HomeMy WebLinkAboutItem 04 - Annual City AuditMEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: BRUNO RUMBELOW, CITY MANAGE
MEETING DATE: MARCH 18, 2014
SUBJECT: FILING OF ANNUAL CITY AUDIT
RECOMMENDATION:
A representative from Pattillo, Brown & Hill, LLC, the City's auditing 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 of Pattillo, Brown & Hill, LLC completed the audit of the City's FY 2013 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
"unqualified opinion ", meaning there are no material exceptions found to the fairness
criteria under which the records were audited.
The management letter did not note any recommendations relative to City procedures.
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.
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PATTILLO, BROWN & HILL, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
March 18, 2014
To the Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
We have audited the financial statements of the governmental activities, the business-type
activities, the aggregate discretely presented component units, each major fund, and the aggregate
remaining fund information of the City of Grapevine, Texas (the "City") for the year ended September
30, 2013. Professional standards require that we provide you with information about our responsibilities
under generally accepted auditing standards and Government Auditing Standards, as well as certain
information related to the planned scope and timing of our audit. We have communicated such
information in our letter to you dated April 25, 2013. Professional standards also require that we
communicate to you the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practice
Management is responsible for the selection and use of appropriate accounting policies. The
significant accounting policies used by the City are described in Note 1 to the financial statements. No
new accounting policies were adopted and the application of existing policies was not changed during
the year ended September 30, 2013. We noted no transactions entered into by the governmental unit
during the year for which there is a lack of authoritative guidance or consensus. All significant
transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management
and are based on management's 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 significantly from those expected. The most sensitive estimate(s) affecting the financial
statements were:
• Uncollectible accounts receivable
• Accumulated depreciation on capital assets and useful lives of capital assets
• Health claims payable
• Annual OPEB cost and net OPEB obligation.
401 WEST HIGHWAY 6■P.O.BOX 20725■WACO,TX 76702-0725■(254)772-49010 FAX:(254)772-4920■www.pbhcpa.com
AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■HILLSBORO,TX(254)582-2583
TEMPLE,TX(254)791-3460■ALBUQUERQUE,NM(505)266-5904
We evaluated the key factors and assumptions used to develop these estimates in
determining that they are reasonable in relation to the financial statements taken as a whole.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and
completing our audit.
Corrected and Uncorrected Misstatement
Professional standards require us to accumulate all known and likely misstatements identified
during the audit, other than those that are clearly trivial, and communicate them to the appropriate level
of management. Management has corrected all such misstatements. In addition, none of the
misstatements detected as a result of audit procedures and corrected by management were material,
either individually or in the aggregate, to each opinion unit's financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting,
or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor's report. We are pleased to report that no such disagreements arose during the
course of our audit.
Management Representations
We have requested certain representations from management that are included in the
management representation letter dated March 18, 2014.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation
involves application of an accounting principle to the governmental unit's financial statements or a
determination of the type of auditor's opinion that may be expressed on those statements, our
professional standards require the consulting accountant to check with us to determine that the
consultant has all the relevant facts. To our knowledge, there were no such consultations with other
accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the governmental unit's auditors.
However, these discussions occurred in the normal course of our professional relationship and our
responses were not a condition to our retention.
Other Matters
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With respect to the supplementary information accompanying the financial statements, we made
certain inquiries of management and evaluated the form, content, and methods of preparing the
information to determine that the information complies with accounting principles generally accepted in
the United States of America, the method of preparing it has not changed from the prior period, and the
information is appropriate and complete in relation to our audit of the financial statements. We
compared and reconciled the supplementary information to the underlying accounting records used to
prepare the financial statements or to the financial statements themselves.
Significant Forthcoming Accounting Standards
Financial ReportiW of De erred Outflows of Resources, Deferred Inflows of Resources, and Net Position
Governmental Accounting Standards Board Statement No. 65 ("GASB 65"), Items Previously
Reported as Assets and Liabilities, is effective for periods beginning after December 15, 2012. This
Statement establishes accounting and financial reporting standards that reclassify, as deferred outflows
of resources or deferred inflows of resources, certain items that were previously reported as assets and
liabilities and recognizes, as outflows of resources or inflows of resources, certain items that were
previously reported as assets and liabilities.
Concepts Statement No. 4, Elements of Financial Statements, introduced and defined the
elements included in financial statements, including deferred outflows of resources and deferred inflows
of resources. In addition, Concepts Statement 4 provides that reporting a deferred outflow of resources
or a deferred inflow of resources should be limited to those instances identified in authoritative
pronouncements that are established after applicable due process. Prior to the issuance of this Statement,
only two such pronouncements have been issued. Statement No. 53, Accounting and Financial
Reporting for Derivative Instruments, requires the reporting of a deferred outflow of resources or a
deferred inflow of resources for the changes in fair value of hedging derivative instruments, and
Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements, requires
a deferred inflow of resources to be reported by a transferor government in a qualifying service
concession arrangement. This Statement amends the financial statement element classification of certain
items previously reported as assets and liabilities to be consistent with the definitions in Concepts
Statement 4.
This Statement also provides other financial reporting guidance related to the impact of the
financial statement elements deferred outflows of resources and deferred inflows of resources, such as
changes in the determination of the major fund calculations and limiting the use of the term deferred in
financial statement presentations.
Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27
The primary objective of this Statement is to improve accounting and financial reporting by
state and local governments for pensions. This Statement establishes standards for measuring and
recognizing liabilities, deferred outflows of resources, and deferred inflows of resources, and
expense/expenditures. For defined benefit pensions, this Statement identifies the methods and
assumptions that should be used to project benefit payments, discount projected benefit payments to
their actuarial present value, and attribute that present value to periods of employee service.
The requirements of this Statement will improve the decision-usefulness of information in
employer and governmental nonemployer contributing entity financial reports and will enhance its
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value for assessing accountability and interperiod equity by requiring recognition of the entire net
pension liability and a more comprehensive measure of pension expense. Decision-usefulness and
accountability also will be enhanced through new note disclosures and required supplementary
information, as follows:
• More robust disclosures of assumptions will allow for better informed assessments of the
reasonableness of pension measurements.
• Explanations of how and why the net pension liability changed from year to year will
improve transparency.
• The summary net pension liability information, including ratios, will offer an indication of
the extent to which the total pension liability is covered by resources held by the pension
plan.
• The contribution schedules will provide measures to evaluate decisions related to the
assessment of contribution ratesin comparison to actuarially, statutorily, or contractually
determined rates, when such rates are determined. It also will provide information about
whether employers and nonemployer contributing entities, if applicable, are keeping pace
with those contribution rates.
The consistency and transparency of the information reported by employers and governmental
nonemployer contributing entities about pension transactions will be improved by requiring:
• The use of a discount rate that considers the availability of the pension plan's fiduciary net
position associated with the pensions of current active and inactive employees and the
investment horizon of those resources, rather than utilizing only the long-term expected rate
of return regardless of whether the pension plan's fiduciary net position is projected to be
sufficient to make projected benefit payments and is expected to be invested using a strategy
to achieve that return
• A single method of attributing the actuarial present value of projected benefit payments to
periods of employee service, rather than allowing a choice among six methods with
additional variations
• Immediate recognition in pension expense, rather than a choice of recognition periods, of the
effects of changes of benefit terms and the effects of projected pension plan investment
earnings
• Recognition of pension expense that incorporates deferred outflows of resources and
deferred inflows of resources related to pensions over a defined, closed period, rather than a
choice between an open or closed period.
This information is intended solely for the use of and management of the City Council 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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Waco, Texas
March 18, 2014
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CITY OF GRAPEVINE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2013
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CITY OF GRAPEVINE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2013
Prepared by: Department of Administrative Services
Finance Division
CITY OF GRAPEVINE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013
HOME RULE, COUNCIL-MANAGER FORM OF GOVERNMENT
William D. Tate
MAYOR
CITY COUNCIL
Chris Coy Darlene Freed
Shane Wilbanks Mike Lease
Sharron Spencer Roy Stewart
Bruno Rumbelow
CITY MANAGER
Jennifer Hibbs
ASSISTANT CITY MANAGER
John F. McGrane
DIRECTOR OF ADMINISTRATIVE SERVICES
CITY OF GRAPEVINE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
SEPTEMBER 30,2013
Page
Number
INTRODUCTORY SECTION
Letterof Transmittal ..................................................................................................... i —iv
Certificate of Achievement for Excellence in Financial Reporting.............................. v
OrganizationChart........................................................................................................ vi
Administrative Officials................................................................................................ vii
FINANCIAL SECTION
Independent Auditors' Report....................................................................................... 1 — 3
Management's Discussion and Analysis ...................................................................... 4 - 11
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position....................................................................................... 12
Statement of Activities............................................................................................ 13 - 14
Fund Financial Statements
Balance Sheet—Governmental Funds.................................................................... 15 - 16
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position .......................................................................... 17
CITY OF GRAPEVINE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
SEPTEMBER 30,2013
Page
Number
Statement of Revenues, Expenditures and Changes in
Fund Balances— Governmental Funds................................................................ 18 - 19
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities......................................................................................... 20
Statement of Net Position—Proprietary Funds....................................................... 21 -22
Statement of Revenues, Expenses and Changes in
Net Position—Proprietary Funds ....................................................................... 23
Statement of Cash Flows—Proprietary Funds........................................................ 24 -25
Statement of Fiduciary Net Position—Fiduciary Funds......................................... 26
Statement of Changes in Net Position— Trust Fund............................................... 27
Notes to Financial Statements.................................................................................... 28 - 59
Required Supplementary Information
GeneralFund.............................................................................................................. 60
HotelOccupancy Tax ................................................................................................ 61
CrimeDistrict............................................................................................................. 62
4B - Transit................................................................................................................ 63
Schedule of Funding Progress for Participation—in Texas
Municipal Retirement System................................................................................. 64
Schedule of Funding Progress Post-Retirement Health Care Benefit Plan ............... 65
Notes to Required Supplementary Information......................................................... 66
CITY OF GRAPEVINE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
SEPTEMBER 30,2013
Page
Number
Combining and Individual Fund Statements and Schedules
Nonmaj or Governmental Funds
Combining Balance Sheet....................................................................................... 67 -70
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances................................................................................... 71 - 74
Budgetary Comparison Schedule—Debt Service Fund.......................................... 75
Agency Funds
Combining Statement of Changes in Assets and Liabilities................................... 76 -77
STATISTICAL SECTION (Unaudited)
Page
Table Number
Net Position by Component........................................................................... 1 78 -79
Changes in Net Position................................................................................. 2 80 - 83
Fund Balances—Governmental Funds.......................................................... 3 84- 85
Changes in Fund Balances— Governmental Funds ....................................... 4 86 - 89
Taxable Sales by Category............................................................................. 5 90
CITY OF GRAPEVINE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
SEPTEMBER 30,2013
Page
Table Number
STATISTICAL SECTION (Unaudited)
Direct and Overlapping Sales Tax Rates....................................................... 6 91
Assessed Value and Estimated Actual Value
ofTaxable Property..................................................................................... 7 92
Property Tax Rates—Direct and Overlapping Governments ........................ 8 93
Principal Property Taxpayers......................................................................... 9 94
Property Tax Levies and Collections............................................................. 10 95
Ratios of Outstanding Debt by Type ............................................................. 11 96
Ratios of General Bonded Debt Outstanding................................................. 12 97
Direct and Overlapping Governmental Activities Debt................................. 13 98
Legal Debt Margin Information..................................................................... 14 99
Pledged Revenue Coverage—Tax Increment Financing
District Reinvestment Zone Number One................................................... 15 100
Pledged Revenue Coverage—Tax Increment Financing
District Reinvestment Zone Number Two.................................................. 16 101
CITY OF GRAPEVINE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
SEPTEMBER 30,2013
Page
Table Number
STATISTICAL SECTION (Unaudited)
Demographic and Economic Statistics .......................................................... 17 102
Principal Employers....................................................................................... 18 103
Fulltime Equivalent City Government Employees
by Function/Program .................................................................................. 19 104
Operating Indicators by Function/Program ................................................... 20 105
Capital Asset Statistics by Function/Program................................................ 21 106
INTERNAL CONTROL AND COMPLIANCE SECTION
Independent Auditors' 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................................................................................ 107 - 108
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INTRODUCTORY SECTION
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.aA VINE
T A
March 18, 2014
To the Honorable Mayor,
Members of the City Council, and
Citizens of the City of Grapevine, Texas
The Department of Administrative Services 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 the 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.
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.
Pattillo, Brown & Hill, LLP have issued an unmodified ("clean") opinion on the City of Grapevine's financial
statements for the year ended September 30, 2013. The independent auditors' report is located at the front of the
financial section of this report.
The Management and Discussion 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.
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 provides a full range of services, including police and fire protection, emergency ambulance service,
sanitation, planning and zoning, public improvements, water and sewer services, culture and recreation and
general administrative services.
Administrative Services • 200 South Main Street• Grapevine,Texas • 76051 • 817-410-3113 • Fax 817-410-3005
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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
"TIFS"), The Crime Control and Protection District (CCPD) "Crime 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 "T"). The 4B
Economic Development Fund accounts for the local sales tax used to stimulate the local economy, development,
redevelopment and design and construction of the Main Street Rail Station.
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 1 in the notes to the financial statements.
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 (e.g. police, fire). Department heads may transfer resources within
their department as they see fit,but transfers between funds require approval from the governing Council.
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, including all terminal buildings, is
located within Grapevine city limits. The City is approximately 35 square miles and based on the 2010 Census
serves a population of 47,000.
Local Economy
The City has overcome several challenges during the past three fiscal years as overall sales tax receipts were
$49,046,598 which equated to a modest 4.5% increase in FY13, while collections for FY12 increased by 3.0%
thus reflecting a steady growth. Hotel occupancy tax receipts increased $445,791 in FY13, which equated to a
3.6%gain from the previous year. These results indicate that we are continuing to recover from the recession.
The DFW Connector project was officially dedicated in the fall of 2013 but still presented some traffic congestion
in FY13. Work began in 2013 on the SH 121 "Section 13" project and the FM 2499 project in Northeast
Grapevine with a combined cost of$184 million. The Section 13 project doubles the current capacity of SH 121
in NE Grapevine and provides an improved connection between the DFW Connector project and the Sam
Rayburn Toll Road. The FM 2499 project constructs new depressed main lanes from SH 121 to Denton Creek.
These main lanes will no longer pass through the "at grade" signalized intersections with Stars and Stripes Way
and Grapevine Mills Boulevard North. New service roads will be constructed to provide access to abutting
properties and to connect with the two signalized intersections.
Long-term Financial Planning
The City Council establishes their long term financial goals each year as a part of the budget process. The long-
range financial forecasting is not intended to be a budget, or a proposed plan. Instead, it sets the stage for the
budget process, assisting both the Council and staff in establishing priorities and allocating resources
appropriately. For fiscal year 2013,the Council continued with the following goals:
(1) Maintain financial stability and strong fiscal management
(2) Sustain existing programs at high service levels
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(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
The established goals of the Council for the long-term are a continuation of the goals set in fiscal year 2007. The
three goals established by the Council were: 1) long-range financial health of the General Fund, 2) improve the
employee compensation plan, and 3) stabilize the City's economic base. The long-range financial forecast is
based on assumptions regarding the regional and state economy over the next several years.
For FY 2013, the City maintained financial stability and strong fiscal management. The General, Debt Service,
Utility Enterprise, and Stormwater Drainage funds ended FY 2013 with fund balances that meet or exceed their
requirement. The City maintained existing services and transferred from the General Fund $3,000,000 to the
Quality of Life CIP Fund; $1,300,000 to the Special Revenue — Crime District and $2,169,886 to Capital Projects
General Facility for the purchase of the Public Safety land. In meeting the goal to provide a safe, secure
community, the Police responded to 67,634 calls for service, Fire responded to 5,135 calls for service and 3,026
ambulance runs.
Major Initiatives and Developments
Grapevine continues to be active in economic development with advantages that include high median incomes,
superior access to major highways, its proximity to DFW Airport, a large existing tourist industry and a stable
political climate. In 2013,the City experienced several major projects that were completed with total construction
values of $161 million in 2012 and $90 million for the first nine months of 2013. The largest category of
construction was commercial which accounted for 61% of the construction value. Some of these developments
included the construction of the Marriott Courtyard/Town Place Suites Hotel with 301 guest rooms including a
full service restaurant and 17,000 square feet of meeting space which opened in 2013. Other commercial
construction projects included the completion of Baylor Medical Center's $100.5 million expansion, a new
assisted living center on Merlot Avenue,Westwood Development of 3 new medical buildings under construction,
Golf Galaxy completion of their remodel building, and the In-N-Out Burger restaurant finished construction and
opened in the Towers of Grapevine Development.
Two historic replica redevelopment projects were either started or completed in 2013 on historic Main Street.
The 15,000 square foot development located at 520 Main Street was completed this year and includes Jakes
Restaurant, 7-Eleven convenience store and several other retail and service use spaces. The Gallery, a new
historic replica building broke ground and is under construction at the southeast corner of Main Street and East
Northwest Highway offering 47,400 square feet of retail and office space and is planned to open in fall 2014.
There were two new multi-family developments that were under construction. The Enclave Apartments are a 243
unit complex west of Grapevine Mills Mall and the Loft located on the west side of Texan Trail recently
completed their construction and started accepting tenants in their 274 unit complex. There are approximately
250 single family residential lots that have been approved for construction.
Grapevine Mills Mall continued to be a strong economic engine for Grapevine, averaging 20 million visitors a
year. Sales at the mall were up 6% over last year, and are expected to improve once road construction on 121 is
complete. In 2012, Grapevine Mills management announced a $40 million renovation project including the
upgrade of the tenant mix with the development of fashion and family neighborhoods. Recent new tenants
included Michael Kors, Crocs, Under Armour, Coach, H&M and Kenneth Cole. Grapevine Mills staff are
actively recruiting additional fashion tenants to cement their reputation as a fashion destination. Two major
tenants also reinvested in the mall in 2013,Nike and Saks Off 5th both completed major interior renovations.
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Grapevine Mills also strengthened their goal as an entertainment destination with the expansion of Legoland's
City Forest Ranger Pursuit, a $1.2 million investment that added 6,000 square feet of space to their Discovery
Center.
Recognized nationally as a tourist and recreation destination, the Grapevine Shuttle provides local transportation
of visitors from DFW Airport and Grapevine hotels to the historic downtown area, restaurants, and retail
establishments. Construction began this year on the Ice House which is a new museum that will house the
collections of the Grapevine Historical Society. Funding was provided by the historical society and the Grapevine
CVB to remodel an existing structure to resemble the original Grapevine Ice House.
Staff continues to work on the two new general obligation bond projects that were approved by citizens in
November 2012. Recently, land was acquired on Dallas Road for the Public Safety Building and staff is working
on the design phase of the new facility that will house Police, Court, IT and Fire Administration and will replace
their existing facility. Staff has also been working with the architect firm for the design phase that involves
expanding, equipping, and renovating the existing Community Activities Center which includes a senior
component.
Awards and Acknowledgements
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 auditor's report on the basic financial statements is included in the financial section
of this report.
The Government Finance Officers Association of the United States and Canada ("GFOA") awarded a Certificate
of Achievement for Excellence in Financial Reporting to the City for its comprehensive annual financial report
("CAFR') for the fiscal year ended September 30, 2012. This was the 26th 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 finance division staff. We would also like to express our appreciation to all members of the City who
assisted and contributed to the preparation of this report.
We would 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,
Karen L.Walker
Controller
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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, 2012
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Executive Director/CEO
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City of Grapevine
Organization Chart
Animal Shelter Advisory Board
Board of Zoning Adjustments
Building Board of Appeals
Convention&Visitors Bureau Advisory Board
Golf Course Advisory Board
Grapevine Heritage Foundation
Historic Preservation Commission
Housing Authority Board of Commissioners
Library Board
Parks and Recreation Board
Planning and Zoning Commission
Senior Citizens Advisory Board
Teen Court Advisory Board
Grapevine 4B Economic Development Board
1 61M
Administration Administration Administration Sales,Promotions&Administration
Accounting Senior Activities Center Engineering Heritage Programs&Preservation
Purchasing Park Maintenance Streets Facilities
Human Resources Recreation Traffic Operations Festivals&New Vintage
Municipal Court Aquatics Environmental Services Grapevine Vintage Railroad
Risk Management Athletics Programs Facility Services Tourism Incentives
Utility Billing Recreation Programs Fleet Services Sister Cities
Grapevine Golf Course Community Activities Center Water Distribution&Treatment Wine Pouring Society
Grapevine Housing Authority Lake Parks Wastewater Collection&Treatment Visitor Shuttle System
Debt Service Keep Grapevine Beautiful Stormwater Drainage Grapevine Township Revitalization
4B Transit&Economic Devi.
Administration Administration Administration Administration
Animal Control Prevention Building Inspections
Uniform Operations Operations Planning
Criminal Investigations Training
Technical Services Emergency Management
Commercial Vehicle Enforcement
Administration Administration
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CITY OF GRAPEVINE, TEXAS
ADMINISTRATIVE OFFICALS
Bruno Rumbelow
City Manager
Jennifer Hibbs Jodi Brown
Assistant City Manager City Secretary
John F. Boyle, Jr. David Florence
City Attorney Municipal Court Judge
John F. McGrane Stan Laster
Director of Administrative Services Director of Public Works
Scott Williams Steve Bass
Director of Development Services Fire Chief
Edward Salame Janis Roberson
Chief of Police Library Director
Douglas M. Evans Russell E. Pulley
Director of Parks and Recreation Director of Golf
P.W. McCallum Carolyn Van Duzee
Executive Director, Convention & Visitors Bureau Human Resources Director
Karen L. Walker Robert Smeby
Controller Purchasing Agent
Gary W. Livingston
BudgetManager
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FINANCIAL SECTION
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PATTILLO, BROWN & HILL, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
INDEPENDENT AUDITORS' REPORT
To the Honorable Mayor and
Members of the City of Council
City of Grapevine, Texas
Report on the Financial Statements
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 City of Grapevine, Texas (the "City"), as of and for the year ended
September 30, 2013, 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.
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401 WEST HIGHWAY 6■P.O.BOX 20725■WACO,TX 76702-0725■(254)772-49010 FAX:(254)772-4920■www.pbhcpa.com
AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■HILLSBORO,TX(254)582-2583
TEMPLE,TX(254)791-3460■ALBUQUERQUE,NM(505)266-5904
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.
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, 2013, 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, the Schedule of Revenues, Expenditures and Changes in Fund
Balance—Budget and Actual—General Fund, the Schedule of Revenues, Expenditures and Changes in
Fund Balance—Budget and Actual—Hotel Occupancy Tax Fund, the Schedule of Revenues,
Expenditures and Changes in Fund Balance—Budget and Actual— Crime District Fund, the Schedule
of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual— 413-Transit Fund, the
Schedule of Funding Progress for Participation in the Texas Municipal Retirement System, and the
Schedule of Funding Progress –Post-Retirement Health Care Plan 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.
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Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Grapevine, Texas' 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
18, 2014, on our consideration of the City of Grapevine, Texas' 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
City of Grapevine, Texas' internal control over financial reporting and compliance.
Po"4 .,o L. L..
Waco, Texas
March 18, 2014
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MANAGEMENT'S
DISCUSSION AND ANALYSIS
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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, 2013.
FINANCIAL HIGHLIGHTS
• The assets of the City exceeded its liabilities at the close of the most recent fiscal year by
$278,711,152 (net position). Of this amount, $19,381,756 of(unrestricted net position)
may be used to meet the City's ongoing obligations to citizens and creditors.
• At the end of the current fiscal year, unassigned fund balance for the General Fund was
$11,302,613 or 28% of total General Fund expenditures.
