2015 Annual Financial ReportANNUAL FINANCIAL REPORT
of the
City of Sanger, Texas
For the Year Ended
September 30, 2015
(This page intentionally left blank.)
City of Sanger, Texas
TABLE OF CONTENTS
September 30, 2015
FINANCIAL SECTION
Independent Auditor's Report 1
Management's Discussion and Analysis 7
Basic Financial Statements
Government -Wide Financial Statements
Statement of Net Position 19
Statement of Activities 20
Fund Financial Statements
Governmental Funds:
Balance Sheet
22
Reconciliation of the Balance Sheet to the Statement of Net Position -
Governmental Funds
25
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Governmental Funds
26
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the Statement
of Activities
29
Proprietary Funds:
Statement of Net Position 30
Statement of Revenues, Expenses, and Changes in Fund Net Position 31
Statement of Cash Flows 32
Notes to Financial Statements 35
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - General Fund 69
Schedule of Changes in Net Pension Liability and Related Ratios 70
Schedule of Employer Contributions to Plan 71
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS
Combining Balance Sheet - Nonmajor Governmental Funds 74
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances - Nonmajor Governmental Funds 75
Combining Schedule of Revenues, Expenses, and Changes
in Fund Net Position - Proprietary Funds — by Department 76
(This page intentionally left blank.)
r,
'- _..__.. — Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Sanger, Texas:
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business -type activities, each major fund, and the aggregate remaining fund information of the
City of Sanger, Texas (the "City") as of and for the year ended September 30, 2015, and the
related notes to the financial statements, which collectively comprise the City's basic financial
statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
The City's 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. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity's internal control. Accordingly, we express no such opinion. An audit also includes
1095 Evergreen Circle I Suite 200 1 The Woodlands, TX 77380 1 Tel: 281.907.8788 1 Fax: 888.875.0587 1 www.BrooksCardiel.com
1
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.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of the City as of September 30, 2015,
and the respective changes in financial position and, where applicable, cash flows thereof for
the year then ended in accordance with accounting principles generally accepted in the United
States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis, schedule of changes in net pension liability and related
ratios, schedule of employee contributions to pension plan, and budgetary comparison
information 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. In our opinion, the information is fairly stated in all material respects in
relation to the financial statements as a whole.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise City of Sanger, Texas's basic financial statements. The combining and
individual nonmajor fund financial statements and combining schedule by department for the
proprietary fund are presented for purposes of additional analysis and are not a required part
of the basic financial statements.
2
The combining and individual nonmajor fund financial statements and combining schedule by
department for the proprietary fund are the responsibility of management and were derived
from and relate directly to the underlying accounting and other records used to prepare the
basic financial statements. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial
statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the combining and
individual nonmajor fund financial statements are fairly stated, in all material respects, in
relation to the basic financial statements as a whole.
BrooksCardiel, PLLC
Certified Public Accountants
The Woodlands, Texas
January 7, 2016
3
(This page intentionally left blank.)
MANAGEMENT'S DISCUSSION
AND ANALYSIS
(This page intentionally left blank.)
City of Sanger, Texas
MANAGEMENT'S DISCUSSIONAND ANALYSIS (MD&A)
September 30, 2015
As management of the City of Sanger, Texas (the "City"), we offer readers of the City's financial
statements this narrative overview and analysis of the financial activities of the City for the fiscal year
ended September 30, 2015.
Financial Highlights
• The City's total combined net position is $28,948,124 at September 30, 2015. Of this, $9,279,673
(unrestricted net position) may be used to meet the City's ongoing obligations to its citizens and
creditors.
• At the close of the current fiscal year, the City's governmental funds reported combined fund
balances of $5,572,814, an increase of $1,482,617.
• As of the end of the year, the unassigned fund balance of the general fund was $1,828,676 or
36% of total general fund expenditures.
• The City had an overall increase in net position of $3,116,003, which is primarily due to strong
general and utility revenues.
Overview of the Financial Statements
The discussion and analysis provided here are intended to serve as an introduction to the City's basic
financial statements. The City's basic financial statements consist of three components: 1) government -
wide financial statements, 2) fund financial statements, and 3) the notes to financial statements. This
report also includes supplementary information intended to furnish additional detail to support the
basic financial statements themselves.
Government -Wide Statements
The government -wide financial statements are designed to provide readers with a broad overview of the
City's finances, in a manner similar to a private -sector business.
The statement of net position presents information on all of the City's assets, liabilities, and deferred
inflows/outflows with the difference reported as net position. Over time, increases or decreases in net
position may serve as a useful indicator of whether the financial position of the City is improving or
deteriorating. Other non -financial factors, such as the City's property tax base and the condition of the
City's infrastructure, need to be considered in order to assess the overall health of the City.
The statement of activities presents information showing how the City's net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event giving
rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses
7
City of Sanger, Texas
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
September 30, 2015
are reported for some items that will only result in cash flows in future fiscal periods (e.g., uncollected
taxes and earned but unused vacation leave).
Both of the government -wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that
are intended to recover all or a significant portion of their costs through user fees and charges (business -
type activities). The governmental activities of the City include general government, public safety, public
works, and culture and recreation. The business -type activities of the City include water, sewer and
electric operations.
The government -wide financial statements include not only the City itself (known as the primary
government), but also the legally separate Sanger Industrial Development Corporation ("4A fund") and
the Sanger Texas Development Corporation ("413 fund"), for which the City is financially accountable.
Both corporations, although legally separate, function for all practical purposes as a department of the
City and therefore have been included as an integral part of the primary government.
FUND FINANCIAL STATEMENTS
Funds may be considered as operating companies of the parent corporation, which is the City of
Sanger. They are usually segregated for specific activities or objectives. The City of Sanger uses fund
accounting to ensure and demonstrate compliance with finance -related legal reporting requirements.
The two categories of City funds are governmental and proprietary.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government -wide financial statements. However, unlike the government -wide
financial statements, governmental fund financial statements focus on near -term inflows and outflows of
spendable resources, as well as on balances of spendable resources available at the end of the year. Such
information may be useful in evaluating the City's near -term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental fiends with similar
information presented for governmental activities in the government -wide financial statements. By
doing so, readers may better understand the long-term impact of the government's near -term financing
decisions. Both the governmental fund balance sheet and the governmental fund statement of
revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The City of Sanger maintains five individual governmental funds. Information is presented separately
in the governmental fund balance sheet and in the governmental fund statement of revenues,
M
City of Sanger, Texas
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
September 30, 2015
expenditures, and changes in fund balances for the general and debt service funds which are
considered to be major funds.
The City of Sanger adopts an annual appropriated budget for all funds. A budgetary comparison
schedule has been provided to demonstrate compliance with the general fund budget.
Proprietary Funds
The City maintains two different types of proprietary funds. Proprietary funds are used to report the
same functions presented as business -type activities in the government -wide financial statements. The
City uses a proprietary fund to account for its public utilities. All activities associated with providing
such services are accounted for in these funds, including administration, operation, maintenance, debt
service, capital improvements, meter maintenance, billing and collection. The City's intent is that costs
of providing the services to the general public on a continuing basis is financed through user charges in
a manner similar to a private enterprise. Internal service fiends are an accounting device used to
accumulate and allocate costs internally among the City's various functions. The City uses internal
service funds to account for the maintenance and purchase of equipment.
Notes to Financial Statements
The notes to the financial statements provide additional information that is essential to a full
understanding of the data provided in the government -wide and fund financial statements. The notes
are the last section of the basic financial statements.
Other Information
In addition to the basic financial statements, MD&A, and accompanying notes, this report also presents
certain Required Supplementary Information (RSI). The RSI that GASB Statement No. 34 requires is a
budgetary comparison schedule for the general fund and schedules for the City's Defined Pension
Plan. RSI can be found after the basic financial statements.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted previously, net position may serve over time as a useful indicator of the City's financial
position. For the City of Sanger, assets exceeded liabilities by $28,948,124 as of September 30, 2015, in
the primary government.
The largest portion of the City's net position, $15,954,561, reflects its investments in capital assets (e.g.,
land, city hall, police station, streets, and drainage systems, as well as the public works facilities), less
any debt used to acquire those assets that are still outstanding. The City uses these capital assets to
provide services to citizens; consequently, these assets are not available for future spending. Although
the City's investment in its capital assets is reported net of related debt, it should be noted that the
City of Sanger, Texas
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
September 30, 2015
resources needed to repay this debt must be provided from other sources, since the assets themselves
cannot be used to liquidate these liabilities.
An additional portion of the City's net position, $3,713,890, represents resources that are subject to
external restrictions on how they may be used. The remaining balance of $9,279,673 is unrestricted and
may be used to meet the government's ongoing obligations to its citizens and creditors.
Current assets of governmental activities as of September 30, 2015 and September 30, 2014 were
$6,134,675 and $4,717,408, respectively. The increase of $1,417,267 was primarily attributable to
transfers received from the Water, Sewer, and Electric fund.
Statement of Net Position:
The following table reflects the condensed Statement of Net Position:
2015
2014
Governmental
Business -Type
Governmental
Business -Type
Activities
Activities
Total
Activities
Activities
Total
Current and
other assets
$ 6,134,675
$ 12,028,084 $
18,162,759
$ 4,717,408
$ 11,671,252 $
16,388,660
Capital assets, net
15,107,078
12,923,737
28,030,815
15,020,169
12,430,202
27,450,371
Total Assets
21,241,753
24,951,821
46,193,574
19,737,577
24,101,454
43,839,031
Deferred Outflows
of Resources
228,086
111,646
339,732
133,726
101,904
235,630
Other liabilities
490,649
1,483,627
1,974,276
515,587
1,245,675
1,761,262
Long-term liabilities
7,718,319
7,892,587
15,610,906
7,847,871
8,633,407
16,481,278
Total Liabilities
8,208,968
9,376,214
17,585,182
8,363,458
9,879,082
18,242,540
Net Position:
Net investment
in capital assets
8,122,596
7,831,965
15,954,561
7,753,708
8,062,450
15,816,158
Restricted
3,713,890
-
31713,890
2,959,225
-
2,959,225
Unrestricted
1,424,385
7,855,288
9,279,673
794,912
6,261,826
7,056,738
Total Net Position
$ 13,260,871
$ 15,687,253 $
28,948,124
$ 11,507,845
$ 14,324,276 $
25,832,121
10
City of Sanger, Texas
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
September 30, 2015
Statement of Activities:
The following table provides a summary of the City's changes in net position:
For the Year Ended September 30, 2015 For the Year Ended September 30, 2014
Total Total
Governmental Business -Type Primary Governmental Business -Type Primary
Activities Activities Government Activities Activities Government
Revenues
Program revenues:
Charges for services
Grants and contributions
General revenues:
Property taxes
Sales taxes
Franchise and local taxes
Investment income
Other revenues
Total Revenues
Expenses
General government
Public safety
Public works
Culture and recreation
Interest and fiscal charges
Water, sewer, & electric
Total Expenses
Change in Net Position
Before Transfers
$ 1,570,157 $
11,569,275 $ 13,139,432 $
271,386
- 271,386
2,981,429
2,981,429
1,600,961
1,600,961
231,380
- 231,380
4,429
15,128 19,557
250,444
39,738 290,182
1,572,344 $
10,565,602 $
12,137,946
364,763
260,250
625,013
2,816,275
-
2,816,275
1,361,774
1,361,774
229,018
-
229,018
4,316
14,047
18,363
255,348
31,240
286,588
2,632,058
- 2,632,058
1,523,127
2,187,268
- 2,187,268
2,396,415
1,073,312
- 1,073,312
1,235,621
712,298
- 712,298
714,581 -
272,652
289,691 562,343
287,657 292,739
-
8,251,045 8,251,045
- 9,029,773
6,877,588
8,540,736 15,418,324
6,157,401 9,322,512
1,523,127
2,396,415
1,235,621
714,581
580,396
9,029,773,
32,598 3,083,405 3,116,003 446,437 1,548,627 1,995,064
Transfers
1,720,428
(1,720,428)
699,352
(699,352)
Total
1,720,428
(1,720,428) -
699,352
(699,352) -
Change in Net Position
1,753,026
1,362,977 3,116,003
1,145,789
849,275 1,995,064
Beginning Net Position
11,507,845
14,324,276 25,832,121
10,362,056
13,475,001 23,837,057
Ending Net Position $
13,260,871 $
15,687,253 $ 28,948,124 $
11,507,845 $
14,324,276 $ 25,832,121
11
City of Sanger, Texas
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
September 30, 2015
Graphic presentations of selected data from the summary tables are displayed below to assist in the
analysis of the City's activities.
