Lewisville City Council
Transcription
Lewisville City Council
Lewisville City Council The agenda and backup items follow in one continuous document. However, to view documents individually, click on the bookmark tab at the left of the screen. A list of all documents contained in the packet should appear in a screen to the left. If it does not, click on the “Show/Hide Navigation Pane” button in the toolbar at the top of the page. Click on the item you would like to view, and it will appear in the window to the right. AGENDA LEWISVILLE CITY COUNCIL MEETING MARCH 17, 2014 LEWISVILLE CITY HALL 151 WEST CHURCH STREET LEWISVILLE, TEXAS 75057 WORKSHOP SESSION - 6:30 P.M. REGULAR SESSION - 7:00 P.M. Call to Order and Announce a Quorum is Present. WORKSHOP SESSION - 6:30 P.M. A. Discussion of Regular Agenda Items and Consent Agenda Items REGULAR SESSION - 7:00 P.M. A. INVOCATION: Councilman Ferguson B. PLEDGE TO THE AMERICAN AND TEXAS FLAGS: Councilman Durham C. PUBLIC HEARINGS: 1. Public Hearing: Consideration of an Ordinance for a Zone Change Request From Light Industrial (LI) to Planned Unit Development (PUD) District Zoning for the “Hills of Vista Ridge” Subdivision Located on Two Parcels Totaling 26.325 Acres; Identified as Lot 5, Block B, Campbell Ranch Addition and Tract 5B of the G. Woolsey Survey, Abstract 1402; as Requested by Amalgamated Development, L.P., on Behalf of the Property Owner. (Case No. PUD-2014-01-01) AGENDA LEWISVILLE CITY COUNCIL MARCH 17, 2014 ADMINISTRATIVE COMMENTS: The Planned Unit Development (PUD) district allows for innovative community design concepts that may contain a mix of uses, and which may not meet all regulations of the City’s standard zoning categories. Both properties included in the proposed PUD are currently vacant and are zoned Light Industrial. The proposed development contains 125 detached single family homes with lot sizes, setbacks, and square footages similar to those required for the Estate Townhouse designation. The Planning and Zoning Commission recommended approval of the request by a vote of 5-1 at their meeting on February 4, 2014. RECOMMENDATION: That the City Council consider the ordinance as set forth in the caption above but require only a wooden fence adjacent to the northern property line next to the Light Industrial property instead of wood with masonry columns. PRESENTATION: Nika Reinecke, Director of Economic Development and Planning Tom Juhn, JBI Partners, Inc. 2. Public Hearing: Consideration of the Service and Assessment Plan and Assessment Roll for Lewisville Castle Hills Public Improvement District (PID) No. 5. ADMINISTRATIVE COMMENTS: At the March 3, 2014 meeting, City Council called for a public hearing to consider the Service and Assessment Plan and Assessment Roll which have been created to identify public improvements to be provided by the PID along with related information concerning the costs and indebtedness to be incurred. Revisions to the plan are currently pending the Attorney General’s opinion. RECOMMENDATION: That the City Council open and continue the public hearing until April 7, 2014. Page 2 AGENDA LEWISVILLE CITY COUNCIL MARCH 17, 2014 3. Public Hearing: Consideration of the Service and Assessment Plan and Assessment Roll for Lewisville Castle Hills Public Improvement District (PID) No. 7. ADMINISTRATIVE COMMENTS: At the March 3, 2014 meeting, City Council called for a public hearing to consider the Service and Assessment Plan and Assessment Roll which have been created to identify public improvements to be provided by the PID along with related information concerning the costs and indebtedness to be incurred. Revisions to the plan are currently pending the Attorney General’s opinion. RECOMMENDATION: That the City Council open and continue the public hearing until April 7, 2014. D. VISITORS/CITIZENS FORUM: At this time, any person with business before the Council not scheduled on the agenda may speak to the Council. No formal action can be taken on these items at this meeting. E. CONSENT AGENDA: All of the following items on the Consent Agenda are considered to be self-explanatory by the Council and will be enacted with one motion. There will be no separate discussion of these items unless a Council Member or citizen so request. For a citizen to request removal of an item, a speaker card must be filled out and submitted to the City Secretary. 4. APPROVAL OF MINUTES: City Council Minutes of the March 3, 2014, Workshop Session and Regular Session. 5. Acceptance of the Fiscal Year 2013 Comprehensive Annual Financial Report (CAFR). ADMINISTRATIVE COMMENTS: The independent annual audit of the City's financial statements is complete. The 2013 Comprehensive Annual Financial Report is provided in compliance with the City Council's Finance Policy Statement 3.0 Section I. The report includes the auditor's opinion statement regarding the financial statement presentation. Also included is the Single Audit Report on Federal Financial Assistance. Page 3 AGENDA LEWISVILLE CITY COUNCIL MARCH 17, 2014 RECOMMENDATION: That the City Council accept the Fiscal Year 2013 Comprehensive Annual Financial Report (CAFR). F. REGULAR HEARINGS: 6. Consideration of Variance Requests to the Lewisville City Code Section 6-92 (j) Turning Lanes, Section 6-123 (b) Landscape Strip, and Section 2-201 Fees, Related to New Construction for the Lee Walker Government Center, as Requested by Bobbie J. Mitchell, Denton County Commissioner Precinct 3, Located at 190 North Valley Parkway. ADMINISTRATIVE COMMENTS: Denton County is proposing to construct a new Government Center located on their existing property on Valley Parkway. Two new buildings are proposed for the project. Phase one of the project includes a 40,700 square foot building at the northwest corner of Valley Parkway and Civic Circle. Phase Two will consist of a 26,450 square foot building on the southwest corner of Valley Parkway and Civic Circle. An Engineering Site Plan has been submitted for Phase One and Two that includes three variances: a) provide modified right turn lanes on Valley Parkway to Civic Circle and Civic Circle to Valley Parkway, b) provide modified landscape strips along Valley Parkway and along Civic Circle, and c) waive development fees in the amount of $41,863. RECOMMENDATION: That the City Council approve the variances as set forth in the caption above. PRESENTATION: Eric Ferris, Director of Community Development Page 4 AGENDA LEWISVILLE CITY COUNCIL MARCH 17, 2014 7. Consideration of an Ordinance Amending the Lewisville City Code Chapter 4, Article X Fences, Section 4-453 General Requirements Amending Certain Single Family Residential Fence Configurations. ADMINISTRATIVE COMMENTS: The City of Lewisville Fence Ordinance, Section 4-453 General Requirements and Restrictions (j) states: No fence shall be constructed in the required front yard building setback area of R, DU, TH, PH, OD or MD zoning districts, except that a decorative fence may be constructed to a height no greater than 3½ feet above the finished lot grade and the solid area of such fence shall not exceed 50 percent of the total. New language is being requested to read: “Where a single family residence on a corner lot has two front yards as required by city ordinance and the residence is constructed facing one of the two front yards, the second front yard may be fenced in the same manner as any other side yard provided that the adjoining lot does not have a residence that fronts the same setback.” RECOMMENDATION: That the City Council approve the ordinance as set forth in the caption above. PRESENTATION: Cleve Joiner, Building Official 8. Consideration of an Ordinance Approving a Finance Plan for the Tax Increment Reinvestment Zone Number One (TIRZ #1) Repealing the Previously Approved Finance Plan. ADMINISTRATIVE COMMENTS: Council adopted Ordinance 3441-05-2007 adopting the Finance Plan for the TIRZ #1 in May of 2007. Staff discovered a scrivener’s error which needs to be corrected. RECOMMENDATION: That the City Council approve the amended ordinance as set forth in the caption above. Page 5 AGENDA LEWISVILLE CITY COUNCIL MARCH 17, 2014 9. Consideration of an Ordinance Approving a Project Plan for the Tax Increment Reinvestment Zone Number One (TIRZ #1) Repealing Previously Approved Project Plan. ADMINISTRATIVE COMMENTS: Council adopted Ordinance 3442-05-2007 adopting the Project Plan for TIRZ #1 in May of 2007. Following are the changes now being proposed: adding general goals, modifying non-project costs, adding project costs to the project plan, and reorganizing the document to improve readability. RECOMMENDATION: That the City Council approve the amended ordinance as set forth in the caption above. 10. Consideration of an Economic Development Agreement by and Between the City of Lewisville and Old Town Development Lewisville, LLC; Approval of a Supplemental Appropriation in the Amount of $500,000 From General Fund Reserves; and Authorization for the City Manager to Execute the Contract. ADMINISTRATIVE COMMENTS: Old Town Development Lewisville, LLC, has submitted a proposal to develop the 1.76 acre City owned property at the N.W. corner of Charles and Church Streets. The proposal calls for the construction of three high quality restaurants and associated improvements that represent the peak of market demand for destination dining. The development will incorporate local architectural features to give the development a historic feel that represents the unique aesthetics of Old Town Lewisville. Old Town Development will invest approximately two-million, five hundred thousand dollars ($2,500,000) to develop the restaurant sites and will reimburse the City for the value of the land through sales and property tax payments. Cash payments will be required beginning the 6th year if the value of the land has not been reimbursed. The proposed agreement is for 15 years and includes a rebate of sales and property tax, as well as reimbursement for building permit fees. Page 6 AGENDA LEWISVILLE CITY COUNCIL MARCH 17, 2014 RECOMMENDATION: That the City Council consider the agreement and supplemental appropriation as set forth in the caption above. G. REPORTS: Reports about items of community interest regarding which no action will be taken. H. CLOSED SESSION: In Accordance with Texas Government Code, Subchapter D, 1. Section 551.072 (Real Estate): Property Acquisition 2. Section 551.074 (Personnel Matters): City Manager or Interim City Manager - Deliberation of appointment, employment, reassignment, duties. 3. Section 551.087 (Economic Development): Deliberation Regarding Economic Development Negotiations I. RECONVENE into Regular Session and Consider Action, if Any, on Items Discussed in Closed Session. J. ADJOURNMENT The City Council reserves the right to adjourn into closed session at any time during the course of this meeting to discuss any of the matters listed above, as authorized by Texas Government Code Section 551.071 (Consultation with Attorney), 551.072 (Deliberations about Real Property), 551.073 (Deliberations about Gifts and Donations), 551.074 (Personnel Matters), 551.076 (Deliberations about Security Devices) and 551.087 (Economic Development). Page 7 MEMORANDUM TO: Claude King, City Manager FROM: Nika Reinecke, Director of Economic Development and Planning DATE: February 6, 2014 SUBJECT: Public Hearing: Consideration of an Ordinance for a Zone Change Request From Light Industrial (LI) to Planned Unit Development (PUD) District Zoning for the “Hills of Vista Ridge” Subdivision Located on Two Parcels Totaling 26.325 Acres; Identified as Lot 5, Block B, Campbell Ranch Addition and Tract 5B of the G. Woolsey Survey, Abstract 1402; as Requested by Amalgamated Development, L.P., on Behalf of the Property Owner. (Case No. PUD-2014-01-01) BACKGROUND The Planned Unit Development (PUD) district allows for innovative community design concepts that may contain a mix of uses, and which may not meet all regulations of the City’s standard zoning categories but allow for higher standards in certain areas. Both properties included in the proposed PUD are currently vacant and zoned Light Industrial. Tract 1, located at the northeast corner of Vista Ridge Mall Drive and Oakbend Drive, is the larger of the two tracts and consists of 14.62 acres. It abuts an undeveloped Light Industrial lot to the north and existing apartments to the east. This tract is proposed to include 72 residential lots and one open space lot maintained by a Home Owners’ Association (HOA). Tract 2 is located on the south side of Vista Ridge Mall Drive, at the southern terminus of Oakbend Drive, and consists of 11.705 acres. It is surrounded by apartments and single-family residences on three sides. Tract 2 is proposed to have 53 residential lots and one open space lot maintained by the HOA. ANALYSIS The proposed PUD contains a total of 125 residential lots with minimum widths of 50 feet and lengths of 110 feet, for a total minimum lot area of 5,500 square feet. It also features two open space lots with walking paths, benches, grilling areas and a shade structure. The community will be managed by a Home Owners’ Association responsible for maintaining the common areas. Dwelling Unit Size Proposed unit sizes are mainly 2,000 to 3,200 square feet. A maximum of 12 units would be allowed to be a minimum of 1,700 square foot in size. Subject: Public Hearing Zone Change Hills of Vista Ridge February 6, 2014 Page 2 of 3 Façade Requirements garage doors clad in stained natural cedar or faux wood; driveways made of decorated pavers or stained and stamped or patterned saw-cut or salt-finished concrete; Minimum 75 percent brick masonry coverage of the total structure with 100 percent on the front elevation (exclusive of doors, windows, trim and architectural features); All façades facing Oakbend Drive or Vista Ridge Mall Drive are also required to be 100 percent masonry. Setback Requirements and Lot Coverage Minimum front setbacks are 15 feet for swing-in garages, or 20 feet for front-entry garages, which is the same as Estate Townhouse (ETH) zoning. Side yards have a minimum five (5) feet setback and rear yards have a minimum depth of 15 feet. No more than 60 percent lot coverage by the main building and accessory buildings is permitted. Screening Wall and Fencing Requirements (Exhibit Attached) Masonry screening walls will be constructed along Vista Ridge Mall Drive and Oakbend Drive as required by the GDO. Masonry screening walls will also be constructed along the eastern property line on the northern tract (Tract 1) where the PUD abuts the existing multi-family development of Chapel Hill Apartments as required by the GDO. A wood fence is proposed adjacent to Light Industrial zoning on the northern boundary of Tract 1, as the GDO does not require a masonry wall at this time. The Light Industrial development is required to construct a Masonry wall at the time of development. The exhibit shown at the P&Z meeting for this location showed wood fence with masonry columns which was an error on the part of the developer. The applicant has revised the wood fence detail to include only the required wood fence, removing the previously shown stone column, since the future Light Industrial user would be required to install a masonry screening wall in that location. Tract 2, located on the south side of Vista Ridge Mall Drive, abuts multi-family on the majority of its boundaries and single-family residential on a portion of its southeastern border. The Broadstone Vista Ridge Apartment complex, immediately south and east of the subject property, has an ornamental iron fence along the common property line. The GDO requires a masonry screening wall along this boundary, however the applicant is proposing to install a six foot wood fence in lieu of the required masonry wall. A masonry wall is required and proposed along common eastern boundary line of the Vista Ridge Condominiums. Currently there is an existing wood fence separating these properties. Subject: Public Hearing Zone Change Hills of Vista Ridge February 6, 2014 Page 3 of 3 Additional Amenities One purpose of a Planned Unit Development zoning district is to accommodate innovative design concepts and provide flexibility on development standards in order to achieve a more desirable development. In this case, staff has requested that the applicant include additional amenities in at least one of the two open space lots such as a splash park, playground equipment, bocce ball courts, or other features that will differentiate the Hills of Vista Ridge from other small lot communities. Currently, the open areas contain minimal amenities, which would typically not be sufficient enough to warrant a PUD designation. The developer argued that additional amenities would not be desirable because it could cause liability issues for the HOA and increase the maintenance cost and thus HOA dues in the future. The Planning and Zoning Commission agreed with the applicant on the provided amenities as shown (landscaping and benches) and recommended approval of the PUD by a vote of 5-1, at their February 4, 2014, meeting. The one dissenting vote was from Kristin Green, who noted concern about taking commercial property off of the tax rolls and funding the long-term infrastructure costs. RECOMMENDATION It is City staff’s recommendation that the City Council consider the ordinance as set forth in the caption above but require only a wooden fence adjacent to the northern property line next to the Light Industrial property instead of wood with masonry columns. MINUTES PLANNING AND ZONING COMMISSION FEBRUARY 4, 2014 Item 5: Public hearing zoning cases were the next item on the agenda. There was one item for consideration, continued from the January 7, 2014 meeting. A. Continued: Consideration of a Zone Change Request from Light Industrial (LI) to Planned Unit Development (PUD) for the “Hills of Vista Ridge” on Two Parcels Totaling 26.325 acres. Tract 1 is Located at the Northeast Corner of Oakbend Drive and Vista Ridge Mall Drive and Tract 2 is Located on the South Side of Vista Ridge Mall Drive at the Southern Terminus of Oakbend Drive; Further Identified as Lot 5, Block B, Campbell Ranch Addition and Tract 5B of the G. Woolsey Survey, Abstract 1402, respectively. The Request is Being Made by Amalgamated Development, L.P. on Behalf of the Property Owner. (Case No. PUD-2014-0101) Staff presented the zone change request and explained that the Planned Unit Development (PUD) district allows for more integrated community design concepts that may not meet all regulations of the City’s standard zoning categories. Staff further explained that the proposed development will consist of 125 single-family residential lots with two open space lots. Staff recommended additional recreational amenities on at least one of the open space lots. Commissioner Kristin Green expressed concern about taking the property off tax rolls and long-term infrastructure costs. Tom Juhn, representing Amalgamated Development, responded to concerns about the amenities by explaining that they felt passive recreation would be more appropriate due to the close proximity with the homes. Next, Fred Philips presented an overview of the project and discussed the enhanced architectural features of the development. A resident abutting the property inquired about the ownership of the new screening fence to which staff confirmed that the residents of the new subdivision will be responsible for maintenance of the screening fence. There being no one else present to speak, the public hearing was closed. A motion was made by Brent Daniels to recommend approval of the zone change request, seconded by Steve Byars. The motion passed by a vote of 5-1 with commissioner Kristin Green voting in opposition. ² OAKBEND DRIVE LI 1 inch = 355 feet MF1 LI LI SUBJECT PROPERTIES TA VIS RID M GE AL R LD IV E MF2 MF2 R6 LI R7.5 LI MF1 ZONING CASE NO. PUD-2014-01-01 NAME: AMALGAMATED DEVELOPMENT, L.P. PROPERTY LOCATION: TWO PARCELS TOTALING 26.325 ACRES, TRACT 1 LOCATED AT NORTHEAST CORNER OF OAKBEND DRIVE AND VISTA RIDGE MALL DRIVE AND TRACT 2 LOCATED ON THE SOUTH SIDE OF VISTA RIDGE MALL DRIVE AT THE SOUTHERN TERMINUS OF OAKBEND DRIVE; FURTHER IDENTIFIED AS LOT 5, BLOCK B, CAMPBELL RANCH ADDITION AND TRACT 5B OF THE G. WOOLSEY SURVEY, ABSTRACT 1402. CURRENT ZONING: LIGHT INDUSTRIAL (LI) PROPOSED ZONING: PLANNED UNIT DEVELOPMENT (PUD) IIPLEWISVILLE P2 Meeting: JCCM. etinS: case* U - z 13.—J1 - 02, . itma DO NOT WRITE AaOVE THIS UNE ECONOMIC DEVELOPMENT& PLANNING DIVISION APPLICATION FOR ZONE CHANGE OWNER/APPLICANT/AGENT INFORMATION SECTION ( OWNER( S) MUST SIGN OR SUBMIT LETTER(S) OF AUTHORIZATION) Hawkeye Realty Campbell Ranch, L. P. NAME OF PROPERTY OWNER: 4809 Cole Avenue, Suite 245, Dallas TX 75205 MALINGADDRESS: PHONE NUMBER: 2-. / -? 260 OWNER SIGNATURE: PRINTED NAME& TITLE( a i47 FA> NO.: i " iv file ru 14:)( IF ANY): 1 of 214- 9 4- 980 PRINTED NAME& TITLE( FAX NO.: Fred- Phi{ff i ): tl s- ti A, A„^ 4c 10/ 29/ 201,_ 3 hi vt p . n c. Id l So. 41/ 16301 Quorum Dr. Suite 200B, Addison, TX 75001 PRINTED NAME& TITLE( IFANV): LI E- MAL: [email protected] AX NO i AGENT SIGNATURE: s DATE: .. Thnmac J ihn PF / REQUESTED ZONING: 10/ 29/2013 Pre ident POD PROPERTY IDENTIFICATION( LOTS. BLOCKS. TRACTS. ABSTRACTS) TOTAL LAND AREA( ACRES) Tract 1 - 14. 62 ac. out of BBB& 26. 3 CRR Co Survey- ABS 1457, GC Woolsey Survey- ABS 1402. Tract 2- 11. 705 ac. out of GC Woolsey Survey- ABS 1402 On Vista Ridge Mall Dr. east of Oakbend Dr. ADDRESS AND LOCATION OF THE PARCEL(S): APPLICATION& SIGN FEES ( Please fill In appropriate blanks and enter total fee due) Less than 1/ 2 1/ 2 acre up to 4.99 acres 5 a of X 150.00 axle 5 acres up to 24.99 acres I QA j JBI Partners, Inc. IF Amy): 972- 738- 0226 PRESENT ZONING: Za&. fsDi87(c) gmail. com EMAIL: DATE: I REPRESENTING AGENT( PHONE NUMBER: 10/ 29/ 2013 p&,y t`??- APPLICANT SIGNATURE: MAILING ADDRESS: DATE: 1 '..‘'./ 5055 Keller Springs Road, Suite 545, Addison, TX 75001 MAILING ADDRESS: NAME OF 4: Amalgamated Development, L. P. NAME OF APPLICANT ( FILL IN gay, OTHER THAN OWNER): PHONE NUMBER: 6.% (J EMAIL: $ $ 25 up to 49.99 acres $ 750.00 250.00 50 acres up to 99.99 acres $ 1, 000.00 400.00 100 Zone Change Signs at$ 35 saes per sign 1 sign required for each 5 acres( maximum of 5 signs per site) TOTAL DUE $ 925 1, 500.00 acres and more I$ 175 0( LEWISVILLE PROPOSED USE ( Required to be filled out before submitting application) Fully describe the', reposed use(sl and alans for the Drmverty: Residential Subdivision Development NOTE: Items submitted by the submittal date does not guarantee placement on an agenda. Items must be deemed complete before they will be placed on an agenda. Economic Development& Planning 151 W. Church Street• P. Q. Box 299009 • Lewisville, Texas 75029- 9002 Tel: 972-219- 3455 • Fax: 972- 219- 3698 www. cityoflewisvilie.com SECTION 17-26. - "PUD" PLANNED UNIT DEVELOPMENT REGULATIONS (a) Purpose. The purpose of a planned unit development "PUD" is to accommodate planned associations of uses developed as integral land use units such as industrial parks or industrial districts, offices, commercial uses, service centers, shopping centers, residential developments of multiple or mixed housing, including multi-family dwellings, single family dwellings, townhouses or any appropriate combination of uses which may be planned, developed or operated as integral land use units whether by single owner or by a combination of owners. This zoning district shall be permitted for tracts of land not less than five (5) acres in area. (b) Procedure. The stages or procedure for a planned unit development shall be as follows: (1) The application for PUD zoning (Section 26.03). (2) The submission of a development plan (Section 26.04). (3) The submission of a project plan (Section 26.05). (c) Zoning of PUD districts. (1) Submission of application. Any person or corporation or group of persons having a proprietary interest in any property of five (5) acres or more, may file an application for PUD zoning. (2) Data to accompany application. The application for PUD zoning shall include a preliminary plat as well as the following: a. Metes and bounds description of the overall tract with topographic information necessary to project the natural terrain and environmental character of the site. b. A written description of the existing and allowable land use surrounding the proposed PUD district. c. A written description of planning assumptions and projections relating the PUD to the overall community growth and planning goals. d. A plan indicating location of major and secondary thoroughfares, as proposed within the city master thoroughfare plan. e. A categorical listing of the total acreage for each land use related to current zoning district designations or the specific purpose. The designated usage will not be assumed to establish the area requirements as established within the zoning district. All setbacks, height, and coverage will be determined by the approved final development plan. f. Indication by acreage or percentage of total development, all major areas planned for public or private common open space. g. All applications with gross land area of one hundred (100) acres or less shall submit a graphic plan of proposed land use. Applications with gross land area of more than one hundred (100) acres shall have the option of filing either a graphic plan or a perimeter plan indicating land use to a depth of three hundred (300) feet around the exterior of the total site. h. A written indication of the maximum number of residential dwelling units to be constructed within the total PUD district. (3) Staff review and recommendations. The technical staff shall, as soon as practical, issue a written report thereon to the planning commission, a copy of which shall be furnished to the applicant. (4) Planning commission hearing. The planning commission shall hold a public hearing on any application for PUD zoning district prior to making its recommendation to the city council in accordance with standard procedures for a change of zoning. (5) PUD open space policy. All open space shall be provided at a minimum ratio of .01 acres for each residential unit. For single family use, the open space may be calculated including front setback areas. Private ownership of these areas is permitted, subject to the following conditions: a. All private park areas shall have grounds and equipment maintained in an attractive manner comparable with the neighborhood. b. Private park areas must be committed to permanent open space by deed restrictions. LEWISVILLE ZONING ORDINANCE 76 (d) (e) Development plan. (1) Submission of development plan. After the granting of PUD zoning, and as the applicant desires to develop the PUD district, or any portion thereof, he shall submit a development plan to the city. If the applicant so desires, separate development plans may be submitted at separate times for portions or sub-areas of the PUD. (2) Contents. The development plan shall include a final plat as well as the following information: a. A description of the area or sub-area included in the development plan by dimensions and bearings on an accurate survey with topography grades of not more than two (2) feet. b. A general description of the surrounding area. c. Provisions for public or private streets, alleys, storm sewers, sanitary sewers, setbacks and utility easements. d. Percentage or acreage of project land uses either for the total area or sub-area consistent with the designated current zoning district categories or detailed land use as established in the zoning ordinance. e. Designation and location of open space for total site or sub-area. f. Maximum number and type of residential dwelling units to be constructed in said area or sub-area. g. Anticipated development schedule. h. Protective and restrictive covenants and homeowners' association charters, if any. i. In those instances where development plans are submitted for sub-areas, applicant shall demonstrate that composite projected land uses and maximum number of dwelling units approved in the PUD zoning have not been exceeded and that open space requirements are consistent with approved ordinance. (3) Staff review. Upon submission of a development plan for PUD or a sub-area thereof, the technical staff shall confer and consult with the applicant and may make recommendations to the land owner for amplification, deletion or modification thereof. After a full opportunity for consultation between applicant and the technical staff, the development plan shall be submitted to the planning commission which will make its recommendation to the city council. No advertised public hearing is required so long as both staff and city council believe there are no significant variances to the zoning requirements or restrictions as determined by section 26.03 of this ordinance. No notice to the adjacent land owners shall be given so long as both staff and the city council believe the specific uses designated by the PUD ordinance are not being substantially modified. Project plan. (1) Submission. After city council approval of the development of a planned unit development, the applicant shall submit a project plan showing or describing each project as it is to be built. No building permit shall be issued prior to approval of the project plan. (2) Contents. The project plan for each development shall include an engineering site plan as well as the following information: a. Detailed planned uses. b. Actual location of all buildings to be constructed indicating the governing setback lines, if any. c. Provisions for any additional public or private streets, alleys, or utility easements not previously reflected on appropriate development plan. d. Protective and restrictive covenants applicable to the project, if any. (3) Staff review. Upon submission of a project plan to the city, the technical staff shall confer with the applicant and may make recommendations to the land owner for amplification, deletion or modification thereof. After a full opportunity for consultation, the staff shall submit its recommendation to the planning commission for the project plan as submitted, or as may be modified, a copy of which shall be furnished to the applicant. LEWISVILLE ZONING ORDINANCE 77 SHADE STRUCTURE WITH BENCHES 5' WIDTH TRAIL LANDSCAPE PLANTING ORNAMENTAL TREES (TYPICAL) SIDEWALK PER CITY STANDARDS SHADE TREES (TYPICAL) PICNIC TABLE WITH GRILL AND TRASH CAN ORDINANCE NO. ______________ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LEWISVILLE, TEXAS AMENDING CHAPTER 6 (LAND DEVELOPMENT REGULATIONS) AND CHAPTER 17 (ZONING) OF THE LEWISVILLE CITY CODE; REZONING APPROXIMATELY 26.325 ACRES LOCATED IN LOT 5, BLOCK B OF THE CAMPBELL RANCH ADDITION AND TRACT 5B OF THE G. WOOLSEY SURVEY ABSTRACT 1402 FROM LIGHT INDUSTRIAL (LI) ZONING TO PLANNED UNIT DEVELOPMENT 1; CREATING THE REGULATIONS FOR PLANNED UNIT DEVELOPMENT 1; CORRECTING THE OFFICIAL ZONING MAP; PROVIDING SEVERABILITY, SAVINGS, AND REPEALING CLAUSES; PROVIDING A PENALTY FOR THE VIOLATION OF THIS ORDINANCE; AND DECLARING AN EMERGENCY. WHEREAS, the Planning and Zoning Commission of the City of Lewisville, Texas has recommended that the approximately 26.325 acre properties described in the attached Exhibit "A" (the “Property”) be rezoned from Light Industrial (LI) to Planned Unit Development 1; and WHEREAS, this application for rezoning comes before the City Council of the City of Lewisville, Texas (the “City Council”) after all legal notices, requirements, conditions and prerequisites have been met; and WHEREAS, the City Council at a public hearing has determined that this rezoning is consistent with the general purpose of the City’s Zoning Ordinance as set forth in Section 17-2 of the Lewisville Code of Ordinances; and WHEREAS, the City Council also finds that this rezoning helps promote the general health, safety, and welfare of its community; and ORDINANCE NO. ______________ Page 2 WHEREAS, the City Council further finds that it is in the best interest of the City of Lewisville (the “City”), its citizens, and the public at large to rezone the Property as set forth below. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LEWISVILLE, TEXAS, THAT: SECTION 1. Findings Incorporated. The findings set forth above are incorporated into the body of this Ordinance as if fully set forth herein. SECTION 2. Rezoning. Chapter 17 (Zoning) and Chapter 6 (Land Development Regulations) of the Lewisville City Code are hereby amended and the Property is hereby rezoned from Light Industrial (LI) to PLANNED UNIT DEVELOPMENT (PUD) 1 (the “District”). Development of the District and Property shall be subject to the conditions set forth in this Ordinance. Except as explicitly amended by this Ordinance, the development of the Property within this District must comply with the requirements of all ordinances, rules, and regulations of Lewisville, as they currently exist or may be amended. SECTION 3. Conceptual Plan. The Property shall be developed in compliance with the conceptual plan attached hereto as Exhibit B. If there is a conflict between the text of this Ordinance and the conceptual plan, the text of this Ordinance shall control. SECTION 4. Development Plan and Project Plan. A development plan and project plan as required by Section 17-26 of the Lewisville City Code must be approved by the City Council before any building permit can be issued to authorize work in this District. If there is a conflict between these plans and the text of this Ordinance, the order of precedence shall be as Planned Unit Development 1 ORDINANCE NO. ______________ Page 3 follows: (1) the text of this Ordinance; followed by (2) the project plan; followed by (3) the development plan; followed by (4) the conceptual plan. SECTION 5. Uses Permitted. The only uses permitted in this District are those uses permitted in the Estate Townhouse Residential Zoning District (“ETH Zoning District”), as set out in the City’s Zoning Ordinance, as amended. Such uses are also subject to the same conditions applicable in the ETH Zoning District. For example, a use permitted in the ETH Zoning District only by specific use permit is permitted in this District only by specific use permit. Uses may be further limited by required compliance with the conceptual plan, development plan, or project plan. SECTION 6. Yard, Lot, and Space Regulations. a) Front Yard. Minimum front yard setback is 15 feet, except Lot 4 in Block C shall have one front yard with a minimum setback of 10 feet as shown on Exhibit “B”, attached hereto. If the entry side of any garage faces a street, the minimum setback for that garage is 20 feet. b) Side Yard. Minimum side yard setback is 5 feet. c) Rear Yard. Minimum rear yard setback is 15 feet. d) Lot Area. Minimum lot area is 5,400 square feet. e) Lot Width. Minimum lot width is 50 feet at the front building line. For corner lots, minimum lot width is 20 feet at the front property line. f) Minimum Dwelling Size. Except as otherwise provided herein, the minimum floor area of homes in the District shall be 2,000 square feet, exclusive of garages Planned Unit Development 1 ORDINANCE NO. ______________ Page 4 and porches. Exception: 12 homes in the District may have a minimum floor area of 1,700 square feet, exclusive of garages and porches. g) Lot Coverage. Total lot coverage (the combined floor area of all structures on a lot) may not exceed 60 percent of the total lot area. h) Height. Maximum height is 35 feet. i) Stories. Maximum number of stories is 2.5. SECTION 7. Building Elements. a) Garages. (1) Lots may have front-entry garages. (2) Garage doors shall be clad in stained natural cedar or faux wood. (3) Detached garages are prohibited. b) Carports. Carports are prohibited. c) Design of Homes. The design and construction of homes in this District shall be similar in composition and architectural character to the elevations attached as Exhibit “C”. d) Driveways. Driveways shall be wholly constructed of either decorative pavers, exposed concrete aggregate, stained and stamped concrete, patterned saw cut concrete, or salt finished concrete. e) Construction Materials. (1) Roofing material used on homes within the District shall be a minimum 30-year dimensional shingle. Planned Unit Development 1 ORDINANCE NO. ______________ Page 5 (2) A minimum of 75% of all exterior walls of a structure and 100% of the front facade of a structure shall be brick, exclusive of doors, windows, trim and architectural features (ie. shutters, dormers, etc.). (3) Any side of a structure facing Oakbend Drive or Vista Ridge Mall Drive must be 100% brick or stone. f) Fences. (1) All homes shall have stained wood fences with metal posts that comply with the City’s fencing regulations in Section Chapter 4, Section 4-453 of the Lewisville City Code. (2) Lots backing up to the Open Space Areas described below shall have an ornamental wrought iron or tubular steel fence at the rear property line with a living, irrigated screen as illustrated in Exhibit “D”. g) Screening Walls. Where wooden screening walls are permitted by Article VII of the Lewisville City Code along the perimeter of the subdivision, such walls shall be interspersed with stone columns and be located as illustrated in Exhibit “E”. Where masonry screening walls are required by Article VII of the Lewisville City Code, they shall be a thin brick wall with brick columns interspersed with stone columns every 100 feet on center as illustrated and be located in Exhibit “E”. SECTION 8. Landscaping, Open Areas, and Common Areas. (a) Landscaping. Except as provided in this section, consult the landscaping regulations in Article VI of the Lewisville City Code for the specific landscaping Planned Unit Development 1 ORDINANCE NO. ______________ Page 6 requirements. All lots shall be fully sodded, landscaped, and irrigated. Landscaping shall be installed and maintained in accordance with the landscaping plan attached as Exhibit “F”. (b) Open Space Areas. There shall be two open space areas provided, one on the northern tract and the other on the southern tract. The open space area located on the northern tract shall comply with Exhibit “D” and shall contain ornamental trees, landscape plantings, shade trees, a five-foot wide paved meandering trail, picnic tables, benches, a pavilion, outdoor grill, and open space/turf area of approximately 0.721 acres. The open space area on the southern tract shall comply with Exhibit “D” and shall contain a shade structure with benches, shade trees, ornamental trees, landscape plantings, picnic table, a grill, a five-foot wide paved trail and open space/turf area of approximately 0.607 acres. Providing this open space shall not exempt the Property from park fees and/or any other development fees otherwise required by the Lewisville City Code. (c) Homeowner’s Association Required. A homeowner’s association (the “Association”) for the entire District shall be established and be responsible for the maintenance of all common areas, including but not limited to open space areas. The Association shall have the obligation to maintain the common areas to the same extent that the owners or occupants of individual lots have the obligation to maintain their lots and in accordance with all City of Lewisville ordinances. Planned Unit Development 1 ORDINANCE NO. ______________ Page 7 (d) Default of Home Owner’s Association. In the event the Home Owners Association consistently defaults on its obligation to maintain the Common Areas in compliance with the covenants or restrictions herein set forth and the City receives a petition from 100% of the property owners within the subdivision to assume the maintenance responsibility of the Common Areas, the City may choose to assume the maintenance responsibilities upon approval from the City Council. In such an event that the City agrees to assume the maintenance responsibilities, all Common area properties shall be dedicated to the City as public Rights-of-Ways, without having any obligation for a higher level of maintenance within the subdivision. Upon dedication of the Common Areas to the City, the City has the right to add or remove any appurtenances or structures that may impede the City’s ability to perform its maintenance obligations. The City shall have the right to assess the property owners for any incurred demolition costs. SECTION 9. Additional Provisions. (a) Maintenance. The Property must be properly maintained in a state of good repair and neat appearance. (b) Compliance with All Laws. Development and use of the Property must comply with all federal and state laws and regulations and with all ordinances, rules, and regulations of the City. Planned Unit Development 1 ORDINANCE NO. ______________ Page 8 (c) This Ordinance is not a Stand-Alone Document. Except as explicitly amended by this Ordinance, the development, operation, and maintenance of the Property and the District must comply with the requirements of all ordinances, rules, and regulations of Lewisville, as they currently exist or may be amended. Development rights, therefore, are determined by reading this Ordinance in conjunction with the Lewisville City Code, including but not limited to the Lewisville Zoning Code and Chapter 6 of the Lewisville City Code (Land Development Regulations). SECTION 10. Correction of the Zoning Map. The City Manager is hereby directed to correct the official zoning map of the City of Lewisville, Texas, to reflect this change in zoning. SECTION 11. Savings Clause. This Ordinance shall be cumulative of all other ordinances of the City of Lewisville, Texas, affecting zoning and shall not repeal any of the provisions of said ordinances, except in those instances where provisions of those ordinances which are in direct conflict with the provisions of this Ordinance. SECTION 12. Severability Clause. That the terms and provisions of this Ordinance shall be deemed to be severable and that if the validity of the zoning affecting any portion of the tract or tracts of land described in the attached Exhibit "A" shall be declared to be invalid, the same shall not affect the validity of the zoning of the balance of the tract or tracts of land described herein. SECTION 13. Penalty. Any person, firm or corporation who violates any provision of this Ordinance shall be deemed guilty of a misdemeanor and, upon conviction thereof in the Planned Unit Development 1 ORDINANCE NO. ______________ Page 9 Municipal Court, shall be subject to a fine of not more than $2,000.00 for each offense, and each and every day such offense is continued shall constitute a new and separate offense. SECTION 14. Emergency Declared. The fact that the present Zoning Ordinance and regulations of the City of Lewisville, Texas, are inadequate to properly safeguard the health, safety, peace and general welfare of the inhabitants of the City of Lewisville, Texas, creates an emergency for the immediate preservation of the public business, property, health, safety and general welfare of the public which requires that this Ordinance shall become effective from and after the date of its final passage, and it is accordingly so ordained. DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF LEWISVILLE, TEXAS, BY A VOTE OF _____ TO _____, ON THIS THE 17th DAY OF MARCH, 2014. APPROVED: ____________________________________ Dean Ueckert, MAYOR ATTEST: __________________________________________ Julie Heinze, CITY SECRETARY APPROVED AS TO FORM: __________________________________________ Lizbeth Plaster, CITY ATTORNEY Planned Unit Development 1 Attachment to Ordinance # ________________________________ Exhibit "A" Page 1 of 2 LEGAL DESCRIPTION TRACT 1 BEING a parcel of land located in the City of Lewisville, Denton County, Texas, a part of the B. B. B. & C. R. R. CO. Survey, Abstract No. 1457, a part of the G. C. Woolsey Survey, Abstract No. 1402, being all of Lot 5, Block B of Campbell Ranch Addition, an addition to the City of Lewisville as recorded in Cabinet U, Page 777, Denton County Plat Records, and being further described as follows: BEGINNING at the southeast corner of said Lot 5, said point being the southwest corner of Lot 5BR- 1, Block A, Phase 4 of Vista Ridge Square, an addition to the City of Lewisville as recorded in Cabinet R, Page 87, Denton County Plat Records, and said point being in the north line of Vista Ridge Mall Drive ( a variable width right-of-way) as recorded in Cabinet 0, Page 192, Denton County Plat Records; THENCE with the south line of said Lot 5 and the north line of said Vista Ridge Mall Drive as follows: South 63 degrees 22 minutes 08 seconds West, 398.01 feet to a point for corner; South 70 degrees 44 minutes 17 seconds West, 93. 56 feet to a point for corner; South 63 degrees 22 minutes 08 seconds West, 90. 13 feet to a point for corner; North 71 degrees 37 minutes 52 seconds West, 21. 21 feet to the southwest corner of said Lot 5, said point being in the east line of Oakbend Drive (a variable width right-of-way), as recorded in Cabinet U, Page 777, Denton County Plat Records; THENCE along the west line of said Lot 5 and the east line of said Oakbend Drive as follows: North 26 degrees 37 minutes 52 seconds West, 23. 01 feet to a point for corner; Northwesterly, 440.56 feet along a curve to the right having a central angle of 26 degrees 01 minutes 22 seconds, a radius of 970.00 feet, a tangent of 224. 14 feet, whose chord bears North 13 degrees 37 minutes 11 seconds West, 436. 78 feet to a point for corner; North 00 degrees 36 minutes 30 seconds West, 634. 10 feet to the northwest corner of said Lot 5, said point being the southwest corner of Lot 4, said Block B; THENCE North 89 degrees 23 minutes 30 seconds East, 661. 03 feet to the northeast corner of said Lot 5, said point being the southeast corner of said Lot 4 and said point being in the west line of said Lot 5BR- 1; THENCE along the east line of said Lot 5 and the west line of said Lot 5BR- 1 as follows: South 00 degrees 28 minutes 13 seconds East, 477. 96 feet to a point for corner; South 00 degrees 02 minutes 01 seconds West, 365. 21 feet to the POINT OF BEGINNING and containing 636, 860 square feet or 14. 620 acres of land. Attachment to Ordinance # ________________________________ Exhibit "A" Page 2 of 2 LEGAL DESCRIPTION TRACT 2 BEING a parcel of land located in the City of Lewisville, Denton County, Texas, a part of the G. C. Woolsey Survey, Abstract No. 1402, being a part of that called 848. 2300 acre tract of land described in a special warranty deed from Robert Payne, et al, to Hawkeye Realty Campbell Ranch, L. P., as recorded in Instrument No. 2008-72709, Denton County Deed Records, and being further described as follows: BEGINNING at the northwest corner of Lot 2R- 1, Block A, of Club Ridge Addition, an addition to the City of Lewisville as recorded in Cabinet P, Page 107, Denton County Plat Records, said point also being the northwest corner of Vista Ridge Condominiums, as recorded in Instrument No. 2007- 13790, Denton County Deed Records, and said point being in the south line of Vista Ridge Mall Drive (a variable width right- of-way) as recorded in Cabinet 0, Page 192, Denton County Plat Records; THENCE South 00 degrees 02 minutes 22 seconds West, 342. 40 feet to the southwest corner of said Lot 2R- 1, said point being the southwest corner of said Vista Ridge Condominiums, said point also being the northwest corner Vista Ridge Estates, an addition to the City of Lewisville as recorded in Cabinet L, Page 293, Denton County Plat Records; THENCE South 00 degrees 00 minutes 24 seconds West, 610.26 feet with the west line of said Vista Ridge Estates to the northeast corner of Lot 1, Block A of Broadstone Vista Ridge Addition, an addition to the City of Lewisville as recorded in Cabinet W, Page 375, Denton County Plat Records; THENCE with the north line of said Lot 1 as follows: North 89 degrees 58 minutes 55 seconds West, 350.45 feet to a point for corner; North 54 degrees 52 minutes 37 seconds West, 330.51 feet to a point for corner; North 26 degrees 42 minutes 40 seconds West, 403. 12 feet to a point in the south line of said Vista Ridge Mall Drive; THENCE North 63 degrees 22 minutes 08 seconds East, 897. 50 feet to the POINT OF BEGINNING and containing 509, 872 square feet or 11. 