HomeMy WebLinkAboutComprehensive Annual Financial Report, 2016Af
Comprehensive Annual Financial Report for
the Fiscal Year Ended December 31, 2016
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1
COMPREHENSIVE
ANNUAL FINANCL4L REPORT
of the
CITY OF WEST UNIVERSITY
PLACE, TExAs
For the Year Ended
December 31, 2016
Officials Issuing Report:
M. Christopher Peifer
City Manager
Marie F. Kalka
Finance Director
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CITY OF WEST UNIVERSITY PLACE, TEXAS
TABLE OF CONTENTS
December 31, 2016
INTRODUCTORY SECTION Pale
Letter of Transmittal 3
Organizational Chart 7
Certificate of Achievement for Excellence in Financial Reporting 9
Principal Officials 10
FINANCI_AL SECTION
Independent Auditors' Report
13
Management's Discussion and Analysis (Required Supplementary
Information) 17
BASIC FINANCIAL STATEMENTS
Government -Wide Financial Statements
Statement of Net Position
Statement of Activities
Governmental Funds Financial Statements
29
30
Balance Sheet — Governmental Funds
33
Reconciliation of the Governmental Funds Balance Sheet to the Statement
of Net Position
35
Statement of Revenues, Expenditures, and Changes in Fund Balances —
Governmental Funds
37
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances of Governmental Funds to the Statement of Activities
39
Proprietary Funds Financial Statements
Statement of Net Position 40
Statement of Revenues, Expenses, and Changes in Fund Net Position 43
Statement of Cash Flows 44
Notes to Financial Statements
REQUIRED SUPPLEMENTARY INFORMATION
47
Schedule of Revenues, Expenditures, and Changes in Fund Balance —
Budget and Actual — General Fund 77
Schedule of Changes in Net Pension Liability and Related Ratios — Texas
Municipal Retirement System 79
Schedule of Contributions — Texas Municipal Retirement System 81
Schedule of Funding Progress — Post Employment Healthcare Benefits 83
CITY OF WEST UNIVERSITY PLACE, TEXAS
TABLE OF CONTENTS (Continued)
December 31, 2016
COMBINING STATEMENTS AND SCHEDULES
Schedule of Revenues, Expenditures, and Changes in Fund Balance —
112
Budget and Actual — Debt Service Fund
87
Combining Balance Sheet — Nonmajor Governmental Funds
90
Combining Statement of Revenues, Expenditures, and Changes in
120
Fund Balances — Nonmajor Governmental Funds
94
Schedule of Revenues, Expenditures, and Changes in Fund Balances —
124
Budget and Actual:
126
Nonmajor Special Revenue Funds:
128
Parks
98
Tree Replacement
99
Court Technology /Security
100
METRO Grant
101
Combining Statement of Net Position — Internal Service Funds
104
Combining Statement of Revenues, Expenses, and Changes in
139
Net Position — Internal Service Funds
106
Combining Statement of Cash Flows — Internal Service Funds
108
STATISTICAL SECTION
Net Position by Component
112
Changes in Net Position
114
Tax Revenues by Source, Governmental Activities
118
Fund Balances, Governmental Funds
120
Changes in Fund Balances, Governmental Funds
122
Tax Revenues by Source, Governmental Activities
124
Assessed Value and Actual Value of Taxable Property
126
Property Tax Rates — Direct and Overlapping Governments
128
Principal Property Taxpayers
131
Property Tax Levies and Collections
132
Ratios of Outstanding Debt by Type
134
Ratio of Net Bonded Debt to Assessed Value, Net Bonded Debt Per Capita, and
Assessed and Estimated Actual Value of Taxable Property
136
Direct and Overlapping Governmental Activities Debt
139
Legal Debt Margin Information
140
Pledged- Revenue Coverage
142
Demographic and Economic Statistics
144
Principal Employers
145
Full -Time Equivalent City Government Employees by Function
147
Operating Indicators by Function
148
Capital Asset Statistics by Function
150
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1
INTROD UCTORY SECTION
1
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2
The City of West University Place
A Aleighborhood City
May 31, 2017
The Honorable Mayor, City Council
Members, and Citizens of the
City of West University Place, Texas:
The Finance Department is pleased to submit the Comprehensive Annual Financial Report (CAFR) for
the City of West University Place, Texas (the "City") for the fiscal year ended December 31, 2016. This
report is published to provide the City Council (the "Council"), City staff, our citizens, our bondholders,
and other interested parties with detailed information concerning the financial condition and activities of
the City government. Management assumes responsibility for both the accuracy of the data and the
completeness and fairness of the presentation, including all disclosures.
We believe the data presented is accurate in all material respects and is organized in a manner designed to
present fairly the financial position and results of operations of the City as measured by the financial
activity of its various funds. All disclosures necessary to enable the reader to gain the maximum
understanding of the City's financial activities have been included.
Belt Harris Pechace1r , LLLP, Certified Public Accountants, have issued an unmodified ( "clean") opinion
on the City's financial statements for the year ended December 31, 2016. The independent auditors'
report is located at the front of the financial section of this report.
Management's Discussion and Analysis (MD&A) immediately follows the independent auditors' report
and provides a narrative introduction, overview, and analysis of the basic financial statements. The
MD &A complements this letter of transmittal and should be read in conjunction with it.
PROFILE OF THE GOVERNMENT
The City was incorporated in 1924 and became a Texas Home -Rule City in 1940. The City operates
under the Council- Manager form of municipal government. The Council is comprised of the Mayor and
four Council members, who are responsible for passing ordinances, adopting the budget, appointing board
and committee members, and appointing the City Manager. The Mayor and Council are elected on an at-
large, non - partisan basis for two -year terms. The City Manager is responsible for carrying out the
policies and ordinances of the Mayor and Council, overseeing the day -to -day operations of the City, and
appointing department heads.
The City provides a full range of municipal services. These services include police and fire protection,
municipal court, streets, drainage, leisure services, water and sewer, solid waste collection and disposal,
community development, and general administrative services. Based upon the criterion set forth in
3800 University Boulevard I West University Place, TX 77005 1 www.westutx.gov
generally accepted accounting principles, the following organizations are included within the City's
reporting entity:
Entity Method of Inclusion
Friends of West University Parks Fund Blended
LOCAL ECONOMY
The City encompasses a two square mile area located a few blocks south of U.S. Highway 59 (the
"Southwest Freeway ") and approximately five miles from downtown Houston, Texas. The City is an
integral part of the Houston metropolitan area and is completely surrounded by the cities of Houston,
Bellaire, and Southside Place. The City is primarily a residential area whose working inhabitants are
employed throughout the'Houston urban area. Rice University and the Texas Medical Center complex
are located about one mile east of the City limits in the City of Houston.
There is almost no vacant and/or undeveloped land in the City, so construction generally involves
rebuilding and remodeling. The City continues to enjoy a stable outlook, with property values at $6.19
billion, up 235 percent since 1999. Among reasons for this strength are the City's convenient proximities
to the Texas Medical Center, downtown Houston, the Rice Village and Rice University, as well as the
Galleria area.
The City's tax rate is one of the lowest in the Houston area and is projected to remain relatively stable
into the future due to projected stability in taxable values, the political stability of the community, and the
underlying strength in the Houston area economy. In the December 9, 2011 issue of the Houston
Business Journal, the City was ranked number one in a study of the best locations for quality of life in the
United States. In its April 2016 publication, The Economy at a Glance, the Greater Houston Partnership
said:
✓ "The Metro Houston area led the nation in population growth last year, adding more than
159,000 residents, according to recent estimates by the U.S. Census Bureau."
✓ "Since the April 2010 census, Houston has added more than 736,000 residents, the largest gain
of any metro area over that period."
✓ "Last year's population gains help to explain how Houston managed to eke out modest job
growth despite the drop in oil prices, the collapse in the rig count, and the wave of oil industry
layoffs."
The strength and continued diversity of the Metro Houston market area has a positive impact on the City.
The City's relative stability is the result of a desire for suburban families to live closer to work. The
City's low crime rate and hometown appeal have attracted many of these families. These factors have
contributed, and continue to contribute, to the relative stability of property values in the City.
The value of real property in the City is expected to increase in 2017. Expenditures are expected to
remain steady with considerations for the continued competitive pressure on personnel costs and potential
continued increases in the cost of employee health benefits.
LONG -TERM FINANCIAL PLANNING AND MAJOR INITIATIVES
The City Council has adopted a series of financial standards and policies for operating and debt
management. Management of the City has made every effort to comply with these standards and policies
and believes we are currently in compliance.
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The City has recognized the long -term financial implications of its pension and retiree health benefits.
Regarding pensions, in an effort to reduce the City's unfunded liability and cost of the Texas Municipal
Retirement System, the Council approved the elimination of the recurring cost -of- living adjustment for
employees and retirees. For retiree healthcare, at the November 17, 2008 Council meeting, Council
adopted a new personnel handbook, with modifications that included elimination of City funded
healthcare coverage for employees hired January 1, 2009 and thereafter.
The City issued debt in 2009 and 2010 for the purposes of reconstructing the City's recreation facilities
and constructing an expansion of the current City Hall for public safety improvements and enhancements.
The recreation facilities reconstruction was completed in 2010 and the public safety expansion project
was completed in 2011. The City issued debt in 2011 for the purpose of purchasing, constructing,
modifying, or replacing storm water detention and drainage facilities. Additionally, the City has refunded
several outstanding debt obligations in 2010, 2011, 2012, and 2013, resulting in total debt savings of
$3,853,214. At the December 14, 2015 Council meeting, the City Council authorized the issuance of
General Obligation Refunding Bonds, Series 2016 to refund the outstanding higher interest rate debt for
the Waterworks and Sewer System Revenue Refunding Bonds, Series 2005. This refunding will produce
an interest cost savings of approximately $181,000. As additional opportunities are presented, the City
will consider refunding additional outstanding debt obligations.
Capital expenditures are funded through annual allocations from the general fund, the water and sewer
fund, or the Congestion Mitigation/Traffic Management agreement funds received from the Metropolitan
Transit Authority of Harris County. The allocations are transferred to the capital reserve fund for general
capital projects, to the water and sewer capital reserve fund for water and sewer related projects, or to the
transportation/drainage fund for qualifying projects.
General capital projects planned for the 2017 budget include the continued construction of an animal
control shelter and several projects from 2016 that will continue into 2017.
Transportation/drainage projects planned for the 2017 budget include miscellaneous drainage
improvements to improve street drainage, repair damaged storm drains, and remove low spots from
roadways.
Additional water and sewer related projects planned in 2017 are continued lift station renovations 8 — 12;
Bissonnet water line replacement; and replacement of Waste Water Treatment Plant clarifiers, aeration
basin monitoring equipment, and perimeter security fencing.
These projects are listed specifically in the annual budget for each fiscal year in the capital project funds
section.
RELEVANT FINANCIAL POLICIES
The City's accounting records for general governmental operations are maintained on a modified accrual
basis, with the revenues being recorded when available and measurable and expenditures being recorded
when the services or goods are received and the liabilities are incurred. Accounting records for the City's
utilities and other proprietary activities are maintained on the accrual basis.
In developing and maintaining the City's accounting system, consideration is given to the adequacy of the
internal control structure. Internal accounting controls are designed to provide reasonable, but not
absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or
disposition and (2) the reliability of financial records for preparing the financial statements and
maintaining accountability for assets. The concept of reasonable assurance recognizes that: (1) the cost
of a control should not exceed the benefits likely to be derived and (2) the evaluation of costs and benefits
requires estimates and judgments by management. All internal control evaluations occur within the above
framework. We believe that the City's internal accounting controls adequately safeguard assets and
provide reasonable assurance of proper recording of financial transactions.
The City Charter (the "Charter ") establishes the fiscal year as January 1 through December 31. The
Charter requires the City Manager to submit a proposed budget and accompanying budget message to the
Council each year. The proposed budget is reviewed by the Council and is formally adopted by the
passage of a budget ordinance. The City Manager is authorized to transfer budgeted amounts between
line items within a department within any fund; however, any revisions that alter the total expenditures of
any fund or department must be approved by the Council.
Budgetary control has been established at the department level. Monthly financial reports for Council are
produced showing budget and actual revenues and expenditures. Individual line items are reviewed and
analyzed for budgetary compliance.
AWARDS AND ACKNOWLEDGEMENTS
�l
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for
Excellence in Financial Reporting to the City for its CAFR for the fiscal year ended December 31, 2015. (�
This was the 32d consecutive year the City has received this prestigious award. In order to be awarded a 1 J
Certificate of Achievement, a government must publish an easily readable and efficiently organized
CAFR that satisfies both generally accepted accounting principles and applicable legal requirements, t i
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.
The preparation of this report would not have been possible without the efficient and dedicated service of
the entire staff of the Finance Department. Appreciation is expressed to all City employees throughout
the organization, especially to those who were instrumental in the successful completion of this report.
Additionally, we thank the Mayor, Council, and City Manager for their support and for maintaining the
highest standards of professionalism in the management of the City's finances.
Respectfully submitted,
Marie F. Kalka
Finance Director
t.
CITY OF WEST UNIVERSITY PLACE, TEXAS
ORGANIZATIONAL CHART
December 31, 2016
MAYOR &
CITY COUNCIL
e tom en t
Fire
Department
Resources /Risk p Recreation Patrol Services I Accounting (Fire Prevention
Services
Information I �J Planning I H Maintenance I (Support
Technology n I I
nmunications Senior
blicOutreach) Operations Services
7
Treasury H I Fire Suppression
Municipal Court Emergency
I I Medical Services
Emergency
Management
Appointed Boards,
Commissions Judges C
City Attorney C
City Manager C
City Secretary
& Prosecutors
Administration Public Works Parks & P
Police Finance
Department D
Department R
Recreation D
Department D
Department
Department
Human D
Dev e
Fire
Department
Resources /Risk p Recreation Patrol Services I Accounting (Fire Prevention
Services
Information I �J Planning I H Maintenance I (Support
Technology n I I
nmunications Senior
blicOutreach) Operations Services
7
Treasury H I Fire Suppression
Municipal Court Emergency
I I Medical Services
Emergency
Management
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8
CITY OF WEST UNIVERSITY PLACE, TEXAS
CERTIFICATE OF ACHIEVEMENT FOR
EXCELLENCE INFINANCIAL REPORTING
19
Govem=nt Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of West University Place,
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 2015
*/40
Executive DisectoTICEO
0
CITY OF WEST UNIVERSITY PLACE, TEXAS
PRINCIPAL OFFICL4LS
December 31, 2016
City Officials Elective Position Term Expires
Susan Sample Mayor 05/2017
Bob Kelly Mayor Pro Tem 05/2017
Burt Ballanfant Council Member 05/2017
Brennan Reilly Council Member
Mardi Turner Council Member
Key Staff
Position
M. Christopher Peifer
City Manager
Thelma Gilliam
City Secretary
Wendy Standorf
Human Resources Director
Alan Petrov
City Attorney
Marie F. Kalka*
Finance Director
Robert Loper
Municipal Court Judge
Ken Walker
Police Chief
Aaron Taylor
Fire Chief
Susan White*
Parks and Recreation Director
Gary McFarland
Information Technology Director
*Employed with the City after December
31, 2016.
10
05/2017
05/2017
FINANCIAL SECTION
11
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12
INDEPENDENTAUDITORS'REPORT
To the Honorable Mayor and
City Council Members of the
City of West University Place, Texas:
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund, and the aggregate remaining fund information of the City of West University
Place, Texas (the "City "), as of and for the year ended December 31, 2016, and the related notes to the
financial statements, which collectively comprise the City's basic financial statements as listed in the table of
contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' 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. 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 auditors' judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly,
we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of significant accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
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aQust4a
3210 Bingk Rd., Ste. 300
HsRY1Re
P.O. Box 926
�n
100 Congms Ave., Sm. 2000
All Office °
w ,twexuditors.com
� Governmental
Audit Guality Center
Housmn,TX77055
BeIIvIDe,TX77418
Austln,TX7B701
info @=udimnsam
711 269.1171
711161 1171
517 191 02)9
711 261190 w
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, each major fund, and the aggregate
remaining fund information of the City as of December 31, 2016, 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.
Other Matters
Required Supplementay Information
Accounting principles generally accepted in the United States of America require that the Management's
Discussion and Analysis, budgetary comparison information, schedule of changes in net pension liability and
related ratios, schedule of contributions, and schedule of funding progress, identified as Required Supplementary
Information on the table of contents, 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 statements that collectively
comprise the City's basic financial statements. The introductory section, combining statements and schedules,
and statistical section are presented for purposes of additional analysis and are not required parts of the basic
financial statements.
The combining statements and schedules are the responsibility of management and were 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 combining statements and schedules are 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, accordingly, we do not express an opinion or provide any assurance on them
`W LTF.LARRISC7PECHACEK,LLLP
Belt Hams Pechacek, LLLP
Certified Public Accountants
Houston, Texas
May 31, 2017
14
MANAGEMENT'S DISCUSSION
AND ANALYSIS
15
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16
CITY OF WEST UNIVERSITY PLACE, TEXAS
MANAGEMENT'S DISCUSSIONAND ANALYSIS
For the Year Ended December 31, 2016
The purpose of the Management's Discussion and Analysis (MD&A) is to give the readers an objective and easily
readable analysis of the financial activities of the City of West University Place, Texas (the "City ") for the year
ending December 31, 2016. The analysis is based on currently ]mown facts, decisions, or economic conditions. It
presents short and long -term analysis of the City's activities, compares current year results with those of the prior
year, and discusses the positive and negative aspects of that comparison. Please read the MD &A in conjunction
with the transmittal letter at the front of this report and the City's basic financial statements, which follow this
section.
THE STRUCTURE OF OUR ANNUAL REPORT
Management's
Discussion and
Analysis
Independent
Auditors' Report
Summary
Components of the Financial Section
Basic Financial
Statements
Government -Wide
Financial
Statements
Fund Financial
Statements
Required
Supplementary
Information
Notes to the
Financial
Statements
Detail
The City's basic financial statements include (1) government -wide financial statements, (2) individual fund
financial statements, and (3) notes to the financial statements. This report also includes supplementary
information intended to famish additional detail to support the basic financial statements themselves.
Government -Wide Financial Statements
The government -wide financial statements report information for the City as a whole. These statements include
transactions and balances relating to all assets, including infrastructure capital assets. These statements are
designed to provide information about costs of services, operating results, and financial position of the City as an
economic entity. The Statement of Net Position and the Statement of Activities, which appear first in the City's
financial statements, report information on the City's activities that enable the reader to understand the financial
condition of the City. These statements are prepared using the accrual basis of accounting, which is similar to the
accounting used by most private- sector companies. All of the current year's revenues and expenses are taken into
account even if cash has not yet changed hands.
The Statement of Net Position presents information on all of the City's assets, liabilities, and deferred
outflows /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
17
CITY OF WEST UNIVERSITY PLACE, TEXAS
MANAGEMENT'S DISCUSSIONAND ANALYSIS (Continued)
For the Year Ended December 31, 2016
deteriorating. Other non - financial factors, such as the City's property tax base and the condition of the City's
infrastructure, need to be considered in order to assess the overall health of the City.
The Statement of Activities presents information showing how the City's net position changed during the most
recent year. All changes in net position are reported as soon as the underlying event giving rise to the change
occurs, regardless of the timing of related cash flows — the accrual method rather than modified accrual that is
used in the fund level statements.
The Statement of Net Position and the Statement of Activities divide the City into two classes of activities:
Governmental Activities — Most of the City's basic services are reported here including general
government (administration and finance), public safety (police and fire protection), public works
(streets and drainage), and public services (leisure services and community development).
Interest payments on the City's tax- supported debt are also reported here. Sales tax, property tax,
franchise taxes, municipal court fines, and permit fees finance most of these activities.
2. Business -Type Activities — Services involving a fee for those services are reported here. These
services include the City's water and sewer services and solid waste collection, as well as interest
payments on debt issued for water and wastewater improvements.
The Friends of West University Parks Fund, although legally separate, functions for all practical purposes as a
department of the City and, therefore, has been included as an integral part of the primary government.
The government -wide financial statements can be found after the MD &A.
FUND FINANCIAL STATEMENTS
Funds may be considered as operating companies of the parent corporation, which is the City. They are usually
segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate
compliance with finance related legal reporting requirements. The two categories of City funds are governmental
and proprietary.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in
the government -wide financial statements. However, unlike the government -wide financial statements,
governmental fund financial statements focus on near -term injlows and outflows of spendable resources, as well
as on balances of spendable resources available at the end of the year. Such information may be useful in
evaluating the City's near -term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is
useful to compare the information presented for governmental fiords with similar information presented for
governmental activities in the government -wide financial statements. By doing so, readers may better understand
the long -term impact of the City's near -term financing decisions. Both the governmental fund balance sheet and
the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation
to facilitate this comparison between governmental funds and governmental activities.
The City maintains 12 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
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CITY OF WEST UNIVERSITY PLACE, TEXAS
MANAGEMENT'S DISCUSSIONAND ANALYSIS (Continued)
For the Year Ended December 31, 2016
balances for the general fund and debt service fund, which are considered to be major funds for reporting
purposes.
The City adopts an annual appropriated budget for its general fund, debt service fund, and select special revenue
funds. Budgetary comparison schedules have been provided for these funds to demonstrate compliance with
these budgets.
Pronrietary Funds
The City maintains two types of proprietary 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 distribution, wastewater collectionftreatment, and solid waste operations. The proprietary
fund financial statements provide separate information for the water and sewer and solid waste funds. The basic
proprietary fund financial statements can be found in the basic financial statements of this report.
The City also uses internal service funds to account for its vehicle and equipment replacement services and for
expenses associated with health benefits and technology management. These internal service funds have been
included within governmental activities in the government -wide financial statements.
Notes to Financial Statements
The notes to the financial statements provide additional information that is essential to a full understanding of the
data provided in the government -wide and fund financial statements. The notes are the last section of the basic
financial statements.
Other Information
In addition to basic financial statements, MD &A, and accompanying notes, this report also presents certain
Required Supplementary Information (RSI). The RSI includes a budgetary comparison schedule for the general
fund, schedule of changes in net pension liability and related ratios for the Texas Municipal Retirement System
(TMRS), schedule of contributions for TMRS, and schedule of funding progress for other post employment
healthcare benefits. RSI can be found after the notes to the basic financial statements.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of the City's financial position. Assets and
deferred outflows of resources exceed liabilities and deferred inflows of resources by $75,636,015 as of
December 31, 2016. This compares with $71,137,682 from the prior fiscal year. The largest portion of the City's
net position, 84 percent, reflects its investments in capital assets (e.g., land, building, equipment, improvements,
construction in progress, and infrastructure), less any outstanding debt used to acquire those assets. The City uses
these capital assets to provide services to citizens; consequently, these assets are not available for future spending.
Although the City's investment in its capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources, since the assets themselves cannot be
used to liquidate these liabilities.
