1996 Annual Financial ReportCITY OF BANGER, TEXAS
FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
TABLE OF CONTENTS
PAGE #
AUDITOR'S REPORT 1
CITY OFFICIALS 2
COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS 3
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES 4
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES -
BUDGET AND ACTUAL 5
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN RETAINED EARNINGS - PROPRIETARY FUND 6
COMBINED STATEMENT OF CASH FLOWS - PROPRIETARY FUND 7
NOTES TO FINANCIAL STATEMENTS 8-15
COMBINING AND INDIVIDUAL FUND AND ACCOUNT GROUP STATEMENTS
COMBINING STATEMENT OF REVENUES & EXPENDITURES
GENERAL FUND 16
COMBINING STATEMENT OF REVENUES & EXPENDITURES
GENERAL FUND - BUDGET AND ACTUAL 17
STATEMENT OF GENERAL FIXED ASSETS 18
SCHEDULE OF CHANGES TO GENERAL FIXED ASSETS 19
SCHEDULE OF PROPERTY, PLANT & EQUIPMENT - PROPRIETARY FUND 20
STATEMENT OF GENERAL LONG-TERM DEBT 21
SCHEDULE OF CHANGES IN GENERAL LONG-TERM DEBT 22
SCHEDULE OF GENERAL FUND DEBT SERVICE REQUIREMENTS 23
SCHEDULE OF CHANGES IN LONG-TERM DEBT - PROPRIETARY FUND 24
SCHEDULE OF PROPRIETARY FUND DEBT SERVICE REQUIREMENTS 25
SUPPLEMENTAL INFORMATION
SCHEDULE OF RESTRICTED ASSETS 26
SCHEDULE OF RESERVED FUND EQUITIES 27
SCHEDULE OF INSURANCE COVERAGE 28
ENTERPRISE FUND # OF CUSTOMERS AND RATES 29
ANALYSIS OF PROPERTY TAXES 30
REPORT ON INTERNAL CONTROL STRUCTURE
REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS
MANAGEMENT LETTER
REPORTS RELATED TO SINGLE AUDIT
REPORT ON FEDERAL FINANCIAL ASSISTANCE
REPORT ON INTERNAL CONTROL STRUCTURE RELEVANT TO ADMINISTERING
F FEDERAL FINANCIAL ASSISTANCE
REPORT ON LAWS AND REGULATIONS - GENERAL REQUIREMENTS
REPORT ON LAWS AND REGULATIONS- NONMAJOR PROGRAMS SPECIFIC
REQUIREMENTS
REPORTS FOR THE TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
William C. Spore & Company, PC.
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 September 30, 1996,
and for the year then ended, as listed in the table of contents.
These general purpose financial statements are the responsibility
of City of Sanger, Texas, management. Our responsibility is to
express an opinion on these general purpose financial statements
based upon our audit.
We conducted our audit in accordance with generally accepted
auditing standards, Governmental Auditing Standards, issued by the
Comptroller General of the United States, and the provisions of the
Office of Management and Budget Circular A-128, "Audits of State
and Local Governments." Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
general purpose financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the general
purpose financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall general purpose
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, 1996,
and the results of its operations and the cash flows of its
proprietary fund types for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on
°,j the general purpose financial statements taken as awhole. The
it 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.
f x
Certified Public Accountants
February 6, 1997
1600 Airport Freeway, Suite 208 # Bedford, TX 76022 # 817/545-7725
ELECTED OFFICIALS
MAYOR
MAYOR PRO TEM
COUNCILMEMBERS
APPOINTED OFFICIALS
CITY ADMINISTRATOR
CITY SECRETARY
MUNICIPAL COURT JUDGE
CITY ATTORNEY
CITY OF SANGER
CITY OFFICIALS
September 30, 1996
John W. Coker, III
Tommy Kincaid
Glenn Ervin
Jimmy Frazier
Jerry Jenkins
Jack Richardson
Larry Keesler
Rosalie Chavez
Danny Spindle
Ronald Neiman/Louis Nichols
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 2
CITY OF SANGER
COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS
ASSETS
Cash
Receivables, Net of
Allowances for Uncollectables:
Property Taxes
Nonproperty Taxes
Services
Other
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
Customer Deposits
Deferred Revenues
Long -Term Debt:
Combensated Absences
Notes Payable
Revenue Bonds Payable
Certificate of Obligation Payable
Capital Leases
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 LIBILITIES AND
FUND EQUITY
September 3o, 1996
GENERAL
$ 24,521
63,382
34,494
0
0
1,717
189,380
0
0
0
E
$ 313,494 $
$ 21,257 $
7,365
0
63,382
0
0
0
0
0
92, 004
0
0
0
0
189,378
32,112
2211490
ENTERPRISE
200943
,
0
0
367,860
28,796
1861627
1,3341351
3,318,288
63,878
0
5,500,743
158,693
70,046
81,564
0
23,947
0
3,130,000
0
18,489
3,482,739
108,974
0
3111095
1,5971935
0
0
2,018,004
$ 313,494 $ 5,500,743
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 3
(memorandum only)
1996 1995
2251464 $ 91,891
0 0 63,382 55,425
0 0 34,494 14,766
0 0 367,860 375,826
0 0 28,796 849
0 0 188,344 113,770
0 0 11523,731 735,482
2,382,431 0 5,700,719 5,739,356
0 0 63,878 0
0 2,048,204
21382,431 $ 2,0481204
2,048,204
$ 10,244,872 $
2,355,289
91482,654
$ 0 $ 0 $ 179,950 350,294
0 0 77,411 83,871
0 0 81,564 71,483
0 0 63,382 55,425
0 27,000 50,947 26,000
0 0 0 205,000
0 0 3,1301000 2,155,000
0 1,815,000 11815,000 11900,000
0 206,204 224,693 276,709
0 21048,204 51622,947 51123,782
0 0 108,974 100,196
2,3821431 0 21382,431 21273,121
0 0 311,095 291,494
0 0 11597,935 11372,417
0 0 189,378 465,607
0 0 32,112 (143,963)
21382,431 0 41621,925 41358,872
$ 2,382,431 $ 2,048,204 $ 10,244,872 $ 9,482,654
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED
Page - 3
CITY OF SANGER
COMBINED STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES - GENERAL FUND
For the Year Ended September 3o, 1996
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
TOTALREVENUES
EXPENDITURES
General Government
Public Safety
Hiways 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/Notes Payable
Transfers In
TOTAL OTHER FINANCING
SOURCES (USES)
EXCESS OF REVENUES AND OTHER
SOURCES OVER EXPENDITURES
FUND BALANCE -BEGINNING
FUND BALANCE -ENDING
1996
373,807 $
290,185
7,333
191968
2651913
94,900
9,038
201205
48,423
1,129,772
426,265
34 3,982
2231010
61,260
100,421
1091309
331,165
167,517
1,765,929
1995
351,547
250,426
6,367
22,776
234,670
35, 974.,,..-
84,359
8,667
58,570
1,053,356
427,943
3081566
1,4161832
17,307
78,640
6041876
297,813
167,725
3,319,702
(636,157) (2,266,346)
23,080 228,500
512,923 540,811
536t003 769,311
(100,154) (1,497,035)
3211644 11818,679
$ 221,490 $ 321,644
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, 1996
REVENUES BUDGET I ACTUAL I I VARIANCE
Property Taxes $ 367,840 $ 373,807 $ 5,967
Nonproperty Taxes 245,000 290,185 45,185
Penalties and Interest on
Deliquent Taxes 11,000 71333 (31667)
License and Permits 24,800 19,968 (4,832)
Fees and Services 219,000 265,913 46,913
Grants and Intergovernmental 33,500 94,900 61,400
Interest Income 11100 91038 71938
Miscellaneous Income 26,250 20,205 (61045)
Donations 0 48,423 489423
TOTAL REVENUES 928,490 11129,772 201,282
EXPENDITURES
General Government 398,790 426,265 (27,475)
Public Safety 356,717 346,982 %735
Hiways and Streets 84,845 223,010 (138,165)
Health and Welfare 20,212 61,260 (41,048)
Culture and Recreation 111,652 100,421 11,231
Capital Outlay 5,750 109,309 (103,559)
Debt Service:
Principal 331,165 331,165 0
Interest 145,135 167,517 (22,382)
TOTAL EXPENDITURES 11454,266 11765,929 (311,663)
EXCESS REVENUES OVER
(UNDER) EXPENDITURES (525,776) (636,157) (110,381)
OTHER FINANCING SOURCES (USES)
Proceeds of Capital Leases 0 23,080 23,080
Transfers In 530,876 512,923 (17,953)
TOTAL OTHER FINANCING
SOURCES (USES) 530,876 536,003 51127
EXCESS OF REVENUES AND OTHER
SOURCES OVER EXPENDITURES $ 5,100 (100,154) $ (105,254)
FUND BALANCE -BEGINNING
FUND BALANCE -ENDING
321,644
$ 221,490
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 5
CITY OF SANGER
COMBINED STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN RETAINED EARNINGS - PROPRIETARY FUND
For the Year Ended September 30, 1996
OPERATING REVENUES
Charges and Fees
OPERATING EXPENSES
Personnel Services
Purchase of Services
Materials and Supplies
Depreciation
Franchise Fees
TOTAL OPERATING EXPENSES
OPERATING INCOME
NONOPERATING REVENUES (EXPENSES)
Interest Income
Debt Service interest, Fees & Discounts
Transfers Out
TOTAL NONOPERATING REVENUES
(EXPENSES)
NET INCOME
RETAINED EARNINGS -BEGINNING
RETAINED EARNINGS -ENDING
1996
3,361,752
532,034
11569,683
77,078
252,458
72,359
2,503,612
858,140
45,506
(145,604)
(512,923)
1995
3,120,834
474,890
1,514,747
73,073
244,889
6%031
2,376,630
744,204
20,001
(151,357)
(540,811)
(613,021) (672,167)
245,119 63, 911
$ 1,909,030 $
,591,874
,
1,663,911
1
j SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 6
CITY OF SANGER
COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES
For the Year Ended September 30, 1996
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
CDBG Grant Funds Received
Cash Transfered 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
1996
1995
$
3,379,799 $ 3,068,668
(1,788,051) (11640,660)
(527,730) (475,251)
11064,018 9529757
(168,389) (165,572)
1,060,000 0
(118,931) (125,540)
(134,713) (154,118)
8,778 0
(512,923) (540,811)
133,822 (986,041)
17,559 22,255
1,215,399 (11,029)
319,895 330,924
$ 1,535,294 $ 319,895
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Adjustment to Reconcile Operating Income
I 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
$ 858,140
252,458
7,966
(751973)
7,466
3,880
10.081
E�
$ 1,0641018 $
744, 204
244,889
(56,627)
(71600)
221968
462
4,461
952,757
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 7
CITY OF SANGER
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Sanger operates under a Council -Mayor form of
government, following the laws of a General Law 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:
The City, for financial reporting purposes, includes all of the
funds and account groups relevant to the City of Sanger. The
financial statements presented herein do not include agencies which
have been formed under applicable state laws or separate and
distinct units of government apart from the City of Sanger.
