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02-23-2010 (City Council) Agenda Packet Wylie City Council CITOF WYLIE NOTICE OF MEETING Regular Meeting Agenda February 23, 2010 — 6:00 pm Wylie Municipal Complex - Council Chambers 2000 Highway 78 North Eric Hogue Mayor M. G. "Red" Byboth Mayor Pro Tern David Goss Place 1 Kathy Spillyards Place 3 Bennie Jones Place 4 Rick White Place 5 Carter Porter Place 6 Mindy Manson City Manager Richard Abernathy City Attorney Carole Ehrlich City Secretary In accordance with Section 551.042 of the Texas Government Code, this agenda has been posted at the Wylie Municipal Complex, distributed to the appropriate news media, and posted on the City website: www.wylietexas.gov within the required time frame. As a courtesy, the entire Agenda Packet has also been posted on the City of Wylie website: www.wylietexas.gov. The Mayor and City Council request that all cell phones and pagers be turned off or set to vibrate. Members of the audience are requested to step outside the Council Chambers to respond to a page or to conduct a phone conversation. The Wylie Municipal Complex is wheelchair accessible. Sign interpretation or other special assistance for disabled attendees must be requested 48 hours in advance by contacting the City Secretary's Office at 972.442.8100 or TD 972.442.8170. CALL TO ORDER Announce the presence of a Quorum. INVOCATION & PLEDGE OF ALLEGIANCE PRESENTATION • Presentation of funds to the City of Wylie by Jerry Hoagland, Collin County Commissioner: • 2003 Bond Project—$2,302,110.93 for FM 1378 • 2007 Bond and Open Space Project — $267,500.00 for Community Park Rehabilitation Project February 23,2010 Wylie City Council Regular Meeting Agenda Page 2 of 3 • 2007 Bond Project with 2009 Funding - $500,000.00 for McMillan Road(Park Blvd.)from East of McCreary to FM1378 • 2008 Funding - $540,000.00 for Ballard Street from Alanis to County Line Road • Review and place on file the 2009 Wylie Police Department Annual Traffic Contact Report. (J. Duscio, Police Chief) CITIZENS COMMENTS ON NON-AGENDA ITEMS Residents may address Council regarding an item that is not listed on the Agenda. Residents must provide their name and address. Council requests that comments be limited to three (3) minutes. In addition, Council is not allowed to converse, deliberate or take action on any matter presented during citizen participation. CONSENT AGENDA All matters listed under the Consent Agenda are considered to be routine by the City Council and will be enacted by one motion. There will not be separate discussion of these items. If discussion is desired, that item will be removed from the Consent Agenda and will be considered separately. A. Consider, and act upon, approval of the Minutes of the February 9, 2010 Regular Meeting of the Wylie City Council. (C. Ehrlich, City Secretary) B. Consider, and place on file, the Monthly Revenue and Expenditure Reports for the City of Wyie for the period ending January 31,2010. (L. Vaughn, Finance Director) C. Consider, and place on file, the Monthly Revenue and Expense Report for the Wylie Economic Development Corporation as of January 31, 2010. (S. Satterwhite, Economic Development Executive Director) D. Consider, and act upon, Resolution No. 2010-09(R) amending Resolution No. 2010- 02(R) to correct the reference to a provision in the Texas Administrative Code in the last recital; and providing for an effective date. (M. Manson, City Manager) REGULAR AGENDA General Business Presentation • Presentation of the City of Wylie Comprehensive Annual Financial Report (CAFR) for FY 2008-2009. (Weaver and Tidwell, LLP, Audit Firm) 1. Consider, and act upon, acceptance of the Comprehensive Annual Financial Report (CAFR) for FY 2008-2009. (L. Vaughn, Finance Director) Executive Summary The City Charter in Article VII, Municipal Finance, Section 13: Independent Audit requires that at the end of the fiscal year an independent audit be made of all accounts of the City by a certified public accountant. In compliance with the City Charter, our outside auditor, Weaver and Tidwell, L.L.P. has performed an audit as of September 30,2009. February 23,2010 Wylie City Council Regular Meeting Agenda Page 3 of 3 2. Consider, and act upon, Resolution No. 2010-10(R) authorizing the City Manager to Execute the Wholesale Water Supply Contract ("Contract") by and between the City of Wylie and the City of Parker, and to Execute Exhibit "D" to the Contract which is the Interlocal Agreement for Disconnection of Parker Water Service Due to Nonpayment of City Sewer Charges by and between the City of Wylie and the City of Parker. (M. Sferra, Public Services Director) Executive Summary Approximately four years ago, the City of Wylie and the City of Parker sought to update their respective Water and Wastewater Certificates of Convenience and Necessity(CCN), and they have been coordinating with the Texas Commission on Environmental Quality to accomplish that task. A CCN defines the service area in which a utility provider may provide services. Both Wylie and Parker have agreed to the boundaries of their respective CCNs; however, Wylie currently provides potable water service to several customers located in the City of Parker's water CCN because Parker cannot provide the necessary water infrastructure at this time. 3. Consider, and act upon, Resolution No. 2010-11(R) evidencing support for a proposed senior assisted living community to be built in Wylie by the Sphinx Development Corporation. (R. 011ie, Planning Director) Executive Summary The applicant Sphinx Development Corporation is seeking to apply for Housing Tax Credits through the Texas Department of Housing and Community Affairs which would allow the rents to remain relatively low for the specified income restricted senior residents. The proposed Senior Living Facilities would be located south of Brown Street (F.M. 3412) and west of Westgate Way as is restricted to the head of household being 55 years of age or older. WORK SESSION • Discussion, input and direction with Holzman Moss and ArchiTEXAS regarding the new Municipal Complex Construction, to include: o Review/approval of designs and mock-ups for the custom light fixtures o Review/approval of final furniture changes o Review/approval of misc. construction items RECONVENE INTO REGULAR SESSION Take any action as a result from Work Session. ADJOURNMENT CERTIFICATION 1 certify that this Notice of Meeting was posted on this 19th day of February, 2010 at 5:00 p.m. as required by law in accordance with Section 551.042 of the Texas Government Code and that the appropriate news media was contacted. As a courtesy, this agenda is also posted on the City of Wylie website: www.wylietexas.gay. Carole Ehrlich,City Secretary Date Notice Removed it; Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: February 23, 2010 Item Number: Presentation Department: Police Department (City Secretary's Use Only) Prepared By: Chief John Duscio Account Code: Date Prepared: January 26, 2010 Budgeted Amount: Exhibits: Report by Dr. Del Carmen Subject Texas Senate Bill (SB 1074) requires police departments to collect traffic-related contact data and to report the contact data to their governing body every year, no later then March of the following year. Recommendation Discussion The 2009 Wylie Police Department Annual Traffic Contact Report meets and exceeds all requirements of SB 1074. Approved By Initial Date Department Director JD 01/26/ 0 City Manager I Page 1 of 1 The Wylie Police Department Annual Traffic Contact Report (2009) „.;-,,•:,*20,, - - , - 41141 Aro' , . it r 14 .4.% ,,,,,,„ DEL CARMEN,,, CONSULTING, 1...,,, C (I) Introduction Opening Statement January 18, 2010 Wylie City Council Wylie, Texas 76180 Dear Distinguished Members of the City Council, Racial profiling has been regarded as one of the most pressing themes currently affecting law enforcement agencies in the United States. In 2001, the Texas legislature, in an attempt to address the issue of racial profiling in policing, enacted the Texas Racial Profiling Law. Since 2001,the Wylie Police Department, in accordance with the law, has collected and reported traffic-related contact data for the purpose of identifying and addressing (if necessary) areas of concern regarding racial profiling practices. During the past legislative session,the Racial Profiling Law was modified and new requirements are now in place. These will be represented, as prescribed by the law, in the 2010 racial profiling report due March 1, 2011. In this particular report, you will find three sections that contain information on traffic-related contact data. In addition,when appropriate, documentation is also a component of this report, aiming at demonstrating the manner in which the Wylie Police Department has complied with the Texas Racial Profiling Law. In section 1, you will find the table of contents in addition to the Texas Senate Bill (SB 1074)which later became the Texas Racial Profiling Law. Also, in this section, a list of requirements relevant to the Racial Profiling Law as established by TCLEOSE(Texas Commission on Law Enforcement Officer Standards and Education) is included. In addition, you will find, in sections 2 and 3, documentation which demonstrates compliance by the Wylie Police Department relevant to the requirements as established in the Texas Racial Profiling Law. That is, documents relevant to the implementation of an institutional policy banning racial profiling,the incorporation of a racial profiling complaint process and the training administered to all law enforcement personnel, are included. The last section of this report provides statistical data relevant to contacts, made during the course of traffic stops, between 1/1/09 and 12/31/09. This information has been analyzed and compared to data derived from the U.S. Census Bureau's Fair Roads Standard and to traffic-based contact data collected between 2002 and 2008. The final analysis and recommendations are also included in this report. I am hopeful that the findings presented in this report serve as evidence of the Wylie Police Department's commitment to comply with the Texas Racial Profiling Law. Sincerely, Alex del Carmen, Ph.D. Del Carmen Consulting, LLC Table of Contents Table of Contents (I) Introduction a) Opening Statement b) Table of Contents c) TCLEOSE Guidelines d) The Texas Law on Racial Profiling(S.B. 1074) (II) Responding to the Texas Racial Profiling Law a) Institutional Policy on Racial Profiling b) Educational Campaign Relevant to the Complaint Process— Addressing Allegations of Racial Profiling Practices c) Racial Profiling Training of Law Enforcement Personnel d) Report on Complaints Filed Against Officers for Violating the Racial Profiling Law (includes outcome of investigation) e) Police (Traffic-Related) Contact Information Table (2009) f) Table Depicting Baseline Comparison(2009) g) Eight-Year Data Assessment(02-09) h) Analysis and Interpretation of Data(2009) (III) Summary a) Checklist b) Contact Information TCLEOSE GUIDELINES IGuidelines for Compiling and Reporting Data under Senate Bill 1074 Background Senate Bill 1074 of the 77th Legislature established requirements in the Texas Code of Criminal Procedure(TCCP) for law enforcement agencies. The Commission developed this document to assist agencies in complying with the statutory requirements. The guidelines are written in the form of standards using a style developed from accreditation organizations including the Commission on Accreditation for Law Enforcement Agencies (CALEA). The standards provide a description of what must be accomplished by an agency but allows wide latitude in determining how the agency will achieve compliance with each applicable standard. Each standard is composed of two parts: the standard statement and the commentary. 'The standard statement is a declarative sentence that places a clear-cut requirement, or multiple requirements, on an agency. The commentary supports the standard statement but is not binding. The commentary can serve as a prompt, as guidance to clarify the intent of the standard, or as an example of one possible way to comply with the standard. Standard 1 Each law enforcement agency has a detailed written directive that: • clearly defines acts that constitute racial profiling; • strictly prohibits peace officers employed by the agency from engaging in racial profiling; • implements a process by which an individual may file a complaint with the agency if the individual believes a peace officer employed by the agency has engaged in racial profiling with respect to the individual filing the complaint; • provides for public education relating to the complaint process; • requires appropriate corrective action to be taken against a peace officer employed by the agency who, after investigation, is shown to have engaged in racial profiling in violation of the agency's written racial profiling policy; and • requires the collection of certain types of data for subsequent reporting. Commentary Article 2.131 of the TCCP prohibits officers from engaging in racial profiling,and article 2.132 of the TCCP now requires a written policy that contains the elements listed in this standard. The article also specifically defines a law enforcement agency as it applies to this statute as an"agency of the state,or of a county,municipality,or other political subdivision of the state,that employs peace officers who make traffic stops in the routine performance of the officers' official duties." The article further defines race or ethnicity as being of "a particular descent,including Caucasian, African,Hispanic,Asian,or Native American." The statute does not limit the required policies to just these ethnic groups. This written policy is to be adopted and implemented no later than January 1,2002. Standard 2 Each peace officer who stops a motor vehicle for an alleged violation of a law or ordinance regulating traffic, or who stops a pedestrian for any suspected offense reports to the employing law enforcement agency information relating to the stop,to include: • a physical description of each person detained, including gender and the person's race or ethnicity, as stated by the person, or, if the person does not state a race or ethnicity, as determined by the officer's best judgment; • the traffic law or ordinance alleged to have been violated or the suspected offense; • whether the officer conducted a search as a result of the stop and, if so, whether the person stopped consented to the search; • whether any contraband was discovered in the course of the search, and the type of contraband discovered; • whether probable cause to search existed, and the facts supporting the existence of that probable cause; • whether the officer made an arrest as a result of the stop or the search, including a statement of the offense charged; • the street address or approximate location of the stop; and • whether the officer issued a warning or citation as a result of the stop, including a description of the warning or a statement of the violation charged. Commentary The information required by 2.133 TCCP is used to complete the agency reporting requirements found in Article 2.134. A peace officer and an agency may be exempted from this requirement under Article 2.135 TCCP Exemption for Agencies Using Video and Audio Equipment. An agency may be exempt from this reporting requirement by applying for the funds from the Department of Public Safety for video and audio equipment and the State does not supply those funds. Section 2.135(a)(2)states,"the governing body of the county or municipality served by the law enforcement agency,in conjunction with the law enforcement agency,certifies to the Department of Public Safety,not later than the date specified by rule by the department,that the law enforcement agency needs funds or video and audio equipment for the purpose of installing video and audio equipment as described by Subsection(a)(1)(A)and the agency does not receive from the state funds for video and audio equipment sufficient,as determined by the department,for the agency to accomplish that purpose." Standard 3 The agency compiles the information collected under 2.132 and 2.133 and analyzes the information identified in 2.133. Commentary Senate Bill 1074 from the 77th Session of the Texas Legislature created requirements for law enforcement agencies to gather specific information and to report it to each county or municipality served. New sections of law were added to the Code of Criminal Procedure regarding the reporting of traffic and pedestrian stops. Detained is defined as when a person stopped is not free to leave. Article 2.134 TCCP requires the agency to compile and provide and analysis of the information collected by peace officer employed by the agency. The report is provided to the governing body of the municipality or county no later than March 1 of each year and covers the previous calendar year. There is data collection and reporting required based on Article 2.132 CCP(tier one)and Article 2.133 CCP(tier two). The minimum requirements for"tier one"data for traffic stops in which a citation results are: 1) the race or ethnicity of individual detained(race and ethnicity as defined by the bill means of"a particular descent, including Caucasian,African,Hispanic,Asian,or Native American"); 2) whether a search was conducted,and if there was a search,whether it was a consent search or a probable cause search;and 3) whether there was a custody arrest. The minimum requirements for reporting on"tier two"reports include traffic and pedestrian stops. Tier two data include: 1) the detained person's gender and race or ethnicity; 2) the type of law violation suspected,e.g.,hazardous traffic,non-hazardous traffic, or other criminal investigation(the Texas Department of Public Safety publishes a categorization of traffic offenses into hazardous or non-hazardous); 3) whether a search was conducted,and if so whether it was based on consent or probable cause; 4) facts supporting probable cause; 5) the type,if any,of contraband that was collected; 6) disposition of the stop,e.g.,arrest,ticket,warning,or release; 7) location of stop;and 8) statement of the charge,e.g.,felony,misdemeanor,or traffic. Tier one reports are made to the governing body of each county or municipality served by the agency an annual report of information if the agency is an agency of a county,municipality,or other political subdivision of the state. Tier one and two reports are reported to the county or municipality not later than March 1 for the previous calendar year beginning March 1,2003. Tier two reports include a comparative analysis between the race and ethnicity of persons detained to see if a differential pattern of treatment can be discerned based on the disposition of stops including searches resulting from the stops. The reports also include information relating to each complaint filed with the agency alleging that a peace officer employed by the agency has engaged in racial profiling. An agency may be exempt from the tier two reporting requirement by applying for the funds from the Department of Public Safety for video and audio equipment and the State does not supply those funds[See 2.135(a)(2)TCCP]. Reports should include both raw numbers and percentages for each group. Caution should be exercised in interpreting the data involving percentages because of statistical distortions caused by very small numbers in any particular category,for example,if only one American Indian is stopped and searched,that stop would not provide an accurate comparison with 200 stops among Caucasians with 100 searches. In the first case,a 100%search rate would be skewed data when compared to a 50%rate for Caucasians. Standard 4 If a law enforcement agency has video and audio capabilities in motor vehicles regularly used for traffic stops, or audio capabilities on motorcycles regularly used to make traffic stops,the agency: • adopts standards for reviewing and retaining audio and video documentation; and • promptly provides a copy of the recording to a peace officer who is the subject of a complaint on written request by the officer. Commentary The agency should have a specific review and retention policy. Article 2.132 TCCP specifically requires that the peace officer be promptly provided with a copy of the audio or video recordings if the officer is the subject of a complaint and the officer makes a written request. Standard 5 Agencies that do not currently have video or audio equipment must examine the feasibility of installing such equipment. Commentary None Standard 6 Agencies that have video and audio recording capabilities are exempt from the reporting requirements of Article 2.134 TCCP and officers are exempt from the reporting requirements of Article 2.133 TCCP provided that: • the equipment was in place and used during the proceeding calendar year; and • video and audio documentation is retained for at least 90 days. Commentary The audio and video equipment and policy must have been in place during the previous calendar year. Audio and video documentation must be kept for at least 90 days or longer if a complaint has been filed. The documentation must be retained until the complaint is resolved. Peace officers are not exempt from the requirements under Article 2.132 TCCP. Standard 7 Agencies have citation forms or other electronic media that comply with Section 543.202 of the Transportation Code. Commentary Senate Bill 1074 changed Section 543.202 of the Transportation Code requiring citations to include: • race or ethnicity,and • whether a search of the vehicle was conducted and whether consent for the search was obtained. The Texas Law on Racial Profiling S.B. No. 1074 AN ACT relating to the prevention of racial profiling by certain peace officers. