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1 CITY OE UVALDE ~/ /. 6/- C Zta~ Jeza.j ~ooks Slough ature Park ~ :::s ~ ~t~ ~ a~ ~ ~ <:;)~ 't3 ~ ~ ~.~ b qj~~ 13 ~ ~.;; ~ ~ ~~ & ~ tis, , d Grand Opera House SSGT. Willie De Leon Civic Center

2 Uvalde, Texas COMPREHENSIVE ANNUAL FINANCIAL REPORT For The Fiscal Year Ended September 30, 2013 Prepared by: City of Uvalde Finance Department

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4 INTRODUCTORY SECTION

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6 Uvalde, Texas COMPREHENSIVE ANNUAL FINANCIAL REPORT For The Fiscal Year Ended September 30, 2013 TABLE OF CONTENTS INTRODUCTORY SECTION Table of Contents... Directory of Officials... Letter of Transmittal... Organizational Chart... Certificate of Achievement for Excellence in Financial Reporting... PAGE i iv v vi ix x xi FINANCIAL SECTION Independent Auditors Report Management s Discussion and Analysis BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position Statement of Activities Governmental Fund Financial Statements Balance Sheet Governmental Funds Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities Proprietary Fund Financial Statements Statement of Net Position Proprietary Funds Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds Statement of Cash Flows Proprietary Funds Fiduciary Funds Statement of Fiduciary Net Position Fiduciary Funds Notes to Financial Statements (Continued) i

7 Uvalde, Texas COMPREHENSIVE ANNUAL FINANCIAL REPORT For The Fiscal Year Ended September 30, 2013 REQUIRED SUPPLEMENTARY INFORMATION TABLE OF CONTENTS FINANCIAL SECTION (Continued) Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual (GAAP Budgetary Basis) General Fund Schedule of Funding Progress Texas Municipal Retirement System NON-MAJOR GOVERNMENTAL FUND STATEMENTS, BUDGET SCHEDULES, AND CAPITAL ASSET SCHEDULES PAGE Combining Balance Sheet Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balance Nonmajor Governmental Funds Combining Statement of Changes in Assets and Liabilities All Agency Funds Statements of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Hotel/Motel Tax Police Forfeiture Fund Debt Service Capital Assets Used in the Operation of Governmental Funds Comparative Schedules By Source Schedule by Function and Activity Schedule of Changes by Function and Activity Financial Trend Information STATISTICAL SECTION Net Assets by Component Last Nine Fiscal Years Changes in Net Position Last Nine Fiscal Years Fund Balances of Governmental Funds Last Ten Fiscal Years Changes in Fund Balance of Governmental Funds Last Ten Fiscal Years (Continued) ii

8 Uvalde, Texas COMPREHENSIVE ANNUAL FINANCIAL REPORT For The Fiscal Year Ended September 30, 2013 Revenue Capacity Information TABLE OF CONTENTS STATISTICAL SECTION (Continued) Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Principal Property Taxpayers Current Year and Nine Years Ago General Governmental Tax Revenues By Source General Governmental Revenues By Source Last Ten Fiscal Years PAGE Taxable Sales by Category Last Nine Calendar Years Direct and Overlapping Sales Tax Rates Last Ten Fiscal Years Property Tax Rates Direct and Overlapping Last Ten Fiscal Years Property Tax Levies and Collections Last Ten Fiscal Years Debt Capacity Information Ratios of Outstanding Debt by Type Last Ten Fiscal Years Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years Direct and Overlapping Governmental Activities Debt As of September 30, Legal Debt Margin Information Last Ten Fiscal Years Pledged-Revenue Coverage Last Ten Fiscal Years Demographic and Economic Information Demographics and Economic Statistics Last Ten Years Principal Employers Current Year and Nine Years Ago Operating Information Full-Time-Equivalent City Government Employees by Function/Program Last Ten Fiscal Years Operating Indicators by Function/Program Last Ten Fiscal Years Capital Asset Statistics by Function/Program Last Ten Fiscal Years (Continued) iii

9 Uvalde, Texas COMPREHENSIVE ANNUAL FINANCIAL REPORT For The Fiscal Year Ended September 30, 2013 TABLE OF CONTENTS SINGLE AUDIT SECTION PAGE Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Report on Compliance with Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A Schedule of Findings and Questioned Costs Schedule of Expenditures of Federal Awards and Related Notes Summary Schedule of Prior Year Audit Findings iv

