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HomeMy WebLinkAbout10-24-05 Regular Meeting of Fiscal Affairs Committee Minutes STATE OF TEXAS )( COUNTY OF HARRIS )( CITY OF LA PORTE )( NOTICE IS HEREBY GIVEN OF A REGULAR MEETING OF FISCAL AFFAIRS COMMITTEE TO BE HELD ON JANUARY 23, 2006 AT 5:00 P.M. AT LA PORTE CITY HALL COUNCIL CHAMBERS, 604 WEST FAIRMONT PARKWAY, LA PORTE, TEXAS, REGARDING THE ITEMS OF BUSINESS ACCORDING TO THE AGENDA LISTED BELOW: 5:00 P.M. -REGULAR SESSION 1. CALL TO ORDER 2. CONSIDER APPROVAL OF MINUTES OF REGULAR MEETING OF FISCAL AFFAIRS COMMITTEE HELD OCTOBER 24, 2005. 3. RECEIVE READING FILE ON REGIONAL ISSUES - C. Alexander 4. RECEIVE AND REVIEW FOURTH QUARTER (FY 2005) INVESTMENT REPORT - S. Wolny 5. RECEIVE AND REVIEW 2005 AUDIT REPORT - M. Dolby/T. Peterson 6. REVIEW REQUEST FOR HABITAT FOR HUMANITY REGARDING ACQUISITION OF THE DELINQUENT PROPERTIES - J. Joerns/K. Powell 7. RECEIVE AND REVIEW CREDIT CARD REPORT - M. Dolby 8. ADMINISTRATIVE REPORTS 9. COMMITTEE COMMENTS 10. ADJOURNMENT There may be a possible quorum of City Council present at this meeting and may participate in discussion at this meeting, however, they will not vote on matters. . THIS FACILITY HAS DISABILITY ACCOMMODATIONS AVAILABLE. REQUESTS FOR ACCOMMODATIONS OR INTERPRETIVE SERVICES AT MEETINGS SHOULD BE MADE 48 HOURS PRIOR TO THIS MEETING. PLEASE CONTACT CITY SECRETARY'S OFFICE AT 281-471-5020 OR TDD LINE 281- 471-5030 FOR FURTHER INFORMATION. Martha A. Gillett, TRMC City Secretary Date posted • 2 CJ • MINUTES OF THE LA PORTE FISCAL AFFAIRS COMMITTEE October 24, 2005 Call to Order The meeting was called to order by Councilman Ebow at 5:00 p.m. Members of Committee Present: Councilmembers Barry Beasley, Howard Ebow, Tommy Moser and Louis Rigby. Members of Committee Absent: Chairperson Chuck Engelken. Members of City Executive Staff and City Employees Present: City Manager Debra Feazelle, Assistant Finance Director Michael Dolby, City Secretary Martha Gillett, Budget Investment Officer Shelley Wolny and Assistant City Manager John Joerns. Other citizens: None 2. Consider approval of Minutes of Regular Meeting of La Porte Fiscal Affairs Committee Minutes held on August 22, 2005. Motion was made by Committee Member Beasley to approve the minutes as presented. A second by Committee Member Rigby. The motion carried. Ayes: Beasley, Moser and Rigby Nays: None Abstain: Councilmember Ebow 3. Consent Agenda Assistant Finance Director, Michael Dolby presented the Tax Resale Property and recommended approval of 1 Parcel Councilmember Rigby suggested we not include a copy of the check with citizen's home address and phone number in the future. It was the consensus of the committee not to include in back up in the future. Motion by Councilmember Rigby to approve the Tax Resale property as presented. Second by Councilmember Beasley. The motion carried. Ayes: Beasley, Rigby, Ebow and Moser. Nays: None Abstain: None 4. Budget Officer, Shelley Wolny provided the fourth quarter (FY 2005) Investment Report. • Minutes of the La Porte Audit Committee -October 24, 2005 -Page 2 5. Budget Officer, Shelley Wolny provided an overview of the recommended amendment to the Investment Policy It was noted changes to page 11 of the report. 6. Assistant Finance Director, Michael Dolby provided the credit card report. Mr. Dolby noted there was not anything out of the ordinary noted in report. The committee requested a breakdown on what the $964.40 charge to WP Solace Enterprises included. Breakdown on the personal check for $45.92 provided by City Manager? 7. Committee Comments. There were no additional comments made by the committee. 8. Adjournment There being no further business to come before the Committee, the meeting was adjourned at 5:25 p.m. Respectfully submitted, Martha A. Gillett, TRMC, CMC City Secretary Approved this 23RD day of January, 2006. LAG. Chairperson Chuck Engelken 3 • Green, Shannon From: Alexander, Cynthia Sent: Wednesday, November 09, 2005 3:48 PM To: Green, Shannon Subject: FW: Sugar Land: council okays increase in over-65 and disabled exemptions For audit committee. c Original Message Sent: Thursday, August 25, 20051:31 AM Subject: Sugar Land: council okays increase in over-65 and disabled exemptions Sugar Land okays increase in over-age and disabled exemptions By Barbara Fulenwider Fort Bend/Southwest Star Even though one Sugar Land councilman opposes the policy to increase the over-65 and disabled persons exemptions each year that the city can afford to, and another wants the policy revisited, council approved a $2,857 increase in the exemption at their Aug. 16 meeting. What that means for the 2,611 residents it applies to is they will pay ~9 less on their city property tax bill for 2005. The homestead exemption for 2004 was $64,800 and will go up to $67, 727 and is in addition to the $5,000 minimum homestead exemption all homeowners in Sugar Land get. The total result in tax savings for seniors and the disabled, with the $5,000 exemption, will be $231. Dorothy Painter, revenue director, told council the exemption would take X7.4 million of taxable value off the city's certified tax rolls and cost the city a total of $23,655 in revenues. She said the average tax bill for Sugar Land seniors is $423.68 compared to an average tax bill of Texas cities of $927.76 on a home valued at X200,000. The purpose of the policy is to keep ever-rising taxes from badly impacting those on fixed incomes. Because property values increase annually, tax bills increase, so a tax break for seniors and the disabled is aimed at helping them to afford to stay in their homes. Councilman Russell Jones noted against the exemption in keeping with his consistency of having done so since council's policy was adopted. At council's Aug. 2 meeting, when the increase in the exemption was first on council's agenda, Jones explained why. He said, "The exemption we grant is the second highest of cities in our comparable group in the state. We're already at the top of the exemption list, so we don't have any • real need to provide this. Many cities in the state still have a~10,000 exemption." The total tax bill for our average senior citizen, based on all the exemptions, has to be the lowest in the state among comparably sized cities. We're already there. We've accomplished the goal of giving seniors a tax break." What this does is add an ever greater break and shifts the tax burden from one group of people to another. If we're already at the biggest break in the state, or close to it, why are we putting an additional burden on other citizens to give this group another break," Jones said. Jones pointed out that `the average value of the homes of our seniors are only slightly below that of our other citizens. We don't have a group of seniors who can't afford to pay their property taxes." He also said there are other options seniors can take such as deferred tax payments and quarterly tax payments to the city without penalty. "We've got an aging population. Boomers are getting there and soon there will be a whole bunch of 65 guys who will be a bigger and bigger tax burden in terms of relative shift of taxes. Demographically speaking, it doesn't make sense to make this exemption larger and larger every year," Jones said. Councilman Michael Schiff said he doesn't disagree with anything Jones said and added that he would vote in favor of it because it was council's policy that staff followed in proposing the increase that Sugar Land has granted to the over-65 since 2001. "I will vote for this but ash the city manager over next year to revisit the issue and see if we want to continue this policy." On the flip side was Council Member Cyril Hosley who reminded council that the policy was agreed on in an effort to level the playing field for all groups of Sugar Land citizens. "We spend a great deal of our taxes on youth and this was just a little way of saying that if we hadn't done that we'd be able to lower taxes." The average value on seniors' homes have gone up dramatically. There are neighbors in my neighborhood who want to pay their share of taxes but who bought a $100,000 house and are now looking at paying taxes on $300,000 thanks to the increased property values." The senior and disabled tax break, she said, "is not much but kind of makes up for some of the things we spend money on for youths and families. We've said this is the best we can do, and if seniors want a tax freeze, we'll take this all away, but this was a way of compromising. A tax freeze would hurt everybody in this city a lot more than our policy,"Hosley said. Councilman Dennis Parmer said, "We've made a commitment and we need to follow it. I will continue to support the exemption. I support the exemption as stated." • The motion to approve was made by Hosley, seconded by Cou~ilman Thomas Abraham and approved by council. Since 2001 the over-age exemption has increased from $40,000 to $67,727 and since 2004, the exemption for disabled persons has gone from X10,000 to $67,727. Homeowners are not eligible for both exemptions. Council's policy provides that the city manager will recommend an increase in the over- age and disabled persons exemption when (the city's) economic and financial conditions allow. When such conditions exist, the over-age and disabled persons exemption will be increased annually based on the average percent increase in residential revaluation, not to exceed X100,000. • • Green, Shannon From: Alexander, Cynthia Sent: Wednesday, November 09, 2005 3:20 PM To: Green, Shannon Subject: FW: Lake Dallas: council member seeks bigger tax break for seniors For audit committee Original Message Sent: Saturday, October 08, 200511:07 AM Subject: Lake Dallas: council member seeks bigger tax break for seniors Council member seeks bigger tax break for Lake Dallas seniors By Marcia Rios Lake Cities Sun Writer Discussed by federal, state and local governments for the past 107 years has been the topic of increased property tax relief for elderly homeowners. Lake Dallas City Council members recently brought up the issue once again. Currently, Lake Dallas offers a flat deduction of X10,000 off the amount of property tax assessed. Council member Richard Martin stated it was his interest in increasing the deduction to X30, 000. "The city manager and I have gone over the numbers and we feel strongly we could do the ,$20,000 credit, but what we would really like to do is the $30,000 credit if at all possible,"Martin said. Currently senior citizens see a reduction in property taxes of approximately $71 on the average priced home in the city. With the $20,000 credit, seniors would see a $142 property tax savings and $210 saved at the $30,000 credit level. "Some type of property-tax relief is available to elderly homeowners in every state of our country, and I think that is wonderful. One of the things I said when I ran for office was I wanted to address this issue and try to do more for the elderly,"Martin said. "Well, I think we started the process a little too late into the budgeting process this year, but with the work that has been done with (city manager) Mr. Berner, I believe we will be able to act on this next year,"Martin said. Historically state and local government officials have considered and approved many variations of tax-relief programs in an attempt to assist senlars while attempting to avoid overburdening younger taxpayers. The first property-tax relief program for senior citizens in the country was approved in Utah in 1898. • Green, Shannon From: Alexander, Cynthia Sent: Wednesday, November 09, 2005 3:18 PM To: Green, Shannon Subject: FW: Burleson: voters to consider tax freeze for elderly and disabled For audit committee Original Message Sent: Thursday, October 13, 2005 6:21 AM Subject: Burleson: voters to consider tax freeze for elderly and disabled Posted on Thu, Oct. Y3, 2005 Burleson voters to consider tax freeze By Elizabeth Campbell Star-Telegram Staff Writer BURLESON -Voters will decide next month whether to freeze property taxes for residents 65 and older and the disabled. Early voting begins Oct. 24 and ends Nov. 4. The special election is Nov. 8. If taxes are frozen, officials estimated that Burleson could lose $8.5 million to X12.9 million in property tax revenue in the next 15 years, based on a 4 percent growth rate. "If we see a larger growth rate, the loss will be even more,"said Burleson spokeswoman Sheri Campbell-Husband. To offset some of the losses, the City Council is expected to vote tonight to rescind the X22,500 homestead exemption currently in place for senior citizens and the disabled, but only if voters approve the tax freeze. People who already have the exemption would beep it. Currently, 1, 725 residents receive the homestead exemption. Burleson's population is more than 28,000. R.D. Scott, 72, who retired as the Burleson school district's maintenance and operations director in 1999, said he went before the council requesting the tax freeze. "I talked to the mayor about it, and we didn't want to see a petition, so it is on the ballot,"he said. Scott questioned the city's projections of how much revenue would be lost if taxes are frozen. Since Burleson is growing, new businesses and homes are being built, and the city will • • get more in property and sales taxes, he said. The freeze would be especially helpful to people who lice on their Social Security benefits, he said. The property tax freeze issue has been contentious in other communities such as Benbrook and Haltom City, but Campbell-Husband said there have not been any protests in Burleson. Green, Shannon From: Alexander, Cynthia Sent: Wednesday, November 09, 2005 3:17 PM To: Green, Shannon Subject: FW: Friendswood to decide tax freeze For audit committee. Original Message Sent: Thursday, October 13, 2005 7:00 AM Subject: Friendswood to decide tax freeze Oct. I1, 2005, 10:00PM Friendswood to decide tax freeze City Council already has OK'd ordinance on first vote; second set for Monday By THAYER EVANS Chronicle Correspondent RESOURCES WANT TO GO? Friendswood City Council will consider final approval of an ordinance that would freeze city property taxes for seniors and the disabled. • When: 7 p.m. Monday • Where: Friendswood City Hall, 910 S. Friendswood Drive Friendswood City Council will decide Monday whether to freeze property tax bills for the disabled and those 65 and older. City Council already has passed the ordinance by a unanimous vote during its Oct. 3 meeting, City Manager Ron Cox said. A second vote is needed for it to be adopted. Should City Council pass the ordinance, Friendswood would join Clear Lake Shores, Dickinson, La Marque, Santa Fe and Texas City as the other cities in Galveston County to adopt a freeze. In June, Galveston County commissioners also approved one. A state constitutional amendment approved by voters in 2003 allows for the freeze, which cannot be repealed once adopted by a city or county. The freeze means a person's home value could increase and the county tax rate could rise, but the city tax bill would remain the same, unless improvements are made to the home. • Friendswood's property tax rate is 60.4 cents per $100 valuation, Cox said. "We have a growing senior population and (the freeze is) something that will help defray their increase in cost of living over the years to come," Cox said. "Ultimately, the council felt it was the best thing for our community at this point." All Friendswood residents who own homes already receive an annual homestead exemption of 20 percent, city spokesman Nick Haby said. Haby said 9 percent of the city's population -or approximately 3,000 residents -are seniors who are eligible for the freeze. He said the city does not know how many disabled residents are eligible for it. Had the freeze been in effect the last five years, Haby said, the city would have lost an average of $107,000 annually in revenue. "It will have an impact," Cox said. 'Any time you vote to reduce your revenues, it has an impact. The services are still provided to our seniors regardless, but the overall financial impact at this point is not significant. It'll certainly grow in the future. We'll just have to account for that as time goes on." Councilman Tracy Goza said the freeze is an "excellent idea." "We're taxing the older folks out of their homes,"Goza said. "I'm for less taxes and if we've got to start with the seniors and disabled for tax cuts then maybe we can give a tax cut everywhere else, too." He said he is not worried about the impact the freeze could have on the city's revenues. "We've got the ability to get more money if we needed it,"Goza said. • Green, Shannon From: Alexander, Cynthia Sent: Wednesday, November 09, 2005 3:14 PM To: Green, Shannon Subject: FW: Burleson: council takes no action on exemption For audit committee. Original Message Sent: Tuesday, October 18, 200512:43 PM Subject: Burleson: council takes no action on exemption Monday, October 17, 2005 10-17 Council takes no action on exemption Cleburne Times Review By Joy E. Cressler/Staff Writer BURLESON -Nobody on the City Council made a sound when the mayor called for a motion to repeal a residence exemption for seniors if the tax freeze passes in the Nov. 8 election. Aspecial-called meeting was planned for today to consider three council action items, one of which is re-consideration of the senior homestead exemption that failed Thursday for lack of a motion, City Secretary Mary Kayser said. The city wants the exemption issue to be heard again with the full council present before the election. The city was seeking to avoid a situation where two property tax breaks were available to seniors at the same time, but none of the councilmen present who could have responded to the mayor's call for a motion offered one. Councilman James Bailey said he didn't believe the decision had to be made before the Nov. 8 election, nor with only four council members in attendance at Thursday's meeting. Council members Matt Powell, Claudia Humphreys and Chip Stephens were absent. "I felt there really wasn't good clarity on repealing the exemption,"Bailey said. "I'm not all that much in favor of the tax freeze. I don't think it's necessary in most cases since seniors don't have the expenses that young families do." According to tax freeze proponent R.D. Scott of Burleson, freezing the city's portion of his taxes would amount to about $40 per year. County and school taxes are frozen for seniors. For Scott, the tax freeze would lock city taxes at 388 or the rest o - li a he said. The ro ert ta~xem tion alread in ~ f f f, p p y p y place provides a break for seniors on the first $22,500 of valuation. Scott says that exemption saves him $143 each year. City leaders, believing themselves to one day be in line for possible negative financial impact because of fewer tax dollars coming in from seniors, worry that it may affect services to Burleson residents. They also worry that an unfair burden will be passed on to younger families who may have more expenses as they raise children and buy homes. The repeal of the property exemption would have only gone into effect if the senior tax freeze passed in the upcoming election, Mayor Ken Shetter said. Shetter explained that the reason for "rushing" the repeal ordinance was to avoid putting an unfair burden on a future council to remedy the effects of less tax money coming into the city by possibly removing the property exemption later. "We wanted to get an ordinance in place before the voting so that no one feels they got the rug pulled out from under them after the election," Shetter said. Repealing the exemption would not have affected those seniors who are already 65 or older, Scott said. `2'olitically, this was a good move for us,"Scott said. "I just want to encourage people to get out and vote." Early voting starts Oct. 24 and runs through Nov. 4 at the Burleson subcourthouse, on Elk Drive across from the high school, and at the community center in Bicentennial Park in Crowley for Burleson residents living in Tarrant County. In other action, the council: F Approved an engineering services contract for the design of several drainage projects on Johnson Avenue and Tarrant Street. The contract is for $274,000 with HDR Engineering Inc. to design a solution to the low-water crossing of Town Creek and Tarrant Street. The project includes reconstruction of the Town Creek culvert under Johnson Avenue, plus drainage system improvements to reduce flooding at the Summercrest and Thomas streets intersection. FAwarded the bid for $100,000 to Joe Bland Construction to relocate the utilities within the state right of way so the Texas Department of Transportation can launch its improvement project after opening bids for that in December on the Interstate 35W and Renfro-to-Alsbury project. The city received four bid proposals, with the top bid exceeding $130,000. Funds to pay for the city's utility moving project are available in the 2005 water and wastewater bond program. F Approved a change order for the Hidden Creek Parkway project concerning a sanitary sewer line that will be installed from the intersection of Royal Oak Lane and Hurst Road to the northeast corner of the Student Discipleship Ministries property. The city also approved a waterl• extension in the unplatted pol~tion of the ministry property. The city is paying $53,774 for both items. FPostponed discussing a possible ordinance that would establish tree conservation in the city. The matter will be revisited at an upcoming council meeting. F Approved the final reading of a zoning ordinance that authorized aspecific-use permit for the construction of an Avis car rental agency on nearly half an acre on Elk Drive next to the Sonic drive-in. FApproved a plat for one commercial lot of 1.2 acres for Aaron Rents Inc. on the west side of Texas 174, north of the Hidden Creek Parkway intersection. The site will be used for retail, city records show. F Nominated five men to serve another term on the board of directors for the Central Appraisal District. The council approved Scott, Byron Black, Mike Brand, Troy Thompson and Sid Pruitt. • • Green, Shannon From: Alexander, Cynthia Sent: Wednesday, November 09, 2005 2:57 PM To: Green, Shannon Subject: FW: Corinth: elderly may get tax relief For audit committee. Original Message Sent: Thursday, October 20, 2005 3:34 PM Subject: Corinth: elderly may get tax relief Corinth's elderly may get tax relief Denton Record Chronicle 07:33 AM CDT on Thursday, October 20, 2005 By Josh Baugh /Staff Writer The Corinth City Council could decide tonight whether to increase the city's property tax exemptions for residential property owners 65 and older or who are disabled. Council member Lynn Mayfield, who sponsored the idea, said she wants to bring Corinth's exemptions in line with those of other cities in Denton County. "Every other city in this area gives larger exemptions than we do,"she said. "I really feel once people reach the age of 65 and retire, they don't have any more income coming in. It's not like young people who get increases in salaries every year." An exemption is a reduction in a tax bill for certain groups of people, such as the elderly and disabled. People in those groups have to apply for their exemptions at the Denton Central Appraisal District, which sets values for properties countywide. Those values are used by taxing entities, such as the county, cities and school districts. Corinth's $5,000 property exemption for the elderly and disabled is the lowest in the county, along with Justin, which also has a X5,000 exemption. The city of Krum's exemption is for $6,000 and all other cities in Denton County give 65-and-older exemptions ranging from $10, 000 to $90, 000. "If Ponder and Sanger can do $50,000 and $30,000, then by golly, I think we should be able to do the same for our residents,"Mayfield said. "I'm just hoping it will pass." In a workshop session Sept. 29, the council reviewed exemptions ranging from $5,000 to $25,000. But tonight, the council will likely cote on whether to increase the exemptions to $10,000, Interim City Manager Olen Petty said. About 410 residential properties in Corinth are owned by people who are eligible for these exemptions, which will cost the city x11,418 in revenue this year. If the council chooses to increase the exemption level to $10,000 for the 2007 fiscal year, Corinth would Zose about $22,836. "That's not much in the big scheme of things,"Mayfield said. With the cost of lining rising, from gas to electricity to water, seniors who don't have an increasing income need some relief, Mayfield said. "In this economy, people on a fixed income are having challenging times," said Mayor Vic Burgess. "The gross impact is a few thousand dollars in our city. And of course, you have to apply for the exemption. It's not automatic." The additional loss of revenue will have to be addressed by the council in the future, Petty said. "It will apply in the tax program for 2006-07, so at that time, I'm sure they'll evaluate the amount of money collected on that tax rate, and they'll simply have to make adjustments," he said. "Growth could simply offset it. If not, they'll simply have to adjust." Mayfield is the only council member who is 65 or older. Mayor Vic Burgess recently turned 64. "I'm just trying to look out for the older people,"Mayfield said. "I really think we should follow suit and try to have the same tax relief as other cities in our area." JOSHBAUGH can be reached at 940-566-6881. His a-mail address is jbaugh@dentonrc.com. AREA CITIES' EXEMPTIONS The chart below shows the amount of exemptions given by several cities in Denton County to their property owners who are 65 or older. City Exemption amount Aubrey $10,000 Corinth $5, 000 Denton $25,000 Justin $5, 000 Krum $6, 000 Lake Dallas $10,000 i ~ Pilot Point $10,000 Ponder $50,000 Sanger $30,000 Hickory Creek $10, 000 Oak Point $20,000 Argyle $32, 000 Shady Shores $10, 000 SOURCE: Denton Central Appraisal District City Council meeting What: Corinth City Council meeting When: 7 p.m., today Where: City Hall, 3300 Corinth Parkway What: Discussion and possible vote on tax exemptions for people 65 and older or who are disabled 3 • Green, Shannon From: Alexander, Cynthia Sent: Wednesday, November 09, 2005 2:41 PM To: Green, Shannon Subject: FW: Brenham: city considering tax break options For audit committee. c Original Message Sent: Sunday, November 06, 2005 2:54 PM Subject: Brenham: city considering tax break options City considering tax break options Brenham Banner Press By ARTHUR HAHN/Managing Editor Friday, November 4, 2005 2:15 PM CST Options on tax breaks for senior citizens who own homes are being considered by the Brenham City Council. The council Thursday held a workshop discussion listed on the agenda as talking about "a property tax freeze for senior and disabled citizens."Another option, however, was thrown into the mix: raising exemptions. The Brenham Louise Giddings Retired Teachers Association has been pressing the council to grant a tax break for senior citizens, saying many of them are lining on fixed incomes. The group has called for a tax freeze for senior and disabled citizens, saying its impact would be less than $20,000 on city property tax revenues. City Manager Terry Robert said he and Mayor Milton Tate met with RTA president Nancy Maass and Patricia Olney, Texas Retired Teacher Association District VI representative, and the discussion was expanded to include an increase in homestead exemptions for senior citizens. A freeze would set the tax bill at the point when a homeowner turned age 65. An exemption would lower the taxable value of the property by a specific amount. The city already provides a $12,000 exemption for senior citizens, Roberts pointed out. But council members could opt to increase that. The current X12,000 exemption lowers the city's tax base by $13.7 million, Roberts said. "I or exam le, the exemption were to double to $24,000, th~mpact would double the ff P x$13.7 million to $27.4 million and reduce tax revenues by another X64,000,"he said in a report to the council. A 'freeze" would impact 13 percent of the tax base and costing the city $32, 000 initially. Roberts said that figure could increase as more homeowners qualify for it, while the tax revenue lost from an exemption increase "would generally stay at that level." Maass told council members Thursday that "any small freeze is a big help,"particularly to senior homeowners on a fixed income. Former principal James Rothermel, who also served a stint on the city council, said the city "has done a tremendous job for our youths (through its parks system)" and asked it to "do something" for the senior citizens. Tate said the council is aware of how increases in taxes and utility fees impact residents. "It's been a difficult year for everybody,"he said. Councilman Henry Pettie Jr. pointed out that Washington County and Blinn College have already implemented the tax freeze. "Why can't the city do the same?"said Pettie. But councilman John Pledger pointed out that a freeze or an exemption increase will result in a shifting of the tax burden. "Someone will pay this if you don't,"Pledger told the senior citizens at Thursday's meeting. "It'll either be the businesses or your children or grandchildren." • Green, Shannon From: Alexander, Cynthia Sent: Wednesday, November 09, 2005 10:44 AM To: Green, Shannon Subject: FW: Burleson: voters approves tax freeze for seniors by a landslide For audit committee. C Original Message Sent: Wednesday, November 09, 200510:30 AM Subject: Burleson: voters approves tax freeze for seniors by a landslide Tuesday, November 08, 2005 11/8 Burleson approves tax freeze for seniors Cleburne Times Review By Joy E. Cressler/Staff Writer In a landslide victory, proponents of the Burleson senior tax freeze won their bid for seniors to have their taxes frozen at 2005 levels. Unofficial but complete results of Tuesday's election showed 3,114 voters, or about 86 percent, saying yes to the tax freeze and 525 saying no, according to city spokeswoman Sheri Campbell-Husband. The official canvassing of the cote will take place at a special City Council meeting at 6:30 p.m. Tuesday. Voters were asked: "Should the total amount of ad valorem taxes paid annually to the City on the residence homesteads of persons 65 years of age or older or who are disabled be permanently frozen as provided by Article 8, Section 1-b(h) of the Texas Constitution?" Opponents of such tax freezes often complain that they shift the tax burden to younger residents, while supporters say the elderly and disabled often live on fixed incomes and cannot afford to pay rising levies. On Oct. 26, the City Council adopted an ordinance stipulating that the property tax exemption for the residential homesteads of individuals age 65 and older would be repealed, effective Jan. 1, if the tax freeze was adopted Tuesday. "Therefore, the results of today's election make the provisions of this ordinance applicable, and the City's current