• The City transferred$3,000,000 to the Quality of Life CIP Fund.
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 other supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the
City'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 and liabilities, with the
difference between the two 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, and economic development. The business-type
activities of the City include water and sewer and the golf course.
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The government-wide financial statements include not only the City itself (known as the primary
government), but also include the Heritage Foundation, the Tax Reinvestment Zones Numbers One and
Two, the Crime Control and Protection District (Crime District), and the Grapevine 4B Economic
Development Corporation, which are legally separate entities. A blended presentation has been used to
report the financial information for all of the component units except for the Heritage Foundation. The
Crime District was established to account for the accumulation and use of sales tax proceeds designated
for crime reduction programs. The Grapevine 4B Economic Development Corporation consists of two
funds. The 4B Transit Fund accounts for local sales tax used to fund Grapevine's participation in the
commuter rail development project with the Fort Worth Transit Authority (The "T"). The 4B Economic
Development Fund accounts for the local sales tax used to stimulate the local economy, development,
and redevelopment. The Heritage Foundation is a discretely presented component unit and is presented
as a separate column in the government-wide financial statements.
Fund financial statementsA 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 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.
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 20 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, Special Revenue Fund—Hotel Occupancy Tax, Special Revenue
Fund—Crime District, Special Revenue Fund413 - Transit Fund, Debt Service Fund, Debt Service
Fund—Tax Reinvestment Zone Number One (TIF #1), Capital Projects – Parks Open Space and
Recreation, Capital Projects – General Facilities and Equipment, all of which are considered to be major
funds. Data from the other 12 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 elsewhere in this report.
Proprietary funds—There are two types of Proprietary funds, Enterprise Funds and Internal Service
Funds. The City maintains one type of proprietary fund, enterprise 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, Sewer, and Lake Enterprise. The
City has no Internal Service Funds.
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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 (golf course), which are both major funds.
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 are one of the
City's fiduciary fund types. The agency funds account for funds held in an agency capacity for the
Industrial Development Corporation, the Police Department entitled "Police Department Case
Settlement" and the W.D. Tate Scolarship. The second type of fiduciary fund is the Grapevine Health
Reimbursement Account (HRA), a trust fund. See Note 1 for additional information pertaining to
fiduciary funds.
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.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Analysis of the City's Financial Position
As noted earlier, net position may serve over time as a useful indicator of a government's financial
position. As of September 30, 2013, the City's assets exceeded liabilities by $278,711,152.
The largest portion of the City's net position ($172,920,694) 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 are for (1) use of impact fees for
construction purposes $8,031,864 and (2) debt service $30,369,921 (3) public safety $1,088,003 (4)
economic development $41,197,788 (5) transportation $412,394, (6) culture and recreation $40,537, and
(7) tourism $5,268,195. Unrestricted net position of$19,381,756 are 7% of all net position and may be
used to meet the City's ongoing obligations to citizens and creditors.
For fiscal year-end 2013, the City is able to report positive balances in all three categories of net
position, both for the government as a whole, as well as for its separate governmental and business-type
activities. The same situation held true for the prior fiscal year.
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Condensed Schedule of Net Position
Governmental Activities Business-type Activities Totals
2013 2012 2013 2012 2013 2012
Current and other assets $ 210,642,273 $ 131,713,324 $ 23,434,972 $ 27,392,403 $ 234,077,245 $ 159,105,727
Capital assets 173,615,291 169,132,206 83,302,218 81,456,580 256,917,509 250,588,786
Total assets 384,257,564 300,845,530 106,737,190 108,848,983 490,994,754 409,694,513
Long-term liabilities 178,644,062 113,151,357 13,225,358 15,366,748 191,869,420 128,518,105
Other liabilities 16,595,350 12,973,521 3,818,832 3,812,151 20,414,182 16,785,672
Total liabilities 195,239,412 126,124,878 17,044,190 19,178,899 212,283,602 145,303,777
Net position:
Net investment,
in capital assets 98,171,072 88,342,250 74,749,622 70,171,197 172,920,694 158,513,447
Restricted 78,376,838 71,908,953 8,031,864 8,968,749 86,408,702 80,877,702
Unrestricted 12,470,242 14,469,449 6,911,514 10,530,138 19,381,756 24,999,587
Total net position $ 189,018,152 $ 174,720,652 $ 89,693,000 $ 89,670,084 $ 278,711,152 $ 264,390,736
Analysis of the City's operations
Governmental activities — Governmental activities increased the City's net position by $14,297,500.
Significant reasons for this increase are as follows:
Overall total revenues for fiscal year 2013 were slightly lower than the previous fiscal year. We did,
however, experience an increase in both sales and occupancy taxes, but a slight decline in charges for
services and grant reimbursements and awards. Overall, the City's operating expenses increased by
$3,502,589 and those increased expenses were primarily incurred by cultural and recreation, public
works and transportation. We also experienced a significant change in both our total assets and long-
term liabilities for the City which was primarily due to the issuance of the 2012 General Obligation
(GO) Bonds that were approved by citizens last year for the CAC expansion and the new Public Safety
Facility. During this year, City staff also worked on or completed several major capital projects that
included the Dove Pool & Bathhouse, Casey's Clubhouse and Playground, Emergency Vehicle
Preemption, Denton Creek Channel, and the purchases of capital equipment.
Business-type activities — Business-type activities increased the City's net position by $22,916. The
increase is primarily due to the continued improvements made to the Water and Sewer system and
reduction in long-term liabilities.
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The following table provides a summary of the City's operations for the year ended September 30, 2013,
and 2012.
CITY OF GRAPEVINE'S CHANGES IN NET POSITION
Governmental Activities Business-type Activities Totals
2013 2012 2013 2012 2013 2012
Revenues:
Program revenues:
Charges for services $ 17,481,667 $ 17,799,878 $ 23,304,719 $ 23,560,412 $ 40,786,386 $ 41,360,290
Operating grants
and contributions 525,816 1,124,029 - - 525,816 1,124,029
Capital grants
and contributions 108,225 810,155 108,225 810,155
General revenues:
Property taxes 29,978,735 32,048,214 29,978,735 32,048,214
Hotel occupancy taxes 12,772,218 12,326,427 12,772,218 12,326,427
Sales taxes 49,046,598 46,932,217 49,046,598 46,932,217
Mixed beverage taxes 1,158,625 1,051,264 1,158,625 1,051,264
Franchise taxes 6,618,333 6,355,695 - - 6,618,333 6,355,695
Investment earnings 159,146 286,292 151,639 67,957 310,785 354,249
Miscellaneous 6,000 170,318 - - 6,000 170,318
Total revenues 117,855,363 118,904,489 23,456,358 23,628,369 141,311,721 142,532,858
Expenses:
General government 18,601,720 18,370,262 - - 18,601,720 18,370,262
Public safety 28,309,203 28,263,804 28,309,203 28,263,804
Culture and recreation 29,578,167 27,953,844 29,578,167 27,953,844
Public works 12,216,082 11,056,248 12,216,082 11,056,248
Transportation 8,619,843 7,788,997 8,619,843 7,788,997
Intergovernmental - 4,040,040 - 4,040,040
Economic development 3,608,828 - 3,608,828 -
Interest on long-term debt 4,094,640 4,589,793 - - 4,094,640 4,589,793
Water and sewer - - 18,806,917 18,372,558 18,806,917 18,372,558
Lake enterprise - - 3,155,905 3,053,170 3,155,905 3,053,170
Total expenses 105,028,483 102,062,988 21,962,822 21,425,728 126,991,305 123,488,716
Increases in net position
before transfers 12,826,880 16,841,501 1,493,536 2,202,641 14,320,416 19,044,142
Transfers 1,470,620 1,676,661 ( 1,470,620) ( 1,676,661) -
Change in net position 14,297,500 18,518,162 22,916 525,980 14,320,416 19,044,142
Net position,beginning 174,720,652 156,202,490 89,670,084 89,144,104 264,390,736 245,346,594
Net position,ending $ 189,018,152 $ 174,720,652 $ 89,693,000 $ 89,670,084 $ 278,711,152 $ 264,390,736
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
Governmental funds — As of the end of the current fiscal year, the City of Grapevine's governmental
funds reported combined ending fund balances of $190,380,611, an increase of $75,130,874 compared
with the prior year. Unassigned fund balance is $10,461,509 (5%), which is available for spending at
the City's discretion. The remainder of fund balance is not available for new spending because it has
already been (1) classified as nonspendable $680,875 (2) restricted for debt service, capital projects,
public safety, economic development, transportation, tourism, and culture and recreation programs
$167,797,923 (3) committed for stormwater drainage and public arts $2,720,827 (4) or assigned for
capital projects and culture and recreation programs $8,719,477.
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Significant changes in fund balances of major funds are as follows:
General Fund— The fund balance decreased $433,278 for FY 2013. The General Fund transferred funds
to several other City funds this fiscal year, including $3,000,000 to the Quality of Life Fund (nonmajor
fund) for CIP projects designated by the City Council. The changes in the fund balance were also
impacted by the revenue and operating costs this fiscal year as the City experienced an increase in both
sales and franchise taxes which attributed to the total General Fund revenues increasing by $1,018,855.
Overall operating expenditures increased from the previous year by $1,412,387 as the city continues to
provide quality programs, public safety and other services for the City.
Special Revenue — Hotel Occupancy Tax Fund — Overall revenues increased $79,028 which reflects a
slight and continued increase in occupancy rates at the hotels over the prior year. Due to the increases in
tax revenue, the increase in transfer outs of $1,538,660 and operational costs of $282,814 the fund
balance decreased by $697,951 from the previous year.
Special Revenue — Crime District Fund — The Crime District Fund experienced an increase in sales tax
revenues of $671,571; however, operating expenditures also increased by $731,737 with the final fund
balance decreasing by $1,242 from the previous fiscal year. The General Fund transferred a net
$1,500,000 to the Crime District Fund in FY 2013 and the ending fund balance for FY 2013 was
$414,164.
Special Revenue — 4B — Transit Fund — The 4B fund balance increased by $43,563 over last fiscal year.
This increase is primarily attributed to the overall increase the City experienced this fiscal year in sales
tax collections.
Debt Service Fund — This fund has a total fund balance of $16,119,415 which is restricted for the
payment of debt service. The $3,867,019 increase in fund balance was due to property tax revenue
collections and debt issuance.
Debt Service Fund— TIF #1 — The Debt Service had a total fund balance of$32,624,565. The $130,880
increase in fund balance was primarily impacted by the school district's state reimbursement for the
TIRZ M&O contribution of$1,033,327 which was not received from the school district until December
2013. This payment is being presented as deferred revenue for the current reporting year. There were
also economic development distributions for FY 2013.
Capital Projects — Parks Open Space and Recreation — The Parks Open Space and Recreation capital
projects fund had an ending fund balance of $28,528,868. This is an increase of $28,530,315 over the
prior year. The increase in fund balance is due to the issuance of long-term debt to finance capital
proj ects.
Capital Projects — General Facilities and Equipment — The General Facilities and Equipment capital
projects fund had an ending fund balance of $41,393,980. This is an increase of $40,944,355 over the
prior year. The increase in fund balance is due to the issuance of long-term debt to finance capital
projects.
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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 of Grapevine's business-type activities.
General Fund Budgetary Highlights
Significant amendment changes:
The general fund transfers out increased to $10,892,077 including transfers to the Capital Equipment
Fund, the General Facilities Fund, the Quality of Life Fund and the Special Revenue Fund – Crime
District (CCPD). Overall, the General Fund operating expenditures increased from the previous year
primarily due to the adopted salary increases. The Cultural and Recreation expenditure budget increased
this year to account for additional expenditures incurred in Park Maintenance and Aquatics for the new
Dove Pool improvements and some departments experienced increases in operating supplies,
professional services, and utilities from the previous year.
Significant budget variances:
For the year ended September 30, 2013, revenues did exceed the final budget in the General Fund due to
tax receipts being greater than anticipated and overall expenditures were less than budgeted.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Major capital asset events during the current fiscal year included the following amounts:
The City incurred $1,501,950 in capital expenses related to the design phase of the Community
Activities Center(CAC) expansion project in the Recreation Capital Fund.
The City completed several Quality of Life projects this year including the Dove Pool & Bathhouse;
Casey's Clubhouse and Playground and the Emergency Vehicle Preemption Project as well as several
other smaller projects. The $1,305,011 decrease in fund balance is due to these current year
expenditures.
The City completed two new parking lots at Bear Creek and Dove Parks expending $258,575 as well as
improvement projects to Port America Place and Denton Creek Channel repairs expending $834,644 in
FY 2013.
Capital assets—The City's investment in capital assets for its governmental and business-type activities
as of September 30, 2013, amounted to $256,917,509 (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 $6,328,723.
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CITY OF GRAPEVINE'S CAPITAL ASSETS AT YEAR-END
Governmental Activities Business-type Activities Totals
2013 2012 2013 2012 2013 2012
Land and improvements $ 47,821,876 $ 47,821,876 $ 1,643,545 $ 1,643,545 $ 49,465,421 $ 49,465,421
Construction in progress 6,027,159 3,725,009 219,754 2,122,792 6,246,913 5,847,801
Buildings 32,639,182 33,115,271 797,805 839,774 33,436,987 33,955,045
Improvements other
than buildings 21,141,304 18,786,261 1,879,385 2,243,878 23,020,689 21,030,139
Machinery and equipment 13,893,188 9,328,850 1,239,773 509,853 15,132,961 9,838,703
Water storage rights - - 129,594 146,683 129,594 146,683
Infrastructure 52,092,582 56,354,939 77,392,362 73,950,055 129,484,944 130,304,994
Total $ 173,615,291 $ 169,132,206 $ 83,302,218 $ 81,456,580 $ 256,917,509 $ 250,588,786
Additional information on the City's capital assets can be found in Note 5 in the notes to the financial
statements.
Long-term debt—At the end of the current fiscal year, the City had total bonded debt outstanding of
$169,138,677. Of this amount, $169,138,677 comprises debt backed by the full faith and credit of the
City.
CITY OF GRAPEVINE'S OUTSTANDING BONDS AND NOTES PAYABLE AT YEAR-END
Governmental Activities Business-type Activities Totals
2013 2012 2013 2012 2013 2012
General obligation bonds $ 102,692,840 $ 40,355,000 $ 10,845,000 $ 12,510,000 $ 113,537,840 $ 52,865,000
Certificates of obligation 45,658,918 50,794,060 - - 45,658,918 50,794,060
Revenue bonds - - 790,000 - 790,000
Notes payable 6,296,518 3,604,730 - - 6,296,518 3,604,730
Premium on bonds issued 6,399,166 3,787,206 566,348 666,750 6,965,514 4,453,956
Discount on bonds issued - ( 24,159) - - - ( 24,159)
Deferred loss on refunding ( 2,870,991) ( 2,896,959) ( 449,122) ( 503,854) ( 3,320,113) ( 3,400,813)
$ 158,176,451 $ 95,619,878 $ 10,962,226 $ 13,462,896 $ 169,138,677 $ 109,082,774
Additional information on the City's long-term debt can be found in Note 8 of the notes to the financial
statements.
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.
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BASIC
FINANCIAL STATEMENTS
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CITY OF GRAPEVINE, TEXAS
STATEMENT OF NET POSITION
SEPTEMBER 30,2013
Component
Primary Government Unit
Governmental Business-type Heritage
Activities Activities Total Foundation
ASSETS
Cash and investments $ 189,106,100 $ 10,066,843 $ 199,172,943 $ 501,191
Receivables,net
Taxes 12,693,436 - 12,693,436 -
Accounts 1,996,643 2,767,812 4,764,455 -
Pledges - - - 50,404
Internal balances 935,936 ( 935,936) - -
Due from other governments 419,470 92,047 511,517
Inventory 447,545 47,956 495,501
Accrued interest 16,006 2,763 18,769 67
Prepaid expenses 233,330 - 233,330
Deposits 3,673,886 - 3,673,886
Restricted assets:
Cash and investments - 11,257,403 11,257,403 -
Capital assets(net of accumulated depreciation)
Non-depreciable 53,849,035 1,863,299 55,712,334 450,067
Depreciable 119,766,256 81,438,919 201,205,175 1,101,039
Deferred charges(net of accumulated amortization) 1,119,921 136,084 1,256,005
Total assets 384,257,564 106,737,190 490,994,754 2,102,768
LIABILITIES
Accounts payable 9,193,974 2,243,956 11,437,930 3,052
Contracts and retainage payable 223,237 147,892 371,129 -
Accrued and other liabilities 1,746,414 167,512 1,913,926
Developer deposits 1,691,705 - 1,691,705
Interest payable 1,619,517 55,511 1,675,028
Unearned revenue 2,120,503 318,062 2,438,565
Customer deposits - 885,899 885,899
Noncurrent liabilities:
Due within one year:
Compensated absences 736,843 56,262 793,105
Notes payable 1,824,236 - 1,824,236
Bonds payable 10,661,736 1,750,000 12,411,736
Sales tax obligation 173,556 - 173,556
Due in more than one year:
Compensated absences 2,210,527 168,783 2,379,310
Notes payable 4,472,282 - 4,472,282
Bonds payable 141,218,197 9,212,226 150,430,423
Sales tax obligation 772,247 - 772,247
Net OPEB obligation 11,546,496 1,491,080 13,037,576
Net pension obligation 5,027,942 547,007 5,574,949 -
Total liabilities 195,239,412 17,044,190 212,283,602 3,052
NET POSITION
Net investment in capital assets 98,171,072 74,749,622 172,920,694 1,551,106
Restricted for:
Use of impact fees - 8,031,864 8,031,864 -
Debt service 30,369,921 - 30,369,921
Public safety 1,088,003 1,088,003
Economic development 41,197,788 41,197,788
Transportation 412,394 412,394
Culture and recreation 40,537 40,537
Tourism 5,268,195 - 5,268,195 -
Unrestricted 12,470,242 6,911,514 19,381,756 548,610
Total net position $ 189,018,152 $ 89,693,000 $ 278,711,152 $ 2,099,716
The accompanying notes are an integral part of these financial statements.
12
CITY OF GRAPEVINE, TEXAS
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30,2013
Program Revenue
Operating Capital Grants
Charges for Grants and and
Functions/Programs Expenses Services Contributions Contributions
Primary government:
Governmental activities:
General government $ 18,601,720 $ 2,013,411 $ 107,408 $
Public safety 28,309,203 3,970,693 108,996
Culture and recreation 29,578,167 10,011,861 56,514 -
Public works 12,216,082 1,485,702 252,898 108,225
Transportation 8,619,843 - - -
Economic development 3,608,828
Interest on long-term debt 4,094,640 -
Total governmental activities 105,028,483 17,481,667 525,816 108,225
Business-type activities:
Water and sewer 18,806,917 20,184,879 - -
Lake Enterprise 3,155,905 3,119,840
Total business-type activities 21,962,822 23,304,719 - -
Total primary government $ 126,991,305 $ 40,786,386 $ 525,816 $ 108,225
Component unit:
Heritage Foundation $ 142,088 $ 9,957 $ 31,340 $ 32,117
General revenues:
Taxes:
Property
Franchise
Hotel occupancy
Sales
Mixed beverage
Investment income
Miscellaneous
Transfers
Total general revenues and transfers
Change in net position
Net position-beginning
Net position-ending
The accompanying notes are an integral part of these financial statements.
13
Net(Expense)Revenue and Changes in Net Position Component
Primary Government Unit
Governmental Business-type Heritage
Activities Activities Total Foundation
$( 16,480,901) $ $( 16,480,901) $
( 24,229,514) ( 24,229,514)
( 19,509,792) ( 19,509,792)
( 10,369,257) ( 10,369,257)
( 8,619,843) ( 8,619,843)
( 3,608,828) ( 3,608,828)
( 4,094,640) ( 4,094,640)
( 86,912,775) - ( 86,912,775)
1,377,962 1,377,962
( 36,065) ( 36,065)
1,341,897 1,341,897
( 86,912,775) 1,341,897 ( 85,570,878)
( 68,674)
29,978,735 - 29,978,735 -
6,618,333 6,618,333
12,772,218 12,772,218
49,046,598 49,046,598
1,158,625 - 1,158,625 -
159,146 151,639 310,785 955
6,000 - 6,000 13,838
1,470,620 ( 1,470,620) - -
101,210,275 ( 1,318,981) 99,891,294 14,793
14,297,500 22,916 14,320,416 ( 53,881)
174,720,652 89,670,084 264,390,736 2,153,597
$ 189,018,152 $ 89,693,000 $ 278,711,152 $ 2,099,716
14
CITY OF GRAPEVINE, TEXAS
BALANCESHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30,2013
Special Revenue
Hotel Crime 413-Transit
General Occupancy Tax District Fund
ASSETS
Cash and investments $ 8,850,689 $ 6,451,646 $ 5,894 $ 1,323,289
Receivables(net of allowances for uncollectibles)
Accounts 1,711,659 64,760 2,928 -
Taxes 4,605,084 972,070 1,962,876 1,438,677
Accrued interest 1,711 1,221 - 181
Inventory 429,412 442 -
Due from other funds 2,648,233 326,270
Due from other governments - - -
Prepaid items 229,655 2,563 1,112
Deposits - - -
Total assets $ 18,476,443 $ 7,818,972 $ 1,972,810 $ 2,762,147
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 2,278,399 $ 2,342,023 $ 332,262 $ 2,349,753
Accrued liabilities 1,401,806 105,970 221,294 -
Interest payable - - -
Due to other funds - - 1,005,090
Deferred revenue 2,834,558 99,779 -
Developer deposits - - - -
Total liabilities 6,514,763 2,547,772 1,558,646 2,349,753
Fund balances:
Nonspendable:
Inventory 429,412 442 - -
Prepaid items 229,655 2,563 1,112
Restricted for:
Debt service - - -
Capital projects -
Public safety 413,052
Economic development - -
Transportation 412,394
Culture and recreation - -
Tourism 5,268,195
Committed for:
Stormwater drainage operations -
Public arts
Assigned for:
Capital projects
Culture and recreation -
Unassigned 11,302,613
Total fund balances 11,961,680 5,271,200 414,164 412,394
Total liabilities and fund balances $ 18,476,443 $ 7,818,972 $ 1,972,810 $ 2,762,147
The accompanying notes are an integral part of these financial statements.
15
Debt Service Capital Projects
Parks Open General Nonmajor Total
Space and Facilities and Governmental Governmental
Debt Service TIF#1 Recreation Equipment Funds Funds
$ 16,454,196 $ 32,663,208 $ 28,738,449 $ 38,173,861 $ 56,444,868 $ 189,106,100
21,932 - - - 195,364 1,996,643
321,657 1,632,603 1,760,469 12,693,436
2,221 4,419 17 82 6,154 16,006
- - 17,691 447,545
- 2,974,503
419,470 419,470
- - 233,330
- - - 3,673,886 - 3,673,886
$ 16,800,006 $ 34,300,230 $ 28,738,466 $ 41,847,829 $ 58,844,016 $ 211,560,919
$ $ 582,086 $ 86,554 $ 127,579 $ 1,095,318 $ 9,193,974
- - - - 17,344 1,746,414
371,994 - - 371,994
- - - 326,270 707,207 2,038,567
308,597 1,093,579 123,044 - 1,678,097 6,137,654
- - - - 1,691,705 1,691,705
680,591 1,675,665 209,598 453,849 5,189,671 21,180,308
- - - - 17,691 447,545
- - - 233,330
16,119,415 7,169,163 - - 5,761,978 29,050,556
- - 28,528,868 41,393,980 20,817,602 90,740,450
- - - 674,951 1,088,003
25,455,402 15,742,386 41,197,788
- - 412,394
40,537 40,537
- 5,268,195
2,024,087 2,024,087
696,740 696,740
8,042,705 8,042,705
676,772 676,772
- - - ( 841,104) 10,461,509
16,119,415 32,624,565 28,528,868 41,393,980 53,654,345 190,380,611
$ 16,800,006 $ 34,300,230 $ 28,738,466 $ 41,847,829 $ 58,844,016 $ 211,560,919
16
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CITY OF GRAPEVINE, TEXAS
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
SEPTEMBER 30,2013
Total fund balances-governmental funds balance sheet $ 190,380,611
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. 173,392,054
Certain receivables will not be collected soon enough to pay for the current
period's expenditures and are,therefore,deferred in the funds. 4,017,151
Accrued bond interest is not due and payable in the current period and
therefore is not reported in the funds. ( 1,247,523)
Long-term liabilities, including bonds payable, are not due and payable in the
current period and therefore are not reported in the funds. Long-term liabilities
consist of:
Bonds payable ( 151,879,933)
Notes payable ( 6,296,518)
Compensated absences ( 2,947,370)
Sales tax obligation ( 945,803)
Net OPEB obligation ( 11,546,496)
Net pension obligation ( 5,027,942)
Deferred charges recognized on Statement of Net Position, not recognized in
governmental balance sheet: Deferred bond issue costs 1,119,921
Net position of governmental activities $ 189,018,152
The accompanying notes are an integral part of these financial statements.