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Chapter 2, Code of Criminal Procedure, is amended by adding Articles 2.131 through 2.138 to read as follows: Art. 2.131. RACIAL PROFILING PROHIBITED. A peace officer may not engage in racial profiling. Art. 2.132. LAW ENFORCEMENT POLICY ON RACIAL PROFILING. (a) In this article: (1) "Law enforcement agency" means an agency of the state, or of a county, municipality,or other political subdivision of the state, that employs peace officers who make traffic stops in the routine performance of the officers' official duties. (2) "Race or ethnicity" means of a particular descent, including Caucasian, African, Hispanic, Asian, or Native American descent. (b) Each law enforcement agency in this state shall adopt a detailed written policy on racial profiling. The policy must: (1) clearly define acts constituting racial profiling; (2) strictly prohibit peace officers employed by the agency from engaging in racial profiling; (3) implement a process by which an individual may file a complaint with the agency if the individual believes that a peace officer employed by the agency has engaged in racial profiling with respect to the individual; (4) provide public education relating to the agency's complaint process; (5) require appropriate corrective action to be taken against a peace officer employed by the agency who,after an investigation, is shown to have engaged in racial profiling in violation of the agency's policy adopted under this article; (6) require collection of information relating to traffic stops in which a citation is issued and to arrests resulting from those traffic stops, including information relating to: (A) the race or ethnicity of the individual detained; and (B) whether a search was conducted and, if so, whether the person detained consented to the search; and (7) require the agency to submit to the governing body of each county or municipality served by the agency an annual report of the information collected under Subdivision(6) if the agency is an agency of a county, municipality, or other political subdivision of the state. (c) The data collected as a result of the reporting requirements of this article shall not constitute prima facie evidence of racial profiling. (d) On adoption of a policy under Subsection(b), a law enforcement agency shall examine the feasibility of installing video camera and transmitter-activated equipment in each agency law enforcement motor vehicle regularly used to make traffic stops and transmitter-activated equipment in each agency law enforcement motorcycle regularly used to make traffic stops. If a law enforcement agency installs video or audio equipment as provided by this subsection, the policy adopted by the agency under Subsection(b) must include standards for reviewing video and audio documentation. (e) A report required under Subsection(b)(7) may not include identifying information about a peace officer who makes a traffic stop or about an individual who is stopped or arrested by a peace officer. This subsection does not affect the collection of information as required by a policy under Subsection(b)(6). (f) On the commencement of an investigation by a law enforcement agency of a complaint described by Subsection(b)(3) in which a video or audio recording of the occurrence on which the complaint is based was made,the agency shall promptly provide a copy of the recording to the peace officer who is the subject of the complaint on written request by the officer. Art. 2.133. REPORTS REQUIRED FOR TRAFFIC AND PEDESTRIAN STOPS. (a) In this article: (1) "Race or ethnicity" has the meaning assigned by Article 2.132(a). (2) "Pedestrian stop" means an interaction between a peace officer and an individual who is being detained for the purpose of a criminal investigation in which the individual is not under arrest. (b) A peace officer who stops a motor vehicle for an alleged violation of a law or ordinance regulating traffic or who stops a pedestrian for any suspected offense shall report to the law enforcement agency that employs the officer information relating to the stop, including: (1) a physical description of each person detained as a result of the stop, including: (A) the person's gender; and (B) the person's race or ethnicity, as stated by the person or, if the person does not state the person's race or ethnicity, as determined by the officer to the best of the officer's ability; (2) the traffic law or ordinance alleged to have been violated or the suspected offense; (3) whether the officer conducted a search as a result of the stop and, if so,whether the person detained consented to the search; (4) whether any contraband was discovered in the course of the search and the type of contraband discovered; (5) whether probable cause to search existed and the facts supporting the existence of that probable cause; (6) whether the officer made an arrest as a result of the stop or the search, including a statement of the offense charged; (7) the street address or approximate location of the stop; and (8) whether the officer issued a warning or a citation as a result of the stop, including a description of the warning or a statement of the violation charged. Art. 2.134. COMPILATION AND ANALYSIS OF INFORMATION COLLECTED. (a) In this article, "pedestrian stop" means an interaction between a peace officer and an individual who is being detained for the purpose of a criminal investigation in which the individual is not under arrest. (b) A law enforcement agency shall compile and analyze the information contained in each report received by the agency under Article 2.133. Not later than March 1 of each year,each local law enforcement agency shall submit a report containing the information compiled during the previous calendar year to the governing body of each county or municipality served by the agency in a manner approved by the agency. (c) A report required under Subsection(b)must include: (1) a comparative analysis of the information compiled under Article 2.133 to: (A) determine the prevalence of racial profiling by peace officers employed by the agency; and (B) examine the disposition of traffic and pedestrian stops made by officers employed by the agency, including_searches resulting from the stops; and (2) information relating to each complaint filed with the agency alleging that a peace officer employed by the agency has engaged in racial profiling. (d) A report required under Subsection(b) may not include identifying information about a peace officer who makes a traffic or pedestrian stop or about an individual who is stopped or arrested by a peace officer. This subsection does not affect the reporting of information required under Article 2.133(b)(1). (e) The Commission on Law Enforcement Officer Standards and Education shall develop guidelines for compiling and reporting information as required by this article. (f) The data collected as a result of the reporting requirements of this article shall not constitute prima facie evidence of racial profiling. Art. 2.135. EXEMPTION FOR AGENCIES USING VIDEO AND AUDIO EQUIPMENT. (a) A peace officer is exempt from the reporting requirement under Article 2.133 and a law enforcement agency is exempt from the compilation, analysis, and reporting requirements under Article 2.134 if: S 1) during the calendar year preceding the date that a report under Article 2.134 is required to be submitted: (A) each law enforcement motor vehicle regularly used by an officer employed by the agency to make traffic and pedestrian stops is equipped with video camera and transmitter-activated equipment and each law enforcement motorcycle regularly used to make traffic and pedestrian stops is equipped with transmitter-activated equipment; and (B) each traffic and pedestrian stop made by an officer employed by the agency that is capable of being recorded by video and audio or audio equipment, as appropriate,is recorded by using the equipment; or (2) the governing body of the county or municipality served by the law enforcement agency, in conjunction with the law enforcement agency, certifies to the Department of Public Safety,not later than the date specified by rule by the department,that the law enforcement agency needs funds or video and audio equipment for the purpose of installing video and audio equipment as described by Subsection(a)(1)(A) and the agency does not receive from the state funds or video and audio equipment sufficient, as determined by the department, for the agency to accomplish that purpose. (b) Except as otherwise provided by this subsection, a law enforcement agency that is exempt from the requirements under Article 2.134 shall retain the video and audio or audio documentation of each traffic and pedestrian stop for at least 90 days after the date of the stop. If a complaint is filed with the law enforcement agency alleging that a peace officer employed by the agency has engaged in racial profiling with respect to a traffic or pedestrian stop,the agency shall retain the video and audio or audio record of the stop until final disposition of the complaint. (c) This article does not affect the collection or reporting requirements under Article 2.132. Art. 2.136. LIABILITY. A peace officer is not liable for damages arising from an act relating to the collection or reporting of information as required by Article 2.133 or under a policy adopted under Article 2.132. Art. 2.137. PROVISION OF FUNDING OR EQUIPMENT. (a) The Department of Public Safety shall adopt rules for providing funds or video and audio equipment to law enforcement agencies for the purpose of installing video and audio equipment as described by Article 2.135(a)(1)(A), including specifying criteria to prioritize funding or equipment provided to law enforcement agencies. The criteria may include consideration of tax effort, financial hardship, available revenue, and budget surpluses. The criteria must give priority to: (1) law enforcement agencies that employ peace officers whose primary duty is traffic enforcement; (2) smaller jurisdictions; and (3) municipal and county law enforcement agencies. (b) The Department of Public Safety shall collaborate with an institution of higher education to identify law enforcement agencies that need funds or video and audio equipment for the purpose of installing video and audio equipment as described by Article 2.135(a)(1)(A). The collaboration may include the use of a survey to assist in developing criteria to prioritize funding_or equipment provided to law enforcement agencies. (c) To receive funds or video and audio equipment from the state for the purpose of installing video and audio equipment as described by Article 2.135(a)(1)(A),the governing body of a county or municipality, in conjunction with the law enforcement agency serving the county or municipality, shall certify to the Department of Public Safety that the law enforcement agency needs funds or video and audio equipment for that purpose. (d) On receipt of funds or video and audio equipment from the state for the purpose of installing video and audio equipment as described by Article 2.135(a)(1)(A),the governing body of a county or municipality, in conjunction with the law enforcement agency serving the county or municipality, shall certify to the Department of Public Safety that the law enforcement agency has installed video and audio equipment as described by Article 2.135(a)(1)(A) and is using the equipment as required by Article 2.135(a)(1). Art. 2.138. RULES. The Department of Public Safety may adopt rules to implement Articles 2.131-2.137. SECTION 2. Chapter 3, Code of Criminal Procedure, is amended by adding Article 3.05 to read as follows: Art. 3.05. RACIAL PROFILING. In this code, "racial profiling" means a law enforcement-initiated action based on an individual's race, ethnicity, or national origin rather than on the individual's behavior or on information identifying the individual as having engaged in criminal activity. SECTION 3. Section 96.641, Education Code, is amended by adding Subsection(j) to read as follows: (j) As part of the initial training and continuing education for police chiefs required under this section,the institute shall establish a program on racial profiling. The program must include an examination of the best practices for: (1) monitoring peace officers' compliance with laws and internal agency policies relating to racial profiling; (2) implementing laws and internal agency policies relating to preventing racial profiling; and (3) analyzing and reporting collected information. SECTION 4. Section 1701.253, Occupations Code, is amended by adding Subsection(e)to read as follows: (e) As part of the minimum curriculum requirements,the commission shall establish a statewide comprehensive education and training program on racial profiling for officers licensed under this chapter. An officer shall complete a program established under this subsection not later than the second anniversary of the date the officer is licensed under this chapter or the date the officer applies for an intermediate proficiency certificate, whichever date is earlier. SECTION 5. Section 1701.402, Occupations Code, is amended by adding Subsection(d)to read as follows: (d) As a requirement for an intermediate proficiency certificate, an officer must complete an education and training program on racial profiling established by the commission under Section 1701.253(e). SECTION 6. Section 543.202, Transportation Code, is amended to read as follows: Sec. 543.202. FORM OF RECORD. (a) In this section, "race or ethnicity" means of a particular descent, including Caucasian, African, Hispanic, Asian, or Native American descent. (b) The record must be made on a form or by a data processing method acceptable to the department and must include: (1) the name, address,physical description, including race or ethnicity, date of birth, and driver's license number of the person charged; (2) the registration number of the vehicle involved; (3) whether the vehicle was a commercial motor vehicle as defined by Chapter 522 or was involved in transporting hazardous materials; (4) the person's social security number, if the person was operating a commercial motor vehicle or was the holder of a commercial driver's license or commercial driver learner's permit; (5) the date and nature of the offense, including whether the offense was a serious traffic violation as defined by Chapter 522; (6) whether a search of the vehicle was conducted and whether consent for the search was obtained; al the plea, the judgment, and whether bail was forfeited; [(-7)] the date of conviction; and [(-8)] the amount of the fine or forfeiture. SECTION 7. Not later than January 1, 2002, a law enforcement agency shall adopt and implement a policy and begin collecting information under the policy as required by Article 2.132, Code of Criminal Procedure, as added by this Act. A local law enforcement agency shall first submit information to the governing body of each county or municipality served by the agency as required by Article 2.132, Code of Criminal Procedure, as added by this Act, on March 1, 2003. The first submission of information shall consist of information compiled by the agency during the period beginning January 1, 2002, and ending December 31, 2002. SECTION 8. A local law enforcement agency shall first submit information to the governing body of each county or municipality served by the agency as required by Article 2.134, Code of Criminal Procedure, as added by this Act, on March 1, 2004. The first submission of information shall consist of information compiled by the agency during the period beginning January 1, 2003, and ending December 31, 2003. SECTION 9. Not later than January 1, 2002: (1) the Commission on Law Enforcement Officer Standards and Education shall establish an education and training program on racial profiling as required by Subsection(e), Section 1701.253, Occupations Code, as added by this Act; and (2) the Bill Blackwood Law Enforcement Management Institute of Texas shall establish a program on racial profiling as required by Subsection(j), Section 96.641, Education Code, as added by this Act. SECTION 10. A person who on the effective date of this Act holds an intermediate proficiency certificate issued by the Commission on Law Enforcement Officer Standards and Education or has held a peace officer license issued by the Commission on Law Enforcement Officer Standards and Education for at least two years shall complete an education and training program on racial profiling established under Subsection(e), Section 1701.253, Occupations Code, as added by this Act, not later than September 1, 2003. SECTION 11. An individual appointed or elected as a police chief before the effective date of this Act shall complete a program on racial profiling established under Subsection(j), Section 96.641, Education Code, as added by this Act, not later than September 1, 2003. SECTION 12. This Act takes effect September 1, 2001. President of the Senate Speaker of the House I hereby certify that S.B. No. 1074 passed the Senate on April 4, 2001, by the following vote: Yeas 28,Nays 2; May 21, 2001, Senate refused to concur in House amendments and requested appointment of Conference Committee; May 22, 2001, House granted request of the Senate; May 24, 2001, Senate adopted Conference Committee Report by a viva-voce vote. Secretary of the Senate I hereby certify that S.B. No. 1074 passed the House, with amendments, on May 15, 2001,by a non-record vote; May 22,2001, House granted request of the Senate for appointment of Conference Committee; May 24, 2001, House adopted Conference Committee Report by a non-record vote. Chief Clerk of the House Approved: Date Governor (II) Responding to the Law Institutional Policy on Racial Profiling Racial Profiling Policy Policy Number: 614 Effective Date: January 1, 2002 Reviewed Date: July 9, 2007 ][. PURPOSE The purpose of this policy is to reaffirm the Wylie Police Department's commitment to unbiased policing in all its encounters between officers and any person; to reinforce procedures that serve to ensure public confidence and mutual trust through the provision of services in a fair and equitable fashion; and to protect our officers from unwarranted accusations of misconduct when they act within the dictates of department policy and the law. :[I. POLICY It is the policy of this department to police in a proactive manner and, to aggressively investigate suspected violations of law. Officers shall actively enforce state and federal laws in a responsible and professional manner, without regard to race, ethnicity or national origin. Officers are strictly prohibited from engaging in a racial profiling as defined in this policy. This policy shall be applicable to all persons, whether drivers,passengers or pedestrians. Officers shall conduct themselves in a dignified and respectful manner at all times when dealing with the public. Two of the fundamental rights guaranteed by both the United States and Texas constitutions are equal protection under the law and freedom from unreasonable searches and seizures by government agents. The right of all persons to be treated equally and to be free from unreasonable searches and seizures must be respected. Racial profiling is an unacceptable patrol tactic and will not be condoned. This policy shall not preclude officers from offering assistance, such as upon observing a substance leaking from a vehicle, a flat tire, or someone who appears to be ill, lost or confused. Nor does this policy prohibit stopping someone suspected of a crime based upon observed actions and/or information received about the person. III. DEFINITIONS Racial Profiling: A law enforcement-initiated action based on an individual's race, ethnicity, or national origin rather than on the individual's behavior or on information identifying the individual as having engaged in criminal activity. Racial profiling pertains to persons who are viewed as suspects or potential suspects of criminal behavior. The term is not relevant as it pertains to witnesses, complainants or other citizen contacts. Racial Profiling Policy - Page 2 of 5 The prohibition against racial profiling does not preclude the use of race, ethnicity or national origin as factors in a detention decision when used as part of an actual description of a specific suspect for whom an officer is searching. Detaining an individual and conducting an inquiry into that person's activities simply because of that individual's race, ethnicity or national origin is racial profiling. Examples of racial profiling include but are not limited to the following. • Citing a driver who is speeding in a stream of traffic where most other drivers are speeding because of the cited driver's race,ethnicity or national origin. • Detaining the driver of a vehicle based on the determination that a person of that race, ethnicity or national origin is unlikely to own or possess that specific make or model of vehicle. • Detaining an individual based upon the determination that a person of that race, ethnicity or national origin does not belong in a specific part of town or a specific place. A law enforcement agency can derive two principles from the adoption of this definition of racial profiling • Police may not use racial or ethnic stereotypes as factors in selecting whom to stop and search, while police may use race in conjunction with other known factors of the suspect. • Law enforcement officers may not use racial or ethnic stereotypes as factors in selecting whom to stop and search. Racial profiling is not relevant as it pertains to witnesses, etc. Race or Ethnicity: Of a particular decent, including Caucasian, African, Hispanic, Asian, or Native American. Pedestrian Stop: An interaction between a peace officer and an individual who is being detained for the purpose of a criminal investigation in which the individual is not under arrest. Traffic Stop: The stop of a motor vehicle by a peace officer for an alleged violation of a law or ordinance regulating traffic. III. TRAINING A. Officers are responsible to adhere to all Texas Commission of Law Enforcement Officer Standards and Education (TCLEOSE) training and the Law Enforcement Management Institute of Texas (LEMIT) requirements as mandated by law. B. All officers shall complete a TCLEOSE training and education program on racial profiling not later than the second anniversary of the date the officer is licensed under Chapter 1701 of the Texas Occupations Code or the date the officer applies for an intermediate proficiency certificate, whichever date is earlier. A person who on September 1, 2001, held a TCLEOSE intermediate proficiency certificate, or who had held a peace Racial Profiling Policy - Page 3 of 5 officer license issued by TCLEOSE for at lest two years, shall complete a TCLEOSE training and education program on racial profiling not later than September 1, 2003. C. The Chief of Police, as part of the initial training and continued education for such appointment, will be required to attend the LEMIT program on racial profiling. D. An individual appointed as a police chief before the effective date of this Act shall complete the program on racial profiling established under Subsection (j), Section 96.641, Education Code, as added by this Act, not later than September 1, 2003. IV. COMPLAINT INVESTIGATION A. The department shall accept complaints from any person who believes he or she has been stopped or searched based on racial, ethnic or national origin profiling. No person shall be discouraged, intimidated or coerced from filing a complaint, nor discriminated against because he or she filed such a complaint. B. Any person who receives an allegation of racial profiling, including the officer who initiated the stop, shall record the person's name, address and telephone number, and forward the complaint through the appropriate channels or direct the individual(s). Any employee contacted shall provide to that person instructions on the complaint process and will report any allegation racial profiling to their superior before the end of shift. C. Investigation of a complaint shall be conducted in a thorough and timely manner. All complaints will be acknowledged in writing to the initiator who will receive disposition regarding said complaint within a reasonable time period. The investigation shall be reduced to writing and any reviewer's comments or conclusions shall be filed with the Chief. When applicable, findings and/or suggestions for disciplinary action, retaining or changes in policy shall be filed with the Chief. D. If a racial profiling complaint is sustained against an officer, it will result in appropriate corrective and/or disciplinary action, up to and including termination. E. If there is a departmental video or audio recording the events upon which a complaint of racial profiling is based, upon commencement of an investigation by this department into the complaint and written request of the officer made the subject of the complaint, this department shall promptly provide a copy of the recording to that officer. VI. PUBLIC EDUCATION This department will inform the public of its policy against racial profiling and the complaint process. Methods that may be utilized to inform the public are the news media, radio, service, or civic presentations, the internet, as well as governing board meetings. Additionally, information will be made available as appropriate in languages other than English. Racial Profiling Policy -Page 4 of 5 VII. CITATION DATA COLLECTION AND REPORTING A. An officer is required to collect information relating to traffic stops in which a citation is issued. On the citation officers must include: 1. the violator's race or ethnicity; 2. whether a search was conducted; 3. whether the search consensual; and 4. whether an arrest was made for this cited violation or any other violation. B. By March of each year, the department shall submit a report to the City Council that includes the information gathered by the citations. The report will include: 1. a breakdown of citations by race or ethnicity; 2. number of citations that resulted in a search; 3. number of searches that were consensual; and 4. number of citations that resulted in custodial arrest for this cited violation or any other violation. C. Not later than March 1st of each year this department shall submit a report to the City Council