Fiscal Year 09-10 Audit

Transcription

CITY OF PORT NECHES, TEXAS
Comprehensive Annual
Financial Report
For the Year Ended September 30, 2010
Prepared by the
Municipal Administration Department
Comprehensive Annual Financial Report
September 30, 2010
Table of Contents
EXHIBIT PAGE
INTRODUCTORY SECTION
Letter of Transmittal
Certificate of Achievement
List of City Officials
Organizational Chart
i-iv
vi
vii
FINANCIAL SECTION
Independent Auditor's Report on Financial Statements Management's Discussion and Analysis (Required Supplementary Information)
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Assets
Statement of Activities
Fund Financial Statements:
Balance Sheet - Governmental Funds Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Assets
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balance to the
Statement of Activities
Schedule of Revenues, Expenditures and Changes in Fund BalancesBudget and Actual-General Fund
Statement of Net Assets - Proprietary Funds
Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds
Statement of Cash Flows - Proprietary Funds Statement of Fiduciary Net Assets - Fiduciary Funds Notes to the Financial Statements
Required Supplementary Information
Funding Programs for Employee Retirement Systems Combinina and Individual Fund Statements and Schedules
Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and
Changes in Fund Balances - Nonmajor Governmental Funds Combining Statement of Fiduciary Net Assets and Liabilities Combining Statement of Changes in Fiduciary Net Assets Schedules of Revenues, Expenditures, and Changes in Fund
Balances - Budget and Actual - Debt Service Fund
1 -2
3 - 10
A
B
11
12
C
13
C-1
14
D
15
0-1
16
E
F
17
18
0
H
20
I
21
19
22 - 36
J
38
K
39
L
M
N
40
41
42
0
43
STATISTICAL SECTION
Net Assets by Component
Changes in Net Assets
I
44
Il
45
Comprehensive Annual Financial Report
September 30, 2010
Table of Contents
Governmental Activities Tax Revenues by Source
Fund Balances of Governmental Funds
Changes in Fund Balances of Governmental Funds Assessed Value and Estimated Actual Value of Taxable Property Property Tax Rates Direct and Overlapping Governments
Principal Taxpayers
Property Tax Levies and Collections
Ratios for Outstanding Debt by Type Ratios of General Bonded Debt Outstanding
Schedule of Direct and Overlapping Bonded Debt Direct and Overlapping Governmental Activities Debt
Legal Debt Margin Information
Pledged Revenue Coverage
Demographic and Economic Statistics
Principal Employers
Full-Time City Government Employees by Department Capital Asset Statistics by Function
Industrial Contract Revenue
Departmental Performance EXHIBIT PAGE
III
46
IV
47
V
48
VI
49
VII
50
VIII
51
IX
52
X
53
XI
54
XII
55
XIII
56
XIV
57
XV
58
XVI
59
XVII
60
XVIII
61
XIX
62
XX
63
XXI
64
INTRODUCTORY SECTION
Poet Oatee Vox 751 o Ant 1teeks 'Azad 77651
March 31, 2011
To the Honorable Mayor, Members of the City Council
and Citizens of Port Neches, Texas
It is our pleasure to submit for your information the Comprehensive Annual Financial Report
(CAFR) of the City of Port Neches (City) for the fiscal year ended September 30, 2010. This report
was prepared by City management and staff, in accordance with the City Charter, and in
compliance with State law, to provide citizens, investors, grantor agencies, and other interested
parties with reliable financial information about the City.
The CAFR consists of representations by City management concerning the finances of the City.
Management assumes full responsibility for the completeness and reliability of the information
presented in this report, based upon a comprehensive internal control framework that is
established for the purpose of providing accurate data in all material respects. Because the cost of
internal controls should not exceed anticipated benefits, the objective is to provide reasonable,
rather than absolute, assurance that the financial statements are free from material misstatements.
The City's financial statements have been audited by Mitchell T. Fontenote, CPA, a firm of licensed
certified public accountants. The independent audit involved examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall
financial statement presentation. The independent auditor concluded, based upon the audit, that
there was a reasonable basis for rendering an unqualified opinion on the City's financial
statements for the fiscal year ended September 30, 2010, and that they are fairly presented in
conformity with Generally Accepted Accounting Principles (GAAP).
The report from Mitchell T. Fontenote, CPA is presented as the first component of the financial
section of this document. GAAP requires that management provide a narrative introduction,
overview, and analysis to accompany the basic financial statements in the form of Management's
Discussion and Analysis (MD&A). Finally, the statistical section includes selected financial and
demographic information, generally presented on a multi-year basis.
Profile of the Government
The City of Port Neches, incorporated in 1927, is located in the southeast corner of the state in
Jefferson County. With a population of 13,601, the City occupies a land area of 8.99 square miles.
The City is served by a regional airport, has ready rail access to all parts of the country, and is
located on the Neches River. Although empowered to levy a property tax on both real and personal
properties located within its boundaries, the City collects no personal or corporate taxes from
residents, nor is a State income tax assessed.
-Saftpfdate ea* ell de Itedee"
The City is a Council-Manager form of govemtnent. It is governed by an elected City Council
composed of a Mayor and five (5) Council members, who each serve three (3) year staggered
terms. The City Council is charged with formulating public policy, enacting local legislation,
adopting budgets, and appointing the City Manager, City Attorney, and Municipal Court Judge. The
City Manager is the chief administrative and executive officer of the City, and implements Council
directives and policies, administers the fiscal affairs, and is responsible for the administration of
municipal operations. The City provides a full range of services including police and fire protection,
the construction and maintenance of streets and other infrastructure, and recreational and cultural
facilities. Additionally, water, sanitary sewer, and solid waste services are operated by the City.
The financial reporting entity includes all the funds of the primary government as well as its legally
separate component unit, the Port Neches Economic Development Corporation.
Factors Affecting Financial Conditions
The City is located in a metropolitan area in Southeast Texas frequently referred to as the Golden
Triangle and is a component of the Beaumont-Port Arthur—Orange MSA. Retail and service
businesses, along with residential construction firms, continue to experience growth as the overall
local economy remains strong relative to the significant downturn experienced by the majority of
the country. The regional economy is substantially based on petroleum refining and the production
and processing of chemicals and petrochemicals. Area refineries are aggressively expanding their
refining infrastructure, several Liquefied Natural Gas facilities are operational and/or under
development, and significant construction activity remains in progress to support the personnel and
corresponding service needs associated with the industrial projects. These improvements, totaling
approximately $20 billion, will provide massive economic stimulus to communities throughout our
regional energy corridor. Local school entities are also upgrading educational infrastructure,
creating both an economic and quality of life impact for our citizens.
The City continues with its conservative approach to the expansion of various public services. The
City continues to invest in quality of life improvements and basic infrastructure maintenance, and
has not encountered any need to reduce the level of services to its citizens. While the economic
environment and public expenditure policies are subject to change and reevaluation, it is
anticipated that the City will experience manageable growth that will not be disruptive to the current
financial position of the City.
Major Initiatives and Long Term Planning
The City continues to be the recipient of numerous Federal and State grants. Specifically, the City
accepted the award of a $2.7 million Port Security Grant for the construction of a new City Hall/
Emergency Operations Center and approximately $1.3 million in Hazard Mitigation Grant Program
(HMGP) funds for use on the City Hall/ Emergency Operations Center, Post Office and several
other City facilities. Additionally $58,000 from the Energy Efficiency and Conservation Block Grant
Program (EECBG) will retrofit various City structures with new lighting and several public safety
equipment purchases will be funded through the Department of Homeland Security.
The City initiated construction of a new lift station and force main to better serve an area that has
previously experienced operationally difficulties involving the sanitary sewer system. Additionally,
work was completed on a variety of sanitary sewer line repair and rehabilitation projects utilizing
II
funds from 2007 Certificates of Obligation. The City also completed approximately 10 miles of
street resurfacing projects throughout the community. Finally, the Port Neches Economic
Development Corporation received the results of a retail marketing analysis which will be utilized in
efforts to expand the City's retail/commercial tax base.
Development opportunities continue to be pursued for the riverfront acreage owned by the City.
The City Council and the Port Neches Economic Development Corporation previously authorized a
marketing plan to develop the Port Neches riverfront, resulting in the incorporation of the Port
Neches Riverfront Development Authority (PNRDA), a local government corporation. The PNRDA
has been formed to oversee the marketing and the multi-year development initiative of the 80 acres
of riverfront property.
It is anticipated that the City will issue debt during fiscal year 2010-2011 which will be utilized for
the City Hall/Emergency Operations Center project, street repairs, water distribution system
upgrades, and sanitary sewer system repair and rehabilitation. As a portion of this work,
infrastructure improvements will be made in the downtown area as a component of a long term
revitalization project. Engineering and some construction work will be initiated on these projects
during the fiscal year. Additionally, work will be commenced utilizing the aforementioned HMGP
and EECBG funds. It is also expected that the establishment of an area wide public safety
communication system, funded by Homeland Security Grant funds, will be completed.
In other areas of economic development, City leaders will continue to evaluate revitalization
opportunities for the downtown area in conjunction with an overall emphasis on retail and
commercial enhancement throughout the City.
Relevant Financial Policies — Budaetary Control, Risk Management and Pension Obligations
The annual budget serves as the foundation for the City's financial planning and control. All
departments of the City are required to submit requests for appropriation to the City Manager by
mid-May. A proposed budget is then prepared which is presented to the City Council for review by
August 15. In accordance with the City Charter and State statutes, public hearings on the proposed
budget and corresponding tax rate are then conducted. The budget and tax rate must be approved
and adopted by the City Council no later than September 30.
The appropriated budget is prepared by fund and department. Transfers of appropriations between
funds require the approval of the City Council, with certain adjustments within departments can be
authorized by the City Manager. Budget-to-actual comparisons are provided in this report for each
individual governmental fund for which an appropriated annual budget has been adopted.
The primary objective of the City's investment policy is safety of principal in order to minimize credit
and market risks, while maintaining a competitive yield on its portfolio. Accordingly, deposits were
insured by federal depository insurance or collateralized. A total of $13,651,930 was invested by
the City on September 30, 2010 in compliance with the Public Funds Investment Act and the City's
Investment Policy.
The City is exposed to a variety of accidental losses and has initiated a risk management strategy
that attempts to minimize both losses and the cost of insurance. Risk control methods have been
established to reduce possible losses to property owned or under the control of the City and to
Hi
assure that the City's employees are aware of their duties and responsibilities. The primary method
used for risk financing and control is participation in the Texas Municipal League Intergovernmental
Risk Pool,
The City provides pension benefits for all full-time employees, through a nontraditional, joint
contributory, hybrid defined benefit plan in the statewide Texas Municipal Retirement System
(TMRS), an agent multiple-employer public employee retirement system. As a matter of policy, the
City fully funds the annual required contribution to the pension plan as determined by the TMRS
actuary. The City provides additional post employment benefits in the form of medical, dental, and
life insurance.
Single Audit
As a recipient of Federal and State financial assistance, the City is required to perform a Single
Audit in conformity with the provisions of Circular A-133 of the U.S. Office of Management and
Budget. Information related to the single audit, including the schedule of federal financial
assistance, findings and questioned costs, and independent auditors' reports on internal control is
included in a separate document.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awarded
a Certificate of Achievement for Excellence in Financial Reporting to the City for its comprehensive
annual financial report for the fiscal year ended September 30, 2009. This is the twenty-fourth year
that the City has received this prestigious award. In order to be awarded a Certificate of
Achievement, a government must publish an easily readable and efficiently organized
comprehensive annual financial report. This report must satisfy both generally accepted accounting
principals and applicable legal requirements.
A Certificate of Achievement is valid for a period of one (1) year only. The City believes that the
current comprehensive annual financial report continues to meet the requirement of the Certificate
of Achievement Program and, as such, the City will submit this document to the GFOA to
determine its eligibility for another certificate.
I very much appreciate the Mayor and the members of the City Council for their continued interest
and support in planning and conducting the financial operations of the City in a responsible and
progressive manner. .1 also wish to express my gratitude to all employees of the City for their
contributions in the preparation of this financial report as well as their ongoing commitment to
serving the citizens of Port Neches.
Respectively submitted,
Andre' Wimer
City Manager
iv
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Port Neches
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2009
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual fmancial
reports (CAFRs) achieve the highest
standards in government accounting
and fmancial reporting.
Executive Director
COMPREHENSIVE ANNUAL FINANCIAL REPORT
September 30, 2010
Term
Expires
CITY OFFICIALS
ELECTED POSITIONS
Glenn Johnson
Mayor
2012
Terry Schwertner
Council Member - Place 1 2013
Roy Hollier
Council Member - Place 2
2013
John Wasser
2011
Donald Anglin
2012
Matt Vincent
2011
KEY STAFF
POSITION
Andre' Wimer
City Manager
Kelly Galloway
Assistant City Manager
Amy Guidroz
Finance Officer
Jamie Louviere
City Secretary
Taylor Shelton
Public Works Director
Paul Lemoine
Police Chief
Stephen Curran
Fire Chief / Emergency Management Coordinator
Mark Durham
Librarian
CITY OF PORT NECHES
ORGANIZATIONAL CHART
Citizens of
Port Neches
[
City Attorney wpm,
1,
1Vlayo r and
City Council
f thief
Suppression
Eergeflcy
vii
Municipal
Judge
FINANCIAL SECTION
MITCHELL
T. FONTENOTE
CERTIFIED PUBLIC ACCOUNTANT
March 25, 2011
INDEPENDENT AUDITOR'S REPORT
The Honorable Mayor and City Council
City of Port Neches, Texas
We have audited the accompanying financial statements of the governmental activities, businesstype activities, the aggregate discretely presented component units, each major fund, and the
aggregate remaining fund information of the City of Port Neches, Texas (the "City") as of and
for the year ended September 30, 2010, which collectively comprise the City's basic financial
statements as listed in the table of contents. These financial statements are the responsibility of
the City of Port Neches, Texas management. 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 of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our 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, the aggregate remaining fund
information, and the respective budgetary comparison for the general fund of the City of Port
Neches, Texas as of September 30, 2010, and the respective changes in financial position and
cash flows, where applicable, thereof for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
2428 NALL STREET • PORT NECHES, TEXAS 77651
PHONE (409) 722-6300 • FAX (409) 722-6301
MITCHELL@MITCHELLTFONTENTOTECPA.COM
1
Honorable Mayor and City Council
City of Port Neches, Texas
Page 2
March 25, 2011
In accordance with Governmental Auditing Standards, we have also issued our report dated
March 25, 2011, on our consideration of the City's internal control over financial reporting and
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 the internal control over financial reporting or on compliance. That report
is an integral part of an audit performed in accordance with Governmental Auditing Standards
and should be read in conjunction with this report in considering the results of our audit.