Governmental Activities - Revenues
Property taxes Sales taxes
_, -- 23°0
43%
Franchise and local
taxes
r
1V
ffi
3%
Grants and
contributions Otherrevenues
4°0 4%
Charges for services
23%
For the year ended September 30, 2015, revenues from governmental activities totaled $6,910,186.
Property tax, sales tax and charges for services are the City's largest revenue sources. Property tax
increased by $165,154 or 6% due to higher property values and an increase in the property tax rate.
Sales tax increased $239,187 or 18% due to an overall increase in the economy and spending within the
City limits. Grants and contributions decreased by $93,377 due to a decrease in revenue received from
Denton County for the repair and construction of McReynolds road. All other revenues remained
relatively stable when compared to the previous year.
This graph shows the governmental function expenses of the City:
Governmental Activities - Expenses
12
City of Sanger, Texas
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
September 30, 2015
For the year ended September 30, 2015, expenses for governmental activities totaled $6,877,588. This
represents an increase of $720,187 or 12% from the prior year. The City's largest functional expense is
general govenument of $2,632,058 which primarily includes contractual costs for garbage removal,
salaries for finance and city administration, plus depreciation of related capital assets. General
government expenditures increased by $1,108,931 or 73% due to increases in salary expense within the
internal service fund created in the current year. Prior to the inception of this fund, portions of these
expenses were allocated within both governmental and business -type activities. All other expenditures
remained relatively consistent with the previous year.
Business -type activities are shown comparing operating costs to revenues generated by related
services.
For the year ended September 30, 2015, charges for services by business -type activities totaled
$11,569,275. This is an increase of $1,003,673, or 9%, from the previous year. The increase was due to an
increase in rates and consumption compared to prior year. Grants decreased by $260,250 due to a
CDBG grant project for sanitary sewer improvements expiring in the prior year.
Business -Type Activities - Revenues and Expenses
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
a�
ye�
tiet�r
�fi
p Expenses
Charges for Services
Total expenses decreased $781,776 due primarily to a decrease in administrative wages and benefits
which were consolidated within governmental activities in the current year due to the new internal
service fund.
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
As noted earlier, fund accounting is used to demonstrate and ensure compliance with finance -related
legal requirements.
Governmental Funds - The focus of the City's governmental funds is to provide information of near -
term inflows, outflows and balances of spendable resources. Such information is useful in assessing
13
City of Sanger, Texas
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
September 30, 2015
the City's financing requirements. In particular, unreserved hind balance may serve as a useful
measure of the City's net resources available for spending at the end of the year.
As of the end of the year the general fund reflected a total fund balance of $1,974,317. Of this, $6,768 is
restricted for municipal court, $33,061 is restricted for tourism and $75,564 is restricted for library
improvements. Unassigned fund balance totaled $1,828,676 as of year end.
There was an increase in governmental fund balance of $1,482,617 over the prior year. The increase was
primarily related to the increase in property and sales taxes previously discussed.
Proprietary Funds - The City's proprietary funds provide the same type of information found in the
government -wide financial statements, but in more detail.
GENERAL FUND BUDGETARY HIGHLIGHTS
There was a total positive budget variance of $734,224 in the general fund. This is a combination of a
positive a revenue variance of $267,615, a negative expenditure variance of $129,129, and a positive
variance of $595,738 in other financing sources and uses. Both the negative expenditure variance and
the positive variance in other financing sources and uses were primarily due to the $500,000 capital
lease incurred during the year for emergency vehicles.
CAPITAL ASSETS
As of the end of the year, the City's governmental activities funds had invested $15,107,078 in a variety
of capital assets and infrastructure, net of accumulated depreciation. Depreciation is included with the
governmental capital assets as required by GASB Statement No. 34. The City's business -type activities
funds had invested $12,923,737 in a variety of capital assets and infrastructure, net of accumulated
depreciation.
Major capital asset events during the current year include the following:
• Acquisition of public safety vehicles totaling $596,290
• McReynolds road construction in the amount of $164,146
• Donation of land received valued at $138,626
• New water well for $106,290
• Sewer plant expansion for $447,012
• Water and sewer line relocations, expansions, and a new lift station totaling $545,125
More detailed information about the City's capital assets is presented in note IV. C to the financial
statements.
14
City of Sanger, Texas
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
September 30, 2015
LONG-TERM DEBT
At the end of the current year, the City had total bonds outstanding of $12,750,000, notes payable of
$439,448 and capital leases of $1,089,768. During the year, the City had principal payments on bonds,
notes payable and capital leases of $1,489,099. During the year, the City entered into a new capital
lease agreement for $500,000. More detailed information about the City's long-term liabilities is
presented in note IV. D to the financial statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
The Mayor and City Council are committed to maintaining and improving the overall wellbeing of the
City of Sanger and improving services provided to their public citizens. The City is budgeting for
growth in the upcoming year.
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This financial report is designed to provide a general overview of the City of Sanger's finances for all
those with an interest in the City's finances. Questions concerning this report or requests for additional
financial information should be directed to the City Manager at the City of Sanger City Hall at 502 Elm
Street, Sanger, Texas 76266.
15
(This page intentionally left blank.)
FINANCIAL STATEMENTS
17
(This page intentionally left blank.)
:
City of Sanger, Texas
STATEMENT OF NET POSITION
September 30, 2015
Primary Government
Governmental
Business -Type
Activities
Activities
Total
Assets
Cash and cash equivalents
$ 3,296,078
$ 2,474,559 $
5,770,637
Investments
505,527
412,356
917,883
Restricted cash
1,384,065
6,771,010
8,155,075
Restricted investments
388,788
300,000
688,788
Receivables, net
560,217
1,595,825
2,156,042
Inventory
-
474,334
474,334
Capital assets:
Non -depreciable
1,612,627
2,303,267
3,915,894
Net depreciable capital assets
13,494,451
10,620,470
24,114,921
15,107,078
12,923,737
28,030,815
Total Assets
21,241,753
24,951,821
46,193,574
Deferred Outflows of Resources
Deferred charge on refunding
22,006
49,537
71,543
Pension contributions
126,926
38,253
165,179
Pension investment earnings
31,057
9,360
40,417
Pension (gains) losses
48,097
14,496
62,593
Total Deferred Outflows of Resources
228,086
111,646
339,732
Liabilities
Accounts payable and
accrued liabilities
439,839
1,037,357
1,477,196
Accrued interest payable
50,810
54,034
104,844
Customer deposits
-
392,236
392,236
Noncurrent liabilities:
Due within one year
979,410
871,088
1,850,498
Due in more than one year
6,171,532
6,850,502
13,022,034
Net pension liability
567,377
170,997
738,374
7,718,319
7,892,587
15,610,906
Total Liabilities
8,208,968
9,376,214
17,585,182
Net Position
Net investment in capital assets
8,122,596
7,831,965
15,954,561
Restricted for:
Debt service
385,186
-
385,186
Capital projects
773,705
-
773,705
Economic development
2,439,606
-
2,439,606
Other purposes
115,393
-
115,393
Unrestricted
1,424,385
7,855,288
9,279,673
Total Net Position
$ 13,260,871
$ 15,687,253 $
28,948,124
See Notes to Financial Statements.
19
City of Sanger, Texas
STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2015
Program Revenues
Operating Capital
Charges for
Grants and Grants and
Functions/Programs
Expenses
Services
Contributions Contributions
Primary Government
Governmental Activities
General government
$ 2,632,058
$ 927,848
$ 16,475 $ 138,626
Public safety
2,187,268
642,309
49,031 67,254
Public works
1,073,312
-
- -
Culture and recreation
712,298
-
-
Interest and fiscal charges
272,652
-
- -
Total Governmental Activities
6,877,588
1,570,157
65,506 205,880
Business -Type Activities
Water
1,035,760
1,697,167
- -
Sewer
608,790
1,616,022
- -
Electric
6,589,243
8,256,086
-
Fleet services
612
-
- -
Utility administration
306,331
-
- -
Total Business -Type Activities
8,540,736
11,569,275
- -
Total Primary Government
$ 15,418,324
$ 13,139,432
$ 65,506 205,880
General Revenues:
Taxes
Property taxes
Sales taxes
Franchise and local taxes
Investment income
Other revenues
Gain on sale of assets
Insurance recoveries
Transfers
Total General Revenues and Transfers
Change in Net Position
Beginning Net Position
Ending Net Position
See Notes to Financial Statements.
20
Net (Expense) Revenue and Changes in Net Position
Primary Government
Governmental
Business -Type
Activities
Activities
Total
$ (1,549,109)
$ - $
(1,549,109)
(1,428,674)
-
(1,428,674)
(1,073,312)
-
(1,073,312)
(712,298)
-
(712,298)
(272,652)
-
(272,652)
(5,036,045)
-
(5,036,045)
-
661,407
661,407
-
1,007,232
1,007,232
-
1,666,843
1,666,843
-
(612)
(612)
-
(306,331)
(306,331)
-
3,028,539
3,028,539
(5,036,045)
3,028,539
(2,007,506)
2,981,429 -
2,981,429
1,600,961 -
1,600,961
231,380 -
231,380
4,429 15,128
19,557
175,233 39,738
214,971
60,798 -
60,798
14,413 -
14,413
1,720,428 (1,720,428)
-
6,789,071 (1,665,562)
1,753,026 1,362,977
11,507, 845 14,324,276
$ 13,260,871 $ 15,687,253 $
5,123,509
3,116,003
25,832,121
28,948,124
21
City of Sanger, Texas
BALANCE SHEET
GOVERNMENTAL FUNDS
September 30, 2015
Debt
General
Service
4A Fund
Assets
Cash and cash equivalents
$
1,422,690
$
328,327
$
414,206
Investments
411,516
-
94,011
Restricted cash
106,013
56,794
1,031,829
Restricted investments
113,205
-
-
Receivables, net
416,283
19,994
65,248
Total Assets
$
2,469,707
$
405,115
$
1,605,294
Liabilities
Accounts payable and
accrued liabilities
$
360,370
$
-
$
7,675
Total Liabilities
360,370
-
7,675
Deferred Inflows of Resources
Unavailable revenue
Property taxes
43,237
19,929
-
EMS revenue
91,783
-
-
Total Deferred Inflows of Resources
135,020
19,929
-
Fund Balances
Restricted for:
Municipal court
6,768
-
-
Tourism
33,061
-
-
Library
75,564
-
-
Debt service
-
385,186
-
Capital projects
-
-
-
Economic development
-
-
1,597,619
Committed for:
Employee benefits
30,248
-
-
Unassigned reported in:
General fund
1,828,676
-
-
Total Fund Balances
1,974,317
385,186
1,597,619
Total Liabilities and Fund Balances
$
2,469,707
$
405,115
$
1,605,294
See Notes to Financial Statements.
