HomeMy WebLinkAboutMarch 6, 2007 Agenda
AGENDA
CITY OF DENTON CITY COUNCIL
March 6, 2007
After determining that a quorum is present, the City Council of the City of Denton, Texas will
convene in a Work Session on Tuesday, March 6, 2007 at 5:00 p.m. in the Council Work
Session Room at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items
will be considered:
1. Receive a report, hold a discussion, and give staff direction regarding the 2006
Comprehensive Annual Financial Report and annual audit.
2. Receive a report, hold a discussion and give staff direction regarding a Downtown
Incentive Reimbursement Grant Program. The Economic Development Partnership
Board recommends approval (5-0).
3. Requests for clarification of consent agenda items listed on the consent agenda for today's
City Council regular meeting of March 6, 2007.
NOTE: The City Council reserves the right to adjourn into a Closed Meeting on any item on its
Open Meeting agenda consistent with Chapter 551 of the Texas Government Code, as amended,
including without limitation, Sections 551.071-551.086 of the Texas Open Meetings Act.
However, the Council reserves the right to take action at the meeting regarding any item on the
agenda.
Regular Meeting of the City of Denton City Council on Tuesday, March 6,2007 at 6:30 p.m. in
the Council Chambers at City Hall, 215 E. McKinney Street, Denton, Texas at which the
following items will be considered:
1. PLEDGE OF ALLEGIANCE
A. U.S. Flag
B . Texas Flag
"Honor the Texas Flag - I pledge allegiance to thee, Texas, one and indivisible."
2. PROCLAMATIONS/PRESENTATIONS
A. Proclamations/Awards
3. CONSENT AGENDA
Each of these items is recommended by the Staff and approval thereof will be strictly on
the basis of the Staff recommendations. Approval of the Consent Agenda authorizes the City
Manager or his designee to implement each item in accordance with the Staff recommendations.
The City Council has received background information and has had an opportunity to raise
questions regarding these items prior to consideration. Citizens may speak on items listed on the
Consent Agenda. A Request to Speak Card should be completed and returned to the City
Secretary before Council considers the Consent Agenda. Citizen comments on Consent Agenda
items are limited to three minutes.
Listed below are bids, purchase orders, contracts, and other items to be approved under
the Consent Agenda (Agenda Items A - G). This listing is provided on the Consent Agenda to
allow Council Members to discuss or withdraw an item prior to approval of the Consent Agenda.
City of Denton City Council Agenda
March 6, 2007
Page 2
If no items are pulled, Consent Agenda Items A - G below will be approved with one motion. If
items are pulled for separate discussion, they will be considered as the first items following
approval of the Consent Agenda.
A. Consider adoption of an ordinance of the City of Denton authorizing an
agreement between the City of Denton, Texas and the Denton Parks Foundation
to assist with preparation for the 2007 Cinco de Mayo celebration; providing for
the expenditure of funds therefor; and providing for an effective date.
B. Consider adoption of an ordinance authorizing the City Manager or his designee
to execute Change Order One (removing the 5% annual cap on the contract's
escalation clause) to the contract between the City of Denton and ABB, Inc.;
providing for the expenditure of funds therefor; and providing an effective date
(Bid 3282-Change Order One to Three- Year Agreement for Purchase of Medium
Voltage Switchgear Buildings). The Public Utilities Board recommends approval
( 4-0).
C. Consider adoption of an ordinance of the City of Denton authorizing the City
Manager or his designee to execute a purchase order with the Houston-Galveston
Area Council of Governments (H-GAC) for the acquisition of a flushing/vacuum
combination unit for the City of Denton Wastewater Department by way of an
Interlocal Agreement with the City of Denton; and providing an effective date
(File 3728-lnterlocal Agreement for Flushing/Vacuum Unit with H-GAC
awarded to Hi-Vac Corp/AQUATECH in the amount of $149,278.08). The
Public Utilities Board recommends approval (6-0).
D. Consider adoption of an ordinance accepting competitive bids by way of an
Interlocal Cooperative Purchasing Program Participation Agreement with the
Lower Colorado River Authority (LCRA) under Section 271.102 of the Local
Government Code, for the purchase of electric distribution cables; providing for
the expenditure of funds therefor; and providing an effective date (File 3743-
Interlocal Agreement for Purchase of Electric Distribution Cables with LCRA
awarded to Techline, Ltd., in the amount of $382,460). The Public Utilities Board
recommends approval (4-0).
E. Consider adoption of an ordinance of the City of Denton, Texas approving an
agreement between the City of Denton and the North Texas Umpire Association;
determining a sole source and approving the expenditure of funds for the purchase
of certified softball officiating services available from only one source in
accordance with the provisions of the state law exempting such purchases from
the requirements of competitive bids; and providing an effective date (File 3744-
Agreement with North Texas Umpire Association in the amount per game as
specified in the agreement for an estimated award of $57,000).
F. Consider adoption of an ordinance authorizing the Mayor to approve a second
amendment to that certain Economic Development Program Grant Agreement
with Teasley Partners, Ltd. to extend the dates of substantial completion of the
improvements covered by the grant agreement from December 31, 2006 to June
30, 2007; and providing an effective date. The Economic Development
Partnership Board recommends approval (5-0).
City of Denton City Council Agenda
March 6, 2007
Page 3
G. Consider approval of a resolution appointing members to the Board of Directors
of the Industrial Development Authority Board; and providing for an effective
date.
4. PUBLIC HEARINGS
A. Hold a public hearing and consider adoption of an ordinance approving a Specific
Use Permit to allow gas well drilling and production in a floodway. Two gas well
development sites are proposed, one is proposed on the east side and the other on
the west side of Bonnie Brae south of Roselawn Drive. The development is
located within a Neighborhood Residential 2 (NR-2) zoning district. (806-0013
Henderson #1 and #2 Wells) The Planning and Zoning Commission recommends
approval (7-0).
5. ITEMS FOR INDIVIDUAL CONSIDERATION
A. Consider adoption of an ordinance authorizing the Mayor or his designee to enter
into an Interlocal Agreement with Denton County for the County to provide
property tax billing and collection services for the City of Denton and to repeal all
ordinances to the extent of conflict therewith (the split-payment option for
payment of taxes); and providing an effective date. The Audit and Finance
Committee recommends approval (3-0).
B. Consider nominations/appointments to Boards, Commissions and Committees.
1. Traffic Safety Commission - Council Member Heggins
C. Citizen Reports
1. Review of procedures for addressing the City Council.
2. Receive citizen reports from the following:
A. Robert Donnelly regarding the Development Code.
B. Jordan Hudspeth regarding concerns of Southeast Denton.
C. Lanisha Hudspeth regarding concerns of Southeast Denton.
D. Hagar Hudspeth regarding concerns of Southeast Denton.
E. Willie Hudspeth regarding concerns of Southeast Denton.
D. New Business
This item provides a section for Council Members to suggest items for future
agendas or to request information from the City Manager.
E. City Manager's Report
F. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the
Texas Open Meetings Act.
G. Official Action on Closed Meeting Item(s) under Sections 551.071-551.086 of the
Texas Open Meetings Act.
City of Denton City Council Agenda
March 6, 2007
Page 4
CERTIFICATE
I certify that the above notice of meeting was posted on the bulletin board at the City Hall of the
City of Denton, Texas, on the day of ,2007 at o'clock
(a.m.) (p.m.)
CITY SECRETARY
NOTE: THE CITY OF DENTON CITY COUNCIL CHAMBERS IS ACCESSIBLE IN
ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT. THE CITY WILL
PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE HEARING IMPAIRED IF
REQUESTED AT LEAST 48 HOURS IN ADVANCE OF THE SCHEDULED MEETING.
PLEASE CALL THE CITY SECRETARY'S OFFICE AT 349-8309 OR USE
TELECOMMUNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-
RELAY-TX SO THAT A SIGN LANGUAGE INTERPRETER CAN BE SCHEDULED
THROUGH THE CITY SECRETARY'S OFFICE.
AGENDA INFORMATION SHEET
AGENDA DATE:
March 6, 2007
DEP ARTMENT:
Finance
ACM:
Jon Fortune
tf
SUBJECT
Receive a report, hold a discussion, and give staff direction regarding the 2006 Comprehensive
Annual Financial Report and annual audit.
BACKGROUND
Each year, the City hires an independent accounting firm to conduct an audit of the City's basic
financial statements. The purpose of the audit is to express an opinion as to whether the City's
financial statements present fairly, in all material respects, the financial position of the City. The
annual audit report is comprised of three major components, including the Comprehensive
Annual Financial Report (CAFR), Management Letter, and Single Audit.
The CAFR represents the entire financial position of the City, specifically for the fiscal year
ending September 30, 2006. The document includes the independent auditor's opinion of
management's representations within the annual report. The auditors have provided the City a
clean opinion, which means that in the opinion of KPMG, the City financial statements present
fairly, in all material respects, the financial position of the City. The KPMG audit specifically
included the following items:
. Audit of the City's CAFR in accordance with generally accepted auditing standards
. Performance of a Single Audit, which is an audit of the City's expenditures of State and
Federal grant awards
. Preparation of a letter to management detailing any weaknesses or ideas for improvement
identified during the audit
. Review of sale of debt security instruments
. A review, analysis, and evaluation of the City's financial accounting systems and internal
controls
The auditor's examination of internal controls was conducted at a level sufficient to gain an
understanding of the internal control structure to determine nature, timing, and extent of audit
procedures. The auditors did not perform an audit of internal controls, but performed limited
tests of internal controls for the purpose stated above. Additionally, the auditors examined, on
test basis, evidence supporting amounts and disclosures in the combined financial statements.
In an effort to obtain a more thorough review of internal controls, the City recently (January
2007) entered into a contract with Webb Watch Corporation, a separate independent consulting
Agenda Information Sheet
March 6, 2007
Page 2
firm, to perform a comprehensive data mining analysis in the disbursement areas of the City for
the possibility of identifying improvements with the City's internal controls. The scope of this
disbursement data analysis will involve the following key data files: Vendor Master File,
Disbursement Detail Transactions, Human Resource Master File and Payroll File. Such a
comprehensive data mining analysis was not part of the scope of work to be performed by
KPMG. At the conclusion of this analysis, the results will be presented to the City Manager and
Audit/Finance Committee for consideration and necessary action.
PRIOR ACTION/REVIEW
This item was presented to the Audit/Finance Committee at their February 19,2007 meeting.
EXHIBITS
All of the following exhibits have already been provided to the City Council under separate
cover. Due to the large number of exhibits, I have not provided an additional copy. However,
please let me know if you need a copy of anything and I will get it to you in advance of the
meeting.
a. KMPG Presentation Materials
b. KMPG Letter Dated February 13,2007
c. 2006 Comprehensive Annual Financial Report (CAFR)
d. Single Audit Report - Independent Auditor's Reports on Federal Awards in Accordance with OMB Circular A-133
e. Management Letter - KPMG Letter Dated February 2, 2007
Respectfully Submitted:
~V~
Jeniffer Varley
Interim Chief Financial Officer
. ~:~
,'::,'10.
~ v>
.~ "
."i
_',J'
," ~
.. .,'
.; . ":s't:
'- ;0:;1~ ~v
, .~ ! '.' ~, ,
f,-"\ '. ",';.r~;,".l>.
f'''' .... ,"."~ v,. "
t:;;~:~,' .;'; {~;:
,. ":I" :t. 0} ~ .","",f'."
\" h;i~;'("'-'~ r^>'.},:="
, ,;~;'/:'2~~' .'
CI)
Cll
...
::J
-0
Cll
U
e
0...
OJ
c
:;:;
co
...
Cll
0..
0
-0
C
co
OJ
c
t
0
0..
Cll
a:
CO
'(3
-0 CI) C
Cll CO
::J E c CI)
CI) Cll ... u: ...
CI) - - Cll Cll
-0 .c ... :;:
CI) ::J - - Cll
'- <( -0 0 > CI)
Cll ::J 0 C
- <( -0 <(
- C .~
Cll CO -0 -- C 0 -0
-l CI) OJ CO ...
.... ::J CI) C - C
-0 0 <( Cll '€ - c CO
CO c CI) .... g :.a 0
CO Cll 0 0 ::J 0 CI)
"0 c
CI) > ... 0.. <( 0
s:: t :;:; CI) 0... Cll CO
== Cll :;:;
CI.l 0 U ::J .~ a: OJ c CI)
Cll ...
Cl 0.. CI) -0 >- Cll Cll
Cll E Cll ::J Cll C - ::J
<( a: 0 a: <( :::c:: (f) c 0
C C/l
0 .".:::
- -0 O.c
0 C - - C/l
>- CIl CD~"E CIl
::: OJC/l C
U C- D <1l '-
0) ._ C CIl 0) ~ CD
t:: 0) .~ g <( -
.c o E C
- o.CIl-
- 0.0) 0. -0 CIl OJ
0 0)- <( '- '- C
C/l a: <1l o 0) '6
- C/lU-o
- CIl (/) U)
C - U 0) '-
0) .- - 1:) C<(LL. CIl
E U <1l '-'- CD _ OJ
C .- t1:l E .S: 0 CD
0) <1lU1:) a:
- C C c:: CD CD C/l
CIl .- CIl t1:l '- 0) C/l
- U
C/l LL.C.... :J C '- C
CIl ,-i:i:CI) O'"CIl.2 0
0)-0) 0) .- .- +=
'0 > 0 c:: a: 0. -0 CIl
0_:;:: C -0
C .cEO) C
CIl -'6'6 - 0 0. 0)
C e :J ::J .~ U x E
:;:: c<(<:C O),-w C/l
U E 0)
Oc..... uO)- '-
'Vi U<1lC:: C > 0 0 :J
CIl 0) CIlO CD U-o
D -cE CD CD
CIl 0 =-"5 a: u
<0 E-oE: 0.0-0 0 '"
0 0) 0) 0) E.bO) -0 '-
0 - C/l::' oC.c ca..
N ECIlo Uou CIl OJ
U(/)
0 cco<!J c_ C/l c
"t:J o <1l 0) - .-
C') OC/l.c c-
Q) '- t::'-- t::c.c 0) CIl
:J 0) CD .- '- - E Qj
o-s: 0 CD C
II) D 0.- o.c 0 E 0.
E CD CIl CD
II) a:~u CD_-o 00
- CD a:cc ()-o
- '- c
II) 0. - CD CIl -C/l 0 CIl I c
CD ~..c"O CIl
... (/) '--oC') '-
Q) 0-'- ,8cC') 2 0
:::00
t: CD -0-08 ~C'O...- - '-
.c :J C/l ' 0)-
Q) - C/l :Jc<( <(E<( ....J 5
...J c CIl <( <1l ell <<i cU
0 x _ c -
c 0) .- C'--
"t:J c CD CDU-o CD OJ :J CD OJ
c: 01- -oCCD -oOU E .S:
'- '-
m :~ c ~ .c:g E c a.. .- CD-
CD U OJC
II) 0.0 o.o.C5 o.'-co CIl :J
Oc CDE't: CD .Q.~ c 0
1:: c 0) -OOCD -0 CIl CIl U
0 <(0 CUa.. E~O ~~
0. . . . .
Q)
a:
-
.-
"0
::J
<(
c:
co
-
o
II)
~
.-
-
o
OJ
.....
.0
o
Q)
.c
-
1ii
E en
-
Q) c:
U Q)
c: E
f:l Q)
:J1ii
en_
~ ~
Q) "E
"S"O
- c:
55 Cll
..c en
Cll ....
_ 0
o t:
c Q)
Q)- Cll
.0 'C
Cll2
c Cll
55 E
Cll-
Q) 0
.... Q)
C Q)
"- ....
Cll-
- Q)
..c ....
o Cll
o en
- -
"!!? a5
:::: E
"0 Q)
:J-
Cll Cll
Q)Ui
.c -
_ Cll
- .0
o c
Q) Cll
> c
''';::::;~
U U
Q) "-
"- en
..c Cll
O..c
.
Q)
.c
-
c:
"0
Q)
0..
Q)
U
U
Cll
~
Cll
....
Q)
c
Q)
en
en
"0
....
Cll
"0
c
Cll
-
en
en
c
".;::;
'a
:J
Cll
.c
-
"~
Q)
U
C
Cll
"0
....
o Cll
U U
U .-
Cll ....
Q)
o~ E
0-::: <(
"0_
:J 0
Cll en
Q) Q)
.c-
_ Cll
uW
:J"O
"0 Q)
C:!::::
o c
():J
.
c
en
Q)
....
:J
en
o
U
en
'a
"0
c
Cll
en
-
c
:J
o
E
Cll
en
c
o-E
o
0..
0..
:J
en
Q)
U
c
Q) en
"0-
0::; c
Q) Q)
.!!? ~
~CO
..cUi
- -
en Cll
2 "(5
Cll ~
c: c:
o~
Q) U
C O(ii
.- Cll
E..c
~ Q)
wE
-
o
Q)
Q)
....
-
Q)
....
Cll
en
-
c
Q)
E
Q)
-
Cll
-
en
o~
U
c
Cll
c
;;::
U
O(ii
Cll
..c
Q)
.c
-
-
Cll
.c
-
Q)
U
C
Cll
....
:J en
en_
en c
Cll Q)
Q) E
..cQ)
Cll-
c.8
o en
en o!!?
~ E
....-
Cll
C "C
"(ij Q)
1510
OE
I
>-
..c
OJ
"0
Cll
E
en
OJ
1ii
E
:;::
en
OJ
-
c
Cll
U
::E
c
02'
en
"0
c:
Cll
en
OJ
.9-
U
c
oc
0..
en
c
:;::
c
:J_
o c:
U Q)
al E
en Q)
en en
OJ Cll
en c
en Cll
<( E
I
c::
o
:;::
Cll
-
c::
OJ
en
OJ
....
0..
-
c
Q)
E
OJ
-
Cll
-
en
Cll
"1:5
c::
Cll
c
;;::
Cll
....
OJ
>
o
2
Cll
:J
Cll
>
W
"0
c::
Cll
en
.f:
E
:;::
en
Cll
OJ
....
Cll
OJ
....
:J
1ii
c
OJ
of:
E
....
OJ
-
Q)
"0
o
-
OJ
....
:J
-
U
:J
....
-
en
o
....
-
c:
o
U
Cll
c
....
2 en
c ~
_ :J
0"0
en OJ
c U
0_ 0
"0 ....
c 0..
ctJ :~
-"0
~ :J
OJ Cll
"0 _
c 0
:J_
C C
O(ij 2
<.'J~
.
'"
-
c
Cll
U
;;::
Oc
en
O(ii
"0
c
Cll
~
en
oc
.c
en
:c
c
o
c
o
0';::;
c
OJ
-
1ii
en
:J
U
o
LL
.
i
I
i
i
i
I
;
I
,
I
I
I
I ~
>-
I 0
I 5: -
I c
i .0: Q)
, "0 E
i :::l
I <( Q)
I 0>
0 ((l
I - C "
I
I "0 ((l
C Q) en ~
- -
.Q ((l c .!:
I C Q) Q) -
i 0.. a:: E .~
I 0 -
en en c
I C :::l .0
I .Q .~
I c "0 -
I ((l - <( ((l
i Q) ((l .!::1
:!:: ~ .0: ;<.::: C
'0 I E "0 :::l
! :.:J :::l E
:J "0 <(
<I: I Q) Q) "0 E
;0::: 0.. 0
- I 0 Q) 0
0 ((l () en
I/) i :::l (j) 0 C
0- 0.. Q)
- I c 0 0
- >- 0..
:J :J Z CL 0
I/)
C1.l . . . .
a:
(/)
a
'-
.....
c
a
()
co
c (/)
'-
(]) E
.....
c (])
.....
~
- (]) c
a (/) a
(/) c (/)
..... (]) '-
(/) Q)
Q) Q.
l- x >
UJ C
"'0 --- 0
c Q) ()
ctl '-
::l '<t
(/) :!::: C") '"
::: "'0 CO
(]) c
.~ (]) (j)
Q. <(
(]) (/) >< C)
..... ..... UJ
c c ~
Q) "'0 en
(]) E (/) c c
c..> ..... Q) ctl t
c en (/) :!:::
.~ C (]) (/) (]) 0
'';::: > ..... .0 ::l Q.
C. (/) c (/) (]) ctl c (])
E Q) 5f! (/) (]) a:
l- (/) :.:J >
a "'0 .0 <( (])
() - c ctl "'0 a: "~
lfJ a ctl .:::: ctl Q) c..>
lfJ "'0 (/) ..c (]) :!::: ::l '- C
'- ..... a
CIJ Q) ctl (/) c..> Q. c..> .0 ctl
(,) E Q) ctl (]) ctl c..> Q) "Cij' c
0 '- () a: () <( 0 ~
'- <( LL
L- a
a. t >. I I I I I I I
(]) Q)
- ll. ~
.-
"0 . .
:3
<(
II)
E
0)
:!:::
-
"0
:J
<C
-
C')
c:
.-
~
o
C-
O)
a:
>-
0)
~
-
("(J
'- Q)
c..l c..l
~ c:
c: ~
i.:i: ::J
.... (J)
-E-s
0)....
c:-E
~""O
c: c:
~ ("(J
c..l~
c..l Q)
~ (J)
- (J)
C\j-<::C
'<t-
.E!
0'0.
Z ("(J
-0
C"-
Q) 0
E......
Q) c:
- Q)
t3 .~
CO ("(J
Cf)E-
<(-
(!:} () "
....""'(J)
o O).~
c c: l...:
o '- Q)
.- t:: ~
15..00
o Q c..l
-oQ)Q)
<(CCCC
.
Ol
c:
:e
o
2-
CC
c:
o
".;:::;
'B
c:
o
o
c..l
'E
o
c:
o
~
'<t'
'<t
o
Z
"'
-
c
Q)
E
Q)
- ,
C1:l '
_ c:
Cf) .52
cot)
Cf) Q)
<(C/)
(!:}Cii
.... c..l
O~
C .(J)
.;::;
.Q .E!
15..C/)
.g Q)
<(:S
.
.....
()
<(
.....
c
(l) (l)
(/) Ol E
E c .....
(/)
~ (f) (l)
'- >
Ol (l) C
0 .r::.
'- .....
0- - (/)
'- 0 "0
0 C
'CO t:: CO :::l
~ LL
E 0- 0
0 ,S2
'- (/)
0 ~ I"- ..Cl
- 0) "0 :::l
'- =l:I: (l)
(l) ~ ..... 0...
() (l) <( 0 .r::.
c >. 0 c
~ .....
,~ LL (l) .~
0- .r::. () ()
E ..... C "0
"0 I ,~ (l)
0 .....
() (l) (l) 0- 0
..... .~ c "-
c (/) '- E
(l) ..... (l)
0 ..... ~ (l) 0 ()
~ ..... ()
c (l) 0) CO (/) C c
,9 '- Cf) ,..- C :::l 0 ~
c (l) C\J C\J () c
$: >. 0-
'0.. ""'" ""'" ..... >. - E
0 (/) ,..- ,..- 'C ..... 0
10- E =l:I: =l:I: :::l 'C 0
Q) "0 () :::l (/) ()
.t: (l) ~ <( <( (l) () (l) c
'- ()
- ~ Ol 0 0 (f) (l) c 0
0 ~ 0 LL LL ~ (f) ~ c
'- () () ..... -
"'0 :::l 0- (l) "0 (/) 0
CJ '-
t: Ol I I <( c ,f:: (/)
c ~
m :::l c w <.9 c (l) ~ (l)
.~ ~ ()
.'!: c CO ~ E 'C c
"'0 ~ .Q 0 0 ..Cl 0 (l) ~
'- ..... .....
::s "0 0 I () :::> I ~ (/)
<t (l) - :'= E c
:::l (l) "0 I I I I
Q) (/) .r::. :::l 0 0
- (/) f-<( Z Z
C)
t: . . . .
en
Cii
0'1 ()
e:
c: cr:l
.- e:
... u:
ca
... I-
C1) Q)
Q. en >
0 Q) 0
"C -0 0
:::l
c: ."::: I-
.....
ca ..... e:
.....
<( 0
0'1 Q) ()
c: .:2: cr:l
... ..... e:
... () I-
0 cr:l Q)
Q. 0 .....
l- e:
C1) a...
a: -0 e: >-
ro
e: -0 en ()
ca cr:l Q) Q) 0
.- .;::
(.) ..... .....
e: 0 ..... a...
c: Q) Z e:
en W .....
ca E en e: e:
c: e: Q) .Q cr:l Q)
U. 0 en ..... e: E
I- en cr:l I- Q)
... .:; Q) 2: :::l >- 0>
0 .....
C1) e: e: Q) .;:: cr:l
> W .::tt. en --, :::l e:
0 cr:l .!:l ..... () cr:l
0 Q) 0 0 Q) :2:
- I- ~ Cii (f)
0 ..... I-
... e: cr:l > Q)
... 0 cr:l Q) 0 cr:l 0>
c: () .;:: 0> >- I- () e:
0 l/J Q) e: C- O> cr:l
C1) Q) ..... t ..... C- o .c
U ... > cr:l e: <( ....J ()
:J :E :2: 0 Q)
- C- I-
ca"C en l- I I
c: C1) 0 0 Q) :::l
... (.) a... za: ()
C1) 0 . . .
...
c: ...
_a.
!
,
!
I
i
I
!
i
!
I
I
I
I . '"
(1) I
- I
c
CI.l
E i
,
E I
I
0
U I
I
'tJ I
I
C I
ell
(1) I
I
C I
0
.- I
-
(1)
CI.l
::s I
0 I
I
\.
..
. . ,. ,
KPMG LLP
Suite 3100
. . '71 t North. Harwood' Street
Dalla_~r TX 75201~~585
February 13, 2007
Audit Committee
,. City of Denton,. Te,xas
Ladies ~nd G~nt.1emen:
W ehave :3udited the. financial 'statements 'of the - governmental-activities, the business-type 'activities~ .each .-
major fund, and-the aggregate remaining informatjon of t.he City, of_Denton, ,Texas (the:,City) as :of and fOf
the, year September 30,' 2006, and -have issued our "report thereon dated FebrUary 2, 2007. Under our.
professional standards, -weare. providing- you with- th~- attached -information related. to . the .conduct of our -- .
., audit,.
<;)ur Resp~n~ibilit.y, Unde~, Proress~on_I:'I-Sta_nd_ards
" We have a .r~sponsibility to conduct our audit of the ,basic .financial statements in accord:ance _with
professional- standards. In carrying out this responsibility, we 'planned 'and. performed the aud~t to. obtaln
~easoitabl.e' ,ass.urance ,abou~ 'whether the 'financial statements :are free :of 'material misst~tement, :whether ,.
,. caused by error or fraud. ,Because ,of the ,nature of audit evidence and the characteristics"of fraud,_ we are to
obtain . reasonable; not absolute, aSsurance that material- misstatements' 'are-. detected'.' We' have. no .
responsib.ility to plan, an9 perform .the ,audit_ to _obtain reasonable aSSllrance that ,misstatements, _whether,,'
caused by error or .fraud, that are not mat~rial to the financ~al .state~ents. are detected.
In addition, in plannin_g and. performing our audit of the financial statements, we consi-dered internal
cOhtrol over financial - reporting (internal control) as a 'basis -for designing our auditing procedures for the
purpose of - expressing: our opinion on the: financial statements but _not for: the purpose of expressing, an
opinion on the effectiveness of ~he City'~ internal control. Accordingly, we .do not express 'an opi-nion on
the .effective-ness of the City"s "internal.control.
Significant Accounting 'Policies
The' significant. 'accounting policies used by the City are describedjn .Note: 1 to the basic finailclal ,.
statements. As- _described-in .Note:.} in order to comply. with th,e requirements- of -U.'S.:generally accepted
accounting principles, the City _ adopted GA-SB Statement 42, Accounting and- Financial Reportirig for
I1npairmerit -oj' Capital Assets andfor Insurance- Recoveries 'and'GASB :Statemenf44, Economic'Condition .-
" Reporting: the _Statistical :Section.
~anag_eD1ent J~d,gments Iln,d Accounting Estimates_
., The. preparation. of the-basic fi~ancial statement~ .,.requires ,management ,of the- City- to :m~ke :a,number of
estimates .and assumptions relating to the reported amounts of assets and- liabilities and the disclosure of
contingent assets and liabilities .at the date of the. basic' Jinancial statements and the .reported. amounts 'of'
- revenu~s and- expenses ,during the period.
KPMG LLP. a u.s. limited liability partnership, is the U.S.
, member firm -of .KPMG International, a Swiss cooperative.
.",.,
Audit Co.tJU;11jttee ,,'
.. City of,Dento~, Texas
Febniaiy ]3, .2007
Page 2.
Management has made. the following si~ificant judgments and estimates' th.at can affect fair prese.ntati?D
in the bas:jc.financial statements: ,.. ,
. The allowance for uncollectible re.ceivables for property taxes and utility services
. . The disclosure :of the fair value of financial instruments
. The useful lives of depreciable capital assets-
,. .. . ... ' ..
.. The' acciu'al and disclosure of self-insurance' liabilitie.s for 'general and workers.' compensation-
Consultalion with Other Accountants
To the be-st -of out 'knowledge, management 'has nat consulted with. or .obtwned. opinions, written- or oral
from ather- independent accountants durin'g .the' year ended September 30,2006.
Major Issu-~s - Discussed with. the. Aud_it Committee and- Management. Prior to. Retention
We generally discuss a- variety- of matters, -including- -the application of -accounting "principles; -with
- management ,ea.ch year _prior to. our retention by, you as. the auditors. However; these- discussions occu~ed
in the - normal course at our' professiQnal relationship -and Dilr. responses were not a conditiQn to .our
retention.
.",.,
Audit Committe.e ,. .
City of Denton, Texas
-" ..
February -13" 2007.
f.>age 3
Difficulties .En~ou~tered in Performi:ng the A'udit
We enc.ountered. no signi.ficant diffjculti~s jn dealing with managern~nt in performing our audit,. that were
not satisfactorily resoived to' enable use 'to complete. the audit. ... ,. , - ... .
Materi"al.W ritlen:' Communications
Significant written- communication between us and. management has consisted of the engagement letter and
the- management representation letter.
, Indepe:ndence
Our, professional standards and- . other- -regulatory -requirements. specify that we communicat'e to 'you .in--
writing, at 'lea~t ~nnually"all ind~pende~ce-related relations~ips betw~n <;>~r firm and the City .a~d provide
confirmation that we ,are independent accountants with respect to the 'City.
Confirmation of Audit Independence
.. ,.. . - - , , . . ... ,
We hereby confirm that, as of February 2, 2007, we are independent accountants with respect to the City
under. all relevant professional and regulatory-standards.-
-*-* * *-* *.*-
This report to the audit corrirriittee is intended' s'olely. for the iilf6r:mati6n:and use of the audit corrirriittee arid
City management and.is.not.intended to,be and-:should not:be_used_by ,anyone Qtherthan these specified
parties. '
Very truly yours:,
K1>MG- LL"P
,CITY QF- DENrON-" TE~AS,
Summary :of Uncorrected- Misstatements
September 30, 2006
" Deferre.d revenue
Accounts receivable
(To properly reflect deferred revenue based on actual -
Capital-Projects Fund)"
Loss on impairment. of assets
Buil.dings
(To r~cognize impairm~nt of Old Fire Station)
$
$.
.Dr. :-
37,591
Cr. .
37,59]
. .205,212
405,21~
CITY OF DENTON, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the fiscal year ended September 30, 2006
INTERIM CITY MANAGER
Howard Martin
ASSISTANT CITY MANAGER
Jon Fortune
Prepared by:
Jeniffer Varley, CPA
Interim Chief Financial Officer
Lori Allen
Accounting Technician
Michael Rodgers, CPA
Controller
Gary Calmes, CPA
Utilities Finance Administrator
Harvey Jarvis
Chief Accountant
Phil Williams, CPA
Electric Accounting Manager
Diane Chang, CPA
Senior Grants Accountant
Chris Rodriguez
Budget Manager
Kurt Breyfogle
Senior Utilities Accountant
Antonio Puente
Budget Coordinator
Ed Lane, CPA
Accountant III
Terri Doby
Budget Analyst
Cody Wood
Accountant III
Michelle McCallum
Management Assistant
City of Denton, Texas
Comprehensive Annual Financial Report
For Year Ended September 30, 2006
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION (UNAUDITED):
Transmittal Letter .............................................................................................................................. . . . . . . . . . . . . . . . . . . . i
Organizational Chart.......................................................................................................................... ................. vi
Certificate of Achievement................................................................................................................... ............. vii
List of Principal Officials...................................................................................................................... ........... viii
FINANCIAL SECTION:
Independent Auditors' Report......................................................................................................................... ..... 1
Management's Discussion and Analysis ............................................................................................................. 3
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets........................................................................................................................ 11
Statement of Activities.................................................................................................................... ...... 12
Fund Financial Statements:
Governmental Fund Financial Statements:
B al an c e She e t .............................................................................................................................. . .. 14
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets ......15
Statement of Revenues, Expenditures and Changes in Fund Balances.......................................... 16
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances
of Governmental Funds to the Statement of Activities.............................................................. 1 7
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget to Actual
General Fund.......................................................................................................................... . . . .. 19
Proprietary Fund Financial Statements:
Statement of Net Assets................................................................................................................. 20
Statement of Revenues, Expenses and Changes in Fund Net Assets............................................. 24
Statement of Cash Flows................................................................................................................ 26
Fiduciary Fund Financial Statements:
Statement of Assets and Liabilities................................................................................................ 28
Notes to Basic Financial Statements........................................................................................................... 29
Required Supplementary Information:
Schedule of TMRS Funding Progress and Contributions - Last Three Fiscal Years ................................. 57
Schedule of Denton's Firemen's Relief and Retirement Plan Funding Progress
and Contributions - Last Three Fiscal years........................................................................................ 58
Combining and Individual Fund Financial Statements and Schedules:
Combining Balance Sheet - N onmaj or Governmental Funds..................................................................... 60
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
N onmaj or Governmental Funds............................................................................................................ 62
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual:
Deb t S e rv ice Fun d .............................................................................................................................. . . 64
Special Revenue Funds:
Recreation.................................................................................................................... ...................65
Pol ice Co nfi s c a ti 0 n ........................................................................................................................ 66
Tourist and Convention.................................................................................................................. 67
Em i I y F 0 w I e r Library ..................................................................................................................... 6 8
Combining Statement of Net Assets - Internal Service Funds................................................................... 70
City of Denton, Texas
Comprehensive Annual Financial Report
For Year Ended September 30, 2006
TABLE OF CONTENTS
( continued)
Page
FINANCIAL SECTION (continued):
Combining and Individual Fund Financial Statements and Schedules (continued):
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets -
Internal Service Funds......................................................................................................................... . 72
Combining Statement of Cash Flows - Internal Service Funds.................................................................. 74
Combining Statement of Net Assets - Agency Funds....................................................................................... 76
Combining Statement of Changes in Assets and Liabilities - Agency Funds ................................................... 77
Capital Assets Used in the Operation of Governmental Funds:
Com p ar at i v e S c h e d u I e s by Sour c e .............................................................................................................. 7 9
Schedule by Function and Activity ............................................................................................................. 80
Schedule of Changes by Function and Activity.......................................................................................... 81
STATISTICAL SECTION (UNAUDITED):
Table
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Net Assets by Component.................................................................................................................... . . . . . 85
Changes in Net Assets........................................................................................................................ ....... 86
Fund Balances of Governmental Funds ....................................................................................................88
Changes in Fund Balances of Governmental Funds.................................................................................. 90
Assessed Value and Estimated Actual Value of Taxable Property ...........................................................92
Property Tax Rates (Per $100 of Assess Value) - Direct and Overlapping Governments .......................93
Principal Property Taxpayers.................................................................................................................... 95
Property Tax Levies and Collections ........................................................................................................ 96
Ratio of Outstanding Debt by Type........................................................................................................... 98
Ratio of General Bonded Debt Outstanding............................................................................................ 100
Direct and Over lapping Governmental Activities Debt.......................................................................... 101
Pledged Revenue Coverage..................................................................................................................... 102
Demographic and Economic Statistics.................................................................................................... 104
Prin c i pal Em ploy e rs .............................................................................................................................. .. 1 05
Full- Time Equivalent City Government Employees by Function/Program ............................................106
Operating Indicators by Function/Program............................................................................................. 108
Capital Asset Statistics by Function/Program......................................................................................... 110
REGULATORY SECTION (UNAUDITED):
Comparative Balance Sheet - General Fund............................................................................................ 113
Balance Sheet - Enterprise Funds (Traditional Format) ........................................................................... 114
Statement of Revenues, Expenses and Changes in Retained Earnings -Enterprise Funds
(Traditional Format) ........................................................................................................................... 116
Statement of Cash Flows - Enterprise Funds (Traditional Format) ..........................................................118
Balance Sheet - Internal Service Funds (Traditional Format) .................................................................. 122
Statement of Revenues, Expenses and Changes in Retained Earnings - Internal Service Funds
(Traditional Format) ........................................................................................................................... 124
. A"
~j(!~~
,
\
\
. :)1' ~ ~
~ ~ ~
215 E. MCKINNEY DENTON, TEXAS 76201 - (940) 349-8200 -FAX (940) 349-7206
February 9, 2007,
TO: The Honorable Mayor, Members of the City Council and Citizens of the City of Denton
It is with great pleasure we present to you a copy of the Comprehensive Annual Financial Report (CAFR) of the
City of Denton (the City) for the fiscal year ended September 30, 2006. The responsibility for both the accuracy of
the presented information and the completeness and fairness of the presentation of the data, including all
disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all
material respects and is reported in a manner designed to present fairly the end results of operation of the various
funds of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial
activities have been included.
The CAFR is presented in four sections: Introductory, Financial, Statistical and Regulatory. The Introductory
Section includes this transmittal letter, the City's organizational chart, and a list of principal officials. The
Financial Section includes the Management's Discussion and Analysis (MD&A), Basic Financial Statements,
Required Supplementary Information, Combining and Individual Fund Financial Statements and Other
Supplemental Information, as well as the independent auditors' report. The Statistical Section includes selected
financial and demographic information, generally presented on a multi-year basis. The Regulatory Section includes
traditional format financial statements for the utility and internal service funds.
Management's discussion and analysis (MD&A) immediately follows the independent auditors' report and
provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complement
this letter of transmittal and should be read in conjunction with it.
Profile of the Government
The City of Denton was incorporated September 26, 1866. The City operates as a home rule city, under a
council-manager form of government and provides a full range of services as authorized by its charter, such as
public safety (police and fire protection); public works (construction and maintenance of highways, streets and
infrastructure); parks and recreation; electric, water and wastewater utilities; solid waste; and general administrative
services. This report includes all funds of the City.
Local Economy
The City of Denton is located in the northern portion of the Dallas/Fort Worth Consolidated Statistical Area
(CSMA). The City is a part of the Dallas/Fort Worth Metroplex, and is situated at the apex of a triangle based by
Dallas (38 miles to the southeast) and Fort Worth (36 miles to the southwest) providing excellent access to and
from all parts of the area. Due to its proximity to Dallas and Fort Worth, Denton enjoys a low average
unemployment rate of 3.1 percent compared to the state average of 5.1 percent. With the expansion of both its
hospitals and other medical facilities, Denton is well on its way to becoming a regional medical destination serving
north Texas and southern Oklahoma. Denton is also home to two universities that have a combined enrollment of
more than 44,800 students.
- 1 -
Fiscal year 2005-06 brought exciting news in economic development. Listed below are just a few of the highlights.
. The Denton Towne Crossing, a 43-acre retail development began construction in the southeastern corner of
Brinker Road and Loop 288, is nearing its completion of 340,000 square feet of retail space. Several
restaurant and retail pads, including a banking center, are now complete, leaving one retail-building site
under construction. Home Depot and Super Target opened for business in 2006.
. Unicorn Lake's mixed-use development continues construction. The master plan for the development
includes restaurants, residential areas, commercial areas, and park trails. It incorporates the urban sty Ie
development of residential over retail along the lake with a public facility. The most current phase to be
completed is a 2,993 square foot commercial office building. The Brick House Gym will also locate in the
center with a 12,676 square foot facility in 2007.
. The Denton Municipal Airport has approximately 72,585 square feet of new space in the form of three
aircraft hangars with a valuation of $2,216,462.
. Denton Regional Medical Center expanded, adding 27,431 square feet of medical office space. Located
adjacent to North Texas Hospital, the North Texas Long Term Acute Care (38,041 square feet), Caring for
Women (13,402 square feet), and the Texas Back Institute (10,076 square feet) have a combined valuation
of $8,506,863.
. Granite Point Phase I has constructed two speculative buildings for a combined 297,500 square feet of
space. Other office/warehouse buildings include 7,540 square feet for Spilde-Harrison; Two buildings for
CR Smith Investments totaling 28,678 square foot; 9,997 square feet of office and warehouse space for
Bobcat; 3,200 square feet for a new steel building for Pioneer Equipment Rental; and 8,100 square feet for
a new training center at Peterbilt Motors Company.
Major Initiatives
According to recent projections from the North Central Texas Council of Governments, the City is expected to
grow at a rate of 4-5 percent annually over the next several years. The City is projected to reach a population of
approximately 131,738 by the end of2010.
Growth continues to increase demand for City of Denton services. Sales tax, the second largest revenue source for
the City's General Fund, continues to increase. For fiscal year 2005-06 sales tax revenue increased 7.08 percent
over the prior year's receipts. For fiscal year 2006-07, sales tax revenue is projected at 2.5 percent over fiscal year
2005-06 receipts due to several sales tax sharing economic development agreements becoming active.
The City's tax base has grown considerably over the last few years. The Denton Central Appraisal District's fiscal
year 2005-06 certified appraisal roll shows an increase of 9.5 percent over the fiscal year 2004-05 certified value
and an increase of 8.23 percent over the final fiscal year 2003-04 value (including supplements). A tax increase of
one cent was approved for fiscal year 2005-06. This revenue will be used for operations and maintenance expenses
on capital improvement projects associated with the 2000 bond program.
Public safety continues to be a major initiative for the City. The City's new Central Fire Station 7 is anticipated to
open February 2007. Fifteen firefighters were hired in fiscal year 2005-06 so that their training will be complete
prior to the opening of Fire Station 7. Completion of a Public Safety Training Facility Master Plan is planned for
2006-07 and design of the facility to be constructed on the recently purchased 88-acre site is scheduled to begin
shortly thereafter.
The Police Department added eight positions and necessary vehicles and equipment for fiscal year 2005-06.
The City has received a grant of $400,000 from the Texas Department of Transportation (TxDOT) for the design
and construction of a 4,500 square-foot, multi-purpose airport terminal facility and parking lot improvements at the
airport. Design for the facility was completed in 2005-06 and construction is scheduled for 2007. Other Airport
initiatives started in 2005-06 were the design and construction of a parallel taxiway and an apron expansion.
- ii -
The Solid Waste Department implemented several service enhancements. Along with the transition to residential
weekly cart service from bag service, the department introduced a household hazardous waste curbside collection
and disposal program.
The City's demand for library services continues to grow, and expansion of the South Branch Library was approved
by voters in the 2005 bond election. Design of the expansion was complete in 2005-06 and construction is
scheduled for 2007.
Financial Information
The City's management team is responsible for establishing and maintaining internal controls designed to ensure
that the assets of the City are protected from loss, theft, or misuse and to ensure that adequate accounting data is
compiled to allow for the preparation of financial statements in conformity with generally accepted accounting
principles. Internal controls are designed to provide reasonable but not absolute assurance that these objectives are
met. The concept of reasonable assurance recognizes that (1) the cost of the controls should not exceed the benefits
likely to be derived and (2) the valuation of cost and benefits requires estimates and judgments by management.
Single Audit
As a recipient of federal and state grant awards, the City is also responsible for ensuring that adequate internal
controls are in place to ensure compliance with applicable state and federal laws and regulations. These controls
are subject to periodic evaluation by management. As a part of the City's single audit, tests are conducted to
determine that the City has complied with applicable laws and regulations related to federal awards.
Budgetary Controls
The City maintains budgetary controls to ensure compliance with legal prOVISIons embodied in the annual
appropriated budget approved by the City Council. Activities of the General Fund, Special Revenue Funds
(Recreation Fund, Police Confiscation Fund, Tourist and Convention Fund, and Emily Fowler Library Fund), Debt
Service Fund, Enterprise Funds, and Internal Service Funds (excluding Risk Retention) are included in the annual
operating budget. A capital improvement plan is approved each year. The level of budgetary control (i.e., the level
at which expenditures cannot legally exceed the appropriated amount) is established by function activity within an
individual fund. The City maintains an encumbrance accounting system as one technique of accomplishing
budgetary controls and a technique of budgetary "lock out" which will prevent a transaction from exceeding legally
appropriated budgetary amounts.
As demonstrated by the statements and schedules included in the financial section of this report, the City continues
to meet its responsibility for sound financial management.
Enterprise Operations
The City's enterprise fund operations consist of a utility system and solid waste operations. The City's utility
system provides electric, water and wastewater services. Electric operations increased various base rates. There
were no retail rate changes in fiscal year 2005-06 for the City's water utility system operations. Wastewater
operations increased retail and wholesale customers' rate by 6 percent. Solid waste introduced City-wide once per
week cart service. By transitioning to once per week cart service, solid waste rates for a 90-gallon cart were
$.50/month less than twice per week bagged service. In addition, curbside recycling rates increased by $0.51. The
utilities are planning for future growth with the completion of the new Ray Roberts water treatment plant and the
related 54" water transmission line as well as the Pecan Creek water reclamation plant expansion.
- iii -
Internal Service Operations
The internal service operations consist of the Materials Management, Fleet Services, Motor Pool, Risk Retention,
and Technology Services funds. The Materials Management Fund accounts for the financing of goods provided by
the Warehouse to other City departments. The Fleet Services Fund accounts for the financing of goods and services
provided by the municipal garage to other departments within the City. The Motor Pool Fund is responsible for the
purchase of City vehicles not budgeted in other funds. The Risk Retention Fund accounts for the accumulation of
resources for the payment of workers' compensation, general liability claims, and insurance policies. The
Technology Services Fund provides computer-programming services and systems analysis. Reprographics, which is
part of the Technology Services Fund, provides imaging, print shop, and office services to City departments.
Fiduciary Operations - Agency Funds
The Agency Funds consist of Payroll, Employee Insurance and Other Agency Funds. The Payroll Fund is
responsible for the collection and payment of the City's payroll and associated liabilities. Employee Insurance
Fund accounts for City and employee contributions to pay for employee health and life insurance premiums. Other
Agency Funds account for various accumulations of resources for non-City entities.
Debt Administration
The City has developed a plan for issuing annual General Obligation Bonds that are approved by voters in a capital
improvements plan. Certificates of Obligation are used in accordance to the City Debt Issuance Policy to finance
facilities, vehicles, and equipment.
Cash Management
The City follows an active program of cash management, keeping all temporarily idle funds in interest-bearing
accounts. These accounts are in the form of money market (government-based) funds, u.S. Treasury issues, and
federal government agency instrumentalities. On September 30, 2006, the annualized yield on investments was
4.07 percent, compared to 3.04 percent and 2.42 percent for the same period in 2005 and 2004, respectively. Funds
available for investment at September 30, 2006 were $294.2 million, which is an increase from $240.6 million in
2005 and an increase from $260.3 million in 2004. The City's investment policy is to safeguard assets with a
minimal amount of risk, while maintaining the necessary level of liquidity and maximizing the yield on
investments. Accordingly, all of the City's deposits are either insured by the Federal Deposit Insurance
Corporation or are collateralized by governmental securities. A third-party financial institution in the City of
Denton's name holds all collateral for deposits. An outside trustee appointed by the City holds the investments of
the Deferred Compensation Fund, in which the City participates, separately from those of other City funds. State
statutes authorize the City to invest in obligations of the u.S. Treasury and u.S. agencies; obligations of the State of
Texas and related agencies; fully collateralized repurchase agreements; local government investment pools; SEC-
registered no-load, money market mutual funds; fully collateralized certificates of deposit; and municipal securities
of any state rated "AA" or above by a nationally recognized rating service.
Risk Management
The City has maintained a very aggressive program to increase safety awareness and training. Incentive programs,
transitional duty, medical-case management, and cost containment should continue to contain workers'
compensation expenditure growth in the future. Legal expenditures for general liability issues have spiked in
previous years due to specific cases that have now been settled.
- iv -
Independent Audit
The City Charter requires an independent audit of the accounts of the City by an independent auditor. The
accounting firm of KPMG LLP was selected by the City Council to perform the annual audit. In addition to
meeting the requirements set forth in the City Charter, the audit was also designed to meet the requirements of the
Single Audit Act Amendments of 1996 and related OMB Circular A-133.
Awards
The Government Finance Officers' Association (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, 2005, for the twenty-first consecutive year. In order to be awarded the Certificate of Achievement in
Financial Reporting, the City published an easily readable and efficiently organized Comprehensive Annual
Financial Report. This report satisfies both generally accepted accounting principles and applicable legal
requirements. The Certificate of Achievement is held for a period of one year only. We believe our current
Comprehensive Annual Financial Report continues to meet the Certificate of Achievement requirements, and we
are submitting it to GFOA to determine its eligibility for another certificate.
The City also received the GFOA award for Distinguished Budget Presentation for its fiscal year 2005-06 Annual
Budget. In order to qualify for the Distinguished Budget Presentation Award, the City's budget document was
judged according to its compliance with specific guidelines established by GFOA. These guidelines help ensure
that Denton's budget is distinguished as an operations guide, financial plan, policy document, and communication
device. The City has submitted its fiscal year 2006-07 Annual Budget to GFOA to determine its eligibility for
another certificate. We believe it continues to meet the Distinguished Budget Presentation Award criteria.
In 2006, the City's Purchasing department earned the Excellence in Procurement Award from the National
Purchasing Institute, Inc. (NPI) for 2005 for the eighth year in a row. This award is achieved by those
organizations that demonstrate excellence in procurement by achieving a high score on standardized criteria
designed to measure innovation, professionalism, productivity, and leadership. NPI represents purchasing officials
employed by national, state, and local governments; educational institutions; and tax-supported and public entities
throughout the country.
Acknowledgements
We would like to thank the City Council for their strong leadership and support that helped make the presentation
of this report possible. We would also like to thank the Finance department staff, department directors, division
heads and especially the Accounting Division staff for their diligent efforts in the preparation of the annual
financ ial report.
~- .-;-''U
, ~ >.
.. -- '!II .
~
~v~
Jon Fortune
Assistant City Manager
Jeniffer Varley
Interim Chief Financial Officer
- v-
CITY OF DENTON, TEXAS
ORGANIZATIONAL CHART
SEPTEMBER 30, 2006
I Citizens I
City Council
Boards & Commissions I- -I City Attorney
Municipal Judge l-
I City Manager II
Intemal Audit ~ -1 Executive Administrator of Manage 1=. Ii i
& Operation Analysis & Public Information Services
- City Manager's Office I
- Public Information Office I
- Cable Television I
- Reprographics I
Budget ~ -1 Human Resources I
Economic Development/ ~
Dovvntovvn Development
I I
I Assistant City Manager I I Assistant City Manager I
- Police Department / Animal Services II - Electric Operations I
- Fire Department II - Water Operations I
- Building Inspections II - Wastevvater Operations I
- Facilities Management II - Drainage Operations I
- Fiscal Operations II - Solid Waste Operations I
- Technology Services II II -:-i .........ffic Operations / Street Li~::F II ir I~ II
- Materials Management II - Streets I
- Fleet Management II - Parks & Recreation I
- Motor Pool II - Library I
- Planning I
- Airport I
- Code Enforcement I
- vi -
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Denton
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2005
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.
President
~/~
Executive Director
- vii -
Title
CITY OF DENTON, TEXAS
List of Principal Officials
September 30, 2006
ELECTED OFFICIALS
Mayor
Mayor Pro-Tern
Deputy Mayor Pro-Tern
Councilmember
Councilmember
Councilmember
Councilmember
Title
CITY OFFICIALS
Interim City Manager
Assistant City Manager
City Attorney
Municipal Judge
City Secretary
- viii -
Name
Perry McNeill
Pete Kamp
Joe Mulroy
Charlye Heggins
Jack Thomson
Bob Montgomery
Guy McElroy
Name
Howard Martin
Jon Fortune
Ed Snyder
Robin Ramsay
Jennifer Walters
CITY OF DENTON, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2006
The City of Denton's Management's Discussion and Analysis is designed to (a) assist the reader in focusing on
significant financial issues, (b) provide an overview of the City's financial activity, (c) identify changes in the
City's financial position (its ability to address the next and subsequent years' challenges), (d) identify any
material deviations from the financial plan (the approved budget), and (e) identify individual fund issues or
concerns.
Since the Management's Discussion and Analysis (MD&A) is designed to focus on the current year's activities,
resulting changes and currently known facts, please read it in conjunction with the Transmittal Letter
(beginning on page i) and the City's financial statements (beginning on page 11).
FINANCIAL HIGHLIGHTS
. The assets of the City exceeded its liabilities at the close of the fiscal year ended September 30, 2006, by
$473,095,449 (net assets). Of this amount, $121,195,876 (unrestricted net assets) may be used to meet the
government's ongoing obligations to citizens and creditors.
. The City's total net assets increased by $45,766,034. This increase can be attributed to the net revenue of
the governmental activities, business-type activities and the contribution of capital assets by developers.
. As of September 30, 2006, the City's governmental funds reported combined fund balances of
$53,871,114, an increase of $12,205,141 in comparison with the prior fiscal year, due to increased revenue
from taxes. Approximately 35% of the $53,871,114, $18,798,728, is available for spending at the
government's discretion (unreserved fund balance).
. At the end of the fiscal year, the unreserved and undesignated fund balance for the General Fund was
$13,264,027, or 18.84% of budgeted general fund expenditures.
. The City's total noncurrent liabilities increased by $7,268,702 during the fiscal year. The primary reason
for the increase was the issuance of $8.5 million of revenue bonds, $3.7 million of general obligation
bonds, and $12.6 million of certificates of obligation bonds along with the normal pay down of general
obligation bonds and certificates of obligation bonds of $9.1 million, and the normal pay down of revenue
bonds of $12.3 million.
OVERVIEW OF THE FINANCIAL STATEMENTS
The Management's Discussion and Analysis is intended to serve as an introduction to the City of Denton's
basic financial statements. The City's basic financial statements comprise three components: (1) government-
wide financial statements, (2) fund financial statements and (3) notes to the financial statements. This report
also contains other supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements. The government-wide financial statements are designed to provide
readers with a broad overview of the City's finances in a manner similar to private-sector business.
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.
The statement of activities presents information showing how the City's net assets changed during the most
recent fiscal year. All of the current year's revenues and expenses are taken into account regardless of when
cash is received or paid. Thus, revenues and expenses are reported in this statement for some items that will
only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but not used vacation leave).