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis and budgetary comparison information as listed in the
table of contents be presented to supplement the basic financial statements. Such information,
although not a part of the basic financial statements, is required by the Governmental Accounting
Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We
have applied certain limited procedures to the required supplementary information in accordance
with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management regarding 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.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Port Neches, Texas' basic financial statements as a whole. The
Introductory Section, combining and individual nonmajor fund statements, budgetary
comparison schedules and statistical section are presented for the purpose of additional analysis
and are not a required part of the basic financial statements. The combining and individual fund
statements are the responsibility of management and were derived from and relate directly to the
underlying accounting and other records used to prepare the financial statements. The
information has been subjected to the auditing procedures applied by us and the other auditors in
the audit of the financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to
prepare the financial statements or to the financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the information is fairly stated in all material respects in relation to the
financial statements taken as a whole. The introductory section and statistical section have not
been subjected to the auditing procedures applied by us and the other auditors in the audit of the
basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on it.
(
2
BASIC FINANCIAL STATEMENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Port Neches (City), we offer readers of the City's financial
statements this narrative overview and analysis of the financial activities of the City for the fiscal
year ended September 30, 2010. We encourage readers to consider the information presented
here in conjunction with our letter of transmittal at the front of this report and the City's financial
statements, which follow this section.
Financial Hiohlights
The net assets of the City exceeded its liabilities at the close of 2010 by $ 62,804,422. Of this
amount, $ 4,2551642 is considered unrestricted. The unrestricted net assets of the City's
governmental activities are $ 3,030,847. The unrestricted net assets of the City's business-type
activities are $ 1,224,796 and may be used to meet the ongoing obligations of the City's water and
sewer, sanitation, and leased building business-type activities.
The total net assets of the City decreased by $ 1,954,810 reflecting flat economic conditions, the
effects of depreciation, and the recognition of net pension obligations for retirement and OPEB
benefits.
As of the close of the current fiscal year, the City's governmental funds reported a combined
ending fund balance of $ 8,721,033 which is a decrease of $ 1,374,283. Approximately 81% of this
total amount, $ 7,021,098, is unreserved at September 30, 2010 and is considered available for
spending. The decrease is due to the expenditure of grant matching funds for the 2006 Port
Security Project.
The General Fund reported a fund balance of $ 4,154,018 at the end of the current fiscal year. The
unreserved fund balance for the General Fund was $ 4,101,971 or 55% of total General Fund
expenditures (excluding transfers out net of debt issuance).
The City's total bonded debt decreased from $14,805,000 to $12,965,000 during the current fiscal
year.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City's basic financial
statements which 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 supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements are designed to provide readers with a broad overview
of the City's finances, in a manner similar to private sector businesses.
The Statement of Net Assets presents information on all of the City's assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets
may serve as a useful indicator of whether the financial position of the City is improving or
deteriorating.
3
The Statement of Activities presents information showing how the government's net assets
changed during the most recent fiscal year. All changes in net assets are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of the cash flows. Thus,
revenue and expenses reported in this statement for some items may result in cash flows in future
fiscal periods.
Both of the government-wide financial statements distinguish functions of the City that are
principally supported by taxes and intergovernmental revenues (governmental activities) from other
functions that are intended to recover a significant portion of their costs through user fees or
charges (business-type activities). The governmental activities of the City include general
government, public works, public safety, and community enrichment. The business-type activities
of the City include the water/wastewater system, a leased building operation, and a solid waste
collection system.
A component unit is included in the City's basic financial statements. The Port Neches Economic
Development Corporation (PNEDC), a legally separate entity, is comprised of a board appointed by
the City Council and derives funding from sales tax revenue. Financial information for this
component unit is reported separately from the financial information presented for the primary
government. Separately published financial statements for the PNEDC are not available. The
government-wide financial statements can be found in Exhibits A and B of this report.
Fund Financial Statements are groupings of related accounts that are used to maintain control
over resources that have been segregated for specific activities or objectives. The City, like other
state and local governments, uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements. The funds of the City can be divided into three categories:
governmental funds, proprietary funds, and fiduciary funds.
Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on the nearterm inflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating the City's near-term
financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By
doing so, readers may better understand the long-term impact of the government's near-term
financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures, and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The City maintains nine individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues,
expenditures, and changes in fund balances for the General Fund, Debt Service Fund, and Capital
Improvement Funds. Data from other governmental funds are combined into a single, aggregated
4
CITY OF PORT NECHES, TEXAS •
presentation. Individual fund data for each of these non-major governmental funds is provided in
the form of combining statements elsewhere in this report.
The City of Port Neches adopts an annual appropriated budget for its General Fund. A budgetary
comparison is provided for the General Fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found in Exhibits C and D of this report.
Proprietary Funds are maintained by two different types. Enterprise funds are used to report the
same functions presented as business-type activities in the government wide financial statements.
The City uses enterprise funds to account for its water distribution/wastewater treatment systems,
the solid waste operation, and the leased building operation. The Internal Service Fund is an
accounting device used to accumulate and allocate costs internally among the City's various
functions for sick leave costs. The basic proprietary fund financial statements can be found in
Exhibits F, G, and H of this report. The Internal Service Fund financial statement is also included
in Exhibit H.
Fiduciary Funds are used to account for resources held for the benefit of parties outside the
government. Fiduciary funds are not reflected in the government-wide financial statement because
the resources of those funds are not available to support the City's own programs. The accounting
used for fiduciary funds is much like that used for proprietary funds as noted in Exhibit I.
Notes to the Financial Statements provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements. The
notes to the financial statements can be found on pages 22 through 36 of this report.
Required Supplementary Information is presented in addition to the basic financial statements
and accompanying notes. This report provides certain required supplementary information
concerning the City's progress in funding its pension benefit obligation through the Texas Municipal
Retirement System (TMRS). Required supplementary information can be found in Exhibit J of this
report.
The combining statements referred to earlier in connection with non-major governmental funds and
the internal service fund follow the required supplementary information on pensions. Combining
and individual fund statements and schedules can be found in Exhibits K through N of this report.
Government-Wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of the City's financial
position. The City's assets exceeded liabilities by $ 62,804,422 at the close of the most recent
fiscal year. The largest portion of the City's net assets $ 53,853,193 (84%) reflects its investment
in capital assets (e.g. land, buildings, improvements, 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; therefore, these assets are not available for future spending.
Although the City's investment in capital assets is reported net of related debt, it should be noted
that the resources needed to repay debt must be provided from other sources, since capital assets
themselves cannot be used to liquidate these liabilities.
5
Statement of Net Assets - Primary Government
Current and Other Assets
Capital Assets
Total Assets
Long-Term Liabilities Outstanding
Other Liabilities
Total Liabilities
Net Assets:
Invested in Capital Assets, Net of
Related Debt
Restricted
Unrestricted
Total Net Assets
$
Current and Other Assets
Capital Assets
Total Assets
Long-Term Liabilities Outstanding
Other Liabilities
Total Liabilities
Net Assets:
Invested in Capital Assets, Net of
Related Debt
Restricted
Unrestricted
Total Net Assets
$
Governmental
Activities
9,443,454
29,668,262
39,111,716
2010
Business-Type
Activities
3,656,133
37,103,176
40,759,309
11,816,768
3,589,981
15,406,749
807,873
851,982
1,659,855
12,624,641
4,441,963
17,066,604
16,716,578
37,103,176
53,819,754
3,957,542
3,030,847
23,704,967
771,483
1,224,796
39,099,455
4,729,025
4,255,643
62,804,422
$
$
$
Total
13,099,587
66,771,438
79,871,025
Governmental
Activities
12,810,639
29,729,557
42,540,196
2009
Business-Type
Activities
$ 4,558,382
36,709,752
41,268,134
15,768,175
2,224,449
17,992,624
426,495
629,980
1,056,475
16,194,670
2,854,429
19,049,099
14,937,297
36,709,752
51,647,049
4,008,701
5,601,574
24,547,572
1,635,334
1,866,573
40,211,659
5,644,035
7,468,147
64,759,231
$
$
$
Total
17,369,021
66,439,309
83,808,330
An additional portion of the City's net assets (10%) represents unrestricted net assets,
which may be used to meet the City's on-going obligations to citizens and creditors.
6
The City's net assets reflect a decrease of $ 1,954,810 of the fiscal year end, including adjustments
for prior periods. The City's net assets of governmental activities decreased from previously
audited financial statement balances by $ 842,605. This increase is primarily related to recognition
of net pension obligations for the retirement obligation and OPEB.
The net assets of the business activities decreased by $ 1,112,205 during the fiscal year primarily
due to the effects of depreciation expense and the recognition of net pension obligations.
2010
CHANGES IN NET ASSETS
2009
Governmental
Business-Type
Activities
Activities
Governmental
Business-Type
Activities
Activities
Total
Total
Revenues
Charges for Services
$
220,042
$
4,415,659
$
4,635,701
$
233,420
$
4,189,718 $
4,423,138
-
1,492,643
811,801
811,801
1,492,643
Property Taxes
5,529,448
5,529,448
5,457,878
5,457,878
In Lieu of Tax Payments
2,250,790
2,250,790
2,880,889
2,880,889
Operating Grants and Contributions
General Revenues
Sales Tax
794,369
794,369
877,877
877,877
Gross Receipts Tax
808,898
808,898
629,012
629,012
34,126
53,396
0
0
Interest Earnings
24,653
Intergovernmental
9,473
0
Miscellaneous
Total Revenues
36,257
89,653
0
204,724
9,199
213,923
295,474
216,943
512,417
10,644,725
4,434,331
15,079,056
11,920,589
4,442,918
16,363,507
Expenses
General Government
3,040,706
3,040,706
1,820,618
1,820,618
Public Safety
5,587,503
5,587,503
4,908,108
4,908,108
Public Works
1,762,783
1,762,783
2,026,386
2,026,386
Community Enrichment
864,082
864,082
866,941
866,941
Interest on Long-Term Debt
580,756
580,756
644,156
644,156
Water
4,124,445
4,124,445
3,873,146
3,873,146
Sanitation
1,057,741
1,057,741
1,100,067
1,100,067
15,850
15,850
18,215
18,215
11,835,830
5,198,036
17,033,866
10,266,209
4,991,428
15,257,637
(1,191,105)
(763,705)
(1,954,810)
1,654,380
(548,510)
1,105,870
Transfers
348,500
(348,500)
95,000
(95,000)
Increase(Decrease) in Net Assets
(842,605)
(1,112,205)
(1,954,810)
1,749,380
(643,510)
1,105,870
40,211,659
64,759,231
22,798,192
40,855,169
63,653,361
62,804,421
24,547,572
$ 40,211,659 $
64,759,231
Leased Building
Total Expenses
Increase(Decrease) in Net Assets
before Transfers
24,547,572
Net Assets Beginning of Year
Net Assets End of Year
$
23,704,967
$
39,099,454
7
$
Financial Analysis of the City's Funds
As noted earlier, the City utilizes fund accounting to ensure and demonstrate compliance with
finance related requirements.
Governmental Funds are depicted to provide information on near-term inflows, outflows, and
balances of spendable resources. Such information is beneficial in assessing the City's financing
requirements. In particular, unreserved fund balance may serve as a useful measure of a
government's net resources available for spending at the end of the fiscal year.
As of September 30, 2010, the City's government funds reported combined ending fund balances
of $ 8,721,033. Approximately 85% of this amount constitutes unreserved fund balance, which is
available for spending at the government's discretion. The remainder of the fund balance is
reserved which stipulates that it is not available for new spending because it has previously been
committed to inventories, capital projects, and/or debt service.
The General Fund is the chief operating fund of the City. At September 30, 2010, unreserved fund
balance of the General Fund was $ 4,101,971, while total fund balance was $ 4,154,018. As a
measure of the General Fund's liquidity, it may be useful to compare both unreserved fund balance
and total fund balance to total fund expenditures (including transfers out). Unreserved fund balance
represents 56% of total General Fund expenditures (including transfers out), while total fund
balance represents 56% of the same amount.
The fund balance of the City's General Fund increased in 2010 by $264,425. The General Fund
was budgeted to remain constants. Overall, revenues were collected in line with budgeted
amounts, and expenditures did not exceed budgeted amounts. Transfers in from Enterprise Funds
to cover general administrative costs contributed to the increase in fund balance.
The Debt Service Fund has a total fund balance of $ 1,496,662. The net increase in fund balance
during 2010 in this fund was $ 86,132. The Debt Service Fund is funded with property tax revenue
at the level necessary to meet debt service requirements. The increase in fund balance is related
to delinquent tax collections and interest earnings.
General Fund Budgetary Highlights
During the fiscal year, the City was challenged with continued economic weakness (reduced
interest earnings). While these factors were significant, the overall fiscal year operating results
were in line with the original budget.
Proprietary Funds. The City's proprietary funds provide the same information found in the
government-wide financial statements, but in more detail.
Unrestricted net assets at the end of the year amounted to $ 1,673,446 for the Water and Sewer
Fund. Net assets in this fund decreased by $1,112,205 due primarily to depreciation expense.
Other factors concerning the finances of these funds have already been addressed in the
discussion of the City's business-type activities.
Capital Assets and Debt Administration
Capital Assets. The City's investment in capital assets for governmental and business-type
activities as of September 30, 2010, amounts to $ 53,853,193 (net of accumulated depreciation).
This investment in capital assets includes land, buildings, improvements, equipment, streets, and
drainage systems.
Balance
September 30, 2010
Governmental Activities
Land
Construction in Progress
Buildings and Improvements
Infrastructure
Machinery and Equipment
Vehicles
Less: Accumulated Depreciation
Total Govemmental Activities
Business-Type Activities
Land
Buildings and System
Less: Accumulated Depreciation
Total Business Activities
Balance
September 30, 2009
9,134,749
0
6,901,750
13,401,933
6,945,846
1,894,139
38,278,417
(8,610,154)
29,668,263
9,134,749
0
6,901,750
13,401,933
6,273,916
1,894,139
37,606,487
(7,885,510)
29,720,977
51,640
1,330,632
39,465,927
12,354,007
53,202,206
(16,099,030)
37,103,176
51,640
Additional information of the City's capital assets can be found in Note
Note 3, Page 36.
39,465,927
12,251,341
51,768,908
(15,059,156)
36,709,752
1, pages 27 and 28 and
Long-Term Debt. At September 30, 2010 the City, had $ 12,965,000 of long-term bonds
outstanding. All bonds are backed by the full faith and credit of the City.
The City's general obligation bond ratings by Standard & Poor's Corporation and Moody's Investor
Services, Inc. are A+ and Al respectively.
9
Additional information regarding the City's long-term debt can be found in Exhibit 0.
Economic Factors and Next Year's Budgets and Rates
Jefferson County Appraisal District's certified tax roll indicates the 2010 property tax levy has
increased by $ 61,778 to $ 5,609,966.
In 2010, Industrial District values have increased by $ 25,768,690. Industrial contracts will produce
approximately $ 2,454,179 in revenue, which is an increase of $250,000.