22
Nonmajor
Governmental
Total
Governmental
Funds
$ 1,100,082
$ 3,265,305
-
505,527
189,429
1,384,065
275,583
388,788
58,692
560,217
$ 1,623,786
$ 6,103,902
$ 8,094
$ 376,139
8,094
376,139
-
63,166
-
91,783
-
154,949
- 6,768
- 33,061
- 75,564
- 385,186
773,705 773,705
841,987 2,439,606
- 30,248
1,828,676
1,615,692 5,572,814
$ 1,623,786 $ 6,103,902
23
(Page intentionally left blank.)
24
City of Sanger, Texas
RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION
GOVERNMENTAL FUNDS
September 30, 2015
Fund Balances - Total Governmental Funds $ 5,572,814
Adjustments for the Statement of Net Position:
Capital assets used in governmental activities are not current financial
resources and, therefore, not reported in the governmental funds.
Capital assets - non -depreciable
Capital assets - net depreciable
Other long-term assets are not available to pay for current -period
expenditures and, therefore, are deferred in the governmental funds.
Property tax receivable
EMS receivable
Deferred outflows of resources, represent a consumption of net position that
applies to a future period(s) and is not recognized as an outflow of resources
(expense/ expenditure) until then.
Deferred charge on refunding
Pension contributions
Pension investment earnings
Pension gains (losses)
Internal service funds are used by management to charge the cost of internal services
to individual funds. The assets and liabilities of the internal service funds
are included in governmental activities un the statement of net position.
Cash and cash equivalents
Deferred outflows - pension contributions
Deferred outflows - investment earnings
Deferred outflows - pension gains (losses)
Accounts payable and accrued liabilities
Non -current liabilities due in one year
Non -current liabilities due in more than one year
Net pension liability
Net position - governmental activities
Some liabilities, including bonds payable and deferred charges, are not reported as
liabilities in the governmental funds.
Accrued interest
Bond premium
Net pension liability
Non -current liabilities due in one year
Non -current liabilities due in more than one year
Net Position of Governmental Activities
See Notes to Financial Statements.
1,612,627
13,494,451
63,166
91,783
22,006
94,672
23,165
35,875
30,773
32,254
7,892
12,222
(63,700)
(23,593)
(2,621)
(144,180)
(150,953)
(50,810)
(68,199)
(423,197)
(955,817)
(6,100,712)
$ 13,260,871
25
City of Sanger, Texas
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For the Year Ended September 30, 2015
Debt
General
Service
4A Fund
Revenues
Property tax $
2,203,590
$ 796,750
$ -
Sales tax
813,634
-
393,664
Franchise and local taxes
231,380
-
-
License and permits
122,509
-
-
Charges for services
805,339
-
-
Fire and rescue
512,202
-
-
Contributions and donations
1,400
-
-
Intergovernmental
49,031
-
15,075
Fines and forfeitures
128,839
-
1,268
Investment income
3,009
113
-
Other revenue
72,532
-
83,667
Total Revenues
4,943,465
796,863
493,674
Expenditures
Current:
General government
970,164
1,378
131,312
Police department
1,243,133
-
-
Municipal court
202,988
-
-
Fire and EMS
778,877
-
-
Parks and recreation
443,554
-
-
Public works
614,350
-
-
Debt service:
Principal
143,004
595,300
39,762
Interest
15,527
241,925
21,505
Capital outlay
695,131
-
-
Total Expenditures
5,106,728
838,603
192,579
Excess of Revenues Over (Under) Expenditures
(163,263)
(41,740)
301,095
Other Financing Sources (Uses)
Transfers in
1,040,785
212,500
50,000
Transfers (out)
(714,494)
(158,535)
-
Capital lease
500,000
-
-
Proceeds from sale of capital assets
60,798
-
-
Insurance recoveries
14,413
-
-
Total Other Financing Sources (Uses)
901,502
53,965
50,000
Net Change in Fund Balances
738,239
12,225
351,095
Beginning fund balances
1,236,078
372,961
1,246,524
Ending Fund Balances $
1,974,317
$ 385,186
1,597,619
See Notes to Financial Statements.
26
Nonmaj or
Governmental
Total
Governmental
Funds
$ -
$ 3,000,340
393,663
1,600,961
-
231,380
-
122,509
-
805,339
-
512,202
-
1,400
67,254
131,360
-
130,107
1,307
4,429
10,000
166,199
472,224
6,706,226
- 1,102,854
- 1,243,133
- 202,988
- 778,877
- 443,554
- 614,350
- 778,066
278,957
192,668 887,799
192,668 6,330,578
279/556 375,648
325,000 1,628,285
(223,498) (1,096,527)
- 500,000
60,798
14,413
n� Gnu nti otia
381,058 1,482,617
1,234,634 4,090,197
$ 1,615,692 $ 5,572,814
27
(This page intentionally left blank.)
City of Sanger, Texas
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2015
Amounts reported for governmental activities in the statement of activities are
different because:
Net changes in fund balances - total governmental funds
$ 1,482,617
Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense.
Capital outlay
933,037
Donated land
138,626
Depreciation expense
(984,754)
Revenues in the statement of activities that do not provide current financial
resources are not reported as revenues in the funds.
EMS receivable
(18,911)
Governmental funds recognize escalating rental income as received. However,
in the statement of activities, the rent is deferred and recognized ratably over the
term of the lease agreement.
9,034
Some expenses reported in the statement of activities do not require the use of
current financial resources and, therefore, are not reported as expenditures
in governmental funds.
Compensated absences
(26,228)
Accrued interest
2,392
Pension expense
(1,153)
The issuance of long-term debt (e.g., bonds, leases, certificates of obligation)
provides current financial resources to governmental funds, while the
repayment of the principal of long-term debt consumes the current financial
resources of governmental funds. Neither transaction, however, has any
effect on net position. Also, governmental funds report the effect of issuance
costs, premiums, discounts, and similar items when they are first issued; whereas,
these amounts are deferred and amortized in the statement of activities.
This amount is the net effect of these differences in the treatment of long-term
debt and related items.
Amortization of deferred charges on refunding (3,913)
Amortization of premium 7,826
Debt issued (500,000)
Principal payments 778,066
Internal service funds are used by management to charge the cost of internal services
to individual funds. The City reports the net gain (loss) of internal
service funds within governmental activities. (63,613)
Change in Net Position of Governmental Activities $ 1,753,026
See Notes to Financial Statements.
29
City of Sanger, Texas
STATEMENT OF NET POSITION
PROPRIETARY FUND
September 30, 2015
Governmental
Activities
Water, Sewer
Internal
& Electric
Service
Assets
Current Assets
Cash and cash equivalents $
2,474,559
$ 30,773
Investments
412,356
-
Restricted cash
6,771,010
-
Restricted investments
300,000
-
Receivables, net
1,595,825
-
Inventory
474,334
-
Total Current Assets
12,028,084
30,773
Noncurrent Assets
Capital assets:
Non -depreciable
2,303,267
-
Net depreciable capital assets
10,620,470
-
Total Noncurrent Assets
12,923,737
-
Total Assets
24,951,821
30,773
Deferred Outflows of Resources
Pension contributions
38,253
32,254
Pension investment earnings
9,360
7,892
Pension gains (losses)
14,496
12,222
Deferred charge on refunding
49,537
-
Total Deferred Outflows of Resources
111,646
52,368
Liabilities
Current Liabilities
Accounts payable and accrued liabilities
1,037,357
63,700
Accrued interest
54,034
-
Customer deposits
392,236
-
Compensated absences -current
71,544
23,593
Bonds and capital leases payable -current
799,544
-
Total Current Liabilities
2,354,715
87,293
Noncurrent Liabilities
Compensated absences
7,949
2,621
Net pension liability
170,997
144,180
Bonds and capital leases payable
6,842,553
-
Total Liabilities
9,376,214
234,094
Net Position
Net investment in capital assets
7,831,965
-
Unrestricted
7,855,288
(150,953)
Total Net Position $
15,687,253
$ (150,953)
See Notes to Financial Statements.
30
City of Sanger, Texas
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
PROPRIETARY FUND
For the Year Ended September 30, 2015
Governmental
Activities
Water, Sewer
Internal
& Electric
Service
Operating Revenues
Charges for services
$ 11,019,545
$ -
Connection fees
59,980
-
Tap fees
489,750
-
Other revenue
39,738
-
Total Operating Revenues
11,609,013
-
Operating Expenses
Salaries and wages
970,124
946,588
Contracted services
36,820
184,113
Utilities
323,232
38,695
Materials and supplies
78,697
72,291
Water and electric purchases
5,646,204
-
Repairs and maintenance
362,470
10,596
Depreciation
833,498
-
Total Operating Expenses
8,251,045
1,252,283
Operating Income (Loss)
3,357,968
(1,252,283)
Nonoperating Revenues (Expenses)
Investment income
15,128
-
Interest expense
(289,691)
-
Total Nonoperating Revenues (Expenses)
(274,563)
-
Income (Loss) Before Transfers
3,083,405
(1,252,283)
Transfers in
10,998
1,101,330
Transfers (out)
(1,731,426)
-
Change in Net Position
1,362,977
(150,953)
Beginning net
position
14,324,276
-
Ending Net Position
$ 15,687,253
$ (150,953)
See Notes to Financial Statements.
31
City of Sanger, Texas
STATEMENT OF CASH FLOWS
PROPRIETARY FUND (Page 1 of 2)
For the Year Ended September 30, 2015
Water, Sewer
& Electric
Cash Flows from Operating Activities
Receipts from customers
$ 11,604,403
Payments to suppliers
(6,295,216)
Payments to employees
(1,022,272)
Net Cash Provided by Operating Activities
4,286,915
Cash Flows from Noncapital Financing Activities
Operating transfer in
10,998
Operating transfer out
(1,705,118)
Net Cash Provided by Noncapital Financing Activities
(1,694,120)
Cash Flows from Capital and Related Financing Activities
Capital purchases
(1,327,033)
Principal paid on debt
(711,033)
Interest paid on debt
(303,380)
Net Cash (Used) by Capital and Related Financing Activities
(2,341,446)
Cash Flows from Investing Activities
Proceeds from sales and maturities of investments
277,925
Interest on investments
15,128
Net Cash Provided by Investing Activities
293,053
Net Increase (Decrease) in Cash and Cash Equivalents
544,402
Beginning cash and cash equivalents
8,701,167
See Notes to Financial Statements.
Ending Cash and Cash Equivalents $ 9,245,569
32
City of Sanger, Texas
STATEMENT OF CASH FLOWS
PROPRIETARY FUND (Page 2 of 2)
For the Year Ended September 30, 2015
Water, Sewer
& Electric
Reconciliation of Operating Income
to Net Cash Provided by Operating Activities
Operating Income $ 3,357,968
Adjustments to reconcile operating
income to net cash provided:
Depreciation
833,498
Changes in Operating Assets and Liabilities:
(Increase) Decrease in:
Accounts receivable
(45,352)
Inventory
(45,003)
Deferred outflows of resources - pension contributions
13,813
Deferred outflows of resources - pension investment earnings
(9,360)
Deferred outflows of resources - pension (gains) losses
(14,496)
Increase (Decrease) in:
Accounts payable and accrued liabilities
197,210
Customer deposits
40,742
Net pension liability
(42,105)
Net Cash Provided by Operating Activities $
4,286,915
See Notes to Financial Statements.
33
(This page intentionally left blank.)
34
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS
September 30, 2015
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Description of Government -Wide Financial Statements
The government -wide financial statements (i.e., the statement of net position and the
statement of activities) report information on all of the nonfiduciary activities of the primary
government and its component units. Governmental activities, which normally are supported
by taxes, intergovernmental revenues, and other nonexchange transactions, are reported
separately from business -type activities, which rely to a significant extent on fees and charges
to external customers for support. Likewise, the primary government is reported separately
from certain legally separate component units for which the primary government is financially
accountable.
