City Of Allen FY17 CAFR.pdf
CITY OF ALLEN, TEXAS
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FISCAL YEAR ENDED
SEPTEMBER 30, 2017
AS PREPARED BY THE
FINANCE DEPARTMENT
CITY OF ALLEN, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017
TABLE OF CONTENTS
EXHIBIT Page
I. INTRODUCTORY SECTION
Letter of Transmittal i
Certificate of Achievement vi
Organizational Chart vii
Elected Officials and Administrative Officers viii
II. FINANCIAL SECTION
Independent Auditor’s Report 1
A. MANAGEMENT’S DISCUSSION AND ANALYSIS 4
B. BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Position 1 17
Statement of Activities 2 18
Fund Financial Statements
Governmental Funds Financial Statements
Balance Sheet – Governmental Funds 3 20
Reconciliation of the Balance Sheet of Governmental
Funds to the Statement of Net Position 4 22
Statement of Revenues, Expenditures and
Changes in Fund Balances – Governmental Funds 5 23
Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances
of Governmental Funds to the Statement
of Activities 6 25
Proprietary Funds Financial Statements
Statement of Net Position – Proprietary Funds 7 26
Reconciliation of the Statement of Net Position
Proprietary Funds to the Government-wide
Statement of Net Position 8 27
Statement of Revenues, Expenses and Changes
In Net Position – Proprietary Funds 9 28
Reconciliation of the Statement of Revenues,
Expenses and Changes in Net Position of
Proprietary Funds to the Statement of Activities 10 29
Statement of Cash Flows – Proprietary Funds 11 30
Component Units Financial Statements
Statement of Net Position – Component Units 12 31
Statement of Activities – Component Units 13 32
CITY OF ALLEN, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017
TABLE OF CONTENTS
EXHIBIT Page
Notes To Financial Statements
Note 1. Summary of Significant Accounting Policies 33
Note 2. Deposits, Investments and Investment Policies 41
Note 3. Receivables 45
Note 4. Capital Assets 46
Note 5. Long-Term Debt 50
Note 6. Interfund Transfers 58
Note 7. Retirement Plan 59
Note 8. Water and Sewer Contracts 64
Note 9. Deferred Compensation Plan 64
Note 10. Risk Management 64
Note 11. Other Postemployment Benefits (OPEB) 65
Note 12. Tax Abatements and Economic Incentives 68
Note 13 Commitments and Contingent Liabilities 69
Note 14 Restatement of Beginning Net Position and Fund Balance 70
C. REQUIRED SUPPLEMENTARY INFORMATION
Schedule of OPEB Funding Progress and Contributions A-1 71
Schedule of Changes in the Net Pension Liability
And Related Ratios - TMRS A-2 72
Schedule of Contributions – TMRS A-3 73
General Fund Schedule of Revenues, Expenditures
And Changes in Fund Balances – Budget and Actual A-4 74
Notes to Required Supplementary Information 75
D. COMBINING AND BUDGETARY COMPARISON SCHEDULES
Major Governmental Funds
Budgetary Comparison Schedule – Debt Service Fund B-1 77
Nonmajor Governmental Funds
Combining Balance Sheet B-2 79
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances B-3 80
CITY OF ALLEN, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017
TABLE OF CONTENTS
EXHIBIT Page
Internal Service Funds
Combining Statement of Net Position C-1 82
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position C-2 83
Combining Statement of Cash Flows C-3 84
Discretely Presented Component Units
Balance Sheet-Allen Economic Development Corporation D-1 86
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position D-2 87
Statement of Revenues, Expenditures and Changes
in Fund Balances D-3 88
Reconciliation of the Governmental Funds Statement of
Revenues, Expenditures and Changes in Fund Balance D-4 89
Balance Sheet-Allen Community Development Corporation D-5 90
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position D-6 91
Statement of Revenues Expenditures and Changes
in Fund Balances D-7 92
Reconciliation of the Governmental Funds Statement of
Revenues, Expenditures and Changes in Fund Balance D-8 93
Capital Assets Used in the Operations of Governmental Funds
Schedule by Source E-1 94
Schedule by Function and Activity E-2 95
Schedule of Changes by Function and Activity E-3 97
TABLE Page
III. STATISTICAL SECTION
Net Position by Component 1 99
Changes in Net Position 2 100
Fund Balances, Governmental Funds 3 102
Changes in Fund Balances, Governmental Funds 4 103
Assessed Value and Estimated Actual Value of Taxable Property 5 104
Direct and Overlapping Property Tax Rates 6 105
Principal Property Taxpayers 7 106
Ad Valorem Tax Levies and Collections 8 107
Ratio of Outstanding Debt by Type 9 108
Ratio of General Bonded Debt Outstanding 10 109
Direct and Overlapping Governmental Activities Debt 11 110
Pledged-Revenue Coverage 12 111
Demographic and Economic Statistics 13 112
Principal Employers 14 113
Full-Time Equivalent City Government Employees by
Function/Program 15 114
Operating Indicators by Function/Program 16 115
Capital Asset Statistics by Function/Program 17 116
INTRODUCTORY SECTION
305 CENTURY PARKWAY • ALLEN, TEXAS 75013-8042 • 214.509.4100
WEB: www.cityofallen.org • EMAIL: coa@cityofallen.org
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February 19, 2018
Honorable Mayor and City Council, City Manager,
Citizens of Allen:
The Finance Department is pleased to submit the Comprehensive Annual Financial Report (CAFR) of the
City of Allen, Texas (the City), for the fiscal year ended September 30, 2017.
This report is published to provide the City Council, our citizens, City staff, and other readers with detailed
information concerning the financial position and activities of the City. Management has prepared the report
and is responsible for both the accuracy of the presented data and the completeness and fairness of the
presentation, including all disclosures. To the best of our knowledge and belief, the enclosed data is
complete and reliable in all material respects. All disclosures necessary to enable the reader to gain an
understanding of the City’s financial activities have been included.
Also included in this report is an unmodified (“clean”) opinion on the City of Allen’s financial statements for
the year ended September 30, 2017 issued by Weaver and Tidwell, L.L.P. The independent auditors’ report
is located in the beginning of the financial section of the CAFR.
REPORTING ENTITY
This report includes all funds of the City including its component units. Component units are legally separate
entities for which the City is financially accountable but are not part of the City’s operations. The Allen
Economic Development Corporation (AEDC) and Allen Community Development Corporation (ACDC) are
included in the financial statements as discretely presented component units.
CITY PROFILE
The City of Allen is the fourth largest city in population in Collin County, one of the fastest growing counties
in the nation. Located 25 miles north of downtown Dallas on US 75, Allen encompasses approximately 27
square miles. The George Bush Tollway and Sam Rayburn Tollway (Hwy 121) provide direct access into
the Metroplex and access to Love Field (27 miles) and Dallas Ft Worth International Airport (31 miles).
With a population of 4.94 million in a 30-mile radius, Allen sits in a prime location for restaurants, shopping
centers and other retail venues. The quality of the Allen community attracts well-educated residents with a
high level of spending power and disposable income. Current population of 99,882 at September 30, 2017
is estimated to grow to 125,000 at build out.
Incorporated in 1953, Allen is a home rule charter city. The Charter can be amended only by a vote of the
people and provides for seven non-partisan Council members, including the Mayor, to be elected at-large
to staggered terms of three years. The Council is responsible for enacting ordinances, resolutions, and
regulations governing the City as well as adopting the annual budget which serves as the foundation for
financial planning and control. The City Council appoints the City Manager, who has full responsibility for
carrying out Council policies and administering City operations. The Council also appoints the Municipal
Judge and various advisory boards.
City service departments provide a full range of services including police and fire protection emergency
ambulance service, municipal courts, building code enforcement, library, parks and recreation, tourism,
water and sewer services, sanitation/solid waste services, traffic engineering, and construction and
maintenance of streets and infrastructure. The City employs 797.95 full time equivalent positions.
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ECONOMIC CONDITIONS AND OUTLOOK
Regional Economy
In November 2016 the Dallas Morning News ranked Allen as the #2 Best Neighborhood in North Texas
citing the “small-town feel” and “hometown pride”. The City of Allen unemployment rate as of September
2017 was 3.1% and the Collin County unemployment rate was 3.2%, both of which were below the national
rate of 4.2%. The Dallas-Fort Worth area has an incredibly diversified economy, excels in a low
unemployment rate, a growing labor force, low cost of living, affordable real estate costs and a superior
business climate. The lower cost of living creates huge savings to corporations and their employees when
relocating to Texas.
Allen’s Position in the Region
Along with an ideal location just 12 miles north of Dallas on US 75, Allen’s appealing demographics have
spurred along record-breaking growth. The population of 99,882 is expanding with an estimated 4.2%
growth rate. Allen has benefited from a well-educated and affluent workforce with an average family income
of $131,926 as reported by the U.S. Census Bureau, American Community Survey. With an average age
of 35.7, over 53.1% of adults have a Bachelor’s degree or higher and the average earnings for a resident
with a bachelor’s degree is $67,414. Allen is a community that offers exceptional housing, award-winning
schools, steady job growth, and dynamic business climate all of which are strong factors in the success of
the City’s economy. The quality of the Allen community attracts residents with a high level of spending
power and disposable income. This makes Allen a prime location for restaurants, shopping centers and
other retail venues.
Allen’s progress continues to be recognized as the City was named the #2 “Best Places to Live” in MONEY’s
prestigious annual list in October 2017.
Long Range Financial Planning
The City’s responsiveness to emerging economic challenges and its long-term planning have been key
factors in its fiscal health. The City has a five-year financial plan and a seven-year capital improvement plan
where departments reevaluate project priorities, review funding sources, and identify new projects as
needed. Using this plan allows the City to plan the timing of projects associated with debt issuance and the
effects on the tax rate. Standard and Poor’s credit rating report stated, “the city’s Financial Management
Assessment (FMA) to be ‘strong’, indicating practices are strong, well embedded and likely sustainable.”
The City continues to maintain the highest ‘AAA’ rating from Standard and Poor’s and during 2016 received
a rating increase from Aa1 to Aaa from Moody’s on its general obligation, certificate of obligation bonds.
This increase makes the City of Allen just one of seven Cities in the State of Texas to have both a AAA
rating with both S&P and Moody’s. The Water and Sewer Revenue Bonds are rated ‘AAA’ from Standard
and Poor’s and Aa2 from Moody’s. S&P’s August 2016 rating report supporting the ‘AAA’ rating stated the
following credit factors:
Strong local economy
High effective buying income, strong market values
Budgetary flexibility and strong year end reserves and liquidity
History of strong financial management practices that are sustainable
Faster than average debt amortization and moderate overlapping debt, while the debt liabilities
profile is adequate
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During FY2016, the City completed a CIP Bond Program totaling $93 million estimated to be completed
over seven years. In FY2017, the City issued $11,845,000 related to the bond program. For more
information, related to this program please visit the following link: http://www.cityofallen.org/1718/Allen-
Bond-2016.
Additionally, during FY2017 the Allen Economic Development Corporation issued Sales Tax Revenue
Refunding Bonds, Series 2017A which refunded the series 2008 and 2010A outstanding sales tax revenue
bonds resulting in a net present value savings of $1,151,087. The Allen Economic Development
Corporation also issued Sales Tax Revenue Bonds, Series 2017B in the amount of $6,140,000 for the
purpose of land acquisition and infrastructure improvements.
Fiscal Year 2017 Highlights
During FY2017, the City accomplished many initiatives to enhance livability, improve personal experience,
invest in the future, and celebrate the successes. From quality neighborhoods to park development,
community safety, and environmental initiatives, it’s no surprise that people move here because they want
Allen’s quality of life.
As the city’s population continued to grow, the need for new housing continued as well, with the Community
Development Department issuing over four-hundred and thirty building permits. The City welcomed a
variety of new businesses to the city, including Compass Data Center, Kaizen, NetScout, Watchgaurd Video
and a major expansion to the Allen Premium Outlet Mall. Facilitated several new residential developments
including The Village at Twin Creeks – Phase III, Walnut Springs, Ridgeview Crossing and Montgomery
Ridge. The City also administered Community Development Block Grant funds which went toward the
rehabilitation of ten homes within Allen’s older neighborhoods.
Despite a slight rise in crime statistics in 2017, the City of Allen remains one of the safest communities in
the state and nation. The Allen Police Department continually strives to rapidly address emerging crime
issues through its innovative Community Relations programs, which have also enhanced community
engagement. As an example of Allen’s continued use of technology to increase service delivery, the Allen
Police Department has deployed 100 body-worn cameras to all Patrol Officers, which will ensure the safety
of Officers and Citizens, and continue to maintain public trust and confidence.
The Fire Department also improved their service to the community by opening the remodeled and expanded
Fire Station #2. The Fire Department reduced response times, re-wrote medical treatment protocols to
include the latest in-patient care, updated fire apparatus to meet the demands of a growing community,
expanded professional development programs for staff, and added automatic patient cot loading systems
to six ambulances. Additionally, staff applied for and received $550,000+ from the Texas Ambulance
Supplemental Payment Program. Lastly, the department increased inter-operability with neighboring fire
departments through joint training and resource sharing.
The City’s environmental conservation and green initiatives continued to grow and develop with the
implementation of new energy management systems at City Hall, another year of recycling at City facilities
with an increased recycling presence at City parks, another year of chemical redistribution at the Chemical
Reuse Center, coordination of special events and public education programs related to protecting and
conserving natural resources, and winning multiple awards from regional, state and national organizations
dedicated to resource conservation. The City has continually been recognized for its efforts to expand in
this area, culminating in the winning of the National Recreation and Park Association’s Gold Medal Award
and being recognized by Keep Texas Beautiful as a Gold Star Affiliate and Governor’s Community
Achievement Award - Sustained Excellence Award Winner.
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The Library continued to emphasize customer service while supporting lifelong learning, literacy, access to
information, and a sense of community. The Library checked out over 1 million items for the third
consecutive year, greeted more than 396,000 visitors, and hosted slightly more than 84,000 participants for
Library programs. The Library reached new highs in checkouts for at least the 22nd consecutive year, in
visitors for the 4th consecutive year, and program attendance for the 9th consecutive year while continuing
to provide a vibrant, welcoming environment for Allen citizens. Library programs encouraged reading
among all segments of the community from infants to seniors, including story times and the “1000 Books
Before Kindergarten” initiative for preschoolers as well as Summer Reading Clubs for children, teens, and
adults. The size and use of the Library’s digital collection, both e-books and e-audiobooks, continued to
grow while physical materials such as books and DVD’s, also remained popular. To support literacy and
lifelong learning, the Library offered arts, science, reading, and other programs for children and teens. For
adults, literary, cultural, historical, and musical events were supplemented by programs about food, crafts,
travel, health, and other topics of interest.
In 2017, the CDC provided funding for several capital projects such as the finish out of Ford Pool,
replacement of playground equipment at Green Park, engineering design of Windridge Neighborhood Park,
installation of LED signs at City recreation centers, engineering design of Spirit Park, installation of security
cameras at Watters Station Park, and continued Trail Development and Enhancement.
The Allen Economic Development Corporation worked to bring a variety of companies and related
development to Allen, including: Breaking ground on the Watters Creek Convention Center, a $91 million
convention center and four-star hotel slated to open in January 2019; finalizing plans and breaking ground
on One Bethany at Watters Creek for a 125,000 SF Class A office building opening in February 2018;
winning the relocation of NETSCOUT, a cyber-security company, which will bring 540 high paying jobs to
a new $54 million headquarters building in One Bethany at Watters Creek in July 2018; announcing a
development partnership with Hines for The Strand, which will bring over 3.5 million SF of mixed-use
development to the 121 Corridor with corporate campus, office, retail, and residential uses; recruiting and
assisting CyrusOne with a 1,000,000 SF data center campus which will increase the city’s property tax base
by up to $1 billion when completed; assisting and opening the first $50 million phase of Compass
Datacenters $300 million data center campus; and assisting and breaking ground on local company
WatchGuard Video’s expansion into a new $46 million headquarters facility. These projects not only
increased the city’s property tax base, but also positively affected the city’s economy by increasing the
number of jobs in Allen.
One of the city’s major draws, Allen Event Center, is home to a wide range of entertaining shows and
events- Disney on Ice, Theresa Caputo, The 1975, Panic at the Disco, Professional Bull Riding, Boxing and
other amateur and collegiate sports. The Facility hosts a number of trade shows such as Home & Garden
Shows, Gun Shows, Job Fairs and among others. The Allen Event Center was also the home to
professional sports; the Allen American Hockey team, the Dallas Sidekicks Soccer team, and the Texas
Revolution Indoor Football team. The Texas Revolution capped a successful season by winning, The
Champions Cup, after winning the IFL championship.
Allen Convention and Visitors Bureau (ACVB), funded by the Hotel Tax Fund, markets Allen as a destination
for meetings, conventions and sporting events. This helps generate economic activity from the visitors to
Allen. Events such as the National Collegiate Wrestling Association Championship, Dallas Cup T &T, Texas
Twisters, Texas Association of Spots Officials resulted in over 8,000 visitors that booked approximately
3,500 hotel room nights, and generated more than $3.4 million in economic activity. The CVB also
stimulates regional tourism by promoting the city for shopping, dining and entertainment.
With all this happening within Allen’s borders, it’s clear that the city is working hard to provide every resident
and visitor with great experiences, services and safety.
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Relevant Financial Policies
A resolution amending the Debt Management and Fund Balance Reserve Policy to reflect new accounting
requirements (GASB 54) was approved by Council in September 2011. The Investment Policy is also
approved annually by the Council. All other policies (accounting, budgeting, procurement, capital
improvements, asset management, and risk management) are internal policies approved by the Finance
department and City Manager. These policies follow guidelines established by management, professional
organizations and/or state and federal laws and are reviewed on a periodic basis. Recently, the
Training/Travel Policy was updated to reflect changes in city processes and provide added flexibility for
travelers, as well as provide greater ease for Finance staff during the reconciliation process. On a quarterly
basis the Finance Department prepares financial and investment reports which are presented to the City
Council.
AWARDS AND ACKNOWLEDGEMENTS
Awards -- The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Allen for its CAFR
for the fiscal year ended September 30, 2016. This was the eighteenth consecutive year that the
government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a
government must publish an easily readable and efficiently organized comprehensive annual financial
report. This report must satisfy both generally accepted accounting principles and applicable legal
requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR
continues to meet the Certificate of Achievement Program’s requirements, and we are submitting it to the
GFOA to determine its eligibility for another certificate.
Acknowledgements – We would like to express our sincere gratitude to City personnel who contributed
to this report, especially the accounting department. Appreciation is expressed to representatives of Weaver
for their invaluable assistance in producing the final document and to the City Manager’s office and the
members of the City Council whose leadership and commitment are vital to the health and vitality of Allen.
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CITY OF ALLEN, TEXAS
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR THE YEAR ENDED
SEPTEMBER 30, 2017
Councilmembers
Mayor Stephen Terrell
Mayor Pro Tem, Place No. 5 Gary L. Caplinger
Councilmember, Place No. 1 Kurt Kizer
Councilmember, Place No. 2 Carl Clemencich
Councilmember, Place No. 3 Debbie Stout
Councilmember, Place No. 4 Robin L. Sedlacek
Councilmember, Place No. 6 Baine Brooks
Management Staff
City Manager Peter H. Vargas
Chief Financial Officer Eric Cannon
Assistant Chief Financial Officer Joanne Stoehr
Controller Steven Glickman
FINANCIAL SECTION
AN INDEPENDENT MEMBER OF
BAKER TILLY INTERNATIONAL
WEAVER AND TIDWELL, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS
12221 MERIT DRIVE, SUITE 1400, DALLAS, TX 75251
P: 972.490.1970 F: 972.702.8321
Independent Auditor’s Report
Honorable Mayor and Members of the City Council
City of Allen, Texas
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-
type activities, the aggregate discretely presented component units, each major fund, and the
aggregate remaining fund information of the City of Allen, Texas (the City), as of and for the year
ended September 30, 2017, and the related notes to the financial statements, which collectively
comprise the City’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
The City’s management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contain ed in Government Auditing Standards, issued
by the Comptroller General of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures th at
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting po licies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentati on
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to pro vide a basis
for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund
information of the City, as of September 30, 2017, and the respective changes in financial position and,
where applicable, cash flows thereof for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
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Honorable Mayor and Members of the City Council
City of Allen, Texas
Emphasis of Matter
As discussed in Note 14 to the basic financial statements, the 2016 financial statements have been
restated to correct a misstatement. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United Stat es of America require that the
management’s discussion and analysis, schedule of changes in net pension liability and related ratios,
schedule of contributions, schedule of OPEB funding progress and contributions, and budgetary
comparison information on pages 4 through 16 and 71 through 75 be presented to supplement the
basic financial statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational, economic,
or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America,
which consisted of inquiries of management about the methods of preparing the information and
comparing the information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial stateme nts that
collectively comprise the City’s basic financial statements. The introductory section, combining and
budgetary comparison schedules, and statistical section are presented for purposes of additional
analysis and are not a required part of the basic financial statements.
The combining and budgetary comparison schedules, as listed in the table of contents, are the
responsibility of management and w ere derived from and relate directly to the underlying accounting
and other records used to prepare the basic financial statements. Such information has been subjected
to the auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial
statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the supplementary information is
fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in
the audit of the basic financial statements, and accord ingly, we do not express an opinion or provide
any assurance on them.
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Honorable Mayor and Members of the City Council
City of Allen, Texas
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated February 19,
2018 on our consideration of the City’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the City’s internal control
over financial reporting and compliance.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
February 19, 2018
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MANAGEMENT’S DISCUSSION AND
ANALYSIS
CITY OF ALLEN, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(UNAUDITED)
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As management of the City of Allen, Texas, we offer readers of the City’s financial statements this narrative
overview and analysis of the financial activities of the City for the fiscal year ended.
FINANCIAL HIGHLIGHTS
The assets and deferred outflows of resources of the City exceeded its liabilities and deferred
inflows of resources (net position) at September 30, 2017 $560,570,771. Of this amount,
$47,823,031 (unrestricted net position) may be used to meet the government’s ongoing
obligations to citizens and creditors.
The City’s total net position increased by $8,999,079. The increase is primarily a result of an
increase in revenues from property tax and charges for services in both governmental and
business-type activities.
The City’s governmental funds reported combined ending fund balances of $79,410,464 at
September 30, 2017, an increase of $10,977,782 from the prior fiscal year. This increase is
attributed to the issuance of $11,845,000 in general obligation bonds in fiscal year 2017.
At the end of the fiscal year, the unassigned fund balance for the General Fund was
$19,684,053 or 22% of total General Fund expenditures.
On a government-wide basis, the City’s total liabilities increased by $3,970,650, primarily as
a result of the City issuing $11,845,000 in general obligation bonds in fiscal year 2017,
increases in the net pension liability, and increases in accounts payable at year-end.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements.
The City’s basic financial statements are comprised of three components: 1) government-wide financial
statements, 2) fund financial statements and 3) notes to the financial statements. This report also contains
other supplementary information in addition to the basic financial statements.
Government-wide financial statements - The government-wide financial statements are designed to
provide readers with a broad overview of the City’s finances, in a manner similar to that of a private-sector
business.
The Statement of Net Position presents information on all of the City’s assets and deferred outflows of
resources and liabilities and deferred inflows of resources, with the difference reported as net position.
Over time, increases or decreases in net position may serve as a useful indicator of whether the financial
position of the City is improving or deteriorating. To assess the overall health of the City, other non-financial
factors should also be taken into consideration, such as changes in the City’s property tax base and the
condition of the City’s infrastructure.
The Statement of Activities presents information showing how the City’s net position changed during the
fiscal year. All changes in net position are reported when the underlying event giving rise to the change
occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this
statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes
and earned but unused compensated absences). Both the Statement of Net Position and the Statement of
Activities are prepared utilizing the accrual basis of accounting.
CITY OF ALLEN, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(UNAUDITED)
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In the government-wide financial statements, pages 17 through 19, the City is divided into three kinds of
activities:
Governmental activities - Most of the City’s basic services are reported here, including the
police, fire, library, community development, parks and recreation, municipal court, and
general administration. Property and sales taxes, charges for services, franchise fees, and
state and federal grants finance most of these activities.
Business-type activities - The City’s water, sewer, solid waste, drainage, and golf course
operations are reported here. These are functions intended to recover all or a significant
portion of their costs through user fees and charges.
Component units - The City includes two separate legal entities in this report: the Allen
Economic Development Corporation (AEDC) and the Allen Community Development
Corporation (ACDC). Although legally separate, these component units are important
because the City is financially accountable for them.
Fund financial statements - A fund is a grouping of related accounts used to maintain control over
resources that have been segregated for specific activities or objectives. The City, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All of the funds of the City can be divided into two categories: governmental and proprietary.
Governmental Funds - These funds are used to account for the majority of the City’s activities, which are
essentially the same functions as governmental activities in the government-wide statements. However,
unlike the government-wide financial statements, governmental fund financial statements focus on near-
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, General Capital Projects Fund and
General Obligation Bond Fund, all of which are considered to be major funds. Data for the other
governmental funds are combined into a single, aggregated presentation. Individual fund data for each of
the non-major governmental funds is provided in the form of combining statements elsewhere in this report.
The basic governmental fund financial statements can be found on pages 20 through 25 of this report.
Proprietary Funds - The City maintains two different types of proprietary funds: enterprise funds and
internal service funds. Enterprise funds are used to report the same functions presented as business-type
activities in the government-wide financial statements. The City uses enterprise funds to account for its
water and sewer operations, solid waste collection, disposal services, drainage operations, and golf course
operations. Internal service funds are an accounting device used to accumulate and allocate costs
internally among the City’s various functions. The City uses its internal service funds to account for vehicle,
machinery, and equipment replacements and costs associated with workers compensation, liability and
property insurance, and employee medical and dental insurance programs. These services have been
included within governmental activities in the government-wide financial statements as they predominantly
benefit governmental rather than business-type functions.
CITY OF ALLEN, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(UNAUDITED)
6
Proprietary funds provide the same type of information as the government-wide financial statements, only
in more detail. The proprietary fund financial statements provide separate information for the water and
sewer operations, solid waste collection, and disposal services since they are considered to be major funds
of the City. The Drainage Fund and the Golf Course Fund are the only remaining enterprise funds, and
they are being presented as major funds even though they do not meet the criteria of a major fund. All
internal service funds are combined into a single aggregated presentation in the proprietary fund financial
statements. Individual fund data for the internal service funds is provided in the form of combining
statements elsewhere in this report.
The basic proprietary fund financial statements can be found on pages 26 through 30 of this report.
Notes to the Financial Statements - Additional information that is essential to a full understanding of the
data provided in the government-wide and fund financial statements is provided in the notes to the financial
statements found on pages 33 through 70 of this report.
Other Information - In addition to the basic financial statements and accompanying notes, this report also
presents required supplementary information highlighting budgetary information for the General Fund,
pension schedules for TMRS, and a funding schedule for OPEB found on pages 71 through 75 of this
report.
The combining statements referred to earlier regarding non-major governmental funds and internal service
funds are presented following the required supplementary information.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, over time net position may serve as a useful indicator of the financial position of a
government. The assets and deferred outflows of the City of Allen exceed the liabilities and deferred inflows
by $560,570,771 as of September 30, 2017. By far the largest portion of the City’s net position (
$474,249,029 or 85%) reflects its net investment in capital assets (i.e. land, buildings, infrastructure,
vehicles, machinery, and equipment). The City uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City reports the net
investment in its capital assets, it should be noted that the resources needed to repay this debt must be
provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
2017 2016 2017 2016 2017 2016
106,349,182$ 93,550,322$ 39,475,215$ 40,184,714$ 145,824,397$ 133,735,036$
446,809,256 445,609,963 112,803,250 112,164,832 559,612,506 557,774,795
553,158,438 539,160,285 152,278,465 152,349,546 705,436,903 691,509,831
12,470,468 13,623,868 1,457,585 1,601,761 13,928,053 15,225,629
132,982,565 130,168,562 9,193,294 10,181,900 142,175,859 140,350,462
11,191,215 9,796,930 4,383,757 3,632,789 15,574,972 13,429,719
144,173,780 139,965,492 13,577,051 13,814,689 157,750,831 153,780,181
927,106 1,230,633 116,248 152,954 1,043,354 1,383,587
- -
366,322,218 364,667,251 107,926,811 106,174,191 474,249,029 470,841,442
38,303,226 32,485,173 195,485 216,664 38,498,711 32,701,837
15,902,576 14,435,604 31,920,455 33,592,809 47,823,031 48,028,413
Total Net Position 420,528,020$ 411,588,028$ 140,042,751$ 139,983,664$ 560,570,771$ 551,571,692$
Current and other assets
Net investment in capital
assets
Restricted
Unrestricted
Capital assets
Total Assets
Long-term liabilities
Other liabilities
Total Liabilities
Net Position:
Deferred outflows of resources
Deferred inflows of resources
Table 1
Statement of Net Position
Governmental Activities Business-type Activities Total
CITY OF ALLEN, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(UNAUDITED)
7
An additional portion of the City’s net position, $38,498,711, represents resources that are subject to
external restrictions on how they may be used; the remaining balance of $47,823,031 may be used to meet
the government’s ongoing obligations to citizens and creditors.
Analysis of the City’s Operations - As of September 30, 2017, City had an overall increase in net position
of $8,999,079 for the government as a whole which represents an increase of $8,939,992 for governmental
activities and an increase of $59,087 for business-type activities. The increase in governmental activities is
primarily a result of an increase in revenue related to charges for services, capital grants and contributions,
property taxes, sales taxes, other taxes, interest earnings, gain on the sale of capital assets, and
miscellaneous revenue. The increase in business-type activities is primarily a result of an increase in
charges for services and miscellaneous revenue. A summary of the City’s operations for the year ended
September 30, 2017 is provided in Table 2.
