HomeMy WebLinkAboutComprehensive Annual Financial Report, 2018
City of West University Place, Texas
Comprehensive Annual Financial Report
For the Fiscal Year Ended December 31, 2018
Officials Issuing Report:
David Beach
City Manager
Marie Kalka
Finance Director
City of West University Place, Texas
Annual Financial Report
For the Fiscal Year Ended December 31, 2018
Table of Contents
i
Page
Number
Introductory Section
Letter of Transmittal ........................................................................................................................................... 2
Organizational Chart ........................................................................................................................................ 6
Certificate of Achievement for Excellence in Financial Reporting ........................................................... 7
Principal Officials ............................................................................................................................................... 8
Financial Section
Independent Auditor’s Report ...................................................................................................................... 11
Management's Discussion and Analysis (Required Supplementary Information) ................................. 15
Basic Financial Statements
Government-Wide Financial Statements:
Statement of Net Position ................................................................................................................. 27
Statement of Activities ...................................................................................................................... 28
Fund Financial Statements:
Balance Sheet - Governmental Funds ............................................................................................ 30
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position ............................................................................................................... 31
Statement of Revenues, Expenditures, and Changes in Fund
Balances - Governmental Funds ................................................................................................... 32
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities .................................................................................................................... 33
Statement of Net Position - Proprietary Funds ............................................................................... 34
Statement of Revenues, Expenses, and Changes in Net Position –
Proprietary Funds .............................................................................................................................. 35
Statement of Cash Flows - Proprietary Funds ............................................................................... 36
Notes to Financial Statements ................................................................................................................ 37
Required Supplementary Information
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual - General Fund ..................................................................................................... 68
Schedule of Changes in the Net Pension Liability and Related Ratios –
Texas Municipal Retirement System ..................................................................................................... 69
Schedule of the City’s Contributions – Texas Municipal Retirement System ................................... 70
Schedule of Changes in Total OPEB Liability and Related Ratios –
Texas Municipal Retirement System, Supplemental Death Benefits Fund ..................................... 71
Schedule of Changes in Total OPEB Liability and Related Ratios –
Retiree Health Care Plan ....................................................................................................................... 72
City of West University Place, Texas
Annual Financial Report
For the Fiscal Year Ended December 31, 2018
Table of Contents - Continued
ii
Combining and Individual Fund Statements and Schedules
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual - Debt Service Fund ............................................................................................. 74
Combining Balance Sheet – Nonmajor Governmental Funds .......................................................... 76
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances – Nonmajor Governmental Funds ......................................................... 78
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual – Parks Fund .......................................................................................................... 80
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual - Tree Replacement Fund .................................................................................. 81
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual – Court Technology/Security Fund ................................................................... 82
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual – METRO Fund ....................................................................................................... 83
Combining Statement of Net Position – Internal Service Funds ........................................................ 86
Combining Statement of Revenues, Expenses, and
Changes in Net Position – Internal Service Funds .............................................................................. 88
Combining Statement of Cash Flows – Internal Service Funds .......................................................... 90
Statistical Section
Net Position by Component .......................................................................................................................... 96
Changes in Net Position ................................................................................................................................. 98
Tax Revenues by Source, Governmental Activities ................................................................................. 102
Fund Balances, Governmental Funds ........................................................................................................ 104
Changes in Fund Balances, Governmental Funds .................................................................................. 106
Tax Revenues by Source, Governmental Activities ................................................................................. 108
Assessed Value and Actual Value of Taxable Property .......................................................................... 110
Property Tax Rates - Direct and Overlapping Governments .................................................................. 112
Principal Property Taxpayers ........................................................................................................................ 115
Property Tax Levies and Collections ........................................................................................................... 116
Ratios of Outstanding Debt by Type .......................................................................................................... 118
Ratios of Net Bonded Debt to Assessed Value, Net Bonded Debt Per Capita,
and Assessed and Estimated Actual Value of Taxable Property ........................................................ 120
Direct and Overlapping Governmental Activities Debt ......................................................................... 123
Legal Debt Margin Information ................................................................................................................... 124
Pledged Revenue Coverage ...................................................................................................................... 126
Demographic and Economic Statistics ..................................................................................................... 128
Principal Employers ....................................................................................................................................... 129
Full-Time Equivalent City Government Employees by Function ............................................................. 131
Operating Indicators by Function ............................................................................................................... 132
Capital Asset Statistics by Function ............................................................................................................ 134
Overall Compliance and Internal Control Section
Independent Auditor’s Report on Internal Control over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards .................................................... 138
Schedule of Findings and Responses ........................................................................................................ 140
1
Introductory Section
Finance
3800 University Blvd.
West University Place, TX 77005
713.662.5826
2
June 20, 2019
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, 2018. 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.
Weaver and Tidwell, LLP, Certified Public Accountants, have issued an unmodified (“clean”) opinion on
the City’s financial statements for the year ended December 31, 2018. The independent auditor’s report is
located at the front of the financial section of this report.
Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s 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
generally accepted accounting principles, the following organization is included within the City’s reporting
entity:
Entity Method of Inclusion
Friends of West University Parks Fund Blended
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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 currently
estimated at $6.3 billion for the 2018 tax year. 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. 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, exceptional school district 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.
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.
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 has refunded several outstanding debt obligations from 2010 through 2017, resulting in total debt
savings of over $4.75M.
Capital expenditures are funded through annual allocations from the general fund, the water and sewer
fund, the Congestion Mitigation/Traffic Management agreement funds received from the Metropolitan
Transit Authority of Harris County or the issuance of debt. The allocations are transferred to the capital
improvements 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.
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General capital projects planned for the 2019 budget include the continuation of the virtual gate project,
completion of WURC west side concrete parking lot, completion of PW maintenance parking lot/wash bay,
and completion of the animal control shelter renovations.
Transportation/drainage projects planned for the 2019 budget include the Buffalo Speedway project,
miscellaneous drainage improvements to improve street drainage, repair damaged storm drains, and remove
low spots from roadways, and the design phase of Auden Street shared drainage system upgrade.
Additionally, water and sewer related projects planned in 2019 are WWTP fencing, WWTP Weir
replacement, WWTP floodwater protection, water system chlorimination upgrades, WWTP efficiency
study, WWTP lighting replacement, and lift stations 1-12 lining project.
These projects are listed specifically in the annual budget 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
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, 2017.
This was the 34rd consecutive year the City has received this prestigious award. In order to be awarded a
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.
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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 Kalka
Finance Director
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City of West University Place, Texas
Organizational Chart
December 31, 2018
7
City of West University Place, Texas
Certificate of Achievement
For Excellence in Financial Reporting
8
City of West University Place, Texas
Principal Officials
December 31, 2018
City Officials Term Expires Elective Position
Bob Higley................................................................... 05/2021 .......................................................................... Mayor
Kevin Trautner ............................................................ 05/2021 .......................................................... Mayor Pro Tem
John P. Barnes ............................................................ 05/2021 ....................................................... Council Member
Lauri Lankford ............................................................. 05/2021 ....................................................... Council Member
Ed Sobash ................................................................... 05/2021 ....................................................... Council Member
Key Staff Position
David Beach ......................................................................................................................................... City Manager
Thelma Gilliam ...................................................................................................................................... City Secretary
James Urban ................................................................................................................... Human Resources Director
Alan Petrov ............................................................................................................................................. City Attorney
Marie 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
Gerardo Barrera .......................................................................................................... Public Works Interim Director
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Financial Section
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Weaver and Tidwell, L.L.P.
24 Greenway Plaza, Suite 1800 | Houston, Texas 77046
Main: 713.850.8787 | Fax: 713.850.1673
CPAs AND ADVISORS | WEAVER.COM
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Independent Auditor’s Report
The Honorable Mayor
and Members of the City Council 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 fiscal year ended December 31, 2018, and the
related notes to the financial statements, which collectively comprise the City’s basic financial
statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to
fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
The Honorable Mayor
and Members of the City Council of the
City of West University Place, Texas
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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 of West University Place, Texas, as of
December 31, 2018, and the respective changes in financial position, and, where applicable, cash
flows thereof for the fiscal year then ended in accordance with accounting principles generally
accepted in the United States of America.
Emphasis of Matters
As discussed in Note 1.F. to the basic financial statements, during the year ended December 31, 2018,
the City implemented Governmental Accounting Standards Board Statement No. 75, Accounting and
Financial Reporting for Postemployment Benefits Other Than Pensions. Beginning net position has been
restated as a result of the implementation of this statement. Our opinion is not modified with respect to
this matter.
As discussed in Note 12 to the basic financial statements, the City restated beginning net position of the
internal service funds to correct a misstatement in its previously issued 2017 financial statements. Our
opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management’s Discussion and Analysis and the Required Supplementary Information, as listed in 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, Statistical Section
and Combining and Individual Fund Statements and Schedules, as listed in the table of contents, are
presented for purposes of additional analysis and are not a required part of the basic financial
statements.
The Honorable Mayor
and Members of the City Council of the
City of West University Place, Texas
13
The Combining and Individual Fund 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 and Individual Fund 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.
Other Matter
The financial statements of the City for the year ended December 31, 2017, before the restatements
described in Note 12, were audited by another auditor whose report dated June 15, 2018, expressed an
unmodified opinion.
As part of our audit of the December 31, 2018 financial statements, we also audited the adjustments
described in Note 12 that were applied to restate the 2017 financial statements. In our opinion, such
adjustments are appropriate and have been properly applied. We were not engaged to audit, review,
or apply any procedures to the 2017 financial statements of the entity other than with respect to the
adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2017
financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
June 20, 2019 on our consideration of the City’s internal control over financial reporting and on our tests
of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and
other matters. The purpose of that report is solely to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion
on the effectiveness of the City’s internal control over financial reporting or on compliance. That report
is an integral part of an audit performed in accordance with Government Auditing Standards in
considering the City’s internal control over financial reporting and compliance.
WEAVER AND TIDWELL, L.L.P.
Houston, Texas
June 20, 2019
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Management's Discussion and Analysis
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, 2018. The analysis is based on currently known 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
Summary Detail
Components of the Financial Section
Required
Supplementary
Information
Notes to the
Financial
Statements
Management's
Discussion and
Analysis
Independent
Auditor's Report
Fund Financial
Statements
Government-Wide
Financial
Statements
Basic Financial
Statements
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 furnish 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.
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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 deteriorating. Other nonfinancial 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's financials into two classes
of activities:
1. 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 inflows 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 funds 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.
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The City maintains 11 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 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.
Proprietary 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 collection/treatment, 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, schedule of changes in total
other postemployment liability and related ratios for the Texas Municipal Retirement System (TMRS), and
schedule of changes in total other postemployment liability and related ratios for the Retiree Health
Care Plan. 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
$87,975,648 as of December 31, 2018. This compares with $82,696,489 from the prior fiscal year. The
largest portion of the City's net position, 83 percent, reflects its investments in capital assets (e.g., land,
building, equipment, improvements, construction in progress, and infrastructure), less any outstanding
debt used to acquire those assets. The City uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City's investment in its
capital assets is reported net of related debt, it should be noted that the resources needed to repay this
debt must be provided from other sources, since the assets themselves cannot be used to liquidate
these liabilities.
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Statement of Net Position
The following table reflects the condensed statement of net position:
2018 2017 2018 2017 2018 2017
Current and other assets 42,718,317$ 38,826,831$ 5,223,598$ 3,932,567$ 47,941,915$ 42,759,398$
Cap i tal assets 91,753,665 93,510,336 18,646,517 20,050,471 110,400,182 113,560,807
Total assets 134,471,982 132,337,167 23,870,115 23,983,038 158,342,097 156,320,205
Deferred charge on refundi ng 1,210,858 1,592,164 - - 1,210,858 1,592,164
Deferred outflows - pensi ons 1,480,032 3,288,175 205,238 499,810 1,685,270 3,787,985
Deferred outflows - OPEB 332,132 - 46,058 - 378,190 -
Total deferred outflows of resources 3,023,022 4,880,339 251,296 499,810 3,274,318 5,380,149
Long-term li abi l it i es outstanding 48,467,230 55,216,288 1,300,285 1,302,695 49,767,515 56,518,983
Other l iabilit ies 2,352,615 2,347,385 763,309 733,018 3,115,924 3,080,403
Total liabilities 50,819,845 57,563,673 2,063,594 2,035,713 52,883,439 59,599,386
Property taxes 19,537,933 19,289,639 - - 19,537,933 19,289,639
Deferred inflow - pensions 1,070,892 100,032 148,503 14,808 1,219,395 114,840
Total deferred i nflows of resources 20,608,825 19,389,671 148,503 14,808 20,757,328 19,404,479
Net posit ion:
Net investment in capi tal assets 54,149,042 48,398,572 18,646,517 20,050,471 72,795,559 68,449,043
Restricted 2,869,031 3,030,359 - - 2,869,031 3,030,359
Unrestri cted 9,048,261 8,835,231 3,262,797 2,381,856 12,311,058 11,217,087
Total net position 66,066,334$ 60,264,162$ 21,909,314$ 22,432,327$ 87,975,648$ 82,696,489$
Activities Activities Primary Government
Governmental Business-Type Total
A portion of the City's net position, $2,869,031 or three percent, represents resources that are subject to
external restriction on how they may be used. The remaining balance of unrestricted net position,
$12,311,058 or 14 percent, may be used to meet the City's ongoing obligation to citizens and creditors.
The City's total net position increased by $5,279,159 during the current fiscal year, an increase of six
percent in comparison to the prior year. This overall increase includes an increase of $8,372,119 resulting
from the operations of the current fiscal year, offset by a decrease of $3,092,960 resulting from
adjustments to prior period net position related to the implementation of a new accounting standard
and the correction of an error in the prior period financial statements. These prior period adjustments
are detailed in Note 12 to the basic financial statements.
Of the $8,372,199 increase in net position resulting from the operations of the current fiscal year, an
increase of $8,563,076 is attributable to the governmental activities, which primarily was a result of
payment of debt resulting in increasing of net investment in capital assets. The increase in governmental
activities is offset by a $190,957 decrease in business-type activities, which is the result of net transfers of
resources out of business type activities to governmental activities.
As noted previously, the City implemented a new accounting standard during the current fiscal year.
The implementation of this standard, Governmental Accounting Standards Board Statement No. 75
(GASB 75) – Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions,
resulted in the recognition of $378,190 in deferred outflows of resources related to other
postemployment benefits (OPEBs) and an OPEB liability of $4,652,988. Net position of the previous fiscal
year was restated by a reduction of $3,092,960 to reflect the deferred outflows of resources and OPEB
liability balances as of the end of the previous fiscal year, as measured under GASB 75.
19
The implementation of GASB 75 in the current year results in the City’s accounting for its OPEB liabilities
and related deferred outflows and inflows of resources in a manner consistent with the accounting and
measurement of the City’s pension liabilities and related deferred outflows and inflows of resources,
which are accounted for under GASB 68, Accounting and Financial Reporting for Pensions. As of
December 31, 2018, the City reports a combined pension and OPEB liability of $9,491,363, compared to
$11,772,704 as of December 31, 2017 (as restated). The decrease is due primarily to an increase in
investment income accumulated on pension plan fiduciary net position. Further details can be found in
the notes to the basic financial statements as well as the RSI following the notes.
Statement of Activities
The following table reflects the City’s changes in net position:
2018 2017 2018 2017 2018 2017
Revenues:
Program revenues:
Char ges for serv i ces 4,234,303$ 3,722,210$ 9,651,548$ 9,326,936$ 13,885,851$ 13,049,146$
Operat ing grants and contri but ions 1,647,584 1,278,517 74,545 - 1,722,129 1,278,517
Cap ital grants and contr i but i ons - 1,600,000 - 67,892 - 1,667,892
General revenues:
Ad valorem taxes 19,304,056 18,614,853 - - 19,304,056 18,614,853
Sales taxes 1,172,256 1,064,672 - - 1,172,256 1,064,672
Franchi se taxes 1,128,060 1,159,730 - - 1,128,060 1,159,730
Other taxes 13,528 14,330 - - 13,528 14,330
Investment earnings 432,447 122,556 40,370 17,706 472,817 140,262
Other revenues 528,572 455,033 12,665 - 541,237 455,033
Total revenues 28,460,806 28,031,901 9,779,128 9,412,534 38,239,934 37,444,435
Expenses:
General government 3,805,870 3,880,070 - - 3,805,870 3,880,070
Publ ic safety 8,172,672 8,090,377 - - 8,172,672 8,090,377
Publ ic works 4,628,774 4,872,132 - - 4,628,774 4,872,132
Publ ic serv ices 4,616,244 4,527,049 - - 4,616,244 4,527,049
Interest and fees on debt 1,354,716 1,496,068 - - 1,354,716 1,496,068
Water and sewer - - 5,966,645 6,125,682 5,966,645 6,125,682
Solid waste - - 1,322,894 1,392,583 1,322,894 1,392,583
Total expenses 22,578,276 22,865,696 7,289,539 7,518,265 29,867,815 30,383,961
Increase (decrease) i n net pos it ion
before transfers 5,882,530 5,166,205 2,489,589 1,894,269 8,372,119 7,060,474
Transfers 2,680,546 2,798,454 (2,680,546) (2,798,454) - -
Change in net posi t i on 8,563,076 7,964,659 (190,957) (904,185) 8,372,119 7,060,474
Net posi t i on - begi nni ng 60,264,162 52,299,503 22,432,327 23,336,512 82,696,489 75,636,015
Prior peri od adjustments (2,760,904) - (332,056) - (3,092,960) -
Net posi t i on - begi nni ng, as restated 57,503,258 52,299,503 22,100,271 23,336,512 79,603,529 75,636,015
Net position - ending 66,066,334$ 60,264,162$ 21,909,314$ 22,432,327$ 87,975,648$ 82,696,489$
Activities Activities Primary Government
Governmental Business-type Total
As noted previously, the City has adjusted the balance reported for net position of the prior period, as
detailed in Note 12 to the basic financial statements.
20
Graphic presentations of selected data from the summary tables follow to assist in the analysis of the
City's activities.
21
For the year ended December 31, 2018, revenues from governmental activities totaled $28,460,806,
compared with $28,031,901 in the prior year. This increase of $428,905 occurred primarily as the result of
$512,093 increase in charges for services due primarily from an increase in permits and recognition of
warrant and ambulance unavailable revenue. Also, $369,067 change in operating grants and
contributions, $1,600,000 decrease in capital grants and contributions, as well as $689,203 in additional
property tax revenue. Capital grants and contributions decreased as a result of donated land that the
City received during the 2017 fiscal year. Increased property tax valuations throughout the City
attributed to the increase in property tax revenue. Finally, investment earnings saw a $309,891 increase
due to market rate increases.
For the year ended December 31, 2018, expenses for governmental activities totaled $22,578,276, a
decrease of $287,420 or one percent from last year. The overall decrease is primarily due to decreases
in Public Works and interest and fees on debt expenses.
Charges for services for business-type activities increased $324,612, which is an increase of three
percent. Operating expenses for business-type activities decreased by $228,726. This decrease is
primarily due to a decrease in depreciation and a change in the internal service fund allocation
method between the governmental and business-type activities.
Financial Analysis of 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 $13,938,293. Of this, $189,376 is
nonspendable, $868,291 is restricted for debt service, $56,954 is restricted for enabling legislation,
$1,461,899 is restricted for City parks, $121,152 is restricted for METRO, $280,345 is restricted for tree
replacement, $303,424 is restricted for governmental programming, $118,377 is assigned for purchases
on order, and $2,915,694 is assigned to capital projects funds.
There was an increase in the combined fund balance of $2,338,550 compared to the prior year. This is
largely attributable to increases in revenue from ad valorem taxes, investment earnings, as well as, funds
received from FEMA for Hurricane Harvey. In addition, expenditures decreased slightly overall for total
governmental funds due to vacancies in several departments.
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 $7,622,781, while total fund balance reached $8,233,958. 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 42 percent of total
general fund expenditures, while total fund balance represents 45 percent of the total general fund
expenditures. The general fund demonstrated an overall increase of $2,013,628 primarily due to
increases in revenue and other financing sources related to ad valorem taxes, investment earnings,
other revenues, and reimbursement from FEMA for Hurricane Harvey.
The debt service fund has a total fund balance of $868,291, all of which is restricted for the payment of
debt service. Expenditures exceeded revenues by $1,232,075, with an overall net decrease in fund
balance after other funding sources for the year of $31,829. This decrease in fund balance is primarily
due to ad valorem taxes not fully collected.
22
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.
General Fund Budgetary Highlights
There had been a planned decrease in budgeted fund balance in the amount of $301,063 in the
general fund with budget amendments throughout the year bringing the decrease to $387,349.
