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Town Audit 09-30-1996TOWN OF WESTLAKE, TEXAS FINANCIAL STATEMENTS as of September 30, 1996 CHARLES HAYNES, CPA Certified Public Accountants TOWN OF WESTLAKE, TEXAS PRINCIPAL OFFICERS SEPTEMBER 30, 1996 MAYOR ALDERMEN Scott Bradley Carroll Huntress, Mayor Pro -Tem Howard Dudley Al Oien Jerry Moore Fred Held CITY SECRETARY Ginger Crosswy Charles Haynes CPA 1903 Central Drive, Suite 300 Bedford, Texas 76021 (817) 545-1300 / (214) 748-2222 INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Aldermen Town of Westlake, Texas We have audited the accompanying general purpose financial statements of the Town of Westlake, Texas as of and for the year ended September 30, 1996. These financial statements are the responsibility of the entity's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Town of Westlake, Texas at September 30, 1996 and the results of its operations and changes in financial position for the year then ended in conformity with generally accepted accounting principles. Respectfully submitted, Charles Haynes CPA January 21, 1997 ASSETS Cash Receivables Miscellaneous Office Equipment TOTAL ASSETS LIABILITIES Accounts payable Accrued expenditures Deferred revenue TOTAL LIABILITIES TOWN OF WESTLAKE, TEXAS COMBINED BALANCE SHEET ALL FUND TYPES SEPTEMBER 30, 1996 GENERAL FUNDS Operating Development TSHC $ 1,515,219 $ 239,052 $ 27,341 FIXED ASSET (MEMORANDUM ACCOUNT ONLY) GROUP TOTAL $ - $ 1,781,612 722 - - - 722 - 13,352 13,352 $ 1,515,941 $ 239,052 27,341 $ 13,352 $ 1,795,686 FUND EQUITY Fund balances: Investment in Fixed Assets - - - 13,352 13,352 Designated - 239,052 27,341 - 266,393 Undesignated 1,515,941 - - - 1,515,941 TOTAL FUND EQUITY 1,515,941 239,052 27,341 13,352 1,795,686 TOTAL LIABILITIES AND FUND EQUITY $ 1,515,941 $ 239,052 27,341 $ 13,352 $ 1,795,686 The accompanying notes are an integral part of the financial statements. 3 TOWN OF WESTLAKE, TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE ALL GOVERNMENTAL FUND TYPES YEAR ENDED SEPTEMBER 30, 1996 REVENUES Taxes Sales Franchise Interest income Building permits and fees Fines and penalties Contractual receipts from operations of Texas Student Housing Corporation facilities Other miscellaneous income TOTAL REVENUES (MEMORANDUM GENERAL FUNDS ONLY) Operating Development TSHC TOTAL $ 517,458 $ 229,554 $ - $ 747,012 125,936 - - 125,936 68,459 5,841 1,365 75,665 86,992 - - 86,992 2,481 - - 2,481 - - 50,000 50,000 3,251 - - 3,251 804,577 235,395 51,365 1,091,337 OPERATING EXPENDITURES Current General Government 292,868 715 3,032 296,615 TOTAL OPERATING EXPENDITURES 292,868 715 3,032 296,615 OTHER EXPENDITURES Scholarships paid in current year TOTAL OTHER EXPENDITURES TOTAL EXPENDITURES Excess of revenues over expenditures before interfund transfers Interfund transfers in (out) Excess of revenues over expenditures and interfund transfers 20,992 20,992 20,992 20,992 292,868 715 24,024 317,607 511,709 234,680 27,341 773,730 511,709 234,680 27,341 773,730 Fund Balance - September 30, 1995 1,004,232 4,372 - 1,008,604 Fund Balance - September 30, 1996 $ 1,515,941 $ 239,052 $ 27,341 $ 1,782,334 The accompanying notes are an integral part of the financial statements. 4 , TOWN OF WESTLAKE, TEXAS GENERAL FUND SCHEDULE OF EXPENDITURES YEAR ENDED SEPTEMBER 30, 1996 Operating Fund 438 City secretary $15,209 Payroll taxes 268 Office supplies 9,971 Capital outlay - equipment - Capital outlay - water line infrastructure oversizing 12,066 Maintenance and repairs - streets and equipment 18,641 Postage 945 Miscellaneous 4,346 Accounting and consulting 7,260 Engineering 23,583 PIanning - road improvements 5,000 Contracted services - police & fire 26,695 Legal 42,937 Interlocal funding - community service expense 5,000 Inspection 24,371 Dues 841 Election expense 599 Telephone & utilities 1,674 Planners fees 79,480 Insurance 4,190 Office & meeting location rent 9,792 Total Operating Fund 292,868 Westlake Development Corporation Legal fees 575 Miscellaneous expense 140 Total Westlake Development Corporation 715 Texas Student Housing Corporation (TSHC) Contract labor 438 Meeting expense 2,333 Postage / Office supplies 124 Legal & professional 137 3,032 Scholarships paid in current year 20,992 Total Texas Student Housing Corporation (TSHC) 24,024 Total expenditures - General Fund 317,607 The accompanying notes are an integral part of the financial statements. E TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS Note 1 Summary of Significant Accounting Policies A summary of significant accounting policies applied in the preparation of the accompanying financial statements follows: Description of Funds The Town operates under a Board of Aldermen -Mayor -Secretary form of government and has established certain funds in conformity with generally accepted accounting principles. The following types of funds and groups of accounts are used by the Town in accounting for its financial activities: General Fund - The Town currently accounts for its financial activity in general funds: the Operating Fund, the Westlake Development Corporation (Development), the Texas Student Housing Corporation (TSHC), and the Fixed Asset Account Group. The Operating Fund is a governmental fund used to account for all financial resources except those required to be accounted for in another fund or account group. The Westlake Development Corporation receives funding from a one-half (1/2) percent sales tax; approved by the voters. The purpose of the Development Corporation is to promote, for the public welfare, economic development for areas within the