Both the statement of net assets and the statement of activities are prepared using the accrual basis of
accounting as opposed to the modified accrual basis.
In its Statement of Net Assets and the Statement of Activities, the City is divided between two kinds of
activities:
. Governmental activities. Most of the City's basic services are reported here, including police, fire,
libraries, development, public services and operations, public works, building inspection, technology
3
CITY OF DENTON, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
SEPTEMBER 30, 2006
services and general administration. Property taxes, sales taxes and franchise taxes finance most of these
activities.
. Business-type activities. The City charges a fee to customers to cover the cost of services it provides. The
City's utility system (electric, water and wastewater) and solid waste activities are reported here.
The government-wide financial statements can be found on pages 11 - 13 of the report.
Fund Financial Statements. A fund is a grouping of related accounts used to maintain control over resources
that have been segregated for specific activities or objectives. Fund financial statements provide detailed
information about the most significant funds, not the City as a whole. Some funds are required to be
established by state law or bond covenants. However, the City Council establishes many other funds to help it
control and manage money for particular purposes or to show that it is meeting legal responsibilities for using
certain taxes, grants and other monies. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds and fiduciary funds.
. Governmental funds. The majority of the City's basic services are reported in governmental funds, which
focus on how money flows into and out of those funds and the balances left at year-end that are available
for spending. These funds are reported using an accounting method identified as the modified accrual basis
of accounting, which measures cash and all other financial assets that can readily be converted to cash. The
governmental fund statements provide a detailed short-term view of the City's general government
operations and the basic services it provides. Governmental fund information helps the reader determine
whether there are more or fewer financial resources that can be spent in the near future to finance the City's
programs. By comparing information presented for governmental funds with similar information presented
for governmental activities in the government-wide financial statements, readers may better understand the
long-term impact of the government's near-term financing decisions. The relationship or differences
between governmental activities (reported in the Statement of Net Assets and the Statement of Activities)
and governmental funds is detailed in a reconciliation following the fund financial statements.
The City of Denton maintains 11 individual governmental funds. Information is presented separately in the
governmental funds balance sheet and in the governmental funds statement of revenues, expenditures and
changes in fund balances for the general fund, debt service fund and capital projects fund, all of which are
considered to be major funds. Data from the other eight governmental funds are combined into a single,
aggregated presentation. Individual fund data for each of these non-major governmental funds is provided
in the form of combining statements elsewhere in this report.
. Proprietary funds. The City charges customers for certain services it provides, whether to outside
customers or to other units within the City. These services are generally reported in proprietary funds.
Proprietary funds are reported in the same manner that all activities are reported in the Statement of Net
Assets and the Statement of Activities. In fact, the City's enterprise funds (a component of proprietary
funds) are similar to the business-type activities that are reported in the government-wide statements but
provide more detail and additional information, such as cash flows. The internal service funds (the other
component of proprietary funds) are utilized to report activities that provide supplies and services for the
City's other programs and activities, such as the City's municipal warehouse, the City's self-insurance fund
and equipment maintenance function. Because these services benefit both governmental and business-type
functions, they have been included in both the governmental and business-type activities in the
government-wide financial statements.
The City of Denton maintains four enterprise funds. The City uses enterprise funds to account for its
electric, water and wastewater systems and solid waste operations. The funds provide the same type of
information as the government-wide financial statements, only in more detail and include some of the
internal service fund-type activity. The City considers all enterprise funds to be major funds.
4
CITY OF DENTON, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
SEPTEMBER 30, 2006
. Fiduciary funds. 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. Agency funds are a component of fiduciary
funds. Agency funds differ from other fiduciary funds in that they do not typically involve a formal trust
agreement. Agency funds are used to account for situations where the City's role is purely custodial, such
as receipt, temporary investment and remittance of fiduciary resources to individuals, private organizations,
or other governments.
The City maintains three fiduciary funds. The City uses agency funds to account for the collection and
payment of the City's payroll and associated liabilities, employee-purchased insurance and other similar
relationships.
Notes to the financial statements. The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements. The notes to the
financial statements can be found on pages 29 - 56 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As of September 30, 2006, the City's combined net assets were $473,095,449, of which $138,202,638 can be
attributed to governmental activities and $334,892,811 attributed to business-type activities. This analysis
focuses on the net assets (Table 1) and changes in net assets (Table 2) of the City's governmental and business-
type activities.
The largest portion of the City's net assets (67.7%) reflects its investment in capital assets (e.g., land, building,
machinery and equipment), less any related debt used to acquire those assets that is still outstanding. The City
uses these capital assets to provide services to citizens; consequently, these assets are not available for future
spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted
that the resources needed to repay this debt must be provided from other sources, since the capital assets
themselves cannot be used to liquidate these liabilities.
Table 1
Net Assets
(in thousands)
Governmental Business-type
Activities Activities Total
2006 2005 2006 2005 2006 2005
Current and other assets $ 81~555 $ 64~ 709 $246~829 $222~072 $328~384 $286~781
Capital assets 180~465 177~493 422~062 402~296 602~527 579~789
Total assets 262,020 242,202 668,891 624,368 930,911 866,570
Long-term liabilities outstanding 107,706 100,426 283,310 286,048 391,016 386,474
Other liabilities 16~ 111 15~694 50~688 37~074 66~ 799 52~768
T otalliabilities 123,817 116,120 333,998 323,122 457,815 439,242
Net assets:
Invested in capital assets~
net of related debt 107~410 1 07 ~ 112 213~075 193~657 320~485 300~769
Restricted 440 451 30~975 30~864 31~415 31 ~315
Unrestricted 30~353 18~ 519 90~843 76~726 121~ 196 95~245
Total net assets $138~203 $126~082 $334~893 $301~247 $473~096 $427~329
5
CITY OF DENTON, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
SEPTEMBER 30, 2006
Governmental activities and business-type activities increased the City's net assets by $12,120,086 and
$33,645,948, respectively. The key elements of these increases are contained in Table 2.
Table 2
Changes in Net Assets
(in thousands)
Governmental Business-type
Activities Activities Total
2006 2005 2006 2005 2006 2005
Revenue:
Program Revenue:
Charges for services $13,965 $ 11,999 $221,151 $188,258 $235,116 $200,257
Operating grants and contributions 3,713 2,996 3,713 2,996
Capital grants and contributions 5,537 7,426 10,023 9,809 15,560 1 7,235
General Revenue:
Property tax 30,001 26,679 30,001 26,679
Sales tax 20,343 18,998 20,343 18,998
Franchise tax 16,500 14,250 16,500 14,250
Hotel occupancy tax 1,133 989 1,133 989
Beverage tax 258 216 258 216
Bingo tax 24 25 24 25
Investment Income 1,967 1,149 5,971 3,252 7,938 4,401
Miscellaneous 3,892 4,218 1,955 1,036 5,847 5,254
Total revenue 97 ~333 88~945 239~ 1 00 202~355 336~433 291~300
Expenses:
General government 22,166 26,676 22,166 26,676
Public safety 36,627 33,643 36,627 33,643
Public works 12,485 11,987 12,485 11,987
Parks and recreation 10,497 9,913 10,497 9,913
Interest on long-term debt 4,333 4,176 4,333 4,176
Electric 145,368 132,830 145,368 132,830
Water 26,708 22,381 26,708 22,381
Wastewater 19,028 18,808 19,028 18,808
Solid waste 13,455 13,169 13,455 13,169
Total expenses 86~ 1 08 86~395 204~559 187~188 290~667 273~583
Increase in net assets before transfers 11 ~225 2~550 34~541 15~ 167 45~766 17~717
Transfers 895 865 (895) (865)
Increase in net assets 12~ 120 3~415 33~646 14~302 45~766 17~717
Net assets at beginning of year - 126,082 122,667 301,247 286,945 427 ,329 409,612
Net assets at end of year $138,202 $126,082 $334,893 $301,247 $473,095 $427,329
Governmental activities. The most significant governmental activities expense was in providing public
safety, which incurred expenses of $36,626,635. These expenses were funded by revenues collected from a
variety of sources, with the largest being from property taxes, which are $30,000,847 for the fiscal year ended
September 30, 2006. The most significant portion of public safety is the cost of personnel, which totaled
$28,549,149. Other significant governmental activities expense for the City includes general government,
which incurred $22,165,661 in expenses, of which $11,935,769 represented personnel charges.
6
CITY OF DENTON, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
SEPTEMBER 30, 2006
Business-type activities. Business-type activities increased the City's net assets by $33,645,948, accounting
for 73.5% of the total growth in the government's net assets. A key element of this increase is capital
contributions, emerging as a major revenue source for the Water and Wastewater funds during the current fiscal
year, producing $10,022,654 in revenue. Contributions of assets arise from new property development within
the City. Charges for services increased $32,893,779 due to various rate increases and increased sales. The
expense increase between fiscal years 2005 and 2006 reflects increased costs of production.
FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
Governmental funds. The focus of the City's governmental funds is to provide information on near-term
inflows, outflows, and balances of resources available to spend. Such information is useful 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 the end of the current fiscal year, the City's governmental funds reported a combined ending fund
balance of $53.9 million, an increase of $12.2 million in comparison with the prior year. Approximately $18.8
million constitutes unreserved, undesignated fund balance, which is available for spending at the government's
discretion. In addition to unreserved, undesignated fund balance, the governmental funds reported unreserved,
designated fund balance of $1.5 million. The remainder of the fund balance is reserved to indicate that it is
not available for new spending because it has already been committed 1) to purchase or construct capital assets
($32.8 million), 2) to pay debt service ($0.4 million), or 3) to liquidate contracts and purchase orders of the
prior period ($0.2 million).
The general fund is the chief operating fund of the City. At September 30, 2006, the unreserved and
undesignated fund balance of the general fund was $13.3 million, or 18.84% of budgeted general fund
expenditures. The unreserved and undesignated fund balance of the general fund increased by $3.5 million
during the current fiscal year due to expenditures being less than anticipated and due to higher than anticipated
revenues from return on investment and franchise fees.
The entire balance of the capital projects fund is reserved for capital construction and acquisition. At the end of
the fiscal year, the capital projects fund has a fund balance of $32.8 million, and increase of $5.2 million. In
2006, the City received $9.5 million of proceeds from the issuance of debt while expending $7.5 million on
construction and acquisition. In addition to 2006 debt proceeds, the capital projects fund received $1.0 million
in interest income and $1.4 million of revenue related to gas wells.
The debt service fund has a total fund balance of $0.4 million all of which is reserved for the payment of debt
service. The overall decrease in the debt service fund balance was $11,388.
Proprietary funds. The City's proprietary funds provide the same type of information found In the
government-wide financial statements, but in more detail.
Unrestricted net assets in Electric, Water, and Wastewater at September 30, 2006 are $62.4 million, $17.6
million, and $5.6 million respectively. Solid Waste has unrestricted net assets of $2.7 million. The results
reflect an increase of unrestricted net assets in each fund, specifically $3.6 million in Electric, $5.1 million in
Water, $4.0 million in Wastewater, and $0.3 million in Solid Waste. Other factors concerning the finances of
these funds have already been addressed in the discussion of the City of Denton's business-type activities.
7
CITY OF DENTON, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
SEPTEMBER 30, 2006
GENERAL FUND BUDGETARY HIGHLIGHTS
In May 2006, the City Council amended the original budget (Ordinances 2006-142) from $69,921,911 to
$70,421,911 to allow for the appropriation of funds for an adjustment of $500,000 for the increase cost of
electricity .
For fiscal year 2005-06, General Fund actual expenditures (including transfers) on a budgetary basis were
$68.9 million compared to the amended budget of $70.4 million. The $1.5 million variance was primarily due
to reduced personnel costs for the general government. Actual revenue (including transfers) on a budgetary
basis was $73.9 million compared to the original budget of $70.1 million. Of the $3.8 million variance,
approximately $2.1 million was due to increased franchise fees and collections of sales taxes were $0.9 million
above expectations.
Over the years, the Denton City Council has followed a policy of maintaining a general fund balance in order to
plan for unforeseen emergencies and place the City in a more favorable position. In 1997-1998, the policy
level was increased from 10% to 12.5% of general fund expenditures. In 1999-2000, the percentage was
increased to 13% and in 2004-2005 to 13.5%. The 2005-06 budget increased the policy level to 14.0%. The
City of Denton's unreserved and undesignated fund balance at September 30,2006 is $13.3 million, or 18.84%
of budgeted expenditures.
Below is a listing of the ending unreserved balances for the past three years, as well as fiscal year 2005-06
projected and actual. For those years where the actual ending balance has exceeded the policy level, the
following year's budget has included utilization of that amount for one-time expenditures. By using the fund
balance for one-time expenditures only, the financial impact on future budgets is eliminated.
Actual Actual Actual Projected Actual
9/30/03 9/30/04 9/30/05 9/30/06 9/30/06
Unreserved balances $8,442,942 $9,504,988 $9,718,368 $9,789,068 $13,264,027
% of total budgeted expenditures 13.64% 14.68% 13.98% 14.00% 18.84%
Policy level 13.00% 13.00% 13.50% 14.00% 14.00%
The largest revenue source of the General Fund's budget was the ad valorem tax. Denton's ad valorem tax rate
is comprised of two components. The first is the operations and maintenance component that is used to
calculate revenue for the City's General Fund operations. The second component is the debt portion that is
used to calculate revenue to pay the City's general debt service obligations. The Denton Central Appraisal
District's certified appraisal roll shows an increase of 9.47% over the prior year certified value and 8.26% over
the final 2004 value (including supplements). This increase consisted of$213.3 million of new value added for
2005 and a $201.1 million increase in value for property on the tax rolls in 2004. The 2005-06 ad valorem tax
rate was increased by $0.01 to $.60815 per $100 of valuation, which was used to fund additional police officers
as well a 1 % cost of living increase for all employees.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital assets. At the end of fiscal year 2006, the City had $602,526,832 invested in a broad range of capital
assets, including police and fire equipment, buildings, park facilities, roads, bridges and water and sewer lines
(see Table 3 on the following page). This amount represents a net increase (including additions and
deductions) of $22,737,443 or 3.9% over the prior fiscal year.
8
Land
Landfill improvements
Buildings and improvements
Plant, machinery and equipment
Water rights
Infrastructure
Construction in progress
Total capital assets
CITY OF DENTON, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
SEPTEMBER 30, 2006
Table 3
Capital Assets at Year-end
(Net of Accumulated Deoreciation.. in Thousands)
Governmental Business-type
Activities Activities
2006 2005 2006 2005
$ 7~830 $ 7~848 $ 9~780 $ 8~467 $
549 899
4,171
98,879
57,795
213,637
37,251
$422~062
39,084
28,666
36,172
28,660
100,758
58,492
203,403
30,277
$402~296
Totals
2006 2005
17 ~61 0 $ 16~315
549 899
43,255 36,172
127,545 129,418
57,795 58,492
308,892 297,688
46,881 40,805
$602~527 $579~789
95,255
9,630
$180~465
94,285
10,528
$177~493
This year's major additions included:
Description
Amount
$ 4,265,374
2,084,674
1,966,132
944,279
771,387
723,189
620,676
$ 11,375,711
Cooper Creek Lift Station
Civic Center Renovation
Emily Fowler Building Renovation
Colorado Street Resurfacing
Pockrus Substation
Residential Refuse Carts
Locus Transformer
Total
Additional information on the City's capital assets can be found in note IV. D. on pages 40 - 42 of this report.
Debt. At year-end, the City had $401.4 million in bonds and notes outstanding as compared to $398.1 million
at the end of the prior fiscal year, an increase of 0.8%, as shown in Table 4.
General obligation bonds
Certificates of obligation
Revenue bonds
Notes
Total
Governmental
Activities
2006 2005
$ 58,743 $58,871
46,700 41,792
Table 4
Outstanding Debt at Year-end
(in thousands)
Business-type
Activities
2006 2005
$ 3,582 $ 3,904
11,975 9,233
277,305 281,120
3,141 3,141
$296,003 $297,398
Totals
$105,443
$100,663
2006
$ 62,325
58,675
277,305
3,141
$401,446
2005
$ 62,775
51,025
281,120
3,141
$398,061
These amounts do not include net unamortized premiums/(discounts) of $7,837,894 or net deferred gain/Closs)
on refunding of ($8,670,432).
9
CITY OF DENTON, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
SEPTEMBER 30, 2006
During the current fiscal year, the City issued debt in July 2006. The new debt resulted primarily from the
issuance of $3,695,000 in general obligation bonds, $12,665,000 in certificates of obligation, and $8,515,000 in
utility revenue bonds.
Moody's Investor's Service, Inc. has given the City's General Obligation Bonds and the Certificates of
Obligation a rating of "Aa3." Standard and Poor's Corporation has given both the City's General Obligation
Bonds and Certificates of Obligation an "AA-" rating. The City's Utility Revenue Bonds carry "AI" and
"A+" ratings by Moody's and Standard and Poor's respectively. The City is permitted by Article XI, Section 5
of the State of Texas Constitution to levy taxes up to $2.50 per $100 of assessed valuation for general
governmental services including the payment of principal and interest on general obligation long-term debt.
The current ratio of tax-supported debt to certified assessed value of all taxable property is 2.19%.
Other long-term liabilities. The City maintains a self-insurance program for general liability, auto liability,
public officials' liability, errors and omission liability, police professional liability , and workers' compensation.
Private insurance companies cover claims for property loss over $50,000 per occurrence and for workers'
compensation and liability over $500,000 per occurrence. The City has a reserve for claims and judgments of
$2.9 million outstanding at year-end compared with $1.8 million at the end of the prior fiscal year. Other
obligations include accrued vacation pay and sick leave. More detailed information about the City's long-term
liabilities is presented in Note IV. G., on pages 45 - 50 of this report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
All indicators are pointing to continued growth of the Denton community, and the 2006-07 Budget includes the
resources to provide City services to meet demands. The 2006-07 budget includes a $.01837/$100 valuation
increase in the ad valorem tax rate to provide enhanced services for police, streets, code enforcement and
library services. Sales tax revenue is projected to increase 2.5%, and the general fund balance reserve has been
increased to 14.5% of budgeted expenditures.
The 2006-07 budget includes no base rate increases for electric customers. Increased attention to water
conservation has precipitated a 2% increase in retail water rates for high volume water customers,
predominantly for irrigation. No base rates changes are proposed for wastewater customers, while residential
solid waste customer rates will receive minor rate adjustments and commercial solid waste rates will increase
4%.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City's finances for all those with an
interest in the City's finances. Questions concerning any of the information provided in this report or requests
for additional financial information should be addressed to the City of Denton Finance Department, 215 E.
McKinney, Denton, Texas 76201.
10
CITY OF DENTON, TEXAS Exhibit I
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2006
Primary Government
Governmental Business-type
Activities Activities Total
ASSETS:
Current assets:
Cash, cash equivalents and investments,
at fair value $ 35,164,460 $ 100,005,402 $ 135,169,862
Receivables, net of allowances:
Taxes 4,151,426 4,151,426
Accounts 13,108,014 13,108,014
Un billed utility service 9,220,108 9,220,108
Interest 731,081 735,014 1,466,095
Other 2,906,655 3,840 2,910,495
Internal balances (5,768,778) 5,768,778
Due from other governments 1,791,218 1,791,218
Inventory 4,033,346 4,033,346
Prepaid items 30,746 12,567 43,313
Deferred debt issuance costs 601,005 167,445 768,450
Total current assets 43,641,159 129,021,168 172,662,327
Noncurrent assets:
Restricted assets:
Cash, cash equivalents and investments~
at fair value 35,915,679 114,635,101 150,550,780
Escrow deposits 1,934,766 281,700 2,216,466
Accrued interest 9,689 907,628 917,317
Deferred debt issuance costs 54,091 1,983,197 2,037,288
Capital assets not being depreciated:
Land 7,829,494 9,779,660 17,609,154
Construction in progress 9,630,063 37,250,781 46,880,844
Capital assets, net of accumulated depreciation:
Buildings 39,084,441 4,171,116 43,255,557
Plant, machinery and equipment 28,665,707 98,879,073 127,544,780
Infrastructure 95,254,999 213,636,790 308,891,789
Landfill improvements 549,290 549,290
Water rights 57,795,418 57,795,418
Total noncurrent assets 218,378,929 539,869,754 758,248,683
Total assets 262,020,088 668,890,922 930,911,010
LIABILITIES:
Current liabilities:
Accounts payable 3,007,119 23,920,887 26,928,006
Retaina~e payable 84,657 84,657
Deposits 3,786,395 3,786,395
Accrued interest 653,690 653,690
Due to other governments 396 396
Noncurrent liabilities due within one year 11,666,375 17,089,747 28,756,122
Other liabilities 656,690 656,690
Unearned revenue 20,218 20,218
Payable from restricted assets:
Accounts payable 21,881 958,800 980,681
Retainage payable 251,020 251,020
Accrued interest 4,681,016 4,681,016
Total current liabilities 16,111,026 50,687,865 66,798,891
Noncurrent liabilities:
Noncurrent liabilities due in more than one year 107,706,424 283,310,246 391,016,670
Total noncurrent liabilities 107,706,424 283,310,246 391,016,670
Total liabilities 123,817,450 333,998,111 457,815,561
NET ASSETS:
Invested in capital assets, net of related debt 107,410,289 213,074,701 320,484,990
Restricted:
Restricted for debt service 439,658 29,190,154 29,629,812
Restricted for capital acquisition 1,784,771 1,784,771
Unrestricted 30,352,691 90,843,185 121,195,876
Total net assets $ 138,,202,,638 $ 334,,892,,811 $ 473,,095,,449
The notes to the basic financial statements are an integral part of this statement.
11
CITY OF DENTON, TEXAS
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2006
Functions/Programs
Primary government:
Governmental activities:
General government
Public safety
Public works
Parks and recreation
Interest expense
Total governmental activities
Business-type activities:
Electric system
Water system
Wastewater system
Solid waste
Total business-type activities
Total primary government
Expenses
$ 22,165,661
36,626,635
12,485,281
10,497,241
4,333,428
86,108,246
145,368,132
26,708,095
19,027,926
13,454,556
204,558,709
$ 290,,666,,955
Charges for
Services
Program Revenues
Operating
Grants and
Contributions
$ 3,904,941
6,023,100
802,711
3,234,347
$ 2,341,699
1,170,441
200,677
13,965,099
3,712,817
149,419,800
33,436,651
23,670,458
14,624,132
221,151,041
$ 235,,116,,140
$ 3,,712,,817
General revenues:
Taxes:
Property tax
Sales tax
Franchise tax
Hotel occupancy tax
Beverage tax
Bingo tax
Investment income
Miscellaneous
Transfers
Total general revenues and transfers
Change in net assets
Net assets at beginning of year
Net assets at end of year
The notes to the basic financial statements are an integral part of this statement.
12
Capital
Grants and
Contributions
$ 30,359
5,506,427
5,536,786
3,625,072
6,397,582
10,022,654
$ 15,,559,,440
Exhibit II
Governmental
Activities
Net (Expense) Revenue and
Changes in Net Assets
Primary Government
Business-type
Activities
Total
$ (15,888,662) $ $ (15,888,662)
(29,433,094) (29,433,094)
(6,176,143) (6,176,143)
(7,062,217) (7,062,217)
( 4,333,428) ( 4,333,428)
(62,893,544) (62,893,544)
4,051,668 4,051,668
10,353,628 10,353,628
11,040,114 11,040,114
1,169,576 1,169,576
26,614,986 26,614,986
(62,893,544) 26,614,986 (36,278,558)
30,000,847 30,000,847
20,343,413 20,343,413
16,499,994 16,499,994
1,132,500 1,132,500
257,950 257,950
24,260 24,260
1,967,473 7,298,870 9,266,343
3,892,087 627,198 4,519,285
895,106 (895,106)
75,013,630 7,030,962 82,044,592
12,120,086 33,645,948 45,766,034
126,082,552 301,246,863 427,329,415
$ 138,,202,,638 $ 334,,892,,811 $ 473,,095,,449
13
CITY OF DENTON, TEXAS
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2006
Exhibit III
Other Total
General Capital Governmental Governmental
Fund Debt Service Pro i ects Funds Funds
ASSETS:
Cash, cash equivalents and investments.
at fair value $ 11,260,085 $ 402,739 $ 32,494,877 $ 5,747,685 $ 49,905,386
Receivables, net of allowances
for uncollectibles:
Taxes 3,906,675 244,751 4,151,426
Accrued interest 209,625 396,086 35,328 641,039
Other 2,130,327 472,526 190,275 2,793,128
Interfund receivables 1,440,895 180,902 765,581 2,387,378
Due from other governments 522,658 1,268,560 1,791,218
Total assets $ 19.470.265 $ 647.490 $ 33.544.391 $ R.007.429 $ 61.669.575
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable 1,383,051 471,129 510,083 2,364,263
Retaina2e payable 84,657 84,657
Interfund payables 1,357,762 1,163,640 2,521,402
Due to other 20vernments 396 396
Other liabilities 644,683 12,007 656,690
Deferred revenues 1,,028,,258 207,,832 147,,965 786,,998 2,,171,,053
Total liabilities 4,,414,,150 207,,832 703,,751 2,,472,,728 7 " 798,,461
FUND BALANCES:
Reserved for:
Debt service 439,658 439,658
Encumbrances 242,088 242,088
Capital projects 32,840,640 32,840,640
Unreserved, designated for, reported in:
Sales tax contingency 500,000 500,000
Self insurance 500,000 500,000
Future capital projects 500,000 500,000
Code enforcement 50,000 50,000
Unreserved, undesignated reported in:
General fund 13,264,027 13,264,027
Special revenue funds 5"534,, 701 5"534,, 701
Total fund balances 15,,056,,115 439,,658 32,,840,,640 5"534,, 701 53,,871,,114
Total liabilities and fund balances $ 19.470.265 $ 647.490 $ 33.544.391 $ R.007.429 $ 61.669.575
The notes to the basic financial statements are an integral part of this statement.
14
CITY OF DENTON, TEXAS
RECONCILIATION OF THE BALANCE SHEET
OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF NET ASSETS
AS OF SEPTEMBER 30, 2006
Total fund balances - governmental funds (Exhibit III)
Amounts reported for governmental activities in the statement of net assets are
different because:
Capital assets used in governmental activities are not financial resources and
therefore are not reported as assets in governmental funds.
Certain receivables will be collected next year but are not available soon enough
to pay for the current period's expenditures and therefore are reported as
deferred revenues in the funds.
An internal charge to business-type activities is not recorded at the fund level.
Several internal service funds are used by the City's management. The assets and
liabilities of the internal service funds are included with governmental activities.
Total assets of internal service funds
Less: Capital assets reported above
Less: Total liabilities of internal service funds
Liabilities reported below
Long-term liabilities, including bonds payable, are not due and payable in the
current period and therefore are not reported as liabilities in the funds. Long-term
liabilities at year-end consist of:
General obligation bonds payable
Certificates of obligation payable
Less: Deferred charge for issuance costs
Arbitrage payable
Accrued interest on the bonds
Leases payable
Compensated absences
Total net assets of governmental activities (Exhibit I)
The notes to the basic financial statements are an integral part of this statement.
15
$ 51,202,395
(23,382,719)
(20,625,031 )
13,428,443
$ (58,742,900)
(46,700,000)
567,013
(25,968)
(653,690)
(3,559,742)
(7,323,590)
Exhibit IV
$
53,871,114
180,464,704
2,150,835
(2,468,226)
20,623,088
(116,438,877)
$
138,202,638
CITY OF DENTON, TEXAS Exhibit V
STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2006
Other Total
General Capital Governmental Governmental
Fund Debt Service Projects Funds Funds
REVENUES:
Taxes $ 41,906,626 $ 8,738,654 $ $ 1,132,500 $ 51,777,780
Licenses and permits 1,383,169 1,383,169
Franchise fees 16,499,994 16,499,994
Fines and forfeitures 4,639,922 4,639,922
Fees for services 3,661,522 3,118,382 6,779,904
Investment revenue 761,159 1,045,445 160,869 1,967,473
Intergovernmental 541,968 332,235 4,379,855 5,254,058
Miscellaneous 447,200 1,676,555 1,301,031 3,424,786
Total revenues 69,841,560 8,738,654 3,054,235 10,092,637 91,727,086
EXPENDITURES:
Current:
General government 16,304,027 56,908 4,178,071 20,539,006
Public safety 35,073,613 739,716 35,813,329
Public works 4,950,734 255,490 5,206,224
Parks and recreation 6,817,078 2,731,338 9,548,416
Capital outlay 281,258 7,571,510 1,203,334 9,056,102
Debt service:
Principal retirement 5,914,819 5,914,819
Bond issuance costs 70,745 70,745
Interest and other charges 4,210,628 4,210,628
Total expenditures 63,426,710 10,125,447 7,699,163 9,107,949 90,359,269
Excess (deficiency) of revenues
over (under) expenditures 6,414,850 (1,386,793) ( 4,644,928) 984,688 1,367,817
OTHER FINANCING SOURCES (USES):
Issuance of long-term debt 9,550,000 9,550,000
Premium on debt issuancf 49,644 49,644
Transfers in 579,878 1,375,405 933,457 1,206,278 4,095,018
Transfers out (1,867,799) (718,785) (270,754) (2,857,338)
Total other financing sources (uses) (1,287,921 ) 1,375,405 9,814,316 935,524 10,837,324
Net change in fund balances 5,126,929 (11,388) 5,169,388 1,920,212 12,205,141
Fund balances at beginning of year 9,929,186 451,046 27,671,252 3,614,489 41,665,973
Fund balances at end of year $ 15.056.115 $ 439.658 $ 32.840.640 $ 5.534.701 $ 53.871.114
The notes to the basic financial statements are an integral part of this statement.
16
CITY OF DENTON, TEXAS
RECONCILIATION OF STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES
OF GOVERNMENTAL FUNDS TO THE STATEMENT
OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2006
Exhibit VI
Net change in fund balances - total governmental funds (Exhibit V)
Amounts reported for governmental activities in the statement of activities are
different because:
$
12,205,141
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 depreciation and retirement of assets
($11,748,927=$15,830,638 - $4,081,711 internal service portion) exceeded
capital outlays ($9,056,102) in the current period.
(2,692,825)
Revenues in the statement of activities that do not provide current financial
resources are not reported as revenues in the funds. Such amounts ar(
recorded in the funds when considered available.
302,988
The net effect of various miscellaneous transactions involving capital asset~
(i.e., sales, trade-ins and donations) is to increas net assets.
5,251,153
Bond proceeds provide current financial resources to governmental funds, but
issuing debt increases long-term liabilities in the statement of net assets.
Repayment of bond principal is an expenditure in the governmental funds,
but the repayment reduces long-term liabilities in the statement of net
assets. This is the amount by which proceeds exceeded payments.
(3,635,181 )
Fund-level financials report costs related to bonds as expenditures; however,
these are deferred and amortized on the government-wide financials
(109,757)
Certain expenses reported in the statement of activities do not require the use
of current financial resources and therefore are not reported as expenditures
in governmental funds.
(399,599)
Internal service funds are used by management to charge the costs of certain
activities, such as insurance and telecommunications, to individual funds.
A portion of the net revenue (expense) of certain internal service funds is
reported with governmental activities. The amount reported with
business-type activities is $1,139,720.
1,198,166
Change in net assets of governmental activities (Exhibit II)
$
12,120,086
The notes to the basic financial statements are an integral part of this statement.
17
18
CITY OF DENTON, TEXAS Exhibit VII
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET TO ACTUAL
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2006
Variance with
Adjustments - Actual on a Final Budget -
Budgeted Amounts Actual Budgetary Budgetary Positive
Original Final Amounts Basis Basis (N egative )
REVENUES:
Taxes $ 40,781,226 $ 40,781,226 $ 41,906,626 $ $ 41,906,626 $ 1,125,400
Licenses and permits 1,504,746 1,504,746 1,383,169 1,383,169 (121,577)
Franchise fees 14,381,197 14,381,197 16,499,994 16,499,994 2,118,797
Fines and forfeitures 4,118,800 4,118,800 4,639,922 4,639,922 521,122
Fees for services 3,433,366 3,433,366 3,661,522 3,661,522 228,156
Investment revenue 515,000 515,000 761,159 761,159 246,159
Intergovernmental 4,035,122 4,035,122 541,968 3,566,061 4,108,029 72,907
Miscellaneous 586,358 586,358 447,200 447,200 (139,158)
Total revenues 69,355,815 69,355,815 69,841,560 3,566,061 73,407,621 4,051,806
EXPENDITURES:
General government 21,321,945 21,821,945 16,304,027 3,566,061 19,870,088 1,951,857
Public safety 35,508,132 35,508,132 35,073,613 35,073,613 434,519
Public works 5,454,931 5,454,931 4,950,734 4,950,734 504,197
Parks and recreation 6,937,458 6,937,458 6,817,078 6,817,078 120,380
Capital outlay 315,393 315,393 281,258 281,258 34,135
Total expenditures 69,537,859 70,037,859 63,426,710 3,566,061 66,992,771 3,045,088
Excess (deficiency) of revenues
over expenditures (182,044) (682,044) 6,414,850 6,414,850 7,096,894
OTHER FINANCING SOURCES
(USES):
Transfer in 786,779 786,779 579,878 579,878 (206,901)
Transfers out (384,052) (384,052) (1,867,799) (1,867,799) (1,483,747)
Total other financing
sources (uses) 402,727 402,727 (1,287,921) (1,287,921) (1,690,648)
Excess (deficiency) of revenues
and other sources over (under)
expenditures and other uses 220,683 (279,317) 5,126,929 5,126,929 5,406,246
Fund balances at beginning of year 9,929,186 9,929,186 9,929,186 9,929,186
Fund balance at end of year $ 10,149,869 $ 9,649,869 $ 15,056,115 $ $ 15,056,115 $ 5,406,246
Adjustments - Budgetary Basis include $3,566,061 of expenditures allocated to and reimbursed by other funds. These
expenditures are recorded in the other funds' financials.
The notes to the basic financial statements are an integral part of this statement.
19
CITY OF DENTON, TEXAS
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
AS OF SEPTEMBER 30, 2006
Business-type Activities - Enterprise Funds
Electric Water Wastewater Solid
System System System Waste
ASSETS:
Current assets:
Cash, cash equivalents and investments,
at fair value $ 70,857,635 $ 19,237,037 $ 3,245,896 $ 6,664,834
Receivables, net of allowances:
Accounts 9,545,940 1,633,218 1,130,241 798,615
Unbilled utility service 6,425,619 1,182,883 969,777 641,829
Accrued interest 445,155 200,979 44,450 44,430
Other 3,840
Interfund receivables 1,380,283 381,847 230,014 129,645
Merchandise inventory
Prepaid items 953 2,170 9,444
Deferred debt issuance costs 55,060 63,082 38,084 11,219
Total current assets 88,710,645 22,705,056 5,667,906 8,290,572
Noncurrent assets:
Restricted assets:
Cash, cash equivalents and investments,
at fair value 38,634,645 43,259,867 27,396,366 5,344,223
Escrow deposit 134,579 88,765 58,356
Accrued interest 369,956 300,182 178,615 58,875
Interfund receivables 2,429,896 186,597 98,113 41,662
Deferred debt issuance costs 673,908 812,446 390,586 106,257
Capital assets, net of accum ulated depreciation 91,242,624 181,628,246 133,686,196 15,505,062
Total noncurrent assets 133,485,608 226,276,103 161,808,232 21,056,079
Total assets 222,196,253 248,981,159 167,476,138 29,346,651
LIABILITIES:
Current liabilities:
Accounts payable 23,203,393 300,551 199,299 217,644
Claims payable
Compensated absences payable 435,578 449,821 257,094 236,862
Leases payable
Deposits 3,436,143 273,174 4,029 73,049
Accrued interest
Interfund payables 67,198 411,264 77,984 1,020,593
Payable from restricted assets:
Accounts payable 168,023 531,307 61,190 198,280
Retainage payable 151,107 76,307 23,606
Accrued interest 1,355,557 2,180,756 1,044,224 100,479
Interfund payables 466
Revenue and certificate and general
obligation bonds 4,889,449 5,298,423 3,586,869 1,935,651
Total current liabilities paid from restricted
assets 6,413,495 8,161,593 4,768,590 2,258,016
Total current liabilities 33,555,807 9,596,403 5,306,996 3,806,164
20
114,635,101 3,018,063
281,700 1,934,766
907,628 9,689
2,756,268
1,983,197 54,091
422,062,128 23,382,719
542,626,022 28,399,328
668,000,201 51,202,395
23,920,887 642,856
453,750
1,379,355 187,471
935,736
3,786,395
58,950
1,577,039 3,536,638
958,800 21,881
251,020
4,681,016
466
15,710,392 1,395,514
21,601,694 1,417,395
52,265,370 7,232,796
(continued)
Total
Enterprise
Funds
$ 100,005,402
13,108,014
9,220,108
735,014
3,840
2,121,789
12,567
167,445
125,374,179
Exhibit VIII
Governmental
Activities -
Internal
Service
Funds
$ 18,156,690
90,042
113,527
370,110
4,033,346
30,746
8,606
22,803,067
21
CITY OF DENTON, TEXAS
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
AS OF SEPTEMBER 30, 2006
Electric
System
Noncurrent liabilities:
Leases payable
Payable from restricted assets:
Arbitrage payable
General obligation bonds payable
Certificates of obligation
Revenue bonds payable, net of premium/discount
Deferred amount on refunding
Notes payable
Compensated absences payable
Claims payable
Landfill closure/postclosure costs
Total noncurrent liabilities
Total liabilities
NET ASSETS:
$
81,321,329
(2,338,073)
31,780
79,017,678
112,573,485
Business-type Activities - Enterprise Funds
Water Wastewater
System System
$
2,642
513
$ $
1,950
60,609,950
(1,305,398)
28,675
59,335,177
64,642,173
81,357,474 90,192,282
12,021,875 5,981,155
751,714 1,033,057
62,414,132 17,589,633 5,627,471
$ 109,622,768 $ 111,720,696 $ 102,833,965
Adjustment to reflect inclusion of internal service fund activities related to enterprise funds.
Net assets of business-type activities (Exhibit I)
The notes to the basic financial statements are an integral part of this statement.
Invested in capital assets, net of related debt
Restricted for debt service
Restricted for capital acquisition
Unrestricted
Total net assets
36,021,512
11,187,124
22
128,993,752
(4,515,455)
3,141,222
44,028
127,664,060
137,260,463
Solid
Waste
3,130,594
10,515,386
(118,301 )
76,244
3,689,408
17,293,331
21,099,495
5,503,433
2,743,723
$ 8,247,156
Exhibit VIII
Governmental
Activities -
Total Internal
Enterprise Service
Funds Funds
$ $ 2,624,006
5,105
3,130,594 4,091
10,515,386 8,196,434
270,925,031
(8,277,227)
3,141,222
180,727 26,241
2,541,463
3,689,408
283,310,246 13,392,235
335,575,616 20,625,031
213,074,701 16,867,439
29,190,154
1,784,771
88,374,959 13,709,925
$ 332,424,585 $ 30,577,364
2,468,226
$ 334,892,811
( concluded)
23
CITY OF DENTON, TEXAS
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2006
Business-type Activities - Enterprise Funds
Electric Water Wastewater Solid
System System System Waste
OPERATING REVENUES:
Utility services $ 142,984,230 $ 25,708,728 $ 21,045,736 $ 14,572,633
Charges for goods and services
Other fees 6,435,570 3,782,958 1,002,331 51,499
Miscellaneous 11,007
Total operating revenues 149,419,800 29,491,686 22,059,074 14,624,132
OPERATING EXPENSES:
Operating expenses before depreciation 137,989,588 16,124,174 12,424,105 11,729,140
Depreciation 4,074,474 4,391,403 3,837,806 1,513,700
Total operating expenses 142,064,062 20,515,577 16,261,911 13,242,840
Operating income 7,355,738 8,976,109 5,797,163 1,381,292
NON-OPERATING REVENUES (EXPENSES):
Investment revenue 3,747,451 2,193,478 1,120,627 237,314
Interest expense and fiscal charges (3,607,060) (6,481,247) (3,007,285) (518,447)
Impact fee revenue 3,944,965 1,611,384
Gain (loss) on disposal of capital assets (43,367) 454,203 45,537
Other non-operating revenues (expenses) 160,753 10,072
Total non-operating revenues (expenses) 97,024 272,152 (219,665) (281,133)
Income before contributions and transfers 7,452,762 9,248,261 5,577,498 1,100,159
CONTRIBUTIONS AND TRANSFERS:
Capital contributions 3,625,072 6,397,582
Transfers in 124
Transfers out (63,617) (103,776) (680,414) (47,423)
Total contributions and transfers (63,617) 3,521,296 5,717,292 (47,423)
Change in net assets 7,389,145 12,769,557 11,294,790 1,052,736
Total net assets at beginning of year 102,233,623 98,951,139 91,539,175 7,194,420
Total net assets at end of year $ 109,622,768 $ 111,720,696 $ 102,833,965 $ 8,247,156
Change in fund net assets of proprietary funds
Adjustment to reflect inclusion of internal service fund activities related to enterprise funds.
Change in net assets of business-type activities (Exhibit II)
The notes to the basic financial statements are an integral part of this statement.
24
Exhibit IX
Governmental
Activities -
Total Internal
Enterprise Service
Funds Funds
$ 204,311,327 $
25,149,915
11,272,358
11,007 208,255
215,594,692 25,358,170
178,267,007 19,310,280
13,817,383 4,081,711
192,084,390 23,391,991
23,510,302 1,966,179
7,298,870 661,043
(13,614,039) ( 454,336)
5,556,349
456,373 451,329
170,825 (3,384)
(131,622) 654,652
23,378,680 2,620,831
10,022,654 59,629
124 251,645
(895,230) (594,219)
9,127,548 (282,945)
32,506,228 2,337,886
299,918,357 28,239,478
$ 332,424,585 $ 30,577,364
32,506,228
1,139,720
$ 33,645,948
25
CITY OF DENTON, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers
Cash paid to em ployees for services
Cash paid to suppliers
Net cash provided by operating activities
CASH FLOWS FROM NON CAPITAL FINANCING
ACTIVITIES:
Transfers out
Transfers in
Net cash used by noncapital financing activities:
Business-type Activities - Enterprise Funds
Electric Water Wastewater
System System System
$ 148,261,332
(5,187,592)
(114,340,130)
28,733,610
$ 29,649,621
(8,693,107)
(6,875,234 )
14,081,280
$ 21,821,225
( 4,697 ,507)
(8,169,747)
8,953,971
(63,617) (103,776) ( 680,414)
124
(63,617) (103,776) ( 680,290)
(3,625,692) ( 4,684,132) (3,277,765)
(3,637,945) (6,530,745) (3,037,423)
8,026,750
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Capital contributions
Principal payments on capital debt
Interest and fiscal charges
Principal payments under capital lease obligation
Proceeds from issuance of capital debt
Proceeds from impact fees
Proceeds from sale of capital assets
Acquisition and construction of capital assets
Net cash used by capital financing activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale and maturities of investment securities
Purchase of investment securities
Interest received on investments
Net cash provided (used) by investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Investments, at fair value (Note IV.A.)
Cash, cash equivalents and investments, at fair value
(10,999,420)
(10,236,307)
27,703,032
(42,140,000)
3,919,358
(10,517,610)
7,916,076
2,437,305
10,353,381
99,138,899
$ 109,,492,,280
3,944,965
454,203
(7,110,537)
(13,926,246)
26,508,065
(29,455,000)
2,038,765
(908,170)
(856,912 )
2,207,228
1,350,316
61,146,588
$ 62,,496,,904
1,611,384
45,537
(3,268,499)
(7,926,766)
11,453,389
(12,495,000)
1,062,663
21,052
367,967
1,250,463
1,618,430
29,003,687
$ 30,,622,,117
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Operating income
Adjustments:
Depreciation expense
Decrease (Increase) in receivables
Decrease (Increase) in interfund receivables
Decrease in inventories
Decrease (Increase) in prepaid items
Increase (Decrease) in accounts payabh~
Increase in compensated absences payable
Increase in closure/postclosure liability
Increase (Decrease) in interfund payables
Total adjustments
Net cash provided by operating activities
NONCASH CAPITAL, INVESTING AND FINANCING ACTIVITIES:
Noncash activity during the year consisted of contributed capital assets for the Water and Wastewater funds in the amount
of $3,625,072 and $6,397,582, respectively; the change in the fair value of investments of ($11,058), $410,694,
$321,422 and $36,790 for the Electric, Water, Wastewater and Solid Waste funds, respectively; the addition of
a capital lease in the Internal Service funds of $2,365,000; and the change in fair value of investments of ($8,756J
for the Internal Service funds.
The notes to the basic financial statements are an integral part of this statement.
26
$ 7,355,738 $ 8,976,109 $ 5,797,163
4,074,474 4,391,403 3,837,806
(702,557) 44,953 (225,490)
(455,911) 112,983 (12,359)
7,278,909 (2,170) (9,444)
11,161,173 480,875 (100,119)
68,121 91,925 25,736
(46,337) (14,798) (359,322)
21,377,872 5,105,171 3,156,808
$ 28,,733,,610 $ 14,,081,,280 $ 8,,953,,971
Exhibit X
Governmental
Activities
Total Internal
Solid Enterprise Service
Waste Funds Funds
$ 14,207,080 $ 213,939,258 $ 25,526,466
(5,427,047) (24,005,253) (3,610,233)
(4,864,780) (134,249,891 ) (14,912,362)
3,915,253 55,684,114 7,003,871
(47,423) (895,230) (594,219)
124 251,645
(47,423) (895,106) (342,574)
59,629
2,420,749 (9,166,840) (1,161,564)
(487,440) (13,693,553) (462,799)
(2,287,515)
8,026,750 2,307,012
5,556,349
499,740
(2,074,620) (23,453,076) (1,678,836)
(141,311) (32,230,630) (3,224,073)
5,448,998 71,113,484 7,349,415
(8,744,000) (92,834,000) (9,900,000)
186,492 7,207,278 626,052
(3,108,510) (14,513,238) (1,924,533)
618,009 8,045,140 1,512,691
747,097 6,642,093 1,331,220
1,365,106 14,687,233 2,843,911
10,643,951 199,933,125 18,330,842
$ 12,,009,,057 $ 214,,620,,358 $ 21,,174,,753
$ 1,381,292 $ 23,510,302 $ 1,966,179
1,513,700 13,817,383 4,081,711
(372,483) (1,255,577) (29,307)
( 44,569) (399,856) 197,603
385,521
7,267,295 (8,419)
160,737 11,702,666 1,187,779
42,041 227,823 9,364
277,781 277,781
956,754 536,297 (786,560)
2,533,961 32,173,812 5,037,692
$ 3,,915,,253 $ 55,,684,,114 $ 7,,003,,871
27
CITY OF DENTON, TEXAS
STATEMENT OF ASSETS AND LIABILITIES
AGENCY FUNDS
AS OF SEPTEMBER 30, 2006
ASSETS:
Cash, cash equivalents and investments,
at fair value
Other receivables
Total assets
LIABILITIES:
Accounts payable
Total liabilities
Exhibit XI
Total
Agency
Funds
$ 1,326,923
76,393
$ 1,403,316
$ 1,403,316
$ 1,403,316
The notes to the basic financial statements are an integral part of this statement.
28
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2006
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Denton is a municipal corporation governed by an elected mayor and six-member council. The
City receives funding from state and federal government sources and must comply with the requirements of
these funding source entities. However, the City is not included in any other governmental "reporting entity,"
as defined in pronouncements by the Governmental Accounting Standards Board (GASB) Statement No. 14,
"The Financial Reporting Entity," since council members are elected by the public and have decision-making
authority, the authority to levy taxes, the power to designate management, the ability to significantly influence
operations, and primary accountability for fiscal matters.
During fiscal year 2006, the City implemented GASB Statement 44, "Economic Condition Reporting: the
Statistical Section", which requires the City to disclose five categories of information: financial trends, revenue
capacity, debt capacity, demographic and economic and operating information. The overall objectives of this
Statement are to improve the understandability and usefulness of the statistical section information. The City
also implemented GASB Statement 42, "Accounting for Financial Reporting for Impairment of Capital Assets
and for Insurance Recoveries."
The financial statements of the City have been prepared to conform to u.S. generally accepted accounting
principles (GAAP) as applicable to state and local governments. GASB is the accepted standard-setting body
for establishing governmental accounting and financial reporting principles. The following is a summary of the
more significant policies.
A. Reporting entity
An elected mayor and a six-member council govern the City. As required by u.S. generally accepted
accounting principles, these financial statements present the City (the primary government) and its component
units, which are entities for which the City is considered to be financially accountable. Blended component
units, although legally separate entities, are, in substance, part of the City's operations, and so data from these
units are combined with data of the primary government. A discretely presented component unit, on the other
hand, is reported in a separate column in the government-wide financial statements to emphasize it is legally
separate from the City. The City had no discretely presented or blended component units at September 30,
2006.
B. Government-wide and fund financial statements
The basic financial statements include both government-wide (based on the City as a whole) and fund financial
statements. The reporting focus is either the City as a whole (government-wide financial statements) or major
individual funds (within the fund financial statements). The government-wide financial statements (i.e., the
statement of net assets and the statement of activities) report information on all non-fiduciary activities of the
primary government. For the most part, the effect of inter-fund 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 government-wide statement of activities demonstrates the degree to which the direct expenses of a
functional category (public safety, public works, etc.) or segment are offset by program revenues. Direct
expenses are those that are clearly identifiable with 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; (2) grants and contributions that are restricted to meeting operational
requirements of a particular function or segment; and (3) grants and contributions that are restricted to meeting
the capital requirements of a particular function or segment. Taxes and other items not properly included
among program revenues are reported instead as general revenues.
The net cost (by function or business-type activity) is normally covered by general revenue (property taxes,
sales taxes, franchise fees, intergovernmental revenues, interest income, and the like).
29
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
Separate fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds,
even though the latter are excluded from the government-wide financial statements. Major governmental funds
and major enterprise funds are reported as separate columns in the fund financial statements. GASB Statement
No. 34 sets forth minimum criteria (percentage of assets, liabilities, revenues or expenditures/expenses of either
fund category and for the governmental and enterprise funds combined) for the determination of major funds.
Non-major funds are combined in a column in the fund financial statements.
Internal service funds, which traditionally provide services primarily to other funds of the government, are
presented in summary form as part of the proprietary fund financial statements. The financial statements of
internal service funds are allocated (based on the percentage of goods or services provided) between the
governmental and business-type activities when presented at the government-wide level.
The City's fiduciary funds are presented in the fund financial statements. Since by definition these assets are
being held for the benefit of a third party (other local governments, individuals, etc.) and cannot be used to
address activities or obligations of the government, these funds are not incorporated into the government-wide
statements.
The government-wide focus is more on the sustainability of the City as an entity and the change in aggregate
financial position resulting from the activities of the fiscal period. The focus of the fund financial statements is
on the major individual funds of the governmental and business-type categories, as well as the fiduciary funds
(by category). Each presentation provides valuable information that can be analyzed and compared to enhance
the usefulness of the information.
C. Measurement focus, basis of accounting and financial statement presentation
The government-wide financial statements are reported using the economic resources measurement focus and
the accrual basis of accounting, as are the proprietary fund statements. Revenues are recorded when earned,
and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property
taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized
as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund-level financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the current
period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government
considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt
service expenditures, as well as expenditures related to compensated absences and claims and judgments, are
recorded only when payment is due.
Property tax, franchise fees, sales tax and other taxes associated with the current fiscal period are all susceptible
to accrual and so have been recognized as revenues of the current fiscal period. All of the other revenue items
are considered to be measurable and available only when cash is received.
The City reports the following major governmental funds:
The general fund is the City's primary operating fund. All general tax revenues and other receipts that are
not allocated by law or contractual agreement to some other fund are accounted for in this fund. From the
fund are paid general operating costs, fixed charges and capital improvement costs that are not paid
through other funds.
The debt service fund accounts for the payment of principal and interest on general long-term liabilities,
paid primarily by taxes levied by the City, and for payment of principal and interest on capital leases in the
governmental funds.
30
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
The capital projects fund accounts for financial resources used for the acquisition or construction of major
capital facilities being financed from bond proceeds, capital contributions, or transfers from other funds,
other than those recorded in the enterprise funds and internal service funds.
Other governmental funds is a summarization of all of the non-major governmental funds.
The City reports the following major proprietary funds:
The City utility system is made up of three separate funds as follows:
The electric fund accounts for electrical utility services to the residents and commercial establishments
of the City. Activities necessary to provide such services are accounted for in the fund, including, but
not limited to, administration, operations, maintenance, finance and related debt service.
The water fund accounts for water utility services to the residents and commercial establishments of the
City. Activities necessary to provide such services are accounted for in the fund, including, but not
limited to, administration, operations, maintenance, finance and related debt service.
The wastewater fund accounts for sewer and storm water services to the residents and commercial
establishments of the City. Activities necessary to provide such services are accounted for in the fund,
including, but not limited to, administration, operations, maintenance, finance and related debt service.
The City provides additional services through the following fund:
The solid waste fund accounts for the provision of solid waste services to the residents of the City.
Activities necessary to provide such services are accounted for in the fund, including, but not limited to,
administration, operations, maintenance, finance and related debt service.
The City additionally reports the following funds:
Internal service funds are used to account for the financing of materials and services provided by one
department of the City to other departments of the City on a cost-reimbursement basis.
Agency funds are used to account for the payment of payroll, employee insurance, and other similar
liabilities. The City holds the assets in an agency capacity for individuals, private organizations or other
governments.
Private-sector standards of accounting and financial reporting (as issued by the Financial Accounting Standards
Board) 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 subsequent private-sector guidance for business-type
activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent
private sector guidance.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues
and expenses generally result from providing services and producing and delivering goods in connection with a
proprietary fund's principal ongoing operations. The principal operating revenues of the City's electric, water,
wastewater and solid waste funds are charges to customers for services. Operating expenses for the enterprise
funds and internal service funds include the cost of sales and services, administrative expenses and depreciation
on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues
and expenses. For deferred charges, the City recognizes, as an asset or a liability, the difference between the
electric fund's energy cost adjustment (ECA) revenue collected and related costs, in compliance with Financial
Accounting Standards Board Statement No. 71.
When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted
resources first, and then unrestricted resources as they are needed.
31
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
D. Assets, liabilities and net assets or equity
1. Cash., cash equivalents 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.
Investments are carried at fair market value or cost, if maturities are one year or less. Fair market value is
determined as the price at which two willing parties would complete an exchange. Interest earned on
investments is recorded in the funds in which the investments are recorded.
2. Receivables
Outstanding balances between funds are reported as "interfund receivables/payables." Any residual
balances between governmental activities and business-type activities are reported in the government-wide
statements as "internal balances."