There are no separately administered organizations that are
controlled or dependent on the City.
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.
�I
Page - 8
CITY OF SANGER
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
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.
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.
CITY OF SANGER
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
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
operations over their estimated service lives on the
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
4. BASIS OF ACCOUNTING:
in
amounts
assets, to
straight-line
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.
Page - 10
CITY OF SANGER
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
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 Administrator 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 %J the fiscal year.
At year-end the City's cash accounts totaled $1,749,195 of which
$1,749,095 was held in checking, savings or certificate of deposit
accounts at a local bank. Of the Bank balances, $148,183 was
covered by federal depository insurance and the remaining
$1,600,912 was covered by collateral held by the pledging Bank's
agent in the name of the City. There were no uncollateralized cash
accounts.
The securities pledged by the City's depository institution are as
follows:
SECURITY PAR FMV
TREASURY NOTE 2,200,000 21247,438
7. CAPITALIZED INTEREST:
The City capitalizes construction period interest when applicable.
$12,612 if interest expense related to the construction of a new
sewer plant was capitalized during the current fiscal year.
CITY OF SANGER
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
8: INVENTORIES:
Inventories of the Enterprise Fund are valued at the lower of cost
(first -in, first -out) or market.
9. 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 $27,000 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.
10. 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.
11. ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS:
Allowance for uncollectible accounts receivable in the Proprietary
Fund at September 30, 1996 is $25,037.
12. 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, 1996 was $2,568.
by the firemen's pension plan. This
as part of the State Firemen's Relief
PE expense for the year ended
CITY OF SANGER
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
Employee Retirement Plan:
The City belongs to the Texas Municipal Retirement System, a
retirement and disability pension system for municipal employees in
the State of Texas. The plan is administered in accordance with
the Texas Municipal Retirement System Act and is governed by a
Board of Trustees appointed by the governor of the State of Texas.
The City has elected to have monthly contributions from the City's
employees in the amount of 5% of their gross earnings with the City
providing a monthly contribution of 5.42% of the monthly gross
earnings. Employee contributions are tax deferred and not subject
to federal income tax until they are withdrawn. The City's
contributions for the fiscal year totaled $38,413.
NOTE C: LONG-TERM DEBT:
The following is a summar
future debt requirements
these financial statements,
General Long Term Debt:
y of the City's Long -Term Debt. The
are detailed in schedules included in
Certificates of Obligation, Series 1994 - Original amount of
$1,900,000; 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.
The Certificates of Obligation require that certain reserve
accounts be maintained.
Capital Lease - Associates Commercial Corporation - Original
balance of $30,066. The lease requires forty eight monthly rental
payments of $694, with eighteen payments remaining at September 30,
1996. 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 Dump
Truck. The equipment is security for the lease.
Capital Lease - General Motors Acceptance Corporation - Original
balance of $22,717. The lease requires forty eight monthly rental
payments of $548, with twenty four payments remaining at
September 30, 1996. 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 vehicle for the fire department. The vehicle is security for the
lease.
Page - 13
CITY OF SANGER
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
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 - Motorola Communications and Electronic, Inc. -
original balance of $33,654. The lease requires five annual rental
payments of $8,219 beginning in August 1995, 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 radio communication equipment.
The equipment is security for the lease.
Capital Lease - Banc One Leasing Corporation - Original balance of
$19,200. The lease requires forty eight monthly rental payments of
$468, with thirty six payments remaining at September 30, 1996.
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 brush chipper for
the street department. The chipper is security for the lease.
Proprietary Fund:
Texas Utility System Refunding and Improvement Revenue Bonds,
Series 1991 - Original amount of $2,230,000, principal paid
annually on May 15, Interest paid semi-annually on May 15 and
November 15, at rates ranging from 4.70% to 7.15%. The bonds were
issued to provide funds sufficient to refund all of the City's
outstanding Series 1976, 1977, and 1985 Bonds plus an additional
$800,000 for improvements to the City's Waterworks System. The
refunding of the Bonds provided for lower future debt service
requirements due to reduced interest rates. The Bonds are to be
repaid from and are secured by the Enterprise Fund Net Revenues.
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,
The Bond Obligations require that certain cash reserve accounts be
maintained.
CITY OF SANGER
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
Capital Lease - Case Credit Corporation - Original balance of
$38,750, The lease requires forty eight monthly rental payments of
$940, with seven payments remaining at September 30, 1996. The
City has a purchase option during the term of the lease to purchase
the equipment at a designated purchase option price. The City
it intends to exercise this option at the end of the lease term. The
proceeds of the lease were used to purchase a trencher. The
equipment is security for the lease.
Capital Lease - Ford Motor Credit - Original balance of $31,618.
The lease requires forty eight monthly rental payments of $753,
with four payments remaining at September 30, 1996, 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 backhoe/loader. The equipment
is security for the lease.
Capital Lease - Maroon Cattle
Lenders) - Original balance
eight monthly rental payment
remaining at September 30, 19
Company (Purchased from Diversified
of $21,340, The lease requires forty
s of $506, with nineteen payments
96. 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 Jet Sprayer. The equipment 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
1997 $129,370 $126,291 $ 1201022 $ 1881725
1998 137,857 116,890 128,467 178,578
1999 134.379 107,123 135,000 172,198
2000 127,418 97,377 140,000 165,042
2001 138,588 87,958 150,000 157,377
Future 1.353,592 379,626 2,475,000 1.,0390909
Total $2_1,021,204 $ 9150265s $3,148,489 $1.901,829
NOTE E: PRIOR -YEAR DEFEASANCE OF DEBT:
In 1992, the City defeased its Series 1985 Revenue Bonds by placing
the proceeds of new bonds in an irrevocable trust to provide for
all future debt service payments on the old bonds. Accordingly,
the trust account assets and the liability for the defeased bonds
are not included in the City's financial statements. On September
30, 1996, $700,000 of bonds outstanding are considered defeased.
CITY OF SANGER
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
NOTE F: 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
$1,332,4130
NOTE G: BUDGET EXCEPTIONS:
Home grant revenues and expenditures were not budgeted during the
fiscal year. Actual revenues were $42,863 and actual expenditures
were $46,102.
Police department capital outlay expenditures exceeded budgeted
capital outlay by $17,906. These unbudgeted expenditures were
financed from surplus funds received during the fiscal year.
Street improvement expenditures of $114,256 were not budgeted.
These unbudgeted expenditures were paid for from bond proceeds
collected in the prior fiscal year.
