HomeMy WebLinkAbout03-26-12 Fiscal Affairs Committee
CHUCK ENGELKEN,CHAIR
JOHN ZEMANEK
CouncilmemberDistrict 2
Councilmember At-Large A
Alternate Member 1
DARYL LEONARD
Councilmember District 3
JAY MARTIN
Councilmember District 5
TOMMY MOSER
Alternate Member 2
Councilmember District 4
CITY OF LA PORTE FISCAL AFFAIRS COMMITTEE
MEETING AGENDA
Notice is hereby given of ameeting of the City of La Porte Fiscal Affairs Committee to be held onMonday,
March 26, 2012,at 5:00p.m.,
in the La Porte City Hall Council Chambers, 604 West Fairmont Parkway,
LaPorte, Texas, regarding the items of business according to the agenda listed below:
1.
Call to Order
2.
Consider approval of minutes of the January 23,2012,meeting of the Fiscal Affairs Committee –P.
Fogarty
3.
Receive and review 2011 Comprehensive Annual Financial Report –M. Dolby
4.
Set date for next meeting –M. Dolby
5.
Administrative Reports –S. Gillett
6.
Committeecomments regarding matters appearing on agenda; recognition of community members,
city employees, and upcoming events; inquiry of staff regarding specific factual information or
existing policies –Committee members Engelken, Leonard, Moser, Martin, and Zemanek.
7.
Adjourn
In compliance with the Americans with Disabilities Act, the City of La Portewill provide for
reasonable accommodations for persons attending publicmeetings. To better serve attendees,
requestshould be received 24 hours prior to the meetings. Please contact Patrice Fogarty, City
Secretary, at 281.470.5019.
CERTIFICATION
I certify that a copy of the March 26,2012, agenda of items to be considered by the Fiscal Affairs Committeewas
posted on the City Hall bulletin board on March 20, 2012
Patrice Fogarty,City Secretary
I certify that the attached notice and agenda of items was removed by me from the City Hall bulletin board on the
____ day of ________________, 2012.
__________________________________________________________________
Name and Title
Page 1of 1
March 26, 2012, Fiscal Affairs Committee Agenda
CHUCK ENGELKEN,CHAIR
JOHN ZEMANEK
CouncilmemberDistrict 2
Councilmember At-Large A
Alternate Member 1
DARYL LEONARD
Councilmember District 3
JAY MARTIN
Councilmember District 5
TOMMY MOSER
Alternate Member 2
Councilmember District 4
MINUTES OF MEETING OF FISCAL AFFAIRS COMMITTEE
JANUARY 23, 2012
January 23, 2012, at 5:00p.m.
The Fiscal Affairs Committee met on in the La Porte City Hall Council
Chambers, 604 West Fairmont Parkway, La Porte, Texas, to considerthe following items of business:
1.Call to Order
ChairmanChuck Engelken called the meeting to order at 5:00p.m. Committee Memberspresent
wereCouncilmembersDaryl Leonard and Tommy Moser. Alternate Members present:
Councilmembers John ZemanekandJay Martin.
2.Consider approval of Minutes of the October 24,2011,meeting of the Fiscal Affairs
Committee
–P. Fogarty
Committee MemberLeonard moved to approve the minutes of the October 24, 2011,meeting of
.MOTION PASSED.
the Fiscal Affairs CommitteeCommitteeMemberMoserseconded.
Ayes:Chairman Engelken,Committee MembersMoserand Leonard
Nays:None
3.Receive and review FirstQuarter (FY 2012) Investment Report
–M. Dolby
Finance Treasurer,Shelley Wolnypresented the FirstQuarter (FY 2012) Investment Report.
4.Receive and review months of July,August,andSeptember(FY 2011), October and
November (FY 2012)Purchasing Card Expenditures –
M. Dolby
The purchasing card expenditures for the months of July, August and September (FY2011),and
October and November (FY2012)were discussed.
5.Set date for next meeting
–M. Dolby
The Committee setMarch 26, 2012,at 5:00 p.m.,as the dateand time for the next meeting.
6.Administrative Reports
–S. Gillett
There was no administrative report.
Page 1of 2
January 23, 2012 Fiscal Affairs Committee Minutes
7.Committee Comments
–Matters appearing on agenda;Recognition of community members, city
employees, and upcoming events;Inquiry of staff regarding specific factual information or existing
policy.
Chairman Engelken requested a weekly report and terms for repayment be provided to City Council
on Food Fair.
8.Adjourn
–There being no further business, Committee Member Mosermoved to adjournthe
meeting.Committee Member Leonard seconded.The meeting was adjourned at 5:24 p.m.
Respectfully submitted,
________________________________
Patrice Fogarty, City Secretary
th
Passed and approved on the26day ofMarch,2012.
________________________________
Chairman Chuck Engelken
Page 2of 2
January 23, 2012 Fiscal Affairs Committee Minutes
REQUEST FOR FISCAL AFFAIRSAGENDA ITEM
Budget
Agenda Date Requested:March 26, 2012
Source of Funds:
Requested By:Michael Dolby
Account Number:
Department: Finance
Amount Budgeted:
Report: Resolution:Ordinance:
Amount Requested:
Exhibits:FY 2011Comprehensive Annual Financial Report
Budgeted Item:
Exhibits: Economic Development Corporation Financial Report
Exhibits: Federal Single Audit
SUMMARY & RECOMMENDATION
Inaccordance with the citycharter, the 2011 auditreportwill be presentedto Council bythe
external auditors Null-Lairson. Theaudit report provides theCitywith reasonableassurance
that the financialstatements arefreeof material misstatements. Theauditors designed teststhat
provide evidencethat the financial statements conform to thehighest level of accounting
standards.
Null-Lairsonperformed agreed upon procedures on the Economic Development Corporation
expenditures for the period of October 1, 2009 to September 2, 2011. A copy of that report is
included along with CAFR.
The CityofLaPorte haswon an award for excellencein financial reporting from the
Government Finance Officers Association for thirty consecutive years.
Action Requested of Fiscal Affairs Board:
None.
Approved for Fiscal AffairsAgenda
Steve Gillett, InterimCity ManagerDate
CITY OF LA PORTE, TEXAS
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
YEAR ENDED SEPTEMBER 30, 2011
Prepared By
Department of Finance
CITY OF LA PORTE, TEXAS
TABLE OF CONTENTS
Page
Introductory Section
Letter of Transmittal i
GFOA Certificate of Achievement vi
Organization Chart vii
List of Elected and Appointed Officials viii
Financial Section
Independent Auditors' Report
1
Management’s Discussion and Analysis
3
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Assets 15
Statement of Activities 16
Fund Financial Statements:
Balance Sheet - Governmental Funds 18
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net
Assets 19
Statement of Revenues, Expenditures, and Changes in Fund Balances –
Governmental Funds 20
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balances of Governmental Funds to the Statement of Activities 21
Statement of Net Assets - Proprietary Funds 22
Statement of Revenues, Expenses and Changes in Fund Net Assets – Proprietary
Funds 24
Statement of Cash Flows - Proprietary Funds 26
Notes to the Financial Statements 28
Required Supplementary Information:
General Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balances –
Budget and Actual 56
Notes to Required Supplementary Budget Information 57
Required Pension System Supplementary Information 58
Combining and Individual Fund Statements and Schedules
Nonmajor Governmental Funds:
Combining Balance Sheet 62
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 66
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual:
Budgetary Comparison Schedules:
Debt Service Funds 72
Special Revenue Funds:
Hotel/Motel Tax 73
Section 48 Sales Tax 74
Tax Increment Reinvestment Zone 75
Grant Fund 76
Street Maintenance Sales Tax Fund 77
CITY OF LA PORTE, TEXAS
TABLE OF CONTENTS (continued)
Page
Combining and Individual Fund Statements and Schedules (continued)
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual:
Budgetary Comparison Schedules:
Capital Projects Funds:
Transportation & Other Infrastructure 78
1998 General Obligation Bonds 79
2000 Certificate of Obligation Bonds 80
2004 Certificate of Obligation Bonds 81
2005 Certificate of Obligation Bonds 82
2005 General Obligation Bonds 83
2006 Certificate of Obligation Bonds 84
2006 General Obligation Bonds 85
2007 Certificate of Obligation Bonds 86
2010 Certificate of Obligation Bonds 87
Drainage & Improvements 88
Supplementary Individual Fund Financial Statements and Schedules -
General Fund
Schedule of Revenues – Budget and Actual 91
Schedule of Expenditures – Budget and Actual 92
Combining Financial Statements – Nonmajor Enterprise Funds
Combining Statement of Net Assets 98
Combining Statement of Revenues, Expenses and Changes in Fund
Net Assets 99
Combining Statement of Cash Flows 100
Combining Financial Statements – Internal Service Funds
Combining Statement of Net Assets 102
Combining Statement of Revenues, Expenses and Changes in Fund
Net Assets 103
Combining Statement of Cash Flows 104
Exhibit
Unaudited Statistical Section
Net Assets by Component 106 1
Changes in Net Assets 108 2
Fund Balances of Governmental Funds 112 3
Changes in Fund Balances of Governmental Funds 114 4
Assessed Value and Estimated Actual Value of Taxable Property 116 5
Property Tax Rates - Direct and Overlapping Governments 118 6
Principal Property Taxpayers 120 7
Property Tax Levies and Collections 121 8
Ratios of Outstanding Debt by Type 122 9
Ratios of General Bonded Debt Outstanding 124 10
Direct and Overlapping Governmental Activities Debt 125 11
Pledged Revenue Coverage 126 12
Demographic and Economic Statistics 127 13
Principal Employers 128 14
Full-Time Employees by Function/Program 129 15
Operating Indicators by Function/Program 130 16
Capital Assets Statistics by Function/Program 132 17
Introductory Section
CITY OF LA PORTE
Established 1892
March 26, 2012
To the Honorable Mayor,
Members of City Council, and
Citizens of the City of La Porte, Texas:
The Finance Department and City Manager’s Office are pleased to submit the Comprehensive Annual
Financial Report for the City of La Porte, Texas for the fiscal year ended September 30, 2011. This report
is published to provide the City Council, City staff, our citizens, our bondholders and other interested
parties with detailed information concerning the financial condition and activities of the City government.
This report consists of management’s representations concerning the finances of the City of La Porte.
Consequently, management assumes full responsibility for the completeness and reliability of all of the
information presented in this report. To provide a reasonable basis for making these representations,
management of the City has established a comprehensive internal control framework that is designed both
to protect the government’s assets from loss, theft or misuse and to compile sufficient reliable information
for the preparation of the City of La Porte’s financial statements in conformity with GAAP. The cost of
internal controls should not outweigh their benefits; therefore the City of La Porte’s comprehensive
framework of internal controls has been designed to provide reasonable rather than absolute assurance
that the financial statements will be free from material misstatement. As management, we assert that, to
the best of our knowledge and belief, this financial report is complete and reliable in all material respects.
The City of La Porte’s financial statements have been audited by Null Lairson, PC, a firm of licensed
certified public accountants. The goal of the independent audit was to provide reasonable assurance that
the financial statements of the City of La Porte for the fiscal year ended September 30, 2011 are free of
material misstatement. The independent audit involved examining, on a test basis, evidence supporting
the amount and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management and evaluating the overall financial statement presentation.
The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering
an unqualified opinion that the City of La Porte’s financial statements for fiscal year ended September 30,
2011, are fairly presented in conformity with GAAP. The independent auditors’ report is presented as a
component of the financial section of this report.
The independent audit of the financial statements of the City of La Porte included a federally mandated
“Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing
Single Audit engagements require the independent auditor to report not only on the fair presentation of
the financial statements, but also on the audited government’s internal controls and compliance with legal
requirements, with special emphasis on internal controls and legal requirements involving the
administration of federal awards. These reports are available in the City of La Porte’s separately issued
Single Audit Report. GAAP requires that management provide a narrative introduction, overview and
analysis to accompany the basic financial statements in the form of Management’s Discussion and
Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in
conjunction with it. The City of La Porte’s MD&A can be found immediately following the report of the
independent auditors.
i
Profile of the City
The City of La Porte, incorporated in 1892, is located in the southeast quadrant of Harris County and is
bounded on the north by the Houston ship channel, on the east by Galveston Bay and the south by the
Bayport channel. The City of La Porte currently encompasses 19 square miles and serves a population of
34,138.
The City is a home rule city operating under the Council-Manager form of government. Policymaking and
legislative authority are vested in a governing council consisting of the mayor and eight other members.
The city council is responsible, among other things, for passing ordinances, adopting the budget,
appointing committees and hiring the City Manager, City Secretary and Attorney. The City Manager is
responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day
operations of the City and for appointing the heads of various departments. The Council is elected on a
non-partisan basis. The Mayor and Council members serve three-year staggered terms. Six of the council
members are elected by district. The Mayor and the two remaining council members are elected at large.
The City of La Porte provides a full range of services, including police and fire protection, the
construction and maintenance of streets and other infrastructure and recreational activities and cultural
events. Certain services are provided through a legally separate Water Authority, which functions, as a
blended component unit and in essence, is a department of the City of La Porte, and, therefore, has been
included as an integral part of the City of La Porte’s financial statements. Additional information on the
Water Authority and other blended component units can be found in Note 1.B. of the notes to the
financial statements. The City has established a Taxing Increment Reinvestment Zone one (the Zone).
The zone is presented as a blended component unit and is being reported as a governmental fund type (see
Note 1 B). The City has also established a section 4 B Sales Tax Corporation (see Note 1 B). The City’s
accounting records for general governmental operations are maintained on 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.
The annual budget serves as the foundation for the City of La Porte’s financial planning and control.
Budgetary control has been established at the fund level. All agencies of the City of La Porte are required
to submit requests for appropriation to the City Manager on or before May 26 of each year. The City
Manager uses these requests as the starting point for developing a proposed budget. The City Manager
then presents this proposed budget to council for review prior to August. The council is required to hold a
public hearing on the proposed budget and to adopt a final budget by no later than September 30th. The
appropriated budget is prepared by fund, function (e.g., public safety) and department (e.g., police). The
directors are given latitude to approve transfers of appropriations within a department. Transfers of
appropriations between funds, however require the special approval of the city council. Budget-to-actual
comparisons are provided in financial reports for each individual governmental fund for which an
appropriated annual budget has been adopted. For the general fund, this comparison is presented on page
56 as part of the required supplementary information. For governmental funds, other than the general
fund, with appropriated annual budgets, this comparison is presented in the governmental fund subsection
of this report, which starts on page 72. Formal budgetary integration is employed as a management
control device during the year for the General Fund and Enterprise Funds. Formal budget integration is
not employed for the Debt Service and Capital Projects Funds because effective budgetary control is
alternatively achieved through bond indenture provisions and legally binding construction contracts,
respectively.
Economic Condition
The information presented in the financial statements is perhaps best understood when it is considered
from the broader perspective of the specific environment within which the City of La Porte operates.
ii
Local economy.
The City of La Porte is located in the southeast quadrant of Harris County, which is a 1,723 square mile
county is a leading oil, gas and petrochemical areas. The County has more than 3,200 manufacturing
plants, the nation’s largest concentration of petrochemical plants, the third largest United States seaport
and is a corporation management center. A significant part of the County’s major employers,
manufacturers, education and financial institutions are located in Houston, the County seat. The Texas
Medical Center, located in Harris County, is one of the nation’s largest, providing medical care and
educational opportunities. Higher education facilities includes: University of Houston, Rice University,
Texas Southern University, St. Thomas University and Houston Baptist University, all offering full four-
year as well as postgraduate programs. The Lyndon B. Johnson Space Center is also located here. Located
some 20 miles southeast of Houston on Galveston Bay in Harris County are the three communities that
make up the La Porte Bayshore Area: La Porte, Morgan’s Point and Shoreacres. The area has a combined
population of approximately 40,000. Though much of the image of this area is industrial, the La Porte-
Bayshore area is still characterized by an expanse of resort homes.
Future planning.
The La Porte 2020 Comprehensive Plan is a 20-year master plan adopted by the City Council to guide
policy decisions relating to the physical and economic development of the community. In general, the
plan indicates how the community desires to develop and redevelop over the course of the next twenty
years. The comprehensive plan is a physical plan; it is long range, comprehensive and states the goals,
objectives and policies of the local government. The comprehensive plan provides clear direction through
specific statements of action to achieve the desired results envisioned by citizens and the leadership of the
community. The essential objectives of the comprehensive plan are as follows:
It is a plan to guide the future physical development and redevelopment of the community;
The time frame is long, extending over a twenty-year horizon;
It encompasses a large geographic area including the corporate limits and ETJ of the community;
It is general in nature, allowing some issues to be resolved and many decisions to be made;
It articulates ideas in a framework of goals and objectives, policies and actions, and plans and
projects;
It is intended foremost, to serve as a continuing guide to decision-making, to provide a common
direction and to provide stability as issues are addressed and future decisions are made.
Residential Development.
Neighborhoods are one of La Porte’s greatest assets as they form a foundation for a sound quality of life.
The City is made up of several distinct neighborhood areas, each with somewhat different physical
characteristics such as the age of housing, street configuration, and the sizes of structures and lots. Much
of the City’s overall image and identity is due to the unique character of its neighborhoods and these
distinguishing features should, therefore, be preserved. Neighborhoods that are safe, well maintained and
have character which will maintain property values and thus maintain a sound neighborhood environment
along with a stable residential tax base. The attractive appearance and environmental quality of existing
and future low-density residential neighborhoods should be protected and improvements made where
necessary to maintain the value of properties and enhance the quality of life. As the city continues to
develop it is important that the integrity of the neighborhoods is preserved and the value and enjoyment of
property is maintained and enhanced.
iii
Goals for residential development:
Consider programs to revitalize and rehabilitate existing housing where needed.
Meet the future housing needs by providing for a variety of housing options.
Encourage the rehabilitation or replacement of substandard housing.
Promote a standard of home ownership encouraging well-maintained residential properties.
Preserve the integrity of existing neighborhoods and create livable and safe neighborhood
environments.
Protect the attractive appearance and environmental quality of existing neighborhoods and make
necessary improvements to maintain the value of properties and enhance the quality of life.
Beautification and Conservation.
Citizens have expressed great interest for enhancing the visual appearance of La Porte and the
redevelopment and reinvestment in Downtown, along major corridors and in nonresidential areas.
Through public involvement it is apparent that citizens visualize attractive shopping centers, livable
neighborhoods, landscaped roadways, pleasant places to walk and an enhanced quality of life. They want
successful shopping areas that appeal to shoppers. They see the opportunities in downtown to create a
destination that combines a lively entertainment district in a historically significant area, retail stores
interspersed with restaurants and professional offices and a blend of residential units as well.
Goals for Beautification:
Improve the community character to make it a more desirable place to live, work and visit.
Improve the aesthetic visual environment through enhancement of site design, signage, roadways,
parking areas, open space and landscaping.
Invest in Downtown to establish a vibrant mix of places to work, live and visit, with shops,
restaurants, entertainment and a variety of dwelling units.
Redevelopment Strategy.
Urban redevelopment efforts require cooperative action to encourage new and sustained private
investment and to provide supporting rehabilitation of public infrastructure. A key part of the process is
determining what strategic actions the community should take to achieve its redevelopment goals and
objectives. Successful redevelopment will often require cooperation and coordination between agencies at
different levels of government as well as non-profit community organizations. This should include
coordination of physical improvements with social service programs, which aim to enhance the health and
economic capacity of residents in targeted neighborhoods.
Redevelopment Goals:
Stabilize and improve the quality of neighborhoods and other areas in decline by attracting
renewed private investment activity.
Revitalize the City’s historic downtown area.
Relevant Financial Policy
City Council voted to adopt GASB 54 which resulted in the passage of a resolution that measures net
financial resources available to finance expenditures of future periods.
iv
Major Initiatives
Following the completion of a comprehensive city-wide drainage plan, City Council directed staff to
alleviate affected neighborhoods from surface water flooding. Consequently, in 2010, the City issued
$6.28 million in certificates of obligation to be spent on engineering and construction projects. In 2011
the City was also a recipient of the second round of disaster recovery funds of $4.1 million which will
also alleviate flooding on surface roads.
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for
Excellence in Financial Reporting to the City for its comprehensive annual financial report for the fiscal
year ended September 30, 2010. This was the thirtieth consecutive year that the City has received this
prestigious award. In order to be awarded a Certificate of Achievement, the City published an easily
readable and efficiently organized comprehensive annual financial report. This report satisfied both
generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report continues to meet the Certificate of Achievement Program's
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. In
addition, the government also received the GFOA’s Distinguished Budget Award for its annual budget
document. In order to qualify for the Distinguished Budget Presentation Award, the government’s budget
document was judged to be proficient in several categories, including as a policy document, a financial
plan, an operations guide and a communications device. The preparation of this report would not have
been possible without the efficient and dedicated services of the entire staff of the finance and
administration department. We would like to express our appreciation to all members of the department
who assisted and contributed to the preparation of this report. Credit also must be given to the mayor and
city council for their unfailing support for maintaining the highest standards of professionalism in the
management of the City of La Porte’s finances.
Respectfully submitted,
v
vi
CITY OF LA PORTE
Organizational Chart
vii
CITY OF LA PORTE, TEXAS
LIST OF ELECTED AND APPOINTED OFFICIALS
For the year ended September 30, 2011
Elected Officials Position
Louis Rigby Mayor
Michael Mosteit Council Member - District One
Chuck Engelken Mayor Protem - District Two
Daryl Leonard Council Member – District Three
Tommy Moser Council Member - District Four
Jay Martin Council Member - District Five
Mike Clausen Council Member - District Six
John Zemanek Council Member – At Large A
Dottie Kaminski Council Member – At Large B
City Management Position
Stephen Gillett Interim City Manager
Traci Leach Assistant City Manager
Ken Adcox Police Chief
David Mick Director of Public Services
Patrice Fogarty City Secretary
Denise Mitrano Municipal Judge
Michael G. Dolby Director of Finance
viii
Financial Section
Independent Auditors’ Report
To the Honorable Mayor and Members
of the City Council & Citizens
City of La Porte, Texas
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 La Porte, Texas
(the “City”) as of and for the year ended September 30, 2011, which collectively comprise the City’s
basic financial statements as listed in the table of contents. These financial statements are the
responsibility of the City of La Porte, Texas’ management. Our responsibility is to express opinions on
these financial statements based on our audit. We did not audit the financial statements of La Porte
Redevelopment Authority which represents 3 percent of the aggregate remaining fund balances and 30%
of the revenues of the aggregate remaining funds. Those financial statements were audited by other
auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the
amounts included for La Porte Redevelopment Authority.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used
and the significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion based on our audit and the report of other auditors, the financial statements referred to
above present fairly, in all material respects, the respective financial position of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
the City, as of September 30, 2011, and the respective changes in financial position, and cash flows,
where applicable, thereof for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated March 26,
2012, on our consideration of the City’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be considered in assessing the results of our
audit.