Trade and property tax receivables are shown net of an allowance for uncollectibles. The City accrues
amounts for utility services provided in September, but not billed at September 30, 2006.
3. Inventories
Inventories of supplies are maintained at the City warehouse for use by all City funds and are accounted for
by the consumption method. Cost is determined using a moving average method. No inventories exist in
the governmental fund types.
4. Restricted Assets
Certain proceeds of the City's proprietary fund revenue bonds, general obligation bonds, and certificates of
obligation, as well as certain resources set aside for their repayment, are classified as restricted assets on the
balance sheet because their use is limited by applicable bond covenants. Assets collected from impact fees
are limited in use and also shown as restricted on the balance sheet of the Water and Wastewater funds.
5. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges,
sidewalks and similar items) are reported in applicable governmental or business-type activities columns in
the government-wide financial statements and in the proprietary fund financial statements. The City
defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful
life in excess of one year. 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 time
received.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Net interest
incurred during the construction phase of capital assets of business-type activities and enterprise funds is
included as part of the capitalized value of the assets constructed. For 2006, net interest capitalization of
$293,779 was recorded for electric fund projects, $122,035 was recorded for water fund projects and
$63,239 was recorded for wastewater fund projects.
32
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
Capital assets are depreciated using the straight-line method over the following useful lives:
Assets
Buildings
Infrastructure
Streets
General improvements
Machinery and equipment
Furniture and office equipment
Computer equipment/software
Plant and equipment
Underground pipe
Water storage rights
Water recreation rights
Communication equipment
Vehicles
Years
40
30 - 40
20
10
10 - 20
10
3 -10
5
40
50 - 100
50
5
3 -10
Renewals and betterments of property and equipment are capitalized, whereas normal repaIr and
maintenance are charged to expense as incurred.
6. Compensated Absences
The City allows employees to accumulate unused vacation up to 320 hours (480 hours for Civil Service Fire
employees.) Upon termination, any accumulated vacation time will be paid to an employee. Generally,
sick leave is not paid upon termination except for fire fighters and police officers. Firefighters and police
officers accumulate unused sick leave up to a maximum of 1080 hours and 720 hours, respectively. All
other employees are paid only upon illness while in the employ of the City. Accumulated vacation and sick
leave is accrued when incurred in the government-wide and proprietary fund financial statements. A
liability for these amounts is reported in governmental funds only if they have matured, for example, as a
result of employee resignations and retirements. The General Fund has been used in prior years to liquidate
governmental funds' related liability.
7. Arbitrage
Arbitrage involves the investment of the proceeds from the sale of tax-exempt securities in a taxable money
market instrument that yields a higher rate, resulting in interest revenue in excess of interest costs. Federal
tax code requires that these excess earnings be rebated to the federal government. The Capital Projects
Fund has been used in prior years to liquidate governmental funds' related liability.
8. Long-term obligations
In the government-wide financial statements and proprietary fund types in the fund financial statements,
long-term obligations are reported as liabilities. Bond premiums and discounts, as well as issuance costs,
are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable
bond premium or discount. Gains and losses on refunding are amortized over the life of the refunded debt
or the life of the new issue, whichever is shorter.
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.
33
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
9. Fund equity
In the fund financial statements, governmental funds report reservations of fund balance for accounts that
are not available for appropriation or are legally restricted by outside parties for use for a specific purpose.
Designations of fund balances represent management plans that are subject to change.
II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
A. Explanation of certain differences between the governmental fund balance sheet and the government-
wide statement of net assets
The governmental fund balance sheet includes a reconciliation between fund balance - total governmental
funds and net assets - governmental activities as reported in the government-wide statement of net assets. One
element of that reconciliation explains the "long-term liabilities, including bonds payable, are not due and
payable in the current period and therefore are not reported as liabilities in the funds." The details of this
$(116,438,877) difference are shown below.
General obligation bonds payable
Certificates of obligation payable
Less: deferred charge for issuance cost
Arbitrage liability
Accrued interest on bonds
Leases payable
Compensated absences
Net adjustments to reduce fund balance - total governmental funds
to arrive at net assets - governmental activities
$ (58,742,900)
(46,700,000)
567,013
(25,968)
(653,690)
(3,559,742)
(7~323~590)
$(116_438_877)
B. Explanation of certain differences between the governmental fund statement of revenues,
expenditures and changes in fund balances and the government-wide statement of activities
The governmental fund statement of revenues, expenditures and changes in fund balances includes a
reconciliation between net changes in fund balances - total governmental funds and changes in net assets of
governmental activities as reported in the government-wide statement of activities. One element of that
reconciliation explains, "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." The details of the $(2,692,825) difference are as follows:
Capital outlay
Depreciation expense
Net adjustment to decrease net changes in fund balances - total
governmental funds to arrive at changes in net assets of
governmental activities
34
$9,056,102
(11 ~ 7 48~927)
$ (2_692_825)
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
Another element of that reconciliation states, "Bond proceeds provides current financial resources to
governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. Repayment
of bond principal is expenditure in the governmental funds, but the repayment reduces long-term liabilities in
the statement of net assets. This is the amount by which proceeds exceeded payments." The details of this
$(3,635,181) difference are as follows.
Debt issued or incurred:
Issuance of general obligation debt
Issuance of certificates of obligation
Principal repayments:
Principal retirement
Net adjustment to decrease net changes in fund balances - total
governmental funds to arrive at changes in net assets of
governmental activities
$(3,695,000)
(5,855,000)
5~914~819
$ (3_635_181)
Another element of that reconciliation states, "The net effect of various miscellaneous transactions involving
capital assets (i.e., sales, trade-ins and donations) is to increase net assets." The details of this $5,251,153
difference are as follows:
Loss on disposal of capital assets
Adjustment for depreciation expense on governmental activities
Donations of capital assets increase net assets in the statement of
activities but do not appear in the governmental funds because
they are not financial resources.
Net adjustment to increase net changes in fund balances - total
governmental funds to arrive at changes in net assets of
governmental activities
(25,344)
71,946
5~204~551
$ 5,251,153
Another element of that reconciliation states, "Certain expenses reported in the statement of activities do not
require the use of current financial resources and therefore are not reported as expenditures of governmental
funds." The details of the $(399,599) difference are as follows:
Compensated absences
Arbitrage liability
Accrued interest
Net adjustments to decrease net changes in fund balances - total
governmental funds to arrive at changes in net assets of
governmental activities
$ (381,689)
(25,968)
8~058
$(399_599)
III. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary information
The City Council follows these procedures, as prescribed by City Charter, in establishing the budgets reflected
in the financial statements:
35
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
1. At least sixty days prior to the beginning of each fiscal year, the City Manager submits to the City
Council a proposed budget for the fiscal year beginning on the following October 1. The operating
budget includes proposed expenditures and the means of financing them.
2. Public hearings are conducted prior to the adoption of the budget in order to obtain taxpayer comments.
3. The annual budget adopted by the City Council covers the general fund, special revenue funds
(Recreation Fund, Police Confiscation Fund, Emily Fowler Library Fund, and Tourist and Convention
Fund only), the debt service fund, the enterprise funds, and internal service funds (except for the Risk
Retention Fund). The budget is legally enacted by the City Council through passage of an ordinance
prior to the beginning of the fiscal year. The basic financial statements reflect the legal level of control,
(i.e. the level at which expenditures cannot legally exceed the appropriated amount) which is established
at fund level as approved by City Council.
4. The City Charter provides that the City Manager has the authority to transfer any unencumbered
appropriation balances from one appropriation to another within a single function (office, department, or
agency). City Council approval is not required at this level. The Charter also provides that at any time
during the year, at the request of the City Manager, City Council may by resolution transfer any part of
the unencumbered appropriation balances or the entire balance thereof between functions, as well as
make any increases in fund appropriations.
Budgets are adopted on a basis for the governmental funds, proprietary funds, and the budgeted special revenue
funds where encumbrances are treated as budgeted expenditures in the year of commitment to purchase; and
depreciation expense for the proprietary funds is not budgeted. At the end of the year, encumbrances for which
goods and services have not been received are cancelled. At the beginning of the subsequent year, management
reviews all open encumbrances and, as provided in the budget ordinance appropriation, these encumbrances
may be re-established. In 2006 no encumbrances were carried forward in the budget. Also, during the
budgetary process, amounts are included in fund budgets to recognize administrative transfers between funds
for goods or services. These amounts are not included in the reporting of actual activity for the funds. For
funds reporting required budget-to-actual comparisons, these administrative transfers are included as
adjustments - budgetary basis.
B. Deficit fund equity
The Recreation special revenue fund had a deficit fund balance of $(1,027,034) at September 30, 2006. This
deficit was a result of less than anticipated revenue from park admission, summer camp attendance, swim
lesson attendance, concession sales and fall adult softball registration. Elimination of the deficit fund balance is
anticipated by 2018 through the imposition of a one-cent property tax increase beginning in 2006.
IV. DETAILED NOTES ON ALL FUNDS
A. Cash and investments
In order to facilitate effective cash management practices, the operating cash of all funds is pooled into common
accounts for the purpose of increasing income through combined investment activities. At year-end, the City
had $23,601,725 in cash and cash equivalents, including $20,500,000 invested in money market funds that the
City considers cash equivalent. Of the $23,601,725, agency funds reported $1,326,923. The bank balance was
covered by collateral with a fair value of $24,465,949. In addition, the City had $13,743 in petty cash at year-
end.
Statutes authorize the City to invest in obligations of the u.S. Treasury; U.S. agencies, fully collateralized
repurchase agreements, public fund investment pools, SEC-registered, no-load, money market mutual funds,
investment-grade, rated municipal securities of any state and fully collateralized certificates of deposit. The
investments reported at September 30, 2006, were similar to those held during the fiscal year.
36
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
The City reports all investments in the financial statements at fair value. At September 30, 2006, the City's
investments carried a fair value of $283,932,097. As of September 30, 2006, City investments were as follows:
Investment Type
Money Market Fund
Weighted Average
Fair Value Maturity (Days)
$ 20,500,000 1
164,410,077 407
56~389~875 583
15 ~407 ~969 680
27~224~176 763
$283,932,097
u.S. Treasury Securities
u.S. Agency Securities-Coupon
u.S. Agency Securities-Callable
u.S. Agency Securities-Discount
Total fair value of investments
Portfolio weighted average maturity
462
Interest rate risk. In accordance with its investment policy, the City manages its exposure to declines in fair
values due to interest rate fluctuations by limiting the weighted average maturity of its investment portfolio to
less than eighteen months. With review and approval of the City's investment committee, the weighted average
maturity of its investment portfolio may be extended beyond eighteen months.
Credit risk. The City's investment policy limits investments to obligations of the United States of America and
its agencies, investment quality obligations of the States with a rating not less than AA, fully insured
Certificates of Deposit, and commercial paper that has a maturity of 270 days or less and a rating of A-I or P-l.
The City's investments in the bonds of u.S. agencies was rated AAA by Standard & Poor's and Fitch Ratings
and Aaa by Moody's Investors Service.
Custodial credit risk. This is the risk that in the event of a bank or counterparty failure, the City's deposits or
investments may not be returned to it. The policy states that all bank deposits and bank investments of City
funds shall be secured by pledged collateral with a market value equal to no less than 102 percent of the
principal plus accrued interest less an amount insured by FDIC, if a deposit.
37
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
Cash, cash equivalents and investments, at fair value, are reported together on the financial statements.
Investments, at fair value, excluding money market funds, by fund were as follows:
Other
General Capital Governmental
Fund Projects Funds Electric
Unrestricted investments $ 10,921,424 $ 30,990,078 $ 3,432,694 $ 60,721,844
Change in fair value (9,840) (156,539) (9,687) (1,340,943)
Restricted investments 40,269,162
Change in fair value (511,164)
Total $ 10,911,584 $ 30,833,539 $ 3,423,007 $ 99,138,899
Internal Total
Service City
Water Wastewater Solid Waste Funds Investments
Unrestricted investments $ 18,970,094 $ 3,404,517 $ 5,731,252 $ 16,680,242 $ 150,852,145
Change in fair value (7,435) (6,596) (37,615) (228,462) (1,797,117)
Restricted investments 42,870,650 25,966,455 4,956,430 1,900,102 115,962,799
Change in fair value (686,721) (360,689) (6,116) (21,040) (1,585,730)
Total $ 61,146,588 $ 29,003,687 $ 10,643,951 $ 18,330,842 $ 263,432,097
B. Property tax revenue
Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on October 1 and are
due and payable at that time; therefore, the legally enforceable claim arises on October 1. A receivable is
recorded at that time. All unpaid taxes levied October 1 become delinquent February 1 of the following year.
Property taxes at the fund level are recorded as receivables and revenue at the time the tax levy is billed.
Current-year revenues recognized are those ad valorem taxes collected within the current period or soon enough
thereafter to pay current liabilities, which is sixty days after year-end. Current tax collections for the year ended
September 30, 2006, were 98.7% of the tax levy. An allowance is provided for delinquent taxes not expected to
be collected in the future.
At September 30,2006, the City had a tax rate of $0.60815 per $100 valuation. Based upon the maximum ad
valorem tax of $2.50 per $100 valuation imposed by Texas Constitutional law, the City had a tax rate margin of
$1.89185. Additional revenues up to $90,607,825 could be raised per year based on the current year's certified
assessed value of$4,789,376,811 before the limit is reached.
38
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
C. Receivables
Receivables at September 30, 2006, for the City's individual major funds and other funds (non-major funds,
internal service funds and fiduciary funds), including the applicable allowances for uncollectible accounts, are
shown below.
Capital
General Debt Service Pro] ects Electric Water
Receivables:
Taxes $4,184,802 $ 342,661 $ $ $
Accounts 21,430,294 3,097,191
Accrued interest 209,625 396,086 815,111 501,161
Unbilled utility service 6,425,619 1,182,883
Other 7,587,777 472,526 3,840
Gross receivables 11,982,204 342,661 868,612 28,671,024 4,785,075
Less: Allowance for
uncollectibles (5,735,577) (97,910) (11,884,354) (1,463,973)
Net total receivables $6~246~627 $ 244~751 $ 868~612 $ 16~ 786~670 $ 3~321~102
Other Internal
Waste- Solid Governmental Service
water Waste Funds Funds Total
Receivables:
Taxes $ $ $ $ $ 4,527,463
Accounts 2,758,232 2,022,864 29,308,581
Accrued interest 223,065 103,305 35,328 99,731 2,383,412
Unbilled utility service 969,777 641,829 9,220,108
Other 190,275 113,527 8,367,945
Gross receivables 3,951,074 2,767,998 225,603 213,258 53,807,509
Less: Allowance for
uncollectibles (1,627,991) (1,224,249) (22,034,054)
Net total receivables $2~323~083 $ 1~543~749 $ 225~603 $ 213~258 $ 31~773~455
39
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
D. Capital assets
Capital assets balances and transactions for the year ended September 30, 2006 are summarized below and on
the following page.
Governmental activities: Balance at Balance at
October 1, 2005 Increases Decreases September 30, 2006
Capital assets not being depreciated:
Land $ 7,848,270 $ - $ (18,776) $ 7,829,494
Construction in progress 1 0~528~ 186 9~616~781 (10~514~904) 9~630~063
Total capital assets not being depreciated 18~3 7 6~456 9~616~781 (10~533~680) 17~459~557
Capital assets being depreciated:
Buildings 46,787,662 4,096,176 (14,300) 50,869,538
Infrastructure 157,398,404 8,806,125 (20,700) 166,183,829
Plant, machinery and equipment 60~352~321 7~339~226 (4~634~814) 63~056~733
Total capital assets being depreciated 264~538~387 20~241~527 (4~669~814) 280~110~100
Less accumulated depreciation for:
Buildings 10,616,133 1,183,264 (14,300) 11,785,097
Infrastructure 63,113,080 7,836,450 (20,700) 70,928,830
Plant, machinery and equipment 31~692~709 6~81 0~923 ( 4~ 112~606) 34~391 ~026
Total accumulated depreciation 1 05~421 ~922 15~830~637 (4~147~606) 117~104~953
Total capital assets, being depreciated, net 159~ 116~465 4~410~890 ( 522~208) 163~005~147
Governmental activities capital assets, net $177 ~492~921 $14~027~671 $(11~055~888) $180~464~704
Capital assets for governmental activities include capital assts held in the internal service funds.
(Continued)
40
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
Business- type activities: Balance at Balance at
October 1, 2005 Increases Decreases September 30, 2006
Capital assets not being depreciated:
Land $ 8,466,829 $ 1,312,831 $ $ 9,779,660
Construction in progress 30~277~357 23~571~603 (16~598~179) 37~250~781
Total capital assets not being depreciated 38~744~ 186 24~884~434 (16~598~ 179) 47 ~030~441
Capital assets being depreciated:
Buildings 6,779,729 (160,337) 6,619,392
Landfill improvements 9,795,557 90,107 9,885,664
Water rights 69,883,098 69,883,098
Infrastructure 260,336,899 17,071,580 (377,450) 277,031,029
Plant, machinery and equipment 177~527~661 8~326~ 778 (7 ~202~ 738) 178~651~701
Total capital assets being depreciated 517~543~215 32~268~ 194 (7~740~525) 542~070~884
Less accumulated depreciation for:
Buildings 2,511,760 (63,484) 2,448,276
Landfill improvements 8,896,825 439,549 9,336,374
Water rights 11,391,349 696,331 12,087,680
Infrastructure 56,932,976 6,763,931 (302,668) 63,394,239
Plant, machinery and equipment 76~769~783 3~405~812 ( 402~967) 79~772~628
Total accumulated depreciation 153~990~933 13~817~383 (769~119) 167~039~197
Total capital assets, being depreciated, net 363~552~282 18~450~811 ( 6~971 ~406) 375~031~687
Business-type activities capital assets, net $402,296,468 $43,335,245 $(23.569.585) $422,062,128
(The prior period included $6,779,729 of Plant, machinery and equipment that has been reclassified as Buildings. The Increases
and Decreases columns above reflect these adjustments.)
Depreciation expense was charged to governmental activities functions/programs as follows:
Governmental activities:
General government
Public safety
Public works
Parks and recreation
Capital assets held by the internal service funds are
charged to the various functions based upon usage
Total depreciation expense - governmental activities
Business-type activities:
Electric
Water
Wastewater
Solid Waste
Total depreciation expense - business-type activities
41
$ 2,226,360
1,117,693
7,392,270
1,012,603
4~081~711
$15,830,637
$ 4,074,474
4,391,403
3,837,806
1~513~700
$13,817,383
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
Construction commitments
The City has several major construction projects planned or in progress as of September 30, 2006. These
projects are evidenced by contractual commitments with contractors and include:
Proiect
Fire Station #7
U S 377 Alternate
R D Wells Interchange
Denton West R D Wells Transmission
R D Wells Hickory Substation
Hwy 380 Water and Wastewater Relocate IH35 & West
Water SW Storage Area & BP Station
Landfill Cell 3A
Spent-to-Date
$1,724,932
1,476,290
101,956
943,860
201,280
10,948
3,182,145
485,336
Remaining
Commitment
$2,581,952
2,023,709
3,224,009
2,317,813
1,498,422
1,542,551
2,202,885
2,022,764
E. Interfund receivables, payables and transfers
A summary of interfund receivables and payables (in thousands) at September 30, 2006, is as follows:
Interfund Payables:
Governmental
Major Funds Business- Type Major Funds
Non-Major Internal
Interfund Governmental Solid Service
Receivables: General Fund Funds Electric Water Wastewater Waste Funds Total
Governmental Major
Funds:
General Fund $ $ 1 , 164 $ - $ $ $ $ 277 $ 1 ,441
Capital Projects
Fund 181 181
Non-Major
Governmental Funds 489 64 93 49 47 24 766
Business- Type Major
Funds:
Electric 84 141 973 2,612 3,810
Water 294 274 568
Wastewater 71 257 328
Solid Waste 83 12 77 172
Internal Service
Funds 310 3 23 17 16 370
Total $ 1,358 $ 1 , 164 $ 67 $ 411 $ 78 $ 1,021 $ 3,537 $ 7,636
42
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
The more significant interfund receivables and payables include the following:
Interfund receivables
Electric fund
Non-Major governmental funds
Electric fund
General fund
Interfund pavables
Internal service funds
General fund
Solid Waste fund
Non-Major governmental funds
Amount
$2,429,896
488,482
972,976
957,948
The balance between Non-Major Governmental Funds and the General Fund reflects the current year
contribution to other post retirement benefits reserve. The outstanding balances between the Electric Fund and
the Internal Service Funds are a result of the cash position in the Materials Management Fund due to inventory
purchases. The balance between the Electric Fund and the Solid Waste Fund reflects the purchase and sale of
investments between funds. The balance between the General Fund and Non-Major Governmental Funds
reflects the General Fund's support of the Recreation Fund. This particular payable is not expected to be repaid
within one year.
Transfers between funds (in thousands) during the year were as follows:
Transfers Out:
Governmental Major
Funds Business- Type Major Funds
Capital Non-Major Internal
General Projects Governmental Solid Service
Transfers In: Fund Fund Funds Electric Water Wastewater Waste Funds Total
Governmental Major
Funds:
General Fund $ $ $ 261 $ $ $ $ $ 319 $ 580
Debt Service
Fund 31 462 631 251 1,375
Capital Projects
Fund 914 9 10 933
Non-Major
Governmental Funds 923 5 64 94 49 47 24 1,206
Internal Service Funds 252 252
Total $ 1,868 $ 719 $ 270 $ 64 $ 104 $ 680 $ 47 $ 594 $ 4,346
43
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
The more significant transfers include the following:
Transfers from fund
General fund
General fund
General fund
Internal service funds
Wastewater fund
Capital projects fund
Transfers to fund
Capital Projects
Non-Major governmental funds
Non-Major governmental funds
General fund
Debt service fund
Debt service fund
Amount
$913,720
500,000
350,552
318,610
631,764
461,602
Transfers from the General Fund to Capital Projects are to fund future capital projects. Transfers from the
General Fund to Non-Major Governmental Funds reflect the funding of other post-employment benefits as well
as the Recreation Fund's share of current year property tax revenues. Transfers from the Wastewater Fund and
Capital Projects Fund to the Debt Service Fund are used to move revenues from the fund with collection
authorization to the Debt Service Fund as debt service principal and interest payments become due. Transfers
from the Internal Service Funds to the General Fund reflect direct operating cost transfers for Risk Retention.
F. Leases
Leases payable represent the remaining principal amounts payable under lease purchase agreements for the
acquisition of equipment through the motor pool fund, an internal service fund. These leases are recorded as
capital leases. Remaining requirements, including interest, under these leases are as follows:
Year
2007
2008
2009
2010
Payments
$1,046,319
1,046,319
924,811
803 ~3 03
3,820,752
261~010
$3,559,742
Total minimum lease payments
Less: amount representing interest
Present value of minimum future lease payments
The following schedule provides an analysis of the City's investments In equipment under capital lease
arrangements as of September 30, 2006:
Equipment
Less: Accumulated Depreciation
Total
$2,665,584
600~804
$2,064,780
44
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
G. Long-term debt
Long-term liabilities transactions for the year ended September 30, 2006, are summarized as follows below and
on the following page:
Balance at Balance at
Octo ber 1, September 30, Due Within
2005 Increases Decreases 2006 One Year
Governmental Activities:
General obligation bonds $ 58,870,849 $ 3,695,000 $ 3,822,949 $ 58,742,900 $ 4,017,583
Certificates of obligation 41,791,588 8,160,000 3,251,588 46,700,000 3,425,000
Obligations under capital leases 2,210,846 2,365,000 1,016,104 3,559,742 935,736
Arbitrage payable 25,968 25,968
Compensated absences payable 6,932,537 3,098,880 2,707,827 7,323,590 2,804,264
Claims payable 1,803,000 1,740,353 548,140 2,995,213 453,750
Unamortized premium/( discounts) 394,367 53,087 28,863 418,591 30,042
Unamortized deferred gain/ (loss) (508,493 ) (115,288) (393,205)
Total governmental
long - term liabilities $111,494,694 $19,138,288 $11,260,183 $119,372,799 $11,666,375
Business-type Activities:
Revenue bonds $281,120,000 $8,515,000 $12,330,000 $277,305,000 $13,325,000
General obligation bonds 3,904,151 322,051 3,582,100 482,417
Certificates of obligation 9,233,412 4,505,000 1,763,412 11,975,000 1,450,000
Arbitrage payable 1 ,218 3,887 5,105
Compensated absences payable 1,332,259 1,462,748 1,234,925 1,560,082 1,379,355
Note payable 3, 141 ,222 3, 141 ,222
Landfill closure/post-closure costs 3,411,627 277,781 3,689,408
Unamortized premium/( discounts) 7,867,768 23,012 471,477 7,419,303 452,975
Unamortized deferred gain/ (loss) (9,002,261) (725,034) (8,277,227)
Total business-type activities 301,009,396 14,787,428 15,396,831 300,399,993 17,089,747
Total long-term liabilities $412,504,090 $33,925,716 $26,657,014 $419,772,792 $28,756,122
45
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
General bonded debt - General obligation and certificates of obligation issued for general government
purposes at September 30, 2006 are comprised of the following:
Gross Amount
Original Outstanding at
Interest Rate Final Amount September 30,
Bonded Debt (%) Issue Date Maturity of Issue 2006
General obligation 5.0 to 7.0 1997 2017 $ 4,700,000 $ 455,000
General obligation 5.25 to 5.25 1998 2018 9,660,000 5,780,000
General obligation 4.1 to 5.0 1999 2019 8,215,000 5,330,000
General obligation refunding 3.2 to 5.0 1999A 2016 5,538,780 4,185,645
General obligation 5.25 to 6.125 2000 2020 3,750,000 945,000
General obligation 4.5 to 5.5 2001 2021 14,245,000 10,695,000
General obligation 5.0 to 5.25 2002 2022 12,075,000 10,760,000
General obligation refunding 3.0 to 4.75 2003 2023 7,233,065 4,767,255
General obligation refunding 2.5 to 5.0 2004 2020 7,370,000 7,235,000
General obligation 3.0 to 5.0 2005 2025 5,000,000 4,895,000
General obligation 4.25 to 4.875 2006 2026 3,695,000 3,695,000
Total general obligation bonds 81,481,845 58,742,900
Certificates of obligation 4.0 to 5.0 1998 2018 5,625,000 905,000
Certificates of obligation 4.1 to 5.0 1999 2019 5,926,273 3,835,000
Certificates of obligation 5.25 to 6.125 2000 2020 3,125,000 775,000
Certificates of obligation 4.25 to 5.25 2001 2021 10,400,000 4,555,000
Certificates of obligation 4.7 to 5.25 2002 2022 7,145,000 6,485,000
Certificates of obligation 3.0 to 4.75 2003 2023 5,650,000 4,695,000
Certificates of obligation 2.0 to 5.0 2004 2024 12,805,000 12,085,000
Certificates of obligation 3.0 to 4.375 2005 2025 5,575,000 5,205,000
Certificates of obligation 4.0 to 4.75 2006 2026 8,160,000 8,160,000
Total certificates of obligation 64,411,273 46,700,000
Total general bonded debt $145,893,118 $105,442,900
[The amounts do not include net unamortized premiums/( discounts) of $418,591 nor net deferred gain/(loss) on
refunding of ($393,205).]
Proceeds of general bonded debt are restricted to the uses for which they were approved in the bond elections.
The City Charter expressly prohibits the use of bond proceeds to fund operating expenses. The general
obligations are collateralized by the full faith and credit of the City and, primarily, payable from property taxes.
In prior years, the City defeased general obligation bonds by placing the proceeds of new bonds in an
irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust
account assets and liabilities for the defeased bonds are not included in the City's financial statements. On
September 30, 2006, $5,925,000 of general obligation bonds considered defeased are still outstanding.
46
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
In July 2006, the City issued $12,665,000 in certificates of obligation and $3,695,000 of general obligation
bonds. The debt was issued to pay the cost of various Capital Project improvements ($9,550,000) and
proprietary fund capital improvements ($6,810,000). The bonds and obligations are payable over the next 20
years.
Revenue bonds - Revenue bonded debt at September 30, 2006, is comprised of the following issues:
Principal Net Net
Original Outstanding at Unamortized Outstanding at
Interest Rate Issue Final Amount September 30, Premium/ September 30,
Revenue Bonds (%) Date Maturity of Issue 2006 (Discount) 2006
Utility system
refunding 3.55 to 6.75 1993 2008 $ 6,045,000 $ 580,000 $ (703) $ 579,297
Utility system
refunding 5.3 to 7.8 1996 2025 36,510,000 865,000 (4,110) 860,890
Utility system 5.3 to 7.4 1996 2017 2,750,000 125,000 125,000
Utility system 4.3 to 6.3 1998 2018 7,175,000 1,800,000 1,800,000
Utility system
refunding 4.65 to 6.65 1998 2030 36,795,000 19,665,000 (220,657) 19,444,343
Utility system
refunding 4.0 to 5.0 1998 2015 7,640,000 7,150,000 7,150,000
Utility system 4.974 to 6.0 2000 2020 54,880,000 17,920,000 18,985 17,938,985
Utility system 4.0 to 5.4 2001 2021 59,545,000 50,725,000 456,828 51,181,828
Utility system 4.25 to 5.0 2002 2022 56,710,000 49,265,000 284,223 49,549,223
Utility system 5.0 to 6.5 2002 2022 13,985,000 3,860,000 (10,837) 3,849,163
Utility system 3.625 to
refunding 5.625 2003 2022 50,180,000 39,105,000 1,291,352 40,396,352
Utility system
refunding 2.0 to 5.25 2004 2024 24,850,000 23,940,000 1,133,738 25,073,738
Utility system
refunding 3 .0 to 5.0 2005 2023 53,845,000 53,790,000 4,445,952 58,235,952
Utility system 4.5 to 5.0 2006 2026 8,515,000 8,515,000 8,515,000
Total revenue
Bonds $419,425,000 $277,305,000 $7,394,771 $284,699,771
[The amounts do not include net unamortized gain/Closs) on refunding of ($8,158,926).]
In July 2006, the City issued $8,515,000 in revenue bond debt. The debt was issued to pay for the cost of
various utility system improvements and upgrades. The bonds are payable over the next 20 years.
47
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
Other enterprise obligations - General obligation bonds and certificates of obligation issued for solid waste
fund at September 30, 2006, is comprised of the following:
Other Obligations
General obligation refunding
General obligation refunding
General obligation refunding
Total general obligation bonds
Certificates of obligation
Certificates of obligation
Certificates of obligation
Certificates of obligation
Certificates of obligation
Certificates of obligation
Total certificates of obligation
Total other enterprise obligations
Interest
Rate Issue Final
(%) Date Maturity
3.2 to 5.0 1999 2016
3.0 to 4.75 2003 2023
2.5 to 5.0 2004 2015
4.25 to 5.25
4.7 to 5.25
3.0 to 4.75
2.0 to 5.0
3.0 to 4.375
4.0 to 4.75
2001
2002
2003
2004
2005
2006
2021
2022
2023
2024
2025
2026
Original
Amount
of Issue
$ 1,481,220
846,935
2,040,000
4,368,155
3,845,000
5,445,000
1,755,000
1,195,000
1,570,000
4,505,000
23,315,046
$27,683,201
Gross Amount
Outstanding at
September 30,
2006
$ 1,119,355
547,745
1,915,000
3,582,100
1,015,000
3,050,000
980,000
1,010,000
1,415,000
4,505,000
11,975,000
$15,557,100
[The amounts do not include net unamortized premiums/(discounts) of $24,532 nor net deferred gain/Closs) on
refunding of ($118,301).]
The revenue bonds are collateralized by the revenue of the Denton utility system funds (System) and the various
special funds established by the bond ordinance. The ordinance provides that the revenue of the System is to be
used first to pay operating and maintenance expenses of the System and second to establish and maintain the
revenue bond funds. Any remaining revenues may then be used for any lawful purpose. The ordinance also
contains provisions, which among other items restricts the issuance of additional revenue bonds unless the
special funds noted above contain the required amounts and certain financial ratios are met. Management
believes the City is in compliance with all significant requirements. Assets in these accounts consist of cash
and u.S. government securities. Below is a summary of the various net asset balances in the funds required by
the bond ordinance to be restricted for debt service.
Interest and sinking fund
Reserve fund
Total restricted net assets restricted for debt service
$11,884,032
17,306,122
$29,190,154
In prior years, the City defeased revenue bonds by placing the proceeds of new bonds in an irrevocable trust to
provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and
liabilities for the defeased bonds are not included in the City's financial statements. On September 30, 2006,
$87,145,000 of revenue bonds considered defeased is still outstanding.
48
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
Note payable
In 1980, the City and the City of Dallas contracted with the Army Corps of Engineers for the construction and
development of Ray Roberts Reservoir in Denton County. In contracts with the Army Corp of Engineers, the
City will pay for twenty-six (26%) percent of the estimated water storage rights of the reservoir. Water
obtained from the reservoir will be pro rata on the basis of each city's proportional share of total construction
cost. The closing of the dam was completed in 1987 with water being available from the reservoir in 1989. The
note will become due and payable when the Army Corps of Engineers provides the City the final and complete
costs for the greenbelt and recreation area.
Schedule of long-term debt maturities
Aggregate maturities of the long-term debt (principal and interest) for the years subsequent to September 30,
2006, are shown below and on the following page:
Governmental Activities:
Fiscal Year
2007
2008
2009
2010
2011
2012-2016
2017-2021
2022-2026
Total
General Obligation
Principal Interest
$ 4,017,583 $ 2,703,907
3,890,723 2,512,586
3,728,569 2,343,172
3,660,885 2,179,616
3,877,630 2,007,655
20,092,510 7,212,666
15,265,000 2,741,731
4,210,000 342,572
$58,742,900 $22,043,905
Certificates of
Obligation
Total
Principal Interest
$ 8,378,319 $ 4,863,445
8,396,655 4,471,998
8,254,205 4,125,217
8,108,323 3,780,699
7,277,630 3,435,015
31,417,510 12,712,259
26,530,000 5,601,251
10,640,000 883,822
$261,009 $109,002,642 $39,873,706
Capital Leases
Principal Interest
$ 935,736 $ 110,583
965,932 80,386
875,636 49,175
782,438 20,865
Principal
$ 3,425,000
3,540,000
3,650,000
3,665,000
3,400,000
11,325,000
11,265,000
6,430,000
$46,700,000
Interest
$ 2,048,955
1,879,026
1,732,870
1,580,218
1,427,360
5,499,593
2,859,520
541,250
$17,568,792
$3,559,742
49
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
Business- Type Activities:
Fiscal Year
2007
2008
2009
2010
2011
2012-2016
2017-2021
2022-2026
2027-2031
Total
Fiscal Year
2007
2008
2009
2010
2011
2012-2016
2017-2021
2022-2026
2027-2031
Total
General Obligation
Principal
$ 482,417
449,277
471,431
474,115
332,370
1,372,490
Interest
$130,088
115,145
100,124
83,630
68,146
131,536
Certificates of
Obligation
Principal Interest
$ 1,450,000 $ 517,874
1,155,000 450,434
985,000 408,408
945,000 368,321
805,000 330,084
2,935,000 1,171,942
2,385,000 613,474
1,315,000 120,512
$11,975,000 $3,981,049
Total
Principal Interest
$15,257,417 $ 14,034,807
18,875,499 13,312,570
15,676,431 12,530,751
16,164,115 11,722,550
14,742,370 10,939,064
81,152,490 43,192,202
90,110,000 22,061,857
34,090,000 5,646,993
9,935,000 1,051,266
- $296,003,322 $134,492,060
$3,141,222 $
Revenue
Principal Interest
$ 13,325,000 $ 13,386,845
14,130,000 12,746,991
14,220,000 12,022,219
14,745,000 11,270,599
13,605,000 10,540,834
76,845,000 41,888,724
87,725,000 21,448,383
32,775,000 5,526,481
9,935,000 1,051,266
$277,305,000 $129,882,342
$3,582,100
$628,669
50
[The amounts above and on the previous page do not include net unamortized premium/(discount) of
$7,837,894 nor net unamortized gain/Closs) on refunding of ($8,670,432).]
Notes Payable
Principal Interest
$ $
3, 141 ,222
Bonds authorized and unissued
General obligation bonds authorized but unissued as of September 30,2006, amounted to $33,710,000. When
issued, the proceeds will be allocated to the applicable capital projects.
H. Landfill closure and post-closure cost
State and federal laws and regulations require the City to place a final cover on its Mayhill Road landfill site
upon closure and to perform certain maintenance and monitoring functions at the site for thirty years after
closure. Although closure and post-closure care costs will be paid only upon anticipated closure, the City
reports a portion of these costs as an operating expense in each period based on landfill capacity used as of each
balance sheet date. Based on a model created by a 2005 engineering study, total landfill closure and post-
closure cost increased from $14,226,967 to $14,582,641 and increased this year's reported landfill closure and
post-closure expense by $277,781. The $3,689,408 reported as landfill closure and post-closure care liability
represents the cumulative amount incurred to date based on the use of 25.3% of the estimated capacity of the
entire landfill at September 30, 2006.
Based on this estimate, the remaining potential estimated liability for closure and post-closure care of the entire
landfill is $10,893,233. The City will recognize the remaining estimated cost of closure and post-closure care
as the remaining capacity is filled. These amounts are based on what it would cost to perform closure and post-
closure care in 2006. Actual cost may fluctuate due to inflation, changes in technology, or changes in
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
regulations. The landfill has a remaining life of 28 years, and the City expects to close the landfill in fiscal year
2034.
The solid waste fund has provided for a designation of cash and investments of $3,689,408 at September 30,
2006, and anticipates increasing the reserve in future periods as the closure and post-closure activities are
carried out.
v. OTHER INFORMATION
A. Pension plans
Texas Municipal Retirement Plan
Plan description
The City provides pension benefits for all of its full-time employees (except fire fighters) through a non-
traditional, joint contributory, hybrid-defined benefit plan in the state-wide Texas Municipal Retirement System
(TMRS), one of 811 administered by TMRS, an agent multiple-employer public employee retirement system.
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 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 (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 which 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 their 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.
Members can retire at ages 60 and above with five or more years of service or with 20 years of service
regardless of age. A member is vested after five years. The plan provisions are adopted by the governing body
of the City, within the options available in the state statutes governing TMRS and within the actuarial
constraints also in the statutes. These retirees may also participate in the City's health, dental, and vision plans
as other post employment benefits.
Contributions
The contribution rate for the employees is 7%, and the City matching ratio is currently 2 to 1, both as adopted
by the governing body of the City. Under the state law governing TMRS, the actuary annually determines the
city contribution rate. This rate consists of the normal cost contribution rate and the prior service contribution
rate, both of which are calculated to be a level percent of payroll from year to year. The normal cost
contribution rate finances the currently accruing monetary credits due to the City matching percent, which are
the obligation of the City as of an employee's retirement date, not at the time the employee's contributions are
made. The normal cost contribution rate is the actuarially determined percent of payroll necessary to satisfy the
obligation of the City to each employee at the time a retirement becomes effective. The prior service
contribution rate amortizes the unfunded actuarial liability over the remainder of the plan's 25-year amortization
period. The unit credit actuarial cost method is used for determining the City contribution rate. Both the
employees and the City make contributions monthly.
Three-Year Trend Information for TMRS Funding
Year ending
Annual required contribution (ARC)
Actual contributions
Percent contributed
12/31/05
$9,347,195
$9,347,195
100%
12/31/04
$8,707,103
$8,707,103
100%
12/31/03
$8,313,904
$8,313,904
100%
51
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
Actuarial Assumptions
12/31/05
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Investment rate of return
Projected salary increases
Includes inflation at
Cost-of-living adjustments
Unit credit
Level percent of payroll
25 years - open period
Amortized cost
7%
None
3.5%
None
The City of Denton is one of 811 municipalities having the benefit plan administered by TMRS. Each of the
811 municipalities has an annual, individual actuarial valuation performed. All assumptions for the
December 31, 2005, valuations are contained in the 2005 TMRS Comprehensive Annual Financial Report, a
copy of which may be obtained by writing to P.o. Box 149153, Austin, Texas 78714-9153.
Denton Firemen's Relief and Retirement Plan
Plan description
The Board of Trustees of the Denton Firemen's Relief and Retirement Fund is the administrator of a single-
employer defined benefit pension plan.
The Denton Firemen's Relief and Retirement Fund cover firefighters in the Denton Fire Department. The table
below summarizes the membership of the fund as of December 31, 2005, the most recent biennial actuarial
valuation.
12/31/05
1. Retirees and beneficiaries currently receIvIng
benefits and terminated employees entitled to
benefits but not yet receiving them
2. Current employees
a. Vested
b. Nonvested
3. Total
53
73
92
218
The Denton Firemen's Relief and Retirement Fund provides service retirement, death, disability and withdrawal
benefits. These benefits vest after 10 years of credited service. Firefighters may retire at age 50 with 20 years
of service. As of the December 31, 2005 actuarial valuation date, the Plan effective May 1, 2005 and amended
June 14, 2006 provided a monthly normal service retirement benefit, payable in a Join and Two-Thirds to
Spouse form of annuity, equal to 2.44% of Highest 36-Month Average Salary for each year of service. These
retirees may also participate in the City's health, dental, and vision plans as other post employment benefits.
There is no provision for automatic postretirement benefit increases. The fund has the authority to provide, and
has periodically in the past provided for, ad hoc postretirement benefit increases. The benefit provisions of this
52
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
plan are authorized by the Texas Local Fire Fighter's Retirement Act (TLFFRA). TLFFRA provides the
authority and procedure to amend benefit provisions.
Contributions Required and Contributions Made
The contribution provisions of this plan are authorized by TLFFRA. The TLFFRA provides the authority and
procedure to change the amount of contributions determined as a percentage of pay by each firefighter and a
percentage of payroll by the city.
While the contribution requirements are not actuarially determined, state law requires that an eligible actuary
must approve each plan of benefits adopted by the fund. The actuary certifies that the contribution commitment
by the firefighters and the city provides and adequate financing arrangement. Using the entry age actuarial cost
method, the plans' normal cost contribution rate is determined as a percentage of payroll. The excess of the
total contribution rate over the normal cost contribution rate is used to amortize the plan's unfunded actuarial
accrued liability, and the number of years needed to amortize the plan's unfunded actuarial accrued liability is
determined using an open, level percentage of payroll method.
The costs of administering the plan are financed from the fund.
The funding policy of the Denton Firemen's Relief and Retirement Fund requires contributions equal to 12% of
pay by the firefighters. The City of Denton contributed 10% of payroll during January through September
2006, will contribute 11 % of payroll October 2006 through September 2007, and is planning to contribute 12%
of payroll October 2007 through September 2008 and then to begin contributing the same percentage of payroll
that the city contributes to the Texas Municipal Retirement System for other employees. The December 31,
2005 actuarial valuation assumes that the city contribution rate will average 12.75% beginning October 2008.
Three-Year Trend Information for Denton Firemen's Relief and Retirement Funding
Year ending 12/31/05 12/31/04 12/31/03
Annual required contribution (ARC) $1,970,632 $1,868,444 $1,846,396
Actual contributions $1,970,632 $1,868,444 $1,846,396
Percent contributed
100%
100%
100%
Actuarial Assumptions
12/31/05
Actuarial cost method
Amortization method
Entry age
Level percent of
payroll, open
23 years
5-year adjusted market
value
7.75%
4.50% plus promotion
and longevity
4.0%
Amortization period for ARC
Asset valuation method
Investment rate of return
Projected salary increases
Includes inflation at
Cost-of-living adjustments
Payroll increases
ARC as percent of payroll
None
4.50%
Budgeted rates
Financial statements are available and can be obtained by contacting the Denton Fire Department at the City of
Denton at 332 E. Hickory, Denton, Texas 76201.
53
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code
Section 457. The plan, available to all permanent City employees, permits them to defer, until future years, up
to 25% of annual gross earnings not to exceed $15,500. Employees who are age 50 or older may contribute an
amount not to exceed $20,500. Employees who are within three years of retirement may elect to participate in a
catch-up provision allowed by Section 457, which has an annual maximum contribution amount of $31,000.
The withdrawal of deferred compensation funds is not available to employees until termination, retirement,
death, or unforeseeable emergency.
All amounts of compensation deferred under the plan, all property and rights purchased with those amounts,
and all income attributable to those amounts, property or rights are, until paid or made available to the
employee or other beneficiary, solely the property and rights of the employees. Accordingly, the assets and
associated liability of the plan are not included in the City's financial statements.
It is the opinion of the City's legal counsel that the City has no liability for losses under the plan.
C. Self-insurance plan
The City has established a self-insurance plan for workers' compensation benefits and general liability.
Employee health insurance is a fully-insured plan. Accrued claims payable include provisions for claims
reported and claims incurred but not reported. The provision for reported claims is determined by estimating
the amount, which will ultimately be paid for each claimant. The provision for claims incurred but not yet
reported is estimated based on an actuarial evaluation.
The City's costs associated with the self-insurance plan are reported as interfund transactions. Accordingly,
they are treated as operating revenues of the Internal Service Risk Retention Fund and operating expenditures
(expenses) of the other funds.
Workers' compensation and general liability insurance
The City of Denton self-insures the first $500,000 per occurrence for workers' compensation claims or general
liability. Commercial liability insurance coverage is purchased for public officials, airport operations,
emergency medical services, take-home vehicles, and employee theft and dishonesty. Additionally, excess
insurance is purchased for general liability and workers' compensation exposure. The City reports liabilities
when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. Liabilities
include an amount for claims that have been incurred but not reported. Because actual claims liabilities depend
on such complex factors as inflation, changes in legal doctrines, and damage awards, the process used in
computing claims liability does not necessarily result in an exact amount.
Claims liabilities are re-evaluated periodically to take into consideration settlement of claims, new claims and
other factors. As of September 30, 2006, the estimated value of these liabilities was $2,995,213. Changes in
balances of claims liabilities during fiscal years 2006 and 2005 were as follows:
Claims Liability Claims and Claims Liability
Beginning of Change in Claims End of
Fiscal Year Estimates Payments Fiscal Year
Workers'
Compensation
2006 $1,450,000 $1,437,485 $468,787 $2,418,698
2005 1,450,000 518,915 518,915 1,450,000
General Liability
2006 $ 353,000 $ 302,868 $ 79,353 $ 576,515
2005 353,000 395,882 395,882 353,000
54
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
On September 30, 2006, the City of Denton held net assets of $1,683,514 in the Risk Retention Fund for
payment of claims. There were no significant reductions in insurance coverage from coverage in the prior year,
and the amount of settlements did not exceed insurance coverage in the current year or in any of the past three
fiscal years.
D. Commitments and contingencies
Agreement with TMP A
In 1976, the City, along with the cities of Bryan, Greenville, and Garland, Texas (the Cities) entered into a
Power Sales Contract with the Texas Municipal Power Agency (TMP A). TMP A was created through
concurrent ordinances of the Cities and is governed by a Board of Directors consisting of eight members, two
appointed by the governing body of each city. Under the terms of the agreement, TMP A agreed to construct or
acquire electric generating plants to supply energy and power to the Cities for a period of not less than 35 years.
The Cities in turn agreed to purchase all future power and energy requirements in excess of the amounts
generated by their systems from TMP A at prices intended to cover operating costs and retirement of debt. In the
event that revenues are insufficient to cover all costs and retire the outstanding debt, each of the Cities has
guaranteed a portion of the unpaid debt based, generally, upon its pro rata share of the energy delivered to
consumers in the prior operating year.
As of September 30,2006, total TMPA long-term debt outstanding was approximately $1,072,169,000, and the
City's percentage was approximately 21.3 %. In the opinion of management, the possibility of a material
payment in the near future under this guarantee is remote in that TMP A is generating operating profits and
assets exceed liabilities.
TMPA operates a 452-megawatt, lignite-fueled generating plant. In 1996, TMPA switched to an external
source of lignite to reduce costs. Should TMP A be dissolved, each city would be entitled to an undivided
interest in the property.
Selected financial statement information of TMP A is as follows:
September 30
(Unaudited)
2006 2005
Operating revenues
Operating expenses
Operating income
Other non-operating sources
Current assets
Total assets
Long-term debt
T otalliabilities
Total equity
(OOOs)
$ 244,480
103,876
140,604
8,413
55,778
1,245,503
1,072,169
1,209,944
35,559
(OOOs)
$ 234,871
98,050
136,821
4,120
56,539
1,284,353
1,120,231
1,249,909
34,444
Agreement with the City of Dallas
During 1985, the City entered into an agreement with the City of Dallas that provides for the purchase of a
minimum of 500,000 gallons/day of untreated water from the City of Dallas from Lake Lewisville. This
contract will be effective for 30 years. The cost of water purchased under this agreement during fiscal year
2006 was $79,195.
55
CITY OF DENTON, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (continued)
SEPTEMBER 30, 2006
E. Litigation
Various claims and lawsuits are pending against the City. In accordance with GAAP, those judgments
considered "probable" are accrued, while those claims and judgments considered "reasonably possible" are
disclosed but not accrued. In the opinion of City management and legal counsel, the maximum amount of all
significant claims considered reasonably possible, excluding condemnation proceedings, is approximately
$500,000 as of September 30, 2006. Potential losses after insurance coverage on all probable claims and
lawsuits will not have a material effect on the City's financial position as of September 30, 2006.
****
56
CITY OF DENTON, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF TMRS FUNDING PROGRESS AND CONTRIBUTIONS
LAST THREE FISCAL YEARS (Unaudited)
Exhibit XII
Actuarial Unfunded
Accrued Actuarial
Actuarial Actuarial Liability (AAL) Accrued
Fiscal Valuation Value of U nit Credit Liability Funded
Year Date Assets Method (UAAL) Percent
2004 12/31/2003 $ 87,651,690 $ 118,817,884 $ (31,166,194) 73.80/0
2005 12/31/2004 95,204,213 127,827,803 (32,623,590) 74.5
2006 12/31/2005 98,051,747 133,853,457 (35,801,710) 73.3
UAAL as
Percent of Annual
Fiscal Covered Covered Required Actual Percent
Year Payroll Payroll Contributions Contributions Contributed
2004 $ 45,774,694 68.1 0/0 $ 8,313,904 $ 8,313,904 100.00/0
2005 46,415,828 70.3 8,707,103 8,707,103 100.0
2006 46,394,303 77.2 9,347,195 9,347,195 100.0
57
CITY OF DENTON, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF DENTON'S FIREMEN'S RELIEF AND RETIREMENT PLAN
FUNDING PROGRESS AND CONTRIBUTIONS
LAST THREE VALUATION YEARS (Unaudited)
Exhibit XIII
Actuarial Unfunded
Accrued Actuarial
Actuarial Actuarial Liability (AAL) Accrued
Fiscal Valuation Value of U nit Credit Liability Funded
Year Date Assets Method (UAAL) Percent
2002 12/31/2001 $ 26,061,756 $ 29,786,004 $ (3,724,248) 87.50/0
2004 12/31/2003 30,538,352 37,557,733 (7,019,381) 81.3
2006 12/31/2005 34,677,009 45,341,724 (10,664,715) 76.5
UAAL as
Percent of Annual
Fiscal Covered Covered Required Actual Percent
Year Payroll Payroll Contributions Contributions Contributed
2002 $ 7,947,098 46.90/0 $ 1,504,822 $ 1,504,822 100.00/0
2004 8,459,472 83.0 1,846,396 1,846,396 100.0
2006 10,445,026 102.1 1,970,632 1,970,632 100.0
58
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for particular
purposes.
Community Development Block Grant (CDBG) - to account for the operations of projects utilizing Community
Development Block Grant Funds. Such revenues are restricted to expenditures for specified projects by the
Department of Housing and Urban Development.
Recreation - to account for the revenues and expenditures for the recreation programs that are self-supporting. All
expenditures will be reimbursed 1 00%. Various business operations, such as concessions, fall into this account.
Criminal Justice - to account for revenue received from the State of Texas Criminal Justice Division and other
grants administered by the police department.
Police Confiscation - to account for revenues received from confiscated goods. Expenditures are restricted to
enhancing law enforcement.
Tourist and Convention - to account for taxes received from hotel and motel occupancy for the purpose of
promoting tourism.
Emily Fowler Library - to account for fines, donations, memorials and gifts to the library that are restricted for the
public library.
Citizens' Park Trusts - to account for several small trust funds that are for park development, previously reported as
expendable trust funds.
All Other - to account for miscellaneous special revenue sources that are required to finance specific activities.