Street department debt service expenditures exceeded budgeted
expenditures by $21,853. The unbudgeted expenditures were funded
from current year surplus funds.
Street department capital outlay expenditures exceeded budgeted
capital outlay by $19,200. These unbudgeted expenditures were
financed from the proceeds of a capital lease, which were also
unbudgeted.
Library department capital outlay expenditures exceeded budgeted
capital outlay by $11,760, These unbudgeted expenditures were paid
for from bond proceeds collected in the prior fiscal year and from
current year surplus funds.
Parks department capital outlay expenditures exceeded budgeted
capital outlay by $54,266. These unbudgeted expenditures were paid
for from the receipt of unbudgeted donations of $47,680 and from
current year surplus funds.
NOTE H: INTERFUND RECEIVABLE AND PAYABLE:
Permanent transfers were made to clear all interfund receivables
and payables occurring during the year. The receivable and
payables result from one fund paying an expenditure for another
fund.
i
Page - 16
COMBINING AND INDIVIDUAL FUND
AND ACCOUNT GROUP STATEMENTS
AND SCHEDULES
CITY OF SANGER
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES - GENERAL FUND
For the Year Ended September 30, 1996
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
Hiways 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
Transfers In
TOTAL OTHER FINANCING
SOURCES (USES)
$ 373,807 $ 0 $ 0 $ 0
128,386 0 0 0
71333 0 0 0
380 12,452 0 0
41773 0 25,835 0
42,863 0 0 35,860
11818 0 54 0
61498 0 13,707 0
0 0 0 0
565,858 12,452 39,596 35,860
131,836 48,941 0 0
0 0 295,852 51,130
0 0 0 0
61,260 0 0 0
0 0 0 0
21596 0 18,906 11581
0 0 6,259 19,272
0 0 942 13,362
195,692 48,941 321,959 85,345
370,166
0
512, 923
512, 923
(36,489)
0
0
0
(282,363)
0
0
0
(49,485)
0
0
0
EXCESS OF REVENUES AND OTHER
SOURCES OVER EXPENDITURES $ 883,089 $ (36,489) $ (282,363) $ (49,485)
FUND BALANCE -BEGINNING
FUND BALANCE -ENDING
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 17
$ 0$ 0$ 0$ 0$ 0$ 0$
0 161,799 0 0 0 0
0 0 0 0 0 0
71136 0 0 0 0 0
219,321 0 31481 0 12,503 0
0 0 16,177 0 0 0
0 71166 0 0 0 0
0 0 0 0 0 0
0 743 0 47,680 0 0
226,457 169,708 1 %658 47,680 12,503 0
245,488 0 0 0 0 0
0 0 0 0 0 0
0 223,010 0 0 0 0
0 0 0 0 0 0
0 0 50,137 8,974 35,852 5,458
0 19,200 12,760 54,266 0 0
0 286,454 15,300 31880 0 0
0 131,507 21,517 189 0 0
245,488 660,171 99,714 67,309 35,852 5,458
(19,031) (490,463) (80,056) (19,629) (23,349)
5,458
373, 807
290,185
7, 333
19,968
265,913
94,900
9,038
20,205
48,423
1,129,772
426, 265
346,982
223,010
61,260
100,421
109,309
331,165
167,517
1,765,929
(636,157)
0 19,200 0 3,880 0 0 23,080
0 0 0 0 0 0 512,923
0 19,200 0 3,880 0 0 536,003
(100,154)
321,644
$ 221,490
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED
Page - 17
CITY OF SANGER
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES - GENERAL FUND
For the Year Ended September 30, 1996
REVENUES L BUDGET ACTUAL VARIANCE
Property Taxes $ 367,840 $ 373,807 $ 5,967
Nonproperty Taxes 105,000 128,386 239386
Penalties and Interest on
Deliquent Taxes 11,000 71333 (31667)
License and Permits 11800 380 (11420)
Fees and Services 0 41773 41773
Grants and Intergovernmental 0 42,863 42,863
Interest Income 11100 1,81.8 718
Miscellaneous Income 15,000 6,498 (81502)
Donations 0 0 0
TOTAL REVENUES 501,740 565,858 64,118
EXPENDITURES
General Government 141,712 131,836 91876
Public Safety 0 0 0
Hiways and Streets 0 0 0
Health and Welfare 20,212 61,260 (41,048)
Culture and Recreation 0 0 0
Capital Outlay 11750 21596 (846)
Debt Service:
Principal 0 0 0
Interest 0 0 0
TOTAL EXPENDITURES 163,674 195,692 (321018)
EXCESS REVENUES OVER
(UNDER) EXPENDITURES 338,066 370,166 32,100
OTHER FINANCING SOURCES (USES)
Proceeds of Capital Leases
Transfers In
TOTAL OTHER FINANCING
SOURCES (USES)
EXCESS OF REVENUES AND OTHER
SOURCES OVER EXPENDITURES
0
530,876
530,876
i
0
512,923
512, 923
410
0
(17,953)
(17,953)
$ 14,147
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 18
BUDGET ACTUAL I VARIANCE I BUDGET ACTUAL VARIANCE
$ 0$ 0$ 0$ 0$ 0$ 0
0 0 0 0 0 0
0 0 0 0 0 0
15,000 12,452 (21548) 0 0 0
0 0 0 16,000 25,835 91835
0 0 0 0 0 0
0 0 0 0 54 54
0 0 0 11,250 13,707 2,457
0 0 0 0 0 0
15,000 12,452 (21548) 27,250 39,596 12,346
44,545 48,941 (4,396) 0 0 0
0 0 0 307,905 295,852 12,053
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 11000 18,906 (17,906)
0 0 0 61259 61259 0
0 0 0 941 942 (1)
44,545 48,941 (4,396) 316,105 321,959 (51854)
(29,545) (36,489) (61944) (288,855) (282,363) 61492
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
$ (29,545) $ (36,489) $ (61944) $ (288,855) $ (282,363) $ 6,492
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 18
CITY OF SANGER
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES - GENERAL FUND
For the Year Ended September 30, 1996
REVENUES I VARIANCE
Property Taxes $ 0 $ 0 $ 0
Nonproperty Taxes 0 0 0
Penalties and Interest on
Deliquent Taxes 0 0 0
License and Permits 0 0 0
Fees and Services 0 0 0
Grants and Intergovernmental 18,000 35,860 17,860
Interest Income 0 0 0
Miscellaneous Income 0 0 0
Donations 0 0 0
TOTAL REVENUES 18,000 35,860 17,860
EXPENDITURES
General Government 0 0 0
Public Safety 48,812 51,130 (21318)
Hiways and Streets 0 0 0
Health and Welfare 0 0 0
Culture and Recreation 0 0 0
Capital Outlay 21000 11581 419
Debt Service:
Principal 19,272 19,272 0
Interest 12,928 13,362 (434)
TOTAL EXPENDITURES 83,012 85,345 (21333)
EXCESS REVENUES OVER
(UNDER) EXPENDITURES (65,012) (49,485) 15,527
OTHER FINANCING SOURCES (USES)
Proceeds of Capital Leases 0 0 0
Transfers In 0 0 0
TOTAL OTHER FINANCING
SOURCES (USES)
EXCESS OF REVENUES AND OTHER
SOURCES OVER EXPENDITURES $
0
C�7
0
(65,012) $ (49,485) $ 15,527
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 18
BUDGET ACTUAL
VARIANCE BUDGET
F7XbTUAL VARIANCE
$ 0$ 0$
0$ 0$
0$ 0
0 0
0 140,000
161,799 21,799
0 0 0 0 0 0
81000 71136 (864) 0 0 0
192,000 219,321 27,321 0 0 0
0 0 0 0 0 0
0 0 0 0 71166 71166
0 0 0 0 0 0
0 0 0 0 743 743
2001000 226,457 26,457 140,000 169,708 29,708
212,533 245,488 (32,955) 0 0 0
0 0 0 0 0 0
0 0 0 84,845 223,010 (138,165)
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 19,200 (19,200)
0 0 0 286,454 286,454 0
0 0 0 109,654 131,507 (21,853)
2121533 245,488 (32,955) 480,953 660,171 (179,218)
(12,533) (19,031) (6,498)
340,953
0
0
(490,463) (149,510)
0 0 0 0 19,200 19,200
$ (12,533) $ (19,031) $ (61498) $ (340,953) $ (471,263) $ (130,310)
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 18
CITY OF SANGER
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES - GENERAL FUND
For the Year Ended September 30, 1996
REVENUES ItsUDGE1 j I ACTUALJ I VARIANCE
Property Taxes $ 0 $ 0 $ 0
Nonproperty Taxes 0 0 0
Penalties and Interest on
Deliquent Taxes 0 0 0
License and Permits 0 0 0
Fees and Services 0 31481 31481
Grants and Intergovernmental 15,500 16,177 677
Interest Income 0 0 0
Miscellaneous Income 0 0 0
Donations 0 0 0
TOTAL REVENUES 15,500 1%658 41158
EXPENDITURES