1
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3411 Richmond Suite 500 Houston, TX 77046 (P) 713.621.1515 (F) 713.621.1570
||||
2000 Loop 197 North Suite 200 Texas City, TX 77590 (P) 409-948-4406 (F) 409-948-0364
www.null-lairson.com
To the Honorable Mayor and
Members of City Council
City of La Porte, Texas
Page 2
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis, and budgetary comparison information and pension information system on pages
3 through 11 and 56 through 58, respectively, 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.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s financial statements as a whole. The introductory section, combining and individual
nonmajor fund financial statements and statistical section are presented for purposes of additional analysis
and are not a required part of the financial statements. The combining and individual nonmajor fund
financial statements and budgetary comparison schedules are the responsibility of management and were
derived from and relate directly to the underlying accounting and other records used to prepare the
financial statements. The information has been subjected to the auditing procedures applied in the audit of
the financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the financial
statements or to the financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the information is
fairly stated in all material respects in relation to the financial statements as a whole. The introductory and
statistical sections have not been subjected to the auditing procedures applied in the audit of the basic
financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
Houston, Texas
March 26, 2012
2
CITY OF LA PORTE, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of La Porte (the “City”), we offer the readers of the City’s financial
statements this narrative overview and analysis of the financial activities of the City for the fiscal year
ended September 30, 2011. It should be read in conjunction with the accompanying letter of transmittal
and the accompanying basic financial statements.
Overview of the Financial Statements
The discussion and analysis serves as an introduction to the City’s basic financial statements. The City’s
basic financial statements are comprised of three components: 1) government-wide financial statements,
2) fund financial statements, 3) notes to the financial statements and required supplementary information.
This report also contains other supplementary information in addition to the basic financial statements
themselves.
Government-wide Financial Statements.
The government-wide financial statements are designed to
provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector
business.
The statement of net assets presents information on all of the City’s assets and liabilities, with the
difference between the two reported as net assets.Over time, increases or decreases in net assets may
serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the City’s net assets changed during the
most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise
to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are
reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g.
uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are
intended to recover all or a significant portion of their costs through their user fees and charges (business-
type activities). The governmental activities of the City include general government, public safety, health
and sanitation and culture and recreation. The business-type activities of the City consist of the water and
sewer utilities, airport, and the La Porte Area Water Authority.
The government-wide financial statements can be found on pages 15 through 17 of this report.
Fund Financial Statements.
A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The City, like other state and
local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All of the funds of the City can be divided into two categories - governmental and
proprietary – and utilize different accounting approaches.
3
CITY OF LA PORTE, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
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 fiscal year. Such information may be useful in evaluating a government'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 government's near-term financing
decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues,
expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between
governmental funds and governmental activities.
The City maintains 21 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, debt service and capital improvements funds, which are
considered to be major funds. Data from the other 18 governmental funds are combined into a single,
aggregated presentation.
The City adopts an annual appropriated budget for its general fund. A budgetary comparison statement
has been provided for the general fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 18 through 21 of this report.
Proprietary Funds.
The City maintains two types of proprietary funds. Proprietary funds are used to
report the same functions presented as business type activities in the government-wide statements. The
City uses proprietary funds to account for its utilities, airport and water authority. Internal service funds
are an accounting device used to accumulate and allocate costs internally among the City’s various
functions. The City uses its internal service funds to account for motor pool services, technology services
and insurance. Because these services predominantly benefit the governmental rather than business type
functions, they have been included in the governmental activities in the government-wide financial
statements.
Enterprise funds are used to report the same functions presented as business-type activities in the
government-wide financial statements, only in more detail. The City uses enterprise funds to account for
its Utility operations, La Porte Area Water Authority and the Airport. All internal service funds are
combined into a single aggregated presentation in the proprietary fund financial statements. The basic
proprietary fund financial statements can be found on pages 22 through 27 of this report.
Notes to the Financial Statements.
The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements. The notes to
the financial statements can be found on pages 28 through 54 of this report.
Other Information.
In addition to the basic financial statements and accompanying notes, this report also
presents certain required supplementary information concerning the City's progress in funding its
obligation to provide pension benefits to its employees and general fund budgetary comparisons.
Required supplementary information can be found on pages 56 through 58 of the City's Comprehensive
Annual Financial Report.
4
CITY OF LA PORTE, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
The combining statements referred to earlier in connection with nonmajor governmental funds and
internal service funds are presented immediately following the required supplementary information on
pensions. Combining and individual fund statements and supporting schedules can be found beginning on
page 50 of the City's Comprehensive Annual Financial Report.
Government-Wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of the City's financial position. For
September 30, 2011
the City, assets exceed liabilities by $114.7 million as of , in the primary government
as follows:
Condensed Schedule of Net Assets
September 30, 2011 and 2010
Amounts in (000's)
Governmental ActivitiesBusiness-type ActivitiesTotals
201120102011201020112010
Current and other assets57,132$ 56,384$ 7,003$ 5,673$ 64,135$ 62,057$
Capital assets71,706 67,48542,525 46,380 114,232 113,865
Total Assets
123,869128,838 49,528 52,053 178,366 175,922
Other liabilities5,4116,0921,0191,0616,429 7,153
Long-term liabilities outstanding51,18450,5706,0246,91057,209 57,480
Total Liabilities
56,66256,595 7,043 7,971 63,638 64,633
Net assets:
Invested in capital assets, nets of
related debt 37,324 35,195 37,606 40,595 74,930 75,790
Restricted8,060 18,108 680 1,460 8,740 19,568
Unrestricted26,859 13,904 4,199 2,027 31,058 15,931
Total Net Assets
$ 67,20772,243$ 42,485$ 44,082$ 114,728$ 111,289$
Net Assets Invested in Capital Assets Net of Related Debt
65%
The largest portion of the City's net assets () reflects its investments in capital assets (e.g., land,
buildings, machinery, equipment, improvements, construction in progress and infrastructure), less any
debt used to acquire those assets that is still outstanding. 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.
Restricted Net Assets
$8.78%
A portion of the City's net assets, million or , represents resources that are subject to external
restriction on how they may be used. The remaining balance is unrestricted net assets, $31.1 million or
27%, and may be used to meet the City's ongoing obligations to residents and creditors. Both of these
categories remained relatively stable compared to the prior year.
5
CITY OF LA PORTE, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
Unrestricted Net Assets
The remaining balance of unrestricted net assets of $31.1 million (27%) may be used to meet the
government’s ongoing obligations to citizens and creditors.
The following table provides a summary of the City’s operations for the year ended September 30, 2011,
with comparative totals for the year ended September 30, 2010, Governmental activities increased the
City’s net assets by $5.0 million. Business-type activities decreased net assets by $1.6 million.
6
CITY OF LA PORTE, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
At the end of the current fiscal year, the City is able to report positive balances in all three categories of
net assets, both for the government as a whole, as well as for its separate governmental and business-type
activities.
Governmental Activities.
A comparison of program expenses to program revenues and revenues by
source for governmental activities follows:
Expenses and Program Revenues -Governmental Activities
18,000
16,000
14,000
Expenses
12,000
Program Revenues
10,000
8,000
6,000
4,000
2,000
0
General Public Public Culture and Health, Interest on
GovernmentSafetyWorksRecreationWelfare and Long-term
Sanitationdebt
Revenue sources for governmental activities were distributed as follows:
Revenues by Source -Governmental Activities
Charges for
Grants and
services
contributions
18%
2%
Other taxes
19%
Industrial
Property taxes
payments
38%
23%
For the year ended September 30, 2011, revenues without transfers in the governmental activities
totaled $49.8 million. This represents an increase of approximately $3.5 million or 8%. The increase is
due mainly to a sale of City owned property.
7
CITY OF LA PORTE, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
Total expenses increased for fiscal year 2011 in comparison to fiscal year 2010. General government
expenses increased by $2.0 million and public works increased by $1.8 million from the prior year. The
increase is mainly due to combining Bay Forest Golf Course Fund and the Technology Fund with the
General Fund.
Business-type Activities.
Revenues without transfers in the business-type activities totaled $11.3 million,
a $2.2 million increase from the prior year. This increase is mainly due to an increase in water and sewer
revenues due to drought conditions. A comparison between expenses and program revenues (charges for
services) relating to Utility operations follows.
Expenses and Program Revenues -Business-type Activities
$7,000
$6,000
Expenses
$5,000
Program Revenues
$4,000
$3,000
$2,000
$1,000
$-
Water ServicesSewer services
Financial Analysis of the Government’s Funds
The City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. As of the close of the current fiscal year, the City's governmental funds reported combined
ending fund balances of$42.5million, an increase of $2.0 from the prior year. This increase is due to a
sale of City owned property.
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 a
government’s net resources available for spending at the end of the fiscal year.
The General fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned
increase
fund balance of the general fund was $19.1 million, an of $7.2 million compared to last year.
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 57% of total
general fund expenditures and total fund balance represents 58% of the same.
The Debt Service fund had a total fund balance of approximately $3.1 million, all of which is reserved for
the payment of debt service. The net decrease in fund balance from the prior year of $4,806 was due to
more debt service payments made than revenues collected.
The Capital Projects Fund experienced a decrease in fund balance in the amount of $101,995 . This was a
planned decrease as the City utilized bond funds to construct and acquire various capital assets.
8
CITY OF LA PORTE, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
Proprietary Funds.
The City’s proprietary funds provide the same type of information found in the
government-wide financial statements.
Unrestricted net assets of the respective proprietary funds are Utility - $1,375 thousand, La Porte Area
Water Authority - $2,480 thousand and Airport - $344 thousand. The changes in net assets of the
proprietary funds for 2011 was as follows: Utility - increase of $258 thousand, La Porte Area Water
Authority - increase of $396 thousand and Airport - decrease of $108 thousand.
General Fund Budgetary Highlights
Actual revenues exceeded original and amended General Fund budgeted revenues by $186,449. Property
taxes were below budgeted by $73,640, but sales taxes, franchise fees and industrial payments exceeded
the projected budget by $139,687. Licenses and permits also exceeded budgeted amounts by $58,706 and
charges for services exceeded the budget by $107,479.
Total appropriations exceeded expenditures by $1,131,270, the majority of which can be attributed to
four departments. Administration had a positive variance in the amount of $200,542 due to open positions
and reduction in special programs. Planning and engineering had a positive variance in the amount of
$193,002 due to open positions. The variance in Public Works – Streets for $186,093 was due to open
positions in the department and a reduction in the paving program. Culture and recreation had a positive
variance of $184,398 due to open positions.
The city made budget adjustments of approximately $5.9 million for proceeds from the sale of land.
Capital Asset and Debt Administration
Capital Assets.
The City’s investment in capital assets for its governmental and business type activities
September 30, 2011
as of amounted to $114.2 million (net of accumulated depreciation). This
investment in capital assets includes land, buildings, roads, park facilities, water and wastewater plants
and service lines, machinery and equipment, and construction in progress. The total increase in the City’s
investment in capital assets for the current fiscal year was approximately million. The following table
2011
shows capital asset activity for the fiscal year (in 000’s):
Major capital asset events during the current year include the reporting of a drainage master plan study
Construction in progress at year-end represents ongoing projects; to include various water and sewer
projects. Additional information on capital asset activity can be found in note 5 to the financial
statements.
9
CITY OF LA PORTE, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
Long-term Debt.
At the end of the current fiscal year, the City had total bonded debt outstanding of
$45.1 million. Of this amount, $40.3 million is backed by the full faith and credit of the City, and the
remainder represents revenue bonds secured solely by specified revenue sources.
The City’s total debt decreased by approximately $2.6 million during the fiscal year. They key factor in
this decrease was payment of debt.
The City of La Porte maintains and “Aa2”, “AA”, and “AA-“ by Moody’s, Standard and Poor’s and Fitch
respectively for general obligation debt. The revenue bonds have been rated “A2”, “A”, “NR” by
Moody’s, Standard and Poor’s and Fitch respectively.
Additional information on long-term debt activity can be found in note 6 to the financial statements.
Economic Factors and Next Year’s Budgets and Rates
The unemployment rate for the City of La Porte is currently 9.0 percent which is an increase from the
rate of 8.3 percent a year ago. This is more than the state’s average unemployment rate of 8.5 percent
which is less than the national average of 9.0 percent. During the upcoming year, the City will closely
monitor the volatility in the housing market. Although our area has not been adversely affected by
home foreclosures, we will observe future economic changes. Total assessed value for all residential
and commercial property in the City of La Porte exceeded $2.0 billion for fiscal year 2011. The trend
for total assessed values has been steadily increasing each year with an average annual increase of 6
percent over the past five years.
Assessed property values trends (in billions):
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10
CITY OF LA PORTE, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
Sales tax receipts have increased 2 percent this fiscal year.
Sales tax revenues trends (in millions):
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Contacting the City's Financial Management
This financial report is designed to provide our citizens, customers and creditors a general overview of the
City’s finances. Questions concerning any of the information provided in this report or requests for
additional information should be addressed to the Director of Finance, 604 West Fairmont Parkway, La
Porte, Texas, 77571.
11
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12
Basic Financial Statements
13
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14
15
CITY OF LA PORTE, TEXAS
TATEMENT OF ACTIVITIES
S
For the Year Ended Setember 30, 2011
p
Program Revenue
Operating Capital Grants
Charges for Grants and and
ExpensesServices
ContributionsContributions
Functions/Programs
Primary government
Governmental Activities:
General Government14,574,511$ 711,994$ 7,649$ -$
Public Safety16,305,9973,506,254 610,967 -
Public Works6,279,510 329,502 427,732 -
Culture and Recreation6,032,602 1,474,247 107,419 1,338
Health, Welfare and Sanitation2,453,634 2,046,369 - -
Interest on Long-term debt1,871,431 - -
Total governmental activities
8,068,36647,517,685 1,153,767 1,338
Business-type activities:
Water Services6,942,077 6,267,432 - 1,411,899
Sewer services3,093,526 3,534,535 - -
Airport194,392 56,429 - 29,775
Total business-type activities
9,858,39610,229,995 - 1,441,674
Total primary government
$ 17,926,76257,747,680$ 1,153,767$ 1,443,012$
General revenues:
Taxes:
Property taxes
Sales and use taxes
Industrial payments
Franchise taxes
Unrestricted investment earnings
Miscellaneous
Special item - gain on sale of asset
Transfers
Total general revenues and transfers
Change in net assets
Net assets - beginning
Net assets - ending
See Notes to Financial Statements.
16
Net (Expense) Revenue and Changes in Net Assets
Primary Government
Governmental Business-type
ActivitiesActivities
Total
$ -(13,854,868)$ (13,854,868)$
-(12,188,776) (12,188,776)
-(5,522,276) (5,522,276)
-(4,449,598) (4,449,598)
-(407,265) (407,265)
-(1,871,431) (1,871,431)
-(38,294,214) (38,294,214)
737,254- 737,254
441,009- 441,009
(108,188)29,775 (108,188)
1,070,07529,775 1,070,075
1,070,075(38,294,214) (37,224,139)
17,163,861- 17,163,861
6,235,537- 6,235,537
10,192,582- 10,192,582
2,195,824- 2,195,824
33,243216,465 249,708
6,622374,727 381,349
-4,244,239 4,244,239
(2,706,874)2,706,874 -
(2,667,009)43,330,109 40,663,100
(1,596,934)5,035,895 3,438,961
44,082,32067,207,392 111,289,712
$ 42,485,38672,243,287$ 114,728,673$
17
BALANCE SHEET
GOVERNMENTAL FUNDS
September 30, 2011
Capital Other Total
Debt Service Improvements Governmental Governmental
General FundFundFundFundsFunds
Cash and cash equivalents14,215,166$ 2,065,948$ 6,107,455$ 8,846,381$ 31,234,950$
Investments7,136,041 1,039,244 3,030,658 2,006,782 13,212,725
Receivables, net of allowance for
uncollectibles3,753,184 47,851 2,414 675,992 4,479,441
Due from other governments- - - 639,774 639,774
Due from other funds42,164 - - 662,000 704,164
Inventories138,607 - - - 138,607
3,153,04325,285,162 9,140,527 12,830,929 50,409,661
Accounts payable2,779,944 - 61,075 946,644 3,787,663
Accrued salaries payable764,522 - - 18,613 783,135
Due to others- - 728 - 728
Due to other funds- - - 704,164 704,164
Deferred revenue2,387,542 40,161 - 69,208 2,496,911
Other payables- - - 120,970 120,970
40,1615,932,008 61,803 1,859,599 7,893,571
Inventories138,607 - - - 138,607
- 622,692 3,735,574
Debt service- 3,112,882
Grants- - - 657,231 657,231
Economic development- - - 2,377,182 2,377,182
Public safety- - - 327,885 327,885
Capital projects- - - 6,340,114 6,340,114
Public works- - - 646,226 646,226
Construction- - 9,078,724 - 9,078,724
Assigned for encumbrances95,923 - - - 95,923
-19,118,624 - - 19,118,624
3,112,88219,353,154 9,078,724 10,971,330 42,516,090
$ 3,153,04325,285,162$ 9,140,527$ 12,830,929$ 50,409,661$
See Notes to Financial Statements.
18
19
20
CITY OF LA PORTE
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2011
Net change in fund balances - total governmental funds:1,972,271$
Amounts reported for Governmental Activities in the Statement of Activities are different
because:
Governmental funds report outlays for capital assets as expenditures because such
outlays use current financial resources. In contrast, the Statement of Activities reports
only a portion of the outlay as expense. The outlay is allocated over the assets'
estimated useful lives as depreciation expense for the period.
This is the amount by which capital outlays $7,086,106 exceeded depreciation
$4,107,807 in the current period. 2,978,299
During the current year, the golf course enterprise fund was changed to a governmental
fund. Current assets and liabilities were transferred to the general fund, but capital
assets and long-term liabilities are only reported at the government-wide level in
governmental activities. The net affect of the change is a transfer to the governmental
activities.2,586,119
Current year disposal of assets are reported in the government-wide financial statement
and not in the fund statement. The book value of assets disposals reduces net assets in
the government-wide statement.(2,526,834)
Governmental funds do not present revenues that are not available to pay current
obligations. In contrast, such revenues are reported in the Statement of Activities when
earned. 749,588
Governmental funds report bond proceeds as current financial resources. In contrast,
the Statement of Activities treats such issuance of debt as a liability. Governmental
funds report repayment of bond principal as an expenditure, In contrast, the Statement
of Activities treats such repayments as a reduction in long-term liabilities. This is the
amount by which repayments exceeded proceeds. 1,740,000
Governmental funds report bond issuance costs as expenditures. In contrast, the
government wide financial statements amortized such a cost over the life of the bonds.(46,587)
Some expenses reported in the statement of activities do not require the use of current
financial resources and these are not reported as expenditures in governmental funds:
Change in accrued interest payable10,936
Change in NPO and OPEB Obligation(2,053,616)
Amortization of bond discounts and premiums35,591
Change in Compensated Absences(68,121)
Internal service funds are used by management to charge the costs of certain activities,
such as fleet maintenance and information technology, to individual funds. The net
revenue (expense) of certain internal service funds is reported with governmental
activities.(341,751)
Change in net assets of governmental activities
$ 5,035,895
See Notes to Financial Statements.
21
CITY OF LA PORTE
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
September 30, 2011
Business-type Activities
Other
Enterprise
Utility FundLPAWAFunds
Assets
Current Assets:
Cash and cash equivalents929,879$ 622,948$ 232,042$
Investments1,225,316 1,352,469 116,726
Accounts receivable, net of allowance for
doubtful accounts1,046,761 217,108 -
Accrued interest receivable709 556 93
Inventories4,800 - -
Deferred charges- 60,058 -
Restricted cash and cash equivalents504,192 689,162 -
Total Current Assets
2,942,3013,711,657 348,861
Non-current Assets:
Capital Assets:
Land and improvements224,308 - 203,504
Construction in progress5,316,158 - -
Buildings and improvements57,620 - -
Improvements other than buildings60,980,582 15,429,680 5,778,399
Vehicles and equipment638,989 6,130 -
Less Accumulated depreciation(35,295,094) (7,698,047) (3,117,789)
Total Non-current Assets
7,737,76331,922,563 2,864,114
Total Assets
10,680,06435,634,220 3,212,975
Liabilities
Current Liabilities:
Accounts payable333,015 49,424 3,433
Accrued salaries payable100,341 - -
Other current liabilities5,605 - 1,500
Interest payable9,136 3,988 -
Customer deposits511,067 - -
Claims and judgments- - -
Long-term debt, current portion
Compensated absences20,352
Bonds payable, current portion262,500 605,000 -
Total Current Liabilities
658,4121,242,016 4,933
Non-current Liabilities:
Compensated absences234,048 - -
Net pension obligation242,813 - -
OPEB obligation 608,949 - -
Bonds payable, current portion1,050,000 3,000,702 -
Total Non-current Liabilities
3,000,7022,135,810 -
Total Liabilities
3,659,1143,377,826 4,933
Net Assets
Invested in capital assets, net of related debt30,610,061 4,132,061 2,864,114
Restricted for debt service271,636 408,500 -
Unrestricted1,374,697 2,480,389 343,928
Total Net Assets
$ 7,020,95032,256,394$ 3,208,042$
See Notes to Financial Statements.
22
Governmental
Activities
Internal Service
TotalsFund
$ 4,426,9831,784,869$
2,226,9282,694,511
119,9271,263,869
1,8231,358
34,6284,800
-60,058
-1,193,354
6,810,2897,002,819
-427,812
-5,316,158
-57,620
-82,188,661
13,447,130645,119
(7,758,171)(46,110,930)
5,688,95942,524,440
12,499,24849,527,259
51,150385,872
25,577100,341
-7,105
-13,124
-511,067
573,894-
20,352
-867,500
650,6211,905,361
86,330234,048
-242,813
-608,949
-4,050,702
86,3305,136,512
736,9517,041,873
5,688,95937,606,236
-680,136
6,073,3384,199,014
$ 11,762,29742,485,386$
23
CITY OF LA PORTE
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For the Year Ended September 30, 2011
Business-type Activities
Other
Enterprise
Utility FundLPAWAFunds
Revenues
Charges for services8,562,778$ 1,246,186$ 56,429$
Total Operating Revenues
1,246,1868,562,778 56,429
Operating Expenses
Personnel services3,235,767 - -
Supplies and materials378,393 5,343 -
Purchased water- 1,006,229 -
Repairs and maintenance- - -
Other services and charges2,844,323 80,055 27,989
Depreciation1,924,447 460,877 166,403
Total Operating Expenses
1,552,5048,382,930 194,392
Operating income179,848 (306,318) (137,963)
Non-operating Revenues (Expenses)
Earnings on investments6,989 25,167 1,087
Miscellaneous revenue- - -
Gain (loss) on disposal of capital assets(375) - -
Interest expense(49,075) (112,713) -
Total Non-operating Revenue (Expenses)
(87,546)(42,461) 1,087
Income before contributions and transfers
(393,864)137,387 (136,876)
Capital contributions620,464 791,435 29,775
Transfers in- - -
Transfers out(499,629) (1,305) (2,144,321)
Change in net assets258,222 396,266 (2,251,422)
Total net assets - beginning
31,998,1726,624,6845,459,464
Total net assets - ending
$ 7,020,95032,256,394$ 3,208,042$
See Notes to Financial Statements.
