HomeMy WebLinkAboutItem 07 - City AuditMEMOTO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: BRUNO RUMBELOW, CITY MANAGER
MEETING DATE: MARCH 17, 2020
SUBJECT: FILING OF ANNUAL CITY AUDIT
RECOMMENDATION: Pattillo, Brown and Hill, LLC, the City's auditing firm, to present the annual
audit report in compliance with the City Charter, Article 3, Section 3.14.
FUNDING SOURCE: This action will have no material effect on City funds.
BACKGROUND: A representative from Pattillo, Brown and Hill, LLC. the City's audit firm,
will make a presentation to the City Council filing the annual audit report in
compliance with the City Charter, Article 3, Section 3.14.
The firm completed the audit of the City's FY 2019 financial statements in
compliance with the requirements of the City Charter, Article 3, Section
3.14. The auditor's opinion letter states that the financial statements of the
City of Grapevine present fairly the financial position of the City. The
opinion rendered is an "unmodified opinion", meaning there are no
material exceptions found to the fairness criteria under which the records
were audited. The report also includes an audit of Tax Increment
Financing Districts One and Two.
The auditor is filing his report with the City Council. No formal action on
the part of the Council is required.
Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
PATTILLO, BROWN & HILL, L.L.P.
401 West State Highway 6
Waco, Texas 76710
254.772.4901 pbhcpa.com
We have audited the financial statements of the City of Grapevine, Texas (City), as of and for the year
ended September 30, 2019, and have issued our report thereon dated March 12, 2020. Professional standards
require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit
As communicated in our engagement letter dated January 7, 2020, our responsibility, as described by
professional standards, is to form and express opinions about whether the financial statements that have been
prepared by management with your oversight are presented fairly, in all material respects, in accordance with
accounting principles generally accepted in the United States of America. Our audit of the financial statements does
not relieve you or management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain
reasonable, rather than absolute, assurance about whether the financial statements are free of material
misstatement. An audit of financial statements includes consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, as part
of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures
and not to provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are, in our
professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we
are not required to design procedures for the purpose of identifying other matters to communicate to you.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.
Compliance with All Ethics Requirements Regarding Independence
The engagement team, others in our firm, and, as appropriate, our firm have complied with all relevant
ethical requirements regarding independence.
As part of the engagement we assisted in preparing the financial statements and related notes to the
financial statements of the City in conformity with U.S. generally accepted accounting principles based on
information provided by you. These nonaudit services do not constitute an audit under Government Auditing
Standards and such services were not conducted in accordance with Government Auditing Standards.
OFFICE LOCATIONS
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NEW MEXICO I Albuquerque
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In order to ensure we maintain our independence for performing these nonaudit services certain safeguards
were applied to this engagement. Management assumed responsibility for the financial statements, related notes
to the financial statements and any other nonaudit services we provided. Management acknowledged, in the
management representation letter, our assistance with the preparation of the financial statements and related notes
to the financial statements and that these items were reviewed and approved prior to their issuance and accepted
responsibility for them. Further, the nonaudit services were overseen by an individual within management that has
the suitable skill, knowledge, or experience; evaluated the adequacy and results of the services; and accepted
responsibility for them.
Qualitative Aspects of the City's Significant Accounting Practices
Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the
significant accounting policies adopted by the City is included in Note 1 to the financial statements. There have
been no initial selection of accounting policies and no changes in significant accounting policies or their application
during the current year. No matters have come to our attention that would require us, under professional standards,
to inform you about the effect of significant accounting policies in controversial or emerging areas for which there
is a lack of authoritative guidance or consensus.
No matters have come to our attention that would require us, under professional standards, to inform you
about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting
policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management's current judgments. Those judgments are normally based on knowledge and experience
about past and current events and assumptions about future events. Certain accounting estimates are particularly
sensitive because of their significance to the financial statements and because of the possibility that future events
affecting them may differ markedly from management's current judgments.
The most sensitive accounting estimates affecting the financial statements are:
• Management's estimate of the allowance for uncollectible receivables is based on historical collection
experience.
• Management's estimate of the accumulated depreciation on capital assets is based on the related
estimated useful lives of capital assets.
• Management's estimate of the net pension liability and net OPEB liability are based on actuarial
assumptions which are determined by the demographics of the plan and future projections that the
actuary makes based on historical information of the plan and the investment market.
For each of these estimates, we evaluated the key factors and assumptions used to develop them and
determined that they are reasonable in relation to the basic financial statements taken as a whole and in relation to
the applicable opinion units.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because
of their significance to financial statement users. The most sensitive disclosures affecting the City's financial
statements relate to the City's net pension liability and net OPEB liability.
The disclosures in the financial statements are neutral, consistent, and clear.
2
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the
audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely
misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the
appropriate level of management. Further, professional standards require us to also communicate the effect of
uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or
disclosures, and the financial statements as a whole and each applicable opinion unit. Management has corrected
all identified misstatements.
In addition, professional standards require us to communicate to you all material, corrected misstatements
that were brought to the attention of management as a result of our audit procedures. None of the misstatements
identified by us as a result of our audit procedures and corrected by management were material, either individually
or in the aggregate, to the financial statements taken as a whole or applicable opinion units.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter,
whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which
could be significant to the City's financial statements or the auditor's report. No such disagreements arose during
the course of the audit.
Representations Requested from Management
We have requested certain written representations from management, which are included in the
management representation letter dated March 12, 2020.
Management's Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters. Management informed us that, and to our knowledge, there were no consultations with other accountants
regarding auditing and accounting matters.
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters,
including the application of accounting principles and auditing standards, operating and regulatory conditions
affecting the City, and operational plans and strategies that may affect the risks of material misstatement. None of
the matters discussed resulted in a condition to our retention as the City's auditors.
Restriction on Use
This report is intended solely for the information and use of the City Council, Audit Committee and
management of the City of Grapevine, Texas, and is not intended to be, and should not be, used by anyone other
than these specified parties.
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CITY OF GRAPEVINE, TEXAS
10101iyiIaN4:14ki6*1WWIILII'111_maILlI_1'us] /_11111N4ael:41
FISCAL YEAR ENDED SEPTEMBER 30, 2019
Prepared by: Fiscal Services Department
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CITY OF GRAPEVINE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
SEPTEMBER 30, 2019
INTRODUCTORY SECTION
Letter of Transmittal......................................................................
Certificate of Achievement for Excellence in Financial Reporting
Organization Chart........................................................................
Administrative Officials.................................................................
FINANCIAL SECTION
Independent Auditor's Report......................................................................
Management's Discussion and Analysis .....................................................
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Position......................................................................
Statement of Activities...........................................................................
Fund Financial Statements:
Balance Sheet — Governmental Funds .................................................
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position.........................................................
Statement of Revenues, Expenditures and Changes in
Fund Balances — Governmental Funds ..............................................
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities........................................................................
Statement of Net Position — Proprietary Funds .....................................
Statement of Revenues, Expenses and Changes in
Net Position — Proprietary Funds .....................................................
Statement of Cash Flows — Proprietary Funds ......................................
Statement of Fiduciary Net Position — Fiduciary Funds ........................
Notes to the Financial Statements............................................................
Page
Number
i — v
vi
vii
viii
1-3
4-13
14
15-16
17-18
19
20-21
22
23-24
25
26-27
28
29-60
Required Supplementary Information:
Budgetary Comparison Schedule — General Fund ...............................
Budgetary Comparison Schedule — Hotel Occupancy Tax ..................
Budgetary Comparison Schedule — Crime District ...............................
Budgetary Comparison Schedule — 4B Economic Development Fund
Budgetary Comparison Schedule — 4B — Transit .................................
Schedule of Changes in Net Pension Liability
and Related Ratios — Texas Municipal Retirement System .............
Schedule of Contributions — Texas Municipal Retirement System ......
Schedule of Changes in Net OPEB Liability
andRelated Ratios...........................................................................
Notes to Required Supplementary Information ....................................
Combining and Individual Fund Statements and Schedules:
Nonmajor Governmental Funds:
Combining Balance Sheet.................................................................
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances............................................................
Budgetary Comparison Schedule — Debt Service Fund ....................
Budgetary Comparison Schedule — Lake Park Fund ........................
Agency Funds:
Combining Statement of Changes in Assets and Liabilities ..............
STATISTICAL SECTION (Unaudited)
Net Position by Component .....................................
Changes in Net Position ..........................................
Fund Balances — Governmental Funds ...................
Changes in Fund Balances — Governmental Funds
Taxable Sales by Category .....................................
Direct and Overlapping Sales Tax Rates ................
Assessed Value and Estimated Actual Value
of Taxable Property ..............................................
Page
Number
.................................
61
.................................
62
.................................
63
.................................
64
.................................
65
.................................
66-67
.................................
68-69
70
71
72-73
74-75
76
77
78
Page
Table
Number
................. 1
79-80
................. 2
81 —84
................. 3
85-86
................. 4
87-88
................. 5
89
................. 6
90
................. 7
91
INTERNAL CONTROL AND COMPLIANCE SECTION
Independent Auditor's Report on Internal Control Over Financial
Reporting and Other Matters Based on an Audit of
Financial Statements Performed in Accordance With
Government Auditing Standards........................................................................................... 107-108
Schedule of Findings and Responses...................................................................................... 109
Page
Table
Number
Property Tax Rates — Direct and Overlapping Governments ...................................
8
92
Principal Property Taxpayers...................................................................................
9
93
Property Tax Levies and Collections........................................................................
10
94
Ratios of Outstanding Debt by Type.........................................................................
11
95
Ratios of General Bonded Debt Outstanding...........................................................
12
96
Direct and Overlapping Governmental Activities Debt .............................................
13
97
Legal Debt Margin Information.................................................................................
14
98
Pledged Revenue Coverage — 4B Economic Development Fund ...........................
15
99
Pledged Revenue Coverage — Tax Increment Financing
District Reinvestment Zone Number Two..............................................................
16
100
Demographic and Economic Statistics.....................................................................
17
101
PrincipalEmployers..................................................................................................
18
102
Full-time Equivalent City Government Employees
byFunction/Program.............................................................................................
19
103
Operating Indicators by Function/Program...............................................................
20
104-105
Capital Asset Statistics by Function/Program..........................................................
21
106
INTERNAL CONTROL AND COMPLIANCE SECTION
Independent Auditor's Report on Internal Control Over Financial
Reporting and Other Matters Based on an Audit of
Financial Statements Performed in Accordance With
Government Auditing Standards........................................................................................... 107-108
Schedule of Findings and Responses...................................................................................... 109
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INTRODUCTORY SECTION
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March 12, 2020
To the Honorable Mayor,
Members of the City Council, and
Citizens of the City of Grapevine, Texas
The Fiscal Services Department is pleased to submit the Comprehensive Annual Financial Report for the City
of Grapevine. The City's Management assumes responsibility for both the accuracy of the data and the
completeness and fairness of the presentation, based upon a comprehensive framework of internal control
that it has established for this purpose. Because the cost of internal control should not exceed anticipated
benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements
are free of any material misstatements. To the best of our knowledge and belief, the enclosed data is accurate
in all material respects. The data is reported in a manner designed to present fairly the financial position and
results of operations of the various funds of the City government. To enable the reader to gain an
understanding of the City's financial activities, all necessary disclosures have been included.
The City Charter requires an annual audit of the books of account, financial records, and transactions of all
administrative departments of the City. The City Charter specifies that independent accountants selected by
the City Council conduct such audits. Pattillo, Brown & Hill, LLP was selected by the City Council to conduct
this year's audit. The independent auditors' report on the basic financial statements is included in the financial
section of this report. This report fulfills the requirement of state law which requires the City file to the State
an annual financial statement and audit opinion within 180 days after the last day of the municipality's Fiscal
Year (FY).
Pattillo, Brown & Hill, LLP has issued an unmodified ("clean") opinion on the City of Grapevine's financial
statements for the year ended September 30, 2019. The independent audit report is located at the front of
the financial section of this report.
The Management's Discussion and Analysis (MD&A) is a narrative introduction, overview, and analysis to
accompany the basic financial statements. The MD&A can be found immediately following the independent
auditors' report. The letter of transmittal is designed to complement and should be read in conjunction with
the MD&A. The statistical section includes selected financial and demographic information, generally
presented on a multi-year basis.
Fiscal Services • 200 South Main Street • Grapevine, Texas • 76051 • 817-410-3113 • Fax 817-410-3013
Profile of the City of Grapevine
Incorporated in February 1907, Grapevine is a home rule City operating under a Council -Manager form of
government. Policymaking and legislative authority are vested in the City Council, which consists of a Mayor
and a six -member Council. The City Manager is appointed by the City Council and is responsible for carrying
out policies and for the daily management of the City. Council members serve three-year staggered terms,
with two Council members elected each year. The Mayor is elected to serve a three-year term.
The City is located in the center of the Dallas/Fort Worth metropolitan complex, 21 miles northwest of
downtown Dallas and 19 miles northeast of downtown Fort Worth. Three major freeways, State Hwy 114,
State Hwy 121, and Interstate Hwy 635, intersect in the heart of Grapevine, providing excellent access to
Dallas, Fort Worth and the area shopping, entertainment, and employment centers. The City is located in
Northeast Tarrant County and is home to the Dallas/Fort Worth International Airport. Two-thirds of the airport
properties are located within Grapevine city limits and Grapevine participates in a legislatively mandated
revenue share agreement with the cities of Ft. Worth and Dallas. The City is approximately 35 square miles
and serves an approximate population of 53,000.
The City provides a full range of services, including police and fire protection, emergency ambulance service,
planning and zoning, public improvements, water and sewer services, sanitation services, extensive parks
and recreation facilities, library services, street and other public infrastructure maintenance and improvements,
and general administrative services. The City also offers a 27 -hole golf course, a very active economic
development focus and an aggressive marketing plan to continue to grow and develop industry and tourism
within the City. The City also provides internal services, through the General Fund, for fleet services and risk
management.
The City of Grapevine's Home Rule Charter provides for the submission of the budget to the City Council by
the City Manager. At least sixty days and no more than ninety days before the beginning of the fiscal year, the
City Manager must submit a proposed budget to the City Council. The annual budget serves as the foundation
for the City of Grapevine's financial planning and control. The budget is prepared by fund and department,
and the City Manager can approve the transfer of expenditures within a fund, but transfers between funds
requires approval from the governing Council. The Grapevine Code of Ordinances establishes a balanced
budget provision for the General and Debt Service funds. Total estimated expenditures within these funds
shall not exceed the total estimated resources, but it does, however, provide for disclosure when a deviation
from a balanced budget is necessary. The budget may be amended and appropriations altered in cases of
public necessity, upon declaration of the City Council.
Component units are legally separate organizations that a primary government must include as a part of its
financial reporting entity. The City has included financial statements for five blended component units due to
their fiscal dependency on the primary government. The Tax Reinvestment Zones Numbers One and Two,
the Crime Control and Protection District, the Grapevine 4B Economic Development Corporation, and the 4B
Transit Fund, which accounts for local sales tax used to fund Grapevine's participation in the commuter rail
development project with the Fort Worth Transit Authority. The 4B Economic Development Fund accounts for
a portion of the local sales tax which is used to stimulate the local economy, promote new development, and
spur redevelopment of other areas.
The Heritage Foundation is a legally separate organization that is a discretely presented component unit of
the City. The Foundation was organized to promote the preservation, protection and economic development
of Grapevine's physical and cultural heritage. Additional information on all six component units can be found
in Note I in the notes to the financial statements.
Local Economy
During FY 2019, Grapevine continued to experience economic growth due to superior access to major
highways, an aggressive economic development program, and a stable political climate. In addition, the City
of Grapevine is in close proximity to DFW International Airport, which helps to promote tourism, and is the
largest employer in Grapevine with more than 27% of the total employment base. Other local economic
indicators for Grapevine in FY 2019 include an unemployment rate of 3.0% and an increase in personal income
per capita of 2.5% over the previous year and 21 % over the last ten years.
Sales tax , the single largest revenue stream for the City, continued to increase from previous years. Total
sales tax revenues increased $2.2 million (4%) and $3.3 million (6%) in FY 2018 and FY 2019 respectively.
Over the last 5 years, sales tax revenues experienced an increase of 9.7% or roughly $5.2 million. Sales tax
revenues over the last 10 years are illustrated in the table below.
The City's hotel and occupancy tax receipts have been on a steady incline over the last several years. Since
2015, hotel occupancy tax revenues have increased 14.7%. This growth was driven in the last several years
by higher occupancy rates for hotels located in the City as well as an increase in the average daily rate of
those occupied rooms. Additional growth was seen in FY 2019 (4.5% increase) resulting from a full year of
results related to the opening of the Gaylord Texan Resort expansion in FY 2018. The project increased the
number of rooms by 303 and has also provided the facility with an additional 86,000 square feet of meeting
space. Hotel occupancy taxes are expected to continue to grow over the next several years as current and
future hotel construction projects are completed within the City.
$65,000
$55,000
$45,000
$35,000
$25,000
$15,000
$5,000
Sales and Hotel Occupancy Tax Revenue
(Thousands)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Sales Tax OccupancyTax
Long-term Financial Planning
The City Council establishes long term financial goals each year as a part of the budgeting process. For FY
2019, the Council continued with the following goals:
(1) Maintain financial stability and strong fiscal management
(2) Sustain existing programs at high service levels
(3) Provide a safe and secure community
(4) Address future transportation needs
(5) Continue to enhance tourism development
(6) Invest in "Quality of Life" capital projects
Grapevine continued to maintain financial stability and strong fiscal management for FY 2019. The General,
Debt Service, Utility Enterprise, and Stormwater Drainage funds ended the fiscal year with fund balances that
meet or exceed their requirement. The City also maintained existing services and transferred from the General
Fund $3,000,000 to the Quality of Life Fund, $3,056,630 Crime District Fund, and $3,279,000 to the Street
Maintenance and Capital Replacement Fund.
As part of the commitment to safety the City began construction of several capital projects including 2 new fire
stations and a new Police Animal Shelter. For Fiscal Year 2019, the Police Department responded to 41,059
calls for service while the Fire Department responded to 6,192 calls for service and 4,291 ambulance runs.
Major Economic Initiatives and Community Development
Grapevine is home to many successful businesses as well as numerous wineries, fine dining, nationally ranked
festivals, and select attractions and resorts. Its economic development efforts are designed to further increase
visitors and tax revenues through projects that emphasize hospitality, entertainment and retail uses.
Grapevine has earned a well-deserved reputation as one of the nation's premier destinations by drawing 15
million visitors annually. Grapevine also boasts exceptional commercial and office facilities that capitalize on
the City's central location in one of the top regions in the nation for business and close proximity to the fourth -
busiest airport in the United States, providing ready access to major U.S. and international markets.
Grapevine continues to experience strong construction growth. In FY 2019, construction values exceeded
$246 million, compared to $276 million in FY 2018. The largest categories in this fiscal year were $61 million
in New Commercial Property and $55 million in new multi -family residences, which accounted for
approximately 47% of the construction values. A total of 44 single-family residential homes were permitted in
FY 2019 valued at $15 million which represents an increase of 23 residences over the previous year. The
following are some other major community development projects and economic initiatives that occurred or
continued during FY 2019.
In FY 2006, the citizens of Grapevine overwhelmingly voted to approve the creation of an economic
development fund for the primary purpose of providing commuter rail service to the City. Since that time, the
City has worked closely with TEXRail to achieve this goal. On January 10, 2019, TEXRail commuter rail
service began in Grapevine. TEXRail is a new 27 -mile commuter rail line that extends from downtown Fort
Worth, across northeast Tarrant County, through North Richland Hills and Grapevine, and into DFW
International Airport's Terminal B. The future train station in Grapevine will consist of an observation tower,
public plaza, parking garage, public meeting spaces, market hall, and retail spaces. In conjunction with the
aforementioned projects, the City has entered into agreements to include a 121 room, AAA, four diamond
level hotel to this project. The project is scheduled to complete in 2020.
The City has proudly announced that Water Logic USA has established a new North American HQ and
Center of Excellence for its business as point of use drinking water dispensers. The company provides
access to fresh purified water to tens of millions of people across both North America and the globe. The
project will create 164 new jobs and more than 1.6 million in capital investment in the City.
In addition, Southland Holdings, a major civil engineering firm with work across the state and region will be
moving their corporate office to 6 acres of land just south of Kubota's HQ on City owned property. Work is
already underway on the design of an 80,000 sf building which will ultimately house 75 to 100 full time
employees.
iv
Awards and Acknowledgements
The City's Fiscal Services Department was awarded the Government Finance Officers Association (GFOA)
Certificate of Achievement for Excellence in Financial Reporting for its comprehensive annual financial report
("CAFR") for the fiscal year ended September 30, 2018. This was the 32nd consecutive year that the City has
received this prestigious award. In order to be awarded a Certificate of Achievement, the City published an
easily readable and efficiently organized CAFR. This report satisfied 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 another certificate
The preparation of this report would not have been possible without the efficient and dedicated services of the
entire Fiscal Services Department. We would also like to express our appreciation to other City department
staff that provided information and contributed to the preparation of this report.
We would also like to thank the members of the City Council for their interest and support in planning and
conducting the financial operations of the City in a responsible and professional manner.
Respectfully submitted by:
Greg Jordan
Chief Financial Officer
Jeff Strawn
Managing Director of Financial Services
I,
l
Nicole Bradshaw, CPA
Director of Internal Audit
V
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Grapevine,
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2018
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Executive Director/CEO
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City of Grapevine
Organization Chart
Citizens of Grapevine
Mayor & Council
City Attorney
Boyle & Lowry Advisory Boards
Municipal Court Judge
Alan Wayland
Parks & Recreation
Kevin Mitchell
Administration
Active Adults
Park Maintenance
Recreation
Aquatics
Athletics Programs
Recreation Programs
Hospitality Services
The REC
Lake Parks
Fire
Chief Darrell Brown
Administration
Prevention
Operations
Training
Emergency Mgmt.
Convention and
Visitors Bureau
Administration, Sales &
Promotions, Heritage
Programs & Preservation,
Convention Center, Festivals
& Events, Grapevine Vintage
Railroad, Grapevine Visitor
Shuttle, Wine Pouring
Society,
Sister Cities Program
City Manager
Bruno Rumbelow
Assistant City Manager
Jennifer Hibbs
Fiscal Services
Greg Jordan
Administration
Finance
Purchasing
Municipal Court
Risk Management
Debt Service
Utility Billing
Utility Admin. Services
City Secretary
Tara Brooks
Administration
Economic Development
Bob Farley
Administration
Public Works
Bryan Beck
Administration
Engineering
Streets
Traffic Operations
Environmental Services
Facility Services
Fleet Services
Water ""
Wastewater
Stormwater Drainage
Development Services
Scott Williams
Administration
Building Inspection
Planning
Information Technology
Tessa Allberg
Police
;.hief Michael Hamlir
Administration
Uniform Operations
Criminal Investigations
Technical Services
Animal Control
Commercial Vehicle
Enforcement
Library
Ruth Chiego
Administration
Golf
Russell Pulley
Administration Golf Maintenance
Geographic Information System "" Pro Shop
Human Resources
Rachel Huitt
Administration
VII
CITY OF GRAPEVINE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
HOME RULE, COUNCIL-MANAGER FORM OF GOVERNMENT
William D. Tate
MAYOR
CITY COUNCIL
Darlene Freed, Mayor Pro Tem
Chris Coy Leon Leal
Paul Slechta Duff O'Dell
Sharron Rogers
Bruno Rumbelow
CITY MANAGER
Jennifer Hibbs
ASSISTANT CITY MANAGER
Greg Jordan
CHIEF FINANCIAL OFFICER
viii
FINANCIAL SECTION
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IV4�7�11
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
Report on the Financial Statements
PATTILLO, BROWN & BILL, L.L.P.
401 West State Highway 6
Waco, Texas 76710
254.772.4901 pbhcpa.com
We have audited the accompanying financial statements of the governmental activities, the business -
type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund
information of the City of Grapevine, Texas (the "City"), as of and for the year ended September 30, 2019,
and the related notes to the financial statements, which collectively comprise the City's basic financial
statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers internal control relevant to the entity's preparation and
fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
1
OFFICE LOCATIONS
TEXAS I Waco Temple I Hillsboro I Houston
NEW MEXICO Albuquerque
``AICPA
GAQC Member
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, the discretely
presented component unit, each major fund, and the aggregate remaining fund information of the City of
Grapevine, Texas, as of September 30, 2019, and the respective changes in financial position, and, where
applicable, cash flows thereof for the year then ended in accordance 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 required supplementary information, 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 basic financial statements. The introductory section, combining and individual
nonmajor fund financial statements and schedules, and statistical section are presented for purposes of
additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and schedules are the responsibility
of management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to
prepare the basic financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America. In our
opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated, in
all material respects, in relation to the basic 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.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 12,
2020, on our consideration of the City's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.
The purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City's internal control over financial reporting and
compliance.
Pa-V� i1oi Z,�
Waco, Texas
March 12, 2020
2
MANAGEMENT'S
DISCUSSION AND ANALYSIS
THIS PAGE LEFT BLANK INTENTIONALLY
Management's Discussion and Analysis
As management of the City of Grapevine (the "City"), we offer readers of the City's financial statements this
narrative overview and analysis of the financial activities of the City for the fiscal year ended September 30,
2019.
aI�/_1zINEYE :110:1410:11&1
• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred
inflows of resources at the close of the most recent fiscal year by $416,703,317 (net position).
• The City's total net position increased by $36,420,924 from operations. $36,870,956 of this
increase was attributable to governmental activities and a decrease of $450,032 was due to
business -type activities.
• At the close of the current fiscal year, the City's governmental funds reported combined fund
balances of $156,678,991, an increase of $1,277,659 from the prior year.
• At the end of the current fiscal year, unassigned fund balance for the General Fund was
$12,185,859 or 22.6% of total General Fund expenditures.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City's basic financial statements.
The City's basic financial statements comprise three components: 1) government -wide financial statements,
2) fund financial statements, and 3) notes to the financial statements. This report also contains supplementary
intended to furnish additional detail to support 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's
finances, in a manner similar to a private -sector business.
The Statement of Net Position presents information on all of the City's assets, deferred outflows (inflows) of
resources, and liabilities, with the difference reported as net position. Over time, increases or decreases in net
position may serve as a useful indicator of whether the financial position of the City is improving or
deteriorating.
The Statement of Activities presents information showing how the City's net position changed during the fiscal
year. All changes in net position are reported as soon as the underlying event giving rise 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 compensated absences).
Both of the government -wide financial statements distinguish functions of the City 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, culture and
recreation, public works, transportation, tourism and economic development. The business -type activities of
the City include water and sewer services and the lake enterprise activities (golf course).
3
The government -wide financial statements include not only the City itself (known as the primary government),
but also include the Heritage Foundation which is a legally separate entity for which the City is financially
accountable. Financial information for this component unit is reported separately from the financial information
presented for the primary government itself. The Tax Increment Reinvestment Zones Numbers One and Two,
the Crime Control and Prevention District (Crime District), and the Grapevine 4B Economic Development
Corporation, although legally separate, function for all practical purposes as departments of the City, and
therefore have been included as an integral part of the primary government.
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 finance -related legal requirements. All of the funds of
the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. The
fund financial statements for governmental funds, proprietary funds, and fiduciary funds can be found in the
financial section of this report.
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 that of the government -wide financial statements,
it is useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government -wide financial statements. By doing so, the reader may better
understand the long-term impact of the City'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.
The City maintains 19 individual governmental funds. Information is presented separately in the governmental
fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund
balances for the General, Hotel Occupancy Tax Fund, Crime District Fund, 4B — Economic Development Fund,
4B — Transit Fund, Debt Service Fund, TIF #1 Capital Projects Fund and General Facilities and Equipment Fund,
all of which are considered to be major funds.
Data from the other 11 governmental funds are combined into a single, aggregate presentation. Individual fund
data for each of these non -major governmental funds is provided in the form of combining statements in the
combining and individual fund statements and schedules section of this report.
Proprietary Funds
The City maintains two different types of proprietary funds. Enterprise funds are used to report the same
functions presented as business -type activities in the government -wide financial statements. The City uses
enterprise funds to account for its Water and Sewer Fund, and Lake Enterprise Fund (golf course). Internal
service funds are an accounting device used to accumulate and allocate costs internally among the City's
various functions. The City uses an internal service fund to account for its document management services.
Because these services predominantly benefit the governmental rather than business -type functions, they
have been included within the governmental activities in the government -wide financial statements.
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 Water and Sewer
Fund and the Lake Enterprise Fund, which are both considered to be major funds.
4
Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary
funds are not reflected in the government -wide financial statements because the resources of those funds are
not available to support the City's own programs. The accounting used for fiduciary funds is similar to the
accounting used for proprietary funds.
Agency funds, one type of fiduciary fund, are used to report resources held by the City in a custodial capacity
for individuals, private organizations, or other governments. Agency funds are used by the City to account for
funds held for the Employee Activity Fund, the Industrial Development Corporation, and the W.D. Tate
Scholarship Fund. See Note I for additional information pertaining to fiduciary funds.
Notes to the financial statements
The notes provide additional information that is necessary to acquire a full understanding of the data provided
in the government -wide and fund financial statements.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents required
supplementary information. The required supplementary information section of this report includes budgetary
comparison schedules for the General Fund and major special revenue funds with legally adopted budgets
which include the Hotel Occupancy Tax Fund, Crime District Fund, 4B Economic Development Fund, and 413
Transit Fund. This section of the report also includes schedules detailing the City's progress in funding its
liabilities related to providing pension and OPEB benefits to its employees.
The combining and individual fund statements and schedules referred to earlier in connection with nonmajor
governmental funds are presented immediately following the required supplementary information on the City's
pension and OPEB plans.
GOVERNMENT -WIDE OVERALL FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's financial position.
As of September 30, 2019, the City's assets and deferred outflows of resources exceeded liabilities and
deferred inflows of resources by $416,703,317.
Current and other assets
Capital assets
Total assets
Deferred outflows of
resources
Long-term liabilities
Other liabilities
Total liabilities
Deferred inflows of
resources
Net position:
Net investment
CITY OF GRAPEVINE'S NET POSITION
Governmental Activities Business -type Activities Totals
2019 2018 2019 2018 2019 2018
$ 203,336,448 $ 179,649,835 $ 32,287,782 $ 36,878,600 $ 235,624,230 $ 216,528,435
377,806,721 344,986,936 135,600,810 128,598,748 513,407,531 473,585,684
581,143,169 524,636,771 167,888,592 165,477,348 749,031,761 690,114,119
21,967,086 11,497,781 2,302,431 1,229,689 24,269,517 12,727,470
289,074,649 264,986,869 22,942,098 21,333,900 312,016,747 286,320,769
29,328,287 25,550,915 4,842,425 3,051,607 34,170,712 28,602,522
318,402,936 290,537,784 27,784,523 24,385,507 346,187,459 314,923,291
9,161,829 7,652,986 1,248,673 713,671 10,410,502 8,366,657
in capital assets
241,514,277
226,571,617
131,141,096
125,603,797
372,655,373
352,175,414
Restricted
95,250,803
80,077,822
3,713,745
4,187,117
98,964,548
84,264,939
Unrestricted
( 61,219,590)
( 68,705,657)
6,302,986
11,816,945
( 54,916,604)
( 56,888,712)
Total net position
$ 275,545,490
$ 237,943,782
$ 141,157,827
$ 141,607,859
$ 416,703,317
$ 379,551,641
5
The largest portion of the City's net position ($372,655,373) reflects its investment in capital assets (e.g., land,
building, equipment, improvements, construction in progress, and infrastructure), less any debt used to
acquire capital assets still outstanding. The City uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City's investment in 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 cannot be used to liquidate these liabilities.
An additional portion of the City's net position represents resources that are subject to external restrictions on
how they may be used. Restricted net position includes (1) use of impact fees for construction purposes
($3,713,745), (2) debt service ($18,049,590), (3) capital projects ($58,590,543), (4) court security and
technology ($404,011), (5) public safety ($746,509), (6) records preservation ($9,893), (7) economic
development ($3,553,120), (8) transportation ($16,961), (9) culture and recreation ($192,671), and (10)
tourism ($13,687,505).
For fiscal year-end 2019, the City is able to report positive balances in two categories of net position for the
City as a whole. Unrestricted net position is a deficit for the governmental activities and in total for the City.
This is due in part to the recognition of the net pension liability under the requirements of GASB Statement
No. 68, the recognition of the net OPEB liability under GASB Statement No. 75, and also due to the fact that
the City has a substantial amount of debt related to TIF #2 which is not capital -related.
6
Analysis of the City's Operations
The following table provides a summary of the City's operations for the year ended September 30, 2019, and
2018:
CITY OF GRAPEVINE'S CHANGES IN NET POSITION
Governmental Activities
Business -type Activities
Totals
2019
2018
2019
2018
2019
2018
Revenues:
Program revenues:
Charges forservices
$ 19,951,339
$ 21,295,533
$ 27,601,935
$ 31,397,665
$ 47,553,274
$ 52,693,198
Operating grants and
contributions
992,824
2,200,146
-
-
992,824
2,200,146
Capital grants and
contributions
23,230,376
5,006,869
6,308,642
4,984,062
29,539,018
9,990,931
General revenues:
P ro pertytaxes
30,848,837
28,561,385
-
-
30,848,837
28,561,385
Hotel occupancytaxes
20,767,302
19,875,456
20,767,302
19,875,456
Sales taxes
59,297,844
56,029,012
59,297,844
56,029,012
M ixed beverage taxes
2,145,940
1,792,674
2,145,940
1,792,674
Franchise taxes
6,898,111
7,144,793
-
-
6,898,111
7,144,793
Investment earnings
3,783,555
2,736,937
650,207
579,693
4,433,762
3,316,630
Gain on sale of capital assets
2,075,942
261,806
-
-
2,075,942
261,806
Miscellaneous
420,084
331,280
-
420,084
331,280
Total revenues
170,412,154
145,235,891
34,560,784
36,961,420
204,972,938
182,197,311
Expenses:
General government
18,382,135
19,248,979
-
-
18,382,135
19,248,979
Public safety
38,471,701
35,954,134
38,471,701
35,954,134
Culture and recreation
21,340,649
19,596,646
21,340,649
19,596,646
Public works
17,929,564
16,825,724
17,929,564
16,825,724
Transportation
10,046,960
9,466,562
10,046,960
9,466,562
Eco no m ic develo pm ent
5,122,449
14,936,191
5,122,449
14,936,191
Tourism
23,886,464
21,561,351
23,886,464
21,561,351
Interest on long-term debt
5,311,983
5,173,776
-
-
5,311,983
5,173,776
Water and sewer
-
-
23,901,013
22,411,243
23,901,013
22,411,243
Lake enterprise
-
-
4,159,096
3,216,504
4,159,096
3,216,504
Total expenses
140,491,905
142,763,363
28,060,109
25,627,747
168,552,014
168,391,110
Increases in net position
before transfers
29,920,249
2,472,528
6,500,675
11,333,673
36,420,924
13,806,201
Transfers
6,950,707
3,019,894
( 6,950,707)
( 3,019,894)
Change in net position
36,870,956
5,492,422
( 450,032)
8,313,779
36,420,924
13,806,201
Net position, beginning
237,943,782
262,262,744
141,607,859
136,789,411
379,551,641
399,052,155
Prior period adjustment
730,752
( 29,811,384)
-
( 3,495,331)
730,752
( 33,306,715)
Net position, beginning (restated)
238,674,534
232,451,360
141,607,859
133,294,080
380,282,393
365,745,440
Net position, ending
$ 275,545,490
$ 237,943,782
$ 141,157,827
$ 141,607,859
$ 416,703,317
$ 379,551,641
Governmental activities — Governmental activities increased the City's net position by $36,870,956 from
operations. Broadly speaking, this increase can be attributed to a significant increase in revenues coupled
with a decrease in expenses.
