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2002 Annual Financial ReportCITY OF BANGER FINANCIAL STATEMENTS September 30, 2002 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 INDIVIDUAL FUND AND ACCOUNT GROUP STATEAIENTS 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 SUP] LEA�IENTAL INFORA�IATION 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 GOVERNAIIENTAL A UDITING STANDARDS MANAGEMENT LETTER 1 2 3 G 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 William C. Spore, P.C. Certified Public Accountants Independent Auditor's Re" 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, 2002, 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 opmion. 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, 2002, 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 Az�ditirrg Standards, we have also issued our report dated February 11, 2003 on our consideration of the City of Sange, 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 Anditing 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, F$C. February 11, 2003 3950 Highway 360, Suite 102 #Grapevine, TX 76051 # 817/421-6619 CITY OF SANGER CITY OFFICIALS September 30, 2002 ELECTED OFFICIALS MAYOR MAYOR PRO TEM COIJNCILMEMBERS APPOINTED OFFICIALS CITY MANAGER CITY SECRETARY/ASSISTANT CITY MANAGER CITY ATTORNEY Tommy Kincaid Andy Garza Glenn Ervin Jimmy Evans Joe Higgs Mike James Jack Smith Rosalie Chavez Danny Spindle Nichols, Jackson, Dillard, Hager & Smith SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE-2 CITY OF SANGER 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, 2002 GOVERNMENTAL FUNDS TYPE GENERAL FUND $ 26,766 101,788 64,423 0 14,728 1,146 2,428,853 0 0 0 $ 21637,704 $ 60,300 2,312 0 0 101,788 0 0 0 0 0 0 164,400 0 0 0 0 2,390,703 82,601 2,473,304 $ 2,637,704 SPECIAL REVENUE FUND n 0 28,494 0 2,375 0 151,623 u 7 0 182,492 0 0 0 0 0 0 0 0 0 0 U 0 0 0 0 0 182,492 0 182,492 182,492 PROPRIETARY FUND TYPES UTILITY FUNDS $ 357,395 0 14,562 5201806 0 438,644 2,9501774 7,940,741 0 0 $ 12,222,922 $ 294,901 124,559 17,103 1651276 0 38,788 4,950,000 0 501,303 114,231 0 61206,161 2,607,457 0 3471594 3,061,710 0 0 6,016,761 $ 12,222,922 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 3 ACCOUNT GROUPS TOTALS GENERAL GENERAL LONG- (memorandum only) FIXED ASSETS TERM DEBT 2002 2001 $ 0 $ 0 $ 384,161 $ 507,213 0 0 101,788 74,975 0 0 107,479 431,848 0 0 5201806 510,423 0 0 17,103 941204 0 0 4391790 3791576 0 0 55311250 11082,438 3,601,905 0 0 $ 31601 t905 0 0 0 0 0 0 0 0 37601,905 0 0 0 0 31601,905 $ 3,601,905 4,850,859 $ 41850,859 0 0 0 0 45,800 0 3,525,000 903,312 56,627 320,120 418501859 0 0 0 0 0 0 0 $ 4,850,859 11,542,646 0 4,850,859 8,766,270 1,3141197 2,369,923 $ 23,495,882 $ 151531,067 $ 355,201 126,871 17,103 165,276 101,788 84,588 4,950,000 3,5251000 1,404,615 1701858 320,120 11,221,420 2,607,457 3,601,905 347,594 3,061,710 2,573,195 82,601 12,274,462 810,827 83,249 941204 1531691 741975 86,078 2,590,000 12290,000 11528,354 1101070 0 61821,448 1,635,292 3,232,473 3061841 2,8781595 5 38,660 87,758 8,709,619 $ 23,495,882 $ 15,531,067 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, 2002 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 Debt Issuances Bond Issue Costs Sale of Assets Transfers In (Out) TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES FUND BALANCE -BEGINNING WHO 0 GENERAL 832,672 $ 4941423 15,350 55,333 5051761 1121812 22,784 17,974 5,309 SPECIAL REVENUE 0 3021042 0 0 0 0 4,278 0 0 2,0621418 306,320 TOTALS (memorandum only) 2002 2001 % $ 832,672 7961465 15,350 55,333 505,761 112,812 27,062 17,974 5,309 2,368,738 $ 676,511 8091031 13,829 45,823 473,901 129,180 22,764 13,906 19,557 2,204,502 5891912 331224 623,136 5897445 7201914 0 720,914 6493899 1531109 0 153,109 1321966 591408 0 59,408 57,225 4101364 0 410,364 347,623 3691432 0 3691432 207,490 238,806 94,971 2,636,916 (574,498) 2,522,406 (36,201) 0 405,155 2,891,360 2,316,862 156,442 120,884 359,690 29,315 124,286 183,423 122,897 0 0 0 (440,381) (440,381) (317,484) 499,976 2,820,339 (451,601) 2,522,406 (36,201) 0 (35,226) 2,450,979 1,999,378 656,418 $ 2,4731304 $ 182,492 $ 2,655,796 $ 300,947 149,002 2,434,597 (230,095) 19,508 437,212 475,818 245,723 410,695 656,418 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, 2002 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 Debt Issuances Bond Issue Costs Sale of Assets Transfers In (Out) TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES FUND BALANCE -BEGINNING FUND BALANCE -ENDING $ 857,000 $ 4879380 4,000 57,600 5081300 93,500 3,400 51,000 2.062.180 584,380 7711480 1691179 56,000 410,844 3711315 223,516 90,365 21677,079 (614,899) 109,550 0 0 492,971 602,521 ACTUAL 832,672 494,423 15,350 55,333 505,761 112,812 22,784 17,974 5,309 21062,418 589,912 7201914 1531109 59,408 4101364 369,432 238,806 94,971 21636,916 (574,498) 2,522,406 (36,201) 0 405,155 2,891,360 2,316,862 156,442 $ 21473,304 VARIANCE $ (24,328) 7,043 11,350 (21267) (21539) 19,312 19,384 (33,026) 5,309 238 (5,532) 50,5 36 16,070 (3,408) 480 1,883 (15,290) (4,606) 40,163 40,401 2,412,856 (36,201) 0 (87,816) 2,288,839 $ 2,329,240 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 5 BUDGET $ 0 $ 0 3031000 3021042 0 0 0 0 2,000 0 0 305.000 0 0 0 0 4,278 0 0 3061320 VARIANCE $ 0 (958) 0 0 0 0 2,278 0 0 1,320 BUDGET $ 857,000 7901380 4,000 57,600 5081300 93,500 5,400 51,000 0 2,367,180 VARIANCE $ 8321672 $ (24,328) 796,465 61085 15,350 55,333 505,761 112,812 27,062 17,974 5,309 2,368,738 11,350 (2,267) (2,539) 19,312 21,662 (33,026) 5,309 1,558 6,100 33,224 (27,124) 590,480 623,136 (32,656) 0 0 0 771,480 7201914 50,566 0 0 0 169,179 153,109 161070 0 0 0 561000 59,408 (31408) 0 0 0 410,844 410,364 480 0 0 0 371,315 369,432 11883 100,000 30,000 136,100 168,900 120,884 29,315 183,423 122,897 (20,884) 685 (47,323) 46,003 323,516 120,365 2,813,179 (445,999) 0 0 0 109,550 0 0 0 0 0 0 0 0 (440,450) (440,381) 69 52,521 (440t450) (440,381) 69 162,071 (271,550) (317,484) 499,976 $ 182,492 (283,928) 359,690 124,286 2,8201339 (451,601) 2,522,406 (36,201) 0 (35,226) 2,450,979 1,999,378 656,418 $ 21655,796 (36,174) (3,921) (71160) (5,602) 2,412,856 (36,201) 0 (87,747) 2,288,908 $ 2,283,306 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 5 CITY OF SANGER COMBINED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS - PROPRIETARY FUND OPERATING REVENUES Charges