2017 2016 2017 2016 2017 2016
Revenues:
Program Revenues:
Charges for services 16,516,224$ 15,707,673$ 48,507,483$ 47,248,254$ 65,023,707$ 63,234,975$
Operating grants and
contributions 2,443,054 1,557,260 - - 2,443,054 1,557,260
Capital grants and
contributions 15,327,094 16,039,869 5,622,911 6,172,301 20,950,005 22,212,170
General Revenues:-
Property taxes 58,816,876 54,102,952 - - 58,816,876 54,102,952
Sales tax 19,450,088 19,274,983 - - 19,450,088 19,274,983
Franchise taxes 7,553,013 7,295,931 - - 7,553,013 7,295,931
Hotel motel taxes 1,547,244 1,607,263 - - 1,547,244 1,607,263
Other taxes 1,912,559 1,621,012 - - 1,912,559 1,621,012
Interest earnings 837,577 735,832 199,508 197,125 1,037,085 932,957
Gain on sale of capital
asset 263,627 - - 15,503 263,627 15,503
Miscellaneous 2,703,964 3,794,277 274,944 - 2,978,908 3,794,277
Total Revenues 127,371,320 121,737,052 54,604,846 53,633,183 181,976,166 175,649,283
Expenses:
General government 28,251,550 25,304,811 - - 28,251,550 25,304,811
Public safety 39,624,788 35,199,937 - - 39,624,788 35,199,937
Public works 20,209,785 19,083,214 - - 20,209,785 19,083,214
Culture and recreation 28,968,534 32,851,598 - - 28,968,534 32,851,598
Community development 3,007,047 3,251,555 - - 3,007,047 3,251,555
Interest on long-term
debt 2,980,513 3,356,234 - - 2,980,513 3,356,234
Water and sewer - - 39,527,816 35,604,182 39,527,816 35,604,182
Solid waste services - - 6,078,853 5,870,269 6,078,853 5,870,269
Drainage - - 1,193,057 1,146,138 1,193,057 1,146,138
Golf course - - 3,135,144 3,089,041 3,135,144 3,089,041
Total Expenses 123,042,217 119,047,349 49,934,870 45,709,630 172,977,087 164,756,979
4,329,103 2,968,751 4,669,976 7,923,553 8,999,079 10,892,304
Transfers 4,610,889 4,790,072 (4,610,889) (4,790,072) - -
Change in net position 8,939,992 7,758,823 59,087 3,133,481 8,999,079 10,892,304
411,588,028 403,829,205 139,983,664 136,140,754 551,571,692 539,969,959
Net position, end of year 420,528,020$ 411,588,028$ 140,042,751$ 139,274,235$ 560,570,771$ 550,862,263$
Net position, beginning of
year, as restated
Table 2
Changes in Net Position
Governmental Activities Business-type Activities Total
Change in net position
before transfers
CITY OF ALLEN, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(UNAUDITED)
8
Governmental activities
Revenues – The following chart visually illustrates the City’s revenue by sources for governmental activities:
Charges for service
12%Operating grants
2%
Capital grants
12%
Property taxes
45%
Sales taxes
15%
Franchise taxes
6%
Other
5%
Transfers
3%
Revenues by Source- Governmental Activities
Revenues for the City’s governmental activities increased by $5,634,268. Major components of revenue
increases and decreases are explained as follows:
Property taxes increased by $4,713,924 or 8% due to an increase of 10% from prior year's
valuation. This increase is due to real property reappraisals and new property additions.
Sales taxes increased by $175,105 over prior year collections.
Operating grants and contributions increased by 57% due to an increase in the number and dollar
value of operating grants awarded during the year.
Charges for services increased by 5% primarily due to an increase in Fire EMS services, and an
increase in street inspection fee revenue.
Fine Revenue (Other Taxes) increased by 18% as a result of warrant revenue and enforcement
increasing.
Interest earnings increased by $101,745, an increase of 14%, as a result of interest rates continuing
to increase.
Expenses for governmental activities increased by $3,994,868 or 3%. Components of increases and
decreases are explained as follows:
Expenses include employee annual merit increases, public safety salary market adjustment, adding
1.0 fulltime equivalent positions in the hotel fund to address goals in the strategic plan and to
maintain the current level of service.
Expenses for Public Safety increased by 13% due primarily to the increase in personnel services
and the salary market adjustment for both Police and Fire.
CITY OF ALLEN, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(UNAUDITED)
9
Expenses for Culture and Recreation increased by 1% due to merit increases, increasing the Parks
and Recreation FTE by 4.6 for the Ford Pool redesign and expansion, to address administrative
duties at the service center, and to address growing maintenance. Additionally, there was an
increase in professional services at the Allen Event Center due to an increase in number of events
held.
Expenses for General Government increased by 12% due to increases in vehicle and equipment
replacement, software maintenance, professional services and personnel.
The following chart illustrates the relationship between expenses and program revenues for governmental
type activities:
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
Expenses and Program Revenues- Governmental
Activities
Expenses
Revenues
Business-type activities –
Revenues – The following chart visually illustrates the City’s revenue by sources for business-type activities:
Charges for services
89%
Capital grants and
contributions
10%
Other
1%
Revenues by Source- Business-type Activities
CITY OF ALLEN, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(UNAUDITED)
10
Business-type activities revenues increased $971,663 or 2%. Major components of the
decreases/increases are as follows:
Charges for services for business-type activities increased by $1,259,229, or 3%, due to an
increase of 4% in sewer charges, and an increase of 9% in golf course revenues. Additionally,
miscellaneous revenue increased $274,944. A significant portion of the total increase was offset
by a $549,390 decrease in capital grants and contributions revenue.
Expenses for business-type activities increased by $4,225,240, or 9%. The increase was due to an increase
of 11% in expenses in the Water and Sewer Fund, an increase of 4% in expenses in the Solid Waste Fund,
and increase of 4% in the expenses in the Drainage Fund, and an increase of 1% in expenses in the Golf
Course Fund. The increase in the Water and Sewer Fund and the Solid Waste Fund was primarily a result
of an increase in the amount paid to North Texas Municipal Water District (NTMWD) as they proceed with
capital expansion plans that increased the City’s costs associated with water and sewer service from the
District. The increases in the Solid Waste Fund and Drainage Fund were the result of increased contractual
services. The increase in the Golf Course Fund was primarily a result of increased personnel costs related
to higher customer volume. The following chart illustrates the relationship between expenses and program
revenues for business-type activities:
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
Water and sewer Solid waste services Drainage Golf course
Expenses and Program Revenues- Business-type
Activities
Expenses
Revenues
CITY OF ALLEN, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(UNAUDITED)
11
FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS
Governmental funds
The focus of the City of Allen’s governmental funds is to provide information on near-term inflows, outflows
and balances of spendable resources. Such information is useful in assessing the City’s measure of a
government’s net resources available for spending at the end of the fiscal year.
At the end of the current fiscal year, the governmental funds reported combined ending fund balances of
$79,410,464, an increase of $10,977,782 in comparison with the prior fiscal year. Approximately 25%, or
$19,684,053, constitutes unassigned fund balances, which are available for spending at the government’s
discretion. The remaining fund balances are classified as assigned, restricted or non-spendable to indicate
that they are not available for new spending allocation. The non-spendable portion includes prepaid items
($126,833), assigned funds for hotel and convention center ($2,000,000), restricted funds for debt service
($1,342,002), capital projects ($44,758,178), tourism ($4,900,938), asset forfeiture ($168,122), state and
federal grants ($274,828), park acquisition and development ($2,088,099), tax increment financing
agreements ($2,866,832), court technology ($111,764), juvenile case manager ($12,827), PEG fees
($937,665), radio system ($48,946), photo red light enforcement ($26,006), court security ($4,461), and
cemetery trust ($58,910).
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the total
unassigned fund balance was $19,684,053. Current operating expenditures had savings of $7,404,084
allowing monies to be transferred to the capital projects fund for self-financing of capital projects. The total
fund balance increased from $21,821,980 to $21,869,796. This increase is due to prudent, conservative
management by City staff.
The Debt Service Fund balance of $1,342,002, all of which is restricted for the payment of debt, increased
from the prior year by $87,601. This increase was due to an increase in investment earnings. The fund
balance meets the FY2017 5-10% of annual debt service requirement of $691,197 to $1,382,394.
The General Capital Projects Fund provides information on cash financed capital projects and had an
ending fund balance of $25,278,216, an increase of $3,113,500. Revenues and other financing sources
totaled $6,931,230, which included $571,974 received from developer for the Montgomery Boulevard
extension, $555,784 received from TASPP for the Fire Department expenditures $469,825 in charges for
services for median improvements, $468,338 in miscellaneous revenue for street improvements, and
$3,700,000 from other funds to cash finance capital projects. Total expenditures and other uses of
$3,817,730 consisted of $783,991 in miscellaneous street and median repair, $567,598 for repairs to the
community ice rink, $450,499 for Ridgeview Drive, $450,000 in capital lease payments, and $153,595 for
intersection improvements.
The General Obligation Bond Fund had an ending fund balance of $19,479,962, an increase of $4,843,995
from the prior year. Expenditures totaled $7,848,327 which primarily included $3,304,215 Spirit Park,
$1,936,097 for public safety radios, and $515,436 for Rolling Hills Park land acquisition.
General Fund Budgetary Highlights
During April and May, all accounts are evaluated to determine if they are in line with the original budgets.
Accounts that are under or over budget are revised to meet year-end estimates. New projects are not
added to the year-end estimate; only the cost of maintaining the current base operation is revised as
needed. As is customary, during FY2016-17, the City Council amended the budget for the General Fund
one time.
CITY OF ALLEN, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(UNAUDITED)
12
Adjustments made during FY2016-17 increased the original revenue budget by $1,171,271 and increased
the expenditure budget by $2,628,864. Due to the actual expenditures being $7,404,084 less than the
revised budget the City was able to transfer $3,400,000 to the General Capital Projects Fund to cash finance
future capital projects and $100,000 to the Golf Course Fund to ensure a positive net position despite actual
revenues being $1,526,479 less than the revised budget. The General Fund's operational expenditure
reserve increased to 90 days from the amended budget of 74 days, easily within the City's financial policy
of 60 to 90 days.
Proprietary funds
The City’s proprietary funds provide the same type of information found in the government-wide financial
statements, but in more detail. At the end of the year, unrestricted net position for all enterprise funds are
as follows: Water and Sewer, $26,488,482, Solid Waste, $3,554,152, Drainage, $819,222, and Golf Course,
($5,436). The total change in net position for the funds was a decrease of $367,061, an increase of
$137,600, an increase of $138,465, and an increase of $226,217.
The Water and Sewer Fund had a decrease in net position as a result of an increase in contractual services
related to water and sewer services, but no corresponding increase in customer rates. The Solid Waste
Fund had an increase in net position due to a decrease in transfers out to other funds. The Drainage Fund
had an increase in net position due to an increase in operating revenues. The Golf Course Fund had an
increase in net position due to an increase in operating revenues.
CAPITAL ASSETS
The City’s investment in capital assets for its governmental and business-type activities as of
September 30, 2017, amounts to $559,612,506 (net of accumulated depreciation). This investment in
capital assets includes land and improvements, buildings, vehicles, machinery and equipment, park land
and facilities, roads and bridges. About 80% of the capital assets are governmental and 20% are business-
type activities. There was an increase of 0.3% in the investment in capital assets for the current fiscal year.
2017 2016 2017 2016 2017 2016
Land 139,069,288$ 135,405,711$ $4,072,882 $4,072,882 143,142,170$ 139,478,593$
Buildings 72,863,687 69,815,815 - - 72,863,687 69,815,815
- - 102,147,625 103,444,030 102,147,625 103,444,030
Other Improvements 216,700,731 214,280,159 318,303 330,567 217,019,034 214,610,726
Furniture and fixtures 229,588 409,436 - - 229,588 409,436
Vehicles 6,489,143 4,324,896 315,323 320,744 6,804,466 4,645,640
Machinery and equipment 3,964,661 4,101,081 1,722,145 1,937,442 5,686,806 6,038,523
Construction in progress 7,492,158 17,272,865 4,226,972 2,059,167 11,719,130 19,332,032
Total 446,809,256$ 445,609,963$ $112,803,250 112,164,832$ 559,612,506$ 557,774,795$
Towers, tanks and pump stations
Table 3
Capital Assets at Year-end Net of Accumulated Depreciation
Governmental Activities Business-type Activities Total
The major governmental-type capital improvement projects and developer contributions during the current
fiscal year included the following:
Developer contributed street, alley, and right of way 13,574,912$
Spirit Park 3,735,166
Allen Public Library Parking Lot Expansion 534,226
Rolling Hills Park Expansion 515,436
Street construction:
Ridgeview Drive - Cottonwood to Chelsea 450,499
2015 Intersection Improvement 153,595
Alma Drive Improvement 114,614
CITY OF ALLEN, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(UNAUDITED)
13
Business-type capital improvement projects and developer contributions during the current fiscal year
include the following:
Developer contributed water mains and sewer lines 4,233,683$
Fountain Park Water & Sewer Rehabilitation Phase 2 2,244,826
Hillside Water & Sewer Rehabilitation Phase 1 402,879
Additional information on the City’s capital assets can be found in Note 4 of this report.
DEBT ADMINISTRATION
As shown in Table 4, the City’s total outstanding debt at September 30, 2017 was $191,697,722 of which
$132,982,565 was governmental, $9,193,294 was business-type activities and $49,521,863 was
component units’. Total gross bonded debt and notes payable was $143,259,458 which includes
$88,575,000 of General Obligation (G.O.) bonds backed by the full faith and credit of the government,
$405,000 of Certificates of Obligation backed by taxes and revenue generated from the golf course,
$4,760,000 secured solely by water and sewer revenue, and the component unit’s total of $45,060,000
secured by future sales tax revenue and $4,459,458 of notes payable. Other long-term debt relates to
compensating absences, net pension liability, capital leases, and issuance premiums and discounts.
In fiscal year 2017, the City issued $11,845,000 of General Obligation Bonds. The Allen Economic
Development Corporation issued $11,810,000 of Sales Tax Revenue Refunding Bonds and $6,140,000 of
Sales Tax Revenue Bonds.
The revenue bond debt for both component units relates to debt issued to support public infrastructure
improvements, land acquisition, and construction of the Allen Event Center. The notes payable debt is due
to a loan agreement Allen Economic Development Corporation entered into in relation to the purchase of
31 acres of land. Total debt for the component units decreased by 2%. Total debt for the Allen Economic
Development Corporation increased by 3%, and the Allen Community Development Corporation debt
decreased by 5%.
2017 2016 2017 2016 2017 2016 2017 2016
General
Obligation Bonds 88,575,000$ 86,445,000$ -$ -$ -$ -$ 88,575,000$ 86,445,000$
Certificate of
Obligation Bonds 405,000 450,000 - - - - 405,000 450,000
Revenue Bonds
Payable - - 4,760,000 5,760,000 - - 4,760,000 5,760,000
Sales Tax
Revenue Bonds - - - - 45,060,000 46,930,000 45,060,000 46,930,000
Note Payable 1,255,000 1,940,000 3,204,458 3,808,147 4,459,458 5,748,147
Total Gross
Bonded Debt 90,235,000 88,835,000 4,760,000 5,760,000 48,264,458 50,738,147 143,259,458 145,333,147
Compensated
Absences 6,225,795 5,625,384 726,859 685,994 - - 6,952,654 6,311,378
Net Pension
Liability 27,661,775 26,532,334 3,424,109 3,287,519 - - 31,085,884 29,819,853
Capital leases 1,250,000 1,700,000 116,479 252,519 - - 1,366,479 1,952,519
Premiums &
Discounts 7,609,995 7,475,844 165,847 195,868 1,257,405 (34,710) 9,033,247 7,637,002
Total Other Long
Term Debt 42,747,565 41,333,562 4,433,294 4,421,900 1,257,405 (34,710) 48,438,264 45,720,752
Total 132,982,565$ 130,168,562$ 9,193,294$ 10,181,900$ 49,521,863$ 50,703,437$ 191,697,722$ 191,053,899$
Gross Bonded Debt
Other Long-Term Debt
Table 4
Outstanding Debt at Year-end
Bonds and Other Long Term Debt
Governmental Activities Business-type Activities Component Units Total
CITY OF ALLEN, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(UNAUDITED)
14
The underlying credit ratings from both Moody’s Investors Service and Standard and Poor’s for the City’s
General Obligation Bonds, Certificates of Obligation, Water and Sewer Revenue Bonds, Community
Development Corporation’s Sales Tax Bonds and Economic Development Sales Tax Revenue Bonds are
shown below in Table 5. Additional information on the City’s long-term debt can be found in Note 5.
Table 5
Bond Ratings
Moody's
Investors
Service
Standard &
Poor's
General Obligation Bonds Aaa AAA
Certificates of Obligation Aaa AAA
Water & Sewer Revenue Bonds Aa2 AAA
CDC Sales Tax Revenue Bonds Aa2
EDC Sales Tax Revenue Bonds Aa2
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
The economy continues to be moderately strong for the City of Allen and the North Central Texas area.
Focused on having a balanced community, the City takes a proactive approach to economic development
with its business recruitment and retention efforts, as well as with its variety of housing options. In addition,
the City conservatively manages its budget. The fiscal year 2017-2018 budget reflects the commitment of
the City Council and staff to provide services and facilities to our citizens while maintaining a strong financial
position.
The City revenues most impacted by a moderately strong economy are property taxes and sales taxes.
The property tax revenue source experienced growth due to new construction and reappraisal increases of
existing real property. For fiscal year 2017-2018, reappraisal values for existing real (residential and
commercial) properties increased 7.65% compared to FY2017. Additional tax abatements on commercial
property had a small impact of reducing the taxable property valuation by 0.1%. New construction of
residential and commercial property resulted in an increase in valuation of 2.53%. The overall increase in
valuation from all categories was 10.17%; however, the property tax revenue increase was budgeted at
6.23% as a result of lowering the tax rate by one cent. Overall sales tax is expected to increase by 2.96%.
As the City’s sizeable retail developments near capacity the rate of growth of sales tax is expected to
increase at a rate that is a combination of population growth and increases in prices for retail items.
The rate of residential growth has steadily increased as the economy has recovered. The City estimates
issuance of 530 single family permits in FY2018. The population of approximately 99,882 as of September
30, 2017 is expected to reach approximately 125,000 at build out in the next twelve years. The population
projection at build out has been increased recently due to the construction of additional multi-family units,
changes to projected land use plans, and an overall increase in the density of the developments.
The various infrastructure and operational needs of the City have resulted in the annual expenditure budget
increasing from $164.49 million in FY2012, to $214.38 million for FY2018 for all funds combined. The
certified assessed property value for 2017-2018 equates to an overall increase of approximately $1.142
billion (10.17%) from the preceding year. The FY2018 tax rate was set at $0.510 per $100 valuation. Of
the total tax rate, $0.392738 is dedicated to operations and maintenance in the General Fund, and
$0.117262 is dedicated to general obligation debt service.
CITY OF ALLEN, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(UNAUDITED)
15
Ad valorem taxes are the General Fund’s largest revenue source and will contribute $47.830 million or
48.11% of the fund’s budgeted revenues in FY2018. Appraisal values are established by the Central
Appraisal District of Collin County, and collections are certified at 100% by the Collin County Tax Assessor-
Collector’s office. New retail development and population growth will continue to increase sales tax at a
moderate rate of 2.96% over the revised FY2017.
The General Fund ended 2016-2017 with a positive variance of $2,380,506 as compared to the revised
budgeted fund balance. This brings the ending fund balance to an equivalent 90 days of operating
expenditures, which is higher than the amended estimate of 74 days, and is within the range of the City’s
financial policy of 60 to 90 days. The 2017-2018 General Fund expenditure budget reflects a 0.83%
increase from the revised 2016-2017 budget. This is primarily due to a compensation merit increases and
a market adjustment in employee pay ranges with emphasis on general schedule employees, offset by
decreases in economic development incentives related to a one-time payment budgeted in 2016-2017.
These changes will allow the City to retain staff to meet its strategic goals, and continue its commitment to
maintaining a high level of service to the public.
The City chose to increase the water and sewer rates as proposed in the rate study, which was updated in
2017. The budget includes an increase in rates to the city from NTMWD. Also included in the FY2018
budget is $225,000 to cash finance water and sewer capital projects related to pump station and sewer lift
station maintenance. The Water and Sewer Fund is expected to finish the fiscal year 2017 with
approximately $12.205 million in working capital reserves resulting in 108 days of operating expenses in
reserve, which is within the City policy of 90 to 120 days. This healthy balance is necessary to fund the
future City and NTMWD capital projects, ongoing maintenance projects that are planned to ensure the
water and sewer infrastructure will meet the demand when the City reaches build out, and provides reserves
that can be used during drought related watering restrictions that would have an impact on revenues.
The Solid Waste Fund represents a stable operational service and staff continues its educational outreach
programs through several key programs and events held throughout the year. Staff also continues to seek
grant funding for future cycles. The City’s current contract is with Community Waste Disposal (CWD) as the
solid waste provider. No commercial CPI solid waste fee increases are planned in 2018. The contract
includes an agreement to adjust the variable fuel adjustment fee (VFAF) on commercial accounts to a
higher fuel cost starting point, which is beneficial to the City’s commercial customers. With the continuing
decline in fuel costs, the VFAF will probably not be changed. The Solid Waste working capital balance at
the end of FY2018 is expected to be $2.672 million which is approximately 140 operating days of reserve
and is greater than the City’s policy of 90 to 120 days.
The Drainage Fund is supported by drainage fees on utility bills and development inspection fees. The
fund continues to sustain a working capital balance which supports drainage maintenance, mosquito
abatement, Texas Pollution Discharge Elimination System (TPDES), and capital improvement activities.
The City’s golf course, formerly called Chase Oaks, is in its fifth year of operation. After the course was
redesigned, it was renamed as The Courses at Watters Creek. The renovated course opened in January
2013. The completion of the 33 holes has helped to improve the overall golf experience for the established
players and create an enthusiastic environment for new golfers of all ages. There is an 18-hole course, a
9-hole course, 6 additional holes for short iron play, new putting greens, and a lighted driving range. This
last year of operations saw an increase in revenue due to damage and flooding that occurred in the prior
year that resulted in depressed revenue. The Golf Course Fund working capital balance at the end FY2018
is expected to be $5,538.
CITY OF ALLEN, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(UNAUDITED)
16
For 2017-2018, the Risk Management Fund reflects changes in health care costs of 10% for Plans A and
B and no increase for Plan C and dental premiums. For FY2018, the City will incur an 8.67% increase in
costs from the revised FY2017 budget. For the FY2018 budget, a contribution of $217,450 is budgeted to
be put into a trust fund for other post-employment benefits. This amount is determined from an actuarial
study every two years. The FY2018 budget was increased in both revenues and expenses by over $100
thousand as the number of assets being insured in our Property & Liability portfolio, as well as an increase
in Worker’s Comp premium. Prior to FY2016 the city would pay claims over the stop loss amounts and
then get reimbursed. United Healthcare can manage the stop loss once claims have reached the stop loss
threshold. Worker’s compensation premiums have increased due to the number of hours worked by public
safety personnel. Property and liability insurance rates for fiscal year 2018 are expected to increase
compared to fiscal year 2017 as there were significant additions of newly insured property. The Risk Fund
continues to be in good financial condition.
The City of Allen’s budget continues to be positively impacted by moderately strong growth and by
conservative fiscal management. The 2017-2018 budget reflects the efforts of the governing body and city
staff to address the need to provide services and facilities to support our vibrant and growing community,
while maintaining a strong financial position.
Request for Information
The financial report is designed to provide our citizens, customers, investors, and creditors with a general
overview of the City’s finances. If you have questions about this report or need any additional information,
contact the Finance Department at 305 Century Parkway, Allen, Texas, 75013, or call (214) 509-4626.
BASIC FINANCIAL STATEMENTS
CITY OF ALLEN, TEXAS EXHIBIT 1
STATEMENT OF NET POSITION
SEPTEMBER 30, 2017
The Notes to Financial Statements are
an integral part of this statement.
17
GOVERNMENTAL BUSINESS-TYPE COMPONENT
ACTIVITIES ACTIVITIES TOTAL UNITS
ASSETS
Cash and cash equivalents 31,018,210$ 10,897,295$ 41,915,505$ 6,953,519$
Investments 67,796,135 18,234,729 86,030,864 18,473,803
Receivables (net of allowance
for uncollectibles) 7,665,205 7,892,371 15,557,576 3,090,549
Internal balances (1,064,035) 1,064,035 - -
Prepaid items and other assets 850,582 5,050 855,632 6,298
Inventories 83,085 99,025 182,110 -
Restricted cash and cash equivalents - 1,282,710 1,282,710 -
Capital assets:
Non-depreciable 146,561,446 8,299,855 154,861,301 21,612,975
Depreciable (net of depreciation) 300,247,810 104,503,395 404,751,205 48,592,545
TOTAL ASSETS 553,158,438 152,278,465 705,436,903 98,729,689
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refunding 2,042,136 165,889 2,208,025 1,102,391
Deferred outflows of resources - pension 10,428,332 1,291,696 11,720,028 -
TOTAL DEFERRED OUTFLOWS OF RESOURCES 12,470,468 1,457,585 13,928,053 1,102,391
LIABILITIES
Accounts payable 6,119,886 2,285,922 8,405,808 3,178,632
Accrued liabilities 3,706,507 246,993 3,953,500 23,913
Accrued interest payable 450,444 47,225 497,669 125,906
Customer deposits - 1,718,705 1,718,705 -
Unearned revenue 691,945 - 691,945 -
Retainage payable 222,433 84,912 307,345 18,500
Non-current liabilities:
Due within one year 15,351,936 1,536,569 16,888,505 4,883,121
Due in more than one year 117,630,629 7,656,725 125,287,354 44,638,742
TOTAL LIABILITIES 144,173,780 13,577,051 157,750,831 52,868,814
DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - pension 927,106 116,248 1,043,354 -
TOTAL DEFERRED INFLOWS OF RESOURCES 927,106 116,248 1,043,354 -
NET POSITION
Net investment in capital assets 366,322,218 107,926,811 474,249,029 37,177,911
Restricted for:
Debt service 899,776 195,485 1,095,261 353,245
Capital projects 25,962,962 - 25,962,962 -
Tourism 4,900,938 - 4,900,938 -
Park acquisition and development 2,088,099 - 2,088,099 -
State and federal grants 274,828 - 274,828 -
Tax Increment Financing 2,866,832 - 2,866,832 -
Other purposes 1,309,791 - 1,309,791 -
Unrestricted 15,902,576 31,920,455 47,823,031 9,432,110
TOTAL NET POSITION 420,528,020$ 140,042,751$ 560,570,771$ 46,963,266$
PRIMARY GOVERNMENT
CITY OF ALLEN, TEXAS
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2017
The Notes to Financial Statements are
an integral part of this statement.
18
Charges for Operating Grants Capital Grants
Expenses Services and Contributions and Contributions
Functions/Program Activities
PRIMARY GOVERNMENT:
Governmental Activities:
General government 28,251,550$ 497,243$ -$ -$
Public safety 39,624,788 2,712,076 238,116 -
Public works 20,209,785 293,559 - 15,327,094
Culture and recreation 28,968,534 8,747,206 1,774,531 -
Community development 3,007,047 4,266,140 430,407 -
Interest on long-term debt 2,980,513 - - -
Total governmental activities 123,042,217 16,516,224 2,443,054 15,327,094
Business-type Activities:
Water and sewer 39,527,816 37,163,882 - 5,622,911
Solid waste 6,078,853 6,735,559 - -
Drainage 1,193,057 1,648,681 - -
Golf course 3,135,144 2,959,361 - -
Total business-type activities 49,934,870 48,507,483 - 5,622,911
TOTAL PRIMARY GOVERNMENT 172,977,087$ 65,023,707$ 2,443,054$ 20,950,005$
COMPONENT UNITS:
Allen Economic Development Corporation 13,693,115$ -$ -$ -$
Allen Community Development Corporation 5,994,155 - - -
TOTAL COMPONENT UNITS 19,687,270$ -$ -$ -$
General revenues:
Taxes:
Property taxes, levied for general purposes
Sales taxes
Franchise taxes
Hotel motel taxes
Other taxes
Investment earnings
Gain on sale of assets
Miscellaneous
Transfers
Total general revenues and transfers
CHANGE IN NET POSITION
NET POSITION, beginning of year as restated
NET POSITION, end of year
Program Revenues
EXHIBIT 2
19
Governmental Business - Type COMPONENT
Activities Activities TOTAL UNITS
(27,754,307)$ -$ (27,754,307)$ -$
(36,674,596) - (36,674,596) -
(4,589,132) - (4,589,132) -
(18,446,797) - (18,446,797) -
1,689,500 - 1,689,500 -
(2,980,513) - (2,980,513) -
(88,755,845) - (88,755,845) -
- 3,258,977 3,258,977 -
- 656,706 656,706 -
- 455,624 455,624 -
- (175,783) (175,783) -
- 4,195,524 4,195,524 -
(88,755,845)$ 4,195,524$ (84,560,321)$ -$
-$ -$ -$ (13,693,115)$
- - - (5,994,155)
-$ -$ -$ (19,687,270)$
58,816,876$ -$ 58,816,876$ -$
19,450,088 - 19,450,088 19,046,848
7,553,013 - 7,553,013 -
1,547,244 - 1,547,244 -
1,912,559 - 1,912,559 -
837,577 199,508 1,037,085 238,561
263,627 - 263,627 764,269
2,703,964 274,944 2,978,908 1,439,973
4,610,889 (4,610,889) - -
97,695,837 (4,136,437) 93,559,400 21,489,651
8,939,992 59,087 8,999,079 1,802,381
411,588,028 139,983,664 551,571,692 45,160,885
420,528,020$ 140,042,751$ 560,570,771$ 46,963,266$
Changes in Net Position
Net (Expense) Revenue and
Primary Government
CITY OF ALLEN, TEXAS
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2017
The Notes to Financial Statements are
an integral part of this statement.