General Government 0 0 0
Public Safety 0 0 0
Hiways and Streets 0 0 0
Health and Welfare 0 0 0
Culture and Recreation 56,612 50,137 61475
Capital Outlay 13000 12,760 (11,760)
Debt Service:
Principal 15,300 15,300 0
Interest 21,492 211517 (25)
TOTAL EXPENDITURES 94,404 99,714 (51310)
EXCESS REVENUES OVER
(UNDER) EXPENDITURES (78,904) (80,056) (1,152)
OTHER FINANCING SOURCES (USES)
Proceeds of Capital Leases 0 0 0
Transfers In 0 0 0
TOTAL OTHER FINANCING
SOURCES (USES)
EXCESS OF REVENUES AND OTHER
SOURCES OVER EXPENDITURES
C
$
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 18
BUDGET ACTUAL VARIANCE 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 11,000 12,503 11503
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 47,680 47,680 0 0 0
0 47,680 47,680 11,000 12,503 11503
0 0 0
0 0 0
0 0 0
0 0 0
19,951 81974 10,977
0 54,266 (549266)
31880 31880 0
120 189 (69)
23,951 67,309 (43,358)
(23,951) (19,629)
0 3,880
0 0
4.322
3,880
0
0 3,880 3,880
$ (23,951) $ (15,749) $ 81202 $
0 0 0
0 0 0
0 0 0
0 0 0
24,614 35,852 (11,238)
0 0 0
0 0 0
0 0 0
24,614 35,852 (11,238)
(13,614) (23,349) (91735)
0 0 0
0 0 0
0 0 0
(13,614) $ (23,349) $ (91735)
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 18
CITY OF SANGER
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES - GENERAL FUND
For the Year Ended September 30, 1996
.::.:..........:::..:.:::::::.:.::..:.......:I.:::::::::.;:..::,fit
REVENUES I BUDGET I I ACT I VARIANCE
Property Taxes $ 0 $ 0 $ 0
Nonproperty Taxes 0 0 0
Penalties and Interest on
Deliquent Taxes 0 0 0
License and Permits 0 0 0
Fees and Services 0 0 0
Grants and Intergovernmental 0 0 0
Interest Income 0 0 0
Miscellaneous Income 0 0 0
Donations 0 0 0
TOTAL REVENUES 0 0 0
EXPENDITURES
General Government 0 0 0
Public Safety 0 0 0
Hiways and Streets 0 0 0
Health and Welfare 0 0 0
Culture and Recreation 10,475 5,458 51017
Capital Outlay 0 0 0
Debt Service:
Principal 0 0 0
Interest 0 0 0
TOTAL EXPENDITURES 10,475 51458 5,017
EXCESS REVENUES OVER
(UNDER) EXPENDITURES (10,475) (51458) 5,017
OTHER FINANCING SOURCES (USES)
Proceeds of Capital Leases 0 0 0
Transfers In 0 0 0
TOTAL OTHER FINANCING
SOURCES (USES)
EXCESS OF REVENUES AND OTHER
SOURCES OVER EXPENDITURES $
FUND BALANCE -BEGINNING
FUND BALANCE -ENDING
0
0
5,017
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 18
BUDGET ACTUAL. ] VARIANCE
$ 367,840 $ 373,807 $ 5,967
245,000 290,185 45,185
111000 7,333
24,800 1 %968 (41832)
219,000 265,913 46,913
33,500 94,900 61,400
11100 99038 71938
26,250 20,205 (6,045)
0 48,423 48,423
928,490 1112%772 201,282
398,790 426,265 (27,475)
356,717 346,982 91735
84,845 223,010 (138,165)
20,212 61,260 (41,048)
111,652 100,421 11,231
51750 109,309 (103,559)
331,165 331,165 0
145,135 167,011 (22,382)
11454,266 11765,929 (311,663)
(525,776) (636,157) (110,381)
0 23,080 23,080
530,876 512,923 (17,953)
530,876 536,003 51127
$ 51100 (100,154) $ (105,254)
321,644
$ 221,490
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 18
CITY OF SANGER
STATEMENT OF GENERAL FIXED ASSETS
For the Year Ending September 30, 1996
COST
Land $ 71,870
Buildings 513,725
Equipment 714,680
Fire Equipment 330,325
Swimming Pool 220,348
Improvements 531,483
INVESTMENT IN GENERAL
FIXED ASSETS $ 21382,431
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 19
CITY OF SANGER
SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS
For the Year Ending September 30, 1995
COST BEGIN 1 ADDITIONS DELETIONS ENDIN!�a
Land $ 71,870 $ 0 $ 0 $ 71,870
Buildings 505,948 71777 0 513,725
Equipment 665,115 49,565 0 714,680
Fire Equipment 328,744 11581 0 330,325
Swimming Pool 220,348 0 0 220,348
Improvements 481,097 50,386 0 531,483
INVESTMENT IN GENERAL
FIXED ASSETS $ 2,2731122 $ 10%309 $ 0 $ 21382,431
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 20
CITY OF SANGER
SCHEDULE OF CHANGES IN PROPERTY, PLANT & EQUIPMENT
ENTERPRISE FUND
For the Year Ending September 30, 1996
BEGINNINGj I DELETI N.Sj ENDING
COST
Water System $ 1,897,677 $ 12,562 $ 0 $ 1,910,239
Sewer System 11941,411 0 0 11941,411
Electric System 11893,933 73,179 0 1,967,112
Equipment 454,355 15,663 0 470,018
Furniture & Fixtures 129,756 31107 0 132,863
Building Improvements 14,623 0 0 14,623
Easement 11500 0 0 11500
TOTAL COST $ 6,333,255 $ 104,511 $ 0 $ 6,437,766
ACCUMULATED DEPRECIATION
Water System $ 699,729 $ 68,514 $ 0 $ 768,243
Sewer System 695,360 54,075 0 749,435
Electric System 1,024,120 80,664 0 11104,784
Equipment 318,949 44,219 0 363,168
Furniture & Fixtures 118,626 31524 0 122,150
Building Improvements 10,236 11462 0 11,698
Easement 0 0 0 0
TOTAL ACCUMULATED DEPRECIATION $ 2,867,020 $ 252,458 $ 0 $ 3,119,478
NET PROPERTY, PLANT &EQUIPMENT $ 3,466,235 $ 3,318,288
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 21
CITY OF SANGER
STATEMENT OF GENERAL LONG - TERM DEBT
September 30, 1996
BOND OBLIGATIONS
Series 1994 Certificates of Obligation
CAPITAL LEASES
Associates Commercial Corp.
G.M.A.C.
Midwest Bankers
IF
Motorola
Bank One
TOTAL CAPITAL LEASE OBLIGATIONS
ACCRUED COMPENSATED ABSENCES
Accrued Vacation Pay
Accrued Sick Pay
TOTAL ACCRUED COMPENSATED ABSENCES
TOTAL TO BE PROVIDED FOR RETIREMENT
OF GENERAL LONG -TERM DEBT
$ 12,001
12,156
145,548
21,549
14.950
13,000
$ 14,000
$ 1,815,000
206,204
27,000
$ 2,048,204
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 22
CITY OF SANGER
SCHEDULE OF CHANGES IN GENERAL LONG - TERM DEBT
For the Year Ended September 30, 1996
1BEGINNING1 JADDITIONS REDUCTIONS ENDING
BOND OBLIGATIONS
Series 1994 Certificates %J Obligation $ 1,900,000 $ 0 $ 85,000 $ 1,815,000
TOTAL BOND OBLIGATIONS $ 11900,000 $ 0 $ 85,000 $ 11815,000
NOTES PAYABLE
Note Payable - Gainesville National Bank $ 205,000 $ 0 $ 205,000 $ 0
TOTAL NOTES PAYABLE $ 205,000 $ 0 $ 205,000 $ 0
CAPITAL LEASES
Associates Commercial Corp. $ 19,505 $ 0 $ 71504 $ 12,001
G.M.A.C. 17,997 0 5,841 12,156
Midwest Bankers 158,979 0 13,431 145,548
Motorola 27,808 0 61259 21,549
Bank One 0 19,200 41250 14,950
Dealers Credit
TOTAL CAPITAL LEASES
ACCRUED COMPENSATED ABSENCES
0 3,880
224,289 $ 23,080 $
Accrued Vacation Pay $ 14,000 $ 0 $
Accrued Sick Pay 12,000 21000
TOTAL ACCRUED COMPEN. ABSENCES $ 26,000 $ 21000 $
TOTAL TO BE PROVIDED FOR RETIREMENT
OF GENERAL LONG -TERM DEBT $ 2,355,289 $ 25,080 $
3,880
u
41,165 $ 206, 204
1,000 $
rel
13,000
14,000
27,000
332,165 $ 2,048,204
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 23
CITY OF SANGER
DEBT SERVICE REQUIREMENTS - GENERAL LONG-TERM DEBT
September 30, 1996
Series 1994 Certificates of Obligation
Year Ending TOTAL
September 30, PRINCIPAL INTEREST REQUIREMENTS
1997 $ 901000 $ 112,815 $ 202,815
1998 100,000 106,065 206,065
1999 105,000 98,565 203,565
2000 110,000 90,690 200,690
2001 120,000 82,440 202,440
2002 125,000 75,720 200,720
2003 135,000 68,657 203,657
2004 145,000 60,963 205,963
2005 155,000 52,625 207,625
2006 165,000 43,635 208,635
2007 175,000 33,900 208,900
2008 190,000 23,400 213,400
2009 200,000 12,000 212,000
$ 1,815,000 $ 861,475 $ 2,676,475
Capital Lease -Associates Commercial Corp.