705 acres of land. Attachment to Ordinance # ________________________________ Exhibit "B" Page 1 of 1 Attachment to Ordinance # ________________________________ Exhibit "C" Page 1 of 5 Attachment to Ordinance # ________________________________ Exhibit "C" Page 2 of 5 Attachment to Ordinance # ________________________________ Exhibit "C" Page 3 of 5 Attachment to Ordinance # ________________________________ Exhibit "C" Page 4 of 5 Attachment to Ordinance # ________________________________ Exhibit "C" Page 5 of 5 Attachment to Ordinance # ________________________________ Exhibit "D" Page 1 of 1 SHADE STRUCTURE WITH BENCHES 5' WIDTH TRAIL LANDSCAPE PLANTING ORNAMENTAL TREES (TYPICAL) SIDEWALK PER CITY STANDARDS SHADE TREES (TYPICAL) PICNIC TABLE WITH GRILL AND TRASH CAN Attachment to Ordinance # ________________________________ Exhibit "E" Page 1 of 2 Attachment to Ordinance # ________________________________ Exhibit "E" Page 2 of 2 Attachment to Ordinance # ________________________________ Exhibit "F" Page 1 of 1 MEMORANDUM TO: Claude King, City Manager FROM: Brenda Martin, Director of Finance DATE: March 12, 2014 SUBJECT: Public Hearing: Consideration of the Service and Assessment Plan and Assessment Roll for Lewisville Castle Hills Public Improvement District (PID) No. 5. BACKGROUND The creation of PID No. 5 began with petitions being filed on March 21, 2013 by BRECO Lands CH, LLC requesting the establishment of PIDs No. 5, 6 and 7. At the March 25, 2013 City Council meeting, the three petitions were accepted and a public hearing was called for May 6, 2013 relating to the advisability of the proposed improvements. The improvements in all three of the districts include the acquisition, construction and improvement of water, wastewater or drainage facilities and the acquisition and construction of streets. On May 6, 2013, City Council approved the resolution making certain findings in connection with the Districts and authorizing creation of the Districts. ANALYSIS On March 3, 2014, City Council approved a resolution calling for a public hearing for this meeting on March 17, 2014 to consider, approve and adopt the Service and Assessment Plan and Assessment Roll and any official reports filed with the City in support of the Plan and Roll. As required by statue, the Plan and Roll was filed with the City Secretary and made available for public inspection. Notice of the public hearing was published as required. The Service and Assessment Plan identifies the public improvements to be provided by the PID, the cost of the public improvements, the indebtedness to be incurred for the public improvements, and the manner of assessing the property in the PID for the costs of the public improvements. The Assessment Roll identifies the assessment on each parcel, based on the method of assessment identified in the Plan. Revisions to the plan are currently pending the Attorney General’s opinion. RECOMMENDATION It is City staff’s recommendation that the City Council open and continue the public hearing until April 7, 2014. MEMORANDUM TO: Claude King, City Manager FROM: Brenda Martin, Director of Finance DATE: March 12, 2014 SUBJECT: Public Hearing: Consideration of the Service and Assessment Plan and Assessment Roll for Lewisville Castle Hills Public Improvement District (PID) No. 7. BACKGROUND The creation of PID No. 7 began with petitions being filed on March 21, 2013 by BRECO Lands CH, LLC requesting the establishment of PIDs No. 5, 6 and 7. At the March 25, 2013 City Council meeting, the three petitions were accepted and a public hearing was called for May 6, 2013 relating to the advisability of the proposed improvements. The improvements in all three of the districts include the acquisition, construction and improvement of water, wastewater or drainage facilities and the acquisition and construction of streets. On May 6, 2013, City Council approved the resolution making certain findings in connection with the Districts and authorizing creation of the Districts. ANALYSIS On March 3, 2014, City Council approved a resolution calling for a public hearing for this meeting on March 17, 2014 to consider, approve and adopt the Service and Assessment Plan and Assessment Roll and any official reports filed with the City in support of the Plan and Roll. As required by statue, the Plan and Roll was filed with the City Secretary and made available for public inspection. Notice of the public hearing was published as required. The Service and Assessment Plan identifies the public improvements to be provided by the PID, the cost of the public improvements, the indebtedness to be incurred for the public improvements, and the manner of assessing the property in the PID for the costs of the public improvements. The Assessment Roll identifies the assessment on each parcel, based on the method of assessment identified in the Plan. Revisions to the plan are currently pending the Attorney General’s opinion. RECOMMENDATION It is City staff’s recommendation that the City Council open and continue the public hearing until April 7, 2014. MEMORANDUM TO: Claude King, City Manager FROM: Brenda Martin, Director of Finance DATE: March 8, 2014 SUBJECT: Acceptance of the Fiscal Year 2013 Comprehensive Annual Financial Report (CAFR). BACKGROUND The independent annual audit of the City's financial statements is complete. The 2013 Comprehensive Annual Financial Report (CAFR) is provided in compliance with the City Council's Finance Policy Statement 3.0 Section I. The report includes the auditor's opinion statement regarding the financial statement presentation. Enclosed additionally is the Single Audit Report on Federal Financial Assistance. The auditor's opinion statement is on page 13-15 of the CAFR and states that in their opinion the financial statements present fairly, in all material respects, the respective financial position of the government activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City as of September 30, 2013 in conformity with accounting principles generally accepted in the United States of America. ANALYSIS Highlights of the CAFR are as follows: Overall, the City’s net position (assets less liabilities) increased by $5,883,965 to a total net position of $583,277,351 at the close of the fiscal year ending September 30, 2013. Of this amount, $69,232,104 is unrestricted net position and may be used to meet the City’s ongoing obligations to citizens and creditors. In the General Fund, total fund balance increased from the prior year balance by $418,431 mainly due to an increase in sales tax collections netted with increased transfers out to construction related projects. Revenues exceeded budget by $4,107,728 primarily due to the aforementioned sales tax and property tax revenues being favorable to budget by $2,907,142 and Licenses and Permits revenue by $747,586. Total expenditures in the General Fund were below budget. The General Fund unrestricted, unassigned fund balance decreased slightly from $30,615,982 to $30,571,006. Acceptance of Comprehensive Annual Financial Report: March 8, 2014 Page 2 of 2 The City's Water and Sewer Fund net position of $223,637,033 increased $5,000,548 over the prior year net position balance. The increase is primarily due to operating revenues and dedicated infrastructure improvements continuing to remain well above operating expenses. RECOMMENDATION It is City staff’s recommendation that the City Council accept the Fiscal Year 2013 Comprehensive Annual Financial Report (CAFR). CITY OF LEWISVILLE, TEXAS 151 W. Church Street Lewisville, Texas 75029 972-219-3400 COMPREHENSIVE ANNUAL FINANCIAL REPORT for the period ending September 30, 2013 CITY OF LEWISVILLE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT for the fiscal year ended September 30, 2013 Prepared by the FINANCE DEPARTMENT CITY OF LEWISVILLE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 TABLE OF CONTENTS Exhibit/ Table Page INTRODUCTORY SECTION Letter of Transmittal ........................................................................................................................1 GFOA Certificate of Achievement ..................................................................................................9 Organizational Chart ......................................................................................................................10 List of Principal Officers ...............................................................................................................11 Area Map .......................................................................................................................................12 FINANCIAL SECTION Independent Auditor’s Report........................................................................................................13 Management’s Discussion and Analysis .......................................................................................16 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position ............................................................................1....................28 Statement of Activities .................................................................................2....................29 Fund Financial Statements: Balance Sheet – Governmental Funds .........................................................3....................31 Reconciliation of the Governmental Funds Balance Sheet to the Government-wide Statement of Net Position .................................4....................32 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ..............................................................5....................33 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Government-wide Statement of Activities................................................6....................34 Statement of Net Position – Proprietary Funds............................................7....................35 Reconciliation of the Enterprise Fund Statement of Net Position to the Government-wide Statement of Net Position ................................8....................37 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds ......................................................................................9....................38 Reconciliation of the Statement of Revenues, Expenses and Changes in Fund Net Position of the Enterprise Fund to the Government-wide Statement of Activities..............................................10....................39 Statement of Cash Flows – Proprietary Funds ...........................................11....................40 Statement of Fiduciary Net Position – Fiduciary Funds ............................12....................42 Statement of Changes in Fiduciary Net Position .......................................13....................43 Statement of Net Position (Deficit) - Discretely Presented Component Units ....................................................................................14....................44 Statement of Activities - Discretely Presented Component Units .............15....................45 Notes to the Financial Statements ............................................................................................46 i CITY OF LEWISVILLE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 TABLE OF CONTENTS Exhibit/ Table Page Required Supplementary Information: Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual – General Fund .................... A-1....................81 Notes to Required Supplementary Information ............................................ A-2....................82 Combining and Individual Fund Statements and Schedules: Major Governmental Funds: Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual – Debt Service Fund.......B-1....................84 Non-Major Governmental Funds: Combining Balance Sheet – Non-Major Governmental Funds ...............C-1....................87 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Non-Major Governmental Funds ..........................C-2....................89 Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual - Hotel/Motel Tax Special Revenue Fund...........................................................................C-3....................91 Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual – Recreation Activity Special Revenue Fund ............................................................C-4....................92 Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual – Grant Special Revenue Fund ................................................................C-5....................93 Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual – Public Improvement District Tax Special Revenue Fund.....................C-6....................94 Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual – Municipal Court Security Special Revenue Fund .................................C-7....................95 Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual – Municipal Court Technology Special Revenue Fund ...........................C-8....................96 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget (GAAP Basis) and Actual – Police Asset Forfeiture Special Revenue Fund..........................................................C-9....................97 Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual – Fire and Police Training Special Revenue Fund ..........................................................C-10....................98 Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual – Law Enforcement Officer Standards and Education Special Revenue Fund ...................C-11....................99 Schedule of Revenues, Expenditures, and Changes in Fund ii CITY OF LEWISVILLE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 TABLE OF CONTENTS Exhibit/ Table Page Balances-Budget (GAAP Basis) and Actual – Donations Special Revenue Fund .....................................................................................C-12..................100 Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual – Police Federal Forfeiture Special Revenue Fund.......................................................C-13..................101 Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual – Juvenile Case Manager Special Revenue Fund .........................................................C-14..................102 Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual – PEG Programming Special Revenue Fund.........................................................................C-15..................103 Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual – Crime Control And Prevention District Fund .............................................................C-16..................104 Schedule of Revenues, Expenditures, and Changes in Fund Balances-Budget (GAAP Basis) and Actual – Fire Control, Prevention, and Emergency Medical Services District Fund .............C-17..................105 Internal Service Funds: Combining Statement of Net Position – Internal Service Funds ......................................................................... D-1..................107 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position –Internal Service Funds ......................................... D-2..................108 Combining Statement of Cash Flows –Internal Service Funds .............. D-3..................109 Discretely Presented Component Units: Balance Sheet- Lewisville Parks and Library Development CorporationE-1 .................110 Reconciliation of Fund Balance to Net Position – Lewisville Parks and Library Development Corporation ....................................... E-2..................111 Statement of Revenues, Expenditures and Changes in Fund Balance – Lewisville Parks and Library Development Corporation ..................... E-3..................112 Reconciliation of Changes in Fund Balance to the Change in Net Position in the Statement of Activities – Lewisville Parks and Library Development Corporation ................................................. E-4..................113 iii CITY OF LEWISVILLE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 TABLE OF CONTENTS Exhibit/ Table Page Balance Sheet- Tax Increment Reinvestment Zone (Old Town) ............. E-5..................114 Reconciliation of Fund Balance to Net Position - Tax Increment Reinvestment Zone (Old Town) ........................................................... E-6..................115 Statement of Revenues, Expenditures and Changes in Fund Balance Tax Increment Reinvestment Zone (Old Town) ................................... E-7..................116 Reconciliation of Changes in Fund Balance to the Change in Net Position in the Statement of Activities – Tax Increment Reinvestment Zone (Old Town) ........................................................... E-8..................117 STATISTICAL SECTION (UNAUDITED) Contents of the Statistical Section ...............................................................................................118 Net Position by Component .................................................................... Table 1..................119 Changes in Net Position .......................................................................... Table 2..................121 Fund Balances, Governmental Funds ..................................................... Table 3..................125 Changes in Fund Balances, Governmental Funds .................................. Table 4..................127 Assessed Value and Estimated Actual Value of Taxable Property ........ Table 5..................129 Direct and Overlapping Property Tax Rates .......................................... Table 6..................130 Principal Property Taxpayers .................................................................. Table 7..................131 Property Tax Levies and Collections ...................................................... Table 8..................132 Gross Sales by Category ......................................................................... Table 9..................133 Direct and Overlapping Sales Tax Rates .............................................. Table 10..................135 Principal Sales Tax Payers .................................................................... Table 11..................136 Combined Schedule of Bonds ............................................................... Table 12..................138 Ratio of Outstanding Debt by Type ...................................................... Table 13..................140 Ratio of Net General Bonded Debt Outstanding .................................. Table 14..................141 Direct and Overlapping Governmental Activities Debt ....................... Table 15..................142 Pledged-Revenue Coverage .................................................................. Table 16..................143 Demographic and Economic Statistics ................................................. Table 17..................144 Principal Employers .............................................................................. Table 18..................145 Full-Time Equivalent City Government Employees by Function/Program .............................................................................. Table 19..................146 Operating Indicators by Function/Program .......................................... Table 20..................147 Capital Asset Statistics by Function/Program....................................... Table 21..................149 iv INTRODUCTORY SECTION March 14, 2014 To the Honorable Mayor, Members of the City Council, and Citizens of the City of Lewisville, Texas: The Comprehensive Annual Financial Report (CAFR) of the City of Lewisville, Texas, for the year ended September 30, 2013, is submitted herewith. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the City, on a Government-wide and Fund basis. All disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the City’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with accounting principles generally accepted in the United States of America. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. We believe the data, as presented, is accurate in all material aspects, that it is presented in a manner to fairly represent the financial position and results of operations of the City and that all disclosures necessary to enable the reader to gain the maximum understanding of the City’s financial affairs have been included. The CAFR for the year ended September 30, 2013, is prepared in accordance with generally accepted accounting principles (GAAP) and in conformance with standards of financial reporting established by the Governmental Accounting Standards Board (GASB) using guidelines recommended by the Government Finance Officers Association of the United States and Canada (GFOA). Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. City of Lewisville ● Finance Department 151 W. Church Street ● Lewisville, TX 75057 972.219.3420 ● [F] 972.219.3414 www.cityoflewisville.com 1 GENERAL INFORMATION – CITY OF LEWISVILLE The City of Lewisville is geographically located north of the hub of the ten-county metropolitan area containing Dallas and Fort Worth, Texas. The City is characterized as a predominantly suburban residential community situated in the growth corridor linking the Dallas/Fort Worth International Airport (Tarrant County) through Lewisville (Denton County) to cities in east Collin County. Lewisville shares the metroplex economy based primarily on commerce, tourism, manufacturing, and finance. The City of Lewisville was incorporated in 1925. The current charter was adopted in 1963 and amended as recently as September 2004. Lewisville is a home-rule city and operates under the Council-Manager form of government. The City Council is comprised of the Mayor and five members and is responsible for enacting ordinances, resolutions and regulations governing the City. In addition, the City Council appoints the members of various boards and commissions, the City Manager, City Attorney, City Judge, and City Secretary. As chief administrative officer, the City Manager is responsible for implementing Council policies, overseeing municipal operations, and appointing and supervising the various department directors. The City provides the full range of municipal services as authorized by statute or charter. This includes public safety (police and fire), streets, water and sewer utilities, sanitation, health and social services, parks and leisure services, public improvements, community development with planning and zoning, tourism and general administrative services. In addition, the City of Lewisville has organizations called component units. Component units are legally separate organizations for which the elected officials of the City of Lewisville are financially accountable. At September 30, 2013, the component units for the City of Lewisville are: Lewisville Housing Finance Corporation Lewisville Industrial Development Authority, Inc. Lewisville Parks and Library Development Corporation Tax Increment Reinvestment Zone Number 1, City of Lewisville, Texas (also known as Old Town TIF) Tax Increment Reinvestment Zone Number 2, City of Lewisville, Texas City of Lewisville Health Benefit Trust Lewisville Local Government Corporation Lewisville Crime Control and Prevention District Lewisville Fire Control, Prevention, and Medical Services District ECONOMIC CONDITIONS AND OUTLOOK The City of Lewisville continues to experience positive annual population growth. Since 2000, Lewisville’s population has increased 27.9% from 77,737 to an estimated 99,453 in 2013. Estimates are for residential population to be approximately 111,000 at the time of build-out around 2030. 2 With Lewisville’s continued pro-business policies, the City maintains its economic prosperity. Highlights include: Majestic Airport Center is a 160-acre, master-planned business park that will total more than 3 million square feet of Class A warehouse and distribution facilities in seven buildings. Phase I is complete, which includes DFW’s first 1 million square foot speculative industrial building. Kellogg relocated their southwest regional distribution facility to Majestic Airport Center, occupying 1 million square feet and creating 300 new jobs. Jafra Cosmetics and Cabin Innovations currently occupy the development, taking advantage of the Foreign Trade Zones and Triple Freeport exemption in place. Hagemeyer North America Inc, Sonexus Health, and Ranger Air Aviation are the newest additions to the Majestic Airport Center. Planning is underway for a fifth building on approximately 60 acres and a new 1 million square foot warehouse/flex space facility is currently under construction. Valley Parkway Distribution Center, a 500,000 square foot warehouse and distribution facility, located at the corner of Valley Parkway and Ace Lane was completed in 2013. At Lewisville West shopping center, Birmingham Management began their five million dollar revitalization of the center. Prime Controls expanded their operations to a new 85,000 square foot facility in Waters Ridge, moving 150 employees. A#1 Air located their new headquarters in the 64,000 square foot facility formerly known as McKesson. IPeople expanded to a 15,000 square foot building, growing to 75 employees. The City of Lewisville continues to revitalize Old Town Lewisville. The Old Town Tax Increment Reinvestment Zone was created in December 2001, with participation between the City and Denton County. Tax increment revenues from the Zone will be used to finance infrastructure improvements and public facilities to stimulate revitalization of Old Town. Projects to date include parking improvements, wayfinding, infrastructure needs studies, sidewalk enhancements, beautification projects, and the Medical Center of Lewisville Grand Theater (MCL Grand Theater). Uptown Village, a new townhome project, broke ground in Old Town in 2013. The project will have 68 new townhome units and an amenity center with price ranges from $160,000 to $180,000. New mixed use projects, including residential units, are anticipated to be constructed in the zone in the next few years. The Zone will expire in 2028. Additionally, the below items are worth noting: o Immediately east of the MCL Grand Theater and across from City Hall, a public park is under construction. The park space will include a great lawn for events, projection water wall, pop-up water fountains, playground, and a history walk. The project is estimated to be complete in July 2014. 3 o Streetscape improvements along the Main and Mill Streets corridors were approved for regional grant funding. This project will create pedestrian and bike amenities to encourage walking and biking to the DCTA rail station in Old Town Lewisville. The design contract has been awarded and construction is anticipated to begin in 8 months. MAJOR INITIATIVES Tax Increment Reinvestment Zone Number 2—This zone was created in October 2008, with participation between the City and Denton County. Tax increment revenues from the Zone will be used to finance infrastructure improvements for a 427 acre mixed-use development. The development, also known as Hebron 121 Station, is at the northeast corner of I-35E and SH-121 Tollway. The project will consist of urban residential, retail, recreation, and entertainment uses. The Denton County Transit Authority (DCTA) A-Train Station was completed in June 2011. The first phase of Hebron 121 Station, a multifamily project, has 150 fully leased units. An additional 452 units and a large amenity center are under construction. The City has started the design for a bridge over Timber Creek to connect the project to the I-35E frontage road. The Zone will expire in 2038. Metropolitan Transit System— DCTA has worked since its formation in 2001 to connect Lewisville to the DFW commuter rail network. Lewisville was one of three cities in which voters approved funding the DCTA through a half-cent sales tax in September of 2003. The DCTA network, called the A-train, has been operational since June of 2011. Lewisville has completed master plans for the areas surrounding each of these three stations. The most notable plan, the Lake Lewisville Master Plan, was recognized by the Urban Land Institute in 2009, due in large part to its unique combination of lake frontage, commuter rail, and adjacency to an interstate highway. Wynne Jackson has completed a consolidated plan for the property and has exercised their right to be retained as the master developer for the six month period ending April 2014. Other Major Roadway Projects—Interstate Highway 35E is scheduled to be widened from 10 to 16 lanes between I-635 and US Highway 380. The expansion will include free lanes, managed/tolled lanes, and additional new frontage lanes. The State of Texas continues to identify funding and has begun purchasing right-of-way for the expansion. The City is completing a two year project for a Corridor Redevelopment Plan to guide public improvements, private developments, business retention, and new business recruitment along the corridor. An extension of the plan, the I-35E Branding Plan, was developed to create aesthetic treatments and non-vehicular travel options at highly visible overpasses and underpasses. Brownfield Development— Lewisville has implemented a Brownfield Assessment Program, funded by a $400,000 grant from the U.S. Environmental Protection Agency, to help plan for and initiate redevelopment. Revitalizing older areas with existing hazardous or petroleum related uses typically involves overcoming environmental challenges. The program is designed to address these issues, and has been integrated with the redevelopment planning initiatives in Old Town and along the I-35E corridor. 4 To date, eleven Phase I and ten Phase II environmental site assessments have been funded through the grant in addition to cleanup planning for three sites. Investigation efforts have facilitated the redevelopment of the Old Orchard Shopping Center and accelerated evaluation of the K & W Auto Supply property, which was found to have leaking underground petroleum storage tanks. The program has also funded evaluation of the Lewisville Shopping Center and the Feed Mill, both of which are considered catalysts for the revitalization of Old Town. The grant for this program expires in early 2014, and the city has applied for a subsequent grant to continue Brownfield assessments. Residential Growth— During the year, 190 building permits were issued for single-family residences and 36 for multi-family buildings totaling 936 units. Of particular interest: o Aura in Castle Hills provides for 316 apartment units at the northeast corner of State Highway 121 and FM 544. The Castle Hills Golf Course Villas propose 44 single family units. o Settler’s Village Phase II is a development by Ashton Woods Homes and will consist of over 230 upscale two and three story townhomes. The development is located south of FM 3040 between Rockbrook Drive and MacArthur Boulevard. o Brookside is a development located on the west side of SH 121 along Southwest Parkway. When completed, Brookside will have 40 new single family detached homes. o The final units of the Brownstones at Vista Ridge, a 105 unit townhome development, are being completed along Rockbrook Drive. o Construction has begun on the Manors at Vista Ridge for a 75 unit townhome development on the southeast corner of MacArthur Boulevard and Vista Ridge Mall Drive. o The Preserve at Vista Ridge broke ground recently on a 27 unit townhome development on Old Denton Road near Highland Drive. FINANCIAL INFORMATION Financial Policies—The City of Lewisville has adopted (with City Council approval) formal written financial policies and administrative directives. These include, among others, policies and directives for Audit, Revenue Management, Expenditure Control, Financial Reserve/Fund Balance Levels, Debt Management, Post Issuance Compliance for Tax-Exempt Obligations, Investments, and Budget Transfers. Policies are reviewed and amended regularly. Accounting Procedures and Budgetary Controls—The City’s accounting records for general governmental funds are maintained on a modified accrual basis, with revenues being recorded when available and measurable, and expenditures being recorded when the services or goods are received and the liabilities are incurred. Accounting records for the City’s water and sewer utility and other proprietary activities are maintained on the accrual basis. 5 The legal level of budgetary control is at the fund level. Budgetary control is maintained at the fund level with encumbrances entered at the time a purchase requisition is approved. Open encumbrances are recorded as assignments of fund balance as of September 30 of each year, and the subsequent year’s budget is increased in December or January of each year to reflect these carried-forward encumbrances. Unspent and unencumbered appropriations lapse at the end of the fiscal year. The budgetary process begins each year with the preparation of both current and proposed year revenue and expenditure estimates by the City’s financial management staff with input from each City department. Budgets are reviewed by the City Manager who then makes final decisions and submits a recommended budget to the City Council. The proposed budget is reviewed extensively by the City Council, a process that includes a Charter-mandated public hearing, in addition to a work session, which is open to the public. The City Charter requires adoption of the City budget prior to the beginning of the fiscal year. While the budget is developed and controlled at the departmental level, appropriations are made at the fund level. An ordinance establishes the budget for operating expenditures, debt service payments and use of reserves, while a separate ordinance establishes the property tax rate. As part of each year’s budget development process, departments are required to update revenue and expenditure estimates for the current fiscal year. These estimates are reviewed by the Budget and Research Director, the City Manager, and the City Council concurrent with review of the proposed budget. This re-estimated budget may require a supplemental appropriation and, if so, such supplemental appropriation is approved by ordinance adopted by the City Council prior to the end of the current fiscal year. During the course of the fiscal year, expenditure controls are maintained by each department director with overall review exercised by the Budget and Research Director and the City Manager. Monthly revenue and departmental expenditure reports are generated by an automated management accounting system and provide expenditure totals and encumbrances at the lineitem level for the most recently completed month, as well as a year-to-date total, and an actual versus planned rate of expenditure. Major expenditure requests are reviewed by the Budget and Research Director prior to the encumbrance of funds. Constant review of revenue and expenditure trends is maintained with specific responsibility assigned to the Budget and Research Director. Recommendations for corrective action are made to the City Manager (and to the City Council, if appropriate) as needed to ensure the integrity of the adopted budget. Tax Rates—All eligible property within the City is subject to assessment, levy, and collection by the City of a continuing, direct ad valorem tax sufficient to provide for the payment of principal and interest on outstanding bonds within the limits prescribed by law, and the payment of operation and maintenance costs as approved by the City Council. Under State law and provisions of the City Charter, the City is limited to a maximum tax rate of $2.50 per $100 assessed valuation. As shown below, the tax rate adopted by the City Council has historically been substantially lower than the maximum provided by law. 6 The allocation of the property tax levy by purpose (General Fund operations and Debt Service) for fiscal year 2013-14 and the preceding five fiscal years is reflected in the following table: Purpose 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 General Fund Debt Service Fund 0.32289 0.11732 0.32289 0.11732 0.32289 0.11732 0.32289 0.11732 0.32156 0.11865 0.32156 0.11865 Total Tax Rate 0.44021 0.44021 0.44021 0.44021 0.44021 0.44021 Tax Appraisal/Collection Responsibilities—Under Texas law enacted in 1979 and subsequent revisions to the State Property Tax Code, the appraised value of taxable property in Lewisville is established by the Central Appraisal District of the county in which the property exists. The City of Lewisville’s jurisdiction is predominately in Denton County, but also extends into Dallas County. Therefore, both the Denton Central Appraisal District and the Dallas Central Appraisal District provide values based upon county lines. The City of Lewisville and other taxing jurisdictions in the counties provide a pro rata share of the budgeted expenditures incurred by the respective appraisal district based upon individual levy. In fiscal year 2012-13, the City’s payments to the districts for appraisal services were $237,586, a decrease of $1,615, or 0.7%, from the amount paid by the City in 2011-12. Since October 1997, the City has contracted with Denton County for tax collection services. The 2012-13 cost was $19,972. Long-Term Financial Planning—The City prepares a series of multi-year financial plans and forecasts that enable the City to reasonably predict future impacts on the government’s financial position. For its two largest funds, the General Fund and the Water and Sewer Utility Fund, a five-year financial plan is prepared in addition to a five-year street and drainage program and a five-year water and sewer capital improvement project plan. In the age of rapid technological advances, a five-year strategic technology plan is prepared as well. Debt Administration—Two ratios traditionally used to analyze the debt structure of municipalities are presented below. Revenue debt has been excluded since service and user charges made by utility system customers are used to retire such debt and no ad valorem tax proceeds are used for utility revenue bond debt service. Outstanding General Obligation and Certificate of Obligation Debt at 9-30-13 (Net of Debt Service) Estimated Population General Debt per Capita Net General Debt per Assessed Value $101,852,114 99,453 $1,024 1.57% The City’s underlying bond ratings at September 30, 2013 were as follows: Standard & Poor’s Fitch Ratings General Obligation AAA AAA 7 Revenue AAA AAA OTHER INFORMATION Independent Audit—According to Section 34 of the City Charter of the City of Lewisville, an annual independent audit is required to be made of the financial records of the City by a Public Accountant or Certified Public Accountant selected by the City Council. The City of Lewisville has engaged the firm of Weaver, L.L.P. and the opinion is included in this report. It should be noted that the auditors included all funds in their audit, performed their audit in accordance with generally accepted auditing standards, and stated that, in their opinion, the statements herein present fairly, in all material respects, the financial position of the City at September 30, 2013, and the changes in financial position and cash flows, where applicable, for the year then ended in conformity with generally accepted accounting principles. Certificate of Achievement—The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Lewisville for its Comprehensive Annual Financial Report for the Fiscal Year ended September 30, 2012. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City of Lewisville has received a Certificate of Achievement for the last 24 consecutive years (fiscal years ended 19892012). We believe our current report continues to conform to the Certificate of Achievement Program requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgements—The preparation of this report on a timely basis could not be accomplished without the efficient and dedicated services of the entire staff of the Finance Department. Special appreciation is given to these staff members whose effort was instrumental in the publication of this comprehensive report. Respectfully submitted, Claude E. King City Manager Brenda Martin, CPA Director of Finance 8 9 CITY OF LEWISVILLE, TEXAS – ORGANIZATIONAL CHART Citizens / Voters Mayor / Council Advisory Boards Municipal Judge Municipal Court Quasi-Judicial Boards City Secretary City Manager Police City Attorney Fire Economic Dev / Planning Assistant City Manager (Development Services) Assistant City Manager (Administrative Services) Public Services Budget & Research Community Development Human Resources Parks & Leisure Services Finance Information Technology Community Relations / Tourism 10 CITY OF LEWISVILLE – PRINCIPAL OFFICERS – Elected Officials – Mayor ........................................................................................................................................................ Dean Ueckert Mayor Pro Tem......................................................................................................................................... Leroy Vaughn Deputy Mayor Pro Tem .................................................................................................................................TJ Gilmore Councilman............................................................................................................................................... Rudy Durham Councilman............................................................................................................................................... Neil Ferguson Councilman.................................................................................................................................................Greg Tierney – Appointed Officials – City Manager .......................................................................................................................................... Claude E. King City Secretary .............................................................................................................................................. Julie Heinze City Attorney ........................................................................................................................................... Lizbeth Plaster Municipal Judge ................................................................................................................................... Brian S. Holman – Assistant City Managers – Development Services ....................................................................................................................... Steven L. Bacchus Administrative Services ............................................................................................................................ Donna Barron – Department Directors – Budget and Research ............................................................................................................................. Gina Thompson Community Development ............................................................................................................................... Eric Ferris Community Relations and Tourism ............................................................................................................James Kunke Economic Development .......................................................................................................................... Nika Reinecke Finance .....................................................................................................................................................Brenda Martin Fire...................................................................................................................................................................Tim Tittle Human Resources .................................................................................................................................... Melinda Galler Information Technology Services.................................................................................................................... Chris Lee Parks and Recreation .......................................................................................................................... Robert Monaghan Police ..................................................................................................................................................... Russell Kerbow Public Services .....................................................................................................................................Carole Bassinger 11 AREA MAP 12 FINANCIAL SECTION INDEPENDENT AUDITOR’S REPORT To the Honorable Mayor, City Council, and City Manager City of Lewisville, TX Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Lewisville (the City), as of and for the year ended September 30, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 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. 13 City of Lewisville, Texas 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 aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City, as of September 30, 2013, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in 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 budgetary comparison information on pages 16-27 and 81-82 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 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 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 fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. 14 City of Lewisville, Texas 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, 2014, 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. WEAVER AND TIDWELL, L.L.P. Dallas, Texas March 12, 2014 15 CITY OF LEWISVILLE, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 This discussion and analysis of the City of Lewisville’s financial performance provides an overview of the City’s financial activities for the fiscal year ended September 30, 2013. Please read it in conjunction with the accompanying transmittal letter and the basic financial statements. FINANCIAL HIGHLIGHTS The assets of the City of Lewisville exceeded its liabilities at the close of the fiscal year ending September 30, 2013 by $583,277,351 (net position). Of this amount, $69,232,104 (unrestricted net position) may be used to meet the government’s ongoing obligations to citizens and creditors. The City of Lewisville’s total net position increased by $5,883,965 for the year ended September 30, 2013. As of September 30, 2013, the City of Lewisville’s governmental funds reported combined ending fund balances of $90,999,881, an increase of $12,164,156 in comparison with the prior fiscal year. At the end of the current fiscal year, unassigned fund balance for the general fund was $30,571,006 or approximately 51% percent of total general fund expenditures. The City’s total outstanding bonds increased by $5,325,000 during the current fiscal year. In 2013, the City issued $12,455,000 of General Obligation Bonds and $5,205,000 of Waterworks and Sewer System Revenue bonds. The increase in additional debt was partially offset by amortization payments on existing debt. OVERVIEW OF THE FINANCIAL STATEMENTS The discussion and analysis is intended to serve as an introduction to the City of Lewisville’s basic financial statements. The City of Lewisville’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplemental information in addition to the basic financial statements themselves. 16 CITY OF LEWISVILLE, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 Government-wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the City of Lewisville’s finances, in a manner similar to private-sector business. The statement of net position presents information on all of the City of Lewisville’s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Lewisville is improving or deteriorating. The statement of net position combines and consolidates governmental funds current financial resources (short-term spendable resources) with capital assets and long-term obligations. Other non-financial factors should also be taken into consideration, such as changes in the City’s property tax base and the condition of the City’s infrastructure (i.e. roads, bridges, drainage improvements, alleys, etc.), to assess the overall health or financial condition of the City. The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All of the current year revenues and expenses are taken into account regardless of when cash is received or paid. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods; for example, uncollected taxes and earned but not used vacation leave. Both the statement of net assets and the statement of activities are prepared utilizing the accrual basis of accounting. In the Statement of Net Position and the Statement of Activities, the City is divided into three kinds of activities: Governmental activities – Most of the City’s basic services are reported here, including the police, fire, library, community development, public services, information technology services, parks and leisure services, municipal court, tourism, and general administration. Property taxes, sales taxes, and franchise fees finance most of these activities. Business-type activities – The City charges a fee to customers to help it cover all or most of the cost of certain services it provides. The City’s water and sewer system is reported here. Component units – The City includes nine separate legal entities in its report –Lewisville Housing Finance Corporation, Lewisville Industrial Development Authority, Inc., Lewisville Parks and Library Development Corporation, Tax Increment Reinvestment Zone Number 1 (Lewisville Old Town), Tax Increment Reinvestment Zone Number 2, Lewisville Local Government Corporation, Health Benefit Trust, Lewisville Crime Control and Prevention District, and Lewisville Fire Control, Prevention, and Emergency Medical Services District. Although legally separate, these component units are important because the City is financially accountable for them. 17 CITY OF LEWISVILLE, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 Reporting the City’s Most Significant Funds Fund Financial Statements The fund financial statements provide detailed information about the most significant funds – not the City as a whole. Some funds are required to be established by state law and by bond covenants. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, or other money. The City’s two types of funds – Governmental and Proprietary – utilize different accounting approaches. Governmental funds – The majority of the City’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at yearend that are available for spending. These funds are reported using an accounting method identified as the modified accrual basis of accounting, which measures cash and all other financial assets that can be readily converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. By comparing information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements, readers may better understand the long-term impact of the government’s near-term financing decisions. The relationships or differences between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are detailed in a reconciliation following the fund financial statements. The City of Lewisville maintains twenty-one individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General Fund, Debt Service Fund, and the General Capital Projects Fund, all of which are considered to be major funds. Data from the other eighteen governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. Proprietary funds – The City charges customers for the services it provides, whether to outside customers or to other units within the City. These services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. In fact, the City’s enterprise funds (a component of proprietary funds) are identical to the business-type activities that are reported in the government-wide statements but provide more detail and additional information, such as cash flows, for proprietary funds. The internal service funds (the other component of proprietary funds) are utilized to report activities that provide supplies and services for the City’s other programs and activities. Because these services benefit both governmental as well as business type functions, they have been included in both the governmental and business-type activities in the government-wide financial statements. 18 CITY OF LEWISVILLE, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 The City of Lewisville maintains one enterprise fund to account for water and sewer services provided to the City’s retail and wholesale customers. All activities associated with providing such services are accounted for in this fund, including administration, operation, maintenance, debt service, capital improvements, billing and collection. The City’s intent is that costs of providing the services to the general public on a continuing basis are financed through user charges in a manner similar to a private business enterprise. The City of Lewisville maintains three internal service funds to account for funds accumulated to self-insure for health, liability, property and casualty losses, worker compensation claims, life insurance, long-term disability, vehicle and equipment replacement and fleet maintenance. Individual fund data for each of these non-major business-type funds is provided in the form of combining statements elsewhere in this report. The City as Trustee Reporting the City’s Fiduciary Responsibilities Fiduciary funds are used to account for resources held for the benefit of parties outside the government. The City’s fiduciary activities are reported in separate Statements of Fiduciary Net Assets and Changes in Fiduciary Net Assets. The activities of these funds are excluded from the City’s other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for its intended purpose. Other Information In addition to the basic financial statements and accompanying notes, this report presents certain required supplementary information and a statistical section that is intended to assist users in assessing the economic condition of the City. THE CITY AS A WHOLE – Government-Wide Financial Analysis The City’s combined net position was $583,277,351 as of September 30, 2013. Analyzing the net position and net expenses of governmental and business-type activities separately, the business type activities net position is $223,682,558. This analysis focuses on the net position (Table 1) and changes in general revenues (Table 2) and significant expenses of the City’s governmental and business-type activities. By far the largest portion of the City’s net position (86.0 percent) reflects its investment in capital assets (i.e., land, buildings, machinery, equipment, and infrastructure) less any related debt used to acquire those assets that is 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 its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. 