10 City of Uvalde, Texas Directory of Officials FY Mr. J Allen Carnes Mayor First Term Began: May 2008 Current Term Expires: May 2014 Mr. Rogelio M. Munoz Mr. Jesse Rodriguez Mr. Ernest Chip W. King, III District 3-Mayor Pro Tem District 1-Councilmember District 5-Councilmember First Term Began: May 2008 First Term Began: May 2008 First Term Began: May 2013 Current Term Expires: May 2014 Current Term Expires: May 2014 Current Term Expires: May 2014 Mr. John H. Flores, Jr. District 2-Councilmember Mr. Stephen Balke District 4-Councilmember First Term Began: May 2012 First Term Began: May 2012 Current Term Expires: May 2016 Current Term Expires: May 2016 Jennifer E. Garver City Manager Joe A. Cardenas Assistant City Manager Hired July 2009 Hired August 1998 v

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12 Uvalde Texas P.O. BOX 799, (830) FAX: (830) March 31, 2014 To the Honorable Mayor, Council Members, and Citizens of the City of Uvalde, Uvalde, Texas: State law requires that every general-purpose local government publish at the close of each fiscal year a complete set of financial statements presented in conformity with Generally Accepted Accounting Principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the Comprehensive Annual Financial Report of the City of Uvalde for the Fiscal Year Ended September 30, This report consists of management's representations concerning the finances of the City of Uvalde. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented within this report. To provide a reasonable basis for making these representations, management has established a comprehensive internal control framework that is designed to monitor and protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Uvalde's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Uvalde's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material aspects. The City of Uvalde's financial statements have been audited by Garza/Gonzalez & Associates, a Firm of licensed Certified Public Accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Uvalde for the fiscal year ended September 30, 2013, are free of material misrepresentation. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City of Uvalde's financial statements for the fiscal year ended September 30, 2013, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report. vi

13 GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City of Uvalde's MD&A can be found immediately following the report of the independent auditors. The City of Uvalde, was incorporated in 1889, and is located in the southwest part of the state, which is considered to be one of the top growth areas in the state, and one of the top growth areas in the country. The City of Uvalde currently occupies a land area of square miles and serves a population of approximately 15,751. The City of Uvalde is empowered to levy a property tax on both real and personal properties located within its boundaries. It also is empowered by state statute to extend its corporate limits by annexation, which occurs periodically when deemed appropriate and necessary by the governing council. The City of Uvalde has operated under the council-manager form of government since Policy-making and legislative authority are vested in governing council consisting of the mayor and five council members. The governing council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring both the city manager and city attorney. The city manager is responsible for carrying out the policies and ordinances of the governing council, for overseeing the day-to-day operations of the city, and for appointing the heads of various departments. The city council is composed of the Mayor and five (5) Council Members. The Mayor is elected to serve a two-year term and is elected at each biennial, city general election. The Mayor is elected by the entire city population, while the five (5) Council members are each elected by their respective district as a result of a special election held in Places 1, 3, and 5 became single member districts in 2010, and places 2 and 4 became single member districts in Council members are elected to serve four-year staggered terms, with places 1, 3, 5 and 2 and 4 respectively, alternating every two years on even numbered years. The City of Uvalde provides a full range of services, including police and fire protection; the construction and maintenance of streets, alleys, and other infrastructure; and recreational activities and cultural events. Water, sewer, gas and sanitation services are provided by the City of Uvalde and are included in the enterprise section of the City s financial statements. The annual budget serves as the foundation for the City of Uvalde's financial planning and control. All departments of the City of Uvalde were required to submit their requests for appropriation to the city manager on or before May 20, The city manager used these requests as the starting point for developing a proposed budget. The city manager then presented this proposed budget to the council for review and comment prior to the month of June. The council is then required to hold public hearings on the proposed budget and to adopt a final budget by no later than September 30, 2013, the close of the City of Uvalde's fiscal year. The appropriated budget is prepared by fund, function (e.g., public safety), and department (e.g., police). Department heads are allowed to make transfers of appropriations within interdepartmental line items. Transfers of appropriations between departments, however, require the special approval of the city manager and of the governing council. Budget-to-actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. For the general fund, this comparison is presented vii