B. Reporting Entity
The City of Sanger, Texas (the "City") was incorporated in 1886 and operates under a
Council -Manager form of government. The City provides: general government, public safety,
public works, culture and recreation, water, sewer, and electricity operations.
The City is an independent political subdivision of the State of Texas governed by an elected
council and a mayor and is considered a primary government. As required by generally
accepted accounting principles, these basic financial statements have been prepared based on
considerations regarding the potential for inclusion of other entities, organizations, or
functions as part of the City's financial reporting entity. The Sanger Industrial Development
Corporation ("4A fund") and the Sanger Texas Development Corporation ("413 fund"),
although legally separate, are considered part of the reporting entity. No other entities have
been included in the City's reporting entity. Additionally, as the City is considered a primary
government for financial reporting purposes, its activities are not considered a part of any
other governmental or other type of reporting entity.
Considerations regarding the potential for inclusion of other entities, organizations or
functions in the City's financial reporting entity are based on criteria prescribed by generally
accepted accounting principles. These same criteria are evaluated in considering whether
the City is a part of any other governmental or other type of reporting entity. The overriding
elements associated with prescribed criteria considered in determining that the City's
financial reporting entity status is that of a primary government are that it has a separately
elected governing body; it is legally separate; and is fiscally independent of other state and
local governments. Additionally prescribed criteria under generally accepted accounting
principles include considerations pertaining to organizations for which the primary
government is financially accountable, and considerations pertaining to organizations for
which the nature and significance of their relationship with the primary government are
such that exclusion would cause the reporting entity's financial statements to be misleading
or incomplete.
35
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
Blended Component Units
Sanger Industrial Development Corporation (4A)
The Sanger Texas Industrial Development Corporation ("4A fund") is governed by a board
of five directors, all of whom are appointed by the City Council of the City of Sanger and
any of whom can be removed from office by the City Council at its will. The 4A fund was
incorporated in the state of Texas as a non-profit industrial development corporation under
Section 4A of the Development Corporation Act of 1979. The purpose of the 4A fund is to
promote economic development within the City of Sanger.
Sanger Texas Development Corporation (4B)
The Sanger Texas Development Corporation ("4B fund") is governed by a board of seven
directors, all of whom are appointed by the City Council at its will. The 413 fund was
incorporated in the state of Texas as a nonprofit industrial development corporation under
Section 4B of the Development Corporation Act of 1979. The purpose of the 413 fund is to
promote economic and community development within the City of Sanger.
C. Basis of Presentation Government -Wide and Fund Financial Statements
While separate government -wide and fund financial statements are presented, they are
interrelated. The governmental activities column incorporates data from governmental
funds while business -type activities incorporate data from the government's enterprise
funds. Separate financial statements are provided for governmental funds and the
proprietary funds.
As a general rule, the effect of interfund activity has been eliminated from the government -
wide financial statements. Exceptions to this general rule are payments in lieu of taxes where
the amounts are reasonably equivalent in value to the interfund services provided and other
charges between the government's water and transit functions and various other functions of
the government. Elimination of these charges would distort the direct costs and program
revenues reported for the various functions concerned.
The fund financial statements provide information about the government's funds, including
its blended component units. Separate statements for each fund category —governmental
and proprietary are presented. The emphasis of fund financial statements is on major
governmental and enterprise funds, each displayed in a separate column. All remaining
governmental and enterprise funds are aggregated and reported as nonmajor funds. Major
individual governmental and enterprise funds are reported as separate columns in the fund
financial statements.
36
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
The government reports the following major governmental funds:
Governmental Funds
Governmental funds are those funds through which most governmental functions are
typically financed.
General Fund
The general fund is used to account for all financial transactions not properly includable
in other funds. The principal sources of revenues include local property taxes, sales and
franchise taxes, licenses and permits, fines and forfeitures, and charges for services.
Expenditures include general government, public safety, parks and recreation and public
works.
Debt Service Fund
The debt service fund is used to account for debt service activities for governmental fund
types.
Proprietary Fund Types
Proprietary funds are used to account for activities that are similar to those often found in
the private sector. All assets, liabilities, equities, revenues, expenses, and transfers relating to
the government's business activities are accounted for through proprietary funds. The
measurement focus is on determination of net income, financial position, and cash flows.
Proprietary funds distinguish operating revenues and expenses from non -operating items.
Operating revenues include charges for services. Operating expenses include costs of
materials, contracts, personnel, and depreciation. All revenues and expenses not meeting
this definition are reported as non -operating revenues and expenses. Proprietary fund types
follow GAAP prescribed by the Governmental Accounting Standards Board (GASB) and all
financial Accounting Standards Board's standards issued prior to November 30, 1989.
Subsequent to this date, the City accounts for its enterprise funds as presented by GASB. The
proprietary fund types used by the City include enterprise funds.
The government reports the following major enterprise fund:
Water, Sewer, & Electric Fund
This fund is used to account for the provision of water, sewer and electric services to the
residents of the City. Activities of the fund include administration, operations and
maintenance of the water production and distribution system, water collection and
treatment systems, and electric services. The fund also accounts for the accumulation of
37
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
resources for and the payment of long-term debt. All costs are financed through charges
to utility customers.
Additionally, the government reports the following fund type:
Internal Service Fund
Revenues and expenses related to services provided to organizations inside the City on a
cost reimbursement basis are accounted for in an internal service fund. The City's internal
service fund was set up to provide administrative support services to other funds of the
City.
During the course of operations the government has activity between funds for various
purposes. Any residual balances outstanding at year end are reported as due from/to other
funds and advances to/from other funds. While these balances are reported in fund financial
statements, certain eliminations are made in the preparation of the government -wide
financial statements. Balances between the funds included in governmental activities (i.e.,
the governmental and internal service funds) are eliminated so that only the net amount is
included as internal balances in the governmental activities column. Similarly, balances
between the funds included in business -type activities (i.e., the enterprise funds) are
eliminated so that only the net amount is included as internal balances in the business -type
activities column.
Further, certain activity occurs during the year involving transfers of resources between
funds. In fund financial statements these amounts are reported at gross amounts as transfers
in/out. While reported in fund financial statements, certain eliminations are made in the
preparation of the government -wide financial statements. Transfers between the funds
included in governmental activities are eliminated so that only the net amount is included as
transfers in the governmental activities column. Similarly, balances between the funds
included in business -type activities are eliminated so that only the net amount is included as
transfers in the business -type activities column.
D. Measurement Focus and Basis of Accounting
The accounting and financial reporting treatment is determined by the applicable
measurement focus and basis of accounting. Measurement focus indicates the type of
resources being measured such as current financial resources or economic resources. The basis of
accounting indicates the timing of transactions or events for recognition in the financial
statements.
The government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when earned and
expenses are recorded when a liability is incurred, regardless of the timing of related cash
flows. Property taxes are recognized as revenues in the year for which they are levied.
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
The governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon
as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of
the current period. For this purpose, the government considers revenues to be available if
they are collected within 60 days of the end of the current fiscal period. Expenditures
generally are recorded when a liability is incurred, as under accrual accounting. However,
debt service expenditures, as well as expenditures related to compensated absences, and
claims and judgments, are recorded only when payment is due. General capital asset
acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt
and acquisitions under capital leases are reported as other financing sources.
Property taxes, sales taxes, franchise taxes, licenses, and interest associated with the current
fiscal period are all considered to be susceptible to accrual and so have been recognized as
revenues of the current fiscal period. Entitlements are recorded as revenues when all
eligibility requirements are met, including any time requirements, and the amount is
received during the period or within the availability period for this revenue source (within
60 days of year end). Expenditure -driven grants are recognized as revenue when the
qualifying expenditures have been incurred and all other eligibility requirements have been
met, and the amount is received during the period or within the availability period for this
revenue source (within 60 days of year end). All other revenue items are considered to be
measurable and available only when cash is received by the government.
39
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
E. Assets, Liabilities, Deferred Outflows/Inflows of Resources and Net Position/Fund
Balance
1. Deposits and Investments
The City's cash and cash equivalents are considered to be cash on hand, demand deposits
and short term investments with original maturities of three months or less from the date of
acquisition. For the purpose of the statement of cash flows, the proprietary fund types
consider temporary investments with maturity of three months or less when purchased to be
cash equivalents.
In accordance with GASB Statement No. 31, Accounting and Reporting for Certain Investments
and External Investment Pools, the City reports all investments at fair value, except for "money
market investments" and "2a7-like pools." Money market investments, which are short-
term highly liquid debt instruments that may include U.S. Treasury and agency obligations,
are reported at amortized costs. Investment positions in external investment pools that are
operated in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of
1940, such as TexPool, are reported using the pools' share price.
The City has adopted a written investment policy regarding the investment of its funds as
defined in the Public Funds Investment Act, Chapter 2256, of the Texas Governmental Code.
In summary, the City is authorized to invest in the following:
Direct obligations of the U.S. Government
Fully collateralized certificates of deposit and money market accounts
Statewide investment pools
2. Receivables and Interfund Transactions
Transactions between funds that are representative of lending/borrowing arrangements
outstanding at the end of the year are referred to as either "interfund receivables/payables"
(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" in the fund financial statements. If the transactions
are between the primary government and its component unit, these receivables and payables
are classified as "due to/from component unit/primary government." 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 are offset by a fund balance reserve account in the applicable
governmental fund to indicate they are not available for appropriation and are not
expendable available financial resources.
All trade receivables are shown net of any allowance for uncollectible amounts.
40
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
3. Property Taxes
Property taxes are levied by October 1 on the assessed value listed as of the prior January 1
for all real and business personal property in conformity with Subtitle E, Texas Property Tax
Code. Taxes are due on receipt of the tax bill and are delinquent if not paid before February 1
of the year following the year in which imposed. Penalties are calculated after February 1 up
to the date collected by the government at the rate of 6% for the first month and increased
1% per month up to a total of 12%. Interest is calculated after February 1 at the rate of 1% per
month up to the date collected by the government. Under state law, property taxes levied on
real property constitute a lien on the real property which cannot be forgiven without specific
approval of the State Legislature. The lien expires at the end of twenty years. Taxes levied on
personal property can be deemed uncollectible by the City.
4. Inventories and Prepaid Items
The costs of governmental fund type inventories are recorded as expenditures when the
related liability is incurred, (i.e., the purchase method). The inventories are valued at the
lower of cost or market using the first-in/first-out method. Certain payments to vendors
reflect costs applicable to future accounting periods (prepaid expenditures) are recognized as
expenditures when utilized.
5. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g.,
roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or
business -type activities columns in the government -wide financial statements. Capital assets
are defined by the government, as assets with an initial individual cost of more than $5,000
and an estimated useful life in excess of one year. Such assets are recorded at historical cost
or estimated historical cost if purchased or constructed. Donated capital assets are recorded
at estimated fair market value at the date of donation. Major outlays for capital assets and
improvements are capitalized as projects are constructed.
Interest costs incurred in connection with construction of enterprise fund capital assets are
capitalized when the effects of capitalization materially impact the financial statements.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend assets' lives are not capitalized.
41
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
Property, plant, and equipment of the primary government, as well as the component units,
are depreciated using the straight-line method over the following estimated useful years.
Estimated
Asset Description
Useful Life
Vehicles
5-10 years
Furniture and equipment
5 to 10 years
Infrastructure
10-30 years
Water and sewer system
10-30 years
Buildings and improvements
5-40 years
6. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate
section for deferred outflows of resources. This separate financial statement element, deferred
outflows of resources, represents a consumption of net position that applies to a future
period(s) and so will not be recognized as an outflow of resources (expense/ expenditure)
until then. An example is a deferred charge on refunding reported in the government -wide
statement of net position. A deferred charge on refunding results from the difference in the
carrying value of refunded debt and its reacquisition price. This amount is deferred and
amortized over the shorter of the life of the refunded or refunding debt.
