HomeMy WebLinkAboutItem 07 - City Audit MEMOTO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: BRUNO RUMBELOW, CITY MANAGER
MEETING DATE: MARCH 17, 2020
SUBJECT: FILING OF ANNUAL CITY AUDIT
RECOMMENDATION: Pattillo, Brown and Hill, LLC, the City's auditing firm, to present the annual
audit report in compliance with the City Charter, Article 3, Section 3.14.
FUNDING SOURCE: This action will have no material effect on City funds.
BACKGROUND: A representative from Pattillo, Brown and Hill, LLC. the City's audit firm,
will make a presentation to the City Council filing the annual audit report in
compliance with the City Charter, Article 3, Section 3.14.
The firm completed the audit of the City's FY 2019 financial statements in
compliance with the requirements of the City Charter, Article 3, Section
3.14. The auditor's opinion letter states that the financial statements of the
City of Grapevine present fairly the financial position of the City.The
opinion rendered is an "unmodified opinion", meaning there are no
material exceptions found to the fairness criteria under which the records
were audited. The report also includes an audit of Tax Increment
Financing Districts One and Two.
The auditor is filing his report with the City Council.No formal action on
the part of the Council is required.
PATTILLO, BROWN & HILL, L.L.P.
401 West State Highway 6
Waco,Texas 76710
254.772.4901 pbhcpa.com
Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
We have audited the financial statements of the City of Grapevine, Texas (City), as of and for the year
ended September 30, 2019, and have issued our report thereon dated March 12, 2020. Professional standards
require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit
As communicated in our engagement letter dated January 7, 2020, our responsibility, as described by
professional standards, is to form and express opinions about whether the financial statements that have been
prepared by management with your oversight are presented fairly, in all material respects, in accordance with
accounting principles generally accepted in the United States of America.Our audit of the financial statements does
not relieve you or management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain
reasonable, rather than absolute, assurance about whether the financial statements are free of material
misstatement. An audit of financial statements includes consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the City's internal control over financial reporting.Accordingly, as part
of our audit,we considered the internal control of the City solely for the purpose of determining our audit procedures
and not to provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are, in our
professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we
are not required to design procedures for the purpose of identifying other matters to communicate to you.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.
Compliance with All Ethics Requirements Regarding Independence
The engagement team, others in our firm, and, as appropriate, our firm have complied with all relevant
ethical requirements regarding independence.
As part of the engagement we assisted in preparing the financial statements and related notes to the
financial statements of the City in conformity with U.S. generally accepted accounting principles based on
information provided by you. These nonaudit services do not constitute an audit under Government Auditing
Standards and such services were not conducted in accordance with Government Auditing Standards.
OFFICE LOCATIONS
TEXAS I Waco Temple I Hillsboro I Houston �•` AICPA
NEW MEXICO I Albuquerque GAQC Member
In order to ensure we maintain our independence for performing these nonaudit services certain safeguards
were applied to this engagement. Management assumed responsibility for the financial statements, related notes
to the financial statements and any other nonaudit services we provided. Management acknowledged, in the
management representation letter, our assistance with the preparation of the financial statements and related notes
to the financial statements and that these items were reviewed and approved prior to their issuance and accepted
responsibility for them. Further, the nonaudit services were overseen by an individual within management that has
the suitable skill, knowledge, or experience; evaluated the adequacy and results of the services; and accepted
responsibility for them.
Qualitative Aspects of the City's Significant Accounting Practices
Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the
significant accounting policies adopted by the City is included in Note 1 to the financial statements. There have
been no initial selection of accounting policies and no changes in significant accounting policies or their application
during the current year. No matters have come to our attention that would require us, under professional standards,
to inform you about the effect of significant accounting policies in controversial or emerging areas for which there
is a lack of authoritative guidance or consensus.
No matters have come to our attention that would require us, under professional standards, to inform you
about(1)the methods used to account for significant unusual transactions and(2)the effect of significant accounting
policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management's current judgments. Those judgments are normally based on knowledge and experience
about past and current events and assumptions about future events. Certain accounting estimates are particularly
sensitive because of their significance to the financial statements and because of the possibility that future events
affecting them may differ markedly from management's current judgments.
The most sensitive accounting estimates affecting the financial statements are:
• Management's estimate of the allowance for uncollectible receivables is based on historical collection
experience.
• Management's estimate of the accumulated depreciation on capital assets is based on the related
estimated useful lives of capital assets.
• Management's estimate of the net pension liability and net OPEB liability are based on actuarial
assumptions which are determined by the demographics of the plan and future projections that the
actuary makes based on historical information of the plan and the investment market.
For each of these estimates, we evaluated the key factors and assumptions used to develop them and
determined that they are reasonable in relation to the basic financial statements taken as a whole and in relation to
the applicable opinion units.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because
of their significance to financial statement users. The most sensitive disclosures affecting the City's financial
statements relate to the City's net pension liability and net OPEB liability.
The disclosures in the financial statements are neutral, consistent, and clear.
2
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the
audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely
misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the
appropriate level of management. Further, professional standards require us to also communicate the effect of
uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or
disclosures, and the financial statements as a whole and each applicable opinion unit. Management has corrected
all identified misstatements.
In addition, professional standards require us to communicate to you all material, corrected misstatements
that were brought to the attention of management as a result of our audit procedures. None of the misstatements
identified by us as a result of our audit procedures and corrected by management were material, either individually
or in the aggregate, to the financial statements taken as a whole or applicable opinion units.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter,
whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which
could be significant to the City's financial statements or the auditor's report. No such disagreements arose during
the course of the audit.
Representations Requested from Management
We have requested certain written representations from management, which are included in the
management representation letter dated March 12, 2020.
Management's Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters. Management informed us that, and to our knowledge, there were no consultations with other accountants
regarding auditing and accounting matters.
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City,we generally discuss a variety of matters,
including the application of accounting principles and auditing standards, operating and regulatory conditions
affecting the City, and operational plans and strategies that may affect the risks of material misstatement. None of
the matters discussed resulted in a condition to our retention as the City's auditors.
Restriction on Use
This report is intended solely for the information and use of the City Council, Audit Committee and
management of the City of Grapevine, Texas, and is not intended to be, and should not be, used by anyone other
than these specified parties.
P0,4 aic I'Z>
Waco, Texas
March 12, 2020
3
Cl*ty of
GraPevi*ne, Texas
0 0
Com rehensi*ve Annual Financial
VIN E
Fl* scal Year Ended September 30 2019
a ... x - __ - _ _Jr
f -
t
0.0
xgL-
t �y
F- lj
T-
►� 00000
At
��� i •-i ^' .. •. A 1. � `• -
P P
G!RA
-A � '-'`� +►"�-,��- tea_ :t: _ .-� ar.�;�_ -�' r _t+����°�r
9910 W-ijgL
������,���,♦�����♦ .',— -1t r `.�`'k ``- fay.+.+Y
OMPPAO 4 Pot-we
,ems
QN!qMf A,
1011�11�11''j *
00
'E
T E X A S
CITY OF GRAPEVINE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2019
Prepared by: Fiscal Services Department
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
SEPTEMBER 30, 2019
Page
Number
INTRODUCTORY SECTION
Letterof Transmittal.................................................................................................................. i —v
Certificate of Achievement for Excellence in Financial Reporting............................................ vi
OrganizationChart.................................................................................................................... vii
Administrative Officials ............................................................................................................. viii
FINANCIAL SECTION
Independent Auditor's Report................................................................................................... 1 —3
Management's Discussion and Analysis.................................................................................. 4— 13
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position................................................................................................... 14
Statement of Activities........................................................................................................ 15— 16
Fund Financial Statements:
Balance Sheet—Governmental Funds .............................................................................. 17— 18
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position...................................................................................... 19
Statement of Revenues, Expenditures and Changes in
Fund Balances— Governmental Funds........................................................................... 20—21
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities..................................................................................................... 22
Statement of Net Position — Proprietary Funds.................................................................. 23—24
Statement of Revenues, Expenses and Changes in
Net Position — Proprietary Funds.................................................................................. 25
Statement of Cash Flows— Proprietary Funds................................................................... 26—27
Statement of Fiduciary Net Position — Fiduciary Funds ..................................................... 28
Notes to the Financial Statements......................................................................................... 29—60
Page
Number
Required Supplementary Information:
Budgetary Comparison Schedule—General Fund................................................................ 61
Budgetary Comparison Schedule— Hotel Occupancy Tax................................................... 62
Budgetary Comparison Schedule—Crime District................................................................ 63
Budgetary Comparison Schedule—4B Economic Development Fund................................. 64
Budgetary Comparison Schedule—4B—Transit.................................................................. 65
Schedule of Changes in Net Pension Liability
and Related Ratios—Texas Municipal Retirement System .............................................. 66—67
Schedule of Contributions—Texas Municipal Retirement System ....................................... 68—69
Schedule of Changes in Net OPEB Liability
andRelated Ratios ............................................................................................................ 70
Notes to Required Supplementary Information..................................................................... 71
Combining and Individual Fund Statements and Schedules:
Nonmajor Governmental Funds:
CombiningBalance Sheet.................................................................................................. 72— 73
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances ............................................................................................. 74— 75
Budgetary Comparison Schedule — Debt Service Fund..................................................... 76
Budgetary Comparison Schedule —Lake Park Fund......................................................... 77
Agency Funds:
Combining Statement of Changes in Assets and Liabilities............................................... 78
STATISTICAL SECTION (Unaudited)
Page
Table Number
Net Position by Component...................................................................................... 1 79—80
Changes in Net Position........................................................................................... 2 81 —84
Fund Balances— Governmental Funds.................................................................... 3 85—86
Changes in Fund Balances—Governmental Funds................................................. 4 87—88
Taxable Sales by Category ...................................................................................... 5 89
Direct and Overlapping Sales Tax Rates ................................................................. 6 90
Assessed Value and Estimated Actual Value
ofTaxable Property ............................................................................................... 7 91
Page
Table Number
Property Tax Rates— Direct and Overlapping Governments................................... 8 92
Principal Property Taxpayers ................................................................................... 9 93
Property Tax Levies and Collections........................................................................ 10 94
Ratios of Outstanding Debt by Type......................................................................... 11 95
Ratios of General Bonded Debt Outstanding........................................................... 12 96
Direct and Overlapping Governmental Activities Debt............................................. 13 97
Legal Debt Margin Information ................................................................................. 14 98
Pledged Revenue Coverage—4B Economic Development Fund ........................... 15 99
Pledged Revenue Coverage —Tax Increment Financing
District Reinvestment Zone Number Two.............................................................. 16 100
Demographic and Economic Statistics..................................................................... 17 101
PrincipalEmployers.................................................................................................. 18 102
Full-time Equivalent City Government Employees
byFunction/Program ............................................................................................. 19 103
Operating Indicators by Function/Program............................................................... 20 104 — 105
Capital Asset Statistics by Function/Program .......................................................... 21 106
INTERNAL CONTROL AND COMPLIANCE SECTION
Independent Auditor's Report on Internal Control Over Financial
Reporting and Other Matters Based on an Audit of
Financial Statements Performed in Accordance With
Government Auditing Standards........................................................................................... 107 — 108
Schedule of Findings and Responses...................................................................................... 109
THIS PAGE LEFT BLANK INTENTIONALLY
INTRODUCTORY SECTION
THIS PAGE LEFT BLANK INTENTIONALLY
A VINE
T L a A S
March 12, 2020
To the Honorable Mayor,
Members of the City Council, and
Citizens of the City of Grapevine, Texas
The Fiscal Services Department is pleased to submit the Comprehensive Annual Financial Report for the City
of Grapevine. The City's Management assumes responsibility for both the accuracy of the data and the
completeness and fairness of the presentation, based upon a comprehensive framework of internal control
that it has established for this purpose. Because the cost of internal control should not exceed anticipated
benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements
are free of any material misstatements. To the best of our knowledge and belief, the enclosed data is accurate
in all material respects. The data is reported in a manner designed to present fairly the financial position and
results of operations of the various funds of the City government. To enable the reader to gain an
understanding of the City's financial activities, all necessary disclosures have been included.
The City Charter requires an annual audit of the books of account, financial records, and transactions of all
administrative departments of the City. The City Charter specifies that independent accountants selected by
the City Council conduct such audits. Pattillo, Brown & Hill, LLP was selected by the City Council to conduct
this year's audit. The independent auditors' report on the basic financial statements is included in the financial
section of this report. This report fulfills the requirement of state law which requires the City file to the State
an annual financial statement and audit opinion within 180 days after the last day of the municipality's Fiscal
Year(FY).
Pattillo, Brown & Hill, LLP has issued an unmodified ("clean") opinion on the City of Grapevine's financial
statements for the year ended September 30, 2019. The independent audit report is located at the front of
the financial section of this report.
The Management's Discussion and Analysis (MD&A) is a narrative introduction, overview, and analysis to
accompany the basic financial statements. The MD&A can be found immediately following the independent
auditors' report. The letter of transmittal is designed to complement and should be read in conjunction with
the MD&A. The statistical section includes selected financial and demographic information, generally
presented on a multi-year basis.
Fiscal Services •200 South Main Street• Grapevine,Texas • 76051 • 817-410-3113 • Fax 817-410-3013
i
Profile of the City of Grapevine
Incorporated in February 1907, Grapevine is a home rule City operating under a Council-Manager form of
government. Policymaking and legislative authority are vested in the City Council, which consists of a Mayor
and a six-member Council. The City Manager is appointed by the City Council and is responsible for carrying
out policies and for the daily management of the City. Council members serve three-year staggered terms,
with two Council members elected each year. The Mayor is elected to serve a three-year term.
The City is located in the center of the Dallas/Fort Worth metropolitan complex, 21 miles northwest of
downtown Dallas and 19 miles northeast of downtown Fort Worth. Three major freeways, State Hwy 114,
State Hwy 121, and Interstate Hwy 635, intersect in the heart of Grapevine, providing excellent access to
Dallas, Fort Worth and the area shopping, entertainment, and employment centers. The City is located in
Northeast Tarrant County and is home to the Dallas/Fort Worth International Airport. Two-thirds of the airport
properties are located within Grapevine city limits and Grapevine participates in a legislatively mandated
revenue share agreement with the cities of Ft. Worth and Dallas. The City is approximately 35 square miles
and serves an approximate population of 53,000.
The City provides a full range of services, including police and fire protection, emergency ambulance service,
planning and zoning, public improvements, water and sewer services, sanitation services, extensive parks
and recreation facilities, library services, street and other public infrastructure maintenance and improvements,
and general administrative services. The City also offers a 27-hole golf course, a very active economic
development focus and an aggressive marketing plan to continue to grow and develop industry and tourism
within the City. The City also provides internal services, through the General Fund, for fleet services and risk
management.
The City of Grapevine's Home Rule Charter provides for the submission of the budget to the City Council by
the City Manager.At least sixty days and no more than ninety days before the beginning of the fiscal year, the
City Manager must submit a proposed budget to the City Council. The annual budget serves as the foundation
for the City of Grapevine's financial planning and control. The budget is prepared by fund and department,
and the City Manager can approve the transfer of expenditures within a fund, but transfers between funds
requires approval from the governing Council. The Grapevine Code of Ordinances establishes a balanced
budget provision for the General and Debt Service funds. Total estimated expenditures within these funds
shall not exceed the total estimated resources, but it does, however, provide for disclosure when a deviation
from a balanced budget is necessary. The budget may be amended and appropriations altered in cases of
public necessity, upon declaration of the City Council.
Component units are legally separate organizations that a primary government must include as a part of its
financial reporting entity. The City has included financial statements for five blended component units due to
their fiscal dependency on the primary government. The Tax Reinvestment Zones Numbers One and Two,
the Crime Control and Protection District, the Grapevine 4B Economic Development Corporation, and the 4B
Transit Fund, which accounts for local sales tax used to fund Grapevine's participation in the commuter rail
development project with the Fort Worth Transit Authority. The 4B Economic Development Fund accounts for
a portion of the local sales tax which is used to stimulate the local economy, promote new development, and
spur redevelopment of other areas.
The Heritage Foundation is a legally separate organization that is a discretely presented component unit of
the City. The Foundation was organized to promote the preservation, protection and economic development
of Grapevine's physical and cultural heritage. Additional information on all six component units can be found
in Note I in the notes to the financial statements.
ii
Local Economy
During FY 2019, Grapevine continued to experience economic growth due to superior access to major
highways, an aggressive economic development program, and a stable political climate. In addition, the City
of Grapevine is in close proximity to DFW International Airport, which helps to promote tourism, and is the
largest employer in Grapevine with more than 27% of the total employment base. Other local economic
indicators for Grapevine in FY 2019 include an unemployment rate of 3.0%and an increase in personal income
per capita of 2.5% over the previous year and 21% over the last ten years.
Sales tax , the single largest revenue stream for the City, continued to increase from previous years. Total
sales tax revenues increased $2.2 million (4%) and $3.3 million (6%) in FY 2018 and FY 2019 respectively.
Over the last 5 years, sales tax revenues experienced an increase of 9.7% or roughly$5.2 million. Sales tax
revenues over the last 10 years are illustrated in the table below.
The City's hotel and occupancy tax receipts have been on a steady incline over the last several years. Since
2015, hotel occupancy tax revenues have increased 14.7%. This growth was driven in the last several years
by higher occupancy rates for hotels located in the City as well as an increase in the average daily rate of
those occupied rooms. Additional growth was seen in FY 2019 (4.5% increase) resulting from a full year of
results related to the opening of the Gaylord Texan Resort expansion in FY 2018. The project increased the
number of rooms by 303 and has also provided the facility with an additional 86,000 square feet of meeting
space. Hotel occupancy taxes are expected to continue to grow over the next several years as current and
future hotel construction projects are completed within the City.
Sales and Hotel Occupancy Tax Revenue
(Thousands)
$65,000
$55,000
$45,000
$35,000
$25,000
$15,000
$5,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Sales Tax OccupancyTax
Long-term Financial Planning
The City Council establishes long term financial goals each year as a part of the budgeting process. For FY
2019, the Council continued with the following goals:
(1) Maintain financial stability and strong fiscal management
(2) Sustain existing programs at high service levels
(3) Provide a safe and secure community
(4) Address future transportation needs
(5) Continue to enhance tourism development
(6) Invest in "Quality of Life" capital projects
iii
Grapevine continued to maintain financial stability and strong fiscal management for FY 2019. The General,
Debt Service, Utility Enterprise, and Stormwater Drainage funds ended the fiscal year with fund balances that
meet or exceed their requirement.The City also maintained existing services and transferred from the General
Fund $3,000,000 to the Quality of Life Fund, $3,056,630 Crime District Fund, and $3,279,000 to the Street
Maintenance and Capital Replacement Fund.
As part of the commitment to safety the City began construction of several capital projects including 2 new fire
stations and a new Police Animal Shelter. For Fiscal Year 2019, the Police Department responded to 41,059
calls for service while the Fire Department responded to 6,192 calls for service and 4,291 ambulance runs.
Major Economic Initiatives and Community Development
Grapevine is home to many successful businesses as well as numerous wineries,fine dining, nationally ranked
festivals, and select attractions and resorts. Its economic development efforts are designed to further increase
visitors and tax revenues through projects that emphasize hospitality, entertainment and retail uses.
Grapevine has earned a well-deserved reputation as one of the nation's premier destinations by drawing 15
million visitors annually. Grapevine also boasts exceptional commercial and office facilities that capitalize on
the City's central location in one of the top regions in the nation for business and close proximity to the fourth-
busiest airport in the United States, providing ready access to major U.S. and international markets.
Grapevine continues to experience strong construction growth. In FY 2019, construction values exceeded
$246 million, compared to $276 million in FY 2018. The largest categories in this fiscal year were $61 million
in New Commercial Property and $55 million in new multi-family residences, which accounted for
approximately 47% of the construction values. A total of 44 single-family residential homes were permitted in
FY 2019 valued at $15 million which represents an increase of 23 residences over the previous year. The
following are some other major community development projects and economic initiatives that occurred or
continued during FY 2019.
In FY 2006, the citizens of Grapevine overwhelmingly voted to approve the creation of an economic
development fund for the primary purpose of providing commuter rail service to the City. Since that time, the
City has worked closely with TEXRail to achieve this goal. On January 10, 2019, TEXRail commuter rail
service began in Grapevine. TEXRail is a new 27-mile commuter rail line that extends from downtown Fort
Worth, across northeast Tarrant County, through North Richland Hills and Grapevine, and into DFW
International Airport's Terminal B. The future train station in Grapevine will consist of an observation tower,
public plaza, parking garage, public meeting spaces, market hall, and retail spaces. In conjunction with the
aforementioned projects, the City has entered into agreements to include a 121 room, AAA, four diamond
level hotel to this project. The project is scheduled to complete in 2020.
The City has proudly announced that Water Logic USA has established a new North American HQ and
Center of Excellence for its business as point of use drinking water dispensers. The company provides
access to fresh purified water to tens of millions of people across both North America and the globe. The
project will create 164 new jobs and more than 1.6 million in capital investment in the City.
In addition, Southland Holdings, a major civil engineering firm with work across the state and region will be
moving their corporate office to 6 acres of land just south of Kubota's HQ on City owned property. Work is
already underway on the design of an 80,000 sf building which will ultimately house 75 to 100 full time
employees.
iv
Awards and Acknowledgements
The City's Fiscal Services Department was awarded the Government Finance Officers Association (GFOA)
Certificate of Achievement for Excellence in Financial Reporting for its comprehensive annual financial report
("CAFR")for the fiscal year ended September 30, 2018. This was the 32nd consecutive year that the City has
received this prestigious award. In order to be awarded a Certificate of Achievement, the City published an
easily readable and efficiently organized CAFR. This report satisfied both GAAP and applicable legal
requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current
CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to
the GFOA to determine its eligibility for another certificate
The preparation of this report would not have been possible without the efficient and dedicated services of the
entire Fiscal Services Department. We would also like to express our appreciation to other City department
staff that provided information and contributed to the preparation of this report.
We would also like to thank the members of the City Council for their interest and support in planning and
conducting the financial operations of the City in a responsible and professional manner.
Respectfully submitted by:
I�V16 Z4
Greg Jordan
Chief Financial Officer
Jeff Strawn
Managing Director of Financial Services
I,
l
Nicole Bradshaw, CPA
Director of Internal Audit
v
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Grapevine,
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2018
OAa4� P. Anu�a
Executive Director/CEO
vi
City of Grapevine
Organization Chart
Citizens of Grapevine
Mayor& Council
City Attorney
Boyle& Lowry Advisory Boards
Municipal Court Judge
Alan Wayland
City Manager
Bruno Rumbelow
Assistant City Manager
Jennifer Hibbs
Parks& Recreation Fiscal Services Public Works Police
Kevin Mitchell Greg Jordan Bryan Beck Chief Michael Hamlin
Administration Administration Administration Administration
Active Adults Finance Engineering Uniform Operations
Park Maintenance Purchasing Streets Criminal Investigations
Recreation Municipal Court Traffic Operations Technical Services
Aquatics Risk Management Environmental Services Animal Control
Athletics Programs Debt Service "" Facility Services Commercial Vehicle
Recreation Programs Utility Billing "" Fleet Services Enforcement
Hospitality Services Utility Admin. Services "" Water""
The REC Wastewater
Lake Parks Stormwater Drainage
Fire City Secretary Development Services Library
Chief Darrell Brown Tara Brooks Scott Williams i Ruth Chiego
Administration Administration Administration Administration
Prevention Building Inspection
Operations Planning
Training
Emergency Mgmt.
Convention and Economic Development Information Technology Golf
Visitors Bureau Bob Farley Tessa Allberg -4 Russell Pulley
P.W. McCallum
Administration, Sales & Administration Administration Golf Maintenance
Promotions, Heritage Geographic Information System "" Pro Shop
Programs &Preservation,
Convention Center, Festivals
&Events, Grapevine Vintage
Railroad, Grapevine Visitor Human Resources
Shuttle, Wine Pouring Rachel HUltt
Society,
Sister Cities Program Administration
vii
CITY OF GRAPEVINE, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
HOME RULE, COUNCIL-MANAGER FORM OF GOVERNMENT
William D. Tate
MAYOR
CITY COUNCIL
Darlene Freed, Mayor Pro Tern
Chris Coy Leon Leal
Paul Slechta Duff O'Dell
Sharron Rogers
Bruno Rumbelow
CITY MANAGER
Jennifer Hibbs
ASSISTANT CITY MANAGER
Greg Jordan
CHIEF FINANCIAL OFFICER
viii
FINANCIAL SECTION
THIS PAGE LEFT BLANK INTENTIONALLY
PATTILLO, BROWN & BILL, L.L.P.
401 West State Highway
Waco,Texas 76710
254.772.4901 pbhcpa.com
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and
Members of the City 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 the City of Grapevine, Texas (the "City"), as of and for the year ended September 30, 2019,
and the related notes to the financial statements, which collectively comprise the City's basic financial
statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers internal control relevant to the entity's preparation and
fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
1
OFFICE LOCATIONS ilk)
TEXAS I Waco Temple I Hillsboro I Houston 74to AICPA
NEW MEXICO Albuquerque GAQC Member
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, the discretely
presented component unit, each major fund, and the aggregate remaining fund information of the City of
Grapevine, Texas, as of September 30, 2019, and the respective changes in financial position, and, where
applicable, cash flows thereof for the year then ended in accordance with accounting principles generally
accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis and required supplementary information, as listed in the table of
contents, be presented to supplement the basic financial statements. Such information, although not a part of
the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it
to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States of
America, which consisted of inquiries of management about the methods of preparing the information and
comparing the information for consistency with management's responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements. We do not
express an opinion or provide any assurance on the information because the limited procedures do not provide
us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The introductory section, combining and individual
nonmajor fund financial statements and schedules, and statistical section are presented for purposes of
additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and schedules are the responsibility
of management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to
prepare the basic financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America. In our
opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated, in
all material respects, in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in
the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 12,
2020, on our consideration of the City's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.
The purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City's internal control over financial reporting and
compliance.
Pa-V�i1oi Z,�
Waco, Texas
March 12, 2020
2
MANAGEMENT'S
DISCUSSION AND ANALYSIS
THIS PAGE LEFT BLANK INTENTIONALLY
Management's Discussion and Analysis
As management of the City of Grapevine (the "City"), we offer readers of the City's financial statements this
narrative overview and analysis of the financial activities of the City for the fiscal year ended September 30,
2019.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred
inflows of resources at the close of the most recent fiscal year by$416,703,317 (net position).
• The City's total net position increased by $36,420,924 from operations. $36,870,956 of this
increase was attributable to governmental activities and a decrease of$450,032 was due to
business-type activities.
• At the close of the current fiscal year, the City's governmental funds reported combined fund
balances of$156,678,991, an increase of$1,277,659 from the prior year.
• At the end of the current fiscal year, unassigned fund balance for the General Fund was
$12,185,859 or 22.6% of total General Fund expenditures.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City's basic financial statements.
The City's basic financial statements comprise three components: 1) government-wide financial statements,
2)fund financial statements, and 3) notes to the financial statements. This report also contains supplementary
intended to furnish additional detail to support the basic financial statements themselves.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City's
finances, in a manner similar to a private-sector business.
The Statement of Net Position presents information on all of the City's assets, deferred outflows (inflows) of
resources, and liabilities,with the difference reported as net position. Over time, increases or decreases in net
position may serve as a useful indicator of whether the financial position of the City is improving or
deteriorating.
The Statement of Activities presents information showing how the City's net position changed during the fiscal
year.All changes in net position are reported as soon as the underlying event giving rise to the change occurs,
regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for
some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but
unused compensated absences).
Both of the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are
intended to recover all or a significant portion of their costs through user fees and charges (business-type
activities). The governmental activities of the City include general government, public safety, culture and
recreation, public works, transportation, tourism and economic development. The business-type activities of
the City include water and sewer services and the lake enterprise activities (golf course).
3
The government-wide financial statements include not only the City itself(known as the primary government),
but also include the Heritage Foundation which is a legally separate entity for which the City is financially
accountable. Financial information for this component unit is reported separately from the financial information
presented for the primary government itself. The Tax Increment Reinvestment Zones Numbers One and Two,
the Crime Control and Prevention District (Crime District), and the Grapevine 4B Economic Development
Corporation, although legally separate, function for all practical purposes as departments of the City, and
therefore have been included as an integral part of the primary government.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City, like other state and local governments, uses fund
accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of
the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. The
fund financial statements for governmental funds, proprietary funds, and fiduciary funds can be found in the
financial section of this report.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities
in the government-wide financial statements. However, unlike the government-wide financial statements,
governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well
as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in
evaluating a government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements,
it is useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. By doing so, the reader may better
understand the long-term impact of the City's near-term financing decisions. Both the governmental fund
balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances
provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains 19 individual governmental funds. Information is presented separately in the governmental
fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund
balances for the General, Hotel Occupancy Tax Fund, Crime District Fund, 4B— Economic Development Fund,
4B—Transit Fund, Debt Service Fund,TIF#1 Capital Projects Fund and General Facilities and Equipment Fund,
all of which are considered to be major funds.
Data from the other 11 governmental funds are combined into a single, aggregate presentation. Individual fund
data for each of these non-major governmental funds is provided in the form of combining statements in the
combining and individual fund statements and schedules section of this report.
Proprietary Funds
The City maintains two different types of proprietary funds. Enterprise funds are used to report the same
functions presented as business-type activities in the government-wide financial statements. The City uses
enterprise funds to account for its Water and Sewer Fund, and Lake Enterprise Fund (golf course). Internal
service funds are an accounting device used to accumulate and allocate costs internally among the City's
various functions. The City uses an internal service fund to account for its document management services.
Because these services predominantly benefit the governmental rather than business-type functions, they
have been included within the governmental activities in the government-wide financial statements.
Proprietary funds provide the same type of information as the government-wide financial statements, only in
more detail. The proprietary fund financial statements provide separate information for the Water and Sewer
Fund and the Lake Enterprise Fund, which are both considered to be major funds.
4
Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary
funds are not reflected in the government-wide financial statements because the resources of those funds are
not available to support the City's own programs. The accounting used for fiduciary funds is similar to the
accounting used for proprietary funds.
Agency funds, one type of fiduciary fund, are used to report resources held by the City in a custodial capacity
for individuals, private organizations, or other governments. Agency funds are used by the City to account for
funds held for the Employee Activity Fund, the Industrial Development Corporation, and the W.D. Tate
Scholarship Fund. See Note I for additional information pertaining to fiduciary funds.
Notes to the financial statements
The notes provide additional information that is necessary to acquire a full understanding of the data provided
in the government-wide and fund financial statements.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents required
supplementary information. The required supplementary information section of this report includes budgetary
comparison schedules for the General Fund and major special revenue funds with legally adopted budgets
which include the Hotel Occupancy Tax Fund, Crime District Fund, 4B Economic Development Fund, and 4B
Transit Fund. This section of the report also includes schedules detailing the City's progress in funding its
liabilities related to providing pension and OPEB benefits to its employees.
The combining and individual fund statements and schedules referred to earlier in connection with nonmajor
governmental funds are presented immediately following the required supplementary information on the City's
pension and OPEB plans.
GOVERNMENT-WIDE OVERALL FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's financial position.
As of September 30, 2019, the City's assets and deferred outflows of resources exceeded liabilities and
deferred inflows of resources by$416,703,317.
CITY OF GRAPEVINE'S NET POSITION
Governmental Activities Business-type Activities Totals
2019 2018 2019 2018 2019 2018
Current and other assets $ 203,336,448 $ 179,649,835 $ 32,287,782 $ 36,878,600 $ 235,624,230 $ 216,528,435
Capital assets 377,806,721 344,986,936 135,600,810 128,598,748 513,407,531 473,585,684
Total assets 581,143,169 524,636,771 167,888,592 165,477,348 749,031,761 690,114,119
Deferred outflows of
resources 21,967,086 11,497,781 2,302,431 1,229,689 24,269,517 12,727,470
Long-term liabilities 289,074,649 264,986,869 22,942,098 21,333,900 312,016,747 286,320,769
Other liabilities 29,328,287 25,550,915 4,842,425 3,051,607 34,170,712 28,602,522
Total liabilities 318,402,936 290,537,784 27,784,523 24,385,507 346,187,459 314,923,291
Deferred inflows of
resources 9,161,829 7,652,986 1,248,673 713,671 10,410,502 8,366,657
Net position:
Net investment
in capital assets 241,514,277 226,571,617 131,141,096 125,603,797 372,655,373 352,175,414
Restricted 95,250,803 80,077,822 3,713,745 4,187,117 98,964,548 84,264,939
Unrestricted ( 61,219,590) ( 68,705,657) 6,302,986 11,816,945 ( 54,916,604) ( 56,888,712)
Total net position $ 275,545,490 $ 237,943,782 $ 141,157,827 $ 141,607,859 $ 416,703,317 $ 379,551,641
5
The largest portion of the City's net position ($372,655,373) reflects its investment in capital assets (e.g., land,
building, equipment, improvements, construction in progress, and infrastructure), less any debt used to
acquire capital assets still outstanding. The City uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City's investment in capital
assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be
provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
An additional portion of the City's net position represents resources that are subject to external restrictions on
how they may be used. Restricted net position includes (1) use of impact fees for construction purposes
($3,713,745), (2) debt service ($18,049,590), (3) capital projects ($58,590,543), (4) court security and
technology ($404,011), (5) public safety ($746,509), (6) records preservation ($9,893), (7) economic
development ($3,553,120), (8) transportation ($16,961), (9) culture and recreation ($192,671), and (10)
tourism ($13,687,505).
For fiscal year-end 2019, the City is able to report positive balances in two categories of net position for the
City as a whole. Unrestricted net position is a deficit for the governmental activities and in total for the City.
This is due in part to the recognition of the net pension liability under the requirements of GASB Statement
No. 68, the recognition of the net OPEB liability under GASB Statement No. 75, and also due to the fact that
the City has a substantial amount of debt related to TIF #2 which is not capital-related.