In total, revenues for fiscal year 2019 were 17.3% higher than the previous fiscal year and the City experienced
increases in several categories of revenue. The largest of these increases, capital grants and contributions,
was a result of the City recording intergovernmental revenue for the train station construction project for
$20,000,000. Another increase came from property taxes, which can be attributed to increased tax appraisal
valuations as the overall tax rate for the City remained flat between FY 2018 and FY 2019. Additionally, hotel
occupancy, sales, and mixed beverage taxes all experienced increases which were caused by an acceleration
in economic activity within the City.
7
The City's operating expenses for 2019 decreased by $2,271,458 or 1.6%. The primary reason for this change
was that TIF #1 project expenses decreased from the prior year by $9.6 million while other expenses
increased. These increases include a $2.5 million for public safety, $1.7 million for culture and recreation, and
$2.3 million for Tourism. Budgeted payroll increases (2.5% market adjustment and an additional 2-5% for merit
and steps) and changes to how the City allocated insurance related costs made up most of the changes in
expenses for these functions for FY 2019. Other increases can be attributed to costs incurred to restore
damages due to flooding at Grapevine Lake.
Governmental Activities Revenues By
Source
$60,000,000 °--
$50,000,000 -••-
$40,000,000 -___-
$30,000,000
$20,000,000
$10,000,000
$0
SALES TAXES PROPERTY CHARGESFOR HOTEL CAPITAL FRANCHISE OTHER
TAXES SERVICES OCCUPANCY GRANTS AND TAXES
TAXES CONTRIBUTIONS
m2019o2018
Governmental Activities - Functional Expenses Comparison
$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000 JIM
PUBLIC SAFETY GENERAL CULTUREAND TOURISM PUBLIC WORKS ECONOMIC TRANSPORTATION INTEREST ON
GOVERNMENT RECREATION DEVELOPMENT LONG-TERM DEBT
02019 ■2018
8
Business -type activities — In total, the business -type activities decreased the City's net position by $450,032.
Water and Sewer Utilities increased net position by $489,659 while Lake Enterprise (golf) decreased net
position by $939,691.
The change in net position for the business -type activities was impacted by the Water and Sewer Fund in the
following ways: (1) the Water and Sewer Fund received $5.9 million in capital contributions of easements and
infrastructure from developers during FY 2019, (2) the City experienced decreased consumption demand as
a result of higher rainfall for FY 2019 which decreased charges for services revenue by $2.4 million, (3) water
purchases, storage and treatment costs decreased by approximately $1.6 million for FY 2019 as a result of
decreased demand, and (4) budgeted increases in salaries and benefits expenses resulted in actual increased
for FY 2019 of $1.7 million or 4.9%.
The Lake Enterprise Fund (golf course) had an impact on the change in net position for the business -type
activities because of a decline in operations over the fiscal year related to heavy rainfall and flooding at Lake
Grapevine and because of the closure of the main road leading to the golf course due to structural issues.
Given this, revenues were still able to increase by $192,402 and related expenses increased in total by
$947,638 or 2.95%, which included budgeted salary increases ranging from 2.5-5%.
Business -type Activities Revenue and Expense
Comparison
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
2019 2018
■Operating Revenues ■Expenses
9
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
Governmental funds — The focus of the City'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 discretionary use as they represent the portion of fund balance which
has not yet been limited to use for a particular purpose by either an external party, the City itself, or a group
or individual that has been delegated authority to assign resources for use for particular purposes by the City
Council.
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances
of $156,678,991, an increase of $1,277,659 compared with the prior year. Unassigned fund balance is
$7,695,414 (4.9%), which is available for spending at the City's discretion. The remainder of fund balance is
not available for new spending because it is (1) nonspendable ($1,362,854) (2) restricted for debt service,
capital projects, court security and technology, public safety, economic development, transportation, tourism,
records preservation and culture and recreation programs ($104,006,685) (3) committed for stormwater
drainage and public arts ($2,770,436) (4) or assigned for economic development, capital projects, tourism,
public safety, culture and recreation programs, and OPEB plan contributions ($40,843,602).
Significant changes in fund balances of major funds are as follows:
General Fund — The General Fund is the chief operating fund of the City. At the end of FY 2019, unassigned
fund balance of the General Fund was $12,185,859, while total fund balance equaled $14,295,271. 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 General Fund expenditures. Unassigned fund balance represents approximately 22.6%
of total General Fund expenditures, while the total fund balance represents approximately 26.5% of that same
amount.
The fund balance of the General Fund decreased by $1,849,773 for FY 2019. Revenues increased in the
General Fund from FY 2018 to FY 2019 by $2,117,515. As mentioned previously in connection with the
governmental activities, the largest increases in revenues were from property, sales and mixed beverage
taxes. Property taxes increased by 3.82% or $433,059, sales taxes increased 5.58% or $1,577,019, mixed
beverage taxes increased by 19.71 % or $353,266, and total revenues increased by 3.65% or $2,113,802 year
over year. Property tax revenue increases are the result of growth in appraised values for FY 2019. Sales
and mixed beverage tax increases can be attributed to general economic gains in our local economy following
the expansion of hotels, restaurants, and other businesses within the City as management continuously seeks
to foster growth.
The primary reason for expenditures increasing across almost all functions was related to an increase in
salaries and benefits costs. These costs grew as a 2.5-7.5% increase in wages was allocated as a part of the
FY 2019 budget. Costs have also increased for the City's Parks and Recreation Department related to grounds
maintenance as landscaping projects have been completed around the City over the last few years.
Additionally, operating transfers were made to capital projects funds as budgeted, including $3,000,000 to the
Quality of Life Fund. Operating transfers to the Crime District Fund increased to over $3 million for FY 2019
to help fund the increasing salary costs seen in that fund, and an additional transfer of $3,200,000 was made
to the Capital Acquisition Fund to offset capital outlays planned in the FY 20 budget.
Special Revenue — Hotel Occupancy Tax Fund — Fund balance in the Hotel Occupancy Tax Fund increased
for FY 2019 by $3,245,402. This increase can primarily be attributed to an increase in hotel occupancy taxes
received which is the result of an overall gains made in the local economy and FY 2019 is the first full year
that includes the Gaylord Texan Resort expansion that opened in late FY 2018. The project increased the
number of rooms by 303 and has also provided the facility with an additional 86,000 square feet of meeting
space.
Expenditures in the Hotel Occupancy Tax Fund increased from $20,788,326 in FY 2018 to $23,608,226 in FY
2019. This increase ($2,819,900) was budgeted for in FY 2019 and even with this increase, expenditures
ended up $1,444,514 under budget for FY 2019.
10
Salaries were increased in this fund in accordance with budget from 2.5-4.5%, but, due to turnover, salaries
and related benefit costs remained largely under budget. Additionally, marketing and promotional expenditures
were budgeted to exceed $4 million for FY 2019 but these cost ended the year at only $3.3 million, but this
was still an increase of almost $1 million over the prior year.
Special Revenue — Crime District Fund — Fund balance of the Crime District Fund decreased by $285,945.
Sales tax revenues, which are the primary funding source of the Crime District Fund, performed better than
budgeted expectations for FY 2019 which was also an increase of $893,385 over FY 2018. Although in total
revenues performed better than budget, expenditures exceeded budget by over $543,428. These overages
can be primarily attributed to salary and benefit cost overruns.
Special Revenue — 413 — Economic Development — The 413 -Economic Development fund balance increased
by $5,732,378 over last fiscal year. This increase can be primarily attributed to the sale of land. The City
received proceeds from this sale in the amount of $4,208,462. Expenditures in this fund stayed consistent with
the prior year while sales tax collections increased $137,367 because of previously mentioned economic gains
seen in the local economy.
Special Revenue — 413 — Transit — The 4B -Transit fund balance increased by $8,177 over last fiscal year.
Sales tax collected in this fund has been pledged to the Fort Worth Transit Authority (the "T"). Any sales tax
collections in this fund, less half of the operating costs of the City's visitor shuttle service, are distributed to
the "T" to help fund commuter rail service in Grapevine. Sales taxes in this fund also increased for the current
period, over FY 2018, because of general economic gains in the local economy, and as the revenues in this
fund increase, so do the corresponding expenditures.
Debt Service Fund — The total fund balance of $7,749,766 in the Debt Service Fund is restricted for the
payment of debt obligations. This balance has declined by $1,169,001 and this is attributable to the City
issuing refunding bonds which resulted in excess expenditures over receipts.
Capital Projects — TIF #1 — The net change in fund balance for the TIF #1 capital projects fund for FY 2019
was $1,236,760. This decrease can be attributed to contractual distributions made by the City to the school
district to fund the final stages of construction of two multipurpose facilities. Expenditures related to these
projects have decreased over the prior year as these projects have neared completion.
Capital Projects — General Facilities and Equipment — The fund balance decreased $864,718 from the prior
year. The primary project contributing to the capital outlay of $32,923,636 in this fund is the Grapevine Main
train station. Additionally, $23,465,000 in general obligation bonds were issued in FY 2019. These bonds were
issued to fund the construction of animal shelter facilities, fire stations, and a multi -use facility and clubhouse
at the Grapevine Municipal Golf Course.
Proprietary Funds — The City of Grapevine's proprietary funds provide the same type of information found in the
government -wide financial statements, but in more detail. Factors concerning the finances of the proprietary
funds have already been addressed in the discussion of the City's business -type activities.
General Fund Budgetary Highlights
Significant amendment changes:
There were no changes to budgeted revenues or expenditures for the fiscal year 2019.
Significant budget variances:
Revenues exceeded the budget by $607,728 primarily due to increases in property, sales and mixed beverage
taxes. These revenues exceeded budget because of better than expected economic conditions within the
City for FY 2019 and because property valuations increased for FY 2019.
11
Expenditures, in total, were under budget by $1,112,583. Excess salary and related benefit expenditures as
well as unbudgeted capital outlay and debt service expenditures led to the negative variances seen within the
General Fund.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital assets—The City's investment in capital assets for its governmental and business -type activities as
of September 30, 2019, amounts to $513,424,623 (net of accumulated depreciation). This investment in
capital assets includes land, buildings, improvements, machinery and equipment, infrastructure, intangible
assets and construction in progress. The total net increase in the City's investment in capital assets for the
current fiscal year was $39,838,939 (8%).
Major capital asset events during the current fiscal year included the following:
• Grapevine Main and Harvest Hall construction of $29,025,174 was added to construction in progress.
• Construction in progress additions of $3,723,603 were added for the rebuild/remodel of 4 fire stations,
along with $580,119 added for the new Bark Park.
• Acquisition of vehicles and equipment totaling $2,874,295, including $424,551 related to tourism,
$280,820 related to public safety, $1,226,260 related to public works, and $701,315 related to culture
and recreation.
• Oak Grove Softball renovations of $5,135,415 were added to construction in progress.
• Parks and recreation improvement projects of $3,273,552 were completed, including $2,316,207 for
the Green Ribbon project and $793,386 related to Botanical Gardens and Bessie Mitchell House
Improvements.
• Street construction totaling $1,155,653 was added to construction in progress related to Dallas Road,
Glade Road, Nash Street, and Berry Street.
• Streets projects of $707,698 were completed and transferred to infrastructure assets, including S.
Austin Street and S. Ruth Street improvements.
• The Water and Sewer Fund completed $753,462 in projects, which extended and improved the City's
water and sewer system. Donated water and sewer assets totaled $5,982,472.
CITY OF GRAPEVINE'S CAPITAL ASSETS AT YEAR-END
Total $ 377,806,721 $ 344,986,936 $ 135,600,810 $ 128,598,748 $ 513,407,531 $ 473,585,684
Additional information on the City's capital assets can be found in Note V of the notes to the financial
statements.
12
Governmental Activities
Business -type Activities
Totals
2019
2018
2019
2018
2019
2018
Land $
35,136,147
$ 37,257,669
$ 593,970
$ 593,970
$ 35,730,117 $
37,851,639
Right-of-way/easements
78,561,656
78,359,677
48,705,515
44,492,955
127,267,171
122,852,632
Construction in progress
71,385,628
32,480,427
5,431,218
2,177,296
76,816,846
34,657,723
Buildings
94,212,671
95,488,055
661,923
705,280
94,874,594
96,193,335
Improvements other
than buildings
25,924,027
24,586,781
1,163,853
1,551,452
27,087,880
26,138,233
Machinery and equipment
16,226,083
17,394,686
2,003,659
1,748,655
18,229,742
19,143,341
Water storage rights
-
-
27,061
44,150
27,061
44,150
Infrastructure
56,360,509
59,419,641
77,013,611
77,284,990
133,374,120
136,704,631
Total $ 377,806,721 $ 344,986,936 $ 135,600,810 $ 128,598,748 $ 513,407,531 $ 473,585,684
Additional information on the City's capital assets can be found in Note V of the notes to the financial
statements.
12
Long-term debt—At the end of the current fiscal year, the City had total bonded debt outstanding of
$186,703,232. Of this amount, $155,223,082 comprises debt backed by the full faith and credit of the City.
[elk sK0191c7:7_1»v/III, 1ARK01111j1.'1/_1►III IZ14 *]ZIORY-11ZIII ZWil 311111:V_\r'/:F_1:a4ZII]
$ 177,201,706 $ 165,676,713 $ 9,501,526 $ 10,793,444 $ 186,703,232 $ 176,470,157
Additional information on the City's long-term debt can be found in Note IX of the notes to the financial
statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES
In the fiscal year 2020 budget, total City revenues are budgeted at $184.2 million, an increase of $6.3 million
(3.5%) from the previous year. Certified assessed valuations, including estimated values on properties under
protest, increased by 6.4% for the FY 2020 budget compared to an increase of 8.6% for FY 2019. In response
to the projected growth in values, the City lowered the tax rate to $0.284271 per $100 of valuation.
The economy continues to be strong for the City and the Dallas -Fort Worth Metroplex in general. The City
continues to focus on quality of life, economic development and cultural, educational and recreational
amenities the community has to offer.
The General Fund reserve requirement is expected to remain at approximately 22% of budgeted expenditures
for the fiscal year 2020. This exceeds the requirement of 20% of budgeted expenditures.
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
The financial report is designed to provide our citizens, customers, investors and creditors with a general
overview of the City's finances. If you have questions about this report or need additional information, contact
the Finance Division, City of Grapevine, 200 S. Main Street, Grapevine, Texas 76051.
13
Governmental Activities
Business -type Activities
Totals
2019
2018
2019
2018
2019
2018
General obligation bonds
$ 92,055,000
$ 70,080,000
$ 895,000
$ 1,730,000
$ 92,950,000 $
71,810,000
Certificates of obligation
41,927,553
49,658,143
8,200,000
8,600,000
50,127,553
58,258,143
Revenue bonds
30,015,000
32,480,000
-
-
30,015,000
32,480,000
Contractual obligations
4,755,080
5,505,000
4,755,080
5,505,000
Tax notes
605,000
1,195,000
-
-
605,000
1,195,000
Premium on bonds issued
7,844,073
6,758,570
406,526
463,444
8,250,599
7,222,014
$ 177,201,706 $ 165,676,713 $ 9,501,526 $ 10,793,444 $ 186,703,232 $ 176,470,157
Additional information on the City's long-term debt can be found in Note IX of the notes to the financial
statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES
In the fiscal year 2020 budget, total City revenues are budgeted at $184.2 million, an increase of $6.3 million
(3.5%) from the previous year. Certified assessed valuations, including estimated values on properties under
protest, increased by 6.4% for the FY 2020 budget compared to an increase of 8.6% for FY 2019. In response
to the projected growth in values, the City lowered the tax rate to $0.284271 per $100 of valuation.
The economy continues to be strong for the City and the Dallas -Fort Worth Metroplex in general. The City
continues to focus on quality of life, economic development and cultural, educational and recreational
amenities the community has to offer.
The General Fund reserve requirement is expected to remain at approximately 22% of budgeted expenditures
for the fiscal year 2020. This exceeds the requirement of 20% of budgeted expenditures.
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
The financial report is designed to provide our citizens, customers, investors and creditors with a general
overview of the City's finances. If you have questions about this report or need additional information, contact
the Finance Division, City of Grapevine, 200 S. Main Street, Grapevine, Texas 76051.
13
THIS PAGE LEFT BLANK INTENTIONALLY
BASIC
FINANCIAL STATEMENTS
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
STATEMENT OF NET POSITION
SEPTEMBER 30, 2019
Cash and investments $
161,634,047 $
Component
Primary Government
Unit
Governmental Business -type
Heritage
Activities Activities Total
Foundation
ASSETS
Cash and investments $
161,634,047 $
20,570,841 $
182,204,888 $
547,383
Receivables, net:
Taxes
12,579,047
-
12,579,047
-
Accounts
1,751,714
3,405,690
5,157,404
Notes
3,858,000
-
3,858,000
Internal balances
695,436 (
695,436)
-
-
Due from primary government
-
-
-
7,410
Due from other governments
21,104,359
-
21,104,359
-
Inventory
541,411
84,347
625,758
Accrued interest
88,281
1,772
90,053
32
Prepaid expenses
467,458
40,256
507,714
Deposits
4,907
-
4,907
Restricted assets:
Cash and investments
-
8,880,312
8,880,312
Assets held for sale
611,788
-
611,788
-
Capital assets (net of accumulated depreciation):
Non -depreciable
185,083,431
54,730,703
239,814,134
450,067
Depreciable
192,723,290
80,870,107
273,593,397
691,994
Total assets
581,143,169
167,888,592
749,031,761
1,696,886
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions
17,095,372
1,602,414
18,697,786
-
Deferred outflows related to OPEB
4,187,562
619,692
4,807,254
Deferred loss on bond refunding
684,152
80,325
764,477
Total deferred outflows of resources
21,967,086
2,302,431
24,269,517
-
LIABILITIES
Accounts payable
16,163,676
3,080,181
19,243,857
9,015
Contracts and retainage payable
2,846,851
205,080
3,051,931
-
Accrued and other liabilities
3,971,814
522,949
4,494,763
Developer deposits
1,588,206
-
1,588,206
Interest payable
793,633
37,796
831,429
Due to component unit
7,410
-
7,410
Due to other governments
211,866
211,866
-
Unearned revenue
3,744,831
-
3,744,831
1,955
Customer deposits
-
996,419
996,419
-
Noncurrent liabilities:
Due in one year
13,992,461
929,980
14,922,441
Due in more than one year
275,082,188
22,012,118
297,094,306
-
Totalliabilities
318,402,936
27,784,523
346,187,459
10,970
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions
1,974,708
185,096
2,159,804
-
Deferred inflows related to OPEB
7,187,121
1,063,577
8,250,698
Total deferred inflows of resources
9,161,829
1,248,673
10,410,502
NET POSITION
Net investment in capital assets
241,514,277
131,141,096
372,655,373
1,142,061
Restricted for:
Use of impact fees
-
3,713,745
3,713,745
-
Debt service
18,049,590
-
18,049,590
Capital projects
58,590,543
58,590,543
Court security and technology
404,011
404,011
Public safety
746,509
746,509
Records preservation
9,893
9,893
Economic development
3,553,120
3,553,120
Transportation
16,961
16,961
Culture and recreation
192,671
192,671
Tourism
13,687,505
-
13,687,505
-
Unrestricted (
61,219,590)
6,302,986 (
54,916,604)
543,855
Total net position $
275,545,490 $
141,157,827 $
416,703,317 $
1,685,916
The accompanying notes are an integral
part of these financial statements.
14
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
STATEMENT OF ACTIVITIES
SEPTEMBER 30, 2019
Functions/Programs
Expenses _
Primary government:
2,199,716
Governmental activities:
-
General government
$ 18,382,135 $
Public safety
38,471,701
Culture and recreation
21,340,649
Public works
17,929,564
Transportation
10,046,960
Economic development
5,122,449
Tourism
23,886,464
Interest on long-term debt
5,311,983
Total governmental activities
140,491,905
Business -type activities:
Water and sewer
Lake Enterprise
Total business -type activities
Total primary government
Component unit:
Heritage Foundation
The accompanying notes are an integral
part of these financial statements.
23,901,013
4,159,096
28,060,109
Program Revenue
Operating
Charges for Grants and Capital Grants
Services Contributions and Contributions
2,049,869 $
115,585 $
201,979
2,199,716
673,363
-
4,393,531
111,157
300,000
3,673,585
92,719
2,692,785
-
-
20,035,612
7,634,638
-
-
ly,y)Z) 1 y yyL,t5L4 L3,L3u,3/0
24,278,495 - 6,308,642
3,323,440 - -
27,601,935 - 6,308,642
$ 168,552,014 $ 47,553,274 $ 992,824 $ 29,539,018
$ 174,685 $ 22,293 $ 108,497 $ 300
General revenues:
Taxes:
Property
Franchise
Hotel occupancy
Sales
Mixed beverage
Unrestricted investment income
Gain on sale of capital assets
Miscellaneous
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning
Prior period adjustment
Net position - beginning, as restated
Net position - ending
15
Net (Expense) Revenue and Changes in Net Position
Primary Government
Governmental Business -type
Component
Unit
Activities Activities Total Heritage Foundation
$( 16,014,702) $
( 35,598,622)
( 16,535,961)
( 11,470,475)
9,988,652
( 5,122,449)
( 16,251,826)
( 5,311,983)
( 96,317,366)
6,686,124
( 835,656)
- 5,850,468
$( 96,317,366) $ 5,850,468
$ 30,848,837
6,898,111
20,767,302
59,297,844
2,145,940
3,783,555
2,075,942
420,084
6,950,707
133,188,322
36,870,956
237,943,782
730,752
238,674,534
$ 275,545,490
650,207
( 6,950,707
( 6,300,500)
( 450,032)
141,607,859
141,607,859
$ 141,157,827
$( 16,014,702) $ -
( 35,598,622) -
( 16,535,961) -
( 11,470,475) -
9,988,652 -
( 5,122,449) -
( 16,251,826) -
( 5,311,983) -
( 96,317,366) -
6,686,124
( 835,656)
5,850,468
$( 90,466,898) $
$ 30,848,837
6,898,111
20,767,302
59,297,844
2,145, 940
4,433,762
2,075,942
420,084
126,887,822
36,420,924
379,551,641
730,752
380,282,393
$ 416,703,317
16
( 43,595)
6,813
9,182
15,995
( 27,600)
1,713,516
1,713,516
$ 1,685,916
CITY OF GRAPEVINE, TEXAS
BALANCE SHEET
GOVERNMENTALFUNDS
SEPTEMBER 30, 2019
Special Revenue
Hotel
Crime
4B -Economic
General
Occupancy Tax
District
Development
413 -Transit
ASSETS
Cash and investments $
6,938,122 $
23,321,289 $
$ 11,262,157
$ 686,284
Receivables (net of allowances
for uncollectibles):
Accounts
1,358,318
57,206
40,123
-
Taxes
5,837,887
1,501,354
2,494,093
738,860
1,822,138
Accrued interest
924
2,527
14
664
40
Notes
-
-
-
-
-
Inventory
532,803
8,608
-
Due from other funds
6,042,889
-
-
-
Due from other governments
213,033
-
6,917
-
Prepaid items
321,934
119,537
25,987
-
Deposits
4,907
-
-
-
Assets held for sale
349,078
262,710
-
-
-
Total assets
21,599,895
25,273,231
2,527,011
12,041,804
2,508,462
LIABILITIES
Accounts payable
1,929,731
2,967,599
375,497
184,476
2,491,501
Accrued liabilities
2,761,610
352,188
770,974
26,944
-
Due to other funds
-
-
2,418,966
-
Due to component unit
-
7,410
-
-
Due to other governments
209,822
596
-
Unearned revenue
1,699,693
1,682,194
6,917
-
Developer deposits
-
-
-
-
Total liabilities
6,600,856
5,009,987
3,572,354
211,420
2,491,501
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue
703,768
-
-
-
-
Total deferred inflows
of resources
703,768
-
-
FUND BALANCES (DEFICITS)
Nonspendable:
Inventory
532,803
8,608
-
-
Prepaid items
321,934
119,537
25,987
-
Deposits
4,907
-
-
-
Property held for sale
349,078
-
-
Restricted for:
Debt service
-
-
1,402,400
Capital projects
-
-
Court security and technology
-
-
Economic development
-
1,263,734
Public safety
-
-
Records preservation
-
-
Tourism
13,687,505
-
-
Transportation
-
-
16,961
Culture and recreation
-
-
-
Committed for:
Stormwater drainage operations
-
-
Public arts
-
-
Assigned for:
Economic development
-
9,164,250
Capital projects
-
-
Tourism
6,447,594
-
Culture and recreation
-
-
Public safety
-
-
-
OPEB
900,690
-
-
-
Unassigned
12,185,859
- (
1,071,330)
-
-
Total fund balances
14,295,271
20,263,244 (
1,045,343)
11,830,384
16,961
Total liabilities, deferred
inflows of resources and
fund balances $
21,599,895 $
25,273,231 $
2,527,011
$ 12,041,804
$ 2,508,462
The accompanying notes are an integral
part of these financial statements.
17
Capital Projects
General Nonmajor Total
Facilities and Governmental Governmental
Debt Service TIF #1 Equipment Funds Funds
$ 7,725,173 $ 9,400,534 $ 63,390,244 $ 38,735,523 $ 161,459,326
10,877 285,190 1,751,714
184,715 - - 12,579,047
451 138 81,527 1,986 88,271
- 3,858,000 - 3,858,000
- - 541,411
- - 6,042,889
20,500,000 384,409 21,104,359
- - 467,458
4,907
611,788
7,921,216 9,400,672 87,829,771
39,407,108
208,509,170
- - 6,261,448
1,947,555
16,157,807
-
60,098
3,971,814
-
2,928,487
5,347,453
2,369,686
-
7,410
-
1,448
211,866
8,333
347,694
3,744,831
400,000
1,188,206
1,588,206
- 6,669,781
6,473,488
31,029,387
13,687,505
171,430 19,785,612
139,982
20,800,792
16,961
171,430 19,785,612
139,982
20,800,792
541,411
467,458
4,907
349,078
7,749,786 -
-
9,439,307
18,591,493
- 7,030,986
53,018,792
6,674,444
66,724,222
-
-
404,011
404,011
2,369,686
-
3,633,420
-
746,509
746,509
9,893
9,893
-
13,687,505
-
16,961
192,671
192,671
1,778,396
1,778,396
992,040
992,040
-
-
9,164,250
8,355,586
15,751,152
24,106,738
-
-
6,447,594
220,476
220,476
3,854
3,854
-
900,690
- -
- (
3,419,115)
7,695,414
7,749,786 9,400,672
61,374,378
32,793,638
156,678,991
$ 7,921,216 $ 9,400,672 $
87,829,771 $
39,407,108 $
208,509,170
18
CITY OF GRAPEVINE, TEXAS
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2019
Total fund balances - governmental funds balance sheet
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets used in governmental activities are not reported in the funds.
Certain receivables will not be collected soon enough to pay for the current period's expenditures
and are, therefore, reported as deferred inflows of resources in the funds:
Property taxes
Property tax penalties and interest
Court fines and fees
Ambulance billing
Intergovernmental receivables
Franchise Fees
Other
An internal service fund is used to charge the cost of document management equipment
acquisition and maintenance to individual funds. The assets and liabilities of the internal service
fund are included in governmental activities.
Accrued bond interest is not due and payable in the current period and, therefore, is not reported
in the funds.
Retainage payable is not due and payable in the current period and, therefore, is not reported in
the funds.
Long-term liabilities and deferred losses on bond refundings,
resources, are not due and payable in the current period and,
funds. A summary of these items are as follows:
Long-term liabilities:
Bonds payable
Notes payable
Compensated absences
Sales tax obligation
Deferred outflows of resources:
Deferred losses on bond refundings
reported as deferred outflows of
therefore, are not reported in the
156,678,991
377,806,721
125,764
223,109
166,699
12,546
19,833,625
360,867
78,182
168,862
793,633)
2,846,851)
174,306,626)
605,000)
4,201,857)
2,290,080)
684,152
Included in the items related to long-term liabilities is the recognition of the City's net pension
liability. The net position related to pensions included a deferred outflows of resources in the
amount of $17,095,357, a deferred inflows of resources in the amount of $1,947,708, and the net
pension liability of $50,596,069. ( 35,475,405)
Included in the items related to long-term liabilities is the recognition of the City's net OPEB
liability. The net position related to OPEB included a deferred outflows of resources in the amount
of $4,187,562, a deferred inflows of resources in the amount of $7,187,121, and the net OPEB
liability of $57,075,017. ( 60,074,576)
Net position of governmental activities
The accompanying notes are an integral
part of these financial statements. 19
$ 275,545,490
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
SEPTEMBER 30, 2019
Special Revenue
Hotel
Crime
4B -Economic
General
Occupancy Tax
District
Development
4B -Transit
REVENUES
Property tax $
11,765,849
$ -
$
$ -
$
Hotel occupancy tax
-
20,767,302
-
-
Sales tax
29,863,646
-
14,563,884
4,393,875
10,476,439
Mixed beverage tax
2,145,940
-
-
-
-
Franchise tax
6,435,472
-
-
Licenses and permits
1,969,000
-
-
-
Intergovernmental
380,269
-
13,605
-
Charges for services
5,406,622
7,634,638
-
23,860
Fines and forfeitures
1,509,299
-
88,042
-
-
Investment income
283,313
448,501
190,715
144,125
8,177
Contributions
-
-
-
-
-
Miscellaneous
448,761
29,732
12,737
100
-
Totalrevenues
60,208,171
28,880,173
14,868,983
4,561,960
10,484,616
EXPENDITURES
Current:
General government
15,435,676
-
142,921
-
-
Public safety
16,198,439
-
18,068,637
-
Culture and recreation
13,299,784
-
-
-
Public works
8,524,275
-
-
Tourism
-
22,413,522
-
Economic development
-
1,301,974
-
Transportation
-
-
-
10,046,960
Capital outlay
264,387
1,192,933
-
-
Debt service:
Principal
118,558
-
-
Interest
-
-
-
Payment to bond refunding
escrow agent
-
-
Bond issuance costs
-
-
-
Fiscal agent charges
4,210
1,771
-
-
Total expenditures
53,845,329
23,608,226
18,211,558
1,301,974
10,046,960
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
6,362,842
5,271,947
( 3,342,575)
3,259,986
437,656
OTHER FINANCING SOURCES (USES)
Transfers in
3,907,798
529,479
3,056,630
-
-
Transfers out (
12,276,630)
( 2,556,024)
-
( 1,736,070)
( 429,479)
Sale of capital assets
156,217
-
4,208,462
-
Issuance of debt
-
-
-
Issuance of refunding debt
-
-
Premium on issuance of bonds
-
-
Insurance recoveries
-
-
-
-
Total other financing sources
and uses ( 8,212,615)
( 2,026,545)
3,056,630
2,472,392
( 429,479)
NET CHANGE IN FUND BALANCES (
1,849,773)
3,245,402
( 285,945)
5,732,378
8,177
FUND BALANCES, BEGINNING
15,555,243
17,017,842
( 759,398)
6,098,006
8,784
PRIOR PERIOD ADJUSTMENT
589,801
-
-
-
-
FUND BALANCES, BEGINNING,
RESTATED
16,145,044
17,017,842
( 759,398)
6,098,006
8,784
FUND BALANCES, ENDING $
14,295,271
$ 20,263,244
$( 1,045,343)
$ 11,830,384
$ 16,961
The accompanying notes are an integral
part of these financial statements.
20
589,801
8,918,787 10,637,432 62,239,096 35,685,540 155,991,133
$ 7,749,786 $ 9,400,672 $ 61,374,378 $ 32,793,638 $ 156,678,991
21
Capital Projects
General
Nonmajor
Total
Facilities and
Governmental
Governmental
Debt Service
TIF #1
Equipment
Funds
Funds
$ 12,271,795 $
1,038,974 $
$ 5,806,220
$ 30,882,838
-
-
-
20,767,302
-
59,297,844
-
2,145, 940
182,566
6,618,038
-
1,969,000
750,000
592,580
1,736,454
-
3,087,301
16,152,421
-
-
-
64,899
1,662,240
202,653
101,133
1,641,502
761,246
3,781,365
-
-
-
232,772
232,772
-
-
115,585
338,269
945,184
12,474,448
1,140,107
2,507,087
11,065,853
146,191,398
-
-
219,933
211,543
16,010,073
-
223,274
34,490,350
3,872,853
17,172, 637
3,075,394
11, 599, 669
-
-
22,413,522
2,376,867
1,430,250
5,109,091
-
-
-
10,046,960
-
32,923,636
11,612,706
45,993,662
10,590,590
-
1,854,920
12,564,068
5,261,727
739,778
6,001,505
6,077,493
-
-
6,077,493
23,036
148,815
-
171,851
128,911
2,236
3,414
140,542
22,081,757
2,376,867
33,294,620
23,024,132
187,791,423
( 9,607,309) (
1,236,760) (
30,787,533)
( 11,958,279)
( 41,600,025)
2,454,135
-
5,000,000
9,361,782
24,309,824
-
-
( 358,796)
( 17,356,999)
74,000
-
4,438,679
-
23,465,000
-
23,465,000
5,395,000
-
-
5,395,000
589,173
1,383,815
-
1,972,988
-
-
63,391
63,391
8,438,308
29,922,815
9,066,377
42,287,883
( 1,169,001) (
1,236,760) (
864,718)
( 2,891,902)
687,858
8,918,787
10,637,432
62,239,096
35,685,540
155,401,332
589,801
8,918,787 10,637,432 62,239,096 35,685,540 155,991,133
$ 7,749,786 $ 9,400,672 $ 61,374,378 $ 32,793,638 $ 156,678,991
21
CITY OF GRAPEVINE, TEXAS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
SEPTEMBER 30, 2019
Net change in fund balances - total governmental funds
Amounts reported for governmental activities in the Statement of Activities are different because:
The net revenue/(expense) of certain activities of internal service funds are reported with
governmental activities. This is the change in net position of the internal service fund.
Governmental funds report capital outlays as expenditures. However, in the Statement of
Activities the cost of those assets is allocated over their estimated useful lives and reported
as depreciation. This is the amount of capital outlay recorded in the current period.
Governmental funds do not recognize capital assets contributed by other entities. However,
in the Statement of Activities, the acquisition cost of those assets is recognized as revenue,
then depreciated over their estimated useful lives.
Depreciation on capital assets is reported in the Statement of Activities but does not require
the use of current financial resources. Therefore, depreciation is not reported as
expenditures in the governmental funds.
The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade•
ins, and donations) is to decrease net position.
The issuance of long-term debt (e.g. bonds) provides current financial resources to
governmental funds, while the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither transaction, however, has any
effect on net position. Also, governmental funds report the effect of premiums, discounts, and
similar items when debt is first issued, whereas the amounts are deferred and amortized in
the Statement of Activities. This amount is the net effect of these differences in the treatment
of long-term debt and related items.
Issuance of debt
Repayment of principal of long-term debt
Bond refunding
Amortization of:
Premium on bond issuance
Loss on refunding
Interest is accrued in the government -wide financial statements but not at the fund level. This
represents the change in the accrual during the period.
Current year changes in certain long-term liabilities do not require the use of current financial
resources and, therefore, are not reported as expenditures in governmental funds.