In addition to liabilities, the statement of financial position will sometimes report a separate
section for deferred inflows of resources. This separate financial statement element, deferred
inflows of resources, represents an acquisition of net position that applies to a future period(s)
and so will not be recognized as an inflow of resources (revenue) until that time. The
government has only one type of item, which arises only under a modified accrual basis of
accounting, which qualifies for reporting in this category. Accordingly, the item, unavailable
revenue, is reported only in the governmental funds balance sheet. The governmental funds
report unavailable revenues from two sources: property taxes and EMS revenues. These
amounts are deferred and recognized as an inflow of resources in the period that the
amounts become available.
7. Net Position Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted
(e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the
amounts to report as restricted — net position and unrestricted — net position in the
government -wide and proprietary fund financial statements, a flow assumption must be
made about the order in which the resources are considered to be applied.
42
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
8. Fund Balance Flow Assumptions
Sometimes the government will fund outlays for a particular purpose from both restricted
and unrestricted resources (the total of committed, assigned, and unassigned fund balance).
In order to calculate the amounts to report as restricted, committed, assigned, and
unassigned fund balance in the governmental fund financial statements a flow assumption
must be made about the order in which the resources are considered to be applied. It is the
government's policy to consider restricted fund balance to have been depleted before using
any of the components of unrestricted fund balance. Further, when the components of
unrestricted fund balance can be used for the same purpose, committed fund balance is
depleted first, followed by assigned fund balance. Unassigned fund balance is applied last.
9. Fund Balance Policies
Fund balance of governmental funds is reported in various categories based on the nature of
any limitations requiring the use of resources for specific purposes. The government itself
can establish limitations on the use of resources through either a commitment (committed
fund balance) or an assignment (assigned fund balance).
The committed fund balance classification includes amounts that can be used only for the
specific purposes determined by a formal action of the government's highest level of
decision -making authority. The governing council is the highest level of decision -making
authority for the government that can, by adoption of an ordinance prior to the end of the
fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance
remains in place until a similar action is taken (the adoption of another ordinance) to remove
or revise the limitation.
Amounts in the assigned fund balance classification are intended to be used by the
government for specific purposes but do not meet the criteria to be classified as committed.
The governing body (council) has by resolution authorized the City Manager to assign fund
balance. The Council may also assign fund balance as it does when appropriating fund
balance to cover a gap between estimated revenue and appropriations in the subsequent
year's appropriated budget. Unlike commitments, assignments generally only exist
temporarily. In other words, an additional action does not normally have to be taken for the
removal of an assignment. Conversely, as discussed above, an additional action is essential
to either remove or revise a commitment.
10. Compensated Absences
The liability for compensated absences reported in the government -wide and proprietary
fund statements consist of unpaid, accumulated vacation balances. The liability has been
calculated using the vesting method, in which leave amounts for both employees who
currently are eligible to receive termination payments and other employees who are
expected to become eligible in the future to receive such payments upon termination are
43
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
included. Vested or accumulated vacation leave and compensated leave of government -wide
and proprietary funds are recognized as an expense and liability of those funds as the
benefits accrue to employees.
It is the City's policy to liquidate compensated absences with future revenues rather than
with currently available expendable resources. Accordingly, the City's governmental funds
recognize accrued compensated absences when it is paid.
11. Long -Term Obligations
In the government -wide financial statements, long-term debt and other long-term
obligations are reported as liabilities in the applicable governmental activities statement of
net position. The long-term debt consists primarily of bonds payable and accrued
compensated absences.
Long-term debt for governmental funds is not reported as liabilities in the fund financial
statements until due. The debt proceeds are reported as other financing sources, net of the
applicable premium or discount and payments of principal and interest reported as
expenditures. In the governmental fund types, issuance costs, even if withheld from the
actual net proceeds received, are reported as debt service expenditures. However, claims
and judgments paid from governmental funds are reported as a liability in the fund financial
statements only for the portion expected to be financed from expendable available financial
resources.
Long-term debt and other obligations, financed by proprietary funds, are reported as
liabilities in the appropriate funds. For proprietary fund types, bond premiums, and
discounts are deferred and amortized over the life of the bonds using the effective interest
method, if material. Bonds payable are reported net of the applicable bond premium or
discount. Issuance costs are expensed as incurred in accordance with GASB statement no.
65.
Assets acquired under the terms of capital leases are recorded as liabilities and capitalized in
the government -wide financial statements at the present value of net minimum lease
payments at inception of the lease. In the year of acquisition, capital lease transactions are
recorded as other financing sources and as capital outlay expenditures in the general fund.
Lease payments representing both principal and interest are recorded as expenditures in the
general fund upon payment with an appropriate reduction of principal recorded in the
government -wide financial statements.
12. Estimates
The preparation of financial statements, in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
44
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
of the financial statements and the reported amounts of revenues and expenditures/expenses
during the reporting period. Actual results could differ from those estimates.
13. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and
deferred inflows of resources related to pensions, and pension expense, information about
the Fiduciary Net Position of the Texas Municipal Retirement System (TMRS) and additions
to/deductions from TMRS's Fiduciary Net Position have been determined on the same basis
as they are reported by TMRS. For this purpose, plan contributions are recognized in the
period that compensation is reported for the employee, which is when contributions are
legally due. Benefit payments and refunds are recognized when due and payable in
accordance with the benefit terms. Investments are reported at fair value.
II. RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS
A. Explanation of certain differences between the governmental fund balance sheet and the
government -wide statement of net position.
The governmental fund balance sheet includes reconciliation between fund balance -total
governmental funds and net position -governmental activities as reported in the government -wide
statement of net position. One element of that reconciliation explains that long-term
liabilities, including bonds, are not due and payable in the current period and, therefore, are
not reported in the funds.
B. Explanation of certain differences between the governmental fund statement of revenues,
expenditures, and changes in fund balances and the government -wide statement of
activities.
The governmental fund statement of revenues, expenditures, and changes in fund balances
includes a reconciliation between net changes in fund balances — total governmental funds
and changes in net position of governmental states that, "the issuance of long-term debt (e.g.,
bonds) provides current financial resources to governmental funds, while the repayment of
the principal of long-term debt consumes the current financial resources of governmental
funds. Also, governmental funds report the effect of premiums, discounts, and similar items
when debt is first issued, whereas these amounts are deferred and amortized in the
statement of activities."
III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Annual budgets are adopted on a basis consistent with generally accepted accounting
principles for all governmental and enterprise funds.
45
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
The appropriated budget is prepared by fund, function, and department. The legal level of
control is the fund level. No funds can be transferred or added to a budgeted item without
Council approval. Appropriations lapse at the end of the year. Several supplemental budget
appropriations were made during the year.
For the year ended September 30, 2015, expenditures exceeded appropriations at the legal
level of control for the general fund by $129,129.
IV. DETAILED NOTES ON ALL FUNDS
A. Deposits and Investments
As of September 30, 2015, the primary government had the following investments:
Investment Type
Certificates of deposit
Average Maturity
Fair Value (Years)
$ 1,606,671 0.44
Total fair value $ 1,606,671
Portfolio weighted average maturity 0.44
Interest rate risk — In accordance with its investment policy, the City manages its exposure to
declines in fair values by limiting the weighted average of maturity not to exceed five years;
structuring the investment portfolio so that securities mature to meet cash requirements for
ongoing operations; monitoring credit ratings of portfolio position to assure compliance with
rating requirements imposed by the Public Funds Investment Act; and invest operating
funds primarily in short-term securities or similar government investment pools.
Credit risk — The City's investment policy limits investments to obligations of the United
States, State of Texas, or their agencies and instrumentalities with an investment quality
rating of not less than "A" or its equivalent, by a nationally recognized investment rating
firm. Other obligations must be unconditionally guaranteed (either express or implied) by
the full faith and credit of the United States Government or the issuing U.S. agency and
investment pools with an investment quality not less than AAA or AAA-m, or equivalent, by
at least one nationally recognized rating service.
Custodial credit risk — deposits In the case of deposits, this is the risk that in the event of a bank
failure, the City's deposits may not be returned to it. State statutes require that all deposits
in financial institutions be insured or fully collateralized by U.S. government obligations or
its agencies and instrumentalities or direct obligations of Texas or its agencies and
instrumentalities that have a market value of not less than the principal amount of the
deposits. As of September 30, 2015, the market values of pledged securities and FDIC
exceeded bank balances.
46
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
Custodial credit risk — investments For an investment, this is the risk that, in the event of the
failure of the counterparty, the City will not be able to recover the value of its investments or
collateral securities that are in the possession of an outside party. The City's investment
policy requires that it will seek to safekeeping securities at financial institutions, avoiding
physical possession. Further, all trades, where applicable, are executed by delivery versus
payment to ensure that securities are deposited in the City's safekeeping account prior to the
release of funds.
B. Receivables
The following comprise receivable balances of the primary government at year end:
Property taxes
Sales tax
Franchise & local taxes
EMS
Accounts
Other
Allowance
Debt
General
Service
4A Fund
$ 75,134
$ 31,139
$ - $
139,817
-
58,692
33,327
-
-
262,383
-
-
100,466
-
6,556
18,113
-
-
(212,957)
(11,145)
-
$ 416,283
$ 19,994
$ 65,248 $
Nonmajor Water, Sewer
Governmental & Electric
58,692
1,750,591
2,950
(157,716)
Total
$ 106,273
257,201
33,327
262,383
1,857,613
21,063
(381,818)
58,692 $ 1,595,825 $ 2,156,042
47
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
C. Capital Assets
A summary of changes in governmental activities capital assets for the year end was as
follows:
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets not being depreciated
Capital assets, being depreciated:
Infrastructure
Buildings and improvements
Machinery and equipment
Total capital assets being depreciated
Less accumulated depreciation
Infrastructure
Buildings and improvements
Machinery and equipment
Total accumulated depreciation
Net capital assets being depreciated
Total Capital Assets
Beginning
Decreases/
Ending
Balances
Increases
Reclassifications
Balances
$ 906,307
$ 138,626
$ - $
1,044,933
417,115
192,668
(42,089)
567,694
1,323,422
331,294
(42,089)
1,612,627
11,814,273
38,938
-
11,853,211
7,044,897
-
42,089
7,086,986
2,814,977
701,431
(29,640)
3,486,768
21,674,147
740,369
12,449
22,426,965
5,063,350
422,609
-
5,485,959
1,300,079
317,744
-
1,617,823
1,613,971
244,401
(29,640)
1,828,732
7,977,400
984,754
(29,640)
8,932,514
13,696,747
(244,385)
42,089
13,494,451
$ 15,020,169
$ 86,909
$ - $
15,107,078
Depreciation was charged to governmental functions as follows:
General government $
76,607
Public safety
89,177
Streets and sanitation
462,000
Fire and rescue
86,260
Culture and recreation
270,710
Total Governmental Activities Depreciation Expense $
984,754
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
A summary of changes in
business -type activities capital assets for the year end
was as
follows:
Beginning Decreases/
Ending
Balances Increases Reclassifications
Balances
Capital assets, not being depreciated:
Land $
323,164 $ - $ - $
323,164
Construction in progress
812,601 1,167,502 -
1,980,103
Total capital assets not being depreciated
1,135,765 1,167,502 -
2,303,267
Capital assets, being depreciated:
Infrastructure
22,544,671 72,784 -
22,617,455
Buildings and improvements
865,245 - -
865,245
Machinery and equipment
1,688,486 86,747 (32,656)
1,742,577
Total capital assets being depreciated
25,098,402 159,531 (32,656)
25,225,277
Less accumulated depreciation
Infrastructure
12,304,453 660,903 -
12,965,356
Buildings and improvements
315,858 51,855 -
367,713
Machinery and equipment
1,183,654 120,740 (32,656)
1,271,738
Total accumulated depreciation
13,803,965 833,498 (32,656)
14,604,807
Net capital assets being depreciated
11,294,437 (673,967) -
10,620,470
Total Capital Assets $
12,430,202 $ 493,535 $ - $
12,923,737
Depreciation was charged to business -type activities as follows:
Water $ 282,414
Sewer 236,318
Electric 297,514
Other 17,252
Total Business -type Activities Depreciation Expense $ 833,498
49
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
D. Long-term Debt
The following is a summary of changes in
the City's total governmental long-term liabilities
for the year ended. In general, the City uses the debt service fund to liquidate governmental
long-term liabilities.