However, fund balance increased by $2,013,628, resulting in a positive variance of $2,400,977 from
actual over budgeted as amended.
Actual general fund revenues were greater than the amended budgeted revenues by $1,333,517
during 2018. This net variance includes the positive variances of $574,083 for charges for services and
$280,609 for intergovernmental.
Actual expenditures were less than budgeted amounts in total by $1,047,412 for the fiscal year. This net
variance is due to positive variances of $275,361 for general government, $518,374 for public safety,
$174,846 for public works, and $78,831 for public services.
Capital Assets
At the end of fiscal year 2018, the City's governmental and business-type activities funds had invested
$91,753,665 and $18,646,517, respectively, in a variety of capital assets and infrastructure (net of
accumulated depreciation). This represents net decreases of $1,756,671 and $1,403,954, respectively.
Major capital assets events during the year included the following:
• Construction paving projects of $149,853
• Purchase of concrete mixer for $27,875
• Replace Library AC for $27,875
• Construction in progress for various City projects in the amount of $281,069
More detailed information about the City's capital assets is presented in note 5 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
$38,370,000. Of this amount, $32,595,000 was general obligation debt and $5,775,000 was certificates of
obligation debt. During the year, the City had a net decrease in long-term debt of $7,888,447.
More detailed information about the City's long-term liabilities is presented in note 6 to the financial
statements.
Current underlying ratings on debt issues are as follows:
Standard and
Poor's
General obligation bonds AAA
Certificates of obligation AAA
23
Economic Factors and Next Year's Budget
The City Council approved a $40.05 million operating budget for fiscal year 2019. The budget maintains
the property tax rate at $0.31680 per $100 of valuation. 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.
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 had 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 2019 budget maintains the 2018 water and sewer rates as recommended in the
completed 2017 water and sewer rate study.
The strength and continued diversity of the Metro Houston market area has a positive impact on the
City. There is almost no vacant and/or undeveloped land in the City, so construction generally involves
rebuilding and remodeling. 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 continues to enjoy a stable
outlook, with property values at $6.3 billion. Among reasons for this strength are the City's convenient
proximities to the Texas Medical Center, downtown Houston, the Rice Village, and Rice University, as
well as the Galleria area. The City's low crime rate and hometown appeal have attracted many of
these families. These factors have contributed, and continue to contribute, to the relative stability of
property values in the City.
Contacting the City’s Financial Management
This financial report is designed to provide a general overview of the City's finances. Questions
concerning this report or requests for additional financial information should be directed to Marie Kalka,
Finance Director, 3800 University Boulevard, West University Place, Texas, 77005; telephone 713.662.5816;
or for general City information, visit the City's website at www.westutx.gov.
24
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25
Basic Financial Statements
26
This Page Intentionally Left Blank
City of West University Place, Texas
Statement of Net Position
December 31, 2018
The Notes to Financial Statements are an integral part of this statement.
27
Governmental Business-type
Activities Activities Total
ASSET S
Cash and cash equi valents 14,088,918$ 1,737,487$ 15,826,405$
Investments 14,560,551 1,858,648 16,419,199
Recei vables, net of allowances 11,001,418 1,400,076 12,401,494
Internal balances (227,387) 227,387 -
Due from other governments 2,736,734 - 2,736,734
Inventory 15,527 - 15,527
Prepai ds 542,556 - 542,556
Cap i tal assets:
Nondepreci able capi tal assets 8,280,834 219,036 8,499,870
Depreci able capi tal assets, net 83,472,831 18,427,481 101,900,312
Total assets 134,471,982 23,870,115 158,342,097
DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refundi ng 1,210,858 - 1,210,858
Deferred out flows - pensi on 1,480,032 205,238 1,685,270
Deferred out flows - other postemployment benefits 332,132 46,058 378,190
Total deferred out flows of resources 3,023,022 251,296 3,274,318
LIABILITIES
Accounts payable and accrued l iabi li t ies 1,929,056 763,309 2,692,365
Accrued i nterest payable 423,559 - 423,559
Noncurrent l iabi l i t ies:
Due wi thi n one year 8,667,009 85,982 8,752,991
Due i n more than one year 31,464,755 58,406 31,523,161
Net pension liabi li ty 4,249,138 589,237 4,838,375
Other postemployment benefits li abi l ity 4,086,328 566,660 4,652,988
Total l i abi l i t ies 50,819,845 2,063,594 52,883,439
DEFERRED INFLOWS OF RESOURCES
Deferred i nflows - property taxes 19,537,933 - 19,537,933
Deferred i nflows - pensi on 1,070,892 148,503 1,219,395
Total deferred i nflows of resources 20,608,825 148,503 20,757,328
NET POSITION
Net i nvestment i n capi tal assets 54,149,042 18,646,517 72,795,559
Restr icted for:
Debt serv i ce 645,257 - 645,257
Enabl ing legi slat i on 56,954 - 56,954
Ci ty parks 1,461,899 - 1,461,899
METRO 121,152 - 121,152
Tree replacement 280,345 - 280,345
Governmental programming 303,424 - 303,424
Unrestricted 9,048,261 3,262,797 12,311,058
TOTAL NET POSITION 66,066,334$ 21,909,314$ 87,975,648$
Primary Government
City of West University Place, Texas
Statement of Activities
For the Fiscal Year Ended December 31, 2018
The Notes to Financial Statements are an integral part of this statement.
28
Operating Capital
Char ges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
PRIMARY GOVERNMENT
Governmental activities:
General government 3,805,870$ -$ 655,433$ -$
Public safety 8,172,672 1,402,809 174,721 -
Public works 4,628,774 913,079 124,401 -
Public services 4,616,244 1,918,415 693,029 -
Interest on long-term debt 1,354,716 - - -
Total governmental activities 22,578,276 4,234,303 1,647,584 -
Busi ness-type act i v i t i es:
Water and sewer 5,966,645 7,900,773 54,672 -
Soli d waste 1,322,894 1,750,775 19,873 -
Total busi ness-type act i v i t i es 7,289,539 9,651,548 74,545 -
TOTAL PRIMARY GOVERNMENT 29,867,815$ 13,885,851$ 1,722,129$ -$
General revenues:
Ad valorem taxes
Sales taxes
Franchi se taxes
Other taxes
Investment earnings
Other revenues
Transfers
Total general revenues and transfers
Chan ge in net position
Net position - beginning, as ori ginally reported
Implementation of change in accounting principle (see Note 1)
Net position - beginning, as restated
NET POSITION - ENDING
Program Revenues
29
Governmental Business-type
Activities Activities Total
(3,150,437)$ -$ (3,150,437)$
(6,595,142) - (6,595,142)
(3,591,294) - (3,591,294)
(2,004,800) - (2,004,800)
(1,354,716) - (1,354,716)
(16,696,389) - (16,696,389)
- 1,988,800 1,988,800
- 447,754 447,754
- 2,436,554 2,436,554
(16,696,389) 2,436,554 (14,259,835)
19,304,056 - 19,304,056
1,172,256 - 1,172,256
1,128,060 - 1,128,060
13,528 - 13,528
432,447 40,370 472,817
528,572 12,665 541,237
2,680,546 (2,680,546) -
25,259,465 (2,627,511) 22,631,954
8,563,076 (190,957) 8,372,119
60,264,162 22,432,327 82,696,489
(2,760,904) (332,056) (3,092,960)
57,503,258 22,100,271 79,603,529
66,066,334$ 21,909,314$ 87,975,648$
Net (Expense) Revenue
and Changes in Net Position
City of West University Place, Texas
Balance Sheet - Governmental Funds
December 31, 2018
The Notes to Financial Statements are an integral part of this statement.
30
Total
Governmental
Funds
ASSET S
Current assets:
Cas h and cash equival ents 6,411,092$ 1,782,7 95$ 2,642,1 49$ 10,836,036$
Investments 6,855,750 1,907,117 2,320,640 11,083,5 07
Receivables, net of allowances 6,819,834 3,956,721 223,257 10,999,812
Due from ot her funds 34,7 69 - 4,7 38 39,5 07
Due from ot her governments 1,665,277 1,071,457 - 2,736,7 34
Inventory 15,527 - - 15,527
Prepaids 173,849 - - 173,849
TOTAL ASSETS 21,976,098$ 8,718,090$ 5,190,784$ 35,884,972$
LIABILITIES
Accounts payable and accrued l iabi l i t ies 1,286,316$ -$ 247,897$ 1,534,213$
Due to ot her f unds58,5 31 - 39,5 07 98,038
Total liabili t i es 1,344,847 - 287,404 1,632,2 51
DEFERRED INFLOWS OF RESOURCES:
Unavailable revenue - property taxes 12,132,565 7,849,799 - 19,982,364
Unavailable revenue - warrants 196,234 - - 196,234
Unavailable revenue - ambulance services 54,544 - - 54,544
Unavailable revenue - grants 13,950 - 67,336 81,286
Total deferred inflows of resources 12,397,293 7,849,799 67,336 20,314,428
FUND BALANCES
Nonspendable:
Inventory 15,527 - - 15,527
Prepaids 173,849 - - 173,849
Restricted for:
Debt serv ice - 868,291 - 868,291
Enabl ing legi slat i on - - 56,954 56,954
Ci ty parks - - 1,461,899 1,461,899
METRO - - 121,152 121,152
Tree repl acement - - 280,345 280,345
Governmental programmi ng 303,424 - - 303,424
Assigned to:
Purchases on order 118,377 - - 118,3 77
Capi tal proj ects f unds- - 2,915,694 2,915,694
Unassi gned 7,622,7 81 - - 7,622,7 81
Total fund balances 8,233,958 868,291 4,836,044 13,938,293
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES 21,976,098$ 8,718,090$ 5,190,784$ 35,884,972$
Nonmajor
Governmental General Fund
Debt Service
Fund
City of West University Place, Texas
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
December 31, 2018
The Notes to Financial Statements are an integral part of this statement.
31
TOTAL FUND BALANCES - GOVERNMENTAL FUNDS 13,938,293$
Amounts reported for governmental activities in the statement
of net position are different because:
Capital assets used in governmental activities are not current financial
resources and therefore are not reported in the governmental funds.
Capital assets, nondepreciable (excluding internal service)8,280,834$
Capital assets, net depreciable (excluding internal service)82,081,451 90,362,285
Other long-term assets are not available to pay for current period
expenditures and, therefore, are reported as unavailable revenue
in the governmental funds.
Property taxes 444,431$
Warrants 196,234
Ambulance services 54,544
Grants 81,286 776,495
Internal service funds are used by management to charge certain costs
to individual funds. A portion of the assets, deferred outflows, liabilities
and deferred inflows of the internal service funds are included
in the governmental activities in the statement of net position. 7,460,954
Long-term l iabi l i t i es and related deferred outflows and deferred inflows
of resources are not due and payable in the current period and, therefore,
are not reported as liabi l it ies or deferrals i n the governmental funds.
General obl igat i on bonds and cert ificates of obligat i on (38,370,000 )$
Premi ums on bonds and cert ificates of obligat i on (445,481)
Accrued i nterest on bonds and cert ificates of obligat ion (423,559)
Compensated absences (1,236,831)
Deferred charge on refunding 1,210,858
Net pensi on l i abil i ty (4,032,314)
Deferred out flows of resources - pensi on 1,404,509
Deferred inflows of resources - pensi on (1,016,247)
Other postemployment benefits li abil i ty (3,877,812)
Deferred out flows of resources - other postemployment
benefits 315,184 (46,471,693)
NET POSITION OF GOVERNMENTAL ACTIVITIES 66,066,334$
City of West University Place, Texas
Statement of Revenues, Expenditures, and Changes
in Fund Balances - Governmental Funds
For the Fiscal Year Ended December 31, 2018
The Notes to Financial Statements are an integral part of this statement.
32
Total
Governmental
Funds
REVENUES
Ad valorem taxes 11,652,747$ 7,588,217$ -$ 19,240,964$
Sales taxes 1,172,256 - - 1,172,256
Franchise taxes 1,128,060 - - 1,128,060
Other taxes 13,528 - - 13,528
Permits, licenses, and fees 668,694 - 43,400 712,094
Fines and forfeitures 218,175 - 14,523 232,698
Char ges for services 3,038,733 - - 3,038,733
Intergovernmental 284,974 - 586,114 871,088
Contributions - - 661,479 661,479
Investment earnings 249,105 19,741 62,085 330,931
Other revenues 525,597 - - 525,597
Total revenues 18,951,869 7,607,958 1,367,601 27,927,428
EXPENDITURES
Current:
General government 3,323,639 - 9,859 3,333,498
Publ ic safety 8,155,677 - - 8,155,677
Publ ic works 2,992,352 - 27,427 3,019,779
Publ ic serv i ces 3,693,301 - 307,678 4,000,979
Cap i tal outlay 103,320 - 845,838 949,158
Debt serv i ce:
Pri nc i pal - 7,770,000 - 7,770,000
Interest and fiscal agent fees - 1,070,033 - 1,070,033
Total expendi tures 18,268,289 8,840,033 1,190,802 28,299,124
Excess (deficiency) of revenues
over (under ) expenditures 683,580 (1,232,075) 176,799 (371,696)
OTHER FINANCING SOURCES (USES)
Transfers in 1,530,048 1,200,246 1,227,290 3,957,584
Transfers out (200,000) - (1,047,338) (1,247,338)
Total other financing sources (uses)1,330,048 1,200,246 179,952 2,710,246
Net change in fund balances 2,013,628 (31,829) 356,751 2,338,550
Fund balances, beginning of year 6,220,330 900,120 4,479,293 11,599,743
FUND BALANCES, END OF YEAR 8,233,958$ 868,291$ 4,836,044$ 13,938,293$
General Fund
Debt Service
Fund
Nonmajor
Governmental
City of West University Place, Texas
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended December 31, 2018
The Notes to Financial Statements are an integral part of this statement.
33
NET CHANGE IN FUND BALANCES - GOVERNMENTAL FUNDS 2,338,550$
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 960,133$
Depreciation expense (3,142,046) (2,181,913)
Revenues in the statement of activities that do not provide current financial resources
are not reported as revenue in the funds.
Property taxes 63,092$
Warrants 81,286
Ambulance services 54,544
Grants 196,234 395,156
The i ssuance of long-term debt prov i des current fi nanci al resources to governmental
funds, whi le the repayment of pr i nc i pal of long-term debt consumes the current financi al
resources of governmental funds. Also, governmental funds report the effect of premiums,
discounts, and si mi lar i tems when i t is first i ssued, whereas these amounts are deferred and
amort i zed i n the statement of act i v i t i es.
Pr i nc i pal repayments 7,770,000$
Amort i zat i on of bond premiums 118,447
Amort i zat i on of deferred charges on refundi ng (381,306)
Change i n accrued i nterest (21,824)
Compensated absences (96,878) 7,388,439
The changes i n net pens i on and other postemployment benefi ts li abi l i t i es and related
deferred outflows and de ferred i nflows of resources are reported i n the statement of
activities, but do not require the use of current financial resources and, therefore,
are not reported as expenditures in the governmental funds. The net change consists
of the following:
Change in net pension liability 2,119,602$
Change in deferred outflows of resources - pension (1,738,811)
Change in deferred inflows of resources - pension (921,150)
Change in other postemployment benefits liability (264,071)
Change in deferred outflows of resources - other postemployment
benefits 148,530 (655,900)
Internal service funds are used by management to charge the costs of certain
activities to individual funds. A portion of the net revenue of the internal service
funds is reported with governmental activities. 1,278,744
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 8,563,076$
City of West University Place, Texas
Statement of Net Position
Proprietary Funds
December 31, 2018
The Notes to Financial Statements are an integral part of this statement.
34
Governmental
Activities
Totals Total
Enterprise Internal
Funds Service Funds
ASSETS
Current assets
Cash and cash equi valents 1,439,342$ 298,145$ 1,737,487$ 3,252,882$
Investments 1,539,71 3 318,935 1,858,648 3,477,044
Recei vabl es, net of allowances 1,093,342 306,734 1,400,076 1,606
Due from ot her funds- - - 74,906
Prepaids - - - 368,7 07
Total current assets 4,072,397 923,814 4,996,211 7,175,145
Noncurrent assets
Cap ital assets
Land 193,875 - 193,875 -
Construct i on in progress 25,161 - 25,161 -
Buildi ngs and improvements 459,625 - 459,625 -
Machinery and equi pment 2,325,680 - 2,325,680 4,127,255
Water and sewer systems 56,703,215 - 56,703,215 -
Accumulated depreciat ion (41,061,039) - (41,061,039) (2,735,875)
Total capital assets (net o f accumulated depreci at i on)18,646,517 - 18,646,517 1,391,380
Total noncurrent assets 18,646,517 - 18,646,517 1,391,380
Total assets 22,718,914 923,814 23,642,728 8,566,525
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows - pension 146,015 59,223 205,238 75,523
Deferred outflows - other postemployment bene fits 32,767 13,291 46,058 16,948
Total deferred outflows of resources 178,782 72,514 251,296 92,471
LIABILITIES
Current liabi lit ies
Accounts payable and accrued l i abili t ies 665,633 97,676 763,309 394,843
Due to other funds 9,245 3,421 12,666 3,709
Compensated absences 74,400 11,582 85,982 27,182
Total current liabil it i es 749,278 112,679 861,957 425,734
Noncurrent liabilit ies
Compensated absences 58,406 - 58,406 52,270
Net pensi on liabi lity 419,207 170,030 589,237 216,824
Other postemployment benefits li abili ty 403,144 163,516 566,660 208,516
Total noncurrent liabilit ies 880,757 333,546 1,214,303 477,610
Total li abili t ies 1,630,035 446,225 2,076,260 903,344
DEFERRED INFLOWS OF RESOURCES
Deferred inflows - pension 105,651 42,852 148,503 54,645
Total deferred i nflows of resources 105,651 42,852 148,503 54,645
NET POSITION
Net i nvestment i n capi tal assets 18,646,517 - 18,646,517 1,391,380
Unrestricted 2,515,493 507,251 3,022,744 6,309,627
TOTAL NET POSITION 21,162,010$ 507,251$ 21,669,261$ 7,701,007$
Reconciliation to the government-wide statement of ne t position:
Adj ustment to reflect i nternal serv ice fund act iv it ies related to enterprise funds 240,053
Net position of business-type activities 21,909,314$
Business-Type Activities - Enterprise Funds
Water and
Sewer Solid Waste
City of West University Place, Texas
Statement of Revenues, Expenses, and Changes
in Net Position - Proprietary Funds
For the Fiscal Year Ended December 31, 2018
The Notes to Financial Statements are an integral part of this statement.
35
Governmental
Activities
Totals Total
Enterprise Internal
Funds Service Funds
OPERATING REVENUES
Charges for sal es and serv ices 7,900,77 3$ 1,750,775$ 9,651,548$ 5,241,614$
Other revenues - 12,665 12,665 7,156
Total operat i ng revenues 7,900,773 1,763,440 9,664,213 5,248,770
OPERATING EXPENSES
Costs of sales and serv i ces 3,178,510 976,181 4,154,691 2,789,795
Personnel 1,176,371 498,325 1,674,696 647,185
Repai rs and mai ntenance - - - 116,752
Depreciat i on 1,700,205 - 1,700,205 284,7 63
Total operat i ng expenses 6,055,086 1,474,5 06 7,529,5 92 3,838,495
Operat i ng i ncome 1,845,687 288,934 2,134,621 1,410,275
NONOPERATING REVENUES (EXPENSES)
Intergovernmental 54,672 19,873 74,545 33,7 31
Investment earnings 30,7 32 9,638 40,370 101,516
Gain on sale of capital assets - - - 2,975
Total nonoperat ing revenues (expenses)85,404 29,511 114,915 138,222
Income before contribut ions and transfers 1,931,091 318,445 2,249,5 36 1,548,497
CONTRIBUTIONS AND TRANSFERS
Transfers in 29,700 - 29,700 -
Transfers out (2,450,246) (260,000) (2,71 0,246) (29,7 00)
Total contribut i ons and transfers (2,420,5 46) (260,000) (2,680,5 46) (29,7 00)
Change i n net posi t ion (489,455) 58,445 (431,010) 1,518,797
Net posi t ion - begi nni ng, as or iginally reported 21,889,699 542,628 22,432,327 6,219,163
Implementat i on of change i n account ing princ iple (see Note 1)(238,234) (93,822) (332,056) (151,501)
Prior peri od adjustment (see Note 12)- - - 114,5 48
Net pos it i on - begi nning, as restated 21,651,465 448,806 22,1 00,271 6,182,210
NET POSITION, END OF YEAR $ 21,162,010 $ 507,251 $ 21,669,261 $ 7,701,007
Reconciliation to the government-wide statement of acti vities:
Adj ustment to reflect i nternal serv ice fund act iv it ies rel ated to enterpri se f unds 240,053
Change in net position for business-type activities $ (190,957)
Business-Type Activities - Enterprise Funds
Water and
Sewer Solid Waste
City of West University Place, Texas
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended December 31, 2018
The Notes to Financial Statements are an integral part of this statement.