17
CITY OF GRAPEVINE, TEXAS
STATEMENT OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2013
Special Revenue
Hotel Crime 413-Transit
General Occupancy Tax District Fund
REVENUES
Property tax $ 8,494,995 $ $ $
Hotel occupancy tax - 12,772,218 - -
Sales tax 24,797,696 - 11,958,485 8,715,679
Mixed beverage tax 1,158,625 - -
Franchise tax 6,618,333
Licenses and permits 1,247,508
Intergovernmental 95,394 - 14
Charges for services 3,622,168 6,004,378
Fines and forfeitures 2,210,213 - - -
Investment income 14,106 10,820 2,464 2,086
Contributions - - - -
Miscellaneous 395,593 131,708 1,966 -
Total revenues 48,654,631 18,919,124 11,962,929 8,717,765
EXPENDITURES
Current:
General government 13,506,546 - - -
Public safety 12,530,520 - 12,978,121
Culture and recreation 9,034,959 15,347,906 -
Public works 5,367,768 - -
Transportation - 8,619,843
Economic development - - - -
Capital outlay 364,675 8,976 284,550
Debt service:
Principal 201,656 - -
Interest and fiscal charges -
Other - - - -
Total expenditures 41,006,124 15,356,882 13,262,671 8,619,843
EXCESS(DEFICIENCY)OF REVENUES
OVER(UNDER)EXPENDITURES 7,648,507 3,562,242 ( 1,299,742) 97,922
OTHER FINANCING SOURCES(USES)
Transfers in 2,801,083 313,860 1,300,000 244,460
Transfers out ( 10,892,077) ( 4,574,053) ( 1,500) ( 298,819)
Sale of capital assets 9,209 - -
Issuance of debt -
Premium on issuance of bonds
Payment to bond refunding escrow agent - - - -
Total other financing sources and uses ( 8,081,785) ( 4,260,193) 1,298,500 ( 54,359)
NET CHANGE IN FUND BALANCES ( 433,278) ( 697,951) ( 1,242) 43,563
FUND BALANCES,BEGINNING 12,394,958 5,969,151 415,406 368,831
FUND BALANCES,ENDING $ 11,961,680 $ 5,271,200 $ 414,164 $ 412,394
The accompanying notes are an integral part of these financial statements.
18
Debt Service Capital Projects
Parks Open General Nonmajor Total
Space and Facilities and Governmental Governmental
Debt Service TIF#1 Recreation Equipment Funds Funds
$ 11,386,845 $ 4,807,748 $ $ $ 3,636,534 $ 28,326,122
- - - 12,772,218
3,574,738 49,046,598
- 1,158,625
6,618,333
- 1,247,508
1,079,949 1,175,357
3,659,369 13,285,915
- - 47,789 2,258,002
24,541 35,945 2,303 5,669 61,212 159,146
- - 2,604 - 158,929 161,533
- - - 433 42,438 572,138
11,411,386 4,843,693 4,907 6,102 12,260,958 116,781,495
- - - - 207,155 13,713,701
165,060 25,673,701
1,818,887 26,201,752
1,669,230 7,036,998
- - 8,619,843
1,222,389 - - 2,386,439 3,608,828
- - 1,576,074 659,061 14,117,676 17,011,012
7,905,514 2,030,000 - - 1,325,000 11,462,170
2,183,238 329,813 - - 1,351,187 3,864,238
88,956 500 99,613 130,244 74,876 394,189
10,177,708 3,582,702 1,675,687 789,305 23,115,510 117,586,432
1,233,678 1,260,991 ( 1,670,780) ( 783,203) ( 10,854,552) ( 804,937)
2,549,678 - - 2,997,915 9,560,761 19,767,757
( 1,130,111) - ( 1,400,577) ( 18,297,137)
- - - 194,912 204,121
7,645,000 28,831,594 36,973,406 5,190,000 78,640,000
272,555 1,369,501 1,756,237 56,669 3,454,962
( 7,833,892) - - - ( 7,833,892)
2,633,341 ( 1,130,111) 30,201,095 41,727,558 13,601,765 75,935,811
3,867,019 130,880 28,530,315 40,944,355 2,747,213 75,130,874
12,252,396 32,493,685 ( 1,447) 449,625 50,907,132 115,249,737
$ 16,119,415 $ 32,624,565 $ 28,528,868 $ 41,393,980 $ 53,654,345 $ 190,380,611
19
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CITY OF GRAPEVINE, TEXAS
RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30,2013
Net change in fund balances-total governmental funds $ 75,130,874
Amounts reported for governmental activities in the Statement of Activities are different because:
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 assets recorded in the current period. 13,289,081
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. ( 9,172,115)
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 assets. Also, governmental
funds report the effect of issuance costs, 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 ( 78,640,000)
Repayment of principal of long-term debt 11,462,170
Payment to refunding escrow agent 7,833,892
Amortization of
Bond issuance costs-deferred charges 248,884
Premium on bond issuance ( 2,817,806)
Loss on refunding ( 366,250)
The net effect of various miscellaneous transactions involving capital assets (i.e., the sales, trade-ins,
and donations)is to increase net position. 142,882
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. ( 750,192)
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 balances liability ( 66,784)
Net OPEB obligation ( 2,684,765)
Net pension obligation ( 386,239)
Revenues in the statement of activities that do not provide current financial resources are not reported
as revenues in the funds. 1,073,868
Change in net position of governmental activities $ 14,297,500
The accompanying notes are an integral part of these financial statements.
20
CITY OF GRAPEVINE, TEXAS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
SEPTEMBER 30,2013
Business-type Activities-Enterprise Funds
Water Lake
and Sewer Enterprise Total
ASSETS
Current assets:
Cash and cash equivalents $ 10,000,858 $ 65,985 $ 10,066,843
Receivables,net 2,735,373 32,439 2,767,812
Due from other governments 92,047 - 92,047
Accrued interest 2,748 15 2,763
Inventory - 47,956 47,956
Total current assets 12,831,026 146,395 12,977,421
Noncurrent assets:
Restricted cash and investments:
Customer deposits 880,946 - 880,946
Revenue bond construction 2,124,004 220,589 2,344,593
Impact fees 8,031,864 - 8,031,864
Total restricted cash and investments 11,036,814 220,589 11,257,403
Capital assets:
Land 550,882 1,092,663 1,643,545
Buildings, structure and improvements 118,044,600 8,850,775 126,895,375
Vehicles,machinery and equipment 1,856,403 92,833 1,949,236
Construction in progress 219,754 - 219,754
Water storage rights 129,594 - 129,594
Less accumulated depreciation ( 41,122,424) ( 6,412,862) ( 47,535,286)
Net capital assets 79,678,809 3,623,409 83,302,218
Deferred charges 116,996 19,088 136,084
Total noncurrent assets 90,832,619 3,863,086 94,695,705
Total assets 103,663,645 4,009,481 107,673,126
The accompanying notes are an integral part of these financial statements.
21
CITY OF GRAPEVINE, TEXAS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
SEPTEMBER 30,2013
Business-type Activities-Enterprise Funds
Water Lake
and Sewer Enterprise Total
LIABILITIES
Current liabilities:
Accounts payable $ 2,103,786 $ 140,170 $ 2,243,956
Accrued liabilities 142,166 25,346 167,512
Due to other funds 9,286 926,650 935,936
Deferred revenue 318,062 - 318,062
Compensated absences 31,645 24,617 56,262
Retainage payable 147,892 - 147,892
Accrued bond interest payable 41,960 13,551 55,511
General obligation bonds payable 1,420,000 330,000 1,750,000
Customer deposits 885,899 - 885,899
Total current liabilities 5,100,696 1,460,334 6,561,030
Noncurrent liabilities:
General obligation bonds payable 7,076,282 2,135,944 9,212,226
Net OPEB obligation 987,302 503,778 1,491,080
Net pension obligation 375,206 171,801 547,007
Compensated absences 94,933 73,850 168,783
Total noncurrent liabilities 8,533,723 2,885,373 11,419,096
Total liabilities 13,634,419 4,345,707 17,980,126
NET POSITION
Net investment in capital assets 73,306,532 1,443,090 74,749,622
Restricted for:
Impact fees 8,031,864 - 8,031,864
Unrestricted 8,690,830 ( 1,779,316) 6,911,514
Total net position $ 90,029,226 $( 336,226) $ 89,693,000
22
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CITY OF GRAPEVINE, TEXAS
STATEMENT OF REVENUES,EXPENSES AND CHANGES
IN NET POSITION-PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2013
Business-type Activities-Enterprise Fund
Water Lake
and Sewer Enterprise Total
OPERATING REVENUES
Charges for services $ 19,299,271 $ 3,097,973 $ 22,397,244
Miscellaneous 885,608 21,867 907,475
Total operating revenues 20,184,879 3,119,840 23,304,719
OPERATING EXPENSES
Salaries and benefits 2,916,459 1,287,064 4,203,523
Maintenance,repairs, and supplies 9,871,647 330,075 10,201,722
Depreciation 2,466,325 392,484 2,858,809
General and administrative 3,123,542 973,073 4,096,615
Total operating expenses 18,377,973 2,982,696 21,360,669
OPERATING INCOME 1,806,906 137,144 1,944,050
NONOPERATING REVENUES(EXPENSES)
Investment income 151,267 372 151,639
Loss on disposal of property ( 93,003) - ( 93,003)
Interest and fiscal agent charges ( 428,944) ( 80,206) ( 509,150)
Total nonoperating revenues(expenses) ( 370,680) ( 79,834) ( 450,514)
INCOME BEFORE TRANSFERS 1,436,226 57,310 1,493,536
TRANSFERS
Transfers out ( 1,271,724) ( 198,896) ( 1,470,620)
Total transfers ( 1,271,724) ( 198,896) ( 1,470,620)
CHANGE IN NET POSITION 164,502 ( 141,586) 22,916
TOTAL NET POSITION,BEGINNING 89,864,724 ( 194,640) 89,670,084
TOTAL NET POSITION,ENDING $ 90,029,226 $( 336,226) $ 89,693,000
The accompanying notes are an integral part of these financial statements.
23
CITY OF GRAPEVINE, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2013
Business-type Activities-Enterprise Funds
Water Lake
and Sewer Enterprise Total
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 20,011,598 $ 3,124,324 $ 23,135,922
Cash paid to employees ( 2,664,966) ( 1,291,960) ( 3,956,926)
Cash paid to suppliers for goods and services ( 12,995,537) ( 1,148,278) ( 14,143,815)
Net cash provided by operating activities 4,351,095 684,086 5,035,181
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Principal repayment on bonds ( 2,160,000) ( 315,000) ( 2,475,000)
Interest and related fees paid on long-term debt ( 389,070) ( 104,347) ( 493,417)
Acquisition and construction of capital assets ( 4,797,450) - ( 4,797,450)
Net cash used by capital and related
financing activities ( 7,346,520) ( 419,347) ( 7,765,867)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments and cash equivalents 160,641 411 161,052
Net cash provided by investing activities 160,641 411 161,052
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfer out ( 1,271,724) ( 198,896) ( 1,470,620)
Net cash used by noncapital
financing activities ( 1,271,724) ( 198,896) ( 1,470,620)
NET INCREASE IN CASH
AND CASH EQUIVALENTS ( 4,106,508) 66,254 ( 4,040,254)
CASH AND CASH EQUIVALENTS,BEGINNING 25,144,180 220,320 25,364,500
CASH AND CASH EQUIVALENTS,ENDING $ 21,037,672 $ 286,574 $ 21,324,246
The accompanying notes are an integral part of these financial statements.
24
CITY OF GRAPEVINE, TEXAS
STATEMENT OF CASHFLOWS
PROPRIETARY FUNDS
(Continued)
FOR THE YEAR ENDED SEPTEMBER 30,2013
Business-type Activities-Enterprise Funds
Water Lake
and Sewer Enterprise Total
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
Operating income $ 1,806,906 $ 137,144 $ 1,944,050
Adjustments to reconcile operating income to net cash
provided(used)by operating activities:
Depreciation 2,466,325 392,484 2,858,809
(Increase)decrease in assets:
Customer receivable ( 60,040) 4,484 ( 55,556)
Other receivable ( 92,047) - ( 92,047)
Inventories - ( 31709) ( 3,709)
Increase(decrease)in liabilities:
Accounts payable ( 134,322) 39,524 ( 94,798)
Accrued liabilities 61,760 ( 1,834) 59,926
Other liabilities 1,805 8,206 10,011
Deferred revenue ( 21,194) - ( 21,194)
Customer deposits 11,197 - 11,197
Retainage payable 59,212 - 59,212
Net OPEB obligation 221,969 100,414 322,383
Net pension obligation 28,983 12,269 41,252
Compensated absences 541 ( 4,896) ( 4,355)
Total adjustments 2,544,189 546,942 3,091,131
Net cash provided by operating activities $ 4,351,095 $ 684,086 $ 5,035,181
NONCASH INVESTING,CAPITAL,AND
FINANCING ACTIVITIES
The City issued bonds to refund Water and Sewer Fund long-term debt. $426,631 was deposited into an
irrevocable trust for the defeasance of$395,000 of outstanding long-term debt and$31,631 of interest.
25
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CITY OF GRAPEVINE, TEXAS
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
SEPTEMBER 30,2013
Grapevine
Health Care
Reimbursement
Agency Trust
ASSETS
Cash and cash equivalents $ 154,471 $ 2,103,628
Accrued interest receivable - 737
Total assets 154,471 2,104,365
LIABILITIES
Accounts Payable - 49
Due to beneficiary 154,471 -
Total liabilities 154,471 49
NET POSITION
Held in trust for Grapevine Health Care
Reimbursement $ 2,104,316
The accompanying notes are an integral part of these financial statements.
26
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CITY OF GRAPEVINE, TEXAS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
TRUST FUND
FOR THE YEAR ENDED SEPTEMBER 30,2013
Grapevine
Health Care
Reimbursement
Trust
ADDITIONS
Employer contributions $ 348,000
Investment income 7,931
Total additions 355,931
DEDUCTIONS
Distributions 5,966
Change in net position 349,965
NET POSITION,BEGINNING 1,754,351
NET POSITION,ENDING $ 2,104,316
The accompanying notes are an integral part of these financial statements.
27
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CITY OF GRAPEVINE, TEXAS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2013
1. 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 Entity
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 have been blended
or discretely presented within the financial statements.
Blended Component Units
Grapevine Tax Increment Financing District Reinvestment Zone Number One and Two (the
"TIF's") were formed to finance and make public improvements serving only the City, under
the authority of the Tax Increment Financing Act. The TIF's 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 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 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 Economic
Development Fund accounts for funds used to stimulate the local economy, development,
and redevelopment. One-half(1/2) cent local sales and use tax within the district fund these
two blended component units. Three eighths (3/8th) of one-half cent of the local sales tax is
28
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 Economic Development Fund. The Boards of Directors of these blended
component units include citizens as members, but are substantively the same as the City
Council.
Discretely Presented Component Unit
Grapevine Heritage Foundation (the "Foundation") is a Texas nonprofit corporation
governed by a 15-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 boards are not substantively the same. The
Foundation does not provide services to the City.
Complete financial statements for the TIFS may be obtained from the City of Grapevine,
Finance Department, 200 South Main St., Grapevine Texas 76051. Separate financial
statements for the Heritage Foundation, the Crime Control and Protection District, The 4B
Transit Fund, and the 4B Economic Development Fund are not prepared.
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, Public Works, 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 nonmaj or funds are combined in a separate
column in the fund financial statements. The nonmaj or funds are detailed in the combining
section of the statements.
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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 (other local governments,
individuals, pension participants, etc.) 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, as are the proprietary fund financial
statements. 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.
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.
Business-type activities and all proprietary funds are accounted for on a flow of economic
resources measurement focus. With this measurement focus, all assets and all liabilities
associated with the operation of these funds are included on the balance sheet. 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.
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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 (Police
Administration, Fire, Public Works, Libraries, Parks and Recreation, etc.) and is
the primary operating unit of the City.
The Special Revenue Fund(Hotel Occupancy Tax Fund) accounts for all revenues
and expenditures relating to the hotel/motel occupancy tax received by the City.
The Special Revenue Fund (Crime District Fund) accounts for the accumulation
and use of sales tax proceeds designated for crime reduction programs.
The Special Revenue Fund (4B-Transit Fund) is used to account for the
accumulation and expenditure of resources used to fund the City of Grapevine'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 resources for, and
the payment of, general long-term debt principal,interest and related costs.
The Tax Increment Financin,-Number One (TIF#1) Debt Service Fund TIF #1
account was established by ordinances authorizing the issuance of Combination
Tax and Tax Increment Reinvestment Zone Certificate of Obligations Series 1996.
A property tax is levied for the payment of the debt as it becomes due and is
currently payable in annual installments as it becomes due.
The Capital Proiects Fund (Parks Open Space and Recreation Fund) is used to
account for the financing, acquisition, construction and improvement of parks and
public recreation facilities.
The Capital Proiects Fund (General Facilities and Equipment Fund) is used to
account for 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
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water and sewer system and billing and collection activities. The fund also
accounts for the accumulation of resources for, and the payment of, long-term
debt principal and interest for revenue bonds and obligations under capital leases
when due throughout the year. 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 a municipal golf course.
There are no nonmajor proprietary funds for the fiscal year end September 30, 2013.
Fiduciary Funds. There are four fiduciary funds: three agency funds and the Grapevine
Health Reimbursement Trust Fund (HRA). Agency Funds represent funds held in an agency
capacity for the Industrial Development Corporation, funds held for the Police Department
entitled "Police Department Case Settlement" and funds held for the W.D. Tate Scholarship.
These funds do not belong to the City. The Industrial Development Corporation is organized
solely for the purposes of promoting and developing commercial, industrial, manufacturing
and medical research enterprises to promote and encourage employment, public health and
welfare. The HRA is an employee benefit trust account organized solely for the purpose of
holding resources required to be held in trust for the members and beneficiaries of the
defined employee medical plans. Trust funds use the economic resources measurement
focus. Agency funds do not have a measurement focus.
As a general rule, the effect of interfund activity has been eliminated from the government-
wide financial statements. Exceptions to this general rule are charges between the City's
governmental and business-type activities. Eliminations of these charges would distort the
direct costs and program revenues reported for the various functions concerned.
When both restricted and unrestricted resources are available for use, it is the City's policy to
use the restricted resources first, and then use the unrestricted resources as needed.
D. Assets, Liabilities, and Net Position
1. Cash and Investments
Cash consists of demand deposits (principally interest-bearing accounts).
Investments are stated at fair value. Fair value is the amount at which a financial
instrument could be exchanged in a current transaction between willing parties. The
City considers quoted market prices at September 30, 2013, to be the fair value of
investments.
For purposes of the statement of cash flows, proprietary funds consider all highly liquid
investments (including restricted assets) with a maturity of three months or less when
purchased to be cash equivalents.
2. Interfund Transactions, Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements
outstanding at the end of the fiscal year are referred to as either "due to/from other
32
funds" (i.e., the current portion of interfund loans) or "advances to/from other funds"
(i.e., the non-current portion of interfund loans). All other outstanding balances
between funds are reported as either "due to/from other funds" or "advances to/from
other funds." Any residual balances outstanding between the governmental activities
and business-type activities are reported in the government-wide financial statements as
"internal balances."
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
2012 levy was based was approximately $6,231,678,669. 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 general governmental service and
debt service for the year ended September 30, 2013, was $0.345695 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 2013 are recorded as receivables, net of estimated uncollectibles. The net receivables
collected during 2013 and those considered "available" at year-end are recognized as
revenues in 2013. 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 revenue in the fund financial statements.
All trade and property tax receivables are shown net of an allowance for uncollectibles.
All other allowances for uncollectible accounts are based on accounts outstanding in
excess of 360 days of the invoice date. The property tax receivable allowance is based
on the average collection rate of delinquent taxes over the last 20 years.
Property taxes are imposed nonexchange revenue. 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.
The allowance for uncollectible accounts for utility billing is estimated based on a
percentage of sales.
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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). Prepaid items are for 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 for prepaid items to indicate it is not available for other subsequent expenditures.
Prepaids are defined as payments of greater than $5,000 that benefit future periods.
5. Restricted Assets
Certain proceeds of the City's general obligation, certificates of obligation and revenue
bonds, as well as certain resources set aside for their repayment, are classified as
restricted assets on the balance sheet because their use is limited by applicable bond
covenants or they are maintained in separate investment accounts. The "revenue bond
construction" accounts are used to report those proceeds of revenue bond issuances that
are restricted for use in construction of assets. Also included in restricted assets are
impact fees (see Note 13) and customer deposits.
6. Capital Assets
Capital assets, which include land improvements, construction-in-progress, buildings
and improvements, equipment, intangible assets and infrastructure assets (e.g., roads,
bridges, and similar items), are reported in the applicable governmental or business-
type activities columns 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 estimated fair
market value 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.
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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 3-10
Motor vehicles 3-10
7. 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.
8. 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. Bond issuance costs and losses on
refundings are reported as deferred charges and amortized on a straight line basis over
the life of the related debt.
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.
9. 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
35
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.
• Assigned: This classification includes amounts that are constrained by the
City's intent to be used for a specific purpose but are neither restricted nor
committed. This intent can be expressed by the City Council or City
Manager.
• 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.
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.
10. New Accounting Principles
Significant new accounting standards not yet implemented by the City include the
following.
Statement No. 65 ("GASB 65"), Items Previously Reported as Assets and Liabilities, is
effective for periods beginning after December 15, 2012. This Statement establishes
accounting and financial reporting standards that reclassify, as deferred outflows of
resources or deferred inflows of resources, certain items that were previously reported
as assets and liabilities and recognizes, as outflows of resources or inflows of resources,
certain items that were previously reported as assets and liabilities.
Statement No. 68 ("GASB 68"),Accounting and Financial Reporting for Pensions -an
Amendment of GASB Statement No. 27, is effective for periods beginning after June 15,
2014. The primary objective of this Statement is to improve accounting and financial
36
reporting by state and local governments for pensions. This Statement results from a
comprehensive review of the effectiveness of existing standards of accounting and
financial reporting for pensions with regard to providing decision-useful information,
supporting assessments of accountability and interperiod equity, and creating additional
transparency.
2. DEFICIT EQUITY BALANCES
The Lake Parks Fund (Special Revenue — Nonmajor Fund) had a deficit fund balance of
($820,930). This deficit has been decreasing over recent years and is attributed to an increase in
revenues from the expansion of the Vineyards Campground and cabins. This deficit will either
be resolved with these increased revenues or a transfer from other funds in the future.
