular comparisons of
capital asset balances from the projects module and sub ledgers with recorded capital assets per
general ledger should be performed to help maintain control over the City's assets.
Condition
( ) Compliance Finding ( X ) Reportable Condition ( ) Material Weakness.
Context
During our audit, we noted that numerous transactions related to property and equipment and to
interfund transfers were recorded by a department staff without the approval of the department's
supervisor and were without support or lacked conclusive evidential substance. In most cases, the
recorded transactions created discrepancies between transfer accounts which caused the overall
transfers to and transfers from funds to not be in balance at the time of the audit.
Also, the transactions referred to above created disagreements between the balances in the capital
assets accounts per general ledger and the balances reported in the capital assets projects module and
sub ledgers. Xthough correcting entries were proposed and made during the audit, the time spent by
the City personnel and the auditor in reconciling such items was significant due to the large volume of
transfers that were made and similar amounts of capital assets balance discrepancies that needed to be
resolved.
Effect:
Not performing reviews of financial transactions and approving the recording of journal entries may
result in errors not being found within the general ledger accounts, which could ultimately result in
incorrect financial reporting.
Recommendations:
We recommend that the finance department consider enhancing and strengthening the current review
process over the approval and recording of journal entries. Significant, unusual, and non-recurring
transactions should specifically be reviewed and approved by management to ensure that proper
accounting is followed and generally accepted accounting principles are applied consistently across all
funds.
Additionally, we recommend that management implement measures to ensure that transfers between
funds get proper prior approval, possess economic substance, and the purpose of the transfers are in
accordance with management's intentions. We also recommend that capital asset transactions are
reviewed monthly so that discrepancies such as those described above can be more easily and quickly
researched and resolved.
CITY OF ALLEN, TEXAS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Finding # 2005-01 — Approval of Journal Entries (continued)
Managements Response:
Late in September 2005, management noticed that budget variances were negative in interfund
transfer accounts. The entries were an attempt to move prior year fixed asset entries to different
funds. Management and the auditors were not consulted to determine if in fact the purpose of the
entries causing the variance was correct. Management explained to the staff member that only
budgeted entries could be recorded to these accounts and to communicate with management when
complicated accounting adjustments were needed The staff member made correcting entries that
eliminated the variances then shortly thereafter left the employment of the City.
Another staff member recently hired was then asked to take over the accounting of capital projects,
fixed assets and depreciation. At the end of September 2005, the department then began preparing
year-end reconciliations and schedules for the audit.
During the audit, the correcting entries were determined to also be incorrect and the new staff
member had to make more correcting entries which were difficult due to the lack of documentation
with the incorrect entries. Since fixed assets and depreciation schedules had already been
completed, reversing the incorrect entries required additional time for both current staff and the
auditors.
The auditors recommend that review processes in the department be strengthen and to implement
prior approval for interfund transfers. Budget variances are the indicators already used to monitor
problem areas. Unfortunately this is an isolated incident caused by an employee who is no longer with
the City. Current staff has good working relationships among each other and have been encouraged
to keep open communication with management and to discuss accounting issues together to
determine the appropriate action to take.
Current staffing levels restrict time spent on each accounting function. An additional degreed
accountant will be requested for the 2006-2007 fiscal year to improve work levels.
CITY OF ALLEN, TEXAS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Finding # 2005-02 — Liability for Compensated Absences
Criteria or Specific Requirement:
Sick leave does not qualify as a compensated absence because It is contingent on a future event
(illness) that is beyond the control of both employer and employee However, when a portion of sick
leave is payable upon termination, it is no longer contingent upon a future event. The amount of the
liability to be recorded should be an estimate of the earned sick leave that will be paid.
Condition
( ) Compliance Finding ( X ) Reportable Condition ( ) Material Weakness.
Context
During our audit of long -tens liabilities, we noted that while it is the policy of the City to make payments to
employees upon termination for a portion of their balance of unused sick leave, the City does not have a
documented approach to measure the amount of the liability for sick leave earned that is estimated to be
paid at termination. To date, the City has relied upon automated balances generated by the payroll
system for determining the amount of eamed but unused sick leave
Effect:
As a result of the City's inability to determine the amount of earned but unused sick leave that is
earned and expected to be paid, the reported liability for compensated absences can potentially be
overstated, which could ultimately result in incorrect financial reporting
Recommendations:
We recommend that management develop a methodology to estimate the amount of sick leave that is
earned and expected to be paid at the time of employee termination.
Management's Response:
Staffing limitations has made the department rely on the automated process to calculate the
compensated absence balances Since this entry is based on estimations rather than actual amounts,
the department will develop a methodology to estimate the sick leave and implement this change
during the 2005-2006 fiscal year.
Section III - Federal Awards Findings and Questioned Costs
This section identifies the reportable conditions, material weaknesses, and instances of noncompliance,
including questioned costs, related to the audit of major federal programs, as required to be reported by
Circular A-133 Compliance Supplement, section .510. Where practical, findings should be organized by
federal agency or pass-through entity
There were no findings for the year ended September 30, 2005.
CITY OF ALLEN, TEXAS
CORRECTIVE ACTION PLAN
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Finding # 2005-01
Recommendations:
We recommended that the finance department consider enhancing and strengthening the current
review process over the approval and recording of journal entries. Significant, unusual, and non-
recurring transactions should specifically be reviewed and approved by management to ensure that
proper accounting is followed and generally accepted accounting principles are applied consistently
across all funds.