14 on page 58 as part of the required supplementary information. For governmental funds, other than the general fund, with appropriated annual budgets, this comparison is presented in the governmental fund subsection of this report, which starts on page 60. Also included in the governmental fund subsection are project-length budget-to-actual comparisons for each governmental fund for which a project-length budget has been adopted. The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Uvalde operates. Local economy. The City of Uvalde currently enjoys a favorable economic environment and local indicators point to continued stability. The principal industries within the county include agriculture, tourism, manufacturing of asphalt & limestone paving materials, food processing, aviation services and retail establishments. The community's economic development and revitalization efforts are strong and continue to pay dividends in the form of expansion of existing businesses, new businesses, increased tourism and moderate population growth. As a portion of the population ages, Uvalde continues to increasingly become an area for retirees. It s good hospital, health care facilities, climate, abundance of recreational activities, quality of life and low cost of living makes this city an ideal place for citizens of all ages, incomes, and walks of life. The following are ten-year goals established by the City of Uvalde: 1. Implement the comprehensive street improvement and maintenance plan with voter approval and identify funding sources to support the program and related debt payments. 2. Develop a separate capital equipment budget to plan for future capital needs in all departments, including heavy equipment, fleet vehicles and all other major capital outlays. Establish capital fund accounts to aid in the future purchase of capital needs and identify funding mechanisms. 3. Continue to upgrade aging infrastructure in city utility systems as follows: a. Reinstate water meter replacement program to upgrade the 5,400 plus water meters and 3,000 plus gas meters to ensure accurate readings; b. Replace all existing steel gas pipe with PVC pipe; c. Refurbish old clarifier at wastewater treatment plant; 4. Install a 3rd elevated water tower (500,000 gallon) to serve the North/Northeast portion of Uvalde. 5. Identify and implement technologies that can assist the city in providing more efficient service deliver and better data collection and storage. Network all city facilities. 6. Begin the permitting process to acquire permits for additional cells at the landfill. 7. Reconstruct Airport Boulevard to include widening of the road with curbing and a sidewalk on one side and extend Garner Field Airport runway by 1,000 feet. 8. Upgrade all cart paths at the Uvalde Memorial Golf Course from asphalt to concrete and create a linkage from the East side of the Leona River to the Golf Course. 9. Identify areas for annexation that would benefit the City. viii

15 Awards and Acknowledgements: The City of Uvalde, Texas will submit this report (CAFR) to the Government Finance Officers Association (GFOA) to be considered for a Certificate of Achievement for Excellence in Financial Reporting award. This report satisfies both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for a certificate. In addition, the city has also submitted to the GFOA's Distinguished Budget Presentation Award for its annual budget document for fiscal year ended September 30, In order to qualify for the Distinguished Budget Presentation Award, the government's budget document was judged to be proficient in several categories, including as a policy document, a financial plan, an operations guide, and a communications device. The Distinguished Budget Presentation Award was received for the City s budget for the year ended September 30, The preparation of this report would have not been possible without the efficient and dedicated services of the entire staff of the Finance and Administration department. We would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit, must also be given to the Mayor and Council Members for their unfailing support for maintaining the highest standards of professionalism in the management of the City of Uvalde's finances. Respectfully Submitted, Jennifer E. Garver City Manager ix

16 Organizational Chart Building Official Permit Clerks Assistant City Manager Code Enforcement Official Municipal Court Clerk Information Technology Main Street Manager Code Enforcement Assistant Main Street Asst. Water Superintendant Water Foreman Water Utility Workers Gas Supervisor Gas Crew Leader Gas Utility Workers City Attorney Sewer Supervisor Sewer Plant Operator Sewer Utility Workers Mayor City Council Volunteer Fire Chief (Elected Annually) Municipal Prosecutor Municipal Judge City Manager Fire Marshal Volunteer Firefighters City of Uvalde Paid Firefighters City Secretary Human Resources Asst. to CM Director of Utilities Landfill Supervisor Collection Drivers Recycling Coordinator Utility Office Manager Facilities/ Maint. Foreman Landfill Spotters Landfill Labor Recyling Assistant Utility Office Clerks Meter Readers Custodians Director of Public Works Street Foreman Lead Mechanic Street Labor Shop Mechanic Elected Officials Appointed Officers Leadership Team Department Heads City Staff Outside Services Director of Parks & Recreation Service Center Clerk Golf Pro Shop Parks Supervisor Golf Labor Swimming Pool Civic Center Labor Parks Labor Cemetery Labor Seasonal Workers Finance Director (VACANT) Comptroller Budget Director Accounts Payable Clerk Payroll Clerk Purchasing Agent x