The Grant Fund (Special Revenue — Nonmajor Fund) had a deficit fund balance of ($2,483) at
year-end. This deficit can be attributed to the timing of grant payments from granting agencies.
The deficit will be funded in the subsequent period with the receipt of grant funding.
The Lake Enterprise Fund had a deficit net position of ($336,226). The City anticipated the
deficit equity balance in this fund will decline in the future. If this deficit continues it will either
be resolved with an increase in revenues or a transfer from other funds.
3. CASH AND INVESTMENTS
As of September 30, 2013, the City had the following cash and investments:
Total City cash deposits $ 29,465,267
Total investments 183,724,369
Total City cash and investments $ 213,189,636
Cash and investments composition:
Primary government $ 210,430,346
Component unit 501,191
Trust and agency funds 2,258,099
Total cash and investments $ 213,189,636
Weighted Average
Investment Type Fair Value Maturity(Days)
TexPool $ 181,040,216 60
LOGIC 1,823,986 55
U. S.Treasury Bonds 294,043 327
Municipal Bonds 566,124 30
Total portfolio $ 183,724,369
Portfolio weighted average maturity(days) 60
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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 are provided by Lehman Brothers, Inc. and 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. Under the LOGIC Participation Agreement,
administrative and investment services to LOGIC are provided by First Southwest Asset
Management, 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, 2013, the City's investments in LOGIC and TexPool were both rated AAAm by
Standard& Poor's.
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. TexPool and
LOGIC are public funds investment pools operating as a 2a-7 like pool and in full compliance
with the Public Funds Investment Act.
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,
2013.
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4. RECEIVABLES
Receivables as of year-end for the City's individual major funds and nonmaj or funds in the
aggregate, including the applicable allowances for uncollectible accounts, are as follows:
Less
Accrued Gross Allowance for
Interest Taxes Accounts Receivables Uncollectibles Total
General $ 1,711 5,075,166 4,808,480 $ 9,885,357 ( 3,566,903) $ 6,318,454
Hotel Occupancy 1,221 972,070 79,748 1,053,039 ( 14,988) 1,038,051
Crime District - 1,962,876 2,928 1,965,804 - 1,965,804
413-Transit Fund 181 1,438,677 - 1,438,858 - 1,438,858
Debt Service 2,221 1,116,085 21,932 1,140,238 ( 794,428) 345,810
Debt Service TIF#1 4,419 1,632,603 - 1,637,022 - 1,637,022
Parks Open Space and Recreation 17 - 17 17
General Facilities and Equipment 82 - 82 - 82
Water and Sewer 2,748 2,860,633 2,863,381 ( 125,260) 2,738,121
Lake Enterprise 15 - 32,439 32,454 - 32,454
Nonmajor funds 6,154 1,760,469 195,364 1,961,987 1,961,987
Total $ 18,769 $ 13,957,946 $ 8,001,524 $ 21,978,239 $( 4,501,579) $ 17,476,660
Governmental funds report deferred revenue in connection with receivables for revenue that is
not considered to be available to liquidate liabilities of the current period. Governmental funds
also defer revenue recognition in connection with resources that have been received, but not yet
earned. At the end of the current fiscal year, the various components of deferred revenue and
unearned revenue reported in the governmental funds were as follows:
Unavailable Unearned
Governmental funds:
Franchise taxes $ 1,606,328
Open space deposits 123,044
Convention center deposits 99,779
Camping and pavilion fees 237,427
Delinquent property taxes receivable-general $ 182,073 -
Delinquent property taxes receivable-debt service 308,597
Grants 251,958
Property taxes receivable debt service-TIF#1 1,093,579
Property taxes receivable debt service-TIF#2 1,164,712
Ambulance fees 764,293
Municipal court fines 227,939 -
Miscellaneous 24,000 53,925
Total $ 4,017,151 $ 2,120,503
The City considers franchise taxes exchange transactions as a lease of right-of-way for utility
lines. Because they are treated as exchange transactions, the payments are recorded as unearned
revenue and then are recognized in the period of exchange.
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5. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2013, was as follows:
Primary Government
Beginning Transfers Transfers and Ending
Balance and Additions Retirements Balance
Governmental activities:
Capital assets,not being depreciated:
Land $ 47,821,876 - - $ 47,821,876
Construction in progress 3,725,009 $ 5,660,173 $( 3,358,023) 6,027,159
Total assets not being depreciated 51,546,885 5,660,173 ( 3,358,023) 53,849,035
Capital assets,being depreciated:
Buildings 49,729,458 959,539 - 50,688,997
Improvement other than buildings 27,115,453 3,621,646 - 30,737,099
Equipment and vehicles 30,788,276 7,778,822 ( 2,066,387) 36,500,711
Infrastructure 121,490,558 1,249,520 ( 1 50,835) 121,489 ,43
Total capital assets being depreciated 229,123,745 13,609,527 ( 3,31722) 239,416,050
Less accumulated depreciation:
Buildings ( 16,614,187) ( 1,435,628) - ( 18,049,815)
Improvement other than buildings ( 8,329,192) ( 1 ,66,603) - ( 9,595,795)
Equipment and vehicles ( 21,459,426) ( 2 ,08,842) 1,060,745 ( 22,607,523)
Infrastructure ( 65,135,619) ( 4,22b1,042) - ( 69,396,661)
Total accumulated depreciation ( 111,538,424) ( 9,172,115) 1,060,745 ( 119,649,794)
Total capital assets being
depreciated,net 117,585,321 4,437,412 ( 256,477) 119,76656
Governmental activities capital
assets,net $ 169,132 ,06 $ 10,097,585 $( 5,614,500) $ 173,615 ,91
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Beginning Transfers Transfers and Ending
Balance and Additions Retirements Balance
Business-type activities:
Capital assets,not being depreciated:
Land $ 1,643,545 - $ 1,643,545
Construction in progress 2,122,792 $ 3,954,809 $( 5,857,847) 219,754
Total assets not being depreciated 3,766,337 3,954,809 ( 5,857,847) 1,86399
Capital assets,being depreciated:
Buildings 2,432,585 - 2,432,585
Improvement other than buildings 6,867,585 - - 6,867,585
Equipment and vehicles 1,109,718 848,513 ( 8,995) 1,949,236
Water storage rights 683,547 - - 683,547
Infrastructure 111,835,306 5,759,899 - 117,59505
Total capital assets being depreciated 122,928,741 6,608,412 ( 8,995) 129,528,158
Less accumulated depreciation:
Buildings ( 1,592,811) ( 41,969) - ( 1,634,780)
Improvement other than buildings ( 4,623,707) ( 364,493) - ( 4,988,200)
Equipment and vehicles ( 599,865) ( 117,666) 8,068 ( 709,463)
Water storage rights ( 536,864) ( 17,089) - ( 553,953)
Infrastructure ( 37,88551) ( 2,317,592) - ( 4002,843)
Total accumulated depreciation ( 4538,498) ( 2,858,809) 8,068 ( 48,08939)
Total capital assets being
depreciated,net 77,69043 3,749,603 ( 927) 81,438,919
Business-type activities capital
assets,net $ 81,456,580 $ 7,704,412 $( 5,858,774) $ 83,30218
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government $ 629,340
Public safety 1,153,896
Public works 4,738,946
Culture and recreation 2,649,933
Total depreciation expense -governmental activities $ 9,172,115
Business-type activities:
Water and sewer $ 2,466,325
Lake Enterprise 392,484
Total depreciation expense -business-type activities $ 2,858,809
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Beginning Transfers Transfers and Ending
Balance and Additions Retirements Balance
Discre tely Pre sented 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 .75 - - 31 .75
Total capital assets being depreciated 2,008,100 - - 2,008,100
Less accumulated depreciation:
Building ( 156 .71) ( 27,576) - ( 183,847)
Improvements other than building ( 644,138) ( 47,801) - ( 691,939)
Vehicles and equipment ( 31 .75) - - ( 31 .75)
Total accumulated depreciation ( 831,684) ( 75,377) - ( 907,061)
Total capital assets being
depreciated,net 1,176,416 ( 75,377) - 1,101,039
Discretely presented component unit
capital assets,net $ 1,626,483 $( 75,377) $ - $ 1,551,106
Construction Commitments
The City has active construction projects as of September 30, 2013. The projects include
building projects, street construction and improvements of existing streets, and repair and
maintenance of existing water and sewer systems. As of September 30, 2013, the City had
outstanding construction commitments totaling $5,347,815.
Project Commitment
Streets and drainage projects $ 556,167
Commuter rail project 112,544
Water and wastewater projects 1,090,193
Public safety building 2,025,832
Community activity center renovation 1,563,079
Total $ 5,347,815
The commitment for building, street and drainage construction is funded from unexpended
general obligation, certificates of obligation, and revenue bond proceeds. Water and wastewater
projects are funded from unexpended revenue bond proceeds and operations.
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6. INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
The composition of interfund balances as of September 30, 2013, is as follows:
Due to/from Other Funds
Receivable Fund Payable Fund Amount
General Crime District $ 1,005,090
Grants (no nmaj or fund) 125,066
Lake Parks(nonmajorfund) 582,141
Water and Sewer 9,286
Lake Enterprise 926,650
Total General 2,648,233
General Facilities and
Hotel Occupancy Tax Equipment 326,270
Total $ 2,974,503
Interfund Transfers
The primary purpose of interfund transfers is the transfer of funds from one fund to support
expenditures of another fund in accordance with the authority established for the individual fund.
A summary of interfund transfers by fund type is as follows:
Transfers to
Hotel General
Occupancy Crime 413-Transit Debt Facilities and Nonmajor
General Tax District Fund Service Equipment Governmental Total
Transfers from:
General $ - $ 15,041 $ 1,300,000 $ - $ - $ 2,169,886 $ 7,407,150 $ 10,892,077
Hotel Occupancy Tax 966,247 - - 244,460 2,085,317 828,029 450,000 4,574,053
Crime District - - - - - 1,500 1,500
413-Transit Fund 298,819 - 298,819
Debt Service-TIF#1 - - 1,130,111 1,130,111
Water and Sewer 1,271,724 - 1,271,724
Lake Enterprise 198,896 - - 198,896
Nonmajor Governmental 364,216 464,361 572,000 1,400,577
Total $ 2,801,083 $ 313,860 $ 1,300,000 $ 244,460 $ 2,549,678 $ 2,997,915 $ 9,560,761 $ 19,767,757
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Various nonmajor funds received transfers from the General Fund during fiscal year 2013. The
General Fund transferred $3,000,000 to the Quality of Life Fund for capital projects. Per
Council policy, revenues in excess of the 20%balance requirement in the General Fund are to be
transferred to the Quality of Life CIP Fund at fiscal year-end. The General Fund transferred
$1,300,000 to the Crime District Fund to supplement a decrease in anticipated sales tax revenues
for fiscal year 2013. In addition, the Street Maintenance and Capital Replacement Fund received
a $2,809,000 transfer for capital projects related to streets and general facilities, and $1,596,650
was transferred to the Capital Acquisition Fund for fleet, capital and technology equipment
purchases. There were transfers to the Debt Service Fund of $2,085,317 for payment of debt
obligations for the Hotel Occupancy Tax Fund, $113,988 for the Storm Drainage Fund, and
$327,651 for the Lake Parks Fund, $22,722 for the Municipal Court Technology Fund.
Transfers to the General Fund for $2,801,083 were for payments from other funds for insurance,
claims, fleet and IT costs administered by the General Fund.
7. LEASES
Operating Leases
Lake Parks:
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. Revenues generated from the
operations on the property will be used to maintain the property. 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.
Gaylord Texan Resort and Convention Center:
The City leased property from the United States Corps of Engineers as referred to above (Lake
Parks). The City entered into a sublease agreement with the Gaylord Texan Resort and
Convention Center on March 18, 1994, for a portion of the land leased from the United States
Corps of Engineers. The contract is for 49 years and the rent payment is $1 per year. Gaylord
Texan Resort and Convention Center has a sublease hold deed of trust and security agreement.
The City agreed to sublease property to Gaylord Texan Resort and Convention Center so they
could secure financing.
The City and Gaylord Texan Resort and Convention Center entered into an amended agreement
in fiscal year 2008 pertaining to the United States Corps of Engineers leased property referred to
as the "Lease Property." This amendment does not become effective until the issuance of a
building permit for the expansion on this property. The "Lease Property" terms provide for
annual rents during the construction of the expansion of$54,360 with periodic fee increases due
upon substantial completion of the expansion of the Gaylord Texan Resort and Convention
Center. The annual rent will be adjusted every five years based on the terms of the contract. The
Land Lease shall commence upon the issuance of a building permit for the expansion and shall
have a primary term of 25 years with Gaylord Texan Resort and Convention Center having the
right to extend the term for one additional period of 25 years.
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In the new amended agreement between the City and Gaylord Texan Resort and Convention
Center, the City also granted to Gaylord Texan Resort and Convention Center an option for the
right to lease the "Western Amenity Parcel." For a period of one year from the date of the Option
Election, Gaylord Texan Resort and Convention Center has the right to lease the "Western
Amenity Parcel," and to keep the option in effect, Gaylord Texan Resort and Convention Center
must continue paying annual rent at an amount based upon the contract terms. Gaylord Texan
Resort and Convention Center elected to pick up the option for the "Western Amenity Parcel" on
June 5, 2008, and paid the City of Grapevine $54,000 in accordance with the terms of the
agreement.
In May 2009, the City and Gaylord Texan Resort and Convention Center entered into a third
agreement and agreed to extend the required commencement date of the expansion from
September 12, 2009, until September 12, 2012, and extended the renewal dates for parcels 5 and
7, as defined in the agreement, until September 12, 2012. In September 2012, the City and the
Gaylord Texan Resort and Convention Center entered into a fourth agreement and agreed to
extend the required commencement date of the expansion until March 12, 2013. In November
20, 2012 the date was extended until September 12, 2014.
Cowboys Golf Course:
The City entered into a 25-year lease agreement with the Cowboys Golf Course in 1994. The
rent fee is 3% of Cowboys' gross revenues from operations.
8. 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, combination tax and revenue bonds, and
certificates of obligation outstanding and their corresponding allocations to the governmental and
business-type activities at September 30, 2013, follows:
Purpose Interest Rates Amount
Governmental activities 2.5%-5.25% $ 74,020,000
Governmental activities,refunding 2.5%-5.25% 28,672,840
Total governmental 102,692,840
Business-type activities,refunding 2.0%-5.25% 10,845,000
Total general obligation debt $ 113,537,840
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Annual debt service requirements for general obligation bonds are as follows:
Governmental Activities Business-type Activities
Year Ending General G.O. General G.O.
September 30, Obligation Interest Obligation Interest
2014 $ 6,035,000 $ 4,415,394 $ 1,750,000 $ 421,312
2015 7,300,000 3,747,889 1,830,000 347,525
2016 7,595,000 3,507,634 1,925,000 268,125
2017 6,580,000 3,274,306 1,855,000 195,038
2018 6,045,000 3,060,587 1,270,000 119,000
2019-2023 25,350,000 11,877,703 2,215,000 105,000
2024-2028 20,115,000 7,286,986 - -
2029-2033 23,672,840 2,882,075 - -
Total $ 102,692,840 $ 40,052,574 $ 10,845,000 $ 1,456,000
Certificates of Obligation
The City also issues certificates of obligation ("COs") to finance the acquisition and construction
of capital assets including certain capital improvement projects, municipal facilities, and
machinery and equipment. Interest rates on the outstanding COs range from 3.00% — 7.00%.
Annual debt service requirements to maturity for certificates of obligation of the primary
government are as follows:
Governmental Activities
Year Ending Certificates C.O.
September 30, of Obligation Interest
2014 $ 4,626,736 $ 2,047,833
2015 4,748,386 1,844,056
2016 4,810,095 1,615,121
2017 2,486,864 1,447,480
2018 2,603,694 1,334,576
2019-2023 14,173,143 4,813,025
2024-2028 11,400,000 1,363,287
2029-2033 810,000 24,552
Total $ 45,658,918 $ 14,489,930
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Notes Payable
The City issues tax notes to finance the construction of capital improvement projects, municipal
facilities, and machinery and equipment. The interest rates on the outstanding tax notes range
from 3.00%—4.25%.
Tax, Land and Other Notes debt service requirements to maturity are as follows:
Governmental Activities
Year Ending Tax,Land and Tax,Land and
September 30, Other Notes Other Interest
2014 $ 1,824,236 $ 165,355
2015 1,400,342 97,856
2016 571,533 69,285
2017 587,816 56,751
2018 580,000 34,200
2019-2023 1,307,103 61,558
2024-2028 25,488 965
Total $ 6,296,518 $ 485,970
The following is a summary of long-term liability transactions of the City for the year ended
September 30, 2013, (amounts expressed in thousands):
Balance Balance Due Within
9/30/2012 Increases Reductions 9/30/2013 One Year
Governmental activities:
General obligation bonds $ 40,355,000 $ 73,450,000 $( 11,112,160) $ 102,692,840 $ 6,035,000
Certificates of obligation 50,794,060 1,225,000 6( 360,142) 45,658,918 4,626,736
Total bonds payable 91,149,060 74,675,000 ( 17,472,302) 148,351,758 10,661,736
Notes payable-taxes 3,390,000 3,965,000 ( 1 .60,000) 6,095,000 1,810,000
Notes payable 214,730 - ( 13 .12) 201,518 14 .36
Total notes payable 3,604,730 3,965,000 1( x,73,,12) 6 .96,518 1,824 .36
Total bonds and notes 94,753,790 78,640,000 18( 745,514) 154,648,276 12,485,972
Less deferred amount
on refunding ( 2,896,959) ( 340 .82) 366,2250 ( 2,870,991) -
Premium on bond issues 3,787,206 3,454,961 ( 843,001) 6,399,166 -
Discount on bond issues ( 24,159) - 24,159 -Net governmental bonds and
notes outstanding 95,619,878 81,754,679 ( 19,198,106) 158,176,451 12,485,972
Sales tax obligation 1,147,459 - ( 201,656) 945,803 173,556
Net OPEB obligation 8,861,731 2,684,765 - 11,546,496 -
Net pension obligation 4,641,703 6,314,370 ( 5,928,131) 5,027,942 -
Compensated absences 2,880,586 2,339,543 ( 2 .72,759) 2,947,370 736,843
Total governmental
long-term liabilities $ 113,151,357 $ 93,093,357 $(27,600,652) $ 178,644,062 $ 13,396,371
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For the governmental activities, compensated absences and other long-term liabilities are
generally liquidated by the General Fund.
Balance Balance Due Within
9/30/2012 Increases Reductions 9/30/2013 One Year
Business-type activities:
Water and sewer obligations
General obligation bonds $ 9,895,000 $ 415,000 $(1,765,000) $ 8,545,000 $ 1,420,000
Water and sewer bonds 790,000 - ( 790,000) - -
Less deferred amount on refund ( 450,630) ( 41,301) 87,684 ( 40447)
Premium on bond issues 420,795 20,023 ( 8589) 355,529 -
Net water and sewer bonds payable 10,655,165 393,722 (2,552,605) 8,496,282 1,420,000
Lake enterprise obligations
General obligation bonds 2,615,000 - ( 315,000) 2,300,000 330,000
Less deferred amount on refund ( 53,224) 8,349 ( 44,875) -
Premium on bond issues 245,955 ( 35,136) 210,819 -
Net Lake Enterprise bonds payable 2,807,731 - ( 341,787) 2,465,944 330,000
Net business-type bonds payable 13,462,896 393,722 (2,894,392) 10,962,226 1,750,000
Net OPEB obligation 1,168,697 322,383 - 1,491,080 -
Net pension obligation 505,755 674,418 ( 633,166) 547,007
Compensated absences 229,400 180,419 ( 184,774) 225,045 5662
Total business-type
long-term liabilities $ 15,366,748 $ 1,570,942 $(3,712,332) $ 1325,358 $ 1,80662
Advance Refunding
The City issued $8,060,000 of General Obligation Refunding Bonds, Series 2012 with interest
rates ranging from 2.0%-2.125%. The proceeds of these bonds were used to refund the following
obligations:
Amount
Refunded Obligations Refunded
Combination Tax and Revenue Improvement Bonds, Series 2001 S 240,000
General Obligation Refunding and Improvement Bonds, Series 2002 330,000
Combination Tax and Revenue Certificates of Obligation, Series 2003 225,000
General Obligation Refunding and Improvement Bonds, Series 2003 2,980,000
General Obligation Refunding Bonds, Series 2004 2,675,000
)mbination Tax and Lake Parks Revenue Certificates of Obligation, Series 2005A 1,035,000
General Obligation Refunding Bonds, Series 2006 395,000
$ 7,880,000
The net proceeds were deposited in an irrevocable trust with an escrow agent to provide funds
for future debt service payments on the refunded bonds. As a result, the refunded bonds are
considered defeased and the liability for those bonds has been removed from the statements of
net position. The reacquisition price exceeded the carrying amount of the old debt by $381,583.
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This amount is being netted against the new debt and amortized over the remaining life of the
refunded debt, which is shorter than the life of the new debt issued. This refunding was
undertaken to decrease total debt service payments over 15 years by $966,71 land resulted in an
economic gain (difference between the present values of the debt service payments of the old and
new debt) of$885,694.
Defeasance of Debt
As of September 30, 2013 outstanding balances of bond issues that have been refunded and
defeased in-substance by placing existing assets and the proceeds of new bonds in an irrevocable
trust to provide for all future debt service payments are $4,105,000.
Other Long-term Liabilities—Texas Comptroller of Public Accounts
As of September 30, 2013, the City of Grapevine has three payout agreements with the Texas
Comptroller of Public Accounts for overpayment of sales taxes that total $945,803. These
amounts will be withheld from sales tax receipts over a period not to exceed seven years.
Pledged Revenues
Tax Increment Financing District#1
The Board of Directors for the Tax Increment Financing District #1 approved amending the
Financing and Project Plan to allow the creation of a 380 Category within the Financing and Plan
whereas all City funds contributed to date and additional funds contributed up to 2016-2017 be
placed in a 380 account in the TIF zone to incentivize further economic development in the zone.
The action was passed by the Board on September 8, 2009.
Tax Increment Financing District#2
The City has entered into a local agreement with the Grapevine-Colleyville Independent School
District where future ad valorem taxes collected for the zone will be used to contribute towards
the School's middle school debt. The total contribution that the City is obligated to pay is
$40,287,173 as of September 30, 2013. This annual amount was negotiated with the school and
the school bills the City for this annual debt payment. The City does not have title to the middle
school improvements.
9. EMPLOYEES' RETIREMENT SYSTEM
Plan Description
The City provides pension benefits for all of its eligible employees through a non-traditional,joint
contributory, hybrid defined benefit plan in the statewide Texas Municipal Retirement System
(TMRS), an agent multiple-employer public employee retirement system. The plan provisions that
have been adopted by the City are within the options available in the governing state statutes of
TMRS.
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TMRS issues a publicly available comprehensive annual financial report that includes financial
statements and required supplementary information (RSI) for TMRS; the report also provides
detailed explanations of the contributions, benefits and actuarial methods and assumptions used by
the System. This report may be obtained from TMRS' web site at www.TMRS.com.