24
Governmental
Activities
Total Enterprise Internal Service
FundsFund
$ 5,969,1109,865,393$
5,969,1109,865,393
829,4023,235,767
294,685383,736
-1,006,229
--
5,301,6702,952,367
741,8142,551,727
7,167,57110,129,826
(1,198,461)(264,433)
23,16433,243
60-
(51,053)(375)
-(161,788)
(27,829)(128,920)
(1,226,290)(393,353)
-1,441,674
897,775-
(13,236)(2,645,255)
(341,751)(1,596,934)
12,104,04844,082,320
$ 11,762,29742,485,386$
25
CITY OF LA PORTE
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended September 30, 2011
Business-type Activities
Other
Enterprise
Utility FundLPAWAFunds
Cash Flows from Operating Activities
Receipts from customers and users8,408,262$ 1,196,894$ 56,429$
Disbursed for personnel services(3,127,422) - -
Disbursed for goods and services(3,004,045) (1,135,279) (24,671)
Net cash provided (used) by operating activities
61,6152,276,795 31,758
Cash Flows from Noncapital Financing Activities
Transfers from other funds- - -
Transfers to other funds(499,629) (1,305) (2,144,321)
Net cash provided by (used by) noncapital financing activities
(1,305)(499,629) (2,144,321)
Cash Flows from Captial and Related Financing Activities
Proceeds from the sale of equipment- - -
Disposition of assets to governmental activities- - 2,868,809
Disposition of liabilities to governmental activities- - (696,871)
Capital grants and contributions620,464 - -
Principal payments on debt(262,500) (604,356) -
Interest paid on debt(53,996) (113,444) -
Acquisition and construction of capital assets, net of dispositions(1,506,907) - (53,255)
Payments received from participants for debt service- 689,796 -
Payments received from participants for capital recovery - 101,639 -
Net cash used by capital and related financing activities
73,635(1,202,939) 2,118,683
Cash Flows from Investing Activities
Purchase of investments(328,675) (108,199) (31,805)
Interest received6,508 24,876 1,031
Net cash provided by (used by) investing activities
(83,323)(322,167) (30,774)
Net increase in cash and equivalents252,060 50,622 (24,654)
Cash and equivalents, beginning of year
1,261,4881,182,011 256,696
Cash and equivalents, at end of year
$ 1,312,1101,434,071$ 232,042$
Unrestricted cash and equivalents929,879$ 622,948$ 232,042$
Restricted cash and equivalents504,192 689,162 -
$ 1,312,1101,434,071$ 232,042$
Reconciliation of operating income to net cash provided by
operating activities
Operating income (loss)179,848$ (306,318)$ (137,963)$
Adjustments to reconcile operating income to net cash provided by
operating activities:
Depreciation1,924,447 460,877 166,403
(Increase) decrease in accounts receivable(157,848) (49,292) -
(Increase) decrease in inventory- - -
(Increase) decrease in prepaid expenses- 11,001 -
Increase (decrease) in accounts payable45,194 (54,653) 3,318
Increase (decrease) in salaries payable17,869 - -
Increase (decrease) in other current liabilities5,605 - -
Increase (decrease) in customer utility deposits3,332 - -
Increase (decrease) in compensated absences3,692 - -
Increase (decrease) in net pension and OPEB obligation 254,656 - -
Net cash provided by operating activities
$ 61,6152,276,795$ 31,758$
See Notes to Financial Statements.
26
Governmental
Activities
Total Enterprise Internal Service
FundsFund
$ 5,968,3619,661,585$
(846,248)(3,127,422)
(5,527,198)(4,163,995)
(405,085)2,370,168
-
-
897,775-
(13,236)(2,645,255)
884,539(2,645,255)
51,033-
-2,868,809
-(696,871)
-620,464
-(866,856)
-(167,440)
(1,750,194)(1,560,162)
-689,796
-101,639
(1,699,161)989,379
-
-
(264,870)(468,679)
22,87132,415
(241,999)(436,264)
-
(1,461,706)278,028
5,888,6892,700,195
$ 4,426,9832,978,223$
$ 4,426,9831,784,869$
-1,193,354
$ 4,426,9832,978,223$
$ (1,198,461)(264,433)$
741,8142,551,727
(749)(207,140)
(3)-
74,89411,001
(5,734)(6,141)
(7,558)17,869
(9,288)5,605
-3,332
-3,692
-254,656
$ (405,085)2,370,168$
27
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS
Note 1 - Summary of Significant Accounting Policies
The City of La Porte, Texas (the "City"), was incorporated under the laws of the State of Texas on
August 10, 1892. The City operates under a “Council- Manager” form of government and provides the
following services as authorized by its charter: public safety, development services, public health and
welfare, culture and recreation and waterworks.
The accounting and reporting policies of the City relating to the funds included in the accompanying
basic financial statements conform to U.S Generally accepted Accounting Principles (GAAP)
applicable to state and local governments which include the principles prescribed by the Governmental
Accounting Standards Board (GASB), the American Institute of Certified Public Accountants and the
Financial Accounting Standards Board. The more significant accounting policies of the City are
prescribed below.
A.
Reporting Entity
The City’s basic financial statements include the accounts of all City operations. The City, with its elected
governing body of mayor and eight council members, is considered a primary government. As required
by GAAP, the basic financial statements include the City and its component units, entities for which the
government is considered to be financially accountable. Blended component units, although legally
separate entities, are in substance, part of the government’s operations. All component units have been
included as blended component units because of the significance of their operational and financial
relationships with the City.
The La Porte Area Water Authority (the “Authority”) is governed by a five-member board appointed by
the City Council. Although it is a legally separate entity, the Authority provides services almost
exclusively for the City’s water operations, and is in substance a part of the City’s primary operations.
The Authority was created by the City to finance the operations involved in obtaining surface water
supplies and converting these supplies to potable water. This water is sold primarily to the City of La
Porte (86%) with the remainder being sold to other neighboring political subdivisions. The operations of
the Authority are reported as a proprietary fund type.
The Tax Increment Reinvestment Zone One (the “Zone”) is governed by a nine-member board appointed
by the City Council. The Zone provides benefits exclusively for the City through reinvestment financing
of ad valorem taxes, which are utilized for capital improvements for the City of La Porte. The Zone is
presented as a governmental fund type.
The Section 4B Sales Tax Corporation provides services that exclusively benefit the City of La Porte and
is governed by a seven-member board appointed by City Council. The Section 4B Sales Tax Corporation
is presented as a governmental fund type.
Complete financial statements for each of the individual component units may be obtained
through the City of La Porte.
28
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 1 - Summary of Significant Accounting Policies (continued)
B.Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Assets and the Statement of
Changes in Net Assets) report information about the City as a whole. These statements include all
activities of the primary government and its component units. For the most part the effect of interfund
activity has been removed from these statements. Governmental activities, which normally are supported
by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely
to a significant extent on fees and charges for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or
segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. 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 that are restricted to meeting the operational or capital
requirements of a particular segment. Taxes and other items not properly included among program
revenues are reported instead as general revenues.
Private-sector standards for accounting and financial reporting issued prior to December 1, 1989,
generally are followed in both the government-wide and proprietary fund financial statements to the
extent that those standards do not conflict with or contradict guidance of the Government Accounting
Standards Board. The City has elected not to follow private sector guidance issued subsequent to that
date.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services
or privileges provided, 2) operating grants and contributions and 3) capital grants and contributions,
including special assessments. Internally dedicated resources are reported as general revenues rather than
program revenues. Likewise, general revenues include all taxes.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use
restricted resources first, then unrestricted resources as they are needed.
GASB Statement No. 34 established standards for external financial reporting for all state and local
governmental entities, which includes a Statement of Net Assets and a Statement of Activities. It requires
the reclassification of net assets into three components – invested in capital assets, net of related debt;
restricted; and unrestricted. These classifications are as follows:
Invested in capital assets, net of related debt – This component of net assets consists of
capital assets, including restricted capital assets, net of accumulated depreciation and reduced
by the outstanding balances of any bonds, notes or other borrowings.
Restricted – This component of net assets consists of constraints placed on net asset use
through external constraints imposed by creditors, grantors, contributors, or laws or
regulations of other governments or constraints imposed by law through contractual
provisions or enabling legislation.
Unrestricted net assets – This component of net assets consists of net assets that do not meet
the definition of “restricted” or “invested in capital assets, net of related debt.”
Separate financial statements are provided for governmental funds and proprietary funds. Major
individual governmental funds and major individual enterprise funds are reported as separate columns in
the fund financial statements.
29
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 1 - Summary of Significant Accounting Policies (continued)
C.Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are
recognized 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.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose the
government considers revenues to be available if they are collected within 60 days of the end of the
current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures, as well as expenditures related to compensated absences
and claims and judgments, are recorded only when payment is due.
General property taxes are recorded as receivables when levied and as revenue in the period for which
they were levied and become available. Property taxes receivables have been recorded as deferred
revenues at year-end. Property taxes collected within 60 days subsequent to September 30, 2011, have not
been recorded as revenue as the amount is not considered material. Franchise taxes and sales taxes
relating to underlying transactions that occurred prior to September 30, 2011, have been recorded as
receivables and revenue. Licenses and permits, and fines and forfeitures are not susceptible to accrual
since they are not measurable until received. Revenue on federal and state cost-reimbursement grants is
accrued when the related expenditures are incurred. Interest is recorded when earned.
The City reports the following major governmental funds:
TheGeneral Fund is used to account for all financial transactions that are not accounted for in another
fund. The principal sources of revenue of the General Fund are property taxes, sales and use taxes,
franchise taxes, licenses and permits, and fines and forfeitures. Expenditures are for general government,
public safety, public works and other community services.
TheDebt Service Fund is used to account for the payment of interest and principal on all general long-
term debt of the City except for capital leases which are accounted for in the General Fund. The primary
source of revenue for the Debt Service Fund is general property taxes.
TheCapital Projects Fund is used to account for projects that are generally small in nature and affect the
general operation of the City.
30
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 1 - Summary of Significant Accounting Policies (continued)
The City reports the following major proprietary funds:
TheUtility Enterprise Fund is used to account for operations of the water and sewer services to
the residents of the City. All activities necessary to provide such services are accounted for in this
fund, but not limited to administration, operations and maintenance of the water and sewer system
and billing and collection activities. The fund also accounts for the accumulation of resources for,
and the payment of, long-term debt principal and interest for water and sewer debt. All costs are
financed through charges to utility customers with rates reviewed regularly and adjusted if
necessary to ensure integrity of the fund.
La Porte Area Water Authority is used to account for revenues and expenses related to obtaining
raw surface water and converting it to potable water
Additionally, the government reports the Internal Service Funds which are used to account for the Motor
Pool, Technology and Insurance services provided to other departments of the City on a cost
reimbursement basis.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with the proprietary fund’s principal ongoing operations. The principal operating revenues of
the enterprise funds are charges to customers for sales and services. Operational expenses for the
enterprise funds and internal service fund include the cost of sales and services, administrative expenses
and depreciation on capital assets. All revenues not meeting this definition are reported as non-operating
revenues and expenses.
D.Assets, Liabilities and Net Assets or Fund Balance
1.Cash and Cash Equivalents
Cash includes amounts in demand deposits, short-term investments which mature within ninety
days of the fiscal year end, and various petty cash funds. The short-term investments are stated at
cost or amortized cost, which approximate fair value. The short-term investments consist of
U.S.Treasury Bills and deposits in the Texas Local Government Pool (TexPool), the Local
Government Investment Cooperative (LOGIC) and Texas Short Term Asset Reserve Program
(TexStar) all of which have the general characteristics of a demand deposit account. For the purpose
of the statement of cash flows, Proprietary Fund types consider temporary investments with a
maturity of three months or less when purchased to be cash equivalents.
In accordance with Statement no. 31, the City reports all investments at fair value, except for
“money market investments” and “2a7-like pools”. Money market investments, which are short-
term highly liquid debt instruments that may include U.S. Treasury and agency obligations, are
reported at amortized costs. Investments positions in external investment pools that are operated
in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940, such as
TexPool, LOGIC and TexStar are reported using the pools’ share price.
31
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 1 - Summary of Significant Accounting Policies (continued)
2.Receivables
All receivables are reported at their gross value and, where appropriate, are reduced by the
estimated portion that is expected to be uncollectible.
3.Due to and from Other Funds
Interfund receivables and payables arise from interfund transactions and are recorded by all funds
affected in the period in which transactions are executed. These receivables and payables are, for
the most part, eliminated from the Government-Wide Statement of Net Assets and are recorded as
“due from other funds” or “due to other funds” in the fund financial statements.
4.Inventory and Prepaid Items
Inventories are valued at costs using the first in/first out (FIFO) method. The costs of
governmental fund type inventories are recorded as expenditures when consumed rather than
when purchased. A portion of the fund balance is classified as non-spendable to reflect minimum
inventory quantities considered necessary for the District’s continuing operations. Certain
payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items.
5.Capital Assets
Capital assets are reported in the applicable governmental or business-type activities column in
the government-wide financial statements. The government defines capital assets as assets with
an initial, individual cost of $5,000 or greater and an estimated useful life in excess of one year.
All purchased Capital assets are valued at cost where historical records exist. Donated Capital
assets are valued at their estimated fair value on the date received.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially
extend asset lives are not capitalized. Improvements, including public domain and equipment are
capitalized and Proprietary Fund Capital assets are depreciated over the remaining useful lives of
the related Capital assets using the straight line method, as applicable.
Estimated
Asset Description Useful Life
Buildings 20 years
Building improvements 20 years
Infrastructure 20-30 years
Vehicles 4-10 years
Machinery and equipment 4-10 years
Water and sewer systems 20-40 years
32
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 1 - Summary of Significant Accounting Policies (continued)
6.Compensated Employee Absences
The City’s employees earn vacation and sick leave, which may either be taken or accumulated, up
to a certain amount, until paid upon termination or retirement. For all funds, this liability reflects
amounts attributable to cumulative employee services already rendered, where the payment is
probable and can be reasonably estimated. The current and long-term portion of the governmental
fund type liabilities are recorded in the Government-Wide Statement of Net Assets. The
Proprietary fund type liability is recorded as a liability in the individual proprietary funds since
payment will be made from the resources of these funds. Also, for the governmental activities,
compensated absences are generally liquidated by the general fund.
Policies relating to the accrual and payment of these benefits are as follows:
Vacation – Employees earn from 10-25 days of vacation per year. Upon separation,
employees are paid for all accumulated vacation leave (up to one and one half times their
annual accrual rate).
Sick leave – Full time 8 hour employees accrue 3.70 hours per pay period. Full time 24
hour employees accrue 5.91 hours per pay period and civil service employees accrue 15
days per calendar year. The maximum sick leave time which may be accumulated by any
employee shall be 90 days for regular full time employees. For 24 hour shift personnel, the
maximum accrual is 1,152 hours. Civil service employees may accrue unlimited sick leave.
7.General Property Taxes
All taxes due the City on real or personal property are payable at the Office of the City Assessor-
Collector and may be paid at any time after the tax rolls for the year have been completed and
approved, which is October 1, or as soon thereafter as practicable. Taxes are due upon receipt and
all taxes not paid prior to February 1 are deemed delinquent and are subject to such penalty and
interest set forth by the Property Tax Code. All property located within the City limits on the first
day of January of each year are charged with a special lien in favor of the City from such date for
taxes due thereon.
8.Debt Service
The ad valorem tax rate is allocated each year between the General Fund and the Debt Service
Fund. The full amount estimated to be required for debt service on the general obligation debt is
provided by the debt service tax together with interest earned in the Debt Service Fund.
9.Restricted Assets
The City applies restricted resources when an expense is incurred for purposes for which both
restricted and unrestricted net assets are available.
33
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 1 - Summary of Significant Accounting Policies (continued)
10.Fund Balance
In fiscal year 2011, the City implemented GASB No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions. In the fund financial statements, governmental funds
report the following classifications of fund balance:
Nonspendable – includes amounts that cannot be spent because they are either not spendable
in form or are legally or contractually required to be maintained intact. All amounts reported
as nonspendable at September 30, 2011, by the City are nonspendable in form. The City has
not reported any amounts that are legally or contractually required to be maintained intact.
Restricted – includes amounts restricted by external sources (creditors, laws of other
governments, etc.) or by constitutional provision or enabling legislation.
Committed – includes amounts that can only be used for specific purposes. Fund balances are
committed by formal action of the City Council. Amendments or modifications to the
committed fund balance must be approved by formal action of the City Council. Formal
action shall be by resolution or majority vote. Committed fund balance will not lapse at year
end.
Assigned – includes amounts that the City intends to use for a specific purpose, but do not
meet the definition of restricted or committed fund balance. Under City Council’s adopted
policy, amounts may be assigned by the City Manager under the authorization of the Fiscal
Affairs Committee.
Unassigned – includes amounts that have not been assigned to other funds or restricted,
committed or assigned to a specific purpose within the General Fund. The General Fund is
the only fund that is allowed to have a positive amount reported in this category.
For the purposes of fund balance classification, expenditures incurred in the unrestricted fund
balances shall be reduced first from the committed fund balance, then from the assigned fund
balance and lastly, the unassigned fund balance. City council intends to maintain a minimum fund
balance of 25% of the City’s General Fund operating expenditures.
11.Revenues and Expenditures/Expenses
In the fund financial statements revenues for governmental funds are recorded when they are
determined to be both measurable and available. Generally, tax revenues, fees and non-tax
revenues are recognized when received. Grants from other governments are recognized when
qualifying expenditures are incurred. Expenditures for governmental funds are recorded when the
related liability is incurred.
Revenues and expenses in the Government-Wide Statement of Activities are recognized in
essentially the same manner as used in commercial accounting.
12.Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the amounts reported in the financial statements. Actual
amounts could vary from those estimates.
34
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 1 - Summary of Significant Accounting Policies (continued)
13.Budgetary Information
Annual budgets are adopted on a basis consistent with GAAP. Annual appropriated budgets are
adopted for the general, special revenue funds and debt service funds. All annual appropriations
lapse at fiscal year-end. Project length financial plans are adopted for all capital projects funds
and are revised annually.
Note 2 - Deposits (Cash) and Investments
Authorization for Deposits and Investments
The Texas Public Funds Investment Act (PFIA), as prescribed in Chapter 2256 of the Texas Government
Code, regulates deposits and investment transactions of the City.
In accordance with applicable statutes, the City has a depository contract with an area bank (depository)
providing for interest rates to be earned on deposited funds and for banking charges the City incurs for
banking services received. The City may place funds with the depository in interest and non-interest
bearing accounts. State law provides that collateral pledged as security for bank deposits must have a
market value of not less than the amount of the deposits and must consist of: (1) obligations of the United
States or its agencies and instrumentalities; (2) direct obligations of the State of Texas or its agencies; (3)
other obligations, the principal and interest on which are unconditionally guaranteed or insured by the
State of Texas; and/or (4) obligations of states, agencies, counties, cities, and other political subdivisions
of any state having been rated as investment quality by a nationally recognized investment rating firm and
having received a rating of not less than A or its equivalent. City policy requires the collateralization level
to be at least 102% of market value of principal and accrued interest.
The Council has adopted a written investment policy regarding the investment of City funds as required
by the Public Funds Investment Act (Chapter 2256, Texas Government Code). The investments of the
City are in compliance with the City’s investment policy. The City’s investment policy is more restrictive
than the PFIA requires. It is the City’s policy to restrict its direct investments to obligations of the U.S.
Government or U.S. Government Agencies, fully collateralized certificates of deposit, bankers’
acceptances, mutual funds, repurchase agreements and local government investment pools. The
maximum maturity allowed is five years from date of purchase. The City’s investment policy does not
allow investments in commercial paper, collateralized mortgage obligations, floating rate investments or
swaps.
35
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 2 - Deposits (Cash) and Investments (continued)
Deposit and Investment Amounts
The City's cash and investments are classified as: cash and cash equivalents and restricted cash and
investments. The cash and cash equivalents include cash on hand, fully collateralized deposits with
financial institutions and in a privately-managed public funds investment pool account (TexPool, TexStar
and LOGIC). The restricted cash and investments are assets restricted for specific use.
The following schedule shows the City’s recorded cash and investments at year-end:
Total Fair Value
Governmental
Internal Service Business Type
Funds
FundsActivities
Cash deposits2,722,011$ 428,118$ 316,366$
Pooled funds27,653,691 4,457,059 3,052,417
Deposit and Investments14,071,9731,768,7342,303,951
$ 6,653,91144,447,675$ 5,672,734$
Investment Risks
Interest Rate Risk
At year-end, the City had the following investments subject to interest rate risk disclosure, under U.S.
GAAP, by investment type:
Weighted
Average
Total Fair Maturity
Value(months)
Investment Type
Public funds investment pools35,163,167$ 2.8
Federal Home Loan Mortgage Corporation (FHLMC)7,003,349 16.0
Federal National Mortgage Association (FNMA)1,500,446 24.9
Federal Home Loan Bank (FHLB)1,006,699 18.9
Certificates of deposit8,634,164 3.3
Total fair value53,307,825$
Portfolio weighted average maturity
6.2
The City’s investment policy specifies the maximum stated maturity from the date of purchase for any
individual investments may not exceed 5 years and the maximum dollar weighted average maturity for
the pooled fund group (investment portfolio) may not exceed 2 years.
Concentration of Credit Risk
The policy does require investments to be staggered in a way that protects interest income from the
volatility of interest rates. The policy has not established limitations on percentages of the total portfolio
that may be invested in securities other than the repurchase agreements, Treasury bills and notes or
insured and collateralized Certificates of Deposits.