20
GENERAL
DEBT CAPITAL
GENERAL SERVICE PROJECTS
ASSETS
Cash and cash equivalents 6,163,663$ 417,127$ 9,706,298$
Investments 16,316,996 922,089 15,507,423
Receivables, net of allowances for
uncollectibles:
Ad valorem taxes 31,894 7,161 -
Sales taxes 3,043,995 - -
Accounts receivable 804 - -
Accrued interest 51,111 2,286 39,201
Other 3,243,214 1,557 710,040
Prepaid items 126,833 - -
TOTAL ASSETS 28,978,510$ 1,350,220$ 25,962,962$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
LIABILITIES
Accounts payable 3,393,375$ -$ 388,444$
Accrued liabilities 2,213,378 - 273,176
Unearned revenue 691,945 - -
Retainage payable - - 5,000
TOTAL LIABILITIES 6,298,698 - 666,620
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - property taxes 31,894 7,161 -
Unavailable revenue - charges for services 674,053 - -
Unavailable revenue - miscellaneous 19,874 - -
Unavailable revenue - interest 23,369 1,057 18,126
Unavailable revenue - fines 60,826 - -
Unavailable revenue - grants - - -
TOTAL DEFERRED
INFLOWS OF RESOURCES 810,016 8,218 18,126
FUND BALANCES
Nonspendable
Prepaid items 126,833 - -
Restricted
Debt service - 1,342,002 -
Capital projects - - 25,278,216
Tourism - - -
Asset forfeiture - - -
State and federal grants - - -
Park acquisition and development - - -
Tax increment financing agreement - - -
Court technology - - -
Juvenile case manager - - -
PEG fees - - -
Radio system - - -
Photo red light enforcement - - -
Court security - - -
Cemetery trust 58,910 - -
Assigned
Hotel/Convention Center 2,000,000 - -
Unassigned 19,684,053 - -
TOTAL FUND BALANCES 21,869,796 1,342,002 25,278,216
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES 28,978,510$ 1,350,220$ 25,962,962$
EXHIBIT 3
21
GENERAL OTHER TOTAL
OBLIGATION GOVERNMENTAL GOVERNMENTAL
BOND FUNDS FUNDS
6,179,760$ 3,259,707$ 25,726,555$
15,266,245 7,890,237 55,902,990
- - 39,055
- - 3,043,995
- 426,223 427,027
39,593 20,281 152,472
11,308 - 3,966,119
- - 126,833
21,496,906$ 11,596,448$ 89,385,046$
1,796,950$ 67,116$ 5,645,885$
- 58,672 2,545,226
- - 691,945
201,683 15,750 222,433
1,998,633 141,538 9,105,489
- - 39,055
- - 674,053
- - 19,874
18,311 9,381 70,244
- - 60,826
- 5,041 5,041
18,311 14,422 869,093
- - 126,833
-
- - 1,342,002
19,479,962 - 44,758,178
- 4,900,938 4,900,938
- 168,122 168,122
- 274,828 274,828
- 2,088,099 2,088,099
- 2,866,832 2,866,832
- 111,764 111,764
- 12,827 12,827
- 937,665 937,665
- 48,946 48,946
- 26,006 26,006
- 4,461 4,461
- - 58,910
- - 2,000,000
- - 19,684,053
19,479,962 11,440,488 79,410,464
21,496,906$ 11,596,448$ 89,385,046$
CITY OF ALLEN, TEXAS EXHIBIT 4
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2017
The Notes to Financial Statements are
an integral part of this statement.
22
Total fund balances - governmental funds 79,410,464$
Amounts reported for governmental activities in the statement of net position
are different because:
Capital assets used in governmental activities are not current financial resources
and, therefore, are not reported in the governmental funds balance sheet. 446,809,256
Funds comprising the net other post employment benefit asset are not current
financial resources and therefore are not reported in the governmental funds
balance sheet.723,749
The following deferred outflows of resources and deferred inflows of resources
are not reported in governmental funds:
Deferred charges on refunding 2,042,136
Deferred outflows of resources - pension 10,428,332
Deferred inflows of resources - pension (927,106) 11,543,362
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. (450,444)
Internal service funds are used by management to charge the cos t of certain
activities, such as insurance and fleet management, to individual funds. The
assets and liabilities of the internal service funds ($24,913,895) are net of the
amount allocated to business-type activities ($1,064,035) and t o capital
assets ($9,244,755). 14,605,105
Revenues earned but not available within sixty days of the year end are not
recognized as revenue on the fund financial statements. 869,093
Long-term liabilities, including bonds payable, are not due and payable in the
current period and, therefore, are not reported in the fund financial statements.
Long-term liabilities consist of:
General obligation bonds (88,575,000)
Certificates of obligation (405,000)
Tax notes (1,255,000)
Capital lease payable (1,250,000)
Premiums/discounts (7,609,995)
Compensated absences (6,225,795)
Net pension liability (27,661,775) (132,982,565)
Net position of governmental activities 420,528,020$
CITY OF ALLEN, TEXAS
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
The Notes to Financial Statements are
an integral part of this statement.
23
DEBT
GENERAL SERVICE
REVENUES
Ad valorem taxes, penalties and interest 44,250,012$ 13,819,888$
Franchise taxes 7,350,059 -
Municipal sales tax 18,990,970 -
Licenses, permits and fees 3,605,214 -
Charges for services 10,932,890 -
Fines 1,694,998 -
Gifts and contributions 712,437 -
Hotel / motel fees - -
Intergovernmental 126,008 -
Investment earnings 270,522 91,656
Miscellaneous 1,659,790 -
Total revenues 89,592,900 13,911,544
EXPENDITURES
Current
General government 24,801,363 -
Public safety 34,793,934 -
Public works 3,592,912 -
Culture and recreation 22,140,763 -
Community development 2,530,910 -
Capital outlay 496,502 -
Debt service:
Principal retirement - 10,445,000
Interest and fiscal charges - 3,378,943
Total expenditures 88,356,384 13,823,943
Excess (deficiency) of revenues
over (under) expenditures 1,236,516 87,601
OTHER FINANCING SOURCES (USES)
Issuance of bonds - -
Premium on bonds issued - -
Transfers in 4,616,064 -
Transfers out (5,819,630) -
Proceeds from sale of capital assets 14,866 -
Total other financing sources (uses)(1,188,700) -
NET CHANGE IN FUND BALANCES 47,816 87,601
FUND BALANCES, BEGINNING OF YEAR AS RESTATED 21,821,980 1,254,401
FUND BALANCES, END OF YEAR 21,869,796$ 1,342,002$
EXHIBIT 5
24
GENERAL GENERAL OTHER TOTAL
CAPITAL OBLIGATION GOVERNMENTAL GOVERNMENTAL
PROJECTS BOND FUNDS FUNDS
-$ -$ 806,036$ 58,875,936$
- - 202,954 7,553,013
- - 459,118 19,450,088
- - 845,425 4,450,639
731,438 - - 11,664,328
- - 156,737 1,851,735
- - - 712,437
- - 1,547,244 1,547,244
774,428 - 1,027,131 1,927,567
141,897 68,097 71,756 643,928
1,583,467 - 185,109 3,428,366
3,231,230 68,097 5,301,510 112,105,281
1,008,989 177,213 1,194,826 27,182,391
- 2,069,300 431,316 37,294,550
1,356,072 480,012 - 5,428,996
214,108 109,779 1,281,234 23,745,884
- - 420,954 2,951,864
938,202 5,012,023 607,136 7,053,863
- - - 10,445,000
- - - 3,378,943
3,517,371 7,848,327 3,935,466 117,481,491
(286,141) (7,780,230) 1,366,044 (5,376,210)
- 11,845,000 - 11,845,000
- 955,225 - 955,225
3,700,000 - 1,489,795 9,805,859
(300,359) (176,000) - (6,295,989)
- - 29,031 43,897
3,399,641 12,624,225 1,518,826 16,353,992
3,113,500 4,843,995 2,884,870 10,977,782
22,164,716 14,635,967 8,555,618 68,432,682
25,278,216$ 19,479,962$ 11,440,488$ 79,410,464$
CITY OF ALLEN, TEXAS EXHIBIT 6
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
YEAR ENDED SEPTEMBER 30, 2017
The Notes to Financial Statements are
an integral part of this statement.
25
Net change in fund balances - total governmental funds 10,977,782$
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 est imated useful lives and reported
as depreciation expense. This is the amount of capital assets recorded in the current period. 7,053,863
Governmental funds do not recognize contributed capital assets. However, in the
statement of activities the acquisition value of those assets is recognized as revenue,
then allocated over their estimated useful lives and reported as depreciation expense. 14,108,030
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. (21,091,118)
The proceeds from issuance of long-term debt provides current financial resources to
governmental funds, while the payment of the principal of long-term debt consumes the
current financial resources of governmental funds. Also, governmental funds report the
effect of premiums, discounts, and similar items when debt is first issued. However,
these amounts are amortized in the government-wide financial st atements.
Bonds issued (11,845,000)
Premium on bonds issued (955,225)
Bond and capital lease principal retirement 10,895,000
Amortization of bond premiums 821,074
Amortization of deferred charges on refundings (390,029) (1,474,180)
Current year changes for compensated absences, net pension liability, deferred inflows/outflows
related to pensions, and the opeb asset do not require the use of current financial
resources and, therefore, are not reported in governmental funds. (1,666,196)
Current year changes in accrued interest payable do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental funds. (32,614)
Internal service funds are used by management to charge the costs of certain activities,
such as insurance and fleet management, to individual funds. The net operating and
non-operating income and transfers of the internal service funds is reported with
governmental activities net of amounts allocated to business-ty pe activities. 293,447
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.770,978
Change in net position of governmental activities 8,939,992$
CITY OF ALLEN, TEXAS EXHIBIT 7
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
SEPTEMBER 30, 2017
The Notes to Financial Statements are
an integral part of this statement.
26
GOVERNMENTAL
ACTIVITIES
WATER AND SOLID GOLF INTERNAL SERVICE
SEWER WASTE DRAINAGE COURSE TOTAL FUNDS
ASSETS
CURRENT ASSETS
Cash and cash equivalents 8,645,318$ 1,221,575$ 293,690$ 736,712$ 10,897,295$ 5,291,655$
Investments 15,596,333 2,036,153 602,243 - 18,234,729 11,893,145
Receivables, net of allowance for uncollectibles:
Accounts 6,531,346 780,435 212,335 - 7,524,116 7,056
Accrued interest 41,943 5,747 1,727 - 49,417 29,481
Other 182,931 135,807 - 100 318,838 -
Inventories 99,025 - - - 99,025 83,085
Prepaid items - - - 5,050 5,050 -
Restricted cash and cash equivalents 1,282,710 - - - 1,282,710 -
Total current assets 32,379,606 4,179,717 1,109,995 741,862 38,411,180 17,304,422
NONCURRENT ASSETS
CAPITAL ASSETS
Land 4,072,882 - - - 4,072,882 -
Construction in progress 4,226,973 - - - 4,226,973 -
Other improvements - - 496,132 - 496,132 -
Towers, tanks, and pump stations 190,630,891 - - - 190,630,891 -
Vehicles 855,033 140,440 151,554 - 1,147,027 14,768,075
Machinery and equipment 4,227,482 12,359 444,171 1,039,720 5,723,732 5,842,625
Total capital assets 204,013,261 152,799 1,091,857 1,039,720 206,297,637 20,610,700
Less: accumulated depreciation (91,988,897) (30,303) (570,461) (904,726) (93,494,387) (11,365,945)
Capital assets, net of accumulated depreciation 112,024,364 122,496 521,396 134,994 112,803,250 9,244,755
Total noncurrent assets 112,024,364 122,496 521,396 134,994 112,803,250 9,244,755
TOTAL ASSETS 144,403,970 4,302,213 1,631,391 876,856 151,214,430 26,549,177
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refunding 165,889 - - - 165,889 -
Deferred outflows of resources - pension 846,597 100,396 92,647 252,056 1,291,696 -
TOTAL DEFERRED OUTFLOWS OF RESOURCES 1,012,486 100,396 92,647 252,056 1,457,585 -
AND NET POSITION
CURRENT LIABILITIES
Accounts payable 1,806,285 349,513 58,870 71,254 2,285,922 474,001
Accrued liabilities 161,271 16,649 16,170 52,903 246,993 447
Retainage payable 84,912 - - - 84,912 -
Accrued compensated absences - current 216,260 45,771 29,623 81,726 373,380 -
Incurred but not reported claims - - - - - 1,160,834
Payable from restricted assets:
Revenue bonds payable - current 1,070,021 - - - 1,070,021 -
Capital leases payable - current - - - 93,168 93,168 -
Accrued interest payable 47,225 - - - 47,225 -
Customer deposits payable 1,683,256 - - 35,449 1,718,705 -
Total current liabilities 5,069,230 411,933 104,663 334,500 5,920,326 1,635,282
NONCURRENT LIABILITIES
Revenue bonds payable 3,855,826 - - - 3,855,826 -
Capital leases payable - - - 23,311 23,311 -
Net pension liability 2,259,468 262,279 242,899 659,463 3,424,109 -
Accrued compensated absences 204,734 43,331 28,044 77,370 353,479 -
Total noncurrent liabilities 6,320,028 305,610 270,943 760,144 7,656,725 -
TOTAL LIABILITIES 11,389,258 717,543 375,606 1,094,644 13,577,051 1,635,282
DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - pension 78,827 8,417 7,814 21,190 116,248 -
TOTAL DEFERRED OUTFLOWS OF RESOURCES 78,827 8,417 7,814 21,190 116,248 -
NET POSITION (DEFICIT)
Net investment in capital assets 107,264,404 122,497 521,396 18,514 107,926,811 9,244,755
Restricted for revenue bond principal and interest 195,485 - - - 195,485 -
Unrestricted 26,488,482 3,554,152 819,222 (5,436) 30,856,420 15,669,140
TOTAL NET POSITION (DEFICIT)133,948,371$ 3,676,649$ 1,340,618$ 13,078$ 138,978,716$ 24,913,895$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
ENTERPRISE FUNDS
BUSINESS-TYPE ACTIVITIES
CITY OF ALLEN, TEXAS EXHIBIT 8
RECONCILIATION OF THE STATEMENT OF NET POSITION
OF PROPRIETARY FUNDS TO THE
GOVERNMENT – WIDE STATEMENT OF NET POSITION
SEPTEMBER 30, 2017
The Notes to Financial Statements are
an integral part of this statement.
27
Amounts reported for business-type activities in the statement of net
position are different because:
Total net position per statement of net position 138,978,716$
Internal service funds are used by management to charge the cos ts of replacing
machinery and equipment, fleet management, workers compensation, property liability
loss, medical and dental insurance, and health claims to indivi dual funds.
The assets and liabilities of internal service funds are included in the governmental
activities in the government-wide statement of net position. The amount shown
represents the net receivable from internal service funds alloc ated to business-type
activities since the adoption of GASB 34. 1,064,035
Total net position of business-type activities 140,042,751$
CITY OF ALLEN, TEXAS EXHIBIT 9
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
The Notes to Financial Statements are
an integral part of this statement.
28
GOVERNMENTAL
ACTIVITIES
WATER AND SOLID GOLF INTERNAL
SEWER WASTE DRAINAGE COURSE TOTAL SERVICE FUNDS
OPERATING REVENUES
Charges for sales and services:
Water sales 20,931,095$ -$ -$ -$ 20,931,095$ -$
Sewer charges 14,768,352 - - - 14,768,352 -
Connection fees 203,400 - - - 203,400 -
Garbage collections - 6,699,059 - - 6,699,059 -
Service charges 934,830 - 138,508 2,956,256 4,029,594 13,652,677
Drainage fees - - 1,494,963 - 1,494,963 -
Miscellaneous 601,149 36,500 15,210 3,105 655,964 371,011
Total operating revenues 37,438,826 6,735,559 1,648,681 2,959,361 48,782,427 14,023,688
OPERATING EXPENSES
Personnel services 4,841,161 575,962 593,119 1,577,339 7,587,581 304,123
Contractual services 26,993,944 5,376,885 200,439 991,346 33,562,614 12,537,871
Maintenance 357,964 6,272 297,892 82,809 744,937 32
Supplies 579,974 32,922 59,268 258,016 930,180 39,177
Depreciation 6,244,621 15,293 39,389 140,155 6,439,458 1,996,894
Other 250,686 71,519 2,950 85,479 410,634 -
Total operating expenses 39,268,350 6,078,853 1,193,057 3,135,144 49,675,404 14,878,097
OPERATING INCOME (LOSS)(1,829,524) 656,706 455,624 (175,783) (892,977) (854,409)
NON-OPERATING REVENUES (EXPENSES)
Investment earnings 170,920 21,928 6,660 - 199,508 123,406
Interest expense (183,332) - - - (183,332) -
Gain on disposal of capital assets - - - - - 219,730
Total non-operating revenues (expenses)(12,412) 21,928 6,660 - 16,176 343,136
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS (1,841,936) 678,634 462,284 (175,783) (876,801) (511,273)
CAPITAL CONTRIBUTIONS AND TRANSFERS
Development fees 1,389,228 - - - 1,389,228 -
Capital contributions 4,233,683 - - - 4,233,683 -
Transfers in 40,175 - - 402,000 442,175 1,302,462
Transfers out (4,188,211) (541,034) (323,819) - (5,053,064) (201,443)
Total capital contributions and transfers 1,474,875 (541,034) (323,819) 402,000 1,012,022 1,101,019
CHANGE IN NET POSITION (367,061) 137,600 138,465 226,217 135,221 589,746
NET POSITION, BEGINNING OF YEAR AS RESTATED 134,315,432 3,539,049 1,202,153 (213,139) 138,843,495 24,324,149
NET POSITION, END OF YEAR 133,948,371$ 3,676,649$ 1,340,618$ 13,078$ 138,978,716$ 24,913,895$
ENTERPRISE FUNDS
BUSINESS-TYPE ACTIVITIES
CITY OF ALLEN, TEXAS EXHIBIT 10
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION OF PROPRIETARY FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2017
The Notes to Financial Statements are
an integral part of this statement.
29
Amounts reported for business-type activities in the statement of activities
are different because:
Net change in fund net position- total proprietary funds 135,221$
Internal service funds are used by management to charge the cos ts 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. (76,134)
Change in net position of business-type activities 59,087$
CITY OF ALLEN, TEXAS EXHIBIT 11
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
The Notes to Financial Statements are
an integral part of this statement.
30
GOVERNMENTAL
ACTIVITIES
WATER AND SOLID GOLF INTERNAL
SEWER WASTE DRAINAGE COURSE TOTAL SERVICE FUNDS
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers 37,064,730$ 6,800,788$ 1,654,820$ 2,959,267$ 48,479,605$ -$
Cash received from transactions with other funds - - - - - 14,016,632
Cash paid to employees for services (4,704,885) (554,414) (576,150) (1,519,067) (7,354,516) (304,123)
Cash paid for goods and services (27,421,551) (5,479,630) (552,902) (1,420,351) (34,874,434) (615,390)
Cash paid for claims - - - - - (11,668,125)
Net cash provided by operating activities 4,938,294 766,744 525,768 19,849 6,250,655 1,428,994
CASH FLOWS FROM NON-CAPITAL
FINANCING ACTIVITIES
Transfers in from other funds 790,175 - - 402,000 1,192,175 1,302,462
Transfers out to other funds (4,938,211) (541,034) (323,819) - (5,803,064) (201,443)
Net cash provided by (used in) non-capital financing activities (4,148,036) (541,034) (323,819) 402,000 (4,610,889) 1,101,019
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Principal paid on revenue bond maturities (1,000,000) - - - (1,000,000) -
Interest and fees paid on long-term debt (192,469) - - - (192,469) -
Acquisition and construction of capital assets (2,780,222) - (63,970) - (2,844,192) (3,125,411)
Proceeds from sale of capital assets - - - - - 219,730
Capital lease payment - - - (136,041) (136,041) -
Contributions from developers 1,389,228 - - - 1,389,228 -
Net cash used in capital and
related financial activities (2,583,463) - (63,970) (136,041) (2,783,474) (2,905,681)
CASH FLOWS FROM INVESTING ACTIVITIES
Sale (purchase) of investment securities 190,527 (206,463) (203,937) - (219,873) (1,543,974)
Interest on investments 222,225 25,738 7,324 - 255,287 154,347
Net cash provided by (used in) investing activities 412,752 (180,725) (196,613) - 35,414 (1,389,627)
NET CHANGE IN CASH AND CASH EQUIVALENTS (1,380,453) 44,985 (58,634) 285,808 (1,108,294) (1,765,295)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 11,308,481 1,176,590 352,324 450,904 13,288,299 7,056,950
CASH AND CASH EQUIVALENTS, END OF YEAR 9,928,028$ 1,221,575$ 293,690$ 736,712$ 12,180,005$ 5,291,655$
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
Net operating income (loss) (1,829,524)$ 656,706$ 455,624$ (175,783)$ (892,977)$ (854,410)$
Adjustments to reconcile operating income (loss) to net
cash provided by operating activities:
Depreciation and amortization expense 6,266,457 15,293 39,389 140,155 6,461,294 1,996,894
Change in assets and liabilities:
Accounts receivable (191,165) 65,229 6,140 (94) (119,890) -
Other receivables (182,931) - - - (182,931) (7,056)
Prepaids - - - - - 118,915
Inventories (8,015) - - - (8,015) -
Deferred outflows - pension 58,481 7,275 6,788 18,341 90,885 -
Accounts payable 729,404 11,086 10,648 (10,106) 741,032 174,651
Retainage payable - - - - - -
Accrued liabilities 6,669 (3,119) (3,001) 5,185 5,734 -
Net pension liability 87,891 10,933 10,201 27,565 136,590 -
Compensated absences 12,602 6,164 2,613 19,486 40,865 -
Deposits 11,122 - - 2,218 13,340 -
Deferred inflows - pension (22,697) (2,823) (2,634) (7,118) (35,272) -
Total adjustments 6,767,818 110,038 70,144 195,632 7,143,632 2,283,404
Net cash provided by operating activities 4,938,294$ 766,744$ 525,768$ 19,849$ 6,250,655$ 1,428,994$
NON-CASH FINANCING ACTIVITIES:
Contributions of capital assets from developers 4,233,683$ -$ -$ -$ 4,233,683$ -$
Reconciliation of total cash to the statement of net position
Cash and cash equivalents - current 8,645,318$ 1,221,575$ 293,690$ 736,712$ 10,897,295$ 5,291,655$
Restricted cash and cash equivalents 1,282,710 - - - 1,282,710 -
CASH AND CASH EQUIVALENTS, END OF YEAR 9,928,028$ 1,221,575$ 293,690$ 736,712$ 12,180,005$ 5,291,655$
ENTERPRISE FUNDS
BUSINESS-TYPE ACTIVITIES
CITY OF ALLEN, TEXAS EXHIBIT 12
STATEMENT OF NET POSITION
COMPONENT UNITS
SEPTEMBER 30, 2017
The Notes to Financial Statements are
an integral part of this statement.
31
ALLEN ALLEN
ECONOMIC COMMUNITY
DEVELOPMENT DEVELOPMENT
CORPORATION CORPORATION TOTALS
ASSETS
CURRENT ASSETS
Cash and cash equivalents 2,878,788$ 4,074,731$ 6,953,519$
Investments 8,968,278 9,505,525 18,473,803
Sales tax receivable 1,521,997 1,521,997 3,043,994
Accrued interest receivable 22,462 24,093 46,555
Prepaid items 6,298 - 6,298
Total current assets 13,397,823 15,126,346 28,524,169
NONCURRENT ASSETS
CAPITAL ASSETS
Land 18,866,830 2,239,201 21,106,031
Construction in progress - 506,944 506,944
Buildings - 36,225,091 36,225,091
Furniture and fixtures - 317,194 317,194
Machine & equipment - 2,239,457 2,239,457
Vehicles - 646,971 646,971
Improvements other than buildings - 32,573,985 32,573,985
Total capital assets 18,866,830 74,748,843 93,615,673
Less: accumulated depreciation - (23,410,153) (23,410,153)
Capital assets, net of accumulated depreciation 18,866,830 51,338,690 70,205,520
Total noncurrent assets 18,866,830 51,338,690 70,205,520
TOTAL ASSETS 32,264,653 66,465,036 98,729,689
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refunding 454,284 648,107 1,102,391
TOTAL DEFERRED OUTFLOWS OF RESOURCES 454,284 648,107 1,102,391
LIABILITIES AND NET POSITION
CURRENT LIABILITIES
Accounts payable 2,617,615 561,017 3,178,632
Retainage payable - 18,500 18,500
Accrued interest payable 67,941 57,965 125,906
Accrued and other liabilities 23,913 - 23,913
Current portion of long-term debt 3,168,121 1,715,000 4,883,121
Total current liabilities 5,877,590 2,352,482 8,230,072
NONCURRENT LIABILITIES
Noncurrent portion of long-term debt 16,833,742 27,805,000 44,638,742
Total noncurrent liabilities 16,833,742 27,805,000 44,638,742
TOTAL LIABILITIES 22,711,332 30,157,482 52,868,814
NET POSITION
Investment in capital assets 14,711,114 22,466,797 37,177,911
Restricted for debt service 202,273 150,972 353,245
Unrestricted (4,905,782) 14,337,892 9,432,110
TOTAL NET POSITION 10,007,605$ 36,955,661$ 46,963,266$
CITY OF ALLEN, TEXAS EXHIBIT 13
STATEMENT OF ACTIVITIES
COMPONENT UNITS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
The Notes to Financial Statements are
an integral part of this statement.
32
Net (Expense) Revenue and
Program Revenues Changes in Net Position
ALLEN ALLEN
Operating ECONOMIC COMMUNITY
Charges for Grants and DEVELOPMENT DEVELOPMENT
Expenses Services Contributions CORPORATION CORPORATION TOTALS
Function/Program Activities
COMPONENT UNITS
Allen Economic
Development Corporation 13,693,115$ -$ -$ (13,693,115)$ -$ (13,693,115)$
Allen Community
Development Corporation 5,994,155 - - - (5,994,155) (5,994,155)$
TOTAL COMPONENT UNITS 19,687,270$ -$ -$ (13,693,115)$ (5,994,155)$ (19,687,270)$
General revenues:
Sales taxes 9,523,424$ 9,523,424$ 19,046,848$
Interest on investments 144,493 94,068 238,561
Gain on disposition of capital assets 764,269 - 764,269
Miscellaneous 1,439,973 - 1,439,973
Total general revenues 11,872,159 9,617,492 21,489,651
CHANGE IN NET POSITION (1,820,956) 3,623,337 1,802,381
NET POSITION, beginning of year, as restated 11,828,561 33,332,324 45,160,885
NET POSITION, end of year 10,007,605$ 36,955,661$ 46,963,266$
COMPONENT UNITS
NOTES TO FINANCIAL STATEMENTS
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
33
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General Statement
The City of Allen (the City) was incorporated in 1953, under the provisions of Chapter 11,
Title 28, Texas Revised Civil Statutes of 1925. In 1979, the City adopted a charter making it a
home rule city operating under a Council-Manager form of government. The City provides such
services as are authorized by its charter to advance the welfare, health, comfort, safety and
convenience of its inhabitants.
The accounting and reporting policies of the City relating to the funds included in the accompanying
basic financial statements conform to accounting principles generally accepted in the United States
of America applicable to state and local governments. Generally accepted accounting principles for
local governments include those principles prescribed by the Governmental Accounting Standards
Board (GASB), and the American Institute of Certified Public Accountants in the publication entitled
Audits of State and Local Governmental Units. The more significant accounting policies of the City
are described below.
Financial Reporting Entity
As required by accounting principles generally accepted in the United States of America, the
financial statements of the City include the primary government and organizations for which the
primary government is financially accountable and other organizations for which the nature and
significance of their relationship with the primary government are such that exclusion would cause
the reporting entity's financial statements to be misleading or incomplete.
The City is financially accountable for legally separate organizations if its officials appoint a voting
majority of an organization's governing body and either it can impose its will on that organization or
there is a potential for the organization to provide specific financial benefits to, or to impose specific
financial burdens on, the primary government. A primary government may also be financially
accountable for governmental organizations that are fiscally dependent on it.
A primary government has the ability to impose its will on an organization if it can significantly
influence the programs, projects, or activities of, or the level of services performed or provided by,
the organization. A financial benefit or burden relationship exists if the primary government (a) is
entitled to the organization's resources; (b) is legally obligated or has otherwise assumed the
obligation to finance the deficits of, or provide financial support to, the organization; or (c) is
obligated in some manner for the debt of the organization.
Some organizations are included as component units because of their fiscal dependency on the
primary government. An organization is fiscally dependent on the primary government if it is unable
to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval by the
primary government. The following entities were found to be component units of the City and are
included in the basic financial statements:
Allen Economic Development Corporation (AEDC) - The AEDC is responsible for aiding,
promoting and furthering economic development within the City.
Allen Community Development Corporation (ACDC) - The ACDC is responsible for supporting
the improvements in community parks and recreation, streets and sidewalks, public safety and
the community library.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
34
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Financial Reporting Entity – Continued
The members of both the AEDC’s and ACDC’s Boards of Directors are appointed by the City
Council. Both the AEDC and ACDC are fiscally dependent upon the City as the City Council
approves their budgets and must approve any debt issuance. However, the component units
do not qualify for blending because the component services directly benefit the community
rather than the City itself. The AEDC and ACDC are discretely presented as governmental fund
types and do not issue separate financial statements.
Basis of Presentation
The government-wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all the non-fiduciary activities of the primary government and its
component units. The effect of interfund activity, within the governmental and business-type
activities columns, has been removed from these statements; however, interfund services provided
and used are not eliminated in the process of consolidation. Governmental activities, which
normally are supported by taxes and intergovernmental revenues, are reported separately from
business-type activities, which rely to a significant extent on fees and charges for support.
Additionally, the primary government is reported separately from the legally separate component
units for which the primary government is financially accountable.
The statement of activities demonstrates the degree to which the direct expenses of a given
program are offset by program revenues. Direct expenses are those that are clearly identifiable
with a specific program. Program revenues include 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given program
and 2) operating or capital grants and contributions that are restricted to meeting the operational
or capital requirements of a particular program. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
Fund Financial Statements:
The City segregates transactions related to certain functions or activities in separate funds to
aid financial management and to demonstrate legal compliance. Separate statements are
presented for governmental funds and proprietary funds. These statements present each
major fund as a separate column on the fund financial statements; all nonmajor funds are
aggregated and presented in a single column.