homestead exemption for seniors will be repealed beginning in the 2006 tax year," Campbell-Husband said in an a-mail. • • Voter turnout was heavy, Campbell-Husband said. "At one point, we ran out of ballots and had to run off some more," she said. The delay took time away from the counting, which didn't wrap up until 10:30 p.m. Tax freeze proponent R.D. Scott said he believed the measure would pass. When he learned of the margin of victory, he said he was overwhelmed. "That should send a message, shouldn't it?" he said. "All of us who lobbied for the tax freeze are proud of the outcome. I want to thank all the people who helped, especially the retired teachers." Scott said he knew a lot of residents were voting. Earlier in the day, he said, "We've been talking to people all day about getting out to vote. We did the same thing last week with early voting." With the tax freeze in place, seniors who are already 65 or will be by Dec. 31 will not lose their property tax exemption on the first $22,500 of property. They will keep both exemptions, provided they sign up for them through the Central Appraisal District. The property tax exemption continues for those already 65 and older until the property owner dies, in which case it passes to the surviving spouse. On that person's passing, the exemption no longer applies to the property. For those who won't reach age 65 by the end of 2005, the property tax exemption will not apply. Those who reach age 65 in coming years will receive the benefit of frozen taxes the second year, after the value is frozen the first year they qualify. At the time seniors qualify for the tax freeze, whatever the amount they pay will not vary as long as they own the property. If improvements are made to the property, seniors can expect their taxes to reflect the increased value of their properties, according to the CAD. The election dealt with an issue close to seniors' pocketbooks, but senior citizens are known to be the most prolific voters of any age bracket, according to the U.S. Census Bureau and Senior Journal magazine. National elections often produce more than two-thirds of all seniors at the polls, the Journal reported, compared to 52 percent of voters in the middle-aged set. Seniors cite as their main motivation to cote on propositions a concern for the future of their grandchildren, even those issues related to aging, such as Social Security and Medicare. The Journal predicted that one in fine votes cast in most elections is proffered by a senior. Early voting for the Burleson tax freeze election was tallied as: 1,404 in person for Johnson County, 237 for the Tarrant County portion of Burleson, and eight by mail, for a total of 1,649, according to City Secretary Mary Kayser. Compare that to the regular election in May, without any specialty elections for Burleson residents, where 254 early votes and 243 election day votes were cast, for a total of 497. The last specialty election where Burleson voters were tasked with deciding a local issue was in May 2004, when more than 3,000 voters turned out to decide two propositions related to the sale of alcohol. In that election, 1,214 early voters cast ballots, followed by 1,925 election day voters, for a total of 3,139. Voters defeated the sale of beer and wine in the city limits for off-premise consumption and passed the sale of mixed beverages in restaurants. • • Green, Shannon From: Alexander, Cynthia Sent: Wednesday, November 09, 2005 9:15 AM To: Green, Shannon Subject: FW: Brenham: city council to again discuss tax freeze For audit committee. c Original Message Sent: Wednesday, November 02, 2005 7:39 AM Subject: Brenham: city council to again discuss tax freeze City council to again discuss tax freeze Brenham Banner Press Tuesday, November 1, 2005 2:46 PM CST The Brenham City Council will revisit whether it wants to institute a tax freeze for senior citizens and disabled persons. The tax freeze will be one of the items discussed during a work session Thursday that follows a 1 p.m. formal session in City Hall at 200 W. Vulcan St. Senior citizens groups have twice called on the council to grant the tax freeze. Texas voters in 2003 approved a measure allowing city, county and junior college districts to "freeze" taxes for homeowners over age 65 or disabled persons. Blinn College and Washington County adopted the freeze, and the Brenham Louise Giddings Retired Teachers organization has pressed the Brenham City Council to do the same. However, the council noted in March 2004 to table action, saying the Texas Municipal League, however, was urging its member cities to wait and see what comes out of a school finance session being conducted by the Texas Legislature. Several sessions were held, but lawmakers were unable to come up with another method of funding public education. And again last March, the Brenham Louise Giddings Retired Teachers chapter again pressed its request, saying in a letter to the council that "school retirees ... need tax relief, not tax increases." Nancy Maass, president of the retired teachers group, in her letter to the council said the tax freeze proposed last year "would have had minimal economic impact on tax rolls for the city." Appraisal office figures show that in 2004, some 1,145 property owners would have qualified for a tax freeze, with the city's total tax loss projected at $16,836, Maass added. When discussed in 2004, estimates were that if passed, some 13 percent of Brenham's total tax roll -about $93 million -would be eligible for the freeze. During their formal session, the council will consider an ordinance banning skateboards and bicycles in Veterans Memorial Plaza, located in Fireman's Park. Veterans organizations have complained that the memorial to service personnel from Washington County has been damaged by skateboard and bicycle riders. Other formal session items are: € Waiving permit and utility tap fees for a Brazos Valley Affordable Housing residence for slow- to moderate-income family. €Bids for benches and trash receptacles for the Brenham Greenways Project. €A resolution authorizing the mayor, mayor pro tem or city manager to sign payment requests to the Office of Rural Community Affairs, in conjunction with a housing project near Brenham High School. Other work session items that will be discussed are: €A hazard mitigation grant program. € Waiving of late fees and extending cutoff dates due to utility rate increases. • Green, Shannon From: Alexander, Cynthia Sent: Wednesday, November 09, 2005 9:12 AM To: Green, Shannon Subject: FW: Richardson: council considering increase in tax exemption for seniors from $30,000 to $50,000 For audit committee Original Message Sent: Thursday, November 03, 2005 7:33 AM Subject: Richardson: council considering increase in tax exemption for seniors from $30, 000 to $50, 000 Council considering increase in tax exemption for seniors Richardson: Members to decide Nou. 14 on boosting it to $50,000 12:00 AM CST on Thursday, November 3, 2005 By WENDY HUNDLEY/The Dallas Morning News Richardson senior citizens may soon receive a $20,000 increase in their property tax exemption. But some fear the generosity will be costly for the city. The City Council, which has been studying senior tax relief for months, is scheduled to vote Nov. 14 on increasing the exemption from $30,000 to $50,000. If approved, homeowners who are disabled or 65 and older would save an additional $105 a year in taxes. But the increase would also cost Richardson $600,000 in tax revenue at a time when demographic and economic forces are hurting the city's bottom line. Council member James Shepherd expressed concern about the impact of a cut in property taxes at Monday's work session. "If everything stays the same, and we cut $600,000, something's got to give,"he said. He warned that increasing the senior tax exemption could result in a "cut in services or raising taxes on everyone else in town." But city officials are optimistic about the economy. "We hope the expanding economy will help offset this loss,"Deputy City Manager Dan Johnson said. As a mature city, Richardson has one of the highest percentages of senior citizens in the Dallas-Fort Worth area. One in 10 residents is 65 or older, according to 2000 census data, and more than 19 percent of the city's homeowners take the senior • • exemption. With so many seniors, reducing the taxes they pay will hit Richardson harder than it will in growing cities such as Allen or Frisco, where less than 4 percent of residents qualify for senior tax breaks. At the same time, Richardson is leaning more heavily on property taxes to help run the city. In 1996-97, robust revenues from sales taxes made up 38 percent of the city's general fund. Property taxes shouldered only 22 percent of the burden. But that ratio has flip- flopped through the years. This fiscal year, property taxes will generate 39 percent of the city's $82.2 million general fund, officials said. Sales tax revenues -which plummeted after the Sept. 11, 2001, terrorist attacks -will make up 26 percent of the fund. Although the tech bust hit Richardson hard, there are positive economic signs. The city's $143 million budget approved in September reflects a 4.5 percent growth in the property tax base after three years of decline. However, sales taxes haven't fully rebounded. The city is forecasting a 3 percent increase in sales tax revenues in the next year. Despite concerns about city revenues, several council members said it was time to help seniors. The tax exemption has been at $30,000 since 1989, when the average Richardson home was valued at $97,491. Through the years, the exemption's value has been diluted as home values escalated. Although the council has considered a tax freeze for seniors, members said an increase in the homestead exemption is more equitable and would provide more value for residents. The proposed $50,000 exemption would save homeowners $105 across the board, while the economic benefit of a tax freeze would range from $26 to $105, depending on the value of the home. Richardson resident Ruth Bowling, a member of the Texas Silver Haired Legislature, said she's disappointed that the council favors the exemption over the tax freeze. Unlike the exemption, a tax cap cannot be rescinded after it's enacted, said Ms. Bowling, who began circulating a petition to get the tax freeze issue on the May ballot. i • Green, Shannon From: Alexander, Cynthia Sent: Wednesday, November 09, 2005 9:12 AM To: Green, Shannon Subject: FW: League City: seniors hope for tax help For audit committee. c Original Message Sent: Thursday, November 03, 2005 7:59 AM Subject: League City: seniors hope for tax help League City seniors hope for tax help By: DANA BURKE, Citizen Staff 11/02/2005 Having seen several Bay Area cities freeze tax rates for seniors and disabled citizens recently, some League City residents say they are getting impatient waiting for their City Council to do the same. The League City City Council last Tuesday instructed City Secretary Barbara Long to coordinate schedules for a workshop on a possible tax freeze, an effort that has been spearheaded by Councilman Jim Nelson. Ruth McCarthy, a resident of The Landing subdivision, said seniors need a tax freeze if they are to continue living in League City. "Our assets are not meeting our liabilities,"she said. Martha Irvin, also a Landing resident, said she has lived in League City for 25 years, and now that she and her husband are on a fixed income, "these taxes are eating us up." "We feel like when we were younger, we paid our dues, and now that we're older, we feel like we need a break,"Irvin said. City spokeswoman Dawn Kilgore has said in the past that staff may look for alternatives to a tax freeze, which could prevent seniors from getting a tax reduction if the rate decreases in the future. Another option for the city would be to raise the homestead tax exemption, which currently sits at $45,000 for seniors and the disabled. Councilwoman Katie Benoit said during the meeting that she wants the City Council to be sure it is doing the right thing before making any changes. "This Council is very concerned about seniors,"Benoit said. "We just want to make sure we're helping people who really need the help." L J i Bay Area cities or other entities that have frozen taxes for seniors and disabled citizens include Seabrook, Pasadena, Dickinson, Texas City, Santa Fe, Baytown, Galveston County, Clear Creek Independent School District and College of the Mainland. The City of Friendswood tabled the second reading of an ordinance enacting a tax freeze on Oct. 17. After deliberating for one hour in executive session, the City Council decided to hold off on appealing a judge's ruling that the Houston Chronicle and the Galveston County Daily News may sell newspapers at the corner of FM 518 and Interstate 45. Only Councilmen Jon Keeney and Rusty Tidwell voted for the original motion to moue forward immediately with the appeal. "I would really like to see us hold our ground on some things," Tidwell said. After the motion to appeal failed, Councilman Tad Nelson suggested that the Council wait for more information on the case before taking action. That motion passed 5-2, with Tidwell and Keeney opposed. In other action, the City Council: n Voted to reappoint Judge Kerri Foley as municipal court judge. n Agreed to have only one City Council meeting in November, on Nov. 8, and one meeting in December, on Dec. 13. n Accepted a $9, 721 grant from the State of Texas to conduct seat belt and speed enforcement in 2005 and 2006. n Amended the Master Transportation Plan to remove plans for a bridge crossing the creek at Palomino Lane. n Renewed the current IESI garbage contract. C~ C~ Green, Shannon From: Alexander, Cynthia Sent: Monday, November 14, 2005 9:24 AM To: Green, Shannon Subject: FW: Kilgore: city looking at new tax exemption For audit committee. c Original Message Sent: Sunday, November 13, 2005 1:49 PM Subject: Kilgore: city looking at new tax exemption City looking at new tax exemption By BRENDA ALLUMS newsl@kilgorenewsherald.com An ordinance that will give an additional tax break to residents 65 and over and a new tax break to disabled citizens is being drafted by city employees and is expected to be presented to city commissioners for approval at their next meeting. Assistant Director of Finance Lawanna Chrisman presented information to commissioners recently on what a local exemption for the disabled and an increase to the over 65 exemption would do to the city's tax revenue. Representatives of Kilgore's senior community have appeared at several commission meetings, asking the city to freeze property taxes for senior and disabled citizens. Kilgorite Betty Alder asked the commissioners for tax relief for senior citizens and citizens with disabilities. "I'm asking you to freeze property taxes for disabled people,"she said. "I'd also like you to add a local option exempting disabled property owners." Alder pointed out, "Other cities and school districts smaller than Kilgore have given tax relief to disabled property owners." Mayor Joe T. Parker told her city staff would look into the matter. Following that meeting Chrisman was charged with collecting data on possible avenues of action the city could take to help residents over 65 and disabled citizens. Chrisman and other city personnel are working on an ordinance granting the additional tax breaks. Chrisman said if the city decides to increase the over-65 local option from $11,250 to $15,000 and keep the 20 percent homestead exemption, it would reduce city's tax revenue by $20,925, and givhose over 65 an average $19.6~nnual savings. If the city grants disabled residents a local option of $15,000 and the disabled resident has applied for and received the 20 percent homestead exemption, that would result in about a $78.74 saving per household. The city's revenue would be decreased about $7,244 in this case. In total the city's revenue would decrease about x$28,000, Chrisman pointed out these figures were based on average home valuations for the two segments of the city's population. "The homestead exemption is not an automatic thing," said City Manager Jeff Howell. `2~esidents must apply for it -it's not a given thing." Chrisman based her figures for those over 65 on an average home valuation of $75,633. With the 20 percent homestead exemption and the $15,000 local option, that would bring the taxable value of the property to ,$45,506.40. At the current 53.493-cent tax rate, that would bring annual city taxes to an estimated $238.88 Figures for disabled persons with the homestead exemption were based on an average property value of $57,850. With the homestead exemption and the local option, that would bring the average taxable value of the property to $31,280 and the owner would pay an estimated $164.30 annually in citytaxes. Chrisman said reports indicate Kilgore has about 1,063 households with residents in the over 65 age bracket. "VVe don't know if all of them have applied for the homestead exemption,"Howell said. "If they haven't, it would be a good move to make." Records indicated 93 disabled persons live in Kilgore. Chrisman said her figures were based on information from the Gregg County Appraisal District. The discussion came during this week's city commission meeting. In other business, Commissioner Billy Bob Brady questioned details of a plan by Kilgore Economic Development Corporation to reinforce the pier at Synergy Park/Elder Lake. The pier, reportedly built according to specifications, wobbles when people walk on it. KEDC's minutes indicate they are asking the same engineering firm to draw plans to strengthen it. "So, they designed it incorrectly and now we're considering paying them to draw up specifications to fix it. Do I understand that correctly,"Brady asked. He also questioned KEDC'san to build a split rail fence b~ween the walking trail a Stream-Flo property. The commission was told that the boundary lines were improperly draw and that some Stream-Flo property had to be deeded back to KEDC; part of the fence is to mark that property. • • Green, Shannon From: Alexander, Cynthia Sent: Monday, November 14, 2005 9:29 AM To: Green, Shannon Subject: FW: Friendswood: council approves Over-65, disabled tax freeze For fiscal affairs committee. C Original Message Sent: Sunday, November 13, 2005 12:07 PM Subject: Friendswood: council approves Over-65, disabled tax freeze Council apporves Over-65, disabled tax freeze Friendswood Journal By: Colleen O'Brien 11/10/2005 Mayor Kim Brizendine and City Council members on Monday unanimously approved an ordinance freezing taxes for those Friendswood homeowners who are 65 years of age or older, and the disabled. The city is now in line with Galveston County and many other jurisdictions in freezing taxes on elderly or disabled homeowners. In September, Pearland voters approved an over-65 tax freeze by referendum after that city's council declined to implement it via ordinance. In another matter, City Manager Ron Cox addressed the concerns of Shell station owner Ron Jadidi, whose service station at the corner of FMs 528 and 2351 is caught in one of the new zoning changes the city plans. "I've talked to John Olson, the City Attorney, about gas station issues such as the Shell station at the corner of FM 2351 and FM 518," Cox said. One of the issues that Jadidi is facing is his location in an EOD (Entryway Overlay District). EOD rules forbid businesses from having garage bays face major thoroughfares. Jadidi asked for a permit to build a garage on his property to house cars more than two years ago. "I simply wanted aclosed-in garage to make the area look better,"he told the council. The issue remains unresolved, but with Jadidi garnering support from local residents for the appearance of his business and his role in the community. However, on Monday did approve unanimously the EOD ordinance. Mayor Brizendine said the ordinance was "a good first step to resolving these issues." In other news, Council mem~er Laura Ewing announced th•Friendswood Community Church at 2821 Parhwood, would serve Thanhsgiving dinner to as many as 2,500 people on the holiday. "Those in need of a meal on Thanksgiving day, Thursday Nov. 24, due to financial, personal, or emotional reasons, please feel free to stop by,"she said. In other business, Sabino Chapa, a senior sign technician with the Friendswood Public Works Department received a Five Star Employee Award for the Third Quarter of 2005; and Wal Mart representatives presented a X1,000 check to the Friendswood Police Department. In an unrelated matter, Council member Chris Peden was appointed to Harris County Judge Robert Eckels' Houston-Galveston Area Evacuation and Response Task Force. Bill King, former mayor of Kemah, will serve as chair. • Green, Shannon From: Alexander, Cynthia Sent: Tuesday, November 15, 2005 11:28 AM To: Green, Shannon Subject: FW: Sugar Land: council okays increase in over-65 and disabled exemptions For fiscal affairs committee Subject: Sugar Land: council okays increase in over-65 and disabled exemptions Sugar Land okays increase in over-age and disabled exemptions By Barbara Fulenwider Fort Bend/Southwest Star Even though one Sugar Land councilman opposes the policy to increase the over-65 and disabled persons exemptions each year that the city can afford to, and another wants the policy revisited, council approved a $2,857 increase in the exemption at their Aug. 16 meeting. What that means for the 2,611 residents it applies to is they will pay $9 less on their city property tax bill for 2005. The homestead exemption for 2004 was $64,800 and will go up to $67,727 and is in addition to the X5,000 minimum homestead exemption all homeowners in Sugar Land get. The total result in tax savings for seniors and the disabled, with the $5,000 exemption, will be $231. Dorothy Painter, revenue director, told council the exemption would take X7.4 million of taxable value off the city's certified tax rolls and cost the city a total of $23,655 in revenues. She said the average tax bill for Sugar Land seniors is $423.68 compared to an average tax bill of Texas cities of $927.76 on a home valued at $200,000. The purpose of the policy is to keep ever-rising taxes from badly impacting those on fixed incomes. Because property values increase annually, tax bills increase, so a tax break for seniors and the disabled is aimed at helping them to afford to stay in their homes. Councilman Russell Jones noted against the exemption in keeping with his consistency of having done so since council's policy was adopted. At council's Aug. 2 meeting, when the increase in the exemption was first on council's agenda, Jones explained why. He said, "The exemption we grant is the second highest of cities in our comparable group in the state. We're already at the top of the exemption list, so we don't have any real need to provide this. Many cities in the state still have a $20,000 exemption." The total tax bill for our av' ge senior citizen, based on al~he exemptions, has to be the lowest in the state among comparably sized cities. We're already there. We've accomplished the goal of giving seniors a tax break." What this does is add an ever greater break and shifts the tax burden from one group of people to another. If we're already at the biggest break in the state, or close to it, why are we putting an additional burden on other citizens to give this group another break," Jones said. Jones pointed out that `the average value of the homes of our seniors are only slightly below that of our other citizens. We don't have a group of seniors who can't afford to pay their property taxes." He also said there are other options seniors can take such as deferred tax payments and quarterly tax payments to the city without penalty. "We've got an aging population. Boomers are getting there and soon there will be a whole bunch of 65 guys who will be a bigger and bigger tax burden in terms of relative shift of taxes. Demographically speaking, it doesn't make sense to make this exemption larger and larger every year," Jones said. Councilman Michael Schiff said he doesn't disagree with anything Jones said and added that he would vote in favor of it because it was council's policy that staff followed in proposing the increase that Sugar Land has granted to the over-65 since 2001. "I will vote for this but ash the city manager over next year to revisit the issue and see if we want to continue this policy." On the flip side was Council Member Cyril Hosley who reminded council that the policy was agreed on in an effort to level the playing field for all groups of Sugar Land citizens. "We spend a great deal of our taxes on youth and this was just a little way of saying that if we hadn't done that we'd be able to lower taxes." The average value on seniors' homes have gone up dramatically. There are neighbors in my neighborhood who want to pay their share of taxes but who bought a $100,000 house and are now looking at paying taxes on $300,000 thanks to the increased property values." The senior and disabled tax break, she said, "is not much but kind of makes up for some of the things we spend money on for youths and families. We've said this is the best we can do, and if seniors want a tax freeze, we'll take this all away, but this was a way of compromising. A tax freeze would hurt everybody in this city a lot more than our policy," Hosley said. Councilman Dennis Parmer said, "We've made a commitment and we need to follow it. I will continue to support the exemption. I support the exemption as stated." The motion to approve was made by Hosley, seconded by Councilman Thomas Abraham and approved by council. • Since 2001 the over-age exemption has increased from X40,000 to $67, 727 and since 2004, the exemption for disabled persons has gone from $10,000 to $67,727. Homeowners are not eligible for both exemptions. Council's policy provides that the city manager will recommend an increase in the over- age and disabled persons exemption when (the city's) economic and financial conditions allow. When such conditions exist, the over-age and disabled persons exemption will be increased annually based on the average percent increase in residential revaluation, not to exceed $100,000. • Green, Shannon From: Alexander, Cynthia Sent: Tuesday, November 15, 2005 9:11 AM To: Green, Shannon Subject: FW: Paris: paper urges caution when passing senior tax relief For fiscal affairs committee. c Original Message Sent: Tuesday, November 15, 2005 7:47 AM Subject: Paris: paper urges caution when passing senior tax relief Use caution when passing senior tax relief Staff reports The Paris News Published November 14, 2005 Paris City Councilman Don "Pinky" Wilson wants the city to look into property tax relief for senior adults in the form of frozen taxes. He asked city manager Tony Williams last week to look into steps the city can take to provide the tax relief. Williams says he plans to research the idea and bring it to a December council meeting. Many other Texas cities freeze taxes when senior citizens reach 65 years of age, which means taxes seniors pay remain the same regardless of any future increase in tax rate or value appreciation unless improvements are made to the home. The freeze is required of school districts by the state. While frozen taxes do not affect revenues at the time the policy goes into effect, the senior benefit would have an impact on future revenues unless the number of new residents exceeds the level it takes to overcome the loss in taxes. Whether such an incentive would bring enough seniors to Paris to offset lost taxes remains to be seen. We question the fairness to other residents who would shoulder the burden of additional taxes if the move does not generate an influx of seniors. So, a senior tax freeze would need to come with an effort to bring more senior to Paris. A senior tax exemption fits a Visionaries in Preservation goal to push for affordable housing throughout Paris and especially in residential areas surrounding downtown. The group, formed this year with the help of the Texas Historical Commission, is expected to push for residential tax incentives as part of its public policy campaign. We expect the council to receive the group's support. While we are in favor of an -lan that complements a syste tic effort to build our community's economic stability, we encourage the Paris City Council to take a thorough look at all implications before making a decision that would affect -positively or negatively -other residents, industries and businesses in our community. • • Green, Shannon From: Alexander, Cynthia Sent: Monday, December 12, 2005 4:40 PM To: Green, Shannon Subject: FW: Amarillo: taxes draw seniors to City Hall; city manager recommends against freezing taxes for elderly, disabled For fiscal affairs committee. Original Message Sent: Wednesday, December 07, 200510:29 AM Subject: Amarillo: taxes draw seniors to City Hall; city manager recommends against freezing taxes for elderly, disabled Web posted Wednesday, December 7, 2005 Taxes draw seniors to City Hall City manager recommends against freezing taxes for elderly, disabled By Joe Chapman joe.chapman@amarillo.com Personal interest: Lonny Morrison listens to the arguments for and against freezing taxes for senior citizens and people with disabilities Tuesday at City Hall. On a day when the mercury wouldn't climb, city leaders listened to residents argue for a different kind of freeze Tuesday at City Hall. More than 40 people asking for a tax freeze for senior citizens and people with disabilities attended an Amarillo City Commission work session. "The seniors, elderly and disabled picked up a 68 percent increase in taxes (from 1999 to 2005),"said Bill Sumerford, movement organizer. "The revenues for the city of Amarillo during that same period of time went up 26 percent.... What that's saying is the seniors, the elderly and the disabled are paying way more than a proportionate share of the increase." Sumerford has been making the rounds of local governing bodies requesting that property taxes be frozen for people 65 and older and for people with disabilities. He cited a state constitutional amendment, which voters approved in 2003, that gives local jurisdictions the option. A tax freeze could be enacted by the City Commission or by a vote of the people. But once passed, neither the commission nor the voters could undo it, City Manager Alan Taylor said. Only the Texas Legislature would be able to reverse it, he said. • Taylor recommended the City Commission not enact a tax freeze because it would amount to shifting the tax burden to other residents and because other tax benefits already are available to seniors. "It's pretty tough when you have a growing city to lose value in your tax base," Taylor said. He pointed to the $8,600 exemption on taxable home values the city already grants seniors and people with disabilities. Seniors also have the option to pay their taxes in installments over an