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2003 Annual Financial ReportCITY OF BANGER FINANCIAL STATEMENTS September 30, 2003 J TABLE OF CONTENTS AUDITOR'S REPORT CITY OFFICIALS COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES - BUDGET AND ACTUAL COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN RETAINED EARNINGS - PROPRIETARY FUND COMBINED STATEMENT OF CASH FLOWS - PROPRIETARY FUND NOTES TO FINANCIAL STATEMENTS COMBINING AND INDIVID UAL FUND AND ACCO UNT GRO UP STATEMENTS COMBINING STATEMENT OF REVENUES &EXPENDITURES - GENERAL FUND COMBINING STATEMENT OF REVENUES & EXPENDITURES - SPECIAL REVENUE FUND COMBINING STATEMENT OF REVENUES & EXPENDITURES - GENERAL FUND - BUDGET AND ACTUAL COMBINING STATEMENT OF REVENUES & EXPENDITURES - SPECIAL REVENUE FUND - BUDGET AND ACTUAL STATEMENT OF GENERAL FIXED ASSETS SCHEDULE OF CHANGES TO GENERAL FIXED ASSETS SCHEDULE OF PROPERTY, PLANT & EQUIPMENT - PROPRIETARY FUND STATEMENT OF GENERAL LONG-TERM DEBT SCHEDULE OF CHANGES IN GENERAL LONG-TERM DEBT SCHEDULE OF GENERAL FUND DEBT SERVICE REQUIREMENTS SCHEDULE OF CHANGES IN LONG-TERM DEBT - PROPRIETARY FUND SCHEDULE OF PROPRIETARY FUND DEBT SERVICE REQUIREMENTS SUPPLEMENTAL INFORMATION SCHEDULE OF RESTRICTED ASSETS SCHEDULE OF RESERVED FUND EQUITIES SCHEDULE OF INSURANCE COVERAGE ENTERPRISE FUND # OF CUSTOMERS AND RATES ANALYSIS OF PROPERTY TAXES SCHEDULE OF GRANT RECEIPTS & EXPENDITURES REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED UPON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAL AUDITING STANDARDS MANAGEMENT LETTER 1 2 3 5 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 William C. Spore, P.C. Certified Public Accountants Independent Auditor's Report To the City Council City of Sanger, Texas We have audited the accompanying general-purpose financial statements of the City of Sanger, Texas, as of and for the year ended September 30, 2003, as listed in the table of contents. These general-purpose financial statements are the responsibility of the City of Sanger's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Sanger, Texas, as of September 30, 2003, and the results of its operations and the cash flows of its proprietary fund types for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated February 13, 2004 on our consideration of the City of Sanger's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of operations. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining and individual fund and account group financial statements and schedules listed in the table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statement of the City of Sanger, Texas. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. William C. Spore, P,C. February 13, 2004 3950 Highway 360, Suite 102 #Grapevine, TX 76051 # 817/421-6619 CITY OF SANGER CITY OFFICIALS September 30, 2003 ELECTED OFFICIALS MAYOR MAYOR PRO TEM COUNCILMEMBERS APPOINTED OFFICIALS CITY MANAGER CITY SECRETARY/ASSISTANT CITY MANAGER MUNICIPAL COURT JUDGE CITY ATTORNEY Tommy Kincaid Andy Garza Glenn Ervin Jimmy Evans Joe Higgs Mike James Jack Smith Rosalie Chavez Danny Spindle &Ken Hartless Nichols, Jackson, Dillard, Hager & Smith SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 2 CITY OF BANGER COMBINED BALANCE SHEET -ALL FUND TYPES AND ACCOUNT GROUPS ASSETS Cash Receivables, Net of Allowances for Uncollectibles: Property Taxes Other Receivables Services Due from Other Funds Inventory/Prepaid Expense Restricted Assets -Cash Property, Plant and Equipment Net of Accumulated Depreciation Construction in Process Amount to be Provided for Retirement of General Long -Term Debt TOTAL ASSETS LIABILITIES Accounts Payable Accrued Expenses Due to Other Funds Customer &Escrow Deposits Deferred Revenues Long -Term Debt: Compensated Absences Revenue Bonds Payable Certificate of Obligation Payable Notes Payable Capital Leases Lawsuit Judgement Payable TOTAL LIABILITIES FUND EQUITY Contributed Capital Investment in General Fixed Assets Retained Earning -Reserved Retained Earning -Unreserved Fund Balance -Reserved Fund Balance -Unreserved TOTAL FUND EQUITY TOTAL LIABILITIES AND FUND EQUITY September 30, 2003 GOVERNMENTAL FUNDS TYPES PROPRIETARY FUND TYPES SPECIAL GENERAL REVENUE UTILITY FUND FUND FUNDS $ 18,753 $ 0 $ 17,085 97,765 0 0 78,096 22,854 8,543 0 0 634,472 7,263 15,020 0 7,278 0 483,426 2,244,613 265,211 2,632,206 0 0 8,712,289 0 0 707,792 0 0 0 $ 2,453,768 303,085 $ 13,195,813 $ 59,520 0 $ 322,983 9,625 0 121,746 0 0 22,283 0 0 179,942 97,765 0 0 0 0 44,951 0 0 4,680,000 0 0 0 0 0 283,669 0 0 66,904 0 0 0 166,910 0 5,722,478 0 0 0 0 2,235,626 51,232 2,286,858 $ 2,453,768 0 0 0 0 303,085 0 303,085 303,085 3,263,757 0 947,613 3,261,965 0 0 7,473,335 $ 13,195,813 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 3 ACCOUNT GROUPS GENERAL FIXED ASSETS $ 0 GENERAL LONG- TERM DEBT TOTALS (memorandum only) 2003 2002 $ 35,838 $ 384,161 0 0 97,765 101,788 0 0 109,493 107,479 0 0 634,472 520,806 0 0 22,283 17,103 0 0 490,704 439,790 0 0 51142,030 51531,250 41190,050 0 12,902,339 11,542,646 0 0 707,792 0 0 4,551,282 4,551,282 $ 41190,050 $ 41551,282 $ 24,693,998 0 0 131,371 22,283 0 0 1791942 0 0 97,765 0 57,000 0 0 0 31350,000 0 787,146 0 77,016 0 280,120 0 41551,282 0 0 4,190,050 0 0 0 0 0 0 0 0 0 41190,050 0 $ 4,190,050 $ 4,551,282 101,951 4,680,000 3,350,000 1,070,815 143,920 280,120 10,440,670 3,263,757 4,190,050 947,613 3,261,965 2,538,711 51,232 14,253,328 $ 24,693,998 4,850,859 $ 23,495,882 355,201 126,871 17,103 1651276 1011788 84,588 4,950,000 3,5251000 1,4041615 1701858 3201120 11,221,420 2,607,457 3,601,905 3471594 3,0611710 2,5731195 82,601 12,274,462 $ 23,495,882 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE-3 CITY OF SANGER COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES For the Year Ended September 30, 2003 REVENUES Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES EXPENDITURES General Government Public Safety Grant Expenditures Highways and Streets Health and Welfare Culture and Recreation Capital Outlay Debt Service: Principal Interest TOTAL EXPENDITURES EXCESS REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Proceeds of Debt Issuance's Bond Issue Costs Transfers In (Out) TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES FUND BALANCE -BEGINNING FUND BALANCE -ENDING GENERAL $ 1,297,741 $ 588,157 21,465 124,259 549,565 3881096 50,993 17,706 5,229 31043,211 SPECIAL REVENUE 0 3281689 0 0 0 0 2,210 0 0 330.899 TOTALS (memorandum only) 2003 2002 $ 11297,741 $ 832,672 9162846 796,465 21,465 124,259 549,565 3881096 53,203 17,706 5,229 3,374,110 15,350 55,333 505,761 112,812 27,062 17,974 5,309 2,368,738 630,402 19,078 649,480 623,136 7591157 0 759,157 720,914 2851688 0 285588 0 1501287 0 150,287 153,109 801305 0 80,305 59,408 4451467 0 445,467 4101364 5881145 0 588,145 369,432 337,574 230,843 3.507.868 (464,657) 130,874 0 147,337 104,077 441,651 25,310 256,153 148,465 182,434 0 0 (61,841) 3,656,333 359,690 124,286 2,820,339 (282,223) (451,601) 130,874 0 85,496 2,522,406 (36,201) (35,226) 278,211 (61,841) 216,370 2,4501979 (186,446) 2,473,304 120,593 (65,853) 1,999,378 1821492 21655,796 6561418 $ 2,286,858 $ 303,085 $ 2,589,943 $ 2,655,796 SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 4 CITY OF SANGER COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2003 REVENUES Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES EXPENDITURES General Government Public Safety Grant Expenditures Highways and Streets Health and Welfare Culture and Recreation Capital Outlay Debt Service: Principal Interest TOTAL EXPENDITURES EXCESS REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Proceeds of Debt Issuance's Transfers In (Out) TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES 11111ki107-1e\W_10[a=03xr7INN li•C�' FUND BALANCE -ENDING BUDGET $ 1,290,000 517,680 10,000 60,400 574$650 3641000 4,000 521920 0 2,873,650 652,820 8541908 258$000 1961699 801200 494,695 424,898 315,976 227,081 3,505,277 (631,627) 131,100 508,311 639,411 $ 7,784 ACTUAL $ 11297,741 588,157 21,465 124,259 5491565 3881096 50,993 17,706 5,229 31043,211 630,402 759,157 285,688 150,287 80,305 4451467 5881145 337,574 230,843 3,507,868 (464,657) 130,874 147.337 278.211 (186,446) 2,473,304 VARIANC� $ 7,741 70,477 11,465 63,859 (25,085) 24,096 46,993 (35,214) 5,229 169,561 22,418 95,751 (27,688) 46,412 (105) 49,228 (163,247) (21,598) (3,762) (2,591) 166,970 (226) (360,974) (361,200) $ (194,230) SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 5 BUDGET $ 0 336,300 0 0 0 0 2,000 0 0 338,300 ACTUAL $ 0 328,689 0 0 0 0 2,210 0 0 330,899 VARIANCE $ 0 (71611) 0 0 0 0 210 0 0 (7,401) BUDGET $ 1,290,000 853,980 10,000 60,400 5741650 364)000 6,000 521920 0 3,211,950 (Memorandum Only) ACTUAL $ 11297,741 916,846 21,465 124,259 549,565 388,096 53,203 17,706 5,229 3,374,110 VARIANCE $ 7,741 62,866 11,465 63,859 (25,085) 24,096 47,203 (35,214) 5,229 162,160 17,400 19,078 (1,678) 670,220 649,480 20,740 0 0 0 854,908 759,157 95,751 0 0 0 258,000 285,688 (27,688) 0 0 0 1961699 1501287 46,412 0 0 0 801200 801305 (105) 0 0 0 494,695 445,467 49,228 0 0 0 424,898 588,145 (163,247) 100,000 30,000 147,400 190,900 0 (160,950) (160,950) 