Governmental funds are those funds through which most governmental functions typically are
financed. The measurement focus of governmental funds is on the sources, uses and balances
of current financial resources. The City has presented the following major governmental funds:
General Fund -
The General Fund is the general operating fund of the City. It is used to account for all financial
resources not accounted for in other funds. All general tax revenues and other receipts that
are not restricted by law or contractual agreement to some other fund are accounted for in this
fund. General operating expenditures, fixed charges and capital improvement costs that are
not paid through other funds are paid from the General Fund.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
35
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Basis of Presentation – Continued
Debt Service Fund -
The Debt Service Fund is used to account for the accumulation of financial resources for the
payment of principal, interest and related costs on general long-term debt paid primarily from
taxes levied by the City. The fund balance of the Debt Service Fund is reserved to signify the
amounts that are restricted exclusively for debt service expenditures.
General Capital Projects Fund -
The General Capital Projects Fund is used to account for resources used for the acquisition
and/or construction of capital facilities by the City, except those financed by proprietary funds
and not accounted for by another capital projects fund.
General Obligation Bond Capital Projects Fund -
To account for financing, acquisitions, and construction of improvements to City facilities and
infrastructure not accounted for by other bond funds.
Proprietary Funds are accounted for using the economic resources measurement focus and the
accrual basis of accounting. The accounting objectives are determinations of net income, financial
position and cash flow. All assets and liabilities are included on the Statement of Net Position. The
City has presented the following major proprietary funds:
Enterprise Funds:
Water and Sewer Fund -
The Water and Sewer Fund is used to account for the provision of water and sewer services
to the residents of the City. Activities for the fund include administration, operations and
maintenance of the water and sewer system and billing and collection activities. The fund also
accounts for the accumulation of resources for, and the payment of, long-term debt principal
and interest for water and sewer debt. All costs are financed through charges to utility
customers with rates reviewed regularly and adjusted if necessary to ensure integrity of the
fund.
Solid Waste Fund -
The Solid Waste Fund is used to account for the provision of solid waste services to residents
of the City.
Drainage Fund -
The Drainage Fund is used to account for the provision of developing and maintaining proper
drainage services to the residents of the City.
Golf Course Fund -
The Golf Course Fund is used to account for activities associated with the operations of The
Courses at Watters Creek Golf Course purchased by the City in October 2004.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
36
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Basis of Presentation – Continued
Additionally, the City reports the following Internal Service Funds:
Internal Service Funds:
Replacement Fund -
The Replacement Fund is an internal service fund that accounts for the costs associated with
the acquisition and replacement of vehicles, machinery, and equipment through the rental of
such items to other departments.
Risk Management Fund -
The Risk Management Fund accounts for the costs associated with workers compensation,
liability and property insurance and medical and dental programs established for City
employees and their covered dependents.
Facility Maintenance Fund -
The Facility Maintenance Fund accumulates resources to address large repairs and aging
facility infrastructure. The accumulation of resources will help address major building repairs
and prevent building deterioration.
Proprietary funds distinguish operating revenues and expenses from non-operating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods relating to a proprietary fund’s principal ongoing operations. Operating expenses
for the proprietary funds include the cost of personnel and contractual services, supplies and
depreciation on capital assets. All revenues and expenses not meeting this definition are reported
as non-operating revenues and expenses.
Measurement Focus and Basis of Accounting
Measurement focus refers to what is being measured. Basis of accounting refers to when revenues
and expenditures are recognized in the accounts and reported in the financial statements. Basis
of accounting relates to the timing of the measurement made, regardless of the measurement focus
applied.
The government-wide statements and fund financial statements for proprietary funds are reported
using the economic resources measurement focus and the accrual basis of accounting. The
economic resources measurement focus means all assets and liabilities (whether current or non-
current) are included on the statement of net position and the operating statements present
increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of
accounting, revenues are recognized when earned, including unbilled water and sewer services
which are accrued. Expenses are recognized at the time the liabilities are incurred.
Governmental fund financial statements are reported using the current financial resources
measurement focus and are accounted for using the modified accrual basis of accounting. Under
the modified accrual basis of accounting, revenues are recognized when susceptible to accrual;
i.e., when they become both measurable and available. “Measurable” means the amount of the
transaction can be determined and “available” means collectible within the current period or soon
enough thereafter to be used to pay liabilities of the current period. The City considers all revenues
as available if they are collected within 60 days after year end.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
37
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Measurement Focus and Basis of Accounting - Continued
Expenditures are recorded when the related fund liability is incurred, except for unmatured interest
on general long-term debt which is recognized when due, and certain compensated absences and
claims and judgments which are recognized when the obligations are expected to be liquidated
with expendable available financial resources. The revenues susceptible to accrual are property
and sales taxes, franchise taxes and interest income. Other receipts (special assessments)
become measurable and available when cash is received by the City and are recognized as
revenue at that time.
Cash, Cash Equivalents and Investments
State statutes and policy as established by the City Council authorize the City to invest in
certificates of deposit, direct obligations of the U.S. Treasury, investment pools consisting of such
U.S. Treasury obligations, repurchase agreements, commercial paper and mutual funds.
Substantially all operating cash and cash equivalents are maintained in pooled cash and time
deposit accounts. Interest income relating to pooled deposits is allocated to the individual funds
based on each fund’s pro rata share of total pooled deposits.
For purposes of the statement of cash flows, the proprietary funds consider all highly liquid
investments (including restricted assets) with an original maturity of three months or less when
purchased to be cash equivalents, as they are available for withdrawal on demand.
Investments are recorded at amortized cost when original maturity at the time of purchase is less
than one year or at market if greater than one year.
Encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of funds are recorded in order to reserve that portion of the applicable appropriation,
is utilized in the governmental funds. Under the City’s budgetary process, appropriations lapse at
fiscal year-end. Encumbrances are reported as assigned fund balance because they do not
constitute expenditures or liabilities.
Property Taxes
The City’s property tax is levied each October 1 on the assessed value listed as of the prior January
1 for all real and certain personal property located within the City. Appraised values are established
by the Central Appraisal District of Collin County at 100% of estimated market value and certified
by the Appraisal Review Board. The assessed value upon which the 2016 levy was based is
$11,225,448,262. 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, 2017 was $0.52 per $100 of assessed valuation. In Texas,
countywide central appraisal districts are required to assess all property within the appraisal district
based on 100% of its appraised value and are prohibited from applying any assessment ratios. The
value of property within the appraisal district must be reviewed every three years; however, the City
may, at its own expense, require annual reviews of appraised values.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
38
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Property Taxes - Continued
The City may challenge appraised values established by the appraisal district through various
appeals and, if necessary, legal action. Under this legislation, the City continues to set tax rates on
City property. However, if the effective maintenance and operations tax rate, increased by 8%
excluding other contractual obligations, adjusted for new improvements, plus the calculated debt
tax rate is less than the proposed city tax rate, then qualified voters of the City may petition for an
election to determine whether to limit the tax rate to no more than the rollback tax rate.
Interfund Receivables and Payables
Activities between funds that are representative of lending/borrowing arrangements outstanding at
the end of the fiscal year are reported as “due to/from other funds”. Any residual balances
outstanding between the governmental activities and business-type activities are reported in the
government-wide financial statements as “internal balances”.
Transactions Between Funds and Between Funds and Component Units
Interfund services provided and used are accounted for as revenues, expenditures or expenses.
Transactions that constitute reimbursements to a fund for expenditures/expenses initially made
from it that are 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 fiscal year ended September 30, 2017,
ACDC contributed $411,669 and AEDC contributed $103,533 to the General Fund for
administrative costs and for the Allen U.S.A. Celebration. These revenues were reflected as grants
and contributions for the primary government in the government-wide statement of activities.
Inventories and Prepaid Items
Inventories, which are expended when consumed, are recorded using the average cost method,
and are valued at cost.
Prepaid items are for payments made by the City in the current year to provide services occurring
in the subsequent fiscal year. Prepaid items are reported as nonspendable fund balance in the
governmental funds in the fund level financial statements to signify that a portion of fund balance
is not available for other subsequent expenditures.
Special Assessments
The City has the authority to make special assessments to property owners as part of the financing
of capital improvements. Such assessments are recorded in the capital projects fund as receivables
when assessed and are recognized as revenue when both the measurable and available criteria
have been met (generally when collected).
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
39
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets, are reported in
the applicable governmental or business-type activities columns in the government-wide financial
statements and in the fund financial statements for proprietary funds. All capital assets are valued
at historical cost or estimated historical cost if actual historical cost is not available. Donated assets
are valued at acquisition value on the date donated. The costs of normal repairs and maintenance
that do not add to the value of the asset or materially extend the asset lives are not capitalized.
Renewals and betterments are capitalized. Interest has not been capitalized during the
construction period on property, plant and equipment.
Assets capitalized have an original cost of $5,000 or more and over one year of useful life.
Depreciation has been calculated on each class of depreciable property using the straight-line
method. Estimated useful lives are as follows:
Buildings 15 - 40 Years
Towers, tanks, and pump stations 30 Years
Infrastructure 10 - 50 Years
Machinery and equipment 3 - 15 Years
Vehicles 2 - 15 years
Library books 5 Years
Furniture and fixture 5 Years
Other improvements 2 - 30 Years
The City has established the Replacement Fund to account for the replacement of the City-owned
vehicle, machinery, and equipment. Charges for use in the form of user payments are made by
City departments to the Replacement Fund to provide for future acquisitions and replacements.
Compensated Absences
City employees earn vacation and sick leave, which may either be taken or accumulated, up to
certain amounts, until paid upon retirement or termination. Upon termination or retirement, an
employee is reimbursed up to a maximum number of hours of vacation pay and sick leave based
upon the years of service. Accumulated vacation and sick leave is accrued when incurred in the
government-wide, proprietary, and fiduciary fund financial statements.
Pensions
For purposes of measuring the net pension liability, pension related deferred outflows and inflows of
resources, and pension expense, City specific information about its Fiduciary Net Position in the
Texas Municipal Retirement System (TMRS) and additions to/deductions from the City’s Fiduciary
Net Position have been determined on the same basis as they are reported by TMRS. For this
purpose, plan contributions are recognized in the period that compensation is reported for the
employee, which is when contributions are legally due. Benefit payments and refunds are recognized
when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Information regarding the City’s Total Pension Liability is obtained from TMRS through a report
prepared for the City by TMRS consulting actuary, Gabriel Roeder Smith & Company, in compliance
with Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial
Reporting for Pensions.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
40
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position and/or balance sheet will sometimes report a
separate section for deferred outflows of resources. This separate financial statement element,
deferred outflows of resources, represents a consumption of net position that applies to a future
period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.
The City has the following items that qualify for reporting in this category:
Deferred charges on refundings – A deferred charge on refunding results from the difference
in the carrying value of refunded debt and its reacquisition price. This amount is deferred
and amortized over the shorter of the life of the refunded or refunding debt.
Pension contributions after measurement date – These contributions are deferred and
recognized in the following fiscal year.
Difference in projected and actual earnings on pension assets – This difference is deferred
and amortized over a closed five-year period.
Difference between expected and actual pension experience – This difference is deferred
and amortized over a closed period of 5.49 years.
In addition to liabilities, the statement of net position and/or balance sheet will sometimes report a
separate section for deferred inflows of resources. This separate financial statement element,
deferred inflows of resources, represents an acquisition of net position that applies to a future
period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City
has three types of items that qualify for reporting in this category. In the statement of net position, the
City reports the difference in expected and actual pension experience and the changes in actuarial
assumptions. These are deferred and recognized over the estimated average remaining lives of all
members determined as of the measurement date. In the balance sheet for the governmental funds,
the City reports unavailable revenue for property taxes not received within 60 days of year end.
Net Position
Net position represents the difference between assets, liabilities, and deferred inflows and outflows.
Net investment in capital assets consists of capital assets, net of accumulated depreciation,
reduced by the outstanding balances of any borrowing used for the acquisition, construction or
improvements of those assets, and adding back unspent proceeds. Net position is reported as
restricted when there are limitations imposed on their use either through the enabling legislations
adopted by the City or through external restrictions imposed by creditors, grantors or laws or
regulations of other governments.
Fund Balance
Fund balance classifications are nonspendable, restricted, committed, assigned, and unassigned.
These classifications reflect not only the nature of funds, but also provide clarity to the level of
restriction placed upon fund balance. Fund balance can have different levels of constraint, such
as external versus internal compliance requirements. Unassigned fund balance is a residual
classification within the General Fund. The General Fund should be the only fund that reports a
positive unassigned balance. In all other funds, unassigned is limited to negative residual fund
balance.
The City classifies governmental fund balances as follows:
Nonspendable -- includes amounts that cannot be spent because they are either not in spendable
form, or, for legal or contractual reasons, must be kept intact. This classification includes
inventories, prepaid items and long-term receivables.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
41
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Fund Balance – Continued
Restricted -- includes fund balance amounts that are constrained for specific purposes which are
externally imposed by providers, such as creditors or amounts restricted due to constitutional
provisions or enabling legislation. This classification includes retirement of long term debt,
construction programs, and other federal and state grants.
Committed -- includes fund balance amounts that are constrained for specific purposes that are
internally imposed by the City through formal action of the highest level of decision making
authority. Committed fund balance is reported pursuant to resolution passed by the City Council.
Assigned -- includes fund balance amounts that are self-imposed by the City to be used for a
particular purpose. Fund balance can be assigned by the City Manager or the Chief Financial
Officer. This classification includes insurance deductibles, encumbrances, program start-up costs,
projected budget deficit for subsequent years and other legal uses.
Unassigned -- includes residual positive fund balance within the General Fund which has not been
classified within the other above-mentioned categories. Unassigned fund balance may also include
negative balances for any governmental fund if expenditures exceed amounts restricted,
committed, or assigned for those specific purposes.
When multiple categories of fund balance are available for expenditure, the City will start with the
most restricted category and spend those funds first before moving down to the next category with
available funds.
Minimum General Fund Unassigned Fund Balance - It is the goal of the City to achieve and maintain
an unassigned General Fund balance that is within a range of 60 to 90 days of annual expenditures.
If unassigned General Fund balance falls below the goal or has a deficiency, the City will establish
a timeframe and work plan to replenish the fund balance. The work plan may include tax increases,
fee increases, reduction of services, and/or reduction of expenditures (i.e. hiring freeze, salary
freeze, or reduction of travel/training).
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, 2017, with collateral required by state statutes. At year-end, the carrying amount of the City’s
deposits was $9,288,166 and the bank balance was $10,372,584. Of the bank balance, federal
depository insurance covered $250,000 and the remainder was covered by collateral held by the
pledging financial institution’s agent in the City’s name. The City’s petty cash balance at September
30, 2017 was $46,325.
The carrying amount of deposits for ACDC and AEDC, discretely presented component units, were
$272,102 and ($782,104), respectively, with no corresponding bank balances as they are pooled with
the City’s deposits. AEDC’s petty cash balance at September 30, 2017 was $100.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
42
NOTE 2. DEPOSITS, INVESTMENTS AND INVESTMENT POLICIES – CONTINUED
Investments – State statutes authorize the City to invest in U.S. Government obligations, obligations
of Texas and its agencies and fully collateralized repurchase agreements. The City, AEDC and ACDC
invest in Texpool which is an investment fund authorized by the Texas Legislature and administered
by the Texas State Treasury. The Texas Treasury Safekeeping Trust Company is trustee of Texpool
and is a limited purpose trust company authorized pursuant to Texas Government Code. The purpose
of Texpool is to allow for the pooling of public funds to provide a higher yield on the pooled investment
than would be possible with the investment of the individual public entity’s funds. Texpool investments
are subject to the same investment policies maintained by the State Treasury for all state funds. The
Legislature has authorized only certain investment instruments for public funds, including repurchase
agreements, U.S. Treasury bills and bonds, securities of other U.S. Government agencies, commercial
paper and other safe instruments.
The table below identifies the investment types that are authorized for the City by the Public Funds
Investment Act. (Government Code Chapter 2256). The table also identifies certain provisions of the
City’s investment policy that address interest rate risk, credit risk, and concentration of credit risk.
Maximum
Authorized Maximum Investment
Investment Type Maturity In One Issuer
Certificates of Deposit 5 years None
Repurchase Agreements 5 years None
U. S. Treasure Obligations 5 years None
Municipal Investment Pool 5 years None
Commercial Bank Savings Account 5 years None
Money Market Mutual Fund 5 years None
U. S. Government Securities (non-callable) 5 years None
U. S. Government Securities (callable) 5 years None
U. S. Government Sponsored Corp. 5 years None
Instruments: non-callable
U. S. Government Sponsored Corp. 5 years None
Instruments: callable
Commercial Paper 5 years None
Bankers Acceptance 5 years None
Guaranteed Investment Contracts 5 years None
State or Local Governmental Obligations 5 years None
The City categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. GASB Statement No. 72, Fair Value Measurement and Application
provides a framework for measuring fair value which establishes a three-level fair value hierarchy that
describes the inputs that are used to measure assets and liabilities.
Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets
that a government can access at the measurement date.
Level 2 inputs are inputs—other than quoted prices included within Level 1—that are
observable for an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
43
NOTE 2. DEPOSITS, INVESTMENTS AND INVESTMENT POLICIES – CONTINUED
The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3
inputs. If a price for an identical asset or liability is not observable, a government should measure fair
value using another valuation technique that maximizes the use of relevant observable inputs and
minimizes the use of unobservable inputs. If the fair value of an asset or a liability is measured using
inputs from more than one level of the fair value hierarchy, the measurement is considered to be based
on the lowest priority level input that is significant to the entire measurement.
The City’s investments are measured as presented in the table below. The City’s investment balances,
weighted average maturity, and credit risk of such investments are as follows:
Significant
Other
Total Observable Weighted
Investment Primary September 30, Inputs % of Total Avg. Maturity Credit
Type Government AEDC ACDC 2017 (Level 2) Investments (Years) Rating
Investments Measured at Amortized Cost:
TexPool 542,838$ 3,660,792$ 3,802,630$ 8,006,259$ -$ 5.49% 0.01 AAAm
Investments Measured at NAV:
Money Market Accounts 3,579 - - 3,579 0.00% 0.00 AAAm
TexSTAR 3,023,137 - - 3,023,137 - 2.07% 0.00 AAAm
Texas CLASS 30,294,169 - - 30,294,169 - 20.77% 0.03 AAAm
Investments Measured at Cost:
Certificates of Deposit 27,103,576 2,825,403 2,994,659 32,923,639 22.58% 0.35 n/a
Investments Subject to Fair Value:
U.S. Agencies 58,106,771 6,057,340 6,420,207 70,584,318 70,584,318 48.40% 1.01 AA+
Municipal Bonds 820,516 85,535 90,659 996,710 996,710 0.68% 0.00 AA-
Total 119,894,586$ 12,629,070$ 13,308,155$ 145,831,811$ 71,581,028$
Investment Pools, money markets, and certificates of deposits are measured at amortized cost, net
asset value, or cost and are not required to be reported by levels in the table.
TexPool is an external investment pool measured at amortized cost. In order to meet the criteria to be
recorded at amortized cost, investment pools must transact at a stable net asset value per share and
maintain certain maturity, quality, liquidity and diversification requirements within the investment pool.
The investment pools transact at a net asset value of $1.00 per share, have weighted average maturity
of 60 days or less and weighted average life of 120 days or less, investments held are highly rated by
nationally recognized statistical rating organization, have no more than 5% of portfolio with one issuer
(excluding US government securities), and can meet reasonably foreseeable redemptions. TexPool
has a redemption notice period of one day and no maximum transaction amounts. The investment
pools' authority may only impose restrictions on redemptions in the event of a general suspension of
trading on major securities market, general banking moratorium or national or state emergency that
affects the pools' liquidity.
Texas CLASS and TexSTAR investment pools are external investment pools measured at their net
asset value. Texas CLASS and TexSTAR’s strategy are to seek preservation of principal, liquidity and
current income through investment in a diversified portfolio of short-term marketable securities. The
City has no unfunded commitments related to the investment pools. Texas CLASS and TexSTAR have
a redemption notice period of one day and may redeem daily. The investment pools’ authorities may
only impose restrictions on redemptions in the event of a general suspension of trading on major
securities market, general banking moratorium or national or state emergency that affects the pools’
liquidity.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
44
NOTE 2. DEPOSITS, INVESTMENTS AND INVESTMENT POLICIES – CONTINUED
The Texas Comptroller of Public Accounts is the sole officer, director, and shareholder of the Texas
Treasury Safekeeping Trust Company, which is authorized to operate TexPool. In addition, the TexPool
Advisory Board advises on TexPool’s Investment Policy. This Board is composed equally of participants
in TexPool and other persons who do not have a business relationship with TexPool who are qualified
to advise TexPool.
Texas CLASS (Texas Cooperative Liquid Assets Security System) was organized in March 1996 under
a trust agreement executed by and among Texas local governmental entities in accordance with the
Public Funds Investment Act, and the Texas Government Code and remains in full compliance with
Chapter 2256. The fund is administered by Public Trust Advisors, LLC and is rated AAAm by Standard
& Poor’s Rating Services.
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value
of an investment. Investments with interest rates that are fixed for longer periods of time are more
likely to be subject to increased variability in their fair values due to changes in the market interest
rates. The City manages its exposure to market price changes by avoiding over-concentration of
assets in a specific maturity sector, limitation of average maturity of operating funds investments to
less than eighteen months, and avoidance of over-concentration of assets in specific instruments
other than U.S. Treasury Securities and authorized investment pools.
Credit Risk
The City’s Investment policy, in conjunction with state law, specifies the type of credit rating of all
authorized investments.
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the
investment. This type of risk is typically expressed in 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 (FFCB, FHLB,
FHLMC, and FNMA) are rated AA+ by Standard & Poor’s and Aaa by Moody’s Investors Service.
The City’s investments in municipal bonds are rated AA- by Standard and Poor’s and Aa3 by
Moody’s Investors Service. Investments in TexPool, TexSTAR, Texas CLASS, and money market
accounts carried a credit rating of AAAm by Standard & Poor’s as of September 30, 2017.
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of a government's
investment in a single issuer. The City's investment policy controls concentration of credit risk by
limiting the amount of investment with a single issuer to no more than 35% of the total portfolio with
the exception of State approved investment pools and U.S. Government Securities. As of
September 30, 2017, with the exception of funds invested in TexPool, TexSTAR, or Texas CLASS,
the following table represents 5% or more of the City’s investments.
Issuer Investment Type Reported Amount Percentage
FNMA Federal agency securities 15,840,606$ 10.86%
FFCB Federal agency securities 21,375,305 14.66%
FHLB Federal agency securities 23,867,353 16.37%
FHLMC Federal agency securities 9,501,054 6.52%
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
45
NOTE 2. DEPOSITS, INVESTMENTS AND INVESTMENT POLICIES – CONTINUED
Custodial Credit Risk
The custodial credit risk for deposits is the risk that, in the event of the failure of a depository
financial institution, a government will not be able to recover deposits or will not be able to recover
collateral securities that are in the possession of an outside party.
The custodial credit risk for investments is the risk that, in the event of failure of the counterparty to
a transaction, a government will not be able to recover the value of investment or collateral
securities that are in the possession of an outside party. The City’s investment policy minimizes
custodial credit risk by requiring pledged securities to be in the name of the City.
The Public Funds Investment Act does require that financial institutions secure deposits made by
state or local governmental bodies by pledging securities in an undivided collateral pool held by a
depository regulated under state law. The market value of the pledged securities of the collateral
must always remain at least equivalent to the bank balance less the FDIC insurance.
As of September 30, 2017, the City’s deposits with financial institutions above the federal
depository limits were fully collateralized.
NOTE 3. RECEIVABLES
Receivables at September 30, 2017 for both governmental and business-type activities, including the
applicable allowances for uncollectible accounts, consist of the following:
Property Sales Accrued
Tax Taxes Accounts Interest Other Total
General Fund 258,866$ 3,043,995$ 804$ 51,111$ 4,988,108$ 8,342,884$
Debt Service 68,926 - - 2,286 1,557 72,769
General Capital Projects - - - 39,201 710,040 749,241
G.O. Bond Fund - - - 39,593 11,308 50,901
Nonmajor Governmental Funds - - 426,223 20,281 - 446,504
Water and Sewer - - 6,554,322 41,943 182,931 6,779,196
Solid Waste - - 785,337 5,747 135,807 926,891
Drainage - - 213,312 1,727 - 215,039
Golf Course - - - - 100 100
Internal Service Funds - - 7,056 29,481 - 36,537
Gross Receivables 327,792 3,043,995 7,987,054 231,370 6,029,851 17,620,062
Less: Allowance for
Uncollectibles (288,737) - (28,855) - (1,744,894) (2,062,486)
Total Net Receivables,
Primary Government 39,055$ 3,043,995$ 7,958,199$ 231,370$ 4,284,957$ 15,557,576$
Component Units -$ 3,043,994$ -$ 46,555$ -$ 3,090,549$
The Water and Sewer Fund, Solid Waste Fund, and Drainage Fund accounts receivable include
unbilled charges for services rendered through September 30, 2017.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
46
NOTE 4. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2017 was as follows:
Governmental Activities
Balance Balance
September 30, Adjustments/ September 30,
2016, as Restated Additions Dispositions Transfers 2017
Governmental Funds:-
General capital assets
not being depreciated:
Land and land improvements 135,405,711$ 3,619,242$ -$ 44,335$ 139,069,288$
Construction in progress 16,656,539 5,813,702 - (14,978,083) 7,492,158
Total capital assets
not being depreciated 152,062,250 9,432,944 - (14,933,748) 146,561,446
General capital assets
being depreciated:
Buildings 95,714,580 - - 5,460,588 101,175,168
Improvements -
other than buildings 473,153,894 10,624,701 (84,410) 12,646,184 496,340,369
Furniture and fixtures 7,641,528 - (117,770) - 7,523,758
Vehicles 1,692,894 140,456 (143,601) - 1,689,749
Library books 1,632,126 - (723,101) - 909,025
Machinery and equipment 9,375,362 430,675 (431,757) - 9,374,280
Total capital assets being
depreciated 589,210,384 11,195,832 (1,500,639) 18,106,772 617,012,349
Less accumulated
depreciation for:
Buildings (25,898,765) (2,412,716) - - (28,311,481)
Improvements -
other than buildings (258,873,735) (18,210,407) 84,410 (2,639,906) (279,639,638)
Furniture and fixtures (7,623,230) (15,931) 117,770 - (7,521,391)
Vehicles (1,458,722) (81,987) 143,601 - (1,397,108)
Library books (1,240,988) (163,917) 723,101 - (681,804)
Machinery and equipment (8,683,469) (206,160) 431,757 - (8,457,872)
Total accumulated
depreciation (303,778,909) (21,091,118) 1,500,639 (2,639,906) (326,009,294)
Total general capital assets
being depreciated, net 285,431,475 (9,895,286) - 15,466,866 291,003,055
General capital assets, net 437,493,725$ (462,342)$ -$ 533,118$ 437,564,501$
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
47
NOTE 4. CAPITAL ASSETS – CONTINUED
Balance Balance
September 30, Adjustments/ September 30,
2016 Additions Dispositions Transfers 2017
Internal Service Funds:
Internal service funds assets
not being depreciated:
Construction in progress 616,326$ -$ -$ (616,326)$ -$
Total capital assets
not being depreciated 616,326 - - (616,326) -
Internal service
assets being depreciated:
Vehicles 12,268,519 2,920,147 (1,036,917) 616,326 14,768,075
Machinery and equipment 5,906,680 205,264 (269,319) - 5,842,625
Total internal service
assets being depreciated 18,175,199 3,125,411 (1,306,236) 616,326 20,610,700
Less accumulated
depreciation for:
Vehicles (8,177,795) (1,430,696) 1,036,917 - (8,571,574)
Machinery and equipment (2,497,492) (566,198) 269,319 - (2,794,371)
Total accumulated
depreciation (10,675,287) (1,996,894) 1,306,236 - (11,365,945)
Total Internal service funds
capital assets being depreciated, net 7,499,912 1,128,517 - 616,326 9,244,755
Total Internal service funds
capital assets, net 8,116,238 1,128,517 - - 9,244,755
Governmental activities
capital assets, net $ 445,609,963 $ 666,175 -$ 533,118$ $ 446,809,256
Business-Type Activities
Balance Balance
September 30, Adjustments/ September 30,
2016 Additions Dispositions Transfers 2017
Water and Sewer Activities:
Capital assets not being depreciated:
Land 4,072,882$ -$ -$ -$ 4,072,882$
Construction in progress 2,059,167 2,732,001 - (564,195) 4,226,973
Total capital assets not
being depreciated 6,132,049 2,732,001 - (564,195) 8,299,855
Capital Assets Being depreciated:
Towers, tanks, & pumps stations 186,525,682 4,233,683 (376,901) 248,427 190,630,891
Machinery and equipment 5,492,410 - (1,580,696) 315,768 4,227,482
Vehicles 853,145 48,221 (46,333) - 855,033
Total capital assets
being depreciated 192,871,237 4,281,904 (2,003,930) 564,195 195,713,406
Less accumulated depreciation for:
Towers, tanks, & pumps stations (83,081,654) (5,778,514) 376,901 - (88,483,267)
Machinery and equipment (3,872,737) (439,980) 1,580,696 - (2,732,021)
Vehicles (793,816) (26,126) 46,333 - (773,609)
Total accumulated
depreciation (87,748,207) (6,244,620) 2,003,930 - (91,988,897)
Total capital assets
being depreciated, net 105,123,030 (1,962,716) - 564,195 103,724,509
Water and sewer activities
capital assets, net 111,255,079$ 769,285$ -$ -$ 112,024,364$
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
48
NOTE 4. CAPITAL ASSETS – CONTINUED
Balance Balance
September 30, September 30,
2016 Additions Dispositions 2017
Solid Waste Activities:
Capital assets being depreciated:
Machinery and equipment 12,359$ -$ -$ 12,359$
Vehicles 140,440 - - 140,440
Total capital assets
being depreciated 152,799 - - 152,799
Less accumulated depreciation for:
Machinery and equipment (7,988) (1,249) - (9,237)
Vehicles (7,022) (14,044) - (21,066)
Total accumulated
depreciation (15,010) (15,293) - (30,303)
Solid waste activities
capital assets, net 137,789$ (15,293)$ -$ 122,496$
Drainage Activities:
Capital assets being depreciated:
Other improvements 496,132$ -$ -$ 496,132$
Vehicles 151,554 - - 151,554
Machinery and equipment 422,231 63,970 (42,030) 444,171
Total capital assets
being depreciated 1,069,917 63,970 (42,030) 1,091,857
Less accumulated
depreciation for:
Other improvements (165,565) (12,264) - (177,829)
Vehicles (23,556) (13,473) - (37,029)
Machinery and equipment (383,981) (13,652) 42,030 (355,603)
Total accumulated
depreciation (573,102) (39,389) 42,030 (570,461)
Drainage activities
capital assets, net 496,815$ 24,581$ -$ 521,396$
Golf Course Activities:
Capital assets being depreciated:
Machinery and equipment 1,039,720$ -$ -$ 1,039,720$
Total capital assets
being depreciated 1,039,720 - - 1,039,720
Less accumulated
depreciation for:
Machinery and equipment (764,571) (140,155) - (904,726)
Total accumulated
depreciation (764,571) (140,155) - (904,726)
Golf course activities
capital assets, net 275,149 (140,155) - 134,994
Business-type activities
capital assets, net 112,164,832$ 638,418$ -$ 112,803,250$
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
49
NOTE 4. CAPITAL ASSETS – CONTINUED
Balance Balance
September 30, Adjustments/ September 30,
2016, as Restated Additions Dispositions Transfers 2017
Economic Development Corporation:
Capital assets not being depreciated:
Land and Land Improvements 9,023,086$ 10,521,016$ (632,937)$ (44,335)$ 18,866,830$
Capital assets being depreciated:
Improvements other
than buildings 3,128,689 - - (3,128,689) -
Furniture and fixtures 66,075 - (66,075) - -
Total capital assets being
depreciated 3,194,764 - (66,075) (3,128,689) -
Less accumulated depreciation for:
Improvements other than buildings (2,639,906) - - 2,639,906 -
Furniture and fixtures (66,075) - 66,075 - -
Total accumulated depreciation (2,705,981) - 66,075 2,639,906 -
Total capital assets being depreciated, net 488,783 - - (488,783) -
Economic Development Corporation
capital assets, net 9,511,869$ 10,521,016$ (632,937)$ (533,118)$ 18,866,830$
Community Development Corporation:
Capital assets not being depreciated:
Land and Land Improvements 2,239,201$ -$ -$ -$ 2,239,201$
Construction in progress 5,786,232 1,531,817 - (6,811,105) 506,944
Total capital assets
not being depreciated 8,025,433 1,531,817 - (6,811,105) 2,746,145
Capital assets being depreciated:
Buildings 36,225,091 - - - 36,225,091
Machine & Equipment 1,989,049 250,408 - - 2,239,457
Improvements other
than buildings 25,762,880 - - 6,811,105 32,573,985
Furniture and fixtures 317,194 - - - 317,194
Vehicles 646,971 - - - 646,971
Total capital assets being
depreciated 64,941,185 250,408 - 6,811,105 72,002,698
Less accumulated depreciation for:
Buildings (6,113,571) (915,036) - - (7,028,607)
Machine & Equipment (1,575,557) (180,198) - - (1,755,755)
Improvements other than buildings (11,738,956) (1,956,571) - - (13,695,527)
Furniture and fixtures (317,194) - - - (317,194)
Vehicles (599,510) (13,560) - - (613,070)
Total accumulated depreciation (20,344,788) (3,065,365) - - (23,410,153)
Total capital assets being depreciated, net 44,596,397 (2,814,957) - 6,811,105 48,592,545
Community Development Corporation
capital assets, net 52,621,830 (1,283,140) - - 51,338,690
Component units capital assets, net 62,133,699$ 9,237,876$ (632,937)$ (533,118)$ 70,205,520$
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
50
NOTE 4. CAPITAL ASSETS – CONTINUED
Depreciation expense was charged as direct expense to programs of the primary government and
component units as follows:
Governmental activities:
General government 1,084,853$
Public safety 761,397
Public works 14,647,754
Culture and recreation 4,593,144
Community development 3,970
Total depreciation expense - General capital assets 21,091,118
Internal Service Funds 1,996,894
Total depreciation expense - Governmental activities 23,088,012$
Business-type activities:
Water and sewer 6,244,621$
Solid waste 15,293
Drainage ut ility 39,389
Golf course 140,155
Total depreciation expense - Business-type activities 6,439,458$
Component units:
Allen Community Development Corporation 3,065,365$
Outstanding commitments at September 30, 2017, under authorized construction contracts were
$1,178,502. These outstanding commitments for capital projects will be funded from unexpended bond
proceeds and additional general obligation bonds.