extra six months, and they may defer taxes and have them paid by their estate. The city retained a consulting actuary to project the impact of a tax freeze on the city's revenue and tax rate. Cost of the study was $5,800, Finance Director Dean Frigo said. The actuary, John Crider Jr. of Richardson, projected that if a freeze were enacted for senior citizens this year, the city's taxable values in 2010 would be 96 2 percent of current values, and by 2025, they would be 82.4 percent. The city would have to raise the tax rate for everyone else just to generate the same amount of revenue, Taylor said. Commissioner Paul Harpole posed that for future generations, the benefit would be lost by the time they reached 65 and qualified for a freeze. Sumerford responded to the presentation by saying there will always be unforeseen financial constraints on the city, but that its leaders would be capable of adjusting to those factors. "We'll get by,"he said. "The point is, we need to take care of our disabled and our elderly now and stop chasing them out of their homes." One such person in the audience, Lonzy Morrison, 66, said he falls into both demographics. He and his wife are disabled and pay their property taxes in installments. With his next Social Security check, he'll make a x$200 "down payment,"he said. He complimented the city's preparation, but said he wasn't swayed. "They did their homework,"he said. "They did a magnificent job presenting it. I know when they go back to the back, that's where it's gonna stay,"he said, gesturing to the commission's conference area. •Tax Rates o Ma'or Texas Cti'ties Cit 2000 Census Po ulatio~Gross Tax Rate Annual f J y P Property Tax* San Angelo 88,500 $.86800 $789.74 Dallas 1,188,580 $.74670 $679.38 Houston 2,009,834 $.65000 X591.40 Midland 99,621 $.64200 $584.12 Wichita Falls 104,197 $.59200 $538.63 Lubbock 203, 715 $.46000 $418.53 Amarillo 179,287 $.28712 $261.23 Tyler 85, 482 $.24900 $226.55 *based on a X90,984 home, the average value in Amarillo Source: City of Amarillo i • Green, Shannon From: Alexander, Cynthia Sent: Thursday, December 15, 2005 9:37 AM To: Green, Shannon Subject: FW: Brenham: city council to consider senior tax incentives For fiscal affairs committee. C- Original Message Sent: Wednesday, December 14, 200512:07 AM Subject: Brenham: city council to consider senior tax incentives City council to consider senior tax incentives Brenham Banner Press Tuesday, December 13, 20051:45 PM CST The Brenham City Council Thursday will consider a tax break for senior citizens who own homes. "Tax incentives for senior citizens" is listed on the council's formal agenda for its 1 p.m. meeting in City Hall, meaning members could opt to take action. Senior citizens have appeared before the council on several occasions, beginning in 2004, and the council has held several workshops on the issue. The latest was last month, when another option was thrown into the mix: raising exemptions. The Brenham Louise Giddings Retired Teachers Association has been among those pressing the council to grant a tax break for senior citizens, saying many of them are living on fixed incomes. The group has called for a tax freeze for senior citizens when they reach age 65, but another option that might be considered is an exemption that would lower the taxable value of the property by a specific amount. The city already provides a $12,000 exemption for senior and disabled citizens. The agenda includes discussion on senior citizen tax incentives during a work session, their reconvening in formal session for possible action on an ordinance that would increase the exemption on residential homesteads for persons 65 and older. Other items on the work session include: €A request from the board of directors of Services for Handicapped and Aged Persons (SHAPe) to use the former police station building on Chappell Hill Street. The police department has been moved into the former munaca'pal building on Park Street because of structural problems, mold and mildew. SHAPe has been looking for a facility for senior citizens. €A presentation by the Texas Department of Transportation regarding one-way frontage roads on a portion of the U.S. 290 Loop. €Reappointments and recommendations for new appointments to the Board of Adjustments and Appeals, the Airport Advisory Board, Brenham Community Development Corp., Building Standards Commission, Hotel Occupancy Tax Board, Brenham Housing Authority, Main Street Board, Parks and Recreation Advisory Board and Planning and Zoning Commission. That item too will be taken up again when the formal session is reconvened. € The extension of Cantey Street. €Eligibility criteria for group health insurance. City Manager Terry Roberts' contract, which is reviewed annually, will be discussed by council members in an executive session before reconvening in formal session for possible action. • • Green, Shannon From: Alexander, Cynthia Sent: Monday, December 19, 2005 10:19 AM To: Green, Shannon Subject: FW: Brenham: city council doubles homestead exemption for seniors For fiscal affairs committee. c Original Message Sent: Sunday, December 18, 2005 2:27 PM Subject: Brenham: city council doubles homestead exemption for seniors City council doubles homestead exemption for seniors Beaumont Enterprise By ARTHUR HAHN/Managing Editor Friday, December 16, 2005 1:18 PM CST Senior citizens finally have their property tax relief. Brenham City Council members voted Thursday to double the homestead exemption for persons over age 65 from $12,000 to $24,000. The council opted to go that route instead of instituting a tax freeze for senior homeowners. Senior citizens in 2004 asked the council to consider some sort of tax break, led by the the Brenham Louise Giddings Retired Teachers Association. City Manager Terry Roberts said the current $12,000 exemption lowers the city's tax base by $I3.7 million, so doubling it would increase that to X27.4 million and reduce tax revenues by another $64,000, he said in a report to the council. A tax freeze would do just that -freeze property taxes imposed on the homestead of a person when they turn 65. Roberts pointed out that raising the exemption "creates an immediate savings to those qualifying and an immediate reduction in the amount of property taxes collected by the city." A decision to implement a tax freeze, he pointed out, "cannot be revoked without a constitutional amendment allowing the limitations to be repealed." Several council members said they favored raising the exemption because it could be lowered or raised by future councils. • • A freeze, said council member John Pledger, "has that permanence." Council member Gloria Nix said senior citizens -many who live on fixed incomes - deserve tax break consideration. "I think we need to do something,"Nix said. "I think it's long overdue." The council also: € Voted not to spend $30,000 for an engineering drainage study to correct a federal map showing property along a section of Hog Branch is in the flood plain. Data collected by the Federal Emergency Management Agency decades ago showed the property lies in a flood plain, even though the city in 1979 made improvements to the creek that "reduced the limits of the flood plain,"said public works director Doug Baker. The city, Baker said, apparently failed to tell FEMA that the improvements were made after data was collected but before the flood plain map was approved. Engineering work to show the property does not lie in the flood plain would cost about ,$30,000, which was included in the city's budget this year. The property owner is looking to develop the land for single family homes, said Baker, but can't because of flood plain restrictions. Baker did point out that FEMA is planning to update its flood plain maps within two years, when the error would be corrected. Some council members said they felt the cost is unwarranted, particularly in light of the upcoming FEMA drainage update. "Monetarily, what do we get out of it?"said council member Danny Goss. Goss also said that the property owner "has made no attempt to maintain" the tract. €Made appointments to a host of city boards. €Approved modification of a contract for garbage bags. The supplier has told the city it cannot honor the price because of unexpected increases in raw products needed to make the bags. The supplier said Hurricanes Rita and Katrina contributed to the price increase. Under the revamped contract, the cost will rise from x$6.45 per roll to $7.29. The city plans to buy 8,900 rolls. Council extends Roberts' contract • • The Brenham City Council has renewed the contract of City Manager Terry Roberts. The council took the action Thursday after a brief executive session to discuss the contract for Roberts, who has been city manager here since February 2001. Roberts will also receive a 3 percent salary hike, putting it at $100,858 annually. • • Green, Shannon From: Alexander, Cynthia Sent: Tuesday, December 27, 2005 5:30 PM To: Green, Shannon Subject: FW: Galveston: council okays tax freeze for seniors For fiscal affairs committee Original Message Sent: Friday, December 23, 2005 4:50 AM Subject: Galveston: council okays tax freeze for seniors Council OKs tax freeze for seniors By Marty Schladen The Daily News Published December 23, 2005 GALVESTON -The Galveston City Council voted unanimously Thursday to freeze taxes on the primary residences of all disabled citizens and those over 65. The vote came after arguments that the move was not fair and over an alternative that the city manager said allowed for more flexibility. The freeze will remain in effect on the primary homes of seniors and the disabled until they sell them or they die. If they die and their spouses are at least 55, the freeze remains in effect. City Manager Steve LeBlanc said that the exemption would cost the city $108,000 in the first year and would increase by $6,000 a year thereafter. Councilwoman Jackie Cole said the exemption sounded good as a means of protecting seniors on small, fixed incomes against losing their homes to rising property taxes caused by rising home values. But she pointed out that the freeze does not distinguish between rich and poor. "We have people who own $40,000 houses all the way to people who own $1.5 million houses on the island all in that age group," she said, asking whether wealthy seniors and disabled needed a tax freeze. Then there's the fact that a tax cut for one group is a de facto tax increase on everybody else. "Then it becomes an issue of fairness," Cole said. "Are people who are less than 65 - do they deserve to pay more because they are less than 65?" Mayor Lyda Ann Thomas an~Zc Councilman Joe Jaworski both noted that the freeze has been popular with voters. "I'm supporting this freeze because it's a gesture that's meaningful for individuals," Jaworski said. Instead of a freeze, LeBlanc proposed increasing the existing homestead exemption from X15,000 to $20,00 for seniors and from $10,000 to $12,000 for the disabled. He said that measure would cost the city about x109,000 in the first year. It would also give the city the flexibility to repeal the measure in the face of a severe economic downturn, a severe hurricane or if it turned out to be more expensive than anticipated. Opponents of the freeze also noted that LeBlanc's calculations assumed a constant population of seniors. With an aging generation of baby boomers and the possibility that some from Houston could claim as homesteads their West End properties, the mix could change, they said. Changing demographics could combine with changing economics to create problems, Councilwoman Barbara Roberts said. "The city certainly can afford a freeze now,"she said. `But how long our growth is going to continue is anybody's guess. To assume it's going to continue into perpetuity is foolish." Thomas said it would amount to punishing seniors to repeal an exemption after a hurricane or another hardship. • a • • CITY OF LA PORTE Interoffice Memorandum TO: Barry Beasley, Councilman Howard Ebow, Councilman Chuck Engelken, Councilman Tommy Moser, Councilman Louis Rigby, Councilman Debra Brooks Feazelle, City Manager FROM: Cynthia Alexander, Assistant City Manager Shelley Wolny, Investment Office DATE: January 23, 2006 SUBJECT: Quarterly Investment Report For the first quarter of the 2006 fiscal year, the City's investment portfolio yield has been between 3.21% and 3.42%. The average return on the portfolio for the first quarter of the fiscal year was 3.29%, which is still below the average yield of our benchmark, which was 4.17% (see graph below). The current year to date interest earned for the 2005 fiscal year is $255,542, which is almost $50,000 more than projected at this time. City vs. Benchmark a.so°io 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% A`' `' A`' A`' A`' A`' A`' A`' `' A`' A`' A`' ~~~ 4'0A was PQ~ ~~ ~~ ~s~ P~ S~~ p~` ~o° ~' Portfolio Yield Benchmark At December 31S` the City's portfolio consisted of 56% in Agency Notes, 29% in Texpool, 9% in TexSTAR and 6% in Logic (see pie chart below). By Investment Type 29% 56% 9% 6% ~ Texpool ^ TexSTAR ~ Logic ~ Agency Notes The Fed has increased the overnight rate eight times since December 2004, and is likely to increase the rate a few more times before they are through. The current overnight rate as of December 12s' is 4.25. With that said, our main focus is to continue to ladder the portfolio. • At the end of the first quarter, the City's portfolio consisted of 44% of the portfolio maturing overnight (see graph below). 35% of the City's portfolio matures in one year and 18% of the City's portfolio matures in 12- 24 months. By Investment Maturity ~ Overnight ^ 1-12 Months ~ 12-24 Months O Over 24 Months Currently, the 3-month T-Bill is at 3.97%; 2 year, at 4.40%; 5 year, at 4.39%; and, the 20-year is at 4.73% (see yield curve below). Yield Curve 5.50% 4.50% 3.50% 2.50% 1.50% 0.50% 0 5 10 15 20 3 Months Ago ®Current The overnight rate is currently at 4.25%. We will continue to focus on laddering the portfolio to maintain a constant cash flow and a liquid position. 2 Year T-Note 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% In summary, we will continue to invest the City's funds in conservative investments, as authorized by the Public Funds Investment Act, always keeping in mind Safety first, and then Liquidity and lastly Yield. 2 • • Portfolio Compositio6 and Value as of December 31, 2005 60.00% Par Book Market Days to 40.00% Value Value Value Maturiri Investment Pools 14,812,385 14,812,385 14,812,385 1 Agencies 18,993,193 18,993,193 18,831,900 297 20,0046 Total 33,805,578 33,805,578 33,644,285 168 0.00% Investmrnt Pools Agrncdes ®Dec-06 ®Jun-OS -~ Dec-04 luvestment Maturity Schedule as of December 31, 2005 Book Value Percent 9-lI 3 or more 0-3 months 14,812,385 43.82% mrnths 1-= Marc Yrnrc 9-12 months 11,993,821 35.48% l-2 yeah 5,999,372 17.75% 2 or more years 1,000,000 2.96% ~ mwths _ Toisl 33,505578 e 100.00% ® .-.. Portfolio Performance for the month of December 2005 Weighted Portfolio Brnchmazk Average 4.00% Yield Yield' Maturiri Pooled Fords 3.42% 4.33% 5.24 months 3•~0 Bond Funds 4.25% 3.97% 1 day 2.00% Total 3.84% 4.15% 4.25 months 1.00% 0.00% 'The led funds benchmark is based on the Poo avers month eld ge lY Yi of a 6-month Treasu rY• Pooled Funds Bond Funds Total The bond funds brnchmark yield is based on the average monthly yield of a 3-month Treasury. The total is based on weighted average monthly benchmark yields. O Portfolio Yield ^ Benchmark Yield• Portfolio Earnings for months ended December 31, 2005 300.0(10 Bud~t Actual Percent 250,000 General 329,370 68,071 20.67% F~terptise 54,690 92 0.17% 2~'~ Internal Service 88,060 27,499 31.23% 150,000 100,000 Total ® 95,661 20.26% 50,000 General Fisuprise Inteltml Service OBudget ^Acmal Yield Curve 5.00% 4.50% 4.00% 9.50% 3.00% 2.50% 2.00% 7.50% 1.00% 0.5096 0.00% 3 mo 8 mo 1 yr 2yr Syr tOcWS -d-Nov-05 -IN-Dec-05 WAM • Pooled Funds 10 9 8 7 8 5 4 3 2 t Oct-05 Nov-05 Doc-05 % of funds invested in: Secutides & Pools Bank Depository Total % of funds invested Operating Account Balance Average for December 2005 2004 92.88% 95.96% 7.12% 4.04% 100.00% 100.00% 2593,015.54 1,278,446.02 • • ~.a F xa F O pq ~ F N V w Lam' .O a 0 s V V 'V V N d z tl W V t V ~~ a •u Q a n h 0 ti • W W al F F ~I U ~I U Glxl 0 0 0 0 o e e e e ~~~ ~~~~~~, 0 0 0 ~~~~ o o o a e e e e o ~~, o o 0 0 0 _ N N N N N~~~ N N N [~ O~ ~ N N O R O V' d' DD M N O~ 00 00 00 ~ 7 ~ M b 00 ~ ~ ~ 'R ~ ~ ~ ~ M O T 1~ I~ ~ 1~ O _ _ . -. . + N N N --~ ~--~ O N^ a 0 O N ~--~ O N O C O O O O O O C C C C C C O 0 0 0 C C O O C C O O C 0 0 0 0 0 o e o 0 0 0 0 0 o e o 0 ~, o o ~~~~o 0 0 ~~~~~~ 0 0 o o 0 0 0 0 0 ~o 0 0~ 0 0 o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o N N N N N N N N N N N N N N N N N N tt N 1~ O~~ v N M M M f+1 f+l M M M M M M M M M M M M M M M N M C~1 M M M ~ 7 7 ~ V R ~ ~ ~ ~ V' V d' V 7 ~ 7 ~ V' ~ ~ ~ 7 ~ ~ V e e e o 0 0 0 o e o 0 0 0 0 0 0 0 ~ ~ ~ ~ ~ o ~ e ~ ~ ~ ~ o o o ~ \ 0 0 ~ o 0 0 0 0 0 ~ o o e 0 0 e~ p .° .. e M N b n n ~ ~ ~ n M ~ 0 o 0 ~ r ~ O O ~ ~ W o ~O ~ M M O ~ + O~ h S . . 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W ~~ a~ a~ .~ N N N U Qi S A ~~ ~Aw I~ c~p C d U .-. 0 3~ ~~ N .-. • 5 • Backup for the 2005 Audit Report will be provided at the meeting • U l,J • City of La Porte Interoffice Memorandum To: Fiscal Affairs Committee From: John Joerns, Assistant ty ger Date: January 18, 2006 Subject: Habitat for Humanity/Delinquent Tax Properties Attached is a letter from Habitat for Humanity expressing interest in several delinquent tax properties and property donated to the City. Also, included is a memo notifying Council of their interest. These properties are on the Northside and are zoned residential. The Planning Department has reported that there is water, sewer and paved access to all of the lots. The information on delinquent taxes, liens, HCAD (adjudged) values is provided separately. This information will be reviewed at the January 23, 2006 meeting for a recommendation to the full City Council. The lots are: Blk 104 Lots 28-32 - No. 4`~ Blk 105 Lots 12-14 - No. 4'~ Blk 104 Lots 23-25 - No. 4`~ Redeemed no longer available Blk 104 Lots 26-27 - No. 4`~ Donated to Ciry; no back taxes, only costs are legal, filing fees etc. XC: CC DF CA KP JJ/jb -MMARY OF FORCLOSURE ACTIVITY • HCAD ACCOUNT NO: 023-216-004-0028 CAUSE NO: 1999-37587 PLAINTIFF(S): City of La Porte & La Porte Independent School District JUDGMENT AGAINST: La Porte -Houston Realty Co JUDGMENT DATE: August 14, 2001 STRUCK OFF DATE: July 2, 2002 ORDER OF SALE: March 22, 2002 DEED RECORDED DATE: • STRUCK OFF TO: City of La Porte CONSTABLE: Bill Bailey, Constable Precint No 8 PROPERTY ADDRESS: North Fourth Street LEGAL DESCRIPTION: Lots 28 tliru 32 Block 104 La Porte ADJUDGED VALUE (IN JUDGMENT): $12,500.00 SQUARE FOOTAGE: 15,625 SUMMARY OF SALE ACTIVITY BIDDER: Habitat for Humanity ~ ~ BIDDER'S ADDRESS: ~ PO~Box.2087.. AMOUNT OF BID: $12,500.00 La Porte, TX 77572-2087 AMOUNT OF DEPOSIT: $1,250.00 AMOUNT DUE: ~ $11,250.00 BIDDER'S PHONE NO: PRORATED PERCENTAGED OF TAXES DUE TO EACH JURISDICTION BASED UPON JUDGMENT JUDGMENT TO COUNTY, ET AL. % SCHOOL % CITY % TOTAL AMOUNT DUE $6,632.66 37.56% $7,137.25 40.42% $3,889.26 22.02% $17,659.17 ASSOCIATED COSTS ON ORIGINAL AND SEALED BID SALES ESTIMATED AMOUNT AMOUNT OF COURT CONSTABLE/PUBLICATI AD LITEM RESEARCH FEE & TO BE PRORATED TO BID COST ON FEE (TISD) FEE DEED RECORDING FEE TAXES $12,500.00 $0.00 $175.00 $0.00 $250.00 $12,075.00 PRORATED TAX AMOUNTS TO EACH JURISDICTION OWED TO COUNTY % ~ SCHOOL °k CITY % TOTAL PRORATED AMOUNT $4,535.29 37.56% $4,880.31 40.42% $2,659.40 22.02% $12,075.00 Amount of Bid: $12,500.00 Costs: -District Clerk $0.00 -Tax Master $0.00 -Constable Fee $0.00 -Publication $175.00 -Abstract Fee $250.00 -Ad Litem Fee $0.00 Total: $12,075.00 Taxing Jurisdictions: Amount in Judgment: % Amount Received City of La Porte $3,889.26 22.02% $2,659.40 La Porte ISD $7,137.25 40.42% $4,880.31 Harris County $3,064.81 17.36% $2,095.66 San Jacinto CCD $3,567.85 20.20°~ $2,439.63. State of Texas $0.00 0.00% $0.00 $17,659.17 100.00% $12,075.00 Costs + Taxes $18,084.17 Adjudged Value $ 12,500.00 P170 Real: Account er Address Owner Name 'Advanced `(,~~~~ Personal: Accou Number Address Owner Name Advanced Real Property Account ~• ~,,~~ ~ HCAD Account # :0232160040028 Tax Year : 2002 4:. ~_.~ ~~ Owner Name :UNKNOWN Ownership History... Owner Address INVALID ZIP 00000-0000 Property Address : 0 N 4TH ST LA PORTS TX 77571 Legal Description.:. LTS 28 THRU 32 BLK• 104• LA PORTS State Class Code : C1 -- Real, Vacant Lots/Tracts Homestead Exemption : -- Special Exemption : -- )urisdiction Codes :020 040 047 071 Overlapping/Shared CAD : No Notice Date Capped Account : No ARB Approved Value Status :Value Unchanged Notice Not Required Your taxes will be based on Appraised Value, less applicable exemptions, if any. Use market value for comparison with your neighbors. The appraised value below will reflect the homestead cap if applicab/e. Valuation : TY2002 Previous Chanoe Appraised Value Market Value Land : 12,500 0 12 500 Improvement : ® 0 ~ 0 Ag/Tmbr/Spc : 0 0 0 Total Value : 12,500 0 12,500 12,500 Note: For any problems or questions with any account, please email us with the account number (if you have it) and the nature of the problem or question. Home Records ''=#.`; .~. R.es.id..enti.al:.froperty Data-~ Account Number :0232160040028 Location : 0 N 4TH ST Tax Year :2002 View Main Screen Card Parcel ID : 20 - 00921.3 - 04.0 - 013.0 - 0 / 000 - 001 1 1 Land Use :100 -- Residential Vacant Land Land Area :15,625 sq. ft. 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N m MI L7 MIN N Si 2 S 3 2 2 5 LDti5Z9 ;52152 5 ~UMMARY OF FORCLOSURE ACTIVITY i HCAD ACCOUNT NO: 023-217-005-0012 CAUSE NO: 2000-21589 PLAINTIFF(S): City of La Porte & La Porte Independent School District JUDGMENT AGAINST: Melvin Gay, Sr & Heirs JUDGMENT DATE: January 5, 2001 STRUCK OFF DATE ORDER OF SALE: January 10, 2001 DEED RECORDED DATE: June 26, 2001 STRUCK OFF TO: CONSTABLE: Bill Bailey, Constable Precint No 8 PROPERTY ADDRESS: North Fourth Street LEGAL DESCRIPTION: Lots 12-14 Block 105 La Porte ADJUDGED VALUE (IN JUDGMENT): $ 7,500.00 SQUARE FOOTAGE: 9,375 SUMMARY OF SALE ACTIVITY June 5, 2001 City of La Porte BIDDER: AMOUNT OF BID: AMOUNT OF DEPOSIT: AMOUNT DUE: $7,500.00 $750.00 $6,750.00 BIDDER'S ADDRESS: BIDDER'S PHONE NO: PRORATED PERCENTAGED OF TAXES DUE TO EACH JURISDICTION BASED UPON JUDGMENT JUDGMENT TO COUNTY, ET AL. % SCHOOL % CITY % TOTAL AMOUNT DUE $2,029.09 24.27% $4,076.54 48.76% $2,255.58 26.98% $8,361.21 ASSOCIATED COSTS ON ORIGINAL AND SEALED BID SALES ESTIMATED AMOUNT AMOUNT OF COURT CONSTABLE/PUBLICATI AD LITEM RESEARCH FEE & TO BE PRORATED TO BID COST ON FEE (TISD) FEE DEED RECORDING FEE TAXES $7,500.00 $1,024.00 $175.00 $1,250.00 $250.00 $4,801.00 PRORATED TAX AMOUNTS TO EACH JURISDICTION OWED TO COUNTY % SCHOOL % CITY % TOTAL PRORATED AMOUNT $1,165.10 24.27% $2,340.75 48.76% $1,295.15 26.98% $4,801.00 Amount of Bid: $7,500.00 Costs: -District Clerk -Tax Master -Constable Fee -Publication -Abstract Fee -Mowing Leins -Ad Litem Fee $974.00 $50.00 Mike Landrum $0.00 $175.00 $250.00 $285.00 $1,250.00 Ed Snavely Total: $4,516.00 Taxing Jurisdictions: Amount in Judgment: % Amount Received City of La Porte $2,255.58 26.98% $1,218.27 La Porte ISD $4,076.54 48.76% $2,201.79 Harris County $1,745.27 20.87% $942.64 San Jacinto CCD $283.82 3.39% $153.29 State of Texas $0.00 0.00% $0.00 $8,361.21 100.00% $4,516.00 Costs + Taxes $11,345.21 Adjudged Value $ 7,500.00 P130 HCAD: Appraisal Record Detail ~ Page 1 of 2 Real: Account Number Address Owner Name Advanced ~ '~ Personal: Account Number Address Owner Name Advanced ~.1, n '' ~ _,;; i 11 ~~ ~ Real Property Account ..~ ~+ HCAD Account # :0232170050012 Tax Year : 2001 r,, ; Owner Name :GAY HAZEL Ownership '~- ! Histor y... Owner Address : PO BOX 68 MEXIA TX 76667-0068 Property Address : 0 N 4TH ST LA PORTE TX 77571 Legal Description LTS 12 13 & 14 BLIC 105 LA PORTE .' State Class Code : C1 -- Real, Vacant Lots/Tracts Homestead Exemption : -- ., , Special Exemption : -- Jurisdiction Codes :020 040 047 071 Overlapping/Shared CAD : No Notice Date :04/26/01 Capped Account : No ARB Approved :08/10/01 Value Status :All Values Certified Your taxes will be based on Appraised Value, less applicable exemptions, if any. Use market value for comparison with your neighbors. (Homestead Cap) Valuation : TY2001 Previous Change App raised Value Market Value Land : 7,500 0 7,500 Improvement : 0 0 0 Ag/Tmbr/Spc : 0 0 0 Total Value : 7,500 0 7,500 7,500 4-Year Value History... .. n- y.. R .a SimilarOwner~Nariie ~ - .. ~, .. Nearby Addresses ... ~' Related Maps ~~ Residential~Vacant~Data ~ ` ~~ Harris County Tax Bill Note: Year 2001 (current year) values are sti/l preliminary and not a// values are avai/able. They are subject to change as a resu/t of protests, corrections, and ARB review. Values should be Tina/ by /ate summer. Also, if a preliminary value has yet to be determined, values for the current year will http://www.hcad.org/cgi-bin/AV/AVDetail.asp?taxyeai=2001 &acct=0232170050012 12/10/2001 W ~ ~ ~ ~'9IST.RIC'?' F- o W '~ ' ~ ~ a~9 *m " Z n ~ ~"~ ~ e u . ~ a , . .~ i. 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Several properties are on the delinquent tax roles and the City of La Porte is trustee for these properties. Habitat for Humanity, earlier, had expressed little interest in properties east of SH146 because of building issues. As noted in the letter they have resolved these concerns. One tract (Blk. 104, Lots 12-14) was donated to the City and has good title and could be quickly deeded to Habitat for Humanity. I have asked Kathy Powell to get the information on outstanding taxes, court costs and liens. The planning department will confirm utility availability and access (improved) to the various lots. This information will then be forwarded to the Fiscal Affairs Committee for their recommendation to City Council. I have also connected Habitat for Humanity with the Port of Houston regarding the lots they have accumulated through the buy-out program associated with the new pre-gate facility. Habitat will soon be completing their last identified home location and they may need to move quickly on their next project. If Council is so inclined, the property that was donated to the City could be turned around quickly. If I receive no objections from Council by January 1, 2006, we can place this item (Blk. 104, Lots 12-14) on the first agenda in January. Staff will research the expenses associated with the gift of this tract to the City and estimated costs to deed to Habitat for Humanity as well as the HCAD values. JJ/ml c: Debra B. Feazelle, Cynthia Alexander Knox Askins Kathy Powell Wayne Sabo ~~jC~4:~ ~/l cep . ~=',~ ~'/ l(~~3 jva ' 4, ... ~ $ LA ® ® FORTE HABITAT FOR HUMANITY P.O BOX 2087 LA FORTE, TX 77572-2087 City of La Porte 604 W. Fairmont Pkwy La Porte, TX 77571 John Joerns, Asst. City Manager November~l, 2005 ~i ~_ ~~•, ••• ~~~ • SUBJECT: Property for La Porte Habitat for Humanity (Tax~Resale Properties - Your letter 10/16/05) Dear Mr. Joerns: next steps. Thanks for your continuing help and support of HFH. We are interested in tax sale properties available for our building program in La Porte, however, most available are single• sites and East of SH 146. These•problems had to b,~ worked out before we could commit to land in this area. State requirement. for wind insurance to have engineer sealed plans would be cost prohibitive i~ we could not find an engineer to wdrlc•with us~. We' now have one committed. Moving our temporary job storage building to a single site is possible, but a burden on our volunteers. • We have two areas that we are evaluating that seem to be acceptable. The first is the 500 block of N. 4th.St. The other is property on N. Holmes that~the Port has•purchased or has commitment or signed contracts. Tax records show City of La Porte as trustees for li lots (4 bldg. sites) in blocks 104 & 10~. T~iere are 9 additional lots undeveloped in these blocks and the 2 lots donated to.the~City by E. G. Foster. (8 total possible bldg., sites). See attached sketch for HCAD #'s, Cause #'s, & legal descriptions. Information you provided concerning. the Port acquisition program in East La Porte looks ~ like it has po~sibil•ities . ~ .I have tentatively look at infrastructure~in the area. On N: Holmes there are potentially 8 to ~.i building site owned by the Port, Navigation Dist. and two estates. N. Nugent i8 paved for only half a block; and N. Brownell•has a. few privately owned possibilities on the westerly: side of it. We have a number of•letters out to property owners in Battleground Estates but this area is drying up. for reasonable priced sites. We will probably finish house 16 in. early 2006. So we really need something. now to start drawings, permits, legal. work, etc. Will meet with you at you convenience; to take the. 