59
CITY OF DENTON, TEXAS
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
AS OF SEPTEMBER 30, 2006
Special Revenue Funds
Community
Development Criminal Police
Block Grant Recreation Justice Confiscation
ASSETS
Cash, cash equivalents and investments,
at fair value $ $ $ $ 208,280
Receivables (net of allowances):
Accrued interest 5,402
Other 483
Interfund receivables
Due from other governments 275,872 433,703 27,759
Total assets $ 275,872 $ 439,588 $ 27,759 $ 208,280
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable $ 55,009 $ 74,971 $ $ 1,213
Interfund payables 189,054 957,948 16,593
Other liabilities
Deferred revenues 433,703 11,166
Total liabilities 244,063 1,466,622 27,759 1,213
FUND BALANCES:
Unreserved balance 31,809 (1,027,034) 207,067
Total fund balance (deficit) 31,809 (1,027,034) 207,067
Total liabilities and fund balances $ 275,872 $ 439,588 $ 27,759 $ 208,280
60
Exhibit XIV
Tourist
and
Convention
Special Revenue Funds (continued)
Emily Citizens'
Fowler Park
Library Trusts
All
Other
Total
Nonmajor
Governmental
Funds
$ 198,464 $ 102,738 $ 3,867,141 $ 1,371,062 $ 5,747,685
29,926 35,328
95,145 94,647 190,275
765,581 765,581
531,226 1,268,560
$ 293,609 $ 102,738 $ 3,897,067 $ 2,762,516 $ 8,007,429
$ 26,500 $ 93 $ 850 $ 351,447 $ 510,083
45 1,163,640
12,007 12,007
9,052 333,077 786,998
26,500 9,190 850 696,531 2,472,728
267,109 93,548 3,896,217 2,065,985 5,534,701
267,109 93,548 3,896,217 2,065,985 5,534,701
$ 293,609 $ 102,738 $ 3,897,067 $ 2,762,516 $ 8,007,429
61
CITY OF DENTON, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2006
Special Revenue Funds
Community
Development Criminal Police
Block Grant Recreation Justice Confiscation
REVENUES:
Fees for services $ $ 2,011,005 $ $
Investment revenue 19,198
Tax revenue
Intergovernmental 1,700,036 380,888 113,424
Miscellaneous 236,789 5,982 160,680
Total revenues 1,936,825 2,417,073 113,424 160,680
EXPENDITURES:
General government 1,947,931
Public safety 101,264 100,739
Public works
Parks and recreation 2,591,828
Capital outlay 62,650 14,490 6,040
Total expenditures 1,947,931 2,654,478 115,754 106,779
Excess (deficiency) of revenues over (under)
expenditures (11,106) (237,405) (2,330) 53,901
OTHER FINANCING SOURCES (USES):
Transfers in 350,552 2,330
Transfers out (9,486) (160,861)
Total other financing sources (uses) (9,486) 189,691 2,330
Net change in fund balances (20,592) (47,714) 53,901
Fund balance (deficit) at beginning of year 52,401 (979,320) 153,166
Fund balance (deficit) at end of year $ 31,809 $ (1,027,034) $ $ 207,067
62
Exhibit XV
Special Revenue Funds (continued) Total
Tourist Emily Citizens' Nonmajor
and Fowler Park All Governmental
Convention Library Trusts Other Funds
$ $ 132,255 $ 517,027 $ 458,095 $ 3,118,382
141,671 160,869
1,132,500 1,132,500
24,984 2,160,523 4,379,855
24,483 873,097 1,301,031
1,132,500 181,722 658,698 3,491,715 10,092,637
1,075,130 146,650 1,008,360 4,178,071
537,713 739,716
255,490 255,490
125,851 13,659 2,731,338
7,033 244,719 868,402 1,203,334
1,075,130 153,683 370,570 2,683,624 9,107,949
57,370 28,039 288,128 808,091 984,688
100 5,538 847,758 1,206,278
(12,539) (87,868) (270,754)
(12,439) 5,538 759,890 935,524
57,370 15,600 293,666 1,567,981 1,920,212
209,739 77,948 3,602,551 498,004 3,614,489
$ 267,109 $ 93,548 $ 3,896,217 $ 2,065,985 $ 5,534,701
63
CITY OF DENTON, TEXAS Exhibit XVI
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET TO ACTUAL
DEBT SERVICE FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2006
Variance with
Adjustments - Actual on a Final Budget -
Budgeted Amounts Actual Budgetary Budgetary Positive
Original Final Amounts Basis Basis (Negative)
REVENUES:
Taxes $ 8,566,758 $ 8,566,758 $ 8,738,654 $ $ 8,738,654 $ 171,896
Total revenues 8,566,758 8,566,758 8,738,654 8,738,654 171,896
EXPENDITURES:
Debt service:
Principal, interest and fiscal charges 10,629,427 10,629,427 10,125,447 10,125,447 503,980
Total expenditures 10,629,427 10,629,427 10,125,447 10,125,447 503,980
Deficiency of revenues
under expenditures (2,062,669) (2,062,669) (1,386,793) (1,386,793) 675,876
OTHER FINANCING SOURCES:
Transfers in 1,831,643 1,831,643 1,375,405 1,375,405 ( 456,238)
Total other financing sources 1,831,643 1,831,643 1,375,405 1,375,405 ( 456,238)
Net change in fund balance (231,026) (231,026) (11,388) (11,388) 219,638
Fund balance at beginning of year 451,046 451,046 451,046 451,046
Fund balance at end of year $ 220,020 $ 220,020 $ 439,658 $ $ 439,658 $ 219,638
64
CITY OF DENTON, TEXAS Exhibit XVII
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET TO ACTUAL
SPECIAL REVENUE FUNDS: RECREATION FUND
FOR YEAR ENDED SEPTEMBER 30, 2006
Variance with
Adjustments - Actual on a Final Budget -
Budgeted Amounts Actual Budgetary Budgetary Positive
Original Final Amounts Basis Basis (N egative )
REVENUES:
Fees for services $ 2,586,092 $ 2,586,092 $ 2,011,005 $ $ 2,011,005 $ (575,087)
Investment revenue 4,000 4,000 19,198 19,198 15,198
Intergovernmental 303,107 303,107 380,888 380,888 77,781
Miscellaneous 5,982 5,982 5,982
Total revenues 2,893,199 2,893,199 2,417,073 2,417,073 (476,126)
EXPENDITURES:
Parks and recreation 2,931,838 2,931,838 2,591,828 2,591,828 340,010
Capital outlay 62,650 62,650 ( 62,650)
Total expenditures 2,931,838 2,931,838 2,654,478 2,654,478 277,360
Deficiency of revenues
under expenditures (38,639) (38,639) (237,405) (237,405) (198,766)
OTHER FINANCING
SOURCES (USES):
Transfers in 350,552 350,552 350,552 350,552
Transfers out (264,468) (264,468) (160,861) (160,861) 103,607
Total other financing sources 86,084 86,084 189,691 189,691 103,607
Net change in fund balance 47,445 47,445 (47,714) (47,714) (95,159)
Fund deficit at beginning of year (979,320) (979,320) (979,320) (979,320)
Fund deficit at end of year $ (931,875) $ (931,875) $ (1,027,034) $ $ (1,027,034) $ (95,159)
Note: Actual fees for services are significantly lower than budgeted due to lower than projected summer camp
attendance, admission and swim lesson attendance, concession sales, fall adult softball registration.
65
CITY OF DENTON, TEXAS Exhibit XVIII
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET TO ACTUAL
SPECIAL REVENUE FUNDS: POLICE CONFISCATION FUND
FOR YEAR ENDED SEPTEMBER 30, 2006
Variance with
Adjustments - Actual on a Final Budget -
Budgeted Amounts Actual Budgetary Budgetary Positive
Original Final Amounts Basis Basis (N egative )
REVENUES:
Miscellaneous $ 100,000 $ 100,000 $ 160,680 $ $ 160,680 $ 60,680
Total revenues 100,000 100,000 160,680 160,680 60,680
EXPENDITURES:
Public safety 115,500 115,500 100,739 100,739 14,761
Capital outlay 6,040 6,040 (6,040)
Total expenditures 115,500 115,500 106,779 106,779 8,721
Net change in fund balance (15,500) (15,500) 53,901 53,901 69,401
Fund balance at beginning of year 153,166 153,166 153,166 153,166
Fund balance at end of year $ 137,666 $ 137,666 $ 207,067 $ $ 207,067 $ 69,401
66
CITY OF DENTON, TEXAS Exhibit XIX
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET TO ACTUAL
SPECIAL REVENUE FUNDS: TOURIST AND CONVENTION FUND
FOR YEAR ENDED SEPTEMBER 30, 2006
Variance with
Adjustments - Actual on a Final Budget -
Budgeted Amounts Actual Budgetary Budgetary Positive
Original Final Amounts Basis Basis (N egative)
REVENUES:
Taxes $ 957,832 $ 957,832 $ 1,132,500 $ $ 1,132,500 $ 174,668
Total revenues 957,832 957,832 1,132,500 1,132,500 174,668
EXPENDITURES:
General government 1,078,755 1,078,755 1,075,130 1,075,130 3,625
Total expenditures 1,078,755 1,078,755 1,075,130 1,075,130 3,625
Net change in fund balance (120,923) (120,923) 57,370 57,370 178,293
Fund balance at beginning of year 209,739 209,739 209,739 209,739
Fund balance at end of year $ 88,816 $ 88,816 $ 267,109 $ $ 267,109 $ 178,293
67
CITY OF DENTON, TEXAS Exhibit XX
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET TO ACTUAL
SPECIAL REVENUE FUNDS: EMIL Y FOWLER LIBRARY FUND
FOR YEAR ENDED SEPTEMBER 30, 2006
Variance with
Adjustments - Actual on a Final Budget -
Budgeted Amounts Actual Budgetary Budgetary Positive
Original Final Amounts Basis Basis (Negative)
REVENUES:
Fees for services $ 156,737 $ 156,737 $ 132,255 $ $ 132,255 $ (24,482)
Intergovernmental 24,984 (24,984)
Miscellaneous 24,483 (6,572) 17,911 17,911
Total revenues 156,737 156,737 181,722 (31,556) 150,166 (6,571)
EXPENDITURES:
General government 144,198 144,198 146,650 (26,378) 120,272 23,926
Capital outlay 7,033 (3,086) 3,947 (3,947)
Total expenditures 144,198 144,198 153,683 (29,464) 124,219 19,979
Excess of revenues over
expenditures 12,539 12,539 28,039 (2,092) 25,947 13,408
OTHER FINANCING
SOURCES (USES):
Transfers in 100 (100 )
Transfers out (12,539) (12,539) (12,539) (12,539)
Total other financing uses (12,539) (12,539) (12,439) (100 ) (12,539)
Net change in fund balance 15,600 (2,192) 13,408 13,408
Fund balance at beginning of year 77,948 77,948 77,948 77,948
Fund balance at end of year $ 77,948 $ 77,948 $ 93,548 $ (2,192) $ 91,356 $ 13,408
Adjustments - Budgetary Basis includes $24,984 of grant revenue and $6,572 donation revenue. Capital outlay of $3,086
was made from donation monies. General government expenditures were made from $26,378 of grant and donation monies.
$100 Transfers-in was transferred from General Fund to Humanitites Texas grant for the City match.
68
INTERNAL SERVICE FUNDS
Internal Service Funds account for the financing of goods or services provided by one department for another.
The City has five Internal Service Funds as follows:
Materials Management Fund - to account for the financing of goods and services provided by Materials
Management to other City departments. Such costs provided by Materials Management are billed to the other
departments at standard labor charges and cost of parts plus 13 percent. Actual costs include depreciation on
machinery and equipment used to provide the service.
Fleet Services Fund - to account for the financing of goods and services provided by the Municipal Garage and
Machine Shop to other City departments. Municipal Garage and Machine Shop billings include labor charges and
cost of parts plus 25 percent. Actual costs include depreciation on the building, improvements, machinery, and
equipment used to provide the service.
Motor Pool Fund - to account for the purchase of City vehicles and equipment not budgeted in other funds. These
vehicles are then leased to other City departments. Monthly charges are equal to the vehicle costs less salvage value
divided by the expected life of the vehicle.
Risk Retention Fund - to account for the accumulation of resources for the payment of employee insurance claims
and insurance policies.
Technology Services Fund - to account for the accumulation of resources to provide computer programming
services, systems analysis, imaging, print shop, and office services to City departments.
69
CITY OF DENTON, TEXAS
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
SEPTEMBER 30, 2006
Materials Fleet Motor Risk
Management Services Pool Retention
Fund Fund Fund Fund
ASSETS:
Current assets:
Cash, cash equivalents and investments~
at fair value $ $ 334,839 $ 12,682,066 $ 4,522,952
Receivables, net of allowances:
Accrued interest 36,169 53,873
Other 567 112,960
Interfund receivables 57,528 162,827
Merchandise inventory 3,974,030 59,316
Prepaid items 8,866 21,880
Deferred debt issuance costs 732 428 4,452
Total current assets 3,984,195 565,071 12,744,567 4,739,652
Noncurrent assets:
Restricted assets:
Cash, cash equivalents and investments~
at fair value 36,326 1,797,555
Accrued interest 9,189
Escrow deposit 1,934,766
Deferred debt issuance costs 4,029 3,660 30,785
Capital assets, net of accumulated depreciation 705,857 3,250,095 15,705,581 9,498
Total noncurrent assets 709,886 3,290,081 19,477,876 9,498
Total assets 4,694,081 3,855,152 32,222,443 4,749,150
LIABILITIES:
Current liabilities:
Accounts payable 271,295 94,012 55,409 60,925
Claims payable 453,750
Compensated absences payabh~ 43,292 48,369
Accrued interest 3,081 13,485 31,347
Interfund payables 3,501,888 9,253 10,460
Leases payable 935,736
Payable from restricted assets:
Accounts payable 13,981
Certificate and general obligation bonds 22,900 77,699 932,683
Total current liabilities 3,842,456 242,818 1,979,616 514,675
Noncurrent liabilities:
Leases payable 2,624,006
Payable from restricted assets:
General obligation bonds payable 4,091
Certificates of obligation 537,915 2,215,196 3,381,604
Claims payable 2,541,463
Compensated absences payabh~ 626 12,010
Total noncurrent liabilities: 538,541 2,227,206 6,009,701 2,541,463
Total liabilities 4,380,997 2,470,024 7,989,317 3,056,138
NET ASSETS:
Invested in capital assets, net of related debt 149,803 997,614 13,219,994 9,498
Unrestricted 163,281 387,514 11,013,132 1,683,514
Total net assets $ 313.084 $ 1.385.128 $ 24.233.126 $ 1.693.012
70
Exhibit XXI
Technology
Services
Fund
Total
Internal
Service
Funds
$ 616,833 $ 18,156,690
90,042
113,527
149,755 370,110
4,033,346
30,746
2,994 8,606
769,582 22,803,067
1,184,182
500
3,018,063
9,689
1,934,766
54,091
23,382,719
28,399,328
51,202,395
15,617
3,711,688
4,911,987
5,681,569
161,215 642,856
453,750
95,810 187,471
11,037 58,950
15,037 3,536,638
935,736
7,900 21,881
362,232 1,395,514
653,231 7,232,796
2,624,006
4,091
2,061,719 8,196,434
2,541,463
13,605 26,241
2,075,324 13,392,235
2,728,555 20,625,031
2,490,530 16,867,439
462,484 13,709,925
$ 2.953.014 $ 30.577 .364
71
CITY OF DENTON, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET ASSETS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2006
Materials Fleet Motor Risk
Management Services Pool Retention
Fund Fund Fund Fund
OPERATING REVENUES:
Charges for goods and services $ 6,319,887 $ 5,009,354 $ 4,266,426 $ 3,125,561
Miscellaneous 77,964 13,134 20,887 96,270
Total operating revenues 6,397,851 5,022,488 4,287,313 3,221,831
OPERATING EXPENSES:
Operating expenses before depreciation 6,055,209 4,635,913 466,065 2,768,413
Depreciation 5,351 93,277 2,968,407 2,845
Total operating expenses 6,060,560 4,729,190 3,434,472 2,771,258
Operating income 337,291 293,298 852,841 450,573
NONOPERATING REVENUES (EXPENSES):
Investment revenue 6,289 438,777 146,991
Interest expense and fiscal charges (24,932) (110,030) (226,600)
Gain on disposal of capital assets 451,329
Other non-operating expenses
Total non-operating revenues (expenses) (24,932) (103,741) 663,506 146,991
Income before contributions and transfer~ 312,359 189,557 1,516,347 597,564
Capital contributions 59,629
Transfers in 222,145
Transfers out (9,253) (318,610)
Change in net assets 312,359 402,449 1,575,976 278,954
Total net assets at beginning of year 725 982,679 22,657,150 1,414,058
Total net assets at end of year $ 313,084 $ 1,385,128 $ 24,233,126 $ 1,693,012
72
Exhibit XXII
Total
Technology Internal
Services Service
Fund Funds
$ 6,428,687 $ 25,149,915
208,255
6,428,687 25,358,170
5,384,680 19,310,280
1,011,831 4,081,711
6,396,511 23,391,991
32,176 1,966,179
68,986 661,043
(92,774) ( 454,336)
451,329
(3,384) (3,384)
(27,172) 654,652
5,004 2,620,831
59,629
29,500 251,645
(266,356) (594,219)
(231,852) 2,337,886
3,184,866 28,239,478
$ 2,953,014 $ 30,577,364
73
CITY OF DENTON, TEXAS
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2006
Materials Fleet Motor
Management Services Pool
Fund Fund Fund
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 6,518,070 $ 4,934,213 $ 4,522,943
Cash paid to employees for services (736,429) (958,352 )
Cash paid to suppliers (5,734,452 ) (3,715,649) ( 485,078)
Net cash provided by operations 47,189 260,212 4,037,865
CASH FLOWS FROM NON CAPITAL FINANCING
ACTIVITIES:
Transfers out (9,253)
Transfers in 222,145
Net cash provided (used) by noncapital
financing activities 212,892
CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES:
Cash and capital contributions 59,629
Principal payments on certificates of obligation (22,900) (86,031 ) (700,702)
Interest and fiscal charges (24,289) (110,042) (237,261)
Principal payments under capital lease obligation (2,287,515)
Proceeds from the issuance of certificates of obligation 2,307,012
Acquisition and construction of capital assets (440,514) (791,823)
Net cash used by capital financing activities (47,189) ( 636,587) (1,650,660)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale and maturities of investment securities 247,344 4,814,852
Purchase of investment securities (7,000,000)
Interest received on investments 6,562 426,419
Net cash provided (used) by investing activities 253,906 (1,758,729)
Net increase in cash and cash equivalents 90,423 628,476
Cash and cash equivalents at beginning of year 280,742 769,053
Cash and cash equivalents at end of year 371,165 1,397,529
Investments, at fair value 13,082,092
Cash, cash equivalents and investments, at fair value $ $ 371.J65 $ 14,,479,,621
RECONCILIATION OF OPERATING FUND INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Operating income $ 337,291 $ 293,298 $ 852,841
Adjustments:
Depreciation expense 5,351 93,277 2,968,407
Decrease (Increase) in receivables 1,440 (30,747)
Decrease (Increase) in interfund receivables 118,779 (57,528) 235,630
Decrease in inventories 222,731 162,790
Decrease (Increase) in prepaid items 13,461 (21,880)
Increase (Decrease) in accounts payable 5,683 (85,072) 2,867
Increase in com pensated absences 1,391 6,448
Decrease in interfund payables ( 658,938) (122,254)
Total adjustments (290,102) (33,086) 3,185,024
Net cash provided by operating activities $ 47,,189 $ 260,,212 $ 4,,037,,865
NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES:
Noncash activity during the year consisted of the addition of a capital lease in the Motor Pool fund in the amount
of $2,365,000 and the change in the fair value of investments of $2,656, ($6,842), ($7,298), and $2,728,
for the Fleet Services, Motor Pool, Risk Retention, and Technology Services funds, respectively.
74
Exhibit XXIII
Total
Risk Technology Internal
Retention Services Service
Fund Fund Funds
$ 3,272,308 $ 6,278,932 $ 25,526,466
(1,915,452) (3,610,233)
(1,525,963) (3,451,220) (14,912,362)
1,746,345 912,260 7,003,871
(318,610) (266,356) (594,219)
29,500 251,645
(318,610) (236,856) (342,574)
59,629
(351,931) (1,161,564)
(91,207) (462,799)
(2,287,515)
2,307,012
(446,499) (1,678,836)
(889,637) (3,224,073)
993,656 1,293,563 7,349,415
(2,500,000) (400,000) (9,900,000)
118,712 74,359 626,052
(1,387,632) 967,922 (1,924,533)
40,103 753,689 1,512,691
113,005 168,420 1,331,220
153,108 922,109 2,843,911
4,369,844 878,906 18,330,842
$ 4,,522,,952 $ 1,,801,,015 $ 21,,174,,753
$ 450,573 $ 32,176 $ 1,966,179
2,845 1,011,831 4,081,711
(29,307)
50,477 (149,755) 197,603
385,521
(8,419)
1,242,450 21,851 1,187,779
1,525 9,364
( 5,368) (786,560)
1,295,772 880,084 5,037,692
$ 1,,746,,345 $ 912,,260 $ 7,,003,,871
75
CITY OF DENTON, TEXAS
COMBINING STATEMENT OF NET ASSETS
AGENCY FUNDS
AS OF SEPTEMBER 30, 2006
Exhibit XXIV
Agency Funds
Employee Other Total
Payroll Insurance Agency Agency
Fund Fund Funds Funds
ASSETS:
Cash, cash equivalents and investments,
at fair value $ 1,079,370 $ 98,163 $ 149,390 $ 1,326,923
Other assets 76,393 76,393
Total assets $ 1,079,370 $ 98,163 $ 225,783 $ 1,403,316
LIABILITIES:
Accounts payable $ 1,079,370 $ 98,163 $ 225,783 $ 1,403,316
Total liabilities $ 1,079,370 $ 98,163 $ 225,783 $ 1,403,316
76
CITY OF DENTON, TEXAS Exhibit XXV
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2006
Balance Balance
October 1, 2005 Additions Deductions Septem ber 30, 2006
PAYROLL FUND
ASSETS
Cash and deposits $ 1,829,893 $ 67,571,756 $ 68,322,279 $ 1,079,370
Total assets $ 1,829,893 $ 67,571,756 $ 68,322,279 $ 1,079,370
LIABILITIES
Accounts payable $ 1,827,341 $ 67,571,756 $ 68,319,727 $ 1,079,370
Interfund payables 2,552 2,552
Total liabilities $ 1,829,893 $ 67,571,756 $ 68,322,279 $ 1,079,370
EMPLOYEE INSURANCE FUND
ASSETS
Cash and deposits $ $ 12,303,807 $ 12,205,644 $ 98,163
Interfund receivables 116,794 116,794
Total assets $ 116,794 $ 12,303,807 $ 12,322,438 $ 98,163
LIABILITIES
Accounts payable $ 116,794 $ 12,303,807 $ 12,322,438 $ 98,163
Total liabilities $ 116,794 $ 12,303,807 $ 12,322,438 $ 98,163
OTHER AGENCY FUNDS
ASSETS
Cash, cash equivalents and
investments, at fair value $ 96,470 $ 1,106,949 $ 1,054,029 $ 149,390
Other assets 48,518 268,902 241,027 76,393
Total assets $ 144,988 $ 1,375,851 $ 1,295,056 $ 225,783
LIABILITIES
Accounts payable $ 144,840 $ 1,375,851 $ 1,294,908 $ 225,783
Interfund payables 148 148
Total liabilities $ 144,988 $ 1,375,851 $ 1,295,056 $ 225,783
TOTAL AGENCY FUNDS
ASSETS
Cash, cash equivalents and
investments, at fair value $ 1,926,363 $ 80,982,512 $ 81,581,952 $ 1,326,923
Interfund receivables 116,794 116,794
Other assets 48,518 268,902 241,027 76,393
Total assets $ 2,091,675 $ 81,251,414 $ 81,939,773 $ 1,403,316
LIABILITIES
Accounts payable $ 2,088,975 $ 81,251,414 $ 81,937,073 $ 1,403,316
Interfund payables 2,700 2,700
Total liabilities $ 2,091,675 $ 81,251,414 $ 81,939,773 $ 1,403,316
77
78
CITY OF DENTON, TEXAS
CAPITAL ASSETS USED IN THE OPERATION
OF GOVERNMENTAL FUNDS
COMPARATIVE SCHEDULES BY SOURCE*
SEPTEMBER 30, 2005 AND 2006
2006
Governmental funds capital assets:
Land
Construction in progress
Buildings
Plant, machinery and equipment
Infrastructure
Total governmental funds capital assets
$ 7,041,012
9,335,731
47,821,114
22,231,226
165,754,809
$ 252,183,892
Investments in governmental funds capital assets by source:
General fund
Special revenue funds
Capital projects funds
Total governmental funds capital assets
$ 154,124,426
3,844,343
94,215,123
$ 252,183,892
*This schedule presents only the capital asset balances related to governmental funds.
Accordingly, the capital assets reported in internal service funds are excluded from the
above amounts. Generally, the capital assets of internal service funds are included as
governmental activities in the statement of net assets.
79
Exhibit XXVI
2005
$ 7,059,788
10,463,370
43,739,238
19,372,260
157,398,404
$ 238,033,060
$ 148,801,606
2,555,658
86,675,796
$ 238,033,060
CITY OF DENTON, TEXAS Exhibit XXVII
CAPITAL ASSETS USED IN THE OPERATION
OF GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION AND ACTIVITY*
SEPTEMBER 30, 2006
Plan t,
Machinery Construction
and in
Function and Activity Land Buildings Equipment Infrastructure Progress Total
General government:
Finance $ $ 7,182 $ $ $ $ 7,182
Legal 163,609 163,609
Municipal court/judge/clerks 7,705 7,705
Human resources 6,643 6,643
City manager/economic development 808,462 71,976 880,438
Facilities management 361,440 12,449,161 4,208,456 455,160 31,472 17,505,689
Library 9,386,386 6,599,076 14,715 65,768 16,065,945
Building inspections 22,740 22,740
Planning/community development 494,500 60,771 24,057 579,328
Engineering 394,327 769,237 1,163,564
Public transportation 21,506 21,506
Airport 791,571 1,917,287 227,724 4,268,382 1,144,706 8,349,670
Total general government 1,153,011 25,062,978 11,784,533 5,531,551 1,241,946 44,774,019
Public works:
Traffic operations 711,236 15,277,475 53,475 16,042,186
Streets 792,665 5,000 708,658 133,908,712 5,527,535 140,942,570
Total public works 792,665 5,000 1,419,894 149,186,187 5,581,010 156,984,756
Parks and recreation 3,070,632 14,436,560 2,278,439 11,037,071 271,290 31,093,992
Public safety:
Fire administration 13,842 13,842
Fire operations 2,024,704 7,917,781 1,568,483 2,189,490 13,700,458
Fire prevention 189,953 189,953
Emergency medical services 72,187 72,187
Police 11,993 4,862,786 51,995 4,926,774
Animal services 386,802 41,109 427,911
Total public safety 2,024,704 8,316,576 6,748,360 2,241,485 19,331,125
Total governmental funds
capital assets $ 7,041,012 $ 47,821,114 $ 22,231,226 $ 165,754,809 $ 9,335,731 $ 252,183,892
*This schedule presents only the capital asset balances related to governmental funds.
Accordingly, the capital assets reported in internal service funds are excluded from the
above amounts. Generally, the capital assets of internal service funds are included as
governmental activities in the statement of net assets.
80
CITY OF DENTON, TEXAS
CAPITAL ASSETS USED IN THE OPERATION
OF GOVERNMENTAL FUNDS
SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY*
FOR THE YEAR ENDED SEPTEMBER 30, 2006
Exhibit XXVIII
Governmental Governmental
Funds Capital Funds Capital
Assets Assets
Function and Activity October 1, 2005 Additions Deductions September 30, 2006
General government:
Finance $ 7,182 $ $ $ 7,182
Legal 163,609 163,609
Municipal court/judge/clerks 7,705 7,705
Human resources 6,643 6,643
City manager/economic development 828,984 51,454 880,438
Facilities management 17,396,505 77,712 17,474,217
Library 13,169,486 2,845,027 (14,336) 16,000,177
Building inspections 22,740 22,740
Planning/community development 556,073 23,255 579,328
Engineering 1,163,564 1,163,564
Public transportation 21,506 21,506
Airport 7,178,542 26,422 7,204,964
Total general government 40,522,539 3,023,870 (14,336) 43,532,073
Public works:
Traffic operations 15,817,903 234,917 (64,109) 15,988,711
Streets 128,022,365 7,392,670 135,415,035
Total public works 143,840,268 7,627,587 (64,109) 151,403,746
Parks and recreation 27,493,262 3,420,071 (90,631 ) 30,822,702
Public safety:
Fire administration 23,242 (9,400) 13,842
Fire operations 10,713,297 803,871 (6,200) 11,510,968
Fire prevention 189,953 189,953
Emergency medical services 77,187 (5,000) 72,187
Police 4,282,031 592,748 4,874,779
Animal services 427,911 427,911
Total public safety 15,713,621 1,396,619 (20,600) 17,089,640
Construction in progress 10,463,370 7,816,229 (8,943,868) 9,335,731
Total governmental funds capital assets $ 238,033,060 $ 23,284,376 $ (9,133,544) $ 252,183,892
*This schedule presents only the capital asset balances related to governmental funds.
Accordingly, the capital assets reported in internal service funds are excluded from the
above amounts. Generally, the capital assets of internal service funds are included as
governmental activities in the statement of net assets.
81
82
STATISTICAL SECTION
This part of the City of Denton's comprehensive annual financial report presents detailed information as a context
for understanding what the information in the financial statements, note disclosures, and required supplementary
information says about the city's overall financial health.
Contents
Financial Trends
These schedules contain trend information to help the reader understand how the city's financial
performance and well-being have changed over time. (Tables 1 - 4)
Revenue Capacity
These schedules contain information to help the reader assess the city's most significant local revenue
source, the property tax. (Tables 5 - 8)
Debt Capacity
These schedules present information to help the reader assess the affordability of the city's current level
of outstanding debt and the city's ability to issue additional debt in the future. (Tables 9 - 12)
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the city's financial activities take place. (Tables 13 - 14)
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information
in the city's financial report relates to the services the city provides and the activities it performs.
(Tables 15 - 1 7)
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual
financial reports for the relevant year. The city implemented GASB Statement 34 in 2002; schedules presenting
government-wide information include information beginning in that year.
83
84
CITY OF DENTON, TEXAS Table 1
NET ASSETS BY COMPONENT
LAST FIVE FISCAL YEARS
(accrual basis of accounting)
2002 2003 2004 2005 2006
Governmental activities
Invested in capital assets,
net of related debt $ 88,162,242 $ 100,876,627 $ 107,754,576 $ 107,112,321 $ 107,410,289
Restricted 1,000,906 428,426 296,731 451,046 439,658
Unrestricted 14,091,681 13,185,865 14,615,294 18,519,185 30,352,691
Total governmental activities net assets 103,254,829 114,490,918 122,666,601 126,082,552 138,202,638
Business-type activities
Invested in capital assets,
net of related debt 131,316,531 163,784,452 172,589,102 193,657,258 213,074,701
Restricted 28,456,447 30,558,417 35,812,117 30,863,580 30,974,925
Unrestricted 94,356,569 78,074,629 78,543,929 76,726,025 90,843,185
Total business-type activities net assets 254,129,547 272,417,498 286,945,148 301,246,863 334,892,811
Primary government
Invested in capital assets,
net of related debt 219,478,773 264,661,079 280,343,678 300,769,579 320,484,990
Restricted 29,457,353 30,986,843 36,108,848 31,314,626 31,414,583
Unrestricted 108,448,250 91,260,494 93,159,223 95,245,210 121,195,876
Total primary government net assets $ 357,384,376 $ 386,908,416 $ 409,611,749 $ 427,329,415 $ 473,095,449
Source: Comprehensive Annual Financial Reports
85
CITY OF DENTON, TEXAS Table 2
CHANGES IN NET ASSETS
LAST FIVE FISCAL YEARS
(accrual basis of accounting)
2002 2003 2004 2005 2006
EXPENSES
Governmental activities:
General government $ 16,240,418 $ 22,933,107 $ 26,411,608 $ 26,675,799 $ 22,165,661
Public safety 27,322,153 28,837,158 30,508,765 33,642,445 36,626,635
Public works 13,691,514 10,274,822 11,053,131 11,986,881 12,485,281
Parks and recreation 7,362,939 8,419,508 9,418,580 9,912,996 10,497,241
Interest expense 4,252,970 4,186,051 4,494,851 4,175,466 4,333,428
Total governmental activities expenses 68,869,994 74,650,646 81,886,935 86,393,587 86,108,246
Business-type activities:
Electric system 99,831,597 113,674,296 119,650,157 132,829,976 145,368,132
Water system 18,095,107 20,424,805 21,278,791 22,380,589 26,708,095
Wastewater system 15,555,687 16,560,308 18,528,348 18,808,374 19,027,926
Solid waste 11,658,565 12,366,910 11,301,940 13,168,880 13,454,556
Building inspections 1,731,031
Total business-type activities expenses 146,871,987 163,026,319 170,759,236 187,187,819 204,558,709
Total primary government expenses 215,741,981 237,676,965 252,646,171 273,581,406 290,666,955
PROGRAM REVENUES
Governmental activities:
Charges for services:
General government 1,428,098 3,654,387 3,417,657 3,333,866 3,904,941
Public safety 4,082,859 4,371,407 3,382,791 4,965,056 6,023,100
Public works 1,085,200 1,803,025 1,280,423 1,086,387 802,711
Parks and recreation 1,597,496 347,110 2,143,756 2,613,567 3,234,347
Operating grants and contributions 2,480,309 3,221,264 3,264,777 2,995,978 3,712,817
Capital grants and contributions 6,379,228 14,023,056 14,046,071 7,426,194 5,536,786
Total governmental activities
program revenues 17,053,190 27,420,249 27,535,475 22,421,048 23,214,702
Business-type activities:
Charges for services:
Electric system 91,315,761 105,509,934 111,742,276 129,343,037 149,419,800
Water system 22,352,636 24,552,658 24,331,555 24,890,289 33,436,651
Wastewater system 15,398,218 17,144,312 19,210,529 20,423,424 23,670,458
Solid waste 10,383,296 11,728,024 13,172,556 13,600,512 14,624,132
Building inspections 1,415,998
Capital grants and contributions 8,504,900 19,022,045 8,415,470 9,808,842 10,022,654
Total business-type activities
program revenues 149,370,809 177,956,973 176,872,386 198,066,104 231,173,695
Total primary government
program revenues 166,423,999 205,377,222 204,407,861 220,487,152 254,388,397
NET (EXPENSE)/REVENUE
Governmental activities (51,816,804) (47,230,397) (54,351,460) (63,972,539) (62,893,544)
Business-type activities 2,498,822 14,930,654 6,113,150 10,878,285 26,614,986
Total primary government program
net expense $ (49,317,982) $ (32,299,743) $ (48,238,310) $ (53,094,254) $ (36,278,558)
(continued)
86
CITY OF DENTON, TEXAS Table 2
CHANGES IN NET ASSETS
LAST FIVE FISCAL YEARS
(accrual basis of accounting)
2002 2003 2004 2005 2006
GENERAL REVENUES AND OTHER CHANGES
IN NET ASSETS
Governmental activities:
Taxes:
Property tax $ 19,075,268 $ 20,964,738 $ 23,149,916 $ 26,678,783 $ 30,000,847
Sales tax 15,875,935 16,047,297 17,871,380 18,998,057 20,343,413
Franchise tax 11,930,612 12,571,989 13,215,882 14,250,484 16,499,994
Hotel occupancy tax 938,225 855,879 911,505 988,573 1,132,500
Beverage tax 174,264 192,243 208,855 215,872 257,950
Bingo tax 20,673 28,146 21,127 25,466 24,260
Investment income 3,990,679 1,451,106 1,332,568 1,148,517 1,967,473
Miscellaneous 3,246,851 5,354,783 4,213,163 4,218,245 3,892,087
Transfers 1,073,857 1,000,305 1,410,947 864,493 895,106
Total governmental activities 56,326,364 58,466,486 62,335,343 67,388,490 75,013,630
Business-type activities:
Investment income 11,819,512 4,143,039 2,698,551 3,252,342 5,970,928
Miscellaneous 379,357 214,563 914,087 1,035,581 1,955,140
Transfers (1,073,857) (1,000,305) (1,410,947) (864,493) (895,106)
Total business-type activities 11,125,012 3,357,297 2,201,691 3,423,430 7,030,962
Total primary government 67,451,376 61,823,783 64,537,034 70,811,920 82,044,592
CHANGE IN NET ASSETS
Governmental activities 4,509,560 11,236,089 7,983,883 3,415,951 12,120,086
Business-type activities 13,623,834 18,287,951 8,314,841 14,301,715 33,645,948
Total primary government $ 18,133,394 $ 29,524,040 $ 16,298,724 $ 17,717,666 $ 45,766,034
Source: Comprehensive Annual Financial Reports
87
CITY OF DENTON, TEXAS
FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(modified accrual basis of accounting)
1997 1998 1999 2000
General fund
Reserved for encum brances $ 693,184 $ 1,223,295 $ 828,963 $ 932,374
Unreserved, designated
Unreserved, undesignated 7,083,253 6,737,352 7,625,431 8,536,438
Total general fund 7,776,437 7,960,647 8,454,394 9,468,812
All other governmental funds
Reserved for:
Debt service 501,588 1,061,887 1,131,067 822,913
Capital projects 9,374,925 20,657,648 17,416,609 20,007,072
Encumbrances 1,348,171 3,545,764 2,244,559 3,349,161
Unreserved, undesignated reported in:
Special revenue funds 498,270 533,656 187,519 296,306
Total all other governmental funds $ 11,722,954 $ 25,798,955 $ 20,979,754 $ 24,475,452
Source: Comprehensive Annual Financial Reports
88
Table 3
2001 2002 2003 2004 2005 2006
$ 199,135 $ 431,528 $ 137,051 $ 112,292 $ 210,818 $ 242,088
1,550,000
9,571,700 8,033,092 8,442,942 9,504,988 9,718,368 13,264,027
9,770,835 8,464,620 8,579,993 9,617,280 9,929,186 15,056,115
1,594,620 934,406 428,426 296,731 451,046 439,658
27,293,278 37,584,615 24,389,226 26,548,130 27,671,252 32,840,640
3,457,022 2,899 14,295
509,513 2,390,065 1,678,620 3,607,200 3,614,489 5,534,701
$ 32,854,433 $ 40,911,985 $ 26,510,567 $ 30,452,061 $ 31,736,787 $ 38,814,999
89
CITY OF DENTON, TEXAS
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(modified accrual basis of accounting)
1997 1998 1999 2000
REVENUES:
Taxes:
Property tax $ 11,628,389 $ 12,134,304 $ 12,542,960 $ 13,957,144
Sales tax 12,139,976 12,925,267 13,883,181 15,131,637
Hotel occupancy tax 680,841 753,226 758,272 838,152
Beverage tax 102,564 91,110 149,771 166,523
Bingo tax 19,479 28,039 25,349 21,509
Licenses and permits 521,642 708,607 373,979 441,831
Franchise fees 6,592,694 9,107,182 9,283,328 9,958,500
Fines and forfeitures 1,849,082 2,257,015 2,855,899 2,680,352
Fees for services 2,101,049 2,187,136 2,512,669 3,359,523
Investment revenue 1,189,973 1,921,862 1,701,496 2,695,225
Intergovernmental 3,341,162 4,617,477 4,997,170 5,763,321
Miscellaneous 1,650,331 2,200,526 1,811,201 2,646,375
Total revenues 41,817,182 48,931,751 50,895,275 57,660,092
EXPENDITURES:
General government 11,989,015 13,265,277 11,619,718 14,565,496
Public safety 15,379,257 16,756,551 19,060,713 22,679,278
Public works 5,040,465 5,447,174 5,098,539 4,888,271
Parks and recreation 3,697,577 3,989,773 4,413,869 5,341,227
Capital outlay 7,107,878 7,339,736 16,605,028 5,724,897
Debt service:
Principal retirement 3,532,417 3,230,865 4,132,192 3,601,439
Advance refunding escrow
Bond issuance costs
Interest and other charges 1,373,606 1,498,567 2,205,565 3,327,544
Total expenditures 48,120,215 51,527,943 63,135,624 60,128,152
Excess (deficiency) of revenues
over (under) expenditures (6,303,033) (2,596,192) (12,240,349) (2,468,060)
OTHER FINANCING SOURCES (USES):
Refunding bonds issued 5,538,780
Payment to refunded bond escrow agent (5,538,780)
Issuance of long-term debt 4,700,000 15,285,000 9,526,351 6,625,000
Premium on debt issuance
Proceeds of capital lease 554,625 2,159,279
Transfers in 5,835,095 2,604,575 2,416,072 2,349,442
Transfers (out) (1,730,450) (1,489,929) (3,596,807) (1,996,266)
Total other financing sources (uses) 8,804,645 16,954,271 10,504,895 6,978,176
NET CHANGE IN FUND BALANCES $ 2,501,612 $ 14,358,079 $ (1,735,454) $ 4,510,116
Debt service as a percentage of noncapital
expenditures 12.00/0 10.70/0 13.60/0 12.70/0
Source: Comprehensive Annual Financial Reports
90
Table 4
2001 2002 2003 2004 2005 2006
$ 16,579,367 $ 18,894,068 $ 20,964,737 $ 22,986,590 $ 26,640,930 $ 30,019,657
17,489,408 15,875,933 16,047,297 17,684,899 18,998,058 20,343,413
910,907 938,225 855,879 911,505 988,573 1,132,500
165,379 174,264 192,243 208,855 215,872 257,950
26,856 20,675 28,147 21,127 25,465 24,260
233,219 91,049 1,151,169 1,700,044 1,235,337 1,383,169
10,709,710 11,930,612 12,571,989 13,215,882 14,250,484 16,499,994
3,222,517 3,522,895 3,422,952 3,338,979 3,959,476 4,639,922
4,118,361 6,818,363 8,556,002 10,022,001 8,255,342 6,779,904
1,835,650 2,963,755 1,451,106 1,332,568 1,148,517 1,967,473
6,397,702 3,573,399 5,757,543 6,655,240 5,443,517 5,254,058
1,039,093 656,186 1,304,367 5,012,607 1,931,762 3,424,786
62,728,169 65,459,424 72,303,431 83,090,297 83,093,333 91,727,086
16,750,445 14,748,842 21,025,986 24,894,438 22,272,681 20,539,006
23,957,206 26,155,876 28,406,261 29,689,083 33,057,120 35,813,329
6,954,265 7,949,472 4,627,292 4,752,409 5,247,546 5,206,224
6,336,352 6,962,373 8,094,780 8,404,074 9,176,686 9,548,416
15,842,919 15,005,659 22,845,204 13,463,619 11,760,356 9,056,102
3,853,087 5,019,164 5,027,222 5,502,897 5,642,487 5,914,819
216,148
293,668 70,745
3,285,426 4,215,673 4,487,778 4,544,502 4,018,765 4,210,628
76,979,700 80,057,059 94,514,523 91,251,022 91,685,457 90,359,269
(14,251,531 ) (14,597,635) (22,211,092) (8,160,725) (8,592,124) 1,367,817
4,130,000 7,316,688
( 4,130,000) (7,491,938)
20,992,749 20,120,000 6,913,483 11,805,000 9,070,000 9,550,000
404,361 49,644
3,193,675 1,454,541 2,192,680 3,496,765 3,341,047 4,095,018
(1,253,889) (1,906,600) (1,181,116) (2,162,259) (2,451,402) (2,857,338)
22,932,535 19,667,941 7,925,047 13,139,506 10,188,756 10,837,324
$ 8,681,004 $ 5,070,306 $ (14,286,045) $ 4,978,781 $ 1,596,632 $ 12,205,141
11.70/0 14.20/0 13.30/0 12.90/0 12.70/0 12.50/0
91
CITY OF DENTON, TEXAS
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Fiscal
Year
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Estimated Market Value
Real Personal
Property Property
$ 2,021,163,444 $ 454,825,979
2,176,249,854 468,851,541
2,322,359,777 419,578,093
2,551,781,177 529,990,564
2,959,019,481 665,990,501
3,343,400,379 618,020,979
3,761,322,990 654,159,101
4,129,344,174 659,848,833
4,468,428,305 695,572,385
4,876,565,660 733,405,037
Source: Denton Central Appraisal District
Less:
Tax-Exempt
Property
$ 360,675,429
360,974,029
393,738,972
431,651,247
565,373,249
594,129,333
712,069,576
746,990,136
789,056,859
820,593,886
92
Total Taxable
Assessed
Value
$ 2,115,313,994
2,284,127,366
2,348,198,898
2,650,120,494
3,059,636,733
3,367,292,025
3,703,412,515
4,042,202,871
4,374,943,831
4,789,376,811
Table 5
Total Direct
Tax
Rate
$ 0.52840
0.51315
0.50815
0.50815
0.52815
0.54815
0.54815
0.54815
0.59815
0.60815
CITY OF DENTON, TEXAS
PROPERTY TAX RATES (PER $100 OF ASSESSED VALUE)
DIRECT AND OVERLAPPINGl GOVERNMENTS
LAST TEN FISCAL YEARS
Table 6
Overlapping Rates
Denton
City of Denton Independent Total Direct
Fiscal Operating Debt Service Total Denton School & Overlapping
Year Rate Rate Direct Rate County District Rates
1997 $ 0.32070 $ 0.20770 $ 0.52840 $ 0.26690 $ 1.66070 $ 2.45600
1998 0.32008 0.19307 0.51315 0.25590 1.77500 2.54405
1999 0.31187 0.19628 0.50815 0.24875 1.85000 2.60690
2000 0.31948 0.18867 0.50815 0.23504 1.70000 2.44319
2001 0.31948 0.20867 0.52815 0.23193 1.84400 2.60408
2002 0.31948 0.22867 0.54815 0.25193 1.85400 2.65408
2003 0.33816 0.20999 0.54815 0.24897 1.86400 2.66112
2004 0.34928 0.19887 0.54815 0.24717 1.86400 2.65932
2005 0.39928 0.19887 0.59815 0.25480 1.86400 2.71695
2006 0.42928 0.17887 0.60815 0.24648 1.86400 2.71863
Source: City of Denton Tax Office, Denton County Tax Office, and Denton Independent School District
lOverlapping rates are those of local and county governments that apply to property owners with the City of Denton.
93
94
CITY OF DENTON, TEXAS
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
2006
Percentage of
Taxable Total Taxable
Assessed Assesed
Name of Taxpayer Value Value 1
Presbyterian $ 81,221,477 1.700/0
Hospital
Denton Regional 70,945,611 1.480/0
Hospital
Anderson 43,891,066 0.920/0
Merchandisers
Pac car, Inc. 43,267,721 0.900/0
United Copper 43,231,435 0.900/0
Sally Beauty 36,816,776 0.770/0
Verizon 36,062,542 0.750/0
Inland Western 30,829,230 0.640/0
Denton Crossing
The Timber Links 28,436,559 0.590/0
James Wood 24,500,082 0.510/0
Total $ 439,,202,,499 9.170/0
Source: Denton Central Appraisal District
Table 7
1997
Percentage of
Taxable Total Taxable
Assessed Assesed
Name of Taxpayer Value Value2
Peterbilt Motors $ 46,228,753 2.190/0
General Telephone 38,543,031 1.820/0
(Verizon Southwest)
Denton Regional 31,353,267 1.480/0
Medical Center
Tetra Pak 30,532,549 1.440/0
Texas Instruments 23,928,469 1.130/0
Golden Triangle Mall 17,944,277 0.850/0
Andrew Corporation 17,404,452 0.820/0
Safety Kleen Corp. 13,031,197 0.620/0
Acme Brick 12,324,665 0.580/0
Wal Mart 11,557,351 0.550/0
Total $ 242,,848,,011 11.480/0
ITotal taxable assessed value for tax year 2005 (fiscal year 2006) is $4,789,376,811.
2Total taxable assessed value for tax year 1996 (fiscal year 1997) is $2,115,313,994.
95
CITY OF DENTON, TEXAS
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TWO FISCAL YEARS
Taxes Levied Adjustments Adjusted Collected Within the
Within the to Levy in Taxes Levied Fiscal Year of the Levy Collections
Fiscal Fiscal Year Subsequent for the Percentage in Subsequent
Year of the Levy Years Fiscal Year Amount of Levy Years
2005 $ 26,457,399 $ 59,203 $ 26,516,602 $ 26,016,239 98.110/0 $ 309,502
2006 29,545,033 29,545,033 29,162,978 98.710/0
Source: City of Denton Tax Office and Denton Central Appraisal District
96
Table 8
Collected Within the
Fiscal Year of the Levy
Percentage
Amount of Levy
$ 26,325,741 99.280/0
29,162,978 98.710/0
97
CITY OF DENTON, TEXAS
RATIO OF OUTSTANDING DEBT BY TYPE
LAST SIX FISCAL YEARS
Governmental Activities Business- Type Activities
General Certificates General Certificates
Fiscal Obligation of Other Revenue Obligation of Other
Year Bonds Obligation Obligations Bonds Bonds Obligation Obligations
2001 $ 49,950,882 $ 21,924,825 $ 1,022 $ 211,035,241 $ 1,759,622 $ 8,504,895 $ 3,148,744
2002 58,663,791 27,628,284 635,442 274,875,129 1,508,017 12,188,878 3,141,222
2003 59,721,870 30,148,929 696,508 304,366,352 2,191,168 11,765,612 3,328,798
2004 55,893,370 40,540,162 1,244,678 293,105,000 2,046,630 11,325,838 3,141,222
2005 58,870,849 41,791,588 2,210,846 281,120,000 3,904,151 9,233,412 3,141,222
2006 58,742,900 46,700,000 3,559,742 277,305,000 3,582,100 11,975,000 3,141,222
Source: Comprehensive Annual Financial Reports
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
ISee Table 13 for personal income and population data.
98
Table 9
Total Percentage
Primary of Personal Per
Government Income I Capital
$ 296,325,231 0.018790/0 3,471.19
378,640,763 0.022480/0 4,190.59
412,219,237 0.020060/0 4,399.49
407,296,900 0.018890/0 4,143.91
400,272,068 0.017640/0 3,877.85
405,005,964 0.016800/0 3,736.87
99
CITY OF DENTON, TEXAS
RATIO OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
Table 10
General Bonded Debt Outstanding Percentage of
General Certificates Less: Amounts Actual Taxable
Fiscal Obligation of Available in Debt Value of Per
Year Bonds Obligation Service Fund Total Propertyl Capita2
1997 $ 24,791,730 $ 12,639,954 $ 501,588 $ 36,930,096 1.750/0 516.87
1998 31,806,730 16,640,000 1,061,887 47,384,843 2.070/0 648.66
1999 39,056,730 19,945,000 1,131,067 57,870,663 2.460/0 768.53
2000 40,105,923 20,881,000 822,913 60,164,010 2.270/0 725.08
2001 51,569,223 30,571,000 1,594,620 80,545,603 2.630/0 943.52
2002 60,185,495 39,806,000 934,406 99,057,089 2.940/0 1,096.31
2003 61,913,038 41,978,000 428,426 103,462,612 2.790/0 1,104.23
2004 55,893,370 40,540,162 296,731 96,136,801 2.380/0 978.11
2005 58,870,849 41,791,588 451,046 100,211,391 2.290/0 970.85
2006 58,742,900 46,700,000 439,658 105,003,242 2.190/0 968.83
Source: Comprehensive Annual Financial Reports
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
lSee Table 5 for property value data.
2See Table 13 for population data.
100
CITY OF DENTON, TEXAS
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF SEPTEMBER 30, 2006
Table 11
Estimated
Estimated Share of
Debt Percentage Overlapping
Governmental Unit Outstanding Applicablel Debt
Debt repaid with property taxes:
Denton Independent School District $ 448,611,529 88.040/0 $ 394,957,590
Denton County 174,702,571 12.190/0 21,296,243
Argyle Independent School District 37,648,877 1.840/0 692,739
Krum Independent School District 21,070,303 0.590/0 124,315
Subtotal, overlapping debt 417,070,888
City of Denton, direct debt 105,442,900 100.000/0 105,442,900
Total direct and overlappping debt 522,513,788
Source: "Texas Municipal Report" as of September 30, 2006, prepared by the Municipal Advisory Council.
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries
of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments
that is borne by the residents and businesses of the City of Denton. This process recognizes that, when
considering the City of Denton's ability to issue and repay long-term debt, the entire debt burden borne by
the residents and businesses should be taken into account. However, this does not imply that every
taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.
lThe percentage of overlapping debt applicable is estimated using taxable assessed property values.
Applicable percentages were estimated by determining the portion of the overlapping government's
taxable assessed value that is within the City of Denton's boundaries and dividing it by the overlapping
government's total taxable assessed value.
101
CITY OF DENTON, TEXAS
PLEDGED REVENUE COVERAGE
LAST FIVE FISCAL YEARS
Utility System1 Revenue Bonds
Fair Market Less:
Value Operating
Adjustment Expenses
Fiscal Operating Investment to Investment 1m pact Fee Before
Year Revenue Revenue Revenue 2 Revenue Depreciation
2002 $ 124,769,615 $ 8,406,425 $ 2,515,297 $ 4,294,000 $ 113,557,718
2003 140,450,819 4,320,188 (2,599,123) 5,150,000 125,351,837
2004 148,512,689 2,618,296 (1,523,523) 6,771,671 134,885,329
2005 170,450,120 3,114,254 (2,027,258) 4,206,630 150,549,007
2006 200,970,560 5,727,498 721,058 5,556,349 166,537,867
Source: Comprehensive Annual Financial Reports
1The Utility System includes the Electric, Water, and Wastewater funds.
2For the coverage calculation, the fair market adjustment to the value of investments is excluded.
3For the coverage calculation, franchise fees and return on investment payments to the General Fund
are excluded from operating expenses.
4Revenue bond covenants require a times coverage of 1.25 or greater.