containing this information from the preceding calendar year, beginning March 1, 2003. VII. USE OF VIDEO AND AUDIO EQUIPMENT A. Each motor vehicle regularly used by this department to make traffic and pedestrian stops shall be equipped with a video camera and transmitter- activated equipment, and B. Each traffic and pedestrian stop made by an officer of this department that is capable of being recorded by video and audio, or audio as appropriate, shall be recorded. C. This department shall retain the video and audio tapes, or the audiotape of each traffic stop and pedestrian stop for at least ninety (90) days after the date of the stop. If a complaint is filed with this department alleging that one of our officers has engaged in racial profiling with respect to a traffic or pedestrian stop, this department shall retain the video and audio tapes, or the audio tape of the stop until final disposition of the complaint. D. Supervisors will ensure officers of this department are recording their traffic and pedestrian stops. A recording of each officer will be reviewed at least once every ninety (90) days. E. If the equipment used to record audio and video of traffic or pedestrian stops is malfunctioning or otherwise not operable, officers will drive a vehicle with operable video equipment. If no other squad car is available, officers will record the following data when making traffic or pedestrian stops: 1. a physical description of each person detained as a result of the stop including gender and race or ethnicity, as stated by the person or as determined by the officer to the best of his/her ability; Racial Profiling Policy- Page 5 of 5 2. the location of the stop and suspected offense, traffic law, or ordinance violated; 3. whether a search was conducted and whether the person detained consented to the search; 4. the reason for any searches; 5. whether any contraband was discovered during the search; 6. whether an arrest was made and if so the charge; and 7. any citations issued. BY ORDER OF CH1EF OF OLICE Complaint Process: Informing the Public and Addressing Allegations of Racial Profiling Practices Informing the Public on the Process of Filing_a Racial Profiling Complaint with the Wylie Police Department The Texas Racial Profiling Law requires that police agencies provide information to the public regarding the manner in which to file a racial profiling complaint. In an effort to comply with this particular component,the Wylie Police Department launched an educational campaign aimed at informing the public on issues relevant to the racial profiling complaint process. The police department made available, in the lobby area, information relevant to filing a complaint on a racial profiling violation by a Wylie Police officer. It is believed that through these efforts,the community has been properly informed of the new policies and the complaint processes relevant to racial profiling. Racial Profiling Training Racial Profiling Training Since 2002, all Wylie Police officers have been instructed, as specified in the Texas Racial Profiling Law, to adhere to all Texas Commission on Law Enforcement Officer Standards and Education(TCLEOSE)training and the Law Enforcement Management Institute of Texas(LEMIT) requirements. To date, all sworn officers of the Wylie Police Department have completed the TCLEOSE basic training on racial profiling. The main outline used to train the officers of Wylie has been included in this report. It is important to recognize that the Chief of the Wylie Police Department has also met the training requirements, as specified by the Texas Racial Profiling Law, in the completion of the LEMIT program on racial profiling. The satisfactory completion of the racial profiling training by the sworn personnel of the Wylie Police Department fulfills the training requirement as specified in the Education Code (96.641)of the Texas Racial Profiling Law. Racial Profiling Course Number 3256 Texas Commission on Law Enforcement September 2001 Racial Profiling 3256 Instructor's Note: You may wish to teach this course in conjunction with Asset Forfeiture 3255 because of the related subject matter and applicability of the courses. If this course is taught in conjunction with Asset Forfeiture, you may report it under Combined Profiling and Forfeiture 3257 to reduce data entry. Abstract This instructor guide is designed to meet the educational requirement for racial profiling established by legislative mandate: 77R-SB1074. Target Population: Licensed law enforcement personnel in Texas Prerequisites: Experience as a law enforcement officer Length of Course: A suggested instructional time of 4 hours Material Requirements: Overhead projector, chalkboard and/or flip charts, video tape player, handouts, practical exercises, and demonstrations Instructor Qualifications: Instructors should be very knowledgeable about traffic stop procedures and law enforcement issues Evaluation Process and Procedures An examination should be given. The instructor may decide upon the nature and content of the examination. It must, however, sufficiently demonstrate the mastery of the subject content by the student. Reference Materials Reference materials are located at the end of the course. An electronic copy of this instructor guide may be downloaded from our web site at http://www.tcleose.state.tx.us. Racial Profiling 3256 1.0 RACIAL PROFILING AND THE LAW 1.1 UNIT GOAL: The student will be able to identify the legal aspects of racial profiling. 1.1.1 LEARNING OBJECTIVE: The student will be able to identify the legislative requirements placed upon peace officers and law enforcement agencies regarding racial profiling. Racial Profiling Requirements: Racial profiling CCP 3.05 Racial profiling prohibited CCP 2.131 Law enforcement policy on racial profiling CCP 2.132 Reports required for traffic and pedestrian stops CCP 2.133 Liability CCP 2.136 Racial profiling education for police chiefs Education Code 96.641 Training program Occupations Code 1701.253 Training required for intermediate certificate Occupations Code 1701.402 Definition of"race or ethnicity"for form Transportation Code 543.202 A. Written departmental policies 1. Definition of what constitutes racial profiling 2. Prohibition of racial profiling 3. Complaint process 4. Public education 5. Corrective action 6. Collection of traffic-stop statistics 7. Annual reports B. Not prima fade evidence C. Feasibility of use of video equipment D. Data does not identify officer E. Copy of complaint-related video evidence to officer in question F. Vehicle stop report 1. Physical description of detainees: gender, race or ethnicity 2. Alleged violation 3. Consent to search 4. Contraband 5. Facts supporting probable cause 6. Arrest 7. Warning or citation issued G. Compilation and analysis of data H. Exemption from reporting — audio/video equipment I. Officer non-liability J. Funding K. Required training in racial profiling 1. Police chiefs 2. All holders of intermediate certificates and/or two-year-old licenses as of 09/01/2001 (training to be completed no later than 09/01/2003) —see legislation 77R-SB1074 1.1.2 LEARNING OBJECTIVE: The student will become familiar with Supreme Court decisions and other court decisions involving appropriate actions in traffic stops. A. Whren v. United States, 517 U.S. 806, 116 S.Ct. 1769 (1996) 1. Motor vehicle search exemption 2. Traffic violation acceptable as pretext for further investigation 3. Selective enforcement can be challenged B. Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868 (1968) 1. Stop & Frisk doctrine 2. Stopping and briefly detaining a person 3. Frisk and pat down C. Other cases 1. Pennsylvania v. Mimms, 434 U.S. 106, 98 S.Ct. 330 (1977) 2. Maryland v. Wilson, 117 S.Ct. 882 (1997) 3. Graham v. State, 119 MdApp 444, 705 A.2d 82 (1998) 4. Pryor v. State, 122 MdApp. 671 (1997) cert. denied 352 Md. 312, 721 A.2d 990 (1998) 5. Ferris v. State, 355 Md. 356, 735 A.2d 491 (1999) 6. New York v. Belton, 453 U.S. 454 (1981) 2.0 RACIAL PROFILING AND THE COMMUNITY 2.1 UNIT GOAL: The student will be able to identify logical and social arguments against racial profiling. 2.1.1 LEARNING OBJECTIVE: The student will be able to identify logical and social arguments against racial profiling. A. There are appropriate reasons for unusual traffic stops (suspicious behavior, the officer's intuition, MOs, etc.), but police work must stop short of cultural stereotyping and racism B. Racial profiling would result in criminal arrests, but only because it would target all members of a race randomly—the minor benefits would be far outweighed by the distrust and anger towards law enforcement by minorities and the public as a whole C. Racial profiling is self-fulfilling bad logic: if you believed that minorities committed more crimes, then you might look for more minority criminals, and find them in disproportionate numbers D. Inappropriate traffic stops generate suspicion and antagonism towards officers and make future stops more volatile — a racially-based stop today can throw suspicion on tomorrow's legitimate stop E. By focusing on race, you would not only be harassing innocent citizens, but overlooking criminals of all races and backgrounds — it is a waste of law enforcement resources 3.0 RACIAL PROFILING VERSUS REASONABLE SUSPICION 3.1 UNIT GOAL: The student will be able to identify the elements of both inappropriate and appropriate traffic stops. 3.1.1 LEARNING OBJECTIVE: The student will be able to identify elements of a racially motivated traffic stop. A. Most race-based complaints come from vehicle stops, often since race is used as an inappropriate substitute for drug courier profile elements B. "DWB"—"Driving While Black" — a nickname for the public perception that a Black person may be stopped solely because of their race (especially with the suspicion that they are a drug courier), often extended to other minority groups or activities as well ("Driving While Brown," "Flying While Black," etc.) C. A typical traffic stop resulting from racial profiling 1. The vehicle is stopped on the basis of a minor or contrived traffic violation which is used as a pretext for closer inspection of the vehicle, driver, and passengers 2. The driver and passengers are questioned about things that do not relate to the traffic violation 3. The driver and passengers are ordered out of the vehicle 4. The officers visually check all observable parts of the vehicle 5. The officers proceed on the assumption that drug courier work is involved by detaining the driver and passengers by the roadside 6. The driver is asked to consent to a vehicle search — if the driver refuses, the officers use other procedures (waiting on a canine unit, criminal record checks, license-plate checks, etc.), and intimidate the driver (with the threat of detaining him/her, obtaining a warrant, etc.) 3.1.2 LEARNING OBJECTIVE: The student will be able to identify elements of a traffic stop which would constitute reasonable suspicion of drug courier activity. A. Drug courier profile (adapted from a profile developed by the DEA) 1. Driver is nervous or anxious beyond the ordinary anxiety and cultural communication styles 2. Signs of long-term driving (driver is unshaven, has empty food containers, etc.) 3. Vehicle is rented 4. Driver is a young male, 20-35 5. No visible luggage, even though driver is traveling 6. Driver was over-reckless or over-cautious in driving and responding to signals 7. Use of air fresheners B. Drug courier activity indicators by themselves are usually not sufficient to justify a stop 3.1.3 LEARNING OBJECTIVE: The student will be able to identify elements of a traffic stop which could constitute reasonable suspicion of criminal activity. A. Thinking about the totality of circumstances in a vehicle stop B. Vehicle exterior 1. Non-standard repainting (esp. on a new vehicle) 2. Signs of hidden cargo (heavy weight in trunk, windows do not roll down, etc.) 3. Unusual license plate suggesting a switch (dirty plate, bugs on back plate, etc.) 4. Unusual circumstances (pulling a camper at night, kids' bikes with no kids, etc.) C. Pre-stop indicators 1. Not consistent with traffic flow 2. Driver is overly cautious, or driver/passengers repeatedly look at police car 3. Driver begins using a car- or cell-phone when signaled to stop 4. Unusual pull-over behavior (ignores signals, hesitates, pulls onto new street, moves objects in car, etc.) D. Vehicle interior 1. Rear seat or interior panels have been opened, there are tools or spare tire, etc. 2. Inconsistent items (anti-theft club with a rental, unexpected luggage, etc.) Resources Proactive Field Stops Training Unit— Instructor's Guide, Maryland Police and Correctional Training Commissions, 2001. (See Appendix A.) Web address for legislation 77R-SB1074: http://tIo2.fic.state.tx.us/tIo/77r/billtext/SB01074F.htm Report on Complaints Report on Complaints The following table contains data regarding officers that have been the subject of a complaint, during the time period of 1/1/09---12/31/09,based on allegations outlining possible violations related to the Texas Racial Profiling Law. The final disposition of the case is also included. A check above indicates that the Wylie Police Department has not received any complaints, on any members of its police force, for having violated the Texas Racial Profiling Law during the time period of 1/1/09 ---- 12/31/09. Complaints Filed for Possible Violations of The Texas Racial Profiling Law Com laint No. Alle ed Violation Dis osition of the Case 2009-0000021 Racial Profiling Unfounded 2009-0000030 Racial Profiling Unfounded 2009-0000041 Racial Profiling Unfounded Additional Comments: Tables Illustrating Traffic Contact Tier 1 Data (I) Tier 1 Data Traffic-Related Contact Information (1/1/09-12/31/09) Race/Ethnicity* Contacts Searches Consensual PC Searches Custody Searches Arrests N % N % N % N % N % Caucasian 7158 73 230 71 87 76 143 68 231 66 African 1069 11 , 38 12 11 10 27 13 54 15 Hispanic _ 1248 13 49 15 16 14 33 16 57 16 Asian 226 2 6 2 1 .9 5 2 7 2 Native 4 .05 1 .3 0 0 1 .5 1 .3 American Other 167 2 1 .3 0 0 1 .5 0 0 Total 9872 100** 325 100 115 100 210 100 350 100 "N"represents"number"of traffic-related contacts * Race/Ethnicity is defined by Senate Bill 1074 as being of a"particular descent, including Caucasian, African,Hispanic,Asian,or Native American". **Figure has been rounded Tier 1 Data (Traffic Contacts) 80 , . !s °` k) 4Y..PHy' try 42,-,4 ^f t 70 tS. .,F `£b dF3 7 F 60F 'A $ - F' 50 (Percent) 40 30 K - i.--..::1,-.0d- . . 1,4 4. '`�� fly.0 t`. �``��'' .��t` 0 ■ Traffic o�`' �` y�� Qy �i` 0+�, Contacts Ir I (Origin) Tier 1 Data (Searches) 250 } o 200 „. a a3 M, tv, 4.5 : , . 1 soC`' 9 yank E vp .RM1. '.Y # f '�4s y# ^X '''yz ` # ,. ' 0 II " "ii .A III Sea rches 4. El Consent (Origin) • PC Tier 1 Data (Arrests) 70 ,,,, 4 60 50 r p +i.. tll Yµ. bf,.k31C .PX. r �,:�� 43c (Percent) 30 �� # , � 20 " sk• x 1 0 r+ as ' 's 0 .,`�!,t• mil; ,C... .Lb z • �i► C Q. R Arrests ��' w (Origin) Tier 1 Baseline Comparison (Fair Roads Standard) (II) Traffic-Contacts and Fair Roads Standard Comparison Comparison of traffic-related contacts with households in Wylie that have vehicle access (in percentages). (1/1/09-12/31/09) Race/Ethnicity* Traffic-Contacts Households (in percentages) with Vehicle Access in ercenta es Caucasian 73 89 African 11 2 Hispanic 13 7 Asian 2 .39 Native American .05 .96 Other 2 N/A Total 100** 99.35*** *Race/Ethnicity are defined by Senate Bill 1074 as being of a"particular descent, including Caucasian, African,Hispanic,Asian,or Native American". **Represents rounded figure ***Amount does not total 100%since Census data does provide value of"other"category. Tier 1 (Traffic- . 90 Households/09)c-Contacts and � ° � 'f V1 is' `' c.,w '-4 5 (Percent) 40 . 4 4 II 1/44. Q�r �y` <`V aST �r r` I ■ Traffic- Contacts 4), ■ Households (Origin) Tier 1 Data (Eight-Year Comparative Analysis) (2002-2009) (III) Eight-Year Tier 1 Data Comparison Comparison of Eight-Year Traffic-Related Contact Information (1/1/02---12/31/09) Race/Ethnicity* Traffic-Related Contacts (in percentages) (02) (03) (04) (05) (06) (07) (08) (09) Caucasian 80 74 75 76 79 71 71 73 African 3 4 6 8 9 10 11 11 Hispanic 16 21 18 15 11 16 14 13 Asian .47 1 1 1 1 2 2 2 Native .06 0 0 0 0 .01 .05 .05 American Other .30 0 .24 ' .06 0 .8 1 2 Total 100** 100 100** 100 100 100** 100 100** * Race/Ethnicity is defined by Texas Senate Bill 1074 as being of a"particular descent,including Caucasian,African,Hispanic,Asian,or Native American". ** Figure has been rounded. Tier 1 Data (Traffic-Contacts 02-09) 80er �- k , � x '� �.�k�-ax•• ,ems -'..�� a " rye. s , "yx' t9t at' '-2, a^ .. 50 , g. .„ .,, ,. , �, : � s ;� 4f a 1s sk. 4.� t s{ `"`4-4e.; fit'`f;. 4 ..s. s (Percent) 40 ,„ .; r 30 s�S t� � ¢ R. 4 s w fgr M N 20 .µgy & -, -; , .S k G b .YYf' bvcb 5 'yy: �S. -toeq,,,,,4r....-L, - -9,,-1 .t.V. 1::".4*.1,4;4r;,,,,,,,,A ar k fi 0 II c c 0 c c s.. Nero 0 CD CO veep 0Q •L O. •i' 0 Q •=' Q 4' ■ Contacts 02 c = a�C' • Contacts 03 0 Contacts 04 •! D Contacts 05 z • Contacts 06 ■ Contacts 07 (Origin) ■ Contacts 08 0 Contacts 09 Comparison of Eight-Year Traffic-Related Search Information (1/1/02---12/31/09) Race/Ethnicity* Search-Related Contacts (in percentages) (02) (03) (04) (05) (06) (07) (08) (09) Caucasian 79 64 59 53 81 73 68 71 African 3 1 8 2 5 11 14 12 Hispanic 18 34 31 44 14 15 16 15 Asian 0 .6 0 0 0 1 2 2 Native 0 0 0 0 0 0 0 .3 American Other 0 0 2 0 0 .3 .2 .3 Total 100 100** 100 100 100** 100** 100 100 * Race/Ethnicity is defined by Texas Senate Bill 1074 as being of a"particular descent, including Caucasian,African,Hispanic,Asian,or Native American". ** Figure has been rounded. Tier 1 Data (Searches 02-09) ...:,:;::,,,-,: iik.P,:ig--.1 .-;!4;,:‘, ,,-,,,,,,z4'::t;z:::.x.,,i;i5,1 t 90 rya� �. r a : �y:s4 60 (Percent) 40 m � �k iv # �%and C 6.9'. 3°+., ,yam, jk, 30 . � 1 .2" 4 0. x' '. P 1a : �# cr 0 _ r �: .� •! 03 -ik- ,El .i .... a •� cv = Q' 0 w ■ Searches 02 Z 0 Searches 03 ■ Searches 04 (origin) • Searches 05 ■ Searches 07 ■ Searches 08 0 Searches 09 Comparison of Eight-Year Traffic-Related Arrest Information (111/02---12/31/09) Race/Ethnicity* Traffic-Related Contacts (in percentages) (02) (03) (04) (05) (06) (07) (08) (09) Caucasian 77 43 57 50 67 66 67 66 African 3 1 4 7 12 12 13 15 Hispanic 19 54 38 42 21 20 18 16 Asian 0 2 0 0 l 0 1 2 2 Native 0 0 0 0 0 0 0 .3 American Other 0 0 1 1 0 .7 0 0 Total 100** 100 100 100 100** 100** 100 100 * Race/Ethnicity is defined by Texas Senate Bill 1074 as being of a"particular descent, including Caucasian,African,Hispanic,Asian,or Native American". ** Figure has been rounded. Tier 1 Data (Arrests 02-09) 80 d 70 i s r w ° xiv yr , 60 , N �. s �. x a -.:-Ai{q� � , ` . ,ate A � , of `t s� � €0 50 ;i ' ` me * s aim ' fix§W e: 7:: 3: s , '� . _ y �5 13 40 (Percent) , r $ µ iaq '4-44+ d f(U :V 4x " k a, ad , t -“ -'.x r fit % ',,, ,�1g� :?i , #. 4. 4. t 7f'A .s.'" 'q ,,," :� i14-, ;:thy. z WAr , 5A ',, 14714!kaftlifWggiatil IP • r �`� iL �`Ca OT` �s ..z.• ■ Arrests 02 C� ■ Arrests 03 4 ❑ Arrests 04 ❑ Arrests 05 gip, ■ Arrests 06 ■ Arrests 07 (Origin) ■ Arrests 08 Arrests 09 Analysis and Interpretation of Data Analysis In 2001,the Texas Legislature passed Senate Bill 1074 which later became the Texas Racial Profiling Law. The law came into effect on January 1, 2002 and requires that all police departments in Texas collect traffic-related data and report this information to their local governing authority by March lst of each year. The purpose in collecting and presenting this information is to determine if police officers in a particular municipality are engaging in the practice of profiling minority motorists. The Texas Racial Profiling Law also requires police departments to interpret traffic-related data. Although most researchers would probably agree with the fact that it is within the confines of good practice for police departments to be accountable to the citizenry while carrying a transparent image before the community, it is very difficult to determine if police departments are engaging in racial profiling, from a review or analysis of aggregate data. In other words, it is challenging for a reputable researcher to identify specific "individual"racist behavior from aggregate-level"institutional"data on traffic- related contacts. During the past legislative session,the Texas Legislature passed House Bill 3389 which modified the existing Racial Profiling Law by adding new requirements; this was due to take effect on January 1st, 2010. These new changes include, but are not exclusive of, the re-definition of a contact to include motor vehicles where a citation was issued or an arrest made. In addition, it will require officers to indicate if they knew the race or ethnicity of the individual before detaining them. Also,the new law requires adding "middle eastern" to the racial and ethnic category and submitting the annual traffic data report to TCLEOSE before March 1st of each year, starting March 1st, 2011. I am pleased to inform you that these changes have already been addressed by the Wylie Police Department. Further,the report to be submitted in 2011 will illustrate these changes, are required by law. The Wylie Police Department, in an effort to comply with The Texas Racial Profiling Law(S.B. 1074), commissioned the analysis of its 2009 traffic contact data. Thus,three different types of data analyses were performed. The first of these involved a careful evaluation of the 2009 traffic stop data. This particular analysis measured, as required by the law, the number and percentage of Caucasians, African Americans, Hispanics,Asians,Native Americans, and individuals belonging to the "other" category, that came in contact with the police in the course of a traffic-related stop, and were either issued a citation or arrested. Further,the analysis included information relevant to the number and percentage of searches(table 1)while indicating the type of search performed(i.e., consensual or probable cause). Also, the data analysis included the number and percentage of individuals who,after they came in contact with the police for a traffic-related reason,were arrested. The additional data analysis performed was based on a comparison of the 2009 traffic-contact data with a specific baseline. When reviewing this particular analysis, it should be noted that there is disagreement, in the literature, regarding the appropriate baseline to be used when analyzing traffic-related contact information. Of the baseline measures available, the Wylie Police Department opted to adopt, as a baseline measure, the Fair Roads Standard. This particular baseline is based on data obtained through the U.S. Census Bureau(2000) relevant to the number of households that have access to vehicles while controlling for the race and ethnicity of the heads of households. It is clear that census data presents challenges to any effort made at establishing a fair and accurate racial profiling analysis. That is, census data contains information on all residents of a particular community, regardless of the fact they may or may not be among the driving population. Further,census data,when used as a baseline of comparison, presents the challenge that it captures information related to city residents only. Thus, excluding individuals who may have come in contact with the Wylie Police Department in 2009 but live outside city limits. In some cases, the percentage of the population that comes in contact with the police but lives outside city limits represents a substantial volume of all traffic-related contacts made in a given year. Throughout the years, several civil rights groups in Texas have expressed their desire and made recommendations to the effect that all police departments should rely, in their data analysis, on the Fair Roads Standard. This source contains census data specific to the number of"households"that have access to vehicles. Thus,proposing to compare "households" (which may have multiple residents and only a few vehicles) with "contacts" (an individual-based count). This, in essence, constitutes a comparison that