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:
Plan Year 2011 Plan Year 2012 Plan Year 2013
Employee deposit rate 7.00% 7.00% 7.00%
Matching ratio(city to employee) 2 to 1 2 to 1 2 to 1
Years required for vesting 5 5 5
Service retirement eligibility
(expressed as age/years of service) 60/5,0/20 60/5,0/20 60/5,0/20
Updated service credit 100%repeating, 10 0%repeating, 100%repeating,
transfers transfers transfers
Annuity increase (to retirees) 70%of CPI 70%of CPI 70%of CPI
repeating repeating repeating
Contributions
Under the state law governing TMRS, the contribution rate for each City is determined annually
by the actuary, using the Projected Unit Credit actuarial cost method. This rate consists of the
normal cost contribution rate and the prior service cost contribution rate, which is calculated to
be a level percent of payroll from year to year. The normal cost contribution rate finances the
portion of an active member's projected benefit allocated annually; the prior service contribution
rate amortizes the unfunded (overfunded) actuarial liability (asset) over the applicable period for
that city. Both the normal cost and prior service contribution rates include recognition of the
projected impact of annually repeating benefits, such as Updated Service Credits and Annuity
Increases.
The City contributes to the TMRS Plan at an actuarially determined rate. Both the employees
and the City make contributions monthly. Since the City needs to know its contribution rate in
advance for budgetary purposes, there is a one-year delay between the actuarial valuation that
serves as the basis for the rate and the calendar year when the rate goes into effect. The annual
pension cost and net pension obligation/(asset) are as follows:
Annual Required Contribution(ARC) $ 6,945,038
Interest on Net Pension Obligation 3 60,3 22
Adjustment to the ARC ( 316,572)
Annual Pension Cost 6,988,788
Contributions Made ( 6,561,297)
Increase (Decrease)in Net Pension Obligation 427,491
Net Pension Obligation/(Asset),beginning of year 5,147,458
Net Pension Obligation/(Asset),ending of year $ 5,574,949
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Accounting Annual Actual Percentage Net
Year Pension Contribution of APC Pension
Ending Cost(APC) Made Contributed Obligation
9/30/2011 $ 7,530,037 $ 5,993,241 80% $ 4,415,012
9/30/2012 6,890,012 6,157,566 89% 5,147,458
9/30/2013 6,988,788 6,561,297 94% 5,574,949
The required contribution rates for fiscal year 2013 were determined as part of the December 31,
2010 and 2011 actuarial valuations. Additional information as of the latest actuarial valuation,
December 31, 2012, also follows:
Valuation Date 12/31/2010 12/31/2011 12/31/2012
Actuarial cost method Projected Unit Credit Projected Unit Credit Projected Unit Credit
Amortization method Level percent Level percent Level percent
of payroll of payroll of payroll
GASB 25 equivalent single 27.2 years; 26.2 years, 25.2 years,
amortization period closed period closed period closed period
Amortization period for new
gains/losses 30 years 30 years 30 years
Asset valuation method 10-year smoothed 10-year smoothed 10-year smoothed
market market market
Actuarial Assumptions:
Investment rate ofre turn 7.00% 7.00% 7.00%
Projected salary increases varies by age varies by age varies by age
and service and service and service
Includes inflation at 3.00% 3.00% 3.00%
Cost-of-living adjustments 2.10% 2.10% 2.10%
Schedule of Funding Information
The funded status as of December 31, 2012, the most recent actuarial valuation date, is as follows:
Actuarial UAAL as a
Actuarial Accrued Unfunded Percentage
Actuarial Value of Liability Funded AAL Covered of Covered
Valuation Assets (AAL) Ratio (UAAL) Payroll Payroll
Date (a) (b) (a/b) (b-a) (c) (b-a)/(c)
12/31/2012 156,2289,479 198,037,309 78.9% 41,747,830 34,807,908 119.9%
Actuarial valuations involve estimates of the value of reported amounts and assumptions about
the probability of events far into the future. Actuarially determined amounts are subject to
continual revision as actual results are compared to past expectations and new estimates are
made about the future.
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Actuarial calculations are based on the benefits provided under the terms of the substantive plan in
effect at the time of each valuation, and reflect a long-term perspective. Consistent with that
perspective, actuarial methods and assumptions used include techniques that are designed to reduce
short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The Schedule
of Funding Progress, presented as Required Supplementary Information following the notes to the
financial statements, presents multi-year trend information about whether the actuarial value of
plan assets is increasing or decreasing over time relative to the actuarial accrued liability of
benefits.
10. COMMITMENTS AND CONTINGENCIES
The City is 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.
Gaylord Texan Resort and Convention Center
The City of Grapevine, Texas has a Memorandum of Understanding with Opryland Hotel
Texas, Limited Partnership "Gaylord" whereas one cent ($.01) of the Hotel Occupancy Tax
[currently six cents($.06)] collected by the City from the Gaylord, for the immediately preceding
fiscal-year, shall be remitted each year back to the Gaylord. Per the agreement dated March 24,
1999, these payments will continue for a period of 20 years. Expenditures for fiscal year-end
2013 were $701,970.
On November 20, 2012, the City entered into a fifth addendum agreement with Opryland Hotel—
Texas, Limited Partnership related to the expansion of the Gaylord Texan Resort and Convention
Center. Gaylord Entertainment, Inc. will receive a payment from the City in the amount equal to
one-half of the "City Property Taxes" paid by Gaylord Texan Resort and Convention Center to
the City for a 10-year period. The term "City Property Taxes" means the amount determined by
multiplying the City ad valorem tax rate for the years in question times the "Incremental
Increase" in value with the base year being 2009. On October 1, 2012, the Opryland Hotel —
Texas, Limited Partnership changed its name to RHP Property, GT a Delaware Corporation and
is now being reimbursed by the City as Marriott Gaylord.
The payment of Hotel Occupancy Taxes, as described in the preceding paragraph, will continue
for a period of 20 years. If a building permit is issued for the expansion of the Gaylord Hotel
prior to September 12, 2014, an additional one cent ($.02 total) will then be remitted back to the
Gaylord for the remainder of the 20 years.
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Great Wolf Lodge
The City of Grapevine, Texas entered into an incentive agreement with Great Wolf Resorts, Inc.
under Chapter 380 of the Texas Local Government Code. The Developer must complete the
project to construct a family oriented resort hotel featuring an indoor water park to be known as
the "Great Wolf Lodge." The Project is to be completed in two phases. In consideration of the
Developer's completion of the Project, the City agrees to provide the following incentives. For a
period of 10 years after the issuance of a Certificate of Occupancy for Phase I, the City shall
annually grant an amount to developer equal to one cent ($ .01) of the Hotel Occupancy Tax rate
[currently six cents ($.06)] collected by the City from Phase I of the Project for the immediately
preceding Fiscal Year. For a period of 10 years after the issuance of a Certificate of Occupancy
for Phase I, the City shall annually grant an amount to Developer equal to one cent of the Hotel
Occupancy Tax rate [currently six cents ($.06)] collected by the City from Phase II of the Project
for the immediately preceding Fiscal Year. The City shall annually provide a grant in an amount
equal to one half of one cent of the municipal sales tax revenue collected on the "Property" for a
period of 10 years following the opening of Phase II. Incentives of $527,708 were earned in
fiscal year 2013 and were remitted by the City in fiscal year 2014 per contract.
Henry Schein
The City of Grapevine, Texas entered into a rebate agreement with Henry Schein, Inc. on March 6,
2007, for the rebate of Sales Tax Receipts from the one percent (1%) sales and use tax under
Chapter 321 of the Texas Tax Code. The amount of the rebate is eighty seven and one half percent
(87.5%) of the sales tax receipts for the sale of taxable items at the Henry Schein facility in
Grapevine, TX. The rebate does not apply to the one half of one percent (.5 %) sales and use tax
imposed on behalf of the Grapevine 4B Economic Development Corporation and one half of one
percent(.5 %) sales and use tax imposed on behalf of the Grapevine Crime Control and Prevention
District. The initial term of the agreement began on April 1, 2007, and continues until the 10th
anniversary date of the commencement date. Thereafter, the term of this agreement shall be
automatically renewed for two (2) successive terms of ten (10)years each. Rebate amounts earned
by Henry Schein, Inc. totaled $1,101,627 as of September 30, 2013.
Grapevine Mills Mall
In 2012, the Tax Increment Financing District Reinvestment Zone Number One (TIF#1) Board
of Directors approved an Economic Development Agreement with Grapevine Mills LTD
Partnership in an amount not to exceed $14,000,000 for interior renovations ($10,000,000) and
future exterior improvements ($4,000,000) at Grapevine Mills Mall.
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11. RISK MANAGEMENT
The City of Grapevine is exposed to various risks of loss related to tort liability, theft of and damage
to property and destruction of assets; public officials' errors and omissions; bodily injury and
property damage; injury to employees and natural disasters. During fiscal year 1987, the City of
Grapevine established a risk management program to account for and finance its risk of loss. In
fiscal year 1991, the Risk Management program was expanded to include implementation of the
SIR (Self Insured Retention) plan. Under this plan, the City provided insurance protection for all
known exposures, including all third parry liability,law enforcement liability, public officials' errors
and omissions, and all bodily injury and property damage arising out of the City's operations on an
insured basis with various retentions up to $10,000 per occurrence. In addition, the City provides
protection for all its real property on a blanket building basis, including contents with agreed values
and replacement costs with $5,000 retention per occurrence. The City provides statutory workers'
compensation for all employees for bodily injury and indemnity loss of wages. The City provides
liability protection for all its commercial auto vehicles (fleet) on an insured basis up to $5,000 per
occurrence. The City also provides $10,000,000 excess umbrella liability over all liability
exposures. The City's loss experience has been very favorable with the experience modifier of.32
in the City's workers' compensation plan and similar loss ratios in the City's property and casualty
insurance fund. The City purchases commercial insurance for claims in excess of its retention
provided by the fund and for all other risks of loss. Risk management subrogates against third
parties that damage City property or create bodily injury to City staff. Settled claims have not
exceeded this commercial coverage in any of the past twenty fiscal years, nor has the City
experienced significant reductions in coverage. All funds of the City participate in the program and
make payments to the general fund based on actuarial estimates of the amounts needed to pay prior
and current year premiums and claims. All third party liability and property protection is provided
by A rated insurance carriers as defined by Best Key Rating Guide, A.M. Best Company. All
workers' compensation protection afforded the employees of the City of Grapevine is through the
Texas Municipal League Risk Retention Pool (TML Intergovernmental Risk Pool — Texas
Municipal League, 211 E. 7th Street, Austin, Texas 78701).
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:
2013 2012
Claims payable,beginning of year $ 602,218 $ 745,054
Current year claims and changes in estimates 6,070,309 5,977,450
Payments on claims ( 6,111,719) ( 6,120,286)
Claims payable at end of year $ 560,808 $ 602,218
54
12. WATER STORAGE RIGHTS
Water storage rights of$683,547 net of accumulated amortization of$553,953 , 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 7 years remains on
the contract.
13. 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.
14. DEFERRED CHARGES
Deferred charges consist of expenses incurred in connection with the issuance of certain
outstanding bonds. Such charges are amortized on a straight-line basis over the lives of the
respective bonds.
15. 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, which
expire in 2014 and 2023, respectively. 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.
Payments during 2013 for the purchase of treated water were $6,764,620 and payments made for
the transportation, treatment, and disposal of wastewater by TRA were $1,205,070. 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.
16. OTHER POSTEMPLOYMENT BENEFITS
Post-retirement Health Care Benefits
The City provides certain health care and life insurance benefits through a single-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
55
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. Currently, the City has 569 active employees and 148 retirees and beneficiaries eligible
to participate in the plan.
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 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. A supplement of $250 will be made available 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 $250 supplement if they have been on the
plan for one year prior to retirement.
Retirees are eligible for benefits immediately upon retirement. If the employee returns to work
for an employer that offers health coverage, the retiree cannot rejoin the City's health plan at a
later date.
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.
When the retiree or eligible dependent becomes Medicare eligible, the City medical plan will no
longer be available. Upon reaching Medicare eligibility retirees and their spouses may enroll in
the Senior Insurance Plan.
Annual OPEB Cost and Net OPEB Obligation
The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on
the annual required contribution of the employer (ARC), an amount actuarially determined in
accordance with the parameters of GASB Statement 45. The ARC represents a level of accrual
that is projected recognize the normal cost each year and to amortize any unfunded actuarial
liabilities (or funding excess) over a period not to exceed 30 years. The annual OPEB cost for the
fiscal year ending September 30, 2013, is as follows:
56
Annual Required Contribution(ARC) $ 4,103,952
Interest on Net OPEB Obligation 451,369
Adjustment to the ARC ( 418,189)
Annual OPEB Cost 4,137,132
Employer Contributions ( 1,129,984)
Increase (Decrease)in Net OPEB Obligation 3,007,148
Net OPEB Obligation/(Asset),beginning of year 10,030,428
Net Pension Obligation/(Asset),ending of year $ 13,037,576
Expenses for post-retirement health care benefits are recognized on a pay-as-you-go basis. In
addition to the employer contribution, the retirees paid $173,283 in the form of premiums which
funded current medical claims.
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and
the net OPEB obligation for fiscal year ending September 30, 2013 and the preceding two fiscal
years were as follows:
Annual Net
Fiscal Year OPEB Employer Percentage OPEB
Ended Cost Contribution Contributed Obligation
9/30/2011 $ 3,727,986 $ 744,873 20% $ 6,754,120
9/30/2012 3,849,319 573,011 15% 10,030,428
9/30/2013 4,137,132 1,129,984 27% 13,037,576
Funding Status and Funding Progress
Actuarial UAAL as a
Actuarial Actuarial Accrued Unfunded Percentage
Valuation Value of Liability (AAL) Funded Covered of Covered
Date Assets (AAL) (UAAL) Ratio Payroll Payroll
12/31/2012 - 41,596,928 41,596,928 - % 35,493,723 117.20%
The projection of future payments for an ongoing plan involves estimates of the value of
reported amounts and assumptions about the probability of occurrence of events far into the
future. Examples include assumptions about future employment, mortality, and the health care
cost trend. Amounts determined regarding the funded status of the plan and the annual required
contributions of the employer are subject to continual revision as actual results are compared
with past expectations and new estimates are made about the future.
57
Actuarial Methods and Assumptions
The Projected Unit Credit actuarial cost method is used to calculate the ARC for the City's
retiree health care plan. Using the plan benefits, the present health premiums and set of actuarial
assumptions, the anticipated future payments are projected. The projected unit credit method
then provides for a systematic recognition of the cost of these anticipated payments. The yearly
ARC is computed to cover the cost of benefits being earned by covered members as well as to
amortize a portion of the unfunded accrued liability.
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.
Significant methods and assumptions were as follows:
Actuarial Valuation Date 12/31/2012
Actuarial Cost Method Projected Unit Credit
Amortization Method Level as apercentage of payroll
Remaining Amortization Period 30 years;open
Asset Valuation Method Market Value
Actuarial Assumptions:
Inflation rate 3%per annum
Investment Rate of Return 4.5%,net of expenses
Payroll Growth Rate 3%per annum
General Inflation Rate 3%
Health Care Trend Initial rate of 7.5%declining to an ultimate
rate of 5%after 8 years
There is no separately issued audited benefit plan report available for the City's OPEB plan.
Actuarial valuations involve estimates of the value of reported amounts and assumptions about the
probability of events in the future. Amounts determined regarding the funded status and the annual
required contributions of the City's retiree health care plan are subject to continual revisions as
actual results are compared to past expectations and new estimates are made about the future. The
required schedule of funding progress presented as required supplementary information provides
multiyear trend information that shows whether the actuarial value of plan assets is increasing or
decreasing over time relative to the actuarial accrued liability for benefits.
58
17. SUBSEQUENT EVENTS
The Grapevine 4B Development Corporation is a blended component unit of the City of
Grapevine with a Board of Directors that includes both citizen and City Council members. On
December 30, 2013, the 4B Economic Development Corporation purchased approximately 185
acres of undeveloped land for $29,500,000 on the north side of Grapevine. The development
project is being partially financed by issuing 2014 4B Economic Development Bonds. The City
is currently working with consultants and staff to develop a market analysis feasibility study and
a land use plan that will provide future economic development for the City of Grapevine.
59
REQUIRED
SUPPLEMENTARY INFORMATION
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
GENERAL FUND
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30,2013
Budgeted Amounts
Variance with
Final Budget-
Positive
Original Final Actual (Negative)
REVENUES
Taxes $ 39,760,000 $ 39,760,000 $ 41,069,649 $ 1,309,649
Licenses and permits 1,203,568 1,203,568 1,247,508 43,940
Intergovernmental 75,221 75,221 95,394 20,173
Charges for services 3,193,960 3,193,960 3,622,168 428,208
Fines and forfeitures 2,166,030 2,166,030 2,210,213 44,183
Investment income 72,500 72,500 14,106 ( 58,394)
Miscellaneous 242,305 242,305 395,593 153,288
Total revenues 46,713,584 46,713,584 48,654,631 1,941,047
EXPENDITURES
Current:
General government 14,511,213 14,166,193 13,506,546 659,647
Public safety 12,959,679 12,676,074 12,530,520 145,554
Culture and recreation 8,618,619 9,220,339 9,034,959 185,380
Public works 5,468,564 5,488,877 5,367,768 121,109
Capital outlay 231,951 446,219 364,675 81,544
Debt service principal - 201,656 ( 201,656)
Total expenditures 41,790,026 41,997,702 41,006,124 991,578
EXCESS(DEFICIENCY)OF REVENUE
OVER(UNDER)EXPENDITURES 4,923,558 4,715,882 7,648,507 2,932,625
OTHER FINANCING SOURCES(USES)
Transfers in 3,005,661 3,005,661 2,801,083 ( 204,578)
Transfers out ( 8,705,650) ( 10,892,077) ( 10,892,077) -
Sale of capital assets 9,209 9,209
Total other financing sources(uses) ( 5,699,989) ( 7,886,416) ( 8,081,785) ( 195,369)
NET CHANGE IN FUND BALANCES ( 776,431) ( 3,170,534) ( 433,278) 2,737,256
FUND BALANCES,BEGINNING 12,394,958 12,394,958 12,394,958 -
FUND BALANCES,ENDING $ 11,618,527 $ 9,224,424 $ 11,961,680 $ 2,737,256
60
CITY OF GRAPEVINE, TEXAS
HOTEL OCCUPANCY TAX
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30,2013
Budgeted Amounts
Variance with
Final Budget-
Positive
Original Final Actual (Negative)
REVENUES
Taxes $ 12,429,231 $ 12,429,231 $ 12,772,218 $ 342,987
Charges for services 5,897,547 5,897,547 6,004,378 106,831
Investment income 25,000 25,000 10,820 ( 14,180)
Miscellaneous 218,600 218,600 131,708 ( 86,892)
Total revenues 18,570,378 18,570,378 18,919,124 348,746
EXPENDITURES
Current:
Culture and recreation 16,363,420 16,174,043 15,347,906 826,137
Capital outlay 44,000 44,000 8,976 35,024
Total expenditures 16,407,420 16,218,043 15,356,882 861,161
EXCESS(DEFICIENCY)OF REVENUE
OVER(UNDER)EXPENDITURES 2,162,958 2,352,335 3,562,242 1,209,907
OTHER FINANCING SOURCES(USES)
Transfers in 542,420 542,420 313,860 ( 228,560)
Transfers out ( 4,173,553) ( 4,586,042) ( 4,574,053) 11,989
Total other financing sources(uses) ( 3,631,133) ( 4,043,622) ( 4,260,193) ( 216,571)
NET CHANGE IN FUND BALANCES ( 1,468,175) ( 1,691,287) ( 697,951) 993,336
FUND BALANCES,BEGINNING 5,969,151 5,969,151 5,969,151 -
FUND BALANCES,ENDING $ 4,500,976 $ 4,277,864 $ 5,271,200 $ 993,336
61
CITY OF GRAPEVINE, TEXAS
CRIME DISTRICT
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30,2013
Budgeted Amounts
Variance with
Final Budget-
Positive
Original Final Actual (Negative)
REVENUES
Taxes $ 11,665,000 $ 11,665,000 $ 11,958,485 $ 293,485
Intergovernmental 14 14 14 -
Investment income 8,004 8,004 2,464 ( 5,540)
Miscellaneous - 1,966 1,966
Total revenues 11,673,018 11,673,018 11,962,929 289,911
EXPENDITURES
Current:
Public safety 13,177,249 13,152,658 12,978,121 174,537
Capital outlay 292,132 284,550 7,582
Total expenditures 13,177,249 13,444,790 13,262,671 182,119
EXCESS(DEFICIENCY)OF REVENUE
OVER(UNDER)EXPENDITURES ( 1,504,231) ( 1,771,772) ( 1,299,742) 472,030
OTHER FINANCING SOURCES(USES)
Transfers in 1,300,000 1,300,000 1,300,000 -
Transfers out - ( 1,500) ( 1,500)
Total other financing sources(uses) 1,300,000 1,298,500 1,298,500
NET CHANGE IN FUND BALANCES ( 204,231) ( 473,272) ( 1,242) 472,030
FUND BALANCES,BEGINNING 415,406 415,406 415,406 -
FUND BALANCES,ENDING $ 211,175 $( 57,866) $ 414,164 $ 472,030
62
CITY OF GRAPEVINE, TEXAS
4B-TRANSIT
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30,2013
Budgeted Amounts
Variance with
Final Budget-
Positive
Original Final Actual (Negative)
REVENUES
Sales taxes $ 8,906,250 $ 8,906,250 $ 8,715,679 $( 190,571)
Investment income 3,000 3,000 2,086 ( 914)
Total revenues 8,909,250 8,909,250 8,717,765 ( 191,485)
EXPENDITURES
Current:
Transportation 7,577,693 8,619,843 8,619,843 -
Total expenditures 7,577,693 8,619,843 8,619,843 -
EXCESS(DEFICIENCY)OF REVENUE
OVER(UNDER)EXPENDITURES 1,331,557 289,407 97,922 ( 191,485)
OTHER FINANCING SOURCES(USES)
Transfers in - - 244,460 244,460
Transfers out ( 527,379) ( 299,379) ( 298,819) 560
Total other financing sources(uses) ( 527,379) ( 299,379) ( 54,359) 245,020
NET CHANGE IN FUND BALANCE 804,178 ( 9,972) 43,563 53,535
FUND BALANCE,BEGINNING 368,831 368,831 368,831
FUND BALANCE,ENDING $ 1,173,009 $ 358,859 $ 412,394 $ 53,535
63
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CITY OF GRAPEVINE, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS FOR PARTICIPATION
IN TEXAS MUNICIPAL RETIREMENT SYSTEM
FOR THE YEAR ENDED SEPTEMBER 30,2013
Actuarial
Actuarial Accrued Unfunded UAAL as a
Actuarial Value of Liability Funded AAL Covered Percentage of
Valuation Assets (AAL) Ratio (UAAL) Payroll Covered Payroll
Date (a) (b) (a/b) (b-a) (c) (b-a)/(c)
12/31/2010 $ 131,269,476 $ 175,238,441 74.9% $ 43,968,965 $ 35,278,020 124.6%
12/31/2011 143,043,423 186,688,189 76.6% 43,644,766 34,504,224 126.5%
12/31/2012 156,289,479 198,037,309 78.9% 41,747,830 34,807,908 119.9%
64
CITY OF GRAPEVINE, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS
POST-RETIREMENT HEALTH CARE BENEFIT PLAN
FOR THE YEAR ENDED SEPTEMBER 30,2013
Actuarial
Actuarial Accrued Unfunded UAAL as a
Actuarial Value of Liability Funded AAL Covered Percentage of
Valuation Assets (AAL) Ratio (UAAL) Payroll Covered Payroll
Date (a) (b) (a/b) (b-a) (c) (b-a)/(c)
12/31/2008 $ $ 23,744,606 0.0% $ 23,744,606 $ 34,375,838 69.1%
12/31/2010 36,241,223 0.0% 36,241,223 35,278,020 102.7%
12/31/2012 41,596,928 0.0% 41,596,928 35,493,723 117.2%
65
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CITY OF GRAPEVINE, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
SEPTEMBER 30,2013
1. 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
(a Special Revenue Fund), the Crime District Fund (a Special Revenue Fund), the
4B — Transit Fund (a Special Revenue Fund), the Debt Service Fund and Enterprise
Funds. Budgetary control is maintained at the fund level.