29,950 104,077 25,310 148,465 182,434 0 (61,841) (61,841) 120,593 182,492 $ 303,085 (4,077) 4,690 (11065) (8,466) 99,109 $ 90,643 415,976 257,081 3,6521677 (440,727) 131,100 347,361 478,461 37,734 441,651 256,153 3,656,333 (282,223) 130,874 85,496 216,370 (65,853) 2,655,796 $ 215891943 (25,675) 928 (31656) 158,504 (226) (261,865) (262,091) $ (103,587) SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE-5 CITY OF SANGER COMBINED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS - PROPRIETARY FUND For the Year Ended September 30, 2003 2003 2002 Charges and Connection Fees $ 6,494,951 $ 5,415,230 Personnel Services 1,015,469 940,461 Purchase of Services 3,543,122 21942,255 Materials and Supplies 120,640 182,726 Depreciation 660t671 553,779 Franchise Fees 1401315 121,048 TOTAL OPERATING EXPENSES 5,480,217 4,740,269 OPERATING INCOME 1,014,734 674,961 NONOPERATING REVENUES (EXPENSES) Interest Income Debt Service Interest, Fees & Discounts Transfers Out TOTAL NONOPERATING REVENUES (EXPENSES) NET INCOME RETAINED EARNINGS -BEGINNING RETAINED EARNINGS -ENDING 15,450 (144,414) (85,496) (214,460) 800,274 3,409,304 $ 4,209,578 17,026 (153,345) (314,774) (451,093) 3,185,436 $ 3,409,304 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 6 CITY OF SANGER COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES For the Year Ended September 30, 2003 CASH FLOWS FROM OPERATING ACTIVITIES: Cash Received from Customers $ Cash Payments to Suppliers for Goods and Services Cash Payments for Employees Services NET CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of Capital Assets Additions to Long -Term Debt Principal Paid on Bonds and Notes Interest Paid on Bonds and Notes Bond issue Costs Capital Contributed - Grants Cash Transferred from Other Funds Cash Transferred to Other Funds NET CASH USED FOR CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES: Interest on Investments NET INCREASE (DECREASE) IN CASH CASH -BEGINNING OF YEAR Operating Income 2003 6,401,876 (3,791,949) (11010,932) 11598,995 (1,485,531) 25,461 (560,422) (218,475) 0 0 0 (80,316) (2,319,283) 61,410 2002 $ 5,397,395 (658,878) 31308,169 $ 2,649,291 $ RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Adjustment to Reconcile Operating Income to Net Cash Provided by Operating Activities: Depreciation (Increase) Decrease in Receivables (Increase) Decrease in Inventory/Prepaid Expense Increase (Decrease) in Accounts Payable Increase (Decrease) in Accrued Expenses Increase (Decrease) in Customer Deposits NET CASH PROVIDED BY OPERATING ACTIVITIES $ 1014734 660,671 (107,741) (201571) 29,902 7,334 14,666 $ 1,598,995 NON -CASH ACTIVITIES: During the fiscal year developers conveyed land, water and sewer systems to the City, valued at the developers cost, totaling $656,300 (3,205,733) (938,038) 11253,624 (1,786,315) 21756,346 (387,013) (145,515) (40,788) 656,257 3501000 (391,875) 1,011,097 41,865 2,306,586 1,001,583 308,169 $ 674,961 553,779 (29,420) (9,103) 46,671 5,151 11,585 $ 1,253,624 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 7 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2003 NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - The City of Sanger operates under a Council -Manager form of government, following the laws of a Home Rule Charter City as defined by the State of Texas. The City provides the following services: public safety police, fire and ambulance, parks, streets, sanitation, a public library senior center, community center and general administrative services along with water, sewer and electrical services. The accounting policies of the City conform to generally accepted accounting principles as applicable to governments. The following is a summary of the more significant policies: 1. REPORTING ENTITY: As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the City of Sanger (the primary government) and its component units. The following component units are included in the City's reporting entity because of its operational and financial relationship with the City. The City has two blended component units as follows: (4A) The Sanger Texas Industrial Development Corporation (S.L I.D.C.) 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 S.T.I.D.C. was incorporated in the state of Texas as non-profit industrial development corporation under Section 4A the Development Corporation Act of 1979. The purpose of S.T.I.D.C. is to promote economic development within the City Sanger. Separate financial statements of the component unit can obtained from the City's administrative offices. (4B) The Sanger Texas governed by a board of by the City Council of removed from office by was incorporated in the a of the of be Development Corporation (S.T.D.C.) is seven directors, all of whom are appointed the City of Sanger and any of whom can be the City Council at its, will. The S.T.D.C. state of Texas as a non-profit industrial development corporation under Section 4B of the Development Corporation Act of 1979. The purpose of the S.T.D.C. is to promote economic and community development within the City of Sanger. Separate financial statements of the component unit can be obtained from the City's administrative offices. CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2003 2. FUND ACCOUNTING: The accounts of the City are organized on the basis of funds or account groups, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self -balancing accounts which are comprised of each fund's assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and for individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into two generic fund types and two broad fund categories as follows: GOVERNMENTAL FUND TYPES General Fund The general fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. PROPRIETARY FUND TYPES Enterprise Funds Enterprise funds are used to account for operations (a) that are financed and operated in a manor similar to private business enterprises - where the intent of the governing body is that costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. 3. PROPERTY, PLANT AND EQUIPMENT AND LONG-TERM LIABILITIES: The accounting and reporting treatment applied to property plant and equipment and long-term liabilities associated with a fund are determined by its measurement focus. All governmental fund types are accounted for on a "financial flow" measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balance is considered a measure of "available spendable resources". Governmental fund operating statements present increases (revenue and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. Page - 9 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2003 Plant, property and equipment used in governmental fund type operations are accounted for in the General Fixed Assets Account Group, rather than in governmental funds. No depreciation has been provided on such property, plant and equipment. All property, plant and equipment are valued at historical cost or estimated historical cost if actual cost is not available. Donated property, plant and equipment are valued at their estimated fair value on the date donated. Public domain "infrastructure" general fixed assets consisting of certain improvements other than buildings, such as roads, sidewalks, and bridges are not capitalized. Long-term liabilities expected to be financed from governmental fund types are accounted for in the General Long -Term Debt Account Group, not in the governmental funds. The two account groups are not "funds". They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations. Special reporting treatments are applied to governmental fund prepaid expenses to indicate that they do not represent "available spendable resources", even though they are a component of net current assets. Such amounts are generally offset by fund balance reserve accounts. Because of their spending measurement focus, expenditure recognition for governmental fund types is limited to exclude amounts represented by non -current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. They are instead reported as liabilities in the General Long -Term Debt Account Group. All proprietary funds are accounted for on a cost of services or "capital maintenance" measurement focus. This means that all assets and liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Their report fund equity (net total assets) is segregated into contributed capital and retained earnings components. Depreciation is provided in the proprietary funds in amounts sufficient to relate the cost of the depreciable assets, to operations over their estimated service lives on the straight-line basis. The service lives by type are as follows: Electric System 20 to 50 years Water and sewer system 10 to 50 years Furniture and Equipment 3 to 10 years Page - 10 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2003 4. BASIS OF ACCOUNTING: Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurement made, regardless of the measurement focus applied. All governmental funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Gross receipts and sales taxes are considered "measurable" when in the hands of intermediary collecting governments and are recognized as revenues at that time. The City considers revenues "available" if they are collected within sixty days of year end. All major revenues are susceptible to accrual. Expenditures are generally recognized under the modified basis of accounting when the related fund liability is incurred. Exceptions to this general rule include accumulated unpaid vacation and sick time which are not accrued and principal and interest on general long-term debt which is recognized when due. All proprietary funds are accounted for using the accrual basis of accounting. Their revenues are recognized when they are earned, and their expenses are recognized when they are incurred. 