102
Table 12
Add:
Franchise Fees
and Return Debt Service
on Investment Net
Paid to Available Times
General Fund3 Revenue Principal Interest Coverage 4
$ 8,487,570 $ 34,915,189 $ 7,345,000 $ 12,130,021 1.79
9,207,505 31,177,552 9,965,000 14,324,178 1.28
9,596,617 31,090,421 11,255,000 15,979,950 1.14
10,922,442 36,117,181 12,545,000 14,429,925 1.34
12,839,184 59,276,782 12,330,000 13,798,811 2.27
103
CITY OF DENTON, TEXAS
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Table 13
Fiscal Estimated Personal Per Capita Average Grade School University Unemployment
Year Population 1 Income Income2 Age 3 Enrollment4 Enrollment5 Rate6
1997 71,450 $ 858,328,850 $ 12,013 30.7 12,777 32,598 2.80/0
1998 73,050 877,549,650 12,013 30.7 12,986 33,113 2.40/0
1999 75,300 904,578,900 12,013 30.7 13,283 33,407 2.70/0
2000 82,976 996,790,688 12,013 26.8 13,667 33,317 3.10/0
2001 85,367 1,577,069,958 18,474 26.8 14,408 34,026 4.70/0
2002 90,355 1,684,488,265 18,643 26.8 13,600 36,985 7.40/0
2003 93,697 2,054,962,604 21,932 26.9 15,128 38,612 7.40/0
2004 98,288 2,155,652,416 21,932 33.0 16,932 39,618 5.80/0
2005 103,220 2,269,291,700 21,985 33.0 18,395 41,204 3.30/0
2006 108,381 2,410,068,297 22,237 33.0 19,701 43,120 3.50/0
Sources:
lCity of Denton Planning and Development Department estimate
2United States Census and Denton Chamber of Commerce
3United States Census and Denton Chamber of Commerce
4Denton Independent School District
5University of North Texas' and Texas Woman's University's Denton campus enrollment
6Texas Workforce Commission estimate
104
CITY OF DENTON, TEXAS Table 14
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
2006 1997
Percentage Percentage
of Total City of Total City
Name of Employer Em ployees Employment Name of Employer Em ployees Employment
University of North 7,351 12.780/0 University of North 5,500 10.720/0
Texas Texas
Denton Independent 2,600 4.520/0 Denton State School 2,100 4.090/0
School District
Pac car, Inc. 2,000 3.480/0 Denton Independent 1,648 3.210/0
(Peterbilt Motors) School District
Denton State School 1,450 2.520/0 Boeing Electronics 1,800 3.510/0
Denton County 1,441 2.510/0 Texas Woman's 1,300 2.530/0
(in Denton) University
City of Denton 1,244 2.160/0 Peterbilt Motors 1,000 1.950/0
Texas Woman's 1,159 2.020/0 City of Denton 1,000 1.950/0
University
Federal Emergency 1,100 1.910/0 Denton County 925 1.800/0
Management Agency (in Denton)
Denton Regional 800 1.390/0 Columbia Medical 850 1.660/0
Medical Center Center
Denton Community Victor Equipment
(Presbyterian) 750 1.300/0 Company 675 1.320/0
Hospital
Total 19,895 34.600/0 Total 16,798 32.750/0
Source: Denton Chamber of Commerce
105
CITY OF DENTON, TEXAS
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Full-time Equivalent Employees for Fiscal Year
Function / Program 1997 1998 1999 2000 2001
General government 189.11 195.28 169.41 179.03 200.53
Public safety
Police 150.79 159.79 170.39 173.29 176.62
Fire 119.25 121.25 130.25 145.25 151.25
Animal services 9.00 8.00 8.00 8.00 8.00
Public works 49.00 54.00 52.00 52.00 61.00
Parks and recreation 94.52 92.32 96.91 108.15 115.15
Electric system 150.25 145.20 128.75 128.75 136.75
Water system 63.69 60.69 103.71 106.71 110.21
Wastewater system 73.63 72.63 72.40 72.90 81.00
Solid waste 67.08 66.08 66.75 69.25 88.50
Materials management 10.00 10.00 10.00 10.00 13.00
Fleet services 15.50 14.50 15.50 16.50 18.50
Technology services 20.50 24.55 26.25 30.75 29.75
Total 1,012.32 1,024.29 1,050.32 1,100.58 1,190.26
Source: City of Denton Budget Office
106
Table 15
2002 2003 2004 2005 2006
203.75 202.75 202.75 211.75 192.50
178.14 180.14 183.73 198.23 206.23
151.25 152.25 152.25 160.25 162.25
8.00 8.00 8.00 8.00 8.00
83.00 84.00 84.00 77.00 37.00
117.17 136.37 152.34 149.62 141.85
107.50 108.50 109.50 110.50 110.50
112.71 113.71 120.00 130.00 161.75
76.00 79.12 80.12 83.22 83.12
88.50 88.50 88.50 82.50 85.00
13.00 15.00 15.00 14.00 12.50
18.50 20.00 19.00 16.00 17.00
34.75 33.75 33.75 29.75 26.00
1,192.27 1,222.09 1 ,248.94 1,270.82 1,243.70
107
CITY OF DENTON, TEXAS
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Function / Program
Public Safety
Police
Calls for service
Traffic citations issued
Fire
Fire calls for service
EMS calls for service
Inspections (Businesses)
Animal Services
Animals sheltered
Animals adopted, transferred, or returned
Public Works
Street repaving (square yards)
Pot holes repaired
Cutouts base failures (square feet)
Crack seal maintenance (linear feet)
Parks and Recreation
Attendance
Leisure Services
Water Park
Total Acres Maintained
Water System
Number of customers
Annual finished water production (in thousand gallons)
Wastewater System
Number of customers
Annual wastewater discharge (in thousand gallons)
Solid Waste
Number of customers (residential and commercial)
MSW Landfilled (tons)
Recycling collections (tons)
Source: Various city departments
Fiscal Year
1997 1998 1999 2000
50,665 46,122 50,194 57,466
19,348 28,375 38,882 29,838
2,100 2,200 2,200 2,200
5,426 6,603 6,603 6,445
4,700 4,000 4,300 3,540
4,531 4,973 4,974 4,304
2,448 1,973 2,266 2,171
69,963 1 60,000 50,000 43,978
11,000 14,000 3,000 4,000
270,000 180,000 200,000 108,458
NA NA NA NA
NA NA 957,743 980,000
NA NA NA NA
NA NA 1,378 1,846
17,288 17,924 18,824 21,057
4,668,292 5,165,598 4,769,096 5,386,680
17,269 17,798 18,258 19,324
4,711,324 4,398,196 4,208,290 4,756,640
18,861 19,342 19,842 21,550
103,061 103,080 111,920 111,850
10,448 13,124 16,768 16,732
Note: Fire calls for 1997-2002 were rounded to the nearest hundred by department.
1 linear feet
2 lane miles of repaving and reconstruction
3 curbside residential recycling program introduced
108
Table 16
2001 2002 2003 2004 2005 2006
57,704 68,869 68,727 69,312 73,154 73,346
38,628 39,138 38,181 34,804 36,757 39,483
2,200 2,800 2,894 2,917 3,013 3,495
7,200 7,200 8,808 7,012 6,527 6,840
2,794 2,802 3,114 3,000 3,727 3,882
5,234 5,098 4,769 5,166 4,320 4,443
2,269 3,015 1,487 1,777 2,091 2,167
50,000 107,956 211,113 32.41 2 19.44 2 32 2
5,000 8,304 5,162 4,004 5,479 3,971
150,000 165,335 94,876 79,010 124,442 171,543
NA NA NA NA 40,338 79,314
869,960 893,710 1,026,309 981,883 952,866 985,778
NA NA 102,637 107,198 141,495 162,039
1,916 2,084 2,107 2,190 2,208 2,262
22,600 24,000 25,099 26,271 27,583 28,805
4,966,603 5,070,200 5,636,745 5,369,939 5,901,750 7,097,403
20,913 22,275 23,499 24,441 25,690 26,951
5,190,410 4,687,960 4,689,450 4,967,440 5,039,240 4,402,420
23,265 23,783 24,254 25,154 26,062 27,805
110,172 107,901 107,061 122,113 122,477 114,060
14,060 11,965 15,322 3 24,050 25,036 25,241
109
CITY OF DENTON, TEXAS
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Fiscal Year
Function / Program 1997 1998 1999 2000 2001
Public safety
Police
Police stations 1 1 1 1 1
Police patrol units 57 68 97 103 104
Fire
Fire stations 6 6 6 6 6
Emergency vehicles NA 19 19 16 20
Animal services
Animals shelters 1 1 1 1 1
Public works
Lane miles added per year NA NA NA 74.02 36.30
Streetlights NA NA NA NA 5,426
Parks and recreation
Parks NA NA 26 26 27
Park acreage NA NA 743 743 813
Recreation centers NA NA 10 10 10
Water system
Water mains (miles) 341 351 380 422 433
Raw water (in thousand gallons) 4,942,512 5,443,622 5,159,230 5,647,014 5,185,568
Wastewater system
Wastewater mains (miles) 341 347 360 393 396
Maximum daily capacity (in thousand gallons) 15 15 15 15 15
Solid waste
Landfills 1 1 1 1 1
Source: Various city departments
110
Table 17
2002
2003
2004
2005
2006
1 1 1 1 1
138 141 143 148 149
6 6 6 6 6
20 21 22 21 22
1 1 1 1 1
32.15 34.95 14.79 24.56 25.34
5,713 6,086 6,931 7,104 7,118
28 33 34 34 37
981 1,177 1,240 1,205 1,272
10 11 12 13 13
458 478 497 511 520
5,472,708 6,168,039 6,046,070 6,234,076 7,322,361
414 426 442 452 459
15 15 21 21 21
1 1 1 1 1
111
112
CITY OF DENTON, TEXAS
GENERAL FUND
COMPARATIVE BALANCE SHEET
SEPTEMBER 30, 2006 AND 2005
ASSETS:
Cash and cash equivalents
Receivables, net of allowances:
Taxes
Accrued interest
Other
Due from other governments
Interfund receivables
Total assets
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable
Interfund payables
Due to other governments
Other liabilities
Deferred revenue
Total liabilities
FUND BALANCES:
Reserved for encumbrances
Unreserved, designated
Unreserved, undesignated
Total fund balances
Total liabilities and fund balances
2006
2005
$ 11,260,085
$ 6,738,492
3,906,675
209,625
2,130,327
522,658
1,440,895
$ 19,470,265
3,937,328
107,604
1,598,062
159,448
1,752,973
$ 14,293,907
$ 1,383,051 $ 1,444,481
1,357,762 1,418,596
396
644,683 653,912
1,028,258 847,732
4,414,150 4,364,721
242,088 210,818
1,550,000
13,264,027 9,718,368
15,056,115 9,929,186
$ 19,470,265 $ 14,293,907
113
Exhibit XXIX
CITY OF DENTON, TEXAS
BALANCE SHEET - TRADITIONAL FORMAT
ENTERPRISE FUNDS
SEPTEMBER 30, 2006
Electric Water Wastewater Denton Utility
System System System Systems
Fund Fund Fund Subtotal
ASSETS:
Current:
Cash, cash equivalents and investments,
at fair value $ 70,857,635 $ 19,237,037 $ 3,245,896 $ 93,340,568
Receivables, net of allowances:
Accounts 9,545,940 1,633,218 1,130,241 12,309,399
Un billed utility service 6,425,619 1,182,883 969,777 8,578,279
Accrued interest 445,155 200,979 44,450 690,584
Interfund receivables 1,380,283 381,847 230,014 1,992,144
Other receivables 3,840 3,840
Prepaid expenses 2,170 9,444 11,614
Deferred charges 953 953
Deferred debt issuance costs 55,060 63,082 38,084 156,226
Restricted assets:
Cash, cash equivalents and investments,
at fair value 38,634,645 43,259,867 27,396,366 109,290,878
Escrow deposit 134,579 88,765 58,356 281,700
Interfund receivables 2,429,896 186,597 98,113 2,714,606
Accrued interest 369,956 300,182 178,615 848,753
Noncurrent:
Deferred Debt Issuance Cost 673,908 812,446 390,586 1,876,940
Fixed assets, net of accumulated depreciation 91,242,624 181,628,246 133,686,196 406,557,066
Total assets $ 222,196,253 $ 248,981,159 $ 167,476,138 $ 638,653,550
LIABILITIES:
Current:
Accounts payable $ 23,203,393 $ 300,551 $ 199,299 $ 23,703,243
Com pensated absences payable 435,578 449,821 257,094 1,142,493
Interfund payables 67,198 411,264 77,984 556,446
Deposits 3,436,143 273,174 4,029 3,713,346
Payable from restricted assets:
Accounts payable 168,023 531,307 61,190 760,520
Retainage payable 151,107 76,307 227,414
Accrued interest 1,355,557 2,180,756 1,044,224 4,580,537
Interfund payables 466 466
Revenue and general obligation bonds 4,889,449 5,298,423 3,586,869 13,774,741
Noncurrent:
Payable from restricted assets:
Arbitrage payable 2,642 513 1,950 5,105
General obligation bonds payable
Certificates of obligation
Revenue bonds payable, net of discount 81,321,329 128,993,752 60,609,950 270,925,031
Deferred amount on refunding (2,338,073) ( 4,515,455) (1,305,398) (8,158,926)
Notes payable 3,141,222 3,141,222
Com pensated absences payable 31,780 44,028 28,675 104,483
Landfill closure/postclosure costs
Total liabilities 112,573,485 137,260,463 64,642,173 314,476,121
FUND EQUITY:
Retained earnings:
Reserved:
Debt service 11,187,124 14,676,459 7,686,606 33,550,189
Rate stabilization 50,207,183 10,000,000 4,000,000 64,207,183
Water tower painting 775,000 775,000
Infrastructure financing 500,000 24,323,011 19,057,861 43,880,872
o & M contingency 300,000 275,000 575,000
Capital construction 500,000 250,000 750,000
Lewisville water treatment plant
regulatory rehabilitation 4,700,000 4,700,000
TXDOT highway relocations 2,700,000 2,700,000
Unreserved 47,728,461 53,746,226 71,564,498 173,039,185
Total fund equity 109,622,768 111,720,696 102,833,965 324,177,429
Total liabilities and fund equity $ 222,196,253 $ 248,981,159 $ 167,476,138 $ 638,653,550
114
$ 6,664,834 $ 100,005,402
798,615 13,108,014
641,829 9,220,108
44,430 735,014
129,645 2,121,789
3,840
11,614
953
11,219 167,445
5,344,223 114,635,101
281,700
41,662 2,756,268
58,875 907,628
106,257 1,983,197
15,505,062 422,062,128
$ 29,346,651 $ 668,000,201
$ 217,644 $ 23,920,887
236,862 1,379,355
1,020,593 1,577,039
73,049 3,786,395
198,280 958,800
23,606 251,020
100,479 4,681,016
466
1,935,651 15,710,392
5,105
3,130,594 3,130,594
10,515,386 10,515,386
270,925,031
(118,301) (8,277,227)
3,141,222
76,244 180,727
3,689,408 3,689,408
21,099,495 335,575,616
Solid
Waste
Fund
2,200,000
5,224,714
300,000
300,000
222,442
8,247,156
$ 29,346,651
Exhibit XXX
Total
Enterprise
Funds
33,550,189
66,407,183
775,000
49,105,586
875,000
1,050,000
4,700,000
2,700,000
173,261,627
332,424,585
$ 668,000,201
115
CITY OF DENTON, TEXAS
STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN RETAINED EARNINGS - TRADITIONAL FORMAT
ENTERPRISE FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2006
Denton
Electric Water Wastewater Utility
System System System Systems
Fund Fund Fund Subtotal
REVENUES:
Utility services $ 142,984,230 $ 25,708,728 $ 21,045,736 $ 189,738,694
Other fees 6,435,570 3,782,958 1,013,338 11,231,866
Total operating revenues 149,419,800 29,491,686 22,059,074 200,970,560
OPERATING EXPENSES:
Operating expenses before depreciation 137,989,588 16,124,174 12,424,105 166,537,867
Depreciation 4,074,474 4,391,403 3,837,806 12,303,683
Total operating expenses 142,064,062 20,515,577 16,261,911 178,841,550
Operating income 7,355,738 8,976,109 5,797,163 22,129,010
NON-OPERATING REVENUES (EXPENSES):
Investment revenue 3,747,451 2,193,478 1,120,627 7,061,556
Interest expense and fiscal charges (3,607,060) (6,481,247) (3,007,285) (13,095,592)
Impact fee revenue 3,944,965 1,611,384 5,556,349
Gain (loss) on disposal of capital assets (43,367) 454,203 45,537 456,373
Other non-operating revenues (expenses) 160,753 10,072 170,825
Total non-operating revenues (expenses) 97,024 272,152 (219,665) 149,511
Income before contributions and transfers 7,452,762 9,248,261 5,577,498 22,278,521
CONTRIBUTIONS AND TRANSFERS:
Capital contributions 3,625,072 6,397,582 10,022,654
Transfers in 124 124
Transfers out (63,617) (103,776) (680,414) (847,807)
Total contributions and transfers (63,617) 3,521,296 5,717,292 9,174,971
Increase in retained earnings 7,389,145 12,769,557 11,294,790 31,453,492
RETAINED EARNINGS:
Retained earnings at beginning of year 102,233,623 98,951,139 91,539,175 292,723,937
Retained earnings at end of year $ 109,622,768 $ 111,720,696 $ 102,833,965 $ 324,177,429
116
Exhibit XXXI
Solid Total
Waste Enterprise
Fund Funds
$ 14,572,633 $ 204,311,327
51,499 11,283,365
14,624,132 215,594,692
11,729,140 178,267,007
1,513,700 13,817,383
13,242,840 192,084,390
1,381,292 23,510,302
237,314 7,298,870
(518,447) (13,614,039)
5,556,349
456,373
170,825
(281,133) (131,622)
1,100,159 23,378,680
10,022,654
124
(47,423) (895,230)
(47,423) 9,127,548
1,052,736 32,506,228
7,194,420 299,918,357
$ 8,247,156 $ 332,424,585
117
CITY OF DENTON, TEXAS
STATEMENT OF CASH FLOWS - TRADITIONAL FORMAT
ENTERPRISE FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2006
Denton
Electric Water Wastewater Utility
Fund Fund Fund Systems
System System System Subtotal
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 148,261,332 $ 29,649,621 $ 21,821,225 $ 199,732,178
Cash paid to em ployees for services (5,187,592) (8,693,107) ( 4,697 ,507) (18,578,206)
Cash paid to suppliers (114,340,130) (6,875,234) (8,169,747) (129,385,111 )
Net cash provided by operating activities 28,733,610 14,081,280 8,953,971 51,768,861
CASH FLOWS FROM NON CAPITAL FINANCING
ACTIVITIES:
Transfers out (63,617) (103,776) ( 680,414) (847,807)
Transfers in 124 124
Net cash used by noncapital financing activities (63,617) (103,776) ( 680,290) (847,683)
CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES:
Principal payments on capital debt (3,625,692) ( 4,684,132) (3,277,765) (11,587,589)
Interest and fiscal charges (3,637,945) (6,530,745) (3,037,423) (13,206,113)
Proceeds from issuance of capital debt 8,026,750 8,026,750
Proceeds from sale of capital assets 454,203 45,537 499,740
Proceeds from impact fees 3,944,965 1,611,384 5,556,349
Acquisition and construction of capital assets (10,999,420) (7,110,537) (3,268,499) (21,378,456)
Net cash used by capital financing activities (10,236,307) (13,926,246) (7,926,766) (32,089,319)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale and maturities of investment securities 27,703,032 26,508,065 11,453,389 65,664,486
Purchase of investment securities (42,140,000) (29,455,000) (12,495,000) (84,090,000)
Interest received on investments 3,919,358 2,038,765 1,062,663 7,020,786
Net cash provided (used) by investing activities (10,517,610) (908,170) 21,052 (11,404,728)
Net increase (decrease) in cash and cash equivalents 7,916,076 (856,912) 367,967 7,427,131
Cash and cash equivalents at beginning of year 2,437,305 2,207,228 1,250,463 5,894,996
Cash and cash equivalents at end of year 10,353,381 1,350,316 1,618,430 13,322,127
Investments, at fair value 99,138,899 61,146,588 29,003,687 189,289,174
Cash, cash equivalents and investments, at fair value $ 109,,492,,280 $ 62,,496,,904 $ 30,,622,,117 $ 202,,611,,301
118
Exhibit XXXII
Solid Total
Waste Enterprise
Fund Funds
$ 14,207,080 $ 213,939,258
(5,427,047) (24,005,253)
(4,864,780) (134,249,891 )
3,915,253 55,684,114
(47,423) (895,230)
124
(47,423) (895,106)
2,420,749 (9,166,840)
(487,440) (13,693,553)
8,026,750
499,740
5,556,349
(2,074,620) (23,453,076)
(141,311) (32,230,630)
5,448,998 71,113,484
(8,744,000) (92,834,000)
186,492 7,207,278
(3,108,510) (14,513,238)
618,009 8,045,140
747,097 6,642,093
1,365,106 14,687,233
10,643,951 199,933,125
$ 12,,009,,057 $ 214,,620,,358
(continued)
119
CITY OF DENTON, TEXAS
STATEMENT OF CASH FLOWS - TRADITIONAL FORMAT
ENTERPRISE FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2006
Denton
Electric Water Wastewater Utility
Fund Fund Fund Systems
System System System Subtotal
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING
ACTIVITIES:
Operating income $ 7,355,738 $ 8,976,109 $ 5,797,163 $ 22,129,010
Adjustments:
Depreciation expense 4,074,474 4,391,403 3,837,806 12,303,683
Decrease (Increase) in receivables (702,557) 44,953 (225,490) (883,094)
Decrease (Increase) in interfund receivables (455,911) 112,983 (12,359) (355,287)
Decrease (Increase) in prepaid items 7,278,909 (2,170) (9,444) 7,267,295
Increase (Decrease) in accounts payabh~ 11,161,173 480,875 (100,119) 11,541,929
Increase in compensated absences payabh 68,121 91,925 25,736 185,782
Increase in closure/postclosure liability
Increase (Decrease) in interfund payables ( 46,337) (14,798) (359,322) (420,457)
Total adjustments 21,377,872 5,105,171 3,156,808 29,639,851
Net cash provided by operating activities $ 28,,733,,610 $ 14,,081,,280 $ 8,,953,,971 $ 51,,768,,861
NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES:
Noncash activity during the year consisted of contributed capital assets for the Water and Wastewater funds in the amount
of $3,625,072 and $6,397,582, respectively; the change in the fair value of investments of ($11,058), $410,694,
$321,422 and $36,790 for the Electric, Water, Wastewater and Solid Waste funds, respectively.
120
Exhibit XXXII
Solid
Waste
Fund
Total
Enterprise
Funds
$ 1,381,292 $ 23,510,302
1,513,700 13,817,383
(372,483) (1,255,577)
(44,569) (399,856)
7,267,295
160,737 11,702,666
42,041 227,823
277,781 277,781
956,754 536,297
2,533,961 32,173,812
$ 3,,915,,253 $ 55,,684,,114
121
CITY OF DENTON, TEXAS
BALANCE SHEET - TRADITIONAL FORMAT
INTERNAL SERVICE FUNDS
SEPTEMBER 30, 2006
Materials Fleet Motor Risk
Management Services Pool Retention
Fund Fund Fund Fund
ASSETS:
Current assets:
Cash, cash equivalents and investments,
at fair value $ $ 334,839 $ 12,682,066 $ 4,522,952
Accrued interest receivable 36,169 53,873
Other receivables 567 112,960
Interfund receivables 57,528 162,827
Merchandise inventory 3,974,030 59,316
Prepaid items 8,866 21,880
Deferred debt issuance costs 4,761 4,088 35,237
Restricted assets:
Cash, cash equivalents and investments,
at fair value 36,326 1,797,555
Accrued interest 9,189
Escrow deposit 1,934,766
Total current assets 3,988,224 605,057 16,516,862 4,739,652
Noncurrent assets:
Fixed assets, net of accumulated depreciation 705,857 3,250,095 15,705,581 9,498
Total assets $ 4,694,081 $ 3,855,152 $ 32,222,443 $ 4,749,150
LIABILITIES:
Current liabilities:
Accounts payable $ 271,295 $ 94,012 $ 55,409 $ 60,925
Claims payable 453,750
Compensated absences payable 43,292 48,369
Accrued interest 3,081 13,485 31,347
Interfund payables 3,501,888 9,253 10,460
Leases payable 935,736
Payable from restricted assets:
Accounts payable 13,981
Certificate and general obligation bonds 22,900 77,699 932,683
Total current liabilities 3,842,456 242,818 1,979,616 514,675
Noncurrent liabilities:
Leases payable 2,624,006
Payable from restricted assets:
General obligation bonds payable 4,091
Certificates of obligation 537,915 2,215,196 3,381,604
Claims payable 2,541,463
Compensated absences payable 626 12,010
Total liabilities 4,380,997 2,470,024 7,989,317 3,056,138
FUND EQUITY:
Retained earnings:
Reserved for capital projects 37,110 1,792,763
Reserved for fleet replacement 11,631,572
Reserved for future claims 1,683,514
Unreserved, undesignated 313,084 1,348,018 10,808,791 9,498
Total fund equity 313,084 1,385,128 24,233,126 1,693,012
Total liabilities and fund equity $ 4,694,081 $ 3,855,152 $ 32,222,443 $ 4,749,150
122
Exhibit XXXIII
Technology
Services
Fund
Internal
Service
Funds
$ 616,833 $ 18,156,690
90,042
113,527
149,755 370,110
4,033,346
30,746
18,611 62,697
1,184,182 3,018,063
500 9,689
1,934,766
1,969,881 27,819,676
3,711,688 23,382,719
$ 5,681,569 $ 51,202,395
$ 161,215 $ 642,856
453,750
95,810 187,471
11,037 58,950
15,037 3,536,638
935,736
7,900 21,881
362,232 1,395,514
653,231 7,232,796
2,624,006
4,091
2,061,719 8,196,434
2,541,463
13,605 26,241
2,728,555 20,625,031
1,176,782 3,006,655
11,631,572
1,683,514
1,776,232 14,255,623
2,953,014 30,577,364
$ 5,681,569 $ 51,202,395
123
CITY OF DENTON, TEXAS
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN RETAINED EARNINGS - TRADITIONAL FORMAT
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2006
Materials Fleet Motor Risk
Management Services Pool Retention
Fund Fund Fund Fund
OPERATING REVENUES:
Charges for goods and services $ 6,319,887 $ 5,009,354 $ 4,266,426 $ 3,125,561
Miscellaneous 77,964 13,134 20,887 96,270
Total operating revenues 6,397,851 5,022,488 4,287,313 3,221,831
OPERATING EXPENSES:
Operating expenses before depreciation 6,055,209 4,635,913 466,065 2,768,413
Depreciation 5,351 93,277 2,968,407 2,845
Total operating expenses 6,060,560 4,729,190 3,434,472 2,771,258
Operating income 337,291 293,298 852,841 450,573
NONOPERATING REVENUES (EXPENSES):
Investment revenue 6,289 438,777 146,991
Interest expense and fiscal charges (24,932) (110,030) (226,600)
Gain on disposal of capital assets 451,329
Other non-operating expenses
Total non-operating revenues (expenses) (24,932) (103,741) 663,506 146,991
Income before contributions and transfers 312,359 189,557 1,516,347 597,564
Capital contributions 59,629
Transfers in 222,145
Transfers out (9,253) (318,610)
Change in retained earnings 312,359 402,449 1,575,976 278,954
Retained earnings at beginning of year 725 982,679 22,657,150 1,414,058
Retained earnings at end of year $ 313,084 $ 1,385,128 $ 24,233,126 $ 1,693,012
124
Exhibit XXXIV
Total
Technology Internal
Services Service
Fund Funds
$ 6,428,687 $ 25,149,915
208,255
6,428,687 25,358,170
5,384,680 19,310,280
1,011,831 4,081,711
6,396,511 23,391,991
32,176 1,966,179
68,986 661,043
(92,774) ( 454,336)
451,329
(3,384) (3,384)
(27,172) 654,652
5,004 2,620,831
59,629
29,500 251,645
(266,356) (594,219)
(231,852) 2,337,886
3,184,866 28,239,478
$ 2,953,014 $ 30,577,364
125
126
mY
CITY OF DENTON, -TEXA-S.
Independent Auditors': Reports on Federal.A wards:
in Accordance- with .OMB Circular A-133 . .
, , .
'September30'~ 2006, ,.
. . . . . .,
..
KPMG_ LLP
Suite 3100
717 North Harwood Street
,. D'all'as, TX 75201..;6585
,: -I~depelldent-A~ditors' I{eport 011' Intern~] -f;ontr()1 over-F_nancial_Reportin,g, .
and on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in 'Accordance with Government Auditing Standards. '" ,
Members of City Council
,City ,<;>f Denton, Tex(ls: ,
We have audited the financial statements of the governmental acti.vi~es, busi~ess type activities, each
major fund -and the aggregate. remaining fund information' of the City- of Denton,- Texas (the City) - as of - and-
for the year, ended: September 30_, 2006, which _colle_ctively ,comprise the City's basic ,financial statements .,
and' have issued our rep~rt thereon dated February 2, 2007. We conducted our audit In accordance with.
auditing stand,ards generally _accepted in the UnitedSt~tes ,of Americ.a ,and the ,standards applicable -to-
financial _audits contained in Government Au:diting Sta~da~ds,: i~sued l1Y the Comptrol.l~r General of the .
United . States.
. .. , , ,
Internal Control over 'Financial Reporting
In plan~ing and: performing our audit, we considered' the .City; s inte~al contiol over- financial reporting in.
'orcier. to 'de~ermine qur ,auditi:ng ,proc~dQres for- the purpose of ~xpressing. our- opinjons all the, fin~ncial'
statements and .not t~ provi~e .an opi~ion on the internal control: over tl.n~~ial reporting.. qur cO,nsi~eratio~ _
of the internal control over financial reporting would not necessarily disclose all matters in internaJ control
that- might be material weaknesse.s.. 'A ,material ,weakness is a-reportable condition ,in. w.hich .the ,desi,gn _or
operation of one or more internal co~trol components d6'es not reduce to a- relatively low lev'el .the risk that
-misstatements caused -bY. error. or- fraud in .amounts-that \vouldbe -inaterial in- relation'. to' the financial
sta~ements ~eing, audite~ - may occur and not be detected within a ti~ely, pe!i~~. ~y employees in. the norma~, .
course of performing their assigned fi1nctions~- We noted -no matters involving the internal control over
financial, reporting -and_ its - operation that we . consider- to be .material ,weaknesses.- ' "
'Compliance and 'Other Matters
'As' part of obtaining reasonable, assuraJiceabo-ut whether. the City '-sfinancittl statements. are free. of material' ,:
,misstatement, ,we _ performed tests - of its c.ompliance- with ,certain provisions, of 'laws,. regulations, contracts"
and grant -agreements, nonc-ompliance -WIth -which could have .8. . direct , 'and material-effect on. the
-determination of financial- stat~ment amounts. H.owever" providing an. opinion ,on -compliance- with tnose, ,.
provisions ~as not an .objective of _our audit, and accor~ingly, we d~ ,not ~xpress s,uch an opinion. The
results of'otir'tests disclosed no- ihstances of noncompliance' or other matters that is-:required:to- be reported
under Government :Auditing: Standards oj
w ~ - noted cfert~nmatters that: we repoIted, to m~nagement - of the City in 3_ :separate .let.ter -dated: February - 2,
2007.
KPMG .LLp, a u.s. limited liability partnership, is the U.S.
member. firm of. KPMG International,- ~ Swis's cooperative.
,This report _is intended solely for tpe i~ormation and u~e .<;>f, the Mayor and City, Council, .m~nagerp.ent"
federal and state awardi~g agencies and' pass-through entiti~s and is not intended to. be and should not be
'us~d- by -anyone other than these specified parties. .
KPti4.G- LLf>
February. 2, 2007
2
-
,: KPMG,LLP
Suite 3100
717 North, Harwood Street
Dall'as. TX 7520i~6585
Independen~ A:udito~' 'Report on ,Co~pliance: w~th Requireme~ts
Applicable to Each Major Program. and on Internal Control ()ver
- -, -Compliance. in .Accordance 'with OMB'.Circular A~133 --
Members of City Council
City of 'Denton, Texas:
Complianc.e
We have audited the compliance. of the City of-Denton,.-Texas (the City) "with the types of compliance
requireme'nts described -in -the':U'.S. .Office of Managemeht -and .Budget (OMB). Circular A...133 Co'triplia'l1ce
S~pplement- that are- applicable to each of its major . federal programs' for the year enqed Sept.ember 30,
2006. The City;s major federal'programs are ide-ntified in'the summaiy' of -auditors'. results secti.on of the
accompanying schedule_ of findings' ,and- .questioned. costs., Compli~nce 'with -the- requireriIen~s. of-:laws,
regulations, contracts, and .grants applicable -to_ each of .its major federal programs. is the responsibility of
the City's- management. Out. responsibility is to express an opinion-:ori -the City'.s .compliance based on.:our
audit.
... .We (;onductecJ- ourauqitof 'coll1pliance,jn, acc-ordance- with auditing: stand(lfds gen~rally. acc.epted' in,:the
United States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued'by the Comptrollet.'G'enetal"oftheUnited States; andOMB 'Circular-A~133-, Audits' of"
States~ ,Local Gove.mYf:lenfs, 'an.d. Non-Profit Organizations.- .Those _standards ,and OM.B, Circular.A-133.
require that we plan and perform the audit to obtain reasonable assurance .about whether noncompliance
with the'types' of 'compliance 'requirements referred .to' above that could- have .a.direct and. material-effect 'on. .
a major federal program occurred. An, audit includes examining, ,on ,a test- basis,-evidence about the_ City's
compliance with those.' requirements and: perforniing such' .oth'er procedures 'tIS -we considered - necessary in
the: circumstan~es. .We- believe th.at .OUf audit. provides -3 reasonable- basis'for ,our ,opinion~ Our ,audit do~s
. not provide a legal determinatio~ <?f-t~e C~ty'-s compliance wi~b thos~ requirem~nts._
In our opinion, the, C.ity compHed, in all material respects, ,with, the .requirements referred to:above that. are
applicabl~ to each' ot its. major federal. programs for .the year ended September 30, 2006. .
Internal Con'trol ov~r Compliance
The management of the City is resp.onsible for establishing and main'taining effective internal control over
. compliance with the -:requiremerits. .of ,: laws, regulations, coIitracts~ and.. giants applicable. -to federal
programs.. In plannjng and. performing.our audit:, we cODsidere,d,th.e City'_s .internal control over co_mpliance
with requirements that could have a direct and material eff~ci on a major federal program .in order to
. determi~e. our: a~ditii1g : procedures: for th~' purp6s~ .of expr~ssing . our .opinion. :00 .comp:liance .an:d, to test .and
rep:ort on th~ inte~al:c?ntrol ()ver compliance in accor~ance with,OMB Ci~c~lar A-.1,3.3.
3
KPMG LLP, a u.s. limited liability partnership, is the U.S.
member firm of KPMG ,Inter~ational" a Swiss,cooperative.
. ,OUf co.nsideJ;ation, of the. internal control over c.ompliance would not necessarily - disclose -all ~atters i~ the ,:
internal control that might be material weaknesses. A material weakness is a reportable, condition in which
the design or-operation of one 'or more' .of the internal control components does not 'reduce: to -a-relatively
low level: the risk: that noncompliance with ,:applic.a~le ,~equirement~ .of l~ws" regulations, -~antracts, and
grants caused- by errat .or fraud that would be matetjal in rel~tion to a. major. fe.deral pr.ogram bei.ng audited
. m~y , occur ,and. nat l?e, ,detectfed ,within a : timely - periad by -employees - in the: nonnal. caurse.: of -performing'
their assigned functions. We noted: no ~~t~e~ involv~ng the: inte~~: c,ont!<?l:over cOlllpliance. and its
-operatianthat we-considerto be material weaknesses..
Schedule of Expenditures of Federal' A wards.
We. have audited the financial' statements .of the g.overnmental activities, the business-type activities, each
-majar- fund_, and th~ aggreg~te remai:ning fund. inforrnatjan of: the City as of and for the: year ,ended'
September 30, 2006,. and have issued our rep_ort th~re()n dated february_:2,_ 2097.,:Our aud~t wa~ pe~qrm~d ,_
for the. purpose of- forming opinio-ns 00. the financial -statements that collectively comprise the City's basic
financial statements~ The- -accompanying_ schedule of expendit\Jres of ~ederal' a~ards' 'is.: pres-ent~d. for-
purposes of' additianal analysis as required by OMB Circular A-133 and is nat a required _part of the basic
financial stateme'ots. 'Such information 'has 'been subjected to the auditing procedures- applied- in the. audit .of ,.
the basic ,financial, statements and~ in our. .opinion_, - is fairly ~tated,_ in all material respects, in. rel~tjon ~o. tJie,
baSic .financial statements - taken as a whole.
,- ., ,- . ,... . ---
This report is intended solely for the information and use .of the Mayor and -City Council, management,
federal and, state. awarding agencies and- pass-through entities and- is nat intended to - be . and: should not: be
used by ,any~ne other than thes~ sp~cified parties.
KPMGr. LL""P
-. --
February 2, 2007
4.
CITY OF DENTON, TEXAS_
Schedule _ of Expenditures of Federal A wards, :
Yea~ e.nd~d September-3D, 2006
Federal , Passed-through
Grant CFDA to.'
,: Fede~alg~antor/pass-throuah Irantor/program -title 1.0. number number ,Expenditures subrecipients
Federal awards:
U.s. Department of Housing Urban Development: : B-99-MC-48~OO36
Comm.unity-Developmeru Block Grant ']4.218 $ 185
Community Development Block Grant B-OO-MC-48-0036 14.218 30,783
Cornmur:tity .r;>eyelo~ent Block Grant -B..Q.l.~MC~8-OO36: 14~218 14,3] 6
Community Development Block Grant B-02~MC-48-0036 14.218 103,502
Community Development Block Grant B-03..MC-48,-OO36 14.218 58A50
Crimm_unity -Development Block Grarit . . B-04-MC-48~OO36 '14.218 223,447 12~O80
Community Development Block Grant B-05-MC-48-0036 14.218 486,527 1.46,552
C~n1munity ,r;>eyelopment ~loCk Grant -B-06~MC~48..0036: .-14;218. 38.570
Home Investment Partnership M-99-MC-48-0223 14.239 213
Home Investment Partnership M-OO-MC-48-0223 . 14.239 , 5,112
Home In'vesnnent Partnership M.;(j] -MC-48;.0223 14.239 ] 2,090
Home Investment Partnership M-02-MC-48-0223 14.239 38.023
Home Invest,ment: Partners~ip ., M-03~MC-48..0223 14;239 49,351 :
Home ,Investment Partnership M-Q4-MC-48-0223 14.239 68,088 27,996
Home Investment Partnership M-05-MC-48-0223 14.239 477~324 105.015
Supporti ve. Housing _ Program TX01831000f 14.235 48,085 48~085
Neighborhood Initiative B-04-NJ- TX-0038 14.246 102,915
Tota] birect'Funding U.S. :Department'of
Housing Urban. Development 1.756,981 339,728
Passed-through Texas Department of ,Housing and Community :Affairs:
Emergency Shelter Grants 425117 } 4.231 143.144 137,404
Emergency Shelter Gr,ants '426J17. . . 14:231 -246-
Tot.al U.S. Department of Housing and Urban Development 1,900;371. 477,132
Federal Environmental PrOtection. Agency:
Water Quality Grant CP - 83207101-0 66.436 19,302
Hickorj Cre~k Basin CWA Sectio'n 319 Grant ,- CP,,,,:,: 9961 464 l-O 66A60 . 54;530'
Total Fe~eral Environmental Protective Agency, 73;832
, U.S. 'Department- of Homeland Security::
Fire Pr~vention Grant BMW-2004-FG-14068 97.044 67,760,
Total' Direct Funding U.S. Department of Homeland Security 67 )60
, Passed,through State Departnlent'of Public Safety Governor's
Division of Eniergency -M-anagemeni: ' - - - -
Emergency Management Performance Grunt 06TX-EMPG-034 97.042 66,223,
.2003 U.rban.Area Security,]iiitiative (UASI) Pan II. ' 2003~EU.T3-0043 - - 97.0.08 5t ;854'
2.004 State, Homeland S~urity LETPJ:> 2.oQ4-GE- T4-00 15 97.004 8, 125
2004 State Homeland.Security Program,(SHSP). . 2004~GE-T4-0015 97 :004 I ,71.0
20.04 Urban. Area - Security Initiative (U ASI) - ' - .2004 U ASI '...; i 9972 97.008 430.000
2005 Urban Ar~a Security Initiative (VAS'I) 2005-GE-T5-4025 _ 97..067 293,227.
Public Assistance Grants' . 3216-EM-TX . .97.036 . 11 i ;721-
Total U.S. Department of Homeland Security 1,,030.;626
-U.S~ Department of Justice:
Local Law Enforcement Block Grant 2003..LBBX-2362 16.592 15.387
COPS in Schools Grant' 2002~SHWX-'OI-64 ' i 6j](j . -4i ;76i
Bryne Justice Assistance Grant 2.o05-DJBX-0605 16.580 2 J ,638
_' Toial U~S. Department ofJustice' . 78,187
U.S. Department of Agriculture: .. . . . _ _ . __
Passed -ihrough -Texas Department- of Health 'and Human- Services:
Summer Food Services Grant 061-1002 10.559 69,371
,:Total U~S. D:epartmeilt of Agriculture ' 69.371
U.S. Deparunent of Transportation: _
Federal Transportation Grant TX-90":X659 - 2.0.507 .216,756
TOlal. Di reet Funding_ U.S. Departrpent of Transportation .216,756
Passed-through State Department of Transportatio-n:
,Cofl1prehens~v~ STEP 586XXF60.19, 2.0.600. 99.458..
ClOT STEP 586XXF6140 20..600 6.'368
Total-U,S. Depanment of Transportation ,322,582'
. . - . . ,
Total expenditures of fede'ral awards $ 3,475,569 477,132
See accompanying notes to schedules of expenditures of federal and state aw_ards.
,5
CITY OF DENTON, TEXAS
. ,
Schedule- of -Expenditures of:State A-wards.
- Year ended. September 39, 2006"
. . Federal grantor/paSs-through grantorlPrOgram title '
State award~:
,Office of the Governor -- Crimin:al Justice Division:
Tobacco Compliance
Total Office of Governor
Texas State: Libraryaild Archives Commission:
Loan Star Library Grant
Total 'Texas State'Library and Archives Commission
-North Central- Texas_ C~uncilof Government (NCTCOG):-
Home Chemical Collection Center
Total 'NCTCOG,
Grant
. '1.D.- number
SB55 $
442-06'13,]
06-04-017
M618DNTON .,
1,83XXH7002
5J418F1788
515 '18F7095
582-5-70824
$
Texas Department of Transportation:
A irportMai ntenance- Grant
Installing of Tr:affic Signal ,Equipment .
State Transportation Grant'
State Transportation Grant
Total Texas -Department of Transportation
Texas Commission of Enyironmental Q~a1ity:,
Hickory Creek Basin CW A Section 319 Grant
Total te(Cas 'Commission of Environmental Quality
Total ,~xpenditure~ o~ state awards
, : See .accompanying 'notes' to schedules Qf expendi lutes of federal' and state awards.
6
Expenditures
4,940,
4,940
16, I 08
-16,108
6] ,068
61,068-
29,890
30,53 ]
52,] 28-
54,400
.: 166,949
40,000
40,000
289,065 :
. Passed-through
to
subrecipientS . .
5'2,12'8
54,400
10:6,52'8
_]06,528 _
CITY OF DENTON, TEXAS
. ,
Notes to .Schedule of Expenditures. of Federal and State'.Awards
Year ended September 30, 2006
(1). General
The accompanying .sch~dules of expenditures. of f~deral .~~d state, -awards- _presents the ,activi.ty Qf all,--
applicable federal and' st~te awards of the_City of Denton, Texas (the City). Th~ City's r~porting entity is
defined - in note 1 'to the - City's -basic' financial s.tatements'.' Federal and 'state awards -received. directly: from
federal and. state agenci.e~ (ls well. a.s federal_ :and state awards, :pass~d, tl)rougl1_ o~her gove_mment agencies, "
are included' on the respective schedule. . . ..
(2) Basis of Accounting
,. . ,- -..". ,.
,. . ., .
. ,
The accompanying schedules of expenditures of federal an"- state awards is presented. using 'the modified .
. accrual basis. of accounting, which -is described in note 1. to the' City.' s, basic financial- statementS..
(3) 'Schedule'of.Findings,and 'Questioned-Costs
. .
'The'Schedule': of' findings' and questioned 'costs, : including the -summary: of auditors' -results .for federal
awards is,included:beginning on page 8.
(4) .. .Relationsh~:p. to Federal Fin~ncial R~ports-
,Grant .expenditures repo~s as,of September- 30,-200.6,which.h.ave .been, submitted to grantor agencies .~ill, ,
in some cases, dif~er slightl.y from a~ounts disclosed herein. The reports prepared for grantor agencies are
typically- prepared at a later date and often - reflect - refined -estimates - of the. year-end' accruals. :The reports
will agre~:at termination of the grantas the discr~pan~ies. ~ote_~,are. timing difference.s. .
7
CITY OF DENTON, TEXAS,
Schedule of Findings and Questioned Costs
Year ended September 30, ~OO6
(1) 'Summary-of Auditors' Resul~..
Financial Statements
'Typ~.of AuditQr'.s rep()rt -issu'ed::- Uriqual:ified. .
Internal control over financial reporting:.
· Material weaknesses 'identified: No
-.-Reportable 'conditions identified- that are not consi'dered' to. be.material weaknesses: None reported.
. . .
Noncompliance'inaterial to-financial statements noted: No:
Federal Awards
, .
Int.emal control over major programs:
· Material weakness~s iqen~ifjed; . NO'.
· Reportable conditions identified:that are ~ot consi.dered.to pe.materi_al_weakn_esses:_ N.Q
. . Type ,of auditor'.s -~epo~ issued o~ - compliance -for major- programs: .U~quali~,~d
.Any . audit , findings_ disclosed-- that are -req~ired-to _be _reported in:accordarice. ~ith, 'Section 510(a)- of-:OMB.
-Circular A133: No
. Id~ntifi~ati~n of m.ajorprograms:
Program .
.CFDA
nuniber
CDBG
l~OME
"Homelarid Security Cluster:
State Homeland ,Security ,Grant Program
Emergency Management Performance Grant
2005 Urban Area: Security Initiative-
.Vrb.at;l-:Area-S~curi.ty ,Cluster (Prior to 2005) .
14~2l8 .
. 14.2-39
':97~OO4
97~042
97.067
-97.008. .,
Dollar threshold use~ to disti~guish between Ty:pe A an~. Type ~ ,program~: $300,000.
A.uditee qualified a~ ,a low-risk aUQite~: No
.. . .
-8
_(C9ntioQed)
-1 .
,CITY OF DENTON, TEXAS
Schedule of-Findings and Questioned Costs
Year ended Sept~mber 30, 2006
(2) ,Findin'gs' R~lating to_ t~e Financial- Statements ~,ep,ortec;l ~~ .Ac~ordance ,with Govern_ment A_uditing
Standards: -
'None
(3) Findings and 'Qu~stioned ~osts Re'ating to _Federal_Awards:
None
9
-
. KPMG- LLP .
Suite 3100
717 North, Harwood Street
. .
Dallas, TX 75201-6585
February 2, 2007,
Audit Committee
"City. of penton, TexaS
Ladies and Gentlemen:
We have. audited. th~ fin~ncial- state,ments . .of _City _of. _Den~on,: Texas. (t~e <;:ity),. :.fo~ the :year ended.,
September 30, 2006, and have issued our report thereon 'dated February 2, 2007.. In planning and
. performin,g, our audit of the- financial- statements. .of- the City-, -we c-onsidered intenial c.ontrol, in order. to
~etermine, ou.r :auditing :procedures for the purpose of ,expr~ssiJ;lg. OQ.,f opinion on th~ financi~. stateI:I1ents.
, An . audit' does not include examining, the effectiveness of .internal control and does not provide assurance
on. iilternal- control. 'We .have. not .considere4 ,internal :control since the date. of our report.
. -, -- -. , ,. ,- -- -. ,. .-
During our 'aiJ-dit, 'we 'noted certain -matter.s invo]viilg.intemal control and. other operational ,matters that are
"prese~ted. ,for. y()ur consideration~The.se ,.c~~,e~ts and reconune~datio.ns". .~)] ,of ,whi,ch have b,ee~
discussed with the appropriate members of'maoagerilent, are intended-to impro've internal control or result
in other operating.effic-iencies,and are summarized: as -follows:
Journal Entry Approval'
Observation
- - It. wa's noted iil 5. of -30 jourrial entries- selected' for testing there .was- no secondary -approval. as -required -by
City, policy. .The lack, of proper approy~l could lead to, improp~r j~~ma~ .e~~ies "eing :posted in' the. sys~em
thus generating incorrect financial information.
Recommendation
We recomine_nd the.City reemphasize. its policy that all manual journal eritri~s require secondary approval.
Ma1!-agement's Respon~e
, .
Manage~~nt. ~as implemented _this_ recomrnendation~ In ~anuary 2007, a communic.ation .was sen~ to. all
"staff initiating journal entries, emphasizing their responsibility to insure all journal entries are : reviewed
and approved ,by their respecti ve- supervis-o~s. This' emaiI .also ,brought to the: -attention of. superVi~ors: their
responsibility to approve journal entries.
KPMG LLp, a u.s. limited lJabillty partnership, is the U.S.
member - firm of KPMG International,_ a Swiss. cooperative. '
IJIIJ
Audit Connnittee
" City- of Denton, :Texas
Februal)' , 2" : 2,007
Page 2
Lo-gical Security.
Observatio'n
. ..,
.- ..,
-- . ,. ., . ... . . . .
. . .
.. . ..
.the 'control testing in the 'IT environment identified' some issues that management should apply focus to
__ -improv~ t.he con~ols for ~ogical security. . .
. . ., .. " ,. -, '" -
'. "The~e' is: no formal ,review process- to -inspect the' users 'on .the Novell network and the JD' Edwards
and H~is applicati,O~s. Th~se syst~Dls _provid~- access ~o financi~I. qata. fOf tbe- City- of Dent.on.._
· . "The passworQ ,restrictions- for. the :environment. are li~te4 and ,notconsist~n~:'for. all- applications.. .
. The.Novell network passwords require a minimum password length of five characters and changes.
in. passwot;"ds. every: 180 days-. - JDE inherits the: ,Saine 'password. settings (single sign'-on); however, the
- Harris application is configure.d, t9 have a ,minimum length _of 4 a~d ,no age on, the passwords..,
· Terminated employees ,are active on the Novell. System., It .was. _noted 21 <?f 261. t~r~natect
.empibyees:- .from 2006 had:- active user IDs :in NavelI'. 'The :Novell ID provides access to the
:application.s -(particularly JDEwith:single:sign-:-on)~. ., ." --
· ,D_ser ,acces,s Jorms d.id _D'ot consistently -have the proper -approval. Five of the- forms- tested .did 'not
,~ave the,.docutr1e~ted appr9val. ,Approvalisrequired..prior to access, to. the Ir systems._ It w~snoted
that the .users _were authorized'; howevet" the documentation was not readily available,.
- Recommendation
To address, the items noted'above, we,recommerid management consider the following:
. , -
.. ..
. .. .- -. ,. . " -.
· Implement a for~al revie"Y proc~ss to id~nt~fy users ,~nd their_ access rights o~ :the systems, at .least
-annually, and, inspect the' u.sers. for accuracy - in access
".- .Strengthen:-the' password controls for all-key. systems and 'document.a consistent-password policy fof'
the IT -environment
· Evaluate the ,pr<?ces~ for notifying IT_ _of _termi~ate.d ,.employe.es to' ,en,sure that_ -notifica:tions 'ar~
provided'timely from H-R or the appropria~e ~anag~rs.,and the ~ccess is disabled"
-. Retain copies- of all-completed access'request forms. along with the appropriate authorizations for a
sp:ecified period -of time
Management's.Response
-W.ben software is 'upgraded, the -listirigs 'of:users and- associated 'acces's .are -distributed to'the appropriate-
department to validate, access. The pro_cedure will be upgraded :to:' require, the. .department ,Dir~ctots_ to.
-review and, confirm. this listing for - their respective departments on an' annual basis and to- document ,this
appro-va~. Periodically ~ a separate :exaniination will' -be' performed. to' 'validate' . the- users for accuracy' in:-
access,.. The, password ,policy has:, be~n. written and, will _he :applied consist~.~tly ror. all appIicati OI1S. - Staff ,
will'contiilue to utilize the 'existing physical system access controls to augment the logical con~ols..
--
AUQit Committee
,- City 'of Denton, Texas
Febl1l:ary_ 2,- 2007 .
Page 3
,. .. --
. -. ,.
,. . .. .
,. ,. ... .. .
, ,
. , .
The termination report process will be changed to distribute one report to User Support and one to the
" Chief- Tee-hnol ogy Officer.. Additionally, the' establishment 'of One Day - Stop will' transfer systenl-access' to
t~e, ~R depattmeQt, thereby allowing, t~em to' check and-suspepd:- system_ acc~ss: as- emp,loyment .statu~
changes within the, HR Informatio'n Management system. Copies of access request forms ~e kept in an
,. electronic- format, via e~mail,.they will be printed outand retain.ed. in- a hard-copy book.' " .
Change .Maria'gement - Policy
: ,Observation
., " .
. ,. ..- . .
It was. noted that t~e' chang.e management. policies, and- procedures are. not documented - to indicate .the'
controls.~~.d pro~ess fo~ a~thorizin_g, -docufi1enting, testing,_ approving:_and imp~ementing- changes -into the,
IT environments.. The City follows a proc~ss howeyer, it is 110t documented..
Turnover in employees, emergency fixes, or changes in key applications may require the City to decide
..how a change. should be addressed. 'Without' refere'ilce, a change may not recei've the proper approvals,
testing- or ,documentati9D as ~xpected :by man a ge:ment., :An i,mproperly. handled. charig~, could adversely"
-affect the production o.perating environment and financial results.
Recommendation
, . . ,- - . . . .
. . . . .
. . . .
. .. . .
, .
' -
We recommel)d that management fo~rna11y document change ma}Jagement. policies _~nd ,procedu~es.
Management's: Response
Change management procedure will he documel?ted.
OUf - audit procedures :are d~signed primarily _to- e-nable. us' to form: an opinion: - on the. financial. statements,
and t.herefore may not bring- to light all weakn~sses in p~licies or pr<?c.edures t~at may exist. We aim,
:however;' to 'use our-knowledge of the City's organiz:ation gaihed-duririg.o'ur work to make comments and:'
s~ggestions th,at- we_hop_e- will be useful ~o you.
We, would be pleased. to discuss' these- coinments and reconlmendati ons :with YOU: ,at .an.y - time. .
*'*,****-*.
This report is intended solely for'the information arid' use -of the audit conunittee, Mayor and City's
management, : and federal and st3:te awarding _ agencies and . is- not intende.d to' be and should- not be, used by
anyone other than these specified parties.
Very truly yours,
KPIt4..G LL-P
AGENDA INFORMATION SHEET
AGENDA DATE:
March 6, 2007
DEPARTMENT:
Economic Development
CM:
George C. Campbell ~
SUBJECT
Receive a report, hold a discussion and give staff direction regarding a Downtown Incentive
Reimbursement Grant Program.
BACKGROUND
At the October 11, 2006, meeting of the Downtown Task Force (DTTF), members discussed
creating an incentive program to promote desired development/redevelopment in Downtown.
The discussion included developing two programs: one associated with funds generated from a
Tax Increment Financing (TIF) District and a second program associated with funds allocated by
the Denton City Council, otherwise known as the Downtown Incentive Reimbursement Grant
Program.
TIF revenues may be used for project costs that could include the acquisition, construction or
improvement to enhance or develop new and existing pubic buildings and other public
improvements, such as water and sewer facilities, flood and drainage facilities, and streets and
street lights. Recommended boundary lines have been defined for the TIF District, and financing
and project plans must be developed. Staff will return to City Council later this year with the
proposed boundary and financing and project plans so that a TIF can be established in calendar
year 2007.
The attached draft Downtown Incentive Reimbursement Grant Program would address a variety
of special issues associated with projects located in historic Downtown Denton. Staff presented
a draft of the program at the December 13,2006, meeting of the Downtown Task Force. At that
meeting, revisions to the draft were suggested that included raising the minimum grant amount
from $40,000 to $50,000.
At the February 14,2007 meeting of the DTTF, the group unanimously recommended the policy
by a vote of 7-0. The DTTF also recommended that Council fund the program by allocating
$250,000 in the first year, with subsequent years' allocation being adequate to ensure a minimum
of $250,000 in the incentive policy account at the beginning of each fiscal year.
Staff researched incentive policies from several Texas cities - Georgetown, Waco, Lewisville,
Fort Worth, Dallas, Houston and Bryan-College Station. The draft policy is very similar to
Georgetown's policy. Key elements of the draft policy are:
. Grant funds are a 50:50 match and are reimbursed upon receiving proof of expenditure
and completion of work.
- 1 -
. Certain redevelopment activities are eligible for grant funds.
o Fa<;ade Rehabilitation
o New Awnings and Signs
o Impact Fee Reimbursement
o Utility Upgrades
. An applicant is defined as an eligible property within the Downtown Central Business
District. A single owner of multiple properties may apply for grant funds for each
property but may not receive more than $50,000 per property.