(6) Budgets for the General, Hotel Occupancy Tax Special Revenue, Crime District
Special Revenue, 4B—Transit 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 (Special Revenue Fund), Crime
District Fund (Special Revenue Fund) and 4B—Transit Fund (Special Revenue
Fund). A comparison of budgetary data to actual results of operations for the Debt
Service Fund is presented as supplementary information.
66
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COMBINING AND INDIVIDUAL
STATEMENTS AND SCHEDULES
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, copier service and replacement, library and parks programs and policy in-service
training.
Storm Drainage Fund— to account for the services in the management and acquisition of capital for
storm water drainage utility projects in the City.
Lake Parks Fund— to account for revenues from the campgrounds at Lake Grapevine. Revenues are
restricted in accordance with Army Corp. of Engineer requirements and for debt covenant requirements
for bonds issued for campground construction.
4B Economic Development Fund—to account for the accumulation and expenditure of resources used
to stimulate the local economy, development, and redevelopment.
Grant Fund—is used to account for federal and state funded grants.
DEBT SERVICE FUND
Debt Fund—is used to account for the accumulation of resources for, and the payment of, general long-
term debt principal, interest and related costs.
The Tax Increment Financing (TIF) Number Two Debt Service Fund — established by ordinances
authorizing the issuance of Combination Tax and Tax Increment Reinvestment Zone Certificate of
Obligation Series 2000. A property tax is levied for the payment of the debt as it becomes due and is
currently payable in annual installments as it becomes due.
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.
The Tax Increment Financing (TIF) Number One Capital Projects Fund — established for the
financing, acquisition and construction of the infrastructure surrounding the Grapevine Mills Mall.
The Tax Increment Financing (TIF) Number Two Capital Projects Fund — established for the
financing, acquisition and construction of the infrastructure surrounding Gaylord Texas Resort and
Convention Center.
The 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 30,2013
Special Revenue
Special Storm
Revenue Drainage
ASSETS
Cash $ 2,735,815 $ 2,071,280
Receivables:
Accounts,net 16,997 148,624
Taxes - -
Accrued interest 366 233
Inventory
Due from other governments - -
Total assets $ 2,753,178 $ 2,220,137
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 14,612 $ 185,620
Accrued and other liabilities 791 10,430
Due to other funds - -
Deferred revenue
Developer deposits - -
Total liabilities 15,403 196,050
Fund balances:
Nonspendable:
Inventory - -
Restricted:
Debt service
Capital projects -
Public safety 674,951
Economic development -
Culture and recreation 40,537 -
Committed for:
Stormwater drainage operations - 2,024,087
Public arts 696,740 -
Assigned for:
Capital projects 648,775
Culture and recreation 676,772
Unassigned - -
Total fund balances 2,737,775 2,024,087
Total liabilities and fund balances $ 2,753,178 $ 2,220,137
67
Special Revenue Debt Service Capital Projects
Lake 4B-Economic
Parks Development Grant TIF#2 TIF#1 TIF#2
$ 4,483 $ 15,146,102 $ 60,266 $ 5,761,201 $ 2,585,776 $ 2,149,073
1,778 - - - - -
- 595,757 1,164,712
- 2,052 777 343
17,691 - - -
83,138 111,290 - - -
$ 107,090 $ 15,743,911 $ 171,556 $ 6,926,690 $ 2,586,119 $ 2,149,073
$ 104,071 $ 1,525 $ 22,057 $ $ 4,937 $
4,381 - - -
582,141 125,066 -
237,427 26,916 1,164,712
928,020 1,525 174,039 1,164,712 4,937
17,691 - - - -
- 5,761,978 - -
- 2,581,182 2,149,073
15,742,386
( 838,621) - ( 2,483) - - -
( 820,930) 15,742,386 ( 2,483) 5,761,978 2,581,182 2,149,073
$ 107,090 $ 15,743,911 $ 171,556 $ 6,926,690 $ 2,586,119 $ 2,149,073
68
CITY OF GRAPEVINE,TEXAS
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
(Continued)
SEPTEMBER 30,2013
Capital Projects
Street
Maintenance
and Capital
Streets Replacement
ASSETS
Cash $ 9,956,866 $ 1,871,736
Receivables:
Accounts,net - -
Taxes
Accrued interest 733 251
Inventory -
Due from other governments 225,042
Total assets $ 10,182,641 $ 1,871,987
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 165,555 $ 83,723
Accrued and other liabilities - -
Due to other funds -
Deferred revenue 225,042
Developer deposits 1,691,705 -
Total liabilities 2,082,302 83,723
Fund balances:
Nonspendable:
Inventory - -
Restricted:
Debt service - -
Capital projects 8,100,339 1,788,264
Public safety - -
Economic development
Culture and recreation
Committed for:
Stormwater drainage operations
Public arts
Assigned for:
Capital projects
Culture and recreation
Unassigned - -
Total fund balances 8,100,339 1,788,264
Total liabilities and fund balances $ 10,182,641 $ 1,871,987
69
Capital Projects
Total Other
Capital Quality Governmental
Acquisition of Life Funds
$ 6,673,784 $ 7,428,486 $ 56,444,868
3,965 24,000 195,364
- - 1,760,469
401 998 6,154
17,691
- - 419,470
$ 6,678,150 $ 7,453,484 $ 58,844,016
$ 477,664 $ 35,554 $ 1,095,318
1,742 - 17,344
- - 707,207
24,000 1,678,097
- - 1,691,705
479,406 59,554 5,189,671
- - 17,691
- 5,761,978
6,198,744 20,817,602
- 674,951
15,742,386
40,537
2,024,087
- 696,740
7,393,930 8,042,705
- 676,772
- - ( 841,104)
6,198,744 7,393,930 53,654,345
$ 6,678,150 $ 7,453,484 $ 58,844,016
70
CITY OF GRAPEVINE,TEXAS
COMBINING STATEMENT OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2013
Special Revenue
Special Storm
Revenue Drainage
REVENUES
Property taxes $ $
Sales taxes
Charges for services 276,777 1,395,399
Fines and forfeitures 47,789 -
Intergovernmental 22,340
Contributions 158,929 -
Investment income 4,974 2,193
Miscellaneous 3,240 -
Total revenues 514,049 1,397,592
EXPENDITURES
Current:
General government 207,155 -
Public safety 493
Culture and recreation 209,247 -
Public works 2,650 1,627,691
Economic development - -
Capital outlay 35,311 147,564
Debt service:
Principal - -
Interest
Other - -
Total expenditures 454,856 1,775,255
EXCESS(DEFICIENCY)OF REVENUE
OVER(UNDER)EXPENDITURES 59,193 ( 377,663)
OTHER FINANCING SOURCES(USES)
Transfers in 3,000 -
Transfers out ( 22,722) ( 777,656)
Sale of capital assets - -
Issuance of debt
Premium on issuance of bonds -
Total other financing sources(uses) ( 19,722) ( 777,656)
NET CHANGE IN FUND BALANCES 39,471 ( 1,155,319)
FUND BALANCES,BEGINNING 2,698,304 3,179,406
FUND BALANCES,ENDING $ 2,737,775 $ 2,024,087
71
Special Revenue Debt Service Capital Projects
Lake 4B-Economic
Parks Development Grant TIF#2 TIF#1 TIF#2
$ $ $ $ 3,636,534 $ $
- 3,574,738 -
1,987,193 -
16,476 968,653
- 15,564 7,876 3,574 2,038
36,871 - - - -
2,040,540 3,590,302 968,653 3,644,410 3,574 2,038
- 100,481
1,572,682 -
103,491 - 2,282,948 -
- 71,121 - 409,454
- 1,325,000 -
- 1,351,187 -
2,400 - - - 2,400
1,575,082 103,491 171,602 4,959,135 409,454 2,400
465,458 3,486,811 797,051 ( 1,314,725) ( 405,880) ( 362)
- - - 1,130,111 -
( 327,651) ( 272,548) -
( 327,651) ( 272,548) 1,130,111 -
137,807 3,214,263 797,051 ( 1,314,725) 724,231 ( 362)
( 958,737) 12,528,123 ( 799,534) 7,076,703 1,856,951 2,149,435
$( 820,930) $ 15,742,386 $( 2,483) $ 5,761,978 $ 2,581,182 $ 2,149,073
72
CITY OF GRAPEVINE,TEXAS
COMBINING STATEMENT OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
(Continued)
FOR THE YEAR ENDED SEPTEMBER 30,2013
Capital Projects
Street
Maintenance
and Capital
Streets Replacement
REVENUES
Property taxes $ $
Sales taxes
Charges for services
Fines and forfeitures
Intergovernmental 72,480
Contributions - -
Investment income 4,716 6,303
Miscellaneous 2,327 -
Total revenues 79,523 6,303
EXPENDITURES
Current:
General government
Public safety
Culture and recreation
Public works
Economic development - -
Capital outlay 379,399 2,710,767
Debt service:
Principal - -
Interest -
Other 2,842 -
Total expenditures 382,241 2,710,767
EXCESS(DEFICIENCY)OF REVENUE
OVER(UNDER)EXPENDITURES ( 302,718) ( 2,704,464)
OTHER FINANCING SOURCES(USES)
Transfers in 2,809,000
Transfers out -
Sale of capital assets
Issuance of debt
Premium on issuance of bonds -
Total other financing sources(uses) - 2,809,000
NET CHANGE IN FUND BALANCES ( 302,718) 104,536
FUND BALANCES,BEGINNING 8,403,057 1,683,728
FUND BALANCES,ENDING $ 8,100,339 $ 1,788,264
73
Capital Projects
Total Other
Capital Quality Governmental
Acquisition of Life Funds
$ $ $ 3,636,534
3,574,738
3,659,369
47,789
1,079,949
158,929
6,797 7,177 61,212
- - 42,438
6,797 7,177 12,260,958
- - 207,155
31,384 32,702 165,060
- 36,958 1,818,887
38,889 1,669,230
- - 2,386,439
4,881,353 5,482,707 14,117,676
- - 1,325,000
- 1,351,187
67,234 - 74,876
4,979,971 5,591,256 23,115,510
( 4,973,174) ( 5,584,079) ( 10,854,552)
2,618,650 3,000,000 9,560,761
- - ( 1,400,577)
194,912 194,912
5,190,000 5,190,000
56,669 - 56,669
8,060,231 3,000,000 13,601,765
3,087,057 ( 2,584,079) 2,747,213
3,111,687 9,978,009 50,907,132
$ 6,198,744 $ 7,393,930 $ 53,654,345
74
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE,TEXAS
DEBT SERVICE FUND
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30,2013
Budgeted Amounts
Variance with
Final Budget-
Positive
Original Final Actual (Negative)
REVENUES
Taxes $ 8,286,472 $ 8,286,472 $ 11,386,845 $ 3,100,373
Investment income 75,000 75,000 24,541 ( 50,459)
Total revenues 8,361,472 8,361,472 11,411,386 3,049,914
EXPENDITURES
Debt service:
Principal 8,288,352 7,905,512 7,905,514 ( 2)
Interest and fiscal charges 2,437,798 2,183,242 2,183,238 4
Other 7,000 104,934 88,956 15,978
Total expenditures 10,733,150 10,193,688 10,177,708 15,980
EXCESS(DEFICIENCY)OF REVENUE
OVER(UNDER)EXPENDITURES ( 2,371,678) ( 1,832,216) 1,233,678 3,065,894
OTHER FINANCING SOURCES(USES)
Transfers in 2,549,678 2,549,678 2,549,678 -
Issuance of debt - - 7,645,000 7,645,000
Premium on issuance of debt 272,555 272,555
Payment to bond refunding escrow agent - ( 8,260,523) ( 7,833,892) 426,631
Total other financing sources(uses) 2,549,678 ( 5,710,845) 2,633,341 8,344,186
NET CHANGE IN FUND BALANCE 178,000 ( 7,543,061) 3,867,019 11,410,080
FUND BALANCE,BEGINNING 12,252,396 12,252,396 12,252,396
FUND BALANCE,ENDING $ 12,430,396 $ 4,709,335 $ 16,119,415 $ 11,410,080
75
CITY OF GRAPEVINE,TEXAS
COMBINING STATEMENT OF CHANGES IN
ASSETS AND LIABILITIES
AGENCY FUNDS
YEAR ENDED SEPTEMBER 30,2013
Police Department Case Settlement
Balance Balance
10/01/12 Additions Deletions 09/30/13
Cash and cash equivalents $ 8,515 $ 4,339 $ - $ 12,854
Total assets $ 8,515 $ 4,339 $ - $ 12,854
Due to beneficiary $ 8,515 $ 4,339 $ - $ 12,854
Total liabilities $ 8,515 $ 4,339 $ - $ 12,854
Industrial Development Corporation
Balance Balance
10/01/12 Additions Deletions 09/30/13
Cash and cash equivalents $ 130,088 $ 148 $ - $ 130,236
Total assets $ 130,088 $ 148 $ - $ 130,236
Due to beneficiary $ 130,088 $ 148 $ - $ 130,236
Total liabilities $ 130,088 $ 148 $ - $ 130,236
W.D. Tate Scholarship
Balance Balance
10/01/12 Additions Deletions 09/30/13
Cash and cash equivalents $ 7,083 $ 4,298 $ - $ 11,381
Total assets $ 7,083 $ 4,298 $ - $ 11,381
Due to beneficiary $ 7,083 $ 4,298 $ - $ 11,381
Total liabilities $ 7,083 $ 4,298 $ - $ 11,381
76
CITY OF GRAPEVINE,TEXAS
COMBINING STATEMENT OF CHANGES IN
ASSETS AND LIABILITIES
AGENCY FUNDS
(Continued)
YEAR ENDED SEPTEMBER 30,2013
Total Agency Funds
Balance Balance
10/01/12 Additions Deletions 09/30/13
Cash and cash equivalents $ 145,686 $ 8,785 $ - $ 154,471
Total assets $ 145,686 $ 8,785 $ - $ 154,471
Due to beneficiary $ 145,686 $ 8,785 $ - $ 154,471
Total liabilities $ 145,686 $ 8,785 $ - $ 154,471
77
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STATISTICAL SECTION
THIS PAGE LEFT BLANK INTENTIONALLY
STATISTICAL SECTION
This part of the City of Grapevine, Texas' comprehensive annual financial report presents
detailed information as a context for understanding what the information in the financial
statements, note disclosures, and required supplementary information says about the
City's overall financial health.
Contents
Page
Financial Trends 78 - 89
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 90 -95
These schedules contain information to help the reader assess the
City's most significant local revenue sources. Sales tax became the
most significant revenue source in FY 2007. 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 96- 101
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 102- 103
These schedules offer demographic and economic indicators to help
the reader understand the environment within which the City's
financial activities take place.
Operating Information 104 - 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)
Fiscal Year
2004 2005 2006 2007
Governmental activities:
Net investment in capital assets $ 8,757 $ 16,729 $ 21,862 $ 28,660
Restricted 14,106 14,625 21,049 32,626
Unrestricted 9,607 12,957 16,653 18,198
Total governmental activities net position $ 32,470 $ 44,311 $ 59,564 $ 79,484
Business-type activities:
Net investment in capital assets $ 57,643 $ 60,931 $ 63,936 $ 65,750
Restricted 5,312 6,421 6,784 7,228
Unrestricted 11,374 10,407 13,012 14,382
Total business-type activities net position $ 74,329 $ 77,759 $ 83,732 $ 87,360
Primary government:
Net investment in capital assets $ 66,400 $ 77,660 $ 85,798 $ 94,410
Restricted 19,418 21,046 27,833 39,854
Unrestricted 20,981 23,364 29,665 32,580
Total primary government net position $ 106,799 $ 122,070 $ 143,296 $ 166,844
Source: Comprehensive Annual Financial Reports
78
TABLE 1
Fiscal Year
2008 2009 2010 2011 2012 2013
$ 39,332 $ 57,264 $ 73,702 $ 84,069 $ 88,342 $ 98,171
34,200 40,419 55,622 61,712 71,909 78,377
29,360 25,626 13,109 10,421 14,469 12,470
$ 102,892 $ 123,309 $ 142,433 $ 156,202 $ 174,720 $ 189,018
$ 68,641 $ 68,785 $ 70,055 $ 70,771 $ 70,171 $ 74,750
7,365 7,097 6,732 7,133 8,969 8,032
13,790 14,238 11,924 11,240 10,530 6,912
$ 89,796 $ 90,120 $ 88,711 $ 89,144 $ 89,670 $ 89,694
$ 107,973 $ 126,049 $ 143,757 $ 154,840 $ 158,513 $ 172,921
41,565 47,516 62,354 68,845 80,878 86,409
43,150 39,864 25,033 21,661 24,999 19,382
$ 192,688 $ 213,429 $ 231,144 $ 245,346 $ 264,390 $ 278,712
79
CITY OF GRAPEVINE, TEXAS
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(Unaudited)(Amounts Expressed in Thousands)
Fiscal Year
2004 2005 2006 2007
EXPENSES
Governmental activities:
General government S 12,382 S 14,564 S 13,964 $ 19,150
Public safety 17,598 19,094 19,174 20,732
Culture and recreation 16,090 17,055 19,978 21,914
Public works 10,363 9,077 9,502 12,777
Transportation - - - -
Economic development - - - -
Interest on long-term debt 7,683 5,993 6,579 6,634
Total governmental activities expenses 64,116 65,783 69,197 81,207
Business-type activities:
Water and sewer 15,049 14,975 15,944 15,494
Lake Enterprise 2,842 2,673 2,664 2,668
Total business-type activities expenses 17,891 17,648 18,608 18,162
Total primary government expenses $ 82,007 S 83,431 S 87,805 $ 99,369
PROGRAM REVENUES
Governmental activities:
Fees,fines,and charges for services:
General government $ 4,298 S 1,362 S 1,148 $ 3,535
Public safety 2,260 2,029 3,282 3,280
Culture and recreation 5,362 5,369 6,306 6,908
Public works 1,346 2,877 2,782 3,085
Operating grants and contributions 1,813 1,944 805 2,310
Capital grants and contributions 597 2,732 3,759 785
Total governmental activities program revenues 15,676 16,313 18,082 19,903
Business-type activities:
Charges for services:
Water and sewer 16,595 17,929 20,348 17,689
Lake Enterprise 2,500 2,630 2,890 2,712
Capital grants and contributions 1,172 1,049 1,690 833
Total business-type activities program revenues 20,267 21,608 24,928 21,234
Total primary government program revenues S 35,943 S 37,921 S 43,010 $ 41,137
80
TABLE 2
Fiscal Year
2008 2009 2010 2011 2012 2013
$ 17,898 $ 19,245 $ 19,048 $ 22,526 $ 18,370 $ 18,602
23,701 26,031 27,095 27,588 28,264 28,309
26,753 25,657 27,175 26,673 27,954 29,578
18,573 18,670 19,136 10,563 11,056 12,216
- - - 7,901 7,789 8,620
- - - 3,394 4,040 3,609
6,403 5,093 5,432 5,140 4,590 4,095
93,328 94,696 97,886 103,785 102,063 105,029
17,415 17,160 17,647 18,972 18,372 18,807
2,786 2,885 2,955 3,062 3,053 3,156
20,201 20,045 20,602 22,034 21,425 21,963
$ 113,529 $ 114,741 $ 118,488 $ 125,819 $ 123,488 $ 126,992
$ 4,071 $ 3,771 $ 4,039 $ 4,250 $ 2,547 $ 2,013
3,597 3,759 3,660 3,346 3,736 3,971
7,479 7,829 8,530 9,198 10,099 10,012
1,372 1,344 1,467 1,378 1,418 1,486
1,629 957 1,060 1,212 1,124 526
1,891 5,204 3,819 1,302 810 108
20,039 22,864 22,575 20,686 19,734 18,116
18,893 17,950 18,523 21,168 20,481 20,185
2,862 2,649 2,377 2,862 3,079 3,120
1,331 674 274 - - -
23,086 21,273 21,174 24,030 23,560 23,305
$ 43,125 $ 44,137 $ 43,749 $ 44,716 $ 43,294 $ 41,421
81
CITY OF GRAPEVINE, TEXAS
CHANGES IN NET POSITION
(Continued)
LAST TEN FISCAL YEARS
(Unaudited)(Amounts Expressed in Thousands)
Fiscal Year
2004 2005 2006 2007
NET(EXPENSE)REVENUES
Governmental activities $( 48,440) $( 49,470) $( 51,115) $( 61,304)
Business-type activities 2,376 3,960 6,320 3,072
Total primary government net expense ( 46,064) ( 45,510) ( 44,795) ( 58,232)
GENERAL REVENUES AND OTHER CHANGES IN NET POSITION
Governmental activities:
Taxes
Property 23,600 26,066 26,046 27,066
Franchise 5,211 5,369 5,945 6,191
Hotel occupancy 4,931 7,566 9,194 10,126
Sales 17,976 18,746 19,993 31,827
Mixed beverage 686 863 952 1,128
Investment earnings 620 1,099 2,187 3,257
Miscellaneous 29 101 310 124
Gain on sale of capital assets - - -
Transfers - 1,501 1,741 1,505
Total governmental activities 53,053 61,311 66,368 81,224
Business-type activities:
Investment earnings 397 648 1,035 1,437
Miscellaneous 696 323 359 624
Transfers - ( 1,501) ( 1,741) ( 1,505)
Total business-type activities 1,093 ( 530) ( 347) 556
Total primary government 54,146 60,781 66,021 81,780
CHANGE IN NET POSITION
Governmental activities 4,613 11,841 15,253 19,920
Business-type activities 3,469 3,430 5,973 3,628
Total primary government $ 8,082 $ 15,271 $ 21,226 $ 23,548
Notes:
In April 2007,the City increased sales tax local option from 1%to 2%resulting in additional sales tax revenues of
$10,614 in FY 2007.
For FY 2008,the City had$11,561 in additional sales tax revenues due to the increase in the sales tax local option
from 1%to 2%. This was the first year to have 12 months(annual)with this increase.