Year Ending
September 30,
1997
1998
PRINCIPAL
Capital Lease - G.M.A.C.
Year Ending
September 30,
1997 $
1998
PRINCIPAL
5,843 $
6,313
INTEREST
491 $
INTERESTWon
$ 12,156 $ 1,006 $
TOTAL
REQUIREMENTS
8,328
4,164
12,492
TOTAL
REQUIREMENTS
6,581
6,581
13,162
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED
Page - 24
CITY OF SANGER
DEBT SERVICE REQUIREMENTS - GENERAL LONG-TERM DEBT
September 30, 1996
Capital Lease - Midwest Bankers
Year Ending TOTAL
September 30, PRINCIPAL INTEREST REQUIREMENTS
1997 $ 14,333 $ 9,772 $ 24,105
1998 15,295 81810 24,105
1999 16,322 71783 24,105
2000 17,418 6,687 24,105
2001 18,588 5,518 24,106
2002 19,835 41271 24,106
2003 21,168 21938 24,106
2004 22,589 1,517 24,106
$ 145,548 $ 47,296 $ 192,844
Capital Lease -Motorola
Year Ending TOTAL
September 30, PRINCIPAL INTEREST REQUIREMENTS
1997 $ 6,700 $ 1,519 $ 8,219
1998 7,172 1,047 8,219
1999 71677 542 81219
$ 21,549 $ 3,108 $ 24,657
Capital Lease -Bank One
Year Ending TOTAL
September 30, PRINCIPAL INTEREST REQUIREMENTS
1997 $ 41597 $ 11016 $ 51613
1998 4,973 640 5,613
1999 51380 233 51613
$ 14,950 $ 11889 $ 16,839
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 24
CITY OF SANGER
DEBT SERVICE REQUIREMENTS - GENERAL LONG-TERM DEBT
September 30, 1996
Total Bond Obligations and Notes Payable
Year Ending TOTAL
September 30, PRINCIPAL INTEREST REQUIREMENTS
1997 $ 129,370 $ 126,291 $ 255,661
1998 137,857 116,890 254,747
1999 134,379 107,123 241,502
2000 127,418 97,377 224,795
2001 138,588 87,958 226,546
2002 144,835 79,991 224,826
2003 156,168 71,595 227,763
2004 167,589 62,480 230,069
2005 155,000 52,625 207,625
2006 165,000 43,635 208,635
2007 175,000 33,900 208,900
2008 190,000 23,400 213,400
2009 200,000 12,000 212,000
$ 2,021,204 $ 915,265 $ 2,936,469
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 24
CITY OF SANGER
SCHEDULE OF CHANGES IN LONG - TERM DEBT - ENTERPRISE FUND
For the Year Ended September 30, 1996
BEGINNING] IREDUCTIONS ENDING
REVENUE BOND OBLIGATIONS
Series 1991
Series 1996
TOTAL REVENUE BONDS
CAPITAL LEASES
Kansas State Bank
Case Credit Corporation
Ford Motor Credit
Maroon Cattle Co.
TOTAL CAPITAL LEASES
TOTAL LONG -TERM DEBT
$ 2,155,000 $
0 $ 85,000 $ 2,070,000
0 1,060,000 0 1,060,000
$ 21155,000 $ 110609000 $ 85,000 $ 31130,000
16,718 0 10,312 6,406
11,469 0 8,500 2,969
14,406 0 5,292
$ 52,420 $ 0 $ 33,931 $
9,114
18,489
$ 2,207,420 $ 1,060,000 $ 118,931 $ 3,148,489
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 25
CITY OF SANGER
DEBT SERVICE REQUIREMENTS - ENTERPRISE FUND
September 30, 1996
Series 1991 Revenue Bonds
Year Ending TOTAL
September 30, PRINCIPAL INTEREST REQUIREMENTS
1997 $ 85,000 $ 138,810 $ 223,810
1998 90,000 134,050 224,050
1999 100,000 128,830 228,830
2000 105,000 122,830 227,830
2001 110,000 116,372 226,372
2002 115,000 109,498 224,498
2003 125,000 102,138 227,138
2004 130,000 93,950 223,950
2005 140,000 85,240 225,240
2006 150,000 75,720 225,720
2007 160,000 655370 225,370
2008 170,000 54,170 224,170
2009 185,000 42,186 227,186
2010 195,000 28,958 223,958
2011 210,000 15,014 225,014
$ 21070,000 $ 11313,136 $ 31383,136
Series 1996 Revenue Bonds
Year Ending TOTAL
September 30, PRINCIPAL INTEREST REQUIREMENTS
1997 $ 20,000 $ 49,275 $ 69,275
1998 35,000 44,452 79,452
1999 35,000 43,368 78,368
2000 35,000 42,212 77,212
2001 40,000 41,005 81,005
2002 402000 39,585 7%585
2003 45,000 38,105 83,105
2004 45,000 36,395 81,395
2005 45,000 34,640 79,640
2006 50,000 32,840 82,840
2007 50,000 30,790 80,790
2008 55,000 28,690 83,690
2009 60,000 26,297 86,297
2010 60,000 23,628 83,628
2011 65,000 20,898 85,898
2012 70,000 17,908 87,908
2013 70,000 14,652 84,652
2014 75,000 11,363 86,363
2015 80,000 71837 87,837
2016 85,000 41037 89,037
$ 11060,000 $ 587,977 $ 11647,977
'' SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 26
CITY OF SANGER
DEBT SERVICE REQUIREMENTS - ENTERPRISE FUND
September 30, 1996
Capital Lease - Case Credit Corporation
Year Ending TOTAL
September 30, PRINCIPAL INTEREST REQUIREMENTS
1997 $ 61406 $ 172 $ 61578
Capital Lease -Ford Motor Credit
Year Ending
September 30,
1997 $
172 $ 6,578
PRINCIPAL INTEREST
21969 $ 42 $
Capital Lease -Maroon Cattle Company
Year Ending
September 30,
1997
1998
PRINCIPAL
3,467
42 $
INTEREST
426 $
76
TOTAL
REQUIREMENTS
3,011
3, 011
TOTAL
REQUIREMENTS
6,073
3,543
9,616
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED
Page - 26
CITY OF SANGER
DEBT SERVICE REQUIREMENTS - ENTERPRISE FUND
September30, levy
TOTAL ALL!
Year Ending TOTAL
September 30, PRINCIPAL INTEREST REQUIREMENTS
1997 120,022 188,725 308,747
1998 128,467 178,578 307,045
1999 135,000 172,198 307,198
2000 140,000 165,042 305,042
2001 150,000 157,377 307,377
2002 155,000 149,083 304,083
2003 170,000 140,243 310,243
2004 175,000 130,345 305,345
2005 185,000 119,880 304,880
2006 200,000 10.8,560 308,560
2007 210,000 96,160 306,160
2008 225,000 82,860 307,860
2009 245,000 68,483 313,483
2010 255,000 52,586 307,586
2011 275,000 35,912 310,912
2012 70,000 17,908 87,908
2013 70,000 14,652 84,652
2014 75,000 11$63 86,363
2015 80,000 7,837 872837
2016 85,000 41037 89,037
$ 31148,489 $ 11901,829 $ 51050,318
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 26
SUPPLEMENTAL INFORMATION
CITY OF SANGER
GOVERNMENTAL AND PROPRIETARY FUNDS
SCHEDULE OF RESTRICTED CASH
September 3q 1996
GENERAL FUND
Police Department Funds
Library Department Book Fund
Park Departmnet Fund
Hotel/Motel Fund
Certificate of Obligation Reserve and I & S Funds
Unspent 1994 Certificate of Obligation Funds
TOTAL GENERAL FUND
ENTERPRISE FUND
Revenue Bond I & S Funds
Revenue Bond Reserve Funds
Customer Utility Deposits
Unspent 1996 Revenue Bond Funds
TOTAL ENTERPRISE FUND
$ 4,296
35
7, 897
18,664
39,719
$ 189,380
$ 6,911
245,718
999,634
$ 1,334,351
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 27
CITY OF SANGER
GOVERNMENTAL AND PROPRIETARY FUNDS
SCHEDULE OF RESERVED FUND EQUITIES
September 30, 1996
GENERALFUND
Police Department Fund
Library Department Book Fund
Park Departmnet Fund
Hotel/Motel Fund
Minimum Required Reserves, Interest and
Sinking Funds - 1994 Certificate of Obligation
Unspent 1994 Bond Proceeds
Prepaid Expenses
TOTAL GENERAL FUND
ENTERPRISE FUND
Minimum Required Reserves, Interest and
Sinking Funds -Revenue Bonds
TOTAL ENTERPRISE FUND
$ 4,296
35
7,897
18,664
38,000
118,769
1.717
$ 189,378
311,095
$ 311,095
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 28
CITY OF SANGER
SCHEDULE OF INSURANCE COVERAGE
September 30, 1996
,i
AMOUNT OF
TYPE OF COVERAGE FROM TO COVERAGE F CARRIER
Business Auto.