6
Analysis of the City's Operations
The following table provides a summary of the City's operations for the year ended September 30, 2019, and
2018:
CITY OF GRAPEVINE'S CHANGES IN NET POSITION
Governmental Activities Business-type Activities Totals
2019 2018 2019 2018 2019 2018
Revenues:
Program revenues:
Charges forservices $ 19,951,339 $ 21,295,533 $ 27,601,935 $ 31,397,665 $ 47,553,274 $ 52,693,198
Operating grants and
contributions 992,824 2,200,146 - - 992,824 2,200,146
Capital grants and
contributions 23,230,376 5,006,869 6,308,642 4,984,062 29,539,018 9,990,931
General revenues:
P ro pertytaxes 30,848,837 28,561,385 - - 30,848,837 28,561,385
Hotel occupancytaxes 20,767,302 19,875,456 20,767,302 19,875,456
Sales taxes 59,297,844 56,029,012 59,297,844 56,029,012
M ixed beverage taxes 2,145,940 1,792,674 2,145,940 1,792,674
Franchise taxes 6,898,111 7,144,793 - - 6,898,111 7,144,793
Investment earnings 3,783,555 2,736,937 650,207 579,693 4,433,762 3,316,630
Gain on sale of capital assets 2,075,942 261,806 - - 2,075,942 261,806
Miscellaneous 420,084 331,280 - 420,084 331,280
Total revenues 170,412,154 145,235,891 34,560,784 36,961,420 204,972,938 182,197,311
Expenses:
General government 18,382,135 19,248,979 - - 18,382,135 19,248,979
Public safety 38,471,701 35,954,134 38,471,701 35,954,134
Culture and recreation 21,340,649 19,596,646 21,340,649 19,596,646
Public works 17,929,564 16,825,724 17,929,564 16,825,724
Transportation 10,046,960 9,466,562 10,046,960 9,466,562
Eco no m ic develo pm ent 5,122,449 14,936,191 5,122,449 14,936,191
Tourism 23,886,464 21,561,351 23,886,464 21,561,351
Interest on long-term debt 5,311,983 5,173,776 - - 5,311,983 5,173,776
Water and sewer - - 23,901,013 22,411,243 23,901,013 22,411,243
Lake enterprise - - 4,159,096 3,216,504 4,159,096 3,216,504
Total expenses 140,491,905 142,763,363 28,060,109 25,627,747 168,552,014 168,391,110
Increases in net position
before transfers 29,920,249 2,472,528 6,500,675 11,333,673 36,420,924 13,806,201
Transfers 6,950,707 3,019,894 ( 6,950,707) ( 3,019,894)
Change in net position 36,870,956 5,492,422 ( 450,032) 8,313,779 36,420,924 13,806,201
Net position,beginning 237,943,782 262,262,744 141,607,859 136,789,411 379,551,641 399,052,155
Prior period adjustment 730,752 ( 29,811,384) - ( 3,495,331) 730,752 ( 33,306,715)
Net position,beginning(restated) 238,674,534 232,451,360 141,607,859 133,294,080 380,282,393 365,745,440
Net position,ending $ 275,545,490 $ 237,943,782 $ 141,157,827 $ 141,607,859 $ 416,703,317 $ 379,551,641
Governmental activities — Governmental activities increased the City's net position by $36,870,956 from
operations. Broadly speaking, this increase can be attributed to a significant increase in revenues coupled
with a decrease in expenses.
In total, revenues for fiscal year 2019 were 17.3% higher than the previous fiscal year and the City experienced
increases in several categories of revenue. The largest of these increases, capital grants and contributions,
was a result of the City recording intergovernmental revenue for the train station construction project for
$20,000,000. Another increase came from property taxes, which can be attributed to increased tax appraisal
valuations as the overall tax rate for the City remained flat between FY 2018 and FY 2019. Additionally, hotel
occupancy, sales, and mixed beverage taxes all experienced increases which were caused by an acceleration
in economic activity within the City.
7
The City's operating expenses for 2019 decreased by$2,271,458 or 1.6%.The primary reason for this change
was that TIF #1 project expenses decreased from the prior year by $9.6 million while other expenses
increased. These increases include a$2.5 million for public safety, $1.7 million for culture and recreation, and
$2.3 million for Tourism. Budgeted payroll increases(2.5% market adjustment and an additional 2-5%for merit
and steps) and changes to how the City allocated insurance related costs made up most of the changes in
expenses for these functions for FY 2019. Other increases can be attributed to costs incurred to restore
damages due to flooding at Grapevine Lake.
Governmental Activities Revenues By
Source
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
$0
SALES TAXES PROPERTY CHARGESFOR HOTEL CAPITAL FRANCHISE OTHER
TAXES SERVICES OCCUPANCY GRANTS AND TAXES
TAXES CONTRIBUTIONS
■2019❑2018
Governmental Activities - Functional Expenses Comparison
$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000.000
$5,000,000 JIM
PUBLIC SAFETY GENERAL CULTUREAND TOURISM PUBLIC WORKS ECONOMIC TRANSPORTATION INTEREST ON
GOVERNMENT RECREATION DEVELOPMENT LONG-TERM DEBT
02019 ■2018
8
Business-type activities— In total, the business-type activities decreased the City's net position by $450,032.
Water and Sewer Utilities increased net position by $489,659 while Lake Enterprise (golf) decreased net
position by $939,691.
The change in net position for the business-type activities was impacted by the Water and Sewer Fund in the
following ways: (1)the Water and Sewer Fund received $5.9 million in capital contributions of easements and
infrastructure from developers during FY 2019, (2) the City experienced decreased consumption demand as
a result of higher rainfall for FY 2019 which decreased charges for services revenue by$2.4 million, (3)water
purchases, storage and treatment costs decreased by approximately $1.6 million for FY 2019 as a result of
decreased demand, and (4)budgeted increases in salaries and benefits expenses resulted in actual increased
for FY 2019 of$1.7 million or 4.9%.
The Lake Enterprise Fund (golf course) had an impact on the change in net position for the business-type
activities because of a decline in operations over the fiscal year related to heavy rainfall and flooding at Lake
Grapevine and because of the closure of the main road leading to the golf course due to structural issues.
Given this, revenues were still able to increase by $192,402 and related expenses increased in total by
$947,638 or 2.95%, which included budgeted salary increases ranging from 2.5-5%.
Business-type Activities Revenue and Expense
Comparison
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
2019 2018
■Operating Revenues ■Expenses
9
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
Governmental funds — The focus of the City's governmental funds is to provide information on near-term
inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's
financing requirements. In particular, unassigned fund balance may serve as a useful measure of a
government's net resources available for discretionary use as they represent the portion of fund balance which
has not yet been limited to use for a particular purpose by either an external party, the City itself, or a group
or individual that has been delegated authority to assign resources for use for particular purposes by the City
Council.
As of the end of the current fiscal year,the City's governmental funds reported combined ending fund balances
of $156,678,991, an increase of $1,277,659 compared with the prior year. Unassigned fund balance is
$7,695,414 (4.9%), which is available for spending at the City's discretion. The remainder of fund balance is
not available for new spending because it is (1) nonspendable ($1,362,854) (2) restricted for debt service,
capital projects, court security and technology, public safety, economic development, transportation, tourism,
records preservation and culture and recreation programs ($104,006,685) (3) committed for stormwater
drainage and public arts ($2,770,436) (4) or assigned for economic development, capital projects, tourism,
public safety, culture and recreation programs, and OPEB plan contributions ($40,843,602).
Significant changes in fund balances of major funds are as follows:
General Fund —The General Fund is the chief operating fund of the City. At the end of FY 2019, unassigned
fund balance of the General Fund was $12,185,859, while total fund balance equaled $14,295,271. As a
measure of the General Fund's liquidity, it may be useful to compare both unassigned fund balance and total
fund balance to total General Fund expenditures. Unassigned fund balance represents approximately 22.6%
of total General Fund expenditures, while the total fund balance represents approximately 26.5% of that same
amount.
The fund balance of the General Fund decreased by $1,849,773 for FY 2019. Revenues increased in the
General Fund from FY 2018 to FY 2019 by $2,117,515. As mentioned previously in connection with the
governmental activities, the largest increases in revenues were from property, sales and mixed beverage
taxes. Property taxes increased by 3.82% or $433,059, sales taxes increased 5.58% or $1,577,019, mixed
beverage taxes increased by 19.71% or$353,266, and total revenues increased by 3.65% or$2,113,802 year
over year. Property tax revenue increases are the result of growth in appraised values for FY 2019. Sales
and mixed beverage tax increases can be attributed to general economic gains in our local economy following
the expansion of hotels, restaurants, and other businesses within the City as management continuously seeks
to foster growth.
The primary reason for expenditures increasing across almost all functions was related to an increase in
salaries and benefits costs. These costs grew as a 2.5-7.5% increase in wages was allocated as a part of the
FY 2019 budget. Costs have also increased for the City's Parks and Recreation Department related to grounds
maintenance as landscaping projects have been completed around the City over the last few years.
Additionally, operating transfers were made to capital projects funds as budgeted, including $3,000,000 to the
Quality of Life Fund. Operating transfers to the Crime District Fund increased to over $3 million for FY 2019
to help fund the increasing salary costs seen in that fund, and an additional transfer of$3,200,000 was made
to the Capital Acquisition Fund to offset capital outlays planned in the FY 20 budget.
Special Revenue — Hotel Occupancy Tax Fund — Fund balance in the Hotel Occupancy Tax Fund increased
for FY 2019 by$3,245,402. This increase can primarily be attributed to an increase in hotel occupancy taxes
received which is the result of an overall gains made in the local economy and FY 2019 is the first full year
that includes the Gaylord Texan Resort expansion that opened in late FY 2018. The project increased the
number of rooms by 303 and has also provided the facility with an additional 86,000 square feet of meeting
space.
Expenditures in the Hotel Occupancy Tax Fund increased from $20,788,326 in FY 2018 to $23,608,226 in FY
2019. This increase ($2,819,900) was budgeted for in FY 2019 and even with this increase, expenditures
ended up $1,444,514 under budget for FY 2019.
10
Salaries were increased in this fund in accordance with budget from 2.5-4.5%, but, due to turnover, salaries
and related benefit costs remained largely under budget.Additionally, marketing and promotional expenditures
were budgeted to exceed $4 million for FY 2019 but these cost ended the year at only $3.3 million, but this
was still an increase of almost$1 million over the prior year.
Special Revenue — Crime District Fund — Fund balance of the Crime District Fund decreased by $285,945.
Sales tax revenues, which are the primary funding source of the Crime District Fund, performed better than
budgeted expectations for FY 2019 which was also an increase of$893,385 over FY 2018. Although in total
revenues performed better than budget, expenditures exceeded budget by over $543,428. These overages
can be primarily attributed to salary and benefit cost overruns.
Special Revenue — 413 — Economic Development — The 413-Economic Development fund balance increased
by $5,732,378 over last fiscal year. This increase can be primarily attributed to the sale of land. The City
received proceeds from this sale in the amount of$4,208,462. Expenditures in this fund stayed consistent with
the prior year while sales tax collections increased $137,367 because of previously mentioned economic gains
seen in the local economy.
Special Revenue — 413 — Transit — The 4B-Transit fund balance increased by $8,177 over last fiscal year.
Sales tax collected in this fund has been pledged to the Fort Worth Transit Authority (the "T"). Any sales tax
collections in this fund, less half of the operating costs of the City's visitor shuttle service, are distributed to
the "T"to help fund commuter rail service in Grapevine. Sales taxes in this fund also increased for the current
period, over FY 2018, because of general economic gains in the local economy, and as the revenues in this
fund increase, so do the corresponding expenditures.
Debt Service Fund — The total fund balance of $7,749,766 in the Debt Service Fund is restricted for the
payment of debt obligations. This balance has declined by $1,169,001 and this is attributable to the City
issuing refunding bonds which resulted in excess expenditures over receipts.
Capital Projects — TIF #1 — The net change in fund balance for the TIF #1 capital projects fund for FY 2019
was $1,236,760. This decrease can be attributed to contractual distributions made by the City to the school
district to fund the final stages of construction of two multipurpose facilities. Expenditures related to these
projects have decreased over the prior year as these projects have neared completion.
Capital Projects — General Facilities and Equipment— The fund balance decreased $864,718 from the prior
year. The primary project contributing to the capital outlay of$32,923,636 in this fund is the Grapevine Main
train station.Additionally, $23,465,000 in general obligation bonds were issued in FY 2019.These bonds were
issued to fund the construction of animal shelter facilities, fire stations, and a multi-use facility and clubhouse
at the Grapevine Municipal Golf Course.
Proprietary Funds—The City of Grapevine's proprietary funds provide the same type of information found in the
government-wide financial statements, but in more detail. Factors concerning the finances of the proprietary
funds have already been addressed in the discussion of the City's business-type activities.
General Fund Budgetary Highlights
Significant amendment changes:
There were no changes to budgeted revenues or expenditures for the fiscal year 2019.
Significant budget variances:
Revenues exceeded the budget by$607,728 primarily due to increases in property, sales and mixed beverage
taxes. These revenues exceeded budget because of better than expected economic conditions within the
City for FY 2019 and because property valuations increased for FY 2019.
11
Expenditures, in total, were under budget by $1,112,583. Excess salary and related benefit expenditures as
well as unbudgeted capital outlay and debt service expenditures led to the negative variances seen within the
General Fund.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital assets—The City's investment in capital assets for its governmental and business-type activities as
of September 30, 2019, amounts to $513,424,623 (net of accumulated depreciation). This investment in
capital assets includes land, buildings, improvements, machinery and equipment, infrastructure, intangible
assets and construction in progress. The total net increase in the City's investment in capital assets for the
current fiscal year was $39,838,939 (8%).
Major capital asset events during the current fiscal year included the following:
• Grapevine Main and Harvest Hall construction of$29,025,174 was added to construction in progress.
• Construction in progress additions of$3,723,603 were added for the rebuild/remodel of 4 fire stations,
along with $580,119 added for the new Bark Park.
• Acquisition of vehicles and equipment totaling $2,874,295, including $424,551 related to tourism,
$280,820 related to public safety, $1,226,260 related to public works, and $701,315 related to culture
and recreation.
• Oak Grove Softball renovations of$5,135,415 were added to construction in progress.
• Parks and recreation improvement projects of$3,273,552 were completed, including $2,316,207 for
the Green Ribbon project and $793,386 related to Botanical Gardens and Bessie Mitchell House
Improvements.
• Street construction totaling $1,155,653 was added to construction in progress related to Dallas Road,
Glade Road, Nash Street, and Berry Street.
• Streets projects of $707,698 were completed and transferred to infrastructure assets, including S.
Austin Street and S. Ruth Street improvements.
• The Water and Sewer Fund completed $753,462 in projects, which extended and improved the City's
water and sewer system. Donated water and sewer assets totaled $5,982,472.
CITY OF GRAPEVINE'S CAPITAL ASSETS AT YEAR-END
Governmental Activities Business-type Activities Totals
2019 2018 2019 2018 2019 2018
Land $ 35,136,147 $ 37,257,669 $ 593,970 $ 593,970 $ 35,730,117 $ 37,851,639
Right-of-way/easements 78,561,656 78,359,677 48,705,515 44,492,955 127,267,171 122,852,632
Construction in progress 71,385,628 32,480,427 5,431,218 2,177,296 76,816,846 34,657,723
Buildings 94,212,671 95,488,055 661,923 705,280 94,874,594 96,193,335
Improvements other
than buildings 25,924,027 24,586,781 1,163,853 1,551,452 27,087,880 26,138,233
Machinery and equipment 16,226,083 17,394,686 2,003,659 1,748,655 18,229,742 19,143,341
Water storage rights - - 27,061 44,150 27,061 44,150
Infrastructure 56,360,509 59,419,641 77,013,611 77,284,990 133,374,120 136,704,631
Total $ 377,806,721 $ 344,986,936 $ 135,600,810 $ 128,598,748 $ 513,407,531 $ 473,585,684
Additional information on the City's capital assets can be found in Note V of the notes to the financial
statements.
12
Long-term debt—At the end of the current fiscal year, the City had total bonded debt outstanding of
$186,703,232. Of this amount, $155,223,082 comprises debt backed by the full faith and credit of the City.
CITY OF GRAPEVINE'S OUTSTANDING BONDS AND NOTES PAYABLE AT YEAR-END
Governmental Activities Business-type Activities Totals
2019 2018 2019 2018 2019 2018
General obligation bonds $ 92,055,000 $ 70,080,000 $ 895,000 $ 1,730,000 $ 92,950,000 $ 71,810,000
Certificates of obligation 41,927,553 49,658,143 8,200,000 8,600,000 50,127,553 58,258,143
Revenue bonds 30,015,000 32,480,000 - - 30,015,000 32,480,000
Contractual obligations 4,755,080 5,505,000 4,755,080 5,505,000
Tax notes 605,000 1,195,000 - - 605,000 1,195,000
Premium on bonds issued 7,844,073 6,758,570 406,526 463,444 8,250,599 7,222,014
$ 177,201,706 $ 165,676,713 $ 9,501,526 $ 10,793,444 $ 186,703,232 $ 176,470,157
Additional information on the City's long-term debt can be found in Note IX of the notes to the financial
statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES
In the fiscal year 2020 budget, total City revenues are budgeted at$184.2 million, an increase of$6.3 million
(3.5%)from the previous year. Certified assessed valuations, including estimated values on properties under
protest, increased by 6.4%for the FY 2020 budget compared to an increase of 8.6%for FY 2019. In response
to the projected growth in values, the City lowered the tax rate to $0.284271 per$100 of valuation.
The economy continues to be strong for the City and the Dallas-Fort Worth Metroplex in general. The City
continues to focus on quality of life, economic development and cultural, educational and recreational
amenities the community has to offer.
The General Fund reserve requirement is expected to remain at approximately 22%of budgeted expenditures
for the fiscal year 2020. This exceeds the requirement of 20% of budgeted expenditures.
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
The financial report is designed to provide our citizens, customers, investors and creditors with a general
overview of the City's finances. If you have questions about this report or need additional information, contact
the Finance Division, City of Grapevine, 200 S. Main Street, Grapevine, Texas 76051.
13
THIS PAGE LEFT BLANK INTENTIONALLY
BASIC
FINANCIAL STATEMENTS
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
STATEMENT OF NET POSITION
SEPTEMBER 30, 2019
Component
Primary Government Unit
Governmental Business-type Heritage
Activities Activities Total Foundation
ASSETS
Cash and investments $ 161,634,047 $ 20,570,841 $ 182,204,888 $ 547,383
Receivables,net:
Taxes 12,579,047 - 12,579,047 -
Accounts 1,751,714 3,405,690 5,157,404
Notes 3,858,000 - 3,858,000
Internal balances 695,436 ( 695,436) - -
Due from primary government - - - 7,410
Due from other governments 21,104,359 - 21,104,359 -
Inventory 541,411 84,347 625,758
Accrued interest 88,281 1,772 90,053 32
Prepaid expenses 467,458 40,256 507,714
Deposits 4,907 - 4,907
Restricted assets:
Cash and investments - 8,880,312 8,880,312
Assets held for sale 611,788 - 611,788 -
Capital assets(net of accumulated depreciation):
Non-depreciable 185,083,431 54,730,703 239,814,134 450,067
Depreciable 192,723,290 80,870,107 273,593,397 691,994
Total assets 581,143,169 167,888,592 749,031,761 1,696,886
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions 17,095,372 1,602,414 18,697,786 -
Deferred outflows related to OPEB 4,187,562 619,692 4,807,254
Deferred loss on bond refunding 684,152 80,325 764,477
Total deferred outflows of resources 21,967,086 2,302,431 24,269,517 -
LIABILITIES
Accounts payable 16,163,676 3,080,181 19,243,857 9,015
Contracts and retainage payable 2,846,851 205,080 3,051,931 -
Accrued and other liabilities 3,971,814 522,949 4,494,763
Developer deposits 1,588,206 - 1,588,206
Interest payable 793,633 37,796 831,429
Due to component unit 7,410 - 7,410
Due to other governments 211,866 211,866 -
Unearned revenue 3,744,831 - 3,744,831 1,955
Customer deposits - 996,419 996,419 -
Noncurrent liabilities:
Due in one year 13,992,461 929,980 14,922,441
Due in more than one year 275,082,188 22,012,118 297,094,306 -
Totalliabilities 318,402,936 27,784,523 346,187,459 10,970
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions 1,974,708 185,096 2,159,804 -
Deferred inflows related to OPEB 7,187,121 1,063,577 8,250,698
Total deferred inflows of resources 9,161,829 1,248,673 10,410,502
NET POSITION
Net investment in capital assets 241,514,277 131,141,096 372,655,373 1,142,061
Restricted for:
Use of impact fees - 3,713,745 3,713,745 -
Debt service 18,049,590 - 18,049,590
Capital projects 58,590,543 58,590,543
Court security and technology 404,011 404,011
Public safety 746,509 746,509
Records preservation 9,893 9,893
Economic development 3,553,120 3,553,120
Transportation 16,961 16,961
Culture and recreation 192,671 192,671
Tourism 13,687,505 - 13,687,505 -
Unrestricted ( 61,219,590) 6,302,986 ( 54,916,604) 543,855
Total net position $ 275,545,490 $ 141,157,827 $ 416,703,317 $ 1,685,916
The accompanying notes are an integral
part of these financial statements. 14
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
STATEMENT OF ACTIVITIES
SEPTEMBER 30, 2019
Program Revenue
Operating
Charges for Grants and Capital Grants
Functions/Programs Expenses Services Contributions and Contributions
Primary government:
Governmental activities:
General government $ 18,382,135 $ 2,049,869 $ 115,585 $ 201,979
Public safety 38,471,701 2,199,716 673,363 -
Culture and recreation 21,340,649 4,393,531 111,157 300,000
Public works 17,929,564 3,673,585 92,719 2,692,785
Transportation 10,046,960 - - 20,035,612
Economic development 5,122,449 - - -
Tourism 23,886,464 7,634,638 - -
Interest on long-term debt 5,311,983 - - -
Total governmental activities 140,491,905 19,951,339 992,824 23,230,376
Business-type activities:
Water and sewer 23,901,013 24,278,495 - 6,308,642
Lake Enterprise 4,159,096 3,323,440 - -
Total business-type activities 28,060,109 27,601,935 - 6,308,642
Total primary government $ 168,552,014 $ 47,553,274 $ 992,824 $ 29,539,018
Component unit:
Heritage Foundation $ 174,685 $ 22,293 $ 108,497 $ 300
General revenues:
Taxes:
Property
Franchise
Hotel occupancy
Sales
Mixed beverage
Unrestricted investment income
Gain on sale of capital assets
Miscellaneous
Transfers
Total general revenues and transfers
Change in net position
Net position-beginning
Prior period adjustment
Net position-beginning, as restated
Net position-ending
The accompanying notes are an integral
part of these financial statements. 15
Net(Expense)Revenue and Changes in Net Position Component
Primary Government Unit
Governmental Business-type
Activities Activities Total Heritage Foundation
$( 16,014,702) $ - $( 16,014,702) $ -
( 35,598,622) - ( 35,598,622) -
( 16,535,961) - ( 16,535,961) -
( 11,470,475) - ( 11,470,475) -
9,988,652 - 9,988,652 -
( 5,122,449) - ( 5,122,449) -
( 16,251,826) - ( 16,251,826) -
( 5,311,983) - ( 5,311,983) -
( 96,317,366) - ( 96,317,366) -
- 6,686,124 6,686,124 -
( 835,656) ( 835,656) -
- 5,850,468 5,850,468 -
$( 96,317,366) $ 5,850,468 $( 90,466,898) $ -
( 43,595)
$ 30,848,837 $ - $ 30,848,837 $ -
6,898,111 - 6,898,111 -
20,767,302 - 20,767,302 -
59,297,844 - 59,297,844 -
2,145,940 - 2,145,940 -
3,783,555 650,207 4,433,762 6,813
2,075,942 - 2,075,942 -
420,084 - 420,084 9,182
6,950,707 ( 6,950,707) - -
133,188,322 ( 6,300,500) 126,887,822 15,995
36,870,956 ( 450,032) 36,420,924 ( 27,600)
237,943,782 141,607,859 379,551,641 1,713,516
730,752 - 730,752 -
238,674,534 141,607,859 380,282,393 1,713,516
$ 275,545,490 $ 141,157,827 $ 416,703,317 $ 1,685,916
16
CITY OF GRAPEVINE, TEXAS
BALANCE SHEET
GOVERNMENTALFUNDS
SEPTEMBER 30, 2019
Special Revenue
Hotel Crime 4B-Economic
General Occupancy Tax District Development 413-Transit
ASSETS
Cash and investments $ 6,938,122 $ 23,321,289 $ $ 11,262,157 $ 686,284
Receivables(net of allowances
for uncollectibles):
Accounts 1,358,318 57,206 40,123 -
Taxes 5,837,887 1,501,354 2,494,093 738,860 1,822,138
Accrued interest 924 2,527 14 664 40
Notes - - - - -
Inventory 532,803 8,608 -
Due from other funds 6,042,889 - - -
Due from other governments 213,033 - 6,917 -
Prepaid items 321,934 119,537 25,987 -
Deposits 4,907 - - -
Assets held for sale 349,078 262,710 - - -
Total assets 21,599,895 25,273,231 2,527,011 12,041,804 2,508,462
LIABILITIES
Accounts payable 1,929,731 2,967,599 375,497 184,476 2,491,501
Accrued liabilities 2,761,610 352,188 770,974 26,944 -
Due to other funds - - 2,418,966 -
Due to component unit - 7,410 - -
Due to other governments 209,822 596 -Unearned revenue 1,699,693 1,682,194 6,917 -
Developer deposits - - - -
Total liabilities 6,600,856 5,009,987 3,572,354 211,420 2,491,501
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 703,768 - - - -
Total deferred inflows
of resources 703,768 - -
FUND BALANCES(DEFICITS)
Nonspendable:
Inventory 532,803 8,608 - -
Prepaid items 321,934 119,537 25,987 -
Deposits 4,907 - - -
Property held for sale 349,078 - -
Restricted for:
Debt service - - 1,402,400
Capital projects - -
Court security and technology - -
Economic development - 1,263,734
Public safety - -
Records preservation - -
Tourism 13,687,505 - -
Transportation - - 16,961
Culture and recreation - - -
Committed for:
Stormwater drainage operations - -
Public arts - -
Assigned for:
Economic development - 9,164,250
Capital projects - -
Tourism 6,447,594 -
Culture and recreation - -
Public safety - - -
OPEB 900,690 - - -
Unassigned 12,185,859 - ( 1,071,330) - -
Total fund balances 14,295,271 20,263,244 ( 1,045,343) 11,830,384 16,961
Total liabilities,deferred
inflows of resources and
fund balances $ 21,599,895 $ 25,273,231 $ 2,527,011 $ 12,041,804 $ 2,508,462
The accompanying notes are an integral
part of these financial statements. 17
Capital Projects
General Nonmajor Total
Facilities and Governmental Governmental
Debt Service TIF#1 Equipment Funds Funds
$ 7,725,173 $ 9,400,534 $ 63,390,244 $ 38,735,523 $ 161,459,326
10,877 - - 285,190 1,751,714
184,715 - - 12,579,047
451 138 81,527 1,986 88,271
- 3,858,000 - 3,858,000
- - 541,411
- - 6,042,889
20,500,000 384,409 21,104,359
- - 467,458
4,907
- - - - 611,788
7,921,216 9,400,672 87,829,771 39,407,108 208,509,170
- - 6,261,448 1,947,555 16,157,807
- 60,098 3,971,814
2,928,487 5,347,453
- 7,410
- 1,448 211,866
8,333 347,694 3,744,831
400,000 1,188,206 1,588,206
- 6,669,781 6,473,488 31,029,387
171,430 19,785,612 139,982 20,800,792
171,430 19,785,612 139,982 20,800,792
- - - 541,411
- 467,458
- 4,907
- - 349,078
7,749,786 - - 9,439,307 18,591,493
- 7,030,986 53,018,792 6,674,444 66,724,222
- - 404,011 404,011
2,369,686 - 3,633,420
- 746,509 746,509
9,893 9,893
- 13,687,505
- 16,961
192,671 192,671
1,778,396 1,778,396
992,040 992,040
- - 9,164,250
8,355,586 15,751,152 24,106,738
- - 6,447,594
220,476 220,476
3,854 3,854
- 900,690
- - - ( 3,419,115) 7,695,414
7,749,786 9,400,672 61,374,378 32,793,638 156,678,991
$ 7,921,216 $ 9,400,672 $ 87,829,771 $ 39,407,108 $ 208,509,170
18
CITY OF GRAPEVINE, TEXAS
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2019
Total fund balances-governmental funds balance sheet $ 156,678,991
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. 377,806,721
Certain receivables will not be collected soon enough to pay for the current period's expenditures
and are,therefore, reported as deferred inflows of resources in the funds:
Property taxes 125,764
Property tax penalties and interest 223,109
Court fines and fees 166,699
Ambulance billing 12,546
Intergovernmental receivables 19,833,625
Franchise Fees 360,867
Other 78,182
An internal service fund is used to charge the cost of document management equipment
acquisition and maintenance to individual funds. The assets and liabilities of the internal service
fund are included in governmental activities. 168,862
Accrued bond interest is not due and payable in the current period and, therefore, is not reported
in the funds. ( 793,633)
Retainage payable is not due and payable in the current period and, therefore, is not reported in
the funds. ( 2,846,851)
Long-term liabilities and deferred losses on bond refundings, reported as deferred outflows of
resources, are not due and payable in the current period and, therefore, are not reported in the
funds. A summary of these items are as follows:
Long-term liabilities:
Bonds payable ( 174,306,626)
Notes payable ( 605,000)
Compensated absences ( 4,201,857)
Sales tax obligation ( 2,290,080)
Deferred outflows of resources:
Deferred losses on bond refundings 684,152
Included in the items related to long-term liabilities is the recognition of the City's net pension
liability. The net position related to pensions included a deferred outflows of resources in the
amount of$17,095,357, a deferred inflows of resources in the amount of$1,947,708, and the net
pension liability of$50,596,069. ( 35,475,405)
Included in the items related to long-term liabilities is the recognition of the City's net OPEB
liability. The net position related to OPEB included a deferred outflows of resources in the amount
of $4,187,562, a deferred inflows of resources in the amount of $7,187,121, and the net OPEB
liability of$57,075,017. ( 60,074,576)
Net position of governmental activities $ 275,545,490
The accompanying notes are an integral
part of these financial statements. 19
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
SEPTEMBER 30, 2019
Special Revenue
Hotel Crime 4B-Economic
General Occupancy Tax District Development 413-Transit
REVENUES
Property tax $ 11,765,849 $ - $ $ - $
Hotel occupancy tax - 20,767,302 - -
Sales tax 29,863,646 - 14,563,884 4,393,875 10,476,439
Mixed beverage tax 2,145,940 - - - -
Franchise tax 6,435,472 - -
Licenses and permits 1,969,000 - - -
Intergovernmental 380,269 - 13,605 -
Charges for services 5,406,622 7,634,638 - 23,860
Fines and forfeitures 1,509,299 - 88,042 - -
Investment income 283,313 448,501 190,715 144,125 8,177
Contributions - - - - -
Miscellaneous 448,761 29,732 12,737 100 -
Totalrevenues 60,208,171 28,880,173 14,868,983 4,561,960 10,484,616
EXPENDITURES
Current:
General government 15,435,676 - 142,921 - -
Public safety 16,198,439 - 18,068,637 -
Culture and recreation 13,299,784 - - -
Public works 8,524,275 - -
Tourism - 22,413,522 -
Economic development - 1,301,974 -
Transportation - - - 10,046,960
Capital outlay 264,387 1,192,933 - -
Debt service:
Principal 118,558 - -
Interest - - -
Payment to bond refunding
escrow agent - -
Bond issuance costs - - -
Fiscal agent charges 4,210 1,771 - -
Total expenditures 53,845,329 23,608,226 18,211,558 1,301,974 10,046,960
EXCESS(DEFICIENCY)OF REVENUES
OVER(UNDER)EXPENDITURES 6,362,842 5,271,947 ( 3,342,575) 3,259,986 437,656
OTHER FINANCING SOURCES(USES)
Transfers in 3,907,798 529,479 3,056,630 - -
Transfers out ( 12,276,630) ( 2,556,024) - ( 1,736,070) ( 429,479)
Sale of capital assets 156,217 - 4,208,462 -
Issuance of debt - - -
Issuance of refunding debt - -
Premium on issuance of bonds - -
Insurance recoveries - - - -
Total other financing sources
and uses ( 8,212,615) ( 2,026,545) 3,056,630 2,472,392 ( 429,479)
NET CHANGE IN FUND BALANCES ( 1,849,773) 3,245,402 ( 285,945) 5,732,378 8,177
FUND BALANCES,BEGINNING 15,555,243 17,017,842 ( 759,398) 6,098,006 8,784
PRIOR PERIOD ADJUSTMENT 589,801 - - - -
FUND BALANCES,BEGINNING,
RESTATED 16,145,044 17,017,842 ( 759,398) 6,098,006 8,784
FUND BALANCES,ENDING $ 14,295,271 $ 20,263,244 $( 1,045,343) $ 11,830,384 $ 16,961
The accompanying notes are an integral
part of these financial statements. 20
Capital Projects
General Nonmajor Total
Facilities and Governmental Governmental
Debt Service TIF#1 Equipment Funds Funds
$ 12,271,795 $ 1,038,974 $ $ 5,806,220 $ 30,882,838
- - - 20,767,302
59,297,844
- 2,145,940
182,566 6,618,038
- 1,969,000
750,000 592,580 1,736,454
- 3,087,301 16,152,421
- - - 64,899 1,662,240
202,653 101,133 1,641,502 761,246 3,781,365
- - - 232,772 232,772
- - 115,585 338,269 945,184
12,474,448 1,140,107 2,507,087 11,065,853 146,191,398
- - 219,933 211,543 16,010,073
- 223,274 34,490,350
3,872,853 17,172,637
3,075,394 11,599,669
- - 22,413,522
2,376,867 1,430,250 5,109,091
- - - 10,046,960
- 32,923,636 11,612,706 45,993,662
10,590,590 - 1,854,920 12,564,068
5,261,727 739,778 6,001,505
6,077,493 - - 6,077,493
23,036 148,815 - 171,851
128,911 2,236 3,414 140,542
22,081,757 2,376,867 33,294,620 23,024,132 187,791,423
( 9,607,309) ( 1,236,760) ( 30,787,533) ( 11,958,279) ( 41,600,025)
2,454,135 - 5,000,000 9,361,782 24,309,824
- - ( 358,796) ( 17,356,999)
74,000 - 4,438,679
- 23,465,000 - 23,465,000
5,395,000 - - 5,395,000
589,173 1,383,815 - 1,972,988
- - 63,391 63,391
8,438,308 29,922,815 9,066,377 42,287,883
( 1,169,001) ( 1,236,760) ( 864,718) ( 2,891,902) 687,858
8,918,787 10,637,432 62,239,096 35,685,540 155,401,332
- - - - 589,801
8,918,787 10,637,432 62,239,096 35,685,540 155,991,133
$ 7,749,786 $ 9,400,672 $ 61,374,378 $ 32,793,638 $ 156,678,991
21
CITY OF GRAPEVINE, TEXAS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
SEPTEMBER 30, 2019
Net change in fund balances-total governmental funds $ 687,858
Amounts reported for governmental activities in the Statement of Activities are different because:
The net revenue/(expense) of certain activities of internal service funds are reported with
governmental activities.This is the change in net position of the internal service fund. 92,848
Governmental funds report capital outlays as expenditures. However, in the Statement of
Activities the cost of those assets is allocated over their estimated useful lives and reported
as depreciation. This is the amount of capital outlay recorded in the current period. 45,376,098
Governmental funds do not recognize capital assets contributed by other entities. However,
in the Statement of Activities, the acquisition cost of those assets is recognized as revenue,
then depreciated over their estimated useful lives. 2,240,248
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. ( 14,040,439)
The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade•
ins, and donations)is to decrease net position. ( 2,426,128)
The issuance of long-term debt (e.g. bonds) provides current financial resources to
governmental funds, while the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither transaction, however, has any
effect on net position. Also, governmental funds report the effect of premiums, discounts, and
similar items when debt is first issued, whereas the amounts are deferred and amortized in
the Statement of Activities. This amount is the net effect of these differences in the treatment
of long-term debt and related items.