Total Fair Percentage of
Investment TypeValueTotal Portfolio
Investment Pools35,163,167$ 66%
Certificates of Deposit8,634,16416%
US Agency Securities9,510,49418%
Total
100%
$ 53,307,825
36
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 2 - Deposits (Cash) and Investments (continued)
Credit Risk
The primary objective of the City’s adopted Investment Policy is the safety of principal. Credit risk within
the City’s portfolio among authorized investments approved by the City’s adopted Investment Policy is
represented in U.S. Treasury Bills, Notes or Bonds, and other securities which are guaranteed as to
principal and interest by the full faith and credit of the United States of America, collateralized or fully
insured certificates of deposits, FDIC insured banks in the State of Texas, repurchase agreements if
secured by U.S. Treasury Bills, Notes or Bonds and Public Funds Investment Pools.
Note 3 - Property Tax
The appraisal of property within the City is the responsibility of the Harris County Appraisal District (the
“Appraisal District”). The Appraisal District is required under the Property Tax Code to appraise all
property within the county on the basis of 100% of its market value. The value of real property within the
Appraisal District must be reviewed every five years; however, the City may, at its own expense, require
annual reviews of appraised values. The City may challenge appraised values established by the Appraisal
District through various appeals and, if necessary, take legal action. Under this legislation, the City
continues to set tax rates on City property. However, if the effective tax rate, excluding tax rates for
repayment of general obligation bonds and other contractual obligations, adjusted for new improvements,
exceeds the effective tax rate and the rollback rate tax rate, qualified voters of the City may petition for an
election to determine whether to limit the tax rate to no more than the rollback tax rate.
The City’s property taxes are levied annually in October on the basis of the Appraisal District’s assessed
values as of January 1 of that calendar year. Appraised values are established by the Appraisal District at
market value, assessed at 100% of appraised value and certified by the Harris County Appraisal District
Board of Review. The City’s property taxes are billed and collected by the City’s Tax Assessor/Collector.
Such taxes are applicable to the fiscal year in which they are levied and become delinquent with an
enforceable lien on property on February 1 of the current calendar year.
The City is permitted, by Article XI, Section 5, of the State of Texas Constitution and the City Charter, to
levy property taxes up to $2.50 per $100 of assessed valuation for general governmental services. Within
the $2.50 maximum levy, there is no legal limit upon the amount of property taxes, which can be levied
for debt service. The property tax rates to finance general governmental services and debt service for the
2010-11 tax year were $0.605 and $0.105, respectively, per $100 of assessed valuation. The 2011
assessed value and total tax levy as adjusted through September 30, 2011 were $2,329,926,727 and
$15,716,610 respectively.
The City has enacted an ordinance providing for the exemption of twenty percent (20%) of the assessed
value of residential homesteads plus an additional $60,000 for persons 65 years of age or older for
property taxes. An exemption of $60,000 is allowed for disabled persons on homesteads and up to
$12,000 is allowed for disabled veterans on any one piece of property. Additionally, the market value of
agricultural land is reduced to agricultural value for purposes of the City’s tax levy calculation.
37
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 4 - Receivables
Amounts recorded as receivables as of for the government’s individual major and non-major funds,
including the applicable allowance for uncollectible accounts, are as follows:
Debt Capital
All Other
Service Projects Internal
FundsTotal
General FundFundFundUtility Fund LPAWAService Funds
Receivables
Taxes1,797,809$ 163,912$ -$ -$ -$ -$ 590,179$ 2,551,900$
Intergovernmental 119,927 639,774 759,701
Accounts3,137,599 - - 1,069,897 217,108 - - 4,424,604
Interest5,732 828 2,414 709 556 1,823 1,691 13,753
Other- - - 869 - - 84,215 85,084
Allowance for
uncollectibles(1,187,956) (116,889) - (24,005) - - - (1,328,850)
$ 47,8513,753,184$ 2,414$ 1,047,470$ 217,664$ 121,750$ 1,315,859$ 6,506,192$
Property taxes are levied by October 1 in conformity with Subtitle E, Texas Property Tax Code. Taxes are
due on receipt of the tax bill and are delinquent if not paid before February 1 of the year following the
year in which imposed. On January 1 of each year, a tax lien attaches to property to secure the payment of
all taxes, penalties, and interest ultimately imposed. The Harris County Central Appraisal District
("HCCAD") establishes appraised values. Taxes are levied by the City Council based on the appraised
values and operating needs of the City.
Governmental funds report deferred revenue in connection with receivables for revenues that are not
considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year,
the various components of deferred revenue reported in the governmental funds were as follows:
UnavailableUnearned
Delinquent property taxes receivable - general fund $ 250,939 -$
Delinquent property taxes receivable - debt service fund 40,161 -
Other taxes - aggregate other funds 68,157 -
Municipal fines and forfeitures 547,276 -
EMS - general fund 909,806 -
Other deferred - general fund 679,521 -
Grants and revenues prior to meeting all eligibility requirements- 1,051
Total Deferred Revenue for Governmental Funds $ 2,495,860 $ 1,051
38
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 5 - Capital Assets
A summary of activity for capital assets capitalized by the City for the year ended September 30, 2011
follows:
39
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 5 - Capital Assets (continued)
Depreciation was charged to functions of the primary government as follows:
General government603,586$
Public safety1,044,718
Public works1,699,198
Parks and recreation900,018
Internal Service funds741,814
Total Governmental Activity
$ 4,989,334
20,094
Water and sewer2,385,324$
Airport166,403
Total Business-Type Activity
$ 2,551,727
September 30, 2011
Construction contract commitments outstanding as of are as follows:
Governmental Activities
Total In Remaining
Progress Commitment
Fund
Hotel/Motel Fund52,315 -
TIRZ Fund201,170 -
General CIP Fund5,993,161 1,646,553
1998 GO Bonds475,452 969,051
2006 GO's97,986 -
Totals6,820,084$ 2,615,604$
Business-Type Activities
Total In Remaining
Progress Commitment
Fund
Utility Fund3,493,441$ 976,306$
2004 CO's 41,391 343,003
2005 CO's- 150,980
2006 CO's1,781,326 -
Totals5,316,158$ 1,470,289$
40
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 6 - Long-Term Debt
The City issues a variety of long-term debt instruments in order to acquire and/or construct major capital
facilities and equipment for governmental and business type activities. These instruments include general
obligation bonds, certificates of obligation and revenue bonds. Future ad valorem tax revenues, water and
sewer system revenues or liens on property and equipment secure these debt obligations.
The following is a summary of the terms of obligations, general obligation bonds, certificates of
September 30, 2011
obligations and revenue bonds outstanding as of :
Governmental Business-type
2002 Limited Tax Bonds
due in annual installments of $270,000
through March 15,2025; interest at 4.25% to 5%; $5,400,000
issued for wastewater treatment plant and fire station improvements.3,780,000$ -$
2004 Certificates of Obligation
due in annual installments through March 15, 2025; interest at 3.6% to 4.45%
$7,000,000 issued for paving and drainage improvements, street extension
and land acquisition.5,630,000 -
2005 General Obligation Serial Bonds
due in annual payments through March 15, 2025; interest at 3.75% to 4.25%
$7,675,000 issued to construct a police facility.6,000,000 -
2005 Certificates of Obligation
due in annual payments through March 15, 2015; interest at 2.8% to 3.8%
$1,800,000 issued for water and sewer improvements and fire truck.1,400,000 -
2006 Public Property Finance contractual Obligation
due in annual payments through January 25,2016; interest at 3.74%
$2,625,000 issued for automated meter replacement program.- 1,312,500
2006 General Obligation Serial Bonds
due in annual payments through March 15, 2025; interest at 3.625% to 4.25%
$1,200,000 issued for park improvements.1,010,000 -
2006 Certificates of Obligation
due in annual payments through March 15, 2025; interest at 3.75% to 4.3%
$5,765,000 issued for police facility, sports and water and sewer improvements.4,855,000 -
2007 Certificates of Obligation
due in annual payments through March 15, 2029; interest at 4.00% to 4.25%
$8,075,000 issued for wastewater treatment plant improvements, sports
complex and golf cart path improvements.7,455,000 -
2010 Certificates of Obligation
due in annual payments through March 15, 2026; interest at 3.00% to 4.00%
$6,265,000 issued for street, drainage and park improvements.6,265,000 -
2010 General Obligation Refunding Bonds
due in annual payments through March 15, 2020; interest at 2.00% to 4.00%
$4,295,000 issued to refund previous debt.3,930,000 -
2010 LPAWA Contract Revenue Refunding Bonds
due in annual payments through March 15, 2017; interest at 2.50% to 4.00%
$4,085,000 issued to refund previous debt.- 3,500,000
Total Bonds Payable
$ 4,812,50040,325,000$
41
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 6 - Long-Term Debt
September 30, 2011
During the year ended , the following changes occurred in long-term liabilities:
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.
Compensated absences generally are paid by the General Fund for the governmental activities. Net
pension obligation is 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.
General Obligation Bonds and Certificates of Obligations
General Obligation Bonds are direct obligations issued on a pledge of the general taxing power for the
payment of the debt obligations of the City. General Obligations Bonds and Certificates of Obligation
require the City to compute, at the time other taxes are levied, the rate of tax required to provide (in each
years bonds are outstanding) a fund to pay interest and principal at maturity. The City is in compliance
with this requirement.
42
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 6 - Long-Term Debt (continued)
Revenue Bonds
Water and Sewer Revenue Bonds constitute special obligations of the City solely secured by a lien on and
pledge of the net revenues of the water and sewer system. The Revenue Bonds are collateralized by the
revenue of the water and sewer system and the various special funds established by the bond ordinances.
The ordinances provide that the revenue of the system is to be used first to pay operating and maintenance
expenses of the system and second to establish and maintain the Revenue Bond funds. Remaining
revenues may then be used for any lawful purpose. The ordinances also contain provisions, which, among
other items, restrict the issuance of additional Revenue Bonds unless the special funds noted above
contain the required amounts and certain financial ratios are met. The City is in compliance with all
significant financial requirements as of September 30, 2011.
The annual aggregate maturities for each bond type for the years subsequent to September 30, 2011 are as
follows:
General Obligation BondsCertificates of Obligation
Governmental Activities Governmental Activities
Fiscal YearPrincipalInterestPrincipalInterest
20121,045,000$ 567,149$ 1,125,000$ 1,139,437$
20131,045,000 539,887 1,245,000 1,043,029
20141,165,000 504,849 1,320,000 1,017,699
20151,175,000 471,172 1,385,000 995,164
20161,185,000 435,681 1,445,000 965,646
20171,205,000 398,824 1,500,000 939,113
20181,215,000 354,974 1,575,000 915,480
20191,230,000 313,680 1,650,000 882,446
20201,120,000 267,944 1,725,000 849,313
2021820,000 234,938 1,810,000 807,909
2022845,000 207,710 1,895,000 768,365
2023865,000 174,229 1,975,000 721,526
2024890,000 144,348 2,065,000 677,146
2025915,000 113,300 2,155,000 178,786
2026- - 1,050,000 113,092
2027- - 540,000 70,130
2028- - 560,000 36,330
2029- - 585,000 12,285
$ 4,728,68414,720,000$ 25,605,000$ 12,132,896$
43
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 6 - Long-Term Debt (continued)
Contract Revenue Bonds Public Property Finance CO
Business-Type Activities Business-Type Activities
Fiscal YearPrincipalInterestPrincipalInterest
2012605,000$ 88,150$ 262,500$ 44,179$
2013625,000 73,556 262,500 34,361
2014630,000 58,650 262,500 24,544
2015650,000 41,838 262,500 14,726
2016670,000 22,850 262,500 4,909
2017320,000 6,400 - -
$ 291,4443,500,000$ 1,312,500$ 122,719$
Note 7 - Interfund Activities
Transfers between the primary government funds during the year were as follows:
Interfund receivables at year end were as follows:
44
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 8 - Employee Retirement System
Plan Description
The City provides pension benefits for all of its eligible employees, except firefighters, through a non-
traditional, joint contributory, hybrid defined benefit plan (the “Plan”) in the statewide Texas
Municipal Retirement System (TMRS), an agent multi-employer public employee retirement system.
The plan provisions that have been adopted by the City are within the options available in the
governing statutes of TMRS.
TMRS issues a publicly available comprehensive annual financial report that includes financial
statements and required supplementary information (RSI) for TMRS. The report provides detailed
explanation of the contributions, benefits and actuarial methods and assumptions used by the system.
This report may be obtained by writing TMRS, P.O. Box 149153, Austin, TX 78714-9153 or by
calling 800-924-8677. The report is also available on the TMRS website at www.TMRS.com.
The City provides pension benefits to its volunteer firemen through the Texas Statewide Emergency
Services Personnel Retirement Fund, one of 150 administered by the Fire Fighters’ Pension
Commissioner, a cost sharing multiple employer pension system. That report may be obtained by
writing to the Firefighters Pension Commission, P.O. Box 12577, Austin, TX 78711. Both plans are
more fully described below.
Texas Municipal Retirement System
Contributions and Annual Pension Cost
Under the state law governing TMRS, the contribution rate for each City is determined annually by the
actuary, using Projected Unit Credit actuarial cost method. This rate consist of the normal cost
contribution rate and the prior service cost contribution rate, which is calculated to be a level percent of
payroll from year to year. The normal cost contribution rate finances the portion of an active member’s
projected benefit allocated annually; the prior service contribution rate amortizes the unfunded
(overfunded) actuarial liability (asset) over the applicable period for the city. Both the normal cost and
prior service contribution rates include recognition of the projected impact of annually repeating benefits,
such as Updated Service Credits and Annuity Increases.
45
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 8 - Employee Retirement System (continued)
Texas Municipal Retirement System (continued)
Contributions and Annual Pension Cost (continued)
The City contributes to the TMRS plan at an actuarially determined rate. Both the employees and the City
make contributions monthly. Since the City needs to know its contribution rate in advance for budgetary
purposes, there is a one-year delay between the actuarial valuation that serves as the basis for the rate and
the calendar year when the rate goes into effect. The annual pension cost and net pension obligation
(asset) for the current year is calculated as follows:
2011
Annual Required Contribution (ARC)3,933,822$
Interest on net pension obligation (NPO)113,334
Adjustment to ARC(93,771)
Annual Pension Cost (APC)3,953,385
Contributions(3,150,061)
Change in NPO803,324
NPO, beginning of the year1,511,120
NPO, ending of the year
$2,314,444
Percentage of APC contributed 79.7%
Actuarial Cost MethodProjected Unit Credit
Amortization MethodLevel Percent of Payroll
Remaining Amortization Period27.1 Years - Closed Period
Asset Valuation Method10-year Smoothed Market
Actuarial Assumptions:
Investment Rate of Return7.0%
Projected Salary IncreasesVaries by age and service
Includes Inflation At3.0%
Cost-of-Living Adjustments2.1%
Funded Status
The funded status of the Plan as of December 31, 2010
The schedule of funding progress, presented as required supplementary information following the
notes to the financial statements, presents multi-year trend information about whether the actuarial
value of the plan assets is increasing or decreasing over time relative to the actuarial accrued liability.
46
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 8 - Employee Retirement System (continued)
Three-year Trend Information
201120102009
Annual Required Contribution (ARC)3,933,822$ 3,712,311$ 3,170,387$
Interest on net pension obligation (NPO)113,334 48,178 -
Adjustment to ARC(93,771) (39,226) -
Annual Pension Cost (APC)3,953,385 3,721,263 3,170,387
Contributions(3,150,061) (2,852,535) (2,527,995)
Change in NPO803,324 868,728 642,392
NPO, beginning of the year1,511,120 642,392 -
NPO, ending of the year
$ 1,511,1202,314,444$ 642,392$
Percentage of APC contributed 79.7%76.7%79.7%
Texas Statewide Emergency Services Personnel Retirement Fund
Summary of Significant Accounting Policies and Plan Asset Matters
The Texas Statewide Emergency Services Personnel Retirement Fund financial statements are prepared
using the accrual basis of accounting. The Fund’s fiscal year is from September 1 through the following
August 31. Contributions are recognized as revenues in the period in which they are due to the Fund. No
contributions applicable to the H.B. 258 Texas Local Fire Fighters Retirement Act (TLFFRA) are
included herein.
The Texas Statewide Emergency Services Personnel Retirement Fund investments are reported at a
smoothed market-related value.
The Fire Fighters’ Pension Commission is the administrator of the Texas Statewide Emergency Services
Personnel Retirement Fund, a cost sharing multiple employer pension system established and
administered by the State of Texas to provide pension benefits for emergency services personnel who
serve without monetary remuneration. The Texas Statewide Emergency Services Personnel Retirement
Fund is considered a component unit of the State of Texas financial reporting entity and is included in the
State’s financial reports as a pension trust fund. At August 31, 2008 there were 186 member departments
participating in the pension system. The following table summarizes the pension system membership as
of August 31, 2008:
Retirees and beneficiaries currently receiving benefits1,939
Terminated members entitled to benefits but not yet receiving those1,975
Current active members (vested and non-vested)4,340
th
The pension system was created by Senate Bill 411, 65th Legislature, Regular Session (1977). The 79
Legislature, Regular Session (2005), recodified the provisions and gave the TESRS Board of Trustees
authority to establish vesting requirements, contributions levels, benefit formulas and eligibility
requirements by board rule. The benefit provisions include retirement benefits as well as death and
disability benefits. Member are 505 vested after the tenth year of service, with the vesting percent
increasing 10% for each of the next five years of service so that a member becomes 100% vested with 15
years of service.
47
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 8 - Employee Retirement System (continued)
Texas Statewide Emergency Services Personnel Retirement Fund (continued)
Summary of Significant Accounting Policies and Plan Asset Matters (continued)
Upon reaching age 55, each vested member may retire and receive a monthly pension equal to his vested
percentage multiplied by six times the governing body’s average monthly contribution over the member’s
years of qualified service. For years of service in excess of 15 years, this monthly benefit is increased at
the rate of 6.2 % compounded annually.
On and off-duty death benefits and on-duty disability benefits are dependent on whether or not the
member was engaged in the performance of duties at the time of death or disability. Death benefits
include a lump sum amount and continuing monthly payments to a member’s surviving spouse and
dependent children.
Funding Policy
Contribution provisions were established by S.B. 411, 65th Legislative, Regular Session (1977) and were
amended by board rule in 2006. No contributions are required by individual members of participating
departments. The governing bodies of participating department members are required to contribute at
least the minimum prescribed amount per month for each active member. Additional contributions may
be made by a governing body to pay for granting credit for service before the department began
participating in TESRS (prior service). The State may also be required to make annual contributions up to
a limited amount to make TESRS actuarially sound.
Annual Required Contribution
The contribution requirement per active emergency services personnel member per month is not actually
determined. Rather, the minimum contribution provisions were set by board rule. For the fiscal year
ending August 31, 2008, total contributions (dues and prior service) of $2,439,339 were paid into TESRS
by the political subdivision and served by the member volunteer emergency services personnel. In
addition, the state appropriated $8,800,000 for the fiscal year ending August 31, 2008. Total contributions
made were greater than the contributions required by the state statute and were greater than the
contributions based on the August 31, 2006 actuarial valuation.
The purpose of the biennial actuarial valuations is to test the adequacy of the contribution arrangement
and determine if they are adequate to fund the benefits that are promised. The actuarial valuation as of
August 31, 2008 revealed the adequacy of the expected contributions (dues and prior service
contributions) together with the actual state appropriations for the fiscal year ending August 31, 2009
($415,405 to help pay for the Systems administrative expense) and with the assumed continuation of
legislative appropriations of (1) the maximum state contribution amount in future years for the System to
have a 30 year amortization period, and (2) approximately $425,000 each year to help pay for the
System’s administrative expenses. Expected contributions for the fiscal year ending August 31, 2010 are
equal to the contributions required. The City’s annual contributions for fiscal year ending September 30,
2011, 2010 and 2009 were $27,264, $24,528, and $19,872, respectively.
48
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 9 - Risk Management
The City is exposed to various risks of loss related to torts: theft of, damage to, and destruction of assets;
errors and omissions; and natural disasters. The City’s risk management program encompasses various
means of protecting the City against loss by obtaining property, casualty and liability coverage from
participation in a risk pool. The participation of the City in the risk pool is limited to the payment of
premiums. Further information regarding the pool is provided below. Settled claims have not exceeded
insurance coverage in any of the three previous fiscal years. There has not been any significant reduction in
insurance coverage from that of the previous year.
Health Insurance Benefits
The City self-insures a portion of health insurance benefits provided to employees. The City uses an
internal service fund to account for the revenues and expenses for providing health care coverage. Charges
are assessed to various City divisions based on their full-time employee count.
Activity during the year included:
Revenues
Charges to divisions3,577,849$
Interfund transfers497,775
Charges to employees436,049
Charges to retirees92,757
Cobra charges18,222
Insurance proceeds4,619
Miscellaneous revenue15
Interest revenue7,795
Total revenues4,635,081$
Expenses
Personnel expenses115,446$
Other expenses425,661
Claims administration223,393
Claims incurred4,212,096
Re-insurance premiums335,132
Total health services expenses5,311,728$
Included in the claims paid amount is $573,894 for incurred but not reported claims.
Settled claims have not exceeded insurance coverage in any of the previous four fiscal years. Estimates of
claims payable and of claims incurred but not reported at September 30, 2011, are reflected as liabilities
of the Internal Service Fund. Because actual claims liabilities depend on such complex factors as
inflation, changes in legal requirements and damage awards, the process used in computing claims
liability is an estimate based on historical claims. Analysis of claims liability for the fiscal years 2009,
2010 and 2011 are as follows:
Beginning of Current year Payments for End of year
year accrualestimatesclaimsaccrual
09/30/09677,000$ 2,308,775$ 2,537,775$ 448,000$
09/30/10448,000 3,703,943 3,652,943 499,000
09/30/11499,000 4,286,990 4,212,096 573,894
49
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 9 - Risk Management (continued)
Risk Pool
The City is a member of the Texas Municipal League Intergovernmental Risk Pool, an unincorporated
association of 1,860 political subdivisions of the State of Texas. The Pool contracts with a third party
administrator for administration, investigation and adjustment services in the handling of claims. All loss
contingencies, including claims incurred but not reported, if any, are recorded and accounted for by the
Pool.
Note 10 - Commitments and Contingencies
The City is a defendant in lawsuits. Although the outcome of the lawsuits is not presently determinable, it
is the opinion of the City's management that resolution of these matters will not have a materially adverse
effect on the financial condition of the City.
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.
The City participates in certain federal and state assisted grant programs. These programs are subject to
program compliance audits by the grantors or their representatives. Any liability for reimbursement which
may arise as the result of these audits is not believed to be material.