Liability 10/1/95 10/1/96 31000,000 Texas Municipal League
Physical Damage 10/1/95 10/1/96 Scheduled Equip. Texas Municipal League
454,182
Property Damage 10/1/95 10/1/ 96 Schedule
d Equip.
iP Texas Municipal League
ue
2,805,848
Workmen's Compensation 10/1/95 10/1/96 Statutory Texas Municipal League
Liability -
Law Enforcement Liability 10/1/95 10/1/96 11000,000 Texas Municipal League
Errors & Omissions 10/1/95 10/1/96 1,000,000 Texas Municipal League
General Liability 10/1/95 10/1/96 3,0001000 Texas Municipal League
Mobile Equipment 10/1/95 10/1/96 203,434 Texas Municipal League
Employee Bond 6/24/96 6/24/97 10,000 Western Surety
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 29
CLASSIFICATION OF CUSTOMERS
Residential
Commercial, Demand & City
NUMBER OF CONNECTIONS
CITY OF SANGER
PROPRIETARY FUND
SUPPLEMENTAL INFORMATION
September so, , ou
i54"r��l
1, 624
RESIDENTIAL
WATER RATES & COMMERCIAL
Deposit $ 25.00
First 1,000 Gallons (minimum) $ 14.25
1,000 TO 5,000 Gallons $ 1.85
5,000 TO 15,000 Gallons $ 2.05
15,000 TO 30,000 Gallons $ 2.45
Over 30,000 Gallons $ 3.25
SEWER RATES
First 1,000 Gallons (minimum)
Over 1,000 Gallons
Maximum
ELECTRIC RATES
Deposit
Facility Charge
Energy Charge
Demand Charge.
First 6 KWH (minimum)
Over 6KWH
RESIDENTIAL
ELECTRIC
1,327
271
COMMERCIAL
$ 15.00 $ 21.00
$ 1.00 $ 1.00
$ 25.00 $ 125.00
RESIDENTIAL
SMALL
COMMERCIAL
100.00 $
SEWER
LARGE
COMMERCIAL
100.00
$ 10.00/Month $ 12.50/Month $ --
$ .0621629/kwh $ .0676962/kwh $ 237048/KWH
$ -- $ -- $ 53.39
$ -- $ -- $ 8.29/kwh
GALLONS OF WATER METERED (APPROX.)
139,741,490
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 30
CITY OF SANGER
ANALYSIS OF TAXES RECEIVABLE
For the Year Ended September 30, 1996
Original Tax Roll
Adjustments to Original Tax Roll
ADJUSTED TAX ROLL
Less: Collections and Adjustments
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
1995
$ 373,477 $ 3451228
51525 13,216
379,002 358,444
363,109 345,530
15,893 12,914
47,489 42,511
$ 63,382 $ 55,425
$ 78,240,705 $ 75,541,218
$ 0.4837 $ 0.4745
95.81 %
96.40%
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED Page - 31
SporeWilliam C. •" •
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL STRUCTURE BASED ON AN
AUDIT OF GENERAL PURPOSE OR BASIC FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the City Council
City of Sanger, Texas
We have audited the general purpose financial
of Sanger, Texas as of September 30, 1996,
ended, and have issued our report thereon dated
We conducted our audit
standards, Government
General of the United
plan and perform the
statements of the City
and for the year then
February 6, 19970
whether the general purp
accepted auditing
y the Comptroller
require that we
assurance about
free of material
The management of the City of Sanger, Texas, is responsible for
establishing and maintaining an internal control structure. In
fulfilling this responsibility, estimates and judgments by management
are required to assess the expected benefits and related costs of
internal control structure policies and procedures. The objectives of
an internal control structure are to provide management with
reasonable, but not absolute, assurance that assets are safeguarded
against loss from unauthorized use or disposition, and that
transactions are executed in accordance with management's
authorization and recorded properly to permit the preparation of
financial statements in accordance with generally accepted accounting
principles. Because of inherent limitations in any internal control
structure, errors or irregularities may nevertheless occur and not be
detected. Also, projection of any evaluation of the structure to
future periods is subject to the risk that procedures may become
inadequate because of changes in conditions or that the effectiveness
of the design and operation of policies and procedures may
deteriorate.
In planning and performing our audit of the general purpose financial
statements of the City of Sanger, Texas, for the year ended
September 30, 1996, we obtained an understanding of the internal
control structure. With respect to the internal control structure, we
obtained an understanding of the design of relevant policies and
procedures, and whether they have been placed in operation, and we
�600 Airport Freeway, Suite 208 # Bedford, � 76022 # 817/545-7725
Page - 2
assessed control risk in order to determine our auditing procedures
for the purpose of expressing an opinion on the general purpose
financial statements and not to provide an opinion on the internal
control structure. Accordingly, we do not express such an opinion.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure
that might be material weaknesses under standards established by the
American Institute of Certified Public Accountants. A material
weakness is a reportable condition in which the design or operation of
one or more of the internal control structure elements does not reduce
to a relatively low level the risk that errors or irregularities in
amounts that would be material in relation to the general purpose
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 structure and its operation that we consider to be material
weaknesses as defined above.
However, we noted certain
structure and its operation
the City of Sanger, Texas in
matters involving the internal control
that we have reported to the management of
a separate letter dated February 6, 1997.
This report is intended for the information of the
Honorable Mayor and City Council of the City of Sanger,
Department of Housing and Urban Development and the Texas
of Housing and Community Affairs. However, this report
of public record and its distribution is not limited,
William C. Spore .. P.C.
PublicCertified
February 6, 1997
management,
Texas, the
Department
is a matter
Williamr Company,
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE BASED ON AN AUDIT OF
GENERAL PURPOSE OR BASIC FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
To the City Council
City of Sanger, Texas
We have audited the general purpose financial statements of the
City of Sanger, Texas as of September 30, 1996, and for the year
then ended, and have issued our report thereon dated February 6,
1997.
We conducted our audit in accordance with generally accepted
auditing standards, Government Auditing Standards, issued by the
Comptroller General of the United States, and the provisions of
Office of Management and Budget Circular A-128, "Audits of State
and Local Governments". Those standards and OMB Circular A-128
require that we plan and perform the audit to obtain reasonable
assurance about whether the general purpose financial statements
are free of material misstatement.
Compliance with laws, regulations, contracts, and grants applicable
to the City of Sanger, Texas, is the responsibility of City of
Sanger management. As part of obtaining reasonable assurance about
whether the general purpose financial statements are free of
material misstatement, we performed tests of the City's compliance
with certain provisions of laws, regulations, contracts, and
grants. However, the objective of our audit of the general purpose
financial statements was not to provide an opinion on overall
compliance with such provisions. Accordingly, we do not express
such an opinion.
The results of our tests indicate that, with respect to the items
tested, the City of Sanger, Texas, complied, in all material
respects, with the provisions referred to in the preceding
paragraph. With respect to items not tested, nothing came to our
attention that caused us to believe that the City had not complied,
in all material respects, with those provisions.
This report is intended for the information of the management,
Honorable Mayor and City Council of the City of Sanger, Texas, the
Department of Housing and Urban Development and the Texas
Department of Housing and Community Affairs. However, this report
is a matter of public record and its distribution is not limited.
February 6, 1997
�600 Airport Freeway, Suite 208 # Bedford, 76022 # 817/545-7725
SporeWilliam C. • •
Certified Public Accountants
To the Honorable Mayor and 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, 1996, 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 structure.
