Annual Report of Certain Financial and Local Debt Information Fiscal Year Ended September 30, 2017

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1 Annual Report of Certain Financial and Local Debt Information Fiscal Year Ended September 30, 2017 Denotes Required Information Pursuant to Local Government Code, Section This report was posted on the City s website on April 5, 2018

2 Overview of Certain Financial/Bond Ratings Credit Ratings: The City of Friendswood, Texas (the City ) maintains independent ratings from certain nationally recognized credit rating agencies, such as S&P Global Ratings that evaluates the City s financial strength and its ability to pay its existing bonds. The current credit ratings for the City are displayed below: Bond Credit Ratings General Obligation Debt Waterworks and Sewer System Revenue Debt S&P AA+ AA- S&P Global Ratings: Defines the credit rating of the City as: Havingaverystrongcapacitytomeet its financial commitments. It differs from the highest-rating only to a small degree. For comparison purposes, S&P Global Ratings assigns a credit rating of AA to the United States of America and a BBB+ rating to Citigroup, Bank of America and Goldman. 1

3 Overview of Historical Bond Elections The following summarizes the City s General Obligation bond programs approved by voters over the last 14 years: Election Date Purpose Population Election Amount Dollar Amount Remaining To Be Issued February 1, 2003 Public Safety Facilities 33,800 $7,380,000 February 1, 2003 Drainage Improvements 33,800 $5,575,000 February 1, 2003 Street and Thoroughfares 33,800 $4,055,000 February 1, 2003 Centennial Park 33,800 $3,075,000 November 5, 2013 Fire Stations 38,911 $6,565,000 November 5, 2013 Library 38,911 $2,525,000 November 5, 2013 Park Improvements 38,911 $7,285,000 November 5, 2013 Road 38,911 $7,710,000 Total Dollar Amount Of Authorized But Unissued Bonds - As of September 30, 2017: Source: Texas Bond Review Board, U.S. Census Bureau, City s Audited Financial Statements and City records. 2

4 Historical Population 60,000 50,000 Over the last 5 years, the number of residents within the City has increased by 2,731 or an increase of 7.22%. Population 40,000 30,000 37,839 38,369 38,911 39,458 39,767 40,570 20,000 10,000 0 Source: City Audited Financial Statements and City records. 3

5 Full-Time Equivalent Personnel Full-Time Equivalent Personnel Over the last 5 years, the City s full-time equivalent personnel has increase by General Government Public Safety Public Works Community Development/Services Source: City s Audited Financial Statements. 4

6 Full-Time Equivalent Personnel Per Capita Full-Time Equivalent Personnel Per Capita For year 2016/17, the City employed full-time equivalent personnel per capita General Government Public Safety Public Works Community Development/Services Source: City s Audited Financial Statements. Totals may differ due to rounding. 5

7 Historical Tax Rates Over the last 5 years, the City s total tax rate has decreased by 4.42 cents. Property Tax Rate Per $100 Valuation Maintenance & Operations Tax Rate Interest & Sinking Fund Tax Rate Source: City s Audited Financial Statements and City records. 6

8 Historical Total Property Taxes For Various Appraised Home Values $1,600 $1,400 $1,200 $1,416 $1,433 $1,419 $1,419 $1,365 $1,310 Annual Property Taxes $1,000 $800 $600 $944 $955 $946 $946 $910 $874 $400 $472 $478 $473 $473 $455 $437 $200 $100,000 Appraised Home Value $200,000 Appraised Home Value $300,000 Appraised Home Value Note: Taxes are net of the 20% local optional homestead exemption. 7

9 Composition of Total Assessed Valuation Year 2016/17 For year 2016/17, Single-Family Residential properties comprised 87.5% of the City s total assessed valuation and other property categories comprised 12.5%. Single-Family Residential 87.5% Multi-Family Residential 1.9% Vacant Lots, Acreage, Farm & Ranch Improvements 2.3% Oil, Gas & Minerals 0.1% Business, Commercial, Industrial, Utilities, Other 8.2% Source: Texas Comptroller. 8

10 Historical Taxable Assessed Valuation and Taxable Value Per Capita $3.5 Billion $90,000 Taxable Assessed Valuation $3.0 Billion $2.5 Billion $2.0 Billion $1.5 Billion $1.0 Billion TheCity staxablevaluepercapita has increased from $63,444 to $78,600 over the last 5 years. $2,400,656,561 $63,444 $2,449,087,856 $63,830 $2,518,174,923 $64,716 $2,646,373,084 $67,068 $2,934,042,580 $73,781 $3,188,810,033 $78,600 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 Taxable Value Per Capita $500 Mil $20,000 Taxable Assessed Valuation Taxable Value Per Capita $10,000 Source: Texas Comptroller and City s Audited Financial Statements. 9