. Projects would be considered based on:
o Compliance with current building standards
o Perceived need for proposed renovations and historical accuracy
o Design quality
o Compatibility of design in relation to other buildings
o Project compatibility with streetscape objectives
o Project compatibility in relation to Downtown Development goals
o Proximity to Courthouse-on-the-Square
. A process for project review, recommendation and approval are defined.
o City staff review
o Downtown Task Force review and recommendation
o Economic Development Partnership Board review and recommendation
o City Council review and approval
FISCAL IMPACT
Adoption of this policy would require funding consideration each year during the budget process.
If funded at the recommended level, the first year would require $250,000 and subsequent years
would replenish the fund level back to the original $250,000. The DTTF recommended this
amount based on the assumption that five projects could be funded at the maximum level.
Actual funding would be determined with the adoption of the annual budget.
PRIOR ACTION
The Economic Development Partnership Board reviewed the draft policy and recommended it be
forwarded to the City Council for consideration (5-0).
EXHIBITS
Draft Downtown Incentive Reimbursement Grant Program
Respectfully submitted:
Linda Ratliff, Director
Economic Development Department
- 2 -
!>. ~ .?/.~-;. . .~... u.. ~ ~
f '<1 ~ %~ ~-. \ I ~ w .~
~ .{o'.." ~
..
DOWNTOWN INCENTIVE REIMBURSEMENT GRANT PROGRAM
Application Instructions
If you have any application questions, please contact the Downtown Development office at 940-349-
7731. If you have any building or sign permit/historic preservation questions, please contact the
Historic Preservation Officer at 940-349-7732.
The City of Denton Downtown Development Department works to revitalize and enhance the unique
character of Downtown through historic preservation and community involvement, while at the same time
promoting Downtown, providing educational and technical assistance to business and property owners,
and maintaining the beauty of Denton. As an economic incentive, the City of Denton Downtown
Development Department has designed the following incentive reimbursement grant program.
PROGRAM DETAILS (please read carefullv):
The Downtown Incentive Reimbursement Grant Program is set up as a single payment
reimbursement to property owners per building/business, and in some situations, tenants.
Reimbursement grants are available for the following types of projects:
. Fa~ade Rehabilitation
a. Definition: Removing slipcovers or non-historic/added facades, repointing brick or
replacing mortar joints, replacing or restoring cornices, removing paint from brick,
replacing windows, restoring transom windows, roof and foundation work.
b. Limits:
1. 50/50% matching basis with a cap of $50,000 per grant ($100,000+ total project
cost) for fa9ade, roof and foundation work. Roof and foundation repair may
constitute no more than 50% of minimum threshold amount and shall only be
considered for funding if included as a portion of a larger project.
11. 50/50% matching basis with a cap of $5,000 per grant ($10,000+ total project
cost) for paint-only grants
. N ew Awnings & Signs
a. Definition: Replacing, adding or repaIrIng awnings & signs. Signs may include
signboards, projecting signs and pedestrian signage (includes window sign, hanging sign
and awning/canopy sign).
b. Limits:
1. 50/50% matching basis with a cap of $5,000 per grant ($10,000+ total project
cost) for awning work
11. 50/50% matching basis with a cap of $500 per grant ($1000+ total project cost)
for signage
1 of 11
DRAFT
S:\Incentive Program\Downtown Incentive Grant Program Application.doc
!>. ~ .?/.~-;. . .~... u.. ~ ~
f '<1 ~ %~ ~-. \ I ~ w .~
~ .{o'.." ~
..
PROGRAM DETAILS (continued)
. Impact Fee Reimbursement
a. Definition: Reimbursement for City of Denton water and wastewater impact fees
b. Limits:
1. 50/50% matching basis with a cap of $50,000 per grant ($100,000+ total project
cost))
. Utility Upgrades
a. Definition: Upgrades to water, wastewater and electrical serVIce, includes interior
upgrades as well as exterior service upgrades
b. Limits:
1. 50/50% matching basis with a cap of $50,000 per grant ($100,000+ total project
cost)
GRANT GUIDELINES (olease read carefullv):
1. Fa<;ade rehabilitation grant funds are available for exterior work on building facades that immediately
overlook public streets located in the Main Street Area as defined in the Downtown Master Plan (see
attached map), as well as roof and foundation work on commercial buildings in that district.
2. Grants are on a first-come, first-served basis until Council-allocated funds are depleted, or until the
program ends, whichever comes first.
3. No grants will be awarded for work that has already been completed or for work that is covered by
insurance. Incentive grant applications must be submitted before requests for building permits.
4. All grants will be awarded on a reimbursement basis once completed work has been verified by City
staff as compliant with the plans proposed in the approved application. Any deviation from the
approved grant project may result in the total or partial withdrawal of the grant.
5. All submitted work will be reviewed based on the Secretary of the Interior's Standards for
Rehabilitation (see page 8) and the City of Denton Property Appearance Guidelines (available from
the Downtown Development office). The Denton Downtown Task Force (DTTF) and the Economic
Development Partnership Board (EDPB) will review submitted work and make a recommendation to
the Denton City Council. Approval from the City Council must be obtained before any eligible work
may begin.
6. Grant applications and awards can be made in any of the reimbursable activities listed above and may
be combined for any single property or project. However" the maximum award amount available
annuallv uer auulicant is $50,,000.
2 of 11
DRAFT
S:\Incentive Program\Downtown Incentive Grant Program Application.doc
!>. ~ .?/.~-;. . .~... u.. ~ ~
f '<1 ~ %~ ~-. \ I ~ w .~
~ .{o'.." ~
..
7. An applicant is defined as an eligible property within the Denton Central Business District. A single
owner of multiple properties may apply for grant funds for each property owned but may not receive
more than $50,000 per property.
8. Projects will be reviewed with the following considerations in mind:
. project compliance with all current building standards,
. perceived need for proposed renovations to building, historical accuracy of proposed renovations,
. design quality of the proposed renovations,
. compatibility of design in relation to other buildings,
. project compatibility with streetscape objectives,
. project compatibility in relation to downtown development goals at time of application,
. proximity to Courthouse-on-the-Square.
3 of 11
DRAFT
S:\Incentive Program\Downtown Incentive Grant Program Application.doc
!>. ~ .?/.~-;. . .~... u.. ~ ~
f '<1 ~ %~ ~-. \ I ~ w .~
~ .{o'.." ~
..
GRANT ApPLICATION PROCESS
1. Determine eligibility: Discuss project plans with Downtown Project Coordinator and set up an
appointment for free assistance in selecting paint, fabrics, color schemes and sign materials for
building fa9ade and signs through the Texas Main Street Center's Architectural Assistance Program.
The Property Appearance Guidelines should be a reference guide when making any design
improvements to properties in the Central Business District. The Property Appearance Guidelines are
available from the Downtown Development office at 215 E. McKinney, Denton, TX 76201.
2. Fill out incentive reimbursement grant application form and sign the agreement form. All grant
applications must include a scale drawing by the Texas Main Street Architect, the project architect or
contractor of all the proposed grant work to be done. Color samples of all final paint selections
and/or final fabric or sign material selections must be included with the application to be
reviewed by the Downtown Task Force (DTTF), the Economic Development Partnership Board
(EDPB) and approved / rejected by the Denton City Council. Obtain itemized written work
estimates on all project work from contractors or project architects. Self-contracted work will be
reimbursed for actual legitimate expenses, excluding labor.
3. Return the completed application form with all original itemized work estimates, color samples,
drawings and example sign material of the proposed work to the Downtown Development office at
215 E. McKinney no later than 5 p.m. the Monday prior to the 1 st Wednesday of each month.
4. The approval process will include without limitation the following:
(a) All projects must meet current building standards and codes, as well as building permit
requirements.
(b) The DTTF meets the 2nd Wednesday of each month at 9:00 AM and all applicants are required
to attend and present their grant reimbursement project to the DTTF for review and
recommendation to the EDPB.
(c) The EDPB meets the 3rd Monday of each month at 11 :30 AM and will review submitted
applications along with the DTTF's recommendation. The EDPB will then make a
recommendation to the Denton City Council for the project's approval/rejection.
(d) The Denton City Council has the final discretion with regard to funding and reserves the
right to modify or reject any project or elements of any project.
(e) The Denton City Council will receive recommendations from the DTTF and EDPB. The DTTF
and EDPB recommendations shall be advisory only and no recommendation shall be binding on
the Denton City Council.
(f) The Denton City Council shall consider only Applications which have been properly and fully
completed and which contain all information required in the Application or requested by any
committee, board or the Denton City Council.
(g) All construction bids submitted by an Applicant must be current and must be dated no earlier than
ninety (90) days prior to the Application request. Bids shall be submitted on the contractor's or
project architect's letterhead and shall contain the contractor' name, address, telephone number
4 of 11
DRAFT
S:\Incentive Program\Downtown Incentive Grant Program Application.doc
!>. ~ .?/.~-;. . .~... u.. ~ ~
f '<1 ~ %~ ~-. \ I ~ w .~
~ .{o'.." ~
..
and shall itemize the bid in a manner that allows the DTTF, EDPB and Denton City Council to
determine the bid components and authenticity of the bid.
(h) An Applicant who submits an Application that was denied a grant by the Denton City Council
shall not be eligible to re-submit a grant application for six (6) months from the date the prior
Application was declined by the Denton City Council.
(i) Applicants receiving approval by the Denton City Council shall commence construction
described within the Application within ninety (90) days from the date the grant is awarded by the
Denton City Council. All Applicants must complete the construction described in the Application
within one (1) year from the date the grant is approved by the Denton City Council. If the
Applicant is unable to commence construction within ninety (90) days from the date the grant is
approved or complete construction within one (1) year from the date the grant is approved, the
Applicant may submit a written request for an extension for the commencement date or
completion date provided the extension request is made prior to the ninety (90) day or one (1)
year time limit. The Denton City Council shall not be obligated to allow extensions but may do
so for good cause determined solely by the Denton City Council. The extensions, if granted, shall
be for the term and for the conditions determined exclusively by the Denton City Council. An
extension denial cannot be appealed and shall be final with the Denton City Council.
(j) As a condition of this grant Application, the Applicant consents and shall allow the Downtown
Development staff to request City inspections to determine that the grant, if awarded, will not be
used for construction on any building that is not in compliance with the City Municipal Codes
and Ordinances that are applicable to the construction contemplated in the application.
(k) The Denton City Council shall have sole discretion in awarding grants. The Denton City Council
shall award grants considering the grant amount requested, grant funds available, the guidelines
of the grant program, condition of the building in which the grant funds will be used, economic
impact, other grant requests, the type and nature of the construction, and the proposed
construction results considering the grant program..
(1) No Applicant has a proprietary right to receive grant funds. The Denton City Council shall
consider any Application within its discretionary authority to determine what grant amount would
be in the best interest of the Grant program. The review criteria may include, but shall not be
limited to, project compliance with all current building standards, perceived need for proposed
renovations to building, historical accuracy of proposed renovations, design quality of the
proposed renovations, the compatibility of design in relation to other buildings, project
compatibility with streetscape objectives and project compatibility in relation to downtown
development goals at time of application.
(m) The Applicant shall be required to furnish photographs of the building's exterior, roof and
foundation as part of the Application request and shall provide photographs after the construction
is completed, as a condition of final grant reimbursement.
(n) The Applicant is required to obtain all applicable City permits and City approvals required for the
construction if a grant is awarded.
5 of 11
DRAFT
S:\Incentive Program\Downtown Incentive Grant Program Application.doc
!>. ~ .?/.~-;. . .~... u.. ~ ~
f '<1 ~ %~ ~-. \ I ~ w .~
~ .{o'.." ~
..
(0) No Applicant, nor Applicant agent, representative or tenant shall be entitled to receive grant
approval on the same property if requested within three (3) years from the date a previous grant
was awarded by the Denton City Council.
(P) An Applicant must attend DTTF, EDPB and Denton City Council meetings which consider the
Application. Failure to attend a meeting when required shall be cause for rejection of the
Application.
5. Reimbursement: When the entire grant project has been satisfactorily completed and reviewed,
the applicant shall present the Downtown Development office with copies of all paid invoices,
including copies of cancelled checks and/or credit card receipts, for a single payment
reimbursement of the approved funding.
6 of 11
DRAFT
S:\Incentive Program\Downtown Incentive Grant Program Application.doc
!>. ~ .?/.~-;. . .~... u.. ~ ~
f '<1 ~ %~ ~-. \ I ~ w .~
~ .{o'.." ~
..
REHABILITATION TIPS
. Roof, foundation and structural items should be given priority over cosmetic improvements.
. Carefully examine old buildings for termites, wood rot and general deterioration.
. When repairing a building, do not cut expenses on the roof or the foundation.
. Be aware of areas on the roof and at connecting walls where water does not readily drain. Flashing
should be installed at intersections to prevent leakage.
. Carefully locate air conditioning units to avoid water condensations on the sides of buildings.
Condensing units should be supported from the masonry walls and not placed directly on the roof.
. The top brick cornices that project above the roof deteriorate rapidly unless they are capped with
metal, terra cotta, stone or concrete.
. When mortar is missing or in poor repair, moisture will enter the walls and eventually may cause
structural damage. Deteriorated mortar should be removed to a depth of at least three-fourths of an
inch and replaced with new mortar that matches the old in color, texture and striking of the joint.
. Do not sandblast. Chemicals and/or water can remove dirt and paint without damaging the surface of
the building.
. Do not paint too often; many times a building only needs mild washing.
. If the building has stone or brick that has never been painted, do not create a maintenance problem by
painting it.
. Existing architectural details, including old wood doors, windows, ceilings, and trim work add to the
character of a building and its resale value. Repair these features rather than remove them.
. Wood windows are reasonable to repair, if a specialist in window repair can be found. If the
windows are missing, custom-made windows can be ordered for replacement in old buildings.
. Pressed metal ceiling panels are still being manufactured today with some of the same patterns
installed originally. Deteriorated panels, therefore, can be replaced exactly.
. Do not use aluminum siding. It can hide water penetration into the walls and accelerate deterioration.
. Before rehabilitating a building fa9ade, take a careful look at the structural aspects of the building.
Develop a design that is compatible with neighboring buildings.
. Retain a sense of continuity by carrying exterior building design inside the structure.
. Demand quality.
7 of 11
DRAFT
S:\Incentive Program\Downtown Incentive Grant Program Application.doc
!>. ~ .?/.~-;. . .~... u.. ~ ~
f '<1 ~ %~ ~-. \ I ~ w .~
~ .{o'.." ~
..
SECRETARY OF INTERIOR'S
STANDARDS FOR REHABILITATION
All Downtown Incentive Reimbursement Grant applications will be reviewed by the DTTF and EDPB and
approved by the Denton City Council for design appropriateness. The DTTF, EDPB and Denton City
Council will maintain an awareness of the Standards of Rehabilitation as follows:
1. Every reasonable effort shall be made to provide a compatible use for a property which requires
minimal alteration of the building, structure or site and its environment, or to use a property for
its original intended purpose.
2. The distinguishing original qualities or character of a building, structure, or site and its
environment shall not be destroyed. The removal or alteration of any historic material or
distinctive architectural features will disqualify any building from this program.
3. All building, structures, and sites shall be recognized as products of their own time. Alterations
that have no historical basis and which seek to create an earlier appearance shall be discouraged
and may disqualify any building from this program.
4. Changes which may have taken place in the course of time are evidence of the history and
development of a building, structure, or site and its environment. These changes may have
acquired significance in their own right, and this significance may be recognized and respected.
5. Deteriorated architectural features shall be repaired rather than replaced, wherever possible. In
the event replacement is necessary, the new material should match the material being replaced in
composition, design, color, texture and other visual qualities.
6. The surface cleaning of structures shall be undertaken with the gentlest means possible.
Sandblasting and other cleaning methods that will change or damage the historic building
materials shall not be undertaken.
7. Contemporary design for alteration and additions to existing properties shall not be discouraged
when such alterations and additions do not destroy significant historical, architectural or cultural
materials, and such design is compatible with the size, scale, color, material, and character of the
property, neighborhood, or environment.
8. Whenever possible, new additions or alterations to structures shall be done in such a manner that
if such addition or alterations were to be removed in the future, the essential form and integrity of
the structure would be unimpaired. New additions should be compatible to the present structure.
8 of 11
DRAFT
S:\Incentive Program\Downtown Incentive Grant Program Application.doc
!>. ~ .?/.~-;. . .~... u.. ~ ~
f '<1 ~ %~ ~-. \ I ~ w .~
~ .{o'.." ~
DEADLINE:
Monday prior to
the 1st Wednesday
of each month
..
Date Received:
DOWNTOWN INCENTIVE REIMBURSEMENT GRANT
PROGRAM CHECKLIST
Use this form as a checklist to follow all steps needed to complete the Downtown Incentive Reimbursement
Grant Program application to receive approval.
o Meet with Downtown Project Coordinator to determine eligibility and to walk through Downtown
Incentive Reimbursement Grant and instructions, and to possibly set up appointment for free
assistance from the Texas Main Street Center's Architectural Assistance Program.
o Meet with the City's Historic Preservation Officer (940-349-7732) if any work may involve receiving
a building or sign permit or dealing with historic preservation issues.
o Complete the Downtown Incentive Reimbursement Grant application form and sign agreement form.
Include the following required attachments: scale drawing by the Texas Main Street Architect, the
project architect or contractor of all the proposed grant work to be done including signage renderings,
color samples of all final paint selections and/or final fabric or sign material selections, photographs
of building's exterior, roof and foundation.
o Return completed application and agreement form with required attachments no later than 5p.m. on
the Monday prior to the 1 st Wednesday of the month to the Downtown Project Coordinator to be
added to the next DTTF meeting agenda.
o Attend and present Downtown Incentive Reimbursement Grant application project to DTTF and
EDPB for their recommendation to the Denton City Council.
o Receive project recommendation of proposed work listed on grant application. Get signatures and
recommendation status of the chairs of the DTTF and EDPB on last page of application form.
o Return all paperwork to Downtown Project Coordinator to be scheduled for a future Denton City
Council meeting.
o Attend Denton City Council meeting where staff will present Downtown Incentive Reimbursement
Grant application project to the Denton City Council for their approval.
o If approved, Downtown Incentive Reimbursement Grant project construction may commence. Work
must commence within ninety (90) days of approval from Denton City Council and be completed
within one year.
o Upon completion of Downtown Incentive Reimbursement Grant project, furnish photographs of the
building's exterior, roof and foundation; copies of all paid invoices, including copies of cancelled
checks and/or credit card receipts, to receive a single payment reimbursement of the approved
funding.
9 of 11
DRAFT
S:\Incentive Program\Downtown Incentive Grant Program Application.doc
!>. ~ .?/.~-;. . .~... u.. ~ ~
f '<1 ~ %~ ~-. \ I ~ w .~
~ .{o'.." ~
..
DOWNTOWN INCENTIVE REIMBURSEMENT GRANT
PROGRAM ApPLICATION
Please return completed with necessary attachments and signature to Downtown Development office, 215 E.
McKinney no later than 5 p.m. on the Monday prior to the 1st Wednesday of each month. If you have any
application questions, please contact the Downtown Project Coordinator at 940-349-7731. If you have any
building or sign permit/historic preservation questions, please contact the Historic Preservation Officer at
940-349-7732.
. Applicant Name
. Business Name
Date
. Mailing Address
. Contact Phone
Email Address
. Building Owner (if different from applicant)
. Historical/Current Building Name
. Physical Building Address
. Type of Work: (check all that apply)
_ Fa<;ade Rehabilitation
_ Fa<;ade - Paint-only
_ Awnings
_ Utility Upgrade
_ Signage
_ Impact Fee
. Details of Planned Improvements for Downtown Incentive Reimbursement Grant:
(attach additional paper ifnecessary)
List Contractor/Project architect Proposals and Total Amounts (please attach original proposals):
1.
2.
. TOTAL COST OF PROPOSED PROJECT:
. AMOUNT OF GRANT REQUESTED (500/0 OF TOTAL COST ABOVE):
Attach with all required color samples ofpaint, awning/canopy, sign design, etc., as well as photographs of
building's exterior facade, roof and foundation.
Applicant's Signature
Date
10 of 11
DRAFT
S:\Incentive Program\Downtown Incentive Grant Program Application.doc
!>. ~ .?/.~-;. . .~... u.. ~ ~
f '<1 ~ %~ ~-. \ I ~ w .~
~ .{o'.." ~
..
DOWNTOWN INCENTIVE REIMBURSEMENT GRANT
AGREEMENT FORM
Please return completed with necessary attachments and signature to Downtown Development office, 215 E.
McKinney no later than 5 p.m. on the Monday prior to the 1st Wednesday of each month. If you have any
application questions, please contact the Downtown Project Coordinator at 940-349-7731. If you have any
building or sign permit/historic preservation questions, please contact the Historic Preservation Officer at
940-349-7732.
I have met with the Downtown Project Coordinator, and I fully understand the Downtown Incentive
Reimbursement Grant Procedures and Details established by the Denton City Council. I intend to use this
grant program for the aforementioned renovation projects to forward the efforts of revitalization and
historic preservation of Denton's historic downtown. I have not received, nor will I receive insurance
monies for this revitalization proj ect.
I have read the Downtown Incentive Reimbursement Grant Application Procedures including the
Downtown Incentive Reimbursement Grant Details.
I understand that if I am awarded a Downtown Incentive Reimbursement Grant by the Denton City
Council, any deviation from the approved project may result in the partial or total withdrawal of the
Downtown Incentive Reimbursement Grant. If I am awarded a reimbursement grant for fa9ade, awning
or sign work and the fa9ade, sign or awning is altered for any reason within one (1) year from
construction, I may be required to reimburse the City of Denton immediately for the full amount of the
Downtown Incentive Reimbursement Grant.
Business/Organization Name
Applicant's Signature
Printed Name
Date
Building Owner's Signature (if different from applicant)
Printed Name
Date
DTTF Signature (obtain signature at DTTF meeting) Recommendation
Date
EDPB Signature (obtain signature at EDPB meeting) Recommendation
Date
11 of 11
DRAFT
S:\Incentive Program\Downtown Incentive Grant Program Application.doc
AGENDA INFORMATION SHEET
AGENDA DATE:
March 6, 2007
DEP ARTMENT:
City Manager's Office
CM/DCM/ACM:
George C. Campbell, City Manager
SUBJECT:
Consider approval of an ordinance of the City of Denton authorizing an agreement between the
City of Denton, Texas and the Denton Parks Foundation to assist with preparation for the 2007
Cinco de Mayo celebration; providing for the expenditure of funds therefore; and providing for
an effective date.
BACKGROUND:
Mayor Perry McNeill has made a request for the expenditure of $250 to the Denton Parks
Foundation. Per the contract, the funds are to be used by the Denton Parks Foundation to help
with the preparation for the 2007 Cinco de Mayo celebration. Funds will be distributed with
appropriate receipts upon the approval of the ordinance by the City Council.
FISCAL INFORMATION
Funding for the contract will come from Mayor McNeill's contingency fund account.
Respectfully submitted:
tS" ~--~
L _. ,
_.J- I -
George C. Campbell
City Manager
Prepared by:
Linda Holley
Executive Assistant
S :\Our Documents\Ordinances\07\Cinco de Mayo Ordinance.doc
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING AN AGREEMENT BETWEEN
THE CITY OF DENTON, TEXAS AND DENTON PARKS FOUNDATION TO ASSIST WITH
PREPARATION FOR THE 2007 CINCO DE MAYO CELEBRATION; PROVIDING FOR THE
EXPENDITURE OF FUNDS; AND PROVIDING FOR AN EFFECTNE DATE~
WHEREAS, the Denton Parks Foundation, a Texas non-profit corporation, (the
"Organization") provides assistance to the Cinco de Mayo Committee for the cost of entertainment,
decorations, promotions, and! or children's activities for the Annual Cinco De Mayo Celebration (the
"Program"); and
WHEREAS, the Organization and the City of Denton desire to enter into an agreement to
provide for the continuance of the Program which agreement is substantially in the same form as the
agreement attached hereto and made a part hereofby reference (the "Agreement"); and
WHEREAS, the City Council of the City of Denton hereby fmds that the Agreement between
the City and the Organization attached hereto and made a part hereofby reference serve a municipal
and public purpose and the Agreement is in the public interest; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings set forth in the preamble of this ordinance are incorporated by
reference into the body of this ordinance as if fully set forth herein.
SECTION 2~ The City Manager, or his designee, is hereby authorized to execute the
Agreement and to carry out the duties and responsibilities of the City under the Public Service
Agreement, including the expenditure of funds as provided in the Public Agreement
SECTION 3~ This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the
day of
, 2007.
PERRY R. McNEILL, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
EDWIN M~ SNYDER, CITY ATTORNEY
BY:
Page 2
S :\Our Documen ts\Con tracts\01\Den ton Parks Foundation 2007.doc
SERVICE AGREEMENT
BETWEEN THE CITY OF DENTON, TEXAS AND
DENTON PARKS FOUNDATION
This Agreement is hereby entered into by and between the City of Denton, Texas, a Home Rule
Municipal Corporation, hereinafter referred to as "CityU, and Denton Parks Foundation, a Texas
Non-Profit Corporation, hereinafter referred to as "Denton Parks Foundation":
WHEREAS, City has determined that the proposal for services merits assistance and can
provide needed services to citizens of City and has provided funds in its budget for the purpose of
paying for contractual services; and
WHEREAS, this Agreement serves a valid municipal and public purpose and is in the public
in terest;
NOW, THEREFORE, the parties hereto mutually agree as follows:
I. SCOPE OF SERVICES
Denton Parks Foundation shall in a satisfactory and proper manner perform the following
tasks, for which the monies provided by City may be used:
The funds being provided shall be used by Denton Parks Foundation to assist with the costs of
entertainment, decorations, promotions and/or children's activities for the 2007 Cinco de Mayo
Celebration..
II~ OBLIGATIONS OF DENTON P ARKS FOUNDATION
In consideration of the receipt of funds from City, Denton Parks Foundation agrees to the
following terms and conditions:
A. Two Hundred Fifty Dollars and nollOO ($250.00) shall be paid to Denton Parks
Foundation by City to be utilized for the purposes set forth in Article I.
B~ Denton Parks Foundation will maintain adequate records to establish that the City funds
are used for the purposes authorized by this Agreement.
c. Denton Parks Foundation will permit authorized officials of City to review its books at
any time.
D. Upon request, Denton Parks Foundation will provide to City its By Laws and any of its
rules and regulations that may be relevant to this Agreement
E. Denton Parks Foundation will not enter into any contracts that would encumber City funds
for a period that would extend beyond the term of this Agreement.
F. Denton Parks Foundation will appoint a representative who will be available to meet with
City officials when requested~
G. Denton Parks Foundation will submit to City copies of year.end audited financial
statements.
III~ TIME OF PERFORMANCE
The services funded by City shall be undertaken and completed by Organization within the
following time frame:
The term of this Agreement shall commence on the effective date and terminate September 30,
2007, unless the contract is sooner terminated under Section VII nSuspension or Termination" .
N. PAYMENTS
A. PAYMENTS TO DENTON PARKS FOUNDATION. City shall pay to Denton Parks Foundation
the sum specified in Article II after the effective date of this Agreement.
B~ EXCESS PAYMENT~ Denton Parks Foundation shall refund to City within ten (10) working
days of City's request, any sum of money which has been paid by City and which City at any time
thereafter determines:
1) has resulted in overpayment to Denton Parks Foundation; or
2) has not been spent strictly in accordance with the terms of this Agreement; or
3) is not supported by adequate documentation to fully justify the expenditure.
v. EVALUATION
Denton Parks Foundation agrees to participate in an implementation and maintenance system
whereby the services can be continuously monitored. Denton Parks Foundation agrees to make
available its financial records for review by City at City's discretion. In addition, Denton Parks
Foundation agrees to provide City the following data and reports, or copies thereof:
A. All external or internal audits. Denton Parks Foundation shall submit a copy of the annual
independent audit to City within ten (10) days of receipt
B. All external or internal evaluation reports~
c~ An explanation of any major changes in program services.
D. To comply with this section, Denton Parks Foundation agrees to maintain records that will
provide accurate, current, separate, and complete disclosure of the status of funds received and the
Page 2 of7
services performed under this Agreement The record system of Denton Parks Foundation shall
contain sufficient documentation to provide in detail full support and justification for each
expenditure. Denton Parks Foundation agrees to retain all books, records, documents, reports, and
written accounting procedures pertaining to the services provided and expenditure of funds under
this Agreement for five years..
E. Nothing in the above subsections shall be construed to relieve Denton Parks Foundation of
responsibility for retaining accurate and current records that clearly reflect the level and benefit of
services provided under this Agreement~
VI~ DIRECTORS' MEETINGS
During the term of this Agreement, Denton Parks Foundation shall deliver to City copies of all
notices of meetings of its Board of Directors, setting forth the time and place thereof wherein this
program is a part of the subject matter of the meeting~ Such notice shall be delivered to City in a
timely manner to give adequate notice, and shall include an agenda and a brief description of the
matters to be discussed~ Denton Parks Foundation understands and agrees that City's representatives
shall be afforded access to all meetings of its Board ofDirectors~
Minutes of all meetings of Denton Parks Foundation' governing body shall be available to City
within ten (10) working days of approvaL
Vll. TERMINATION
The City may terminate this Agreement for cause if Denton Parks Foundation violates any
covenants, agreements, or guarantees of this Agreement, the Denton Parks Foundation's insolvency
or filing ofbankruptcy, dissolution, or receivership, or the Denton Parks Foundationt violation of any
law or regulation to which it is bound under the terms of this Agreement The City may terminate
this Agreement for other reasons not specifically enumerated in this paragraph.
Vill. EQUAL OPPORTUNITY AND COMPLIANCE WITH LAWS
A. Denton Parks Foundation shall comply with all applicable equal employment opportunity
and affirmative action laws or regu]ations~
B~ Denton Parks Foundation will furnish all information and reports requested by City, and
will permit access to its books, records, and accounts for purposes of investigation to ascertain
compliance with local, State and Federal rules and regulations~
c. In the event of non-compliance by Denton Parks Foundation with the non-discrimination
requirements, the Agreement may be canceled, terminated, or suspended in whole or in part, and
Denton Parks Foundation may be barred from further contracts with City.
Page 3 of7
IX. WARRANTIES
Denton Parks Foundation represents and warrants that:
A. All information, reports and data heretofore or hereafter requested by City and
furnished to City, are complete and accurate as of the date shown on the information, data, or report,
and, since that date, have not undergone any significant change without written notice to City.
B. Any supporting financial statements heretofore requested by City and furnished to
City, are complete, accurate and fairly reflect the financial conditions of Denton Parks Foundation on
the date shown on said report, and the results of the operation for the period covered by the report,
and that since said data, there has been no material change, adverse or othetwise, in the financial
condition of Denton Parks Foundation.
c. No litigation or legal proceedings are presently pending or threatened against Denton
Parks Foundation~
D. None of the provisions herein contravenes or is in conflict with the authority under
which Denton Parks Foundation is doing business or with the provisions of any existing indenture or
agreement of Denton Parks Foundation.
E. Denton Parks Foundation has the power to enter into this Agreement and accept
payments hereunder, and has taken all necessary action to authorize such acceptance under the terms
and conditions of this Agreement.
F . None of the assets of Denton Parks Foundation are subj ect to any lien or encumbrance
of any character, except for current taxes not delinquent, except as shown in the financial statements
furnished by Denton Parks Foundation to City.
Each of these representations and warranties shall be continuing and shall be deemed to
have been repeated by the submission of each request for payment.
x. CHANGES AND AMENDMENTS
A. Any alterations, additions, or deletions to the terms of this Agreement shall be by
written amendment executed by both parties, except when the terms of this Agreement expressly
provide that another method shall be used.
B. It is understood and agreed by the parties hereto that changes in the State, Federal or
local laws or regulations pursuant hereto may occur during the term of this Agreement. Any such
modifications are to be automatically incorporated into this Agreement without written amendment
hereto, and shall become a part of the Agreement on the effective date specified by the law or
regulation.
Page 4 of7
c. Denton Parks Foundation shall notify City of any changes in personnel or governing
board composition.
XI. INDEMNIFICATION
To the extent authorized by law, the Denton Parks Foundation agrees to indemnify, hold
harmless, and defend the CITY, its officers, agents, and employees from and against any and all claims
or suits for injuries, damage, loss, or liability of whatever kind or character, arising out of or in
connection with the performance by the Denton Parks Foundation or those services contemplated by
this Agreement, including all such claims or causes of action based upon common, constitutional or
statutory law, or based, in whole or in part, upon allegations of negligent or intentional acts of Denton
Parks Foundation, its officers, employees, agents, subcontractors, licensees and invitees.
Xll. CONFLICT OF INTEREST
A. Denton Parks Foundiltion covenants that neither it nor any member of its governing body
presently has any interest, direct or indirect, which would conflict in any manner or degree with the
performance of services required to be performed under this Agreement. Denton Parks Foundation
further covenants that in the performance of this Agreement, no person having such interest shall be
employed or appointed as a member of its governing body.
B. Denton Parks Foundation further covenants that no member of its governing body or its
staff, subcontractors or employees shall possess any interest in or use hislher position for a purpose
that is or gives the appearance of being motivated by desire for private gain for himself/herself, or
others; particularly those with which he/she has family, business, or other ties.
c. No officer, member, or employee of City and no member of its governing body who
exercises any function or responsibilities in the review or approval ofthe undertaking or carrying out
of this Agreement shall participate in any decision relating to the Agreement which affects his
personal interest or the interest in any corporation, partnership, or association in which he has direct
or indirect interest.
xm~ NOTICE
Any notice or other written instrument required or permitted to be delivered under the terms of
this Agreement shall be deemed to have been delivered, whether actually received or not, when
deposited in the United States mail, postage prepaid, registered or certified, return receipt requested,
or via hand-delivery or facsimile, addressed to Denton Parks Foundation or City, as the case may be,
at the following addresses:
Page 5 of7
CITY
DENTON PARKS FOUNDATION
City of Denton, Texas
Attn: City Manager
215 E. McKinney
Denton, TX 76201
Fax No. 940.349.8591
Terry Frushour, Treasurer
Denton Parks Foundation
321 E. McKinney
Denton, TX 76201
Fax No. 940.
Either party may change its mailing address by sending notice of change of address to the other
at the above address by certified mail, return receipt requested.
XN. MISCELLANEOUS
A. Denton Parks Foundation shall not transfer, pledge or otherwise assign this
Agreement or any interest therein, or any claim arising thereunder to any party or parties, bank, trust
company or other financial institution without the prior written approval of City.
B. If any provision ofthis Agreement is held to be invalid, illegal, or unenforceable, the
remaining provisions shall remain in full force and effect and continue to conform to the original
intent of both parties hereto.
C. In no event shall any payment to Denton Parks F oundation hereunder, or any other act
or failure of City to insist in anyone or more instances upon the terms and conditions of this
Agreement constitute or be construed in any way to be a waiver by City of any breach of covenant or
default which may then or subsequently be committed by Denton Parks Foundation. Neither shall
such payment, act, or omission in any manner impair or prejudice any right, power, privilege, or
remedy available to City to enforce its rights hereunder, which rights, powers, privileges, or remedies
are always specifically preserved. No representative or agent of City may waive the effect of this
provlsIon.
D. This Agreement, together with referenced exhibits and attachments, constitutes the
entire agreement between the parties hereto, and any prior agreement, assertion, statement,
understanding, or other commitment occurring during the term of this Agreement, or subsequent
thereto, have any legal force or effect whatsoever, unless properly executed in writing, and if
appropriate, recorded as an amendment of this Agreement.
E. This Agreement shall be interpreted in accordance with the laws of the State of Texas and
venue of any litigation concerning this Agreement shall be in a court of competent jurisdiction sitting
in Denton County, Texas.
Page 6 of7
IN WITNESS WHEREOF, the parties do hereby affix their signatures and enter into this
Agreement as of the day of ' 2007.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
BY:
APPROVED AS TO LEGA
EDWIN M~ S , CI
ATTEST:
BY:
B
Page 7 of7
PERRY R~ McNEILL, MAYOR
DENTON PARKS FOUNDATION
By~L~L-
TE Y FRUSHOUR
TREASURER
AGENDA INFORMATION SHEET
AGENDA DATE: March 6,2007
DEPARTMENT: Materials Management
Questions concerning this
acquisition may be directed
to Sharon Mays 349-8487
ACM:
Jon Fortune
.
SUBJECT
Consider adoption of an Ordinance authorizing the City Manager or his designee to execute
Change Order Number One (removing the 5% annual cap on the contract's escalation clause) to
the contract between the City of Denton, Texas and ABB, Inc.; providing for the expenditure of
funds therefor; and providing an effective date (Bid 3282-Change Order No. One to the
Three- Year Agreement for Purchase of Medium Voltage Switchgear Buildings). The Public
Utilities Board recommends approval (4-0).
CHANGE ORDER INFORMATION
A detailed explanation of the change order request is included in the attached Public Utilities
Board agenda information sheet (Attachment 1).
PRIOR ACTIONNIEW (COUNCIL.. BOARDS.. COMMISSIONS)
The Public Utilities Board approved this item at its February 26, 2007 meeting. City Council
awarded this bid to ABB, Inc. on February 1,2005 (Ordinance 2005-037).
RECOMMENDATION
Approve Change Order One amending the contract with ABB, Inc. to remove the 5% annual cap
on the contract's escalation clause.
PRINCIPAL PLACE OF BUSINESS
ABB, Inc.
Lake Mary, FL
ESTIMATED SCHEDULE OF PROJECT
The change order would be in effect for the remaining term of the contract. The contract was
initially approved for three years, which would be through February 1, 2008 with the option to
extend for additional one-year periods if agreed to by both parties with all pricing, terms and
conditions remaining the same.
Agenda Information Sheet
March 6, 2007
Page 2
FISCAL INFORMATION
The estimated expenditure for the four buildings is $2,131,696, which will be funded out of
amounts budgeted for specific projects under the three project numbers: 600126489 (two
buildings), 600821492, and 602099493.
Respectfully submitted:
~~~
Tom Shaw, C.P.M., 349-7100
Purchasing Agent
Attachment 1: Public Utilities Board Agenda Information Sheet
Attachment 2: PPI for Finished Energy Goods as of January 31, 2007
Attachment 3: Wesco Letter Requesting the Amendment
Attachment 4: Additional Pictures of the Interior of the Denton North Substation Switchgear
Building
Attachment 5: Original Unit Prices and 17.2% Change
Attachment 6: Proposed Amendment to the Purchase Agreement with ABB
Attachment I
PUB AGENDA ITEM #1
PUBLIC UTILITIES BOARD AGENDA INFORMATION SHEET
AGENDA DATE:
January 26, 2006
DEPARTMENT:
Utilities
Howard Martin, 349-8232 ~
ACM:
SUBJECT
Consider recommending approval of Amendment # I to the agreement for purchase of substation
switchgear and control buildings with ABB, Inc., 655 Century Point, Lake Mary, Florida, to
remove the 5% annual cap on the escalation clause and to allow the price to fluctuate with the
Producer Price Index referenced in the original agreement.
BACKGROUND
Distribution substations consist of three distinct categories of structures and equipment. These
are the high voltage structures and equipment (69kV or 138kV), the transformer, and the low
voltage structures and equipment (13.2kV). Denton Municipal Electric (DME) uses switchgear
and control buildings for the low voltage section of all substations. Switchgear buildings provide
a climate-controlled environment to house distribution circuit breakers, batteries, protective
relays, communication, control, and monitoring equipment and are a compact, low profile
alternative to outdoor type distribution substation structures. Figure I below is a picture ofthe
switchgear building installed in the Denton North Substation.
Figure I
AIS - PUB Agenda Item #1
February 26, 2007
Pager 2 of 5
A three-year agreement for purchase of substation switchgear and control buildings from ABB
was approved February 1,2005 pursuant to Bid #3282. The building pictured in Figure 1 was
purchased from ABB in 2005 under that agreement. The three-year agreement term, with the
option to extend for additional years, was specified in the bid because there were several projects
in the approved CIP that required purchase of switchgear buildings. These buildings require a
large amount of engineering work to produce, both by the manufacturer and by DME. A total of
91 drawings was required to construct the Denton North switchgear building, not counting the
drawings that were required to prepare the bid. Clearly, there is advantage in making multiple
uses of the time consuming and expensive efforts expended in preparing the initial design and in
the refinement of that design that are a normal part of placing any complex system in service.
The reduction in engineering effort for subsequent buildings will translate into significant dollar
cost savings. There are also operational and maintenance benefits from standardization.
In late 2004 when Bid #3282 was advertised, there were some indications that the market was
beginning to experience an upward trend in prices for items that contained significant amounts of
metals. Because of this apparent upward trend, the bid included an escalation feature whereby
the price would be allowed to increase or decrease annually based on movement of the U. S.
Department of Labor Producer Price Index for finished energy goods (PPI). The maximum
annual change was capped at 5%. This limit, although an arbitrary number, was based on the
fact that the market had not been particularly volatile up to the time of the bid. Both DME and
ABB agreed at the time of the bid that the 5% limit offered a reasonable window that appeared
generous enough to match potential changes in the market over the period of the agreement.
That assessment in late 2004 has not proven to be accurate. Examination of the PPI for the
period between February 2005 and December 2006 (the most recently published figure) will
show that price increases in finished energy goods during the period, which can be traced to
increases in raw materials costs, did not follow historical trends and could not have been
anticipated when the specification was being finalized in late 2004. The index reached a high
point in mid 2006 approximately 31 % above the February 2005 level, a period of less than 18
months. The index is lower than that level at present. A copy of the published PPI for Finished
Energy Goods as of January 31, 2007 is included as Exhibit 1. The index was 118.6 in February
2005 and was 139.0 in December 2006, an overall change of 17.2%.
The two primary raw materials that are used in the manufacture of switchgear buildings are steel
and copper. There have been sizable increases in the prices for these two commodities since the
agreement was approved in February of2005, which, in turn, has resulted in a corresponding
change in the finished product markets. Overseas purchases of these materials have been the
driving factor in demand for copper and steel. As an example, copper was in the range of $2.00
per pound in early 2005. The high in mid 2006 was more than $3.50 per pound. The price is
currently in the $2.80 range.
Demand for switchgear buildings has also increased to the extent that delivery times have
approximately doubled since DME's initial order. Because of the change in raw materials prices,
ABB has requested a change in the pricing structure for future orders. ABB approached DME in
December 2006 with information supporting a position that the 5% cap contained in the bid did
not reasonably represent the increases in raw materials prices. They have presented credible
AIS - PUB Agenda Item #1
February 26, 2007
Page 3 of5
information indicating that, because of increased material cost and product demand, current bid
prices would be up to 30% above what was quoted in Bid #3282. ABB initially asked for a 22%
increase in the original unit prices. After discussions, and because of the terms of the existing
agreement, ABB has agreed to accept the relative change in the PPI as the basis for establishing a
current price.
DME proposes to amend the purchase agreement to eliminate the 5% cap and allow the price to
float continually with the PPI. All other terms of the agreement remain in accordance with the
original specification. The following items are included to fully define the terms and actions to
be taken by each party to the agreement:
1. Continue to use the PPI for finished energy goods as the basis for adjusting the unit prices for
future orders using the same calculation methodology as defined in the bid specification.
2. Delete the 5% limit on increases or decreases.
3. Delete the requirement to adjust the price only once annually and allow the unit prices to
continually float with the relative change in the PPI.
4. Establish the published PPI for February 2005 of 118.6 as the stated, official starting point
for determining the unit prices for future orders.
5. Base unit prices for future orders on the relative change between 118.6 and the most recently
published PPI at the time of order entry. The most recent four months of index data is
preliminary and subject to adjustment by the Department of Labor. The unit prices shall not
be adjusted beyond the date of order entry even if the preliminary PPI is adjusted after that
date.
6. Upon approval of the amendment, DME will order four buildings (two for RD Wells, one for
Fort Worth Drive, and one for a planned future station to support a major development in the
western area of Denton). The unit prices for these four buildings shall be 17.2% above the
original bid unit prices in Bid #3282 as approved by the City Council in February 2005.
(This is based on the preliminary December 2006 index as published on January 31, 2007,
which was 139.0.)
7. ABB will work with DME to establish delivery dates for the four buildings based generally
on DME's project needs. DME shall not require any delivery time to be shorter than ABB's
current, normal production schedule.
8. DME shall have the option of canceling the order for the fourth building up to a mutually
agreed to date between September 2007 and November 2007 without incurring any monetary
cost or penalty.
To aid in evaluating the reasonableness of the actions proposed by DME, several factors should
be considered.
The market has changed since February 2005. The influences of the world market have
introduced volatility in raw materials prices that could not have been anticipated in late 2004 and
early 2005. This is evidenced by the fact that DME offered, and ABB accepted, terms that
would not be considered by hardly any vendors today. Therefore, a change in the forward-
looking price structure is justified in some measure.
AIS - PUB Agenda Item #1
February 26, 2007
Page 4 of5
1. Use of the PPI is a good approach that is independent from either party and takes into
account an entire market as a measure.
2. The purchase agreement is not exclusive and can be terminated by either party with 30-day
notice.
3. The agreement requires no minimum purchase. DME has a defined need for four buildings
at present.
4. The working relationship between ABB and DME on producing the Denton North
switchgear building has been excellent. ABB has provided the product as intended by DME
with no exceptions.
5. The quality of the product is good. It has been well received by field personnel as an
improvement over the buildings previously purchased.
6. DME's goal is to promote positive business relationships that are based on arrangements that
are reasonable to both parties and that motivate each to seek continuing mutually beneficial
business interaction.
7. Rebidding has a high probability of resulting in prices higher than those proposed in the
amendment.
8. Switchgear buildings are highly engineered products that are unique to the needs of each
utility. There will be significant internal and manufacturer engineering cost to redesign the
extensive internal systems should another vendor be successful. Exhibit 4 contains pictures
of areas of the inside of the Denton North switchgear building. These pictures illustrate
some of the complexity of the systems contained in switchgear buildings.
9. There will be a field impact from having to operate and maintain multiple designs.
Exhibit 5 is a tabulation of the original bid prices and the new unit prices for the standard
building that DME plans to use. The bid did include prices for adding or deleting circuit breaker
cubicles and breakers and for changing the length of the building in two-foot increments. The
reason for this variability was to allow DME to meet the requirements of each project should
there be a need for additional circuit breakers or for space for additional protective relay or
communications equipment.
Exhibit 6 is the proposed amendment.
OPTIONS:
1. Recommend approval
2. Reject the proposed amendment and require a new bid for switchgear buildings, delaying
critical electric system security related projects that have been in process for several years.
3. Continue negotiating with ABB.
RECOMMENDATION:
DME recommends approval of the proposed amendment.
ESTIMATED SCHEDULE:
The schedule for delivery of the switchgear buildings will be arranged with ABB to
accommodate project needs.
AIS - PUB Agenda Item #1
February 26, 2007
Page 5 of5
PRIOR ACTION/REVIEW (Council, Boards, Commissions):
The original agreement was accepted by the PUB in January 2005 and approved by the City
Council on February 1,2005.
FISCAL INFORMATION:
The estimated expenditure for the four buildings is $2,131,696, which will be funded out of
amounts budgeted for specific projects under the four project numbers: 600126489,600821492,
and 602099493.
BID INFORMATION:
The unit prices in the original bid were approved by the City Council on February 1,2005.
DATE SCHEDULED FOR COUNCIL APPROVAL:
March 6, 2007
EXHIBITS:
1. PPI for Finished Energy Goods as of January 31, 2007
2. Wesco Letter Requesting the Amendment
3. Additional Pictures of the Interior of the Denton North Substation Switchgear Building
4. Original Unit Prices and 17.2% Change
5. Proposed Amendment to the Purchase Agreement with ABB
Respectfully submitted,
................................................................
.............................................. .................
............................................. .................
i:!'::::::?!jll',:,;::!!::!!'!
iIIii......................................................................
Sharon Mays
Director of Electric Utilities
Electric Administration
Prepared by:
~f:~-'
:1:1:
Chuck Sears
Engineering Administrator
Denton Municipal Electric
Bureau of Labor Statistics Data
Attachment 2
Exhibit 1
u.s. Department
of Labor
Bureau of Labor
Statistics
Bureau of Labor Statistics Data
www.bls.gov. Advanced Search I A-Z Index
BlS Home I Programs & Surveys I Get Detailed Statistics I Glossary I What's New I Find It! In DOL
Page 1 of 1
Change
Output
Options:
From:' 1996
To::-2'66'6'... G
include graphs NEW!
Data e,xtracted on: January 31, 2007 (3:57:40 PM)
More Fortnatting Options~'
Producer Price Inde,x-Commodities
Series Id: WPUSOP3510
Not Seasonally Adjusted
Group: Stage of processing
Item: Finished energy goods
Base Date: 8200
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nav Dee Annual
1996 78.5 77.8 80.1 83.3 84.6 84.7 84.2 84.6 85.3 84.8 84.9 85.7 83.2
1997 86.5 85.2 83.0 81.8 82.2 83.6 83.1 84.2 85.3 83.2 81.9 80.2 83.4
1998 77.5 75.9 74.2 74.7 76.3 77.2 76.9 75.4 75.4 74.6 72.8 70.8 75.1
1999 71.3 70.1 71.2 75.9 77.5 78.6 80.7 83.5 85.8 83.5 83.6 83.6 78.8
2000 83.8 87.5 90.9 89.2 90.9 97.7 97.3 95.9 100.6 99.6 98.9 97.5 94.1
2001 102.2 102.7 99.0 101.6 104.6 103.1 95.6 96.6 99.2 90.0 84.8 80.8 96.7
2002 81.3 81.3 85.0 88.8 88.4 89.8 90.5 91.3 93.0 94.5 91.3 90.7 88.8
2003 95.3 101.7 107.4 100.0 98.9 103.1 103.4 104.7 105.2 103.2 100.4 101.0 102.0
2004 106.0 105.7 107.0 109.5 113.6 112.5 115.4 115.0 115.1 121.1 120.1 114.5 113.0
2005 116.4 118.6 123.8 126.9 125.5 127.4 133.2 137.3 147.0 152.3 140.9 141.9 132.6
2006 145.7 139.1 143.1 149.6 151.9 153.1 155.4 155.0 144.3 136.4 138.0 139.0 145.9
(P) (P) (P) (P) (P)
P : Preliminary. All indexes are subject to revision four months after original publication.
-F.r.e.q..Y.e.nJ.l.y____A_s_K_e.d"",Q,Y.e_$.t.i..Q.n..s I _Er.e.e.d.o._m._._Q,f...X_nfQ_r.m_.a_tl.Q.n"._A<;.t IC-,Y-s.t-Q,m.e.r.,.S.M-rv.ev
Privacy &. Security Statement I Linking to Our Site I Accessibility
u.s. Bureau of Labor Statistics Phone: (202) 691- 5200
Postal Square Building Fax-an-demand: (202) 691-6325
2 Massachusetts Ave., NE Do you have a Q.~.t.~____g.l.H~.$,tlQJ1?
Washington, DC 20212-0001 Do you have a Technical (web) .question?
Do you have Other comments?
I1ttp://data. bIs. gOY / cgi - binJsurveymost
1/31/2007
Attachment 3
)~
February 13, 2007
WESCO
DISTRlBUfION&M
City of Denton
Purchasing Department
Attn: Karen Smith, A,P,P" Senior Buyer
901-8 Texas St.
Denton, TX 76209
RE: Medium Voltage Switchgear Buildings-Price Increase
Bid#: 3282
Dear Karen,
As you know, beginning in February of 20051 the City of Denton place,d a blanket order
on ASS to supply Medium Voltage Power Distribution Center (Switchgear) buildings.
Within the agreement was an allowance for a price increase of 50/0 per year, for
shipments within 36 months, which relates directly to the Bureau of Labor Statistics
(BLS), Producer Price Index (PPI) for Utility Products-Finished Goods.
When ASB and the City of Denton entered into this agreement, there was no way of
predicting the unforeseen and unprecedented increases in the raw materials market,
most notably electrical grade copper. Because of those conditions, the BLS, PPI data
indexed from February 2005 (value: 118.6) to preliminary data through December 2006
(value: 139.0) ,shows a 17.2% increase.
Moreover, in the last two years, we have c.losely monitored the bid prices that other
manufactures have been quoting in North America1 in the open mark,et. With the type of
engineered product that the City of Denton is requestingl prices have increased in the,
area of 250/0-300/0,
Therefore, ABS requests that the 50,,{, cap be waved, allowing ASS to increase the price
for the 17.20/0, thus recovering the full BLS increase in the cost of raw materials"
We sincerely appreciate your attention to this request and look forward to your response"
.',~
'"'""I
.'"
..'......
- cerel ,
Jason Heri
WEs~~~~~tri utionl Inc
On bee B, Inc.
Cc: Chuck Sears
Mark Ayars
Jim Semian
Attachment 4
Exhibit 3
Amendment to Switchgear Building Purchase Agreement
2007
Attachment 5
I Exhibit 4 I
Original Unit Prices and 17.20;(. Change
DME's Standard ABB Switchgear Building
February 27, 2007
Unit Cost Bid Item: Urlfllnal Bid L'osts with
Unit Costs Escalation
Standard 43' building with one 2000 amp main breaker, one
2000 amp tie breaker, and four 1200 amp feeder breakers (does
not include maintenance breakers or freight) $392,628 $460,160
Freight $2,887 $3,384
Spare 2000 amp breaker $8,006 $9,383
Porcelain insulator option $6,256 $7,332
Spare input power bushing $470 $551
Ootional Items Used in a Standard Buildinf!:
Substitute 35kV bushings in place of 25kV bushings (4 each) $1,067 $1,251
Convert tie breaker to same configuration as feeder except rated
at 2000 amps $10,700 $12,540
Substitute AMV AC breakers (7 @ $1,100 each) $7,700 $9,024
Arc detection system $25,000 $29,300
Total Cost for a Standard Buildinf! $454,714 $532,925
Additional Unit Prices for Ootions not Listed Above:
Add one fully equipped feeder breaker cubicle $35,613 $41,738
Add two feet (2') in length to the building $3,025 $3,545
Spare circuit breaker cost
1200 amp $6,21 7 $7,286
2000 amp $8,006 $9,383
Additional cost to substitute AMV AC breakers in place of ADV P $1,100 $1,289
Attachment 6
THE STATE OF TEXAS
COUNTY OF DENTON
s
s
s
AMENDMENT NO.1 TO
PURCHASE AGREEMENT FOR SWITCHGEAR AND CONTROL BUILDINGS
[City of Denton Bid No. 3282]
A Purchase Agreement for Switchgear and Control Buildings (hereafter the "Original
Agreement") was entered into by and between ABB, Inc. (hereafter "ABB") 655 Century
Point, Lake Mary, Florida 32746 acting through its duly empowered officers and
representatives; and the City of Denton, Texas, by and through its duly authorized and
empowered City Council (hereafter "Council"), said Original Agreement being approved by
the Council on the 1 st day of February, 2005 and being evidenced by Purchase Order No.
