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Res 15-04 Approving the Comprehensive Annual Financial Report Year Ending September 30, 2014TOWN OF WESTLAKE RESOLUTION NO. 15-04 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, ACCEPTING THE COMPREHENSIVE ANNUAL FINANCIAL REPORT PRESENTED BY WEAVER AND TIDWELL, L.L.P., FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014. WHEREAS, Section 103.001 of the Local Government Code requires that a municipality shall have its records and accounts audited annually and shall have an annual financial statement prepared based on the audit; and WHEREAS, Section 103.002 of the Local Government Code requires that a municipality shall employ at its own expense a certified public accountant who is licensed in this state or a public accountant who holds a permit to practice from the Texas State Board of Public Accountancy to conduct the audit and to prepare the annual financial statements; and NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE: SECTION 1: That, all matters stated in the Recitals hereinabove are found to be true and correct and are incorporated herein by reference as if copied in their entirety. SECTION 2: That the Town Council does hereby accept the Comprehensive Annual Financial Report from Weaver and Tidwell, L.L.P., for the fiscal year ended September 30, 2014, attached as Exhibit "A". SECTION 3: If any portion of this Resolution shall, for any reason, be declared invalid by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions hereof and the Council hereby determines that it would have adopted this Resolution without the invalid provision. Resolution 15-04 Page i of 2 SECTION 4: That this resolution shall become effective from and after its date of passage. PASSED AND APPROVED ON THIS 2"d DAY OF MARCH, 2015. ATTEST: Kelly kdwardsorown Secretary 4(t4�Aa(� - La4a Wheat, Mayor Thomas . 11 e n Manager Resolution 15-04 Page 2 of 2 IN THE TowN OF ESTLAE a tocti- 1-0 1, cl th %I Ui W -Ii - I ci I ci t i I _ SEPTEMBER 30, 2014 MOVING FORWARD � T06EiHER... n M.. Growing Community... The Town of Westlake * 3 Village Circle #202 * Westlake, Texas 76262 * www.westlake-tx,org TOWN OF WESTLAKE TOWN OF WESTLAKE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2014 Prepared by: Town of Westlake Finance Department 3 Village Circle, Suite 202 Westlake, Texas 76262 TOWN OF WESTLAKE TOWN OF WESTLAKE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 TABLE OF CONTENTS I. INTRODUCTORY SECTION Letter of Transmittal GFOA Certificate of Achievement Organization Chart Town Officials II. FINANCIAL SECTION Independent Auditor's Report A. MANAGEMENT'S DISCUSSION AND ANALYSIS B. BASIC FINANCIAL STATEMENTS Government -Wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Governmental Funds Financial Statements Balance Sheet Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position Statement of Revenues, Expenditures, and Changes in Fund Balance Reconciliation of the Statement of Revenues, Expendituresand Changes in Fund Balances of Governmental Funds to the Statement of Activities Proprietary Funds Financial Statements Statement of Net Position Statement of Revenues, Expenses, and Changes in Net Position Statement of Cash Flows Discretely Presented Component Units Financial Statements Combining Statement of Net Position Combining Statement of Activities Notes to the Basic Financial Statements C. REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual- General Fund Schedule of Revenues, Expentitures and Changes in Fund Balance - Budget and Actual - Westlake Academy Notes to Required Supplementary Information Schedule of Funding Progress - Texas Municipal Retirement System D. COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Major Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Debt Service Fund Nonmajor Governmental Funds Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund Balance Exhibit Page i viii ix x 1 4 A-1 17 A-2 18 A-3 20 A-4 22 A-5 23 A-6 25 A-7 26 A-8 27 A-9 28 A-10 29 A-11 31 33 B-1 69 B-2 70 71 B-3 72 C-1 73 C-2 75 C-3 76 Table of Contents - Continued Exhibit Page Nonmajor Special Revenue Funds Budgetary Comparison Schedules Visitors Association Fund C-4 77 Lone Star Public Facilities Corporation Fund C-5 78 Economic Development Fund C-6 79 4B Economic Development Corporation Fund C-7 80 III. STATISTICAL SECTION Exhibit Net Position By Component S-1 82 Changes in Net Position S-2 83 Fund Balances, Governmental Funds S-3 85 Changes in Fund Balances, Governmental Funds S-4 86 Assessed Value and Estimated Actual Value of Taxable Property S-5 88 Principal Property Tax Payers S-6 89 Property Tax Levies and Collections S-7 90 Direct and Overlapping Property Tax Rates S-8 91 Taxable Sales by Industry Type S-9 92 Ratios of General Bonded Debt Outstanding S-10 93 Ratios of Outstanding Debt by Type S-11 94 Direct and Overlapping Governmental Activities Debt S-12 95 Demographic and Economic Statistics S-13 96 Principal Employers S-14 97 Full -Time Equivalent City Government Employees by Function/Program S-15 98 Operating Indicators by Function/Program S-16 99 Capital Asset Statistics by Function/Program S-17 100 Town of Westlake February 17, 2015 Honorable Mayor, Council Members and the Citizens of the Town of Westlake, The Town of Westlake (the "Town") Fiscal and Budgetary Policies require that the Town's Finance Department prepare a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Accordingly, the Comprehensive Annual Financial Report (CAFR) for the Town of Westlake, Texas for the fiscal year ended September 30, 2014, is hereby issued. This report consists of management's representations concerning the finances of the Town. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making representations, the Town established a comprehensive internal control framework that was designed both to protect the Town's assets from loss, theft or misuse and to compile sufficient reliable information for the preparation of the Town's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the Town'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 misstatements. 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 Town's financial statements have been audited by Weaver and Tidwell, L.L.P. The goal of the independent audit was to provide reasonable assurance that the financial statements of the Town for the fiscal year ended September 30, 2014, were free of material misstatements. The independent audit involved examining, on a test basis, evidence supporting the amounts 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 unmodified opinion that the Town's financial statements for the fiscal year ended September 30, 2014, were fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the financial section of this report. This report is presented in three sections: Introductory, Financial and Statistical. The Introductory Section includes this transmittal letter, the prior year GFOA Certificate of Achievement, a listing of Town Officials, and an organizational chart of the Town. The Financial Section includes the independent auditor's report on the basic financial statements, Management's Discussion and Analysis (MD&A), basic financial statements, the notes to the basic financial statements, and combining and individual fund statements and schedules. The MD&A is a narrative introduction, containing overview and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement, and should be read in conjunction with the MD&A. The Town of Westlake's MD&A can be found immediately following the independent auditor's report. The Statistical Section includes financial and demographic information relevant to readers of the Town's financial statements. The statistical data is generally presented on a multi-year basis. Profile of the Town Minutes from downtown Fort Worth, Texas and Dr International Airport, the Town of Westlake is home to several upscale residential communities and Fortune 500 companies, all of which share a unique character and charm, along with a commitment to excellence. The Town is located in northeast Tarrant County and may be conveniently accessed by several major thoroughfares, including SH 114 and US 377. The Town occupies approximately 7 square miles and serves a population of approximately appraised home value of $1.2 million. 1,100 with an average The Town, incorporated in 1956, is considered a Type A general -law municipality. The Town operates under the Council -Manager form of government. The Council is comprised of a mayor and five (5) council members and is responsible for, among other things, passing ordinances, adopting the budget, appointing committees, and hiring the Town Manager. The Town Manager is responsible for carrying out the policies and ordinances of the Council, for overseeing the day-to-day operations of the Town and appointing and supervising heads of various departments. The Mayor and Town Council members serve two (2) year terms. All elected officials are elected at -large. The financial reporting entity (the government) includes all funds of the primary government (i.e. the Town of Westlake), as well as all of its component units. Component units are legally separate entities for which the primary government is financially accountable. The following entities are considered blended component units: Lone Star Public Facilities Corporation is a Texas nonprofit corporation that acts on behalf of the Town to further the public purposes under the Public Facilities Corporation Act, as it's duly constituted authority and instrumentality. The board of directors, appointed by the Town's governing body, is comprised of seven members, of whom five must be members of the Town's governing body. 4B Economic Development Corporation is a Texas nonprofit industrial corporation under the Development Corporation Act of 1979 formed to promote economic development within the Town and the State of Texas in order to eliminate unemployment and underemployment, and to promote and encourage employment and the public welfare of, for, and on behalf of the Town by developing, implementing, financing, and providing one or more projects defined and permitted under Section 4B of the Act. The board of directors is composed of seven persons appointed by the members of the Town's governing board. Four of the members of the board of directors are members of the Town's governing board. Westlake Academy (Academy) is an open -enrollment charter school, as provided by Subchapter D, Chapter 12, of the Texas Education Code. The Town of Westlake ("Charter Holder") applied for and became the first municipality in Texas to ever receive this special charter designation. The Academy had 658 students in FY 13-14 and serves Kindergarten through 12th grade. The Academy graduated their first class in FY 09-10. The Board consists of six (6) trustees and is appointed by the Town's governing body. Currently, all members of the board of trustees are members of the Town's governing body. The Academy's year-end is August 31. Discretely presented component units are legally separate entities and not part of the primary government's operations. These component units are as follows: Texas Student Housing Authority - Ballpark Austin Project, Texas Student Housing Authority -The Ridge at North Texas, Texas Student Housing Authority -Town Lake Austin Project, Texas Student Housing Authority -Cambridge at College Station, and Texas Student Housing Authority. Services Provided The Town provides to its citizens those services that have proven to be necessary and meaningful and which the Town can provide for the least amount of cost. Major services provided under the general government and enterprise functions are: Fire and emergency medical services, police, water and sewer utility services, park and recreational facilities, street improvements, education and administrative services. The Town utilizes a combination of direct service delivery along with out- sourced services in its service delivery mix. The decision as to which service to deliver directly versus out -sourcing is based on analysis of cost-effectiveness, citizen responsiveness, and customer service quality. Economic Conditions and Outlook The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the environment within which the Town operates. Local Economy The Town staff is aware that the Town of Westlake does not create wealth, but instead, is entrusted with public dollars collected on behalf of our citizens. We are stewards who are fully vested in the success of the Town of Westlake and Westlake Academy. We exist as a municipal corporation for one reason and one reason only: to prioritize and deliver the best services possible with the resources provided to achieve an exceptional quality of life. This is a challenge the staff takes very seriously, one that we pursue with vigor every day. Over the previous fiscal year, the Town has achieved and/or is continuing to work toward important initiatives and projects that will allow us to balance our "distinctive development, trails, and quality of life amenities amidst an ever expanding urban landscape." These include: Achievement and recognition for our transparency efforts and our fiscal stewardship through receipt of the following: o Distinguished Budget Presentation Award from the Governmental Finance Officers Association (GFOA) marking the 7th year in a row that we have received this honor for our municipal budget and the 5th year for our educational services budget (Westlake Academy). o International Award for Budget Excellence from the Association of School Business Officials International for the past five years. o Certificate of Achievement for Excellence in Financial Reporting for our Comprehensive Annual Financial Report (CAFR), also known as the annual audit, which has also been recognized through GFOA for the last seven years. o Award for Outstanding Achievement in Popular Annual Financial Reporting (PAFR), by converting much of the CAFR document into an easy -to -read format for our residents. This was the Town's second year to achieve this award. • Invested in an update of our current Comprehensive Planning document as we began working with the Town Council, residents, and appointed steering committee members to memorialize our community vision in the new document. Our current version was compiled in 1992 and many changes have occurred since that time. Progress continues through the facilitation efforts of an outside consultant and the committee with the final completion planned for FY 2014-15. ® Invested in the third iteration of our strategic plan through the use of the Balanced Scorecard system. Council members worked with an outside consultant to create strategic themes and updated our vision, mission, and values statements for Westlake. Staff then identified outcome objectives, created a Tier One Strategy Map, and developed performance measures for Council adoption. 4� Invested in the Town's open enrollment charter school as Westlake Academy, completed its 1 lth year of operation and graduated our 5th class of seniors with 53 students. o Westlake Academy continues to have excellent academic and extra -curricular results and is ranked among the best high schools in America: Washington Post ranked us as 36th out of 1,900 schools across the nation. Invested in the Town's CIP ($10.5M) mainly through focus on the expansion of our physical plant at Westlake Academy ($8.2). o Invested approximately $1.6M in streetscape improvements on FM 1938 (Davis Blvd) with median plantings and sidewalk installation, which is now in its final stages of completion. o Invested a total of $500K in the Town's infrastructure through enhancements on SH 114/170 in partnership with our surrounding communities for bridge and overpass paintings, plantings in medians and entry monuments. ® Installation of a secondary ground storage water tank for future sustainability and service provision levels. FY 2014-15 Short Term Trends and Planning Over the history of our Town, municipal budgets have been prepared with an eye toward being fiscally conservative, while providing the high quality customer service that our residents have come to expect in Westlake. As a component of our budgets, we also identify current trends to be stewards of our community. Some of these factors can be found below: Reinvestment in our community through the replacement of our fire pumper truck during the coming fiscal year. As our rolling stock continues to age, we will need to reinvest in our assets in order to maintain the exceptional levels of service we strive to deliver. The replacement truck will allow us to rotate the current vehicle to a back-up status as it is experiencing multiple repair events. iv C Housing Start Increases: Westlake is expecting continued single family residential construction as a result of Granada. This is depicted in the side -chart — prerecession starts were at 38 per year and we are estimating 50 for the coming fiscal year. Number of Housing Starts 10 12 40 M FY FY FY FY FY FY Permanent Population Growth: The North Central o9/1n 10/11 11/12 12/13 13/14 14/16 do Council of Governments has updated Westlake's 2010 Census from 992 to 1,051. This is the portion of our population that is considered to be our permanent residence. An increase in population of 210 in 1990 to the present 1,051 represents a 400% increase. Daytime Population: Because Westlake is the home of many major corporate office campuses, its Monday -Friday daytime population swells to approximately 10,000 - 12,000 individuals. These office complexes are comprised of notable corporate clients that include Deloitte LLP, Core Logic and Fidelity Investments. Staff will continue to monitor our corporate stakeholders and attempt to identify avenues to strengthen these relationships and assist in drawing Number of Westlake Students z 274 d A k tl Wesae Academy new corporations to Westlake. in 215 o Continued Impact of Westlake Academy on Residential Growth: The number of Westlake residents who are selecting Westlake Academy as the educational choice for the students has doubled in the past five years. Resident surveys indicate that the Academy is 155 164 FY FY FY FY FY FY 09/10 10/11 11/12 12/13 13/14 14/1s one of the main reasons they moved to Westlake, and why they plan to remain in our community. o Increase in Westlake Academy Overall Enrollment: The Academy has experienced steady enrollment growth from 491 in SY 2009-10 to a projected 822 in SY 2014-15. The current increase of student population is a result of the Phase I expansion efforts on the Academy campus. We are completing the construction of three buildings that will accommodate the new students. The lottery waiting list for admissions continues to grow from 700 in 2010 to over 2,100 students for this coming school year. Waiting List for Westlake Academy 2079 2177 12f5 � g�4 705 FY FY FY FY FY FY 08/09 09/10 10/11 11/12 12/13 13/14 Completion of Phase I Facility Improvements: Construction will be complete and operational for the fall school year. The approximately 39,000 sq. ft. of new facilities comprised of a secondary classroom building, field house, and primary years' multi -use building will allow for decompression of our current facilities. ® Continued work on the Comprehensive Plan: The Town's current 1992 Comprehensive Plan is in the process of review and updating. The Comprehensive Plan serves as the "blue print" for planning and growth. We have convened a steering committee and held public meetings to discuss the plan elements and expect to be complete within the current fiscal year. V Continued emphasis on long-range financial planning: The FY14-15 budget contains an updated Long -Range Financial Forecast which identifies key revenue and expenditure drivers while assessing historical financial trends and their potential impact upon the town's financial stability. Staff continues to produce a quarterly financial report for the Town Council that monitors and analyzes trends in the General Fund, Utility Fund, and Visitor Association Fund. The report serves as a tool to assist in developing a proactive, instead of reactive, approach to changing financial trends. Continue to explore new ways to combat spiraling health care costs: Costs have been increasing at an unsustainable level of 10 to 25% per year, and employee plan design changes are inevitable. Recently a comprehensive evaluation of the Town's health insurance costs was conducted and ultimately the decision was made to continue with Blue Cross Blue Shield. Long Term Visioning for FY 2014-2015 and Beyond Long range planning and visioning is vital to the sustainability of any community and Westlake has a bright outlook for our future — much of this based on our governing board, residential commitment to our Town and the diligence of our staff members. The following trends will be important to our growth and development: o Continued Permanent Population Growth - We anticipate the trend toward growth will continue as our existing lot inventory continues to be a scarce commodity. In addition, the aforementioned residential and mixed-use developments have the potential to significantly increase our permanent population. Management of Development — As the economy and the surrounding cities in the Metroplex experience commercial development and the influx of individuals continues to make the North Texas Region their home, we will need to manage our distinctive housing developments to ensure we maintain our community as an `oasis of natural beauty' as contained in our Vision statement. Implementation of the Comprehensive Plan — As mentioned in the short term trends, the Town will complete the updating of our Comp Plan and will transition into the application phase of the recommendations and feedback from our Comprehensive Plan Steering Committee, residents and stakeholders, Planning & Zoning Committee Members, and our Town Council. This will include the update of the applicable ordinance documents that will help guide our future developments and all the corresponding plan elements. ® Oversight of Enrollment Demands at Westlake Academy — As it becomes necessary with the rollout of Phase II of the Facility Master Plan, staff and the Council will plan for our long term visioning of the school to ensure each child reaches their `highest individual potential' as a student at Westlake Academy. The impact of new housing developments and population growth will continue to drive our capital projects in the future. Users of this document, as well as others interested in the programs and services offered by the Town of Westlake, are encouraged to read the Town's Fiscal Year 2014-2015 Budget. The budget details the Town's long-term goals and financial policies, and describes program accomplishments and initiatives. Vi Other Information The Government Finance Officers Association of the United States of America and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Town of Westlake for its comprehensive annual financial report (CAFR) for the fiscal year ended September 30, 2013. This was the seventh year the Town has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report (CAFR) continues to meet the Certificate of Achievement Program's requirements and we are submitting it to GFOA to determine its eligibility for another certificate. In addition, we also received our seventh GFOA Distinguished Budget Presentation Award for the fiscal year beginning October 1, 2013 for our municipal budget and the 5th year for our educational services budget for Westlake Academy, a component unit of the Town. In order to qualify for the Distinguished Budget Presentation Award, the Town and Academy budget documents had to be judged proficient as a policy document, a financial plan, an operations guide, and a communications device. Westlake Academy has also received recognition from the Association of School Business Officials International as a recipient of the International Award for Budget Excellence for the past five years. The Finance Department received its second Popular Annual Financial Report (PAFR) converting much of the FY 2012-2013 audit document into an easy -to -read format for our residents. The goal is to encourage resident awareness as it relates to Town finances through the condensed version of the budget. The report provides an "overview of our financial position and policies, and conveys our commitment to delivering responsive services and programs in a fiscally responsible manner." Acknowledgements The preparation of this report could not be accomplished without the efficient and dedicated services of the entire staff of the Finance Department. Appreciation is expressed to Town employees throughout the organization, especially those employees who were instrumental in the successful completion of this report. The staff would also like to thank the Mayor and Town Council for their conservative leadership and their support in planning and conducting the financial operations of the Town in a responsible and progressive manner. Respectfully Submitted, Tom Brymer Town Manager Vii Debbie Piper, CPA Finance Director Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Town of Westlake Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2013 Executive Director/CED Town Attorney Executive Principal DirecturofEducatian Asst Fri napal Athletic Director Directarof Cu rric ul urn A t—tr—tinn Uoo rd in ator Ad,nWn tati+c StafF Nurse PYP Primary Principal Ccc:-d'ro'Y_- rd.0 .113GOC Tcsec9�c-s MYP Secondary Principal MA'R �i6af4�8lit0. �r Tead�crs Town Secretary Communications Ccrnmwiicat;an Planning,& Development/ 8uiIdinglnspactor Human Resources 'ac�r.st Information Technology WA'shnura— P'ol ice Services ycurtrade� ]Fxr: tYe etv a ��1 Executive Director ( WA Foundation I Assism.t Texas Studarrt Housing Assistant Tcmm Manager tntrn -t AdmeetcsBamar Jude Mar -.hat Y Twa ISCal Co -t 0-k. IX Public Wades ra�.1.3iVlier �]ed4!Ge Cmudese t- 1331 ediaua3n C—t xrrce R.w--P W- 1331 Finance M—fdw Service Excellence Public Service that is Responsive and Professional, while balancing Effidency, Effectiveness and Financial Stewardship Exemplary Governance Facilities Maintenance Town Ofi`i€rail, f Parks& R42 creation Bath Elected and App—dented, c_s--Tt- E's ra I Exhibit Respect,. 0-6—t..- 5331 , eclnn c:m JI Stewardship, -ce A.