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18 Uvalde Police Department Organizational Chart City Manager Chief of Police Assistant Chief of Police Administrative Assistant Evidence Technician Lieutenant - Professional Standards Lieutenant - Uniform Patrol Division Lieutenant - Criminal Investigations Crossing Guards Animal Control Officers Sergeants Communication Director/Asst. to Lt. Detectives Corporals Communication Supervisor Records Clerk Patrol Officers & Student Resource Dispatchers Appointed Officers Leadership Team Department Heads City Staff xi

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20 xii

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22 FINANCIAL SECTION

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26 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of September 30, 2013, and the respective changes in financial position and, where applicable, cash flows thereof, for the year then ended in conformity with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management s Discussion and Analysis and Budgetary Comparison Information and the Schedule of Funding Progress, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City s financial statements. The introductory section, combining and individual nonmajor fund financial statements, statistical section, budget schedules and capital asset schedules, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the financial statements. The combining and individual nonmajor fund financial statements, budget schedules, and capital asset schedules and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 2

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30 Uvalde, Texas MANAGEMENT S DISCUSSION AND ANALYSIS Our discussion and analysis of the City of Uvalde, Texas financial performance provides an overview of the City s financial activities for the fiscal year ended September 30, Please, read it in conjunction with the City s audited financial statements, which begin on page 14. FINANCIAL HIGHLIGHTS Total net position of the City increased by $2,956,341 in Of this increase, $1,926,176 (or 65%) was contributed by the Business-Type Activities. The Government s total net position of governmental activities increased by $1,030,165. In FY 2012 the increase was $226,232. The ending combined Governmental Funds fund balance totaled $5,099,359. The fund balance increased $543,131 from the prior year of $4,556,228. The significant increase was attributed to the General Fund balance increase of $477,399. The fund balance in the General Fund as of September 30, 2013 is $2,723,022. Unassigned fund balance is $2,669,600. This amount is sufficient to fund approximately one hundred and twenty-one (121) days of operations. OVERVIEW OF THE FINANCIAL STATEMENTS The City of Uvalde, Texas basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplemental information in addition to the basic financial statements themselves. Government-wide financial statements: The government-wide financial statements are designed to provide readers with a broad overview of the City of Uvalde finances in a manner similar to a privatesector business. The statement of net position presents information on all of the City of Uvalde s assets and liabilities, with the difference between the two reported as net position. Over time, increase or decrease in net position may serve as a useful indicator of whether the financial position of the City is improving or declining. 4

31 Uvalde, Texas MANAGEMENT S DISCUSSION AND ANALYSIS The statement of activities presents information showing how the government s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving raise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused sick leave). Both of the government-wide financial statements distinguish functions of the City of Uvalde, Texas that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, health and welfare, bond interest and fiscal agent fees, and culture and recreation. The business-type activities of the City include Utility Fund (Water, Sewer, and Gas), Sanitation fund, and Airport fund. The government-wide financial statements include only the City of Uvalde, Texas itself (known as the primary government). The government-wide financial statements can be found on pages Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City like other state and local governments uses fund accounting to ensure and demonstrate compliance with financialrelated legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government s near-term financing requirements. Because the focus of governmental funds is narrower than the government-wide financial statements, it is useful to compare the information presented for the governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. 5

32 Uvalde, Texas MANAGEMENT S DISCUSSION AND ANALYSIS The City of Uvalde maintains several individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenue, expenditures, and changes in fund balance for the General fund, Debt Service, and the Capital Projects fund, which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The City of Uvalde adopts an annual appropriated budget for its General Fund, Debt Service Fund Hotel/Motel, and Police Forfeiture funds. A budgetary comparison statement has been provided for the General Fund, Hotel/Motel, Police Forfeiture and Debt Service Fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages of this report. Proprietary Funds: The City of Uvalde maintains one type of proprietary fund. Enterprise funds are used to report the same functions presented as a business-type activities in the government-wide financial statements. The City of Uvalde uses enterprise funds to account for its Utility (Water, Sewer, and Gas), Sanitation, and Airport activities. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Utility fund, the Sanitation fund, and the Airport fund, each of which are considered to be major funds of the City of Uvalde, Texas. The basic proprietary fund financial statements can be found on pages of this report. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the governmental-wide and fund financial statements. The notes to the financial statements can be found on pages of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City s progress in funding its obligations to provide pension benefits to its employees. Required supplemental information can be found on pages of this report. The combining statements referred to earlier in connection with non-major governmental funds is presented immediately following the required supplementary information on pensions. Combining and individual fund statements and schedules can be found on pages of this report. 6