19 CITY OF LEWISVILLE, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 Table 1: Net Position Governmental Activities 2013 2012 Current and other assets Capital assets Business-Type Activities 2013 2012 $ 187,904,483 333,359,679 $ 156,769,991 336,486,504 Total assets 521,264,162 493,256,495 280,251,517 Noncurrent liabilities Other liabilities 115,183,853 46,485,516 87,467,367 47,078,779 Total liabilities 161,669,369 Net position: Net investment in capital assets Restricted Unestricted Total net position $ $ 72,115,442 197,534,583 $ 2012 267,090,258 534,425,421 $ 228,885,433 534,021,087 269,650,025 801,515,679 762,906,520 52,571,018 3,997,941 47,383,217 3,583,771 167,754,871 50,483,457 134,850,584 50,662,550 134,546,146 56,568,959 50,966,988 218,238,328 185,513,134 314,990,028 10,755,866 33,848,899 298,329,672 1,012,020 59,368,657 186,611,050 1,688,303 35,383,205 181,437,600 1,975,308 35,270,129 501,601,078 12,444,169 69,232,104 479,767,272 2,987,328 94,638,786 $ 359,594,793 $ 358,710,349 223,682,558 $ 218,683,037 583,277,351 $ 577,393,386 $ 79,185,775 201,065,742 Total 2013 $ Governmental Activities The City’s general revenues increased when compared to the prior year by 10.6% or $6,858,058. The primary reasons for this increase were sales tax and property tax revenues. Sales tax revenue increased $4,784,189 (21.1%) from the prior year. Of this increase, $2,946,717 (61.6%) can be attributed to the voter approved Lewisville Crime Control and Prevention District and the Lewisville Fire Control, Prevention, and Emergency Medical Services District. Both districts began collecting one-eighth cent sales tax in April of 2012. Fiscal year 2013 was the first full year of tax collections for both districts. Assessed valuation of properties in the City increased by $199.7 million or 3.2% as compared to the prior year while the tax rate remained the same as 2012 at $0.44021 per $100 assessed valuation. Intergovernmental revenues in 2013 represent interest payments from the City’s component unit for a long term note receivable. The changes in the City’s general revenues are as follows (Table 2): Table 2: General Revenues and Transfers 2013 Increase (decrease) 2012 Property taxes Sales taxes Hotel/motel taxes Other taxes Franchise taxes Investment earnings Intergovernmental Gain on disposal of assets Miscellaneous Transfers $ 29,734,268 27,451,139 2,065,363 1,200,502 5,814,797 210,934 624,125 3,477 817,291 3,735,515 $ 28,968,709 22,666,950 1,960,910 1,011,328 5,436,197 365,045 8,525 396,641 3,985,048 $ 765,559 4,784,189 104,453 189,174 378,600 (154,111) 624,125 (5,048) 420,650 (249,533) Total general revenues $ 71,657,411 $ 64,799,353 $ 6,858,058 20 CITY OF LEWISVILLE, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 Governmental activities increased the City’s net position by $884,444. The key elements of this increase are as follows: Table 3: Changes in Net Position Governmental Activities 2013 2012 Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Property taxes Other taxes Other $ 13,124,152 2,415,909 4,745,018 $ 11,965,843 2,497,973 15,109,861 Business-Type Activities 2013 2012 $ 27,797,951 2,851,893 $ 28,375,842 4,254,018 Total 2013 $ 2012 40,922,103 2,415,909 7,596,911 $ 40,341,685 2,497,973 19,363,879 29,734,268 36,531,801 1,655,827 28,968,709 31,075,385 770,211 324,102 312,851 29,734,268 36,531,801 1,979,929 28,968,709 31,075,385 1,083,062 Total revenues 88,206,975 90,387,982 30,973,946 32,942,711 119,180,921 123,330,693 Expenses: General government Culture, parks, and recreation Public safety Public services Interest on long term debt 13,005,019 9,377,831 40,983,264 25,089,041 2,602,891 11,987,014 9,487,780 39,275,855 25,527,286 2,666,807 22,238,910 - 22,170,962 - 13,005,019 9,377,831 40,983,264 47,327,951 2,602,891 11,987,014 9,487,780 39,275,855 47,698,248 2,666,807 Total expenses 91,058,046 88,944,742 22,238,910 22,170,962 113,296,956 111,115,704 Increase in net position before transfers (2,851,071) 1,443,240 8,735,036 10,771,749 5,883,965 12,214,989 3,735,515 3,985,048 (3,735,515) (3,985,048) 884,444 5,428,288 4,999,521 6,786,701 Transfers Increase in net position Net position—beginning Net position—ending $ 358,710,349 359,594,793 $ 353,282,061 358,710,349 $ 218,683,037 223,682,558 $ 211,896,336 218,683,037 - - 5,883,965 $ 577,393,386 583,277,351 12,214,989 $ 565,178,397 577,393,386 The decrease in capital grants and contributions revenue in 2013 was primarily due to two items. In 2012, there was a bond sale that provided funding for infrastructure improvements in the Castle Hills Public Improvement Districts located in the City’s extraterritorial jurisdiction ($8.3 million). In 2013, there were fewer commercially developed projects dedicating infrastructure and right-of-way to the City. These revenues decreased $2.8 million from 2012. The most significant governmental expense for the City is personnel cost. For the year, payroll costs were $52,568,082 or 57.7% of total expenses. Payroll costs were closely monitored and came in $1,644,401 less than budgeted. For activities, public safety incurred expenses of $40,983,264. These expenses were offset by revenues of $6,021,116, which were collected from a variety of sources, with the largest being from fines and forfeitures. The largest portion of public safety is the cost of personnel which is $34,923,007. Other significant governmental expenses for the City include public services which incurred $25,089,041 in expenses, of which $7,309,171 represents personnel charges and the general government activity which incurred $13,005,019 in expenses, of which $5,976,254 represents personnel charges. General government encompasses mayor and council, administration, legal, finance, human resources, information technology services, tourism, economic development and general government departments. The Parks and Leisure Services Department incurred $9,377,831 in expenses, of which $4,359,650 represents personnel charges. 21 CITY OF LEWISVILLE, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 Business-type Activities Business-type activities increased the City’s net position by $4,999,521. The increase in net revenues is the result of several factors, including the following: The City’s water and sewer system recorded charges for services of $27,797,951. Non-cash capital contributions from developers and cash receipts in the form of development impact fees amounted to $2,851,893. Developer contributions are public improvement infrastructure projects that are completed by the developer. Prior to transfers, the charges for services exceeded expenses by $5.559 million. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets At the end of fiscal year 2013, the City had $534.4 million invested in a broad range of capital assets, including police and fire equipment, buildings, park facilities, roads, bridges, and water and sewer lines. Table 4: Capital Assets at Year End Capital Assets at Year-end Net of Depreciation Governmental Activities 2013 2012 Improvements Land Buildings Machinery and equipment Construction in progress Water system Sewer system Total $ $ 211,839,564 49,219,037 47,040,088 11,280,058 13,980,932 333,359,679 $ $ Business-Type Activities 2013 2012 211,952,153 48,557,117 49,208,722 11,619,750 15,148,762 336,486,504 $ $ 22 454,604 2,368,892 716,967 976,299 12,904,268 115,801,687 67,843,025 201,065,742 $ $ 500,377 2,368,892 745,813 965,193 25,903,371 99,391,326 67,659,611 197,534,583 Total 2013 $ $ 212,294,168 51,587,929 47,757,055 12,256,357 26,885,200 115,801,687 67,843,025 534,425,421 2012 $ $ 212,452,530 50,926,009 49,954,535 12,584,943 41,052,133 99,391,326 67,659,611 534,021,087 CITY OF LEWISVILLE, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 Major capital asset projects completed during 2012-2013 include: Midway Pump Station Purnell Street paving, drainage, and water line improvements Railroad Street paving and drainage improvements Bellaire Heights paving, drainage, and sidewalk improvements Corporate Drive Extension Waters Ridge to DGNO railroad Midway Ground Storage Reservoir (2) 2012 F-450 Type 1 Horton Ambulance Walters Street Land Purchase (for parking lot) Audio/Visual Equipment Upgrades Council conference room and chambers Palisades Lift Station City Wide Fiber Optic Extension Project Fire Station # 7 ADA Inclusive Playground Equipment for Memorial Park Diamond Hill Estates screening wall $ 16,728,625 4,960,619 4,234,903 2,481,737 2,307,740 1,399,940 407,689 274,233 218,111 215,606 178,736 $ 150,000 144,544 33,702,483 The City’s fiscal year 2013 capital improvement program authorizes it to spend $151 million for capital projects. These improvements are in the following categories: water and sewer, street, drainage, park, municipal/technology and public safety. The aforementioned amount of $151 million is made up of both current year appropriations, as well as carryover amounts appropriated but not yet expended. To support the capital improvement program, funds are obtained from the issuance of bonds, interest earnings, transfers from operating funds, developer contributions, or a combination of these sources. To illustrate, water and sewer system improvements for 2013-2014 consist of $4.902 million in transfers from water and sewer operating funds for water lines, sewer lines, painting the elevated storage tanks, a corrosion control and odor abatement program, and inflow and infiltration repairs. General Fund transfers for 2013-2014 include $3.413 million to fund concrete, asphalt, and sidewalk repairs. Municipal/technology improvements for 2013-2014 include $1.198 million for fiber expansions, network upgrades, and miscellaneous printer, phone, and computer replacements. Additional information on the City of Lewisville’s capital assets can be found in Note 5 of the Notes to Financial Statements included in this report. 23 CITY OF LEWISVILLE, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 Debt At year end, the City had $149.5 million in general obligation bonds, certificates of obligation, and revenue bonds outstanding as compared to $144.2 million at the end of the prior fiscal year, an increase of 3.7% percent as shown in Table 5. Table 5: Outstanding Debt at Year End (In Thousands) Governmental Activities 2013 2012 General obligation bonds and certificates of obligation (backed by the City) General obligation and revenue bonds (backed by fee revenues) Totals $ 99,520 $ - $ 99,520 94,085 Business-type Activities 2013 2012 $ - $ 94,085 $ - $ - Totals 2013 2012 $ 99,520 $ 94,085 50,005 50,115 50,005 50,115 50,005 $ 50,115 $149,525 $144,200 During the current fiscal year, the City issued General Obligation Bonds in the amount of $12.455 million and Waterworks and Sewer System Revenue Bonds in the amount of $5.205 million. The General Obligation debt provided funds for constructing improvements to the City’s streets, sidewalks and related drainage improvements. The Waterworks and Sewer System Revenue debt provided funds for constructing, acquiring and installing improvements, additions and extensions to the City’s waterworks and sewer system. For more detailed information on long-term debt activity, refer to Note 11 in the Notes to Financial Statements. The City’s General Obligation Bonds and Water and Sewer – Revenue Bonds carry an AAA rating from Standard and Poor’s and Fitch Ratings. Both of these entities are national rating agencies. The City is permitted by Article XI, Section 5, of the State of Texas Constitution to levy taxes up to $2.50 per $100 of assessed valuation for general governmental services including the payment of principal and interest on general obligation long-term debt. The current ratio of tax-supported debt to assessed value of all taxable property is 1.57%. THE CITY’S FUNDS At the close of the City’s fiscal year on September 30, 2013 the governmental funds of the City reported a combined fund balance of $91.0 million, a $12.2 million increase over the previous year. 24 CITY OF LEWISVILLE, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 The City’s General Fund balance was $31.5 million which was $418,431 more than the prior year fund balance mainly due to an increase in sales tax collections. Current year’s activity resulted in a positive variance of $6.7 million when compared to the estimated ending fund balance of $24.8 million per the final amended budget. Significant budgetary variances between the final amended budget and the actual results can be summarized as follows: Tax revenue was $2,907,142 more than estimated. The primary reason was sales tax revenue, which was $2,023,124 more than estimated and $1,906,143 more than prior year receipts of which the conservative budget is based. Property tax revenues were favorable to budget by146,326. Licenses and Permits revenue was $747,586 higher than budgeted primarily due to increased building-related permit revenue. This category of revenue is susceptible to current economic conditions and changes in planned construction. Charges for services was $352,347 higher than budgeted primarily due to land host fee receipts being higher than anticipated. When combined, Police, Fire, Public Services, Community Development and Parks and Leisure Services departments had lower than expected expenditures resulting in a favorable variance of $1,436,287. This variance is primarily due to salary savings. General government expenditures were $420,431 lower than budget. Legal expenditures ($140,176) and contractual obligations ($122,496) were both favorable to budgeted expenditures this year. The City’s Water and Sewer Fund net position of $223.6 million increased by $5.0 million over the prior year net position balance. The increase is primarily due to operating revenues and dedicated infrastructure continuing to remain well above operating expenses. The City’s Internal Service Funds net position of $17.8 million decreased by $50,290 from the prior year net position balance. This is primarily due to the Maintenance and Replacement Fund’s $275,453 decrease in net position from planned capital replacement costs exceeding one year’s lease payments. General Fund Budgetary Highlights During fiscal year 2012-13, the City Council amended the budget for the General Fund on five separate occasions, in May for the Old Town Park Plaza, in August for the Timber Creek Stream Bank Stabilization Improvements, in November for FEMA Assistance to Firefighters grant program City match, and in December for the purchase of New World Financial and Human Resources software and for the routine supplement completed each year for prior year encumbrances (purchases) that overlap into the next fiscal year. Staff reviewed the supplemental appropriations and determined that reserves were sufficient to recommend approval. The net decrease to the General Fund for the year was $2,811,802. 25 CITY OF LEWISVILLE, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES The City’s elected and appointed officials considered many factors when setting the fiscal year 2014 budget, tax rates, and fees that will be charged for the business-type activities. One of those factors is the economy. The population growth experienced by the City has stimulated local business and development activity. Lewisville’s current population is estimated at 99,453 with a population at build-out at approximately 111,000. The economic climate in Lewisville is stable with low unemployment and as a result Lewisville enjoys an above-average income level per household. This in combination with the City’s proximity to two major highways, the Dallas Fort Worth International Airport, and an active economic development program have made Lewisville a leader in the regional retail market. The City continues to attract new and existing companies due to the strategy of working diligently with businesses on relocation incentives. These factors are taken into consideration when adopting the General Fund budget for fiscal year 2014. The combined budget appropriation for fiscal year 2013-14 totals $117.5 million for twenty-one operating funds. Another $14.9 million is appropriated in the City’s three internal service funds. Ad valorem tax revenue is determined by two major factors: the total assessed value established by the Denton County Central Appraisal District and the tax rate established by the Lewisville City Council. The Lewisville City Council chose to hold the tax rate steady for the current fiscal year at .44021 cents per $100 assessed valuation. This tax rate brings in more tax revenue ($1.358 million) for the 2013-14 fiscal year due to the new tax rate being applied to an increased tax base. Property values increased $403 million or 6.24%. This brings the property tax revenue budgeted for FY 2013-14 to $22.880 million making it the single largest General Fund revenue source. The General Fund’s second largest revenue source in fiscal year 2013-2014 is sales tax receipts. Due to the volatility of the sales tax revenue source, the City has been very conservative in projecting sales tax revenue. This conservative philosophy was formalized in the City’s written Revenue Policy adopted by the City Council. Under this policy sales tax revenue budget for subsequent fiscal years is limited to the estimated receipts for the current fiscal year. This practice effectively mitigates to a large degree the volatile nature of the sales tax revenue source. The City’s budgeted sales tax revenue is $21.063 million. Budgeted operating expenditures in the General Fund are expected to increase $3.2 million from the 2012-2013 fiscal year re-estimated budget. These expenditures are offset by increases in revenue. The only change in fund balance is the $3.082 million in transfers out for one time expenditures. 26 CITY OF LEWISVILLE, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 As for the City’s business type activities, the City budgeted a decrease of $4.185 million for the Water and Sewer Fund’s net assets. The primary item contributing to this is the increase in the amount of the transfers to capital improvement projects for water lines, sewer lines, and inflow and infiltration repairs. Water and sewer rates were reviewed by the City Council for fiscal year 2013-2014. There was a 1.5% increase in water rates and no change to sewer rates. CONTACTING THE CITY’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the City’s finances and reflect the City’s accountability for the resources it receives. If you have questions about this report or need additional financial information, contact the Director of Finance, City of Lewisville, 151 West Church Street, Lewisville, Texas 75057. 27 BASIC FINANCIAL STATEMENTS CITY OF LEWISVILLE, TEXAS STATEMENT OF NET POSITION SEPTEMBER 30, 2013 EXHIBIT 1 Governmental Activities Primary Government Business-type Activities Total Component Units ASSETS Cash $ 20,884,709 Investments 116,823,385 Receivables (net of allowances for uncollectibles) 10,325,670 Internal balances (45,525) Note receivable from component units 36,455,000 Inventory of supplies 105,708 Prepaid items 2,727,501 Restricted assets: Cash Investments Interest receivable Deferred charges 628,035 Capital assets: Non-depreciable 63,199,969 Depreciable (net of accumulated depreciation) 270,159,710 Total assets $ 4,022,495 24,704,267 4,573,424 45,525 3,810 $ 7,095,940 38,138,068 27,956 574,290 24,907,204 141,527,652 14,899,094 36,455,000 105,708 2,731,311 $ 1,624,976 9,239,232 1,019,719 892 15,273,160 185,792,582 7,095,940 38,138,068 27,956 1,202,325 78,473,129 455,952,292 228,715 $ 521,264,162 $ 280,251,517 $ 801,515,679 $ 19,777,956 $ $ $ $ 59,779 20,503 136,720 - 125,908 7,538,514 LIABILITIES AND NET POSITION Liabilities: Accounts payable Incurred but not reported claim reserve Retainage payable Accrued liabilities Accrued interest payable Contracts and retainage payable Deposits payable Unearned revenue Escrow payable Noncurrent liabilities: Due within one year Due in more than one year Total liabilities Net Position: Net investment in capital assets Restricted for debt service Restricted for other purposes Restricted for tax increment reinvestment zone Unrestricted Total net position Total liabilities and net position 2,753,305 1,318,794 277,475 1,755,866 454,252 14,685 38,800,555 1,110,584 1,277,674 204,828 261,641 733,297 1,489,877 30,624 4,030,979 1,318,794 277,475 1,960,694 715,893 733,297 1,504,562 38,800,555 1,141,208 12,060,061 103,123,792 5,573,595 46,997,423 17,633,656 150,121,215 1,748,319 35,500,520 161,669,369 56,568,959 218,238,328 37,465,841 314,990,028 1,216,415 9,539,451 33,848,899 186,611,050 1,688,303 35,383,205 501,601,078 2,904,718 9,539,451 69,232,104 74,796 1,344,538 (19,107,219) 359,594,793 223,682,558 583,277,351 (17,687,885) $ 521,264,162 $ 280,251,517 $ 801,515,679 The Notes to Financial Statements are an integral part of these statements. 28 $ 19,777,956 CITY OF LEWISVILLE, TEXAS STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Functions/Programs Primary government: Governmental activities: General government Culture, parks and recreation Public safety Public services Interest on long-term debt Expenses $ 13,005,019 9,377,831 40,983,264 25,089,041 2,602,891 Charges for Services $ 3,383,721 1,558,232 6,021,116 2,161,083 - Total governmental activities 91,058,046 13,124,152 Business-type activities: Water & sewer Total business-type activities 22,238,910 22,238,910 27,797,951 27,797,951 113,296,956 40,922,103 3,850,517 235,759 Total primary government Program Revenues Operating Capital Grants and Grants and Contributions Contributions $ 321,365 83,620 1,053,375 957,549 - $ 2,415,909 767,867 3,977,151 4,745,018 - 2,851,893 2,851,893 2,415,909 7,596,911 Component units Lewisville Parks and Library Development Corporation Tax increment reinvestment zone (Old Town) Total component units 726,823 $ 4,577,340 - $ 235,759 $ GENERAL REVENUES AND TRANSFERS: Taxes: Property taxes, levied for general purposes Sales taxes Other taxes Franchise taxes Hotel motel taxes Penalties and interest Intergovernmental Investment earnings Gain on sale of assets Miscellaneous Transfers Total general revenues and transfers Change in Net Position NET POSITION, beginning of year NET POSITION, end of year The Notes to Financial Statements are an integral part of these statements. 29 - - $ - EXHIBIT 2 Net (Expenses) Revenue and Changes in Net Position Primary Government Governmental Business - Type Activities Activities $ (9,299,933) (6,968,112) (33,908,773) (17,993,258) (2,602,891) $ (70,772,967) (70,772,967) - $ $ - 8,410,934 8,410,934 8,410,934 8,410,934 - 8,410,934 (62,362,033) - - - - 71,657,411 $ - - $ (9,299,933) (6,968,112) (33,908,773) (17,993,258) (2,602,891) (70,772,967) - 29,579,363 27,451,139 1,200,502 5,814,797 2,065,363 154,905 624,125 210,934 3,477 817,291 3,735,515 $ - - $ - Component Units Total 120,530 203,572 (3,735,515) - (3,614,758) $ $ (726,823) - 29,579,363 27,451,139 1,200,502 5,814,797 2,065,363 154,905 624,125 331,464 3,477 1,020,863 - $ (4,341,581) $ 581,198 5,685,240 19,499 1,500 - (3,411,413) 68,245,998 6,287,437 884,444 4,999,521 5,883,965 1,945,856 358,710,349 218,683,037 577,393,386 359,594,793 $ 223,682,558 $ 583,277,351 30 (19,633,741) $ (17,687,885) CITY OF LEWISVILLE, TEXAS GOVERNMENTAL FUNDS BALANCE SHEET SEPTEMBER 30, 2013 EXHIBIT 3 General Other Total Debt Capital Governmental Governmental Service Projects Funds Funds ASSETS Cash Investments Receivables (net of allowances for uncollectibles) Taxes Accounts Unbilled accounts Interest Court Due from other funds Note receivable from component units Prepaid items Total assets $ 3,996,021 22,694,424 $ 200,741 1,425,957 $ 12,956,590 73,683,794 6,065,578 1,906,351 269,311 19,012 298,558 238,910 381,982 $ 35,870,147 47,781 741 36,455,000 $ 38,130,220 60,716 $ 86,701,100 1,269,494 1,589,353 9,200 1,427,315 83,507 4,378,869 4,553 36,502,781 36,507,334 1,226,684 38,800,554 1,027,077 277,475 41,331,790 $ $ 1,519,624 7,679,456 924,955 699,158 6,315 2,265,652 13,095,160 $ $ 18,672,976 105,483,631 7,038,314 2,605,509 269,311 86,784 298,558 238,910 36,455,000 2,647,634 173,796,627 LIABILITIES AND FUND BALANCES Liabilities Accounts and contracts payable Accrued liabilities Accrued interest payable Deposits payable Deferred revenue Money held in escrow Retainage Due to other funds Total liabilities 221,081 84,615 5,485 28,662 238,910 578,753 2,717,259 1,673,968 4,553 14,685 76,759,312 1,110,584 277,475 238,910 82,796,746 2,265,652 2,647,634 31,849,522 - 50,541 9,488,910 1,622,886 31,900,063 9,488,910 6,380,350 - 684,724 6,380,350 684,724 26,580 12,516,407 7,139,438 564,870 30,571,006 90,999,881 Fund Balances: Nonspendable Restricted for: Debt service Capital projects Other purposes Committed to: Capital projects Other purposes Assigned to: Capital projects Other purposes Unassigned Total fund balances Total liabilities and fund balances 381,982 - 1,622,886 - - - - 538,290 30,571,006 31,491,278 1,622,886 7,139,438 45,369,310 $ 35,870,147 $ 38,130,220 $ 86,701,100 The Notes to Financial Statements are an integral part of these statements. 31 $ 13,095,160 $ 173,796,627 CITY OF LEWISVILLE, TEXAS RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET TO THE GOVERNMENT WIDE STATEMENT OF NET POSITION SEPTEMBER 30, 2013 Total fund balances -- governmental funds EXHIBIT 4 $ 90,999,881 Amounts reported for governmental activities in the statement of net position are different because: Costs associated with the issuance of governmental long term debt are expensed when incurred in the fund statements and capitalized and amortized over the life of the debt in the government-wide statements. 628,035 Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. 327,912,188 Interest payable on long term debt does not require current financial resources, therefore interest payable is not reported as a liability in the governmental funds balance sheet. (449,699) Revenues earned but not available within sixty days of the year end are not recognized as revenue on the fund financial statements. 37,958,757 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the fund financial statements. (115,183,853) An internal service fund is used by management to charge the costs of certain activities, including insurance and vehicle fleet management, to individual funds. The assets and liabilities of the internal service fund are included in governmental activities in the government-wide statement of net position, net of amounts charged to enterprise funds of $45,525. Total net position--governmental activities 17,729,484 $ The Notes to Financial Statements are an integral part of these statements. 32 359,594,793 CITY OF LEWISVILLE, TEXAS GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 General REVENUES: Property and other taxes Licenses and permits Intergovernmental Charges for services Recreation Fines Investment earnings Grants Public safety Public services Contributions and donations Miscellaneous Total revenues $ EXPENDITURES: Current General government Culture, parks recreation Public safety Public services Debt service Principal Interest and fiscal charges Bond issuance costs Capital outlay Total expenditures EXHIBIT 5 General Other Total Debt Capital Governmental Governmental Service Projects Funds Funds 50,753,584 2,375,771 6,051,283 1,093,266 2,954,961 48,905 $ 7,923,410 624,125 5,425 882,124 64,159,894 15,457 8,568,417 7,908,960 5,971,888 36,449,811 9,435,481 - $ 1,147,163 141,568 $ 851,500 2,140,231 7,602,737 287,645 15,036 $ 66,279,731 2,375,771 1,771,288 6,051,283 1,380,911 2,954,961 210,934 515,834 945,453 583,019 1,360,957 11,310,681 515,834 945,453 1,434,519 2,258,538 86,179,223 2,441,098 317,100 3,037,992 1,161,152 10,350,058 6,288,988 39,487,803 10,596,633 201,220 14,239,974 14,441,194 1,336,614 8,293,956 5,410,000 2,942,234 201,220 16,208,343 91,485,279 3,016,725 (5,306,056) - 631,755 60,397,895 5,410,000 2,942,234 8,352,234 3,761,999 216,183 (12,300,963) 3,936,467 (7,280,035) - (50,000) - 7,255,678 12,455,000 1,276,220 131,102 (257,697) - 11,323,247 (7,587,732) 12,455,000 1,276,220 (3,343,568) (50,000) 20,986,898 3,477 (123,118) 3,477 17,470,212 166,183 8,685,935 Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES): Transfers in Transfers out Issuance of general obligation bonds Premium (discount) on issuance of general obligation bonds Proceeds from sale of assets Net other financing sources (uses) Net change in fund balances 418,431 FUND BALANCES, beginning of year FUND BALANCES, end of year $ 31,072,847 1,456,703 36,683,375 31,491,278 $ 1,622,886 $ 45,369,310 The Notes to Financial Statements are an integral part of these statements. 33 2,893,607 12,164,156 9,622,800 $ 12,516,407 78,835,725 $ 90,999,881 CITY OF LEWISVILLE, TEXAS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE GOVERNMENT WIDE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Net changes in fund balances, total governmental funds EXHIBIT 6 $ 12,164,156 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Dispositions of capital assets decrease net position. This amount is the net of capital outlay of $12,537,926, less dispositions of $142,075. 12,395,851 Governmental funds do not recognize assets contributed by developers. However, in the statement of activities the fair market value of those assets are recognized as revenue, then allocated over their estimated useful lives and reported as depreciation expense. 2,163,336 Depreciation expense on capital assets is reported in the government-wide statement of activities and changes in net position, but they do not require the use of current financial resources. Therefore, depreciation expense is not reported as expenditures in the governmental funds. (17,194,352) 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 issuance costs, premiums, discounts, and similar items when debt is first issued, whereas the the amounts are deferred and amortized in the statement of activities. This amount (bond principal payments of $5,410,000, $210,720 of issuance costs and $231,545 of amortization of premium less bond proceeds of $12,455,000, premium paid of $1,276,220, and the amortization of deferred loss on refunding of $82,465 and of issuance costs of $67,360) is the net effect of these differences in the treatment of long term debt and related items. (8,028,780) Current year changes in the long term liability for compensated absences do not require the use of current financial resources; therefore, are not reported as expenditures in governmental funds. (342,195) Current year changes in the long term liability for net pension benefit obligations do not require the use of current financial resources; therefore, are not reported as expenditures in the governmental funds. (132,151) Current year changes in accrued interest payable do not require the use of current financial resources; therefore, are not reported as expenditures in governmental funds. 46,903 Certain revenues in the government-wide statement of activities that do not provide current financial resources are not reported as revenue in the governmental funds. (139,061) Internal service funds are used by management to charge the costs of certain activities, such as the purchase of equipment and insurance, to individual funds. The change in net position of certain internal service funds is reported with governmental activities. This is the amount of the change in net position allocated to governmental activities. Change in net position of governmental activities (49,263) $ The Notes to Financial Statements are an integral part of these statements. 34 884,444 CITY OF LEWISVILLE, TEXAS PROPRIETARY FUNDS STATEMENT OF NET POSITION SEPTEMBER 30, 2013 Governmental Activities Internal Service Funds Business-Type Activities Enterprise Fund ASSETS Current Assets Cash Investments Receivables (net of allowance for uncollectibles of $354,961) Accounts Unbilled trade accounts Interest receivable Other Inventory of supplies, at cost Prepaid items Restricted assets Cash Investments Interest receivable $ 4,022,495 24,704,267 $ 1,409,207 3,140,895 23,322 3,810 9,457 17,737 105,708 79,867 7,095,940 38,138,068 27,956 Total current assets - 78,565,960 Noncurrent Assets Deferred bond issuance costs, net of amortization Capital assets Land Land improvements Buildings Other improvements Water system Sewer system Machinery and equipment Motor vehicles Construction in progress Total capital assets Less accumulated depreciation Capital assets, net of accumulated depreciation Total assets $ The Notes to Financial Statements are an integral part of these statements. 35 13,764,256 574,290 Total noncurrent assets 2,211,733 11,339,754 - 2,368,892 106,700 1,131,504 658,008 159,796,481 103,029,886 4,561,671 12,904,268 284,557,410 (83,491,668) 201,065,742 274,272 5,492,375 20,040,167 25,806,814 (20,359,323) 5,447,491 201,640,032 5,447,491 280,205,992 $ 19,211,747 EXHIBIT 7 LIABILITIES AND NET POSITION Current Liabilities Current liabilities payable from restricted assets Deposits payable Accrued interest payable Contracts and retainage payable Escrow payable Current maturities of bonds payable $ Total current liabilities payable from restricted 1,489,877 261,641 733,297 30,624 5,140,000 $ 7,655,439 - Accounts payable Incurred but not reported claim reserve Accrued liabilities Compensated absences 1,277,674 204,828 433,595 36,046 1,318,794 81,898 - Total current liabilities 1,916,097 1,436,738 Noncurrent Liabilities Bonds payable Deferred loss on refunding Compensated absences Net pension obligation 46,313,497 (347,267) 343,274 687,919 - Total noncurrent liabilities 46,997,423 - Total liabilities 56,568,959 1,436,738 186,611,050 1,688,303 35,337,680 5,447,491 12,327,518 - NET POSITION: Net investment in capital assets Restricted for bond requirements Unrestricted Total net position $ 36 223,637,033 $ 17,775,009 CITY OF LEWISVILLE, TEXAS RECONCILIATION OF ENTERPRISE FUND STATEMENT OF NET POSITION TO THE GOVERNMENT WIDE STATEMENT OF NET POSITION SEPTEMBER 30, 2013 Total net position -- enterprise fund EXHIBIT 8 $ 223,637,033 Amounts reported for business-type activities in the statement of net position are different because: An internal service fund is used by management to charge the costs of certain activities, including insurance and vehicle fleet management, to individual funds. The assets and liabilities of the internal service fund are included in governmental activities in the government-wide statement of net position. The amount shown as the accumulated amount is allocated to business type activities since the adoption of GASB 34. Total net position--business-type activities 45,525 $ The Notes to Financial Statements are an integral part of these statements. 37 223,682,558 CITY OF LEWISVILLE, TEXAS PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 OPERATING REVENUES: Charges for sales and services Miscellaneous EXHIBIT 9 Business-Type Activities Enterprise Fund Governmental Activities Internal Service Funds $ $ Total operating revenues OPERATING EXPENSES: Cost of sales and services, net of reimbursements Administrative Depreciation Total operating expenses Total operating income (loss) 27,797,951 203,572 11,706,983 5,536 28,001,523 11,712,519 7,690,196 7,563,584 5,674,577 8,460,902 1,698,574 1,886,989 20,928,357 12,046,465 7,073,166 (333,946) NONOPERATING REVENUES (EXPENSES): Investment earnings Interest expense Amortization Gain on disposal of capital assets 120,530 (1,344,808) 35,282 - 22,128 79,509 Total nonoperating revenues (expenses) (1,188,996) 101,637 5,884,170 (232,309) INCOME (LOSS) BEFORE TRANSFERS AND CAPITAL CONTRIBUTIONS TRANSFERS AND CAPITAL CONTRIBUTIONS: Transfers in Transfers out Contributions from other funds Contributions from developers Contributions - impact fees 50,000 (3,785,515) 976,952 1,874,941 Total transfers and capital contributions 1,000,000 (1,000,000) 182,019 - (883,622) 182,019 5,000,548 CHANGE IN NET POSITION (50,290) 218,636,485 NET POSITION, beginning of year $ NET POSITION, end of year The Notes to Financial Statements are an integral part of these statements. 38 223,637,033 17,825,299 $ 17,775,009 CITY OF LEWISVILLE, TEXAS EXHIBIT 10 RECONCILIATION OF THE ENTERPRISE FUND STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION TO THE GOVERNMENT WIDE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Net changes in fund net position-proprietary funds $ 5,000,548 Amounts reported for business-type activities in the statement of activities are different because: Internal service funds are used by management to charge the costs of certain activities, such as the purchase of equipment and insurance, to individual funds. The change in net position of certain internal service funds is reported with governmental activities. The amount shown represents the change in net position allocated to business-type activities. Change in net position of business-type activities (1,027) $ 4,999,521 The Notes to Financial Statements are an integral part of these statements. 39 CITY OF LEWISVILLE, TEXAS PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Governmental Activities Internal Service Funds Business-Type Activities Enterprise Fund CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers Cash received (paid) from transactions with other funds Cash paid to employees for services Cash paid for goods and services Cash paid for claims Cash received from miscellaneous items $ Net cash provided by operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds Transfers to other funds Net cash used in noncapital financing activities 28,388,323 (166,372) (7,581,421) (7,319,274) - $ 13,321,256 3,142,628 50,000 (3,785,515) 1,000,000 (1,000,000) (3,735,515) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets Proceeds from the sale of revenue bonds Proceeds from sale of equipment Principal paid on revenue bond maturities Impact fees Interest paid Premium on issuance of bonds Bond issuance costs 13,208,960 (384,956) (2,541,841) (7,145,071) 5,536 - (8,228,782) 5,205,000 (5,315,000) 1,874,941 (1,289,765) 481,262 (135,441) (1,213,309) 79,509 - (7,407,785) (1,133,800) (14,926,376) 22,072,869 127,433 (8,529,681) 5,833,603 23,852 7,273,926 (2,672,226) NET INCREASE IN CASH 9,451,882 (663,398) CASH, beginning of year 1,666,553 2,875,131 11,118,435 2,211,733 Net cash used in capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of investments Proceeds from sale and maturities of investments Interest received Net cash provided by investing activities CASH, end of year Classified as: Unrestricted cash and cash equivalents at end of year Restricted cash and cash equivalents at end of year TOTAL CASH AT END OF YEAR The Notes to Financial Statements are an integral part of these statements. 40 $ $ 4,022,495 7,095,940 11,118,435 $ $ 2,211,733 2,211,733 (Continued) EXHIBIT 11 Governmental Activities Internal Service Funds Business-Type Activities Enterprise Fund RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating income (loss) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation Change in assets and liabilities(Increase) decrease in receivables (Increase) decrease in inventory (Increase) decrease in prepaid expenses Increase (decrease) in accounts and contracts payable Increase (decrease) in accrued liabilities Increase (decrease) in deposits payable Increase (decrease) in compensated absences Increase (decrease) in due to other funds $ 7,073,166 $ 5,674,577 1,886,989 386,800 (3,056) 305,029 18,624 50,325 (17,837) (166,372) Total adjustments 1,979 (1,036) (18,635) 99,305 7,972 1,500,000 6,248,090 Net cash provided by operating activities NON CASH INVESTING AND FINANCING ACTIVITIES: From developer contributions of capital assets Intragovernmental contributions Increase (decrease) in fair value of investments 41 (333,946) 3,476,574 $ 13,321,256 $ $ 976,952 63,287 $ 3,142,628 182,019 (7,984) CITY OF LEWISVILLE, TEXAS FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2013 EXHIBIT 12 Castle Hills PID Debt Service Agency Fund Lewisville OPEB Liability Trust Fund $ $ ASSETS ASSETS Cash Investments Mutual funds - equity Mutual funds - fixed income Interest receivable Total assets 11,030,057 9,299 22 11,030,079 2,587,841 1,145,380 3,742,520 11,030,079 11,030,079 2,535 2,535 LIABILITIES LIABILITIES Accounts payable Due to debt holders Total liabilities NET POSITION Held in trust for retiree health benefits $ The Notes to Financial Statements are an integral part of these statements. 42 - $ 3,739,985 CITY OF LEWISVILLE, TEXAS FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 EXHIBIT 13 Lewisville OPEB Liability Trust Fund ADDITIONS Employer contributions Investment earnings Unrealized/realized gain(loss), net Total additions $ DEDUCTIONS Benefits 366,600 66,781 342,221 775,602 368,800 Total deductions 368,800 406,802 CHANGE IN NET POSITION 3,333,183 NET POSITION, beginning $ NET POSITION, ending The Notes to Financial Statements are an integral part of these statements. 43 3,739,985 CITY OF LEWISVILLE, TEXAS DISCRETELY PRESENTED COMPONENT UNITS STATEMENT OF NET POSITION SEPTEMBER 30, 2013 Lewisville Housing Finance Corporation ASSETS Cash Investments Receivables Accounts Taxes Interest Deferred charges Prepaid items Capital assets Non-depreciable Depreciable (net of accum depr) Total assets $ Lewisville Industrial Development Authority, Inc. $ - 1,020 5,799 $ NET POSITION (DEFICIT): Net investment in capital assets Restricted for tax increment reinvestment zone Unrestricted Total net position (deficit) $ Governmental Activities Lewisville Tax Parks and Increment Library Reinvestment Development Zone Corporation (Old Town) $ - 1,422,870 8,089,848 5 - - 103 1,011,524 7,140 181,459 892 5,892 6,824 10,713,836 4 LIABILITIES Current Accounts and contracts payable Accrued liabilities Accrued interest payable Noncurrent Liabilities Due within one year Due within more than one year Total liabilities Total liabilities and net position (deficit) 881 5,007 EXHIBIT 14 $ $ $ $ 185,972 1,057,633 Increment Reinvestment Zone #2 $ 14,233 80,945 Total Component Units $ 1,624,976 9,239,232 876 47,256 - 67 - 103 1,011,524 8,092 228,715 892 125,908 7,538,514 8,956,159 95,245 125,908 7,538,514 19,777,956 $ $ - - 59,779 20,503 94,276 42,444 - 59,779 20,503 136,720 - - 1,543,319 28,115,894 29,833,771 205,000 7,384,626 7,632,070 - 1,748,319 35,500,520 37,465,841 5,892 5,892 6,824 6,824 (19,119,935) (19,119,935) 74,796 1,249,293 1,324,089 95,245 95,245 74,796 1,344,538 (19,107,219) (17,687,885) 5,892 $ 6,824 The Notes to Financial Statements are an integral part of these statements. 44 $ 10,713,836 $ 8,956,159 $ 95,245 $ 19,777,956 CITY OF LEWISVILLE, TEXAS DISCRETELY PRESENTED COMPONENT UNITS STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Lewisville Housing Finance Corporation EXPENSES General government Culture, parks and recreation Interest on long term debt Depreciation Total expenses $ PROGRAM REVENUES Charges for services Culture, parks and recreation Total program revenues GENERAL REVENUES Property taxes Sales taxes Investment earnings Miscellaneous Total general revenues - Lewisville Industrial Development Authority, Inc. $ $ - - 12 12 11 1,500 1,511 CHANGE IN NET POSITION (DEFICIT) 1,511 12 4,381 6,812 $ 5,892 $ 2,498,300 1,352,217 3,850,517 $ 235,759 235,759 Net position (deficit), beginning Net position (deficit), ending Governmental Activities Lewisville Tax Parks and Increment Library Reinvestment Development Zone Corporation (Old Town) - - EXHIBIT 15 6,824 The Notes to Financial Statements are an integral part of these statements. 45 2,087,537 (216,389) 1,324,089 $ $ 5,631 2,498,300 1,697,433 375,976 4,577,340 235,759 235,759 73,058 127 73,185 1,540,478 $ - Total Component Units - 508,140 2,294 510,434 (21,207,472) (19,119,935) $ - 5,685,240 17,055 5,702,295 $ 5,631 345,216 375,976 726,823 Increment Reinvestment Zone #2 581,198 5,685,240 19,499 1,500 6,287,437 73,185 1,945,856 22,060 (19,633,741) 95,245 $ (17,687,885) CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: A. Reporting Entity The City of Lewisville is a municipal corporation governed by an elected mayor and a fivemember council. The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Discretely presented component units are reported in a separate column in the government-wide financial statements (see note below for description) to emphasize that they are legally separate from the government. Blended Component Units The Lewisville Health Benefit Trust was established by the City under the Texas Political Subdivision Employees Uniform Group Benefits Act (Chapter 172 Texas Local Government Code) to account for health insurance of employees, retirees and dependents. The City Council appoints a board and board members are removable by the City Council. The City Council approves the trust’s annual budget. The activities of the Lewisville Health Benefit Trust are accounted for as a blended component unit and included with the internal service funds as the Health Insurance Risk Pool Fund. The Health Benefit Trust is reported as a blended component unit since it provides services exclusively for the City of Lewisville. The Local Government Corporation was established July 2006 to assist in economic development initiatives. Allowable under Chapter 431 of the Texas Transportation Code, this corporation cannot incur any debt without City Council approval. The City Council appoints a board and board members are removable by the City Council. The existing four person board is comprised of current City Council members. The City Council approves the corporation’s annual budget. In the event of dissolution, title to all assets transfer to the City. The activities of the Lewisville Local Government Corporation are accounted for as a blended component unit and included with the non-major governmental funds. The Local Government Corporation is reported as a blended component unit since its governing body is substantially the same as the City’s. In November 2011, the City of Lewisville voters approved, in special election, the creation of the Lewisville Crime Control and Prevention District. The District was formed for the purpose of providing crime control and prevention programs derived from one-eighth cent sales tax within the City of Lewisville. Allowable under Chapter 363 of the Texas Local Government Code, the City Council appointed their own membership as the board of directors of the District. The City Council approves the district’s annual budget. In the event of dissolution, title to all assets transfer to the City. The activities of the Lewisville Crime Control and Prevention District are accounted for as a blended component unit and included with the non-major governmental funds. The District is reported as a blended component unit since its governing body is the same as the City’s. 46 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 In November 2011, the City of Lewisville voters approved, in special election, the creation of the Lewisville Fire Control, Prevention, and Emergency Medical Services District. The District was formed for the purpose of providing fire safety and emergency medical service programs derived from one-eighth cent sales tax within the City of Lewisville. Allowable under Chapter 344 of the Texas Local Government Code, the City Council appointed their own membership as the board of directors of the District. The City Council approves the district’s annual budget. In the event of dissolution, title to all assets transfer to the City. The activities of the Lewisville Fire Control, Prevention, and Emergency Medical Services District are accounted for as a blended component unit and included with the non-major governmental funds. The District is reported as a blended component unit since its governing body is the same as the City’s. Discretely Presented Component Units The following entities are accounted for as discretely presented component units since the services provided are not entirely or exclusively for the City. The Lewisville Housing Finance Corporation has been established to assist in evaluating housing needs within the City. The City Council appoints a board and board members are removable by City Council. The City Council approves the corporation’s annual budget. In the event of dissolution, title to all assets transfer to the City. Financial statement information can be obtained by contacting the Lewisville Housing Finance Corporation, P.O. Box 299002, Lewisville, Texas 75029. The Lewisville Industrial Development Authority, Inc. has been established to assist in evaluating and considering approval of applications for financial participation by the Authority in commercial development projects. The City Council appoints a board and board members are removable by City Council. The City Council approves the authority’s annual budget. In the event of dissolution, title to all assets transfer to the City. Financial statement information can be obtained by contacting the Lewisville Industrial Development Authority, P.O. Box 299002, Lewisville, Texas 75029. The City of Lewisville, in conjunction with Denton County, created the Tax Increment Reinvestment Zone Number 1, City of Lewisville, Texas, to provide additional financing resources to further enhance the redevelopment of the Old Town area of the City. The City Council appoints a board, and board members are removable by the City Council. The City Council approves the zone’s annual budget. In the event of dissolution, title of all assets transfer to the City. Financial statement information can be obtained by contacting the Lewisville Tax Increment Reinvestment Zone Number 1, P. O. Box 299002, Lewisville, Texas 75029. 47 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 The City of Lewisville, in conjunction with Denton County, created the Tax Increment Reinvestment Zone Number 2, City of Lewisville, Texas, to provide additional financing resources to pay for infrastructure costs to facilitate a mixed-use development project on approximately 427 acres at the intersection of I-35 and SH121. The City Council appoints five members of the board and an additional two positions are reserved for appointment by other taxing units levying taxes within the Zone. The City Council may remove board members and approves the zone’s annual budget. Financial statement information can be obtained by contacting the Lewisville Tax Increment Reinvestment Zone Number 2, P. O. Box 299002, Lewisville, Texas 75029. In September 2002 the City of Lewisville voters approved, in a special election, the creation of the Lewisville Parks and Library Development Corporation. The Corporation was formed for the purpose of funding public parks, recreation projects, and library projects from revenues derived from a one-quarter cent sales tax within the City of Lewisville. The City Council appoints a board and board members are removable by the City Council. The City Council approves the corporation’s annual budget. In the event of dissolution, title of all assets transfer to the City. Financial statement information can be obtained by contacting the Lewisville Parks and Library Development Corporation, P. O. Box 299002, Lewisville, Texas 75029. B. 