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O O -~ -~ o 0 0 0 0 0 w to ~ w rn w rn w N ~ W W O CJ1 C C O O O O v eo a 3 0 C W pN~ N~ ~ Os x N QD ~ N N N N ~ ~ --i ~ cc co cc co --1 -1 ~ ~ o ~ am N f p f /1 l /! ~ ~ ~ ~ T ~ ~ T 0 0 0 0 A n n n m m m m ~ ~ ~ ~ ~ ~ ~ ~ O O O O v ~ ~ v m a m m c n ~ ~ ~ ~ ~ ~ ~ ~ m m cu m fA Ul N f/1 rn x ~a ~ ~ fll W c ~ A C~ ~ ~~ d A ~ °+ S ~ Y` 01 o~~~ a ~ ~D p ~~~~ C ~ ~ ~ 3 ~ n y ~ a o n ,' ~ a cD a rt c a • • ~~ o ~~ ~~ N~ ~~ W N~ , ~_ _ ~-+ ~ N ~ ~ O O n n ~ O 0 3 -», v r ~' v ~ ~ ~ o ~ ~ ~ ~ r: m ~ D ~ am -• ~ C7 ~ o °- ~ ~ 3. v ;~ a m .o ~ o ~' v • • Sorry about the lateness of this report We just received the audit report from the auditors On January 20, 2005 at 1 PM Thanks Finance Staff 1 • • ~ DRAFT 1 CITY OF LA PORTE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the fiscal year ended ' September 30, 2005 ' Prepared by: Department of Finance C~ O r:~~ _ v • A\ V \ m TE XA$ ~~ ~ • • City of La Porte ' Comprehensive Annual Financial Report For the Fiscal Year Ended September 30, 2005 ' TABLE OF CONTENTS Page INTRODUCTORY SECTION Letter of Transmittal 3 Organization Chart 9 GFOA Certificate of Achievement 10 ' List of Elected and Appointed Officials 11 FINANCIAL SECTION ' Independent Auditors' Report 15 Management's Discussion and Analysis 17 Basic Financial Statements: ' Government-wide Financial Statements: Statement of Net Assets 27 Statement of Activities 28 ' Fund Financial Statements: Balance Sheet -Governmental Funds 30 Reconciliation of the Governmental Funds Balance Sheet to ' Statement of Net Assets 33 Statement of Revenues, Expenditures and Changes in Fund Balances -Governmental Funds 34 Reconciliation of the Statement of Revenues, Expenditures, and Changes In Fund Balances of Governmental Funds to the Statement of Activities 36 Statement of Net Assets -Proprietary Funds 38 Statement of Revenues, Expenses and Changes in ' Fund Net Assets -Proprietary Funds 40 Statement of Cash Flows -Proprietary Funds 42 Notes to the Financial Statements 45 ' Required Supplementary Information 71 Notes to the Required Supplementary Information 73 Combining and Individual Fund Statements and Schedules: ' Combining Balance Sheet -Nonmajor Governmental Funds ~ 76 Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Govemmental Funds 78 ' Schedules of Revenues, Expenditures, and Changes in Fund Balances -Budget and Actual: Debt Service Fund 82 Grant Special Revenue Fund 83 ' Section 46 Sales Tax Fund 84 Community Investment Special Revenue Fund 85 Hotel/Motel Occupancy Tax Sales Tax Special Revenue Fund 86 t Tax Increment Reinvestment Zone One Special Revenue Fund 87 Capital Projects Fund 88 Transportation and Other Infrastructure Fund 89 1998 General Obligation Bonds Fund 90 2000 Certificate of Obligation Bonds Fund 91 2000 General Obligation Bonds Fund 92 ' 2002 General Obligation Bonds Fund 93 2005 Certificate of Obligation Bonds Fund 94 ' iii City of La Porte • Comprehensive Annual Financial Report For the Fiscal Year Ended September 30, 2005 TABLE OF CONTENTS Supplementary Individual Fund Financial Statements and Schedules -General Fund Schedule of Revenues -Budget and Actual 98 Schedule of Expenditures -Budget and Actual 99 Combining Financial Statements - Nonmajor Proprietary Funds: Combining Statement of Net Assets 103 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 105 Combining Statement of Cash Flows 106 Combining Financial Statements -Internal Service Funds: Combining Statement of Net Assets 108 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 109 Combining Statement of Cash Flows 110 Capital Assets Used in the Operation of Governmental Funds: Schedule by Source 113 Schedule by Function and Activity 114 Schedule of Changes by Function and Activity 116 STATISTICAL SECTION Govemment-wide information: Govemment-wide Expenses by Function 118 Govemment-wide Revenues 118 Fund information General Govemmental Expenditures by Function 120 General Govemmental Revenues by Source 122 Property Tax Levies and Collections 124 Property Tax Rates -Direct and Overlapping Governments 126 Ratio of Gross General Bonded Debt to Assessed Value and Gross Bonded Debt Per Capita 129 Computation of Direct and Overlapping Debt 130 Ratio of Annual Debt Service Expenditures for General Obligation Debt to Total General Expenditures 131 Revenue Bond Coverage -Water and Sewer Bonds 132 Assessed and Estimated Actual Value of Taxable Property 134 Principal Taxpayers 136 Demographic Statistics 137 Property Value, Construction and Bank Deposits 138 Miscellaneous Statistical Data 139 iv • INTRODUCTORY SECTION • • December 30, 2005 To the Honorable Mayor, Members of the Governing Council, and Citizens of the City of La Porte, Texas: The Finance Department and City Manager's Office is pleased to submit the Comprehensive Annual Financial Report for the City of La Porte, Texas for the fiscal year ended September 30, 2005. 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. State law requires that all general-purpose local governments publish within 120 days of the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP). 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. Because the cost of internal controls should not outweigh their benefits, 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, 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, 2005 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, 2005, are fairly presented in conformity with GAAP. The independent auditor's report is presented as a component of the financial section of this report. 3 • 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 intemal controls and compliance with legal requirements, with special emphasis on intemal 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. 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 34,538. The City is a home rule city operating under the Council-Manager form of government. Policy- making 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 both the City's Manager and Attorney. The City's 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 anon-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 1.6. of the notes to the financial statements. The City's accounting records for general governmental operations are maintained on a modified accrual basis, with the revenues being recorded when available and measurable and expenditures being recorded when the services or goods are received and the liabilities are incun-ed. 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 individual department level. All agencies of the City of La Porte are required to submit requests for appropriation to the City's Manager on or before May 26th of each year. The City's Manager uses these requests as the starting point 4 • 1 for developing a proposed budget. The City's 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 August. The appropriated budget is prepared by fund, function (e.g., public safety), and department (e.g., police). The City Manager must ' approve transfers of appropriations within a department. Transfers of appropriations between departments, 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 72 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 82. Factors Affecting Financial 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. 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. It 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. The county's 64 hospitals have over 17,000 beds of which 4,600 are in the Texas Medical Center. Higher education facilities includes: University of Houston, Rice University, Texas Southern University, St. Thomas University and Houston Baptist College, 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. Because of this, and the metropolitan advantages of Houston, La Porte is one of the few communities in the Gulf Coast area that offers this favorable combination. 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. 5 • • 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 atwenty-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. Neighbofioods 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 neighbofiood 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 neighbofioods, and these distinguishing features should therefore be preserved. Neighbofioods that are safe, well maintained and have character will maintain property values and thus maintain a sound neighborhood environment and a stable residential tax base. The attractive appearance and environmental quality of existing and future low-density residential neighbofioods 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. 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 neighbofiood 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 the 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. 6 1 • • ' 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. Cash management policies and practices. Cash temporarily idle during the year was invested in demand deposits and obligations of the U.S. Treasury. The maturities of the investments range ' from 30 days to 2 years, with an average maturity of 6.5 months. The average yield on investments was 2.70% for the govemment. Investment income includes appreciation in the fair value of investments. Increases in fair value during the current year, however, do not necessarily ' represent trends that will continue; nor is it always possible to realize such amounts, especially in the case of temporary changes in the fair value of investments that the City intends to hold to maturity. ' Pension and other post employment benefits. The City of La Porte sponsors a cost sharing multiple employer pension plan for its emergency services personnel. Each year, an independent ' actuary engaged by the pension plan calculates the amount of the annual contribution that the City of La Porte must make to the pension plan to ensure that the plan will be able to fully meets its obligations to retired employees on a timely basis. The City of La Porte also provides pension benefits for its non emergency services employees. These benefits are provided through astate-wide plan managed by Texas Statewide Emergency Services Personnel Retirement Fund. The City of La Porte has no obligation in connection with employee benefits offered through this plan beyond its annual contractual payment to the Texas Statewide Emergency Services Personnel Retirement Fund. The City of La Porte also provides postretirement health and dental care benefits for certain retirees and their dependents. As of the end of the current fiscal year, there were 53 retired employees receiving these benefits. Additional information on the City of La Porte's pension arrangements and post employment benefits can be found in Notes 6 and 10 in the notes to the financial statements. • 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, 2004. This was the twenty-fourth 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, Debra Brooks Feazelle City Manager Cynthia Alexander Assistant City Manager 8 ~I Q O ~ Q U V O CJ • a 0 a O v u e d • Certificate of Achievement for Excellence in Financial Reporting Presented to City of La Porte, Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2004 A Certificate of Achievement for Excellence in Financial Reportu-g is presented by the Government Finance OtScers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. S yy ~ F ~ ~,„ID. President ~~ ~~9~ ~~~ Executive Director lU ~ ~ CITY OF LA PORTE LIST OF ELECTED OFFICIALS ALTON PORTER MAYOR PETER GRIFFITHS COUNCIL PERSON AT LARGE A MICHAEL MOSTEIT MAYOR PRO TEM DISTRICT 1 HOWARD EBOW COUNCIL PERSON DISTRICT 3 LOUIS RIGBY COUNCIL PERSON DISTRICT 5 BARRY BEASLEY COUNCIL PERSON AT LARGE B CHUCK ENGELKEN COUNCIL PERSON DISTRICT 2 TOMMY MOSER COUNCIL PERSON DISTRICT 4 MIKE CLAUSEN COUNCIL PERSON DISTRICT 6 11 • 12 • i FINANCIAL SECTION 13 14 /~~L 1 11 Greenway Plaza, Suite 1515 ~ ~~ ~ ~ ~J~.J'1 [ 2117 Post Office Street Houston, TX 77046 Galveston, TX 77550 (713) 621-1515 Ck.RTIFIED I'UBI.IC ACCOUNTMTS (409) 762.8380 Fax: (713) 621-1570 PROFLSSION:gI_ COKPOIZ~TION Fax: (409) 762-1749 ' Independent Auditors' Report To the Honorable Mayor and Members pR AFT ' of the City Council 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 City of La Porte, Texas (the City), as of and for the year ended September 30, 2005, 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's management. Our responsibility is to express an opinion on these fmancial statements based on our audit. ' We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing ' Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the ' amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our ' opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the ' respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of La Porte, Texas, as of September 30, 2005, 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. A•iL\11Ci:5'.\:ila:IC4K!~tiI'Illy';L(11°l'isRl1!-Ii~Ui'lrI:;LIC'~\C'("I)1~h1:\?:I'S.'I!:r:.\':?.C)('1Lf5'1)1 t: C('.'IIFI!'1~I'I. BLI~'.+\C:C'OI~V'I:\KfS, rr\.\asclr•t;rrcrrntltx.\r!r,~.\I.rvr.\;•~nI \s;uc•L~rrnurr•I~ r:; IVrrl~rn•.~I 1.'s. ~~nl~n~rrc;\rnm::\I c~lru:i ' 15 To the Honorable Mayor and Members of the City Council City of La Porte, Texas Page 2 of 2 In accordance with Government Auditing Standards, we have issued our report dated December 30, 2005, on our consideration of the City's internal control over fmancial reporting and on our tests of its compliance with certain provisions or laws, regulations, contracts, and grants. That report, which has been issued separately from this document, is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. The Management's Discussion and Analysis on pages 17 through 23, budgetary comparison information on pages 72 through 73 and Required Pension System Supplementary Information on page 71 are not required parts of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual fund statements and schedules and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. DRAFT December 30, 2005 Houston, Texas 16 ' CITY OF LA PORTE, TEXAS ,• • Management's Discussion and Analysis t For the Year Ended September 30, 2005 As management of the City of La Porte, we offer readers of the City's financial statements this narrative ' overview and analysis of the financial activities of the City for the fiscal year ended September 30, 2005. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 3-8 of this report. ' FINANCIAL HIGHLIGHTS • The assets of the City of La Porte exceeded its liabilities at the close of the most recent fiscal year by ' $86,206,770 (net assets). Of this amount $20,402,779 (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors in accordance with the City's fund designation and fiscal policies. ' • The government's total net assets increased by$2,378,670. • As of the close of the current fiscal year, the City of La Porte's governmental funds reported combined ending fund balances of $31,986,476. Of this amount, $29,715,859 (92%) is unreserved and available for use within the City's designation and policies. • At the end of the current fiscal year, unreserved fund balance for the general fund was $8,972,135 ' approximately (37%) of the total general fund expenditures. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction of the City's basic financial statements. The City's basic financial statements are comprised of three components: 1) government-wide financial ' statements, 2) fund financial statements and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements 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 aprivate-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 fiscal year. All changes in net assets are reported when the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but ' unused compensated absences). Both of the government-wide financial statements report functions of the City that are principally supported by ' taxes and intergovernmental revenues (governmental activities) from functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, health and sanitation and culture and recreation. The business-type activities of the City include the Water and Sewer Utilities, Airport, La Porte Area Water Authority, Sylvan Beach Convention Center and Bay Forest Golf Course operations. The government-wide financial statements can be found on pages 27-29 of this report. ' 17 CITY OF LA PORTE, TEXAS Management's Discussion and Analysis For the Year Ended September 30, 2005 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 funds and proprietary funds. Governmental funds -Governmental funds are used to account for essentially the same functions reported as governmental activities in the govemment-wide financial statements. However, unlike the govemment-wide financial statements, governmental fund financial statements focus on current sources and uses 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 funds balance sheet and the governmental fund statements of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains 16 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, 2002 General Obligation Bond, and 2004 Certificates of Obligation Bond funds, all which are considered to be major funds. Data from the other 13 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The basic governmental fund financial statements can be found on pages 30-36 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 govemment-wide financial statements. The City uses proprietary funds to account for its utilities, airport, water authority, convention center and golf course. 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 its motor pool services, technology services and employee health insurance program. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the govemment-wide financial statements. Proprietary funds provide the same type of information as the govemment-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Utility and La Porte Area Water Authority, Airport, Bay Forest Golf Course and Sylvan Beach Convention. All internal service funds are combined into a single aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on pages 38-43 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 govemment-wide and fund financial statements. The notes to the financial statements can be found on pages 45-69 of this report. 18 CITY OF LA PORTE, TEXAS I, • Management's Discussion and Analysis For the Year Ended September 30, 2005 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. Required supplementary information can be found on pages 71-72 of this report. ' The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information for the general fund. Combining fund statements and schedules can be found on pages 75-94 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of La Porte, assets exceeded liabilities by at the close of the fiscal year. By far the largest portion of the City's net assets (64%) reflects its investment in capital assets (e.g., land, buildings, machinery, equipment, improvements, construction in progress, and infrastructure), less any related debt used to acquire those assets that are 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 capital assets themselves cannot be used to liquidate these liabilities. City of La Porte's Net Assets ' Governmental Activities ' 2005 2004 Business-Type Activities Total Current and other assets Capital assets Total Assets Long term liabilities Other liabilities Total Liabilities $ 43,543,568 $ 30,803,701 46,416,520 40,889,013 89,960,088 71,692,714 31,157, 332 14, 573, 457 3,857,929 5,597,464 35,015,261 20,170,921 Net Assets: Invested in capital assets, net of related debt 28,933,050 32,752,971 Restricted 6,873,812 5,770,840 Unrestricted 19,137,965 12,997,982 TotatNetAssets $ 54,944,827 $ 51,521,793 2005 2004 $ 7,559,519 $ 7,760,850 33,734,684 34,110,595 41,294,203 41,871,445 7,498,569 7,507,468 2,533,691 2,057,671 10,032,260 9,565,139 26,589,684 25,996,416 3,407,445 3,662,800 1,264,814 2,647,090 $ 31,261,943 $ 32,306,306 2005 2004 $ 51,103,087 $ 38,564,551 80,151,204 74,999,608 131,254,291 113,564,159 38,655,901 22,080,925 6,391,620 7,655,135 45,047,521 29,736,060 55,522,734 58,749,387 10,281,257 9,433,640 20,402,778 15,645,072 $ 86,206,770 $ 83,828,099 An additional portion of the City's net assets $10,281,257(12%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets of $20,402,778(24%) may be used to meet the government's ongoing obligations to citizens and creditors. As of September 30, 2005, 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 categories -governmental and business-type activities. 19 CITY OF LA PORTE, TEXAS ® ~ t Management's Discussion and Analysis For the Year Ended September 30, 2005 ' Analysis of the City's Operations -the following table provides a summary of the City's operations for the ' year ended September 30, 2005, with comparative totals for year ended September 30, 2004. Governmental activities increased the City of La Porte's net assets by $3,423,034. Business-type activities decreased the City's net assets by $1,037,221. ' Revenues: Program Revenues: City of La Porte's Changes in Net Assets ' Governmental Business-Type Activities Activities Total ' 2005 2004 2005 2004 2005 2004 Charges for Services $ 4,083,297 $ 3,697,062 $ 8,257,686 $ 7,884,196 $ 12,340,983 $ 11,581,258 Operating grants and contributions 2,639,934 576,262 - - 2,639,934 576,262 General revenues: Property taxes, levied for general purpo 10,192,599 9,139,422 - - 10,192,599 9,139,422 Property taxes, levied for debt service 1,623,095 1,922,117 - - 1,623,095 1,922,117 Industrial payments 6,991,926 6,896,112 - - 6,991,926 6,896,112 Franchise taxes 1,885,801 1,718,875 - - 1,885,801 1,718,875 Sales tax 3,459,979 3,263,459 - - 3,459,979 3,263,459 Unrestricted investment earnings 720,137 376,359 165,162 88,602 885,299 464,961 Miscellaneous 753,595 495,102 827,183 874,148 1,580,778 1,389,248 Gain (loss) on sale/retirement of capital 103,594 - (5,784) 103,594 (5,784) Total revenues $ 32,453,957 28,084,770 9,250,031 8,841,160 41,703,988 38,925,930 Expenses: General Government Public Safety Public Works Hearth and Sanitation Culture and Recreation Interest on Long-term debt Water Services Sewer Services Airport Bay Forest Golf Course Sylvan Beach Convention Center Total Expenses Change in net assets before transfers Transfers Change in net assets Net assets -beginning Net assets -ending 7,411,122 10,487,889 - - 7,411,122 10,487,889 10,387,759 11,947,288 - - 10,367,759 11,947,288 5,164,855 1,287,829 - - 5,164,855 1,267,829 1,887,204 1,906,519 - - 1,887,204 1,906,519 3,717,791 4,108,491 - - 3,717,791 4,106,491 863,818 889,644 - - 883,818 889,844 - - 8,477,982 8,258,424 6,477,962 8,258,424 - - 1,819,758 1,895,709 1,819,758 1,895,709 - - 157,186 142,785 157,188 142,765 - - 1,242,613 1,222,819 1,242,813 1,222,819 - - 211,882 194,314 211,882 194,314 29,412,549 30,405,858 9,909,199 9,712,031 39,321,748 40,117,689 3,041,408 (2,320,886) (859,188) (870,871) 2,382,240 (3,191,759) 381,825 884,897 (381,825) (884,897) - - 3,423,033 (1,836,191) (1,040,793) (1,555,568) 2,382,240 (3,191,759) 51,521,794 53,157,984 32,308,308 33,881,874 83,828,100 87,019,858 $ 54,944,827 $ 51,521,793 $ 31,265,513 $ 32,306,306 $ 86,210,340 $ 83,828,099 20 CITY OF LA PORTE, TEXAS • • Management's Discussion and Analysis For the Year Ended September 30, 2005 FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS Governmental funds -The focus of the City of La Porte's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a ' government's net resources available for spending at the end of the fiscal year. At of the end of the current fiscal year, the City of La Porte's governmental funds reported combined ending fund ' balances of $31,986,476. Approximately 93% of this total amount ($29,484,124) constitutes unreserved fund balance. The remainder of the fund balance is reserved to indicate that it is not available for new spending because it has already been committed 1) to pay for encumbrances ($140,055), 2) to provide for inventories ($69,136), 3) to pay for debt service ($1,704,631), 4) to provide for municipal court building security ($170,146), 5) to provide for municipal court technology ($110,493), 6) to provide for park zone ($247,400) and 7) to provide for confiscated funds ($60,491). ' In the general fund, the City budgeted for a decrease in the fund balance of $1,373,482. The decrease appears to show a projected loss; however the City does adopt revenues, consequently, the final amended budget shows increases to expenditures that are not offset by revenues. Due to actual expenses being less than budgeted, the actual fund balance increase for fiscal year 2005 was $1,731,374. The 2004 Certificates of ' Obligation fund balance increased by $1,564,389 due to bond proceeds received during year exceeding capital expenditures. The 2005 General Obligation Fund balance increased by $7,649,548 due to the receipt of bond proceeds. Other Governmental fund balances increased in 2005 by $1,713,572 due to increased revenues and other sources of financing. Proprietary funds -The City's proprietary fund statements provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net assets of the respective proprietary funds are Utility - $11,903, Airport - $2,362,455, La Porte Area Water Authority - $1,129,215, Sylvan Beach Convention Center - $260,080, and Bay Forest Golf ' Course - $2,926,580. The change (decrease) in net assets of the proprietary funds in 2005 was as follows: Utility - (786,966), Airport - (118,832), La Porte Area Water Authority - $104,999, Sylvan Beach Convention Center- $21,590, and Bay Forest Golf Course - (265,154). General Fund Budgetary Highlights -The City made revisions to the original appropriations approved by the City Council. Overall these changes resulted in an increase from the original budget of 1 % or $262,824. Variances noted in the general fund are due to City Council appropriating additional capital projects, increased spending for public safety projects, and salary savings. Also, the City realized windfall payments from its in-lieu categories due to recognition of increased taxable items such as static inventory. CAPITAL ASSETS AND DEBT ADMINISTRATION ' Capital Assets -The City of La Porte's investment in capital assets for its governmental and business-type activities as of September 30, 2005 amounts to $80,151,205 (net of accumulated depreciation). This investment in capital assets includes land, building, equipment, improvements, infrastructure and construction in progress. ' Major capital asset events during the current fiscal year included the following: • Improvements to the wastewater treatment plant, approximately $3.0 million. ' • Construction in progress Emergency Medical Facility $924,679. • Construction in progress Canada Road $2.4 million. • Construction in progress Bay Area Blvd $3.3 million. 21 CITY OF LA PORTE, TEXAS Management's Discussion and Analysis For the Year Ended September 30, 2005 Land Buildings Equipment Improvements Infrastructure Construction in Progress Total Capital Assets at Year-end Net of Accumulated Depreciation Governmental Activities 2005 $ 7,682,585 8,697,432 4,664,346 5,964,029 9,976,700 r LJ Business-type Activities 2005 $ 2,350,478 781,948 95,652 29,322,366 Total $ 10,033,063 9,479,380 4,759,998 35,286,395 9,976,700 9,431,427 1,184,241 10,615,668 $ 46,416,520 $ 33,734,685 $ 80,151,205 Additional information of the City of La Porte's capital assets can be found in note 4 on pages 56-58 of this report. Debt Administration - At the end of the current fiscal year, the City of La Porte had bonded debt payable of $35,520,000. Of this amount, $28,375,000 comprises bonded debt backed by the full faith and credit of the government and $7,145,000 represents bonds secured solely by water and sewer revenues. Outstanding Debt at Year End Bonds Payable General Obligations Revenue Bonds Payable Certificate of Obligations Total Govemmental Business-type Activities Activities 2005 2005 $ 17,325,000 $ - - 7,145,000 11,050,000 - $ 28,375,000 $ 7,145,000 Totals $ 17,325,000 7,145,000 11,050,000 $ 35,520,000 The City of La Porte maintains an "Aa3", "A+", "AA" by Moody's, Standard and Poor's and Fitch respectively for general obligation debt. The revenue bonds have been rated "A" by all three of these rating agencies. Additional information on the City of La Porte's long-term debt can be found in note 5 on pages 59-63 of this report. 22 1 CITY OF ILA PORTE, TEXAS , • Management's Discussion and Analysis For the Year Ended September 30, 2005 ECONOMIC FACTS AND NEXT YEAR'S BUDGETS AND RATES i 1 The unemployment rate for the Houston metropolitan area is currently 6.1 percent, which is an increase from a rate of 6.0 percent a year ago. This compares identical to the state's average unemployment rate of 5.3 percent which is comparable to the national average rate of 5.1 percent. The City's budgets for all funds have benefited from a strong and expanding economy from the past several years, but in this coming fiscal year, the City's budget has been impacted by the slow down in economic growth and devaluation of industrial district assets due to age. Total assessed property value for all residential and commercial property in the City of La Porte exceeded $1.9 billion for fiscal year 2005 which is 5% higher than last year. The trend for total assessed property values has been steadily increasing each year with an average annual increase of 16% over the past 5 years. Sales tax receipts have grown slightly this fiscal year due to an increase in the economy. This revenue source is the most volatile and subject to decline if an economic slowdown occurs. Assessed Property Valuations Sales Tax Collections (in billions) (in millions) 1 1 1 1 3.2 3.1 3 2.9 2.8 2.7 2.8 2.5 REQUEST FOR INFORMATION 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 Assistant Director of Finance, 604 West Fairmont Parkway, La Porte, Texas, 77571. 23 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 24 ~ ~ BASIC FINANCIAL STATEMENTS Zs • • 26 • CITY OF LA PORTE, TEXAS Statement of Net Assets September 30, 2005 ASSETS Cash and cash equivalents Investments Receivables, net of allowance for uncollectibles Accounts receivable Taxes receivable Due from other governments Accrued interest receivable Other accounts receivables Deferred Issuance Costs Materials and supplies inventories at cost Restricted Assets: Cash and cash equivalents restricted for customer service deposits Investments restricted for debt service Other Capital assets: Land Buildings and improvements Improvements other than buildings Infrastructure Machinery and equipment Construction in progress Accumulated depreciation Total assets LIABILITIES Accounts payable Accrued salaries payable Interest payable Unearned revenue Other current liabilities Premium on Issuance Accrued interest payable Customer deposits Noncurrent liabilities Due within one year Due in more than one year Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Debt service Grants and state programs Unrestricted Total net assets Primary Government Governmental Business-type Activities Activities Total $ 12,686,401 25,448,639 $ 641,237 4,490,629 $ 13,327,638 29,939,268 4,282,552 727,116 4,716 104,817 163,796 125,531 7,682,585 17,925,224 10,476,050 23,482,106 12,236,506 9,431,427 (34,817,378) 89,960,088 3,308,852 329,747 50,816 43,886 111,900 12,728 1,195,000 29,962,332 35,015,261 28,933,050 1,820,457 5,053,355 19,137,965 $ 54,944,827 See accompanying notes to financial statements. 27 802,082 31,516 473 4,540 482,429 270,000 836,613 2,350,478 1,488,829 63,194,059 441,728 1,184,241 (34,924,651) 41,294,203 1,925,386 57,175 34,553 18,888 15,362 482,327 715,000 6,783,569 10,032,260 26,589,684 3,407,445 1,264,814 $ 31,261,943 5,084,634 727,116 4,716 136,333 473 163,796 130, 071 482,429 270,000 836,613 10,033,063 19,414,053 73,670,109 23,482,106 12,678,234 10,615,668 (69,742,029) 131,254,291 5,234,238 386, 922 50,816 78,439 18,888 111,900 28,090 482, 327 1,910,000 36,745,901 45,047,521 55,522,734 5,227,902 5,053,355 20,402,779 $ 86,206,770 CITY OF LA PORTE, TEXAS Statement of Activities For The Year Ended September 30, 2005 Program Revenues Fees, Fines and Operating Charges for Grants and Program Activities Expenses Services Contributions Governmental activities: General Government $ 7,411,122 $ 670,332 $ 210,417 Public Safety 10,367,759 1,498,310 865,171 Public Works 5,164,855 24,242 1,464,323 Health & Sanitation 1,887,204 1,429,617 - Culture and recreation 3,717,791 460,796 100,023 Interest on Long Term Debt 863,818 - - Total governmental activities 29,412,549 4,083,297 2,639,934 Business-type activities: Water Services Sewer Services Airport Golf Course Sylvan Beach Convention Ctr Total business-type activities Total government 6,477,962 4,503,710 1,819,756 2,591,406 157,186 32,728 1,242,613 965,983 211,682 163,859 9,909,199 8,257,686 $ 39,321,748 $ 12,340,983 $ 2,639,934 General revenues: Taxes: Property taxes, levied for general purposes Properly taxes, levied for debt service Industrial payments Franchise taxes Public service taxes Investment earnings Miscellaneous Gain (Loss) on sale of assets Transfers Total general revenues and transfers Change in net assets Net assets-beginning Net assets-ending See accompanying notes to basic financial statements. 