Source: Comprehensive Annual Financial Reports
82
TABLE 2
Fiscal Year
2008 2009 2010 2011 2012 2013
$( 73,289) $( 71,832) $( 75,311) $( 83,099) $( 82,329) $( 86,913)
2,885 1,228 572 1,996 2,135 1,342
( 70,404) ( 70,604) ( 74,739) ( 81,103) ( 80,194) ( 85,571)
27,974 30,385 33,092 29,559 32,048 29,979
6,295 6,319 6,133 6,401 6,356 6,618
11,842 10,498 10,725 12,105 12,327 12,772
45,098 40,712 42,000 45,572 46,932 49,047
1,295 1,188 1,226 1,223 1,051 1,159
2,520 1,213 426 338 286 159
- 36 - - 170 6
- 31 119 33 - -
1,673 1,867 2,064 1,638 1,677 1,471
96,697 92,249 95,785 96,869 100,847 101,211
1,046 401 83 75 68 152
178 562 - 170 - -
( 1,673) ( 1,867) ( 2,064) ( 1,638) ( 1,677) ( 1,471)
( 449) ( 904) ( 1,981) ( 1,393) ( 1,609) ( 1,319)
96,248 91,345 93,804 95,476 99,238 99,892
23,408 20,417 20,474 13,770 18,518 14,298
2,436 324 ( 1,409) 432 526 23
$ 25,844 $ 20,741 $ 19,065 $ 14,202 $ 19,044 $ 14,321
83
CITY OF GRAPEVINE, TEXAS
FUND BALANCES
GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Unaudited)(Amounts Expressed in Thousands)
Fiscal Year
2004 2005 2006 2007
General fund
Reserved* $ 1,543 $ 1,290 $ 691 $ 667
Unreserved 3,018 3,981 5,904 7,562
Nonspendable* - - - -
Unassigned - - - -
Total general fund $ 4,561 $ 5,271 $ 6,595 $ 8,229
All other governmental funds
Reserved for:
Prepayments $ 402 $ 392 $ 64 $ 76
Inventory - - - 2
Debt service 11,716 15,478 21,906 26,778
Capital projects 19,763 14,810 20,983 284
Unreserved,reported in:
Special revenue 482 1,724 4,071 7,289
Capital projects 4,509 4,391 4,484 28,753
Nonspendable:
Inventories - - - -
Prepaid items - - - -
Restricted for:
Debt service - - - -
Capital projects - - - -
Public safety - - - -
Economic development - - - -
Transportation - - - -
Culture and recreation - - - -
Tourism - - - -
Committed for:
Stormwater drainage operations - - - -
Public arts - - - -
Assigned for:
Capital projects - - - -
Culture and recreation - - - -
Unassigned - - - -
Total all other governmental funds $ 36,872 $ 36,795 $ 51,508 $ 63,182
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
84
TABLE 3
Fiscal Year
2008 2009 2010 2011 2012 2013
$ 727 $ 632 $ 714 -
8,190 8,105 7,468 - - -
- - - 657 653 659
- - - 8,938 11,742 11,303
$ 8,917 $ 8,737 $ 8,182 $ 9,595 $ 12,395 $ 11,962
$ 91 $ 583 $ 118
29,863 31,784 40,700 - - -
6,249 20,566 16,861 - - -
10,002 9,238 11,347 - - -
24,982 18,631 20,426 - - -
- - - 15 18 18
- - - 42 14 4
- - - 26,713 28,858 29,051
- - - 19,863 17,655 90,741
- - - 836 1,078 1,088
- - - 28,985 35,493 41,198
- - - 345 369 412
- - - 264 152 41
- - - 4,605 5,954 5,268
- - - 3,005 3,179 2,024
- - - 453 600 697
- - - 9,322 10,627 8,043
- - - 841 635 677
- - - ( 1,822) ( 1,777) ( 841)
$ 71,187 $ 80,802 $ 89,452 $ 93,467 $ 102,855 $ 178,421
85
CITY OF GRAPEVINE, TEXAS
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Unaudited)(Amounts Expressed in Thousands)
Fiscal Year
2004 2005 2006 2007
REVENUES
Taxes:
Property $ 23,584 $ 25,607 $ 26,296 $ 26,913
Hotel occupancy 4,931 7,566 9,194 10,126
Sales 17,976 18,746 19,993 31,826
Mixed beverage 686 863 952 1,128
Franchise 5,211 5,369 5,945 6,191
Licenses and permits 1,264 1,530 1,550 1,776
Intergovernmental 951 1,945 1,042 931
Charges for services 11,019 9,839 11,209 12,987
Fines and forfeitures 1,961 1,713 1,860 1,607
Contributions 488 418 423 393
Interest and miscellaneous 1,853 2,156 4,895 4,354
Total revenues 69,924 75,752 83,359 98,232
EXPENDITURES
General government 12,897 14,379 14,355 15,345
Public safety 16,168 17,187 17,527 19,047
Culture and recreation 14,541 15,071 17,015 19,470
Public works 5,101 4,945 4,840 4,514
Operations 3,677 2,954 2,262 6,552
Transportation - - - -
Economic development - - - -
Capital outlay 10,612 8,425 8,235 8,290
Debt service:
Principal 9,011 8,698 8,165 9,667
Interest and fiscal charges 7,532 6,053 6,575 6,599
Other 819 2,918 1,451 2,557
Total expenditures 80,358 80,630 80,425 92,041
86
TABLE 4
Fiscal Year
2008 2009 2010 2011 2012 2013
$ 27,945 $ 29,454 $ 34,225 $ 29,930 $ 32,147 $ 28,326
11,842 10,498 10,725 12,105 12,326 12,772
45,098 40,712 42,000 45,572 46,932 49,047
1,295 1,188 1,226 1,223 1,051 1,159
6,295 6,319 6,133 6,401 6,356 6,618
1,227 1,087 1,117 1,044 1,542 1,248
673 3,000 4,525 1,505 1,012 1,175
12,489 12,893 13,296 14,582 13,572 13,286
2,197 2,208 2,126 1,712 2,017 2,258
391 556 8 73 194 162
4,354 2,108 2,407 1,741 1,192 731
113,806 110,023 117,788 115,888 118,341 116,782
15,024 15,435 16,367 17,681 13,979 13,714
20,589 21,582 22,275 24,297 25,539 25,674
21,982 21,714 22,677 23,495 24,832 26,202
4,674 4,922 5,049 5,821 6,061 7,037
14,168 13,485 13,819 - - -
- - - 7,901 7,789 8,620
- - - 3,405 4,543 3,609
10,295 18,695 15,051 13,076 9,446 17,011
11,492 11,880 12,096 12,328 11,164 11,462
6,370 5,304 5,547 5,029 4,564 3,864
2,527 2,535 1,050 30 25 394
107,121 115,552 113,931 113,063 107,942 117,587
87
CITY OF GRAPEVINE, TEXAS
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
(Continued)
LAST TEN FISCAL YEARS
(Unaudited)(Amounts Expressed in Thousands)
Fiscal Year
2004 2005 2006 2007
EXCESS (DEFICIENCY) OF REVENUES
OVER(UNDER)EXPENDITURES $( 10,434) $( 4,878) $ 2,934 $ 6,191
OTHER FINANCING SOURCES (USES)
Bonds issued - 46,245 - 5,610
Notes payable issued - - 11,385 -
Premium on issuance of debt - 2,114 6 2
Bond discount - - ( 29) -
Payments to escrow agent - - - -
Sale of capital assets - ( 44,349) - -
Transfers in 2,248 7,037 4,084 7,757
Transfers out ( 2,248) ( 5,536) ( 2,343) ( 6,252)
Total other financing sources(uses) - 5,511 13,103 7,117
NET CHANGE IN FUND BALANCES $ 1( 0,434) $ 633 $ 16,037 $ 13,308
DEBT SERVICE AS A PERCENTAGE OF
NONCAPITAL EXPENDITURES 23.7% 20.4% 20.4% 19.4%
Source: Comprehensive Annual Financial Reports
88
TABLE 4
Fiscal Year
2008 2009 2010 2011 2012 2013
$ 6,685 $( 5,529) $ 3,857 $ 2,825 $ 10,399 $( 805)
260 45,825 8,565 500 - 78,640
- - - 309 - -
- 2,184 344 - - 3,455
76 ( 34,944) ( 6,954) - - ( 7,834)
- 32 219 155 112 204
16,531 17,415 14,510 17,593 15,244 19,768
( 14,859) ( 15,548) ( 12,446) ( 15,955) ( 13,568) ( 18,297)
2,008 14,964 4,238 2,602 1,788 75,936
$ 8,693 $ 9,435 $ 8,095 $ 5,427 $ 12,187 $ 75,131
18.4% 20.4% 17.8% 16.8% 15.7% 14.7%
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TABLE 6
CITY OF GRAPEVINE, TEXAS
DIRECT AND OVERLAPPING SALES TAX RATES
LAST TEN FISCAL YEARS
City State
Fiscal Year Direct Rate of Texas
2004 1.00% 6.25%
2005 1.00% 6.25%
2006 1.00% 6.25%
10/01/06 -03/31/07 1.00% 6.25%
04/01/07-9/30/07 2.00% 6.25%
2008 2.00% 6.25%
2009 2.00% 6.25%
2010 2.00% 6.25%
2011 2.00% 6.25%
2012 2.00% 6.25%
2013 2.00% 6.25%
Source: City Budget Office and Texas Comptroller
91
TABLE 7
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 Less: Total Taxable Total
Fiscal Real Property Personal Tax-Exempt Assessed Direct
Year Property Property Property Value Tax Rate
2004 $ 6,204,000 $ 2,248,000 $ 3,572,000 $ 4,880,000 $ 0.3660
2005 6,461,000 2,391,000 3,625,000 5,227,000 0.3635
2006 6,647,000 2,224,000 3,514,000 5,357,000 0.3625
2007 7,026,000 2,068,000 3,684,740 5,409,260 0.3625
2008 7,316,619 2,294,141 3,753,870 5,856,890 0.3625
2009 7,011,568 2,257,318 3,314,798 5,954,088 0.3500
2010 7,339,403 2,446,105 3,588,781 6,196,727 0.3500
2011 7,320,478 2,309,223 3,765,059 5,864,642 0.3500
2012 7,111,827 2,005,549 3,205,119 5,912,257 0.3480
2013 7,373,725 2,169,614 3,311,568 6,231,771 0.3457
Source: Tarrant County Appraisal District,Dallas and Denton County Appraisal Districts
92
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TABLE 9
CITY OF GRAPEVINE, TEXAS
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
(Unaudited)(Amounts Expressed in Thousands)
2013 2004
Percentage Percentage
of Total City of Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Value Taxpayer Value Value
Gaylord Texan Resort $ 285,854 4.59% American Airlines,Inc. $ 313,758 6.43%
and Convention Center Grapevine Mills,Ltd.Partnership 185,084 3.79%
American Airlines,Inc. 237,140 3.81% Delta Airlines 151,545 3.11%
Grapevine Mills,Ltd.Partnership 215,200 3.64% Verizon Directory/GTE 149,230 3.06%
Great Wolf Lodge 124,000 1.99% Gaylord Texan Resort 113,083 2.32%
CAE Simuflite/Simuflite Training Unit 100,387 1.61% and Convention Center
Fund Riverwalk LLC 65,506 1.05% CAE Simuflite 88,526 1.81%
Rackspace US Inc. 58,199 0.93% GE Capital Corp. 57,845 1.19%
Oncor Electric Delivery Co.,LLC. 50,072 0.80% Quest Communications Corp. 42,721 0.88%
A&B Properties 49,931 0.80% Oncor Electric Delivery Co.,LLC. 40,395 0.83%
Silver Oaks,LP 46,977 0.75% United Parcel Services 40,357 0.83%
Total $ 1,233,266 19.97% Total $ 1,182,544 24.25%
Source: Tarrant County Appraisal District(2013)
Grapevine CAFR(2004)
94
TABLE 10
CITY OF GRAPEVINE, TEXAS
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(Unaudited)(Amounts Expressed in Thousands)
Collected Within the
Fiscal Year of the Levy Delinquent Taxes Total Collections to Date
Fiscal Taxes Levied Percentage Collections
Year for the of Levy in Subsequent Percentage Percentage
Ended Fiscal Year Amount Collected Years Amount of Levy Amount of Levy
2004 $ 18,044 $ 17,859 98.97% $ 132 $ 1,020 5.7% $ 17,991 99.7%
2005 19,223 18,764 97.61% 177 808 4.2% 18,941 98.5%
2006 19,182 18,945 98.76% 110 829 4.3% 19,055 99.3%
2007 19,572 19,368 98.96% 201 876 4.5% 19,569 99.9%
2008 21,113 20,964 99.29% 154 891 4.2% 21,118 99.9%
2009 22,250 21,936 98.59% 115 925 4.2% 22,051 99.1%
2010 22,208 21,958 98.87% 141 973 4.4% 22,099 99.5%
2011 21,114 20,954 99.24% 124 160 0.8% 21,078 99.8%
2012 21,321 21,211 99.48% 84 110 0.5% 21,295 99.9%
2013 21,468 21,364 99.52% - 184 0.9% 21,364 99.5%
Source: Grapevine/Colleyville ISD Tax Assessor
95
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TABLE 12
CITY OF GRAPEVINE, TEXAS
RATIOS OF NET GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
(Unaudited)(Amounts Expressed in Thousands except
Percentage of Actual Taxable Value of Property and Per Capita)
Business-type
Governmental Activities Activities
(a) Percentage of
General Certificates General Gross Actual
Fiscal Obligation of Obligation Bonded Taxable Value Per
Year Bonds Obligation Total Bonds Debt of Property a Capita b
2004 $ 72,140 S 69,735 S 141,875 S S 141,875 2.71% S 3,019
2005 71,775 67,055 138,830 138,830 2.84% 2,892
2006 71,755 70,600 142,355 - 142,355 2.72% 2,905
2007 66,275 68,905 135,180 6,820 142,000 2.49% 2,898
2008 60,690 63,675 124,365 6,685 131,050 2.12% 2,621
2009 54,315 65,960 120,275 12,540 132,815 2.02% 2,656
2010 51,290 59,870 111,160 15,305 126,465 1.79% 2,529
2011 45,335 55,473 100,808 15,135 115,943 1.72% 2,467
2012 40,355 50,794 91,149 9,895 101,044 1.71% 2,109
2013 106,019 45,861 151,880 10,962 162,842 2.61% 3,323
Note: Details regarding the City's outstanding debt can be found in notes to the financial statements.
a See Table 5 for property value data.
b See Table 19 for population data.
97
TABLE 13
CITY OF GRAPEVINE, TEXAS
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF SEPTEMBER 30,2013
(Unaudited) (Amounts Expressed in Whole Numbers)
Estimated
Share of
Estimated Direct and
Debt Percentage Overlapping
Government Unit Outstanding Applicable Debt
Debt Repaid with Property Taxes:
Carroll Independent School District $ 235,203,792 6.07% $ 14,276,870
Coppell Independent School District 174,797,888 2.09% 3,653,276
Dallas County 136,430,000 0.11% 150,073
Dallas County Community College District 355,880,000 0.11% 391,468
Dallas County Hospital District 705,000,000 0.11% 775,500
Dallas County Schools 67,675,000 0.11% 74,443
Denton County 596,245,000 - % * -
Grapevine-Colleyville Independent School District 345,235,467 61.81% 213,390,042
Northwest Independent School District 626,683,840 0.10% 626,684
Tarrant County 336,635,000 6.08% 20,467,408
Tarrant County College District 15,485,000 6.08% 941,488
Tarrant County Hospital District 25,375,001 6.08% 1,542,800
Subtotal overlapping debt 256,290,052
Total direct-City of Grapevine 159,122,254 100.00% 159,122,254
Direct and Overlapping Debt $ 415,412,306
*Less than.O1%
The percentage of overlapping debt applicable is estimated using taxable assessed property values.
Source: Municipal Advisory Council of Texas
98
TABLE 14
CITY OF GRAPEVINE, TEXAS
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.
99
TABLE 15
CITY OF GRAPEVINE, TEXAS
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
(Unaudited)(Amounts Expressed in Thousands,except for Coverage)
Tax Increment Financing District Reinvestment Zone Number One
Less: Net Principal
Fiscal Total Operating Available and Interest
Year Revenues' Expenses e Revenue Payments Coverage
2004 $ 4,766 $ 200 $ 4,566 $ 2,478 $ 1.84
2005 4,788 1 4,787 2,470 1.94
2006 4,960 1 4,959 2,470 2.01
2007 5,350 5 5,345 2,482 2.15
2008 5,076 1 5,075 2,498 2.03
2009 5,274 3,087 2,187 2,240 0.98
2010 7,991 1 7,990 2,313 3.45
2011 5,955 1,671 4,284 2,328 1.84
2012 6,696 2,440 4,256 2,344 1.82
2013 4,808 2,352 2,456 2,360 1.04
Notes: a Includes tax revenues only
b Includes transfers out.
Source: Grapevine Tax Increment Financing District Reinvestment Zone Number One Basic Financial Statements
100
TABLE 16
CITY OF GRAPEVINE, TEXAS
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
(Unaudited)(Amounts Expressed in Thousands,except for Coverage)
Tax Increment Financing District Reinvestment Zone Number Two
Less: Net Principal
Fiscal Total Operating Available and Interest
Year Revenues' Expenses e Revenue Payments Coverage
2004 $ 1,953 $ - $ 1,953 $ 1,883 $ 1.04
2005 3,401 1,560 1,841 1,719 1.07
2006 4,056 - 4,056 1,686 2.41
2007 3,574 1,539 2,035 1,686 1.21
2008 3,392 1,536 1,856 2,691 0.69
2009 3,638 1,591 2,047 2,686 0.76
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
Notes: a Includes tax revenues only
b Includes transfers out.
Source: Grapevine Tax Increment Financing District Reinvestment Zone Number Two Basic Financial Statements
101
TABLE 17
CITY OF GRAPEVINE, TEXAS
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
(Unaudited)(Amounts Expressed in Thousands except for
Median Age and Unemployment Rate)
(1)
(1) Personal (1) (2) (3)
Calendar Estimated Personal Income Median School Unemployment
Year Population Income Per Capita Age Enrollment Rate
2004 47 $ 1,692 $ 36 34 14 2.8%
2005 48 1,776 37 34 14 3.5%
2006 49 1,813 37 34 13 3.5%
2007 49 1,764 36 34 14 3.5%
2008 50 1,800 36 36 14 4.2%
2009 50 1,800 36 36 14 6.6%
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%
Sources: (1) CLARITAS Report
(2) Grapevine/Colleyville ISD
(3) Texas Workforce Commission Website
102
TABLE 18
CITY OF GRAPEVINE, TEXAS
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
(Unaudited)(Amounts Expressed in Thousands except for
Percentage of Total City Employment)
2013 2004
Percentage of Percentage of
of Total City of Total City
Employer Employees Employment (1) Employer Employees Employment
DFW International Airport 60.0 57.14% DFW International Airport 16.0 33.00%
Gaylord Texan Resort and o 0
Convention Center 2.0 1.90/o Grapevine/Colleyville ISD 2.0 4.00/o
United Parcel Service 2.0 1.90% United Parcel Service 2.0 4.00%
GameStop 2.0 1.90% GTE Directory Corporation 1.0 2.00%
Grapevine/Colleyville ISD 1.8 1.71% Baylor Medical Center 1.0 2.00%
Baylor Medical Center 1.0 0.95% Gamestop 1.0 2.00%
Great Wolf Lodge 0.6 0.57% City of Grapevine 0.5 0.50%
City of Grapevine 0.6 0.57% DFW Hilton Hotel 0.5 0.50%
Pavestone Mfg 0.4 0.38% SimuFlite Training Int'l. 0.5 0.50%
Wal-Mart/Sam's(250-500) 0.3 0.29% Apollo Paper 0.5 0.50%
70.7 67.31% 25.0 49.00%
Sources: City of Grapevine,Neilsen/Claritas Business Facts,Info.USA
(1) Per Neilsen/Claritas there are 104,761 total employees in the City(including 60,000 at DFW Airport)as of 2013.
103
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INTERNAL CONTROL AND
COMPLIANCE SECTION
THIS PAGE LEFT BLANK INTENTIONALLY
llrkKi
PATTILLO, BROWN & HILL, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
INDEPENDENT AUDITORS' 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 A UDITING STANDARDS
To the 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, 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, 2013, 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 18, 2014.
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.
107
401 WEST HIGHWAY 6■P.O.BOX 20725■WACO,TX 76702-0725■(254)772-49010 FAX:(254)772-4920■www.pbhcpa.com
AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■HILLSBORO,TX(254)582-2583
TEMPLE,TX(254)791-3460■ALBUQUERQUE,NM(505)266-5904
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.
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.
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.
L L-P
Waco, Texas
March 18, 2014
108
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, 2013
(With Independent Auditors' Report)
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 30,2013
Page
Number
Independent Auditors' Report....................................................................................... 1 —2
Management's Discussion and Analysis ...................................................................... 3 —6
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position ...................................................................................... 7
Statement of 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 - 16
THIS PAGE LEFT BLANK INTENTIONALLY
MKI
PATTILLO, BROWN & HILL, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
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 One (the "TIF 41," a
component unit of the City of Grapevine, Texas), as of and for the year ended September 30, 2013, and the
related notes to the financial statements, which collectively comprise the TIF 91'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. 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 opinion.
1
401 WEST HIGHWAY 6■P.O.BOX 20725■WACO,TX 76702-0725■(254)772-4901 ■FAX:(254)772-4920■www.pbhcpa.com
AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■HILLSBORO,TX(254)582-2583
TEMPLE,TX(254)791-3460■ALBUQUERQUE,NM(505)266-5904
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 the TIF 91, as of
September 30, 2013, 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 on pages 3-6 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.
Po"4 Rat L L-?.
Waco, Texas
March 18, 2014
2
MANAGEMENT'S
DISCUSSION AND ANALYSIS
3
THIS PAGE LEFT BLANK INTENTIONALLY
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 (the "TIF") financial statements this
narrative overview and analysis of the financial activities of the TIF for the fiscal year ended September
30, 2013. The TIF 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 the TIF exceeded its liabilities at the close of the fiscal year ended
September 30, 2013, by $29,236,184 (net position).
• At the end of the current fiscal year, the governmental funds reported an ending fund
balance of$35,205,747, an increase of 2%in comparison with the prior year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis serves as an introduction to the TIF's basic financial statements. The TIF'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 the
TIF's finances in a manner similar to private-sector business.
The Statement of Net Position presents information on all of the TIF's assets and liabilities, with the
difference between the two 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 TIF is improving or deteriorating.
The Statement of Activities presents information showing how the TIF'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. The TIF uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements. The fund financial statements include two funds: (1)
the General Fund, which is used to account for principal and interest payments and economic development
activities, and(2)the Capital Projects Fund, which is used to account for the cost of public improvements.
3
• 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.
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.
The TIF does not have any proprietary or fiduciary funds.
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
beginning on page 11 of this report.
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, 2013, the TIF's net position was $29,236,184.
The following table reflects the condensed Statement of Net Position:
CITY OF GRAPEVINE TAX INCREMENT FINANCING
DISTRICT REINVESTMENT ZONE NUMBER ONE'S NET POSITION
Governmental Activities
2013 2012
Current and other assets $ 36,941,202 $ 34,488,837
Total assets 36,941,202 34,488,837
Long-term liabilities 7,080,892 9,237,605
Other liabilities 624,126 42,327
Total liabilities 7,705,018 9,279,932
Net position:
Restricted 29,236,184 25,208,905
Total net position $ 29,236,184 $ 25,208,905
4
Analysis of the TIF's Operations
Government activities increased the TIF's net position by $4,027,279. There were community
distributions from the TIF#I fund and capital expenses were incurred for the development and design of
the Links Trail project that extends from the Gaylord Trail to the Grapevine Mills Mall. Interest rates
have steadily dropped over the past several years and the interest income earned in this fund has also
steadily declined.
CITY OF GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE'S CHANGE IN NET POSITION
Governmental Activities
2013 2012
Revenues:
General revenues:
Property taxes $ 5,841,075 $ 6,644,952
Unrestricted investment earnings 39,519 73,241
Total revenues 5,880,594 6,718,193
Expenses:
Economic development 1,631,843 2,124,985
Interest and fiscal charges 221,472 347,514
Total expenses 1,853,315 2,472,499
Change in net position 4,027,279 4,245,694
Net position,beginning 25,208,905 20,963,211
Net position,ending $ 29,236,184 $ 25,208,905
FINANCIAL ANALYSIS OF THE TIF'S FUNDS
Governmental Funds
The focus on the TIF's governmental funds is to provide information on near-term inflows, outflows,
and balances of spendable resources. Such information is useful in assessing the TIF's financing
requirements.
At the end of the current fiscal year, the TIF's governmental funds reported ending fund balances of
$35,205,747, an increase of$855,111 in comparison with the prior year.
5
DEBT ADMINISTRATION
Long-term Debt. At year-end, the TIF had total bonded debt outstanding of $6,675,000, which is
backed by the full faith and credit of the TIF. The debt is paid from real property taxes captured by the
TIF District.