33 Uvalde, Texas MANAGEMENT S DISCUSSION AND ANALYSIS GOVERNMENT-WIDE FINANCIAL ANALYSIS Net position may serve over time as a useful indicator of a government s financial position. In the case of the City of Uvalde assets exceeded liabilities by $28,615,424 at the close of the year. The largest portion of the City s net position (nearly 70 percent) reflects its net investment in capital assets (e.g. land, building, machinery, infrastructure, and equipment), less any related debt used to acquire those assets that is still outstanding. The City of Uvalde uses these capital assets to provide services to the citizens; consequently, these assets are not available for future spending. Although the City s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves can not be used to liquidate these liabilities. Net Position Governmental Business-Type Activities Activities Total Current & Other Assets $ 6,743,162 $ 6,732,245 $ 6,728,497 $ 4,222,334 $ 13,471,659 $ 10,954,579 Capital Assets 16,069,703 16,060,483 23,375,465 24,550,398 39,445,168 40,610,881 Total Assets $ 22,812,865 $ 22,792,728 $ 30,103,962 $ 28,772,732 $ 52,916,827 $ 51,565,460 Long-Term Liabilities $ 8,570,223 $ 9,094,768 $ 14,267,003 $ 14,782,111 $ 22,837,226 $ 23,876,879 Other Liabilities 669,711 1,155, , ,304 1,464,177 2,029,499 Total Liabilities $ 9,239,934 $ 10,249,963 $ 15,061,469 $ 15,656,415 $ 24,301,403 $ 25,906,378 Net Investment in Capital Assets $ 7,918,932 $ 7,681,162 $ 10,810,803 $ 12,300,857 $ 18,729,735 $ 19,982,019 Restricted 2,236,898 1,149,100 1,268,769 1,676,281 3,505,667 2,825,381 Unrestricted 3,417,101 3,712,503 2,962,921 (860,821) 6,380,022 2,851,682 Total Net Position $ 13,572,931 $ 12,542,765 $ 15,042,493 $ 13,116,317 $ 28,615,424 $ 25,659,082 An additional portion of the City of Uvalde s net position (12%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position (22%) may be used to meet the governments on going obligations to citizens and creditors. At the end of the current fiscal year the City reported a positive balance in the governmental activities and a positive balance in the business-type activities. There was a decrease in unrestricted net position reported in connection with the City of Uvalde s governmental activities. During the current fiscal year, the government s unrestricted net position decreased by $295,402. The City s net investment in capital assets for governmental activities totaled $7,918,932, an increase of $237,770 over the prior year. This increase was attributed to an increase in construction related projects funded by previously issued Certificate of Obligations for City projects. 7

34 Uvalde, Texas MANAGEMENT S DISCUSSION AND ANALYSIS Change in Net Position Governmental Business-Type Activities Activities Total Revenues: Program Revenues: Charges for Services $ 865,523 $ 846,929 $ 10,323,934 $ 7,883,390 $ 11,189,457 $ 8,730,319 Operating Grants and Contribution 530, ,302 21,927 1,286, ,715 1,398,490 General Revenues: Maintenance and Operations 3,219,823 2,828, ,219,823 2,828,989 Taxes Sales Taxes 2,663,942 2,472, ,663,942 2,472,197 Franchise Taxes 642, , , ,515 Other Taxes 505, , , ,514 Unrestricted Investment Earnings 42,828 52,049 27,018 38,540 69,846 90,589 Grants and Contributions Not to Specific Programs 14,600 12, ,600 12,500 Miscellaneous 354, , , , , ,745 Total Revenues 8,839,872 7,816,496 10,809,133 9,460,362 19,649,005 17,276,858 Expenses General Administration 1,448,998 1,287, ,448,998 1,287,606 Public Safety 4,094,734 4,024, ,094,734 4,024,670 Public Transportation 1,503,894 1,282, ,503,894 1,282,871 Culture and Recreation 2,335,706 1,966, ,335,706 1,966,105 Health and Welfare 64, , , ,816 Conservation and Development - 14, ,093 Interest and Fiscal Charges 282, , , ,599 Water - - 5,248,655 4,736,955 5,248,655 4,736,955 Sanitation - - 1,941,304 1,721,707 1,941,304 1,721,707 Airport , , , ,041 Total Expenses 9,730,348 9,016,760 7,639,390 6,737,703 17,369,738 15,754,463 Change in Net Position Before Transfers (890,476) (1,200,264) 3,169,743 2,722,659 2,279,267 1,522,395 Transfers 1,975,000 1,375,000 (1,975,000) (1,375,000) - - Change in Net Position 1,084, ,736 1,194,743 1,347,659 2,279,267 1,522,395 Net Position - Beginning 12,542,766 12,316,533 13,116,317 12,876,676 25,659,083 25,193,209 Prior Period Adjustments (54,359) 51, ,433 (1,108,018) 677,074 (1,056,521) Net Position at September 30, 2013 $ 13,572,931 $ 12,542,766 $ 15,042,493 $ 13,116,317 $ 28,615,424 $ 25,659,083 8