5. BUDGETS AND BUDGETARY ACCOUNTING: The City follows these procedures in establishing the budgetary data reflected in the financial statements: A: Prior to July 1, proposed operating its C Be Public hearings are conducted to obtain taxpayer comments. C: Prior to October 1, the budget is legally enacted through the passage of an ordinance. D: The City Manager is authorized to transfer budgeted amounts between departments within any fund; any revisions that alter the total expenditures of any fund must be approved by the City Council. E: Budgets for the General and Proprietary Funds are adopted on a basis consistent with generally accepted accounting principles (AGAPE) . F: Unused appropriations. for all of the above annually budgeted funds lapse at the end of the fiscal year. CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2003 6. ENCUMBRANCES: Encumbrances represent commitments related to unperformed contracts for goods and services. Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of resources are recorded to reserve that portion of the applicable appropriation, is utilized in the General Fund. Encumbrances outstanding at year end are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year. 7. CASH: At year-end the City's cash accounts totaled $5,177,868 of which $5,177,768 was held in checking, savings or certificate of deposit accounts at a local bank. Of the Bank balances, $105,007 was covered by federal depository insurance and the remaining $5,072,761 was covered by collateral held by the pledging Bank's agent in the name of the City. There were no uncollateral 1zed cash accounts. The securities pledged by the City's depository institution are as follows: SECURITY FMV FHLB Bond 1,000,000 1,053,750 FHLB Bond 350,000 381,172 FNMA Bond 11000,000 11089,063 FHLB Bond 11875,000 11964,648 FNMA Bond 11775,000 11900,359 FNMA Med, Term Note 400J00 433,973 61400,000 61822,965 8. CAPITALIZED INTEREST: The City capitalizes construction period interest when applicable. A total of $123,078 of interest related to the 2002 Bond issue was capitalized during the current fiscal year. This amount was reduced by $41,855 of interest earned by the unpsent 2002 bond proceeds. Net capitalized interest was $81,223. 9: INVENTORIES: Inventories of the Enterprise Fund are valued at the lower of cost (first -in, first -out) or market. Page - 12 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2003 10. ACCUMULATED COMPENSATED ABSENCES: It is the City's policy to permit employees to accumulate a limited amount of earned but unused vacation and sick time, which will be paid to employees upon separation from the City's service. In governmental funds, the cost of vacation and sick leave is recognized when paid. A long-term liability of $57,000 of accrued vacation and sick leave has been recorded in the General Long -Term Debt Account Group, representing the City's commitment to fund such costs from future operations. Proprietary funds accrue vacation leave in the period they are earned. 11. REVENUE RECOGNITION - PROPERTY TAXES: Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on October 1 and are due and payable at that time. All unpaid taxed levied October 1 become delinquent February 1 of the following year. Property tax revenues are recognized when they become available. Delinquent taxes are considered fully collectable and, therefore, no allowance for doubtful taxes is provided. 12. ALLOWANCE FOR UNCOLLECTABLE ACCOUNTS: Allowance for uncollectable accounts receivable in the Proprietary Fund at September 30, 2003 is $36,887. 13: GRANT ACCOUNTING: All grant funds received by the general fund are included as intergovernmental revenues in the statements of revenues and expenditures. All grant funds received by the proprietary fund that are to be used for capital projects are recorded as contributed capital in the balance sheet while grant funds received for operating purposes are included in the proprietary fund statement of revenues and expenses as other operating revenues. 14. COMPARATIVE DATA: Comparative data for the prior year have been presented in the accompanying statements in order to provide an understanding of changes in the City's financial position and operations. However, complete comparative data (i.e., presentation of prior year totals by fund type in each of the statements) have not been presented since their inclusion would make the statements unduly complex and difficult to read. Page - 13 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2003 15. TOTAL COLUMNS ON COMBINED STATEMENTS: Total columns on the Combined Statements are captioned "memorandum only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund elimination's have not been made in the aggregation of this data. NOTE B: RETIREMENT PLANS: The City's firemen are covered by the firemen's pension plan. This contributory plan is operated as part of the State Firemen's Relief and Retirement Funds. The pension expense for the year ended September 30, 2003 was $4,924. Employee Retirement Plan: The City provides pension benefits for all of its full-time employees through a non-traditional, joint contributory, defined benefit plan in the state-wide Texas Municipal Retirement System (TMRS), an agent multiple -employer public retirement system. Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the City -financed monetary credits, with interest. Members can retire at ages sixty and above with ten or more years of service or with twenty five years of service regardless of age. A member is vested after ten years. The contribution rate for the employees is 5% of gross earning and the City provides a monthly contribution of 4.31% of gross earnings. This rate consists of the normal cost contribution and the prior service contribution rate. The normal cost contribution rate finances the currently accruing monetary credits and the prior service contribution rate amortizes the unfunded (overfunded) actuarial liability (asset) over the remainder of the plan's twenty five year amortization period. The City's contributions for the fiscal year totaled $69,056. The schedule of Actuarial Liabilities and Funding Progress for the year ended September 30, 2003 is as follows: Actuarial valuation date 12/31/002 Unfunded (Overfunded) actuarial accrued liability (UAAL) $ 39,077 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2003 Annual covered payroll $1,567,373 UAAL as percentage of covered payroll 2.5% Net pension obligation - beginning $ 0 Annual required contributions $ 69,056 Contributions made $ (690056) Net pension obligation - ending $ 0 The prior two fiscal years were 100% funded, the net pension obligation was zero and the annual contributions were $51,097 and $52,300. The City of Sanger is one of 774 municipalities having the benefit plan administered by TMRS. Each of the 774 Municipalities have an annual, individual actuarial valuation performed. All assumptions for the 12-31-02 valuations are contained in the 2002 TMRS Comprehensive Annual Financial Report, a copy of which may be obtained by writing to P.O. Box 149153, Austin, Texas 78714-9153. NOTE C: LONG-TERM DEBT: The following is a summary of the City's Long -Term Debt. The future debt requirements are detailed in schedules included in these financial statements. General Long Term Debt: Certificates of Obligation, Series 1994 - Original amount of $1,900,000; principal paid annually starting September I Interest paid semi-annually on March 1, and September 1, at rates ranging from 5.60 to 7.50%. The Bonds were issued for street improvements and library building construction and are to be repaid from property tax revenues and are further secured by a pledge of Enterprise Fund Net Revenues. Texas Tax and Revenue Certificates of Obligation, Series 2002 - Original amount of $2,360,000; principal paid annually starting September 1, 2003; Interest paid semi-annually on March 1, and September 1, at rates ranging from 4.20 to 5.70%. The Bonds were issued for the purpose of constructing and improving City streets and are to be repaid from property tax revenues and are additionally secured by a pledge of Enterprise Fund Net Revenues. The Certificates of Obligation require that certain reserve accounts be maintained. Note Payable - Guaranty National Bank - Original amount of $53,540, the note requires forty eight monthly installments of $1,276 with the final installment due June 2004. The note bears interest at 2.80 percent under prime