Amounts
Beginning
Ending
Due within
Balance Additions Reductions Balance
One Year
Governmental Activities:
Bonds, notes and other
payables:
General Obligation Bonds $ 1,155,000 $
- $ (182,600) $ 972,400
$ 184,800
Certificates of Obligation 5,008,800
- (412,700) 4,596,100
428,600
Less deferred amounts:
For issuance premiums 76,025
- (7,826) 68,199
-
6,239,825
- (603,126) 5,636,699
613,400
Other liabilities:
Notes payable
479,210
- (39,762)
439,448
41,977
Capital leases payable
573,345
500,000 (143,004)
930,341
194,024
Compensated absences
114,242
130,728 (100,516)
144,454
130,009
Total Governmental Activities $
7,406,622 $
630,728 $ (886,408) $
7,150,942 $
979,410
Long-term liabilities due in more than one year
$
6,171,532
Business -Type Activities:
General Obligation Bonds
$ 1,470,000 $
- $ (232,400) $
1,237,600 $ 235,200
Certificates of Obligation
6,376,200
- (432,300)
5,943,900 446,400
Less deferred amounts:
For issuance premiums
323,666
- (22,496)
301,170 -
8,169,866
- (687,196)
7,482,670 681,600
Other liabilities:
Capital leases payable205,760 - (46,333) 159,427 117,944
Compensated absences 79,493 60,489 (60,489) 79,493 71,544
Total Business -Type Activities $ 8,455,119 $ 60,489 $ (794,018) $ 7,721,590 $ 871,088
Long-term liabilities due in more than one year $ 6,850,502
Long-term liabilities applicable to the City's governmental activities are not due and
payable in the current period and accordingly, are not reported as fund liabilities in the
governmental funds. Interest on long-term debt is not accrued in governmental funds, but
rather is recognized as an expenditure when due.
50
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
Long-term debt at year end was comprised of the following debt issues:
Business -
Governmental Type
Activities Activities Total
General Obligation Bonds:
$3,495,000 General Obligation Refunding Bond, Series 2012, due in
installments through 2021, interest at 2% to 3% $ 972,400 $ 1,237,600 $ 2,210,000
Total General Obligation Bonds $ 972,400 $ 1,237,600 $ 2,210,000
Certificates of Obligation:
$6,500,000 Certificates of Obligation, Series 2006,
due in annual installments through 2021, interest at 4% to 5% $
1,414,500 $
1,660,500
$ 3,075,000
$1,750,000 Certificates of Obligation, Series 2007,
due in annual installments through 2027, interest at 4.4%
418,200
811,800
1,230,000
$3,200,000 Certificates of Obligation, Series 2009,
due in annual installments through 2026, interest at 3% to 4.75%
2,290,000
-
2,290,000
$4,260,000 Certificates of Obligation, Series 2013,
due in annual installments through 2033, interest at 2% to 3.7%
473,400
3,471,600
3,945,000
Total Certificates of Obligation $
4,596,100 $
5,943,900
$ 10,540,000
Less deferred amounts:
Issuance premium
$
68,199
$
301,170 $
369,369
Total Deferred Amounts
$
68,199
$
301,170 $
369,369
Notes Payable:
$660,000 Notes payable to a financial institution, due in monthly
installments of $5,106 through June 2024, including interest at 4.6%
$
439,448
$
- $
439,448
Total Notes Payable
$
439,448
$
- $
439,448
Capital Leases Payable:
$807,573 Capital lease payable to financial institution, due in annual
installments of $104,454 through 2015, interest at 1.77% $
$340,119 Capital lease payable to financial institution, due in annual
installments of $106,996 through 2016, interest at 3.3%
$190,309 Capital lease payable to financial institution, due in annual
installments of $50,235 through 2017, interest at 2.89%
$435,000 Capital lease payable to financial institution, due in annual
installments of $51,535 through 2024, interest at 3.346%
$500,000 Capital lease payable to financial institution, due in annual
installments of $134,279 through 2019, interest at 2.947%
Total Capital Leases Payable $
Compensated Absences
- $ 70,492 $ 70,492
35,910 - 35,910
- 88,935 88,935
394,431 - 394,431
500,000 - 500,000
930,341 $ 159,427 $ 1,089,768
144,454 79,493 223,947
Total Long-term Liabilities $ 7,150,942 $ 7,721,590 $ 14,872,532
51
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
The annual requirements to amortize governmental and business -type activities debt issues
outstanding at year ending were as follows:
General Obligation Bonds
Year ending
Governmental Activities
Business -Type Activities
September 30,
Principal
Interest
Principal
Interest
2016
$
184,800 $
27,962
$
235,200
$ 35,588
2017
154,000
22,418
196,000
28,532
2018
156,200
17,798
198,800
22,652
2019
162,800
13,112
207,200
16,688
2020
169,400
8,228
215,600
10,472
2021
145,200
3,993
184,800
5,082
$
972,400 $
93,511
$
1,237,600
$ 119,014
Combination Tax
and Revenue Certificates of Obligations
Year ending
Governmental Activities
Business -Type Activities
September 30,
Principal
Interest
Principal
Interest
2016
$
428,600 $
194,926
$
446,400
$ 243,467
2017
447,400
176,803
467,600
225,820
2018
459,900
159,199
480,100
209,883
2019
480,800
140,888
494,200
192,630
2020
499,600
121,729
515,400
174,794
2021
521,100
101,706
533,900
155,364
2022
273,500
79,919
236,500
135,067
2023
286,400
68,258
248,600
127,002
2024
297,000
55,768
253,000
118,527
2025
309,300
42,686
260,700
109,019
2026
323,900
28,194
276,100
97,363
2027
71,800
13,024
288,200
85,021
2028
28,800
9,768
211,200
71,632
2029
30,600
8,400
224,400
61,600
2030
31,800
6,870
233,200
50,380
2031
33,600
5,280
246,400
38,720
2032
35,400
3,600
259,600
26,400
2033
36,600
1,830
268,400
13,420
$
4,596,100 $
1,218,847
$
5,943,900
$ 2,136,108
52
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
General obligation bonds are direct obligations of the City for which its full faith and credit
are pledged. Repayment of general obligation bonds are from taxes levied on all taxable
property located within the City. The City is not obligated in any manner for special
assessment debt.
Capital Leases
Year ending
September 30,
2016 $
2017
2018
2019
2020
2021
2022
2023
2024
Governmental Activities
Principal Interest
194,024 $
162,680
167,632
172,736
43,716
45,179
46,690
48,252
49,432
$ 930,341 $
28,881
23,135
18,182
13,079
7,819
6,357
4,845
3,283
1,668
107,249
Business -Type Activities
Principal Interest
$ 117,944 $ 2,783
41,483 1,411
$ 159,427 $ 4,194
The City has entered into capital lease agreements. The leased property under capital leases
is classified as machinery and equipment with a total carrying value net of depreciation of
approximately $1,503,813 as of year end.
Note Payable
Year ending
Governmental Activities
September 30,
Principal
Interest
2016
$ 41,977 $
19,290
2017
43,949
17,318
2018
46,014
15,253
2019
48,176
13,091
2020
50,439
10,828
2021
52,809
8,458
2022
55,290
5,977
2023
57,887
3,380
2024
42,907
4,063
$ 439,448 $
97,658
53
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
E. Conduit Debt
Before the current year the City issued notes payable totaling $230,461,407 for the purpose of
assisting with financing needed by not -for -profit organizations to promote their cause. The
final maturities on notes payable range from March 2017 through December 2041. The notes
are secured by various assets of the borrower.
The City has no liability for the notes payable in the event of default by the borrowers.
Accordingly, the bonds are not reported as liabilities in the City's financial statements.
F. Deferred Charge on Refunding
A deferred charge resulting from the issuance of the 2012 general obligation refunding
bonds has been recorded as a deferred outflow of resources and is being amortized to
interest expense over the term of the refunded debt. Current year balances for governmental
and business -type activities totaled $22,006 and $49,537, respectively. Current year
amortization expense for governmental and business -type activities totaled $3,912 and
$8,807, respectively.
G. Interfund Transactions
Amounts transferred between funds relate to amounts collected, various capital
expenditures, annual funding, and debt payments.
Transfer In
Nonmajor
Water, Sewer
Internal
Transfer out:
General
Debt Service Governmental
& Electric
Service
Total
General
$ -
$ - $ 350,000
$ -
$ 277,154 r $
627,154 t
Nonmajor Governmental
-
212,500 -
10,998
-
223,498
Debt Service
158,535
- -
-
-
158,535
Water, Sewer & Electric
882,250
- 25,000
-
824,176
1,731,426
$ 1,040,785
$ 212,500 $ 375,000
$ 10,998
$ 1,101,330 $
2,740,613
1 - This value is after full conversion to the accrual method. For fund reporting purposes these balances are greater by $87,341. This amount
is only recognized at the government wide level for the general fund, and is due to the amount of transfer in received by the general fund
from the internal service fund for a partial transfer of the net pension liability and deferred outflows of resources between the funds at the
government wide level.
H. Fund Equity
The City records restricted net position on amounts with externally imposed restrictions (e.g.,
through debt covenants or by grantors) or restrictions imposed by law through constitutional
provisions or enabling legislation. Total restricted net position for the primary government
was $3,713,890. Of which, $39,829 is restricted by enabling legislation.
54
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
V. OTHER INFORMATION
A. Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to and
destruction of assets, errors and omissions; and natural disasters for which the City
participates along with 2,617 other entities in the Texas Municipal League's
Intergovernmental Risk Pools. The Pool purchases commercial insurance at group rates for
participants in the Pool. The City has no additional risk or responsibility to the Pool outside
of the payment of insurance premiums. The City has not significantly reduced insurance
coverage or had settlements which exceeded coverage amounts for the past three years.
B. Contingent Liabilities
Amounts received or receivable from granting agencies are subject to audit and adjustment
by grantor agencies, principally the federal government. Any disallowed claims, including
amounts already collected, may constitute a liability of the applicable funds. The amounts of
expenditures which may be disallowed by the grantor cannot be determined at this time
although the City expects such amounts, if any, to be immaterial.
Liabilities are reported when it is probable that a loss has occurred and the amount of the
loss can be reasonably estimated. Liabilities include an amount for claims that have been
incurred but not reported. Claim liabilities are calculated considering the effects of inflation,
recent claim settlement trends, including frequency and amount of payouts, and other
economic and social factors.
55
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
C. Construction commitments
The government has active construction projects as of September 30, 2015. The projects
include street construction and improvements, sewer plant and the construction of
additional water lines and repairs. At year end the government's commitments with
contractors are as follows:
Remaining
Project Vendor Commitment
McReynolds Road Reconstruction
Pacheco Koch, LLC $
20,308
McReynolds Road Reconstruction
HRM Land Acquisition
2,813
Project Total
23,121
Server Consolidation
Austin Lane Technology
20,166
Project Total
20,166
12" Water Line Chapman to Belz
Pacheco Koch, LLC
4,410
12" Water Line Chapman to Belz
Card Services
255
12" Water Line Chapman to Belz
Vessels Construction
144,922
Water Line Lois to View
Pacheco Koch, LLC
7,390
Water Well and Ground Storage
LNV Inc.