19
CITY OF WEST UNIVERSITY PLACE, TEXAS
MANAGEMENT'S DISCUSSIONAND ANALYSIS (Continued)
For the Year Ended December 31, 2016
Statement of Net Position:
The following table reflects the condensed Statement of Net Position:
Governmental
Business -Type
I'
Total
Primary l
of Resources 18,580,835 18,062;247
18,580,835 18,062,247
Net Position:
Net investment in LJ
capital assets 42,663,233 41,205,468 21,128,592 19,314,692 63,791,825 60,520,160
Restricted 2,543,238 2,246,833 - 725,000 2,543,238 2,971,833
Unrestricted 7,093,032 6,835,390 2,207,920 810,299 9,300,952 7,645,689 LJ
Total Net Position $ 52,299,503 $ 50,287,691 $ 23,336,512 $ 20,849,991 $ 75,636,015 $ 71,137,682 n
A portion of the City's net position, $2,543,238 or three percent, represents resources that are subject to external 'J
restriction on how they may be used. The remaining balance of unrestricted net position, $9,300,952 or 12
percent, may be used to meet the City's ongoing obligation to citizens and creditors.
The City's total net position increased by $4,498,333 during the current fiscal year, an increase of six percent in
comparison to the prior year. This included an increase of $2,011,812 in the governmental activities, which 1
primarily was a result of an increase in revenues related to ad valorem taxes and other revenues. The increase in J
business -type activities of $2,486,521 is primarily a result of an increase in revenue for charges for services, along
with a decrease in expenses for water and sewer and solid waste during the fiscal year.
As of December 31, 2016, the City reported deferred outflows of resources related to its pension plan of L
$4,800,802, which is an increase of $3,044,607 from the prior fiscal year. In addition, the City reported a net
pension liability of $7,381,583, which is part of the $63,356,894 reported in long -term liabilities.
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20 L
Activities
Activities
Government
1016
2015
2016
2015
2016
2015
Current and other assets
$ 34,425,081 $
32,278,475 $
3,912,822 $
2,711,765
$ 38,337,903
lJ
$ 34,990,240 L 1
Capital assets, net
94,968,043
97,561,486
21,128,592
22,360,511
116,096,635
119,921,997
Total Assets
129,393,124
129,839,961
25,041,414
25,072,276
154,434,538
154,912,237 n
Deferred charge on refunding
1,389,271
1,619,205
-
49,114
1,389,271
1,668,319 u
Deferred outflows - pension
4,166,855
1,524,289
633,947
231,906
4,800,802
1,756,195
Total Deferred Outflows
of Resources
5,556,126
3,143,494
633,947
281,020
6,190,073
3,424,514
Lon -term liabilities
62,058,785
62,793,106
1,298,109
3,750,544
63,356,894
66,543,650
Other liabilities
2,010,127
1,840,411
1,040,740
752,761
3,050,867
2,593,172
Total Liabilities
64,068,912
64,633,517
2,338,849
4,503,305
66,407,761
69,136,822
Property taxes
18,580,835
18,062,247
-
-
18,580,835
18,062,247
Total Deferred Inflows
of Resources 18,580,835 18,062;247
18,580,835 18,062,247
Net Position:
Net investment in LJ
capital assets 42,663,233 41,205,468 21,128,592 19,314,692 63,791,825 60,520,160
Restricted 2,543,238 2,246,833 - 725,000 2,543,238 2,971,833
Unrestricted 7,093,032 6,835,390 2,207,920 810,299 9,300,952 7,645,689 LJ
Total Net Position $ 52,299,503 $ 50,287,691 $ 23,336,512 $ 20,849,991 $ 75,636,015 $ 71,137,682 n
A portion of the City's net position, $2,543,238 or three percent, represents resources that are subject to external 'J
restriction on how they may be used. The remaining balance of unrestricted net position, $9,300,952 or 12
percent, may be used to meet the City's ongoing obligation to citizens and creditors.
The City's total net position increased by $4,498,333 during the current fiscal year, an increase of six percent in
comparison to the prior year. This included an increase of $2,011,812 in the governmental activities, which 1
primarily was a result of an increase in revenues related to ad valorem taxes and other revenues. The increase in J
business -type activities of $2,486,521 is primarily a result of an increase in revenue for charges for services, along
with a decrease in expenses for water and sewer and solid waste during the fiscal year.
As of December 31, 2016, the City reported deferred outflows of resources related to its pension plan of L
$4,800,802, which is an increase of $3,044,607 from the prior fiscal year. In addition, the City reported a net
pension liability of $7,381,583, which is part of the $63,356,894 reported in long -term liabilities.
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20 L
CITY OF WEST UNIVERSITY PLACE, TEXAS
MANAGEMENT'S DISCUSSIONAND ANALYSIS (Continued)
For the Year Ended December 31, 2016
7 Statement of Activities:
-1 The following table provides a summary of the City's changes in net position:
J
Governmental
Activities
Business -Type
Activities
J
1
Expenses
General government
Public safety
Public works
Public services
Interest and fiscal agent
fees on long -term debt
Water and sewer
Solid waste
2015
S 8,397,996
Total
Primary
Government
2016 2015
$ 12,330,321 $ 11,869,117
546,599 558,668
579,630 554,244
18,106,906 17,504,551
1,051,361
2016
2015
2016
J Revenues
17,625
15,515 132,195
105,485
Program revenues:
398,199
3,988 40,279
28,064
1 Charges for services
$ 3,336,661
S 3,471,121
$ 8,993,660
j Operating grants and contributions
546,599
558,668
-
Capital grants and contributions
579,630
554,244
8,150,632
General revenues:
1,277,986 1,221,960 1,277,986
1,221,960
Ad valorem taxes
18,106,906
17,504,551
30,430,057
Sales taxes
1,051,361
1,117,336
Franchise taxes
1,144,256
1,204,795
Other taxes
15,955
17,625
Investment earnings
116,798
89,970
15,397
l Other revenues
735,113
398,199
-
JCain on sale of capital asset
40,279
24,076
Total Revenues
25,673,558
24,940,585
9,009,057
J
1
Expenses
General government
Public safety
Public works
Public services
Interest and fiscal agent
fees on long -term debt
Water and sewer
Solid waste
2015
S 8,397,996
Total
Primary
Government
2016 2015
$ 12,330,321 $ 11,869,117
546,599 558,668
579,630 554,244
18,106,906 17,504,551
1,051,361
1,117,336
1,144,256
1,204,795
- 15,955
17,625
15,515 132,195
105,485
- 735,113
398,199
3,988 40,279
28,064
8,417,499 34,682,615
33,358,084
3,871,442
3,948,145
- 3,871,442
3,948,145
7,563,086
6,773,509
- - 7,563,086
6,773,509
4,603,321
4,009,850
- - 4,603,321
4,009,850
4,518,987
4,560,152
- - 4,518,987
4,560,152
1,767,154
1,765,809
- - 1,767,154
1,765,809
-
-
6,582,306 8,150,632 6,582,306
8,150,632
1,277,986 1,221,960 1,277,986
1,221,960
Total Expenses 22,323,990
21,057,465
7,860,292 9,372,592 30,184,282
30,430,057
Increase (Decrease) in Net Position
Before Transfers 3,349,568 3,883,120 1,148,765 (955,093) 4,498,333
2,928,027
Transfers in (out) (1,337,756)
1,943,800
1,337,756
(1,943,800) - -
Change in Net Position 2,011,812
5,826,920
2,486,521
(2,898,893) 4,498,333 2,928,027
Beginning net position 50,287,691
44,460,771
20,849,991
23,748,884 71,137,682 68,209,655
Ending Net Position $ 52,299,503 $ 50,287,691 $ 23,336,512 $ 20,849,991 $ 75,636,015 $ 71,137,682
21
CITY OF WEST UNIVERSITY PLACE, TEXAS
MANAGEMENT'S DISCUSSIONAND ANALYSIS (Continued)
For the Year Ended December 31, 2016
Graphic presentations of selected data from the summary tables follow to assist in the analysis of the City's
activities.
Investment
Governmental Revenues
$7,000,000
earnings
Other revenues Gam on sale of
Charges for
0.43%
2.96% lcapital assets
services
■ Operating Revenues
/ 0.16%
13.00%
Franchise and
�
83,000,000
other taxes
$2,000,000
Operating
4.52%
grants and
contributions
Sales taxes
with $24,940,585 in the prior year.
.13%
2
4,09%
Capital grants
and
contributions
226%
Ad valor
taxes
70.53%
Interest and
fiscal
7.
Public servit
20.24%
Public
20.62%
Governmental Expenses
General
— vemment
17.34%
Business -Type Activities
Public safety
33.88%
58,000,000
$7,000,000
$6,000,000
55,000,000
■ Operating Revenues
S4,000,000
■ Operating Expenses
83,000,000
$2,000,000
$1,000,000
Water and sewer Solid Waste
For the year ended December 31, 2016, revenues from governmental activities totaled $25,673,558, compared
with $24,940,585 in the prior year.
This increase of $732,973 occurred primarily as the result of $602,355 in
22
CITY OF WEST UNIVERSITY PLACE, TEXAS
MANAGEMENT'S DISCUSSIONAND ANALYSIS (Continued)
For the Year Ended December 31, 2016
additional property tax revenue, as well as an increase of $336,914 in other revenue. Increased property tax
valuations throughout the City attributed to the increase in property tax revenue. The increase in other revenue is
due to contribution revenue received for improvements of the City's parks.
For the year ended December 31, 2016, expenses for governmental activities totaled $22,323,990, an increase of
$1,266,525 or six percent from last year. The overall increase is primarily due to increases in public safety and
public works expenses. Public safety expenses increased primarily due to higher costs related to salaries and
wages. The increase in public works expenses can be attributed to planned costs associated with transfer of funds
for purposes of equipment maintenance and replacement.
Charges for services for business -type activities increased $595,664, which is an increase of seven percent.
Operating expenses for business -type activities decreased by $1,512,300. This decrease is primarily due to a
decrease in professional service expenses during the year related to new meter readings, as well as decreased
repair and maintenance costs.
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
As noted earlier, fund accounting is used to demonstrate and ensure compliance with finance- related legal
requirements.
Governmental Funds — The focus of the City's governmental funds is to provide information on near -term
inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's
financing requirements. In particular, unassigned fund balance may serve as a useful measure of the City's net
resources available for spending at the end of the year.
The City's governmental funds reflect a combined fund balance of $10,122,463. Of this, $181,788 is
nonspendable, $912,718 is restricted for debt service, $45,494 is restricted for enabling legislation, $1,093,415 is
restricted for City parks, $232,077 is restricted for METRO, $19,774 is restricted for special projects, $239,760 is
restricted for governmental programming, $210,000 is assigned for City operations, $224,775 is assigned for tree
replacement, and $1,654,732 is assigned to capital projects funds,
There was a decrease in the combined fund balance of $333,016 compared to the prior year. This is largely
attributable to increases in expenditures for public safety, public works, public services, and debt service.
The general fund is the chief operating fund of the City. At the end of the current year, unassigned fund balance
of the general fund was $5,307,930, while total fund balance reached $5,937,878. As a measure of the general
fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund
expenditures. Unassigned fund balance represents 31 percent of total general fund expenditures, while total fund
balance represents 35 percent of the total general fund expenditures. The general fund demonstrated an overall
decrease of $1,186,806 primarily due to increases in expenses for public safety, public works, and public services.
The debt service fund has a total fund balance of $912,718, all of which is restricted for the payment of debt
service. Expenditures exceeded revenues by $971,302, with an overall net increase in fund balance after other
funding sources for the year of $346,442. This increase in fund balance is due to transfers in from the water and
sewer fund for its portion of debt related to governmental activities, as well as the issuance of debt.
Proprietary Funds — The City's proprietary funds financial statements provide the same type of information
found in the government -wide financial statements, but in more detail.
23
CITY OF WEST UNIVERSITY PLACE, TEXAS
MANAGEMENT'S DISCUSSIONAND ANALYSIS (Continued)
For the Year Ended December 31, 2016
GENERAL FUND BUDGETARY HIGHLIGHTS
There had been a planned decrease in budgeted fund balance in the amount of $1,449,337 in the general fund.
However, fund balance decreased by $1,186,806, resulting in a positive variance of $262,531 from actual over
budgeted as amended.
Actual general fund revenues were greater than the amended budgeted revenues by $336,224 during 2016. This
net variance includes the positive variances of $492,834 for charges for services and $26,715 for other revenues.
Actual expenditures were less than budgeted amounts in total by $965,531 for the fiscal year. This net variance is
due to positive variances of $597,121 for general government, $43,854 for public safety, $203,311 for public
works, and $121,245 for public services.
CAPITAL ASSETS
At the end of fiscal year 2016, the City's governmental and business -type activities funds had invested
$94,968,043 and $21,128,592, respectively, in a variety of capital assets and infrastructure (net of accumulated
depreciation). This represents net decreases of $2,593,443 and $1,231,919, respectively.
Major capital assets events during the year included the following:
• Completion of construction/improvements of Colonial Park for $324,408
• Purchase of four vehicles for $103,060
• Belt filter replacement project of $349,989
• Construction in progress for various City projects in the amount of $227,998
More detailed information about the City's capital assets is presented in note III.C. to the financial statements.
LONG -TERM DEBT
At the end of the current year, the City had total bonds and certificates of obligation outstanding of $52,905,000.
Of this amount, $42,740,000 was general obligation debt and $10,165,000 was certificates of obligation debt.
During the year, the City had a net decrease in long -term debt of $3,186,756.
More detailed information about the City's long -term liabilities is presented in note IH.D. to the financial
statements.
Current underlying ratings on debt issues are as follows:
General obligation bonds
24
Standard and
Poor's
.AAA
CITY OF WEST UNIVERSITY PLACE, TEXAS
MANAGEMENT 'SDISCUSSIONANDANALYSIS (Continued)
For the Year Ended December 31, 2016
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
The City Council approved a $37.43 million operating budget for fiscal year 2017. The budget has a decrease in
the property tax rate in the amount of $0.015 per $100 of valuation. The ability to lower the current tax rate was
made possible by the increase in appraised market values for the City. The City's tax rate is one of the lowest in
the Houston area and is projected to remain relatively stable into the future due to projected stability in taxable
values, the political stability of the community, and the underlying strength in the Houston area economy.
Growth in taxable assessed values is over 45 percent in the last five years (since 2011), with about 16 percent
attributable to the growth from 2014 to 2015 and ten percent attributable to the growth from 2015 to 2016. For
the immediate future, the rate of growth is expected to remain steady with reconstruction continuing to impact the
value of property well into the future, as well as the recapture of value that has been capped at ten percent per
year.
The City has carefully monitored the performance of utility services and increased rates as needed for the water
and sewer fund. As of January 2016, the water and sewer fund has no direct debt. General obligation refunding
bonds were issued in 2010 and 2016 to refund all the outstanding revenue bonds for substantial interest rate
savings. Funds are transferred from the water and sewer fund to the debt service fund to cover the annual debt
service requirement attributable to these refunded bonds. The adopted fiscal year 2017 budget maintains the 2016
water and sewer rates; however, the results of the 2016 water and sewer rate study will be finalized and may
impact current rates.
In the December 9, 2011 issue of the Houston Business Journal, the City was ranked number one in a study of the
best locations for quality of life in the United States. In its April 2016 publication, The Economy at a Glance, the
Greater Houston Partnership said:
"The Metro Houston area led the nation in population growth last year, adding more than 159,000
residents, according to recent estimates by the U.S. Census Bureau."
✓ "Since the April 2010 census, Houston has added more than 736,000 residents, the largest gain of any
metro area over that period."
✓ "Last year's population gains help to explain how Houston managed to eke out modest job growth despite
the drop in oil prices, the collapse in the rig count, and the wave of oil industry layoffs."
The strength and continued diversity of the Metro Houston market area has a positive impact on the City.
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This financial report is designed to provide a general overview of the City's finances. Questions concerning this
report or requests for additional financial information should be directed to Mane F. Falka, Finance Director,
3800 University Boulevard, West University Place, Texas, 77005; telephone 713.662.5816; or for general City
information, visit the City's website at www.westutx.eov.
25
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26
BASIC FINANCIAL STATEMENTS
27
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28
I
CITY OF WEST UNIVERSITY PLACE, TEXAS
STATEMENT OF NET POSITION
I December 31, 2016
1
1
J
Assets
Cash and equity in pooled cash and investments
Cash with fiscal agent
Cash and cash equivalents
Investments
Receivables, net of allowances
Inventory
Prepaids
Capital assets:
Nondepreciable capital assets
Depreciable capital assets, net
Governmental
Activities
mary Government
Business -Type
Activities Total
$ 19,330,112 $
2,503,175 $
21,833,287
1,469,501
-
1,469,501
598,254
598,254
455,045
-
455,045
12,163,079
1,409,647
13,572,726
17,131
-
17,131
391,959
-
391,959
6,526,040
590,295
7,116,335
88,442,003
20,538,297
108,980,300
Total Assets 129,393,124 25,041,414 154,434,538
Deferred Outflows of Resources
Deferred charge on refunding 1,389,271 - 1,389,271
Deferred outflows - pension 4,166,855 633,947 4,800,802
Total Deferred Outflows of Resources 5,556,126 633,947 6,190,073
Liabilities
Accounts payable and accrued liabilities
Accrued interest payable
Noncurrent liabilities:
Due within one year
Due in more than one year
1,387,395 1,040,740 2,428,135
622,732 - 622,732
8,518,077 145,232 8,663,309
53,540,708 1,152,877 54,693,585
Total Liabilities 64,068,912 2,338,849 66,407,761
Deferred Inflows of Resources
Property taxes 18,580,835 18,580,835
Total Deferred Inflows of Resources 18,580,835 18,580,835
Net Position
Net investment in capital assets
Restricted for:
JDebt service
Enabling legislation
City parks
METRO
Special projects
Governmental programming
Unrestricted
See Notes to Financial Statements,
42,663,233 21,128,592 63,791,825
912,718 - 912,718
45,494 - 45,494
1,093,415 - 1,093,415
232,077 - 232,077
19,774 - 19,774
239,760 - 239,760
7,093,032 2,207,920 9,300,952
Total Net Position $ 52,299,503 $ 23,336,512 $ 75,636,015
29
CITY OF WEST UNIVERSITY PLACE, TEXAS
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2016
See Notes to Financial Statements.
General Revenues:
Ad valorem tares
Sales taxes
Franchise taxes
Other taxes
Investment earnings
Other revenues
Gain on sale of capital assets
Transfers
Beginning net position
30
Total General Revenues and Transfers
Change in Net Position
Ending Net Position
Program Revenues
Operating
Capital
Charges for
Grants and
Grants and
Functions/Programs
Expenses
Services
Contributions
Contributions
Primary Government
Governmental Activities
General government
S 3,871,442
$ -
$ 546,599
$
Public safety
7,563,086
142,624
-
Public works
4,603,321
555,453
-
Public services
4,518,987
2,638,584
579,630
Interest on long -term debt
1,767,154
-
-
-
Total Governmental Activities
22,323,990
3,336,661
546,599
579,630
Business -Type Activities
Water and sewer
6,582,306
7,172,469
Solid waste
1,277,986
1,821,191
Total Business -Type Activities
7,860,292
8,993,660
-
-
Total Primary Government
$ 30,184,282
$ 12,330,321
$ 546,599
$ 579,630
See Notes to Financial Statements.
General Revenues:
Ad valorem tares
Sales taxes
Franchise taxes
Other taxes
Investment earnings
Other revenues
Gain on sale of capital assets
Transfers
Beginning net position
30
Total General Revenues and Transfers
Change in Net Position
Ending Net Position
�I
J
J
J
J
Net Revenue (Expense) and Changes in Net Position
Primary Government
Governmental Business -Type
Activities Activities Total
$ (3,324,843) $
(7,420,462)
(4,047,868)
(1,300,773)
(1,767,154) _
(17,861,100)
$ (3,324,843)
(7,420,462)
(4,047,868)
(1,300,773)
(1,767,154)
(17,861,100)
31
590,163
590,163
543,205
543,205
1,133,368
1,133,368
(17,861,100)
1,133,368
(16,727,732)
18,106,906
-
18,106,906
1,051,361
-
1,051,361
1,144,256
-
1,144,256
15,955
-
15,955
116,798
15,397
132,195
735,113
-
735,113
40,279
-
40,279
(1,337,756)
1,337,756
-
19,872,912
1,353,153
21,226,065
2,011,812
2,486,521
4,498,333
50,287,691
20,849,991
71,137,682
$ 52,299,503 $
23,336,512
$ 75,636,015
31
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32
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CITY OF WEST UNIVERSITY PLACE, TEXAS
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2016
Debt Nonmajor
General Service Governmental
Total
Governmental
Funds
Assets
912,718
- 45,494
45,494
- 1,093,415
Current assets:
- 232,077
232,077
- - 19,774
19,774
Cash and equity in pooled cash
239,760
and investments $
9,811,200 $
3,361,479 $
2,198,644
$ 15,371,323
Cash with fiscal agent
860,781
608,720
-
1,469,501
Cash and cash equivalents
-
-
598,254
598,254
Investments
-
-
455,045
455,045
Receivables, net
7,189,223
4,816,616
157,240
12,163,079
Due from other funds
20,755
-
-
20,755
Inventory
15,531
1,600
17,131
Prepaid costs
164,657
-
-
164,657
Total Assets $
18,062,147 $
8,786,815 $
3,410,783
$ 30,259,745
Liabilities
Accounts payable and accrued
liabilities $ 1,052,298 $ 4,750
Due to other funds - -
Total Liabilities 1,052,298 4,750
Deferred Inflow of Resources
Unavailable revenue - property taxes 11,071,971 7,869,347
Fund Balances
Nonspendable:
Inventory
Prepaid items
Restricted for.
Debt service
Enabling legislation
City parks
METRO
Special projects
Governmental programming
Assigned to:
City operations
Tree replacement
Capital projects funds
Unassigned:
15,531
164,657
$ 118,161 $ 1,175,209
20,755 20,755
138,916 1,195,964
- 18,941,318
- 15,531
1,600 166,257
912,718 -
912,718
- 45,494
45,494
- 1,093,415
1,093,415
- 232,077
232,077
- - 19,774
19,774
239,760 - -
239,760
210,000
- 210,000
224,775 224,775
1,654,732 1,654,732
General fund 5,307,930 5,307,930
i Total Fund Balances 5,937,878 912,718 3,271,867 10,122,463
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $ 18,062,147 $ 8,786,815 $ 3,410,783 $ 30,259,745
See Notes to Financial Statements.
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34
CITY OF WEST UNIVERSITY PLACE, TEXAS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
December 31, 2016
Total fund balances for governmental funds
Amounts reported for governmental activities in the Statement of Net Position are
different, because:
Capital assets used in governmental activities are not financial resources and,
therefore, are not reported in the funds.
Capital assets, nondepreciable 6,526,040
Capital assets, net depreciable 88,442,003
Other long -term assets are not available to pay for current period expenditures
J
J and, therefore, are deferred in the funds.
Internal service funds are used by management to charge the costs of certain capital
assets to individual funds. The assets and liabilities of the internal service funds are
included in the governmental activities in the Statement of Net Position.