rate and has nine installments remaining at September 30, 2003. The note proceeds were used to purchase a backhoe, which also serves as collateral for the note. Page - 15 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2003 Note Payable - Guaranty National Bank - Original amount of $43,184, the note requires forty eight monthly installments of $1,029 with the final installment due June 2004. The note bears interest at 2.80 percent under prime rate and has nine installments remaining at September 30, 2003. The note proceeds were used to i purchase a dump truck, which also serves as collateral for the note. Note Payable - Guaranty National Bank $19,098, the note requires thirty six with the final installment due May 20 at 2.80 percent under prime rate remaining at September 30, 2003. The purchase a police vehicle, which also note. - Original amount of monthly installments of $570, 04. The note bears interest and has eight installments note proceeds were used to serves as collateral for the Note Payable - Guaranty National Bank - Original amount of $150,000, the note requires one hundred twenty monthly installments of $1,591, with the final installment due January 2012. The note bears interest at 2.80 percent under prime rate and has one hundred installments remaining at September 30, 2003. The note proceeds were used to purchase and remodel a building to be used by the police department, which also serves as collateral for the note. Note Payable - Guaranty NationalOriginal amount of $49,775, the note requires thirty six monthly installments of $1,492, with the final installment due April 2006. The note bears interest at five percent and has thirty one installments remaining at September 30, 2003. The note proceeds were used to purchase parks equipment, which also serves as collateral for the note. Note Payable - Guaranty National Bank - Original amount of $15,113, the note requires thirty six monthly installments of $452, with the final installment due June 2006. The note bears interest at five percent and has thirty three installments remaining at September 30, 2003. The note proceeds were used to a vehicle for the street department, which also serves as collateral for the note. Note Payable - Guaranty National Bank - Original amount of $850,000, the note requires one hundred eighty monthly installments of $7,499, with the final installment due March 2011. The note bears interest at 2.80 percent under prime rate and has ninety installments remaining at September 30, 2003. The note proceeds were used to purchase land for a development project between the Sanger Texas Industrial Development Corporation and Walmart Stores East, Inc. The loan will be repaid from the 4A sales tax proceeds to be collected by the Sanger Texas Industrial Development Corporation. As funds are available additional principal have been made on the note. CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2003 Capital Lease - Midwest Bankers Group - Original balance of $1721179. The lease requires a down payment of $13,150 (paid in February 1995) plus nine annual rental payments of $24,105 beginning in February 1996. The City has a purchase option during the term of the lease to purchase the equipment at a designated early term/purchase option price. The City intends to exercise this option at the end of the lease term. The proceeds of the lease were used to purchase a new pumper fire truck. The truck is security for the lease. Capital Lease - Diversed Lenders - Original balance of $9,948. The lease requires thirty six monthly rental payments of $329 with nine payments remaining at September 30, 2003. The City has a purchase option during the term of the lease to purchase the equipment at a designated purchase option price. The City intends to exercise this option at the end of the lease term. The proceeds of the lease were used to purchase court software which also serves as security for the lease. Capital Lease - Capital City Leasing - Original balance of $65,986, The lease requires a down payment plus four annual rental payments of $14,436 with four annual payments remaining at September 30, 2003, The City has a purchase option during the term of the lease to purchase the equipment at a designated purchase option price. The City intends to exercise this option at the end of the lease term. The proceeds of the lease were used to purchase parks equipment which also serves as security for the lease. Proprietary Fund: Texas Utility System Revenue Bonds, Series 1996 - Original amount of $1,0600,000, principal paid annually on May 15; Interest paid semi-annually on May 15 and November 15, at rates ranging from 4.2% to 4.75%. The bonds were issued to provide funds for improving and extending the City's Sewer System, The Bonds are to be repaid from and are secured by the Enterprise Fund Net Revenues, Texas Utility System Refunding Revenue Bonds, Series 1999 - Original amount of $1,735,000, principal paid annually on May 15; Interest paid semi-annually on May 15 and November 15, at rates ranging from 4.25% to 4.40%. The bonds were issued to provide funds sufficient to advance refund maturities 2000 through 2011 of the City's outstanding Series 1991 Bonds, The 1999 Bonds are to be repaid from and are secured by the Enterprise Fund Net Revenues. Utility System Revenue Bonds, Series 2002 - Original amount of $2,540,000, principal paid annually on May 15; Interest paid semi-annually on May 15 and November 15, at rates ranging from 4.51 to 6.0%. The bonds were issued to provide funds for improving and enlarging the City's wastewater treatment plant and replacing 7C I TM'OF SANGER �POT;IFyIIUFMVG��[�,� .`1�M�MM IU�E14 TJR September 30, 2003 various water and sewer lines. The Bonds are to be repaid from and are secured by the Enterprise Fund Net Revenues. The Bond Obligations require that certain cash reserve accounts be maintained. Note Payable - Guaranty National Bank - Original amount of $400,744, the note is due on demand, if no demand is made then the note requires five annual principal payments of $80,149 beginning in October 2002. The note bears interest at 2.8 percent under prime rate with annual interest payments also due each October until the note is paid in full. The note proceeds were used for water system improvements. Note Payable - Guaranty National Bank - Original amount of $106,666, the note requires thirty six monthly installments of $3,186 with the final installment due May 2004. The note bears interest at 2.80 percent under prime rate and has seven installments remaining at September 30, 2003. The note proceeds were used to purchase a dump truck and a backhoe, which also serves as collateral for the note. Note Payable - Guaranty National Bank - Original amount of $25,461, the note requires thirty six monthly installments of $763 with the final installment due April 2005. The note bears interest at five percent and has thirty one installments remaining at September 30, 2003. The note proceeds were used to purchase a Ford cab and chassis, which also serves as collateral for the note. Capital Lease - ALTEC - Original balance of $116,344. The lease requires thirty six monthly rental payments of $3,502 with thirty three payments remaining at September 30, 2003. The City has a purchase option during the term of the lease to purchase the quipment at a designated purchase option pri ece. The City intends to exercise this option at the end of the lease term. The proceeds of the lease were used to purchase a 2002 Freightline used by the electric department. The vehicle is security for the lease. NOTE D: DEBT SERVICE REQUIREMENTS NEXT FIVE YEARS: Debt service requirements for each of the next five years are as follows: Year 2004 2005 2006 2007 2008 Future Total General Fund: $382,608 354,074 365,497 365,589 375,697 2 370,697 $4 214,162 Principal Interest $210,041 190,428 171,647 152,454 132,567 789,803 $1 646, 940 Proprietary Fund : Principal $ 423,280 404,643 382,650 310,000 330,000 3 180,000 $5 030,573 Interest $ 244,439 224,962 206,373 188,252 173,443 1 062,438 $2,099,907 Page - 18 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2003 NOTE E: PURCHASE COMMITMENT: On June 5, 1995 the City entered into a eight year contract with the Brazoz Electric Power Cooperative, Inc., whereby the City purchases electric power and energy at agreed upon rates, subject to a fuel adjustment charge and power adjustment on demand and energy charges. Power purchased for the current fiscal year totaled $2,927,5070 NOTE F: INTERFUND RECEIVABLE AND PAYABLE: At September 30, 2003 the Proprietary Fund $22,283, The receivable and payable result expenditure for another fund. NOTE G: BUDGET AMENDMENTS: owed the General Fund from one fund paying an In January 2003, May 2003, and February 2004 the City Council approved amending the September 2003 original budget. The amendments were made to more accurately reflect the actual departmental revenues and expenditures. The amendments reduced the original budget surplus from $15,154 to $7,784. NOTE H: LAWSUIT FINAL JUDGMENT: In July 2002 the City was issued the order of final judgment in the lawsuit Richard Yarbrough vs