�r�t — {331 Transpare'I' y Public Wades ra�.1.3iVlier �]ed4!Ge Cmudese t- 1331 ediaua3n C—t xrrce R.w--P W- 1331 Finance M—fdw Service Excellence Public Service that is Responsive and Professional, while balancing Effidency, Effectiveness and Financial Stewardship TOWN OF WESTLAKE ELECTED AND APPOINTED OFFICIALS September 30, 2014 Laura Carol Michael Rick Alesa Wayne Wheat Langdon Barrett Rennhack Belvedere Stoltenberg ELECTED OFFICIALS Mayor LAURA WHEAT Mayor Pro -Tem CAROL LANGDON Council Member MICHAEL BARRETT Council Member RICK RENNHANK Council Member ALESA BELVEDERE Council Member WAYNE STOLTENBERG APPOINTED OFFICIALS TOM BRYMER Town Manager AMANDA DEGAN, MPA Assistant Town Manager DEBBIE PIPER, CPA Finance Director EDDIE EDWARDS Director of Planning and Development JARROD GREENWOOD Director of Public Works TROY MEYER Facilities/ Parks and Recreation Director x GINGER AWTRY Director of Communications and Community Affairs KELLY EDWARDS, TRMC Town Secretary TODD WOOD, SPHR, IPMA-CP Director of Human Resources and Administrative Services RICHARD WHITTEN Fire Chief JASON POWER Director of Information Technology FINANCIAL SECTION TOWN OF WESTLAKE Y1f 4 ave.+ r.or- INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of Town Council Town of Westlake, Texas Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the Town of Westlake (the Town) as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the Town's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. AN INDEPENDENT MEMBER OF WEAVER AND TIDWELL, L.L.P. 12221 MERIT DRIVE, SUITE 1400, DALLAS, TX 75251 BAKER TILLY INTERNATIONAL CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS P: 972.490.1970 F: 972.702.8321 Town of Westlake, Texas Page 2 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the Town, as of September 30, 2014, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Emphasis of Matter Regarding Going Concern The accompanying financial statements have been prepared assuming the discretely presented component units will continue as going concerns. As discussed in Note 16 to the financial statements, the discretely presented component units are in default on their bonds due to failure to meet certain bond covenants. This gives bond holders the right to accelerate and demand payment on the bonds in full. This condition raises substantial doubt about the discretely presented component units' ability to continue as going concerns. Management's plans regarding these matters are also described in Note 16. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter. Change in Accounting Principle As discussed in Note 15 to the financial statements, the Town adopted new accounting guidance, GASB Statement No. 65, "Items Previously Reported as Assets and Liabilities," in 2014. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 16 and budgetary comparison information and schedule of funding progress on pages 69 through 72 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 2 Town of Westlake, Texas Page 3 Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town's basic financial statements. The introductory section, combining and individual fund financial statements and schedules, and statistical section, are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual fund statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 17, 2015 on our consideration of the Town's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Town's internal control over financial reporting and compliance. WEAVER AND TIDWELL, L.L.P. Dallas, Texas February 17, 2015 TOWN OF WESTLAKE MANAGEMENT'S DISCUSSION AND ANALYSIS TOWN OF WESTLAKE MANAGEMENT'S DISCUSSION AND ANALYSIS Management of the Town of Westlake offers the readers of the Town's financial statements this narrative overview and analysis of the financial activities and financial position of the Town for the fiscal year ended September 30, 2014. Financial reporting is limited in its ability to provide the "big picture" but rather focuses on financial position and changes in financial position. In other words; are revenues and/or expenditures higher or lower than the previous year? Has the net position (containing both short- term and long-term assets and liabilities) or fund balances (the current "spendable" assets less current liabilities") of the government been maintained? Readers are encouraged to consider the information presented here in conjunction with the additional information furnished in the letter of transmittal (pages i -vii of this report) and the statistical section (pages 82- 100 of this report) as well as information in the annual operating budget, along with other community information found on the town's website at www.westlake-tx.org. It should be noted that the Independent Auditor's Report describes the auditors' association with the various sections of this report and that all of the additional information from the website and other Town sources are unaudited. FINANCIAL HIGHLIGHTS The assets of the Town exceeded its liabilities at the close of the most recent fiscal year by $38,885,361 (Net position). This number must be viewed within the context that the vast majority of the Town's net position of $38,783,405 (99.7%) are capital assets and that most capital assets in a government entity do not directly generate revenue nor can they be sold to generate liquid capital. The net position restricted for specific purposes totaled $2,284,947 (5.9%). The remaining deficit, (-5.6%), represents unrestricted net position. • As of the close of the current fiscal year, the Town of Westlake's governmental funds reported combined ending fund balances of $11,887,640, which is a decrease of $7,556,007 in comparison with the prior year. Within this total, $4,216,467 is non -spendable, restricted, committed or assigned by management or council. • At the end of the current fiscal year, fund balance for the general fund was $7,953,518, an increase of $901,887 in comparison with the prior year. Of this total fund balance, $7,671,173 is unassigned. This represents 153% of the total general fund expenditures and is equivalent to 530 operating days. • The Town's capital assets (net of accumulated depreciation) increased by $10,063,397. This is primarily attributed to the completion of the Westlake Academy Expansion project which includes a multi-purpose building, three story secondary school building and a field house. • The Town's long-term debt decreased by $336,724 in total, due to the issuance of General Obligation Refunding Bonds, Series 2014, offset by the scheduled repayment of principal on outstanding bonded debt. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the Town's basic financial statements. The Town's basic financial statements are comprised of the following three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains supplementary information in addition to the basic financial statements themselves. 4 Government -wide financial statements The government -wide financial statements are designed to provide readers with a broad overview of the Town's finances, in a manner similar to a private -sector business. The government -wide financial statements are prepared utilizing the economic resources measurement focus and the accrual basis of accounting. The statement of net position presents information on all of the Town's assets and liabilities with the difference between the two reported as net position. Over time, increases or decreases in the Town's net position serves as a useful indicator of whether the financial position of the Town is improving or weakening. The statement of activities presents information showing how the government's net position changed during the most recent fiscal year. All of the revenues and expenses are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. Both of the government -wide financial statements distinguish functions of the Town that are principally supported by sales taxes, property taxes, and intergovernmental revenues (governmental activities) from other 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 Town include general government, public safety, culture and recreation, economic development, public works, visitor services and education. The business -type activities of the Town include water/sewer and cemetery. The government -wide financial statements include not only the Town (known as the primary government), but also discretely presented component units including all of the Texas Student Housing entities. Financial information for these component units is reported separately from the financial information presented for the primary government itself. See pages 29- 32 of the "Financial Section" for detail on these entities. In addition, the Town has the following blended component units: Lone Star Public Facilities Corporation, 4B Economic Development Corporation, and Westlake Academy, an open enrollment charter school owned and operated by the Town of Westlake. Fund Financial Statements A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The Town, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Below are the three types of funds. The Town had only Governmental and Proprietary funds for the year ended September 30, 2014. Governmental funds - Governmental funds are used to account for essentially the same functions reported as government activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial requirements. 5 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, the reader may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Town maintains nine individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General, Westlake Academy, Debt Service, Capital Projects, and Westlake Academy Expansion funds, all of which are presented as major funds. Data from the other funds (Visitors Association, Economic Development, Lone Star Public Facilities Corporation and Westlake 4B Economic Development Corporation) are combined into a single, aggregate 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 Town adopts an annual appropriated budget for all funds, except the Capital Projects and Westlake Academy Expansion funds which are project -length based budgets. A budgetary comparison statement has been provided for all appropriate funds to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 20 - 25 of this report. Proprietary funds - There are two types of proprietary funds, Enterprise Funds and Internal Service Funds. An Enterprise Fund is the only proprietary fund currently maintained by the Town. Enterprise funds are used to report the same functions presented as business -type activities in the government - wide financial statements. The Town uses enterprise funds to account for its water and sewer activities and its cemetery activities. All activities associated with providing such services are accounted for in this fund, including administration, operation, maintenance, debt service, capital improvements, billing and collection. The Town's intent is that costs of providing the services to the general public on a continuing basis is financed through user based charges in a manner similar to a private enterprise. The Town has no Internal Service Funds (fund to report activities that provide supplies and services for the Town's other programs and activities, i.e. self-insurance and fleet management). The basic proprietary fund financial statements can be found on pages 26 - 28 on this report. Fiduciary funds - Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the Town's own programs. The accounting used for fiduciary funds is similar to the accounting used for proprietary funds. The Town of Westlake does not currently have any fiduciary funds. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 33 - 68 of this report. M Other information. In addition to the basic financial statements and accompanying notes, this report also presents schedules that further support the information in the financial statements. The schedules are presented immediately following the notes to the financial statements and can be found on pages 69-80. GOVERNMENT -WIDE FINANCIAL ANALYSIS As noted earlier, net position may serve over time as a useful indicator of the government's financial position. In the case of the Town, assets exceeded liabilities by $38,885,361 at the close of the most recent fiscal year. The Town's combined net position changed from a year ago, increasing $1,068,328 from $37,817,033 to $38,885,361. Our analysis below focuses on the net position (Table 1) and changes in net position (Table 2) of the Town's governmental and business -type activities. The largest portion of the Town's net position, $38,783,405 (99.7%), reflects its investment in capital assets (e.g. land, buildings, equipment, improvements, construction in progress, and infrastructure), less any debt used to acquire capital assets still outstanding. The Town uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the Town'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. An additional portion of the Town's net position, $2,284,947 (5.6%), represents resources that are subject to external or internal restrictions on how they may be used. The remaining balance reflects a deficit unrestricted net position of -$2,182,991 (-5.3%). Table 1 Condensed Statement of Net Position At September 30, 2014 and 2013 7 Governmental Activities Business -type Activities Total 2014 2013 2014 2013 2014 2013 Assets Current and other assets $ 14,197,535 $ 21,781,962 $ 5,210,808 $ 5,987,119 $ 19,408,343 $ 27,769,081 Capital assets 50,205,686 41,121,883 13,102,835 12,123,241 63,308,521 53,245,124 Total Assets $ 64,403,221 $ 62,903,845 $ 18,313,643 $ 18,110,360 $ 82,716,864 $ 81,014,205 Deferred outflows of resources 1,194,749 1,247,851 1,194,749 1,247,851 Liabilities Noncurrent liabilities 29,866,622 27,611,536 6,389,337 6,485,445 $ 36,255,959 $ 34,096,981 Other liabilities 2,308,387 1,986,917 6,461,906 5,865,423 8,770,293 7,852,340 Total Liabilities 32,175,009 29,598,453 12,851,243 12,350,868 $ 45,026,252 $ 41,949,321 Net Position Net investments in capital assets 32,048,991 21,177,426 6,734,414 6,601,949 $ 38,783,405 $ 27,779,375 Restricted 2,284,947 4,242,491 - - 2,284,947 4,242,491 Unrestricted (910,977) 6,637,624 (1,272,014) (842,457) (2,182,991) 5,795,167 Total Net Position $ 33,422,961 $ 32,057,541 $ 5,462,400 $ 5,759,492 $ 38,885,361 $ 37,817,033 7 Table 2 Changes in Net Position For the years ended September 30, 2014 and September 30, 2013 0 Governmental Activities Business -type Activities Total 2014 2013 2014 2013 2014 2013 Revenues: Program revenues Fees, fines and charges for services $ 2,127,786 $ 1,798,529 $ 3,436,451 $ 3,162,842 $ 5,564,237 $ 4,961,371 Operating grant and contributions 6,592,642 4,907,472 - - 6,592,642 4,907,472 Capital grants and contributions 80,472 5,897,456 80,472 5,897,456 General revenues Taxes Sales taxes 4,725,845 4,375,397 4,725,845 4,375,397 Property taxes 1,367,069 1,366,633 1,367,069 1,366,633 Hotel occupancy taxes 796,481 709,578 796,481 709,578 Mixed beverage taxes 51,602 39,727 51,602 39,727 Franchise taxes 795,322 734,935 - - 795,322 734,935 Interest on investments 26,713 24,218 7,114 6,552 33,827 30,770 Miscellaneous 246,633 1,023,149 224,995 246,633 1,248,144 Total revenues 16,810,565 20,877,094 3,443,565 3,394,389 $ 20,254,130 $ 24,271,483 Expenses: General governmental 2,784,587 2,606,785 - - 2,784,587 2,606,785 Public saftey 2,190,050 1,978,803 2,190,050 1,978,803 Culture and recreation 123,541 113,924 123,541 113,924 Economic development 147,680 232,215 147,680 232,215 Public works 955,794 626,423 955,794 626,423 Visitor services 493,087 521,521 493,087 521,521 Education 7,147,411 5,803,611 7,147,411 5,803,611 Interest on long-term debt 998,951 1,067,086 - - 998,951 1,067,086 Water and sewer - - 3,690,137 3,356,466 3,690,137 3,356,466 Cemetery 7,121 5,328 7,121 5,328 Total expenses 14,841,101 12,950,368 3,697,258 3,361,794 18,538,359 16,312,162 Increase(decrease)in net position before transfers 1,969,464 7,926,726 (253,693) 32,595 1,715,771 7,959,321 Transfers 43,399 (485,591) (43,399) 485,591 Change in net position 2,012,863 7,441,135 (297,092) 518,186 1,715,771 7,959,321 Net position, beginning as previously stated 32,057,541 24,616,406 5,759,492 5,241,306 37,817,033 29,857,712 Cumulative effect of a change in accounting principle (647,443) (647,443) Net position, ending $ 33,422,961 $ 32,057,541 $ 5,462,400 $ 5,759,492 $ 38,885,361 $ 37,817,033 0 Governmental activities: Governmental activities increased the Town's net position by $1,365,420 (4.3%), increasing net position from $32,057,541 to $33,422,961. Unrestricted net position, the part of net position that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation, other legal requirements, and/or Council or management's decision, decreased by $7,547,853. Total revenues for governmental activities decreased by $4,066,529 when compared to the prior year. General revenue had a decrease of $263,972, while program revenues had a decrease of $3,802,557. Program revenues • Fees, fines and charges for services increased by $329,257 which was primarily due to an increase of building permits/fees related to Granada and Entrada. • Operating Grants and Contributions increased by $1,685,170 primarily due to the increase at Westlake Academy regarding additional state funding as a result of increased enrollment and increased grant revenues from Westlake Academy Foundation and Hudson Foundation. In the prior year these revenues were recognized in "Miscellaneous." • Capital Grants and Contributions decreased by $5,816,984. o The following amounts were received in the prior year which was offset by a contribution of funds to purchase health and fitness equipment for the new field house at Westlake Academy: o $4,665,818 materials/work was contributed by Hillwood Properties related to Dove and JT Ottinger Road. o $1,000,000 contribution for the Westlake Academy Expansion Project. o $149,622 from Roanoke and Trophy Club for Hwy 114/170 enhancements. o $82,016 from Fidelity for FM 1938 landscape enhancements (median). General revenues - Decrease of $263,972 was primarily made up of the following components: • Sales tax increased by $350,447 which appears to be attributed to the continued improvement in the local economy as well as several new technology and professional related companies and several one-time payments related to purchases and/or construction. • Hotel occupancy taxes increased by $86,903 which now includes receipts from Deloitte University. • Franchise Fees increased by $60,387 with permits and fees increasing by $205,341 due to an upswing in construction as well as Granada and Entrada permits. • Decrease in Miscellaneous of $715,211 is primarily due to the reclassification of Westlake Academy revenues to "Operating grants and contributions" offset by revenues received in the Westlake Academy Expansion Fund. Expenses • Total expenses for governmental activities increased by $1,890,733 or approximately 15%. The increase is made up of several components. The majority of the total increase, $1,343,800, was due to the education expenditures related to Westlake Academy. Additional students were enrolled; therefore, more staff was needed. With the anticipation of three new buildings opening in SY 2014-2015, additional supplies, etc. were needed to get the classrooms ready to begin the new school year. Additional payroll costs of $228,866 were based on a 3% increase as well as $115K market adjustments and the addition of one -full time lieutenant and Human Resources generalist. Contracted services increased due to the comprehensive plan update. 9 Business -type Activities: The net position of our business -type activities ended fiscal year 2014 at $5,462,400 compared with $5,759,492 in 2013. This represents a decrease in net position of $297,092, or 5% less than the prior fiscal year. Revenues of the Town's business -type activities were $3,443,565 for the fiscal year ending September 30, 2014. Revenues increased $49,176 or 1% more than the prior year. Operating expenses for the business -type activities were $3,697,258 for the year, an increase of $335,464 or 10%. The business -type activities also had net transfers out of $43,399 in 2014 compared to net transfers in of $485,591 in the prior year. The resulting decrease in net position is due to several factors, including the following: Increase in Charges for Services was $273,609. This 8% increase was largely realized because FY 13/14 was drier than normal resulting in increased water billing revenues. Also, the TRA Wastewater Settle -up was $178,082 greater than the prior year. The Town's increase in expenses of $335,464 is attributed to the additional water purchases experienced during the dry weather months, increased payroll operating costs and $213,525 expense due to the Hwy 114 Lift Station Discharge project. The General Fund transferred $500K to the Utility Fund to supplement the $1 M bond proceeds received for the construction of the Town's second water storage tank in the prior year; therefore, there was a decrease in net transfers. FINANCIAL ANALYSIS OF THE TOWN'S FUNDS As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds. The focus of the Town's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Town's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a town's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Town's governmental funds reported combined ending fund balances of $11,887,640; a decrease of $7,556,007 in comparison with the prior year. Approximately 64.5% of this total $7,671,173) constitutes unassigned fund balance, which is available for spending at the government's discretion. The remainder of fund balance is nonspendable, restricted, committed or assigned to indicate that it is not available for new spending because it has already been committed. The following tables present a summary of general, special revenue, capital project, and debt service fund revenues and expenditures for the fiscal year ended September 30, 2014, and the amount and percentage of increases and decreases in relation to the prior year. 10 Revenues Taxes Table 3 Summary of Governmental Funds Revenues Increase Percent 2013-14 Percent (Decrease) Increase Amount Of Total From 2012/13 (Decrease) Sales taxes $ 4,725,845 28.2% $ 350,448 Property taxes 1,353,356 8.1% (13,187) Hotel occupancy taxes 51,602 0.3% 11,875 Mixed beverage taxes 796,481 4.8% 86,903 Franchise taxes 795,322 4.7% 60,387 Subtotal - Taxes 7,722,606 46.1% 496,426 State program 5,269,641 31.5% 573,101 Federal program 80,103 0.5% (1,855) Interest income 26,713 0.2% 2,495 Building permits and fees 1,175,075 7.0% 205,340 Fines and penalties 730,441 4.4% 35,274 Intergovernmental 3,540 0.0% (6,791) Contributions 82,446 0.5% (5,833,568) Miscellaneous 1,661,463 9.9% 381,009 Total Revenues $ 16,752,028 100.0% $ (4,148,569) Table 4 Summary of Governmental Funds Expenditures 2013-14 Expenditures Amount General government $ 2,236,360 Public safety 2,146,587 Culture and recreation 123,541 Economic development 147,685 Public works 615,781 Visitor services 493,082 Education 7,143,678 Capital outlay 9,964,047 Debt services 2,190,449 Total Expenditures $ 25,061,210 11 8.0% -1.0% 29.9% 12.2% 12.2% -2.3% 10.3% 21.2% 5.1% -65.7% -98.6% Increase Percent Percent (Decrease) Increase Of Total From 2012/13 (Decrease) 8.9% $ 325,815 17.1% 8.6% 179,003 9.1% 0.5% 9,617 8.4% 0.6% (113,122) -43.4% 2.5% 83,106 15.6% 2.0% (28,439) -5.5% 28.5% 1,340,067 23.1% 39.8% 2,362,416 31.1% 8.7% (1,816,433) -45.3% 100.0% $ 2,342,030 10.3% Below are summaries and explanations of the changes in fund balances from FY 2013 to FY 2014 of the Governmental Funds that are contained in the above totals: General Fund - Fund balance increased $901,887 (13%). Most General Fund revenue categories realized increases over the prior year and many surpassed budget estimates as well. Sales tax receipts, fines and fees, and building permits exceeded both budget and prior year. Sales taxes grew as a result of continued improvement in the local economy as well as several new technology and professional related companies and one-time payments related to purchases and/or construction. Fines and fees increases as a result of increased collections in municipal court and permits and fees increased due to increased home construction and Granada fees. Visitors Association Fund- Fund balance increased by $83,699 due to an increase in hotel occupancy tax and a savings in several expenditure accounts with the highest savings being in the Marriott marketing line -item. These expenditures relate to an agreement with the Marriott regarding incentive payments to bring businesses to the Town. Capital Projects Fund - Fund balance decreased by $1,325,744 largely due to the continuation of several street projects (FM 1938 and SH 114/Hwy 170) and the completion of the Stagecoach Hills Reconstruction/Drainage project. Westlake Academy Expansion Fund- Fund balance decreased by $7,293,786 because bond proceeds of $8.2M received in the prior year were used to complete the Westlake Academy Expansion project. Proprietary Funds. The Town's proprietary fund statements provide the same type of information found in the government -wide financial statements with greater detail. Total net position of the Proprietary Funds amounted to $5,462,400, a decrease of $297,092. Operating income totaled $508,264 which was offset by a net non-operating expenses of $761,957. A transfer in the amount of $43,399 from the General Fund to supplement the construction costs of the ground storage tank constitutes the decrease. General Fund Budgetary Highlights The General Fund budget for fiscal year 2014 was amended in total to increase the net change in fund balance from -$368,422 to -$253, a total increase of $368,169. The amended budget for net revenues was increased by $563,820(9%) o Sales Tax- $125,000- received more taxes than anticipated. o Building permits and fees - $222,500- the Town had more housing starts/permits than anticipated as well as Entrada permits that were not originally budgeted. o Franchise Fees and Fines and Forfeitures were increased by $137,120 and $75,000, respectively. • The amended budget for expenditures was increased by $48,658 with transfers out being increased by $146,003 due to the transfer of funds to Westlake Academy for the purchase of smartboards for the new classrooms. 