11 Governmental Funds* Revenues By Source $35 Mil $30,715,487 $30 Mil $25 Mil $20 Mil $23,396,645 $1,077,890 $1,650,703 $1,037,880 $24,283,774 $918,641 $1,861,905 $939,380 $25,886,143 $1,791,451 $1,898,908 $860,257 $28,799,022 $26,952,997 $3,536,980 $664,427 $1,881,404 $1,841,168 $873,872 $907,557 $1,763,974 $2,418,197 $1,023,556 Revenues $15 Mil $10 Mil $19,630,172 $20,563,848 $21,335,527 $22,513,317 $23,533,294 $25,509,760 $5 Mil Taxes (a) Fines and Forfeitures Permits and Fees/Other Revenues Intergovernmental (a) Includes Property, Sales and Alcohol Taxes and Franchise Taxes collected by the City. *Excludes the Capital Projects and Bond Construction Funds. Source: City s Audited Financial Statements and City records. 10

12 Governmental Funds* Revenues Per Capita Revenues Per Capita $800 $700 $600 $500 $400 $300 $618 $28 $44 $27 $633 $665 $24 $46 $49 $49 $24 $22 $519 $536 $548 $730 $90 $47 $23 $571 $678 $17 $47 $22 $592 $757 $43 $60 $25 $629 $200 $100 Taxes (a) Fines and Forfeitures Permits and Fees/Other Revenues Intergovernmental (a) Includes Property, Sales and Alcohol Taxes and Franchise Taxes collected by the City. *Excludes the Capital Projects and Bond Construction Funds. Source: City s Audited Financial Statements and City records. Totals may differ due to rounding. 11

13 Governmental Funds* Expenditures By Source $35 Mil $31,885,724 Expenditures $30 Mil $25 Mil $20 Mil $15 Mil $10 Mil $25,588,650 $25,798,874 $24,880,774 $2,461,797 $2,434,805 $2,331,410 $1,787,219 $912,984 $1,998,272 $1,004,303 $1,002,801 $1,083,043 $2,622,970 $2,675,813 $2,772,072 $1,520,401 $1,207,264 $1,092,982 $1,702,119 $2,204,176 $1,689,987 $10,201,010 $10,234,811 $10,599,575 $29,398,008 $28,413,895 $2,049,163 $2,422,723 $3,710,343 $2,267,627 $1,036,843 $1,096,614 $2,917,857 $3,032,979 $925,947 $954,103 $2,066,349 $2,118,572 $11,348,346 $12,135,956 $2,888,684 $1,703,809 $1,172,245 $3,339,864 $893,663 $2,160,152 $14,751,381 $5 Mil $5,343,160 $4,288,831 $4,208,120 $4,231,533 $4,385,321 $4,975,926 General Government Public Safety Public Works Community Development Community Services Library Capital Outlay Debt Service *Excludes the Capital Projects and Bond Construction Funds. Source: City s Audited Financial Statements and City records. 12

14 Governmental Funds* Expenditures Per Capita $900 Expenditures Per Capita $800 $700 $600 $500 $400 $300 $200 $676 $648 $663 $65 $63 $60 $47 $24 $51 $27 $26 $28 $69 $70 $71 $40 $31 $28 $45 $57 $43 $270 $267 $272 $745 $715 $52 $61 $94 $57 $26 $28 $74 $76 $23 $24 $52 $53 $288 $305 $786 $71 $42 $29 $82 $22 $53 $364 $100 $113 $110 $109 $135 $110 $123 General Government Public Safety Public Works Community Development Community Services Library Capital Outlay Debt Service *Excludes the Capital Projects and Bond Construction Funds. Source: City s Audited Financial Statements and City records. Totals may differ due to rounding. 13

15 Enterprise Fund (Business-Type Activities*) Revenues and Expenditures $14,000, $11,341,069 $6,902,279 $11,500,344 $7,681,366 $11,158,104 $7,990,595 $11,069,167 $7,629,711 $11,415,626 $7,975,920 $12,437,419 $8,502,218 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 Enterprise Fund Revenues and Expenditures * Does not include Grants, Contributions or Debt Service payments. Revenues Expenditures Source: City s Audited Financial Statements.