Compensated absences liability
Net OPEB liability
Net Pension liability
Retainage payable
Revenues in the statement of activities that do not provide current financial
resources are not reported as revenues in the funds.
Change in net position of governmental activities
The accompanying notes are an integral
part of these financial statements. 22
687,858
92,848
45,376,098
2,240,248
14,040,439)
2,426,128)
30,832,988)
12,564,068
6,204,629
887,485
292,443)
32,656)
287,138)
1,192,050)
2,178,881)
198,069
19,902,376
$ 36,870,956
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
SEPTEMBER 30, 2019
The accompanying notes are an integral
part of these financial statements. 23
Governmental
Business -type Activities - Enterprise
Funds
Activities
Water
Lake
Internal Service
and Sewer
Enterprise
Total
Fund
ASSETS
Current assets:
Cash and cash equivalents
$ 20,570,841
$ -
$ 20,570,841
$ 174,721
Receivables, net
3,347,317
58,373
3,405,690
-
Accrued interest
1,764
8
1,772
10
Prepaid items
40,256
-
40,256
-
Inventory
-
84,347
84,347
-
Total current assets
23,960,178
142,728
24,102,906
174,731
Noncurrent assets:
Restricted cash and investments:
Bond construction
5,166,567
-
5,166,567
-
Impact fees
3,713,745
-
3,713,745
-
Total restricted cash
and investments
8,880,312
-
8,880,312
-
Capital assets:
Land
548,132
45,838
593,970
-
Easements
48,705,515
-
48,705,515
-
Construction in progress
5,308,799
122,419
5,431,218
-
Buildings
449,395
2,105,843
2,555,238
-
Improvements other than
buildings
-
8,416,221
8,416,221
-
Infrastructure
128,748,543
-
128,748,543
-
Vehicles, machinery and
equipment
4,079,465
1,161,844
5,241,309
56,738
Water storage rights
683,547
-
683,547
-
Less accumulated depreciation
( 55,162,204)
( 9,612,547)
( 64,774,751)
( 6,503)
Net capital assets
133,361,192
2,239,618
135,600,810
50,235
Total noncurrent assets
142,241,504
2,239,618
144,481,122
50,235
Total assets
166,201,682
2,382,346
168,584,028
224,966
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to
pensions
1,183,401
419,013
1,602,414
-
Deferred outflows related to OPEB
423,986
195,706
619,692
-
Deferred loss on bond refunding
80,325
-
80,325
-
Total deferred outflows
of resources
1,687,712
614,719
2,302,431
-
The accompanying notes are an integral
part of these financial statements. 23
CITY OF GRAPEVINE, TEXAS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
(Continued)
SEPTEMBER 30, 2019
LIABILITIES
Current liabilities:
Accounts payable
Accrued liabilities
Due to other funds
Accrued bond interest payable
Retainage payable
Compensated absences
Bonds payable
Net OPEB liability
Customer deposits
Total current liabilities
Noncurrent liabilities:
Bonds payable
Net OPEB liability
Net pension liability
Compensated absences
Total noncurrent liabilities
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to
to pensions
Deferred inflows related to OPEB
Total deferred inflows
of resources
NET POSITION
Net investment in capital assets
Restricted for:
Impact fees
Unrestricted
Total net position
Governmental
Business -type Activities - Enterprise Funds Activities
Water Lake Internal Service
and Sewer Enterprise Total Fund
$ 2,917,756 $
162,425 $
3,080,181 $ 5,869
437,923
85,026
522,949 -
-
695,436
695,436 -
37,796
-
37,796 -
205,080
-
205,080 -
40,112
22,846
62,958 -
840,000
-
840,000 -
18,488
8,534
27,022 -
996,419
-
996,419 -
5,493,574
974,267
6,467,841 5,869
8,661,526
-
8,661,526 -
5,760,297
2,658,861
8,419,158 -
3,502,436
1,240,125
4,742,561 -
120,336
68,537
188,873 -
18,044,595
3,967,523
22,012,118 -
23,538,169
4,941,790
28,479,959 5,869
136,696
48,400
185,096 -
727,688
335,889
1,063,577 -
864,384
384,289
1,248,673 -
128,901,478
2,239,618
131,141,096 50,235
3,713,745 - 3,713,745 -
10,871,618 ( 4,568,632) 6,302,986 168,862
$ 143,486,841 $( 2,329,014) $ 141,157,827 $ 219,097
24
CITY OF GRAPEVINE, TEXAS
STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN NET POSITION - PROPRIETARY FUNDS
SEPTEMBER 30, 2019
The accompanying notes are an integral
part of these financial statements. 25
Governmental
Business -type
Activities - Enterprise Funds
Activities
Water
Lake
Internal Service
and Sewer
Enterprise
Total
Fund
OPERATING REVENUES
Charges for services
$ 23,653,256
$ 3,091,562
$ 26,744,818
$ 156,068
Miscellaneous
625,239
231,878
857,117
-
Total operating revenues
24,278,495
3,323,440
27,601,935
156,068
OPERATING EXPENSES
Salaries and benefits
5,272,997
1,980,781
7,253,778
-
Water purchases, storage,
and treatment
9,509,124
-
9,509,124
-
Maintenance, repairs, and supplies
2,733,868
926,313
3,660,181
56,807
General and administrative
2,955,402
760,771
3,716,173
-
Depreciation
3,130,535
494,681
3,625,216
6,485
Total operating expenses
23,601,926
4,162,546
27,764,472
63,292
OPERATING INCOME (LOSS)
676,569
( 839,106)
( 162,537)
92,776
NONOPERATING REVENUES
(EXPENSES)
Investment income
647,245
2,962
650,207
2,190
Gain (loss) on disposal of property
-
3,450
3,450
-
Interest and fiscal agent charges
( 299,087)
-
( 299,087)
-
Total nonoperating revenues
(expenses)
348,158
6,412
354,570
2,190
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS
1,024,727
( 832,694)
192,033
94,966
Capital contributions
6,308,642
-
6,308,642
-
Transfers out
( 6,843,710)
( 106,997)
( 6,950,707)
( 2,118)
Total capital contributions
and transfers
( 535,068)
( 106,997)
( 642,065)
( 2,118)
CHANGE IN NET POSITION
489,659
( 939,691)
( 450,032)
92,848
TOTAL NET POSITION, BEGINNING
142,997,182
( 1,389,323)
141,607,859
126,249
TOTAL NET POSITION, ENDING
$ 143,486,841
$( 2,329,014)
$ 141,157,827
$ 219,097
The accompanying notes are an integral
part of these financial statements. 25
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
ENDING
(Including $8,880,312 of restricted cash and cash equivalents in the Water and Sewer Fund)
The accompanying notes are an integral
part of these financial statements. 26
Governmental
Business -type Activities - Enterprise
Funds
Activities
Water
Lake
Internal Service
and Sewer
Enterprise
Total
Fund
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash received from customers
$ 24,031,369
$ 3,312,270
$ 27,343,639
$ -
Receipts from interfund charges for
document management services
-
-
-
156,068
Cash paid to employees
( 3,513,059)
( 1,316,837)
( 4,829,896)
-
Cash paid to suppliers
for goods and services
( 13,706,613)
( 1,745,664)
( 15,452,277)
( 53,056)
Net cash provided
by operating activities
6,811,697
249,769
7,061,466
103,012
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Capital contributions
326,170
-
326,170
-
Principal repayment on bonds
( 1,235,000)
-
( 1,235,000)
-
Interest and related fees
paid on long-term debt
( 326,244)
-
( 326,244)
-
Proceeds from the sale of assets
-
3,450
3,450
-
Acquisition and construction
of capital assets
( 4,351,040)
( 149,202)
( 4,500,242)
( 30,883)
Net cash used by capital
and related financing activities
( 5,586,114)
( 145,752)
( 5,731,866)
( 30,883)
CASH FLOWS FROM INVESTING
ACTIVITIES
Interest received on
investments and cash equivalents
651,658
2,980
654,638
2,180
Net cash provided
by investing activities
651,658
2,980
654,638
2,180
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfer out
( 6,843,710)
( 106,997)
( 6,950,707)
( 2,118)
Net cash used by noncapital
financing activities
( 6,843,710)
( 106,997)
( 6,950,707)
( 2,118)
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
( 4,966,469)
-
( 4,966,469)
72,191
CASH AND CASH EQUIVALENTS,
34,417,622
-
34,417,622
102,530
BEGINNING
CASH AND CASH EQUIVALENTS,
$ 29,451,153
$ -
$ 29,451,153
$ 174,721
ENDING
(Including $8,880,312 of restricted cash and cash equivalents in the Water and Sewer Fund)
The accompanying notes are an integral
part of these financial statements. 26
CITY OF GRAPEVINE, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
(Continued)
FOR THE YEAR ENDED SEPTEMBER 30, 2019
The accompanying notes are an integral
part of these financial statements. 27
Governmental
Business -type Activities - Enterprise Funds
Activities
Water
Lake
Internal Service
and Sewer
Enterprise
Total
Fund
RECONCILIATION OF OPERATING
INCOME (LOSS) TO NET CASH
PROVIDED (USED) BY OPERATING
ACTIVITIES
Operating income $
676,569
$( 839,106) $(
162,537)
$ 92,776
Adjustments to reconile operating
income to net cash provided (used)
by operating activities:
Depreciation
3,130,535
494,681
3,625,216
6,485
(Increase) decrease in assets:
Customer receivable (
279,989)
( 11,170) (
291,159)
-
Other assets
13,474
-
13,474
-
Inventories
-
( 13,413) (
13,413)
-
Increase (decrease) in liabilities:
Accounts payable
1,478,307
43,817
1,522,124
3,751
Accrued liabilities
83,816
13,420
97,236
-
Other liabilities
-
( 88,984) (
88,984)
-
Customer deposits
32,863
-
32,863
-
Net OPEB liability
1,425,673
658,067
2,083,740
-
Net pension liability
237,358
( 15,086)
222,272
-
Compensated absences
13,091
7,543
20,634
-
Total adjustments
6,135,128
1,088,875
7,224,003
10,236
Net cash provided
by operating activities $
6,811,697
$ 249,769 $
7,061,466
$ 103,012
SCHEDULE OF NON-CASH CAPITAL AND
RELATED FINANCING ACTIVITIES
Contributions of capital assets $
5,982,472
$ - $
5,982,472
$ -
The accompanying notes are an integral
part of these financial statements. 27
CITY OF GRAPEVINE, TEXAS
STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES
FIDUCIARY FUNDS
SEPTEMBER 30, 2019
ASSETS
Cash and cash equivalents
Total assets
LIABILITIES
Due to beneficiary
Total liabilities
The accompanying notes are an integral
part of these financial statements. 28
Agency
$ 170,666
170,666
170,666
$ 170,666
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Grapevine ("City") is a municipal corporation incorporated under Article XI of the Texas
Constitution (Home Rule Amendment). The City operates under a Council -Manager form of government
and provides such services as are authorized by its charter to advance the welfare, health, safety and
convenience of its citizens.
The accounting and reporting policies of the City relating to the funds included in the accompanying
financial statements conform to generally accepted accounting principles applicable to state and local
governments. The following represents the more significant accounting and reporting policies and
practices used by the City.
A. Reporting Entit
The accompanying financial statements present the City and its component units, entities for which
the City is considered to be financially accountable. Blended component units, although legally
separate entities, are, in substance, part of the City's operations and are appropriately presented as
funds of the primary government. Discretely presented component units, on the other hand, are
reported in a separate column in the government -wide financial statements to emphasize they are
legally separate from the City.
Based on these criteria, the financial information of the following entities has been blended or
discretely presented within the financial statements.
Blended Component Units
Grapevine Tax Increment Financing District Reinvestment Zone Number One and Two (the "TIFs")
were formed to finance and make public improvements under the authority of the Tax Increment
Financing Act. The TIFs are governed by two separate boards of directors that are substantively the
same as the City Council. The chairman of the board is also designated by the City Council. The City
is obligated for the debts of both TIFs.
The Grapevine Crime Control and Prevention District (Crime District) was established to account for
the accumulation and use of sales tax proceeds designated for crime reduction programs. One-half
(1/2) cent of local sales and use tax within the district funds the Crime District. The Board of Directors
of the Crime Control and Prevention District is substantively the same as the City Council. The City is
entitled to and can otherwise access all of the resources of the Crime District.
The Grapevine 4B Economic Development Corporation consists of two funds. The 4B Transit Fund
accounts for funds designated for Grapevine's participation in the commuter rail development project
with the Fort Worth Transit Authority (the "T"). The 4B Economic Development Fund accounts for
funds used to stimulate the local economy, development, and redevelopment opportunities. One-half
(1/2) cent local sales and use tax within the City funds these two blended component units. Three
eighths (3/8th) of one-half cent of the local sales tax is used to fund the 4B Transit Fund. One eighth
(1/8th) of one-half cent of the local sales tax is used to fund the 4B Economic Development Fund. The
Board of Directors of the Grapevine 413 Economic Development Corporation include citizens as
members but is substantively the same as the City Council. The City is entitled to and can otherwise
access all of the resources of the Grapevine 4B Economic Development Corporation.
Complete financial statements for each of the TIF Funds may be obtained from the City of Grapevine,
Finance Division, 200 South Main St., Grapevine Texas 76051. Separate financial statements for the
Crime Control and Prevention District, the 4B Transit Fund, and the 4B Economic Development Fund
are not prepared.
29
Discretely Presented Component Unit
Grapevine Heritage Foundation (the "Foundation") is a Texas nonprofit corporation governed by a 9 -
member board of directors appointed by City Council, which includes a City Council member and the
Director of the City's Convention and Visitor's Bureau. The Foundation's operating budget is subject
to the approval of the City Council. The City is able to impose its will on the Foundation. The board is
not substantively the same as the City Council. The Foundation does not provide services to the City.
Separate financial statements are not prepared for the Heritage Foundation.
B. Government -wide Fund Financial Statements
The basic financial statements include both government -wide (based on the City as a whole) and
fund financial statements. The government -wide financial statements (i.e., the statement of net
position and the statement of activities) report information on all of the nonfiduciary activities of the
primary government and its component units. For the most part, the effect of interfund activity has
been removed from these statements. Governmental activities, which normally are supported by
taxes and intergovernmental revenues, are reported separately from business -type activities, which
rely to a significant extent on fees and charges for support. Likewise, the primary government is
reported separately from certain legally separate component units for which the primary government
is financially accountable.
The government -wide statement of activities demonstrates the degree to which the direct expenses of a
functional category (Public Safety, Culture and Recreation, Tourism, etc.) or segment are offset by
program revenues. Direct expenses are those that are clearly identifiable with specific function or
segment. Program revenues include (1) charges to customers or applicants who purchase, use, or
directly benefit from goods, services, or privileges provided by a given function or segment, and
(2) grants and contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among program revenues
are reported instead as general revenues.
Separate fund based financial statements are provided for governmental funds, proprietary funds,
and fiduciary funds, even though the latter are excluded from the government -wide financial
statements. Major individual governmental funds and major individual enterprise funds are reported
as separate columns in the fund financial statements. GASB Statement No. 34 sets forth minimum
criteria (percentage of assets, liabilities, revenues or expenditures/expenses of either fund category
for the governmental and enterprise combined) for the determination of major funds. The non -major
funds are aggregated in a separate column in the fund financial statements. The non -major funds are
detailed in the combining section of this report.
The City's fiduciary funds are presented in the fund financial statements by type. Since by definition
these assets are being held for the benefit of a third party and cannot be used to address activities or
obligations of the City, these funds are not incorporated into the government -wide statements.
The government -wide focus is more on the sustainability of the City as an entity and the change in
aggregate financial position resulting from the activities of the fiscal period. The focus of the fund
financial statements is on the major individual funds of the governmental and business -type
categories, as well as the fiduciary funds (by category) and the component units. Each presentation
provides valuable information that can be analyzed and compared to enhance the usefulness of the
information.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are
recognized as revenue in the year for which they are levied. Grants and similar items are recognized
as revenue as soon as all eligibility requirements imposed by the provider have been met.
30
Governmental fund level financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon
as they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period.
For this purpose, the City considers revenues to be available if they are collected within 60 days of
the end of the current fiscal period. In applying the susceptible to accrual concept to
intergovernmental revenue, the legal and contractual requirements of the numerous individual
programs are used as guidance. Generally, monies must be expended on a specific purpose or
project before any amounts will be paid to the City; therefore, revenues are recognized based upon
the expenditures recorded. Ad valorem taxes are recognized as revenues in the year for which they
are levied. Sales taxes, franchise taxes, hotel occupancy taxes, charges for services and fines are
recognized as revenue as earned, when measurable and available. Licenses, permits, and
miscellaneous revenues (except earnings on investments) are recorded as revenues when received
in cash because they are generally not measurable until actually received. Investment earnings are
recorded as earned since they are measurable and available.
All proprietary funds are accounted for using the economic resources measurement focus and the
accrual basis of accounting. With this measurement focus, all assets, deferred outflows of resources,
liabilities and deferred inflows of resources associated with the operation of these funds are included
on the statement of net position. Proprietary fund -type operating statements present increases (e.g.,
revenues) and decreases (e.g., expenses) in net position. Proprietary funds distinguish operating
revenues and expenses from nonoperating items. Operating revenues and expenses generally result
from providing services and producing and delivering goods in connection with a proprietary fund's
principal ongoing operations. The principal operating revenues of the City's water and sewer and
municipal golf course are charges to customers for sales and services. Operating expenses for the
enterprise funds include the cost of sales and services, administrative expenses, and depreciation on
capital assets. All revenues and expenses not meeting this definition are reported as non-operating
revenues and expenses.
During the course of operations, the City has activity between funds for various purposes. Any
residual balances outstanding at year end are reported as due from/to other funds and advances
to/from other funds. While these balances are reported in fund financial statements, certain
eliminations are made in the preparation of the government -wide financial statements. Balances
between the funds included in governmental activities (i.e., the governmental funds) are eliminated so
that only the net amount is included as internal balances in the governmental activities column.
Similarly, balances between the funds included in business -type activities (i.e., the enterprise funds)
are eliminated so that only the net amount is included as internal balances in the business -type
activities column.
Further, certain activity occurs during the year involving transfers of resources between funds. In fund
financial statements, these amounts are reported at gross amounts as transfers in/out. While reported
in fund financial statements, certain eliminations are made in the preparation of the government -wide
financial statements. Transfers between the funds included in governmental activities are eliminated
so that only the net amount is included as transfers in the governmental activities column. Similarly,
balances between the funds included in business -type activities are eliminated so that only the net
amount is included as transfers in the business -type activities column. However, interfund services
provided and used are not eliminated in the process of consolidation.
Governmental Funds
The focus of governmental fund measurement (in the fund financial statements) is upon
determination of financial position and changes in financial position (sources, uses, and balances of
financial resources) rather than upon net income. The following is a description of the major
governmental funds of the City:
The City reports the following major governmental funds:
The General Fund accounts for several of the City's primary services (General
Administration, Police Administration, Fire, Public Works, Libraries, Culture and
Recreation, etc.) and is the primary operating fund of the City.
31
The Hotel Occupancy Tax Fund is a special revenue fund that accounts for all hotel
occupancy tax revenues which are restricted by state statute and can only be used on
expenditures related to tourism activities. Additional local revenues generated though
tourism activities are accumulated in this fund and are assigned for use on expenditures
related to tourism.
The Crime District Fund is a special revenue fund that accounts for the accumulation and
use of sales tax proceeds restricted for crime reduction programs.
The 4-B Economic Development Fund accounts for the accumulation of sales tax
restricted for economic development projects and local funds assigned by the City to
stimulate the local economy, development, and redevelopment.
The 4B Transit Fund is a special revenue fund that accounts for the accumulation of sales
taxes restricted to fund the City's participation in the commuter rail development project
with the Fort Worth Transit Authority (the "T").
The Debt Service Fund is used to account for the accumulation of restricted property tax
resources levied for the payment of general long-term debt principal, interest and related
costs of governmental funds.
The Tax Increment Financing (TIF) #1 Capital Proiects Fund is used to account for
capital acquisition and construction, economic incentives, and other expenditures
authorized by the TIF #1 Board of Directors.
The General Facilities and Equipment Fund is a capital projects fund used to account
for the general financing, acquisition, construction and improvements of the City's
buildings and capital equipment.
Proprietary Funds
The focus of proprietary fund measurement is upon determination of operating income, changes in
net position, financial position, and cash flows, which is similar to businesses. The following is a
description of the major proprietary funds of the City:
The Water and Sewer Fund accounts for the operation of the City's water and sewer
utility activities including administration, operation and maintenance of the water and
sewer system, and billing and collection activities. All costs are financed through charges
made to utility customers with rates reviewed regularly and adjusted, if necessary, to
ensure integrity of the fund.
The Lake Enterprise Fund includes the operations of the City's municipal golf course.
The Internal Service Fund accounts for revenues and expenses related to document
management services provided to parties inside the City on a cost -reimbursement basis.
Because the principal users of the internal services are accounted for in the City's
governmental activities, this fund is included in the "Governmental Activities" column of
the government -wide financial statements.
Fiduciary Funds
Agency funds are used by the City to report the assets held in an agency capacity for external
individuals or organizations including the Industrial Development Corporation, the Employee Activity
Fund, and W.D. Tate Scholarship Fund. The donations and other contributions received by the City
that are being held for these organizations do not belong to the City and cannot be spent to further
the City's own objectives. Agency funds report only assets and liabilities and, therefore, have no
measurement focus.
32
D. Assets, liabilities, deferred outflows/inflows of resources, and net position/fund balance
1. Cash and cash equivalents
The City's cash and cash equivalents are considered to be cash on hand, demand deposits
and short-term investments with original maturities of three months or less from the date of
acquisition.
2. Investments
Investments for the City are reported at fair value, except for the position in investment pools.
Investment pools are reported at the net asset value per share (which approximates fair value)
even though it is calculated using the amortized cost method.
3. Property Taxes and Other Receivables
The City's property tax is levied each October 1, on the assessed value listed as of the prior
January 1 for all real property located in the City. The appraisal of property within the City is the
responsibility of the Central Appraisal Districts of Dallas, Denton, and Tarrant Counties as
required by legislation passed by the Texas Legislature. The Appraisal Districts are required
under such legislation to assess all property within their Appraisal District on the basis of 100%
of its appraised value and is prohibited from applying any assessment ratios. The assessed
value upon which the completed tax year 2018 levy was based was approximately
$9,006,396,977. The value of property within the Appraisal District must be reviewed every five
years; however, the City may, at its own expense, require annual reviews of appraised values.
The City may challenge appraised values established by the Appraisal District through various
appeals and, if necessary, legal action.
General property taxes are limited by the Texas Constitution to $2.50 per $100 of assessed
valuation. The combined tax rate to finance maintenance and operations and debt service for
the year ended September 30, 2019, was $0.289271 per $100 of assessed valuation.
Property taxes attach as an enforceable lien on property as of January 1 following the levy
date. Taxes are due by January 31 following the levy date. Property taxes levied for 2019 are
recorded as receivables, net of estimated uncollectibles. The collections during 2019 and those
considered "available" at year-end are recognized as revenues in 2019. The City considers
property taxes available if they are collected within 60 days after year-end. Prior year levies were
recorded using these same principles. The remaining receivables are reflected as deferred
inflows of resources in the fund financial statements.
Property taxes are imposed nonexchange revenues. Assets from imposed nonexchange
transactions are recorded when the entity has enforceable legal claim to the asset, or when the
entity receives resources, whichever comes first. The enforceable legal claim date for property
taxes is the assessment date. The assessment date has been designated in the enabling
legislation as October 1.
4. Inventories and Prepaid Items
Inventories are valued at average cost on a first -in, first -out basis. Inventories in the General
Fund are recorded using the consumption method (i.e., recorded as an expenditure when used
rather than when purchased).
Prepaid items are payments made by the City in the current year to provide services occurring
in the subsequent fiscal year. A corresponding portion of fund balance is shown as
nonexpendable in governmental funds to indicate it is not available for other subsequent
expenditures. Prepaid items are defined as payments of greater than $1,000 that benefit future
periods. The cost of prepaid items is recorded as expenditures/expenses when consumed
rather than when purchased.
33
5. Restricted Assets
Certain proceeds of the City's general obligation bonds and certificates of obligation are
classified as restricted assets on the balance sheet because their use is limited by applicable
bond restrictions. Also included in restricted assets are impact fees, which are restricted for use
in infrastructure projects.
6. Assets Held for Sale
Assets held for sale in the General Fund and Hotel Occupancy Tax Fund consist of properties
that are owned by the City which are being held for redevelopment. These assets are valued at
estimated realizable value or historical cost, whichever is less.
7. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads,
bridges, sidewalks, and similar items), are reported in the applicable governmental or business -
type activities column in the government -wide financial statements. Capital assets, other than
infrastructure, are defined by the City as assets with an initial, individual cost of more than
$5,000 and an estimated useful life in excess of two years. Infrastructure assets are defined by
the City as assets costing in excess of $50,000 that have an estimated useful life in excess of
two years. Such assets are recorded at historical cost if purchased or constructed. Donated
capital assets are recorded at acquisition cost at the date of donation. The costs of normal
maintenance and repairs that do not add to the value of the asset or materially extend assets
lives are not capitalized.
Depreciation has been provided on a straight-line basis over the estimated useful lives of the
assets.
The estimated useful lives are as follows:
Assets Years
Buildings - wood framed
20
Buildings - metal storage
7
Buildings - steel framed
40
Water and sewer system
30-50
General infrastructure
20-30
Improvements other than buildings
10-20
Machinery and equipment
3-20
Motor vehicles
3-10
8. Deferred Inflows and Outflows of Resources
In addition to assets, the statement of net position and/or balance sheet will sometimes report a
separate section for deferred outflows of resources. This separate financial statement element,
deferred outflows of resources, represents a consumption of net position that applies to a future
period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until
then. The City has the following items that qualify for reporting in this category.
• Deferred loss on debt refundings — A deferred loss on refunding results from the difference in
the carrying value of refunded debt and its reacquisition price. This amount is deferred and
amortized over the shorter of the life of the refunded or refunding debt.
Pension and OPEB contributions after measurement date — These contributions are deferred
and recognized in the following fiscal year.
• Changes in actuarial assumptions and other inputs included in determining the OPEB liability
— This difference is deferred and recognized over the estimated average remaining lives of all
members determined as of the measurement date.
34
• Differences between expected and actual economic experience for the City's OPEB plan —
These effects on the OPEB liability are deferred and amortized over a closed period equal to
the average of the expected remaining service lives of all employees that are provided with
benefits through the pension plan (active employees and inactive employees).
In addition to liabilities, the balance sheet will sometimes report a separate section for deferred
inflows of resources. This separate financial statement element represents an acquisition of
fund balance that applies to a future period(s) and, therefore, will not be recognized as an
inflow of resources (revenue) until that time. The City has one type of item that arises only
under the modified accrual basis of accounting that qualifies for reporting in this category.
Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance
sheet.
In addition, the City has deferred inflows of resources which are required to be reported on the
Statements of Net Position under the full accrual basis of accounting. Deferred inflows of
resources reported in the Statements of Net Position are as follows:
• Differences between expected and actual economic experience for the City's pension —
These effects on the total pension liability are deferred and amortized over a closed period
equal to the average of the expected remaining service lives of all employees that are
provided with benefits through the pension plan (active employees and inactive
employees).
• Changes in actuarial assumptions and other inputs included in determining the pension
liabilities — This difference is deferred and recognized over the estimated average remaining
lives of all members determined as of the measurement date.
Difference in projected and actual earnings on pension and OPEB assets — This difference is
deferred and amortized over a closed five-year period.
9. Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation,
compensatory time, and sick pay benefits. Employees are reimbursed upon termination for
accumulated vacation and only non-exempt employees are reimbursed for compensatory time.
The liabilities for these amounts are accrued as they are incurred in the government -wide and
proprietary fund financial statements. Employees are not reimbursed upon termination for
accumulated sick leave.
10. Long-term Debt
In the government -wide financial statements, and proprietary funds in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities, business -type activities, or proprietary fund type statement
of net position. Bond premiums and discounts are deferred and amortized over the life of the
bonds. Bonds payable are reported net of the applicable bond premium or discount.
In the fund financial statements, governmental funds recognize bond premiums and discounts,
as well as bond issuance costs, during the current period. The face amount of debt issued is
reported as other financing sources. Premiums received on debt issuances are reported as
other financing sources while discounts on debt issuances are reported as other financing
uses. Issuance costs, whether or not withheld from the actual debt proceeds, are reported as
debt service expenditures.
35
11. Pensions
For purposes of measuring the net pension liability, pension related deferred outflows and inflows
of resources, and pension expense, City specific information about its Fiduciary Net Position in
the Texas Municipal Retirement System (TMRS) and additions to/deductions from TMRS's
Fiduciary Net Position have been determined on the same basis as they are reported by TMRS.
For this purpose, plan contributions are recognized in the period that compensation is reported for
the employee, which is when contributions are legally due. Benefit payments and refunds are
recognized when due and payable in accordance with the benefit terms. Investments are reported
at fair value.
12. Other Postemployment Benefits (OPEB)
The City provides eligible employees with certain postemployment health and life insurance
benefits that meet the criteria of a defined benefit OPEB plan under Governmental Accounting
Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions. The City has placed assets in trust to pay the
obligations of the plan with the Public Agencies Retirement Services (PARS). Because plan
assets are pooled by PARS with those of other plans for investment, the City's plan meets the
criteria of an agent multiple -employer plan under GASB Statement No. 75.
The City has not established a formal funding policy. Therefore, for purposes of measuring the
net OPEB liability, OPEB related deferred outflows and inflows of resources, and OPEB
expense, benefit payments and refunds are recognized when due and payable in accordance
with the benefit terms. Contributions are not required but are measured as payments by the
City for benefits due and payable that are not reimbursed by plan assets. Information regarding
the City's net OPEB liability is obtained from a report prepared by a consulting actuary, Gabriel
Roeder Smith & Company, in compliance with GASB Statement No. 75.
13. Fund Balance Classification
The governmental fund financial statements present fund balances based on classifications
that comprise a hierarchy that is based primarily on the extent to which the City is bound to
honor constraints on the specific purposes for which amounts in the respective governmental
funds can be spent. The classifications used in the governmental fund financial statements are
as follows:
Nonspendable: This classification includes amounts that cannot be spent
because they are either (a) not in spendable form or (b) are legally or
contractually required to be maintained intact. Nonspendable items are not
expected to be converted to cash or are not expected to be converted to cash
within the next year.
• Restricted: This classification includes amounts for which constraints have been
placed on the use of the resources either (a) externally imposed by creditors,
grantors, contributors, or laws or regulations of other governments, or (b)
imposed by law through constitutional provisions or enabling legislation.
Committed: This classification includes amounts that can be used only for
specific purposes pursuant to constraints imposed by ordinance of the City
Council. These amounts cannot be used for any other purpose unless the City
Council removes or changes the specified use by taking the same type of action
that was employed when the funds were initially committed. This classification
also includes contractual obligations to the extent that existing resources have
been specifically committed for use in satisfying those contractual requirements.
36
Assigned: Amounts in the assigned fund balance classification are intended to be
used by the City for specific purposes but do not meet the criteria to be classified
as committed. The City Council has, by resolution, authorized the City Manager
to assign fund balance. The City Council may also assign fund balance as it does
when appropriating fund balance to cover the gap between estimated revenue
and appropriations in the subsequent year's budget. Unlike commitments,
assignments generally only exist temporarily. In other words, an additional action
does not normally have to be taken for the removal of an assignment.
• Unassigned: This classification includes the residual fund balance for the
General Fund. The unassigned classification also includes negative residual fund
balance of any other governmental fund that cannot be eliminated by offsetting of
assigned fund balance amounts.
14. Fund balance flow assumptions
When an expenditure is incurred for purposes for which both restricted and unrestricted fund
balance is available, the City considers restricted funds to have been spent first. When an
expenditure is incurred for which committed, assigned, or unassigned fund balances are
available, the City considers amounts to have been spent first out of committed funds, then
assigned funds, and finally unassigned funds.
15. Net position flow assumption
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g.,
restricted bond or grant proceeds) and unrestricted resources. In order to calculate the
amounts to report as restricted net position and unrestricted net position in the government -
wide and proprietary fund financial statements, a flow assumption must be made about the
order in which the resources are considered to be applied. It is the City's policy to consider
restricted net position to have been depleted before unrestricted net position is applied.
16. Future financial reporting requirements
The City has reviewed GASB pronouncements which become effective in future years and
notes the following statements are applicable to the City.
Statement No. 84, Fiduciary Activities — This statement establishes criteria for identifying
fiduciary activities of governments and for identifying fiduciary component units and
postemployment benefit arrangements that are fiduciary activities. This statement will become
effective for the City in fiscal year 2020.
Statement No. 87, Leases — This statement changes the recognition requirements for certain
lease assets and liabilities for leases that are currently classified as operating leases. This
statement will become effective for the City in fiscal year 2021.
DEFICIT FUND EQUITY
The Crime District Fund (major special revenue fund) had a deficit fund balance of $1,045,343. This
deficit is primarily the result of increasing costs related to salaries and benefits. This deficit will be
eliminated as resources are obtained (e.g., from revenues or transfers in from other funds).
The Lake Park Fund (nonmajor special revenue fund) had a deficit fund balance of $3,418,748 at fiscal
year-end. This deficit exists because of significant flooding events at Lake Grapevine which have
occurred over the last few years. This deficit will be eliminated as resources are obtained (e.g., from
revenues or transfers in from other funds).
37
The Lake Enterprise Fund had a deficit net position of $2,329,014 at fiscal year-end. This deficit also
exists primarily because of flooding events at Lake Grapevine, but recovery in this fund was slowed
because the main road accessing the golf course was closed all but two months of the year due to
structural issues. This deficit will be eliminated as resources are obtained (e.g., from revenues or
transfers in from other funds).
CASH AND INVESTMENTS
The City categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. GASB Statement No. 72, Fair Value Measurement and Application
provides a framework for measuring fair value that establishes a three-level fair value hierarchy that
describes the inputs that are used to measure assets and liabilities.
• Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets
that a government can access at the measurement date.
• Level 2 inputs are inputs—other than quoted prices included within Level 1—that are observable
for an asset or liability, either directly or indirectly.
• Level 3 inputs are unobservable inputs for an asset or liability.
The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3
inputs. If a price for an identical asset or liability is not observable, a government should measure fair
value using another valuation technique that maximizes the use of relevant observable inputs and
minimizes the use of unobservable inputs. If the fair value of an asset or a liability is measured using
inputs from more than one level of the fair value hierarchy, the measurement is considered to be based
on the lowest priority level input that is significant to the entire measurement.
Of the City's investments, $1,499,082 were valued using the option -adjusted discount cash flow model
and $753,360 were valued using documented trade history in the exact security.
As of September 30, 2019, the City had the following cash and investments:
Weighted
Fair Value Measurement Using Percent Average
of Total Maturity
9/30/2019 (Level 1) (Level 2) (Level 3) Portfolio (Days)
Primary government
Cash and cash equivalents
Cash deposits - City $ 21,206,128
Cash deposits - trust and agency 170,666
Total cash and cash equivalents 21,376,794
Investments measured at net asset
value per share:
Investment pools:
TexPool
TexPool Prime
LOGIC
Investments by fair value level:
Certificates of Deposit:
Debt securities:
State and Municipal Bonds
Federal National Mortgage Association
Total investments
Total cash and investments of
the primary government
Portfolio weighted average maturity (days)
Discretely Presented Component Unit
Cash deposits
Total cash and investments
of the reporting entity
4,144, 093
7,767,470
151,830,768
2.44% 38
4.57% 31
89.38% 49
3,905,681 $ $ 3,905,681 $ 2.30% 102
1,232,408 1,232,408 0.73% 65
998,652 998,652 0.59% 9
169, 879, 072 6,136, 741
$ 191,255,866 $ $ 6,136,741 $
$ 547,383
$ 191,803,249
38
294
Investment pools are not categorized as to investment risk since specific securities relating to the City
cannot be identified. Under the TexPool Participation Agreement, administrative and investment services
to TexPool and TexPool Prime are provided by Federated Investors, Inc. through an agreement with the
State of Texas Comptroller of Public Accountants. The State Comptroller is the sole officer, director, and
shareholder of the Texas Treasury Safekeeping Trust Company authorized to operate TexPool and
TexPool Prime.