and Fees OPERATING EXPENSES For the Year Ended September 30, 2002 2002 2001 $ 5,415,230 $ 4,983,147 Personnel Services 940,461 828,030 Purchase of Services 21942,255 21738,352 Materials and Supplies 182,726 111,092 Depreciation 553,779 465,139 Franchise Fees 121,048 106,122 TOTAL OPERATING EXPENSES 41740,269 4,2481735 OPERATING INCOME 674,961 7341412 NONOPERATING REVENUES (EXPENSES) Interest Income Debt Service Interest, Fees & Discounts Transfers Out TOTAL NONOPERATING REVENUES (EXPENSES) NET INCOME RETAINED EARNINGS -BEGINNING RETAINED EARNINGS -ENDING 17,026 (153,345) (314,774) (451,093) 33,328 (174,007) (437,212) (577,891) 3,185,436 3,028,915 $ 3,409,304 $ 3,185,436 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, 2002 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 CASH -END OF YEAR Operating Income 2002 5,397,395 (3,205,733) (938,038) 1.251624 (1,786,315) 2,756,346 (387,013) (145,515) (40,788) 656,257 3501000 (391,875) 1,011,097 41.865 2,306,586 1,001,583 $ 3,308,169 2001 $ 5,041,169 (3,185,000) (824,814) 11031,355 (1,120,987) 2901696 (3451001) (151,087) 816,139 0 (354,705) (864,945) 34,640 201,050 800,533 $ 1,001,583 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 NON -CASH ACTIVITIES: During the fiscal year developers conveyed land, water and sewer systems to the City totaling $252,172 674961 $ , 553,779 (29,420) (91103) 46,671 5,151 11,585 $ 1,2531624 734,412 465,139 8,135 43,382 (2781235) 8,635 49,887 $ 1,0311355 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 7 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2002 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.T.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 S.T.I.D.C. is to promote economic development within the Sanger. Separate financial statements of the component unit obtained from the City's administrative offices. of City can a of the of be (4B) The Sanger Texas Development Corporation (5.T.D.C.) is governed by a board of seven 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.D.C. was incorporated in the state of Texas as a non-profit industrial l 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, 2002 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. CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2002 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 sufficient to relate the cost of the depreciable Electric System 20 to 50 years Water and sewer system l0 to 50 years Furniture and Equipment 3 to 10 years in amounts CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2002 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. 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, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means of financing them. B: 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 (GAAP). F: Unused appropriations for all of the above annually budgeted funds lapse at the end of the fiscal year. Page - 11 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2002 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 $5,915,311 w accounts at covered by $5,797,335 w agent in the accounts. the City's cash accounts totaled $5,915,411 of which �s held in checking, savings or certificate of deposit a local bank. Of the Bank balances, $117,976 was federal depository insurance and the remaining �s covered by collateral held by the pledging Bank's name of the City. There were no uncollateral ized cash The securities pledged by the City's depository institution are as follows: km SECURITY FHLB Bond FHLB Term Note 8. CAPITALIZED INTEREST: 2,300,000 1,875,000 1,775,000 6,350,000 FMV 2,417,875 1,979,883 1,928,094 6,774,447 The City capitalizes construction period interest when applicable. A total of $44,676 of interest related to the 2002 Bond issue was capitalized during the current fiscal year. This amount was reduced by $20,364 of interest earned by the unpsent 2002 bond proceeds. Net capitalized interest was $24,312. 9: INVENTORIES: Inventories of the Enterprise Fund are valued at the lower of cost (first -in, first -out) or market. 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 $45,800 of accrued Page - 12 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2002 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, 2002 is $43,015. 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. During the fiscal year the City received capital grants in the proprietary fund totaling $369,993. 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 sI nce their inclusion would make the statements unduly complex and difficult to read. Page - 13 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2002 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: Firemen's Pension Fund: The City's firemen are covered contributory plan is operated and Retirement Funds. The September 30, 2002 was $4,752. Employee Retirement Plan: by the firemen's pension plan. This as part of the State Firemen's Relief pension expense for the year ended 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 3.71% 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 $51,097. The schedule of Actuarial Liabilities and Funding Progress year ended September 30, 2002 is as follows: Actuarial valuation date Actuarial valuation of assets Actuarial Accrued Liability Percentage funded Unfunded (Overfunded) actuarial accrued liability (UAAL) 12/31/001 $1,248,221 $1,235,216 101.1% $ (13,005) for the Page - 14 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2002 Annual covered payroll UAAL as percentage of covered payroll Net pension obligation - beginning Annual required contributions Contributions made Net pension obligation - ending $1,504,891 -0.9% $ 0 $ 51,097 $ (51,097) $ 0 The City of Sanger is one of 758 municipalities having the benefit plan administered by TMRS. Each of the 758 Municipalities have an annual, individual actuarial valuation performed. All assumptions for the 12-31-01 valuations are contained in the 2001 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 $1,900,0000 principal paid annually starting September 1, 1995; 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 k $38,969, the note requires forty eight monthly installments of $914 with the final installment due April 2003. The note bears interest at 6% and has seven installments remaining at September 30, 2000. The note proceeds were used to purchase various pieces of equipment, which also serve as collateral for the note. Page - 15 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2002 Note Payable - Guaranty National Bank - Original amount of $38,023, the note requires thirty six monthly installments of $1,159 with the final installment due April 2003. The note bears interest at 6% and has seven installments remaining at September 301 2000. The note proceeds were used to purchase a police vehicle, which also serves as collateral for the note. 