However, we noted certain matters involving the internal control
structure and its operation that we consider to be reportable
conditions under the standards established by the American
Institute of Certified Public Accountants. Reportable conditions
involve matters coming to our attention relating to significant
deficiencies in the design or operation of the internal control
structure that, in our judgment, could adversely affect the City's
ability to record, process, summarize, and report financial data
consistent with the assertions of management in the financial
statements.
These reportable conditions are as follows with suggestions for
system improvements.
(1) All accounts payable vouchers should be approved by the
department that is responsible for the respective department being
charged with the expense. Several paid vouchers were found that
were not approved by any department head.
(2) Utility billing credit memo's currently are being prepared by
and approved by the utility billing clerk. These credit memo's
should be approved by someone outside of the data processing
department, preferably by the department head for the department
effected by the credit memo.
(3) The City's computer system and software are several years old
and finding support personnel for the software is becoming more of
a problem each year. The Utility billing system requires several
manual steps that could easily be completed by the computer system
and the billings, payroll and general ledger packages are not
I
nterfaced which adds more manual steps to the system.
The City also still has
billing cash receipts
computerized at all.
several accounting functions; non utility
and tax collections, that are not
�600 Airport Freeway, Suite 208 # Bedford, � 76022 # 817/545-7725
The City should give consideration to upgrading the computer system
to a system that is more efficient and would better serve the
City's accounting needs in the future.
A material weakness is a
or operation of one or
elements does not reduce
errors or irregularities
relation to the financial
not be detected within a
course of performing their
reportable condition in which the design
more of the internal control structure
to relatively low level the risk that
in amounts that would be material in
statements being audited may occur and
timely period by employees in the normal
assigned duties.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure
that might be reportable conditions and, accordingly, would
necessarily disclose all reportable conditions that are also
considered to be material weaknesses as defined above. However,
none of the reportable conditions described above is believed to be
a material weakness.
This report is intended solely for
management, Mayor and City Council
Thank you,
William C. Spore & Company, P.C.
Certified Public Accountant
February 6, 1997
the information and use of the
of the City of Sanger, Texas.
Page - 2
REPORTS AND SCHEDULES
RELATED TO SINGLE AUDIT
SporeCompany, •�.
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT ON SCHEDULE OF FEDERAL
FINANCIAL ASSISTANCE
To the City Council
City of Sanger, Texas
We have audited the general purpose financial statements of the
City of Sanger, Texas, as of and for the year ended September 30,
1996, and have issued our report thereon dated February 6, 1997.
These general purpose financial statements are the responsibility
of City of Sanger, Texas, management. Our responsibility is to
express an opinion on these general purpose financial statements
based upon our audit.
We conducted our audit in accordance with generally accepted
auditing standards, Government Auditing Standards, issued by the
Comptroller General of the United States, and the provisions of
Office of Management and Budget Circular A-128, "Audits of State
and Local Governments". Those standards and OMB Circular A-128
require that we plan and perform the audit to obtain reasonable
assurance about whether the general purpose financial statements
are free of material misstatement. An.audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in
the general purpose 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.
Our audit was conducted for the purpose of forming an opinion on
the general purpose financial statements of the City of Sanger,
Texas, taken as a whole. The accompanying schedule of federal
financial assistance is presented for purposes of additional
analysis and is not a required part of the general purpose
financial statement. The information in that schedule 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.
February 6, 1997
FEDERAL GRANTOR/
PASSTHROUGH GRANTOR/
PROGRAM TITLE
CITY OF SANGER
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
For the Year Ended September 30, 1996
CASH OR CASH OR
BUDGETED DEFERRED DEFERRED
FEDERAL GRANT PROGRAM MATCHING REVENUE RECEIPTS OR REVENUE
CFDA I.D. OR AWARD CONTRIBU- OCT. 1, REVENUE EXPENDI- SEPT. 30,
NUMBER NUMBER AMOUNT TIONS 1995 RECOGNIZED TURES 1996
U.S. DEPARTMENT OF HOUSING &URBAN DEVELOPMENT
Passed Through the Texas
Department of Community Affairs
Community Development
Block Grant 14.228 715739 201,478 $ 303222 $ 0 $ 81778 30,125 0
Home Grant 14.239 533263 208,000 122,800 0 42,863 46,103 0
Home Grant 14.239 534221 1823000 21000 0 0 0 0
TOTAL FEDERAL ASSISTANCE
$ 591,478 $ 155,022 $ 0 $ 51,641 76,228 0
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED
CITY OF SANGER
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the Year Ended September 30, 1996
CURRENT YEAR FINDINGS:
DEPARTMENT OF HOUSING &URBAN DEVELOPMENT:
1. Community Development Block Grant #715739, Grant period ending September 30, 1996.
Statement of Condition: Local matching engineering fees were paid but not included in
Quarterly Progress Reports.
Amount of questioned cost 6 887
Criteria: Local matching expenditures were not reported on quarterly financial reports.
Effect of Condition: Grant expenditures were understated on financial reports related to the
grant.
Cause of Condition: City's staff relied upon the grant administrators to prepare the financial
reports; grant administrators failed to include the expenditures in the financial reports. Some of
the expenditures were incorrectly classified in the City's general ledger and not included in the
grant expenditure expense account. Grant administrators approved the payment of the invoices,
but failed to track the expenditures properly for inclusion in the financial reports.
Recommendation: The City's staff should perform a better review of the financial reports prior
to signing the reports and question the grant administrator for any uncertain amounts included on
the financial reports.. Grant disbursements should be tracked in a separate grant expense account
in the general ledger. The City's staff should encourage the grant administer to update the files
related to local matching funds.
Response: Procedures will be but in place to verify the accuracy of future reports. The grant
administrator will be made aware of the problems and asked to correct the understatements on
future reports and to update all files related to the grant on a quarterly basis.
There were no questioned costs for the period ending September 30, 1995,
There were no management letter considerations for the fiscal year ending September 30, 1995
related to the Community Development Block Grant.
r
WilliamC.i, Company,
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT ON THE INTERNAL CONTROL STRUCTURE USED
IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
To the City Council
City of Sanger, Texas
We have audited the general purpose financial statements of the
City of Sanger, Texas as of September 30, 1996, and for the year
then ended, and have issued our report thereon dated February 6,
1997.
We conducted our audit in accordance with generally accepted
auditing standards, Government Auditing Standards, issued by the
Comptroller General of the United States, and the provisions of
Office of Management and Budget Circular A-128, "Audits of State
and Local Governments". Those standards and OMB Circular A-128
require that we plan and perform the audit to obtain reasonable
assurance about whether the general purpose financial statements
are free of material misstatement.
In planning and performing our audit for the year ended September
30, 1996, we considered the internal control structure of the City
of Sanger, Texas in order to determine our auditing procedures for
the purpose of expressing our opinion on the City of Sanger Texas's
general purpose financial statements and to report on the internal
control structure in accordance with OMB Circular A-128. This
report addresses our consideration of internal control structure
policies and procedures relevant to compliance with requirements
applicable to federal financial assistance programs. We have
addressed internal control structure policies and procedures
relevant to our audit of the general purpose financial statements
in a separate report dated February 6, 1997.
The management ,of the City of Sanger, Texas, is responsible for
establishing and maintaining an internal control structure. In
fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related
costs of internal control structure policies and procedures. The
objectives of an internal control structure are to provide
management with reasonable, but not absolute, assurance that assets
are safeguarded against loss from unauthorized use or disposition,
and that transactions are executed in accordance with management's
authorization and recorded properly to permit the preparation of
financial statements in accordance with generally accepted
accounting principles and that federal financial assistance
1600 Airpor% Freeway, Suiie 208 # �ed,�ord, � 76022 # 817/545-7725
Page - 2
programs are managed in compliance with applicable laws and
regulations. Because of inherent limitations in any internal
control structure, errors, irregularities or instances of
noncompliance may nevertheless occur and not be detected. Also,
projection of any evaluation of the structure to future periods is
subject to the risk that procedures may become inadequate because
of changes in conditions or that the effectiveness of the design
and operation of policies and procedures may deteriorate.
For the purposes of this report, we have classified the significant
internal control structure policies and procedures used in
administering federal financial assistance programs in the
following categories.
A: Cycles of activity Co Accounting applications
1. Revenues/receipts 1. Billings
2. Purchases/disbursements 2. Receivables
3. Payroll/Personnel 3. Cash receipts
B: Financial statement captions 4. Purchasing
1. Cash 5. Accounts disbursements
2. Receivables 6. Payroll
3. Property and Equipment 7. Property & equipment
4. Payables and accrued liabilities 8. General ledger
5. Debt D: Controls used in
6. Fund balance administering Compliance
with Laws and Regulations
1. General Controls
2. Specific Controls
3. Claims for advances and
reimbursements
4. Amounts claimed or used
for matching
For all of the internal control
we obtained an understanding of
tttegorilisted b
e
During the year ending September 30, 1996, the City of Sanger,
Texas, had no major federal financial assistance programs and
expended 100% of its total federal financial assistance under the
following nonmajor federal financial assistance programs.