Under the LOGIC Participation Agreement, administrative and investment services to LOGIC are provided
by Hilltop Securities, Inc. and JP Morgan Asset Management, Inc. as co -administrators. The
administrators settle all trades for LOGIC and secure and value its assets every day. The fair value of the
City's position in these pools is the same as the value of the pool shares. As of September 30, 2019, the
City's investments in LOGIC, TexPool and TexPool Prime were all rated AAAm by Standard & Poor's.
TexPool, TexPool Prime and LOGIC each have a redemption notice period of one day and may redeem
daily. The investment pools' authority may only impose restrictions on redemptions in the event of a
general suspension of trading on major securities markets, general banking moratorium or national state
of emergency that affects the pool's liquidity.
Interest Rate Risk. In accordance with its investment policy, the City minimizes the risk that the interest
earnings and the market value of investments in the portfolio will fall due to changes in general interest
rates, by:
a. Structuring the investment portfolio so that investments mature to meet cash
requirements for ongoing operations, thereby avoiding the need to liquidate
investments prior to maturity.
Investing operating funds primarily in certificates of deposit, shorter -term securities,
money market mutual funds, or local government investment pools functioning as
money market mutual funds.
c. Diversifying maturities and staggering purchase dates to minimize the impact of
market movements over time.
Credit Risk. In accordance with its investment policy, the City minimizes credit risk, the risk of loss due to
the failure of the issuer or backer of the investment by:
a. Limiting investments to the safest types of investments.
b. Pre -qualifying the financial institutions and broker/dealers with which the City will do
business.
c. Diversifying the investment portfolio so that potential losses on individual issuers will
be minimized.
Concentration of Credit Risk. The City's investment policy allows up to 100% to be invested in U. S.
Treasury Bills/Notes/Bonds, and U. S. Agencies and Instrumentalities. The City's investment in the
securities of U. S. agencies are rated AAA by Standard & Poor's.
Custodial Credit Risk. State statutes require that all City deposits in financial institutions be fully
collateralized by U. S. Government obligations or obligations of the State of Texas or its agencies. The
City's deposits were fully collateralized by government securities or had a letter of credit issued by the
Federal Home Loan Bank as required by State statutes at September 30, 2019.
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IV
V
RECEIVABLES
Receivables as of year-end for the City's individual major funds and nonmajor funds in the aggregate,
including the applicable allowances for uncollectible accounts, are as follows:
General
Hotel Occupancy
Crime District
413 - Economic Development
413 - Transit
Debt Service
TIF #1 Capital Projects
General Facilities and Equipment
Nonmajor governmental funds
Water and Sewer
Lake Enterprise
Total
CAPITAL ASSETS
Less
Accrued Gross Allowance for
Interest Taxes Accounts Notes Receivables Uncollectibles Total
$ 924 $
6,871,646 $
2,809,619 $ $
9,682,189
$( 2,485,060) $
7,197,129
2,527
1,501,354
72,194
1,576,075
( 14,988)
1,561,087
15
2,494,093
-
2,494,108
-
2,494,108
664
738,860
40,123
779,647
779,647
40
1,822,138
-
1,822,178
-
1,822,178
451
1,186,045
10,877
1,197,373
( 1,001,330)
196,043
138
-
-
138
134,572,115
138
81,527
-
- 3,858,000
3,939,527
9,944,015
3,939,527
1,986
350,368,899
285,190 -
287,176
-
287,176
1,764
( 3,241,062)
3,420,001
3,421,765
( 72,684)
3,349,081
8
-
58,373
58,381
-
58,381
$ 90,044 $ 14,614,136 $ 6,696,377 $ 3,858,000 $ 25,258,557 $L 3,574,062) $ 21,684,495
Capital asset activity for the year ended September 30, 2019, was as follows:
Primary Government
Governmental activities:
Capital assets, not being depreciated:
Land
Right of way
Construction in progress
Total assets not being depreciated
Capital assets, being depreciated:
Buildings
Improvement other than buildings
Machinery and equipment
Infrastructure
Total capital assets being depreciated
Less accumulated depreciation:
Buildings
Improvement other than buildings
Machinery and equipment
Infrastructure
Total accumulated depreciation
Total capital assets being
depreciated, net
Governmental activities capital
assets, net
Beginning Transfers Transfers and Prior Period Ending
Balance and Additions Retirements Adjustments Balance
$ 37,257,669
$ -
$( 2,121,522)
$
$ 35,136,147
78,359,677
201,979
-
78,561,656
32,480,427
44,127,034
( 5,121,142)
( 100,691)
71,385,628
148,097,773
44,329,013
( 7,242,664)
( 100,691)
185,083,431
122,884,053
1,982,996
( 32,438)
-
124,834,611
42,416,817
3,413,143
-
-
45,829,960
42,519,286
2,267,852
( 2,176,570)
241,621
42,852,189
134,572,115
2,280,024
-
-
136,852,139
342,392,271
9,944,015
( 2,209,008)
241,621
350,368,899
( 27,395,999)
( 3,241,062)
15,121
-
( 30,621,940)
( 17,830,036)
( 2,075,897)
-
( 19,905,933)
( 25,124,599)
( 3,390,809)
1,889,281
21
( 26,626,106)
( 75,152,474)
( 5,339,156)
-
( 80,491,630)
( 145,503,108)
( 14,046,924)
1,904,402
21
( 157,645,609)
196,889,163
( 4,102,909)
( 304,606)
241,642
192,723,290
$ 344,986,936 $ 40,226,104 $( 7,547,270) $ 140,951 $ 377,806,721
40
Business -type activities:
Capital assets, not being depreciated:
Land
Easements
Construction in progress
Total assets not being depreciated
Capital assets, being depreciated:
Buildings
Improvement other than buildings
Machinery and equipment
Water storage rights
Infrastructure
Total capital assets being depreciated
Less accumulated depreciation:
Buildings
Improvement other than buildings
Machinery and equipment
Water storage rights
Infrastructure
Total accumulated depreciation
Total capital assets being
depreciated, net
Business -type activities capital
assets, net
Beginning
Transfers
Transfers and
Ending
Balance
and Additions
Retirements
Balance
$ 593,970
$ -
$
$ 593,970
44,492,955
4,212,560
48,705,515
2,177,296
4,007,384
( 753,462)
5,431,218
47,264,221
8,219,944
( 753,462)
54,730,703
2,555,238
-
-
2,555,238
8,416,221
-
-
8,416,221
4,651,743
637,424
( 47,858)
5,241,309
683,547
-
-
683,547
126,225,170
2,523,372
128,748,542
142,531,919
3,160,796
( 47,858)
145,644,857
( 1,849,958)
( 43,357)
-
( 1,893,315)
( 6,864,769)
( 387,599)
-
( 7,252,368)
( 2,903,088)
( 382,420)
47,858
( 3,237,650)
( 639,397)
( 17,089)
-
( 656,486)
( 48,940,180)
( 2,794,751)
-
( 51,734,931)
( 61,197,392)
( 3,625,216)
47,858
( 64,774,750)
81,334,527
( 464,420)
-
80,870,107
$ 128,598,748 $ 7,755,524 $( 753,462) $ 135,600,810
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government
Public safety
Public works
Culture and recreation
Tourism
Total depreciation expense - governmental activities
Business -type activities:
Water and sewer
Lake Enterprise
Total depreciation expense - business -type activities
41
$ 1,494,607
2,286,089
5,936,514
3,597,737
731,977
$ 14,046,924
$ 3,130,535
494,681
$ 3,625,216
42
Beginning Transfers
Transfers and Fading
Balance and Additions
Retirements Balance
Discretely Presented Component Unit:
Capital assets, not being depreciated:
Land $
450,067 $
$ $ 450,067
Total assets not being depreciated
450,067
450,067
Capital assets, being depreciated:
Building
1,031,174
1,031,174
Improvements other than building
945,651
945,651
Vehicles and equipment
31,275
31,275
Total capital assets being depreciated
2,008,100
2,008,100
Less accumulated depreciation:
Building (
317,987) ( 26,419)
( 344,406)
Improvements other than building (
928,939) ( 11,486)
( 940,425)
Vehicles and equipment (
31,275) -
( 31,275)
Total accumulated depreciation (
1,278,201) ( 37,905)
( 1,316,106)
Total capital assets being
depreciated, net
729,899 ( 37,905)
691,994
Discretely presented component unit
capital assets, net $
1,179,966 $( 37,905)
$ $ 1,142,061
Construction Commitments
The City has active construction commitments as of September 30, 2019,
totaling $58,435,811. This
includes building projects, street construction
and improvements of existing
streets, and repair and
maintenance of existing water and sewer systems.
Project
Commitment
Streets and drainage projects
$ 11,548,928
Water and wastewater projects
5,727,130
Fiber optic cable project
2,253,158
Animal Shelter
105,368
Golf Clubhouse
168,360
Fire stations
3,640,473
Grapevine Main
33,937,668
Parks projects
1,054,726
Total
$ 58,435,811
The commitments for buildings, streets and
drainage construction will
be funded from unexpended
general obligation and certificates of obligation bond proceeds. Water and wastewater projects will be
funded from unexpended certificates of obligation and revenue bond proceeds and operations.
42
VI. INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
The composition of interfund balances as of September 30, 2019, is as follows:
Due to/from Other Funds
Receivable Fund Payable Fund
Amount
General Fund Grant Fund $ 34,217
Crime District Fund 2,418,966
Lake Parks Fund (nonmajor fund) 2,894,270
Lake Enterprise Fund 695,436
Total General Fund $ 6,042,889
Interfund balances for all of the funds are created by short-term deficiencies in cash position in the
individual fund. It is anticipated that the balances will be repaid in one year or less. Similar transactions
such as this also exist between the primary government and the City's discretely presented component
unit. The balances due to and due from component unit and primary government at September 30, 2019
consisted of the following:
Receivable Payable Amount
Component unit - Heritage Foundation
Primary Government -
Hotel Occupancy Tax Fund $ 7,410
Interfund Transfers
A summary of interfund transfers by fund type is as follows:
Transfers in Transfers out
General Fund Hotel Occupancy Tax Fund
4-13 Economic Development
Nonmajor governmental funds
Water and Sewer Fund
Lake Enterprise Fund
Total General Fund
Hotel Occupancy Tax Fund
Total Hotel Occupancy Tax Fund
Crime District Fund
Debt Service Fund
Total Debt Service
General Facilities and Equipment
Nonmajor governmental
Total nonmajor governmental
Total
413 -Transit Fund
Water and Sewer Fund
General Fund
Hotel Occupancy Tax Fund
4-13 Economic Development
Water and Sewer Fund
General Fund
Internal Service Fund
Nonmajor governmental
43
Amount
Total
$ 1,498,333
339,626
219,132
1,743,710
106,997
$
3,907,798
429,479
100,000
529,479
3,056,630
1,057,691
1,396,444
2,454,135
5,000,000
5,000,000
9,220,000
2,118
139,664
9,361,782
$
24,309,824
W
Interfund transfers are primarily made by the City for the following reasons:
• Budgeted transfers to the General Fund from other funds for operating and administrative
allocations.
• Operating transfer from the 413 -Transit Fund to the Hotel Occupancy Tax Fund for visitor shuttle
services.
• Transfers to the Debt Service Fund to pay for self-supporting debt service expenditures.
Transfers to capital projects funds to fund current and future capital projects within the City.
• Budgeted operating transfer to Crime District Fund.
DEFERRED INFLOWS OF RESOURCES
At September 30, 2019, deferred inflows of resources reported in the governmental funds for unavailable
revenues are as follows:
Property taxes
Property tax penalties
and interest
Court fines and fees
Ambulance billing
Franchise Fees
Intergovernmental
Other
Total
VIII. LEASES
Operating Leases
I aka Parkc-
Debt
General Service
General
Facilities and
Equipment
Nonmajor
Governmental Total
$ 61,342 $ 64,422 $ - $
116,101 107,008
166,699 -
12,546 - -
290,846 - - 14,271
- - 19,785,612 48,013
56,234 - - 77,698
$ 703,768 $ 171,430 $ 19,785,612 $ 139,982
$ 125,764
223,109
166,699
12,546
305,117
19,833,625
133,932
$ 20,800,792
The City entered into a 25 -year lease agreement with the United States Corps of Engineers to operate
and maintain approximately 770 acres of property at Lake Grapevine. The City is required to pay the cost
to maintain and operate the property with revenues generated from park operations. The term of the
operating lease is from October 2004 through September 2029. The agreement covers the park areas of
Meadowmere Park, Oak Grove Park and Silver Lake Park ("Vineyards").
The City entered into another 25 -year lease agreement with the United State Corps of Engineers to
operate and maintain an additional 44.5 acres at Lake Grapevine referred to as Rockledge Park. The
term of this operating lease is from March 2009 through March 2034.
Gaylord Texan Resort and Convention Center
The City leased property from the United States Corps of Engineers and subsequently entered into a
sublease agreement with the Gaylord Texan Resort and Convention Center (Gaylord) on March 18, 1994,
for a portion of the leased property. The contract is for 49 years and rent payment is $1 per year. The
project opened on April 4, 2004 with 1,511 room convention hotel and over 400,000 square feet of
convention, meeting, exhibit and related amenities and support facilities. In subsequent years, The City
and Gaylord entered into various addendums pertaining to the United States Corps of Engineers leased
property. Gaylord completed and opened its $120 million Vineyard Tower expansion in summer of 2018.
This project increased the number of rooms by 303 and also provided 86,000 square feet of additional
meeting space. This ranks Gaylord as the nation's second-largest non -gaming convention hotel when
measured by total self-contained exhibit and meeting space.
44
IX
Cowboys Golf Course:
The City entered into a 25 -year lease agreement with the Cowboys Golf Course in 1994. The Cowboys
Golf course management company's rental fee is 3% of Cowboys' gross revenues from operations.
LONG-TERM LIABILITIES
General Obligation Bonds
The City issues general obligation bonds to provide funds for the acquisition and construction of major
capital facilities. General obligation bonds have been issued for both governmental and business -type
activities.
General obligation bonds are direct obligations and pledge the full faith and credit of the City. These
bonds generally are issued as 20 -year serial bonds with principal maturing each year.
A summary of the terms of general obligation bonds outstanding and their corresponding allocations to
the governmental and business -type activities at September 30, 2019, follows:
General Obligation Bonds
Governmental activities:
2010 GO Refunding Bonds
2012 GO Refunding Bonds
2013 GO
2015 GO Refunding Bonds
2017 GO Refunding Bonds
2019 GO Refunding Bonds
Business -type activities:
2010 GO Refunding Bonds
Annual debt service requirements for general obligation bonds are as follows:
Original
Interest Rates
Year Ending
Sale Date
Borrow ing
to Maturity
Final Maturity
Outstanding
07/08/2010
$ 6,560,000
2.0%-4.0%
2022
$ 2,040,000
12/04/2012
7,665,000
2.0%-2.1%
2027
2,225,000
06/27/2013
65,805,000
2.0%-5.0%
2033
53,940,000
01/23/2015
12,125,000
2.0%-5.0%
2026
3,870,000
01/17/2017
1,365,000
2.0%-3.0%
2027
1,120,000
07/09/2019
28,860,000
3.0%-4.0%
2039
28,860,000
2035-2039
7,140,000
547,950
- -
92,055,000
Total
7/8/2010
$ 3,915,000
2.0%-4.0%
2022
895,000
895,000
Total general obligation bonds outstanding
$ 92,950,000
Annual debt service requirements for general obligation bonds are as follows:
45
Governmental Activities
Business -type Activities
Year Ending
September 30,
Principal
Interest
Principal Interest
2020
$ 7,565,000 $
3,692,383
$ 440,000 $ 27,000
2021
6,935,000
3,265,983
455,000 9,100
2022
5,580,000
2,990,088
- -
2023
5,315,000
2,753,370
2024
5,235,000
2,536,020
2025-2029
28,650,000
9,416,650
2030-2034
25,635,000
3,482,855
2035-2039
7,140,000
547,950
- -
Total
$ 92,055,000 $
28,685,299
$ 895,000 $ 36,100
45
Certificates of Obligation
The City also issued certificates of obligation to finance the acquisition and construction of capital assets
including certain capital improvement projects, municipal facilities, and machinery and equipment.
The City had the following certificates of obligation outstanding as of September 30, 2019:
Annual debt service requirements to maturity for certificates of obligation of the primary government are
as follows:
Year Ending
September 30,
2020
2021
2022
2023
2024
2025-2029
2030-2034
2035-2039
Governmental Activities Business -type Activities
Principal
$ 1,190,000 $
1,130,000
1,915,000
1,755,000
1,835,000
10,670,000
12,565,000
10,810,000
Interest
Principal
Original
Interest Rates
1,571,612
$ 400,000
Certificates of Obligation
Sale Date
Borrowing
to Maturity
Final Maturity
Outstanding
Governmental activities:
1,386,887
430,000
231,531
1,300,800
440,000
2010 CO (Private Placement)
12/02/2010
$ 500,000
3.5%
2020
$ 57,553
2015 CO
01/23/2015
2,000,000
2.0%-4.5%
2035
1,320,000
2017 CO
01/17/2017
9,535,000
2.0%-5.0%
2037
8,710,000
2018 CO
04/17/2018
32,310,000
3.0%-5.0%
2038
31,840,000
41,927,553
Business -type activities:
2015 CO
01/23/2015
$ 9,720,000
2.0%-4.5%
2035
8,200,000
Total certificates of obligation outstanding
$ 50,127,553
Annual debt service requirements to maturity for certificates of obligation of the primary government are
as follows:
Year Ending
September 30,
2020
2021
2022
2023
2024
2025-2029
2030-2034
2035-2039
Governmental Activities Business -type Activities
Principal
$ 1,190,000 $
1,130,000
1,915,000
1,755,000
1,835,000
10,670,000
12,565,000
10,810,000
Interest
Principal
Interest
1,571,612
$ 400,000
$ 260,569
1,529,163
405,000
250,519
1,468,906
425,000
241,688
1,386,887
430,000
231,531
1,300,800
440,000
219,556
5,031,206
2,480,000
852,219
2,831,106
2,980,000
339,228
720,769
640,000
10,000
Total $ 41,870,000 $ 15,840,449 $ 8,200,000 $ 2,405,310
Annual debt service requirements to maturity for private placement certificates of obligation of the primary
government are as follows:
Contractual Obliaations
Governmental Activities
Private Placement
Year Ending
September 30, Principal
2020 $ 57,553
Interest
Total $ 57,553 $ 1,522
The City has issued contractual obligations in order to finance the acquisition of certain capital equipment.
These obligations are issued pursuant to the Constitution of the State of Texas, including particularly
Subchapter A of Chapter 271, Texas Local Government Code (the Public Property Finance Act), and
constitute direct obligations of the City of Grapevine, Texas, payable from a continuing ad valorem tax
levied on all taxable property within the City.
46
The City had the following Public Property Finance ("PPF") contractual obligations outstanding as of
September 30, 2019:
Contractual Obligations
Sale Date
Original
Borrow ing
Interest Rates
to Maturity
Final Maturity
Outstanding
Governmental activities:
2012 PPF Contractual Obligation
12/04/2012
$ 1,225,000
1.2%
2027
$ 740,000
2015 PPF Contractual Obligation
01/01/2015
3,070,000
2.0%-4.0%
2026
1,725,000
2018 PPF Contractual Obligation
(Private Placement)
03/06/2018
2,500,000
3.9%
2028
2,290,080
Total contractual obligations outstanding $ 4,755,080
Contractual obligation debt service requirements to maturity are as follows:
Year Ending
September 30,
2020
2021
2022
2023
2024
2025-2029
Total
Governmental Activities
Principal
$ 555,000
565,000
585,000
155,000
165,000
440,000
$ 2,465,000
Interest
$ 59,363
48,587
32,575
19,688
14,907
15,968
$ 191,088
Private placement contractual obligation debt service requirements to maturity are as follows:
Year Ending
September 30,
2020
2021
2022
2023
2024
2025-2029
Total
Revenue Bonds
Governmental Activities
Private Placement
Principal
$ 216,840
225,405
234,309
243,564
253,185
1,116,777
$ 2,290,080
Interest
$ 90,458
81,893
72,989
63,734
54,113
112,418
$ 475,605
On May 15, 2018, the City issued Sales Tax Revenue Refunding Bonds, Series 2018, to refund the
existing Sales Tax Revenue Bonds, Series 2014. The Sales Tax Revenue Refunding Bonds, Series
2018, were issued by the Grapevine 4B Economic Development Corporation, a blended component unit
of the City, pursuant to Chapters 501, 502, and 505, Texas Local Government Code. These bonds are
special obligations of the City, payable from a secured lien on and pledge of certain pledged revenues
which include the proceeds of/4 of the '/2 cent sales and use tax levied within the City for the benefit of
the Grapevine 4B Economic Development Corporation.
At September 30, 2019, the remaining balances for principal and interest on the debt are $16,110,000
and $4,872,503, respectively. Annual debt service requirements through February 15, 2034 do not
exceed $1,500,000 per year. Sales tax revenue collections in the 4B -Economic Development fund were
$4,393,875.
A reserve fund is required to be maintained as security for the payment of the sales tax revenue refunding
bonds. The reserve fund is required to be funded in an amount equal to the maximum annual principal
and interest required for the bonds. The reserve is currently funded at $1,402,400, which meets the
reserve requirements.
47
On June 6, 2000, the City issued Combination Tax and Tax Increment Revenue Certificates of Obligation,
Series 2000. These bonds were subsequently refunded with Combination Tax and Tax Increment
Reinvestment Zone Revenue Refunding Bonds, Series 2005A, and with Combination Tax and Tax
Increment Reinvestment Zone Revenue Refunding Bonds, Series 2015A. The Combination Tax and Tax
Increment Reinvestment Zone #2 Revenue Refunding Bonds, Series 2015A, were issued pursuant to the
Constitution and the general laws of the State of Texas, including particularly, Chapter 1207, Texas
Government Code and Section 9.26 of the City's Home Rule Charter, and are direct obligations of the
City, payable from a combination of the levy and collection of a continuing ad valorem tax levied on all
taxable property within the City and a subordinate lien on an pledge of the tax increments deposited in the
tax increment fund established for TIF #2.
At September 30, 2019, the remaining principal and interest on the bonds was $13,905,000 and
$2,199,550, respectively. Principal and interest payments for the fiscal year were $1,645,000 and
$642,400. Tax increment revenues for TIF #2 for the current year were $5,806,220. The outstanding
revenue bonds have a final maturity of August 15, 2026.
A summary of the terms of the revenue bonds outstanding for the governmental activities as of
September 30, 2019, is as follows:
Tax Notes
The City issued Tax Notes, Series 2013, in order to fund the acquisition of capital assets for the City. The
notes are issued pursuant to the Constitution and general laws of the State of Texas, particularly Chapter
1431, Texas Government Code, and constitute direct obligations of the City, payable from a continuing ad
valorem tax levied on all taxable property within the City. The terms of the tax notes are as follows:
Tax Notes
Original Interest Rates
Sale Date Borrow ing to Maturity Final Maturity Outstanding
Government activities:
2013 Tax Note 06/27/2013 $ 3,965,000 2.0%-2.25%
The annual debt service requirements for the tax notes are as follows:
Year Ending
September 30,
2020
Total
Governmental Activities
Principal
Interest
2020 $ 605,000
$ 605.000 $ 7.563
$ 605,000 $ 7,563
48
Original Interest Rates
Revenue Bonds
Sale Date
Borrowing to Maturity Final Maturity
Outstanding
Governmental activities:
2015A TIF#2 Revenue Refunding Bonds
01/23/2015
$ 20,565,000 2.0%-5.0% 2026
$ 13,905,000
2018 Sales Tax Revenue Refunding
04/17/2018
169,300,000 3.0%-4.0% 2034
16,110,000
Total revenue bonds outstanding
$ 30,015,000
Annual debt service requirements for the revenue bonds are as follows:
Governmental Activities
Year Ending
September 30,
Principal Interest
2020
$
2,570,000 $ 1,127,994
2021
2,685,000 1,016,119
2022
2,795,000 898,994
2023
2,920,000 776,794
2024
3,050,000 649,019
2025-2029
9,655,000 1,949,333
2030-2034
6,340,000 653,800
Total
$
30,015,000 $ 7,072,053
Tax Notes
The City issued Tax Notes, Series 2013, in order to fund the acquisition of capital assets for the City. The
notes are issued pursuant to the Constitution and general laws of the State of Texas, particularly Chapter
1431, Texas Government Code, and constitute direct obligations of the City, payable from a continuing ad
valorem tax levied on all taxable property within the City. The terms of the tax notes are as follows:
Tax Notes
Original Interest Rates
Sale Date Borrow ing to Maturity Final Maturity Outstanding
Government activities:
2013 Tax Note 06/27/2013 $ 3,965,000 2.0%-2.25%
The annual debt service requirements for the tax notes are as follows:
Year Ending
September 30,
2020
Total
Governmental Activities
Principal
Interest
2020 $ 605,000
$ 605.000 $ 7.563
$ 605,000 $ 7,563
48
Other Long-term Liabilities — Texas Comptroller of Public Accounts
As of September 30, 2019, the City had a payout agreement with the Texas Comptroller of Public
Accounts for overpayment of sales taxes that total $118,558. These amounts were withheld from sales
tax receipts until August 2019.
The following is a summary of long-term liability transactions of the City for the year ended September 30,
2019:
Balance
Balance Due Within
9/30/2018
Increases Reductions
9/30/2019 One Year
Governmental activities:
General obligation bonds $
70,080,000
$ 28,860,000 $( 6,885,000)
$ 92,055,000 $ 7,565,000
Certificates of obligation
49,658,143
- ( 7,730,590)
41,927,553 1,247,553
Contractual obligations
3,005,000
( 540,000)
2,465,000 555,000
Contractual obligations -private placement
2,500,000
( 209,920)
2,290,080 216,840
Revenue bonds
32,480,000
( 2,465,000)
30,015,000 2,570,000
Tax notes
1,195,000
- ( 590,000)
605,000 605,000
Premium on bond issues
6,758,570
1,972,988 ( 887,485)
7,844,073 -
Total bonds and notes payable
165,676,713
30,832,988 ( 19,307,995)
177,201,706 12,759,393
Sales tax obligation
118,558
- ( 118,558)
- -
Net OPEB liability
63,849,882
3,472,643 ( 10,247,508)
57,075,017 182,604
Net pension liability
31,426,997
26,819,821 ( 7,650,749)
50,596,069 -
Compensated absences
3,914,717
4,005,585 ( 3,718,445)
4,201,857 1,050,464
Total governmental activities
long-term liabilities $
264,986,867
$ 65,131,037 $( 41,043,255)
$ 289,074,649 $ 13,992,461
The liability for compensated absences
and the
pension and OPEB-related liabilities are paid from the
General Fund, Crime District Fund,
and enterprise
funds based on the assignment
of an employee at
termination.
Balance
Balance Due Within
9/30/2018
Increases Reductions
9/30/2019 One Year
Business -type activities:
Water and sew er obligations:
General obligation bonds
$ 1,730,000
$ $( 835,000)
$ 895,000 $ 440,000
Certificates of obligation
8,600,000
( 400,000)
8,200,000 400,000
Premium on bond issues
463,444
( 56,918)
406,526 -
Total water and sewer bonds payable
10,793,444
( 1,291,918)
9,501,526 840,000
Net OPEB liability
7,380,510
1,347,595 ( 281,925)
8,446,180 27,022
Net pension liability
2,928,749
2,530,943 ( 717,133)
4,742,559 -
Corrpensated absences
231,197
274,711 ( 254,077)
251,831 62,958
Total business -type activities
long-term liabilities
$ 21,333,900
$ 4,153,249 $( 2,545,053)
$ 22,942,096 $ 929,980
Current Refunding
In July 2019, the City issued $28,860,000 of General
Obligation Refunding
and Improvement Bonds,
Series 2019 with interest rates ranging from 3%
to 4%. The net proceeds of $30,832,988 (including a
$1,972,988 premium) were used to refund the Combination Tax and Revenue
Certificates of Obligation,
Series 2009 and Series 2009A.
The reacquisition price exceeded the net carrying amount of the old debt by $102,493. This amount is
reported as a deferred outflow of resources in the Statement of Net Position and will be amortized over
the remaining life of the refunding bonds. The Series 2014 bonds were refunded to reduce the City's total
debt service payments over 10 years by $662,530 and to obtain an economic gain (difference between
the net present values of the debt service payments on the old and new debt) of $601,163.
Authorized and Unissued Debt
The City had $1,235,000 in authorized general obligation bonds that were unissued as of September 30,
2019. These bonds were authorized through an election held November 7, 2017, for the construction of
animal shelter facilities, firefighting facilities, and for a multi -use facility and clubhouse at the Grapevine
Municipal Golf Course.
49
X. DEFINED BENEFIT PENSION PLAN
Plan Description. The City participates as one of 887 plans in the nontraditional, joint contributory, hybrid
defined benefit pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is
an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G,
Title 8, Texas Government Code (the TMRS Act) as an agency multiple -employer retirement system for
municipal employees in the State of Texas. The TMRS Act places the general administration and
management of the System with a six -member Board of Trustees. Although the Governor, with the advice
and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas.
TMRS's defined benefit pension plan is a tax -qualified plan under Sections 401(a) of the Internal
Revenue Code. TMRS issues a publicly available comprehensive annual financial report (CAFR) that can
be obtained at www.tmrs.com.
All eligible employees of the City are required to participate in TMRS.
Benefits Provided. TMRS provides retirement and disability benefits. Benefit provisions are adopted by the
governing body of the City, within the options available in the state statutes governing TMRS.
At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the
city -financed monetary credits with interest were used to purchase an annuity. Members may choose to
receive their retirement benefit in one of seven actuarially equivalent payments options. Members may also
choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24,
or 36 monthly payments, which cannot exceed 75% of the member's deposits and interest.
Starting in 2005, the City granted an annually repeating (automatic) basis monetary credit referred to as an
updated service credit (USC) which is a theoretical amount which considers salary increases or plan
improvements. If at any time during their career an employee earns a USC, this amount remains in their
account earning interest until retirement. At retirement, the benefit is calculated as if the sum of the
employee's accumulated contributions with interest and the employer match plus employer -financed
monetary credits, such as USC, with interest were used to purchase an annuity. Additionally, initiated in
1998, the City provided on an annually repeating (automatic) basis cost of living adjustments (COLA) for
retirees equal to a percentage of the change in the consumer price index (CPI).
The plan provisions are adopted by the governing body of the City, within the options available in the state
statutes governing TMRS. Plan provisions for the City were as follows:
Employee deposit rate
7%
Matching ratio (City to employee)
2 to 1
Years required for vesting
5
Service retirement eligibility
20 years to any age, or
5 years at age 60 and above
Updated service credit
100% repeating, transfers
Annuity increase to retirees
70% of CPI, repeating
Employees covered by benefit terms
At the December 31, 2018, valuation and measurement date, the following employees were covered by
the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 395
Inactive employees entitled to but not yet receiving benefits 279
Active employees 586
Total 1,260
50
Contributions. The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee
gross earnings, and the City matching percentages are with 100%, 150%, or 200%, both as adopted by
the governing body of the city. Under the state law governing TMRS, the contributions rate for each city is
determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The
actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by
employees during the year, with an additional amount to finance any unfunded accrued liability.
Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal
year. The contribution rate for the City was 18.98% and 18.58% in calendar years 2018 and 2019,
respectively. The City's contributions to TMRS for the year ended September 30, 2019, were $8,437,929
and were equal to the required contributions.
Net Pension Liability. The City's net pension liability (NPL) was measured as of December 31, 2018,
and the total pension liability (TPL) used to calculate the net pension liability was determined by an
actuarial valuation as of that date.
Actuarial assumptions:
The total pension liability in the December 31, 2018 actuarial valuation was determined using the
following actuarial assumptions:
Inflation 2.5% per year
Overall payroll growth 3.50% to 10.5% including inflation
Investment Rate of Return 6.75%
Salary increases were based on a service -related table. Mortality rates for active members, retirees, and
beneficiaries were based on the gender distinct RP2000 Combined Healthy Mortality Tables with Blue
Collar Adjustment with male rates multiplied by 109% and female rates multiplied by 103%. The rates are
projected on a fully generational basis by scale BB to account for future mortality improvements. For
disabled annuitants, the gender -distinct RP2000 Combined Healthy Mortality Tables with Blue Collar
Adjustment are used with males rates multiplied by 109% and female rates multiplied by 103% with a 3 -
year set -forward for both males and females. In addition, a 3% minimum mortality rate is applied to reflect
the impairment for younger members who become disabled. The rates are projected on a fully
generational basis by scale BB to account for future mortality improvements subject to the 3% floor.
Actuarial assumptions used in the December 31, 2018, valuations were based on the results of actuarial
experience studies. The experience study in TMRS was for the period December 31, 2010 through
December 31, 2014. Healthy post-retirement mortality rates and annuity purchase rates were updated
based on a Mortality Experience Investigation Study covering 2009 through 2011, and dated December
31, 2013. These assumptions were first used in the December 31, 2013 valuation, along with a change to
the Entry Age Normal (EAN) actuarial cost method. Assumptions are reviewed annually. No additional
changes were made for the 2014 valuation. After the Asset Allocation Study analysis and experience
investigation study, the Board amended the long-term expected rate of return on pension plan
investments from 7% to 6.75%. Plan assets are managed on a total return basis with an emphasis on
both capital appreciation as well as the production of income, in order to satisfy the short-term and long-
term funding needs of TMRS.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best estimate ranges of expected future real rates of return (expected returns, net of
pension plan investment expense and inflation) are developed for each major asset class. These ranges
are combined to produce the long-term expected rate of return by weighting the expected future real rates
of return by the target asset allocation percentage and by adding expected inflation. In determining their
best estimate of a recommended investment return assumption under the various alternative asset
allocation portfolios, GRS focused on the area between (1) arithmetic mean (aggressive) without an
adjustment for time (conservative) and (2) the geometric mean (conservative) with an adjustment for time
(aggressive).
51
The target allocation and best estimates of real rates of return for each major asset class are summarized
in the following table:
Target
Asset Class Allocation
Domestic Equity
International Equity
Core Fixed Income
Non -Core Fixed Income
Real Return
Real Estate
Absolute Return
Private Equity
Total
Discount Rate
17.5%
17.5%
10.0%
20.0%
10.0%
10.0%
10.0%
5.0%
100.0%
Long -Term Expected
Real Rate of Return
(Arithmetic)
4.55%
6.35%
1.00%
3.90%
3.80%
4.50%
3.75%
7.50%
The discount rate used to measure the Total Pension Liability was 6.75%. The projection of cash flows
used to determine the discount rate assumed that employee and employer contributions will be made at
the rates specified in the statute. Based on that assumption, the pension plan's Fiduciary Net Position
was projected to be available to make all projected future benefit payments of current active and inactive
employees. Therefore, the long-term expected rate of return on pension plan investments was applied to
all periods of projected benefit payments to determine the Total Pension Liability.