may result in ecological fallacy. Despite this,the Wylie Police Department made a decision that it would use this form of comparison(i.e., census data relevant to households with vehicles)in an attempt to demonstrate its"good will"and "transparency"before the community. Thus, the Fair Roads Standard data obtained and used in this study is specifically relevant to Wylie. The final analysis was conducted while using the 2002--2009 traffic contact data. Specifically, all traffic-related contacts made in 2009 were compared to similar figures reported in 2002, 2003, 2004, 2005,2006, 2007 and 2008. Although some researchers may not support the notion that in eight years, a"significant"and"permanent"trend can take effect, when considering this analysis, it was determined that comparing eight years of traffic contact data may highlight possible areas of consistency with regards to traffic- related contacts. That is,the eight-year comparison has the potential of revealing indicators that a possible trend of traffic-based contacts with regards to members of a specific minority group, may in fact,develop. Tier 1 (2009)Traffic-Related Contact Analysis When analyzing the Tier 1 data collected in 2009, it was evident that most traffic- related contacts were made with Caucasian drivers. This was followed by Hispanic and African American drivers. With respect to searches, most of them were performed on Caucasian drivers. This was also followed by Hispanics and African Americans. It is important to note that the arrest data revealed that Caucasian drivers were arrested the most in traffic-related contacts;this was followed by Hispanics and African Americans. Fair Roads Standard and U.S. Census Analysis The data analysis of traffic contacts to the census data relevant to the number of "households" in Wylie who indicated, in the 2000 census,that they had access to vehicles, produced interesting findings. Specifically, the percentage of individuals of African American, Hispanic and Asian descent that came in contact with the police was higher than the percentage of African American, Hispanic and Asian households in Wylie that claimed, in the 2000 census,to have access to vehicles. It should be noted that the percentage difference between Asian contacts and households with access to vehicles was of less than 3 percent;thus, deemed by some as being statistically insignificant. With respect to Caucasian and Native American drivers, a lower percentage of contacts were detected. That is,the percentage of Caucasian and Native American drivers that came in contact with the police in 2009 was lower than the percentage of Caucasian and Native American households in Wylie with access to vehicles. Eight-Year Comparison The eight-year comparison(02-09) of traffic-contact data showed some similarities. As illustrated in table 3,the percentage of drivers (from different racial/ethnic groups)that came in contact with the Wylie Police in 2009 was similar to the percentage of drivers, from the same racial/ethnic groups that came in contact with the Wylie Police Department in 2008, 2007, 2006, 2005, 2004, 2003 and 2002. When comparing 2009 to the previous years,there was an increase in percentage among Caucasians and a decrease in percentage among Hispanics. It is clear that commonalities in the data existed,when analyzing the search- related contacts for all eight years. An increase in percentage was detected among Caucasians while a percentage decrease was noted among African Americans and Hispanics. When considering the arrests made,the data revealed that the percentage of arrests increased among African Americans while a decrease in percentage was evident among Caucasians and Hispanics. Summary of Findings The comparison of traffic contacts showed that the Wylie Police Department came in contact(in traffic-related incidents)with a smaller percentage of Caucasian and Native American drivers than the percentage that resided in Wylie and had access to vehicles. Further, the data suggested that the percentage of African American,Hispanic and Asian drivers that came in contact with the police in 2009 was higher than the percentage of African American, Hispanic and Asian households in Wylie with access to vehicles. A careful examination of the eight-year traffic-related contact data suggested that the Wylie Police Department has been, for the most part, consistent in the racial/ethnic composition of motorists it comes in contact with during a given year. The consistency of contacts for the past 8 years is in place despite the fact the city demographics may have changed,thus, increasing the number of subjects likely to come in contact with the police. While considering the findings made in this analysis, it is recommended that the Wylie Police Department should continue to collect and evaluate additional information on traffic-contact data(i.e.,reason for probable cause searches, contraband detected) which may prove to be useful when determining the nature of the traffic-related contacts police officers are making with all individuals;particularly with African Americans and Hispanics. Although this additional data may not be required by state law, it is likely to provide insights regarding the nature and outcome of all traffic contacts made with the public. With regard to the current report, the Wylie Police Department is encouraged to: 1) Perform an independent search analysis on the search data collected in the first quarter of 2010. 2) Commission quarterly audits in 2010 in order to assess data integrity;that is, to ensure that the data collected is consistent with the data being reported. The information and analysis provided in this report serves as evidence that the Wylie Police Department has, once again, complied with the Texas Racial Profiling Law. (III) Summary Checklist Checklist The following requirements were met by the Wylie Police Department in accordance with The Texas Racial Profiling Law: ® Clearly defined act or actions that constitute racial profiling ® Statement indicating prohibition of any peace officer employed by the Wylie Police Department from engaging in racial profiling • Implement a process by which an individual may file a complaint regarding racial profiling violations ® Provide public education related to the complaint process ® Implement disciplinary guidelines for officer found in violation of the Texas Racial Profiling Law ® Collect data(Tier 1)that includes information on a) Race and ethnicity of individual detained b) Whether a search was conducted c) If there was a search, whether it was a consent search or a probable cause search d) Whether a custody arrest took place ® Produce an annual report on police contacts (Tier 1) and present this to local governing body by March 1,2010. ® Adopt a policy, if video/audio equipment is installed, on standards for reviewing video and audio documentation Contact Information Contact Information For additional questions regarding the information presented in this report, please contact: Del Carmen Consulting, LLC 817.681.7840 www.texasracialprofiling.com www.delcarmenconsulting.com Disclaimer: The author of this report,Alejandro del Carmen/del Carmen Consulting, LLC, is not liable for any omissions or errors committed in the acquisition, analysis, or creation of this report. Further,Dr. del Carmen/del Carmen Consulting is not responsible for the inappropriate use and distribution of information contained in this report. Further, no liability shall be incurred as a result of any harm that may be caused to individuals and/or organizations as a result of the information contained in this report. Wylie City Council CITY OF WYLIE Minutes Wylie City Council Tuesday, February 9, 2010 —6:00 pm Wylie Municipal Complex— Council Chambers 2000 Highway 78 North CALL TO ORDER Announce the presence of a Quorum. Mayor Eric Hogue called the meeting to order at 6:08 p.m. with the following Wylie City Council members present: Mayor Pro Tem Red Byboth, Councilwoman Kathy Spillyards, Councilman Rick White, Councilman David Goss, Councilman Carter Porter and Councilman Bennie Jones. Staff present were: City Manager, Mindy Manson; Assistant City Manager, Jeff Butters; Fire Chief, Randy Corbin; City Engineer, Chris Hoisted; Planning Director, Renae' 011ie; Police Chief, John Duscio; Finance Director, Linda Vaughan; Public Services Director, Mike Sferra; Building Official, Mike McAnnally; City Secretary, Carole Ehrlich; Public Information Officer, Craig Kelly, and various support staff. INVOCATION & PLEDGE OF ALLEGIANCE Councilman Goss gave the invocation and Councilman Jones led the Pledge of Allegiance. PRESENTATION • Presentation to 3rd Six Weeks Star Students—Character Trait of"Caring." Mayor/Council) Mayor Hogue and Mayor Pro Tern Byboth presented medallions to students demonstrating the character trait of "Caring." Each six weeks one student from each WISD campus is chosen as the "star student." • Update on the 2009 First Annual City of Wylie Arts Festival (C. Kelly, Public Information Officer/C. Ehrlich, City Secretary) Public Information Officer Kelly and City Secretary Ehrlich gave a short update on the 2009 First Annual City of Wylie Arts Festival on behalf of the Public Arts Advisory Board. Mr. Kelly reported that the event was well attended in spite of the cold weather and some food vendors sold out, prior to the end of the event. He noted that the event was financially sound with net expenditures running slightly higher than revenues by around $1,000 (including overtime). Minutes February 9, 2010 Wylie City Council Page 1 PAAB liaison Ehrlich displayed results of a survey that had been sent to first year vendors asking for input regarding their experience and how the board could improve the event going forward. She reported that responses were overwhelmingly positive with artists and crafters commenting on the ease of loading, unloading and the application process. Many were asking when the signup period would begin for the 2010 event. Ehrlich and Kelly thanked the Public Arts Advisory Board members for their months of work in preparing and implementing the event. Ehrlich told the council that the board created the event to bring attention to the arts in Wylie, to feature the historic downtown area and to eventually use the revenues to fund the public art program. December 4, 2010 will be the date for this year's event. • Flag Presentation Mayor Hogue accepted a flag donated to the City of Wylie by Kevin Finnell representing the Woodman of the World Organization. CITIZENS COMMENTS ON NON-AGENDA ITEMS Residents may address Council regarding an item that is not listed on the Agenda. Residents must provide their name and address. Council requests that comments be limited to three (3) minutes. In addition, Council is not allowed to converse, deliberate or take action on any matter presented during citizen participation. There was no one present to address council during citizens participation. CONSENT AGENDA All matters listed under the Consent Agenda are considered to be routine by the City Council and will be enacted by one motion. There will not be separate discussion of these items. If discussion is desired, that item will be removed from the Consent Agenda and will be considered separately. A. Consider, and act upon, approval of the Minutes of the January 26, 2010 Regular Meeting of the Wylie City Council. (C. Ehrlich, City Secretary) B. Consider, and act upon, Resolution No. 2010-08(R) ordering a General Election to be held jointly with the Wylie Independent School District and Collin County Community College District on May 8, 2010 for the purpose of electing two City Council members, Places 1 and 3, to the Wylie City Council to fill expired terms. (C. Ehrlich, City Secretary) C. Consider, and act upon, a Joint Election Contract between the City of Wylie and Wylie Independent School District (WISD); and a Joint Election Agreement to include Collin County Community College District to be administered by the Collin County Elections Administrator for the May 8, 2010 Wylie General Election. (C. Ehrlich, City Secretary) City Secretary Ehrlich addressed Council stating that one correction had been made to Resolution No. 2010-08(R), Consent Agenda Item B. She explained that wording had been added in Section 3 of the Resolution to include: "Wylie voters may vote at any of the additional early voting locations open under full contract services with the Collin County Elections Administration."She reported this was required due to the passing of Election Code Sec. 85.004 this past year. This wording is added to both the order for the election and the notice. It will be amended, once the complete list of early voting polling places for the county is determined. Minutes February 9, 2010 Wylie City Council Page 2 Previously only the location of the main early voting location was required in the order and notice. Council Action A motion was made by Councilman Porter, seconded by Councilwoman Spillyards to approve the Consent Agenda as presented with the addition of the wording to Item B. A vote was taken and the motion passed 7-0. REGULAR AGENDA General Business Tabled item from January 26, 2010 1. (MOTION TO REMOVE FROM TABLE) Consider, and act upon, accepting the resignation of Daljinder Dhillon and the appointment of a new alternate member to the Construction Code Board to fill the unexpired term of July 1, 2008 to June 30, 2010. (M. McAnnally, Building Official) Councilman Porter made a motion to remove Item #1, consideration of the appointment of an alternate member to the Construction Code Board from the table and consider. Consensus of the council was to remove from the table and consider. Staff Comments Building Official McAnnally addressed council stating that this item was tabled from the January 26, 2010 City Council meeting to allow additional time to review possible applicants to fill this unexpired term. Mr. Dhillon was appointed on February 2009 to fill an unexpired term. Since his appointment, Mr. Dhillon has missed consecutive Construction Code Board meetings. Council Action A motion was made by Mayor Pro Tem Byboth, seconded by Councilwoman Spillyards to accept the resignation of Daljinder Dhillon and to appoint David Williams as an alternate member to the Construction Code Board to fill the unexpired term of July 1, 2008 to June 30, 2010. A vote was taken and the motion passed 7-0. WORK SESSION • Discussion and input regarding City of Wylie Thoroughfare Impact Fees. (S. Satterwhite, WEDC Executive Director) Wylie Economic Development Corporation Executive Director Satterwhite addressed the council stating that in June 2009, the WEDC Board of Directors began meeting on the issue of thoroughfare impact fees specifically relating to the potential that the current structure may be a deterrent to attracting new development. After much discussion, presentations from the City Engineer, input from members of the original Impact Fee Advisory Committee, and input from local developers, it was the belief of the WEDC Board of Directors that the fees were technically sound, equitable to all new development, and most importantly that all developers have an equal opportunity to apply for a waiver of said fees via the City Council or WEDC. Minutes February 9, 2010 Wylie City Council Page 3 Mr. Satterwhite reviewed several options brought forward by the WEDC for council consideration which included: Option #1 —"No change" Option #2 — "No fee" Staff believes this is not a realistic option; If no thoroughfare impact fees were in place, new development would share an equal financial burden with the existing taxpayer for increased demand upon infrastructure created by the new development. Option #3 — "East and West Zones Charged Identical Unit Costs"The only issue staff has with this recommendation is that the fees charged within the west zone would be proportionately higher than the east zone. Option #4— "Lower Each Zone's Unit Cost an Equal Percentage"Staff does not believe this is a viable option because there is no real or perceived concern with Thoroughfare Fees within the west zone. Satterwhite reported that the WEDC board is recommending Option #1, "no change" to the Wylie City Council. • Consider and act upon amendments to a Performance Agreement between the Wylie Economic Development Corporation and Sanden International (U.S.A.), Inc. (S. Satterwhite, WEDC Executive Director) WEDC Executive Director Satterwhite addressed council stating that on July 24, 2009 the WEDC entered into a Performance Agreement with Sanden International to provide $300,000 to support the retooling of a compressor line integral to Sanden's future operations. Funding of the package consisted of a $200,000 payment in 2010 and a $100,000 payment in 2011. Sanden approached the WEDC Board with a request for additional assistance based upon an 8.5% increase in project cost. Original cost projections were $8.52 million with actual expenses coming in at $9.24 million. Satterwhite explained that the existing performance measures within the 7-24-09 Agreement call for $5.79 million and $2.73 million to be expended by 4-1-10 and 4-1-11 respectively. Additionally Sanden must maintain a minimum appraised value of $58 million and a minimum 275 full-time production employees. Combined with this request for additional funding was the notification that Sanden is competing with a Mexico plant for the location of a $14 million manufacturing line which produces pistons required for the above compressor line. While the Board of Directors denied Sanden's request based upon multiple factors, the Board authorized staff to draft an amendment to the existing Performance Agreement which provides 100% of the agreed upon funding in 2010. Satterwhite explained that all of the existing performance measures will remain the same for the full term of the Agreement. He noted that WEDC staff was seeking direction from the Council to convey to the WEDC Board prior to formal approval of any amendments. Direction from council was to further review the current agreement for amendments and present to council as a future agenda item. • Discussion and update on road construction within the City of Wylie. (C. Hoisted, City Engineer) City Engineer Hoisted updated the council stating that the City of Wylie 2005 Bond Program included $38,000,000 for roadway projects throughout the City. Projects include FM 1378, Stone Road (FM 544), Brown Street, and Alanis. The 2007 Collin County Bond Program Minutes February 9, 2010 Wylie City Council Page 4 included $20,154,375 for roadway projects in Wylie including Brown Street, McMillen Road, Ballard Avenue, Stone Road, and Park Boulevard. Mr. Hoisted gave updates on current construction progress on each of the roadways. • Joint City Council/Parks and Recreation Board Work Session for discussion and direction regarding the conceptual plans for Community Park Improvements. (M. Sferra, Public Services Director/Teague Nall and Perkins) Mark Holiday and Chris Seely of Teague Nall and Perkins addressed council and those present from the Parks and Recreation Board. Mr. Holiday explained that council had asked the firm to develop a design for improvements to Community Park within the approved bond funds specified for that project. He reported that once the Master Plan has been developed for a park, the City may begin to prioritize improvements that are necessary for the first phase of construction. For Community Park, the improvements that should be included within the first phase of construction are those that were stated in the 2005 Bond Program. As a reminder, the planned Community Park improvements include an 8-ft concrete trail, replacement of the baseball/softball lights, sod and irrigate infields, improve the irrigation systems, install new bleachers, additional parking, and a new concession stand with restrooms. TNP has prepared two options to consider for the Phase I improvements. The options are based on stakeholder input as well as considerations regarding constructability and phasing of construction. Mr. Holiday reported that the costs associated with the options was not based on contractor bid pricing; should the actual bid price be below the projected budget for the project, TNP has provided additional bid alternates to consider. Option #1 would include: Proposed parking area to include 162 spaces 8 ft. wide concrete walking trail, including sidewalks adjacent to parking and leading to the plaza Paving of the plaza area around the concession stand Grading, drainage, turf and irrigation of all four fields of the 4-plex Relocate lights on the two eastern fields of the 4-plex Remove and replace existing fencing and backstops on all four fields of the 4-plex New restroom facility on the football side of the park New concession stand/restroom facility in the center of the 4-plex baseball fields Option #2 would include: Proposed parking area to include 162 spaces 8 ft. wide concrete walking trail, including sidewalks adjacent to parking and leading to the plaza Paving of the plaza area around the concession stand Grading, drainage, turf and irrigation of three fields of the 4-plex baseball field Grading, drainage and seeding only for one field of the 4-plex Relocate lights on the two eastern fields of the 4-plex Remove and replace existing fencing and backstops on all four fields of the 4-plex Grading, drainage and turf for football Field #2 New restroom facility on football side of the park New press box between football fields #1 and #2 Relocate light pole at the southeast corner of the park Lower manhole rim to below the surface on Field #3 New concession stand/restroom facility in the center of the baseball 4-plex New bleachers for the baseball 4-plex Mr. Seely commented that it was the recommendation of the firm that the Parks Board and City Council select Option #1. This option allows the city to reconstruct the 4-plex (baseball) Minutes February 9, 2010 Wylie City Council Page 5 completely and provide tournament quality facilities for the baseball section of the park. Mr. Seely asked for direction from the council. Direction from council was to further review Option #2 allowing playing fields for both the football league and the baseball league to be improved. Mayor Hogue reconvened into Regular Session at 8:50 pm. RECONVENE INTO REGULAR SESSION Take any action as a result from Work Session. ADJOURNMENT With no further business before the Wylie City Council, a motion was made by Mayor Pro Tem Byboth, seconded by Councilman Goss to adjourn the meeting at 8:53 p.m. Consensus of the council was to adjourn. Eric Hogue, Mayor ATTEST: Carole Ehrlich, City Secretary Minutes February 9, 2010 Wylie City Council Page 6 Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: February 23, 2010 Item Number: B (City Secretary's Use Only) Department: Finance Prepared By: Finance Account Code: Date Prepared: February 16, 2010 Budgeted Amount: Revenue and Expenditure Exhibits: Monthly Report Subject Consider, and place on file, the City of Wylie Monthly Revenue and Expenditure Report as of January 31, 2010. Recommendation Motion to accept and place on file, the City of Wylie Monthly Revenue and Expenditure Report as of January 31, 2010. Discussion The Finance Department has prepared the attached reports for the City Council as required by the City Charter. Approved By Initial Date Department Director LV 2/16/10 City Manager �� /iq Ito Page 1 of 1 CITY OF WYLIE MONTHLY FINANCIAL REPORT January 31,2010 CURRENT YTD EXPECTED BUDGET YTD EXPECTED YTD ACTUAL OVER/(UNDER) ACCOUNT DESCRIPTION 2009-2010 2009-2010 2009-2010 YTD ACTUAL GENERAL FUND REVENUE SUMMARY TAXES 16,108,502 16,108,502 10,710,005 -5,398,497 A FRANCHISE FEES 1,984,240 1,984,240 22,816 -1,961,424 LICENSES AND PERMITS 219,030 219,030 181,305 -37,725 INTERGOVERNMENTAL REV. 606,267 606,267 192,115 -414,152 SERVICE FEES 2,232,032 2,232,032 664,710 -1,567,322 FINES AND FORFEITURES 548,107 548,107 118,050 -430,057 INTEREST INCOME 61,000 61,000 11,261 -49,739 MISCELLANEOUS INCOME 187,946 187,946 45,223 -142,723 OTHER FINANCING SOURCES 455,000 455,000 5,000 -450,000 TOTAL