The property tax rate for 2011 fiscal year is $0.7195 per $100 assessed valuation.
These items were considered in preparing the City of Port Neches budget for the 2011 fiscal year.
Requests for Information
This financial report is designed to provide our citizens, taxpayers, customers, investors, and
creditors with a general overview of the City's finances. Questions concerning any of the
information provided in this report may be addressed to the Municipal Administration Department,
P.O. Box 758, Port Neches, Texas 77651. General information on the City of Port Neches, Texas
is available at htto://www.ci.port-neches.tx.us
10
EXHIBIT A
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2010
ASSETS
Cash and cash equivalents
Investments
Receivables - net of allowances for uncollectibles:
Taxes
Accounts receivable
Federal agencies
Other
Inventories
Capital bond and other debt issuance costs
Restricted assets:
Capital projects
Refundable customer advance programs
Capital assets:
Land and work in process
Buildings, property, and equipment, net
Total Assets
LIABILITIES
Accounts payable
Accrued expenses and other liabilities
Liabilities payable from restricted assets
Net pension obligation
Other post employment benefits
Non-current liabilities:
Due within one year
Due in more than one year
Total Liabilities
NET ASSETS
Invested in capital assets, net of related debt
Restricted for:
Debt service
Capital projects
Unrestricted
Total Net Assets
Governmental
Actitivies
Primary Government
Business-Type
Activities
Total
Economic
Development
Corporation
$ 8,523,956
$ 1,964,606
$ 10,488,562
$ 1,179,910
146,950
427,144
241,297
410,617
127,580
68,587
320,750
146,950
427,144
241,297
410,617
52,047'
68,587
75,533
771,483
417,367
771,483
417,367
37,103,176
40,759,309
9,134,749
57,636,689
79,871,025
389,551
432,774
417,845
714,871
735,315
32,274
471,815
485,308
280,710
19,588
417,845
243,056
250,007
2,110,831
11,816,768
15,406,749
89,730
358,919
1,659,855
2,200,561
12,175,687
17,066,604
85,000
2,535,000
2,652,274
16,716,578
37,103,176
53,819,754
1,496,662
2,460,880
3,030,847
$ 23,704,967
771,483
1,224,795
$ 39,099,454
1,496,662
3,232,363
4,255,642
$ 62,804,421
9,134,749
20,533,513
39,111 716
108,841
413,186
The accompanying notes are an integral part of this financial statement.
11
1,500,660
(1,151,614)
$ (1,151,614)
EXHIBIT B
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2010
Functions / Programs
Governmental activities:
General government
Public safety
Public works
Community enrichment
Interest on long-term debt
Expenses
$
Total governmental activities
Business-type activities:
Water and sewer
Sanitation
Leased building
Total business-type activities
Total Primary Government
Component unit:
Port Neches Economic
Development Corporation
$
3,040,706
5,587,503
1,762,783
864,082
580,756
Governmental
Activities
Business-type
Activities
$
$
$
$
120,563
99,479
37,088
537,530
237,183
11,835,830
220,042
4,124,445
1,057,741
15,850
3,038,863
1,262,304
114,492
5,198,036
4,415,659
17,033,866
4,635,701
487,129
Net (Expense) Revenue and
Changes in Net Assets
Program Revenues
Operating
Charges for
Grants and
Services
Contributions
811,801
(3,003,618)
(4,929,410)
(1,663,304)
(626,899)
(580,756)
$
(10,803,987)
811,801
Total
(3,003,618)
(4,929,410)
(1,663,304)
(626,899)
(580,756)
Component
Unit
Economic
Development
Corporation
$
(10,803,987)
(10,803,987)
(1,085,582)
204,563
98,642
(782,377)
(1,085,582)
204,563
98,642
(782,377)
(11,586,364)
(782,377)
$
(237,129)
Property taxes, penalties and interest
In lieu of tax contracts
Sales tax
Gross receipts tax
Interest
Other governmental agencies - unrestricted
Other miscellaneous
Total general revenues
Transfers
Total general revenues and transfers
Change in Net Assets
Net Assets October 1 (Beginning)
Prior Period Adjustment
Net Assets October 1 (Restated)
$
Net Assets, ending
12
5,529,448
2,250,790
794,369
815,178
24,653
9,473
198,444
9,612,882
348,500
9,961,382
9,199
18,672
(348,500)
(329,828)
207,643
9,631,554
397,418
9,631,554
397,418
(842,605)
(1,112,205)
(1,954,810)
160,289
24,547,572
24,547,572
40,211,659
40,211,659
64,759,231
64,759,231
39,099,454
$ 62,804,421
23,704,967
$
5,529,448
2,250,790
794,369
815,178
34,126
393,673
3,745
(1,311,903)
(1,311,903)
$
(1,151,614)
EXHIBIT C
BALANCE SHEET - GOVERNMENTAL FUNDS
SEPTEMBER 30, 2010
General
ASSETS:
Investments
Receivables (net of allowances
for doubtful accounts)
Taxes receivable
Other receivables
Grant receivables
Due from other funds
Construction In Progress
Inventories
TOTAL ASSETS
$
4,249,009
Capital
Improve ment
$
80,823
(1,341)
2,223,002
$
32,275
209,815
103,801
Hazard
Mitigation
Debt
Service
1,391,562
17,244
66,127
209,022
-
98,342
Port
Security
$
446,640
Other
Governmental
Funds
Total
Governmental
Funds
$
$
196,495
146,950
(1,341)
241,297
411,958
-
-
-
52,047
52,047
$
4,484,339
$
54,416
2,373
72,534
193,384
7,614
8,523,952
$
2,465,092
$
1,556,031
$
226,266
$
4,212
$
100
59,269
$
48,325
$
446,640
$
196,495
$
9,374,863
$
1,788
$
-
108,841
2,373
131,803
403,199
7,614
1,788
653,830
LIABILITIES AND FUND BALANCES:
LIABILITIES:
Accounts payable
Accrued expenses and other liabilities
Deferred tax revenue
Due to other funds
Other liabilities
TOTAL LIABILITIES
-
4,212
330,321
FUND BALANCES:
Reserved for:
Debt service
Inventory
Drug enforcement
Unreserved:
General fund
Capital projects
Special revenue
Total fund balances
TOTAL LIABILITIES AND FUND
BALANCES
$
209,815
59,369
-
258,140
1,496,662
1,496,662
52,047
151,226
4,101,971
2,460,880
458,247
8,721,033
-
52,047
-
151,226
-
4,101,971
2,460,880
4,154,018
$
4,484,339
1,496,662
2,460,880
$
2,465,092
$
1,556,031
13
(31,874)
(31,874)
$
226,266
43,481
194,707
446,640
446,640
$
446,640
$
196,495
$
9,374,863
EXHIBIT C-1
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO
THE STATEMENT OF NET ASSETS
SEPTEMBER 30, 2010
Amounts reported for governmental activities in the statement of net assets are different because:
Total governmental fund balances in the Balance Sheet (Exhibit C). Capital assets used in governmental activities are not financial resources and, therefore,
are not reported in the funds.
$ 8,721,033
Recognition of deferred revenue as revenue increases net assets. 29,668,263
Effect of amortizing bond premium and issuance costs on issuance of bonds.
131,803
37,446
Other post employment benefits are not due and payable in the current period and,
therefore, are not reported in the funds.
(471,815)
Net pension obligations are not due and payable in the current period and, therefore, are
not reported in the funds.
(485,308)
An Internal Service Fund is used by management to charge certain costs to individual
funds. The assets and liabilities of the Internal Service Fund are included in the
governmental activities in the Statement of Net Assets.
(1,380,103)
Amount of Internal Service Fund net assets related to business-type activities. Long-term liabilities are not due and payable in the current period and, therefore, are not
reported in the funds.
448,650
Rounding
Total net assets of governmental activities (Exhibit A)
(12,965,000)
14
The accompanying notes are an integral part of this fin ancial statement.
(2)
$ 23,704,967
EXBHIBIT D
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
Capital
Improvement
General
REVENUES:
Sales tax
Gross receipts tax
Permits, licenses and fees
Fines
Insurance proceeds
Interest
Other governmental agencies
Grants and private contributions
Other miscellaneous
Total revenue
EXPENDITURES:
Current:
General government
Public safety
Public works
Contingent
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources
and uses
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
$ 3,035,487
$ 2,492,632
$
2,250,790
794,369
815,179
99,479
120,563
$
Total
Governmental
Funds
Other
Governmental
Funds
$
$
-
4,721
37,088
160,620
7,322,383
183,039
7,363
-
187,760
2,499,995
537,530
42,254
582,633
912
54,144
1,850
56,906
2,150,869
2,366
2,849
31,902
811,801
204,724
10,649,677
721,093
5,833,159
1,642,736
805,237
863,872
41,951
325,051
5,528,119
2,250,790
794,369
815,179
99,479
120,563
24,653
325,051
7,313,958
8A
$
Port
Security
-
8,808
721,093
3,648,022
1,317,685
763,286
863,872
Hazard
Mitigation
Debt
Service
1,840,000
573,863
2,413.863
31,902
2,150,869
44,317
1,840,000
573,863
12,279,960
86 132
(31,902)
(1,568,236)
12,589
(1,630,283)
_
306,000
(50,000)
306,000
(50,000)
256,000
256,000
264,425
(137,291)
86,132
(31,902)
(1,568,236)
12,589
(1,374,283)
28
2,014,876
182,118
10,095,316
3,889,593
2,598,171
1,410,530
$ 4,154,018
$ 2,460,880
$ 1,496,662
15
$
(31,874)
$
446,640
$
194,707
$
8,721,033
EXHIBIT D-1
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
Net change in fund balances - total governmental funds (Exhibit D) $ (1,374,283)
Revenues in the statement of activities that do not provide current financial resources are not reported as
revenues in the funds.
(4,951)
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. This is the
amount by which capital outlays exceeded depreciation in the current period.
Capital Outlay
Depreciation
671,929
(724,644)
(52,715)
The issuance of long-term debt provides current financial resources to governmental funds, while the repayment
of the principal of long-term debt consumes the current financial resources of governmental funds. Neither
transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs,
premiums, discounts, and similar items when debt is first issued, whereas the amounts are deferred and
amortized in the statement of activities. This amount is the net effect of these differences in the treatment of longterm debt and related items.
To paying agent for bond principal
$ 1,840,000
1,840,000
Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized
for transactions that are not normally paid with expendable available financial resources. In the statement of
activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of
when financial resources are available. In addition, interest on long-term debt is not recognized under the
modified accrual basis of accounting until due, rather as it accrues. The adjustment combines the net changes of
several balances.
Amortization of bond premium
Amortization of bond costs
6,556
(13,449)
(6,893)
Expenses reported in the statement of activities do not require the use of current financial
resources and, therefore, are not reported as expenditures in governemental funds.
Increase in net pension obligation
Increase in other post employment benefits
$ (471,815)
(485,308)
(957,123)
The net revenue of certain activities of internal service funds is reported with governmental activities.