Note 11 - Post-employment Benefits
Plan Description. In addition to pension benefits described in Note 6, employees who retire from the City
and are eligible for pension benefits shall be provided medical coverage by the City to the extent and
subject to the conditions of such coverage that is provided to current employees of the City. The City
administers this single-employer defined benefit medical plan (“the Retiree Medical Plan”). The plan
provides medical coverage for eligible retirees and their dependents through the City’s self-health
insurance plan, which covers both active and retired members. Benefit provisions are established and
amended by City Council. The Retiree Medical Plan does not issue a publicly available financial report.
Funding Policy. This coverage for retired employees is provided at the option of City council through
adoption of the annual budget. The City funds these premiums in the same manner as it funds similar
premiums for current employees. Employees, who retired from the City before October 1, 1992, have
100% of their coverage paid for by the City. Employees who retired from the City in 1993 and up to
December 31, 1999, with 20 or more years of service have 100% of their coverage paid for by the City.
Prior to January 1, 2000, employees who have 15 years but less than 20 years of service are required to
pay for 10% of the cost and employees who have 10 years but less than 15 years of service are required to
pay for 20% of their costs. For employees who retire after January 1, 2000, the following applies:
Retiree
Retiree cost per
Years of service with the CityCostCity Costyear
At least 10 but less than 1555%45%3,300$
At least 15 but less than 20 25%75%1,500
At least 200%100%-
50
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 11 - Post-employment Benefits (continued)
Employees who are eligible for the post employment benefits are employees who retire after January 1,
2006 and who have a combination of years of service with the City of La Porte plus age totaling 80 and
who retire as a qualified annuitant under the Texas Municipal Retirement System; who retire in
accordance with the City of La Porte Employee Policies Handbook; who complete at least 20 years of
service with the City of La Porte are currently employed by the City of La Porte at the time of their
retirement. The total premium cost is the total annual dollar allocated by budget as approved by City
Council for the City of La Porte for health insurance for each employee, including employee and
employer contributions. The cost allocation shall be as follows:
Years of service with the CityRetiree CostCity Cost
at least 20 years60%+dependent premiums40%
21 years55%+dependent premiums45%
22 years50%+dependent premiums50%
23 years45%+dependent premiums55%
24 years40%+dependent premiums60%
25 years35%+dependent premiums65%
26 years30%+dependent premiums70%
27 years25%+dependent premiums75%
28 years20%+dependent premiums80%
29 years15%+dependent premiums85%
30 yearsActive employee/dependent rate
Retirees who are entitled to receive retirement benefits under the City’s retirement plan may purchase
continued health benefits for the retiree and the retiree’s dependents. The person must inform the City no
later than the day on which the person retires that the person elects to continue coverage. If the retiree
elects to continue coverage for himself and/or his dependents, once he decides to drop either type of
coverage, the person and/or his dependents become eligible for coverage at the next open enrollment
period. The level of coverage provided is the same level of coverage provided to current employees. The
City’s coverage is secondary to Medicare when the person becomes eligible for those benefits. Payment
for dependent coverage will be at the same rate as payments for current employees.
51
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 11 - Post-employment Benefits (continued)
Annual OPEB Cost and Net OPEB Obligation. The City’s annual other postemployment benefit (OPEB)
cost is calculated based on the annual required contribution of the employer (ARC), an amount actuarially
determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of
funding that if paid on an ongoing basis, is projected to cover normal cost each year and amortize any
unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following
table shows the components of the City’s annual OPEB cost for the year, the amount actually contributed
to the plan, and changes in the City’s OPEB obligation to the postemployment medical plan shows the
components of the City’s annual OPEB cost for the year, the amount actually contributed to the plan, and
changes in the City’s OPEB obligation to the postemployment medical plan.
Fiscal Year
201120102009
Annual Required Contribution (ARC)2,214,338$ 2,472,961$ 2,190,180$
Interest on net pension obligation (NPO) 169,198 81,894 -
Adjustment to ARC(156,760) (75,874) -
Annual Pension Cost (APC)2,226,776 2,478,981 2,190,180
Contributions(721,830) (538,884) (370,318)
Change in NPO1,504,946 1,940,097 1,819,862
NPO, beginning of the year3,759,959 1,819,862 -
NPO, ending of the year5,264,905$ 3,759,959$ 1,819,862$
Percentage of ARC contribution32.4%21.7%16.9%
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net
OPEB obligation for fiscal year 2011, 2010 and 2009 are as follows.
Percentage of
Annual OPEB
Cost Net OPEB
Annual OPEB
Fiscal Year Ended Cost Contributed Obligation
9/30/20092,190,180$ 16.91%1,819,862$
9/30/20102,478,981 21.74%3,759,959
9/30/20112,226,776 33.85%5,264,905
52
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 11 - Post-employment Benefits (continued)
Funded Status and Funding Progress. The funding status of the post employment medical plan as of
the most recent actuarial valuation date is as follows:
Actuarial valuations of an ongoing plan involve estimates of the value reported amounts and assumptions
about the probability of occurrence of events far into the future. Examples include assumptions about
future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded
status of the plan and the annual required contributions of the employer are subject to continual revision
as actual results are compared with past expectations and new estimates are made about the future. A
schedule of funding progress presents multi-trend information about whether the actuarial value of plan
assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. The
2010 actuarial valuation is the most recent actuarial valuation available.
Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on
the substantive plan (the plan as understood by the employer and plan members) and include the types of
benefits provided at the time of each valuation and the historical pattern of sharing benefit costs between
the employer and plan members to that point. The actuarial methods and assumptions used include
techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities
and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the
December 31, 2010, actuarial valuation, the projected unit credit actuarial cost method was used. The
actuarial assumptions included a 4.5 percent investment rate of return compounded annually (net of
administrative expenses), which is a blended rate of the expected long-term investment returns on plan
assets and on the employer’s own investments calculated based on the funded level of the plan at the
valuation date, an annual healthcare cost trend rate of 10 percent initially, reduced by decrements to an
ultimate rate of 4.5 percent after 10 years, and a payroll growth rate for projecting normal cost of 3
percent. These rates include a 3 percent inflation assumption. The actuarial value of assets was
determined using techniques that spread the effects of short-term volatility in the market value of
investments over a five-year period. The UAAL is being amortized as a level percentage of payroll
contributions over a 30 year period assuming payroll growth of 3 percent. The remaining amortization
period at September 30, 2011, was 29 years.
53
CITY OF LA PORTE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS (continued)
Note 11 - Post-employment Benefits (continued)
Supplemental Death Benefits Fund
The City also participates in the cost sharing multiple-employer defined benefit group term life insurance
plan operated by the Texas Municipal Retirement System (TMRS) known as the Supplemental Death
Benefits Fund (SDBF). The City elected, by ordinance to provide group term life insurance coverage to
both current and retired employees. The city may terminate coverage under and discontinue participation
in the SDBF by adopting an ordinance before November 1 of any year to be effective the following
January 1. The death benefit for active employees provides a lump sum payment approximately equal to
the employee’s annual salary (calculated based on the employee’s actual earnings, for the 12-month
period preceding the month of death); retired employees are insured for $7,500; this coverage is an “other
postemployment benefit, “ or OPEB. The city contributes to SDBF at a contractually required rate as
determined by an annual actuarial valuation. The rate is equal to the cost of providing one-year term life
insurance. The funding policy for the SDBF program is to assure that adequate resources are available to
meet all death benefit payments for the upcoming year; the intent is not to pre-fund retiree term life
insurance during employee’s entire careers
The City’s contributions to the TMRS SDBF for the fiscal year ended 2011, 2010, and 2009 were
$36,232, $34,554 and $5,312 respectively, which equaled to the required contributions.
Schedule of Contribution Rates
Annual
Plan/CaleRequired Acutal Percentage
ndar Contribution Contribution of ARC
Year(Rate)Made (Rate)Contributed
20090.03%0.03%100%
20100.03%0.03%100%
20110.03%0.03%100%
.
54
Required Supplementary Information
55
CITY OF LA PORTE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL
For the year ended September 30, 2011
2011
Variance with
Final Budget -
Budgeted AmountsPositive
OriginalFinalActual(Negative)
Revenues
Property taxes13,489,88512,968,11312,894,473$ (73,640)$
Franchise fees2,175,391 2,119,669 2,195,824 76,155
Sales and use taxes2,866,451 3,192,900 3,220,260 27,360
Industrial payments10,256,410 10,156,410 10,192,582 36,172
Miscellaneous taxes89,321 80,000 76,554 (3,446)
Licenses and permits569,824254,256312,962 58,706
Intergovernmental2,000 1,000 - (1,000)
Fines and forfeitures1,692,4401,591,950 1,545,191 (46,759)
Interest earnings162,500 70,000 75,422 5,422
Charges for services5,234,6825,228,9375,336,416 107,479
Miscellaneous 40,00052,100238,146
Total Revenues
35,715,33536,578,904 36,087,830 186,449
Expenditures
General government -
Administration4,553,4544,723,5114,522,969200,542
Finance3,173,3712,824,7192,779,87544,844
Planning and engineering2,051,7242,105,6911,915,269190,422
Public safety
Fire4,511,6474,479,0484,326,552152,496
Police9,979,85010,121,47210,025,59995,873
Public works
Public works administration367,282363,380339,11924,261
Streets2,419,1082,460,1012,274,008186,093
Health and sanitation
Solidwaste2,207,3282,231,7182,181,95749,761
Culture and recreation5,264,8915,315,3715,130,973184,398
Total Expenditures 34,625,01134,528,655 33,496,321 1,128,690
Excess (deficiency) of revenues
over expenditures2,050,249 1,090,324 2,591,509 1,315,139
Other Financing Sources (Uses)
Transfers in397,269 397,269 853,854 456,585
Transfers out(2,576,508) (2,576,508) (3,018,824) (442,316)
Total other financing sources
and uses (2,179,239)(2,179,239) (2,164,970) 14,269
Special Item
Proceeds from sale capital assets2,000 6,820,926 6,822,126 (1,200)
Net change in fund balances(126,990) 5,732,011 7,248,665 1,516,654
Fund balances, beginning of year
12,104,48912,104,489 12,104,489 -
Fund balances at year end
$ 17,836,50011,977,499$ 19,353,154$ 1,516,654$
56
CITY OF LA PORTE, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY BUDGET INFORMATION
Budgetary Controls and Procedures
The objective of the City’s budgetary controls is to ensure compliance with legal provisions embodied in
the annual appropriated budget approved by City Council. The City Manager is required by charter to
submit a proposed budget and accompanying message to City Council by August 1. The Council shall
review and revise the proposed budget as they deem appropriate prior to circulation for the public
hearing. A summary of the proposed budget and notice of the public hearing must be posted in City Hall
and be published in the official newspaper at least 2 weeks prior to the hearing. Annual budgets for
General, Debt Service, Special Revenue and Enterprise Funds are legally adopted by ordinance and must
be done so no later than September 27th. Budgetary control for capital projects funds is achieved through
legally binding construction contracts and project length budgets.
The level of budgetary control (the level at which expenditures cannot legally exceed the appropriated
amount) is the total approved budget for each department. The City manager is authorized to transfer part
or all of any unencumbered appropriation balance among programs within a department. All other
amendments and/or transfers must be approved by Council.
Annual appropriated budgets are adopted for the general, special revenue, and debt service funds, using
the same basis of accounting as for financial reporting. 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 City adopts separate budgets for each of the special revenue funds rather than
as a whole. 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 is the total approved budget for each department. The City
Manager may transfer appropriations within a department without seeking the approval of City Council;
however, any revisions that alter total expenditures for any department must be approved by City Council.
Appropriations lapse at the end of the year, excluding capital project budgets.
57
CITY OF LA PORTE, TEXAS
REQUIRED PENSION SYSTEM SUPPLEMENTARY INFORMATION
September 30, 2011
TEXAS MUNICIPAL RETIREMENT SYSTEM (UNAUDITED)
Schedule of Funding Progress
Unfunded
Actuarial (UAAL) as a
Actuarial Accrued Annual Percentage of
Actuarial Valuation Actuarial Value Accrued Percentage Liability Covered Covered
Date December 31, of Assets Liabilities Funded (UAAL) Payroll Payroll
201088,730,728$ 106,875,060$ 83%18,144,332$ 18,811,924$ 96%
200952,637,477 78,345,079 67%25,707,602 18,770,507 137%
200847,909,865 72,398,270 66%24,488,405 18,162,841 135%
58
Combining and Individual Fund
Statements and Schedules
59
Nonmajor Governmental Funds
Special Revenue Funds
Special revenue funds are used to account for specific revenues that are legally restricted to expenditure
for particular purposes.
Hotel / Motel Occupancy Tax Fund – This fund is used to account for the accumulation of resources from
the Hotel/Motel Tax assessment levied by the City. These monies are to be spent to promote the
development or progress of the City within the guidelines set forth on disposition of revenues collected
under the authority of the Texas Hotel Occupancy Act (Article 1269; Vernon’s Texas Civil Statutes).
Section 4B Sales Tax Fund – This fund is used to account for funds received from the ½ cent sales tax
dedicated to certain economic and infrastructure projects.
Tax Increment Reinvestment Zone One Fund (TIRZ) – This fund is used to account for the disposition of
property taxes collected on specific parcels within the boundaries of the TIRZ for the exclusive benefit of
the City’s capital improvement programs.
Grant Fund – This fund is used to account for funds received from another government or organization to
be used for a specific purpose activity or facility.
Street Maintenance Sales Tax Fund – This fund is used to account for the additional sales tax collected
for street maintenance.
Community Investment Fund – This fund is used to account for funds received and expended on
community beautification and revitalization programs.
Capital Projects Funds
Capital projects funds are used to account for the acquisition and construction of major capital facilities
other than those financed by proprietary funds.
Transportation and Other Infrastructure Fund – This fund is used to account for the construction and
expansion of roads, bridges, sidewalks and other major infrastructure capital improvements.
1998 General Obligation Bonds Fund – This fund is used to account for the proceeds and expenditures
related to drainage and street improvements throughout the City.
2000 Certificate of Obligation Bonds Fund – This fund is used to account for the proceeds and
expenditures for construction of the community library.
2004 Certificate of Obligation Bonds Fund – This fund is used to account for the proceeds and
expenditures related to the Bay Area Boulevard, Canada Road Paving and Drainage Improvements and
the land acquisition of the Police Headquarters.
2005 Certificate of Obligation Bonds Fund – This fund is used to account for the proceeds and
expenditures related to the purchase of an aerial fire truck, Bayshore Water/Sewer Replacement and
various other Water/Sewer Capital Improvements.
60
Nonmajor Governmental Funds
Capital Projects Funds (continued)
2005 General Obligation Bond Fund – This fund is used to fund projects that benefit the City in general.
A specific project from this issue is the construction of the police facility.
2006 Certificate of Obligation Bonds Fund – This fund is used to account for the proceeds and
expenditures related to the Police Facility, a Sports Complex (Joint Venture), South La Porte Trunk
Sewer and various other Water/Sewer projects.
2006 General Obligation Bonds Fund - This fund is used to account for the proceeds and expenditures
related to the Westside Park Improvements.
2007 Certificate of Obligation Bonds Fund – This fund is used to account for the proceeds and
expenditures related to wastewater treatment plant improvements, sports complex and golf cart path
improvements.
2010 Certificates of Obligation Bond Fund – This fund is used to account for the proceeds and
expenditures related to street, drainage and park improvements.
Drainage Improvements – This fund is used to account for the proceeds and expenditures related to the
drainage fees collected.
61
CITY OF LA PORTE
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
September 30, 2011
Special Revenue Funds
Tax Increment
Hotel Motel Section 4b Reinvestment
TaxSales TaxZoneGrant Fund
Assets
Cash and cash equivalents512,649$ 1,210,103$ 1,019,024$ 413,896$
Investments257,881 608,725 - 249,445
Receivables, net of allowance 343,941159,661 - 199
Intergovernmental receivable- - 1,920 637,854
Due from other funds- - - -
Total Assets
$ 2,162,769930,191$ 1,020,944$ 1,301,394$
Liabilities and Fund Balances
Liabilities:
Accounts payable16,052$ 3,109$ $ 256,309$
Accrued salaries payable3,590 2,178 - 12,845
Other payables- - - 46,073
Due to other funds- - 662,000 -
Deferred revenue35,899 32,258 - 1,051
Total Liabilities
37,54555,541 662,000 316,278
Fund balances:
Restricted
Debt service- 622,692 - -
Grants- - - 657,231
Economic development874,650 1,502,532 - -
Public safety- 327,885
Capital projects- 358,944 -
Public works- - - -
Total Fund balances
2,125,224874,650 358,944 985,116
Total Liabilities and Fund Balances
$ 2,162,769930,191$ 1,020,944$ 1,301,394$
62
Page 1 of 2
Capital Projects Funds
2000
Street Community Transportation & 1998 General Certificate of
Maintenance Investment Total Special Other Obligation Obligation
Sales Tax FundFundRevenue FundsInfrastructureBondsBonds
$ -362,159$ 3,517,831$ 43,799$ 769,301$ 19,698$
-182,178 1,298,229 22,032 386,986 9,909
-155,744 659,545 18 308 8
-- 639,774 - - -
-- - - - -
$ -700,081$ 6,115,379$ 65,849$ 1,156,595$ 29,615$
$ -53,855$ 329,325$ 987$ 155,984$ $
-- 18,613 - - -
-- 46,073 4,646 - -
-- 662,000 - - -
-- 69,208 - - -
-53,855 1,125,219 5,633 155,984 -
-- 622,692 - - -
-- 657,231 - - -
-- 2,377,182 - - -
327,885- - - -
-- 358,944 60,216 1,000,611 29,615
-646,226 646,226 - - -
-646,226 4,990,160 60,216 1,000,611 29,615
$ -700,081$ 6,115,379$ 65,849$ 1,156,595$ 29,615$
63
CITY OF LA PORTE
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
September 30, 2011
20042005 2006
Certificate of Certificate of 2005 General Certificate of
Obligation Obligation Obligation Obligation
BondsBondsBondsBonds
Assets
Cash and cash equivalents562,591$ 19,049$ 594$ 757$
Investments187 9,582 298 -
Receivables, net of allowance- 8 - -
Intergovernmental receivable- - - -
Due from other funds- - - 662,000
Total Assets
$ 28,639562,778$ 892$ 662,757$
Liabilities and Fund Balances
Liabilities:
Accounts payable$ $ $ $
Accrued salaries payable- - - -
Other payables- - - 10,430
Due to other funds- - - 42,164
Deferred revenue- - - -
Total Liabilities
-- - 52,594
Fund balances:
Restricted
Debt service- - - -
Grants- - - -
Economic development- - - -
Public safety- - - -
Capital projects562,778 28,639 892 610,163
Public works- - - -
Total Fund balances
28,639562,778 892 610,163
Total Liabilities and Fund
Balances
$ 28,639562,778$ 892$ 662,757$
64
Page 2 of 2
Capital Funds Project (continued)
20072010
2006 General Certificate of Certificate of Total Nonmajor
Obligation Obligation Obligation Drainage Total Capital Governmental
BondsBondsBondsImprovementsProjects FundsFunds
$ 312,216119,002$ 3,399,735$ 81,808$ 5,328,550$ 8,846,381$
157,056460 80,890 41,153 708,553 2,006,782
125- 64 15,916 16,447 675,992
-- - - - 639,774
-- - - 662,000 662,000
$ 469,397119,462$ 3,480,689$ 138,877$ 6,715,550$ 12,830,929$
$ 50,969$ 395,234$ 14,145$ 617,319$ 946,644$
-- - - - 18,613
-- 59,821 - 74,897 120,970
-- - - 42,164 704,164
-- - - - 69,208
50,969- 455,055 14,145 734,380 1,859,599
-- - - - 622,692
-- - - - 657,231
-- - - - 2,377,182
-- - - - 327,885
418,428119,462 3,025,634 124,732 5,981,170 6,340,114
-- - - - 646,226
418,428119,462 3,025,634 124,732 5,981,170 10,971,330
$ 469,397119,462$ 3,480,689$ 138,877$ 6,715,550$ 12,830,929$
65
CITY OF LA PORTE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended September 30, 2011
Special Revenue Funds
Tax Increment
Hotel Motel Section 4b Reinvestment
TaxSales TaxZoneGrant Fund
Revenues
Property Taxes-$ -$ 1,873,386$ -$
Sales and use taxes- 1,610,751 - -
Other taxes522,597 - - -
Fines and forfeitures- - - 178,399
Charges for services- - - 14,898
Intergovernmental - - - 917,206
Interest2,324 5,068 965 3,026
Miscellaneous- - - 3,524
Total revenues524,921 1,615,819 1,874,351 1,117,053
Expenditures
Current:
General government323,332 157,554 467,146 594,786
Public safety - - - 455,979
Public Works- - - 62,334
Culture and recreation- - - 148,375
Capital outlay- - 1,205,753 55,516
Total Expenditures
157,554323,332 1,672,899 1,316,990
Excess (deficiency) of revenues over
expenditures201,589 1,458,265 201,452 (199,937)
Other Financing Sources (Uses)
Transfers in- - - 35,615
Transfers out(41,500) (977,692) - -
Total other financing sources (uses)
(977,692)(41,500) - 35,615
Net change in fund balances160,089 480,573 201,452 (164,322)
Fund balances - beginning
1,644,651714,561 157,492 1,149,438
Fund balances - ending
$ 2,125,224874,650$ 358,944$ 985,116$
66
Page 1 of 2
Capital Projects funds
2000
Street Transportation & 1998 General Certificate of
Maintenance Community Total Special Other Obligation Obligation
Sales Tax FundInvestment FundRevenue FundsInfrastructureBondsBonds
$ --$ 1,873,386$ -$ -$ -$
-805,375 2,416,126 - - -
-- 522,597 - - -
-- 178,399 - - -
-- 14,898 - - -
-- 917,206 - - -
-1,401 12,784 728 3,614 93
-- 3,524 - - -
-806,776 5,938,920 728 3,614 93
-- 1,542,818 - - -
-- 455,979 - - -
-- 62,334 - - -
-- 148,375 - - -
-1,028,613 2,289,882 569,736 156,014 -
-1,028,613 4,499,388 569,736 156,014 -
-(221,837) 1,439,532 (569,008) (152,400) 93
-- 35,615 - - -
(456,585)- (1,475,777) - - -
(456,585)- (1,440,162) - - -
(456,585)(221,837) (630) (569,008) (152,400) 93
456,585868,063 4,990,790 629,224 1,153,011 29,522
$ -646,226$ 4,990,160$ 60,216$ 1,000,611$ 29,615$
67
CITY OF LA PORTE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended September 30, 2011
200420052006
Certificate of Certificate of 2005 General Certificate of
Obligation Obligation Obligation Obligation
BondsBondsBondsBonds
Revenues
Property Taxes-$ -$ -$ -$
Sales and use taxes- - - -
Other taxes- - - -
Fines and forfeitures- - - -
Charges for services- - - -
Intergovernmental - - - -
Interest851 129 169 48,402
Miscellaneous- - - -
Total revenues851 129 169 48,402
Expenditures
Current:
General government- - - -
Public safety - - 23,697 -
Public Works- - - 773
Culture and recreation- - - -
Capital outlay145,667 38,943 - 769,930
Total Expenditures
38,943145,667 23,697 770,703
Excess (deficiency) of revenues over
expenditures(144,816) (38,814) (23,528) (722,301)
Other Financing Sources (Uses)
Transfers in- - - -
Transfers out- - - -
Total other financing sources (uses)
-- - -
Net change in fund balances(144,816) (38,814) (23,528) (722,301)
Fund balances - beginning
67,453707,594 24,420 1,332,464
Fund balances - ending
$ 28,639562,778$ 892$ 610,163$
68
Page 2 of 2
Capital Projects Funds (continued)
2007 2010
2006 General Certificate of Certificate of Total Nonmajor
Obligation Obligation Obligation Drainage Total Capital Governmental
BondsBondsBondsImprovementsProjects FundsFunds
$ --$ -$ -$ -$ 1,873,386$
-- - - - 2,416,126
-35,615 - - 35,615 558,212
-- - - - 178,399
-- - 266,012 266,012 280,910
-- - - - 917,206
2,264213 7,540 934 64,937 77,721
-- - - - 3,524
2,26435,828 7,540 266,946 366,564 6,305,484
-- - - - 1,542,818
-- - - 23,697 479,676
-- - 409,663 410,436 472,770
-15,609 - - 15,609 163,984
116,873- 2,771,299 - 4,568,462 6,858,344
116,87315,609 2,771,299 409,663 5,018,204 9,517,592
(114,609)20,219 (2,763,759) (142,717) (4,651,640) (3,212,108)
-- - - - 35,615
(481,708)(35,615) - - (517,323) (1,993,100)
(481,708)(35,615) - - (517,323) (1,957,485)
(596,317)(15,396) (2,763,759) (142,717) (5,168,963) (5,169,593)
1,014,745134,858 5,789,393 267,449 11,150,133 16,140,923
$ 418,428119,462$ 3,025,634$ 124,732$ 5,981,170$ 10,971,330$
69
(This page intentionally left blank.)