REVENUES 22,402,124 22,402,124 11,950,485 -10,451,639 GENERAL FUND EXPENDITURE SUMMARY CITY COUNCIL 132,460 132,460 46,239 -86,221 CITY MANAGER 784,440 784,440 229,371 -555,069 CITY SECRETARY 272,235 272,235 88,757 -183,478 CITY ATTORNEY 173,000 173,000 42,783 -130,217 FINANCE 716,778 716,778 267,304 -449,474 FACILITIES 180,400 180,400 63,582 -116,818 MUNICIPAL COURT 344,701 344,701 97,821 -246,880 HUMAN RESOURCES 195,700 195,700 62,270 -133,430 PURCHASING 113,518 113,518 37,167 -76,351 INFORMATION TECHNOLOGY 509,081 509,081 155,579 -353,502 POLICE 5,259,695 5,259,695 1,790,916 -3,468,779 FIRE 5,108,383 5,108,383 1,724,612 -3,383,771 ANIMAL CONTROL 257,983 257,983 80,058 -177,925 PLANNING 384,345 384,345 116,899 -267,446 BUILDING INSPECTION 702,568 702,568 212,415 -490,153 CODE ENFORCEMENT 194,600 194,600 50,037 -144,563 STREETS 1,237,551 1,237,551 339,587 -897,964 PARKS 1,535,405 1,535,405 398,280 -1,137,125 RECREATION 232,440 232,440 4,902 -227,538 LIBRARY 836,262 836,262 274,742 -561,520 COMBINED SERVICES 4,038,087 4,038,087 671,572 -3,366,515 TOTAL EXPENDITURES 23,209,632 23,209,632 6,754,893 -16,454,739 REVENUES OVER/(UNDER)EXPENDITURES -807,508 -807,508 5,195,592 612,234 A. Property Tax Collections for FY09-10 as of January 31 are 78.80%, in comparison to FY08-09 for the same time period is 84.15%. CITY OF WYLIE MONTHLY FINANCIAL REPORT January 31,2010 CURRENT YTD EXPECTED BUDGET YTD EXPECTED YTD ACTUAL OVER/(UNDER) ACCOUNT DESCRIPTION 2009-2010 2009-2010 2009-2010 YTD ACTUAL UTILITY FUND REVENUES SUMMARY SERVICE FEES 9,400,000 9,400,000 2,908,092 -6,491,908 INTEREST INCOME 30,000 30,000 13,175 -16,825 MISCELLANEOUS INCOME 30,000 30,000 12,791 -17,209 OTHER FINANCING SOURCES 1,500,000 1,500,000 0 -1,500,000 TOTAL REVENUES 10,960,000 10,960,000 2,934,058 -8,025,942 UTILITY FUND EXPENDITURE SUMMARY UTILITY ADMINISTRATION 569,765 569,765 189,451 -380,314 UTILITIES-WATER 1,107,030 1,107,030 283,771 -823,259 CITY ENGINEER 489,070 489,070 101,465 -387,605 UTILITIES-SEWER 500,660 500,660 150,255 -350,405 UTILITY BILLING 566,017 566,017 148,092 -417,925 COMBINED SERVICES 7,561,582 7,561,582 1,754,617 -5,806,965 TOTAL EXPENDITURES 10,794,124 10,794,124 2,627,651 -8,166,473 REVENUES OVER/(UNDER)EXPENDITURES 165,876 165,876 306,407 140,531 Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: February 23, 2010 Item Number: C Department: WEDC (City Secretary's Use Only) Prepared By: Sam Satterwhite Account Code: Date Prepared: February 17, 2010 Budgeted Amount: Exhibits: 1 Subject Consider, and place on file, the Monthly Revenue and Expense Report for the Wylie Economic Development Corporation as of January 31, 2010. Recommendation Motion to accept, and place on file, the monthly Revenue and Expense Report for the Wylie Economic Development Corporation as of January 31, 2010. Discussion The Wylie Economic Development Corporation (WEDC) Board of Directors approved the attached financials on February 19, 2010. Approved By Initial Date Department Director SS 2/17/2010 City Manager / /1c1/` Page 1 of 1 CONSENT ITEM #C ATTACHMENT (WEDC MONTHLY REVENUE AND EXPENSE REPORT) WILL BE PROVIDED ON MONDAY, FEBRUARY 22, 2010 Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: February 23, 2010 Item Number: D Department: City Manager (City Secretary's Use Only) Prepared By: Mindy Manson Account Code: Date Prepared: February 12, 2010 Budgeted Amount: Exhibits: 1 Subject Consider, and act upon, Resolution No. 2010-09(R) amending Resolution No. 2010-02(R) to correct the reference to a provision in the Texas Administrative Code in the last recital; and providing for an effective date. Recommendation Motion to approve Resolution No. 2010-09(R) amending Resolution No. 2010-02(R) to correct the reference to a provision in the Texas Administrative Code in the last recital and providing for an effective date. Discussion On January 12 2010 the City Council approved Resolution No. 2010-02(R) indicating the City's support of the senior living project. Mr. Tony Sisk contacted the city indicating that the Texas Administrative Code sent to the city for inclusion in the ordinance was incorrect. Mr. Sisk requested that the Texas Administrative Code be amended to read 50- 9(i)(5). Resolution No. 2010-09(R) is amending that recital. Approved By Initial Date Department Director MM 12/30/09 City Manager I /I61/10 Page 1 of 1 RESOLUTION NO. 2010-09(R) A RESOLUTION OF THE CITY OF WYLIE, TEXAS AMENDING RESOLUTION NO. 2010-02(R) TO CORRECT THE REFERENCE TO A PROVISION IN THE TEXAS ADMINISTRATIVE CODE IN THE LAST RECITAL; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Wylie, Texas ("City Council") previously passed Resolution 2010-02(R) ("Resolution") to evidence support for a proposed senior living community and authorize Evergreen Wylie Senior Community, L.P. to apply to the Texas Department of Housing and Community Affairs ("TDHCA") for funding for such senior living community; and WHEREAS, the Resolution referenced § 49.9(i)(5), Texas Administrative Code, which requires an applicant to obtain a resolution from the Local Political Subdivision authorizing the applicant to act on behalf of the Local Political Subdivision when applying for HOME or Housing Trust Funds from TDHCA; and WHEREAS, it has come to the attention of the City Council that the reference to § 49.9(i)(5) was incorrect; and WHEREAS, the City Council desires to amend the reference to § 49.9(i)(5) in the last recital in Resolution No. 2010-02(R) and cite the correct statutory provision. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS, THAT: SECTION 1. The City Council amends the last recital in Resolution No. 2010-02(R) to read as follows: WHEREAS, § 50.9(i)(5), Texas Administrative Code, which gives Housing Tax Credit points for the commitment of development funding by local political subdivisions, states that the TDHCA HOME Program funds will not qualify for points in this category, "unless a resolution is submitted with the application from the Local Political Subdivision authorizing that the Application act on behalf of the Local Political Subdivision in applying for HOME or Housing Trust Funds from TDHCA for the particular application. SECTION 2. This Resolution shall take effect immediately upon its passage. Resolution No. 2010-09(R) Amending Resolution No.2010-02(R) 568356 v.1 DULY PASSED AND APPROVED by the City Council of the City of Wylie, Texas o this the 23rd day of February, 2010. Eric Hogue, Mayor ATTEST TO: Carole Ehrlich, City Secretary Resolution No.2010-09R) 2 Amending Resolution No. 2010-02(R) 568356 v.1 RESOLUTION NO.2010-02(R) A RESOLUTION OF THE CITY OF WYLIE, TEXAS EVIDENCING SUPPORT FOR A PROPOSED SENIOR LIVING COMMUNITY TO BE BUILT IN WYLIE; AUTHORIZING EVERGREEN WYLIE SENIOR COMMUNITY, L.P. TO APPLY TO THE TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS FOR FUNDING FOR SUCH SENIOR LIVING COMMUNITY; AND PROVIDING AN EFFECTIVE DATE. WHEREAS,Evergreen Wylie Senior Community L.P. has proposed a new development of senior housing at approximately 1000 feet South of FM 544 on McCreary Road (SEQ of FM 544 and McCreary Road), Wylie, Collin County,Texas 75098. The proposed community is to be named"Evergreen at Wylie Senior Living Community"; WHEREAS, as the American population ages, there is a need for reasonably priced rental housing for seniors in the community, and City Council wishes to evidence its support for this proposed development in the City of Wylie; WHEREAS, in order to help provide funds and secure necessary financing approvals, Evergreen Wylie Senior Community , L.P will apply for Housing Tax Credits and HOME funds from the Texas Department of Housing and Community Affairs ("TDHCA") which requires permission from Wylie City Council; WHEREAS, §49.9(i)(5), Texas Administrative Code, which gives Housing Tax Credit points for the commitment of development funding by local political subdivisions, states that the TDHCA HOME Program funds will not qualify for points in this category"unless a resolution is submitted with the application from the Local Political Subdivision authorizing that the Applicant act on behalf of the Local Political Subdivision in applying for HOME or Housing Trust Funds from TDHCA for the particular application." NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WYLIE,TEXAS,THAT: Section 1. The City Council of the City of Wylie, Texas recognizes that there is a need for rental housing for seniors within the City of Wylie and that City Council supports and encourages the development of Evergreen at Wylie Senior Living Community. Section 2. The City of Wylie appoints Evergreen Wylie Senior Community, L.P. to act'on its behalf in applying for TDHCA HOME funds for the Evergreen at Wylie Senior Living Community; provided, however, that the City of Wylie disclaims any liability for administration or repayment of any HOME funds which may be loaned to Evergreen Wylie Senior Community Senior Community L.P. by TDHCA. Resolution No.2010-02(R) Support of Senior Living Community Evergreen Wylie Senior Community LP p.mDULY APPROVED AND PASSED by the City Council of the City of Wylie,Texas, on this 12th day of January,2010. 7 (1,, ., Eric Hogue, May deq OF W�Cr...ro.-447- � ATTEST: c , _,I.,:q114r- 4. ' ft !i\ Car a Ehrlich,Ci tary ,may. . 'tea•r r- i- 1 4 Resolution No.2010-02(R) Support of Senior Living Community Evergreen Wylie Senior Community LP Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: February 23, 2010 Item Number: 1 (City Secretary's Use Only) Department: Finance Prepared By: Linda Vaughan Account Code: Date Prepared: February 16, 2010 Budgeted Amount: CAFR, Summary Report, Management Letter and Exhibits: Report on Internal Control Subject Consider, and act upon, acceptance of the Comprehensive Annual Financial Report (CAFR) for FY 2008-2009 after presentation by the audit firm of Weaver and Tidwell L.L.P. Recommendation Motion to accept the Comprehensive Annual Financial Report (CAFR) for FY 2008-2009 as presented by the audit firm of Weaver and Tidwell, L.L.P. Discussion The City Charter in Article VII, Municipal Finance, Section 13: Independent Audit requires that at the end of the fiscal year an independent audit be made of all accounts of the City by a certified public accountant. In compliance with the City Charter, our outside auditor, Weaver and Tidwell, L.L.P. has performed an audit as of September 30, 2009. This is the second year for the audit to be performed by Weaver and Tidwell, L.L.P. Mr. John DeBurro, Senior Audit Manager, Weaver and Tidwell will briefly present the CAFR, including the Independent Auditors' Report and answer any questions that the City Council may have regarding the report. Approved By Initial Date Department Director LV 2/116/l0 City Manager ii�� 11(1 Page 1 of 1 weaver,"— REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Members of the City Council and the Honorable Mayor CITY OF WYLIE Wylie, Texas We have audited the financial statements of the governmental activities, business-type activities, the discretely presented component unit, each major fund and the aggregate remaining fund information of the City of Wylie, Texas (the City) as of and for the year ended September 30, 2009, which collectively comprise the City's basic financial statements and have issued our report thereon dated February 15, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit, we considered the City's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified deficiencies in internal control over financial reporting that we consider to be significant deficiencies and a deficiency that we consider to be a material weakness. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or a combination of control deficiencies, that adversely affect the City's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the City's financial statements that is more than inconsequential will not be detected by the City's internal control. We consider the findings listed below to be significant deficiencies in internal control over financial reporting. AN INDEPENDENT WEAVER AND TIDWELL LLP DALLAS MEMBER OF BAKER TILLY CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 12221 MERIT DRIVE,SUITE 1400,DALLAS,TX 75251 INTERNATIONAL WWW.WEAVERLLP.COM P:(972)490 1970 F:(972)702 8321 City of Wylie, Texas February 15, 2010 Page 2 Preparation of Financial Statements Statement on Auditing Standards No. 112, "Communicating Internal Control Related Matters Identified in an Audit" defines the inadequate design of internal control over the preparation of financial statements being audited as a deficiency in the design of internal controls. Auditors cannot be a part of the City's internal control system. As the City does not prepare full disclosure financial statements as required by generally accepted accounting principles, this could impact the City's ability to report financial data reliably such that there is more than a remote likelihood that a misstatement of the City's financial statements that is more than inconsequential will not be prevented or detected. We recommend that the City evaluate the benefits of preparing its own financial statements at year end against the cost to do so. Management Response: This has been discussed and the Finance Department would like to begin preparing the City's financial statements. However, our current number of staff and software capabilities present obstacles in achieving this. We will continue to re-evaluate this as staffing changes and consider this as being one of our goals within the next two years. Segregation of Duties over Payroll The person who processes payroll also has the ability to enter new employees into the payroll system. These duties are considered incompatible and should not be performed by the same person. Although department manager reviews of budgetary comparison reports acts as a mitigating control, there is still an increased risk that fraud could occur and go undetected. We recommend the City implement policies and procedures whereby the duties of entering new employees into the payroll system and the processing of payroll are properly segregated. This will help reduce the likelihood of fraud from occurring and going undetected. Management Response: The Human Resources Department will begin setting up new employees in the payroll system upon initial employment orientation for newly hired employees. Improve Controls Over Utility Billing Rates On September 23, 2008, the City Council approved Ordinance No. 2008-44, establishing a rate increase for water and sewer services effective October 1, 2008; however these rate increases were not implemented during fiscal year 2009. As a result, the City utility services were under billed by an undetermined amount. City of Wylie, Texas February 15, 2010 Page 3 We recommend that the City implement internal controls over changes to the City's utility billing rates. These controls should be formally documented and duties should be adequately segregated to ensure that only properly authorized rate changes are made. Management Response: The City has implemented follow-up meetings the day after Council meetings. Information from Council meetings, including changes to utility rates, will be relayed to departments at this time. The new rates will then be input into the computer system, and, following the first billing with the new rates, various customers will be manually checked to be certain they are being billed correctly. Utility Billing Adjustments There are presently no formal controls over utility billing adjustments. As a result, unauthorized billing adjustments or refunds could be made without detection. We recommend the City develop and implement formal controls over utility billing adjustments. This will help reduce the likelihood that unauthorized billing adjustments could be made and go undetected. Management Response: A policy will be developed and implemented reflecting a more structured approval of adjustments to utility customer accounts than the current policy where approvals are done via e-mail. Approval levels will be dependent upon the amount of the adjustment. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the City's internal control. Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section, and would not necessarily identify all deficiencies in the internal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. However, we believe that the significant deficiencies described above are not material weaknesses. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. City of Wylie, Texas February 15, 2010 Page 4 However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of or our tests disclosed no instances of noncompliance that is required to be reported under Government Auditing Standards. We noted certain matters that we reported to management of the City, in a separate letter dated February 23, 2010. This report is intended for the information of the City Council, management, and others within the City, and is not intended to be used and should not be used by anyone other than these specified parties. ,a./2/044°1'1( WEAVER AND TIDWELL, L.L.P. Dallas, Texas February 15, 2010 CITY OF WYLIE, TEXAS MANAGEMENT LETTER YEAR ENDED SEPTEMBER 30, 2009 • weaverj - February 15, 2010 To the City Manager and Director of Finance CITY OF WYLIE Wylie, Texas Management of the City of Wylie, Texas (the City) is responsible for establishing and maintaining the City's internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The City's internal control structure consists of policies and procedures established by management to provide reasonable, but not absolute, assurance that the financial data are recorded, processed, summarized, and reported consistent with the assertions embodied in the financial statements. In establishing those policies and procedures, management assesses their expected benefits and related costs. Because of the inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any assessment of the internal control structure to future periods is subject to the risk that policies or procedures may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. In planning and performing our audit of the City's basic financial statements for the year ended September 30. 2009, we considered its internal control structure in order to plan our auditing procedures for the purpose of expressing our opinion on the basic financial statements and not to provide assurance on the internal control structure. Our report on compliance and on internal control over financial reporting is documented in a separate letter dated February 8, 2010. However, certain matters came to our attention that we wish to report to you. These matters, which were considered by us during our audit of the financial statements and do not modify the opinion expressed in our report dated February 15, 2010, are presented in the following paragraphs. Internal Service Fund The City presently utilizes an internal service fund to record the balances and activity associated with its Fleet Replacement Fund. As of September 30, 2009, the fund had approximately $3.2 million in assets, including a cash balance of nearly $940,000. There were no operating revenues reported in the Fund for the fiscal year ended September 30, 2009. Generally accepted accounting principles state that internal service funds are expressly designed to function as cost-reimbursement devices. Internal service funds are simply a means of accumulating costs of a given activity, so that the costs can be allocated to the benefiting funds in the form of charges or fees. Accordingly, the use of an internal service fund is not appropriate for activities that a government only partially intends to finance through charges and fees. Otherwise, costs could be permanently stranded in internal service funds. AN INDEPENDENT WEAVER AND TIDWELL LLP DALLAS MEMBER OF BAKER TILLY CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 12221 MERIT DRIVE,SUITE 1400,DALLAS,TX 75251 INTERNATIONAL WWW.WEAVERLLP.COM P:(972)490 1970 F:(972)702 8321 City of Wylie, Texas February 15, 2010 Page 2 Consequently, internal service funds are only appropriate if a government intends to recover the full cost of providing a given activity. Significant surpluses or deficits could be evidence that indicate that the participating funds are not properly reporting the costs of the goods or services they receive from the internal service fund. We recommend the City review its Fleet Replacement Fund, and budget future activity so that costs are being appropriately allocated to the funds that are befitting from them. Management Response: The City will review the Fleet Replacement Fund as part of our budget process this fiscal year and make certain all equipment to be replaced from this fund is properly accounted for in the fund. Any excess funds remaining in the Fleet Replacement Fund will be transferred back to the proper fund. Future transfers into the fund will be made to reflect appropriate use of the fund. This report is intended solely for the information and use of the City and its management. This restriction is not intended to limit the distribution of this letter and the accompanying memorandum, which, upon issuance to the City, are a matter of public record. If we may be of assistance in further discussion of the above comments and recommendations, please call upon us. We appreciate the opportunity to be of service to you and the courtesies and cooperation extended to us during our audit. WEAVER AND TIDWELL, L.L.P. I I CITY OF WYLIE SUMMARY REPORT TO CITY COUNCIL YEAR ENDED SEPTEMBER 30, 2009 • 1 1 1 i • i • • • • • • weaver To the City Council City of Wylie Wylie,TX We have completed our audit of the financial statements of the City of Wylie as of and for the year ended September 30, 2009. Professional standards require that we provide you with the following information related to our audit. Our Responsibility under U.S. Generally Accepted Auditing Standards and Government Auditing Standards 5 As stated in our engagement letter dated May 1, 2009, our responsibility, as described by professional standards, is to express opinions about whether the fmancial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not 5 relieve you or management of your responsibilities. In planning and performing our audit,we considered the City's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our S opinions on the financial statements and not to provide assurance on the internal control over financial reporting. As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement,we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants,noncompliance with which could have a direct and material ' effect on the determination of financial statement amounts. However,providing an opinion on compliance with those provisions was not an objective of our audit. Other Information in Documents Containing Audited Financial Statements Our responsibility for other information, including required supplementary information and the statistical section of the City's comprehensive annual financial report does not extend beyond the r financial information identified in the report. We applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However,we did not audit the information. Nothing came to our attention that caused us to believe that such information is materially inconsistent with the manner of its presentation appearing in the financial statements. Planned Scope and Timing of the Audit We performed the audit according to the planned scope and timing previously communicated. • AN INDEPENDENT WEAVER AND TIDWELL LLP DALLAS MEMBER OF BAKER TILLY CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 12221 MERIT DRIVE,SUITE 1400,DALLAS,TX 75251 io INTERNATIONAL WWW.WEAVERLLP.COM P:(972)490 1970 F:(972)702 8321 1 CIF 4 4 4 City of Wylie February 23,2010 Page 2 I Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements.No new accounting policies were adopted and the application of existing policies was not changed during the fiscal year ending September 30,2009. We noted no transactions entered • into by the City during the year for which there is a lack of authoritative