Issuance of debt ( 30,832,988)
Repayment of principal of long-term debt 12,564,068
Bond refunding 6,204,629
Amortization of:
Premium on bond issuance 887,485
Loss on refunding ( 292,443)
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. ( 32,656)
Current year changes in certain long-term liabilities do not require the use of current financial
resources and, therefore, are not reported as expenditures in governmental funds.
Compensated absences liability ( 287,138)
Net OPEB liability ( 1,192,050)
Net Pension liability ( 2,178,881)
Retainage payable 198,069
Revenues in the statement of activities that do not provide current financial
resources are not reported as revenues in the funds. 19,902,376
Change in net position of governmental activities $ 36,870,956
The accompanying notes are an integral
part of these financial statements. 22
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
SEPTEMBER 30, 2019
Governmental
Business-type Activities - Enterprise Funds Activities
Water Lake Internal Service
and Sewer Enterprise Total Fund
ASSETS
Current assets:
Cash and cash equivalents $ 20,570,841 $ - $ 20,570,841 $ 174,721
Receivables, net 3,347,317 58,373 3,405,690 -
Accrued interest 1,764 8 1,772 10
Prepaid items 40,256 - 40,256 -
Inventory - 84,347 84,347 -
Total current assets 23,960,178 142,728 24,102,906 174,731
Noncurrent assets:
Restricted cash and investments:
Bond construction 5,166,567 - 5,166,567 -
Impact fees 3,713,745 - 3,713,745 -
Total restricted cash
and investments 8,880,312 - 8,880,312 -
Capital assets:
Land 548,132 45,838 593,970 -
Easements 48,705,515 - 48,705,515 -
Construction in progress 5,308,799 122,419 5,431,218 -
Buildings 449,395 2,105,843 2,555,238 -
Improvements other than
buildings - 8,416,221 8,416,221 -
Infrastructure 128,748,543 - 128,748,543 -
Vehicles, machinery and
equipment 4,079,465 1,161,844 5,241,309 56,738
Water storage rights 683,547 - 683,547 -
Less accumulated depreciation ( 55,162,204) ( 9,612,547) ( 64,774,751) ( 6,503)
Net capital assets 133,361,192 2,239,618 135,600,810 50,235
Total noncurrent assets 142,241,504 2,239,618 144,481,122 50,235
Total assets 166,201,682 2,382,346 168,584,028 224,966
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to
pensions 1,183,401 419,013 1,602,414 -
Deferred outflows related to OPEB 423,986 195,706 619,692 -
Deferred loss on bond refunding 80,325 - 80,325 -
Total deferred outflows
of resources 1,687,712 614,719 2,302,431 -
The accompanying notes are an integral
part of these financial statements. 23
CITY OF GRAPEVINE, TEXAS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
(Continued)
SEPTEMBER 30, 2019
Governmental
Business-type Activities - Enterprise Funds Activities
Water Lake Internal Service
and Sewer Enterprise Total Fund
LIABILITIES
Current liabilities:
Accounts payable $ 2,917,756 $ 162,425 $ 3,080,181 $ 5,869
Accrued liabilities 437,923 85,026 522,949 -
Due to other funds - 695,436 695,436 -
Accrued bond interest payable 37,796 - 37,796 -
Retainage payable 205,080 - 205,080 -
Compensated absences 40,112 22,846 62,958 -
Bonds payable 840,000 - 840,000 -
Net OPEB liability 18,488 8,534 27,022 -
Customer deposits 996,419 - 996,419 -
Total current liabilities 5,493,574 974,267 6,467,841 5,869
Noncurrent liabilities:
Bonds payable 8,661,526 - 8,661,526 -
Net OPEB liability 5,760,297 2,658,861 8,419,158 -
Net pension liability 3,502,436 1,240,125 4,742,561 -
Compensated absences 120,336 68,537 188,873 -
Total noncurrent liabilities 18,044,595 3,967,523 22,012,118 -
Totalliabilities 23,538,169 4,941,790 28,479,959 5,869
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to
to pensions 136,696 48,400 185,096 -
Deferred inflows related to OPEB 727,688 335,889 1,063,577 -
Total deferred inflows
of resources 864,384 384,289 1,248,673 -
NET POSITION
Net investment in capital assets 128,901,478 2,239,618 131,141,096 50,235
Restricted for:
Impact fees 3,713,745 - 3,713,745 -
Unrestricted 10,871,618 ( 4,568,632) 6,302,986 168,862
Total net position $ 143,486,841 $( 2,329,014) $ 141,157,827 $ 219,097
24
CITY OF GRAPEVINE, TEXAS
STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN NET POSITION - PROPRIETARY FUNDS
SEPTEMBER 30, 2019
Governmental
Business-type Activities - Enterprise Funds Activities
Water Lake Internal Service
and Sewer Enterprise Total Fund
OPERATING REVENUES
Charges for services $ 23,653,256 $ 3,091,562 $ 26,744,818 $ 156,068
Miscellaneous 625,239 231,878 857,117 -
Total operating revenues 24,278,495 3,323,440 27,601,935 156,068
OPERATING EXPENSES
Salaries and benefits 5,272,997 1,980,781 7,253,778 -
Water purchases, storage,
and treatment 9,509,124 - 9,509,124 -
Maintenance, repairs, and supplies 2,733,868 926,313 3,660,181 56,807
General and administrative 2,955,402 760,771 3,716,173 -
Depreciation 3,130,535 494,681 3,625,216 6,485
Total operating expenses 23,601,926 4,162,546 27,764,472 63,292
OPERATING INCOME (LOSS) 676,569 ( 839,106) ( 162,537) 92,776
NONOPERATING REVENUES
(EXPENSES)
Investment income 647,245 2,962 650,207 2,190
Gain (loss) on disposal of property - 3,450 3,450 -
Interest and fiscal agent charges ( 299,087) - ( 299,087) -
Total nonoperating revenues
(expenses) 348,158 6,412 354,570 2,190
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS 1,024,727 ( 832,694) 192,033 94,966
Capital contributions 6,308,642 - 6,308,642 -
Transfers out ( 6,843,710) ( 106,997) ( 6,950,707) ( 2,118)
Total capital contributions
and transfers ( 535,068) ( 106,997) ( 642,065) ( 2,118)
CHANGE IN NET POSITION 489,659 ( 939,691) ( 450,032) 92,848
TOTAL NET POSITION, BEGINNING 142,997,182 ( 1,389,323) 141,607,859 126,249
TOTAL NET POSITION, ENDING $ 143,486,841 $( 2,329,014) $ 141,157,827 $ 219,097
The accompanying notes are an integral
part of these financial statements. 25
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Governmental
Business-type Activities - Enterprise Funds Activities
Water Lake Internal Service
and Sewer Enterprise Total Fund
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash received from customers $ 24,031,369 $ 3,312,270 $ 27,343,639 $ -
Receipts from interfund charges for
document management services - - - 156,068
Cash paid to employees ( 3,513,059) ( 1,316,837) ( 4,829,896) -
Cash paid to suppliers
for goods and services ( 13,706,613) ( 1,745,664) ( 15,452,277) ( 53,056)
Net cash provided
by operating activities 6,811,697 249,769 7,061,466 103,012
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Capital contributions 326,170 - 326,170 -
Principal repayment on bonds ( 1,235,000) - ( 1,235,000) -
Interest and related fees
paid on long-term debt ( 326,244) - ( 326,244) -
Proceeds from the sale of assets - 3,450 3,450 -
Acquisition and construction
of capital assets ( 4,351,040) ( 149,202) ( 4,500,242) ( 30,883)
Net cash used by capital
and related financing activities ( 5,586,114) ( 145,752) ( 5,731,866) ( 30,883)
CASH FLOWS FROM INVESTING
ACTIVITIES
Interest received on
investments and cash equivalents 651,658 2,980 654,638 2,180
Net cash provided
by investing activities 651,658 2,980 654,638 2,180
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfer out ( 6,843,719) ( 106,997) ( 6,950,707) ( 2,118)
Net cash used by noncapital
financing activities ( 6,843,710) ( 106,997) ( 6,950,707) ( 2,118)
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS ( 4,966,469) - ( 4,966,469) 72,191
CASH AND CASH EQUIVALENTS, 34,417,622 - 34,417,622 102,530
BEGINNING
CASH AND CASH EQUIVALENTS, $ 29,451,153 $ - $ 29,451,153 $ 174,721
ENDING
(Including $8,880,312 of restricted cash and cash equivalents in the Water and Sewer Fund)
The accompanying notes are an integral
part of these financial statements. 26
CITY OF GRAPEVINE, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
(Continued)
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Governmental
Business-type Activities - Enterprise Funds Activities
Water Lake Internal Service
and Sewer Enterprise Total Fund
RECONCILIATION OF OPERATING
INCOME (LOSS) TO NET CASH
PROVIDED (USED) BY OPERATING
ACTIVITIES
Operating income $ 676,569 $( 839,106) $( 162,537) $ 92,776
Adjustments to reconile operating
income to net cash provided (used)
by operating activities:
Depreciation 3,130,535 494,681 3,625,216 6,485
(Increase) decrease in assets:
Customer receivable ( 279,989) ( 11,170) ( 291,159) -
Other assets 13,474 - 13,474 -
Inventories - ( 13,413) ( 13,413) -
Increase (decrease) in liabilities:
Accounts payable 1,478,307 43,817 1,522,124 3,751
Accrued liabilities 83,816 13,420 97,236 -
Other liabilities - ( 88,984) ( 88,984) -
Customer deposits 32,863 - 32,863 -
Net OPEB liability 1,425,673 658,067 2,083,740 -
Net pension liability 237,358 ( 15,086) 222,272 -
Compensated absences 13,091 7,543 20,634 -
Total adjustments 6,135,128 1,088,875 7,224,003 10,236
Net cash provided
by operating activities $ 6,811,697 $ 249,769 $ 7,061,466 $ 103,012
SCHEDULE OF NON-CASH CAPITAL AND
RELATED FINANCING ACTIVITIES
Contributions of capital assets $ 5,982,472 $ - $ 5,982,472 $ -
The accompanying notes are an integral
part of these financial statements. 27
CITY OF GRAPEVINE, TEXAS
STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES
FIDUCIARY FUNDS
SEPTEMBER 30, 2019
Agency
ASSETS
Cash and cash equivalents $ 170,666
Total assets 170,666
LIABILITIES
Due to beneficiary 170,666
Total liabilities $ 170,666
The accompanying notes are an integral
part of these financial statements. 28
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2019
I. 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 has been blended or
discretely presented within the financial statements.
Blended Component Units
Grapevine Tax Increment Financing District Reinvestment Zone Number One and Two (the "TIFs")
were formed to finance and make public improvements under the authority of the Tax Increment
Financing Act. The TIFs are governed by two separate boards of directors that are substantively the
same as the City Council. The chairman of the board is also designated by the City Council. The City
is obligated for the debts of both TIFs.
The Grapevine Crime Control and Prevention District (Crime District) was established to account for
the accumulation and use of sales tax proceeds designated for crime reduction programs. One-half
(1/2) cent of local sales and use tax within the district funds the Crime District. The Board of Directors
of the Crime Control and Prevention District is substantively the same as the City Council. The City is
entitled to and can otherwise access all of the resources of the Crime District.
The Grapevine 4B Economic Development Corporation consists of two funds. The 4B Transit Fund
accounts for funds designated for Grapevine's participation in the commuter rail development project
with the Fort Worth Transit Authority (the "T"). The 4B Economic Development Fund accounts for
funds used to stimulate the local economy, development, and redevelopment opportunities. One-half
(1/2) cent local sales and use tax within the City funds these two blended component units. Three
eighths (3/8th) of one-half cent of the local sales tax is used to fund the 4B Transit Fund. One eighth
(1/8th)of one-half cent of the local sales tax is used to fund the 4B Economic Development Fund. The
Board of Directors of the Grapevine 413 Economic Development Corporation include citizens as
members but is substantively the same as the City Council. The City is entitled to and can otherwise
access all of the resources of the Grapevine 4B Economic Development Corporation.
Complete financial statements for each of the TIF Funds may be obtained from the City of Grapevine,
Finance Division, 200 South Main St., Grapevine Texas 76051. Separate financial statements for the
Crime Control and Prevention District, the 4B Transit Fund, and the 4B Economic Development Fund
are not prepared.
29
Discretely Presented Component Unit
Grapevine Heritage Foundation (the "Foundation") is a Texas nonprofit corporation governed by a 9-
member board of directors appointed by City Council, which includes a City Council member and the
Director of the City's Convention and Visitor's Bureau. The Foundation's operating budget is subject
to the approval of the City Council. The City is able to impose its will on the Foundation. The board is
not substantively the same as the City Council. The Foundation does not provide services to the City.
Separate financial statements are not prepared for the Heritage Foundation.
B. Government-wide Fund Financial Statements
The basic financial statements include both government-wide (based on the City as a whole) and
fund financial statements. The government-wide financial statements (i.e., the statement of net
position and the statement of activities) report information on all of the nonfiduciary activities of the
primary government and its component units. For the most part, the effect of interfund activity has
been removed from these statements. Governmental activities, which normally are supported by
taxes and intergovernmental revenues, are reported separately from business-type activities, which
rely to a significant extent on fees and charges for support. Likewise, the primary government is
reported separately from certain legally separate component units for which the primary government
is financially accountable.
The government-wide statement of activities demonstrates the degree to which the direct expenses of a
functional category (Public Safety, Culture and Recreation, Tourism, etc.) or segment are offset by
program revenues. Direct expenses are those that are clearly identifiable with specific function or
segment. Program revenues include (1) charges to customers or applicants who purchase, use, or
directly benefit from goods, services, or privileges provided by a given function or segment, and
(2)grants and contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among program revenues
are reported instead as general revenues.
Separate fund based financial statements are provided for governmental funds, proprietary funds,
and fiduciary funds, even though the latter are excluded from the government-wide financial
statements. Major individual governmental funds and major individual enterprise funds are reported
as separate columns in the fund financial statements. GASB Statement No. 34 sets forth minimum
criteria (percentage of assets, liabilities, revenues or expenditures/expenses of either fund category
for the governmental and enterprise combined) for the determination of major funds. The non-major
funds are aggregated in a separate column in the fund financial statements. The non-major funds are
detailed in the combining section of this report.
The City's fiduciary funds are presented in the fund financial statements by type. Since by definition
these assets are being held for the benefit of a third party and cannot be used to address activities or
obligations of the City, these funds are not incorporated into the government-wide statements.
The government-wide focus is more on the sustainability of the City as an entity and the change in
aggregate financial position resulting from the activities of the fiscal period. The focus of the fund
financial statements is on the major individual funds of the governmental and business-type
categories, as well as the fiduciary funds (by category) and the component units. Each presentation
provides valuable information that can be analyzed and compared to enhance the usefulness of the
information.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are
recognized as revenue in the year for which they are levied. Grants and similar items are recognized
as revenue as soon as all eligibility requirements imposed by the provider have been met.
30
Governmental fund level financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon
as they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period.
For this purpose, the City considers revenues to be available if they are collected within 60 days of
the end of the current fiscal period. In applying the susceptible to accrual concept to
intergovernmental revenue, the legal and contractual requirements of the numerous individual
programs are used as guidance. Generally, monies must be expended on a specific purpose or
project before any amounts will be paid to the City; therefore, revenues are recognized based upon
the expenditures recorded. Ad valorem taxes are recognized as revenues in the year for which they
are levied. Sales taxes, franchise taxes, hotel occupancy taxes, charges for services and fines are
recognized as revenue as earned, when measurable and available. Licenses, permits, and
miscellaneous revenues (except earnings on investments) are recorded as revenues when received
in cash because they are generally not measurable until actually received. Investment earnings are
recorded as earned since they are measurable and available.
All proprietary funds are accounted for using the economic resources measurement focus and the
accrual basis of accounting. With this measurement focus, all assets, deferred outflows of resources,
liabilities and deferred inflows of resources associated with the operation of these funds are included
on the statement of net position. Proprietary fund-type operating statements present increases (e.g.,
revenues) and decreases (e.g., expenses) in net position. Proprietary funds distinguish operating
revenues and expenses from nonoperating items. Operating revenues and expenses generally result
from providing services and producing and delivering goods in connection with a proprietary fund's
principal ongoing operations. The principal operating revenues of the City's water and sewer and
municipal golf course are charges to customers for sales and services. Operating expenses for the
enterprise funds include the cost of sales and services, administrative expenses, and depreciation on
capital assets. All revenues and expenses not meeting this definition are reported as non-operating
revenues and expenses.
During the course of operations, the City has activity between funds for various purposes. Any
residual balances outstanding at year end are reported as due from/to other funds and advances
to/from other funds. While these balances are reported in fund financial statements, certain
eliminations are made in the preparation of the government-wide financial statements. Balances
between the funds included in governmental activities (i.e., the governmental funds) are eliminated so
that only the net amount is included as internal balances in the governmental activities column.
Similarly, balances between the funds included in business-type activities (i.e., the enterprise funds)
are eliminated so that only the net amount is included as internal balances in the business-type
activities column.
Further, certain activity occurs during the year involving transfers of resources between funds. In fund
financial statements, these amounts are reported at gross amounts as transfers in/out. While reported
in fund financial statements, certain eliminations are made in the preparation of the government-wide
financial statements. Transfers between the funds included in governmental activities are eliminated
so that only the net amount is included as transfers in the governmental activities column. Similarly,
balances between the funds included in business-type activities are eliminated so that only the net
amount is included as transfers in the business-type activities column. However, interfund services
provided and used are not eliminated in the process of consolidation.
Governmental Funds
The focus of governmental fund measurement (in the fund financial statements) is upon
determination of financial position and changes in financial position (sources, uses, and balances of
financial resources) rather than upon net income. The following is a description of the major
governmental funds of the City:
The City reports the following major governmental funds:
The General Fund accounts for several of the City's primary services (General
Administration, Police Administration, Fire, Public Works, Libraries, Culture and
Recreation, etc.) and is the primary operating fund of the City.
31
The Hotel Occupancy Tax Fund is a special revenue fund that accounts for all hotel
occupancy tax revenues which are restricted by state statute and can only be used on
expenditures related to tourism activities. Additional local revenues generated though
tourism activities are accumulated in this fund and are assigned for use on expenditures
related to tourism.
The Crime District Fund is a special revenue fund that accounts for the accumulation and
use of sales tax proceeds restricted for crime reduction programs.
The 4-B Economic Development Fund accounts for the accumulation of sales tax
restricted for economic development projects and local funds assigned by the City to
stimulate the local economy, development, and redevelopment.
The 4B Transit Fund is a special revenue fund that accounts for the accumulation of sales
taxes restricted to fund the City's participation in the commuter rail development project
with the Fort Worth Transit Authority (the "T").
The Debt Service Fund is used to account for the accumulation of restricted property tax
resources levied for the payment of general long-term debt principal, interest and related
costs of governmental funds.
The Tax Increment Financing (TIF) #1 Capital Proiects Fund is used to account for
capital acquisition and construction, economic incentives, and other expenditures
authorized by the TIF#1 Board of Directors.
The General Facilities and Equipment Fund is a capital projects fund used to account
for the general financing, acquisition, construction and improvements of the City's
buildings and capital equipment.
Proprietary Funds
The focus of proprietary fund measurement is upon determination of operating income, changes in
net position, financial position, and cash flows, which is similar to businesses. The following is a
description of the major proprietary funds of the City:
The Water and Sewer Fund accounts for the operation of the City's water and sewer
utility activities including administration, operation and maintenance of the water and
sewer system, and billing and collection activities. All costs are financed through charges
made to utility customers with rates reviewed regularly and adjusted, if necessary, to
ensure integrity of the fund.
The Lake Enterprise Fund includes the operations of the City's municipal golf course.
The Internal Service Fund accounts for revenues and expenses related to document
management services provided to parties inside the City on a cost-reimbursement basis.
Because the principal users of the internal services are accounted for in the City's
governmental activities, this fund is included in the "Governmental Activities" column of
the government-wide financial statements.
Fiduciary Funds
Agency funds are used by the City to report the assets held in an agency capacity for external
individuals or organizations including the Industrial Development Corporation, the Employee Activity
Fund, and W.D. Tate Scholarship Fund. The donations and other contributions received by the City
that are being held for these organizations do not belong to the City and cannot be spent to further
the City's own objectives. Agency funds report only assets and liabilities and, therefore, have no
measurement focus.
32
D. Assets, liabilities, deferred outflows/inflows of resources, and net position/fund balance
1. Cash and cash equivalents
The City's cash and cash equivalents are considered to be cash on hand, demand deposits
and short-term investments with original maturities of three months or less from the date of
acquisition.
2. Investments
Investments for the City are reported at fair value, except for the position in investment pools.
Investment pools are reported at the net asset value per share (which approximates fair value)
even though it is calculated using the amortized cost method.
3. Property Taxes and Other Receivables
The City's property tax is levied each October 1, on the assessed value listed as of the prior
January 1 for all real property located in the City. The appraisal of property within the City is the
responsibility of the Central Appraisal Districts of Dallas, Denton, and Tarrant Counties as
required by legislation passed by the Texas Legislature. The Appraisal Districts are required
under such legislation to assess all property within their Appraisal District on the basis of 100%
of its appraised value and is prohibited from applying any assessment ratios. The assessed
value upon which the completed tax year 2018 levy was based was approximately
$9,006,396,977. The value of property within the Appraisal District must be reviewed every five
years; however, the City may, at its own expense, require annual reviews of appraised values.
The City may challenge appraised values established by the Appraisal District through various
appeals and, if necessary, legal action.
General property taxes are limited by the Texas Constitution to $2.50 per $100 of assessed
valuation. The combined tax rate to finance maintenance and operations and debt service for
the year ended September 30, 2019, was $0.289271 per$100 of assessed valuation.
Property taxes attach as an enforceable lien on property as of January 1 following the levy
date. Taxes are due by January 31 following the levy date. Property taxes levied for 2019 are
recorded as receivables, net of estimated uncollectibles. The collections during 2019 and those
considered "available" at year-end are recognized as revenues in 2019. The City considers
property taxes available if they are collected within 60 days after year-end. Prior year levies were
recorded using these same principles. The remaining receivables are reflected as deferred
inflows of resources in the fund financial statements.
Property taxes are imposed nonexchange revenues. Assets from imposed nonexchange
transactions are recorded when the entity has enforceable legal claim to the asset, or when the
entity receives resources, whichever comes first. The enforceable legal claim date for property
taxes is the assessment date. The assessment date has been designated in the enabling
legislation as October 1.
4. Inventories and Prepaid Items
Inventories are valued at average cost on a first-in, first-out basis. Inventories in the General
Fund are recorded using the consumption method (i.e., recorded as an expenditure when used
rather than when purchased).
Prepaid items are payments made by the City in the current year to provide services occurring
in the subsequent fiscal year. A corresponding portion of fund balance is shown as
nonexpendable in governmental funds to indicate it is not available for other subsequent
expenditures. Prepaid items are defined as payments of greater than $1,000 that benefit future
periods. The cost of prepaid items is recorded as expenditures/expenses when consumed
rather than when purchased.
33
5. Restricted Assets
Certain proceeds of the City's general obligation bonds and certificates of obligation are
classified as restricted assets on the balance sheet because their use is limited by applicable
bond restrictions. Also included in restricted assets are impact fees, which are restricted for use
in infrastructure projects.
6. Assets Held for Sale
Assets held for sale in the General Fund and Hotel Occupancy Tax Fund consist of properties
that are owned by the City which are being held for redevelopment. These assets are valued at
estimated realizable value or historical cost, whichever is less.
7. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads,
bridges, sidewalks, and similar items), are reported in the applicable governmental or business-
type activities column in the government-wide financial statements. Capital assets, other than
infrastructure, are defined by the City as assets with an initial, individual cost of more than
$5,000 and an estimated useful life in excess of two years. Infrastructure assets are defined by
the City as assets costing in excess of$50,000 that have an estimated useful life in excess of
two years. Such assets are recorded at historical cost if purchased or constructed. Donated
capital assets are recorded at acquisition cost at the date of donation. The costs of normal
maintenance and repairs that do not add to the value of the asset or materially extend assets
lives are not capitalized.
Depreciation has been provided on a straight-line basis over the estimated useful lives of the
assets.
The estimated useful lives are as follows:
Assets Years
Buildings-wood framed 20
Buildings-metal storage 7
Buildings-steel framed 40
Water and sewer system 30-50
General infrastructure 20-30
Improvements other than buildings 10-20
Machinery and equipment 3-20
Motor vehicles 3-10
8. Deferred Inflows and Outflows of Resources
In addition to assets, the statement of net position and/or balance sheet will sometimes report a
separate section for deferred outflows of resources. This separate financial statement element,
deferred outflows of resources, represents a consumption of net position that applies to a future
period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until
then. The City has the following items that qualify for reporting in this category.
• Deferred loss on debt refundings—A deferred loss on refunding results from the difference in
the carrying value of refunded debt and its reacquisition price. This amount is deferred and
amortized over the shorter of the life of the refunded or refunding debt.
• Pension and OPEB contributions after measurement date—These contributions are deferred
and recognized in the following fiscal year.
• Changes in actuarial assumptions and other inputs included in determining the OPEB liability
—This difference is deferred and recognized over the estimated average remaining lives of all
members determined as of the measurement date.
34
• Differences between expected and actual economic experience for the City's OPEB plan —
These effects on the OPEB liability are deferred and amortized over a closed period equal to
the average of the expected remaining service lives of all employees that are provided with
benefits through the pension plan (active employees and inactive employees).
In addition to liabilities, the balance sheet will sometimes report a separate section for deferred
inflows of resources. This separate financial statement element represents an acquisition of
fund balance that applies to a future period(s) and, therefore, will not be recognized as an
inflow of resources (revenue) until that time. The City has one type of item that arises only
under the modified accrual basis of accounting that qualifies for reporting in this category.
Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance
sheet.
In addition, the City has deferred inflows of resources which are required to be reported on the
Statements of Net Position under the full accrual basis of accounting. Deferred inflows of
resources reported in the Statements of Net Position are as follows:
• Differences between expected and actual economic experience for the City's pension —
These effects on the total pension liability are deferred and amortized over a closed period
equal to the average of the expected remaining service lives of all employees that are
provided with benefits through the pension plan (active employees and inactive
employees).
• Changes in actuarial assumptions and other inputs included in determining the pension
liabilities—This difference is deferred and recognized over the estimated average remaining
lives of all members determined as of the measurement date.
• Difference in projected and actual earnings on pension and OPEB assets—This difference is
deferred and amortized over a closed five-year period.
9. Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation,
compensatory time, and sick pay benefits. Employees are reimbursed upon termination for
accumulated vacation and only non-exempt employees are reimbursed for compensatory time.
The liabilities for these amounts are accrued as they are incurred in the government-wide and
proprietary fund financial statements. Employees are not reimbursed upon termination for
accumulated sick leave.
10. Long-term Debt
In the government-wide financial statements, and proprietary funds in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities, business-type activities, or proprietary fund type statement
of net position. Bond premiums and discounts are deferred and amortized over the life of the
bonds. Bonds payable are reported net of the applicable bond premium or discount.
In the fund financial statements, governmental funds recognize bond premiums and discounts,
as well as bond issuance costs, during the current period. The face amount of debt issued is
reported as other financing sources. Premiums received on debt issuances are reported as
other financing sources while discounts on debt issuances are reported as other financing
uses. Issuance costs, whether or not withheld from the actual debt proceeds, are reported as
debt service expenditures.
35
11. Pensions
For purposes of measuring the net pension liability, pension related deferred outflows and inflows
of resources, and pension expense, City specific information about its Fiduciary Net Position in
the Texas Municipal Retirement System (TMRS) and additions to/deductions from TMRS's
Fiduciary Net Position have been determined on the same basis as they are reported by TMRS.
For this purpose, plan contributions are recognized in the period that compensation is reported for
the employee, which is when contributions are legally due. Benefit payments and refunds are
recognized when due and payable in accordance with the benefit terms. Investments are reported
at fair value.
12. Other Postemployment Benefits (OPEB)
The City provides eligible employees with certain postemployment health and life insurance
benefits that meet the criteria of a defined benefit OPEB plan under Governmental Accounting
Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions. The City has placed assets in trust to pay the
obligations of the plan with the Public Agencies Retirement Services (PARS). Because plan
assets are pooled by PARS with those of other plans for investment, the City's plan meets the
criteria of an agent multiple-employer plan under GASB Statement No. 75.
The City has not established a formal funding policy. Therefore, for purposes of measuring the
net OPEB liability, OPEB related deferred outflows and inflows of resources, and OPEB
expense, benefit payments and refunds are recognized when due and payable in accordance
with the benefit terms. Contributions are not required but are measured as payments by the
City for benefits due and payable that are not reimbursed by plan assets. Information regarding
the City's net OPEB liability is obtained from a report prepared by a consulting actuary, Gabriel
Roeder Smith & Company, in compliance with GASB Statement No. 75.
13. Fund Balance Classification
The governmental fund financial statements present fund balances based on classifications
that comprise a hierarchy that is based primarily on the extent to which the City is bound to
honor constraints on the specific purposes for which amounts in the respective governmental
funds can be spent. The classifications used in the governmental fund financial statements are
as follows:
• Nonspendable: This classification includes amounts that cannot be spent
because they are either (a) not in spendable form or (b) are legally or
contractually required to be maintained intact. Nonspendable items are not
expected to be converted to cash or are not expected to be converted to cash
within the next year.
• Restricted: This classification includes amounts for which constraints have been
placed on the use of the resources either (a) externally imposed by creditors,
grantors, contributors, or laws or regulations of other governments, or (b)
imposed by law through constitutional provisions or enabling legislation.
• Committed: This classification includes amounts that can be used only for
specific purposes pursuant to constraints imposed by ordinance of the City
Council. These amounts cannot be used for any other purpose unless the City
Council removes or changes the specified use by taking the same type of action
that was employed when the funds were initially committed. This classification
also includes contractual obligations to the extent that existing resources have
been specifically committed for use in satisfying those contractual requirements.
36
• Assigned: Amounts in the assigned fund balance classification are intended to be
used by the City for specific purposes but do not meet the criteria to be classified
as committed. The City Council has, by resolution, authorized the City Manager
to assign fund balance. The City Council may also assign fund balance as it does
when appropriating fund balance to cover the gap between estimated revenue
and appropriations in the subsequent year's budget. Unlike commitments,
assignments generally only exist temporarily. In other words, an additional action
does not normally have to be taken for the removal of an assignment.
• Unassigned: This classification includes the residual fund balance for the
General Fund. The unassigned classification also includes negative residual fund
balance of any other governmental fund that cannot be eliminated by offsetting of
assigned fund balance amounts.
14. Fund balance flow assumptions
When an expenditure is incurred for purposes for which both restricted and unrestricted fund
balance is available, the City considers restricted funds to have been spent first. When an
expenditure is incurred for which committed, assigned, or unassigned fund balances are
available, the City considers amounts to have been spent first out of committed funds, then
assigned funds, and finally unassigned funds.
15. Net position flow assumption
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g.,
restricted bond or grant proceeds) and unrestricted resources. In order to calculate the
amounts to report as restricted net position and unrestricted net position in the government-
wide and proprietary fund financial statements, a flow assumption must be made about the
order in which the resources are considered to be applied. It is the City's policy to consider
restricted net position to have been depleted before unrestricted net position is applied.
16. Future financial reporting requirements
The City has reviewed GASB pronouncements which become effective in future years and
notes the following statements are applicable to the City.
Statement No. 84, Fiduciary Activities — This statement establishes criteria for identifying
fiduciary activities of governments and for identifying fiduciary component units and
postemployment benefit arrangements that are fiduciary activities. This statement will become
effective for the City in fiscal year 2020.