the City of Sanger. The lawsuit related to the termination of Richard Yarbrough a former police officer with the City. The City was ordered to pay Mr. Yarbrough a total of $320,120 in annual installments beginning on October 1, 2002 with the final installment due April 1, 2009. This judgment amount is included in the general long-term debt account group as of September 30, 2003. Page - 19 COMBINING FINANCIAL STATEMENTS, ACCOUNT GROUP FINANCIAL STATEMENTS & SCHEDULES CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - SPECIAL REVENUE FUND REVENUES Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES EXPENDITURES General Government Public Safety Grant Expenditures Highways and Streets Health and Welfare Culture and Recreation Capital Outlay Debt Service: Principal Interest For the Year Ended September 30, 2003 ADMINI- TRATION $ 1,297,741 $ 270,707 21,465 124,259 36,160 258,000 50,993 17,706 5,229 21082,260 POLICE FIRE 0 0 1291371 0 0 0 0 129,371 0 0 1,758 112,680 0 0 U SANITA- TION 0 0 369,732 0 0 0 0 114,438 369,732 301,838 0 0 328,564 0 6442888 114,269 0 2851688 0 0 0 0 0 0 0 801305 0 0 0 0 0 0 0 101981 108,246 19,830 0 50,350 1,376 TOTAL EXPENDITURES 730,538 EXCESS REVENUES OVER (UNDER) EXPENDITURES 11351,722 OTHER FINANCING SOURCES (USES) Proceeds of Debt Issuances 0 Transfers In 85,496 TOTAL OTHER FINANCING SOURCES (USES) 85,496 31,261 27,495 0 81308 3,032 0 792,703 164,626 328,564 (663,332) (50,188) 41,168 0 0 0 0 0 0 0 0 0 EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITU $ 1,437,218 $ (663,332) $ (50,188) $ 41,168 FUND BALANCE -BEGINNING FUND BALANCE -ENDING SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 20 COMMUNITY SWIMMING & SENIOR STREETS I LIBRAR I PARKS POOL CENTERS TOTAL $ 0 $ 0 $ 0 $ 0 $ 0 $ 11297,741 317,450 0 0 0 0 588,157 0 0 0 0 0 21,465 0 0 0 0 0 124,259 0 2,857 0 61439 31248 5491565 0 17,416 0 0 0 388,096 0 0 0 0 0 502993 0 0 0 0 0 17,706 0 0 0 0 0 51229 317,450 20,273 0 61439 31248 31043,211 0 0 0 0 0 630,402 0 0 0 0 0 759,157 0 0 0 0 0 2851688 150,287 0 0 0 0 1501287 0 0 0 0 0 801305 0 91,532 2761274 581847 18,814 4451467 257,235 61589 181,274 0 32990 588,145 183,253 24,300 20,915 0 0 337,574 204,675 12,472 980 0 0 230,843 795,450 134,893 479,443 581847 22,804 31507,868 (478,000) (114,620) (479,443) (52,408) (19,556) (464,657) 15,113 0 115,761 0 0 130,874 0 0 61,841 0 0 147,337 15.113 0 177,602 0 0 278,211 $ (462,887) $ (114,620) $ (301,841) $ (52,408) $ (19,556) (186,446) 2,473,304 $ 21286,858 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 20 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES = SPECIAL REVENUE FUND REVENUES Property Taxes Nonproperty Taxes Penalties and Interest on Deliquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES EXPENDITURES General Government Public Safety Highways and Streets Health and Welfare Culture and Recreation Capital Outlay Debt Service; Principal Interest TOTAL EXPENDITURES EXCESS REVENUES OVER (UNDER) EXPENDITURES For the Year Ended September 30, 2003 HOTEL/ MOTEL $ 0 $ 11,305 OTHER FINANCING SOURCES (USES) Proceeds of Capital Leases/Note Pay. Transfers Out _ TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES FUND BALANCE -BEGINNING FUND BALANCE -ENDING 0 0 0 0 51 0 0 11.356 ECON DEVEL. 4A 0 $ 1581692 0 0 0 0 1,118 0 0 159,810 ECON DEVEL. 4B 0 $ 158,692 0 0 0 0 1,041 0 0 159,733 TOTAL 0 328,389 0 0 0 0 2,210 0 0 330,899 16,678 1,200 1,200 19,078 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 16,678 (5,322) N u C (5,322) 18,615 104,077 0 104,077 25,310 0 25,310 130587 11200 1481465 29,223 158,533 182,434 0 0 0 0 (61,841) (61,841) 0 (61,841) (61,841) 29,223 106,307 96,692 57.570 120,593 182,492 $ 131293 $ 135,530 $ 154,262 $ 303,085 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 21 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2003 REVENUES Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES EXPENDITURES General Government Public Safety Grant Expenditures Highways and Streets Health and Welfare Culture and Recreation Capital Outlay Debt Service: Principal Interest TOTAL EXPENDITURES EXCESS REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Proceeds of Debt Issuances Transfers In TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES BUDGET $ 11290,000 192,680 10,000 60,400 40,200 258,000 4,000 52,920 0 11908,200 318,520 0 2581000 0 80,200 0 14,998 48,364 628 720,710 1,187,490 0 446,811 446,811 $ 1,634,301 ADMINISTRATION ACTUAL $ 1,297,741 $ 270,707 21,465 124,259 36,160 258,000 50,993 17,706 5,229 21082,260 301,838 0 285,688 0 80,305 0 101981 50,350 1,376 730,538 1,351,722 0 85,496 85,496 $ 11437,218 VARIANCE 7,741 78,027 11,465 63,859 (4,040) 0 46,993 (35,214) 5,229 174,060 16,682 0 (27, 388) 0 (105) 0 4,017 (1,986) (748) (91828) 164,232 0 (361,315) (361,315) $ (197,083) SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 22 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2003 REVENUES Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES EXPENDITURES General Government Public Safety Grant Expenditures Highways and Streets Health and Welfare Culture and Recreation Capital Outlay Debt Service: Principal Interest TOTAL EXPENDITURES EXCESS REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Proceeds of Debt Issuances Transfers In TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES POLICE BUDGET ACTUAL I I VARIANCE 0 0 1301350 0 0 0 0 130.350 0 6681620 0 0 0 0 60,800 26,617 7,431 763,468 0 0 1291371 0 0 0 0 129,371 0 0 108,246 31,261 8,308 792,703 (633,118) (663,332) 0 C; $ (633,118) $ (663,332) 0 0 (979) 0 0 0 0 (979) 0 23,732 0 0 0 0 (47,446) (4,644) (877) (29,235) (30,214) 0 0 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 22 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -GENERAL FUND For the Year Ended September 30, 2003 REVENUES Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES EXPENDITURES General Government Public Safety Grant Expenditures Highways and Streets Health and Welfare Culture and Recreation Capital Outlay Debt Service: Principal Interest TOTAL EXPENDITURES EXCESS REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Proceeds of Debt Issuances Transfers In TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES FIRE BUDGET [—ACTUAL VARIANCE $ 0 $ 0 $ 0 0 0 0 0 0 0 0 0 0 301000 11758 (28,242) 90,000 112,680 22,680 0 0 0 0 0 0 0 0 0 ,000 120 0 1861288 0 0 0 0 15,500 27,495 2,622 231,905 (111,905) $ (111,905) 114,438 0 1141269 0 0 0 0 19,830 27,495 3,032 164,626 (50,188) 0 0 $ (50,188) (51562) 0 72,019 0 0 0 0 (4,330) (410) 67,279 61,717 0 0 $ 61,717 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE-22 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2003 Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES EXPENDITURES General Government Public Safety Grant Expenditures Highways and Streets Health and Welfare Culture and Recreation Capital Outlay Debt Service: Principal Interest TOTAL EXPENDITURES EXCESS REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Proceeds of Debt Issuances Transfers In TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES SANITATION BUDGET ACTUAL VARIANCE $ 0 $ 0 0 0 3551600 0 0 0 0 3551600 334,300 0 0 0 0 0 0 0 0 334,300 21,300 369,732 0 0 0 0 369,732 328,564 0 0 0 0 0 0 0 0 328,564 Cal $ 21,300 $ 41,168 0 0 0 0 14,132 0 0 0 0 14,132 5,736 0 0 0 0 0 0 0 0 5,736 ,u SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 22 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND REVENUES Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES For the Year Ended September 30, 2003 STREETS BUDGET ACTUAL VARIANCE $ 0 $ 0 $ 0 3251000 317,450 (71550) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 325,000 EXPENDITURES General Government 0 Public Safety 0 Grant Expenditures 0 Highways and Streets 196,699 Health and Welfare 0 Culture and Recreation 0 Capital Outlay 731600 Debt Service: Principal 183,200 Interest 2031916 TOTAL EXPENDITURES 657,415 EXCESS REVENUES OVER (UNDER) EXPENDITURES (332,415) OTHER FINANCING SOURCES (USES) Proceeds of Debt Issuances 15,100 Transfers In 0 TOTAL OTHER FINANCING SOURCES (USES) 15,100 EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES $ (317,315) 317,450 0 0 1501287 0 0 257,235 183,253 204,675 795,450 (478,000) (71550) 0 0 46,412 0 0 (183,635) (53) (759) (138,035) (145,585) 0 0 0 $ (145,585) SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 22 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES = GENERAL FUND REVENUES Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES For the Year Ended September 30, 2003 0 LIBRARY BUDGET ACTUAL (VARIANCE 0 0 4,000 16,000 0 0 0 0 0 2,857 17,116 0 0 0 20,000 20,273 EXPENDITURES General Government 0 0 Public Safety 0 0 Grant Expenditures 0 0 Highways and Streets 0 0 Health and Welfare 0 0 Culture and Recreation 96,404 91,532 Capital Outlay 61900 61589 Debt Service: Principal 24,300 24,300 Interest 12,484 122472 TOTAL EXPENDITURES 140,088 134,893 EXCESS REVENUES OVER (UNDER) EXPENDITURES (120,088) (114,620) OTHER FINANCING SOURCES (USES) Proceeds of Debt Issuances 0 0 Transfers In 0 0 TOTAL OTHER FINANCING SOURCES (USES) 0 0 EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES $ (120,088) $ (114,620) 0 0 0 0 