Additionally, we recommended that management implement measures to ensure that transfers between
funds get proper prior approval, possess economic substance, and the purpose of the transfers are in
accordance with management's intentions. We also recommend that capital asset transactions are
reviewed monthly so that discrepancies such as those described above can be more easily and quickly
researched and resolved.
Action Taken:
The auditors recommend that review processes in the department be strengthen and to implement
prior approval for interfund transfers Budget variances are the indicators already used to monitor
problem areas. Unfortunately this is an isolated incident caused by an employee who is no longer with
the City. Current staff has good working relationships among each other and have been encouraged
to keep open communication with management and to discuss accounting issues together to
determine the appropriate action to take.
Current staffing levels restrict time spent on each accounting function. An additional degreed
accountant will be requested for the 2006-2007 fiscal year to improve work levels.
Finding # 2005-02
Recommendation:
We recommended that management develop a methodology to estimate the amount of sick leave that is
earned and expected to be paid at the time of employee termination.
Action Taken:
Staffing limitations has made the department rely on the automated process to calculate the
compensated absence balances. Since this entry is based on estimations rather than actual amounts,
the department will develop a methodology to estimate the sick leave and implement this change
during the 2005-2006 fiscal year.
CITY OF ALLEN, TEXAS
SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
There were no findings for the year ended September 30, 2004.
10
SUPPLEMENTARY INFORMATION
CITY OF ALLEN, TEXAS
SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS
YEAR ENDED SEPTEMBER 30, 2005
Federal
Federal Grantor/Pass-Through CFDA
Grantor/Program Title Number
EXPENDITURES OF FEDERAL AWARDS
United States Department of Housina and Urban Dev.
Community Development Block Grant Programs
Total U.S Department of Housing and Urban Dev.
United States Department of Homeland Security,
Officeof Domestic Preparedness
Pass Through Texas Engineering Extension Service
2003 State Homeland Securely Grant Program
2004 State Homeland Security Grant Program
2004 State Homeland Security LETPP
2003 Urban Area Security Initiative II
2004 Urban Area Security Initiative II
Operations and Firefighter Safety
Total U.S Department of Homeland Security
National Endowment for the Humanities
Alexander Hamilton: The Man Who Made Modem America
Total Expenditures of Federal Awards
EXPENDITURES OF STATE AWARDS
Texas Comptroller of Public Accounts:
TCLEOSE Police Training Grant
LEOSE Fire Training Grant
Tobacco Compliance Grant
Total Texas Comptroller of Public Accounts
Texas Department of Transportation:
STEP Comprehensive
Total Texas Department of Transportation
Office of the Governor. Criminal Justice Division
Collin County Child Abuse Task Force Investigator
Collin County Child Abuse Task Force Investigator
Digital Voice Recording System
Total Office of the Governor, CJD
Texas State Librery and Archives Commission:
Lone Star Libraries Grant Program
Total Texas State Library and Archives Commission
See Notes to Schedule of Expenditures
of Federal and State Awards
11
14 219
Contract
Expenditures
B -04 -MC -08-0044 $ 248,260
248,260
97.004
2003111924
22,396
97004
2004 -GE -T4-0015
144,298
97004
2004LETPP-1924
29,136
97008
2003 -EU -T3-0043
157,037
97008
2004 -TU -T4-0013
224,173
97044
EMW-2004-FG-06107
64,463
641.502
45,164
GL -50709-05
1,000
890,762
17560049128-005
3,559
17560049128-004
138
17560049128-005
2,786
6,482
585XXF6023 34.267
34,267
SF -05-J20-17261-01
60,861
SF -06-A10-17261-02
5,318
LB -03-A10-18075-01
20,000
86.180
442-05007 10,166
10,166
CITY OF ALLEN, TEXAS
SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
Federal Grantor/Pass-Through
Grantor/Program Title
Federal
CFDA Contract
Number Number
Expenditures
Texas Department of State Health
Cardiovascular Health and Wellness Program
7560049128 2005
20,661
Cardiovascular Health and Wellness Program
7560049128 2006
2,741
Total Texas Department of Health
23,402
Texas Parks and Wildlife Denarbnent
Allen Station Park It
Total Texas Parks and Wildlife Department
Texas Commission on Environmental Duality
Pass Through North Central Texas Council of Governments
Education Specialist
Total Texas Parks and Wildlife Department
Total Expenditures of State Awards
Total Expenditures of Federal antl State Awards
See Notes to Schedule of Expenditures
of Federal and State Awards
12
48-01049 468,575
468,575
5824-65538 35,681
35,681
629,072
$ 1,519,834
CITY OF ALLEN, TEXAS
NOTES TO SCHEDULE OF EXPENDITURES
OF FEDERAL AND STATE AWARDS
Note 1 General
The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal
awards programs of the City of Allen, Texas. The City's accounting policies and procedures are
defined in the Note 1 to the financial statements All awards received directly from federal agencies
as well as awards passed through other government agencies have been included in the
accompanying schedule.
Note 2. Basis of Presentation
The accompanying Schedule of Expenditures of Federal Awards is presented using the accrual basis
of accounting. Under this method, revenues are recorded when earned and expenses are recorded at
the time liabilities are incurred. All grants are accounted for in special revenue funds.
Note 3. Relationship to Federal and State Financial Reports
Amounts reported in the accompanying schedule may not agree with amounts reported in related
federal and state financial reports since the City used the modified accrual basis of accounting in
preparing the schedule and the cash basis in preparing federal and state financial reports.
13