35 Uvalde, Texas MANAGEMENT S DISCUSSION AND ANALYSIS Expense and Program Revenue - Governmental Activites Expenses Program Revenues Expenses General Administration $ 1,448,998 $ 1,287,606 $ 144,144 $ 146,238 Public Safety 4,094,734 4,024, , ,352 Public Works 1,503,894 1,282,871 6,955 4,422 Culture and Recreation 2,335,706 1,966, , ,491 Health and Welfare 64, , Conservation and Development - 14,093-31,728 Bond Interest 281, , Fiscal Agent Fees 800 1, $ 9,730,348 $ 9,016,761 $ 1,396,311 $ 959, Revenues % Revenues % Revenue by Source Governmental Activities $ 865,523 10% $ 846,929 11% Operating Grants and Contribution 530,788 6% 112,302 1% Maintenance and Operations Taxes 3,122,361 35% 2,744,766 35% Sales Taxes 2,663,942 30% 2,472,197 32% Franchise Taxes 642,316 7% 656,515 8% Other Taxes 505,815 6% 497,514 6% Unrestricted Investment Earnings 42,828 0% 52,049 1% Penalty and Interest 97,462 1% 84,223 1% Grants and Contributions Not Restricted to Specific Programs 14,600 0% 12,500 0% Miscellaneous 354,237 4% 337,501 4% $ 8,839, % $ 7,816, % For the most part, expenses closely paralleled the prior year levels or were slightly higher than the previous year. The largest increase occurred in supplies. Some of the reasons for the increased expenses in supplies were increased repairs and maintenance to the water and sewer systems. 9

36 Uvalde, Texas MANAGEMENT S DISCUSSION AND ANALYSIS Business-Type Activities Business-type activities increased the City of Uvalde, Texas net position by $1,194,743. The increase in the business-type activities was due mainly to higher billings and collections for the Utility and Sanitation funds. Expense and Program Revenue - Business-Type Activites Expenses Program Revenues Grants Utilities $ 5,248,655 $ 4,736,955 $ 7,718,596 $ 5,697,533 $ - $ - Sanitation 1,941,304 1,721,707 2,605,338 2,185,857 15,000 - Airport 449, , ,927 1,286,188 Total Business-Type Activities $ 7,639,390 $ 6,737,703 $ 10,323,934 $ 7,883,390 $ 21,927 $ 1,286, Revenues % Revenues % General Revenue by Source Unrestricted Investment Earnings $ 27,018 6% $ 38,540 8% Miscellaneous 436,254 94% 252,244 54% $ 463, % $ 290,784 63% FUND FINANCIAL ANALYSIS As noted earlier, the City of Uvalde uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the City of Uvalde s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of Uvalde s governmental funds reported a combined ending fund balance of $5,099,359, an increase of $543,131 from the prior year. Approximately ninety-eight (98) percent constitutes unassigned fund balance, which is available for spending at the government s discretion. The remainder of fund balance is restricted to indicate that is not available for new spending because it has already been reserved for debt and capital construction. 10