28 1 • 1 Net (Expenses) Revenues and Changes in Net Assets Governmental Business-type 1 Activities Activities Total $ (6,530,373) $ - $ (6,530,373) 1 (8,004,278) = (8,004,278) (3,676,290) (3,676,290) (457,587) - (457,587) (3,156,972) - (3,156,972) 1 (863,818) - (863,818) (22,689,318) - (22,689,318) 1 - (1,977,822) (1,977,822) ' 771,650 771,650 ~ (124,458) (124,458) - (276,630) (276,630) (47,823) (47,823) (1,655,083) (1,655,083) $ (22,689,318) $ (1,655,083) $ (24,344,401) 1 10 192,599 - 10 192 599 1,623,095 - 1,623,095 ' 6,991,926 6,991,926 1,885,801 = 1,885,801 3,459,979 - 3,459,979 1 720,137 165,162 885,299 753,595 827,183 1,580,778 103,594 - 103,594 381,625 (381,625) - 1 26,112,351 610,720 26,723,071 3,423,033 (1,044,363) 2,378,670 51,521,794 32,306,306 83,828,100 1 $ 54,944,827 $ 31,261,943 $ 86,206,770 s 1 29 CITY OF LA PORTE, TEXAS Balance Sheet Governmental Funds September 30, 2005 ASSETS Cash and cash equivalents Investments Receivables, net of allowance for uncollectibles: Accounts receivable Taxes receivable Due from other governments Grant receivable Other accounts receivables Accrued interest receivable Materials and supplies inventories, at cost Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued salaries payable Due to other funds Retainage payable Unearned revenue Accrued employee separation pay Total liabilities Fund balances: Reserved for: Inventories Encumbrances Municipal Court Building Security Municipal Court Technology Fee Park Zone Confiscated funds Debt service Unreserved, Designated for capital projects Unreserved/Undesignated Unreserved, reported in nonmajor: Special revenue funds Capital projects funds Total fund balances Total liabilities and fund balances General $ 4,652,959 5,988,867 3,661,711 612,370 40,550 81,000 15,037,457 2,144,933 313,793 3,297,405 100,000 5,856,131 69,136 140,055 409,684 8,562,451 i 2004 Certificate of Obligation Bonds $ 1,078,613 693,931 2,157 4,699 1,779,400 214,561 214,561 1,564,839 9,181,326 1,564,839 $ 15,037,457 $ 1,779,400 See accompanying notes to basic financial statements. 2005 General Obligation Bonds $ 7,683,559 54,864 918 370 7,739,711 90,163 90,163 7,649,548 7,649,548 $ 7,739,711 30 Other Governmental Funds $ 7,271,633 6,209,553 114,746 2,152 4,716 541,130 42,044 14,185,974 431,052 1,217 5,226 40,328 117,388 595,211 91,088 60,591 144,625 60,491 1,704,631 4,255,634 7,273,703 13,590,763 $ 14,185,974 Total Governmental Funds $ 20,686,764 12,947,215 3,661,711 727,116 5,227 4,716 541,130 87,663 81,000 38,742,542 2,880,709 315,010 5,226 40,328 3,414,793 100,000 6,756,066 69,136 140,055 91,088 60,591 144,625 60,491 1,704,631 409,684 17,776,838 4,255,634 7,273,703 31,986,476 38,742,542 31 32 • • CITY OF LA PORTE TEXAS Reconciliation of the Governmental Funds t Balance Sheet to Statement of Net Assets September 30, 2005 Amounts reported for governmental activities in the statement of net assets are different because: ' Total fund balances -total governmental funds $ 31,986,476 Capital assets used in governmental activities are not current financial resources and therefore are not reported in this fund financial ' statement, but are reported in the govemmental activities of the statement of net assets. 42,488,415 ' Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds Deferred Revenues 3,370,906 ' Interest payable on long-term debt does not require current financial resources. Therefore, interest payable is not recorded as a liability in governmental funds balance sheets. (50,816) The assets and liabilities of certain internal service funds are not included in the fund financial statement, but are included in the ' governmental activities of the statement of net assets. 8,049,350 Some liabilities, (such as notes payable, capital lease contract ' payable, long-term compensated absences, and bonds payable), are not due and payable in the current period and are not included in the fund financial statement, but are included in the govemmental activities ' of the statement of net assets: Bonds Payable (28,375,000) Premium on Issuance (111,900) Compensated Absences Payable (2,576,400) Bond Issuance Costs 163,796 ' Net assets of govemmental activities $ 54,944,827 ' See accompanying notes to basic financial statements. ' 33 CITY OF LA PORTE, TEXAS Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For The Year Ended September 30, 2005 REVENUES Property taxes Franchise taxes Sales taxes Donations Industrial payments Harris County Joint Venture Other taxes Licenses and permits Fines and forfeits Charges for services Intergovernmental Interest Miscellaneous Total revenues General $ 10,109,435 1,805,800 2,108,192 6,991,926 49,900 531,091 678,205 3,233,453 11,940 268,419 37,186 25,825,547 2004 Certificate of Obligation Bonds $ - 1,751,555 70,509 1,822,064 2005 General Obligation Bonds EXPENDITURES Current: General Government Public Safety Public Works Health and Sanitation Culture and Recreation Debt service: Principal retirements Interest and fiscal charges Capital outlay Total expenditures $ - 11,565 11,565 5,593,929 - - 10,532,857 - - 2,430,322 - - 1,808,313 - - 3,067,815 - - 23,433,236 6,050,656 6,050,656 144,350 144,350 Excess (deficiency) of revenues over expenditures 2,392,312 OTHER FINANCING SOURCES (USES) Proceeds from sale of long term debt - Transfers in 394,338 Transfers out (1,097,526) Proceeds from sale of Assets 42,250 Total other financing sources (uses) (660,938) Net change in fund balances 1,731,374 Fund balances-beginning 7,449,951 Fund balances-ending $ 9,181,325 See accompanying notes to basic financial statements. (4,228,592) 7,002,157 (1,208,726) 5,793,431 1,564,839 $ 1,564,839 (132,785) 7,782,333 7,782,333 7,649,548 $ 7,649,548 34 Other Governmental Funds $ 1,678,060 1,058,708 30,000 243,919 1,100,747 280,190 146,474 4,538,098 1,254,909 1,330,000 886,080 2,515,658 5,986,647 (1,448,549) 1,802,410 2,827,858 (1,468,147) 3,162,121 1,713,572 11,877,191 $ 13,590,763 • Total Governmental Funds $ 11,787,495 1,805,800 3,166,900 30,000 6,991,926 1,751,555 293,819 531,091 678,205 3,233,453 1,112,687 630,683 183,660 32,197,274 6,848,838 10,532,857 2,430,322 1,808,313 3,067,815 1,330,000 1,030,430 8,566,314 35,614,889 (3,417,614) 16,586,900 3,222,196 (3,774,399) 42,250 16,076,947 12,659,333 19,327,142 $ 31,986,475 35 C~ CJ • CITY OF LA PORTE, TEXAS 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, 2005 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances-total governmental funds: 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 $8,393,314 exceeded depreciation $2,310,704 and losses from the disposition of capital assets in the current period. 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. Governmental funds report bond proceeds as current financial resources. In contrast, the statement of activities treats such issuance of debt as a liability. Govemmental 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 proceeds exceeded repayments. 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 govemmental funds: Accrued interest not reflected in governmental funds Additional compensated absences not reflected in governmental funds 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 the internal service funds is reported with govemmental activities. Change in net assets of governmental activities See accompanying notes to basic financial statements. $ 12,659,333 6,082,610 364,360 (15,093,017) (22,056) (111,452) (456,745) $ 3,423,033 36 • • 37 CITY OF LA PORTE, TEXAS Statement of Net Assets Proprietary Funds September 30, 2005 ASSETS Current assets: Cash and cash equivalents Investments Receivables, net of allowance for uncollectibles Accrued interest receivable Miscellaneous receivables Material and supplies inventories, at cost Restricted cash and cash equivalents for: Customer service deposits Current debt service Investments restricted for: Current debt service Total current assets Noncurrent assets: Capital assets: Land Buildings and improvements Improvements other than buildings Vehicles and equipment Construction in progress Less accumulated depreciation Total noncurrent assets Total assets LIABILITIES Current liabilities: Accounts payable Accrued salaries payable Unearned Revenue Other current liabilities Accrued interest payable Payable from restricted assets: Current portion of revenue bonds Customer deposits Total current liabilities Noncurrent liabilities: Revenue bonds, net of current portion Accrued separation pay Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for debt service Unrestricted (deficit) Total net assets Business-type Activities - Enterarise Funds Other La Porte Area Proprietary Utility Water Authority Funds $ - 3,599,088 636,287 22,284 4,540 $ 456,738 593,220 163,899 7,212 $ 184,499 298,321 ' 2,369 2,020 436,568 270,000 45,861 836,613 - ' 4,968,767 2,057,682 533,070 266,009 373,719 41,891,363 321,595 1,064,336 (25,354,307) 18,562,715 23,531,482 14,725,570 (4,979,020) 9,746,550 11, 804,232 2,084,469 1,115,110 6,577,126 120,133 119,905 (4,591,324) 5,425,419 5,958,489 1,694,468 41,906 1,216 270,000 436,568 2,444,158 375,000 211,874 586,874 3,031,032 17,917,715 2,570,832 11,903 $ 20,500,450 38 77,708 14,146 445,000 536,854 153,210 15,269 34,553 18,888 45,759 267,679 6,055,000 - - 141,695 6,055,000 141,695 6,591,854 409,374 3,246,550 836,613 1,129,215 $ 5,212,378 5,425,419 123,696 $ 5,549,115 • • Totals Governmental Activities - Internal Service Funds $ 641,237 $ 1,967,340 4,490,629 2,533,721 802,555 - 31,516 17,155 - 81,087 4,540 44,531 482,429 - 270,000 - 836,613 - 7,559,519 4,643,834 2,350,478 - 1,488,829 - 63,194,059 - 441,728 10,746,820 1,184,241 - (34,924,651) (6,818,715) 33,734,684 3,928,105 41,294,203 8,571,939 1,925,386 399,327 57,175 15,954 34,553 1,376 18,888 - 15,362 - 715,000 - 482,327 - 3,248,691 416,657 6,430,000 - 353,569 105,932 6,783,569 105,932 10,032,260 522,589 26,589,684 6,558,094 3,407,445 - 1,264,814 1,491,256 $ 31,261,943 $ 8,049,350 39 • CITY OF LA PORTE, TEXAS Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds For The Year Ended September 30, 2005 Business-type Activities - Enter~rise Funds Operating revenues: User fees Operating expenses: Personal services Supplies Other services and charges Miscellaneous Depreciation Total operating expenses Operating income (loss) Other La Porte Area Proprietary Utility Water Authority Funds $ 6,080,845 $ 1,019,730 $ 1,168,127 2,221,734 - 923,042 167,473 173 140,864 2,870,736 965,047 265,922 1,263,735 441,913 281,664 6,523,678 1,407,133 1,611,492 (442,833) (387,403) (443,365) Nonoperating revenues (expenses): Interest income 112,606 40,926 11,640 Interest expense and fiscal charges (57,817) (351,084) - Gain (loss) on sale of equipment (2,820) - (750) Total nonoperating revenue (expenses) 51,969 (310,158) 10,890 Income (loss) before contributions and transfers (390,864) (697,561) (432,475) Capital contributions - 858,162 - Transfers in 1,332,500 - 110,005 Transfers out (1,728,602) (55,602) (39,926) Change in net assets (786,966) 104,999 (362,396) Total net assets-beginning 21,287,416 5,107,379 5,911,511 Total net assets-ending $ 20,500,450 $ 5,212,378 $ 5,549,115 40 Governmental Activities - Internal Totals Service Funds $ 8,268,702 $ 5,410,395 3,144,776 1,455,724 308,510 292,640 4,101,705 4,253,673 1,987,312 944,982 9,542,303 6,947,019 (1,273,601) (1,536,624) 165,172 89,447 (408,901) - (3,570) 56,604 (247,299) 146,051 (1,520,900) (1,390,573) 858,162 - 1,442,505 959,634 (1,824,130) (25,806) (1,044,363) (456,745) 32,306,306 8,506,095 $ 31,261,943 $ 8,049,350 41 • CITY OF LA PORTE, TEXAS Statement of Cash Flows Proprietary Funds For The Year Ended September 30, 2005 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from user fees Cash payments to suppliers Cash payments for personal services Net cash provided by operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds Transfers to other funds Net cash from noncapital financing activies CASH FLOWS FROM CAPITAL AND RELATED FINANCIANG ACTIVITIES Payments received from participants for debt service Payments received from participants for capital recovery Payments for capital acquisitions Proceeds from sale of assets Proceeds from insurance Principal payments on revenue bonds Interest paid on debt Net cash (used) by capital and related financing activies CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments Net Investments (purchased) sold Net cash provided by investing activities Net increase (decrease) in cash and cash equivalents Balances-beginning of the year Balances-end of the year Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense (Increase) decrease in accounts receivable (Increase) decrease in inventories Increase (decrease) in accrued salaries payable Increase (decrease) in accounts payable Increase (decrease) in other current liabilities Increase (decrease) in customer utility deposits Increase (decrease) due to component unit Increase (decrease) in accrued employee separation Total adjustments Net cash provided by operating activities Reconciliation of total cash and cash investments: Current Assets -cash and cash equivalents ResVicted Assets -cash and cash equivalents: Customer Deposits Current Debt Service Total cash and cash equivalents See accompanying notes to basic financial statements. n Business-type Activities - Enterprise Funds Other La Porte Area Proprietary Utility Water Authority Funds $ 6,249,727 $ 1,030,673 $ 1,163,544 (1,637,042) (970,517) (273,609) (2,313,192) - (941,224) 2,299,493 60,156 (51,289) 1,332,500 - 110,005 (1,728,602) (55,602) (39,926) (396,102) (55,602) 70,079 - 771,588 - - 86,574 - (1,526,100) - (88,870) (549,179) (420,000) - (58,982) (351,587) - (2,134,261) 86,575 (88,870) 99,006 36,609 10,574 (815,505) - (128,040) (716,499) 36,609 (117,466) (947,369) 127,738 (187,546) 1,853,936 115,330 417,906 $ 706,567 $ 456,740 $ 230,360 $ (442,833) $ (387,403) $ (443,355) ' 1,263,735 441,913 281,664 139,628 10,942 6,574 (57,061) - (27,859) 1,401,166 (5,296) 132,560 - - (7,950) 29,255 - (2,600) (34,397) - 9,677 2,742,326 447,559 392,066 $ 2,299,493 $ 60,156 $ (51,289) $ - $ 458,738 $ 184,499 436,568 - - 270,000 - 45,861 $ 706,568 $ 456,738 $ 230,360 42 Governmental Internal Totals Service Funds $ 8,443,944 $ 5,410,395 (2,881,168) (4,609,028) (3,254,416) (1,483,812) 2,308,360 (682,445) 1,442,505 9,199 (1,824,130) 924,629 (381,625) 933,828 771,588 - 86,574 - (1,614,970) (472,672) - 128,668 - 10,729 (969,179) - (410,589) - (2,136,556) (333,275) 146,189 79,699 (943,545) (1,235,681) (797,356) (7,155,982) (1,007,177) (1,237,874) 2,187,172 3,205,216 $ 1,393,667 $ 1,967,342 $ (1,273,591) $ (1,538,624) 1,987,312 944,982 157,144 - - (8,915) (84,920) (25,801) 1,528,430 (55,800) (7,950) - 26,655 - (24,720) (2,487) 3,581,951 854,179 $ 2,308,360 $ (682,445) $ 641,237 $ 1,967,340 436,568 - 315,861 - $ 1,393,666 $ 1,967,340 • 43 • 44 CITY OF LA PORTE, TEXAS tes to the Financial Statements - Continu September 30, 2005 ' 1. Summary of significant accounting policies A. General Statement The City of La Porte, Texas (the City), was incorporated on August 10, 1892, and 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 those 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 described below. B. Financial Reoortin4 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 generally accepted accounting principles, 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 afive-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 anine-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 aseven-member board appointed by City Council. The Section 46 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. ' C. Basis of Presentation Government Wide Statements: ' The government-wide financial statements (i.e. the statement of net assets and the statement activities) report information on all of the nonfiduciary activities of the City, including the component units. The effect of interfund activity has been removed from these statements. Governmental activities, which are normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely significantly on fees and charges for support. ' 45 CITY OF LA PORTE, TEXAS otes to the Financial Statements - Continu September 30, 2005 1. Summary of significant accounting policies -Continued The statement of activities demonstrates the degree to which the direct expenses of a given program or function is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific program or function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given program or function and 2) operating or capital grants and contributions that are restricted to meeting the operational or capital requirements of a particular program or function. Taxes and other items not properly included among program revenues are reported instead as general revenues. The accounts of the City are organized on the basis of funds each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based on the purposes for which they are to be spent and the means by which spending activities are controlled. Individual funds and account groups summarized in the accompanying financial statements are classified below. Fund Financial Statements: The City segregates transactions related to certain functions or activities in separate funds in order to aid financial management and to demonstrate legal compliance. Separate statements are presented for governmental and proprietary activities. Major individual govemmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Governmental funds are those through which most governmental functions typically are financed. The measurement focus of governmental funds is on the sources, uses and balance of current financial resources. The City has presented the following major govemmental funds: (a) General Fund - is the main operating fund of the City. This fund is used to account for all financial resources not accounted for in other funds. All general tax revenues and other receipts that are not restricted by law or contractual agreement to some other fund are accounted for in this fund. General operating expenditures, fixed charges and capital improvement costs that are not paid through other funds are paid from the General Fund. (b) 2005 General Obligations Bond Fund - is used to account for funds received from bond proceeds for capital projects. (c) 2004 Certificates of Obligation Bond Fund- is used to account for funds received from bond proceeds for capital projects. 46 CITY OF LA PORTE, TEXAS tes to the Financial Statements - Continu September 30, 2005 1. Summary of significant accounting policies -Continued Proprietary Funds are accounted for using the economic resources measurement focus and the accrual basis of accounting. The accounting objectives are determinations of net income, financial position and cash flow. All assets and liabilities are included on the Statement of Net Assets. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. Operating expenses for the proprietary funds include the cost of personal and contractual services, supplies and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. The City reports the following major proprietary funds: (a) Utility Fund - is used to account for the provision of water and sewer services to the residents of the City. All activities necessary to provide such services are accounted for in this fund, including, 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. (b) La Porte Area Water Authority Fund - is used to account for revenues and expenses related to obtaining raw surface water and converting it to potable water to be sold to La Porte and neighboring cities. Additionally, the City 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. D. Measurement Focus and Basis of Accountin4 Measurement focus refers to what is being measured; basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurement made, regardless of the measurement focus applied. The government-wide financial statements and fund financial statements for proprietary funds are reported using the economic resources measurement focus and the accrual basis of accounting. The economic resources measurement focus means all assets and liabilities (whether can-ent or non-current) are included on the statement of net assets. The operating statements present increases (revenues) and decreases (expenses) in net total assets. Under the accrual basis of accounting, revenues are recognized when they are earned. Expenses are recognized at the time the liability is incurred. Unbilled water and wastewater utility service receivables are accrued as revenues and reflected in the financial statements. 47 CITY OF LA PORTE, TEXAS otes to the Financial Statements - Contin September 30, 2005 1. Summary of significant accounting policies -Continued Governmental fund financial statements are reported using the current financial resources measurement focus and are accounted for using the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual; i.e., when they become both measurable and available. "Measurable" means the amount of the transaction can be determined and "available° means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the current fiscal period. Most revenue sources are recorded as revenues when received in cash because they are generally not measurable until actually received. The revenues susceptible to accrual are property and sales taxes, franchise fees, interest income and intergovernmental revenues. A one-year availability period is used for recognition of all other Governmental Fund revenues. Expenditures are recorded when the related fund liability is incurred. However, debt service expenditures, as well as expenditures related to compensated absences are recorded only when payment is due. E. BudQetarv Information Annual budgets are adopted on a basis consistent with generally accepted accounting principles. 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. The City uses the following procedures in establishing the budgets reflected in the financial statements: 1. Prior to August, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing on the following October 1. The operating budget includes proposed expenditures and the means of financing them. 2. A public hearing is conducted to obtain taxpayer comments. 3. Prior to September 30, the budget is legally enacted through passage of an ordinance. 4. The City Manager must approve changes within a department, which is the legal level of control. City Council approves changes between departments as well as amendments to the budget during the year as may be required. 5. Formal budgetary integration is employed as a management control device during the year for the General Fund and Proprietary Funds. Formal budgetary integration is not employed for the Debt Service Fund and Capital Projects Funds because effective budgetary control is alternatively achieved through bond indenture provisions and legally binding construction contracts, respectively. 6. The budget for the General Fund and Special Revenue Funds are adopted on a basis consistent with GAAP. Budgets for the Proprietary Funds are utilized for planning, control and evaluation purposes. They are adopted on a basis consistent with GAAP except that bond principal payments and fixed asset acquisitions are treated as expenditures. 7. Budgeted amounts are amended by the City Council during the year. Individual amendments were not material in relation to the original appropriations, which were amended. Encumbrances represent commitments related to unperformed contracts for goods or services. Encumbrance accounting -under which purchase orders, contracts and other commitments for the expenditure of resources are recorded to reserve that portion of the applicable appropriation - is utilized in the governmental funds throughout the year. Encumbered amounts lapse at year-end. However, encumbrances generally are reappropriated as part of the following year's budget. 48 CITY OF LA PORTE, TEXAS otes to the Financial Statements - Continu September 30, 2005 1. Summary of significant accounting policies -Continued F. Cash and Investments 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 Investment Pool (TexPool) and the Local Government Investment Cooperative (LOGIC), both of which have the general characteristics of a demand deposit account. For 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. Investment 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 and LOGIC, are reported using the pools' share price. G. Prepaid Items Prepaid balances are for payments made by the City in the current year to provide services occurring in the subsequent fiscal year, and the reserve for prepaid items has been recognized to signify that a portion of fund balance is not available for other subsequent expenditures. H. Receivables Receivables as of year-end of the government's individual major and non-major funds, and internal service funds, including the applicable allowances for uncollectible accounts, are as follows: Fund General Section 4b Sales Tax Debt Service Grant Community Investment HoteUMotel Tax T.I.R.Z. One Capital Improvements Transportation 1998 G.O. Bonds 2000 G.O. Bonds 2002 G.O. Bonds 2004 C.O.Bonds 2005 G.O. Bonds Utility Water Authority Airport Sylvan Beach Golf Course Motorpool Technology Insurance Gross Receivables Less: allowance for uncollectibles Net total receivables Taxes Grant Interest Other Accounts Total $ 1,192,508 $ - $ 40,550 $ - $ 5,247,110 $ 6,480,168 - - 11,567 186,540 - 198,107 323,088 - 6,557 - - 329,645 - - 65 354,590 - 354,655 - - 311 - - 311 - - 2,974 - - 2,974 - - 576 - - 576 - 4,716 3,590 - - 8,306 - - 4,077 - - 4,077 - - 4,514 - - 4,514 - - 4,407 - - 4,407 - - 3,406 - - 3,406 - - 370 - - 370 - - 4,699 2,157 - 6,856 - - 22,284 - 670,919 693,203 - - 7,213 - 163,899 171,112 - - 1,162 - 1,091 2,253 - - 858 - 805 1,663 - - - - 473 473 - - 9,537 - 79,711 89,248 - - 3,349 - - 3,349 - - 1,376 - - 1,376 1,515,596 4,716 133,442 543,287 6,164,008 8,361,049 (788,481) - - - (1,620,031) (2,408,512) $ 727,115 $ 4,716 $133,442 $ 543,287 $ 4,543,977 $ 5,952,537 49 CITY OF LA PORTE, TEXAS ' 1Qotes to the Financial Statements - Contin~ September 30, 2005 1. Summary of significant accounting policies -Continued 1 Governmental funds reported deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Revenue recognition is also deferred ' in connection with resources that have been received, but not yet earned in the proprietary funds. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental and proprietary funds were as follows: Unavailable Unearned Grant General Debt Service Proprietary Revenue Total Delinquent propeRy taxes receivable $ 612,370 $ 114,746 $ - $ - $ 727,116 ' Charges for services and customer deposits 2,685,035 - 34,553 - 2,719,588 Grant Revenues - - - 2,642 2,642 Total deferred / unearned revenue $ 3,297,405 $ 114,746 $ 34,553 $ 2,642 $ 3,449,346 Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires ^ management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenditures, and expenses during the reporting period. Actual results may differ ' from those estimates. J. Indirect Exoense Allocations It is the policy of the City not to allocate indirect expenses to various functions in the Government-wide Statement of Activities. K. Restricted Assets The City applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available. L. Inventories Inventories consist of material and supplies and are valued at cost (first-in, first-out). Inventories for all funds consist of expendable supplies held for consumption and the cost thereof is recorded as an expenditure at the time individual inventory items are issued. Reported inventories in the Governmental Funds are offset by a fund balance reserve, which indicates they are unavailable for appropriation even though they are a component of net current assets. M. Interfund Transactions Transactions Between Funds Transactions between funds that would be treated as revenues, expenditures or expenses if they involved organizations external to the governmental unit are accounted for as revenues, expenditures or expenses in the funds involved. Transactions, which constitute reimbursement to a fund for expenditures or expenses initially made from that fund, which are properly attributable to another fund, are recorded as expenditures or expenses in the reimbursing fund and as reductions of the expenditure or expense in the fund that is reimbursed. Nonrecurring or nonroutine transfers of equity between funds are reported as additions to, or reductions of, the fund balance of Governmental Funds. All other legally authorized transfers are treated as transfers and are included in the results of operations of both Governmental and Proprietary Funds. 50 CITY OF LA PORTE, TEXAS otes to the Financial Statements -Continue September 30, 2005 1. Summary of significant accounting policies -Continued N. Caoital Assets Capital assets, which include property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the govemment-wide financial statements and in the fund financial statements for proprietary funds. Capital assets are defined by the government as assets with an initial unit cost of $5,000 or more and an estimated useful life exceeding two years. Such assets are recorded at historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets are recorded at their fair market value on the date donated. Repairs and maintenance that do not add to the value of the asset or extend assets lives are recorded as expenses. Interest cost during construction is capitalized when the effect of capitalization materially impact the financial statements. During the year ended September 30, 2005, no interest costs were capitalized. Property, plant, and equipment of the primary govemment, as well as the component units, are depreciated using the straight line method over the following estimated useful lives: Buildings 20 years . Water and Sewer System 20 - 40 years Infrastructure 20 - 30 years Machinery and Equipment 4 -10 years Improvements 20 years O. Comaensated Absences The City's employees earn vacation and sick leave, which may either be taken or accumulated, up to certain amounts, 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 portions 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 of this liability will be made from 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 to 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 -Employees earn an average of 10 sick hours per month of service. Non-civil service employees hired after November 19, 1991, and who have completed 10 consecutive years of service with the City, are paid for accumulated sick leave, subject to a limit of 480 hours. Civil service employees are subject to a limit of 720 hours. The liability for compensated absences at September 30, 2005 is comprised of the following: Governmental Business Type Total Vacation $ 689,871 $ 108,781 $ 798,652 Sick Leave 1,619,501 184,686 1,804,187 Total All Funds $ 2,309,372 $ 293,467 $ 2,602,839 51 CITY OF LA PORTE, TEXAS otes to the Financial Statements - Continu September 30, 2005 1. Summary of significant accounting policies -Continued P. Lono-term Oblictations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable govemmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Q. Reservations of Fund Balances The fund balance reserves for revenue bond retirement and construction, prepaid items, inventory, and debt service are discussed in notes 5, 1(G), 1(L), and 1(C) respectively. R. Net Assets Net assets represent the difference befinreen assets and liabilities. Net assets invested in capital assets, net of related debt consists of capital assets, net of accumulated depreciations, reduced by the outstanding balances of any borrowing used for the acquisition, construction or improvements of those assets, and adding back unspent proceeds. Net assets are reported as restricted when there are limitations imposed on their use either through the enabling legislations adopted by the city or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. 