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 July 2004. The note bears interest at two percent under prime rate and has twenty one installments remaining at September 30, 2002. The note proceeds were used to purchase a backhoe, which also serves as collateral for the note. 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 July 2004. The note bears interest at two percent under prime rate and has twenty one installments remaining at September 30, 2002. The note proceeds were used to purchase a dump truck, which also serves as collateral for the note. Note Payable - Guaranty National Bank - Original amount of $18,028, the note requires thirty six monthly installments of $555, with the final installment due July 2003. The note bears interest at two percent under prime rate and has ten installments remaining at September 30, 2002. The note proceeds were used to purchase a Chevy truck, which also serves as collateral for the note. Note Payable - Guaranty National Bank - Original amount of $14,998, the note requires thirty six monthly installments of $461, with the final installment due September 2003. The note bears interest at two percent under prime rate and has twelve installments remaining at September 30, 2002. The note proceeds were used to purchase a Dodge pickup, which also serves as collateral for the note. Note Payable - Guaranty National Bank - Original amount of $19,098, the note requires thirty six monthly installments of $570, with the final installment due May 2004. The note bears interest at 2.80 percent under prime rate and has twenty installments remaining at September 30, 2002. The note proceeds were used to purchase a police vehicle, which also serves as collateral for the note. 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 twelve installments remaining at September 30, 2002. The note proceeds were used to purchase and remodel a building to be used by Page - 16 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS the police department, note. September 30, 2002 which also serves as collateral for the 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 July 2015. The note bears interest at two percent under prime rate and has one hundred nine installments remaining at September 30, 2002. 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. Capital Lease - Midwest Bankers Group - Original balance of $172,179. 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 - Lubbock NationalOriginal balance of $39,211. The lease has four payment of $734 and five payments of $614 remaining at September 30, 2002. 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 computer hardware and software. The equipment is security for the lease. Capital Lease - Diversified Lenders - Original balance of $9,948. The lease requires thirty six monthly rental payments of $329 with twenty six payments remaining at September 30, 2002. 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. 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. Page - 17 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2002 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 Bond proceeds were used to purchase U.S. government securities. These securities were deposited into an irrevocable trust to provide for debt service of maturities 2000 through 2011. As a result, that portion of the 1991 series bonds is considered defeased, and the City has removed the liability from its accounts. The outstanding principle of the defeased bonds is $1,455,000 at September 30, 2002. 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 4.5% to 6.0%. The bonds were issued to provide funds for improving and enlarging the City's wastewater treatment plant and replacing 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 $169,076, the note requires forty eight monthly installments of $3,967 with the final installment due April 2003. The note bears interest at 6% and has seven installments remaining at September 30, 2002. The note proceeds were used to purchase various pieces of equipment, which also serve as collateral for the note. Note Payable - Guaranty National Bank - Original amount of $17,934, the note requires thirty six monthly installments of $547 with the final installment due April 2003. The note bears interest at 6% and has seven installments remaining at September 30, 2002. The note proceeds were used to purchase a city vehicle, which also serves as collateral for the note. Note Payable - Guaranty National Bank - Original amount of $29,652, the note requires thirty six monthly installments of $912, with the final installment due August 2003. The note bears interest at two percent under prime rate and has eleven Page - 18 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2002 installments remaining at September 30, 2002. The note proceeds were used to purchase a Ford pickup, which also serves as collateral for the note. 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 twenty installments remaining at September 30, 2002. The note proceeds were used to purchase a dump truck and a backhoe, which also serves as collateral for the note. Capital Lease - Ford Motor Credit Company - Original balance of $40,432. The lease requires sixty monthly rental payments of $779, with two payments remaining at September 30, 2002. 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 a New Holland Backhoe. The equipment is security for the lease. Capital Lease - Lubbock NationalOriginal balance of $39,211. The lease has four payment of $734 and five payments of $614 remaining at September 30, 2002. 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 computer hardware and software. The equipment is security for the lease. 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, 2002. 