273 0 0 0 0 4,872 311 12 5,195 5,468 0 0 $ 5,468 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 22 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2003 REVENUES Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES EXPENDITURES General Government Public Safety Grant Expenditures Highways and Streets Health and Welfare Culture and Recreation Capital Outlay Debt Service: Principal Interest TOTAL EXPENDITURES EXCESS REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Proceeds of Debt Issuances Transfers In TOTAL OTHER FINANCING ''' SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES PARKS BUDGET ACTUAL VARIANCE 0 0 0 0 0 0 0 U 0 0 0 0 0 3251467 2421700 6,000 0 574,167 (574,167) 116,000 61,500 177,500 $ (396,667) $ 0 $ 0 0 0 0 0 0 0 0 0 276,274 1811274 20,915 980 479,443 (479,443) 115,761 61,841 177,602 $ (301,841) 0 0 0 0 0 0 49,193 61,426 (14,915) (980) 94,724 94,724 (239) 341 102 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 22 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2003 SWIMMING POOL REVENUES BUDGET ACTUAL--] VARIANCE Property Taxes $ 0 $ 0 $ 0 Nonproperty Taxes 0 0 0 Penalties and Interest on Delinquent Taxes 0 0 0 License and Permits 0 0 0 Fees and Services 11,000 61439 (4,561) Grants and Intergovernmental 0 0 0 Interest Income 0 0 0 Miscellaneous Income 0 0 0 Donations 0 0 0 TOTAL REVENUES 11,000 61439 (4,561) EXPENDITURES General Government 0 0 0 Public Safety 0 0 0 Grant Expenditures 0 0 0 Highways and Streets 0 0 0 Health and Welfare 0 0 0 Culture and Recreation 55,324 581847 (31523) Capital Outlay 8,000 0 81000 Debt Service: Principal 0 0 0 Interest 0 0 0 TOTAL EXPENDITURES 63,324 58,847 41477 EXCESS REVENUES OVER (UNDER) EXPENDITURES (52,324) (52,408) (84) OTHER FINANCING SOURCES (USES) Proceeds of Debt Issuances 0 0 0 Transfers In 0 0 0 TOTAL OTHER FINANCING SOURCES (USES) 0 0 0 EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES $ (52,324) $ (52,408) $ (84) SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 22 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2003 REVENUES Properly Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES EXPENDITURES General Government Public Safety Grant Expenditures Highways and Streets Health and Welfare Culture and Recreation Capital Outlay Debt Service: Principal Interest TOTAL EXPENDITURES EXCESS REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Proceeds of Debt Issuances Transfers In TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES COMMUNITY & SENIOR CENTERS BUDGET I I ACTUAL I I VARIANCE $ 0 $ 0 $ 0 0 0 0 0 0 0 0 0 0 3,500 31248 (252) 0 0 0 0 0 0 0 0 0 0 0 0 00 3,5 0 0 0 0 0 17,500 2,400 0 19,900 (16,400) 0 0 u 31248 0 0 0 0 0 18,814 3,990 0 0 22,804 (19,556) 0 0 0 $ (19,556) 52) (2 0 0 0 0 0 (1,314) (1,590) r. (2,904) 0 0 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 22 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2003 Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES EXPENDITURES General Government Public Safety Grant Expenditures Highways and Streets Health and Welfare Culture and Recreation Capital Outlay Debt Service: Principal Interest TOTAL EXPENDITURES EXCESS REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Proceeds of Debt Issuances Transfers In TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES FUND BALANCE -BEGINNING FUND BALANCE -ENDING TOTAL BUDGET I F ACTUAL I I VARIANCE $ 1,290,000 $ 517,680 10,000 60,400 574,650 3641000 4,000 52,920 0 3,650 2,87 652,820 8541908 2581000 1961699 80,200 4941695 4241898 315,976 227,081 31505,277 (631,627) 131,100 508.311 639,411 1,297,741 $ 7,741 5 38,157 70,477 21,465 1241259 5491565 3881096 50,993 17,706 5,229 3,043,211 630,402 7591157 2851688 1501287 80,305 4451467 5881145 337,574 230,843 3,507,868 (464,657) 130,874 147.337 278,211 (186,446) 2,473,304 11,465 63,859 (25,085) 24,096 46,993 (35,214) 5,229 169,561 22,418 95,751 (271688) 46,412 (105) 49,228 (1631247) (21,598) (3,762) (21591) 166.970 (239) (360,974) (361,213) $ (194,243) SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 22 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - SPECIAL REVENUE FUND For the Year Ended September 30, 2003 REVENUES Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES EXPENDITURES General Government Public Safety Highways and Streets Health and Welfare Culture and Recreation Capital Outlay Debt Service: Principal Interest TOTAL EXPENDITURES EXCESS REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Proceeds of Capital Leases/Note Payable Transfers Out TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES FUND BALANCE -BEGINNING FUND BALANCE -ENDING BUDGET $ 0 11,300 11,300 0 0 0 0 0 0 0 11,300 0 0 0 0 $ 0 HOTEL/MOTEL [—VARIANCE $ 0 $ 0 11,305 5 0 0 0 0 51 0 0 11,356 16,678 0 0 0 0 0 0 16,678 (5,322) 0 0 0 (51322) 18,615 $ 13,293 0 0 0 0 51 0 0 56 (5,378) 0 0 0 0 0 0 (51378) (5,322) 0 0 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 23 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -SPECIAL REVENUE FUND REVENUES Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES For the Year Ended September 30, 2003 ECONOMIC DEVELOPMENT -SECTION 4A BUDGETI I ACTUAL I VARIANCE $ 0 $ 0 $ 0 162,500 158,692 (31808) 0 0 0 0 0 0 0 0 0 0 0 0 1,000 11118 118 0 0 0 0 0 0 163,500 159,810 (3,690) EXPENDITURES General Government 31550 11200 21350 Public Safety 0 0 0 Highways and Streets 0 0 0 Health and Welfare 0 0 0 Culture and Recreation 0 0 0 Capital Outlay 0 0 0 Debt Service: Principal 1001000 104,077 (41077) Interest 301000 25,310 41690 TOTAL EXPENDITURES 133,550 130,587 21963 EXCESS REVENUES OVER (UNDER) EXPENDITURES 291950 29,223 (727) OTHER FINANCING SOURCES (USES) Proceeds of Capital Leases/Note Payable 0 0 0 Transfers Out 0 0 0 TOTAL OTHER FINANCING SOURCES ( USES) 0 0 0 EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES $ 291950 29,223 $ (727) FUND BALANCE -BEGINNING 106,307 FUND BALANCE -ENDING $ 135,530 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 23 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - SPECIAL REVENUE FUND For the Year Ended September 30, 2003 17D/1�1�1�9 Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES EXPENDITURES General Government Public Safety Highways and Streets Health and Welfare Culture and Recreation Capital Outlay Debt Service, Principal Interest TOTAL EXPENDITURES EXCESS REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Proceeds of Capital Leases/Note Payable Transfers Out TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES FUND BALANCE -ENDING ECONOMIC DEVELOPMENT -SECTION 4B BUDGET $ 0 162,500 0 0 0 0 1,000 0 0 163,500 ACTUAL $ 0 1581692 0 0 0 0 1,041 0 0 159,733 VARIANCE $ 0 (31808) (3,808) 2,550 1,200 1,350 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,550 160,950 0 (160,950) (160,950) 0 0 1,200 158,533 0 (61,841) (61,841) 96,692 57,570 $ 154,262 0 0 1,350 (2,458) 99,109 $ 96,651 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 23 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -SPECIAL REVENUE FUND REVENUES Property Taxes Nonproperty Taxes Penalties and Interest on Delinquent Taxes License and Permits Fees and Services Grants and Intergovernmental Interest Income Miscellaneous Income Donations TOTAL REVENUES EXPENDITURES General Government Public Safety Highways and Streets Health and Welfare Culture and Recreation Capital Outlay Debt Service: Principal Interest TOTAL EXPENDITURES EXCESS REVENUES OVER (UNDER) EXPENDITURES For the Year Ended September 30, 2003 TOTAL BUDGET ACTUAL VARIANCE $ 0 $ 336,300 0 0 0 0 2,000 0 0 338,300 17,400 0 0 0 0 0 100,000 30,000 0 $ 0 3281689 (71611) 0 0 0 0 2,210 0 0 330,899 19,078 0 0 0 0 0 104,077 25,310 147,400 1481465 190,900 182,434 OTHER FINANCING SOURCES (USES) Proceeds of Capital Leases/Note Payable 0 0 Transfers Out (160,950) (61,841) TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES FUND BALANCE -BEGINNING FUND BALANCE -ENDING (160,950) (61,841) $ 29,950 120,593 182,492 $ 303,085 (7,401) (1,678) 0 0 0 0 0 (4,077) 4,690 (8,466) 99,109 $ 90,643 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 23 COST Land Buildings & Improvements Equipment Fire Equipment Parks Streets Swimming Pool INVESTMENT IN GENERAL FIXED ASSETS CITY OF SANGER STATEMENT OF GENERAL FIXED ASSETS For the Year Ending September 30, 2003 $ 78,577 11355,295 11457,469 529,757 301,441 235,125 2321386 $ 4,190,050 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 24 CITY OF SANGER SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS COST Land Buildings & Improvements Equipment Fire Equipment Parks Streets Swimming Pool INVESTMENT IN GENERAL FIXED ASSETS For the Year Ending September 30, 2003 BEGINNING ADDITIONS DELETIONS ENDING $ 781577 $ 0 $ 0 $ 78,577 11279,020 76,275 0 11355,295 11381,828 751641 0 11457,469 5091927 191830 0 529,757 120,167 181,274 0 301,441 0 235,125 0 235,125 2321386 0 0 232,386 $ 3,601,905 $ 588,145 $ 0 $ 4,190,050 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 25 CITY OF SANGER SCHEDULE OF CHANGES IN PROPERTY, PLANT & EQUIPMENT ENTERPRISE FUND For the Year Ending September 30, 2003 BEU11mmmil lUtLtTIONS ENDING COST Water System $ 4,374,202 $ 247,400 $ 0 $ 4,621,602 Sewer System 31890,241 