36
Governmental
Activities
Totals Total
Enterprise Internal
Funds Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cas h received from customers and users 8,072,270$ 1,770,897$ 9,843,1 67$ 7,156$
Cas h received from i nter fund charges for serv ices - - - 5,167,692
Cas h payments to suppliers (3,061,888) (986,738) (4,048,626) (3,146,091)
Cas h payments to employees (1,150,289) (476,664) (1,626,953) (574,607)
Net cash prov ided by operat ing act iv it ies 3,860,093 307,495 4,167,588 1,454,150
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers from ot her funds 29,7 00 - 29,7 00 -
Transfers to ot her funds (2,450,246) (260,000) (2,710,246) (29,7 00)
Intergovernmental 54,672 19,873 74,545 33,731
Net cash used for noncapital financi ng act iv i t ies (2,365,874) (240,127) (2,606,001) 4,031
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Acqui si t ion and construct i on of capital assets (296,251) - (296,251) (396,653)
Proceeds from sale of capital assets - - - 2,975
Net cash used for capital and related financi ng act i v i t i es (296,251) - (296,251) (393,678)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of i nvestments, net (809,412) (93,600) (903,012) (1,156,658)
Earnings on investments 30,732 9,638 40,370 101,516
Net cash prov ided by i nvest i ng act i v i t i es (778,680) (83,962) (862,642) (1,055,142)
Net increase i n cash and cash equi valents 419,288 (16,594) 402,694 9,361
Cash and cash equivalents, beginning balance 1,020,054 314,739 1,334,793 3,243,521
CASH AND CASH EQUIVALENTS, ENDING BALANCE 1,439,342$ 298,145$ 1,737,487$ 3,252,882$
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Operat ing i ncome 1,845,687$ 288,934$ 2,134,621$ 1,410,275$
Adj ustments to reconci le operating income to cash
prov ided by operat i ng act i v it i es:
Depreciat ion and amort izat ion 1,700,205 - 1,700,205 284,763
Changes in assets, l i abi li t i es and related deferrals:
(Increase) decrease i n assets and deferred out flows:
Receivables, net of allowances 215,294 26,768 242,062 33,109
Due from other funds - - - (74,906)
Prepaids - - - (131,519)
Deferred out flows - net pensi on liabili t y 225,661 68,911 294,57 2 69,332
Deferred out flows - other postemployment benefits (15,439) (6,264) (21,703) (7,986)
Increase (decrease) i n liabilit ies and deferred inflows:
Accounts payabl e and accrued li abili t i es 120,908 (13,978) 106,930 (111,734)
Due to ot her funds 9,245 3,421 12,666 3,7 09
Unearned revenue (57,328) (19,311) (76,639) (32,1 25)
Compensated absences 4,306 (9,286) (4,980) 13,967
Net pensi on liabili t y (308,333) (81,240) (389,57 3) (65,595)
Ot her postemployment benefits liabili t y 25,420 10,312 35,732 13,150
Deferred i nflows - net pension liabili t y 94,467 39,228 133,695 49,710
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,860,093$ 307,495$ 4,167,588$ 1,454,150$
Water and
Sewer Solid Waste
Business-Type Activities - Enterprise Funds
City of West University Place, Texas
Notes to the Financial Statements
37
Note 1. 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 University 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, the 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. 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.
City of West University Place, Texas
Notes to the Financial Statements
38
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 nonfiduciary 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 government-wide and fund financial statements are presented separately, 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 the accumulation of resources that are restricted,
committed, or assigned for the payment of principal and interest on long-term obligations of
governmental funds. 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 funds 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.
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.
City of West University Place, Texas
Notes to the Financial Statements
39
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 employee 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 transfers 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.
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.
City of West University Place, Texas
Notes to the Financial Statements
40
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.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However,
debt service expenditures 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.
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). Property taxes, municipal court, ambulance services and all other
revenue items are considered to be measurable and available only when cash is received by the City.
F. Adoption of New Accounting Standards
In fiscal year 2018, the City adopted Governmental Accounting Standards Board (GASB) Statement No.
75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (GASB 75).
The requirements of GASB 75 apply to the financial statements of all state and local government
employers whose employees are provided postemployment benefits other than pensions (“other
postemployment benefits” or “OPEB”). GASB 75 establishes standards for measuring and recognizing
liabilities, deferred outflows and deferred inflows of resources, and expenses related to the OPEB plan.
Requirements for note disclosures and Required Supplementary Information are also addressed. The
implementation of GASB 75 has no impact on the City’s governmental fund financial statements, which
continue to report expenditures in the actual contribution amount. However, the adoption of GASB 75
resulted in the retroactive restatement of the City’s beginning net position in the fiscal year 2018
government-wide and proprietary fund financial statements, which are reported using the economic
resources measurement focus, to reflect the beginning-of-year OPEB liability and related deferred
inflows and deferred outflows of resources as measured under GASB 75. See Note 12 for information
regarding the restatement of beginning net position.
In June of 2018, the GASB issued Statement No. 89, Accounting for Interest Cost Incurred Before the End
of a Construction Period (GASB 89). GASB 89 removes the previous requirement that interest cost
incurred before the end of a construction period be capitalized and included in the historical cost of a
capital asset in financial statements prepared using the economic resources measurement focus. Under
GASB 89, such interest cost is expensed in the period in which the cost is incurred. The City adopted
GASB 89 during fiscal year 2018 and the implementation of this new standard did not have a material
effect on the financial statements.
G. 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 local government investment pools, 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.
City of West University Place, Texas
Notes to the Financial Statements
41
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.
2. Investments
Investments, with certain exceptions, are reported at fair value. The exceptions are investments in
external investment pools and nonparticipating interest earning contracts, such as certificates of
deposit, which are reported at amortized cost and a cost-based measure, respectively.
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, its agencies and instrumentalities
Certificates of deposit that meet certain criteria
Money market mutual funds that meet certain criteria
Local government investment pools
3. Inventories and Prepaid Items
Inventories are valued at cost using the first-in/first-out (FIFO) method. The cost of such inventories is
recorded as expenditures/expenses when consumed rather than when purchased.
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 land and improvements, construction in progress, buildings and
improvements, machinery and equipment, infrastructure (e.g. roads, bridges, sidewalks, and similar
items), and water and sewer systems 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 acquisition value at the date of donation. Major outlays for
capital assets and improvements are capitalized as projects are constructed. 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.
Land and improvements and construction in progress are not depreciated. Buildings and
improvements, machinery and equipment, infrastructure, and water and sewer systems of the primary
government are depreciated using the straight-line method over the following estimated useful lives:
Asset Description
Estimated
Useful Life
Buildings10 to 50 years
Improvements 5 to 50 years
Machinery and equipment 3 to 30 years
Water and sewer system 5 to 60 years
Infrastructure 50 years
City of West University Place, Texas
Notes to the Financial Statements
42
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 the following items
that qualify for reporting in this category:
In the government-wide and proprietary fund statements of net position:
A deferred charge on refunding bonds 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 outflows related to net pension and other postemployment benefit liabilities result from
differences in projected and actual earnings on plan investments, expected and actual
economic experience, changes in actuarial assumptions and other inputs, and contributions
made subsequent to the measurement date of each plan. These activities are amortized over
the weighted average remaining service life of all participants in the respective qualified
pension and OPEB plan, except for projected and actual earnings differences on investments,
which are amortized on a closed basis over a 5-year period, and contributions made
subsequent to the measurement date of each plan, which are recognized in the subsequent
fiscal year.
In addition to liabilities, the statement of financial position (or balance sheet) will sometimes report a
separate section for deferred inflows of resources. This separate financial statement element, deferred
inflows of resources, represents an acquisition of net position (or fund balance) 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
the following items that qualify for reporting in this category:
In the governmental funds balance sheet:
Unavailable revenues from property taxes, warrants, ambulance services, and grants are
deferred and recognized as an inflow of resources in the period that the amounts become
available.
In the government-wide and proprietary fund statements of net position:
A deferred inflow of resources results from property taxes that were levied and/or collected in
the current period for use in the subsequent period.
Deferred inflows related to net pension liability results from differences in projected and actual
earnings on plan investments, expected and actual economic experience, changes in actuarial
assumptions and other inputs. These activities are amortized over the weighted average
remaining service life of all participants in the respective qualified pension plan, except for
projected and actual earnings differences on investments, which are amortized on a closed
basis over a 5-year period.
City of West University Place, Texas
Notes to the Financial Statements
43
6. Compensated 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 Sevice
(Months)
Full Time
Employees
Shift Fire
Department
Personnel
3/4 time
employees
1 - 48 160 hours 240 hours 120 hours
49 - 144 240 hours 360 hours 180 hours
145 - 240 320 hours 480 hours 240 hours
More than 240 400 hours 600 hours 225 hours
Maximum Vacation Leave Accrual
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
financial resources are maintained separately and represent a reconciling item between the fund and
government-wide presentations.
7. Long-Term Obligations
The government-wide financial statements and proprietary fund type fund financial statements report
long-term debt and other long-term liabilities in the applicable governmental activities, business-type
activities, or proprietary fund type statement of net position. Bond premiums and discounts are
amortized over the life of the bonds using the effective interest method, if material. Bonds payable are
reported net of the applicable bond premiums or discounts.
The fund financial statements report bond premiums and discounts 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.
Long-term debt is recognized as a liability of a governmental fund when due, or when resources have
been accumulated in the debt service fund for payment early in the following year. For other long-term
obligations, only that portion expected to be paid from expendable available financial resources is
reported as a fund liability of a governmental fund. Long-term liabilities expected to be paid from
proprietary fund operations are accounted for in those funds.
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 and a transfer of resources from the water and
sewer fund for revenue bonds refunded through general obligation debt in a prior year. 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.
City of West University Place, Texas
Notes to the Financial Statements
44
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. Pensions
For 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.
9. Other Postemployment Benefits (OPEB)
The City offers two OPEB plans, a defined benefit group-term life insurance plan known as the
Supplemental Death Benefits Fund (“SDBF”) administered by TMRS and a single-employer defined
benefit other postemployment benefits (OPEB) plan known as the Retiree Health Care Plan (the “Plan”)
administered by the City. Total OPEB liability, deferred outflows of resources and deferred inflows of
resources related to total OPEB liability, and total OPEB expense have been determined on the same
basis as they are reported by the Plans. For this purpose, the Plans recognize benefit payments when
due and payable in accordance with the benefit terms.
10. 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.
11. 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, when
the components of unrestricted fund balance can be used for the same purpose, committed fund
balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last.
12. Fund Balance Policies
Fund balance of governmental funds is 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). The City reports the following classifications of fund balance:
Nonspendable fund balance – includes amounts that are not in spendable form or are legally or
contractually required to be maintained intact.
City of West University Place, Texas
Notes to the Financial Statements
45
Restricted fund balance – includes amounts that have external constraints imposed upon the use of the
resources by creditors, grantors, contributors, laws or regulations of other governments or imposed by
law through constitutional provisions or enabling legislation.
Committed fund balance - includes amounts that can be used only for the specific purposes pursuant
to constraints imposed 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.
Assigned fund balance – includes amounts that 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.
13. 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
and liabilities and deferred outflows and inflows of resources, and the 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.
H. 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.
City of West University Place, Texas
Notes to the Financial Statements
46
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 funds and
internal service funds include the operating 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.
Note 2. Stewardship, Compliance and Accountability
A. Budgetary Information
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, 2018. 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 fund are all special revenue funds that have adopted budgets.
B. Encumbrances
Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders,
contracts) outstanding at year-end are reported as restricted, committed, or assigned fund balances as
appropriate. Encumbrances represent the estimated amount of expenditures ultimately to result when
these outstanding items are completed. The encumbrances do not constitute expenditures or liabilities
in the current period because the commitments will be reappropriated and honored during the
subsequent year.
As of December 31, 2018, significant encumbrances included in the governmental funds include fund
balance assignments of $118,377 in the general fund for purchase orders.
City of West University Place, Texas
Notes to the Financial Statements
47
Note 3. Deposits and Investments
As of December 31, 2018, the City had the following deposits and investments:
Value
Weighted
Average
Maturity (Years)
Deposits
Cash 3,810,700$
Cash equivalents:
TexPool external investment pool 12,008,130 0.06
Other 7,575
T otal 15,826,405$
Investments
U.S. government agency bonds/notes 12,974,152 0.44
U.S. Treasury notes 2,988,165 0.49
Corporation's certificates of deposit 456,882 0.44
T otal 16,419,199$
Portfolio weighted average maturity 0.28
A. Deposits
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, to the extent the deposits exceed FDIC coverage. As of December 31, 2018,
the combined values of pledged securities and FDIC coverage exceeded bank balances for the City,
excluding the bank balances of the Corporation, to which the City’s investment policy collateralization
requirements have not been extended. The Corporation’s bank balances exceeded FDIC coverage by
$390,863 at December 31, 2018.
TexPool
TexPool is a local government investment pool, duly chartered and overseen by the State Comptroller’s
Office, and administered and managed by Federated Investors, Inc. State Street Bank serves as the
custodial bank. TexPool’s investment portfolio consists of U.S. Government securities; collateralized
repurchase and reverse repurchase agreements; and AAA-rated money market mutual funds. The
pool’s investments are highly rated by nationally recognized statistical rating organizations, have no
more than five percent concentrated in one issuer (excluding U.S. government securities), and are
sufficiently liquid to meet reasonably foreseeable redemptions.
TexPool transacts at a net asset value of $1.00 per share, and maintains a weighted average maturity of
60 days or less and a weighted average life of 120 days or less. TexPool has a redemption notice period
of one day and investors 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.
City of West University Place, Texas
Notes to the Financial Statements
48
B. Investments
The City’s investments are stated at fair value, with certain exceptions described below. The City
categorizes its fair value measurements within the fair value hierarchy established by GASB Statement
No. 72, Fair Value Measurement and Application, which provides a framework for measuring fair value
and 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.
Certain of the City’s investments are not required to be measured at fair value; these include its
investment in the TexPool external investment pool, which is measured at amortized cost and is included
in cash equivalents, and its investments (through the Corporation) in certificates of deposit, which are
measured based on cost. These instruments are exempt from categorization within the fair value
hierarchy.
As of December 31, 2018, the City had the following recurring fair value measurements:
Quoted Prices in Other
Ending Active Markets Observable Inputs
Investments by Fair Value Level Balance (Level 1) (Level 2)
U.S. Government agency bonds/notes:
Federal Home Loan Bank 4,965,559$ -$ 4,965,559$
Federal Farm Credit Bank 2,998,601 - 2,998,601
Federal National Mort gage Association Notes 5,009,992 - 5,009,992
U.S. Treasury notes 2,988,165 2,988,165 -
Total 15,962,317$ 2,988,165$ 12,974,152$
Fair Value Measurements Using
The U.S. government agency bonds and notes included in Level 2 of the fair value hierarchy are valued
using a market approach based on a matrix pricing technique, whereby valuation is determined in
reference to benchmark prices and interest rates.
City of West University Place, Texas
Notes to the Financial Statements
49
Interest rate risk
Interest rate risk is the risk that changes in interest rates may adversely affect the value of the
investments. The City structures its investment portfolio so that securities mature to meet cash
requirements for ongoing operations, and monitors interest rate risk using weighted average maturity
analysis. In accordance with its investment policy, the City manages its exposure to declines in fair
values by limiting the weighted average maturity of its investment portfolio as a whole to no more than
365 days. The maximum allowable stated maturity of any individual investment owed by the City shall
not exceed three years from the date of purchase, unless matched to a specific cash flow.
Credit risk
The City's policy requires that investments are limited to only certain instruments that are authorized by
the Public Funds Investment Act. Further specifications are that external investment pools must be rated
no lower than "AAA" or an equivalent rating by at least one nationally recognized rating service, United
States Treasury and agency investments are guaranteed (either express or implied) and backed by the
full faith and credit of the United States or its respective agencies, and certificates of deposit are
guaranteed or insured by the Federal Deposit Insurance Corporation (FDIC) or fully collateralized under
an approved pledge agreement.
As of December 31, 2018, the City's investment in TexPool was rated "AAAm" by Standard & Poor’s. The
City's investments in U.S. agency bonds and notes were rated “AA+” by Standard & Poor's and its
investment in U.S Treasury notes was rated "Aaa" by Moody's. The certificates of deposit are unrated.
Concentration of credit risk
The risk is the risk of loss attributed to the magnitude of a City’s investment in a single issuer. The City’s
investment policy limits investments by security type and institution. With the exception of U.S. Treasury
securities, government-sponsored enterprises (GSE’s), interest-bearing checking accounts that are fully
collateralized, and authorized local government pools, the City will diversify the entire portfolio to
comply with the investment strategy. In no case shall any single investment transaction be more than
twenty five-percent of the entire portfolio at the time of purchase of the security.
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 custody of securities is maintained 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.
City of West University Place, Texas
Notes to the Financial Statements
50
Note 4. Receivables
Amounts are aggregated into a single accounts receivable (net of allowances 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 service funds in the
aggregate, the enterprise funds, including the applicable allowances for uncollectible accounts:
General Debt Service
Nonmajor
Governmental
Internal
Service
Water and
Sewer
Solid
Waste Total
Ad valorem taxes 6,081,861$ 3,956,721$ -$ -$ -$ -$ 10,038,582$
Other taxes 351,168 - - - - - 351,168
Accounts 1,824,982 - - - 1,265,648 341,526 3,432,156
Intergovernmental 14,401 - 223,257 1,606 2,603 562 242,429
Other 5,930 - - - 4,968 - 10,898
Less: Allowance (1,458,508) - - - (179,877) (35,354) (1,673,739)
Totals 6,819,834$ 3,956,721$ 223,257$ 1,606$ 1,093,342$ 306,734$ 12,401,494$
Note 5. Capital Assets
The following is a summary of changes in capital assets for governmental activities for the year ended
December 31, 2018:
Beginning Ending
Balance Increases Balance
Governmental act i v it i es:
Capi tal assets, not bei ng depreci ated:
Land and improvements 7,798,042$ -$ -$ 7,798,042$
Construct ion i n progress 266,751 281,069 (65,028) 482,792
Total capi tal assets, not being deprec iated 8,064,793 281,069 (65,028) 8,280,834
Depreci able assets:
Buildi ngs and i mprovements 58,053,955 588,753 (34,972) 58,607,736
Machi nery and equipment 8,274,391 800,316 (507,831) 8,566,876
Infrastructure 66,633,784 - - 66,633,784
Total depreci able assets 132,962,130 1,389,069 (542,803) 133,808,396
Less accumulated depreci at i on f or:
Buildings and i mprovements (18,096,7 96) (1,746,321) 100,000 (19,7 43,117)
Machi nery and equipment (7,112,55 6) (347,812) 507,831 (6,952,5 37)
Infrastructure (22,307,235) (1,332,676) - (23,639,911)
Total accumul ated depreciat ion (47,516,5 87) (3,426,809) 607,831 (50,335,565)
Total depreci abl e assets, net 85,445,543 (2,037,740) 65,028 83,472,831
Governmental activities capital assets, net 93,510,336$ (1,756,671)$ -$ 91,753,665$
Less: Long-term debt outstandi ng (38,815,481)
Pl us: Deferred charge on refundi ng 1,210,858
Net Investment in Capital Assets 54,149,042$
Reclassificat i ons /
(Decreases)
City of West University Place, Texas
Notes to the Financial Statements
51
All capital assets constructed or paid for with funds of the component unit are titled in the City’s name.
Accordingly, component unit capital assets and construction in progress are recorded in the
governmental activities totals.