CITY OF GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE'S OUTSTANDING DEBT
2013 2012
Certificates of obligation $ 6,675,000 $ 8,705,000
REQUESTS FOR INFORMATION
This financial report is designed to provide our citizens, investors and creditors with a general overview of
the City'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 ONE
(A Blended Component Unit of the City of Grapevine,Texas)
STATEMENT OF NET POSITION
SEPTEMBER 30,2013
ASSETS
Cash and investments $ 35,248,984
Taxes receivable,net 1,632,603
Accrued interest 4,762
Deferred charges 54,853
Total assets 36,941,202
LIABILITIES
Accounts payable 587,023
Accrued interest payable 37,103
Bonds payable -due in less than one year 2,110,000
Bonds payable -due in more than one year 4,970,892
Total liabilities 7,705,018
NET POSITION
Restricted for debt service 106,021
Restricted for economic development 26,548,981
Restricted for capital projects 2,581,182
Total net position $ 29,236,184
The accompanying notes are an integral part of these financial statements.
7
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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 30,2013
Net(Expense)
Revenues and
Changes in
Net Position
Program Governmental
Functions/Programs Expenses Revenue Activities
Governmental activities:
Economic development $ 1,631,843 $ - $( 1,631,843)
Interest and fiscal charges 221,472 - ( 221,472)
Total governmental activities $ 1,853,315 $ - $( 1,853,315)
General revenues:
Property taxes 5,841,075
Investment earnings 39,519
Total general revenues 5,880,594
Change in net position 4,027,279
Net position-beginning 25,208,905
Net position-ending $ 29,236,184
The accompanying notes are an integral part of these 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)
BALANCESHEET
GOVERNMENTAL FUNDS
AS OF SEPTEMBER 30,2013
Capital
General Projects Total
ASSETS
Cash and investments $ 32,663,208 $ 2,585,776 $ 35,248,984
Taxes receivable,net 1,632,603 - 1,632,603
Accrued interest 4,419 343 4,762
Total assets $ 34,300,230 $ 2,586,119 $ 36,886,349
LIABILITIES
Accounts payable $ 582,086 $ 4,937 $ 587,023
Deferred revenue 1,093,579 - 1,093,579
Total liabilities 1,675,665 4,937 1,680,602
FUND BALANCES
Restricted for debt service 7,169,163 - 7,169,163
Restricted for economic development 25,455,402 - 25,455,402
Restricted for capital projects - 2,581,182 2,581,182
Total fund balances 32,624,565 2,581,182 35,205,747
Total liabilities and fund balances $ 34,300,230 $ 2,586,119
Amounts reported for governmental activities in the statement of net
position are different because:
Taxes receivable are not available soon enough to pay for the current
period's expenditures and are,therefore,deferred in the funds. 1,093,579
Bond interest is not payable with available financial resources and is
therefore not accrued at the fund level. ( 37,103)
Bonds payable are not due and payable in the current period and
therefore are not reported in the funds:
Deferred charges 54,853
Loss on refunding 97,852
Bonds payable ( 6,675,000)
Premium on issuance ( 503,744)
Net position of governmental activities $ 29,236,184
The accompanying notes are an integral part of these financial statements.
9
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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 30,2013
Capital
General Projects Total
REVENUES
Property taxes $ 4,807,748 $ - $ 4,807,748
Investment income 35,945 3,574 39,519
Total revenues 4,843,693 3,574 4,847,267
EXPENDITURES
Economic development 1,222,389 - 1,222,389
Capital outlay - 409,454 409,454
Debt service:
Principal 2,030,000 - 2,030,000
Interest and fiscal charges 330,313 - 330,313
Total expenditures 3,582,702 409,454 3,992,156
EXCESS(DEFICIENCY)OF REVENUE
OVER(UNDER)EXPENDITURES 1,260,991 ( 405,880) 855,111
OTHER FINANCING SOURCES(USES)
Transfers in - 1,130,111 1,130,111
Transfers out ( 1,130,111) - ( 1,130,111)
Total other financing sources and uses ( 1,130,111) 1,130,111 -
NET CHANGE IN FUND BALANCE 130,880 724,231 855,111
FUND BALANCE,BEGINNING 32,493,685 1,856,951 34,350,636
FUND BALANCE,ENDING $ 32,624,565 $ 2,581,182 $ 35,205,747
Net change in fund balance 855,111
Amounts reported for governmental activities in the statement of
activities are different because:
Revenues in the statement of activities that do not provide current financial resources
are not reported as revenues in the funds. 1,033,327
Interest expense is accrued in the government-wide financial statements,but not at the fund level. 5,224
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. 2,030,000
Deferred charges-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. 103,617
Change in net position of governmental funds $ 4,027,279
The accompanying notes are an integral part of these 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)
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30,2013
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Grapevine Tax Increment Financing District Reinvestment Zone Number One (the "TIF")
was created on February 20, 1996. The TIF 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. The TIF 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. The termination of the
TIF is set as either December 31, 2017, or the date when all project costs are paid and all debt is
retired, whichever comes first. The boundaries of the TIF were reduced in accordance with Texas
Code Section 311.007 by ordinance #97-132 on December 3, 1998. The reduction in the size of
the zone was not material and was done for legal clarification. The TIF is a blended component
unit of the City of Grapevine, Texas.
The accounting and reporting policies of the TIF 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 General Fund is used to account for the principal and interest payments of the debt and
economic development activities. The Capital Projects Fund is used to account for the
expenditures related to construction. All construction in progress and completed capital assets
are transferred to the City.
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 the TIF.
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. The TIF does not report any program
revenues.
11
Separate fund-based financial statements are provided for governmental funds. Major
individual governmental funds are reported as separate columns in the fund financial
statements.
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, the TIF 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. Assets, Liabilities and Net Position or Equity
1. Cash and Investments
Cash consists of demand deposits (principally interest-bearing accounts) that are carried
at cost. Investments are stated at fair value.
2. Long-term Debt
In the government-wide financial statements, long-term debt and other long-term
obligations are reported as liabilities in the statement of net position.
3. 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 TIF 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.
12
• Committed: This classification includes amounts that can be used only for
specific purposes pursuant to constraints imposed by formal action of the
Board. These amounts cannot be used for any other purpose unless the
Board 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.
• Assigned: This classification includes amounts that are constrained by the
TIF's intent to be used for a specific purpose but are neither restricted nor
committed. This intent can be expressed by the Board.
• 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.
When an expenditure is incurred for purposes for which both restricted and unrestricted
fund balance is available, the TIF considers restricted funds to have been spent first.
When an expenditure is incurred for which committed, assigned, or unassigned fund
balances are available, the TIF considers amounts to have been spent first out of
committed funds, then assigned funds, and finally unassigned funds.
II. CASH AND INVESTMENTS
The cash and investment policies of the TIF 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 City investment pool $ 35,248,984
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.
13
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/NotesBonds and U. S. agencies and instrumentalities. The City's
investment in the securities of U. S. agencies are rated AAA by Standard & Poor's. TexPool and
LOGIC are public funds investment pools operating as a 2a-7 like pool and in full compliance
with the Public Funds Investment Act. As of September 30, 2013, 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, 2013. The bank balances were fully
collateralized by government securities.
III. LONG-TERM LIABILITIES
Long-term liabilities consist of Combination Tax and Tax Increment Reinvestment Zone
Revenue Certificates of Obligation, Series 2009A, due in annual installments from August 15,
2009 through February 15, 2016, at interest rates from 2.5% to 5%, issued in the amount of
$14,290,000, with a remaining balance at September 30, 2013, of$6,675,000.
Balance Balance Due Within
09/30/12 Additions Retirements 09/30/13 One Year
Bonds payable:
Combination Tax and Tax
Increment Reinvestment
Zone Revenue Refunding
Bonds, Series 2009A $ 8,705,000 $ - $( 2,030,000) $ 6,675,000 $ 2,110,000
Less deferred amounts:
Loss on refunding ( 139,053) - 41,201 ( 97,852) -
Issuance premiums 671,658 - ( 167,914) 503,744 -
$ 9,237,605 $ - $( 2,156,713) $ 7,080,892 $ 2,110,000
14
The annual requirements to amortize the long-term debt as of September 30, 2013, are as follows:
Year Ending
September 30, Principal Interest
2014 2,110,000 262,537
2015 2,215,000 172,875
2016 2,350,000 58,751
Total $ 6,675,000 $ 494,163
IV. APPRAISED VALUES
A summary of appraised values for the TIF is as follows:
Tax Year 1996 Captured
2012 Appraised Base Year Appraised
Value Appraised Value Value
City of Grapevine $ 249,776,965 $ 7,647,325 $ 242,129,640
County Hospital District 249,776,965 7,631,345 242,145,620
County Junior College District 249,776,965 7,631,345 242,145,620
Tarant County 249,776,965 7,631,345 242,145,620
Grapevine-Colleyville Independent
School District 249,776,965 7,631,345 242,145,620
The captured appraised value of the TIF 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 the TIF was
established (1996).
V. PLEDGED REVENUES
The Board of Directors for the TIF 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 up to 2016-2017 be placed in a 380 account
in the TIF zone to incentivize further economic development in the zone. The action was passed
by the Board on September 8, 2009.
In fiscal year 2012, the TIF approved an economic development agreement with Grapevine Mills
LTD Partnership in an amount not to exceed $14,000,000 for interior renovations ($10,000,000)
and future exterior improvements ($4,000,000) at Grapevine Mills Mall.
15
VI. BOARD OF DIRECTORS
Members of the Board of Directors can be obtained from the City Secretary's office — City of
Grapevine, Texas.
16
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, 2013
(With Independent Auditors' Report)
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 30,2013
Page
Number
Independent Auditors' Report....................................................................................... 1 —2
Management's Discussion and Analysis ...................................................................... 3 —7
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position....................................................................................... 8
Statement of Activities............................................................................................ 9
Fund Financial Statements
Balance Sheet— Governmental Funds..................................................................... 10
Statement of Revenues, Expenditures and Changes in
Fund Balances— Governmental Funds................................................................ 11
Notes to Financial Statements.................................................................................... 12 - 17
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MKI
PATTILLO, BROWN & HILL, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
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 (the "TIF 92," a
component unit of the City of Grapevine, Texas), as of and for the year ended September 30, 2013, and the
related notes to the financial statements, which collectively comprise the TIF 92'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. 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
401 WEST HIGHWAY 6■P.O.BOX 20725■WACO,TX 76702-0725■(254)772-4901■FAX:(254)772-4920■www.pbhcpa.com
AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■HILLSBORO,TX(254)582-2583
TEMPLE,TX(254)791-3460■ALBUQUERQUE,NM(505)266-5904
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 the TIF 92, as of
September 30, 2013, 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 on pages 3-7 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.
Rat L L-?.
Waco, Texas
March 18, 2014
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 (the "TIF") financial statements this
narrative overview and analysis of the financial activities of the TIF for the fiscal year ended September
30, 2013. The TIF 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.
FINANCIAL HIGHLIGHTS
• The liabilities of the TIF exceeded its assets at the close of the most recent fiscal year
by $(16,040,457) (net position). This is primarily due to the debt that was previously
issued in connection with the public improvement project in the Gaylord Texan
Resort and Convention Center area.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis serves as an introduction to the TIF's basic financial statements. The TIF'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 the
TIF's finances in a manner similar to private-sector business.
The Statement of Net Position presents information on all of the TIF's assets and liabilities, with the
difference between the two 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 TIF is improving or deteriorating.
The Statement of Activities presents information showing how the TIF'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).
The government-wide 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 cost of public improvements. The government-wide financial statements can be found within this
report.
3
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 TIF 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.
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.
The TIF does not have any proprietary or fiduciary funds.
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
beginning on page 12 of this report.
4
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, 2013, the TIF's liabilities exceeded assets by $(16,040,457).
The following table reflects the condensed Statement of Net Position:
CITY OF GRAPEVINE TAX INCREMENT FINANCING
DISTRICT REINVESTMENT ZONE NUMBER TWO'S NET POSITION
Governmental Activities
2013 2012
Current and other assets $ 9,289,376 $ 9,456,172
Total assets 9,289,376 9,456,172
Long-term liabilities outstanding 25,169,735 26,478,946
Other liabilities 160,098 169,648
Total liabilities 25,329,833 26,648,594
Net position:
Restricted for capital projects 2,149,073 2,149,435
Unrestricted ( 18,189,530) ( 19,341,857)
Total net position $( 16,040,457) $( 17,192,422)
Analysis of the TIF's Operations
Government activities increased the TIF's net position by $1,151,965 with the TIF's liabilities to asset
ratio decreasing from 2.82 in FY 2012 to 2.73 in FY 2013. The TIF board entered into a local agreement
with the Grapevine-Colleyville Independent School District and pledged future ad valorem taxes
collected for the zone two to be contributed towards the School's middle school debt. The total amount
that the TIF paid was $2,282,948. The TIF #2 interest income from investments offset the arbitrage
calculation expenses.
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The following table provides a summary of the TIF's operations for the year ended September 30, 2013.
CITY OF GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO'S CHANGE IN NET POSITION
Governmental Activities
2013 2012
Revenues:
General revenues:
Property taxes $ 4,801,246 $ 5,736,208
Unrestricted investment earnings 9,914 15,052
Total revenues 4,811,160 5,751,260
Expenses:
Economic development 2,282,948 1,595,555
Interest 1,376,247 1,500,578
Total expenses 3,659,195 3,096,133
Change in net position 1,151,965 2,655,127
Net position,beginning ( 17,192,422) ( 19,847,549)
Net position, ending $( 16,040,457) $( 17,192,422)
FINANCIAL ANALYSIS OF THE TIF'S FUNDS
Governmental Funds
The focus on the TIF's governmental funds is to provide information on near-term inflows, outflows,
and balances of spendable resources. Such information is useful in assessing the TIF's financing
requirements.
At the end of the current fiscal year, the TIF governmental funds reported combined ending fund
balances of$7,911,051, a decrease of$1,315,087 in comparison with the prior year. The fund balance is
restricted to indicate that it is not available for new spending. The restricted fund balance consists of the
following: (1) debt service $5,761,978 and (2) capital projects $2,149,073.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. Capital assets of the TIF are recorded as expenditures in the Capital Projects Fund
when constructed. Construction in progress and completed assets are transferred to the City.
Long-term Debt. At the end of the current fiscal year, the TIF had total bonded debt outstanding of
$25,375,000, which is backed by the full faith and credit of the TIF.
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CITY OF GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO'S OUTSTANDING DEBT
2013 2012
Combination Tax and Tax Increment
Reinvestment Zone Revenue
Certificates of Obligation, Series 2000
due in annual installments of$730,000
to $2,475,000 through August 15, 2026;
interest at 5.5%to 7%. $ 2,535,000 $ 3,695,000
Combination Tax Increment Reinvestment
Zone Revenue Refunding Bonds,
Series 2005A due in annual installments
of$140,000 to $2,595,000 through
August 2026. 22,840,000 23,005,000
$ 25,375,000 $ 26,700,000
ECONOMIC FACTORS
The City Council and TIF #2 Board of Directors entered into an agreement in November 2007 with the
Gaylord Texas Resort and Convention Center to construct an expansion to the existing resort having a
minimum of 2,000 rooms, an expansion of the convention center so the resort will have at least 600,000
square feet of meeting and pre-function space, approximately 750 — 1,100 additional parking spaces,
additional swimming pool and other additional amenities.
In May 2009, the City and Gaylord entered into an agreement to extend the required commencement date
of the expansion from September 12, 2009 until September 12, 2012 for parcels 5 and 7, as defined in the
agreement. In September 2012, the City and the Gaylord Texan Resort and Convention Center entered
into a fourth agreement and agreed to extend the required commencement date of the expansion until
March of 2013.
REQUESTS FOR INFORMATION
This financial report is designed to provide our citizens, investors and creditors with a general overview of
the TIF'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.
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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 30,2013
ASSETS
Cash and investments $ 7,910,274
Taxes receivable,net 1,164,712
Accrued interest 777
Deferred charges 213,613
Total assets 9,289,376
LIABILITIES
Accrued interest payable 160,098
Bonds payable -due in one year 1,400,000
Bonds payable -due in more than one year 23,769,735
Total liabilities 25,329,833
NET POSITION
Restricted for capital projects 2,149,073
Unrestricted ( 18,189,530)
Total net position $( 16,040,457)
The accompanying notes are an integral part of these 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 ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30,2013
Net(Expense)
Revenues and
Changes in
Net Position
Program Governmental
Functions/Programs Expenses Revenue Activities
Governmental activities:
Economic development $ 2,282,948 - $( 2,282,948)
Interest 1,376,247 - ( 1,376,247)
Total governmental activities $ 3,659,195 $ - $( 3,659,195)
General revenues:
Property taxes 4,801,246
Unrestricted investment earnings 9,914
Total general revenues 4,811,160
Change in net position 1,151,965
Net position -beginning ( 17,192,422)
Net position -ending $( 16,040,457)
The accompanying notes are an integral part of these 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)
BALANCESHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30,2013
Capital
General Projects Total
ASSETS
Cash and investments $ 5,761,201 $ 2,149,073 $ 7,910,274
Taxes receivable,net 1,164,712 - 1,164,712
Accrued interest 777 - 777
Total assets $ 6,926,690 $ 2,149,073 $ 9,075,763
LIABILITIES AND FUND BALANCES
Deferred revenue 1,164,712 - 1,164,712
Total liabilities 1,164,712 - 1,164,712
Fund balances:
Restricted for debt service 5,761,978 - 5,761,978
Restricted for capital projects - 2,149,073 2,149,073
Total fund balances 5,761,978 2,149,073 7,911,051
Total liabilities and fund balances $ 6,926,690 $ 2,149,073
Amounts reported for governmental activities in the statement of net
position are different because:
Taxes receivable are not available soon enough to pay for the current
period's expenditures and are,therefore, deferred in the funds. $ 1,164,712
Bond interest is not payable with available financial resources and is
therefore not accrued at the fund level ( 160,098)
Deferred charges 213,613
Loss on refunding 1,381,890
Bonds payable ( 25,375,000)
Premium on issuance ( 1,176,625)
Net position of governmental activities $( 16,040,457)
The accompanying notes are an integral part of these 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 REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2013
Capital
General Projects Total
REVENUES
Taxes
Property taxes $ 3,636,534 - $ 3,636,534
Investment income 7,876 $ 2,038 9,914
Total revenues 3,644,410 2,038 3,646,448
EXPENDITURES
Economic development 2,282,948 - 2,282,948
Debt service:
Principal 1,325,000 - 1,325,000
Interest and fiscal charges 1,351,187 2,400 1,353,587
Total expenditures 4,959,135 2,400 4,961,535
NET CHANGE IN FUND BALANCES ( 1,314,725) ( 362) ( 1,315,087)
FUND BALANCE,BEGINNING 7,076,703 2,149,435 9,226,138
FUND BALANCE,ENDING $ 5,761,978 $ 2,149,073 $ 7,911,051
Net change in fund balances $( 1,315,087)
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. 1,325,000
Revenues in the statement of activities that do not provide current financial resources
are not reported as revenues in the funds. 1,164,712
Interest expense is accrued in the government-wide financial statements,
but not at the fund level. 9,550
Deferred charges-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. ( 32,210)
Change in net position of governmental activities $ 1,151,965
The accompanying notes are an integral part of these 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)
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30,2013
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Grapevine Tax Increment Financing District Reinvestment Zone Number Two (the "TIF")
was created on December 28, 1998. The TIF 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. The TIF 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
the TIF is set as either December 31, 2030, or the date when all project costs are paid and all debt
is retired, whichever comes first. The TIF is a blended component unit of the City of Grapevine,
Texas.
The accounting and reporting policies of the TIF 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 the TIF.
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. 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
principal and interest 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.
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The government-wide focus is more on the sustainability of the TIF 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.
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, the government 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 the TIF and approved by all
parties involved. Annual budgets are not adopted.
D. Assets, Liabilities and Net Position or Equity
1. Cash and Investments
Cash consists of demand deposits (principally interest-bearing accounts) that are carried
at cost. Investments are stated at fair value.
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 using the effective interest method. Bonds payable are reported net of the
applicable bond premium or discount. Bond issuance costs and losses on refundings are
reported as deferred charges and amortized on a straight line basis over the life of the
related debt.
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.
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3. 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 TIF 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 formal action of the
Board. These amounts cannot be used for any other purpose unless the
Board 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.
• Assigned: This classification includes amounts that are constrained by the
TIF's intent to be used for a specific purpose but are neither restricted nor
committed. This intent can be expressed by the Board.
• 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.
When an expenditure is incurred for purposes for which both restricted and unrestricted
fund balance is available, the TIF considers restricted funds to have been spent first.
When an expenditure is incurred for which committed, assigned, or unassigned fund
balances are available, the TIF considers amounts to have been spent first out of
committed funds, then assigned funds, and finally unassigned funds.
II. CASH AND INVESTMENTS
The cash and investment policies of the TIF 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.
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The City invests in State investment pools (TexPool and LOGIC). These approved pooled
investments are carried at fair value and may be liquidated as needed. TexPool and LOGIC are
public funds investment pools operating as a 2a-7 like pool and in full compliance with the
Public Funds Investment Act.
The components of the TIF's cash and investments (at fair value) at September 30, 2013, were as
follows:
Investment in City investment pool $ 7,910,274
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. TexPool and
LOGIC are public funds investment pools operating as a 2a-7 like pool and in full compliance
with the Public Funds Investment Act. As of September 30, 2013, 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, 2013. The bank balances were fully
collateralized by government securities.
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III. LONG-TERM LIABILITIES
Long-term liabilities are as follows:
Balance Balance Due Within
9/30/2012 Additions Retirements 9/30/2013 One Year
Combination Tax and Tax
Increment Reinvestment
Zone Revenue Certificates
of Obligation, Series 2000
due in annual installments
of$730,000 to$2,475,000
through August 15,2026;
interest at 5.5%to7% $ 3,695,000 - $ 1,160,000 $ 2,535,000 $ 1,230,000
Combination Tax Increment
Reinvestment Zone Revenue
Refunding Bonds, Series
2005A due in annual
installments of$140,000 to
$2,595,000 through
August 2026; 3.25%to 5% 23,005,000 - 165,000 22,840,000 170,000
Total debt outstanding $ 26,700,000 - $ 1,325,000 25,375,000 $ 1,400,000
Unamortized premium 1,176,625
Deferred loss on refunding ( 1,381,890)
Total debt outstanding $ 25,169,735
The annual requirements to amortize the long-term debt as of September 30, 2013, are as follows:
Year Ending
September 30, Principal Interest
2014 1,400,000 1,280,786
2015 1,485,000 1,205,106
2016 1,565,000 1,124,500
2017 1,650,000 1,046,250
2018 1,735,000 963,750
2019-2023 10,130,000 3,422,500
2024-2026 7,410,000 753,500
Total $ 25,375,000 $ 9,796,392
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IV. APPRAISED VALUES AND TAX RATES
A summary of appraised values for the TIF is as follows:
Tax Year 1998 Base Captured
2012 Appraised Year Appraised Appraised
Value Value Value
City of Grapevine $ 270,979,538 $ 744,886 $ 270,234,652
Grapevine-Colleyville Independent
School District 270,979,538 744,886 270,234,652
The captured appraised value of the TIF 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 the TIF was
established (1999).
Tax rates for the TIF are as follows (per $100 valuation):
Rate
City of Grapevine 0.35
Grapevine-Colleyville Independent 1.00
School District
V. PLEDGED REVENUES
The TIF has entered into a local agreement with the Grapevine-Colleyville Independent School
District where future ad valorem taxes collected for the zone are pledged to contribute towards
the School's middle school debt. The total amount that the TIF has pledged to pay is
$40,287,173 as of September 30, 2013. The amount of the annual payment is negotiated each
year with the school and the school bills the City. The City does not have title to the middle
school improvements.
VI. BOARD OF DIRECTORS
Members of the Board of Directors can be obtained from the City Secretary's office — City of
Grapevine.
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