Statement No. 87, Leases — This statement changes the recognition requirements for certain
lease assets and liabilities for leases that are currently classified as operating leases. This
statement will become effective for the City in fiscal year 2021.
II. DEFICIT FUND EQUITY
The Crime District Fund (major special revenue fund) had a deficit fund balance of $1,045,343. This
deficit is primarily the result of increasing costs related to salaries and benefits. This deficit will be
eliminated as resources are obtained (e.g., from revenues or transfers in from other funds).
The Lake Park Fund (nonmajor special revenue fund) had a deficit fund balance of $3,418,748 at fiscal
year-end. This deficit exists because of significant flooding events at Lake Grapevine which have
occurred over the last few years. This deficit will be eliminated as resources are obtained (e.g., from
revenues or transfers in from other funds).
37
The Lake Enterprise Fund had a deficit net position of $2,329,014 at fiscal year-end. This deficit also
exists primarily because of flooding events at Lake Grapevine, but recovery in this fund was slowed
because the main road accessing the golf course was closed all but two months of the year due to
structural issues. This deficit will be eliminated as resources are obtained (e.g., from revenues or
transfers in from other funds).
III. CASH AND INVESTMENTS
The City categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. GASB Statement No. 72, Fair Value Measurement and Application
provides a framework for measuring fair value that establishes a three-level fair value hierarchy that
describes the inputs that are used to measure assets and liabilities.
• Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets
that a government can access at the measurement date.
• Level 2 inputs are inputs—other than quoted prices included within Level 1—that are observable
for an asset or liability, either directly or indirectly.
• Level 3 inputs are unobservable inputs for an asset or liability.
The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3
inputs. If a price for an identical asset or liability is not observable, a government should measure fair
value using another valuation technique that maximizes the use of relevant observable inputs and
minimizes the use of unobservable inputs. If the fair value of an asset or a liability is measured using
inputs from more than one level of the fair value hierarchy, the measurement is considered to be based
on the lowest priority level input that is significant to the entire measurement.
Of the City's investments, $1,499,082 were valued using the option-adjusted discount cash flow model
and $753,360 were valued using documented trade history in the exact security.
As of September 30, 2019, the City had the following cash and investments:
Weighted
Fair Value Measurement Using Percent Average
of Total Maturity
9/30/2019 (Level 1) (Level 2) (Level 3) Portfolio (Days)
Primary government
Cash and cash equivalents
Cash deposits-City $ 21,206,128
Cash deposits-trust and agency 170,666
Total cash and cash equivalents 21,376,794
Investments measured at net asset
value per share:
Investment pools:
TexPool 4,144,093 2.44% 38
TexPool Prime 7,767,470 4.57% 31
LOGIC 151,830,768 89.38% 49
Investments by fair value level:
Certificates of Deposit: 3,905,681 $ $ 3,905,681 $ 2.30% 102
Debt securities:
State and Municipal Bonds 1,232,408 1,232,408 0.73% 65
Federal National Mortgage Association 998,652 998,652 0.59% 9
Total investments 169,879,072 6,136,741
Total cash and investments of
the primary government $ 191,255,866 $ $ 6,136,741 $
Portfolio weighted average maturity(days) 294
Discretely Presented Component Unit
Cash deposits $ 547,383
Total cash and investments
of the reporting entity $ 191,803,249
38
Investment pools are not categorized as to investment risk since specific securities relating to the City
cannot be identified. Under the TexPool Participation Agreement, administrative and investment services
to TexPool and TexPool Prime are provided by Federated Investors, Inc. through an agreement with the
State of Texas Comptroller of Public Accountants. The State Comptroller is the sole officer, director, and
shareholder of the Texas Treasury Safekeeping Trust Company authorized to operate TexPool and
TexPool Prime.
Under the LOGIC Participation Agreement, administrative and investment services to LOGIC are provided
by Hilltop Securities, Inc. and JP Morgan Asset Management, Inc. as co-administrators. The
administrators settle all trades for LOGIC and secure and value its assets every day. The fair value of the
City's position in these pools is the same as the value of the pool shares. As of September 30, 2019, the
City's investments in LOGIC, TexPool and TexPool Prime were all rated AAAm by Standard & Poor's.
TexPool, TexPool Prime and LOGIC each have a redemption notice period of one day and may redeem
daily. The investment pools' authority may only impose restrictions on redemptions in the event of a
general suspension of trading on major securities markets, general banking moratorium or national state
of emergency that affects the pool's liquidity.
Interest Rate Risk. In accordance with its investment policy, the City minimizes the risk that the interest
earnings and the market value of investments in the portfolio will fall due to changes in general interest
rates, by:
a. Structuring the investment portfolio so that investments mature to meet cash
requirements for ongoing operations, thereby avoiding the need to liquidate
investments prior to maturity.
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.
Custodial Credit Risk. State statutes require that all City deposits in financial institutions be fully
collateralized by U. S. Government obligations or obligations of the State of Texas or its agencies. The
City's deposits were fully collateralized by government securities or had a letter of credit issued by the
Federal Home Loan Bank as required by State statutes at September 30, 2019.
39
IV. RECEIVABLES
Receivables as of year-end for the City's individual major funds and nonmajor funds in the aggregate,
including the applicable allowances for uncollectible accounts, are as follows:
Less
Accrued Gross Allowance for
Interest Taxes Accounts Notes Receivables Uncollectibles Total
General $ 924 $ 6,871,646 $ 2,809,619 $ $ 9,682,189 $( 2,485,060) $ 7,197,129
Hotel Occupancy 2,527 1,501,354 72,194 1,576,075 ( 14,988) 1,561,087
Crime District 15 2,494,093 - 2,494,108 - 2,494,108
413-Economic Development 664 738,860 40,123 779,647 779,647
4B-Transit 40 1,822,138 - 1,822,178 1,822,178
Debt Service 451 1,186,045 10,877 1,197,373 ( 1,001,330) 196,043
TIF#1 Capital Projects 138 - - 138 138
General Facilities and Equipment 81,527 - 3,858,000 3,939,527 3,939,527
Nonmajor governmental funds 1,986 285,190 - 287,176 - 287,176
Water and Sewer 1,764 3,420,001 3,421,765 ( 72,684) 3,349,081
Lake Enterprise 8 58,373 58,381 58,381
Total $ 90,044 $ 14,614,136 $ 6,696,377 $ 3,858,000 $ 25,258,557 $L 3,574,062) $ 21,684,495
V. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2019, was as follows:
Primary Government
Beginning Transfers Transfers and Prior Period Ending
Balance and Additions Retirements Adjustments Balance
Governmental activities:
Capital assets, not being depreciated:
Land $ 37,257,669 $ - $( 2,121,522) $ $ 35,136,147
Right of way 78,359,677 201,979 - 78,561,656
Construction in progress 32,480,427 44,127,034 ( 5,121,142) ( 100,691) 71,385,628
Total assets not being depreciated 148,097,773 44,329,013 ( 7,242,664) ( 100,691) 185,083,431
Capital assets, being depreciated:
Buildings 122,884,053 1,982,996 ( 32,438) - 124,834,611
Improvement other than buildings 42,416,817 3,413,143 - - 45,829,960
Machinery and equipment 42,519,286 2,267,852 ( 2,176,570) 241,621 42,852,189
Infrastructure 134,572,115 2,280,024 - - 136,852,139
Total capital assets being depreciated 342,392,271 9,944,015 ( 2,209,008) 241,621 350,368,899
Less accumulated depreciation:
Buildings ( 27,395,999) ( 3,241,062) 15,121 - ( 30,621,940)
Improvement other than buildings ( 17,830,036) ( 2,075,897) - ( 19,905,933)
Machinery and equipment ( 25,124,599) ( 3,390,809) 1,889,281 21 ( 26,626,106)
Infrastructure ( 75,152,474) ( 5,339,156) - ( 80,491,630)
Total accumulated depreciation ( 145,503,108) ( 14,046,924) 1,904,402 21 ( 157,645,609)
Total capital assets being
depreciated, net 196,889,163 ( 4,102,909) ( 304,606) 241,642 192,723,290
Governmental activities capital
assets, net $ 344,986,936 $ 40,226,104 $L 7,547,270) $ 140,951 $ 377,806,721
40
Beginning Transfers Transfers and Ending
Balance and Additions Retirements Balance
Business-type activities:
Capital assets, not being depreciated:
Land $ 593,970 $ - $ $ 593,970
Easements 44,492,955 4,212,560 48,705,515
Construction in progress 2,177,296 4,007,384 ( 753,462) 5,431,218
Total assets not being depreciated 47,264,221 8,219,944 ( 753,462) 54,730,703
Capital assets, being depreciated:
Buildings 2,555,238 - - 2,555,238
Improvement other than buildings 8,416,221 - - 8,416,221
Machinery and equipment 4,651,743 637,424 ( 47,858) 5,241,309
Water storage rights 683,547 - - 683,547
Infrastructure 126,225,170 2,523,372 128,748,542
Total capital assets being depreciated 142,531,919 3,160,796 ( 47,858) 145,644,857
Less accumulated depreciation:
Buildings ( 1,849,958) ( 43,357) - ( 1,893,315)
Improvement other than buildings ( 6,864,769) ( 387,599) - ( 7,252,368)
Machinery and equipment ( 2,903,088) ( 382,420) 47,858 ( 3,237,650)
Water storage rights ( 639,397) ( 17,089) - ( 656,486)
Infrastructure ( 48,940,180) ( 2,794,751) - ( 51,734,931)
Total accumulated depreciation ( 61,197,392) ( 3,625,216) 47,858 ( 64,774,750)
Total capital assets being
depreciated, net 81,334,527 ( 464,420) - 80,870,107
Business-type activities capital
assets,net $ 128,598,748 $ 7,755,524 $( 753,462) $ 135,600,810
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government $ 1,494,607
Public safety 2,286,089
Public works 5,936,514
Culture and recreation 3,597,737
Tourism 731,977
Total depreciation expense-governmental activities $ 14,046,924
Business-type activities:
Water and sewer $ 3,130,535
Lake Enterprise 494,681
Total depreciation expense-business-type activities $ 3,625,216
41
Beginning Transfers Transfers and Fading
Balance and Additions Retirements Balance
Discretely Presented Component Unit:
Capital assets,not being depreciated:
Land $ 450,067 $ $ $ 450,067
Total assets not being depreciated 450,067 450,067
Capital assets,being depreciated:
Building 1,031,174 1,031,174
Improvements other than building 945,651 945,651
Vehicles and equipment 31,275 31,275
Total capital assets being depreciated 2,008,100 2,008,100
Less accumulated depreciation:
Building ( 317,987) ( 26,419) ( 344,406)
Improvements other than building ( 928,939) ( 11,486) ( 940,425)
Vehicles and equipment ( 31,275) - ( 31,275)
Total accumulated depreciation ( 1,278,201) ( 37,905) ( 1,316,106)
Total capital assets being
depreciated,net 729,899 ( 37,905) 691,994
Discretely presented component unit
capital assets,net $ 1,179,966 $( 37,905) $ $ 1,142,061
Construction Commitments
The City has active construction commitments as of September 30, 2019, totaling $58,435,811. This
includes building projects, street construction and improvements of existing streets, and repair and
maintenance of existing water and sewer systems.
Project Commitment
Streets and drainage projects $ 11,548,928
Water and wastewater projects 5,727,130
Fiber optic cable project 2,253,158
Animal Shelter 105,368
Golf Clubhouse 168,360
Fire stations 3,640,473
Grapevine Main 33,937,668
Parks projects 1,054,726
Total $ 58,435,811
The commitments for buildings, streets and drainage construction will be funded from unexpended
general obligation and certificates of obligation bond proceeds. Water and wastewater projects will be
funded from unexpended certificates of obligation and revenue bond proceeds and operations.
42
VI. INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
The composition of interfund balances as of September 30, 2019, is as follows:
Due to/from Other Funds
Receivable Fund Payable Fund Amount
General Fund Grant Fund $ 34,217
Crime District Fund 2,418,966
Lake Parks Fund(nonmajor fund) 2,894,270
Lake Enterprise Fund 695,436
Total General Fund $ 6,042,889
Interfund balances for all of the funds are created by short-term deficiencies in cash position in the
individual fund. It is anticipated that the balances will be repaid in one year or less. Similar transactions
such as this also exist between the primary government and the City's discretely presented component
unit. The balances due to and due from component unit and primary government at September 30, 2019
consisted of the following:
Receivable Payable Amount
Component unit-Heritage Foundation Primary Government-
Hotel Occupancy Tax Fund $ 7,410
Interfund Transfers
A summary of interfund transfers by fund type is as follows:
Transfers in Transfers out Amount Total
General Fund Hotel Occupancy Tax Fund $ 1,498,333
4-13 Economic Development 339,626
Nonmajor governmental funds 219,132
Water and Sewer Fund 1,743,710
Lake Enterprise Fund 106,997
Total General Fund $ 3,907,798
Hotel Occupancy Tax Fund 413-Transit Fund 429,479
Water and Sewer Fund 100,000
Total Hotel Occupancy Tax Fund 529,479
Crime District Fund General Fund 3,056,630
Debt Service Fund Hotel Occupancy Tax Fund 1,057,691
4-13 Economic Development 1,396,444
Total Debt Service 2,454,135
General Facilities and Equipment Water and Sewer Fund 5,000,000 5,000,000
Nonmajor governmental General Fund 9,220,000
Internal Service Fund 2,118
Nonmajor governmental 139,664
Total nonmajor governmental 9,361,782
Total $ 24,309,824
43
Interfund transfers are primarily made by the City for the following reasons:
• Budgeted transfers to the General Fund from other funds for operating and administrative
allocations.
• Operating transfer from the 413-Transit Fund to the Hotel Occupancy Tax Fund for visitor shuttle
services.
• Transfers to the Debt Service Fund to pay for self-supporting debt service expenditures.
• Transfers to capital projects funds to fund current and future capital projects within the City.
• Budgeted operating transfer to Crime District Fund.
VII. DEFERRED INFLOWS OF RESOURCES
At September 30, 2019, deferred inflows of resources reported in the governmental funds for unavailable
revenues are as follows:
General
Debt Facilities and Nonmajor
General Service Equipment Governmental Total
Property taxes $ 61,342 $ 64,422 $ $ $ 125,764
Property tax penalties
and interest 116,101 107,008 223,109
Court fines and fees 166,699 - 166,699
Ambulance billing 12,546 - 12,546
Franchise Fees 290,846 - 14,271 305,117
Intergovernmental - - 19,785,612 48,013 19,833,625
Other 56,234 - - 77,698 133,932
Total $ 703,768 $ 171,430 $ 19,785,612 $ 139,982 $ 20,800,792
Vill. 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 with revenues generated from park operations. The term of the
operating lease is from October 2004 through September 2029. The agreement covers the park areas of
Meadowmere Park, Oak Grove Park and Silver Lake Park("Vineyards").
The City entered into another 25-year lease agreement with the United State Corps of Engineers to
operate and maintain an additional 44.5 acres at Lake Grapevine referred to as Rockledge Park. The
term of this operating lease is from March 2009 through March 2034.
Gaylord Texan Resort and Convention Center
The City leased property from the United States Corps of Engineers and subsequently entered into a
sublease agreement with the Gaylord Texan Resort and Convention Center(Gaylord)on March 18, 1994,
for a portion of the leased property. The contract is for 49 years and rent payment is $1 per year. The
project opened on April 4, 2004 with 1,511 room convention hotel and over 400,000 square feet of
convention, meeting, exhibit and related amenities and support facilities. In subsequent years, The City
and Gaylord entered into various addendums pertaining to the United States Corps of Engineers leased
property. Gaylord completed and opened its $120 million Vineyard Tower expansion in summer of 2018.
This project increased the number of rooms by 303 and also provided 86,000 square feet of additional
meeting space. This ranks Gaylord as the nation's second-largest non-gaming convention hotel when
measured by total self-contained exhibit and meeting space.
44
Cowboys Golf Course:
The City entered into a 25-year lease agreement with the Cowboys Golf Course in 1994. The Cowboys
Golf course management company's rental fee is 3% of Cowboys' gross revenues from operations.
IX. LONG-TERM LIABILITIES
General Obligation Bonds
The City issues general obligation bonds to provide funds for the acquisition and construction of major
capital facilities. General obligation bonds have been issued for both governmental and business-type
activities.
General obligation bonds are direct obligations and pledge the full faith and credit of the City. These
bonds generally are issued as 20-year serial bonds with principal maturing each year.
A summary of the terms of general obligation bonds outstanding and their corresponding allocations to
the governmental and business-type activities at September 30, 2019, follows:
Original Interest Rates
General Obligation Bonds Sale Date Borrow ing to Maturity Final Maturity Outstanding
Governmental activities:
2010 GO Refunding Bonds 07/08/2010 $ 6,560,000 2.0%-4.0% 2022 $ 2,040,000
2012 GO Refunding Bonds 12/04/2012 7,665,000 2.0%-2.1% 2027 2,225,000
2013 GO 06/27/2013 65,805,000 2.0%-5.0% 2033 53,940,000
2015 GO Refunding Bonds 01/23/2015 12,125,000 2.0%-5.0% 2026 3,870,000
2017 GO Refunding Bonds 01/17/2017 1,365,000 2.0%-3.0% 2027 1,120,000
2019 GO Refunding Bonds 07/09/2019 28,860,000 3.0%-4.0% 2039 28,860,000
92,055,000
Business-type activities:
2010 GO Refunding Bonds 7/8/2010 $ 3,915,000 2.0%-4.0% 2022 895,000
895,000
Total general obligation bonds outstanding $ 92,950,000
Annual debt service requirements for general obligation bonds are as follows:
Governmental Activities Business-type Activities
Year Ending
September 30, Principal Interest Principal Interest
2020 $ 7,565,000 $ 3,692,383 $ 440,000 $ 27,000
2021 6,935,000 3,265,983 455,000 9,100
2022 5,580,000 2,990,088 - -
2023 5,315,000 2,753,370
2024 5,235,000 2,536,020
2025-2029 28,650,000 9,416,650
2030-2034 25,635,000 3,482,855
2035-2039 7,140,000 547,950 - -
Total $ 92,055,000 $ 28,685,299 $ 895,000 $ 36,100
45
Certificates of Obligation
The City also issued certificates of obligation to finance the acquisition and construction of capital assets
including certain capital improvement projects, municipal facilities, and machinery and equipment.
The City had the following certificates of obligation outstanding as of September 30, 2019:
Original Interest Rates
Certificates of Obligation Sale Date Borrowing to Maturity Final Maturity Outstanding
Governmental activities:
2010 CO(Private Placement) 12/02/2010 $ 500,000 3.5% 2020 $ 57,553
2015 CO 01/23/2015 2,000,000 2.0%-4.5% 2035 1,320,000
2017 CO 01/17/2017 9,535,000 2.0%-5.0% 2037 8,710,000
2018 CO 04/17/2018 32,310,000 3.0%-5.0% 2038 31,840,000
41,927,553
Business-type activities:
2015 CO 01/23/2015 $ 9,720,000 2.0%-4.5% 2035 8,200,000
Total certificates of obligation outstanding $ 50,127,553
Annual debt service requirements to maturity for certificates of obligation of the primary government are
as follows:
Governmental Activities Business-type Activities
Year Ending
September 30, Principal Interest Principal Interest
2020 $ 1,190,000 $ 1,571,612 $ 400,000 $ 260,569
2021 1,130,000 1,529,163 405,000 250,519
2022 1,915,000 1,468,906 425,000 241,688
2023 1,755,000 1,386,887 430,000 231,531
2024 1,835,000 1,300,800 440,000 219,556
2025-2029 10,670,000 5,031,206 2,480,000 852,219
2030-2034 12,565,000 2,831,106 2,980,000 339,228
2035-2039 10,810,000 720,769 640,000 10,000
Total $ 41,870,000 $ 15,840,449 $ 8,200,000 $ 2,405,310
Annual debt service requirements to maturity for private placement certificates of obligation of the primary
government are as follows:
Governmental Activities
Private Placement
Year Ending
September 30, Principal Interest
2020 $ 57,553 $ 1,522
Total $ 57,553 $ 1,522
Contractual Obligations
The City has issued contractual obligations in order to finance the acquisition of certain capital equipment.
These obligations are issued pursuant to the Constitution of the State of Texas, including particularly
Subchapter A of Chapter 271, Texas Local Government Code (the Public Property Finance Act), and
constitute direct obligations of the City of Grapevine, Texas, payable from a continuing ad valorem tax
levied on all taxable property within the City.
46
The City had the following Public Property Finance ("PPF") contractual obligations outstanding as of
September 30, 2019:
Original Interest Rates
Contractual Obligations Sale Date Borrow ing to Maturity Final Maturity Outstanding
Governmental activities:
2012 PPF Contractual Obligation 12/04/2012 $ 1,225,000 1.2% 2027 $ 740,000
2015 PPF Contractual Obligation 01/01/2015 3,070,000 2.0%-4.0% 2026 1,725,000
2018 PPF Contractual Obligation
(Private Placement) 03/06/2018 2,500,000 3.9% 2028 2,290,080
Total contractual obligations outstanding $ 4,755,080
Contractual obligation debt service requirements to maturity are as follows:
Governmental Activities
Year Ending
September 30, Principal Interest
2020 $ 555,000 $ 59,363
2021 565,000 48,587
2022 585,000 32,575
2023 155,000 19,688
2024 165,000 14,907
2025-2029 440,000 15,968
Total $ 2,465,000 $ 191,088
Private placement contractual obligation debt service requirements to maturity are as follows:
Governmental Activities
Private Placement
Year Ending
September 30, Principal Interest
2020 $ 216,840 $ 90,458
2021 225,405 81,893
2022 234,309 72,989
2023 243,564 63,734
2024 253,185 54,113
2025-2029 1,116,777 112,418
Total $ 2,290,080 $ 475,605
Revenue Bonds
On May 15, 2018, the City issued Sales Tax Revenue Refunding Bonds, Series 2018, to refund the
existing Sales Tax Revenue Bonds, Series 2014. The Sales Tax Revenue Refunding Bonds, Series
2018, were issued by the Grapevine 4B Economic Development Corporation, a blended component unit
of the City, pursuant to Chapters 501, 502, and 505, Texas Local Government Code. These bonds are
special obligations of the City, payable from a secured lien on and pledge of certain pledged revenues
which include the proceeds of/4 of the '/2 cent sales and use tax levied within the City for the benefit of
the Grapevine 4B Economic Development Corporation.
At September 30, 2019, the remaining balances for principal and interest on the debt are $16,110,000
and $4,872,503, respectively. Annual debt service requirements through February 15, 2034 do not
exceed $1,500,000 per year. Sales tax revenue collections in the 4B-Economic Development fund were
$4,393,875.
A reserve fund is required to be maintained as security for the payment of the sales tax revenue refunding
bonds. The reserve fund is required to be funded in an amount equal to the maximum annual principal
and interest required for the bonds. The reserve is currently funded at $1,402,400, which meets the
reserve requirements.
47
On June 6, 2000, the City issued Combination Tax and Tax Increment Revenue Certificates of Obligation,
Series 2000. These bonds were subsequently refunded with Combination Tax and Tax Increment
Reinvestment Zone Revenue Refunding Bonds, Series 2005A, and with Combination Tax and Tax
Increment Reinvestment Zone Revenue Refunding Bonds, Series 2015A. The Combination Tax and Tax
Increment Reinvestment Zone #2 Revenue Refunding Bonds, Series 2015A, were issued pursuant to the
Constitution and the general laws of the State of Texas, including particularly, Chapter 1207, Texas
Government Code and Section 9.26 of the City's Home Rule Charter, and are direct obligations of the
City, payable from a combination of the levy and collection of a continuing ad valorem tax levied on all
taxable property within the City and a subordinate lien on an pledge of the tax increments deposited in the
tax increment fund established for TIF#2.
At September 30, 2019, the remaining principal and interest on the bonds was $13,905,000 and
$2,199,550, respectively. Principal and interest payments for the fiscal year were $1,645,000 and
$642,400. Tax increment revenues for TIF #2 for the current year were $5,806,220. The outstanding
revenue bonds have a final maturity of August 15, 2026.
A summary of the terms of the revenue bonds outstanding for the governmental activities as of
September 30, 2019, is as follows:
Original Interest Rates
Revenue Bonds Sale Date Borrowing to Maturity Final Maturity Outstanding
Governmental activities:
2015A TIF#2 Revenue Refunding Bonds 01/23/2015 $ 20,565,000 2.0%-5.0% 2026 $ 13,905,000
2018 Sales Tax Revenue Refunding 04/17/2018 169,300,000 3.0%-4.0% 2034 16,110,000
Total revenue bonds outstanding $ 30,015,000
Annual debt service requirements for the revenue bonds are as follows:
Governmental Activities
Year Ending
September 30, Principal Interest
2020 $ 2,570,000 $ 1,127,994
2021 2,685,000 1,016,119
2022 2,795,000 898,994
2023 2,920,000 776,794
2024 3,050,000 649,019
2025-2029 9,655,000 1,949,333
2030-2034 6,340,000 653,800
Total $ 30,015,000 $ 7,072,053
Tax Notes
The City issued Tax Notes, Series 2013, in order to fund the acquisition of capital assets for the City. The
notes are issued pursuant to the Constitution and general laws of the State of Texas, particularly Chapter
1431, Texas Government Code, and constitute direct obligations of the City, payable from a continuing ad
valorem tax levied on all taxable property within the City. The terms of the tax notes are as follows:
Original Interest Rates
Tax Notes Sale Date Borrow ing to Maturity Final Maturity Outstanding
Government activities:
2013 Tax Note 06/27/2013 $ 3,965,000 2.0%-2.25% 2020 $ 605,000
The annual debt service requirements for the tax notes are as follows:
Governmental Activities
Year Ending
September 30, Principal Interest
2020 $ 605,000 $ 7,563
Total $ 605,000 $ 7,563
48
Other Long-term Liabilities—Texas Comptroller of Public Accounts
As of September 30, 2019, the City had a payout agreement with the Texas Comptroller of Public
Accounts for overpayment of sales taxes that total $118,558. These amounts were withheld from sales
tax receipts until August 2019.
The following is a summary of long-term liability transactions of the City for the year ended September 30,
2019:
Balance Balance Due Within
9/30/2018 Increases Reductions 9/30/2019 One Year
Governmental activities:
General obligation bonds $ 70,080,000 $ 28,860,000 $( 6,885,000) $ 92,055,000 $ 7,565,000
Certificates of obligation 49,658,143 - ( 7,730,590) 41,927,553 1,247,553
Contractual obligations 3,005,000 ( 540,000) 2,465,000 555,000
Contractual obligations-private placement 2,500,000 ( 209,920) 2,290,080 216,840
Revenue bonds 32,480,000 ( 2,465,000) 30,015,000 2,570,000
Tax notes 1,195,000 - ( 590,000) 605,000 605,000
Premium on bond issues 6,758,570 1,972,988 ( 887,485) 7,844,073 -
Total bonds and notes payable 165,676,713 30,832,988 ( 19,307,995) 177,201,706 12,759,393
Sales tax obligation 118,558 - ( 118,558) - -
Net OPEB liability 63,849,882 3,472,643 ( 10,247,508) 57,075,017 182,604
Net pension liability 31,426,997 26,819,821 ( 7,650,749) 50,596,069 -
Compensated absences 3,914,717 4,005,585 ( 3,718,445) 4,201,857 1,050,464
Total governmental activities
long-term liabilities $ 264,986,867 $ 65,131,037 $( 41,043,255) $ 289,074,649 $ 13,992,461
The liability for compensated absences and the pension and OPEB-related liabilities are paid from the
General Fund, Crime District Fund, and enterprise funds based on the assignment of an employee at
termination.
Balance Balance Due Within
9/30/2018 Increases Reductions 9/30/2019 One Year
Business-type activities:
Water and sew er obligations:
General obligation bonds $ 1,730,000 $ $( 835,000) $ 895,000 $ 440,000
Certificates of obligation 8,600,000 ( 400,000) 8,200,000 400,000
Premium on bond issues 463,444 ( 56,918) 406,526 -
Total water and sewer bonds payable 10,793,444 ( 1,291,918) 9,501,526 840,000
Net OPEB liability 7,380,510 1,347,595 ( 281,925) 8,446,180 27,022
Net pension liability 2,928,749 2,530,943 ( 717,133) 4,742,559 -
Corrpensated absences 231,197 274,711 ( 254,077) 251,831 62,958
Total business-type activities
long-term liabilities $21,333,900 $ 4,153,249 $( 2,545,053) $22,942,096 $ 929,980
Current Refunding
In July 2019, the City issued $28,860,000 of General Obligation Refunding and Improvement Bonds,
Series 2019 with interest rates ranging from 3% to 4%. The net proceeds of $30,832,988 (including a
$1,972,988 premium) were used to refund the Combination Tax and Revenue Certificates of Obligation,
Series 2009 and Series 2009A.
The reacquisition price exceeded the net carrying amount of the old debt by $102,493. This amount is
reported as a deferred outflow of resources in the Statement of Net Position and will be amortized over
the remaining life of the refunding bonds. The Series 2014 bonds were refunded to reduce the City's total
debt service payments over 10 years by $662,530 and to obtain an economic gain (difference between
the net present values of the debt service payments on the old and new debt)of$601,163.
Authorized and Unissued Debt
The City had $1,235,000 in authorized general obligation bonds that were unissued as of September 30,
2019. These bonds were authorized through an election held November 7, 2017, for the construction of
animal shelter facilities, firefighting facilities, and for a multi-use facility and clubhouse at the Grapevine
Municipal Golf Course.
49
X. DEFINED BENEFIT PENSION PLAN
Plan Description. The City participates as one of 887 plans in the nontraditional,joint contributory, hybrid
defined benefit pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is
an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G,
Title 8, Texas Government Code (the TMRS Act) as an agency multiple-employer retirement system for
municipal employees in the State of Texas. The TMRS Act places the general administration and
management of the System with a six-member Board of Trustees. Although the Governor, with the advice
and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas.
TMRS's defined benefit pension plan is a tax-qualified plan under Sections 401(a) of the Internal
Revenue Code. TMRS issues a publicly available comprehensive annual financial report (CAFR) that can
be obtained at www.tmrs.com.
All eligible employees of the City are required to participate in TMRS.
Benefits Provided. TMRS provides retirement and disability benefits. Benefit provisions are adopted by the
governing body of the City,within the options available in the state statutes governing TMRS.
At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the
city-financed monetary credits with interest were used to purchase an annuity. Members may choose to
receive their retirement benefit in one of seven actuarially equivalent payments options. Members may also
choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24,
or 36 monthly payments,which cannot exceed 75%of the member's deposits and interest.
Starting in 2005, the City granted an annually repeating (automatic) basis monetary credit referred to as an
updated service credit (USC) which is a theoretical amount which considers salary increases or plan
improvements. If at any time during their career an employee earns a USC, this amount remains in their
account earning interest until retirement. At retirement, the benefit is calculated as if the sum of the
employee's accumulated contributions with interest and the employer match plus employer-financed
monetary credits, such as USC, with interest were used to purchase an annuity. Additionally, initiated in
1998, the City provided on an annually repeating (automatic) basis cost of living adjustments (COLA) for
retirees equal to a percentage of the change in the consumer price index(CPI).
The plan provisions are adopted by the governing body of the City, within the options available in the state
statutes governing TMRS. Plan provisions for the City were as follows:
Employee deposit rate 7%
Matching ratio(City to employee) 2 to 1
Years required for vesting 5
Service retirement eligibility 20 years to any age,or
5 years at age 60 and above
Updated service credit 100%repeating,transfers
Annuity increase to retirees 70%of CPI, repeating
Employees covered by benefit terms
At the December 31, 2018, valuation and measurement date, the following employees were covered by
the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 395
Inactive employees entitled to but not yet receiving benefits 279
Active employees 586
Total 1,260
50
Contributions. The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee
gross earnings, and the City matching percentages are with 100%, 150%, or 200%, both as adopted by
the governing body of the city. Under the state law governing TMRS, the contributions rate for each city is
determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The
actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by
employees during the year, with an additional amount to finance any unfunded accrued liability.
Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal
year. The contribution rate for the City was 18.98% and 18.58% in calendar years 2018 and 2019,
respectively. The City's contributions to TMRS for the year ended September 30, 2019, were $8,437,929
and were equal to the required contributions.
Net Pension Liability. The City's net pension liability (NPL) was measured as of December 31, 2018,
and the total pension liability (TPL) used to calculate the net pension liability was determined by an
actuarial valuation as of that date.
Actuarial assumptions:
The total pension liability in the December 31, 2018 actuarial valuation was determined using the
following actuarial assumptions:
Inflation 2.5%per year
Overall payroll growth 3.50%to 10.5%including inflation
Investment Rate of Return 6.75%
Salary increases were based on a service-related table. Mortality rates for active members, retirees, and
beneficiaries were based on the gender distinct RP2000 Combined Healthy Mortality Tables with Blue
Collar Adjustment with male rates multiplied by 109% and female rates multiplied by 103%. The rates are
projected on a fully generational basis by scale BB to account for future mortality improvements. For
disabled annuitants, the gender-distinct RP2000 Combined Healthy Mortality Tables with Blue Collar
Adjustment are used with males rates multiplied by 109% and female rates multiplied by 103% with a 3-
year set-forward for both males and females. In addition, a 3% minimum mortality rate is applied to reflect
the impairment for younger members who become disabled. The rates are projected on a fully
generational basis by scale BB to account for future mortality improvements subject to the 3% floor.