NOTE 5. LONG-TERM DEBT
At September 30, 2017, bonds payable consisted of the following individual issues:
General Obligation Bonds:
$1,595,000 Series 2006 Bonds due in annual installments
of $50,000 to $115,000 through August 15, 2026;
interest at 4.0% to 4.20%. 880,000$
$15,400,000 Series 2009 Bonds due in annual installments
of $435,000 to $1,140,000 through August 15, 2028;
interest at 2.5% to 4.5%. 3,225,000
$12,000,000 Series 2010 Bonds due in annual installments
of $370,000 to $865,000 through August 15, 2029;
interest at 2.0% to 4.0%. 8,465,000
$8,785,000 Series 2010A Refunding Bonds due in annual
installments of $110,000 to $970,000 through August 15,
2022; interest at 2.0% to 3.0%. 4,550,000
$8,840,000 Series 2011 Refunding and Improvement Bonds
due in annual installments of $255,000 to $795,000 through
August 15, 2030; interest at 2.0% to 4.25%. 4,895,000
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
51
NOTE 5. LONG-TERM DEBT – CONTINUED
General Obligation Bonds – continued
$13,865,000 Series 2012 Refunding and Improvement Bonds
due in annual installments of $350,000 to $1,600,000 through
August 15, 2024; interest at 2.0% to 5.0%. 9,800,000$
$5,065,000 Series 2013 Bonds due in annual installments
of $190,000 to $340,000 through August 15, 2032;
interest at 2.0% to 3.5%.4,200,000
$10,595,000 Series 2014 Bonds due in annual installments
of $375,000 to $740,000 through August 15, 2033;
interest at 2.0% to 4.0%.9,310,000
$32,245,000 Series 2015 Refunding and Improvement Bonds
due in annual installments of $160,000 to $3,605,000 through
August 15, 2034; interest at 2.0% to 5.0%. 25,495,000
$6,910,000 Series 2016 Refunding Bonds due in annual
installments of $775,000 to $1,000,000 through
August 15, 2028; interest at 2.0% to 4.0%. 5,910,000
$11,845,000 Series 2017 Bonds due in annual installments
of $645,000 to $1,130,000 through August 15, 2032;
interest at 2.25% to 5.0%.11,845,000
88,575,000$
Certificates of Obligation:
$765,000 Series 2004B Combination Tax & Revenue
Golf Course Certificates of Obligation due in annual
installments of $25,000 to $70,000 through
September 1, 2024; interest at 4.875% to 5.50%. 405,000$
405,000$
Tax Notes:
$1,940,000 Series 2016 Tax Notes due in annual
installments of $620,000 to $685,000 through
August 15, 2019; interest at 2.0%. 1,255,000$
1,255,000$
Water and Sewer Revenue Bonds:
$5,795,000 Series 2009 Refunding Bonds due installments
$530,000 to $630,000 through June 1, 2019;
interest at 1.2% to 3.5%.1,240,000
$3,370,000 Series 2013 Refunding Bonds due installments
$90,000 to $385,000 through June 1, 2025;
interest at 2.0% to 3.0%.2,715,000
$1,280,000 Series 2014 Refunding Bonds due installments
$105,000 to $265,000 through June 1, 2024;
interest at 2.1%.805,000
4,760,000$
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
52
NOTE 5. LONG-TERM DEBT – CONTINUED
AEDC Sales Tax Revenue Bonds:
$11,810,000 Series 2017A Refunding Bonds due in
annual installments of $880,000 to $1,335,000 through
September 1, 2027; interest at 2.0% to 5.0%. 10,930,000$
$6,140,000 Series 2017B Sales Tax Revenue Bonds
due in annual installments of $1,510,000 to $1,565,000
through September 1, 2020; interest at 1.25% to 2.3%. 4,610,000
15,540,000$
AEDC Promissory Note:
$4,400,000 Promissory Note due in annual installments
of $679,853 through June 11, 2022; interest at 2.00%. 3,204,458$
3,204,458$
ACDC Sales Tax Revenue Bonds:
$31,235,000 Series 2016 Refunding Bonds due in
annual installments of $1,715,000 to $3,825,000 through
September 1, 2025; interest at 0.750% to 2.353%. 29,520,000$
29,520,000$
The following is a summary of long-term debt transactions, including current portion, of the City for
the year ended September 30, 2017:
Balance Balance Due
Beginning End Within
of Year Increases Decreases of Year One Year
Governmental Activities
General obligation bonds 86,445,000$ 11,845,000$ (9,715,000)$ 88,575,000$ 10,145,000$
Certificates of obligation 450,000 - (45,000) 405,000 45,000
Tax notes 1,940,000 - (685,000) 1,255,000 620,000
Capital lease payable 1,700,000 - (450,000) 1,250,000 450,000
Premiums (discounts)7,475,844 955,225 (821,074) 7,609,995 912,981
Compensated absences 5,625,384 3,654,892 (3,054,481) 6,225,795 3,178,955
Net pension liability 26,532,334 1,129,441 - 27,661,775 -
Governmental activity
long-term debt 130,168,562$ 17,584,558$ (14,770,555)$ 132,982,565$ 15,351,936$
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
53
NOTE 5. LONG-TERM DEBT – CONTINUED
The general fund has typically been used to liquidate the liability for compensated absences for
governmental activities.
Balance Balance Due
Beginning End Within
of Year Increases Decreases of Year One Year
Business-Type Activities
Water and sewer revenue bonds 5,760,000$ -$ (1,000,000)$ 4,760,000$ 1,040,000$
Capital lease payable 252,519 - (136,040) 116,479 93,168
Premiums (discounts) 195,868 - (30,021) 165,847 30,021
Net pension liability 3,287,519 136,590 - 3,424,109 -
Compensated absences 685,994 400,987 (360,122) 726,859 373,380
Business-type activity
long-term debt 10,181,900$ 537,577$ (1,526,183)$ 9,193,294$ 1,536,569$
Component Unit
Allen Community Development Corporation
Sales tax revenue bonds 31,235,000$ -$ (1,715,000)$ 29,520,000$ 1,715,000$
ACDC long-term debt 31,235,000$ -$ (1,715,000)$ 29,520,000$ 1,715,000$
Allen Economic Development Corporation
Sales tax revenue bonds 15,695,000$ 17,950,000$ (18,105,000)$ 15,540,000$ 2,420,000$
Note payable 3,808,147 - (603,689) 3,204,458 615,763
Premiums (discounts) (34,710) 1,389,763 (97,648) 1,257,405 132,358
AEDC long-term debt 19,468,437$ 19,339,763$ (18,806,337)$ 20,001,863$ 3,168,121$
Component unit long-term debt 50,703,437$ 19,339,763$ (20,521,337)$ 49,521,863$ 4,883,121$
Debt Issuance, Cash Defeasance, and Advanced Refunding
In 2017, the City issued $11,845,000 of general obligation bonds to provide resources to construct
projects associated with public facilities, public safety facilities, and street and drainage infrastructure.
In 2017, the AEDC paid $3,184,059 to provide resources to purchase U.S. Government State and Local
Government Series securities that were placed in an irrevocable trust for the purpose of generating
resources for all future debt service payments of $2,900,000 of sales tax revenue bonds. As a result,
the bonds are considered defeased and the liability has been removed from the component units column
of the statement of net position. The cash defeasance was undertaken to reduce total debt service
payments over the next seven years by $87,493 and resulted in an economic gain of $68,849.
Additionally, the AEDC issued $11,810,000 of sales tax revenue refunding bonds to provide resources
to purchase U.S. Government State and Local Government Series securities that were placed in an
irrevocable trust for the purpose of generating resources for all future debt service payments of
$12,795,000 of sales tax revenue bonds. As a result, the refunded bonds are considered defeased and
the liability has been removed from the component units column of the statement of net position. The
advance refunding was undertaken to reduce total debt service payments over the next 16 years by
$1,497,102 and resulted in an economic gain of $1,151,087. Finally, the AEDC issued $6,140,000 in
sales tax revenue bonds for the purpose of land acquisition and infrastructure improvements.
Annual Requirements to Retire Debt Obligations
The City intends to retire all of its general long-term liabilities, plus accrued interest, from ad valorem
taxes and other current revenues. The proprietary fund type long-term debt will be repaid, plus accrued
interest, from operating revenues of the Water and Sewer Fund. The annual aggregate maturities for
each bond type for the years subsequent to September 30, 2017, are on the following pages.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
54
NOTE 5. LONG-TERM DEBT – CONTINUED
Annual Requirements to Retire Debt Obligations – Continued
General Obligation Bonds
Annual debt service requirements to maturity for general obligation bonds, including interest,
are as follows:
Fiscal Year Ending
September 30 Principal Interest Total
2018 10,145,000$ 3,420,450$ 13,565,450$
2019 9,215,000 2,993,034 12,208,034
2020 8,465,000 2,630,353 11,095,353
2021 7,830,000 2,307,814 10,137,814
2022 7,185,000 2,014,731 9,199,731
2023 - 2027 28,635,000 6,539,884 35,174,884
2028 - 2032 15,325,000 1,871,228 17,196,228
2033 - 2034 1,775,000 80,300 1,855,300
Total 88,575,000$ 21,857,794$ 110,432,794$
Governmental Activities
Certificates of Obligation
Annual debt service requirements to maturity for the Certificates of Obligation, including
interest, are as follows:
Fiscal Year Ending
September 30 Principal Interest Total
2018 45,000$ 21,810$ 66,810$
2019 50,000 19,470 69,470
2020 55,000 16,820 71,820
2021 60,000 13,905 73,905
2022 60,000 10,665 70,665
2023 - 2024 135,000 11,275 146,275
Total 405,000$ 93,945$ 498,945$
Governmental Activities
Tax Notes
Annual debt service requirements to maturity for the Tax Notes, including interest, are as
follows:
Fiscal Year Ending
September 30 Principal Interest Total
2018 620,000$ 25,100$ 645,100$
2019 635,000 12,700 647,700
Total 1,255,000$ 37,800$ 1,292,800$
Governmental Activities
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
55
NOTE 5. LONG-TERM DEBT – CONTINUED
Annual Requirements to Retire Debt Obligations – Continued
Water and Sewer Revenue Bonds
Revenue bond debt service requirements to maturity, including interest, are as follows:
Fiscal Year Ending
September 30 Principal Interest Total
2018 1,040,000$ 141,674$ 1,181,674$
2019 1,070,000 108,426 1,178,426
2020 455,000 74,176 529,176
2021 465,000 61,573 526,573
2022 475,000 48,670 523,670
2023 - 2025 1,255,000 65,124 1,320,124
Total 4,760,000$ 499,643$ 5,259,643$
Business-type Activities
AEDC Sales Tax and Revenue Bonds
Sales Tax Revenue bond debt service requirements to maturity, including interest, are as
follows:
Fiscal Year Ending
September 30 Principal Interest Total
2018 2,420,000$ 581,410$ 3,001,410$
2019 2,475,000 529,195 3,004,195
2020 2,530,000 470,295 3,000,295
2021 1,005,000 395,700 1,400,700
2022 1,045,000 355,500 1,400,500
2023 - 2027 6,065,000 939,250 7,004,250
Total 15,540,000$ 3,271,350$ 18,811,350$
AEDC
AEDC Note Payable
The note payable debt service requirements to maturity, including interest, are as follows:
Fiscal Year Ending
September 30 Principal Interest Total
2018 615,763$ 64,089$ 679,852$
2019 628,080 51,774 679,854
2020 640,640 39,212 679,852
2021 653,453 26,400 679,853
2022 666,522 13,330 679,852
Total 3,204,458$ 194,805$ 3,399,263$
AEDC
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
56
NOTE 5. LONG-TERM DEBT – CONTINUED
Annual Requirements to Retire Debt Obligations – Continued
ACDC Sales Tax and Revenue Bonds
Sales Tax Revenue bond debt service requirements to maturity, including interest, are as
follows:
Fiscal Year Ending
September 30 Principal Interest Total
2018 1,715,000$ 695,581$ 2,410,581$
2019 1,735,000 676,819 2,411,819
2020 1,755,000 654,489 2,409,489
2021 1,785,000 626,866 2,411,866
2022 1,815,000 595,735 2,410,735
2023 - 2027 9,685,000 2,372,087 12,057,087
2028 - 2032 11,030,000 1,027,079 12,057,079
Total 29,520,000$ 6,648,656$ 36,168,656$
ACDC
A schedule of authorized but unissued direct General Obligation Bonds as of September 30,
2016, is as follows:
Date of Original Amount Issued in Issued Unissued
Purpose Authorization Authorized Prior Fiscal Years in 2017 Balance
Service Center Facilities 5/12/2007 14,500,000 12,500,000 - 2,000,000
Library 5/7/2016 16,045,000 - 779,725 15,265,275
Streets and Drainage 5/7/2016 23,890,000 - 5,857,725 18,032,275
Parks 5/7/2016 27,000,000 - - 27,000,000
Public Art Projects 5/7/2016 1,770,000 - - 1,770,000
Public Safety 5/7/2016 24,445,000 - 5,207,550 19,237,450
$ 107,650,000 $ 12,500,000 $ 11,845,000 $ 83,305,000
Water and Sewer Revenue Bonds
The City is required by the applicable revenue bond indentures to pledge the net revenues of
the Water and Sewer Enterprise Fund for the retirement of its outstanding revenue bonds,
including interest thereon, and is required to maintain debt service funds and bond reserve
funds for all such bonds outstanding.
Funds aggregating $195,485 at September 30, 2017 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, 2017 of $1,282,710 are adequate to meet the reserve requirements.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
57
NOTE 5. LONG-TERM DEBT – CONTINUED
Annual Requirements to Retire Debt Obligations – Continued
Water and Sewer Revenue Bonds – Continued
At September 30, 2017, restricted assets, which include Water and Sewer Revenue Bond Debt
Service and Reserve Funds, were as follows:
Revenue bond reserve fund 889,312$
Revenue bond debt service 393,398
1,282,710$
Net position reserved for Water and Sewer revenue bond retirement is detailed as follows:
Restricted assets, revenue bond debt
Service and reserve funds 1,282,710$
Accrued interest, payable from restricted assets (47,225)
Current maturities of revenue bonds,
payable from restricted assets (1,040,000)
Reserved for revenue bond principal and interest 195,485$
The City is in compliance with the various requirements of the bond ordinances.
Capital Leases
The City has acquired office equipment, a building, and land under various leases accounted
for as capital leases. As of September 30, 2017, the capitalized costs of the governmental
leased property and business-type leased property under capital leases were $1,700,000 and
$649,385, respectively.
The terms of the leases range from 3 - 5 years and call for monthly and annual payments over
the life of the leases. The future minimum lease payments under the capitalized leases and the
net present value of the future minimum lease payments at September 30, 2017 are as follows:
Fiscal Year Ending
September 30 Principal Total Principal Interest Total
2018 450,000$ 450,000$ 93,168$ 2,145$ 95,313$
2019 800,000 800,000 16,288 561 16,849
2020 - - 7,023 78 7,101
Total 1,250,000$ 1,250,000$ 116,479$ 2,784$ 119,263$
Governmental Activities Business-type Activities
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
58
NOTE 5. LONG-TERM DEBT – CONTINUED
Annual Requirements to Retire Debt Obligations – Continued
Operating Leases
The City leases machinery and equipment under non-cancelable operating leases. Total costs
for such leases were $549,375 for the fiscal year ended September 30, 2017. Future minimum
lease payments, by year and in the aggregate, under the non-cancelable lease commitments are
as follows:
Fiscal Year Ending
September 30 Amount
2018 519,319$
2019 381,438
2020 240,526
2021 53,168
Total 1,194,451$
NOTE 6. INTERFUND TRANSFERS
All interfund transfers between the various funds are approved supplements to the operations of those
funds. Individual fund operating transfers for fiscal year 2017 were as follows:
Fund Transfers In Transfers Out
Major Governmental Funds:
General Fund 4,616,064$ 5,819,630$
General Capital Projects 3,700,000 300,359
General Obligation Bonds - 176,000
Total Major Governmental Funds 8,316,064 6,295,989
Nonmajor Governmental Funds:
Grants and Special Revenue 1,489,795 -
Total Nonmajor Governmental
Funds 1,489,795 -
Major Enterprise Funds
Water and Sewer Fund 40,175 4,188,211
Solid Waste Fund - 541,034
Drainage Ut ility Fund - 323,819
Golf Course Fund 402,000 -
Total Major Enterprise Funds 442,175 5,053,064
Internal Service Funds :
Replacement Fund 220,000 201,443
Facility Maintenance Fund 600,000 -
Risk Management Fund 482,462 -
Total Internal Service Funds 1,302,462 201,443
Total Transfers $ 11,550,496 $ 11,550,496
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
59
NOTE 6. INTERFUND TRANSFERS – CONTINUED
Transfers are used to 1) move amounts from funds receiving administrative and operating support to
the appropriate fund incurring the administrative and operating costs and 2) to move unrestricted funds
to finance various programs that the City must account for in other funds in accordance with budgetary
authorizations, including amounts provided as subsidies or matching funds for various grant programs
and to support cash financing of capital projects.
The fund financial statements show:
Governmental funds: Total transfers in of $9,805,859 include funding for capital projects, grant
matching funds, and reimbursement for operating and administrative costs incurred to provide
technology, procurement, human resources, building maintenance, financial and administrative
support. Transfers out totaling $6,295,989 include cash financing of capital projects,
operational support of the Golf Course, support of programs recorded in non-major
governmental funds and internal service funds.
Proprietary funds: Total enterprise funds transfers in of $442,175 mainly represent amounts
transferred into the Golf Course to support operations. The total transfer out of $5,053,064
represents the amount provided by other funds for technology, procurement, human resources,
building maintenance, financial and administrative support. The internal service funds total
transfer in of $1,302,462 represents the amounts needed for repairs of aging facility
infrastructure, and administrative support while the total transfer out of $201,443 represents
the amounts needed in the special revenue fund to replace technology.
NOTE 7. RETIREMENT PLAN
Plan Description
The City participates as one of 866 plans in the nontraditional, joint contributory, hybrid defined benefit
pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency
created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8,
Texas Government Code (the TMRS Act) as an agent multiple-employer retirement system for municipal
employees in the State of Texas. The TMRS Act places the general administration and management of
the System with a six-member Board of Trustees. Although the Governor, with the advice and consent
of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS’s defined
benefit pension plan is a tax-qualified plan under Section 401 (a) of the Internal Revenue Code. TMRS
issues a publicly available comprehensive annual financial report (CAFR) that can be obtained at
www.tmrs.com.
All eligible employees of the city are required to participate in TMRS.
Benefits Provided
TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing
body of the City, within the options available in the state statutes governing TMRS.
At retirement, the benefit is calculated as if the sum of the employee’s contributions, with interest, and the
city-financed monetary credits with interest were used to purchase an annuity. Members may choose to
receive their retirement benefit in one of seven actuarially equivalent payments options. Members may
also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to
12, 24, or 36 monthly payments, which cannot exceed 75% of the member’s deposits and interest.
At the date the plan began, the City granted monetary credits for service rendered before the plan began
of a theoretical amount equal to two times what would have been contributed by the employee, with
interest, prior to establishment of the plan. Monetary credits for service since the plan began are 200%
of the employee's accumulated contributions.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
60
NOTE 7. RETIREMENT PLAN – CONTINUED
Beginning in 1993, the City granted an annually repeating (automatic) basis a monetary credit referred to
as an updated service credit (USC) which is a theoretical amount which takes into account salary
increases or plan improvements. If at any time during their career an employee earns a USC, this amount
remains in their account earning interest at 5% until retirement. At retirement, the benefit is calculated as
if the sum of the employee's accumulated contributions with interest and the employer match plus
employer-financed monetary credits, such as USC, with interest were used to purchase an annuity.
Additionally, initiated in 1993, the City provided on an annually repeating (automatic) basis cost of living
adjustments (COLA) for retirees equal to a percentage of the change in the consumer price index (CPI).
A summary of plan provisions for the City are as follows:
Employee deposit rate 7%
Matching ratio (City to employee) 2 to 1
Years required for vesting 5
Service retirement eligibility 20 years at any age, 5 years
at age 60 and above
Updated Service Credit 100% Repeating
Annuity Increase to retirees 70% of CPI Repeating
The City also participates in Social Security.
Employees covered by benefit terms:
At the December 31, 2016 valuation and measurement date, the following employees were covered by
the benefit terms:
Inactive employees or beneficiaries currently receiving benefit s184
Inactive employees entitled to, but not yet receiving benefits 393
Active employees 718
Total 1,295
Contributions
The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and
the city matching percentages are either 100%, 150%, or 200%, both as adopted by the governing body
of the city. Under the state law governing TMRS, the contribution rate for each city is determined annually
by the consulting actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially
determined rate is the estimated amount necessary to finance the cost of benefits earned by employees
during the year, with an additional amount to finance any unfunded accrued liability.
Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal
year. The contribution rates for the City were 13.71% and 13.94% in calendar years 2016 and 2017,
respectively. The City’s contributions to TMRS for the year ended September 30, 2017 were $6,545,488,
and were in excess of the required contribution.
Net Pension Liability
The City’s Net Pension Liability (NPL) was measured as of December 31, 2016, and the Total Pension
Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of
that date.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
61
NOTE 7. RETIREMENT PLAN – CONTINUED
Actuarial assumptions:
The Total Pension Liability in the December 31, 2016 actuarial valuation was determined using the
following actuarial assumptions:
Inflation 2.5% per year
Overall payroll growth 3.0% per year
Investment Rate of Return 6.75%, net of pension plan investment expense, including inflation
Salary increases were based on a service-related table. Mortality rates for active members, retirees, and
beneficiaries were based on the gender-distinct RP2000 Combined Healthy Mortality Tables with Blue
Collar Adjustment, with male rates multiplied by 109% and female rates multiplied by 103%. The rates
are projected on a fully generational basis by scale BB to account for future mortality improvements. For
disabled annuitants, the gender-distinct RP2000 Disabled Retiree Mortality Tables with Blue Collar
Adjustment are used with males rates multiplied by 109% and female rates multiplied by 103% with a 3
year set-forward for both males and females. In addition a 3% minimum mortality rate is applied to reflect
the impairment for younger members who become disabled. The rates are projected on a fully
generational basis by scale BB to account for future mortality improvements subject to the 3% floor.
Actuarial assumptions used in the December 31, 2016, valuation were based on the results of actuarial
experience studies. The experience study in TMRS was for the period December 31, 2010 through
December 31, 2014. Healthy post-retirement mortality rates and annuity purchase rates were updated
based on a Mortality Experience Investigation Study covering 2009 through 2011, and dated December
31, 2013. These assumptions were first used in the December 31, 2013 valuation, along with a change
to the Entry Age Normal (EAN) actuarial cost method. Assumptions are reviewed annually. No additional
changes were made for the 2014 valuation. After the Asset Allocation Study analysis and experience
investigation study, the Board amended the long-term expected rate of return on pension plan
investments from 7% to 6.75%. Plan assets are managed on a total return basis with an emphasis on
both capital appreciation as well as the production of income, in order to satisfy the short-term and long-
term funding needs of TMRS.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best estimate ranges of expected future real rates of return (expected returns, net of
pension plan investment expense and inflation) are developed for each major asset class. These ranges
are combined to produce the long-term expected rate of return by weighting the expected future real rates
of return by the target asset allocation percentage and by adding expected inflation. In determining their
best estimate of a recommended investment return assumption under the various alternative asset
allocation portfolios, GRS focused on the area between (1) arithmetic mean (aggressive) without an
adjustment for time (conservative) and (2) the geometric mean (conservative) with an adjustment for time
(aggressive). At its meeting on July 30, 2015, the TMRS Board approved a new portfolio target allocation.
The target allocation and best estimates of real rates of return for each major asset class are summarized
in the following table:
Asset Class
Target
Allocation
Long-Term Expected
Real Rate of Return
(Arithmetic)
Domestic Equity 17.5% 4.55%
International Equity 17.5% 6.35%
Core Fixed Income 10.0% 1.00%
Non-Core Fixed Income 20.0% 4.15%
Real Return 10.0% 4.15%
Real Estate 10.0% 4.75%
Absolute Return 10.0% 4.00%
Private Equity 5.0% 7.75%
Total 100.0%
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
62
NOTE 7. RETIREMENT PLAN – CONTINUED
Discount Rate
The discount rate used to measure the Total Pension Liability was 6.75%. The projection of cash flows
used to determine the discount rate assumed that employee and employer contributions will be made at
the rates specified in statute. Based on that assumption, the pension plan’s Fiduciary Net Position was
projected to be available to make all projected future benefit payments of current active and inactive
employees. Therefore, the long-term expected rate of return on pension plan investments was applied to
all periods of projected benefit payments to determine the Total Pension Liability.
Changes in the Net Pension Liability
Total Pension
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net Pension
Liability
(a) - (b)
Balance at 12/31/2015 163,489,526$ 133,669,673$ 29,819,853$
Changes for the year:
Service cost 7,740,829 - 7,740,829
Interest 11,165,087 - 11,165,087
Change of benefit terms - - -
Difference between expected -
and actual experience 894,580 - 894,580
Changes of assumptions - - -
Contributions - employer - 6,473,617 (6,473,617)
Contributions - employee - 3,129,050 (3,129,050)
Net investment income - 9,039,319 (9,039,319)
Benefit payments, including -
refunds of employee contributions (3,902,489) (3,902,489) -
Administrative expense - (102,024) 102,024
Other changes - (5,497) 5,497
Net changes 15,898,007 14,631,976 1,266,031
Balance at 12/31/2016 179,387,533$ 148,301,649$ 31,085,884$
Increase (Decrease)
Sensitivity of the net pension liability to changes in the discount rate
The following presents the net pension liability of the City, calculated using the discount rate of 6.75%, as
well as what the City’s net pension liability would be if it were calculated using a discount rate that is
1-percentage-point lower (5.75%) or 1-percentage-point higher (7.75%) than the current rate:
1% Decrease in
Discount Rate
(5.75%)
Discount Rate
(6.75%)
1% Increase in
Discount Rate
(7.75%)
City’s net pension liability 61,058,424$ 31,085,884$ 6,917,798$
Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s Fiduciary Net Position is available in a separately-issued
TMRS financial report. That report may be obtained on the Internet at www.tmrs.com.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
63
NOTE 7. RETIREMENT PLAN – CONTINUED
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to Pensions
For the year ended September 30, 2017, the City recognized pension expense of $8,326,975.