Change in net assets
Amount of change related to business-type activities
Change in net assets of governmental activities (Exhibit B)
$ (313,198)
(26,558)
(286,640)
$
(842,605)
EXHIBIT E
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL - GENERAL FUND
Budgeted Amounts
Variance with
Final Budget Positive
(Negative)
Original
Final
Actual
Amounts
$ 3,048,300
$ 3,048,300
$ 3,035,487
2,250,000
840,000
750,000
178,800
50,000
4,800
97,100
7,339,850
2,250,000
840,000
750,000
120,850
178,800
50,000
4,800
97,100
7,339,850
2,250,790
794,369
815,179
99,479
120,563
(12,813)
790
(45,631)
65,179
(21,371)
(58,237)
8,808
(41,192)
37,088
160,620
32,288
63,520
(17,467)
942,300
3,671,000
1,354,750
803,700
824,100
7,595,850
942,300
3,671,000
1,354,750
803,700
824,100
7,595,850
721,093
3,648,022
1,317,685
763,286
863,872
7,313,958
221,207
22,978
37,065
40,414
(39,772)
(256,000)
(256,000)
8,425
264,425
Transfers in
Transfers out
Total other financing sources and uses
306,000
(50,000)
256,000
306,000
(50,000)
256,000
306,000
(50,000)
256,000
REVENUES
Sales tax
Gross receipts tax
Permits, licenses, and fees
Fines
Interest
Grant revenue
Other miscellaneous
Total revenue
120,850
EXPENDITURES
Current:
General government
Public safety
Public works
Contingent
Total expenditures
281,892
264,425
264,425
FUND BALANCES AT BEGINNING OF YEAR
FUND BALANCE AT END OF YEAR
7.322.383
$
3,889,593
3,889,593
3,889,593
3,889,593
$ 3,889,593
$ 4 154 018
17
$
264,425
EXHIBIT F
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30, 2010
Total
Governmental
Activities
Internal
Service
Funds
1,964,608
$
Business-Type Activities - Enterprise Funds
.Water and
Sewer
ASSETS
Current Assets
Receivables - net of allowances for
uncollectibles:
Accounts receivable
Other
Inventories
Total Current Assets
Noncurrent Assets
Restricted cash and investments:
Capital projects
Customer deposits
* Total Restricted Assets
Total capital assets, net of
accumulated depreciation
Total Noncurrent Assets
Total Assets
LIABILITIES
Current Liabilities
Accounts payable
Accrued expenses and other liabilities Compensated absences
Current portion of long-term debt
$
Leased
Building
1,375,420
$ 279,154
$ 310,034
293,855
70,986
1,740,261
133,289
$
$
$
4
427,144
4,547
416,990
75,533
2,467,285
310,034
771,483
417,367
1,188,850
4
771,483
417,367
1,188,850
36,468,994
37,657,844
39,398,105
$
$
259,827
11,946
447,594
447,594
864,584
$
186,588
186,588
496,622
$
122
$
20,761
7,642
37,103,176
38,292,026
40,759,311
280,710
19,588
$
4
$
2,289
275,500
Total Current Liabilities
271,773
Noncurrent Liabilities
Payable from restricted assets:
Refundable customer deposits
Other noncurrent liabilites
Accrued compensated absences
Total Long-term Liabilities
Total Liabilities
NET ASSETS
Invested in Capital Assets
Net of restricted debt
Restricted for capital projects
Net assets - unrestricted
Total Net Assets
Sanitation
28,403
417,845
493,063
910,908
1,182,681
$
122
300,298
277,789
417,845
493,063
910,908
1,211,206
1, 102,309
1,102,309
1,380,098
(1,380,094)
$ (1,380,094)
28,403
122
36,468,994
771,483
974,947
447,594
186,588
388,587
309,912
37,103,176
771,483
1,673,446
38,215,424
$ 836,181
$ 496,500
39,548,105
Reconciliation to government-wide statement of net assets:
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds
Net assets of business-type activities
18
(448,651)
$ 39,099,454
EXHIBIT G
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - PROPRIETARY FUNDS
Business-Type Activities - Enterprise Funds
Water and
Sewer
Operating Revenues
Water sales
Sewer charges
Tap fees
Garbage collection
Rental fees
Penalties and other
Total Operating Revenues
$
1,529,889
1,424,193
26,319
Sanitation
Leased
Building
Total
$
114,492
1,529,889
1,424,193
26,319
1,226,404
114,492
94,364
4,415,661
1,226,404
114,492
58,464
3,038,865
35,900
1,262,304
Governmental
Activities
Internal
Service
Funds
$
Operating Expenses
Supplies and purification
Water and sewer maintenance
Billing and collection
Waste water plant
Public works
Leased building operations
Depreciation
Sick leave charges
Total Operating Expenses
1,039,874
124,107
4,079
11,771
1,523,720
574,630
198,305
761,360
933,634
4,079
1,175,752
4,097,889
1,057,741
15,850
5,171,480
280,688
280,688
Operating Income (Loss)
(1,059,024)
204,563
98 642
(755,819)
(280,688)
8,137
3,272
5,927
630
706
9,473
3,272
5,927
17,336
630
706
18,672
(1,041,688)
205,193
99,348
(737,147)
(280,688)
30,000
(322,500)
(292,500)
(56,000)
(56,000)
30,000
(378,500)
(348,500)
92,500
(125,000)
(32,500)
Change in Net Assets
(1,334,188)
149,193
99,348
(1,085,647)
(313,188)
Total Net Assets at Beginning of Year 39,549,612
686,988
397,152
(1,066,906)
836,181
$ 496,500
$ (1,380,094)
1,523,720
574,630
198,305
761,360
933,634
Nonoperating Revenues (Expenses)
Interest income
Insurance proceeds
Miscellaneous income
Interest expense
Total Nonoperating Revenues (Expenses)
Income (Loss) Before Transfers
and Contribution from Municipality
Transfers from Other Funds Transfers to Other Funds
Total Net Assets at End of Year
$
38,215,424
$
Reconciliation to government-wide statement of net assets:
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds
$
Change in net assets of business-type activities (page 14)
19
(26,558)
(1,112,205)
EXHIBIT H
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
Business-type Activities - Enterprise Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments for goods and services
Payments to employees
Net cash provided (used) by operating activities
Governmental
Activities
Internal
Service
Funds
Water and
Sewer
Sanitation
Leased
Building
Total
$ 3,056,542
$ 1,266,443
$ 114,492
$ 4,437,477
(631,113)
(303,714)
331,616
(12,554)
(2,113,380)
(1,350,679)
973,418
(285,857)
(1,469,712)
(1,046,966)
539,864
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers from other funds
Transfers to other funds
Net Cash provided by noncapital financing
activities
101,938
$
(285,857)
30,000
(322,500)
(56,000)
30,000
(378,500)
92,500
(125,000)
(292,500)
(56,000)
(348,500)
(32,500)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition of capital assets
Principal payments
Net cash provided (used) by financing activities
(1,349,853)
(176,919)
(1,349,853)
(176,919)
(4,403)
(4,403)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income and other
Interest expense
Net cash provided (used) by investing activities
17,336
630
706
17,336
630
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
(1,085,153)
CASH AND CASH EQUIVALENTS OCTOBER 1 3,649,423
CASH AND CASH EQUIVALENTS SEPTEMBER 30 CASH AND CASH EQUIVALENTS, OCTOBER 1,
CONSIST OF
Unrestricted cash and cash equivalents
Restricted cash
CASH AND CASH EQUIVALENTS, SEPTEMBER 30,
CONSIST OF
Unrestricted cash and cash equivalents
Restricted cash
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation
Increase (decrease) in payables Increase (decrease) in accrued liabilities
Increase (decrease) in customer deposits
(Increase) decrease in accounts receivable
(Increase) decrease in inventory
(1,526,772)
(4,403)
(1,531,175)
706
18,672
-
18,672
330
330
99,327
98,241
(887,585)
(318,027)
179,827
211,793
4,041,043
318,031
$ 2,564,270
$
279,154
$ 310,034
$ 3,153,458
$ 1,598,552
2,050,871
$ 3,649,423
$
179,827
$ 211,793
$
179,827
$ 211,793
$ 1,990,172
2,050,871
$ 4,041,043
$
$ 1,375,418
$
279,154
$ 310,034
$ 1,964,606
1,188,850
$ 3,153,456
$
1,188,850
$ 2,564,268
$
279,154
$ 310,034
$ (1,059,024)
$
204,563
$
1,039,874
76,818
493,280
787
(19,507)
7,636 .
$ 539,864 , $
124,107
1,024
1,514
20
6,807
(6,399)
331,616
$
$
318,361
318,361
4
4
98,642
(755,819)
$ (280,688)
11,770
(8,474)
1,175,751
69,368
494,794
787
(12,700)
1,237
$ 973,418
2,289
(7,458)
$ 101,938
$
(285,857)
STATEMENT OF FIDUCIARY NET ASSETS
AGENCY FUNDS
SEPTEMBER 30, 2010
EXHIBIT I
Total
Agency
Funds
ASSETS
Cash
Prepaid
178,250
$
Total Assets
178,250
LIABILITIES
Accounts payable
Due to employee groups
161
178,089
Total Liabilities
178,250
21
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2010
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the City of Port Neches, Texas (City) have been prepared in conformity with
generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental
Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental
accounting and financial reporting principles. The following represents the significant accounting policies and
practices used by the City.
A. Reporting Entity
The City of Port Neches, Texas was incorporated in October of 1927, and was chartered as a Home Rule
City on April 16, 1955. The City operates under a Council-Manager form of government and is governed by
an elected body comprised of a Mayor and five (5) Council members. The City provides the following
services: Police, Fire, Streets, Water and Sewer, Sanitation, Parks, Library, Planning and Zoning, and
General Administrative Services.
As required by GAAP, these statements present the financial activities of the City of Port Neches, Texas (the
primary government) and its component unit. The component unit is a legally separate entity that is included
in the reporting entity because of the significance of the operational or financial relationship with the City. The
discretely presented component unit is reported in a separate column in the government-wide financial
statements (see note below for description) to emphasize that it is legally separate from the government.
Discretely Presented Component Unit
The Port Neches Economic Development Corporation (PNEDC) was created under Section 4B of the
Development Corporation Act of 1979. As an entity legally separate from the City, the PNEDC is governed
by a board of directors appointed by the City Council. The PNEDC is comprised of a single fund that is
reported as a governmental fund type. Separately issued financial statement for the PNEDC are not
available. The notes to the financial statements include disclosures pertaining to the City as the primary
government and also the PNEDC as a component unit.
Joint Venture
The City participates in a joint venture, as follows:
Mid-County Dispatch
The City of Port Neches and two neighboring cities, Nederland and Groves, have a contractual
agreement to pool resources and share the costs, risks, and rewards of providing a central radio
dispatching service for the participating cities in compliance with the "Interlocal Cooperation Act". Each
of the participating cities has an ongoing financial interest in, and responsibility for the Mid-County
Dispatch. Costs of operations are shared based on each City's percentage of combined population of
the three cities.
The Mid-County Dispatch facility is located at the City of Nederland's police station. The City of
Nederland has both a responsibility for the daily supervision of the facility as well as a financial
responsibility to account for the financial operations of the Mid-County Dispatch. Separately issued
financial statements are not available for this joint venture.
22
SEPTEMBER 30, 2010
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Assets and the Statement of Changes
in Net Assets) report information on all of the nonfiduciary activities of the primary government and its
component unit. 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.
The statement of activities demonstrates the degree to which the direct expenses of a given structure 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 and proprietary funds. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund
financial statements.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic
resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned
and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
Property taxes are recognized as revenues in the year for which they are 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. Under the modified accrual basis of accounting,
revenues are recognized when susceptible to accrual, i.e., both measurable and available to finance
expenditures of the fiscal period. Revenues are considered available when they are collectible within the
current period or soon enough thereafter to be pay liabilities of the current period. For this purpose, the
government considers revenues 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, claims and
judgments, are recorded only when the payment is due.
Property taxes, franchise taxes, sales tax, industrial payments, 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. Only the portion of special assessments receivable due within the current period is
considered to be susceptible to accrual as revenue of the current period. All other revenue items are
considered to be measurable and available only when cash is received by the government.
The City reports the following major governmental funds:
•
The General Fund is the government's primary operating fund. It accounts for all financial resources
of the general government, except those required to be accounted for in another fund.
The Capital Improvement Fund accounts for the financial resources to be used for the construction or
acquisition of major capital facilities (other than those financed by proprietary funds or trust funds).
23
SEPTEMBER 30, 2010
The Debt Service Fund accounts for the resources accumulated and payments made for principal
and interest on long-term general obligation debt of governmental funds.
The Hazard Mitigation Fund accounts for insurance proceeds and grants to be used for the purpose
of removing debris and replacing and/or repairing items damaged or destroyed during hurricanes and
to provide for mitigation improvements to protect and preserve the assets of the City from future
natural disasters of this type.
The Port Security Fund accounts for federal grants and matching contributions for improvements and
equipment authorized by the Department of Homeland Security Infrastructure Protection program.
The City reports the following major proprietary funds:
The Water and Sewer Fund accounts for the water and sewer utility operations of the City. This fund
includes water treatment and distribution, wastewater collection and treatment, and the related
revenue collection activity.
The Sanitation Fund accounts for solid waste disposal services for residents and commercial
businesses.
The Leased Building Fund accounts for revenue from the United States Postal Service for rental of
the City's building and other lease revenue for City owned real property.
Additionally, the City reports the following fund types:
The Internal Service Fund accounts for employee benefits provided to departments of the City on a
cost reimbursement basis.
Fiduciary Funds account for amounts employees have placed in a trustee or agency capacity for
certain activities and therefore cannot be used to support the general programs of the government.
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally
are followed in both the government-wide and proprietary fund financial statements to the extent that those
standards do not conflict with or contradict guidance of the GASB. Governments also have the option of
following the subsequent private-sector guidance for their business-like activities and enterprise funds,
subject to this same limitation. The City has elected not to follow subsequent private-sector guidance.
Amounts reported as 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. Internally
dedicated resources are reported as general revenue rather than as program revenue. Likewise, general
revenue includes all taxes.
Proprietary funds distinguish operating revenue and' expense 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 principle ongoing operations. The principle operating revenue of the Water and Sewer
Fund, and the Sanitation Fund are charges to customers for sales and services. 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 revenue and expenses.
24
SEPTEMBER 30, 2010
D. Assets, Liabilities, and Net Assets or Equity
1.
Deposits and Investments
The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term
investments with original maturities of three months or less from the date of acquisition. Statutes of the State
of Texas and policies adopted by City Council authorize the City to invest in obligations of the U.S. Treasury,
securities issued by U.S. government agencies, certificates of deposit, and local government investment
pools.
2.
Property Taxes
Property appraisal within the City is the responsibility of the Jefferson County Appraisal District. The
Appraisal district is required under the Property Tax Code to appraise all property within the county on the
basis of 100% of its market value.
The City's property taxes are levied annually in October on the basis of the Appraisal District's assessed
values as of January 1 of that calendar year. Taxes are applicable to the fiscal year in which they are levied.
They become delinquent, with an enforceable lien on property, on February 1 of the subsequent calendar
year. The City has contracted with the Jefferson County Tax Assessor-Collector for property tax billing and
collection.
3.
Receivables
All receivables are reported at their gross value and, where appropriate, are reduced by the estimated
portion that is expected to be uncollectible. Estimated revenues from the Water and Sewer Fund are
recognized at the end of each fiscal year on a pro rata basis. The estimated amount is based on billings
during the month following the close of the fiscal year.
4. Interfund 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" (i.e., the non-current portion of
interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All
other outstanding balances between funds are reported as "due to/from other funds".
5. Inventories and Prepaid Items
Inventories are valued at cost using the first in/first out (FIFO) method. The costs of governmental fund-type
inventories are recorded as expenditures when consumed rather than when purchased. Certain payments to
vendors reflect costs applicable to future accounting periods and are recorded as prepaid items.
6. Restricted Assets
The refundable customer advance payments account is used to account for customer meter deposits held on
behalf of water customers and recorded as a liability of the Water and Sewer Fund.
7. Capital Assets
Capital assets which include property, plant, equipment, and infrastructure assets (e.g. streets, water
lines, sidewalks and similar items) are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements. Capital assets are defined by the government as
25
SEPTEMBER 30, 2010
7. Capital Assets, Continued
assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of two years.
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed.
Donated capital assets are recorded at estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
assets lives are not capitalized. When assets are retired or otherwise disposed of, the related costs or
other recorded amounts are removed.
Property, plant, and equipment of the City are depreciated using the straight-line method over estimated
useful lives as follows:
Assets
Buildings
Building Improvements
System Improvements
Vehicles
Operating Equipment
Computer Equipment
Years
50
20-80
40-80
5-10
5-10
3-5
8. Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused sick pay benefits. No liability is
reported for unpaid accumulated sick leave in the governmental or enterprise funds.
The City has established the sick leave fund to account for this liability and the assets reserved for the
payment of these benefits. These assets total $4. Upon retirement, employees are entitled to 100% of
their accrued sick leave benefits to a maximum of 180 days. As of September 30, 2010, the liability for
accrued sick leave was approximately $1,380,098 as indicated in the Internal Service Fund. The amount
expected to be paid from current resources was $ 275,500.
9. Long-term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial statements,
long-term debt and other long-term obligations are reported as liabilities in the applicable governmental
activities or proprietary fund type 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.
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 fund types recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. The face amount of debt issued is reported as
other financing sources. Premiums received on debt issuances are reported as other financing sources
while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt service expenditures.
10. Fund Equity
In the fund financial statements, governmental funds report reserves of fund balance for amounts that are not
available for appropriation or are legally restricted by outside parties for use for a specific purpose.
Designations of fund balance represent tentative management plans that are subject to change.
26
SEPTEMBER 30, 2010
NOTE 2: STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. Budgetary Information
Annual budgets are adopted on a basis consistent with GAAP for all governmental fund types of the
primary government except special revenue and capital project funds, which are unbudgeted. All annual
appropriations lapse at fiscal year-end. The City also budgets the Water and Sewer Fund and Sanitation
Fund for fiscal control.
On or before August 15, the City Manager submits to the City Council a proposed operating budget for the
fiscal year commencing October 1. The operating budget includes proposed expenditures and the means
of financing them. Public hearings are conducted to obtain taxpayers' comments. Prior to October 1, the
budget is legally enacted through passage of an ordinance at the fund level. Transfers of appropriations
between departments require the approval of the City Council, although certain budgetary adjustments with
in departments may be authorized by the City Manager. Formal integration is employed as a management
control device during the year for the General Fund and Debt Service Fund. Any amendments are
submitted by the City Manager to the City Council for appropriate action. All budgets are adopted on a
basis consistent with GAAP except that depreciation is not budgeted in the enterprise funds and capital
outlay is recorded at cost in the year of acquisition. All budgeted appropriations lapse at fiscal year-end
and may not be carried over to the following year. All budgets are as originally adopted and as amended by
the City Council.