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 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: General Fund: Proprietary Fund. Year Principal Interest Principal Interest 2003 $338,026 $253,589 $ 471,006 $ 262,282 2004 348,789 207,110 418,245 247,965 2005 318,434 188,963 395,986 228,606 2006 336,301 171,888 3801149 210,430 2007 349,967 153,642 390,148 192,259 Future 2,793,422 9290832 3,510,000 1.235,882 Total $404840939 $1,905,024 $5,565,534 $2,378,424 Page - 19 CITY OF SANGER NOTES TO FINANCIAL STATEMENTS September 30, 2002 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 $21451,590. NOTE F: INTERFUND RECEIVABLE AND PAYABLE: At September 30, 2002 the Proprietary Fund owed the General Fund $17,103, The receivable and payable result from one fund paying an expenditure for another fund. NOTE G: BUDGET AMENDMENTS: In February the City Council approved amending the September 2002 original budget. The amendments were made to more accurately reflect the actual departmental revenues and expenditures. The amendments did not change the net budget for the general or enterprises funds. In February 2003 the 4B Economic Development Board approved amending its original September 2002 Budget. Budgeted transfers out were increased $2981000. This increase in budgeted expenditures was funded from prior excess revenues. OTE He* FINAL JUDGMENT: N 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, 2002. ACCOUNT GROUP FINANCIAL STATEMENTS & SCHEDULES CITY OF SANGER COMBINING STATEMENT OF RNT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANC ALANCES = 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 For the Year Ended September 30, 2002 ADMINF TRATION $ 8321672 $ 202,681 15,350 55,333 28,436 2,000 22,784 17,974 5,309 11182,539 279,851 0 0 59,408 0 16,459 12,406 3,509 371,633 EXCESS REVENUES OVER (UNDER) EXPENDITURES 810,906 OTHER FINANCING SOURCES (USES) Proceeds of Debt Issuances Bond Issue Costs Transfers In _ TOTAL OTHER FINANCING SOURCES (USES) 2,458 0 314,774 317,232 EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITU $ 1,128,138 FUND BALANCE -BEGINNING FUND BALANCE -ENDING POLIO FIRE 0 0 127,540 2$855 0 0 0 130,395 0 6201200 0 0 0 2361052 30,843 7,342 0 0 0 88,372 0 0 0 88,372 0 100,714 0 0 0 6,735 36,360 4.267 894,437 148,076 (764,042) (59,704) 159,948 0 0 0 0 0 1591948 0 SANITA- TION 0 0 0 0 337,129 0 0 0 0 337.129 310,061 0 0 0 0 0 310,061 27,068 0 0 0 0 $ (604,094) $ (59,704) $ 27,068 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 21 COMMUNITY SWIMMING & SENIOR STREETS I FLOVARY F7 "KSj POOL CENTERS TOTAL $ 0 $ 0 $ 0 $ 0 $ 0 $ 832,672 291,742 0 0 0 0 494,423 0 0 0 0 0 15,350 0 0 0 0 0 551333 0 21032 0 8,029 21595 505,761 0 191585 0 0 0 112,812 0 0 0 0 0 221784 0 0 0 0 0 17,974 0 0 0 0 0 51309 291,742 21,617 0 81029 21595 21062,418 0 0 0 0 0 589,912 0 0 0 0 0 7201914 153,109 0 0 0 0 153,109 0 0 0 0 0 59,408 0 90,141 247,810 58,230 14,183 4101364 0 4,162 98,084 0 7,940 369,432 136,697 22,500 0 0 0 238,806 66,109 131744 0 0 0 94,971 3551915 1301547 3451894 581230 22,123 21636,916 (64,173) (108,930) (345,894) (50,201) (19,528) (574,498) 2,360,000 0 0 0 0 2,522,406 (36,201) 0 0 0 0 (36,201) 0 0 901381 0 0 405,155 2,3231799 0 901381 0 0 21891,360 $ 21259,626 $ (1081930) $ (255,513) $ (50,201) $ (19,528) 2,3161862 156,442 $ 2,473,304 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 21 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 For the Year Ended September 30, 2002 HOTEL/ MOTEL $ 0 $ 11,028 0 0 0 0 139 0 0 11,167 ECON DEVEL. 4A 0 $ 1451457 0 0 0 0 1,295 0 0 146,752 ECON DEVEL. 4B 0 145,557 0 0 0 0 2,844 0 0 148,401 TOTAL $ 0 302,042 0 0 0 0 4,278 0 0 306,320 30,507 1,200 1,517 33,224 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 TOTAL EXPENDITURES 30.507 EXCESS REVENUES OVER (UNDER) EXPENDITURES (19,340) 120,884 29,315 120,884 29,315 151,399 183423 4,64 OTHER FINANCING SOURCES (USES) Proceeds of Capital Leases/Note Pay. 0 0 Transfers Out 0 0 TOTAL OTHER FINANCING SOURCES (USES) 0 0 EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES (19,340) (41647) FUND BALANCE - BEGINNING 37,955 1101954 FUND BALANCE - ENDING $ 18,615 $ 106,307 $ 146,884 0 440,381 440,381 (293,497) 351,067 122,897 0 440,381 (440,381) (317,484) 4991976 571570 $ 1821492 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, 2002 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 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 Bond Issue Costs Transfers In TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES ADMINISTRATION BUDGET ACTUAL VARIANCE $ 857,000 1951680 4,000 57,600 291200 0 3,400 51,000 0 1,197,880 0 56,000 0 16,065 12,150 2,712 007 355, 842,873 2,450 0 402,971 405,421 $ 112481294 $ 8321672 $ (24,328) 202,681 71001 15,350 55,333 28,436 2,000 22,784 17,974 5,309 1,182,539 279,851 0 0 59,408 0 16,459 12,406 3,509 371,633 8101906 2,458 0 314,774 317,232 $ 1,128,138 11,350 (2,267) (764) 2,000 19$84 (33,026) 5,309 (15,341) (11,771) 0 0 (3,408) 0 (394) (256) (797) (16,626) (31,967) 8 0 (88,197) (88,189) $ (120,156) SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 23 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2002 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 Debt Issuances Bond Issue Costs Transfers In TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES POLICE BUDGET I ACTUAL I I VARIANCE $ 0 $ 0 0 0 126,000 0 0 0 0 1261000 0 6511050 0 0 0 224,500 18,008 4,286 844 897, 0 0 1271540 2,855 0 0 0 130,395 0 6201200 0 0 0 236,052 30,993 7,192 894,437 (771,844) (764,042) 159,948 0 0 107,100 159,948 $ (664,744) $ (604,094) 0 0 0 0 1,540 2,855 0 0 0 4,395 0 30,850 0 0 0 (11,552) (12,985) (2,906) 3,407 7,802 52,848 0 0 52,848 $ 60,650 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 23 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2002 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 Debt Issuances Bond Issue Costs 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 0 0 0 801000 881372 81372 0 0 0 0 0 0 0 0 0 801000 881372 81372 0 0 0 120,430 100,714 19,716 0 0 0 0 0 0 0 0 0 61750 61735 15 35,045 36,360 (1,315) 4,000 4,267 (267) 166,225 1481076 18,149 (86,225) (59,704) 261521 0 0 0 0 0 0 0 0 0 0 0 0 $ (861225) $ (59,704) $ 261521 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 23 CITY OF SANGER C(IMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2002 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 Debt Issuances Bond Issue Costs Transfers In TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES STREETS BUDGET � ACTUAL-] VARIANCE $ 0 $ 291,700 0 0 0 0 0 0 0 291,700 0 0 1691179 0 0 500 135,813 65,611 1,103 37 0 $ 2911742 0 0 0 0 0 0 0 291,742 0 0 1531109 0 0 0 136,697 66,109 355,915 0 0 0 0 0 0 0 42 0 0 16,070 0 0 500 (884) (498) 15,188 (79,403) (64,173) 15,230 0 21360,000 213607000 0 (36,201) (36,201) 0 0 0 0 213231799 21323,799 $ (797403) $ 21259,626 $ 21339,029 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 23 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended Septenther 30, 2002 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 Debt Issuances Bond Issue Costs Transfers In TOTAL OTHER FINANCING ';;�' j SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES Duu I ACTUAL I I VARIANCE 0 0 1,500 13,500 0 0 0 15,000 0 0 0 0 81,036 9,100 22,500 13,756 126,392 0 0 2,032 19,585 0 0 0 21,617 0 0 0 0 90,141 4,162 22,500 13,744 1301547 (111,392) (108,930) $ (111,392) $ (108,930) 0 0 0 0 532 6,085 0 0 0 6,617 0 0 0 0 (9,105) 4,938 0 12 (41155) 2,462 0 0 0 $ 2,462 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 23 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2002 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 Debt Issuances Bond Issue Costs 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 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2581794 98,000 356,794 (356,794) 0 0 90,000 90,000 0 0 0 0 2471810 98$084 0 0 3451894 (345,894) 0 0 90,381 90,381 $ (255,513) 0 0 0 0 10,984 (84) 0 0 10,900 10,900 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 23 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2002 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 Debt Issuances Bond Issue Costs Transfers In TOTAL OTHER FINANCING SWIMMING POOL BUDGET—] ACTUAL VARIANCE $ 0 $ 0 $ 0 0 0 0 SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES $ 0 0 0 0 0 0 11,000 81029 (21971) 0 0 0 0 0 0 0 0 0 0 0 0 11,000 0 0 0 0 51,464 8,000 0 0 59,464 (48,464) 0 0 0 0 48,464 81029 0 0 0 0 58,230 0 N 58,230 (50,201) 0 0 0 0 $ (50,201) (21971) 0 0 0 0 (6,766) 8,000 0 0 1,234 (11737) 0 0 0 0 $ (11737) SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 23 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2002 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 Debt Issuances Bond Issue Costs Transfers In TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES 0 COMMUNITY & SENIOR CENTERS BUDGET—] ACTUAL VARIANCE 0 0 0 0 3,500 0 0 0 0 3.500 0 0 0 0 19,550 8,400 0 0 27,950 (24,450) 0 0 0 0 0 2,595 0 0 0 0 2,595 0 0 0 0 14,183 7,940 0 0 22,123 (19,528) 0 0 0 0 0 0 0 0 (905) 0 0 0 0 (905) 0 0 0 0 5,367 460 5,827 4,922 0 0 0 0 $ 4,922 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 23 CITY OF SANGER COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GENERAL FUND For the Year Ended September 30, 2002 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 Debt Issuances Bond Issue Costs Transfers In TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES FUND BALANCE -BEGINNING [�i•L731��=Mil71iC�3 $ 8571000 $ 487,380 4,000 57,600 5081300 93,500 3,400 51,000 0 062.180 584,380 7711480 1691179 56,000 4101844 3711315 223,516 90,365 2,677,079 (614,899) 109,550 0 4921971 TOTAL ACTUAL 832,672 4941423 15,350 55,333 505,761 112,812 22,784 17,974 5,309 21062,418 589,912 720,914 1531109 59,408 4101364 3691432 238,956 94,821 21636,916 (574,498) 2,522,406 (36,201) 405,155 VARIANC� $ (24,328) 7,043 11,350 (21267) (21539) 19,312 19,384 (33,026) 5,309 238 (5,532) 50,566 16,070 (3,408) 480 1,883 (15,440) (4,456) 40,163 40,401 2,412,856 (36,201) (87,816) 602,521 2,891,360 2,288,839 $ (12,378) 213161862 $ 21329,240 156,442 $ 2,473,304 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, 2002 HOTEL/MOTEL BUDGET I F ACTUAL I I VARIANCE $ 0 $ 15,000 0 0 0 0 0 0 0 5,000 0 $ 11,028 0 0 0 0 139 0 0 EXPENDITURES General Government 0 301507 Public Safety 0 0 Highways and Streets 0 0 Health and Welfare 0 0 Culture and Recreation 0 0 Capital Outlay 0 0 Debt Service: 0 0 Principal 0 0 Interest 0 0 TOTAL EXPENDITURES 0 30507 EXCESS REVENUES OVER (UNDER) EXPENDITURES 151000 (19,340) OTHER FINANCING SOURCES (USES) Proceeds of Capital Leases/Note Payable 0 0 Transfers Out 0 0 TOTAL OTHER FINANCING SOURCES (USES) 0 0 EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES $ 15,000 (19,340) FUND BALANCE - BEGINNING 37,955 FUND BALANCE - ENDING $ 181615 0 (3,972) 0 0 0 0 139 0 0 (3,833) (30,507) 0 0 0 0 0 0 0 (30,507) (34,340) 0 0 0 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 24 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, 2002 ECONOMIC DEVELOPMENT -SECTION 4A BUDGET ALP I UM I VARIANCE $ 0 $ 0 $ 0 144,000 1451457 11457 0 0 0 0 0 0 0 0 0 0 0 0 1,000 11295 295 0 0 0 0 0 0 145,000 146,752 EXPENDITURES General Government 31550 11200 Public Safety 0 0 Highways and Streets 0 0 Health and Welfare 0 0 Culture and Recreation 0 0 Capital Outlay 0 0 Debt Service; Principal 100,000 1201884 Interest 30,000 291315 TOTAL EXPENDITURES 133550 151,399 EXCESS REVENUES OVER (UNDER) EXPENDITURES 11,450 (41647) OTHER FINANCING SOURCES (USES) Proceeds of Capital Leases/Note Payable 0 0 Transfers Out 0 0 TOTAL OTHER FINANCING SOURCES (USES) 0 0 EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES $ 11,450 (41647) FUND BALANCE - BEGINNING 1101954 FUND BALANCE - ENDING $ 1061307 1,752 2,350 0 0 0 0 0 (20,884) 685 (17,849) (16,097) 0 0 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 24 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, 2002 ECONOMIC DEVELOPMENT -SECTION 4B BUDGET ACTUAL VARIANCE $ 0 $ 144,000 0 0 0 0 1,000 0 0 145,000 0 $ 0 1451557 17557 0 0 0 0 2,844 0 0 148,401 EXPENDITURES General Government 21550 11517 11033 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 0 0 0 Interest 0 0 0 TOTAL EXPENDITURES 21550 1517 11033 EXCESS REVENUES OVER (UNDER) EXPENDITURES 142,450 146,884 21590 OTHER FINANCING SOURCES (USES) Proceeds of Capital Leases/Note Payable 0 0 0 Transfers Out (440,450) (440,381) 69 TOTAL OTHER FINANCING SOURCES (USES) (440,450) (440,381) 69 EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES $ (2981000) (293,497) $ 21659 FUND BALANCE - BEGINNING 351,067 FUND BALANCE -ENDING $ 57,570 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 24 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, 2002 TOTAL BUDGET ACTUAL I IVARIANCE $ 0 $ 0 $ 0 303,000 302,042 (958) 0 0 0 0 0 0 0 0 