37 Uvalde, Texas MANAGEMENT S DISCUSSION AND ANALYSIS The General fund is the chief operating fund of the City of Uvalde. At the end of the current fiscal year, unassigned fund balance for the General fund was $2,669,600. As a measure of the General fund s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total expenditures. Unassigned fund balance represents approximately 33 percent of total general fund expenditures. During the current fiscal year, the unassigned fund balance of the City of Uvalde s General fund increased by $481,241. The Debt Service Fund ended the year with a fund balance of $1,056,664, which represents an increase of $182,262 for the year. Although property tax revenues received during the year were lower than budgeted, no transfers were necessary which contributed to a positive net change in fund balance. The Capital Projects Fund saw a reduction from fund balance of $66,757 due to completion of the SSgt. Willie De Leon Civic Center renovation project. Proprietary funds The City of Uvalde s Proprietary funds provide the same type of information found in the governmental-wide financial statements, but in more detail. Unrestricted net position of the Utility fund at the end of the year were $1,904,227 and that for the Sanitation fund amounted to $747,628. The increase in net position for all proprietary funds was $1,926,176. Utility fund net position increased by $1,351,745, Sanitation fund increased by $818,301 and Airport net position decreased by $(243,870). Other factors concerning the finances of these three funds have already been addressed in the discussion of the City of Uvalde s business-type activities. General Fund Budgetary Highlights Each year the City of Uvalde spends a significant amount of time developing the annual budget. Staff analyzes both prior year actual results and the needs for the upcoming year in order to determine the final budget. Throughout the year, the budget is also amended to reflect changes in expectations for revenues and expenses based on actual results during the year. The original and the final budget figures reflect the differences between the two budgets. Actual revenues and expenses compared to the budget reflect more favorable results than anticipated. Actual revenues were $69,196 more than budgeted. Actual expenditures were $336,132 less than budgeted. Transfers from the general fund to other funds were exactly as budgeted. The budget projected an increase in fund balance of $266,840 while the final actual result was an increase of $468,061 to General Fund Balance as of 9/30/

38 Uvalde, Texas MANAGEMENT S DISCUSSION AND ANALYSIS CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The City of Uvalde s net investment in capital assets for its governmental and business type activities as of September 30, 2013 amounts to $39,445,168. This investment in capital assets includes land, building and system, improvements, machinery and equipment, park facilities, roads, highways, and bridges. The City s investment in capital assets for the current year decreased by approximately (3%). The decrease was attributed an increase in depreciation expense. Capital Assets (net of depreciation) Governmental Business-Type Activities Activities Total Land $ 884,245 $ 884,245 $ 3,364,461 $ 3,364,462 $ 4,248,706 $ 4,248,707 Construction in Progress 801,914 4,500,061-1,648, ,914 6,148,640 Buildings 2,653,906 2,747,104 2,526, ,031 5,180,893 3,641,135 Improvements Other than Buildings 5,937,397 1,658,789 16,413,224 17,341,016 22,350,621 18,999,805 Machinery and Equipment 476, ,170 1,070,793 1,302,310 1,547,032 1,890,480 Infrastructure 5,316,002 5,682, ,316,002 5,682,114 Total $ 16,069,703 $ 16,060,483 $ 23,375,465 $ 24,550,398 $ 39,445,168 $ 40,610,881 Additional information on the City of Uvalde, Texas s capital assets can be found in note IV.D on page of this report. Long-term Debt At the end of the current fiscal year, the City of Uvalde had total bonded debt outstanding of $19,695,000. Of this amount, $6,545,000 comprises debt solely backed by the full faith and credit of the City of Uvalde, Texas (the City ). The remainder of the City s debt is comprised of certificates of obligation backed by the full faith and credit of the City and further secured by a lien on and pledge of the net revenues of the City s utility system. Outstanding Debt Certificate of Obligations and Revenue Bonds Governmental Business-Type Activities Activities Total Bonded Debt $ 8,115,000 $ 8,500,000 $ 11,580,000 $ 12,845,000 $ 19,695,000 $ 21,345,000 12

39 Uvalde, Texas MANAGEMENT S DISCUSSION AND ANALYSIS The City of Uvalde s total bonded debt decreased by $1,650,000 during the current fiscal year. The City of Uvalde Texas and its Utility fund maintain an A/stable rating from Standard and Poor s. Additional information on the City of Uvalde, Texas long-term debt can be found in note IV.G on pages 47 to 49. ECONOMIC FACTORS AND NEXT FISCAL YEAR S BUDGET AND RATES One of the large economic factors affecting the City of Uvalde has been the Eagle Ford Shale oil and gas exploration and production. Although to-date no exploration and production has occurred in the City or Uvalde County, the City is positioned as the largest city nearest too some of the activity and has benefited from geographic proximity to the Eagle Ford Shale. This has resulted in a positive financial effect on the City s sales taxes, businesses, hotel and motels, and real estate. Water and the continuing drought have also been a large economic factor in the City of Uvalde. The City is working towards a permit for alternate source water and continuing to study both sources of water and the current utility rate structure. Conservation efforts continue to be a key factor in any future water plans. During the 2014 budget year, the primary factors affecting the budget continue to be public safety; replacement of aging infrastructure, and investment in capital assets. The City had a very slight decrease in total property taxes of $.0044 over the prior year levy. This was a result of a decrease in the maintenance and operations tax levy of $ The maintenance and operations tax adopted was the effective rate and it was slightly less than last year s rate due to an increase in taxable value of properties on the City s tax rolls. At the same time, the interest and sinking portion of ad valorem taxes increased by $ in order to meet current year debt payment obligations. REQUEST FOR INFORMATION This financial report is designated to provide a general overview of the City of Uvalde, Texas finances for all those with an interest in the government s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Department, City of Uvalde, P.O. Box 799, Uvalde, Texas