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 non-fiduciary activities of the City 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 statement of activities demonstrates the degree to which the direct expenses of a given function 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. Separate 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. 48 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund 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. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the City. The City reports the following major governmental funds: General Fund – The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Debt Service Fund – The City’s Debt Service Fund accounts for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds. General Capital Projects Fund – The General Capital Projects Fund is used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. 49 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 The City reports the following non-major governmental funds: Special Revenue Funds – The City’s Special Revenue Funds are used to account for revenue sources that are legally restricted to expenditures for specified purposes. They include the Hotel/Motel Tax Fund, Recreation Activity Fund, Grant Fund, Public Improvement District Tax Fund, Municipal Court Security Fund, Municipal Court Technology Fund, Police Asset Forfeiture Fund, Employee Benevolent Fund, Fire and Police Training Fund, Law Enforcement Officer Standard Education Fund (LEOSE), Donations Fund, Police Federal Forfeiture Fund, Juvenile Case Manager Fund, Lewisville Local Government Corporation, Public, Education and Government (PEG) Programming Fund, Lewisville Crime Control and Prevention District, and Lewisville Fire Control, Prevention, and Emergency Medical Services District. Castle Hills PID Capital Projects Fund – The City’s Castle Hills PID Capital Projects Fund accounts for the acquisition and construction of major capital facilities financed by the Castle Hills Public Improvement District. The City reports the following major proprietary fund: Water and Sewer Utility Enterprise Fund – The City’s Enterprise Fund is used to account for operations of the City’s sale of treated water and the disposal of sewage and solid waste for its citizens. Additionally, the government reports the following fund types: Internal Service Funds – The City’s Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments within the City. Self-Insurance Risk Fund – The City’s Self-Insurance Risk Fund accounts for revenues from premium charges to the departments. Expenses include claim payments, administrative costs, and reinsurance premiums for workers’ compensation, unemployment, and liability/property casualty programs. Health Insurance Risk Pool Fund – The City’s Health Insurance Risk Pool Fund accounts for revenues from premium charges to the departments, employee and retirees for insurance coverage. Expenses include claims payments, administrative costs, and reinsurance premiums for health and dental programs. Maintenance and Replacement Fund – The City’s Maintenance and Replacement Fund provides fleet maintenance services for City departments and accounts for the purchase of all vehicles and major equipment operated by the City. Departments pay monthly charges to provide funds for future replacement of capital outlay as well as to reimburse the fund for current fleet repairs and maintenance. 50 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Agency and Trust Funds – The City’s agency fund is custodial in nature and does not involve measurement of results of operations. The City’s trust fund is used to account for assets held by the City in a trustee capacity. Castle Hills Public Improvement District Debt Service Agency Fund – The City’s Castle Hills Public Improvement District Debt Service Agency Fund accounts for bond proceeds and related debt associated with the issuance of bonds held by the City as an agent for the Public Improvement District. Lewisville OPEB Liability Trust Fund – The City’s OPEB Liability Trust Fund accounts for the funding of post-employment healthcare benefits for retirees of the City and their dependents. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the City's water and sewer function and various other functions of the City and charges of the internal service funds to the water and sewer funds. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Program revenues include: 1) charges to customers or applicants for goods, services, or privileges provided; 2) operating grants and contributions; and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from non-operating 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 Enterprise Fund and of the City’s Internal Service Funds are charges to customers for sales and services. The City also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for Enterprise Funds and Internal Service 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. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. D. Cash, Investments, and Deposits The government’s cash is considered to be cash on hand and demand deposits. The City pools idle cash from all funds for the purpose of increasing income through coordinated investment activities. The City follows GASB 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools. Investments held by the City are reported at fair value. Interest earnings are allocated to the respective funds based upon each fund’s relative balance in the pool. 51 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 E. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” or “interfund receivable/payable.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable government funds indicating that they are not available for appropriation and are not expendable, available financial resources. F. Property Taxes Property taxes attach as an enforceable lien on property located in the City as of January 1. Taxes are levied on October 1 and are due and payable on or before January 31 of the following year. The Denton County Tax Assessor/Collector’s office bills and collects the City’s property taxes. City property tax revenues are deferred when levied and are recognized as revenue when collected. The statutes of the State of Texas do not prescribe a legal limit. However, Article XI, Section 5 of the Texas Constitution, applicable to cities of more than 5,000 population that have adopted a Home Rule charter, limits the ad valorem tax rate to $2.50 per $100 assessed valuation. For the fiscal year ended September 30, 2013, the City had a tax margin of $2.05979 per $100 assessed valuation based upon the maximum rates described above. G. Inventories of Supplies Inventories of supplies are valued at weighted average cost and consist of warehouse supplies, postage and gasoline purchased by the City to use in its vehicles. The cost of the inventories is recorded as an expense when consumed rather than when purchased. H. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid in the government-wide and fund financial statements, as the City utilizes the consumption method of accounting. These items consist primarily of software support, training registration, subscriptions, and prepaid insurance. I. Restricted Assets Certain proceeds of Enterprise Fund Revenue Bonds and other amounts designated for capital improvements as well as certain resources set aside for their repayment are classified as restricted assets on the statement of net assets because their use is limited by applicable bond covenants. 52 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 J. Property, Plant, and Equipment Capital assets, which include property, plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of one year. All purchased capital assets are valued at cost where historical records are available and at an estimated historical cost where no historical records exist. Donated capital assets are recorded at estimated fair market value at the date of the donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. The total interest expense capitalized by the City during the current fiscal year was $500,521. The City has established the Maintenance and Replacement Internal Service Fund to account for all City-owned vehicles. Charges for use of the vehicle in the form of lease payments are made by the City departments to the Maintenance and Replacement Internal Service Fund to provide for future acquisitions and replacement of City-owned vehicles. Property, plant, and equipment of the City, is depreciated using the straight line method over the following estimated useful lives: Assets Years Water and sewer system Infrastructure Buildings Other improvements Machinery and equipment Vehicles Servers 50 30 33 4-50 3-50 2-20 3 K. Compensated Absences It is the City’s policy to permit employees to accumulate certain earned but unused vacation, comp time, and sick pay benefits. Sick leave can be accrued up to 200 days but the City will compensate only for hours in excess of 30 days up to a maximum of 90 days upon termination. All vacation pay is accrued when incurred in the government-wide, proprietary, and component unit fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured. Typically, the General Fund has been used in prior years to liquidate such amounts in governmental funds. 53 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 L. Long-Term Obligations In the government-wide financial statements and proprietary fund statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight line method, which approximates the effective interest rate method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums and discounts received on debt issuances are reported as other financing sources or uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. M. Fund Equity In the fund financial statements, governmental funds establish fund balance classifications that are comprised of a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of resources reported. Fund balances classified as non-spendable represent amounts that are not in a spendable form (such as inventory). Fund balances classified as restricted are balances with constraints placed on the use of resources by creditors, grantors, contributors, or laws and regulations of other governments. Fund balances classified as committed can only be used for specific purposes pursuant to constraints imposed by the City Council through an ordinance. Assigned fund balances are constrained by the intent to be used for specific purposes but are neither restricted nor committed. Assignments are made by City management based on council direction. Unassigned fund balance is available for any purpose but is only reported in the General Fund. For the classification of Governmental Fund balances, the City considers an expenditure to be made from the most restrictive first when more than one classification is available. For further details of the various fund balance classifications refer to Note 13. 54 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 N. Budgets Budgets are adopted on a basis consistent with GAAP. Annual appropriated budgets are adopted for the General, Hotel/Motel Tax Special Revenue, Recreation Activity Special Revenue, Grant Special Revenue, Public Improvement District Tax Special Revenue, Municipal Court Security Special Revenue, Municipal Court Technology Special Revenue, Police Asset Forfeiture Special Revenue (State and Federal), Fire and Police Training Special Revenue, Law Enforcement Officer Standards and Education Special Revenue, Donations Special Revenue, Juvenile Case Manager Special Revenue, PEG Programming Special Revenue, Lewisville Crime Control and Prevention District, Lewisville Fire Control, Prevention, and Emergency Medical Services District, Debt Service, Water and Sewer Utility Enterprise, Self-Insurance Risk Internal Service, Health Insurance Risk Pool Internal Service, Maintenance and Replacement Internal Service, Lewisville Parks and Library Development Corporation (4B Sales Tax), OPEB Liability Trust, Old Town Tax Increment Reinvestment Zone, and Tax Increment Reinvestment Zone #2 Funds. All annual appropriations lapse at fiscal year-end. Long range financial plans are adopted for all capital project funds with all capital project appropriation balances to roll forward. O. Deficit Net Position The Lewisville Parks and Library Development Corporation has an agreement with the City of Lewisville regarding the construction, maintenance and operation of improvements for public park and library projects that states all capital assets shall be owned and operated by the City. Therefore, all of the Corporation’s capital assets are transferred to the City annually and recorded as contribution expense. The cumulative effects of these annual transfers along with results of operations have resulted in a deficit net position balance of $19,119,935 at September 30, 2013. 2. CASH, INVESTMENTS, AND DEPOSITS At year end, the government’s carrying amount of deposits was $32,003,144 and the bank balance was $33,724,298. All bank balances, including the bank balance of the discretely presented component units, were covered by Federal Depository Insurance or by collateral held by a third-party custodian. The custodian serves contractually as the City’s agent. Additionally, the City has an account under a safekeeping agreement with J.P. Morgan Chase Bank, NA. The U.S. Government Treasury and Agency investments clear via the Federal Reserve System through this account upon purchase, sale, or maturity. All assets in the account are held in the City’s name. 55 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 The City is authorized to make direct investments in the following: 1. U.S. Treasury securities maturing in less than three years; 2. Short-term obligations of U.S. Government agencies which are guaranteed by the full faith and credit of the United States of America as to principal and interest; 3. Fully insured or collateralized certificates of deposits at commercial banks; 4. Repurchase agreements collateralized by U.S. Treasury or U.S. Government agency securities in accordance with a master repurchase agreement approved by the Investment Committee; 5. Direct or unconditionally guaranteed obligations of the State of Texas; and 6. Common trusts administered by Texas banks with assets consisting of all of the above except certificates of deposit. Investments at September 30, 2013 consisted of U.S. Government securities held by the City’s agent in the City’s name. The carrying amount of these investments at September 30, 2013 was $127,884,691. At September 30, 2013, the City also had $51,781,029 invested with TexPool, an investment pool for state and local governments in Texas. The City’s portfolio average yield, including TexPool, was 0.32290% in 2013. The State Comptroller of Public Accounts exercises oversight responsibilities over TexPool, the Texas Local Government Investment Pool. Oversight includes the ability to significantly influence operations, designation of management, and accountability for fiscal matters. Additionally, the State Comptroller has established an advisory board composed of both participants in TexPool and other persons who do not have a business relationship with TexPool. The Advisory Board members review the investment policy and management fee structure. Finally, TexPool is rated AAAm by Standard & Poors. As a requirement to maintain the weekly rating portfolio, information must be submitted to Standard & Poors, as well as the office of the Comptroller of Public Accounts for review. TexPool operates in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940. TexPool uses amortized cost rather than market value to report net assets to compute share prices. Accordingly, the fair value of the position in TexPool is the same as the value of TexPool shares. At year end, the City’s investment balances were as follows: Carrying Amount U.S. Government Agency securities $ Investment in TexPool Total investments Fair Value 127,884,691 $ 51,781,029 $ 179,665,720 56 $ Weighted Average Maturity (Days) 127,884,691 617 51,781,029 1 179,665,720 375 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment or a deposit. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. As a means of limiting its exposure to fair value losses arising from rising interest rates, the City’s investments with TexPool have maturities of less than one year or in U.S. government securities that are not highly sensitive to changes in interest rates. In accordance with its investment policy, the City further manages its exposure to declines in fair values by limiting the weighted average maturity of its investment portfolio to less than one and one-half years. Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization (NRSROs). All investment pools policies require a rating of AA or better from a nationally recognized rating agency. While State law allows investments in commercial paper and corporate bonds that meet rating guidelines issued by NRSROs, the City’s policy further restricts investments purchases, aside from those managed by pools, to obligations of the United States or its agencies and instrumentalities; direct obligations of the State of Texas or its agencies and instrumentalities; and other obligations, the principal of and interest on which are unconditionally guaranteed or insured by, or backed by, the full faith and credit of the State of Texas or the United States or its agencies and instrumentalities. The City’s investments in U.S. Government Agency securities (Federal Home Loan Bank, Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and Federal Farm Credit Bank) are rated AA+ by Standard & Poors, and AAA and Aaa by Fitch and Moody’s, respectively. The investment in Texas Local Government Pools (TexPool) carried a credit rating of AAAm by Standard and Poor’s as of September 30, 2013. Concentration of Credit Risk In accordance with the City’s investment policy, investments are issued or explicitly guaranteed by the U.S. Government or in external investment pools which are not considered to provide a concentration of credit risk. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. 57 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 The Public Funds Investment Act of Texas and the City’s investment policy requires that a financial institution secure deposits made by state or local government entities by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the government unit). The market value of the pledged securities in the collateral pool must equal at least the bank balances less FDIC insurance at all times. The City’s investment policy further limits exposure to custodial risk on investments through the use of third party safekeeping agreements, delivery versus payment, and limiting types of investments listed earlier in this note. 3. RECEIVABLES Government-wide receivables as of year end, including the applicable allowances for uncollectable accounts, are as follows: General Receivables Property taxes Franchise taxes Sales taxes Mixed drink taxes Accounts Unbilled trade accounts Interest Court Grants Ambulance Gross total receivables Less: allowance Net total receivables $ 430,750 1,774,502 4,046,096 122,579 1,430,571 269,311 19,012 1,378,578 1,450,051 10,921,450 (2,362,640) $ 8,558,810 $ $ Water and Sewer Receivables Property taxes Franchise taxes Sales taxes Mixed drink taxes Accounts Unbilled trade accounts Interest Court Grants Ambulance Gross total receivables Less: allowance Net total receivables $ $ 1,764,168 3,140,895 51,278 4,956,341 (354,961) 4,601,380 General Capital Projects Debt Service 168,148 741 168,889 (120,367) 48,522 $ $ $ 17,737 9,457 27,194 27,194 58 $ $ Total Proprietary Funds Internal Service $ 60,716 60,716 60,716 Non-Major and Other Funds $ $ 1,781,905 3,140,895 60,735 4,983,535 (354,961) 4,628,574 924,955 409,462 6,315 303,547 1,644,279 (13,851) 1,630,428 Total All Funds $ $ 598,898 1,774,502 4,971,051 122,579 3,621,938 3,410,206 147,519 1,378,578 303,547 1,450,051 17,778,869 (2,851,819) 14,927,050 Total Governmental Funds $ $ 598,898 1,774,502 4,971,051 122,579 1,840,033 269,311 86,784 1,378,578 303,547 1,450,051 12,795,334 (2,496,858) 10,298,476 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 4. INTERFUND TRANSACTIONS Interfund transactions and balances for the fiscal year 2013 were as follows: Due to/from other funds Receivable Fund General Fund Payable Fund Non-major Governmental $ Amount 238,910 Purpose Short-term funding of deficit cash Interfund Transfers Transfers In General Transfers Out Water and Sewer Utility General Nonmajor Governmental 150,952 Water and Sewer Utility General Capital Projects General Capital Projects Nonmajor Governmental Nonmajor Governmental Internal Service Debt Service General Nonmajor Governmental Nonmajor Governmental General Internal Service 50,000 7,157,216 98,462 8,283 122,819 1,000,000 12,373,247 $ $ 59 Amount 3,785,515 Purpose Payments in lieu of taxes, franchise fee, and indirect cost reimbursement Indirect cost reimbursement and excess funds transfer Reimburse debt service Financing of capital improvements Financing of capital improvements Excess fund consolidation Matching funds Excess funds transfer CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 5. CAPITAL ASSETS Capital asset activity for the year ended September 30, 2013 was as follows: Beginning Balance Gove rnmental Activitie s: Governmental Funds Capital assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital assets, being depreciated: Land improvements Buildings Other improvements Machinery and equipment Total capital assets being depreciated Accumulated depreciation: Land improvements Buildings Other improvements Machinery and equipment Total accumulated depreciation Total capital assets being depreciated, net Total governmental funds capital assets, net $ Internal service funds Capital assets, being depreciated: Other improvements Machinery and equipment Total internal service assets being depreciated Accumulated depreciation: Other improvements Machinery and equipment Total accumulated depreciation Total internal services funds capital assets, net Governmental activities capital assets, net Increases Ending Balance Transfers 48,557,117 15,148,762 439,675 11,270,740 (142,075) 222,245 (12,296,495) 63,705,879 11,710,415 (142,075) (12,074,250) 63,199,969 335,232,709 72,104,908 24,206,426 25,724,148 2,117,514 873,333 (9,725) 11,145,502 (29,651) 291,220 667,179 348,495,725 72,075,257 24,497,646 27,254,935 457,268,191 2,990,847 (9,725) 12,074,250 472,323,563 (139,143,478) (22,896,186) (8,518,393) (19,868,660) (190,426,717) (11,621,695) (2,138,983) (2,025,005) (1,408,669) (17,194,352) 9,725 9,725 266,841,474 (14,203,505) - 330,547,353 (2,493,090) (142,075) - 327,912,188 274,272 24,706,564 1,414,907 (588,929) - 274,272 25,532,542 24,980,836 1,414,907 (588,929) - 25,806,814 (99,383) (18,942,302) (19,041,685) (20,125) (1,866,864) (1,886,989) 569,351 569,351 - (119,508) (20,239,815) (20,359,323) (19,578) - 5,447,491 5,939,151 $ Decreases 336,486,504 (472,082) $ (2,965,172) 60 $ (161,653) $ - (150,765,173) (25,035,169) (10,543,398) (21,267,604) (207,611,344) 12,074,250 $ 49,219,037 13,980,932 - 264,712,219 $ 333,359,679 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Beginning Balance Busine ss-type activities: Capital assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated $ 2,368,892 25,903,371 Increases $ 8,317,323 Decreases $ - Ending Balance Transfers $ (21,316,426) $ 2,368,892 12,904,268 28,272,263 8,317,323 - (21,316,426) 15,273,160 Capital assets, being depreciated: Land improvements Buildings Other improvements Water system Sewer system Machinery and equipment Total capital assets being depreciated 106,700 1,131,504 658,008 140,191,934 100,766,762 4,224,505 505,604 158,333 224,474 - 19,098,943 2,104,791 112,692 106,700 1,131,504 658,008 159,796,481 103,029,886 4,561,671 247,079,413 888,411 - 21,316,426 269,284,250 Accumulated depreciation: Land improvements Buildings Other improvements Water system Sewer system Machinery and equipment Total accumulated depreciation (78,352) (385,691) (185,979) (40,800,608) (33,107,151) (3,259,312) (77,817,093) Business-type activities capital assets, net Total capital assets being depreciated, net Total capital assets, net $ 169,262,320 197,534,583 (2,379) (28,846) (43,394) (3,194,186) (2,079,710) (326,060) (5,674,575) $ (4,786,164) 3,531,159 - $ - - $ (80,731) (414,537) (229,373) (43,994,794) (35,186,861) (3,585,372) (83,491,668) 21,316,426 - $ 185,792,582 201,065,742 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government Finance Community relations/tourism Human resources Municipal court Information technology Police Fire Public works Parks and leisure Community development Internal service funds Total depreciation expense - governmental activities Business-type activities: Water and sewer 61 $ $ 2,305,218 3,851 120,572 719 8,697 194,631 708,805 322,887 10,287,864 3,049,860 191,248 1,886,989 19,081,341 $ 5,674,575 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Outstanding commitments at September 30, 2013 under authorized construction contracts were approximately $7.0 million. These outstanding commitments are to be financed by available cash and investment balances, which include proceeds from previous bond issuances. 6. EMPLOYEE RETIREMENT PLAN Plan Description The City provides pension benefits for all its full-time employees through a non-traditional, joint contributory, hybrid defined benefit plan in the state-wide Texas Municipal Retirement System (TMRS), an agent multiple-employer public employee retirement system. The plan provisions that have been adopted by the City are within the options available in the governing state statues of TMRS. Upon retirement, benefits depend upon the sum of the employee’s contributions, with interest, and the City-financed monetary credits, with interest. City-financed monetary credits are composed of three sources: prior service credits, current service credits, and updated service credits. At the inception of the City’s plan, the City granted monetary credits for service rendered before the plan began (or prior service credits) of a theoretical amount at least equal to two times what would have been contributed by the employee, with interest (3% annual), prior to establishment of the plan. Monetary credits for service since the plan began (or current service credits) are 200% of the employee’s accumulated contributions. In addition, the City has granted on an annually repeating basis another type of monetary credit referred to as an updated service credit. The updated service credit is calculated by taking the difference between this hypothetical account balance and the actual reserve balance. It is then increased by 3% each year, not the actual interest credited to member accounts in previous years, and increased by the City 2 to 1 match currently in effect. The resulting sum is then multiplied by 75% and compared to the member’s prior year updated service credit balance increased by the actual City match and actual interest credited. If the hypothetical calculation exceeds the actual calculation, the member is granted a monetary credit (or updated service credit) equal to the difference between the hypothetical calculation and the actual calculation. 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 payment options: retiree life only; one of three lifetime survivor options; or one of three guaranteed term options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum distribution (PLSD) in an amount equal to 12, 24, or 36 monthly payments under the retiree life only option, which cannot exceed 75% of the total member deposits and interest. 62 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 The City elected to increase the annuities (annuity increases) of its retirees, either annually or on an annually repeating basis, effective January 1 of a calendar year. The City has adopted annuity increases at the rate of 70% of the increase (if any) in the Consumer Price Index—all Urban Consumers (CPI-U) between the December preceding the member’s retirement date and the December one year before the effective date of the increase, minus any previously granted increases. A member is vested after five years and can retire at age 60 and above with five or more years of service or at any age with 20 years of service. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS and within the actuarial constraints also in the statutes. Contributions The contribution rate for employees is 7% of employee gross earnings and the City’s matching ratio is currently 2 to 1, both as adopted by the governing body of the City. Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Projected Unit Credit actuarial cost method (effective with the December 31, 2007 actuarial valuation). This rate consists of the normal cost contribution rate and the prior service cost contribution rate, which is calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the portion of an active member’s projected benefit allocated annually; the prior service contribution rate amortizes the unfunded (overfunded) actuarial liability (asset) over the applicable period for the City. Both the normal cost and prior service contribution rates include recognition of the projected impact of annually repeating benefits, such as updated service credits and annuity increases. The City contributes to the TMRS Plan at an actuarially determined rate. Contributions are made monthly by both the employees and the City. Since the City must know its contribution rate in advance for budgetary purposes, there is a one-year delay between the actuarial valuation that serves as the basis for the rate and the calendar year when the rate goes into effect (i.e. December 31, 2012 valuation is effective for rates beginning January 2014). 63 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 The annual pension costs and net pension obligation is as follows: Net Pension Obligation FY 2012-13 Annual required contribution (ARC) Interest on net pension obligation Adjustment to the ARC Annual pension costs (APC) Contributions made Increase (decrease) in net pension obligation Net pension obligation, beginning of year Net pension obligation, end of year Actuarial valuation date $ FY 2011-12 7,552,936 433,870 (379,131) 7,607,675 (7,459,191) 148,484 6,198,140 6,346,624 $ $ $ FY 2010-11 7,838,904 382,287 (309,105) 7,912,086 (6,811,107) 1,100,979 5,097,161 6,198,140 Three-Year Trend Information FY 2012-13 FY 2011-12 12/31/2012 12/31/2011 Annual pension cost (APC) Actual contributions made Percentage of APC contributed Net pension obligation $ $ 7,607,675 7,459,191 98.0% 6,346,624 64 $ $ 7,912,083 6,811,107 86.1% 6,198,140 $ $ 8,535,905 249,810 (205,863) 8,579,852 (6,813,495) 1,766,357 3,330,804 5,097,161 FY 2010-11 12/31/2010 $ $ 8,579,852 6,813,495 79.4% 5,097,161 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 The required contribution rates for fiscal year 2013 were determined as part of the December 31, 2010 and 2011 actuarial valuations. Additional information as of the latest actuarial valuation, December 31, 2012, also follows: Valuation date Schedule of Actuarial Assumptions and Valuations FY 2012-13 FY 2011-12 12/31/2012 12/31/2011 FY 2010-11 12/31/2010 Actuarial cost method Projected Unit Credit Projected Unit Credit Projected Unit Credit Amortization method Level Percent of Payroll Level Percent of Payroll Level Percent of Payroll Remaining amortization period 25.3 years; closed period 26.2 years; closed period 27.2 years; closed period 30 years 30 years 30 years 10-year Smoothed Market 10-year Smoothed Market 10-year Smoothed Market Investment rate of return * 7.00% 7.00% 7.00% Projected salary increases * Varies by age and service Varies by age and service Varies by age and service 2.10% 2.10% 2.10% 3.00% 3.00% 3.00% Amortization Period for new Gains/Losses Asset valuation method Actuarial assumptions: Cost-of-living adjustments * Includes inflation at Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Actuarial calculations are based on the benefits provided under the terms of the substantive plan in effect at the time of each valuation, and reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. 65 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 The schedule of funding progress below presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability of benefits. Actuarial valuation date Schedule of Actuarial Liabilities and Funding Progress FY 2012-13 FY 2011-12 12/31/2012 12/31/2011 Actuarial value of assets Actuarial accrued liability Funded ratio Unfunded actuarial accrued liability (UAAL) Annual covered payroll UAAL as a percentage of covered payroll $ 172,168,275 211,137,970 81.5% 38,969,695 40,454,089 96.3% $ 157,296,848 198,973,790 79.1% 41,676,942 39,830,706 104.6% FY 2010-11 12/31/2010 $ 144,080,655 191,546,520 75.2% 47,465,865 39,819,534 119.2% TMRS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information (RSI) for TMRS. The report also provides detailed explanations of the contributions, benefits and actuarial methods and assumptions used by the System. This report may be obtained by writing to TMRS, P.O. Box 149153, Austin, TX 78714-9153 or by calling 800-924-8677. In addition, the report is available on TMRS’ website at www.TMRS.com. 7. COMMITMENTS AND CONTINGENCIES Water Contract The City purchases all of its raw water from the City of Dallas. The raw water rate for this contract during the fiscal year was $0.4587 per 1,000 gallons. The City of Dallas reserves the right and power during the term of this contract to set reasonable revised rates from time to time. Legal The City is a defendant in various lawsuits. Although the outcome of these lawsuits is presently not determinable, it is the opinion of the City’s attorney that the resolution of these matters will not have a materially adverse effect on the financial condition of the City. Grant Audit The City receives federal and state grants for specific purposes that are subject to review and audit by federal and state agencies. Such audits could result in a request for reimbursement by the federal and state agencies for expenditures disallowed under the terms and conditions of the appropriate agreement. In the opinion of City management, such disallowances, if any, will not be significant to the City’s financial position. 66 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 8. OTHER POST EMPLOYMENT BENEFITS The City provides a $15,000 fully paid life insurance policy upon retirement with ten years of service with the City of Lewisville. The City pays 100 percent of the premium cost for the life insurance policy. Expenditures for this benefit are recognized as employees retire and the insurance policy is purchased. The City recognized expenditures of $114,600 for the year ended September 30, 2013 to purchase life insurance policies for sixteen eligible retirees. Lewisville OPEB Liability Trust Fund The City established an irrevocable trust in 2008 for the systematic funding of post-employment health benefits as a single-employer, defined benefit plan. Plan assets may be used only for the payment or reimbursement of benefits provided to retirees, in accordance with the terms of the plan. Summary of Significant Accounting Policies Financial statements are prepared using the accrual basis of accounting. Plan member contributions are recognized when due. The City’s contributions are recognized when due and the City has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value. Plan Descriptions and Contribution Information The City provides comprehensive group medical benefits for employees at retirement who meet the eligibility requirements for postretirement benefits. Eligibility requirements are (1) age 60 and 5 years of service with the City, or (2) 20 years of service with Texas Municipal Retirement System, the City’s pension provider. Election must be made at time of retirement to remain in the plan. Continuation of coverage is subject to the payment of required contributions by participating retirees and dependents. The City contributes a fixed amount toward each retiree’s monthly premium, based on the tenure with the City. The City’s substantive plan places a zero percent (0%) cap on future contribution increases. The employee remains on the plan until age 65 when they are moved to a fully insured Medicare supplement plan. The City contributes a flat $50 per month toward the retiree’s fully insured premium. Membership of the plan consists of the following at October 1, 2012, the date of the latest actuarial valuation: Number of retirees and beneficiaries receiving benefits Active plan members 67 79 631 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Funding Status and Funding Progress Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the health care cost trend. Actuarially determined amounts are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress presents multiyear trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Schedule of Funding Status and Funding Progress Actuarial Valuation Date 10/1/2012 10/1/2011 Actuarial Value of Assets $ 3,333,200 $ 2,738,100 Actuarial Accrued Liability (AAL) 4,787,900 5,118,100 Unfunded AAL (UAAL) 1,454,700 2,380,000 Funded Ratio 69.6% 53.5% Fiscal Year Covered Payroll $ 40,159,835 $ 41,107,984 UAAL as a Percentage of Covered Payroll 3.6% 5.8% $ $ 10/1/2010 2,637,000 4,732,000 2,095,000 55.7% 39,581,047 5.3% The schedule of employer contributions present trend information about the amounts contributed to the plan by the City in comparison to the ARC, an amount that is actuarially determined in accordance with the parameters of GASB Statement 43. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost for each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. Schedule of Employer Contributions and Net OPEB Obligation Contribution Year Annual Required Contribution Interest on net OPEB obligation Adjustment to annual required contribution Annual OPEB cost Contributions made Change in OPEB obligation Net OPEB obligation (asset), beginning of year Net OPEB obligation (asset), end of year $ $ $ $ Percentage of annual OPEB cost contributed 9/30/2013 366,600 366,600 366,600 100.0% $ $ $ $ 9/30/2012 359,300 359,300 359,300 100.0% $ $ $ $ 9/30/2011 494,600 494,600 494,600 100.0% Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. 68 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets consistent with the long-term perspectives of the calculations. Schedule of Actuarial Assumptions and Valuations Valuation date Actuarial cost method Amortization method Amortization period Asset valuation method Actuarial assumptions: Investment rate of return General inflation 10/1/2012 Projected Unit Credit Level dollar, open 30 years Market 10/1/2011 Projected Unit Credit Level dollar, open 30 years Market 10/1/2010 Projected Unit Credit Level dollar, open 30 years Market 7.50% 3.00% 7.50% 3.00% 7.50% 3.00% Healthcare cost trend rate is assumed to be greater than 3.0% annually, however is not applicable for purposes of this valuation, since the City’s future costs are set at a fixed amount. The Lewisville OPEB Liability Trust Fund does not issue a separate financial report. Additional information can be found in the Agency and Trust Funds section of this report. 9. COMPONENTS OF RESTRICTED ASSETS Restricted assets reported in the Enterprise Funds statement of net position at September 30, 2013 are comprised of the following: Deposits Money held in escrow Revenue bond current debt service accounts Revenue bond future debt service accounts Revenue bond construction accounts Total $ 1,489,877 30,583 3,430,343 3,659,601 36,651,560 $ 45,261,964 The related liabilities payable from restricted assets at September 30, 2013 are as follows: Deposits payable Escrow payable Accrued interest payable Contracts and retainage payable Current maturities of bonds payable $ 1,489,877 30,624 261,641 733,297 5,140,000 Total $ 7,655,439 The ordinance authorizing the Waterworks and Sewer System Revenue Bonds requires that the City establish a sinking fund (recorded in the revenue bond current debt service accounts) in an amount not less than the amount required to fully pay principal and interest payments as they come due. 69 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 In addition, the ordinance requires that the City establish a reserve fund (recorded in the revenue bond future debt service accounts) to provide for payment of principal and interest in the event that other funds available for such purposes are insufficient. At September 30, 2013, the balances in both the sinking and reserve funds are sufficient to satisfy such bond ordinance requirements. The ordinance further requires that the proceeds from the sale of the Revenue Bonds be expended for making improvements and extensions to the City’s combined waterworks and sanitary sewer system. The proceeds are maintained in the revenue bond and capital projects construction accounts until such time as needed to fund the construction program. The amount of net position restricted for revenue bond retirements is detailed as follows: Revenue bond current debt service accounts Revenue bond future debt service accounts $ $ 3,430,343 3,659,601 7,089,944 Less: Accrued interest payable Current maturities of bonds payable $ 261,641 5,140,000 5,401,641 Restricted for bond retirement $ 1,688,303 10. DEFERRED COMPENSATION PLAN The City offers its employees a choice between two deferred compensation plans (the Plan) created in accordance with Internal Revenue Code Section 457. One Plan is administered and investments managed by Nationwide Retirement Solutions (NRS). The second Plan is administered by AIG Valic. The assets and liabilities amounted to $26,886,475 for Nationwide and $34,430,335 for AIG Valic at September 30, 2013. The plans include numerous types of investments as participants elect how their salary deferrals are invested. Investment options include the following: fixed annuities, variable annuities, and life insurance. The Plans are available to all City employees and permit them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or an unforeseeable emergency. All amounts of compensation deferred under the Plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are held in trust for the exclusive benefit of the participants and their beneficiaries. 70 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 It is the opinion of the City’s management that the City has no liability for those losses under the Plan but does have the duty of due care that would be required of an ordinary prudent investor. The City provides limited administrative duties. In accordance with GASB Statement No. 32, the deferred compensation plans are not included in the financial statements of the City. 11. LONG TERM LIABILITIES General Obligation Bonds General Obligation Bonds are direct obligations and pledge the full faith and credit of the City. Bonds generally are issued as 16-year serial bonds, except for refunding issues, with level debt service requirements each year. General Obligation Bonds outstanding as of September 30, 2013 are as follows: Purpose General Government Interest Rates 1.50% - 5.00% Governmental Activities Amount $ 75,555,000 Business-Type Activities Amount $ 3,955,000 Certificates of Obligation Certificates of Obligation are direct obligations of the City, payable from a combination of ad valorem taxes and a limited pledge of surplus revenues of the City’s waterworks and sewer system. Certificates of Obligation outstanding as of September 30, 2013 are as follows: Purpose Park and Library Improvements Arts Activity Center and Improvements Interest Rates 4.00% - 5.00% 4.00% - 5.00% Total Governmental Activities Amount $ 16,390,000 $ 7,575,000 $ 71 23,965,000 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Annual debt service requirements to maturity for Government Activities General Obligation Bonds and Certificates of Obligation, including interest of $30,173,150 are as follows: Year Ended September 30 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2032 Principal Governmental Activities Interest Total $ 7,130,000 7,425,000 7,810,000 7,645,000 7,720,000 36,125,000 20,145,000 5,520,000 $ 4,107,824 3,736,773 3,402,094 3,070,783 2,766,762 9,359,131 3,278,958 451,025 $ 11,237,824 11,161,773 11,212,094 10,715,783 10,486,762 45,484,131 23,423,958 5,971,025 $ 99,520,000 $ 30,173,350 $ 129,693,350 During the year, the City issued $12,455,000 of General Obligation Bonds, Series 2013. Proceeds from the sale of the bonds will be used to provide funds for constructing improvements to the City’s streets, sidewalks, and related drainage improvements. Revenue Bonds The City also issues bonds where the City pledges income derived from acquired or constructed assets to pay debt service. Revenue Bonds outstanding, at September 30, 2013, are as follows: Purpose Water supply and waste water treatment Less-Current maturities payable from restricted assets 72 Interest Rates 1.00% - 5.00% Business-Type Activities Amount $ 46,050,000 5,140,000 $ 40,910,000 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Annual debt service requirements to maturity, for Business-type Activities Revenue Bonds and General Obligation Bonds, including interest of $11,208,876 are as follows: Year Ended September 30 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029 Business-Type Activities Interest Principal Total $ 5,140,000 4,970,000 4,930,000 4,460,000 4,625,000 16,630,000 8,820,000 430,000 $ 1,808,775 1,594,938 1,404,955 1,230,945 1,065,739 3,312,809 779,965 10,750 $ 6,948,775 6,564,938 6,334,955 5,690,945 5,690,739 19,942,809 9,599,965 440,750 $ 50,005,000 $ 11,208,876 $ 61,213,876 There are a number of limitations and restrictions contained in the various bond indentures. As of September 30, 2013, the City was in compliance with all limitations and restrictions. During the year, the City issued $5,205,000 of Waterworks and Sewer System Revenue Bonds, Series 2013. Proceeds from the sale of the bonds will be used for the purpose of constructing, acquiring, and installing improvements, additions and extensions to the City’s waterworks and sewer system. In previous years, the City has defeased certain general obligation, certificates of obligation, and revenue bonds by placing funds into an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and liability for the defeased bonds are not included in the City’s financial statements. At September 30, 2013, $3,160,000 of outstanding general obligation bonds and $13,085,000 of certificates of obligations are considered defeased. 73 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Changes in Long-Term Liabilities Long-term liability activity for the year ended September 30, 2013 was as follows: Beginning Balance Governmental activities: Bonds payable and Certificates of obligation Less deferred amount on refunding Premium Compensated absences Net pension obligation Governmental activities long-term liabilities Business type activities: Bonds payable Less deferred amount on refunding Premium Discount Compensated absences Net pension obligation Business type activities long-term liabilities $ Additions $ 12,455,000 (726,214) 2,161,421 7,150,006 5,477,154 1,276,220 4,848,156 132,151 82,465 (231,545) (4,505,961) - $ 18,711,527 $ (11,675,041) $ 115,183,853 $ 12,060,061 $ $ $ 50,005,000 $ 5,140,000 108,147,367 $ 50,115,000 (392,802) 1,156,801 (68,559) 794,706 673,071 52,278,217 5,205,000 $ 481,262 451,333 14,848 $ 6,152,443 (7,020,000) (5,315,000) $ (5,859,642) $ (643,749) 3,206,096 7,492,201 5,609,305 45,535 (127,275) 6,268 (469,170) $ 99,520,000 Due Within One Year 94,085,000 $ $ Ending Balance Reductions 4,930,061 - (347,267) 1,510,788 (62,291) 776,869 687,919 $ 52,571,018 7,130,000 433,595 $ 5,573,595 In general, the General fund has been used in prior years to liquidate other long-term liabilities for the governmental activities of the City. Component Unit Bonded Indebtedness On September 14, 2002 voters approved the imposition of an additional sales and use tax of onequarter of one (0.25%) percent for parks and library purposes. The tax became effective on January 1, 2003 and collections began in March 2003. The sales tax is collected solely for the benefit of the Lewisville Parks and Library Development Corporation (a non-profit corporation) established by the City to administer sales tax collections and projects. Proceeds of Certificates of Obligation issued by the City in 2004 were utilized to finance the construction of park facilities and library improvements. Certificates of Obligation issued by the City in 2007 for the Lewisville Parks and Library Development Corporation and the Tax Increment Reinvestment Zone Number 1 (TIRZ, also known as Old Town) component units were utilized for constructing an athletic complex, an arts activity center, parking lot and related improvements. 