25,635
15" Line Chapman to Belz
Pacheco Koch, LLC
5,033
15" Line Chapman to Belz
Card Services
255
15" Line Chapman to Belz
Vessels Construction
288,774
18" Line South of Utility
Pacheco Koch LLC
50,500
15" Line Utility to Lois
Pacheco Koch LLC
47,839
12" Line Lois to View
Pacheco Koch LLC
27,106
Jones Willow Trunk Line
Teague Nail
1,224
New Sewer Line
Alan Plummer Associates
420,765
Cowling Road Lift Station
Alan Plummer Associates
2,755
Project Total
1,026,863
Total $
1,070,150
56
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
D. Related Party Activity
On March 1, 2012, the City entered into a non -cancelable lease agreement with a corporation
of which a city council member is a principal member of management. The leased property
is owned by the 4A Fund and has a cost $1,083,797 with accumulated depreciation of
$214,785 as of September 30, 2015. The lease provides for a base rent and an adjustment each
year related to excess operating expenses (if any) incurred annually.
During the year ended September 30, 2015, the City received $78,667 in rental revenue from
this lease. The lease was continued on a month to month basis beginning in July 2015.
Subsequent to yearend, the City was negotiating the sale of this property for $1,508,000 to
the corporation that was formerly leasing the property.
E. Arbitrage
The Tax Reform Act of 1986 instituted certain arbitrage consisting of complex regulations
with respect to issuance of tax-exempt bonds after August 31, 1986. Arbitrage regulations
deal with the investment of tax-exempt bond proceeds at an interest yield greater than the
interest yield paid to bondholders. Generally, all interest paid to bondholders can be
retroactively rendered taxable if applicable rebates are not reported and paid to the Internal
Revenue Service at least every five years for applicable bond issues. Accordingly, there is
the risk that if such calculations are not performed correctly, a substantial liability to the City
could result. The City does anticipate that it will have an arbitrage liability and performs
annual calculations to estimate this potential liability. The City will also engage an arbitrage
consultant to perform the calculations in accordance with Internal Revenue Service's rules
and regulations if indicated.
F. Defined Benefit Pension Plans
1. Plan Description
The City of Sanger, Texas participates as one of 860 plans in the nontraditional, joint
contributory, hybrid defined benefit pension plan administered by the Texas Municipal
Retirement System (TMRS). TMRS is an agency created by the State of Texas and
administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code
(the TMRS Act) as an agent multiple -employer retirement system for municipal employees
in the State of Texas. The TMRS Act places the general administration and management of
the System with a six -member Board of Trustees. Although the Governor, with the advice
and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of
Texas. TMRS's defined benefit pension plan is a tax -qualified plan under Section 401 (a) of
the Internal Revenue Code. TMRS issues a publicly available comprehensive annual
financial report (CAFR) that can be obtained at www.tmrs.com.
All eligible employees of the city are required to participate in TMRS.
57
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
2. Benefits Provided
TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by
the governing body of the city, within the options available in the state statutes governing
TMRS.
At retirement, the benefit is calculated as if the sum of the employee's contributions, with
interest, and the city -financed monetary credits with interest were used to purchase an
annuity. Members may choose to receive their retirement benefit in one of seven payments
options. Members may also choose to receive a portion of their benefit as a Partial Lump
Sum Distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot
exceed 75% of the member's deposits and interest.
The plan provisions are adopted by the governing body of the City, within the options
available in the state statutes governing TMRS. Plan provisions for the City were as follows:
Employee deposit rate
Matching ratio (city to
employee)
Years required for vesting
Service retirement eligibility
(expressed as age / years of
service)
Updated service credit
Annuity increase (to retirees)
Plan Year 2014
6.0%
2to1
5
60/5, 0/25
100% Repeating Transfers
0% of CPI
Employees covered by benefit terms
Plan Year 2015
6.0%
2to1
5
60/5, 0/25
100% Repeating Transfers
0% of CPI
At the December 31, 2014 valuation and measurement date, the following employees were
covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits
12
Inactive employees entitled to but not yet receiving benefits
20
Active employees
64
Total
96
3. Contributions
The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross
earnings, and the city matching percentages are either 100%,150%, or 200%, both as adopted
by the governing body of the City. Under the state law governing TMRS, the contribution
rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN)
actuarial cost method. The actuarially determined rate is the estimated amount necessary to
60
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
finance the cost of benefits earned by employees during the year, with an additional amount
to finance any unfunded accrued liability.
Employees for the City of Sanger were required to contribute 6% of their annual gross
earnings during the fiscal year. The contribution rates for the City of Sanger were 6.75% and
7.09% in calendar years 2014 and 2015, respectively. The City's contributions to TMRS for the
year ended September 30, 2015, were $225,752, and were equal to the required contributions.
4. Net Pension Liability
The City's Net Pension Liability (NPL) was measured as of December 31, 2014, and the Total
Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an
actuarial valuation as of that date.
Actuarial assumptions:
The Total Pension Liability in the December 31, 2014 actuarial valuation was determined
using the following actuarial assumptions:
Inflation 3.0% per year
Overall payroll growth 3.0% per year
Investment Rate of Return 7.0%, net of pension plan investment expense, including
inflation
Salary increases were based on a service -related table. Mortality rates for active members,
retirees, and beneficiaries were based on the gender -distinct RP2000 Combined Healthy
Mortality Table, with male rates multiplied by 109% and female rates multiplied by 103%.
The rates are projected on a fully generational basis by scale BB to account for future
mortality improvements. For disabled annuitants, the gender -distinct RP2000 Disabled
Retiree Mortality Table is used, with slight adjustments.
Actuarial assumptions used in the December 31, 2014, valuation were based on the results of
actuarial experience studies. The experience study in TMRS was for the period January 1,
2006 through December 31, 2009, first used in the December 31, 2010 valuation. Healthy
post -retirement mortality rates and annuity purchase rates were updated based on a
Mortality Experience Investigation Study covering 2009 through 2011, and dated December
31, 2013. These assumptions were first used in the December 31, 2013 valuation, along with a
change to the Entry Age Normal (EAN) actuarial cost method. Assumptions are reviewed
annually. No additional changes were made for the 2014 valuation.
The long-term expected rate of return on pension plan investments is 7.0%. The pension
plan's policy in regard to the allocation of invested assets is established and may be
amended by the TMRS Board of Trustees. Plan assets are managed on a total return basis
with an emphasis on both capital appreciation as well as the production of income, in order
to satisfy the short-term and long-term funding needs of TMRS.
59
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
The long-term expected rate of return on pension plan investments was determined using a
building-block method in which best estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for
each major asset class. These ranges are combined to produce the long-term expected rate of
return by weighting the expected future real rates of return by the target asset allocation
percentage and by adding expected inflation. The target allocation and best estimates of
arithmetic real rates of return for each major asset class are summarized in the following
table:
Asset Class
Target Allocation
Long -Term Expected Real
Rate of Return (Arithmetic)
Domestic Equity
17.5%
4.80%
International Equity
17.5%
6.05%
Core Fixed Income
30.0%
1.50%
Non -Core Fixed Income
10.0%
3.50%
Real Return
5.0%
1.75%
Real Estate
10.0%
5.25%
Absolute Return
5.0%
4.25%
Private Equity
5.0%
8.50%
Total
100.0%
Discount Rate:
The discount rate used to measure the Total Pension Liability was 7.0%. The projection of
cash flows used to determine the discount rate assumed that employee and employer
contributions will be made at the rates specified in statute. Based on that assumption, the
pension plans Fiduciary Net Position was projected to be available to make all projected
future benefit payments of current active and inactive employees. Therefore, the long-term
expected rate of return on pension plan investments was applied to all periods of projected
benefit payments to determine the Total Pension Liability.
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
Changes in the Net Pension Liability:
Balance at 12/31/13
Changes for the year:
Service Cost
Interest (on the Total Pension Liab.)
Difference between expected and
actual experience
Contributions - employer
Contributions - employee
Net investment income
Benefit payments, including
refunds of emp. contributions
Administrative expense
Other changes
Net changes
Balance at 12/31/1-4
Total Pension Plan Fiduciary Net Pension
Liability (a) Net Position (b) Liability (a) - (b)
$ 6,740,172 $ 6,120,633 $ 619,539
340,004 - 340,004
476,571 - 476,571
47,610 - 47,610
- 211,283 (211,283)
187,821 (187,821)
350,203 (350,203)
(204,026) (204,026) -
(3,656) 3,656
- (301) 301
660,159 541,324 118,835
$ 7,400,331 $ 6,661,957 $ 738,374
Sensitivity of the net pension liability to changes in the discount rate
The following presents the net pension liability of the City, calculated using the discount rate
of 7.0%, as well as what the City's net pension liability would be if it were calculated using a
discount rate that is 1-percentage-point lower (6.0%) or 1-percentage-point higher (8.0%)
than the current rate:
1% Decrease
6.00%
Current Single Rate
Assumption 7.00%
1% Increase
8.00%
$ 2,029,228
$ 738,374
$ (303,658)
Pension Plan Fiduciary Net Position:
Detailed information about the pension plans Fiduciary Net Position is available in a
separately -issued TMRS financial report. That report may be obtained on the internet at
www.tinrs.com.
61
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
5. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
At September 30, 2015, the City reported deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
Difference between projected and
investment earnings
Differences between expected and
actual economic experience
Contributions subsequent to the
measurement date
Total
Deferred Deferred
Outflows of Resources Inflows of Resources
$ 40,417 $
62,593 -
165,179 -
$ 268,189 $
The City reported $268,189 as deferred outflows of resources related to pensions resulting
from contributions subsequent to the measurement date that will be recognized as a
reduction of the net pension liability for the year ending September 30, 2016. Other amounts
reported as deferred outflows and inflows of resources related to pensions will be
recognized in pension expense as follows:
Year ended December 31:
2015
$ 22,840
2016
22,840
2017
22,840
2018
22,841
2019
7,192
Thereafter
4,457
$ 103,010
Supplemental Death Benefits Plan
The City also participates in the cost sharing multiple -employer defined benefit group -term
life insurance plan operated by the Texas Municipal Retirement System (TMRS) known as
the Supplemental Death Benefits Fund (SDBF). The City elected, by ordinance, to provide
group -term life insurance coverage to both current and retired employees. The City may
terminate coverage under and discontinue participation in the SDBF by adopting an
ordinance before November 1 of any year to be effective the following January 1.
M►
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
The death benefit for active employees provides a lump -sum payment approximately equal
to the employee's annual salary (calculated based on the employee's actual earnings, for the
12-month period preceding the month of death); retired employees are insured for $7,500;
this coverage is an "other postemployment benefit," or OPEB.
The City contributes to 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 City's retiree contribution rates to the TMRS SDBF for the years ended 2014, 2013 and
2012 are as follows:
Annual
Actual
Required
Contribution
Percentage of
Plan/
Contribution
Made
ARC
Calendar Year
(Rate)
(Rate)
Contributed
2013
0.01%
0.01%
100.0%
2014
0.01%
0.01%
100.0%
2015
0.01%
0.01%
100.0%
The City's contributions to the TMRS SDBF for the years ended 2015, 2014, and 2013 were
$322, $306, and $293, respectively, which equaled the required contributions each year.
63
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
G. Restatement
Due to the implementation of GASB No. 68, the City restated its beginning net position
within government activities and business -type activities to properly reflect the net pension
liability and deferred outflows of resources as prescribed by this accounting standard. This
adjustment was recorded at the fund level for proprietary funds only, and recorded at the
government wide level for both governmental activities and business -type activities. The
below tables summarize the changes to net position as a result of this change in accounting
method.