3282, providing for a term of three-years; and both ABB and the Council have each resolved
that the Original Agreement should be modified and amended as to certain provisions only, to
wit:
WHEREAS, both ABB and the Council in this "Amendment No. 1 to Purchase
Agreement For Switchgear and Control Buildings" desire to eliminate the 5% annual limit on
price escalations that is provided for in the Original Agreement and do hereby mutually
AGREE to the following changed terms of the Original Agreement as follows:
1. The U.S. Department Labor Producer Price Index for finished energy goods (hereafter
the "PPI") shall continue to be used as the basis for adjusting unit prices for future
orders. The unit prices shall be adjusted using the same calculation methodology as
defined in the bid specification.
2. The 5% annual limit on PPI price increases or decreases shall be eliminated.
3. The limitation allowing unit prices to be adjusted only once each year on the
anniversary date of the Original Agreement shall be eliminated. Unit price shall be
allowed to float monthly in accordance with the relative changes in the published PPI.
4. The published PPI for February 2005 of 118.6 shall be the starting PPI for determining
unit prices for future orders.
5. Unit prices for future orders shall be based on the relative change in the PPI, up or
down, by the relative difference between 118.6 and the most recently published PPI at
the time of issuance of the purchase order. It is acknowledged that the most recent
four months of the PPI data is considered preliminary. The unit prices for an order
shall not be adjusted beyond the date of issue of a City of Denton purchase order even
if the preliminary PPI used for calculating the unit prices in the purchase order is
adjusted subsequent to the order date.
6. In return for approval of this Amendment No.1, ABB shall accept orders for four
buildings (two for the R. D. Wells Substation, one for the Fort Worth Substation, and
1
Exhibit 5
one for a planned future station). The unit prices for these four buildings shall be
17.2% above the original bid unit prices in Bid No. 3282 as approved by the City
Council on February 1,2005. This is based on the preliminary December 2006 index
as published on January 31, 2007, which was 139.0. The parties hereto agree that the
relative difference in the PPI from February 2005 (118.6) and the preliminary
December 2006 PPI published on January 31, 2007 (139.0) is 17.2%.
7. ABB will work with Denton Municipal Electric (hereafter "DME") to establish
delivery dates for the four buildings based on DME's project needs. DME shall not
require any delivery time to be shorter than ABB's current, normal production
schedule.
8. DME shall have the option of canceling the order for the fourth building, up to a
mutually agreed-to date between September 2007 and November 2007 without
incurring any charges or any monetary penalties.
9. All other terms and conditions of the bid specification, Bid No. 3282, and the Original
Agreement shall remain unchanged.
WITNESS our hands this the
day of
, 2007.
ABB, INC.
A Florida Corporation
By:
Its
ATTEST:
CITY OF DENTON, TEXAS
A Texas Municipal Corporation
By:
GEORGE C. CAMPBELL
City Manager
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By:
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
By:
2
ORDINANCE NO. 2007-
AN ORDINANCE AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE
CHANGE ORDER NUMBER ONE (REMOVING THE 5% ANNUAL CAP ON THE
CONTRACT'S ESCALATION CLAUSE) TO THE CONTRACT BETWEEN THE CITY OF
DENTON, TEXAS AND ABB, INC.; PROVIDING FOR THE EXPENDITURE OF FUNDS
THEREFOR; AND PROVIDING AN EFFECTIVE DATE (BID NO. 3282-CHANGE ORDER NO.
ONE TO THE THREE-YEAR CONTRACT FOR PURCHASE OF MEDIUM VOLTAGE
SWITCHGEAR AND CONTROL BUILDINGS).
WHEREAS, on February 1,2005 by Ordinance No. 2005-037, the City awarded a three year
contract to ABB, Inc. in the estimated amount of $1,482,021 for the purchase of medium voltage
switchgear and control buildings;
WHEREAS, the Staffhaving recommended, and the City Manager having recommended to
the Council that a change order be authorized to amend such contract with respect to Section IV.G.
thereof, to delete the 5% annual cap for price adjustment escalation; NOW, THEREFOR,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The Change Order Number One, deleting the 5% annual cap for price
adjustment escalation as part of the contract agreement between the City and ABB, Inc., which is on
file in the office of the Purchasing Agent, in the unit pricing amounts as approved in Bid No. 3282,
is hereby approved; and the expenditure of funds therefor is hereby authorized in accordance with
said change order.
SECTION 2. This ordinance shall become effective immediately upon its passage
and approval.
PASSED AND APPROVED this the
day of
, 2007.
PERRY R. McNEILL, MAYOR
ATTEST:
JENNIFER W AL TERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
BY:
8-0RD-Bid 3282
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
DRAFT MINUTES
PUBLIC UTILITIES BOARD
February 26, 2007
After determining that a quorum of the Public Utilities Board of the City of Denton, Texas is
present, the Chair of the Public Utilities Board announced a quorum and convened into an Open
Meeting on Monday, February 26, 2007 at 9:00 a.m. in the Service Center Training Room, City
of Denton Service Center, 901-A Texas Street, Denton, Texas.
Present:
Chair Charldean Newell, Bill Cheek, Phil Gallivan and John Baines
Ex Officio Member:
Howard Martin, ACM Utilities
Absent:
Dick Smith, Bob Bland and Randy Robinson, excused
OPEN MEETING:
CONSENT AGENDA:
The Public Utilities Board has received background information, staff's recommendations, and
has had an opportunity to raise questions regarding these items prior to consideration.
Board Member Phil Gallivan pulled Item 1 for individual consideration.
2) Consider recommending adoption of an Ordinance accepting competitive bids by way of an
Interlocal Cooperative Purchasing Program Participation Agreement with the Lower
Colorado River Authority (LCRA) under Section 271.102 of the Local Government Code,
for the purchase of electric distribution cables; providing for the expenditure of funds
therefore; and providing an effective date (File 3743-lnterlocal Agreement for Purchase of
Electric Distribution Cables with LCRA awarded to Techline, Inc., in the amount of
$382,460).
Board Member John Baines moved to approve Item 2 with a second from Board Member
Gallivan. The motion was approved by a 4-0 vote.
ITEMS FOR INDIVIDUAL CONSIDERATION:
1) Consider recommending approval of Amendment # 1 to the agreement for purchase of
substation switchgear and control buildings with ABB, Inc., 655 Century Point, Lake Mary,
Florida, to remove the 5% annual cap on the escalation clause and to allow the price to
fluctuate with the Producer Price Index referenced in the original agreement.
Board Member Gallivan asked if the unit prices would be fixed at the 17% above the original bid
prIces.
Chuck Sears, Engineering Administrator, replied that for the buildings in the initial purchase the
prices were fixed at the 1 7%, but after that the price could float up or down, with the trend
currently being down.
1 Minutes of the Public Utilities Board Meeting
2 February 26, 2007
3 Page 2 of3
4
5
6 Board Member John Baines asked if it would be possible to limit the fluctuation in prices with
7 future purchases.
8
9 Sears stated that at this time, with this particular market, it would be difficult. Sears also stated
10 that having the 5% cap in the original agreement helped in that no one had seen the market
11 fluctuate that severely since the mid 1980's. Now, with vendor bid prices good for only 3 to 4
12 days, and because the City had an agreement in place, staff was able to negotiate. ABB, Inc.,
13 initially asked for 22% even though its price had increased approximately 30%. Staff proposed,
14 since ABB was not reengineering the product, going with the original agreement and removing
15 the 5% cap. ABB accepted. Sears also stated that since the City maintains a good relationship
16 with the vendors, staff has the opportunity for negotiation.
17
18 Board Member Gallivan moved to approve with a second from Board Member Bill Cheek.
19 The motion was approved by a 4-0 vote.
20
21 The meeting was adjourned by consensus at 11 :00 a.m.
22
AGENDA INFORMATION SHEET
AGENDA DATE: March 6,2007
DEPARTMENT: Materials Management
Questions concerning this
acquisition may be directed
to Mike Ellis 349-8424
ACM:
Jon Fortune
.
SUBJECT
Consider adoption of an Ordinance of the City of Denton authorizing the City Manager or his
designee to execute a purchase order with the Houston-Galveston Area Council of Governments
(H-GAC) for the acquisition of a flushing/vacuum combination unit for the City of Denton
Wastewater Department by way of an Interlocal Agreement with the City of Denton; and
providing an effective date (File 3728-lnterlocal Agreement for Flushing/Vacuum Unit with
H-GAC awarded to Hi-Vac Corp/AQUA TECH in the amount of $149,278.08). The Public
Utilities Board recommends approval (6-0).
FILE INFORMATION
This request is for the acquisition of a high volume sewer flushing/vacuum unit assembly and
peripheral equipment. The truck cab/chassis at a cost of $71,499 is being presented to the City
Manager under a separate file for approval. The combination of cab/chassis and
flushing/vacuum unit make up a truck approved for replacement in the 2006-07 budget process.
The primary use of this vehicle is the maintenance of sewer collection pipelines, an aggressive
sewer line cleaning program and the reducing/eliminating of dry weather sewer overflows.
PRIOR ACTION/REVIEW (COUNCIL.. BOARDS.. COMMISSIONS)
The Public Utilities Board approved this item at its January 22, 2007.
RECOMMENDATION
Award to Hi-Vac Corp/AQUATECH for a flushing/vacuum unit in the amount of$149,278.08.
PRINCIPAL PLACE OF BUSINESS
Hi-Vac Corp/AQUATECH
Columbus, OH
ESTIMATED SCHEDULE OF PROJECT
This unit can be shipped in 4-8 weeks after receipt of the chassis. The chassis is scheduled for
delivery twelve weeks from receipt of an order or May 2007.
Agenda Information Sheet
March 6, 2007
Page 2
FISCAL INFORMATION
The Wastewater Department has $160,000 budgeted In account 645555.8535 to fund the
purchase of the unit.
Respectfully submitted:
~~~
Tom Shaw, C.P.M., 349-7100
Purchasing Agent
Attachment I:H-GAC Pricing Sheet from Hi-Vac Corp/AQUATECH
l-AIS-File 3728
Attachment 1
, I
~~~~~~~~:t~::Z_~~~~~1::':~Jlt~:~~~~~t~
CONTRACf PRICING WORKSHEET
For Standanl Equipment Purehases
contract! SCOI-K
No.: i
Date
Prepared:
11812007
BuyIna iCity of Denton, TX
AaeDtY: !Water UtilitiesIServices wastewater Conections
C..-tad
PersIIIl::
PIloDe;,
Fu:
~
Prodad
Code:
iLuz Torres Sr
!94Q...349-8499
i94Q...349--7184
i lstorres<mcitvofdenton ~com
B805 DacriptioIl:
jHi-vacCorplAQUATECH
Pnpared ~Bill Cottrell
Phorte: i94Q...367-2866
Fax: ~940-891-441 0
F.IuiI: ! billcottrelltxcalmsn. com
B--IO Combination Cleaning Vacuum Machine - Page Two Pricing Worksheet
COfttrador:
120051 ... Water Pump hoUr meter
000349-1 - 6-way Boom Control Joy Stick
120002 - Back Up Alarm. 12 volt electric
l2OO41 - Engine Hour Meter
120097 - Emergency Shut Down
120 10 1 - Control Panel Light
... 8" Fluidizer Nozzle
120401 .. Floodlight at desired location
1200 11 .. Rotating beacon on unit
120395 .. Light board installed on unit
$256JJO 23&007 ~ gn x6' aluminum extension tube
$914J~ 238007 .. 8" x 6' aluminum. extension tube
$226. Subtotal From Additional Sheet( s):
$266~ Subtotal B: i
$517aOO
$292aOO
$409 .00
$839aOO
$304aOO
$304.00
$0.00
$6,531.00
176100 ... 101 Leader hose 1"
Description
Cost
Deseription
Cost
Description
Cost
Description
Cost
.~ .. :-.::. .,~~ "'::i.;: ~;.:". 0).. ..~.. ~~~~L.-:.. ..::
. . I. .. .. .
. "j'~.: 1.:~:"._:~~:::I-:J.~."":~L(~.i~:~.~~.,:(~i~"~.;,:~:":;::~~.:i.~;t :.:~.::r:.. ,. .... .
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER OR
HIS DESIGNEE TO EXECUTE A PURCHASE ORDER WITH THE HOUSTON-
GALVESTON AREA COUNCIL OF GOVERNMENTS (H-GAC) FOR THE ACQUISITION
OF A FLUSHING/VACUUM COMBINATION UNIT FOR THE CITY OF DENTON
WASTEWATER DEPARTMENT BY WAY OF AN INTERLOCAL AGREEMENT WITH
THE CITY OF DENTON; AND PROVIDING AN EFFECTIVE DATE (FILE 3728-
INTERLOCAL AGREEMENT FOR FLUSHING/VACUUM UNIT WITH H-GAC
AWARDED TO HI-VAC CORP/AQUATECH IN THE AMOUNT OF $149,278.08).
WHEREAS, pursuant to Ordinance 95-107, the Houston-Galveston Area Council of
Government (H-GAC) has solicited, received, and tabulated competitive bids for the purchase of
necessary materials, equipment, supplies, or services in accordance with the procedures of state
law on behalf of the City of Denton; and
WHEREAS, the City Manager or a designated employee has reviewed and recommended
that the herein described materials, equipment, supplies, or services can be purchased by the City
through the Houston-Galveston Area Council of Government (H-GAC) programs at less cost
than the City would expend if bidding these items individually; and
WHEREAS, the City Council has provided in the City Budget for the appropriation of
funds to be used for the purchase of the materials, equipment, supplies, or services approved and
accepted herein; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The numbered items in the following numbered file for materials,
equipment, supplies, or services, are hereby approved.
FILE
NUMBER
VENDOR
AMOUNT
3728
H-GAC/Hi-Vac Corp/AQUA TECH
$149,278.08
SECTION 2. By the acceptance and approval of the above numbered items set forth in
the referenced file, the City accepts the offer of the persons submitting the bids to the H-GAC for
such items and agrees to purchase the materials, equipment, supplies, or services in accordance
with the terms, conditions, specifications, standards, quantities and for the specified sums
contained in the bid documents and related documents filed with the H-GAC, and the purchase
orders issued by the City.
SECTION 3. Should the City and persons submitting approved and accepted items set
forth in the attached purchase orders wish to enter into a formal written agreement as a result of
the City's ratification of bids awarded by H-GAC, the City Manager or his designated
representative is hereby authorized to execute the written contract; provided that the written
contract is in accordance with the terms, conditions, specifications and standards contained in the
Proposal submitted to H-GAC, quantities and specified sums contained in the City's purchase
orders, and related documents herein approved and accepted.
SECTION 4. By the acceptance and approval of the above enumerated items, the City
Council hereby authorizes the expenditure of funds therefor in the amount and in accordance
with the approved bids.
SECTION 5. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this
day of
, 2007.
PERRY R. McNEILL, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
~~~D~
DRAFT MINUTES
PUBLIC UTILITIES BOARD
January 22, 2007
After determining that a quorum of the Public Utilities Board of the City of Denton, Texas was
present, the Chair of the Public Utilities Board thereafter convened into an Open Meeting on
Monday, January 22,2007 at 9:03 a.m. in the Service Center Training Room, City of Denton
Service Center, 901-A Texas Street, Denton, Texas.
Present:
Chair Newell, Dick Smith, Bill Cheek, Phil Gallivan, Bob Bland, and John Baines
Ex Officio Members:
George Campbell, City Manager
Howard Martin, Assistant City Manager Utilities
Absent:
Randy Robinson, excused
Chair Charldean Newell announced that a quorum was present and convened the open
meeting at 9:03 a.m. to consider the following items:
OPEN MEETING:
CONSENT AGENDA:
The Public Utilities Board has received background information, staff's recommendations, and
has had an opportunity to raise questions regarding these items prior to consideration.
1) Consider recommending adoption of an Ordinance of the City of Denton, Texas authorizing
the expenditure of funds for payments by the City of Denton for electrical energy
transmission fees to the Lower Colorado River Authority (LCRA) and Texas Municipal
Power Agency (TMP A) for providing energy transmission services to the City of Denton;
and providing an effective date (File 3717-2006 Electrical Energy Transmission Fees-Lower
Colorado River Authority in the amount of $295,074 and Texas Municipal Power Agency in
the amount of $40,245 for a total award of$335,319).
2) Consider recommending adoption of an Ordinance of the City of Denton authorizing the City
Manager or his designee to execute a purchase order through the Buy Board Cooperative
Purchasing Network for the acquisition of four bucket trucks for Denton Municipal Electric
by way of an Interlocal Agreement with the City of Denton; and providing an effective date
(File 3711-lnterlocal Agreement for the Purchase of Four Bucket Trucks for Denton
Municipal Electric awarded to Philpott Ford in the amount of $337,836).
3) Consider recommending approval of the purchase of a Flushing/Vacuum Combination Truck
through the Houston Galveston Area Cooperative (H-GAC) Purchasing Program from Hi-
Vac Corp/AQUA TECH for the Wastewater Department by way of an Interlocal Agreement
with the City of Denton in the amount not to exceed $234,278.
Board Member John Baines moved to approve consent agenda items 1 though 3 with a
second from Board Member Phil Gallivan. The motion was approved by a 6-0 vote.
The meeting was adjourned by consensus at 9:50 a.m.
AGENDA INFORMATION SHEET
AGENDA DATE: March 6,2007
DEPARTMENT: Materials Management
Questions concerning this
acquisition may be directed
to Sharon Mays 349-8487
ACM:
Jon Fortune
.
SUBJECT
Consider adoption of an Ordinance accepting competitive bids by way of an Interlocal
Cooperative Purchasing Program Participation Agreement with the Lower Colorado River
Authority (LCRA) under Section 271.102 of the Local Government Code, for the purchase of
electric distribution cables; providing for the expenditure of funds therefor; and providing an
effective date (File 3743-lnterlocal Agreement for Purchase of Electric Distribution Cables with
LCRA awarded to Techline, Ltd., in the amount of $382,460). The Public Utilities Board
recommends approval (4-0).
FILE INFORMATION
This purchase is for insulated electric distribution cables that Denton Municipal Electric (DME)
uses to provide and distribute primary and secondary underground electrical service. Primary
cables are insulated for 15kV and secondary cables are insulated for 600 volts. The quantities
are based upon current on hand inventory, future needs, and upcoming projects. These items are
carried in the Warehouse working capital inventory.
PRIOR ACTIONNIEW (COUNCIL.. BOARDS.. COMMISSIONS)
The Public Utilities Board approved this item at its February 26, 2007 meeting. City Council
approved the interlocal agreement with the Lower Colorado River Authority (LCRA) on
December 12, 2006 (Ordinance 2006-334).
RECOMMENDATION
Award to Techline, Ltd, in the amount of$382,460.
PRINCIPAL PLACE OF BUSINESS
Techline, Ltd.
F ort Worth, TX
ESTIMATED SCHEDULE OF PROJECT
The estimated delivery is 18-20 weeks after receipt of order.
Agenda Information Sheet
March 6, 2007
Page 2
FISCAL INFORMATION
These items will be funded out of the Warehouse working capital account and charged back to
the using department expenditure budget account or project number.
Respectfully submitted:
~~~
Tom Shaw, C.P.M., 349-7100
Purchasing Agent
Attachment 1: Quote from Techline, Ltd.
Attachment 1
ttJ nCHl,lNE Ltd.
QUOTE
9B[l9 Beck CirclE! ALJ5tin, Te.as 78758.6401
Phone: (512) 833-5410 Fan (512) 833-5.:107
UOTE - LCRA
PAG!;:N
QUOTE JlATE
02/05/07
P,O, NO.
1
cun .I;
1108
SHIP TD:
City of Denton
901 B. Texas Street
Please remit all payments 10:
T echline, Lt d.
P.O. Box 674005
Dallas 7 TX 75267-4005
Phone: (512) 833-5401
Denton~ TX 76209
Cilll TO:
City of Denton
215 E McKi nney
Denton~ TX 76201
I NSTR U CTl 0 N 5
*** PER LCRA AGREEMENT ***
SHIP POI~T T St-lIP VIA
Techline Fort Worth BEST WAY
SHIPPED I TERMS
I NET 30 DAYS
UNE I
HQ.
PRODUCT
AHLi rJ Ese RI P'T10N
I
QiWI.NTIT\'
ORIjI::~r=n
I
Gl U ANTITY
AVAILAS L I::
I Qn',
UfM
I
UNIT
P!;IICE;
I
AMOUNT
fr.lET)
5% ABOVE COST AS STATED IN THE LCRA
QUOTE GOOD THROGU 2/9/07 5PM
1 #2-15KV-AL-EPR-RCN-3P 2500 FT 4.52 11300~OO
Cable~#2 AL 15Kv 220Hil EPR I nsul ati on 3 P ha se
Customer Prod: 28080040
*** LEAD TIME: 18-2OWKS ARC ***
2 50Qw16KV-CU-EPR-TAPE 15000 FT B ~61 129150.00
CABLE~ 500MCM CU 16KV EPR~TAPESHIELD~PVC JACKE
Customer Prod: 2B080100
*** LEAD TIME: lB.20WKS ARC ***
3 150MCM-lSKV.CU~EPR-TS220 18000 FT 12 . 24 220320.00
Cable, 750mcm CU 15KV 220.;1 EPR Tape Shielded
Customer Prod: 2B080110
*** LEAD TIME: 18-20WKS ARC *x*
4 4/0STRSDBC-lSOQ1NRR 9000 FT 2.41 21690.00
~ire~ #4/0 19-5trand Bare Copper on 1500lNRR
Customer Prod: 280-16M220
*** lEAD TIME: 1.2WKS ARO ***
T at a 1 382460.00
I nva; ce Total 3e2460~OO
Last Page
ORDINANCE NO.
AN ORDINANCE ACCEPTING COMPETITIVE BIDS BY WAY OF AN INTERLOCAL
COOPERATIVE PURCHASING PROGRAM PARTICIPATION AGREEMENT WITH THE
LOWER COLORADO RIVER AUTHORITY (LCRA) UNDER SECTION 271.102 OF THE
LOCAL GOVERNMENT CODE, FOR THE PURCHASE OF ELECTRIC DISTRIBUTION
CABLES; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND
PROVIDING AN EFFECTIVE DATE (FILE 3743-INTERLOCAL AGREEMENT FOR
PURCHASE OF ELECTRIC DISTRIBUTION CABLES WITH LCRA AWARDED TO
TECHLINE, LTD., IN THE AMOUNT OF $382,460).
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager, or his designee is hereby authorized to purchase electric
distribution cables in the amount of $382,460 from Techline, Ltd. under competitive bids
received by the Lower Colorado River Authority in accordance with an Interlocal Cooperative
Purchasing Program Participation Agreement under Section 271.102 of the Local Government
Code which is on file in the office of the Purchasing Agent.
SECTION 2. The City Manager, or his designee is authorized to expend funds pursuant
to the agreement for the purchase of various goods and services.
SECTION 3. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the
day of
, 2007.
PERRY R. McNEILL, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
~~~D~
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
DRAFT MINUTES
PUBLIC UTILITIES BOARD
February 26, 2007
After determining that a quorum of the Public Utilities Board of the City of Denton, Texas is
present, the Chair of the Public Utilities Board announced a quorum and convened into an Open
Meeting on Monday, February 26, 2007 at 9:00 a.m. in the Service Center Training Room, City
of Denton Service Center, 901-A Texas Street, Denton, Texas.
Present:
Chair Charldean Newell, Bill Cheek, Phil Gallivan and John Baines
Ex Officio Member:
Howard Martin, ACM Utilities
Absent:
Dick Smith, Bob Bland and Randy Robinson, excused
OPEN MEETING:
CONSENT AGENDA:
The Public Utilities Board has received background information, staff's recommendations, and
has had an opportunity to raise questions regarding these items prior to consideration.
Board Member Phil Gallivan pulled Item 1 for individual consideration.
2) Consider recommending adoption of an Ordinance accepting competitive bids by way of an
Interlocal Cooperative Purchasing Program Participation Agreement with the Lower
Colorado River Authority (LCRA) under Section 271.102 of the Local Government Code,
for the purchase of electric distribution cables; providing for the expenditure of funds
therefore; and providing an effective date (File 3743-lnterlocal Agreement for Purchase of
Electric Distribution Cables with LCRA awarded to Techline, Inc., in the amount of
$382,460).
Board Member John Baines moved to approve Item 2 with a second from Board Member
Gallivan. The motion was approved by a 4-0 vote.
ITEMS FOR INDIVIDUAL CONSIDERATION:
1) Consider recommending approval of Amendment # 1 to the agreement for purchase of
substation switchgear and control buildings with ABB, Inc., 655 Century Point, Lake Mary,
Florida, to remove the 5% annual cap on the escalation clause and to allow the price to
fluctuate with the Producer Price Index referenced in the original agreement.
Board Member Gallivan asked if the unit prices would be fixed at the 17% above the original bid
prIces.
Chuck Sears, Engineering Administrator, replied that for the buildings in the initial purchase the
prices were fixed at the 1 7%, but after that the price could float up or down, with the trend
currently being down.
1 Minutes of the Public Utilities Board Meeting
2 February 26, 2007
3 Page 2 of3
4
5
6 Board Member John Baines asked if it would be possible to limit the fluctuation in prices with
7 future purchases.
8
9 Sears stated that at this time, with this particular market, it would be difficult. Sears also stated
10 that having the 5% cap in the original agreement helped in that no one had seen the market
11 fluctuate that severely since the mid 1980's. Now, with vendor bid prices good for only 3 to 4
12 days, and because the City had an agreement in place, staff was able to negotiate. ABB, Inc.,
13 initially asked for 22% even though its price had increased approximately 30%. Staff proposed,
14 since ABB was not reengineering the product, going with the original agreement and removing
15 the 5% cap. ABB accepted. Sears also stated that since the City maintains a good relationship
16 with the vendors, staff has the opportunity for negotiation.
17
18 Board Member Gallivan moved to approve with a second from Board Member Bill Cheek.
19 The motion was approved by a 4-0 vote.
20
21 The meeting was adjourned by consensus at 11 :00 a.m.
22
AGENDA INFORMATION SHEET
AGENDA DATE: March 6,2007
DEPARTMENT: Materials Management
Questions concerning this
acquisition may be directed
to Emerson Vore1349-8271
ACM:
Jon Fortune .
SUBJECT
Consider adoption of an Ordinance of the City of Denton, Texas approving an Agreement
between the City of Denton and the North Texas Umpire Association; determining a sole source
and approving the expenditure of funds for the purchase of certified softball officiating services
available from only one source in accordance with the provisions of the state law exempting such
purchases from the requirements of competitive bids; and providing an effective date (File 3744-
Agreement with North Texas Umpire Association in the amount per game as specified in the
agreement for an estimated award of $57,000).
FILE INFORMATION
The Agreement between the City of Denton and the North Texas Umpire Association is to
supply officiating services for the Adult Slow Pitch spring, summer, and fall seasons for men's,
co-ed, and women's Amateur Softball Association (ASA) softball games. Each year the Parks
and Recreation Department contacts the ASA District Commissioner to locate an ASA Umpire's
Association that would be available to umpire adult softball league games in Denton. This year
and in previous years, the North Texas Umpire Association has been the only association (sole
source) available for officiating sanctioned adult softball league play in Denton. Section 252.022
of the Local Government Code provides that procurement of items that are only available from
one source do not have to be competitively bid.
The N orth Texas Umpire Association will officiate approximately 1,100 softball games for the
Parks and Recreation Department during the 2006-07 fiscal year. The Association will provide
two ASA umpires and one scorekeeper per game.
RECOMMENDATION
Award to North Texas Umpire Association in the amount per game specified in the agreement on
file in the office of the Purchasing Agent for an estimated total amount of $57,000.
PRINCIPAL PLACE OF BUSINESS
North Texas Umpire Association
Denton, TX
Agenda Information Sheet
March 6, 2007
Page 2
ESTIMATED SCHEDULE OF PROJECT
This Agreement will remain in effect through December 15,2007.
FISCAL INFORMATION
This Agreement will be funded from Parks and Recreation account 411170.7868.
Respectfully submitted:
~~~
Tom Shaw, C.P.M., 349-7100
Purchasing Agent
Attachment 1: Sole Source Letter from NTUA
l-AIS-File 3744
, Attachment 1 '
TEDDY GIBBS
Area Vlt Vice-President
January 30, 2007
To: Heather Gray, City of Denton
Re: North Texas Umpires Association
Ms.. Gray
The North Texas Umpires Association based in Denton and serves the local softball
associations as their official's facilitator and is the only registered ASA officials group in
this area. The NTUA has served Denton for many years and has been in good standings
each year with the Amateur Softball Association as a recognized umpire group. If you
have any questions please feel free to contact me.
Sincerely.
d~~J
,--- -.' " ':. Teddy Gibbs -
Texas ASA District 13 Commissioner
TEXAS AMATEUR SOFTBALL ASSOCIATION
-.. ....-......-......___~_~..3rr'.r"":..,:,r,......~~--.. .----.--=-- -.
o~~,..~
Aot(l , .,
i, Q){p ~
;,"Ullln l
..,~.
CLASS A MEMBER
P.O. BOX 299002 . LEWISVILLE, TEXAS 75029 · BUS. (972) 219-3554 · HOME (972) 221-0619
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING AN AGREEMENT
BETWEEN THE CITY OF DENTON AND THE NORTH TEXAS UMPIRE ASSOCIATION;
DETERMINING A SOLE SOURCE AND APPROVING THE EXPENDITURE OF FUNDS
FOR THE PURCHASE OF CERTIFIED SOFTBALL OFFICIATING SERVICES
AVAILABLE FROM ONLY ONE SOURCE IN ACCORDANCE WITH THE PROVISIONS
OF THE STATE LAW EXEMPTING SUCH PURCHASES FROM THE REQUIREMENTS
OF COMPETITIVE BIDS; AND PROVIDING AN EFFECTIVE DATE (FILE 3744-
AGREEMENT WITH NORTH TEXAS UMPIRE ASSOCIATION IN THE AMOUNT PER
GAME AS SPECIFIED IN THE AGREEMENT FOR AN ESTIMATED AWARD OF
$57,000).
WHEREAS, Section 252.022 of the Local Government Code provides that procurement
of items that are only available from one source, including; items that are only available from
one source because of patents, copyrights, secret processes or natural monopolies; films,
manuscripts or books; electricity, gas, water and other utility purchases; captive replacement
parts or components for equipment; and library materials for a public library that are available
only from the persons holding exclusive distribution rights to the materials; need not be
submitted to competitive bids; and
WHEREAS, the City Council wishes to procure one or more of the items mentioned in
the above paragraph; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The following purchase of materials, equipment or supplies, as described
in the "File" listed hereon, and on file in the office of the Purchasing Agent, and the license
terms attached are hereby approved:
FILE
NUMBER
VENDOR
AMOUNT
3744
North Texas Umpire Association
$57,000
SECTION 2. The acceptance and approval of the above items shall not constitute a
contract between the City and the person submitting the quotation for such items until such
person shall comply with all requirements specified by the Purchasing Department.
SECTION 3. The City Manager is hereby authorized to execute any contracts relating to
the items specified in Section 1 and the expenditure of funds pursuant to said contracts is hereby
authorized.
SECTION 4. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
BY: ~~
3-0RD-Fil~44 '
day of
, 2007.
PERRY R. McNEILL, MAYOR
AGREEMENT BETWEEN CITY OF DENTON PARKS AND RECREATION
. ..... ." .
DEPARTMENT AND NORTH TEXAS IDvIPJRE ASSOCIATION
The City of Denton Parks and Recreation Department (hereinafter "PARD") of Denton,
Texas and the North T~xas Umpire Association (hereinafter "NTUA") enter into the
following Agreeme,nt:
,1.CONTEST
A) The NTUA agrees to officiate ASA Softball games for the 2007 Adult Slow-Pitch
Seasons of Men,: Women and Coed Divisions and the 2007 Girls Fast-Pitch
Seasons of 14U, 12U, 10U and au Coach Pitch Divisions.that are scheduled by
PARD at the ~orth La'kes and the Denia Softball Complexes in Denton, Texas. '
B) The start date is March 2007 and runs through December 2007.
.. - . .....
C) PARD will provide NTUA with a schedule of games depicting leagues and their
field assignments for the season. NTUA will receive this information at least two
(2) weeks before, the season begins. PARD will also provide NTUA with the
league's current: rules and regulations that are modified from the current
Amateur Softball Association (ASA) rules.
D) NTUA will schedLJle officials so that the ability level of the official will match or
exceed the,lev,el of league play on each field. NTUA will provide, for each gamer
up to two (2) umpires for the Adult Slow-Pitch League and the Girls Fast-Pitch
League and, one (1) scorekeeper for Adult Slow-Pitch League~
1) Optimally, each field will have two (2) umpires, but when that is not possible
or not required, NTUA will insure that the official working alone wi-ll be a
qualified umpire~
2) The Umpire-In-Chief (UIC) scheduled for each night will ensure that the
officials assigned to each field are capable of working that particular level of
,play~
2. PAYMENT
A) In consideration of such services,
1 ) PARD will pay NTUA a total of $40.00 per game for the Adult Slow-Pitch
Divisions of Men's, Women's and ,Coed to provide two (2) umpires and one
( 1) scorekeeper.
2) PARD will pay NTUA a total of $33.00 per game for the Adult Slow-Pitch
Division of Coed-For-Fun to provide one (1) umpire and one (1)
scorekeeper.-
. 3) PARD will pay NTUA a total of $27.00 per game for the Girls Fast-Pitch
Divisions of au Coach Pitch to provide one (1) umpire.
4) PARD will pay NTUA a total of $52.00 per game for the Girls Fast-Pitch
Divisions of 14U, 12U and 10U to provide two (2) umpires.
2007 NTU A Contract
lof3
. .. . .~. :___~.. ... .:. .. .: 1- I . . -" .~....:.. ... ... ~- . .:~. ...;.. -....:..... ..:."....-.~ .~.. ".:';'... ~ .~....-- "..-.. ~.:..:-.~ .~~..:~~.~ .. ._~.;~.~.~~. .,~,- .~-': ..~:-.:; :~:~~~~ ... -..
......___ ......... ~ ~ .. I I
--- --- ......__.....~--
~
.' "
AGREEMENT BETWEEN CITY OF DENTON PARKS AND RECREATION
DEPARTMENT AND NORTH TEXAS UMPIRE ASSOCIATION
B) Payment Determ,i'nation
Both parties will determine the payment to be the calculated number of games
scheduled for each particular league times the specified rate of $52.00, $40~OO,
$33.00 or $27.00'.
C) Schedule of Payment
PARD will make the full payment for the total expected amount for estimated
services no later than 7 days after the first game of each season.
D) If NTUA provide~ only one (1) official for a game that requires two (2), then
PARD will be credited $7.00 for each g'ame that has one (1) official working
a'lone. This credit can be used during the ,current season or during the next
season.
. E) If PARD gives nqtice of forfeits in advance and this reduces the amount of time
an umpire is required to be at the fields, then NTUA will provide a full creditfor
that particular game. For example, if the first game of the day or the last game
of the day is canceled for a particular umpire, then PARD will be entitled to a
credit. If a middle game is canceled, which results in the umpire still needing to
stay on the fields the entire time, PARD will not be entitled to a credit. PARD
will give notice ofJorfeits by 3:00 pm for the same day for evening games.
I'
3. OFFICIALS
NTUA represents officials that are, or will be by the date of the contest, a duly
registered umpire who is a member in good standing of the ASA.
4. INTERPRETATION
The Constitution, By-laws and. rules and regulations of ASA and of NTUA are
considered a part of'this agreement and shall govern, except as modified by this
Agreement, anydisputes arising out of this Agreement. Both parties to the
Agreement agree to ~e so bound. .
A) When PARD'offers a "Coaches Meeting", PARD will notify NTUA of the date,
time, and place pf the Coaches Meeting. A representative from NTUA will be
required to attend the meeting to explain new rules, game procedures to the
coaches, and di~cuss how on-field disagreements will be handled.
5. VOIDING OF AGREEMENT
This agreement shall become null and void upon the demise of either organization.
This agreement may..be canceled at any time'by the mutual written consent of both
parties upon 30 days written notice. This agreement is void if either party cannot..
comply with its terms.
, 2007 NTUA Contract
20f3
..~...:":~~ ...': :
..
~
- "'-,
AGREEIvlENT BETWEEN CITY OF DENTON PARKS AND RECREATION
DEPARTMENT AND NORTH TEXAS IDvIPIRE ASSOCIATION
6. NOTIFICATION/SCHE'jDU'LE CHANGES
All notifi'cations concerning the provisio,ns of the document or of schedule changes
shall be in writing to:' the below address. All game changes will be given to NTUA
Assignor 24 hours prior to the change. If notification is not given in this timely
manner, an additional administration feeor$3.00 per game will be charged to
p ARD~
A) If initial notification is by phone, then a written confirmation shall thereafter be
sent within sever} (7) d,ays.
7. INDEMNIFICATION ,
NTUA agrees to indemnify, defend and hold harmless, PARD, the CITY, and their
employees and officers from and against any and all claims or actions for injuries or
damages, including: death, arising out of NTUA's performance under this
agreement, including the negligent acts or omissions of the umpires provided for
under this agreement and any claims or actions made or brought by an umpire.
This agreement is executed.. to be effective as of C,;l.. / /'1 , 2007 by
authorized representatives of the parties hereto as set forth below.
George C. Campbell, City Manager
North Texas Umpire Association' "-'~
~~~e 2-/lq lo~
Nd!~/~
~18.Ir
Titl e
City of Denton, Texas
Date
~iGi~5 u,l E .'\..
Title
City of Denton Parks and Recreation Department
Heather Gmy
Athletics Manager
(940) 349-7218
(940) 349-8384 fax
heather.gray@cityofdenton.com ::
North Texas Umpire Association
524 North Locust, Suite A
Dento~ TX 76201
(940) 898-1561
(940) 380-9235 fax
, ~bumpireOQ@h.tltmail~Q!l.m
2007 NTUA Contract
3of3
:., ~ :;.: i-':.i ~~;~.,;:;~ :...~::"::.::.:.:"~.....:. :; ... :. <.'~:::~~~ .::' :~~;;; ~.. I.:.~. ". : ~.:. :..:... . ":-" .. ~.~:.."'t..i:-":;~:.J"::.;::-~ <1- .:- ;~.:: ;"-:'I...:.k~
AGENDA INFORMATION SHEET
AGENDA DATE:
March 6, 2007
DEPARTMENT:
Economic Development
CM:
George C. Campbell ~
SUBJECT
Consider adoption of an ordinance authorizing the Mayor to approve a second amendment to that
certain Economic Development Program Grant Agreement with Teasley Partners, Ltd. To extend
the dates of substantial completion of the improvements covered by the Grant Agreement from
December 31,2006 to June 30, 2007; and providing an effective date. (Economic Development
Partnership Board recommends approval 5-0)
BACKGROUND
Teasley Partners entered into a Chapter 380 agreement with the City of Denton in 2004. In order
to receive one-half of one percent of the sales tax generated within their development, certain
development guidelines are required. The development must have some retail with residential
above and provide pedestrian access throughout. Another condition of the incentive required
Teasley Partners to have a minimum of 125,000 square feet of commercial space completed by
December 31, 2005. The developers were working with a multiplex theater and hotel and would
have achieved the required 125,000 square feet by their deadline. However, as a result of the
development of the Unicorn Lake Cinemark facility, and because the market would not support
two, the Teasley Partners plan was delayed. For that reason, Teasley Partners received a one-
year extension in January 2006. At the time of the extension, the Holiday Inn was just under
construction, and completion of the Holiday Inn would meet the required construction of square
footage.
The Teasley Partners are requesting another extension. During construction of the Holiday Inn,
they were required to do extensive earth work (excavate and fill approximately 4 acres an
average of20 feet); needed to re-engineer sewer line connection due to an existing line issue that
was uncovered during the process; and have been required to add sprinklers to portions of the
building where sprinklers had not been required under their original plan. The Holiday Inn
received a temporary certificate of occupancy and anticipates the final certificate of occupancy to
be issued February 28th.
ESTIMATED SCHEDULE OF PROJECT
With the Holiday Inn's schedule certificate of occupancy, substantial completion requirements
should be achieved by February 28, 2007.
PRIOR ACTION/REVIEW
The Economic Development Partnership Board reviewed the request and recommends approval
of the extension 5-0.
- 1 -
EXHIBITS
Ordinance
Amendment
Respectfully submitted:
Linda Ratliff, Director
Economic Development Department
- 2 -
S :\Qur Documents\Ordinances\07\ Teasley Partners Second Amendment.doc
ORDINANCE NO.
AN ORDINANCE AUTHORIZING THE MAYOR TO APPROVE A SECOND
AMENDMENT TO THAT CERTAIN ECONOMIC DEVELOPMENT PROGRAM GRANT
AGREEMENT WITH TEASLEY PARTNERS, LTD. TO EXTEND THE DATES OF
SUBSTANTIAL COMPLETION OF THE IMPROVEMENTS COVERED BY THE GRANT
AGREEMENT FROM DECEMBER 31,2006 TO JUNE 30,2007; AND PROVIDING AN
EFFECTIVE DA TE~
WHEREAS, through the passage of Ordinance No. 2004-013 on January 6, 2004, the
City Council approved a Economic Development Prograrri under chapter 380 of the Texas Local
Government Code ("Chapter 380") to stimulate development of commercial property within the
City by the developer, Teasley Partners, Ltd., ("Developer"); and
WHEREAS, to effectuate the program for Economic Development under Chapter 380
("Program"), the Developer and the City entered into an Economic Development Program Grant
Agreement ("Agreement"); and
WHEREAS, that Agreement required the Developer, as a condition of receiving the
grant, to substantially complete all the improvements covered by that Agreement by December
31,2005; and
WHEREAS, on January 3, 2006, the City Council approved an Amendment to extend the
date of substantial completion of the improvements covered by the grant Agreement to
Decernber31,2006;and
WHEREAS, the Developer has made significant progress on the improvements and
expects substantial completion to take place, within six months and has requested a second
extension of that amount of time on their substantial completion date; and
WHEREAS, City Council deems it in the public interest to grant the Developer's request
and to amend the Agreement to extend the completion date; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings set forth in the preamble of this Ordinance are incorporated
by reference into the body of this Ordinance as if fully set forth herein~
SECTION 2. The Mayor, or in case of her absence, the Mayor Pro Tern, is herby
authorized to execute a Second Amendment to the Agreement on behalf of the City of Denton
substantially in the form of the Second Amendment, which is attached to and made a part of this
Ordinance for all putposes~
SECTION 3. This Ordinance shall become effective immediately upon its passage and
approval~
S :\Our Docurnents\Ordinances\07\ Teasley Partners Second Amendment.doc
PASSED AND APPROVED this the
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
BY:
Page 2 of2
day of
, 2007.
PERRY R. McNEILL, MAYOR
S :\Our Documents\Contracts\07\ Teasley Partners Second Amendment.doc
SECOND AMENDMENT TO THAT CERTAIN
ECONOMIC DEVELOPMENT PROGRAM GRANT AGREEMENT
WITH TEASLEY PARTNERS, LTD.
THIS SECOND AMENDMENT to the Economic Development Program Grant
Agreement ("Agreement") by and between Teasley Partners, Ltd. ("Developer") a Texas limited
partnership, the City of Denton ("City"), a Texas municipal corporation, executed on the 6th day
of January 2004, as amended by First Amendment hereinafter referred to as Agreement.
WHEREAS, through the passage of Ordinance No. 2004-013 on January 6, 2004, the
City Council approved a Economic Development Program under chapter 380 of the Texas Local
Government Code ("Chapter 380") to stimulate development of commercial property within the
City by the developer, Teasley Partners, Ltd.., ("Developer"); and
WHEREAS, to effectuate the program for Economic Development under Chapter 380
("Program"), the Developer and the City entered into an Agreement; and
WHEREAS, that Agreement required the Developer, as a condition of receiving the
grant, to substantially complete all the improvements covered by that Agreement by December
31,2005; and
WHEREAS, on January 3, 2006, the City Council approved a First Amendment to extend
the date of substantial completion of the improvements covered by the grant Agreement to
December 31, 2006; and
WHEREAS, the Developer has made significant progress on the improvements and
expects substantial completion to take place within six months and has requested a second
extension of that amount of time on their subst~tial completion date; and
NOW, THEREFORE, in consideration of the mutual conditions and obligations set forth
below, the parties agree to amend the Agreement as follows:
SECTION 1. Section 4 "Program Grant" of the Agreement is hereby amended to read as
follows:
Section 4. Program Grant.
For each month of the Program Grant term, City agrees, subject to the conditions
contained in this Agreement, to make a Program Grant installment payment to Grantee on
or before thirty days following the City's receipt from the State Comptroller of the
Monthly Sales Tax Report indicating sales tax revenue from businesses located on the
Property. Monthly Program Grant installment payments shall be calculated as provided
in Section 5 below~ Tenant Occupancy shall be a condition precedent to the initiation of
Program Grant payments. Program Grant payments may be withheld at any time if there
s: \Our Documents\Contracts\07\ Teasley Partners Second Amendment.doc
are delinquent property taxes on the Property and will not be resumed until such
delinquency is cured. Notwithstanding anything contained herein to the contrary, the
Program Grant installment payments will cease, this Agreement will automatically
terminate, and Grantee will refund to the City all Program Grant payments previously
made if there is not Substantial Completion of the Improvements by June 30,2007.
SECTION 2. Save and except as amended hereby, all the remaining clauses, sentences,
paragraphs, sections and subsections of Agreement shall remain in full force and effect
EXECUTED and effective as of the _ day of , 2007, by City, signing by
and through its Mayor, or in case of her absence, the Mayor Pro Tern, duly authorized to execute
same by action of the City Council and by Grantee, acting through its duly authorized officials.
PERRY R. McNEILL, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDE TY ATTORNEY
BY:
Page 2 of2
AGENDA INFORMATION SHEET
AGENDA DATE:
March 6, 2007
DEP ARTMENT:
Finance
ACM:
Jon Fortune
SUBJECT
Consider approval of a Resolution appointing members to the Board of Directors of the
Industrial Development Authority Board; and providing for an effective date.
BACKGROUND
The Development Corporation Act of 1979 allows tax exempt financing (bonds) to be used for
the promotion and development of commercial, industrial and manufacturing enterprises, and to
encourage employment. The Industrial Development Authority (IDA) of Denton was created in
1979 as a nonprofit corporation under this provision. Since the IDA was created, only a handful
of projects have met the guidelines required under the Act. The IDA last issued bonds in 1998.
The City of Denton has no liability for the payment of the bonds issued through the corporation,
nor are the City's assets pledged for repayment of the bonds. When an entity requests
consideration, the Board of Directors of the IDA, which historically has included the City
Manager, Assistant City Manager, and Economic Development Director, work with the City's
Bond Counsel to verify the eligibility of the requests. Once eligibility is verified, the City's
Bond Counsel prepares the required resolution for the IDA Board to forward to City Council for
approval.
Former City Manager, Mike Conduff and former Assistant City Manager, Kathy DuBose are no
longer members of the IDA Board. The attached Resolution appoints the City Manager, George
Campbell, and Assistant City Manager, Jon Fortune, as board members to fill current vacancies
and reappoints the Economic Development Director, Linda Ratliff. The Secretary of State has
recently requested updated board information. Staff is not aware of any potential projects that
would qualify for financing under the Development Corporation Act of 1979. However, due to
the fact that Bonds are still outstanding and to avoid involuntary dissolution of the Authority,
staff recommends appointment of the individuals above to the IDA.
PRIOR ACTIONNIEW (COUNCIL.. BOARDS.. COMMISIONS)
The Board last met on March 16, 2004.
Agenda Information Sheet
March 6, 2007
Page 2
FISCAL INFORMATION
There are no costs to the City associated with this item. Any bonds issued and outstanding
through the corporation do not constitute debt or general obligations of the City of Denton.
EXHIBITS
Resolution
Respectfully Submitted:
~.i' ~:;'r _ ,--
~. . I .
~ .
. ~ ,1
~
X.
~ ~
Jon Fortune
Assistant City Manager
S :\Our Documents\Resolutions\07\Industrial Dev Authority Board.doc
RESOLUTION NO.
A RESOLUTION APPOINTING MEMBERS TO THE BOARD OF DIRECTORS OF THE
INDUSTRIAL DEVELOPMENT AUTHORITY BOARD; AND PROVIDING FOR AN
EFFECTNE DATE.
WHEREAS, by Resolution No. 2001-068, Mike Conduff and Kathy DuBose were appointed
to the Board of Directors of the Industrial Development Authority (IDA); and
WHEREAS, Mike Conduff and Kathy 'DuBose are no longer members of the Board of
Directors of the IDA; and
WHEREAS, the City Council deems it the public interest to appoint the City Manager,
George C. Campbell, Assistant City Manager Jon Fortune, and Director of Economic Development
Linda Ratliff to the Board of Directors of the IDA; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES:
~FJ;TTON 1 ~ That the following persons are hereby appointed to the Board of Directors of
the City of Denton Industrial Development Authority:
NAME
A nnRR~~
George C. Campbell, City Manager
215 East McKilUley
Denton, Texas 76201
Jon Fortune, Assistant City Manager
215 East McKinney
Denton, Texas 76201
Linda Ratliff, Director of Economic Development
215 East McKinney
Denton, Texas 76201
Each Director shall serve a term of office of six years. The term of the foregoing members
shall expire on March 6, 2013.
~FJ:TTON 7. That this resolution shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the ~ day of
, 2007.
PERRY R. McNEILL, MAYOR
S :\Our Documents\Resolutions\07\IndusmaI Dev Authority Board.doc
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
EDWIN M~ S R, Y ATTORNEY
BY:
Page 2 of2
AGENDA INFORMATION SHEET
AGENDA DATE:
March 6, 2007
DEP ARTMENT:
Planning and Development
ACM:
Howard Martin, 349-8230
..
SUBJECT - S06-0013 (Henderson #1 and #2 Wells)
Hold a public hearing and consider adoption of an ordinance regarding the approval of a Specific
Use Permit (SUP) to allow gas well drilling and production in a floodway. Two gas well
development sites are proposed, one is proposed on east side and the other on the west side of
Bonnie Brae south of Roselawn Drive. The Planning & Zoning Commission recommends
approval of the SUP (7-0).
BACKGROUND
Applicant: Dune Energy
Houston, TX
The applicant is requesting an SUP to allow gas well drilling and production in a floodway. The
development is located within a Neighborhood Residential 2 (NR-2) zoning district. Pursuant to
Denton Development Code Subsection 35.22.3.A., gas well drilling is permitted by right within
the NR-2 zoning district.
The approximately 70.45-acre property was purchased as one tract by the Marvin Henderson
Estate Trust in August 1996 and later annexed into the City in October 2000. Bonnie Brae Street
traverses through the property as an implied dedicated right-of-way. The right-of-way has been
in existence in its current alignment for over 75 years.
The subject property is located in a floodway designated by the Federal Emergency Management
Agency (FEMA) (see Exhibit 4). Pursuant to Denton Development Code subsection 35.22.4.A.,
gas well drilling and production is allowed in the floodway if the property owner has first applied
for and received approval from the City Council for an SUP.
In addition to the SUP the applicant is required to obtain a Watershed Protection Permit since the
subject property is also located in an Environmentally Sensitive Area (see Exhibit 5). Pursuant
to Denton Development Code Subsection 35.22.5.A.8., a Watershed Protection Permit is
required for locating a gas well within an ESA.
On January 24, 2007, Planning and Zoning Commission recommended approval of this SUP
request (7-0).
Public notification information is provided in Exhibit 6. As of this writing, staff has not received
any response from a property owner within 200 feet of the subject site.
PRIOR ACTION/REVIEW
January 24,2007 - Planning and Zoning Commission public hearing
OPTIONS
1. Approve as submitted.
2. Approve subject to conditions.
3. Deny.
4. Table item.
RECOMMENDATION
Planning and Zoning Commission recommends approval of this SUP request (7-0).
EXHIBITS
1. Staff Analysis
2. Location Map
3. Zoning Map
4. Floodplain Map
5. Environmentally Sensitive Area Map
6. Notification Map
7. Proposed Gas Well Plat
8. Ordinance
9. Planning and Zoning Commission 1/24/2005 public hearing minutes
Prepared by:
Ron Menguita
Planner III
Respectfully submitted:
~ w'~..:~
.,-.....~~ ~ #'"....$~~,"-j
I!' ~ 'V:f, -~. ..
%.'P~ ..~~.,::: ~'Z ' _ ~....;,:-.~
..,..'. ~,. ~~ ~~..~:; Not.
rfl~. ':;~~L.~". ~~"i'..~"~":~1
w '~?~':':':A:.u.7~J.{t,~0r-:~ ..r
~. <1&;.&""'.....' , ~ll
?;) if!) 'fir
~. ~ , ~
Brian Lockley, AICP
Interim Director of Planning and Development
EXHIBIT 1
CASE NO: S06-0013 DATE TO BE CONSIDERED: March 6,2007
LOCATION: The property is located on both sides Bonnie Brae south of Roselawn Drive.
APPLICANT: Dune Energy
3050 Post Oak Boulevard
Houston, TX 77056
OWNER: Marvin Henderson Estate Trust
P.O. Box 74
Justin, TX 76247
REQUEST: Consider adoption of an ordinance regarding a Specific Use Permit (SUP)
to allow gas well drilling and production in a floodway.
STAFF RECOMMENDATION: The Planning & Zoning Commission recommends approval
of the Specific Use Permit (7-0).
Neighborhood Residential 2 (NR-2) zoning district. The purpose of the
Neighborhood Residential land use is to preserve and protect existing
neighborhoods and to ensure that any new development is compatible with
existing land uses, patterns, and design standards.
ZONING
DISTRICT:
The subject site is located within a 100-year Floodplain future
land use designation.
COMPREHENSIVE PLAN
DESIGNATION:
SITE AND SURROUNDINGS: The property is currently undeveloped.
North:
South:
West:
East:
Extraterritorial Jurisdiction (ETJ) - undeveloped vacant land
Neighborhood Residential 6 (NR-6) - undeveloped residential zoning
Neighborhood Residential 2 (NR-2) - undeveloped residential zoning
Neighborhood Residential 2 (NR-2) - undeveloped residential zoning
BACKGROUND INFORMATION:
The subject site is located in a floodway designated by FEMA (see Exhibit 5). Pursuant to
Denton Development Code Subsection 35.22.4.A., gas well drilling and production is
allowed in the floodway if the property owner has first applied for and received approval of
the City Council for an SUP. In addition to the SUP the applicant is required to obtain a
Watershed Protection Permit since the subject site is also located in an Environmentally
Sensitive Area.