Encumbrance accounting is employed in governmental funds. Outstanding encumbrances (e.g. purchase
orders and contracts) lapse at fiscal year-end. Encumbrances do not constitute expenditures or liabilities
because the commitments will be reappropriated and honored during the subsequent year.
B. Deficit Fund Equity
The Sick Leave Fund had a deficit in net assets of ($1,380,094) at September 30, 2010. The Sick
Leave Fund is an internal service fund established to account for the liability for employees' accrued
compensated absences.
The City transfers funds from the General, Water and Sewer, and Sanitation funds to the Internal Service
Fund for the liability related to accrued compensated absences (Sick Leave Fund). At fiscal year end, the
balance in the fund was $4. The City plans to review the policy related to Sick Leave compensation for
retirees and address the challenge of funding this liability in the context of the overall increase in benefit
costs.
NOTE 3: DETAILED NOTE ON ALL FUNDS
A. Deposits and Investments
Cash Deposits
At September 30, 2010, the City's carrying amount of deposits (including PNEDC) was $11,668,469 and
the bank balance was $13,651,930. Of the bank balance, $250,000 was covered by federal depository
insurance or collateral held by the City's agent in the City's name. The remaining balance was
collateralized with securities held by the pledging financial institution's trust department or agent in the
City's name. Evidence of collateral is maintained and reviewed by the City to assure that the market value
of pledged securities exceeds 102% of deposits.
27
SEPTEMBER 30, 2010
NOTE 3: DETAILED NOTE ON ALL FUNDS, Continued
A. Deposits and Investments, Continued
Custodial credit risk for deposits is the risk that, in the event of a bank failure, the government's deposits may
not be returned to it. It is the policy of the City to require that all deposits not covered by FDIC insurance be
fully collateralized with securities held by the bank's agent in the City's name.
Interest rate risk: In accordance with the investment policy, the City manages exposure to declines in fair
value by investing in interest bearing demand deposits.
Restricted Assets
Funds set aside for payment of enterprise fund customer deposits and certain improvements to the water
and sewer systems are classified as restricted assets since their use is limited by applicable bond indentures
and by City Council action. Components of restricted assets are as follows:
Cash
Water and Sewer
Improvements
771,483
$
Totals
$
771,483
$
$
Customer
Deposits
417,367
Total
1,188,850
417,367
1,188,850
B. Receivables
Receivables as of September 30, 2010, for the government's individual major funds and nonmajor,
internal service and fiduciary funds in the aggregate, including the applicable allowances for uncollectible
accounts, are as follows:
Taxes
General
Fund
Debt
Service
$ 118,511
$ 96,963
Water and
Sewer
$
Sanitation
$
-
Other Funds
Grant Receivables
241,295
Other Receivables
Gross Receivables
Less: Allowance for
Uncollectibles
Net Total
Receivables
$
$
118,511
_17,1
$
80,823
298,010
133,560
96,963
298,010
133,560
(30,836)
(1128)
(271)
293,272
$ 133,289
$ 66,127
$
Total
215,474
241,295
431,570
241,295
888,339
(73,533)
$
241,295
$
814,806
Accounts receivable utility service charges are recognized when earned with no allowance for uncollectible
amounts since customer deposits are held against uncollectible amounts. An estimated amount has been
recorded for services rendered, but not yet billed at the close of the years involved.
28
SEPTEMBER 30, 2010
B. Receivables, Continued
Governmental funds report deferred revenue in connection with receivables for revenues that are not
considered to be available to liquidate liabilities of the current period. Governmental funds also defer
revenue recognition in connection with resources that have been received, but not yet earned. At the end
of the current fiscal year, the various components of deferred revenue and unearned revenue reported in
the governmental funds were as follows:
Delinquent Property Taxes Receivable (General Fund)
Delinquent Property Taxes Receivable (Debt Service Fund)
Total DeferredRevenue for Governmental Funds
$
72,534
59,269
131,803
C. Capital Assets
Capital asset activity for the governmental activities for the year ended September 30, 2010 was as
follows:
Capital Assets, Not Being
Depreciated:
Land
Total Capital Assets, Not Being
Depreciated
Beginning
Balance
$
Current Year
Increases
Decreases
9,134,749
$
Ending
Balance
9,134,749
9,134,749
9,134,749
6,901,750
13,401 ,933
6,273,916
1,894,139
671,930
6,901,750
13,401,933
6,945,846
1,894,139
Capital Assets, Being Depreciated:
Infrastructure
Vehicles
Total Capital Assets, Being
Depreciated:
28,471,738
671,930
29,143,668
Less Accumulated Depreciation:
Infrastructure
Vehicles
Total Accumulated Depreciation
(2,637,859)
(3,316,381)
(833,662)
(1,097,608)
(7,885,510)
(192,436)
(334,782)
(92,612)
(104,814)
(724,644)
(2,830,295)
(3,651,163)
(926,274)
(1,202,422)
(8,610,154)
20,586,228
(52,714)
20,533,514
Depreciated, Net
Governmental Activities Capital
Assets, Net
$ 29,720,977
29
$
(52,714)
$
$ 29,668,263
SEPTEMBER 30, 2010
C. Capital Assets, Continued
Depreciation expense of the governmental activities was charged to functions/programs as follows:
$
General Govern me nt
Public Safety
Public Works
Community Enrichment
Total Depreciation Expense - Governmental Activities
Business-Type Adivities
Capital Assets, Not Being
Depreciated:
Land
Total Capital Assets, Not Being
Depredated:
$
Beginning
Balance
51,640
119,480
426,273
120,047
58,845
724,646
Current Year
Increases
Decreases
$
Ending
Balance
$
1,330,632
51,640
1,330,632
51,640
1,330,632
1,382,272
39,465,927
12,251,341
226,72
124,106
39,465,927
12,354,007
Depredated:
51,717,268
226,772
124,106
51,819,934
Less Accumulated Depredation:
Total Accumulated Depreciation
(10,778,614)
(4,280,542)
(15,059,156)
(700,885)
(338,989)
(1,039,874)
Depreciated, Net
36,658,112
(813,102)
124,106
35,720,904
Business Activities Capital Assets, Net $ 36,709,752
$ 517,530
$ 124,106
$ 37,103,176
Capital Assets, Being Depreciated:
30
(11,479,499)
(4,619,531)
(16,099,030)
SEPTEMBER 30, 2010
D. Interfund Payables, Receivables and Transfers
Interfund balances resulted from a time lag between the dates when (1) interfund goods and services are
provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3)
payments between funds are made. These balances also include the amount of working capital loans made
from the General Fund and Debt Service Fund that are expected to be collected in the subsequent year. The
composition of interfund balances as of September 30, 2010 is as follows:
Receivable Fund
Payable Fund
Amount
Capital Improvements
Hurricane Recovery
$ 209,815
Debt Service Fund
General Fund
$ 89,584
Interfund transfers are budgeted cost allocations and reimbursements between funds for items such as
administrative and insurance reimbursements. Certain transfers also fund cash matches as required under
grants.
General Fund
Transfers out
General Fund
Water/ & Sewer
Sanitation
Sick Leave
Total
Sick Leave
$
250,000
56,000
306,000
Transfers in
Benefit Trust
$
50,000
42,500
92,500
Total
$
$
125,000
125,000
$
50,000
292,500
56,000
125,000
523,500
E. Long-Term Debt
The City issues general obligation bonds and certificates of obligation to provide funds for the acquisition
and construction of major capital facilities. General obligation bonds and certificates of obligation are
direct obligations and pledge the full faith and credit of the government.
General obligation bonds payable at September 30, 2010, are summarized as follows:
Date of
Issue
1999
2003
2005
2007
Original
Issue
$ 7,000,000
4,760,000
6,395,000
4,000,000
Final
Maturity
2014
2018
2012
2016
Annual
Installments
$125,000 to $650,000
$0 to $1,125,000
$65,000 to $1,350,000
$0 to $400,000
31
°A Rate
4.0%-6.0%
3.75%-4.0%
2.75% - 3.5%
4.0%
Outstanding
Balance
$ 2,450,000
4,760,000
1,755,000
4,000,000
$ 12,965,000
SEPTEMBER 30, 2010
E. Long-Term Debt, Continued
Annual debt service requirements to maturity for the bonds are as follows:
Year Ending
September 30,
2011
2012
2013
2014
2015-2018
Total
Principal
$
1,925,000
1,805,000
1,700,000
1,735,000
5,800,000
12,965,000
$
Interest
Total
505,088
434,838
364,662
296,662
513,787
2,115,037
2,430,088
2,239,838
2,064,662
2,031,662
6,313,787
15,080,037
$
Changes in long-term liabilities
Long-term liability activity for the year ended September 30, 2010, was as follows:
Beg ming
Balance
Govemmental Activities:
Bonds Payable:
General Obligation Bonds
Cerfiticats of Obligation
Total Bonds Payable
Compensated Absences
Long-TermLiabilibes
Business-Type Adivities:
Note Payable
Compensated Absences
Business-type Activity
Long-Term Liabilities
Additions
$
$ 10,805,000 $
4,030,030
14,805,030
953,419
78,602
$ 15,758,419 $
78,602
4,403
422,C2
$
426,495
Ending
Balance
Retirements/
Payments
1,840,000
$ 8,965,003 $ 1,925,000
4,000,003
12,965,003
929,159
1,840,003
102,862
$
1,942,8E2
Due With n
One Year
1,925,000
185,831
$ 13,894,159 $ 2,110,831
4,403
448,650
25,558
$
26,558
$
4,403
$
448,650
89,730
$
89,730
For the governmental activities, compensated absences are generally liquidated by the Internal Service Fund.
Arbitrage Rebate Liability
The Federal Tax Reform Act of 1986 requires issuers of tax-exempt debt to make payments to the United
States Treasury for investment income received at yields that exceed the issuer's tax exempt borrowing
rates. The Treasury requires payment for each issue every five years. The estimated liability is updated
annually for all tax-exempt issuances or changes in yields until such time payment of the calculated
liability is due. The City had no arbitrage liability as of September 30, 2010.
32
SEPTEMBER 30, 2010
E. Long-Term Debt, Continued
Port Neches Economic Development Corporation Sales Tax Revenue Bond
The Port Neches Economic Development (PNEDC) issued Certificates of Obligation, Series 2007 to
provide funds for the acquisition of land for parks and park facilities, open space improvements, and
related store, restaurant, concession and automobile parking facilities within the City or any other use of
the Corporation permitted by law and to pay the cost of the issuance of the bonds. This issue, $2.9
million, pledged the sales tax revenue of the PNEDC. The issue is payable at $50,000 to $180,000,
3.65% to 4.25% to 2031, the balance outstanding at September 30, 2010 is $2,620,000 with $85,000 due
within one (1) year.
NOTE 4: OTHER INFORMATION
A. Risk Management
The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets;
errors and omissions; and natural disasters for which the City obtains insurance coverage through
commercial insurance carriers. The City obtained general liability coverage by joining with other
governmental entities in the Texas Municipal League Intergovernmental Risk Pool (TML). Worker's
compensation, property, and auto liability insurance are also covered through participation in this public entity
risk pool, where risk is transferred to the pool within policy limits purchased. There were no significant
reductions in commercial insurance coverage and the amount of settled claims did not exceed insurance
coverage in any of the past three years.
B. Contingent Liabilities
The City is defendant in various lawsuits arising in the ordinary course of its municipal and enterprise
activities. In the opinion of City management, the outcome of all pending litigation will not materially affect the
financial position of the City. Amounts received or receivable from grantor agencies are subject to audit and
adjustment by grantor agencies, principally the federal government. Any disallowed claims, including
amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of
expenditures which may be disallowed by the grantor cannot be determined at this time although the City
expects such amounts, if any, to be immaterial.
NOTE 5: DEFFERED COMPENSATION PLAN
The City offers its employees a deferred compensation plan created in accordance with Internal Revenue
Code Section 457. The plan is administered by the International City Management Association Retirement
Corporation (ICMARC). All assets and income are held in trust for the exclusive benefit of participants and
their beneficiaries; therefore, it is not reported in the financial statements of the City. Assets and liabilities are
not included in the City's basic financial statements.
The plan, available to all full-time City employees, permits them to defer a portion of their salary until future
years. The deferred compensation is not available to employees until termination, retirement, death, or
unforeseeable emergency. The City provides a 50% match to this elective deferral not to exceed 4% of total
gross wages.
33
SEPTEMBER 30, 2010
NOTE 6: PENSION PLAN
Texas Municipal Retirement System (TMRS)
Plan Description. The City of Port Neches provides pension benefits for all of 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 statutes of TMRS.
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 .
The plan provisions are adopted by the governing body of the City, within the options available in the state
statutes governing TMRS. Plan provisions for the City were as follows:
•
•
•
•
Employee Deposit Rate:
Matching Ratio (City to Employee)
Years required for vesting
•
Updated Service Credit
Annuity Increase (to retirees)
•
Service retirement eligibility
(expressed as age/years of service)
Plan Year 2010
Plan Year 2009
7.00%
2 to 1
10 years
60/10; any age/20
7.00%
2 to 1
10 years
60/10; any age/20
100% Repeating, Transfers
70% of CPI Repeating
100% Repeating, Transfers
70% of CPI Repeating
Benefits. Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the
City-financed monetary credits, with interest. At the date the plan began, the City granted monetary credits
for service rendered before the plan began of a theoretical amount at least equal to two times what would
have been contributed by the employee with interest, prior to establishment of the plan. Monetary credits for
service since the plan began are a percent (100%, 150%, or 200%) of the employee's accumulated
contributions. In addition, the City can grant, as often as annually, another type of monetary credit referred to
as an updated service credit. This is a theoretical amount which, when added to the employee's
accumulated contributions and the monetary credits for service since the plan began, would be the total
monetary credits and employee contributions accumulated with interest if the current employee contribution
rate and City matching percent had always been in existence and if the employee's salary had always been
the average of his salary in the last three years that are one year before the effective date. At retirement, the
benefit is calculated as if the sum of the employee's accumulated contributions with interest and the
employer-financed monetary credits with interest were used to purchase an annuity.
Contributions. Under the State law governing TMRS, the contribution rate for each city is determined
annually by the actuary, using the Projected Unit Credit actuarial cost method. This rate consists of the
normal cost contribution rate and the prior service cost contribution rate, which is calculated to be a level
percent of payroll from year to year. The normal cost contribution rate finances the portion of an active
member's projected benefit allocated annually; the prior, service contribution rate amortizes the unfunded
(overfunded) actuarial liability (asset) over the applicable period for that city. Both the normal cost and prior
service contribution rates include recognition of the projected impact of annually repeating benefits, such as
Updated Service Credits and Annuity Increases.