At September 30, 2017, the City reported deferred outflows and inflows of resources related to pensions
from the following sources:
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Differences between expected
and actual experience 858,908$ (892,932)$
Changes in actuarial assumptions - (150,422)
Difference between projected and
actual investment earnings 5,833,747 -
Contributions subsequent to the
measurement date 5,027,373 -
Total 11,720,028$ (1,043,354)$
Deferred outflows of resources related to pensions resulting from contributions subsequent to the
measurement date of $5,027,373 will be recognized as a reduction of the net pension liability for the
measurement year ending December 31, 2017 (i.e. recognized in the city’s financial statements
September 30, 2018). Other amounts reported as deferred outflows and inflows of resources related to
pensions will be recognized in pension expense as follows:
Measurement
year ended
December 31:
2017 1,901,907$
2018 1,901,907
2019 1,610,350
2020 155,292
2021 79,845
Total 5,649,301$
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
64
NOTE 8. 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, 2017, the cost of water purchased
under this contract was $15,208,356.
In 1978, the City entered into a contract with the District for the transportation, treatment and disposal
of sanitary sewage and other waste. The contract will continue in force at least until all bonds issued
by the District pursuant to the contract have been paid in full and will remain in force thereafter
throughout the useful life of the District’s sanitary sewer system. The contract requires the City to pay
varying amounts based on the costs associated with sewage transported and/or treated and disposed
of. The cost includes the City’s proportionate share of the District’s operating and maintenance
expenses and related debt service costs. During fiscal year 2017, the cost for transportation, treatment
and disposal of sewage and other wastes was $8,588,065.
NOTE 9. DEFERRED COMPENSATION PLAN
As a result of legislative changes, all amounts of compensation deferred, all property and rights
purchased, and all income, property or rights are (until paid or made available to the employee or other
beneficiary) held in trust for the exclusive benefit of the participants and their beneficiaries, whereas,
prior to these legislative changes, these amounts were solely the property and rights of the City subject
only to the claims of the City’s general creditors. As a result at September 30, 2017, the deferred
compensation investments are not reported in the City’s financial statements.
NOTE 10. RISK MANAGEMENT
Health and Dental Insurance
The City provides health and dental insurance benefits to City employees under a modified self-
insurance plan. Under the plan, the City and the employee pay a portion of a predetermined
monthly premium, which is based on the estimated claims cost for the plan and the extent of
medical coverage selected by the employee. To cover annual costs, premium payments are
reported as operating revenues of the Risk Management Fund and operating
expenditures/expenses of the participating funds.
A commercial insurance carrier is utilized to adjudicate and pay medical claims on behalf of the
City. The City’s medical claims liability is limited by a stop loss insurance policy covering an
individual’s medical claims in excess of $125,000 per plan year. Aggregate stop loss coverage of
$2,000,000 per plan year provides protection to limit claim liability for the plan as a whole. The
liabilities for insurance claims reported are based on GASB No. 10, Accounting and Financial
Reporting for Risk Financing and Related Insurance Issues, which requires that a liability for claims
be reported if information prior to the issuance of the financial statements indicates that it is
probable that a liability has been incurred at the date of the financial statements and the amount of
the loss can be reasonably estimated.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
65
NOTE 10. RISK MANAGEMENT – CONTINUED
Health and Dental Insurance – Continued
These liabilities include an estimate for incurred but not reported claims. The estimated amount at
September 30, 2017 was $1,160,834. Changes in the Risk Management liability during the past
five fiscal years were as follows:
Balance at Current Year Claims Balance at
Year Ending Beginning of and Changes in Claim End of
September 30, Fiscal Year Estimates Payments Fiscal Year
2013 831,982 5,691,732 5,711,304 812,410
2014 812,410 7,054,662 6,931,808 935,264
2015 935,264 7,393,719 7,345,549 983,434
2016 983,434 8,076,640 7,986,738 1,073,336
2017 1,073,336 8,599,895 8,512,397 1,160,834
Workers Compensation, Property and Liability Insurance
The City participates in the Texas Municipal League Intergovernmental Risk Pool (TMLIRP) for
workers’ compensation claims, liability (general, automobile, law enforcement, and
errors/omissions), and property insurance. The cost is based on the pool’s claims cost, which is
adjusted to reflect the City’s individual claims experience. As claims arise they are submitted to
and paid by TMLIRP. To cover annual costs, premium payments are reported as operating
revenues of the Risk Management Fund and operating expenditures/expenses of the participating
funds.
The City has a workers’ compensation deductible of $25,000 per occurrence, with an annual
aggregate deductible of $282,222. During 2017, the City contributed $494,899 to the Risk
Management Fund for workers’ compensation.
The City has various levels of insurance deductibles for property, liability, and automobile insurance
with the maximum deductible set at $10,000. All insured claims are paid by TMLIRP, less the
appropriate deductible. During 2017, the City contributed $651,171 for property and general
liability.
NOTE 11. OTHER POSTEMPLOYMENT BENEFITS (OPEB)
Program Description
In addition to the pension benefits described in Note 7, as required by state law the City makes
health care benefits available to all retired employees through a single-employer defined benefit
medical plan. Retirees must make a one-time irrevocable decision to continue benefits at the time
of retirement, after that their eligibility for this benefit ends. The retiree benefit consists of medical,
dental and vision care until age 65.
Due to the significant increase in retiree premium costs, the City elected to create a separate plan
for retirees effective January 1, 2013. Employees who retired on or before December 31, 2012,
were “grandfathered” and allowed to pay blended medical premium rates the same as COBRA
participants which are the total cost of premiums (no City subsidy) plus 2% administration fees.
They will also be subject to the same rate increases as COBRA participants. Retirees retiring on
or after January 1, 2013, can elect health care coverage but will be required to pay the (higher)
unblended rate.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
66
NOTE 11. OTHER POSTEMPLOYMENT BENEFITS (OPEB) – CONTINUED
Program Description – Continued
Current OPEB benefits are made on a pay-as-you-go basis from the Risk Management Fund. In
2017, retirees paid $97,887 in the form of premiums and incurred $192,288 in expenses.
Funding Policy
In October 2016, an actuarial study update was completed. This study estimated the actuarial
accrued liability increased from $970,603 to $973,603 and that the annual required contribution
(ARC) decreased to ($46,432). Employees retiring on or after January 1, 2013 can elect health
care coverage but will be required to pay a higher, unblended rate. In March 2011, the City
established a Section 115 Trust (the Trust) to comply with the requirements of Governmental
Accounting Standards Board Statement No. 45, Accounting and Financial Reporting by Employers
for Postemployment Benefits other than Pensions (OPEB), for the purpose of funding and providing
certain benefits to its eligible retirees and dependents. The single-employer defined benefit plan is
created by City ordinance and appoints the City Manager as Plan Administrator for the program.
The trust was established with Public Agency Retirement Services Company (PARS). Prior to
establishment of the trust, the ARC was contributed to the Risk Management Fund where all
medical costs are incurred. Net position of $3,892,752 available in the Risk Management Fund
exceeds the $973,603 actuarial accrued liability, therefore, OPEB costs will continue to be covered
by the Risk Management Fund until the funded ratio of the trust is more positive. The City has
budgeted for annual actuarial study updates to determine if funding requirements need to be
changed.
Annual OPEB costs and Net OPEB Obligation
The City’s annual other postemployment benefit (OPEB) cost is calculated based on the annual
required contribution of the City (ARC), an amount actuarially determined in accordance with the
parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an
ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial
liabilities (or funding excess) over a period not to exceed thirty years. Calculations are based on
the OPEB benefits provided under the terms of the substantive plan in effect at the time of each
valuation and on the pattern of sharing costs between the employer and plan members to that point.
Annual required contribution (ARC) (46,432)$
Interest on net OPEB obligation (28,634)
Adjustment to the ARC 37,254
Annual OPEB cost (37,812)
Contributions made (113,254)
Increase in OPEB obligation (asset) (151,066)
Net OPEB obligation (asset), beginning of the year (572,683)
Net OPEB obligation (asset), end of the year (723,749)$
The components of the net liability of the City as of September 30, 2017, were as follows:
Total OPEB Liability 973,603$
Plan fiduciary net position 1,687,383
City's net OPEB liability (713,780)$
Plan fiduciary net position as a percentage of the total OPEB liability 173.31%
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
67
NOTE 11. OTHER POSTEMPLOYMENT BENEFITS (OPEB) – CONTINUED
Annual OPEB costs and NET OPEB Obligation – Continued
Three-Year Trend Information:
Annual Actual Percentage Net
Fiscal OPEB Contribution of OPEB OPEB
Year Cost Made Contributed Asset
2015 $ (23,949) $ 217,540 908% $ (356,773)
2016 $ (20,314) $ 195,596 963% $ (572,683)
2017 $ (37,812) $ 113,254 300% $ (723,749)
Actuarial valuations for the OPEB plan involve estimates of the value of reported amounts and
assumptions about the probability of events far into the future. Actuarially determined amounts are
subject to continual revision as results are compared to past expectations and new estimates are
made about the future. Actuarial calculations of the OPEB plan reflect a long-term perspective.
Significant methods and assumptions used for this were:
Investment return 8.99%
Discount Rate 5.00%
Amortization Method/Period level dollar, open, 30 years
Health Care Cost Trend Rate Avg. 6.15% Yrs. 1-10, 71.6% Yrs. 11-20, 51.4%
Retirement Rates Ages 50-55-2%, 56-60-5%, 60-64-15%, 65+ 100%
Retiree/Spouse Participation Rate 20%/20%
Mortality RP 2014h
Actuarial Value of Assets Market value on valuation date
Actuarial Cost Method Entry age normal
Inflation Rate 2.5%
Schedule of Funding Information
Actuarial valuation date 10/1/16
Actuarial value of assets $1,687,383
Actuarial Accrued Liability (AAL) $973,603
Funded Ratio 173.31%
Unfunded Actuarial Accrued Liability (UAAL) ($713,780)
Annual covered payroll $39,664,039
UAAL as % of covered payroll (1.8%)
The schedule of funding progress, presented as required supplementary information following the
notes to the financial statements, presents multiyear trend information about whether the actuarial
value of plan assets held in an irrevocable trust is increasing or decreasing over time relative to the
actuarial accrued liabilities for benefits.
Sensitivity of the Net OPEB Obligation to changes in the discount rate or healthcare trend
Impact of a 1% change in the discount rate or healthcare trend assumption:
:
Trend Assumption 4.00% 5.00% 6.00%
Trend -1% $968,054
Baseline $979,247 $973,603 $968,054
Trend +1% $979,247
Discount Rate
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
68
NOTE 11. OTHER POSTEMPLOYMENT BENEFITS (OPEB) – CONTINUED
Annual OPEB costs and NET OPEB Obligation – Continued
Supplemental Death Benefits Plan:
Program Description
The City also participates in the cost sharing multiple-employer defined benefit group-term life
insurance plan operated by the Texas Municipal Retirement System (TMRS) known as the
Supplemental Death Benefits Fund (SDBF). The City elected, by ordinance, to provide group-
term life insurance coverage to both current and retired employees. The City may terminate
coverage under and discontinue participation in the SDBF by adopting an ordinance before
November 1 of any year to be effective the following January 1.
The death benefit for active employees provides a lump-sum payment approximately equal to
the employee’s annual salary (calculated based on the employee’s actual earnings, for the 12-
month period preceding the month of death). Retired employees are insured for $7,500 and
this coverage is reported as an “other postemployment benefit” or (OPEB).
Contributions and Funding Policy
The City contributes to the SDBF at a contractually required rate as determined by an annual
actuarial valuation. The rate is equal to the cost of providing one-year term life insurance. The
funding policy for the SDBF program is to assure that adequate resources are available to meet
all death benefit payments for the upcoming year; the intent is not to pre-fund retiree term life
insurance during employee’s entire careers.
The City’s contributions to the TMRS SDBF for retiree’s for the years ended 2017, 2016, and
2015 were $64,347, $60,990, and $56,423, respectively, which equals the required
contributions (ARC) each year.
NOTE 12. TAX ABATEMENTS AND ECONOMIC INCENTIVES
The City enters into economic development agreements designed to promote development and
redevelopment within the City, spur economic improvement, stimulate commercial activity, generate
additional sales tax and enhance the property tax base and economic vitality of the City. These
programs abate or rebate property taxes and sales tax, and also include incentive payments and
rebates of fees that are not tied to taxes. The City’s economic development agreements are authorized
under Chapter 380 of the Texas Local Government Code and Chapter 311 (Tax Increment Financing
Act) and 312 (Property Redevelopment and Tax Abatement Act) of the Texas Tax Code. Recipients
may be eligible to receive economic assistance based on the employment impact, economic impact or
community impact of the project requesting assistance. Recipients receiving assistance generally
commit to building or remodeling real property and related infrastructure, demolishing and redeveloping
outdated properties, expanding operations, renewing facility leases, or bringing targeted businesses to
the City. Agreements generally contain recapture provisions which may require repayment or
termination if recipients do not meet the required provisions of the economic incentives.
The City has three categories of economic development agreements:
Tax Abatements Tax Abatements under Chapter 312 of the Texas Tax Code allow the City to
designate tax reinvestment zones and negotiate tax abatement agreements with applicants. These
abatement agreements authorize the appraisal districts to reduce the assessed value of the taxpayer’s
property by a percentage specified in the agreement, and the taxpayer will pay taxes on the lower
assessed value during the term of the agreement. Property taxes abated under this program were
$64,807 in fiscal year 2017.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
69
NOTE 12. TAX ABATEMENTS AND ECONOMIC INCENTIVES – CONTINUED
General Economic Development The City, Allen Economic Development Corporation, and Allen
Community Development Corporation enter into various agreements under Chapter 380 of the Texas
Local Government Code to stimulate economic development. Agreements may rebate a flat amount
or percentage of property taxes or sales tax received, may result in fee reductions or rebates, or make
lump sum payments to offset moving expenses, tenant finish-outs, demolition costs, infrastructure
reimbursements, redevelopment costs or other expenses. For fiscal year 2017, the City rebated
$3,866,529 in taxes and rebated fees of $352,640 under these agreements. Additionally, for fiscal year
2017, the Allen Economic Development Corporation rebated taxes in the amount of $192,034 and
made incentive payments of $10,369,734 while the Allen Community Development Corporation rebated
taxes in the amount of $192,034 and made incentive payments of $296,390. In fiscal year 2017, the
Allen Economic Development Corporation sold two tracts of land to developers.
Tax Increment Financing The City has adopted two Tax Increment Financing zones (TIFs) under
Chapter 311 of the Texas Tax Code. The City enters into economic development and infrastructure
reimbursement agreements which earmark TIF revenues for payment to developers and represent
obligations over the life of the TIF or until all terms of the agreements have been met. Additionally, the
City may enter into general economic development agreements under Chapter 380 of the Texas Local
Government Code which are funded with TIF resources. The City made $793,621 in payments for TIF
obligations in fiscal year 2017.
NOTE 13. COMMITMENTS AND CONTINGENT LIABILITIES
Federal Grants The City participates in a number of State and Federal assisted grant programs.
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor
agencies, principally the Federal Government. Any disallowed claims, including amounts already
collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which
may be disallowed by the grantor cannot be determined at this time although the City expects such
amounts, if any, to be immaterial.
Litigation The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not
presently determinable, it is the opinion of the City’s counsel that resolution of these matters will not
have a material adverse effect on the financial condition of the City.
Economic Development Grant The City has several economic development agreements whereby it
has agreed to pay a grant(s) to a developer and/or business in return for the design, construction,
operating and/or managing of the business within the City of Allen. All grants are performance based
and do not constitute a liability on the City’s financial records.
CITY OF ALLEN, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2017
70
NOTE 14. RESTATEMENT OF BEGINNING NET POSITION AND FUND BALANCE
In 2017, the City restated the beginning net position of the governmental and business-type activities
as well as component units; the beginning net position of the Drainage, Solid Waste, and Community
Development Corporation Funds; and the beginning fund balance of the General Fund. Acquisition of
component unit and Community Development Corporation capital assets had previously been applied
to governmental activities in error. Reclassifying the capital assets acquired by the Community
Development Corporation as capital assets within that fund and the component units rather than
governmental activities resulted in an increase in the beginning net position of the component units and
Community Development Corporation of $52,621,830 and a corresponding decrease in the same
amount to governmental activities net position. Additionally, services billed by the Solid Waste and
Drainage Funds after October 1st that were for billing periods that occurred in the prior fiscal year were
not previously accrued and recognized as revenue and accounts receivable. The correction of this
error resulted in a $556,638 and $152,791 increase in the beginning net position of the Solid Waste
and Drainage Funds, respectively and a $709,429 increase in the beginning net position of business-
type activities. Finally, in prior years the City had recognized cash collected related to charges for
services not yet performed as revenue. The correction of this error resulted in a decrease in beginning
net position of governmental activities and beginning fund balance of the General Fund in the amount
of $279,048.
The governmental and business-type activities as well as component unit net position has been
restated on the government-wide financial statements as follows:
GOVERNMENTAL BUSINESS-TYPE COMPONENT
ACTIVITIES ACTIVITIES UNITS
Net position, October 1, 2016, as previously stated 464,488,906$ 139,274,235$ (7,460,945)$
Capital asset reclassification (52,621,830) - 52,621,830
To correct revenue recognition error (279,048) - -
To correct revenue accrual error - 709,429 -
Net position, October 1, 2016, as restated 411,588,028$ 139,983,664$ 45,160,885$
The Solid Waste, Drainage and Community Development Corporation Funds net position has been
restated on the fund financial statements as follows:
COMMUNITY
SOLID WASTE DRAINAGE DEVELOPMENT
FUND FUND CORPORATION
Net position, October 1, 2016, as previously stated 2,982,411$ 1,049,362$ (19,289,506)$
Capital asset reclassification - - 52,621,830
To correct revenue accrual error 556,638 152,791 -
Net position, October 1, 2016, as restated 3,539,049$ 1,202,153$ 33,332,324$
The fund balance of the General Fund has been restated on the fund financial statements as follows:
GENERAL
FUND
Fund Balance, October 1, 2016, as previously stated 22,101,028$
To correct revenue recognition error (279,048)
Fund Balance, October 1, 2016, as restated 21,821,980$
REQUIRED SUPPLEMENTARY
INFORMATION
CITY OF ALLEN, TEXAS EXHIBIT A-1
SCHEDULE OF OPEB FUNDING PROGRESS AND CONTRIBUTIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
71
Required Supplementary Information
Schedule of Other Postemployment Benefits
Funding Progress and Contributions
Last Three Valuation Years (unaudited)
Actuarial
Valuation
Date
Fiscal Year Value of Assets AAL* UAAL** Funded Ratio Covered Payroll
UAAL as a
% of
Covered
Payroll
10/1/2014 2015 1,365,426 970,603 (394,823) 140.7% 40,214,969 -1.0%
10/1/2014 2016 1,365,426 970,603 (394,823) 140.7% 41,371,001 -1.0%
10/1/2016 2017 1,687,383 973,603 (713,780) 173.3% 39,664,039 -1.8%
*Actuarial Accrued Liability
**Unfunded Actuarial Accrued Liability
CITY OF ALLEN, TEXAS EXHIBIT A-2
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - TMRS
FOR THE MEASUREMENT YEAR ENDED DECEMBER 31, 2016
72
2014* 2015* 2016*
Total pension liability
Service cost 6,407,942$ 7,377,440$ 7,740,829$
Interest (on the total pension liability) 9,749,386 10,562,818 11,165,087
Changes in benefit terms - - -
Difference in expected and actual experience (1,791,341) 196,259 894,580
Change in assumptions - (231,950) -
Benefit payments, including refunds of employee contributions (3,213,118) (3,247,435) (3,902,489)
Net change in total pension liability 11,152,869 14,657,132 15,898,007
Total pension liability, beginning of year 137,679,525 148,832,394 163,489,526
Total pension liability, ending of year 148,832,394$ 163,489,526$ 179,387,533$
Plan fiduciary net position
Contributions -employer 5,455,902$ 6,063,051$ 6,473,617$
Contributions -employee 2,754,779 3,021,766 3,129,050
Net investment income 6,648,346 188,559 9,039,319
Benefit payments, including refunds of employee contributions (3,213,118) (3,247,435) (3,902,489)
Administrative expense (69,397) (114,830) (102,024)
Other (5,706) (5,671) (5,497)
Net change in plan fiduciary net position 11,570,806 5,905,440 14,631,976
Plan fiduciary net position - beginning 116,193,427 127,764,233 133,669,673
Plan fiduciary net position - ending 127,764,233$ 133,669,673$ 148,301,649$
Net pension liability - ending 21,068,161$ 29,819,853$ 31,085,884$
Plan fiduciary net position as a % of total pension liability 85.84% 81.76% 82.67%
Covered employee payroll 39,335,988$ 43,142,910$ 44,410,952$
Net pension liability as a % of covered employee payroll 53.56% 69.12% 70.00%
* The schedule is intended to show information for 10 years. Additional years
will be displayed as they become available.
CITY OF ALLEN, TEXAS EXHIBIT A-3
SCHEDULE OF CONTRIBUTIONS - TMRS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
73
2015* 2016* 2017*
Actuarially determined contributions 5,785,220$ 6,028,939$ 6,217,858$
Actual contributions (5,797,651) (6,181,797) (6,545,488)
Contributions deficiency (excess) (12,431)$ (152,858)$ (327,630)$
City covered employee payroll 40,985,314$ 43,564,466$ 45,962,313$
Ratio of actual contributions to covered payroll amount 14.15% 14.19% 14.24%
* The schedule is intended to show information for 10 years. Additional years
will be displayed as they become available.
Notes to Schedule
Valuation Date
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method Entry Age Normal
Amortization Method Level Percentage of Payroll, Closed
Remaining Amortization Period 29 years
Asset Valuation Method 10 year smoothed market; 15% soft corridor
Inflation 2.50%
Salary Increases 3.50% to 10.5% including inflation
Investment Rate of Return 6.75%
Retirement Age
Mortality
There were no benefit changes during the year.
Actuarial determined contribution rates are calculated as of December
31st each year and become effective in January, 13 months later.
Experience-based table of rates that are specific to the City's plan of
benefits. Last updated for the 2015 valuation pursuant to an
experience study of the period 2010 - 2014
RP2000 Combined Mortality Table with Blue Collar Adjustment with
male rates multiplied by 109% and female rates multiplied by 103%
and projected on a fully generational basis with scale BB
CITY OF ALLEN, TEXAS EXHIBIT A-4
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2017
74
VARIANCE WITH
FINAL BUDGET -
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
REVENUES
Ad valorem taxes, penalties and interest 44,137,050$ 44,243,895$ 44,250,012$ 6,117$
Municipal sales tax 19,130,032 19,420,971 18,990,970 (430,001)
Franchise taxes 7,221,523 7,116,697 7,350,059 233,362
Licenses, permits and fees 2,698,645 3,480,600 3,605,214 124,614
Charge for services 12,309,661 12,448,639 10,932,890 (1,515,749)
Fines 1,774,749 1,594,749 1,694,998 100,249
Gifts and contributions 771,552 789,652 712,437 (77,215)
Intergovernmental 111,826 111,826 126,008 14,182
Investment earnings 194,400 253,000 270,522 17,522
Miscellaneous 1,598,670 1,659,350 1,659,790 440
Total revenues 89,948,108 91,119,379 89,592,900 (1,526,479)
EXPENDITURES
Current:
General government 26,324,114 28,782,368 24,801,363 (3,981,005)
Public safety 35,019,165 34,760,430 34,793,934 33,504
Public works 4,005,372 3,905,992 3,592,912 (313,080)
Culture and recreation 24,662,617 24,979,046 22,140,763 (2,838,283)
Community development 2,672,674 2,744,970 2,530,910 (214,060)
Capital Outlay 447,662 587,662 496,502 (91,160)
Total expenditures 93,131,604 95,760,468 88,356,384 (7,404,084)
Excess (deficiency) of revenues
over (under) expenditures (3,183,496) (4,641,089) 1,236,516 5,877,605
OTHER FINANCING SOURCES (USES)
Transfers in 4,586,821 4,616,064 4,616,064 -
Transfers out (2,341,770) (2,319,630) (5,819,630) (3,500,000)
Sale of capital assets 15,000 11,965 14,866 2,901
Total other financing sources (uses)2,260,051 2,308,399 (1,188,700) (3,497,099)
NET CHANGE IN FUND BALANCE (923,445) (2,332,690) 47,816 2,380,506
FUND BALANCES, BEGINNING OF YEAR AS RESTATED 21,821,980 21,821,980 21,821,980 -
FUND BALANCES, END OF YEAR 20,898,535$ 19,489,290$ 21,869,796$ 2,380,506$
BUDGETED AMOUNTS
CITY OF ALLEN, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
YEAR ENDED SEPTEMBER 30, 2017
75
BUDGETARY INFORMATION
The City Council adheres to the following procedures in establishing the budgets reflected in the
financial statements:
1. Each year the City Manager is required to submit to the City Council a proposed budget for the
fiscal year beginning on the following October 1. The operating budget includes proposed
expenditures and the means of financing them.
2. Public hearings are conducted to obtain taxpayers' comments.
3. Prior to October 1, the budget is legally enacted by the City Council through passage of an
ordinance.
4. Annual budgets are legally adopted for the General Fund and Debt Service Fund on a basis
consistent with accounting principles generally accepted in the United States of America.
Formal budgetary integration is not employed for proprietary funds. However, the City does
adopt an annual budget for those funds for managerial control.
5. The City Manager is authorized to adjust budgeted amounts; however, such revisions may not
result in total expenditures (appropriations) in excess of budgeted expenditures without
approval of the City Council. Therefore, the legal level of budgetary control is the combined
total budgeted expenditures for all fund types.
6. Formal budgetary integration is not employed for Special Revenue Funds, Proprietary Funds
or Capital Projects Funds. However, the City does adopt an annual budget for those funds for
managerial control.
7. Budgetary data for the Special Revenue Funds and Capital Projects Funds has not been
presented in the accompanying basic financial statements as such funds are budgeted over
the life of the respective grant or project and not on an annual basis. Budgetary information
for the Proprietary Funds has not been presented since reporting on such budgets is not legally
required.
The Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual —
General Fund presents a comparison of budgetary data to actual results. The General Fund utilizes
the same basis of accounting for both budgetary purposes and actual results.
COMBINING AND BUDGETARY
COMPARISON SCHEDULES
76
MAJOR GOVERNMENTAL FUNDS
DEBT SERVICE FUND
The Debt Service Fund is used to account for the accumulation of resources for and the payment of general
obligation bonds, certificate of obligation bonds, and interest from governmental resources.
CITY OF ALLEN, TEXAS EXHIBIT B-1
BUDGETARY COMPARISON SCHEDULE
DEBT SERVICE FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2017
77
VARIANCE
WITH FINAL
BUDGET
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
REVENUES
Ad valorem taxes 13,783,108$ 13,827,543$ 13,819,888$ (7,655)$
Investment earnings 43,800 65,000 91,656 26,656
Total revenues 13,826,908 13,892,543 13,911,544 19,001
EXPENDITURES
Principal retirement 10,448,930 10,448,930 10,445,000 (3,930)
Interest and fiscal charges 3,484,335 3,484,335 3,378,943 (105,392)
Total expenditures 13,933,265 13,933,265 13,823,943 (109,322)
NET CHANGE IN FUND BALANCES (106,357) (40,722) 87,601 128,323
FUND BALANCE, BEGINNING OF YEAR 1,254,401 1,254,401 1,254,401 -
FUND BALANCE, END OF YEAR 1,148,044$ 1,213,679$ 1,342,002$ 128,323$
BUDGETED AMOUNTS
78
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Hotel Occupancy Tax Fund – To account for funds received from hotel occupancy tax and expend as
allowed by state law.
Asset Forfeiture Fund –- To account for activities associated with assets legally seized and forfeited.
Grants Fund – To account for monies received from other governmental agencies that have restricted
legal requirements and multi-year budgets.
Special Revenue Fund – To account for monies that have external legal restrictions associated with
their use.
Park Dedication Fund – To account for funds received and expended for the acquisition of additional
park land and for the development of neighborhood parks.
Tax Increment Financing Fund – To account for the tracking of property tax and sales tax revenue
and associated expenses for the City’s Tax Increment Financing agreements.