12 The General Fund actual revenue collections were more than the amended budget by $484,327 which can be attributed to the unanticipated increase in sales tax, building permits and fees, and municipal fines and penalties received. The final expenditures were $568,077 (10%) less than budgeted. A large contributing factor to this variance is the reclassification of $192,000 from expenditures to a transfer -out to the Academy. There was also a savings on the budgeted attorney and consultant fees as a result of reimbursements regarding the Entrada/Granada developments. Savings was also seen in building inspections because we were able to use staff for more than anticipated inspections. The remaining larger savings were due to savings in contracted services and training. Capital Assets and Debt Administration Capital Assets. The Town's investment in capital assets for its governmental and business - type activities as of September 30, 2014, totaled $63,308,521 (net of accumulated depreciation). The investment in capital assets includes land, buildings, improvements, machinery and equipment, infrastructure, and construction in progress. The net increase in the Town's investment in capital assets for the current fiscal year was $10,063,397 or 19%. Nearly the entire increase ($10,302,548) is attributable to the completion of the Westlake Academy Expansion project. The remaining increase is due to the purchase of a facilities maintenance vehicle and information and software. Table 5 Town's Capital Assets (Net of Accumulated Depreciation) Additional information on the Town's capital assets can be found in Note 4 on pages 48- 51 of this report. Long-term debt- At the end of the current fiscal year, the Town had total long-term debt outstanding of $36,255,959. Of this amount, $29,304,000 represents bonded indebtedness, $65,789 economic development reimbursement, $237,378 capital leases, $371,464 in loans and $5,320,824 contractual obligations. During the fiscal year 2013-2014, the Town's total debt payable decreased by $336,724. This decrease was due to the issuance of General Obligation Refunding Bonds for the purpose of refunding Certificates of Obligation, Series 2003, plus the addition of a loan from Bennett Benner & Pettit. These amounts were offset by the scheduled repayment of principal and interest on outstanding bonded debt. 13 Governmental Activities Business -type Activities Total 2014 2013 2014 2013 2014 2013 Land $ 11,896,663 $ 11,896,663 $ - $ - $ 11,896,663 $ 11,896,663 Capital improvements 7,814,722 8,184,522 10,809,857 9,614,902 18,624,579 17,799,424 Building 27,009,853 17,611,891 27,009,853 17,611,891 Machinery and equipment 1,016,010 594,715 1,861,591 1,948,389 2,877,601 2,543,104 W/W treatments rights 185,266 217,026 185,266 217,026 Construction in progress 2,468,438 2,834,092 246,121 342,924 2,714,559 3,177,016 Total capital assets $ 50,205,686 $ 41,121,883 $ 13,102,835 $ 12,123,241 $ 63,308,521 $ 53,245,124 Additional information on the Town's capital assets can be found in Note 4 on pages 48- 51 of this report. Long-term debt- At the end of the current fiscal year, the Town had total long-term debt outstanding of $36,255,959. Of this amount, $29,304,000 represents bonded indebtedness, $65,789 economic development reimbursement, $237,378 capital leases, $371,464 in loans and $5,320,824 contractual obligations. During the fiscal year 2013-2014, the Town's total debt payable decreased by $336,724. This decrease was due to the issuance of General Obligation Refunding Bonds for the purpose of refunding Certificates of Obligation, Series 2003, plus the addition of a loan from Bennett Benner & Pettit. These amounts were offset by the scheduled repayment of principal and interest on outstanding bonded debt. 13 Standard & Poor's Ratings Services, a division of McGraw-Hill, Inc. has recently increased the Town's rate from AA to AA+/stable. Additional information about the rating agency or the significance of the rating provided may be obtained from Standard & Poor's web site. Additional information on the Town's long-term debt can be found in Note 5 on pages 51- 61. Table 6 Outstanding Debt at Year -End ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS Long range planning and visioning is vital to the sustainability of any community and Westlake has a bright outlook for our future — much of this based on our governing board, residential commitment to our Town and the diligence of our staff members. The following trends will be important to our growth and development: Continued Permanent Population Growth - We anticipate the trend toward growth will continue as our existing lot inventory continues to be a scarce commodity. In addition, the residential and mixed-use developments have the potential to significantly increase our permanent population. Management of Development — As the economy and the surrounding cities in the Metroplex experience commercial development and the influx of individuals continues to make the North Texas Region their home, we will need to manage our distinctive housing developments to ensure we maintain our community as an `oasis of natural beauty' as contained in our Vision statement. Implementation of the Comprehensive Plan — The Town will complete the updating of our Comp Plan and will transition into the application phase of the recommendations and feedback from our Comprehensive Plan Steering Committee, residents and stakeholders, Planning & Zoning Committee Members, and our Town Council. This will include the update of the applicable ordinance documents that will help guide our future developments and all the corresponding plan elements. • Oversight of Enrollment Demands at Westlake Academy — As it becomes necessary with the rollout of Phase II of the Facility Master Plan, staff and the Council will plan for our long term visioning of the school to ensure each child reaches their 'highest individual potential' as a student at Westlake Academy. The impact of new housing developments and population growth will continue to drive our capital projects in the future. 14 Governmental Activities Business -type Activities Total 2014 2013 2014 2013 2014 2013 General obligation bonds $ 18,260,000 $ 16,590,000 $ - $ - $ 18,260,000 $ 16,590,000 Certificates of obligation 10,029,800 12,596,800 1,014,200 1,025,200 11,044,000 13,622,000 Contractual obligations 65,789 96,026 5,320,824 5,412,149 5,386,613 5,508,175 Capital Lease 237,378 - - - 237,378 - Premium on bonds 744,328 700,588 33,397 34,569 777,725 735,157 Notes payable 371,464 17,420 371,464 17,420 Compensated absences 157,863 106,404 20,916 13,527 178,779 119,931 Total long-term debt $ 29,866,622 $ 30,107,238 $ 6,389,337 $ 6,485,445 $ 36,255,959 $ 36,592,683 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS Long range planning and visioning is vital to the sustainability of any community and Westlake has a bright outlook for our future — much of this based on our governing board, residential commitment to our Town and the diligence of our staff members. The following trends will be important to our growth and development: Continued Permanent Population Growth - We anticipate the trend toward growth will continue as our existing lot inventory continues to be a scarce commodity. In addition, the residential and mixed-use developments have the potential to significantly increase our permanent population. Management of Development — As the economy and the surrounding cities in the Metroplex experience commercial development and the influx of individuals continues to make the North Texas Region their home, we will need to manage our distinctive housing developments to ensure we maintain our community as an `oasis of natural beauty' as contained in our Vision statement. Implementation of the Comprehensive Plan — The Town will complete the updating of our Comp Plan and will transition into the application phase of the recommendations and feedback from our Comprehensive Plan Steering Committee, residents and stakeholders, Planning & Zoning Committee Members, and our Town Council. This will include the update of the applicable ordinance documents that will help guide our future developments and all the corresponding plan elements. • Oversight of Enrollment Demands at Westlake Academy — As it becomes necessary with the rollout of Phase II of the Facility Master Plan, staff and the Council will plan for our long term visioning of the school to ensure each child reaches their 'highest individual potential' as a student at Westlake Academy. The impact of new housing developments and population growth will continue to drive our capital projects in the future. 14 GENERALFUND In the FY 2014-15 adopted budget, the Town's General Fund balance is anticipated to decrease by $670K. • The Town is anticipating a 12% increase in revenues over the prior year by $864,475 o Increased sales tax revenue $101,250. o Permits and fees related to the Granada development $450,000. o Transfers in from Utility Fund for repayment of Ground Storage Water Tank $256,445. Increase of $557K in Payroll Expenditures. o This includes an increase in base costs of $71,394 to maintain our current staff levels along with $65,000 in market pay adjustments (inclusive of taxes and insurance) for work force attraction and $54K in performance based pay, and a newly recommended allocation of $8K for cell phone reimbursement of various staff members (Directors and on-call technicians). A portion of this increased expenditure is subsidized by transfers in from the Utility Fund ($30K) and the Visitors Association Fund ($92K). o This increase also includes the following personnel changes: ■ $35,753 — transition of part-time Communication Specialist to full-time. ■ $77,987 — addition of one full-time Firefighter / Paramedic. ■ $19,592 — replacement of part-time Deputy Court Clerk. o Transition of shared services employees to municipal budget. ■ $ 68,503 — Accounting Technician. ■ $120,860 — IT Director. o $130,144 increase for medical, dental and life Insurance costs (40%). o $16,931 increase for social security and Medicare taxes (08%). o $89,840 increase for ICMA and TMRS costs (46%). • Operating expenditures and transfers out increased $1 M. o $300K — future Westlake resident enrollment capacity. o $ 42K — increase to Keller Police contract services. o $520K — transfer to Capital Projects Fund. o $168K — transfer to Debt Service Fund. CAPITAL PROJECT FUND This fund is anticipated to have a reduction of $1.161M as a direct reflection of the construction of the following projects: • FM 1938 Streetscape Project- $1 M. • Sam School, E. Dove, and Roanoke Road Reconstruction and Drainage $819K. • Park Improvements $100K. • Land cost allocation for Fire Station $1.125M to be offset with bond proceeds. ENTERPRISE FUNDS In the FY 2014-2015 adopted budget, the Utility fund balance is anticipated to decrease by $326,435 with 88% of that being due to the sewer line transfer and meter reading equipment projects. 15 CONTACTING THE TOWN'S FINANCE DEPARTMENT This financial report is designed to provide our citizens, customers, and investors and creditors with a general overview of the Town's finances and to demonstrate the Town's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Debbie Piper, Town of Westlake Finance Director, at 817-490-5712 or email at dipper@westlake-tx.org. IN TOWN OF WESTLAKE BASIC FINANCIAL STATEMENTS TOWN OF WESTLAKE TOWN OF WESTLAKE STATEMENT OF NET POSITION SEPTEMBER 30, 2014 ASSETS Cash and cash equivalents Receivables (net of allowance) Inventories Other assets Restricted cash and cash equivalents Capital assets: Land and construction in progress Buildings and improvements Wastewater treatment rights Machinery and equipment Less accumulated depreciation Total capital assets Total Assets EXHIBIT A-1 Primary Government Discretely Governmental Business -type Presented Activities Activities Total Component Units $ 12,747,502 $ 4,083,751 $16,831,253 $ 7,192,451 1,361,094 835,361 2,196,455 491,021 - 96,986 96,986 - 88,939 - 88,939 95,747 - 194,710 194,710 4,537,817 14,365,101 246,121 14,611,222 12,070,678 43,000,030 14,882,835 57,882,865 90,899,458 - 635,199 635,199 - 3,442,120 3,498,148 6,940,268 12,895,127 (10,601,565) (6,159,468) (16,761,033) (45,193,736) 50,205,686 13,102,835 63,308,521 70,671,527 64,403,221 18,313,643 82,716,864 82,988,563 DEFERRED OUTFLOWS OF RESOURCES Deferred loss on refunding 1,194,749 Total Deferred Outflows of Resources 1.194.749 LIABILITIES Accounts payable Customer deposit payable Unearned revenue Accrued interest payable Noncurrent liabilities: Due within one year Due in more than one year Total Liabilities NET POSITION Net investment in capital assets Restricted for: Tourism Education Unrestricted Total net position The accompanying notes are an integral part of this statement. - 1,194, 749 - 1,194, 749 - 2,186,107 234,895 2,421,002 1,975,869 - 194,710 194,710 - 1,820 318,352 - 3,346,278 120,460 5,713,949 5,834,409 31,005,021 1,229,589 118,072 1,347,661 28,637,033 6,271,265 34,908,298 110, 840, 898 32,175,009 12,851,243 45,026,252 147,168,066 32,048,991 6,734,414 38,783,405 (40,169,371) 1,107,520 - 1,107,520 - 1,177,427 - 1,177,427 - (910,977) (1,272,014) (2,182,991) (24,010,132) $ 33,422,961 $ 5,462,400 $38,885,361 $ (64,179,503) 17 TOWN OF WESTLAKE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2014 ram Revenues The accompanying notes are an integral part of this statement. Change in net position NET POSITION, beginning of year as previously stated Cumulative effect of change in accounting principle NET POSITION, end of year 18 Charges for Operating Grants Capital Grants Functions/Programs Expenses Services and Contributions and Contributions Primary government: Governmental activities: General government $ 2,784,587 $ 33,975 $ - $ Public safety 2,190,050 848,772 3,540 Cultural and recreation 123,541 - 1,974 Public works 955,794 1,022,769 - Economic development 147,680 - Visitor services 493,087 - - - Education 7,147,411 222,270 6,587,128 80,472 Interest on long-term Debt 998,951 - - - Total governmental activities 14,841,101 2,127,786 6,592,642 80,472 Business -type activities: Water and sewer 3,690,137 3,428,702 - - Cemetery 7,121 7,749 - - Total business -type activities 3,697,258 3,436,451 - - Total primary government $ 18,538,359 $ 5,564,237 $ 6,592,642 $ 80,472 Reported Discretely Presented Component Units $ 24,883,936 $ 17,910,143 $ $ GENERAL REVENUES: Taxes: Sales taxes Property taxes Hotel occupancy taxes Mixed beverage taxes Franchise taxes Interest Income Miscellaneous Transfers Total general revenues and transfers The accompanying notes are an integral part of this statement. Change in net position NET POSITION, beginning of year as previously stated Cumulative effect of change in accounting principle NET POSITION, end of year 18 Net (Expense) Revenue and Changes in Net Position EXHIBIT A-2 Primary Government Discretely Governmental Business - Type Presented Activities Activities Total Component Units (2,750,612) $ $ (2,750,612) $ (1,337,738) - (1,337,738) (121,567) - (121,567) 66,975 66,975 (147,680) (147,680) (493,087) - (493,087) (257,541) (257,541) (998,951) (998,951) (6,040,201) - (6,040,201) (261,435) (261,435) - 628 628 (260,807) (260,807) - (6,040,201) (260,807) (6,301,008) - $ - $ - $ $ (6,973,793) 4,725,845 - 4,725,845 1,367,069 - 1,367,069 51,602 - 51,602 796,481 - 796,481 795,322 - 795,322 - 26,713 7,114 33,827 11,389 246,633 - 246,633 - 43,399 (43,399) - - 8,053,064 (36,285) 8,016,779 11,389 2,012,863 (297,092) 1,715,771 (6,962,404) 32,057,541 5,759,492 37,817,033 (53,864,843) (647,443) - (647,443) (3,352,256) $ 33,422,961 $ 5,462,400 $ 38,885,361 $ (64,179,503) 19 TOWN OF WESTLAKE BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2014 ASSETS: Cash and cash equivalents Receivables : Property taxes Accounts receivable Due from other funds Other assets TOTAL ASSETS LIABILITIES, DEFFERED INFLOWS OF RESOURCES AND FUND BALANCE: Liabilities: Accounts payable Unearned revenue Due to other funds Total liabilities DEFERRED INFLOWS OF RESOURCES: Unavailable grant funds Unavailable resources - property taxes Total deferred inflows of resources Fund Balances: Nonspendable: Prepaid items Restricted for: Tourism Capital items Street and tree improvements Debt service Education Committed for: Court security and technology Unassigned Total fund balances TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES The accompanying notes are are an integral part of this statement. 20 $ 372,092 $ 96,415 $ 49 11,983 - - 384,075 96,415 49 - 106,129 - 14,353 - 1,486 14,353 106,129 1,486 8,821 77,300 - 80,442 - - - - 1,081 - 993,998 - 193,082 - - 7,671,173 - - 7,953,518 1,071,298 1,081 $ 8,351,946 $ 1,273,842 $ 2,616 Debt Westlake Service General Academy Fund $ 7,399,920 $ 866,250 $ 1,130 14,353 - 1,486 771,499 330,292 - 157,353 - - 8,821 77,300 - $ 8,351,946 $ 1,273,842 $ 2,616 20 $ 372,092 $ 96,415 $ 49 11,983 - - 384,075 96,415 49 - 106,129 - 14,353 - 1,486 14,353 106,129 1,486 8,821 77,300 - 80,442 - - - - 1,081 - 993,998 - 193,082 - - 7,671,173 - - 7,953,518 1,071,298 1,081 $ 8,351,946 $ 1,273,842 $ 2,616 EXHIBIT A-3 2,818 88,939 - - 1,107,520 1,107,520 1,313,091 424,694 13,620 1,751,405 - - - 80,442 1,081 993,998 193,082 7,671,173 1,313,091 424,694 1,123,958 11,887,640 $ 1,563,165 $ 1,794,572 $ 1,380,730 $ 14,366,871 21 Westlake Nonmajor Total Capital Academy Governmental Governmental Projects Expansion Funds Funds $ 1,563,165 $ 1,794,572 $ 1,122,465 $ 12,747,502 - - - 15,839 - - 243,464 1,345,255 - - 11,983 169,336 - - 2,818 88,939 $ 1,563,165 $ 1,794,572 $ 1,380,730 $ 14,366,871 $ 250,074 $ 1,369,878 $ 97,599 $ 2,186,107 - - 1,820 1,820 - - 157,353 169,336 250,074 1,369,878 256,772 2,357,263 - - - 106,129 - - - 15,839 - - - 121,968 2,818 88,939 - - 1,107,520 1,107,520 1,313,091 424,694 13,620 1,751,405 - - - 80,442 1,081 993,998 193,082 7,671,173 1,313,091 424,694 1,123,958 11,887,640 $ 1,563,165 $ 1,794,572 $ 1,380,730 $ 14,366,871 21 EXHIBIT A-4 TOWN OF WESTLAKE RECONCILIATION OF THE GOVERMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2014 Total fund balance -governmental funds balance sheet $ 11,887,640 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not current financial resources and therefore are not reported in the governmental funds balance sheet. 50,205,686 Deferred losses on refunding are reported as deferred outlfows of resources in the government -wide statement of net position. 1,194,749 Revenues earned but not available within sixty days of the fiscal year-end are not recognized as revenue in the fund financial statements. 121,968 Interest payable on long-term debt does not require current financial resources, therefore interest payable is not reported as a liability in the governmental funds balance sheet. (120,460) Long-term liabilities, including bonds payable, are not due and payable in the current period, and therefore are not reported in the fund financial statements. (29,866,622) NET POSITION OF GOVERNMENTAL ACTIVITIES - statement of net position $ 33,422,961 22 TOWN OF WESTLAKE TOWN OF WESTLAKE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2014 EXPENDITURES: Current General government 2,236,360 Westlake Debt Capital Public safety General Academy Service Fund Projects REVENUES: 123,541 Taxes 615,781 Sales $ 3,471,344 $ $ - $ Property 1,198,374 - 154,982 Mixed beverage 51,602 7,143,678 - - Hotel occupancy - - - 1,129,288 Franchise 795,322 State program revenues - 5,269,641 927,000 - Federal program revenues - 80,103 1,106,434 - Interest income 10,503 1,450 69,283 3,544 Building permits and fees 1,175,075 - 2,102,717 - Fines and penalties 730,441 Intergovernmental 3,540 (442,692) (1,947,735) (1,125,744) Contributions - - Miscellaneous 70,338 1,353,525 1,878,051 Total revenues 7,506,539 6,704,719 154,982 3,544 EXPENDITURES: Current General government 2,236,360 Public safety 2,146,587 Cultural and recreation 123,541 Public works 615,781 Economic development - Visitor services - Education - 7,143,678 - Capital outlay 20,875 - - 1,129,288 Debt service Principal retirement 47,440 - 927,000 - Interest and other fiscal charges 800 3,733 1,106,434 Bond issuance costs - - 69,283 - Total expenditures 5,191,384 7,147,411 2,102,717 1,129,288 Excess (deficiency) of revenues Over (Under) Expenditures 2,315,155 (442,692) (1,947,735) (1,125,744) OTHER FINANCING SOURCES (USES) Transfers in 56,419 282,000 1,878,051 Transfers out (1,504,397) - - (200,000) Capital lease proceeds 239,009 - Refunding bonds issued - 1,910,000 Payment to refunding bond escrow agent (1,925,315) Premium on refunding bonds issued - 84,598 Note proceeds 34,710 - - Net other financing sources (uses) (1,413,268) 521,009 1,947,334 (200,000) NET CHANGE IN FUND BALANCES 901,887 78,317 (401) (1,325,744) FUND BALANCES, AT BEGINNING OF YEAR 7,051,631 992,981 1,482 2,638,835 FUND BALANCES AT END OF YEAR $ 7,953,518 $ 1,071,298 $ 1,081 $ 1,313,091 The accompanying notes are are an integral part of this statement. 23 Westlake Nonmajor Total Academy Governmental Governmental Expansion Funds Funds $ $ 1,254,501 $ 4,725,845 - 1,353,356 - 51,602 796,481 796,481 - 795,322 5,269,641 - 80,103 9,352 1,864 26,713 - - 1,175,075 730,441 - - 3,540 80,472 1,974 82,446 233,500 4,100 1,661,463 323,324 2,058,920 16,752,028 2,236,360 2,146,587 123,541 - 615,781 147,685 147,685 493,082 493,082 - - 7,143,678 8,813,884 9,964,047 30,237 1,004,677 5,522 1,116,489 - - 69,283 8,813,884 676,526 25,061,210 (8,490,560) 1,382,394 (8,309,182) 830,000 47,741 3,094,211 - (1,346,415) (3,050,812) 239,009 1,910,000 (1,925,315) - 84,598 366,774 401,484 1,196,774 (1,298,674) 753,175 (7,293,786) 83,720 (7,556,007) 7,718,480 1,040,238 19,443,647 $ 424,694 $ 1,123,958 $ 11,887,640 24 EXHIBIT A-5 TOWN OF WESTLAKE 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, 2014 Net change in fund balances- total governmental funds. Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Depreciation expense on capital assets is reported in the statement of activities but does not require the use of current financial resources. Therefore, depreciation expense is not reported as expenditures in the governmental funds. The repayment of the principal of long term debt consumes the current financial resources of governmental funds, but has no effect on net position. The amortization of bond premiums and deferred gain/loss on refunding of long term debt is reported in the statement of activities but does not require the use of current financial resources. Therefore the effect of the amortization of these various items are not reported in the statement of revenues, expenditures, and changes in fund balance. This amount represents the net effect of the following items: Bond proceeds Payment to refunding bond escrow agent Note proceeds Lease proceeds Bond premiums Repayments Amortization of premium on bonds Amortization of deferred loss on refunding Current year changes in accrued interest payable does not require the use of current financial resources; and therefore, are not reported as expenditures in governmental funds. Current year changes in the long-term liability for compensated absences do not require the use of current financial resources; and therefore, are not reported as expenditures in governmental funds. Certain revenues in the government -wide statement of activities that do not provide current financial resources are not reported as revenue in the governmental funds. EXHIBIT A-6 $ (7,556,007) 10,012,566 (928,763) (1,910,000) 1,925,315 (401,484) (239,009) (84,598) 1,004,677 40,858 (98,417) 237,342 240,647 (51,459) 58,537 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES - statement of activities $ 2,012,863 The accompanying notes are are an integral part of this statement. 25 TOWN OF WESTLAKE STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2014 ASSETS: Current Assets Cash and cash equivalents Accounts receivable Inventories Restricted cash and investments Total current assets Noncurrent assets Capital assets: Construction in progress Buildings and improvements Wastewwater treatment rights Machinery and equipment Less: accumulated depreciation Total capital assets Total noncurrent assets TOTAL ASSETS LIABILITIES Current liabilities: Accounts payable Customer deposits payable Accrued interest payable Unearned revenue Compensated absences - current portion Current portion of bonds payable Contractual obligations Total current liabilities Long-term liabilities: Bonds payable Compensated absences Contractual obligations Total long-term liabilities TOTAL LIABILITIES NET POSITION Net investment in capital assets Unrestricted TOTAL NET POSITION The accompanying notes are are an integral part of this statement. 26 EXHIBIT A-7 Utility Cemetery Fund Fund Total $ 4,032,112 $ 51,639 $ 4,083,751 835,303 58 835,361 - 96,986 96,986 194,710 - 194,710 5,062,125 148,683 5,210,808 246,121 - 246,121 14,882,835 14,882,835 635,199 635,199 3,498,148 3,498,148 (6,159,468) (6,159,468) 13,102,835 13,102,835 13,102,835 - 13,102,835 18,164, 960 148,683 18,313,643 234,540 355 234,895 194,710 - 194,710 5,713,949 5,713,949 318,352 318,352 2,092 2,092 21,450 21,450 94,530 - 94,530 6,579,623 355 6,579,978 992,750 - 992,750 18,824 18,824 5,259,691 5,259,691 6,271,265 - 6,271,265 12,850,888 355 12,851,243 6,734,414 - 6,734,414 (1,420,342) 148,328 (1,272,014) $ 5,314,072 $ 148,328 $ 5,462,400 TOWN OF WESTLAKE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2014 OPERATING REVENUES: Charges for services Miscellaneous revenue Total operating revenues OPERATING EXPENSES: Payroll costs Professional and contract services Depreciation Amortization of wastewater treatment rights Water purchases Cost of cemetary lots sold Other operating costs Total operating expenses Net operating income NON-OPERATING REVENUES(EXPENSES): Interest income Interest expense Total non-operating revenues (expenses) INCOME (LOSS) BEFORE TRANSFERS AND CAPITAL CONTRIBUTIONS Transfer out Total transfers and capital contributions Change in net position Total net position, beginning of year Total net position, end of year The accompanying notes are are an integral part of this statement. 