74 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Note Payable to Primary Government / Note Receivable From Component Unit The Lewisville Parks and Library Development Corporation (“LPLDC”) has entered into an agreement with the City to reimburse the City for annual debt service costs associated with the Series 2004 and Series 2007A Combination Tax and Revenue Certificates of Obligation. In addition, the LPLDC entered into an additional agreement to repay $12,490,000 advanced to the LPLDC in 2012 to defease certain previously issued certificates of obligation. The Tax Increment Reinvestment Zone (“TIRZ”) has entered into an agreement with the City to reimburse the City for annual debt service costs associated with the Series 2007B Combination Tax and Revenue Certificates of Obligation. The outstanding obligations as of September 30, 2013, $28,880,000 and $7,575,000, respectively, have been recorded as a non-current liability of the LPLDC and TIRZ and as a non-current asset of the governmental activities in the statement of net position. Annual debt service requirements on the aforementioned Note Payable for the LPLDC are as follows: Year Ended September 30 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2032 Principal LPLDC - Note Payable Interest Total $ 1,525,000 1,590,000 1,655,000 1,725,000 1,795,000 10,160,000 5,965,000 4,465,000 $ 1,218,259 1,149,834 1,080,659 1,010,159 939,759 3,524,013 1,666,919 424,650 $ 2,743,259 2,739,834 2,735,659 2,735,159 2,734,759 13,684,013 7,631,919 4,889,650 $ 28,880,000 $ 11,014,252 $ 39,894,252 Annual debt service requirements on the aforementioned Note Payable for the TIRZ are as follows: Year Ended September 30 2014 Principal $ 2015 2016 2017 2018 2019-2023 2024-2028 TIRZ - Note Payable Interest 205,000 $ 245,000 295,000 330,000 380,000 2,715,000 3,405,000 $ 334,941 Total $ 324,816 312,666 298,604 283,579 1,118,990 351,547 7,575,000 $ 75 3,025,143 539,941 569,816 607,666 628,604 663,579 3,833,990 3,756,547 $ 10,600,143 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 A summary of changes in discretely presented component unit long-term debt follows: Beginning Balance LPLDC activities: Notes payable: Notes payable to Primary Government Premium Less deferred amount on refunding Compensated absences Net pension obligation LPLDC activites total: TIRZ activities: Notes payable: Notes payable to Primary Government Premium TIRZ activities total: Component unit long-term liabilities $ 30,325,000 1,747,044 Additions $ - (980,042) 31,807 47,915 31,171,724 41,521 1,485 43,006 7,740,000 15,692 7,755,692 - $ 38,927,416 $ 43,006 Ending Balance Reductions $ (1,445,000) (148,744) $ 83,715 (45,488) (1,555,517) $ (896,327) 27,840 49,400 29,659,213 (165,000) (1,066) (166,066) $ (1,721,583) 28,880,000 1,598,300 Due Within One Year 1,525,000 18,319 1,543,319 7,575,000 14,626 7,589,626 $ 37,248,839 205,000 205,000 $ 1,748,319 Bonded Indebtedness of Which the City Has No Liability In addition to the outstanding General Obligation Bonds and Certificates of Obligation of the City and the Water and Sewer System Revenue Bonds, all of which are included in the financial statements of the City, the City is the Issuer of the following Public Improvement Bond issues: $19,000,000 City of Lewisville, Texas Combination Contract Revenue and Special Assessment Refunding and Capital Improvement Bonds, Series 1998 $18,150,000 City of Lewisville, Texas Combination Contract Revenue and Special Assessment Refunding and Capital Improvement Bonds, Series 2002 $25,000,000 City of Lewisville, Texas Combination Contract Revenue and Special Assessment Refunding and Capital Improvement Bonds, Series 2004 $10,350,000 City of Lewisville, Texas Combination Contract Revenue and Special Assessment Capital Improvement Bonds, Series 2005 $20,000,000 City of Lewisville, Texas Combination Contract Revenue and Special Assessment Capital Improvement Bonds, Series 2008 $2,840,000 City of Lewisville, Texas Combination Contract Revenue and Special Assessment Refunding and Utility System Bonds, Series 2011 $2,965,000 City of Lewisville, Texas Combination Contract Revenue and Special Assessment Utility System Bonds, Series 2011 76 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 $5,355,000 City of Lewisville, Texas Combination Contract Revenue and Special Assessment Road System Bonds, Series 2011 $14,330,000 City of Lewisville, Texas Combination Contract Revenue and Special Assessment Refunding Bonds, Series 2013 These issues are not direct obligations of the City of Lewisville. They are Revenue Bonds issued for the Castle Hills Public Improvement District located in the City’s extraterritorial jurisdiction. For all issues except the 2008 bond issue, the principal and interest payment on the bonds is from ad valorem taxes (contract revenues, billed and collected by the Denton County Fresh Water District). For the 2008 bond issue, no more than 90% of the principal and interest payment on the bonds is from ad valorem taxes (contract revenues) and no less than 10% is payable from special assessment revenues and subject to special mandatory redemption prior to maturity. In the event contract revenues were ever insufficient to pay principal and interest, the City would levy and collect special assessments from property owners in the public improvement district. At September 30, 2013, City of Lewisville, Texas Contract Revenue and Special Assessment Improvement Bonds outstanding aggregated was $90,395,000. 12. RISK MANAGEMENT The City established a limited risk management program for workers’ compensation and healthcare coverage in 1988. Beginning September 1, 1990, liability and property and casualty risk funding was established within the Self-Insurance Internal Service Fund. Life, accidental death and dismemberment and long-term disability coverage are fully insured but accounted for within the fund. Premiums are transferred into the Self-Insurance Internal Service Fund from all other operating funds and are available to pay claims, claim reserves, reinsurance excess coverage premiums, and any other premiums or administrative costs associated with the programs. During FY 2012-13, a total of $1,124,841 was paid in life insurance and long-term disability premiums, reinsurance premiums, and administrative costs for workers’ compensation, liability, and property/casualty claims. Workers’ compensation liabilities include the reserve for unpaid claims and a calculated reserve for incurred but not reported claims. The workers’ compensation reinsurance provided excess coverage of $500,000 per occurrence for all positions. Settled claims have not exceeded this commercial coverage in any of the past several years. In July 1999, the property and casualty and liability insurance coverages were moved to a deductible program. Each line of coverage has a deductible per occurrence ranging from $500-$50,000. 77 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 During FY 2001-02, the City established a Health Insurance Risk Pool under Chapter 172 of the Texas Local Government Code. Since the establishment of the Risk Pool, premiums for healthcare have been transferred into the Risk Pool from all other operating funds and are available to pay claims, claim reserves, reinsurance excess coverage premiums, and the administrative costs of the medical/dental plan. For the plan year beginning October 1, 2012, the healthcare reinsurance provided excess coverage (beyond $135,000 per occurrence) and an annual aggregate stop loss of approximately $5,937,988 per plan year limit. The healthcare liabilities include the reserve for unpaid claims and a calculated reserve for incurred but not reported claims. During FY 2012-13, total expenses for claims, reinsurance premiums, and administrative costs for healthcare amounted to $7,724,072 . Claims expenditures and liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported. Because actual claims liabilities depend on such complex factors as inflation, changes in legal doctrines, and damage awards, the process used in computing claims liability does not necessarily result in an exact amount. Claims liabilities are re-evaluated annually by an outside actuary who takes into consideration recently settled claims, the frequency of claims, and other economic and social factors. Changes in the balances of claims liabilities for the years ended September 30, 2013 and 2012 are as follows: 2013 2012 Claims payable, beginning of year Incurred claims Claims payments $ 1,208,652 7,255,213 (7,145,071) $ 1,348,807 7,205,588 (7,345,743) Claims payable, end of year $ 1,318,794 $ 1,208,652 78 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 13. FUND BALANCE CLASSIFICATIONS The following fund balance classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used: • Non Spendable Fund Balance This represents the portion of fund balance that is not in a spendable form (such as inventory or prepaid items) or is required to be maintained intact pursuant to legal or contractual requirements. • Restricted Fund Balance This represents the portion of fund balance that is subject to externally enforceable legal restrictions. These restrictions are typically imposed by parties outside the government such as grantors, creditors, or other government entities through laws and regulations. • Committed Fund Balance This represents the portion of fund balance that is constrained by limitations that the governing body imposed upon itself at the highest level of decision making (City Council) and remains binding unless removed in the same manner. Any changes must take place before the end of the reporting period. • Assigned Fund Balance This portion of fund balance reflects the government’s intended use of resources. Such intent must presently be established at the highest level of decision making (Council vote), with the exception of the employee benevolent fund. The authority to assign benevolent fund balance has been granted to the employee committees via Administrative Directive 1.7.0. Amounts in excess of non-spendable, restricted, and committed fund balance in funds other than the General Fund would automatically be assigned here. • Unassigned Fund Balance Only the General Fund can have a positive “unassigned” fund balance. This balance represents any residual which has not been classified within the other above mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes. 79 CITY OF LEWISVILLE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 The following is a detailed schedule of Governmental Fund Balances as of September 30, 2013. GOVERNMENTAL FUNDS General Debt Capital Other Service Projects Governmental Fund Fund Funds General Fund FUND BALANCE: Non Spendable: Prepaid expenses $ Spendable: Restricted for: Debt service Capital projects - Streets Capital projects - Drainage Capital projects - Other Hotel/Motel Tax Fund Grant Funds Public Improvement District Fund Municipal Court Security Fund Municipal Court Technology Fund Police Forfeitures Fund (State) Police Forfeitures Fund (Federal) Juvenile Case Manager Fund PEG Programming Fund Crime Control & Prenvention District Fire Control, Prevention, and Emergency Medical Services District Castle Hills Capital Projects Total Restricted Committed to: Capital projects - Streets Capital projects - Parks Capital projects - Other Recreation Fund Fire and Police Training Fund Donations Fund Lewisville Local Government Corporation Total Committed Assigned to: Capital projects - Streets Capital projects - Riverside Road & Bridge Capital projects - Other Other Employee Benevolent Fund Total Assigned Unassigned: TOTAL FUND BALANCES: 381,982 $ $ - $ 2,265,652 $ 2,647,634 - 1,622,886 - 18,134,430 4,732,527 8,982,565 - 3,723,249 65,257 234,473 72,233 183,734 165,534 677,802 95,000 229,197 1,365,271 1,622,886 18,134,430 4,732,527 8,982,565 3,723,249 65,257 234,473 72,233 183,734 165,534 677,802 95,000 229,197 1,365,271 - 1,622,886 31,849,522 2,677,160 50,541 9,539,451 * 2,677,160 50,541 43,011,859 - - 2,916,568 395,724 3,068,058 - 279,131 154,219 246,308 - - 6,380,350 5,066 684,724 2,916,568 395,724 3,068,058 279,131 154,219 246,308 5,066 7,065,074 - 2,231,995 1,954,153 2,953,290 7,139,438 - 26,580 26,580 - 2,231,995 1,954,153 2,953,290 538,290 26,580 7,704,308 30,571,006 538,290 538,290 30,571,006 $ - Total Governmental Funds 31,491,278 $ 1,622,886 $ 45,369,310 *NOTE: These restrictions are also reflected as restrictions of net position on the Statement of Net Position. 80 $ 12,516,407 $ 90,999,881 REQUIRED SUPPLEMENTARY INFORMATION CITY OF LEWISVILLE, TEXAS EXHIBIT A-1 GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Taxes Licenses and permits Charges for services Recreation Fines and forfeitures Interest Miscellaneous Actual Variance with Final Budget Positive (Negative) $ 2,907,142 747,586 352,347 3,506 32,473 (91,838) 156,512 $ 47,846,442 1,628,185 5,698,936 1,089,760 2,922,488 140,743 725,612 $ 47,846,442 1,628,185 5,698,936 1,089,760 2,922,488 140,743 725,612 $ 50,753,584 2,375,771 6,051,283 1,093,266 2,954,961 48,905 882,124 60,052,166 60,052,166 64,159,894 4,107,728 1,791,297 66,850 2,154,792 735,118 19,995,157 16,381,725 4,478,677 6,154,664 5,379,870 1,306,469 717,197 1,991,376 889,564 307,593 1,457,968 66,850 2,169,360 735,118 19,998,957 16,393,414 4,495,433 6,157,664 5,369,505 1,306,469 717,197 1,991,376 889,564 868,213 1,037,537 58,749 2,137,540 734,229 19,461,171 16,110,146 4,311,378 5,971,888 5,124,103 1,274,041 700,099 1,966,765 878,494 631,755 420,431 8,101 31,820 889 537,786 283,268 184,055 185,776 245,402 32,428 17,098 24,611 11,070 236,458 62,350,349 62,617,088 60,397,895 2,219,193 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (2,298,183) (2,564,922) 3,761,999 6,326,921 OTHER FINANCING SOURCES (USES): Transfers in Transfers out 3,879,107 (5,041,145) 3,879,107 (7,586,208) 3,936,467 (7,280,035) 57,360 306,173 (1,162,038) (3,707,101) (3,343,568) 363,533 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES (3,460,221) (6,272,023) FUND BALANCES, beginning 31,072,847 31,072,847 31,072,847 $ 27,612,626 $ $ 24,800,824 $ 31,491,278 Total revenues EXPENDITURES: General government Mayor and council Administrative and legal Community relations and tourism Police Fire Public services Parks and leisure Community development Finance Human resources Information technology services Municipal court Capital outlay Total expenditures Total other financing sources (uses) FUND BALANCES, ending 81 418,431 6,690,454 $ 6,690,454 CITY OF LEWISVILLE, TEXAS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2013 EXHIBIT A-2 BUDGET BASIS ACCOUNTING The City adopts its budget of the General Fund on the modified accrual basis of accounting by department 82 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES MAJOR GOVERNMENTAL FUNDS DEBT SERVICE FUND The Debt Service Fund is used to account for the accumulation of resources for, and payment of, general obligation and certificates of obligation principal, and interest indebtedness for general governmental resources. 83 CITY OF LEWISVILLE, TEXAS EXHIBIT B-1 DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Taxes Intergovernmental Investment earnings Miscellaneous $ Total revenues 7,648,012 9,842 228,189 $ Variance with Final Budget Positive (Negative) Actual 7,648,012 9,842 228,189 $ 7,923,410 624,125 5,425 15,457 $ 275,398 624,125 (4,417) (212,732) 7,886,043 7,886,043 8,568,417 682,374 EXPENDITURES: Debt servicePrincipal Interest and fiscal charges 6,350,000 3,134,038 6,350,000 3,134,038 5,410,000 2,942,234 940,000 191,804 Total expenditures 9,484,038 9,484,038 8,352,234 1,131,804 (1,597,995) (1,597,995) 216,183 1,814,178 1,682,273 - 1,682,273 - (50,000) (1,682,273) (50,000) 1,682,273 1,682,273 (50,000) (1,732,273) 84,278 84,278 166,183 1,456,703 1,456,703 1,456,703 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfer in Transfers out Total other financing sources (uses) NET CHANGE IN FUND BALANCES FUND BALANCES, beginning FUND BALANCES, ending $ 1,540,981 84 $ 1,540,981 $ 1,622,886 81,905 $ 81,905 NON-MAJOR GOVERNMENTAL FUNDS Special Revenue funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally or otherwise restricted to expenditures for particular purposes. The City has fourteen Special Revenue Funds as follows: HOTEL/MOTEL TAX FUND To account for tax revenue collected as a percentage of gross receipts for all temporary room rentals in all hotel and motel establishments within the City. Funds are expended to promote tourism and culture in the City. RECREATION ACTIVITY FUND To account for revenues collected from recreation users for specific events. Funds are expended on costs associated with the specific events’ operations. GRANT FUND To account for revenues derived from federal and state granting agencies. The funds are expended for grant-related purposes. PUBLIC IMPROVEMENT DISTRICT TAX FUND To account for special revenue for an area-specific purpose. Funds are expended on costs associated with the specified improvements. MUNICIPAL COURT SECURITY FUND To account for Municipal Court fees assessed to provide for court security. MUNICIPAL COURT TECHNOLOGY FUND To account for Municipal Court fees assessed to finance the purchase of technological enhancements for Municipal Court. POLICE ASSET FORFEITURE FUND To account for funds received under the Controlled Substances Act of the State of Texas with expenditures restricted to use solely in the investigation of any alleged violations of the criminal laws of the state and donations for the same purpose. EMPLOYEE BENEVOLENT FUND To account for funds received from employee concessions with expenditures controlled by employee committee. FIRE AND POLICE TRAINING FUND To allocate revenue from training tower rentals to ongoing maintenance of the facility as well as police firearms simulator rentals and maintenance costs. LAW ENFORCEMENT OFFICER STANDARDS AND EDUCATION FUND (LEOSE) To account for grant revenue received from the Comptroller’s Office exclusively for the training of police officers. Uses can include materials, classes, registration costs, etc. 85 NON-MAJOR GOVERNMENTAL FUNDS DONATIONS FUND To account for revenues derived from the solicitation and acceptance of donations. Funds are expended for donation-related purposes only. POLICE FEDERAL FORFEITURE FUND To account for federally forfeited cash, property, proceeds, and any interest earned thereon received as part of the Federal Equitable Sharing Agreement between local law enforcement agencies, the Department of Justice, and the Department of Treasury for cooperating in investigations with respect to asset forfeiture and money laundering investigations and prosecutions. JUVENILE CASE MANAGER FUND To account for Municipal Court fees used to fund a portion of the juvenile case manager position. PEG PROGRAMMING FUND To account for Public, Education and Government (PEG) programming fees received by cable franchise entities used for capital costs associated with PEG production. Additionally, three blended component units and one capital project fund are included as a NonMajor Governmental Funds: LEWISVILLE LOCAL GOVERNMENT CORPORATION FUND To account for assistance efforts in economic development initiatives. LEWISVILLE CRIME CONTROL AND PREVENTION DISTRICT To account for one-eighth cent sales tax revenues to fund crime control and prevention programs. LEWISVILLE FIRE CONTROL, PREVENTION, AND EMERGENCY MEDICAL SERVICES DISTRICT To account for one-eighth cent sales tax revenues to fund fire safety and emergency medical service programs. CASTLE HILLS PUBLIC IMPROVEMENT DISTRICT CAPITAL PROJECTS FUND To account for acquisition and construction of major capital facilities financed by the Castle Hills Public Improvement District. 86 CITY OF LEWISVILLE, TEXAS NON MAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET SEPTEMBER 30, 2013 Special Revenues Hotel/Motel Tax ASSETS Cash Investments Receivables: Taxes Accounts Interest Prepaid items Total assets $ 523,891 2,979,350 Recreation Activity $ 301,946 2,562 2,259,047 44,373 252,353 Public Improvement District Grant $ 12,500 211 1,088 2,688 15,273 $ 35,787 203,517 303,547 13 1,155 Municipal Court Security $ 169 - 10,891 61,935 Municipal Court Technology $ 51 - 29,784 153,804 Police Asset Forfeiture $ 146 - $ 6,066,796 $ 310,525 $ 322,676 $ 239,473 $ 72,877 $ $ 70,638 13,862 - $ 17,555 251 12,500 $ 2,751 7,642 238,910 6,961 $ 5,000 - $ 644 - $ $ 5,000 644 234,473 - 72,233 - 183,734 67,700 136,320 Fire and Police Training Employee Benevolent $ 1,608 113 - 3,979 22,635 $ - 23,256 132,245 109 - 21 - $ 205,741 $ 26,635 $ 155,610 $ 40,207 - $ 55 - $ 1,391 - LIABILITIES AND FUND BALANCES LIABILITIES: Accounts and contracts payable Accrued liabilities Due to other funds Deposits Deferred revenue Total liabilities FUND BALANCES Nonspendable Restricted Committed Assigned 30,306 256,264 2,259,047 3,723,249 - 1,088 279,131 1,155 65,257 - - Total fund balances Total liabilities and fund balances 84,500 - 5,982,296 $ 6,066,796 - 280,219 $ 310,525 - 66,412 $ 322,676 $ 239,473 87 - 72,877 183,734 205,741 154,219 26,580 165,534 $ 1,391 - - 183,734 $ 55 165,534 - - 72,233 $ 40,207 183,734 - - 234,473 - - 26,580 $ 26,635 154,219 $ 155,610 EXHIBIT C-1 LEOSE $ Police Federal Forfeiture Donations - $ - 37,520 213,390 $ 11,031 156 - - $ 262,097 $ $ - $ 390 713 5,485 9,201 $ 15,789 - 246,308 - - 262,097 - $ 68,526 115 - - 757 4,305 $ - 143,086 813,726 $ 460,708 674 471 4 - 333,206 1,894,931 Castle Hills (PID) Capital Projects $ 464,247 1,426 3,891 122,795 - Total Non-Major Governmental Funds $ - 1,519,624 7,679,456 924,955 699,158 6,315 2,265,652 96,415 $ 230,552 $ 5,066 $ 1,418,665 $ 2,697,701 $ 122,795 $ 13,095,160 $ 44 1,371 - $ 1,355 - $ - $ 4,518 48,405 - $ 4,279 12,371 - $ 72,254 - $ 1,415 1,355 95,000 - 229,197 - - 677,802 677,802 24,213 137,698 Fire Control Prevention and Emergency Medical Services $ - $ $ 68 677,802 - 246,308 $ 677,802 14,408 81,939 Crime Control and Prevention District Lewisville Local Government Corporation PEG Programming - - - $ $ 477 - $ - 101,290 576,035 Juveline Case Manager 96,415 5,066 - 95,000 $ - - 229,197 $ 230,552 88 5,066 52,923 16,650 72,254 578,753 471 1,365,271 - 3,891 2,677,160 - 50,541 - 2,265,652 9,539,451 684,724 - 5,066 $ - 221,081 84,615 238,910 5,485 28,662 - 1,365,742 $ 1,418,665 - 2,681,051 $ 2,697,701 26,580 50,541 $ 122,795 12,516,407 $ 13,095,160 CITY OF LEWISVILLE, TEXAS NON MAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Special Revenues Hotel/Motel Tax REVENUES: Taxes Recreation Investment earnings Grants Public safety Public services Contributions from property owners Miscellaneous $ Total revenues EXPENDITURES: CurrentGeneral government Culture, parks and recreation Public safety Public services Capital outlay Total expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Transfers out Proceeds from sale of assets Total other financing sources (uses) $ $ $ 387 127,570 515,834 945,453 - 2,132,829 415,820 1,558,434 - $ 15,173 426 Municipal Court Security $ 108 Municipal Court Technology $ 325 Police Asset Forfeiture $ 249 Fire and Police Training Employee Benevolent $ 41 $ 253 - 59,503 79,343 66,097 4,190 88,326 1,461,674 15,599 59,611 79,668 66,346 4,231 88,579 315,100 - 473,950 970,322 136,425 6,685 - 20,359 - 34,308 - 7,465 - 2,808 - 61,103 - 1,558,434 315,100 1,580,697 6,685 20,359 34,308 7,465 2,808 61,103 574,395 100,720 (119,023) 8,914 39,252 45,360 58,881 1,423 27,476 - 8,283 (98,462) - 122,819 - - (33,514) - (40,000) - 3,477 - - - (90,179) 122,819 - (33,514) (40,000) 10,541 5,407,901 FUND BALANCES, beginning 287,645 605 Grant 61,271 574,395 NET CHANGE IN FUND BALANCES FUND BALANCES, ending 2,065,363 6,195 Recreation Activity Public Improvement District 5,982,296 3,796 269,678 $ 280,219 8,914 62,616 $ 66,412 5,738 225,559 $ 234,473 89 5,360 66,495 $ 72,233 178,374 $ 183,734 3,477 - - 62,358 1,423 27,476 103,176 $ 165,534 25,157 $ 26,580 126,743 $ 154,219 EXHIBIT C-2 LEOSE $ Donations - $ 518 $ 1,053 Juveline Case Manager $ 127 $ 271,395 552 Crime Control and Prevention District Lewisville Local Government Corporation PEG Programming $ - - 8 $ 2,614,154 1,428 3,910 840 - 419,768 371,222 78,917 - 420,286 372,275 79,044 271,947 3,918 2,616,422 2,636 - 357,222 2,000 10,032 - 301,541 55,165 52,679 - 17,774 218,111 - 2,636 369,254 356,706 52,679 235,885 - (2,636) 51,032 15,569 26,365 36,062 - (8,283) - - (17,438) - - 434,459 777,145 2,441,098 317,100 3,037,992 1,161,152 1,336,614 1,758,741 719,492 1,211,604 8,293,956 3,918 857,681 1,919,909 - (30,000) - - - (30,000) 8,927 36,062 3,918 827,681 662,233 677,802 86,073 $ 95,000 193,135 $ 229,197 1,148 $ 5,066 90 7,602,737 287,645 15,036 719,492 - (17,438) $ $ 63,716 1,364,459 180,798 149,768 - - 12 11,310,681 15,569 246,308 $ 583,031 (8,283) 203,559 2,636,652 2,749 Total Non-Major Governmental Funds 2,639,401 42,749 $ $ Castle Hills (PID) Capital Projects 515,834 945,453 583,019 1,360,957 - - Fire Control Prevention and Emergency Medical Services 583,019 - (2,636) 2,636 $ Police Federal Forfeiture (30,000) - 1,365,742 (30,000) 2,681,051 131,102 (257,697) 3,477 - (123,118) (628,573) 791,142 $ 3,016,725 - 1,889,909 538,061 $ (628,573) 2,893,607 679,114 $ 50,541 9,622,800 $ 12,516,407 CITY OF LEWISVILLE, TEXAS EXHIBIT C-3 HOTEL/MOTEL TAX SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Taxes Investment earnings Miscellaneous $ Total revenues 1,963,922 10,529 1,450,000 $ 1,963,922 10,529 1,450,000 Variance with Final Budget Positive (Negative) Actual $ 2,065,363 6,195 61,271 $ 101,441 (4,334) (1,388,729) 3,424,451 3,424,451 2,132,829 (1,291,622) EXPENDITURES: CurrentGeneral government 1,323,324 1,414,848 1,558,434 (143,586) Total expenditures 1,323,324 1,414,848 1,558,434 (143,586) 2,101,127 2,009,603 574,395 (1,435,208) (1,500,000) (1,500,000) - 1,500,000 (1,500,000) (1,500,000) - 1,500,000 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING USES: Transfers out Total other financing uses NET CHANGE IN FUND BALANCES FUND BALANCES, beginning FUND BALANCES, ending $ 601,127 509,603 574,395 5,407,901 5,407,901 5,407,901 6,009,028 $ 91 5,917,504 $ 5,982,296 64,792 $ 64,792 CITY OF LEWISVILLE, TEXAS EXHIBIT C-4 RECREATION ACTIVITY SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Recreation Investment earnings Miscellaneous $ Total revenues EXPENDITURES: CurrentCulture, parks and recreation Total expenditures EXCESS OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Transfers out Total other financing sources (uses) NET CHANGES IN FUND BALANCES FUND BALANCES, beginning FUND BALANCES, ending $ 360,429 1,077 131,795 $ Variance with Final Budget Positive (Negative) Actual 360,429 1,077 131,795 $ 287,645 605 127,570 $ (72,784) (472) (4,225) 493,301 493,301 415,820 (77,481) 376,319 394,357 315,100 79,257 376,319 394,357 315,100 79,257 116,982 98,944 100,720 1,776 (116,500) (98,462) 8,283 (98,462) 8,283 - (116,500) (98,462) (90,179) 8,283 482 482 10,541 10,059 269,678 269,678 269,678 - 270,160 $ 92 270,160 $ 280,219 $ 10,059 CITY OF LEWISVILLE, TEXAS EXHIBIT C-5 GRANT SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Investment earnings Grants: Public safety Public services $ Total revenues EXPENDITURES: CurrentPublic safety Public services Capital outlay Total expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 4,887 $ 4,887 Actual $ 387 Variance with Final Budget Positive (Negative) $ (4,500) 396,011 947,154 812,826 947,154 515,834 945,453 (296,992) (1,701) 1,348,052 1,764,867 1,461,674 (303,193) 433,234 949,172 - 701,240 1,907,869 174,738 473,950 970,322 136,425 227,290 937,547 38,313 1,382,406 2,783,847 1,580,697 1,203,150 (34,354) (1,018,980) (119,023) 899,957 OTHER FINANCING SOURCES: Transfers in 34,836 59,751 122,819 63,068 Total other financing sources 34,836 59,751 122,819 63,068 3,796 963,025 482 NET CHANGE IN FUND BALANCES 62,616 FUND BALANCES, beginning FUND BALANCES, ending (959,229) $ 63,098 93 62,616 $ (896,613) 62,616 $ 66,412 $ 963,025 CITY OF LEWISVILLE, TEXAS EXHIBIT C-6 PUBLIC IMPROVEMENT DISTRICT TAX SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Taxes Investment earnings Total revenues $ 15,174 938 $ 15,174 938 Actual $ 15,173 426 Variance with Final Budget Positive (Negative) $ (1) (512) 16,112 16,112 15,599 EXPENDITURES: CurrentGeneral government 15,000 15,000 6,685 8,315 Total expenditures 15,000 15,000 6,685 8,315 EXCESS OF REVENUES OVER EXPENDITURES 1,112 1,112 8,914 7,802 NET CHANGE IN FUND BALANCES 1,112 1,112 8,914 7,802 225,559 225,559 225,559 - $ 226,671 $ 226,671 $ 234,473 FUND BALANCES, beginning FUND BALANCES, ending 94 (513) $ 7,802 CITY OF LEWISVILLE, TEXAS EXHIBIT C-7 MUNICIPAL COURT SECURITY SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Miscellaneous Interest $ Total revenues 61,118 258 $ 61,118 258 Actual $ 59,503 108 Variance with Final Budget Positive (Negative) $ (1,615) (150) 61,376 61,376 59,611 (1,765) 26,100 26,100 20,359 5,741 26,100 26,100 20,359 5,741 35,276 35,276 39,252 3,976 (33,513) (33,513) (33,514) (1) Total other financing uses (33,513) (33,513) (33,514) (1) NET CHANGE IN FUND BALANCES 1,763 1,763 5,738 3,975 66,495 66,495 66,495 - EXPENDITURES: CurrentPublic safety Total expenditures EXCESS OF REVENUES OVER EXPENDITURES OTHER FINANCING USES: Transfers out FUND BALANCES, beginning FUND BALANCES, ending $ 68,258 95 $ 68,258 $ 72,233 $ 3,975 CITY OF LEWISVILLE, TEXAS EXHIBIT C-8 MUNICIPAL COURT TECHNOLOGY SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Miscellaneous Investment earnings $ Total revenues 81,482 838 $ 81,482 838 Actual $ 79,343 325 Variance with Final Budget Positive (Negative) $ (2,139) (513) 82,320 82,320 79,668 (2,652) 42,320 44,633 34,308 10,325 42,320 44,633 34,308 10,325 40,000 37,687 45,360 7,673 (40,000) (40,000) (40,000) - Total other financing uses (40,000) (40,000) (40,000) - NET CHANGE IN FUND BALANCES - (2,313) 5,360 7,673 EXPENDITURES: CurrentPublic safety Total expenditures EXCESS OF REVENUES OVER EXPENDITURES OTHER FINANCING USES: Transfers out 178,374 FUND BALANCES, beginning FUND BALANCES, ending $ 178,374 96 178,374 $ 176,061 178,374 $ 183,734 $ 7,673 CITY OF LEWISVILLE, TEXAS EXHIBIT C-9 POLICE ASSET FORFEITURE SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Investment earnings Miscellaneous $ Total revenues 708 18,500 $ Actual 708 18,500 $ 249 66,097 Variance with Final Budget Positive (Negative) $ (459) 47,597 19,208 19,208 66,346 47,138 35,000 35,000 7,465 27,535 35,000 35,000 7,465 27,535 (15,792) (15,792) 58,881 74,673 OTHER FINANCING SOURCES: Proceeds from sale of assets - - 3,477 3,477 Total other financing sources - - 3,477 3,477 NET CHANGE IN FUND BALANCES (15,792) (15,792) 62,358 78,150 FUND BALANCES, beginning 103,176 103,176 103,176 - EXPENDITURES: CurrentPublic safety Total expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCES, ending $ 87,384 97 $ 87,384 $ 165,534 $ 78,150 CITY OF LEWISVILLE, TEXAS EXHIBIT C-10 FIRE AND POLICE TRAINING SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Investment earnings Miscellaneous Total revenues EXPENDITURES: CurrentPublic safety Total expenditures NET CHANGE IN FUND BALANCES FUND BALANCES, beginning FUND BALANCES, ending $ 503 73,122 $ 503 73,122 Actual $ 253 88,326 Variance with Final Budget Positive (Negative) $ (250) 15,204 73,625 73,625 88,579 14,954 83,573 83,573 61,103 22,470 83,573 83,573 61,103 22,470 (9,948) (9,948) 27,476 37,424 - 126,743 126,743 126,743 $ 116,795 $ 116,795 $ 154,219 98 $ 37,424 CITY OF LEWISVILLE, TEXAS EXHIBIT C-11 LAW ENFORCEMENT OFFICER STANDARDS AND EDUCATION SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Investment earnings $ Total revenues EXPENDITURES: CurrentPublic safety Total expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCES, beginning FUND BALANCES, ending $ 21 $ Actual 21 21 21 2,855 $ - Variance with Final Budget Positive (Negative) $ (21) - (21) 2,855 2,636 219 2,855 2,855 2,636 219 (2,834) (2,834) (2,636) 198 2,636 2,636 2,636 (198) 99 $ (198) $ - $ 198 CITY OF LEWISVILLE, TEXAS EXHIBIT C-12 DONATIONS SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Investment earnings Miscellaneous $ Total revenues 1,044 369,272 $ 1,044 369,272 Actual $ 518 419,768 Variance with Final Budget Positive (Negative) $ (526) 50,496 370,316 370,316 420,286 49,970 359,907 - 359,907 4,000 - 357,222 2,000 10,032 2,685 2,000 (10,032) 359,907 363,907 369,254 (5,347) 10,409 6,409 51,032 44,623 - - (8,283) (8,283) Total other financing uses - - (8,283) (8,283) NET CHANGE IN FUND BALANCES 10,409 6,409 42,749 36,340 203,559 203,559 203,559 - EXPENDITURES: CurrentGeneral government Culture, parks, and recreation Public services Total expenditures EXCESS OF REVENUES OVER EXPENDITURES OTHER FINANCING USES: Transfers out FUND BALANCES, beginning FUND BALANCES, ending $ 213,968 100 $ 209,968 $ 246,308 $ 36,340 CITY OF LEWISVILLE, TEXAS EXHIBIT C-13 POLICE FEDERAL FORFEITURE SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Investment earnings Miscellaneous Total revenues EXPENDITURES: CurrentPublic safety Capital outlay Total expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCES, beginning FUND BALANCES, ending $ 1,272 112,000 $ 1,272 112,000 Actual $ 1,053 371,222 Variance with Final Budget Positive (Negative) $ (219) 259,222 113,272 113,272 372,275 259,003 433,663 - 309,208 133,874 301,541 55,165 7,667 78,709 433,663 443,082 356,706 86,376 (320,391) (329,810) 15,569 345,379 662,233 662,233 662,233 $ 341,842 $ 332,423 $ 677,802 101 $ 345,379 CITY OF LEWISVILLE, TEXAS EXHIBIT C-14 JUVENILE CASE MANAGER SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Investment earnings Miscellaneous $ Total revenues EXPENDITURES: CurrentPublic safety Total expenditures EXCESS OF REVENUES OVER EXPENDITURES OTHER FINANCING USES: Transfers out Total other financing uses NET CHANGE IN FUND BALANCES FUND BALANCES, beginning FUND BALANCES, ending $ 309 80,903 $ Actual 309 80,903 $ 127 78,917 Variance with Final Budget Positive (Negative) $ (182) (1,986) 81,212 81,212 79,044 (2,168) 63,748 63,748 52,679 11,069 63,748 63,748 52,679 11,069 17,464 17,464 26,365 8,901 (17,438) (17,438) (17,438) - (17,438) (17,438) (17,438) - 26 26 8,927 8,901 86,073 86,073 86,073 - 86,099 102 $ 86,099 $ 95,000 $ 8,901 CITY OF LEWISVILLE, TEXAS EXHIBIT C-15 PEG PROGRAMMING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Investment earnings Taxes Total revenues EXPENDITURES: CurrentGeneral government Capital outlay Total expenditures NET CHANGE IN FUND BALANCES FUND BALANCES, beginning FUND BALANCES, ending $ 2,145 214,527 $ 2,145 214,527 Actual $ 552 271,395 Variance with Final Budget Positive (Negative) $ (1,593) 56,868 216,672 216,672 271,947 55,275 48,000 130,000 31,701 206,493 17,774 218,111 13,927 (11,618) 178,000 238,194 235,885 2,309 38,672 (21,522) 36,062 57,584 193,135 193,135 193,135 - $ 231,807 $ 171,613 $ 229,197 103 $ 57,584 CITY OF LEWISVILLE, TEXAS EXHIBIT C-16 CRIME CONTROL AND PREVENTION DISTRICT SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Investment earnings Taxes Miscellaneous $ Total revenues 26,106 2,622,034 - $ 26,106 2,622,034 - Actual $ 1,428 2,614,154 840 Variance with Final Budget Positive (Negative) $ (24,678) (7,880) 840 2,648,140 2,648,140 2,616,422 (31,718) 72,181 2,027,254 197,752 64,648 72,181 2,002,189 197,752 149,768 63,716 1,364,459 180,798 149,768 8,465 637,730 16,954 - 2,361,835 2,421,890 1,758,741 663,149 EXCESS OF REVENUES OVER EXPENDITURES 286,305 226,250 857,681 631,431 OTHER FINANCING USES: Transfers out (30,000) (30,000) (30,000) - Total other financing uses (30,000) (30,000) (30,000) - NET CHANGE IN FUND BALANCES 256,305 196,250 827,681 631,431 FUND BALANCES, beginning 538,061 538,061 538,061 - 734,311 $ 1,365,742 EXPENDITURES: General government Public safety Public services Capital outlay Total expenditures FUND BALANCES, ending $ 794,366 104 $ $ 631,431 CITY OF LEWISVILLE, TEXAS EXHIBIT C-17 FIRE CONTROL, PREVENTION AND EMERGENCY MEDICAL SERVICES DISTRICT SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Budgeted Amounts Original Final REVENUES: Investment earnings Taxes Total revenues EXPENDITURES: Public safety Capital outlay Total expenditures EXCESS OF REVENUES OVER EXPENDITURES OTHER FINANCING USES: Transfers out Total other financing uses NET CHANGE IN FUND BALANCES FUND BALANCES, beginning FUND BALANCES, ending $ 26,106 2,610,616 $ 26,106 2,610,616 Actual $ 2,749 2,636,652 Variance with Final Budget Positive (Negative) $ (23,357) 26,036 2,636,722 2,636,722 2,639,401 2,679 879,532 13,130 892,662 325 719,492 - 173,170 325 892,662 892,987 719,492 173,495 1,744,060 1,743,735 1,919,909 176,174 (30,000) (30,000) (30,000) - (30,000) (30,000) (30,000) - 1,714,060 1,713,735 1,889,909 176,174 791,142 791,142 791,142 - $ 2,505,202 $ 2,504,877 $ 2,681,051 105 $ 176,174 INTERNAL SERVICE FUNDS Internal Service funds are used to account for the financing of goods or services provided by one department to other departments within the City, on a user charge basis. SELF-INSURANCE RISK FUND To account for the funds accumulated for defined risk of workers’ compensation, unemployment, and liability/property casualty programs. Revenues are from premiums charged to department and funds are disbursed accordingly to program expenses such as claim payments, administrative cost and reinsurance premiums. HEALTH INSURANCE RISK POOL FUND To account for the funds accumulated from premium charges to department and employees for health and dental coverage programs. Expenses include claim payments, administrative costs, and reinsurance premiums. MAINTENANCE AND REPLACEMNT FUND To provide for fleet maintenance services for City departments and account for the purchase of all vehicles and major equipment operated by the City. Departments pay monthly charges to provide the funds for future replacement of capital assets as well as reimburse fund for current fleet repairs and maintenance. 106 CITY OF LEWISVILLE, TEXAS INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET POSITION SEPTEMBER 30, 2013 EXHIBIT D-1 Self Insurance Risk ASSETS Cash Investments ReceivablesInterest Other Inventory of supplies, at cost Prepaid items Total current assets Non current assets Capital assets Other improvements Machinery and equipment Vehicles Accumulated depreciation Capital assets, net of accumulated depreciation Total assets LIABILITIES AND NET POSITION Current liabilities Accounts payable Incurred but not reported claim reserve Accrued liabilities Total liabilities NET POSITION Net investment in capital assets Unrestricted Total net position $ 881,365 4,870,136 Health Insurance Risk Pool $ 479,637 1,631,520 Maintenance and Replacement $ 850,731 4,838,098 Total $ 2,211,733 11,339,754 4,218 48,389 1,250 17,737 19,718 3,989 105,708 11,760 9,457 17,737 105,708 79,867 5,804,108 2,149,862 5,810,286 13,764,256 274,272 635,926 (618,760) - 4,856,449 20,040,167 (19,740,563) 274,272 5,492,375 20,040,167 (20,359,323) 291,438 - 5,156,053 5,447,491 6,095,546 2,149,862 10,966,339 19,211,747 12,832 516,364 - 802,430 - 23,214 81,898 36,046 1,318,794 81,898 529,196 802,430 105,112 1,436,738 291,438 5,274,912 1,347,432 5,156,053 5,705,174 5,447,491 12,327,518 $ 5,566,350 $ 1,347,432 10,861,227 17,775,009 107 $ CITY OF LEWISVILLE, TEXAS INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 OPERATING REVENUES: Charges for sales and services Miscellaneous Total operating revenues OPERATING EXPENSES: Cost of sales and services, net of reimbursements Administrative Depreciation Total operating expenses Operating income (loss) NONOPERATING REVENUES: Investment earnings Gain (loss) on disposal of capital assets Total nonoperating revenues INCOME (LOSS) BEFORE TRANSFERS AND CAPITAL CONTRIBUTIONS EXHIBIT D-2 Self Insurance Risk Health Insurance Risk Pool $ 1,522,570 - $ 8,036,268 5,413 1,522,570 8,041,681 2,148,268 11,712,519 1,581,508 44,826 6,671,040 1,053,032 - 208,354 645,542 1,842,163 8,460,902 1,698,574 1,886,989 1,626,334 7,724,072 2,696,059 12,046,465 (103,764) 317,609 Maintenance and Replacement $ 2,148,145 123 Total $ 11,706,983 5,536 (547,791) (333,946) 9,304 - 2,014 - 10,810 79,509 22,128 79,509 9,304 2,014 90,319 101,637 (457,472) (232,309) (94,460) 319,623 TRANSFERS AND CAPITAL CONTRIBUTIONS: Transfers in Transfers out Contributions from other funds (1,000,000) - 1,000,000 - 182,019 Total transfers and capital contributions (1,000,000) 1,000,000 182,019 182,019 CHANGE IN NET POSITION (1,094,460) 1,319,623 (275,453) (50,290) NET POSITION, beginning 6,660,810 27,809 11,136,680 $ 5,566,350 $ 1,347,432 $ 10,861,227 NET POSITION, ending 108 1,000,000 (1,000,000) 182,019 17,825,299 $ 17,775,009 CITY OF LEWISVILLE, TEXAS INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 EXHIBIT D-3 Self Insurance Risk CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from transactions with other funds Cash paid to employees for services Cash paid for goods and services Cash paid for claims Cash received from miscellaneous items $ 1,525,544 (1,057,120) (501,493) - Net cash provided by (used in) operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers in from other funds Transfers out to other funds Net cash provided by (used in) non-capital financing activities - (1,000,000) 1,000,000 - $ $ 1,000,000 (1,000,000) - - - (1,133,800) (1,133,800) (1,918,408) 321,473 764 (3,294,728) 1,516,293 10,810 (8,529,681) 5,833,603 23,852 (1,596,171) (1,767,625) (2,672,226) 881,365 $ (237,019) (84,880) 716,656 935,611 479,637 $ 317,609 850,731 (663,398) 2,875,131 $ (547,791) 2,211,733 (333,946) 44,826 - 1,842,163 1,886,989 2,974 (13,017) 35,912 - (724) 805 41,462 - (271) (1,036) (6,423) 21,931 7,972 1,500,000 1,979 (1,036) (18,635) 99,305 7,972 1,500,000 70,695 41,543 3,364,336 3,476,574 (33,069) - (5,102) 109 3,142,628 (1,213,309) 79,509 (103,764) Total adjustments 2,816,545 13,208,960 (384,956) (2,541,841) (7,145,071) 5,536 (1,213,309) 79,509 (341,499) $ $ - 1,222,864 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net operating income (loss) Adjustments to reconcile net operating income (loss) to net cash provided by (used in) operating activitiesDepreciation Change in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in inventory (Increase) decrease in prepaid expenses Increase (decrease) in accounts and claims payable Increase (decrease) in accrued liabilities Increase (decrease) in due to other funds Total - 691,570 NET DECREASE IN CASH NON CASH INVESTING AND FINANCING ACTIVITIES From intragovernmental contributions Increase (decrease) in fair value of investments 3,647,872 (384,956) (446,494) 123 1,000,000 - Net cash provided by (used in) investing activities Net cash provided by (used in) operating activities $ (1,000,000) (3,316,545) 3,995,837 12,278 CASH AT BEGINNING OF YEAR 8,035,544 (1,038,227) (6,643,578) 5,413 359,152 Net cash used in capital and related financing activities CASH AT END OF YEAR $ Maintenance and Replacement (33,069) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets Proceeds from sale of equipment CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of investments Proceeds from sale and maturities of investments Interest received Health Insurance Risk Pool $ $ 359,152 - 1,250 $ 2,816,545 $ $ 182,019 $ (4,132) 3,142,628 182,019 (7,984) DISCRETELY PRESENTED COMPONENT UNITS CITY OF LEWISVILLE, TEXAS LEWISVILLE PARKS AND LIBRARY DEVELOPMENT CORPORATION BALANCE SHEET SEPTEMBER 30, 2013 EXHIBIT E-1 Lewisville Parks and Library Development Corporation ASSETS Cash Investments Receivables Prepaid items Total assets LIABILITIES Accounts and contracts payable Accrued liabilities Accrued interest payable $ 1,422,870 8,089,848 1,018,767 892 $ 10,532,377 $ 59,779 20,503 94,276 174,558 Total liabilities FUND BALANCE Unassigned 10,357,819 10,357,819 Total fund balance Total liabilities and fund balance $ 110 10,532,377 CITY OF LEWISVILLE, TEXAS LEWISVILLE PARKS AND LIBRARY DEVELOPMENT CORPORATION RECONCILIATION OF FUND BALANCE TO NET POSITION SEPTEMBER 30, 2013 EXHIBIT E-2 Total fund balance - governmental funds $ 10,357,819 Amounts reported in the Statement of Net Position are different because: Costs associated with the issuance of governmental long term debt are expensed when incurred in the fund statements and capitalized and amortized over the life of the debt in the government-wide statements. Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the fund financial statements. NET POSITION OF LEWISVILLE PARKS AND LIBRARY DEVELOPMENT CORPORATION 111 181,459 (29,659,213) $ (19,119,935) CITY OF LEWISVILLE, TEXAS EXHIBIT E-3 LEWISVILLE PARKS AND LIBRARY DEVELOPMENT CORPORATION STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE YEAR ENDED SEPTEMBER 30, 2013 Lewisville Parks and Library Development Corporation Revenues: Taxes General sales and use taxes Charges for service Interest Total revenues $ Expenditures: Current: Culture, parks and recreation Debt service: Principal Interest and other fiscal charges Total expenditures 5,685,240 235,759 17,055 5,938,054 2,500,782 1,445,000 1,400,809 5,346,591 591,463 Net changes in fund balance Fund balance, beginning of year 9,766,356 $ Fund balance, end of year 112 10,357,819 CITY OF LEWISVILLE, TEXAS RECONCILIATION OF CHANGES IN FUND BALANCE TO THE CHANGE IN NET POSITION IN THE STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2013 Net change in fund balances - Lewisville Parks and Library Development Corporation EXHIBIT E-4 $ 591,463 Amounts reported for component unit funds in the statement of activities are different because: 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 finanical resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas the the amounts are deferred and amortized in the statement of activities. This amount (bond principal payments of $1,445,000 plus $148,744 amortization of premium, less $83,715 amortization of deferred refunding amount less $16,437 amortization of issuance costs is the net effect of these differences in the treatment of long term debt and related items. Current year changes in the long term liability for compensated absences do not require the use of current financial resources; therefore, are not reported as expenditures in governmental funds. Current year changes in the long term liability for net pension benefit obligations do not require the use of current financial resources; therefore, are not reported as expenditures in the governmental funds. CHANGE IN NET POSITION OF LEWISVILLE PARKS AND LIBRARY DEVELOPMENT CORPORATION 113 1,493,592 3,967 (1,485) $ 2,087,537 CITY OF LEWISVILLE, TEXAS TAX INCREMENT REINVESTMENT ZONE (OLD TOWN) BALANCE SHEET SEPTEMBER 30, 2013 EXHIBIT E-5 Tax Increment Reinvestment Zone (Old Town) ASSETS Cash Investments Receivables Total assets LIABILITIES Accrued interest payable $ 185,972 1,057,633 876 $ 1,244,481 $ 42,444 42,444 Total liabilities FUND BALANCE Restricted 1,202,037 1,202,037 Total fund balance Total liabilities and fund balance $ 114 1,244,481 CITY OF LEWISVILLE, TEXAS TAX INCREMENT REINVESTMENT ZONE (OLD TOWN) RECONCILIATION OF FUND BALANCE TO NET POSITION YEAR ENDED SEPTEMBER 30, 2013 Total fund balance - governmental funds EXHIBIT E-6 $ 1,202,037 Amounts reported in the Statement of Net Position are different because: Costs associated with the issuance of governmental long term debt are expensed when incurred in the fund statements and capitalized and amortized over the life of the debt in the government-wide statements. 47,256 Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. 7,664,422 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the fund financial statements. NET POSITION OF TAX INCREMENT REINVESTMENT ZONE (OLD TOWN) 115 (7,589,626) $ 1,324,089 CITY OF LEWISVILLE, TEXAS EXHIBIT E-7 TAX INCREMENT REINVESTMENT ZONE (OLD TOWN) STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2013 Tax Increment Reinvestment Zone (Old Town) Revenues: Taxes General sales and use taxes Interest Total revenues $ Expenditures: Current: General government Debt service: Principal Interest and other fiscal charges Total expenditures 508,140 2,294 510,434 5,631 165,000 343,766 514,397 D Net changes in fund balance (3,963) Fund balance, beginning of year 1,206,000 $ Fund balance, end of year 116 1,202,037 CITY OF LEWISVILLE, TEXAS TAX INCREMENT REINVESTMENT ZONE (OLD TOWN) RECONCILIATION OF CHANGES IN FUND BALANCE TO THE CHANGE IN NET POSITION IN THE STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2013 Net change in fund balances - Tax Increment Reinvestment Zone (Old Town) EXHIBIT E-8 $ (3,963) Amounts reported for component unit funds in the statement of activities are different because: Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. $ Depreciation expense on capital assets is reported in the government-wide statement of activities and changes in net assets, but they do not require the use of current financial resources. Therefore, depreciation expense is not reported as expenditures in the governmental funds. (375,976) Governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas the amounts are deferred and amortized in the statement of activities. This amount is the net effect of the amortization of issuance costs, ($3,444), and premium, $1,066. (2,378) Current year changes in accrued interest payable do not require the use of current financial resources; therefore, are not reported as expenditures in governmental funds. CHANGE IN NET POSITION OF TAX INCREMENT REINVESTMENT ZONE (OLD TOWN) 117 165,000 928 $ (216,389) STATISTICAL SECTION STATISTICAL SECTION This part of the City of Lewisville's 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 government's overall financial health. Contents Table Financial Trends These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time. ......................................................................................................................... 1-4 Revenue Capacity These schedules contain information to help the reader assess the government's most significant local revenue source, property and sales tax. ............... 5-11 Debt Capacity These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. ........................................... 12-16 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. ..................................................................................................... 17-18 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. ...................... 