Prior year ending net position, as reported
Addition of net pension liability
Addition of deferred outflow of resources due to pension contributions
Restated beginning net position
Prior year ending net position, as reported
Addition of net pension liability
Addition of deferred outflow of resources due to pension contributions
Restated beginning net position
Prior year ending net position, as reported
Addition of net pension liability
Addition of deferred outflow of resources due to pension contributions
Restated beginning net position
H. Subsequent Events
Governmental
Activities
$ 11,841,287
(441,249)
107,807
$ 11,507,845
Business -Type
Activities
$ 14,459,004
(178,288)
43,560
$ 14,324,276
Water, Sewer
& Sanitation
$ 14,459,004
(178,288)
43,560
$ 14,324,276
In November of 2015, the City issued a Combination Tax and Revenue Certificate of
Obligation bond for $5,870,000. The bonds accrue interest at 2.6749% and mature between
2026 through 2035.
Subsequent to yearend, the City was negotiating the sale of a property for $1,508,000
to a corporation of which a city council member is a principal member of management.
This member of city council resigned from city council in November of 2015.
64
City of Sanger, Texas
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2015
I. New Accounting Pronouncements
The City has adopted the provision of Governmental Accounting Standard Board (GASB
Statement No. 68, entitled Accounting and Financial Reporting for Pensions, an amendment of
GASB Statement No. 27 and Statement No. 71, Pension Transition for Contributions Made
Subsequent to the Measurement Date. As part of GASB 68 the City is required to record its net
funded pension liability.
GASB also issued Statement No. 69, entitled Government Combinations and Disposals of
Government Operation, and GASB Statement No. 70, entitled Accounting and Financial
Reporting for Nonexchange Financial Guarantees. Both statements were adopted this fiscal year
but had no effect on these accompanying financial statements.
The, GASB has issued Statement No. 72, entitled Fair Value Measurement and Application;
Statement No. 73, entitled, Accounting and Financial Reporting for Pensions and Related Assets
That Are Not zvithin the Scope of GASB Statement 68, and Amendments to certain Provisions of
GASB Statements 67 and 68; GASB Statement No. 74 entitled, Financial Reporting for
Postemployment Benefit Plans Other Than Pension Plans; GASB Statement No. 75, entitled,
Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions; GASB
Statement No. 76; entitled, The Hierarchy of Generally Accepted Accounting Principles for State
and Local Government; and GASB Statement No. 77; entitled, Tax Abatement Disclosures, zvhich
zvill require adoption in the ficture, if applicable. These statements may or will have a material
effect on the City's financial statements once implemented. The City will be analyzing the
effects of these pronouncements and plans to adopt them as applicable by their effective
date.
65
(This page intentionally left blank.)
39
REQUIRED SUPPLEMENTARY INFORMATION
67
(This page intentionally left blank.)
39
City of Sanger, Texas
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL- GENERAL FUND
For the Year Ended September 30, 2015
Original
Variance with
Budget
Final Budget
Actual
Final Budget
Revenues
Property tax
$ 2,147,500
$ 2,147,500 $
2,203,590
$ 56,090
Sales tax
663,000
663,000
813,634
150,634
Franchise and local taxes
219,200
219,200
231,380
12,180
License and permits
125,200
125,200
122,509
(2,691)
Charges for services
748,500
748,500
805,339
56,839
Fire and rescue
495,000
495,000
512,202
17,202
Contributions and donations
6,000
6,000
1,400
(4,600)
Intergovernmental
-
3,250
49,031
45,781
Fines and forfeitures
176,900
176,900
128,839
(48,061)
Investment income
2,500
2,500
3,009
509
Other revenue
88,800
88,800
72,532
(16,268)
Total Revenues
4,672,600
4,675,850
4,943,465
267,615
Expenditures
Current:
General government
908,372
906,877
970,164
(63,287)
Police department
1,332,875
1,353,375
1,243,133
110,242
Municipal court
233,107
233,107
202,988
30,119
Fire and EMS
856,506
859,756
778,877
80,879
Parks and recreation
530,527
530,527
443,554
86,973
Public works
685,502
685,502
614,350
71,152
Debt service:
Principal
143,008
143,008
143,004
4
Interest
15,527
15,527
15,527
-
Capital outlay
268,925
249,920
695,131
(445,211)
Total Expenditures
4,974,349
4,977,599
5,106,728
(129,129)
Revenues Over (Under) Expenditures
(301,749)
(301,749)
(163,263)
138,486
Other Financing Sources (Uses)
Transfers in
1,040,785
1,040,785
1,040,785
-
Transfers (out)
(785,021)
(785,021)
(714,494)
70,527
Capital lease
-
-
500,000
500,000
Sale of capital assets
25,000
25,000
60,798
35,798
Insurance recoveries
25,000
25,000
14,413
(10,587)
Total Other Financing Sources
305,764
305,764
901,502
595,738
Net Change in Fund Balance
$ 4,015
$ 4,015
738,239
$ 734,224
Beginning fund balance
1,236,078
Ending Fund Balance
$
1,974,317
Notes to Required Supplementary Information
1. Annual budgets are adopted on a basis
consistent with generally accepted accounting principles (GAAP).
* Expenditures exceeded appropriations
at the legal level
of control
City of Sanger, Texas
SCHEDULE OF CHANGES IN NET PENSION LIABILITYAND RELATED RATIOS
For The Year Ended December 31, 2014
2014
Total pension liability
Service cost
$
340,004
Interest (on the Total Pension Liability)
476,571
Changes in benefit terms
-
Differences between expected and actual experience
47,610
Changes of assumptions
-
Benefit payments, including refunds of participant contributions
(204,026)
Net change in total pension liability
660,159
Total pension liability - beginning
6,740,172
Total pension liability - ending (a)
$
7,400,331
Plan fiduciary net position
Contributions - employer
$
211,283
Contributions - members
187,821
Net investment income
350,203
Benefit payments, including refunds of participant contributions
(204,026)
Administrative expenses
(3,656)
Other
(301)
Net change in plan fiduciary net position
541,324
Plan fiduciary net position - beginning
6,120,633
Plan fiduciary net position - ending (b)
$
6,661,957
Fund's net pension liability - ending (a) - (b)
$
738,374
Plan fiduciary net position as a percentage of the total pension liability
90.02%
Covered employee payroll
$
3,130,346
Fund's net position as a percentage of covered employee payroll
23.59%
Notes to schedule:
1) This schedule is presented to illustrate the requirement to show information for ten years.
However, until a full ten-year trend is compiled, only available information is shown.
1
OWN
City of Sanger, Texas
SCHEDULE OF EMPLOYER CONTRIBUTIONS TO PENSION PLAN
For The Year Ended December 31, 2014
12/31/2014
Actuarially determined employer contributions $ 211,283
Contributions in relation to the actuarially determined contribution $ 211,283
Contribution deficiency (excess) $ -
Annual covered employee payroll $ 3,130,346
Employer contributions as a percentage of covered employee payroll 6.75%
1) This schedule is presented to illustrate the requirement to show information for ten years.
However, until a full ten-year trend is compiled, only available information is shown.
NOTES TO SCHEDULE OF EMPLOYER CONTRIBUTIONS TO PENSION PLAN
Valuation Date:
Notes Actuarially determined contribution rates are
calculated as of December 31 and become
effective in January 13 months later.
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method Entry Age Normal
Amortization Method Level Percentage of Payroll, Closed
Remaining Amortization Period 29 years
Asset Valuation Method 10 Year smoothed market; 15% soft corridor
Inflation 3.0%
Salary Increases 3.50% to 12.00% including inflation
Investment Rate of Return 7.00%
Retirement Age Experience -based table of rates that are specific to
the City's plan of benefits. Last updated for the
2010 valuation pursuant to an experience study
of the period 2005 - 2009
Mortality
RP2000 Combined Mortality Table with Blue Collar
Adjustment with male rates multiplied by 109%
and female rates multiplied by 103% and projected
on a fully generational basis with scale BB
Other Information:
Notes There were no benefit changes during the year.
1
71
(This page intentionally left blank.)
ON
OTHER SUPPLEMENTARY INFORMATION
73
City of Sanger, Texas
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
September 30, 2015
Total
Capital
Nonmaj or
Projects
4B Fund
Governmental
Assets
Cash and cash equivalents
$
781,799
$
318,283
$
1,100,082
Restricted cash
-
189,429
189,429
Restricted investments
-
275,583
275,583
Receivables, net
-
58,692
58,692
Total Assets
$
781,799
$
841,987
$
1,623,786
Liabilities
Accounts payable and
accrued liabilities
$
8,094
$
-
$
8,094
Total Liabilities
8,094
-
8,094
Fund Balances
Restricted for:
Capital projects
773,705
-
773,705
Economic development
-
841,987
841,987
Total Fund Balances
773,705
841,987
1,615,692
Total Liabilities and Fund Balances
$
781,799
$
841,987
$
1,623,786
74
City of Sanger, Texas
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended September 30, 2015
Total
Capital
Nonmaj or
Projects
4B Fund
Governmental
Revenues
Sales tax
$ -
$ 393,663
$ 393,663
Fines and forfeitures
-
-
-
Intergovernmental
67,254
-
67,254
Investment income
-
1,307
1,307
Other revenue
10,000
-
10,000
Total Revenues
77,254
394,970
472,224
Expenditures
Current:
General government
-
-
-
Debt service:
Principal
-
-
-
Interest
-
-
-
Capital outlay
192,668
-
192,668
Total Expenditures
192,668
-
192,668
Excess of Revenues Over (Under) Expenditures
(115,414)
394,970
279,556
Other Financing Sources (Uses)
Transfers in
350,000
(25,000)
325,000
Transfers (out)
(10,998)
(212,500)
(223,498)
Total Other Financing Sources (Uses)
339,002
(237,500)
101,502
Net Change in Fund Balances
223,588
157,470
381,058
Beginning fund balances
550,117
684,517
1,234,634
Ending Fund Balances
$ 773,705
$ 841,987
$ 1,615,692
75
City of Sanger, Texas
COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN FUND NET
POSITION
PROPRIETARY FUNDS - BY DEPARTMENT
For the Year Ended September 30, 2015
Water
Sewer
Electric
Fleet Services
Operating Revenues
Charges for services $
1,484,167
$ 1,339,272
$ 8,196,106
$ -
Connection fees
-
-
59,980
-
Tap fees
213,000
276,750
-
-
Other revenue
-
-
-
-
Total Operating Revenues
1,697,167
1,616,022
8,256,086
-
Operating Expenses
Salaries and wages
299,032
149,194
521,898
-
Contracted services
4,352
-
32,468
-
Utilities
152,605
162,007
8,620
-
Materials and supplies
17,265
10,311
51,121
-
Water and electric purchases
61,185
-
5,585,019
-
Repairs and maintenance
218,907
50,960
92,603
-
Depreciation
282,414
236,318
297,514
612
Total Operating Expenses
1,035,760
608,790
6,589,243
612
Operating Income (loss)
661,407
1,007,232
1,666,843
(612)
Nonoyerating�Revenues (Expenses)
Investment income
-
-
-
-
Interest expense
-
-
-
-
Nonoperating Revenues (Expenses)
-
-
-
-
Income Before Transfers
661,407
1,007,232
1,666,843
(612)
Transfers in
-
10,998
-
-
Transfers (out)
-
-
(547,250)
-
Change in Net Position $
661,407
$ 1,018,230
$ 1,119,593
$ (612)
76
Administration Total
$ - $ 11,019,545
59,980
489,750
39,738 39,738
39,738 11,609,013
- 970,124
- 36,820
- 323,232
- 78,697
- 5,646,204
- 362,470
16,640 833,498
16,640 8,251,045
23,098 3,357,968
15,128
15,128
(289,691)
(289,691)
(274,563)
(274,563)
(251,465)
3,083,405
-
10,998
(1,184,176)
(1,731,426)
$ (1,435,641) $ 1,362,977
77
(This page intentionally left blank.)