Changes in the Net Pension Liability
Balance at 12/31/2017
Changes for the year:
Service cost
Interest
Difference between expected and
actual experience
Contributions - employer
Contributions - employee
Net investment income
Benefit payments, including refunds
of employee contributions
Administrative expense
Other changes
Net changes
Balance at 12/31/2018
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(a) (b) (a) - (b)
$ 271,781,910 $ 237,426,164 $ 34,355,746
8,129,774 - 8,129,774
18,265,311 - 18,265,311
( 1,201,653) - ( 1,201,653)
- 8,375,515 ( 8,375,515)
3,093,341 ( 3,093,341)
- ( 7,113,672) 7,113,672
( 10,499,198) ( 10,499,198) -
- ( 137,452) 137,452
( 7,184) 7,184
14,694,234 ( 6,288,650) 20,982,884
$ 286,476,144 $ 231,137,514 $ 55,338,630
52
The following presents the net pension liability of the City, calculated using the discount rate of 6.75%, as
well as what the City's net pension liability would be if it were calculated using a discount rate that is 1 -
percentage -point lower or 1 -percentage -point higher than the current rate:
1% Decrease in 1% Increase in
Discount Rate Discount Rate Discount Rate
(5.75%) (6.75%) (7.75%)
City's net pension
liability $ 95,678,551 $ 55,338,630 $ 22,215,636
Pension Plan Fiduciary Net Position
Detailed information about the pension plan's Fiduciary Net Position is available in a separately -issued
TMRS financial report. The report may be obtained on the Internet at www.tmrs.com.
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to Pensions
For the year ended September 30, 2019, the City recognized pension expense of $10,894,106.
At September 30, 2019, the City reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Differences between expected and
actual economic experience
Changes in actuarial assumptions
Difference between projected and
actual investment earnings
Contributions subsequent to the
measurement date
Total
Deferred Outflows Deferred Inflows
of Resources of Resources
$ $ 2,144,969
14,835
12,281,014
6,416,772 -
$ 18,697,786 $ 2,159,804
$6,416,772 reported as deferred outflows of resources related to pension resulting from contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability for the
year ending September 30, 2020. Other amounts reported as deferred outflows and inflows of resources
related to pensions will be recognized in pension expense as follows:
For the Year
Ended September
30,
2020
$ 3,338,827
2021
1,031,363
2022
1,288,778
2023
4,462,242
Total
$ 10,121,210
53
XI. OTHER POSTEMPLOYMENT BENEFITS
Post-retirement Health Care Benefits
Plan Description.
The City provides certain health care and life insurance benefits through an agent, multiple -employer,
defined benefit OPEB plan, under City ordinance, for all full and part-time employees that meet eligibility
requirements. Eligible individuals include retired employees who have satisfied the requirement as
defined by the Texas Municipal Retirement System and their dependents that were covered prior to
retirement. The requirement as defined by the Texas Municipal Retirement System is any age with 20
years of service or 5 years of service for age 60 and above. City Council members that serve three terms
will be classified as retired employees when they leave office.
Retirees pay premiums for coverage in the OPEB programs. There is not a maximum employer paid
premium amount (capped benefit). Active employees do not contribute to the retiree health care plan.
Retirees are eligible for benefits immediately upon retirement. If the employee returns to work for an
employer that offers health coverage, they become ineligible for the City's plan and cannot rejoin the
City's health plan at a later date.
Benefits Provided
Retirees are eligible for medical, dental, vision, and prescription insurance until they become Medicare
eligible. Retirees are also eligible for a $20,000 life insurance policy. Once Medicare eligible, retirees are
eligible for dental, vision, and life insurance only. At that time, the City medical plan will no longer be
available. The City supplements 70% of the premium to all retirees who either (1) retire after the age of 65
or (2) are covered pre -Medicare in the retiree medical program. Spouses of retirees will receive the City
supplement if they have been on the plan for one year prior to retirement.
In the event that an active employee passes away, the spouse and dependents will become eligible for
retiree coverage if (1) the employee was eligible for retirement as defined by the Texas Municipal
Retirement System; and (2) the employee had dependent coverage at the time of death. Coverage will
continue under the plan as long as monthly retiree premiums are paid by the specified due date, until
dependents are no longer considered eligible dependents as defined by the plan, until the covered
dependent becomes Medicare eligible, or until a surviving spouse remarries.
For the fiscal year ended September 30, 2019, the City's contributions to the plan were $1,953,863 which
exceeded benefit payments of $1,453,863.
The number of employees currently covered by the benefit terms is as follows:
Inactive employees or beneficiaries currently receiving benefits 211
Active members 591
Total 802
54
Actuarial Methods and Assumptions
Significant methods and assumptions were as follows:
Actuarial Valuation Date
12/31/2018
Actuarial Cost Method
Individual Entry Age Normal Cost Method
Discount Rate
3.82% as of December 31, 2018
Inflation Rate
2.50%
Salary Increases
3.50% to 10.50%, including inflation
Demographic Assumptions
Based on the experience study covering the four-year period
ending December 31, 2014 as conducted for the Texas Municipal
Retirement System (TMRS)
Mortality
For healthy retirees, the gender -distinct RP2000 Combined
Healthy Mortality Tables w ith Blue Collar Adjustment are used
with male rates multiplied by 109% and female rates multiplied by
103%. The rates are projected on a fully generational basis by
scale BB to account for future mortality improvements.
Participation Rates
For health care coverage: 85% for retirees who are at least 50
years old at retirement and 65% for retirees who are younger
than 50 years old at retirement;For life insurance: 85%
regardless of age at retirement
Health care cost trend rates
Pre -65 Medical: Initial rate of 7.20% declining to an ultimate rate of
5.00% after 12 years;
Pre -65 Medical: Ultimate trend rate includes a 0.75% adjustment
for the excise tax;
Post -65 Medical Subsidy: Increases with inflation;
Dental: 4.00%;
Vision: 3.00%
Note: Assumption changes include a change in the Single Discount
Rate from 3.31% as of December 31, 2017 to 3.82% as of
December 31, 2018 and updates to the healthcare trend rates.
Additionally, the period of service used for the allocation of
normal costs w as changed to only reflect service with the City of
Grapevine.
Projections of health benefits are based on the plan as understood by the City and include the types of
benefits in force at the valuation date and the pattern of sharing benefit costs between the City and its
employees to that point. Actuarial calculations reflect a long-term perspective and employ methods and
assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the
actuarial value of assets.
There is no separately issued audited benefit plan report available for the City's OPEB plan.
Discount Rate
A Single Discount Rate of 3.82% was used to measure the total OPEB liability. This Single Discount Rate
was based on the municipal bond rates as of the measurement date. The source of the municipal bond rate
was Fixed-income municipal bonds with 20 years to maturity that include only federally tax-exempt
municipal bonds as reported in Fidelity Index's "20 -year Municipal GO AA Index" as of December 31,
2018.
The asset portfolio of the OPEB trust can support a 6.75% long term rate of return. However, the City
recently established the trust and does not have a formal funding policy yet. As a result, the City has
decided to set the Single Discount Rate equal to the municipal bond rate until a pattern of contributions is
established.
55
Discount Rate Sensitivity Analysis
The following schedule shows the impact of the net OPEB liability if the discount rate used was 1 % less
than and 1 % greater than the discount rate that was used (3.82%) in measuring the Net OPEB liability.
1% Decrease in 1% Increase in
Discount Rate (2.82%) Discount Rate (3.82%) Discount Rate (4.82%)
City's net OPER liability $ 75,203,315 $ 65,521,197 $ 57,544,130
Healthcare Cost Trend Rate Sensitivity Analysis
The following schedule shows the impact of the net OPEB liability if the Healthcare Cost Trend Rate used
was 1 % less than and 1 % greater than what was used in measuring the Net OPEB liability.
City's net OPER liability $
1% Decrease
56,556,557
Current Healthcare Cost
Trend Rate Assumption
$ 65,521,197
1% Increase
$ 76,783,952
OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources Related to OPEBs
At September 30, 2019, the City reported a liability of $65,521,197 for its net OPEB liability. The net
OPEB liability was determined by an actuarial valuation as of December 31, 2018. For the year ended
September 30, 2019, the City recognized OPEB expense of $5,266,589. There were no changes of
benefit terms that affected measurement of the net OPEB liability during the measurement period.
56
Increase (Decrease)
Total OPEB
Plan Fiduciary
Net OPEB
Liability
Net Position
Liability
(a)
(b)
(a) - (b)
Balance at 12/31/2017
$ 72,291,720
$ 1,061,328 $
71,230,392
Changes for the year:
Service cost
3,547,117
-
3,547,117
Interest
2,423,640
-
2,423,640
Difference between expected
and actual experience
( 1,065,868)
- (
1,065,868)
Changes of assumptions
( 8,510,968)
- (
8,510,968)
Contributions - employer
-
2,187,035 (
2,187,035)
Net investment income
-
( 77,518)
77,518
Benefit payments
( 1,687,035)
( 1,687,035)
-
Administrative expense
-
( 6,401)
6,401
Net changes
( 5,293,114)
416,081 (
5,709,195)
Balance at 12/31/2018
$ 66,998,606
$ 1,477,409 $
65,521,197
56
Changes in assumptions and other inputs reflect a change in the discount rate from 3.31% to 3.82%. At
September 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources
related to OPEB from the following sources:
Differences between expected and
actual economic experience
Changes in actuarial assumptions
Difference between projected and
actual investment earnings
Contributions subsequent to the
measurement date
Total
Deferred Outflows Deferred Inflows
of Resources of Resources
$ 151,907 $ 918,274
3,432,623 7,332,424
116,017 -
1,106,707 -
$ 4,807,254 $ 8,250,698
$1,106,707 reported as deferred outflows of resources related to OPEB resulting from contributions
subsequent to the measurement date are due to benefit payments the City paid with own assets and will
be recognized as a reduction of the net OPEB liability for the year ending September 30, 2020. Other
amounts of the reported as deferred outflows and inflows of resources related to OPEB will be recognized
in OPEB expense as follows:
For the Year
Ended September
30,
2020
2021
2022
2023
2024
Thereafter
Total
XII. COMMITMENTS AND CONTINGENCIES
$( 620,964)
( 620,964)
( 620,964)
( 615,069)
( 648,494)
( 1,423,696)
$( 4,550,151)
The City is a defendant in several pending lawsuits. City management estimates, based on the advice of
legal counsel, that the potential claims against the City, in excess of insurance coverage, would not
materially affect the basic financial statements of the City.
The City participates in a number of federal and state grant programs. These programs are subject to
program compliance audits by the grantors or their representatives. Any liability that may arise as the
result of these audits is not believed to be estimable or probable.
57
XIII.
XIV.
TAX ABATEMENTS
The City enters into economic development agreements designed to promote development and
redevelopment within the City, spur economic improvement, stimulate commercial activity, generate
additional sales tax and enhance the property tax base and economic vitality of the City. The City's
economic development agreements are authorized under Chapter 380 of the Texas Local Government
Code, Chapter 311 (Tax Increment Financing Act) and Chapter 312 (Property Redevelopment and Tax
Abatement) of the Texas Tax Code. The economic development agreements are designed to support the
creation of new businesses, the expansion and retention of existing businesses within the City, and the
attraction of companies that offer high impact jobs and share the community's values. Recipients may be
eligible to receive economic assistance based on the employment, economic or community impact of the
project requesting assistance. Recipients generally commit to building or remodeling real property and
related infrastructure, redeveloping properties, expanding operations or bringing targeted business to the
City. Agreements generally contain recapture provisions which may require repayment or termination if
recipients do not meet the required provisions of the economic incentives.
The City has the following categories of economic development agreements:
General Economic Development — The City enters into various agreements under Chapter 380 of the
Texas Local Government Code to stimulate economic development. Agreements may rebate a flat
amount or a percentage of hotel occupancy taxes or sales taxes received by the City, may result in fee
reductions such as utility charges or building inspection or permit fees, or make lump sum payments to
offset moving expenses, tenant finish -outs, demolition costs, infrastructure reimbursements,
redevelopment costs, or other expenses. For fiscal year 2019, the City rebated $3,485,262 in taxes and
made incentive payments of $100,000 under these agreements.
Tax Increment Financing — The City has adopted two Tax Increment Financing zones ("TIFs") under
Chapter 311 of the Texas Tax Code. The City enters into economic development and infrastructure
reimbursement agreements which earmark TIF revenues for payment to developers and represent
obligations over the life of the TIF or until the terms of the agreements have been met. Additionally, the
City enters into general economic development agreements under Chapter 380 of the Texas Local
Government Code which are funded with TIF resources. The City made $3,807,117 in payments for TIF
obligations and $4,024 in waived fees.
RISK MANAGEMENT
The City purchases a fully -insured program for property and casualty insurance coverage through Travelers
Insurance and workers' compensation coverage through Texas Municipal League. The City is insured at the
following limits:
Policy Limits Deductible
General liability $1,000,000 per occurrence/$2,000,000 aggregate $10,000
Automobile liability $1,000,000 per occurrence $0
Automobile physical damage Actual cash value $1,000
Excess liability $10,000,000 per occurrence/$10,000,000 aggregate $0
Property $218,886,703 varies by peril
Workers' compensation Statutory/employers' liability $1,000,000
Risk Management oversees the City's self-insured employee health plan and retiree health plans. UMR is
the third -party administrator for the employee and pre -65 retiree health plans. Claims and other plan
administration services are performed by UMR. All participating funds make payments to the General Fund
for their portion of property and casualty and health plan cost.
58
Financial responsibility in a self-insured funding arrangement is on the City, the risk of losses exceeding an
affordable threshold is transferred to an insurance company through the purchase of stop -loss insurance with
Stealth Partner Group. Stop -loss insurance protects the City from plan claims costs exceeding a specified
deductible during the plan year.
Specific Excess Loss Insurance
The City has specific excess loss insurance to cover specific claims incurred by plan participants. The City
has a $250,000 specific deductible for each medical plan member. The specific benefit period
reimbursement maximum under this coverage is unlimited per covered person.
Aggregate Excess Loss Insurance
The City also has coverage for aggregate claims incurred under the self-insured health plan. Under this
coverage, aggregate claims in excess of an estimate annual aggregate attachment point of $9,505,503 would
be covered up to an aggregate benefit period reimbursement maximum of $1,000,000.
The City establishes the insurance claim liability based on estimates of the ultimate cost of claims reported
but unsettled and of claims incurred but not reported. Any claims incurred and not reported are not believed
to be significant to the City's financial statements. Activity for the last two years is as follows:
2019 2018
Claims payable, beginning of year $ 650,081 $ 2,005,365
Current year claims and changes in estimates 3,966,014 7,601,763
Payments on claims ( 3,921,644) ( 8,957,047)
Claims payable at end of year $ 694,451 $ 650,081
XV. WATER STORAGE RIGHTS
Water storage rights of $683,547 (net of accumulated amortization of $656,486) represent rights in the
Federal Reservoir at Lake Grapevine purchased through a long-term contract with the federal
government and are recorded at cost, with amortization being recorded using the straight-line method
over the initial term of the contract of 40 years. Approximately 2 years remain on the contract.
XVI. IMPACT FEES
The City records impact fees received in excess of the cost of physical connection to the Water and
Sewer system as revenues. Corresponding cash is recorded as a restricted asset for future expansion of
the Water and Sewer system.
XVII. WATER AND SEWER CONTRACTS
The City has separate contracts with the Trinity River Authority of Texas ("TRA") for the purchase of
treated water and for the transportation, treatment and disposal of wastewater. The contracts require the
City to pay varying amounts based on the costs associated with water purchased and wastewater
transported and/or treated and disposed. The costs include the City's proportionate share of TRA's
operating and maintenance expenses, related debt service costs, plus certain other miscellaneous
charges. The City also purchases water from the City of Dallas -Water Utilities and Dallas County Park
Cities Municipal Utilities District.
Payments during 2019 for the purchase of treated water were $8,030,760 and payments made for the
transportation, treatment, and disposal of wastewater by TRA were $1,478,364. If the City were unable to
fulfill its obligations under the contracts, the only liability for future payment would be its proportionate
share of debt service requirements. In addition, the City does not retain an ongoing financial interest in
TRA and has no representation on the TRA Board; therefore, the TRA contracts are not considered to be
joint venture agreements.
59
XVIII. PRIOR PERIOD ADJUSTMENT
In the fund financial statements, an adjustment to unearned revenues resulted in an increase in the
beginning fund balance of the General Fund of $589,801. The beginning net position was increased by
$140,951 due to adjustments to capital assets in the governmental activities. The net increase to
beginning net position of governmental activities was $730,752.
60
REQUIRED
SUPPLEMENTARY INFORMATION
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
GENERALFUND
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2019
The accompanying notes are an integral
part of this schedule. 61
Budgeted Amounts
Variance with
Final Budget -
Positive
Original
Final
Actual
(Negative)
REVENUES
Property tax
$ 11,165,766
$ 11,165,766
$ 11,765,849
$ 600,083
Sales tax
28,890,000
28,890,000
29,863,646
973,646
Mixed beverage tax
1,800,000
1,800,000
2,145,940
345,940
Franchise tax
6,983,718
6,983,718
6,435,472
( 548,246)
Licenses and permits
1,910,194
1,910,194
1,969,000
58,806
Intergovernmental
425,190
425,190
380,269
( 44,921)
Charges for services
5,899,063
5,899,063
5,406,622
( 492,441)
Fines and forfeitures
1,763,812
1,763,812
1,509,299
( 254,513)
Investment income
106,500
106,500
283,313
176,813
Miscellaneous
656,200
656,200
448,761
( 207,439)
Total revenues
59,600,443
59,600,443
60,208,171
607,728
EXPENDITURES
Current:
General government
16,772,903
16,758,673
15,435,676
1,322,997
Public safety
16,330,103
16,310,103
16,198,439
111,664
Culture and recreation
12,972,351
12,970,351
13,299,784
( 329,433)
Public works
8,790,555
8,790,555
8,524,275
266,280
Capital outlay
92,000
128,230
264,387
( 136,157)
Debt service:
Principal
-
-
118,558
( 118,558)
Fiscal agent charges
-
-
4,210
( 4,210)
Total expenditures
54,957,912
54,957,912
53,845,329
1,112,583
EXCESS (DEFICIENCY) OF REVENUE
OVER (UNDER) EXPENDITURES
4,642,531
4,642,531
6,362,842
1,720,311
OTHER FINANCING SOURCES (USES)
Transfers in
4,508,893
4,508,893
3,907,798
( 601,095)
Transfers out
( 9,076,630)
( 9,076,630)
( 12,276,630)
( 3,200,000)
Sale of capital assets
25,700
25,700
156,217
130,517
Total other
financing sources (uses)
( 4,542,037)
( 4,542,037)
( 8,212,615)
( 3,670,578)
NET CHANGE IN FUND BALANCES
100,494
100,494
( 1,849,773)
( 1,950,267)
FUND BALANCES, BEGINNING
15,555,243
15,555,243
15,555,243
-
PRIOR PERIOD ADJUSTMENT
-
-
589,801
589,801
FUND BALANCES, BEGINNING
RESTATED
15,555,243
15,555,243
16,145,044
589,801
FUND BALANCES, ENDING
$ 15,655,737
$ 15,655,737
$ 14,295,271
$( 1,360,466)
The accompanying notes are an integral
part of this schedule. 61
CITY OF GRAPEVINE, TEXAS
HOTEL OCCUPANCY TAX
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2019
REVENUES
Taxes
Charges for services
Investment income
Miscellaneous
Total revenues
EXPENDITURES
Current:
Tourism
Capital outlay
Debt Service:
Fiscal agent charges
Total expenditures
EXCESS (DEFICIENCY) OF REVENUE
OVER (UNDER) EXPENDITURES
Budgeted Amounts
( 436,220)
15,561
3,245,402 3,229,841
FUND BALANCES, BEGINNING
17,017,842
Variance with
17,017,842 -
FUND BALANCES, ENDING
$ 16,581,622 $
Final Budget -
20,263,244 $ 3,229,841
Positive
Original
Final
Actual
(Negative)
$ 19,052,757 $
19,525,335 $
20,767,302
$ 1,241,967
7,447,692
7,447,692
7,634,638
186,946
92,000
92,000
448,501
356,501
70,000
/11 111 A AI
70,000
- A II -
29,732
- 111111 A -I
( 40,268)
A - A AI
25,018,943 25,039,740 22,413,522 2,626,218
13,000 13,000 1,192,933 ( 1,179,933)
- - 1,771 ( 1,771)
25,031,943 25,052,740 23,608,226 1,444,514
1,630,506 2,082,287 5,271,947 3,189,660
OTHER FINANCING SOURCES (USES)
Transfers in 444,610 444,610 529,479 84,869
Transfers out ( 2,511,336) ( 2,511,336) ( 2,556,024) ( 44,688)
Total other financing sources (uses) ( 2,066,726) ( 2,066,726) ( 2,026,545) 40,181
NET CHANGE IN FUND BALANCES
( 436,220)
15,561
3,245,402 3,229,841
FUND BALANCES, BEGINNING
17,017,842
17,017,842
17,017,842 -
FUND BALANCES, ENDING
$ 16,581,622 $
17,033,403 $
20,263,244 $ 3,229,841
The accompanying notes are an integral
part of this schedule. 62
CITY OF GRAPEVINE, TEXAS
CRIME DISTRICT
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2019
REVENUES
Taxes
Intergovernmental
Fines and forfeitures
Investment income
Miscellaneous
Total revenues
EXPENDITURES
Current:
General government
Public safety
Total expenditures
EXCESS (DEFICIENCY) OF REVENUE
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Budgeted Amounts
164,313
142,921
21,392
17,523,817
17,503,817
Variance with
( 564,820)
17,688,130
17,668,130
Final Budget -
( 543,428)
3,036,630
3,056,630
Positive
Original
Final
Actual
(Negative)
NET CHANGE IN FUND BALANCES
-
9,650
( 285,945)
$ 14,445,000 $
14,445,000 $
14,563,884
$ 118,884
-
-
13,605
13,605
150,000
159,650
88,042
( 71,608)
30,000
30,000
190,715
160,715
6,500
6,500
12,737
6,237
14,631,500
14,641,150
14,868,983
227,833
164,313
164,313
142,921
21,392
17,523,817
17,503,817
18,068,637
( 564,820)
17,688,130
17,668,130
18,211,558
( 543,428)
( 3,056,630) ( 3,026,980) ( 3,342,575) ( 315,595)
Transfers in
3,056,630
3,056,630
3,056,630
-
Transfers out
-
( 20,000)
-
20,000
Total other financing sources (uses)
3,056,630
3,036,630
3,056,630
20,000
NET CHANGE IN FUND BALANCES
-
9,650
( 285,945)
( 295,595)
FUND BALANCES, BEGINNING
( 759,398)
( 759,398)
( 759,398)
-
FUND BALANCES, ENDING
$( 759,398)
$( 749,748)
$( 1,045,343)
$( 295,595)
The accompanying notes are an integral
part of this schedule. 63
CITY OF GRAPEVINE, TEXAS
4B - ECONOMIC DEVELOPMENT
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2019
REVENUES
Taxes
Charges for services
Investment income
Miscellaneous
Total revenues
EXPENDITURES
Current:
Economic development
Total expenditures
EXCESS (DEFICIENCY) OF REVENUE
OVER (UNDER) EXPENDITURES
Budgeted Amounts
Variance with
Final Budget -
Positive
Original
Final
Actual
(Negative)
$ 3,611,250 $
3,611,250 $
4,393,875
$ 782,625
-
-
23,860
23,860
150,000
150,000
144,125
( 5,875)
-
-
100
100
3,761,250
3,761,250
4,561,960
800,710
2,058,806 2,058,806 1,301,974 756,832
2,058,806 2,058,806 1,301,974 756,832
1,702,444 1,702,444 3,259,986 1,557,542
OTHER FINANCING SOURCES (USES)
Transfers out ( 1,702,444) ( 1,702,444) ( 1,736,070) ( 33,626)
Sale of capital assets - - 4,208,462 4,208,462
Total other financing sources (uses) ( 1,702,444) ( 1,702,444) 2,472,392 4,174,836
NET CHANGE IN FUND BALANCES - - 5,732,378 5,732,378
FUND BALANCES, BEGINNING 6,098,006 6,098,006 6,098,006 -
FUND BALANCES, ENDING $ 6,098,006 $ 6,098,006 $ 11,830,384 $ 5,732,378
The accompanying notes are an integral
part of this schedule. 64
CITY OF GRAPEVINE, TEXAS
4B - TRANSIT
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2019
EXPENDITURES
Current:
Transportation 10,389,140 10,389,140 10,046,960 342,180
Total expenditures 10,389,140 10,389,140 10,046,960 342,180
EXCESS (DEFICIENCY) OF REVENUE
OVER (UNDER) EXPENDITURES
Budgeted Amounts
454,610
437,656
( 16,954)
Variance with
OTHER FINANCING SOURCES (USES)
Final Budget -
Transfers out
( 444,610)
Positive
( 429,479)
Original Final
Actual
(Negative)
REVENUES
( 429,479)
15,131
Sales taxes
$ 10,833,750 $ 10,833,750
$ 10,476,439
$( 357,311)
Investment income
10,000 10,000
8,177
( 1,823)
Total revenues
10,843,750 10,843,750
10,484,616
( 359,134)
EXPENDITURES
Current:
Transportation 10,389,140 10,389,140 10,046,960 342,180
Total expenditures 10,389,140 10,389,140 10,046,960 342,180
EXCESS (DEFICIENCY) OF REVENUE
OVER (UNDER) EXPENDITURES
454,610
454,610
437,656
( 16,954)
OTHER FINANCING SOURCES (USES)
Transfers out
( 444,610)
( 444,610)
( 429,479)
15,131
Total other financing sources (uses)
( 444,610)
( 444,610)
( 429,479)
15,131
NET CHANGE IN FUND BALANCE
10,000
10,000
8,177
( 1,823)
FUND BALANCE, BEGINNING
8,784
8,784
8,784
-
FUND BALANCE, ENDING
$ 18,784
$ 18,784
$ 16,961
$( 1,823)
The accompanying notes are an integral
part of this schedule. 65
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
SCHEDULE OF CHANGES IN NET PENSION LIABILITY
AND RELATED RATIOS - TEXAS MUNICIPAL RETIREMENT SYSTEM
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Plan Year 2014 2015
A. Total pension liability
Service Cost $ 6,509,572 $ 7,082,668
Interest (on the total pension liability) 15,338,396 16,144,617
Difference between expected and actual experience ( 1,847,827) ( 1,393,602)
Changes of assumptions - ( 77,299)
Benefit payments, including refunds of employee contributions ( 8,121,165) ( 9,417,307)
Net change in total pension liability 11,878,976 12,339,077
Total pension liability- beginning 219,925,733 231,804,709
Total pension liability - ending (a) $ 231,804,709 $ 244,143,786
B. Plan fiduciary net position
Contributions - employer
$ 6,975,288
$ 7,547,081
Contributions - employee
2,583,406
2,769,765
Net investment income
10,365,590
284,606
Benefit payments, including refunds of employee contributions
( 8,121,165)
( 9,417,307)
Administrative expense
( 108,213)
( 173,344)
Other
( 8,897)
( 8,562)
Net change in plan fiduciary net position
11,686,009
1,002,239
Plan fiduciary net position - beginning
181,182,907
192,868,916
Plan fiduciary net position - ending (b)
192,868,916
193,871,155
C. Net pension liability - ending (a) - (b)
$ 38,935,793
$ 50,272,631
D. Plan fiduciary net position as a percentage of total pension
liability
83.20%
79.41%
E. Covered payroll
$ 36,690,944
$ 39,260,910
F. Net pension liability as a percentage of covered payroll
106.12%
128.05%
Note: GASB Statement No. 68 requires 10 years of data to be provided in this schedule. As of September 30,
2019, only 5 years are included and additional years will be added in the future as the information becomes
available.
66
2016 2017 2018
$ 7,293,298
$ 7,724,236
$ 8,129,774
16,410,412
17,301,746
18,265,311
( 1,109,085)
( 772,200)
( 1,201,653)
( 9,346,450)
( 9,863,833)
( 10,499,198)
13,248,175
14,389,949
14,694,234
244,143,786
257,391,961
271,781,910
$ 257,391,961 $ 271,781,910 $ 286,476,144
$ 7,526,300
$ 7,958,051
$ 8,375,515
2,764,119
2,922,684
3,093,341
13,104,905
28,801,972
( 7,113,672)
( 9,346,450)
( 9,863,833)
( 10,499,198)
( 147,973)
( 149,230)
( 137,452)
( 7,972)
( 7,564)
( 7,184)
13,892,929
29,662,080
( 6,288,650)
193,871,155
207,764,084
237,426,164
207,764,084
237,426,164
231,137,514
$ 49,627,877
$ 34,355,746
$ 55,338,630
80.72%
87.36%
80.68%
$ 39,444,551
$ 41,752,627
$ 44,087,711
125.82%
82.28%
125.52%
67
CITY OF GRAPEVINE, TEXAS
SCHEDULE OF PENSION CONTRIBUTIONS
TEXAS MUNICIPAL RETIREMENT SYSTEM
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Fiscal Year
Actuarial determined contribution
Contributions in relation to the actuarially
determined contribution
Contribution deficiency (excess)
Covered payroll
Contributions as a percentage of
covered payroll
Valuation Date:
2014 2015
2016
$ 6,911,778 $ 7,193,830 $ 7,395,291
6,911,778 7,193,830 7,395,291
36,595,511
18.89%
37,658,091
19.10%
Notes to Schedule of Contributions
38,748,515
19.09%
Actuarially determined contribution rates are calculated as of December 31St and become
effective in January, 13 months and a day later.
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method
Entry Age Normal
Amortization Method
Level Percentage of Payroll, Closed
Remaining Amortization
Period
27 years
Asset Valuation Method
10 Year smoothed market; 15% soft corridor
Inflation
2.5%
Salary Increases
3.50% to 10.50% including inflation
Investment Rate of Return
6.75%
Retirement Age
Experience -based table of rates that are specific to the City's plan
of benefits. Last updated for the 2015 valuation pursuant to an
experience study of the period 2010-2014.
Mortality
RP2000 Combined Mortality Table with Blue Collar Adjustment with
male rates multiplied by 109% and female rates multiplied by 103%
and projected on a fully generational basis of with BB.
Other Information
There were no benefit changes during the year.
Note: GASB Statement No. 68 requires 10
years of data to be provided in this schedule. As of
September 30, 2019, only 6 years are included and additional years will be added in the future
as the information becomes available.
68
2017 2018 2019
$ 7,815,149 $ 8,334,727 $ 8,735,515
7,815,149 8,334,727 8,735,515
41,002,879 43,861,106 44,087,711
19.06% 19.00% 19.81%
69
CITY OF GRAPEVINE, TEXAS
SCHEDULE OF CHANGES IN NET OPEB LIABILITY
AND RELATED RATIOS
POST-RETIREMENT HEALTH CARE BENEFIT PLAN
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Plan Year
A. Total OPEB liability
Service Cost
Interest (on the total OPEB liability)
Difference between expected and actual experience
Changes of assumptions
Benefit payments
Net change in total OPEB liability
Total OPEB liability - beginning
Total OPEB liability - ending (a)
B. Plan fiduciary net position
Employer Contributions
Net investment income
Benefit payments
Administrative expense
Net change in plan fiduciary net position
Plan fiduciary net position - beginning
Plan fiduciary net position - ending (b)
C. Net OPEB liability - ending (a) - (b)
D. Plan fiduciary net position as a percentage of total OPEB
liability
E. Covered -employee payroll
F. Net OPEB liability as a percentage of Covered -employee payroll
2017 2018
$ 2,883,770
$ 3,547,117
2,452,440
2,423,640
209,342
( 1,065,868)
4,730,475
( 8,510,968)
( 1,821,839)
( 1,687,035)
8,454,188
( 5,293,114)
63,837,532
72,291,720
$ 72,291,720
$ 66,998,606
$ 2,821,839
$ 2,187,035
63,643
( 77,518)
( 1,821,839)
( 1,687,035)
( 2,315)
( 6,401)
1,061,328
416,081
-
1,061,328
1,061,328
1,477,409
$ 71,230,392
$ 65,521,197
1.47%
2.21%
$ 41,752,627 $ 44,087,895
170.60% 148.61%
Notes to Schedule:
GASB Statement No. 75 requires 10 years of data to be provided in this schedule. As of September 30, 2019,
only 2 years are included. Additional years will be added in the future as the information becomes available.
The period of service used for allocation of normal costs was changed to only reflect service with the City and
the healthcare trend assumption was updated.
Included in the changes of assumptions was a change in the discount rate from 3.31 % to 3.82%.
70
CITY OF GRAPEVINE, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
SEPTEMBER 30, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Budgets
The City follows these procedures in establishing budgetary data reflected in the financial statements:
(1) Prior to August 1, the City Manager submits to the City Council a proposed operating budget for
the fiscal year commencing the following October 1. The operating budget includes proposed
expenditures and the means of financing them.
(2) Public hearings are conducted to obtain taxpayer comments.
(3) Prior to September 15, the budget is legally enacted through passage of an ordinance.
(4) The City Manager is authorized to transfer budgeted amounts between departments within any
fund; however, any revisions that alter the total expenditures of any fund must be approved by
the City Council, after public hearings. Total expenditures may not exceed appropriations at the
individual fund level.
(5) Budgets are legally adopted for the General Fund, Hotel Occupancy Tax Fund, the Crime
District Fund, the 4B — Economic Development Fund, the 4B — Transit Fund, the Lake Park
Fund, the Debt Service Fund and Enterprise Funds. Budgetary control is maintained at the fund
level.
(6) Budgets for the General, Hotel Occupancy Tax, Crime District, 4-B Economic Development
Fund, 413—Transit Fund, the Lake Park Fund, and Debt Service Fund are adopted in accordance
with generally accepted accounting principles. Budget amounts are as amended by the City
Council and adjusted for transfers of budgeted amounts between departments within any fund,
authorized by the City Manager.
(7) Budgetary comparison schedules are presented as required supplementary information for the
General Fund and for each major special revenue fund. Capital Projects Funds have not been
presented as such funds are budgeted over the life of the respective project and not on an
annual basis. Accordingly, formal budgetary integration of these funds is not employed and
comparison of actual results of operations to budgetary data for such funds is not presented.
(8) The budgetary comparison schedules included in the required supplementary information
present a comparison of budgetary data to actual results of operations for the General Fund,
Hotel Occupancy Tax Fund, Crime District Fund, 4-B Economic Development Fund, and 413—
Transit Fund. A comparison of budgetary data to actual results of operations for the Debt
Service Fund and the Lake Park Fund are presented as supplementary information.
2. EXCESS OF EXPENDITURES OVER APPROPRIATIONS
At September 30, 2019, expenditures and transfers exceeded appropriations in the General Fund by
$2,087,417, the Crime District Fund by $523,428, and the Debt Service Fund by $6,103,093.
71
COMBINING AND INDIVIDUAL
STATEMENTS AND SCHEDULES
THIS PAGE LEFT BLANK INTENTIONALLY
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for revenues that are restricted in nature for a special purpose limited by state
law and management intentions for expenditures.
Special Revenue Fund — to account for revenues that are restricted in name for a special purpose limited by state
law and management intentions for expenditures. These funds include monies for state and federal forfeitures,
library and parks programs and police in-service training.