498,927 0 4,389,168 Electric System 31501,155 625,168 0 41126,323 Equipment 11199,362 45,676 0 11245,038 Furniture & Office Equipment 225,234 15,050 0 240,284 Building Improvements 3281958 0 0 328,958 Easement 11500 0 0 11500 TOTAL COST $ 13,520,652 $ 1,432,221 $ 0 $ 14,952,873 ACCUMULATED DEPRECIATION Water System $ 1,335,101 $ 153,459 $ 0 $ 1,488,560 Sewer System 11270,392 118,934 0 1,389,326 Electric System 11953,364 241,908 0 21195,272 Equipment 775,853 118,491 0 894,344 Furniture & Fixtures 197,625 17,222 0 214,847 Building Improvements 47,578 10,657 0 58,235 Easement 0 0 0 0 TOTAL ACCUMULATED DEPRECIATION $ 5,579,913 $ 660,671 $ 0 $ 6,240,584 NET PROPERTY, PLANT & EQUIPMENT $ 719401739 $ 81712,289 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 26 CITY OF SANGER STATEMENT OF GENERAL LONG - TERM DEBT September 30, 2003 BOND OBLIGATIONS Series 1994 Certificates of Obligation Series 2002 Certificates of Obligation TOTAL BOND OBLIGATIONS NOTES PAYABLE Guaranty National Bank Guaranty National Bank Guaranty National Bank Guaranty National Bank Guarantee National Bank Guaranty National Bank Guarantee National Bank - 4A Fund TOTAL NOTES PAYABLE CAPITAL LEASES Midwest Bankers Diversified Capital City Lease TOTAL CAPITAL LEASE OBLIGATIONS LAWSUIT JUDGEMENT PAYABLE Yarbrough Payable ACCRUED COMPENSATED ABSENCES Accrued Vacation Pay Accrued Sick Pay TOTAL ACCRUED COMPENSATED ABSENCES TOTAL TO BE PROVIDED FOR RETIREMENT OF GENERAL LONG - TERM DEBT 1,030,000 2,320,000 10,444 8,424 4,272 1301062 43,297 13,921 5761726 22,588 2,878 51,550 40,000 $ 17,000 $ 3,350,000 787,146 77,016 280,120 $ 4,551,282 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 27 CITY OF SANGER SCHEDULE OF CHANGES IN GENERAL LONG - TERM DEBT For the Year Ended September 30, 2003 BEGINNINGJADDITIONS1 IREDUCTION ENDING BOND OBLIGATIONS Series 1994 Certificates of Obligation $ 11165,000 $ 0 $ 1351000 $ 11030,000 Series 2002 Certificates of Obligation 21360,000 0 401000 21320,000 $ 3,5251000 $ 0 $ 175,000 $ 3,350,000 NOTES PAYABLE Guaranty National Bank 61327 0 6,327 0 Guaranty National Bank 71876 0 71876 0 Guaranty National Bank 25,025 0 14,581 10,444 Guaranty National Bank 20,184 0 11,760 81424 Guaranty National Bank 51021 0 51021 0 Guaranty National Bank 51001 0 51001 0 Guaranty National Bank 10,796 0 61524 41272 Guaranty National Bank 142,279 0 12,217 130,062 Guaranty National Bank Guaranty National Bank Guaranty National Bank - 4A Fund TOTAL NOTES PAYABLE CAPITAL LEASES Midwest Bankers Lubbock National Bank Diversified Capital City Lease TOTAL CAPITAL LEASES LAWSUIT JUDGEMENT PAYABLE Yarbrough Payable ACCRUED COMPENSATED ABSENCES Accrued Vacation Pay Accrued Sick Pay TOTAL ACCRUED COMPEN. ABSENCES TOTAL TO BE PROVIDED FOR RETIREMENT OF GENERAL LONG - TERM DEBT 0 49,775 61478 43,297 0 15,113 11192 13,921 680,803 0 1042077 576,726 $ 903,312 $ 64,888 $ 181,054 $ 787,146 $ 43,756 $ 0 $ 21,168 $ 22,588 5,348 0 51348 0 71523 0 41645 21878 0 651986 14,436 51,550 $ 56,627 $ 651986 $ 45,597 $ 77,016 $ 320,120 $ 0 $ 40,000 $ 280,120 $ 32,500 $ 71500 $ 0 $ 40,000 13,300 31700 0 17,000 $ 45,800 $ 11,200 $ 0 $ 57,000 $ 4,850,859 $ 142,074 $ 441,651 $ 4,551,282 •►�17_1►1'11�©►1��C�7i�1►L1�Ca/_1��r_�y�i� � 7_��3 CITY OF SANGER DEBT SERVICE REQUIREMENTS - GENERAL LONG-TERM DEBT Series 1994 Certificates of Obligation Year Ending September 30, 2004 2005 2006 2007 2008 2009 PRINCIPAL $ 1451000 155,000 1651000 175,000 190,000 200,000 $ 1,030,000 Series 2002 Certificates of Obligation Year Ending September 30, 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 PRINCIPAL $ 75,000 80,000 85,000 85,000 90,000 95,000 1001000 105,000 110,000 1201000 125,000 130,000 135,000 145,000 150,000 1601000 170,000 1751000 185,000 $ 21320,000 September 30, 2003 TOTAL INTEREST REQUIREMENTS $ 60,963 $ 2051963 52,625 207,625 431635 208,635 33,900 2081900 23,400 213,400 12,000 212,000 $ 226,523 $ 1,256,523 INTEREST $ 114,305 110,030 105,470 100,625 95,780 90,650 85,235 80,385 75,975 71,245 65,965 60,340 54,490 48,280 41,465 34,340 26,500 18,000 9,250 $ 1,288,330 NOTE PAYABLE -GUARANTY NATIONAL BANK Year Ending September 30, 2004 PRINCIPAL $ 10,444 INTEREST $ 163 NOTE PAYABLE -GUARANTY NATIONAL BANK Year Ending September 30, PRINCIPAL INTEREST 2004 $ 8,424 $ 132 TOTAL REQUIREMENTS $ 1891305 1901030 190,470 185,625 185,780 185,650 185,235 185,385 185,975 191,245 1901965 190,340 189,490 193,280 191,465 194,340 1961500 1931000 194,250 $ 31608,330 TOTAL REQUIREMENTS $ 10,607 TOTAL REQUIREMENTS $ 8,556 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE-29 CITY OF SANGER DEBT SERVICE REQUIREMENTS -GENERAL LONG-TERM DEBT September 30, 2003 NOTE PAYABLE - GUARANTY NATIONAL BANK Year Ending September 30, PRINCIPAL $ 4,272 NOTE PAYABLE -GUARANTY NATIONAL BAN Year Ending September 30, 2004 2005 2006 2007 2008 2009 2010 2011 2012 PRINCIPAL $ 12,881 13,540 14,233 14,961 15,726 16,531 17,376 18,265 6,549 $ 130,062 INTEREST INTEREST $ 6,210 5,551 4,858 4,130 3,365 2,560 1,715 826 71 $ 2%286 NOTE PAYABLE -GUARANTY NATIONAL BAN Year Ending September 40, 2004 2005 2006 PRINCIPAL $ 16,100 16,924 10,273 $ 43,297 INTEREST $ 1,799 975 172 $ 2,946 NOTE PAYABLE -GUARANTY NATIONAL BAN Year Ending September 30, 2004 2005 2006 PRINCIPAL $ 4,842 5,090 3,989 $ 13,921 INTEREST $ 586 338 84 $ 1,008 NOTE PAYABLE -GUARANTY NATIONAL BANK - 4A FUND Year Ending September 30, 2004 2005 2006 2007 2008 2009 2010 2011 PRINCIPAL $ 68,165 70,942 73,832 76,840 79,971 83,228 86,619 37,129 $ 576,726 INTEREST $ 21,828 19,051 16,161 13,153 10,022 6,765 3,374 372 $ 90,726 TOTAL REQUIREMENTS $ 4,334 MENTS REQUIRE $ 19,091 19,091 19,091 19,091 19,091 19,091 19,091 19,091 6,620 $ 159,348 TOTAL REQUIREMENTS $ 17,899 17,899 10,445 $ 46,243 TOTAL 5428 REQUIREMENTS $ , 5,428 4,073 14,929 TOTAL REQUIREMENTS $ 89,993 89,993 89,993 89,993 89,993 89,993 89,993 37,501 $ 667,452 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 29 CITY OF SANGER DEBT SERVICE REQUIREMENTS - GENERAL LONG-TERM DEBT September 30, 2003 Capital Lease - Midwest Bankers Year Ending September 30, 2004 Less Amount Representing Interest LEASE PAYMENT $ 24,105 1,517 $ 22,588 Capital Lease -DIVERSIFIED Year Ending September 30, 2004 Less Amount Representing Interest LEASE PAYMENT $ 2,931 53 $ 2,878 Capital Lease -CAPITAL CITY LEASING Year Ending September 30, 2004 2005 2006 2007 Less Amount Representing Interest LEASE PAYMENT $ 14,436 14,436 14,436 14,436 57,744 6,194 $ 51,550 Lawsuit Judgement Payable -Yarbrough Year Ending ANNUAL September 30, PAYMENT 2004 $ 401800 2005 41,616 2006 42,448 2007 431297 2008 44,163 2009 45,047 2010 22,749 $ 280,120 • ► l�_�.►-a.r�7►r•�tr-�r•»I>�V[�3r1�Ir�il�►�iL�. PAGE - 29 CITY OF SANGER SCHEDULE OF CHANGES IN LONG - TERM DEBT - ENTERPRISE FUND REVENUE BOND OBLIGATIONS Series 1996 Series 1999 Series 2002 TOTAL REVENUE BONDS NOTES PAYABLE Guaranty National Bank Guaranty National Bank Guaranty National Bank Guaranty National Bank Guaranty National Bank Guaranty National Bank TOTAL NOTES PAYABLE CAPITAL LEASES Lubbock National Bank Ford Motor Credit Altec TOTAL CAPITAL LEASES TOTAL LONG -TERM DEBT For the Year Ended September 30, 2003 BEGINNING ADDITIONS REDUCTION ENDING $ 8551000 $ 11555,000 21540,000 $ 41950,000 $ 45,000 $ 810,000 145,000 11410,000 80,000 21460,000 270,000 $ 41680,000 $ 400,744 $ 0 $ 163,050 $ 237,694 27,446 0 27,446 0 31715 0 31715 0 91077 0 91077 0 601321 0 36493 23,828 0 25,461 31314 22,147 $ 501,303 $ 25,461 $ 243,095 $ 283,669 11546 0 11546 0 107,337 0 40,433 66,904 $ 114,231 $ 0 $ 47,327 $ 66,904 $ 5,565,534 $ 25,461 $ 560,422 $ 5,030,573 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 30 CITY OF SANGER DEBT SERVICE REQUIREMENTS = ENTERPRISE FUND Series 1996 Revenue Bonds Year Ending September 30, PRINCIPAL 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 $ 45,000 45,000 50,000 50,000 55,000 60,000 60,000 65,000 70,000 70,000 75,000 80,000 85,000 $ 8101000 Series 1999 Revenue Refunding Bonds September 30, 2003 INTEREST $ 36,395 34,640 32,840 30,790 28,690 26,297 23,628 20,898 17,908 14,652 11,363 7,837 4,037 $ 289,975 TOTAL REQUIREMENTS $ 81,395 79,640 82,840 80,790 83,690 86,297 83,628 85,898 87,908 84,652 86,363 87,837 89,037 $ 11099,975 Year Ending TOTAL September 30, PRINCIPAL INTEREST REQUIREMENTS 2004 $ 150,000 it 60,938 4t 210,938 2005 155,000 54,562 209,562 2006 1651000 47,975 212,975 2007 170,000 401962 2101962 2008 180,000 331653 213,653 2009 190,000 25,913 215,913 2010 195,000 17,600 2121600 2011 205,000 91020 214,020 $ 11410,000 $ 290,623 $ 11700,623 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 31 CITY OF SANGER DEBT SERVICE REQUIREMENTS - ENTERPRISE FUND Series 2002 Revenue Bonds Year Ending September 30, PRINCIPAL 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $ 80,000 85,000 85,000 90,000 95,000 100,000 105,000 110,000 120,000 125,000 130,000 140,000 145,000 1551000 1601000 1701000 180,000 190,000 195,000 $ 21460,000 September 30, 2003 $ 131,500 126,700 121,600 116,500 111,100 105,400 99,400 93,100 88,150 82,510 76,510 70,140 63,140 55,745 47,840 39,520 30,510 20,790 10,530 $ 1,490,685 NOTE PAYABLE -GUARANTY NATIONAL BANK Year Ending September 30, 2004 2005 2006 