16 Tax-Supported Debt Service By Series $6,500,000 $6,000,000 $5,500,000 $5,000,000 As of September 30, 2017 Principal $61,680,000 + Interest 18,255,434 = Total $79,935,434 Annual Bond Payments $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500, / / / / / / / / / / / / / / / / / /35 General Obligation Bonds, Series 2017 General Obligation Refunding Bonds, Series 2016A General Obligation Permanent Improvement & Refunding Bonds, Series 2016 General Obligation Bonds, Series 2015 General Obligation Refunding Bonds, Series 2014 General Obligation Refunding Bonds, Series 2012 Permanent Improvement Refunding Bonds, Series 2010B Permanent Improvement Bonds, Series 2010A Note: Debt service payments reflect payments from October 1 through September 30. Waterworks and Sewer System. Includes $36,721,025 in debt service requirements paid by the City s Source: City s Audited Financial Statements and City records As of September 30,

17 Tax-Supported Debt Service By Principal and Interest $6,500,000 $6,000,000 For each $1.00 of tax-supported bonds issued, the City pays.30 in interest. $5,500,000 $5,000,000 Annual Bond Payments $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500, / / / / / / / / / / / / / / / / / /35 Principal Interest Note: Debt service payments reflect payments from October 1 through September 30. Waterworks and Sewer System. Includes $36,721,025 in debt service requirements paid by the City s Source: City s Audited Financial Statements and City records As of September 30,

18 Summary of Tax-Supported Debt Outstanding By Series As of Fiscal Year Ended September 30, 2017 No. Issue Description 1 Permanent Improvement Bonds, Series 2010A Purpose Original Principal Amount Outstanding Principal Total Outstanding Debt Service Outstanding Principal Per Capita Outstanding Debt Service Per Capita Final Maturity Date Partially Secured by Ad Valorem Taxes Total Proceeds Received Spent Proceeds Uns pent Proceeds Capital Improvements $3,460, $2,735, $3,857, $67.41 $ /01/2035 Yes $3,549, $3,522, $27, Permanent Improvement Refunding Bonds, Series 2010B 3 General Obligation Refunding Bonds, Series General Obligation Refunding Bonds, Series 2014 Refunding at a lower interest rate, etc. Refunding at a lower interest rate, etc. Refunding at a lower interest rate, etc. $5,460, $2,370, $2,552, $58.42 $ /01/2021 Yes $5,621, $5,621, $8,890, $6,690, $7,589, $ $ /01/2026 Yes $9,393, $9,393, $8,805, $8,110, $10,286, $ $ /01/2028 Yes $9,680, $9,680, General Obligation Bonds, Series 2015 Capital Improvements $9,595, $8,760, $10,664, $ $ /01/2030 Yes $9,906, $9,549, $357, General Obligation Permanent Improvement & Refunding Bonds, Series General Obligation Refunding Bonds, Series 2016A Capital Improvements; Refunding at a lower interest rate, etc. Refunding at a lower interest rate, etc. $19,095, $18,045, $25,073, $ $ /01/2031 Yes $21,917, $20,783, $1,133, $9,765, $9,365, $12,663, $ $ /01/2034 Yes $10,826, $10,826, General Obligation Bonds, Series 2017 Capital Improvements $5,605, $5,605, $7,248, $ $ /01/2031 Yes $5,996, $862, $5,134, Totals: $70,675, $61,680, $79,935, $1, $1, $76,892, $70,239, $6,652, Source: City s Audited Financial Statements and City records. Per capita figures are based upon an estimated population of 40,

19 Waterworks and Sewer System Revenue Debt Service By Series $500,000 $450,000 As of September 30, 2017 Principal $5,515,000 + Interest 2,143,750 = Total $7,658,750 $400,000 Annual Bond Payments $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50, / / / / / / / / / / / / / / / / / / /36 Waterworks & Sewer System Revenue Bonds, Series 2016 Note: Debt service payments reflect payments from October 1 through September 30. Source: City s Audited Financial Statements and City records As of September 30,

20 Waterworks and Sewer System Revenue Debt Service By Principal and Interest $500,000 $450,000 For each $1.00 of revenue bonds issued, the City pays.39 in interest. $400,000 Annual Bond Payments $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50, / / / / / / / / / / / / / / / / / / /36 Principal Interest Note: Debt service payments reflect payments from October 1 through September 30. Source: City s Audited Financial Statements and City records As of September 30,