19-21 118 CITY OF LEWISVILLE, TEXAS NET POSITION BY COMPONENT Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2004 2005 Governmental activities Net investment in capital assets Restricted Unrestricted Total governmental activities net assets $ 188,596,925 3,158,418 34,498,004 $ 226,253,347 $ 215,782,928 2,954,825 41,578,455 $ 260,316,208 $ Business-type activities Net investment in capital assets Restricted Unrestricted Total business-type activities $ 117,454,232 2,132,858 34,124,375 $ 153,711,465 $ 130,190,472 1,845,879 33,789,667 $ 165,826,018 $ Primary government Net investment in capital assets Restricted Unrestricted Total primary government $ 306,051,157 5,291,276 68,622,379 $ 379,964,812 $ 345,973,400 4,800,704 75,368,122 $ 426,142,226 $ Source: Comprehensive Annual Financial Reports 119 2006 $ $ $ 2007 239,332,939 1,446,727 46,779,350 287,559,016 $ 137,038,948 1,576,475 37,687,853 176,303,276 $ 376,371,887 3,023,202 84,467,203 463,862,292 $ $ $ $ 256,515,336 1,725,352 44,731,063 302,971,751 145,843,454 2,075,929 36,677,712 184,597,095 402,358,790 3,801,281 81,408,775 487,568,846 TABLE-1 Fiscal Year 2008 $ $ $ $ $ $ 2009 287,096,412 1,756,591 50,443,168 339,296,171 $ 159,684,492 2,024,478 38,090,009 199,798,979 $ 446,780,904 3,781,069 88,533,177 539,095,150 $ $ $ $ 2010 308,190,669 1,867,844 49,358,449 359,416,962 $ 166,895,435 1,914,446 35,940,547 204,750,428 $ 475,086,104 3,782,290 85,298,996 564,167,390 $ $ $ $ 2011 311,014,889 1,324,264 48,721,698 361,060,851 $ 172,162,748 2,147,527 33,568,393 207,878,668 $ 483,177,637 3,471,791 82,290,091 568,939,519 $ $ $ $ 305,260,721 1,016,096 47,005,244 353,282,061 181,476,154 1,939,786 28,480,396 211,896,336 486,736,875 2,955,882 75,485,640 565,178,397 120 2012 $ 298,329,672 1,012,020 59,368,657 358,710,349 $ 181,437,600 1,975,308 35,270,129 218,683,037 $ $ 479,767,272 2,987,328 94,638,786 577,393,386 2013 $ 314,990,028 10,755,866 33,848,899 359,594,793 $ 186,611,050 1,688,303 35,383,205 223,682,558 $ $ 501,601,078 12,444,169 69,232,104 583,277,351 CITY OF LEWISVILLE, TEXAS CHANGES IN NET POSITION Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2004 2005 2006 8,320,410 6,266,618 25,824,358 15,564,147 2,738,681 58,714,214 $ 9,767,189 6,309,552 27,664,557 15,182,968 3,300,061 62,224,327 $ 13,392,249 6,199,881 28,182,352 13,667,907 2,202,454 63,644,843 Business-type activites Water and sewer Total business-type activites expenses 16,708,528 16,708,528 17,108,879 17,108,879 19,556,158 19,556,158 19,676,760 19,676,760 Total primary government expenses 75,422,742 79,333,206 83,201,001 87,983,162 Program Revenues Governmental activities Charges for services General government Culture, parks & recreation Public safety Public services Operating grants and contributions Capital grants and contributions Total governmental activites program revenues 2,379,433 1,489,037 3,666,332 1,542,101 8,440,210 7,643,587 25,160,700 2,769,731 1,511,722 4,500,082 1,524,658 13,842,626 23,363,428 47,512,247 3,309,296 1,612,039 4,695,193 1,816,495 1,281,838 17,673,122 30,387,983 3,622,179 1,537,244 4,560,499 2,118,574 2,109,623 12,977,908 26,926,027 Business-type activities Charges for services Water and sewer Capital grants and contributions Total business-type activities program revenues 21,677,904 2,243,826 23,921,730 22,653,761 5,006,041 27,659,802 26,184,466 4,495,510 30,679,976 23,449,079 4,608,716 28,057,795 Total primary government program revenues 49,082,430 75,172,049 61,067,959 54,983,822 (33,553,514) 7,213,202 $ (26,340,312) (14,712,080) 10,550,923 $ (4,161,157) Expenses Governmental activities General government Culture, parks and recreation Public safety Public services Interest on long-term debt Total governmental activities expenses Net (Expense)/Revenue Governmental activities Business-type activities Total primary government net expense $ Source: Comprehensive Annual Financial Reports 121 (33,256,860) 11,123,818 $ (22,133,042) 2007 $ 9,848,489 7,139,298 30,491,917 18,569,013 2,257,685 68,306,402 (41,380,375) 8,381,035 $ (32,999,340) TABLE-2 (Continued) Fiscal Year 2008 2010 2011 2012 2013 10,746,552 8,667,117 35,349,800 20,313,784 2,673,325 77,750,578 $ 10,760,138 9,299,504 37,628,477 22,404,173 2,753,817 82,846,109 $ 10,997,464 9,585,769 38,558,345 24,634,802 2,603,426 86,379,806 $ 11,987,014 9,487,780 39,275,855 25,527,286 2,666,807 88,944,742 $ 13,005,019 9,377,831 40,983,264 25,089,041 2,602,891 91,058,046 20,378,432 20,378,432 20,822,278 20,822,278 21,521,566 21,521,566 23,055,596 23,055,596 22,170,962 22,170,962 22,238,910 22,238,910 95,714,513 98,572,856 104,367,675 109,435,402 111,115,704 113,296,956 3,995,292 1,794,574 5,422,367 2,067,879 1,136,855 35,595,714 50,012,681 3,386,580 1,741,591 5,929,457 1,516,232 1,202,143 23,865,801 37,641,804 3,306,827 1,696,101 5,000,197 1,656,995 2,228,626 11,183,861 25,072,607 3,348,523 1,631,629 5,665,379 1,947,382 2,190,754 3,579,450 18,363,117 3,447,957 1,615,228 5,390,583 1,512,075 2,517,289 15,090,545 29,573,677 3,383,721 1,558,232 6,021,116 2,161,083 2,415,909 4,745,018 20,285,079 25,340,886 11,228,765 36,569,651 25,657,454 1,823,269 27,480,723 26,146,670 1,470,699 27,617,369 28,072,610 2,643,208 30,715,818 28,375,842 4,254,018 32,629,860 27,797,951 2,851,893 30,649,844 86,582,332 65,122,527 52,689,976 49,078,935 62,203,537 50,934,923 (25,323,400) 16,191,219 $ (9,132,181) (40,108,774) 6,658,445 $ (33,450,329) (57,773,502) 6,095,803 $ (51,677,699) (68,016,689) 7,660,222 $ (60,356,467) (59,371,065) 10,458,898 $ (48,912,167) (70,772,967) 8,410,934 $ (62,362,033) $ 10,697,346 7,927,455 33,721,041 19,409,072 3,581,167 75,336,081 2009 $ (Continued) 122 CITY OF LEWISVILLE, TEXAS CHANGES IN NET POSITION Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year General Revenues and Other Changes in Net Position Governmental activities Taxes Property taxes Sales taxes Other taxes Franchise taxes Occupancy taxes Penalties and interest Intergovernmental Investment earnings Gain (loss) on disposal of assets Miscellaneous Transfers Total governmental activities 2004 2005 2006 $ 22,737,306 16,970,465 179,804 4,276,869 1,178,478 202,683 699,017 43,925 336,007 2,617,820 49,242,374 $ 23,305,174 17,284,149 201,297 4,485,406 1,348,761 252,204 1,518,114 77,563 589,133 (286,860) 48,774,941 $ 25,125,486 18,113,568 1,074,299 4,599,447 1,480,548 231,016 2,350,326 470 4,558,898 2,965,612 60,499,670 2007 $ 26,257,705 19,216,744 1,043,749 4,435,578 1,606,115 209,514 3,614,454 (2,424,552) 243,839 2,943,135 57,146,281 Business-type activities Investment earnings Intergovernmental contributions Gain (loss) on disposal of assets Miscellaneous Transfers Total business-type activities 626,967 300,467 529,186 (2,617,820) (1,161,200) 1,225,226 51,544 286,860 1,563,630 2,313,351 5,701 (2,965,612) (646,560) 2,775,365 33,103 47,451 (2,943,135) (87,216) Total primary government 48,081,174 50,338,571 59,853,110 57,059,065 Change in Net Position Governmental activities Business-type activities Total primary government 15,688,860 6,052,002 $ 21,740,862 34,062,861 12,114,553 $ 46,177,414 27,242,810 10,477,258 $ 37,720,068 15,765,906 8,293,819 24,059,725 Source: Comprehensive Annual Financial Reports 123 $ TABLE-2 (Continued) Fiscal Year 2008 $ 27,936,176 18,932,595 1,119,792 4,803,626 1,830,230 238,428 3,287,167 9,682 416,282 3,073,842 61,647,820 2009 $ 29,580,192 17,686,496 1,095,822 4,635,238 1,554,826 219,250 2,051,754 5,560 291,772 3,108,655 60,229,565 2010 2011 2012 2013 $ 28,898,185 18,605,874 1,046,346 5,055,711 1,551,355 186,231 526,984 13,118 272,693 3,260,894 59,417,391 $ 27,774,848 18,677,965 1,038,923 5,272,499 1,862,191 146,689 459,600 3,075 1,077,579 3,924,530 60,237,899 $ 28,739,963 22,666,950 1,011,328 5,436,197 1,960,910 228,746 365,045 8,525 396,641 3,985,048 64,799,353 $ 29,579,363 27,451,139 1,200,502 5,814,797 2,065,363 154,905 624,125 210,934 3,477 817,291 3,735,515 71,657,411 2,015,797 4,385 64,325 (3,073,842) (989,335) 1,344,073 57,586 (3,108,655) (1,706,996) 211,973 81,358 (3,260,894) (2,967,563) 269,639 12,337 (3,924,530) (3,642,554) 286,958 25,893 (3,985,048) (3,672,197) 120,530 203,572 (3,735,515) (3,411,413) 60,658,485 58,522,569 56,449,828 56,595,345 61,127,156 68,245,998 36,324,420 15,201,884 $ 51,526,304 20,120,791 4,951,449 25,072,240 1,643,889 3,128,240 4,772,129 5,428,288 6,786,701 $ 12,214,989 884,444 4,999,521 5,883,965 $ $ (7,778,790) 4,017,668 $ (3,761,122) 124 $ CITY OF LEWISVILLE, TEXAS FUND BALANCES, GOVERNMENTAL FUNDS Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) 2004 2005 Fiscal Year 2006 2007 General fund Nonspendable Assigned Unassigned Total general fund $ 132,518 618,052 17,363,344 $18,113,914 $ 262,563 250,242 19,371,265 $19,884,070 $ 252,581 209,551 26,212,925 $26,675,057 271,000 222,778 26,272,130 $ 26,765,908 All other governmental funds Nonspendable Restricted Committed Assigned Total all other governmental funds 10,379 28,556,129 5,194,857 5,767,714 $39,529,079 3,764,412 21,955,942 5,406,239 4,874,817 $36,001,410 $ 3,774,672 19,247,971 5,672,381 7,289,482 $35,984,506 $ Source: Comprehensive Annual Financial Reports 125 $ 3,736,550 30,231,341 7,578,509 11,025,342 $ 52,571,742 TABLE-3 Fiscal Year 2008 2009 2010 2011 2012 2013 $ 196,935 156,790 31,175,630 $ 31,529,355 $ 228,411 121,575 31,658,380 $32,008,366 $ 201,588 136,854 26,429,898 $ 26,768,340 $ 230,316 100,680 28,989,043 $ 29,320,039 $ 234,127 222,738 30,615,982 $ 31,072,847 $ $ $ 3,244,870 31,570,851 8,589,094 7,827,143 $51,231,958 $ $ $ $ 3,489,874 35,273,808 8,365,004 12,433,089 $ 59,561,775 3,245,372 26,443,792 7,687,555 14,681,969 $ 52,058,688 2,758,852 22,563,101 7,705,016 10,335,218 $ 43,362,187 126 2,518,104 31,447,210 6,812,474 6,985,090 $ 47,762,878 381,982 538,290 30,571,006 $ 31,491,278 2,265,652 43,011,859 7,065,074 7,166,018 $ 59,508,603 CITY OF LEWISVILLE, TEXAS CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2004 Revenues Property and other taxes Licenses and permits Charges for services Recreation Fines Investment earnings Intergovenrmental Grants Culture, parks and recreation Public safety Public services Contributions and donations Miscellaneous Total revenues $ 2005 45,587,753 1,632,628 4,048,211 1,290,580 2,488,340 538,541 - $ 2006 47,035,823 1,578,864 4,140,027 1,332,438 2,686,299 1,154,775 - $ 2007 50,547,358 2,070,156 4,858,787 1,426,331 2,826,234 2,350,327 - $ 52,886,457 2,393,345 5,212,302 1,385,188 2,680,535 3,614,458 - 9,749 199,699 1,029,873 10,689,358 601,293 68,116,025 9,741 559,031 1,557,993 12,803,249 1,084,302 73,942,542 10,512 384,964 730,845 3,499,030 4,961,341 73,665,885 10,305 588,798 1,256,152 3,205,708 761,399 73,994,647 Expenditures General government Culture, parks and recreation Public safety Public services Capital outlay Debit service: Principal Interest and fiscal charges Total expenditures 6,958,931 5,783,662 25,422,485 8,525,945 15,030,177 8,181,298 5,689,354 26,960,074 9,101,845 26,532,611 7,543,722 6,058,682 28,400,718 9,049,144 16,527,094 8,505,159 6,118,753 30,221,744 9,696,518 14,848,067 7,608,634 2,413,005 71,742,839 4,846,032 2,376,104 83,687,318 7,163,197 2,674,752 77,417,309 5,335,000 2,294,160 77,019,401 Excess (deficiency) of revenues over (under) expenditures (3,626,814) (9,744,776) (3,751,424) (3,024,754) Other financing sources (uses) Transfers in Transfers out Proceeds from refunding bonds Proceeds from general obligation bonds Proceeds from certificates of obligation Payments to refunding bond escrow agent Premium (discount) on issuance of general obligation bonds Proceeds from sale of assets Contributions from other sources Total other financing sources (uses) 6,523,247 (3,801,884) 6,860,000 2,475,000 27,941 12,084,304 6,192,216 (3,210,986) 9,655,000 4,790,000 (10,201,721) 762,754 7,987,263 7,780,970 (4,815,817) 6,805,000 755,354 10,525,507 16,364,425 (10,308,842) 5,070,000 13,655,000 (5,398,353) 658,892 14,890 20,056,012 Net change in fund balances $ 8,457,490 Debt service as a percentage of noncapital expenditures 17.5% $ (1,757,513) $ 11.8% Notes: Debt service percentage is based on noncapital expenditures to the extent of capital outlay capitalized for the government-wide statement of net assets. See Exhibit 6 of CAFRs for further information. Source: Comprehensive Annual Financial Reports 127 6,774,083 16.0% $ 17,031,258 12.3% TABLE-4 Fiscal Year 2008 $ $ 2009 54,828,308 2,328,846 5,603,449 1,591,676 2,916,566 3,287,167 - $ 2010 54,752,225 1,767,049 5,702,288 1,536,596 2,950,843 2,051,749 - $ 2011 55,411,805 1,894,107 5,522,540 1,502,618 2,946,204 526,987 - $ 2012 54,800,940 2,210,218 5,543,470 1,432,238 2,752,316 459,604 - $ 2013 60,070,877 1,741,153 5,680,893 1,448,853 2,874,525 365,043 - $ 66,279,731 2,375,771 6,051,283 1,380,911 2,954,961 210,934 1,771,288 1,061,894 220,857 708,082 27,641,031 975,687 101,163,563 312,057 238,649 686,616 5,072,965 1,026,729 76,097,766 29,634 1,247,926 1,038,782 4,018,465 1,080,387 75,219,455 24,424 538,837 934,516 1,922,304 2,109,044 72,727,911 25,936 580,182 875,473 10,100,624 1,880,771 85,644,330 515,834 945,453 1,434,519 2,258,538 86,179,223 8,956,950 6,640,069 32,450,887 9,724,646 36,317,662 9,334,801 6,458,408 33,755,435 9,998,112 24,862,380 9,115,750 6,207,016 35,016,553 9,492,466 14,505,465 9,404,791 6,300,265 35,209,021 9,591,553 14,330,533 9,933,848 6,318,868 36,816,688 9,687,620 23,658,611 10,350,058 6,288,988 39,487,803 10,596,633 16,208,343 4,995,000 3,494,604 102,579,818 5,205,000 2,869,614 92,483,750 5,695,000 2,849,017 82,881,267 6,590,000 2,604,989 84,031,152 6,325,000 2,405,624 95,146,259 5,410,000 3,143,454 91,485,279 (1,416,255) (16,385,984) (7,661,812) (11,303,241) (9,501,929) (5,306,056) 12,103,060 (7,652,635) 8,715,000 (5,372) 9,682 13,169,735 7,478,048 (4,369,393) 5,430,000 (9,037.00) 5,560 8,535,178 13,622,782 (10,397,384) 2,565,000 (2,555,000) 13,118 3,248,516 8,015,843 (4,099,531) 1,605,000 (1,610,846) 24,898 3,075 1,220,000 5,158,439 8,778,083 (4,072,035) 16,490,000 9,260,000 (16,969,925) 1,240,780 8,525 920,000 15,655,428 11,323,247 (7,587,732) 12,455,000 11,753,480 11.7% $ (7,850,806) 11.9% $ (4,413,296) 12.1% $ (6,144,802) 12.5% 128 $ 6,153,499 11.4% 1,276,220 3,477 17,470,212 $ 12,164,156 10.8% CITY OF LEWISVILLE, TEXAS ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Last Ten Fiscal Years (Unaudited) Less: Tax-Exempt Property TABLE-5 Less: Property Under Freeze Less: TIRZ Zones Property Total Taxable Assessed Value Total Direct Tax Rate Fiscal Year Estimated Market Value Real Personal Property Property & Other 2004 4,707,742,831 848,715,965 522,296,755 - 29,866,358 5,004,295,683 0.45050 2005 4,821,098,766 978,286,841 573,637,347 - 35,297,446 5,190,450,814 0.45050 2006 5,111,584,596 988,050,320 635,339,154 109,383,097 50,036,866 5,304,875,799 0.45679 2007 5,303,672,869 1,017,510,806 677,304,019 131,762,437 65,376,309 5,446,740,910 0.45679 2008 6,040,730,857 1,129,555,348 774,550,122 150,432,444 88,496,443 6,156,807,196 0.44050 2009 6,446,207,177 1,191,217,048 839,703,836 164,430,210 107,112,885 6,526,177,294 0.44021 2010 6,375,044,714 1,255,326,502 1,007,324,631 178,908,241 79,708,452 6,364,429,892 0.44021 2011 6,149,759,302 1,187,121,672 988,851,847 190,869,769 78,909,810 6,078,249,548 0.44021 2012 6,314,259,228 1,355,266,675 1,121,735,174 205,892,126 70,665,418 6,271,233,185 0.44021 2013 6,484,331,621 1,469,479,781 1,187,401,591 209,556,944 85,932,250 6,470,920,617 0.44021 Source: Denton Central Appraisal District, Certified Valuations 129 CITY OF LEWISVILLE, TEXAS DIRECT AND OVERLAPPING PROPERTY TAX RATES (per $100 of assessed value) Last Ten Fiscal Years (Unaudited) Fiscal Year Operating/ General Rate City Direct Rates General Obligation Debt Service TABLE-6 Total Direct Overlapping Rates Lewisville Independent School Denton District County Total Direct & Overlapping Rates 2004 0.31581 0.13469 0.45050 1.7700 0.24717 2.4677 2005 0.31641 0.13409 0.45050 1.7700 0.25480 2.4753 2006 0.32107 0.13572 0.45679 1.7700 0.24648 2.4733 2007 0.32184 0.13495 0.45679 1.6400 0.23192 2.3287 2008 0.32184 0.11866 0.44050 1.3700 0.23589 2.0464 2009 0.32156 0.11865 0.44021 1.3800 0.23577 2.0560 2010 0.32156 0.11865 0.44021 1.4087 0.24980 2.0987 2011 0.32289 0.11732 0.44021 1.4267 0.27390 2.1408 2012 0.32289 0.11732 0.44021 1.4260 0.27736 2.1436 2013 0.32289 0.11732 0.44021 1.4530 0.28287 2.1761 Source: City of Lewisville, Denton County Tax Assessor 130 CITY OF LEWISVILLE, TEXAS PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO (Unaudited) TABLE-7 2013 2004 Taxable Assessed Valuation Taxpayer Digital Lewisville LLC Taxable Assessed Valuation Taxpayer 94,943,258 1.47% Verizon Southwest Vista Ridge Joint Venture 66,948,339 1.04% Alcatel-Lucent USA Inc 63,483,991 TIC Lago Vista LP etal 1.46% Southwest Prop LP P/S 59,241,288 1.18% 0.98% Teachers Insurance Annuity Association 52,121,567 1.04% 51,699,375 0.80% Vista Ridge Joint Venture 44,873,885 0.90% Bella Madera Apartments LLC 44,027,483 0.68% Columbia Medical Center Lewisville 39,725,510 0.79% Teachers Insurance Annuity Assoc 43,347,722 0.67% Texas New Mexico Power Company 39,365,633 0.79% Columbia Medical Center Lewisville 39,572,557 0.61% Vista Ridge OP&F Inc 36,467,166 0.73% Verizon Southwest 38,550,790 0.60% Kir Lewisville LP P/S 34,749,158 0.69% GRE Vista Ridge LP 38,500,000 0.60% DDR Lakepointe Crossing LLC 26,408,433 0.53% DFW Lewisville Partners Group 37,453,194 0.58% Realty Association Fund IV LP 26,146,395 0.52% $ 518,526,709 8.03% $ 431,977,261 8.63% TOTAL Source: Denton Central Appraisal District 131 $ Percentage of Total City Taxable Assessed Value 72,878,226 TOTAL $ Percentage of Total City Taxable Assessed Value CITY OF LEWISVILLE, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS Last Ten Fiscal Years (Unaudited) Adjustments to Levy in Subsequent Years TABLE-8 Fiscal Year Taxes Levied Within the Fiscal Year of the Levy Adjusted Taxes Levied for the Fiscal Year 2004 22,831,246 57,486 22,888,732 22,541,885 98.73% 294,884 22,836,769 99.77% 2005 23,542,373 42,500 23,584,873 23,292,813 98.94% 249,040 23,541,853 99.82% 2006 25,246,156 (26,081) 25,220,075 24,949,844 98.83% 227,709 25,177,553 99.83% 2007 26,677,093 30,356 26,707,449 26,470,497 99.23% 199,327 26,669,824 99.86% 2008 28,264,833 (27,972) 28,236,861 28,029,846 99.17% 173,138 28,202,984 99.88% 2009 29,966,864 (58,630) 29,908,234 29,762,422 99.32% 94,127 29,856,549 99.83% 2010 29,389,678 (121,823) 29,267,855 29,115,450 99.07% 97,493 29,212,943 99.81% 2011 28,228,960 7,401 28,236,361 28,084,210 99.49% 107,571 28,191,781 99.84% 2012 28,925,178 (22,432) 28,902,746 28,814,980 99.62% 31,812 28,846,792 99.81% 2013 29,949,696 - 29,949,696 29,838,761 99.63% - 29,838,761 99.63% Collected Within the Fiscal Year of the Levy Percentage of Amount Fiscal Year Levy Source: Denton County Appraisal District and Denton County Tax Office 132 Collections in Subsequent Years Total Collections to Date Percentage of Amount Adjusted Levy CITY OF LEWISVILLE, TEXAS GROSS SALES BY CATEGORY Last Ten Calendar Years (Unaudited) Calendar Year 2004 Construction $ 2005 269,407,092 $ 2006 271,345,345 $ 2007 325,521,361 $ 428,975,430 Manufacturing 577,502,805 651,749,063 891,564,228 829,222,026 Transportation, Warehousing 495,269,595 355,601,064 22,331,869 25,941,784 Wholesale Trade 334,301,142 374,468,902 492,483,851 546,277,231 1,844,092,385 1,919,947,937 2,027,046,759 2,091,888,382 Finance, Insurance and Information 77,259,548 69,693,167 72,708,565 58,684,886 Real Estate, Rental and Leasing 32,156,100 54,857,322 39,287,358 55,201,502 Professional, Scientific and Technical Services 72,626,579 88,493,369 150,989,059 151,893,983 Admin, Support, Waste Mgmt, Remediation Services 97,175,211 200,665,461 292,811,541 158,959,087 Educational Services 1,221,464 1,300,212 3,510,020 7,222,172 Health Care and Social Assistance 4,280,367 5,698,121 5,586,377 5,232,521 Arts, Entertainment and Recreation 32,702,023 38,462,571 46,842,409 56,154,449 Accommodation and Food Services 165,856,056 178,596,005 199,071,846 203,938,455 76,483,948 76,126,157 81,208,086 91,832,953 78,305,983 $ 4,158,640,298 76,944,820 $ 4,363,949,516 79,133,007 $ 4,730,096,336 55,438,461 $ 4,766,863,322 Retail Trade Other Services Other, including industries with less than four entities Total City direct sales tax rate 1.25% 1.25% 1.25% 1.25% Notes: The Comptrollers Office is prohibited from releasing information as to the amount of sales of particular taxpayers in the State of Texas. The Other category above represents those North American Industry Classification System (NAICS)categories with fewer than four (4) taxpayers in an industry and industries with small gross sales. Among the industries included in the Other category are Agriculture, Forestry, Fishing, Hunting, Mining, Quarrying, Oil and Gas Extraction,Utilities, Management of Companies & Enterprises and Public Administration. Source: Texas Comptroller of Public Accounts, quarterly historical reports of gross sales. 133 TABLE-9 Calendar Year 2008 $ 2009 389,267,507 $ 2010 426,073,490 $ 2011 315,604,945 $ 2012 508,276,308 $ 2013 521,804,800 $ 583,295,010 891,125,270 751,857,471 753,995,737 761,594,169 876,625,971 914,284,411 650,786,731 710,880,556 691,150,901 747,819,849 818,329,058 511,874,252 623,518,433 745,420,584 801,433,783 998,636,961 1,041,654,476 975,236,076 2,075,807,503 1,927,414,046 1,878,956,373 1,931,419,742 2,111,473,213 2,183,666,702 53,044,625 53,996,484 57,425,359 70,840,042 69,075,343 66,652,294 49,024,728 34,973,325 19,078,930 22,216,520 35,585,520 41,154,276 159,409,613 194,403,930 211,806,495 275,395,584 288,679,219 412,722,141 166,466,814 163,933,681 166,933,359 166,911,144 178,166,862 178,468,571 6,159,101 5,983,619 7,033,934 6,969,123 7,194,735 6,649,409 9,610,245 6,350,766 5,141,407 8,672,569 35,890,987 35,015,715 30,144,139 41,445,461 25,715,214 26,861,732 30,244,591 34,052,488 207,232,660 209,960,645 209,744,109 215,936,485 242,533,721 258,035,281 100,185,148 93,452,124 126,406,332 130,789,356 195,709,795 149,266,942 62,016,500 $ 5,473,799,017 56,823,976 $ 5,422,970,158 51,936,646 $ 5,322,363,524 55,951,821 $ 5,928,291,405 64,611,945 $ 6,517,580,236 64,288,526 $ 6,414,662,094 1.25% 1.25% 1.25% 1.25% 134 1.50% 1.50% CITY OF LEWISVILLE, TEXAS DIRECT AND OVERLAPPING SALES TAX RATES Last Ten Fiscal Years (Unaudited) TABLE-10 Overlapping Rates City Direct Rates Fire Control, Prevention, and Emergency Medical Services District Fiscal Year General Fund Parks and Library Development Corporation 2004 1.00% 0.25% - - 0.50% 1.75% 2005 1.00% 0.25% - - 0.50% 1.75% 2006 1.00% 0.25% - - 0.50% 1.75% 2007 1.00% 0.25% - - 0.50% 1.75% 2008 1.00% 0.25% - - 0.50% 1.75% 2009 1.00% 0.25% - - 0.50% 1.75% 2010 1.00% 0.25% - - 0.50% 1.75% 2011 1.00% 0.25% - - 0.50% 1.75% 2012 1.00% 0.25% 0.125% 0.125% 0.50% 2.00% 2013 1.00% 0.25% 0.125% 0.125% 0.50% 2.00% Crime Control and Prevention District Denton Co. Transit Authority Total Direct & Overlapping Rates Source: Texas Comptroller of Public Accounts Notes: The Lewisville Crime Control and Prevention District and the Lewisville Fire Control, Prevention, and Emergency Medical Services District were created by the voters in November 2011. Each district's levy of a 1/8% sales tax took effect on April 1, 2012. 135 CITY OF LEWISVILLE, TEXAS PRINCIPAL SALES TAX PAYERS Current Year and Nine Years Ago (Unaudited) Calendar year 2013 Number of Filers OTHER 810 Discount Department Stores 9 Full-Service Restaurants 142 Department Stores (except Discount Department Stores) 17 Wireless Telecommunications carriers (except satellite) 59 Electric Power Distribution 50 Limited-Service Restaurants 102 Radio, Television, and Other Electronics Stores 33 Home Centers 4 General Warehouse and Storage 4 Industry Total Notes: 1,230 Percentage of Total 8.91% 0.10% 1.56% 0.19% 0.65% 0.55% 1.12% 0.36% 0.04% 0.04% Tax Liability $ 2,247,632 1,759,722 1,518,688 1,113,890 886,871 858,629 845,333 573,367 522,344 501,396 Percentage of Total 7.88% 6.17% 5.33% 3.91% 3.11% 3.01% 2.96% 2.01% 1.83% 1.76% 13.52% $ 10,827,872 37.97% The Comptrollers Office is prohibited from releasing information as to the amounts of sales or use tax paid by a particular taxpayer in the State of Texas. Therefore, the categories presented above are intended to provide alternative information regarding the sources of the City's sales tax revenue. The OTHER category above represents those NAICS classifications with fewer than four (4) taxpapers in a classification. In order to keep the identity of these taxpayers confidential, classifications with fewer than four (4) taxpayers are combined as "OTHER" and represented together as one classification. Source: Texas Comptroller of Public Accounts 136 TABLE-11 Calendar Year 2004 Industry OTHER Department Stores (except Discount Department Stores) Department Stores Full-Service Restaurants Home Centers Hydroelectric Power Generation Household Appliance Stores Miscellaneous Retail Stores, Not Elsewhere Classified Limited-Service Restaurants Discount Department Stores Number of Filers 850 11 4 87 6 5 30 434 60 4 Percentage of Total 11.04% 0.14% 0.05% 1.13% 0.08% 0.06% 0.39% 5.64% 0.78% 0.05% Tax Liability $ 2,285,098 1,206,787 1,063,299 987,176 930,147 812,460 601,861 538,875 522,122 516,542 Percentage of Total 10.72% 5.66% 4.99% 4.63% 4.36% 3.81% 2.82% 2.53% 2.45% 2.42% 1,491 19.36% $ 9,464,367 44.39% Total 137 CITY OF LEWISVILLE, TEXAS COMBINED SCHEDULE OF BONDS September 30, 2013 (Unaudited) Issue General Obligation BondsSeries 2004 Series 2005 Refunding & Improvement Series 2006 Series 2007 Refunding & Improvement Series 2008 Series 2009 Series 2010 Refunding Series 2011 Refunding Series 2012 Refunding & Improvement Series 2013 Rates Interest Payment Dates Date Issued Maturity Annual Serial Payments 4.13 - 4.13 4.00 - 5.00 4.00 - 5.00 4.00 - 5.00 4.00 - 4.38 3.00 - 4.25 2.67 - 2.67 2.00 - 2.00 2.00 - 4.00 1.50 - 5.00 02/15 & 08/15 02/15 & 08/15 02/15 & 08/15 02/15 & 08/15 02/15 & 08/15 02/15 & 08/15 02/15 & 08/15 02/15 & 08/15 02/15 & 08/15 02/15 & 08/15 06/01/04 04/15/05 05/15/06 05/15/07 05/15/08 06/01/09 03/01/10 04/01/11 05/15/12 05/15/13 02/15/2014 02/15/2021 02/15/2022 02/15/2023 02/15/2024 02/15/2025 02/15/2019 02/15/2014 02/15/2028 02/15/2029 450,000 365,000 415,000 980,000 405,000 265,000 600,000 545,000 90,000 255,000 450,000 1,410,000 595,000 2,235,000 830,000 405,000 895,000 545,000 2,685,000 1,055,000 3.00 - 5.25 4.00 - 5.00 4.00 - 5.00 02/15 & 08/15 02/15 & 08/15 02/15 & 08/15 06/01/04 05/15/07 05/15/07 02/15/2024 02/15/2032 02/15/2027 980,000 530,000 205,000 980,000 1,195,000 980,000 4.00 - 5.00 4.00 - 4.63 02/15 & 08/15 02/15 & 08/15 04/15/05 05/15/06 02/15/2021 02/15/2022 290,000 240,000 - 1,235,000 340,000 Series 2008 3.88 - 4.25 02/15 & 08/15 05/15/08 02/15/2024 515,000 - 775,000 Series 2009 2.75 - 4.30 02/15 & 08/15 06/01/09 02/15/2025 645,000 - 975,000 Series 2011 Refunding & Improvement 3.00 - 5.00 02/15 & 08/15 04/01/11 02/15/2027 565,000 - 1,220,000 Total General Obligation Bonds Certificates of ObligationSeries 2004 Series 2007A Series 2007B Total Certificates of Obligation Revenue BondsSeries 2005 Refunding & Improvement Series 2006 Series 2012 Refunding & Improvement 2.00 - 4.00 02/15 & 08/15 05/15/12 02/15/2028 245,000 - 595,000 Series 2013 1.00 - 5.00 02/15 & 08/15 05/15/13 02/15/2029 245,000 - 430,000 Total Revenue Bonds Total Bonds Payable NC = Non-Callable CC = Currently Callable 138 TABLE-12 Bonds Retired/ Defeased Issued Outstanding Principal Interest Option Date 6,860,000 14,445,000 6,805,000 18,725,000 8,715,000 5,430,000 9,600,000 1,605,000 25,750,000 12,455,000 6,410,000 8,730,000 2,320,000 3,965,000 1,430,000 1,475,000 5,490,000 1,060,000 - 450,000 5,715,000 4,485,000 14,760,000 7,285,000 3,955,000 4,110,000 545,000 25,750,000 12,455,000 450,000 1,410,000 415,000 1,375,000 455,000 265,000 895,000 545,000 90,000 255,000 9,281 234,728 195,986 671,050 293,006 145,100 97,789 5,450 998,850 498,253 110,390,000 30,880,000 79,510,000 6,155,000 3,149,493 23,690,000 18,180,000 8,040,000 22,710,000 2,770,000 465,000 980,000 15,410,000 7,575,000 980,000 530,000 205,000 24,500 694,609 334,941 49,910,000 25,945,000 23,965,000 1,715,000 1,054,050 11,475,000 4,000,000 6,855,000 1,430,000 4,620,000 2,570,000 1,235,000 240,000 183,013 108,123 02/15/15 02/15/16 10,300,000 3,305,000 6,995,000 515,000 275,144 02/15/18 11,900,000 2,430,000 9,470,000 645,000 350,673 02/15/19 13,465,000 2,000,000 11,465,000 1,020,000 429,675 02/15/21 5,925,000 200,000 5,725,000 500,000 171,831 02/15/22 5,205,000 245,000 194,598 02/15/23 46,050,000 4,400,000 1,713,057 5,205,000 - 62,270,000 $ Requirements Fiscal Year Ended September 30, 2013 222,570,000 16,220,000 $ 73,045,000 $ 149,525,000 $ 12,270,000 139 $ 5,916,600 02/15/14 02/15/15 02/15/16 02/15/17 02/15/18 02/15/19 CC NC 02/15/22 02/15/23 02/15/14 02/15/17 02/15/17 CITY OF LEWISVILLE, TEXAS RATIO OF OUTSTANDING DEBT BY TYPE Last Ten Fiscal Years (Unaudited) TABLE-13 Governmental Activities Business-Type Activities Fiscal Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Notes: General Obligation Bonds 49,216,146 49,213,197 51,330,000 59,515,000 63,235,000 63,460,000 64,810,000 58,235,000 73,405,000 79,510,000 Certificates of Obligation 23,690,000 23,170,000 19,955,000 45,175,000 43,975,000 42,730,000 41,445,000 40,090,000 25,575,000 23,965,000 Water and Sewer Revenue Bonds 54,340,000 51,635,000 49,300,000 42,510,000 46,190,000 53,115,000 40,740,000 45,780,000 45,220,000 46,050,000 Total Primary Government 127,246,146 124,018,197 120,585,000 147,200,000 153,400,000 159,305,000 146,995,000 144,105,000 144,200,000 149,525,000 Percentage of Personal Income* Per Capita* 6.40% 5.92% 4.95% 5.47% 6.14% 6.27% 5.23% 5.12% 5.79% 5.39% 1,480 1,404 1,353 1,608 1,652 1,693 1,543 1,511 1,502 1,503 Details regarding the City's outstanding debt can be found in the notes to the financial statements and on Table 12. *See Table 17 for personal income and population data. 140 CITY OF LEWISVILLE, TEXAS RATIO OF NET GENERAL BONDED DEBT OUTSTANDING Last Ten Fiscal Years (Unaudited) TABLE-14 General Bonded Debt Outstanding Fiscal Year General Obligation Bonds Certificates of Obligation Total Less Available Debt Service Funds Net General Bonded Debt Percentage of Taxable Assessed Value of Property* Per Capita** 2004 49,216,146 23,690,000 72,906,146 3,574,856 69,331,290 1.39% 807 2005 49,213,197 23,170,000 72,383,197 3,595,602 68,787,595 1.33% 779 2006 51,330,000 19,955,000 71,285,000 1,654,816 69,630,184 1.31% 781 2007 59,515,000 45,175,000 104,690,000 2,065,205 102,624,795 1.88% 1,121 2008 63,235,000 43,975,000 107,210,000 2,063,119 105,146,881 1.71% 1,132 2009 63,460,000 42,730,000 106,190,000 2,157,818 104,032,182 1.59% 1,106 2010 64,810,000 41,445,000 106,255,000 1,575,726 104,679,274 1.64% 1,099 2011 58,235,000 40,090,000 98,325,000 1,270,236 97,054,764 1.60% 1,017 2012 73,405,000 25,575,000 98,980,000 1,456,703 97,523,297 1.56% 1,016 2013 79,510,000 23,965,000 103,475,000 1,622,886 101,852,114 1.57% 1,024 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. No general obligation debt limitation is imposed on the City under current State law or the City's Home Rule Charter. * See Table 5 for property value data. ** See Table 17 for population data. 141 CITY OF LEWISVILLE, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT As of September 30, 2013 (Unaudited) Government Unit TABLE-15 Debt Outstanding Estimated Share of Overlapping Debt Estimated Percentage Applicable Debt repaid with property taxes Lewisville Independent School District Coppell Independent School District Denton County Dallas County Dallas County Community College District Dallas County Hospital District Dallas County Schools Denton County Levee Improvement District #1 Denton County RUD #1 $ 1,113,538,429 174,797,888 596,245,000 136,430,000 355,880,000 705,000,000 67,675,000 9,780,000 - 27.89% 0.72% 12.06% 0.03% 0.03% 0.03% 0.03% 69.21% 0.00% $ Subtotal, overlapping debt 310,565,868 1,258,545 71,907,147 40,929 106,764 211,500 20,303 6,768,738 390,879,793 103,475,000 City of Lewisville (direct debt) 100.00% 103,475,000 $ Total direct and overlapping debt 494,354,793 Source: Non-City debt information provided by First Southwest Company and the Municipal Advisory Council of Texas (MAC) Notes: MAC calculates the overlapping percentages by determining the estimated shared assessed valuations of the overlapping taxing bodies and the City and then by dividing that shared value by the total assessed value of the overlapping taxing body. 142 CITY OF LEWISVILLE, TEXAS PLEDGED-REVENUE COVERAGE Last Ten Fiscal Years (Unaudited) Fiscal Year Total Revenues TABLE-16 Less: Operating Expenses Waterworks and Sewer System Revenue Bonds Net Average Available Annual Times Revenue Requirement Coverage Maximum P&I Requirement Times Coverage 2004 23,973,197 11,605,378 12,367,819 4,583,375 2.698 9,168,901 1.349 2005 25,215,347 12,002,786 13,212,561 4,041,010 3.270 8,520,251 1.551 2006 30,306,218 13,484,511 16,821,707 3,855,683 4.363 8,855,999 1.899 2007 28,553,142 13,205,679 15,347,463 3,522,329 4.357 7,424,561 2.067 2008 29,198,493 13,715,038 15,483,455 3,629,359 4.266 6,919,927 2.238 2009 27,978,220 14,157,311 13,820,909 4,191,171 3.298 7,498,648 1.843 2010 27,321,265 14,294,307 13,026,958 3,408,059 3.822 5,512,848 2.363 2011 29,627,081 16,082,970 13,544,111 3,584,741 3.778 6,189,089 2.188 2012 29,773,149 15,333,608 14,439,541 3,498,676 4.127 6,060,147 2.383 2013 29,996,994 15,253,780 14,743,214 3,559,577 4.142 6,113,056 2.412 Source: Comprehensive Annual Financial Reports and Fiscal Year Operating Budgets 143 CITY OF LEWISVILLE, TEXAS DEMOGRAPHIC AND ECONOMIC STATISTICS Last Ten Calendar Years (Unaudited) Year Estimated Population Personal Income (thousands of dollars) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 85,950 88,350 89,100 91,550 92,850 94,070 95,290 95,390 96,000 99,453 1,989,405 2,093,188 2,437,241 2,691,387 2,497,665 2,542,430 2,811,055 2,814,005 2,491,392 2,775,137 TABLE-17 Per Capita Personal Income 23,146 23,692 27,354 29,398 26,900 27,027 29,500 29,500 25,952 27,904 Median Age 31.6 32.3 32.6 30.6 31.4 32.5 32.5 32.5 32.2 School Enrollment Unemployment Rate 13,272 13,513 13,676 14,702 15,233 15,780 15,678 16,084 17,238 17,619 3.7% 4.1% 4.0% 3.6% 4.0% 6.7% 6.4% 6.7% 5.1% 4.9% Sources: Estimated population provided by the North Central Texas Council of Governments; US Census population used in census years. Personal income (total effective buying income) provided yearly from Sales and Marketing Management, "Survey of Buying Power." Beginning in 2005, per capita income provided by the American Community Survey. Current year personal income estimated from 2012 amount. School enrollment (for schools located in Lewisville) provided by Lewisville Independent School District. Unemployment rates provided on the Texas Workforce Commission website, annual rate, current year estimated as of September. Median age, previously, only available in census years. Beginning 2005, provided by the American Community Survey. Current year median age estimated from 2012 amount. 144 CITY OF LEWISVILLE, TEXAS PRINCIPAL EMPLOYERS Current Year and Nine Years Ago (Unaudited) TABLE-18 2013 Employer 2004 Employees Percentage of Total City Employment JP Morgan Chase Lewisville Independent School District (Lewisville employment only) Vista Ridge Mall (all outlets) Nationstar Mortgage Wal-Mart (all City locations) Xerox Medical Center of Lewisville City of Lewisville Ally Orthofix 4,350 7.64% 2,061 1,980 1,440 845 800 750 725 700 596 Total 14,247 Employer 3.62% 3.48% 2.53% 1.48% 1.41% 1.32% 1.27% 1.23% 1.05% Vista Ridge Mall (all outlets) Lewisville Independent School District (Lewisville employment only) Centex Home Equity Xerox Corporation Medical Center of Lewisville SYSCO Foods Household Automotive Finance City of Lewisville Wal-Mart Huffines Auto Group 25.03% Total Employees Percentage of Total City Employment 2,288 4.47% 1,803 1,400 1,318 800 750 700 631 430 375 3.52% 2.74% 2.58% 1.56% 1.47% 1.37% 1.23% 0.84% 0.73% 10,495 20.51% Source: City of Lewisville Economic Development & Budget Departments, Texas Workforce Commission, North Central Texas Council of Governments 145 CITY OF LEWISVILLE, TEXAS FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION / PROGRAM Last Ten Fiscal Years (Unaudited) Function/Program Administration and Legal 2004 2005 2006 TABLE-19 2007 Fiscal Year 2008 2009 2010 2011 2012 2013 55.0 59.0 62.0 64.0 67.0 68.0 67.0 68.0 68.0 68.0 Public Safety 324.0 325.0 338.0 341.0 350.0 349.0 348.0 349.0 359.0 384.0 Public Services 123.0 123.0 124.0 123.0 124.0 126.0 123.0 123.0 123.0 123.0 Community Development 61.0 63.0 62.0 63.0 63.0 66.0 64.0 65.0 68.0 69.0 Parks and Leisure 68.0 67.0 71.0 71.0 72.0 72.0 78.0 81.0 81.0 81.0 631.0 637.0 657.0 662.0 676.0 681.0 680.0 686.0 699.0 725.0 Total ` Source: City Budget Office, authorized positions 146 CITY OF LEWISVILLE, TEXAS OPERATING INDICATORS BY FUNCTION/PROGRAM Last Ten Fiscal Years (Unaudited) Fiscal Year 2004 General government Public Records Number of telephone information requests Birth and death certificates issued Culture, parks & recreation Parks and Leisure Number registered for recreation programs Public swim admissions Library visits Library volumes circulated Lake Park day use area attendance Public safety Police Calls for service Part 1 crimes Number of accidents 2005 2006 2007 8,743 5,490 11,747 6,398 17,879 6,141 12,953 6,896 3,912 21,292 297,676 495,406 110,572 2,723 55,329 295,255 463,666 171,007 2,749 63,915 291,141 447,449 160,113 3,752 59,422 398,160 719,620 119,781 62,597 4,478 2,870 63,570 4,305 2,838 63,813 3,610 2,863 61,949 3,238 2,695 2,910 4,674 2,909 5,153 3,258 5,373 3,098 5,557 1,475 319 426 1,279 420 81 1,225 709 83 1,211 457 100 922 844 948 766 19,630 12.43 32 73 19,955 13.86 38 93 20,560 16.04 38 212 20,781 13.35 38 106 12 12 15 15 31,846 120,535 27,523 112,205 27,691 104,929 28,765 108,242 Fire Number of fire incidents Number of EMS incidents Public services Public Services Concrete paving repair (cubic yards) Concrete utility cut repair (cubic yards) Asphalt pothole repair (tons) Community Development Building permits issued Municipal Water System Number of customers (meters) Average daily water consumption (MGD) System capacity (MGD) Number of water main breaks Sewer System System treatment capacity (MGD) Sanitation (residential) Residential refuse collected (tons) Commercial refuse collected (tons) Source: City Departments Notes: The decrease in tonnage for pothole repairs is due to the volume of asphalt street rehabilitation projects completed from 2003-2005. In the summer of 2005, the City's two existing pools were remodeled to water parks with pools and related amenities. For 2007, Lake Park attendance was down due to park being closed two summer months due to flooding. The Library was expanded during the 2006 and 2007 fiscal years. The System capacity of the municipal water system increased 15MGD with the Midway Pump Station in 2012. 147 TABLE-20 Fiscal Year 2008 2009 2010 2011 2012 12,074 6,455 13,868 6,336 13,138 4,691 12,169 3,540 9,627 2,917 8,007 2,569 4,412 51,322 398,568 766,182 193,690 4,336 48,028 383,836 815,191 191,721 5,277 43,888 451,015 774,629 131,667 7,459 42,021 424,079 692,066 127,382 6,591 39,304 403,308 686,804 137,507 7,070 38,672 377,915 637,083 140,626 66,358 3,577 2,482 74,658 4,039 2,458 66,751 4,038 2,409 61,514 3,448 2,318 63,014 3,272 2,490 58,675 2,903 2,457 3,007 5,771 3,246 6,088 3,107 6,069 3,395 6,529 3,083 6,855 3,206 6,622 1,187 415 54 966 393 38 830 221 78 716 306 39 694 300 88 500 284 209 698 552 509 439 379 520 21,233 14.71 38 120 21,987 14.75 38.4 113 21,912 14.44 38.4 75 21,342 16.84 38.4 96 21,427 16.06 53.4 99 21,662 15.11 53.4 105 15 15 15 15 15 15 27,528 107,798 27,732 106,084 27,179 109,773 25,302 104,528 25,418 76,119 26,119 73,589 148 2013 CITY OF LEWISVILLE, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Last Ten Fiscal Years (Unaudited) Fiscal Year 2004 2005 2006 2007 Function/Program Culture, parks & recreation Parks and Leisure Number of Parks Parks (acres) Swimming Pools Lighted Athletic Fields Lighted Tennis Courts Recreation Centers Senior Citizens Center Public safety Police Stations Police Vehicles Fire Stations Public services Public Services Streets - Paved (miles) Alleys - Paved (miles) Number of Street Lights Water and Sewer Water Mains (miles) Fire Hydrants Sanitary Sewer (miles) 32 1,240 2 23 4 2 1 32 1,240 2 23 4 2 1 32 1,240 2 23 4 2 1 32 1,240 2 23 4 2 1 1 N/A 6 1 N/A 6 1 85 6 1 95 6 538 80 2,600 565 83 2,600 573 85 2,600 573 85 2,600 N/A N/A N/A N/A N/A N/A 385 2,295 305 387 2,376 307 Source: City Departments Notes: N/A - Data not available. In recent years, Public Services has been utilizing more accurate technology, such as GPS, for the statistics provided. 149 TABLE-21 Fiscal Year 2008 2009 2010 2011 2012 2013 32 1,240 2 23 4 2 1 33 1,240 2 37 4 2 1 33 1,240 2 37 4 2 1 33 1,240 2 37 4 2 1 33 1,240 2 37 4 2 1 33 1,240 2 37 4 2 1 1 94 6 1 96 7 1 94 7 1 95 7 1 93 7 1 96 7 571 85 2,600 571 85 2,773 573 85 2,983 573 85 2,911 573 91 2,894 650 97 2,898 390 3,096 310 393 3,188 312 397 3,261 315 381 3,110 318 381 3,105 318 381 3,079 318 150 CITY OF LEWISVILLE, TEXAS FEDERAL SINGLE AUDIT REPORTS YEAR ENDED SEPTEMBER 30, 2013 CONTENTS Page 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 1 Independent Auditor's Report on Compliance for Each Major Program, on Internal Control over Compliance, and on the Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 3 Schedule of Findings and Questioned Costs 6 Summary of Prior Audit Findings 9 Schedule of Expenditures of Federal Awards 10 Notes to Schedule of Expenditures of Federal Awards 11 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 The Honorable Mayor and City Council City of Lewisville, Texas We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of City of Lewisville, Texas (the City), as of and for the year ended September 30, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements and have issued our report thereon dated March 12, 2014. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 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 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 that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. We did identify a certain deficiency in internal control, described in the accompanying schedule of findings and questioned costs as Finding 13-01 that we consider to be a significant deficiency. 1 City of Lewisville, Texas Page 2 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free of 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. City’s Response to Findings The City’s response to the findings identified in our audit is described in the accompanying schedule of findings and questioned costs. 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 entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. WEAVER AND TIDWELL, L.L.P. Dallas, Texas March 12, 2014 2 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM, ON INTERNAL CONTROL OVER COMPLIANCE, AND ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY OMB CIRCULAR A-133 The Honorable Mayor and City Council City of Lewisville, Texas Report on Compliance for Each Major Federal Program We have audited the City of Lewisville, Texas (the City)’s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended September 30, 2013. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the City’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the City’s compliance. Opinion on Each Major Federal Program In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended September 30, 2013. 3 City of Lewisville, Texas Page 4 Report on Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance 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 compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. 4 City of Lewisville, Texas Page 5 Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 We have audited the financial statements of the governmental activities, business-type activities, the aggregate discretely presented component units, each major fund and the aggregate remaining fund information of the City of Lewisville, as of and for the year ended September 30, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We have issued our report thereon dated March 12, 2014 which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the 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 schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. WEAVER AND TIDWELL, L.L.P Dallas, Texas March 12, 2014 5 CITY OF LEWISVILLE, TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2013 I. Summary of the Auditor's Results: Financial Statements a. An unmodified opinion was issued on the financial statements. b. Internal control over financial reporting: Material weakness(es) identified? Yes Significant deficiency(ies) identified that are not considered a material weakness? c. Noncompliance material to financial statements noted X X Yes No None Reported Yes X No Material weakness(es) identified? Yes X No Significant deficiency (ies) identified that are not considered a material weakness? reported Yes X None Reported Major Programs d. Internal control over major programs: e. An unmodified opinion was issued on compliance for major programs. f. Any audit findings disclosed that were required to be reported under Section 510(a) or OMB Circular A-133. Yes X No g. Identification of major program: Program/Cluster Name CDBG Progam CFDA # 14.218 h. The dollar threshold used to distinguish between type $ 300,000 A and type B programs. i. Auditee qualified as a low-risk auditee. 6 Yes X No CITY OF LEWISVILLE, TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2013 II. Findings Relating to the Financial Statements Which Are Required To Be Reported in Accordance with Generally Accepted Government Auditing Standards. Finding 13-01 Improve Controls over Fire Department Payroll Type: Internal control finding. Criteria: Internal controls over payroll are necessary to help ensure that only authorized charges for time worked are recorded in the City’s general ledger. Condition: Key control activities involving Fire Department payroll are not functioning as intended and monitoring of these activities is not occurring. Context: During our testing of controls over payroll, we noted that none of the eleven Fire Department employees selected for testing completed timesheets, which are required to be completed and signed by each employee and reviewed and signed by the employee’s supervisor, as called for under Administrative Directive 2.8.4. Cause: Fire Department employees have not been recording their time on timesheets and Human Resources has not been performing monitoring activities as called for in the Directive. Instead, the Fire Department has been utilizing shift attendance forms, which are not signed by the employee or their supervisor. Effect: There is an increased risk that unauthorized or erroneous payroll charges could be incurred by the City and recorded in the general ledger. Recommendation: The City should improve controls over payroll and ensure that the monitoring called for in Administrative Directive 2.8.4 occurs on a regular basis. Management Response: The Fire Department is creating a time sheet that will be signed by both the employee and the employee’s supervisor. In addition, the City of Lewisville is converting payroll systems effective August 2014. The new system includes a time and attendance program integrated with payroll. This system provides the capability to use electronic time sheets that offer employees and supervisors the ability to approve the submitted time using an electronic signature. The Human Resources Department has also implemented an internal policy which includes a quarterly audit of employee time sheets. The first audit is scheduled for the end of March 2014. 7 CITY OF LEWISVILLE, TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2013 III. Findings and Questioned Costs for Federal Awards Including Audit Findings as Described in I.f Above None 8 CITY OF LEWISVILLE, TEXAS SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED SEPTEMBER 30, 2013 IV. Summary of Prior year Findings. None 9 CITY OF LEWISVILLE, TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2013 Federal and State/ Pass-Through Grantor/ Program Title Federal CFDA Number U.S. ENVIRONMENTAL PROTECTION AGENCY Brownfield Assessment Program/Petroleum Brownfield Assessment Program/Hazardous Materials 66.818 66.818 Federal Expenditures Grant Number BF-96695301-0 BF-96696101-0 $ Total U.S. Environmental Protection Agency 84,306 106,773 191,079 U.S. DEPARTMENT OF HOMELAND SECURITY: Passed Through Governor's Division of Emergency Management HSGP/UASI (2012) HSGP (2010) HSGP//UASI/UASI LETPA (2011) Assistance to Firefighters Grant (2011) 97.008 97.073 97.067 97.044 EMW-2012-SS-00018-S01 2010-SS-T0-0008 EMW-2011-SS-00019 EMW-2011-FO-09099 61,589 20,472 119,345 99,612 Total U.S. Department of Homeland Security 301,018 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: CDBG Program CDBG Program 14.218 14.218 B-10-MC-48-0039 B-11-MC-48-0039 266,006 484,847 Total U.S. Department of Housing and Urban Development 750,853 U. S. DEPARTMENT OF JUSTICE: Passed Through the Office of Justice Programs Edward Byrne Memorial JAG Program 2011 Edward Byrne Memorial JAG Program 2012 Edward Byrne Memorial JAG Program - SOAP Bulletproof Vest Partnership 16.738 16.738 16.738 16.607 2011-H5567-TX-DJ 2012-H1744-TX-DJ DJ-10-A10-24607-02 2013BUBX13067997 16,320 15,029 10,780 13,966 16.588 WF-10-V30-23610-03 57,183 Passed Through the Texas Governor's Office - Criminal Justice Division Family Violence Total U.S. Department of Justice 113,278 U.S. DEPARTMENT OF TRANSPORTATION: Passed Through the Texas Department Of Transportation Step CIOT Step Speed Step IDM Highway Planning and Construction Cluster Texas Department of Transportation - Main Street Texas Department of Transportation - SH-121 Business 20.600 20.600 20.601 2013-LewisvPD-CIOT-00024 2013-LewisvPD-S-1YG-0096 2013-LewisvPD-IDM-00012 5,961 44,080 10,117 20.205 20.205 CSJ: 1311-01-050 CSJ: 0364-03-093 24,728 25,916 Total U.S. Department of Transportation 110,802 Total Federal Financial Assistance $ 10 1,467,030 CITY OF LEWISVILLE, TEXAS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2013 1. BASIS OF PRESENTATION The City accounts for its grants in Special Revenue Funds. Special Revenue Funds are governmental funds which can be used to account for resources restricted to, or designated for, specific purposes by a grantor. Generally, unused balances are returned to the grantor at the close of specified project periods. The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City, and is presented on the modified accrual basis of accounting as described in Note 1 to the basic financial statements for the year ended September 30, 2013. 