0 0 0 0 2,000 41278 21278 0 0 0 0 0 0 305.000 6,100 0 0 0 0 0 100,000 30,000 136,100 168,900 OTHER FINANCING SOURCES (USES) Proceeds of Capital Leases/Note Payable 0 Transfers Out (440,450) TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES FUND BALANCE -BEGINNING FUND BALANCE -ENDING 306,320 33,224 0 0 0 0 0 120,884 29,315 183,423 122,897 0 440,381 (440,450) (440,381) $ (271,550) (317,484) 499,976 $ 182,492 11320 (27,124) 0 0 0 0 0 (20,884) 685 (47,323) (46,003) 0 69 $ (45,934 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 24 COST Land Buildings & Improvements Equipment Fire Equipment Parks Swimming Pool INVESTMENT IN GENERAL FIXED ASSETS CITY OF SANGER STATEMENT OF GENERAL FIXED ASSETS For the Year Ending September 30, 2002 78,577 1,2791020 1,381,828 5091927 120,167 232,386 $ 3,601,905 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 25 CITY OF SANGER SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS COST Land Buildings & Improvements Equipment Fire Equipment Parks Swimming Pool INVESTMENT IN GENERAL FIXED ASSETS For the Year Ending September 30, 2002 BEGINNING ADDITIONS DELETIONS ENDING $ 691370 $ 91207 $ 0 $ 781577 1,133,715 145,305 0 11279,020 11271,727 1101101 0 11381,828 503,192 61735 0 5091927 22,083 98,084 120,167 232,386 0 0 232,386 $ 3,232,473 $ 369,432 $ 0 $ 3,601,905 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 26 CITY OF SANGER SCHEDULE OF CHANGES IN PROPERTY, PLANT & EQUIPMENT ENTERPRISE FUND For the Year Ending September 30, 2002 BEGINNING ADDITIONS DELETIONSI ENDING COST Water System $ 2,714,309 $ 1,659,893 $ 0 $ 4,374,202 Sewer System 31567,071 323,170 0 31890,241 Electric System 21735,786 765,368 0 31501,154 Equipment 11014,072 185,290 0 11199,362 Furniture & Office Equipment 204,333 20,902 0 225,235 Building Improvements 322,858 61100 0 3281958 Easement 11500 0 0 12500 TOTAL COST $ 10,559,929 $ 2,960,723 $ 0 $ 13,520,652 ACCUMULATED DEPRECIATION Water System $ 1,203,261 $ 131,865 $ 0 $ 1,335,126 Sewer System 11162,504 1071822 0 11270,326 Electric System 1,757,901 1861880 0 11944,781 Equipment 685,785 981920 0 784,705 Furniture & Fixtures 1791264 17,787 0 197,051 Building Improvements 37,417 101505 0 47,922 Easement 0 0 0 0 TOTAL ACCUMULATED DEPRECIATION $ 5,026,132 $ 553,779 $ 0 $ 5,579,911 NET PROPERTY, PLANT &EQUIPMENT $ 5,533,797 $ 7,940,741 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 27 CITY OF SANGER STATEMENT OF GENERAL LONG - TERM DEBT September 30, 2002 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 Guarantee National Bank Guaranty National Bank Guaranty National Bank Guarantee National Bank TOTAL NOTES PAYABLE CAPITAL LEASES Midwest Bankers Lubbock National Bank Diversified TOTAL CAPITAL LEASE OBLIGATIONS LAWSUIT JUDGEMENT PAYABLE Yarbrough Payable ACCRUED COMPENSATED ABSENCES Accrued Vacation Pay Accrued Sick Pay I U I AL HGGKUtU GUMF'tNSH I tU Ht35tNGt5 OF GENERAL LONG -TERM DEBT 0 1,165,000 2,3601000 $ 6,327 7,876 25,025 20,184 5,021 5,001 10,796 142,279 6801803 43,756 5,348 7,523 32,500 $ 13,300 $ 3,525,000 903,312 56,627 320,120 45,800 $ 4,850,859 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 28 CITY OF SANGER SCHEDULE OF CHANGES IN GENERAL LONG - TERM DEBT For the Year Ended September 30, 2002 1BEGINNING1 A IREDUCTION I ENDING BOND OBLIGATIONS Series 1994 Certificates of Obligation $ 11290,000 $ 0 $ 125,000 $ 11165,000 Series 2002 Certificates of Obligation 0 21360,000 0 213601000 $ 112901000 $ 21360,000 $ 1251000 $ 3,525,000 NOTES PAYABLE Guaranty National Bank Guaranty National Bank Guaranty National Bank Guaranty National Bank Guaranty National Bank Guaranty National Bank Guaranty National Bank Guaranty National Bank Guaranty National Bank TOTAL NOTES PAYABLE CAPITAL LEASES Midwest Bankers Lubbock National Bank Ford Ford Ford Diversified 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 17,408 0 11,081 61327 201881 0 13,005 7,876 381956 0 13,931 251025 31,421 0 11,237 20,184 11,308 0 61287 51021 101229 0 51228 51001 17,105 0 6,309 10,796 0 150,000 71721 142,279 801,687 0 1201884 6801803 $ 948,995 $ 1501000 $ 1951683 $ 903,312 $ 63,592 $ 0 $ 19,836 $ 43,756 91283 21458 61393 51348 336 0 336 0 11382 0 11382 0 8,635 0 8,635 0 0 91948 21425 75523 $ 83,228 $ 121406 $ 391007 $ 56,627 $ 0 $ 320,120 $ 0 $ 320,120 $ 34,000 $ 0 $ 11500 $ 32,500 13,700 0 400 131300 $ 47,700 $ 0 $ 11900 $ 451800 $ 21369,923 $ 2,842,526 $ 361,590 $ 4,850,859 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 29 CITY OF SANGER DEBT SERVICE REQUIREMENTS - GENERAL LONG-TERM DE Series 1994 Certificates of Obligation Year Ending September 30, 2003 2004 2005 2006 2007 2008 2009 PRINCIPAL $ 1351000 1451000 1551000 1651000 1751000 1901000 2001000 $ 1,165,000 Series 2002 Certificates of Obligation Year Ending September 30, 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 PRINCIPAL $ 40,000 75,000 80,000 85,000 85,000 90,000 95,000 1001000 105,000 1101000 1201000 1251000 130,000 135,000 1451000 1501000 1601000 1701000 1751000 185,000 $ 21360,000 September 30, 2002 INTEREST $ 68,657 60,963 52,625 43,635 33,900 23,400 12,000 $ 295,180 INTEREST $ 145,731 114,305 1101030 1051470 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 $ 11434,061 NOTE PAYABLE -GUARANTY NATIONAL BANK Year Ending September 30, 2003 PRINCIPAL $ 6,327 INTEREST $ 72 NOTE PAYABLE -GUARANTY NATIONAL BANK Year Ending September 30, PRINCIPAL INTEREST 2003 $ 7,876 $ 235 TOTAL REQUIREMENTS $ 2031657 2051963 207,625 2081635 2081900 213,400 2121000 $ 114601180 TOTAL EMENTS REQUIR $ 185,731 1891305 1901030 190,470 185,625 185,780 185,650 1851235 1851385 1851975 191,245 1901965 190,340 189,490 1931280 191,465 194,340 1961500 193,000 1941250 $ 31794,061 TOTAL REQUIREMENTS $ 6,399 TOTAL REQUIREMENTS $ 8,111 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 30 CITY OF SANGER DEBT SERVICE REQUIREMENTS - GENERAL LONG-TERM DE September 30, 2002 NOTE PAYABLE - GUARANTY NATIONAL BANK Year Ending TOTAL September 30, PRINCIPAL INTEREST REQUIREMENTS 2003 $ 14,576 $ 736 $ 15,312 2004 10,449 160 101609 $ 25,025 $ 896 $ 25,921 NOTE PAYABLE - GUARANTY NATIONAL BANK Year Ending TOTAL September 30, PRINCIPAL INTEREST REQUIREMENTS 2003 $ 11,757 $ 593 $ 121350 2004 81427 129 81556 $ 20,184 $ 722 $ 20,906 NOTE PAYABLE - GUARANTY NATIONAL BANK Year Ending TOTAL September 30, PRINCIPAL INTEREST REQUIREMENTS 2003 $ 51021 $ 84 $ 51105 NOTE PAYABLE - GUARANTY NATIONAL BANK Year Ending TOTAL September 30, PRINCIPAL INTEREST REQUIREMENTS 2003 $ 51001 $ 101 $ 5,102 NOTE PAYABLE - GUARANTY NATIONAL BANK Year Ending TOTAL September 30, PRINCIPAL INTEREST REQUIREMENTS 2003 $ 6,528 $ 313 $ 6,841 2004 41268 61 41329 $ 10,796 $ 374 $ 11,170 NOTE PAYABLE -GUARANTY NATIONAL BAN Year Ending TOTAL September 30, PRINCIPAL INTEREST REQUIREMENTS 2004 $ 12,262 $ 61829 $ 191091 2005 12,889 61202 191091 2006 13,549 51542 191091 2007 141241 41850 19,091 2008 14,971 41120 191091 2009 15,736 31355 191091 2010 16542 21549 191091 2011 17,388 11703 19,091 2012 18,403 688 191091 2013 61298 66 61364 $ 142,279 $ 35,904 $ 178,183 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 30 CITY OF SANGER DEBT SERVICE REQUIREMENTS - GENERAL LONG-TERM DE September 30, 2002 NOTE PAYABLE - GUARANTY NATIONAL BANK Year Ending September 30, PRINCIPAL 2003 $ 631924 2004 661529 2005 69,239 2006 72,060 2007 74,996 2008 78,051 2009 81,231 2010 84,541 2011 87,985 2012 2,247 $ 6801803 Capital Lease -Midwest Bankers Year Ending September 30, 2003 2004 Less Amount Representing Interest LEASE PAYMENT $ 24,105 24,105 $ 48,210 4,454 $ 43,756 Capital Lease - LUBBOCK NATIONAL BANK Year Ending September 30, 2003 Less Amount Representing Interest LEASE PAYMENT $ 6,005 657 $ 5,348 Capital Lease -DIVERSIFIED Year Ending LEASE September 30, PAYMENT 2003 $ 3,949 2004 3,949 2005 658 8,556 Less Amount Representing Interest 11033 $ 7,523 INTEREST $ 26,069 23,464 20,754 17,933 14,997 11,942 8,762 5,452 2,008 7 $ 131,388 TOTAL REQUIREMENTS $ 89,993 89,993 89,993 89,993 89,993 89,993 89,993 89,993 89,993 2,254 $ 812,191 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 30 CITY OF SANGER DEBT SERVICE REQUIREMENTS - GENERAL LONG-TERM DE September 30, 2002 Lawsuit Judgement Payable - Yarbrough Year Ending ANNUAL September 30, PAYMENT 2003 $ 401000 2004 401800 2005 41,616 2006 42,448 2007 43,297 2008 44,163 2009 451047 2010 22,749 $ 320,120 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 30 CITY OF SANGER SCHEDULE OF CHANGES IN LONG - TERM DEBT - ENTERPRISE FUND For the Year Ended September 30, 2002 BEGINNING ADDITIONS jKtUUUTION ENDING REVENUE BOND OBLIGATIONS Series 1996 $ 895,000 $ 0 $ 40,000 $ 855,000 Series 1999 11695,000 0 1401000 1,555,000 Series 2002 0 21540,000 0 21540,000 TOTAL REVENUE BONDS $ 21590,000 $ 2,540,000 $ 180,000 $ 41950,000 NOTES PAYABLE Guaranty National Bank $ 379,000 $ 97,544 $ 751800 $ 400,744 Guaranty National Bank 751525 0 48,079 27,446 Guaranty National Bank 91850 0 61135 31715 Guaranty National Bank 19,424 0 10$47 91077 Guaranty National Bank 95,560 0 35,239 601321 TOTAL NOTES PAYABLE $ 579,359 $ 97,544 $ 175,600 $ 501,303 CAPITAL LEASES Lubbock National Bank $ 10,484 $ 2,458 $ 71594 $ 51348 Ford Motor Credit 101500 0 8,954 11546 Ford Motor Credit 11949 0 1,949 0 Ford Motor Credit 3,909 0 31909 0 Altec 0 1161344 91007 107,337 TOTAL CAPITAL LEASES $ 26,842 $ 118,802 $ 31,413 $ 114,231 TOTAL LONG - TERM DEBT $ 31196,201 $ 2,7561346 $ 387,013 $ 5,565,534 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 31 CITY OF SANGER DEBT SERVICE REQUIREMENTS - ENTERPRISE FUND Series 1996 Revenue Bonds Year Ending September 30, PRINCIPAL 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 45,000 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 $ 855,000 Series 1999 Revenue Refunding Bonds Year Ending September 30, PRINCIPAL 2003 2004 2005 2006 2007 2008 2009 2010 2011 145000 , 150,000 155,000 1651000 1701000 1801000 1901000 1951000 2051000 $ 1,5551000 September 30, 2002 INTEREST $ 38,105 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 $ 3281080 INTEREST $ 67,100 60,938 54,562 47,975 40,962 33,653 25,913 17,600 9,020 $ 357,723 TOTAL REQUIREMENTS $ 79,585 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 $ 11179,560 TOTAL REQUIREMENTS $ 212,100 210,938 209,562 212,975 210,962 2131653 215,913 212,600 2141020 $ 11912,723 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 32 CITY OF SANGER DEBT SERVICE REQUIREMENTS - ENTERPRISE FUND September 30, 2002 Series 2002 Revenue Bonds Year Ending TOTAL September 30, PRINCIPAL INTEREST REQUIREMENTS 2003 $ 80,000 $ 130,242 $ 210,242 2004 801000 131,500 211,500 2005 85,000 126,700 211,700 2006 85,000 121,600 2061600 2007 90,000 116500 206,500 2008 95,000 111,100 2067100 2009 100,000 105,400 205,400 2010 1051000 99,400 204,400 2011 110,000 93,100 203,100 2012 1200000 88,150 208,150 2013 1251000 82,510 207,510 2014 1301000 761510 206,510 2015 1401000 70,140 210,140 2016 1451000 63,140 208,140 2017 155,000 55,745 210,745 2018 160,000 47,840 207,840 2019 170,000 391520 209520 2020 1801000 30,510 210510 2021 1901000 20,790 210,790 2022 1951000 101530 205,530 $ 21540,000 $ 116201927 $ 41160,927 NOTE PAYABLE -GUARANTY NATIONAL BANK Year Ending TOTAL September 30, PRINCIPAL INTEREST REQUIREMENTS 2003 $ 80,149 $ 201037 $ 100,186 2004 80,149 161030 96,179 2005 80,149 12,022 92,171 2006 80,149 81015 88,164 2007 80,148 4,007 84,155 $ 4001744 $ 601112 $ 460,856 NOTE PAYABLE - GUARANTY NATIONAL BANK Year Ending TOTAL September 30, PRINCIPAL INTEREST REQUIREMENTS 2003 $ 27,446 $ 319 $ 27,765 NOTE PAYABLE -GUARANTY NATIONAL BANK Year Ending TOTAL September 30, PRINCIPAL INTEREST REQUIREMENTS 2003 $ 31715 $ 111 $ 31826 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 32 CITY OF SANGER DEBT SERVICE REQUIREMENTS - ENTERPRISE FUND September 30, 2002 NOTE PAYABLE - GUARANTY NATIONAL BANK Year Ending September 30, PRINCIPAL 2003 $ 91077 $ NOTE PAYABLE -GUARANTY NATIONAL BANK Year Ending September 30, 2003 2004 PRINCIPAL $ 36,485 23,836 $ 60,321 Capital Lease - LUBBOCK NATIONAL BANK Year Ending September 30, 2003 Less Amount Representing Interest LEASE PAYMENT 6,005 657 $ 5,348 Capital Lease -FORD MOTOR CREDIT Year Ending September 30, 2003 Less Amount Representing Interest Capital Lease - ALTEC Year Ending ";` September 30, 2002 2004 2005 Less Amount Representing Interest LEASE PAYMENT $ 1,557 11 $ 1,546 LEASE PAYMENT $ 42,027 42,027 31,521 115,575 8,238 $ 107,337 INTEREST 171 INTEREST $ 1,741 334 $ 2,075 TOTAL REQUIREMENTS $ 9,248 TOTAL EMENTS REQUIR $ 38,226 24,170 $ 62,396 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 32 CITY OF SANGER GOVERNMENTAL AND PROPRIETARY FUNDS SCHEDULE OF RESTRICTED CASH September 30, 2002 GENERAL FUND Police Department Funds $ Beautification Board Funds Library Funds