Depreciation expense was charged to governmental functions as follows:
Governmental activities:
General government 404,575$
Public safety 5,331
Public works 1,907,750
Public service 824,390
Capital assets held by the City's internal service fund 284,763
Total governmental activities depreciation expense 3,426,809$
The following is a summary of changes in capital assets for business-type activities for the year ended
December 31, 2018:
Beginning Ending
Balance Increases Balance
Business-type act iv i t i es:
Cap ital assets, not bei ng depreci ated:
Land and i mprovements 193,875$ -$ -$ 193,875$
Construct i on in progress 41,914 10,667 (27,420) 25,161
Total capital assets, not being deprec iated 235,789 10,667 (27,420) 219,036
Depreci able assets:
Buildings and improvements 459,625 - - 459,625
Water and sewer systems 56,437,682 238,113 27,420 56,703,215
Machinery and equi pment 2,278,208 47,472 - 2,325,680
Total depreciable assets 59,175,515 285,585 27,420 59,488,520
Less accumulated depreci at ion for:
Buildings and improvements (455,560) (4,065) - (459,625)
Water and sewer systems (37,783,274) (1,587,675) - (39,370,949)
Machinery and equi pment (1,121,999) (108,466) - (1,230,465)
Total accumulated depreciat i on (39,360,833) (1,700,206) - (41,061,039)
Total depreciable assets, net 19,814,682 (1,414,621) 27,420 18,427,481
Business-type activities capital assets, net 20,050,471$ (1,403,954)$ -$ 18,646,517$
Reclass ificat i ons /
(Decreases)
Depreciation expense was charged to business-type functions as follows:
Water and sewer 1,700,206$
Total business-type activities depreciation expense 1,700,206$
City of West University Place, Texas
Notes to the Financial Statements
52
Remaining commitments under related construction contracts for general government construction
projects at year end were as follows:
Approved Stored and
Construction Completed Remaining
Proj ects Budget To Date Commitment
Virtual gate project 599,180$ 155,606$ 443,574$
Buffalo speedway 1,946,675 284,686 1,661,989
Animal shelter 38,000 33,326 4,674
Construction at PARD admin 8,460 6,768 1,692
PW parking lot 175,000 - 175,000
Total 2,767,315$ 480,386$ 2,286,929$
The remaining commitments above will be primarily financed through completion of construction with
the resources of the capital projects funds, supplemented by the general fund and issuance of debt, as
needed.
Note 6. Long-term Liabilities
The following is a summary of changes in the City's total long-term liabilities for the year ended
December 31, 2018. In general, the City uses the general and debt service funds to liquidate
governmental long-term liabilities.
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental act i v it i es:
Bonds, notes and other payables:
General obl i gat ion bonds 40,095,000$ -$ 7,500,000$ 32,595,000$ * 7,655,000$
Cert ificates of obligat i on 6,045,000 - 270,000 5,775,000 * 255,000
Unamort ized premi ums and/or di scounts 563,928 - 118,447 445,481 *118,447
Total bonds, notes and other payables, net 46,703,928 - 7,888,447 38,815,481 8,028,447
Other l i abi l i t ies:
Compensated absences 1,205,438 572,806 461,961 1,316,283 638,562
Net pensi on liabi l i ty 6,434,335 4,409,983 6,595,180 4,249,138 -
Other postemployment benefit li abi l ity 3,828,634 433,328 175,634 4,086,328 -
Total governmental activities 58,172,335$ 5,416,117$ 15,121,222$ 48,467,230$ 8,667,009$
Long-term debt due in more than one year 31,464,755$
*Debt associated with governmental activities capital assets 38,815,481$
Amounts
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Busi ness-type activ i t ies:
Compensated absences 149,368$ 63,487$ 68,467$ 144,388$ 85,982$
Net pensi on liabi l i ty 978,810 524,994 914,567 589,237 -
Total other postemployment benefit li abi l i ty 530,925 60,090 24,355 566,660 -
Total business-type activities 1,659,103$ 648,571$ 1,007,389$ 1,300,285$ 85,982$
Long-term debt due in more than one year 58,406$
City of West University Place, Texas
Notes to the Financial Statements
53
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, OPEB liability, and net pension liability are generally
liquidated by the general fund. Interest on long-term debt is not accrued in governmental funds, but
rather is recognized as an expenditure when due.
Long-term debt at year end was comprised of the following debt issues:
I nterest
Descripti on Rates Balance
Governmental activities:
General obligation bonds
Permanent improvement
Series 2010 2.00 - 4.00 % 2,235,000$
Permanent improvement and refunding
Series 2009 2.50 - 4.50 % 4,055,000
Series 2010 2.00 - 4.00 % 3,700,000
Series 2011 2.00 - 3.00 % 800,000
Series 2012 2.00% 4,835,000
Series 2013 0.34 - 1.75 % 5,575,000
General obligation refunding
Series 2016 1.45 % 1,545,000
Series 2017 2.01 % 9,850,000
Total general obligation bonds 32,595,000
Certificates of obligation
Series 2009 2.50 - 4.50 % 970,000
Series 2010 2.00 - 4.00 % 3,005,000
Series 2010A 1.00 - 4.00 % 1,030,000
Series 2011 2.00 - 2.25 % 770,000
Total certificates of obligation 5,775,000
Total governmental activities long-term debt 38,370,000$
The annual requirements to amortize general obligation bonds and certificates of obligation
outstanding at year end were as follows:
Year Ending
December 31,Principal Interest Total
2019 7,910,000$ 920,492$ 8,830,492$
2020 8,060,000 750,016 8,810,016
2021 3,475,000 604,956 4,079,956
2022 3,445,000 488,966 3,933,966
2023 2,605,000 383,291 2,988,291
2024-2028 12,875,000 806,579 13,681,579
Totals 38,370,000$ 3,954,300$ 42,324,300$
Governmental Activities
City of West University Place, Texas
Notes to the Financial Statements
54
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. As of December 31, 2018, outstanding instruments include
general obligation bonds and certificates of obligation. These obligations are secured by the proceeds
of future ad valorem tax revenues levied on all taxable property located within the City and a limited
subordinate lien on, and pledge of, net water and sewer system revenues. The City is not obligated in
any manner for special assessment debt.
Defeased Bonds
In prior years, the City defeased certain outstanding bonds by placing proceeds of new bonds in
irrevocable escrow accounts to provide for all future debt service payments on the old bonds.
Accordingly, the escrow account assets and the defeased liabilities are not included in the City’s
financial statements. At December 31, 2018, the following outstanding bonds were considered
defeased (with a call date of February 1, 2020):
$3,595,000 - Series 2009 permanent improvement and refunding bonds
$2,375,000 – Series 2010 permanent improvement bonds
$3,275,000 – Series 2010 certificates of obligation
Federal Arbitrage
The Tax Reform Act of 1986 instituted certain arbitrage restrictions consisting of complex regulations with
respect to issuance of tax-exempt bonds after August 31, 1986. Arbitrage regulations deal with the
investment of tax-exempt bond proceeds at an interest yield greater than the interest yield paid to
bondholders. Generally, all interest paid to bondholders can be retroactively rendered taxable if
applicable rebates are not reported and paid to the Internal Revenue Service (IRS) at least every five
years for applicable bond issues. Accordingly, there is the risk that if such calculations are not
performed, or not performed correctly, a substantial liability to the City could result. The City has
estimated that it does not have any arbitrage liability as of December 31, 2018.
Note 7. Interfund Balances and Activity
1. Interfund Receivables and Payables
Interfund receivables and payables of the various funds at December 31, 2018 were as follows:
Interfund Interfund
Receivables Payables
General 34,769$ 58,531$
Water and sewer - 9,245
Solid waste - 3,421
Nonmajor 79,644 43,216
Totals 114,413$ 114,413$
Interfund balances consist of short-term lending/borrowing arrangements that have resulted primarily
from expenditures that are paid by one fund and then charged back to the appropriate other fund.
Additionally, some lending/borrowing may occur between two or more governmental funds due to
earned revenues not being received from outside agencies until the subsequent year.
City of West University Place, Texas
Notes to the Financial Statements
55
2. Interfund Transfers
Transfers between funds during the year were as follows:
Transfers Out Transfers In Amounts
General Nonmaj or 200,000$
Water and sewer Debt service 1,200,246
Water and sewer General 1,250,000
Soli d waste General 260,000
Nonmaj or General 20,048
Nonmaj or Water and sewer 29,700
Nonmaj or Nonmaj or 1,027,290
Totals 3,987,284$
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 provide resources from the
water and sewer fund to assist with debt service principal and interest payments when they become
due.
Note 8. 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") 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.
The City is the lessor of a building to Cyclone Cycles (the "Company"). This lease agreement (the
"Lease") is an operating lease with monthly rental payments of $4,467. The Lease expires November 30,
2019.
Minimum guaranteed income on all City noncancelable operating leases is as follows:
Year Ending Annual
December 31, Base Rent
2019 82,051$
2020 84,517
2021 87,055
2022 51,660
Total 305,283$
City of West University Place, Texas
Notes to the Financial Statements
56
Note 9. 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 2,827 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.
Note 10. Defined Benefit Pension Plan
Plan Description
The City participates in one of 883 plans in the nontraditional, joint contributory, hybrid defined benefit
pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency
created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8,
Texas Government Code (the TMRS Act) as an agent multiple-employer retirement system for municipal
employees in the State of Texas. The TMRS Act places the general administration and management of
the System with a six-member Board of Trustees. Although the Governor, with the advice and consent of
the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS’s defined
benefit pension plan is a tax-qualified plan under Section 401(a) of the Internal Revenue Code. TMRS
issues a publicly available comprehensive annual financial report (CAFR) that can be obtained at
www.tmrs.com.
All eligible employees of the City are required to participate in TMRS.
Benefits Provided
TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the
governing body of the City, within the options available in the state statutes governing TMRS.
At retirement, the benefit is calculated as if the sum of the employee’s contributions, with interest, and
the city-financed monetary credits with interest were used to purchase an annuity. Members may
choose to receive their retirement benefit in one of seven payments options. Members may also choose
to receive a portion of their benefit as a partial lump sum distribution in an amount equal to 12, 24, or 36
monthly payments, which cannot exceed 75% of the member’s deposits and interest.
City of West University Place, Texas
Notes to the Financial Statements
57
The plan provisions are adopted by City were as follows:
2018 2017
Employee deposit rate 7.00% 7.00%
Matching ratio (City to employee) 2 to 1 2 to 1
Years required for vesting 5 5
Service requirement eligibility
(expresed as age/years of service) 60/5, 0/20 60/5, 0/20
Updated service credit 100% Repeating, 100% Repeating,
Transfers Transfers
Annuity increase (to retirees) 70% of CPI Repeating 70% of CPI Repeating
Employees Covered by Benefit Terms
At the December 31, 2017 valuation and measurement date, the following employees were covered by
the benefit terms:
Inact i ve employees or benefici ari es currently recei v i ng benefits 108
Inactive employees entitled to but not yet receiving benefits 96
Active employees 118
Total 322
Contributions
The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and
the City matching percentages are either 100%, 150%, or 200%, both as adopted by the governing
body of the City. Under the state law governing TMRS, the contribution rate for each city is determined
annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially
determined rate is the estimated amount necessary to finance the cost of benefits earned by
employees during the year, with an additional amount to finance any unfunded accrued liability.
Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal
year. The contribution rates for the City were 13.55% and 13.56% in calendar years 2017 and 2018,
respectively. The City’s contributions to TMRS for the year ended December 31, 2018, were $1,280,642,
and were equal to the required contributions.
Net Pension Liability
The City’s Net Pension Liability (NPL) was measured as of December 31, 2017, and the Total Pension
Liability (TPL) used to calculate the NPL was determined by an actuarial valuation as of that date.
Actuarial assumptions
The total pension liability in the December 31, 2017 actuarial valuation was determined using the
following actuarial assumptions:
Inflat i on 2.5% per year
Overall payroll growth 3.0% per year
Investment rate of return 6.75%, net of pension plan investment expense, including inflation
City of West University Place, Texas
Notes to the Financial Statements
58
Salary increases were based on a service-related table. Mortality rates for active members, retirees, and
beneficiaries were based on the gender-distinct RP2000 Combined Healthy Mortality Table, with Blue
Collar Adjustment, with male rates multiplied by 109% and female rates multiplied by 103%. Based on
the size of the City, rates are multiplied by an additional factor of 100%. 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 Combined Healthy Mortality Tables with Blue Collar Adjustment
are used with males rates multiplied by 109% and female rates multiplied by 103% with a 3-year set-
forward for both males and females. In addition, a 3% minimum mortality rate is applied to reflect the
impairment for younger members who become disabled. The rates are projected on a fully
generational basis by scale BB to account for future mortality improvements subject to the 3% floor.
The actuarial assumptions were developed primarily from the actuarial investigation of the experience
of TMRS over the four year period from December 31, 2010 to December 31, 2014. They were adopted
in 2015 and first used in the December 31, 2015 actuarial valuation. The post-retirement mortality
assumption for healthy annuitants and Annuity Purchase Rate (APRs) are based on the Mortality
Experience Investigation Study covering 2009 through 2011 and dated December 31, 2013. In
conjunction with these changes first used in the December 31, 2013 valuation, the TMRS system
adopted the Entry Age Normal actuarial cost method and a one-time change to the amortization
policy. Plan assets are managed on a total return basis with an emphasis on both capital appreciation
as well as the production of income, in order to satisfy the short-term and long-term funding needs of
TMRS.
The long-term expected rate of return on pension plan investments was determined using a building-
block method in which best estimate ranges of expected future real rates of return (expected returns,
net of pension plan investment expense and inflation) are developed for each major asset class. These
ranges are combined to produce the long-term expected rate of return by weighting the expected
future real rates of return by the target asset allocation percentage and by adding expected inflation.
In determining their best estimate of a recommended investment return assumption under the various
alternative asset allocation portfolios, 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). The target allocation and best estimates of arithmetic real
rates of return for each major asset class are summarized in the following table:
Long-term
Expected Real
Tar get Rate of Return
Asset Class Allocation (Arithmetic)
Domestic equity 17.5% 4.55%
International equity 17.5% 6.35%
Core fixed income 10.0% 1.00%
Non-core fixed income 20.0% 3.90%
Real return 10.0% 3.80%
Real estate 10.0% 4.50%
Absolute return 10.0% 3.75%
Private equity 5.0% 7.50%
Total 100%
City of West University Place, Texas
Notes to the Financial Statements
59
Discount Rate
The discount rate used to measure the TPL was 6.75%. The projection of cash flows used to determine
the discount rate assumed that employee and employer contributions will be made at the rates
specified in statute. Based on that assumption, the pension plan’s fiduciary net position was projected
to be available to make all projected future benefit payments of current active and inactive
employees. Therefore, the long-term expected rate of return on pension plan investments was applied
to all periods of projected benefit payments to determine the TPL.
Changes in Net Pension Liability
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(a)(b)(a) - (b)
Balance at December 31, 2016 47,807,725$ 40,394,580$ 7,413,145$
Changes for the year:
Service cost 1,517,363 - 1,517,363
Interest 3,188,261 - 3,188,261
Change of benefit terms - - -
Difference between expected and actual
experience 198,868 - 198,868
Changes of assumptions - - -
Contributions - employer - 1,261,304 (1,261,304)
Contributions - employee - 651,628 (651,628)
Net investment income - 5,596,814 (5,596,814)
Benefit payments, including refunds of employee
contributions (2,665,812) (2,665,812) -
Administrative expense - (29,014) 29,014
Other changes - (1,470) 1,470
Net changes 2,238,680 4,813,450 (2,574,770)
Balance at December 31, 2017 50,046,405$ 45,208,030$ 4,838,375$
Increase (Decrease)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the NPL of the City, calculated using the discount rate of 6.75%, as well as what
the City’s net pension liability would be if it were calculated using a discount rate that is 1-percentage-
point lower (5.75%) or 1-percentage-point higher (7.75%) than the current rate:
1% Decrease in 1% Increase in
Discount Rate
(5.75%)
Discount Rate
(6.75%)
Discount Rate
(7.75%)
Net pension liability 11,637,721$ 4,838,375$ (775,167)$
Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in a separately-issued
TMRS financial report. That report may be obtained on the Internet at www.tmrs.com.
City of West University Place, Texas
Notes to the Financial Statements
60
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
Pensions
For the year ended December 31, 2018, the City recognized pension expense of $1,918,594.
At December 31, 2018, the City reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and
actual economic experience 233,871$ 75,376$
Chan ges in actuarial assumptions 170,757 -
Difference between proj ected and
actual investment earnings- 1,144,019
Contributions subsequent to the
measurement date 1,280,642 -
Totals 1,685,270$ 1,219,395$
$1,280,642 reported as deferred outflows of resources related to pensions resulting from contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability for
the year ending December 31, 2019. Other amounts reported as deferred outflows and inflows of
resources related to pensions will be recognized in pension expense as follows:
Year Ending
December 31,
2019 321,182$
2020 (28,904)
2021 (533,008)
2022 (574,037)
Totals (814,767)$
Note 11. Other Postemployment Benefits Plans
In addition to the pension plan discussed in Note 10, the City offers other postemployment benefits
(OPEBs) through two plans: Texas Municipal Retirement System’s Supplemental Death Benefits Fund, and
the City’s single-employer Retiree Health Care Plan.
Plan Descriptions
Supplemental Death Benefits Fund
Texas Municipal Retirement System (TMRS) administers a defined benefit group-term life insurance plan
known as the Supplemental Death Benefits Fund (SDBF). This is a voluntary program in which
participating member cities may elect, by ordinance, to provide group-term life insurance coverage for
their active members, including or not including retirees. Employers may terminate coverage under and
discontinue participation in the SDBF by adopting an ordinance before November 1 of any year to be
effective the following January 1. The City has elected to participate in the SDBF for its active members
including retirees. As the SDBF covers both active and retiree participants, with no segregation of assets,
the SDBF is considered to be an unfunded single-employer OPEB plan (i.e. no assets are accumulated in
a trust that meets the criteria in paragraph 4 of GASB Statement No. 75) for City reporting.
City of West University Place, Texas
Notes to the Financial Statements
61
Retiree Health Care Plan
The City administers a single-employer defined benefit other postemployment benefits (OPEB) plan,
known as the Retiree Health Care Plan (the RHCP). The RHCP offers medical benefits to eligible retirees
and their spouses. The RHCP has no plan assets accumulated in a trust that meet the criteria in
paragraph 4 of GASB Statement No. 75.
Total OPEB Liability
The City’s total OPEB liability (TOL) for each of its OPEB plans was measured as of December 31, 2017
and was determined by actuarial valuations as of that date.
Benefits Provided
At the December 31, 2017 valuation and measurement date, the following employees were covered by
the benefit terms:
SDBP RHCP
Inactive employees currently receiving benefits 70 16
Inactive employees entitled to but not yet receiving benefits 34 -
Active employees 118 50
Total 222 66
Supplemental Death Benefits Fund
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). The death benefit for retirees is considered an other
postemployment benefit (OPEB) and is a fixed amount of $7,500.
The member 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.
Contributions are made monthly based on the covered payroll of employee members of the
participating member city. The contractually required contribution rate is determined annually for each
city. The rate is based on the mortality and service experience of all employees covered by the SDBF
and the demographics specific to the workforce of the city. There is a one-year delay between the
actuarial valuation that serves as the basis for the employer contribution rate and the calendar year
when the rate goes into effect. The funding policy of this plan is to assure that adequate resources are
available to meet all death benefit payments for the upcoming year.
The retiree portion of contribution rates to the SDBF for the City was 0.05% in both calendar years 2017
and 2018. The City’s contributions to the SDBF for the year ended December 31, 2018 were $4,719, and
were equal to the required contributions.
Retiree Health Care Plan
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.
City of West University Place, Texas
Notes to the Financial Statements
62
Employees Hired Prior to January 1, 2009:
Non-exempt Employees – If you retire through TMRS and have been employed full-time for the City for
at least ten years immediately preceding the date of the retirement, you may continue coverage with
the City’s health plan.
Exempt Employees – If you retire through TMRS and have minimum of ten years of service credit with
TMRS of which five years immediately preceding the date of retirement were with the City, you may
continue to be covered through the City’s health plan. The benefit includes basic medical coverage,
excluding accidental death, life, disability and dental.
The City provides a subsidy to the retiree that varies based on the medical plan elected. Spouse and
dependents are eligible for continued coverage. Retirees are responsible for all costs associated with
spouse and dependent benefits, including premiums. Surviving spouses of deceased retirees are eligible
for continued coverage though COBRA according to regulatory requirements. All benefits terminate
when retiree becomes eligible for Medicare or other federal or state health insurance plans or if retiree
becomes employed, including self-employment.
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. TMRS retirement requirement: 5 years of service
at age 60; or 20 years of service regardless of age.
Actuarial Assumptions
In the December 31, 2017 actuarial valuations, the total liabilities for the SDBF and RHCP OPEBs were
determined using the following actuarial assumptions:
Inflati on 2.5% per year
Salary i ncreases 3.5 % to 10.5 % i ncludi ng i nflati on
Di scount rate 3.31%
The retiree’s share of benefit-related costs for the SDBF OPEB is assumed to be $0, and the healthcare
trend cost rate for the RHCP actuarial valuation is assumed at an initial rate of 7.50%, declining to an
ultimate rate of 5.25% after 11 years. The ultimate trend rate includes a 1.00% adjustment for the excise
tax.