2. AMOUNTS PASSED THROUGH THE SUBRECIPIENTS Of the federal expenditures presented in the schedule, the City provided federal awards to subrecipients as follows: Program/Cluster Name CDBG Progam CFDA # 14.218 11 $ Amount 189,411 MEMORANDUM TO: Claude King, City Manager FROM: Eric Ferris, Director of Community Development DATE: March 17, 2014 SUBJECT: Consideration of Variance Requests to the Lewisville City Code Section 6-92 (j) Turning Lanes, Section 6-123 (b) Landscape Strip, and Section 2-201 Fees, Related to New Construction for the Lee Walker Government Center, as Requested by Bobbie J. Mitchell, Denton County Commissioner Precinct 3, Located at 190 North Valley Parkway. BACKGROUND Denton County is proposing to construct a new Government Center located on their existing property on Valley Parkway. Two new buildings are proposed for the project. Phase One of the project includes a 40,700 square foot building at the northwest corner of Valley Parkway and Civic Circle. Phase Two of the project consists of a 26,450 square foot building to be constructed on the southwest corner of Valley Parkway and Civic Circle. Phase Two will take place after demolition of the existing building. An Engineering Site Plan has been submitted for Phase One and Two that includes three variances: a) provide modified right turn lanes on Valley Parkway to Civic Circle and Civic Circle to Valley Parkway, b) provide modified landscape strips along Valley Parkway and along Civic Circle, and c) to waive development fees in the amount of $41,863. Denton County representatives have indicated that their intent is to build Phase One on the north side of Civic Circle first and then relocate personnel into that building from the existing buildings on the south side of Civic. Once demolition of the south side buildings begins, Phase Two of the project will go to construction. ANALYSIS The following variances are required for construction of Phase One and Two of the Lee Walker Government Center: Variance A: Provide modified right turn lanes on Valley Parkway to Civic Circle and Civic Circle to Valley Parkway. Staff Comments: The proposed right turn lane from Valley Parkway to Civic Circle is proposed at a total length of 156 feet in length as opposed to 210 feet as outlined in the City Code. Stacking distance for this modified turn lane is 110 feet with a 56 foot transition. A longer transition could not be achieved due to the two requested driveways located north along the site frontage. The proposed right turn lane from Civic Circle to Valley Parkway is approximately 114 feet in length as opposed to 210 feet in length. This turn lane could not be extended due to the location of the main entry into the County site. Subject: Fence Ordinance March 17, 2014 Page 2 of 2 Staff has no major concerns with this request should Council wish to approve this request. Variance B: Provide modified landscape strips along the north side of Valley Parkway and along the south side of Civic Circle. Staff Comments: Ten foot landscape strips are provided along Valley Parkway and Civic Circle as required by City Code except where marked on the variance B exhibit (see attached). A small portion along Civic Circle and at the intersection of Civic and Valley Parkway do not meet the 10 foot width requirement. In addition, a 102 foot segment along Valley Parkway does not meet the 10 width requirement as well. These reductions are mainly due to the requirement for the turn lanes on both streets. Required parking is another reason for the requested variance. Both sites meet requirements for landscaping except for these particular areas. Due to the turn lanes, required parking, and considering that this is a redevelopment site for the County, staff has no major concerns should Council wish to approve this request. Variance C: To waive certain development fees in the amount of $41,863.00. Staff Comments: A summary of required fees that are being requested to be waived are as follows: Building Permit Fees Phase 1 Building Permit Fees Phase 2 Plan Review Fees Phase 1 Plan Review Fees Phase 2 Fire Protection Permits 3.5% Eng. Insp Fees Total Fees: $11,803 $ 6,221 $ 5,116 $ 3,111 $ 2,500 $13,112 $41,863 On June 19, 1995, the City Council waived building permit and engineering inspection fees related to the proposed Denton County Child Protective Services building located at the northwest corner of Valley Parkway and Civic Circle. RECOMMENDATION It is City staff’s recommendation that the City Council approve the variances as set forth in the caption above. Bobbie J. Mitchell DENTON COUNTY COMMISSIONER PRECINCT 3 ESTABLISHED 1846 February 28, 2014 City of Lewisville 151 W. Church St Lewisville, Texas 75057 RE: Denton County Lewisville Government Center/ Lee Walker Government Center We are formally requesting that the building permit fees, plan review fees and inspection fees be waived for Denton County’s upcoming construction project. Denton County is another government entity which shares the same tax base with the City of Lewisville. This facility will better serve the citizens of Lewisville and the surrounding cities by replacing old buildings that are no longer efficient for providing services to the citizens.. As good neighbors, Denton County is making improvements on the City’s property and has not requested funds to do this work. The project budget is very thin and the money saved will go directly into the construction budget. By waiving the fees, we will be able to provide a better product for the citizens of Lewisville. Sincerely, Lee Walker Government Center*190 N. Valley Parkway, Suite 120. Lewisville, TX 75067*Metro 972‐434‐4780 Courthouse‐on‐the‐Square∙ 110 W. Hickory, Denton, TX 76201∙ Fax 972‐434‐4781 emai1: [email protected] MEMORANDUM TO: Claude King, City Manager FROM: Cleve Joiner, Building Official VIA: Eric Ferris, Director of Community Development DATE: March 17, 2014 SUBJECT: Consideration of an Ordinance Amending the Lewisville City Code Chapter 4, Article X Fences, Section 4-453 General Requirements Amending Certain Single Family Residential Fence Configurations. BACKGROUND The City of Lewisville Fence Ordinance, Section 4-453 General Requirements and Restrictions (j) states: No fence shall be constructed in the required front yard building setback area of R, DU, TH, PH, OD or MD zoning districts, except that a decorative fence may be constructed to a height no greater than 3½ feet above the finished lot grade and the solid area of such fence shall not exceed 50 percent of the total. The following amendment is being requested: “Where a single family residence on a corner lot has two front yards as required by city ordinance and the residence is constructed facing one of the two front yards, the second front yard may be fenced in the same manner as any other side yard provided that the adjoining lot does not have a residence that fronts the same setback.” A new fence diagram will accompany the change to demonstrate (attached). ANALYSIS The requirement for fencing within a front yard setback is only allowed if the fence is 3-1/2 feet in height or less and 50% open. Basically, these fences are picket style or chain link. In the case of a corner lot, a majority of lots zoned residential requiring two fronts have existing solid fences six (6) to ten (10) feet in height that were either built prior to the zoning change, issued a permit in error or built without a permit. Since the adoption of the 2012 Property Maintenance Code which has more restriction as to the condition of existing fencing, the Code Enforcement Division has been issuing notices for repair or replacement of aging or poorly maintained fencing. Currently there are seven (7) fence replacement permit applications that have two fronts with one of the (side) front yards fenced in pending the outcome of this ordinance change request. In most cases, those residential properties would no longer have backyards for pets or children. Prior to this request these cases would go before the Zoning Board of Adjustment (ZBOA). It is the opinion of staff that there are going to be a number of these cases in the future due to enforcement efforts and feel that it is not good business to issue notice while at the same time advise the owners an additional application, fee and hearing need to take place before they repair the fences, along with the possibility they may not get approval which will result in the loss of a yard they have been using, all the while knowing that the neighboring property can fence in the entire side yards without penalty or loss of a fenced area. Subject: Fence Ordinance March 17, 2014 Page 2 of 2 As stated in the proposed amendment, “when a house on a corner lot is constructed facing one of two front yards, the second front yard may be fenced in the same manner as any other side yard provided that the adjoining lot does not have a residence that fronts the same setback”. In that case, the two fronts would not be allowed to be built upon with a solid fence. Any variance from that would still go to the ZBOA for determination. RECOMMENDATION It is City staff’s recommendation that the City Council approve the ordinance as set forth in the caption above. q a. Existing fence not in compliance with current ordinance b. Existing fence allowed by proposed ordinance change SCALE: 1''=20' SE N EC AP L Existing fence as allowed by current ordinance LOCATION MAP FOR 1131 SETTLERS WAY SET T LE R SW AY a. Existing fence not in compliance with current ordinance b. Existing fence allowed by proposed ordinance change Existing fence as allowed by current ordinance a. Existing fence not in compliance with current ordinance b. Existing fence allowed by proposed ordinance change Existing fence as allowed by current ordinance GL EN IR CA D AY LW SO R LOCATION MAP FOR 1625 SOLWAY DR NL N q SCALE: 1''=20' a. Existing fence not in compliance with current ordinance b. Existing fence allowed by proposed ordinance change Existing fence as allowed by current ordinance ORDINANCE NO. ______________ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LEWISVILLE, TEXAS, AMENDING THE LEWISVILLE CITY CODE, CHAPTER 4, ARTICLE X, FENCES, SECTION 4-453, GENERAL REQUIREMENTS & RESTRICTIONS, ALLOWING RESIDENTIAL CORNER LOTS WITH TWO FRONTS BY ZONING ORDINANCE TO FENCE IN THE SIDE YARD WITH SOME RESTRICTIONS; PROVIDING FOR A REPEALER; PROVIDING FOR SEVERABILITY; PROVIDING A PENALTY; PROVIDING AN EFFECTIVE DATE; AND DECLARING AN EMERGENCY. WHEREAS, the City Council of the City of Lewisville has determined that for the health, welfare and safety of its citizens certain amendments to the Lewisville City Code, Chapter 4, Article X., Fencing, are necessary; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LEWISVILLE, TEXAS, THAT: SECTION 1. Chapter 4, Article X., Section 4-453 (j) of the Lewisville City Code is hereby amended by deleting the current language in its entirety and in its place inserting the following new language: No fence shall be constructed in the required front yard building setback area of R, DU, TH, PH, OD or MD zoning districts, except that a decorative fence may be constructed to a height no greater than 3½ feet above the finished lot grade and the solid area of such fence shall not exceed 50 percent of the total. Where a single family residence on a corner lot has two front yards as required by city ordinance and the residence is constructed facing one of the two front yards, the second front yard may be fenced in the same manner as any other side yard provided that the adjoining lot does not have a residence that fronts the same setback. SECTION 2. REPEALER. Every ordinance or parts of ordinances found to be in conflict herewith are hereby repealed. ORDINANCE NO. ______________ Page 2 SECTION 3. SEVERABILITY. If any section, sentence, clause, or phrase of this ordinance shall for any reason be held to be invalid, such decision shall not affect the validity of the remaining sections, sentences, clauses, or phrases of this ordinance, but they shall remain in effect. SECTION 4. PENALTY. Any person, firm or corporation who violates any provisions of this Ordinance shall be deemed guilty of a misdemeanor and, upon conviction thereof in the Municipal Court, shall be subject to a fine of not more than $500.00 for each offense, and each and every day such offense is continued shall constitute a new and separate offense. SECTION 5. EFFECTIVE DATE. This Ordinance shall take effect and be in full force and effect from and after the date of its passage and publication as required by law. SECTION 6. EMERGENCY. It being for the public welfare that this Ordinance be passed creates an emergency and public necessity and the rule requiring this Ordinance be read on three separate occasions be, and the same is hereby, waived and this Ordinance shall be in full force and effect from and after its passage and approval and publication, as the law in such cases provides. DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF LEWISVILLE, TEXAS, BY A VOTE OF _____ TO _____, ON THIS THE 17TH DAY OF MARCH, 2014. ORDINANCE NO. ______________ Page 3 APPROVED: ____________________________________ Dean Ueckert, MAYOR ATTEST: __________________________________________ Julie Heinze, CITY SECRETARY APPROVED AS TO FORM: __________________________________________ Liz Plaster, CITY ATTORNEY MEMORANDUM TO: Claude King, City Manager FROM: Nika Reinecke, Economic Development Director DATE: March 17, 2014 SUBJECT: Consideration of an Ordinance Approving a Finance Plan for the Tax Increment Reinvestment Zone Number One (TIRZ #1) Repealing the Previously Approved Finance Plan. BACKGROUND AND ANALYSIS Council adopted Ordinance 3441-05-2007 adopting the Finance Plan for the TIRZ #1 in May of 2007. Staff has discovered some discrepancies which need to be corrected. In our review, we had noticed a scrivener's error and thus relabeled the heading and renumbered. Changes made were non-substantive but made the document clearer and easier to read. The TIRZ #1 Board recommended approval of the changes at their meeting on March 6, 2014. RECOMMENDATION It is City staff’s recommendation that the City Council approve the amended ordinance as set forth in the caption above. LEWISVILLE TAX INCREMENT REINVESTMENT ZONE, NUMBER ONE MINUTES March 6, 2014 1. Call To Order And Announce That A Quorum Present. The Lewisville Tax Increment Reinvestment Zone, Number One meeting was called to order by Kellie Stokes at 5:35 PM with the following members present: Amanda Ferguson Bill Peck Steve Kuzmich Kellie Stokes Tamela Bowie Absent: Scott Strange, Donna Kearns Staff members: Nika Reinecke 1. Consideration of an Amendment to the Project Plan and Financing Plan for Tax Increment Reinvestment Zone, Number One. Staff reviewed the proposed changes to the Project Plan and Finance Plan and answered questions from the Board. The current and future projects for the Zone that would increase property value in the Zone were discussed. Steve Kuzmich moved and Tamela Bowie seconded that the amendments to the Project Plan and Finance Plan for Tax Increment Reinvestment Zone, Number One be approved. The motion passed 5-0. 2. Adjournment. Respectfully submitted, Approved, ______________________________ Nika Reinecke Director of Economic Development & Planning ______________________________ Kellie Stokes Chairperson Page 1 of 1 Tax Increment Reinvestment Zone Number One City of Lewisville, Texas Second Amendment Finance Plan As set forth in Section 311.011 in the Tax Increment Financing Act of the Tax Code, the Finance Plan for the Tax Increment Reinvestment Zone, Number One, City of Lewisville, Texas must include the following elements: 1. A detailed list describing the estimated project costs of the zone, including administrative expenses; and a statement listing the kind, number and location of all proposed public works or public improvements in the zone. The City will construct or cause to be constructed the public improvements necessary to develop the property in the Zone which constitute Project Costs, as defined in the Act. The City will finance the Project Costs through either the issuance of bonds secured by the tax increment generated by the City and the County, each at their respective participation level and/or by utilizing a pay-asyou-go method. Project Costs to be reimbursed consist of costs associated with the design and construction of the public improvements necessary for the development of the Project, as described below: a. Capital Costs The proposed public improvements in the zone fall into seven general categories: streetscaping, sidewalk improvements, signage, parking facilities and beautification, facilities and administration. However, all eligible expenditures as allowed in the Act shall be permissible. Streetscaping Landscaping Brick paver crosswalks Decorative Street Lighting $3,000,000 Signage Implementation Program $400,000 of Wayfinding Sidewalk Improvements Various Locations $1,000,000 Beautification Various Locations $3,000,000 Parking Lots Various Locations $2,000,000 2. Facilities Arts Recreation Facility $8,000,000 Administrative Costs $2,000,000 TOTAL PUBLIC IMPROVEMENTS $19,400,000 b. Design, Architectural, and Engineering Fees Professional services rendered for design and engineering of public improvements, including inspecting/testing of soils and construction materials and overseeing construction operations, architectural services for public facilities and design services for public art. Additionally, certain studies, including an economic feasibility study, may be prepared. c. Professional Services - Zone Administration Services such as land planning, accounting, legal, engineering, feasibility analysis, and other related services associated with the administration of the Zone. d. Zone Administration - Over Life of Zone Services involved with the ongoing administration of the Zone including, but not limited to, such services as accountants and bookkeepers, engineers, legal counsel, planners or other administrative services deemed necessary by the Board to implement this Plan. An economic feasibility study and finding. The current commercial property values in the TIRZ area had seen little positive change prior to the creation of the Zone in 2001. Many areas within the Zone have seen a decrease in improvement values and an increase in land values demonstrating a need to begin revitalization efforts to stabilize the area. With the recent activities taking place west of IH35E and on the S.H. 121 corridor, it is unlikely that this trend will change through the efforts of the private sector alone. The proposed infrastructure improvements will not only enhance the area, both aesthetically and financially, but will also serve as a catalyst for the private sector to capitalize on these efforts. This is being demonstrated by the increased development activity around the Medical Center of Lewisville due to the reconstruction of F.M. 1171 through the heart of the TIRZ. The resultant redevelopment, mixed with potential new development, will serve to increase the assessed property values, which, in turn, creates additional revenue for the taxing entities involved. The spin-off into the adjacent areas of Old Town will also be a benefit to the City and the taxing entities as well. 3. The estimated amount of bonded indebtedness to be incurred. It is expected that Tax Increment Bonds will be sold to finance the public improvements not initially exceeding ($10,000,000) and will be solely payable from the Tax Increment Fund in an amount not to exceed the total cost of implementing the project plan for the reinvestment zone as outlined in Section 311.015 of the Tax Code. 4. The time when related costs or monetary obligations are to be incurred. It is anticipated that initial bonds will be sold in 2007. The repayment term on the bonds to be issued is estimated at twenty (20) years, or until 2027. Debt service and cash flow projections, will be performed prior to issuance of any bonds which may be sold in several series. 5. A description of the methods of financing all estimated project costs and the expected sources of revenue to finance or pay project costs, including the percentage of tax increment to be derived from the property taxes of each taxing unit on real property in the zone. The Tax Increment Bonds issued by the City will be secured by ad valorem taxes collected by the City and the County on the incremental increase in the assessed value of real property located within the Zone. The City of Lewisville will participate in the Zone at a participation level of one-hundred percent (100%) of their total increment collection for the life of the Zone and the County will participate in the Zone at the participation levels shown below: Years 2002-2005 2006-2010 2011-2015 2016-2020 2021 – expiration of term Percentage 100% 90% 85% 80% 75% The City has established a Tax Increment Fund (the "Fund") for the Zone in the ordinance designating the Zone. In accordance with Section 311.013 of the Act, each participating taxing jurisdiction will pay into the Fund the amount of increment generated by the taxing jurisdiction. The tax increment deposited into the Fund will be used to pay debt service on the Tax Increment Revenue Bonds which financed the construction of infrastructure of approved Project Costs along with maintaining, operating and administering the Zone. Additionally, grants and other forms of external sources (private and public) will be pursued to offset some of the infrastructure costs. 6. The current total appraised value of taxable real property in the zone. The Plan will be implemented in part through the Zone's ability to capture and utilize incremental ad valorem tax revenue generated from real property in the Zone, known as the captured appraised value. For the year in which the Zone was created, 2001, the total appraised ad valorem value of property within the Zone was $69,240,597 according to the Denton County Appraisal District. These values are referred to as the Base Year Value for the respective jurisdictions. As the redevelopment process takes place in phases over many years, the projected captured appraised value will increase as development continues. 7. The estimated captured appraised value of the zone during each year of its existence. The estimated appraised value of the improvements in the zone per year is listed below. The value of the zone calculates no new projects and a conservative annual growth in the appraised value of 3%. Tax years 2001 through 2006 are actual numbers, and 2007 through 2028 are estimates. Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 TIRZ Value $ 69,240,597 $ 74,488,561 $ 100,328,196 $ 104,538,043 $ 108,586,756 $ 134,616,906 $ 137,538,577 $ 140,777,399 $ 143,748,292 $ 147,068,481 $ 151,141,086 $ 171,967,826 $ 177,126,861 $ 182,440,667 $ 187,913,887 $ 193,551,303 $ 199,357,842 $ 205,338,578 $ 211,498,735 $ 217,843,697 $ 224,379,008 $ 231,110,378 $ 238,043,690 $ 245,185,000 $ 252,540,550 $ 260,116,767 $ 267,920,270 $ 275,957,878 TIRZ Captured Value $ $ 5,247,964 $ 31,087,599 $ 35,297,446 $ 39,346,159 $ 65,376,309 $ 68,297,980 $ 71,536,802 $ 74,507,695 $ 77,827,884 $ 81,900,489 $ 102,727,229 $ 107,886,264 $ 113,200,070 $ 118,673,290 $ 124,310,706 $ 130,117,245 $ 136,097,981 $ 142,258,138 $ 148,603,100 $ 155,138,411 $ 161,869,781 $ 168,803,093 $ 175,944,403 $ 183,299,953 $ 190,876,170 $ 198,679,673 $ 206,717,281 Total Increment Total Contribution $ 36,708 $ 217,954 $ 250,075 $ 278,009 $ 436,213 $ 457,502 $ 480,479 $ 502,477 $ 526,323 $ 543,881 $ 671,756 $ 705,492 $ 740,240 $ 776,031 $ 798,480 $ 835,777 $ 874,193 $ 913,761 $ 954,516 $ 978,504 $ 1,020,961 $ 1,064,692 $ 1,109,734 $ 1,156,128 $ 1,203,913 $ 1,253,132 $ 1,303,828 $20,090,757 8. The duration of the zone. The Zone became effective on December 10, 2001 and shall remain in effect until (i) December 31, 2028, or (ii) December 31 the year immediately following any outstanding encumbrances of the Tax Increment Fund have been paid in full, whichever is later. In no event will Denton County be liable for payment of ad valorem tax collections on the captured appraised value of real property in the Reinvestment Zone after December 31, 2030. ORDINANCE NO. ________ __ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LEWISVILLE, TEXAS APPROVING A FINANCE PLAN OF THE TAX INCREMENT REINVESTMENT ZONE NUMBER ONE, LEWISVILLE, TEXAS; REPEALING PREVIOUSLY APPROVED FINANCE PLAN; PROVIDING A REPEALER; PROVIDING FOR SEVERABILITY; PROVIDING AN EFFECTIVE DATE; AND DECLARING AN EMERGENCY WHEREAS, the City Council of the City of Lewisville, Texas (the “City”), on December 17, 2001 created the Tax Increment Reinvestment Zone Number One to promote the development of a certain contiguous geographic area within its jurisdiction, as authorized by the Tax Increment Financing Act, Chapter 311 of the Texas Tax Code (the “Act”); and WHEREAS, on May 7, 2007, the City Council adopted the First Amended Reinvestment Zone Finance Plan in accordance with the Act; and WHEREAS, on March 6, 2014, the Board of Directors for Tax Increment Reinvestment Zone, Number One, met in regular session and approved and adopted the Second Amended Reinvestment Zone Finance Plan in accordance with the Act. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LEWISVILLE, TEXAS: SECTION 1. The facts and recitations contained in the findings of this ordinance are hereby found and declared to be true and correct and incorporated herein. SECTION 2. The Finance Plan as shown on Attachment A of this Ordinance shall be adopted and shall replace any previous Finance Plan adopted by the City. SECTION 3. REPEALER. Every ordinance or parts of ordinances found to be in conflict herewith are here by repealed. ORDINANCE NO. ______________ Page 2 SECTION 4. SEVERABILITY. If any section, sentence, clause, or phrase of this ordinance shall for any reason be held to be invalid, such decision shall not affect the validity of the remaining sections, sentences, clauses, or phrases of this ordinance, but they shall remain in effect. SECTION 5. EFFECTIVE DATE. This Ordinance shall take effect and be in full force and effect from and after the date of its passage and publication as required by law. SECTION 6. EMERGENCY. It being for the public welfare that this Ordinance be passed creates an emergency and public necessity and the rule requiring this Ordinance be read on three separate occasions be, and the same is hereby, waived and this Ordinance shall be in full force and effect from and after its passage and approval and publication, as the law in such cases provides. DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF LEWISVILLE, TEXAS, BY A VOTE OF _____ TO _____, ON THIS THE 17th DAY OF MARCH, 2014. APPROVED: ___________________________________ Dean Ueckert, MAYOR ORDINANCE NO. ______________ ATTEST: ____________________________ Julie Heinze, CITY SECRETARY APPROVED AS TO FORM: _____________________________ Lizbeth Plaster, CITY ATTORNEY Page 3 ORDINANCE NO. ______________ Exhibit A Second Amended Finance Plan Page 4 Tax Increment Reinvestment Zone Number One City of Lewisville, Texas Second Amendment Finance Plan As set forth in Section 311.011 in the Tax Increment Financing Act of the Tax Code, the Finance Plan for the Tax Increment Reinvestment Zone, Number One, City of Lewisville, Texas must include the following elements: 1. A detailed list describing the estimated project costs of the zone, including administrative expenses; and a statement listing the kind, number and location of all proposed public works or public improvements in the zone. The City will construct or cause to be constructed the public improvements necessary to develop the property in the Zone which constitute Project Costs, as defined in the Act. The City will finance the Project Costs through either the issuance of bonds secured by the tax increment generated by the City and the County, each at their respective participation level and/or by utilizing a pay-asyou-go method. Project Costs to be reimbursed consist of costs associated with the design and construction of the public improvements necessary for the development of the Project, as described below: a. Capital Costs The proposed public improvements in the zone fall into seven general categories: streetscaping, sidewalk improvements, signage, parking facilities and beautification, facilities and administration. However, all eligible expenditures as allowed in the Act shall be permissible. Streetscaping Landscaping Brick paver crosswalks Decorative Street Lighting $3,000,000 Signage Implementation Program $400,000 of Wayfinding Sidewalk Improvements Various Locations $1,000,000 Beautification Various Locations $3,000,000 Parking Lots Various Locations $2,000,000 2. Facilities Arts Recreation Facility $8,000,000 Administrative Costs $2,000,000 TOTAL PUBLIC IMPROVEMENTS $19,400,000 b. Design, Architectural, and Engineering Fees Professional services rendered for design and engineering of public improvements, including inspecting/testing of soils and construction materials and overseeing construction operations, architectural services for public facilities and design services for public art. Additionally, certain studies, including an economic feasibility study, may be prepared. c. Professional Services - Zone Administration Services such as land planning, accounting, legal, engineering, feasibility analysis, and other related services associated with the administration of the Zone. d. Zone Administration - Over Life of Zone Services involved with the ongoing administration of the Zone including, but not limited to, such services as accountants and bookkeepers, engineers, legal counsel, planners or other administrative services deemed necessary by the Board to implement this Plan. An economic feasibility study and finding. The current commercial property values in the TIRZ area had seen little positive change prior to the creation of the Zone in 2001. Many areas within the Zone have seen a decrease in improvement values and an increase in land values demonstrating a need to begin revitalization efforts to stabilize the area. With the recent activities taking place west of IH35E and on the S.H. 121 corridor, it is unlikely that this trend will change through the efforts of the private sector alone. The proposed infrastructure improvements will not only enhance the area, both aesthetically and financially, but will also serve as a catalyst for the private sector to capitalize on these efforts. This is being demonstrated by the increased development activity around the Medical Center of Lewisville due to the reconstruction of F.M. 1171 through the heart of the TIRZ. The resultant redevelopment, mixed with potential new development, will serve to increase the assessed property values, which, in turn, creates additional revenue for the taxing entities involved. The spin-off into the adjacent areas of Old Town will also be a benefit to the City and the taxing entities as well. 3. The estimated amount of bonded indebtedness to be incurred. It is expected that Tax Increment Bonds will be sold to finance the public improvements not initially exceeding ($10,000,000) and will be solely payable from the Tax Increment Fund in an amount not to exceed the total cost of implementing the project plan for the reinvestment zone as outlined in Section 311.015 of the Tax Code. 4. The time when related costs or monetary obligations are to be incurred. It is anticipated that initial bonds will be sold in 2007. The repayment term on the bonds to be issued is estimated at twenty (20) years, or until 2027. Debt service and cash flow projections, will be performed prior to issuance of any bonds which may be sold in several series. 5. A description of the methods of financing all estimated project costs and the expected sources of revenue to finance or pay project costs, including the percentage of tax increment to be derived from the property taxes of each taxing unit on real property in the zone. The Tax Increment Bonds issued by the City will be secured by ad valorem taxes collected by the City and the County on the incremental increase in the assessed value of real property located within the Zone. The City of Lewisville will participate in the Zone at a participation level of one-hundred percent (100%) of their total increment collection for the life of the Zone and the County will participate in the Zone at the participation levels shown below: Years 2002-2005 2006-2010 2011-2015 2016-2020 2021 – expiration of term Percentage 100% 90% 85% 80% 75% The City has established a Tax Increment Fund (the "Fund") for the Zone in the ordinance designating the Zone. In accordance with Section 311.013 of the Act, each participating taxing jurisdiction will pay into the Fund the amount of increment generated by the taxing jurisdiction. The tax increment deposited into the Fund will be used to pay debt service on the Tax Increment Revenue Bonds which financed the construction of infrastructure of approved Project Costs along with maintaining, operating and administering the Zone. Additionally, grants and other forms of external sources (private and public) will be pursued to offset some of the infrastructure costs. 6. The current total appraised value of taxable real property in the zone. The Plan will be implemented in part through the Zone's ability to capture and utilize incremental ad valorem tax revenue generated from real property in the Zone, known as the captured appraised value. For the year in which the Zone was created, 2001, the total appraised ad valorem value of property within the Zone was $69,240,597 according to the Denton County Appraisal District. These values are referred to as the Base Year Value for the respective jurisdictions. As the redevelopment process takes place in phases over many years, the projected captured appraised value will increase as development continues. 7. The estimated captured appraised value of the zone during each year of its existence. The estimated appraised value of the improvements in the zone per year is listed below. The value of the zone calculates no new projects and a conservative annual growth in the appraised value of 3%. Tax years 2001 through 2006 are actual numbers, and 2007 through 2028 are estimates. Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 TIRZ Value $ 69,240,597 $ 74,488,561 $ 100,328,196 $ 104,538,043 $ 108,586,756 $ 134,616,906 $ 137,538,577 $ 140,777,399 $ 143,748,292 $ 147,068,481 $ 151,141,086 $ 171,967,826 $ 177,126,861 $ 182,440,667 $ 187,913,887 $ 193,551,303 $ 199,357,842 $ 205,338,578 $ 211,498,735 $ 217,843,697 $ 224,379,008 $ 231,110,378 $ 238,043,690 $ 245,185,000 $ 252,540,550 $ 260,116,767 $ 267,920,270 $ 275,957,878 TIRZ Captured Value $ $ 5,247,964 $ 31,087,599 $ 35,297,446 $ 39,346,159 $ 65,376,309 $ 68,297,980 $ 71,536,802 $ 74,507,695 $ 77,827,884 $ 81,900,489 $ 102,727,229 $ 107,886,264 $ 113,200,070 $ 118,673,290 $ 124,310,706 $ 130,117,245 $ 136,097,981 $ 142,258,138 $ 148,603,100 $ 155,138,411 $ 161,869,781 $ 168,803,093 $ 175,944,403 $ 183,299,953 $ 190,876,170 $ 198,679,673 $ 206,717,281 Total Increment Total Contribution $ 36,708 $ 217,954 $ 250,075 $ 278,009 $ 436,213 $ 457,502 $ 480,479 $ 502,477 $ 526,323 $ 543,881 $ 671,756 $ 705,492 $ 740,240 $ 776,031 $ 798,480 $ 835,777 $ 874,193 $ 913,761 $ 954,516 $ 978,504 $ 1,020,961 $ 1,064,692 $ 1,109,734 $ 1,156,128 $ 1,203,913 $ 1,253,132 $ 1,303,828 $20,090,757 8. The duration of the zone. The Zone became effective on December 10, 2001 and shall remain in effect until (i) December 31, 2028, or (ii) December 31 the year immediately following any outstanding encumbrances of the Tax Increment Fund have been paid in full, whichever is later. In no event will Denton County be liable for payment of ad valorem tax collections on the captured appraised value of real property in the Reinvestment Zone after December 31, 2030. MEMORANDUM TO: Claude King, City Manager FROM: Nika Reinecke, Economic Development Director DATE: March 17, 2014 SUBJECT: Consideration of an Ordinance Approving a Project Plan for the Tax Increment Reinvestment Zone Number One (TIRZ #1) Repealing the Previously Approved Project Plan. BACKGROUND AND ANALYSIS Council adopted Ordinance 3442-05-2007 adopting the Project Plan for the TIRZ #1 in May of 2007. In light of projects proposed in the TIRZ #1 District, Staff has reviewed the Project Plan and is recommending a few clean up items and to clarify the language for allowable projects in accordance with the state statute. An example would be adding a goal for sale of a city owned property for a project in the TIRZ in order to attract new private investment to the district. The following is a summary of changes proposed: Project Plan: Added general goals; Deleted the current non-project costs because they were listed as project costs in the Finance Plan. This fixes that conflict; Added new non-project costs because a list and estimate of the non-project costs is something that is required by statute; Added project costs to the project plan (which is required by statute) by listing the project costs in the Financing Plan. This allows us to amend the finance plan in the future without having to also amend the project plan, thus streamlining future amendments; Reorganized the document to improve readability. The TIRZ #1 Board recommended approval of the changes at their meeting on March 6, 2014. Denton County will be notified of these changes to the plan. RECOMMENDATION It is City staff’s recommendation that the City Council approve the amended ordinance as set forth in the caption above. LEWISVILLE TAX INCREMENT REINVESTMENT ZONE, NUMBER ONE MINUTES March 6, 2014 1. Call To Order And Announce That A Quorum Present. The Lewisville Tax Increment Reinvestment Zone, Number One meeting was called to order by Kellie Stokes at 5:35 PM with the following members present: Amanda Ferguson Bill Peck Steve Kuzmich Kellie Stokes Tamela Bowie Absent: Scott Strange, Donna Kearns Staff members: Nika Reinecke 1. Consideration of an Amendment to the Project Plan and Financing Plan for Tax Increment Reinvestment Zone, Number One. Staff reviewed the proposed changes to the Project Plan and Finance Plan and answered questions from the Board. The current and future projects for the Zone that would increase property value in the Zone were discussed. Steve Kuzmich moved and Tamela Bowie seconded that the amendments to the Project Plan and Finance Plan for Tax Increment Reinvestment Zone, Number One be approved. The motion passed 5-0. 2. Adjournment. Respectfully submitted, Approved, ______________________________ Nika Reinecke Director of Economic Development & Planning ______________________________ Kellie Stokes Chairperson Page 1 of 1 ORDINANCE NO. ________ __ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LEWISVILLE, TEXAS APPROVING A PROJECT PLAN OF THE TAX INCREMENT REINVESTMENT ZONE NUBMER ONE, LEWISVILLE, TEXAS; REPEALING PREVIOUSLY APPROVED PROJECT PLAN; PROVIDING A REPEALER; PROVIDING FOR SEVERABILTY; PROVIDING AN EFFECTIVE DATE; AND DECLARING AN EMERGENCY. WHEREAS, the City Council of the City of Lewisville, Texas (the “City”), on December 17, 2001, created the Tax Increment Reinvestment Zone Number One to promote the development of a certain contiguous geographic area within its jurisdiction, as authorized by the Tax Increment Financing act, Chapter 311 of the Texas Tax Code (the “Act”); and WHEREAS, on May 7, 2007, the City Council met in regular session and adopted the First Amended Reinvestment Zone Project Plan in accordance with the Act; and WHEREAS, on March 6, 2014, the Board of Directors for the Tax Increment Reinvestment Zone, Number One, met in regular session and approved and adopted a Second Amendment to the Reinvestment Zone Project Plan in accordance with the Act. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LEWISVILLE, TEXAS: SECTION 1. The facts and recitations contained in the findings of this ordinance are hereby found and declared to be true and correct and incorporated herein. SECTION 2. The Project Plan as shown on Attachment A of this Ordinance shall be adopted and shall replace any previous Project Plan adopted by the City. SECTION 3. REPEALER. Every ordinance or parts of ordinances found to be in conflict herewith are here by repealed. SECTION 4. SEVERABILITY. If any section, sentence, clause, or phrase of this ordinance shall for any reason be held to be invalid, such decision shall not affect the validity of ORDINANCE NO. ______________ Page 2 the remaining sections, sentences, clauses, or phrases of this ordinance, but they shall remain in effect. SECTION 5. EFFECTIVE DATE. This Ordinance shall take effect and be in full force and effect from and after the date of its passage and publication as required by law. SECTION 6. EMERGENCY. It being for the public welfare that this Ordinance be passed creates an emergency and public necessity and the rule requiring this Ordinance be read on three separate occasions be, and the same is hereby, waived and this Ordinance shall be in full force and effect from and after its passage and approval and publication, as the law in such cases provides. DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF LEWISVILLE, TEXAS, BY A VOTE OF _____ TO _____, ON THIS THE 17th DAY OF MARCH, 2014. APPROVED: ___________________________________ Dean Ueckert, MAYOR ATTEST: ____________________________ Julie Heinze, CITY SECRETARY APPROVED AS TO FORM: _____________________________ Lizbeth Plaster, CITY ATTORNEY ORDINANCE NO. ______________ Exhibit A Second Amended Project Plan Page 3 Tax Increment Reinvestment Zone Number One City of Lewisville, Texas Second Amendment Project Plan Tax Increment Financing provides an opportunity to increase the tax base of a defined area by generating funding for needed infrastructure and further generating new development. This Project Plan is adopted and amended pursuant to and in accordance with Section 311.011 of the Tax Increment Financing Act of the Texas Tax Code. 1. Map and Boundaries. The City has designated approximately 215 acres as Reinvestment Zone Number One, City of Lewisville, Texas (the “Zone”), which is more specifically described and depicted in Attachment A. 2. Background and Description of Zone. Prior to the creation of the Zone, a majority of the land within the area impairs the sound growth of the City in its present condition because of the presence of a substantial number of deteriorated or deteriorating structures and the predominance of defective or inadequate sidewalks and street layout. The overall intention of the Zone is to revitalize the area within the Zone; to make public improvements that will attract and support the development/redevelopment of new residential and commercial uses, entertainment venues, and other similarly compatible uses within the Zone; to develop additional business, commercial, and tourist activity in the Zone, to promote the renovation of aging structures and the development of undeveloped parcels of land; and to create parks, open space, and trails to provide accessibility between uses throughout the Zone. 3. Existing Uses. Existing Uses are listed in Attachment B. 4. Project Costs. Project Costs shall be those defined and listed out in the Finance Plan for the Zone, as amended. Those Project Costs detailed in the Finance Plan for the Zone are hereby incorporated into this Project Plan as if fully written out verbatim. Project Costs shall also include any other capital improvements, infrastructure development, and other eligible project costs as allowed under Section 311.002 of the Texas Tax Code. 5. Non-Project Costs. Non-Project Costs are those not reimbursed or funded by the TIRZ. A list of the estimated non-project costs are provided below: Old Town Park Plaza construction and design funded by City’s general fund City Funded $4,000,000 Portions of Main/Mill Streetscape Improvements funded by City’s general fund and grant funding City Funded $3,750,000 Old Town TOD Plan funded by City’s general fund City Funded $250,000 Portions of Main Street Streetscape Improvements funded by City’s general fund City Funded $1,200,000 Uptown Village Residential at Kealy Street Developer Funded $15,698,000 Main Street Village Residential at Main Street Developer Funded $18,000,000 Restaurant Project at Church Street Developer Funded Developer Funded $2,500,000 Mixed Use Project at Mill Street $30,000,000 6. Development Goals and Objectives. The following development goals meet the specific needs of the Zone: ○ Create additional taxable value attributed to new private investment in projects in the Zone. ○ Attract new private development in the Zone including increased retail space, office space, restaurant space, and new residential units including lofts, condos, and townhomes. ○ Increase the connectivity and improve access to the DCTA rail system adjacent to the Zone. ○ Support the conversion of the portions of the Zone to a mixed-use neighborhood that complements the adjacent Medical Center, the adjacent DCTA rail system, and still promotes the harmonious adjacency of institutional, residential, and commercial uses found in the Zone. ○ Increase recreational opportunities and improve pedestrian connections within the Zone. ○ Diversify the retail and commercial uses in the Zone. ○ Encourage the redevelopment of property, including the possible sale of cityowned property located in the Zone and possible abandonment of right-of-way to create more developable sites. ○ Improve the pedestrian environment through landscaping, lighting, and design standards. sidewalk improvements, ○ Encourage development of new residential and retail uses to complement the Zone. ○ Upgrade basic infrastructure including storm drainage, water/wastewater lines, and burial of overhead utilities to support redevelopment in the Zone. ○ Rehabilitate and mitigate aging and deteriorating structures within the Zone. 7. Zoning Ordinances. There are currently no proposed changes to the zoning ordinances, the master plan, the building codes, or any other municipal ordinances relating to the zone that would affect the anticipating implementation of this Project Plan by the Board. 8. Relocation of Persons. There are no relocations anticipated or expected within the proposed Zone as the result of the projects within the Zone. Attachment A Boundaries of the TIRZ Attachment B Existing uses Single-Family Residential Restaurant Multi-Family Residential Retail Medical Industrial Office Institutional Automotive Vacant Existing Land Use MEMORANDUM TO: Claude King, City Manager FROM: Nika Reinecke, Director of Economic Development & Planning DATE: March 17, 2014 SUBJECT: Consideration of an Economic Development Agreement by and Between the City of Lewisville and Old Town Development Lewisville, LLC; Approval of a Supplemental Appropriation in the Amount of $500,000 From General Fund Reserves; and Authorization for the City Manager to Execute the Contract. BACKGROUND Old Town Development Lewisville, LLC, has submitted a proposal to develop the 1.76 acre City owned property at the N.W. corner of Charles and Church Streets. The proposal calls for the construction of three high quality restaurants and associated improvements that represent the peak of market demand for destination dining. The development will incorporate local architectural features to give the development a historic feel that represents the unique aesthetics of Old Town Lewisville. Old Town Development will invest approximately two-million, five hundred thousand dollars ($2,500,000) to develop the restaurant sites and will reimburse the City for the value of land through sales and property tax payments. Cash payments will be required beginning the 6th year if the value of the land has not been reimbursed. The proposed agreement is for 15 years and includes a rebate of sales and property tax, as well as reimbursement for building permit fees. Also as part of the agreement, the City will provide a start-up grant in an amount not to exceed $500,000. Therefore, a supplemental appropriation in that amount is now being requested. This does not include funding for utility relocations. Staff is still working on costs associated with overhead and underground utility relocations options and will hopefully have the costs available at the meeting. Attached is a summary of the economic incentives included in the agreement. RECOMMENDATION It is City staff’s recommendation that the City Council consider the agreement and supplemental appropriation as set forth in the caption above. Old Town Development Lewisville, LLC Summary of Economic Incentives FOUR INCENTIVES: 1. Land Sale a. Purchase price of $860,000 which will be reduced by offsets (credits) in amounts equal to 100% of the 1.5% Sales and Use taxes and Property taxes for 5 years after the issuance of the first certificate of occupancy. b. Beginning the 6th year after the issuance of the first certificate of occupancy, the Developer will pay $60,000 per year for 15 years or until the purchase price is paid. c. The purchase price is secured by a deed of trust and promissory note in the amount of $860,000. d. The use of the property for restaurants only is protected by a deed restriction which expires 15 years after the issuance of the first certificate of occupancy. 2. Start-Up Grant a. Not to exceed $500,000 b. Used for permit fees, parking lot construction and other public infrastructure 3. Tax Revenue Grant a. Beginning the 6th year after the issuance of the first certificate of occupancy, the Developer will receive an amount equal to 40% of the 1% Sales and Use tax and Property tax. The City will keep the other 60%. b. Once the City has recouped $500,000 (the amount of the Start-Up Grant) from its 60% split AND the purchase price of the property has been paid, the Developer will receive an amount equal to 60% of the 1% of the Sales and Use tax and Property tax. The City will keep the other 40%. This split will continue until the remainder of the term of the agreement or December 31, 2030, whichever occurs first. 4. Relocation of Utility Lines a. The City will use “every effort” to relocate the utilities underground. b. If the utilities are not relocated underground, the City, at our cost, shall relocate the utilities, overhead, to the rear of the property. c. The Developer will provide all necessary easements for either relocation. ECONOMIC DEVELOPMENT AGREEMENT THIS ECONOMIC DEVELOPMENT AGREEMENT (“Agreement”) is entered into by and between the City of Lewisville, Texas, a home rule municipality duly acting by and through its City Manager, (hereinafter called “City”), and Old Town Development Lewisville, LLC, a Texas limited liability company (hereinafter called “the Developer”), and both entities collectively referred to as Parties in this Agreement (“Parties”). W I T N E S S E T H: WHEREAS, pursuant to Chapter 380 of the Texas Local Government Code (hereinafter referred to as "Statute"), the City adopted an Economic Incentive Policy for making economic development incentives and grants on August 16, 2010 (hereinafter referred to as "the Policy Statement"); and WHEREAS, the Policy Statement constitutes appropriate guidelines and criteria governing economic development agreements to be entered into by the City as contemplated by the Statute; and WHEREAS, in order to maintain and/or enhance the commercial economic and employment base of the Lewisville area to the long-term interest and benefit of the City, in accordance with said Statute, the City desires to enter into this Agreement; and WHEREAS, on the ------ day of --------- 2014, the City Council of the City of Lewisville, Texas, authorized this Agreement pursuant to Chapter 380 of the Texas Local Government Code (“CHAPTER 380”); WHEREAS, the City currently owns property at ---------------------------- Street (“Property” or “Premises”) (more fully described in Attachment “A”, attached hereto and made a part hereof) that is the subject of this Agreement; WHEREAS, the Property is located within Tax Increment Reinvestment Zone Number One; WHEREAS, the Developer intends to purchase and develop the Property that is the subject of this Agreement; WHEREAS, the Parties desire to enter into this Agreement pursuant to Chapter 380; WHEREAS, the City desires to provide, pursuant to Chapter 380, an incentive to the Developer to develop the Property; WHEREAS, the Developer agrees to develop the Property in a manner consistent with an approved development plan as described in Attachment “B”, attached hereto and made a part hereof, or as amended in accordance with all provisions of the City; WHEREAS, the City finds that the administration of an economic development agreement to provide incentives to the Developer, in return for developing the Property would promote local economic development and stimulate business and commercial activity within the municipality and would directly establish a public purpose, and; WHEREAS, the City has determined that the this Agreement contains sufficient controls to ensure that the above-mentioned public purposes are carried out in all transactions involving the use of public funds and resources in the establishment and administration of the Agreement; NOW, THEREFORE, in consideration of the foregoing, and on the terms and conditions hereinafter set forth, the Parties do mutually agree as follows: ARTICLE I TERM 1.1 This Agreement shall be effective on the date that this Agreement is executed by the Parties (“Effective Date”) and shall continue for 15 years from the date of the issuance of certificate of occupancy for the first building on the Property, unless sooner terminated as provided herein. ARTICLE II DEFINITIONS 2.1 Wherever used in this Agreement, the following terms shall have the meanings ascribed to them: “Agreement” has the meaning set forth in the introductory paragraph of this Agreement. “City” has the meaning set forth in the introductory paragraph of this Agreement. “Construction Costs” means the costs of all construction, including but not limited to, hard construction, construction equipment charges, the costs of construction materials and the delivery thereof, contractor fees, surveying and engineering costs and fees, insurance, bonding, marketing, fees for required bonds, or City fees, including but not limited to inspection fees, impact fees and park development fees, related to the development of the Improvements and any parking, landscaping and lighting related to same. “Developer” has the meaning set forth in the introductory paragraph of this Agreement. “Effective Date” means the date established in Article I of this Agreement. ECONOMIC DEVELOPMENT AGREEMENT Page 2 “Force Majeure” shall mean any contingency or cause beyond the reasonable control of Developer, including without limitation, acts of God or the public enemy, war, riot, terrorism, civil commotion, insurrection, governmental or de facto governmental action including, but not limited to, government actions pertaining to the determination of flood zones or FEMA actions (unless caused by acts or omissions of Developer), fire, explosion or flood, and strikes. “Start-Up Grant” shall mean an economic development grant as defined in Article IV. “Offset” means an amount of money equal to the amount of annual Property Tax and Sales and Use Tax generated from the Property and paid to the City which is used to reduce the balance of the Purchase Price of the Property, as more fully set forth in Article IV. “Payments” means monetary payments made to the City by the Developer for the Purchase Price of the Property. “Promissory Note” means that certain Promissory Note from the Developer to the City in the amount of Eight Hundred Sixty Thousand and 00/100 Dollars ($860,000.00) for the purchase of the Property, due and payable in accordance with the terms and conditions set forth therein, and attached hereto as Attachment “C” and made a part hereof. “Property Taxes” means all real property ad valorem taxes payable to the City from the Property. For purposes of calculating the annual Offset or annual Grant amount as provided for herein, the applicable year’s taxes shall be used. “Property Improvement(s)” shall mean three (3) high quality restaurants which are acceptable to the City (such approval not to be unreasonably withheld) including all ancillary improvements such as required parking and landscaping, more fully described in Attachment “B”. “Property” or “Premises” shall mean that property as described in Attachment “A” and described by metes and bounds, lot and block or abstract and survey attached hereto, and made a part hereof, and the improvements located or to be located thereon. “Public Improvements” means the public streets, public infrastructure (including, but not limited to, all lighting and parking infrastructure) and related public facilities to be constructed on or benefiting the Property. “Purchase Price” has the meaning set forth in Article IV of this Agreement. “Sales And Use Tax” means all of the sales and use tax imposed by the City pursuant to Chapter 321 of the Texas Tax Code, as amended on the sale of Taxable Items consummated on the Property. ECONOMIC DEVELOPMENT AGREEMENT Page 3 “1% Sales Tax Receipts” means the 1% Sales and Use Tax annually received from the State of Texas and designated to the City’s general fund from the collection of Sales and Use Tax from the Property as a result of the sale of Taxable Items on the Property. “1.5% Sales Tax Receipts” means the 1.5% Sales and Use Tax annually received from the State of Texas from the collection of Sales and Use Tax from the Property as a result of the sale of Taxable Items on the Property. “Substantial Completion” means with regard to the Public Improvements, the date the City issues a Letter of Acceptance for the Public Improvements. “Tax Certificate” (“Certificate”) means a certificate or other statement in a form reasonably acceptable to the City setting forth the collection of Sales and Use Tax and Property Tax received by the City, for Property Tax and the sale of Taxable Items on the Property consummated on the Property for the applicable period which are to be used to determine the 1% Sales Tax Receipts and 1.5% Sales Tax Receipts, respectively, together with such supporting documentation as the City may reasonably request. “Taxable Items” shall have the same meaning assigned by Chapter 151, TEX. TAX CODE ANN., as amended. ARTICLE III GENERAL PROVISIONS 3.1 As soon as practical after the Effective Date of this Agreement, the Developer shall commence construction of the Property Improvements on the Premises in accordance with the City approved plans and in substantial conformance with Attachment “B”. 