The following section of the Denton Development Code provides for the SUP process for
Gas Well Drilling and Production:
35.22.4 Gas Well Drilling and Production by Specific Use Permit or Planned
Development Zoning District; Application and Requirements.
A. No person, acting for himself or acting as an agent, employee, independent
contractor, or servant for any person, shall engage in drilling or production of a gas
well within the corporate limits of the City without first obtaining either a Specific
Use Permit as required by this Subchapter or unless permitted within a Planned
Development Zoning District unless drilling is permitted by right pursuant to Section
35.22.3. A Specific Use Permit shall be required to vary the standards under
Subsection 35.22.5.
B. An application for a Specific Use Permit or Planned Development Zoning District for
the drilling and production of a gas well shall be filed by the person having legal
authority. That person is presumed to be the record owner, mineral owner, or the duly
authorized agent of either the record owner or the mineral owner. The Chairman of
the Development Review Committee (DRC) may require an applicant to submit
information of authority to file an application.
C. The Chairman of the DRC has the authority to establish requirements for applications
in the Application Criteria Manual. No application shall be accepted for filing until it
is complete and the fee established by the City Council of the City of Denton has
been paid. Incomplete applications shall be returned less a fee for processing
determined by the Director of Planning and Development.
D. No application for a Gas Well Development Plat, Gas Well Permit, Watershed
Protection Permit or any other application for drilling and production of gas within
the city limits shall be approved outright or conditionally until a Specific Use Permit
or Planned Development District authorizing such use first has been approved. Denial
or conditional approval of a Specific Use Permit or Planned Development District for
gas well drilling and production shall be grounds for denial or conditional approval of
any other permit application pertaining to such use for the same land.
ANAL YSIS:
The proposed project is within the 100-year floodplain/environmentally sensitive area future
land use designation described in the Denton Plan. The 100-year floodplain/environmentally
sensitive area is described in the Denton Plan as floodplain areas of Clear Creek, Cooper
Creek, Pecan Creek, and Hickory Creek. Additionally, sites have been identified on the land
use plan that have significant environmental sensitivity. Regulations that preserve to the
maximum extent possible these floodplain areas in their natural condition should be
developed and implemented through the land development codes of the city.
Quentin Hix of Watershed Protection and Kenneth Banks of Wastewater Administration
have reviewed this SUP request. A detailed environment assessment will be performed as
part of the Watershed Protection Permit analysis. The Watershed Protection Permit, if
approved, will outline erosion control standards in which the applicant is required to follow.
In addition to the City development regulations the applicant is required to comply with
FEMA regulations.
With the issuance of a Watershed Protection Permit, compliance of the erosion control
standards set forth as part of the permit, compliance with the provisions of Subchapter 35.22,
Gas Well Drilling and Production, compliance with the provisions of Subchapter 35.19,
Drainage Standards, and compliance with the provisions of Chapter 30, Flood Prevention and
Protection, the SUP request is in compliance with the Denton Plan.
DEPARTMENT AND AGENCY REVIEW:
The following are comments received from the Development Review Committee regarding
this SUP request:
Landscaping:
Payment into the Tree Fund for 25% of the 6" DBH and greater trees removed during the
construction of this gas well development will be required prior to Gas Well permit issuance.
Denton Municipal Electric:
The developer is responsible for maintaining the level of care set forth by the latest State of
Texas and City of Denton adopted National Electrical Safety Code for existing and planned
electric utilities in all developments.
Engineering:
Proposed truck route cannot be utilized. The bridges on Bonnie Brae are not structurally
adequate to handle the truckload.
All Development Review Committee comments will be addressed prior to approval of a Gas
Well Plat.
FINDINGS:
Pursuant to subsection 35.6.4.B. a specific use permit shall be issued only if all of the
following conditions have been met:
1. That the specific use will be compatible with and not injurious to the use and enjoyment
of other property nor significantly diminish or impair property values within the
immediate vicinity;
Upon completion of drilling operations the proposed gas well production will be
compatible with and not injurious to the use and enjoyment of other properties in the
area. The gas well plat submitted will meet the minimum standards for gas well drilling
and production as established by the Denton Development Code.
2. That the establishment of the specific use will not impede the normal and orderly
development and improvement of surrounding vacant property;
Because the subject site and surrounding properties are within the 100-year floodway
and 100-year floodplain, limited development and improvement is allowed. The
establishment of the gas wells would not significantly impede the normal and orderly
development of the surrounding undeveloped vacant land.
3. That adequate utilities, access roads, drainage and other necessary supporting facilities
have been or will be provided;
Through the gas well platting process, the applicant will confirm adequate water, access
roads, drainage and other necessary supporting utilities are and will be provided.
4. The design, location and arrangement of all driveways and parking spaces provides for
the safe and convenient movement of vehicular and pedestrian traffic without adversely
affecting the general public or adjacent developments;
During gas well drilling the design, location and arrangement of all driveways and
parking spaces will provide for the safe and convenient movement of vehicular and
pedestrian traffic. There will be one proposed driveway installed. The other driveway
exists and will be modified to accommodate proposed equipment traffic.
5. That adequate nuisance prevention measures have been or will be taken to prevent or
control offensive odor, fumes, dust, noise and vibration;
During drilling operations adequate nuisance prevention measures will be provided by
the operator. Upon completion of drilling operations the proposed gas well production
would have minimal offensive odor, fumes, dust, noise and vibration.
6. That directional lighting will be provided so as not to disturb or adversely affect
neighboring properties; and
The operator will take normal provisions to provide directional lighting that will not
disturb or adversely affect neighboring properties. Lighting will be minimal on the site.
7. That there is sufficient landscaping and screening to ensure harmony and compatibility
with adjacent property.
The proposed gas wells will meet all landscaping and tree preservation regulations under
Subchapters 13 in the Denton Development Code. Screening will be added upon
completion of the drilling.
RECOMMENDATION: Based on the analysis and findings listed above, Planning &
Zoning Commission recommends approval of the SUP request.
EXHIBIT 2
Location Map
o
Feel
o ~ 600 1.200
EXHIBIT 3
Zoning Map
o
o JOO 000
Feet
1.200
EXHIBIT 4
Floodplain Map
R0SEt:I\WN
/"":'- .../1
. '''... . ~.~
- --, . \
""-. .
,,~
\ .
.""
" '"
/
''8:> '-
/"/\< ...
.'-
J'
~/
~V'IN1)\l>E
o
Feet
o 300 600 1,200
EXHIBIT 5
Environm
entally Sensif
Ive Area M
ap
"
~,
~
w'
z
z.
o
i
o
o 300 600
FGet
1,200
n
EXHIBIT 6
Notification Map
O.5EtoAWN
w
z.
Z
o
l'
o
Public Notification Date:
200' Legal Notices sent via Certified Mail:
500' Notices sent via Regular Mail:
Number ofresponses to 200' Legal Notice
. In Opposition: 0
. In Favor: 0
. Neutral: 0
Feel
o 300 600 1 ,ZOO
1/12/07
II
4
~~~=:==!~ il ~.~O~5
~~.=.:. '
~iiI~;'" "
'~WJ::
: 21' '1IVIIIafOO '
': Nr1Ii'~J.r.lftBd, am 0YI0Jdi
" "'~,' ", " '::; "~~ ',~! ",:!
m ::1 ,i ,I: '~~. '''11 II,o~:':::1i
,~ ,,1J i. '~' ~ 'Ilf t~~ "I~ :'~
Iii ! .Ii~~~i.~ l~llili
!i: 'I ':1 'I, i, :1;1 fill w~I~I~
I,: ::; :1 ,:i:: ::" !~'!l :E~:i ::B~:'~~
If .l! ~. K .;~llli~ 1l!!~Il!I'
i ....1 ! i -li6;1~;~.~!1
~....I ~ I t i~iI~il~t;il~:1
:; II I: II!! .~.~~IJ!U
~... ..~li!: ,I ~... .~~~ Ill~ UI~.ll
:~:: :,;t I" ,JE ,:1,: ., ~', ,.;1 :,~I:i!l '~'I"i; I:
I': ,I '" "I 1:: I' ~'I' '!: :~j'i ;i I'!i~:"
,~ $I , " , " i! ' ,~s 11[1, " :12
: :,~ I:: ,I l: " ':: ,'I: ,Iif- : ,~~ 'l~i":tili!1
· h ii' II ~ he"'.1 1 1 'la, :
IIi. 1 ~ l .1.1.. I..~. ~;itl.~~.~:~il!!
I. ..~ .i!! ...~J Ii;! 11 !Iillle;i~:~~:!
ti ,,) i!i '! ',,' w 11:11 ( i' I <cc ;'~ ,I ..~B
" :::'i! '>',:, " : t i ,!;-: I" :~ ':; f f :", ~l5~ i!~'~ :1 '~'6:!
I i; II!.~; :i ISI \51;llr; .m.. . !I~I
ll~I&I!~ l! .Ji! Ii .~.. Ie .~. !I i~ll..~~~ .~.~ 1st
i' i ,. oil 'i!, !I I I: 'i! _ 3 ltf5~1IIi5 ..,3 r ~'I:
I~:': ::Il.' :1' ',::,! l J ::K,I, i:: :~, ,~:: ~ 1 i::::':~: '~~i:121:lkll :~~i ':;Ii~
: ,'-c f '''''''' ~ ,~,~ ' ',l'! I, !IE:, ~ ,8 ;=~I ,c,!j, 1-o1l2~,g 5,
" :.=i , ",Iii I" '-W~ ~"I::I' Ii: II ll:"'I' ~,a~, ,* ll'~i:l'''' 't"
'.,: ',~ I,: ':: ' ",' ,,: ,.'~' i',' I:: ":j ~ ", '~~~ ~~:~~: ilSw!.: :';,:
- ~~. R~. ...1 ~.; ~.'. l. I '. ~... ~.i.IKI lesRI$~
I: ii', Ii t" ,J ::2: ~ ,ll' ,I ":, ~ I" a,! ! ~" , izi ;,tii!ll ','101'..;.1, t::,'
IS:, ',' J:: ,I: ';,:,fIl ~ :l: i,',!: ", , " 'if":~' ',' m, .l'z'! , l!f,!j!ij.!:ijjJ:,
d "! "11': ~ ' ~u, !" ' i a I ~=w' , ~~o
; !;~ l i ;1 r ..1; ! 1 ~Iil~~ili.. li;lil!
- .~ ..1 I ~, ~.I ~.,. ~ i ~ I:i ,~Ijl~i ie~~ ~J
Ill!: il.~..AI; I~; ll; f! 1!~_S!flt.li!lt;Ud
.. w ~...i Ii Iii" i:!I ~! n ~ ..~. ~!~ii~::MI~ ~:Iilil~
,;~, :~ ~,~ ~,~ ~ ~ ~l ~ ,_ _z . ~ ~'_ -!~~J~li~ _isl iL~
~. .~.ill
! '1':;8'
hii~
, ....it! ~~,
, !So iC-:
ICI. -en :c......:
~' :,"
,,&1 l
: 15 !~g~~'
~'i~~~~,:
, eiz'~~.,
: '~t:q-i!,
, ,oliIllife..~',
':&1 J'il "
Ill.. .~~.. II ii
Il~~! ijl !!!!
~,il)t, 'ii~' !" I' J I'
i~IJ1~1'!! !.~
;i~' j t1j" , l',)f ",: '1~
~1 ] "~ ' i,~ 4 ~
.!liil~. 11 ill
m~.iJ~l fi. t{
'ilJ,!f "!:rlju.il
:l.l;t 1 'I'," !;:~ rt' =1
::in j!!. II 1 fi
j:ii~~ i!!f ~>~ #~!
Jl~.ii~ili; I.J Ii,
::~: ~,I.tf :,;i~,), ,I, ,I ,:-.-",11
.t,i~: Iii
J~I;i .~~ ~ ..~.~.;'''
~I=iibi lll~
,~l~:I! J~,] ~ '.:: g ~;
:'i~:' "I :r~~ i I:,":] .11:
~~I'!i~J IJI~
'~:fi~ I ::E"~",~:2 ,:2 '~f
:!!jf.nil! 1.1~;
.t~.. - .'111.. 1.1 ...
.!~!.I~la.iJ lid
!ij!:ii~!!i.i r;;;
;ajhRu;;I~.II~
iilt
1 'i l
'I!! ,:t "..,
. ':,; ,~'
1 ~,;lll
.. ..11111
1 Jillil
,';SEa
::~~,',
':,~~:,:
,:,!I'"
'....'1"1 "
i- '
tLa:,',
:~~:'
'!DCJ
:=:)
~
~ p~ .. .111111111 ..1. .I~ ! II:::
... O;j J .lll~ ..~ .of I..
':,J.'llt~ ':- '
': :l
i
~
'z
'i
-.0([
,a..
..... ,'..... ~
'!t' ::~
1.I;l, :~ ,8 '1=1
'~ t::i Z
::E: :r ...... ,c.
(;1' ,tI) ,ct (;)
<CJ: ~
ih :ih
~: '[I')
l:
I
l:,JJBIHXiI
S :\Qur Documents\Ordinances\07\S06-00 13 .doc
ORDINANCE NO~
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, APPROVING A SPECIFIC USE
PERMIT TO ALLOW GAS WELL DRILLING AND PRODUCTION IN A FLOODW A Y,
GENERALLY LOCATED ON BOTH SIDES OF BONNIE BRAE STREET SOUTH OF
ROSELAWN DRNE, AND LEGALLY DESCRIBED AS ALL THAT CETAIN TRACT OR
PARCEL OF LAND SITUATED IN THE S. PRITCHETT SURVEY, ABSTRACT NUMBER
1004, AND THE J. EDMONDSON SURVEY, ABSTRACT NUMBER 400, DENTON
COUNTY, TEXAS, AND BEING APART OF THE 400 ACRE TRACT DESCRIBED IN THE
DEED FROM SPRINGSIDE JERSEY FARM TO W. T. HALL RECORDED IN VOLUME 266
PAGE 591 OF THE DEED RECORDS OF DENTON COUNTY, TEXAS, AS RECOGNIZED
AND OCCUPIED ON THE GROUND; PROVIDING FOR A PENALTY IN THE MAXIMUM
AMOUNT OF $2,000.00 FOR VIOLATIONS THEREOF; PROVIDING A SEVERABILITY
CLAUSE AND AN EFFECTIVE DATE. (806-0013)
WHEREAS, Dune Energy has applied for a Specific Use Permit to allow gas well
drilling and production in a floodway:
WHEREAS, on January 24, 2007, the Planning and Zoning Commission concluded a
public hearing as required by law, and recommended approval of the requested Specific Use
Permit; and
WHEREAS, the City Council finds that the change, as conditioned, meets the criteria
established in Section 35.6.4 of the Denton Development Code, and is consistent with the
Denton Plan and the Development Code; NOW THEREFORE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTIONl. The findings and recitations contained in the preamble of this ordinance are
incorporated herein by reference and found to be true.
SECTION 2~ The Specific Use Permit Site Plan attached hereto and incorporated herein
as Exhibit "AU, is hereby approved for the property described in the caption of this ordinance.
SECTION 3. If any provision of this ordinance or the application thereof to any person
or circumstance is held invalid by any court, such invalidity shall not affect the validity of the _,;
remaining provisions and applications, and to this end the provisions of this ordinance are
severable~
SECTION 4~ Any person violating any prOVISIon of this ordinance shall, upon
conviction, be fined a sum not exceeding $2,090~OO. Each day that a provision of this ordinance
is violated shall constitute a separate and distinct offense.
SECTION 5. This ordinance shall become effective fourteen (14) days from the date of
its passage, and the City Secretary is hereby directed to cause the caption of this ordinance to be
published twice in the Denton Record...Chronicle, a daily newspaper published in the City of
Denton, Texas, within ten (10) days of the date of its passage.
PASSED AND APPROVED this the
day of
, 2007.
PERRY R. McNEILL, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ED~~~~.~..~~~~~-~~)\)ORNEY
(...-/......~
,,,BK ~~
~_~w--
//
ljl
::: ~~:::~
XUJAa~ns po.~
53} V! 30 ssy
" U8W:;JIO.:J
IfW"W 3US .uN:Bcf :lSrl :.-.:ItJ~
Wfil 'J,JJ.Ino:l NOUnel
~ -if:JJoJ.X) 5
00t"\i ~ NOIINONlD T fiJ. 00 t(I(I~4f ~ u.3~ '9- iIO. HI j ~
J.:M::I.l &3I(.JW ~'w. a:nl'fO 3H.1. :10 !l:IW''' :ist1 ~1Il:tW ft3ti;J1I g;l'~ i! ~
HZ' '11 HI .oN NQS'H3:GN3H ~
,;
~ a ~ ~ ~~!f
~ I i: ~~g ct~ li!l ~
; _!! :;= ~li E~~~~!
~ ; i; ':~I i! ~!:~~ Ii
! g ~ n ~~;( ..:...i f:lI"'~
! ~ i I ~iS ~~~ lr;~!:
~ i? i~tII ~~~ lil!~~~~
~:t f ~ ~ ~~= I lit e !.; '4 e ~
;! ~ ~! S~; ~~~ ~,:i~lf~
.. r e 'I! Iz8 'i~! 1l~~!;1
:5 i 'I t !li i ...~s lIit I~~~~~~
a ~ ~ i!~~ ~-i~ ~'5~il!'
<;; · ~ ~j~ ~;~ ~iE~!~~8
I . ~ ~ ~~ ~ ~:j , ; 3 & i ~
i ~ =! ~!l ~~~ ~:~~;~:
i :t' IIj ~ ~ ~ I';~ 10:04 j~si"'~1
~ ! i! i l ii ~li !!~ ~!;~~~~
I' j I. 0 a 110' ;!~ "l;::"u~~
I ~ Q ~ Ii i . ~ ~~! ~~! h:~ hi
~ '" ~ i Ii.. i~e ~~~ i~~! I it
i i B ~ :J ~ ! ~ i ~ ~ ~ I ~I ~ E! ~ Q u ~
u ~ I ,; ~ r ij ~ <" ~ eg~ I'l. :~a'~~ 5 s
~ I · ~ ~ ~ i 2 ; ~ ~ ! !i~ ~:~ ~~~i~:i
!l . i ~ ~ I ~ i I ~ ~ ~ i.3~ ~~&i iii:D 83
~ : i ~ ~ 1 I ~! i! I ~ ~I i ~ ~ ~ ~;~ ~;! I'"
Q ~ ~ 8 1 ~ ~ : ~ ~ ~ ~ i : ~;! i~i i5~;~1
~ =! I ~ r ~ l! t · t I I ;I~ ~!~ ~S~~~f
, ::l i :ii LJ! ~ ~ ~! I 5 ~ 3 e:IF. ~ to ~ ~~I!i ~ '4 ~
~ : ~ ~ i ! !. I in I S ~ ~ I ~ t !~I~~~~ l~i;~I~
: ool i ~ li w * ~ ~ ~ 9 S ~ ! ... ~ Ii ~ ~ 1Ill! ~~ :i - ~ 8
~ I i 5 ~ t J~ ; 5 ~ ~:! ~ ;~;f~~~~ 15~~e3!
t ~ ~ ~ = ~ i~ ~ · ! d ~ j~g!2i:2 2~s~~?~
~ f ~ ~ ~ ~ ~ ~ ~ ~! ~ i ~ 13~~!~W~ ~=z~~;~
~ < 2 ~. l ~~ ~ ~ 2! ~ I ~~'~f:!~ li~~~~~
i ~ ~ ~ !; ~2 w = ~ · ~ I ~ ~~v~~~~! ~ dZI!5
~ e ~ i ; ; ! i! ; I ~ i i ; i ~i~~:~ii ~~;Vl!;
! ; ~ ~ ~ e i ;~ ! !; E! ~ ~ ~~~ii~~i ~~i~~~i
~ ~ . ~ ; ! ~ ~~ ~ s i ~ I i 3 !~~~~1~9 ;i I~~Q
~ ~ ~ I ~ ~ i ~! ~ ~ 8 i I ~ ! ~i~~~ia~ ~~i~~,~
~ ~ ~ ~ ~ S ~ ~ ~ ~ ~ i ~ ~ u ~~~~g 8Ig8~~
, I ~ ~ i j ~ !a ~ ~ ~ ~ ~ ~ ~ ~i~icil~ ~;~a;~
g ~ ! ~ ~ t 1M ~ i 2 ~::j ;1[.-. ~ s..; ~ ;; -w" ~
w ~ : ~ I ~ I ~ ~ !' I: ~ I !!gi!ia:~ ~!~~,~~~
a a ! ! l! lit. - II' a ; II! ~...1~ ~~!~ ~~I;i j~iiIi
; ~ ! ~ ~ ~ ! !I ~ ~ ~~ l i i ~ ~! ~s ~!~ Q~ ~ ILl ~ ~r!
ft ~ 1 ~ . ~ . .~ ~ ~ ~~ ~ ! ~ ~ ~i8!~~~1~ ~i~~~i~~
'-.... ~
I
3
< ...., i
'-.,
...... ~ ~
:0 i ..:
~
><
W
"
! '
j i
z 1 II
g l :J
~ !J i ~I
~ 'If ~ if
~ ,~~ ~;
,. .II, 'J;i '~t
g 1] Ii 11
"", i ~ "'", ',~ 0.. "-
"at ',,- '" \, '............... '-,
....... I'" '- '- -'..).~'
'-....... I ~" ' """ci> "
"-.. " "
'...... "-. ......,
"
"'I h I .I
rl I j l~i ! i ! 1
lII]li!] I;~ ~ t=! Co! C!
il~:! J Ii ~ = ~ !
I ! ~ j I i'! I 'I'" '5 1
~iII!1 i!1 !"!l
11 .! ~1 i ~ ] 10
, 1 t J ~ I; c 1 1 II!
l~-il l~~ ~
]o'l;~ ]'i~ ." ~ J
.l~ia -u ~!;f 2 'l~
~rH! ~:i II J If
I~i~i I]i ~; ~I ~jl
iif~~ -ti~ ~ l ~
-Q~1 J8 II j
~i'~~ :~fl ~ ~ ~ ~~
e~~jJ :~~i i I j ~:
il!~ f ij] I ~ ~ w ~~
~!l t~ il~;;l ~ ~ ~ ;!,
1 : I; J I ! 1
t I} ~!1 i ~ ; ;
J llJ -I .rlll n Oi ft
~~:~J H) i i i i
j~~j] l!i ~ i J Jl
i~;il i~~ i i i ii
i!!ii Iii lJlh
'iJi~, ...~~ ~ M ~ it
I ~ i i;., ~ i ; ! ! J J J 1
~iJ!uJj Ifl! 2 :I; = l'j 1
=l!l~~ 1!., I J I II
l ; J 6 ]" "! .t f 1 113
~i.lil ~H ills II s:
i)-i~];i :~i~ 1 S 1 j~
~I ill li;t i I I I~
.~E:2
~~
~~
-.J.~
~~
b i
ti ~ ~ ~~.,...
i ~ ~ II 00 0.
~E ;..
~ ~
)-~ ~:l
~: ~~
~f:~!
W5i:l:!~;;'
~~~iE.
~
.l[Z I
~i~~ ~
~O::!llll"""
~~~~:~
~~~~2~
~:~~~~
\ l!
\\~ il
~ ~~~~p~' 'I i =
~ ~ ~ I ~ lid! i I
'" z r->~ ~ ~ 1~lln I i II
~ : j UJP ! D ~ I
10-
~o:
wZ
Q8
, 10-
oDU
::::J
(.")
CondenseIt TM
Page 13 Page ]5
1 COMMISSIONER STRANGE; our next item is 1 above, staff recollunends approval of this sup request. At
2 Item number 3B which is a Specific Use Pcnllit to allow gas 2 this tilne, I'd be happy to answer any questions. We do
3 well drilling in a floodway" proposed gas well develop men t 3 have the app licant present here if you have any questions
4 is loc,ated on Bonnie Brae south of Roselawn Drive ,^,ithin 4 for them.
5 Neighborhood Res idential 2 Zoning District. Mr. Mcnguita. 5 COMMISSIO~ER STRA~GE: Any questions of
6 r-..fR. ME~GL1TA: Good evening~ Chair. 6 staff? Thank you~ Mr. Menguita.
7 Me1nbers of the COlnlnission, the applicant is requesting an 7 MR. MENGU[TA: Thank you.
8 sup to allow gas well drilling and production wi thin a 8 COMMISSIO:-ffiR STRANGE: \ve t 11 now open the
9 flood plain. The site is zoned NR - 2. Pursuant to the 9 Pub lie I learing. Is the applicant here and do they wish to
10 Denton Development Code, Subsection 35.22.3.A gas well 1 0 speak?
11 drilling is pennitted by right within the NR-2 zoning 11 MR. COLEMA..'\: Good evening, Chair and
12 district. 12 Colmnission. My nallle is Bill Coleman. My address is 300
13 I-Io\vevcr, because the gas well" proposed gas 13 North Ehn Street in Denton~ Texas. Coleman Associates
14 well sites are located within the flood plain, pursuant to 14 Land Surveying has been retained by the applicant in this
15 Denton Developtnent Code Subsection 35.22.4.A gas well 15 matter to present this to the COlmnission. This is a very
16 drilling and production is allowed in a floodwa y if the 16 -- the en tire site is within the flood plain. The only
1 7 property owner has app lied for and received approval from 17 way to drill this is 10 go through thi s process . We have
18 the City Council for an sUP. The site is also within an 18 already submitted a gas well development plat to tile City.
19 en vironmen tal sensitive area as shown here on this map. 19 We have been over their comnlcnts . We don' t foresee any
20 Pursuant to the Denton Develop111ent Code 35.22.5.A.8, a 20 problems with what v-letre doing. As far as tIle gas \veil
21 Watcrshed Protection Pennit is required for locating a gas 21 develoPlnent plat goes, we just need your pcnnission to go
22 well within an environnlental sensitive area. 22 fonvard. And to do that, we need this sUP. so that's v..,hy
23 Quinton lIicks of the watershed protection 23 we're here. If you have any questions rll be glad to
24 as well as Dr. Kenneth Banks of the Waste Water 24 answer thelli rather than go into a long presentation at
25 Administration have reviewed this sUP and a detailed 25 this tirne.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Page 14
environlnental assessment will be perfonned as part of the 1
Watershed Protection Pennit which the applicant will be 2
applying for in conjunction with his gas well plat 3
application. 4
With the is sua nee of a Watcrshed Protection 5
Pertnit; compliance with the erosion control standards set 6
forth by that pennit as well as cOlnpliance with Subchapter 7
35.22 which sets the regulations for gas v./ell development 8
~- r m SOrry1 gas well drilling and prod uction~ and als 0 9
cOlnpliance with Subchapter 35.19 that deals with drainage 10
standards again because it is wit11in the Dood plain. And 11
also cOlnpliance with provisions of Chapter 30, \\,Thich is 12
the flood prevention and protection chapter in our 13
Municipal Code. This sUP request is in cornpliance with 14
the Denton Plan. 15
In addition, pursuant to Subsection 16
35.6.4.B~ a Specific Use Pcnnit shall only be issued if 17
all of the conditions have been met as you see in your 18
backup and the applicant has met all seven conditions. 19
Notifications were sent out wi thin the 200 20
notification area -- I'm sorry, 200 feet notification area 21
as well as courtesy notices to residents of property 22
owners within the 500 notification area. As of today we 23
have not received any response to those notifications. 24
Based on the analysis and findings listed 25
Page ]6
COMMISSIONER STRANGE~ AnY questions of the
applicant? I probably only have two, Mr. ColClnan.
MR. COLEMAN; okay.
COMMISSIONER STRANGE: since thi s entire
site is wi thin a flood plain, and this Cornmis sian \-\forked
extens ively on the gas well ordinances last year or the
year before~ one thing we were concerned a bout was the
pas sibility that any flooding could invade or roll over to
an y of your water storage tanks and cause contamination of
the watershed. Is there n are you addressing that or is
that sOlnething you've worked --
MR. COLE!'vIAN: Yes, we \vill. We will
address that with the gas well development plat. The
requireInent is that the containlnent be above the base
flood elevation and that the containment area contain
evcrytlling that will be in the tank so there won r t be any
spillage out in case the tanks leak. There should not be
any incursion in to as long as the flood waters mnain
within the des ignated BFE elevation. Shou ld a greater
flood occur, we have no control over that, have no idea
\vhat will happen. But I think incursion of flood waters
into the ga s well tanks will be the lea s t of our worries
if tha t should happen.
COMMISSIONER STRA.NGE~ And that base flood
elevation, is it based on a 100-year flood?
PLANNING & ZONING REGULAR SESSION, JANUARY 24, 2007
Page 13 - Page 16
CondenseIt TM
Page 17 Page 19
1 MR. COLE~A~: Yes, sir. Bas:ed on a 1
2 IOO-year flood and it's published by FErvt~ on the flood 2
3 insurance rate maps and thaf s v.,rhat we go by. In the City 3
4 Ordinances, they do have free board requirements, and Vle 4
5 ,"rill meet thezn. 5
6 COMMISSIO:N"ER SIR1\... '\~GE: okay. And the other 6
7 ques tion I had was on tree preservation. It says here 7
8 you're going to cOlnply with tree preservation. To what 8
9 extent -- 9
10 MR. COLEMAl':: Yes, we will. There are only 10
11 a few trees he didn't show on here. We're asking for the 11
12 entire site. There are t\Vo drill sites. One of the drill 12
13 sites will have a few trees to be fetnovcd. Overall the 13
14 en tire site will far exceed the tree expectations and any 14
15 mitigation required for those few trees that are retnovcd 15
16 will definitely be taken care of at the tilue of pennit. 16
17 COMMISSIONER STRANGE: okay. Any lnore 17
18 questions of the applicant? Thank you very much. 18
19 MR. COLEMAN: Thank you very much. 19
20 COMMISSIONER STRASGE: Is there anyone else 20
21 here who \vishes to speak on this iteJ.n? We have no cards. 21
22 We will nov./ close the public hearing. Do \ve have a motion 22
23 on this i teIn? 23
24 COMMISSIO~ER ANDERSON: SO 1110Ved. 24
25 COMMISSIONER STRANGE: We have a motion by 25
Page 18 Page 20
1 Ms. Anderson. Do we have a second? 1
2 COYlMISSIOXER LYKE: second. 2
3 COMMISSIONER STRA.NGE: And a second by Dr. 3
4 Lyke. We have a motion and a second. Any discussion? 4
5 Please, vote. Iteln passes 7-0. 5
6 6
7 7
8 8
9 9
10 10
11 11
12 12
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
22 22
23 23
24 24
25 25
PLANNING & ZONING REGULAR SESSION, JANUARY 24, 2007
Page 17 - Page 20
AGENDA INFORMATION SHEET
AGENDA DATE: March 6,2007
DEPARTMENT: Tax
ACM:
Jon Fortune
tf
SUBJECT
Consider for approval an ordinance authorizing the Mayor or his designee to enter into an
Interlocal Agreement with Denton County for the County to provide property tax billing and
collection services for the City of Denton and to repeal all ordinances to the extent of conflict
therewith (the split-payment option for payment of taxes); and providing an effective date.
BACKGROUND
The City of Denton Tax Office monitors 37,486 property tax accounts. This includes updating
ownership records, changing levy amounts, mailing of current and delinquent statements,
answering tax questions, as well as, collecting and posting payments. Currently, all billing
efforts are conducted through the City Tax Office.
On a daily basis staff responds to requests for information by citizens, other tax entities, and tax
services. In addition, staff is responsible for updating and processing mowing and paving liens,
filing and releasing mobile home liens, updating confidential accounts, preparing supplemental
roll changes to the city tax rolls as provided by the DCAD, ensuring compliance of the Tax
Department activities with State Law, and processing tax refunds. Tax Statements are processed
and mailed in October, February, and May. Additionally, supplemental statements are mailed
monthly and over-65 courtesy statements are mailed quarterly. Tax staff is also responsible for
working with the tax collection attorney on necessary legal action for delinquent tax accounts
and for performing tax analysis.
Collection efforts are conducted through the Internet, over-the-counter (OTC), and mail. Mailed
payments are processed by the Tax Office, while OTC transactions are processed by the Utilities
Cashiering Unit.
Historical and Trend Analysis
Currently all taxpayers that pay City of Denton taxes also pay taxes to Denton County (County),
as well as the majority of Denton Independent School District (DISD) taxpayers. The Denton
County Tax Office currently bills and collects taxes for the County and the DISD. The City
maintains a separate tax office for tax billing and collections. The City Council has requested
information as to the feasibility of consolidating City tax collections with the County. Staff has
been working with the County Tax office to obtain comparison data for each entity. The
following is a 5-year comparison of collection rates for the three entities, including a 5-year
average and the cumulative impact had the County collected the City's taxes the last 5 years
assuming the County's collection rate and the DISD rate.
Collection Rate History
5-Year Cumulative
Entitv 2001 2002 2003 2004 2005 Average Impact
City of Denton 98.26% 98.57% 98.47% 98.33% 98.70% 98.47% $
Denton County 98.24% 98.53% 98.69% 98.82% 98.58% 98.57% $ 198,127
Denton ISD 97.69% 98.25% 98.34% 98.52% 98.56% 98.27% $ (208,725)
ISSUES
In reviewing the process of billing and collection of property taxes, staff has identified several
key points that need to be considered before consolidation of tax billing and collection services
with the County can be determined.
. A decision to consolidate the Tax department would need to be made in March. This
would enable the City and County to convert historical data, notify the Denton Central
Appraisal District of the change, and allow the County the opportunity to add needed
resources during its budget process.
. The City currently allows a split payment option for payment of taxes. This allows a
person to pay one-half of the current taxes amount before December 1 and remaining
one-half of the taxes without penalty or interest before July 1 of the following year. The
City of Denton originally approved the split payment option in 1966, with amendments in
1989. For FY 2005-06, this option costs the city an estimated $1,717 in lost investment
revenue. There were 79 accounts that took advantage of the split payment option, which
resulted in $62,203.09 in collections being postponed to a later date. Because the
County does not allow the split payment option the City would need to rescind the option
if the decision is made to consolidate collections.
Processes
. The County's goal is to have statements mailed by October 20. This is consistent with
the City's current practice.
. Collections are sent daily via ACH to the City from October 1 - March 31 and on
Wednesdays and the last day of the month from April 1 - September 30.
. All outstanding property tax payments would be transferred to the County and maintained
in their system.
. The County currently offers the same payment options as the City. Payments are
conducted through the Internet, over-the-counter, and mail. Credit card fees are paid by
the cardholder and not absorbed by the entity.
. Delinquent taxes are turned over to each entity's own tax collection attorney, therefore
the City would keep its current contract with Sawko & Burroughs.
Other Issues
. The City purchased its current tax system from Spindlemedia, Inc in 2001. The total cost
of the system was $146,000 (cash).
o Annual maintenance $19,000
o Annual depreciation on the system is $18,250/year for eight years.
. Depreciation is recognized as a cost recovery component for the possible
future purchase cost of new software.
. One tax statement consisting of all jurisdictions.
o Advantage - Taxpayers would get one statement and make one payment, as well
as, easily compare the tax rates for all entities.
o Disadvantage - If one taxing entity increased its tax rate and the City maintained
or lowered its rate, the positive impact of the City could be overshadowed by the
increase of another jurisdiction.
. Other issues include lack of accessibility to tax records by City departments, may reduce
report availability and timeliness.
Cost Analvsis
The following is a cost analysis comparing outsourcing tax billing and collections with in-house
provided services. The annual savings the first year are estimated to be $73,525 based on FY
2006-07 budget data. Additional savings of $19,000 would be realized when the maintenance on
the current system is discontinued. The tax system cost includes three components:
Annual maintenance
Web payment access maintenance
Depreciation
$19,000
2,771
18~250
$40,021
Web payment access maintenance would be eliminated for FY 2007-08. Staff would
recommend continuing some level of system maintenance through FY 2007-08 for backup and
conversion purposes. Though the tax system was paid with cash, staff has recognized
deprecation in the cost analysis for possible purchase of a new system or upgrades in future years
if tax collections are maintained by the City. Because Tech Service charges are based on prior
year activity, there would be an additional year support cost. The savings in future years are
estimated to be $10,000 - $15,000.
COLLECTION COST COMPARISON
Fiscal Year 2006-2007 Budget
County Billina Rate
Statement Preparation
October Billing
October Mortgage Billing
Monthly Supplemental Billing
Statements
(FY2005-06 Actuals)
34,090
13,145
4,785
$ 0.67
$ 0.67
$ 0.44
February Billing
May Billing
$ 0.67
$ 0.67
2,649
3,488
City of Denton Onaoina Cost
Other Expenses
Personal Services
Tax Analyst II
Tax Analyst I (1)
Postage (mowing/misc. liens)
Copy Charges
Print Charges
Supplies
Commercial Insurance
Self Insurance Premium
Transfers & Services
Tech Services Transfer
Tax System (includes system depreciation) (2)
Tax Analysis, Laserfiche, Computers, etc.
Customer Service Transfer
Tax Transactions
Services (phones, advertising, licenses, etc.)
Transition Cost
Programming Fee
Total Other Expense
Total Expenditures
FOREGONE REVENUE (Opportunity Cost)
Split Payment Option-lost interest (increased revenue)
Interest Income (lost revenue)
Tax Roll Processing Fee (lost revenue)
Tax Certificates (lost reven ue)
Net Foregone Revenue
Net Total Cost
Tax Office Budget Tax Office Budget
with County with Current
Consolidation Utility Customer
of Tax Billing Service
& Collections Collections
$ 22,840
8,807
2,105
1,775
2,337
$ 37,865 $ -
59,115 59,115
53,358
5,000 13,823
2,000 3,063
- 3,229
4,000 5,300
1,679 1,679
868 868
19,000 40,021
33,602 38,627
39,655
8,051 19,638
5,000
1,000
$ 139,315 $ 278,376
$ 177,180 $ 278,376
$ (1,717)
$ 18,698
9,400
1,290
$ 27,671 -
$ 204,851 $ 278,376
(1 )
If tax collections are outsourced, one FTE would be eliminated (currently vacant)
(2)
If tax collections are outsourced maintenance would continue to be paid for
FY 2007-08.
OPTIONS
1. Approve the Interlocal Agreement with Denton County for the billing and collection of
property taxes.
2. Not approve the Interlocal Agreement with Denton County for the billing and collection of
property taxes and to maintain a separate tax office for the City.
RECOMMENDATION
The current analysis estimates cost savings in the first year of $73,525. There is potential for
savings in future years if the decision is made to eliminate support for the current tax software.
Based on the information presented above, staff is recommending that the property tax billing
and collection functions be consolidated with Denton County through an Interlocal Agreement
for Tax Year 2007.
PRIOR ACTION/REVIEW (Council.. Boards.. Commissions)
The Audit and Finance Committee received a presentation on February 19,2007 and recommend
approval (3-0).
FISCAL INFORMATION
Estimated savings the first year are $73,525.
EXHIBITS
1. Ordinance
2. Interlocal Agreement
Respectfully submitted,
~...... p6r.' ,-'~ .
. . -
~- .
is:: ... .~
- ..;
~
Jon Fortune
Assistant City Manager
Prepared by:
...d~ 0.. ~ ,. .... ,
Gary A. Calmes
Interim Treasury & Tax Manager
S:\Our Documents\Ordinances\07\Denton County Property Tax Interlocal Agreement.DOC
ORDINANCE NO.
AN ORDINANCE AUTHORIZING THE MAYOR OR HIS DESIGNEE TO ENTER
INTO AN INTERLOCAL AGREEMENT WITH DENTON COUNTY FOR THE
COUNTY TO PROVIDE PROPERTY TAX BILLING AND COLLECTION
SERVICES FOR THE CITY OF DENTON AND TO REPEAL ALL ORDINANCES
TO THE EXTENT OF CONFLICT THEREWITH (THE SPLIT -PAYMENT OPTION
FOR PAYMENT OF TAXES); AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City and Denton County (the "County") desire to enter into an
Interlocal Agreement for the County through its duly elected tax assessor-collector to act
as tax assessor and collector for the City property tax collection; and
WHEREAS, the County is well equipped to perform this service; and
WHEREAS, the City Council finds that the Interlocal Agreement is in the public
interest; NOW THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings and recitations contained in the preamble of this
ordinance are incorporated herein by reference.
SECTION 2. The Mayor, or his designee, is hereby authorized to execute the
Interlocal Agreement of behalf of the City. The City Manager, or his designee, is hereby
authorized to carry out the rights and duties of the City under the Interlocal Agreement
including the expenditure of funds provided for therein.
SECTION 3. This ordinance shall become effective immediately upon its
passage and approval.
PASSED AND APPROVED this
day of
, 2007.
PERRY R. McNEILL MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
BY:
INTERLOCAL COOPERATION AGREEMENT - TAX COLLECTION
THIS AGREEMENT is made and entered into this
day of
2007, by and between DENTON COUNTY, a political subdivision of
the State of Texas, hereinafter referred to as "COUNTY," andt the CITY OF DENTON, Denton
County, Texas, also a political subdivision of the State of Texas, hereinafter referred to as
tlMUNICIP ALITY."
WHEREASt COUNTY and MUNICIPALITY mutually desire to be subject to the
provisions. of V,T.C:A. Government Code, Chapter 791, the Interlocal Cooperation Act, and
V~T.C.A., Tax Code, Section 6.24; 'and
WHERE~S, MUNICIPALITY has the authority to contract with the COUNTY for the
COUNTY to act as tax assessor and collector for MUNICIP ALITY and COUNTY has the
authority to so act; -
NOW THEREFORE; COUNTY and MUNICIPALITY, for and in consideration of"
the mutual promises, covenants.. and agreements herein contained, do agree as follows:
I.
The effective date of this Agree~ent shall be the 15t day of October, 2007. The term of
this Agreement shall be for a period of one year.. from October I, 2007, to and through
September 30, 2008, This Agreement shall be automatically renewed for an additional one (1)
. -
:year term at the discretion of the COUNTY and MUNICIPALITY, unless written notice of
. '-
termination is provided by the terminating party to the other party prior to one hundted-fifty
(150) days 6fthe expiration date of the initial term of the Agreement
Page 1 of 10
II.
For the purposes and consideration herein stated and contemplated, COUNTY shall
provide the following necessary and appropriate services for MUNICIPALITY to the maximum
extent authorized by this Agreement, without regard to race, sex, religion, color, age, disability,
or 'national origin:
- 1. COUNTY, by and through its duly elected tax assessor-collector, shall serve as
tax assessor-collector for MUNICIPALITY for ad valorem tax collection for tax year 2007, and
each tax' year for the duration of this Agreement COUNTY agrees to perform all necessary ad
valorem ,assessing and collecting duties for MUNICIPALITY and MUNICIPALITY does
hereby expressly authorize COUNTY to do and perform all acts necessary and proper to assess
and collect taxes for MUNICIPALITY. COUNTY agrees to collect base taxes, penalties,
interest, and attorney's fees~
2. CO,UNTY agrees to prepare and mail all' tax statements; provide monthly
collection reports 'to MUNICIPALITY; prepare tax certificates; develop and'maintain both
. current and delinquent tax rolls; meet the requirements of Section 26.04 of the Texas Tax Code;
and to develop and maintain such other records and forms as are necessmr or required by State
law, rules, or regulations.
3. COUNTY further agrees that it will calculate the effective tax rates and rollback
tax rates for MUNICIPALITY and that such calculations will be provided at no additional cost
to MUNICIPALITY~ The infonnation concerning the effective and rollback:tax rates will be.
published in the form prescribed by the Comptroller of Public Accounts of the State of Texas,'
and as required by Section 26.04 of V.T.C.A. Tax Code~ DISTRICT shall notify tax assessor-
collector at least 7 days before DISTRICT wishes publication of forms specified in this section..
Page 2 of 10 -
It is understood. and agreed by the parties that the expense of publication shall be, borne by
MUNICIPALITY and that COUNTY shall provide MUNICIPALITY's billing address to the
newspaper publishing the effective and rollback tax rates.
. .
4., COUNTY agrees, 'upon request, to offer guidance. and the necessary forms fOf.
posting notices of required hearing and' quarter-page notices as. required by Sections 26.05 and
26.06 of V"T,C.A. Tax Code, if DISTRICT requests such' 7 days in advance.. Should
MUNICIPALITY vote to increase its tax rate'above the rollback tax rate, or more than three
percent (3%) above the effective tax rate, whichever is l~wer, (or other limits required by current
legislation) the required publication of quarter-page notices shall be the responsibility of
MUNICIP ALITY.
5.. COUNTY agrees to develop and maintain written policies and procedures of its
operation. COUNTY further agrees to make available full information about the operation of the
County Tax Office to MUNICIPALITY, and to promptly furnish written reports to keep'
MUNICIP ALITY informed of all financial information affecting it
6. MUNICIPALITY agrees to promptly deliver to COUNTY all records that it has
accumulated and developed in the assessment and collection of taxes, and to cooperate in
furnishing or locating any other information and records needed by COUNTY to perform its"
duties under the terms and conditions of this Agreement
7.. COUNTY agrees to allow an audit of the tax records of MUNICIPALITY in
COUNTY'S possession during normal working hours with at least 48 hours advance, written,
notice to COUNTY. The expense of any and all such audits shall be paid by MUNICIPALITY.
A copy of any and all such audits shall be furnished to COUNTY.
Page 3 of 10
8~ If required by MUNICIPALITY, COUNTY agrees to obtain a surety bond for
the County Tax Assessor/Collector. Such bond will 'be conditioned upon the faithful
performance of the Tax Assessor/Collector's, lawful duties, will be made payable to
MUNICIP ALITY and in an amount deterinined by the governing body of MUNICIPALITY.
The premiwn for any such bond shall be borne solely by MUNICIPALITY.
9. COUNTY agrees that it will place quarter-page advertisements in newspapers
, ,
serving Denton County in January, 2008, as a reminder that delinquent tax penalties will apply to
all assessed 'taxes which are not paid by January 31, 2008. The advertisements will be printed
two times in each paper between January 5th and January 25th.
10. COUNTY agrees that it will ,fax, mail or post to a secure website collection
reports to MUNICIPALITY listing current taxes, delinquent taxes, penalties and interest on a
daily basis between October 1~ 2007 and March 31,2008 and on a weekly basis between Aprill,
- 2008 and September 30, 2008; provide monthly Maintenance and Operation (hereinafter referred
to as "MO"), and Interest and Sin..King (hereinafter referred to as "IS") collection reports; provide
monthly recap reports; and provide monthly attorney fee collection reports.
11. MUNICIPALITY retain's its right to select its own delinquent tax collection
attorney and COUNTY agrees to reasonably cooperate with the attorney selected by
MUNICIPALITY in the collection of delinquent taxes and related activities.
III.
COUNTY hereby designates the-Denton County Tax Assessor/ Collector to act on behalf
of the County Tax Office and to serve as Liaison for COUNTY with MUNICIPALITY. The
County Tax Assessor/Collector, and/or his/her de~ignee, shall ensure the performance of ,all
duties and obligations of COUNTY; shall devote sufficient time and attention to the execution of
Page 4 of 10
'. said duties on behalf of COUNTY in full compliance with the terms and conditions of this
Agreement; and shall provide immediate and ~irect supervision of the County Tax Office
employees, agents, contractors, subcontractors, and/or laborerst if any, in the furtherance of the
purposes, terms and conditions ~f this Agreement for the mutual benefit of COUNTY and
MUNICIP ALITY.
IV.
COUNTY accepts responsibility for the acts, negligence, and/or omissions related to
property tax service of all COUNTY employees and agents, sub-contractors and lor contract
laborers, and for those, actions of other persons doing work under a contract or agreement with
COUNTY to the extent allowed by law.
v.
MUNICIP ALITY accepts responsibility for the acts, negligence, and/or omissions of all
MUNICIPALITY employees and agents, sub-contractors and/or contract laborers, and for those
of all other persons doing work ll..l1der a contract or agreement with MUNICIPALITY to the
extent allowed by law.
VI~
MUNICIPALITY understands and agrees that MUNICIPALITY, its employees,
servants, agents, and representatives shall at no time represent themselves to be employees,
servants, agents, and/or representatives of COUNTY. 'COUNTY understands and agrees that
, COUNTYt its employees, servants, agents, and representatives shall at no time represent
themselves to be employees, servants, agents, and/or representatives of MUNICIPALITY.
Page 5 of 10
VII.
For the services rendered during the' 2007 tax year, MUNICIP ALITY agrees to .pay
COUNTY for the receipting, bookkeePing, issuing, and mailing of tax statements as follows:
1. The curient tax statements will be mailed on or about October 20th or as soon
thereafter as practical. The fee for this service will be Sixty-Seven Cents ($.67) per statement. If
MUNICIPALITY does not adopt a tax rate before September 29, 2007, the, tax rate for
MUNICIPALITY will be set at the lower of the effective tax rate calculated for that year or the
tax rate adopted by MUNICIPALITY for the' prece'ding tax year. Before the fifth day after
establishment of a tax rate under this provision, MUNI CIP ALITY must ratify the applicable tax
rate in the manner required by Article 26.05(b) of the Texas Tax Code~
2. An additional notice will be sent during the month of March following the initial
mailing provided that MUNICIPALITY has requested such a notice on or before February 28th~
The fee for this service will be charged at the existing first class letter rate set by the United
States Postal Service (currently $.39) plus a $.O~ processing fee per statement.
3. At least 30 days, but no more than 60 days, prior to April 1st, and following the
initial mailing, a delinquent tax statement meeting the requirements of Section 33.11 of. the
Texas Property Tax Code will be mailed. The fee for this service will be SixtY-Seven Cents
($~67) per statement
4'. At least 30 days, 'but no more than 60 days, prior to July 1 st, and following the
initial mailing, a delinquent tax statement meeting the requirements of Section 33.07 of the
Texas Property Tax Code will be mailed.. The fee for this service will be Sixty-Seven Cents
($.67) per statement.
Page 6 of 10
5 ~ In event of a successful rollback election which takes, place after tax. bills for
MUNICIPALITY have been mailed, MUNICIPALITY agrees to pay COUNTY a
programming charge of $l,OOO~OO~ -An additional postage charge, at the first class letter rate
(currently $.39) plus a $.05 processing fee per corrected statement, to comply with Property Tax
Code Section 26~07 (f), will be ,charged. When a refund is required per Property Tax Code
Section 26~07 (g), a $~05 processing fee per check will be charged, in addition to the corrected
statement mailing costs. Issuance of refunds, in th~ event of a successful rollback election, will
be the responsibility of the COUNTY. DISTRICT will be billed for the refunds, postage and
processing fees~
6. MUNICIPALITY understands and agrees that COUNTY will pill
MUNICIPALITY ~ollowing each mailing for which charges 'are permitted. Payment is due
upon receipt oft~e statement~
7. MUNICIPALITY further understands and agrees that COUNTY (at its sole
, discretion) may increase or decrease the amounts charged to MUNICIPALITY for any renewal
year of this Agreement, provided that COUNTY gives written notice to MUNICIPALITY sixty
(60) days prior to the expiration date of the initial term of the Agreement..
VIII.
COUNTY agrees to remit all taxes, penalties, and interest collected on
MUNICIPALITY's behalf and to deposit such funds into the MUNICIPALITY's depositories
as designated:
1. For deposits of tax, penalties, and interest, payment shall be by wire transfer or by
check sent by mail to MUNICIPALITY's accounts only, and segregated into the appropriate
MO and IS accounts.
Page 7 of 1 0
x. -
This Agreement represents the entire agreement between MUNICIPALITY and
COUNTY and supersedes all prior negotiations, representations, and/or agreements~ either
written or oral. This Agreement may be amended .o~ly by written instrument signed by the
governing bodies. of both MUNICIPALITY and COUNTY or those authorized to sign on
behalf of those governing bodies.
Page 8 of 10
XI.
Any and all written notices required to be given under this Agreement shall be delivered
or mailed to the listed addresses:
COUNTY:
County Judge of Denton County
11 0 West Hickory _'. -
Denton, Texas 76201
Telephone 940-349-2820
MUNICIPALITY:
The City of Denton
215 E~ McKinney ,- .
Denton, TX 76201
940-349-8535
Contact: Jon Fortune, Assistant City Manager
XII~
MUNICIPALITY hereby designates
. to act on behalf ,of
MUNICIPALITY, and to serve" as Liaison for MUNICIPALITY to ensure the performance of
all duties + and obligations of MUNICIPALITY as stated in this Agreement.
MUNICIPALITY's designee shall devote sufficient time and attention to the execution of said
duties on behalf of MUNICIP ALI1;Y in full compliance with the terms and conditions of this
Agreement; shall provide immediate and direct supervision of the MUNICIPALITY employees,
agents, contractors, subcontractors, and/or laborers, if any, in the furtherance of the purposes,
terms and conditions of this Agreement for the mutual benefit of MUNICIPALITY and
COUNTY.
Page 9 of 10
XIII.
In the event that any portion of this Agreement shall be found to be contrary to law, it is
the intent of the parties that the remaining portions shall remain valid and in full force and effect.
to the extent possible.
XIV.
The undersigned officers and/or agents of the parties are the properly authorized officials
and have the necessarr authority to execute this agreement on behalf of the parties, Each. party
hereby certifies to the. other that . any resolutions necessary for this Agreement have been duly,
passed and are now'in full force and effe~t.
Executed in duplicate originals this,-
day of
2007.
COUNTY
MUNICIP ALITY
Denton CoUnty
1- 1 0 West Hickory
Denton; Texas 76201
The City of Denton
215 E~ McKinney
Dent~n, TX 76201
BY:
Honorable Mary Horn
Denton County Judge
, ',. BY:
. Title:
A TrEST:
ATTEST:
BY: .
Cynthia Mitchell,
Denton County -Clerk
BY: -
.Name
Title'
APPROVED FORM AND CONTENT:
APPROVED AS TO FORM:
Steve Mossman
Denton County
Tax Assessor/Collector
Kim Gilles
Denton County
, ... 'Assi~tant ,District Attorney
Page IO.of 10
APPROVED AS TO FORM: '
CITY ATTORNEY
CITY OF DENTON. ~~
8Y:~
AGENDA INFORMATION SHEET
AGENDA DATE: March 6,2007
DEPARTMENT: City Manager's Office
CM: George Campbell, City Manager
SUBJECT
Consider nominations/appointments to Boards, Commissions and Committees.
BACKGROUND
Andy Shelton has resigned from the Traffic Safety Commission. This is a nomination for
Council Member Heggins.
If you require any further information, please let me know.
Respectfully submitted:
Jennifer Walters
City Secretary
S : \Agenda Items\Board-Commission vacancies.doc