2. Cash, Cash Equivalents and Investments Cash and Cash Eouivalents The City reports cash and cash equivalents in the City's statement of cash flows for Proprietary Fund Types and in all other financial statements of financial position. The City considers cash and cash equivalents to be cash on hand, demand deposits, certificates of deposit, balances in privately managed public funds investment pools and money market mutual funds. Investments Investments consist of balances in privately managed public funds investment pools, money market mutual funds, and investments~in United Sates (US) Agency securities. The City reports all investments at fair value based on quoted market prices at year-end date. 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. Statutes and the depository contract require full security for all funds in the depository institution through federal depository insurance or a combination of federal depository insurance and acceptable collateral securities and/or an acceptable surety bond. The City requires the depository to place the collateral securities with an independent trustee institution. The depository is required to deliver the safekeeping receipts to the City. In accordance with Texas statutes, the safekeeping receipts are in the name of the depository with proper indication of pledge of the collateral securities by the 52 CITY OF LA PORTE, TEXAS otes to the Financial Statements -Continue September 30, 2005 depository to secure funds of the City. The City must approve all collateral securities pledged and also must approve in writing any changes to the pledged collateral securities. The City has adopted a written investment policy regarding the investment of its funds as defined by the PFIA. The PFIA also requires the City to have independent auditors perform test procedures related to investment practices as provided by the Act. The City complies with the requirements of the Act and with local policies. The City's investment policy permits investment of City funds in only the following investment types, consistent with the strategies and maturities defined in the policy: 1. Obligations of the U.S., its agencies, and instrumentalities. 2. Direct obligations of the State of Texas or its agencies. 3. Collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality of the United States. 4. Other obligations, the principal and interest on which are unconditionally guaranteed or insured by, or backed by full faith and credit of the State of Texas or the United States or their agencies and instrumentalities. 5. Obligations of states, agencies, counties, cities and other political subdivisions of any state having been rated as to the investment quality by a nationally recognized investment firm and having received a rating of not less than A or its equivalent. 6. Certificates of Deposit issued by state and national banks or savings and on associations domiciled in this state that are: a. guaranteed or insured by the Federal Deposit Insurance Corporation; or b. secured by obligations that are described in 1-5 above, which are intended to include all direct federal agency or instrumentality issued mortgage backed securities that have a market value of not less than the principal amount of the certificates or in any other manner and amount provided by law for deposit of the investing entities. 7. Certificates of Deposit and share certificates issued by a state or federal credit union domiciled in the State of Texas that are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or are secured as to principal by obligations described in 1 through 5 above in any other manner and amount provided by law for the City deposits. 8. Fully collateralized repurchase agreements having a defined termination date, secured by obligations of the United States, its agencies or instrumentalities, pledged with a third party selected or approved by the political entity, and placed through a primary government securities dealer, as by the Federal Reserve, or through a financial institution domiciled in the State of Texas. 9. Prime domestic banker's acceptances, defined as a banker's acceptance with a remaining term of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated at least A-1 or P-1 or equivalent by at least one nationally recognized credit rating agency. 10. Commercial paper that is rated at least A-1 or P-1 or the equivalent by either (a) iwo nationally recognized credit agencies or (b) one nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S. or State bank. 11. SEC-registered no-load money market mutual fund (MMMF), with a dollar weighted average portfolio maturity of 90 days or less, includes in their investment objectives the maintenance of a stable net asset value of $1 for each share. 12. SEC-registered, no-load money market mutual funds (MMMF) that have an average weighted maturity of less than two years, invests exclusively in obligations described above and are continuously rated as to investment quality by at least one nationally recognized investment rating firm of no less than AAA or its equivalent. 13. Authorized govemment investment pools that invest solely in obligations of any of the above investments provided that the pools are rated no lower than Aaa or AAA or an equivalent by at least one nationally recognized rating service. 53 CITY OF LA PORTE, TEXAS otes to the Financial Statements - Continu September 30, 2005 Deposit and Investment Amounts At year-end, the City recorded cash on hand, demand deposits, certificates of deposit, balances in privately managed public funds investment pools, money market mutual funds, and investments stated at fair value of $44,855,950. The following schedule shows the City's recorded cash and investments at year-end: General Debt Service Capital Projects Special Revenue Funds Total Governmental Funds Internal Service Fund Total Governmental Activities Enterprise Total Cash Bank Deposits Pooled Funds Investments Total $ 1,174,431 $ 3,478,528 $ 5,988,867 $ 10,641,826 182,515 579,711 953,803 1,716,029 591,305 12,441,837 3,114,160 16,147,302 444,323 1,329,107 2,288,190 4,061,620 2,392,574 17,829,183 12,345,020 32,566,777 610,897 1,821,451 3,135,916 5,568,264 3 003,471 19,650,634 15,480,936 38,135,041 (804.204) 2,197,871 5,327,241 6,720,908 $ 2,199,268 $ 21,848,505 $ 20,808,177 $ 44,855,950 Quoted market prices are the basis of the fair value for US Agency securities and commercial paper. The amount of increase or decrease in the fair value of investments during the current year is included in the City's investment income as follows: Interest Income $ 885,301 Net Increase (Decrease) In Fair Value of Investments (179.838) Total Investment Income ~ 705.463 Investment Risks At year-end, the City had the following investments, shown below for all funds by investment type: Investment Type Public funds investment pools US Agency securities Total Fair Value $21,848,505 20,808,177 $31,997,834 54 ' ~ CITY OF LA PORTE, TEXAS otes to the Financial Statements -Continue September 30, 2005 ' Interest Rate Risk At year-end, the City had the following investments subject to interest rate risk disclosure, under U.S. ' generally accepted accounting principles, by fund: Weighted Average Maturities Investment Type/Fund Fair Value (Months) US Agency securities/General $5,988,867 12 US Agency securities/Debt Service 953,803 12 US Agency securities/Capital Projects 3,114,160 12 US Agency securities/Special Revenue 2,288,190 12 US Agency securities/Internal Service 3,135,916 12 US Agency securities/Enterprise 5,327,241 12 Total $20,808,177 ' The City's investment policy specifies the maximum stated maturity, from the date of purchase; for any individual investment 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 total portfolio that may be invested in securities other repurchase agreements, Treasury bills and notes, or insured and collateralized Certificates of Deposits. ' Percentage Of Total Investment Type Fair Value Portfolio Agency Notes $20,808,177 49% Investment Pools 21,848,505 51% Total $42,656,682 100% Credit Risk At year-end balances in Texpool, a privately managed public funds investment pool was rated AAAm by Standard 8~ Poor's, balances in Texstar, a privately managed public funds investment pool was rated AAAm by Standard 8~ Poor's and balances in Logic, a privately managed public funds investment pool was rated Aaa/MR1+ by Standard and Poor's. Federal Home Loan Bank (FHLB) agency notes, and Federal National Mortgage Association (FNMA) ' agency notes were rated AAA by Standard & Poor's, AAA by Fitch Ratings, and Aaa by Moody's Investors Service. All credit ratings met acceptable levels required by legal guidelines prescribed in both the PFIA and the City's investment policy. Legal guidelines require an Al rating by Standard 8 Poor's and a P-1 rating by Moody's Investors Service for investments in commercial paper. 55 CITY OF LA PORTE, TEXAS otes to the Financial Statements - Continu September 30, 2005 3. Property tax The appraisal of property within the City is the responsibility of the Hams 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 rate for the previous year by more than 8%, qualified voters of the City may petition for an election to determine whether to limit the tax rate to no more than 8% above the effective 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 January 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 2004-05 tax year were $0.61 and $0.10 respectively, per $100 of assessed valuation. The 2006 assessed value and total tax levy as adjusted through September 30, 2005 were $1,634,888,940 and $11,607,713 respectively. The City has enacted an ordinance providing for the exemption of twenty percent (20%) of the assessed value of residential homesteads plus and 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. 56 CITY OF LA PORTE, TEXAS otes to the Financial Statements -Continue September 30, 2005 4. Capital Assets Capital asset activity for the year ended September 30, 2004 was as follows: Beginning Balance 10/01/04 Additions Ending Retirements & Balance Adjustments 09/30/05 Governmental activities: Capital assets, not being depreciated: Land $ 7,681,339 $ 1,246 $ - $ 7,682,585 Construction in progress 4,832,424 7,768,893 (3,169,890) 9,431,427 Total capital assets, not being depreciated 12,513,763 7,770,139 (3,169,890) 17,114,012 Capital assets, being depreciated: Buildings and improvements 17,844,812 68,334 12,078 17,925,224 Improvements other than buildings 7,191,272 169,858 3,114,920 10,476,050 Infrastructure 23,390,330 91,776 - 23,482,106 Machinery and equipment 11,951,990 765,880 (481,364) 12,236,506 Total capital assets being depreciated 60,378,404 1,095,848 2,645,634 64,119,886 Less accumulated depreciation for: Buildings 8,406,539 821,253 - 9,227,792 Improvements other than buildings 4,138,171 373,849 - 4,512,020 Machinery and equipment 6,957,591 1,061,244 (446,676) 7,572,159 Infrastructure 12,502,855 1,002,552 - 13,505,407 Total accumulated depreciation 32,005,156 3,258,898 (446,676) 34,817,378 Total capital assets, being depreciated, net 28,373,248 (2,163,050) 3,092,310 29,302,508 Govemmental activities capital assets, net $ 40,887,011 $ 5,607,089 $ (77,580) $ 46,416,520 57 CITY OF LA PORTS, TEXAS otes to the Financial Statements - Continu September 30, 2005 4. Capital Assets -Continued Beginning Ending Balance Retirements 8 ' Balance 10/01/04 Additions Adjustments 09/30/05 Business-type activities: Capital assets, not being depreciated: ' Land $ 2,350,478 $ - $ - $ 2,350,478 Construction in progress 629,418 969,203 (414,379) 1,184,242 Total capital assets, not being depreciated 2,979,896 969,203 (414,379) 3,534,720 ' Capital assets, being depreciated Buildings and improvements 1,157,184 9,656 - 1,166,840 ' Improvements other than buildings 62,474,911 636,112 400,080 63,511,103 Machinery and equipment 468,006 - (21,332) 446,674 Total capital assets, being depreciated 64,100,101 645,768 378,748 65,124,617 ' Less accumulated depreciation for: Buildings and improvements 657,731 49,149 - 706,880 Improvements other than buildings 31,971,975 1,911,447 (11,730) ' 33,871,692 Machinery and equipment 339,546 26,715 (20,332) 345,929 Total accumulated depreciation 32,969,252 1,987,312 (32,062) 34,924,501 Total capital assets, being depreciated net 31,130,849 (1,341,544) 410,810 ' 30,200,115 Business-type activities capital assets, net $34,110,745 $ (372,341) $ (3,569) $ 33,734,835 58 t CITY OF LA PORTE, TEXAS Notes to the Financial Statements -Continue ' September 30, 2005 4. Capital Assets -Continued Depreciation expense was charged to functions/programs of the primary govemment as follows: Governmental activities: General government $ 355,756 ' Public safety 285,611 Public works 1,142,095 Culture and Recreation 530,454 Capital assets held by the government's internal service funds are ' charged to the various functions based on their usage of the assets 944,982 Total depreciation expense -governmental activities $ 3,258,898 ' Business-type activities: Water 8 Sewer Services $1,705,648 Airport 118,658 ' Golf Course 148,135 Sylvan Beach Pavillion 14,871 Total depreciation expense -business-type activities $1,987,312 The City has active construction projects as of September 30, 2005. Total accumulated commitments for ongoing capital projects are composed of the following: Utility Capital Projects Fund Sylvan Beach Fund Airport Fund Hotel/Motel Occupancy Tax Fund Section 4B Sales Tax TIRZ Fund General CIP S1998 General Obligation Bonds S2000 General Obligation Bonds S2002 General Obligation Bonds S2004 Cert. of Obligation Bonds Total Remaining Construction Contract In Progress Balance $ 1,066,337 $ - 34,905 - 85,000 - 35,205 - 1,144,427 - 20,591 - 722,919 - 455,757 - 236,598 970,809 933,516 1,143,182 5,880,414 $ 10,615,669 $ 2,113,991 59 CITY OF LA PORTE, TEXAS otes to the Financial Statements - Continu September 30, 2005 5. Long Term Liabilities At September 30, 2005 bonds payable consisted of the following individual issues: Governmental Business-type 1994 Waterworks and Sewer System Refunding Revenue Bonds, due in annual installments of $95,000 to $455,000 through March 16, 2006; interest at 4.4% to 5.25% $ 145,000 1998 General Obligation Serial Bonds; due in annual installments of $125,000 through March 15, 2019; interest at 4.25% to 6.25% $ 1,750,000 1998 Waterworks and Sewer System Revenue Bonds due in annual installments of $125,000 through March 15, 2009; interest at 4.35% to 6.2% 500,000 1999 La Porte Area Water Authority Contract Revenue Refunding Bonds due in annual payments through March 15, 2017; interest at 7% to 7.5% 6,500,000 2000 General Obligation Serial Bonds due in annual installments of $150,000 through March 15, 2010, changing to $175,000 through March 15, 2020; interest at 5% to 7% 2,500,000 2000 Certificates of Obligation due in annual installments of $150,000 through March 15, 2020; interest at 5% to 7% 2,250,000 2002 Limited Tax Bonds due in annual installments of $270,000 through March 15, 2025; interest at 4.25% to 5% 5,400,000 2004 Certificates of Obligation 7,000,000 due in annual payments through March 15, 2025; interest at 3.6% to 4.45% 2005 General Obligation Serial Bonds 7,675,000 due in annual payments through March 15, 2025; interest at 3.75% to 4.25% 2005 Certificates of Obligation due in annual payments through March 15, 2015; interest at 2.8% to 3.8% Total Bonds Payable 1,800,000 $ 28,375,000 $ 7,145,000 60 CITY OF LA PORTE, TEXAS otes to the Financial Statements -Continue September 30, 2005 5. Long Term Liabilities -Continued Changes in Outstanding Debt - Transactions for the year ended September 30, 2005 are summarized as follows: Governmental Type Activities General Obligation Bonds Certificates of Obligation Compensated Absences Total governmental fund types Business Type Activities Revenue Bonds Payable Less: Unamortized Refunding Loss Compensated absences Total business fund types Total of all fund types Balance Issues October 1, or Payments or 2004 Additions Expenditures Balance September 30, Due within 2005 one year $ 10,830,000 $ 7,675,000 $ 1,180,000 $ 17,325,000 $ 785,000 2,400,000 8,800,000 150,000 11,050,000 410,000 2,673,457 - 364,085 2,309,372 149,000 15,903,457 16,475,000 1,694,085 30,684,372 1,344,000 8,130,000 - 985,000 7,145,000 715,000 (15,821) - (15,821) - - 378,289 - 84,822 293,467 30,000 8,492,468 - 1,054,001 7,438,467_ 745,000 $ 24,395,925 $ 16,475,000 $ 2,748,086 $ 38,122,839 $ 2,089,000 General Obligation Bonds~and Certificates of Obligation - 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. Arbitrage provisions of the Internal Revenue Tax Act of 1986 require the City to rebate excess arbitrage earnings from bond proceeds to the federal government. As provided for by the bond indentures, this amount has been recorded as a liability in the General Fund for the benefit of the federal government and will be paid as required by applicable regulations. Certain General Obligation Bonds and Certificate of Obligations Bonds are to be repaid by revenues of the proprietary funds. Also, for the governmental activities, compensated absences are generally liquidated by the general fund and for business type, compensated absences are paid from the utility fund. 61 CITY OF LA PORTE, TEXAS otes to the Financial Statements - Continu September 30, 2005 5. Long Term Liabilities -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, 2005. Below is a reconciliation of the various restricted cash and cash investments: Current Maturities of Revenue Bonds Reserve for Revenue Bond Retirement Total Reserve for Revenue Bond Retirement Customer Deposits Payable Total Restricted Cash and Cash Investments as of September 30, 2005 $ 1,064,431 42,182 1,106,613 482,429 $ 1,589,042 62 CITY OF LA PORTE, TEXAS otes to the Financial Statements -Continue September 30, 2005 5. Long Term Liabilities -Continued Annual Requirements to Retire Debt Obligations - The annual aggregate maturities for each bond type for the years subsequent to September 30, 2005, are as follows: General Obligation Bonds Governmental Activities Business-type Activities Year Ending September 30 Principal Interest Principal Interest Total 2006 $ 785,000 $ 765,737 $ - $ - $ 1,550,737 2007 810,000 713,952 - - 1,523,952 2008 820,000 674,146 - - 1,494,146 2009-2013 4,355,000 2,795,950 - - 7,150,950 2014-2018 4,760,000 1,802,691 - - 6,562,691 2019-2023 4,175,000 790,625 - - 4,965,625 2024-2025 1,620,000 72,647 - - 1,692,647 Total $17,325,000 $ 7,615,748 $ - $ - $ 24,940,748 Certificate of Ob ligations Governmental Activities Business-type Activities Year Ending September 30 Principal Interest Principal Interest Total 2006 $ 410,000 $ 461,015 $ - $ - $ 871,015 2007 425,000 438,632 - - 863,632 2008 435,000 418,410 - - 853,410 2009-2013 2,420,000 1,791,055 - - 4,211,055 2014-2018 2,905,000 1,255,247 - - 4,160,247 2019-2023 3,110,000 613,859 3,723,859 2024-2025 1,345,000 59,723 - - 1,404,723 Total $11,050,000 $ 5,037,941 $ - $ - $16,087,941 Revenue Bonds Governmental Activities Business-ty pe Activities Year Ending September 30 Principal Interest Principal Interest Total 2006 $ - $ - $ 715,000 $ 349,431 $ 1,064,431 2007 - - 585,000 314,263 899,263 2008 - - 610,000 281,687 891,687 2009-2013 - - 2,900,000 931,206 3,831,206 2014-2017 - - 2,335,000 199,856 2,534,856 Total $ - $ - $ 7,145,000 $ 2,076,443 $ 9,221,443 63 CITY OF LA PORTE, TEXAS otes to the Financial Statements - Continu September 30, 2005 5. Long Team Liabilities -Continued Bonds Authorized and Unissued - At September 30, 2005, the City had $4,100,000 in Certificate of Obligations Bonds which were authorized and unissued. Defeased Bonds Outstanding - In 1994, the City defeased certain general obligation and revenue bonds by placing the proceeds of the new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. As of September 30, 2005, $2.45 million of general obligation bonds and $900 thousand of revenue bonds outstanding are considered defeased.On October 6, 1999, the La Porte Area Water Authority issued $8.08 million in Contract Revenue Refunding Bonds, Series 1999, with an average interest rate of 5.159 percent to refund $8.08 million in outstanding Water Supply Contract Revenue Bonds, Series I and II, 1998 with an average interest rate of 6.94 percent. The Authority completed the current refunding to reduce its total debt service payments over the next 18 years by $1.476 million and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $1.048 million. The bonds are payable from the net revenues of the Authority. The bonds are in $5,000 denominations. The Authority is in compliance with all significant requirements and restrictions contained in the bond resolution. 6. Pension Benefits Plan Descriptions The City provides pension benefits for all of its full-time employees through anon-traditional, joint contributory, hybrid defined benefit plan (the Plan) in the statewide Texas Municipal Retirement System (TMRS), one of 794 administered by TMRS, an agent multiple-employer public employee retirement system. A copy of the 2004 TMRS Comprehensive Annual Financial Report may be obtained by writing to P.O. Box 149153, Austin, Texas 78714. In addition, 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 Firefighters Pension Commission, P.O. Box 12577, Austin, Texas 78711. Both Plans are more fully described below. Texas Municipal Retirement System Benefits depend upon the sum of the employee's contributions to the Plan, with interest, and the City financed monetary credits, with interest. At the date the Plan began, the city granted monetary credits for service rendered before the Plan began of a theoretical amount equal to two times what would have been contributed by the employee, with interest, prior to the establishment of the Plan. Monetary credits for service since the Plan began are a percentage (100%, 150%, or 200%) of the employee's accumulated contributions. In addition, the City can grant annually another type of monetary credit referred to as an updated service credit which is a theoretical amount which, when added to the employee's accumulated contributions and the monetary credits for service since the Plan began, would be the.total monetary credits and employee's contributions accumulated with interest if the employee's contribution rate and City's matching percentage had always been in existence and if the employee's salary had always been the average of his salary in the last three years and that are one year before the effective date. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the employer-finance monetary credits with interest were used to purchase an annuity. 64 CITY OF LA PORTE, TEXAS otes to the Financial Statements -Continue September 30, 2005 ' 6. Pension Benefits -Continued Members can retire at ages 60 and above with 10 or more years of service or with 20 years of service ' regardless of age. The Plan also provides death and disability benefits. A member is vested after 10 years. The Plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing the TMRS and within the actuarial constraints also in the statutes. ' Contributions The contribution rate for employees is 7 percent and the City's matching ratio is currently 2 to 1, both as adopted by the governing body of the City. Under the state law governing TMRS, the actuary annually determines the City's contribution rate. This rate consists of the normal cost contribution rate and the prior service contribution rate, both of which are calculated to be a level percentage of payroll from year to year. The normal cost contribution rate financing the currently accruing monetary credits is due to the City's ' matching percentage, which is the obligation of the City as of an employee's retirement date, not at the time the employee's contributions are made. The normal cost contribution rate is the actuarially determined percentage of payroll necessary to satisfy the obligation of the City to each employee at the time his ' retirement becomes effective. The prior service contribution rate amortizes the unfounded (over funded) actuarial liability (asset) over the Plan's 25-year amortization period. When the City periodically adopts updated service credits and increases in annuities, in effect, the increased unfounded actuarial liability is to be amortized over a new 25-year period. Currently, the unfounded actuarial liability is being amortized over ' the 25-year period, which began January 1998. The unit credit actuarial cost method is used for determining the City's contribution rate. Both the employees and the City make contributions monthly. Since the City needs to know its contribution rate in advance for budgetary purposes, there is a one-year ' delay between the actuarial valuation that is the basis for the rate and the calendar year when the rate goes into effect. A summary of actuarial assumptions is presented below: Actuarial Valuation Date Actuarial Cost Method Amortization Method Remaining Amortization Period Asset Valuation Method Investment Rate of Return Projected Salary Increases Inflation Rate Cost of Living Adjustment Fiscal Year 2002 2003 2004 Annual Pension Cost (APC) $ 1,665,210 1,802,728 2,037,111 December 30, 2004 Unit Credit Level Percent of Payroll 25 Years -Open Period Amortized Cost 7% None 3.5% None Percentage of APC Net Pension Contribution Obligation 100% - 100% - 100% - Additional supplementary three-year trend information may be found on page 71. 65 CITY OF LA PORTE, TEXAS otes to the Financial Statements - Contin September 30, 2005 6. Pension Benefits -Continued Texas Statewide Emergency Services Personnel Retirement l=und 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. Plan Description 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, 2004 there were 177 member departments participating in the pension system. The following table summarizes the pension system membership as of August 31, 2004: Retirees and beneficiaries currently receiving benefits 1,577 Terminated members entitled to benefits but not yet receiving those 1,827 Current active members (vested and non-vested) 4,610 The pension system was created by Senate Bill 411, 65"' Legislature, Regular Session (1977). Benefit provisions include retirements benefits as well and death and disability benefits. Members are vested at the beginning of the fifth year of service, at 5% per year of service for the first ten years and 10% for each of the next five years of service. . Upon reaching age 55, a vested member may retire and receive a monthly pension equal to his vested percentage multiplied by six times the goveming 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 7% compounded annually. Death and 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 alump-sum amount and continuing monthly payments to a member's surviving spouse and/or dependents. Contribution requirements were established by S.B. 411, 65"' Legislative, Regular Session (1977) and no contributions are required by members. The goveming bodies of participating department members are required to contribute at least $12 per month for each member. Additional contributions may be necessary to pay for unfunded prior service costs and "buybacks" of vested benefits. The State may also be required to make a limited amount of annual contributions to make the fund actuarially sound. Contributions Reouired and Contributions Made As previously stated the required contribution of at least $12 per member per month is not actuarially determined. The minimum contribution amount was established by S.B. 411, 65"' Legislature, Regular Session (1977). For the fiscal year ending August 31, 2004, contributions totaling $1,891,243 for dues and prior service were paid into the fund by the governing bodies sponsoring the member participating departments. The contributions made were equal to the contributions required. 