Internal service funds' net position
4,781,694
Capital assets accounted for in capital assets used in governmental activities
(993,015)
Compensated absences accounted for in long -term liabilities
54,559
Deferred outflows - pension accounted for in governmental activities
(182,796)
Net pension liability accounted for in long -term liabilities
281,063
1 Net OPEN obligation accounted for in long -term liabilities
32,400
J
Long -term liabilities are not due and payable in the current period and, therefore, are
not reported in the funds.
Accrued interest
(622,732)
Deferred charge on refunding
1,389,271
Deferred outflows - pension
4,166,855
Noncurrent liabilities due in one year
(8,518,077)
Noncurrent liabilities due in more than one year
(53,540,708)
A Net Position of Governmental Activities
See Notes to Financial Statements.
35
$ 10,122,463
94,968,043
360,483
3,973,905
(57,125,391)
$ 52,299,503
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36
J
1
1
i
CITY OF WEST UNIVERSITY PLACE, TEXAS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES INFUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2016
Revenues
Ad valorem taxes
Sales taxes
Franchise taxes
Other taxes
Permits, licenses, and fees
Fines and forfeitures
Charges for services
Intergovernmental
Contributions
Investment earnings
Other revenues
Total
Debt Nonmajor Governmental
General Service Governmental Funds
$ 9,967,606 $
1,051,361
1,144,256
15,955
482,362
134,770
2,638,584
8,084,618 $
79,585 5,675
382,471 -
Total Revenues 15,896,950 8,090,293
- $
18,052,224
-
1,051,361
-
1,144,256
-
15,955
73,091
555,453
7,854
142,624
-
2,638,584
546,599
546,599
579,630
579,630
16,581
101,841
352,642 735,113
1,576,397 25,563,640
Expenditures
514,500
1,193,563
1,325,000
3,033,063
Current:
(500,000)
(3,045,819)
(825,000)
(4,370,819)
General government
2,919,287
-
539,611
3,458,898
Public safety
7,626,200
-
-
7,626,200
Public works
3,013,390
-
10,142
3,023,532
Public services
3,545,655
-
686,304
4,231,959
Capital outlay
-
-
332,992
332,992
Debt service:
5,937,878 $
912,718 $
3,271,867 $
10,122,463
Principal
-
7,370,000
-
7,370,000
Interest and fiscal agent fees
-
1,544,984
-
1,544,984
Bond issuance costs
-
43,923
-
43,923
Payment to refunded bond escrow agent
-
71,785
-
71,785
Advance refunding escrow
-
30,903
-
30,903
Total Expenditures
17,104,532
9,061,595
1,569,049
27,735,176
Excess (Deficiency) of Revenues
Over (Under) Expenditures
(1,207,582)
(971,302)
7,348
(2,171,536)
Other Financine Sources (Uses
Transfers in
514,500
1,193,563
1,325,000
3,033,063
Transfers (out)
(500,000)
(3,045,819)
(825,000)
(4,370,819)
Sale of capital assets
6,276
-
6,276
Debt issued
-
3,170,000
3,170,000
Total Other Financing Sources
20,776
1,317,744
500,000
1,838,520
Net Change in Fund Balances
(1,186,806)
346,442
507,348
(333,016)
Beginning fund balances
7,124,684
566,276
2,764,519
10,455,479
Ending Fund Balances $
5,937,878 $
912,718 $
3,271,867 $
10,122,463
See Notes to Financial Statements.
37
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38
CITY OF WEST UNIVERSITY PLACE, TEXAS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES INFUND BALANCES OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2016
Net changes in fund balances - total governmental funds $ (333,016)
Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement of
Activities, the cost of those assets is allocated over their estimated useful lives and reported as
depreciation expense.
Capital outlay 735,747
Disposal of capital assets (25,115)
Depreciation expense (3,280,777)
The issuance of long -term debt (e.g., bonds, certificates of obligation) provides current financial
resources to governmental funds, while the repayment of the principal of long -term debt
consumes the current financial resources of governmental funds. Neither transaction,
however, has any effect on net position. Also, governmental funds report the effect of
premiums, discounts, and similar items when debt is first issued; whereas, these
amounts are deferred and amortized in the Statement of Activities.
Principal payments 7,370,000
Amortization of premium 124,075
Change in deferred charge on refunding (229,934)
Bonds issued (3,170,000)
Accrued interest 30,300
Revenues in the Statement of Activities that do not provide current financial resources
are not reported as revenue in the funds. 54,682
Some expenses reported in the Statement of Activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental funds.
Compensated absenses 14,624
OPEB obligation (63,268)
Change in net pension liability (3,381,915)
Change in deferred outflows - pension 2,526,639
Internal service funds are used by management to charge the costs of certain capital assets
to individual funds. The net revenue is reported with governmental activities. 1,639,770
See Notes to Financial Statements.
Change in Net Position of Governmental Activities $ 2,011,812
39
CITY OF WEST UNIVERSITY PLACE, TEXAS
STATEMENT OF NET POSITION (Page 1 of 2)
PROPRIETARYFUNDS
December 31, 2016
HIJ
Business -Type Activities - Enterprise Funds
Governmental
Activities
Water and
Solid
Internal
Sewer
Waste
Total Funds
Service
Assets
Current assets:
Cash and equity in pooled cash
and investments
$ 2,361,549 $
141,626
S 2,503,175
S 3,958,789
Accounts receivable, net
1,103,929
305,718
1,409,647
-
Prepaid costs
-
-
-
227,3 02
Total Current Assets
3,465,478
447,344
3,912,822
4,186,091
Noncurrent assets:
Capital assets:
Land
193,875
-
193,875
-
Construction in progess
396,420
-
396,420
Buildings and improvements
459,625
-
459,625
-
Machinery and equipment
2,116,774
-
2,116,774
2,978,353
Water and sewer systems
55,809,838
-
55,809,838
-
Less: accumulated depreciation
(37,847.940)
-
(37,847,940)
(1,985,338)
Total Capital Assets, Net of
Accumulated Depreciation
21,128,592
-
21,128,592
993,015
Total Noncurrent Assets
21,128,592
-
21,128,592
993,015
Total Assets
$ 24,594,070 $
447,344
$ 25,041,414
$ 5,179,106
HIJ
CITY OF WEST UNIVERSITY PLACE, TEXAS
l STATEMENT OF NET POSITION (Page 2 of 2)
J PROPRIETARYFUNDS
December 31, 2016
JI Business -Type Activities - Enterprise Funds
J
Water and Solid
Governmental
Activities
Internal
ISewer Waste Total Service
Deferred Outflows of Resources
l Deferred outflows - pension $ 471,175 $ 162,772 $ 633,947 $ 182,796
J Total Deferred Outflows of Resources 471,175 162,772 633,947 182,796
J
Liabilities
Current liabilities:
Accounts payable and accrued liabilities 956,057 84,683 1,040,740
Compensated absences 129,679 15,553 145,232
212,186
Total Current Liabilities
1,085,736
100,236
1,185,972
212,186
Noncurrent liabilities:
Compensated absences
14,409
1,728
16,137
54,559
Net pension liability
724,466
250,274
974,740
281,063
Net OPEB obligation
113,400
48,600
162,000
32,400
Total Noncurrent Liabilities
852,275
300,602
1,152,877
368,022
Total Liabilities
1,938,011
400,838
2,338,849
580,208
j Net Position
J Net investment in capital assets 21,128,592 21,128,592 993,015
Unrestricted 1,998,642 209,278 2,207,920 3,788,679
] Total Net Position $ 23,127,234 $ 209,278 $ 23,336,512 $ 4,781,694
ISee Notes to Financial Statements.
1 41
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42
CITY OF WEST UNIVERSITY PLACE, TEXAS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES INFUND NET POSITION
PROPRIETARYFUNDS
For the Year Ended December 31, 2016
t
W,
Business -Type
Activities - Enterprise Funds
-
Governmental
Activities
Water and
Solid
Internal
Sewer
Waste
Total Funds
Service
O_yeratine Revenues
Charges for sales and services
$ 7,172,469
$ 1,819,125
$ 8,991,594
$ 5,394,628
Other revenues
2,066
2,066
16,198
1 Total Operating Revenues
7,172,469
1,821,191
8,993,660
5,410,826
Operatine Expenses
1 Costs of sales and services
3,140,543
827,552
3,968,095
2,898,933
Personnel
1,501,779
450,434
1,952,213
558,699
J Repairs and maintenance
-
-
-
93,154
Depreciation
1,939,984
-
1,939,984
269,230
Total Operating Expenses
6,582,306
1,277,986
7,860,292
3,820,016
Operating Income
590,163
543,205
1,133,368
1,590,810
Nonoperatine Revenues (Expenses)
Investment earnings
15,064
333
15,397
14,957
Gain on sale of capital assets
34,003
1 Total Nonoperating Revenues
15,064
333
15,397
48,960
Income Before Transfers
605,227
543,538
1,148,765
1,639,770
Transfers in
3,045,819
-
3,045,819
-
Transfers (out)
(1,398,063)
(310,000)
(1,708,063)
-
J Change in Net Position
J
2,252,983
233,538
2,486,521
1,639,770
Beginning net position
20,874,251
(24,260)
20,849,991
3,141,924
Ending Net Position
$ 23,127,234
$ 209,278
$ 23,336,512
$ 4,781,694
See Notes to Financial Statements.
t
W,
Cash Flows from Operatine Activities
Receipts from customers and users $
7,042,435 $
r�
CITY OF WEST UNIVERSITY PLACE, TEXAS
2,269,792
1
STATEMENT OF CASHFLOWS
-
'
PROPRIETARYFUADS (Page I of 2)
Payments to suppliers
(2,853,711)
For the Year Ended December 31, 2016
(3,757,266)
(3,003,162)
Payments to employees
(1,297,224)
(414,532)
Business -Type Activities - Enterprise Funds
(515,431)
L�
1,561,113
Governmental
1,574,244
2,261,987
Activities
2,891,500
Water and Solid
Internal
1,893,774
Sewer Waste Total Funds
Service
Cash Flows from Noncaoital Financing Activities
Cash Flows from Operatine Activities
Receipts from customers and users $
7,042,435 $
1,756,249 $
8,798,684 $
2,269,792
Receipts from interfimd charges for services
-
-
-
3,142,575
Payments to suppliers
(2,853,711)
(903,555)
(3,757,266)
(3,003,162)
Payments to employees
(1,297,224)
(414,532)
(1,711,756)
(515,431)
Net Cash Provided
1,561,113
13,131
1,574,244
2,261,987
by Operating Activities
2,891,500
438,162
3,329,662
1,893,774
Pooled Cash and Investments $
2,361,549 $
Cash Flows from Noncaoital Financing Activities
2,503,175 $
3,958,789
See Notes to Financial Statements.
Transfers in
3,045,819
-
3,045,819
-
Transfers (out)
(1,398,063)
(310,000)
(1,708,063)
Net Cash Provided (Used) by
Noncapital Financing Activities 1,647,756 (310,000) 1,337,756
Cash Flows from Capital and Related
Financing Activities
Acquisition, disposal, and
construction of capital assets
Principal paid on capital debt
Interest and fiscal charges
Proceeds from sale of capital assets
Net Cash (Used) by Capital and
Related Financing Activities
Cash Flows from Investing Activities
Interest received
(708,065)
(3,090,000)
44,181
(3,753,884)
(708,065)
(3,090,000)
44,181
(245,932)
34,003
l�
LJ
L1
LJ
(3,753,884) (211,929)
H
15,064 333 15,397 14,957
Net Cash Provided by Investing Activities
15,064
333
15,397
14,957
Net Increase in Cash and
Equity in Pooled Cash and Investments
800,436
128,495
928,931
1,696,802 �l
Beginning cash and equity in
u
pooled cash and investments
1,561,113
13,131
1,574,244
2,261,987
Ending Cash and Equity in
Pooled Cash and Investments $
2,361,549 $
141,626 $
2,503,175 $
3,958,789
See Notes to Financial Statements.
r r
Ll
I
44 t
CITY OF WEST UNIVERSITY PLACE, TEXAS
STATEMENT OF CASHFLOWS
PROPRIETARYFUNDS (Page 2 of 2)
For the Year Ended December 31, 2016
Reconciliation of Operating Income
(Loss) to Net Cash Provided (Used)
by Operating Activities
Operating income
Adjustments to reconcile operating income
to net cash provided by
operating activities:
Depreciation
Changes in Operating Assets and Liabilities:
(Increase) decrease in assets:
Accounts receivable
Prepaid costs
Deferred outflows - pension
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities
Due to other funds
Accrued interest payable
Compensated absences
Net pension liability
Net OPEB obligation
Net Cash Provided
by Operating Activities
See Notes to Financial Statements.
Business -Type Activities - Enterprise Funds
Water and Solid
Sewer Waste
S 590,163 $ 543,205 S
1,939,984
(130,034)
(298,813)
(64,942)
(103,228)
Governmental
Activities
Internal
Total Funds Service
1,133,368 $ 1,590,810
1,939,984 269,230
(194,976) 1,541
(26,213)
(402,041) (115,927)
341,005
1,147
342,152
15,138
-
(77,150)
(77,150)
-
(54,173)
(54,173)
-
94,179
(2,995)
91,184
1,390
399,962
138,171
538,133
155,169
9,227
3,954
13,181
2,636
$ 2,891,500 $
438,162 $
3,329,662 $
1,893,774
45
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46
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS
For the Year Ended December 31, 2016
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of West University Place, Texas (the "City") was incorporated in 1924. The City has
operated under a "Home Rule Charter" since 1940, which provides for a Council- Manager form of
government. A Mayor and four Council members are elected by voters of the City at large for two -
year terms.
The City Council is the principal legislative body of the City. The City Manager is appointed by a
majority vote of the City Council and is responsible to the Council for the administration of all the
affairs of the City. The City Manager is responsible for the appointment and removal of department
directors and employees, supervision and control of all City departments, and preparation of the
annual budget.
The City provides the following services: public safety to include police and fire services, municipal
court, leisure services, streets, drainage, water and sewer services, solid waste collection and
disposal, community development, and general administration.
The City is an independent political subdivision of the State of Texas governed by an elected council
and a mayor and is considered a primary government. As required by generally accepted accounting
principles, these basic financial statements have been prepared based on considerations regarding the
potential for inclusion of other entities, organizations, or functions as part of the City's financial
reporting entity. The component unit listed below, although legally separate, is considered part of
the reporting entity. No other entities have been included in the City's reporting entity.. Additionally,
as the City is considered a primary government for financial reporting purposes, its activities are not
considered a part of any other governmental or other type of reporting entity.
Considerations regarding the potential for inclusion of other entities, organizations, or functions in
the City's financial reporting entity are based on criteria prescribed by generally accepted accounting
principles. These same criteria are evaluated in considering whether the City is a part of any other
governmental or other type of reporting entity. The overriding elements associated with prescribed
criteria considered in determining that the City's financial reporting entity status is that of a primary
government are that it has a separately elected governing body, it is legally separate, and it is fiscally
independent of other state and local governments. Additionally, prescribed criteria under generally
accepted accounting principles include considerations pertaining to organizations for which the
primary government is financially accountable and considerations pertaining to 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.
Blended Component Unit
Friends of West Universitv Parks Fund
Friends of West University Parks Fund (the "Corporation") has been included in the reporting
entity as a blended component unit. The Corporation is a not - for -profit entity created to solicit
private contributions for the beautification, improvement, and maintenance of the City's parkland.
The Corporation's Board of Directors is appointed by, and serves at the discretion of, City
Council. City Council approval is required for any projects of the Corporation that exceed
$1,000. In the event of dissolution, any assets of the Corporation will be transferred to the City.
47
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
The operations of the Corporation are presented as a governmental fund type. Separate financial
statements of the Corporation may be obtained from the Finance Department of the City.
B. Government -Wide Financial Statements
The government -wide financial statements (i.e., the Statement of Net Position and the Statement of
Activities) report information on all of the activities of the primary government. Governmental
activities, which normally are supported by taxes, intergovernmental revenues, and other
nonexchange transactions, are reported separately from business -type activities, which rely to a
significant extent on fees and charges to external customers for support.
C. Basis of Presentation — Government -Wide Financial Statements
While separate government -wide and fund financial statements are presented, they are interrelated.
The governmental activities column incorporates data from governmental funds and internal service
funds, while business -type activities incorporate data from the City's enterprise funds. Separate
financial statements are provided for governmental funds and proprietary funds.
As a general rule, the effect of interfund activity has been eliminated from the government -wide
financial statements. Exceptions to this general rule are payments in lieu of taxes where the amounts
are reasonably equivalent in value to the interfund services provided and other charges between the
City's water and wastewater functions and various other functions of the City. Elimination of these
charges would distort the direct costs and program revenues reported for the various functions
concerned.
D. Basis of Presentation — Fund Financial Statements
The fund financial statements provide information about the City's funds, including its blended
component unit. Separate statements for each fund category — governmental and proprietary— are
presented. The emphasis of fund financial statements is on major governmental and enterprise
funds, each displayed in a separate column. All remaining governmental and enterprise funds are
aggregated and reported as nonmajor funds.
The City reports the following governmental funds:
The general fund is used to account for and report all financial resources not accounted for and
reported in other funds. The principal sources of revenues include local property taxes, sales and
franchise taxes, licenses and permits, fines and forfeitures, and charges for services.
Expenditures include general government, public safety, public works, and public service. The
general fund is always considered a major fund for reporting purposes.
The debt service fund is used to account for and report financial resources that are restricted,
committed, or assigned to expenditure for principal and interest on all long -term debt of the City.
The primary source of revenue for debt service is local property taxes. The debt service fund is
considered a major fund for reporting purposes.
The special revenue fiends are used to account for and report proceeds of specific revenue sources
that are restricted or committed to expenditure for specified purposes other than debt service or
capital projects. The special revenue funds are considered nonmajor funds for reporting purposes.
48
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
The capital projects funds are used to account for and report financial resources that are
restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or
construction of capital facilities and other capital assets. The capital projects funds are considered
nonmajor funds for reporting purposes.
The City reports the following enterprise funds:
The enterprise funds are used to account for and report the operations that provide water and
wastewater collection, wastewater treatment operations, and solid waste collection and disposal.
The services are financed and operated in a manner similar to private business enterprises where
the intent of the governing body is that the costs (expenses including depreciation) of providing
goods or services to the general public on a continuing basis will be financed or recovered
primarily through user charges. The water and sewer and solid waste funds are considered major
funds for reporting purposes.
Additionally, the City reports the following fund type:
Internal service funds account for services provided to other departments or agencies of the
primary government, or to other governments, on a cost reimbursement basis. The vehicle
replacement and equipment replacement funds are used to account for vehicle and equipment
replacement and maintenance services. The healthcare benefits fund accounts for costs
associated with retired or separated employees, as well as healthcare benefits. The technology
management fund accounts for technology services.
During the course of operations, the City has activity between funds for various purposes. Any
residual balances outstanding at year end are reported as due from/to other funds and advances
to /from other funds. While these balances are reported in fund financial statements, certain
eliminations are made in the preparation of the government -wide financial statements. Balances
between the funds included in governmental activities (i.e., the governmental and internal service
funds) are eliminated so that only the net amount is included as internal balances in the
governmental activities column. Similarly, balances between the funds included in business -type
activities (i.e., the enterprise funds) are eliminated so that only the net amount is included as internal
balances in the business -type activities column.
Further, certain activity occurs during the year involving transfers of resources between funds. In
fund financial statements, these amounts are reported at gross amounts as transfers in/out. While
reported in fund financial statements, certain eliminations are made in the preparation of the
government -wide financial statements. Transfers between the funds included in governmental
activities are eliminated so that only the net amount is included as transfers in the governmental
activities column. Similarly, balances between the funds included in business -type activities are
eliminated so that only the net amount is included as internal balances in the business -type activities
column.
E. Measurement Focus and Basis of Accounting
The accounting and financial reporting treatment is determined by the applicable measurement focus
and basis of accounting. Measurement focus indicates the type of resources being measured such as
current financial resources or economic resources. The basis of accounting indicates the timing of
transactions or events for recognition in the financial statements.
WO
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
The government -wide and proprietary fund financial statements are reported using the economic
resources measurement focus and the accrual basis of accounting. Revenues are recorded when
earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash
flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and
similar items are recognized as revenue as soon as all eligibility requirements imposed by the
provider have been met.
The governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon
as they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period.
For this purpose, the City considers revenues to be available if they are collected within 60 days of
the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred,
as under accrual accounting. However, debt service expenditures, as well as expenditures related to
compensated absences and claims and judgments, are recorded only when payment is due. General
capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long -term
debt and acquisitions under capital leases are reported as other financing sources.
Property taxes, sales taxes, franchise taxes, licenses, and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as revenues of the
current fiscal period. Entitlements are recorded as revenues when all eligibility requirements are met,
including any time requirements, and the amount is received during the period or within the
availability period for this revenue source (within 60 days of year end). Expenditure - driven grants
are recognized as revenue when the qualifying expenditures have been incurred and all other
eligibility requirements have been met, and the amount is received during the period or within the
availability period for this revenue source (within 60 days of year end). All other revenue items are
considered to be measurable and available only when cash is received by the City.
F. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance
1. Cash and Cash Equivalents
The City's cash and cash equivalents are considered to be cash on hand, demand deposits, balances
in statewide investment pools (TexPool), and short-term investments with original maturities of
three months or less from the date of acquisition. For the purpose of the statement of cash flows, the
proprietary fund types consider temporary investments with maturity of three months or less when
purchased to be cash equivalents.
The City maintains pooled cash and investment accounts. Each fund whose monies are deposited in
the pooled cash and investment accounts has equity therein, and interest earned on the investment of
these monies is allocated based upon relative equity at the previous month end. Amounts on deposit
in interest bearing accounts and other investments are displayed on the combined balance sheet as
"cash and equity in pooled cash and investments."
2. Investments
Investments, except for certain investment pools and commercial paper, are reported at fair value.
The investment pool operates in accordance with appropriate state laws and regulations and is
reported at amortized cost. Investments in nonparticipating interest earning contracts, such as
certificates of deposit, are reported at cost.
50
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
The City has adopted a written investment policy regarding the investment of its funds as defined in
the Public Funds Investment Act, Chapter 2256, Texas Government Code. In summary, the City is
authorized to invest in the following:
Direct obligations of the U.S. government
Certificates of deposit that meet certain criteria
Money market mutual funds that meet certain criteria
Statewide investment pools
3. Inventories and Prepaid Items
Inventories are valued at cost using the first- in/first -out (FIFO) method The costs of governmental
fund type inventories are recorded as expenditures when the related liability is incurred (i.e., the
purchase method).
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both the government -wide and fund financial statements. The cost of prepaid items
is recorded as expenditures /expenses when consumed rather than when purchased.
4. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads,
bridges, sidewalks, and similar items), are reported in the applicable governmental or business -type
activities columns in the government -wide financial statements. In accordance with GASB Statement
No. 34, infrastructure has been capitalized retroactively. Capital assets are defined by the City as
assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of
one year. Such assets are recorded at historical cost or estimated historical cost if purchased or
constructed Donated capital assets are recorded at estimated fair market value at the date of
donation.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest
costs incurred in connection with construction of enterprise fund capital assets are capitalized when
the effects of capitalization materially impact the financial statements.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially
extend assets' lives are not capitalized.
Property, plant, and equipment of the primary government is depreciated using the straight -line
method over the following estimated useful years:
Asset Description
Buildings
Improvements
Machinery and equipment
Water and sewer system
Infrastructure
51
Estimated
Useful Life
10 to 50 years
5 to 50 years
3 to 30 years
5 to 60 years
50 years
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
5. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position 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 five items
that qualify for reporting in this category on the government -wide Statement of Net Position. 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. Deferred charges have been recognized as a result of differences
between the actuarial expectations and the actual economic experience and changes in actuarial
assumptions of the City's pension plan. These amounts are deferred and amortized over the average
of the expected service lives of pension plan members. Deferred charges have also been recognized
as a result of the difference between the projected and actual investment earnings on the pension plan
assets. This amount is deferred and amortized over a period of five years. A deferred charge has been
recognized for employer pension plan contributions that were made subsequent to the measurement
date through the end of the City's fiscal year. This amount is deferred and recognized as a reduction
to the net pension liability during the measurement period in which the contributions were made.
In addition to liabilities, the statement of financial position 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 only one type of item,
which arises only under a modified accrual basis of accounting that qualifies for reporting in this
category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds
balance sheet. The governmental funds report unavailable revenues from property taxes. This
amount is deferred and recognized as an inflow of resources in the period that the amount becomes
available. At the government -wide level, the City reports a deferred inflow of resources for that
portion of property taxes that was collected for use in the subsequent period.
6. Compensated Employee Absences
It is the City's policy to permit employees to accumulate earned but unused vacation, sick pay
benefits, and compensatory time. Amounts accumulated, up to certain amounts, may be paid to
employees upon termination of employment. The maximum amount of hours that can be carried
from one year to the next is dependent on the number of years of service that the employee has with
the City.
Length of Service
(Months)
148
49 -144
145 -240
More than 240
Maximum
Vacation
Leave Accrual
160 hours
240 hours
320 hours
400 hours
The estimated amount of compensation for services provided that is expected to be liquidated with
expendable, available financial resources is reported as an expenditure and a fund liability of the
governmental fund that will pay it when it matures or becomes due. Amounts of vested or
accumulated vacation leave that are not expected to be liquidated with expendable, available
52
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
financial resources are maintained separately and represent a reconciling item between the fund and
government -wide presentations.
7. Long -Term Obligations
In government -wide financial statements and proprietary fund types in the fund financial statements,
long -term debt and other long -term obligations are reported as liabilities in the applicable
governmental activities or business -type activities Statement of Net Position. Bond premiums and
discounts are deferred and amortized over the life of the bonds using the effective interest method, if
material. Bonds payable are reported net of the applicable bond premium or discount.
In the fund financial statements, governmental fund types recognize bond premiums and discounts,
as well as bond issuance costs, during the current period. The face amount of debt issued is reported
as other financing sources. Premiums received on debt issuances are reported as other financing
sources while discounts on debt issuances are reported as other financing uses. Issuance costs,
whether or not withheld from the actual debt proceeds received, are reported as debt service
expenditures.
The property tax rate is allocated each year between the general and debt service funds. The full
amount estimated to be required for debt service on general obligation debt is provided by the tax
along with the interest earned in the debt service fund. Although a portion of the general obligation
debt was directly related to the purchase of water and sewer infrastructure, the debt service
expenditures are included in the governmental fund financial statements as they are expected to be
paid from debt service tax revenues instead of water system revenues.
Assets acquired under the terms of a capital lease are recorded as liabilities and capitalized in the
government -wide financial statements at the present value of net minimum lease payments at
inception of the lease. In the year of acquisition, capital lease transactions are recorded as other
financing sources and as capital outlay expenditures in the applicable fund. Lease payments
representing both principal and interest are recorded as expenditures in the general fund upon
payment with an appropriate reduction of principal recorded in the government -wide financial
statements.
8. Net Position Flow Assumption
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted
bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as
restricted net position and unrestricted net position in the government -wide and proprietary fund
financial statements, a flow assumption must be made about the order in which the resources are
considered to be applied. It is the City's policy to consider restricted net position to have been
depleted before unrestricted net position is applied.
9. Fund Balance Flow Assumptions
Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted
resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the
amounts to report as restricted, committed, assigned, and unassigned fund balance in the
governmental fund financial statements, a flow assumption must be made about the order in which
the resources are considered to be applied. It is the City's policy to consider restricted fund balance
to have been depleted before using any of the components of unrestricted fund balance. Further,
53
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
when the components of unrestricted fund balance can be used for the same purpose, committed
fund balance is depleted Furst, followed by assigned fund balance. Unassigned fund balance is
applied last.
10. Fund Balance Policies
Fund balances of governmental funds are reported in various categories based on the nature of any
limitations requiring the use of resources for specific purposes. The City itself can establish
limitations on the use of resources through either a commitment (committed fund balance) or an
assignment (assigned fund balance).
Amounts that cannot be spent because they are either not in spendable form or legally or
contractually required to be maintained intact are classified as nonspendable fund balance. Amounts
that are externally imposed by creditors, grantors, contributors, or laws or regulations of other
governments, or imposed by law through constitutional provisions are classified as restricted.
The committed fund balance classification includes amounts that can be used only for specific
purposes determined by a formal action of the City's highest level of decision - making authority. The
City Council is the highest level of decision - making authority for the City that can, by approval of a
resolution prior to the end of the fiscal year, commit fund balance. Once approved, the limitation
imposed by the resolution remains in place until a similar action is taken (the approval of another
resolution) to remove or revise the limitation.
Amounts in the assigned fund balance classification are intended to be used by the City for specific
purposes but do not meet the criteria to be classified as committed. The City Council has, by
resolution, authorized the City's Finance Director to assign fund balance to a specific purpose as
approved by the City's fund balance policy. Unlike commitments, assignments generally only exist
temporarily. In other words, an additional action does not normally have to be taken for the removal
of an assignment. Conversely, as discussed above, an additional action is essential to either remove
or revise a commitment.
It is the City's policy to achieve and maintain an unassigned fund balance in the general fund equal
to 20 percent of estimated revenue for the current annual budget. The general fund is the only fund
that reports a positive unassigned fund balance. All other operating fund reserves will be maintained
at ten percent of the estimated revenue for the current annual budget and will be reported as
restricted, committed, or assigned. Balances of less than the prescribed levels shall only be allowed
with specific approval of City Council.
11. Post Employment Healthcare Benefits
The City provides post employment healthcare benefits as mandated by the Consolidated Omnibus
Budget Reconciliation Act (COBRA). The requirements established by COBRA are fully funded by
the employees who elect coverage under COBRA and the City incurs no direct costs.
For employees hired prior to January 1, 2009, the City provides continued healthcare coverage for
eligible retirees until they become eligible for Medicare or other federal or state health insurance
plans or if retirees become employed. The City pays 100 percent of the premium for the retirees.
Spouses and dependents are eligible for continued coverage at the retirees' expense.
54
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
12. Estimates
The preparation of financial statements, in conformity with generally accepted accounting principles,
requires management to make estimates and assumptions that affect the reported amounts of assets,
liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenditures /expenses during the reporting period. Actual
results could differ from those estimates.
13. Pensions
For the purposes of measuring the net pension liability, deferred outflows of resources and deferred
inflows of resources related to pensions, and pension expense, information about the fiduciary net
position of the Texas Municipal Retirement System (TMRS) and additions to /deductions from
TMRS'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.
G. Revenues and Expenditures/Expenses
1. Program Revenues
Amounts reported as program revenues include 1) charges to customers or applicants who purchase,
use, or directly benefit from goods, services, or privileges provided by a given function or segment
and 2) grants and contributions (including special assessments) that are restricted to meeting the
operational or capital requirements of a particular function or segment. All taxes, including those
dedicated for specific purposes, and other internally dedicated resources are reported as general
revenues rather than as program revenues.
2. Property Taxes
Property taxes are levied during October of each year and are due upon receipt of the City's tax bill.
Taxes become delinquent, with an enforceable lien on property, on February 1 of the following year.
3. Proprietary Funds Operating and Nonoperating Revenues and Expenses
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods
in connection with a proprietary fund's principal ongoing operations. The principal operating
revenues of the enterprise funds and internal service funds are charges to customers for sales and
services. The enterprise funds also recognize as operating revenue the portion of tap fees intended to
recover the cost of connecting new customers to the system Operating expenses for the enterprise
fiords and internal service funds include the cost of sales and services, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses.
55
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
H. STEWARDSIIIP, COMPLIANCE, AND ACCOUNTABILITY
Annual budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) except
the capital projects funds, which adopt project length budgets. The original budget is adopted by the City Council
prior to the beginning of the year. The legal level of control as defined by the charter in the approved budget is
the department level in the general fund and all others are the fund level. The City Manager may transfer
appropriations within a department without seeking the approval of City Council. Appropriations lapse at the end
of the year, excluding capital project budgets. Supplemental budget appropriations were made for the year ended
December 31, 2016. An annual budget is not adopted for the blended component unit, Friends of West University
Parks Fund, or the emergency grant fund. The parks fund, tree replacement fund, court technology /security fund,
and METRO grant fund are all special revenue funds that have adopted budgets.
Encumbrances represent the estimated amount of expenditures ultimately to result when unperformed contracts
(in progress at year end) are completed. Such encumbrances do not constitute expenditures or liabilities because
the commitments will be reappropriated and honored during the subsequent year.
M. DETAILED NOTES ON ALL FUNDS
A. Deposits and Investments
As of December 31, 2016, the City had the following investments:
Investment
U.S. agencies
TexPool
Corporation's certificates of deposit
Portfolio weighted average maturity
Fair Value Measurements
Value
S 8,000,000
12,205,578
455,045
Total S 20,660,623
Weighted Average
Maturity (Years)
2.09
0.00
0.03
O1F
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 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.
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.
56
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
As of December 31, 2016, the City had the following recurring fair value measurements
Investments by Fair Value Level
U.S. Government A¢encv Bonds/Notes
Federal Home Loan Bank
Federal Home Loan Mortgage Corporation
Federal Farm Credit Bank
Federal National Mortgage Association Notes
Fair Value
Measurements
Using
Significant Other
December 31, Observable Inputs
2016 (Level 2)
S 1,000,000 $ 1,000,000
3,000,000 3,000,000
3,000,000 3,000,000
1,000,000 1,000,000
Total $ 8,000,000 $ 8,000,000
U.S. government agency bonds /notes classified in Level 2 of the fair value hierarchy are valued
using the market approach. The market approach uses prices and other relevant information
generated by market transactions involving identical or comparable assets, liabilities, or groups of
assets and liabilities.
Interest rate risk In accordance with its investment policy, the City manages its exposure to
declines in fair values by structuring the investment portfolio so that securities mature to meet cash
requirements for ongoing operations and invest operating funds primarily in short-term securities.
Credit risk The City's policy requires that investment pools must be rated no lower than "AAA' or
"AAAm ". United States agency investments must be issued in the United States and carry a rating
of "AAA" or "AAAe" as provided by two of the top nationally recognized rating agencies. As of
December 31, 2016, the City's investment in TexPool was rated "AAAm" and the City's investment
in United States agencies was rated between "AA +" and "AAA' by Standard & Poor's. All other
investments are guaranteed (either express or implied) by the full faith and credit of the United
States Government or the issuing U.S. agency. More specifically, the U.S. agency securities held by
the City as of December 31, 2016 consist of a variety of bonds and discount notes issued by the
Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, the Federal National
Mortgage Association, and the Federal Farm Credit Bank. These investments were rated not less
than "Aaa" by Moody's and not less than "AA +" by Standard & Poor's.
Custodial credit risk — deposits. In the case of deposits, this is the risk that in the event of a bank
failure, the City's deposits may not be returned. The City's investment policy requires funds on
deposit at the depository bank to be collateralized by securities. As of December 31, 2016, fair
values of pledged securities and FDIC coverage exceeded bank balances for the City. The
Corporation's fair values of pledged securities and FDIC coverage did not exceed bank balances.
The Corporation was under collateralized by $111,020.
Custodial credit risk— investments. For an investment, this is the risk that in the event of the failure
of the counterparty, the City will not be able to recover the value of its investments or collateral
securities that are in the possession of an outside party. The City's investment policy requires that it
will seek to safekeeping securities at financial institutions, avoiding physical possession. Further, all
trades, where applicable, are executed by delivery versus payment to ensure that securities are
deposited in the City's safekeeping account prior to the release of funds.
57
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
TexPool
TexPool was established as a trust company with the Treasurer of the State of Texas as trustee,
segregated from all other trustees, investments, and activities of the trust company. The State
Comptroller of Public Accounts exercises oversight responsibility over TexPool. Oversight includes
the ability to significantly influence operations, designation of management, and accountability for
fiscal matters. Additionally, the State Comptroller has established an advisory board composed of
both participants in TexPool and other individuals who do not have a business relationship with
TexPool. The advisory board members review the investment policy and management fee structure.
Finally, Standard & Poor's rates TexPool "AAAm ". As a requirement to maintain the rating, weekly
portfolio information must be submitted to Standard & Poor's, as well as to the office of the
Comptroller of Public Accounts for review.
TexPool is an external investment pool measured at amortized cost. In order to meet the criteria to
be recorded at amortized cost, the investment pool must transact at a stable net asset value per share
and maintain certain maturity, quality, liquidity, and diversification requirements within TexPool.
TexPool transacts at a net asset value of $1.00 per share, has weighted average maturities of 60 days
or less and weighted average lives of 120 days or less, investments held are highly rated by
nationally recognized statistical rating organizations, have no more than five percent of portfolio
with one issuer (excluding U.S. government securities), and can meet reasonably foreseeable
redemptions. TexPool has a redemption notice period of one day and may redeem daily. TexPool's
authority may only impose restrictions on redemptions in the event of a general suspension of
trading on major securities markets, general banking moratorium, or national state of emergency that
affects TexPool's liquidity.
B. Receivables
Amounts are aggregated into a single accounts receivable (net of allowance for uncollectibles) line
for certain funds and aggregated columns. Below is the detail of receivables for the general fund, the
debt service fund, the nonmajor governmental funds in the aggregate, the internal services funds in
the aggregate, and the enterprise funds, including the applicable allowances for uncollectible
accounts:
58
Nonmajor
Water and
General Debt Service
Governmental
Sewer
Solid Waste
Ad valorem taxes
$ 6,749,736 $ 4,816,616
$
$
$ -
Other taxes
321,843 -
Accounts
113,598
-
1,281,875
339,295
Intergovernmental
-
106,218
-
-
Other
5,775
51,022
3,183
Less allowance
(1,729)
(181,129)
(33,577)
$ 7,189,223 $ 4,816,616
$ 157,240
$ 1,103,929
$ 305,718
58
i
J
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
C. Capital Assets
A summary of changes in capital assets for the year end is as follows:
Governmental Activities:
Capital assets not being depreciated:
Land
Construction in progress
Total capital assets not
being depreciated
Other capital assets:
Buildings and improvements
Machinery and equipment
Infrastructure
Total other capital assets
Less accumulated depreciation for
Buildings and improvements
Primary Government
(1,708,819)
Beginning
(16,292,407)
Machinery and equipment
Ending
Balance
Increases
(Decreases)
Balance
(19,641,883)
(1,332,676)
-
(20,974,559)
S 6,298,042
S -
$ -
$ 6,298,042
21,553
227,998
(21,553)
227,998
(6,307)
88,442,003
Governmental Activities
6,319,595
227,998
(21,553)
6,526,040
Capital Assets, Net $
97,561,486 $
(2,565,583) $
(27,860)
57,308,842
324,408
57,633,250
7,935,153
382,318
(106,503)
8,210,968
66,584,084
49,700
66,633,784
131,828,079
756,426
(106,503)
132,478,002
Buildings and improvements
(14,583,588)
(1,708,819)
-
(16,292,407)
Machinery and equipment
(6,360,717)
(508,512)
100,196
(6,769,033)
Infrastructure
(19,641,883)
(1,332,676)
-
(20,974,559)
Total accumulated depreciation
(40,586,188)
(3,550,007)
100,196
(44,035,999)
Other capital assets, net
91,241,891
(2,793,581)
(6,307)
88,442,003
Governmental Activities
Capital Assets, Net $
97,561,486 $
(2,565,583) $
(27,860)
94,968,043
Less associated debt (53,694,081)
Plus deferred charge on refunding 1,389,271
j Net Investment in Capital Assets S 42,663,233
All capital assets constructed or paid for with funds of the component unit are titled in the City's
1 name. Accordingly, component unit capital assets and construction in progress are recorded in the
governmental activities totals.
Depreciation was charged to governmental functions as follows:
J
General government $ 479,494
Public safety 74,766
J Public works 1,903,710
Public service 822,807
Capital assets held by the City's internal service fund 269,230
Total Governmental Activities Depreciation Expense $ 3,550,007
J
1
59
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued) 1
For the Year Ended December 31, 2016 [ }
The following is a summary of changes in capital assets for business -type activities for the year end:
Primary Government IL }pl
Business -Type Activities:
Capital assets not being depreciated:
Land
Construction in progress
Total capital assets not
being depreciated
Other capital assets:
Beginning
Balance Increases
(Decreases)/ Ending
Reclassifications Balance
$ 193,875 $ - $ $ 193,875
255,717 380,902 (240,199) 396,420
449,592 380,902 (240,199) 590,295
Buildings and improvements
459,625
-
459,625
Water and sewer systems
55,321,581
507,698
(19,441)
55,809,838 L
Machinery and equipment
2,059,196
63,595
(6,017)
2,116,774
Total other capital assets
57,840,402
571,293
(25,458)
58,386,237
IL
Less accumulated depreciation for:
l�
Buildings and improvements
(418,790)
(18,385)
-
(437,175)
Water and sewer systems
(34,594,371)
(1,816,460)
15,510
(36,395,321)
Machinery and equipment
(916,322)
(105,139)
6,017
lJ
(1,015,444) lJ
Total accumulated depreciation
(35,929,483)
(1,939,984)
21,527
(37,847,940)
Other capital assets, net
21,910,919
(1,368,691)
(3,931)
20,538,297 r�
Business -Type Activities
L
Capital Assets, Net $
22,360,511 $
(987,789) $
(244,130)
21,128,592
Depreciation was charged to business -type functions as follows:
Water and sewer $ 1,939,984
Total Business -Type Activities Depreciation Expense $ 1,939,984
.i
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
D. Long -Term Debt
The following is a summary of changes in the City's total long -term liabilities for the year end. In
general, the City uses the general and debt service funds to liquidate governmental long -term
liabilities.
J *Beginning balances have been restated.
Long -term liabilities applicable to the City's governmental activities are not due and payable in the
current period and, accordingly, are not reported as fund liabilities in the governmental funds. The
governmental activities compensated absences, net pension liability, and net other post employment
benefits (OPEB) obligation are generally liquidated by the general fund Interest on long -term debt
J is not accrued in governmental funds, but rather is recognized as an expenditure when due.
A 61
Amounts
Beginning
Ending
Due Within
Balance*
Additions
Reductions
Balance
One Year
Governmental Activities:
Bonds, notes and other payables:
General obligation bonds
$
46,130,000
$ 3,170,000
$ 6,560,000
$
42,740,000 **
$
6,640,000
Certificates of obligation
10,975,000
-
810,000
10,165,000 **
845,000
Unamortized premiums and/or discounts
913,156
-
124,075
789,081 **
58,018,156
3,170,000
7,494,075
53,694,081
7,485,000
Other liabilities:
Compensated absences
1,161,097
1,031,753
1,044,987
1,147,863
1,033,077
Net pension liability
2,869,759
3,537,084
6,406,843
Net OPEB obligation
744,094
65,904
809,998
-
Total Governmental Activities
$
62,793,106
$ 7,804,741
$ 8,539,062
$
62,058,785
$
8,518,077
1
f
Long -term debt due in more than one year
$
53,540,708
* *Debt
associated with
governmental activities capital assets
$
53,694,081
*Beginning balances have been restated
Amounts
Beginning
Ending
Due Within
Balance*
Additions
Reductions
Balance
One Year
Business -Type Activities:
Revenue bonds
$
3,090,000
$ -
$ 3,090,000
$
$
Unamortized premiums and/or discounts
4,933
4,933
3,094,933
-
3,094,933
Other liabilities:
Compensated absences
70,185
154,350
63,166
161,369
145,232
Net pension liability
436,607
538,133
974,740
Net OPEB obligation
1
148,819
13,181
162,000
-
i Total Business -Type Activities
$
3,750,544
$ 705,664
$ 3,158,099
$
1,298,109
$
145,232
Long -term debt due in more than one year
$
1,152,877
J *Beginning balances have been restated.
Long -term liabilities applicable to the City's governmental activities are not due and payable in the
current period and, accordingly, are not reported as fund liabilities in the governmental funds. The
governmental activities compensated absences, net pension liability, and net other post employment
benefits (OPEB) obligation are generally liquidated by the general fund Interest on long -term debt
J is not accrued in governmental funds, but rather is recognized as an expenditure when due.
A 61
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
Current Refunding
The City issued $3,170,000 of general obligation refunding bonds, series 2016. The proceeds were
used to refund $3,090,000 of outstanding waterworks and sewer system revenue refunding bonds,
series 2005. The refunding was undertaken to provide a present value savings in debt service payable
by the City. The reacquisition price was less than the net carrying amount of the old debt by
$102,688. This amount is being netted against the new debt and amortized over the life of the new
debt, which is equal to the life of the old debt. This debt refunding resulted in an economic gain of
$181,565 and a reduction of $191,971 in future debt service payments
Long -term debt at year end was comprised of the following debt issues:
Certificates of Obligation
Series 2001
Series 2009
Series 2010
Series 2010A
Series 2011
Total General Obligation Bonds 42,740,000
4.40%
2.50 - 4.50%
2.00 -4.00%
1.00 -4.00%
2.00 -2.25%
Total Certificates of Obligation
590,000
1,065,000
6,505,000
1,195,000
810,000
10,165,000
Total Governmental Activities Long -Term Debt S 52,905,000
62
Interest
Description
Rates
Balance
Governmental Activities
General Obligation Bonds
Permanent improvement
Series 2010
2.00 -4.00%
S 4,760,000
Permanent improvement and refunding
Series 2009
2.504.50%
8,615,000
Series 2010
2.004.00%
6,050,000
Series 2011
2.00 -3.00%
1,640,000
Series 2012
2.00%
7,185,000
Series 2013
0.34 - 1.75%
12,110,000
General obligation refunding
Series 2016
1.45%
2,380,000
Certificates of Obligation
Series 2001
Series 2009
Series 2010
Series 2010A
Series 2011
Total General Obligation Bonds 42,740,000
4.40%
2.50 - 4.50%
2.00 -4.00%
1.00 -4.00%
2.00 -2.25%
Total Certificates of Obligation
590,000
1,065,000
6,505,000
1,195,000
810,000
10,165,000
Total Governmental Activities Long -Term Debt S 52,905,000
62
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
The annual requirements to amortize general obligation bonds and certificates of obligation
outstanding at year end were as follows:
Year
Ending
Governmental Activities
Dec 31
Principal
Interest
Total
2017
$ 7,485,000
$ 1,422,468 $
8,907,468
2018
7,655,000
1,270,885
8,925,885
2019
7,815,000
1,109,674
8,924,674
2020
7,965,000
941,108
8,906,108
2021
3,375,000
798,007
4,173,007
2022 -2026
13,185,000
2,419,654
15,604,654
2027 -2028
5,425,000
230,475
5,655,475
Total 5 ,905,000 T87-977- T-7-1,09-7,271—
The City issues a variety of long -term debt instruments in order to acquire and/or construct major
capital facilities (streets, drainage, public safety, water, and wastewater) and equipment for general
government and enterprise fund activities. These instruments include general obligation bonds,
certificates of obligation, and revenue bonds. Future ad valorem tax revenues, water and sewer
system revenues, or liens on property and equipment secure these debt obligations.