Salary increases were based on a service-related table. Mortality rates for service retirees were based
on the RP2000 Combined Mortality Table with Blue Collar Adjustment with male rates multiplied by 109%
and female rates multiplied by 103% and projected on a fully generational basis with scale BB. Mortality
rates for disabled retirees were based on the RP2000 Combined Mortality Table with Blue Collar
Adjustment with male rates multiplied by 109% and female rates multiplied by 103% with a 3-year set-
forward for both males and females. The rates are projected on a fully generational basis with scale BB
to account for future mortality improvements subject to the 3% floor.
The actuarial assumptions used in the December 31, 2017, valuations were developed primarily from an
actuarial experience study of the four-year period from December 31, 2010 through December 31,
2014. For the SDBF OPEB, the post-mortality assumption for healthy annuitants and Annuity Purchase
Rate (APRs) are based on the Mortality Experience Investigation Study covering 2009 through 2011 and
dated December 31, 2013. The Entry Age Normal Actuarial Cost Method is used for the SDBF actuarial
valuation and the Individual Entry-Age Method is used for the RHCP actuarial valuation.
The discount rate (3.31%) was based on the Fidelity Index’s “20-Year Municipal GO AA Index” rate as of
December 31, 2017.
City of West University Place, Texas
Notes to the Financial Statements
63
Changes in Total OPEB Liability
SDBF RHCP
Balance at December 31, 2016 406,267$ 3,933,765$
Changes for the year:
Service cost 13,963 97,428
Interest on Total OPEB Liability 15,533 148,390
Change of benefit terms - -
Difference between expected and actual experience - -
Changes of assumptions or other inputs 37,637 180,101
Benefit payments (4,654) (175,442)
Net changes 62,479 250,477
Balance at December 31, 2017 468,746$ 4,184,242$
Total OPEB Liability
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability, calculated using the discount rate of 3.31%, as well as
what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1
percentage-point lower (2.31%) or 1 percentage-point higher (4.31%) than the current rate:
1% Decrease in 1% Increase in
Discount Rate
(2.31%)
Discount Rate
(3.31%)
Discount Rate
(4.31%)
Total OPEB liability
SDBF 565,806$ 468,746$ 393,744$
RHCP 4,565,769 4,184,242 3,831,384
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rate
In addition, the following disclosure is applicable to the RHCP only. The following presents the total OPEB
liability, calculated using the current healthcare rates, as well as what the City’s total OPEB liability
would be if it were calculated using a trend rate that is 1 percentage-point lower or 1 percentage-point
higher than the current trend rate:
1% Decrease 1% Increase
Healthcare Cost Healthcare Cost Healthcare Cost
Trend Rate Trend Rate Trend Rate
(6.2 % Decreasing (7.2 % Decreasing (8.2 % Decreasing
to 4.25 %)to 5.25 %)to 6.25 %)
Total OPEB liability
RHCP 3,724,673$ 4,184,242$ 4,719,912$
City of West University Place, Texas
Notes to the Financial Statements
64
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
For the year ended December 31, 2018, the City recognized OPEB expense of $36,584 for SDBF and
$271,444 for RHCP.
At December 31, 2018, the City reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows Deferred Outflows Deferred Inflows
of Resources of Resources of Resources of Resources
Chan ges in assumptions
and other inputs 30,549$ -$ 154,476$ -$
Contributions made subsequent
to the measurement date 4,719 - 188,446 -
Totals 35,268$ -$ 342,922$ -$
SDBF RHCP
The $4,719 and $188,466 reported as deferred outflows of resources resulting from contributions
subsequent to the measurement date for the SDBF and RHCP, respectively, will reduce the Total OPEB
liability during the year ending December 31, 2019. The other amounts reported as deferred outflows
and inflows of resources related to OPEB will be recognized in OPEB expense as follows:
Year Ending
December 31,S DBF RHCP
2019 7,088$ 25,626$
2020 7,088 25,626
20217,088 25,626
2022 7,088 25,626
2023 2,1 97 25,626
Thereaft er - 26,346
Totals 30,549$ 154,476$
City of West University Place, Texas
Notes to the Financial Statements
65
Note 12. Restatements
The City’s December 31, 2018 financial statements reflect restatements of beginning net position for the
following items:
Implementation of GASB Statement No. 75
As described in Note 1.F, the City implemented GASB Statement No. 75 during the year ended
December 31, 2018, resulting in a reduction of beginning net position by $3,092,960. The
reduction represents the recognition of an increase in the January 1, 2018 (beginning-of-year)
OPEB liability of $3,292,928, offset by January 1, 2018 deferred outflows of resources of $199,968.
These amounts were allocated on the government-wide and proprietary fund financial
statements as shown in the table below. Refer to Note 11 for more information regarding the
City’s OPEB plans.
Internal Service Fund Capital Assets – Correction of an Error
Net position of the internal service funds as of January 1, 2018 was increased by $114,548 to
reflect the correction of an error related to capital assets. Certain capital assets of the internal
service funds had been included in the governmental activities column on the government-
wide statement of net position, but expensed in the fund financial statements. This difference
represents an aggregate total asset cost of $397,403, offset by accumulated depreciation of
$282,855 at December 31, 2017. The effect on the change in net position of the internal service
funds for the year ended December 31, 2017 is an increase of $48,386.
The following table presents the effects of these restatements on the City’s December 31, 2018 financial
statements:
Governmental Bus iness-Type Water and Solid Internal
Act i v i t i es Act iv it ies Sewer Waste Servi ce
Beginning net posit ion, as prev iously reported 60,264,162$ 22,432,327$ 21,889,699$ 542,628$ 6,219,163$
Change i n accounti ng pr inciple (2,760,904) (332,056) (238,234) (93,822) (151,501)
Correct i on of error - - - - 114,548
Beginning net position, restated 57,503,258$ 22,100,271$ 21,651,465$ 448,806$ 6,182,210$
Note 13. Subsequent Event
Certificates of Obligation, Series 2019
On June 1, 2019, the City issued $4,040,000 in Certificates of Obligation, Series 2019 which was approved
by City Council on May 20, 2019 with Ordinance Number 2072. The proceeds from the sale of the
certificates will be used to fund all or a portion of the City’s contractual obligations incurred for the
design, purchase, construction, installation and equipment of a traffic surveillance and security system
(the Virtual Gate project).
66
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67
Required Supplementary Information
City of West University Place, Texas
Schedule of Revenues, Expenditures, and Changes
in Fund Balance – Budget and Actual
General Fund
For the Fiscal Year Ended December 31, 2018
68
Variance
Positive
Original Final Actual (Negative)
REVENUES
Taxes:
Ad valorem taxes 11,764,323$ 11,764,323$ 11,652,747$ (111,576)$
Sales taxes 1,136,106 1,136,106 1,172,256 36,150
Franchise taxes 1,097,700 1,097,700 1,128,060 30,360
Other taxes 15,000 15,000 13,528 (1,472)
Permits, licenses, and fees 525,900 525,900 668,694 142,794
Charges for serv ices 2,464,650 2,464,650 3,038,733 574,083
Fi nes and forfeitures 137,750 137,750 218,175 80,425
Intergovernmental 2,000 4,365 284,974 280,609
Investment earnings 80,810 80,810 249,105 168,295
Other revenues 391,748 391,748 525,597 133,849
Total revenues 17,615,987 17,618,352 18,951,869 1,333,517
EXPENDITURES
General government:
Administration 1,474,450 1,474,450 1,317,353 157,097
Finance 2,124,550 2,124,550 2,006,286 118,264
Total general government: 3,599,000 3,599,000 3,323,639 275,361
Publ ic safety:
Pol ice 5,010,850 5,073,086 4,554,729 518,357
Fire 3,574,550 3,600,965 3,600,948 17
Total publ ic safety: 8,585,400 8,674,051 8,155,677 518,374
Publ ic works 3,263,750 3,263,750 3,088,904 174,846
Publ ic serv ices 3,778,900 3,778,900 3,700,069 78,831
Total expenditures 19,227,050 19,315,701 18,268,289 1,047,412
Excess (deficiency) of revenues
over expenditures (1,611,063) (1,697,349) 683,580 2,380,929
OTHER FINANCING SOURCES (USES)
Transfers in 1,510,000 1,510,000 1,530,048 20,048
Transfers out (200,000) (200,000) (200,000) -
Total other financ ing sources (uses)1,310,000 1,310,000 1,330,048 20,048
Net change in fund balance (301,063) (387,349) 2,013,628 2,400,977
Fund balance, begi nning of year 6,220,330 6,220,330 6,220,330 -
FUND BALANCE, END OF YEAR 5,919,267$ 5,832,981$ 8,233,958$ 2,400,977$
Notes to Schedule of Revenue, Expenditures, and Changes in Fund Balance - Budget to Actual General Fund
Annual budgets are adopted on a basis consistent with generally accepted account i ng pr i nci ples (GAAP).
Budget
City of West University Place, Texas
Schedule of Changes in the Net Pension Liability
and Related Ratios -
Texas Municipal Retirement System
For the Fiscal Year Ended December 31, 2018
69
2017 2016 2015 2014
TOTAL PENSION LIABILITY
S erv i ce cost 1,517,363$ 1,441,040$ 1,417,162$ 1,163,400$
Interest 3,188,261 3,051,656 2,907,623 2,744,057
Differences between expected
and actual experi ence 198,868 (154,304) 485,089 440,869
Ch anges of assumpt i ons - - 946,917 -
Benefit payments, i ncluding re funds
of employee contri but i ons (2,665,812) (2,039,745) (2,153,197) (2,123,925)
Net change in total pensi on liabi l i ty 2,238,680 2,298,647 3,603,594 2,224,401
Total pensi on liabi l i ty - begi nni ng 47,807,725 45,509,078 41,905,484 39,681,083
TOTAL PENSION LIABILITY - ENDING (a)50,046,405$ 47,807,725$ 45,509,078$ 41,905,484$
PLAN FIDUCIARY NET POSITION
Contr ibut i ons - employer 1,261,304$ 1,139,861$ 1,046,460$ 799,153$
Contribut i ons - empl oyee 651,628 621,904 614,5 67 550,058
Net i nvestment income 5,596,814 2,575,734 56,952 2,131,607
Benefit payments, i nc l udi ng refunds
of empl oyee contribut i ons (2,665,812) (2,039,745) (2,15 3,1 97) (2,1 23,925)
Admi nistrat i ve expense (29,014) (29,101) (34,692) (22,258)
Ot her (1,470) (1,568) (1,713) (1,830)
Net change in plan fiduciary net position 4,813,450 2,267,085 (471,623) 1,332,805
Plan fiduciary net position - beginning 40,394,580 38,127,495 38,599,118 37,266,313
PLAN FIDUCIARY NET POSITION - ENDING (b)45,208,030$ 40,394,580$ 38,127,495$ 38,599,118$
NET PENSION LIABILITY - ENDING (a)-(b)4,838,375$ 7,413,145$ 7,381,583$ 3,306,366$
Plan fiduciary net position as a
percentage of total pension liability 90.33% 84.49% 83.78% 92.11%
Covered payroll 9,268,285$ 8,884,334$ 8,767,969$ 7,803,300$
Net pension liability as a
percentage of covered payroll 52.20% 83.44% 84.19% 42.37%
Notes to Schedule of Changes in the City's Net P ension Liability and Related Rati os
*GAS B S tatement No. 68 requi res 10 years of data; however, f our years of data i s presented as t he data for
the years pri or to 2014 i s not available. Addi t i onally, GASB Statement No. 68 requi res that the informat i on on
t hi s schedul e correspond wi t h t he per i od covered as of t he pl an measurement date (December 3 1 of t he
pr i or year ).
Measurment Year*
City of West University Place, Texas
Schedule of the City’s Contributions -
Texas Municipal Retirement System
For the Fiscal Year Ended December 31, 2018
70
2018 2017 2016 2015 2014
Actuari ally determi ned contr i but ion 1,280,642$ 1,255,853$ 1,139,862$ 1,045,142$ 799,153$
Contr i but ions i n relat i on to the
actuari ally determi ned contri but ion (1,280,642) (1,255,853) (1,139,862) (1,045,142) (799,153)
CONTRIBUTIONS DEFICIENCY (EXCESS)-$ -$ -$ -$ -$
Covered payroll 9,438,496$ 9,268,285$ 8,884,334$ 8,767,969$ 7,803,300$
Contr i but ions as a percentage of
covered payroll 13.57%13.55%12.83%11.92%10.24%
Notes to Schedule of Contributions
GASB Statement No. 68 requires 10 years of data; however, five years of data is presented as the data for the years pri or
to 2014 is not available. Addit i onally, GASB Statement No. 68 requires that the informat i on on thi s schedule correspond
with the period covered as of the reporting date (the City's fiscal year ).
Valuati on date: Actuarially determined contr ibut i on rates are calculated as of
December 31 and become effect ive i n January, 13 months later
Methods and Assumpt i ons Used to Determi ne Contr i but i on Rates:
Actuari al cost method Entry age normal
Amorti zat i on method Level percentage of payroll, closed
Remaini ng amort izat i on peri od 28 years
Asset valuati on method 10 year smoothed market; 15% soft corri dor
Inflation 2.5%
S alary i ncreases 3.5 % to 10.5 % i nc ludi ng i nflat ion
Investment rate of return 6.75%
Ret i rement age Experi ence-based table of rates that are specific to the Ci ty's plan of benefits.
Last updated for the 2015 valuat i on pursuant to an exper ience study of the
period 2010 - 2014.
Mortal it y RP2000 Combi ned Mortal i ty Table wi th Blue Collar Adjustment wi th male rates
mult i pl i ed by 109% and female rates mult ipl i ed by 103% and projected on a fully
generat i onal basi s wi th scale BB.
Other Informat ion:
There were no benefit changes duri ng t he year.
City of West University Place, Texas
Schedule of Changes in Total OPEB
Liability and Related Ratios
Texas Municipal Retirement System – Supplemental Death Benefits Fund
For the Fiscal Year Ended December 31, 2018
71
Measurement
Year*
2017
T OTAL OPEB LIABILITY
Service cost 13,963$
Interest on total OPEB liability 15,533
Change of benefit terms -
Difference between expected and actual
experience -
Changes of assumptions 37,637
Benefit payments (4,654)
Net change i n total OPEB l i abi li ty 62,479
Total OPEB l i abi li ty - begi nni ng 406,267
TOTAL OPEB LIABILITY - ENDING 468,746$
Covered payroll 9,268,285$
Total OPEB l i abi l i ty as a percentage of covered payroll 5.06%
Notes to Schedule of Changes in the Total OPEB Liability and Related Rati os
*GASB Statement No. 75 requires 10 years of data; however, one year of data is presented as the data for the years prior
to 2017 is not available. Additionally, GASB Statement No. 75 requires that information on this schedule
correspond with the period covered as of the plan measurement date (December 31 of the prior year).
The TMRS Supplementary Death Benefit Fund (SDBF) is considered to be an unfunded OPEB plan; therefore, no
plan fiduciary net position and related ratios are reported in the above schedule.
City of West University Place, Texas
Schedule of Changes in Total OPEB
Liability and Related Ratios
Retiree Health Care Plan
For the Fiscal Year Ended December 31, 2018
72
Measurement
Year*
2017
T OTAL OPEB LIABILITY
Service cost 97,428$
Interest on total OPEB liability 148,390
Change of benefit terms -
Difference between expected and actual
experi ence -
Changes of assumptions 180,101
Benefit payments (175,442)
Net change i n total OPEB l i abi li ty 250,477
Total OPEB l i abi li ty - begi nni ng 3,933,765
TOTAL OPEB LIABILITY - ENDING 4,184,242$
Covered-employee payroll 4,661,508$
Total OPEB l i abi l i ty as a percentage of covered payroll 89.76%
Notes to Schedule of Changes in the Total OPEB Liability and Related Rati os
*GASB Statement No. 75 requires 10 years of data; however, one year of data is presented as the data for the years prior
to 2017 is not available. Additionally, GASB Statement No. 75 requires that information on this schedule
correspond with the period covered as of the plan measurement date (December 31 of the prior year).
The Retiree Health Care Plan is considered to be an unfunded OPEB plan; therefore, no plan fiduciary net
position and related ratios are reported in the abov e schedule.
73
Combining and Individual Fund
Statements and Schedules
City of West University Place, Texas
Schedule of Revenues, Expenditures, and Changes
in Fund Balance - Budget and Actual
Debt Service Fund
For the Fiscal Year Ended December 31, 2018
74
Variance
Positive
Original Final Actual (Negative)
REVENUES
Ad valorem taxes 7,646,387$ 7,646,387$ 7,588,217$ (58,170)$
Investment earnings 3,400 3,400 19,741 16,341
Total revenues 7,649,787 7,649,787 7,607,958 (41,829)
EXPENDITURES
Debt Service:
Principal 7,770,000 7,770,000 7,770,000 -
Interest and fiscal agent fees 1,080,033 1,080,033 1,070,033 10,000
Total expendi tures 8,850,033 8,850,033 8,840,033 10,000
Excess (de fi ci ency) of revenues
over expendi tures (1,200,246) (1,200,246) (1,232,075) (31,829)
OTHER FINANCING SOURCES (USES)
Transfers i n 1,200,246 1,200,246 1,200,246 -
Total other financ i ng sources (uses)1,200,246 1,200,246 1,200,246 -
Net change in fund balance - - (31,829) (31,829)
Fund balance, beginning of year 900,120 900,120 900,120 -
FUND BALANCE, END OF YEAR 900,120$ 900,120$ 868,291$ (31,829)$
Budget
City of West University Place, Texas
Nonmajor Governmental Funds
December 31, 2018
75
SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for and report the proceeds of specific revenue sources
that are restricted or committed to expenditure for specified purposes other than debt service or
capital projects.
The Parks Fund is used to account for donations made by citizens for the specific purpose of improving
the City’s parks.
The Friends of West University Parks 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.
The Tree Replacement Fund is used to account for permits and fines collected to replace trees within
the City.
The Court Technology/Security Fund is used to account for a portion of traffic fines revenue set aside to
acquire technology and provide security for the municipal court.
The METRO Fund is used to account for the proceeds of a multi-year transportation grant from METRO.
The Emergency Grant Fund is used to account for the proceeds for disaster reimbursement.
CAPITAL PROJECTS FUNDS
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 Fund is used to account for a wide range of construction projects and the
acquisition of very costly capital equipment.
The Capital Reserve Fund is used to hold reserve funds to be spent on capital construction projects in
the future.
The Transportation Improvement Fund is used to account for the cost and financing of capital projects
to improve roads and the associated drainage issues.