70
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
– BUDGET TO ACTUAL
Debt Service Fund
Special Revenue Fund
Capital Projects Fund
71
CITY OF LA PORTE
SPECIAL REVENUE FUND - DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Property taxes2,410,992$ 2,333,153$ (77,839)$ 2,560,023$
Investment earnings20,000 11,244 (8,756) 28,484
Total Revenues
2,344,3972,430,992 (86,595) 2,588,507
Expenditures
Debt Service:
Principal1,740,000 1,740,000 - 1,755,000
Interest and other charges1,776,573 1,871,371 (94,798) 1,451,033
Total Expenditures
3,611,3713,516,573 (94,798) 3,206,033
Revenues over (under) expenditures
(1,266,974)(1,085,581) (181,393) (617,526)
Other Financing Sources (Uses)
Issuance of debt- - - 4,295,000
Premium on bonds- - - 100,339
Payment to escrow agent- - - (4,409,763)
Transfers in1,262,168 1,262,168 - 1,598,155
Total Other Financing Sources (Uses)
1,262,1681,262,168 - 1,583,731
Net change in fund balance176,587 (4,806) (181,393) 966,205
Fund balances, beginning of year
3,117,6883,117,688 - 2,151,483
Fund balances at year end
$ 3,112,8823,294,275$ (181,393)$ 3,117,688$
72
CITY OF LA PORTE
SPECIAL REVENUE FUND - HOTEL MOTEL TAX
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Other taxes415,000$ 522,597$ 107,597$ 336,821$
Investment earnings4,000 2,324(1,676) 3,998
Total Revenues
524,921419,000 105,921 340,819
Expenditures
Current:
General government337,661 323,33214,329 347,118
Total Expenditures
323,332337,661 14,329 347,118
Net change in fund balance81,339 201,589 120,250 (6,299)
Other Financing Sources (Uses)
Transfers in- - - 59,700
Transfers (out)(41,500) (41,500) - (53,000)
Total Other Financing Sources (Uses)
(41,500)(41,500) - 6,700
Net change in fund balance(1,661) 160,089 120,250 401
Fund balances, beginning of year
714,561714,561 - 714,160
Fund balances at ear end
y
$ 874,650754,400$ 120,250$ 714,561$
73
CITY OF LA PORTE
SPECIAL REVENUE FUND - SECTION 4B SALES TAX
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Sales and use taxes1,433,226$ 1,610,751$ 177,525$ 1,571,257$
Investment Earnings10,000 5,068(4,932) 8,253
Miscellaneous Revenue- - - 48
Total Revenues
1,615,8191,443,226 172,593 1,579,558
Expenditures
Current:
General government242,459 157,55484,905 151,644
Total Expenditures
157,554242,459 84,905 151,644
Net change in fund balance1,200,767 1,458,265 257,498 1,427,914
Other Financing Sources (Uses)
Transfers (out)(977,692) (977,692) - (1,464,104)
Total Other Financing Sources (Uses)
(977,692)(977,692) - (1,464,104)
Net change in fund balance(754,617) 480,573 257,498 (36,190)
Fund balances, beginning of year
1,644,6511,644,651 - 1,680,841
Fund balances at year end
$ 2,125,2241,867,726$ 257,498$ 1,644,651$
74
75
CITY OF LA PORTE
SPECIAL REVENUE FUND - GRANT FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Fine and Forfeits60,500$ 178,399$ 117,899$ 271,086$
Charges for Services492 14,89814,406 15,194
Intergovernmental613,516 917,206303,690 987,669
Investment Earnings- 3,0263,026 2,927
Miscellaneous Revenue4,875 3,524(1,351) 4,455
Total Revenues
1,117,053679,383 437,670 1,281,331
Expenditures
Current:
General Government843,492 594,786248,706 46,371
Public Safety574,966 455,979118,987 395,435
Public Works88,200 62,33425,866 4,227
Culture and Recreation171,785 148,37523,410 68,562
Capital Outlay18,200 55,516(37,316) 174,921
Total Expenditures
1,316,9901,696,643 379,653 689,516
Net change in fund balance(1,017,260) (199,937) 817,323 591,815
Other Financing Sources (Uses)
Transfers in35,615 35,615 - -
Transfers (out)- - - (658,245)
(Uses)
35,61535,615 - (658,245)
Net change in fund balance(981,645) (164,322) 817,323 (66,430)
Fund balances, beginning of year
1,149,4381,149,438 - 1,215,868
Fund balances at year end
$ 985,116167,793$ 817,323$ 1,149,438$
76
CITY OF LA PORTE
SPECIAL REVENUE FUND - STREET MAINTENANCE SALES TAX FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
General Sales Tax716,613$ 805,375$ 88,762$ 785,628$
Investment earnings2,000 1,401(599) 2,366
Total Revenues
806,776718,613 88,163 787,994
Expenditures
Current:
Capital outlay1,455,867 1,028,613427,254 320,604
Total Expenditures
1,028,6131,455,867 427,254 320,604
Net change in fund balance(737,254) (221,837) 515,417 467,390
Fund balances, beginning of year
868,063868,063 - 400,673
Fund balances at year en
d
$ 646,226130,809$ 515,417$ 868,063$
77
CITY OF LA PORTE
CAPITAL PROJECTS FUND - TRANSPORTATION & OTHER INFRASTRUCTURE
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Investment Earnings7,000$ 728$ (6,272)$ 6,708$
Total Revenues
7287,000 (6,272) 6,708
Expenditures
Current:
Capital Outlay355,000 569,736(214,736) 599,575
Total Expenditures
569,736355,000 (214,736) 599,575
Net change in fund balance(348,000) (569,008) (221,008) (592,867)
Fund balances, beginning of year
629,224629,224 - 1,222,091
Fund balances at ear end
y
$ 60,216281,224$ (221,008)$ 629,224$
78
CITY OF LA PORTE
CAPITAL PROJECTS FUND - 1998 GENERAL OBLIGATION BONDS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Investment Earnings-$ 3,614$ 3,614$ 6,872$
Total Revenues
3,614- 3,614 6,872
Expenditures
Current:
Capital Outlay- 156,014 (156,014) 8,578
Total Expenditures
156,014- (156,014) 8,578
Net change in fund balance- (152,400) (152,400) (1,706)
Fund balances, beginning of year
1,153,0111,153,011 - 1,154,717
Fund balances at ear end
y
$ 1,000,6111,153,011$ (152,400)$ 1,153,011$
79
CITY OF LA PORTE
CAPITAL PROJECTS FUND - 2000 CERTIFICATE OF OBLIGATION BONDS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Investment Earnings-$ 93$ 93$ 175$
Total Revenues
93- 93 175
Net change in fund balance- 93 93 175
Fund balances, beginning of year
29,52229,522 - 29,347
Fund balances at ear end
y
$ 29,61529,522$ 93$ 29,522$
80
CITY OF LA PORTE
CAPITAL PROJECTS FUND - 2004 CERTIFICATE OF OBLIGATION BONDS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Investment Earnings-$ 851$ 851$ 3,737$
Total Revenues
851- 851 3,737
Expenditures
Capital Outlay550,000 145,667 404,333 242,893
Total Expenditures
145,667550,000 404,333 242,893
Net change in fund balance(550,000) (144,816) 405,184 (239,156)
Other Financing Sources (Uses)
Transfers (out)- - - (282,428)
Total Other Financing Sources
(Uses)
-- - (282,428)
Net change in fund balance(550,000) (144,816) 405,184 (521,584)
Fund balances, beginning of year
707,594707,594 - 1,229,178
Fund balances at ear end
y
$ 562,778157,594$ 405,184$ 707,594$
81
CITY OF LA PORTE
CAPITAL PROJECTS FUND - 2005 CERTIFICATE OF OBLIGATION BONDS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Investment Earnings-$ 129$ 129$ 878$
Total Revenues
129- 129 878
Expenditures
Capital Outlay- 38,943 (38,943) 232,089
Total Expenditures
38,943- (38,943) 232,089
Net change in fund balance- (38,814) (38,814) (231,211)
Fund balances, beginning of year
67,45367,453 - 298,664
Fund balances at year en
d
$ 28,63967,453$ (38,814)$ 67,453$
82
CITY OF LA PORTE
CAPITAL PROJECTS FUND - 2005 GENERAL OBLIGATION BONDS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Investment Earnings-$ 169$ 169$ 227$
Total Revenues
169- 169 227
Expenditures
Current:
Public Safety- 23,697 (23,697) 10,000
Total Expenditures
23,697- (23,697) 10,000
Net change in fund balance- (23,528) (23,528) (9,773)
Other Financing Sources (Uses)
Transfers (out)- - - (16,219)
Total Other Financing Sources (Uses)
-- - (16,219)
Net change in fund balance- (23,528) (23,528) (25,992)
Fund balances, beginning of year
24,42024,420 - 50,412
Fund balances at ear end
y
$ 89224,420$ (23,528)$ 24,420$
83
CITY OF LA PORTE
CAPITAL PROJECTS FUND - 2006 CERTIFICATE OF OBLIGATION BONDS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Investment Earnings-$ 48,402$ 48,402$ 4,160$
Total Revenues
48,402- 48,402 4,160
Expenditures
Current:
Public Works- 773 (773) 49,392
Capital Outlay- 769,930 (769,930) 1,667,425
Total Expenditures
770,703- (770,703) 1,716,817
Net change in fund balance- (722,301) (722,301) (1,712,657)
Fund balances, beginning of year
1,332,4641,332,464 - 3,045,121
Fund balances at year en
d
$ 610,1631,332,464$ (722,301)$ 1,332,464$
84
CITY OF LA PORTE
CAPITAL PROJECTS FUND - 2006 GENERAL OBLIGATION BONDS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Miscellaneous Taxes-$ 35,615$ 35,615$ -$
Investment Earnings- 213 213 581
Total Revenues
35,828- 35,828 581
Expenditures
Current:
Culture and Recreation51,037 15,609 35,428 -
Capital Outlay- - - 197,806
Total Expenditures
15,60951,037 35,428 197,806
Net change in fund balance(51,037) 20,219 71,256 (197,225)
Other Financing Sources (Uses)
Transfers (out)(35,615) (35,615) - -
(Uses)
(35,615)(35,615) - -
Net change in fund balance(86,652) (15,396) 71,256 (197,225)
Fund balances, beginning of year
134,858134,858 - 332,083
Fund balances at year end
$ 119,46248,206$ 71,256$ 134,858$
85
CITY OF LA PORTE
CAPITAL PROJECTS FUND - 2007 CERTIFICATE OF OBLIGATION BONDS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Investment earnings-$ 2,264$ 2,264$ 5,516$
Total Revenues
2,264- 2,264 5,516
Expenditures
Capital outlay165,476 116,873 48,603 313,897
Total Expenditures
116,873165,476 48,603 313,897
Net change in fund balance(165,476) (114,609) 50,867 (308,381)
Other Financing Sources (Uses)
Transfers (out)(481,708) (481,708) - (478,308)
Total Other Financing Sources (Uses)
(481,708)(481,708) - (478,308)
Net change in fund balance(647,184) (596,317) 50,867 (786,689)
Fund balances, beginning of year
1,014,7451,014,745 - 1,801,434
Fund balances at year end
$ 418,428367,561$ 50,867$ 1,014,745$
86
CITY OF LA PORTE
CAPITAL PROJECTS FUND - 2010 CERTIFICATE OF OBLIGATION BONDS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Investment earnings10,000$ 7,540$ (2,460)$ 3,547$
Total Revenues
7,54010,000 (2,460) 3,547
Expenditures
Capital outlay- 2,771,299 (2,771,299) 461,470
Total Expenditures
2,771,299- (2,771,299) 461,470
Net change in fund balance10,000 (2,763,759) (2,773,759) (457,923)
Other Financing Sources (Uses)
Other sources- - - 6,265,000
Premium on bonds- - - 123,670
Transfers (out)- - - (141,354)
(Uses)
-- - 6,247,316
Net change in fund balance10,000 (2,763,759) (2,773,759) 5,789,393
Fund balances, beginning of year
5,789,3935,789,393 - -
Fund balances at year en
d
$ 3,025,6345,799,393$ (2,773,759)$ 5,789,393$
87
CITY OF LA PORTE
CAPITAL PROJECTS FUND - DRAINAGE IMPROVEMENTS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
With comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final BudgetActual(Negative)2010
Revenues
Charges for service270,000$ 266,012$ (3,988)$ 266,859$
Investment earnings400 934 534 590
Total Revenues
266,946270,400 (3,454) 267,449
Expenditures
Current:
Public works270,000 409,663 (139,663) -
Total Expenditures
409,663270,000 (139,663) -
Net change in fund balance400 (142,717) (143,117) 267,449
Fund balances, beginning of year
267,449267,449 - -
Fund balances at year end
$ 124,732267,849$ (143,117)$ 267,449$
88
SUPPLEMENTARY INDIVIDUAL FUND FINANCIAL
STATEMENTS AND SCHEDULES
General Fund
89
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90
CITY OF LA PORTE, TEXAS
General Fund
Schedule of Revenues - Budget and Actual
For the Year Ended September 30, 2011
Variance with
Final Budget
Budgeted AmountsActualPositive
OriginalFinalAmounts(Negative)
Taxes:
Ad valorem:
Current13,119,885$ 12,588,592$ 12,513,618$ (74,974)$
Delinquent200,000 200,000 200,317 317
Industrial Payments10,256,410 10,156,410 10,192,582 36,172
Total ad valorem23,576,295 22,945,002 22,906,517 (38,485)
Penalty and interest170,000179,521180,538 1,017
Sales Taxes2,866,451 3,192,900 3,220,260 27,360
Other Taxes89,321 80,000 76,554 (3,446)
Franchise Fees:
Electrical1,259,737 1,259,737 1,264,979 5,242
Gas169,932 169,932 136,740 (33,192)
Telephone295,000 375,000 427,982 52,982
Cable357,275 225,000 281,897 56,897
Commercial Solidwaste93,447 90,000 84,226 (5,774)
Total Franchise Fees2,175,391 2,119,669 2,195,824 76,155
Charges for Services:
Public safety service fees1,410,482 1,437,443 1,535,953 98,510
Health and sanitation service fees1,993,000 1,991,500 2,021,467 29,967
Culture and recreation fees1,495,800 1,432,844 1,470,326 37,482
Other service fees335,400 367,150 308,670 (58,480)
Total Charges for Services5,234,682 5,228,937 5,336,416 107,479
Intergovernmental2,000 1,000 - (1,000)
Licenses and permits:
Building permits27,669 29,431 291,714 262,283
Licenses542,155 224,825 21,248 (203,577)
Total Licenses and permits569,824 254,256 312,962 58,706
Investment income162,500 70,000 75,422 5,422
Fines and forfeitures1,692,440 1,591,950 1,545,191 (46,759)
Miscellaneous40,000 52,100 238,146 186,046
Total revenues36,578,904$ 35,715,335$ 36,087,830$ 372,495$
91
Page 1 of 4
CITY OF LA PORTE, TEXAS
General Fund
Schedule of Expenditures - Budget and Actual
For the year ended September 30, 2011
Variance with
Final Budget
ActualPositive
Budgeted Amounts
OriginalFinalAmounts(Negative)
General Government
Administration:
Emergency Management:
Personal services182,343$ 194,731$ 192,166$ 2,565$
Supplies10,435 25,325 21,262 4,063
Other services and charges94,168 93,678 87,379 6,299
Capital Outla -13,656 -
y
Total Emergency Management300,602 313,734 300,807 12,927
General Administration:
Personal services486,717 496,966 456,108 40,858
Supplies7,300 8,350 5,792 2,558
Other services and charges87,934 126,186 107,524 18,662
Total General Administratio 631,502581,951 569,424 62,078
n
Community Investment:
Supplies35,000 35,000 26,096 8,904
Other services and charges348,400 348,400 267,640 80,760
Total Community Investmen 383,400383,400 293,736 89,664
t
Human Resources:
Personal services240,774 263,940 224,891 39,049
Supplies7,050 8,968 7,834 1,134
Other services and charges93,388 101,195 101,627 (432)
Total Human Resources341,212 374,103 334,352 39,751
Information Technolog
y
Personal services352,111 364,526 363,484 1,042
Supplies153,623 146,473 144,136 2,337
Other services and charges790,808 855,747 922,857 (67,110)
Total Information Technolog 1,366,7461,296,542 1,430,477 (63,731)
y
Municipal Court:
Personal services463,071 466,583 453,597 12,986
Supplies and materials19,300 18,300 16,454 1,846
Other services and charges234,032 231,032 234,728 (3,696)
Total Municipal Cour 715,915716,403 704,779 11,136
t
Purchasing:
Personal services226,276 227,312 229,673 (2,361)
Supplies3,125 4,375 3,673 702
Other services and charges13,069 8,954 7,722 1,232
Total Purchasing242,470 240,641 241,068 (427)
City Secretary:
Personal services340,104 344,240 313,228 31,012
Supplies and materials2,125 3,625 3,336 289
Other services and charges90,062 75,562 63,336 12,226
Total City Secretar 423,427432,291 379,900 43,527
y
Legal:
Personal services14,412 14,412 14,412 -
Other services and charges172,682 183,682 187,952 (4,270)
Total Lega 198,094187,094 202,364 (4,270)
l
City Council:
Personal services19,377 20,477 20,651 (174)
Supplies and materials14,650 36,010 23,724 12,286
Other services and charges37,462 19,462 21,687 (2,225)
Total City Counci 75,94971,489 66,062 9,887
l
Total Administration
4,723,5114,553,454 4,522,969 200,542
92
CITY OF LA PORTE, TEXAS
Page 2 of 4
General Fund
Schedule of Expenditures - Budget and Actual
For the year ended September 30, 2011
Variance with
Final Bud
et
g
Budeted AmountsActualPositive
g
OriinalFinalAmounts(Neative)
gg
General Government (continued)
Finance:
Accounting:
Personal services643,360$ 608,031$ 605,522$ 2,509$
Supplies14,900 14,900 12,432 2,468
Other services and charges72,867 110,130 95,480 14,650
Total Accounting731,127 733,061 713,434 19,627
Nondepartmental:
Personal services690,168 747,168 756,355 (9,187)
Supplies4,000 4,200 4,047 153
Other services and charges1,291,784 882,172 875,731 6,441
Total Nondepartmental1,985,952 1,633,540 1,636,133 (2,593)
Tax Office:
Personal services234,208 237,484 234,780 2,704
Supplies and materials11,050 11,050 9,470 1,580
Other services and charges211,034 209,584 186,058 23,526
Total Tax Office456,292 458,118 430,308 27,810
Total Finance
2,824,7193,173,371 2,779,875 44,844
Plannin and Enineerin:
ggg
Planning and Engineering:
Personal services914,073 1,055,035 947,382 107,653
Supplies13,000 16,969 14,316 2,653
Other services and charges213,138 120,784 97,093 23,691
Total Planning and Engineering1,140,211 1,192,788 1,058,791 133,997
Inspection:
Personal services715,427 721,867 703,018 18,849
Supplies25,507 25,507 22,569 2,938
Other services and charges170,579 165,529 130,891 34,638
Total Inspection911,513 912,903 856,478 56,425
Total Plannin and Enineerin
2,105,6912,051,724 1,915,269 190,422
ggg
Total General Government
9,653,9219,778,549 9,218,113 435,808
Public Safet
y
Fire
Fire Prevention:
Personal services253,036 256,260 255,472 788
Supplies13,498 26,498 18,982 7,516
Other services and charges36,331 30,640 30,925 (285)
Total Fire Preventio 313,398302,865 305,379 8,019
n
Fire suppression:
Personal services1,306,970 1,340,312 1,334,752 5,560
Supplies146,811 146,811 140,438 6,373
Other services and charges584,692 557,492 545,032 12,460
Capital Outlay13,500 13,500 13,302 198
Total Fire Suppression2,051,973 2,058,115 2,033,524 24,591
Emergency medical services:
Personal services1,760,302 1,688,128 1,581,102 107,026
Supplies153,346 190,574 191,373 (799)
Other services and charges197,461 209,361 202,128 7,233
Capital Outlay45,700 19,472 13,046 6,426
Total Emergency Services2,156,809 2,107,535 1,987,649 119,886
Total Fire
4,479,0484,511,647 4,326,552 152,496
93
CITY OF LA PORTE, TEXAS
Page 3 of 4
General Fund
Schedule of Expenditures - Budget and Actual
For the year ended September 30, 2011
Variance with
Final Budet
g
Budeted AmountsActualPositive
g
OriinalFinalAmounts(Neative)
gg
Public Safet (continued)
y
Police
Police Administration:
Personal services680,098$ 698,343$ 700,691$ (2,348)$
Supplies15,036 18,286 20,674 (2,388)
Other services and charges254,891 225,866 243,172 (17,306)
Total Police Administration950,025 942,495 964,537 (22,042.00)
Police Patrol:
Personal services4,251,555 4,376,523 4,377,697 (1,174)
Supplies181,800 254,625 245,731 8,894
Other services and charges564,248 545,740 551,820 (6,080)
Total Police Patrol4,997,603 5,176,888 5,175,248 1,640
Criminal Investigation:
Personal services1,758,687 1,721,592 1,659,282 62,310
Supplies48,580 72,857 69,826 3,031
Other services and charges90,564 87,789 84,970 2,819
Total Criminal Investigation1,897,831 1,882,238 1,814,078 68,160
Support Services:
Personal services1,933,608 1,898,570 1,866,384 32,186
Supplies115,525 123,293 116,816 6,477
Other services and charges85,258 97,988 88,536 9,452
Total Support Services2,134,391 2,119,851 2,071,736 48,115
Total Police
10,121,4729,979,850 10,025,599 95,873
Total Public Safet
14,600,52014,491,497 14,352,151 248,369
y
Public Works
Public Works Administration:
Personal services278,822 272,121 263,614 8,507
Supplies and materials7,300 8,300 7,081 1,219
Other services and charges81,160 82,959 68,424 14,535
Total Public Works Administratio 363,380367,282 339,119 24,261
n
Streets:
Personal services1,587,359 1,591,800 1,522,937 68,863
Supplies138,309 144,309 132,473 11,836
Other services and charges643,440 643,992 570,673 73,319
Capital Outlay50,000 80,000 47,925 32,075
Total Streets2,419,108 2,460,101 2,274,008 186,093
Total Public Works
2,823,4812,786,390 2,613,127 210,354
Health and Sanitation
Residential Solidwaste:
Personal services1,099,652 1,127,282 1,109,358 17,924
Supplies220,789 244,581 242,674 1,907
Other services and charges866,887 839,855 811,236 28,619
Total Residential Solidwaste2,187,328 2,211,718 2,163,268 48,450
Commercial solidwaste:
Other services and charges20,000 20,000 18,689 1,311
Total Commercial Solidwaste20,000 20,000 18,689 1,311
Total Health and Sanitation
2,231,7182,207,328 2,181,957 49,761
94
CITY OF LA PORTE, TEXAS
Page 4 of 4
General Fund
Schedule of Expenditures - Budget and Actual
For the year ended September 30, 2011
Variance with
Final Budet
g
Budeted AmountsActualPositive
g
OriinalFinalAmounts(Neative)
gg
Culture & Recreation
Park Maintenance:
Personal services1,196,640 1,206,187 1,192,804 13,383
Supplies and materials106,519 111,700 120,189 (8,489)
Other services and charges765,673 783,048 800,758 (17,710)
Capital outlay100,534 86,034 68,321 17,713
Total Park Maintenance2,169,366 2,186,969 2,182,072 4,897
Recreation:
Personal services543,742 539,874 531,478 8,396
Supplies102,674 106,674 102,442 4,232
Other services and charges182,123 189,873 171,317 18,556
Total Recreation828,539 836,421 805,237 31,184
Special Services:
Personal services376,385 380,208 369,163 11,045
Supplies23,147 23,424 20,316 3,108
Other services and charges54,592 52,890 49,988 2,902
Total Special Services454,124 456,522 439,467 17,055
Parks Administration:
Personal Services495,521 502,821 461,350 41,471
Supplies9,650 9,650 7,652 1,998
Other Services and Charges21,987 18,562 13,950 4,612
Total Parks Administration527,158 531,033 482,952 48,081
Golf Course - Club House
Personal Services375,803 382,944 376,519 6,425
Supplies53,800 54,600 50,953 3,647
Other Services and Charges83,329 86,779 74,745 12,034
Total Golf Course512,932 524,323 502,217 22,106
Golf Course - Maintenance
Personal Services529,161 531,382 507,977 23,405
Supplies163,700 160,010 133,647 26,363
Other Services and Charges79,911 88,711 77,404 11,307
Total Golf Course772,772 780,103 719,028 61,075
Total Culture & Recreation
5,315,3715,264,891 5,130,973 184,398
Total General Fund
$ 34,625,01134,528,655$ 33,496,321$ 1,128,690$
95
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96
COMBINING FINANCIAL STATEMENTS
Nonmajor Enterprise Funds
Enterprise funds are used to account for the acquisition, operation and maintenance of governmental
facilities and services which are entirely or predominantly self-supporting, by user charges. The
operations of Enterprise Funds are accounted for in such a manner as to show a profit or loss similar to
comparable private enterprises.