Texas Department of Housing and Community Affairs
We performed tests of controls, as required by OMB Circular A-128
to evaluate the effectiveness of the design and operation of
internal control structure policies and procedures that we
considered relevant to preventing or detecting material
noncompliance with specific requirements, general requirements, and
requirements governing claims for advances, and reimbursements and
amounts claimed or used for matching that are applicable to the
aforementioned nonmajor programs. Our procedures were less in
scope than would be necessary to render an opinion on these
Page - 3
I
nternal control structure policies and procedures. Accordingly,
we do not express such an opinion.
Our consideration of the internal control structure policies and
procedures used in administering federal financial assistance
would not necessarily disclose all matters in the internal control
structure that might constitute material weaknesses under standards
established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the
design or operation of one or more of the internal control
structure elements does not reduce to a relatively low level the
risk that noncompliance with laws and regulations that would be
material to a federal financial assistance program 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 structure and its operation that we
consider to be material weaknesses as defined above.
However, we noted
control structure
management of the
February 6, 19970
certain other matters
and its operation that
City of Sanger in a
involving the internal
we have reported to the
separate letter dated
This report is intended for the information of the
Honorable Mayor and City Council of the City of Sanger,
Department of Housing and Urban Development, and
Department of Housing and Community Affairs. However,
is a matter of public record and its distribution in not
qilliam C. SporeCompany,
-. Public Accountants
February 6, 1997
management,
Texas, The
the Texas
this report
limited.
William C. Spore r
Company, PC.
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH THE
GENERAL REQUIREMENTS APPLICABLE TO FEDERAL
FINANCIAL ASSISTANCE PROGRAMS
To the City Council
City of Sanger, Texas
We have audited the general purpose financial statements of
the City of Sanger, Texas, as of and for the year ended
September 30, 1996, and have issued our report thereon dated
February 6, 1997.
We have applied procedures to test the City of Sanger,
Texas's compliance with the following requirements
applicable to its federal financial assistance programs,
Political Activity, Civil Rights, Cash management, Federal
Financial reports, Drug -free Workplace Act, and
administrative requirements.
Our procedures were limited to the applicable procedures
described in the Office of Management and Budget's
'Compliance Supplement for Single Audits of State and Local
Governments." Our procedures were substantially less in
scope than an audit, the objective of which is the
expression of an opinion on the City of Sanger, Texas's
compliance with the requirements listed in the preceding
paragraph. Accordingly, we do not express such an opinion.
With respect to items tested, the results of those
procedures disclosed no material instances of noncompliance
with the requirements listed in the second paragraph of this
report. With respect to items not tested, nothing came to
our attention that caused us to believe that the. City of
Sanger, Texas, had not complied, in all material respects,
with those requirements. Also the results of our procedures
did not disclose any immaterial instances of noncompliance
with those requirements.
This report is intended for the information of the
management, Honorable Mayor and City Council of the City of
Sanger, Texas, the Department of Housing and Urban
Development and the Texas Department of Housing and
Community Affairs. However, this report is a matter of
public record and its distribution is not limited.
4/4&
.
.
William C. Spore & Company, P.C.
February 6, 1997
i600 Airport Freeway, Suite 208 # Bedford, � 76022 # 817/545-7725
William C. Spore & Company,
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH
SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL
ASSISTANCE PROGRAM TRANSACTIONS
To the City Council
City of Sanger, Texas
We have audited the general purpose financial statements of the
City of Sanger, Texas, as of and for the year ended September 30,
1996, and have issued our report thereon dated, February 6, 1997.
In connection with our audit of the general purpose financial
statements of the City of Sanger, Texas as of September 30, 1996,
and with our consideration of the City of Sanger, Texas, Is
control structure used to administer federal financial assistance
programs, as required by Office of Management and Budget Circular
%-128, "Audits of State and Local Governments", we selected
certain transactions applicable to nonmajor federal financial
assistance programs for the year ended September 30, 1996. As
required by OMB Circular A-128, we have performed auditing
procedures to test compliance with the requirements governing
types of services allowed or unallowed; matching; and reporting
that are applicable to those transactions. Our procedures were
substantially less in scope than an audit, the objective of which
is to express an opinion on City of Sanger, Texas, compliance
with these requirements. Accordingly, we do not express such an
opinion.
With respect to items tested, the results of those procedures
disclosed no material instances of noncompliance with the
requirements listed in the preceding paragraph. With respect to
items not tested, nothing came to our attention that caused us to
believe that City of Sanger, Texas, had not complied, in all
material respects, with those requirements. Also, the results of
our procedures did not disclose any immaterial in of
noncompliance with those requirements.
This report is intended for the information of the management,
Honorable Mayor and City Council of the City of Sanger, Texas,
the Department of Housing and Urban Development and the Texas
Department of Housing and Community Affairs. However, this
report is a matter of public record and its distribution is not
limited.
William C. Spore
Certified Public
February 6, 1997
P.C.& Company,
Accountants
1600 Airport greeway, Suite 208 # Bedford, � 76022 # 817/545-7725
RECEIPTS:
Federal/State
Local
TOTAL RECEIPTS
EXPENDITURES:
FEDERAUSTATE
Facilities
Engineering
Administration
LOCAL
Facilities
Engineering
Administration
TOTAL EXPENDITURES
EXCESS REVENUES OVER
EXPENDITURES
CITY OF BANGER
COMMUNITY DEVELOPMENT BLOCK GRANT #715739
TEXAS DEPARTMENT OF HOUSING & COMMUNITY AFFAIRS
SCHEDULE OF GRANT RECEIPTS & EXPENDITURES
For the Year Ending September 30, 1996
FEDERAL/ PRIOR
STATE LOCAL YEARS TOTAL
1T/11TII�
-- 21,347 0 21,347 307222 (81875)
81778 21,347 0 30,125 231,700 (201,575)
0 -- 0 0 192,700 (1927700)
8,778 -- 0 8,778 8,778 0
0 -- 0 0 0 0
-- 71847 0 7,847 10,222 (21375)
-- 13,500 0 13,500 20,000 (61500)
8,778 21,347 0 30,125 231,700 (201,575)
$ 0$ 0$ 0$ 0$ 0$ 0
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED
RECEIPTS:
Federal/State
Local
TOTAL RECEIPTS
EXPENDITURES:
FEDERAL/STATE
Owner Occupied Rehab/Reconst.
First Time Home Buyer
Administration
LOCAL
Owner Occupied Rehab/Reconst.
First Time Home Buyer
Administration
TOTAL EXPENDITURES
EXCESS REVENUES OVER
EXPENDITURES
CITY OF SANGER
HOME PROGRAM GRANT #533263
TEXAS DEPARTMENT OF HOUSING & COMMUNITY AFFAIRS
SCHEDULE OF GRANT RECEIPTS & EXPENDITURES
For the Year Ending September 30, 1996
FEDERAL/ PRIOR
STATE LOCAL YEARS TOTAL
-- 3,240
427863 31240
BUDGET VARIANCE
47,063 $ 208,000 (160,937)
3,240 122,800 (119,560)
50,303 330,800 (280,497)
42,863 -- 0 42,863 148,000 (105,137)
0 -- 0 0 52,000 (52,000)
0 -- 41200 41200 81000 (31800)
-- 0 0 0 90,600 (90,600)
-- 0 0 0 30,200 (30,200)
-- 31240 0 31240 21000 11240
421863 31240 41200 507303 330,800 (280,497)
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED
0
RECEIPTS:
Federal/State
Local
TOTAL RECEIPTS
EXPENDITURES:
FEDERAUSTATE
Owner Occupied Rehab/Reconst.
Administration
LOCAL
Owner Occupied Rehab/Reconst.
Administration
TOTAL EXPENDITURES
EXCESS REVENUES OVER
EXPENDITURES
CITY OF SANGER
HOME PROGRAM GRANT #534221
TEXAS DEPARTMENT OF HOUSING & COMMUNITY AFFAIRS
SCHEDULE OF GRANT RECEIPTS & EXPENDITURES
For the Year Ending September 30, 1996
FEDERAL/ PRIOR
STATE LOCAL YEARS TOTAL BUDGET
VARIANCE
-- 0 0 0 21000 (21000)
0 0 0 0 184,000 (184,000)
0 -- 0 0 175,000 (175,000)
0 -- 0 0 71000 (71000)
-- 0 0 0 0 0
-- 0 0 0 21000 (21000)
0 0 0 0 184,000 (184,000)
$ 0$ 0$ 0$ 0$ 0$ 0
SEE ACCOUNTANT'S REPORT AND NOTES ATTACHED