City of West University Place, Texas
Combining Balance Sheet
Nonmajor Governmental Funds
December 31, 2018
76
ASSETS
Current assets:
Cash and cash equi valents 53,082$ 899,886$ 135,450$ 27,638$
Investments 56,784 456,882 144,895 29,566
Recei vabl es, net of allowances - - - -
Due from other funds 4,738 - - -
Total assets 114,604$ 1,356,768$ 280,345$ 57,204$
LIABILITIES AND FUND BALANCES
L i abi l i t i es:
Accounts payable and accrued l i abi l i t i es 4,735$ -$ -$ 250$
Due to other funds - 4,738 - -
Total l i abi l i t i es 4,735 4,738 - 250
DEFERRED INFLOWS OF RESOURCES:
Unavailabl e revenue - grants - - - -
Total deferred i nflows of resources - - - -
Fund Balances:
Restr i cted for:
Enabli ng l egi sl at i on - - - 56,954
Ci ty parks 109,869 1,352,030 - -
METRO - - - -
Tree replacement - - 280,345 -
Assigned to:
Cap i tal projects funds - - - -
Total fund balances 109,869 1,352,030 280,345 56,954
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES 114,604$ 1,356,768$ 280,345$ 57,204$
Court
Technology/
Security
Special Revenue Funds
Parks
Friends of the
Parks
Tree
Replacement
77
-$ -$ 185,318$ 317,178$ 1,023,597$ 2,642,149$
- - 198,241 339,296 1,094,976 2,320,640
155,921 - - - 67,336 223,257
- - - - - 4,738
155,921$ -$ 383,559$ 656,474$ 2,185,909$ 5,190,784$
-$ -$ -$ -$ 242,912$ 247,897$
34,769 - - - - 39,507
34,769 - - - 242,912 287,404
- - - - 67,336 67,336
- - - - 67,336 67,336
- - - - - 56,954
- - - - - 1,461,899
121,152 - - - - 121,152
- - - - - 280,345
- - 383,559 656,474 1,875,661 2,915,694
121,152 - 383,559 656,474 1,875,661 4,836,044
155,921$ -$ 383,559$ 656,474$ 2,185,909$ 5,190,784$
Total
Nonmajor
Governmental
Funds
Capital
Reserve
Transportation
Improvement
Capital
Projects
Capital Projects Funds
METRO
Emergency
Grant
Special Revenue Funds
City of West University Place, Texas
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances
Nonmajor Governmental Funds
For the Fiscal Year Ended December 31, 2018
78
REVENUES
Permits, licenses, and fees -$ -$ 43,400$ -$
Fines and forfeitures - - - 14,523
Intergovernmental - - - -
Contributions 51,960 609,519 - -
Investment earnings 2,750 7,342 4,690 926
Total revenues 54,710 616,861 48,090 15,449
EXPENDITURES
Current:
General government - - - 9,859
Public works - - 27,427 -
Public services 17,999 289,679 - -
Capital outlay 421,685 - - -
Total expenditures 439,684 289,679 27,427 9,859
Excess (deficiency) of revenues
over (under) expenditures (384,974) 327,182 20,663 5,590
OTHER FINANCING SOURCES (USES)
Transfers in 295,290 - - -
Transfers out - (295,290) - -
Total other financing sources (uses)295,290 (295,290) - -
Net change in fund balances (89,684) 31,892 20,663 5,590
Fund balances, beginning of year 199,553 1,320,138 259,682 51,364
FUND BALANCE, END OF YEAR 109,869$ 1,352,030$ 280,345$ 56,954$
Special Revenue Funds
Parks
Friends of the
Parks
Tree
Replacement
Court
Technology/
Security
79
-$ -$ -$ -$ -$ 43,400$
- - - - - 14,523
586,114 - - - - 586,114
- - - - - 661,479
1,264 100 10,853 3,901 30,259 62,085
587,378 100 10,853 3,901 30,259 1,367,601
- - - - - 9,859
- - - - - 27,427
- - - - - 307,678
- - 48,311 - 375,842 845,838
- - 48,311 - 375,842 1,190,802
587,378 100 (37,458) 3,901 (345,583) 176,799
- - 200,000 - 732,000 1,227,290
(732,000) (20,048) - - - (1,047,338)
(732,000) (20,048) 200,000 - 732,000 179,952
(144,622) (19,948) 162,542 3,901 386,417 356,751
265,774 19,948 221,017 652,573 1,489,244 4,479,293
121,152$ -$ 383,559$ 656,474$ 1,875,661$ 4,836,044$
Total
Nonmajor
Governmental
Funds
Capital
Reserve
Transportation
Improvement
Special Revenue Funds Capital Projects Funds
METRO
Emergency
Grant
Capital
Projects
City of West University Place, Texas
Schedule of Revenues, Expenditures, and Changes
in Fund Balance - Budget and Actual
Nonmajor Special Revenue Funds – Parks Fund
For the Fiscal Year Ended December 31, 2018
80
Variance
Positive
Original Final Actual (Negative)
REVENUES
Contributions 42,700$ 42,700$ 51,960$ 9,260$
Investment earnings900 900 2,750 1,850
Total revenues 43,600 43,600 54,710 11,110
EXPENDITURES
Current:
Public services 146,900 146,900 17,999 128,901
Capital outlay 500,000 519,918 421,685 98,233
Total expendi tures 646,900 666,818 439,684 227,134
Excess (de fi ci ency) of revenues
over expendi tures (603,300) (623,218) (384,974) 238,244
OTHER FINANCING SOURCES (USES)
Transfers i n 500,000 500,000 295,290 (204,710)
Total other financ i ng sources (uses)500,000 500,000 295,290 (204,710)
Net change in fund balance (103,300) (123,218) (89,684) 33,534
Fund balance, be ginning of year 199,553 199,553 199,553 -
FUND BALANCE, END OF YEAR 96,253$ 76,335$ 109,869$ 33,534$
Budget
City of West University Place, Texas
Schedule of Revenues, Expenditures, and Changes
in Fund Balance - Budget and Actual
Nonmajor Special Revenue Funds – Tree Replacement Fund
For the Fiscal Year Ended December 31, 2018
81
Variance
Positive
Original Final Actual (Negative)
REVENUES
Permits, licenses, and fees 40,000$ 40,000$ 43,400$ 3,400$
Investment earnings900 900 4,690 3,790
Total revenues 40,900 40,900 48,090 7,190
EXPENDITURES
Current:
Public works 33,000 33,000 27,427 5,573
Total expenditures 33,000 33,000 27,427 5,573
Net change in fund balance 7,900 7,900 20,663 12,763
Fund balance, beginning of year 259,682 259,682 259,682 -
FUND BALANCE, END OF YEAR 267,582$ 267,582$ 280,345$ 12,763$
Budget
City of West University Place, Texas
Schedule of Revenues, Expenditures, and Changes
in Fund Balance - Budget and Actual
Nonmajor Special Revenue Funds – Court Technology/Security Fund
For the Fiscal Year Ended December 31, 2018
82
Variance
Positive
Original Final Actual (Negative)
REVENUES
Fines and forfeitures 9,500$ 12,000$ 14,523$ 2,523$
Investment earnings150 150 926 776
Total revenues 9,650 12,150 15,449 3,299
EXPENDITURES
Current:
General government 15,000 17,500 9,859 7,641
Total expenditures 15,000 17,500 9,859 7,641
Net change in fund balance (5,350) (5,350) 5,590 10,940
Fund balance, beginning of year 51,364 51,364 51,364 -
FUND BALANCE, END OF YEAR 46,014$ 46,014$ 56,954$ 10,940$
Budget
City of West University Place, Texas
Schedule of Revenues, Expenditures, and Changes
in Fund Balance - Budget and Actual
Nonmajor Special Revenue Funds – METRO Fund
For the Fiscal Year Ended December 31, 2018
83
Variance
Positive
Original Final Actual (Negative)
REVENUES
Intergovernmental 568,000$ 568,000$ 586,114$ 18,114$
Investment earnings650 650 1,264 614
Total revenues 568,650 568,650 587,378 18,728
OTHER FINANCING SOURCES (USES)
Transfers out (732,000) (732,000) (732,000) -
Total other financing sources (uses)(732,000) (732,000) (732,000) -
Net change in fund balance (163,350) (163,350) (144,622) 18,728
Fund balance, be ginning of year 265,774 265,774 265,774 -
FUND BALANCE, END OF YEAR 102,424$ 102,424$ 121,152$ 18,728$
Budget
84
This Page Intentionally Left Blank
City of West University Place, Texas
Internal Service Funds
December 31, 2018
85
INTERNAL SERVICE FUNDS
Internal Service Funds are used to account for the financing of goods or services provided by one
department to other departments of the City and to other governmental units, on a cost reimbursement
basis.
The Vehicle Replacement 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.
The Equipment Replacement 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.
The Employee Benefits 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.
The Technology Management 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.
City of West University Place, Texas
Combining Statement of Net Position
Internal Service Funds
December 31, 2018
86
ASSET S
Current assets:
Cash and cash equivalents 1,266,817$ 1,182,374$
Investments 1,355,158 1,264,825
Recei vabl es, net of allowances - -
Due from ot her funds - -
Prepaids - -
Total current assets 2,621,975 2,447,199
Noncurrent assets:
Cap i tal assets:
Machi nery and equipment 3,123,994 588,388
Less: accumul ated depreciat i on (2,336,370) (78,349)
Total capi tal assets (net of accumul ated depreci at i on)787,624 510,039
Total noncurrent assets 787,624 510,039
Total assets 3,409,599 2,957,238
DEFERRED OUTFLOWS OF RESOURCES
Deferred out flows - pens ion - -
Deferred out flows - ot her postempl oyment benefits - -
Total deferred out flows of resources - -
LIABILITIES
Current liabili t i es:
Accounts payabl e and accrued li abili t ies 530 317,070
Due to ot her f unds - -
Compensated absences - -
Total current liabili t i es 530 317,070
Noncurrent liabilit i es:
Compensated absences - -
Net pensi on liabili t y - -
Ot her postemployment benefits liabili t y - -
Total noncurrent liabili t ies - -
Total liabilit i es 530 317,070
DEFERRED INFLOWS OF RESOURCES
Deferred i nflows - pens ion - -
Total deferred i nflows of resources - -
NET POSITION
Net i nvestment i n capi tal assets 787,624 510,039
Unrestri cted 2,621,445 2,130,129
TOTAL NET POSITION 3,409,069$ 2,640,168$
Vehicle
Replacement
Equipment
Replacement
87
Total
Internal
Service Funds
613,153$ 190,538$ 3,252,882$
653,237 203,824 3,477,044
- 1,606 1,606
74,906 - 74,906
231,263 137,444 368,707
1,572,559 533,412 7,175,145
- 414,873 4,127,255
- (321,156) (2,735,875)
- 93,717 1,391,380
- 93,717 1,391,380
1,572,559 627,129 8,566,525
- 75,523 75,523
- 16,948 16,948
- 92,471 92,471
36,629 40,614 394,843
- 3,709 3,709
- 27,182 27,182
36,629 71,505 425,734
- 52,270 52,270
- 216,824 216,824
- 208,516 208,516
- 477,610 477,610
36,629 549,115 903,344
- 54,645 54,645
- 54,645 54,645
- 93,717 1,391,380
1,535,930 22,123 6,309,627
1,535,930$ 115,840$ 7,701,007$
Employee
Benefits
Technology
Management
City of West University Place, Texas
Combining Statement of Revenues, Expenses,
and Changes in Net Position
Internal Service Funds
For the Fiscal Year Ended December 31, 2018
88
OPERATING REVENUES
Char ges for sales and services 694,300$ 653,500$
Other revenues - 6,417
Total operating revenues 694,300 659,917
OPERATING EXPENSES
Costs of sales and services - -
Personnel - -
Repairs and maintenance 70,467 24,501
Depreciation 180,412 47,080
Total operating expenses 250,879 71,581
Operating income 443,421 588,336
NONOPERATING REVENUES (EXPEN SES)
Intergovernmental - -
Investment earnings 41,915 35,994
Gain on sale of capital assets 875 2,100
Total nonoperating revenues (expenses)42,790 38,094
Income before contributions and transfers 486,211 626,430
CONTRIBUTIONS AND TRANSFERS
Transfers out - -
Total contributions and transfers - -
Change in net position 486,211 626,430
Net posi t i on - begi nning, as or iginally reported 2,922,858 2,013,738
Implementat i on of change i n account i ng pr inci ple (see Note 1)- -
Pri or peri od adj ustment (see Note 12)- -
Net posi t i on - begi nni ng, as restated 2,922,858 2,013,738
NET POSITION, END OF YEAR 3,409,069$ 2,640,168$
Vehicle
Replacement
Equipment
Replacement
89
T otal
I nternal
Service Funds
2,326,614$ 1,567,200$ 5,241,614$
- 739 7,156
2,326,614 1,567,939 5,248,770
2,046,605 743,190 2,789,795
- 647,185 647,185
- 21,784 116,752
- 57,271 284,763
2,046,605 1,469,430 3,838,495
280,009 98,509 1,410,275
- 33,731 33,731
17,850 5,757 101,516
- - 2,975
17,850 39,488 138,222
297,859 137,997 1,548,497
(29,700) - (29,700)
(29,700) - (29,700)
268,159 137,997 1,518,797
1,267,771 14,796 6,219,163
- (151,501) (151,501)
- 114,548 114,548
1,267,771 (22,157) 6,182,210
1,535,930$ 115,840$ 7,701,007$
Employee
Benefits
Technology
Management
City of West University Place, Texas
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended December 31, 2018
90
CASH FLOWS FROM OPERATING ACTIVITIES
Cash rece ived from customers and users -$ 6,417$
Cash received from interfund charges for services 694,300 656,068
Cash payments to suppliers (75,214) (94,936)
Cash payments to employees - -
Net cash prov ided by operat i ng act iv i t ies 619,086 567,549
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers to other funds - -
Intergovernmental - -
Net cash used for noncapital financ ing act i v i t ies - -
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Acquisition and construction of capital assets (297,139) (63,074)
Proceeds from sale of capi tal assets 875 2,100
Net cash used for capital and related financing activities (296,264) (60,974)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments, net (413,371) (470,156)
Interest on investments 41,915 35,994
Net cash prov ided by invest i ng act iv it ies (371,456) (434,162)
Net increase (decrease) in cash and cash equivalents (48,634) 72,413
Cash and cash equi valents, beginning balance 1,315,451 1,109,961
CASH AND CASH EQUIVALENTS, ENDING BALANCE 1,266,817$ 1,182,374$
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Operating income 443,421$ 588,336$
Adj ustments to reconcile operati ng income to cash
prov ided by operat i ng act iv i t ies:
Depreciation and amortization 180,412 47,080
Changes i n assets, l i abil it ies and related de ferrals:
(Increase) decrease in assets and deferred outflows:
Receivables, net of allowances - 2,568
Due from other funds - -
Prepaids - -
Deferred out flows - pension - -
Deferred out flows - other postemployment bene fits - -
Increase (decrease) in liabilities and deferred inflows:
Accounts payable and accrued l iabi li t ies (4,747) (70,435)
Due to other funds - -
Unearned Revenue - -
Compensated absences - -
Net pension liability - -
Other postemployment bene fits liabi li t y - -
Deferred i nflows - pensi on - -
NET CASH PROVIDED BY OPERATING ACTIVITIES 619,086$ 567,549$
Vehicle
Replacement
Equipment
Replacement
91
Total
Internal
Service Funds
-$ 739$ 7,156$
2,251,730 1,565,594 5,167,692
(2,038,935) (937,006) (3,146,091)
- (574,607) (574,607)
212,795 54,720 1,454,150
(29,700) - (29,700)
- 33,731 33,731
(29,700) 33,731 4,031
- (36,440) (396,653)
- - 2,975
- (36,440) (393,678)
(209,744) (63,387) (1,156,658)
17,850 5,757 101,516
(191,894) (57,630) (1,055,142)
(8,799) (5,619) 9,361
621,952 196,157 3,243,521
613,153$ 190,538$ 3,252,882$
280,009$ 98,509$ 1,410,275$
- 57,271 284,763
22 30,519 33,109
(74,906) - (74,906)
(7,657) (123,862) (131,519)
- 69,332 69,332
- (7,986) (7,986)
15,327 (51,879) (111,734)
- 3,709 3,709
- (32,125) (32,125)
- 13,967 13,967
- (65,595) (65,595)
- 13,150 13,150
- 49,710 49,710
212,795$ 54,720$ 1,454,150$
Employee
Benefits
Technology
Management
92
This Page Intentionally Left Blank
93
Statistical Section
94
This Page Intentionally Left Blank
95
Statistical Section
(Unaudited)
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.
Page
Financial Trends – Schedules 1-5 96
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 – Schedules 6-10 108
These schedules contain information to help the reader assess the City’s most significant
local revenue source, property tax.
Debt Capacity – Schedules 10-15 118
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 – Schedules 16-17 128
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the City’s financial activities take place.
Operating Information – Schedules 18-20 131
These schedules contain service and infrastructure data to help the reader understand
how the information in the City’s financial report relates to the services the City provides
and the activities it performs.