The City contributed to the TMRS Plan at an actuarially determined rate. Both the employees and the City
make contributions monthly. Since the City needs to know its contribution rate in advance for budgetary
purposes, there is a one-year delay between the actuarial valuation that serves as the basis for the rate and
34
SEPTEMBER 30, 2010
NOTE 6: PENSION PLAN, continued
the calendar year when the rate goes into effect. The annual pension cost and net pension obligation are as
follows:
Annual Required Contribution (ARC) Interest on Net Pension Obligation
Adjustment to the ARC
Annual Pension Cost (APC)
Contributions Made
Increase in Net Pension Obligation
Net Pension Obligation, beginning
Net Pension Obligation, end of year
Fiscal
Year
2006
2007
2008
2009
2010
Annual Pension
Cost (APC)
850,689
827,513
965,407
1,340,463
1,452,321
$ 1,452,321
1,452,321
(1,017,270)
435,051
279,820
714,871
$ Actual Contribution Percentage of APC
Made
Contribution
850,689
100%
827,513
100%
965,407
100%
1,060,643
79%
1,017,270
70%
Net Pension
Obligation
279,820
435,051
Annual
Required
Contribution Rate
17.40%
18.07%
19.43%
28.41%
28.92%
The required contribution rates for fiscal year 2010 were determined as part of the December 31, 2008.
Additional information as of the latest actuarial valuation, December 31, 2008, also follows:
Actuarial Valuation Date
Actuarial Cost Method
Amortization Method
Remaining Amortization Method
Asset Valuation Method
Investment Rate of Return
Projected Salary Increases
Inflation
Cost of living adjustments
December 31, 2008
Projected Unit Credit
Level Percent of Payroll
29 Years - Closed Period
Amortized Cost
7.5%
Varies by age and service
3.0%
2.1% (3.0% CPI)
December 31, 2007
Projected Unit Credit
30 Years - Closed Period
Amortized Cost
7.0%
3.0%
2.1% (3.0% CPI)
December 31, 2006
Unit Credit
25 Years - Open Period
Amortized Cost
7.0%
3.0%
None
A Schedule of Funding Information is as follows:
Actuarial Valuation Date
Actuarial Value of Assets
Actuarial Accrued liability (AAL)
Unfunded/(Overfunded) Actuarial
Accrued Liability (UAAL or OAAL)
Funded Ratio
Annual Covered Payroll (Actuarial)
UAAL or OAAL as % of Covered Payroll
December 31, 2009
$
16,734,863
23,095,670
$
$
$
6,360,807
72.5%
5,210,343
220.8%
35
December 31, 2008
$
17,868,246
29,657,727
$
$
$
11,789,481
60.2%
5,182,310
227.5%
December 31, 2007
$
16,090,451
27,106,173
$
$
11,015,722
59.4%
4,473,679
246.2%
SEPTEMBER 30, 2010
NOTE 7: OTHER POST EMPLOYMENT BENEFITS
A. Program Description
In addition to the pension benefits described in this note, the City provides for payment of premiums for
health, life, and dental insurance coverage in accordance with City policies. The definition of a retiree in the
policy reads: "Any employee who withdraws from service and 1) has completed a minimum of five years
service with the City, and 2) is eligible for retirement under the provisions of the City's retirement plan." For
financial reporting purposes the Retiree Health Program costs are accounted for in the Employee Benefit
Trust.
Plan Description. The City provides post-retirement life insurance, dental insurance, and medical
insurance benefits for retirees who have completed a minimum of five years of service with the City and
who are eligible to retire under the provisions of the Texas Municipal Retirement System (TMRS). TMRS
requires either ten years of service and an attained age of 60 or above at retirement or twenty years of
service at any age. Dependent family members are eligible to remain in the dental and medical plans, if at
the time of the employee's retirement they were covered by the City's health plan. As of December 31,
2009 there were 92 active employees and 44 retirees and their dependents receiving the benefits.
All of the plans are fully insured with insurance companies. The plans provide for separate rate schedules
for active employees and retirees. The City contributes 100% of the retiree premiums for retirees under
age 65 choosing the Standard medical plan. Retirees choosing the Premium medical plan are expected
to pay the difference in premiums between the two plans. Retirees age 65 and older are provided with a
choice of Medicare Supplement policies for which the City's monthly contribution was $189.75 at the time
of the most recent actuarial valuation. The City contributes 100% of the dental premiums and life
insurance premiums for retirees. Retirees are expected to pay 100% of the premiums for dependents
remaining in the medical and dental plans. The contribution requirements of the City are established by
and may be amended by the City Council. For the fiscal year ending September 30, 2010, the City
contributed $198,111 toward the cost of retiree insurance premiums.
B. Funding Policy
The plan's premium rates are determined annually by City management and approved by the City Council.
For the 2010 fiscal year, members receiving medical benefits contribute $0 per month for retiree-only health
coverage. The City employs a pay-as-you go method and ensures that the annual employer contributions
are equal to the benefits paid on behalf of the retirees.
The City currently pays for post-employment health care benefits on a pay-as-you-go basis and these
financial statements assume that this funding method will continue for the near future.
Funded Status and Funding Progress. As of October1, 2009, the most recent actuarial valuation date, the
funded status of the plan was as follows:
Actuarial Accrued Liability
(AAL)
Active employees $5,366,612
Retired employees
4,018,911
Unfunded actuarial
accrued liability $9,385,523
Funded ratio 0%
Covered payroll
$5,021,000
Unfunded actuarial accrued liability
as a
186%
Percentage of covered payroll
36
SEPTEMBER 30, 2010
Annual OPEB Cost and Net OPEB Obligation.
The City's annual other post-employment benefit (OPEB) cost (expense) is calculated based on the
annual required contribution of the employer (ARC), an amount actuarially determined in accordance with
the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing
basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities over
a period not to exceed 30 years. The following table reflects the components of the City's annual OPEB
cost for the year, the amount actually contributed to the plan, and the net OPEB obligation at the end of
the year.
Normal cost
Amortization of unfunded actuarial accrued liability
(UAAL) over 30 years
Annual required contribution (ARC)
Contributions for year ended September 30, 2010
Increase in net OPEB obligation
Net OPEB obligation — Beginning of year
Net OPEB obligation — End of year
Percentage of Annual OPEB Cost paid
$382,046
551.380
933,426
(198.111)
735,315
0
$735,315
21.2%
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan, as understood
by the City and the 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 City and plan members at that point. The
actuarial calculations reflect a long-term perspective and employ methods and assumptions that are
designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets.
The City had an actuarial study performed as of October 1, 2009. The actuarial valuation method utilized
was the unit credit cost method. The allocation of the total liability into past and future service cost was
based upon a straight years of service ratio. The retirement age used assumes a weighted average
expected retirement age based on termination rate assumptions. The actuarial assumptions utilized a
four and one-half percent discount rate and an annual healthcare cost trend rate of ten percent initially,
reduced to an ultimate rate of five percent after 10 years. The accrued liability was assumed to be
amortized over a 30-year period for the fiscal year ending September 30, 2010.
The City transferred $125,000 previously designated for OPEB from the Internal Service Fund to the
Employee Benefit Trust during the fiscal year ended 2010.
NOTE 8: SUBSEQUENT EVENTS
On March 17th, 2011 the City issued $4,300,000 in Certificates of Obligation to fund infrastructure
improvements and related public works projects and to provide matching grant funds for a new City
Hall/Emergency Operations center.
37
EXHIBIT J
REQUIRED SUPPLEMENTARY INFORMATION
FUNDING PROGRAMS FOR EMPLOYEE RETIREMENT SYSTEMS/OPEB
TEXAS MUNICIPAL RETIREMENT SYSTEM ANALYSIS OF FUNDING PROGRESS
Actuarial
Accrued
Liability
(AAL) Unit
Credit
Fiscal
Year
Actuarial
Value of
Assets
1999 $
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
11,645,709 $
13,201,344
14,203,998
. 15,857,504
17,207,626
17,905,425
18,161,981
16,305,222
16,688,762
16,090,451
17,868,246
16,734,863
Percentage
Funded
14,925,748 $
17,706,968
18,998,927
20,902,968
23,041,063
23,085,450
23,933,151
22,504,934
23,309,040
27,106,173
29,657,727
23,095,670
78.02% $
74.55%
74.76%
75.86%
74.68%
77.56%
75.89%
72.45%
71.60% 59.40%
60.20%
72.50%
Unfunded
ML (UAAL)
3,280,039 $
4,505,624
4,794,929
5,045,464
5,833,437
5,801,325
5,771,170
6,199,712
6,620,278
11,015,722
11,789,481
6,360,807
Annual
Covered
Payroll
3,722,738 $
3,978,818
4,067,740
4,317,535
4,293,158
4,455,385
4,819,408
4,740,894
4,415,028
4,473,679
5,182,310
5,210,343
Other Post Employment Benefits Schedule of Funding Progress
Actuarial
Valuation
Date
Actuarial
Value of
Assets
(a)
Actuarial
Accrued
Liability (b)
Unfunded
ML (UAAL)
(b-a)
Funde
d
Ratio
(a/b)
Covered
Payroll (c)
10/01/09
$0
$9,385,523
$9,385,523
0
$5,021,000
UAAL as a
Percentage
of Covered
Payroll ((ba)/c)
186%
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 healthcare cost trend. Amounts determined regarding the funded status of
the plan and the annual required contributions of the employer are subject to continual revision as actual
results are compared with past expectations and new estimates are made about the future. The schedule of
funding progress, presented as required supplementary information following the notes to the financial
statements, will present multiyear trend information about whether the actuarial value of plan assets is
increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. However, since
this is the first year of implementation, there is no trend information to report.
38
Unfunded
Excess as a
Percentage of
Covered
Payroll
88.11%
113.24%
117.88%
116.86%
135.88%
130.21%
119.75%
130.77%
149.95%
246.20%
227.50%
122.08%
COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
EXHIBIT K
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2010
Special Revenue
Senior
Citizens
Association
Asset
Forfeiture
Library
Improvements
Total
Other
Governmental
Funds
ASSETS
Investments
Interest receivable
Grant receivables
Total Assets
$
152,199
16,834
$
27,462
$
196,495
$
152,199
16,834
$
27,462
$
196,495
815
$
1,788
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Due to other funds
Total Liabilities
973
973
Fund Balances:
Reserved for:
Capital projects
Drug enforcement
Unreserved
Total Fund Balances
Total Liabilities and Fund
Balances
$
815
1,788
26,647
26,647
151,226
43,481
194,707
151,226
16,834
16,834
151,226
$
152,199
39
$
16,834
$
27,462
$
196,495
EXHIBIT L
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
REVENUES
Interest
Private contributions and grants
Miscellaneous income
Total Revenue
EXPENDITURES
Current:
Public safety
Contingent
Total Expenditures
Asset
Forfeiture
Senior
Citizens
Association
$
$
346
Library
Improvements
Total
Other
Governmental
Funds
$
503
7,684
63
46,460
8,187
46,523
912
54,144
1,850
56,906
8,928
33,023
2,366
41,951
2,366
8,928
33,023
44,317
(170)
(741)
13,500
12,589
(170)
(741)
13,500
12,589
151,396
17,575
13,147
182,118
$ 151,226
$ 16,834
26,647
1,850
2,196
2,366
Transfers In
Transfers Out
FUND BALANCES AT END OF YEAR
40
$
194,707
EXHIBIT M
COMBINING STATEMENT OF FIDUCIARY NET ASSETS AND LIABILITIES
AGENCY FUNDS
SEPTEMBER 30, 2010
Employee
Activity
Fund
Employee
Benefit
Trust Fund
Totals
ASSETS
Cash
Prepaid
Total Assets
$
178,150
$
100
$ 178,250
$
178,150
$
100
$ 178,250
$
$
161
177,989
178,150
LIABILITIES
Accounts payable
Due to employee groups
Total Liabilities
41
100
100
$
161
178,089
$ 178,250
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
AGENCY FUNDS
EXHIBIT N
ASSETS
EMPLOYEE ACTIVITY FUND
Balance at October 1, 2009
Additions
Deductions
Balance at September 30, 2010
EMPLOYEE BENEFIT TRUST FUND
Balance at October 1, 2009
Additions
Deductions
Balance at September 30, 2010
Investments
LIABILITIES
Due to
Others
$
1,174
101
(1,175)
100
$
15,629
1,281,900
(1,119,540)
$ 177,989
$
$
42
$
1,174
101
(1,175)
100
15,951
1,281,900
(1,119,541)
$ 178,310
EXHIBIT 0
CITY OF PORT NECHES, TEXAS DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
Variance
Positive
(Negative)
Orginal
and Final
Budget
Actual
Amounts
$ 2,490,900
$ 2,492,632
25,000
2,515,900
7,363
2,499,995
1,732
(17,637)
(15,905)
1,840,000
675,900
2,515,900
1,840,000
573,863
2,413,863
102,037
102,037
86,132
86,132
86,132
86,132
REVENUES
Interest
Total Revenue
EXPENDITURES
Debt service:
Total Expenditures
FUND BALANCE AT END OF YEAR
43
1,410,530
1,410,530
$ 1,410,530
$ 1,496,662
$
86,132
STATISTICAL SECTION
STATISTICAL SECTION
This part of the City of Port Neches, Texas' comprehensive annual financial report presents detailed
information as a context for understanding what the information in the financial statements, note
disclosures, and required supplementary information states about the government's overall financial
condition.
Contents
Page
Financial Trends
44
These schedules contain trend information to help the reader understand how
the government's financial performance and well-being have changed over
time.
Revenue Capacity
49
These schedules contain information to help the reader assess the
government's most significant local revenue source, the property tax.
Debt Capacity
53
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.
Demographic and Economic Information
59
These schedules offer demographic and economic indicators to help the
reader understand the environment within which the government's financial
activities take place.
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.
61
SCHEDULE I
NET ASSETS BY COMPONENT
LAST SEVEN FISCAL YEARS (1)
(ACCRUAL BASIS OF ACCOUNTING)
Restricted
Unrestricted
Total governmental activities net assets
Business-Type Activities
Restricted
Unrestricted
Total Business-Type activities net assets
Primary Government
Restricted
Unrestricted
Total primary government net assets
$
$
2004
2,749,227
3,492,215
420,907
6,662,349
$
$
2005
3,366,909
3,272,116
1,006,563
$
2006
2,087,410
3,873,015
4,777,443
$
2007
5,346,068
2,772,071
5,532,278
2008
13,647,633
4,127,728
5,022,831
$
2009
14,937,297
4,008,701
5,601,574
2010
$ 16,750,017
3,957,542
2,997,408
7,645,588
$ 10,737,868
$ 13,650,417
$
22,798,192
$
24,547,572
$ 23,704,967
$
36,712,187
2,625,243
1,517,739
$
36,709,752
2,625,243
876,664
$ 37,103,176
$ 35,534,720
$ 36,437,305
$ 37,165,343
4,120,559
1,202,095
5,536,271
1,252,923
2,065,635
3,441,475
1,408,659
$ 40,345,538
$ 41,070,991
$ 39,755,863
$ 42,015,477
$
40,855,169
$
40,211,659
$ 39,099,455
$ 37,772,111
$ 38,901,629
$ 38,524,715
$ 42,511,411
$
5,125,938
6,843,078
6,213,546
6,940,937
51,647,049
6,633,944
6,478,238
$ 53,853,193
3,272,116
6,542,834
50,359,820
6,752,971
6,540,570
$
7,612,774
1,623,002
$ 47,007,887
$ 48,716,579
$ 50,493,731
$ 55,665,894
63,653,361
$
64,759,231
$ 62,804,422
$ 35,022,884
(1) The requirement for statistical data is ten years; only seven years are available at this time.