PRINCIPAL $ 80,149 80,149 77,396 $ 2371694 INTEREST $ 11,885 7,877 3,870 $ 23,632 NOTE PAYABLE -GUARANTY NATIONAL BANK Year Ending September 30, 2004 PRINCIPAL $ 23,828 INTEREST $ 343 TOTAL REQUIREMENTS $ 211,500 211,700 206,600 2061500 206,100 205,400 204,400 203,100 208,150 207,510 206,510 210,140 208,140 210,745 207,840 2091520 2101510 210,790 205,530 $ 31950,685 TOTAL REQUIREMENTS $ 92,034 88,026 81,266 $ 261,326 TOTAL REQUIREMENTS $ 24,171 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 31 CITY OF SANGER DEBT SERVICE REQUIREMENTS - ENTERPRISE FUND September 30, 2003 NOTE PAYABLE -GUARANTY NATIONAL BANK Year Ending September 30, 2004 2005 2006 Capital Lease - ALTEC PRINCIPAL $ 8,236 8,657 5,254 $ 22,147 Year Ending LEASE September 30, PAYMENT 2004 $ 38,525 2005 31,521 70,046 Less Amount Representing Interest 31142 $ 66,904 INTEREST $ 920 499 88 $ 1,507 TOTAL REQUIREMENTS $ 9,156 9,156 5,342 $ 23,654 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 31 CITY OF SANGER GOVERNMENTAL AND PROPRIETARY FUNDS SCHEDULE OF RESTRICTED CASH September 30, 2003 GENERAL FUND Equipment Replacement Funds $ 17,930 Beautification Board Funds 8,272 Park Department Fund 8,279 Unspent 2002 Bond Funds 2,155,869 Certificate of Obligation Reserve and I & S Funds TOTAL GENERAL FUND SPECIAL REVENUE FUND Hotel/Motel Economic Development -Section 4A 54,263 $ 21244,613 117,781 Economic Development -Section 4B 136,511 TOTAL SPECIAL REVENUE FUND $ 265,211 ENTERPRISE FUND Revenue Bond I & S Funds $ 112,462 Revenue Bond Reserve Funds 285,361 Revenue Bond Emergency Fund 16,212 Customer Utility Deposits 147,623 Unspent2002 Revenue Bond Funds 11493,314 Water &Sewer Improvement Funds 5751349 One Plus Program 140 Safety and Incentive Funds 11745 TOTAL ENTERPRISE FUND $ 2,6322206 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 32 CITY OF SANGER GOVERNMENTAL AND PROPRIETARY FUNDS SCHEDULE OF RESERVED FUND EQUITIES September 30, 2003 GENERAL FUND Prepaid Expenses $ 7,276 Equipment Replacement Funds 17,930 Beautification Board Funds 8,272 Park Department Fund 8,279 Unspent 2002 Bond Proceeds 2,155,869 Minimum Required Reserves, Interest and Sinking Funds -1994 Certificate of Obligation 381000 TOTAL GENERAL FUND $ 2,235,626 SPECIAL REVENUE FUND Hotel/Motel Fund $ 13,293 Economic Development -Section 4A 135,530 Economic Development -Section 4b 154,262 TOTAL SPECIAL REVENUE FUND $ 303,085 ENTERPRISE FUND Minimum Required Reserves, Interest and Sinking Funds -Revenue Bonds $ 370,379 Water &Sewer Improvements 5751349 One Plus Program 140 Safety & Incentive 11745 TOTAL ENTERPRISE FUND $ 947,613 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 33 CITY OF SANGER SCHEDULE OF INSURANCE COVERAGE September 30„ 2003 AMOUNT OF TYPE OF COVERAGE FROMF TO COVERAGE F CARRIER ` Business Auto: Liability 10/1/02 10/1/03 31000,000 Texas Municipal League Physical Damage 10/1/02 10/1/03 Actual Cash Value Texas Municipal League Property Damage 10/1/02 10/1/03 Scheduled Equip. Texas Municipal League 7,300,511 Workmen's Compensation 10/1/02 10/1/03 Statutory Texas Municipal League Liability - "�I Law Enforcement Liability 10/1/02 10/1/03 11000,000 Texas Municipal League Errors & Omissions 10/1/02 10/1/03 11000,000 Texas Municipal League General Liability 10/1/02 10/1/03 31000,000 Texas Municipal League If Mobile Equipment 10/1/02 10/1/03 467,970 Texas Municipal League Boiler & Machinery 10/1/02 10/1/03 500,000 Texas Municipal League Employee Bond 6/24/03 6/24/04 101000 Western Surety SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 34 CITY OF SANGER PROPRIETARY FUND SUPPLEMENTAL INFORMATION September 30, 2003 WATER CLASSIFICATION OF CUSTOMERS ELECTRIC Residential 1,884 1,426 Commercial, Demand & City 244 348 NUMBER OF CONNECTIONS 21128 1,774 WATER RATES RESIDENTIAL COMMERCIAL Deposit $ 50.00 $ 100.00 First 1,000 Gallons (minimum) $ 14.25 $ 17.00 11000 TO 5,000 Gallons $ 2.35 $ 2.75 51000 TO 15,000 Gallons $ 2.60 $ 3.00 151000 TO 30,000 Gallons $ 3.05 $ 3.25 Over 30,000 Gallons $ 3.90 $ 4.00 SEWER RATES RESIDENTIAL COMMERCIAL 1,848 220 First 1,000 Gallons (minimum) $ 15.00 $ 21.00 to 75.00 Based on meter size Over 1,000 Gallons $ 1.00 $ 1.00 Maximum $ 30.00 $ NO MAX ELECTRIC RATES Deposit Facility Charge Energy Charge Demand Charge: First 6 KWH (minimum) Over 6KWH GALLONS OF WATER METERED (APPROX.) RESIDENTIAL 00 $ 1.00 $ $ .00/month $ $ 0.0761634/KWH $ 9 SMALL COMMERCIAL 15.00/month .081696/kwh 328,118,000 LARG E COMMERCIAL $ 200.00 $ 35.00/month $ 0.037705/kwh $ 9.00/kwh $ 9.00/kwh SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 35 CITY OF SANGER ANALYSIS OF TAXES RECEIVABLE For the Year Ended September 30, 2003 2003 2002 2001 2000 ADJUSTED TAX ROLL $ 11296,134 $ 860,357 $ 681,486 $ 584,208 Less: Collections and Adjustments 11257,647 809,649 655,189 560,137 i CURRENT YEAR TAXES RECEIVABLE - END OF YEAR 38,487 50,708 26,297 24,071 PRIOR YEAR TAXES RECEIVABLE - END OF YEAR 59,278 51,079 481679 46,137 TOTAL TAXES RECEIVABLE - END OF YEAR $ 97,765 $ 101,787 $ 74,976 $ 70,208 Assessed Value Tax Rate per $100 Percent of Current Taxes Collected to Billed $ 224,729,064 $ 130,306,503 $ 111,724,586 $ 100,765,297 m n rnr A7n m n rnno An d n cnnoAn d n cnnonn 97.03% 94.11 96.14% 95.88% SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 36 ..................... . RECEIPTS: Federal Local TOTAL RECEIPTS 1�7��i•1�]��Ilcix+�i FEDERAL Rehabilitation/Reconstruction Project Soft Costs Administrative LOCAL Rehabilitation/Reconstruction Project Soft Costs Administrative TOTAL EXPENDITURES CITY OF SANGER OWNER OCCUPIED ASSISTANCE - HOME PROGRAM - CONTRACT #531050 TEXAS DEPARTMENT OF HOUSING & COMMUNITY AFFAIRS SCHEDULE OF GRANT RECEIPTS & EXPENDITURES For the Year Ending September 30, 2003 CONTRACT PERIOD November 30, 2001 through March 31, 2003 FEDERAL $ 258,000 $ EXCESS REVENUES OVER EXPENDITURES $ 258,000 PRIOR LOCAL YEARS TOTAL — $ 2,000 $ 260,000 273688 0 277688 27,688 21000 2877688 BUDGET $ 260,000 27,625 2871625 0 63 63 224,000 - 0 224,000 224,000 0 261000 - 0 26,000 267000 0 81000 - 2,000 10,000 107000 0 - 27,688 0 0 0 0 0 258,000 27,688 2,000 0 $ 0 Q 27,688 0 0 287,688 u SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 27,625 0 0 287,625 (63) 0 PAGE 37 7 WILLIAM C. SPORE, P.C. Certified Public Accountants 3950 Hwy 360, Ste 102, Grapevine, Texas 76059 817421-6619 REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED UPON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAL AUDITING STANDARDS To the City Council City of Sanger, Texas We have audited the financial statements of City of Sanger as of and for the year ended September 30, 2003, and have issued our report thereon dated February 13, 2004. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Com liance As part of obtaining reasonable assurance about whether City of Sanger's financial statements are free of material misstatement, we performed tests of its compliance with certain provision of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion, The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards, Internal Control Over Financial Reporting In planning and performing our audit, we considered City of Sanger's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. This report is intended for the information and use of management, Honorable Mayor and City Council of the City of Sanger, Texas, and is not intended to be and should not be used by anyone other than these specified parties. William C. Spore, P.C. February 13, 2003 WILLIAM C. SPORE, P.C. Certified Public Accountants 3950 Hwy 360, Ste 102, Grapevine, Texas 76059 817421-6619 To the City Council City of Sanger, Texas In planning and performing our audit of the general purpose financial statements %J the City of Sanger, Texas, for the year ended September 30, 2003, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control, In accordance with Government Auditing Standards, we have issued our report dated February 16, 2004 on our consideration of the City of Sanger's internal control over financial reporting. However, during our audit we became aware of matters that are opportunities for strengthening internal controls and operating efficiency. These matters are as follows: (1) City policies require that department heads approve all accounts payable invoices related to their department. This policy is not being consistently followed and several invoices were discovered that either were not approved or approved by someone other than the respective department head, The invoice approval policies of the City should be followed and should also include the approval of invoices related to capital improvements projects. Checks should not be generated until the respective department head has reviewed and approved the related invoices. We will review the status of these comments during our next audit engagement. We have already discussed these comments and suggestion with the City Manager and City Secretary, and we will be pleased to discuss them in further detail at your convenience, to perform any additional study of these matters, or to assist you in implementing the recommendations. Sincerely, William C. Spore, P.C. February 13, 2004