General obligation bonds are direct obligations of the City for which its full faith and credit are
pledged. Repayment of general obligation bonds are from taxes levied on all taxable property
located within the City. The City is not obligated in any manner for special assessment debt.
Federal Arbitraee
The Tax Reform Act of 1986 instituted certain arbitrage restrictions consisting of complex
regulations with respect to issuance of tax- exempt bonds after August 31, 1986. Arbitrage
regulations deal with the investment of tax- exempt bond proceeds at an interest yield greater than the
interest yield paid to bondholders. Generally, all interest paid to bondholders can be retroactively
rendered taxable if applicable rebates are not reported and paid to the Internal Revenue Service
(IRS) at least every five years for applicable bond issues. Accordingly, there is the risk that if such
calculations are not performed, or not performed correctly, a substantial liability to the City could
result. The City periodically engages an arbitrage consultant to perform the calculations in
accordance with the rules and regulations of the IRS.
E. Interfund Receivables and Payables
The composition of interfund balances as of year end was as follows
Due To Due From Amounts
General Nonmajorgovernmental $ 20,755
The outstanding balances between funds result mainly from the time lag between the dates that (1)
interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are
recorded in the accounting system, and (3) payments between funds are made.
63
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
F. Interfund Transfers
Transfers between the primary government funds during the year were as follows:
Transfer Out
Transfer In
Amounts
General
Nonmajor
$ 500,000
Debt service
Water and sewer
3,045,819
Nonmajor
Nonmajor
825,000
Water and sewer
Debt service
1,193,563
Water and sewer
General
204,500
Solid waste
General
310,000
S 6,078,882
Transfers to the general fund were subsidies for administrative expenditures. Other amounts
transferred between funds related to amounts collected by the nonmajor governmental funds for
various governmental expenditures. Transfers to the debt service fund are used to move revenues
from the water and sewer fund with collection authorization as debt service principal and interest
payments become due.
G. Leases
The City is the lessor of approximately 1.0874 acres of its land to Goode Cook, Inc. (the
"Company "). This lease agreement (the "Lease's is an operating lease with fixed minimum rental
payments with annually adjusted rates. The Lease expires July 31, 2022; however, at any time after
July 31, 2016, the City may terminate the Lease by giving the Company a minimum of nine months'
written notice. Rental income is earned from leasing this parcel of land to the Company.
Minimum guaranteed income on all City noncancelable operating leases is as follows:
Year
Ending
Dec 31
2017
2018
2019
2020
2021
2022
Total
M
Annual
Base Rent
$ 77,335
79,657
82,051
84,517
87,055
51,660
S 462,275
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
H. Restatement of Net Position
The City has restated beginning net position to account for the reallocation of its net OPEB
obligation between governmental activities and business -type activities. Beginning net position is
reported as follows:
Internal Service
Technology Governmental Water and Solid Business -Type
Management Activities Sewer Waste Activities
Beginning net position - as reported $ (171,052) $ 50,138,872 $ 20,978,424 $ 20,386 $ 20,998,810
Restatement - NetOPEBobligation (29,764) 148,819 (104,173) (44,646) (148,819)
Beginning net position - as restated $ (200,816) $ 50,287,691 $ 20,874,251 $ (24,260) $ 20,849,991
IV. OTHER INFORMATION
A. Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of
assets; errors and omissions; and natural disasters for which the City participates along with 2,617
other entities in the Texas Municipal League's Intergovernmental Risk Pools (the "Pool "). The Pool
purchases commercial insurance at group rates for participants in the Pool. The City has no
additional risk or responsibility to the Pool, outside of the payment of insurance premiums. The City
has not significantly reduced insurance coverage or had settlements that exceeded coverage amounts
for the past three years.
B. Contingent Liabilities
Amounts received or receivable from granting 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 amounts of expenditures
that may be disallowed by the grantor cannot be determined at this time although the City expects
such amounts, if any, to be immaterial.
Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be
reasonably estimated. Liabilities include an amount for claims that have been incurred but not
reported. Claim liabilities are calculated considering the effects of inflation, recent claim settlement
trends, including frequency and amount of payouts, and other economic and social factors. No claim
liabilities are reported at year end.
C. Pension Plan
Texas Municipal Retirement Svstem
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
65
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
administration and management of TMRS with a six - member Board of Trustees (the "Board"),
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 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 payment 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 percent of the member's deposits and
interest.
The plan provisions are adopted by the governing body of the City, within the options available in
the state statutes governing TMRS. Plan provisions for the City were as follows:
Employee deposit rate
Matching ratio (City to employee)
Years required for vesting
Service requirement eligibility
(expressed as age/yrs of service)
Updated service credit
Annuity increase (to retirees)
Employees Covered by Benefit Terms
2016 2015
7.00% 7.00%
2to1
60/5,0/20
100% Repeating,
Transfers
70% of CPI Repeating
2to1
60/5,0/20
100% Repeating,
Transfers
70% of CPI Repeating
At the December 31, 2015 valuation and measurement date, the following employees were covered
by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 102
Inactive employees entitled to, but not yet receiving, benefits 78
Active employees 115
Total 295
Contributions
The contribution rates for employees in TMRS are either five percent, six percent, or seven percent
of employee gross earnings, and the City- matching percentages are either 100 percent, 150 percent,
or 200 percent, 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 actuary, using the Entry Age
Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount
.0
-' CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
necessary to finance the cost of benefits earned by employees during the year, with an additional
i
amount to finance any unfunded accrued liability.
Employees for the City were required to contribute seven percent of their annual gross earnings
during the fiscal year. The contribution rate for the City was 11.92 percent and 12.83 percent in
calendar years 2015 and 2016, respectively. The City's contributions to TMRS for the fiscal year
ended September 30, 2016 were $1,139,862, which were equal to the required contributions.
Net Pension Liability
The City's Net Pension Liability (NPL) was measured as of December 31, 2015 and the Total
Pension Liability (TPL) used to calculate the NPL was determined by an actuarial valuation as of
that date.
Actuarial Assumptions
The TPL in the December 31, 2015 actuarial valuation was determined using the following actuarial
assumptions:
Inflation 2.5% per year
Overall payroll growth 3.0% per year
Investment rate of return 6.75°/x, 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 percent and female rates multiplied
by 103 percent. 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 male rates multiplied by 109 percent
and female rates multiplied by 103 percent with a three -year set - forward for both males and females.
In addition, a three percent 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 three percent floor.
Actuarial assumptions used in the December 31, 2015 valuation were based on the results of
actuarial experience studies. The experience study in TMRS was for the period December 31, 2010
through December 31, 2014. Healthy post - retirement mortality rates and annuity purchase rates
were updated based on a Mortality Experience Investigation Study covering 2009 through 2011, and
dated December 31, 2013. These assumptions were first used in the December 31, 2013 valuation,
along with a change to the 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 7.00 percent to 6.75 percent. 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 weighing the
expected future real rates of return by the target allocation percentage and by adding expected
67
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
inflation. In determining their best estimate of a recommended investment return assumption under
the various alternative asset allocation portfolios, the actuary 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
TNM 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
Domestic Equity
International Equity
Core Fixed Income
Non -Core Fixed Income
Real Return
Real Estate
Absolute Return
Private Equity
Discount Rate
Target Allocation
17.50%
17.50%
10.00%
20.00%
10.00%
10.00%
10.00%
5.00%
Total 100.00%
Long -Term Expected Real
Rate of Return (Arithmetic)
4.55%
6.10%
1.00%
3.65%
4.03%
5.00%
4.00%
8.00%
The discount rate used to measure the TPL was 6.75 percent. 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 TPL.
M
CITY OF WEST UNIVERSITY PLACE, 'TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
Changes in the NPL
1% Increase in
Discount Rate Discount Rate
Discount Rate
(5.75°/x) (6.75 %)
(7.75 %)
City's Net Pension Liability $ 13,554,278 $ 7,381,583
S 2,289,937
Pension Plan Fiduciary Net Position
Increase (Decrease)
Total Pension
Plan Fiduciary
Net Pension
1
Liability
Net Position
Liability
J
(A)
(B)
(A)-(B)
Changes for the year:
Service cost
$ 1,417,162
$
$ 1,417,162
Interest
2,907,623
2,907,623
Change of benefit terms
-
-
Difference between expected and actual experience
485,089
485,089
Changes of assumptions
946,917
946,917
Contributions - employer
-
1,046,460
(1,046,460)
Contributions - employee
614,567
(614,567)
Net investment income
56,952
(56,952)
Benefit payments, including refunds of employee
contributions
(2,153,197)
(2,153,197)
-
Administrative expense
(34,692)
34,692
Other changes
-
(1,713)
1,713
Net Changes
3,603,594
(471,623)
4,075,217
Balance at December 31, 2014
41,905,484
38,599,118
3,306,366
J Balance at December 31, 2015
S 45,509,078
$ 38,127,495
$ 7,381,583
Sensitivity of the NPL to Changes in the Discount Rate
J
The following presents the NPL of the City, calculated using the discount rate of 6.75 percent, as
well as what the City's NPL would be if it were calculated using a discount rate that is one
percentage point lower (5.75%) or one percentage point higher (7.75 %) than the current rate:
1% Decrease in
1% Increase in
Discount Rate Discount Rate
Discount Rate
(5.75°/x) (6.75 %)
(7.75 %)
City's Net Pension Liability $ 13,554,278 $ 7,381,583
S 2,289,937
Pension Plan Fiduciary Net Position
Detailed information about the pension plan's fiduciary net position is available in a separately -
issued TNM financial report. That report may be obtained on the Internet at www.tmrs.com.
Pension Exnense and Deferred Outflows/Inflows of Resources Related to Pensions
For the fiscal year ended December 31, 2016, the City recognized net pension expense of
$2, 171,790.
J
••
D.
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
As of December 31, 2016, the City reported deferred outflows of resources related to pensions from
the following sources:
$1,139,862 reported as deferred outflows of resources related to pensions resulting from
contributions subsequent to the measurement date will be recognized as a reduction of the NPL for
the fiscal year ending December 31, 2017. Other amounts reported as deferred outflows of resources
related to pensions will be recognized as pension expense as follows:
Year Ended
Deferred
December 31:
Outflows of
2017
Resources
Differences between expected and actual economic experience
$ 570,534
Changes in actuarial assumptions
688,196
Difference between projected and actual investment earnings
2,402,210
Contributions subsequent to the measurement date
1,139,862
Thereafter
Total $ 4,800,802
$1,139,862 reported as deferred outflows of resources related to pensions resulting from
contributions subsequent to the measurement date will be recognized as a reduction of the NPL for
the fiscal year ending December 31, 2017. Other amounts reported as deferred outflows of resources
related to pensions will be recognized as pension expense as follows:
Year Ended
Pension
December 31:
Expense
2017
$ 1,127,105
2018
1,122,202
2019
882,636
2020
528,997
2021
Thereafter
-
Total
$ 3,660,940
Other Post Employment Benefits
1. Healthcare Plan
Plan Description
The City of West University Place Retiree Health Care Plan (the "Plan") is a single employer
defined benefit healthcare plan administered by the City. The Plan provides medical benefits to
eligible retirees and their spouses.
Employees Hired January 1, 2009 and Thereafter
A retiree and his or her covered dependent(s) may be eligible for continued coverage through
COBRA according to regulatory requirements. Retirees may not add dependents after retiring.
Retirees are responsible for all costs, including premiums and administrative fees, associated with
COBRA benefits. Retiree /dependent COBRA benefits will be terminated if the City (or the City's
third -party administrator) does not receive the required contributions by the date due.
Employees Hired Prior to January 1, 2009
Non - exempt Employees — If a non - exempt employee retires through TMRS and has been employed
full -rime for the City for at least ten years immediately preceding the date of retirement, the
employee may continue to be covered through the City's Plan.
70
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
Exempt Employees — If an exempt employee retires through TMRS and has a minimum of ten years
of service credit with TMRS, of which three years immediately preceding the date of retirement
were with the City, the employee may continue to be covered through the City's Plan. The benefit
includes basic medical coverage, excluding accidental death, life, disability, and dental.
The City pays 100 percent of the premium for the retiree. Spouses and dependents are eligible for
continued coverage. Retirees are responsible for all costs associated with spouse and dependent
benefits. Surviving spouses of deceased retirees are eligible for continued coverage through COBRA
according to regulatory requirements. All benefits terminate when the retiree becomes eligible for
Medicare or other federal or state health insurance plans or if the retiree becomes employed.
Employees who retire under a disability retirement are eligible for retiree health benefits if they have
met the eligibility for a regular retirement upon their disability. The TMRS retirement requirement is
five years of service at age 60 or 20 years of service regardless of age.
Funding Policy
The contribution requirements of Plan members and the City are established and may be amended by
the Council. Funding is provided on a pay -as- you -go basis.
Annual Other Post Employment Emplovee Benefit Cost
The City's annual Other Post Employment Benefits (OPEB) cost (expense) is calculated based on
the Annual Required Contribution (ARC) of the employer, an amount actuarially determined in
accordance with the parameters of GASB Statement No. 45. The ARC represents a level of accrual
that, if paid on an ongoing basis, is projected to cover the normal cost each year and to amortize any
unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years.
The annual OPEB cost for the fiscal year ending December 31, 2016 is as follows:
Annual required contribution
$ 280,784
Interest on net OPEB obligation
40,181
Adjustment to annual required contribution
(53,620)
Annual OPEB cost (expense)
267,345
Contributions made
(188,260)
Increase in net OPEB obligation
79,085
Net OPEB obligation- beginning of year
892,913
Net OPEB obligation -end of year
$ 971,998
The City's annual OPEB cost, the amount contributed by the City, the percentage of annual OPEB
cost contributed to the Plan, and the net OPEB obligation for fiscal year ending December 31, 2016
and the two preceding fiscal years are as follows:
Fiscal Year 0
0
2014 $
$ 343,719
2015 $
$ 267,936
2016 $
$ 267,345
Cast Contributed Cost Contributed
$ 318,101
$ 228,676
$ 188,260
71
92.50%
85.30%
70.42%
Net OPEB Oblisation
Beginning Ending
$ 828,035 $ 853,653
$ 853,653 $ 892,913
$ 892,913 $ 971,998
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
Funded Status
As of December 31, 2014, the most recent actuarial valuation date, the City's Plan was zero percent
funded with an estimated actuarial accrued liability exceeding actuarial assets by $2,633,126. The
annual covered payroll as of that date was $7,803,300, and the ratio of the unfunded actuarial
accrued liability to annual covered payroll was 33.7 percent.
Actuarial Methods and Assumptions
The Projected Unit Credit Cost method is used to calculate the GASB ARC for the City's retiree
health care plan. Using the plan benefits, the present health premiums and a set of actuarial
assumptions, the anticipated future payments are projected. The actuarial costs method then provides
for a systematic funding for these anticipated payments. The yearly ARC is computed to cover the
cost of benefits being earned by covered members as well as to amortize a portion of the unfunded
accrued liability.
Projections of health benefits are based on the plan as understood by the City and include the types
of benefits in force at the valuation date and the pattern of sharing benefit costs between the City and
its employees to that point. Actuarial calculations reflect a long -term perspective and employ
methods and assumptions that are designed to reduce short-term volatility in actuarial accrued
liabilities and the actuarial value of assets.
Significant methods and assumptions were as follows:
Actuarial Cost Method
Amortization Method
Amortization Period
Investment Rate of Return
Inflation rate
Healthcare Cost Trend Rate
Projected unit credit
Level dollar
30 year, open amortization
4.50°/x, net of expenses
3.00% per year
Initial rate of 7.25% declining to an ultimate
rate of 4.50% after 14 years
Actuarial valuations involve estimates of the value of reported amounts and assumptions about the
probability of events in the future. Amounts determined regarding the funded status and the ARC of
the City's retiree health care plan are subject to continual revision as actual results are compared to
past expectations and new estimates are made about the future. The required schedule of funding
progress, presented as RSI, provides multi -year trend information that shows whether the actuarial
value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities
for benefits.
2. TAM Supplemental Death Benefits Fund
Plan Description
The City also participates in the cost sharing multiple - employer defined benefit group -term life
insurance plan operated by 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.
72
CITY OF WEST UNIVERSITY PLACE, TEXAS
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2016
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; this coverage is an
"Other Post Employment Benefit," or OPEB. For the year ended December 31, 2016, the City
1 offered the supplemental death benefit to both active and retired employees.
J Contributions
.j 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 employees' entire careers.
The City's contributions to the TMRS SDBF for the years ended December 31, 2016, 2015, and
2014 were $4,442, $3,507, and $3,144, respectively, which equaled the required contributions each
I year.
A The City's contribution rates for the past three years are shown below:
2016
2015 2014
J Annual Req. Contrib. (Rate)
0.05%
0.04% 0.04%
1 Actual Contribution Made (Rate)
0.05%
0.04% 0.04%
Percentage of ARC Contrib.
100.00%
100.00% 100.00%
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REOUIRED S UPPLEMENTAR Y INFORMA TION
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1
J
J
J
CITY OF WEST UNIVERSITY PLACE, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
INFUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND
For the Year Ended December 31, 2016
Revenues
Taxes:
Ad valorem
Sales
Franchise
Other
Permits, licenses, and fees
Fines and forfeitures
Charges for services
Investment earnings
Other revenues
Total Revenues
Expenditures
General government:
Administration
Finance
Total general government expenditures
Public safety:
Police
Fire
Total public safety expenditures
Public works
Public service
Total Expenditures
$ 9,953,080
1,150,000
1,165,700
16,500
519,770
187,300
2,145,750
66,870
355,756
15,560,726
$ 9,953,080
1,150,000
1,165,700
16,500
519,770
187,300
2,145,750
66,870
355,756
15,560,726
$ 9,967,606
1,051,361
1,144,256
15,955
482,362
134,770
2,638,584
79,585
382,471
15,896,950
$ 14,526
(98,639)
(21,444)
(545)
(37,408)
(52,530)
492,834
12,715
26,715
336,224
1,405,564
Variance with
Original Final
Final Budget
Budget Budget
Actual Positive
Amounts Amounts
Amounts (Negative)
$ 9,953,080
1,150,000
1,165,700
16,500
519,770
187,300
2,145,750
66,870
355,756
15,560,726
$ 9,953,080
1,150,000
1,165,700
16,500
519,770
187,300
2,145,750
66,870
355,756
15,560,726
$ 9,967,606
1,051,361
1,144,256
15,955
482,362
134,770
2,638,584
79,585
382,471
15,896,950
$ 14,526
(98,639)
(21,444)
(545)
(37,408)
(52,530)
492,834
12,715
26,715
336,224
1,405,564
1,405,564
936,592
468,972
2,110,844
2,110,844
1,982,695
128,149
3,516,408
3,516,408
2,919,287
597,121
4,419,421
3,250,633
7,670,054
3,216,701
3,666,900
18,070,063
4,382,594
3,287,460
7,670,054
3,216,701
3,666,900
18,070,063
4,338,743
3,287,457
7,626,200
3,013,390
3,545,655
17,104,532
43,851
3
43,854
203,311
121,245
965,531
(Deficiency) of Revenues
(Under) Expenditures (2,509,337) (2,509,337) (1,207,582) 1,301,755
Other Financine Sources (Uses
J Transfers in
Transfers (out)
Sale of capital asset
J
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1,560,000
(500,000)
1,560,000
(500,000)
514,500
(500,000)
6,276
Total Other Financing Sources 1,060,000 1,060,000 20,776
(1,045,500)
6,276
(1,039,224)
Net Change in Fund Balance $ (1,449,337) $ (1,449,337) (1,186,806) $ 262,531
Beginning fund balance 7,124,684
Ending Fund Balance $ 5,937,878
Notes to Required Supplementary Information:
1. Annual budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP).
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CITY OF WEST UNIVERSITY PLACE, TEXAS
SCHEDULE OF CHANGES INNET PENSIONLIABILITYAND RELATED RATIOS
TEXAS MUNICIPAL RETIREMENT SYSTEM
For the Year Ended December 31, 2016
Total Pension Liability
Service cost
Interest (on the total pension liability)
Changes of benefit terms
Difference between expected and actual
experience
Change of assumptions
Benefit payments, including refunds of
Measurement Year*
2014 2015
$ 1,163,400 $ 1,417,162
2,744,057 2,907,623
440,869 485,089
- 946,917
employee contributions (2,123,925) (2,153,197)
Net Change in Total Pension Liability 2,224,401 3,603,594
Beginning total pension liability 39,681,083 41,905,484
Ending Total Pension Liability $ 41,905,484 $ 45,509,078
Plan Fiduciary Net Position
Contributions - employer
Contributions - employee
Net investment income
Benefit payments, including refunds of
$ 799,153 $ 1,046,460
550,058 614,567
2,131,607 56,952
employee contributions
(2,123,925)
(2,153,197)
Administrative expense
(22,258)
(34,692)
Other
(1,830)
(1,713)
Net Change in Plan Fiduciary Net Position
1,332,805
(471,623)
Beginning plan fiduciary net position
37,266,313
38,599,118
Ending Plan Fiduciary Net Position $
38,599,118 $
38,127,495
Net Pension Liability $
3,306,366 S
7,381,583
Plan Fiduciary Net Position as a
Percentage of Total Pension Liability
Covered Employee Payroll
92.11% 83.78%
$ 7,803,300 $ 8,767,969
Net Pension Liability as a Percentage
of Covered Employee Payroll 42.37% 84.19%
*Only two years of information is currently available, The City will build this schedule over the next eight -year period.