21 Summary of Water and Sewer System Revenue Debt Outstanding By Series As of Fiscal Year Ended September 30, 2017 No. Issue Description Purpose Original Principal Amount Outstanding Principal Total Outstanding Debt Service Outstanding Principal Per Capita Outstanding Debt Service Per Capita Final Maturity Date Partially Secured by Ad Valorem Taxes Total Proceeds Received Spent Proceeds Unspent Proceeds 1 Waterworks & Sewer System Revenue Bonds, Series 2016 Capital Improvements $5,735, $5,515, $7,658, $ $ /01/2036 No $6,088, $2,442, $3,645, Totals: $5,735, $5,515, $7,658, $ $ $6,088, $2,442, $3,645, Bond Issues No Longer Outstanding with Unspent Bond Proceeds (a) No. Issue Description Purpose 1 Waterworks & Sewer System Revenue Capital and Refunding Bonds, Series 2006 Improvements; Refunding at a lower interest rate, etc. Original Principal Amount Outstanding Principal Total Outstanding Debt Service Outstanding Principal Per Capita Outstanding Debt Service Per Capita Final Maturity Date Partially Secured by Ad Valorem Taxes Total Proceeds Received Spent Proceeds Unspent Proceeds $24,285, /01/2016 No $24,511, $24,469, $41, Waterworks & Sewer System Revenue Bonds, Series 2009 Capital Improvements $12,120, /01/2016 No $11,978, $11,646, $332, Totals: $36,405, $36,490, $36,116, $374, (a) Represents Bond Issues that have either matured or been refunded and have remaining Unspent Bond Proceeds. Source: City s Audited Financial Statements and City records. Per capita figures are based upon an estimated population of 40,

22 Total Bond Principal Outstanding At Fiscal Year End $80 Mil $70 Mil $65,235,000 $67,195,000 Bond Principal Outstanding At Fiscal Year End $60 Mil $50 Mil $40 Mil $30 Mil $20 Mil $10 Mil $55,720,000 $53,225,000 $50,645,000 $34,115,000 $32,995,000 $31,830,000 $21,605,000 $20,230,000 $18,815,000 $57,100,000 $24,540,000 $32,560,000 $5,735,000 $59,500,000 $5,515,000 $61,680,000 Tax-Supported Debt Waterworks & Sewer System Revenue Debt Note: Debt service payments reflect payments from October 1 through September 30. As of September 30, 2017, $28,360,000 in principal amount of General Obligation Bonds are paid by revenues from the Waterworks and Sewer System. Source: City s Audited Financial Statements and City records. 21

23 Savings from City s Recent Bond Refunding Programs to Lower Interest Costs Issue/Description Tax-Supported Debt Summary of Interest Cost Savings Bond Refunding Programs Series Refunded Principal Amount Refunded Total Savings Refunding Bonds, Series $ 3,765,000 $ 228,642 Permanent Improvement and Refunding Bonds, Series ,910,000 51,868 Permanent Improvement Refunding Bonds, Series 2010B 2001 WWSS 5,400, ,824 General Obligation Refunding Bonds, Series , ,905,000 1,026,111 General Obligation Refunding Bonds, Series , 2006 WWSS 9,080,000 1,509,749 General Obligation Permanent Improvement and Refunding Bonds, Series WWSS 13,145,000 2,425,878 General Obligation Refunding Bonds, Series 2016A 2009 WWSS 10,155,000 1,793,347 Waterworks and Sewer System Revenue Debt Waterworks and Sewer System Revenue and Refunding Bonds, Series WWSS, 2000 WWSS 7,480, ,889 Totals --- $ 59,840,000 $ 8,099,308 Source: City s Audited Financial Statements and City records. 22

24 Inflation-Adjusted Tax-Supported Debt Per Capita $1,750 Bond Principal Per Capita $1,500 $1,250 $1,000 $750 $500 Reflects an estimate of City s principal amount of tax-supported debt outstanding per capita, with years 2011/ /16 adjusted by rate of inflation portrayed by the Consumer Price Index. $607 $554 $501 $855 $1,529 $1,520 $250 Inflation-Adjusted Tax-Supported Debt Per Capita Source: City s Audited Financial Statements, 2010 U.S. Census (Interpolated), Bureau of Labor Statistics and City records. 23

25 Contact Information and Links to Additional Resources City Hall Contact Information: Physical and Mailing Address: 910 South Friendswood Drive Friendswood, Texas Phone: (281) For additional information regarding this report, please contact: Ms. Katina Hampton, MBA, CGFO Director of Administrative Services Phone: (281) Links to Additional Resources:

Annual Report of Local Debt Information (Pursuant to Local Government Code, Section ) Fiscal Year Ended September 30, 2017

Annual Report of Local Debt Information (Pursuant to Local Government Code, Section 140.008) Fiscal Year Ended September 30, 2017 This report was posted on the City s website on. Overview of Certain Financial/Bond