CITY OF ALLEN, TEXAS EXHIBIT B-2
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2017
79
TOTAL
HOTEL TAX NON-MAJOR
OCCUPANCY ASSET SPECIAL PARK INCREMENT GOVERNMENTAL
TAX FORFEITURE GRANTS REVENUE DEDICATION FINANCING FUNDS
ASSETS
Cash and cash equivalents 1,349,659$ 68,740$ 165,215$ 131,141$ 755,580$ 789,372$ 3,259,707$
Investments 3,440,517 141,031 1,611 979,409 1,342,042 1,985,627 7,890,237
Accounts receivable 130,584 - 158,451 47,938 - 89,250 426,223
Accrued interest 8,574 476 227 2,456 3,742 4,806 20,281
TOTAL ASSETS 4,929,334$ 210,247$ 325,504$ 1,160,944$ 2,101,364$ 2,869,055$ 11,596,448$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
LIABILITIES
Accounts payable 13,267$ -$ 34,627$ 13,438$ 5,784$ -$ 67,116$
Accrued liabilities 11,163 41,905 903 4,701 - - 58,672
Retainage payable - - 10,000 - 5,750 - 15,750
TOTAL LIABILITIES 24,430 41,905 45,530 18,139 11,534 - 141,538
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - interest 3,966 220 105 1,136 1,731 2,223 9,381
Unavailable revenue - grants 5,041 - - 5,041
TOTAL DEFERRED INFLOWS OF RESOURCES 3,966 220 5,146 1,136 1,731 2,223 14,422
FUND BALANCES
Restricted
Tourism 4,900,938 - - - - - 4,900,938
Asset forfeiture - 168,122 - - - - 168,122
State and federal grants - - 274,828 - - - 274,828
Park acquisition and development - - - - 2,088,099 - 2,088,099
Tax increment financing agreement - - - - - 2,866,832 2,866,832
Court technology - - - 111,764 - - 111,764
Juvenile case manager - - - 12,827 - - 12,827
PEG fees - - - 937,665 - - 937,665
Radio system - - - 48,946 - - 48,946
Photo red light enforcement - - - 26,006 - - 26,006
Court security - - - 4,461 - - 4,461
TOTAL FUND BALANCES 4,900,938 168,122 274,828 1,141,669 2,088,099 2,866,832 11,440,488
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES 4,929,334$ 210,247$ 325,504$ 1,160,944$ 2,101,364$ 2,869,055$ 11,596,448$
SPECIAL REVENUE
CITY OF ALLEN EXHIBIT B-3
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
80
TOTAL
HOTEL TAX NON-MAJOR
OCCUPANCY ASSET SPECIAL PARK INCREMENT GOVERNMENTAL
TAX FORFEITURE GRANTS REVENUE DEDICATION FINANCING FUNDS
REVENUES
Ad valorem taxes, penalties and interest -$ -$ -$ -$ -$ 806,036$ 806,036$
Franchise taxes - - - 202,954 - - 202,954
Municipal sales tax - - - - - 459,118 459,118
Licenses, permits, and fees - - - - 845,425 - 845,425
Fines - - - 156,737 - - 156,737
Hotel / motel taxes 1,547,244 - - - - - 1,547,244
Intergovernmental - - 899,219 - - 127,912 1,027,131
Investment earnings 30,879 1,771 1,288 8,974 11,184 17,660 71,756
Miscellaneous - 185,109 - - - - 185,109
Total revenues 1,578,123 186,880 900,507 368,665 856,609 1,410,726 5,301,510
EXPENDITURES
General government - - 30,001 341,203 - 823,622 1,194,826
Public safety - 133,410 297,906 - - - 431,316
Culture and recreation 1,036,725 - 50,315 - 194,194 - 1,281,234
Community development - - 420,954 - - - 420,954
Capital outlay - - 200,000 251,187 155,949 - 607,136
Total expenditures 1,036,725 133,410 999,176 592,390 350,143 823,622 3,935,466
Excess (deficiency) of revenues
over (under) expenditures 541,398 53,470 (98,669) (223,725) 506,466 587,104 1,366,044
OTHER FINANCING SOURCES
Transfers in - - 124,401 1,365,394 - - 1,489,795
Sale of capital assets - 29,031 - - - - 29,031
Total other financing sources - 29,031 124,401 1,365,394 - - 1,518,826
NET CHANGE IN FUND BALANCES 541,398 82,501 25,732 1,141,669 506,466 587,104 2,884,870
FUND BALANCES, BEGINNING OF YEAR 4,359,540 85,621 249,096 - 1,581,633 2,279,728 8,555,618
FUND BALANCES, END OF YEAR 4,900,938$ 168,122$ 274,828$ 1,141,669$ 2,088,099$ 2,866,832$ 11,440,488$
SPECIAL REVENUE
81
INTERNAL SERVICE FUNDS
The Internal Service Funds are used to account for financing of services provided by one department to
other departments of the City on a cost-reimbursement basis.
Replacement Fund - accounts for the costs associated with the acquisition of vehicles, machinery,
and equipment through the rental of such items to other departments.
Risk Management Fund – accounts for the costs associated with workers compensation, liability and
property insurance and medical and dental programs established for City employees and their covered
dependents.
Facility Maintenance Fund - The Facility Maintenance Fund accumulates resources to address large
repairs and aging facility infrastructure. The accumulation of resources will help address major building
repairs and prevent building deterioration.
CITY OF ALLEN, TEXAS EXHIBIT C-1
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
SEPTEMBER 30, 2017
82
RISK FACILITY
REPLACEMENT MANAGEMENT MAINTENANCE
FUND FUND FUND TOTALS
ASSETS
CURRENT ASSETS
Cash and cash equivalents 3,677,850$ 1,327,220$ 286,585$ 5,291,655$
Investments 7,526,496 3,640,751 725,898 11,893,145
Accounts receivable - 7,056 - 7,056
Accrued interest receivable 18,784 8,755 1,942 29,481
Prepaid items - 83,085 - 83,085
Total current assets 11,223,130 5,066,867 1,014,425 17,304,422
CAPITAL ASSETS
Machinery and equipment 5,842,625 - - 5,842,625
Vehicles 14,768,075 - - 14,768,075
Construction in progress - - - -
Accumulated depreciation (11,365,945) - - (11,365,945)
Capital assets,
net of accumulated depreciation 9,244,755 - - 9,244,755
TOTAL ASSETS 20,467,885 5,066,867 1,014,425 26,549,177
LIABILITIES AND NET POSITION
LIABILITIES
Accounts payable 372,455 101,546 - 474,001
Accrued liabilities - 447 - 447
Incurred but not reported claims - 1,160,834 - 1,160,834
TOTAL LIABILITIES 372,455 1,262,827 - 1,635,282
NET POSITION
Net investment in capital assets 9,244,755 - - 9,244,755
Unrestricted 10,850,675 3,804,040 1,014,425 15,669,140
TOTAL NET POSITION 20,095,430$ 3,804,040$ 1,014,425$ 24,913,895$
CITY OF ALLEN, TEXAS EXHIBIT C-2
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
83
RISK FACILITY
REPLACEMENT MANAGEMENT MAINTENANCE
FUND FUND FUND
OPERATING REVENUES
Charges for services 2,841,062$ 10,811,615$ -$ 13,652,677$
Other income 131,447 190,888 48,676.00 371,011
Total operating revenues 2,972,509 11,002,503 48,676 14,023,688
OPERATING EXPENSES
Personal services - 304,123 - 304,123
Contractual services 283,184 11,903,093 351,594 12,537,871
Maintenance - 32 - 32
Supplies 39,177 - - 39,177
Depreciation 1,996,894 - - 1,996,894
Total operating expenses 2,319,255 12,207,248 351,594 14,878,097
OPERATING INCOME (LOSS)653,254 (1,204,745) (302,918) (854,409)
NON-OPERATING REVENUES
Investment earnings 76,694 37,769 8,943 123,406
Gain on disposal of capital assets 219,730 - - 219,730
Total non-operating revenues 296,424 37,769 8,943 343,136
INCOME BEFORE TRANSFERS 949,678 (1,166,976) (293,975) (511,273)
TRANSFERS
Transfers in 220,000 482,462 600,000 1,302,462
Transfers out (201,443) - - (201,443)
Total transfers 18,557 482,462 600,000 1,101,019
CHANGE IN NET POSITION 968,235 (684,514) 306,025 589,746
NET POSITION, BEGINNING OF YEAR 19,127,195 4,488,554 708,400.00 24,324,149
NET POSITION, END OF YEAR 20,095,430$ 3,804,040$ 1,014,425$ 24,913,895$
TOTALS
CITY OF ALLEN, TEXAS EXHIBIT C-3
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
84
RISK FACILITY
REPLACEMENT MANAGEMENT MAINTENANCE
FUND FUND FUND
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from transactions with other funds 2,972,509$ 10,995,447$ 48,676$ 14,016,632$
Cash paid to employees for services - (304,123) - (304,123)
Cash paid for goods and services (1,342) (158,936) (455,112) (615,390)
Cash paid for claims - (11,668,125) - (11,668,125)
Net cash provided by (used in) operating activities 2,971,167 (1,135,737) (406,436) 1,428,994
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Transfers in 220,000 482,462 600,000 1,302,462
Transfers out (201,443) - - (201,443)
Net cash provided by non-capital financing activities 18,557 482,462 600,000 1,101,019
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition of capital assets (3,125,411) - - (3,125,411)
Proceeds from sale of capital assets 219,730 - - 219,730
Net cash used in capital and related financing activities (2,905,681) - - (2,905,681)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities (673,975) (476,133) (393,866) (1,543,974)
Interest on investments 97,241 48,443 8,663 154,347
Net cash (used in) investing activities (576,734) (427,690) (385,203) (1,389,627)
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (492,691) (1,080,965) (191,639) (1,765,295)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 4,170,541 2,408,185 478,224 7,056,950
CASH AND CASH EQUIVALENTS, END OF YEAR 3,677,850$ 1,327,220$ 286,585$ 5,291,655$
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
Net operating income (loss) 653,254$ (1,204,745)$ (302,918)$ (854,409)$
Adjustments to reconcile operating income (loss)
to net cash provided by (used in) operating activities:
Depreciation 1,996,894 - - 1,996,894
Change in assets and liabilities:
Accounts receivables - (7,056) (7,056)
Prepaids - 118,915 - 118,915
Liabilities 321,019 (42,851) (103,518) 174,650
Total adjustments 2,317,913 69,008 (103,518) 2,283,403
Net cash provided by (used in) operating activities 2,971,167$ (1,135,737)$ (406,436)$ 1,428,994$
TOTALS
85
DISCRETELY PRESENTED COMPONENT UNITS
Allen Economic Development Corporation (AEDC) – AEDC is a legally separate entity from the City and
is responsible for aiding, promoting and furthering economic development within the City.
Allen Community Development Corporation (ACDC) – ACDC is a legally separate entity from the City
and is responsible for supporting the improvements in community parks and recreation, streets and
sidewalks, public safety and the community library.
CITY OF ALLEN, TEXAS EXHIBIT D-1
BALANCE SHEET
ALLEN ECONOMIC DEVELOPMENT CORPORATION
SEPTEMBER 30, 2017
86
ASSETS
CURRENT ASSETS
Cash and cash equivalents 2,878,788$
Investments 8,968,278
Sales tax receivable 1,521,997
Accrued interest receivable 22,462
Prepaid items 6,298
TOTAL ASSETS 13,397,823$
LIABILITIES AND FUND BALANCES
CURRENT LIABILITIES
Accounts payable 2,617,615$
Accrued and other liabilities 23,913
TOTAL LIABILITIES 2,641,528
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - interest 10,388
TOTAL DEFERRED INFLOWS OF RESOURCES 10,388
FUND BALANCES
Nonspendable 6,298
Restricted
Debt service 270,214
Unassigned 10,469,395
TOTAL FUND BALANCES 10,745,907
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES 13,397,823$
CITY OF ALLEN, TEXAS EXHIBIT D-2
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
ALLEN ECONOMIC DEVELOPMENT CORPORATION
SEPTEMBER 30, 2017
87
Total governmental fund balance 10,745,907$
Amounts reported for governmental activities in the statement of net position
are different because:
Revenues earned but not available within sixty days of the year end are not
recognized as revenue on the fund financial statements. 10,388
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.(67,941)
Long-term liabilities, including bonds payable are not due and payable in the
current period and, therefore, are not reported in the fund financial statements. (19,547,579)
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. 18,866,830
Net position of governmental activities 10,007,605$
CITY OF ALLEN, TEXAS EXHIBIT D-3
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
ALLEN ECONOMIC DEVELOPMENT CORPORATION
FOR THE YEAR ENDED SEPTEMBER 30, 2017
88
REVENUES
Sales and other taxes 9,523,424$
Investment earnings 134,105
Miscellaneous 1,439,973
Total revenues 11,097,502
EXPENDITURES
Current:
Economic development 12,156,939
Capital projects:
Economic development 10,521,016
Debt service:
Principal retirement 5,913,690
Interest and fiscal charges 1,037,189
Total expenditures 29,628,834
Deficiency of revenues under expenditures (18,531,332)
OTHER FINANCING SOURCES
Issuance of debt 17,950,000
Proceeds from sale of capital assets 1,441,541
Payment to refund escrow agent (13,344,370)
Premium on issuance of debt 1,389,763
Total other financing sources 7,436,934
NET CHANGE IN FUND BALANCE (11,094,398)
FUND BALANCES, BEGINNING OF YEAR 21,840,305
FUND BALANCES, END OF YEAR 10,745,907$
CITY OF ALLEN, TEXAS EXHIBIT D-4
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT
OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
ALLEN ECONOMIC DEVELOPMENT CORPORATION
FOR THE YEAR ENDED SEPTEMBER 30, 2017
89
Net change in fund balances - total governmental funds (11,094,398)$
Amounts reported for governmental activities in the statement of activities
are different because:
The proceeds from issuance of long-term debt provides current financial resources to
governmental funds, while the payment of the principal of long-term debt consumes the
current financial resources of governmental funds. Also, governmental funds report the
effect of premiums, discounts, and similar items when debt is first issued. However,
these amounts are amortized in the government-wide financial st atements.
Refunding bonds issued (11,810,000)
Bonds issued (6,140,000)
Premium on bonds issued (1,389,763)
Payment to refunding bond escrow agent 13,344,370
Bond principal retirement 5,310,000
Note principal retirement 603,690
Amortization of bond premiums 132,357
Amortization of deferred charges on refundings (129,797) (79,143)
Current year changes in accrued interest payable do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental
funds.(12,764)
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.10,388
In the governmental fund financial statements, the proceeds from a sale of assets
are shown as an increase in financial resources. However in t he statement of activities,
the gain or loss is calculated and reported. (632,937)
Capital contributions to the primary government are reported in the statement of activities
but do not require the use of current financial resources. Therefore the expense
is not reported as an expenditure in the governmental funds. (533,118)
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. 10,521,016
Change in net position of governmental activities (1,820,956)$
CITY OF ALLEN, TEXAS EXHIBIT D-5
BALANCE SHEETS
ALLEN COMMUNITY DEVELOPMENT CORPORATION
SEPTEMBER 30, 2017
90
ASSETS
CURRENT ASSETS
Cash and cash equivalents 4,074,731$
Investments 9,505,525
Sales tax receivable 1,521,997
Accrued interest receivable 24,093
TOTAL ASSETS 15,126,346$
LIABILITIES AND FUND BALANCES
CURRENT LIABILITIES
Accounts payable 561,017$
Retainage payable 18,500
TOTAL LIABILITIES 579,517
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - interest 11,142
TOTAL DEFERRED INFLOWS OF RESOURCES 11,142
FUND BALANCES
Restricted
Debt service 208,937
Assigned for capital projects 5,915,220
Unassigned 8,411,530
TOTAL FUND BALANCES 14,535,687
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES 15,126,346$
CITY OF ALLEN, TEXAS EXHIBIT D-6
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
ALLEN COMMUNITY DEVELOPMENT CORPORATION
SEPTEMBER 30, 2017
91
Total governmental fund balance 14,535,687$
Amounts reported for governmental activities in the statement of net position
are different because:
The following deferred outflows of resources are not reported i n governmental funds:
Deferred charges on refunding 648,107
Revenues earned but not available within sixty days of the year end are not
recognized as revenue on the fund financial statements. 11,142
Interest payable on long-term debt does not require current financial resources,
and, therefore, is not reported as a liability in the governmental funds
balance sheet.(57,965)
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. (29,520,000)
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. 51,338,690
Net position of governmental activities 36,955,661$
CITY OF ALLEN, TEXAS EXHIBIT D-7
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
ALLEN COMMUNITY DEVELOPMENT CORPORATION
FOR THE YEAR ENDED SEPTEMBER 30, 2017
92
REVENUES
Sales and other taxes 9,523,424$
Investment earnings 82,926
Total revenues 9,606,350
EXPENDITURES
Current:
Community development 2,151,135
Capital projects:
Community development 1,782,225
Debt service:
Principal retirement 1,715,000
Interest and fiscal charges 695,418
Total expenditures 6,343,778
Excess (deficiency) of revenues over expenditures 3,262,572
NET CHANGE IN FUND BALANCES 3,262,572
FUND BALANCES, BEGINNING OF YEAR 11,273,115
FUND BALANCES, END OF YEAR 14,535,687$
CITY OF ALLEN, TEXAS EXHIBIT D-8
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT
OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
ALLEN COMMUNITY DEVELOPMENT CORPORATION
FOR THE YEAR ENDED SEPTEMBER 30, 2017
93
Net change in fund balances - total governmental funds 3,262,572$
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 are allocated over their estimated
useful lives and reported as depreciation expense. 1,782,225
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.11,142
Governmental funds report the effect of premiums, discounts, and similar items when
debt is first issued. However, these amounts are amortized in the
government-wide financial statements. (81,013)
Current year changes in accrued interest payable do not require the use of current
financial resources and, therefore, are not reported as expendi tures in governmental
funds.(1,225)
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. (3,065,364)
Repayment of the principal on long-term debt consumes the current financial
resources of governmental funds. However, these transactions have no
effect on net position. 1,715,000
Change in net position of governmental activities 3,623,337$
CAPITAL ASSETS
USED IN THE OPERATIONS
OF GOVERNMENTAL FUNDS
CITY OF ALLEN, TEXAS EXHIBIT E-1
SCHEDULE BY SOURCE (a)
SEPTEMBER 30, 2017
94
GOVERNMENTAL FUNDS CAPITAL ASSETS
Land and land improvements 139,069,289$
Buildings 101,175,167
Machinery and equipment 9,374,279
Furniture and fixtures 7,523,758
Vehicles 1,689,749
Books 909,026
Infrastructure 496,340,369
Total property and equipment in service 756,081,637
Construction in progress 7,492,158
Total governmental funds capital assets 763,573,795$
INVESTMENTS IN GOVERNMENTAL FUNDS CAPITAL ASSETS
BY REVENUE SOURCE
General obligation bond proceeds and interest income 204,712,547$
Revenue bonds 10,475,000
Contributions 409,010,409
Other governments 9,951,500
General and other fund operations 106,943,845
Special revenue funds 22,480,494
Total governmental funds capital assets 763,573,795$
(a) This schedule presents only the capital asset balances related to governmental funds,
including infrastructure. Accordingly, the capital assets reported in the internal service
funds are excluded from the above amounts . Generally, the capital assets of internal
service funds are included as governmental activities in the statement of net position.
CITY OF ALLEN, TEXAS
SCHEDULE OF CAPITAL ASSETS USED IN THE OPERATION OF
GOVERNMENTAL FUNDS BY FUNCTION AND ACTIVITY (a)
SEPTEMBER 30, 2017
95
Function and Activity
Land & Land
Improvements Buildings
Machinery &
Equipment
Furniture &
Fixtures
GENERAL GOVERNMENT
Municipal court 631,788$ 289,669$ 137,584 -$
City administration 2,719,532 8,871,016 569,310 838,708
Information technology - - 1,239,089 1,040
Internal services - - 371,109 14,623
Finance - - - 23,600
Total general government 3,351,320 9,160,685 2,317,092 877,971
PUBLIC SAFETY
Police - 8,528,747 593,816 235,768
Fire 78,932 14,541,588 871,001 288,428
Total public safety 78,932 23,070,335 1,464,817 524,196
PUBLIC WORKS
Community services & streets 51,274,858 13,184,077 508,186 41,898
Engineering 66,920,410 8,624,175 160,284 468,878
Total public works 118,195,268 21,808,252 668,470 510,776
CULTURE & RECREATION
Parks & recreation 16,943,769 34,063,223 3,399,526 4,764,193
CVB - - - -
Library - 11,041,387 457,946 837,256
Total culture and recreation 16,943,769 45,104,610 3,857,472 5,601,449
COMMUNITY DEVELOPMENT
Building & code compliance - - - -
Planning & development - - 16,988 9,366
Total community development - - 16,988 9,366
GRANT ADMINISTRATION
Grant Administration 500,000 2,031,285 1,049,440 -
Total grant administration 500,000 2,031,285 1,049,440 -
Construction in Progress - - - -
Total governmental funds capital assets 139,069,289$ 101,175,167$ 9,374,279$ 7,523,758$
EXHIBIT E-2
96
Vehicles Books
Other
Improvements
Construction in
Progress Total
-$ -$ 6,178$ -$ 1,065,219$
25,348 - - - 13,023,914
39,570 - 5,539,835 - 6,819,534
- 4,311 - 390,043
- - - - 23,600
64,918 - 5,550,324 - 21,322,310
264,571 - 1,148,333 - 10,771,235
542,732 - 110,682 16,433,363
807,303 - 1,259,015 - 27,204,598
33,225 - 280,978,293 - 346,020,537
140,457 - 174,774,961 - 251,089,165
173,682 - 455,753,254 - 597,109,702
451,251 - 31,298,525 - 90,920,487
26,221 - - - 26,221
- 899,099 3,519 - 13,239,207
477,472 899,099 31,302,044 - 104,185,915
13,619 - - - 13,619
19,848 - - - 46,202
33,467 - - - 59,821
132,907 9,927 2,475,732 - 6,199,291
132,907 9,927 2,475,732 - 6,199,291
- - - 7,492,158 7,492,158
1,689,749$ 909,026$ 496,340,369$ 7,492,158$ 763,573,795$
CITY OF ALLEN, TEXAS EXHIBIT E-3
SCHEDULE OF CHANGES IN CAPITAL ASSETS USED IN THE OPERATION
OF GOVERNMENTAL FUNDS – BY FUNCTION AND ACTIVITY (a)
FOR THE YEAR ENDED SEPTEMBER 30, 2017
97
Function and Activity
Governmental Funds
Capital Assets
October 1, 2016
Developer
Contributions Additions Deductions Transfers
Governmental Funds
Capital Assets
September 30, 2017
GENERAL GOVERNMENT
Municipal Court 1,065,219$ -$ -$ -$ -$ 1,065,219$
City Administration 12,978,540 - 45,374 - - 13,023,914
Information Technology 6,658,610 - 205,813 (44,889) - 6,819,534
Human Resources - - - - - -
Internal Services 512,813 - - - - 512,813
Finance 23,600 - - - - 23,600
Total General Government 21,238,782 - 251,187 (44,889) - 21,445,080
PUBLIC SAFETY
Police 10,810,342 - - (98,463) - 10,711,879
Fire 11,265,056 - 179,487 (47,360) 5,460,587 16,857,770
Total Public Safety 22,075,398 - 179,487 (145,823) 5,460,587 27,569,649
PUBLIC WORKS
Community services & streets 335,512,725 10,624,701 - (94,943) - 346,042,483
Engineering 235,995,382 6,078,900 338,387 - 8,730,797 251,143,466
Total Public Works 571,508,107 16,703,601 338,387 (94,943) 8,730,797 597,185,949
CULTURE & RECREATION
Parks & Recreation 89,280,501 - 515,436 (332,187) 786,699 90,250,449
CVB 26,221 - - - - 26,221
Library 13,962,307 - - (723,101) - 13,239,206
Total Culture & Recreation 103,269,029 - 515,436 (1,055,288) 786,699 103,515,876
COMMUNITY DEVELOPMENT
Building & Code Compliance 13,619 - - - - 13,619
Planning & Development 46,202 - - - - 46,202
Total Community Development 59,821 - - - - 59,821
GRANT ADMINISTRATION
Grant Administration 6,464,958 - - (159,696) - 6,305,262
Total Grant Administration 6,464,958 - - (159,696) - 6,305,262
Total general capital assets
allocated by function 724,616,095 16,703,601 1,284,497 (1,500,639) 14,978,083 756,081,637
Construction in progress 16,656,539 5,813,702 (14,978,083) 7,492,158
Total governmental funds capital
assets 741,272,634$ 16,703,601$ 7,098,199$ (1,500,639)$ -$ 763,573,795$
STATISTICAL SECTION
(UNAUDITED)
98
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 is sue 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 s ervices the City provides.
STATISTICAL SECTION
This part of the City of Allen's comprehensive annual financial report presents detailed information as a
context for understanding what the information in the financial statements, notes disclosures, and required
supplementary information says about the City's overall financial health. This information has not been
audited by the independent auditor.
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 government-wide information include information beginning in that year.