40 BASIC FINANCIAL STATEMENTS

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42 Government-Wide Financial Statements

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44 STATEMENT OF NET POSITION SEPTEMBER 30, 2013 Governmental Activities Primary Government Business Type Activities ASSETS Cash and Cash Equivalents $ 4,569,888 $ 3,917,494 $ 8,487,382 Investments - Current 1,004, ,000 1,179,837 Receivables (net of allowance for uncollectibles) 972,760 1,987,932 2,960,692 Due from Others - 696, ,000 Internal Balances 142,230 (142,230) - Inventories 53,422 49, ,596 Deferred charges Capital Assets: 25 45,127 45,152 Land 884,245 3,364,461 4,248,706 Infrastructure, net 5,316,002-5,316,002 Buildings, net 2,653,906 2,526,987 5,180,893 Improvements other than Buildings, net 5,937,397 16,413,224 22,350,621 Machinery and Equipment, net 476,239 1,070,793 1,547,032 Construction in Progress 801, ,914 Total Assets 22,812,865 30,103,962 52,916,827 LIABILITIES Accounts Payable Accrued Interest Payable Other Current Liabilities Noncurrent Liabilities Due Within One Year Due in More Than One Year Total 622, , ,407 47,694 58, , , , , ,406 1,442,892 7,990,737 13,403,597 21,394,334 Total Liabilities 9,239,934 15,061,469 24,301,403 NET POSITION Net Investment in Capital Assets Restricted for: Restricted for Debt Service Restricted for Capital Projects Restricted for Endowment Unrestricted Net Position 7,918,932 10,810,803 18,729,735 1,056,664 1,268,769 2,325, , ,055 1,036,179-1,036,179 3,417,101 2,962,921 6,380,022 Total Net Position $ 13,572,931 $ 15,042,493 $ 28,615,424 The notes to the financial statements are an integral part of this statement. 14

45 STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2013 Program Revenues Expenses Charges for Services Operating Grants and Contributions Primary Government: GOVERNMENTAL ACTIVITIES: General Government $ 1,448,998 $ 144,144 $ - Public Safety 4,094, ,146 30,788 Public Works 1,503,894 6,955 - Health and Welfare 64, Culture and Recreation 2,335, , ,000 Bond Interest 281, Fiscal Agent's Fees Total Governmental Activities: BUSINESS-TYPE ACTIVITIES: Utility Fund Sanitation Fund Airport Fund Total Business-Type Activities: 9,730, , ,788 5,248,655 7,718,596-1,941,304 2,605,338 15, ,431-6,927 7,639,390 10,323,934 21,927 TOTAL PRIMARY GOVERNMENT: $ 17,369,738 $ 11,189,457 $ 552,715 General Revenues: Taxes: Property Taxes, Levied for General Purposes Property Taxes, Levied for Debt Service Sales Taxes Franchise Taxes Other Taxes Penalty and Interest Grants and Contributions Not Restricted Miscellaneous Revenue Investment Earnings Transfers In (Out) Total General Revenues and Transfers Change in Net Position Net Position - Beginning Prior Period Adjustment Net Position--Ending The notes to the financial statements are an integral part of this statement. 15

46 Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Activities Business-type Activities Total $ (1,304,854) $ - $ (1,304,854) (3,719,800) - (3,719,800) (1,496,939) - (1,496,939) (64,250) - (64,250) (1,465,428) - (1,465,428) (281,966) - (281,966) (800) - (800) (8,334,037) - (8,334,037) - 2,469,941 2,469, , ,034 - (442,504) (442,504) - 2,706,471 2,706,471 (8,334,037) 2,706,471 (5,627,566) $ 2,165,862-2,165, , ,499 2,663,942-2,663, , , , ,815 97,462-97,462 14,600-14, , , ,491 42,828 27,018 69,846 1,975,000 (1,975,000) - 9,418,561 (1,511,728) 7,906,833 1,084,524 12,542,766 (54,359) 1,194,743 13,116, ,433 2,279,267 25,659, ,074 13,572,931 $ 15,042,493 $ 28,615,424 16