Airport Fund – This fund is used to account financial activities of the airport, which includes rentals,
grants and other revenues.
Golf Course Fund – This fund is used to account for revenues and expenses related to the operation of an
eighteen-hole municipal course. During FY2011, the activities of the course were transferred to the
general fund and accounted for in culture and recreation.
97
CITY OF LA PORTE
COMBINING STATEMETN OF NET ASSETS
NONMAJOR ENTERPRISE FUNDS
September 30, 2011
Enterprise Funds
Total Nonmajor
Airport FundGolf Course
Enterprise Funds
Assets
Current assets:
Cash and cash equivalents232,042$ -$ 232,042$
Investments116,726 - 116,726
Interest receivable93 - 93
Total current assets
-348,861 348,861
Non-current assets:
Capital Assets:
Land and improvements203,504 - 203,504
Improvements other than buildings5,778,399 - 5,778,399
Less Accumulated depreciation(3,117,789) - (3,117,789)
Total non-current assets
-2,864,114 2,864,114
Total assets
-3,212,975 3,212,975
Liabilities
Current Liabilities:
Accounts payable3,433 - 3,433
Other accrued expenses1,500 - 1,500
Total current liabilities
-4,933 4,933
Total liabilities
-4,933 4,933
Net Assets
Invested in capital assets, net of related debt2,864,114- 2,864,114
Unrestricted343,928 - 343,928
Total net assets
$ -3,208,042$ 3,208,042$
98
CITY OF LA PORTE
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
NONMAJOR ENTERPRISE FUNDS
For the Year Ended September 30, 2011
Enterprise Funds
Total Nonmajor
Airport FundGolf Course
Enterprise Funds
Revenues
Charges for services56,429$ -$ 56,429$
Total revenues
-56,429 56,429
Operating Expenses
Other supplies and expenses27,989 - 27,989
Depreciation166,403 - 166,403
Total Operating Expenses
-194,392 194,392
Operating income (loss)(137,963) - (137,963)
Non-operating Revenues (Expenses)
Interest and investment revenue1,087 - 1,087
Total non-operating revenue (expenses)
-1,087 1,087
Income (loss) before contributions and transfers(136,876) - (136,876)
Capital contributions29,775 - 29,775
Transfers out(518) (2,143,803) (2,144,321)
Change in net assets(107,619) (2,143,803) (2,251,422)
Total net assets - beginning
3,315,6612,143,8035,459,464
Total net assets - ending
$ -3,208,042$ 3,208,042$
99
100
COMBINING FINANCIAL STATEMENTS
Internal Service Funds
Internal Service Funds account for the financing of goods or services provided by one City department for
another.
Motor Pool Fund – This fund is used to account for the cost of operating and maintaining automotive and
other equipment used by City departments and the purchase of general government vehicles (those not
used by proprietary fund activities). Service charges are billed to departments on a monthly basis to cover
all expenses of the fund.
Technology Fund – This fund is used to account for the cost of operating and maintaining computer
software and equipment used by City departments. Service charges are billed to departments on a monthly
basis to cover all expenses of the fund.
Insurance Fund – This fund is used to account for the provision of group health coverage for all City
employees and others eligible under the City’s plan, including employee dependents and retirees.
101
102
103
104
Unaudited Statistical Section
This part of the City of La Porte, Texas’ 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 government's overall financial
health.
Contents Page
Financial Trends
106
These schedules contain trend information to help the reader understand how the
government's financial performance and well-being have changed over time.
Revenue Capacity
116
These schedules contain information to help the reader assess the government's most
significant local revenue sources, the property tax.
Debt Capacity
122
These schedules present information to help the reader assess the affordability of the
government's current levels of outstanding debt and the government's ability to issue
additional debt in the future.
Demographic and Economic Information
127
These schedules offer demographic and economic indicators to help the reader understand
the environment within which the government's financial activities take place.
Operating Information
129
These schedules contain service and infrastructure data to help the reader understand how
the information in the government's financial report relates to the services the government
provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports for the relevant year.
105
CITY OF LA PORTE
NET ASSETS BY COMPONENT
(1)
Last Nine Fiscal Years
Amounts in (000's)
(Accrual Basis of Accounting)
20032004200520062007
Governmental Activities
Invested in capital assets,
net of related debt23,400$ 32,753$ 28,933$ 28,424$ 27,529$
Restricted5,804 5,771 6,642 7,363 13,317
Unrestricted23,953 12,998 19,370 18,984 19,986
Total governmental activities net assets$ 51,52253,158$ 54,945$ 54,771$ 60,832$
Business-type Activities
Invested in capital assets,
net of related debt26,110$ 25,996$ 26,590$ 29,642$ 29,481$
Restricted3,043 3,663 3,407 2,1862,185
Unrestricted4,709 2,647 1,265 3,3973,296
Total business-type activities net assets
$ 32,30633,862$ 31,262$ 35,225$ 34,962$
Primary Government
Invested in capital assets,
net of related debt49,510$ 58,749$ 55,523$ 58,066$ 57,010$
Restricted8,847 9,434 10,050 9,549 15,501
Unrestricted28,663 15,645 20,635 22,380 23,281
Total primary government net assets$ 83,82887,020$ 86,207$ 89,996$ 95,793$
(1) The requirement for statistical data is ten years; only nine years are available at this time
106
Exhibit 1
2008200920102011
$ 32,66724,923$ 35,195$ 37,324$
16,17016,567 18,108 8,060
16,83818,985 13,904 26,859
$ 65,67660,475$ 67,207$ 72,243$
$ 40,20635,483$ 40,595$ 37,606$
2,1881,3531,460680
3,7992,4732,0274,199
$ 44,03241,471$ 44,082$ 42,485$
$ 72,87460,406$ 75,790$ 74,930$
17,52318,755 19,568 8,740
19,31122,785 15,932 31,058
$ 109,707101,945$ 111,290$ 114,729$
107
108
109
110
111
CITY OF LA PORTE
FUND BALANCES, GOVERNMENTAL FUNDS
Last nine Fiscal Years(1)
Amounts in (000's)
(Modified Accrual Basis of Accounting)
Fiscal Year
20032004200520062007
General Fund
Nonspendable69$ 69$ 69$ 70$ 83$
Committe
d
Assigne 372140 550 126 134
d
Unassigne 7,0937,037 8,644 11,582 14,494
d
Total general fund
$ 7,5347,246$ 9,263$ 11,778$ 14,711$
All Other Governmental Funds
Restricte 5,3515,164 6,236 6,705 9,318
d
Committe 6,44210,734 16,488 18,814 18,660
d
Assigne -- - - -
d
Total all other governmental funds
$ 11,79315,898$ 22,724$ 25,519$ 27,979$
(1) The requirement for statistical data is ten years; only nine years are available at this time.
112
Exhibit 3
2008200920102011
$ 102105$ 135$ 139$
29619915196
14,40513,75812,27419,118
$ 14,05914,806$ 12,560$ 19,353$
5,8138,489 7,644 14,084
17,94419,933 20,331 9,079
-- 7 -
$ 23,75728,423$ 27,982$ 23,163$
113
CITY OF LA PORTE
CHANGES IN FUND BALANCE, GOVERNMENTAL FUNDS
Last nine Fiscal Years(1)
Amounts in (000's)
(Modified Accrual Basis of Accounting)
Fiscal Year
2003200420052006
Revenues
Taxes22,923$ 22,949$ 24,046$ 25,688$
Donations- - 30 -
Harris County Joint Ventures- - 1,752 -
Licenses and permits200 320 531 683
Fines and forfeits847 555 678 848
Charges for services2,275 2,947 3,233 3,888
Intergovernmental480 576 1,113 1,174
Interest482 325 631 1,709
Miscellaneous125 33 184 163
Total Revenues
27,70527,332 32,197 34,154
Expenditures
General government5,543 7,971 6,849 7,237
Public safety10,477 10,415 10,533 11,072
Public works2,556 2,361 2,430 2,360
Health and sanitation1,823 1,759 1,808 1,814
Culture and recreation3,476 3,245 3,068 3,011
Debt service:
Principal1,590 1,490 1,330 1,195
Interest795 700 1,030 1,374
Capital outlay2,772 3,259 8,566 6,550
Total Expenditures
31,20029,032 35,615 34,613
Excess of revenues over (under) expenditures(1,700) (3,495) (3,418) (459)
Other Financing Sources (Uses)
General obligation bonds issued- - 16,587 6,965
Premium on refunding bonds issued- - - 191
Payment to refunded bond escrow agent1,920 3,469 3,222 6,056
Transfers in(3,424) (3,791) (3,774) (7,533)
Transfers out- 42 90
Capital lease proceeds- - - -
Sale of capital assets- - - -
Total other financing sources (uses)
(322)(1,504) 16,077 5,769
Net change in fund balances(3,203)$ (3,817)$ 12,659$ 5,310$
Debt service as a percentage of noncapital
expenditures9.1%7.8%8.7%9.2%
(1) The requirement for statistical data is ten years; only nine years are available at this time.
114
Exhibit 4
20072008200920102011
$ 30,06028,919$ 34,930$ 36,682$ 35,761
-30 - - -
-- - - -
560920 642 476 313
1,7261,244 1,833 1,803 1,724
3,9583,967 4,470 6,084 5,680
4,755716 4,868 989 917
1,8832,117 610 263 193
9077 105 125 242
43,03337,990 47,458 46,422 44,829
8,4187,696 9,869 9,788 10,289
15,61011,769 13,859 14,612 15,688
2,9092,407 6,664 2,819 3,118
2,4791,973 2,087 2,233 2,182
3,4703,103 3,817 5,048 5,314
1,6551,235 1,695 1,755 1,740
1,7581,582 1,572 1,588 1,871
6,35110,013 15,557 10,843 8,714
42,65039,779 55,120 48,686 48,916
383(1,789) (7,662) (2,264) (4,087)
-8,075 - 10,560 -
-38 - 225 -
7,6254,197 14,232 (4,410)
(7,501)(5,148) (12,119) 9,158 4,248
3221 137 (10,545) (5,012)
-- - -
-- - 5 6,822
1567,183 2,250 4,993 6,057
$ 5385,393$ (5,412)$ 2,729$ 1,971$
9.5%9.4%8.3%8.8%9.0%
115
CITY OF LA PORTE
ASSESSED VALUE AND ACTUAL VALUE OF TAXABLE PROPERTY
Last Ten Fiscal Years
(unaudited)
Less
Tax Less Other
Exempt Exemptions
Fiscal Tax Personal Real and Total Taxable
YearYearReal PropertyPropertyPropertyAbatementsAssessed Value
200220011,461,368,400$ 295,213,550$ 251,950,970$ 1,504,630,980$
200320021,498,049,850 270,257,240 255,642,570 1,512,664,520
200420031,546,560,410 279,687,470 265,840,970 1,560,406,910
200520041,601,433,200 311,721,280 278,265,540 1,634,888,940
200620051,777,351,563 325,549,640 407,734,605 1,695,166,598
200720061,861,821,075 350,191,031419,779,423 1,792,232,683
200820072,007,113,146 372,331,715 428,955,092 1,950,489,769
200920082,237,095,319 469,916,389 502,091,647 2,204,920,061
201020092,261,046,846 582,963,159 515,111,496 2,328,898,509
201120102,055,914,368 672,621,147 514,928,797 2,213,606,718
Source: Harris County Certified Tax Rolls and Corrections.
116
Exhibit 5
Assessed
Value as a
Total Estimated Percent of
Direct Tax Actual Taxable Actual Taxable
RateValueValue
$ 1,504,630,9800.710000$ 100%
1,512,664,5200.710000 100%
1,560,406,9100.710000 100%
1,634,888,9400.710000 100%
1,695,166,5980.710000 100%
1,792,232,6830.710000 100%
1,950,489,7690.710000 100%
2,204,920,0610.710000 100%
2,328,898,5090.710000 100%
2,213,606,7180.710000 100%
117
CITY OF LA PORTE
PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years
20022003200420052006
City of La Porte by fund:
General0.57000$ 0.57500$ 0.57500$ 0.61100$ 0.61100$
Debt service0.14000 0.13500 0.13500 0.09900 0.09900
Total Direct Rates
0.710000.710000.710000.710000.71000
Harris County Flood Control District0.04760 0.04174 0.03318 0.03322 0.03241
Harris County0.38390 0.38810 0.39990 0.39986 0.40239
Port of Houston Authority0.01830 0.01990 0.01670 0.01474 0.01302
Harris County Board of Education0.00630 0.00630 0.00630 0.00629 0.00629
Hospital District0.19020 0.19020 0.19020 0.19020 0.19216
La Porte I.S.D.1.63000 1.63000 1.68000 1.73400 1.73400
San Jacinto Jr. College District0.13070 0.13070 0.13910 0.14537 0.14537
Total Direct and Overlappin
g
Rates
$ 3.116943.11700$ 3.17538$ 3.23368$ 3.23564$
Tax rates per $100 of assessed valuation
Source: Harris County Appraisal District
118
Exhibit 6
20072008200920102011
$ 0.619000.61200$ 0.61900$ 0.61900$ 0.60500$
0.091000.09800 0.09100 0.09100 0.10500
0.710000.710000.710000.710000.71000
0.030860.03106 0.02922 0.02923 0.02809
0.389230.39239 0.39224 0.38805 0.39117
0.017730.01437 0.01636 0.02054 0.01856
0.005840.00585 0.00605 0.00658 0.00658
0.192160.19216 0.19216 0.19216 0.19216
1.325001.30500 1.32500 1.32500 1.35500
0.163410.14537 0.17080 0.17628 0.18560
$ 2.834232.79620$ 2.84183$ 2.84784$ 2.88716$
119
CITY OF LA PORTE
xhibit
E7
PRINCIPAL PROPERTY TAXPAYERS
Current Year and 10 Years Ago
20112002
% of% of
TaxableTaxableTaxableTaxable
AssessedAssessedAssessedAssessed
Property Tax PayerValueRankValueProperty Tax PayerValueRankValue
Conoco Phillips Co55,242,523$ 12.50%PPG Industries, Inc63,253,500$ 14.20%
OxyVinyls LP49,177,14922.22%Conoco Inc48,464,430 23.22%
Equistar Chemicals LP47,420,61832.14%Equistar Chemicals LP45,240,940 33.01%
Granite Underwood Dist Ctr LP44,944,71242.03%Houston Light & Power44,673,030 42.97%
Ineos USA LLC38,042,28051.72%Solvay Polymers Corp.37,068,510 52.46%
Underwood Distribution Ctr LP30,200,000 61.36%Occidental Electrochemical32,582,120 62.18%
Wilson Supply30,036,392 71.36%Dow Chemical Co.20,689,240 71.38%
PPG Industries Inc22,420,19681.01%Atofina Petrochemicals Inc.20,215,320 81.35%
Centerpoint Energy Inc21,295,31390.96%Oxy Vinyls LP19,717,000 91.31%
Port Crossing Land LP21,118,156100.95%Dupont Dow Elastomers15,954,160 101.06%
Subtotal359,897,339 16.26%347,858,250 23.12%
Other Taxpayers1,853,709,379 83.74%1,156,772,730 76.88%
Total2,213,606,718$ 100.00%1,504,630,980$ 100.00%
Source: Harris County Tax Assessor-Collector's records.
120
CITY OF LA PORTE
Exhibit 8
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Fiscal Collected within the
YearTaxes Levied Fiscal Year of the Levy Collections in Total Collections to Date
Endedfor thePercentageSubsequentPercentage
Sept 30,Fiscal YearAmountof LevyYearsAmountof Levy
200210,786,185$ 10,463,515$ 97.0%296,772$ 10,760,287$ 99.8%
200310,826,18410,491,25796.9%298,241 10,789,49899.7%
200411,178,35110,829,20296.9%300,488 11,129,69099.6%
200511,669,47311,334,57297.1%275,955 11,610,52799.5%
200612,080,35111,755,121 97.3%272,666 12,027,78799.6%
200712,703,850 12,418,873 97.8%225,790 12,644,66399.5%
200813,857,467 13,476,872 97.3%328,326 13,805,19899.6%
200915,654,937 15,377,149 98.2%195,734 15,572,88399.5%
201016,542,483 16,309,818 98.6%70,141 16,379,95999.0%
201115,716,610 15,599,930 99.3%- 15,599,93099.3%
121
CITY OF LA PORTE
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
(dollars in thousands, except per capita)
Governmental ActivitiesBusiness-Type Activities
GeneralCertificatesGeneral
FiscalObligationof ObligationOther RevenueObligationOther
YearBondsBondsObligationBondsBondsObligations
20028,210$ 2,700$ 5,400$ 975$ 1,440$ 7,710$
20036,770 2,550 5,400750 1,040 7,293
20045,430 2,400 5,4006255856,904
200511,925 11,050 5,400 500 145 6,500
200612,610 16,405 5,130 375 - 8,680
200712,070 24,055 4,860 250 - 7,958
200811,475 23,265 4,590 125 - 7,210
200910,870 22,445 4,320 - - 6,443
201011,665 26,350 4,050 - - 5,660
201110,940 25,605 3,780 - - 4,813
Note:
Details regarding the city's outstanding debt can be found in the notes to the financial statements
See Demographic and Economic Statistics for personal income and population data.