66 ' ~ CITY OF LA PORTE, TEXAS otes to the Financial Statements -Continue September 30, 2005 ' 6. Pension Benefits -Continued City Percentage of ' Fiscal Annual Required Year Contributions Contributions 2003 12,816 100% 2004 13,392 100% 2005 13,104 100% t The purpose for the biennial actuarial valuations is to test the adequacy of the monthly contributions and determine if they are adequate to fund the benefits that are promised. The total contributions expected from the governing bodies sponsoring the members for the fiscal year ending August 31, 2004 are $1,163,758 ' less than the minimum required contributions for that fiscal year, based on amortizing the unfunded actuarial accrued liability over 30 years. ' 7. Intertund Transfers InterFund transfers dunng the year ended September 30, 2005 were as follows: To From Amourrt Explanation General Fund Utility Fund $ 323,577 General & Adminsitrative Transfer General Fund La Porte Area Water Authority 53,137 Operator's Agreement Utility Fund General Fund 32,500 Transfer for Employee Incentive Program ' Utility CIP Fund Utility Fund 400,000 Annual Transfer to fund Capital Projects Debt Service Fund La Porte Development 280,050 Annual Transfer for Debt Service - 2000 GO Bonds Corporation (4B) Debt Service Fund 2000 GO Bond Fund 316,436 Transfer to close out portion of 2000 GO Bonds ' fund balance into Debt Service Transportation Fund General CIP Fund 300,000 Reimbursement of funds for capital project Utility Debt Service Fund Utility Fund 600,000 Transfer for Debt Service Sylvan Beach Pavilion Fund General Fund 3,700 Transfer for Employee Incentive Program Sylvan Beach Pavilion Fund HotellMotel Fund 60,750 Transfer for Pier Improvements Insurance Fund General Fund 788,591 Transfer for Liability Insurance and Worker's Compensation ' Insurance Fund Utility Fund 90,137 Transfer for Liability Insurance and Worker's Compensation Insurance Fund Sylvan Beach Pavilion Fund 4,204 Transfer for Liability Insurance and Worker's Compensation Insurance Fund Airport Fund 980 Transfer for Liability Insurance and Workers Compensation Insurance Fund La Porte Area Water Authority 2,465 Transfer for Liability Insurance and Workers Compensation ' Insurance Fund Technology Fund 801 Transfer for Liability Insurance and Workers Compensation Insurance Fund Vechicle Maintenance Fund 25,005 Transfer for Liabilii Insurance and Workers Compensation Insurance Fund Golf Course Fund 33,451 Transfer for Liability Insurance and Workers Compensation General CIP Fund General Fund 14,000 Transfer for Spenwidc Park from the Reserve for CC Projects General CIP Fund 2004 CO Bond Fund 1,208,726 Transfer for reimbursing resolution for Canada Rd Expenditures San'Itary Sewer Utility Fund 300,000 Annual Transfer for Sewer RehabilitatiorlMlaintenance Projects Rehabilitation Fund ' Technology Fund General Fund 4,000 Transfer for Employee Incentive Program Vehicle Maintenance Fund General Fund 10,000 Transfer for Employee Incentive Program Golf Course Fund General Fund 12,000 Transfer for Employee Incentive Program Golf Course Fund HotellMotel Fund 35,000 Transfer for Golf Course Advertising Expenditures Grant Fund General Fund 231,735 Transfer to move restricted funds (security 8~ technology fees for Municipal Court, etc.) to Grant Fund HotellMotel Fund General Fund 1,000 Transfer for Employee Incentive Program ' 2002 GO Bond Fund General CIP Fund 475,911 Transfer funds for Fire Station #21EMS Remodel Project ' Grand Total $ 5,808,158 ' 67 CITY OF LA PORTE, TEXAS otes to the Financial Statements - Continu September 30, 2005 8. Risk Management The City is exposed to various risks related to torts: theft, 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 previous three 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 records revenues and expenses for providing employee health coverage in an Internal Service Fund and accrues the estimated incurred but not reported claims. Charges are assessed to various City divisions based on their full-time employee count. Activity during the year included: Revenues: Charges to divisions $ 2,159,338 Charges to employees 415,518 Charges to retirees 59,030 Charges to COBRA participants 88 Total revenues 2,633,974 Expenses: Personnel expenses 550,335 Other expenses 298,212 Claims administration 140,002 Claimes incurred 2,992,671 Re-insurance premiums 198,480 Total health services expenses $ 4,179,700 Included in the claims paid amount is $304,387 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, 2005 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 2003, 2004 and 2005 are as follows: Beginning Current of Year Year Accrual Estimates Fiscal Year 2003 $184,081 $ 2,194,142 Fiscal Year 2004 163,452 3,304,198 Fiscal Year 2005 226,387 2,992,671 Payment End of for Year Claims Accrual $ 2,214,771 $163,452 3,241,263 226,387 2,914,671 304,387 68 ' CITY OF LA PORTE, TEXAS ~es to the Financial Statements - Continu~ September 30, 2005 8. 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. 9. Commitments and Contingent Liabilities From time to time, the City is a defendant in legal proceedings relating to its operations as a municipality. In the best judgment of the City's management, the outcome of any pending legal proceedings will not have an ' adverse effect on the accompanying general purpose financial statements. 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. 10. Post-Employment Benefits 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. 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: t Years of Service with Citv At least 10 but less than 15 years At least 15 but less than 20 years ' At least 20 years The costs of providing these benefits and n 1 Total Cost City's Cost ~ $252,350 $175,377 Retiree Cost Ci Cost Retiree Cost Per Year 55% 45% $3,300 25% 75% 1,500 0% 100% 0 umber of retired employees are as follows: Dependent Number of Coverage Cost Retired Employees $76,973 53 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. 69 i ~ ~o ' ~ • Required Supplementary Information Texas Municipal Retirement System Schedule of Funding Progress For the Last Three Fiscal Years Actuarial Accrued UAAL as a Actuarial Liability Unfunded Percentage Actuarial Value of (AAL) - AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (a/b) (c) [(b-a)/c] 2002 $ 39,061,267 $ 45,901,424 $ 6,840,157 85.1 % $14,198,959 48.2 2003 42,858,965 52,192,452 9,333,487 82.1 14,457,226 64.6 ' 2004 45,084,816 54,614,342 9,529,526 82.6 14,692,768 64.9 71 CITY OF LA PORTE, TEXAS General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual For The Year Ended September 30, 2005 Required Supplementary Information Budgeted Amounts Original Final REVENUES Property taxes Franchise taxes Sales taxes Industrial payments Other taxes Licenses and permits Fines and forfeits Charges for services Intergovernmental Interest Miscellaneous Total revenues $ 9,480,407 1,701,500 1,930,000 6,601,049 36,000 286,480 651,525 3,221,842 236,410 30,000 24,175,213 $ 9,560,720 1,757,727 2,150,103 6,991,401 45,737 403,852 616,320 3,143,492 2,817.00 253,642 58,744 24,984,555 EXPENDITURES General Government: Administration Finance . Planning 8~ Engineering Public Safety: Fire Police Public Works: Public Works Administration Streets Health and Sanitation: Solidwaste Culture and Recreation Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Proceeds from Sale of Assets Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances-beginning Fund balances-ending 2,286,719 2,875,249 1,474,131 3,196,698 7,334,881 332,773 2,154,822 1,779,188 3,227,790 24,662,251 2,397,581 2,536,025 1,570,058 3,241,817 7,513,043 337,029 2,182,822 1,818,332 3,276,107 24,872,814 Actual Amounts $ 10,109,435 1,805,800 2,108,192 6,991,926 49,900 531,091 678,205 3,233,453 11,940 268,419 37,187 25,825,548 2,260,985 1,968,616 1,364,328 3,118,854 7,414,003 306,499 2,123,823 1,808,313 3,067,815 23,433,236 Variance with Final Budget Positive (Negative) $ 548,715 48,073 (41,911) 525 ' 4,163 127,239 61,885 ' 89,961 9,123 14,777 (21,557) 840,993 98,549 567,409 205,730 122,963 99,040 30,530 58,999 10,019 ^ 208,292 1,401,531 ' (487,038) 111,741 2,392,312 2,242,524 406,714 (787,591) (380,877) (867,915) 7,449,951 $ 6,582,036 406,714 (1,082,591) (675,877) (564,136) 7,449,951 $ 6,885,815 42,250 394,338 (1,097,526) (660,938) 1,731,374 7,449,951 $ 9,181,325 42,250 ~ (12,376) (14,935) (27,311) 2,215,213 $ 2,215,213 72 • CITY OF LA PORTE, TEXAS Notes to the Required Supplementary Information September 30, 2005 Bud4etarv Basis of Accountin4 An annual budget is adopted for the General Fund using the modified accrual basis of accounting, a basis sanctioned by, and consistent with, generally accepted accounting principles. 73 • • 74 ' ~ • COMBINING FINANCIAL STATEMENTS NONMAJOR GOVERNMENTAL FUNDS ' Debt Service Fund Debt service Fund is used to pay interest and extinguish debt of the outstanding General Obligation Issues of ' the City. Special Revenue Funds ' Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. ' 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. Community Investment Fund -This fund is used to account for funds received and expended on community ' beautification and revitalization programs. 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). 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. ' 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. Capital Improvements Fund -This fund is used to account for capital projects that are normally small in nature ' and effect the general operation of the City. 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. ' 2000 General Obligation Bonds Fund -This fund is used to account for the proceeds and expenditures for construction to renovate the city hall building, public swimming pool and two fire stations. 2002 General Obligation Bonds Fund -This fund is used to account for the proceeds and expenditures for the construction of a wastewater treatment plant. ' 75 CITY OF LA PORTE, TEXAS Combining Balance Sheet Nonmajor Governmental Funds September 30, 2005 Special Revenue Funds Hotel/Motel Tax Increment Section 4B Community Occupancy Reinvestment Capital Grant Sales Tax Investment Tax Zone One (TIRZ) Totals Projects ASSETS Cash and cash equivalents $ 13,887 $ 1,319,979 $ 35,479 $ 339,132 $ 64,953 $ 1,773,430 $ 409,441 Investments ~ 9,545 1,708,419 45,946 439,183 85,097 2,288,190 530,234 Due from others - - - - - - Taxes receivable - - - - - - - Grant receivable - - - - - - 4,716 Other receivables 354,590 186,540 - - - 541,130 - Accrued interest receivable 65 11,567 311 2,974 576 15,493 3,590 Total assets 378,087 3,226,505 81,736 781,289 150,628 4,618,243 947,981 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 545 - 198 1,195 17 1,955 258,601 Accrued salaries payable - - - 1,217 - 1,217 - Retainage payable - - - - - - 3,190 Due to others - - - - - - Unearned Revenue 2,642 - 2,642 - Totalliabilities 187 3 198 2,412 17 5,814 261,791 , Fund Balances: Reserved for. Municipal Court Building Security 91,088 - - - - 91,088 - Municipai Court Technology Fee 60,591 - - - - 60,591 - Park Zone 144,625 - - - - 144,625 - Confiscated funds 60,491 - - - - 60,491 - Debt Service - - - Unreserved 18,105 3,226,505 81,538 778,877 150,609 4,255,634 686,190 Total fund balances 374,900 3,226,505 ~ 81,538 778,877 150,609 4,612,429 686,190 Total liabil'Oies and fund balances $ 378,087 $ 3,226,505 $ 81,736 $ 781,289 $ 150,626 $ 4,618,243 $947,981 76 ~ ~ Capital Projects Funds Transportation 1996 General 2000 Certificate 2000 General 2002 General 2005 Certificate Total Nonmajor & Other Obligation of Obligation Obligation Obligation of Obligation Debt Governmental ' Infrastructure Bonds Bonds Bonds Bonds Bonds Totals Service Funds $ 465,008 $ 514,752 $ 11,272 $ 581,616 $ 1,000,578 $ 1,753,310 $ 4,735,977 $ 762,226 $ 7,271,633 602,195 666,614 14,598 650,921 502,999 - 2,967,561 953,802 6,209,553 2,152 2,152 2,152 ' 114,746 114,746 - - - - - - 4,716 - 4,716 - - - - - - - - 541,130 4,077 4,514 - 4,407 3,406 - 19,994 6,557 42,044 1,071,280 1,185,880 25,870 1,236,944 1,506,983 1,755,462 7,730,400 1,837,331 14,185,974 - 6,280 25,720 25,714 105,344 (5,290) 416,369 12,728 431,052 1,217 - - - - 37,138 - 40,328 40,328 - - - - - - - 5,226 5,226 - - - - - - - 114,746 117,388 6,280 25,720 25,714 142,482 (5,290) 456,697 132,700 595,211 91,088 ' 60,591 - - - - - - - - 144,625 - - - - - - - - 60,491 - - - 1,704,631 1,704,631 1,071,280 1,179,600 150 1,211,230 1,364,501 1,760,752 7,273,703 11,529,337 1,071,280 1,179,600 150 1,211,230 1,364,501 1,760,752 7,273,703 1,704,631 13,590,763 $ 1,071,280 $ 1,185,880 $ 25,870 $ 1,236,944 $ 1,506,983 $ 1,755,462 $ 7,730,400 $1,837,331 $ 14,185,974 77 CITY OF LA PORTE, TEXAS Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For The Year Ended September 30, 2005 Special Revenue Funds Hotel/Motel Tax Increment . Section 4B Community Occupancy Reinvestment Capital Grant Sales Tax Investment Tax Zone One (TIRZ) Totals Projects REVENUES Property taxes $ - $ - $ - $ - $ 36,865 $ 36,865 $ - Donations - - - - - - 30,000 Intergovernmental 980,087 - 70,626 - - 1,050,713 50,034 Sales taxes - 1,058,708 - - - 1,058,708 - Othertaxes - - - 243,179 - 243,179 - Interest 166 61,111 2,267 17,252 3,212 84,008 23,691 Miscellaneous 144,984 - - 1,490 - 146,474 Total revenues 1,125,237 1,119,819 72,893 261,921 40,077 2,619,947 103,725 EXPENDITURES Current: Administration 983,838 - 75,391 172,418 23,262 1,254,909 - Capital0utlay - 458,627 - 1,440 - 460,067 700,070 Debt Service: Principal - - - - - - - Interest - - - - - - - Inten;stand fiscal charges - - - - - - - Total expenditures 983,838 458,627 75,391 173,858 23,262 1,714,976 700,070 Excess (deficiency) of revenues over expenditures 141,399 661,192 (2,498) 88,063 16,815 904,971 (596,345) OTHER FINANCING SOURCES (USES) Proceeds from sale of long-term debt - - - - - - - Transfers in 231,735 - - 1,000 - 232,735 1,222,726 Transfers out - (280,050) - (95,750) - (375,800) (775,911) Total other financing sources (uses) 231,735 (280,050) - (94,750) - (143,065) 446,815 Net change in fund balances 373,134 381,142 (2,498) (6,687) 16,815 761,906 (149,530) Fund balances-beginning 1,766 2,845,363 84,036 785,564 133,794 3,850,523 835,720 Fund balances--ending $ 374,900 $ 3,226,505 $ 81,538 $ 778,877 $ 150,609 $ 4,612,429 $ 686,190 7g s • Capital Projects Funds Transportation 1898 General 2000 Certificate 2000 General 2002 General 2005 Certficate Total Nonmajor i4 Other Obligation of Obligation Obligation Obligation of Obligation Debt Governmental Infrasbvcture Bonds Bonds Bonds Bonds Bonds Totals Service Funds $ $ $ - $ $ - $ - $ - $ 1,641,195 S 1,678,060 30,000 30,000 _ _ - _ - - 50,034 - 1,100,747 - - 1,058,708 ' - - - - - - 740 243,919 19,267 27,635 156 28,125 41,173 2,660 142,707 53,475 280,190 _ - - - - - - - 146,474 19,267 27,635 156 28,125 41,173 2,660 222,741 1,695,410 4,538,098 ' - - - - - - - 1,254,909 ' 335,704 40,851 978,966 2,055,591 2,515,658 _ _ _ _ _ - 1,330,000 1,330,000 - 841,762 841,762 ' - - - - - 44,318 44,318 44,318 - 335,704 - 40,851 978,966 44,318 2,099,909 2,171,762 5,986,647 ' 19,267 (308,069) 156 (12,726) (937,793) (41,658) (1,877,168) (476,352) (1,448,549) ' - 1,802,410 1,802,410 - 1,802,410 300,000 - - - 475,911 1,998,637 596,486 2,827,858 - - (316,436) - - - (1,092,347) - (1,468,147) 300,000 - (316,436) - 475,911 1,802,410 2,708,700 596,486 3,162,121 319,267 (308,069) (316,280) (12,726) (461,882) 1,760,752 831,532 120,134 1,713,572 752,013 1,487,669 316,430 1,223,956 1,826,383 - 6,442,171 1,584,497 11,877,191 ^ $ 1,071,280 S 1,179,600 $ 150 $ 1,211,230 E 1,364,501 $ 1,760,752 E 7,273,703 $ 1,704,631 $ 13,590,763 79 i a go • SCHEDULE OF REVENUES, EXPENDITURES and CHANGES IN FUND BALANCE -BUDGET and ACTUAL Debt Service Fund Special Revenue Funds Capital Projects Funds 81 CITY OF LA PORTE, TEXAS Debt Service Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual For The Year Ended September 30, 2005 Budgeted Amounts Original Final Actual Amounts Variance with Final Budget Positive (Negative) REVENUES Property taxes $ - $1,513,509 $ 1,641,195 $ 127,686 Industrial payments - - 740 740 Interest - 34,429 53,475 ' 19,046 Total revenues - 1,547,938 1,695,410 147,472 EXPENDITURES ' Debt Service: Principal 1,330,000 1,330,000 1,330,000 - Interest 621,585 621,585 841,762 (220,177) Total expenditures 1,951,585 1,951,585 2,171,762 ' (220,177) Excess (deficiency) of revenues over expenditures (1,951,585) (403,647) (476,352) (72,705) OTHER FINANCING SOURCES (USES) Transfers in 280,050 280,050 596,486 316,436 ' Net change in fund balances (1,671,535) (123,597) 120,134 243,731 Fund balances-beginning 1,584,497 1,584,497 1,584,497 - Fund balances-ending $ (87,038) $1,460,900 $ 1,704,631 ' $ 243,731 82 • 1 REVENUES ' Intergovernmental Interest Miscellaneous Total revenues EXPENDITURES Current: CITY OF LA PORTE, TEXAS Grant Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual For The Year Ended September 30, 2005 Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) $ - $ 366,233 $ 980,087 $ 613,854 - 166 166 - 122,033 144,984 22,951 - 488,266 1,125,237 636,971 Administration 206,870 488,119 983,838 (495,719) Total expenditures 206,870 488,119 983,838 (495,719) Excess (deficiency) of revenues over expenditures (206,870) 147 141,399 141,252 OTHER FINANCING SOURCES (USES) Transfers in - - 231,735 231,735 Total other financing sources (uses) - - 231,735 231,735 Net change in fund balances (206,870) 147 373,134 372,987 Fund balances-beginning 1,766 1,766 1,766 - Fund balances~nding $ (205,104) $ 1,913 $ 374,900 $ 372,987 83 • CITY OF LA PORTE, TEXAS Section 4B Sales Tax Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual For The Year Ended September 30, 2005 REVENUES Sales taxes Interest Total revenues EXPENDITURES Current: Capital Outlay Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances-beginning Fund balances~nding Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) $ $ 965,000 $ 1,058,708 $ 93,708 41,069 61,111 20,042 1,006,069 1,119,819 113,750 458,627 (458,627) 458,627 (458,627) 1,006,069 661,192 (344,877) (280,050) (280,050) (280,050) (280,050) (280,050) (280,050) (280,050) 726,019 381,142 (344,877) 2,845,363 2,845,363 2,845,363 $ 2,565,313 $ 3,571,382 $ 3,226,505 $ (344,877) 84 CITY OF LA PORTE, TEXAS Community Investment Special Revenue Fund ' Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual ' For The Year Ended September 30, 2005 ' Variance with Final Budget ' Budgeted Amounts Positive Original Final Actual Amounts (Negative) REVENUES Industrial payments $ 66,677 $ 66,677 $ 70,626 $ 3,949 ' Interest 5,190 5,190 2,267 (2,923) Total revenues 71,867 71,867 72,893 1,026 ' EXPENDITURES Current: Administration 120,000 120,000 75,391 44,609 Capital Outlay - - - - ' Total expenditures 120,000 120,000 75,391 44,609 Excess (deficiency) of revenues over ' expenditures 48,133 (48,133) (2,498) 45,635 Net change in fund balances (48,133) (48,133) (2,498) 45,635 Fund balances-beginning 84,036 84,036 84,036 - ' Fund balances--ending $ 35,903 $ 35,903 $ 81,538 $ 45,635 85 CITY OF LA PORTE, TEXAS Hotel/Motel Occupancy Tax Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual For The Year Ended September 30, 2005 Variance writh ^ Final Budget Budgeted Amounts Actual Positive Original Final Amounts ' (Negative) REVENUES Other taxes $ - $ 240,000 $ 243,179 $ 3,179 Interest - 11,610 17,252 ' 5,642 Miscellaneous - - 1,490 1,490 Total revenues 251,610 261,921 10,311 EXPENDITURES ' Current: Administration 241,000 241,000 172,418 68,582 Capital Outlay - - 1,440 ' (1,440) Total expenditures 241,000 241,000 173,858 67,142 Excess (deficiency) of revenues over ' expenditures (241,000) 10,610 88,063 77,453 OTHER FINANCING SOURCES (USES) Transfers in - - 1,000 ' 1,000 Transfers out (95,750) (95,750) (95,750) - Total other financing sources (uses) (95,750) (95,750) (94,750) 1,000 Net chan a in fund balances 9 (336,750) (85,140) (6,687) 78,453 I Fund balances-beginning 785,564 785,564 785,564 - Fund balances-ending $ 448,814 $ 700,424 $ 778,877 $ 78,453 ' 86 I • f~ CITY OF LA PORTE, TEXAS Tax Increment Reinvestment Zone One Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual For The Year Ended September 30, 2005 REVENUES ' Property taxes Interest Total revenues ' EXPENDITURES Current: Administration ' Capital Outlay Total expenditures ' Excess (deficiency) of revenues over expenditures Net change in fund balances ' Fund Balances-beginning Fund Balances-ending Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) $ 15,000 $ 15,000 $ 36,865 $ 21,865 2,030 2,030 3,212 1,182 17,030 17,030 40,077 23,047 33,000 32,850 23,262 9,588 33,000 32,850 23,262 9,588 (15,970) (15,820) 16,815 32,635 (15,970) (15,820) 16,815 32,635 133,794 133,794 133,794 - $ 117,824 $ 117,974 $ 150,609 $ 32,635 87 C~ CITY OF LA PORTE, TEXAS Capital Projects Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual For The Year Ended September 30, 2005 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Donations $ - $ 30,000 $ 30,000 $ - Intergovernmental - - 50,034 50,034 Interest - 46,179 23,691 (22,488) Total revenues - 76,179 103,725 27,546 EXPENDITURES Current: Capital Outlay 405,296 (599,174) 700,070 (1,299,244) Total expenditures 405,296 (599,174) 700,070 (1,299,244) Excess (deficiency) of revenues over expenditures (405,296) 675,353 (596,345) (1,271,698) OTHER FINANCING SOURCES (USES) Transfers in - 541,046 1,222,726 681,680 Transfers out - (475,911) (775,911) (300,000) Net change in fund balances (405,296) 740,488 (149,530) (890,018) Fund balances-beginning 835,720 835,720 835,720 - Fund balances-ending $ 430,424 $ 1,576,208 $ 686,190 $ (890,018) 88 • CITY OF LA PORTE, TEXAS Transportation and Other Infrastructure Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual For The Year Ended September 30, 2005 Variance with Final Budget ' Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Interest $ - $ 20,340 $ 19,267 $ (1,073) EXPENDITURES Current: ' Administration - - - Total expenditures - Excess (deficiency) of revenues over - ' expenditures 20,340 19,267 (1,073) OTHER FINANCING SOURCES (USES) - - ' Transfers in 300,000 300,000 Net change in fund balances - 20,340 319,267 298,927 ' Fund balances-beginning 752,013 752,013 752,013 - Fund balances-ending $ 752,013 $ 772,353 $ 1,071,280 $ 298,927 89 • CITY OF LA PORTE, TEXAS 1998 General Obligation Bonds Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual For The Year Ended September 30, 2005 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Interest $ 20,000 $ 20,000 $ 27,635 $ 7,635 EXPENDITURES Current: Capital Outlay 151,953 151,953 335,704 (183,751) Excess (deficiency) of revenues over expenditures (131,953) (131,953) (308,069) (176,116) Net change in fund balances (131,953) (131,953) (308,069) (176,116) Fund balances-beginning 1,487,669 1,487,669 1,487,669 - Fund balances-ending $ 1,355,716 $ 1,355,716 $ 1,179,600 $ (176,116) 90 • CITY OF LA PORTE, TEXAS 2000 Certificate of Obligation Bonds Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual For the Year Ended September 30, 2005 REVENUES Interest EXPENDITURES Current: Capital Outlay Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Transfers out Net change in fund balances Fund balances-beginning Fund balances~nding Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) $ - $ - $ 156 $ 156 - 156 156 - - (316,436) (316,436) - - (316,280) (316,280) 316,430 316,430 316,430 - $ 316,430 $ 316,430 $ 150 $ (316,280) 91 • CITY OF LA PORTE, TEXAS 2000 General Obligation Bonds Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual For The Year Ended September 30, 2005 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Interest $ 3,000 $ 3,000 $ 28,125 $ 25,125 EXPENDITURES Current: Capital Outlay 165,002 165,002 40,851 124,151 Excess (deficiency) of revenues over expenditures (162,002) (162,002) (12,726) 149,276 Net change in fund balances (162,002) (162,002) (12,726) 149,276 Fund balances-beginning 1,223,956 1,223,956 1,223,956 Fund balances~nding $ 1,061,954 $ 1,061,954 $ 1,211,230 $ 149,276 92 CITY OF LA PORTE, TEXAS • 2002 General Obligation Bonds Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual For The Year Ended September 30, 2005 REVENUES Interest EXPENDITURES Cunent: Capital Outlay Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Transfers in Net change in fund balances Fund balances-beginning Fund balances-ending Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) $ 20,000 $ 20,000 $ 41,173 $ 21,173 675,911 978,966 (303,055) 20,000 (655,911) (937,793) (281,882) - 475,911 475,911 (281,882) 20,000 (180,000) (461,882) (281,882) 1,826,383 1,826,383 1,826,383 $ 1,846,383 $ 1,646,383 $ 1,364,501 $ (281,882) 93 • CITY OF LA PORTE, TEXAS 2005 Certificates of Obligation Bonds Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual For The Year Ended September 30, 2005 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Interest $ - $ - $ 2,660 $ 2,660 EXPENDITURES Debt Service: Interest and fiscal charges - - 44,318 44,318 Total expenditures 44,318 44,318 Excess (deficiency) of revenues over expenditures - - (41,658) (41,658) OTHER FINANCING SOURCES (USES) Proceeds from Sale of Bonds - - 1,802,410 1,802,410 Total other financing sources (uses) - - 1,802,410 1,802,410 Net change in fund balances 1,760,752 1,760,752 Fund balances-beginning - - - - Fund balances-ending $ - $ - $ 1,760,752 $ 1,760,752 94 • • SUPPLEMENTARY INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES General Fund These supplementary statements and schedules are included to provide management additional information for financial analysis. 95 CITY OF lr4 PORTE, TEXAS General Fund ' Schedule of Revenues -Budget and Actual Year Ended September 30, 2005 Variance vuith ' Final Budget Budgeted Amounts Actual Positive ' Original Final Amounts (Negative) Taxes: • Ad valorem: ' Current $ 9,245,407 ~ $ 9,272,220 $ 9,759,224 $ 487,004 Delinquent 140,000 159,888 200,756 40,868 ~ Industrial Payments 6,601,049 6,991,401 6,991,926 525 Total ad valorem 15,986,456 16,423,509 16,951,906 528,397 ' Penalty and interest 95,000 128,612 149,455 20,843 Sales Taxes 1,930,000 2,150,103 2,108,192 (41,911) ' Other Taxes 36,000 45,737 49,900 4,163 Franchise Fees: Electrical 1,150,000 1,152,055 1,197,435 45,380 _ Gas _ 15U,000 145,153 144,569 (584) Telephone 250,000 254,163 243,924 (10,239) Cable 130,000 182,674 187,808 5,134 Commercial Solidwaste 21,500 23,682 32,064 8,382 Total Franchise Fees 1,701,500 1,757,727 1,805,800 48,073 Charges for Services: Public safety service fees 882,201 Health and sanitation service fees 1,508,000 Culture and recreation fees 539,785 Other service fees 291,856 Total Charges for Services 3,221,842 Intergovernmental Licenses and permits: Building permits Licenses Total Licenses and permits . Investment income 972,016 1,021,346 49,330 1,426,254 1,458,608 32,354 469,930 465,236 (4,694) 275,317 288,263 12,946 3,143,517 3,233,453 89,936 2,817 11,940 9,123 236,000 302,865 395,636 92,771 50,480 100,987 135,455 34,468 286,480 403,852 531,091 127,239 236,410 253,642 268,419 14,777 Fines and forfeitures 651,525 616,295 678,205 61,910 Miscellaneous 30,000 58,744 37,187 (21,557) Total revenues $ 24,175,213 $ 24,984,555 $ 25,825,548 $ 840,993 96 ' ~ • CITY OF LA PORTE, TEXAS General Fund Schedule of Expenditures -Budget and Actual Year Ended September 30, 2005 ' Variance with Final Budget Budgeted Amounts Actual Positive ' Original Final Amounts (Negative) GENERAL GOVERNMENT ' Administration: Emergency Management: Personal services $ 78,995 $ 81,600 $ 79,900 $ 1,700 ' Supplies 1,550 15,024 14,489 535 Other services and charges 39,759 37,979 36,432 1,547 Total Emergency Management 120,304 134,603 130,821 3,782 ' General Administration: Personal services 432,340 450,522 449,721 801 Supplies 7,601 10,603 10,492 111 ' Other services and charges 82,821 93,193 92,851 342 Total General Administration 522,762 554,318 553,064 1,254 Community Investment: ~ ' Other services and charges - 34,297 32 34,265 Total Community Investment - 34,297 32 34,265 ' Human Resources: Personal services 171,710 171,421 166,557 4,864 Supplies 8,000 7,600 6,631 969 Other services and charges 108,084 115,084 108,968 6,116 Total Human Resources 287,794 294,105 282,156 11,949 Municipal Court: ' Personal services 316,014 317,277 278,644 38,633 Supplies and materials 13,056 14,723 14,723 - Other services and charges 179,336 182,437 182,437 - ' Total Municipal Court ~ 508,406 514,437 475,804 38,633 Purchasing: Personal services 192,513 200,797 200,797 ' Supplies 2,472 3,667 3,667 Other services and charges 31,198 30,055 29,786 269 Total Purchasing 226,183 234,519 234,250 269 ' Management Information Services: Supplies - 11 11 - Other services and charges _ 32 32 ' Total Management Information Svcs 43 43 City Secretary: Personal services 242,017 246,017 228,207 17,810 Supplies and materials 4,650 4,650 2,554 2,096 Other services and charges 81,781 81,845 75,859 5,986 t Total City Secretary 328,448 332,512 306,620 25,892 97 CITY OF LA PORTE, TEXAS General Fund Schedule of Expenditures -Budget and Actual Year Ended September 30, 2005 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Legal: Personal services 5,150 5,150 5,150 - Other services and charges 197,915 203,829 203,829 - Total Legal 203,065 208,979 208,979 - City Council: Personal services 24,361 24,361 22,383 1,978 Supplies and materials 9,450 12,522 11,522 ' 1,000 Other services and charges 55,946 52,874 35,311 17,563 Total City Council 89,757 89,757 69,216 20,541 Total Administration 2,286,719 2,397,581 2,260,985 98,549 ' Finance: Accounting: ' Personal services 566,963 606,481 606,481 - Supplies 25,234 23,356 23,241 115 Other services and charges 153,915 151,326 151,144 182 ' Capital Outlay - - - Total Accounting 746,112 781,163 780,866 297 Nondepartmental: ' Personal services 355,000 373,680 373,680 - Supplies 5,000 8,051 8,051 - Other services and charges 1,406,019 1,017,789 450,677 567,112 ' Capital Outlay - - - Total Nondepartmental 1,766,019 1,399,520 832,408 567,112 Tax Office: ' Personal services 184,572 183,098 183,098 - Supplies and materials 11,460 8,897 8,897 - Other services and charges 167,086 163,347 163,347 - Total Tax Office 363,118 355,342 355,342 ' Total Finance 2,875,249 2,536,025 1,968,616 567,409 Planning and Engineering: ' Planning and Engineering: Personal services 615,697 625,077 622,789 2,288 Supplies 21,099 22,669 14,708_ ' ' 7,961 Other services and charges 156,269 156,511 140,906 15,605 Total Planning and Engineering 793,065 804,257 778,403 25,854 Inspection: ' Personal services 513,485 522,485 466,058 56,427 Supplies 18,602 18,602 13,675 4,927 Other services and charges 148,979 224,714 106,192 118,522 ' Totallnspection 681,066 765,801 585,925 179,876 Total Planning and Engineering 1,474,131 1,570,058 1,364,328 205,730 ' TOTAL GENERAL GOVERNMENT 6,638,099 8,503,664 5,593,929 871,688 98 ~ ' ~ • CITY OF LA PORTE, TEXAS General Fund Schedule of Expenditures -Budget and Actual Year Ended September 30, 2005 ' Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) PUBLIC SAFETY: ' Fire Fire Prevention: Personal services 149,217 150,217 111,040 39,177 Supplies 12,611 12,011 8,452 3,559 ' ' Other services and charges 32,203 34,899 25,616 9,283 Total Fire Prevention 194,031 197,127 145,108 52,019 ' Fire suppression: Personal services 1,086,583 1,138,376 1,138,376 - Supplies 114,432 109,882 109,518 364 Other services and charges 343,809 313,815 310,870 2,945 ' Capital Outlay 15,000 20,550 5,550 15,000 Total Fire Suppression 1,559,824 1,582,623 1,564,314 18,309 ' Emergency medical services: Personal services 1,201,923 1,220,923 1,175,886 45,037 Supplies 105,890 103,890 100,480 3,410 Other services and charges 135,030 137,887 133,066 4,821 Total Emergency Services 1,442,843 1,462,700 1,409,432 53,268 ' Total Fire 3,196,698 3,242,450 3,118,854 123,596 Police Police Administration: Personal services 447,508 472,220 472,220 Supplies 17,047 19,569 19,569 Other services and charges 129,605 137,887 137,887 - ' Total Police Administration 594,160 629,676 629,676 ~ - Police Patrol: Personal services 3,873,422 4,020,615 3,985,847 34,768 ' Supplies 129,700 162,067 162,067 - Otherservices and charges 476,008 448,311 447,613 698 Total Police Patrol 4,479,130 4,630,993 4,595,527 35,466 ' Criminal Investigation: Personal services 1,244,631 1,246,229 1,245,824 405 Supplies 40,020 40,020 31,549 8,471 ' Other services and charges 154,289 154,641 133,544 21,097 Capital Outlay Total Criminal Investigation 1,438,940 1,440,890 1,410,917 29,973 99 • CITY OF LA PORTE, TEXAS General Fund Schedule of Expenditures -Budget and Actual Year Ended September 30, 2005 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Support Services: Personal services 701,376 686,331 666,574 19,757 Supplies 48,416 48,254 43,234 5,020 Other services and charges 72,859 76,899 68,075 8,824 Total Support Services 822,651 811,484 777,883 33,601 Total Police 7,334,881 7,513,043 7,414,003 99,040 TOTAL PUBLIC SAFETY 10,531,579 10,755,493 10,532,857 222,636 PUBLIC WORKS: Public Works Administration: Personal services 251,917 255,917 230,972 24,945 , Supplies and materials 2,614 2,614 2,133 481 Other services and charges 78,242 78,498 73,394 5,104 Total Put;lic Works Administration 332,773 337,029 306,499 30,530 ' Streets: Personal services Supplies Other services and charges Capital Outlay Total Streets 1,395,058 112,491 594,273 53,000 2,154,822 2,487,595 . 