44
$
771,483
1,224,796
4,729,025
4,222,204
SCHEDULE II
CHANGES IN NET ASSETS
Governmental activities
General government
Public safety
Public works
Contingent
Miscellaneous
Interest on long-term debt
Total governmental activities
Business-type activities
Water and sewer
Sanitation
Leased building
2010
2009
2008
2007
2005
2006
834,705
3,389,759
1,409,928
716,239
386,780
5,110
966,437
7,708,958
$ 1,282,051
$ 1,576,553
2,553,199
1,574,821
1,930,046
3,503,345
1,817,035
835,636
1,727,972
3,726,063
1,799,733
835,402
881,529
8,221,646
675,820
8,408,389
705,040
8,794,210
702,735
11,190,611
644,156
10,266,209
580,756
11,835,830
3,252,877
1,033,639
31,403
$ 4,317,919
3,218,715
952,894
31,801
$ 4,203,410
3,441,190
1,132,966
16,959
$ 4,591,115
3,976,837
1,129,795
26,973
$ 5,133,605
3,858,890
1,087,861
88,943
$ 5,035,694
3,873,146
1,100,067
18,215
4,991,428
4,124,445
1,057,741
15,850
$ 5,198,036
908,731
532,557
284,775
1,726,063
$
2,908,564
1,160,911
120,243
4 189,718
3,038,863
1,262,304
114,492
$ 4,415,659
5,915,781
5,447,502
2004
$
$
$
1,554,005
4,724,520
2,065,551
2,143,800
$
$
1,820,618
4,908,108
2,026,386
866,941
$
3,040,706
5,587,503
1,762,783
864,082
Program Revenues
Charges for services
Public safety
Public works
Community enrichment/general government Total governmental activities program revenues $
$
115,187
69,887
128,922
313,998
$
$
98,629
127,891
260,730
487,250
120,305
1,203,955
$
$ 1,324,260
$
$
136,242
1,144,027
1,280,269
$
2,589,080
976,112
103,342
3,668,534
$
$
6,697,364
142,384
160,548
7,000,298
$
2,631,022
1,176,263
126,530
3,933,815
$
$
$
658,093
99,479
274,271
1,031,843
Business activities
Charges for services
Water and sewer
Sanitation
Leased building
Total business-type activities program revenues $ 2,787,331
$ 2,596,947
$
963,658
96,743
$ 3,441,460
1,013,768
95,881
$ 3,898,980
976,924
96,742
$ 3,670,613
$
3,755,456
4,384,230
4,994,873
$ 2,381,059
Total primary government program revenues
Net (expense) revenue
Total primary government net expense Total primary government
Change in Net Assets .
Total primary government
4,948,803
$
10,934,111
$ (7,394,962)
$ (7,734,396)
$ (7,084,129)
$ (7,513,941)
$ (4,190,315)
$
(876,459)
$ (8,271,421)
(306,430)
$ (8,040,826)
(920,502)
$ (8,004,631)
(1,465,071)
$ (8,979,012)
(1,101,879)
$ (5,292,194)
$
$ 5,045,501
$ 5,177,842
$
2,002,699
658,778
562,658
340,921
55,535
51,545
2,15%782
740,301
677,252
481,362
93,739
212,071
5,069,430
3,018,416
791,136
646,474
512,050
2,718,496
358,659
$ 8,717,635
$ 9,542,349
$ 13,114,661
General Revenues and Other Changes in Net Assets
$ 5,083,900
2,079,237
Sales tax
872,784
569,259
Gross receipts tax
103,428
Interest
Other governments' agencies - unrestricted 80,380
208,222
Other miscellaneous
Transfers
Total government activities
$ 8,797,210
Interest
Other miscellaneous
Transfers
$
$
153,446
5,665
$
$
$
56,212
$
157,427
874,456
$
185,259
54,175
$
$
56,212
$ 1,031,883
$
239,434
$
$ 8,853,422
$ 9,749,518
$ 9,781,783
$ 13,398,668
$ 12,936,314
$
$ 1,402,248
$
983,239
725,453
$ 1,708,692
$ 2,458,220
$
5,600,720
(1,181,064)
$ 4,419,656
$
8,804,428
(1,160,308)
$ 7,644,120
$
$
(820 247)
582,001
(881,068)
$ 1,777,152
45
262,658
21,349
284,007
5,107,767
2,613,674
747,190
656,364
293,677
2,931,019
427,512
217,540
$ 12,994,743
$
$
(217,540)
$
(58,429)
$
$
(8,540,146)
(801,710)
(9,341,856)
5,457,878
2,880,889
877,877
629,012
53,396
295,474
95,000
10,289,526
36,257
216,943
(95,000)
158,200
10,447,726
1,749,380
(643,510)
1,105,870
$
$ (10,803,987)
(782,377)
$ (11,586,364)
$
$
$
$
$
5,529,448
2,250,790
794,369
815,179
24,653
198,443
348,500
9,961,382
9,473
9,199
(348,500)
(329,828)
9,631,554
(842,605)
(1,112,205)
$ (1,954,810)
$
GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE
LAST TEN FISCAL YEARS
(AMOUNTS EXPRESSED IN THOUSANDS)
Fiscal
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Property
Tax
4,644
4,732
4,868
5,084
5,046
5,178
5,072
5,108
5,458
5,529
In Lieu
of Tax
2,465
2,293
2,175
2,079
2,003
2,160
3,018
2,614
2,880
2,251
Sales
Tax
775
720
613
673
659
740
660
747
877
794
46
Franchise
Tax
673
546
569
569
563
- 677
646
656
629
809
SCHEDULE III
Total
8,557
8,291
8,225
8,405
8,271
8,755
9,396
9,125
9,844
9,383
SCHEDULE IV
FUND BALANCES OF GOVERNMENTAL FUNDS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
2004
General Fund
Reserved
Unreserved
Total general fund
All other governmental funds
Reserved
Unreserved, reported in:
Special revenue funds
Capital projects funds
Total all other governmental funds
$
$
2006
2005
28
6,207
6,235
$
$
3,794
29
5,348
5,377
$
53
4,535
4,588
$
3,805
$
$
$
57
4,265
4,322
2008
$
$
52
3,461
3,513
2010
2009
$
69
3,821
3,890
52
4,102
4,154
1,062
1,281
1,316
1,417
1,557
1,648
(1,523)
(461)
1,009
(1,256)
1,034
1,297
1,607
4,220
1,703
2,864
5,984
2,051
2,598
6,206
458
2,461
4,567
11
$
2007
$
47
$
$
$
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
Revenues
Property taxes
Sales tax
Gross receipts tax
Permits, licenses and fees
Fines
Insurance
Interest
Other governmental agencies
Grants and private contributions
Private contributions
Other miscellaneous
Total Revenues
2004
$ 5,022,222
2,079,237
672,784
569,259
69,889
115,189
Expenditures
Current
General government
Public safety
Public works
Contingent
Capital Outlay
Debt Service:
Issuance costs
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
Bonds issued
Payment of bond issuance costs
Transfers in
Transfers out
Total Other Financing Sources and Uses
Net Change in Fund Balance
Debt service as a % of noncapital expenditures
$
SCHEDULE V
98,675
80,380
2,649
59,328
208,222
8,977,834
2005
$ 4,993,441
2,002,699
658,776
562,658
127,891
98,629
_
329,565
55,535
260,730
51,545
9,141,469
2006
$ 5,208,267
2,159,782
740,301
677,252
131,326
120,305
_
473,033
93,739
2007
$ 5,022,601
3,018,416
791,136
646,474
78,593
136,242
271,135
508,980
2,718,496
1,072,629
212,071
10,888,705
763,821
3,187,967
986,001
768,481
346,352
586,408
615,233
3,450,574
1,277,393
821,740
486,189
5,460,421
1,300,000
966,437
8,905,467
1,375,000
881,529
100,697
14,468,776
72,367
(5,327,307)
45,338
(45,538)
(200)
6,395,000
(6,294,303)
289,785
(187,835)
202,647
72,167
$ (5,124,660) $
25.45%
16.29%
48
2009
$ 5,429,915
2,880,889
877,877
629,012
83,327
150,093
95,662
52,162
2010
$ 5,528,119
2,250,790
794,369
815,179
99,479
120,563
1,492,643
811,801
634,291
87,526
13,913,890
2008
$ 5,140,784
2,613,674
747,190
656,364
142,384
128,205
281,177
281,389
1,416,258
8,244,468
146,334
19,798,227
199,916
11,891,496
204,724
10,649,677
671,923
3,350,524
1,347,843
769,243
718,076
1,635,260
886,482
3,621,634
1,752,090
1,247,954
1,557,278
1,668
1,070,483
9,115,955
1,918,913
2,778,541
1,627,526
6,925,326
924,827
4,584,836
1,928,962
801,072
619,751
245,387
721,093
5,833,159
1,642,736
805,237
863,872
671,929
1,540,000
675,820
1,685,000
695,842
1,760,000
637,263
1,840,000
573,863
10,708,689
1,640,000
705,040
121,038
11,533,184
25,817,586
11,502,098
12,951,889
180,016
2,380,706
(6,019,359)
389,398
(2,302,212)
2,243,098
(1,716,088)
527,010
4,000,000
59,008
1,715,100
(5,388,245)
385,863
2,085,127
(2,036,287)
48,840
35,000
(72,000)
(37,000)
306,000
(50,000)
256,000
707,026
20.69%
$ 2,766,569
21.38%
$ (5,970,519)
9.22%
$
352,398
20.84% .
24,653
$ (2,046,212)
18.64%
ASSESED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN YEARS
UNAUDITED
TAX
YEAR
REAL
PROPERTY
LESS
EXEMPTIONS
REAL
PROPERTY
NET
SCHEDULE VI
PERSONAL
PROPERTY
NET
INDUSTRIAL
CONTRACTS
TOTAL
(%)
ASSESMENT
VALUE
ESTIMATED
ACTUAL
VALUE
2001-02 -
787,707,400
87,494,180
700,213,220
38,198,700
340,099,155
1,078,511,075
100
1,078,511,075
2002-03
902,026,280
158,568,936
743,457,344
44,844,600
308,035,163
1,095,882,847
100
1,095,882,847
2003-04
867,376,030
105,950,470
761,445,550
44,390,340
334,315,000
1,140,190,900
100
1,140,190,900
2004-05
867,396,030
154,603,360
712,792,670
53,217,100
284,474,335
1,050,484,105
100
1,050,484,105
2005-06
901,437,938
168,505,786
732,932,152
53,110,410
306,786,670
1,091,990,423
100
1,091,990,423
2006-07
839,748,040
160,151,640
679,596,400
67,247,410
407,894,070
1,154,737,880
100
1,154,737,880
2007-08
938,099,530
215,917,706
722,181,824
56,923,390
381,955,335
1,161,060,549
100
1,161,060,549
2008-09
1,043,311,945
265,015,892
778,296,053
55,356,865
414,581,844
1,248,234,762
100
1,248,234,762
2009-10
1,064,823,170
271,658,316
793,164,854
54,815,800
321,737,333
1,169,717,987
100
1,169,717,987
2010-11
1,024,094,270
244,390,822
779,703,448
59,944,330
341,095,125
1,180,742,903
100
1,180,742,903
Exemptions are primarily, on homestead property and for disabled persons or persons 65 years of
age or older. The homestead exemptions is 20% of apprasied value and the exemption for disabled
persons or for those 65 years of age or older is $16,600.
Source: Tax Roll
49
SCHEDULE VII
PROPERTY TAX RATES- DIRECT AND OVERLAPPING GOVERNMENTS
City Direct Rates
Fiscal
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
General
Fund
0.409551
0.372442
0.389290
0.392717
0.400721
0.389044
0.403201
0.373201
0.374546
0.383801
Overlapping Rates
Debt Service
Fund
Total City
Tax Rate
Jefferson
County
0.250449
0.296558
0.288710
0.282283
0.303279
0.314956
0.336799
0.329799
0.324954
0.315699
0.6600
0.6690
0.6780
0.6750
0.7040
0.7040
0.7400
0.7030
0.6995
0.6995
Source:Jefferson County
50
0.3650
0.3650
0.3650
0.3650
0.4250
0.4250
0.4000
0.3900
0.3650
0.3650
Drainage
District No. 7
0.1705
0.1705
0.1881
0.1881
0.1881
0.1790
0.1600
0.1458
0.1397
0.1389
PNGISD
1.67718
1.67718
1.65636
1.63300
1.62779
1.61900
1.47830
1.19250
1.28400
1.45495
Total
2.8727
2.8817
2.8875
2.8611
2.9449
2.9270
2.7783
2.4313
2.4882 2.6584
SCHEDULE VIII
PRINCIPAL TAXPAYERS
UNAUDITED
TAXPAYER
NATURE OF
PROPERTY
Huntsman Corporation
Chemical Plant
RBF Port Neches
BioFuel
Calabrian Corporation
Chemical Plant
TAX YEAR 2009
Percent of
Estimated
Assessed
Actual Value
Valuation
TAX YEAR 2010
Percent of
Estimated
Assessed
Actual Value
Valuation
$
$
134,415,790
11.49%
10,935,960
0.93%
6,400,870
0.51%
Entergy Gulf States
Utilities
5,810,730
0.47%
$
$
,
167,201,850
13.40%
6,021,000
0.48%
6,450,030
0.52%
TAX YEAR 2008
Percent of
Assessed
Estimated
Valuation
Actual Value
$ 189,418,230
16.32%
TAX YEAR 2007
Percent of
Assessed
Estimated
Valuation
Actual Value
$ 201,064,940
$ 243,030,780
22.26%
0.53%
5,371,240
0.49%
0.43%
17.41%
6,841,600
0.59%
6,118,650
5,285,990
0.42%
5,178,030
0.45%
4,882,640
0.42%
4,683,990
3,579,890
0.31%
3,261,230
0.28%
2,906,920
0.27%
-
3,060,850
0.27%
3,752,950
0.34%
2,254,800
0.21%
1,800,420
0.16%
M&E Food Mart, Inc. #2
Grocery Store
3,645,980
0.29%
3,407,130
0.27%
Texas Cable Partners
Utilities
2,919,660
0.23%
2,673,040
0.21%
Aron Housing Group LLC
Apartments
2,993,570
0.24%
2,480,460
0.20%
2,722,140
0.23%
2,590,370
0.22%
2,438,690
0.20%
2,595,180
0.22%
2,419,690
0.21%
2,716,200
0.22%
2,716,200
0.23%
2,020,930
0.18%
2,466,770
0.21%
1,979,710
0.17%
-
Texas Eastern Transmission Utilities
Salanor Investments, Inc.