27 EXHIBIT A-8 Utility Cemetery Fund Fund Total $ 3,028,787 $ 7,749 $ 3,036,536 399,915 399,915 3,428,702 7,749 3,436,451 328,944 - 328,944 94,069 6,525 100,594 430,527 - 430,527 31,760 31,760 1,048,219 - 1,048,219 - 596 596 987,547 - 987,547 2,921,066 7,121 2,928,187 507,636 628 508,264 7,035 79 7,114 (769,071) - (769,071) (762,036) 79 (761,957) (254,400) 707 (253,693) (43,399) - (43,399) (43,399) - (43,399) (297,799) 707 (297,092) 5,611,871 147,621 5,759,492 $ 5,314,072 $ 148,328 $ 5,462,400 The accompanying notes are are an integral part of this statement. 28 EXHIBIT A-9 TOWN OF WESTLAKE STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2014 Utility Cemetery CASH FLOWS FROM OPERATING ACTIVITIES: Fund Fund Total Receipts from customers $ 3,425,711 $ 6,549 $ 3,432,260 Payments to employees (315,069) - (315,069) Payments to suppliers (2,129,935) (6,170) (2,136,105) Net cash provided by operating activities 980,707 379 981,086 CASH FLOW FROM NONCAPITAL FINANCING ACTIVITIES: Transfer to other funds (43,399) - (43,399) Net cash used in noncapital financing activities (43,399) (43,399) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Principal paid on debt (102,325) (102,325) Interest paid on debt (153,347) (153,347) Investment earnings 7,035 79 7,114 Purchase of property and equipment (1,441,881) - (1,441,881) Net cash provided by (used in) capital and related financing activities (1,690,518) 79 (1,690,439) Net increase (decrease) in cash (753,210) 458 (752,752) Cash and cash equivalents at the beginning of the year 4,980,032 51,181 5,031,213 Cash and cash equivalents at the end of the year $ 4,226,822 $ 51,639 $ 4,278,461 RECONCILIATION OF TOTAL CASH AND CASH EQUIVALENTS: Cash and cash equivalents $ 4,032,112 $ 51,639 $ 4,083,751 Restricted cash and cash equivalents 194,710 - 194,710 Total cash and cash equivalents 4,226,822 51,639 4,278,461 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating income 507,636 628 508,264 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization 462,287 - 462,287 Provision for bad debts 6,300 6,300 12,600 Changes in operating assets and liabilities: Receivables 1,618 (6,242) (4,624) Prepaid Items Inventory - 596 596 Compensated absences 7,389 - 7,389 Accounts payable 6,386 355 6,741 Customer deposits payable 22,908 - 22,908 Deferred revenue (33,817) (1,258) (35,075) Net cash provided by operating activities $ 980,707 $ 379 $ 981,086 The accompanying notes are are an integral part of this statement. 28 TOWN OF WESTLAKE DISCRETELY PRESENTED COMPONENT UNITS COMBINING STATEMENT OF NET POSITION SEPTEMBER 30, 2014 ASSETS Cash and cash equivalents Accounts receivable (net of allowance) Prepaid rent Restricted assets: Cash and cash equivalents Capital assets: Land Buildinqs and improvements Machinery and equipment Less: accumulated depreciation Total assets LIABILITIES AND NET POSITION LIABILITIES: Texas Student Texas Student Texas Student Housing Housing Housing Authority Authority Authority Ballpark Austin The Ridge Town Lake Project at North Texas Austin Project 19,979,733 Total liabilities 45,091,903 $ 781,063 $ 352,180 $ 52,023 60,703 39,271 23,040 Net investment in capital assets (32,946) (17,311) 228,364 1,932,392 471,487 4,788,265 2,200,000 2,182,816 21,345,305 25,705,000 16,963,841 6,993,063 1,253,841 1,211,085 (13,419,978) (12,677,157) (7,383,625) 20, 776, 785 18, 772, 581 13, 503, 356 Accounts payable and accrued expenses 1,198,555 261,404 236,846 Unearned revenue 205,453 159,835 135,053 Accrued interest payable 9,064,376 6,765,433 3,601,729 Bonds payable 34,623,519 26,352,646 19,979,733 Total liabilities 45,091,903 33,539,318 23,953,361 NET POSITION: Net investment in capital assets (14,916,864) (9,870,962) (7,005,616) Unrestricted (9,398,254) (4,895,775) (3,444,389) Total net position $ (24,315,118) $ (14,766,737) $ (10,450,005) The accompanying notes are are an integral part of this statement. 29 Texas Student Housing Authority Cambridge at College Station $ 5,454,797 $ 344,289 146,004 1,905,574 EXHIBIT A-10 Texas Student Housing Authority Total 552,388 $ 7,192,451 23,718 491,021 - 95,747 4,537,817 2,899,597 12,070,678 26,885,312 90,899,458 3,437,138 12,895,127 (11,712,976) - (45,193,736) 29,359,735 576,106 82,988,563 278,494 570 1,975,869 2,805,430 40,507 3,346,278 11,573,483 - 31,005,021 29,885,000 - 110,840,898 44, 542,407 41,077 147,168, 066 (8,375,929) - (40,169,371) (6,806,743) 535,029 (24,010,132) $ (15,182,672) $ 535,029 $ (64,179,503) 30 TOWN OF WESTLAKE DISCRETELY PRESENTED COMPONENT UNITS COMBINING STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Program Revenues The accompanying notes are an integral part of this statement. 31 Charges for Operating Grants Capital Grants Functions/Programs Expenses Services and Contributions and Contributions Business -type activities: Texas Student Housing Authority $ 292,320 $ 421,262 $ $ Texas Student Housing Authority: Cambridge at College Station 8,154,588 5,811,212 Ballpark Austin Project 6,699,682 4,083,329 Town Lake Austin Project 4,136,014 3,102,367 The Ridge at North Texas 5,601,332 4,491,973 Total business -type activities 24,883,936 17,910,143 Total primary government $ 24,883,936 $ 17,910,143 $ $ GENERAL REVENUES: Interest Income Total general revenues Change in Net Postion NET POSITION, beginning of year as previously stated Change in accounting principle NET POSITION, end of year The accompanying notes are an integral part of this statement. 31 EXHIBIT A-11 32 Net (Expense) Revenue and Changes in Net Position Texas Student Texas Student Texas Student Texas Student Housing Housing Housing Housing Authority Authority Authority Authority Texas Student Ballpark Austin The Ridge at Town Lake Cambridge at Housing Project North Texas Austin Project College Station Authority Total $ - $ - $ $ - $ 128,942 $ 128,942 - - (2,343,376) - (2,343,376) (2,616,353) - - - (2,616,353) - - (1,033,647) - - (1,033,647) - (1,109,359) - - (1,109,359) (2,616,353) (1,109,359) (1,033,647) (2,343,376) 128,942 (6,973,793) $ (2,616,353) $ (1,109,359) $ (1,033,647) $ (2,343,376) $ 128,942 $ (6,973,793) 78 9,772 3 723 813 11,389 78 9,772 3 723 813 11,389 (2,616,275) (1,099,587) (1,033,644) (2,342,653) 129,755 (6,962,404) (19,553,532) (13,061,778) (8,814,788) (12,840,019) 405,274 (53,864,843) (2,145,311) (605,372) (601,573) - - (3,352,256) $ (24,315,118) $ (14,766,737) $ (10,450,005) $ (15,182,672) $ 535,029 $ (64,179,503) 32 TOWN OF WESTLAKE TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Town of Westlake, Texas (the Town) was incorporated under the provisions of the laws of the State of Texas on December 26, 1956. The Town operates under a Council- Manager form of government and provides the following services as authorized by the laws of the State of Texas: public safety; cultural and recreation; and economic development. The accounting and reporting policies of the Town conform to accounting principles generally accepted in the United States of America for local governments. Generally accepted accounting principles (GAAP) for local governments include those principles prescribed by the Governmental Accounting Standards Board (GASB). The following is a summary of the more significant accounting and reporting policies: Financial Reporting Entity The accompanying financial statements present the government 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 Town's operations and are appropriately presented as funds of the primary government. Discretely presented component units, on the other hand, are reported in a separate column in the government -wide financial statements to emphasize it is legally separate from the Town. Based on these criteria, the financial information of the following entities have been blended or discretely presented within the financial statements: Lone Star Public Facilities Corporation, 4B Economic Development Corporation, Westlake Academy, Texas Student Housing Authority, Texas Student Housing Authority - Ballpark Austin Project; Texas Student Housing Authority- Town Lake Austin Project, Texas Student Housing Authority- Cambridge at College Station and Texas Student Housing Authority - The Ridge at North Texas. The Texas Student Housing Authority, Texas Student Housing Authority - Ballpark Austin Project, Texas Student Housing Authority - Town Lake Austin Project, Texas Student Housing Authority — Cambridge at College Station, and Texas Student Housing Authority - The Ridge at North Texas Project (collectively, Texas Student Housing Entities) are Texas nonprofit organizations as a duly constituted authority of the Town pursuant to Section 53.35(b) of the Texas Education Code, as amended (Act). Texas Student Housing Entities' primary purpose is to construct, own, and operate student housing facilities on college campuses in Texas. The board consists of seven directors which are appointed by the Town's governing body and has the ability to remove at will the appointed members; thus, the governing body can impose its will on the organizations. However, the board is not substantively the same as the Town's governing body; therefore, the Texas Student Housing Entities are reported as discretely presented component units (enterprise funds). The Town is not responsible for the long-term debt of the Texas Student Housing Entities. The Texas Student Housing Entities year-end is August 31. 33 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Component Units — Continued Discretely Presented — Continued Separately issued financial reports are available for the all the Texas Student Housing Entities. These reports may be obtained by contacting the following office. Texas Student Housing Authority 3 Village Circle, Suite 202 Westlake, Texas 76262 Blended Lone Star Public Facilities Corporation is a Texas nonprofit corporation that acts on behalf of the Town to further the public purposes under the Public Facilities Corporation Act, as it's duly constituted authority and instrumentality. The board of directors, appointed by the Town's governing body, is comprised of seven members, of whom five must be members of the Town's governing body. Since the board of directors is substantively the same as the Town's governing body, the entity has been reported as a blended component unit of the Town. 4B Economic Development Corporation is a Texas nonprofit industrial corporation under the Development Corporation Act of 1979 formed to promote economic development within the Town and the State of Texas in order to eliminate unemployment and underemployment, and to promote and encourage employment and the public welfare of, for, and on behalf of the Town by developing, implementing, financing, and providing one or more projects defined and permitted under Section 413 of the Act. The board of directors is composed of seven persons appointed by the members of the Town's governing board. Four of the members of the board of directors are members of the Town's governing board. Since the board of directors is substantively the same as the Town's governing body, the entity has been reported as a blended component unit of the Town. Westlake Academy (Academy) is an open -enrollment charter school, as provided by Subchapter D, Chapter 12, of the Texas Education Code. The Town of Westlake (Charter Holder) applied for and became the first municipality in Texas to ever receive this special charter designation. The board consists of six trustees and is appointed by the Town's governing body. Currently, all the members of the board of trustees are members of the Town's governing body. Since the board of directors is substantively the same as the Town's governing body, the entity has been reported as a blended component unit of the Town. The Academy's year-end is August 31. 34 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Government -wide and Fund Financial Statements The government -wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the non -fiduciary activities of the Town. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual Governmental Funds and major individual Enterprise Funds are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Town considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. 35 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Measurement Focus, Basis of Accounting, and Financial Statement Presentation — Continued Sales taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the Town. The Town uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. A fund is a separate accounting entity with a self -balancing set of accounts. Governmental Funds are those through which most governmental functions of the Town are financed. The acquisition, use, and balances of the Town's expendable financial resources and the related liabilities (except those accounted for in the proprietary fund type) are accounted for through governmental funds. The measurement focus is upon determination of changes in financial position, rather than upon income determination. The Town reports the following major governmental funds: General Fund - to account for all financial resources except those required to be accounted for in another fund. The General Fund balance is available for any purpose, provided it is expended or transferred in accordance with the legally adopted budget of the Town. Westlake Academy Fund - to account for all local, state and federal revenue and related educational expenditures of the Academy. Debt Service Fund - to account for resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds. Capital Projects Fund - to account for proceeds from long-term financing and revenue and expenditures related to authorized construction and other capital asset acquisitions other than those related to the expansion of Westlake Academy facilities. Westlake Academy Expansion Fund — to account for proceeds from long-term financing and revenue and expenditures related to authorized construction related to the expansion of Westlake Academy facilities. 36 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Measurement Focus, Basis of Accounting, and Financial Statement Presentation — Continued In addition, the Town reports the following nonmajor governmental funds: Visitors Association Fund - to account for municipal hotel occupancy taxes collected and expenditures to promote tourism and the convention and hotel industry. Lone Star Public Facilities Corporation - to account for investment activity relating to the Lone Star Public Facilities Corporation. 4B Economic Development Corporation - to account for sales tax collected to fund the activities of the 413 Economic Development Corporation. Economic Development Fund - to account for sales tax and hotel occupancy tax collected to fund activity relating to Economic Development agreements. The Town adopts an annual appropriated budget for all governmental funds except capital projects and Westlake Academy Expansion funds, which are project -length based budgets. A budgetary comparison schedule has been provided for all appropriate funds to demonstrate compliance with the budget. Proprietary Funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Town's Enterprise Fund are charges to customers for sales and services. Operating expenses for the Enterprise Fund include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenue and expenses. The Town reports the following major proprietary funds: Utility Fund - to account for revenues and expenses related to providing water and sewer services to the general public on a continuing basis. Cemetery Fund- to account for the operations of the Town's cemetery. As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are charges between the Town's water and wastewater function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenue reported for the various functions concerned. Amounts reported as program revenues include: 1) charges to customer or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenue. Likewise, general revenue includes all taxes. 37 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Assets, Liabilities, and Net Position or Equity Cash and Cash Equivalents Cash and investments of all funds, including restricted cash, are available upon demand and are considered to be "cash equivalents." For purposes of the statement of cash flows, the Town considers highly -liquid investments (including restricted assets) with an original maturity of three months or less when purchased to be cash equivalents. State statutes authorize the Town to invest in (1) obligations of the United States or its agencies and instrumentalities; (2) direct obligations of the State of Texas or its agencies; (3) other obligations, the principal of, and interest on, which are unconditionally guaranteed or insured by the State of Texas or the United States; (4) obligations of states, agencies, counties, cities, and other political subdivisions of any state having been rated as to investment quality by a nationally recognized investment rating firm and having received a rating of not less than "A" or its equivalent; (5) certificates of deposit by state or national banks domiciled in this state that are (a) guaranteed or insured by the Federal Deposit Insurance Corporation, or its successor; or, (b) secured by obligations that are described by (1) - (4); or (6) fully collateralized direct repurchase agreements having a defined termination date, secured by obligations described by (1) pledged with third -party selected or (2) approved by the Town, and placed through a primary government securities dealer. All investments are recorded at fair value based on quoted market prices. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties. Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. 38 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Assets, Liabilities, and Net Position or Equity — Continued Receivables and Payables — Continued All property tax receivables are shown net of an allowance for uncollectibles. The net property tax receivable allowance is equal to management's estimate of uncollectible outstanding property taxes at September 30, 2014. The Town's property taxes are levied on October 1 on the assessed value listed as of the prior January 1 for all real and business personal property located in the Town. Assessed values are established at 100% of estimated market value. Property taxes attach as an enforceable lien on property as of January 1. Taxes are due by January 31 following the October 1 levy date and are considered delinquent after January 31 of each year. Restricted Assets Certain bond proceeds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. Inventories and prepaid items Inventories, which are expended as they are consumed, are stated at the lower of cost or market on a first -in, first -out basis. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government -wide and fund financial statements. Fund Changes and Transactions Between Funds Legally authorized transfers are treated as transfers in and out and are included as other financing sources (uses) of both governmental and proprietary funds. The Town allocates an indirect cost percentage of the salaries, wages and related costs of personnel who perform administrative services as well as other indirect costs necessary for the operation of various funds. Expenses are budgeted and paid from the appropriate fund. 39 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Assets, Liabilities, and Net Position or Equity — Continued Capital Assets All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. The cost of nominal maintenance and repairs that do not add value to the asset or materially extend assets' lives are not capitalized. Donated assets are valued at their fair market value on the date donated. Assets capitalized have an original cost of $5,000 or more and three years or more of life. All infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), regardless of the acquisition date or amount, have been included. Estimated historical cost for initial reporting of infrastructure assets (those reported by governmental activities) was valued by estimating the current replacement cost of the infrastructure and using an index to deflate the cost to the estimated acquisition/construction year. As the Town constructs or acquires additional capital assets, including infrastructure assets, they are capitalized and reported at historical cost. Depreciation has been calculated on each class of depreciable property using the straight-line method. Estimated useful lives are as follows: Assets Years Water and sewer system 10-50 Buildings 20-50 Machinery and equipment 3-30 Improvements 5-30 Information systems and software 3 Compensated Absences The Town's policy allows employees to earn 5 days of vacation and 5 days of sick leave between six months and one year of service, and 10 days of vacation and 10 days of sick leave between one year and two years of service and each successive year through five years of service. After completion of 5 years of service, 15 days of vacation and 15 days of sick leave per year are earned. After completion of 10 years of service, 20 days of vacation and 20 days of sick leave per year are earned. The Town makes sick and vacation time available in full at the beginning of each year, and hours are actually earned throughout the year. Unused, earned vacation hours are paid upon termination or retirement at the employee's normal hourly rate; accumulated, unused sick time is not payable upon termination or retirement. ,s TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Assets, Liabilities, and Net Position or Equity — Continued Long-term Obligations 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 governmental activities, business -type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method, which approximates the effective interest 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 issuance costs during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts are reported as other financing uses. Issuance costs, even if withheld from the actual proceeds, are reported as expenditures. Fund Equity and Net Position The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to which the Town is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. The classifications used in the governmental fund financial statements are as follows: Nonspendable: This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) are legally or contractually required to be maintained intact. Nonspendable items are not expected to be converted to cash or are not expected to be converted to cash within the next year. Restricted: This classification includes amounts for which constraints have been placed on the use of the resources either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation. Committed: This classification includes amounts that can be used only for specific purposes pursuant to constraints imposed by board resolution of the Town council, the Town's highest level of decision making authority. These amounts cannot be used for any other purpose unless the Town council removes or changes the specified use by taking the same type of action that was employed when the funds were initially committed. This classification also includes contractual obligations to the extent that existing resources have been specifically committed for use in satisfying those contractual requirements. 41 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Assets, Liabilities, and Net Position or Equity — Continued Fund Equity and Net Position — Continued • Assigned: This classification includes amounts that are constrained by the Town's intent to be used for a specific purpose but are neither restricted nor committed. In the General Fund, assigned amounts represent intended uses established by the Town Council or a Town official delegated that authority by Town Charter or ordinance. • Unassigned: This classification includes the residual fund balance for the General Fund. The unassigned classification also includes negative residual fund balance of any other governmental fund that cannot be eliminated by offsetting of assigned fund balance amounts. In the government -wide financial statements, net position represents the difference between assets and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition, construction or improvements of those assets, and adding back unspent proceeds. Net position is reported as restricted when there are limitations imposed on its use either though the enabling legislations adopted by the Town or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. The government -wide and fund level financial statements report restricted fund balances for amounts not available for appropriation or legally restricted for specific uses. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, it is the Town's policy to use restricted resources first, then unrestricted resources as needed. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the Town considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds. Estimates The preparation of financial statements, in conformity with U.S. generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual amounts could differ from those estimates. Subsequent Events The Town has evaluated all events or transactions that occurred after September 30, 2014 up through February 17, 2015, the date the financial statements were issued. M TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 2. CASH AND INVESTMENTS Legal provisions generally permit the Town to invest in certificates of deposit, repurchase agreements, public funds investment pools, direct obligations of the United States of America or its subdivisions and state and local government securities. The Public Funds Investment Act (Government Code Chapter 2256) contains specific provisions in the areas of investment practices, management reports and establishment of appropriate policies. Among other things, it requires the Town to adopt, implement, and publicize its investment policy. That policy must address the following areas: (1) safety of principal and liquidity, (2) portfolio diversification, (3) allowable investments, (4) acceptable risk levels, (5) expected rates of return, (6) maximum allowable stated maturity of portfolio investments, (7) maximum average dollar - weighted maturity allowed based on the stated maturity date for the portfolio, (8) investment staff quality and capabilities, and (9) bid solicitation preferences for certificates of deposit. Statutes and the Town's investment policy authorized the Town to invest in the following investments as summarized in the table below: The Town did not engage in repurchase or reverse repurchase agreement transactions during the current year. At year end, the carrying amount of the Town's deposits was $17,025,613 and the bank balance was $17,496,609. The bank balance was completely covered by federal deposit insurance and collateral held by the pledging financial institution in the Town's name. At year end, the carrying amount of the component units' deposits was $11,730,268 and the bank balance was $11,709,260. The bank balance was completely covered by federal deposit insurance and collateral held by the pledging financial institution in the component units' names. The carrying amount consists of $7,192,451 in cash and cash equivalents and $4,537,817 in restricted cash and cash equivalents. 