CITY OF ALLEN, TEXAS TABLE 1 NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (Accrual Basis of Accounting) (Unaudited) 99 2008200920102011201220132014201520162017Governmental activitiesNet investment in capital assets 302,002,142$ 362,579,369$ 375,929,040$ 366,601,816$ 373,586,071$ 369,314,466$ 363,168,607$ 355,756,224$ 364,667,251$ 366,322,218$ Restricted 1,151,814 1,068,651 889,439 18,656,870 21,042,413 26,511,231 26,066,205 31,476,026 32,485,173 38,303,226 Unrestricted 22,106,668 27,024,433 23,658,628 7,621,235 8,054,347 8,960,703 12,436,903 16,596,955 14,435,604 15,902,576 Total governmental net position 325,260,624$ 390,672,453$ 400,477,107$ 392,879,921$ 402,682,831$ 404,786,400$ 401,671,715$ 403,829,205$ 411,588,028$ 420,528,020$ Business-type activitiesNet investment in capital assets 92,541,986$ 92,988,242$ 94,983,309$ 96,288,053$ 99,960,794$ 99,544,466$ 100,991,443$ 102,340,588$ 106,174,191$ 107,926,811$ Restricted for debt service 922,863 654,521 376,962 349,692 428,646 364,510 26,859 344,421 216,664 195,485 Unrestricted 24,970,084 27,166,614 25,861,166 29,434,587 31,346,727 33,860,716 32,720,930 34,165,174 33,592,809 31,920,455 Total business-type net position 118,434,933$ 120,809,377$ 121,221,437$ 126,072,332$ 131,736,167$ 133,769,692$ 133,739,232$ 136,850,183$ 139,983,664$ 140,042,751$ Primary governmentNet investment in capital assets 394,544,128$ 455,567,611$ 470,912,349$ 462,889,869$ 473,546,865$ 468,858,932$ 464,160,050$ 458,096,812$ 470,841,442$ 474,249,029$ Restricted for debt service 2,074,677 1,723,172 1,266,401 19,006,562 21,471,059 26,875,741 26,093,064 31,820,447 32,701,837 38,498,711 Unrestricted 47,076,752 54,191,047 49,519,794 37,055,822 39,401,074 42,821,419 45,157,833 50,762,129 48,028,413 47,823,031 Total primary government net position 443,695,557$ 511,481,830$ 521,698,544$ 518,952,253$ 534,418,998$ 538,556,092$ 535,410,947$ 540,679,388$ 551,571,692$ 560,570,771$ Source:Comprehensive Annual Financial ReportFiscal Year
CITY OF ALLEN, TEXAS TABLE 2 CHANGES IN NET POSITION LAST TEN FISCAL YEARS (Accrual Basis of Accounting) (Unaudited) 100 2008200920102011201220132014201520162017ExpensesGovernmental activities:General government 13,466,124$ 14,304,910$ 20,415,700$ 16,989,047$ 18,347,067$ 22,271,050$ 24,940,939$ 24,464,246$ 25,304,811$ 28,251,550$ Public safety 23,438,274 24,498,604 26,106,950 27,110,778 28,675,146 28,935,911 30,408,487 31,607,444 35,199,937 39,624,788 Public works 14,508,426 14,893,306 16,036,561 16,779,393 17,681,730 17,807,948 18,252,130 18,349,569 19,083,214 20,209,785 Culture and recreation 16,980,568 17,689,583 23,160,807 30,645,922 32,112,451 29,983,224 30,987,689 32,407,934 32,851,598 28,968,534 Community development 4,557,098 2,718,864 2,665,534 2,742,284 2,527,518 2,230,968 2,689,517 2,861,704 3,251,555 3,007,047 Interest on long-term debt 4,219,858 4,326,330 4,860,527 4,715,550 4,539,622 4,067,303 3,955,305 3,921,989 3,356,234 2,980,513 Total governmental activities expenses 77,170,348 78,431,597 93,246,079 98,982,974 103,883,534 105,296,404 111,234,067 113,612,886 119,047,349 123,042,217 Business-type activities:Water and sewer 21,357,015 22,227,624 26,344,371 25,638,007 26,359,698 29,160,281 30,081,379 32,304,628 35,604,182 39,527,816 Solid waste 4,433,560 4,893,175 5,111,913 5,411,960 5,429,049 5,495,654 5,383,215 5,560,294 5,870,269 6,078,853 Drainage 710,711 692,180 895,924 819,947 882,726 910,179 951,973 914,322 1,146,138 1,193,057 Golf Course 1,964,367 2,165,144 2,029,699 1,912,583 1,179,015 2,483,467 2,839,098 2,911,476 3,089,041 3,135,144 Total business-type activities expenses 28,465,653 29,978,123 34,381,907 33,782,497 33,850,488 38,049,581 39,255,665 41,690,720 45,709,630 49,934,870 Total primary government expenses 105,636,001$ 108,409,720$ 127,627,986$ 132,765,471$ 137,734,022$ 143,345,985$ 150,489,732$ 155,303,606$ 164,756,979$ 172,977,087$ Program RevenuesGovernmental activities:Charges for Services:General government 508,964$ 553,322$ 619,950$ 575,406$ 712,432$ 675,196$ 823,801$ 705,064$ 467,786$ 497,243$ Public safety 1,274,374 1,514,091 1,464,849 1,521,787 1,577,643 1,541,985 1,568,294 1,647,407 1,801,984 2,712,076 Public works 194,223 26,940 131,147 117,518 137,357 196,685 154,418 233,808 210,687 293,559 Culture and recreation 2,473,738 2,638,116 4,347,601 7,762,439 8,019,145 8,443,286 8,425,791 9,177,211 10,289,465 8,747,206 Community development 4,296,269 1,492,567 1,498,580 1,394,833 1,265,485 2,220,438 3,103,410 3,021,708 3,216,799 4,266,140 Operating grants and contributions 2,762,517 2,771,709 3,148,752 2,736,094 1,504,355 2,067,482 1,121,356 1,749,567 1,557,260 2,443,054 Capital grants and contributions 42,823,515 70,200,823 21,884,059 5,437,433 26,626,381 14,737,780 9,571,206 10,552,610 16,039,869 15,327,094 Total governmental activities program revenues 54,333,600 79,197,568 33,094,938 19,545,510 39,842,798 29,882,852 24,768,276 27,087,375 33,583,850 34,286,372 Business-type activities:Charges for services:Water and sewer 24,589,440 24,642,034 25,588,187 30,798,158 28,693,707 30,808,084 28,955,282 34,135,714 36,335,868 37,163,882 Solid waste 4,975,594 5,541,375 5,789,828 6,138,900 6,040,165 6,114,951 6,309,729 6,474,386 6,687,182 6,735,559 Drainage 1,016,208 1,116,881 1,238,278 1,284,058 1,338,680 1,352,671 1,378,662 1,465,044 1,519,405 1,648,681 Golf Course 1,554,661 1,628,697 1,430,861 1,406,555 59,054 1,924,706 2,537,564 2,361,384 2,705,799 2,959,361 Operating grants and contributions - - - 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 - - Capital grants and contributions 14,561,455 2,135,885 5,142,221 2,749,029 7,151,043 3,788,300 3,685,960 4,416,642 6,172,301 5,622,911 Total business-type activities program revenues 46,697,358 35,064,872 39,189,375 43,376,700 44,282,649 44,988,712 43,867,197 49,853,170 53,420,555 54,130,394 Total primary government program revenues 101,030,958$ 114,262,440$ 72,284,313$ 62,922,210$ 84,125,447$ 74,871,564$ 68,635,473$ 76,940,545$ 87,004,405$ 88,416,766$ (continued)Fiscal Year
CITY OF ALLEN, TEXAS TABLE 2 CHANGES IN NET POSITION LAST TEN FISCAL YEARS (Accrual Basis of Accounting) (Unaudited) 101 Net (Expenses) RevenueGovernmental activities (22,836,748)$ 765,971$ (60,151,141)$ (79,437,464)$ (64,040,736)$ (75,413,552)$ (86,465,791)$ (86,525,511)$ (85,463,499)$ (88,755,845)$ Business-type activities 18,231,705 5,086,749 4,807,468 9,594,203 10,432,161 6,939,131 4,611,532 8,162,450 7,710,925 4,195,524 Total primary government net expenses (4,605,043)$ 5,852,720$ (55,343,673)$ (69,843,261)$ (53,608,575)$ (68,474,421)$ (81,854,259)$ (78,363,061)$ (77,752,574)$ (84,560,321)$ General Revenuesand Other Changes in Net AssetsGovernmental activities:Taxes:Property taxes 37,261,411$ 39,450,387$ 40,757,240$ 41,111,106$ 42,042,753$ 44,474,745$ 46,232,565$ 50,143,986$ 54,102,952$ 58,816,876$ Sales taxes 10,046,534 11,140,337 12,461,268 13,907,095 15,038,519 16,289,761 18,004,636 18,141,683 19,274,983 19,450,088 Franchise taxes 5,530,732 5,533,573 6,091,857 6,421,059 6,150,419 6,302,018 6,973,705 7,412,447 7,295,931 7,553,013 Hotel / Motel taxes 719,039 597,512 805,185 1,113,312 1,229,996 1,350,286 1,499,512 1,544,160 1,607,263 1,547,244 Other taxes 1,900,081 1,987,765 2,128,167 1,886,665 1,622,633 1,389,503 2,151,232 1,851,397 1,621,012 1,912,559 Investment earnings 2,437,926 1,558,913 1,154,160 644,169 538,863 177,495 416,828 689,736 735,832 837,577 Gain on disposition of capital assets 57,979 113,734 103,095 233,783 40,509 92,401 - - - 263,627 Miscellaneous 511,656 1,052,184 1,312,462 1,451,743 1,802,747 2,079,082 2,445,491 2,650,103 3,794,277 2,703,964 Transfers 2,806,596 3,211,453 5,142,361 5,071,346 5,377,207 5,361,830 5,627,137 6,249,489 4,790,072 4,610,889 Total governmental activities 61,271,954 64,645,858 69,955,795 71,840,278 73,843,646 77,517,121 83,351,106 88,683,001 93,222,322 97,695,837 Business-type activities:Investment earnings 775,413 499,148 338,849 184,709 197,613 70,382 134,988 194,051 197,125 199,508 Gain on disposition of capital assets 667,624 - - - - - - - 15,503 - Miscellaneous - - 408,104 143,329 411,268 385,842 850,157 1,003,939 - 274,944 Transfers (2,806,596) (3,211,453) (5,142,361) (5,071,346) (5,377,207) (5,361,830) (5,627,137) (6,249,489) (4,790,072) (4,610,889) Total business-type activities (1,363,559) (2,712,305) (4,395,408) (4,743,308) (4,768,326) (4,905,606) (4,641,992) (5,051,499) (4,577,444) (4,136,437) Total primary government 59,908,395$ 61,933,553$ 65,560,387$ 67,096,970$ 69,075,320$ 72,611,515$ 78,709,114$ 83,631,502$ 88,644,878$ 93,559,400$ Change in Net PositionGovernmental activities 38,435,206$ 65,411,829$ 9,804,654$ (7,597,186)$ 9,802,910$ 2,103,569$ (3,114,685)$ 2,157,490$ 7,758,823$ 8,939,992$ Business-type activities 16,868,146 2,374,444 412,060 4,850,895 5,663,835 2,033,525 (30,460) 3,110,951 3,133,481 59,087 Total primary government 55,303,352$ 67,786,273$ 10,216,714$ (2,746,291)$ 15,466,745$ 4,137,094$ (3,145,145)$ 5,268,441$ 10,892,304$ 8,999,079$ Source:Comprehensive Annual Financial Report
CITY OF ALLEN, TEXAS TABLE 3 FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (Modified Accrual Basis of Accounting) (Unaudited) 102 2008200920102011201220132014201520162017General FundNonspendable 1,126$ 941$ 862$ 156$ 2,081$ 2,098$ 4,767$ 1,486$ 2,129$ 126,833$ Restricted - - - 55,898 513,801 726,953 752,238 779,185 907,908 58,910 Assigned - - - 1,402 133,478 851,564 748,200 921,030 - 2,000,000 Unassigned 13,551,273 13,584,544 15,187,065 15,349,834 15,857,642 14,672,989 17,368,187 18,407,873 20,911,943 19,684,053 Total General Fund 13,552,399$ 13,585,485$ 15,187,927$ 15,407,290$ 16,507,002$ 16,253,604$ 18,873,392$ 20,109,574$ 21,821,980$ 21,869,796$ All Other Governmental FundsRestriced 39,699,958$ 54,286,739$ 39,138,691$ 31,131,674$ 26,297,587$ 34,132,037$ 42,149,113$ 51,398,430$ 46,610,702$ 57,540,668$ Total all other governmental funds 39,699,958$ 54,286,739$ 39,138,691$ 31,131,674$ 26,297,587$ 34,132,037$ 42,149,113$ 51,398,430$ 46,610,702$ 57,540,668$ Source:Comprehensive Annual Financial ReportFiscal Year
CITY OF ALLEN, TEXAS TABLE 4 CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (Modified Accrual Basis of Accounting) (Unaudited) 103 2008200920102011201220132014201520162017REVENUESAd valorem taxes 37,524,441$ 39,524,538$ 40,555,218$ 41,167,524$ 42,045,252$ 44,725,261$ 46,142,222$ 50,177,840$ 54,104,132$ 58,875,936$ Franchise taxes 5,530,732 5,533,573 6,091,857 6,421,059 6,150,419 6,302,018 6,973,705 7,412,447 7,295,931 7,553,013 Municipal sales tax 10,046,534 11,140,337 12,461,268 13,907,095 15,038,519 16,289,761 18,004,636 18,141,683 19,274,983 19,450,088 Licenses, permits and fees 2,321,139 1,888,823 1,120,401 1,270,493 1,215,677 2,294,955 2,915,533 3,134,551 3,064,580 4,450,639 Charges for services 4,169,453 1,923,778 5,790,716 9,234,618 10,051,684 10,623,970 10,580,553 11,734,344 13,002,770 11,664,328 Fines 1,900,477 1,996,179 2,134,324 1,886,665 1,648,194 1,402,725 2,160,168 1,805,230 1,579,628 1,851,735 Gifts and contributions 2,189,511 23,902,163 609,522 986,125 1,443,766 1,322,228 819,408 1,012,103 832,211 712,437 Hotel / motel fees 719,039 597,512 805,185 1,113,312 1,229,996 1,350,286 1,499,512 1,544,160 1,607,263 1,547,244 Recreation fees 2,154,236 2,309,331 - - - - - - - - Intergovernmental 2,185,252 22,358,605 5,528,449 3,795,087 4,637,343 5,267,026 1,704,404 3,570,737 2,645,089 1,927,567 Investment earnings 2,160,011 1,318,704 985,219 547,525 440,065 144,604 344,386 577,014 627,760 643,928 Miscellaneous 1,432,285 1,123,436 5,199,090 1,939,352 2,241,166 2,671,410 3,394,197 3,420,441 3,711,870 3,428,366 Total revenues 72,333,110 113,616,979 81,281,249 82,268,855 86,142,081 92,394,244 94,538,724 102,530,550 107,746,217 112,105,281 EXPENDITURESGeneral government 15,701,588 13,585,542 19,656,265 16,502,188 17,145,603 21,785,677 23,544,055 23,996,598 24,101,637 27,182,391Public safety 23,269,152 24,086,875 24,994,107 26,089,579 27,291,20128,317,603 29,214,552 30,731,310 32,966,265 37,294,550Public works 3,579,431 3,614,305 5,186,355 3,856,373 4,104,118 4,055,500 4,077,961 4,888,798 4,865,431 5,428,996Culture and recreation 13,338,981 13,422,415 14,581,130 21,785,214 22,460,071 20,864,140 21,435,581 22,540,516 24,287,382 23,745,884Community development 2,414,866 2,663,153 2,584,454 2,549,235 2,406,485 2,211,253 2,631,289 2,880,880 2,833,011 2,951,864Capital outlay 8,122,023 48,473,906 34,219,102 17,398,837 7,972,159 6,123,786 6,573,002 6,555,445 15,408,293 7,053,863Debt servicePrincipal retirement 4,775,000 5,200,000 5,995,000 6,930,000 7,634,130 7,964,914 8,364,986 9,322,537 9,135,000 10,445,000Interest and fiscal charges 3,986,567 4,309,099 4,710,336 4,775,9824,562,965 3,955,639 3,882,394 3,931,548 3,801,812 3,378,943Total expenditures 75,187,608 115,355,295 111,926,749 99,887,408 93,576,732 95,278,512 99,723,820 104,847,632 117,398,831 117,481,491 Excess (deficiency) of revenuesover (under) expenditures (2,854,498) (1,738,316) (30,645,500) (17,618,553) (7,434,651) (2,884,268) (5,185,096) (2,317,082) (9,652,614) (5,376,210) OTHER FINANCING SOURCES (USES)Refunding bonds issued - - - 12,625,000 13,940,000 - - 32,245,000 6,910,000 - Premium on refunding bonds issued 50,904 189,872 150,733 667,702 2,296,042 350,071 432,879 3,772,133 1,039,610 955,225 Issuance of debt 10,185,000 15,400,000 12,000,000 5,000,000 - 5,065,000 10,595,000 - 1,940,000 11,845,000 Capital lease obligations 153,455 35,069 - - 29,905 - - - 1,700,000 - Payment to refund bond escrow agent - - - (12,998,419) (16,050,003) - - (28,097,931) (7,789,058) - Transfer in 5,502,927 5,973,735 10,136,842 6,849,982 7,074,436 9,598,187 9,257,105 9,711,565 9,137,082 9,805,859Transfer out (2,906,669) (5,318,064) (5,285,873) (2,336,625) (3,599,726) (4,571,226) (4,484,282) (4,847,771) (6,384,490) (6,295,989)Proceeds from sale of capital assets 53,434 77,571 98,192 23,259 9,622 23,288 21,258 19,585 24,148 43,897Total other financing sources (uses) 13,039,051 16,358,183 17,099,894 9,830,899 3,700,276 10,465,320 15,821,960 12,802,581 6,577,292 16,353,992 NET CHANGE IN FUND BALANCES 10,184,553$ 14,619,867$ (13,545,606)$ (7,787,654)$ (3,734,375)$ 7,581,052$ 10,636,864$ 10,485,499$ (3,075,322)$ 10,977,782$ Debt service as a percentageof noncapital expenditures 13.3% 14.4% 13.8% 14.2% 14.3% 13.4% 13.2% 13.6% 12.7% 12.5%Source: Comprehensive Annual Financial ReportFiscal Year
CITY OF ALLEN, TEXAS TABLE 5 ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (Unaudited) 104 Fiscal Year Real Property Personal PropertyLess: Tax-Exempt PropertyTotal Taxable Assessed ValueTotal Direct Tax Rate2008 6,746,339,301$ 638,399,574$ 931,228,814$ 6,453,510,061$ 0.55700$ 2009 7,250,071,630 612,812,456 827,934,570 7,034,949,516 0.55600 2010 7,546,057,552 627,120,557 855,810,360 7,317,367,749 0.55500 2011 7,592,460,367 673,537,481 876,322,043 7,389,675,805 0.55400 2012 7,721,491,897 496,008,713 615,320,140 7,602,180,470 0.55300 2013 7,810,983,131 833,800,673 643,485,592 8,001,298,212 0.55200 2014 8,197,352,931 789,414,854 613,723,945 8,373,043,840 0.55000 2015 9,347,795,862 885,946,440 1,071,401,599 9,162,340,703 0.54000 2016 10,892,510,607 949,453,680 1,665,547,504 10,176,416,783 0.53000 2017 12,247,829,044 1,019,719,862 1,799,062,766 11,468,486,140 0.52000 Sources:City of Allen Budget DocumentCollin Central Appraisal DistrictEstimated Market Value
CITY OF ALLEN, TEXAS TABLE 6 DIRECT AND OVERLAPPING PROPERTY TAX RATES (PER $100 OF ASSESSED VALUE) LAST TEN FISCAL YEARS (unaudited) 105 Fiscal YearOperating/General RateGeneral Obligation Debt Service Total DirectAllen Independent School DistrictPlano Independent School DistrictMcKinney Independent School DistrictLove Joy Independent School DistrictCollin CountyCollin County Community College District2008 0.42662 0.13038 0.55700 1.47030 1.26840 1.51700 1.47630 0.24500 0.08698 2009 0.42370 0.13231 0.55600 1.47030 1.30340 1.51700 1.51500 0.24250 0.08649 2010 0.41075 0.14425 0.55500 1.54000 1.32840 1.54000 1.53500 0.24250 0.08630 2011 0.40908 0.14492 0.55400 1.54000 1.35340 1.52800 1.53500 0.24000 0.08630 2012 0.40533 0.14767 0.55300 1.67000 1.37340 1.54000 1.53500 0.24000 0.08630 2013 0.40506 0.14694 0.55200 1.67000 1.37340 1.54000 1.53500 0.24000 0.08630 2014 0.40912 0.14088 0.55000 1.67000 1.45300 1.67000 1.53500 0.23750 0.08364 2015 0.39836 0.14164 0.54000 1.64000 1.44800 1.67000 1.56000 0.23500 0.08196 2016 0.40627 0.12373 0.53000 1.61000 1.43900 1.67000 1.56000 0.22500 0.08196 2017 0.39627 0.12373 0.52000 1.59000 1.43900 1.62000 1.67000 0.20840 0.08122 Source: Collin Central Appraisal DistrictCity Direct Rates Overlapping Rates
CITY OF ALLEN, TEXAS TABLE 7 PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO (Unaudited) 106 TaxpayerTaxable Assessed ValuePercentage of Total City Taxable Assessed ValueaTaxpayerTaxable Assessed ValuePercentage of Total City Taxable Assessed ValuebThe Village At Allen LP 147,302,454$ 1.28% Chelsea Allen Development LP 69,500,000$ 1.08%AT&T Mobility LLC 123,113,770 1.07% AT&T Mobility LLC 53,085,398 0.82%Watters Creek Owner LLC 117,750,824 1.03% TXU Electric Delivery Company 37,244,873 0.58%Chelsea Allen Development LP 89,327,906 0.78% Lexington Allen LP 36,999,981 0.57%AT&T Services Inc 83,591,374 0.73% Benton Pointe Apartments Inc 31,982,262 0.50%Cisco Systems Inc 81,174,520 0.71% TC Village Inc 30,086,965 0.47%Creekside Acquisition LP 60,819,953 0.53% BES Settler's Gate Fund III LP & ETAL 29,000,000 0.45%BH Benton Pointe Apartments LLC 44,795,236 0.39% SW Bell Telephone LP 21,642,240 0.34%BH Settler's Gate Apartments LP 44,001,257 0.38% Bossy Boots Holdings Ltd 20,709,928 0.32%Oncor Electric Delivery Company 37,616,080 0.33% Auberry Investors Limited Partnership 20,652,000 0.32%Total 829,493,374$ 7.23% Total 350,903,647$ 5.45%Total Assessed Valuation 11,468,486,140 100.00% Total Assessed Valuation 6,453,510,061 100.00%Source: Collin Central Appraisal DistrictNotes: aTaxpayers are assessed on January 1, 2016 (2016 tax year) for the 2017 fiscal year. bTaxpayers are assessed on January 1, 2007 (2007 tax year) for the 2008 fiscal year.20172008
CITY OF ALLEN, TEXAS TABLE 8 AD VALOREM TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (Unaudited) 107 Fiscal YearTotal Tax Levy for Fiscal Year AmountPercentage of LevyCollections in Subsequent Years AmountPercentage of Levy2008 36,001,066$ 35,867,502$ 99.63 77,422$ 35,944,924$ 99.84 2009 39,165,026 38,887,961 99.29 201,225 39,089,186 99.81 2010 40,506,583 40,162,971 99.15 317,725 40,480,696 99.94 2011 41,262,761 40,977,108 99.31 192,676 41,169,784 99.77 2012 42,945,211 41,777,134 97.28 471,521 42,248,655 98.38 2013 44,220,072 44,005,302 99.51 181,363 44,186,665 99.92 2014 46,170,466 45,924,321 99.47 209,458 46,133,779 99.92 2015 49,620,937 49,472,535 99.70 108,742 49,581,277 99.92 2016 53,953,063 53,821,573 99.76 79,267 53,900,840 99.90 2017 58,321,644 58,282,589 99.93 - 58,282,589 99.93 Source: Collin County Tax AssessorCollected within the Fiscal Year of the Levy Total Collections to Date
CITY OF ALLEN, TEXAS TABLE 9 RATIO OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (Unaudited) 108 Fiscal YearGeneral Obligation BondsCertificates of Obligation Tax NotesOther ObligationsWater and Sewer Revenue BondsOther ObligationsTotal Primary GovernmentPercentage of Personal IncomeaPer Capitaa2008 88,920,000$ 5,110,000$ -$ 626,723$ 15,035,000$ 48,745$ 109,740,468$ 4.01% 1,333 2009 99,325,000 4,905,000 876,068 14,100,000 69,633 119,275,701 3.94% 1,421 2010 105,550,000 4,685,000 1,053,242 12,960,000 6,179 124,254,421 4.24% 1,456 2011 104,330,000 4,455,000 914,918 11,770,000 (34,414) 121,435,504 4.01% 1,402 2012 99,365,000 1,060,000 1,957,998 10,535,000 (74,053) 112,843,945 3.42% 1,281 2013 96,735,000 800,000 2,433,439 9,370,000 456,061 109,794,500 2.96% 1,224 2014 99,245,000 530,000 4,615,649 8,015,000 691,493 113,097,142 3.19% 1,241 2015 95,690,000 490,000 7,258,749 6,735,000 596,700 110,770,449 2.81% 1,188 2016 86,445,000 450,000 1,940,000 9,175,844 5,760,000 448,387 104,219,231 2.73% 1,102 2017 88,575,000 405,000 1,255,000 8,859,995 4,760,000 282,326 104,137,321 2.60% 1,043 Notes:Details regarding the City's outstanding debt can be found in the notes to the financial statements.aSee Table 13 for personal income and population data.Governmental Activities Business-Type Activities
CITY OF ALLEN, TEXAS TABLE 10 RATIO OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS (Unaudited) 109 Fiscal YearGeneral Obligation BondsCertificates of Obligation Tax Notes TotalPercentage of Actual Taxable Value of PropertyaPer Capitab2008 88,920,000$ 5,110,000$ -$ 94,030,000$ 1.46% 1,142 2009 99,325,000 4,905,000 104,230,000 1.48% 1,242 2010 105,550,000 4,685,000 110,235,000 1.51% 1,292 2011 104,330,000 4,455,000 108,785,000 1.47% 1,256 2012 99,365,000 1,060,000 100,425,000 1.32% 1,140 2013 96,735,000 800,000 97,535,000 1.22% 1,087 2014 99,245,000 530,000 99,775,000 1.19% 1,095 2015 95,690,000 490,000 96,180,000 1.05% 1,031 2016 86,445,000 450,000 1,940,000 88,835,000 0.87% 939 2017 88,575,000 405,000 1,255,000 90,235,000 0.79% 904 Notes:Details regarding the city's outstanding debt can be found in the notes to the financial statements.aSee Table 5 for property value data.bSee Table 13 for population data.General Bonded Debt Outstanding
CITY OF ALLEN, TEXAS TABLE 11 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30, 2017 (Unaudited) 110 Governmental Unit Net Bonded DebtPercentage of Debt Applicable to AreaAllen Share of Overlapping DebtDebt repaid with property taxesAllen I.S.D. 651,299,087$ 90.31% 588,188,205$ Plano I.S.D. 1,031,725,000 0.85% 8,769,663 McKinney I.S.D. 570,270,000 0.14% 798,378 Lovejoy I.S.D. 166,095,234 10.45% 17,356,952 Collin County 352,380,000 10.39% 36,612,282 Collin College 14,590,000 10.39% 1,515,901 Subtotal, overlapping debt653,241,381$ City of Allen (direct debt)90,235,000 100.00% 90,235,000 Total direct and overlapping debt743,476,381$ Sources:Net Bonded Debt and Percentage of debt provided by Municipal Advisory of Texas.
CITY OF ALLEN, TEXAS TABLE 12 PLEDGED – REVENUE COVERAGE LAST TEN FISCAL YEARS (Unaudited) 111 Fiscal YearTotal RevenuesaLess: Operating ExpensesbNet Available RevenueAnnual RequirementcTimes Coverage2008 27,742,541$ 16,210,992$ 11,531,549$ 2,364,358$ 4.88 2009 25,075,813 17,202,595 7,873,218 1,659,529 4.74 2010 28,773,833 20,620,871 8,152,962 1,698,662 4.80 2011 32,088,556 19,752,880 12,335,676 1,703,356 7.24 2012 30,218,985 20,244,240 9,974,745 1,702,074 5.86 2013 32,199,528 23,061,918 9,137,610 1,588,049 5.75 2014 30,887,999 23,754,848 7,133,151 1,585,519 4.50 2015 36,275,063 26,397,770 9,877,293 1,513,860 6.52 2016 36,509,983 29,287,984 7,221,999 1,173,576 6.15 2017 37,609,746 33,023,729 4,586,017 1,169,082 3.92 Notes:bIncludes operating expenses minus depreciation.cIncludes Principal and Interest.Water and Sewer System Revenue BondsaIncludes operating and non-operating revenues. In 2000-2008 Development fees were a part of the non-operating revenues (Exhibit 9). As of 2009 Development fees are no longer included as part of the non-operating revenues and therefore are not included in the times coverage calculation.
CITY OF ALLEN, TEXAS TABLE 13 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS (Unaudited) 112 Fiscal YearEstimated PopulationaPersonal Income Per Capita Personal IncomebSchool EnrollmentcUnemployment Rated2008 82,318 2,738,884,496$ 33,272$ 17,513 4.7%2009 83,929 3,025,808,308 36,052 18,091 7.5%2010 85,315 2,930,399,620 34,348 18,715 6.7%2011 86,633 3,030,508,973 34,981 19,387 7.2%2012 88,103 3,298,664,423 37,441 19,765 5.4%2013 89,705 3,709,032,635 41,347 20,295 5.2%2014 91,157 3,542,543,334 38,862 20,503 4.4%2015 93,261 3,940,277,250 42,250 20,755 3.2%2016 94,576 3,823,896,832 40,432 20,973 3.6%2017 99,852 4,007,759,724 40,137 21,054 3.1%Sources:aEstimated population provided by the City of Allen.cAllen Independent School District.dTexas Workforce Commission.bEstimated Per Capita Income provided by U.S. Census Bureau based on current income trends within the area.
CITY OF ALLEN, TEXAS TABLE 14 PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (Unaudited) 113 Employer EmployeesPercentage of Total City Employment Employer EmployeesPercentage of Total City EmploymentAllen Independent School District 2,733 7.84% Allen Independent School District 2,346 10.28%CVE Technology Group, Inc 2,100 6.02% Presbyterian Hospital 858 3.76%Experian Information Solutions 1,088 3.12% City of Allen 712 3.12%City of Allen 798 2.29% Graphic Converting 650 2.85%Texas Health Presbyterian Hospital 715 2.05% Experian 575 2.52%Frontier Communications 693 1.99% Sanmina SCI 525 2.30%Jack Henry & Associates 687 1.97% Celerity, Inc 340 1.49%PFSweb 425 1.22% Jack Henry & Associates 362 1.59%Andrew Distributing 420 1.20% Sage Telecommunications 285 1.25%Finisar 350 1.00% RCL Enterprises / ColorDynamics 185 0.81%Total 10,009 28.70% Total 6,838 29.97%Total Allen Daytime Employees 34,869 Total Allen Daytime Employees 22,814Source: Top ten employers and employee count provided by Allen Economic Development Corporation.20172008
CITY OF ALLEN, TEXAS TABLE 15 FULL – TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (Unaudited) 114 Function/Program2008200920102011201220132014201520162017General Government and Adminstration 52.75 55.50 55.50 56.00 57.50 62.00 64.00 67.00 70.50 72.50 Public Safety 251.00 255.00 255.00 257.50 276.50 284.50 286.00 295.00 299.00 299.00 Public Works 51.50 52.50 52.50 54.00 53.00 53.00 54.50 55.50 59.00 59.00 Culture and Recreational 162.14 162.92 213.87 215.36 214.86 214.50 212.27 215.71 221.31 221.31 Water and Sewer 60.00 60.50 60.50 63.50 63.50 66.50 68.00 69.00 70.00 74.00 Golf Course 34.00 34.08 34.08 32.49 23.63 32.54 32.54 33.64 33.64 33.64 Community Development 30.00 31.00 29.00 28.00 28.00 26.00 27.00 27.50 28.50 27.50 Risk Management 2.00 2.00 2.00 2.00 2.00 3.00 4.00 4.00 4.00 4.00 Economic Development 4.00 4.00 4.25 4.25 4.25 4.25 6.25 7.00 7.00 7.00 Total 647.39 657.50 706.70 713.10 723.24 746.29 754.56 774.35 792.95 797.95 Source:City Budget Book
CITY OF ALLEN, TEXAS TABLE 16 OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (Unaudited) 115 Function/Program2008200920102011201220132014201520162017Public Safety Police Number of Employees 154 157 157 160 172 174 175 183 185 185 Number of Violations (Citations) 21,462 18,251 17,504 17,925 13,812 13,902 19,943 14,000 13,645 18,778 Fire Number of Employees 97 98 98 98 104 110 111 112 114 114 Number of Fire/Other runs 2,144 2,045 1,362 1,468 1,325 1,377 1,541 1,622 1,822 1,886 Number of EMS runs 2,008 2,084 2,885 3,155 3,193 3,613 3,7033,812 4,162 4,210Development Services Streets paved (miles)5243414155 Building Permits Issueda5,287 4,014 4,689 4,993 5,192 6,013 9,538 7,549 7,022 7,116Cultural and Recreational Parks and Recreation Park maintained & operated per acre 5,191$ 5,017$ 4,887$ 5,393$ 5,117$ 3,827$ 4,022$ 4,083$ 4,092$ 4,668$ Participants in Leisure Service Programs 385,376 501,626 581,535 624,643 683,645 666,452 646,719 568,503 638,367 911,064 Rounds of Golfc39,886 43,527 37,857 38,775 0 33,615 45,546 39,723 44,478 47,010 Library Volumes in Collectionb135,879 131,048 127,665 122,522 124,471 124,226 128,501 132,380 138,041141,774Water and Sewer Number of Water Consumers 26,162 26,598 27,094 27,495 27,974 28,669 29,124 29,750 30,332 30,920 Average Daily Water Consumption (gallons) 13,131,057 14,019,701 14,542,980 17,115,783 14,336,000 14,479,000 11,863,621 13,284,000 14,472,000 15,107,156 Maximum Storage Capacity (million of gallons) 31.5 31.0 31.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0Sanitation Recyclables Collected (tons) 7,571 9,232 9,374 9,307 9,517 9,6679,920 10,015 10,108 10,578 Solid Waste Collected (tons) 52,699 52,457 53,660 56,233 53,96053,445 55,142 59,591 62,009 63,712Source:City DepartmentsNotes:aIncludes residential, commercial, and miscellaneous (e.g. pools, fences, and roof repair) permits.bInclude books and media.cGolf Course was closed for renovations in FY2012, and re-open on January 2013.Fiscal Year
CITY OF ALLEN, TEXAS TABLE 17 CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM FOR THE YEAR ENDED SEPTEMBER 30, 2017 (Unaudited) 116 Function/Program2008200920102011201220132014201520162017Public Safety Police Stations 1111111111 Police Patrol Units 23242323272727272831 Fire Stations 4444555555 Police Motorcycle Units4444444444Development Services Streets-Paved (miles) 312 314 318 321 325 326 330 331 336 341 Alleys-Paved (miles) 161 161 163 163 163 163 165 166 167 168Cultural and Recreational Parks (acres) 578 578 576 576 597 597 599 599 607 614 Playgrounds 32 32 32 32 32 32 32 32 32 32 Swimming Pools (outdoor)1111111111 Recreation Centers 1111111111 Senior Center 1111111111 Tennis Courts5555555555 Natatorium 1111111111 Visitor (Youth) Center 1111111111 Golf Course 1111111111 Event Center - - 11111111Water and Sewer Water Mains (miles) 439 445 452 456 461 467 471 474 481 494 Fire Hydrants 3,941 3,954 3,981 4,022 4,144 4,210 4,329 4,398 4,5604,675 Sanitary Sewers (miles) 334 336 339 342 346 352 354 356 361 370 Storm Sewer Lines (miles) 103 104 105 106 107 108 109 110 112 117Source: City DepartmentsFiscal Year