Commercial
2,997,340
_
Fuller, Robert W & Esther V Commercial
Dunn Pallet Company
Neches Federal Credit Union Bank
Commercial
Mid County leathers CU
Compass Bank
Bank
Commercial
-
2,992,430
0.24%
3,101,090
0.25%
2,912,970
0.25%
2,680,970
0.21%
2,581,050
0.21%
2,740,220
0.24%
$
-
-
-
-
-
Total
Total Assessed Property Values
-
-
Commercial
Phelan, AM and Harry
0.24%
TAX YEAR 2006
Percent of
Estimated
Assessed
Valuation
Actual Value
-
1,644,240
1,418,170
0.15%
0.13%
175,793,300
15.03%
$
204,356,530
16.37%
$ 221,171,230
19.05%
$ 227,399,010
19.69%
$ 266,863,510
24.44%
1,169,717,987
100.0%
$
1,248,234,762
100.0%
$ 1,161,060,549
100.0%
$ 1,154,737,880
100.0%
$ 1,091,990,423
100.0%
Source: Jefferson County Appraisal District
City of Port Neches, Financal Data
51
Schedule IX
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN YEARS
CURRENT
YEAR
TAX LEVY
DELINQUENT
TAX
PERCENT OF
TOTAL TAX
COLLECTIONS
AT TOTAL
OUTSTANDING
DELINQUENT
TAXES
COLLECTIONS(1)
PERCENT
OF TAXES
COLLECTED
COLLECTIONS(1)
TOTAL
TAX
COLLECTIONS(1)
4,518,974
4,481,166
99:16%
27,222
4,508,388
99.4%
78,403
2001-02
4,669,288
4,631,570
99.19%
30,889
4,662,459
99.3%
85,232
2002-03
4,832,532
4,798,296
99.29%.
60,268
4,858,564
100.5%
118,302
2003-04
5,019,108
4,968,195
98.99%
52,545
5,020,740
100.0%
65,758
2004-05
4,922,010
4,920,472
99.97%
28,025
4,948,497
100.5%
79,372
2005-06
5,159,842
5,055,360
98.22%
48,560
5,103,920
98.9%
200,731
2006-07
5,027,000
4,967,067
98.81%
45,345
5,012,412
99.7%
135,528
2007-08
5,061,500
4,983,009
98.45%
73,307
5,056,316
99.9%
203,312
2008-09
5,424,766
5,326,687
98.19%
80,818
5,407,505
99.7%
207,632
2009-10
5,515,195
5,425,275
98.37%
53,852
5,479,127
99.3%
215,475
LEVY NET OF
ADJUSTMENTS(1)
2000-01
TAX YEAR
(1) Source:
City's detailed accounting records
Does not include penalties and interest.
52
TAX LEVY
RATIOS FOR OUTSTANDING DEBT BY TYPE
Fiscal
Year
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
Special
General
Obligation
Assesment
Bonds (1)
Bonds
$ 17,545,000
16,370,000
19,895,000
18,595,000
17,430,000
15,890,000
18,250,000
16,565,000
14,805,000
12,965,000
Schedule X
Business -type Activities
Capital
Leases
Sewer
Bonds
General
Obligation
Bonds
-
-
(1) Includes Certificates of Obligation
53
Capital
Leases
$
Total
Primary
Government
17,545,000
16,370,000
19,895,000
18,595,000
17,430,000
15,890,000
18,250,000
16,565,000
14,805,000
12,965,000
Percentage
of Personal
Income
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Per Capita
1,290
1,204
1,463
1,367
1,282
1,168
1,342
1,218
1,089
953
Schedule XI
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
Fiscal
Year
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
General
Obligation
Bonds (1)
17,545,000
16,370,000
19,895,000
18,595,000
17,430,000
15,890,000
18,250,000
16,565,000
14,805,000
12,965,000
Less: Amounts
Available in Debt
Service Fund
1,028,887
1,074,124
1,109,153
975,330
942,301
1,127,712
1,165,191
1,279,243
1,410,559
1,496,662
Total
16,516,113
15,295,876
18,785,847
17,619,670
16,487,699
14,762,288
17,084,809
15,285,757
13,394,441
11,468,338
(1) Includes Certificates of Obligation
54
Percentage of
Estimated
Actual Taxable
Value of
•
Property
1.51%
1.45%
1.74%
1.55%
1.57%
1.35%
1.48%
1.32%
1.07%
1.07%
Per
Capita
1,214
1,125
1,381
1,295
1,212
1,085
1,256
1,124
985
843
SCHEDULE XII
SCHEDULE OF DIRECT AND OVERLAPPING BONDED DEBT
ALL DIRECT AND OVERLAPPING GOVERNMENTS
SEPTEMBER 30, 2010
UNAUDITED
Jurisdiction
Overlapping
Jefferson County, Texas
Jefferson County Drainage District # 7
Nederland Independent
School District
Port Neches-Groves
Independent School District
Total Overlapping
City of Port Neches
General
Obligation
Bonded Debt
Outstanding
Reference
(1)
$
64,565,000
(1)
5.09%
Amount
Applicable to
City of Port Neches
$
3,286,359
0.00%
(1)
(1)
Estimated
Percentage
Applicable to
City of Port Neches
•
(2)
Total
9,840,000
8.22%
808,848
133,366,078
60.00%
80,019,647
84,114,853
12,965,000
100.00%
12,965,000
97,079,853
(1) Texas Municipal Reports
(2) City of Port Neches
55
Schedule XIII
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF SEPTEMBER 30, 2010
Debt
Outstanding
Debt repaid with property taxes; City
$ 12,965,000
Governmental Unit
56
Estimated
Percentage
Applicable
100%
Estimated
Share of
Overlapping
Debt
$ 12,965,000
LEGAL DEBT MARGIN INFORMATION
LAST SEVEN YEARS (1)
Schedule XIV
2004
Debt limit
Total net debt applicable to limit
Legal debt margin
$
$
Total net debt applicable to the limit
as a percentage of debt limit
2005
2006
2007
2008
2009
2010
124,614
17,620
106,994
$ 120,509
$ 124,179
$ 131,489
$ 132,560
$ 145,789
$ 144,138
16,488
104,021
14,762
109,417
17,085
114,404
15,286
$ 117,274
11,555
$ 134,234
$ 132,670
14.1%
13.7%
13.0%
11.5%
7.9%
8.0%
$
$
11.9%
$
Legal Debt Margin Calculation for Fiscal Year 2010:
Assesed value
Add back: exempt real property
Total assessed value
$ 1,169,717
271,658
1,441,375
Debt limit (10% of total assessed value)
144,138
Debt applicable to limit:
General obligation bonds
12,965
Less: Amount set aside for repayment of
(1,497)
general obligation debt
11,468
Total net debt applicable to limit Legal debt margin
$ 132,670
Note: Under State finance law, the City of Port Neches' outstanding general obligation debt should not exceed 10% of total assessed property
value. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds.
57
11,468
PLEDGED-REVENUE COVERAGE
LAST TEN YEARS
Schedule XV
NET REVENUE
EXPENSES
AVAILABLE
TAX
EXCLUDING
FOR DEBT GROSS
DEBT SERVICE REQUIREMENTS
YEAR REVENUE (1) DEPRECIATION (1) SERVICE PRINCIPAL (2) INTEREST (2)
TOTAL
2000-01
2,712,229
3,078,255
(366,026)
2001-02
2,455,351
2,187,547
267,804
2002-03
2,571,040
3,077,465
(506,425)
2003-04
2,430,273
2,348,883
81,390
2004-05
2,787,331
2,357,305
430,026
2005-06
2,774,433
2,529,780
244,653
2006-07
2,589,080
2,891,596
(302,516)
2007-08
2,631,022
2,700,489
(69,467)
2008-09
2,908,565
3,016,538
(107,973)
2009-10
3,051,327
2,865,931
185,396
SOURCE:
(1) Statement of Revenue, Expenditures and Changes in Fund Equity,
Water and Sewer Fund. Includes interest income and other
nonoperating revenue, but excludes tax revenue and industrial
contracts dedicated to sewer renovations.
58
COVERAGE
Schedule XVI
CITY OF PORT NECHES
DEMOGRAPHIC AND ECONOMIC STATISTICS
Per
Capita
Personal
Income
Median
Age
Education
Level in
Years of
Formal
Schooling
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
37.5
37.5
37.5
37.5
40.3
14.5
14.5
14.5
14.5
14.5
14.5
Personal
Income
Fiscal
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
(amounts expressed
Population
13,601
13,601
13,601
13,601
13,601
13,601
13,601
13,601
13,179
13,040
in thousands)
293,506
293,506
293,506
293,506
293,506
293,506
21,580
21,580
21,580
21,580
25,502
26,284
34
School
Enrollment
4,747
4,747
4,747
4,577
4,698
4,698
(1) Represents regional data; Port Neches unemployment is estimated at 5% or less
Data Sources: Southeast Texas Workforce Development Board... LMI Report
Bureau of Census
59
Unemployment
Rate (1)
5.90%
5.08%
5.10%
5.00%
5.15%
4.50%
5.50%
6.80%
10.00%
11.00%
PRINCIPAL EMPLOYERS
CURRENT YEAR AND FOUR YEARS PRIOR
Schedule XVII
EMPLOYER
2010
2009
2008
2007
2006
Rank
% of Total
City Employment
PNGISD
Huntsman Petrochemical Corp.
ISP
City of Port Neches
M&E Food Mart
Calabrian Corp.
Dunn Pallet
655
525
238
95
76
57
46
657
521
242
97
75
57
46
660
520
255
97
120
86
46
651
492
245
102
100
54
80
650
410
240
102
62
50
80
1
2
3
4
5
6
7
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Source: Port Neches Economic Development Corporation Estimates
N/A: Data estimates not available
(1) The requirement for statistical data is ten years; only five years are available at this time.
60
FULL-TIME CITY GOVERNMENT EMPLOYEES BY DEPARTMENT
SELECTED FISCAL YEARS 1998-2010
Department
Municipal Administration
Library
Police
Fire/Emergency Management
Inspections
Garage and Warehouse
Streets/Drainage
Solid Waste
Water Plant
Waste Water Plant
Customer Svc/Billing & Coll.
Water DistNVater Coll.
Parks
Other Recreation
1998
2001
6.5
4
20
13
1.25
3
9
9.5
5.5
6
2.5
8
2
Schedule XVIII
2006
6.5
5
20
12.75
1.25
3
8.5
10
4.5
6
2.5
7.75
2.5
2007
2008
2009
2010
7.3
5
21
13
1.3
3
8.3
9.3
5
4.5
2.5
9
2.5
6.5
5
21
13
1.3
3
8.3
9.3
4.5
5
2.5
8
2.5
6.5
5
21
13
1.3
3
8.3
9.3
4.5
5
2.5
8
2.5
6.5
5
21
13
1.3
3
8.3
9.3
4.5
5
2.5
8
2.5
7
5
21
13
1
3
9
9
4.5
4
3
8
2.5
1
1
1
1
1
1
1
91.25
91.25
93
91
91
91
91
61
CAPITAL ASSET STATISTICS BY FUNCTION
Function/Program
1998
Schedule XIX
2001
2006
2007
Public Safety
Police Station
Fire Station
Public Works
Streets-Paved (miles)
Roads (miles)
Cultural & Recreation
Parks (acres)
Swimming Pools
Library
Splash Park
Water & Sewer
Water Main (miles)
Sanitary Sewer (miles)
Source: City Departments
2008
2009
2010
1
1
1
55
7
55
7
55
7
56
7
56
7
56
7
56
7
50
1
1
50
1
1
50
1
1
50
0
1
-
50
0
1
1
50
0
1
1
50
0
1
1
80
80
80
80
80
80
82
82
82
82
84
84
84
84
INDUSTRIAL CONTRACT REVENUE
UNAUDITED
Huntsman Corp. - East Plant
Texas PetroChemical LP
MOTIVA Refinery
Air Liquide Large Industries
ISP Elastomers LP
Huntsman Propylene Oxide Ltd.
ExxonMobil Corp.
Flint Hills Resources
Shell Pipeline LLC
ISP Waste Management Services
Entergy Gulf States, Inc.
Energy Gas Compressin LTD
Ameripol Synpol Company
DirectIV Inc.
Centana Interstate Pipeline Co.
Total
Huntsman Corp. - East Plant
Texas PetroChemical LP
MOTIVA Refinery
Air Liquide Large Industries
ISP Elastomers LP
Huntsman Propylene Oxide Ltd.
ExxonMobil Corp.
Flint Hills Resources
Shell Pipeline LLC
ISP Waste Management Services
Entergy Gulf States, Inc.
Energy Gas Compressin LTD
Ameripol Synpol Company
DirecITV Inc.
Centana Interstate Pipeline Co.
Total
$
$
SCHEDULE XX
2010 Adjusted
Assessed
Valuation (a)
161,335,790
70,950,820
92,771,490
47,473,000
56,671,550
13,252,200
5,496,650
3,338,100
729,100
1,003,300
1,270,820
251,280
206,550
35,060
7,790
454,793,500
, 2010 In Lieu
• Assessed
Discounts
25%
25%
25%
25%
25%
2009 Adjusted
Assessed
Valuation (a)
179,811,530
81,920,120
55,324,190
50,476,400
35,161,910
14,332,600
4,277,450
3,712,700
1,101,300
1,200,500
1,188,290
251,280
217,270
40,470
8,800
2009 In Lieu
Assessed
Discounts
25%
25%
25%
25%
$
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
429S)24,810
$
of Tax Contract
Valuation
121,001,843
53,213,115
69,578,618
35,604,750
42,503,663
9,939,150
4,122,488
2,503,575
546,825
752,475
953,115
188,460
154,913
26,295
5,843
341,095,125_,
Payments
870,608
382,868
500,618
256,176
305,814
71,512
29,661
18,013
3,934
5,414
6,858
1,356
1,115
189
42
2,454,179
of Tax Contract
Valuation
134,858,648
61,440,090
41,493,143
37,857,300
26,371,433
10,749,450
3,208,088
2,784,525
825,975
900,375
891,218
188,460
162,953
30,353
6,600
Payments
943,336
429,773
290,245
264,812
184,468
75,192
22,441
19,478
5,778
6,298
6,234
1,318
1,140
212
46
,768,608 $
63
2.250.771

Fiscal Year 09-10 Audit

Transcription

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