Actuarial assumptions used in the December 31, 2018, valuations were based on the results of actuarial
experience studies. The experience study in TMRS was for the period December 31, 2010 through
December 31, 2014. Healthy post-retirement mortality rates and annuity purchase rates were updated
based on a Mortality Experience Investigation Study covering 2009 through 2011, and dated December
31, 2013. These assumptions were first used in the December 31, 2013 valuation, along with a change to
the Entry Age Normal (EAN) actuarial cost method. Assumptions are reviewed annually. No additional
changes were made for the 2014 valuation. After the Asset Allocation Study analysis and experience
investigation study, the Board amended the long-term expected rate of return on pension plan
investments from 7% to 6.75%. Plan assets are managed on a total return basis with an emphasis on
both capital appreciation as well as the production of income, in order to satisfy the short-term and long-
term funding needs of TMRS.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best estimate ranges of expected future real rates of return (expected returns, net of
pension plan investment expense and inflation) are developed for each major asset class. These ranges
are combined to produce the long-term expected rate of return by weighting the expected future real rates
of return by the target asset allocation percentage and by adding expected inflation. In determining their
best estimate of a recommended investment return assumption under the various alternative asset
allocation portfolios, GRS focused on the area between (1) arithmetic mean (aggressive) without an
adjustment for time (conservative) and (2) the geometric mean (conservative) with an adjustment for time
(aggressive).
51
The target allocation and best estimates of real rates of return for each major asset class are summarized
in the following table:
Long-Term Expected
Target Real Rate of Return
Asset Class Allocation (Arithmetic)
Domestic Equity 17.5% 4.55%
International Equity 17.5% 6.35%
Core Fixed Income 10.0% 1.00%
Non-Core Fixed Income 20.0% 3.90%
Real Return 10.0% 3.80%
Real Estate 10.0% 4.50%
Absolute Return 10.0% 3.75%
Private Equity 5.0% 7.50%
Total 100.0%
Discount Rate
The discount rate used to measure the Total Pension Liability was 6.75%. The projection of cash flows
used to determine the discount rate assumed that employee and employer contributions will be made at
the rates specified in the statute. Based on that assumption, the pension plan's Fiduciary Net Position
was projected to be available to make all projected future benefit payments of current active and inactive
employees. Therefore, the long-term expected rate of return on pension plan investments was applied to
all periods of projected benefit payments to determine the Total Pension Liability.
Changes in the Net Pension Liability
Increase(Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(a) (b) (a)- (b)
Balance at 12/31/2017 $ 271,781,910 $ 237,426,164 $ 34,355,746
Changes for the year:
Service cost 8,129,774 - 8,129,774
Interest 18,265,311 - 18,265,311
Difference between expected and
actual experience ( 1,201,653) - ( 1,201,653)
Contributions-employer - 8,375,515 ( 8,375,515)
Contributions-employee - 3,093,341 ( 3,093,341)
Net investment income - ( 7,113,672) 7,113,672
Benefit payments, including refunds
of employee contributions ( 10,499,198) ( 10,499,198) -
Administrative expense - ( 137,452) 137,452
Other changes - ( 7,184) 7,184
Net changes 14,694,234 ( 6,288,650) 20,982,884
Balance at 12/31/2018 $ 286,476,144 $ 231,137,514 $ 55,338,630
52
The following presents the net pension liability of the City, calculated using the discount rate of 6.75%, as
well as what the City's net pension liability would be if it were calculated using a discount rate that is 1-
percentage-point lower or 1-percentage-point higher than the current rate:
1% Decrease in 1% Increase in
Discount Rate Discount Rate Discount Rate
(5.75%) (6.75%) (7.75%)
City's net pension
liability $ 95,678,551 $ 55,338,630 $ 22,215,636
Pension Plan Fiduciary Net Position
Detailed information about the pension plan's Fiduciary Net Position is available in a separately-issued
TMRS financial report. The report may be obtained on the Internet at www.tmrs.com.
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to Pensions
For the year ended September 30, 2019, the City recognized pension expense of$10,894,106.
At September 30, 2019, the City reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and
actual economic experience $ $ 2,144,969
Changes in actuarial assumptions 14,835
Difference between projected and
actual investment earnings 12,281,014 -
Contributions subsequent to the
measurement date 6,416,772 -
Total $ 18,697,786 $ 2,159,804
$6,416,772 reported as deferred outflows of resources related to pension resulting from contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability for the
year ending September 30, 2020. Other amounts reported as deferred outflows and inflows of resources
related to pensions will be recognized in pension expense as follows:
For the Year
Ended September
30,
2020 $ 3,338,827
2021 1,031,363
2022 1,288,778
2023 4,462,242
Total $ 10,121,210
53
XI. OTHER POSTEMPLOYMENT BENEFITS
Post-retirement Health Care Benefits
Plan Description.
The City provides certain health care and life insurance benefits through an agent, multiple-employer,
defined benefit OPEB plan, under City ordinance, for all full and part-time employees that meet eligibility
requirements. Eligible individuals include retired employees who have satisfied the requirement as
defined by the Texas Municipal Retirement System and their dependents that were covered prior to
retirement. The requirement as defined by the Texas Municipal Retirement System is any age with 20
years of service or 5 years of service for age 60 and above. City Council members that serve three terms
will be classified as retired employees when they leave office.
Retirees pay premiums for coverage in the OPEB programs. There is not a maximum employer paid
premium amount (capped benefit). Active employees do not contribute to the retiree health care plan.
Retirees are eligible for benefits immediately upon retirement. If the employee returns to work for an
employer that offers health coverage, they become ineligible for the City's plan and cannot rejoin the
City's health plan at a later date.
Benefits Provided
Retirees are eligible for medical, dental, vision, and prescription insurance until they become Medicare
eligible. Retirees are also eligible for a $20,000 life insurance policy. Once Medicare eligible, retirees are
eligible for dental, vision, and life insurance only. At that time, the City medical plan will no longer be
available. The City supplements 70% of the premium to all retirees who either(1) retire after the age of 65
or (2) are covered pre-Medicare in the retiree medical program. Spouses of retirees will receive the City
supplement if they have been on the plan for one year prior to retirement.
In the event that an active employee passes away, the spouse and dependents will become eligible for
retiree coverage if (1) the employee was eligible for retirement as defined by the Texas Municipal
Retirement System; and (2) the employee had dependent coverage at the time of death. Coverage will
continue under the plan as long as monthly retiree premiums are paid by the specified due date, until
dependents are no longer considered eligible dependents as defined by the plan, until the covered
dependent becomes Medicare eligible, or until a surviving spouse remarries.
For the fiscal year ended September 30, 2019, the City's contributions to the plan were $1,953,863 which
exceeded benefit payments of$1,453,863.
The number of employees currently covered by the benefit terms is as follows:
Inactive employees or beneficiaries currently receiving benefits 211
Active members 591
Total 802
54
Actuarial Methods and Assumptions
Significant methods and assumptions were as follows:
Actuarial Valuation Date 12/31/2018
Actuarial Cost Method Individual Entry Age Normal Cost Method
Discount Rate 3.82%as of December 31,2018
Inflation Rate 2.50%
Salary Increases 3.50%to 10.50%, including inflation
Demographic Assumptions Based on the experience study covering the four-year period
ending December 31,2014 as conducted for the Texas Municipal
Retirement System(TMRS)
Mortality For healthy retirees, the gender-distinct RP2000 Combined
Healthy Mortality Tables w ith Blue Collar Adjustment are used
with male rates multiplied by 109%and female rates multiplied by
103%. The rates are projected on a fully generational basis by
scale BB to account for future mortality improvements.
Participation Rates For health care coverage: 85% for retirees who are at least 50
years old at retirement and 65% for retirees who are younger
than 50 years old at retirement;For life insurance: 85%
regardless of age at retirement
Health care cost trend rates Pre-65 Medical: Initial rate of 7.20%declining to an ultimate rate of
5.00%after 12 years;
Pre-65 Medical: Ultimate trend rate includes a 0.75% adjustment
for the excise tax;
Post-65 Medical Subsidy: Increases with inflation;
Dental:4.00%;
Vision: 3.00%
Note: Assumption changes include a change in the Single Discount
Rate from 3.31% as of December 31, 2017 to 3.82% as of
December 31, 2018 and updates to the healthcare trend rates.
Additionally, the period of service used for the allocation of
normal costs w as changed to only reflect service with the City of
Grapevine.
Projections of health benefits are based on the plan as understood by the City and include the types of
benefits in force at the valuation date and the pattern of sharing benefit costs between the City and its
employees to that point. Actuarial calculations reflect a long-term perspective and employ methods and
assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the
actuarial value of assets.
There is no separately issued audited benefit plan report available for the City's OPEB plan.
Discount Rate
A Single Discount Rate of 3.82% was used to measure the total OPEB liability. This Single Discount Rate
was based on the municipal bond rates as of the measurement date. The source of the municipal bond rate
was Fixed-income municipal bonds with 20 years to maturity that include only federally tax-exempt
municipal bonds as reported in Fidelity Index's "20-year Municipal GO AA Index" as of December 31,
2018.
The asset portfolio of the OPEB trust can support a 6.75% long term rate of return. However, the City
recently established the trust and does not have a formal funding policy yet. As a result, the City has
decided to set the Single Discount Rate equal to the municipal bond rate until a pattern of contributions is
established.
55
Discount Rate Sensitivity Analysis
The following schedule shows the impact of the net OPEB liability if the discount rate used was 1% less
than and 1% greater than the discount rate that was used (3.82%) in measuring the Net OPEB liability.
1%Decrease in 1% Increase in
Discount Rate(2.82%) Discount Rate(3.82%) Discount Rate(4.82%)
City's net OPEB liability $ 75,203,315 $ 65,521,197 $ 57,544,130
Healthcare Cost Trend Rate Sensitivity Analysis
The following schedule shows the impact of the net OPEB liability if the Healthcare Cost Trend Rate used
was 1% less than and 1% greater than what was used in measuring the Net OPEB liability.
Current Healthcare Cost
1%Decrease Trend Rate Assumption 1% Increase
City's net OPEB liability $ 56,556,557 $ 65,521,197 $ 76,783,952
OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources Related to OPEBs
At September 30, 2019, the City reported a liability of $65,521,197 for its net OPEB liability. The net
OPEB liability was determined by an actuarial valuation as of December 31, 2018. For the year ended
September 30, 2019, the City recognized OPEB expense of $5,266,589. There were no changes of
benefit terms that affected measurement of the net OPEB liability during the measurement period.
Increase(Decrease)
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
(a) (b) (a)- (b)
Balance at 12/31/2017 $ 72,291,720 $ 1,061,328 $ 71,230,392
Changes for the year:
Service cost 3,547,117 - 3,547,117
Interest 2,423,640 - 2,423,640
Difference between expected
and actual experience ( 1,065,868) - ( 1,065,868)
Changes of assumptions ( 8,510,968) - ( 8,510,968)
Contributions-employer - 2,187,035 ( 2,187,035)
Net investment income - ( 77,518) 77,518
Benefit payments ( 1,687,035) ( 1,687,035) -
Administrative expense - ( 6,401) 6,401
Net changes ( 5,293,114) 416,081 ( 5,709,195)
Balance at 12/31/2018 $ 66,998,606 $ 1,477,409 $ 65,521,197
56
Changes in assumptions and other inputs reflect a change in the discount rate from 3.31% to 3.82%. At
September 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources
related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and
actual economic experience $ 151,907 $ 918,274
Changes in actuarial assumptions 3,432,623 7,332,424
Difference between projected and
actual investment earnings 116,017 -
Contributions subsequent to the
measurement date 1,106,707
Total $ 4,807,254 $ 8,250,698
$1,106,707 reported as deferred outflows of resources related to OPEB resulting from contributions
subsequent to the measurement date are due to benefit payments the City paid with own assets and will
be recognized as a reduction of the net OPEB liability for the year ending September 30, 2020. Other
amounts of the reported as deferred outflows and inflows of resources related to OPEB will be recognized
in OPEB expense as follows:
For the Year
Ended September
30,
2020 $( 620,964)
2021 ( 620,964)
2022 ( 620,964)
2023 ( 615,069)
2024 ( 648,494)
Thereafter ( 1,423,696)
Total $( 4,550,151)
XII. COMMITMENTS AND CONTINGENCIES
The City is a defendant in several pending lawsuits. City management estimates, based on the advice of
legal counsel, that the potential claims against the City, in excess of insurance coverage, would not
materially affect the basic financial statements of the City.
The City participates in a number of federal and state grant programs. These programs are subject to
program compliance audits by the grantors or their representatives. Any liability that may arise as the
result of these audits is not believed to be estimable or probable.
57
XIII. TAX ABATEMENTS
The City enters into economic development agreements designed to promote development and
redevelopment within the City, spur economic improvement, stimulate commercial activity, generate
additional sales tax and enhance the property tax base and economic vitality of the City. The City's
economic development agreements are authorized under Chapter 380 of the Texas Local Government
Code, Chapter 311 (Tax Increment Financing Act) and Chapter 312 (Property Redevelopment and Tax
Abatement) of the Texas Tax Code. The economic development agreements are designed to support the
creation of new businesses, the expansion and retention of existing businesses within the City, and the
attraction of companies that offer high impact jobs and share the community's values. Recipients may be
eligible to receive economic assistance based on the employment, economic or community impact of the
project requesting assistance. Recipients generally commit to building or remodeling real property and
related infrastructure, redeveloping properties, expanding operations or bringing targeted business to the
City. Agreements generally contain recapture provisions which may require repayment or termination if
recipients do not meet the required provisions of the economic incentives.
The City has the following categories of economic development agreements:
• General Economic Development— The City enters into various agreements under Chapter 380 of the
Texas Local Government Code to stimulate economic development. Agreements may rebate a flat
amount or a percentage of hotel occupancy taxes or sales taxes received by the City, may result in fee
reductions such as utility charges or building inspection or permit fees, or make lump sum payments to
offset moving expenses, tenant finish-outs, demolition costs, infrastructure reimbursements,
redevelopment costs, or other expenses. For fiscal year 2019, the City rebated $3,485,262 in taxes and
made incentive payments of$100,000 under these agreements.
• Tax Increment Financing — The City has adopted two Tax Increment Financing zones ("TIFs") under
Chapter 311 of the Texas Tax Code. The City enters into economic development and infrastructure
reimbursement agreements which earmark TIF revenues for payment to developers and represent
obligations over the life of the TIF or until the terms of the agreements have been met. Additionally, the
City enters into general economic development agreements under Chapter 380 of the Texas Local
Government Code which are funded with TIF resources. The City made $3,807,117 in payments for TIF
obligations and $4,024 in waived fees.
XIV. RISK MANAGEMENT
The City purchases a fully-insured program for property and casualty insurance coverage through Travelers
Insurance and workers' compensation coverage through Texas Municipal League. The City is insured at the
following limits:
Policy Limits Deductible
General liability $1,000,000 per occurrence/$2,000,000 aggregate $10,000
Automobile liability $1,000,000 per occurrence $0
Automobile physical damage Actual cash value $1,000
Excess liability $10,000,000 per occurrence/$10,000,000 aggregate $0
Property $218,886,703 varies by peril
Workers'compensation Statutory/employers'liability $1,000,000
Risk Management oversees the City's self-insured employee health plan and retiree health plans. UMR is
the third-party administrator for the employee and pre-65 retiree health plans. Claims and other plan
administration services are performed by UMR. All participating funds make payments to the General Fund
for their portion of property and casualty and health plan cost.
58
Financial responsibility in a self-insured funding arrangement is on the City, the risk of losses exceeding an
affordable threshold is transferred to an insurance company through the purchase of stop-loss insurance with
Stealth Partner Group. Stop-loss insurance protects the City from plan claims costs exceeding a specified
deductible during the plan year.
Specific Excess Loss Insurance
The City has specific excess loss insurance to cover specific claims incurred by plan participants. The City
has a $250,000 specific deductible for each medical plan member. The specific benefit period
reimbursement maximum under this coverage is unlimited per covered person.
Aggregate Excess Loss Insurance
The City also has coverage for aggregate claims incurred under the self-insured health plan. Under this
coverage, aggregate claims in excess of an estimate annual aggregate attachment point of$9,505,503 would
be covered up to an aggregate benefit period reimbursement maximum of$1,000,000.
The City establishes the insurance claim liability based on estimates of the ultimate cost of claims reported
but unsettled and of claims incurred but not reported. Any claims incurred and not reported are not believed
to be significant to the City's financial statements. Activity for the last two years is as follows:
2019 2018
Claims payable,beginning of year $ 650,081 $ 2,005,365
Current year claims and changes in estimates 3,966,014 7,601,763
Payments on claims ( 3,921,644) ( 8,957,047)
Claims payable at end of year $ 694,451 $ 650,081
XV. WATER STORAGE RIGHTS
Water storage rights of $683,547 (net of accumulated amortization of $656,486) represent rights in the
Federal Reservoir at Lake Grapevine purchased through a long-term contract with the federal
government and are recorded at cost, with amortization being recorded using the straight-line method
over the initial term of the contract of 40 years. Approximately 2 years remain on the contract.
XVI. IMPACT FEES
The City records impact fees received in excess of the cost of physical connection to the Water and
Sewer system as revenues. Corresponding cash is recorded as a restricted asset for future expansion of
the Water and Sewer system.
XVII. WATER AND SEWER CONTRACTS
The City has separate contracts with the Trinity River Authority of Texas ("TRA") for the purchase of
treated water and for the transportation, treatment and disposal of wastewater. The contracts require the
City to pay varying amounts based on the costs associated with water purchased and wastewater
transported and/or treated and disposed. The costs include the City's proportionate share of TRA's
operating and maintenance expenses, related debt service costs, plus certain other miscellaneous
charges. The City also purchases water from the City of Dallas-Water Utilities and Dallas County Park
Cities Municipal Utilities District.
Payments during 2019 for the purchase of treated water were $8,030,760 and payments made for the
transportation, treatment, and disposal of wastewater by TRA were $1,478,364. If the City were unable to
fulfill its obligations under the contracts, the only liability for future payment would be its proportionate
share of debt service requirements. In addition, the City does not retain an ongoing financial interest in
TRA and has no representation on the TRA Board; therefore, the TRA contracts are not considered to be
joint venture agreements.
59
XVIII. PRIOR PERIOD ADJUSTMENT
In the fund financial statements, an adjustment to unearned revenues resulted in an increase in the
beginning fund balance of the General Fund of $589,801. The beginning net position was increased by
$140,951 due to adjustments to capital assets in the governmental activities. The net increase to
beginning net position of governmental activities was $730,752.
60
REQUIRED
SUPPLEMENTARY INFORMATION
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
GENERALFUND
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Budgeted Amounts
Variance with
Final Budget-
Positive
Original Final Actual (Negative)
REVENUES
Property tax $ 11,165,766 $ 11,165,766 $ 11,765,849 $ 600,083
Sales tax 28,890,000 28,890,000 29,863,646 973,646
Mixed beverage tax 1,800,000 1,800,000 2,145,940 345,940
Franchise tax 6,983,718 6,983,718 6,435,472 ( 548,246)
Licenses and permits 1,910,194 1,910,194 1,969,000 58,806
Intergovernmental 425,190 425,190 380,269 ( 44,921)
Charges for services 5,899,063 5,899,063 5,406,622 ( 492,441)
Fines and forfeitures 1,763,812 1,763,812 1,509,299 ( 254,513)
Investment income 106,500 106,500 283,313 176,813
Miscellaneous 656,200 656,200 448,761 ( 207,439)
Total revenues 59,600,443 59,600,443 60,208,171 607,728
EXPENDITURES
Current:
General government 16,772,903 16,758,673 15,435,676 1,322,997
Public safety 16,330,103 16,310,103 16,198,439 111,664
Culture and recreation 12,972,351 12,970,351 13,299,784 ( 329,433)
Public works 8,790,555 8,790,555 8,524,275 266,280
Capital outlay 92,000 128,230 264,387 ( 136,157)
Debt service:
Principal - - 118,558 ( 118,558)
Fiscal agent charges - - 4,210 ( 4,210)
Total expenditures 54,957,912 54,957,912 53,845,329 1,112,583
EXCESS (DEFICIENCY) OF REVENUE
OVER(UNDER) EXPENDITURES 4,642,531 4,642,531 6,362,842 1,720,311
OTHER FINANCING SOURCES (USES)
Transfers in 4,508,893 4,508,893 3,907,798 ( 601,095)
Transfers out ( 9,076,630) ( 9,076,630) ( 12,276,630) ( 3,200,000)
Sale of capital assets 25,700 25,700 156,217 130,517
Total other
financing sources (uses) ( 4,542,037) ( 4,542,037) ( 8,212,615) ( 3,670,578)
NET CHANGE IN FUND BALANCES 100,494 100,494 ( 1,849,773) ( 1,950,267)
FUND BALANCES, BEGINNING 15,555,243 15,555,243 15,555,243 -
PRIOR PERIOD ADJUSTMENT - - 589,801 589,801
FUND BALANCES, BEGINNING
RESTATED 15,555,243 15,555,243 16,145,044 589,801
FUND BALANCES, ENDING $ 15,655,737 $ 15,655,737 $ 14,295,271 $( 1,360,466)
The accompanying notes are an integral
part of this schedule. 61
CITY OF GRAPEVINE, TEXAS
HOTEL OCCUPANCY TAX
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Budgeted Amounts
Variance with
Final Budget-
Positive
Original Final Actual (Negative)
REVENUES
Taxes $ 19,052,757 $ 19,525,335 $ 20,767,302 $ 1,241,967
Charges for services 7,447,692 7,447,692 7,634,638 186,946
Investment income 92,000 92,000 448,501 356,501
Miscellaneous 70,000 70,000 29,732 ( 40,268)
Total revenues 26,662,449 27,135,027 28,880,173 1,745,146
EXPENDITURES
Current:
Tourism 25,018,943 25,039,740 22,413,522 2,626,218
Capital outlay 13,000 13,000 1,192,933 ( 1,179,933)
Debt Service:
Fiscal agent charges - - 1,771 ( 1,771)
Total expenditures 25,031,943 25,052,740 23,608,226 1,444,514
EXCESS (DEFICIENCY) OF REVENUE
OVER(UNDER) EXPENDITURES 1,630,506 2,082,287 5,271,947 3,189,660
OTHER FINANCING SOURCES (USES)
Transfers in 444,610 444,610 529,479 84,869
Transfers out ( 2,511,336) ( 2,511,336) ( 2,556,024) ( 44,688)
Total other financing sources (uses) ( 2,066,726) ( 2,066,726) ( 2,026,545) 40,181
NET CHANGE IN FUND BALANCES ( 436,220) 15,561 3,245,402 3,229,841
FUND BALANCES, BEGINNING 17,017,842 17,017,842 17,017,842 -
FUND BALANCES, ENDING $ 16,581,622 $ 17,033,403 $ 20,263,244 $ 3,229,841
The accompanying notes are an integral
part of this schedule. 62
CITY OF GRAPEVINE, TEXAS
CRIME DISTRICT
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Budgeted Amounts
Variance with
Final Budget-
Positive
Original Final Actual (Negative)
REVENUES
Taxes $ 14,445,000 $ 14,445,000 $ 14,563,884 $ 118,884
Intergovernmental - - 13,605 13,605
Fines and forfeitures 150,000 159,650 88,042 ( 71,608)
Investment income 30,000 30,000 190,715 160,715
Miscellaneous 6,500 6,500 12,737 6,237
Total revenues 14,631,500 14,641,150 14,868,983 227,833
EXPENDITURES
Current:
General government 164,313 164,313 142,921 21,392
Public safety 17,523,817 17,503,817 18,068,637 ( 564,820)
Total expenditures 17,688,130 17,668,130 18,211,558 ( 543,428)
EXCESS (DEFICIENCY) OF REVENUE
OVER(UNDER) EXPENDITURES ( 3,056,630) ( 3,026,980) ( 3,342,575) ( 315,595)
OTHER FINANCING SOURCES (USES)
Transfers in 3,056,630 3,056,630 3,056,630 -
Transfers out - ( 20,000) - 20,000
Total other financing sources (uses) 3,056,630 3,036,630 3,056,630 20,000
NET CHANGE IN FUND BALANCES - 9,650 ( 285,945) ( 295,595)
FUND BALANCES, BEGINNING ( 759,398) ( 759,398) ( 759,398) -
FUND BALANCES, ENDING $( 759,398) $( 749,748) $( 1,045,343) $( 295,595)
The accompanying notes are an integral
part of this schedule. 63
CITY OF GRAPEVINE, TEXAS
4B - ECONOMIC DEVELOPMENT
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Budgeted Amounts
Variance with
Final Budget-
Positive
Original Final Actual (Negative)
REVENUES
Taxes $ 3,611,250 $ 3,611,250 $ 4,393,875 $ 782,625
Charges for services - - 23,860 23,860
Investment income 150,000 150,000 144,125 ( 5,875)
Miscellaneous - - 100 100
Total revenues 3,761,250 3,761,250 4,561,960 800,710
EXPENDITURES
Current:
Economic development 2,058,806 2,058,806 1,301,974 756,832
Total expenditures 2,058,806 2,058,806 1,301,974 756,832
EXCESS (DEFICIENCY) OF REVENUE
OVER(UNDER) EXPENDITURES 1,702,444 1,702,444 3,259,986 1,557,542
OTHER FINANCING SOURCES (USES)
Transfers out ( 1,702,444) ( 1,702,444) ( 1,736,070) ( 33,626)
Sale of capital assets - - 4,208,462 4,208,462
Total other financing sources (uses) ( 1,702,444) ( 1,702,444) 2,472,392 4,174,836
NET CHANGE IN FUND BALANCES - - 5,732,378 5,732,378
FUND BALANCES, BEGINNING 6,098,006 6,098,006 6,098,006 -
FUND BALANCES, ENDING $ 6,098,006 $ 6,098,006 $ 11,830,384 $ 5,732,378
The accompanying notes are an integral
part of this schedule. 64
CITY OF GRAPEVINE, TEXAS
4B -TRANSIT
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Budgeted Amounts
Variance with
Final Budget-
Positive
Original Final Actual (Negative)
REVENUES
Sales taxes $ 10,833,750 $ 10,833,750 $ 10,476,439 $( 357,311)
Investment income 10,000 10,000 8,177 ( 1,823)
Total revenues 10,843,750 10,843,750 10,484,616 ( 359,134)
EXPENDITURES
Current:
Transportation 10,389,140 10,389,140 10,046,960 342,180
Total expenditures 10,389,140 10,389,140 10,046,960 342,180
EXCESS (DEFICIENCY) OF REVENUE
OVER(UNDER) EXPENDITURES 454,610 454,610 437,656 ( 16,954)
OTHER FINANCING SOURCES (USES)
Transfers out ( 444,610) ( 444,610) ( 429,479) 15,131
Total other financing sources (uses) ( 444,610) ( 444,610) ( 429,479) 15,131
NET CHANGE IN FUND BALANCE 10,000 10,000 8,177 ( 1,823)
FUND BALANCE, BEGINNING 8,784 8,784 8,784 -
FUND BALANCE, ENDING $ 18,784 $ 18,784 $ 16,961 $( 1,823)
The accompanying notes are an integral
part of this schedule. 65
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS
SCHEDULE OF CHANGES IN NET PENSION LIABILITY
AND RELATED RATIOS -TEXAS MUNICIPAL RETIREMENT SYSTEM
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Plan Year 2014 2015
A. Total pension liability
Service Cost $ 6,509,572 $ 7,082,668
Interest (on the total pension liability) 15,338,396 16,144,617
Difference between expected and actual experience ( 1,847,827) ( 1,393,602)
Changes of assumptions - ( 77,299)
Benefit payments, including refunds of employee contributions ( 8,121,165) ( 9,417,307)
Net change in total pension liability 11,878,976 12,339,077
Total pension liability- beginning 219,925,733 231,804,709
Total pension liability-ending (a) $ 231,804,709 $ 244,143,786
B. Plan fiduciary net position
Contributions - employer $ 6,975,288 $ 7,547,081
Contributions - employee 2,583,406 2,769,765
Net investment income 10,365,590 284,606
Benefit payments, including refunds of employee contributions ( 8,121,165) ( 9,417,307)
Administrative expense ( 108,213) ( 173,344)
Other ( 8,897) ( 8,562)
Net change in plan fiduciary net position 11,686,009 1,002,239
Plan fiduciary net position - beginning 181,182,907 192,868,916
Plan fiduciary net position -ending (b) 192,868,916 193,871,155
C. Net pension liability-ending (a) - (b) $ 38,935,793 $ 50,272,631
D. Plan fiduciary net position as a percentage of total pension
liability 83.20% 79.41%
E. Covered payroll $ 36,690,944 $ 39,260,910
F. Net pension liability as a percentage of covered payroll 106.12% 128.05%
Note: GASB Statement No. 68 requires 10 years of data to be provided in this schedule. As of September 30,
2019, only 5 years are included and additional years will be added in the future as the information becomes
available.
66
2016 2017 2018
$ 7,293,298 $ 7,724,236 $ 8,129,774
16,410,412 17,301,746 18,265,311
( 1,109,085) ( 772,200) ( 1,201,653)
( 9,346,450) ( 9,863,833) ( 10,499,198)
13,248,175 14,389,949 14,694,234
244,143,786 257,391,961 271,781,910
$ 257,391,961 $ 271,781,910 $ 286,476,144
$ 7,526,300 $ 7,958,051 $ 8,375,515
2,764,119 2,922,684 3,093,341
13,104,905 28,801,972 ( 7,113,672)
( 9,346,450) ( 9,863,833) ( 10,499,198)
( 147,973) ( 149,230) ( 137,452)
( 7,972) ( 7,564) ( 7,184)
13,892,929 29,662,080 ( 6,288,650)
193,871,155 207,764,084 237,426,164
207,764,084 237,426,164 231,137,514
$ 49,627,877 $ 34,355,746 $ 55,338,630
80.72% 87.36% 80.68%
$ 39,444,551 $ 41,752,627 $ 44,087,711
125.82% 82.28% 125.52%
67
CITY OF GRAPEVINE, TEXAS
SCHEDULE OF PENSION CONTRIBUTIONS
TEXAS MUNICIPAL RETIREMENT SYSTEM
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Fiscal Year 2014 2015 2016
Actuarial determined contribution $ 6,911,778 $ 7,193,830 $ 7,395,291
Contributions in relation to the actuarially
determined contribution 6,911,778 7,193,830 7,395,291
Contribution deficiency(excess) - - -
Covered payroll 36,595,511 37,658,091 38,748,515
Contributions as a percentage of
covered payroll 18.89% 19.10% 19.09%
Notes to Schedule of Contributions
Valuation Date:
Actuarially determined contribution rates are calculated as of December 31 st and become
effective in January, 13 months and a day later.
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method Entry Age Normal
Amortization Method Level Percentage of Payroll, Closed
Remaining Amortization
Period 27 years
Asset Valuation Method 10 Year smoothed market; 15% soft corridor
Inflation 2.5%
Salary Increases 3.50% to 10.50% including inflation
Investment Rate of Return 6.75%
Retirement Age Experience-based table of rates that are specific to the City's plan
of benefits. Last updated for the 2015 valuation pursuant to an
experience study of the period 2010-2014.
Mortality RP2000 Combined Mortality Table with Blue Collar Adjustment with
male rates multiplied by 109% and female rates multiplied by 103%
and projected on a fully generational basis of with BB.
Other Information There were no benefit changes during the year.
Note: GASB Statement No. 68 requires 10 years of data to be provided in this schedule. As of
September 30, 2019, only 6 years are included and additional years will be added in the future
as the information becomes available.
68
2017 2018 2019
$ 7,815,149 $ 8,334,727 $ 8,735,515
7,815,149 8,334,727 8,735,515
41,002,879 43,861,106 44,087,711
19.06% 19.00% 19.81%
69
CITY OF GRAPEVINE, TEXAS
SCHEDULE OF CHANGES IN NET OPEB LIABILITY
AND RELATED RATIOS
POST-RETIREMENT HEALTH CARE BENEFIT PLAN
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Plan Year 2017 2018
A. Total OPEB liability
Service Cost $ 2,883,770 $ 3,547,117
Interest (on the total OPEB liability) 2,452,440 2,423,640
Difference between expected and actual experience 209,342 ( 1,065,868)
Changes of assumptions 4,730,475 ( 8,510,968)
Benefit payments ( 1,821,839) ( 1,687,035)
Net change in total OPEB liability 8,454,188 ( 5,293,114)
Total OPEB liability- beginning 63,837,532 72,291,720
Total OPEB liability-ending (a) $ 72,291,720 $ 66,998,606
B. Plan fiduciary net position
Employer Contributions $ 2,821,839 $ 2,187,035
Net investment income 63,643 ( 77,518)
Benefit payments ( 1,821,839) ( 1,687,035)
Administrative expense ( 2,315) ( 6,401)
Net change in plan fiduciary net position 1,061,328 416,081
Plan fiduciary net position - beginning - 1,061,328
Plan fiduciary net position -ending (b) 1,061,328 1,477,409
C. Net OPEB liability-ending (a) - (b) $ 71,230,392 $ 65,521,197
D. Plan fiduciary net position as a percentage of total OPEB
liability 1.47% 2.21%
E. Covered-employee payroll $ 41,752,627 $ 44,087,895
F. Net OPEB liability as a percentage of Covered-employee payroll 170.60% 148.61%
Notes to Schedule:
GASB Statement No. 75 requires 10 years of data to be provided in this schedule. As of September 30, 2019,
only 2 years are included. Additional years will be added in the future as the information becomes available.
The period of service used for allocation of normal costs was changed to only reflect service with the City and
the healthcare trend assumption was updated.
Included in the changes of assumptions was a change in the discount rate from 3.31% to 3.82%.
70
CITY OF GRAPEVINE, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
SEPTEMBER 30, 2019
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, the Crime
District Fund, the 4B — Economic Development Fund, the 4B — Transit Fund, the Lake Park
Fund, the Debt Service Fund and Enterprise Funds. Budgetary control is maintained at the fund
level.
(6) Budgets for the General, Hotel Occupancy Tax, Crime District, 4-B Economic Development
Fund, 413—Transit Fund, the Lake Park Fund, and Debt Service Fund are adopted in accordance
with generally accepted accounting principles. Budget amounts are as amended by the City
Council and adjusted for transfers of budgeted amounts between departments within any fund,
authorized by the City Manager.
(7) Budgetary comparison schedules are presented as required supplementary information for the
General Fund and for each major special revenue fund. Capital Projects Funds have not been
presented as such funds are budgeted over the life of the respective project and not on an
annual basis. Accordingly, formal budgetary integration of these funds is not employed and
comparison of actual results of operations to budgetary data for such funds is not presented.