guidance or consensus. • There are no significant transactions that have been recognized in the financial statements in a different period than when the transaction occurred. • • Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events • affecting them may differ significantly from those expected. The most sensitive estimates 11 affecting the financial statements were: Management's estimates relating to the allowance for uncollectible receivables for property taxes and utility services. We evaluated the key factors and assumptions used to develop the • allowances in determining that they are reasonable in relation to the basic financial statements taken as a whole. • Management's estimates of useful lives in calculating depreciation on capital assets. We evaluated the key factors and assumptions used to develop the estimate in determining that it • is reasonable. • Difficulties Encountered in Performing the Audit a We encountered no significant difficulties in dealing with management in performing and • completing our audit. • Corrected and Uncorrected Misstatements a • Professional standards require us to accumulate all known and likely misstatements identified • during the audit, other than those that are trivial, and communicate them to the appropriate level of management. There were no material misstatements detected that were corrected by • management. • a 3 a a City of Wylie February 23,2010 Page 3 I The schedule below summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate,to the financial statements taken as a whole. Account Description Debit Credit • Proposed JE# 1025 • Correct client entry that recorded street depreciation backwards. • 911-5411-57610 Dep Expense Streets Dept 27,019.00 911-1000-16331 ACCUM DEPREC-IMPROVE O/T 27,019.00 • Total 27,019.00 27,019.00 • Proposed JE# 1027 • Record OPEB Liability • 921-5999-10000a ANNUAL OPEB COST-GENERAL GOV 4,736.00 • 921-5999-20000a ANNUAL OPEB COST-PUBLIC SAFETY 19,889.00 921-5999-30000a ANNUAL OPEB COST-URBAN DEV 2,395.00 10 921-5999-40000a ANNUAL OPEB COST-STREETS 1,381.00 921-5999-50000a ANNUAL OPEB COST-COMMUNITY SERVICE 3,120.00 • 921-2000-22555a NET OPEB LIABILITY 31,521.00 • Total 31,521.00 31,521.00 Proposed JE# 4001 Record estimated amount of underbilled revenue. • • 611-1000-11541 ACCTS REC-WATER SALES 125,708.00 611-1000-11542 ACCTS REC-SEWER SALES 30,055.00 • 611-4000-44511 WATER SALES 125,708.00 611-4000-44512 SEWER SALES 30,055.00 • Total 155,763.00 155,763.00 111 ID Disagreements with Management For purposes of this letter,professional standards define a disagreement with management as a financial accounting,reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to O report that no such disagreements arose during the course of our audit. . Management Representations We have requested certain representations from management that are included in the management representation letter dated February 15,2010. p p p p + City of Wylie February 23, 2010 Page 4 • Management Consultations with Other Independent Accountants * In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a"second opinion" on certain situations. If a consultation involves the application of an accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that • the consultant has all the relevant facts. To our knowledge, there were no such consultations with • other accountants. • Other Audit Findings or Issues • We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. ID This information is intended solely for the use of the City Council and management of the City of Wylie, and is not intended to be and should not be used by anyone other than those specified parties. i • Very truly yours, • 111 WEAVER AND TIDWELL, L.L.P. r r r r ' fr COMPREHENSIVE Annual Financial Report City of Wylie TEXAS September 30, 2009 CITY OF WYLIE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2009 AS PREPARED BY THE FINANCE DEPARTMENT CITY OF WYLIE,TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2009 TABLE OF CONTENTS Exhibit Page I. INTRODUCTORY SECTION Letter of Transmittal GFOA Certificate of Achievement v Organization Chart vi City Officials vii II. FINANCIAL SECTION Independent Auditor's Report 1 A. MANAGEMENTS DISCUSSION AND ANALYSIS 3 B. BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Assets A-1 13 Statement of Activities A-2 14 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet A-3 16 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets A-4 18 Statement of Revenues, Expenditures,and Changes in Fund Balance A-5 19 Reconciliation of the Governmental Funds Statement of Revenues,Expenditures and Changes in Fund Balance to the Statement of Activities A-6 20 Proprietary Fund Financial Statements Statement of Net Assets A-7 22 Statement of Revenues, Expenses,and Changes in Fund Net Assets A-8 24 Statement of Cash Flows A-9 25 Notes to the Basic Financial Statements 26 C. REQUIRED SUPPLEMENTARY INFORMATION Statement of Revenues, Expenditures,and Changes in Fund Balance- Budget(GAAP Basis)and Actual-General Fund A-10 53 Notes to Required Supplementary Information 55 D. COMBINING AND BUDGETARY FUND FINANCIAL STATEMENTS AND SCHEDULES Major Governmental Funds General Obligation Debt Service Fund A-11 57 Nonmajor Governmental Funds Combining Balance Sheet B-1 60 Combining Statement of Revenues,Expenditures,and Changes in Fund Balance B-2 62 TABLE OF CONTENTS—CONTINUED Nonmajor Special Revenue Funds Budgetary Comparison Schedules: 4B Sales Tax Revenue Fund C-1 64 Park Acquisition and Improvement C-2 65 Emergency Communication Fund C-3 66 Fire Training Center C-4 67 Municipal Court Technology Fund C-5 68 Municipal Court Building Security Fund C-6 69 Hotel Tax Fund C-7 70 Public Arts Fund C-8 71 Nonmajor Debt Service Funds Budgetary Comparison Schedules: 4B Debt Service 1996 D-1 72 4B Debt Service 2005 D-2 73 III. STATISTICAL SECTION Table Net Assets By Component 1 76 Expenses,Program Revenues,and Net(Expense)/Revenue 2 78 General Revenues and Total Change in Net Assets 3 80 Fund Balances of Governmental Funds 4 82 Changes in Fund Balances of Governmental Funds 5 84 Tax Revenues by Source,Governmental Funds 6 86 Assessed Value and Estimated Actual Value of Taxable Property 7 88 Direct and Overlapping Property Tax Rates 8 90 Principal Property Tax Payers 9 91 Property Tax Levies and Collections 10 92 Taxable Sales by Category 11 93 Direct and Overlapping Sales Tax Revenue 12 94 Ratios of Outstanding Debt by Type 13 95 Ratios of General Bonded Debt Outstanding 14 96 Direct and Overlapping Governmental Activities Debt 15 97 Legal Debt Margin Information 16 98 Pledged-Revenue Coverage 17 99 Demographic and Economic Statistics 18 100 Principal Employers 19 102 Full-Time Equivalent Employees by Function/Program 20 103 Operating Indicators by Function/Program 21 104 Capital Asset Statistics by Function/Program 22 106 INTRODUCTORY SECTION February 23,2010 The Honorable Eric Hogue, Mayor Members of the City Council And the Citizens City of Wylie,Texas Financial policies of the City of Wylie require that the City's Finance Department prepare a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Accordingly,the Comprehensive Annual Financial Report(CAFR)for the City of Wylie,Texas for the fiscal year ended September 30,2009, is hereby issued. This report consists of management's representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making the representations, management of the City has established a comprehensive internal control framework that is designed both to protect the City's assets from loss,theft,or misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute assurance, that the financial statements will be free from material misstatement. As management,we assert that,to the best of our knowledge and belief,this financial report is complete and reliable in all material respects. The City's financial records have been audited by Weaver and Tidwell, LLP, Certified Public Accountants, as required by the City Charter. This CAFR has been prepared based upon those audited records. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended September 30, 2009, are free of material misstatement. This independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City's financial statements for the fiscal year ended September 30, 2009, are fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the financial section of this report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditor. Profile of the City The City of Wylie is located in the south central portion of Collin County, approximately 23 miles northeast of downtown Dallas. Incorporated in 1887, the City adopted its Home Rule Charter on January 19, 1985, and operates under a council-manager form of govemment. The City Council is comprised of a Mayor and six council members. All members are elected at-large on a staggered and nonpartisan basis for three-year terms. They are responsible to enact local legislation, provide policy, and annually adopt the operating budget. They appoint the City Manager, City Attorney, Judge of the Municipal Court and members of various boards and commissions. The City Manager, under the oversight of the City Council, is responsible for the proper administration of the daily operations of the City. The City provides a full range of municipal services including general government, public safety (police, fire, and emergency communications), streets, library, parks and recreation, planning and zoning, code enforcement, animal control, and water and sewer utilities. Sanitation services are provided by the City but are privately contracted. The Wylie Economic Development Corporation (WEDC) is included in the financial statements as a discrete component unit. Its purpose is to aid, promote and further economic development within the City. The Wylie Park and Recreation Facilities Development Corporation(4B Corporation)is also combined within the financial statements of the City. Both WEDC and the 4B Corporation are primarily funded with sales tax revenues. Both corporations are discussed more fully in the notes to the financial statements. The annual budget of the City serves as the foundation for its financial plan and control. The budget is proposed by the City Manager and adopted by the City Council in accordance with policies and procedures established by the City Charter, ordinances and state law. The budget process begins each year with a budget message from the City Manager highlighting the objectives to be used in developing departmental budgets. The departmental budgets are then reviewed by the City Manager and a proposed budget is prepared for presentation to the City Council. The City Council reviews the budget in subsequent work sessions and a formal budget is prepared and made available to the public for review by August 5th each year. Prior to official adoption of the budget by council, public hearing on the proposed budget is held to allow for public input. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Wylie operates. Local economy Fast paced growth has, in recent years, been one of the identifying characteristics of the City. However, the growth has slowed in accordance with current economic conditions. The 2009 population of the City has been estimated to be 38,300. This is approximately the same as the previous year. The slowdown in growth has also brought about a reduction in residential construction. Residential construction permits decreased by 49% from the previous year of 500 permits. For the year ending September 30, 2009 the city issued 253 permits. When both residential and commercial growth is considered our total tax base grew by 7.88% over the previous year. Our taxable assessed value this year, as provided by the Collin Central Appraisal District, Dallas Central Appraisal District and Rockwall Central Appraisal District was$2,184,235,238. While the City growth rate has declined, the City still maintains a favorable economic environment and is recognized as one of the fastest growing areas in Collin County and the Dallas-Ft.Worth Metroplex. Long-term financial planning In 2006, the City developed a Long-Range Financial Plan. The plan included street and park improvements, a new city hall, library, fire station, recreation center and sidewalks. The voters of the City of Wylie authorized the City to issue$73,950,000 in General Obligation Bonds to fund this capital improvement program. The first series of General Obligation bonds were sold in late March of 2006 and the remaining bonds were sold in August of 2008. Cash management The City currently utilizes JP Morgan/Chase Bank and American National Bank as the main depositories. All City funds are deposited into the JP Morgan/Chase depository on a daily basis. Once checks and credit card purchases have cleared, the money is transferred to the American National Bank depository for payroll and accounts payable check processing. All deposits are secured by allowable securities and held as collateral in the City's account at the Federal Reserve Bank- Boston. The market value of the pledged collateral are equal to or greater than 102% of the principal and accrued interest for cash balances in excess of the FDIC insurance coverage. City officials are allowed by the City Investment Policy and Texas statutes to invest cash balances during the year. The three overall objectives of the City's investment policy, in their order of importance, are the preservation and safety of principal, liquidity and yield. At September 30, 2008, the fair market value of the City's investment portfolio was$103,464,566. The City has a Local Investment Program in which the City purchases Certificates of Deposits from local banks using competitive bid procedures.As of September 30, 2009 the program held$4,108,392 in Certificates of Deposit with local banks. Risk management The City is exposed to various risk of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. During FY2009, the City purchased general liability, property, public official and police professional liability insurance from the Texas Municipal League Intergovernmental Risk Pool (the Pool). In addition, the City's workers' compensation insurance is also with the Pool. United Healthcare provided employee group medical coverage for FY2009. Employees have the option of providing for any family coverage. The Texas Workforce Commission provides unemployment benefits to former eligible employees. Retirement system The City provides pension benefits to all full-time employees through a nontraditional,joint contributory defined benefit plan administered by the Texas Municipal Retirement System, an agent multiple- employer public retirement system. Pension expense for the calendar year ended December 31, 2008,(including prior service costs amortized over 25 years)was$1,222,581. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Wylie for its comprehensive annual financial report(CAFR)for the fiscal year ended September 30,2008. The City has participated in the program for many years and has been awarded the Certificate numerous times. In order to be awarded a Certificate of Achievement, the government must publish an easily readable and efficiently organized CAFR. This report must satisfy both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. iii The preparation of this report could not be accomplished without the dedicated services of the entire staff of the Finance Department. We would also like to express our appreciation to all staff members who assisted and contributed to the preparation of this report. Acknowledgement is also given to representatives of Weaver and Tidwell, LLP, Certified Public Accountants for their dedicated assistance in producing this report. Special acknowledgement is given to the City Manager, Mayor and the members of the City Council for their support for maintaining the highest standards of professionalism in the management of the City of Wylie finances. Respectively submitted, Linda Vaughan Melissa Beard Finance Director Assistant Finance Director iv Certificate of Achievement for Excellence in Financial Reporting Presented to City of Wylie Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30,2008 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 financial reports(CAFRs)achieve the highest stondards in government accounting and financial reporting. k AIN irod. 0.0 President - i9001, Executive Director CITY OF WYLIE ORGANIZATIONAL CHART kkayor City R Vim• • cab Servces aapnm� c sit era r France eaa7 L <, Lamy 141"1"n42' Pans .r��.a* t&exscesaaa vi CITY OF WYLIE, TEXAS PRINCIPAL OFFICIALS September 30,2009 City Council Eric Hogue, Mayor M. G. "Red" Byboth, Mayor Pro Tem David Goss, Councilmember Kathy Spillyards, Councilmember Bennie Jones, Councilmember Rick White, Councilmember Carter Porter, Councilmember City Staff Mindy Manson, City Manager Jeff Butters,Assistant City Manager Carole Ehrlich, City Secretary Linda Vaughan, Director of Finance John Duscio, Police Chief Randy Corbin, Fire Chief Chris Hoisted, City Engineer Mike Sferra, Public Services Director Rachel Orozco, Library Director Mike McAnnally, Building Director Renae' 011ie, Planning Director Sam Satterwhite,WEDC Director Other Appointed Officials Weaver and Tidwell, LLP,Auditors Abernathy, Roeder, Boyd &Joplin, PC, City Attorney Fulbright&Jaworski, LLP, Bond Counsel First Southwest Company, Financial Advisors • vii This page is intentionally left blank FINANCIAL SECTION This page is intentionally left blank weaver INDEPENDENT AUDITOR'S REPORT Members of the City Council City of City of Wylie, TX We have audited the accompanying financial statements of the governmental activities, business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Wylie (the City) as of and for the year ended September 30, 2009, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's administration. Our responsibility is to express an opinion on these basic financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the basic financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the government activities, business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City as of September 30, 2009, and the respective changes in financial position and cash flows, where applicable, thereof, for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated February 15, 2010, on our consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of the testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The accompanying management's discussion and analysis (on pages 3 through 9) and budgetary comparison information (pages 53 through 55) are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. i 1NDEF'>:N F NT WEAVER AND TI0WEL L LLP DALLAS MEMBER F PAA=R TITL`v C[R ITIED PIRTDASCOUNTANTSANd CONDIYANTS 12221'}ERIT F CAE Cil1TE ' )0 DALLAS.TX= 251 r1TFOXAT ONAL 0v`1WWEA'ERtLPCDT" 1 F 40)1920 ;9 _, K321 City of Wylie, TX February 15, 2010 Page 2 Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the City of Wylie's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical tables listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated, in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. WEAVER AND TIDWELL, L.L.P. Dallas, Texas February 15, 2010 2 City of Wylie, Texas Management's Discussion and Analysis September 30, 2009 As management of the City of Wylie, we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended September 30, 2009. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages one through four of this report. Financial Highlights • The assets of the City exceeded its liabilities at the close of the fiscal year ended September 30,2009, by $160,056,812 (net assets). Of this amount, $28,184,633 (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 $7,732,274. The increase is attributable to increases in revenues, particularly ad valorem taxes, accompanied by only a small increase in expenditures. • The City's governmental funds reported combined ending fund balances of$82,380,557, a decrease of$16,090,478 in comparison to the previous year. The decrease is due primarily to expenditures on capital projects. • The unreserved portion of the General Fund fund balance at the end of the year was $9,917,733 or 47%of total General Fund expenditures and transfers out. • Total debt of the City decreased by $4,321,316 during the fiscal year due to payments on bonded debt. • Working capital increased in the Utility Fund by $426,476 in comparison to the previous year. An application of impact fees for debt service expenses in relation to the Muddy Creek Wastewater Treatment Plant accounts for most of the increase. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of Wylie's finances. This is done in a manner similar to a private- sector business. Two statements, the Statement of Net Assets and the Statement of Activities, are utilized to provide this financial overview. 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 government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flow. 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 eamed but unused vacation leave). Both of the government-wide statements distinguish between governmental activities and business-type activities. Governmental activities basically account for those activities supported by taxes and intergovernmental revenues. On the other hand, business-type activities are basically supported by user fees and charges. Most City services are reported in governmental activities while business-type activities are reported in the Enterprise Fund. 3 City of Wylie, Texas Management's Discussion and Analysis September 30, 2009 The government-wide statements include not only the City but also a discrete component unit, the Wylie Economic Development Corporation (WEDC). Although legally separate, WEDC is financially accountable to the City. Fund financial statements. The City, like other state and local governments, utilizes fund accounting to ensure and demonstrate compliance with finance-related legal requirements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains twenty individual governmental funds. Information is presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances for the General Fund and the General Obligation Debt Service Fund. All Capital Projects Funds are combined for a single, aggregated presentation. Data from the other non-major funds are also combined and reported in a single column. Individual fund data for each of the non-major governmental funds is provided in the form of combining statements elsewhere in this report. Proprietary funds. The City maintains two types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses an enterprise fund to account for its water and sewer operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses an internal service fund to account for its fleet of vehicles and certain specialized mobile equipment. Proprietary funds financial statements provide the same type of information as the government-wide financial statements, only in more detail. Notes to the financial statements. The notes provide additional information that is essential to gain a full understanding of the data provided in the government-wide and fund financial statements Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information. Required supplementary information can be found after the notes to the financial statements. Government-Wide Financial Analysis At the end of fiscal year 2009, the City's net assets (assets exceeding liabilities) totaled $160,056,812. This analysis focuses on the net assets(Table 1)and changes in net assets(Table 2). Net Assets. The largest portion of the City's net assets, $124,534,040, or 77.81%, reflects its investment in capital assets (land, buildings, improvements other than buildings, machinery and equipment, construction in progress), less any related debt used to acquire those assets that is still outstanding. The City uses these 4 City of Wylie, Texas Management's Discussion and Analysis September 30, 2009 assets to provide services to its citizens, consequently, these assets are not available for future spending. Although the City reports its capital assets net of related debt,the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City's net assets, $7,338,139, or 4.6% represents resources that are subject to external restrictions on how they may be used. The unrestricted net assets of$28,184,633(17.61%) may be used to meet the government's ongoing obligations to citizens and creditors. Table 1 Condensed Statement of Net Assets Governmental Business-type Activities Activities Total 2009 2008 2009 2008 2009 2008 Current and other assets $ 90,499,903 $ 104,224,007 $ 25,072,200 $ 24,977,272 $ 115,572,103 $ 129,201,279 Capital assets 133,469,583 113,688,122 43,312,533 43,933,842 176,782,116 157,621,964 Total Assets 223,969,486 217,912,129 68,384,733 68,911,114 292,354,219 286,823,243 Long tens liabilites 112,161,155 115,613,013 13,176,474 14,045,932 125,337,629 129,658,945 Other liabilities 6,076,233 3,984,617 883,545 855,143 6,959,778 4,839,760 Total liabilities 118,237,388 119,597,630 14,060,019 14,901,075 132,297,407 134,498,705 Net Assets: Invested in capital assets, 87,367,632 81,535,501 37,166,408 37,155,724 124,534,040 118,691,225 net of related debt Restricted for debt service - - 322,849 322,849 322,849 322,849 Restricted for capital projects - - 7,015,290 7,137,775 7,015,290 7,137,775 Unrestricted 18,364,466 16,778,998 9,820,167 9,393,691 28,184,633 26,172,689 Total Net Assets $ 105,732,098 $ 98,314,499 $ 54,324,714 $ 54,010,039 $ 160,056,812 $ 152,324,538 Changes in Net Assets. The net assets of the City increased by $7,732,274 for the fiscal year ended September 30,2009. Governmental Activities. Governmental activities increased the City's net assets by $7,417,599 from the prior year. This was generated primarily by increased ad valorem tax revenue and moderate building activity. Business-type Activities. Net assets from business-type activities increased by $314,675 from the prior year. Increased utility revenues from the growth of our customer base was primarily responsible for this increase in net assets. 