Storm Drainage Fund — to account for revenues from a special fee that is restricted to finance the maintenance,
repair, and construction of drainage facilities.
Lake Parks Fund — accounts for the operations of the City's Parks and Recreation Department at Grapevine Lake.
DEBT SERVICE FUND
Debt Service Funds are used to account for the accumulation of resources that are restricted, committed, or assigned for the
payment of principal and interest on long-term obligations of governmental funds.
Tax Increment Financing (TIF) #2 Fund — to account for the accumulation of resources that are restricted,
committed, or assigned for the payment of principal and interest on long-term obligations of TIF #2.
CAPITAL PROJECTS FUNDS
Capital Projects Funds — used to account for the acquisition and construction of major capital facilities other than those
financed by proprietary funds and trust funds.
Grant Fund — accounts for the funds received from external sources as they relate to grants awarded to the City.
Parks Open Space and Recreation Fund — used to account for the financing, acquisition, construction and
improvement of parks and public recreation facilities.
Tax Increment Financing (TIF) #2 Fund — established for the financing, acquisition and construction of the
infrastructure surrounding Gaylord Texas Resort and Convention Center.
Streets Fund — is used to account for the construction of improvements to various streets, drainage, and sidewalk
projects.
Street Maintenance and Capital Replacement Fund — to account for resources provided and expended on street
maintenance and capital replacements.
Capital Acquisition Fund — to account for financial resources for the replacement and acquisition of capital assets.
Quality of Life Fund — to account for capital projects as designated by the City Council.
CITY OF GRAPEVINE, TEXAS
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2019
Special Revenue Debt Service Capital Projects
72
Special
Storm
Revenue
Drainage
Lake Parks
TIF #2
Grant
ASSETS
Cash
$ 2,848,974 $
2,066,274
$ - $
9,438,756 $
-
Receivables:
Accounts, net
52,492
150,165
115
-
-
Accrued interest
165
110
-
551
13
Due from other governments
-
-
-
-
345,608
Total assets
2,901,631
2,216,549
115
9,439,307
345,621
LIABILITIES
Liabilities:
Accounts payable
50,471
195,128
158,603
-
6,033
Accrued and other liabilities
871
32,348
18,493
-
8,386
Due to other funds
-
-
2,894,270
-
34,217
Due to other governments
91
-
1,357
-
-
Unearned revenue
1,554
-
346,140
-
-
Developer deposits
-
-
-
-
-
Totalliabilities
52,987
227,476
3,418,863
-
48,636
DEFERRED INFLOWS OF
RESOURCES
Unavailable revenue
14,271
-
-
-
42,470
Total deferred inflows
of resources
14,271
-
-
-
42,470
FUND BALANCES (DEFICITS)
Restricted:
Capital projects
206,834
210,677
-
-
-
Court security and technology
404,011
-
-
-
-
Public safety
746,509
-
-
-
-
Records preservation
9,893
-
-
-
-
Debt service
-
-
-
9,439,307
-
Culture and recreation
192,671
-
-
-
-
Committed for:
Stormwater drainage
operations
-
1,778,396
-
-
-
Public arts
992,040
-
-
-
-
Assigned for:
Capital projects
268,018
-
-
-
254,515
Culture and recreation
10,910
-
-
-
-
Public safety
3,854
-
-
-
-
Unassigned
( 367)
-
( 3,418,748)
-
-
Total fund balances (deficits)
2,834,373
1,989,073
( 3,418,748)
9,439,307
254,515
Total liabilities, deferred
inflows of resources
and fund balances
$ 2,901,631 $
2,216,549
$ 115 $
9,439,307 $
345,621
72
6,876 - 300,670 308,833 132,003 788,938 1,947,555
- - - - - - 60,098
- - - - - - 2,928,487
- - - - - - 1,448
- - - - - - 347,694
192,518 - 995,688 - - - 1,188,206
199,394 - 1,296,358 308,833 132,003 788,938 6,473,488
5,543 - 77,698 139,982
5,543 - 77,698 139,982
- 2,266,808 2,551,277 - 1,055,635 383,213 6,674,444
- - - - - - 404,011
- - - - - - 746,509
- - - - - - 9,893
- - - - - - 9,439,307
- - - - - - 192,671
- - - - - - 1,778,396
- - - - - - 992,040
- - 1,684,919 765,403 6,958,854 5,819,443 15,751,152
209,566 - - - - - 220,476
- - - - - - 3,854
- - - - - - ( 3,419,115)
209,566 2,266,808 4,236,196 765,403 8,014,489 6,202,656 32,793,638
$ 408,960 $ 2,266,808 $ 5,532,554 $ 1,079,779 $ 8,146,492 $ 7,069,292 $ 39,407,108
73
Capital Projects
Street
Parks Open
Maintenance
Total Other
Space and
and Capital
Capital
Quality
Governmental
Recreation
TIF #2 Streets Replacement
Acquisition
of Life
Funds
$ 408,936 $
2,266,808 $ 5,532,273 $ 1,040,022
$ 8,146,271 $
6,987,209
$ 38,735,523
-
- - 720
-
81,698
285,190
24
- 281 236
221
385
1,986
-
- - 38,801
-
-
384,409
408,960
2,266,808 5,532,554 1,079,779
8,146,492
7,069,292
39,407,108
6,876 - 300,670 308,833 132,003 788,938 1,947,555
- - - - - - 60,098
- - - - - - 2,928,487
- - - - - - 1,448
- - - - - - 347,694
192,518 - 995,688 - - - 1,188,206
199,394 - 1,296,358 308,833 132,003 788,938 6,473,488
5,543 - 77,698 139,982
5,543 - 77,698 139,982
- 2,266,808 2,551,277 - 1,055,635 383,213 6,674,444
- - - - - - 404,011
- - - - - - 746,509
- - - - - - 9,893
- - - - - - 9,439,307
- - - - - - 192,671
- - - - - - 1,778,396
- - - - - - 992,040
- - 1,684,919 765,403 6,958,854 5,819,443 15,751,152
209,566 - - - - - 220,476
- - - - - - 3,854
- - - - - - ( 3,419,115)
209,566 2,266,808 4,236,196 765,403 8,014,489 6,202,656 32,793,638
$ 408,960 $ 2,266,808 $ 5,532,554 $ 1,079,779 $ 8,146,492 $ 7,069,292 $ 39,407,108
73
CITY OF GRAPEVINE, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
REVENUES
Property tax
Franchise tax
Charges for services
Fines and forfeitures
Intergovernmental
Contributions
Investment income
Miscellaneous
Total revenues
EXPENDITURES
Current:
General government
Public safety
Culture and recreation
Public works
Economic development
Capital outlay
Debt service:
Principal
Interest
Fiscal agent charges
Total expenditures
EXCESS (DEFICIENCY)
OF REVENUE OVER
(UNDER) EXPENDITURES
OTHER FINANCING
SOURCES (USES)
Transfers in
Transfers out
Insurance recoveries
Total other financing
sources (uses)
NET CHANGE IN FUND BALANCES
FUND BALANCES, BEGINNING
FUND BALANCES, ENDING
Special Revenue Debt Service Capital Projects
Special
Revenue
Storm
Drainage
Lake Parks
TIF #2
Grant
$ -
$ -
$ - $
5,806,220 $
-
182,566
-
-
-
-
156,825
1,571,370
1,316,699
-
-
64,899
-
-
-
-
32,694
-
-
-
493,370
232,772
-
-
-
-
44,147
35,289
-
137,703
3,935
13,719
-
16,257
-
8,003
727,622
1,606,659
1,332,956
5,943,923
505,308
26,205 - - - -
52,236 - - - 104,746
213,096 - 2,295,812 - 734
- 1,028,900 - - 92,717
- - - 1,430,250 -
302,981 337,604 58,318 - 707,955
- - - 1,645,000 -
- - 642,400 -
133,104 240,155 ( 1,021,174) 2,225,523 ( 400,844)
2,118
-
- -
139,664
-
( 112,059)
( 107,023) - (
50)
2,118
( 112,059)
( 107,023) -
139,614
135,222
128,096
( 1,128,197) 2,225,523 (
261,230)
2,699,151
1,860,977
( 2,290,551) 7,213,784
515,745
$ 2,834,373
$ 1,989,073
$( 3,418,748) $ 9,439,307 $
254,515
74
Parks Open
Space and
Recreation
Capital Projects
Street
Maintenance
and Capital
TIF #2 Streets Replacement
Capital
Acquisition
Quality
of Life
Total Other
Governmental
Funds
$ - $
- $ -
$ -
$ - $
-
$ 5,806,220
-
- -
-
-
-
182,566
24,117
- 18,290
-
-
-
3,087,301
-
- -
-
-
-
64,899
-
- -
66,516
-
-
592,580
-
- -
-
-
-
232,772
4,979
55,514 142,926
53,801
156,924
126,028
761,246
200,000
- 88,669
-
-
11,621
338,269
229,096
55,514 249,885
120,317
156,924
137,649
11,065,853
- - - 88,141
97,197
-
211,543
- - - 66,292
-
-
223,274
- - - 955,887
373,343
33,981
3,872,853
- - - 1,951,887
-
1,890
3,075,394
- - - -
-
-
1,430,250
35,384 - 1,668,640 415,563
1,478,593
6,607,668
11,612,706
- - - -
-
209,920
1,854,920
- - - -
-
97,378
739,778
- 700 - -
1,964
-
3,414
35,384 700 1,668,640 3,477,770
1,951,097
6,950,837
23,024,132
193,712 54,814 ( 1,418,755) ( 3,357,453) ( 1,794,173) ( 6,813,188) ( 11,958,279)
- - - 3,020,000
3,200,000
3,000,000
9,361,782
- - - -
- (
139,664) (
358,796)
- - - -
63,391
-
63,391
- - - 3,020,000
3,263,391
2,860,336
9,066,377
193,712 54,814 ( 1,418,755) ( 337,453)
1,469,218 (
3,952,852) (
2,891,902)
15,854 2,211,994 5,654,951 1,102,856
6,545,271
10,155,508
35,685,540
$ 209,566 $ 2,266,808 $ 4,236,196 $ 765,403 $
8,014,489 $
6,202,656 $
32,793,638
75
CITY OF GRAPEVINE, TEXAS
DEBT SERVICE FUND
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2019
REVENUES
Taxes
Investment income
Total revenues
EXPENDITURES
Debt service:
Principal
Interest
Payment to refunded bond
escrow agent
Bond issuance costs
Fiscal agent charges
Total expenditures
EXCESS (DEFICIENCY) OF REVENUE
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Issuance of debt
Premium on issuance of debt
Total other financing
sources (uses)
NET CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
Budgeted Amounts
Variance with
Final Budget -
Positive
Original Final Actual (Negative)
$ 12,932,510 $ 12,932,510 $ 12,271,795 $( 660,715)
A cn AAA A rn nnn nnn nrn rn ncn
IJ, VOG,J IV IJ, U04 "i IV I4,•4/•4,YYo k VVO,VVG�
10,590,590 10,590,590 10,590,590 -
5,388,951 5,388,951 5,261,727 127,224
6,077,493 ( 6,077,493)
- - 23,036 ( 23,036)
10,000 10,000 128,911 ( 118,911)
15,989,541 15,989,541 22,081,757 ( 6,092,216)
( 2,907,031) ( 2,907,031) ( 9,607,309) ( 6,700,278)
2,454,135 2,454,135 2,454,135 -
- - 5,395,000 5,395,000
589,173 589,173
2,454,135 2,454,135 8,438,308 5,984,173
( 452,896) ( 452,896) ( 1,169,001) ( 716,105)
8,918,787 8,918,787 8,918,787 -
$ 8,465,891 $ 8,465,891 $ 7,749,786 $( 716,105)
76
CITY OF GRAPEVINE, TEXAS
LAKE PARKS FUND
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2019
REVENUES
Charges for services
Miscellaneous
Total revenues
EXPENDITURES
Current:
Culture and recreation
Capital outlay
Total expenditures
EXCESS (DEFICIENCY) OF REVENUE
OVER (UNDER) EXPENDITURES
Budgeted Amounts
Original Final
$ 2,848,000 $ 2,848,000 $
nc nnn nr nnn
2,873,000 2,873,000
Variance with
Final Budget -
Positive
Actual (Negative)
1,316,699 $( 1,531,301)
16,257 ( 8,743)
1,332,956 ( 1,540,044)
1,960,239
1,924,239
2,295,812
( 371,573)
103,000
139,000
58,318
80,682
2,063,239
2,063,239
2,354,130
( 290,891)
809,761 809,761 ( 1,021,174) ( 1,830,935)
OTHER FINANCING SOURCES (USES)
Transfers out ( 689,893) ( 689,893) ( 107,023) 582,870
Total other financing sources (uses) ( 689,893) ( 689,893) ( 107,023) 582,870
NET CHANGE IN FUND BALANCE 119,868 119,868 ( 1,128,197) ( 1,248,065)
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
( 2,290,551) ( 2,290,551) ( 2,290,551) -
$( 2,170,683) $( 2,170,683) $( 3,418,748) $( 1,248,065)
77
CITY OF GRAPEVINE, TEXAS
COMBINING STATEMENT OF CHANGES IN
ASSETS AND LIABILITIES
AGENCYFUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Cash and cash equivalents
Total assets
Due to beneficiary
Total liabilities
$ 162,152
$ 162,152
$ 162,152
$ 162,152
$ 21,444
$ 21,444
$ 21,444
$ 21,444
78
$ 12,930
$ 12,930
$ 12,930
$ 12,930
$ 170,666
$ 170,666
$ 170,666
$ 170,666
Employee Activity Fund
Balance
Balance
9/30/2018
Additions Deletions
9/30/2019
Cash and cash equivalents
$
13,500
$
18,037 $ 12,930
$
18,607
Total assets
$
13,500
$
18,037 $ 12,930
$
18,607
Due to beneficiary
$
13,500
$
18,037 $ 12,930
$
18,607
Total liabilities
$
13,500
$
18,037 $ 12,930
$
18,607
Industrial Development Corporation
Balance
Balance
9/30/2018
Additions Deletions
9/30/2019
Cash and cash equivalents
$
134,523
$
3,183 $ -
$
137,706
Total assets
$
134,523
$
3,183 $ -
$
137,706
Due to beneficiary
$
134,523
$
3,183 $ -
$
137,706
Total liabilities
$
134,523
$
3,183 $ -
$
137,706
W.D. Tate Scholarship
Balance
Balance
9/30/2018
Additions Deletions
9/30/2019
Cash and cash equivalents
$
14,129
$
224 $ -
$
14,353
Total assets
$
14,129
$
224 $ -
$
14,353
Due to beneficiary
$
14,129
$
224 $ -
$
14,353
Total liabilities
$
14,129
$
224 $ -
$
14,353
Total Agency Funds
Balance
Balance
9/30/2018
Additions Deletions
9/30/2019
Cash and cash equivalents
Total assets
Due to beneficiary
Total liabilities
$ 162,152
$ 162,152
$ 162,152
$ 162,152
$ 21,444
$ 21,444
$ 21,444
$ 21,444
78
$ 12,930
$ 12,930
$ 12,930
$ 12,930
$ 170,666
$ 170,666
$ 170,666
$ 170,666
THIS PAGE LEFT BLANK INTENTIONALLY
STATISTICAL SECTION
STATISTICAL SECTION
This part of the City of Grapevine, Texas' comprehensive
detailed information as a context for understanding what
statements, note disclosures, and required supplementary
overall financial health.
Contents
annual financial report presents
the information in the financial
information says about the City's
Financial Trends
These schedules contain trend information to help the reader understand
how the City's financial performance and well-being have changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the City's
most significant local revenue sources. Sales tax is the City's most
significant revenue source. Beginning in FY 2010, sales tax revenue
information became available to the City and is in Tables 5 and 6.
Information about principal sales tax revenue payers is confidential under
Texas statutes and is not provided. Additionally, information about the City's
second most significant local revenue source, the property tax, is provided.
Debt Capacity
These schedules present information to help the reader assess the
affordability of the City's current levels of outstanding debt and the City's
ability to issue additional debt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the
reader understand the environment within which the City's financial activities
take place.
Page
79-88
89-94
95-98
99-102
Operating Information 103-106
These schedules contain service and infrastructure data to help the reader
understand how the information in the City's financial report relates to the
services the City provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year.
CITY OF GRAPEVINE, TEXAS
NET POSITION BY COMPONENT
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands)
(accrual basis of accounting)
Governmental activities:
Net investment in capital assets
Restricted
Unrestricted
Total governmental activities net position
Business -type activities:
Net investment in capital assets
Restricted
Unrestricted
Total business -type activities net position
Primary government:
Net investment in capital assets
Restricted
Unrestricted
Total primary government net position
Source: Comprehensive Annual Financial Reports
Fiscal Year
2010 2011 2012 2013
$ 73,702
$
84,069
$
88,342
$ 114,212
55,622
61,712
71,909
78,377
13,109
10,421
14,469
3,570
$ 142,433
$
156,202
$
174,720
$ 189,019
$ 70,055
$
70,771
$
70,171
$ 74,750
6,732
7,133
8,969
8,032
11,924
11,240
10,530
6,912
$ 88,711
$
89,144
$
89,670
$ 89,694
$ 143,757 $ 154,840 $ 158,513 $ 172,921
62,354 68,845 80,878 86,409
$ 231,144 $ 245,346 $ 264,390 $ 278,712
79
TABLE 1
Fiscal Year
2014 2015 2016 2017 2018 2019
$ 139,392
$ 176,133
$ 176,591
$
214,481
$
226,572
$ 241,514
74,312
71,932
78,219
73,872
80,078
95,251
( 10,147)
( 21,047)
( 14,043)
( 26,090)
( 68,706)
( 61,220)
$ 203,557
$ 227,018
$ 240,767
$
262,263
$
237,943
$ 275,544
$ 77,872
$ 104,296
$ 126,510
$
122,775
$
125,604
$ 131,141
2,612
2,649
3,205
3,467
4,187
3,714
11,590
8,094
8,507
10,548
11,817
6,303
$ 92,074
$ 115,039
$ 138,222
$
136,790
$
141,608
$ 141,158
$ 217,264
$ 280,429
$ 303,101
$
337,256
$
352,175
$ 372,654
76,924
74,581
81,424
77,339
84,265
98,965
1,443
( 12,953)
( 5,536)
( 15,542)
( 56,889)
( 54,917)
$ 295,631
$ 342,057
$ 378,989
$
399,053
$
379,551
$ 416,702
80
CITY OF GRAPEVINE, TEXAS
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands)
(accrual basis of accounting)
EXPENSES
Governmental activities:
General government
Public safety
Culture and recreation
Public works
Transportation
Economic development
Tourism
Interest on long-term debt
Total governmental activities expenses
Business -type activities:
Water and sewer
Lake Enterprise
Total business -type activities expenses
Total primary government expenses
PROGRAM REVENUES
Governmental activities:
Fees, fines, and charges for services:
General government
Public safety
Culture and recreation
Public works
Tourism
Operating grants and contributions
Capital grants and contributions
Total governmental activities
program revenues
Business -type activities:
Charges for services:
Water and sewer
Lake Enterprise
Capital grants and contributions
Total business -type activities
program revenues
Total primary government
program revenues
$ 4,039 $
Fiscal Year
$ 2,547
2010
2011
2012
2013
3,971
8,530
$ 19,048
$ 22,526
$ 18,370
$ 18,602
27,095
27,588
28,264
28,309
27,175
26,673
27,954
29,578
19,136
10,563
11,056
12,216
-
7,901
7,789
8,620
-
3,394
4,040
3,609
5,432
5,140
4,590
4,095
97,886
103,785
102,063
105,029
17,647
18,972
18,372
18,807
2,955
3,062
3,053
3,156
20,602
22,034
21,425
21,963
$ 118,488
$ 125,819
$ 123,488
$ 126,992
$ 4,039 $
4,250
$ 2,547
$ 2,013
3,660
3,346
3,736
3,971
8,530
9,198
10,099
10,012
1,467
1,378
1,418
1,486
1,060
1,212
1,124
526
3,819
1,302
810
108
22,575
20,686 19,734 18,116
18,523
21,168
20,481
20,185
2,377
2,862
3,079
3,120
274
26,685
-
-
21,174
50,715
23,560
23,305
$ 43,749
$ 71,401
$ 43,294
$ 41,421
81
Fiscal Year
2014 2015 2016
2017 2018
TABLE 2
2019
$ 16,348 $
18,944 $
21,301 $
20,417 $
19,231 $
18,382
30,039
31,305
31,686
35,651
35,954
38,472
31,549
15,617
18,354
21,087
19,597
21,341
13,689
12,817
13,590
16,585
16,826
17,930
11,275
9,223
9,600
9,078
9,467
10,047
1,405
10,036
15,976
9,757
14,954
5,122
-
16,966
18,526
20,507
21,561
23,886
6,029
6,013
5,480
5,332
5,174
5,312
110,334
120,921
134,513
138,414
142,764
140,493
19,763
19,691
20,498
20,926
22,411
23,901
2,764
2,850
3,256
3,242
3,217
4,159
22,527
22,541
23,754
24,168
25,628
28,060
$ 132,861 $
143,462 $
158,267 $
162,582 $
168,392 $
168,553
1,992 $
4,109
10,531
1,504
275
18,614
1,723 $
3,705
4,322
1,448
7,327
1,381
1,609
21,515
2,735 $
2,155 $
3,789
2,198
4,526
6,003
1,495
3,367
7,721
7,840
383
1,079
9,549
8,171
30,198 30,813
1,962 $
2,050
1,663
2,200
6,340
4,394
3,449
3,674
7,882
7,635
2,200
993
5,007
23,230
28,503 44,176
23,667
22,434
23,824
24,663
28,267
24,278
3,017
2,214
2,816
3,174
3,131
3,323
-
4,896
17,981
1,803
4,984
6,309
26,684
29,544
44,621
29,640
36,382
33,910
$ 45,298 $
51,059 $
74,819 $
60,453 $
64,885 $
78,086
82
CITY OF GRAPEVINE, TEXAS
CHANGES IN NET POSITION
(continued)
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands)
(accrual basis of accounting)
NET(EXPENSE)REVENUES
Governmental activities
Business -type activities
Total primary government net expense
GENERAL REVENUES AND OTHER
CHANGES IN NET POSITION
Governmental activities:
Taxes
Property
Franchise
Hotel occupancy
Sales
Mixed beverage
Investment earnings
Gain on sale of capital assets
Miscellaneous
Transfers
Total governmental activities
Business -type activities:
Investment earnings
Gain on disposal of capital assets
Miscellaneous
Transfers
Total business -type activities
Total primary government
CHANGE IN NET POSITION
Governmental activities
Business -type activities
Total primary government
Source: Comprehensive Annual Financial Reports
Fiscal Year
2010 2011 2012 2013
$( 75,311) $( 83,099) $( 82,329) $( 86,913)
572 1,996 2,135 1,342
74,739 81,103 80,194 85,571
33,092
29,559
32,048
29,979
6,133
6,401
6,356
6,618
10,725
12,105
12,327
12,772
42,000
45,572
46,932
49,047
1,226
1,223
1,051
1,159
426
338
286
159
119
33
-
-
-
-
170
6
2,064
1,638
1,677
1,471
95,785
96,869
100,847
101,211
83
75
68
152
-
170
-
-
( 2,064)
( 1,638)
1,677
( 1,471)
( 1,981)1,393
1,609)
1,319
93,804
95,476
99,238
99,892
20,474
13,770
18,518
14,298
( 1,409)
432
526
23
$ 19,065
$ 14,202
$ 19,044
$ 14,321
83
TABLE 2
Fiscal Year
2014 2015 2016 2017 2018 2019
$( 91,720)
$( 99,406)
$( 104,316)
$( 107,602)
$( 114,261)
$( 96,317)
4,158
7,003
20,868
5,472
10,754
5,850
( 87,562)
( 92,403)
( 83,448)
( 102,130)
( 103,507)
( 90,467)
30,917
30,903
31,617
26,027
28,561
30,849
6,785
6,824
6,818
6,602
7,145
6,898
14,025
18,103
18,965
18,801
19,875
20,767
52,020
54,060
55,884
53,854
56,029
59,298
1,567
1,648
1,710
1,733
1,793
2,146
120
266
887
1,523
2,737
3,784
262
1,490
4,144
1,605
262
2,076
23
11
204
579
331
420
1,661
1,424
( 2,164)
3,199
3,020
6,951
107,380
114,729
118,065
113,923
119,753
133,189
20
43
148
306
580
650
-
-
3
-
-
-
( 1,661)
( 1,424)
2,164
( 3,199)
( 3,020)
( 6,951)
( 1,641)
( 1,381)
2,315
( 2,893)
( 2,440)
( 6,301)
105,739
113,348
120,380
111,030
117,313
126,888
15,658
15,323
13,748
6,323
5,492
36,871
2,517
5,629
23,182
2,578
8,314
( 450)
$ 18,175
$ 20,952
$ 36,930
$ 8,901
$ 13,806
$ 36,421
84
CITY OF GRAPEVINE, TEXAS
FUND BALANCES
GOVERNMENTALFUNDS
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands)
(modified accrual basis of accounting)
Fiscal Year
Economic development
2010
2011
2012
2013
General fund:
10,627
8,043
Tourism
- 841
Reserved**
$ 714
$ -
$ -
$ -
Unreserved
7,468
-
-
-
Nonspendable*
-
657
653
659
Assigned
-
-
-
-
Unassigned
-
8,938
11,742
11,303
Total general fund
$ 8,182
$ 9,595
$ 12,395
$ 11,962
All other governmental funds:
Reserved for:
Prepayments
$ 118
$ -
$ -
$ -
Debt service
40,700
-
-
-
Capital projects
16,861
-
-
-
Unreserved, reported in:
Special revenue
11,347
-
-
-
Capital projects
20,426
-
-
-
Nonspendable:
Inventories
-
15
18
18
Prepaid items
-
42
14
4
Notes receivable
-
-
-
-
Property held for sale
-
-
-
-
Restricted for:
Debt service
-
26,713
28,858
29,051
Capital projects
-
19,863
17,655
90,741
Court security and technology
-
-
-
-
Economic development
-
28,985
35,493
41,198
Public safety
-
836
1,078
1,088
Records preservation
-
-
-
-
Tourism
-
4,605
5,954
5,268
Transportation
-
345
369
412
Culture and recreation
-
264
152
41
Committed for:
Stormwater drainage operations
-
3,005
3,179
2,024
Public arts
-
453
600
697
Assigned for:
Economic development
- -
-
-
Capital projects
- 9,322
10,627
8,043
Tourism
- 841
635
677
Culture and recreation
- -
-
-
Public safety
- -
-
-
Unassigned
- ( 1,822)
1,777
( 841)
Total all other governmental funds
$ 80,802 $ 89,452
$ 93,467
$ 102,855
Note:
* Includes inventory, advances to other funds, and prepaid items.
** The City implemented GASB Statement No. 54, Fund Balance Reporting and Governmental Fund
Type Definitions in fiscal year 2011.
Source: Comprehensive Annual Financial Reports
85
TABLE 3
Fiscal Year
2014 2015 2016 2017 2018 2019
600 553 779 943 1,303 1,209
1 Ani Qn1
15
23
17
482
8
9
23
122
305
171
412
146
-
-
-
500
-
-
-
-
-
-
146
-
28,234
25,720
18,682
10,923
10,321
18,591
68,131
48,216
22,143
55,024
78,573
66,724
-
-
-
305
357
404
40,137
46,996
56,461
15,604
8,517
3,633
1,288
1,818
1,310
473
602
747
-
-
-
19
7
10
6,544
-
-
10,777
13,123
13,688
459
461
465
-
9
17
48
38
49
160
219
193
990
613
923
1,196
1,516
1,778
841
954
1,084
1,046
1,116
992
1,717
1,384
3,269
9,806
4,696
9,164
13,382
16,034
25,033
19,313
19,188
24,107
732
910
1,270
1
542
220
-
12,801
19,140
12,914
3,597
6,448
-
-
-
2
3
4
( 1,123)
1,477
( 3,769)
5,076
( 3,106)
( 4,491)
$ 178,421
$ 161,418
$ 154,613
$ 146,382
$ 133,640
$ 142,384
86
CITY OF GRAPEVINE, TEXAS
CHANGES IN FUND BALANCES - GOVERNMENTAL
FUNDS
LAST TEN FISCAL YEARS
(Unaudited)
(Amounts Expressed in Thousands)
(modified
accrual basis of accounting)
Fiscal
Year
2010
2011
2012
2013
REVENUES
Taxes:
Property
$ 34,225 $
29,930
$ 32,147
$ 28,326
Hotel occupancy
10,725
12,105
12,326
12,772
Sales
42,000
45,572
46,932
49,047
Mixed beverage
1,226
1,223
1,051
1,159
Franchise
6,133
6,401
6,356
6,618
Licenses and permits
1,117
1,044
1,542
1,248
Intergovernmental
4,525
1,505
1,012
1,175
Charges for services
13,296
14,582
13,572
13,286
Fines and forfeitures
2,126
1,712
2,017
2,258
Contributions
8
73
194
162
Interest and miscellaneous
2,407
1,741
1,192
731
Total revenues
117,788
115,888
118,341
116,782
EXPENDITURES
General government
16,367
17,681
13,979
13,714
Public safety
22,275
24,297
25,539
25,674
Culture and recreation
22,677
23,495
24,832
26,202
Public works
5,049
5,821
6,061
7,037
Operations
13,819
-
-
-
Transportation
-
7,901
7,789
8,620
Economic development
-
3,405
4,543
3,609
Tourism
-
-
-
-
Capital outlay
15,051
13,076
9,446
17,011
Debt service:
Principal
12,096
12,328
11,164
11,462
Interest and fiscal charges
5,547
5,029
4,564
3,864
Payment to refunded bond escrow agent
-
-
-
-
Bond issuance costs
-
-
-
-
Other
1,050
30
25
394
Total expenditures
113,931
113,063
107,942
117,587
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
$ 3,857 $
2,825
$ 10,399
$( 805)
OTHER FINANCING SOURCES (USES)
Issuance of debt
8,565
809
-
78,640
Premium on issuance of debt
344
-
-
3,455
Payment to refunded bond escrow agent
( 6,954)
-
-
( 7,834)
Sale of capital assets
219
155
112
204
Insurance recoveries
-
-
-
-
Transfers in
14,510
17,593
15,244
19,768
Transfers out
( 12,446) ( 15,955)
( 13,568)
( 18,297)
Total other financing sources (uses)
4,238
2,602
1,788
75,936
NET CHANGE IN FUND BALANCES
$ 8,095 $
5,427
$ 12,187
$ 75,131
DEBT SERVICE AS A PERCENTAGE OF
NONCAPITAL EXPENDITURES
17.8% 16.8%
15.7%
14.7%
Source: Comprehensive Annual Financial Reports
87
TABLE 4
88
Fiscal Year
2014
2015
2016
2017
2018
2019
$ 33,470
$ 30,931
$ 31,650
$ 25,991
$ 28,350
$ 30,883
14,025
18,103
18,965
18,801
19,875
20,767
52,020
54,060
55,884
53,854
56,029
59,298
1,567
1,648
1,710
1,733
1,793
2,146
6,785
6,824
6,662
6,602
7,064
6,618
1,337
1,527
1,745
1,883
1,604
1,969
430
974
1,356
1,939
2,270
1,736
13,755
14,681
15,568
17,308
17,973
16,152
2,413
2,100
1,967
1,968
1,736
1,662
169
304
253
370
318
233
872
872
2,861
2,630
4,429
4,726
126,843
132,024
138,621
133,079
141,441
146,190
15,611
17,878
19,768
18,543
17,018
16,010
27,215
28,672
27,803
30,441
32,240
34,490
27,707
12,931
14,731
16,686
18,451
17,173
8,335
8,077
7,938
10,526
11,367
11,600
11,275
9,223
9,600
9,078
9,467
10,047
1,405
10,036
15,976
9,757
16,639
5,109
-
16,179
17,702
19,735
20,335
22,414
53,121
24,476
33,576
32,596
30,029
45,994
12,664
14,477
16,099
13,018
12,059
12,564
6,695
6,405
6,234
5,850
5,974
6,001
-
22,812
1
-
17,025
6,077
-
358
73
127
392
171
269
21
10
120
47
141
164,297
171,545
169,511
166,477
191,043
187,791
$( 37,454)
$( 39,521)
$( 30,890)
$( 33,398)
$( 49,602)
$( 41,601)
19,500
35,065
3,070
10,900
51,740
5,395
-
3,757
192
590
1,265
1,973
-
( 13,643)
-
( 1,391)
-
-
250
6,110
13,856
5,406
311
4,439
-
800
540
649
66
63
18,507
17,248
21,735
56,144
46,963
24,310
( 16,846)
( 15,585)
( 17,764)
( 52,781)
( 43,943)
( 17,357)
21,411
33,752
21,629
19,517
56,402
18,823
$( 16,043)
$( 5,769)
$( 9,261)
$(13,881)
$ 6,800
$( 22,778)
17.5%
30.2%
16.5%
14.1%
11.5%
13.0%
88
CITY OF GRAPEVINE TABLE 5
TAXABLE SALES BY CATEGORY
LAST TEN FISCAL YEARS
(Amounts Expressed in Thousands)
Fiscal Year
Function/Program 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019(l)
Agriculture/forestry/fishing/hunting
Construction
Manufacturing
Wholesale trade
Retail trade
Transportation/warehousing
Information
Finance/insurance
Professional/scientific/technical
Real estate/rental/leasing
Management of companies/enterprises
Admin/support/waste mgmt/remediation svcs
Educational services
Health care/socal assistance
Arts/entertainment/recreation
Accomodation/food service
Other services (except public administration)
Unclassified
Total
City direct sales tax rate
Source: Texas Comptroller
$ - $
- $
-
$ -
$ 414 $
514 $
91 $
253 $
- $
-
19,347
23,201
32,162
38,720
46,112
49,895
53,763
44,852
65,213
58,977
158,571
149,783
157,519
157,403
164,251
164,726
161,142
160,782
166,863
147,903
216,540
236,878
245,838
266,052
276,437
285,962
299,679
300,261
322,482
246,705
774,638
816,452
849,825
897,364
930,931
921,231
931,679
939,436
945,789
712,900
10,239
13,817
11,810
13,751
12,539
13,467
12,455
12,587
9,951
7,813
29,311
36,209
42,137
49,559
58,753
68,853
68,143
42,752
40,091
27,410
964
1,049
993
804
808
808
885
1,190
1,691
667
15,745
15,485
18,966
20,321
28,112
26,370
31,957
31,074
35,317
23,860
34,389
37,831
36,597
46,875
52,312
61,550
63,637
66,687
67,963
48,151
15
1
-
-
-
-
-
-
2,719
2,335
37,065
54,218
47,264
47,117
60,296
76,038
55,143
54,579
49,130
32,480
344
531
2,762
1,931
1,079
645
634
383
364
319
1,930
2,465
2,999
2,961
2,028
1,735
1,784
1,574
1,494
1,208
25,623
25,657
24,811
24,592
27,313
16,310
22,103
26,622
28,611
21,791
413,133
453,507
477,342
472,830
522,296
572,882
586,562
593,030
625,298
502,189
24,736
24,868
24,250
33,721
38,588
47,645
49,898
38,372
37,280
28,647
-
17,457
-
-
-
8
-
-
-
-
$ 1,762,590 $ 1,909,409 $ 1,975,275 $ 2,074,001 $ 2,222,269 $ 2,308,639 $ 2,339,555 $ 2,314,434 $ 2,400,256 $ 1,863,355
2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
(1) Only three quarters of information were available for the fiscal year.