(8) The budgetary comparison schedules included in the required supplementary information
present a comparison of budgetary data to actual results of operations for the General Fund,
Hotel Occupancy Tax Fund, Crime District Fund, 4-B Economic Development Fund, and 413—
Transit Fund. A comparison of budgetary data to actual results of operations for the Debt
Service Fund and the Lake Park Fund are presented as supplementary information.
2. EXCESS OF EXPENDITURES OVER APPROPRIATIONS
At September 30, 2019, expenditures and transfers exceeded appropriations in the General Fund by
$2,087,417, the Crime District Fund by$523,428, and the Debt Service Fund by$6,103,093.
71
COMBINING AND INDIVIDUAL
STATEMENTS AND SCHEDULES
THIS PAGE LEFT BLANK INTENTIONALLY
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for revenues that are restricted in nature for a special purpose limited by state
law and management intentions for expenditures.
Special Revenue Fund—to account for revenues that are restricted in name for a special purpose limited by state
law and management intentions for expenditures. These funds include monies for state and federal forfeitures,
library and parks programs and police in-service training.
Storm Drainage Fund— to account for revenues from a special fee that is restricted to finance the maintenance,
repair, and construction of drainage facilities.
Lake Parks Fund—accounts for the operations of the City's Parks and Recreation Department at Grapevine Lake.
DEBT SERVICE FUND
Debt Service Funds are used to account for the accumulation of resources that are restricted, committed, or assigned for the
payment of principal and interest on long-term obligations of governmental funds.
Tax Increment Financing (TIF) #2 Fund — to account for the accumulation of resources that are restricted,
committed, or assigned for the payment of principal and interest on long-term obligations of TIF#2.
CAPITAL PROJECTS FUNDS
Capital Projects Funds — used to account for the acquisition and construction of major capital facilities other than those
financed by proprietary funds and trust funds.
Grant Fund—accounts for the funds received from external sources as they relate to grants awarded to the City.
Parks Open Space and Recreation Fund — used to account for the financing, acquisition, construction and
improvement of parks and public recreation facilities.
Tax Increment Financing (TIF) #2 Fund — established for the financing, acquisition and construction of the
infrastructure surrounding Gaylord Texas Resort and Convention Center.
Streets Fund— is used to account for the construction of improvements to various streets, drainage, and sidewalk
projects.
Street Maintenance and Capital Replacement Fund—to account for resources provided and expended on street
maintenance and capital replacements.
Capital Acquisition Fund—to account for financial resources for the replacement and acquisition of capital assets.
Quality of Life Fund—to account for capital projects as designated by the City Council.
CITY OF GRAPEVINE, TEXAS
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2019
Special Revenue Debt Service Capital Projects
Special Storm
Revenue Drainage Lake Parks TIF#2 Grant
ASSETS
Cash $ 2,848,974 $ 2,066,274 $ - $ 9,438,756 $ -
Receivables:
Accounts, net 52,492 150,165 115 - -
Accrued interest 165 110 - 551 13
Due from other governments - - - - 345,608
Total assets 2,901,631 2,216,549 115 9,439,307 345,621
LIABILITIES
Liabilities:
Accounts payable 50,471 195,128 158,603 - 6,033
Accrued and other liabilities 871 32,348 18,493 - 8,386
Due to other funds - - 2,894,270 - 34,217
Due to other governments 91 - 1,357 - -
Unearned revenue 1,554 - 346,140 - -
Developer deposits - - - - -
Totalliabilities 52,987 227,476 3,418,863 - 48,636
DEFERRED INFLOWS OF
RESOURCES
Unavailable revenue 14,271 - - - 42,470
Total deferred inflows
of resources 14,271 - - - 42,470
FUND BALANCES(DEFICITS)
Restricted:
Capital projects 206,834 210,677 - - -
Court security and technology 404,011 - - - -
Public safety 746,509 - - - -
Records preservation 9,893 - - - -
Debt service - - - 9,439,307 -
Culture and recreation 192,671 - - - -
Committed for:
Stormwater drainage
operations - 1,778,396 - - -
Public arts 992,040 - - - -
Assigned for:
Capital projects 268,018 - - - 254,515
Culture and recreation 10,910 - - - -
Public safety 3,854 - - - -
Unassigned ( 367) - ( 3,418,748) - -
Total fund balances(deficits) 2,834,373 1,989,073 ( 3,418,748) 9,439,307 254,515
Total liabilities, deferred
inflows of resources
and fund balances $ 2,901,631 $ 2,216,549 $ 115 $ 9,439,307 $ 345,621
72
Capital Projects
Street
Parks Open Maintenance Total Other
Space and and Capital Capital Quality Governmental
Recreation TIF#2 Streets Replacement Acquisition of Life Funds
$ 408,936 $ 2,266,808 $ 5,532,273 $ 1,040,022 $ 8,146,271 $ 6,987,209 $ 38,735,523
- - - 720 - 81,698 285,190
24 - 281 236 221 385 1,986
- - - 38,801 - - 384,409
408,960 2,266,808 5,532,554 1,079,779 8,146,492 7,069,292 39,407,108
6,876 - 300,670 308,833 132,003 788,938 1,947,555
- - - - - - 60,098
- - - - - - 2,928,487
- - - - - - 1,448
- - - - - - 347,694
192,518 - 995,688 - - - 1,188,206
199,394 - 1,296,358 308,833 132,003 788,938 6,473,488
- - - 5,543 - 77,698 139,982
- - 5,543 - 77,698 139,982
- 2,266,808 2,551,277 - 1,055,635 383,213 6,674,444
- - - - - - 404,011
- - - - - - 746,509
- - - - - - 9,893
- - - - - - 9,439,307
- - - - - - 192,671
- - - - - - 1,778,396
- - - - - - 992,040
- - 1,684,919 765,403 6,958,854 5,819,443 15,751,152
209,566 - - - - - 220,476
- - - - - - 3,854
- - - - - - ( 3,419,115)
209,566 2,266,808 4,236,196 765,403 8,014,489 6,202,656 32,793,638
$ 408,960 $ 2,266,808 $ 5,532,554 $ 1,079,779 $ 8,146,492 $ 7,069,292 $ 39,407,108
73
CITY OF GRAPEVINE, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Special Revenue Debt Service Capital Projects
Special Storm
Revenue Drainage Lake Parks TIF#2 Grant
REVENUES
Property tax $ - $ - $ - $ 5,806,220 $ -
Franchise tax 182,566 - - - -
Chargesforservices 156,825 1,571,370 1,316,699 - -
Fines and forfeitures 64,899 - - - -
Intergovernmental 32,694 - - - 493,370
Contributions 232,772 - - - -
Investment income 44,147 35,289 - 137,703 3,935
Miscellaneous 13,719 - 16,257 - 8,003
Total revenues 727,622 1,606,659 1,332,956 5,943,923 505,308
EXPENDITURES
Current:
General government 26,205 - - - -
Public safety 52,236 - - - 104,746
Culture and recreation 213,096 - 2,295,812 - 734
Public works - 1,028,900 - - 92,717
Economic development - - - 1,430,250 -
Capital outlay 302,981 337,604 58,318 - 707,955
Debt service:
Principal - - - 1,645,000 -
Interest - - - 642,400 -
Fiscal agent charges - - - 750 -
Total expenditures 594,518 1,366,504 2,354,130 3,718,400 906,152
EXCESS(DEFICIENCY)
OF REVENUE OVER
(UNDER) EXPENDITURES 133,104 240,155 ( 1,021,174) 2,225,523 ( 400,844)
OTHER FINANCING
SOURCES(USES)
Transfers in 2,118 - - - 139,664
Transfers out - ( 112,059) ( 107,023) - ( 50)
Insurance recoveries - - - - -
Total other financing
sources (uses) 2,118 ( 112,059) ( 107,023) - 139,614
NET CHANGE IN FUND BALANCES 135,222 128,096 ( 1,128,197) 2,225,523 ( 261,230)
FUND BALANCES, BEGINNING 2,699,151 1,860,977 ( 2,290,551) 7,213,784 515,745
FUND BALANCES, ENDING $ 2,834,373 $ 1,989,073 $( 3,418,74J8 $ 9,439,307 $ 254,515
74
Capital Projects
Street
Parks Open Maintenance Total Other
Space and and Capital Capital Quality Governmental
Recreation TIF#2 Streets Replacement Acquisition of Life Funds
$ - $ - $ - $ - $ - $ - $ 5,806,220
- - - - - - 182,566
24,117 - 18,290 - - - 3,087,301
- - - - - - 64,899
- 66,516 - - 592,580
- - - - - - 232,772
4,979 55,514 142,926 53,801 156,924 126,028 761,246
200,000 - 88,669 - - 11,621 338,269
229,096 55,514 249,885 120,317 156,924 137,649 11,065,853
- - - 88,141 97,197 - 211,543
- - - 66,292 - - 223,274
- - - 955,887 373,343 33,981 3,872,853
- - - 1,951,887 - 1,890 3,075,394
- - - - - - 1,430,250
35,384 - 1,668,640 415,563 1,478,593 6,607,668 11,612,706
- - - - - 209,920 1,854,920
- - - - 97,378 739,778
- 700 - - 1,964 - 3,414
35,384 700 1,668,640 3,477,770 1,951,097 6,950,837 23,024,132
193,712 54,814 ( 1,418,755) ( 3,357,453) ( 1,794,173) ( 6,813,188) ( 11,958,279)
- - - 3,020,000 3,200,000 3,000,000 9,361,782
- - - - - ( 139,664) ( 358,796)
- - - - 63,391 - 63,391
- - - 3,020,000 3,263,391 2,860,336 9,066,377
193,712 54,814 ( 1,418,755) ( 337,453) 1,469,218 ( 3,952,852) ( 2,891,902)
15,854 2,211,994 5,654,951 1,102,856 6,545,271 10,155,508 35,685,540
$ 209,566 $ 2,266,808 $ 4,236,196 $ 765,403 $ 8,014,489 $ 6,202,656 $ 32,793,638
75
CITY OF GRAPEVINE, TEXAS
DEBT SERVICE FUND
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Budgeted Amounts
Variance with
Final Budget-
Positive
Original Final Actual (Negative)
REVENUES
Taxes $ 12,932,510 $ 12,932,510 $ 12,271,795 $( 660,715)
Investment income 150,000 150,000 202,653 52,653
Total revenues 13,082,510 13,082,510 12,474,448 ( 608,062)
EXPENDITURES
Debt service:
Principal 10,590,590 10,590,590 10,590,590 -
Interest 5,388,951 5,388,951 5,261,727 127,224
Payment to refunded bond
escrow agent - - 6,077,493 ( 6,077,493)
Bond issuance costs - - 23,036 ( 23,036)
Fiscal agent charges 10,000 10,000 128,911 ( 118,911)
Total expenditures 15,989,541 15,989,541 22,081,757 ( 6,092,216)
EXCESS (DEFICIENCY) OF REVENUE
OVER(UNDER) EXPENDITURES ( 2,907,031) ( 2,907,031) ( 9,607,309) ( 6,700,278)
OTHER FINANCING SOURCES (USES)
Transfers in 2,454,135 2,454,135 2,454,135 -
Issuance of debt - - 5,395,000 5,395,000
Premium on issuance of debt - - 589,173 589,173
Total other financing
sources (uses) 2,454,135 2,454,135 8,438,308 5,984,173
NET CHANGE IN FUND BALANCE ( 452,896) ( 452,896) ( 1,169,001) ( 716,105)
FUND BALANCE, BEGINNING 8,918,787 8,918,787 8,918,787 -
FUND BALANCE, ENDING $ 8,465,891 $ 8,465,891 $ 7,749,786 $( 716,105)
76
CITY OF GRAPEVINE, TEXAS
LAKE PARKS FUND
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Budgeted Amounts
Variance with
Final Budget-
Positive
Original Final Actual (Negative)
REVENUES
Charges for services $ 2,848,000 $ 2,848,000 $ 1,316,699 $( 1,531,301)
Miscellaneous 25,000 25,000 16,257 ( 8,743)
Total revenues 2,873,000 2,873,000 1,332,956 ( 1,540,044)
EXPENDITURES
Current:
Culture and recreation 1,960,239 1,924,239 2,295,812 ( 371,573)
Capital outlay 103,000 139,000 58,318 80,682
Total expenditures 2,063,239 2,063,239 2,354,130 ( 290,891)
EXCESS (DEFICIENCY) OF REVENUE
OVER(UNDER) EXPENDITURES 809,761 809,761 ( 1,021,174) ( 1,830,935)
OTHER FINANCING SOURCES (USES)
Transfers out ( 689,893) ( 689,893) ( 107,023) 582,870
Total other financing sources (uses) ( 689,893) ( 689,893) ( 107,023) 582,870
NET CHANGE IN FUND BALANCE 119,868 119,868 ( 1,128,197) ( 1,248,065)
FUND BALANCE, BEGINNING ( 2,290,551) ( 2,290,551) ( 2,290,551) -
FUND BALANCE, ENDING $( 2,170,683) $( 2,170,683) $( 3,418,748) $( 1,248,065)
77
CITY OF GRAPEVINE, TEXAS
COMBINING STATEMENT OF CHANGES IN
ASSETS AND LIABILITIES
AGENCYFUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Employee Activity Fund
Balance Balance
9/30/2018 Additions Deletions 9/30/2019
Cash and cash equivalents $ 13,500 $ 18,037 $ 12,930 $ 18,607
Total assets $ 13,500 $ 18,037 $ 12,930 $ 18,607
Due to beneficiary $ 13,500 $ 18,037 $ 12,930 $ 18,607
Total liabilities $ 13,500 $ 18,037 $ 12,930 $ 18,607
Industrial Development Corporation
Balance Balance
9/30/2018 Additions Deletions 9/30/2019
Cash and cash equivalents $ 134,523 $ 3,183 $ - $ 137,706
Total assets $ 134,523 $ 3,183 $ - $ 137,706
Due to beneficiary $ 134,523 $ 3,183 $ - $ 137,706
Total liabilities $ 134,523 $ 3,183 $ - $ 137,706
W.D. Tate Scholarship
Balance Balance
9/30/2018 Additions Deletions 9/30/2019
Cash and cash equivalents $ 14,129 $ 224 $ - $ 14,353
Total assets $ 14,129 $ 224 $ - $ 14,353
Due to beneficiary $ 14,129 $ 224 $ - $ 14,353
Total liabilities $ 14,129 $ 224 $ - $ 14,353
Total Agency Funds
Balance Balance
9/30/2018 Additions Deletions 9/30/2019
Cash and cash equivalents $ 162,152 $ 21,444 $ 12,930 $ 170,666
Total assets $ 162,152 $ 21,444 $ 12,930 $ 170,666
Due to beneficiary $ 162,152 $ 21,444 $ 12,930 $ 170,666
Total liabilities $ 162,152 $ 21,444 $ 12,930 $ 170,666
78
THIS PAGE LEFT BLANK INTENTIONALLY
STATISTICAL SECTION
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 79—88
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 89—94
These schedules contain information to help the reader assess the City's
most significant local revenue sources. Sales tax is the City's most
significant revenue source. Beginning in FY 2010, sales tax revenue
information became available to the City and is in Tables 5 and 6.
Information about principal sales tax revenue payers is confidential under
Texas statutes and is not provided. Additionally, information about the City's
second most significant local revenue source, the property tax, is provided.
Debt Capacity 95—98
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 99— 102
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 103— 106
These schedules contain service and infrastructure data to help the reader
understand how the information in the City's financial report relates to the
services the City provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year.
CITY OF GRAPEVINE, TEXAS
NET POSITION BY COMPONENT
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands)
(accrual basis of accounting)
Fiscal Year
2010 2011 2012 2013
Governmental activities:
Net investment in capital assets $ 73,702 $ 84,069 $ 88,342 $ 114,212
Restricted 55,622 61,712 71,909 78,377
Unrestricted 13,109 10,421 14,469 3,570
Total governmental activities net position $ 142,433 $ 156,202 $ 174,720 $ 189,019
Business-type activities:
Net investment in capital assets $ 70,055 $ 70,771 $ 70,171 $ 74,750
Restricted 6,732 7,133 8,969 8,032
Unrestricted 11,924 11,240 10,530 6,912
Total business-type activities net position $ 88,711 $ 89,144 $ 89,670 $ 89,694
Primary government:
Net investment in capital assets $ 143,757 $ 154,840 $ 158,513 $ 172,921
Restricted 62,354 68,845 80,878 86,409
Unrestricted 25,033 21,661 24,999 19,382
Total primary government net position $ 231,144 $ 245,346 $ 264,390 $ 278,712
Source: Comprehensive Annual Financial Reports
79
TABLE 1
Fiscal Year
2014 2015 2016 2017 2018 2019
$ 139,392 $ 176,133 $ 176,591 $ 214,481 $ 226,572 $ 241,514
74,312 71,932 78,219 73,872 80,078 95,251
( 10,147) ( 21,047) ( 14,043) ( 26,090) ( 68,706) ( 61,220)
$ 203,557 $ 227,018 $ 240,767 $ 262,263 $ 237,943 $ 275,544
$ 77,872 $ 104,296 $ 126,510 $ 122,775 $ 125,604 $ 131,141
2,612 2,649 3,205 3,467 4,187 3,714
11,590 8,094 8,507 10,548 11,817 6,303
$ 92,074 $ 115,039 $ 138,222 $ 136,790 $ 141,608 $ 141,158
$ 217,264 $ 280,429 $ 303,101 $ 337,256 $ 352,175 $ 372,654
76,924 74,581 81,424 77,339 84,265 98,965
1,443 ( 12,953) ( 5,536) ( 15,542) ( 56,889) ( 54,917)
$ 295,631 $ 342,057 $ 378,989 $ 399,053 $ 379,551 $ 416,702
80
CITY OF GRAPEVINE, TEXAS
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands)
(accrual basis of accounting)
Fiscal Year
2010 2011 2012 2013
EXPENSES
Governmental activities:
General government $ 19,048 $ 22,526 $ 18,370 $ 18,602
Public safety 27,095 27,588 28,264 28,309
Culture and recreation 27,175 26,673 27,954 29,578
Public works 19,136 10,563 11,056 12,216
Transportation - 7,901 7,789 8,620
Economic development - 3,394 4,040 3,609
Tourism - - - -
Interest on long-term debt 5,432 5,140 4,590 4,095
Total governmental activities expenses 97,886 103,785 102,063 105,029
Business-type activities:
Water and sewer 17,647 18,972 18,372 18,807
Lake Enterprise 2,955 3,062 3,053 3,156
Total business-type activities expenses 20,602 22,034 21,425 21,963
Total primary government expenses $ 118,488 $ 125,819 $ 123,488 $ 126,992
PROGRAM REVENUES
Governmental activities:
Fees, fines, and charges for services:
General government $ 4,039 $ 4,250 $ 2,547 $ 2,013
Public safety 3,660 3,346 3,736 3,971
Culture and recreation 8,530 9,198 10,099 10,012
Public works 1,467 1,378 1,418 1,486
Tourism - - - -
Operating grants and contributions 1,060 1,212 1,124 526
Capital grants and contributions 3,819 1,302 810 108
Total governmental activities
program revenues 22,575 20,686 19,734 18,116
Business-type activities:
Charges for services:
Water and sewer 18,523 21,168 20,481 20,185
Lake Enterprise 2,377 2,862 3,079 3,120
Capital grants and contributions 274 26,685 - -
Total business-type activities
program revenues 21,174 50,715 23,560 23,305
Total primary government
program revenues $ 43,749 $ 71,401 $ 43,294 $ 41,421
81
TABLE 2
Fiscal Year
2014 2015 2016 2017 2018 2019
$ 16,348 $ 18,944 $ 21,301 $ 20,417 $ 19,231 $ 18,382
30,039 31,305 31,686 35,651 35,954 38,472
31,549 15,617 18,354 21,087 19,597 21,341
13,689 12,817 13,590 16,585 16,826 17,930
11,275 9,223 9,600 9,078 9,467 10,047
1,405 10,036 15,976 9,757 14,954 5,122
- 16,966 18,526 20,507 21,561 23,886
6,029 6,013 5,480 5,332 5,174 5,312
110,334 120,921 134,513 138,414 142,764 140,493
19,763 19,691 20,498 20,926 22,411 23,901
2,764 2,850 3,256 3,242 3,217 4,159
22,527 22,541 23,754 24,168 25,628 28,060
$ 132,861 $ 143,462 $ 158,267 $ 162,582 $ 168,392 $ 168,553
$ 1,992 $ 1,723 $ 2,735 $ 2,155 $ 1,962 $ 2,050
4,109 3,705 3,789 2,198 1,663 2,200
10,531 4,322 4,526 6,003 6,340 4,394
1,504 1,448 1,495 3,367 3,449 3,674
- 7,327 7,721 7,840 7,882 7,635
275 1,381 383 1,079 2,200 993
203 1,609 9,549 8,171 5,007 23,230
18,614 21,515 30,198 30,813 28,503 44,176
23,667 22,434 23,824 24,663 28,267 24,278
3,017 2,214 2,816 3,174 3,131 3,323
- 4,896 17,981 1,803 4,984 6,309
26,684 29,544 44,621 29,640 36,382 33,910
$ 45,298 $ 51,059 $ 74,819 $ 60,453 $ 64,885 $ 78,086
82
CITY OF GRAPEVINE, TEXAS
CHANGES IN NET POSITION
(continued)
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands)
(accrual basis of accounting)
Fiscal Year
2010 2011 2012 2013
NET (EXPENSE) REVENUES
Governmental activities $( 75,311) $( 83,099) $( 82,329) $( 86,913)
Business-type activities 572 1,996 2,135 1,342
Total primary government net expense 74,739 81,103 80,194 85,571
GENERAL REVENUES AND OTHER
CHANGES IN NET POSITION
Governmental activities:
Taxes
Property 33,092 29,559 32,048 29,979
Franchise 6,133 6,401 6,356 6,618
Hotel occupancy 10,725 12,105 12,327 12,772
Sales 42,000 45,572 46,932 49,047
Mixed beverage 1,226 1,223 1,051 1,159
Investment earnings 426 338 286 159
Gain on sale of capital assets 119 33 - -
Miscellaneous - - 170 6
Transfers 2,064 1,638 1,677 1,471
Total governmental activities 95,785 96,869 100,847 101,211
Business-type activities:
Investment earnings 83 75 68 152
Gain on disposal of capital assets - - - -
Miscellaneous - 170 - -
Transfers ( 2,064) ( 1,638) 1,677 ( 1,471)
Total business-type activities ( 1,981) ( 1,393) ( 1,609) ( 1,319)
Total primary government 93,804 95,476 99,238 99,892
CHANGE IN NET POSITION
Governmental activities 20,474 13,770 18,518 14,298
Business-type activities ( 1,409) 432 526 23
Total primary government $ 19,065 $ 14,202 $ 19,044 $ 14,321
Source: Comprehensive Annual Financial Reports
83
TABLE 2
Fiscal Year
2014 2015 2016 2017 2018 2019
$( 91,720) $( 99,406) $( 104,316) $( 107,602) $( 114,261) $( 96,317)
4,158 7,003 20,868 5,472 10,754 5,850
( 87,562) ( 92,403) ( 83,448) ( 102,130) ( 103,507) ( 90,467)
30,917 30,903 31,617 26,027 28,561 30,849
6,785 6,824 6,818 6,602 7,145 6,898
14,025 18,103 18,965 18,801 19,875 20,767
52,020 54,060 55,884 53,854 56,029 59,298
1,567 1,648 1,710 1,733 1,793 2,146
120 266 887 1,523 2,737 3,784
262 1,490 4,144 1,605 262 2,076
23 11 204 579 331 420
1,661 1,424 ( 2,164) 3,199 3,020 6,951
107,380 114,729 118,065 113,923 119,753 133,189
20 43 148 306 580 650
3 - - -
( 1,661) ( 1,424) 2,164 ( 3,199) ( 3,020) ( 6,951)
( 1,641) ( 1,381) 2,315 ( 2,893) ( 2,440) ( 6,301)
105,739 113,348 120,380 111,030 117,313 126,888
15,658 15,323 13,748 6,323 5,492 36,871
2,517 5,629 23,182 2,578 8,314 ( 450)
$ 18,175 $ 20,952 $ 36,930 $ 8,901 $ 13,806 $ 36,421
84
CITY OF GRAPEVINE, TEXAS
FUND BALANCES
GOVERNMENTALFUNDS
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands)
(modified accrual basis of accounting)
Fiscal Year
2010 2011 2012 2013
General fund:
Reserved** $ 714 $ - $ - $ -
Unreserved 7,468 - - -
Nonspendable* - 657 653 659
Assigned - - - -
Unassigned - 8,938 11,742 11,303
Total general fund $ 8,182 $ 9,595 $ 12,395 $ 11,962
All other governmental funds:
Reserved for:
Prepayments $ 118 $ - $ - $ -
Debt service 40,700 - - -
Capital projects 16,861 - - -
Unreserved, reported in:
Special revenue 11,347 - - -
Capital projects 20,426 - - -
Nonspendable:
Inventories - 15 18 18
Prepaid items - 42 14 4
Notes receivable - - - -
Property held for sale - - - -
Restricted for:
Debt service - 26,713 28,858 29,051
Capital projects - 19,863 17,655 90,741
Court security and technology - - - -
Economic development - 28,985 35,493 41,198
Public safety - 836 1,078 1,088
Records preservation - - - -
Tourism - 4,605 5,954 5,268
Transportation - 345 369 412
Culture and recreation - 264 152 41
Committed for:
Stormwater drainage operations - 3,005 3,179 2,024
Public arts - 453 600 697
Assigned for:
Economic development - - - -
Capital projects - 9,322 10,627 8,043
Tourism - 841 635 677
Culture and recreation - - - -
Public safety - - - -
Unassigned - ( 1,822) 1,777 ( 841)
Total all other governmental funds $ 80,802 $ 89,452 $ 93,467 $ 102,855
Note:
* Includes inventory, advances to other funds, and prepaid items.
**The City implemented GASB Statement No. 54, Fund Balance Reporting and Governmental Fund
Type Definitions in fiscal year 2011.
Source: Comprehensive Annual Financial Reports
85
TABLE 3
Fiscal Year
2014 2015 2016 2017 2018 2019
600 553 779 943 1,303 1,209
- - - - 1,401 901
12,318 13,402 12,753 11,452 12,852 12,186
$ 12,918 $ 13,955 $ 13,532 $ 12,395 $ 15,556 $ 14,296
15 23 17 482 8 9
23 122 305 171 412 146
- 500 - -
- - - - 146 -
28,234 25,720 18,682 10,923 10,321 18,591
68,131 48,216 22,143 55,024 78,573 66,724
- - - 305 357 404
40,137 46,996 56,461 15,604 8,517 3,633
1,288 1,818 1,310 473 602 747
- - - 19 7 10
6,544 - - 10,777 13,123 13,688
459 461 465 - 9 17
48 38 49 160 219 193
990 613 923 1,196 1,516 1,778
841 954 1,084 1,046 1,116 992
1,717 1,384 3,269 9,806 4,696 9,164
13,382 16,034 25,033 19,313 19,188 24,107
732 910 1,270 1 542 220
- 12,801 19,140 12,914 3,597 6,448
2 3 4
( 1,123) 1,477 ( 3,769) 5,076 ( 3,106) ( 4,491)
$ 178,421 $ 161,418 $ 154,613 $ 146,382 $ 133,640 $ 142,384
86
CITY OF GRAPEVINE, TEXAS
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands)
(modified accrual basis of accounting)
Fiscal Year
2010 2011 2012 2013
REVENUES
Taxes:
Property $ 34,225 $ 29,930 $ 32,147 $ 28,326
Hotel occupancy 10,725 12,105 12,326 12,772
Sales 42,000 45,572 46,932 49,047
Mixed beverage 1,226 1,223 1,051 1,159
Franchise 6,133 6,401 6,356 6,618
Licenses and permits 1,117 1,044 1,542 1,248
Intergovernmental 4,525 1,505 1,012 1,175
Charges for services 13,296 14,582 13,572 13,286
Fines and forfeitures 2,126 1,712 2,017 2,258
Contributions 8 73 194 162
Interest and miscellaneous 2,407 1,741 1,192 731
Total revenues 117,788 115,888 118,341 116,782
EXPENDITURES
General government 16,367 17,681 13,979 13,714
Public safety 22,275 24,297 25,539 25,674
Culture and recreation 22,677 23,495 24,832 26,202
Public works 5,049 5,821 6,061 7,037
Operations 13,819 - - -
Transportation - 7,901 7,789 8,620
Economic development - 3,405 4,543 3,609
Tourism - - - -
Capital outlay 15,051 13,076 9,446 17,011
Debt service:
Principal 12,096 12,328 11,164 11,462
Interest and fiscal charges 5,547 5,029 4,564 3,864
Payment to refunded bond escrow agent - - - -
Bond issuance costs - - - -
Other 1,050 30 25 394
Total expenditures 113,931 113,063 107,942 117,587
EXCESS(DEFICIENCY)OF REVENUES
OVER(UNDER) EXPENDITURES $ 3,857 $ 2,825 $ 10,399 $( 805)
OTHER FINANCING SOURCES(USES)
Issuance of debt 8,565 809 - 78,640
Premium on issuance of debt 344 - - 3,455
Payment to refunded bond escrow agent ( 6,954) - - ( 7,834)
Sale of capital assets 219 155 112 204
Insurance recoveries - - - -
Transfers in 14,510 17,593 15,244 19,768
Transfers out ( 12,446) ( 15,955) ( 13,568) ( 18,297)
Total other financing sources (uses) 4,238 2,602 1,788 75,936
NET CHANGE IN FUND BALANCES $ 8,095 $ 5,427 $ 12,187 $ 75,131
DEBT SERVICE AS A PERCENTAGE OF
NONCAPITAL EXPENDITURES 17.8% 16.8% 15.7% 14.7%
Source: Comprehensive Annual Financial Reports
87
TABLE 4
Fiscal Year
2014 2015 2016 2017 2018 2019
$ 33,470 $ 30,931 $ 31,650 $ 25,991 $ 28,350 $ 30,883
14,025 18,103 18,965 18,801 19,875 20,767
52,020 54,060 55,884 53,854 56,029 59,298
1,567 1,648 1,710 1,733 1,793 2,146
6,785 6,824 6,662 6,602 7,064 6,618
1,337 1,527 1,745 1,883 1,604 1,969
430 974 1,356 1,939 2,270 1,736
13,755 14,681 15,568 17,308 17,973 16,152
2,413 2,100 1,967 1,968 1,736 1,662
169 304 253 370 318 233
872 872 2,861 2,630 4,429 4,726
126,843 132,024 138,621 133,079 141,441 146,190
15,611 17,878 19,768 18,543 17,018 16,010
27,215 28,672 27,803 30,441 32,240 34,490
27,707 12,931 14,731 16,686 18,451 17,173
8,335 8,077 7,938 10,526 11,367 11,600
11,275 9,223 9,600 9,078 9,467 10,047
1,405 10,036 15,976 9,757 16,639 5,109
- 16,179 17,702 19,735 20,335 22,414
53,121 24,476 33,576 32,596 30,029 45,994
12,664 14,477 16,099 13,018 12,059 12,564
6,695 6,405 6,234 5,850 5,974 6,001
- 22,812 1 - 17,025 6,077
- 358 73 127 392 171
269 21 10 120 47 141
164,297 171,545 169,511 166,477 191,043 187,791
$( 37,454) $( 39,521) $( 30,890) $( 33,398) $( 49,602) $( 41,601)
19,500 35,065 3,070 10,900 51,740 5,395
- 3,757 192 590 1,265 1,973
( 13,643) - ( 1,391) - -
250 6,110 13,856 5,406 311 4,439
- 800 540 649 66 63
18,507 17,248 21,735 56,144 46,963 24,310
( 16,846) ( 15,585) ( 17,764) ( 52,781) ( 43,943) ( 17,357)
21,411 33,752 21,629 19,517 56,402 18,823
$( 16,043) $( 5,769) $( 9,261) $( 13,881) $ 6,800 $( 22,778)
17.5% 30.2% 16.5% 14.1% 11.5% 13.0%
88
CITY OF GRAPEVINE TABLE 5
TAXABLE SALES BY CATEGORY
LAST TEN FISCAL YEARS
(Amounts Expressed in Thousands)
Fiscal Year
Function/Program 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019(1)
Agriculture/forestry/fishing/hunting $ - $ - $ - $ - $ 414 $ 514 $ 91 $ 253 $ - $ -
Construction 19,347 23,201 32,162 38,720 46,112 49,895 53,763 44,852 65,213 58,977
Manufacturing 158,571 149,783 157,519 157,403 164,251 164,726 161,142 160,782 166,863 147,903
Wholesale trade 216,540 236,878 245,838 266,052 276,437 285,962 299,679 300,261 322,482 246,705
Retail trade 774,638 816,452 849,825 897,364 930,931 921,231 931,679 939,436 945,789 712,900
Transportation/warehousing 10,239 13,817 11,810 13,751 12,539 13,467 12,455 12,587 9,951 7,813
Information 29,311 36,209 42,137 49,559 58,753 68,853 68,143 42,752 40,091 27,410
Finance/insurance 964 1,049 993 804 808 808 885 1,190 1,691 667
Professional/scientific/technical 15,745 15,485 18,966 20,321 28,112 26,370 31,957 31,074 35,317 23,860
Real estate/rental/leasing 34,389 37,831 36,597 46,875 52,312 61,550 63,637 66,687 67,963 48,151
Management of companies/enterprises 15 1 - - - - - - 2,719 2,335
Admin/support/waste mgmt/remediation svcs 37,065 54,218 47,264 47,117 60,296 76,038 55,143 54,579 49,130 32,480
Educational services 344 531 2,762 1,931 1,079 645 634 383 364 319
Health care/socal assistance 1,930 2,465 2,999 2,961 2,028 1,735 1,784 1,574 1,494 1,208
Arts/entertainment/recreation 25,623 25,657 24,811 24,592 27,313 16,310 22,103 26,622 28,611 21,791
Accomodation/food service 413,133 453,507 477,342 472,830 522,296 572,882 586,562 593,030 625,298 502,189
Other services(except public administration) 24,736 24,868 24,250 33,721 38,588 47,645 49,898 38,372 37,280 28,647
Unclassified - 17,457 8
Total $ 1,762,590 $ 1,909,409 $ 1,975,275 $ 2,074,001 $ 2,222,269 $ 2,308,639 $ 2,339,555 $ 2,314,434 $ 2,400,256 $ 1,863,355
City direct sales tax rate 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Source: Texas Comptroller
(1)Only three quarters of information were available for the fiscal year.