5 City of Wylie, Texas Management's Discussion and Analysis September 30, 2009 Table 2 Changes in Net Assets Governmental Business-type Activities Activities Total 2009 2008 2009 2008 2009 2008 Revenues: Program revenues: Charges for services $ 4,232,407 $ 4,560,265 $ 10,172,309 $ 9,508,602 $ 14,404,716 $ 14,068,867 Operating grants and contributions 264,209 405,557 - - 264,209 405,557 Capital grants and contributions 5,731,359 2,200,423 51,500 1,154,027 5,782,859 3,354,450 General revenues: Ad valorem taxes 20,391,128 15,540,800 - - 20,391,128 15,540,800 Sales taxes 3,933,650 3,892,994 - - 3,933,650 3,892,994 Other taxes and fees 2,391,509 1,963,797 - - 2,391,509 1,963,797 Interest 924,047 1,926,928 299,563 786,986 1,223,610 2,713,914 Gain(loss)disposal of capital assets 10,769 34,396 - - 10,769 34,396 Miscellaneous 297,601 215,192 579,455 40,082 877,056 255,274 Total revenues 38,176,679 30,740,352 11,102,827 11,489,697 49,279,506 42,230,049 Expenses: General Government 3,485,356 5,861,991 - - 3,485,356 5,861,991 Public Safety 11,585,582 10,502,873 - - 11,585,582 10,502,873 Urban Development 1,178,655 1,061,318 - - 1,178,655 1,061,318 Streets 6,761,308 4,871,088 - - 6,761,308 4,871,088 Community Service 3,325,813 3,248,168 - - 3,325,813 3,248,168 Interest on long-term debt 4,872,366 3,068,061 - - 4,872,366 3,068,061 Water and sewer operations - - 10,338,152 10,219,481 10,338,152 10,219,481 Total expenses 31,209,080 28,613,499 10,338,152 10,219,481 41,547,232 38,832,980 Increase in net assets before 6,967,599 2,126,853 764,675 1,270,216 7,732,274 3,397,069 transfers Transfers 450,000 450,000 (450,000) (450,000) - - Increase in net assets 7,417,599 2,576,853 314,675 820,216 7,732,274 3,397,069 Net assets-October 1,2008 98,314,499 95,737,646 54,010,039 53,189,823 152,324,538 148,927,469 Net assets-September 30,2009 $ 105,732,098 $ 98,314,499 $ 54,324,714 $ 54,010,039 $ 160,056,812 $ 152,324,538 Government-Wide Financial Analysis Governmental funds. The focus of the City's governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, 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 combined fund balances of $82,380,557. 6 City of Wylie, Texas Management's Discussion and Analysis September 30, 2009 Table 3 Capital Assets at Year-end Net of Accumulated Depreciaton(000's) Governmental Activities Business-Type Activities Total Asset 2009 2008 2009 2008 2009 2008 Land $ 29,461 $ 26,364 $ 59 $ 59 $ 29,520 $ 26,423 Other non-depreciable assets 400 - - - 400 - Buildings 1,981 2,074 149 157 2,130 2,231 Improvements 70,129 73,116 39,559 40,257 109,688 113,373 Machinery and equipment 3,105 3,406 51 12 3,156 3,418 Construction in progress 28,394 8,729 3,494 3,448 31,888 12,177 $ 133,470 $ 113,689 $ 43,312 $ 43,933 $ 176,782 $ 157,622 Additional information on the City's capital assets can be found in the notes to the financial statements on pages 37-38. Debt Administration. At the end of the current fiscal year, the City of Wylie had total debt outstanding of $124,247,320. Of this amount, $120,369,077 comprises bonded debt backed by the full faith and credit of the City. $2,940,000 represents bonds secured solely by self-supporting activities. $850,000 represents debt backed by sales tax revenues and $88,243 represents unamortized premiums and net deferred loss on refunding. Table 4 Outstanding Debt at Year End(000's) Governmental Activities Business-Type Activities Total Type of Debt 2009 2008 2009 2008 2009 2008 General Obligation $ 87,288 $ 89,884 $ 2,047 $ 2,391 $ 89,335 $ 92,275 Combination Tax&Revenue 21,855 22,560 7,280 7,550 29,135 30,110 Contractual Obligations 1,055 1,287 844 931 1,899 2,218 Loans Payable/PPFCO - - - - - - Sales Tax Revenue 850 945 - - 850 945 Water&Sewer Revenue - - 2,940 3,125 2,940 3,125 Unamortized premium(discount) 330 348 (70) (74) 260 274 Deferred loss(gain)on refunding (162) (192) (10) (7) (172) (199) Total $ 111,216 $ 114,832 $ 13,031 $ 13,916 $ 124,247 $ 128,748 8 City of Wylie, Texas Management's Discussion and Analysis September 30, 2009 The City did not issue any new bonds during the fiscal year. However,the City continues to maintain favorable ratings from bond rating agencies. A review during the fiscal year by Moody's Investors Service yielded a rating increase on the City's revenue bonds from Baal to A3. The current General Obligation, Combination Tax and Revenue Certificates of Obligation,and Revenue Bonds ratings are as follows. Moody's Standard Investors Service &Poor's General obligation bonds A2 A+ Certificates of obligation A2 A+ Revenue bonds A3 A+ Additional information on the City's long-term debt can be found in the notes to the financial statements on pages 40-44. Economic Factors and Next Years's Budgets and Rates During FY2009, 253 building permits were issued. Although the community has grown substantially in the last five years, the growth has experienced a marked slowdown in accordance with current economic conditions. However, an increase of $38,381,856 in the assessed valuation of taxable property was still noted from FY2009 to FY2010. Our growth pattern is projected to continue into FY2010 at the more modest rate evident in FY 2009. The current slow down had a significant impact in the development of the FY2010 operating budget. In FY2010, General Fund revenues and expenditures are budgeted to decrease by 1.78% and 0.48% prior to other financing sources and transfers out, respectively, over FY2009 revenues and expenditures. This will provide a 37%estimated fund balance at FY2010 year-end which is larger than the 25%normally targeted. Water and Sewer Fund operating revenues are budgeted to increase by 2.4% over FY2009 revenues and operating expenses are projected to increase by 1.8%from FY2009. The FY2010 budget includes a transfer of impact fees for debt service payments on the Muddy Creek Wastewater Treatment Plant bringing working capital balances up to acceptable levels. In the Utility Fund, water and sewer rates were adjusted for the 2010 budget year to compensate for increased water and sewer charges from North Texas Municipal Water District. During FY2006, voters authorized the City to issue $73,950,000 in bonds. $35,325,000 was issued in 2006 with the remaining$38,625,000 issued in 2008. Although the tax rate was unchanged from FY2009 to FY2010, the issuance of these bonds is projected to cause an increase in the I & S tax rate to cover the principal and interest payments on the additional debt. 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 government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Department, 2000 Highway 78 North,Wylie, Texas, 75098. 9 This page is intentionally left blank 10 BASIC FINANCIAL STATEMENTS 11 This page is intentionally left blank 12 CITY OF WYLIE, TEXAS EXHIBIT A-1 STATEMENT OF NET ASSETS SEPTEMBER 30, 2009 Primary Government Governmental Business-type Component ASSETS Activities Activities Total Unit Cash and cash equivalents $ 87,191,813 $ 16,100,789 $103,292,602 $ 713,993 Receivables(net of allowance for uncollectibles) 2,475,304 1,695,592 4,170,896 666,081 Inventories 155,465 73,335 228,800 2,811,424 Prepaid items 2,375 2,375 - Restricted assets: Cash and cash equivalents - 4,268,629 4,268,629 - Receivables - 2,746,661 2,746,661 - Deferred charges 674,946 187,194 862,140 - Capital assets(net of accumulated depreciation): Land 29,460,518 59,141 29,519,659 - Other non-depreciable assets 400,000 - 400,000 - Construction in progress 28,393,575 3,493,527 31,887,102 - Buildings 1,980,913 148,587 2,129,500 - Improvement other than buildings 70,129,398 39,560,289 109,689,687 - Machinery and equipment 3,105,179 50,989 3,156,168 - Total Assets 223,969,486 68,384,733 292,354,219 4,191,498 LIABILITIES Accounts payable and other current liabilities 5,354,683 491,340 5,846,023 55,838 Unearned revenue - - - 323,526 Accrued interest payable 645,129 70,140 715,269 1,280 Due to other governments 76,421 - 76,421 - Liabilities payable from restricted assets - 322,065 322,065 - Non Current Liabilities: Due within one year 4,107,235 1,043,707 5,150,942 193,329 Due in more than one year: 108,053,920 12,132,767 120,186,687 1,038,774 Total Liabilities 118,237,388 14,060,019 132,297,407 1,612,747 NET ASSETS Invested in capital assets (net of related debt) 87,367,632 37,166,408 124,534,040 - Restricted for: Debt service - 322,849 322,849 - Capital Projects - 7,015,290 7,015,290 - Unrestricted 18,364,466 9,820,167 28,184,633 2,578,751 Total Net Assets $ 105,732,098 $ 54,324,714 $160,056,812 $ 2,578,751 The accompanying notes to the basic financial statements are an integral part of this statement. 13 CITY OF WYLIE, TEXAS STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2009 Program Revenues Operating Capital Charges for Grants and Grants and Function/Programs Expenses Services Contributions Contributions Primary Government Governmental Activities: General government $ 3,485,356 $ 2,164,172 $ 25,394 $ - Public safety 11,585,582 1,257,771 197,392 1,000 Urban development 1,178,655 558,461 - - Streets 6,761,308 - - 5,399,002 Community service 3,325,813 252,003 41,423 331,357 Interest on long-term debt 4,872,366 - - - Total governmental activities 31,209,080 4,232,407 264,209 5,731,359 Business-type activities: Utility 10,338,152 10,172,309 - 51,500 Total business-type activities 10,338,152 10,172,309 - 51,500 Total primary government $ 41,547,232 $ 14,404,716 $ 264,209 $ 5,782,859 Component unit: Wylie Economic Development Corp $ 777,518 $ 44,135 $ - $ - General revenues: Ad valorem taxes Sales taxes Franchise taxes Unrestricted Investment Earnings Miscellaneous income Gain(loss)on disposal of capital assets Transfers Total general revenues and transfers Change in net assets Net assets-Beginning Net assets-Ending The accompanying notes to the basic financial statements are an integral part of this statement. 14 EXHIBIT A-2 Net(Expense)Revenue and Changes in Net Assets Governmental Business-type Component Activities Activities Total Unit $ (1,295,790) $ - $ (1,295,790) $ - (10,129,419) - (10,129,419) - (620,194) - (620,194) - (1,362,306) - (1,362,306) - (2,701,030) - (2,701,030) - (4,872,366) - (4,872,366) - (20,981,105) - (20,981,105) - - (114,343) (114,343) - - (114,343) (114,343) - $ (20,981,105) $ (114,343) $ (21,095,448) $ - $ - $ - $ - $ (733,383) 20,391,128 - 20,391,128 - 3,933,650 - 3,933,650 1,298,336 2,391,509 - 2,391,509 - 924,047 299,563 1,223,610 5,829 297,601 579,455 877,056 521 10,769 - 10,769 - 450,000 (450,000) - - 28,398,704 429,018 28,827,722 1,304,686 7,417,599 314,675 7,732,274 571,303 98,314,499 54,010,039 152,324,538 2,007,448 $ 105,732,098 $ 54,324,714 $ 160,056,812 $ 2,578,751 15 CITY OF WYLIE, TEXAS BALANCE SHEET-GOVERNMENTAL FUNDS SEPTEMBER 30, 2009 General Obligation General Fund Debt Service ASSETS Cash and cash equivalents $ 10,295,202 $ 395,388 Receivables(net of allowance for uncollectibles): Ad valorem taxes 242,285 106,421 Franchise taxes 730,975 - Sales taxes 500,825 - Accounts 282,070 - Other 297,459 - Inventories, at cost 144,053 - Prepaid items 2,375 - Total assets $ 12,495,244 $ 501,809 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable $ 826,929 $ - Other payables and accruals 558,409 - Retainage payable - Due to other governments 76,421 - Deferred revenue 969,324 98,455 Total liabilities 2,431,083 98,455 FUND BALANCES: RESERVED FOR: Inventory 144,053 - Prepaids 2,375 - Debt service - 403,354 Unreserved,reported in: General fund, undesignated 9,917,733 - Special revenue funds - - Capital project funds - - Total fund balances 10,064,161 403,354 Total liabilities and fund balances $ 12,495,244 $ 501,809 The accompanying notes to the basic financial statements are an integral part of this statement. 16 EXHIBIT A-3 Capital Other Total Projects Governmental Governmental Fund Funds Funds $71,735,174 $ 3,827,456 $ 86,253,220 - - 348,706 - - 730,975 - 244,638 745,463 - - 282,070 - 70,631 368,090 - - 144,053 - - 2,375 $71,735,174 $ 4,142,725 $ 88,874,952 $ 2,583,510 $ 74,688 $ 3,485,127 30,138 588,547 1,276,521 - 1,276,521 - 76,421 - - 1,067,779 3,860,031 104,826 6,494,395 - - 144,053 - - 2,375 - 191,965 595,319 - - 9,917,733 - 3,845,934 3,845,934 67,875,143 - 67,875,143 67,875,143 4,037,899 82,380,557 $71,735,174 $ 4,142,725 $ 88,874,952 17 CITY OF WYLIE, TEXAS EXHIBIT A-4 RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS SEPTEMBER 30, 2009 Total fund balance-governmental funds balance sheet $ 82,380,557 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not current financial resources and therefore are not reported in the governmental funds balance sheet(less$2,292,335 in assets allocated to governmental actvities from the internal service fund). 131,177,248 Revenues earned but not available within sixty days of the fiscal year-end are not recognized as revenue in the fund financial statements. 1,067,779 Internal service funds are used by management to charge certain activities,such as fleet management,to individual funds.This amount represents the assets less the liabilities of the internal service fund allocated to governmental activities. 3,237,852 Interest payable on long-term debt does not require current financial resources,therefore interest payable is not reported as a liability in the governmental funds balance sheet. (645,129) Costs associated with the issuance of giovemmental long-term debt are expensed when incurred in the fund statements and capitalized and amortized over the life of the debt in the government-wide financial statements. 674,946 Long-term liabilities,including bonds payable,are not due and payable in the current period,and therefore are not reported in the fund financial statements. (112,161,155) NET ASSETS OF GOVERNMENTAL ACTIVITIES-statement of net assets $ 105,732,098 The accompanying notes to the basic financial statements are an integral part of this statement. 18 CITY OF WYLIE, TEXAS EXHIBIT A-5 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009 General Other Total Obligation Debt Capital Projects Governmental Governmental General Fund Service Fund Funds Funds REVENUES Ad valorem taxes $ 12,710,341 $ 7,599,681 $ - $ - $ 20,310,022 Sales taxes 2,608,214 - - 1,325,436 3,933,650 Franchise fees 2,136,664 - - - 2,136,664 Licenses and permits 488,290 - 572,305 - 1,060,595 Intergovernmental 664,128 - 1,571,355 249,874 2,485,357 Service fees 2,060,933 - - 609,135 2,670,068 Court fees 403,864 - - 23,382 427,246 Interest income 108,144 23,337 748,278 34,040 913,799 Miscellaneous income 317,748 2,991 - 242,012 562,751 Total Revenues 21,498,326 7,626,009 2,891,938 2,483,879 34,500,152 EXPENDITURES Current: General government 5,400,222 - - 42,078 5,442,300 Public safety 9,850,130 - - 1,192,477 11,042,607 Urban development 1,135,299 - - - 1,135,299 Streets 1,620,193 - - - 1,620,193 Community service 2,388,617 - - 728,925 3,117,542 Capital outlay - - 19,900,621 - 19,900,621 Debt Service: Principal - 3,321,403 - 306,500 3,627,903 Interest and fiscal charges - 4,897,428 - 258,752 5,156,180 Total expenditures 20,394,461 8,218,831 19,900,621 2,528,732 51,042,645 Excess(deficiency)of revenues over(under)expenditures 1,103,865 (592,822) (17,008,683) (44,853) (16,542,493) OTHER FINANCING SOURCES(USES) Transfers in 450,000 550,750 - 1,597,059 2,597,809 Transfers out (558,300) - (1,024,209) (565,300) (2,147,809) Proceeds from sale of property 2,015 - - - 2,015 Total other financing sources(uses) (106,285) 550,750 (1,024,209) 1,031,759 452,015 Net change in fund balances 997,580 (42,072) (18,032,892) 986,906 (16,090,478) Fund balances,October 1,2008 9,066,581 445,426 85,908,035 3,050,993 98,471,035 Fund balances,September 30,2009 $ 10,064,161 $ 403,354 $ 67,875,143 $ 4,037,899 $ 82,380,557 The accompanying notes to the basic financial statements are an integral part of this statement. 19 CITY OF WYLIE, TEXAS EXHIBIT A-6 RECONCILIATON OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2009 Net change in fund balances-total governmental funds. $ (16,090,478) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures.However,in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount of capital assets recorded in the current period. 24,360,503 Depreciation expense on capital assets is reported in the statement of activities but does not require the use of current financial resources.Therefore,depreciation expense is not reported as expenditures in the governmental funds(does not include$525,786 allocated from the internal service fund). (3,933,086) Loss on disposition of capital assets results in a reduction of net assets,but the net effect is not reported in governmental funds. (383,375) The repayment of the principal of long term debt consumes the current financial resources of governmental funds,but has no effect on net assets.The amortization of bond issuance costs,bond premiums,and deferred gain/loss on refunding of long term debt is reported in statement of activities bu does not require the use of current financial resources.Therefore the effect of the amortization of these various items are not reported in the statement of revenues,expenses,and changes in fund balance. This amount represents the net effect of the following items: o Repayments-3,627,903 o Amortization of premium on bonds, 18,109,less the amortization of debt issue costs(32,141)and deferred loss on refunding(29,651) 3,584,220 Current year changes in accrued interest payable and net OPEB liability do not require the use of current financial resources;and therefore,are not reported as expenditures in governmental funds. 283,814 Current year changes in the long-term liability for compensated absences do not require the use of current financial resources;and therefore,are not reported as expenditures in governmental funds. (164,503) Internal service funds are used by management to charge the costs of certain activities. such as fleet management,to individual funds.The net loss of the internal service fund is allocated entirely to governmental activities. (557,067) Certain revenues in the government-wide statement of activities that do not provide current financial resources are not reported as revenue in the governmental funds. 317,571 CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES-statement of activities S 7,417,599 The accompanying notes to the basic financial statements are an integral part of this statement. 20 This page left intentionally blank 21 CITY OF WYLIE , TEXAS STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30, 2009 Internal Enterprise Fund Service Fund Fleet Utility Fund Replacement ASSETS Current assets Cash and cash equivalents $ 16,100,789 $ 938,593 Accounts receivables(net of allowances for uncollectibles) 1,628,201 - Other receivables 67,391 - Inventories,at cost 73,335 11,412 Restricted assets Cash and cash equivalents 4,268,629 - Accounts receivable 2,746,661 - Total current assets 24,885,006 950,005 Non-current assets Deferred charges 187,194 - Capital assets: Land 59,141 - Buildings 268,801 - Waterworks system 28,942,433 - Sewer system 25,822,292 - Machinery and equipment 160,088 4,976,016 Construction in progress 3,493,527 - Accumulated depreciation (15,433,749) (2,683,681) Total capital assets(net of accumulated depreciation) 43,312,533 2,292,335 Total non-current assets 43,499,727 2,292,335 Total assets $ 68,384,733 $ 3,242,340 The accompanying notes to the basic financial statements are an integral part of this statement. 22 EXHIBIT A-7 Internal Enterprise Fund Service Fund Fleet Utility Fund Replacement LIABILITIES Current liabilities: Accounts payable $ 284,626 $ 4,488 Other payables and accruals 206,714 - Compensated absences payable-current 99,714 - General obligation bonds payable-current 354,656 - Combination bonds-tax and revenue-current 394,337 - Revenue bonds-current 195,000 - Accrued interest payable 70,140 - Customer deposits(payable from restricted assets) 306,881 - Restricted accounts payable Accounts payable 15,184 - Total current liabilities 1,927,252 4,488 Non-current liabilities: Compensated absences payable 45,510 - General obligation bonds payable 1,692,725 - Combination bonds-tax and revenue 7,729,665 - Revenue bonds payable 2,664,867 - Total noncurrent liabilities 12,132,767 - Total liabilities 14,060,019 4,488 NET ASSETS Invested in capital assets, net of related debt 37,166,408 2,292,335 Restricted for debt service 322,849 - Restricted for construction 7,015,290 - Unrestricted 9,820,167 945,517 Total net assets $ 54,324,714 $ 3,237,852 23 CITY OF WYLIE, TEXAS EXHIBIT A-8 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009 Enterprise Internal Service Fund Fund Fleet Utility Fund Replacement OPERATING REVENUES Water $ 4,846,077 $ - Sewer 4,508,066 - Penalties 163,618 - Water taps 294,613 - Sewer taps 297,660 Reconnect fees 62,275 - Total operating revenues 10,172,309 - OPERATING EXPENSES Water purchases 1,931,462 - Sewer treatment 3,416,478 - Utility administration 522,160 Water department 1,011,384 - Sewer department 492,550 - Utility billing 433,315 - Engineering 426,455 - Combined services 146,975 - Tools and equipment - 112,446 Depreciation and amortization 1,375,080 525,786 Total Operating Expenses 9,755,859 638,232 Operating income(loss) 416,450 (638,232) NON-OPERATING REVENUES(EXPENSES) Investment revenue 299,563 10,248 Miscellaneous income 579,455 62,163 Gain on sale of property - 8,754 Interest expense (582,293) - Total non-operating revenues(expenses) 296,725 81,165 Net income(loss)before transfers and contributions 713,175 (557,067) TRANSFERS AND CAPITAL CONTRIBUTIONS Capital contributions 51,500 - Transfers out (450,000) - Total transfers and capital contributions (398,500) - Change in net assets 314,675 (557,067) Net assets,October 1 54,010,039 3,794,919 Net assets,September 30 $ 54,324,714 $ 3,237,852 The accompanying notes to the basic financial statements are an integral part of this statement. 