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CITY OF WEST UNIVERSITY PLACE, TEXAS
SCHEDULE OF CONTRIBUTIONS
TEXAS MUNICIPAL RETIREMENT SYSTEM
For the Year Ended December 31, 2016
Actuarially determined contribution
Contributions in relation to the actuarially
determined contribution
Contribution deficiency (excess)
Covered employee payroll
Contributions as a percentage of covered
employee payroll
Fiscal Year*
2014 2015 2016
$ 799,153 $ 1,045,142 $ 1,139,862
(799,153) (1,045,142) (1,139,862)
$ 7,803,300 $ 8,767,969 $ 8,884,334
10.24% 11.92% 12.83%
*Only three years of information is currently available. The City will build this schedule over the next seven -year period.
Notes to Required Supplementary Information:
1. Valuation Date:
Actuarially determined contribution rates are calculated as of December 31 and become effective in January,
13 months later.
2. Methods and Assumptions Used to Determine Contribution Rates:
Actuarial cost method Entry age normal
Amortization method Level percentage of payroll, closed
Remaining amortization period 30 years
Asset valuation method 10 year smoothed market; 15% soft corridor
Inflation 2.5%
Salary increases 3.50% to 10.5% including inflation
Investment rate of return 6.75%
Retirement age Experience -based table of rates that are specific to the City's plan of benefits. Last
updated for the 2015 valuation pursuant to an experience study of the period 2010-
2014.
Mortality RP2000 Combined Mortality Table with Blue Collar Adjustment with male rates
multiplied by 109% and female rates multiplied by 103% and projected on a fully
generational basis with scale BB.
3. Other Information:
There were no benefit changes during the year.
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CITY OF WEST UNIVERSITY PLACE, TEXAS
SCHEDULE OF FUNDINGPROGRESS
POST EMPLOYMENT HEALTHCARE BENEFITS
For the Year Ended December 31, 2016
Actuarial
Accrued
Liability
UAAL as a
Actuarial (AAL) - Unfunded
Annual
Percentage
Actuarial
Value of Projected AAL Funded
Covered
of Covered
Valuation
Assets Unit Credit (UAAL) Ratio
Payroll
Payroll
Date
(a) (b) (b-a) (a/b)
(c)
J(b-a) /c]
12/31/07
$ - $ 2,875,330 $ 2,875,330 0.0%
$ 6,848,075
42.0%
12/31/09
$ - $ 3,300,494 $ 3,300,494 0.0%
$ 6,848,075
48.2%
12/31/11
$ - $ 3,349,018 $ 3,349,018 0.0%
$ 7,764,719
43.1%
12/31/14
$ - $ 2,633,126 $ 2,633,126 0.0%
$ 7,803,300
33.7%
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COMBINING STATEMENTS
AND SCHEDULES
FQ
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CITY OF WEST UNIVERSITY PLACE, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
INFUND BALANCE - BUDGET AND ACTUAL
DEBT SERVICE FUND
For the Year Ended December 31, 2016
Other Financing Sources (Uses
Transfers in 383,950 1,193,563 1,193,563 -
Transfers (out) - (3,045,820) (3,045,819) 1
Debt issued - 3,170,000 3,170,000 -
Total Other Financing Sources 383,950 1,317,743 1,317,744 1
Net Change in Fund Balance $ 345,900 S 345,900
Beginning fund balance
Ending Fund Balance
87
346,442 $ 542
566,276
$ 912,718
Variance with
Original
Final
Final Budget
Budget
Budget
Actual
Positive
Amounts
Amounts
Amounts
(Negative)
Revenues
Ad valorem taxes
$ 8,069,500
$ 8,084,617
$ 8,084,618
$ 1
Investment earnings
2,500
5,140
5,675
535
Total Revenues
8,072,000
8,089,757
8,090,293
536
Expenditures
Debt service:
Principal
6,580,000
7,370,000
7,370,000
-
Interest and fiscal agent fees
1,530,050
1,544,985
1,544,984
1
Bond issuance costs
-
43,925
43,923
2
Payment to refunded bond escrow agent
71,785
71,785
-
Advance refunding escrow
-
30,905
30,903
2
Total Expenditures
8,110,050
9,061,600
9,061,595
5
(Deficiency) of Revenues
(Under) Expenditures
(38,050)
(971,843)
(971,302)
541
Other Financing Sources (Uses
Transfers in 383,950 1,193,563 1,193,563 -
Transfers (out) - (3,045,820) (3,045,819) 1
Debt issued - 3,170,000 3,170,000 -
Total Other Financing Sources 383,950 1,317,743 1,317,744 1
Net Change in Fund Balance $ 345,900 S 345,900
Beginning fund balance
Ending Fund Balance
87
346,442 $ 542
566,276
$ 912,718
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CITY OF WEST UNIVERSITY PLACE, TEXAS
NONMAJOR GOVERNMENTAL FUNDS
i December 31, 2016
SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted,
J commited, or assigned to expenditure for specified purposes other than debt service or capital projects.
J Parks Fund
This fund is used to account for donations made by citizens for the specific purpose of improving the City's parks.
Friends of West University Parks Fund
This fund is used to account for the financial activity of the Friends of West University Parks. This fund's revenues are
restricted to use in improving the City's parks.
Tree Replacement Fund
This fund is used to account for permits and fines collected to replace trees within the City.
Court Technology /Security Fund
This fund is used to account for a portion of traffic fines revenue set aside to acquire technology and provide security for
the municipal court.
1 METRO Grant Fund
J This fund is used to account for the proceeds of a multi -year transportation grant from METRO.
Emergency Grant Fund
1 This fund is used to account for the proceeds for disaster reimbursement.
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CAPITAL PROJECTS FUNDS
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Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or
assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital
assets.
Capital Projects Fund
This fund is used to account for a wide range of construction projects and the acquisition of very costly capital
equipment.
Capital Reserve Fund
This fund is used to hold reserve funds to be spent on capital construction projects in the future.
Drainage Improvement Fund
This fund is used to account for the cost and financing of a major project to improve City drainage.
2011 Certificates of Obligation
This fund is used to account for bonds issued to finance the construction for the College Street Transportation Drainage
Project.
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CITY OF WEST UNIVERSITY PLACE, TEXAS
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2016
Special Revenue Funds
Court
Friends of Tree Technology/
Parks the Parks Replacement Security
Assets
Current assets:
Cash and equity in pooled cash
and investments $ 16,389 $ - $ 227,615 $ 45,494
Cash and cash equivalents - 598,254 - -
Investments - 455,045
Accounts receivable 51,022 - - -
Prepaid items - 1,600 - -
Total Assets $ 67,411 $ 1,054,899 $ 227,615 $ 45,494
Liabilities and Fund Balances
Liabilities:
Accounts payable
Due to other funds
Fund balances:
Nonspendable:
Prepaid items
Restricted for:
Enabling legislation
City parks
METRO
Special projects
Assigned to:
Tree replacement
Capital projects funds
$ 6,540
20,755
Total Liabilities 27,295
$ S 2,840 $
2,840
1,600
40,116 1,053,299
224,775
45,494
Total Fund Balances
40,116
1,054,899
224,775
45,494
Total Liabilities and Fund Balances $
67,411 $
1,054,899 S
727,615 $
45,494
e
Special Revenue Funds Capital Projects Funds
2011
METRO Emergency Capital Capital Drainage Certificates of
Grant Grant Projects Reserve Improvement Obligation
$ 125,859 $ 19,774 $ 225,293 S 348,005 S 1,190,215 $
106,218
$ 232,077 $ 19,774 $ 225,293 $ 348,005 $ 1,190,215 $
$ - $ $ 105,406 $ - $ 3,375 $
105,406 3,375
232,077 -
19,774
- - 119,887 348,005 1,186,840
232,077 19,774 119,887 348,005 1,186,840
S 232,077 $ 19,774 $ 225,293 $ 348,005 $ 1,190,215 S
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CITY OF WEST UNIVERSITY PLACE, TEXAS
COMBINING BALANCE SHEET
NONM4JOR GOVERNMENTAL FUNDS (Continued)
December 31, 2016
Assets
Current assets:
Cash and equity in pooled cash
and investments
Cash and cash equivalents
Investments
Accounts receivable
Prepaid items
Total
Nonmajor
Governmental
Funds
$ 2,198,644
598,254
455,045
157,240
1,600
Total Assets $ 3,410,783
Liabilities and Fund Balances
Liabilities:
Accounts payable $ 118,161
Due to other funds 20,755
Total Liabilities 138,916
Fund balances:
Nonspendable:
Prepaid items
1,600
Restricted for:
Enabling legislation
45,494
City parks
1,093,415
METRO
232,077
Special projects
19,774
Assigned to:
Tree replacement
224,775
Capital projects funds
1,654,732
Total Fund Balances
3,271,867
Total Liabilities and Fund Balances $
3,410,783
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CITY OF WEST UNIVERSITY PLACE, 'TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2016
Revenues
Fines and forfeitures
Permits, licenses, and fees
Intergovernmental
Contributions
Investment earnings
Other revenues
Expenditures
Current:
General government
Public works
Public services
Capital outlay
Special Revenue Funds
Court
Friends of Tree Technology/
Parks the Parks Replacement Security
$ $ $ - $ 7,854
73,091 -
72,824 506,806 - -
225 3,484 1,302 288
352,642
Total Revenues 425,691 510,290 74,393 8,142
407,611
650,717 35,587
Total Expenditures 407,611 650,717 35,587
Excess (Deficiency) of Revenues
Over (Under) Expenditures 18,080 (140,427) 38,806 8,142
Other Financing Sources (Uses)
Transfers in
Transfers (out)
Total Other Financing Sources (Uses) - - - -
Net Change in Fund Balances 18,080 (140,427) 38,806 8,142
Beginning fund balances 22,036 1,195,326 185,969 37,352
Ending Fund Balances S 40,116 $ 1,054,899 $ 224,775 $ 45,494
M
Special Revenue Funds Capital Projects Funds
2011
METRO Emergency Capital Capital Drainage Certificates of
Grant Grant Projects Reserve Improvement Obligation
$ $ S $ $ $
525,681 20,918
784 33 1,400 2,809 6,256
526,465 33 22,318 2,809 6,256
95
132,000
-
-
10,142
290,059
42,933
-
-
290,059
132,000
10,142
42,933
526,465
33
(267,741)
(129,191)
(3,886)
(42,933)
-
-
325,000
500,000
500,000
(500,000)
-
(325,000)
(500,000)
-
325,000
175,000
500,000
26,465
33
57,259
45,809
496,114
(42,933)
205,612
19,741
62,628
302,196
690,726
42,933
$ 232,077 $
19,774 $
119,887 $
348,005 S
1.186,840 S
-
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CITY OF WEST UNIVERSITY PLACE, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS (Continued)
For the Year Ended December 31, 2016
Revenues
Fines and forfeitures
Permits, licenses, and fees
Intergovernmental
Contributions
Investment earnings
Other revenues
Expenditures
Current:
General government
Public works
Public services
Capital outlay
Total
Nonmajor
Governmental
Funds
$ 7,854
73,091
546,599
579,630
16,581
352,642
Total Revenues 1,576,397
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
Transfers in
Transfers (out)
539,611
10,142
686,304
332,992
1,569,049
7,348
1,325,000
(825,000)
Total Other Financing Sources (Uses) 500,000
Net Change in Fund Balances 507,348
Beginning fund balances 2,764.519
Ending Fund Balances $ 3,271,867
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CITY OF WEST UNIVERSITY PLACE, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
INFUND BALANCES - BUDGET AND ACTUAL
NONMAJOR SPECIAL REVENUE FUNDS
For the Year Ended December 31, 2016
Parks
Revenues
Contributions 5
5,000 $
Variance with
Original
Final
Final Budget
Budget
Budget
Actual Positive
Amounts
Amounts
Amounts (Negative)
Revenues
Contributions 5
5,000 $
53,225 $
72,824 $
19,599
Investment earnings
-
-
225
225
Other revenues
-
352,387
352,642
255
Total Revenues
5,000
405,612
425,691
20,079
Expenditures
General government
7,000
407,612
407,611
1
Total Expenditures
7,000
407,612
407,611
1
Net Change in Fund Balance $
(2,000) $
(2,000)
18,080 $
20,080
Beginning fund balance
Ending Fund Balance
22,036
$ 40,116
CITY OF WEST UNIVERSITY PLACE, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
NONMAJOR SPECL4L REVENUE FUNDS
JFor the Year Ended December 31, 2016
Tree Replacement
J
Variance with
Original Final
Final Budget
Budget Budget Actual
Positive
Amounts Amounts Amounts
(Negative)
J
Revenues
Permits, licenses, and fees S 25,000 $ 25,000 73,091
$ 48,091
J Investment earnings - - 1,302
1,302
Total Revenues 25,000 25,000 74,393
49,393
jExpenditures
Public services 35,000 60,000 35,587
24,413
Total Expenditures 35,000 60,000 35,587
24,413
Net Change in Fund Balance $ (10,000) S (35,000) 38,806
$ 73,806
Beginning fund balance 185,969
Ending Fund Balance $ 224,775
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CITY OF WEST UNIVERSITY PLACE, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
INFUND BALANCES - BUDGET AND ACTUAL
NONMAJOR SPECIAL REVENUE FUNDS
For the Year Ended December 31, 2016
Court Technology /Security
Revenues
Fines and forfeitures $
10,500 $
Variance with
Original
Final
Final Budget
Budget
Budget
Actual Positive
Amounts
Amounts
Amounts (Negative)
Revenues
Fines and forfeitures $
10,500 $
10,500 $
7,854 $
(2,646)
Investment earnings
-
-
288
288
Total Revenues
10,500
10,500
8,142
(2,358)
Expenditures
General government
23,000
23,000
-
23,000
Total Expenditures
23,000
23,000
-
23,000
Net Change in Fund Balance $
(12,500) $
(12,500)
8,142 $
20,642
Beginning fund balance
Ending Fund Balance
100
37,352
$ 45,494
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CITY OF WEST UNIVERSITY PLACE, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
INFUND BALANCES - BUDGET AND ACTUAL
NONMAJOR SPECIAL REVENUE FUNDS
For the Year Ended December 31, 2016
METRO Grant
Variance with
Original Final Final Budget
Budget Budget Actual Positive
Amounts Amounts Amounts (Negative)
Revenues
Intergovernmental $
500,000 $
500,000 $
525,681 $
25,681
Investment earnings
300
300
784
484
Total Revenues
500,300
500,300
526,465
26,165
Other Financing Sources (Uses)
Transfers (out)
(500,000)
(500,000)
(500,000)
Total Other Financing (Uses)
(500,000)
(500,000)
(500,000)
Net Change in Fund Balance $
300 $
300
26,465 S
26,165
Beginning fund balance
205,612
Ending Fund Balance
$
232,077
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CITY OF WEST UNIVERSITY PLACE, TEXAS
INTERNAL SERVICE FUNDS
December 31, 2016
Vehicle Replacement Fund
This internal service fund is used to account for and report vehicle replacement and maintenance services to
departments or agencies of the City on a cost reimbursement basis.
Equipment Replacement Fund
This internal service fund is used to account for and report equipment replacement and maintenance services to
departments or agencies of the City on a cost reimbursement basis.
Healthcare Benefits Fund
This internal service fund is used to account for and report the costs associated with healthcare benefits to
departments or agencies of the City on a cost reimbursement basis, as well as costs associated with retired and
separated employees.
Technology Management Fund
This internal service fund is used to account for and report the costs associated with technology management
services to departments or agencies of the City on a cost reimbursement basis.
103
CITY OF WEST UNIVERSITY PLACE, TEXAS
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
December 31, 2016
104
Vehicle
Equipment
Healthcare
Technology
Replacement
Replacement
Benefits
Management
Assets
Current assets:
Equity in pooled cash and investments $
1,661,650
$ 1,040,826
$ 954,900 $
301,413
Prepaid costs
-
-
227,302
-
Total Current Assets
1,661,650
1,040,826
1,182,202
301,413
Noncurrent assets:
Capital assets:
Machinery and equipment
2,840,544
137,809
-
Less: accumulated depreciation
(1,971,557)
(13,781)
Total Capital Assets (Net of
Accumulated Depreciation)
868,987
124,028
Total Noncurrent Assets
868,987
124,028
-
Total Assets
2,530,637
1,164,854
1,182,202
301,413
Deferred Outflows of Resources
Deferred outflows - pension
-
-
-
182,796
Liabilities
Current liabilities:
Accounts payable
-
-
96,026
116,160
Total Current Liabilities
-
-
96,026
116,160
Noncurrent liabilities:
Compensated absences
-
-
-
54,559
Net pension liability
-
-
-
281,063
Net OPEB obligation
-
-
-
32,400
Total Noncurrent Liabilities
-
-
-
368,022
Total Liabilities
-
-
96,026
484,182
Net Position
Net investment in capital assets
868,987
124,028
-
-
Unrestricted
1,661,650
1,040,826
1,086,176
27
Total Net Position $
2,530,637
$ 1,164,854
$ 1,086,176 $
27
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Total
Internal
Service Funds
$ 3,958,789
227,302
4,186,091
2,978,353
(1,985,338)
993,015
993,015
5,179,106
182,796
212,186
212,186
54,559
281,063
32,400
368,022
580,208
993,015
3,788,679
$ 4,781,694
105
CITY OF WEST UNIVERSITY PLACE, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2016
Vehicle
Equipment
Healthcare
Technology
Replacement
Replacement
Benefits
Management
Operatine Revenues
Depreciation
255,449
13,781 -
Charges for sales and services $ 606,000
$ 868,325
$ 2,252,053
$ 1,668,250
Other revenues -
10,351
5,722
125
Total Operating Revenues 606,000
878,676
2,257,775
1,668,375
Operating Exoenses
Repairs and maintenance
47,149
- 46,005
Costs of sales and services
-
2,035,255 863,678
Personnel
-
- - 558,699
Depreciation
255,449
13,781 -
Total Operating Expenses
302,598
13,781 2,035,255 1,468,382
200,843
Operating Income
303,402
864,895 222,520 199,993
Nononeratine Revenues (Exoenses
Investment earnings
9,365
4,742
850
Gain on sale of capital assets
27,503
6,500
-
Total Nonoperating Revenues
36,868
11,242 -
850
Change in Net Position
340,270
876,137 222,520
200,843
Beginning net position
2,190,367
288,717 863,656
(200,816)
Ending Net Position $
2,530,637 $
1,164,854 $ 1,086,176 $
27
106
Total
Internal
Service Funds
S 5,394,628
16,198
5,410,826
93,154
2,898,933
558,699
269,230
3,820,016
1,590,810
14,957
34,003
48,960
1,639,770
3,141,924
S 4,781,694
107
CITY OF WEST UNIVERSITY PLACE, TEXAS
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2016
Vehicle Equipment Healthcare Technology
Replacement Replacement Benefits Management
Cash Flows from Operating Activities
Receipts from customers and users $ - $ 10,351 $ 2,259,316 $ 125
Receipts from interfund charges for services 606,000 868,325 - 1,668,250
Payments to suppliers (77,845) - (2,043,239) (882,078)
Payments to employees - - - (515,431)
Net Cash Provided
by Operating Activities 528,155 878,676 216,077 270,866
Cash Flows from Capital and Related
Financing Activities
Acquisition, disposal, and
construction of capital assets (108,123) (137,809)
Proceeds from sale of capital assets 27,503 6,500
Net Cash (Used) by Capital and
Related Financing Activities (80,620) (131,309)
Cash Flows from Investing Activities
Interest received 9,365 4,742
Net Cash Provided by Investing Activities 9,365 4,742
850
850
Net Increase in Equity
in Pooled Cash and Investments 456,900 752,109 216,077 271,716
Beginning equity in pooled cash and investments 1,204,750 288,717 738,823 29,697
Ending Equity in Pooled Cash and Investments T-1,661,650 $ 1,040,826 $ 954,900 $ 301,413
Reconciliation of Operating Income
(Loss) to Net Cash Provided (Used) by
Operating Activities:
Operating income
Adjustments to reconcile operating income
to net cash provided by operating activities:
Depreciation
Changes in Operating Assets and Liabilities:
(Increase) decrease in assets:
Receivables
Prepaid costs
Deferred outflows - pension
Increase (decrease) in liabilities:
Accounts payable
Compensated absences
Net pension liability
Net OPEB obligation
$ 303,402 $ 864,895 $ 222,520 $ 199,993
255,449 13,781 - -
1,541
(26,213)
- (115,927)
(30,696) 18,229 27,605
- 1,390
155,169
2,636
Net Cash Provided
by Operating Activities $ 528,155 $ 878,676 $ 216,077 $ 270,866
i
l
1J
J
J
J
J
J
J
J
J
J
Total
Internal
Service Funds
$ 2,269,792
3,142,575
(3,003,162)
(515,431)
1,893,774
(245,932)
34,003
(211,929)
14,957
14,957
1,696,802
2,261,987
$ 3,958,789
$ 1,590,810
269,230
1,541
(26,213)
(115,927)
15,138
1,390
155,169
2,636
$ 1,893,774
109
(This page intentionally left blank.)
110
STATISTICAL SECTION
J
This part of the City's comprehensive annual financial report presents detailed information as a context for
understanding what the information in the financial statements, note disclosures, and Required
Supplementary Information says about the City's overall financial health.
Contents Page
1 Financial Trends 112
These schedules contain trend information to help the reader understand how the City's financial
performance and well -being have changed over time.
Revenue Capacity 124
These schedules contain information to help the reader assess the City's most significant local revenue
source, property tax.
Debt Capacity 134
J These schedules present information to help the reader assess the affordability of the City's current levels
of outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information 144
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the City'sfnancial activities take place.