89
CITY OF GRAPEVINE, TEXAS TABLE 6
DIRECT AND OVERLAPPING SALES TAX RATES
LAST TEN FISCAL YEARS
City State
Fiscal Year Direct Rate of Texas
2010 2.00% 6.25%
2011 2.00% 6.25%
2012 2.00% 6.25%
2013 2.00% 6.25%
2014 2.00% 6.25%
2015 2.00% 6.25%
2016 2.00% 6.25%
2017 2.00% 6.25%
2018 2.00% 6.25%
2019 2.00% 6.25%
Source: City Budget Office and Texas Comptroller
90
CITY OF GRAPEVINE, TEXAS TABLE 7
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
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 6,231,772 0.3457
2014 7,744,617 2,141,161 3,421,500 6,464,278 0.3425
2015 7,972,445 2,437,129 3,816,444 6,593,130 0.3324
2016 8,127,156 2,620,115 3,874,106 6,873,165 0.3284
2017 9,369,452 2,705,089 4,462,148 7,612,393 0.2893
2018 9,911,677 3,033,390 4,586,943 8,358,123 0.2893
2019 10,450,709 3,316,173 4,760,485 9,006,397 0.2893
Source: Grapevine/Colleyville ISD Tax Assessor
91
CITY OF GRAPEVINE, TEXAS TABLE 8
PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
(Unaudited)
City Direct Rates Overlapping Rates
Total
Operating/ Total Direct and
Fiscal General Debt Direct Junior School Hospital Overlapping
Year Rate Service Rate College District District County Rates
2010 0.1346 0.2154 0.3500 0.1380 1.2900 0.2280 0.2640 2.2700
2011 0.1346 0.2154 0.3500 0.1380 1.2900 0.2280 0.2640 2.2700
2012 0.1423 0.2057 0.3480 0.1490 1.3100 0.2280 0.2640 2.2990
2013 0.1357 0.2100 0.3457 0.1490 1.3201 0.2279 0.2640 2.3067
2014 0.1314 0.2111 0.3425 0.1490 1.3201 0.2279 0.2640 2.3035
2015 0.1274 0.2050 0.3324 0.1495 1.3201 0.2279 0.2640 2.2939
2016 0.1421 0.1863 0.3284 0.1495 1.3201 0.2279 0.2640 2.2899
2017 0.1265 0.1628 0.2893 0.1447 1.3967 0.2279 0.2540 2.3126
2018 0.1347 0.1545 0.2893 0.1401 1.3967 0.2244 0.2440 2.2945
2019 0.1306 0.1587 0.2893 0.1361 1.3967 0.2244 0.2340 2.2805
Source: Tarrant County Appraisal District
Note: Tax rate limitations imposed by the Home Rules Section of the Texas Constitution,Article II, Section 5, provide that a maximum tax rate of$2.50 per
$100 valuation may be imposed in any one year. No provisions are made limiting the amount of this$2.50 tax rate that can be used for debt service.
92
CITY OF GRAPEVINE, TEXAS TABLE 9
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
(Unaudited) (Amounts Expressed in Thousands)
FY 2019 FY 2010
Percentage Percentage
of Total City of Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Value Taxpayer Value Value
American Airlines Inc/Envoy Air Inc $ 552,617 6.14% American Airlines Inc $ 292,447 4.72%
Gaylord Texan Resort
Opryland Hotel 350,206 3.89% and Convention Center 247,782 4.00%
Grapevine Mills,Ltd.Partnership 325,584 3.62% Grapevine Mills,Ltd.Partnership 205,000 3.31%
Mesa Airlines 145,445 1.61% CAE Simuflite/Simuflite Training Unit 130,794 2.11%
Great Wolf Lodge 112,194 1.25% Great Wolf Lodge 128,745 2.08%
Fund Riverwalk LLC 101,400 1.13% Backspace US,Inc. 87,500 1.41%
CAE Simuflite 76,263 0.85% A&B Properties,Inc.,etal 53,615 0.87%
Silver Oaks LP 75,200 0.83% Chesapeake Operating 51,340 0.83%
Oncor Electric Delivery Co.,Llc. 68,100 0.76% Oncor Electric Delivery Co.,Llc. 51,102 0.82%
925 Main LP 64,000 0.71% Verde Riverwalk Apts II,LP 46,540 0.75%
Total $ 1,871,009 20.79% Total $ 1,294,865 20.90%
Source: Grapevine/Colleyville ISD Tax Assessor
Grapevine CAFR(2010)
93
CITY OF GRAPEVINE,TEXAS TABLE 10
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands)
Collections Within the Fiscal
Taxes Levied for the Fiscal Year Year of the Levy Total Collections to Date
Percentage Collections in
Fiscal Year Adjusted of Levy Subsequent Percentage
Ended Original Levy Adjustments Levy Amount Collected Years Amount of Levy
2010 $ 21,690 $ 517 $ 22,207 $ 21,958 98.88% $ 215 $22,173 99.85%
2011 20,953 161 21,114 20,954 99.24% 135 21,089 99.88%
2012 21,325 (4) 21,321 21,211 99.48% 93 21,304 99.92%
2013 21,543 (75) 21,468 21,364 99.52% 88 21,452 99.93%
2014 21,739 108 21,847 21,804 99.80% 32 21,836 99.95%
2015 22,249 (228) 22,021 21,952 99.69% 56 22,007 99.94%
2016 21,506 1,069 22,575 22,498 99.66% 55 22,553 99.90%
2017 21,669 352 22,021 21,905 99.47% 87 21,992 99.87%
2018 23,387 790 24,177 24,023 99.36% 113 24,136 99.83%
2019 25,711 342 26,053 25,946 99.59% - 25,946 99.59%
Source: Grapevine/Colleyville ISD Tax Assessor
94
CITY OF GRAPEVINE, TEXAS TABLE 11
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands, excluding
Percentage of Personal Income and Per Capita)
Governmental Activities Business-type Activities
General Certificates Water General Total Primary Percentage
Fiscal Obligation of Contractual Revenue Tax and Sewer Obligation Certificates Government of Personal
Year Bonds Obligation Obligations Bonds Notes Obligations Bonds of Obligation Debt Income Per Capita*
2010 51,290 59,870 - - 5,835 1,585 15,305 - 133,885 6.88% 2,678
2011 45,335 55,473 - - 4,852 1,035 14,042 - 120,737 7.14% 2,569
2012 40,355 49,569 1,225 - 3,605 790 9,923 - 105,467 6.16% 2,197
2013 102,690 44,459 1,200 - 6,297 - 10,962 - 165,608 8.89% 3,380
2014 100,952 41,325 1,130 19,500 4,514 - 9,556 - 176,977 9.26% 3,612
2015 93,376 13,618 4,317 39,030 3,107 - 7,579 10,097 171,124 8.32% 3,492
2016 88,200 14,065 4,224 36,855 2,529 - 2,551 8,902 157,326 7.16% 3,147
2017 80,718 21,286 3,692 34,630 1,934 - 2,388 8,902 153,550 6.83% 3,011
2018 73,200 51,470 5,645 34,153 1,209 - 1,892 8,901 176,470 7.85% 3,394
2019 96,587 43,645 4,878 31,480 612 - 1,025 8,476 186,703 8.11% 3,523
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
* See Table 17 for personal income and population data.
95
CITY OF GRAPEVINE, TEXAS TABLE 12
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands, excluding
Percentage of Actual Taxable Value of Property and Per Capita)
Governmental Activities Business-type Activities
Resources Percentage of
General Certificates General Certificates Restricted Net Actual
Fiscal Obligation of Contractual Tax Obligation of For Debt Bonded Taxable Value Per
Year Bonds Obligation Obligations Notes Total Bonds Obligation Service Debt of Property a Capita b
2010 51,290 59,870 - - 111,160 15,305 - 40,700 85,765 1.38% 1,715
2011 45,335 55,473 - - 100,808 15,135 - 26,713 89,230 1.52% 1,899
2012 40,355 49,569 1,225 - 91,149 9,895 - 28,858 72,186 1.22% 1,504
2013 102,690 44,459 1,200 4,015 152,364 10,845 - 29,051 134,158 2.15% 2,738
2014 100,952 41,325 1,130 3,488 146,895 9,556 - 20,985 135,466 2.10% 2,765
2015 93,376 13,618 4,317 2,935 114,246 7,579 10,097 19,603 112,319 1.70% 2,292
2016 88,200 14,065 4,224 2,373 108,862 2,551 8,902 17,938 102,377 1.49% 2,048
2017 80,718 21,286 3,692 1,796 107,492 2,388 8,902 16,087 102,695 1.35% 2,014
2018 73,200 51,470 5,645 1,209 131,524 1,892 8,901 9,829 132,488 1.59% 2,548
2019 96,587 43,645 4,878 612 145,722 1,025 8,476 18,050 137,173 1.52% 2,588
Note: Details regarding the City's outstanding debt can be found in notes to the financial statements.
a See Table 7 for property value data.
b See Table 18 for population data.
96
CITY OF GRAPEVINE, TEXAS TABLE 13
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF SEPTEMBER 30, 2019
(Unaudited)
Estimated
Share of
Estimated Direct and
Debt Percentage Overlapping
Government Unit Outstanding Applicable Debt
Debt Repaid with Property Taxes:
Carroll Independent School District $ 306,677,164 5.50% $ 16,867,244
Coppell Independent School District 382,497,416 2.12% 8,108,945
Dallas County 151,495,000 0.10% 151,495
Dallas County Community College District 182,800,000 0.10% 182,800
Dallas County Hospital District 671,290,000 0.10% 671,290
Dallas County Schools 36,801,240 0.10% 36,801
Denton County 590,380,000 less than .01% -
Grapevine-Colleyville Independent School District 435,416,058 62.44% 271,873,787
Northwest Independent School District 934,245,475 0.06% 560,547
Tarrant County 266,375,000 5.32% 14,171,150
Tarrant County Hospital District 17,735,000 5.32% 943,502
Subtotal overlapping debt 313,567,561
Total direct-City of Grapevine $ 177,201,706 100% 177,201,706
Direct and Overlapping Debt $ 490,769,267
Total Direct and Overlapping Debt% of A.V.: 5.45%
Total Direct and Overlapping Debt per Capita: $ 9,260
The percentage of overlapping debt applicable is estimated using taxable assessed property values.
Source: Municipal Advisory Council of Texas
97
CITY OF GRAPEVINE, TEXAS TABLE 14
LEGAL DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
(Unaudited)
Tax rate limitations imposed by the Home Rules Section of the Texas Constitution, Article II, Section 5, provide that a
maximum tax rate of$2.50 per$100 valuation may be imposed in any one year.
98
CITY OF GRAPEVINE, TEXAS TABLE 15
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands, except for Coverage)
413 Economic Development Fund
Less: Net Principal
Fiscal Total Operating Available and Interest
Year Revenues a Expenses b Revenue Payments Coverage
2014 3,772 492 3,280 443 7.40
2015 3,983 1,430 2,553 1,594 1.60
2016 4,170 3,224 946 1,595 0.59
2017 4,062 2,167 1,895 1,593 1.19
2018 4,256 1,918 2,338 1,593 1.47
2019 4,394 1,642 2,752 1,396 1.97
Notes: a Includes tax revenues only
b Includes transfers out
Debt was issued in FY 2014, so prior data is not available.
Source: Comprehensive Annual Financial Report
99
CITY OF GRAPEVINE, TEXAS TABLE 16
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Thousands, except for Coverage)
Tax Increment Financing District Reinvestment Zone Number Two
Less: Net Principal
Fiscal Total Operating Available and Interest
Year Revenues a Expenses b Revenue Payments Coverage
2010 5,749 726 5,023 2,677 1.88
2011 4,291 731 3,560 2,664 1.34
2012 5,736 1,548 4,188 2,672 1.57
2013 3,637 2,283 1,354 2,679 0.51
2014 5,878 2,446 3,432 2,681 1.28
2015 4,246 2,678 1,568 2,683 0.58
2016 4,416 2,714 1,702 2,273 0.75
2017 4,697 1,410 3,287 2,282 1.44
2018 4,818 1,410 3,408 2,281 1.49
2019 5,806 1,430 4,376 2,287 1.91
Notes: a Includes tax revenues only
b Includes transfers out.
Source: Grapevine Tax Increment Financing District Reinvestment Zone Number Two Basic Financial Statements
100
CITY OF GRAPEVINE,TEXAS TABLE 17
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS
(Unaudited) (Amounts Expressed in Thousands except for Median Age and Unemployment Rate)
(1)
(1) (1) Personal (1) (2) (3)
Calendar Estimated Personal Income Median School Unemployment
Year Population Income Per Capita Age Enrollment Rate
2010 50 1,900 38 36 14 6.0%
2011 47 1,692 36 35 14 6.3%
2012 48 1,711 36 35 14 5.6%
2013 49 1,862 38 38 14 5.1%
2014 49 1,911 39 38 14 4.7%
2015 49 2,058 42 39 14 3.3%
2016 50 2,197 42 39 14 3.6%
2017 51 2,252 44 39 14 3.4%
2018 52 2,249 44 39 14 3.3%
2019 53 2,303 45 39 14 3.0%
Sources:
(1)Estimate from City Economic Development Dept staff; (population as of 12.31.15) Neilsen/Clarita's Report, ERSI
(2)Grapevine/Col leyvi Ile ISD
(3)ESRI,2018
101
CITY OF GRAPEVINE, TEXAS TABLE 18
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
(Unaudited) (Amounts Expressed in Thousands except for
Percentage of Total City Employment)
2019 2010
Percentage of Percentage of
of Total City of Total City
Employer Employees Employment (1) Employer Employees Employment
DFW International Airport 14.3 27.03% DFW International Airport 16.0 31.37%
Game Stop Corporation 2.9 5.39% Gaylord Texan Resort and 2.0 3.92%
Convention Center
Gaylord Texan Resort and o 0
Convention Center 2.0 3.78/o Grapevine/Colleyville ISD 1.6 3.14/o
Grapevine/Colleyville ISD 1.9 3.52% United Parcel Service 1.0 1.96%
City of Grapevine 0.7 1.32% Baylor Medical Center 1.0 1.96%
Baylor Scott-White Medical 0.7 1.25% Game Stop 0.5 0.98%
Center
Cotton Patch Cafe Inc 0.7 1.23% City of Grapevine 0.5 0.98%
Great Wolf Lodge Grapevine 0.6 1.13% DFW Hilton Hotel 0.5 0.98%
Kubota Tractor Corp 0.5 0.85% Pavestone Manufacturing 0.5 0.98%
Pavestone Co 0.4 0.79% Wal-Mart/Sams (250-500) 0.3 0.49%
24.7 46.29% 23.9 46.76%
Sources: City of Grapevine Economic Development Department, Infogroup, Inc.
102
CITY OF GRAPEVINE, TEXAS TABLE 19
FULLTIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Whole Numbers)
Fiscal Year
Function/Program 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
General government
and administration 59 59 57 58 61 63 63 63 62 61
Public safety 236 237 237 240 241 245 246 258 261 261
Development services 15 15 15 15 16 19 19 19 19 19
Culture and recreational 175 169 169 172 175 206 207 209 220 225
Water and sewer 60 59 59 59 60 59 59 59 59 59
Golf course 28 26 26 26 26 26 25 25 25 25
Public works 67 65 65 66 66 66 66 67 68 68
Total 640 630 628 636 645 684 685 700 714 718
Source: Human Resources Department-City of Grapevine
103
THIS PAGE LEFT BLANK INTENTIONALLY
CITY OF GRAPEVINE, TEXAS TABLE 20
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Whole Numbers)
Fiscal Year
Function/Program 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
General Government:
City Secretary:
Ordinances prepared 78 67 68 61 74 72 90 84 88 87
Resolutions prepared 41 70 97 114 89 92 106 106 100 35
Fiscal Services:
Invoices processed 23,760 21,605 18,567 18,719 17,410 17,556 19,098 18,944 17,075 16,690
Ratio of ACH/checks - 0.02 1.06 27.48 47.50 49.60 53.60 58.80 57.10 55.73
Public safety:
Police:
Calls for service 65,361 66,686 67,634 58,680 44,266 53,372 52,613 47,751 43,402 41,059
Traffic citations 25,533 18,995 23,817 21,447 24,441 19,138 14,566 13,269 11,705 13,574
Criminal offenses 3,552 3,346 1,366 3,219 2,948 2,743 2,812 2,740 2,570 2,664
Fire:
Fire runs 4,595 5,079 5,135 5,156 5,101 5,588 5,905 6,161 6,026 6,192
Ambulance runs 3,015 3,343 3,026 3,541 3,614 3,715 4,893 4,432 4,047 4,291
Municipal Court:
Cases filed 28,929 21,828 25,860 23,855 24,298 19,012 16,398 15,578 14,088 13,574
Cultural and recreational:
Parks& Recreation:
Recreation center membership-family 5,161 4,937 4,658 4,677 2,731 9,856 11,512 12,126 12,273 9,969
Recreation center membership-individual 2,969 2,923 2,861 2,852 2,502 5,227 4,660 5,687 4,748 4,046
Athletic league registrants-youth 5,984 4,750 7,014 6,126 6,250 5,324 6,860 1,450 1,500 3,472
Athletic league registrants-adult 10,944 9,500 10,536 9,588 9,248 7,720 7,370 5,746 5,092 1,863
Public swim attendance 33,039 31,744 38,274 48,680 46,120 75,245 101,774 106,359 98,192 92,436
% Campground occupancy rate 68.00 57.00 61.00 63.00 61.00 53.00 13.83 70.99 71.65 41.81
Total acres maintained 1,662 1,662 1,662 1,662 1,662 1,677 1,677 1,677 1,740 1,556
Library:
Volumes 197,509 205,194 186,817 197,377 204,206 252,227 259,203 234,546 230,284 274,810
Annual circulation 341,726 330,975 316,236 303,622 293,434 301,522 307,662 345,429 342,303 355,594
Public works:
Development services:
Permits issued 3,812 4,121 3,982 3,877 4,500 4,139 4,340 4,369 4,501 4,410
104
CITY OF GRAPEVINE, TEXAS TABLE 20
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Whole Numbers)
Fiscal Year
Function/Program 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Public works:
Streets:
Square yard of overlay completed 101,100 99,000 92,604 53,167 75,555 82,202 98,693 79,238 66,432 61,957
Linear feet of gutter wedge milled 16,278 17,500 15,123 72,713 45,792 43,359 50,034 48,404 37,540 27,972
Linear feet of curb and gutter replaced 1,847 1,600 4,015 3,969 944 300 3,926 1,605 3,812 4,187
Number of blocks crack sealed 193 210 205 257 174 133 179 149 174 117
Square feet of concrete rehab 43,340 4,000 39,002 47,813 96,068 15,706 28,735 49,069 27,112 47,708
Tourism:
Convention and visitor bureau:
Nash farm attendance - - 7,158 8,468 13,500 14,588 11,566 14,868 11,759 15,085
Main street days attendance 110,148 160,990 150,292 139,770 148,260 154,032 178,672 169,560 168,480 141,570
Grapefest attendance 266,129 243,180 262,322 262,910 266,170 263,832 260,151 268,180 260,001 261,000
Water and sewer
Number of water connections 14,343 14,384 14,460 14,517 14,476 14,564 14,665 14,732 14,788 14,869
Average daily consumption MG (water) 10.23 11.98 10.74 10.40 9.35 9.40 9.30 9.21 9.45 7.75
System capacity-MG (Water) 27 27 27 27 27 27 27 27 27 27
Number of sewer connections 13,130 13,081 13,103 13,315 13,387 13,452 13,570 13,632 13,696 13,766
Number of refuse customers 11,865 11,895 11,911 11,964 12,110 12,175 12,272 12,318 12,394 12,416
Sewer system capacity(MGD) 8 8 8 8 8 8 8 8 8 8
Lake Enterprise:
Numbers of golfers, annually 56,053 65,052 67,555 71,706 68,368 48,689 55,913 64,424 64,382 62,510
Source: City departments
105
CITY OF GRAPEVINE, TEXAS TABLE 21
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
(Unaudited) (Amounts Expressed in Whole Numbers)
Fiscal Year
Function/Program 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Police:
Stations 2 2 2 2 2 2 2 2 2 2
Patrol units 30 32 32 35 35 35 35 35 35 37
Motorcycle Units 10 10 8 8 8 8 8 8 8 8
Fire:
Stations 5 5 5 5 5 5 5 5 5 5
Fire engines/trucks 8 9 9 10 10 10 10 10 10 10
EMS trucks 4 4 4 5 5 5 5 5 5 5
Public works:
Streets-paved (miles) 208 208 208 208 208 208 208 208 211 211
Traffic signals 74 75 75 75 75 75 75 75 76 76
Parks and recreation:
Acreage* 1,662 1,662 1,662 1,662 1522 1,677 1,677 1,677 1,556 1,556
Playgrounds 35 35 35 36 37 37 37 37 32 36
Swimming pools 2 2 2 2 2 3 3 3 3 3
Splash parks - - 2 2 2 2 2 2 3 3
Tennis courts 8 8 8 8 8 8 8 8 8 8
Recreation centers 1 1 1 1 1 1 1 1 1 1
Senior centers 1 1 1 1 1 1 1 1 1 1
Libraries 1 1 1 1 1 1 1 1 1 1
Golf Courses 1 1 1 1 1 1 1 1 1 1
Water:
Water mains(miles) 280 280 280 290 292 293 295 295 300 305
Wastewater:
Sanitary sewers (miles) 220 221 221 224 225 226 228 228 226 227
Source: City departments
*Golf course included and land leased from Corp. of Engineers
106
THIS PAGE LEFT BLANK INTENTIONALLY
INTERNAL CONTROL AND
COMPLIANCE SECTION
THIS PAGE LEFT BLANK INTENTIONALLY
PATTILLO, BROWN & HILL, L.L.P.
401 West State Highway 6
Waco,Texas 76710
254.772.4901 pbhcpa.com
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards issued
by the Comptroller General of the United States, the financial statements of the governmental activities, the
business-type activities, the discretely presented component unit, each major fund, and the aggregate
remaining fund information of the City of Grapevine, Texas (the 'City"), as of and for the year ended
September 30, 2019, and the related notes to the financial statements, which collectively comprise the City's
basic financial statements, and have issued our report thereon dated March 12, 2020.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose
of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an
opinion on the effectiveness of the City's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees in the normal course of performing their assigned functions, to prevent, or detect
and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of
deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the
entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over financial reporting was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal control over
financial reporting that might be material weaknesses or significant deficiencies and therefore, material
weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our
audit we did not identify any deficiencies in internal control over financial reporting that we consider to be
material weaknesses. However, material weaknesses may exist that have not been identified. We did identify
certain deficiencies in internal control, described in the accompanying Schedule of Findings and Responses
that we consider to be significant deficiencies as item 2019-001.
107
OFFICE LOCATIONS ��.`
TEXAS I Waco Temple I Hillsboro I Houston ` AICPA
NEW MEXICO Albuquerque GAQC Member
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results
of our tests disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
The City's Response to Findings
The City's response to the findings identified in our audit are described in the accompanying Schedule
of Findings and Responses. The City's response was not subjected to the auditing procedures applied in the
audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's
internal control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this
communication is not suitable for any other purpose.
Waco, Texas
March 12, 2020
108
CITY OF GRAPEVINE, TEXAS
SCHEDULE OF FINDINGS AND RESPONSES
SEPTEMBER 30, 2019
Item 2019-001 (Recurring)
Criteria: To perform their job responsibilities, system administrators must be given
control over computer systems. An organization should have proper
controls in place to ensure that only appropriate employees have
administrator rights and privileges. Administrator user accounts should be
reviewed annually, user accounts should be protected with strong
passwords and their actions on computer systems should be monitored
for questionable activities.
Condition: The City currently uses almost 200 separate on-site and cloud-based
systems. Generally, the administrators for these systems also work in the
respective departments where the software is used. The administrator
user accounts are the owner's primary accounts that are used within the
system.
Because this administrative responsibility is being maintained at the
department level, requirements like mandatory password changes,
locking individual system access to terminated employees and monitoring
general system access on an ongoing basis is not always being done.
Effect: Segregation of duties is ineffective. Without sufficient segregation of
duties, the risk significantly increases that errors, including
misappropriation of assets, could occur and not be detected on a timely
basis.
Recommendation. Management should consider a formal evaluation of the risks associated
with this lack of duties segregation. Consideration should be given to
identifying and implementing controls that could help mitigate the risks
associated with a lack of segregation of duties, such as granting
administrative-level application access only to users who do not
participate in the related control activities.
Management's Response: The City acknowledged that there were control deficiencies in this area
prior to our annual audit and we have already started reviewing systems
access controls within the City. In addition to these procedures, we will
also perform an evaluation to determine the resources that will be
necessary to ensure that proper segregation of duties is maintained and
appropriate control procedures are in place regarding systems
administration.
109
THIS PAGE LEFT BLANK INTENTIONALLY
GRAPEVINE TAX INCREMENT
FINANCING DISTRICT REINVESTMENT
ZONE NUMBER ONE
(A Blended Component Unit of
The City of Grapevine, Texas)
BASIC FINANCIAL STATEMENTS
As of and for the Year Ended
SEPTEMBER 30, 2019
(With Independent Auditor's Report)
THIS PAGE LEFT BLANK INTENTIONALLY
GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE
(A Blended Component Unit of the City of Grapevine, Texas)
BASIC FINANCIAL STATEMENTS
TABLE OF CONTENTS
SEPTEMBER 30, 2019
Page
Number
Independent Auditor's Report................................................................................................... 1 —2
Management's Discussion and Analysis.................................................................................. 3-5
Basic Financial Statements:
Government-wide Financial Statements:
Statementof Net Position .................................................................................................. 6
Statementof Activities........................................................................................................ 7
Fund Financial Statements:
Balance Sheet—Governmental Funds .............................................................................. 8
Statement of Revenues, Expenditures and Changes in
Fund Balances— Governmental Funds........................................................................... 9
Notes to Financial Statements............................................................................................... 10— 13
Independent Auditor's Report on Internal Control over
Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards............................................................... 14— 15
THIS PAGE LEFT BLANK INTENTIONALLY
PATTILLO, BROWN & HILL, L.L.P.
401 West State Highway
Waco,Texas 7671 0
254.772.4901 pbhcpa.com
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
We have audited the accompanying financial statements of the governmental activities and the major
fund of the Grapevine Tax Increment Financing District Reinvestment Zone Number One ("TIF #1"), a
component unit of the City of Grapevine, Texas, as of and for the year ended September 30, 2019, and the
related notes to the financial statements, which collectively comprise TIF #1's basic financial statements as
listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers internal control relevant to the entity's preparation and
fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
1
OFFICE LOCATIONS ilk)
TEXAS I Waco Temple I Hillsboro I Houston 74to AICPA
NEW MEXICO Albuquerque GAQC Member
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and the major fund of TIF #1, as of September 30,
2019, and the respective changes in financial position for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the Governmental Accounting
Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards generally
accepted in the United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management's responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 12,
2020 on our consideration of TIF #1's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.
The purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering TIF #1's internal control over financial reporting and
compliance.
Waco, Texas
March 12, 2020
2
MANAGEMENT'S
DISCUSSION AND ANALYSIS
THIS PAGE LEFT BLANK INTENTIONALLY
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Grapevine, Texas (the "City"), we offer readers of the Grapevine Tax Increment
Financing District Reinvestment Zone Number One's (TIF #1) financial statements this narrative overview and
analysis of the financial activities of TIF #1 for the fiscal year ended September 30, 2019. TIF #1 was formed to
finance and make public improvements in the area surrounding the Grapevine Mills Mall under the Tax Increment
Financing Act.
FINANCIAL HIGHLIGHTS
• The assets of TIF #1 exceeded its liabilities at the close of the fiscal year ended September
30, 2019, by$9,400,672 (net position).
• At the end of the current fiscal year, the governmental fund reported an ending fund balance
of$9,400,672, a decrease of 12% in comparison with the prior year. The primary reason for
this decrease was a disbursement of accumulated funds to Grapevine-Colleyville
Independent School District for construction of capital projects.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis serves as an introduction to TIF #1's basic financial statements. TIF #1's basic
financial statements are comprised of three components: government-wide financial statements, fund financial
statements, and notes to the financial statements.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of TIF #1's
finances in a manner similar to private-sector business.
The Statement of Net Position presents information on all of TIF #1's assets and liabilities, with the difference
reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of
whether the financial position of TIF#1 is improving or deteriorating.
The Statement of Activities presents information showing how TIF#1's net position changed during the fiscal year. All
changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of
the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will
only result in cash flows in future fiscal periods (e.g., uncollected taxes).
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated
for specific activities or objectives. TIF#1 uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements. The fund financial statements include one fund, the Capital Projects Fund, which is used
to account for those projects related to improvements at Grapevine Mills Mall.
• Governmental funds — Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial
statements focus on current sources and uses of spendable resources, as well as on balances
of spendable resources available at the end of the fiscal year. Such information may be useful
in evaluating a government's near-term financing requirements.
3
Because the focus of governmental funds is narrower than that of the government-wide
financial statements, it is useful to compare the information presented for governmental funds
with similar information presented for governmental activities in the government-wide financial
statements. By doing so, readers may better understand the long-term impact of the
government's near-term financing decisions. Both the governmental funds balance sheet and
the governmental fund statements of revenues, expenditures, and changes in fund balances
provide a reconciliation to facilitate this comparison between governmental funds and
governmental activities.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government-wide and fund financial statements. The notes to the financial statements can be found immediately
following the basic financial statements.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. As of
September 30, 2019, TIF#1's net position was $9,400,672.
The following table reflects the condensed Statement of Net Position:
CITY OF GRAPEVINE TAX INCREMENT FINANCING
DISTRICT REINVESTMENT ZONE NUMBER ONE'S NET POSITION
Governmental Activities
2019 2018
Current and other assets $ 9,400,672 $ 13,725,715
Total assets 9,400,672 13,725,715
Current liabilities - 3,088,283
Total liabilities - 3,088,283
Net position:
Restricted 9,400,672 10,637,432
Total net position $ 9,400,672 $ 10,637,432
Analysis of TIF#1's Operations
On December 15, 2015, the City expanded the boundaries and extended the term of TIF #1 until December 31,
2038. Upon the expansion of the TIF and with the original debt obligations of TIF #1 being retired in full in fiscal
year 2016, all participants in the TIF, except for the City, have withdrawn participation.
The net position of the governmental activities of TIF #1 decreased by $1,236,760 for fiscal year 2019. The
primary reason for this decrease was a disbursement of accumulated funds to Grapevine-Colleyville Independent
School District for construction of capital projects.
4
CITY OF GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE'S CHANGE IN NET POSITION
Governmental Activities
2019 2018
General revenues:
Property taxes $ 1,038,974 $ 890,398
Unrestricted investment earnings 101,133 32,929
Total general revenues 1,140,107 923,327
Expenses:
Economic development 2,376,867 12,442,344
Total expenses 2,376,867 12,442,344
Change in net position ( 1,236,760) ( 11,519,017)
Net position,beginning 10,637,432 22,156,449
Net position,ending $ 9,400,672 $ 10,637,432
FINANCIAL ANALYSIS OF TIF#1'S FUNDS
Governmental Funds
The focus on TIF #1's governmental funds is to provide information on near-term inflows, outflows, and balances
of spendable resources. Such information is useful in assessing TIF#1's financing requirements.
At the end of the current fiscal year, TIF #1's governmental fund reported an ending fund balance of$9,400,672,
a decrease of$1,236,760 in comparison with the prior year.
REQUESTS FOR INFORMATION
This financial report is designed to provide our citizens, investors and creditors with a general overview of TIF #1's
finances. If you have questions about this report or need additional financial information, contact the Finance
Department, City of Grapevine, 200 S. Main Street, Grapevine, Texas 76051.