43 Maximum Maximum Authorized Maximum Percentage Investment Investment Type Maturity of Portfolio In One Issuer Obligations of the U.S. Government, its agencies and instrumentalities 2 years None None Certificates of deposit 1 year None None Mutual funds 2 years 80% None Investment pools - None None The Town did not engage in repurchase or reverse repurchase agreement transactions during the current year. At year end, the carrying amount of the Town's deposits was $17,025,613 and the bank balance was $17,496,609. The bank balance was completely covered by federal deposit insurance and collateral held by the pledging financial institution in the Town's name. At year end, the carrying amount of the component units' deposits was $11,730,268 and the bank balance was $11,709,260. The bank balance was completely covered by federal deposit insurance and collateral held by the pledging financial institution in the component units' names. The carrying amount consists of $7,192,451 in cash and cash equivalents and $4,537,817 in restricted cash and cash equivalents. 43 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 2. CASH AND INVESTMENTS — CONTINUED At September 30, 2014, the Town's cash and cash equivalents consist of and are classified in the accompanying financial statements are follows: Cash and cash equivalents Restricted cash and investments Total cash and investments Deposits with financial institutions Investments Total cash and investments Disclosures Relating to Interest Rate Risk $ 16,831,253 194,710 $ 17,025,963 $ 17,025,613 350 $ 17,025,963 This is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. In order to limit interest and market rate risk from changes in interest rates, the Town's investment policy sets a maximum stated maturity limit of two years for obligations of the United States Government, its agencies and instrumentalities (excluding mortgage backed securities) and one year for fully insured or collateralized certificates of deposit. No more than 80% of the Town's monthly average balance may be invested in money market funds. Additionally, the Town invests in an investment pool that purchases a combination of shorter term investments with an average maturity of 48 days thus reducing the interest rate risk. Information about the sensitivity of the fair values of the Town's investments to market interest rate fluctuations is provided by the following table that shows the distribution of the Town's Investments. As of September 30, 2014, the Town's investments were as follows: Investment Type Carrying Amount Weighted Average Fair Value Maturity (days) TexPool $ 350 $ 350 48 days 44 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED Disclosures Relating to Credit Risk — Continued This is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the Public Funds Investment Act, the Town's investment policy, or debt agreements, and the actual rating as of year-end for each investment type. Primary government Investments: TexPool Carrying Fair Amount Value $ 350 $ 350 Disclosures Relating to Concentration of Credit Risk Minimum Rating Legal as of Rating Year-end N/A AAA -m The Town's investment policy is to avoid a concentration of assets in a specific maturity, a specific issue, or a specific class of investments. Disclosures Relating to Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The Public Funds Investment Act does not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The Public Funds Investment Act requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least the bank balance less the FDIC insurance at all times. The Town requires all deposits to be covered by Federal Depository Insurance Corporation (FDIC) insurance and/or collateralized by qualified securities pledged by the Town's depository in the Town's name and held by the depository's agent. As of September 30, 2014, the Town's entire cash deposits with financial institutions in excess of federal depository insurance were fully collateralized. 45 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED Investment in State Investment Pools On September 1, 1989, local government investment pools became authorized investments for the majority of public entities in Texas. The Interlocal Cooperation Act was amended by the 71St Texas Legislature to facilitate the creation of local government investment pools in Texas. This act permits the creation of investment pools to which a majority of political subdivisions (local governments) may delegate, by contract, the authority to make investments purchased with local investment funds and to hold legal title as custodian of the investments. TexPool was organized to conform with the Interlocal Cooperation Act, Chapter 791 of the Texas Government Code, and the Public Funds Investment Act, Chapter 2256 of the Texas Government Code. During the year ended September 30, 2014, the Town had investments with TexPool. TexPool, a public funds investment pool created by the Treasurer of the State of Texas acting by and through the Texas Treasury Safekeeping Trust Company, which is empowered to invest funds and acts as custodian of investments purchased with local investment funds. These investments are not required to be categorized because the investor is not issued securities, but rather it owns an undivided beneficial interest in the assets of the respective funds. The fair value of the position in TexPool is the same as the value of the pool shares. Restricted Cash Proprietary Fund Within the proprietary funds, $194,710 of the fund represents customer deposits received for water and sewer usage that are refundable upon termination of service. Discretely Presented Component Units Within the discretely presented component units, the $4,537,817 in restricted cash and cash equivalents represents funds held for debt service. me TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 3. RECEIVABLES Governmental activities receivable balance consists of the following as of September 30, 2014: Receivables: Sales tax Property tax Othertaxes Franchise tax Accounts Other Gross receivables Less: allowance for uncollectibles Net total receivables Governmental Funds Debt Total Westlake Service Nonmajor Governmental General Academy Fund Fund Funds $ 451,937 $ - $ - $ 177,474 $ 629,411 19,137 - 1,981 21,118 13,269 - - 65,990 79,259 195,118 - - 195,118 69,264 - - 69,264 90,120 330,292 - - 420,412 838,845 330,292 1,981 243,464 1,414,582 (52,993) - (495) - (53,488) $ 785,852 $ 330,292 $ 1,486 $ 243,464 $ 1,361,094 Business -type receivables balance consists of the following as of September 30, 2014: Business -Type Activities Utility Cemetery Fund Fund Total Receivables: Sales tax $ - $ $ - Property tax - Othertaxes - Franchise tax - - Accounts 835,303 58 835,361 Other - - Gross receivables 835,303 58 835,361 Less: allowance for uncollectibles - - Net total receivables $ 835,303 $ 58 $ 835,361 47 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 4. CAPITAL ASSETS Capital asset activity for the year ended September 30, 2014, was as follows: Primary Government 48 Beginning Ending Balance Increases Decreases Transfers Balance Governmental activities: Capital assets, not being depreciated: Land $ 11,896,663 $ - $ $ - $ 11,896,663 Construction in progress 2,834,092 1,123,009 (1,488,663) 2,468,438 Total assets not being depreciated 14,730,755 1,123,009 (1,488,663) 14,365,101 Capital assets, being depreciated: Capital improvements 11,374,376 - - 11,374,376 Buildings 21,777,872 8,359,119 1,488,663 31,625,654 Machinery and equipment 2,840,828 495,728 - 3,336,556 Information systems and software 70,854 34,710 - 105,564 Total capital assets being depreciated 36,063,930 8,889,557 1,488,663 46,442,150 Less accumulated depreciation: Capital improvements (3,189,854) (369,800) - (3,559,654) Buildings (4,165,981) (449,820) (4,615,801) Machinery and equipments (2,264,537) (103,002) (2,367,539) Information systems and software (52,430) (6,141) (58,571) Total accumulated depreciation (9,672,802) (928,763) - (10,601,565) Total capital assets being depreciated 26,391,128 7,960,794 1,488,663 35,840,585 Governmental activities capital assets, net $ 41,121,883 $ 9,083,803 $ $ - $ 50,205,686 Beginning Ending Balance Increases Decreases Transfers Balance Business -type activities: Capital assets, not being depreciated: Construction in progress $ 342,924 $ $ $ (96,803) $ 246,121 Total assets not being depreciated 342,924 (96,803) 246,121 Capital assets, being depreciated: Capital improvements 13,376,253 1,409,779 96,803 14,882,835 Wastewater treatment rights 635,199 - - 635,199 Machinery and equipment 3,466,046 32,102 - 3,498,148 Total capital assets being depreciated 17,477,498 1,441,881 96,803 19,016,182 Less accumulated depreciation: Capital improvements (3,761,351) (311,627) - (4,072,978) Wastewater treatment rights (418,173) (31,760) (449,933) Machinery and equipment (1,517,657) (118,900) (1,636,557) Total accumulated depreciation (5,697,181) (462,287) - (6,159,468) Total capital assets being depreciated 11,780,317 979,594 96,803 12,856,714 Business -type activities capital assets, net $ 12,123,241 $ 979,594 $ $ - $ 13,102,835 48 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 4. CAPITAL ASSETS — CONTINUED Depreciation was charged to departments of the primary government as follows: Governmental activities: General government $ 513,698 Public safety 75,052 Public works 340,013 Total depreciation expense - governmental activities $ 928,763 Business -type activities: Water and sewer $ 462,287 A summary of discretely presented component units' capital assets at September 30, 2014 follows: Texas Student Housing Authority — Ballpark Austin Project Beginning Ending Balance Increases Decreases Balance Capital assets, not being depreciated Land $ 4,788,265 $ - $ $ 4,788,265 Total assets not being depreciated 4,788,265 - 4,788,265 Capital assets, being depreciated: Buildings 21,345,305 - 21,345,305 Furniture and fixtures 6,993,063 - 6,993,063 Total capital assets being depreciated 28,338,368 - 28,338,368 Less accumulated depreciation: Buildings (8,300,952) (711,510) (9,012,462) Furniture and fixtures (4,258,350) (149,166) (4,407,516) Total accumulated depreciation (12,559,302) (860,676) (13,419,978) Total capital assets being depreciated 15,779,066 (860,676) 14,918,390 Capital assets, net $ 20,567,331 $ (860,676) $ $ 19,706,655 49 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 4. CAPITAL ASSETS — CONTINUED Texas Student Housing Authority — The Ridge at North Texas Beginning Ending Capital assets, not being depreciated Land $ 2,200,000 $ - $ $ 2,200,000 Total assets not being depreciated 2,200,000 - 2,200,000 Capital assets, being depreciated: Land $ 2,182,816 $ - $ $ 2,182,816 Buildings 25,705,000 - 25,705,000 Furniture and fixtures 1,253,841 - 1,253,841 Total capital assets being depreciated 26,958,841 887,095 - 26,958,841 Less accumulated depreciation: 2,806,596 - 2,806,596 Unit appliances Buildings (10,639,014) (856,833) (11,495,847) Furniture and fixtures (1,172,860) (8,450) (1,181,310) Total accumulated depreciation (11,811,874) (865,283) (12,677,157) Total capital assets being depreciated 15,146,967 (865,283) 14,281,684 Capital assets, net $ 17,346,967 $ (865,283) $ $ 16,481,684 Texas Student Housing Authority — Town Lake Austin Project Less accumulated depreciation Building and improvements Beginning Ending - (4,976,306) Balance Increases Decreases Balance Capital assets, not being depreciated: - (313,325) Land improvements Land $ 2,182,816 $ - $ $ 2,182,816 Total assets not being depreciated 2,182,816 - 2,182,816 Capital assets, being depreciated: Furniture and fixtures (915,951) Building and improvements 13,270,150 - 13,270,150 Capitalized purchase price 887,095 - 887,095 Land improvements 2,806,596 - 2,806,596 Unit appliances 295,134 - - 295,134 Furniture and fixtures 915,951 - - 915,951 Total capital assets being depreciated 18,174,926 - - 18,174,926 Less accumulated depreciation Building and improvements (4,533,968) (442,338) - (4,976,306) Capitalized purchase price (284,840) (28,485) - (313,325) Land improvements (789,356) (93,553) - (882,909) Unit appliances (295,134) - (295,134) Furniture and fixtures (915,951) - (915,951) Total accumulated depreciation (6,819,249) (564,376) - (7,383,625) Total capital assets being depreciated 11,355,677 (564,376) - 10,791,301 Capital assets, net $ 13,538,493 $ (564,376) $ - $ 12,974,117 50 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 4. CAPITAL ASSETS — CONTINUED Texas Student Housing Authority — Cambridge at College Station Beginning Ending Balance Increases Decreases Balance Capital assets, not being depreciated: Land $ 2,899,597 $ $ $ 2,899,597 Total assets not being depreciated 2,899,597 - 2,899,597 Capital assets, being depreciated Buildings 26,885,312 $ (2,807,000) $ 26,885,312 Furniture and fixtures 3,437,138 84,598 3,437,138 Total capital assets being depreciated 30,322,450 17,420 30,322,450 Less accumulated depreciation: 371,464 48,247 - Buildings (7,957,433) (895,741) (8,853,174) Furniture and fixtures (2,771,229) (88,573) (2,859,802) Total accumulated depreciation (10,728,662) (984,314) (11,712,976) Total capital assets being depreciated 19,593,788 (984,314) 18,609,474 Capital assets, net $ 22,493,385 $ (984,314) $ $ 21,509,071 NOTE 5. LONG-TERM DEBT A summary of long-term debt transactions for the year ended September 30, 2014, was as follows: Governmental activities: General obligation bonds and certificates of obligation Unamortized bond premium Notes payable Capital leases Fidelity tax reimbursement Compensated absences Total governmental activities Beginning Balance Additions Reductions Amount Ending Due within Balance One year $ 29,186,800 $ 1,910,000 $ (2,807,000) $ 28,289,800 $ 1,050,550 700,588 84,598 (40,858) 744,328 - 17,420 401,484 (47,440) 371,464 48,247 - 239,009 (1,631) 237,378 83,031 96,026 - (30,237) 65,789 31,975 106,404 120,920 (69,461) 157,863 15,786 $ 30,107,238 $ 2,756,011 $ (2,996,627) $ 29,866,622 $ 1,229,589 51 Amount Beginning Ending Due within Balance Additions Reductions Balance One year Business -type activities: Certificates of obligation $ 1,025,200 $ $ (11,000) $ 1,014,200 $ 21,450 Contractual obligations 5,412,149 (91,325) 5,320,824 94,530 Unamortized bond premium 34,569 (1,172) 33,397 - Compensated absences 13,527 16,757 (9,368) 20,916 2,092 Total business -type activities $ 6,485,445 $ 16,757 $ (112,865) $ 6,389,337 $ 118,072 51 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 5. LONG-TERM DEBT — CONTINUED General Obligation Bonds and Certificates of Obligation General obligation bonds and certificates of obligation are as follows as of September 30, 2014: General Obligations Bonds and Certificates of Obligation $7,465,000 General Obligation Refunding Bonds, Series 2007 $2,095,000 Combination Tax and Revenue Certificates of Obligation, Series 2011 $7,375,000 General Obligation Refunding Bonds, Series 2011 $9,320,000 Certificates of Obligation, Series 2013 $2,200,000 General Obligation Refunding Bonds, Series 2013 $1,910,000 General Obligation Refunding Bonds, Series 2014 Final Business - Maturity Interest Rates Governmental Type 2015 $ 1,050,550 $ 961,828 2032 3.75-4.20% $ 7,200,000 $ 2031 3.25% 1,824,000 939,260 2028 2.0-4.0% 7,175,000 - 2043 2.0-4.0% 8,205,800 1,014,200 2028 2.0-2.5% 1,975,000 - 2032 2.0-5.0% 1,910,000 - 10,103,039 2030-2034 5,726,400 $ 28,289,800 $ 1,014,200 Debt service requirements of certificates of obligation and general obligations to be retired from governmental funds are as follows: Year Ending Total September 30, Principal Interest Requirements 2015 $ 1,050,550 $ 961,828 $ 2,012,378 2016 1,068,550 942,543 2,011,093 2017 1,088,000 939,260 2,027,260 2018 1,127,000 897,495 2,024,495 2019 1,160,450 863,898 2,024,348 2020-2024 6,367,250 3,761,614 10,128,864 2025-2029 7,475,350 2,627,689 10,103,039 2030-2034 5,726,400 1,100,459 6,826,859 2035-2039 1,655,400 470,924 2,126,324 2040 1,570,850 128,961 1,699,811 $ 28,289,800 $ 12,694,671 $ 40,984,471 52 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 5. LONG-TERM DEBT - CONTINUED General Obligation Bonds and Certificates of Obligation - Continued Debt service requirements of certificates of obligation to be retired from proprietary funds are as follows: Year Ending September 30, 2015 2016 2017 2018 2019 2020-2024 2025-2029 2030-2034 2035-2039 2040-2043 Total Principal $ 21,450 21,450 22,000 22,000 22,550 123,750 155,650 226,600 204,600 194,150 Interest $ 34,325 33,896 33,461 33,021 32,576 154,472 134,550 98,474 58,204 15,939 Total Requirements $ 55,775 55,346 55,461 55,021 55,126 278,222 290,200 325,074 262,804 210,089 $ 1,014,200 $ 628,918 $ 1,643,118 In January 2014, the Town issued $1,910,000 General Obligation Refunding Bonds, Series 2014 for the purpose of refunding $1,880,000 of Combination Tax and Limited Pledge Revenue Certificates of Obligation, Series 2003. The refunding was undertaken to lower debt service requirements. The reacquisition price exceeded the net carrying amount of the old debt by $45,315. This amount is recorded as a deferred outflow of resources and is being amortized over the life of the refunded debt. The transaction reduced future debt service payments by $197,294 and resulted in an economic gain (difference between the debt service payments of the old debt and new debt) of $141,287. Notes Payable In March 2014, the Town received a $366,774 loan from Bennett Benner Pettit, the proceeds of which will be used to fund a portion of the Westlake Academy expansion project. The terms of the note call for ten annual payments at 0% interest. In August 2014, the Town entered into a purchase agreement to acquire technology equipment secured by a 3 -year interest-free note in the amount of $34,710. 53 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 5. LONG-TERM DEBT— CONTINUED Notes Payable — Continued Debt service requirements for the notes payable to be retired from governmental funds are as follows: Year Ending September 30, 2015 $ 48,247 2016 48,247 2017 36,677 2018 36,677 2019 36,677 2020-2024 164,939 Total $ 371,464 Capital Leases The Westlake Academy has entered into a lease agreement as lessee for financing the acquisition of computer equipment and software. The lease agreement qualifies as a capital lease for accounting purposes, and therefore, has been recorded at the present value of its future minimum lease payments as of the inception date. Equipment and software with a historical cost of $239,009 was under capital lease at September 30, 2014. Because the cost of the individual items was below the Town's capitalization threshold, the entire cost was recorded as expense during the year ended September 30, 2014. The following schedule shows the future minimum lease payments under the capitalized lease together with the present value of the net minimum lease payments as of September 30, 2014: Year Ending Annual August 31, Lease Payments 2015 $ 84,186 2016 84,186 2017 84,186 Total minimum lease payments 252,558 Less: Amounts representing interest (15,180) Present value of net minimum lease payments $ 237,378 54 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 5. LONG-TERM DEBT — CONTINUED Fidelity Tax Reimbursement On August 10, 1998, the Town entered into an economic development agreement with Fidelity Texas Limited Partnership ("Fidelity") which provided that Fidelity will receive a rebate of one percent of local sales taxes collected by the Town and paid by Fidelity. The agreement provided that the rebate will be paid to Fidelity within 30 days of each calendar quarter from the sales taxes received by the Town. On November 13, 2000, the agreement was amended to allow for a payment schedule of fifteen annual equal installments for sales tax rebate due and payable to Fidelity. The amount due will not bear interest. The loan is discounted to present value and amortized over the life of the loan using the effective interest method. Debt service requirements for deferred rebates to be retired from governmental funds are as follows: Year Ending September 30, 2015 2016 Total Contractual Obligations Principal Interest Total Requirements $ 31,975 $ 3,783 $ 35,758 33,814 1,944 35,758 $ 65,789 $ 5,727 $ 71,516 Proprietary funds contractual obligations as of September 30, 2014 are as follows: Business - Contractual Obligations Maturity Interest Rate Type Elevated Water Storage Facility 2020 5.0-5.65% $ 640,880 Limited pledge contractual obligation: Dove Road Water Line and West Pump Station 2028 6.75% 4,679,944 $ 5,320,824 Elevated Water Storage Facility - On October 9, 2000, the Town approved an interlocal agreement with the City of Keller, which provided for the joint construction, operation, maintenance and use of an elevated water storage facility and appurtenances. The Town recorded a contractual obligation of $1,466,000 based on the terms of the interlocal agreement, which requires 20 annual principal and interest payments to the City of Keller, with payments due each September 30 at interest rates ranging from 5.0% to 5.65%. 55 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 5. LONG-TERM DEBT — CONTINUED Contractual Obligations — Continued Dove Road Water Line and West Pump Station - In April 2000, the Town approved an agreement with the Hillwood Development Corporation (Hillwood). In the agreement, Hillwood agreed to bear all initial costs for the design, engineering and constructions of the Dove Road Water Line and the West Pump Station that will service the residents of the Town. The Town agreed to reimburse Hillwood for the cost of the project upon completion and the Town's acceptance of the project, which occurred in June 2001, solely from a $.25 charge per 1,000 gallons of usage. The Town further agreed to deposit debt service revenue of $.25 per 1,000 gallons of usage collected from Town residents to fund its repayment to Hillwood. Debt service revenue will be allocated between Hillwood service area and Town service area by 52% and 48%, respectively and deposited into two separate debt service funds that will result in debt service revenue to pay the respective share of the construction cost. The Town recorded a limited pledge contractual obligation of $4,679,944 for the project cost based upon the terms of the agreement, which requires 239 monthly principal and interest payments to Hillwood, at an interest rate of 6.75%. If the Town collects insufficient funds to pay current interest on the debt, the interest payment may be deferred. No portion of debt payments will be applied to the principal component, until all current and deferred interest is fully paid. The obligation of the Town to pay the purchase price and interest thereon is not a general obligation of the Town but is a limited recourse obligation payable solely from debt service revenue. The schedule of future payments by the Town under these agreements is as follows: Year Ending September 30, 2015 2016 2017 2018 2019 2020-2024 2025-2028 Total Prior Year Defeasance of Debt In prior years, the government defeased general obligations bonds by placing proceeds of the new bonds in an irrevocable trust account 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 government's financial statements. At September 30, 2014, there were no prior year defeased bonds outstanding. 56 Total Principal Interest Requirements $ 94,530 $ 756,347 $ 850,877 99,336 806,206 905,542 104,143 855,304 959,447 108,950 910,117 1,019,067 233,921 971,449 1,205,370 - 1,761,170 1,761,170 4,679,944 - 4,679,944 $ 5,320,824 $ 6,060,593 $ 11,381,417 In prior years, the government defeased general obligations bonds by placing proceeds of the new bonds in an irrevocable trust account 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 government's financial statements. At September 30, 2014, there were no prior year defeased bonds outstanding. 