Operating Information 147
1, These schedules contain service and infrastructure data to help the reader understand how the information
J in the City's financial report relates to the services the City provides and the activities itperforms.
ill
CITY OF WEST UNIVERSITY PLACE, 'TEXAS
NET POSITIONBY COMPONENT
Last Ten Years
(accrual basis of accounting)
Fiscal Year
2007 2008 2009
Governmental Activities
Net investment in capital assets $
17,515,320
$ 24,421,719
$ 32,145,988
$ 25,112,652
Restricted
4,491,985
6,470,948
2,466,227
1,977,589
Unrestricted
2,566,351
1,910,197
1,262,360
5,341,671
Total Governmental Activities Net Position $
24,573,656
$ 32,802,864
$ 35,874,575
$ 32,431,912
Business -Type Activities
Net investment in capital assets $
19,768,267
$ 18,512,926
$ 17,662,268
$ 22,196,178
Restricted
1,186,557
715,000
745,000
785,000
Unrestricted
186,418
1,640,695
1,841,953
2,343,524
Total Business -Type Activities Net Position $
21,141,242
$ 20,868,621
$ 20,249,221
$ 25,324,702
Primary Government
Net investment in capital assets $
37,283,587
$ 42,934,645
$ 49,808,256
$ 47,308,830
Restricted
5,678,542
7,185,948
3,211,227
2,762,589
Unrestricted
2,752,769
3,550,892
3,104,313
7,685,195
Total Primary Government Net Position $
45,714,898
$ 53,671,485
$ 56,123,796
$ 57,756,614
*Restated balances
112
J
J
J
Fiscal Year
2011* 2012* 2013 2014 2015* 2016
$ 30,510,547
$ 31,464,253
$ 34,881,486
$ 38,347,094
$ 41,205,468
$ 42,663,233
1,315,036
2,260,764
2,197,619
1,580,648
2,246,833
2,543,238
872,283
1,987,281
2,782,110
4,384,210
6,835,390
7,093,032
$ 32,697,866
$ 35,712,298
$ 39,861,215
$ 44,311,952
$ 50,287,691
$ 52,299,503
$ 21,612,826
$ 21,320,705
$ 20,285,944
$ 20,173,279
$ 19,314,692 $ 21,128,592
720,000
645,000
675,000
695,000
725,000 -
4,000,276
3,965,913
4,634,652
3,029,424
810,299 2,207,920
$ 26,333,102
$ 25,931,618
$ 25,595,596
$ 23,897,703
$ 20,849,991 $ 23,336,512
$ 52,123,373
$ 52,784,958
$ 55,167,430
$ 58,520,373
$ 60,520,160
$ 63,791,825
2,035,036
2,905,764
2,872,619
2,275,648
2,971,833
2,543,238
4,872,559
5,953,194
7,416,762
7,413,634
7,645,689
9,300,952
$ 59,030,968
$ 61,643,916
$ 65,456,811
$ 68,209,655
$ 71,137,682
$ 75,636,015
113
CITY OF WEST UNIVERSITY PLACE, TEXAS
CHANGES IN NET POSITION
Last Ten Years
(accrual basis of accounting)
Expenses
Governmental activities
General government
Public safety
Public works
Public services
Interest and fiscal agent fees on long -term debt
Total Governmental Activities Expenses
Business -type activities
Fiscal Year
r
2007
2008
2009
2010 pl
$ 4,552,568
$ 2,387,061 $
2,841,391
$ 3,150,380
4,904,003
5,593,513
6,217,723
6,287,887
3,288,626
2,925,781
4,046,079
4,549,951
1,972,400
3,894,834
4,421,189
2,734,441
3,169,545
3,195,884
2,860,685
3,453,311
17,887,142
17,997,073
20,387,067
20,175,970
Business -type activities
Water and sewer
5,297,894
5,752,744
5,686,180
5,415,974
Solid waste
918,984
996,582
1,161,724
1,111,560
Total Business -Type Activities Expenses
6,216,878
6,749,326
6,847,904
6,527,534
Total Expenses
$
24,104,020
$
24,746,399
$
27,234,971
$
26,703,504
Program Revenues
Governmental activities
Charges for services
General government
$
3,523,007
S
-
$
-
$
- rl
Public safety
196,070
817,411
525,650
734,150 LJ
Public works
-
-
-
-
Public services
580,869
1,402,881
4,237,581
1,656,098
Operating grants and contributions
843,941
1,675,641
360,310
263,780
Capital grants and contributions
-
5,291,500
134,821
369,316
Total Governmental Activities Program Revenues
5,143,887
9,187,433
5,258,362
3,023,344 n
V`11
Business -type activities
Charges for services
Water and sewer
4,702,577
5,912,369
6,151,138
5,917,931
Solid waste
930,705
1,452,975
1,096,652
1,486,413 i
Total Business -Type Activities Program Revenues
5,633,282
7,365,344
7,247,790
7,404,344
Total Program Revenues
$
10,777,169
$
16,552,777
$
12,506,152
$
10,427,688
Net (Expense)/Revenue
Governmental activities
$
(12,743,255)
$
(8,809,640)
$
(15,128,705)
$
(17,152,626)
Business -type activities
_$__(13,326,851)
(583,596)
616,018
399,886
876,810
Total Net Expense
$
(8,193,622)
$
(14,728,819)
$
(16,275,816)
114 i
1
Fiscal Year
2011 2012 2013 2014
2015
$ (17,893,741) $ (16,569,007) $ (16,133,972) $ (16,267,637) $ (16,473,432) $ (17,861,100)
2,524,489 1,452,337 1,597,544 238,105 (974,596) 1,133,368
$ (15,369,252) $ (15,116,670) $ (14,536,428) $ (16,029,532) $ (17,448,028) $ (16,727,732)
i
115
J$ 2,785,502
$
3,208,930
$
3,049,656
$
3,811,192
$
3,948,145
$
3,871,442
5,870,061
6,211,784
6,515,194
6,176,586
6,773,509
7,563,086
5,176,660
4,240,301
3,944,561
3,693,099
4,009,850
4,603,321
3,858,501
4,158,008
4,433,865
4,741,209
4,560,152
4,518,987
3,351,762
2,633,700
2,178,324
1,986,301
1,765,809
1,767,154
21,042,486
20,452,723
20,121,600
20,408,387
21,057,465
22,323,990
6,927,509
6,409,131
6,092,231
6,918,092
8,150,632
6,582,306
1,322,082
1,427,997
1,376,583
1,225,806
1,221,960
1,277,986
8,249,591
7,837,128
7,468,814
8,143,898
9,372,592
7,860,292
$ 29,292,077
$
28,289,851
$
27,590,414
$
28,552,285
$
30,430,057
$
30,184,282
J 743,486
818,182
1,009,760
187,347
198,840
142,624
-
-
-
711,155
665,089
555,453
1,785,518
2,160,728
2,264,753
2,448,489
2,607,192
2,638,584
259,000
300,048
259,000
145,819
558,668
546,599
360,741
604,758
454,115
647,940
554,244
579,630
3,148,745
3,883,716
3,987,628
4,140,750
4,584,033
4,462,890
J
8,986,444
7,777,386
7,623,233
6,868,133
6,986,297
7,172,469
1,787,636
1,512,079
1,443,125
1,513,870
1,411,699
1,821,191
10,774,080
9,289,465
9,066,358
8,382,003
8,397,996
8,993,660
$ 13,922,825
$
13,173,181
$
13,053,986
$
12,522,753
$
12,982,029
$
13,456,550
$ (17,893,741) $ (16,569,007) $ (16,133,972) $ (16,267,637) $ (16,473,432) $ (17,861,100)
2,524,489 1,452,337 1,597,544 238,105 (974,596) 1,133,368
$ (15,369,252) $ (15,116,670) $ (14,536,428) $ (16,029,532) $ (17,448,028) $ (16,727,732)
i
115
CITY OF WEST UNIVERSITY PLACE, TEXAS
CHANGES INNET POSITION (Continued)
Last Ten Years
(accrual basis of accounting)
General Revenues and Other Changes
in Net Position
Governmental activities
Taxes
Ad valorem taxes, levied for general purposes $
Ad valorem taxes, levied for debt service
Sales taxes
Franchise and local taxes
Other taxes
Contributions
Investment earnings
Other revenues
Gain on sale of capital assets
Loss on sale of asset held for resale
Transfers 940,000 940,000 1,040,000
17,643,360 17,038,848 18,200,416
2007
6,219,953 $
6,738,071
1,026,948
933,834
15,010
891,760
622,787
254,997
Fiscal Year
2008 2009
6,487,224 $
6,300,879
1,042,096
1,312,260
15,643
257,869
394,218
288,659
7,319,407
6,756,375
946,726
1,162,420
12,485
306,410
210,481
446,112
Total Governmental Activities
2010
$ 8,004,202
7,098,065
1,050,079
1,207,429
11,144
73,035
424,381
32,466
(4,190,838)
13,709,963
Business -type activities
Investment earnings
39,173
51,361
20,715
7,833
Other revenues
362,559
-
-
-
Gain on disposal of capital assets
-
-
Transfers
(940,000)
(940,000)
(1,040,000)
4,190,838
Total Business -Type Activities
(538,268)
(888,639)
(1,019,285)
4,198,671
Total Primary Government $
17,105,092 $
16,150,209 $
17,181,131 $
17,908,634
Change in Net Position
Governmental activities $
4,900,105 $
8,229,208 $
3,071,711 $
(3,442,663)
Business -type activities
(1,121,864)
(272,621)
(619,399)
5,075,481
Total Change in Net Position $
3,778,241 $
7,956,587 $
2,452,312 $
1,632,818
116
Fiscal Year
2011
2012
2013
2014
2015
2016
1�
J
$ 7,962,210
$ 7,527,047 $
8,087,360 $
8,605,582
$ 9,360,277
$ 9,994,947
7,360,224
7,713,377
7,733,658
7,791,467
8,144,274
8,111,959
997,318
1,003,897
957,658
1,051,890
1,117,336
1,051,361
1,148,390
1,142,265
1,170,448
1,214,227
1,204,795
1,144,256
J 8,994
J
9,685
11,546
15,713
17,625
15,955
33,333
27,270
35,087
60,784
89,970
116,798
347,242
286,619
320,123
503,889
398,199
735,113
10,686
427
23,909
21,354
24,076
40,279
-
(68,150)
-
-
-
-
1,517,223
1,861,848
1,943,100
1,740,504
1,943,800
(1,337,756)
19,385,620
19,504,285
20,282,889
21,005,410
22,300,352
19,872,912
8,369
8,027
9,534
17,823
15,515
15,397
3,988
-
(1,517,223)
(1,861,848)
(1,943,100)
(1,740,504)
(1,943,800)
1,337,756
(1,508,854)
(1,853,821)
(1,933,566)
(1,722,681)
(1,924,297)
1,353,153
$ 17,876,766 $
17,650,464 $
18,349,323 $
19,282,729 $
20,376,055 $
21,226,065
$ 1,491,879 $
2,935,278 $
4,148,917 $
4,737,773 $
5,826,920 $
2,011,812
1,015,635
(401,484)
(336,022)
(1,484,576)
(2,898,893)
2,486,521
$ 2,507,514 $
2,533,794 $
3,812,895 $
3,253,197 $
2,928,027 $
4,498,333
117
CITY OF WEST UNIVERSITY PLACE, TEXAS
TAXREFENUESBYSOURCE, GOVERNMENTALACTIFITIES
Last Ten Years
(accrual basis of accounting)
118
Fiscal Year
Function
2007
2008
2009
2010
Property
$ 12,958,024
$ 12,788,103
$ 13,462,911
i
$ 15,102,267
Sales
1,026,948
1,042,096
11,553,199
1,050,079
Franchise
933,834
1,312,260
1,659,737
1,207,429
Othertaxes
15,010
15,643
2,400
11,144
$ 14,933,816
$ 15,158,102
$ 26,678,247
t,
$ 17,370,919
118
J
119
Fiscal Year
Change
2011
2012
2013
2014
2015
2016
2015 -2016
$ 15,322,434
$ 15,240,424
$ 15,821,018
$ 16,397,049
$ 17,504,551
$ 18,106,906
3.4%
997,318
1,003,897
957,658
1,051,890
1,117,336
1,051,361
-5.9%
1,148,390
1,142,265
1,170,448
1,214,227
1,204,795
1,144,256
-5.0%
8,994
9,685
11,546
15,713
17,625
15,955
-9.5%
$ 17,477,136
$ 17,396,271
$ 17,960,670
$ 18,678,879
$ 19,844,307
$ 20,318,478
2.4%
119
CITY OF WEST UNIVERSITY PLACE, TEXAS
FUND BALANCES, GOVERNMENTAL FUNDS (I)
Last Ten Years
Fiscal Year
2007 2008 2009 2010
General Fund
Reserved $ 429,437 $ 430,797 $ 444,508 $ 561,038
Unreserved 2,457,227 3,580,317 2,736,833 3,107,736
Nonspendable - - - -
Restricted - - - -
Assigned - - - -
Unassigned - - - -
Total General Fund $ 2,886,664 $ 4,011,114 $ 3,181,341 $ 3,668,774
All Other Governmental Funds
Reserved $ 2,067,501 $ 2,745,745 $
1,388,198 $
1,639,115
Unreserved, reported in:
Capital project funds 178,493 3,219,460
1,035,760
4,128,598
Special revenue funds 2,883,727 281,814
240,926
(20,470)
Nonspendable - -
-
-
Restricted - -
-
-
Assigned - -
-
-
Unassigned - -
-
-
Total All Other Governmental Funds $ 5,129,721 $ 6,247,019 $
2,664,884 $
5.747,243
(1) GASB Statement No. 54 requirement for statistical data is ten years with retroactive
implementation encouraged; only six fiscal years are available at this time. The City
chose not to restate 2007 to 2010.
*Restated balances
120
A
Fiscal Year
2011
2012*
2013
2014
2015
2016
$
$
$
$
$
$
130,265
134,564
157,515
170,933
171,887
180,188
410,238
95,322
127,437
163,999
202,862
239,760
210,000
210,000
210,000
210,000
210,000
3,538,757
3,823,951
4,181,880
5,351,558
6,539,935
5,307,930
$
4,079,260
$
4,263,837
$
4,676,832
$
5,896,490
$
7,124,684
$
5,937,878
$
$
$
$
$
$
2,372
2,372
2,372
2,372
2,372
1,600
1,890,177
2,244,596
2,070,182
1,416,649
2,086,904
2,303,478
528,575
734,460
1,215,634
900,045
1,241,519
1,879,507
(20,343)
(20,161)
(19,982)
$
J
J
2,400,781
$
2,961,267
$
3,268,206
$
2,319,066
$
3,330,795
$
4,184,585
J
J
]
121
CITY OF WEST UNIVERSITY PLACE, TEXAS
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
Last Ten Years
Revenues
Taxes
Pemits, licenses, and fees
Fines and forfeitures
Charges for services
Intergovernmental
Contributions
Investment earnings
Other revenues
Total Revenues
Expenditures
General government
Public safety
Public works
Public services
Capital outlay
Debt service
Principal
Interest
Bond issuance costs
Payment to refunded bond escrow agent
Advance refunding escrow
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
Transfers in
Transfers out
Issuance of debt
Premium on debt issued
Payment to refunded bond escrow agent
Sale of capital assets
Total Other Financing Sources
Fiscal Year
2007 2008 2009 2010
$ 14,681,206 $
15,471,664 $
16,197,413 $
17,362,337
580,869
495,127
351,120
461,419
196,070
322,284
174,530
272,731
1,381,586
1,402,881
1,186,941
1,656,098
843,941
6,967,141
495,131
263,780
891,760
257,869
306,410
369,316
602,593
379,164
205,371
71,447
250,408
265,397
430,180
394,071
19,428,433
25,561,527
19,347,096
20,851,199
2,312,853
2,329,591
2,638,596
2,919,174
4,931,044
5,242,522
6,091,415
5,956,779
1,927,231
1,935,450
2,167,936
2,586,314
1,785,093
3,869,698
3,803,862
2,127,336
3,738,838
4,113,991
13,290,611
10,645,694
3,612,472
3,780,922
3,969,515
3,903,250
3,188,875
2,987,603
2,848,046
3,214,201
-
-
226,636
419,931
24,259,777
31,772,679
21,496,406
35,036,617
(2,067,973)
1,301,750
(15,689,521)
(10,921,480)
4,931,336
4,618,732
4,065,742
2,017,451
(3,991,336)
(3,678,732)
(3,075,742)
(1,350,702)
13,035,000
24,630,000
283,639
859,692
(3,022,444)
(11,546,886)
-
-
-
32,466
940,000
940,000
11286,195
14,642,021
Net Change in Fund Balances $ (1,127,973) $ 2,241,750 $ (4,403,326) $ 3,720,541
Debt service as a percentage
of noncapital expenditures 38.30% 33.60% 31.68% 34.37"/
122
1
Fiscal Year
2011
2012
2013
2014
2015
2016
$ 17,469,999
$ 17,380,393
$ 17,934,252
$ 18,668,734
$ 19,797,518
$ 20,263,796
467,123
609,037
796,562
711,155
665,089
555,453
276,363
209,145
213,198
187,347
198,840
142,624
1,785,518
2,160,728
2,264,753
2,448,489
2,607,192
2,638,584
259,000
300,048
259,000
145,819
558,668
546,599
360,741
604,758
454,115
647,940
554,244
579,630
31,575
25,035
31,760
55,079
81,707
101,841
347,242
218,469
320,123
503,889
398,199
735,113
20,997,561
21,507,613
22,273,763
23,368,452
24,861,457
25,563,640
1
J 2,678,292
2,427,755
2,582,560
3,298,890
3,495,513
3,458,898
5,492,793
5,615,673
6,617,056
6,271,557
7,012,054
7,626,200
2,504,438
2,628,156
2,596,798
2,262,843
2,473,106
3,023,532
2,336,591
2,402,878
3,043,191
3,219,455
3,237,909
4,231,959
4,244,191
214,662
209,284
1,886,749
236,947
332,992
4,671,167
5,305,000
5,605,000
6,190,000
6,420,000
7,370,000
3,437,756
3,015,941
2,320,806
1,906,944
1,690,655
1,544,984
141,802
-
217,067
-
-
43,923
71,785
-
100,000
350,000
-
30,903
25,507,030
21,710,065
23,541,762
25,036,438
24,566,184
27,735,176
(4,509,469)
(202,452)
(1,267,999)
(1,667,986)
295,273
(2,171,536)
3,090,405
2,127,938
2,789,897
2,964,128
2,539,463
3,033,063
(2,542,851)
(1,419,885)
(1,010,591)
(1,025,624)
(595,663)
(4,370,819)
5,700,000
8,555,000
16,360,000
3,170,000
191,134
282,219
-
-
1 (4,868,423)
(8,676,911)
(16,151,373)
-
-
J 3,228
850
6,276
1,573,493
868,361
1,987,933
1,938,504
1,944,650
1,838,520
a
$ (2,935,976)
$ 665,909
$ 719,934 $
270,518 $
2,239,923 $
(333,016)
38.39%
38.89%
34.82%
34.88%
33.16%
33.20%
123
CITY OF WEST UNIVERSITY PLACE, TEXAS
TAXREVENUESBYSOURCE, GOVERNMENTAL ACTIVITIES
Last Ten Years
(modified accrual basis of accounting)
124
Fiscal
Year
Function
2007
2008
2009
2010
Ad valorem
$ 12,958,024
$ 13,101,665
$ 14,067,200
$ 15,093,685
Sales
1,026,948
1,042,096
946,726
1,050,079
Franchise
933,834
1,312,260
1,162,420
1,207,429
Other taxes
15,010
15,643
12,485
11,144
$ 14,933,816
$ 15,471,664
S 16,188,831
$ 17,362,337
124
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J
125
Fiscal Year
Change
2011
2012
2013
2014
2015
2016
2015 -2016
$ 15,315,297
$ 15,224,546
$ 15,794,600
$ 16,386,904
$ 17,457,762
$ 18,052,224
3.4%
1 997,318
1,003,897
957,658
1,051,890
1,117,336
1,051,361
-5.9%
1,148,390
1,142,265
1,170,448
1,214,227
1,204,795
1,144,256
-5.0%
8,994
9,685
11,546
15,713
17,625
15,955
-9.5%
$ 17,469,999
$ 17,380,393
$ 17,934,252
$ 18.668,734
$ 19,797,518
$ 20,263,796
2.4%
125
CITY OF WEST UNIVERSITY PLACE, TEXAS
ASSESSED VALUE AND ACTUAL VALUE OF TAXABLE PROPERTY
Last Ten Years
Source: Harris County Certified / Uncertified Tax Roll
(1) Property is assessed at actual value; therefore, the assessed values are equal to actual value.
Tax rates are per $100 of assessed value.
(2) Tax information was adjusted during fiscal year 2014 to reflect tax year assessed valuations.
126
Fiscal Year (2)
2007
2008
2009
2010
Residential Property
$ 3,032,378,632
$ 3,518,127,265
$ 3,835,791,345
$ 4,287,201,794
Commercial Property
200,638,039
111,498,007
129,077,944
125,992,897
Less: Tax Exempt Property
(238,088,255)
(133,439,938)
(216,954,373)
(158,978,494)
Total Taxable Assessed Value (1)
$ 2,994,928,416
$ 3,496,185,334
$ 3,747,914,916
$ 4,254,216,197
Total Direct Tax Rate
$ 0.40200
$ 0.36600
$ 0.35900
$ 0.35875
Source: Harris County Certified / Uncertified Tax Roll
(1) Property is assessed at actual value; therefore, the assessed values are equal to actual value.
Tax rates are per $100 of assessed value.
(2) Tax information was adjusted during fiscal year 2014 to reflect tax year assessed valuations.
126
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Fiscal Year (2)
2011
2012
2013
2014
2015
2016
$ 4,173,451,521
$ 4,106,994,971
$ 4,335,656,103
$ 4,497,103,352
$ 4,943,195,212
$ 5,578,375,329
203,444,929
278,070,080
205,183,728
219,273,264
259,878,387
314,619,442
i
(296,685,633)
(325,525,373)
(323,044,475)
(340,252,719)
(386,360,932)
(449,141,214)
$ 4,080,210,817
$ 4,059,539,678
$ 4,217,795,356
$ 4,376,123,897
$ 4,816,712,667
$ 5,443,853,557
$ 0.37411
$ 0.37411
$ 0.37411
$ 0.37400
$ 0.36179
$ 0.33179
i
t
1
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�l
CITY OF WEST UNIVERSITY PLACE, TEXAS
PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Years
(1) Overlapping rates are those of local and county governments that apply within the City of West
University Place.
(2) Tax information was adjusted during fiscal year 2014 to reflect tax year assessed valuations.
128
ll
Fiscal Year (2)
2007
2008
2009
2010
�1
1
City of West University Place by fund:
General
$
0.19200
$
0.18600
$
0.18600
$
0.18893
Debt service
0.21000
0.18000
0.17300
0.16982
Total Direct Rates
$
0.40200
$
0.36600
$
0.35900
$
0.35875
Houston Independent School District
$
1.47570
$
1.15670
$
1.15670
$
1.15670
Harris County
0.40239
0.39239
0.38923
0.39224
Harris County Flood Control District
0.03241
0.03106
0.03086
0.02922
Port of Houston Authority
0.01302
0.01437
0.01773
0.01636
Harris County Hospital District
0.19216
0.19216
0.19216
0.19216
Harris County Department of Education
0.00629
0.00585
0.00584
0.00605
Houston Community College
0.09518
0.09243
0.09243
0.09222 r
l
Total Direct and Overlapping Rates (1)
$
2.61915
$
2.25096
$
2.24395
$
2.24370
Tax rates per $100 of assessed valuation
�?
Source: Hams County Appraisal District
(1) Overlapping rates are those of local and county governments that apply within the City of West
University Place.
(2) Tax information was adjusted during fiscal year 2014 to reflect tax year assessed valuations.
128
Fiscal Year (2)
2011 2012 2013 2014 2015 2016
$
0.19443
$
0.18475
$
0.19125
$
0.19631
$
0.19356
$
0.18321
0.17968
0.18936
0.18286
0.17769
0.16823
0.14858
$
0.37411
$
0.37411
$
0.37411
$
0.37400
$
0.36179
$
0.33179
$
1.15670
$
1.15670
$
1.15670
$
1.18670
$
1.19670
$
1.19670
0.38805
0.39117
0.40021
0.41455
0.41731
0.41923
0.29230
0.02809
0.02809
0.02827
0.02736
0.02733
0.02054
0.01856
0.01952
0.01716
0.01531
0.01342
0.19216
0.19216
0.18216
0.17000
0.17000
0.17000
0.00658
0.00658
0.00662
0.00636
0.00600
0.00542
0.09222
0.09722
0.09717
0.09717
0.10689
0.10194
$
2.52266
$
2.26459
$
2.26458
$
2.29421
$
2.30136
$
2.26583
129
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130
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CITY OF WEST UNIVERSITY PLACE, TEXAS
PRINCIPAL PROPERTY TAXPAYERS
Current Year and Nine Years Ago
Fiscal Year
2016 2007
%of %of
J Source: Harris County Tax Assessor - Collector's records.