City of West University Place, Texas
Net Position by Component
Last Ten Fiscal Years
96
2018 2017* 2016 2015*
GOVERNMENTAL ACTIVITIES
Net investment in capital assets 54,149,042$ 48,398,572$ 42,663,233$ 41,205,468$
Restricted 2,869,031 3,030,359 2,543,238 2,246,833
Unrestricted 9,048,261 6,074,327 7,093,032 6,835,390
TOTAL GOVERNMENTAL ACTIVITIES NET POSITION 66,066,334$ 57,503,258$ 52,299,503$ 50,287,691$
BUSINESS-TYPE ACTIVITIES
Net investment in capital assets 18,646,517$ 20,050,471$ 21,128,592$ 19,314,692$
Restricted - - - 725,000
Unrestricted 3,262,797 2,049,800 2,207,920 810,299
TOTAL BUSINESS-TYPE ACTIVITIES NET POSITION 21,909,314$ 22,100,271$ 23,336,512$ 20,849,991$
PRIMARY GOVERNMENT
Net investment in capital assets 72,795,559$ 68,449,043$ 63,791,825$ 60,520,160$
Restricted 2,869,031 3,030,359 2,543,238 2,971,833
Unrestricted 12,311,058 8,124,127 9,300,952 7,645,689
TOTAL PRIMARY GOVERNMENT NET POSITION 87,975,648$ 79,603,529$ 75,636,015$ 71,137,682$
*Restated balances
Schedule 1
97
2014* 2013 2012* 2011* 2010 2009
38,347,094$ 34,881,486$ 31,464,253$ 30,510,547$ 25,112,652$ 32,145,988$
1,580,648 2,197,619 2,260,764 1,315,036 1,977,589 2,466,227
4,384,210 2,782,110 1,987,281 872,283 5,341,671 1,262,360
44,311,952$ 39,861,215$ 35,712,298$ 32,697,866$ 32,431,912$ 35,874,575$
20,173,279$ 20,285,944$ 21,320,705$ 21,612,826$ 22,196,178$ 17,662,268$
695,000 675,000 645,000 720,000 785,000 745,000
3,029,424 4,634,652 3,965,913 4,000,276 2,343,524 1,841,953
23,897,703$ 25,595,596$ 25,931,618$ 26,333,102$ 25,324,702$ 20,249,221$
58,520,373$ 55,167,430$ 52,784,958$ 52,123,373$ 47,308,830$ 49,808,256$
2,275,648 2,872,619 2,905,764 2,035,036 2,762,589 3,211,227
7,413,634 7,416,762 5,953,194 4,872,559 7,685,195 3,104,313
68,209,655$ 65,456,811$ 61,643,916$ 59,030,968$ 57,756,614$ 56,123,796$
City of West University Place, Texas
Changes in Net Position
Last Ten Fiscal Years
98
2018 2017 2016 2015
EXPENSES
Governmental activities:
General government 3,805,870$ 3,880,070$ 3,871,442$ 3,948,145$
Public safety 8,172,672 8,090,377 7,563,086 6,773,509
Public works 4,628,774 4,872,132 4,603,321 4,009,850
Public services 4,616,244 4,527,049 4,518,987 4,560,152
Interest and fiscal agent fees on long-term debt 1,354,716 1,496,068 1,767,154 1,765,809
Total governmental activities expenses 22,578,276 22,865,696 22,323,990 21,057,465
Business-type activities:
Water and sewer 5,966,645 6,125,682 6,582,306 8,150,632
Solid waste 1,322,894 1,392,583 1,277,986 1,221,960
Total business-type activities expenses 7,289,539 7,518,265 7,860,292 9,372,592
TOTAL EXPENSES 29,867,815$ 30,383,961$ 30,184,282$ 30,430,057$
PROGRAM REVENUES
Governmental activities:
Charges for services:
Public safety 1,402,809$ 174,386$ 142,624$ 198,840$
Public works 913,079 588,353 555,453 665,089
Public services 1,918,415 2,959,471 2,638,584 2,607,192
Operating grants and contributions 1,647,584 1,278,517 546,599 558,668
Capital grants and contributions - 1,600,000 579,630 554,244
Total governmental activities program revenues 5,881,887 6,600,727 4,462,890 4,584,033
Business-type activities:
Charges for services:
Water and sewer 7,900,773 7,544,895 7,172,469 6,986,297
Solid waste 1,750,775 1,782,041 1,821,191 1,411,699
Operating grants and contributions 74,545 - - -
Capital grants and contributions - 67,892 - -
Total business-type activities program revenues 9,726,093 9,394,828 8,993,660 8,397,996
TOTAL PROGRAM REVENUES 15,607,980$ 15,995,555$ 13,456,550$ 12,982,029$
NET (EXPENSE)/REVENUE
Governmental activities (16,696,389)$ (16,264,969)$ (17,861,100)$ (16,473,432)$
Business-type activities 2,436,554 1,876,563 1,133,368 (974,596)
TOTAL NET EXPENSE (14,259,835)$ (14,388,406)$ (16,727,732)$ (17,448,028)$
Schedule 2
Page 1 of 2
99
2014 2013 2012 2011 2010 2009
3,811,192$ 3,049,656$ 3,208,930$ 2,785,502$ 3,150,380$ 2,841,391$
6,176,586 6,515,194 6,211,784 5,870,061 6,287,887 6,217,723
3,693,099 3,944,561 4,240,301 5,176,660 4,549,951 4,046,079
4,741,209 4,433,865 4,158,008 3,858,501 2,734,441 4,421,189
1,986,301 2,178,324 2,633,700 3,351,762 3,453,311 2,860,685
20,408,387 20,121,600 20,452,723 21,042,486 20,175,970 20,387,067
6,918,092 6,092,231 6,409,131 6,927,509 5,415,974 5,686,180
1,225,806 1,376,583 1,427,997 1,322,082 1,111,560 1,161,724
8,143,898 7,468,814 7,837,128 8,249,591 6,527,534 6,847,904
28,552,285$ 27,590,414$ 28,289,851$ 29,292,077$ 26,703,504$ 27,234,971$
187,347$ 1,009,760$ 818,182$ 743,486$ 734,150$ 525,650$
711,155 - - - - -
2,448,489 2,264,753 2,160,728 1,785,518 1,656,098 4,237,581
145,819 259,000 300,048 259,000 263,780 360,310
647,940 454,115 604,758 360,741 369,316 134,821
4,140,750 3,987,628 3,883,716 3,148,745 3,023,344 5,258,362
-
6,868,133 7,623,233 7,777,386 8,986,444 5,917,931 6,151,138
1,513,870 1,443,125 1,512,079 1,787,636 1,486,413 1,096,652
- - - - - -
- - - - - -
8,382,003 9,066,358 9,289,465 10,774,080 7,404,344 7,247,790
12,522,753$ 13,053,986$ 13,173,181$ 13,922,825$ 10,427,688$ 12,506,152$
(16,267,637)$ (16,133,972)$ (16,569,007)$ (17,893,741)$ (17,152,626)$ (15,128,705)$
238,105 1,597,544 1,452,337 2,524,489 876,810 399,886
(16,029,532)$ (14,536,428)$ (15,116,670)$ (15,369,252)$ (16,275,816)$ (14,728,819)$
City of West University Place, Texas
Changes in Net Position - Continued
Last Ten Fiscal Years
100
2018 2017 2016 2015
GENERAL REVENUES AND OTHER CHANGES IN NET POSITION
Governmental activities:
Taxes:
Ad valorem taxes, levied for general purposes 11,692,751$ 10,907,681$ 9,994,947$ 9,360,277$
Ad valorem taxes, levied for debt service 7,611,305 7,707,172 8,111,959 8,144,274
Sales taxes 1,172,256 1,064,672 1,051,361 1,117,336
Franchise and local taxes 1,128,060 1,159,730 1,144,256 1,204,795
Other taxes 13,528 14,330 15,955 17,625
Contributions - - - -
Investment earnings 432,447 122,556 116,798 89,970
Other revenues 528,572 455,033 735,113 398,199
Gain on sale of capital assets - - 40,279 24,076
Loss on sale of asset held for resale - - - -
Transfers 2,680,546 2,798,454 (1,337,756) 1,943,800
Total governmental activities 25,259,465 24,229,628 19,872,912 22,300,352
Business-type activities:
Investment earnings 40,370 17,706 15,397 15,515
Other revenues 12,665 - - -
Gain on disposal of capital assets - - - 3,988
Transfers (2,680,546) (2,798,454) 1,337,756 (1,943,800)
Total business-type activities (2,627,511) (2,780,748) 1,353,153 (1,924,297)
TOTAL PRIMARY GOVERNMENT 22,631,954$ 21,448,880$ 21,226,065$ 20,376,055$
CHANGE IN NET POSITION
Governmental activities 8,563,076$ 7,964,659$ 2,011,812$ 5,826,920$
Business-type activities (190,957) (904,185) 2,486,521 (2,898,893)
TOTAL NET EXPENSE 8,372,119$ 7,060,474$ 4,498,333$ 2,928,027$
Schedule 2
Page 2 of 2
101
2014 2013 2012 2011 2010 2009
8,605,582$ 8,087,360$ 7,527,047$ 7,962,210$ 8,004,202$ 7,319,407$
7,791,467 7,733,658 7,713,377 7,360,224 7,098,065 6,756,375
1,051,890 957,658 1,003,897 997,318 1,050,079 946,726
1,214,227 1,170,448 1,142,265 1,148,390 1,207,429 1,162,420
15,713 11,546 9,685 8,994 11,144 12,485
- - - - - 306,410
60,784 35,087 27,270 33,333 73,035 210,481
503,889 320,123 286,619 347,242 424,381 446,112
21,354 23,909 427 10,686 32,466 -
- - (68,150) - - -
1,740,504 1,943,100 1,861,848 1,517,223 (4,190,838) 1,040,000
21,005,410 20,282,889 19,504,285 19,385,620 13,709,963 18,200,416
17,823 9,534 8,027 8,369 7,833 20,715
- - - - - -
- - - - - -
(1,740,504) (1,943,100) (1,861,848) (1,517,223) 4,190,838 (1,040,000)
(1,722,681) (1,933,566) (1,853,821) (1,508,854) 4,198,671 (1,019,285)
19,282,729$ 18,349,323$ 17,650,464$ 17,876,766$ 17,908,634$ 17,181,131$
4,737,773$ 4,148,917$ 2,935,278$ 1,491,879$ (3,442,663)$ 3,071,711$
(1,484,576) (336,022) (401,484) 1,015,635 5,075,481 (619,399)
3,253,197$ 3,812,895$ 2,533,794$ 2,507,514$ 1,632,818$ 2,452,312$
City of West University Place, Texas
Tax Revenues by Source, Governmental Activities
Last Ten Fiscal Years
102
Change
Function 2017-2018 2018 2017 2016 2015
Property 3.7% 19,304,056$ 18,614,853$ 18,106,906$ 17,504,551$
Sales 10.1% 1,172,256 1,064,672 1,051,361 1,117,336
Franchise -2.7% 1,128,060 1,159,730 1,144,256 1,204,795
Other taxes -5.6% 13,528 14,330 15,955 17,625
TOTAL 3.7% 21,617,900$ 20,853,585$ 20,318,478$ 19,844,307$
Schedule 3
103
2014 2013 2012 2011 2010 2009
16,397,049$ 15,821,018$ 15,240,424$ 15,322,434$ 15,102,267$ 13,462,911$
1,051,890 957,658 1,003,897 997,318 1,050,079 11,553,199
1,214,227 1,170,448 1,142,265 1,148,390 1,207,429 1,659,737
15,713 11,546 9,685 8,994 11,144 2,400
18,678,879$ 17,960,670$ 17,396,271$ 17,477,136$ 17,370,919$ 26,678,247$
City of West University Place, Texas
Fund Balances, Governmental Funds (1)
Last Ten Fiscal Years
104
2018 2017 2016 2015
GENERAL FUND
Reserved -$ -$ -$ -$
Unreserved - - - -
Nonspendable 189,376 184,871 180,188 171,887
Restricted 303,424 273,462 239,760 202,862
Assigned 118,377 119,000 210,000 210,000
Unassigned 7,622,781 5,642,997 5,307,930 6,539,935
TOTAL GENERAL FUND 8,233,958$ 6,220,330$ 5,937,878$ 7,124,684$
ALL OTHER GOVERNMENTAL FUNDS
Reserved -$ -$ -$ -$
Unreserved, reported in:
Capital projects funds - - - -
Special revenue funds - - - -
Nonspendable - - 1,600 2,372
Restricted 2,788,641 2,756,897 2,303,478 2,086,904
Assigned 2,915,694 2,622,516 1,879,507 1,241,519
Unassigned - - - -
TOTAL ALL OTHER GOVERNMENTAL FUNDS 5,704,335$ 5,379,413$ 4,184,585$ 3,330,795$
*Restated balances
(1) GASB Statement No. 54 requirement for statistical data is ten years with retroactive implementation encouraged; only eight fiscal years
are available at this time. The City chose not to restate 2009 to 2010.
Schedule 4
105
2014 2013 2012* 2011 2010 2009
-$ -$ -$ -$ 561,038$ 444,508$
- - - - 3,107,736 2,736,833
170,933 157,515 134,564 130,265 - -
163,999 127,437 95,322 410,238 - -
210,000 210,000 210,000 - - -
5,351,558 4,181,880 3,823,951 3,538,757 - -
5,896,490$ 4,676,832$ 4,263,837$ 4,079,260$ 3,668,774$ 3,181,341$
-$ -$ -$ -$ 1,639,115$ 1,388,198$
- - - - 4,128,598 1,035,760
- - - - (20,470) 240,926
2,372 2,372 2,372 2,372 - -
1,416,649 2,070,182 2,244,596 1,890,177 - -
900,045 1,215,634 734,460 528,575 - -
- (19,982) (20,161) (20,343) - -
2,319,066$ 3,268,206$ 2,961,267$ 2,400,781$ 5,747,243$ 2,664,884$
City of West University Place, Texas
Changes In Fund Balances
Governmental Funds
Last Ten Fiscal Years
106
2018 2017 2016 2015
REVENUES
Taxes 21,554,808$ 20,832,729$ 20,263,796$ 19,797,518$
Permits, licenses, and fees 712,094 588,353 555,453 665,089
Fines and forfeitures 232,698 174,386 142,624 198,840
Charges for services 3,038,733 2,959,471 2,638,584 2,607,192
Intergovernmental 871,088 532,336 546,599 558,668
Contributions 661,479 746,181 579,630 554,244
Investment earnings 330,931 80,160 101,841 81,707
Other revenue 525,597 441,874 735,113 398,199
Total revenues 27,927,428 26,355,490 25,563,640 24,861,457
EXPENDITURES
General government 3,333,498 3,500,020 3,458,898 3,495,513
Public safety 8,155,677 8,072,917 7,626,200 7,012,054
Public works 3,019,779 3,224,684 3,023,532 2,473,106
Public services 4,000,979 3,870,475 4,231,959 3,237,909
Capital outlay 949,158 100,259 332,992 236,947
Debt service:-
Principal 7,770,000 7,485,000 7,370,000 6,420,000
Interest 1,070,033 1,426,468 1,544,984 1,690,655
Bond issuance costs - 82,050 43,923 -
Payment to refunded bond escrow agent - - 71,785 -
Advance refunding escrow - - 30,903 -
Total expenditures 28,299,124 27,761,873 27,735,176 24,566,184
Excess (deficiency) of revenues
over (under) expenditures (371,696) (1,406,383) (2,171,536) 295,273
OTHER FINANCING SOURCES (USES)
Transfers in 3,957,584 3,998,454 3,033,063 2,539,463
Transfers out (1,247,338) (1,200,000) (4,370,819) (595,663)
Issuance of debt - 9,965,000 3,170,000 -
Premium on debt issued - - - -
Payment to refunded bond escrow agent - (9,881,593) - -
Sale of capital assets - 1,802 6,276 850
Total other financing sources 2,710,246 2,883,663 1,838,520 1,944,650
NET CHANGE IN FUND BALANCE 2,338,550$ 1,477,280$ (333,016)$ 2,239,923$
DEBT SERVICE AS A PERCENTAGE OF
NONCAPITAL EXPENDITURES 32.33% 34.56% 33.02% 33.16%
*Restated balances
Schedule 5
107
2014 2013 2012* 2011 2010 2009
18,668,734$ 17,934,252$ 17,380,393$ 17,469,999$ 17,362,337$ 16,197,413$
711,155 796,562 609,037 467,123 461,419 351,120
187,347 213,198 209,145 276,363 272,731 174,530
2,448,489 2,264,753 2,160,728 1,785,518 1,656,098 1,186,941
145,819 259,000 300,048 259,000 263,780 495,131
647,940 454,115 604,758 360,741 369,316 306,410
55,079 31,760 25,035 31,575 71,447 205,371
503,889 320,123 218,469 347,242 394,071 430,180
23,368,452 22,273,763 21,507,613 20,997,561 20,851,199 19,347,096
3,298,890 2,582,560 2,427,755 2,678,292 2,919,174 2,638,596
6,271,557 6,617,056 5,615,673 5,492,793 5,956,779 6,091,415
2,262,843 2,596,798 2,628,156 2,504,438 2,586,314 2,167,936
3,219,455 3,043,191 2,402,878 2,336,591 2,127,336 3,803,862
1,886,749 209,284 214,662 4,244,191 10,645,694 13,290,611
6,190,000 5,605,000 5,305,000 4,671,167 3,903,250 3,969,515
1,906,944 2,320,806 3,015,941 3,437,756 3,214,201 2,848,046
- 217,067 - 141,802 419,931 226,636
- - - - - -
- 350,000 100,000 - - -
25,036,438 23,541,762 21,710,065 25,507,030 31,772,679 35,036,617
(1,667,986) (1,267,999) (202,452) (4,509,469) (10,921,480) (15,689,521)
2,964,128 2,789,897 2,127,938 3,090,405 2,017,451 4,065,742
(1,025,624) (1,010,591) (1,419,885) (2,542,851) (1,350,702) (3,075,742)
- 16,360,000 8,555,000 5,700,000 24,630,000 13,035,000
- - 282,219 191,134 859,692 283,639
- (16,151,373) (8,676,911) (4,868,423) (11,546,886) (3,022,444)
- - - 3,228 32,466 -
1,938,504 1,987,933 868,361 1,573,493 14,642,021 11,286,195
270,518$ 719,934$ 665,909$ (2,935,976)$ 3,720,541$ (4,403,326)$
34.88% 33.97% 38.71% 38.14% 33.69% 33.60%
City of West University Place, Texas
Tax Revenues by Source
Governmental Activities
Last Ten Fiscal Years
108
Change
Function 2017-2018 2018 2017 2016 2015
Ad valorem 3.5% 19,240,964$ 18,593,997$ 18,052,224$ 17,457,762$
Sales 10.1% 1,172,256 1,064,672 1,051,361 1,117,336
Franchise -2.7% 1,128,060 1,159,730 1,144,256 1,204,795
Other taxes -5.6% 13,528 14,330 15,955 17,625
TOTAL 3.5% 21,554,808$ 20,832,729$ 20,263,796$ 19,797,518$
Schedule 6
109
2014 2013 2012 2011 2010 2009
16,386,904$ 15,794,600$ 15,224,546$ 15,315,297$ 15,093,685$ 14,067,200$
1,051,890 957,658 1,003,897 997,318 1,050,079 946,726
1,214,227 1,170,448 1,142,265 1,148,390 1,207,429 1,162,420
15,713 11,546 9,685 8,994 11,144 12,485
18,668,734$ 17,934,252$ 17,380,393$ 17,469,999$ 17,362,337$ 16,188,831$
City of West University Place, Texas
Assessed Value and Actual Value
Of Taxable Property
Last Ten Fiscal Years (2)
110
2018 2017 2016 2015
Residential property 6,181,792,257$ 5,880,687,603$ 5,578,375,329$ 4,943,195,212$
Commercial property 315,402,455 305,286,953 314,619,442 259,878,387
Less: Tax exempt property (455,549,934) (434,734,202) (449,141,214) (386,360,932)
TOTAL TAXABLE ASSESSED VALUE (1)6,041,644,778$ 5,751,240,354$ 5,443,853,557$ 4,816,712,667$
TOTAL DIRECT TAX RATE 0.31680 0.31680 0.33179 0.36179
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 $100 of assessed v alue.
(2) Tax information was adjusted during fiscal year 2014 to reflect tax year assessed valuations.
Schedule 7
111
2014 2013 2012 2011 2010 2009
4,497,103,352$ 4,335,656,103$ 4,106,994,971$ 4,173,451,521$ 4,287,201,794$ 3,835,791,345$
219,273,264 205,183,728 278,070,080 203,444,929 125,992,897 129,077,944
(340,252,719) (323,044,475) (325,525,373) (296,685,633) (158,978,494) (216,954,373)
4,376,123,897$ 4,217,795,356$ 4,059,539,678$ 4,080,210,817$ 4,254,216,197$ 3,747,914,916$
0.37400 0.37411 0.37411 0.37411 0.35875 0.35900
City of West University Place, Texas
Property Tax Rates
Direct and Overlapping Governments
Last Ten Fiscal Years (2)
112
2018 2017 2016 2015
City of West University Place by fund:
Direct rates:
General 0.19214$ 0.18557$ 0.18321$ 0.19356$
Debt service 0.12466 0.13123 0.14858 0.16823
Total direct rates 0.31680 0.31680 0.33179 0.36179
Overlapping rates:
Houston Independent School District 1.20670 1.20670 1.19670 1.19670
Harris County 0.41801 0.41656 0.41923 0.41731
Harris County Flood Control District 0.02831 0.02829 0.02733 0.02736
Port of Houston Authority 0.01256 0.01334 0.01342 0.01531
Harris County Hospital District 0.17110 0.17179 0.17000 0.17000
Harris County Department of Education 0.00520 0.00520 0.00542 0.00600
Houston Community College 0.10026 0.10026 0.10194 0.10689
TOTAL DIRECT AND OVERLAPPING RATES (1)2.25894$ 2.25894$ 2.26583$ 2.30136$
Tax rates per $100 of assessed valuation
Source: Harris County Appraisal District
(1) Overlapping rates are those of local and county governments that apply within the City of West University Place.
(2) Tax information was adjusted during fiscal year 2014 to reflect tax year assessed valuations.
Schedule 8
113
2014 2013 2012 2011 2010 2009
0.19631$ 0.19125$ 0.18475$ 0.19443$ 0.18893$ 0.18600$
0.17769 0.18286 0.18936 0.17968 0.16982 0.17300
0.37400 0.37411 0.37411 0.37411 0.35875 0.35900
1.18670 1.15670 1.15670 1.15670 1.15670 1.15670
0.41455 0.40021 0.39117 0.38805 0.39224 0.38923
0.02827 0.02809 0.02809 0.29230 0.02922 0.03086
0.01716 0.01952 0.01856 0.02054 0.01636 0.01773
0.17000 0.18216 0.19216 0.19216 0.19216 0.19216
0.00636 0.00662 0.00658 0.00658 0.00605 0.00584
0.09717 0.09717 0.09722 0.09222 0.09222 0.09243
2.29421$ 2.26458$ 2.26459$ 2.52266$ 2.24370$ 2.24395$
114
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City of West University Place, Texas Schedule 9
Principal Property Taxpayers
Current Year and Nine Years Ago
115
Taxable Percentage Taxable Percentage
Assessed of Taxable Assessed of Taxable
Property Taxpayer Value Rank Assessed Value Value Rank Assessed Value
U West Marketplace Association 11,719,254$ 1 0.19% 6,863,727$ 2 0.18%
Southwestern Bell 9,860,343 2 0.16% - n/a 0.00%
Retail Fund I Houston Rice 8,291,321 3 0.14% - n/a 0.00%
Webster Properties LP 6,171,187 4 0.10% - n/a 0.00%
CenterPoint Energy Inc. 6,152,910 5 0.10% 5,253,500 4 0.14%
University Shops Houston LP 5,986,838 6 0.10% 0.00%
DKGA / WUC LP 5,564,600 7 0.09% 0.00%
Sanders Don A 5,365,716 8 0.09% 0.00%
Craig A and Patricia Biggio 5,168,000 9 0.09% - n/a 0.00%
Donnell James M & Donna P 5,166,583 10 0.09% - n/a 0.00%
AT&T Corp. - n/a 0.00% 13,287,882 1 0.35%
5650 Kirby Partnership - n/a 0.00% 5,311,318 3 0.14%
Bardwell Building Co. - n/a 0.00% 4,828,574 5 0.13%
Kenneth and Kimberly Alo - n/a 0.00% 3,878,050 6 0.10%
Haghpeyker Family, LP - n/a 0.00% 3,819,360 7 0.10%
Beltika Llc - n/a 0.00% 3,781,258 8 0.10%
Jimmy Williamson - n/a 0.00% 3,704,250 9 0.10%
Gautam Gohel - n/a 0.00% 3,624,000 10 0.10%
Subtotal 69,446,752 1.15% 54,351,919 1.45%
Other taxpayers 5,972,198,026 98.85% 3,693,562,997 98.55%
TOTAL 6,041,644,778$ 100.00% 3,747,914,916$ 100.00%
Source: Harris County Tax Assessor-Collector's records.