3.1.1 The Developer shall submit or cause to be submitted to the City for its review and approval final plans for the design of the Property Improvements in accordance with all City ordinances and regulations. Property Improvements shall include the construction of three (3) high quality restaurants which are acceptable to the City (such approval not be unreasonably withheld) and associated improvements as shown on Attachment “B” and further approved final site plan and construction plans on the Premises. 3.1.2 The total investment on the Property, including any of Developer’s loans on the Property, construction of improvements and public infrastructure, and tenant improvements, or, alternatively, the appraised value of the Property following the improvements described herein, shall be approximately Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000). 3.2 Within twenty-four (24) months after the Effective Date of this Agreement, Developer shall have obtained a certificate of occupancy for two (2) restaurants and, within thirty (30) months after the Effective Date of this Agreement, shall have obtained a certificate of ECONOMIC DEVELOPMENT AGREEMENT Page 4 occupancy for the third restaurant on the Premises. 3.2.1 In the event of Force Majeure or, if in the reasonable opinion of the City, the Developer has made substantial progress toward completion of construction, renovation and installation of the Property Improvements additional time may be granted by the City as may be required. 3.2.2 The date of substantial completion of construction, renovation and installation of the Property Improvements shall be defined as the date that Developer receives a certificate of occupancy for the Property Improvements. ARTICLE IV ECONOMIC DEVELOPMENT INCENTIVES 4.1. Sale of Property. Subject to the terms and conditions of this Agreement, the Developer agrees to purchase the Property from the City at an agreed price of Eight Hundred Sixty Thousand and 00/100 Dollars ($860,000) (the “Purchase Price”). 4.1.1 Annual Offset Amount. The City shall apply an annual offset to the Purchase Price of the Property by crediting an amount equal to the annual collection of 100% of the 1.5% Sales Tax Receipts and Property Tax revenues received by the City from the Premises until the full amount of the Purchase Price is paid or the end of five (5) years from the date of issuance of the first certificate of occupancy for a building on the Premises, whichever is sooner. The Developer shall, within thirty (30) days following the anniversary of the date of the receipt of the first certificate of occupancy for a building on the Premises, submit a Tax Certificate with all supporting documents needed to verify the amount of Sales and Use Taxes and Property Taxes that were paid to the City. 4.1.2 Annual Payment Amount. If after five (5) years from the date of issuance of the first certificate of occupancy for a building on the Premises, the City has not been paid in full for the Purchase Price of the Property, the Developer shall pay the City an annual payment of Sixty Thousand and 00/100 Dollars ($60,000.00) for fifteen (15) years or until the full Purchase Price is paid, whichever is sooner. This payment shall be made annually within thirty (30) days following the anniversary of the date of the receipt of the first certificate of occupancy for a building on the Premises in the year following each applicable year. By way of example only, if the first certificate of occupancy is obtained on July 15, 2015, the first Annual Payment would be due on August 15, 2021. 4.2. Start-Up Grant. Subject to the Parties’ continued satisfaction of the terms and conditions of this Agreement, the City shall offset or reimburse the Developer for certain expenses, as set forth below, up to Five Hundred Thousand and 00/100 Dollars ($500,000) (the “Start-Up Grant”). ECONOMIC DEVELOPMENT AGREEMENT Page 5 4.2.1 The Start-Up Grant is for the purpose of (1) offsetting all building permitrelated costs associated with the Property Improvements including, but not limited to, impact fees, inspection fees, plan review fees and any other fee normally charged by the City for development projects; (2) reimbursing costs for the construction of a public parking lot on the Premises; and (3) reimbursing costs for the construction of any other Public Improvements needed to facilitate the Property Improvements on the Premises. 4.2.2 City shall consolidate all permit-related fees prior to issuance of the first building permit on the Premises and deduct said fees from the Start-Up Grant. Any remaining balance from the Start-Up Grant may be applied to invoices received from Developer on the above-stated construction-related items. Invoices received from the Developer will be reimbursed by the City within 30 days after verification of completed work to the full satisfaction of the City. 4.3 Annual Grant Equal to the Amount of Tax Revenue. 4.3.1 Starting from the 6th year after the date of the first certificate of occupancy of a building on the Premises, the City shall pay Developer an amount equal to forty percent (40%) of the 1% Sales Tax Receipts and the Property Tax revenues received by the City from the Premises. 4.3.2 After the Purchase Price is paid in full and the amount of the Start-Up Grant has been recouped by the City through an amount equal to the City’s share of Property Tax and the 1% Sales Tax Receipts, the City shall pay Developer an amount equal to sixty percent (60%) of the 1% Sales Tax Receipts and the Property Tax revenues received by the City from the Premises for the remainder of the term of this Agreement or December 31, 2030, whichever occurs first. 4.3.3 Developer will be paid the above amounts on an annual basis on or before thirty (30) days following the anniversary of the date of the receipt of the first certificate of occupancy for a building on the Premises, provided that by the anniversary of the date of the receipt of the first certificate of occupancy for a building on the Premises of each year, the Developer submits a Tax Certificate with all supporting documents needed to verify the amount of Sales and Use Taxes and Property Taxes that were paid to the City. 4.4 Relocation of Existing Overhead Franchise Utilities. The City agrees to make every effort to remove the existing overhead utilities located in front of the Property on Church Street and relocate the utilities underground. This will be in conjunction with another public improvement project in the area and is subject to the availability of funds. If the utilities are relocated underground, the City shall be directly responsible for the costs and construction required to bury these utilities in front of the Property. The City agrees to coordinate the burial of such utilities with Developer so that the location of same shall be in accordance with Developer’s approved plans and specifications. 4.4.1 Should the relocation of utilities underground cause any undue delay to ECONOMIC DEVELOPMENT AGREEMENT Page 6 Developer in constructing the Improvements on the Property, the timeframes set forth in this Agreement for the construction of Property Improvements, shall be extended accordingly. 4.4.2 The Developer shall give the City all necessary easements and rights to access to relocate the utilities underground or to the rear of the Premises under 4.4.3 below. 4.4.3 If the City is unable to bury the existing utilities due to funding shortages, the City agrees to, alternatively, coordinate and move the overhead utilities to the rear of the Premises to a specific location agreed to between the City and Developer. ARTICLE V REFUNDS AND ADJUSTMENTS 5.1 In the event the State of Texas determines that the City erroneously received either the 1% Sales Tax Receipts or 1.5% Sales Tax Receipts, or that the amount of Sales and Use Tax paid by the State of Texas to the City exceeds the correct amount of Sales and Use Tax applicable to this Agreement, the Developer shall, within thirty (30) days after receipt of notification thereof from the City specifying the amount by which such amount exceeded the amount to which the Developer was entitled pursuant to such State of Texas determination, pay such amount to the City. As a condition precedent to payment of such refund, the City shall provide Developer with a copy of such determination by the State of Texas. 5.2 In the event the Developer’s vendor files an amended Sales and Use Tax return, or report with the State of Texas, or if additional Sales and Use Tax is due and owing, as determined or approved by the State of Texas, affecting either the 1% Sales Tax Receipts or 1.5% Sales Tax Receipts, the City shall pay to the Developer any underpayment, provided the City has received the respective Sales Tax Receipts attributed to such adjustment. As a condition precedent to payment of such adjustment, the Developer shall provide the City with a copy of any Developer’s vendor amended Sales and Use Tax report or return made available to the Developer, any relevant receipts, or any relevant direct payment and self-assessment returns. 5.3 The provisions of this Section 5.1 shall survive termination of this Agreement. ARTICLE VI AGREEMENT CONDITIONS 6.1 Security. To insure Developer’s obligation for payment pursuant to Article IV, the Developer shall provide to the City a Promissory Note in the amount of Eight Hundred Sixty Thousand and 00/100 Dollars ($860,000). The Promissory Note shall be initially secured by Developer’s grant to the City, at the time of closing of the acquisition of the Premises, of a deed of trust secured by a lien on the Premises. The Promissory Note and deed of trust shall be attached hereto as Attachment “C”. ECONOMIC DEVELOPMENT AGREEMENT Page 7 6.1.1 The City shall be secured by the deed of trust until such a time as the Developer closes on a construction loan to develop the Property. Upon closing of the construction loan, the City will release the lien of the deed of trust but not the Promissory Note. The Developer shall remain liable on the Promissory Note until full payment of $860,000 for purchase of the Property is met by the Developer in accordance with this Agreement. Offsets and payments made in accordance with this Agreement shall be credited against the indebtedness described in said Promissory Note. 6.1.2 Following the closing of a construction loan, if any, the Developer shall secure its obligation for payment on the Promissory Note by providing the City a lien position subordinate only to the construction loan. 6.1.3 Agreement. The provisions of this Section 6.1 shall survive termination of this 6.1.4 Upon full payment (or offset) of the Promissory Note amount, any lien held by the City shall be immediately released in full. 6.2 Minimum Use Condition. During the term of this Agreement following the issuance of a certificate of occupancy for Developer’s occupancy of the Property Improvements on the Premises and continuing thereafter until expiration of this Agreement or earlier termination of same, the Developer agrees to occupy a minimum of 15,000 square feet of indoor/outdoor restaurant space and ancillary facilities. 6.2.1 To insure Developer’s obligation to develop and use the Property as provided in Article III, the deed to the Property shall include a deed restriction, attached hereto as Attachment “D” and made a part hereof. 6.3 Compliance with the Agreement. The Developer must certify annually to the governing body of the City as to its attainment of the stated performance measures described herein by submitting an annual compliance report and appropriate support documentation, no later than January 15th of each year after the issuance of the certificate of occupancy and continuing until the expiration of the Agreement to the City’s Director of Economic Development. ARTICLE VII TERMINATION This Agreement may be terminated upon any one of the following: 1. By written agreement of the parties; 2. Expiration of the Term; 3. By either party in the event the other party breaches any of the terms or conditions of this Agreement and such breach is not cured within sixty (60) days after written notice thereof; ECONOMIC DEVELOPMENT AGREEMENT Page 8 4. By City, if Developer suffers an Event of Bankruptcy; and 5. By City, if any taxes, assessments or payments owed to the City or the State of Texas by Developer shall become delinquent and not cured within sixty (60) days after written notice thereof (provided, however the Developer retains the right to timely and properly protest and contest any such taxes or assessments). In the event the Agreement is terminated by the City pursuant to this Article (3), (4), or (5), the Developer shall be ineligible for further grants pursuant to this Agreement and shall be liable to pay any remaining amounts left on the Purchase Price ($860,000) for the Property within 60 days of notice from the City. ARTICLE VIII MISCELLANEOUS 8.1 The terms and conditions of this Agreement are binding upon the successors and assigns of all parties hereto. This Agreement cannot be assigned by the Developer unless written permission is first granted by the City, which consent shall not be unreasonably withheld, so long as the Developer’s assignee agrees to be bound by all terms and conditions of this Agreement It is understood and agreed between the parties that the Developer, in performing its obligations thereunder, is acting independently, and the City assumes no responsibility or liabilities in connection therewith to third parties; it is further understood and agreed between the parties that the City, in performing its obligations hereunder, is acting independently, and the Developer assumes no responsibilities in connection therewith to third parties. 8.2 The Developer further agrees that the City, its agents and employees, shall have reasonable rights of access to the Premises to inspect the Premises in order to ensure that the construction of the improvements to the Premises is in accordance with all applicable agreements with the City, including this Agreement, and all applicable state and local laws and regulations, as well as the continuing right, subject to Developer’s reasonable security requirements, to inspect the Premises to ensure that the Premises are thereafter maintained, operated, and occupied in accordance with all applicable agreements with the City, provided that with respect to matters concerning this Agreement (i) the City must give the Developer reasonable prior telephone or written notice of any such inspection, and (ii) a representative of the Developer shall have the right to accompany the agent or employee of the City who is conducting such inspection. The City represents and warrants that the Premises does not include any property that is owned by a member of the City Council having responsibility for the approval of this Agreement. 8.3 Notices required to be given to any party to this Agreement shall be given personally or by certified mail, return receipt requested, postage prepaid, addressed to the party at its address as set forth below, and, if given by mail, shall be deemed delivered three (3) days after the date deposited in the United States’ mail: ECONOMIC DEVELOPMENT AGREEMENT Page 9 For City by notice to: City of Lewisville Attn: Economic Development Director 151 W. Church Street P.O. Box 299002 Lewisville, Texas 75057 For Developer by notice to: Old Town Development Lewisville, LLC Attn: Chris Gordon 2241 Veranda Avenue Trophy Club, Texas 76262 With a copy to: Murphy, Mahon Keffler & Farrier, L.L.P. Attn: Chris Baker Tindall Square Building No. 2 505 Pecan Street, Suite 101 Fort Worth, Texas 76102 Any party may change the address to which notices are to be sent by giving the other parties written notice in the manner provided in this paragraph. 8.4 No claim or right arising out of a breach of this Agreement can be discharged in whole or in part by a waiver or renunciation of the claim or right unless the waiver or renunciation is supported by consideration and is in writing signed by the aggrieved. 8.5 This Agreement may be modified or rescinded only by a writing signed by both of the parties or their duly authorized agents. 8.6 Venue for any litigation arising from this Agreement shall lie in Denton County, Texas. 8.7 Developer agrees to defend, indemnify and hold City, its officers, agents and employees, harmless against any and all claims, lawsuits, judgments, costs and expenses for personal injury (including death), property damage or other harm for which recovery of damages is sought, suffered by any person or persons, that may arise out of or be occasioned by Company's breach of this Agreement or by any negligent or strictly liable act or omission of Company, its officers, agents, employees or subcontractors, in the performance of this Agreement. The provisions of this paragraph are solely for the benefit of the parties hereto and not intended to create or grant any rights, contractual or ECONOMIC DEVELOPMENT AGREEMENT Page 10 otherwise, to any other person or entity. This paragraph shall survive the termination of this Agreement. 8.8 This Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which in the aggregate shall constitute one agreement. 8.9 If any provision contained in this Agreement is held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof. In lieu of each invalid, illegal or unenforceable provision, there shall be added a new provision by agreement of the parties as similar in terms to such invalid, illegal or unenforceable provision as may be possible and yet be valid, legal and enforceable. 8.10 Whenever the context requires, all words herein shall be deemed to include the male, female, and neuter gender, singular words shall include the plural, and vice versa. 8.11 This Agreement was authorized by action of the City Council, authorizing the City Manager to execute the Agreement on behalf of the City. CITY OF LEWISVILLE, TEXAS Claude King, City Manager ATTEST: Julie Heinze, City Secretary APPROVED TO FORM: Lizbeth Plaster, City Attorney OLD TOWN DEVELOPMENT LEWISVILLE, LLC a Texas limited liability company By: Name: Title: ECONOMIC DEVELOPMENT AGREEMENT Page 11 Attachment “A” LEGAL DESCRIPTION Being a tract of land out of J. W. King Survey, Abstract No. 696 and situated in the City of Lewisville, Denton County, Texas, and surveyed by Miller Surveying, Inc. of Hurst, Texas in January 2014, said tract being the same tract of land described as “Tract 2” in the deed to City of Lewisville recorded in Volume 4845, Page 26 in the Deed Records of Denton County, Texas and being more particularly described by metes and bounds as follows: Beginning at a TxDOT monument found for the most westerly southwest corner of said Tract 2, said monument being in the easterly right-of-way line of Herod Street; Thence North 00 degrees 04 minutes 16 seconds East with the westerly boundary line of said Tract 2 and with said easterly right-of-way line a distance of 116.96 feet to a 1/2 inch steel rod found for the northwest corner of said Tract 2; Thence North 89 degrees 31 minutes 37 seconds East with the northerly boundary line of said Tract 2 a distance of 347.97 feet to a nail found; Thence South 00 degrees 00 minutes 47 seconds West continuing with said northerly boundary line a distance of 11.95 feet to a 1/2 inch steel rod found; Thence North 89 degrees 31 minutes 37 seconds East continuing with said northerly boundary line a distance of 103.99 feet to a 1/2 inch capped steel rod found; Thence North 00 degrees 13 minutes 44 seconds West continuing with said northerly boundary line a distance of 55.25 feet to a 1/2 inch capped steel rod found; Thence South 89 degrees 30 minutes 38 seconds East continuing with said northerly boundary line a distance of 107.24 feet to a PK nail found for the northeast corner of said Tract 2, said nail being in the westerly right-of-way line of N Charles Street; Thence South 00 degrees 18 minutes 25 seconds East with the easterly boundary line of said Tract 2 and with said westerly right-of-way line a distance of 163.45 feet to a 1/2 inch "MILLER 5665" capped steel rod set for the most easterly southeast corner of said Tract 2; Thence South 44 degrees 46 minutes 12 seconds West continuing with said easterly boundary line and said westerly right-of-way line a distance of 14.20 feet to a 1/2 inch "MILLER 5665" capped steel rod set for the most southerly southeast corner of said Tract 2, said rod being in the northerly right-of-way line of W Church Street; Thence South 89 degrees 31 minutes 37 seconds West with the southerly boundary line of said Tract 2 and with said northerly right-of-way line a distance of 535.00 feet to a TxDOT monument found for the most southerly southwest corner of said Tract 2; Thence North 45 degrees 13 minutes 48 seconds West continuing with said southerly boundary line and said northerly right-of-way line a distance of 21.12 feet to the point of beginning and containing 1.7673 acres of land, more or less. ECONOMIC DEVELOPMENT AGREEMENT Page 12 Attachment “B” CONCEPT PLAN ECONOMIC DEVELOPMENT AGREEMENT Page 13 Attachment “C” PROMISSORY NOTE and DEED OF TRUST (attached) ECONOMIC DEVELOPMENT AGREEMENT Page 14 Promissory Note Date: ____________, 2014 Borrower: Old Town Development Lewisville, LLC a Texas limited liability company Borrower’s Mailing Address: 2241 Veranda Avenue Trophy Club, Texas 76262 Lender: City of Lewisville Place for Payment: __________________ __________________ Principal Amount: $860,000.00 Annual Interest Rate: NONE (0%) Maturity Date: Fifteen (15) years following the Construction Period, as described below Annual Interest Rate on Matured, Unpaid Amounts: 8% Terms of Payment (principal and interest): Beginning five (5) years after the conclusion of the Construction Period, as that term is defined herein, the Principal Amount and any accrued interest will be due and payable in fourteen (14) successive annual installments of $60,000.00 and the fifteenth (15th) and final installment being in an amount equal to the entire unpaid balance of the Principal Amount plus any accrued interest. Annual installments will be due within thirty (30) days following anniversary of the Construction Period in the year following the applicable year, after any and all Offsets, as that term is defined herein, from Lender have been applied. By way of example only, if the Construction Period expires on July 15, 2015, the July 15, 2020 year payment shall be made by August 15, 2021. “Construction Period” means the time period commencing on the effective date of this note and ending on the first (1st) day of the month following the issuance of the first Certificate of Occupancy for a restaurant building to be constructed by Borrower on the real property described on Exhibit A. “Offset” means amounts due and owing by Lender to Borrower in accordance with that certain Economic Development Agreement, executed ____________, 2014. Security for Payment: This note is secured by a deed of trust of even date herewith from Old Town Development Lewisville, LLC, to Kellie Fister Stokes, Trustee, which covers the real property described on Exhibit A. Other Security for Payment/Promise to Pay: Borrower promises to pay to the order of Lender the Principal Amount plus interest at the Annual Interest Rate. This note is payable at the Place for Payment and according to the Terms of Payment. All unpaid amounts are due by the Maturity Date. After maturity, Borrower promises to pay any unpaid principal balance plus interest at the Annual Interest Rate on Matured, Unpaid Amounts. Defaults & Remedies: If Borrower defaults in the payment of this note, and the continuance of any such non-payment (in whole or in part) for a period of thirty (30) calendar days from and after notice is received by Borrower from Lender describing such default, or in the performance of any obligation in any instrument securing the collateral to this note, and which, given the opportunity, has not cured such default as provided under any such instrument, Lender may declare the unpaid principal balance, earned interest, and any other amounts owed on the note immediately due. Borrower waives all demand for payment, presentation for payment, notice of intention to accelerate maturity, notice of acceleration of maturity, protest, and notice of protest, to the extent permitted by law. A default exists under this note if (1) Borrower or any other person liable on any part of this note or who grants a lien or security interest on the property as security for any part of this note (an “Other Obligated Party”) fails to timely pay or perform any obligation or covenant in any written agreement between Lender and Borrower or any Other Obligated Party; (2) any warranty, covenant, or representation in this note or in any other written agreement between Lender and Borrower or any Other Obligated Party is materially false when made; (3) a receiver is appointed for Borrower, any Other Obligated Party, or any property on which a lien or security interest is created as security (the “Collateral Security”) for any part of this note; (4) any Collateral Security is assigned for the benefit of creditors; (5) a bankruptcy or insolvency proceeding is commenced by Borrower, a partnership of which Borrower is a general partner, or an Other Obligated Party; (6) a bankruptcy or insolvency proceeding is commenced against Borrower, a partnership of which Borrower is a general partner, or an Other Obligated Party and the proceeding continues without dismissal for sixty days, the party against whom the proceeding is commenced admits the material allegations of the petition against it, or an order for relief is entered; (7) any of the following parties is dissolved, begins to wind up its affairs, is authorized to dissolve or wind up its affairs by its governing body or persons, or any event occurs or condition exists that permits the dissolution or winding up of the affairs of any of the following parties: Borrower, a partnership of which Borrower is a general partner, or an Other Obligated Party; or (8) any Collateral Security is impaired by loss, theft, damage, levy and execution, issuance of an official writ or order of seizure, or destruction, unless it is promptly replaced with collateral security of like kind and quality or restored to its former condition. Attorney’s Fees: Borrower also promises to pay reasonable attorney’s fees and court and other costs if this note is placed in the hands of an attorney to collect or enforce the note. These expenses will bear interest from the date of advance at the Annual Interest Rate on Matured, Unpaid Amounts. Borrower will pay Lender these expenses and interest on demand at the Place for Payment. These expenses and interest will become part of the debt evidenced by the note and will be secured by any security for payment. Prepayment: Borrower may prepay this note in any amount at any time before the Maturity Date without penalty or premium. Usury Savings: Interest on the debt evidenced by this note will not exceed the maximum rate or amount of nonusurious interest that may be contracted for, taken, reserved, charged, or received under law. Any interest in excess of that maximum amount will be credited on the Principal Amount or, if the Principal Amount has been paid, refunded. On any acceleration or required or permitted prepayment, any excess interest will be canceled automatically as of the acceleration or prepayment or, if the excess interest has already been paid, credited on the Principal Amount or, if the Principal Amount has been paid, refunded. This provision overrides any conflicting provisions in this note and all other instruments concerning the debt. Other Clauses: This note will be construed under the laws of the state of Texas, without regard to choice-of-law rules of any jurisdiction. When the context requires, singular nouns and pronouns include the plural. The provisions of this Note shall be binding upon and for the benefit of the successors, assigns, heirs, executors and administrators for Lender and Borrower. If any installment becomes overdue for more than ten days, at Lender’s option a late payment charge of 5% of the amount of the payment may be charged in order to defray the expense of handling the delinquent payment. If any provision of this note conflicts with any provision of a loan agreement, deed of trust, or security agreement of the same transaction between Lender and Borrower, the provisions of the deed of trust will govern to the extent of the conflict. This note represents the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties. Old Town Development Lewisville, LLC a Texas limited liability company By: _______________, _________ Exhibit A Legal Description Being a tract of land out of J. W. King Survey, Abstract No. 696 and situated in the City of Lewisville, Denton County, Texas, and surveyed by Miller Surveying, Inc. of Hurst, Texas in January 2014, said tract being the same tract of land described as “Tract 2” in the deed to City of Lewisville recorded in Volume 4845, Page 26 in the Deed Records of Denton County, Texas and being more particularly described by metes and bounds as follows: Beginning at a TxDOT monument found for the most westerly southwest corner of said Tract 2, said monument being in the easterly right-of-way line of Herod Street; Thence North 00 degrees 04 minutes 16 seconds East with the westerly boundary line of said Tract 2 and with said easterly right-of-way line a distance of 116.96 feet to a 1/2 inch steel rod found for the northwest corner of said Tract 2; Thence North 89 degrees 31 minutes 37 seconds East with the northerly boundary line of said Tract 2 a distance of 347.97 feet to a nail found; Thence South 00 degrees 00 minutes 47 seconds West continuing with said northerly boundary line a distance of 11.95 feet to a 1/2 inch steel rod found; Thence North 89 degrees 31 minutes 37 seconds East continuing with said northerly boundary line a distance of 103.99 feet to a 1/2 inch capped steel rod found; Thence North 00 degrees 13 minutes 44 seconds West continuing with said northerly boundary line a distance of 55.25 feet to a 1/2 inch capped steel rod found; Thence South 89 degrees 30 minutes 38 seconds East continuing with said northerly boundary line a distance of 107.24 feet to a PK nail found for the northeast corner of said Tract 2, said nail being in the westerly right-of-way line of N Charles Street; Thence South 00 degrees 18 minutes 25 seconds East with the easterly boundary line of said Tract 2 and with said westerly right-of-way line a distance of 163.45 feet to a 1/2 inch "MILLER 5665" capped steel rod set for the most easterly southeast corner of said Tract 2; Thence South 44 degrees 46 minutes 12 seconds West continuing with said easterly boundary line and said westerly right-of-way line a distance of 14.20 feet to a 1/2 inch "MILLER 5665" capped steel rod set for the most southerly southeast corner of said Tract 2, said rod being in the northerly right-of-way line of W Church Street; Thence South 89 degrees 31 minutes 37 seconds West with the southerly boundary line of said Tract 2 and with said northerly right-of-way line a distance of 535.00 feet to a TxDOT monument found for the most southerly southwest corner of said Tract 2; Thence North 45 degrees 13 minutes 48 seconds West continuing with said southerly boundary line and said northerly right-of-way line a distance of 21.12 feet to the point of beginning and containing 1.7673 acres of land, more or less. Deed of Trust Notice of confidentiality rights: If you are a natural person, you may remove or strike any or all of the following information from any instrument that transfers an interest in real property before it is filed for record in the public records: your Social Security number or your driver’s license number. Terms Date: ____________, 2014 Grantor: Old Town Development Lewisville, LLC a Texas limited liability company Grantor’s Mailing Address: 2241 Veranda Avenue Trophy Club, Texas 76262 Trustee: ________________ Trustee’s Mailing Address: ________________ ________________ Lender: City of Lewisville Lender’s Mailing Address: ________________ ________________ Obligation: Note: Date: _______________, 2014 Original principal amount: $860,000.00 Borrower: Old Town Development Lewisville, LLC a Texas limited liability company Lender: City of Lewisville Maturity date: As further set out therein Property (including any improvements): Described on Exhibit A. Other Exceptions to Conveyance and Warranty: For value received and to secure payment of the Obligation, Grantor conveys the Property to Trustee in trust. Grantor warrants and agrees to defend the title to the Property, subject to the Other Exceptions to Conveyance and Warranty. On payment of the Obligation and all other amounts secured by this deed of trust, this deed of trust will have no further effect, and Lender will release it at Grantor’s expense. Clauses and Covenants Grantor, in consideration of the debt and trust herein mentioned, does hereby GRANT, BARGAIN, SELL, TRANSFER, ASSIGN and CONVEY unto Kellie Fister Stokes, as Trustee, the Property in TRUST to secure payment of the Obligation evidenced by that certain Note of even date herewith, incorporated herein by reference, executed by Grantor and payable to the order of Lender, TO HAVE AND TO HOLD the Property, together with the rights, privileges, and appurtenances thereto, unto the said Trustee, and to his substitutes or successors forever. And Grantor does hereby bind itself, and Grantor's successors and assigns to warrant and forever defend the Property unto the said Trustee, his substitutes or successors and assigns forever, against the claim or claims of all persons claiming or to claim the Property or any part thereof, by, through or under Grantor, but not otherwise. The Grantor hereby agrees as follows: A. Grantor’s Obligations Grantor agrees to— 1. keep the Property in good repair and condition; 2. pay all taxes and assessments on the Property before delinquency; 3. defend title to the Property subject to the Other Exceptions to Conveyance and Warranty and preserve the lien’s priority as it is established in this deed of trust; 4. if the lien of this deed of trust is not a first lien, pay or cause to be paid all prior lien notes and abide by or cause to be abided by all prior lien instruments; and 5. notify Lender of any change of address. B. Lender’s Rights and Duties 1. Lender or Lender’s mortgage servicer may appoint in writing one or more substitute trustees, succeeding to all rights and responsibilities of Trustee. 2. If the proceeds of the Obligation are used to pay any debt secured by prior liens, Lender is subrogated to all the rights and liens of the holders of any debt so paid. 3. Notwithstanding the terms of the Note to the contrary, and unless applicable law prohibits, all payments received by Lender from Grantor with respect to the Obligation or this deed of trust may, at Lender’s discretion, be applied first to amounts payable under this deed of trust and then to amounts due and payable to Lender with respect to the Obligation, to be applied to late charges, principal, or interest in the order Lender in its discretion determines. 5. If Grantor fails to perform any of Grantor’s obligations, Lender may perform those obligations and be reimbursed by Grantor on demand for any amounts so paid, including attorney’s fees, plus interest on those amounts from the dates of payment at the rate stated in the Note for matured, unpaid amounts. The amount to be reimbursed will be secured by this deed of trust. 6. If there is a default on the Obligation or if Grantor fails to perform any of Grantor’s obligations and the default continues following any applicable Cure Period, as defined herein, Lender may— a. declare the unpaid principal balance and earned interest on the Obligation immediately due; b. direct Trustee to foreclose this lien after appropriate written notice to Grantor and Grantor’s lenders, in which case Lender or Lender’s agent will cause notice of the foreclosure sale to be given as provided by the Texas Property Code as then in effect; and c. purchase the Property at any foreclosure sale by offering the highest bid and 7. 8. then have the bid credited on the Obligation. Lender may remedy any default without waiving it and may waive any default without waiving any prior or subsequent default. Written notice of any default under this deed of trust and written notice of the commencement of any action to foreclose or otherwise enforce the provisions hereof must be given to the holder of a Construction Lien (as defined herein), if any, concurrently with or immediately after the occurrence of any such default or commencement. C. Trustee’s Rights and Duties If directed by Lender to foreclose this lien, Trustee will— 1. either personally or by agent give notice of the foreclosure sale as required by the Texas Property Code as then in effect; 2. sell and convey all or part of the Property “AS IS” to the highest bidder for cash with a general warranty binding Grantor, subject to any prior lien and to the Other Exceptions to Conveyance and Warranty and without representation or warranty, express or implied, by Trustee; 3. from the proceeds of the sale, pay, in this order— a. expenses of foreclosure, including a reasonable commission to Trustee; b. to Lender, the full amount of principal, interest, attorney’s fees, and other charges due and unpaid; c. any amounts required by law to be paid before payment to Grantor; and d. to Grantor, any balance; and 4. be, to the extent allowed by law, indemnified, held harmless, and defended by Lender against all costs, expenses, and liabilities incurred by Trustee for acting in the execution or enforcement of the trust created by this deed of trust, which includes all court and other costs, including attorney’s fees, incurred by Trustee in defense of any action or proceeding taken against Trustee in that capacity. D. General Provisions 1. If any of the Property is sold under this deed of trust, Grantor must immediately surrender possession to the purchaser, subject to a right of redemption and subject to all liens. If Grantor fails to do so, Grantor will become a tenant at sufferance of the purchaser, subject to an action for forcible detainer. 2. Grantor and any lender that has a secured interest in any improvements on the Property (“Grantor Lender”) shall have a right of redemption for one year from the foreclosure date. The right of redemption shall be exercised by Grantor or Grantor Lender within one year by notifying the then owner of the Property in writing it exercises its redemption option and paying the then owner 110% of the price it was sold for at the foreclosure sale. 3. Proceeding under this deed of trust, filing suit for foreclosure, or pursuing any other remedy will not constitute an election of remedies. 4. If any portion of the Obligation cannot be lawfully secured by this deed of trust, payments will be applied first to discharge that portion. 5. Grantor assigns to Lender all amounts payable to or received by Grantor from condemnation of all or part of the Property, from private sale in lieu of condemnation, and from damages caused by public works or construction on or near the Property. After deducting any expenses incurred, including attorney’s fees and court and other costs, Lender will either release any remaining amounts to Grantor or apply such amounts to reduce the Obligation. Lender will not be liable for failure to collect or to exercise diligence in collecting any such amounts. Grantor will immediately give Lender notice of any actual or threatened proceedings for condemnation of all or part of the Property. 6. Interest on the debt secured by this deed of trust will not exceed the maximum amount of 7. nonusurious interest that may be contracted for, taken, reserved, charged, or received under law. Any interest in excess of that maximum amount will be credited on the principal of the debt or, if that has been paid, refunded. On any acceleration or required or permitted prepayment, any such excess will be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the debt or, if the principal of the debt has been paid, refunded. This provision overrides any conflicting provisions in this and all other instruments concerning the debt. In no event may this deed of trust secure payment of any debt that may not lawfully be secured by a lien on real estate or create a lien otherwise prohibited by law. 8. Grantor may sell, transfer, or otherwise dispose of any Property, without the prior written consent of Lender and the new owner of the Property shall assume this loan. 10. As used herein, the term “Cure Period” shall mean (i) with respect to a payment default, thirty (30) days after written notice of such default is given to Grantor, (ii) sixty (60) days after written notice of default is given with respect to non-monetary defaults which can reasonably be cured within sixty (60) days, and (iii) for non-payment defaults which cannot reasonably be cured within sixty (60) days, such additional period of time as may be reasonably necessary to complete the cure so long as Grantor commences the cure and diligently prosecutes it to completion within 180 days after written notice of default is given to Grantor. All notices of default will be deemed to be given when deposited in the U.S. Mail, certified mail, return receipt requested, postage prepaid, addressed to Grantor at its address set forth in this deed of trust, or to such other address as Grantor may hereafter notify Lender as its address for notices under this deed of trust. When the context requires, singular nouns and pronouns include the plural. The term “Note” includes all extensions, modifications, and renewals of the Note and all amounts secured by this deed of trust. This deed of trust binds, benefits, and may be enforced by the successors in interest of all parties. If Grantor and Borrower are not the same person, the term “Grantor” includes Borrower. Grantor and each surety, endorser, and guarantor of the Obligation waive all demand for payment, presentation for payment, notice of intention to accelerate maturity, notice of acceleration of maturity, protest, and notice of protest, to the extent permitted by law. Grantor agrees to pay reasonable attorney’s fees, trustee’s fees, and court and other costs of enforcing Lender’s rights under this deed of trust if this deed of trust is placed in the hands of an attorney for enforcement. If any provision of this deed of trust is determined to be invalid or unenforceable, the validity or enforceability of any other provision will not be affected. The term “Lender” includes any mortgage servicer for Lender. The debt evidenced by the Note is in payment of the purchase price of the Property. Provided that a Default has not occurred and is continuing, Grantor shall be entitled to request a release of any platted lot located in the Property described in Exhibit A attached hereto from the lien of this Deed of Trust upon satisfaction of the following terms and conditions: (a) Grantor shall deliver to Lender a written request for the release of a platted lot together with payment to Lender of the Release Price (herein so called) for the lot to be released, which Release Price shall be a pro-rata proportion of the outstanding Obligation equal to the proportion of the Property being released; (b) Grantor shall pay all expenses arising in connection with the release of such lot, including, without limitation, reasonable attorneys' fees incurred by Beneficiary in connection with such release; and (c) Grantor shall satisfy any other reasonable requirements of Beneficiary. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Grantor: Old Town Development Lewisville, LLC a Texas limited liability company By: ___________, ___________ THE STATE OF TEXAS COUNTY OF TARRANT § § § This instrument was acknowledged before me on this the ___ day of ____________, 2014 by _________________, ___________ of Old Town Development Lewisville, LLC. ______________________________ NOTARY PUBLIC, STATE OF TEXAS Personalized Notary Seal AFTER RECORDING RETURN TO: ___________________ ___________________ ___________________ Exhibit A Legal Description Being a tract of land out of J. W. King Survey, Abstract No. 696 and situated in the City of Lewisville, Denton County, Texas, and surveyed by Miller Surveying, Inc. of Hurst, Texas in January 2014, said tract being the same tract of land described as “Tract 2” in the deed to City of Lewisville recorded in Volume 4845, Page 26 in the Deed Records of Denton County, Texas and being more particularly described by metes and bounds as follows: Beginning at a TxDOT monument found for the most westerly southwest corner of said Tract 2, said monument being in the easterly right-of-way line of Herod Street; Thence North 00 degrees 04 minutes 16 seconds East with the westerly boundary line of said Tract 2 and with said easterly right-of-way line a distance of 116.96 feet to a 1/2 inch steel rod found for the northwest corner of said Tract 2; Thence North 89 degrees 31 minutes 37 seconds East with the northerly boundary line of said Tract 2 a distance of 347.97 feet to a nail found; Thence South 00 degrees 00 minutes 47 seconds West continuing with said northerly boundary line a distance of 11.95 feet to a 1/2 inch steel rod found; Thence North 89 degrees 31 minutes 37 seconds East continuing with said northerly boundary line a distance of 103.99 feet to a 1/2 inch capped steel rod found; Thence North 00 degrees 13 minutes 44 seconds West continuing with said northerly boundary line a distance of 55.25 feet to a 1/2 inch capped steel rod found; Thence South 89 degrees 30 minutes 38 seconds East continuing with said northerly boundary line a distance of 107.24 feet to a PK nail found for the northeast corner of said Tract 2, said nail being in the westerly right-of-way line of N Charles Street; Thence South 00 degrees 18 minutes 25 seconds East with the easterly boundary line of said Tract 2 and with said westerly right-of-way line a distance of 163.45 feet to a 1/2 inch "MILLER 5665" capped steel rod set for the most easterly southeast corner of said Tract 2; Thence South 44 degrees 46 minutes 12 seconds West continuing with said easterly boundary line and said westerly right-of-way line a distance of 14.20 feet to a 1/2 inch "MILLER 5665" capped steel rod set for the most southerly southeast corner of said Tract 2, said rod being in the northerly right-of-way line of W Church Street; Thence South 89 degrees 31 minutes 37 seconds West with the southerly boundary line of said Tract 2 and with said northerly right-of-way line a distance of 535.00 feet to a TxDOT monument found for the most southerly southwest corner of said Tract 2; Thence North 45 degrees 13 minutes 48 seconds West continuing with said southerly boundary line and said northerly right-of-way line a distance of 21.12 feet to the point of beginning and containing 1.7673 acres of land, more or less. Attachment “D” DEED RESTRICTION The Property conveyed herein shall not be used for any purpose other than indoor/outdoor restaurant space and ancillary facilities with a minimum of 15,000 square feet. The restriction on the Property shall not be altered, amended, or terminated unless such alteration, amendment or termination is approved by a majority vote of the City Council of the City of Lewisville, Denton County, Texas. The restriction contained herein inures to the benefit of the City of Lewisville, Denton County, Texas and Grantee does hereby grant to the City of Lewisville, Texas, the right to prosecute, at law and in equity, against the person or entity violating or attempting to violate such restriction, either to prevent him, her or it from so doing or to correct such violation and for further remedy the City of Lewisville, Denton County, Texas may withhold the building permit or certificate of occupancy necessary for the lawful use of the applicable lot or lots within the Property until such restriction described herein is fully complied with as determined in the sole opinion of the City of Lewisville, Denton County, Texas. The City of Lewisville, Denton County, Texas, its successors, and assigns have the right to enforce by any proceeding at law or in equity the restriction imposed upon the Property. Failure to enforce the restriction herein contained shall in no event be deemed a waiver of the right to do so thereafter. The restriction herein contained shall run with and bind the Property and shall inure to the benefit of and be enforceable by the City of Lewisville, its successors and assigns and shall be effective for a term of fifteen (15) years from the date of the issuance of a certificate of occupancy for the first building on the Property. ECONOMIC DEVELOPMENT AGREEMENT Page 25