J
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131
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Property Taxpayer
Value
Rank
Value
Value
Rank
Value
U West Marketplace Assoc
$ 11,689,814
1
0.21%
$ 6,334,230
2
0.21%
Southwestern Bell
10,024,188
2
0.18%
13,184,298
1
0.44%
Retail Fund I Houston Rice
7,936,515
3
0.15%
-
n/a
-
Webster Properties LP
6,167,415
4
0.11%
-
n/a
-
Centerpoint Energy Inc
5,986,280
5
0.11%
5,571,520
3
0.19%
Craig A & Patricia Biggio
5,384,500
6
0.10%
2,896,666
9
0.10%
Eric & Sharma Bass
5,200,000
7
0.10%
-
n/a
-
David E Harvey, Jr.
5,109,000
8
0.09%
-
n/a
-
Douglas L & Sarah L Foshee
5,050,000
9
0.09%
-
n/a
-
Stewart & Julie Baker
4,979,019
10
0.09%
-
n/a
-
5650 Kirby Partnership
-
n/a
-
4,733,451
4
0.16%
Bardwell Building Co.
-
n/a
-
4,534,528
5
0.15%
Gohel Gautam
-
n/a
-
3,614,786
6
0.12%
Kenneth & Kimberly Alo
-
n/a
-
3,525,500
7
0.12%
Brick M & Lisa F Diemer
-
n/a
-
3,161,019
8
0.11%
Jeffrey W VanGundy
-
n/a
-
2,755,283
10
0.09%
Subtotal
67,526,731
1.24%
50,311,281
1.68%
Other Taxpayers
5,376,326,826
98.76%
2,944,617,135
98.32%
Total
$ 5,443,853,557
100.00%
$ 2,994,928,416
100.00%
J Source: Harris County Tax Assessor - Collector's records.
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CITY OF WEST UNIVERSITY PLACE, TEXAS
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Years
132
Fiscal Year
2007
2008
2009
2010
Tax levy
$
12,621,201
$
12,890,583
$
13,951,979
$
15,031,309
Current tax collected
$
12,539,957
$
12,869,047
$
13,895,039
$
14,977,921
Percentage of current tax collections
99.36%
99.83%
99.59%
99.64%
Delinquent tax collections
$
64,952
$
4,794
$
37,658
$
30,325
Total tax collections
$
12,604,909
$
12,873,841
$
13,932,697
$
15,008 246
Total collections as a
percentage of current levy
99.87%
99.87%
99.86%
99.85%
Outstanding delinquent taxes
$
16,292
$
16,742
$
19,282
$
23,063
Outstanding delinquent taxes
as percentage of current levy
0.13%
0.13%
0.14%
0.15%
132
A
Fiscal Year
99.84%
$ 25,102 $
0.16%
99.80%
30,022 $
0.20%
99.81%
29,808 $
0.19%
133
99.82% 99.70% 99.49%
30,277 $ 51,428 $ 92,398
0.18% 0.30% 0.51%
2011
2012
2013
2014
2015
2016
$
15,265,103
$
15,193,428
$
15,778,014
$
16,365,976
$
17,426,385
$
18,062,162
$
15,197,463
$
15,123,562
$
15,705,681
$
16,287,801
$
17,335,980
$
17,969,764
99.56%
99.54%
99.54%
99.52%
99.48%
99.49%
$
42,538
$
39,844
$
42,525
$
47,898
$
38,977
$
$
15,240,001
$
15,163,406
$
15,748,206
$
16,335,699
$
17,374,957
$
17,969,764
99.84%
$ 25,102 $
0.16%
99.80%
30,022 $
0.20%
99.81%
29,808 $
0.19%
133
99.82% 99.70% 99.49%
30,277 $ 51,428 $ 92,398
0.18% 0.30% 0.51%
CITY OF WEST UNIVERSITY PLACE, TEXAS
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Years
Personal Income (1) - - - -
Debt as a Percentage
Of Personal Income (1) - - - -
Population 14,211 14,211 14,211 14,787
Debt Per Capita $ 5,601 $ 5.285 S 5,669 $ 6,089
(1) Personal income data is not available.
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
134
Fiscal Year
2007
2008
2009
2010
Governmental Activities:
General obligation bonds $
53,019,573
$ 49,555,442 $
54,795,999
$ 61,763,373
Certificates of obligation
12,380,000
12,125,000
13,140,776
21,643,463
Capital leases
385,819
294,897
200,381
102,131
Subtotal
65,785,392
61,975,339
68,137,156
83,508,967
Business -Type Activities:
Revenue bonds
13,811,912
13,129,276
12,421,640
6,526,466
Total Primary Government $
79,597,304
S 75,104,615 $
80,558,796
$ 90.035,433
Personal Income (1) - - - -
Debt as a Percentage
Of Personal Income (1) - - - -
Population 14,211 14,211 14,211 14,787
Debt Per Capita $ 5,601 $ 5.285 S 5,669 $ 6,089
(1) Personal income data is not available.
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
134
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Fiscal Year
2011
2012
2013
2014
2015
2016
$ 5,782 $
5,330 $
4,965 $
4,455 $
3,917 $
3,411
$ 57,530,495
$ 62,271,173
$ 58,445,351
$ 52,775,550
$ 46,904,963
$ 43,401,666
22,218,433
13,154,781
12,654,747
11, 898,971
11,113,193
10,292,415
79,748,928
75,425,954
71,100,098
64,674,521
53,694,081
58,018,156
5,751,365 5,112,399 4,466,577 3,790,755 3,094,933
$ 85,500,293 $ 80,538,353 $ 75,566,675 $ 68,465,276 $ 61,113,089 $ 53,694,081
14,787
15,109
15,221
15,369
15,604
15,741
$ 5,782 $
5,330 $
4,965 $
4,455 $
3,917 $
3,411
135
CITY OF WEST UNIVERSITY PLACE, TEXAS
RATIO OF NET BONDED DEBT TO ASSESSED VAL UE,
NET BONDED DEBT PER CAPITA, AND ASSESSED
AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
Last Ten Years
Fiscal Year
2007 2008 2009 2010
Net Taxable Assessed Value
All property
$ 2,994,928,416
$ 3,496,185,334
$ 3,747,914,916
$ 4,254,216,197
Net Bonded Debt
Gross bonded debt
$ 65,399,573
$ 61,680,442
$ 67,936,775
$ 83,406,836
Less: debt service funds
(1,208,268)
(975,765)
(954,687)
(992,033)
Net Bonded Debt
$ 64,191,305
$ 60,704,677
$ 66,982,088
$ 82,414,803
Ratio of Net Bonded Debt
To Assessed Value
2.14%
1.74%
1.79%
1.50%
Population
14,211
14,211
14,211
14,787
Net Bonded Debt Per Capita
$ 4.517
$ 4,272
$ 4,713
$ 4,300
136
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Fiscal Year
2011 2012 2013 2014 2015 2016
$ 4,059,539,678 $ 4,059,539,678 $ 4,217,795,356 $ 4,376,123,897 $ 4,816,712,667 $ 5,443,853,557
$ 79,748,928 $
75,425,954 $
71,100,098 $
64,674,521 $
58,018,156 $
53,694,081
(446,094)
(273,963)
(95,668)
(167,039)
(566,276)
(912,718)
$ 79,302,834 $
75,151,991 $
71,004,430 $
64,507,482 $
57,451,880 $
52,781,363
1.95%
1.85%
1.68%
1.47%
1.19%
0.97%
14,787
15,109
15,221
15,369
15,604
15,741
$ 5,363 $
4,974 $
4,665 $
4,197 $
3,682 $
3,353
137
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138
y CITY OF WEST UNIVERSITY PLACE, TEXAS
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
y
December 31, 2016
y
Estimated
Net Bonded Estimated
Share of
Debt Percentage
Overlapping
Outstanding Applicable (1)
Debt
Debt Repaid with Property Taxes
Governmental Unit
Harris County
$ 2,303,812,874 1.25%
$ 28,797,661
Harris County Dept of Education
7,000,000 1.25%
87,500
l Hams County Flood Control District
83,075,000 1.25%
1,038,438
JHarris County Hospital District
62,815,000 1.25%
785,188
Houston Community College
618,155,000 3.11%
19,224,621
Houston ISD
2,811,170,000 3.13%
87,989,621
J Port of Houston Authority
J
657,994,397 1.25%
8,224,930
Subtotal, overlapping debt
$ 6,544,022,271
146,147,957
1
City Direct Debt
$ 53,694,081 100.00%
53,694,081
Total Direct and Overlapping Debt
$ 199,842,038
Source: Municipal Advisory Council of Texas
(1) Estimated percentage applicable obtained from Municipal Advisory Council of Texas. The percentage
of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages
were estimated by determining the portion of the City's taxable assessed value that is within the City's
boundaries and dividing it by the City's total taxable assessed value.
139
CITY OF WEST UNIVERSITY PLACE, TEXAS
LEGAL DEBT MARGININFORMATION
Last Ten Years
Debt littdt
Total net debt applicable to limit
Legal debt margin
Total net debt applicable to the limit
as a percentage of debt limit
Fiscal Year
2007
2008
2009
2010
Debt applicable to limit:
General obligation bonds
53,694,081
$ 174,809,267
$ 194,317,845
$ 212,710,810
$ 204,010,541
63,841,732
64,074,235
60,212,967
60,212,967
Legal debt margin
$ 219,411,315
$ 110,967,535
$ 130,243,610
$ 152,497,843
$ 143,797,574
Legal Debt Margin Calculation for Fiscal Year 2016
36.52% 32.97% 28.31% 29.51%
Assessed value
$ 5,443,853,557
Debt limit (5% of assessed value) (1)
272,192,678
Debt applicable to limit:
General obligation bonds
53,694,081
Less: amount set aside for
repayment of general
obligation debt
(912,718)
Total net debt applicable to limit
52,781,363
Legal debt margin
$ 219,411,315
(1) The City's Home Rule Charter ( 1983), Section 7.07 limits all bonded debt to no more than five percent
of the assessed valuation.
140
J
J
i
1
j
Fiscal Year
2011
2012
2013
2014
2015
2016
$ 202,976,984
$ 210,889,768
$ 210,889,768
$ 218,806,195
$ 240,835,633
$ 272,192,678
56,568,906
73,605,191
71,004,430
64,507,482
57,451,880
52,781,363
$ 146,408,078
$ 137,284,577
$ 139,885,338
$ 154,298,713
$ 183,383,753
$ 219,411,315
27.87% 34.90% 33.67% 29.48% 23.86% 19.39%
141
CITY OF WEST UNIVERSITY PLACE, TEXAS
PLEDGED - REVENUE COVERAGE
Last Ten Years
Debt Service Requirements (3)
Principal $ 665,000 $
690,000 $
Fiscal Year
745,000
Interest 601,873
577,813
2007
2008
2009
2010
1,266,749 $
1,268,446
Gross Revenues (1) $
4,702,577 $
5,912,369 $
6,151,138 $
5,917,931
Operating Expenses (2)
4,673,933
5,114,579
5,141,913
5,003,479
Net Revenues Available for Debt Service $
28,644 $
797,790 $
1,009,225 $
914,452
Debt Service Requirements (3)
Principal $ 665,000 $
690,000 $
715,000 $
745,000
Interest 601,873
577,813
551,749
523,446
Total $ 1266,873 $
1,267,813 S
1,266,749 $
1,268,446
Coverage 0.02
0.63
0.80
0.72
(1) Total revenues including interest, excluding tap fees
(2) Total operating expenses less depreciation
(3) Includes revenue bonds only
142
Fiscal Year
2011
2012
2013
2014
2015
2016
225,323
198,585
172,185
$ 8,986,455 $
7,777,386 $
7,623,233 $
6,868,133 $
6,986,297 $
7,172,469
1
4.02
3.69
4.34
4,802,445
4,293,010
3,962,028
4,580,425
6,085,370
4,642,322
$ 4,184,010 $
3,484,376 $
3,661,205 $
2,287,708 $
900,927 $
2,530,147
$ 785,000 $
720,000 $
645,000 $
675,000 $
695,000 $
255,154
225,323
198,585
172,185
144,351
$ 1,040,154 $
1
945,323 $
843,585 $
847,185 $
839,351 $
4.02
3.69
4.34
2.70
1.07 N/A
1
J
J
A143
CITY OF WEST UNIVERSITY PLACE, TEXAS
DEMOGRAPHIC AND ECONOMIC STATISTICS ""2"3'
Last Ten Years
Fiscal Year
Ended
December 31
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Population (4)
14,211
14,211
14,211
14,787
14,787
15,109
15,221
15,369
15,604
15,741
Median
School
Age
Enrollment (5)
39.30
981
39.30
980
39.30
1,272
39.30
1,165
39.30
1,215
41.40
1,225
41.40
1,210
41.40
1,280
41.80
1,253
42.40
1,280
,r
(1) Personal income data not available.
(2) Per capita personal income data not available.
(3) Beginning 2005 and after, cities with population under 25,000
do not have unemployment information available.
(4) Data source - Bureau of the Census
(5) The school enrollment reflects enrollment in schools located within the City limits.
144
CITY OF WEST UNIVERSITY PLACE, TEXAS
PRINCIPAL EMPLOYERS Rl ..
Current Year and Nine Years Ago
Fiscal Year
2016 2007
Employer Rank Rank
Southwestern Bell
West University Elementary School
City of West University Place
Note: The residents of the City of West University Place are primarily employed outside of the City limits.
(1) The number of employees of each of the employers is currently unavailable.
(2) The percentage of total employment is currently unavailable.
145
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146
CITY OF WEST UNIVERSITY PLACE, TEXAS
FULL -TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BYFUNCTION
Last Ten Years
Fiscal
Year
j 2007 2008 2009 2010
2011
2012
2013
2014 2015
2016
General Fund:
Administration 4 4 5 5
5
5
5
6
6
6
J Finance 8 8 7 7
6
6
6
5
5
5
Police Department 32 32 32 32
32
35
35
35
35
35
l Fire Department 24 24 24 24
IGI Public Works 20 19 19 21
24
20
23
20
23
20
23
19
23
18
23
18
Parks and Recreation 10 10 10 11
11
11
11
11
12
12
General Fund Total 98 97 97 100
98
100
100
99
99
99
Enterprise Fund:
Water 14 12 12 12
14
14
14
14
14
13
Solid Waste 7 7 7 7
8
8
8
6
6
7
Enterprise Fund Total 21 19 19 19
22
22
22
20
20
20
Internal Service Fund:
Administration 2 3 3 3
3
3
3
3
4
4
Internal Service Fund Total 2 3 3 3
3
3
3
3
4
4
Total City Positions 121 119 119 122
123
125
125
122
123
123
Notes:
Around 20 -35 temporary and seasonal employees are hired during
the summer months as camp counselors, pool personnel, and front
desk. This count is not reflected above.
Around 6 contract personnel are used year round to augment solid
J
J waste crews. This count is not reflected above.
1
1
J
j147
CITY OF WEST UNIVERSITY PLACE, TEXAS
OPERATING INDICATORS BYFUNCTION
Last Ten Years
Function /Program
Police
Arrests
Accident reports
Citations
Offense reports
Calls for service
Fire
Emergency responses
Average response time
Fire incidents
Water
New accounts
Source:
Water
Sewer
Average daily consumption
(millions of gallons)
Number of million gallons of surface water pumped
Number of million gallons of well water pumped
Total consumption (millions of gallons)
Peak daily consumption
(millions of gallons)
Sewer
Average daily sewage treatment
(millions of gallons)
Total consumption (millions of gallons)
Peak daily consumption
(millions of gallons)
Source: Various City departments
Fiscal Year
2007 .2008 2009
287
230
342
325
116
137
137
99
2,940
2,411
2,479
4,830
794
650
823
669
36,260
22,367
27,029
29,148
698
644
489
581
4:29
4:24
4:00
3:49
840
857
673
774
854
744
724
724
80
80
80
80
20
20
20
20
1.89
2.16
2.36
2.22
569.34
690.74
400.44
357.42
120.30
99.09
461.41
452.95
689.65
789.83
861.85
810.37
4.30
6.27
5.62
4.34
1.43
1.16
1.21
1.25
523.06
421.32
448.57
455.02
5.31
3.43
4.32
4.63
i
Fiscal Year
2011
2012
2013
2014
2015
2016
294
231
323
226
360
294
121
142
127
122
162
151
3,379
2,260
2,779
2,482
2,322
1,444
583
609
695
581
874
758
25,964
24,844
26,835
22,071
26,354
24,716
660
659
683
669
717
684
4:25
4:45
4:34
4:35
4:34
4:29
765
734
663
721
801
754
678
669
665
608
526
598
80
80
80
80
62
65
20
20
20
20
38
35
2.79
2.38
2.31
2.06
2.06
2.12
658.80
530.06
466.25
437.00
468.12
507.88
359.55
335.24
375.06
313.88
282.03
267.50
1018.34
869.48
841.31
750.88
750.16
775.50
5.10
4.89
5.36
4.24
4.50
4.06
1.10
1.18
1.09
1.10
1.20
1.17
402.36
430.12
397.30
402.95
436.57
426.47
2.66
4.85
4.04
4.04
5.43
5.88
149
CITY OF WEST UNIVERSITY PLACE, TEXAS
CAPITAL ASSETS STATISTICS BYFUNCTION
Last Ten Years
Source: Various City departments
150
Fiscal Year
2007
2008
2009
2010
Function /Program
Police
Stations
I
1
I
1
Patrol units
7
7
7
7
Fire stations
1
1
1
1
Other public works
Streets (miles - centerlines)
43
43
43
43
Streetlights
747
690
1,694
1,694
Parks and recreation
Parks
9
9
9
9
Parks acreage
12.6
12.6
14.0
14.0
Swimming pools
2
2
2
2
Baseball / softball diamonds
6
6
6
6
Tennis courts
5
5
5
5
Racquetball /squash courts
2
2
2
Gymnasiums
I
I
-
-
llalf- basketball courts
3
3
3
3
Water
Water mains (miles)
40
40
40
40
Fire hydrants
357
357
357
357
Storage capacity (millions of gallons)
3.65
3.65
3.65
3.65
Sewer
Sanitary sewers (miles)
40
40
40
40
Storm sewers (miles)
32
32
32
32
Open ditch / creek / canal drainage (miles)
1.32
1.32
1.32
1.32
Treatment capacity (millions of gallons)
2
2
2
2
Source: Various City departments
150
Fiscal Year
2011 2012 2013 2014 2015 2016
1
1
1
1
1
1
7
7
7
7
8
8
1
1
1
1
1
1
43
43
46
46
46
53
1,687
1,687
1,687
1,687
1,687
1,687
9
9
9
9
9
11
13.7
13.7
13.7
13.7
13.7
13.11
2
2
2
2
2
2
6
7
7
7
8
9
5
5
5
5
5
5
2
2
2
2
2
2
3
3
3
3
3
3
40
40
40
40
40
56
357
357
357
357
357
347
3.65
3.65
3.65
3.65
3.65
3.65
40
40
40
40
40
44
32
32
32
32
32
34
1.32
1.32
1.32
1.32
1.32
1.32
2
2
2
2
2
2
151
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152
Management Letter
May 31, 2017
To the Honorable Mayor and
City Council Members of the
City of West University Place, Texas:
The American Institute of Certified Public Accountants Statement on Auditing Standards No. 115,
Con¢municating Internal Control Related Matters Identified in an Audit (SAS 115), provides guidance to
auditors on communicating internal control matters to management and the governing body, board of
directors, or equivalent body.
It is important to note when reviewing findings reported within this letter that classification of the
findings is based on the definitions required by SAS 115 as filrther discussed below. Please note that
these classifications are based on the potential impact to the financial statements, not necessarily the
likelihood of actual loss to the City. Accordingly, the City's assessment of the "significance" or ranking
of severity will likely be substantially different based on a number of factors including, but not limited to,
its assessment of risk and the cost benefit of making the change.
Our report is as follows:
In planning and performing our audit of the financial statements of the governmental activities, the
business -type activities, each major fund, and the aggregate remaining fund information of the City of
West University Place, Texas (the "City ") as of and for the year ended December 31, 2016, in accordance
with auditing standards generally accepted in the United States of America, we considered the City's
internal control over financial reporting (internal control) as a basis for designing our auditing procedures
that are appropriate in the circumstances for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal
control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that were
not identified. However, as discussed below, we identified certain deficiencies in internal control that we
consider to be significant deficiencies and other matters.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a
timely basis.
Houton
3210 Bingle Rd., Ste.300
BeImIlt,
P.O. Box 826
Am1tia
100 Cangreee Ave., Ste. 2000
All Office
w ..texaeauditon.com
� Governmental
Houeton,TX77055
BellvillgTX77419
Austin= 7B701
info @txnuditon.mm
Audit Quality Center
713.263.1123
713.263.1123
512.381.0222
713.263.1550 fu
City of West University Place, Texas
Management Letter
Page 2 of 3
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our findings and additional comments are as follows:
Significant Deficiency:
2013 -001. ADJUSTMENTS LINE ITEM — POOLED CASH
Backeround
The City maintains a pooled cash and investment account. Each fund whose monies are deposited in the
pooled cash and investment account has equity therein. The City uses an `adjustments' line item on its
bank reconciliation to account for transactions other than outstanding checks and deposits, such as
transfers related to payroll, manual posting of accounts payable, and other miscellaneous transactions.
Any ending balance in adjustments is used to reconcile the bank balance to the general ledger.
Findine
During audit procedures, it was noted that there was a significant balance for the adjustments line item
that could not be specifically identified. Since many of the transactions accounted for through the
adjustments line item are system generated, it is difficult to trace and determine which transactions
cleared. In addition, the software system is unable to produce a direct listing that shows the detail for the
balance of the adjustments.
Recommendation
The City should ensure that there is adequate support for the adjustments balance at month end. During
the bank reconciliation process, the City should review all the transactions that were posted through the
adjustments line item to verify their validity and accuracy. The City should develop a process to directly
track the transactions that have not cleared and should produce a listing of outstanding items that ties to
the adjustments balance.
Other Matters:
2013 -002. CUSTODIAL CREDIT RISK— DEPOSITS
Backaround
Custodial credit risk, in the case of deposits, is the risk that in the event of a bank failure, an entity's
deposits may not be returned to it.
Findin
As of December 31, 2016, the Friends of West University Parks fund, a blended component unit of the
City, had bank accounts that were not fully insured by the Federal Deposit Insurance Corporation (FDIC)
or fully collateralized with pledged securities by the respective bank