89
CITY OF GRAPEVINE, TEXAS TABLE 6
DIRECT AND OVERLAPPING SALES TAX RATES
LAST TEN FISCAL YEARS
Source: City Budget Office and Texas Comptroller
90
City
State
Fiscal Year
Direct Rate
of Texas
2010
2.00%
6.25%
2011
2.00%
6.25%
2012
2.00%
6.25%
2013
2.00%
6.25%
2014
2.00%
6.25%
2015
2.00%
6.25%
2016
2.00%
6.25%
2017
2.00%
6.25%
2018
2.00%
6.25%
2019
2.00%
6.25%
Source: City Budget Office and Texas Comptroller
90
Fiscal
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
CITY OF GRAPEVINE, TEXAS
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands)
Estimated Market Value
Real Property
Property
7,339,403
7,320,478
7,111,827
7,373,725
7,744,617
7,972,445
8,127,156
9,369,452
9,911,677
10,450,709
Personal
Property
2,446,105
2,309,223
2,005,549
2,169,614
2,141,161
2,437,129
2,620,115
2,705,089
3,033,390
3,316,173
Source: Grapevine/Colleyville ISD Tax Assessor
91
Less:
Tax -Exempt
Property
3,588,781
3,765,059
3,205,119
3,311,568
3,421,500
3,816,444
3,874,106
4,462,148
4,586,943
4,760,485
Total Taxable
Assessed
Value
6,196,727
5,864,642
5,912,257
6,231,772
6,464,278
6,593,130
6,873,165
7,612,393
8,358,123
9,006,397
TABLE 7
Total
Direct
Tax Rate
0.3500
0.3500
0.3480
0.3457
0.3425
0.3324
0.3284
0.2893
0.2893
0.2893
CITY OF GRAPEVINE, TEXAS
TABLE 8
PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
(Unaudited)
City Direct Rates Overlapping Rates
Total
Operating/ Total Direct and
Fiscal General Debt Direct Junior School Hospital Overlapping
Year Rate Service Rate College District District County Rates
2010
0.1346
0.2154
0.3500
0.1380
1.2900
0.2280
0.2640
2.2700
2011
0.1346
0.2154
0.3500
0.1380
1.2900
0.2280
0.2640
2.2700
2012
0.1423
0.2057
0.3480
0.1490
1.3100
0.2280
0.2640
2.2990
2013
0.1357
0.2100
0.3457
0.1490
1.3201
0.2279
0.2640
2.3067
2014
0.1314
0.2111
0.3425
0.1490
1.3201
0.2279
0.2640
2.3035
2015
0.1274
0.2050
0.3324
0.1495
1.3201
0.2279
0.2640
2.2939
2016
0.1421
0.1863
0.3284
0.1495
1.3201
0.2279
0.2640
2.2899
2017
0.1265
0.1628
0.2893
0.1447
1.3967
0.2279
0.2540
2.3126
2018
0.1347
0.1545
0.2893
0.1401
1.3967
0.2244
0.2440
2.2945
2019
0.1306
0.1587
0.2893
0.1361
1.3967
0.2244
0.2340
2.2805
Source: Tarrant County Appraisal District
Note: Tax rate limitations imposed by the Home Rules Section of the Texas Constitution, Article II, Section 5, provide that a maximum tax rate of $2.50 per
$100 valuation may be imposed in any one year. No provisions are made limiting the amount of this $2.50 tax rate that can be used for debt service.
92
CITY OF GRAPEVINE, TEXAS
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
(Unaudited) (Amounts Expressed in Thousands)
Source: Grapevine/Colleyville ISD Tax Assessor
Grapevine CAFR (2010)
Taxpayer
American Airlines Inc
Gaylord Texan Resort
and Convention Center
Grapevine Mills, Ltd. Partnership
CAE Simuflite/Simuflite Training Unit
Great Wolf Lodge
Backspace US, Inc.
A & B Properties, Inc., etal
Chesapeake Operating
Oncor Electric Delivery Co., Llc.
Verde Riverwalk Apts II, LP
Total
93
TABLE 9
FY 2010
FY 2019
of Total City
Percentage
Taxable
Assessed
of Total City
Value
Taxable
Taxable
4.72%
Assessed
Assessed
Taxpayer
Value
Value
American Airlines Inc/Envoy Air Inc
$ 552,617
6.14%
Opryland Hotel
350,206
3.89%
Grapevine Mills, Ltd. Partnership
325,584
3.62%
Mesa Airlines
145,445
1.61%
Great Wolf Lodge
112,194
1.25%
Fund Riverwalk LLC
101,400
1.13%
CAE Simuflite
76,263
0.85%
Silver Oaks LP
75,200
0.83%
Oncor Electric Delivery Co., Llc.
68,100
0.76%
925 Main LP
64,000
0.71%
Total
$ 1,871,009
20.79%
Source: Grapevine/Colleyville ISD Tax Assessor
Grapevine CAFR (2010)
Taxpayer
American Airlines Inc
Gaylord Texan Resort
and Convention Center
Grapevine Mills, Ltd. Partnership
CAE Simuflite/Simuflite Training Unit
Great Wolf Lodge
Backspace US, Inc.
A & B Properties, Inc., etal
Chesapeake Operating
Oncor Electric Delivery Co., Llc.
Verde Riverwalk Apts II, LP
Total
93
TABLE 9
FY 2010
Percentage
of Total City
Taxable
Taxable
Assessed
Assessed
Value
Value
$ 292,447
4.72%
247,782
4.00%
205,000
3.31%
130,794
2.11%
128,745
2.08%
87,500
1.41%
53,615
0.87%
51,340
0.83%
51,102
0.82%
46,540
0.75%
$ 1,294,865
20.90%
CITY OF GRAPEVINE, TEXAS
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands)
Taxes Levied for the Fiscal Year
Fiscal Year
Percentage
Year of the Levy
Adjusted
Ended
Original Levy
Adjustments
Levy
2010
$ 21,690
$ 517
$ 22,207
2011
20,953
161
21,114
2012
21,325
(4)
21,321
2013
21,543
(75)
21,468
2014
21,739
108
21,847
2015
22,249
(228)
22,021
2016
21,506
1,069
22,575
2017
21,669
352
22,021
2018
23,387
790
24,177
2019
25,711
342
26,053
Source: Grapevine/Colleyville ISD Tax Assessor
Collections Within the Fiscal
Percentage
Year of the Levy
of Levy
$ 22,173
Percentage
Collections in
99.88%
of Levy
Subsequent
Amount
Collected
Years
$ 21,958
98.88%
$ 215
20,954
99.24%
135
21,211
99.48%
93
21,364
99.52%
88
21,804
99.80%
32
21,952
99.69%
56
22,498
99.66%
55
21,905
99.47%
87
24,023
99.36%
113
25,946
99.59%
-
94
TABLE 10
Total Collections to Date
Percentage
Amount
of Levy
$ 22,173
99.85%
21,089
99.88%
21,304
99.92%
21,452
99.93%
21,836
99.95%
22,007
99.94%
22,553
99.90%
21,992
99.87%
24,136
99.83%
25,946
99.59%
CITY OF GRAPEVINE, TEXAS
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands, excluding
Percentage of Personal Income and Per Capita)
Governmental Activities
Revenue Tax
Bonds Notes
19,500
39,030
36,855
34,630
34,153
31,480
5,835
4,852
3,605
6,297
4,514
3,107
2,529
1,934
1,209
612
TABLE 11
Business -type Activities
General
Certificates
Fiscal
Obligation
of
Contractual
Year
Bonds
Obligation
Obligations
2010
51,290
59,870
-
2011
45,335
55,473
-
2012
40,355
49,569
1,225
2013
102,690
44,459
1,200
2014
100,952
41,325
1,130
2015
93,376
13,618
4,317
2016
88,200
14,065
4,224
2017
80,718
21,286
3,692
2018
73,200
51,470
5,645
2019
96,587
43,645
4,878
Revenue Tax
Bonds Notes
19,500
39,030
36,855
34,630
34,153
31,480
5,835
4,852
3,605
6,297
4,514
3,107
2,529
1,934
1,209
612
TABLE 11
Business -type Activities
Water
General
Total Primary
Percentage
and Sewer
Obligation
Certificates
Government
of Personal
Obligations
Bonds
of Obligation
Debt
Income
Per Capita*
1,585
15,305
-
133,885
6.88%
2,678
1,035
14,042
-
120,737
7.14%
2,569
790
9,923
-
105,467
6.16%
2,197
-
10,962
-
165,608
8.89%
3,380
-
9,556
-
176,977
9.26%
3,612
-
7,579
10,097
171,124
8.32%
3,492
-
2,551
8,902
157,326
7.16%
3,147
-
2,388
8,902
153,550
6.83%
3,011
-
1,892
8,901
176,470
7.85%
3,394
-
1,025
8,476
186,703
8.11%
3,523
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
* See Table 17 for personal income and population data.
95
CITY OF GRAPEVINE, TEXAS
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands, excluding
Percentage of Actual Taxable Value of Property and Per Capita)
Note: Details regarding the City's outstanding debt can be found in notes to the financial statements.
a See Table 7 for property value data.
b See Table 18 for population data.
96
TABLE 12
Percentage of
Governmental Activities
Taxable Value
Business -type Activities
of Property a
Capita b
1.38%
1,715
1.52%
1,899
1.22%
1,504
Resources
2,738
2.10%
General
Certificates
2,292
1.49%
2,048
General
Certificates
Restricted
Net
Fiscal
Obligation
of
Contractual
Tax
Obligation
of
For Debt
Bonded
Year
Bonds
Obligation
Obligations
Notes
Total
Bonds
Obligation
Service
Debt
2010
51,290
59,870
-
-
111,160
15,305
-
40,700
85,765
2011
45,335
55,473
-
-
100,808
15,135
-
26,713
89,230
2012
40,355
49,569
1,225
-
91,149
9,895
-
28,858
72,186
2013
102,690
44,459
1,200
4,015
152,364
10,845
-
29,051
134,158
2014
100,952
41,325
1,130
3,488
146,895
9,556
-
20,985
135,466
2015
93,376
13,618
4,317
2,935
114,246
7,579
10,097
19,603
112,319
2016
88,200
14,065
4,224
2,373
108,862
2,551
8,902
17,938
102,377
2017
80,718
21,286
3,692
1,796
107,492
2,388
8,902
16,087
102,695
2018
73,200
51,470
5,645
1,209
131,524
1,892
8,901
9,829
132,488
2019
96,587
43,645
4,878
612
145,722
1,025
8,476
18,050
137,173
Note: Details regarding the City's outstanding debt can be found in notes to the financial statements.
a See Table 7 for property value data.
b See Table 18 for population data.
96
TABLE 12
Percentage of
Actual
Taxable Value
Per
of Property a
Capita b
1.38%
1,715
1.52%
1,899
1.22%
1,504
2.15%
2,738
2.10%
2,765
1.70%
2,292
1.49%
2,048
1.35%
2,014
1.59%
2,548
1.52%
2,588
CITY OF GRAPEVINE, TEXAS TABLE 13
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF SEPTEMBER 30, 2019
(Unaudited)
The percentage of overlapping debt applicable is estimated using taxable assessed property values.
Source: Municipal Advisory Council of Texas
97
Estimated
Share of
Estimated
Direct and
Debt
Percentage
Overlapping
Government Unit
Outstanding
Applicable
Debt
Debt Repaid with Property Taxes:
Carroll Independent School District $
306,677,164
5.50%
$ 16,867,244
Coppell Independent School District
382,497,416
2.12%
8,108,945
Dallas County
151,495,000
0.10%
151,495
Dallas County Community College District
182,800,000
0.10%
182,800
Dallas County Hospital District
671,290,000
0.10%
671,290
Dallas County Schools
36,801,240
0.10%
36,801
Denton County
590,380,000
less than .01 %
-
Grapevine-Colleyville Independent School District
435,416,058
62.44%
271,873,787
Northwest Independent School District
934,245,475
0.06%
560,547
Tarrant County
266,375,000
5.32%
14,171,150
Tarrant County Hospital District
17,735,000
5.32%
943,502
Subtotal overlapping debt
313,567,561
Total direct - City of Grapevine $
177,201,706
100%
177,201,706
Direct and Overlapping Debt
$ 490,769,267
Total Direct and Overlapping Debt % of A.V.:
5.45%
Total Direct and Overlapping Debt per Capita:
$ 9,260
The percentage of overlapping debt applicable is estimated using taxable assessed property values.
Source: Municipal Advisory Council of Texas
97
CITY OF GRAPEVINE, TEXAS TABLE 14
LEGAL DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
(Unaudited)
Tax rate limitations imposed by the Home Rules Section of the Texas Constitution, Article II, Section 5, provide that a
maximum tax rate of $2.50 per $100 valuation may be imposed in any one year.
98
CITY OF GRAPEVINE, TEXAS TABLE 15
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands, except for Coverage)
Notes: a Includes tax revenues only
b Includes transfers out
Debt was issued in FY 2014, so prior data is not available.
Source: Comprehensive Annual Financial Report
99
413 Economic Development Fund
Less:
Net
Principal
Fiscal
Total
Operating
Available
and Interest
Year
Revenues a
Expenses b
Revenue
Payments
Coverage
2014
3,772
492
3,280
443
7.40
2015
3,983
1,430
2,553
1,594
1.60
2016
4,170
3,224
946
1,595
0.59
2017
4,062
2,167
1,895
1,593
1.19
2018
4,256
1,918
2,338
1,593
1.47
2019
4,394
1,642
2,752
1,396
1.97
Notes: a Includes tax revenues only
b Includes transfers out
Debt was issued in FY 2014, so prior data is not available.
Source: Comprehensive Annual Financial Report
99
CITY OF GRAPEVINE, TEXAS TABLE 16
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands, except for Coverage)
Notes: a Includes tax revenues only
b Includes transfers out.
Source: Grapevine Tax Increment Financing District Reinvestment Zone Number Two Basic Financial Statements
100
Tax Increment Financing District Reinvestment Zone Number Two
Less:
Net
Principal
Fiscal
Total
Operating
Available
and Interest
Year
Revenues a
Expenses b
Revenue
Payments
Coverage
2010
5,749
726
5,023
2,677
1.88
2011
4,291
731
3,560
2,664
1.34
2012
5,736
1,548
4,188
2,672
1.57
2013
3,637
2,283
1,354
2,679
0.51
2014
5,878
2,446
3,432
2,681
1.28
2015
4,246
2,678
1,568
2,683
0.58
2016
4,416
2,714
1,702
2,273
0.75
2017
4,697
1,410
3,287
2,282
1.44
2018
4,818
1,410
3,408
2,281
1.49
2019
5,806
1,430
4,376
2,287
1.91
Notes: a Includes tax revenues only
b Includes transfers out.
Source: Grapevine Tax Increment Financing District Reinvestment Zone Number Two Basic Financial Statements
100
CITY OF GRAPEVINE, TEXAS
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS
(Unaudited) (Amounts Expressed in Thousands except for Median Age and Unemployment Rate)
10,
TABLE 17
Sources:
(1) Estimate from City Economic Development Dept staff; (population as of 12.31.15) Neilsen/Clarita's Report, ERSI
(2) Grapevine/Col leyvi Ile ISD
(3) ESRI, 2018
101
(1)
(1)
Personal
(1)
(2)
(3)
Calendar
Estimated
Personal
Income
Median
School
Unemployment
Year
Population
Income
Per Capita
Age
Enrollment
Rate
2010
50
1,900
38
36
14
6.0%
2011
47
1,692
36
35
14
6.3%
2012
48
1,711
36
35
14
5.6%
2013
49
1,862
38
38
14
5.1%
2014
49
1,911
39
38
14
4.7%
2015
49
2,058
42
39
14
3.3%
2016
50
2,197
42
39
14
3.6%
2017
51
2,252
44
39
14
3.4%
2018
52
2,249
44
39
14
3.3%
2019
53
2,303
45
39
14
3.0%
Sources:
(1) Estimate from City Economic Development Dept staff; (population as of 12.31.15) Neilsen/Clarita's Report, ERSI
(2) Grapevine/Col leyvi Ile ISD
(3) ESRI, 2018
101
CITY OF GRAPEVINE, TEXAS TABLE 18
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
(Unaudited) (Amounts Expressed in Thousands except for
Percentage of Total City Employment)
2019
2010
Sources: City of Grapevine Economic Development Department, Infogroup, Inc.
102
Percentage of
Percentage of
of Total City
of Total City
Employer
Employees
Employment (1)
Employer
Employees
Employment
DFW International Airport
14.3
27.03%
DFW International Airport
16.0
31.37%
Game Stop Corporation
2.9
5.39%
Gaylord Texan Resort and
2.0
3.92%
Convention Center
Gaylord Texan Resort and
2.0
o
3.78 /o
Grapevine/Colleyville ISD
1.6
0
3.14/o
Convention Center
Grapevine/Colleyville ISD
1.9
3.52%
United Parcel Service
1.0
1.96%
City of Grapevine
0.7
1.32%
Baylor Medical Center
1.0
1.96%
Baylor Scott -White Medical
0.7
1.25%
Game Stop
0.5
0.98%
Center
Cotton Patch Cafe Inc
0.7
1.23%
City of Grapevine
0.5
0.98%
Great Wolf Lodge Grapevine
0.6
1.13%
DFW Hilton Hotel
0.5
0.98%
Kubota Tractor Corp
0.5
0.85%
Pavestone Manufacturing
0.5
0.98%
Pavestone Co
0.4
0.79%
Wal-Mart/Sams (250-500)
0.3
0.49%
24.7
46.29%
23.9
46.76%
Sources: City of Grapevine Economic Development Department, Infogroup, Inc.
102
CITY OF GRAPEVINE, TEXAS
FULLTIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Whole Numbers)
Fiscal Year
Function/Program
2010
2013
2014
General government
2016
and administration
59
Public safety
236
Development services
15
Culture and recreational
175
Water and sewer
60
Golf course
28
Public works
67
Total 640
TABLE 19
2011
2012
2013
2014
2015
2016
2017
2018
2019
59
57
58
61
63
63
63
62
61
237
237
240
241
245
246
258
261
261
15
15
15
16
19
19
19
19
19
169
169
172
175
206
207
209
220
225
59
59
59
60
59
59
59
59
59
26
26
26
26
26
25
25
25
25
630 628 636 645 684 685 700 714 718
Source: Human Resources Department - City of Grapevine
103
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CITY OF GRAPEVINE, TEXAS TABLE 20
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Whole Numbers)
Fiscal Year
Function/Program
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
General Government:
City Secretary:
Ordinances prepared
78
67
68
61
74
72
90
84
88
87
Resolutions prepared
41
70
97
114
89
92
106
106
100
35
Fiscal Services:
Invoices processed
23,760
21,605
18,567
18,719
17,410
17,556
19,098
18,944
17,075
16,690
Ratio of ACH/checks
-
0.02
1.06
27.48
47.50
49.60
53.60
58.80
57.10
55.73
Public safety:
Police:
Calls for service
65,361
66,686
67,634
58,680
44,266
53,372
52,613
47,751
43,402
41,059
Traffic citations
25,533
18,995
23,817
21,447
24,441
19,138
14,566
13,269
11,705
13,574
Criminal offenses
3,552
3,346
1,366
3,219
2,948
2,743
2,812
2,740
2,570
2,664
Fire:
Fire runs
4,595
5,079
5,135
5,156
5,101
5,588
5,905
6,161
6,026
6,192
Ambulance runs
3,015
3,343
3,026
3,541
3,614
3,715
4,893
4,432
4,047
4,291
Municipal Court:
Cases filed
28,929
21,828
25,860
23,855
24,298
19,012
16,398
15,578
14,088
13,574
Cultural and recreational:
Parks & Recreation:
Recreation center membership -family
5,161
4,937
4,658
4,677
2,731
9,856
11,512
12,126
12,273
9,969
Recreation center membership -individual
2,969
2,923
2,861
2,852
2,502
5,227
4,660
5,687
4,748
4,046
Athletic league registrants- youth
5,984
4,750
7,014
6,126
6,250
5,324
6,860
1,450
1,500
3,472
Athletic league registrants- adult
10,944
9,500
10,536
9,588
9,248
7,720
7,370
5,746
5,092
1,863
Public swim attendance
33,039
31,744
38,274
48,680
46,120
75,245
101,774
106,359
98,192
92,436
% Campground occupancy rate
68.00
57.00
61.00
63.00
61.00
53.00
13.83
70.99
71.65
41.81
Total acres maintained
1,662
1,662
1,662
1,662
1,662
1,677
1,677
1,677
1,740
1,556
Library:
Volumes
197,509
205,194
186,817
197,377
204,206
252,227
259,203
234,546
230,284
274,810
Annual circulation
341,726
330,975
316,236
303,622
293,434
301,522
307,662
345,429
342,303
355,594
Public works:
Development services:
Permits issued
3,812
4,121
3,982
3,877
4,500
4,139
4,340
4,369
4,501
4,410
104
CITY OF GRAPEVINE, TEXAS TABLE 20
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Whole Numbers)
Fiscal Year
Function/Program
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Public works:
Streets:
Square yard of overlay completed
101,100
99,000
92,604
53,167
75,555
82,202
98,693
79,238
66,432
61,957
Linear feet of gutter wedge milled
16,278
17,500
15,123
72,713
45,792
43,359
50,034
48,404
37,540
27,972
Linear feet of curb and gutter replaced
1,847
1,600
4,015
3,969
944
300
3,926
1,605
3,812
4,187
Number of blocks crack sealed
193
210
205
257
174
133
179
149
174
117
Square feet of concrete rehab
43,340
4,000
39,002
47,813
96,068
15,706
28,735
49,069
27,112
47,708
Tourism:
Convention and visitor bureau:
Nash farm attendance
-
-
7,158
8,468
13,500
14,588
11,566
14,868
11,759
15,085
Main street days attendance
110,148
160,990
150,292
139,770
148,260
154,032
178,672
169,560
168,480
141,570
Grapefest attendance
266,129
243,180
262,322
262,910
266,170
263,832
260,151
268,180
260,001
261,000
Water and sewer
Number of water connections
14,343
14,384
14,460
14,517
14,476
14,564
14,665
14,732
14,788
14,869
Average daily consumption MG (water)
10.23
11.98
10.74
10.40
9.35
9.40
9.30
9.21
9.45
7.75
System capacity - MG (Water)
27
27
27
27
27
27
27
27
27
27
Number of sewer connections
13,130
13,081
13,103
13,315
13,387
13,452
13,570
13,632
13,696
13,766
Number of refuse customers
11,865
11,895
11,911
11,964
12,110
12,175
12,272
12,318
12,394
12,416
Sewer system capacity (MGD)
8
8
8
8
8
8
8
8
8
8
Lake Enterprise:
Numbers of golfers, annually
56,053
65,052
67,555
71,706
68,368
48,689
55,913
64,424
64,382
62,510
Source: City departments
105
CITY OF GRAPEVINE, TEXAS TABLE 21
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Whole Numbers)
Fiscal Year
Function/Program
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Police:
Stations
2
2
2
2
2
2
2
2
2
2
Patrol units
30
32
32
35
35
35
35
35
35
37
Motorcycle Units
10
10
8
8
8
8
8
8
8
8
Fire:
Stations
5
5
5
5
5
5
5
5
5
5
Fire engines/trucks
8
9
9
10
10
10
10
10
10
10
EMS trucks
4
4
4
5
5
5
5
5
5
5
Public works:
Streets - paved (miles)
208
208
208
208
208
208
208
208
211
211
Traffic signals
74
75
75
75
75
75
75
75
76
76
Parks and recreation:
Acreage*
1,662
1,662
1,662
1,662
1522
1,677
1,677
1,677
1,556
1,556
Playgrounds
35
35
35
36
37
37
37
37
32
36
Swimming pools
2
2
2
2
2
3
3
3
3
3
Splash parks
-
-
2
2
2
2
2
2
3
3
Tennis courts
8
8
8
8
8
8
8
8
8
8
Recreation centers
1
1
1
1
1
1
1
1
1
1
Senior centers
1
1
1
1
1
1
1
1
1
1
Libraries
1
1
1
1
1
1
1
1
1
1
Golf Courses
1
1
1
1
1
1
1
1
1
1
Water:
Water mains (miles)
280
280
280
290
292
293
295
295
300
305
Wastewater:
Sanitary sewers (miles)
220
221
221
224
225
226
228
228
226
227
Source: City departments
*Golf course included and land leased from Corp. of Engineers
106
THIS PAGE LEFT BLANK INTENTIONALLY
INTERNAL CONTROL AND
COMPLIANCE SECTION
THIS PAGE LEFT BLANK INTENTIONALLY
PATTILLO, BROWN & HILL, L.L.P.
401 West State Highway 6
Waco, Texas 76710
254.772.4901 pbhcpa.com
INDEPENDENT AUDITOR'S 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
Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards issued
by the Comptroller General of the United States, the financial statements of the governmental activities, the
business -type activities, the discretely presented component unit, each major fund, and the aggregate
remaining fund information of the City of Grapevine, Texas (the 'City"), as of and for the year ended
September 30, 2019, and the related notes to the financial statements, which collectively comprise the City's
basic financial statements, and have issued our report thereon dated March 12, 2020.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose
of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an
opinion on the effectiveness of the City's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees in the normal course of performing their assigned functions, to prevent, or detect
and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of
deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the
entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over financial reporting was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal control over
financial reporting that might be material weaknesses or significant deficiencies and therefore, material
weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our
audit we did not identify any deficiencies in internal control over financial reporting that we consider to be
material weaknesses. However, material weaknesses may exist that have not been identified. We did identify
certain deficiencies in internal control, described in the accompanying Schedule of Findings and Responses
that we consider to be significant deficiencies as item 2019-001.
107
OFFICE LOCATIONS
TEXAS I Waco Temple I Hillsboro I Houston
NEW MEXICO Albuquerque
AN
GAQC Member
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results
of our tests disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
The City's Response to Findings
The City's response to the findings identified in our audit are described in the accompanying Schedule
of Findings and Responses. The City's response was not subjected to the auditing procedures applied in the
audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's
internal control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this
communication is not suitable for any other purpose.
Waco, Texas
March 12, 2020
108
CITY OF GRAPEVINE, TEXAS
SCHEDULE OF FINDINGS AND RESPONSES
SEPTEMBER 30, 2019
Item 2019-001 (Recurring)
Criteria: To perform their job responsibilities, system administrators must be given
control over computer systems. An organization should have proper
controls in place to ensure that only appropriate employees have
administrator rights and privileges. Administrator user accounts should be
reviewed annually, user accounts should be protected with strong
passwords and their actions on computer systems should be monitored
for questionable activities.
Condition: The City currently uses almost 200 separate on-site and cloud -based
systems. Generally, the administrators for these systems also work in the
respective departments where the software is used. The administrator
user accounts are the owner's primary accounts that are used within the
system.
Because this administrative responsibility is being maintained at the
department level, requirements like mandatory password changes,
locking individual system access to terminated employees and monitoring
general system access on an ongoing basis is not always being done.
Effect: Segregation of duties is ineffective. Without sufficient segregation of
duties, the risk significantly increases that errors, including
misappropriation of assets, could occur and not be detected on a timely
basis.
Recommendation. Management should consider a formal evaluation of the risks associated
with this lack of duties segregation. Consideration should be given to
identifying and implementing controls that could help mitigate the risks
associated with a lack of segregation of duties, such as granting
administrative -level application access only to users who do not
participate in the related control activities.
Management's Response: The City acknowledged that there were control deficiencies in this area
prior to our annual audit and we have already started reviewing systems
access controls within the City. In addition to these procedures, we will
also perform an evaluation to determine the resources that will be
necessary to ensure that proper segregation of duties is maintained and
appropriate control procedures are in place regarding systems
administration.
109
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GRAPEVINE TAX INCREMENT
FINANCING DISTRICT REINVESTMENT
ZONE NUMBER ONE
(A Blended Component Unit of
The City of Grapevine, Texas)
BASIC FINANCIAL STATEMENTS
As of and for the Year Ended
SEPTEMBER 30, 2019
(With Independent Auditor's Report)
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GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE
(A Blended Component Unit of the City of Grapevine, Texas)
BASIC FINANCIAL STATEMENTS
TABLE OF CONTENTS
SEPTEMBER 30, 2019
Page
Number
Independent Auditor's Report................................................................................................... 1 —2
Management's Discussion and Analysis.................................................................................. 3-5
Basic Financial Statements:
Government -wide Financial Statements:
Statementof Net Position.................................................................................................. 6
Statementof Activities........................................................................................................ 7
Fund Financial Statements:
Balance Sheet — Governmental Funds.............................................................................. 8
Statement of Revenues, Expenditures and Changes in
Fund Balances — Governmental Funds........................................................................... 9
Notes to Financial Statements............................................................................................... 10-13
Independent Auditor's 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............................................................... 14-15
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INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
PATTILLO, BROWN & HILL, L.L.P.
401 West State Highway 6
Waco, Texas 76710
254.772.4901 pbhcpa.com
We have audited the accompanying financial statements of the governmental activities and the major
fund of the Grapevine Tax Increment Financing District Reinvestment Zone Number One ("TIF #1"), a
component unit of the City of Grapevine, Texas, as of and for the year ended September 30, 2019, and the
related notes to the financial statements, which collectively comprise TIF #1's basic financial statements as
listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers internal control relevant to the entity's preparation and
fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
1
OFFICE LOCATIONS
TEXAS I Waco Temple I Hillsboro I Houston
NEW MEXICO Albuquerque
``AICPA
GAQC Member
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and the major fund of TIF #1, as of September 30,
2019, and the respective changes in financial position for the year then ended in accordance 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 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 Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 12,
2020 on our consideration of TIF #1's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.
The purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering TIF #1's internal control over financial reporting and
compliance.
P0,4&0 i �> A owe 4;,Q,Q, L. L.. -P.
Waco, Texas
March 12, 2020
2
MANAGEMENT'S
DISCUSSION AND ANALYSIS
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MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Grapevine, Texas (the "City"), we offer readers of the Grapevine Tax Increment
Financing District Reinvestment Zone Number One's (TIF #1) financial statements this narrative overview and
analysis of the financial activities of TIF #1 for the fiscal year ended September 30, 2019. TIF #1 was formed to
finance and make public improvements in the area surrounding the Grapevine Mills Mall under the Tax Increment
Financing Act.
FINANCIAL HIGHLIGHTS
• The assets of TIF #1 exceeded its liabilities at the close of the fiscal year ended September
30, 2019, by $9,400,672 (net position).
• At the end of the current fiscal year, the governmental fund reported an ending fund balance
of $9,400,672, a decrease of 12% in comparison with the prior year. The primary reason for
this decrease was a disbursement of accumulated funds to Grapevine-Colleyville
Independent School District for construction of capital projects.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis serves as an introduction to TIF #1's basic financial statements. TIF #1's basic
financial statements are comprised of three components: government -wide financial statements, fund financial
statements, and notes to the financial statements.
Government -wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad overview of TIF #1's
finances in a manner similar to private -sector business.
The Statement of Net Position presents information on all of TIF #1's assets and liabilities, with the difference
reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of
whether the financial position of TIF #1 is improving or deteriorating.
The Statement of Activities presents information showing how TIF #1's net position changed during the fiscal year. All
changes in net position are reported as soon as the underlying event giving rise 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).
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. TIF #1 uses fund accounting to ensure and demonstrate compliance with finance -
related legal requirements. The fund financial statements include one fund, the Capital Projects Fund, which is used
to account for those projects related to improvements at Grapevine Mills Mall.
• 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 current sources and uses 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.
3
Because the focus of governmental funds is narrower than that of the government -wide
financial statements, it is useful to compare the information presented for 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 funds balance sheet and
the governmental fund statements of revenues, expenditures, and changes in fund balances
provide a reconciliation to facilitate this comparison between governmental funds and
governmental activities.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government -wide and fund financial statements. The notes to the financial statements can be found immediately
following the basic financial statements.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. As of
September 30, 2019, TIF #1's net position was $9,400,672.
The following table reflects the condensed Statement of Net Position:
CITY OF GRAPEVINE TAX INCREMENT FINANCING
DISTRICT REINVESTMENT ZONE NUMBER ONE'S NET POSITION
Analysis of TIF #1's Operations
On December 15, 2015, the City expanded the boundaries and extended the term of TIF #1 until December 31,
2038. Upon the expansion of the TIF and with the original debt obligations of TIF #1 being retired in full in fiscal
year 2016, all participants in the TIF, except for the City, have withdrawn participation.
The net position of the governmental activities of TIF #1 decreased by $1,236,760 for fiscal year 2019. The
primary reason for this decrease was a disbursement of accumulated funds to Grapevine-Colleyville Independent
School District for construction of capital projects.
4
Governmental Activities
2019
2018
Current and other assets
$ 9,400,672
$ 13,725,715
Total assets
9,400,672
13,725,715
Current liabilities
-
3,088,283
Total liabilities
-
3,088,283
Net position:
Restricted
9,400,672
10,637,432
Total net position
$ 9,400,672
$ 10,637,432
Analysis of TIF #1's Operations
On December 15, 2015, the City expanded the boundaries and extended the term of TIF #1 until December 31,
2038. Upon the expansion of the TIF and with the original debt obligations of TIF #1 being retired in full in fiscal
year 2016, all participants in the TIF, except for the City, have withdrawn participation.
The net position of the governmental activities of TIF #1 decreased by $1,236,760 for fiscal year 2019. The
primary reason for this decrease was a disbursement of accumulated funds to Grapevine-Colleyville Independent
School District for construction of capital projects.
4
CITY OF GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE'S CHANGE IN NET POSITION
Governmental Activities
2018
$ 890,398
12,442,344
( 11,519,017)
22,156,449
$ 10,637,432
FINANCIAL ANALYSIS OF TIF #1'S FUNDS
Governmental Funds
The focus on TIF #1's governmental funds is to provide information on near-term inflows, outflows, and balances
of spendable resources. Such information is useful in assessing TIF #1's financing requirements.
At the end of the current fiscal year, TIF #1's governmental fund reported an ending fund balance of $9,400,672,
a decrease of $1,236,760 in comparison with the prior year.
REQUESTS FOR INFORMATION
This financial report is designed to provide our citizens, investors and creditors with a general overview of TIF #1's
finances. If you have questions about this report or need additional financial information, contact the Finance
Department, City of Grapevine, 200 S. Main Street, Grapevine, Texas 76051.
5
2019
General revenues:
Property taxes
$ 1,038,974
Unrestricted investment earnings
101,133
Total general revenues
1,140,107
Expenses:
Economic development
2,376,867
Total expenses
2,376,867
Change in net position
( 1,236,760)
Net position, beginning
10,637,432
Net position, ending
$ 9,400,672
2018
$ 890,398
12,442,344
( 11,519,017)
22,156,449
$ 10,637,432
FINANCIAL ANALYSIS OF TIF #1'S FUNDS
Governmental Funds
The focus on TIF #1's governmental funds is to provide information on near-term inflows, outflows, and balances
of spendable resources. Such information is useful in assessing TIF #1's financing requirements.
At the end of the current fiscal year, TIF #1's governmental fund reported an ending fund balance of $9,400,672,
a decrease of $1,236,760 in comparison with the prior year.
REQUESTS FOR INFORMATION
This financial report is designed to provide our citizens, investors and creditors with a general overview of TIF #1's
finances. If you have questions about this report or need additional financial information, contact the Finance
Department, City of Grapevine, 200 S. Main Street, Grapevine, Texas 76051.