56 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 5. LONG-TERM DEBT — CONTINUED Compensated Absences Although compensated absences are liquidated by the fund to which they relate, the significant portion of the governmental activities compensated absences has typically been liquidated by the general fund. Discretely Presented Component Units — Long-term Debt Texas Student Housing Authority — Ballpark Austin Project The long-term debt activity of the Ballpark Austin Project is as follows: The bonds are payable solely from the revenues generated by the Project and secured by the revenues pledged and assigned under the terms of the trust indenture. Interest rates on the bonds range from 4.00% to 11.00% and are payable semi-annually. The debt service requirements of the bonds are as follows: Year Ending September 30, Past Due 2015 2016 2017 2018 2019 2020-2024 2025-2029 2030-2034 Total Principal $ 1,035,000 800,000 845,000 890,000 940,000 985,000 5,815,000 7,615,000 15,280,000 Interest $ 4,668,109 1,962,856 1,916,950 1,868,556 1,817,406 1,763,500 7,901,631 6,009,188 6,893,438 Total Requirements $ 5,703,109 2,762,856 2,761,950 2,758,556 2,757,406 2,748,500 13,716,631 13,624,188 22,173,438 $ 34,205,000 $ 34,801,634 $ 69,006,634 57 Amounts Beginning Ending Due Within Balance Increases Decreases Balance One Year Revenue Bonds: 2001 A Bonds $ 28,840,000 $ $ $ 28,840,000 $ 745,000 2001 B Bonds 2,365,000 2,365,000 55,000 2001 C Bonds 3,000,000 3,000,000 - Deferred purchase price 1,460,000 1,460,000 Less discounts (1,101,566) 60,085 (1,041,481) - Total $ 34,563,434 $ $ 60,085 $ 34,623,519 $ 800,000 The bonds are payable solely from the revenues generated by the Project and secured by the revenues pledged and assigned under the terms of the trust indenture. Interest rates on the bonds range from 4.00% to 11.00% and are payable semi-annually. The debt service requirements of the bonds are as follows: Year Ending September 30, Past Due 2015 2016 2017 2018 2019 2020-2024 2025-2029 2030-2034 Total Principal $ 1,035,000 800,000 845,000 890,000 940,000 985,000 5,815,000 7,615,000 15,280,000 Interest $ 4,668,109 1,962,856 1,916,950 1,868,556 1,817,406 1,763,500 7,901,631 6,009,188 6,893,438 Total Requirements $ 5,703,109 2,762,856 2,761,950 2,758,556 2,757,406 2,748,500 13,716,631 13,624,188 22,173,438 $ 34,205,000 $ 34,801,634 $ 69,006,634 57 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 5. LONG-TERM DEBT — CONTINUED Discretely Presented Long-term Debt — Continued Texas Student Housing Authority — Ballpark Austin Project — Continued At August 31, 2013, the Project had not made interest payments on the Subordinate 2001C Bond Series since July 2003, and the Subordinate 2001C Bond is in default. In addition, the Project's fixed charges coverage ratio was not in compliance with the covenants of the indenture. These events constitute an event of default that accelerates the bonds. Texas Student Housing Corporation -The Ridge at North Texas The long-term debt activity of the Ridge at North Texas is as follows: The Bonds are payable solely from the revenues generated by the Denton Property and are secured by the revenues pledged and assigned under the terms of the Trust Indenture. The Town of Westlake does not have any liability for the payment of the bonds as the bonds are non-recourse to both the Town of Westlake and Texas Student Housing Authority. Interest rates on the bonds range from 5.00% to 11.00% and are payable semi-annually on July 1 and January 1 of each year thereafter. At September 30, 2014, the Project was not in compliance with certain covenants of the Indenture including insufficient funds in some of the required funds discussed in Note 2 and a fixed charges ratio less than 1.0. In addition, all required principal payments on the Series B bonds had not been made as of September 30, 2014. Upon certain events of default either the trustee, or owners of not less than 25% in aggregate principal of the bonds then outstanding, may declare the principal and all interest then due to be immediately due and payable. 58 Amounts Beginning Ending Due Within Balance Increases Decreases Balance One Year Revenue Bonds: 2001 A Bonds $ 24,445,000 $ $ (735,000) $ 23,710,000 $ 785,000 2001 B Bonds 3,240,000 - 3,240,000 - Less discount on bonds (634,839) 37,485 (597,354) - Total $ 27,050,161 $$ (697,515) $ 26,352,646 $ 785,000 The Bonds are payable solely from the revenues generated by the Denton Property and are secured by the revenues pledged and assigned under the terms of the Trust Indenture. The Town of Westlake does not have any liability for the payment of the bonds as the bonds are non-recourse to both the Town of Westlake and Texas Student Housing Authority. Interest rates on the bonds range from 5.00% to 11.00% and are payable semi-annually on July 1 and January 1 of each year thereafter. At September 30, 2014, the Project was not in compliance with certain covenants of the Indenture including insufficient funds in some of the required funds discussed in Note 2 and a fixed charges ratio less than 1.0. In addition, all required principal payments on the Series B bonds had not been made as of September 30, 2014. Upon certain events of default either the trustee, or owners of not less than 25% in aggregate principal of the bonds then outstanding, may declare the principal and all interest then due to be immediately due and payable. 58 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 5. LONG-TERM DEBT — CONTINUED Discretely Presented Long-term Debt — Continued Texas Student Housing Corporation — The Ridge at North Texas — Continued The debt service requirements of the bonds are as follows: Year Ending September 30, Past Due 2015 2016 2017 2018 2019 2020-2024 2025-2029 2030-2034 Principal $ 1,240,000 785,000 835,000 950,000 1,020,000 1,085,000 6,710,000 9,500,000 4,825,000 Interest $ 6,459,199 1,837,405 1,784,418 1,728,055 1,661,593 1,589,980 6,683,473 3,905,638 531,508 Total Requirements $ 7,699,199 2,622,405 2,619,418 2,678,055 2,681,593 2,674,980 13,393,473 13,405,638 5,356,508 $ 26,950,000 $ 26,181,269 $ 53,131,269 Texas Student Housing Authority — Town Lake Austin Project The bonds are payable solely from the revenues generated by the Project and are secured by the revenues pledged and assigned under the terms of the Trust Indenture. Interest rates on the bonds range from 7.76% to 8.69% at present and principal and interest payments are made monthly. 59 Amounts Beginning Ending Due Within Balance Increases Decreses Balance One Year Revenue Bonds: 2002 A-1 Bonds $ 15,216,509 $ $ (326,017) $ 14,890,492 $ 354,491 2002 A-2 Bonds 5,089,241 5,089,241 - Total $ 20,305,750 $$ (326,017) $ 19,979,733 $ 354,491 The bonds are payable solely from the revenues generated by the Project and are secured by the revenues pledged and assigned under the terms of the Trust Indenture. Interest rates on the bonds range from 7.76% to 8.69% at present and principal and interest payments are made monthly. 59 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 5. LONG-TERM DEBT — CONTINUED Discretely Presented Long-term Debt — Continued Texas Student Housing Authority — Town Lake Austin Project — Continued The future debt service requirements of the bonds are as follows: Year Ending September 30, Past Due 2015 2016 2017 2018 2019 2020-2024 2025-2029 2030-2033 Total Principal 354,491 382,998 413,797 447,074 483,026 3,064,148 4,510,942 10,323,257 $ 19,979,733 Interest $ 3,345,538 1,914,271 1,508,639 1,477,840 1,444,563 1,408,611 6,394,037 4,947,243 2,467,629 $ 24,908,371 Texas Student Housing Authority — Cambridge at College Station The Project's installment note payable is summarized as follows: Lender/Security/Due/Date Cambridge Student Housing Financing Company, L.P.; substantially all assets and assignment of rents: due November 1, 2039 Total Requirements $ 3,345,538 2,268,762 1,891,637 1,891,637 1,891,637 1,891,637 9,458,185 9,458,185 12,790,886 $ 44,888,104 Rate Balance 8.00% $ 29,885,000 The following is a summary of long-term debt transactions of the Project for the year ended August 31, 2014: Amounts Beginning Ending Due Within Balance Increases Decreases Balance One Year $ 30,310,000 $ - $ (425,000) .E $ 29,885,000 $ 515,000 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 5. LONG-TERM DEBT— CONTINUED Discretely Presented Long-term Debt — Continued Texas Student Housing Authority — Cambridge at College Station — Continued The debt is to be amortized through 2040 with varying payments. The annual requirements to amortize the Project's outstanding installment notes payable as of September 30, 2014 are as follows: Year Ending September 30, 2014 Past Due 2015 2016 2017 2018 2019 2020-2024 2025-2029 2030-2034 2035-2039 2040 Governmental Activities Principal Interest $ 255,000 515,000 555,000 600,000 645,000 720,000 3,525,000 3,325,000 4,790,000 6,915,000 8,040,000 $ 11,161,489 1,838,003 1,795,820 1,751,328 1,703,325 1,650,637 7,371,300 6,173,200 4,653,750 2,442,720 103,808 Total $ 11,416,489 2,353,003 2,350,820 2,351,328 2,348,325 2,370,637 10,896,300 9,498,200 9,443, 750 9,357,720 8,143,808 Total $ 29,885,000 $ 40,645,380 $ 70,530,380 Class C and D bonds are in default and the property does not generate enough revenue to pay the debt obligations. All of the Class C and D bonds issued remain outstanding as of September 30, 2014. Each class has certain rights and privileges, as contained in the private placement memorandum. As a part of the offering, the Project entered into a trust agreement with J. P. Morgan Trust Company, N.A. (the Trustee) for the purpose of determining that each class is paid in accordance with the private placement memorandum. At September 30, 2014, the Project was not in compliance with the fixed charge coverage ratio. As a result, the lender may accelerate the maturity of the unpaid portion of the principal payable under the installment sale agreement. However, the Authority does not anticipate this event will occur, since foreclosure by private interests would result in the loss of tax-exempt status for the Project. The Town of Westlake does not have any liability for the payment of debt of the discretely presented component units as the bonds are non-recourse to both the Town and Texas Student Housing Authority. 61 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 6. UNEARNED REVENUE / DEFERRED INFLOWS OF RESOURCES Unearned revenue in the proprietary fund of $318,352 relates to the collection of the entire amount due on eight Ductbank leases as follows: one 25 -year lease with AT&T local network services; five leases with Verizon Southwest ranging from 20 to 30 years; one 5 - year lease with MCI Metro; and one 5 -year lease with L3 Communications for use of the Town's Ductbank. Governmental funds report deferred inflows of resources in connection with receivables for revenue that is not considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year, deferred inflows of resources reported in the governmental funds consist of $14,353 and $1,486 of unavailable property taxes in the general fund and debt service fund, respectively; and $106,129 of grants to be used primarily in the subsequent fiscal year in the Westlake Academy fund. NOTE 7. INTERLOCAL AGREEMENT WITH THE CITY OF SOUTHLAKE In August 1995, the Town entered into an agreement with the City of Southlake to allow the Town to utilize capacity in a sewer line and to set forth their respective rights and obligations with respect to the sewer line owned by the City of Southlake. The Town is obligated to share in the cost of construction, operation and maintenance of the water sewer line. The sewer line was constructed in 2000. Additionally, the Town must pay the City of Southlake all transportation, treatment and related costs allocable to the metered flow of sewage from the Town into the sewer line. NOTE 8. FEDERAL AND STATE PROGRAM REVENUES The Town received financial assistance from various federal and state governmental agencies in the form of grants for Westlake Academy. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any unallowed disbursement resulting from such audits becomes a liability of the Town. In the opinion of the Town management, no material refunds will be required as a result of unallowed disbursements (if any) by the grantor agencies. Sources of federal and state program revenues for the year ended September 30, 2014, were as follows: Source Federal program revenues: U.S. Department of Eduation - Passed through State Department of Education Westlake Academy Total federal program revenues: $ 80,103 State program revenues: State Department of Education $ 5,269,641 62 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 9. INTERFUND BALANCES AND TRANSACTIONS Interfund receivables and payables at September 30, 2014, were as follows: Due from Due to Other Funds Other Funds General fund $ 157,353 Nonmajor governmental funds: 413 Economic Development Fund - Economic Development Fund 11,983 $ 11,983 157,353 $ 169,336 $ 169,336 The 413 Economic Development Corporation fund amount of $157,353 payable to the General Fund is related to debt service payment reimbursement. Inter -fund transfers are reported in the governmental funds and proprietary fund financial statements. In the government -wide statements, inter -fund transfers are eliminated within the governmental activities column and business -type column, as appropriate. Transfers are used to (1) move revenues collected in the special revenue funds to finance various programs in accordance with budgetary authorizations, (2) move receipts restricted for debt service from the funds collecting the receipts to the Debt Service fund as debt service payments become due, (3) reimburse one fund for services provided to another fund, (4) move unrestricted General fund revenues to Capital Project fund as determined by the Council for capital projects, and (5) transfer payment for economic development agreements to the Economic Development fund. Individual fund transfers for fiscal year 2014 were as follows: Transfer out Transfer in Amount Purpose General Fund Nonmajor governmental $ 35,758 Payment to Fidelity (Phase 1) General Fund Debt Service Fund 544,656 Debt service payments General Fund Westlake Academy Expansion 630,000 Payment for the expansion project General Fund Nonmajor governmental 11,983 Economic development Utility Fund General Fund 43,399 Collection of Ft. Worth Impact Fees Nonmajor governmental Debt Service Fund 1,181,695 Debt service payments Capital Projects Westlake Academy Expansion 200,000 Payments for parking lot expenses Nonmajor governmental General Fund 13,020 Visitors association Nonmajor governmental Debt Service Fund 151,700 Debt service payments General Fund Westlake Academy 90,000 Facility and technology contributions General Fund Westlake Academy 192,000 Payment for the expansion project $ 3,094,211 63 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 10. WATER PURCHASE AND WASTEWATER TREATMENT CONTRACTS The Town has a contract with the City of Fort Worth, Texas, to purchase water. Under the contract, the Town may obtain from the City of Fort Worth, a supply of potable water at a reasonable rate based on water usage. The rate charges are subject to minimum annual contract payments. Water expense for the year ended September 30, 2014 was $1,048,219. NOTE 11. RETIREMENT PLAN Plan Description The Town provides pension benefits for all of its eligible employees through a non- traditional, joint contributory, hybrid defined benefit plan in the statewide Texas Municipal Retirement System (TMRS), an agent multiple -employer public employee retirement system. The plan provisions that have been adopted by the Town are within the options available in the governing state statutes of TMRS. TMRS issues a publicly -available comprehensive annual financial report that includes financial statements and required supplementary information (RSI) for TMRS; the report also provides detailed explanations of the contributions, benefits and actuarial methods and assumptions used by the System. This report may be obtained from TMRS' website at www.TMRS.com. The plan provisions are adopted by the governing body of the Town, within the options available in the state statutes governing TMRS. Plan provisions for the Town were as follows: Contributions Under the state law governing TMRS, the contribution rate for each town is determined annually by the actuary, using the Early Age Normal (EAN) actuarial cost method (EAN was first used in the December 31, 2013 valuation; previously the Projected Unit Credit actuarial costs method had been used). This rate consists of the normal cost contribution rate and the prior service cost contribution rate, which is calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the portion of an active member's projected benefit allocated annually; the prior service contribution rate amortizes the unfunded (overfunded) actuarial liability (asset) over the applicable period for that city. Both the normal cost and prior service contribution rates include recognition of the projected impact of annually repeating benefits, such as Updated Service Credits and Annuity Increases. 64 Plan Year 2013 Plan Year 2014 Employee deposit rate 7.0% 7.0% Matching ration (town to employee) 2 to 1 2 to 1 Years required for Vesting 5 5 Service retirement eligibility (expressed as age/years of service) 60/5,0/20 60/5, 0/20 Updated sevice credit 100% repeating, 100% repeating, transfers transfers Annuity increase (to retirees) 0% of CPI 0% of CPI repeating repeating Contributions Under the state law governing TMRS, the contribution rate for each town is determined annually by the actuary, using the Early Age Normal (EAN) actuarial cost method (EAN was first used in the December 31, 2013 valuation; previously the Projected Unit Credit actuarial costs method had been used). This rate consists of the normal cost contribution rate and the prior service cost contribution rate, which is calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the portion of an active member's projected benefit allocated annually; the prior service contribution rate amortizes the unfunded (overfunded) actuarial liability (asset) over the applicable period for that city. Both the normal cost and prior service contribution rates include recognition of the projected impact of annually repeating benefits, such as Updated Service Credits and Annuity Increases. 64 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 11. RETIREMENT PLAN —CONTINUED Contributions — Continued The Town contributes to the TMRS Plan at an actuarially determined rate. Both the employees and the Town make contributions monthly. Since the Town needs to know its contribution rate in advance for budgetary purposes, there is a one-year delay between the actuarial valuation that serves as the basis for the rate and the calendar year when the rate goes into effect. Accounting Annual Actual Percentage Net Year Pension Contribution of APC Pension Ending Cost (APC) Made Contributed Obligation 9/30/2012 $ 132,882 $ 132,882 100% - 9/30/2013 135,813 135,813 100% - 9/30/2014 179,250 179,250 100% - The required contribution rates for fiscal year 2014 were determined as part of the December 31, 2011 and 2012 actuarial valuations. Additional information as of the latest actuarial valuation, December 31, 2013, also follows: Valuation Date Actuarial Cost Method Amortization Method GASB 25 Equivalent Single Amortization Period Amortization Period for New Gains/Losses Asset Valuation Method Actuarial Assumptions: Investment Rate of Return' Projected Salary Increases' " Includes Inflation at Cost -of -Living Adjustments 12/31/2011 12/31/2012 12/31/2013 Projected Unit Credit Level percent of payroll 21.3years; closed period 25 years 10 -year Smoothed Market 7.0% Varies by age and service 3.0% 0.0% 65 Projected Unit Credit Level percent of payroll 20.9 years closed period 25 years 10 -year Smoothed Market 7.0% Varies by age and service 3.0% 0.0% Entry Age Normal Level percent of payroll 30.0 years closed period 25 years 10 -year Smoothed Market 7.0% Varies by age and service 3.0% 0.0% TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 11. RETIREMENT PLAN —CONTINUED Contributions — Continued The funded status as of December 31, 2013, under the actuarial valuation, is presented as follows: Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Actuarial calculations are based on the benefits provided under the terms of the substantive plan in effect at the time of each valuation, and reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The schedule of funding progress, presented as Required Supplementary Information following the notes to the financial statements, present multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability of benefits. Other Postemployment Benefits Supplemental Death Benefits Fund The Town also participates in the cost sharing multiple -employer defined benefit group term life insurance plan operated by the Texas Municipal Retirement System (TMRS) known as the Supplemental Death Benefits Fund (SDBF). The Town elected, by ordinance to provide group term life insurance coverage to both current and retired employees. The Town may terminate coverage under and discontinue participation in the SDBF by adopting an ordinance before November 1 of any year to be effective the following January 1. The death benefit for active employees provides a lump sum payment approximately equal to the employee's annual salary (calculated based on the employee's actual earnings, for the 12 -month period preceding the month of death); retired employees are insured for $7,500; this coverage is an "other postemployment benefit," or OPEB. Unfunded Unfunded Actuarial Actuarial Actuarial Actuarial Actuarial Accured Liability Valuation Value of Accrued Funded Accrued Covered as a Percentage Date Assets Liability Ratio Liability Payroll of Covered Payroll 12/31/2010 $ 1,863,399 $ 2,197,161 84.8% $333,762 $ 1,534,927 21.7% 12/31/2011 2,226,028 2,631,416 84.6% 405,388 1,759,432 23.0% 12/31/2012 2,611,474 3,086,228 84.6% 474,754 1,876,305 25.3% 12/31/2013 3,024,883 3,669,053 82.4% 644,170 1,936,016 33.3% Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Actuarial calculations are based on the benefits provided under the terms of the substantive plan in effect at the time of each valuation, and reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The schedule of funding progress, presented as Required Supplementary Information following the notes to the financial statements, present multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability of benefits. Other Postemployment Benefits Supplemental Death Benefits Fund The Town also participates in the cost sharing multiple -employer defined benefit group term life insurance plan operated by the Texas Municipal Retirement System (TMRS) known as the Supplemental Death Benefits Fund (SDBF). The Town elected, by ordinance to provide group term life insurance coverage to both current and retired employees. The Town may terminate coverage under and discontinue participation in the SDBF by adopting an ordinance before November 1 of any year to be effective the following January 1. The death benefit for active employees provides a lump sum payment approximately equal to the employee's annual salary (calculated based on the employee's actual earnings, for the 12 -month period preceding the month of death); retired employees are insured for $7,500; this coverage is an "other postemployment benefit," or OPEB. TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 11. RETIREMENT PLAN —CONTINUED Other Postemployment Benefits — Continued Contributions The Town contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation. The rate is equal to the cost of providing one-year term life insurance. The funding policy for the SDBF program is to assure that adequate resources are available to meet all death benefit payments for the upcoming year; the intent is not to pre -fund retiree term life insurance during employees' entire careers. The Town's contributions to the TMRS SDBF for the years ended September 30, 2014 and 2013 were $2,637 and $2,270, respectively. NOTE 12. RISK MANAGEMENT The Town is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets; errors and omissions; injuries to employees, and natural disasters. The Town's general liability, workers' compensation liability, law enforcement liability, errors and omissions liability, and automobile liability coverage is insured by the Texas Municipal League, a public entity risk pool. The Town's only responsibility to the Texas Municipal League is to pay premiums for insurance and related deductible amounts of these policies. Other risk of loss is covered by commercial insurance. Settlements of claims have not exceeded coverage in the past three years. NOTE 13. CONTINGENT LIABILITIES Litigation Various claims and lawsuits are pending against the Town. In the opinion of Town management, after consultation with legal counsel, the potential loss on these claims and lawsuits will not materially affect the Town's financial position. Circle T Municipal Utility Districts The Town and Hillwood are currently in discussions regarding the debt for Municipal Utility District's (MUDs) #1 and #3 on the Circle T property in Westlake which is controlled by AIL Investments, L.P. As this property develops, Hillwood agreed to de - annex developed property from the MUDs in exchange for pro -rata payments on water and sewer infrastructure installed by the MUDs at their inception. To date, two projects, Chrysler Financial and Deloitte University, have been or are being developed within these MUDs. Discussions regarding the Town's payment to AIL Investments, L.P. in exchange for de -annexation of these two tracks from the Circle T MUDs have taken place but have not come to a conclusion as to the settlement amounts. These discussions are ongoing until the Town receives full documentation that it determines is adequate to support the requested payments. The Town of Westlake holds full rights and privileges under the State granted Certificate of Convenience and Necessity (CCN) and can serve all water and sewer customers within these MUD boundaries regardless of the status of these negotiations. 