Town of Westlake. The Texas Student Housing Corporation is a non-profit corporation that purchases and operates student -housing facilities. The contracts under which these facilities are operated are restrictive, however, they provide for funds to be made available, which the Town awards to local students in the form of college scholarships. The Fixed Asset Account Group accounts for the capital assets acquired by the Town. 0 TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS (Continued) Basis of Accounting In the current year, the Town announced that they are in the process of preparing and approving an annual budget. The budget will be prepared on the same basis that the Town maintains its accounts. The modified accrual and accrual basis of accounting, as appropriate, are utilized in measuring financial position and operating results as follows: Governmental fund revenues and expenditures are recognized on the modified accrual basis. Revenues are recognized in the accounting period in which they become available and measurable. Expenditures are recognized in the accounting period in which the fund liability is incurred, if measurable. Within the governmental funds, the more significant revenues which are not accrued are licenses and permits, fines and charges for other services provided by the Town. Budgets and the Budgetary Process The Board of Aldermen will adopt an annual operating budget, which can be amended by the Board throughout the year. The formal budgetary accounting is to be employed as a management control for all funds of the Town; however, legal budgets will be adopted only for General Fund groups. At the fund level, actual expenditures cannot exceed budgeted appropriations; however, with proper approval by the Board of Aldermen, budgetary transfers between departments can be made. Property Plant and Equipment Fixed assets used in governmental fund type operations are accounted for in the General Fixed Assets Account Group. Public domain (infrastructure) general fixed assets consisting of certain improvements other than buildings, such as roads, sidewalks, and bridges, are not capitalized. Property, plant, and equipment acquired or constructed for general governmental operations is recorded as an expenditure in the fund making the expenditure and capitalized at cost in the General Fixed Assets Account Group. Property, plant, and equipment is stated at cost. Where cost could not be determined from the available records, estimated historical cost was used to record the estimated value of the assets. Assets acquired by gift or bequest are recorded at their fair market value at the date of transfer. Fund Equity The unreserved fund balances for governmental funds represent the amount available for budgeting future operations. The reserved fund balances for governmental funds represent the amount that has been legally identified for specific purposes. 7 TOWN OF WESTLAKE, TEXAS NOTES TO FINANCIAL STATEMENTS (Continued) Revenues and expenditures/expenses Revenues for governmental funds are recorded when they are determined to be both measurable and' available. Generally, tax revenues, fees and non tax revenues are recognized when received. Grants from other governments, if any, are recognized when qualifying expenditures are incurred. Expenditures for governmental funds are recorded when the related liability is incurred. Property tax revenues The Town does not assess ad valorem taxes on real or personal property. Note 2 Cash and Required Deposits The cash balances at September 30, 1996 are composed of the following amounts: Note 3 Subsequent Events Subsequent to year end the Town created an additional Development Corporation funded by an additional one-half ('/s) percent sales tax. The Development Corporation is similiar to the initial Development Corporation created by the Town and has been established pursuant to the guidelines set forth in the Texas Development Corporation Act. Also, subsequent to year end, the Town created a hospital authority and a public facilities corporation to allow the Town to address the development and/or use of these types of facilities within the respective statutory guidelines related to these component entities. As of the date of issuance of these financial statements, no commitments or other significant activity had occurred with respect to these two entities. r] INTEREST BOOK ACCOUNT NAME NUMBER LOCATION RATE BALANCE General Fund Operating Acct 6786263 Keller State Bank 2% 1,371 Operating Acct. - Development Fund 6786289 Keller State Bank 2% 2,306 Operating Acct 6762694 Keller State Bank 2% 27,341 Certificates of 1307007797 Guaranty Federal Variable Deposit 1307008381 Bank Variable 12,994 TexPool 22008111000 TexPool Variable 1,500,854 TexPool 22008750000 TexPool Variable 236.746 Total Cash $1-781,612 Note 3 Subsequent Events Subsequent to year end the Town created an additional Development Corporation funded by an additional one-half ('/s) percent sales tax. The Development Corporation is similiar to the initial Development Corporation created by the Town and has been established pursuant to the guidelines set forth in the Texas Development Corporation Act. Also, subsequent to year end, the Town created a hospital authority and a public facilities corporation to allow the Town to address the development and/or use of these types of facilities within the respective statutory guidelines related to these component entities. As of the date of issuance of these financial statements, no commitments or other significant activity had occurred with respect to these two entities. r]