20092018
City of West University Place, Texas
Property Tax Levies and Collections
Last Ten Fiscal Years
116
2018 2017 2016 2015
Tax levy 19,245,565$ 18,580,835$ 18,062,162$ 17,426,385$
Current tax collected 19,136,864 18,493,310 17,969,764 17,335,980
Percentage of current tax collections 99.44% 99.53% 99.49% 99.48%
Delinquent tax collections - 19,274 43,903 53,606
TOTAL TAX COLLECTIONS 19,136,864$ 18,512,584$ 18,013,667$ 17,389,586$
TOTAL COLLECTIONS AS A PERCENTAGE
OF CURRENT LEVY 99.44% 99.63% 99.73% 99.79%
Outstanding delinquent taxes 108,701$ 58,148$ 49,145$ 37,571$
OUTSTANDING DELINQUENT TAXES AS A
PERCENTAGE OF A LEVY 0.56% 0.31% 0.27% 0.22%
Schedule 10
117
2014 2013 2012 2011 2010 2009
16,365,976$ 15,778,014$ 15,193,428$ 15,265,103$ 15,031,309$ 13,951,979$
16,287,801 15,705,681 15,123,562 15,197,463 14,977,921 13,895,039
99.52% 99.54% 99.54% 99.56% 99.64% 99.59%
51,588 44,828 42,603 45,418 32,309 39,387
16,339,389$ 15,750,509$ 15,166,165$ 15,242,881$ 15,010,230$ 13,934,426$
99.84% 99.83% 99.82% 99.85% 99.86% 99.87%
27,218$ 27,505$ 27,263$ 22,221$ 21,079$ 17,550$
0.17% 0.17% 0.18% 0.15% 0.14% 0.13%
City of West University Place, Texas
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
118
2018 2017 2016 2015
GOVERNMENTAL ACTIVITIES
General obligation bonds 32,972,156$ 40,581,448$ 43,401,666$ 46,904,963$
Certificates of obligation 5,843,325 6,122,480 10,292,415 11,113,193
Capital leases - - - -
Subtotal 38,815,481 46,703,928 53,694,081 58,018,156
BUSINESS-TYPE ACTIVITIES
Revenue bonds - - - 3,094,933
TOTAL PRIMARY GOVERNMENT 38,815,481$ 46,703,928$ 53,694,081$ 61,113,089$
Personal income (1)- - - -
DEBT AS A PERCENTAGE OF PERSONAL INCOME (1)0% 0% 0% 0%
Population 15,477 15,433 15,516 15,604
DEBT PER CAPITA 2,508$ 3,026$ 3,461$ 3,917$
(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.
Schedule 11
119
2014 2013 2012 2011 2010 2009
52,775,550$ 58,445,351$ 62,271,173$ 57,530,495$ 61,763,373$ 54,795,999$
11,898,971 12,654,747 13,154,781 22,218,433 21,643,463 13,140,776
- - - - 102,131 200,381
64,674,521 71,100,098 75,425,954 79,748,928 83,508,967 68,137,156
3,790,755 4,466,577 5,112,399 5,751,365 6,526,466 12,421,640
68,465,276$ 75,566,675$ 80,538,353$ 85,500,293$ 90,035,433$ 80,558,796$
- - - - - -
0% 0% 0% 0% 0% 0%
15,369 15,221 15,109 14,787 14,787 14,211
4,455$ 4,965$ 5,330$ 5,782$ 6,089$ 5,669$
City of West University Place, Texas
Ratios of Net Bonded Debt to Assessed Value,
Net Bonded Debt Per Capita, and Assessed
and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
120
2018 2017 2016 2015
NET TAXABLE ASSESSED VALUE
All property 6,041,644,778$ 5,751,240,354$ 5,443,853,557$ 4,816,712,667$
NET BONDED DEBT
Gross bonded debt 38,815,481$ 46,703,928$ 53,694,081$ 58,018,156$
Less: debt service funds (868,291) (900,120) (912,718) (566,276)
NET BONDED DEBT 37,947,190$ 45,803,808$ 52,781,363$ 57,451,880$
RATIO OF THE NET BONDED DEBT TO ASSESSED VALUE 0.63% 0.80% 0.97% 1.19%
Population 15,477 15,433 15,516 15,604
NET BONDED DEBT PER CAPITA 2,452$ 2,968$ 3,402$ 3,682$
(1) The City's Home Rule Charter (1983), Section 7.07 limits all bonded debt to no more than five percent of the assessed valua tion.
Schedule 12
121
2014 2013 2012 2011 2010 2009
4,376,123,897$ 4,217,795,356$ 4,059,539,678$ 4,059,539,678$ 4,254,216,197$ 3,747,914,916$
64,674,521$ 71,100,098$ 75,425,954$ 79,748,928$ 83,406,836$ 67,936,775$
(167,039) (95,668) (276,963) (446,094) (992,033) (954,687)
64,507,482$ 71,004,430$ 75,148,991$ 79,302,834$ 82,414,803$ 66,982,088$
1.47% 1.68% 1.85% 1.95% 1.94% 1.79%
15,369 15,221 15,109 14,787 14,787 14,211
4,197$ 4,665$ 4,974$ 5,363$ 5,573$ 4,713$
122
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City of West University Place, Texas Schedule 13
Direct and Overlapping Governmental Activities Debt
December 31, 2018
123
Estimated
Net Bonded Estimated Share of
Debt Percentage Overlapping
Outstanding Applicable (1)Debt
DEBT REPAID WITH PROPERTY TSAXES
Governmental Unit:
Harris County 2,050,758,022$ 1.27% 26,044,627$
Harris County Dept of Education 6,320,000 1.27% 80,264
Harris County Flood Control District 83,075,000 1.27% 1,055,053
Harris County Hospital District 57,300,000 1.27% 727,710
Houston Community College 560,480,000 2.99% 16,758,352
Houston ISD 3,018,890,000 3.35% 101,132,815
Port of Houston Authority 593,754,397 1.27% 7,540,681
Subtotal, overlapping debt 6,370,577,419$ 153,339,502$
CITY DIRECT DEBT 38,370,000$ 100.00% 38,370,000
TOTAL DIRECT AND OVERLAPPING DEBT 191,709,502$
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.
City of West University Place, Texas
Legal Debt Margin Information
Last Ten Fiscal Years
124
2018 2017 2016 2015
Debt limit 302,082,239$ 287,562,018$ 272,192,678$ 240,835,633$
Total net debt applicable to limit 37,947,190 45,803,808 52,781,363 57,451,880
LEGAL DEBT MARGIN 264,135,049$ 241,758,210$ 219,411,315$ 183,383,753$
Total net debt applicable to the limit
as a percentage of debt limit 12.56% 15.93% 19.39% 23.86%
LEGAL DEBT MARGIN CALCULATION FOR FISCAL YEAR 2018
Assessed value 6,041,644,778$
Debt limit (5% of assessed value) (1)302,082,239
Debt applicable to limit:
General obligation bonds 38,815,481
Less: amount set aside for repayment
of general obligation debt (868,291)
Total net debt applicable to limit 37,947,190
LEGAL DEBT MARGIN 264,135,049$
(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.
Schedule 14
125
2014 2013 2012 2011 2010 2009
218,806,195$ 210,889,768$ 210,889,768$ 202,976,984$ 204,010,541$ 212,710,810$
64,507,482 71,004,430 73,605,191 56,568,906 60,212,967 60,212,967
154,298,713$ 139,885,338$ 137,284,577$ 146,408,078$ 143,797,574$ 152,497,843$
29.48% 33.67% 34.90% 27.87% 29.51% 28.31%
City of West University Place, Texas
Pledged Revenue Coverage
Last Ten Fiscal Years
126
2018 2017 2016 2015
GROSS REVENUES (1)7,900,773$ 7,544,895$ 7,172,469$ 6,986,297$
OPERATING EXPENSES (2)4,354,881 4,259,755 4,642,322 6,085,370
NET REVENUES AVAILABLE FOR DEBT SERVICE 3,545,892$ 3,285,140$ 2,530,147$ 900,927$
DEBT SERVICE REQUIREMENTS (3)
Principal -$ -$ -$ 695,000$
Interest - - - 144,351
TOTAL -$ -$ -$ 839,351$
COVERAGE N/A N/A N/A 1.07
(1) Total revenues including interest, excluding tap fees
(2) Total operating expenses less depreciation
(3) Includes revenue bonds only
Schedule 15
127
2014 2013 2012 2011 2010 2009
6,868,133$ 7,623,233$ 7,777,386$ 8,986,455$ 5,917,931$ 6,151,138$
4,580,425 3,962,028 4,293,010 4,802,445 5,003,479 5,141,913
2,287,708$ 3,661,205$ 3,484,376$ 4,184,010$ 914,452$ 1,009,225$
675,000$ 645,000$ 720,000$ 785,000$ 745,000$ 715,000$
172,185 198,585 225,323 255,154 523,446 551,749
847,185$ 843,585$ 945,323$ 1,040,154$ 1,268,446$ 1,266,749$
2.70 4.34 3.69 4.02 0.72 0.80
City of West University Place, Texas Schedule 16
Demographic and Economic Statistics (1)(2)(3)
Last Ten Fiscal Years
128
Fiscal Year
Ended Median School
December 31, Population
(4)Age Enrollment (5)
2018 15,477 41.10 1,274
2017 15,433 42.80 1,307
2016 15,516 42.40 1,280
2015 15,604 41.80 1,253
2014 15,369 41.40 1,280
2013 15,221 41.40 1,210
2012 15,109 41.40 1,225
2011 14,787 39.30 1,215
2010 14,787 39.30 1,165
2009 14,211 39.30 1,272
(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 public schools located within the City limits.
City of West University Place, Texas Schedule 17
Principal Employers (1)(2)
Current Year and Nine Years Ago
129
2018 2009
Employer Rank Rank
Southwestern Bell 1N/A
West University Elementary School 2 2
City of West University Place 3 3
AT&T N/A 1
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.
Fiscal Year
130
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City of West University Place, Texas Schedule 18
Full-Time Equivalent City Government Employees by Function
Last Ten Fiscal Years
131
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
GENERAL FUND
Administration 6 5 6 6 6 5 5 5 5 5
Finance 5 5 5 5 5 6 6 6 7 7
Police Department 38 38 35 35 35 35 35 32 32 32
Fire Department 23 23 23 23 23 23 23 24 24 24
Public Works 18 18 18 18 19 20 20 20 21 19
Parks and Recreation 12 12 12 12 11 11 11 11 11 10
Total General Fund 102 101 99 99 99 100 100 98 100 97
ENTERPRISE FUND
Water 13 13 13 14 14 14 14 14 12 12
Solid Waste 7 7 7 6 6 8 8 8 7 7
Total Enterprise Fund 20 20 20 20 20 22 22 22 19 19
INTERNAL SERVICE FUND
Administration 4 4 4 4 3 3 3 3 3 3
Total Internal Service Fund 4 4 4 4 3 3 3 3 3 3
TOTAL CITY POSITIONS 126 125 123 123 122 125 125 123 122 119
Notes: Approximately 85-100 temporary and seasonal employees are hired during the summer months as aquatic & customer service personnel. This count
is not reflected above. Eight contract personnel are used year round to augment solid waste crews. This count is not reflected above.
City of West University Place, Texas
Operating Indicators by Function
Last Ten Fiscal Years
132
2018 2017 2016 2015
FUNCTION/PROGRAM
Police
Arrests 269 231 294 360
Accident reports 151 142 151 162
Citations 3,073 2,260 1,444 2,322
Offense reports 761 609 758 874
Calls for service 29,719 24,844 24,716 26,354
Fire
Emergency responses 698 675 684 717
Average response time 4:40 4:35 4:29 4:34
Fire incidents 723 805 754 801
Water
New accounts 629 657 598 526
Source:
Surface 58 59 65 62
Well 42 41 35 38
Average daily consumption (millions of gallons) 2.16 2.20 2.12 2.06
Number of million gallons of surface water pumped 462.52 477.01 507.88 468.12
Number of million gallons of well water pumped 328.84 326.45 267.50 282.03
Total consumption (millions of gallons) 791.36 803.46 775.38 750.15
Peak daily consumption (millions of gallons) 4.14 6.54 4.06 4.50
Sewer
Average daily sewage treatment (millions of gallons) 1.18 1.12 1.17 1.20
Total consumption (millions of gallons) 400.68 409.46 426.47 436.57
Peak daily consumption (millions of gallons) 3.54 5.09 5.88 5.43
Source: Various City departments
Schedule 19
133
2014 2013 2012 2011 2010 2009
226 323 231 294 325 342
122 127 142 121 99 137
2,482 2,779 2,260 3,379 4,830 2,479
581 695 609 583 669 823
22,071 26,835 24,844 25,964 29,148 27,029
669 683 659 660 581 489
4:35 4:34 4:45 4:25 3:49 4:00
721 663 734 765 774 673
608 665 669 678 724 724
80 80 80 80 80 80
20 20 20 20 20 20
2.06 2.31 2.38 2.79 2.22 2.36
437.00 466.25 530.06 658.80 357.42 400.44
313.88 375.06 335.24 359.55 452.95 461.41
750.88 841.31 865.30 1,018.35 810.37 861.85
4.24 5.36 4.89 5.10 4.34 5.62
1.10 1.09 1.18 1.10 1.25 1.21
402.95 397.30 430.12 402.36 455.02 448.57
4.04 4.04 4.85 2.66 4.63 4.32
City of West University Place, Texas
Capital Asset Statistics by Function
Last Ten Fiscal Years
134
2018 2017 2016 2015
FUNCTION/PROGRAM
Police
Stations 1 1 1 1
Patrol units 8 8 8 8
Fire stations 1 1 1 1
Other public works
Streets (miles - centerlines) 53 53 53 46
Streetlights 1,747 1,687 1,687 1,687
Parks and recreation
Parks and Facilities 11 11 11 9
Parks acreage 13.2 13.2 13.1 13.7
Swimming pools 2 2 2 2
Baseball/softball/ soccer 2
Tennis courts 5 5 5 5
Racquetball/squash courts 2 2 2 2
Gymnasiums - - - -
Half-basketball courts 3 3 3 3
Water
Water mains (miles) 56 56 56 40
Fire hydrants 347 347 347 357
Storage capacity (millions of gallons) 3.65 3.65 3.65 3.65
Sewer
Sanitary sewers (miles) 44 44 44 40
Storm sewers (miles) 34 34 34 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
Schedule 20
135
2014 2013 2012 2011 2010 2009
1 1 1 1 1 1
7 7 7 7 7 7
1 1 1 1 1 1
46 46 43 43 43 43
1,687 1,687 1,687 1,687 1,694 1,694
9 9 9 9 9 9
13.7 13.7 13.7 13.7 14.0 14.0
2 2 2 2 2 2
6 6 6
5 5 5 5 5 5
2 2 2 2 2 2
- - - - - -
3 3 3 3 3 3
40 40 40 40 40 40
357 357 357 357 357 357
3.65 3.65 3.65 3.65 3.65 3.65
40 40 40 40 40 40
32 32 32 32 32 32
1.32 1.32 1.32 1.32 1.32 1.32
2 2 2 2 2 2
136
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137
Overall Compliance and
Internal Control Section
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CPAs AND ADVISORS | WEAVER.COM
138
Independent Auditor’s Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance
with Government Auditing Standards
The Honorable Mayor
And Members of the City Council of the
City of West University Place, Texas
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, 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, 2018,
and the related notes to the financial statements, which collectively comprise the City’s basic financial
statements, and have issued our report thereon dated June 20, 2019.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal
control over financial reporting (internal control) to determine the audit 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 over financial reporting was for the limited purpose described in
the preceding paragraph and was not designed to identify all deficiencies in internal control over
financial reporting that might be material weaknesses or significant deficiencies and therefore, material
weaknesses or significant deficiencies may exist that were not identified. However, as described in the
accompanying schedule of findings and responses, we identified certain deficiencies in internal control
that we consider to be material weaknesses and significant deficiencies.
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. We consider the deficiency described as finding 2018-001 in the accompanying schedule
of findings and responses to be a material weakness.
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. We consider the deficiency described as finding 2018-002 in the accompanying schedule
of findings and responses to be a significant deficiency.
The Honorable Mayor
And Members of the City Council of the
City of West University Place, Texas
139
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect
on the determination of financial statement amounts. However, providing an opinion on compliance
with those provisions was not an objective of our audit and, accordingly, we do not express such an
opinion. The results of our tests disclosed no instances of noncompliance or other matters that are
required to be reported under Government Auditing Standards.
The City’s Response to Findings
The City’s response to the findings identified in our audit is described in the accompanying schedule of
findings and responses. The City’s response was not subjected to the auditing procedures applied in the
audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
WEAVER AND TIDWELL, L.L.P.
Houston, Texas
June 20, 2019
City of West University Place, Texas
Schedule of Findings and Responses
For the Fiscal Year Ended December 31, 2018
140
Finding 2018-001
Material Weakness in Internal Control over Financial Reporting—Financial Statement Misstatements
Criteria: “Internal control” is defined as a process effected by those charged with governance,
management, and other personnel that is designed to provide reasonable assurance about the
achievement of the entity's objectives with regard to the reliability of financial reporting, effectiveness
and efficiency of operations, and compliance with applicable laws and regulations. With respect to the
reliability of financial reporting, the existence of a material misstatement of an entity’s financial
statements is an indication of a material weakness in internal control.
Condition: The financial information for the period ended December 31, 2018 that was provided for
audit included misstatements that were identified as a result of our audit procedures, and in one
instance resulted in a material audit adjustment and restatement of net position - beginning net position
of the City’s Technology Management internal service fund was restated to recognize capital assets
that had been expensed rather than capitalized in prior years. For financial accounting purposes,
internal service funds are classified as proprietary funds and accordingly should be reported on a full
accrual basis, which includes the capitalization and depreciation of assets that meet the specified
criteria for capitalization.
During the audit we also noted that warrants receivable and ambulance service revenues receivable
were not recognized in the City’s financial statements as of December 31, 2018. The City’s policy is to
record revenue for these items only when cash is received, on the modified accrual basis which is
applicable to the general fund, and therefore the associated revenues are deferred until collected.
Audit adjustments were recorded to recognize net receivables of $250,778 for these items in the general
fund.
Cause: Because these errors were not detected prior to the information being provided for audit, there
is an indication of a deficiency in internal control over financial reporting related to closing procedures,
specifically review and reconciliation of accounting and financial reporting areas where there are
differences in applicable bases of accounting (full versus modified accrual) and related asset/revenue
recognition differences.
Effect or Potential Effect: Material misstatements of the City’s financial statements were not prevented,
or detected and corrected, by the City’s system of internal control. Failure to establish effective closing
procedures will allow possible misstatements to exist and continue without notice.
Recommendation: We noted that while the City had monthly and annual closing procedures in place,
the process and related controls did not identify these misstatements. Therefore we recommend that
management review the existing closing procedures and develop procedures to encompass
consideration of the applicable basis of accounting and address the identification and recognition of
these items.
Views of Responsible Official(s) and Planned Corrective Actions: With the staff turnover that has
occurred over the last two years, many positive changes have been made to address issues found.
Unfortunately this finding was not an area that was addressed. With the current new staff, it was our first
year going through the year end process and we had followed the year end process implemented in
previous years by previous staff and accepted by our previous auditors. This past year we had selected
a new auditing firm in the hopes that a fresh set of eyes would help us to improve our processes and
financial statements which this finding has exactly done. Staff has incorporated the basis of accounting
into our annual closing procedures to assure all necessary items are recognized as required going
forward.
City of West University Place, Texas
Schedule of Findings and Responses - Continued
For the Fiscal Year Ended December 31, 2018
141
Finding 2018-002
Significant Deficiency in Internal Control over Financial Reporting—Incomplete Cash Reconciliation
Criteria: One of the most fundamental and effective control procedures is bank account reconciliation.
Reconciliation is a necessary procedure in order to identify errors and misstatements related to cash
balances and transactions, and to ensure adequate control of spending and maintenance of liquidity.
Condition: The City’s concentration bank account includes an unreconciled balance of approximately
$139 thousand as of December 31, 2018. This unreconciled balance is included as an “adjustments” line
item on the reconciliation, as an additive item to reconcile from the bank balance to the general
ledger balance. The December 31, 2017 reconciliation included a similar “adjustments” item,
amounting to approximately $143 thousand as of December 31, 2017.
Cause: An unreconciled balance has been carried forward for several years. This balance originated
prior to the time when the City’s current finance department personnel assumed their positions, and the
City’s current personnel have not located the origin of the balance.
Effect or Potential Effect: The unreconciled “adjustments” balance represents a potential misstatement
(overstatement) of the City’s cash balances.
Recommendation: We recommend that the City fully reconcile its cash accounts and investigate the
unreconciled balances to the extent necessary to determine whether these “adjustments” should be
written off or whether they represent current uncleared transactions.
Views of Responsible Official(s) and Planned Corrective Actions: This has been a repeat finding for
numerous years; however, with staff turnover in the Treasurer position over the last couple of years it has
been difficult, up until now, to implement a process to fully reconcile. The City’s Finance Department
reconciles every bank account every month and progress has been made over the last year to improve
the reconciliation process by adding steps and processes to assure that the unreconciled amount
remains unchanged. The approximate $140 thousand unreconciled amount relates to prior years
activity that has still yet to be identified. Moving forward the plan of the Finance Director and Treasurer
is to continue the current bank reconciliation process that has added steps to eliminate any additional
unreconciled adjustments. Any improvements that make the bank reconciliation process better will
also be incorporated. We also are committed during 2019 to eliminating the unreconciled prior period
amount by identifying and reconciling or recommending a write off.