5
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BASIC
FINANCIAL STATEMENTS
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GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE
(A Blended Component Unit of the City of Grapevine, Texas)
STATEMENT OF NET POSITION
SEPTEMBER 30, 2019
ASSETS
Cash and investments
Accrued interest
Total assets
NET POSITION
Restricted for construction of educational facilities
Restricted for economic development
Total net position
The accompanying notes are an integral
part of these financial statements.
$ 9,400,534
138
9,400,672
7,030,986
2,369,686
$ 9,400,672
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GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE
(A Blended Component Unit of the City of Grapevine, Texas)
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Functions/Programs
Governmental activities:
Economic development
Total governmental activities
Net (Expense)
Revenues and
Changesin
Net Position
Program Governmental
Expenses Revenue Activities
$ 2,376,867 $ - $( 2,376,867)
$ 2,376,867 $ - ( 2,376,867)
General revenues:
Property taxes
Unrestricted investment earnings
Total general revenues
Change in net position
Net position - beginning
Net position - ending
The accompanying notes are an integral
part of these financial statements. 7
1,038,974
101,133
1,140,107
( 1,236,760)
10,637,432
$ 9,400,672
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GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE
(A Blended Component Unit of the City of Grapevine, Texas)
BALANCE SHEET
GOVERNMENTAL FUNDS
AS OF SEPTEMBER 30, 2019
ASSETS
Cash and investments
Accrued interest
Total assets
FUND BALANCES
Restricted for construction of educational facilities
Restricted for economic development
Total fund balances
Total liabilities and fund balances
Net position of governmental activities
The accompanying notes are an integral
part of these financial statements. 8
Capital
Projects
$ 9,400,534
Total
$ 9,400,534
y11+vv10Ic u&w'oI
7,030,986
2,369,686
9,400,672
$ 9,400,672
7,030,986
2,369,686
9,400,672
$ 9,400,672
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GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE
(A Blended Component Unit of the City of Grapevine, Texas)
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
REVENUES
Property taxes
Investment income
Total revenues
EXPENDITURES
Economic development
Total expenditures
NET CHANGE IN FUND BALANCES
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
Net change in fund balance
Change in net position of governmental activities
The accompanying notes are an integral
part of these financial statements. 9
Capital
Projects
$ 1,038,974
101,133
1,140,107
2,376,867
2,376,867
( 1,236,760)
10,637,432
$ 9,400,672
Total
$ 1,038,974
101,133
1,140,107
2,376,867
2,376,867
( 1,236,760)
9,400,672
( 1,236,760)
$( 1,236,760)
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GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE
(A Blended Component Unit of the City of Grapevine, Texas)
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Grapevine Tax Increment Financing District Reinvestment Zone Number One (TIF #1) was created
on February 20, 1996. TIF #1 was formed to finance and make public improvements in the area
surrounding the Grapevine Mills mall under the authority of the Tax Increment Financing Act. TIF #1 is
governed by a nine -member Board of Directors; five members are appointed by the Grapevine City
Council, and the governing bodies of Tarrant County, Grapevine/Colleyville Independent School District,
Tarrant County Junior College District and Tarrant County Hospital District appoint one member each. TIF
#1 is a blended component unit of the City of Grapevine, Texas.
On December 15, 2015, the City expanded the boundaries and extended the term of TIF #1 until
December 31, 2038. The extension of the TIF, TIF #1A, will have base tax year of 2016. TIF #1 will
continue to promote and create mixed-use development and the project and financing plan outlines
funding of approximately $95 million. These public improvements will include streets; water, sewer and
storm facilities; open space; and parks and recreation. The amended TIF #1 will fund these improvements
exclusively through contributions of the City's ad valorem increment tax that will be generated within the
new designated boundary zone.
On January 19, 2016, TIF #1 (as authorized by Section 311.011, 311.008 and 311.0085 of the Act and
pursuant to Board Resolution TIF #1 2016-001), amended the plan to establish a TIF Educational
Facilities Category. On February 2, 2016, the City Council approved an ordinance to amend the project
and financing plan for TIF #1. The goal of this amendment was the continued funding of the construction
of needed public infrastructure and to encourage private development.
The accounting and reporting policies of TIF #1 conform to accounting principles generally accepted in
the United States of America as applicable to governmental entities. The following is a summary of the
more significant accounting and reporting policies.
The Capital Projects Fund is used to account for these capital projects. All construction in progress and
completed capital assets are transferred to the City or other entities.
A. Government -wide and Fund Financial Statements
The basic financial statements include both government -wide and fund financial statements. The
government -wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the activities of TIF #1.
The government -wide statement of activities demonstrates the degree to which the direct expenses of
a functional category or segment are offset by program revenues. Direct expenses are those that are
clearly identifiable with specific function or segment. Program revenues include (1) charges to
customers or applicants who purchase, use or directly benefit from goods, services, or privileges
provided by a given function or segment, and (2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment. Taxes and other
items not properly included among program revenues are reported instead as general revenues. TIF
#1 does not report any program revenues.
Separate fund -based financial statements are provided for the governmental fund. The major
individual governmental fund is reported as a separate column in the fund financial statements.
10
B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are
recognized as revenues in the year for which they are earned.
Government fund -level financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as
they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period. For
this purpose, TIF #1 considers revenues to be available if they are collected within 60 days of the end of
the current fiscal period. Property taxes are recognized in the year in which they are levied. Investment
earnings are recorded as earned since they are measurable and available.
C. Budgets and Budgetary Accountinq
An overall project budget was included in the plan to create TIF #1 and was approved by all parties
involved. Annual budgets are not adopted.
D. Assets, Liabilities and Net Position or Equity
1. Cash and Investments
Investments for TIF #1 are reported at fair value, except for the position in investment pools,
which are presented at net asset value per share.
2. Fund Balance Policies
Fund balance of governmental funds is reported in various categories based on the nature of any
limitations requiring the use of resources for specific purposes. The government itself can
establish limitations on the use of resources through either a commitment (committed fund
balance) or an assignment (assigned fund balance).
The committed fund balance classification includes amounts that can be used only for the
specific purposes determined by a formal action of the government's highest level of decision-
making authority. A resolution made by the Board of Directors is the highest level of decision-
making authority for TIF #1 that can commit fund balance. Once adopted, the limitation imposed
remains in place until a similar action is taken to remove or revise the limitation.
Amounts in the assigned fund balance classification are intended to be used by the
government for specific purposes but do not meet the criteria to be classified as committed. The
Board of Directors can assign fund balance. Unlike commitments, assignments generally only
exist temporarily. In other words, an additional action does not normally have to be taken for the
removal of an assignment. Conversely, as discussed above, an additional action is essential to
either remove or revise a commitment.
3. Net Position Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted (e.g.,
restricted bond proceeds) and unrestricted resources. In order to calculate the amounts to report
as restricted net position and unrestricted net position in the government -wide financial
statements, a flow assumption must be made about the order in which the resources are
considered to be applied.
It is TIF #1's policy to consider restricted net position to have been depleted before unrestricted
net position is applied.
11
4. Fund Balance Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted and
unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to
calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in
the governmental fund financial statements a flow assumption must be made about the order in
which the resources are considered to be applied. It is the government's policy to consider
restricted fund balance to have been depleted before using any of the components of unrestricted
fund balance. Further, when the components of unrestricted fund balance can be used for the same
purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned
fund balance is applied last.
II. CASH AND INVESTMENTS
The cash and investment policies of TIF #1 mirror the City of Grapevine's policies. City policies governing
bank deposits require depositories to be FDIC -insured institutions, and depositories must fully
collateralize all deposits in excess of FDIC insurance limits.
Investment in the CiVs cash and investment pool $ 9,400,534
Interest Rate Risk. In accordance with its investment policy, the City minimizes the risk that the interest
earnings and the market value of investments in the portfolio will fall due to changes in general interest
rates, by:
a. Structuring the investment portfolio so that investments mature to meet cash
requirements for ongoing operations, thereby avoiding the need to liquidate
investments prior to maturity.
b. Investing operating funds primarily in certificates of deposit, shorter -term securities,
money market mutual funds, or local government investment pools functioning as
money market mutual funds.
c. Diversifying maturities and staggering purchase dates to minimize the impact of
market movements over time.
Credit Risk. In accordance with its investment policy, the City minimizes credit risk, the risk of loss due to
the failure of the issuer or backer of the investment by:
a. Limiting investments to the safest types of investments.
b. Pre -qualifying the financial institutions and broker/dealers with which the City will do
business.
c. Diversifying the investment portfolio so that potential losses on individual issuers will
be minimized.
Concentration of Credit Risk. The City's investment policy allows up to 100% to be invested in U. S.
Treasury Bills/Notes/Bonds and U. S. agencies and instrumentalities. The City's investment in the
securities of U. S. agencies are rated AAA by Standard & Poor's. As of September 30, 2019, the City's
investments in TexPool and LOGIC were rated AAAm.
Custodial Credit Risk. State statutes require that all City deposits in financial institutions be fully
collateralized by U. S. Government obligations or obligations of the State of Texas or its agencies. The
City's deposits were fully collateralized, or have a letter of credit issued by the Federal Home Loan Bank as
required by State statutes at September 30, 2019. The bank balances were fully collateralized by
government securities.
12
-WT
TexPool and LOGIC each have a redemption notice period of one day and may redeem daily. The
investment pools' authority may only impose restrictions on redemptions in the event of a general
suspension of trading on major securities markets, general banking moratorium or national state of
emergency that affects the pool's liquidity.
APPRAISED VALUES
A summary of appraised values for TIF #1 is as follows:
Tax Year
2018 Appraised
Value
1996
Base Year
Appraised Value
Captured
Appraised
Value
City of Grapevine $ 313,567,149 $ 7,647,325 $ 305,919,824
The captured appraised value of TIF #1 is the total appraised value of all real property taxable by the unit
and located in the reinvestment zone less the base year appraised value of all real property taxable by
the unit and located in the reinvestment zone at the time TIF #1 was established (1996).
A summary of appraised values for TIF #1A is as follows:
Tax Year
2018 Appraised
Value
2016
Base Year
Appraised Value
Captured
Appraised
Value
City of Grapevine $ 87,114,783 $ 57,644,619 $ 29,470,164
The captured appraised value of TIF #1A is the total appraised value of all real property taxable by the
unit and located in the reinvestment zone less the base year appraised value of all real property taxable
by the unit and located in the reinvestment zone at the time TIF #1A was established (2016).
PLEDGED REVENUES
The Board of Directors for TIF #1 approved amending the Financing and Project Plan to allow the
creation of a 380 category within the Financing and Project Plan whereas all City funds contributed to
date and additional funds contributed be placed in a 380 account in the TIF #1 zone to incentivize further
economic development in the zone.
13
YW4�!111
PATTILLO, BROWN & HILL, L.L.P.
401 West State Highway 6
Waco, Texas 76710
254.7724901 pbhcpa.com
INDEPENDENT AUDITOR'S 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
Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States, the financial statements of the governmental activities and
each major fund of the Grapevine Tax Increment Financing District Reinvestment Zone Number One ("TIF
#1"), a component unit of the City of Grapevine, Texas, as of and for the year ended September 30, 2019,
and the related notes to the financial statements, which collectively comprise TIF #1's basic financial
statements, and have issued our report thereon dated March 12, 2020.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered TIF #1's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose
of expressing an opinion on the effectiveness of TIF #1's internal control. Accordingly, we do not express an
opinion on the effectiveness of TIF #1's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or detect
and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of
deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the
entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
14
OFFICE LOCATIONS
TEXAS I Waco Temple I Hillsboro I Houston
NEW MEXICO Albuquerque
``9
AICPA
GAQC Member
Compliance and Other Matters
As part of obtaining reasonable assurance about whether TIF #1's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results
of our tests disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's
internal control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this
communication is not suitable for any other purpose.
P0�4&0/ Y> ` Oat ) L.L:?,
Waco, Texas
March 12, 2020
15
GRAPEVINE TAX INCREMENT
FINANCING DISTRICT REINVESTMENT
ZONE NUMBER TWO
(A Blended Component Unit of
The City of Grapevine, Texas)
BASIC FINANCIAL STATEMENTS
As of and for the Year Ended
SEPTEMBER 30, 2019
(With Independent Auditor's Report)
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GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO
(A Blended Component Unit of the City of Grapevine, Texas)
BASIC FINANCIAL STATEMENTS
TABLE OF CONTENTS
SEPTEMBER 30, 2019
Page
Number
Independent Auditor's Report................................................................................................... 1 — 2
Management's Discussion and Analysis.................................................................................. 3-6
Basic Financial Statements:
Government -wide Financial Statements:
Statementof Net Position................................................................................................... 7
Statementof Activities........................................................................................................ 8
Fund Financial Statements:
Balance Sheet — Governmental Funds.............................................................................. 9
Statement of Revenues, Expenditures and Changes in
Fund Balances — Governmental Funds........................................................................... 10
Notes to Financial Statements............................................................................................... 11 —15
Independent Auditor's 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................................................................................................. 16-17
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BASIC FINANCIAL STATEMENTS
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VV4�!111
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
PATTILLO, BROWN & HILL, L.L.P.
401 West State Highway 6
Waco, Texas 76710
254.7724901 pbhcpa.com
We have audited the accompanying financial statements of the governmental activities and each
major fund of the Grapevine Tax Increment Financing District Reinvestment Zone Number Two ("TIF #2"), a
component unit of the City of Grapevine, Texas, as of and for the year ended September 30, 2019, and the
related notes to the financial statements, which collectively comprise TIF #2's basic financial statements as
listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers internal control relevant to the entity's preparation and
fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
OFFICE LOCATIONS
TEXAS I Waco Temple I Hillsboro I Houston
NEW MEXICO Albuquerque
`��M
AICPA
GAQC Member
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and each major fund of TIF #2, as of September
30, 2019, and the respective changes in financial position for the year then ended in accordance 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 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 Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 12,
2020 on our consideration of TIF #2's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.
The purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering TIF #2's internal control over financial reporting and
compliance.
Pa4&0 / Yk-o"YA ` 4ak L.L.-?,
Waco, Texas
March 12, 2020
2
MANAGEMENT'S
DISCUSSION AND ANALYSIS
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MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Grapevine, Texas (the "City"), we offer readers of the Grapevine Tax Increment
Financing District Reinvestment Zone Number Two's ("TIF #2") financial statements this narrative overview and
analysis of the financial activities of TIF #2 for the fiscal year ended September 30, 2019. TIF #2 was formed to
finance and make public improvements in the area surrounding the Gaylord Texan Resort and Convention Center
under the Tax Increment Financing Act. The current TIF #2 agreement is expected to end in 2026, after the last
debt payment has been made.
FINANCIAL HIGHLIGHTS
• The liabilities of TIF #2 exceeded its assets and deferred outflows of resources at the close of
the most recent fiscal year by $3,518,630. This deficit net position is primarily due to debt that
was issued in connection with the public improvement project in the Gaylord Texan Resort
and Convention Center area. Although TIF #2 is responsible for servicing this debt, the
related assets are not TIF #2's. This deficit will be eliminated as resources are obtained (e.g.,
from future tax revenues).
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis serves as an introduction to the TIF #2's basic financial statements. TIF #2's basic
financial statements are comprised of three components: government -wide financial statements, fund financial
statements, and notes to the financial statements.
Government -wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad overview of TIF #2's
finances in a manner similar to a private -sector business.
The Statement of Net Position presents information on all of TIF #2's assets, deferred outflows of resources and
liabilities, with the difference reported as net position. Over time, increases or decreases in net position may serve
as a useful indicator of whether the financial position of TIF #2 is improving or deteriorating.
The Statement of Activities presents information showing how TIF #2's net position changed during the fiscal year. All
changes in net position are reported as soon as the underlying event giving rise 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).
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. TIF #2 uses fund accounting to ensure and demonstrate compliance with finance -
related legal requirements.
• 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 current sources and uses 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.
3
Because the focus of governmental funds is narrower than that of the government -wide
financial statements, it is useful to compare the information presented for 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 TIF #2's near-
term financing decisions. Both the governmental funds balance sheet and the governmental
fund statements of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental
activities.
The fund financial statements include two funds: (1) the General Fund, which is used to
account for principal and interest payments, and (2) the Capital Projects Fund, which is used to
account for the acquisition and construction of public improvements.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government -wide and fund financial statements. The notes to the financial statements can be found immediately
following the fund financial statements.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. As of
September 30, 2019, TIF #2's liabilities exceeded assets and deferred outflows of resources by $3,518,630.
The following table reflects the condensed Statement of Net Position:
CITY OF GRAPEVINE TAX INCREMENT FINANCING
DISTRICT REINVESTMENT ZONE NUMBER TWO'S NET POSITION
Analysis of TIF #2's Operations
Governmental activities increased TIF #2's net position by $4,111,801 with TIF #2's liabilities to assets and
deferred outflows of resources ratio decreasing from 1.8 in FY 2018 to 1.3 in fiscal year 2019. TIF#2 entered into
a local agreement with the Grapevine-Colleyville Independent School District and pledged future ad valorem
taxes collected by TIF #2 to be contributed towards the district's middle school debt. The total amount that TIF #2
paid the district in fiscal year 2019 was $1,430,250.
4
Governmental Activities
2019
2018
Current and other assets
$ 11,706,115
$ 9,425,778
Total assets
11,706,115
9,425,778
Deferred outflows of resources
193,048
220,626
Long-term liabilities outstanding
15,345,718
17,196,535
Other liabilities
72,075
80,300
Total liabilities
15,417,793
17,276,835
Net position:
Unrestricted
( 3,518,630)
( 7,630,431)
Total net position
$( 3,518,630)
$( 7,630,431)
Analysis of TIF #2's Operations
Governmental activities increased TIF #2's net position by $4,111,801 with TIF #2's liabilities to assets and
deferred outflows of resources ratio decreasing from 1.8 in FY 2018 to 1.3 in fiscal year 2019. TIF#2 entered into
a local agreement with the Grapevine-Colleyville Independent School District and pledged future ad valorem
taxes collected by TIF #2 to be contributed towards the district's middle school debt. The total amount that TIF #2
paid the district in fiscal year 2019 was $1,430,250.
4
The following table provides a summary of TIF #2 operations for the year ended September 30, 2019.
CITY OF GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO'S CHANGE IN NET POSITION
Governmental Activities
2019 2018
Revenues:
General revenues:
Property taxes $ 5,806,220 $ 4,817,939
Unrestricted investment earnings 193,217 149,770
Total revenues 5,999,437 4,967,709
Expenses:
Economic development 1,430,250 1,410,250
Interest 457,386 507,255
Total expenses 1,887,636 1,917,505
Change in net position 4,111,801 3,050,204
Net position, beginning ( 7,630,431) ( 10,680,635)
Net position, ending $( 3,518,630) $( 7,630,431)
FINANCIAL ANALYSIS OF TIF #2's FUNDS
Governmental Funds
The focus of the TIF #2's governmental funds is to provide information on near-term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing TIF #2's financing requirements.
At the end of the current fiscal year, TIF #2's governmental funds reported combined ending fund balances of
$11,706,115, an increase of $2,280,337 in comparison with the prior year. The fund balance consists of the
following: (1) restricted for economic development: $9,439,307 and (2) restricted for capital projects: $2,266,808.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. Capital assets of TIF #2 are recorded as expenditures in the Capital Projects Fund when
constructed. Completed capital assets are transferred to the City.
Long-term Debt. At the end of the current fiscal year, TIF #2 had total bonded debt outstanding of $13,905,000,
which is backed by the full faith and credit of TIF #2.
CITY OF GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO'S OUTSTANDING DEBT
Combination Taxlncrement Reinvestment
Zone Revenue Refunding Bonds,
Series 2015A due in annual installments
of $375,000 to $2,230,000 through
August 2026; interest at 2% to 5%
5
2019
$ 13,905,000
$ 13,905,000
2018
$ 15,550,000
$ 15,550,000
REQUESTS FOR INFORMATION
This financial report is designed to provide our citizens, investors and creditors with a general overview of TIF #2's
finances. If you have questions about this report or need additional financial information, contact the Finance
Department, City of Grapevine, 200 S. Main Street, Grapevine, Texas 76051.
6
BASIC
FINANCIAL STATEMENTS
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GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO
(A Blended Component Unit of the City of Grapevine, Texas)
STATEMENT OF NET POSITION
SEPTEMBER 30, 2019
ASSETS
Cash and investments
Accrued interest
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on bond refunding
Total deferred outflows of resources
LIABILITIES
Accrued interest payable
Bonds payable - due in one year
Bonds payable - due in more than one year
Total liabilities
NET POSITION
Unrestricted
Total net position
The accompanying notes are an integral
part of these financial statements. 7
$ 11,705,564
551
11,706,115
193,048
193,048
72,075
1,720,000
13,625,718
15,417,793
( 3,518,630)
$( 3,518,630)
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GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO
(A Blended Component Unit of the City of Grapevine, Texas)
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Functions/Programs
Governmental activities:
Economic development
Interest
Total governmental activities
Expenses
$ 1,430,250
$ 1,887,636
Program
Revenue
General revenues:
Property taxes
Unrestricted investment earnings
Total general revenues
Change in net position
Net position - beginning
Net position - ending
The accompanying notes are an integral
part of these financial statements. 8
Net (Expense)
Revenues and
Changesin
Net Position
Governmental
Activities
$( 1,430,250)
( 457,386)
- ( 1,887,636)
5,806,220
193,217
5,999,437
4,111,801
( 7,630,431)
$( 3,518,630)
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GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO
(A Blended Component Unit of the City of Grapevine, Texas)
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2019
ASSETS
Cash and investments
Accrued interest
Total assets
LIABILITIES AND FUND BALANCES
Total Liabilities
Fund balances:
Capital
General Projects Total
$ 9,438,756 $ 2,266,808 $ 11,705,564
551 - 551
9,439,307 2,266,808 11,706,115
Restricted for capital projects -
Restricted for economic development 9,439,307
Total fund balances 9,439,307
Total liabilities and fund balances $ 9,439,307
Amounts reported for governmental activities in the statement of net
position are different because:
Long-term liabilities are not due and payable in the current period and
therefore are not reported in the funds:
Accrued interest payable
Deferred loss on refunding
Bonds payable
Premium on issuance of debt
Net position of governmental activities
The accompanying notes are an integral
part of these financial statements. 9
2,266,808 2,266,808
- 9,439,307
2,266,808 11,706,115
$ 2,266,808
( 72,075)
193,048
( 13,905,000)
( 1,440,718)
$( 3,518,630)
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GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO
(A Blended Component Unit of the City of Grapevine, Texas)
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
REVENUES
Taxes:
Property taxes
Investment income
Total revenues
EXPENDITURES
Economic development
Debt service:
Principal
Interest
Fiscal charges
Total expenditures
NET CHANGE IN FUND BALANCES
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING $ 9,439,307 $ 2,266,808 11,706,115
Net change in fund balances 2,280,337
Amounts reported for governmental activities in the statement of
activities are different because:
The repayment of principal of long-term debt consumes the current financial
resources of governmental funds, but reduces bond principal at the
government -wide level. 1,645,000
Interest expense is accrued in the government -wide financial statements,
but not at the fund level. 8,225
Amortization of premium, loss, etc. are reported in the statement
of activities but do not require the use of current financial resources and,
therefore, are not reported as expenditures in the funds. 178,239
Change in net position of governmental activities $ 4,111,801
The accompanying notes are an integral
part of these financial statements. 10
Capital
General
Projects
Total
$ 5,806,220
$ - $
5,806,220
137,703
55,514
193,217
5,943,923
55,514
5,999,437
1,430,250
-
1,430,250
1,645,000
-
1,645,000
642,400
-
642,400
750
700
1,450
3,718,400
700
3,719,100
2,225,523
54,814
2,280,337
7,213,784
2,211,994
9,425,778
FUND BALANCE, ENDING $ 9,439,307 $ 2,266,808 11,706,115
Net change in fund balances 2,280,337
Amounts reported for governmental activities in the statement of
activities are different because:
The repayment of principal of long-term debt consumes the current financial
resources of governmental funds, but reduces bond principal at the
government -wide level. 1,645,000
Interest expense is accrued in the government -wide financial statements,
but not at the fund level. 8,225
Amortization of premium, loss, etc. are reported in the statement
of activities but do not require the use of current financial resources and,
therefore, are not reported as expenditures in the funds. 178,239
Change in net position of governmental activities $ 4,111,801
The accompanying notes are an integral
part of these financial statements. 10
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GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO
(A Blended Component Unit of the City of Grapevine, Texas)
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Grapevine Tax Increment Financing District Reinvestment Zone Number Two (TIF #2) was created
on December 28, 1998. TIF #2 was formed to finance and make public improvements in the area
surrounding the Gaylord Texan Resort and Convention Center under the authority of the Tax Increment
Financing Act. TIF #2 is governed by a six -member board of directors; five members are appointed by the
Grapevine City Council, and the governing body of Grapevine/Colleyville Independent School District
appoints one member. The termination of TIF #2 is set as either December 31, 2030, or the date when all
project costs are paid and all debt is retired, whichever comes first. TIF #2 is a blended component unit of
the City of Grapevine, Texas.
The accounting and reporting policies of TIF #2 conform to accounting principles generally accepted in
the United States of America, as applicable to governmental units. The following is a summary of the
more significant accounting and reporting policies:
A. Government -wide and Fund Financial Statements
The basic financial statements include both government -wide and fund financial statements. The
government -wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the activities of TIF #2.
The government -wide statement of activities demonstrates the degree to which the direct expenses of
a functional category or segment are offset by program revenues. Direct expenses are those that are
clearly identifiable with a specific function or segment. Program revenues include (1) charges to
customers or applicants who purchase, use or directly benefit from goods, services, or privileges
provided by a given function or segment, and (2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment. Taxes and other
items not properly included among program revenues are reported instead as general revenues. The
TIF does not report any program revenues.
Separate fund -based financial statements are provided for governmental funds. Major individual
governmental funds are reported as separate columns in the fund financial statements. The major
governmental funds are the General Fund, which is used to account for economic development and
debt service payments, and the Capital Projects Fund, which is used to account for financial
resources to be used for the acquisition or construction of major capital facilities.
The government -wide focus is more on the sustainability of TIF #2 as an entity and the change in
aggregate financial position resulting from the activities of the fiscal period. The focus of the fund
financial statements is on the major individual funds. Each presentation provides valuable information
that can be analyzed and compared to enhance the usefulness of the information.
B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are
recognized as revenues in the year for which they are earned.
11
Government fund -level financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon
as they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period.
For this purpose, TIF #2 considers revenues to be available if they are collected within 60 days of the
end of the current fiscal period. Property taxes are recognized in the year in which they are levied.
Investment earnings are recorded as earned since they are measurable and available.
C. Budgets and Budgetary Accounting
An overall project budget was included in the plan to create TIF #2 and approved by all parties
involved. Annual budgets are not adopted.
D. Assets, Liabilities and Net Position or Equity
1. Cash and Investments
Investments for TIF #2 are reported at fair value, except for its position in investment pools, which
are recorded at net asset value per share.
2. Long-term Debt
In the government -wide financial statements, long-term debt and other long-term obligations are
reported as liabilities in the applicable governmental activities statement of net position. Bond
premiums and discounts are deferred and amortized over the life of the bonds. Bonds payable
are reported net of the applicable bond premium or discount.
In the fund financial statements, governmental funds recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. The face amount of debt issued is
reported as other financing sources. Premiums received on debt issuances are reported as other
financing sources while discounts on debt issuances are reported as other financing uses.
Issuance costs, whether or not withheld from the actual debt proceeds, are reported as debt
service expenditures.
3. Fund Balance Policies
Fund balance of governmental funds is reported in various categories based on the nature of any
limitations requiring the use of resources for specific purposes. The government itself can establish
limitations on the use of resources through either a commitment (committed fund balance) or an
assignment (assigned fund balance).
The committed fund balance classification includes amounts that can be used only for the specific
purposes determined by a formal action of the government's highest level of decision-making
authority. A resolution made by the Board of Directors is the highest level of decision-making
authority for TIF #2 that can commit fund balance. Once adopted, the limitation imposed remains in
place until a similar action is taken to remove or revise the limitation.
Amounts in the assigned fund balance classification are intended to be used by the government for
specific purposes but do not meet the criteria to be classified as committed.
The Board of Directors can assign fund balance. Unlike commitments, assignments generally only
exist temporarily. In other words, an additional action does not normally have to be taken for the
removal of an assignment. Conversely, as discussed above, an additional action is essential to
either remove or revise a commitment.
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4. Net Position Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted (e.g.,
restricted bond proceeds) and unrestricted resources. In order to calculate the amounts to report as
restricted — net position and unrestricted — net position in the government -wide financial statements,
a flow assumption must be made about the order in which the resources are considered to be
applied.
It is TIF #2's policy to consider restricted — net position to have been depleted before unrestricted —
net position is applied.
5. Fund Balance Flow Assumptions
Sometimes the government will fund outlays for a particular purpose from both restricted and
unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to
calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in
the governmental fund financial statements a flow assumption must be made about the order in
which the resources are considered to be applied. It is the government's policy to consider
restricted fund balance to have been depleted before using any of the components of unrestricted
fund balance. Further, when the components of unrestricted fund balance can be used for the same
purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned
fund balance is applied last.
6. Deferred Inflows/Outflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows of
resources, represents a consumption of net position that applies to a future period(s) and so will not
be recognized as an outflow of resources (expense/expenditure) until then. TIF #2 is reporting a
balance for a deferred loss on bond refunding in the government -wide Statement of Net Position. A
deferred loss on a bond refunding results when the reacquisition price of the refunded debt exceeds
the carrying value. This amount is deferred and amortized over the shorter of the life of the refunded
or refunding debt.
CASH AND INVESTMENTS
The cash and investment policies of TIF #2 mirror the City of Grapevine's policies. City policies governing
bank deposits require depositories to be FDIC -insured institutions, and depositories must fully
collateralize all time deposits in excess of FDIC insurance limits.
The City invests in state investment pools (TexPool, TexPool Prime and LOGIC). These approved pooled
investments are carried at net asset value.
The components of TIF #2's cash and investments at September 30, 2019, were as follows:
Investment in the Citys cash and investment pool
$ 11,705,564
Interest Rate Risk. In accordance with its investment policy, the City minimizes the risk that the interest
earnings and the market value of investments in the portfolio will fall due to changes in general interest
rates, by:
a. Structuring the investment portfolio so that investments mature to meet cash
requirements for ongoing operations, thereby avoiding the need to liquidate
investments prior to maturity.
Investing operating funds primarily in certificates of deposit, shorter -term securities,
money market mutual funds, or local government investment pools functioning as
money market mutual funds.
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c. Diversifying maturities and staggering purchase dates to minimize the impact of
market movements over time.
Credit Risk. In accordance with its investment policy, the City minimizes credit risk, the risk of loss due to
the failure of the issuer or backer of the investment by:
a. Limiting investments to the safest types of investments.
b. Pre -qualifying the financial institutions and broker/dealers with which the City will do
business.
c. Diversifying the investment portfolio so that potential losses on individual issuers will
be minimized.
Concentration of Credit Risk. The City's investment policy allows up to 100% to be invested in U. S.
Treasury Bills/Notes/Bonds, and U. S. Agencies and Instrumentalities. As of September 30, 2019, the
City's investments in TexPool and Logic were rated AAAm.
Custodial Credit Risk. State statutes require that all City deposits in financial institutions be fully
collateralized by U. S. Government obligations or obligations of the State of Texas or its agencies. The
City's deposits were fully collateralized or have a letter of credit issued by the Federal Home Loan Bank as
required by State statutes at September 30, 2019. The bank balances were fully collateralized by
government securities.
TexPool and LOGIC each have a redemption notice period of one day and may redeem daily. The
investment pools' authority may only impose restrictions on redemptions in the event of a general
suspension of trading on major securities markets, general banking moratorium or national state of
emergency that affects the pool's liquidity.
LONG-TERM LIABILITIES
Long-term liabilities are as follows:
Balance
9/30/2018
Combination Tax Increment
Reinvestment Zone Revenue
Refunding Bonds, Series
2015A; due in annual
installments of $375,000 to
$2,230,000 through
August 2026; 2% to 5% $ 15,550,000 $
Total debt outstanding $ 15,550,000
Unamortized premium
Balance Due Within
Additions Retirements 9/30/2019 One Year
$( 1,645,000) $ 13,905,000 $ 1,720,000
$( 1,645,000) 13,905,000 $ 1,720,000
1,440,718
Total debt outstanding $ 15,345,718
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The annual requirements to amortize the long-term debt as of September 30, 2019, are as follows:
Year Ending
September 30,
Principal Interest
2020
$ 1,720,000
$ 576,600
2021
1,810,000
490,600
2022
1,895,000
400,100
2023
1,990,000
305,350
2024
2,095,000
205,850
2025-2026
4,395,000
221,050
Total
$ 13,905,000 $ 2,199,550
The Series 2015A bonds constitute direct obligations of the City, payable from a combination of (i) the
levy and collection of a continuing ad valorem tax, levied within the limits prescribed by law, on all taxable
property within the City, and (ii) a subordinate lien on and pledge of the tax increments of the City's
Reinvestment Zone Number Two. Should the City default on these bonds, any registered owner of the
certificates is entitled to seek a writ of mandamus from a court of proper jurisdiction requiring specific
performance from the City.
IV. APPRAISED VALUES AND TAX RATES
A summary of appraised values for TIF #2 is as follows:
City of Grapevine
Grapevine-ColleyviIle Independent
School District
Tax Year 1998 Base Captured
2018 Appraised Year Appraised Appraised
Value Value Value
$ 338,262,603
338,262,603
$ 744,886 $ 337,517,717
744,886 337,517,717
The captured appraised value of TIF #2 is the total appraised value of all real property taxable by the unit
and located in the reinvestment zone less the base year appraised value of all real property taxable by
the unit and located in the reinvestment zone at the time TIF #2 was established (1999).
Tax rates for TIF #2 are as follows (per $100 valuation):
Rate
City of Grapevine 0.289271
Grapevine-Colleyville Independent
School District 1.396700
V. PLEDGED REVENUES
TIF #2 has entered into a local agreement with the Grapevine-Colleyvi Ile Independent School District
where future ad valorem taxes collected for the zone are pledged to contribute towards the district's
middle school debt. The total amount that TIF #2 has pledged to pay is $30,704,051 as of September 30,
2019. The amount of the annual payment is negotiated each year with the district.
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IV4�7�11
PATTILLO, BROWN & HILL, L.L.P.
401 West State Highway 6
Waco, Texas 76710
254.7724901 pbhcpa.com
INDEPENDENT AUDITOR'S 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
Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States, the financial statements of the governmental activities and
each major fund of Grapevine Tax Increment Financing District Reinvestment Zone Number Two ("TIF #2"), a
component unit of the City of Grapevine, Texas, as of and for the year ended September 30, 2019, and the
related notes to the financial statements, which collectively comprise TIF #2's basic financial statements, and
have issued our report thereon dated March 12, 2020.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered TIF #2's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose
of expressing an opinion on the effectiveness of TIF #2's internal control. Accordingly, we do not express an
opinion on the effectiveness of TIF #2's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or detect
and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of
deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the
entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
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OFFICE LOCATIONS
TEXAS I Waco Temple I Hillsboro I Houston
NEW MEXICO Albuquerque
AN
GAQC Member
Compliance and Other Matters
As part of obtaining reasonable assurance about whether TIF #2's financial statements are free from material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements, noncompliance with which could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed
no instances of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's
internal control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this
communication is not suitable for any other purpose.
?0�,4&0i TX-*VYA ` Fiat ) L L. -?-
Waco, Texas
March 12, 2020
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