122
Exhibit 9
TotalPercentage
Primaryof PersonalPer
GovernmentIncome Capita
$ N/A80326,435$
N/A70423,803
N/A63321,344
N/A1,02835,520
N/A1,24043,200
N/A1,41349,193
N/A1,32046,665
N/A1,24144,078
N/A1,29847,725
N/A1,32245,138
123
CITY OF LA PORTE
xhibit 10
E
RATIO OF GENERAL BONDED DEBT TO TAXABLE VALUE,
GENERAL BONDED DEBT PER CAPITA,
AND TAXABLE VALUE OF ALL PROPERTY
Last Ten Fiscal Years
(dollars in thousands, except per capita)
Ratio of Net
Percentage of
General Less Debt Bonded Debt
Personal Per Capita
Fiscal Obligation Certificates Service Net Bonded to Assessed
(2)(2)
YearTax YearBondsof ObligationFundsDebtValueIncome
2002200116,310$ -$ 1,590$ 14,720$ 1.0%N/A447$
2003200212,170 2,550 1,797 12,923 0.9%N/A382
2004200310,830 2,400 1,584 11,646 0.7%N/A345
2005200417,325 11,050 1,705 26,670 1.6%N/A772
2006200517,740 16,405 1,814 32,331 1.9%N/A928
2007200616,930 24,055 1,926 39,059 2.2%N/A1,105
2008200716,065 23,265 2,00037,330 1.9%N/A1,051
2009200815,190 22,445 2,15135,484 1.6%N/A965
2010200915,715 26,350 3,11838,947 1.7%N/A1,152
2011201014,720 25,605 3,11337,212 1.7%N/A1,090
Note:
Details regarding the city's outstanding debt can be found in the notes to the financial statements.
(2) Population data can be found in demographic and economic statistics table.
124
CITY OF LA PORTE
Exhibit 11
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
September 30, 2011
(dollars in thousands, except per capita)
Estimated
EstimatedShare of
DebtPercentageOverlapping
Governmental UnitOutstandingApplicableDebt
Debt repaid with property taxes
Harris County2,372,617$ 0.82%19,455$
Harris County Department of Education7,980 0.82%65
Harris County Flood Control District103,675 0.82%850
Harris County Toll Road - Toll Road Bonds (a)- 0.82%-
La Porte ISD221,035 37.92%83,816
Port of Houston Authority758,774 0.82%6,222
San Jacinto Jr. College District322,081 6.07%19,550
Subtotal, overlapping debt129,958
City of La Porte direct debt
100%41,37541,375
Total direct and overlapping debt
$ 171,333
(a) Harris County Toll Road debt is considered self-supporting.
Source: Texas Municipal Reports
Percentages are based on total property values
125
CITY OF LA PORTE
Exhibit 12
PLEDGED-REVENUE COVERAGE
Last Ten Fiscal Years
Debt Service
revenues
Gross Operating
available
revenues expenses
Fiscal for Debt
(1)(2)
YearServicePrincipalInterestTotalCoverage
20025,988,595$ 4,814,158$ 1,174,437$ 625,000$ 132,418$ 757,418$ 1.6
20035,837,448 5,025,158 812,290 580,000 115,948 695,948 1.2
20045,836,221 5,125,635 710,586 580,000 71,293 651,293 1.1
20056,193,451 5,259,943 933,508 565,000 43,161 608,161 1.5
20067,438,016 5,389,783 2,048,233 270,000 111,712 381,712 5.4
20076,722,774 5,681,548 1,041,226 262,500 106,828 369,328 2.8
20088,916,777 5,653,497 3,263,280 387,500 91,605 479,105 6.8
20097,920,114 5,743,7252,176,389 387,50076,350463,850 4.7
20107,822,2946,514,3431,307,951 525,000216,458741,458 1.8
20118,569,7676,458,4832,111,284 585,000104,488689,488 3.1
(1)
Total revenues including interest
(2)
Total operating expenses less depreciation
126
CITY OF LA PORTE
Exhibit 13
DEMOGRAPHIC AND ECONOMIC STATISTICS
Last Ten Fiscal Years
Fiscal YearPer Capita
EndedPopulationPersonalPersonalMedianSchoolUnemployment
(2)(2)(3)(4)(5)
(1)
IncomeIncomeAge EnrollmentRate
Sept. 30,
200232,910N/AN/AN/A7,7326.2%
200333,789N/AN/AN/A7,6486.6%
200433,712N/AN/AN/A7,6295.7%
200534,538N/AN/AN/A7,8085.3%
200634,825N/AN/AN/A7,7864.7%
200735,362N/AN/AN/A7,8894.4%
200835,518N/AN/AN/A7,9405.2%
200936,779N/AN/AN/A7,8309.4%
201033,800N/AN/A337,7818.2%
201134,138N/AN/A337,7329.0%
Data sources:
(1) Estimated poulation provided by city staff
(2) Personal income and per capita personal income is curently unavailable
(3) Median age data prior to 2010 is not available, medium age provided by 2010 Census
(4) School enrollment provided by La Porte Independent School District
(5) Unemployment rates provided from the Bureau of Labor Statistics
127
128
CITY OF LA PORTE
Exhibit 15
FULL-TIME EMPLOYEES BY FUNCTION/PROGRAM
Last Seven Fiscal Years
2005200620072008200920102011
General Government
76768079787990
Public Safety:
138135 147 142 143 144 144
Public Works
3232 32 32 32 32 32
Health and Sanitation
2122 21 22 22 22 24
Culture and recreation
4547 44 45 45 46 46
Water services
2726 25 25 25 25 25
Sewer Services
2020 20 20 20 20 20
Golf Course13 13 12 12 12 12 -
Sylvan Beach
Convention Center3 3 4 4 4 - -
375374 385 381 381 380 381
Total
129
CITY OF LA PORTE, TEXAS
OPERATING INDICATORS BY FUNCTION / PROGRAM
Last Ten Fiscal Years
Fiscal Year
20022003200420052006
Function / Program
Police
Physical arrests2,1932,2712,0002,3302,465
Tickets processed9,2989,6056,5936,8778,212
Fire
Number of calls answered6109761,3431,7472,028
InspectionsN/AN/A500500N/A
Highways and streets
Street resurfacing (linear feet)26,20027,80033,80022,97527,835
Potholes repaired271413524531321
Sanitation
Cu. Yds. Garbage collected28,65528,24329,67530,02230,795
Cu. Yds Trash collected52,79650,11154,87549,14049,140
Culture and recreation
Fitness center admissions73,76476,31184,35381,86870,558
Water
Number of water meters10,95710,98711,18911,39111,592
Average daily consumption
3.14.03.84.13.9
(millions of gallons)
Water main breaks491440299437483
Wastewater
Average daily sewage treatment3.43.94.03.52.8
(thousands of gallons)
Golf Course
Number of Paid Rounds Played42,54038,59438,90134,96132,731
Source: Various City departments
Notes: N/A - Data not available
130
Exhibit 16
20072008200920102011
2,4892,6422,7372,5382,354
9,65215,35216,09816,60314,619
1,6031,7991,4091,5591,483
600320600690725
22,10019,88723,55938,36560,472
1,2609961,0121,236465
29,27929,28229,89429,64227,961
52,25048,13678,90048,36845,778
62,82862,24553,40178,11864,989
11,74311,91311,96812,01512,061
3.84.04.03.94.6
467455498417666
3.22.83.72.8
3.9
32,43335,83936,009
31,27134,848
131
132
Exhibit 17
20072008200920102011
11111
7474747575
62122
44444
1414141414
211295126126126
1,8042,4002,3872,3872,415
33755
347347356356356
2222212121
66655
11144
11111
176178180180181
1,0761,1611,1681,1791,186
189189191191192
9292929597
133
March 26, 2012
Honorable Mayor and
Members of the City Council
City of La Porte, Texas
604 W. Fairmont Pkwy
La Porte, Texas 77571
We have performed the procedures enumerated below, which were agreed to by the City of La
Porte’s City Council (the “City”) solely to assist you in reviewing the La Porte Economic
Development Corporation (the “EDC”) expenditures for the two year period ending September
30, 2011. This engagement to apply agreed-upon procedures has been performed in accordance
with attestation standards established by the American Institute of Certified Public Accountants.
The sufficiency of the procedures is solely the responsibility of the specified users of this report.
Consequently, we make no representation regarding the sufficiency of the procedures described
entation regarding the sufficiencyentation regarding the sufficiency
below for the purpose for which this report has been requested or for any other purpose.
been requested or for any other purpose.been requested or for any other purpose.
La Porte Economic Development Corporation
The City established the City of La Porte Economic Development Corporation (the “EDC”)
onomic Development Corporation (the “EDC”) onomic Development Corporation (the “EDC”)
onomic Development Corporation (the “EDC”)
onomic Development Corporation (the “EDC”)
solely to benefit and promote economic development for the City of La Porte using the ½ cent
solely to benefit and promote economic development for the City of La Porte using the ½ cent ent for the City of La Porte using the ½ cent
solely to benefit and promote economic developm
sales tax allowed by the Development Corporation Act of 1979. The revenues and expenditures
opment Corporation Act of 1979. opment Corporation Act of 1979.
are reported in the City’s Section 4B Sales Tax Fund. Expenditures made must be in compliance
’s Section 4B Sales Tax Fund. Expend’s Section 4B Sales Tax Fund. Expend
with the Local Government Code Chapter 501 Provisions Governing Development Corporations.
with the Local Government Code Chapter 501 Prwith the Local Government Code Chapter 501 Pr
Purchases made through the fund are made following the City’s policies and procedures for
Purchases made through the fund are made folloPurchases made through the fund are made follo
purchasing goods and services. The individuals responsible for approving purchases use the
purchasing goods and services. The individuals purchasing goods and services. The individuals
Local Government Code and EDC Handbook to ensure the expenditures are in compliance.
Local Government Code and EDC Handbook to ensuLocal Government Code and EDC Handbook to ensu
We obtained the general ledger detail for the Section 4B Sales Tax Fund for the period October
We obtained the general ledger detail for the SecWe obtained the general ledger detail for the Sec
1, 2009 to September 2, 2011. We compiled a list of all expenditures made by check number for
that time period, and obtained the checks along with supporting documentation for 100% of the
items. There were 380 items for a total of $184,815. For each item, we reviewed to determine
that the following attributes were met:
The expenditure was in compliance with the Local Government Chapter 501 Provisions
Governing Development Corporations.
The expenditure was made following the City’s ordinances and procedures for
purchasing goods and services as follows:
Check requisitions are manually signed by the authorized individual (supervisor
o
or department head).
Purchase requisitions are approved in the system by the department supervisor
o
The expenditure is supported by an invoice and receiving report before payment is
o
made.
||||
3411 Richmond Suite 500 Houston, TX 77046 (P) 713.621.1515 (F) 713.621.1570
||||
2000 Loop 197 North Suite 200 Texas City, TX 77590 (P) 409.948.4406 (F) 409.948.0364
www.null-lairson.com
Mayor and City Council
La Porte, Texas
Page 2
For EDC expenditures, additional approval is required by the City Manager or Assistant City
o
Manager.
Expenditures greater than $15,000 are approved by the EDC Board and City Council.
o
Quotes are obtained for purchases between $2,000 and $25,000
o
Purchases greater than $25,000 require a competitive bid
o
The expenditure was supported by the approved PO/requisition and invoice.
For all expenditures tested, we noted no issues of non-compliance with Local Government Coded Chapter 501.
Only three instances of non-compliance with the City’s purchasing procedures were noted as follows:
VendorDateAmount PurposeAttribute failed
Not signed by City
Manager/Assistant City Manager
Due North Consulting, Inc. 12/23/2010$ 250Promotional Activities
Not signed by City
France Publications Inc.3/25/20111,750 Promotional ActivitiesManager/Assistant City Manager
Not signed by City
r
Due North Consulting, Inc. 3/25/2011250 Promotional ActivitiesManager/Assistant City Manage
Manager/Assistant City ManageManager/Assistant City Manage
$ 2,250
Percent of Total Expenditures1.2%
In addition, we also tested expenditures for compliance with the provision that no more than 10% of corporate
xpenditures for compliance with thxpenditures for compliance with thxpenditures for compliance with thxpenditures for compliance with the provision that e provision that
revenues should be spent for promotional purposes. We compared promotional items over the last two years for
revenues should be spent for promotional purposes. We compared promotionarevenues should be spent for promotional purposes. We compared promotiona
compliance with this regulation:
20112010
Total revenues1,027,080 1,571,258
Total revenues1,027,080Total revenues1,027,080
10% of total revenues102,708 157,126
10% of total revenues102,70810% of total revenues102,708
Total promotional expenses18,277 17,717
Total promotional expenses18,277Total promotional expenses18,277
Amount over (under) 10% revenue ceiling(84,431) (139,409)
Promotional expenses as a % of revenues2%1%
It appears that the entity is in compliance with this regulation.
Conclusion:
Three items out of 380 tested is less than 1 percent of the population. With regards to following internal
controls, it appears that the City employees follow the City’s internal controls with regards to purchasing. It is
however recommended that no payments be processed without the proper approval to ensure compliance
always.
We were not engaged to, and did not perform, an audit, the objective of which would be the expression of an
opinion on the amounts to be reimbursed to the participants. Accordingly, we do not express such an opinion.
Had we performed additional procedures, other matters might have come to our attention that would have been
reported to you.
Mayor and City Council
La Porte, Texas
Page 3
This report is intended solely for the information and use of the specified users and is not intended to be and
should not be used by anyone other than these specified parties.
We appreciate the opportunity to be of service to the City and the courtesy and cooperation extended to us by
the EDC and City staff during the course of our engagement. Please feel free to contact us regarding any of the
items referred to above or any other matters of concern.
Texas City, Texas
March 26, 2012
CITY OF LAPORTE, TEXAS
FEDERAL SINGLE AUDIT REPORT
YEAR ENDED SEPTEMBER 30, 2011
2000 Loop 197 N., Suite 200
Texas City, Texas 77590
(409) 948-4406
CITY OF LA PORTE, TEXAS
FEDERAL SINGLE AUDIT REPORT
TABLE OF CONTENTS
Page
Independent Auditors’ Report on Internal Control over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed
1
in Accordance with Government Auditing Standards
Independent Auditors’ Report on Compliance with Requirements that Could have a
Direct and Material Effect on each Major Program and Internal Control over
Compliance in Accordance with OMB Circular A-133 3
Schedule of Findings and Questioned Costs 6
Schedule of Expenditures of Federal Awards 8
Notes to Schedule of Expenditures for Federal Awards 9
Independent Auditors’ 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
To the Honorable Mayor
and City Council
City of La Porte, Texas
We have audited the financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of the City of La Porte, Texas (the “City”) as of and for the year
ended September 30, 2011, which collectively comprise the City’s basic financial statements and have
issued our report thereon dated March 26, 2012. 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.
Internal Control over Financial Reporting
Management of the City is responsible for establishing and maintaining effective internal control over
financial reporting. In planning and performing our audit, we considered the City’s internal control over
financial reporting as a basis for designing our auditing procedures for the purpose of expressing our
opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness
of the City’s internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the City’s internal control over financial reporting.
Adeficiency 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.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not
identify any deficiencies in internal control over financial reporting that we consider to be material
weaknesses, as defined above.
1
||||
3411 Richmond Suite 500 Houston, TX 77046 (P) 713.621.1515 (F) 713.621.1570
||||
2000 Loop 197 North Suite 200 Texas City, TX 77590 (P) 409-948-4406 (F) 409-948-0364
www.null-lairson.com
Honorable Mayor and City Council
City of La Porte, Texas
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
This report is intended solely for the information and use of the City Council, management, others within
the entity, and other applicable federal awarding agencies and pass-through entities and is not intended to
be, and should not be used by anyone other than these specified parties.
Texas City, Texas
March 26, 2012
2
Independent Auditors’ Report on Compliance with Requirements that Could
have a Direct and Material Effect on each Major Program and on Internal
Control over Compliance in Accordance with
OMB Circular A-133
To the Honorable Mayor
and City Council
City of La Porte, Texas
Compliance
We have audited City of La Porte’s (the “City”) compliance with the types of requirements described in
the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that could
have a direct and material effect on each of the City’s major federal programs for the year ended
September 30, 2011. The City's major federal programs are identified in the summary of auditors’ results
section of the accompanying schedule of findings and questioned costs. Compliance with the
requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is
the responsibility of the City’s management. Our responsibility is to express an opinion on the City's
compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of
States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133
require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance
with the types of compliance requirements referred to above that could have a direct and material effect
on a major federal program occurred. An audit includes examining, on a test basis, evidence about the
City's compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our
audit does not provide a legal determination of the City's compliance with those requirements.
In our opinion, the City complied, in all material respects, with the compliance requirements referred to
above that could have a direct and material effect on each of its major federal programs for the year ended
September 30, 2011.
3
||||
3411 Richmond Suite 500 Houston, TX 77046 (P) 713.621.1515 (F) 713.621.1570
||||
2000 Loop 197 North Suite 200 Texas City, TX 77590 (P) 409-948-4406 (F) 409-948-0364
www.null-lairson.com
Honorable Mayor and City Council
City of La Porte, Texas
Internal Control over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over
compliance with the requirements of laws, regulations, contracts and grants applicable to federal
programs. In planning and performing our audit, we considered the City’s internal control over
compliance with the requirements that could have a direct and material effect on a major federal program
to determine the auditing procedures for the purpose of expressing an opinion on compliance and to test
and report on internal control over compliance in accordance with OMB Circular A-133, but not for the
purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly,
we do not express an opinion on the effectiveness of the City’s internal control over compliance.
Adeficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent or detect and correct noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a
deficiency, or combination of deficiencies in internal control over compliance, such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not
identify any deficiencies in internal control over compliance that we consider to be material weaknesses,
as defined above.
Schedule of Expenditures of Federal Awards
We have audited the financial statements of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City as of and for the year ended
September 30, 2011, which collectively comprise the City’s basic financial statements, and have issued
our report thereon dated March 26, 2012, which contained unqualified opinions on those financial
statements. Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City’s basic financial statements. The schedule of expenditures of federal
awards is presented for purposes of additional analysis as required by U.S. Office of Management and
Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a
required part of the basic financial statements. Such information is the responsibility of management and
was derived from and relates directly to the underlying accounting and other records used to prepare the
financial statements. The information has been subjected to the auditing procedures applied in the audit of
the basic financial statements and certain additional procedures, including comparing and reconciling
such information directly to the underlying accounting and other records used to prepare the financial
statements or to the financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the information is
fairly stated in all material respects in relation to the basic financial statements as a whole.
4
Honorable Mayor and City Council
City of La Porte, Texas
Closing
This report is intended solely for the information and use of the City Council, management, others within
the organization, and other applicable federal awarding agencies and pass-through entities and is not
intended to be, and should not be used by anyone other than these specified parties.
Texas City, Texas
March 26, 2012
5
CITY OF LA PORTE, TEXAS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the Year Ended September 30, 2011
I.Summary of Auditors’ Results
Financial Statements
Type of auditors’ report issued: Unqualified
Internal control over financial reporting:
Material weakness(es) identified that are not
No
considered to be material weaknesses?
Significant deficiencies identified that are not
None reported
considered to be material weaknesses?
Noncompliance material to the financial statements
No
noted?
Federal Awards
Internal control over major programs:
Material weakness(es) identified? No
Significant deficiencies(s) identified that are not
None reported
considered to be material weaknesses?
Type of auditors’ report issued on compliance with
Unqualified
major programs.
Any audit findings disclosed that are required to be
reported in accordance with section 510(a) OMB No
Circular A-133?
Identification of major programs:
Name of Federal Program or Cluster CFDA Numbers
Community Development Block Grant/States Grant 14.228
Dollar Threshold Considered Between Type A and
$300,000
Type B Federal Programs
Auditee qualified as low risk auditee? Yes
6
CITY OF LA PORTE, TEXAS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (continued)
For the Year Ended September 30, 2011
II. Financial Statement Findings
None
III. Federal Awards Findings and Questioned Costs
None
IV. Schedule of Prior Year Findings
No prior year findings
V. Corrective Action Plan
N/A
7
CITY OF LA PORTE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
September 30, 2011
Federal Grantor /Pass ThroughCFDAPass ThroughFederal
Grantor/Program TitleNumberGrantor's NumberExpenditures
U. S. Department of Justice
Passed through United States Attorney Southern
District of Texas:
2010 High Intensity Drug Trafficking Areas Program
95.001G10HN0012A32,448$
Direct Programs:
Equitable Sharing Program
16.00079,855
2009 Bulletproof Vest Partnership Program
16.607137
2010 Bulletproof Vest Partnership Program
16.6075,290
2010 Justice Assistance Grant Program (ARRA)
16.8042010-H4920-TX-DJ11,657
Total U. S. Department of Justice
129,387
U. S. Department of Homeland Security
Passed through Governor's Division of
Emergency Management
Hazard Mitigation Grant Program
97.039FEMA-1791-DR-TX37,466
2008-2011 State Homeland Security Grant Program
97.0732008-GE-T8-00344,334
State Homeland Security Grant Program
97.0732010-SS-T0-000858,000
Direct Programs:
Assistance to Firefighters Grant
97.044EMW-2010-FO-0029038,000
Total U. S. Department of Homeland Security
137,800
U. S. Department of Health and Human Services
Passed through City of Houston Department of
Health and Human Services
Special Program for Aging, Title III, Part C,
Nutrition Services - Congregate
93.045460000950626,080
Special Program for Aging, Title III, Part C,
Nutrition Services - Delivered
93.045460000950635,770
Total U. S. Department of Health and Human Services
61,850
U. S. Department of Housing and Urban Development
Passed through Harris County Community
and Economic Development
Community Development Block Grant/State's Program
14.228DRS010231454,854
Total U. S. Department of Housing and Urban Development
454,854
U. S. Department of Transportation
Passed through Texas Department of Transportation
Airport Improvement Program
20.106M112LPRTE59,550
Total U. S. Department of Transportation
59,550
Total Federal Awards
$ 843,441
8
CITY OF LA PORTE, TEXAS
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Note 1 -Basis of Accounting
The City of La Porte, Texas accounts for federal funding using the modified accrual method of
accounting. This basis of accounting recognizes revenues in the accounting period in which they
become susceptible to accrual, i.e. both measurable and available, and expenditures in the accounting
period in which the liability is incurred, if measurable, except for certain compensated absences,
claims and judgments, which are recognized when the obligations are expected to be liquidated with
expendable available financial resources. Equipment purchases for grant purposes are treated as
expenses in the schedule of expenditures of federal awards and typically capitalized for financial
statement purposes.
Federal grant funds are considered to be earned to the extent of expenditures made under the provisions of
the grant, and, accordingly, when such funds are received, they are recorded as deferred revenues until
earned. Generally, unused balances are returned to the grantor at the close of specified project periods
Note 2 - Basis of Presentation
The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal grant
activity of the City under programs of the federal government for the year ended September 30, 2011.
The information in this schedule is presented in accordance with the requirements of the Office of
Management and Budget (OMB) Circular A-133, Audits of States, Local Government, and Non-Profit
Organizations. Because the schedule presents only a selected portion of the operations of the City, it is
not intended to and does not present the financial position, changes in net assets or cash flows of the City.
9