67 TOWN OF WESTLAKE NOTES TO THE FINANCIAL STATEMENTS NOTE 14. SUBSEQUENT EVENTS Fire Loss On December 31, 2014, the Town's fire department suffered a loss due to a fire in the living quarters. During a Town Council Emergency Meeting on January 8, 2015, $200,000 was approved for expenditures related to the loss. Firefighters are staying in temporary living quarters until replacement accommodations can be built. Land for a permanent fire station is currently being explored. Special Assessment Revenue Bond Issue On February 5, 2015, the Town issued $26,175,000 of Special Assessment Revenue Bonds, Series 2015 related to the Solana Public Improvement District (the District) which was created by the Town on February 24, 2014. The proceeds from the issue will be used as follows: payment of a portion of the costs of construction, acquisition, or purchase of certain water, wastewater and roadway public improvements for the benefit of the District; funding a reserve fund; funding capitalized interest; payment of a portion of the costs incidental to the organization of the District; and payment of the cost of issuance of the bonds. The bonds are special obligations of the Town payable solely from special assessments levied against parcels within the District and other pledged funds held under the indenture relating to the bonds. The bonds do not give rise to a charge against the general credit or taxing powers of the Town. NOTE 15. CUMULATIVE EFFECT OF ADOPTION OF GASB STATEMENT NO. 65 As a result of the implementation of GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, an adjustment has been made to write of all unamortized bond issuance costs from previous years. As a result, governmental activities beginning net position has been decreased by $647,443. NOTE 16. GOING CONCERN The 2014 financial statements were prepared assuming the Texas Student Housing entities will continue as going concerns. The Texas Student Housing entities' bonds payable are considered to be in default due to not making full principal and interest payments and, therefore, are reported as current liabilities. This is considered an event of default by the Trustees, which gives the bondholders the right to accelerate and demand payment of the bonds in full. Management and the property managers are in the process of developing and implementing plans to increase occupancy and rental rates at the properties to improve their financial performance. Texas Student Housing - Ballpark Austin was unsuccessful in identifying sufficient funds to cure its maturity default and entered into a termination agreement with the bondholder, which resulted in the foreclosure and sale of the Ballpark Austin property in satisfaction of the bonds subsequent to year end. .: REQUIRED SUPPLEMENTARY INFORMATION TOWN OF WESTLAKE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 50,520 50,520 EXHIBIT B-1 5,899 Transfers out General Fund (1,313,524) (1,504,397) (190,873) Note proceeds - - Variance 34,710 Budgeted Amounts (1,116,011) Favorable (1,413,268) Orginal Amended Actual (Unfavorable) REVENUES: (253) 901,887 902,140 FUND BALANCE AT BEGINNING OF YEAR Taxes 7,051,631 7,051,631 - FUND BALANCE AT END OF YEAR Sales $ 3,150,000 $ 3,275,000 $ 3,471,344 $ 196,344 Property 1,189,825 1,189,825 1,198,374 8,549 Mixed beverages 50,000 50,000 51,602 1,602 Franchise 650,388 787,508 795,322 7,814 Interest income 10,420 10,420 10,503 83 Building permits and fees 786,000 1,008,500 1,175,075 166,575 Fines and penalties 570,000 645,000 730,441 85,441 Intergovernmental - - 3,540 3,540 Miscellaneous 51,759 55,959 70,338 14,379 Total revenues 6,458,392 7,022,212 7,506,539 484,327 EXPENDITURES: Current General government 2,465,611 2,674,111 2,236,360 437,751 Public safety 2,267,644 2,267,644 2,146,587 121,057 Cultural and recreation 157,518 152,518 123,541 28,977 Public works 791,010 631,849 615,781 16,068 Capital outlay 29,020 15,000 20,875 (5,875) Debt service Principal retirement - 18,339 47,440 (29,101) Interest and other fiscal charges - - 800 (800) Total expenditures 5,710,803 5,759,461 5,191,384 568,077 Excess of revenues over expenditures 747,589 1,262,751 2,315,155 1,052,404 OTHER FINANCING SOURCES (USES) Transfers in 50,520 50,520 56,419 5,899 Transfers out (1,166,531) (1,313,524) (1,504,397) (190,873) Note proceeds - - 34,710 34,710 Net other financing sources (uses) (1,116,011) (1,263,004) (1,413,268) (150,264) NET CHANGE IN FUND BALANCE (368,422) (253) 901,887 902,140 FUND BALANCE AT BEGINNING OF YEAR 7,051,631 7,051,631 7,051,631 - FUND BALANCE AT END OF YEAR $ 6,683,209 $ 7,051,378 $ 7,953,518 $ 902,140 .• TOWN OF WESTLAKE SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - WESTLAKE ACADEMY FOR THE YEAR ENDED SEPTEMBER 30, 2014 REVENUES: State program revenues Federal program revenues Interest income Miscellaneous Total revenues EXPENDITURES: Education Interest and other fiscal charges Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES Transfers in Capital lease proceeds Total other financing sources NET CHANGE IN FUND BALANCE FUND BALANCE AT BEGINNING OF YEAR FUND BALANCE AT END OF YEAR EXHIBIT B-2 Westlake Academ 6,461,662 7,164,475 6,704,719 (459,756) 6,390,294 6,976,597 6,405 Variance Budgeted Amounts 6,983,002 Favorable Orginal Final Actual (Unfavorable) $ 4,855,506 $5,110,628 $ 5,269,641 $ 159,013 67,722 80,008 80,103 95 2,500 2,500 1,450 (1,050) 1,535,934 1,971,339 1,353,525 (617,814) 6,461,662 7,164,475 6,704,719 (459,756) 6,390,294 6,976,597 6,405 6,405 6,396,699 6,983,002 64,963 181,473 256,266 - 256,266 64,963 437,739 992,981 992,981 7,143,678 (167,081) 3,733 2,672 7,147,411 (164,409) (442,692) (624,165) 282,000 25,734 239,009 239,009 521,009 264,743 78,317 (359,422) 992,981 $ 1,057,944 $1,430,720 $ 1,071,298 $ (359,422) 70 TOWN OF WESTLAKE NOTES TO REQUIRED SUPPLEMENTARY INFORMATION Budgetary Information -The Town follows these procedures annually in establishing the budgetary data reflected in the budgetary comparison schedules: The Town Manager submits to the Town Council a proposed budget for the fiscal year commencing the following October 1. The budget includes proposed expenditures and the means of financing them. 2. Prior to October 1, the budget is legally adopted through passage of an ordinance. This budget is reported as the Original Budget in the budgetary comparison schedules. 3. During the fiscal year, changes to the adopted budget may be authorized, as follows: a. Items requiring Town Council action - appropriation of fund balance reserves; transfers of appropriations between funds; new inter -fund loans or advances; and creation of new capital projects or increases to existing capital projects. b. Items delegated to the Town Manager - appropriation balances from an expenditure account to another within a single fund. 4. Annual budgets are legally adopted and amended as required for the general, special revenue and debt service funds. Project length budgets are adopted for the capital projects funds. All budgets are adopted on a basis consistent with generally accepting accounting principles. Budgets are adopted for the proprietary funds annually only as a management tool. There are no legally mandated budgetary constraints for the proprietary funds. 5. Budget amounts are reflected after all authorized amendments and revisions. This budget is reported as the Final Budget in the budgetary comparison schedules. 6. The appropriated budget is prepared by fund, function and department. The Town's management may make transfers of appropriations within a fund. Transfers of appropriations between funds require the approval of the Town Council. The legal level of budgetary control is the fund level. The Town Council made several supplementary budget appropriations during the year. 7. 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. Encumbrances lapse at year-end and do not constitute expenditures or liabilities because the commitments must be re -appropriated and honored during the subsequent year. 8. Expenditures exceeded appropriations in the capital outlay and debt service of the General Fund and total expenditures exceeded appropriations in the Westlake Academy Fund. 71 EXHIBIT B-3 TOWN OF WESTLAKE SCHEDULE OF FUNDING PROGRESS TEXAS MUNICIPAL RETIREMENT SYSTEM FOR THE YEAR ENDED SEPTEMBER 30, 2014 (UNAUDITED) 72 Unfunded Unfunded Actuarial Actuarial Actuarial Actuarial Actuarial Accured Liability Valuation Value of Accrued Funded Accrued Covered as a Percentage Date Assets Liability Ratio Liability Payroll of Covered Payroll 12/31/2010 $ 1,863,399 $ 2,197,161 84.8% $333,762 $ 1,534,927 21.7% 12/31/2011 2,226,028 2,631,416 84.6% 405,388 1,759,432 23.0% 12/31/2012 2,611,474 3,086,228 84.6% 474,754 1,876,305 25.3% 12/31/2013 3,024,883 3,669,053 82.4% 644,170 1,936,016 33.3% 72 TOWN OF WESTLAKE COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES TOWN OF WESTLAKE TOWN OF WESTLAKE SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - DEBT SERVICE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 REVENUES: Taxes Property Total revenues EXPENDITURES: Debt service Principal retirement Interest and other fiscal charges Bond issuance costs Total expenditures Deficiency of revenues under expenditures OTHER FINANCING SOURCES (USES) Transfers in Refunding bonds issued Payment to refunding bond escrow agent Premium on refunding bonds issued Net other financing sources (uses) NET CHANGE IN FUND BALANCE FUND BALANCE AT BEGINNING OF YEAR FUND BALANCE AT END OF YEAR EXHIBIT C-1 73 Debt Service Fund Variance Budgeted Amounts Favorable Original Amended Actual (Unfavorable) $ 153,868 $ 140,522 $ 154,982 $ 14,460 153,868 140,522 154,982 14,460 938,000 927,000 927,000 - 1,152,226 1,151,834 1,106,434 45,400 - - 69,283 (69,283) 2,090,226 2,078,834 2,102,717 (23,883) (1,936,358) (1,938,312) (1,947,735) (9,423) 1,936,358 1,924,966 1,878,051 (46,915) - - 1,910,000 1,910,000 (1,925,315) (1,925,315) - - 84,598 84,598 1,936,358 1,924,966 1,947,334 22,368 - (13,346) (401) 12,945 1,482 1,482 1,482 - $ 1,482 $ (11,864) $ 1,081 $ 12,945 73 TOWN OF WESTLAKE NONMAJOR GOVERNMENTAL FUNDS Visitors Association Fund To account for municipal hotel occupancy taxes collected and expenditures to promote tourism and the convention and hotel industry. Lone Star Public Facilities Corporation To account for investment activity relating to the Lone Star Public Facilities Corporation. Economic Development Fund To account for sales tax and hotel occupancy tax collected to fund activity relating to Economic Development agreements. 4B Economic Development Corporation To account for sales tax collected to fund the activities of the 4B Economic Development Corporation. 74 EXHIBIT C-2 TOWN OF WESTLAKE COMBINING BALANCE SHEET NON MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2014 LIABILITIES AND FUND BALANCES Accounts payable $ 30,122 $ $ 67,477 $ $ 97,599 Unearned revenue 1,820 - 1,820 Due to other funds - - 157,353 157,353 Total liabilities 31,942 67,477 157,353 256,772 FUND BALANCES Nonspendable: Prepaid items 2,818 - - 2,818 Restricted for: Tourism 1,107, 520 1,107,520 Future projects - 13,620 13,620 Unassigned - - - Total fund balances 1,110,338 13,620 1,123,958 Total liabilities and fund balances $ 1,142,280 $ 13,620 $ 67,477 $ 157,353 $ 1,380,730 75 Lone Star Public 46 Economic Total Facilities Economic Development Nonmajor Visitors Corporation Development Corporation Governmental Association Fund Fund Fund Funds ASSETS Cash and cash equivalents $ 1,076,628 $ 13,620 $ 32,217 $ - $ 1,122,465 Receivables: (net of allowances for uncollectibles) Accounts receivable 62,834 - 23,277 157,353 243,464 Due from other funds - 11,983 - 11,983 Other assets 2,818 - - - 2,818 Total assets $ 1,142,280 $ 13,620 $ 67,477 $ 157,353 $ 1,380,730 LIABILITIES AND FUND BALANCES Accounts payable $ 30,122 $ $ 67,477 $ $ 97,599 Unearned revenue 1,820 - 1,820 Due to other funds - - 157,353 157,353 Total liabilities 31,942 67,477 157,353 256,772 FUND BALANCES Nonspendable: Prepaid items 2,818 - - 2,818 Restricted for: Tourism 1,107, 520 1,107,520 Future projects - 13,620 13,620 Unassigned - - - Total fund balances 1,110,338 13,620 1,123,958 Total liabilities and fund balances $ 1,142,280 $ 13,620 $ 67,477 $ 157,353 $ 1,380,730 75 EXHIBIT C-3 TOWN OF WESTLAKE COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2014 EXPENDITURES Current: Economic development - Lone Star 147,680 5 147,685 Visitor services 493,082 Public - 413 Economic 493,082 Debt service Facilities Economic Development Total Nonmajor Principal retirement Visitors Corporation Development Corporation Governmental Interest and other fiscal charges Association Fund Fund Fund Funds REVENUES 493,082 183,439 5 676,526 Sales $ - $ $ 73,040 $ 1,181,461 $ 1,254,501 Hotel occupancy 733,823 21 62,658 - 796,481 Interest income 1,604 21 - 239 1,864 Contributions 1,974 47,741 - 1,974 Miscellaneous 4,100 - - 4,100 Total revenues 741,501 21 135,698 1,181,700 2,058,920 EXPENDITURES Current: Economic development - 147,680 5 147,685 Visitor services 493,082 - 493,082 Debt service Principal retirement - 30,237 30,237 Interest and other fiscal charges - 5,522 - 5,522 Total expenditures 493,082 183,439 5 676,526 Excess (deficiency) of revenues over(under)expenditures 248,419 21 (47,741) 1,181,695 1,382,394 OTHER FINANCING SOURCES (USES) Transfers in - 47,741 - 47,741 Transfers out (164,720) - (1,181,695) (1,346,415) Total other financing sources (uses) (164,720) - 47,741 (1,181,695) (1,298,674) Net change in fund balances 83,699 21 - 83,720 Fund balances, October 1 1,026,639 13,599 1,040,238 Fund balances, September 30 $ 1,110,338 $ 13,620 $ $ $ 1,123,958 M, EXHIBIT C-4 TOWN OF WESTLAKE SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - VISITORS ASSOCIATION FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 FUND BALANCE AT END OF YEAR $ 1,048,417 $ 1,056,040 $ 1,110,338 $ 54,298 77 Visitors Association Fund Variance Budgeted Amounts Favorable Orginal Amended Actual (Unfavorable) REVENUES: Taxes Hotel occupancy $ 700,000 $ 700,000 $ 733,823 $ 33,823 Interest income 2,900 2,900 1,604 (1,296) Contributions 6,810 6,810 1,974 (4,836) Miscellaneous 11,840 11,840 4,100 (7,740) Total revenues 721,550 721,550 741,501 19,951 EXPENDITURES: Visitor services 535,052 527,429 493,082 34,347 Total expenditures 535,052 527,429 493,082 34,347 Excess of revenues over expenditures 186,498 194,121 248,419 54,298 OTHER FINANCING USES Transfers out (164,720) (164,720) (164,720) - Total other financing uses (164,720) (164,720) (164,720) - NET CHANGE IN FUND BALANCE 21,778 29,401 83,699 54,298 FUND BALANCE AT BEGINNING OF YEAR 1,026,639 1,026,639 1,026,639 - FUND BALANCE AT END OF YEAR $ 1,048,417 $ 1,056,040 $ 1,110,338 $ 54,298 77 EXHIBIT C-5 TOWN OF WESTLAKE SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - LONE STAR PUBLIC FACILITIES CORPORATION FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 Lone Star Public Facilities Corporation Variance Budgeted Amounts Favorable Orginal Amended Actual (Unfavorable) REVENUES: Interest income $ 45 $ 45 $ 21 $ (24) Total revenues 45 45 21 (24) EXPENDITURES: General government - - - - Total expenditures - - - - NET CHANGE IN FUND BALANCE 45 45 21 (24) FUND BALANCE AT BEGINNING OF YEAR 13,599 13,599 13,599 - FUND BALANCE AT END OF YEAR $ 13,644 $ 13,644 $ 13,620 $ (24) 78 TOWN OF WESTLAKE SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - ECONOMIC DEVELOPMENT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 REVENUES: Taxes Sales Hotel occupancy Total revenues EXPENDITURES: Economic development Debt service Principal retirement Interest and other fiscal charges Total expenditures Deficiency of revenues under expenditures OTHER FINANCING SOURCES Transfers in Total other financing sources NET CHANGE IN FUND BALANCE FUND BALANCE AT BEGINNING OF YEAR FUND BALANCE AT END OF YEAR EXHIBIT C-6 Economic Development Fund Variance Budgeted Amounts Favorable Orginal Amended Actual (Unfavorable) $ 150,000 $ 100,000 $ 73,040 $ (26,960) - 70,000 62,658 (7,342) 150,000 170,000 135,698 (34,302) 150,000 170,000 147,680 22,320 30,237 30,237 30,237 - 5,522 5,522 5,522 - 185,759 205,759 183,439 22,320 (35,759) (35,759) (47,741) (11,982) 35,759 35,759 47,741 11,982 35,759 35,759 47,741 11,982 79 EXHIBIT C-7 TOWN OF WESTLAKE SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - 4B ECONOMIC DEVELOPMENT CORPORATION FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 413 Economic Development Corporation Variance Budgeted Amounts Favorable Orginal Amended Actual (Unfavorable) REVENUES: Taxes Sales $ 1,100,000 $ 1,125,000 $ 1,181,461 $ 56,461 Interest income 500 500 239 (261) Total revenues 1,100,500 1,125,500 1,181,700 56,200 EXPENDITURES: Economic development - - 5 (5) Total expenditures - - 5 (5) Excess of revenues over expenditures 1,100,500 1,125,500 1,181,695 56,195 OTHER FINANCING USES Transfers out (1,100,500) (1,125,500) (1,181,695) (56,195) Total other financing uses (1,100,500) (1,125,500) (1,181,695) (56,195) NET CHANGE IN FUND BALANCE - - - FUND BALANCE AT BEGINNING OF YEAR - - - - FUND BALANCE AT END OF YEAR $ - $ - $ - $ - STATISTICAL SECTION TOWN OF WESTLAKE STATISTICAL SECTION (UNAUDITED) This part of the Town of Westlake, Texas' comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information says about the Town's overall financial health. Contents Financial Trends Page These schedules contain trend information to help the reader understand how the Town's financial performance and well- being have changed over time. 82-87 Revenue Capacity These schedules contain information to help the reader assess the Town's most significant local revenue sources. Although sales taxes are the Town's most significant local revenue source, information about principal revenue payers is confidential under Texas statutes, and; therefore, not disclosed. Trend information about sales tax revenue is provided in Exhibit S-9. Debt Capacity These schedules present information to help the reader assess the affordability of the Town's current levels of outstanding debt and the Town's ability to issue additional debt in the future. 93-95 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the Town's financial activities take place. 96-97 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the Town's financial report relates to the services the Town provides and the activities it performs. 98-100 Sources: Unless otherwise noted, the information in these schedules is derived from annual financial reports for the relevant year. 81 EXHIBIT S-1 TOWN OF WESTLAKE NET POSITION BY COMPONENT LAST TEN YEARS (ACCRUAL BASIS OF ACCOUNTING - UNAUDITED) Total governmental activities net position $ 9,533,304 $ 13,602,288 $ 14,671,957 $ 16,154,257 $ 19,127,942 $ 21,064,399 $ 23,244,383 $ 24,616,406 $ 32,057,541 $ 33,422,961 Business -type activities: Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Governmental activities: $ 6,734,414 Unrestricted ( 1,621,273) ( 1,846,851) ( 2,008,243) ( 1,997,281) ( 1,945,578) ( 2,003,600) ( 1,542,092) Invested in capital assets, net of related debt $ 7,975,910 $ 9,171,657 $ 9,646,644 $ 10,313,743 $ 13,244,690 $ 13,633,485 $ 12,658,921 $ 14,866,299 $ 21,177,426 $ 32,048,991 Restricted - 1,406,756 1,719,771 2,004,763 1,761,067 1,564,868 7,137,362 4,726,376 4,243,239 2,284,947 Unrestricted 1,557,394 3,023,875 3,305,542 3,835,751 4,122,185 5,866,046 3,448,100 5,023,731 6,636,876 ( 910,977) Total governmental activities net position $ 9,533,304 $ 13,602,288 $ 14,671,957 $ 16,154,257 $ 19,127,942 $ 21,064,399 $ 23,244,383 $ 24,616,406 $ 32,057,541 $ 33,422,961 Business -type activities: Invested in capital assets, net of related debt $ 8,450,781 $ 8,436,729 $ 8,097,807 $ 7,726,576 $ 7,349,032 $ 7,033,831 $ 6,875,031 $ 6,877,555 $ 6,601,949 $ 6,734,414 Unrestricted ( 1,621,273) ( 1,846,851) ( 2,008,243) ( 1,997,281) ( 1,945,578) ( 2,003,600) ( 1,542,092) ( 1,636,249) ( 842,457) ( 1,272,014) Total business -type activities net position $ 6,829,508 $ 6,589,878 $ 6,089,564 $ 5,729,295 $ 5,403,454 $ 5,030,231 $ 5,332,939 $ 5,241,306 $ 5,759,492 $ 5,462,400 Primary government: Invested in capital assets, net of related debt $ 16,426,691 $ 17,608,386 $ 17,744,451 $ 18,040,319 $ 20,593,722 $ 20,667,316 $ 19,533,952 $ 21,743,854 $ 27,779,375 $ 38,783,405 Restricted - 1,406,756 1,719,771 2,004,763 1,761,067 1,564,868 7,137,362 4,726,376 4,243,239 2,284,947 Unrestricted ( 63,879) 1,177,024 1,297,299 1,838,470 2,176,607 3,862,446 1,906,008 3,387,482 5,794,419 (2,182,991) Total primary government net position $ 16,362,812 $ 20,192,166 $ 20,761,521 $ 21,883,552 $ 24,531,396 $ 26,094,630 $ 28,577,322 $ 29,857,712 $ 37,817,033 $ 38,885,361 Source: Annual financial reports EXHIBIT S-2 (CONTINUED) TOWN OF WESTLAKE CHANGES IN NET POSITION LAST TEN YEARS (ACCRUAL BASIS OF ACCOUNTING - UNAUDITED) 83 Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 EXPENSES Governmental activities: General government $ 2,162,365 $ 1,811,281 $ 1,941,289 $ 2,031,460 $ 2,203,882 $ 2,272,127 $ 2,478,826 $ 2,518,490 $ 2,606,785 $ 2,784,587 Public Safety 1,592,962 1,705,528 1,738,080 1,795,782 1,939,441 1,698,164 1,801,585 1,883,424 1,978,803 2,190,050 Cultural and Recreation 96,617 91,444 86,560 129,641 115,770 105,997 122,400 111,765 113,924 123,541 Public Works 342,500 613,956 455,481 1,013,804 1,028,934 594,705 470,054 216,901 267,973 955,794 Economic Development 349,208 35,759 120,753 473,451 207,044 309,653 680,823 546,039 626,423 147,680 Visitor Services 448,604 393,115 217,992 312,777 341,270 420,270 356,365 475,719 521,521 493,087 Education 2,166,256 2,249,998 2,672,698 3,305,220 3,722,705 4,138,875 4,884,985 6,193,560 5,803,611 7,147,411 Interest on long-term debt 1,028,104 1,021,779 869,327 991,184 1,068,935 1,026,026 1,127,913 897,573 1,031,328 998,951 Total governmental activities expenses 8,186,616 7,922,860 8,102,180 10,053,319 10,627,981 10,565,817 11,922,951 12,843,471 12,950,368 14,841,101 Business -type activities: Water and Sewer 1,888,064 2,137,831 2,206,618 2,410,765 2,694,407 2,567,675 2,794,235 3,098,466 3,356,466 3,690,137 Cemetery - - 13,299 473 27,822 5,604 6,282 5,328 7,121 Total business -type activities expenses 1,888,064 2,137,831 2,206,618 2,424,064 2,694,880 2,595,497 2,799,839 3,104,748 3,361,794 3,697,258 Total primary government program expense $ 10,074,680 $ 10,060,691 $ 10,308,798 $ 12,477,383 $ 13,322,861 $ 13,161,314 $ 14,722,790 $ 15,948,219 $ 16,312,162 $ 18,538,359 PROGRAM REVENUES Governmental activities: Fees, fines, and charges for services: General Government $ 1,039,214 $ 742,176 $ 785,771 $ 522,215 $ 677,948 $ 716,624 $ 721,157 $ 673,090 $ 774,909 $ 33,975 Public Safety 45,213 136,870 165,255 113,755 107,634 80,665 140,600 142,402 182,154 848,772 Public Works 711,655 699,753 625,340 902,875 594,338 1,597,655 292,572 407,328 659,246 1,022,769 Education 39,430 98,357 85,925 42,839 98,314 102,406 99,638 195,059 182,220 222,270 Operating grants and contributions 1,646,438 3,686,964 1,257,058 1,296,378 1,522,935 853,151 728,242 5,269,841 4,907,472 6,592,642 Capital grants and contributions 141,139 1,455,626 - - 2,059,624 83,250 425,900 - 5,897,456 80,472 Total governmental activities program revel 3,623,089 6,819,746 2,919,349 2,878,062 5,060,793 3,433,751 2,408,109 6,687,720 12,603,457 8,800,900 Business -type activities: Charges for services: Water and Sewer 1,722,659 1,842,238 1,657,186 2,037,306 2,345,236 2,101,510 3,078,868 2,934,842 3,157,332 3,428,702 Cemetery 2,100 - 5,550 13,300 4,500 5,510 7,749 Operating grants and contributions 370,551 19,653 - - 46,810 - 24,423 - - Capital grants and contributions - - 169,034 - - - - - - Total business -type activities program revel 2,093,210 1,861,891 1,657,186 2,208,440 2,345,236 2,153,870 3,092,168 2,963,765 3,162,842 3,436,451 Total primary government program revenue $ 5,716,299 $ 8,681,637 $ 4,576,535 $ 5,086,502 $ 7,406,029 $ 5,587,621 $ 5,500,277 $ 9,651,485 $ 15,766,299 $ 12,237,351 83 TOWN OF WESTLAKE CHANGES IN NET POSITION LAST TEN YEARS (ACCRUAL BASIS OF ACCOUNTING - UNAUDITED) NET (EXPENSE) REVENUES Governmental activities Business -type activities Total primary government net expense GENERAL REVENUES AND OTHER CHANGES IN NET POSITION Governmental activities: Taxes Sales Property Hotel Occupancy Mixed Beverage Franchise Unrestricted grants and contributions Investment earnings Miscellaneous Transfers Extraordinary item Special item Gain on sale of capital assets Total governmental activities Business -type activities: Investment earnings Miscellaneous Transfers Total business -type activities Total primary government CHANGE IN NET POSITION Governmental activities Business -type activities Total primary government Source: Annual financial reports EXHIBIT S-2 (CONCLUDED) Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $( 4,563,527) $( 1,103,114) $( 5,182,831) $( 7,175,257) $( 5,567,188) $( 7,132,066) $( 9,514,842) $( 6,155,751) $( 346,911) $( 6,040,201) 205,146 ( 275,940) ( 549,432) ( 215,624) ( 349,644) ( 441,627) 292,329 ( 140,983) ( 198,952) ( 260,807) ( 4,358,381) ( 1,379,054) ( 5,732,263) ( 7,390,881) ( 5,916,832) ( 7,573,693) ( 9,222,513) ( 6,296,734) ( 545,863) ( 6,301,008) $ 994,606 $ 1,810,706 $ 2,197,756 $ 3,590,575 $ 3,664,409 $ 3,790,533 $ 4,609,626 $ 3,657,274 $ 4,375,397 $ 4,725,845 1,260,112 1,441,238 1,366,633 1,367,069 381,221 415,544 458,471 527,662 497,769 457,693 527,261 590,853 709,578 796,481 13,846 13,674 14,066 16,177 17,869 17,902 19,721 38,286 39,727 51,602 352,115 457,004 560,312 649,108 624,401 603,233 586,836 664,991 734,935 795,322 1,722,198 1,822,200 2,259,643 2,500,817 2,960,590 3,484,141 3,744,757 - - - 41,802 98,824 261,622 188,459 61,224 38,383 46,248 33,353 24,218 26,713 64,047 448,827 466,654 564,973 568,782 676,638 691,345 1,112,858 1,023,149 246,633 71,857 45,319 33,976 220,819 61,321 - 145,216 45,507 ( 485,591) 43,399 56,704 ( 124,346) - - - 67,760 - - - - - - 7,000 - - - 3,641,692 5,112,098 6,252,500 8,258,590 8,456,365 9,068,523 11,694,826 7,527,774 7,788,046 8,053,064 2,416 25,604 46,158 32,103 7,858 8,334 9,929 10,077 6,552 7,114 - 56,025 36,936 44,071 77,266 60,070 145,666 84,780 224,995 - ( 71,857) ( 45,319) ( 33,976) ( 220,819) ( 61,321) ( 145,216) ( 45,507) 485,591 ( 43,399) 69,441) 36,310 49,118 ( 144,645) 23,803 68,404 10,379 49,350 717,138 ( 36,285) 3,572,251 5,148,408 6,301,618 8,113,945 8,480,168 9,136,927 11,705,205 7,577,124 8,505,184 8,016,779 ( 921,835) 4,008,984 1,069,669 1,083,333 2,889,177 1,936,457 2,179,984 1,372,023 7,441,135 2,012,863 135,705 ( 239,630) ( 500,314) ( 360,269) ( 325,841) ( 373,223] 302,708 ( 91,633) 518,186 ( 297,092] $( 786,130) $ 3,769,354 $ 569,355 $ 723,064 $ 2,563,336 $ 1,563,234 $ 2,482,692 $ 1,280,390 $ 7,959,321 $ 1,715,771 84 EXHIBIT S-3 TOWN OF WESTLAKE FUND BALANCES GOVERNMENTAL FUNDS LAST TEN YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING - UNAUDITED) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 General fund Reserved $ 131,657 $ 434,375 $ 563,176 $ 303,639 $ 193,105 $ 214,750 $ $ - $ $ - Unreserved 805,769 2,850,789 2,533,123 2,503,099 2,532,207 3,578,235 Nonspendable: Prepaid items 62,020 6,856 6,906 8,821 Restricted for: Future projects 219,687 49,941 74,941 80,442 Committed for: Court security and technology 186,776 192,768 194,422 193,082 Assigned for: Future equipment 22,000 22,000 24,000 - Unassigned - - - - - - 3,524,911 4,992,240 6,751,362 7,671,173 Total general fund $ 937,426 $ 3,285,164 $ 3,096,299 $ 2,806,738 $ 2,725,312 $ 3,792,985 $ 4,015,394 $ 5,263,805 $ 7,051,631 $ 7,953,518 All other governmental funds Reserved Special revenue funds $ 779,244 $ 869,694 $ 1,183,020 $ 1,527,724 $ 1,256,954 $ 1,112,941 $ $ $ $ Unreserved, reported in: Special revenue funds 181,960 427,720 846,214 1,666,371 1,933,564 2,693,846 - Nonspendable: Prepaid items 33,511 60,963 62,635 80,118 Restricted for: Tourism 1,109,365 1,052,546 1,025,891 1,107,520 Future projects 4,647,863 3,594,379 10,370,914 1,751,405 Debt service 7,505 22,657 1,482 1,081 Education 885,365 758,127 931,094 993,998 Economic development 267,577 178,384 - - Capital projects funds 102,687 102,376 3,233,471 323,009 237,177 - - Unassigned - - - - - - - - - Total all other governmental funds $ 961,204 $ 1,400,101 $ 2,131,610 $ 6,427,566 $ 3,513,527 $ 4,043,964 $ 6,951,186 $ 5,667,056 $ 12,392,016 $ 3,934,122 Note: Economic Development Funds were classified as special revenue funds through FY 2002 and considered discretely presented component units through FY 2007. Upon further consideration, the 413 Economic Development Corporation and Lone Star Public Facility Corporation funds are now classified as blended component units. The Town implemented GASB Statement No. 54 in fiscal year 2011. Source: Annual financial reports 85 TOWN OF WESTLAKE CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS LAST TEN YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING - UNAUDITED) REVENUES Taxes Licenses, fees and permits Fines and penalties State program revenues Federal program revenues Investment earnings Contributions Other revenues Total revenues EXPENDITURES General government Public safety Cultural and recreation Public works Economic development Visitor services Education Capital Outlay Capital Project Debt service Principal Interest and other fiscal charges Bond issuance cost Total expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES EXHIBIT S-4 (CONTINUED) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ 1,741,788 $ 2,696,928 $ 3,230,605 $ 4,783,522 $ 4,804,448 $ 4,869,361 $ 7,000,690 $ 6,393,472 $ 7,226,180 7,722,606 740,027 748,016 900,121 1,108,083 860,697 1,746,954 530,646 598,394 944,735 1,175,075 1,007,142 751,036 651,090 554,376 523,515 647,170 605,705 622,338 695,167 730,441 1,597,362 1,925,043 2,387,733 2,673,680 3,163,129 3,687,706 3,945,658 4,369,635 4,696,540 5,269,641 285,392 75,662 49,200 75,207 56,134 199,436 337,508 152,351 81,958 80,103 41,786 98,824 261,622 188,459 61,224 38,383 46,248 33,353 24,218 26,713 1,324,264 4,964,085 1,079,768 1,048,308 1,264,262 533,400 - 732,535 5,916,014 82,446 292,690 547,184 552,579 607,812 673,400 779,044 980,816 1,323,237 1,274,826 1,665,003 7,030,451 11,806,778 9,112,718 11,039,447 11,406,809 12,501,454 13,447,271 14,225,315 20,859,638 16,752,028 2,243,162 2,542,295 1,385,492 1,516,346 1,519,600 1,644,587 1,733,324 1,878,885 1,910,545 2,236,360 1,554,115 1,627,641 1,665,879 1,731,317 1,890,469 1,634,936 1,842,751 2,224,469 1,967,584 2,146,587 96,617 91,444 86,560 129,641 115,770 105,997 122,400 111,765 113,924 123,541 112,764 434,716 276,789 846,604 841,822 333,831 326,749 391,115 532,675 615,781 35,758 35,759 141,197 495,071 229,907 401,879 706,391 243,939 296,565 147,685 448,604 393,115 226,992 312,777 341,270 420,270 356,365 475,719 521,521 493,082 1,877,398 2,249,998 2,672,698 3,305,220 3,722,705 4,138,875 4,884,985 6,193,560 5,762,652 7,143,678 263,681 371,860 836,787 463,918 4,335,114 682,103 1,023,772 1,110,476 7,601,631 9,964,047 - 350,000 470,000 395,000 593,937 563,703 555,000 668,000 2,955,000 1,004,677 1,028,104 1,028,634 1,240,950 923,944 990,641 977,163 1,083,377 952,027 830,425 1,116,489 - - - 33,000 - 36,446 148,891 185,699 69,283 7,660,203 9,125,462 9,003,344 10,152,838 14,581,235 10,903,344 12,671,560 14,398,846 22,678,221 25,061,210 $( 629,752) $ 2,681,316 $ 109,374 $ 886,609 $( 3,174,426) $ 1,598,110 $ 775,711 $( 173,531) $( 1,818,583) $( 8,309,182) M. EXHIBIT S-4 (CONCLUDED) TOWN OF WESTLAKE CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS LAST TEN YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING - UNAUDITED) Total other financing sources (uses) 484,096 45,319 433,270 2,720,819 178,961 - 2,353,920 137,812 10,331,369 753,175 Prior period adjustment - 60,000 - - - - NET CHANGES IN FUND BALANCES $( 145,656) $ 2,786,635 $ 542,644 $ 3,607,428 $( 2,995,465) $ 1,598,110 $ 3,129,631 $( 35,719) $ 8,512,786 $( 7,556,007) DEBT SERVICE AS A PERCENTAGE OF NONCAPITAL EXPENDITURES 13.9% 15.7% 20.9% 13.6% 15.4% 15.0% 14.1% 12.51/. 