Park Department Fund Home Grant Funds Unspent 2002 Bond Funds Certificate of Obligation Reserve and I & S Funds TOTAL GENERAL FUND 201 6,318 571 8,246 5 2,336,221 77,291 $ 21428,853 SPECIAL REVENUE FUND Hotel/Motel $ Economic Development -Section 4A Economic Development -Section 4B TOTAL SPECIAL REVENUE FUND ENTERPRISE FUND Revenue Bond I & S Funds Revenue Bond Reserve Funds Revenue Bond Emergency Fund Customer Utility Deposits Unspent 2002 Revenue Bond Funds One Plus Program E Safety and Incentive Funds i TOTAL ENTERPRISE FUND Q 0 16,240 92,060 43,323 151,623 103,444 2591530 16,212 132,696 2,438,587 113 192 $ 2,950,774 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 33 CITY OF SANGER GOVERNMENTAL AND PROPRIETARY FUNDS SCHEDULE OF RESERVED FUND EQUITIES GENERAL FUND Prepaid Expenses Police Department Fund Beautification Board Funds Library Funds Park Department Fund Unspent 2002 Bond Proceeds Minimum Required Reserves, Interest and Sinking Funds - 1994 Certificate of Obligation TOTAL GENERAL FUND SPECIAL REVENUE FUND Hotel/Motel Fund Economic Development -Section 4A Economic Development -Section 4b TOTAL SPECIAL REVENUE FUND ENTERPRISE FUND Minimum Required Reserves, Interest and Sinking Funds -Revenue Bonds One Plus Program Safety and Incentive TOTAL ENTERPRISE FUND September 30, 2002 $ 1,146 201 6,318 571 8,246 21336,221 38,000 $ 21390,703 $ 18,615 106,307 57,570 492 $ 347,289 113 192 $ 347,594 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 34 CITY OF SANGER SCHEDULE OF INSURANCE COVERAGE September 30„ 2002 AMOUNT OF _ TYPE OF COVERAGE FROM TO COVERAGE CARRIER Business Auto: Liability 10/1/01 10/1/02 31000,000 Texas Municipal League Physical Damage Property Damage Workmen's Compensation Liability - Law Enforcement Liability Errors & Omissions General Liability 10/1 /01 10/1/02 Actual Cash Value 10/1/02 Scheduled Equip. 610831511 10/1 /02 10/1 /02 10/1 /02 Statutory Texas Municipal League Texas Municipal League Texas Municipal League 1,000,000 Texas Municipal League 1,0001000 Texas Municipal League 3,000,000 Texas Municipal League Mobile Equipment 10/1/01 10/1/02 439,270 Texas Municipal League Boiler & Machinery 10/1/01 10/1/02 5001000 Texas Municipal League Employee Bond 6/24/02 6/24/03 101000 Western Surety SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 35 CLASSIFICATION OF CUSTOMERS Residential Commercial, Demand & City NUMBER OF CONNECTIONS WATER RATES Deposit CITY OF SANGER PROPRIETARY FUND SUPPLEMENTALINFORMATION September 30, 2002 WATER 1,805 195 ELECTRIC 1,395 361 2,000 1,756 RESIDENTIAL COMMERCIAL 100.00 SEWER First 1,000 Gallons (minimum) $ 14.25 $ 17.00 1,000 TO 5,000 Gallons $ 2.35 $ 2075 51000 TO 15,000 Gallons $ 2.60 $ 3.00 15,000 TO 30,000 Gallons $ 3.05 $ 3.25 Over 30,000 Gallons $ 3.90 $ 4.00 SEWER RATES RESIDENTIAL COMMERCIAL 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 SMALL LARGE ELECTRIC RATES RESIDENTIAL COMMERCIAL COMMERCIAL Deposit $ 100.00 $ 200.00 $ 200.00 Facility Charge $ 9.00/month $ 15.00/month $ 54.00/month Energy Charge $ 0.0761634/KWH $ .081696/kwh $ 0.0237048/kwh Demand Charge: First 6 KWH (minimum) $ -- $ -- $ 53.39/kwh Over 6KWH $ -- $ -- $ 8.29/kwh GALLONS OF WATER METERED (APPROX.) 214,106,400 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 36 CITY OF SANGER ANALYSIS OF TAXES RECEIVABLE For the Year Ended September 30, 2002 2002 2001 ADJUSTED TAX ROLL $ 860,357 $ 681,486 $ Less: Collections and Adjustments 809,649 655189 CURRENT YEAR TAXES RECEIVABLE - END OF YEAR PRIOR YEAR TAXES RECEIVABLE - END OF YEAR TOTAL TAXES RECEIVABLE - END OF YEAR Assessed Value Tax Rate per $100 Percent of Current Taxes Collected to Billed 2000 1999 584,208 $ 506,698 5601137 484,054 50,708 26,297 24,071 22,644 51,079 48,679 46,137 46,742 $ 101,787 $ 74,976 $ 70,208 $ 69,386 $ 146,091,829 $ 130,306,503 $ 111,724,586 $ 100,765,297 $ 0.588790 $ 0.522840 $ 09522840 $ 00502800 94.11 % 96.14% 95.88% 95053% SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE - 37 RECEIPTS: Federal Local TOTAL RECEIPTS EXPENDITURES: FEDERAL Water Improvements Sewer Improvements Electrical Building Construction Engineering Administration LOCAL Water Improvements Sewer Improvements Electrical Building Construction Engineering Administration TOTAL EXPENDITURES EXCESS REVENUES OVER EXPENDITURES CITY OF SANGER COMMUNITY DEVELOPMENT BLOCK GRANT NO.720082 TEXAS DEPARTMENT OF ECONOMIC DEVELOPMENT SCHEDULE OF GRANT RECEIPTS & EXPENDITURES For the Year Ending September 30, 2002 CONTRACT PERIOD October 4, 2000 through October 3, 2003 1�17�7_1� $ 369,993 $ 369,993 262,308 0 0 0 1,153 7,664 LOCAL 0 0 313,706 0 79,830 0 4,929 0 398,465 PRIOR YEARS $ 1,102,393 0 171027393 468,200 65,592 5527000 0 77,291 38,178 1,375 0 2,888 10,527 1,224,710 TOTAL $ 1,472,386 $ 0 1,472,386 730,508 65,592 552,000 0 44 78,4 45,842 322,365 0 81,205 0 7,817 10,527 178942300 BUDGET 1,500,000 15,0007000 16,500,000 686,300 109,800 552,000 0 81,900 70,000 0 15,000,000 0 16,500,000 GRANT RECEIPTS ARE RECORDED IN THE PROPRIETARY FUND BALANCE SHEET AS "CONTRIBUTED CAPITAL" VARIANCE (27,614) (15,0003000) (15,0271614) (44,208) 44,208 0 0 3,456 24,158 (322,365) 0 (81,205) 15,000,000 (71817) (10,527) 14,6057700 $ (421,914) SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS PAGE 38 7 WILLIAM C. SPORE, P.C. Certified Public Accountants I 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, 2002, and have issued our report thereon dated February 11, 2003. 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, Compliance 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 i 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. W Ac William C. Spore, P. February 11, 2003 WILLIAM C. SPORE, P.C. Certified Public Accountants 3950 Hwy 360, Ste 102, Grapevine, Texas 76059 817-421-GG19 To the City Council City of Sanger, Texas In planning and performing our audit of the general purpose financial statements of the City of Sanger, Texas, for the year ended September 30, 2002, 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 A�iditing Standards, we have issued our report dated February 11, 2003 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. All of these matters were considered immaterial and have been reviewed with the City's management, We will review the status of these comments during our next audit engagement. Sincerely, William C. Spore, P.C. February 11, 2003