5
THIS PAGE LEFT BLANK INTENTIONALLY
BASIC
FINANCIAL STATEMENTS
THIS PAGE LEFT BLANK INTENTIONALLY
GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE
(A Blended Component Unit of the City of Grapevine, Texas)
STATEMENT OF NET POSITION
SEPTEMBER 30, 2019
ASSETS
Cash and investments $ 9,400,534
Accrued interest 138
Total assets 9,400,672
NET POSITION
Restricted for construction of educational facilities 7,030,986
Restricted for economic development 2,369,686
Total net position $ 9,400,672
The accompanying notes are an integral
part of these financial statements. 6
THIS PAGE LEFT BLANK INTENTIONALLY
GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE
(A Blended Component Unit of the City of Grapevine, Texas)
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Net (Expense)
Revenues and
Changesin
Net Position
Program Governmental
Functions/Programs Expenses Revenue Activities
Governmental activities:
Economic development $ 2,376,867 $ - $( 2,376,867)
Total governmental activities $ 2,376,867 $ - ( 2,376,867)
General revenues:
Property taxes 1,038,974
Unrestricted investment earnings 101,133
Total general revenues 1,140,107
Change in net position ( 1,236,760)
Net position - beginning 10,637,432
Net position - ending $ 9,400,672
The accompanying notes are an integral
part of these financial statements. 7
THIS PAGE LEFT BLANK INTENTIONALLY
GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE
(A Blended Component Unit of the City of Grapevine, Texas)
BALANCE SHEET
GOVERNMENTALFUNDS
AS OF SEPTEMBER 30, 2019
Capital
Projects Total
ASSETS
Cash and investments $ 9,400,534 $ 9,400,534
Accrued interest 138 138
Total assets 9,400,672 9,400,672
FUND BALANCES
Restricted for construction of educational facilities 7,030,986 7,030,986
Restricted for economic development 2,369,686 2,369,686
Total fund balances 9,400,672 9,400,672
Total liabilities and fund balances $ 9,400,672
Net position of governmental activities $ 9,400,672
The accompanying notes are an integral
part of these financial statements. 8
THIS PAGE LEFT BLANK INTENTIONALLY
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
GOVERNMENTALFUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Capital
Projects Total
REVENUES
Property taxes $ 1,038,974 $ 1,038,974
Investment income 101,133 101,133
Total revenues 1,140,107 1,140,107
EXPENDITURES
Economic development 2,376,867 2,376,867
Total expenditures 2,376,867 2,376,867
NET CHANGE IN FUND BALANCES ( 1,236,760) ( 1,236,760)
FUND BALANCE, BEGINNING 10,637,432 10,637,432
FUND BALANCE, ENDING $ 9,400,672 9,400,672
Net change in fund balance ( 1,236,760)
Change in net position of governmental activities $( 1,236,760)
The accompanying notes are an integral
part of these financial statements. 9
THIS PAGE LEFT BLANK INTENTIONALLY
GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER ONE
(A Blended Component Unit of the City of Grapevine, Texas)
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2019
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Grapevine Tax Increment Financing District Reinvestment Zone Number One (TIF #1) was created
on February 20, 1996. TIF #1 was formed to finance and make public improvements in the area
surrounding the Grapevine Mills mall under the authority of the Tax Increment Financing Act. TIF #1 is
governed by a nine-member Board of Directors; five members are appointed by the Grapevine City
Council, and the governing bodies of Tarrant County, Grapevine/Colleyville Independent School District,
Tarrant County Junior College District and Tarrant County Hospital District appoint one member each. TIF
#1 is a blended component unit of the City of Grapevine, Texas.
On December 15, 2015, the City expanded the boundaries and extended the term of TIF #1 until
December 31, 2038. The extension of the TIF, TIF #1A, will have base tax year of 2016. TIF #1 will
continue to promote and create mixed-use development and the project and financing plan outlines
funding of approximately $95 million. These public improvements will include streets; water, sewer and
storm facilities; open space; and parks and recreation. The amended TIF#1 will fund these improvements
exclusively through contributions of the City's ad valorem increment tax that will be generated within the
new designated boundary zone.
On January 19, 2016, TIF #1 (as authorized by Section 311.011, 311.008 and 311.0085 of the Act and
pursuant to Board Resolution TIF #1 2016-001), amended the plan to establish a TIF Educational
Facilities Category. On February 2, 2016, the City Council approved an ordinance to amend the project
and financing plan for TIF #1. The goal of this amendment was the continued funding of the construction
of needed public infrastructure and to encourage private development.
The accounting and reporting policies of TIF #1 conform to accounting principles generally accepted in
the United States of America as applicable to governmental entities. The following is a summary of the
more significant accounting and reporting policies.
The Capital Projects Fund is used to account for these capital projects. All construction in progress and
completed capital assets are transferred to the City or other entities.
A. Government-wide and Fund Financial Statements
The basic financial statements include both government-wide and fund financial statements. The
government-wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the activities of TIF#1.
The government-wide statement of activities demonstrates the degree to which the direct expenses of
a functional category or segment are offset by program revenues. Direct expenses are those that are
clearly identifiable with specific function or segment. Program revenues include (1) charges to
customers or applicants who purchase, use or directly benefit from goods, services, or privileges
provided by a given function or segment, and (2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment. Taxes and other
items not properly included among program revenues are reported instead as general revenues. TIF
#1 does not report any program revenues.
Separate fund-based financial statements are provided for the governmental fund. The major
individual governmental fund is reported as a separate column in the fund financial statements.
10
B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are
recognized as revenues in the year for which they are earned.
Government fund-level financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as
they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period. For
this purpose, TIF#1 considers revenues to be available if they are collected within 60 days of the end of
the current fiscal period. Property taxes are recognized in the year in which they are levied. Investment
earnings are recorded as earned since they are measurable and available.
C. Budgets and Budgetary Accounting
An overall project budget was included in the plan to create TIF #1 and was approved by all parties
involved. Annual budgets are not adopted.
D. Assets, Liabilities and Net Position or Equity
1. Cash and Investments
Investments for TIF #1 are reported at fair value, except for the position in investment pools,
which are presented at net asset value per share.
2. Fund Balance Policies
Fund balance of governmental funds is reported in various categories based on the nature of any
limitations requiring the use of resources for specific purposes. The government itself can
establish limitations on the use of resources through either a commitment (committed fund
balance) or an assignment (assigned fund balance).
The committed fund balance classification includes amounts that can be used only for the
specific purposes determined by a formal action of the government's highest level of decision-
making authority. A resolution made by the Board of Directors is the highest level of decision-
making authority for TIF #1 that can commit fund balance. Once adopted, the limitation imposed
remains in place until a similar action is taken to remove or revise the limitation.
Amounts in the assigned fund balance classification are intended to be used by the
government for specific purposes but do not meet the criteria to be classified as committed. The
Board of Directors can assign fund balance. Unlike commitments, assignments generally only
exist temporarily. In other words, an additional action does not normally have to be taken for the
removal of an assignment. Conversely, as discussed above, an additional action is essential to
either remove or revise a commitment.
3. Net Position Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted (e.g.,
restricted bond proceeds) and unrestricted resources. In order to calculate the amounts to report
as restricted net position and unrestricted net position in the government-wide financial
statements, a flow assumption must be made about the order in which the resources are
considered to be applied.
It is TIF #1's policy to consider restricted net position to have been depleted before unrestricted
net position is applied.
11
4. Fund Balance Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted and
unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to
calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in
the governmental fund financial statements a flow assumption must be made about the order in
which the resources are considered to be applied. It is the government's policy to consider
restricted fund balance to have been depleted before using any of the components of unrestricted
fund balance. Further, when the components of unrestricted fund balance can be used for the same
purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned
fund balance is applied last.
II. CASH AND INVESTMENTS
The cash and investment policies of TIF#1 mirror the City of Grapevine's policies. City policies governing
bank deposits require depositories to be FDIC-insured institutions, and depositories must fully
collateralize all deposits in excess of FDIC insurance limits.
Investment in the CiVs cash and investment pool $ 9,400,534
Interest Rate Risk. In accordance with its investment policy, the City minimizes the risk that the interest
earnings and the market value of investments in the portfolio will fall due to changes in general interest
rates, by:
a. Structuring the investment portfolio so that investments mature to meet cash
requirements for ongoing operations, thereby avoiding the need to liquidate
investments prior to maturity.
b. Investing operating funds primarily in certificates of deposit, shorter-term securities,
money market mutual funds, or local government investment pools functioning as
money market mutual funds.
c. Diversifying maturities and staggering purchase dates to minimize the impact of
market movements over time.
Credit Risk. In accordance with its investment policy, the City minimizes credit risk, the risk of loss due to
the failure of the issuer or backer of the investment by:
a. Limiting investments to the safest types of investments.
b. Pre-qualifying the financial institutions and broker/dealers with which the City will do
business.
c. Diversifying the investment portfolio so that potential losses on individual issuers will
be minimized.
Concentration of Credit Risk. The City's investment policy allows up to 100% to be invested in U. S.
Treasury Bills/Notes/Bonds and U. S. agencies and instrumentalities. The City's investment in the
securities of U. S. agencies are rated AAA by Standard & Poor's. As of September 30, 2019, the City's
investments in TexPool and LOGIC were rated AAAm.
Custodial Credit Risk. State statutes require that all City deposits in financial institutions be fully
collateralized by U. S. Government obligations or obligations of the State of Texas or its agencies. The
City's deposits were fully collateralized, or have a letter of credit issued by the Federal Home Loan Bank as
required by State statutes at September 30, 2019. The bank balances were fully collateralized by
government securities.
12
TexPool and LOGIC each have a redemption notice period of one day and may redeem daily. The
investment pools' authority may only impose restrictions on redemptions in the event of a general
suspension of trading on major securities markets, general banking moratorium or national state of
emergency that affects the pool's liquidity.
III. APPRAISED VALUES
A summary of appraised values for TIF#1 is as follows:
Tax Year 1996 Captured
2018 Appraised Base Year Appraised
Value Appraised Value Value
City of Grapevine $ 313,567,149 $ 7,647,325 $ 305,919,824
The captured appraised value of TIF #1 is the total appraised value of all real property taxable by the unit
and located in the reinvestment zone less the base year appraised value of all real property taxable by
the unit and located in the reinvestment zone at the time TIF#1 was established (1996).
A summary of appraised values for TIF#1A is as follows:
Tax Year 2016 Captured
2018 Appraised Base Year Appraised
Value Appraised Value Value
City of Grapevine $ 87,114,783 $ 57,644,619 $ 29,470,164
The captured appraised value of TIF #1A is the total appraised value of all real property taxable by the
unit and located in the reinvestment zone less the base year appraised value of all real property taxable
by the unit and located in the reinvestment zone at the time TIF#1A was established (2016).
IV. PLEDGED REVENUES
The Board of Directors for TIF #1 approved amending the Financing and Project Plan to allow the
creation of a 380 category within the Financing and Project Plan whereas all City funds contributed to
date and additional funds contributed be placed in a 380 account in the TIF #1 zone to incentivize further
economic development in the zone.
13
PATTILLO, BROWN & HILL, L.L.P.
YW�!111
401 West State Highway
Waco,Texas 76710
254.772.4901 pbhcpa.com
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States, the financial statements of the governmental activities and
each major fund of the Grapevine Tax Increment Financing District Reinvestment Zone Number One ("TIF
#1"), a component unit of the City of Grapevine, Texas, as of and for the year ended September 30, 2019,
and the related notes to the financial statements, which collectively comprise TIF #1's basic financial
statements, and have issued our report thereon dated March 12, 2020.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered TIF #1's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose
of expressing an opinion on the effectiveness of TIF #1's internal control. Accordingly, we do not express an
opinion on the effectiveness of TIF #1's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or detect
and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of
deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the
entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
14
OFFICE LOCATIONS
TEXAS I Waco Temple I Hillsboro I Houston ` AICPA
NEW MEXICO Albuquerque GAQC Member
Compliance and Other Matters
As part of obtaining reasonable assurance about whether TIF #1's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results
of our tests disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's
internal control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this
communication is not suitable for any other purpose.
P0�4&0/Y> L L
Waco, Texas
March 12, 2020
15
GRAPEVINE TAX INCREMENT
FINANCING DISTRICT REINVESTMENT
ZONE NUMBER TWO
(A Blended Component Unit of
The City of Grapevine, Texas)
BASIC FINANCIAL STATEMENTS
As of and for the Year Ended
SEPTEMBER 30, 2019
(With Independent Auditor's Report)
THIS PAGE LEFT BLANK INTENTIONALLY
GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO
(A Blended Component Unit of the City of Grapevine, Texas)
BASIC FINANCIAL STATEMENTS
TABLE OF CONTENTS
SEPTEMBER 30, 2019
Page
Number
Independent Auditor's Report................................................................................................... 1 -2
Management's Discussion and Analysis.................................................................................. 3-6
Basic Financial Statements:
Government-wide Financial Statements:
Statementof Net Position................................................................................................... 7
Statementof Activities........................................................................................................ 8
Fund Financial Statements:
Balance Sheet—Governmental Funds .............................................................................. 9
Statement of Revenues, Expenditures and Changes in
Fund Balances— Governmental Funds........................................................................... 10
Notes to Financial Statements............................................................................................... 11 — 15
Independent Auditor's Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance With
Government Auditing Standards................................................................................................. 16— 17
THIS PAGE LEFT BLANK INTENTIONALLY
BASIC FINANCIAL STATEMENTS
THIS PAGE LEFT BLANK INTENTIONALLY
PATTILLO, BROWN & HILL, L.L.P.
VV�!111
401 West State Highway 0
Waco,Texas 76710
254.772.4901 pbhcpa.com
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 ("TIF #2"), a
component unit of the City of Grapevine, Texas, as of and for the year ended September 30, 2019, and the
related notes to the financial statements, which collectively comprise TIF #2's basic financial statements as
listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers internal control relevant to the entity's preparation and
fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
1
OFFICE LOCATIONS
TEXAS I Waco Temple I Hillsboro I Houston �•� AICPA
NEW MEXICO Albuquerque GAQC Member
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and each major fund of TIF #2, as of September
30, 2019, and the respective changes in financial position for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the Governmental Accounting
Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards generally
accepted in the United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management's responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 12,
2020 on our consideration of TIF #2's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.
The purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering TIF #2's internal control over financial reporting and
compliance.
Pa4&0/Yk-o"Y-\ L L.�
Waco, Texas
March 12, 2020
2
MANAGEMENT'S
DISCUSSION AND ANALYSIS
THIS PAGE LEFT BLANK INTENTIONALLY
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Grapevine, Texas (the "City"), we offer readers of the Grapevine Tax Increment
Financing District Reinvestment Zone Number Two's ("TIF #2") financial statements this narrative overview and
analysis of the financial activities of TIF #2 for the fiscal year ended September 30, 2019. TIF #2 was formed to
finance and make public improvements in the area surrounding the Gaylord Texan Resort and Convention Center
under the Tax Increment Financing Act. The current TIF #2 agreement is expected to end in 2026, after the last
debt payment has been made.
FINANCIAL HIGHLIGHTS
• The liabilities of TIF#2 exceeded its assets and deferred outflows of resources at the close of
the most recent fiscal year by $3,518,630. This deficit net position is primarily due to debt that
was issued in connection with the public improvement project in the Gaylord Texan Resort
and Convention Center area. Although TIF #2 is responsible for servicing this debt, the
related assets are not TIF#2's. This deficit will be eliminated as resources are obtained (e.g.,
from future tax revenues).
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis serves as an introduction to the TIF #2's basic financial statements. TIF #2's basic
financial statements are comprised of three components: government-wide financial statements, fund financial
statements, and notes to the financial statements.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of TIF #2's
finances in a manner similar to a private-sector business.
The Statement of Net Position presents information on all of TIF #2's assets, deferred outflows of resources and
liabilities, with the difference reported as net position. Over time, increases or decreases in net position may serve
as a useful indicator of whether the financial position of TIF#2 is improving or deteriorating.
The Statement of Activities presents information showing how TIF#2's net position changed during the fiscal year. All
changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of
the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will
only result in cash flows in future fiscal periods (e.g., uncollected taxes).
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated
for specific activities or objectives. TIF#2 uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements.
• Governmental funds — Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial
statements focus on current sources and uses of spendable resources, as well as on balances
of spendable resources available at the end of the fiscal year. Such information may be useful
in evaluating a government's near-term financing requirements.
3
Because the focus of governmental funds is narrower than that of the government-wide
financial statements, it is useful to compare the information presented for governmental funds
with similar information presented for governmental activities in the government-wide financial
statements. By doing so, readers may better understand the long-term impact of TIF #2's near-
term financing decisions. Both the governmental funds balance sheet and the governmental
fund statements of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental
activities.
The fund financial statements include two funds: (1) the General Fund, which is used to
account for principal and interest payments, and (2)the Capital Projects Fund, which is used to
account for the acquisition and construction of public improvements.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government-wide and fund financial statements. The notes to the financial statements can be found immediately
following the fund financial statements.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. As of
September 30, 2019, TIF#2's liabilities exceeded assets and deferred outflows of resources by$3,518,630.
The following table reflects the condensed Statement of Net Position:
CITY OF GRAPEVINE TAX INCREMENT FINANCING
DISTRICT REINVESTMENT ZONE NUMBER TWO'S NET POSITION
Governmental Activities
2019 2018
Current and other assets $ 11,706,115 $ 9,425,778
Total assets 11,706,115 9,425,778
Deferred outflows of resources 193,048 220,626
Long-term liabilities outstanding 15,345,718 17,196,535
Other liabilities 72,075 80,300
Total liabilities 15,417,793 17,276,835
Net position:
Unrestricted ( 3,518,630) ( 7,630,431)
Total net position $( 3,518,630) $( 7,630,431)
Analysis of TIF#2's Operations
Governmental activities increased TIF #2's net position by $4,111,801 with TIF #2's liabilities to assets and
deferred outflows of resources ratio decreasing from 1.8 in FY 2018 to 1.3 in fiscal year 2019. TIF#2 entered into
a local agreement with the Grapevine-Colleyville Independent School District and pledged future ad valorem
taxes collected by TIF#2 to be contributed towards the district's middle school debt. The total amount that TIF #2
paid the district in fiscal year 2019 was $1,430,250.
4
The following table provides a summary of TIF#2 operations for the year ended September 30, 2019.
CITY OF GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO'S CHANGE IN NET POSITION
Governmental Activities
2019 2018
Revenues:
General revenues:
Property taxes $ 5,806,220 $ 4,817,939
Unrestricted investment earnings 193,217 149,770
Total revenues 5,999,437 4,967,709
Expenses:
Economic development 1,430,250 1,410,250
Interest 457,386 507,255
Total expenses 1,887,636 1,917,505
Change in net position 4,111,801 3,050,204
Net position,beginning ( 7,630,431) ( 10,680,635)
Net position,ending $( 3,518,630) $( 7,630,431)
FINANCIAL ANALYSIS OF TIF#2's FUNDS
Governmental Funds
The focus of the TIF #2's governmental funds is to provide information on near-term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing TIF#2's financing requirements.
At the end of the current fiscal year, TIF #2's governmental funds reported combined ending fund balances of
$11,706,115, an increase of $2,280,337 in comparison with the prior year. The fund balance consists of the
following: (1) restricted for economic development: $9,439,307 and (2) restricted for capital projects: $2,266,808.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. Capital assets of TIF #2 are recorded as expenditures in the Capital Projects Fund when
constructed. Completed capital assets are transferred to the City.
Long-term Debt. At the end of the current fiscal year, TIF #2 had total bonded debt outstanding of $13,905,000,
which is backed by the full faith and credit of TIF #2.
CITY OF GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO'S OUTSTANDING DEBT
2019 2018
Combination Tax Increment Reinvestment
Zone Revenue Refunding Bonds,
Series 2015A due in annual installments
of$375,000 to$2,230,000 through
August 2026; interest at 2%to 5% $ 13,905,000 $ 15,550,000
$ 13,905,000 $ 15,550,000
5
REQUESTS FOR INFORMATION
This financial report is designed to provide our citizens, investors and creditors with a general overview of TIF #2's
finances. If you have questions about this report or need additional financial information, contact the Finance
Department, City of Grapevine, 200 S. Main Street, Grapevine, Texas 76051.
6
BASIC
FINANCIAL STATEMENTS
THIS PAGE LEFT BLANK INTENTIONALLY
GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO
(A Blended Component Unit of the City of Grapevine, Texas)
STATEMENT OF NET POSITION
SEPTEMBER 30, 2019
ASSETS
Cash and investments $ 11,705,564
Accrued interest 551
Total assets 11,706,115
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on bond refunding 193,048
Total deferred outflows of resources 193,048
LIABILITIES
Accrued interest payable 72,075
Bonds payable - due in one year 1,720,000
Bonds payable - due in more than one year 13,625,718
Total liabilities 15,417,793
NET POSITION
Unrestricted ( 3,518,630)
Total net position $( 3,518,630)
The accompanying notes are an integral
part of these financial statements. 7
THIS PAGE LEFT BLANK INTENTIONALLY
GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO
(A Blended Component Unit of the City of Grapevine, Texas)
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Net(Expense)
Revenues and
Changes in
Net Position
Program Governmental
Functions/Programs Expenses Revenue Activities
Governmental activities:
Economic development $ 1,430,250 $ - $( 1,430,250)
Interest 457,386 - ( 457,386)
Total governmental activities $ 1,887,636 $ - ( 1,887,636)
General revenues:
Property taxes 5,806,220
Unrestricted investment earnings 193,217
Total general revenues 5,999,437
Change in net position 4,111,801
Net position - beginning ( 7,630,431)
Net position - ending $( 3,518,630)
The accompanying notes are an integral
part of these financial statements. 8
THIS PAGE LEFT BLANK INTENTIONALLY
GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO
(A Blended Component Unit of the City of Grapevine, Texas)
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2019
Capital
General Projects Total
ASSETS
Cash and investments $ 9,438,756 $ 2,266,808 $ 11,705,564
Accrued interest 551 - 551
Total assets 9,439,307 2,266,808 11,706,115
LIABILITIES AND FUND BALANCES
Total Liabilities - - -
Fund balances:
Restricted for capital projects - 2,266,808 2,266,808
Restricted for economic development 9,439,307 - 9,439,307
Total fund balances 9,439,307 2,266,808 11,706,115
Total liabilities and fund balances $ 9,439,307 $ 2,266,808
Amounts reported for governmental activities in the statement of net
position are different because:
Long-term liabilities are not due and payable in the current period and
therefore are not reported in the funds:
Accrued interest payable ( 72,075)
Deferred loss on refunding 193,048
Bonds payable ( 13,905,000)
Premium on issuance of debt ( 1,440,718)
Net position of governmental activities $( 3,518,630)
The accompanying notes are an integral
part of these financial statements. 9
THIS PAGE LEFT BLANK INTENTIONALLY
GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO
(A Blended Component Unit of the City of Grapevine, Texas)
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2019
Capital
General Projects Total
REVENUES
Taxes:
Property taxes $ 5,806,220 $ - $ 5,806,220
Investment income 137,703 55,514 193,217
Total revenues 5,943,923 55,514 5,999,437
EXPENDITURES
Economic development 1,430,250 - 1,430,250
Debt service:
Principal 1,645,000 - 1,645,000
Interest 642,400 - 642,400
Fiscal charges 750 700 1,450
Total expenditures 3,718,400 700 3,719,100
NET CHANGE IN FUND BALANCES 2,225,523 54,814 2,280,337
FUND BALANCE, BEGINNING 7,213,784 2,211,994 9,425,778
FUND BALANCE, ENDING $ 9,439,307 $ 2,266,808 11,706,115
Net change in fund balances 2,280,337
Amounts reported for governmental activities in the statement of
activities are different because:
The repayment of principal of long-term debt consumes the current financial
resources of governmental funds, but reduces bond principal at the
government-wide level. 1,645,000
Interest expense is accrued in the government-wide financial statements,
but not at the fund level. 8,225
Amortization of premium, loss, etc. are reported in the statement
of activities but do not require the use of current financial resources and,
therefore, are not reported as expenditures in the funds. 178,239
Change in net position of governmental activities $ 4,111,801
The accompanying notes are an integral
part of these financial statements. 10
THIS PAGE LEFT BLANK INTENTIONALLY
GRAPEVINE TAX INCREMENT FINANCING DISTRICT
REINVESTMENT ZONE NUMBER TWO
(A Blended Component Unit of the City of Grapevine, Texas)
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2019
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Grapevine Tax Increment Financing District Reinvestment Zone Number Two (TIF #2) was created
on December 28, 1998. TIF #2 was formed to finance and make public improvements in the area
surrounding the Gaylord Texan Resort and Convention Center under the authority of the Tax Increment
Financing Act. TIF #2 is governed by a six-member board of directors; five members are appointed by the
Grapevine City Council, and the governing body of Grapevine/Colleyville Independent School District
appoints one member. The termination of TIF #2 is set as either December 31, 2030, or the date when all
project costs are paid and all debt is retired, whichever comes first. TIF#2 is a blended component unit of
the City of Grapevine, Texas.
The accounting and reporting policies of TIF #2 conform to accounting principles generally accepted in
the United States of America, as applicable to governmental units. The following is a summary of the
more significant accounting and reporting policies:
A. Government-wide and Fund Financial Statements
The basic financial statements include both government-wide and fund financial statements. The
government-wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the activities of TIF#2.
The government-wide statement of activities demonstrates the degree to which the direct expenses of
a functional category or segment are offset by program revenues. Direct expenses are those that are
clearly identifiable with a specific function or segment. Program revenues include (1) charges to
customers or applicants who purchase, use or directly benefit from goods, services, or privileges
provided by a given function or segment, and (2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment. Taxes and other
items not properly included among program revenues are reported instead as general revenues. The
TIF does not report any program revenues.
Separate fund-based financial statements are provided for governmental funds. Major individual
governmental funds are reported as separate columns in the fund financial statements. The major
governmental funds are the General Fund, which is used to account for economic development and
debt service payments, and the Capital Projects Fund, which is used to account for financial
resources to be used for the acquisition or construction of major capital facilities.
The government-wide focus is more on the sustainability of TIF #2 as an entity and the change in
aggregate financial position resulting from the activities of the fiscal period. The focus of the fund
financial statements is on the major individual funds. Each presentation provides valuable information
that can be analyzed and compared to enhance the usefulness of the information.
B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are
recognized as revenues in the year for which they are earned.
11
Government fund-level financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon
as they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period.
For this purpose, TIF#2 considers revenues to be available if they are collected within 60 days of the
end of the current fiscal period. Property taxes are recognized in the year in which they are levied.
Investment earnings are recorded as earned since they are measurable and available.
C. Budgets and Budgetary Accounting
An overall project budget was included in the plan to create TIF #2 and approved by all parties
involved. Annual budgets are not adopted.
D. Assets, Liabilities and Net Position or Equity
1. Cash and Investments
Investments for TIF #2 are reported at fair value, except for its position in investment pools, which
are recorded at net asset value per share.
2. Long-term Debt
In the government-wide financial statements, long-term debt and other long-term obligations are
reported as liabilities in the applicable governmental activities statement of net position. Bond
premiums and discounts are deferred and amortized over the life of the bonds. Bonds payable
are reported net of the applicable bond premium or discount.
In the fund financial statements, governmental funds recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. The face amount of debt issued is
reported as other financing sources. Premiums received on debt issuances are reported as other
financing sources while discounts on debt issuances are reported as other financing uses.
Issuance costs, whether or not withheld from the actual debt proceeds, are reported as debt
service expenditures.
3. Fund Balance Policies
Fund balance of governmental funds is reported in various categories based on the nature of any
limitations requiring the use of resources for specific purposes. The government itself can establish
limitations on the use of resources through either a commitment (committed fund balance) or an
assignment(assigned fund balance).
The committed fund balance classification includes amounts that can be used only for the specific
purposes determined by a formal action of the government's highest level of decision-making
authority. A resolution made by the Board of Directors is the highest level of decision-making
authority for TIF#2 that can commit fund balance. Once adopted, the limitation imposed remains in
place until a similar action is taken to remove or revise the limitation.
Amounts in the assigned fund balance classification are intended to be used by the government for
specific purposes but do not meet the criteria to be classified as committed.
The Board of Directors can assign fund balance. Unlike commitments, assignments generally only
exist temporarily. In other words, an additional action does not normally have to be taken for the
removal of an assignment. Conversely, as discussed above, an additional action is essential to
either remove or revise a commitment.
12
4. Net Position Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted (e.g.,
restricted bond proceeds)and unrestricted resources. In order to calculate the amounts to report as
restricted—net position and unrestricted—net position in the government-wide financial statements,
a flow assumption must be made about the order in which the resources are considered to be
applied.
It is TIF#2's policy to consider restricted — net position to have been depleted before unrestricted —
net position is applied.
5. Fund Balance Flow Assumptions
Sometimes the government will fund outlays for a particular purpose from both restricted and
unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to
calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in
the governmental fund financial statements a flow assumption must be made about the order in
which the resources are considered to be applied. It is the government's policy to consider
restricted fund balance to have been depleted before using any of the components of unrestricted
fund balance. Further, when the components of unrestricted fund balance can be used for the same
purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned
fund balance is applied last.
6. Deferred Inflows/Outflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows of
resources, represents a consumption of net position that applies to a future period(s) and so will not
be recognized as an outflow of resources (expense/expenditure) until then. TIF #2 is reporting a
balance for a deferred loss on bond refunding in the government-wide Statement of Net Position. A
deferred loss on a bond refunding results when the reacquisition price of the refunded debt exceeds
the carrying value. This amount is deferred and amortized over the shorter of the life of the refunded
or refunding debt.
II. CASH AND INVESTMENTS
The cash and investment policies of TIF#2 mirror the City of Grapevine's policies. City policies governing
bank deposits require depositories to be FDIC-insured institutions, and depositories must fully
collateralize all time deposits in excess of FDIC insurance limits.
The City invests in state investment pools (TexPool, TexPool Prime and LOGIC). These approved pooled
investments are carried at net asset value.
The components of TIF#2's cash and investments at September 30, 2019, were as follows:
Investment in the Citys cash and investment pool $ 11,705,564
Interest Rate Risk. In accordance with its investment policy, the City minimizes the risk that the interest
earnings and the market value of investments in the portfolio will fall due to changes in general interest
rates, by:
a. Structuring the investment portfolio so that investments mature to meet cash
requirements for ongoing operations, thereby avoiding the need to liquidate
investments prior to maturity.
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.
13
c. Diversifying maturities and staggering purchase dates to minimize the impact of
market movements over time.
Credit Risk. In accordance with its investment policy, the City minimizes credit risk, the risk of loss due to
the failure of the issuer or backer of the investment by:
a. Limiting investments to the safest types of investments.
b. Pre-qualifying the financial institutions and broker/dealers with which the City will do
business.
c. Diversifying the investment portfolio so that potential losses on individual issuers will
be minimized.
Concentration of Credit Risk. The City's investment policy allows up to 100% to be invested in U. S.
Treasury Bills/Notes/Bonds, and U. S. Agencies and Instrumentalities. As of September 30, 2019, the
City's investments in TexPool and Logic were rated AAAm.
Custodial Credit Risk. State statutes require that all City deposits in financial institutions be fully
collateralized by U. S. Government obligations or obligations of the State of Texas or its agencies. The
City's deposits were fully collateralized or have a letter of credit issued by the Federal Home Loan Bank as
required by State statutes at September 30, 2019. The bank balances were fully collateralized by
government securities.
TexPool and LOGIC each have a redemption notice period of one day and may redeem daily. The
investment pools' authority may only impose restrictions on redemptions in the event of a general
suspension of trading on major securities markets, general banking moratorium or national state of
emergency that affects the pool's liquidity.
III. LONG-TERM LIABILITIES
Long-term liabilities are as follows:
Balance Balance Due Within
9/30/2018 Additions Retirements 9/30/2019 One Year
Combination Tax Increment
Reinvestment Zone Revenue
Refunding Bonds,Series
2015A;due in annual
installments of$375,000 to
$2,230,000 through
August 2026;2%to 5% $ 15,550,000 $ - $( 1,645,000) $ 13,905,000 $ 1,720,000
Total debt outstanding $ 15,550,000 - $( 1,645,000) 13,905,000 $ 1,720,000
Unamortized premium 1,440,718
Total debt outstanding $ 15,345,718
14
The annual requirements to amortize the long-term debt as of September 30, 2019, are as follows:
Year Ending
September 30, Principal Interest
2020 $ 1,720,000 $ 576,600
2021 1,810,000 490,600
2022 1,895,000 400,100
2023 1,990,000 305,350
2024 2,095,000 205,850
2025-2026 4,395,000 221,050
Total $ 13,905,000 $ 2,199,550
The Series 2015A bonds constitute direct obligations of the City, payable from a combination of (i) the
levy and collection of a continuing ad valorem tax, levied within the limits prescribed by law, on all taxable
property within the City, and (ii) a subordinate lien on and pledge of the tax increments of the City's
Reinvestment Zone Number Two. Should the City default on these bonds, any registered owner of the
certificates is entitled to seek a writ of mandamus from a court of proper jurisdiction requiring specific
performance from the City.
IV. APPRAISED VALUES AND TAX RATES
A summary of appraised values for TIF#2 is as follows:
Tax Year 1998 Base Captured
2018Appraised Year Appraised Appraised
Value Value Value
City of Grapevine $ 338,262,603 $ 744,886 $ 337,517,717
Grapevine-ColleyviIle Independent
School District 338,262,603 744,886 337,517,717
The captured appraised value of TIF #2 is the total appraised value of all real property taxable by the unit
and located in the reinvestment zone less the base year appraised value of all real property taxable by
the unit and located in the reinvestment zone at the time TIF#2 was established (1999).
Tax rates for TIF#2 are as follows (per$100 valuation):
Rate
City of Grapevine 0.289271
Grapevine-Colleyville Independent
School District 1.396700
V. PLEDGED REVENUES
TIF #2 has entered into a local agreement with the Grapevine-Colleyvi Ile Independent School District
where future ad valorem taxes collected for the zone are pledged to contribute towards the district's
middle school debt. The total amount that TIF #2 has pledged to pay is $30,704,051 as of September 30,
2019. The amount of the annual payment is negotiated each year with the district.
1s
THIS PAGE LEFT BLANK INTENTIONALLY
PATTILLO, BROWN & HILL, L.L.P.
401 West State Highway
Waco,Texas 76710
254.772.4901 pbhcpa.com
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Honorable Mayor and
Members of the City Council
City of Grapevine, Texas
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States, the financial statements of the governmental activities and
each major fund of Grapevine Tax Increment Financing District Reinvestment Zone Number Two ("TIF #2"), a
component unit of the City of Grapevine, Texas, as of and for the year ended September 30, 2019, and the
related notes to the financial statements, which collectively comprise TIF #2's basic financial statements, and
have issued our report thereon dated March 12, 2020.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered TIF #2's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose
of expressing an opinion on the effectiveness of TIF #2's internal control. Accordingly, we do not express an
opinion on the effectiveness of TIF #2's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or detect
and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of
deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the
entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
16
OFFICE LOCATIONS ��.`
TEXAS I Waco Temple I Hillsboro I Houston ` AICPA
NEW MEXICO Albuquerque GAQC Member
Compliance and Other Matters
As part of obtaining reasonable assurance about whether TIF #2's financial statements are free from material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements, noncompliance with which could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed
no instances of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's
internal control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this
communication is not suitable for any other purpose.
POL,4 j10 L-L
Waco, Texas
March 12, 2020
17