1,423,058 129,522 579,092 51,150 1,396,179 129,522 571,260 26,862 26,879 7,832 24,288 58,999 TOTAL PUBLIC WORKS HEALTH AND SANITATION: Residential Solidwaste: Personal services Supplies Other services and charges Capital Outlay Total Residential Solidwaste 2,182,822 2,519,851 2,123,823 2,430,322 89,529 885,936 907,936 905,616 2,320 197,070 229,275 229,275 - 680,682 660,124 652,425 7,699 - 1,980 1,980 - 1,763,688 1,799,315 1,789,296 10,019 Commercial solidwaste: Other services and charges 15,500 19,017 19,017 TOTAL HEALTH AND SANITATION 1,779,188 1,818,332 1,808,313 CULTURE Sz RECREATION: Park Maintenance: Personal services Supplies and materials Other services and charges Capital outlay Total Park Maintenance 10,019 982,038 900,889 814,149 86,740 69,593 87,240 87,240 - 622,829 597,246 597,159 87 7,500 15,500 7,712 7,788 1,681,960 1,600,875 1,506,260 94,615 100 ~ ~ CITY OF LA PORTE, TEXAS ' General Fund Schedule of Expenditures -Budget and Actual Year Ended September 30, 2005 ' Variance with Final Budget Budgeted Amounts Actual Positive ' Original Final Amounts (Negative) Recreation: Personal services 465,755 560,890 560,890 - Supplies 53,349 53,349 38,222 15,127 Other services and charges 56,847 75,923 75,923 - ' Total Recreation 575,951 690,162 675,035 15,127 Special Services: Personal services 399,415 378,323 344,197 34,126 ' Supplies 20,681 25,536 25,536 - Otherservices and charges 46,540 70,840 69,839 1,001 Total Special Services 466,636 474,699 439,572 35,127 ' Parks Administration: Personal Services 443,763 450,763 393,336 57,427 Supplies 9,396 9,396 7,892 1,504 ' Other Services and Charges 50,084 50,212 45,720 4,492 Total Parks Administration 503,243 510,371 446,948 63,423 TOTAL CULTURE AND RECREATION 3,227,790 3,276,107 3,067,815 208,292 TOTAL GENERAL FUND $ 24,662,251 $ 24,873,436 $ 23,433,236 $ 1,402,153 101 102 • 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 for financial activities of the airport, which include rentals, grants and other revenues. Sylvan Beach Fund -This fund is used to account for revenues and expenses related to the operations of Sylvan Beach Convention Center. Golf Course Fund -This fund is used to account for revenues and expenses related to the operation of an eighteen-hole municipal golf course. 103 CITY OF LA PORTE, TEXAS Statement of Net Assets Nonmajor Proprietary Funds For the year ended September 30, 2005 ASSETS Current assets: Cash and cash equivalents Investments Receivables, net of allowance for uncollectibles Accrued interest receivable Restricted cash, cash equivalents, and investments: Customer service deposits Total current assets Noncurrent assets: Capital assets: Land Buildings and improvements Improvements other than buildings Vehicles and equipment Construction in progress Less accumulated depreciation Total noncurrent assets Total assets LIABILITIES Current liabilities: Accounts payable Accrued salaries payable Unearned Revenue Other current liabilities Accrued interest payable Payable from restricted assets: Customer deposits Total current liabilities Noncurrent liabilities: Accrued separation pay Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Unrestricted (deficit) Total net assets Business-type Activities - Enterprise Funds Total Sylvan Beach Nonmajor Convention Bay Forest Proprietary Airport Center Golf Course Funds $ 132,515 $ 51,984 $ - $ 184,499 171,609 126,712 - 298,321 1,091 805 473 2,369 1,162 858 - 2,020 - 45,861 - 45,861 306,377 226,220 473 533,070 203,504 - 1,880,965 2,084,469 - 383,586 731,524 1,115,110 4,036,174 - 2,540,952 6,577,126 - - 120,133 120,133 85,000 34,905 - 119,905 (2,266,777) (292,436) (2,032,111) (4,591,324) 2,057,901 126,055 3,241,463 5,425,419 2,364,278 352,275 3,241,936 5,958,489 323 5,208 147,679 153,210 - 2,276 12,993 15,269 - 34,080 473 34,553 1,500 - 17,388 18,888 - 45,759 - 45,759 1,823 87,323 178,533 267,679 - 4,872 136,823 141,695 - 4,872 136,823 141,695 1,823 92,195 315,356 409,374 2,057,901 126,055 3,241,463 5,425,419 304,554 134,025 (314,883) 123,696 $ 2,362,455 $ 260,080 $ 2,926,580 $ 5,549,115 104 • CITY OF LA PORT E, TEXAS Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets Nonmajor Propietary Funds For the year ended September 30, 2005 Bus iness-type Activities - Enterprise Funds ' Total Sylvan Beach Nonmajor Convention Bay Forest Proprietary Airport Center Golf Course Funds Operating revenues: User fees $ 32,728 $ 169,284 $ 966,115 $ 1,168,127 Operating expenses: Personal services - 139,103 783,939 923,042 Supplies - 5,540 135,324 140,864 Other services and charges 38,529 52,168 175,225 265,922 Depreciation 118,658 14,871 148,135 281,664 Total operating expenses 157,187 211,682 1,242,623 1,611,492 Operating income (loss) (124,459) (42,398) (276,508) (443,365) ' Nonoperating revenues (expenses): Interest income 6,703 4,937 - 11,640 Interest expense and fiscal charges - - - - Gain (loss) on sale of equipment - - (750) (750) Total nonoperating revenue (expenses) 6,703 4,937 (750) 10,890 Income (loss) before contributions ' and transfers (117,756) (37,461) (277,258) (432,475) Capital contributions = - - - ' Transfers in 64,450 45,555 110,005 Transfers out (1,076) (5,399) (33,451) (39,926) Change in net assets (118,832) 21,590 (265,154) (362,396) Total netassets-beginning 2,481,287 238,490 3,191,734 5,911,511 Total net assets-ending $ 2,362,455 $ 260,080 $ 2,926,580 $ 5,549,115 105 U CITY OF LA PORTE, TEXAS Combining Statement of Cash Flows Nonmajor Proprietary Funds For The Year Ended September 30, 2005 Business-type Activities - Enterprise Funds Total Sylvan Beach Nonmajor Convention Bay Forest Proprietary Airport Center Golf Course Funds CASH FLOWS FROM OPERATING ACTIVITIES Cash received from user fees $ 39,303 $ 158,127 $ 966,114 $ 1,163,544 Cash payments to suppliers (39,919) (55,472) (178,218) (273,609) Cash payments for personal services - (143,021) (798,203) (941,224) Net cash provided by operating activities (616) (40,366) (10,307) (51,289) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfersfrom other funds - 64,450 45,555 110,005 Transfers to other funds (1,076) (5,399) (33,451) (39,926) Net cash from noncapital financing activies (1,076) 59,051 12,104 70,079 CASH FLOWS FROM CAPITAL AND RELATED FINANCIANG ACTIVITIES Payments for capital acquisitions Net cash (used) by capital and related financing activies CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments Net Investments (purchased) sold Net cash provided by investing activities Net increase (decrease) in cash and cash equivalents Balances-beginning of the year Balances~nd of the year Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense (Increase) decrease in accounts receivable Increase (decrease) in accrued salaries payable Increase (decrease) in accounts payable Increase (decrease) in other current liabilities Increase (decrease) in customer utility deposits Increase (decrease) in accrued employee separation Total adjustments Net cash provided by operating activities Reconciliation of total cash and cash investments: Current Assets -cash and cash equivalents Restricted Assets -cash and cash equivalents Total cash and cash equivalents (79,214) - (9,656) (88,870) (79,214) - (9,656) (88,870) 6,164 4,410 - 10,574 (61,723) (68,280.00) 1,963 (128,040) (55,559) (63,870) 1,963 (117,466) (136,465) (45,185) (5,896) (187,546) 268,980 143,030 5,896 417,906 $ 132,515 $ 97,845 $ - $ 230,360 $ (124,459) $ (42,398) $ (276,498) $ (443,355) 118,658 14,871 148,135 281,664 6,574 - - 6,574 - (4,352) (23,507) (27,859) (1,389) 2,236 131,713 132,560 - (8,557) 607 (7,950) - (2,600) - (2,600) - 434 9,243 9,677 123,843 2,032 266,191 392,066 $ (616) $ (40,366) $ (10,307) $ (51,289) $ 132,515 $ 51,984 $ - $ 184,499 - 45,861 - 45,861 $ 132,515 $ 97,845 $ - $ 230,360 106 ~ • • 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. 107 CITY OF LA PORTE, TEXAS Internal Service Funds Combining Statement of Net Assets For the year ended September 30, 2005 ASSETS Current assets: Cash and cash equivalents Investments Accrued interest receivable Miscellaneous Receivable Material and supplies inventories, at cost Total current assets Noncurrent assets: Capital assets Vehicles and equipment Less accumulated depreciation Total noncurrent assets Total assets LIABILITIES Current liabilities: Accounts payable Accrued salaries payable Deferred revenue Total current liabilities Noncurrent liabilities: Motor Pool Technology Insurance Totals $ 1,087,663 $ 381,934 $ 497,743 $ 1,967,340 1,408,547 494,612 630,562 2,533,721 9,537 3,349 4,269 17,155 79,711 - 1,376 81,087 44,531 - - 44,531 2,629,989 879,895 1,133,950 4,643,834 9,639,336 1,107,484 - 10,746,820 (5,870,733) (947,982) - (6,818,715) 3,768,603 159,502 - 3,928,105 6,398,592 1,039,397 1,133,950 8,571,939 41,066 45,482 312,779 399,327 11,416 4,538 - 15,954 - - 1,376 1,376 52,482 50,020 314,155 416,657 Accrued employee separation pay 105,932 - - 105,932 Total noncurrent liabilities 105,932 - ' - 105,932 Total liabilities 158,414 50,020 314,155 522,589 NET ASSETS ' Invested in capital assets, net of related debt 6,398,592 159,502 - 6,558,094 Unrestricted (deficit) (158,414) 829,875 819,795 1,491,256 Total net assets $ 6,240,178 $ 989,377 $ 819,795 $ 8,049,350 108 ~ i • CITY OF LA PORTS, TEXAS Internal Service Funds Combining Statement of Revenues, Expenses and Changes in Fund Net Assets For The Year Ended September 30, 2005 Motor Pool Technology Insurance Totals ' Operating revenues: User Fees $ 1,790,403 $ 906,018 $ 2,633,974 $ 5,330,395 Cable Fees - 80,000 - 80,000 Total operating revenues 1,790,403 986,018 2,633,974 5,410,395 Operating expenses: Personal services 645,066 260,323 550,335 1,455,724 ' Supplies 193,808 98,832 292,640 Other sevices and charges 138,354 485,954 3,629,365 4,253,673 Miscellaneous - - _ - ' Depreciation 883,308 61,674 944,982 Total operating expenses 1,860,536 906,783 4,179,700 6,947,019 ' Operating income (loss) (70,133) 79,235 (1,545,726) (1,536,624) Nonoperating revenues (expenses): Interest income 50,204 16,735 22,508 89,447 Gain (loss) on sale of equipment 56,604 56,604 Total nonoperating revenues (expenses) 106,808 16,735 22,508 146,051 ' Income(loss) before contributions and transfers 36,675 95,970 (1,523,218) (1,390,573) Transfers in 10,000 4,000 945,634 959,634 ' Transfers out (25,005) (801) - (25,806) Change in net assets 21,670 99,169 (577,584) (456,745) ' Net assets-beginning 6,218,508 890,208 1,397,379 8,506,095 Net assets-ending $ 6,240,178 $ 989,377 $ 819,795 $ 8,049,350 109 CITY OF LA PORTE, TEXAS Internal Service Funds Combining Statement of Cash Flows For the Year Ended September 30, 2005 CASH FLOWS FROM OPERATING ACTNITIES Cash received from user fees Cash payments to suppliers Cash payments for personal services Net cash provided by operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTNITIES Operating transfers in from other funds Operating transfers out to other funds Net cash from noncapital financing activies CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTNITIES Payments for capital acquisitions Proceeds from sale of assets Proceeds from insurance Net cash (used) by capital and related financing activies CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments Investments purchased Investments sold Net cash provided by investing activities Net increase (decrease) in cash and cash equivalents Balances-beginning of the year Balances-end of the year Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense (Increase) decrease in inventories 8~ prepaid expenses Increase (decrease) in accrued salaries payable Increase (decrease) in accounts payable Increase (decrease) in accrued employee separation Total adjustments Net cash provided by operating activities Motor Pool Technology Insurance Totals $ 1,790,403 $ 986,018 $ 2,633,974 $ 5,410,395 (457,640) (591,135) (3,560,253) (4,609,028) (665,773) (267,704) (550,335) (1,483,812) 666,990 127,179 (1,476,614) (682,445) 10,000 (801) - 9,199 (25,005) 4,000 945,634 924,629 (15,005) 3,199 945,634 933,828 (472,672) - - (472,672) 128,668 - - 128,668 10,729 - - 10,729 (333,275) - - (333,275) 44,210 14,590 20,899 79,699 (789,807) (282,425) (163,449) (1,235,681) 0 - - - (745,597) (267,835) (142,550) (1,155,982) (426,887) (137,457) (673,530) (1,237,874) 1,514,550 519,393 1,171,273 3,205,216 $ 1,087,663 $ 381,936 $ 497,743 $ 1,967,342 $ (70,133) $ 79,235 $ (1,545,726) $ (1,536,624) 883,308 61,674 - 944,982 (6,915) (6,915) (18,220) (7,381) (25,601) (118,563) (6,349) 69,112 (55,800) (2,487) (2,487) 737,123 47,944_ 69,112 854,179 $ 666,990 $ 127,179 $ (1,476,614) $ (682,445) 110 ~ ~ • CAPITAL ASSETS USED IN THE OPERATION ' OF GOVERNMENTAL FUNDS These schedules present the capital asset balances related to governmental funds. A capital asset is presented in this schedule when it has been purchased using general governmental resources and is used for general govemmental purposes. Assets are recorded at historical cost if purchased, or if historical cost is not available, estimated historical cost, or fair market value on the date donated, if donated. 111 112 • • CITY OF LA PORTE, TEXAS Capital Assets Used in the Operation of Governmental Funds Schedule by Source For the year ended September 30, 2005 Governmental funds capital assets Land $ 7,682,585 Buildings 17,925,224 Equipment 1,489,686 Improvements 10,476,050 Infrastructure 23,482,106 Construction in progress 9,431,427 Total governmental funds capital assets $ 70,487,078 Investment in governmental funds capital assets by source Current Operations $ 15,554,927 Capital Projects 53,787,724 Section 4B Sales Tax 1,144,427 Total governmental funds capital assets $ 70,487,078 This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 113 • CITY OF LA PORTE, TEXAS Capital Assets Used in the Operation of Governmental Funds Schedule by Function and Activity September 30, 2005 Function and Activi General Government Administration Finance Planning Total general government Public Safety Fire Police Total Public Safety Public Works Adminstration Streets Total Public Works Cultural and Recreational Parks and Recreation Total governmental funds capital assets Land Buildings Equipment Improvements $ 858,364 $ 6,377,917 $ 292,578 $ 407,287 217,002 - 19,922 - 1,075,366 6,377,917 312,500 407,287 563,413 ~ 3,784,847 551,978 28,422 45,089 1,032,387 366,118 - 608,502 4,817,234 918,096 28,422 2,760,405 2,112,774 106,089 3,173,289 2,760,405 2,112,774 106,089 3,173,289 3,238,311 4,617,299 153,001 6,867,051 $ 7,682,585 $ 17,925,224 $ 1,489,686 $ 10,476,050 This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as govemmental activities in the statement of net assets. 114 • Construction Infrastructure in Progress Total $ - $ 1,191,530 $ 9,127,676 190,488 684,299 1,111,710 190,488 1,875,829 10,239,386 - 1,170,303 6,098,963 - 158,486 1,602,080 - 1,328,789 7,701,043 6,683,721 5,971,483 20,807,762 16,515,354 - 16,515,354 23,199,075 5,971,483 37,323,116 92,543 255,326 15,223,532 $ 23,482,106 $ 9,431,427 $ 70,487,078 • 115 • • CITY OF LA PORTE, TEXAS Capital Assets Used in the Operation of Governmental Funds Schedule of Changes by Function and Activity For The Year Ended September 30, 2005 Function and Activity Governmental Fund Capital Assets October 1, 2004 Additions/ Retirements/ Adjustments Adjustments Governmental Fund Capital Assets September 30, 2005 General government Administration Finance Planning Total general government Public safety Fire Police Total public safety Public works Administration Streets Total public works Cultural and Recreational Parks and recreation Total governmental funds capital assets $ 7,943,948 $ 1,183,730 $ - $ 9,127,678 ' 727,468 384,243 - 1,111,711 ' 8,671,416 1,567,973 - 10,239,389 4,986,767 1,112,197 - 6,098,964 1,390,937 211,143 - 1,602,080 6,377,704 1,323,339 - 7,701,043 14,752,431 6,055,331 - 20,807,762 16,515,353 - - 16,515,353 31,267,784 6,055,331 - 37,323,115 15,089,060 137,404 (2,933) 15,223,531 $ 61,405,964 $ 9,084,047 $ (2,933) $ 70,487,078 This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 116 • STATISTICAL SECTION 117 • City of La Porte, Texas Government-wide Expenses by Function Last Ten Fiscal Years " (Unaudited) " Interest on Fiscal General Public Public Health & Culture & Long Term Year Government Safety Works Sanitation Recreation Debt 2003 $ 8,625,554 $ 10,771,423 $ 3,638,063 $ 1,823,462 $ 4,048,974 $ 747,351 2004 10,487,889 11,947,286 1,267,829 1,906,519 4,106,491 689,644 2005 7,411,122 10,367,759 5,164,855 1,887,204 3,717,791 863,818 Note: City of La Porte first applied GASB Statement No. 34 in fiscal year 2003; therefore, government-wide financial information for years prior to fiscal year 2003 is not available. City of La Porte, Texas Government-wide Revenues Last Ten Fiscal Years (Unaudited) PROGRAM REVENUES GENERAL REVENUES Operating Fiscal Charges for Grants and Investment Loss on Sale Year Services Contributions Taxes Earnings Miscellaneous of Assets 2003 $ 13,106,260 $ 480,037 $ 22,865,250 $ 663,428 $ 1,594,184 $ (260,545) 2004 11,581,258 576,262 22,939,985 464,961 1,369,248 - 5,784 2005 12,340,983 2,639,934 24,153,400 885,299 1,580,778 103,594 Note: City of La Porte first applied GASB Statement No. 34 in fiscal year 2003; therefore, 118 Water Sewer Services Services $ 6,339,238 6,256,424 6,477,962 $ 1,913,284 1,895,709 1,819,756 Total $ 38,448,614 36,925,930 41,703,988 • Golf Convention Airport Course Center $ 149,472 $ 1,284,729 $ 212,947 142,765 1,222,819 194,314 157,186 1,242,613 211,682 119 Total $ 39,554,497 40,117,689 39,321,748 • City of La Porte, Texas General Governmental Expenditures by Function' Last Ten Fiscal Years (Unaudited) Fiscal General Public Public Health and Parks and Year Government Safety Works Sanitation Recreation 1996 $ 4,472,650 $ 6,355,939 $ 1,985,548 $ 1,815,140 $ 2,093,166 1997 4,495,678 6,889,530 2,070,686 1,873,746 2,331,312 1998 4,537,921 7,472,289 2,144,846 2,225,835 2,560,069 1999 5,056,127 7,842,420 2,204,287 2,413,218 2,697,886 2000 5,030,071 8,644,309 2,304,829 2,411,767 2,944,296 2001 5,232,112 9,364,320 2,487,825 2,278,761 3,058,199 2002 5,295,157 10,165,683 2,422,522 1,764,906 3,297,865 2003 5,625,003 10,477,080 2,556,011 1,823,462 3,475,888 2004 7,971,284 10,414,544 2,361,192 1,758,964 3,245,144 2005 7,308,905 10,532,857 2,430,322 1,808,313 3,067,815 ' This table includes General, Special Revenue and Debt Service Funds. 120 i Debt Service $ 2,424,211 2,212,278 2,061,420 2,054,379 2,145,841 2,504,933 2,319,535 2,385,199 2,189,834 2,171,762 Total $ 19,146,654 19,873,230 21,002,380 22,268,317 23,481,113 24,926,150 25,265,668 26,342,643 27,940,962 27,319,974 121 ® City of La Porte, Texas General Governmental Revenues by Source' Last Ten Fiscal Years (Unaudited) Fiscal Licenses Fines and Charges for Inter- Year Taxes z and Permits Forfeits Services governmental 1996 $ 16,181,649 $ 218,946 $ 353,837 $ 2,439,161 $ 142,600 1997 17,148,601 243,632 427,305 2,567,400 187,333 1998 18,841,950 303,890 617,432 2,552,849 192,821 1999 19,400,416 357,694 479,363 2,996,774 170,044 2000 20,231,824 337,259 407,459 3,147,031 313,261 2001 21,685,552 262,010 561,547 2,923,504 673,105 2002 22,535,013 238,535 614,534 2,108,739 385,722 2003 22,921,623 199,970 847,250 2,275,333 302,912 2004 22,948,635 320,405 554,559 2,948,580 576,262 2005 24,045,940 531,091 678,205 ~ 3,233,453 1,062,653 ' This table includes General, Special Revenue and Debt Service Funds. z Includes ad valorem, franchise, sales, industrial payments, and other taxes. 122 Interest Miscellaneous Total $ 589,499 $ 85,202 $ 20,010,894 589,971 28,470 21,192,712 694,129 14,791 23,217,862 627,387 88,508 24,120,186 836,115 71,417 25,344,366 926,656 112,389 27,144,763 444,248 143,668 26,470,459 295,069 88,970 26,931,127 325,418 32,605 27,706,464 405,902 183,660 30,140,904 123 • City of La Porte, Texas Property Tax Levies and Collections Last Ten Fiscal Years (Unaudited) Delinquent Fiscal Total Current Tax Percent of Tax Total Tax Year Tax Levy Collections Levy Collected Collections Collections' 1996 $ 7,874,567 $ 7,693,553 97.70% $ 152,106 $ 7,845,659 1997 8,310,963 8,100,624 97.47% 358,575 8,459,199 1998 8,598,632 8,437,322 98.12% 220,553 8,657,875 1999 8,939,428 8,795,498 98.39% 206,154 9,001,652 2000 9,175,689 9,006,072 98.15% 184,584 9,190,656 2001 10,102,074 9,831,981 97.33% 247,977 10,079,958 2002 10,683,102 10,515,098 98.43% 207,508 10,722,606 2003 10,740,051 10,539,796 98.14% 300,131 10,839,927 2004 11,078,891 10,924,697 98.61% 263,540 11,188,237 2005 11,607,713 11,451,693 98.66% 277,123 11,728,816 ' Excludes penalties and interest. 124 ~ ~ ' Percentage Percent of of Total Tax Outstanding Delinquent Collections Delinquent Taxes to to Tax Levy Taxes Tax Levy 99.63% 1,101,197 13.98% ' 101.78% 1,108,770 13.34% 100.69% 1,036,304 12.05% 100.70% 901,832 10.09% ' 100.16% 830,979 9.06% 99.78% 619,890 6.14% 100.37% 864,736 8.09% 100.93% 854,559 7.96% ' 100.99% 808,145 7.29% 101.04% 858,141 7.39% 125 U • City of La Porte, Texas Property Tax Rates -Direct and Overlapping Governments (Per $100 of Assessed Value) . Last Ten Fiscal Years (Unaudited) City of La Porte ~ Fiscal General Debt Service Year Fund Fund Total 1996 0.55 0.16 0.71 1997 0.57 0.14 0.71 1998 0.57 0.14 0.71 1999 0.57 0.14 0.71 2000 0.57 0.14 0.71 2001 0.57 0.14 0.71 2002 0.57 0.14 0.71 2003 0.575 0.135 0.71 2004 0.575 0.135 0.71 2005 0.612 0.098 0.71 Source: 'City of La Porte records `Office of Harris County s Office of La Porte Independence School District a Office of San Jacinto Jr. College District Harris County Port of Flood Control Harris Houston District z County z Authority z 0.0760 0.4070 0.0130 0.0742 0.4276 0.0160 0.0800 0.4166 0.0213 0.0800 0.3948 0.0204 0.0617 0.3590 0.0183 0.0476 0.3839 0.0183 0.0476 0.3839 0.0183 0.04174 0.3881 0.0199 0.03318 0.3999 0.0167 0.03322 0.3999 0.0147 126 • Harris County San Jacinto Board of Hospital La Porte Jr. College Education z District 2 I.S.D. s District a Total 0.0050 0.1240 1.560 0.1100 3.0050 0.0056 0.1238 1.560 0.1100 3.0272 0.0061 0.1238 1.610 0.1100 3.0778 0.0063 0.1465 1.610 0.1100 3.1180 0.0063 0.2027 1.650 0.1260 3.1340 0.0063 0.1902 1.630 0.1307 3.1170 0.0063 0.1902 1.630 0.1307 3.1170 0.0063 0.1902 1.680 0.1307 3.1670 0.0063 0.1902 1.734 0.1391 3.2289 0.0063 0.1922 1.734 0.1454 3.2352 127 • 128 • City of La Porte, Texas Ratio of Gross General Bonded Debt to Asses sed Value and Gross Bonded Debt Per Capita Last Ten Fiscal Years (Unaudited) Gross Ratio of ' Taxable Bonded Gross Bonded Gross Fiscal Value Debt ~ Debt to Bonded Debt Year Population (in thousands) (in thousands) Taxable Value Per Capita ' 1996 31,045 $ 1,135,711 $ 11,835 1.04% $ 381 1997 31,859 1,191,363 10,255 0.86% 321 1998 32,658 1,231,486 11,170 0.91 % 342 1999 34,191 1,277,210 9,675 0.76% 283 2000 31,880 1,525,166 11,370 0.75% 324 2001 32,356 1,422,739 9,745 0.68% 311 ' 2002 32,910 1,504,631 13,610 0.90% 425 2003 33,789 1,512,665 12,170 0.80% 360 2004 33,712 1,560,406 10,830 0.69% 320 ' 2005 34,538 1,634,888 17,325 1.06% 500 'Included long-term general obligation debt but not liability for employees separation pay. 129 • City of La Porte, Texas Computation of Direct and Overlapping Debt September 30, 2005 (Unaudited) Percentage Amount Net Debt Applicable to Applicable to Outstanding City of La Porte City of La Porte La Porte Independent School District $ 62,550,000 36.47% $ 22,811,985 Harris County Flood Control District 53,599,985 0.84% 450,240 Harris County (includes toll roads and bridges) 1,867,831,590 0.84% 15,689,785 Harris County Dept. of Education 1,135,000 0.84% 9,534 Port of Houston Authority 333,645,000 0.84% 2,802,618 San Jacinto Jr. College District 86,215,000 5.96% 5,138,414 Total Overlapping Debt 2,404,976,575 46,902,576 City of La Porte 28,375,000 100.00% 28,375,000 Total Direct and Overlapping Debt $ 2,433,351,575 $ 75,277,576 Total Direct and Overlapping Debt Per Capita $ 2,180 130 City of La Porte, Texas • Ratio of Annual Debt Service Expenditures for General Obligation Debt to Total General Expenditures Last Ten Fiscal Years (Unaudited) Ratio of Debt Total Service to Fiscal Total General Total General Year Principal Interest Debt Service Expenditures ~ Expenditures 1996 $ 1,720,000 $ 704,211 $ 2,424,211 $ 19,146,634 12.66% 1997 1,610,000 602,278 2,212,278 19,873,230 11.13% 1998 1,555,000 506,420 2,061,420 21,002,380 9.82% 1999 1,495,000 559,379 2,054,379 22,089,712 9.30% 2000 1,555,000 590,841 2,145,841 23,481,113 9.14% 2001 1,775,000 729,932 2,504,932 24,926,150 10.05% 2002 1,685,000 634;535 2,319,535 25,119,686 9.23% 2003 1,590,000 795,199 2,385,199 26,130,052 9.13% 2004 1,490,000 699,834 2,189,834 25,576,240 8.56% 2005 1,330,000 841,762 2,171,762 25,604,998 8.48% ~ Includes all General Fund and Debt Service Fund Expenditures. 131 City of La Porte, Texas Water and Sewer Revenue Bond Coverage Last Ten Fiscal Years (Unaudited) Net Revenue Fiscal Operating Operating Available for Year Revenue ~ Expenses 2 Debt Service 1996 $ 6,260,721 $ 3,908,378 $ 2,352,343 1997 6,106,337 4,081,712 2,024,625 1998 6,368,938 4,177,982 2,190,956 1999 6,445,231 4,386,479 2,058,752 2000 6,844,236 5,626,662 1,217,574 2001 6,094,735 4,347,508 1,747,227 2002 5,988,595 4,814,158 1,174,437 2003 5,837,448 5,025,158 812,290 2004 5,836,221 5,125,635 710,586 2005 6,080,845 5,259,943 820,902 Includes interest income. z Excludes depreciation and loss on uncollectible accounts. 132 Debt Service Requirements Principal Interest Total Coverage $ 570,000 $ 290,100 $ 860,100 2.73 ' 540,000 256,603 796,603 2.54 535,000 263,547 798,547 2.74 660,000 211,328 871,328 2.36 ' 660,000 170,483 830,483 1.47 660,000 168,781 828,781 2.11 625,000 132,418 757,418 1.55 580,000 115,948 695,948 1.17 580,000 71,293 651,293 1.09 565,000 43,161 608,161 1.35 133 City of La Porte, Texas Assessed and Estimated Actual Value of Taxable Property ~ Last Ten Fiscal Years (Unaudited) Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Real Property Actual Value $ 1,088,617,760 1,107,091,700 1,132,150,100 1,200,942,090 1,348,881,240 1,346,611,820 1,461,368,400 1,498,049,850 1,546,560,410 1,601,433,200 Taxable Value $ 963,946,080 991,682,852 1,030,030,350 1,073,849,843 1,288,197,300 1,128,777,060 1,212,042,880 1,246,480,840 1,288,266,880 1,333,645,620 Personal Property Taxable Value $ 171,765,840 199,680,490 201,455,980 203,361,040 236,968,760 293,962,150 292,588,100 266,183,680 272,140,030 301,243,320 Actual Value $ 197,177,710 222,428,561 239,361,192 231,352,908 258,255,710 295,183,470 295,213,550 270,257,240 279,687,470 311,721,280 Source: City of La Porte records, local financial and the Harris County Appraisal District ~ Property values shown are appraised values, which represent estimated actual value. Ratio of total appraised value to estimated actual value for all years is 100%. 134 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ~~ Exemptions Real Property Personal Property $ 145,406,130 $ 419,590 146,950,580 522,210 151,108,330 129,520 169,445,710 809,240 186,962,500 956,290 217,834,760 1,221,320 249,325,520 2,625,450 251,569,010 4,073,560 258,293,530 7,547,440 267,787,580 10,477,960 Total Actual Value $ 1,285,795,470 1,329,520,261 1,371,511,292 1,432,294,998 1,607,136,950 1,641,795,290 1,756,581,950 1,768,307,090 1,826,247,880 1,913,154,480 135 Taxable Value $ 1,135,711,920 1,191,363,342 1,231,486,330 1,277,210,883 1,525,166,060 1,422,739,210 1,504,630,980 1,512,664,520 1,560,406,910 1,634,888,940 Ratio of Actual Value to Taxable Value 113.21 111.60% 111.37% 112.14% 105.37% 115.40% 116.75% 116.90% 117.04% 117.02% City of La Porte, Texas Principal Taxpayers September 30, 2005 . (Unaudited) Percentage 2005 of Total Assessed Assessed Taxpayer Type of Business Valuation Valuation Conoco Phillips Inc Chemical Plant $ 54,702,820 3.09% Oxy Vinyls LP Chemical Plant 49,177,149 2.78% Equistar Chemicals LP Chemical Plant 45,219,482 2.56% BP Solvay Chemical Plant 37,068,510 2.10% PPG Industries Chemical Plant 32,016,935 1.81 Dupont Dow Elastomers Chemical Plant 25,986,060 1.47% Centerpoint Energy Utility 24,651,811 1.39% Dow Chemicals Chemical Plant 20,576,356 1.16% Attofina Petrochemicals Chemical Plant 20,215,323 1.14% PPG Industries Chemical Plant 14,643,050 0.83% $ 324,257,496 18.34% Source: City of La Porte Tax records. 136 City of La Porte, Texas Demographic Statistics September 30, 2005 (Unaudited) Fiscal Population (1 School Enrollment (2 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 31,045 31,859 32,658 34,191 31,880 32,356 32,910 33,789 33,712 34,538 7,458 7,353 7,415 7,477 7,645 7,772 7,732 7,648 7,629 7,808 • Unemployment Rate (3) 4.0% 5.3% 4.3% 4.4% 3.9% 4.6% 5.6% 7.0% 6.0% 6.1 Sources: (1) Based on building permits issued by the City's Inspection Division and information obtained from the U. S. Census Bureau. (2) La Porte Independent School District for the school year ending August 31. (3) Texas Workforce Commission rates for Harris County, as of September 2004 137 .~- City of La Porte, Texas Property Value, Construction and Bank Deposits Last Ten Fiscal Years (Unaudited) Commercial Construction Residential Construction Bank Deposits Number Property of Units Amount Value ~ 2 $ 176,891,604 $ 1,135,711,920 3 220,345,717 1,191,363,342 3 293,810,442 1,231,486,330 2 275,951,399 1,277,210,883 2 304,034,393 1,525,166,060 2 328,478,701 1,422,739,210 2 325,832,577 1,504,630,980 1 280,362,658 1,512,664,520 * 1,560,406,910 * 1,634,888,940 Fiscal Number Number Year of Units Value of Units Value 1996 21 $ 6,443,359 181 $ 15,166,761 1997 52 9,189,192 199 17,910,021 1998 24 10,682,637 258 32,216,337 1999 46 20,944,265 282 33,741,959 2000 25 8,255,364 290 17,891,727 2001 31 9,679,778 155 20,037,910 2002 31 7,149,145 146 21,222,481 2003 21 4,077,913 164 21,337,646 2004 22 6,270,391 112 12,917,657 2005 36 13,125,264 113 24,316,941 Source: City of La Porte records, local financial institutions and the Harris County Appraisal District. ~ Property values shown are appraised values, which represent taxable value. Ratio of total appraised value to estimated actual value for all years is 100%. State law requires the Appraisal District to report current values. * Information not available 138 1 1 1 Date of Incorporation Form of Government Area Miles of Streets Number of Street Lights Fire Protection: Number of stations Number of paid personnel Number of volunteer firefighters Police Protection: Number of stations Number of police officers Number of reserve officers Municipal Water Department: Number of meters Average daily consumption Miles of water mains Sewers: Sanitary sewers Storm sewers Recreation and Culture Number of parks Acreage Employees: Full-time Part-time Education: Attendance centers Number of teachers Number of students City of La Porte, Texas Miscellaneous Statistical Data September 30, 2005 (Unaudited) 139 August 10, 1892 Council/Manager 19 Square miles 211 2,192 4 13 90 72 5 10,987 Meters 4.1 Million gallons 165 Miles 187 Miles 89 Miles 21 337 360 55 11 513 7,808 140