25.3% 14.4% Note: Economic Development Funds were classified as special revenue funds through FY 2002 and considered discretely presented component units through FY 2007. Upon further consideration, the 4B Economic Development Corporation and Lone Star Public Facility Corporation funds are now classified as blended component units. Source: Annual Financial Reports 87 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 OTHER FINANCING SOURCES (USES): Proceeds from sale of land $ 412,239 $ $ $ - $ - $ $ - $ - $ $ Sale of assets 7,000 Issuance of debt - 2,500,000 117,640 2,095,000 8,294,800 Premium on CO issued 284,437 - Refunding bonds issued 7,465,000 - - - 7,799,196 2,200,000 1,910,000 Premium on refunding bonds issued 37,723 84,598 Payments to bond escrow agent ( 7,088,706) ( 7,650,305) - (1,925,315) Proceeds from capital ease 23,000 239,009 Notes payable issued 50,000 - - 401,484 Special item - 67,760 40,959 - Extraordinary item 56,704 ( 124,346) ( 40,959) - Transfers in 172,010 704,577 1,212,558 2,160,174 2,435,486 1,804,577 7,082,163 2,121,099 2,104,929 3,094,211 Transfers out ( 100,153) ( 659,258) ( 1,178,582) ( 1,939,355) ( 2,374,165) ( 1,804,577) ( 6,936,947) ( 2,075,592) ( 2,590,520) 3,050,812 Total other financing sources (uses) 484,096 45,319 433,270 2,720,819 178,961 - 2,353,920 137,812 10,331,369 753,175 Prior period adjustment - 60,000 - - - - NET CHANGES IN FUND BALANCES $( 145,656) $ 2,786,635 $ 542,644 $ 3,607,428 $( 2,995,465) $ 1,598,110 $ 3,129,631 $( 35,719) $ 8,512,786 $( 7,556,007) DEBT SERVICE AS A PERCENTAGE OF NONCAPITAL EXPENDITURES 13.9% 15.7% 20.9% 13.6% 15.4% 15.0% 14.1% 12.51/. 25.3% 14.4% Note: Economic Development Funds were classified as special revenue funds through FY 2002 and considered discretely presented component units through FY 2007. Upon further consideration, the 4B Economic Development Corporation and Lone Star Public Facility Corporation funds are now classified as blended component units. Source: Annual Financial Reports 87 EXHIBIT S-5 TOWN OF WESTLAKE ASSESED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST FOUR FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING - UNAUDITED) Appraised Value Less: Total Taxable Total Fiscal Real Personal Tax -Exempt Assessed Direct Year Property Property Property Value Tax Rate 2011 $ 951,070,355 $ 70,569,170 $ 143,856,142 $ 877,783,383 0.1601 2012 1,016,474,604 85,329,823 156,315,552 945,488,875 0.15684 2013 1,099,249,031 122,792,343 335,814,215 886,227,159 0.15684 2014 1,091,142,760 151,927,427 346,730,543 896,339,644 0.15634 Note: Prior to fiscal year ended September 30, 2011, the Town of Westlake did not assess an ad valorem tax. Source: Tarrant County Appraisal District Denton Central Appraisal District TOWN OF WESTLAKE PRINCIPAL PROPERTY TAX PAYERS CURRENT AND THREE YEARS AGO (UNAUDITED) Taxuaver 5 Village Circle Holdings LP FMR Texas, LLC/LTD Partnership DCLI, LLC Fidelity Investments Inc. Marsh USA Inc Lexington TNI Westlake LP Corelogic Solutions LLC Prince Whipple Trust Levi Strauss & Company Vaquero Club, Inc. Total Source: Tarrant County Appraisal District 2014 Percentage Taxable of Total Town Assessed Taxable Value Rank Assessed Value $ 140,613,560 1 15.69% 71,938,529 2 8.03% 52,633,131 3 5.87% 26,383,422 4 2.94% 21,098,171 5 2.35% 14,700,000 6 1.64% 14,473,635 7 1.61% 6,850,000 8 0.76% 5,903,735 9 0.66% 5,383,415 10 0.60% $ 359,977,598 4.46% 40.16% EXHIBIT S-6 Note: (1) Prior to fiscal year ended September 30, 2011, the Town of Westlake did not assess an ad valorem tax. (2) Total Taxable Assessed Value including real and personal property for tax year 2010 (fiscal year 2011) is $877,783,383 (3) Total Taxable Assessed Value including real and personal property for tax year 2013 (fiscal year 2014) is $896,339,644 :• 2011 Percentage Taxable of Total Town Assessed Taxable Taxpayer Value Rank Assessed Value Maguire Thomas Partners, etal $ 116,839,380 1 13.31% FMR Texas, LLC/LTD Partnership 154,220,911 2 17.57% Maguire Partners 39,117,985 3 4.46% Lexington TNI Westlake LP 18,249,200 4 2.08% First American Leasing/Real Estate 17,636,457 5 2.01% DCLI, LLC 13,234,691 6 1.51% Fidelity Investments 12,277,810 7 1.40% Levi Strauss & Co. 8,215,271 8 0.94% Westlake Terra, LLC 7,400,002 9 0.84% EMC Corp 6,418,484 10 0.73% Total $ 393,610,191 44.84% Note: (1) Prior to fiscal year ended September 30, 2011, the Town of Westlake did not assess an ad valorem tax. (2) Total Taxable Assessed Value including real and personal property for tax year 2010 (fiscal year 2011) is $877,783,383 (3) Total Taxable Assessed Value including real and personal property for tax year 2013 (fiscal year 2014) is $896,339,644 :• TOWN OF WESTLAKE PROPERTY TAX LEVIES AND COLLECTIONS LAST FOUR FISCAL YEARS (UNAUDITED) 2013 1,398,777 45,297 1,353,480 1,352,097 99.90% 2014 1,405,819 44,761 1,361,058 1,350,639 99.23% Note: Prior to fiscal year ended September 30, 2011, the Town of Westlake did not assess an ad valorem tax. Source: Tarrant County Appraisal District Denton Central Appraisal District .11 (451) EXHIBIT S-7 Total Collections to Date Percentage Amount of Levy Collected within the $ 1,361,606 99.94% 1,437,908 99.87% Fiscal Year 99.90% 1,350,188 Taxes Levied Adjusted of the Levy Collections Fiscal for the Adjustments Taxes Levied Percent in Subsequent Year Fiscal Year to Levy for Fiscal Year Amount of Levy Years 2011 $ 1,409,956 $ 47,560 $ 1,362,396 $ 1,356,050 99.53% 5,556 2012 1,486,968 47,220 1,439,748 1,437,908 99.87% 2013 1,398,777 45,297 1,353,480 1,352,097 99.90% 2014 1,405,819 44,761 1,361,058 1,350,639 99.23% Note: Prior to fiscal year ended September 30, 2011, the Town of Westlake did not assess an ad valorem tax. Source: Tarrant County Appraisal District Denton Central Appraisal District .11 (451) EXHIBIT S-7 Total Collections to Date Percentage Amount of Levy $ 1,361,606 99.94% 1,437,908 99.87% 1,352,097 99.90% 1,350,188 99.20% EXHIBIT S-8 TOWN OF WESTLAKE DIRECT AND OVERLAPPING PROPERTY TAX RATES (PER $100 OF ASSESSED VALUE) LAST FOUR FISCAL YEARS (UNAUDITED) Notes: Prior to fiscal year ended September 30, 2011, the Town of Westlake did not assess an advalorem tax. Overlapping rates are those of local and county governments that apply to property owners within the Town of Westlake. Not all overlapping rates apply to all Town's property owners (e.g., the rates for the counties and school districts apply only to the proportion of the Town's property owners whose property is located within the geographic boundaries of the county and school district) Source: Tarrant County Appraisal District Denton Central Appraisal District 91 City Direct Rates Overlapping Rates Operating/ School Districts Counties Tarrant Tarrant Trophy Total Fiscal General Debt Service Total (A) Carroll Northwest Keller Denton Tarrant County County Club Direct and Year Fund Fund Direct ISD ISD ISD County County College Dist Hospital Dist. MUD #1 Overlapping 2011 0.15620 0.00390 0.16010 1.41500 1.37500 1.53060 0.27736 0.26400 0.13764 0.22790 0.19500 5.58259 2012 0.13835 0.01849 0.15684 1.41500 1.37500 1.54000 0.28287 0.26400 0.14897 0.22790 0.17500 5.58557 2013 0.14197 0.01487 0.15684 1.40000 1.37500 1.54000 0.28287 0.26400 0.14897 0.22790 0.13339 5.52896 2014 0.13710 0.01924 0.15634 1.40000 1.45250 1.54000 0.27220 0.26400 0.14950 0.22790 0.13339 5.59583 Notes: Prior to fiscal year ended September 30, 2011, the Town of Westlake did not assess an advalorem tax. Overlapping rates are those of local and county governments that apply to property owners within the Town of Westlake. Not all overlapping rates apply to all Town's property owners (e.g., the rates for the counties and school districts apply only to the proportion of the Town's property owners whose property is located within the geographic boundaries of the county and school district) Source: Tarrant County Appraisal District Denton Central Appraisal District 91 TOWN OF WESTLAKE TAXABLE SALES BY INDUSTRY TYPE LAST NINE FISCAL YEARS (UNAUDITED) NAICS Industry Type 11 Agriculture, Forestry, Fishing and Hunting 21 Mining 22 Utilities 23 Construction 31-33 Manufacturing 42 Wholesale Trade 44-45 Retail 48-49 Transportation and Warehousing 51 Information 52 Financial and Insurance 53 Real Estate and Rental and Leasing 54 Professional, Scientific, and Technical Services 56 Admin and Support and Waste Mgmt & Rem Sry 61 Education Services 62 Health Care and Social Assistance 71 Arts, Entertainment and Recreation 72 Accommodation and Food Services 81 Other Services (except Public Administration) 92 Public Administration EXHIBIT S-9 Fiscal Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ 31 $ 67 $ 182 $ 210 $ - $ 60 $ 38 $ 163 $ 731 2,321 - 2,109 20 400 4,260 3,050 335 15 463,222 212,336 230,072 186,773 178,693 180,032 171,131 176,622 204,280 81,542 200,791 998,867 1,043,752 68,306 132,780 139,000 365,049 239,888 1,120,328 360,010 371,193 430,515 386,492 402,062 526,755 295,660 375,905 248,702 284,082 142,999 138,456 105,557 145,631 134,466 59,571 421,371 408,556 253,293 610,119 648,597 1,097,007 707,553 1,106,427 1,132,811 962,244 63 491 791 556 316 1,156 3,662 1,962 538,210 223,672 320,848 377,828 423,834 508,609 367,298 378,221 623,828 10,162 343,446 107,319 68,936 87,188 73,455 27,857 75,529 505,585 178,047 204,398 138,879 154,315 327,207 210,158 215,754 457,693 493,570 111,746 452,018 199,700 192,008 202,263 231,526 221,331 536,971 242,069 245,562 45,809 127,779 22,319 39,539 65,045 39,027 110,686 103,340 895 317 282 2,980 619,228 1,675,351 356,689 373,117 153,279 10 - 238 - 170 106 251 11,018 49,474 224,101 199,876 174,485 158,996 206,050 204,456 184,687 191,343 34,021 57,084 130,923 140,344 140,996 175,938 93,123 204,044 221,061 130,476 130,392 18,576 1,756 4,462 4,632 9,805 13,156 17,412 170 - - - 11 1 135 295 27,243 $ 3,623,538 $ 2,992,307 $ 3,599,960 $ 3,584,084 $ 3,840,735 $ 4,723,628 $ 3,617,604 $ 4,368,521 $ 4,796,144 Town direct sales tax rate 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Note: Information on sales tax by NAICS was not available prior to 2006. Comparison will be made to the prior year until ten-year prior comparison can be made. Due to confidentiality issues, the names of the ten largest revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources of the Town's sales tax revenue Source: Texas State Comptroller reports M EXHIBIT S-10 TOWN OF WESTLAKE RATIOS OF GENERAL BONDED DEBT OUSTANDING LAST TEN FISCAL YEARS Notes: Details regarding the Town's outstanding debt can be found in the notes to the financial statements. There was no debt issued until fiscal year 2000. See Table 13 for personal income and population data. 93 General Bonded Debt Outstanding Percentage General Certificates of Actual Fiscal Obligation of Taxable Per Year Bonds Obligation Total Sales Capita 2005 $ _ $ 18,810,000 $ 18,810,000 18.91% $ 52,986 2006 _ 18,460,000 18,460,000 10.19% 26,447 2007 7,365,000 11,755,000 19,120,000 13.05% 27,198 2008 9,850,000 11,375,000 21,225,000 11.82% 27,038 2009 9,735,000 10,975,000 20,710,000 11.30% 25,791 2010 9,630,000 10,555,000 20,185,000 10.65% 23,831 2011 8,962,656 12,210,000 21,172,656 9.19% 21,343 2012 16,770,000 4,877,000 21,647,000 11.84% 20,369 2013 16,590,000 13,622,000 30,212,000 13.81% 27,251 2014 18,260,000 11,044,000 29,304,000 12.40% 24,748 Notes: Details regarding the Town's outstanding debt can be found in the notes to the financial statements. There was no debt issued until fiscal year 2000. See Table 13 for personal income and population data. 93 TOWN OF WESTLAKE RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (UNAUDITED) EXHIBIT S-11 Business -Type Governmental Activities Activities General Certificates Other Certificates Total Percentage Fiscal Obligation of Capital Contractual of Primary of Personal Per Year Bonds Obligation Leases Loans Obligations Obligation Government Income Capita 2004 $ - $ 12,400,000 $ - $ - $ 6,027,387 $ 18,427,387 45% $ 56,181 2005 - 18,810,000 - - 5,980,921 24,790,921 55% 69,834 2006 - 18,460,000 - - 5,878,381 24,338,381 27% 34,869 2007 7,365,000 11,755,000 23,000 - 5,822,299 24,965,299 27% 35,513 2008 9,850,000 11,375,000 15,264 - 5,763,022 27,003,286 23% 34,399 2009 9,735,000 10,975,000 46,559 - 5,734,191 26,490,750 22% 32,990 2010 9,630,000 10,555,000 - - 5,658,888 25,843,888 25% 30,512 2011 8,962,656 12,210,000 - 50,000 5,580,380 26,803,036 21% 27,019 2012 16,770,000 4,877,000 - 34,075 5,498,668 27,179,743 20% 25,576 2013 16,590,000 13,622,000 - 18,150 5,412,149 35,642,299 24% 32,150 2014 18,260,000 10,029,800 237,378 437,253 5,320,824 1,014,200 35,299,455 22% 29,812 Note Details regarding the Town's outstanding debt can be found in the notes to the financial statements. No debt was issued until fiscal year 2000. See Table 13 for personal income and population data. 94 TOWN OF WESTLAKE DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30, 2014 (UNAUDITED) Total Overlapping Debt Town of Westlake Outstanding Debt Total Direct & Overlapping Debt EXHIBIT S-12 Overlapping Percent (1) Amount of Taxing Body Debt Outstanding As of Carroll ISD $ 226,024,791 9/30/2014 Denton County 614,975,000 9/30/2014 Keller ISD 654,308,399 9/30/2014 Northwest ISD 737,438,319 9/30/2014 Tarrant County 317,820,000 9/30/2014 Tarrant County College District 7,935,000 9/30/2014 Tarrant County Hospital District 24,425,000 9/30/2014 Trophy Club MUD#1 5,520,000 9/30/2014 Total Overlapping Debt Town of Westlake Outstanding Debt Total Direct & Overlapping Debt EXHIBIT S-12 Overlapping Percent (1) Amount 5.26% $ 11,888,904 0.02% 122,995 4.68% 30,621,633 1.71% 12,610,195 0.78% 2,478,996 0.78% 61,893 0.78% 190,515 18.76% 1,035,552 59,010,683 35,299,455 $ 94,310,138 Source: Texas Municipal Report prepared by employees of the Municipal Advisory Council of Texas ("MAC") Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Town. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the Town of Westlake. This process recognized that, when considering the Town's ability to issue and repay long-term debt, the entire debt burden borne by the resident and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. (1) The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the entity's taxable assessed value that is within the Town's boundaries and dividing it by the entities' total taxable assessed value. 95 TOWN OF WESTLAKE DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS (UNAUDITED) Calendar Year Estimated Population EXHIBIT S-13 Per Capita Tarrant County Personal Personal Unemployment Income Income Rate 2005 355 45,292,916 127,586 5.1% 2006 698 90,835,901 130,137 4.6% 2007 703 93,316,319 132,740 4.3% 2008 785 115,891,905 147,633 5.1% 2009 803 120,920,285 150,586 8.1% 2010 847 102,852,057 121,431 8.1% 2011 992 126,678,400 127,700 7.9% 2012 1,063 138,423,531 130,254 6.2% 2013 1,109 147,292,890 132,859 6.0% 2014 1,184 160,462,095 135,516 5.0% Sources: Population for 2000 is from the 2000 census. Fiscal Years 2001 through 2003 are estimated. The Town took over the utilility billing in 2004 and estimated the population by using number of residential water accounts and assuming a 2.5 average household size. 2010 Census shows median household income at $250,000. Due to the influx of residents coming to Westlake Academy, surveys have shown that there are approximately 1.28 school-age children in each household; therefore, we will use a 3.23 average household size to calculate population. Tarrant County Unemployment Rate information taken from Texas Workforce Commission. American Community Survey (ACS) USA.com - Per Capita Income source North Central Texas Council of Governments/US Census 2010 Estimated Population 1400 1200 1,109 1,184 992 1000 785847 800 3 600 355 400 200 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 •v� Note: Information on the Principal Employers from 2005 is not available. Information will be accumulated over the next ten years. Comparisons will be made to the first available data until ten years can be compared. Source: Cassidy Turley tenant records and contact with employers of the Town 97 EXHIBIT S-14 TOWN OF WESTLAKE PRINCIPAL EMPLOYERS CURRENT AND SEVEN YEARS AGO (UNAUDITED) 2007 2014 Percentage Percentage of Estimated of Estimated Total Town Total Town Employer Employees Employment Employer Employees Employment Fidelity Investments 5,003 47.10% Fidelity Investments 3,100 37.15% Core Logic 1,790 16.85% First American/Core Logic 3,000 35.95% Wells Fargo 574 5.40% Chrysler Financial/TD Auto Finance 325 3.89% Deloitte 478 4.50% Wells Fargo 790 9.47% TD Auto Finance 390 3.67% McKesson Corporation 215 2.58% Sabre JLL Facilities 317 2.98% Sonitrol/World Factory 165 1.98% First American Title 262 2.47% Walco 150 1.80% Verizon Wireless 331 3.12% Vaquero Club 140 1.68% Town of Westlake/Westlake Academy 128 1.20% Marriott Solana Hotel 120 1.44% Vaquero Country Club 123 1.16% Pfizer, Inc. 115 1.38% Marriott Solana Hotel 108 1.02% Town of Westlake/Westlake Academy 73 0.87% Travelocity 90 0.85% Premier Academy 34 0.41% Lev Strauss 80 0.75% Solara Healthcare 28 0.34% Total 9,674 91% Total 8,255 99% Note: Information on the Principal Employers from 2005 is not available. Information will be accumulated over the next ten years. Comparisons will be made to the first available data until ten years can be compared. Source: Cassidy Turley tenant records and contact with employers of the Town 97 TOWN OF WESTLAKE FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) Function/Program 2005 2006 2007 2008 2009 2010 2011 General government 0.75 1.00 0.50 1.33 1.50 1.66 1.00 Town manager 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Assistant Town Manager 3.00 4.00 1.33 2.00 2.00 Assistant to Town Manager 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Administrative 0.50 0.50 0.00 0.00 0.75 0.50 0.75 Building official 1.00 1.00 1.00 1.00 1.33 1.33 1.33 Town secretary 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Facilities/Grounds maintenance 0.50 0.50 0.50 0.75 1.08 1.08 1.08 Municipal 3.75 3.75 4.00 4.00 4.25 4.50 4.50 Finance 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Payroll/Human Resources 0.00 0.00 0.00 1.00 1.33 1.33 1.33 Information Technology Public safety (EMS) 10.00 11.00 11.00 11.00 9.00 9.00 9.00 Culture and recreation 0.50 0.50 0.50 0.75 0.75 0.75 0.75 Public works 1.00 1.00 1.00 1.50 1.50 1.50 1.50 Marketing and public affairs 1.00 1.00 0.00 0.00 0.00 0.00 0.00 Education 25.15 32.40 36.40 43.00 48.10 55.62 59.44 Total 49.40 57.65 60.40 69.00 74.09 81.61 85.68 Source: Prior Town budgets and Academy personnel records Note: A full time municipal employee is scheduled to work 2,080 hours per year (including vacation and sick leave). Fulltime equivalent employment is calculated by dividing total labor hours by 2,080. A full time education employee is scheduled to work 1,122 hours per year. EXHIBIT S-15 2012 2013 2014 1.00 1.00 1.00 0.75 0.90 0.75 0.00 0.00 0.75 1.00 0.50 1.33 1.50 1.66 1.00 1.00 1.00 0.83 1.00 1.09 3.75 4.75 5.10 3.00 3.00 4.00 1.33 2.00 2.00 1.00 9.00 10.00 13.25 0.50 0.75 0.84 2.00 3.00 2.66 1.00 1.00 2.00 67.48 76.18 91.18 93.72 106.93 128.18 EXHIBIT S-16 TOWN OF WESTLAKE OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) Function/Program 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 General government Permits issued 240 194 162 93 61 44 70 85 132 144 Permit values $ 67,536,744 $ 47,464,851 $ 67,101,543 $ 188,578,581 $ 21,051,297 $ 190,388,737 $ 21,173,592 $ 29,481,047 $ 50,544,048 $ 59,358,904 Police (Contract with Keller PD) Motor vehicle stops 9,586 8,992 10,045 10,357 9,247 9,763 9,829 12,221 9,993 9,579 Traffic accident investigations 163 164 225 208 266 273 348 343 322 341 Part I crimes 26 30 25 26 23 19 30 39 9 15 DWI arrests 86 56 53 45 24 32 80 50 69 55 Fire/EMS Fire runs 148 136 153 169 118 172 191 181 238 211 Ambulance runs 135 207 251 159 184 187 264 266 286 240 Inspections 89 161 96 132 15 71 71 54 96 286 Public Works - General Street resurfacing (LF) - 7,128 5,333 - - - 3,800 30,000 - - Potholes repaired 40.00 20.00 0.00 20.00 10.00 5.00 36.00 6.00 2.00 6.00 Public Works - Utility Number of water accounts 271 338 386 419 437 478 500 568 614 651 Water main breaks 3 3 2 4 5 6 4 4 3 1 Avg daily consumption MG (water) 0.817 1.031 0.729 0.999 1.020 0.889 1.200 1.100 1.090 1.045 Peak daily consumption MG (water) 2.198 2.677 1.978 2.060 2.740 2.460 2.540 2.600 2.480 2.690 System capacity - MG (water) 1.685 1.685 1.685 1.685 1.685 1.685 1.685 1.685 1.685 2.685 Water purchased (in gallons x 000) 298„124 376,264 266,158 364,764 372,933 324,843 443,222 407,305 401,457 381,482 Water sold (in gallons x 1000) 230,657 338,085 246,280 340,743 313,495 290,000 385,320 376,496 357,297 347,148 Wastewater Number of new sewer connections 179 211 235 240 251 254 245 292 325 350 Avg daily sewage treatment 0.1270 0.1320 0.1370 0.124 0.101 0.063 0.163 0.136 0.151 0.208 (thousands of gallons) Source: Various Town departments Notes: N/A represents information that is unavailable •• EXHIBIT S-17 TOWN OF WESTLAKE CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) Function/Program 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Fire 2 2 Acreage 14 14 19 Playgrounds 2 2 2 Softball/soccer field 1 1 1 Stations 1 1 1 1 1 1 1 1 1 1 1 Public Works - Utility 1 1 1 1 1 1 1 1 1 1 Pump station 1 1 1 1 1 1 1 1 1 1 1 Lift station 2 2 2 2 2 2 3 3 3 3 3 Telecommunications Duct Bank (LF) 36,703 38,303 38,303 38,303 43,703 49,103 51,803 57,783 57,783 57,783 59,936 Telecommunications Duct Bank Manholes 91 95 95 95 104 113 122 122 122 122 122 Water Water mains (LF) 52,000 57,500 58,300 59,200 64,600 70,000 79,000 130,000 137,891 137,891 142,694 Fire hydrants 76 95 119 119 130 130 154 188 191 191 201 Storage capacity MG 1,685 1,685 1,685 1,685 1,685 1,685 1,685 1,685 1,685 1,685 2,685 Wastewater Sanitary sewers (LF) 20,000 15,000 35,000 35,000 39,300 39,300 49,900 94,000 94,000 94,000 98,964 Manholes 160 200 250 250 267 284 304 304 304 304 326 Public Works - Utility Streets (miles) 10.80 10.80 10.80 Highways (miles) - - - Streetlights - - - Traffic signals (school zone flashers) 2 2 2 Parks and recreation 2 2 Acreage 14 14 19 Playgrounds 2 2 2 Softball/soccer field 1 1 1 Football field - - 2 Source: Various Town departments 2 2 Note: No capital asset indicators are available for the general government. 2 1 The amount of roads decreased in FY 2011-2012 due to a portion of road being dedicated to TxDot 100 10.80 10.80 10.80 10.80 10.80 10.25 10.25 10.25 2 2 2 2 2 2 2 2 19 25 25 25 25 25 25 27 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1