24 CITY OF WYLIE, TEXAS EXHIBIT A-9 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED SEPTEMBER 30, 2009 Internal Service Enterprise Fund Fund Utility Fund Fleet Replacement CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 11,074,809 $ - Cash receipts(payments)for interfund services to other funds - 62,163 Cash payments to employees for services (1,492,453) - Cash payments to other suppliers for goods and services (6,716,392) (107,255) Net cash provided by(used in)operating activities 2,865,964 (45,092) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers to other funds (450,000)Net cash provided by(used in)non-capital financing activities (450,000) - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal and interest paid (1,468,549) - Acquisition or construction of capital assets (740,034) (263,206) Proceeds from disposal - 8,754 Capital contributions 51,500 Net cash(used in)capital and related financing activities (2,157,083) (254,452) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends on investments 326,647 11,990 Net cash provided by investing activities 326,647 11,990 Net increase(decrease)in cash and cash equivalents 585,528 (287,554) Cash and cash equivalents at begininng of year 19,783,890 1,226,147 Cash and cash equivalents at end of year $ 20,369,418 $ 938,593 RECONCILIATION TO STATEMENT OF NET ASSETS Cash and cash equivalents $ 16,100,789 938,593 Restricted cash and cash equivalents 4,268,629 - Total cash and cash equivalents $ 20,369,418 $ 938,593 RECONCILIATION OF OPERATING INCOME(LOSS)TO NET CASH PROVIDED BY(USED IN)OPERATING ACTIVITIES Operating income(loss) $ 416,450 $ (638,232) Adjustments to reconcile operating income(loss)to net cash provided by(used in)operating activities: Depreciation and amortization 1,375,080 525,786 Miscellaneous income 579,455 62,163 Effects of changes in assets and liabilities: Decrease(increase)in receivables 322,432 - Decrease(increase)in inventories 10,620 2,560 Decrease(increase)in prepaids 250 - Decrease(increase)in restricted receivables 117,649 - Increase(decrease)in accounts payable (2,186) 2,631 Increase(decrease)in other payables and accruals 15,232 - Increase(decrease)in compensated absences 15,185 - Increase(decrease)in customer deposits 613 - Increase(decrease)in accounts payable from restricted assets 15,184 - Total adjustments 2,449,514 593,140 Net cash provided by(used in)operating activities $ 2,865,964 $ (45,092) NONCASH ITEMS Developer contributions of capital assets $ 51,500 $ - The accompanying notes to the basic financial statements are an integral part of this statement. 25 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Wylie (the City) was incorporated in 1848. The City operates under a Council-Manager form of government as a duly incorporated home rule city as authorized under the constitution of the State of Texas, and provides the following services: public safety (police and fire), streets, water, sewer and sanitation, public improvements, culture, planning and zoning, parks and recreation, and general administrative services. The City reports in accordance with accounting principles generally accepted in the United States of America (GAAP) as established by the Governmental Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB). The accounting and reporting framework and the more significant accounting principles and practices are discussed in subsequent sections of this Note. The remainder of the notes are organized to provide concise explanation, including required disclosures of budgetary matters, assets, liabilities, fund equity, revenues, expenditures/expenses, and other information considered important to gaining a clear picture of the City's financial activities for the fiscal year ended September 30, 2009. A. Financial Statement Presentation The basic financial statements are prepared in conformity with GASB Statement No. 34, which requires the government-wide financial statements to be prepared using the accrual basis of accounting and the economic resources measurement focus. Government-wide financial statements do not provide information by fund, but distinguish between the City's governmental activities, business-type activities and activities of its discretely presented component unit on the statement of net assets and statement of activities. Significantly, the City's statement of net assets includes both noncurrent assets and noncurrent liabilities of the City. In addition, the government-wide statement of activities reflects depreciation expenses on the City's capital assets, including infrastructure. In addition to the government-wide financial statements, the City has prepared fund financial statements, which use the modified accrual basis of accounting and the current financial resources measurement focus for the governmental funds. The accrual basis of accounting is utilized by proprietary funds. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The City also presents Management's Discussion and Analysis, which includes an analytical overview of the City's financial activities. In addition, a budgetary comparison statement is presented that compares the original adopted and final amended General Fund budget with actual results. B. Financial Reporting Entity The City's basic financial statements include the accounts of all City operations. In evaluating how to define the government for financial reporting purposes, management has considered all entities for which the City is considered to be financially accountable. The City is a home rule municipality governed by an elected Mayor and six-member City Council, who appoint a City Manager. As required by GAAP, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. The discretely presented component unit is reported in a separate column in the combined financial statements to emphasize that it is legally separate from the City. 26 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED B. Financial Reporting Entity—Continued Blended Component Unit The Wylie Park and Recreation Facilities Development Corporation ("the 4B Corporation") is presented in the basic financial statements as a blended component unit of the City. The 4B Corporation's board is substantively the same as the City Council. All members of the 4B Corporation other than the board are City employees. The City Manager is the Chief Executive Operating Officer of the 4B Corporation. The purpose of the 4B Corporation, which is financed with a voter-approved half-cent sales tax, is to promote economic development within the City through the construction of park and recreation facilities. The 4B Corporation has a September 30 year-end. The 4B Corporation's financial budget, treasury, and personnel functions are totally integrated with the City's. All of the 4B Corporation's financial information is presented in the basic and combining financial statements along with the notes to these financial statements. The 4B Corporation does not issue separate financial statements. Discretely Presented Component Unit The Wylie Economic Development Corporation (WEDC)is a discretely presented component unit in the combined financial statements. The governing body of the WEDC is appointed by the City Council and the WEDC's operating budget is subject to approval of the City Council. The WEDC's board is not substantially the same as the City Council. The purpose of the WEDC, which is financed with a voter-approved half-cent City sales tax, is to aid, promote and further the economic development within the City. The WEDC is presented as a governmental fund type and has a September 30 year-end. Under a contract with the WEDC, the financial, budget, treasury and personnel functions of the WEDC are integrated with the City. All of WEDC's financial information is presented in the combined and combining financial statements along with the notes to these financial statements. There are no separately issued financial statements of the WEDC. C. 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 government-wide financial statements (i.e., the statement of net assets and the statement of activities)report information on all of the non-fiduciary activities of the primary government and its component units. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely on fees and charges for support. Additionally, the primary government is reported separately from the legally separate component unit for which the primary government is financially accountable. The government-wide statement of activities demonstrates the degree to which the direct expenses of a functional category(Public Safety, Urban Development, etc.)or program are offset by program revenues. Direct expenses are those that are clearly identifiable with specific function or program. Program revenues include: a) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or program, b) grants and contributions that are restricted to meeting the operational requirements of a particular function or program, or c)grants and contributions that are restricted to meeting the capital requirements of a particular function or program. Taxes and other items not properly included among program revenues are reported instead as general revenues. Internally dedicated resources are also reported as general revenues rather than as program revenues. 27 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED C. Government-Wide and Fund Financial Statements—Continued Separate fund financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. The major governmental funds are the general fund, the general obligation debt service fund, and the capital projects fund. GASB Statement No. 34 sets forth minimum criteria (percentage of assets, liabilities, revenues or expenditures /expenses of either fund category for the governmental and enterprise combined) for the determination of major funds.The non-major funds are combined in a column in the fund financial statements. The non-major funds are detailed in the combining section of the financial statements. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. 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. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first,then unrestricted resources as they are needed. D. 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. The government-wide and proprietary fund financial statements follow the accounting set forth by the Governmental Accounting Standards Board and all pronouncements of the Financial Accounting Standards Board issued on or before November 30, 1989. The City has elected not to follow subsequent private-sector guidance. 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. The governmental fund financial statements follow the accounting set forth by the Governmental Accounting Standards Board. Property taxes, franchise fees, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Sales taxes collected and held by the State and merchants at year-end on behalf of the City are also recognized as revenue. All other revenue items are considered to be measurable and available only when cash is received by the government. 28 CITY OF WYLIE,TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED D. Measurement Focus, Basis of Accounting,and Financial Statement Presentation— Continued Fund Accounting The following major funds are used by the City: 1. Governmental Funds: Governmental Funds are those through which most governmental functions of the City are financed. The acquisition, use and balances of the City's expendable financial resources and the related liabilities (except those accounted for in proprietary funds) are accounted for through governmental funds. The measurement focus is on determination of changes in financial position, rather than on net income determination. The following is a description of the major Governmental Funds of the City: a. The General Fund is the operating fund of the City. This fund is used to account for all financial resources not accounted for in other funds. All general tax revenues and other receipts that are not restricted by law or contractual agreement to some other fund are accounted for in this fund. General operating expenditures, fixed charges and capital improvement costs that are not paid through other funds are paid from the General Fund. b. The General Obligation Debt Service Fund is used to account for the accumulation of financial resources for the payment of principal, interest and related costs on general obligation long-term debt paid from taxes levied by the City. c. The Capital Projects Fund is used to account for the acquisition or construction of capital facilities, except those being financed by proprietary funds. In addition,the City reports the following non-major governmental funds. a. 4B Sales Tax Revenue Fund accounts for sales tax monies specifically designated for promoting economic development within the City by developing, implementing, providing and financing park and recreation projects. b. Parks Acquisition and Improvement Fund accounts for the development and improvement of City parks. c. Emergency Communications Fund accounts for the operations of the 911 dispatch services of the police and fire departments. d. Fire Training Center Fund accounts for First Responder fees specifically designated for the construction of the Fire Training Center. e. Fire Development Fees Fund accounts for contributions specifically designated for use of the fire department. f. Municipal Court Technology Fund accounts for court fines specifically designated for improvements in court technology. g. Municipal Court Building Security Fund accounts for court fines specifically designated for additions/improvements to court security. h. Hotel Tax Fund accounts for occupancy taxes charged to hotels. 29 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation— Continued Fund Accounting—continued i. Public Arts Fund accounts for the accumulation of resources specifically designated for enhancing public art in City public works projects and for acquiring visual art as determined by the Public Arts Program. j. 4B Debt Service Fund accounts for the accumulation of resources to be used for the payment of principal and interest on the 4B Sales Tax Revenue Bonds—Series 1996 and 2005. 2. Proprietary Funds: Proprietary Funds are accounted for using an economic resources measurement focus. The accounting objectives are a determination of net income, financial position, and changes in cash flows. All assets and liabilities associated with a proprietary fund's activities are included on its statement of net assets. The proprietary funds are financed and operated in a manner similar to private business enterprise. The costs(expenses, including depreciation)of providing goods or services to the general public on a continuing basis are financed or recovered primarily through user charges. Periodic determination of revenues earned, expenses incurred, or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. The following is a description of the major proprietary fund of the City: The Utility Fund is used to account for the operations of the water distribution system, wastewater pumping stations and collection systems. The City contracts with North Texas Municipal Water District for wastewater treatment. In addition, the City reports an Internal Service Fund which accounts for financial resources set aside annually to replace equipment as its useful life is consumed. E. Cash and Cash Equivalents The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. State statutes authorize the City to invest in (1) obligations of the United States or its agencies and instrumentalities; (2) direct obligations of the State of Texas or its agencies; (3) other obligation, the principal of and interest on which are unconditionally guaranteed or insured by the State of Texas or the United States; (4)obligations of states, agencies, counties, cities, and other political subdivisions of any state having been rated as to investment quality by a nationally recognized investment rating firm and having received a rating of not less than A or its equivalent; (5) certificates of deposit by state and national banks domiciled in this state that are (A) guaranteed or insured by the Federal Deposit Insurance Corporation, or its successor; or (B) secured by obligations that are described by(1), pledged with third party selected or approved by the City, and placed through a primary government securities dealer. Investments maturing within one year of date of purchase are stated at cost or amortized cost, all other investments are stated at fair value which is based on quoted market prices. 30 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED F. Inventories, Prepaid Items and Deferred Charges Inventory is valued at cost (first-in, first-out). The cost of governmental fund type inventory is recorded as an expenditure when consumed rather than when purchased. Reported inventories are equally offset by a fund balance reserve, which indicates that they do not constitute "available, spendable resources"even though they are a component of fund balance. The City is not required to maintain a minimum level of inventory. Inventories in the Proprietary Funds consist of supplies and are recorded at the lower of cost or market. Prepaid balances are for payments made by the City for which benefits extend beyond September 30, 2009, and the reserve for prepaid items has been recognized to signify that a portion of fund balance is not available for other subsequent expenditures. Deferred Charges reported at the government-wide level and in proprietary funds are comprised of the balance of unamortized debt issuance costs. Issuance costs are amortized over the life of the related debt using a straight-line method. G. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e. the non-current portion of interfund loans). All other outstanding balances between funds are reported as"due to/from other funds."Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as"internal balances." Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All trade receivables are shown net of an allowance for uncollectibles. Trade accounts receivable in excess of 60 days comprise the trade accounts receivable allowance for uncollectibles. H. Restricted Assets Certain proceeds of enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants or contractual agreements. Customer deposits received for water and wastewater service are, by law, considered to be restricted assets. These balances are included in the Utility Fund. I. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business- type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $15,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not capitalized. 31 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED I. Capital Assets—Continued Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Capital assets of the primary government, as well as the component units, are depreciated using the straight line method over the following estimated useful lives: Assets Years Buildings 20-30 Improvements other than buildings 20-50 Machinery and equipment 3-10 J. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. A percentage of accrued sick leave is payable on a longevity basis at the time of termination. All 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. K. Long-term Obligations In the government-wide financial statements and proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method,which approximates the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. L. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for a specific purpose. M. Subsequent Events The City has evaluated all events or transactions that occurred after September 30, 2009 up through February 15, 2010, the date the financial statements were issued. During this period, there were no subsequent events requiring disclosure. 32 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 2. CASH AND INVESTMENTS At year end, the carrying amount of the City's deposits was $4,810,658 and the bank balance was $5,017,669 . All of the bank balance was covered by federal deposit insurance and collateralized by the pledging financial institution's City's safekeeping account at the Federal Reserve. Cash and investments as of September 30, 2009 consist of and are classified in the accompanying financial statements as follows: Statement of net assets: Primary Government Cash and cash equivalents $ 103,292,602 Restricted cash and cash equivalents 4,268,629 Total Primary Government 107,561,231 Component Unit Cash and cash equivalents 713,993 Total Cash and investments $ 108,275,224 Deposits with financial institution $ 4,810,658 Investments 103,464,566 Total cash and investments $ 108,275,224 The table below identifies the investment types that are authorized for the City by the Public Funds Investment Act. (Government Code Chapter 2256) The table also identifies certain provisions of the City's investment policy that address interest rate risk, credit risk, and concentration of credit risk. Maximum Maximum Authorized Maximum Percentage Investment Investment Type Maturity of Portfolio In One Issuer U.S.Treasury obligations 5 years 100% None U.S.Agency obligations 5 years 100% None Certificates of deposit 2 years 25% None Direct repurchase agreements None 100% None Investment pools 90 days None None Disclosures relating to interest rate risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. 33 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 2. CASH AND INVESTMENTS-CONTINUED Disclosures relating to interest rate risk—Continued In accordance with its investment policy, the City manages its exposure to declines in fair value by limiting the weighted average maturity of its portfolio to less than three years. As of September 30, 2009, the City had the following investments Weighted Average Investment Type Amount Maturity TexPool $ 99,356,174 45 days Certificates of Deposit 4,108,392 206 days $ 103,464,566 Disclosures relating to credit risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the Public Funds Investment Act, the City's investment policy, or debt agreements, and the actual rating as of year end for each investment type. Minimum Rating as Legal of Year Investment Type Amount Rating End TexPool $ 99,356,174 N/A AAA-m Certificates of Deposit 4,108,392 N/A N/A $ 103,464,566 Concentration of credit risk The City's investment policy does not allow for an investment in any one issuer (other than investment pools)that is in excess of five percent of the fair value of the City's total investments. Custodial credit risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The Public Funds Investment Act does not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The Public Funds Investment Act requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least the bank balance less the FDIC insurance at all times. 34 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 2. CASH AND INVESTMENTS-CONTINUED Custodial credit risk—Continued The City requires all deposits to be covered by Federal Depository Insurance Corporation (FDIC) insurance and/or collateralized by qualified securities pledged by the City's depository in the City's name and held by the depository's agent. As of September 30, 2009 the City deposits with financial institutions in excess of federal depository insurance limits were under collateralized by$1,478,481. The City is a voluntary participant in TexPool. The State Comptroller of Public Accounts exercises responsibility over TexPool. Oversight includes the ability to significantly influence operations, designation of management, and accountability for fiscal matters. Additionally, the State Comptroller has established an advisory board composed of both participants in TexPool and other persons who do not have a business relationship with TexPool. TexPool operates in a manner consistent with the SEC's Rule2A7 of the Investment Company Act of 1940. TexPool uses amortized cost rather than the market value to report net assets to compute share prices. Accordingly,the fair value of the position in TexPool is the same as the value of TexPool shares. NOTE 3. PROPERTY TAXES The City's property tax is levied each October 1 on the assessed value listed as of the prior January 1 for all real and certain personal property located within the City. Appraised values are established by the Collin County Central Appraisal District at 100% of estimated market value and certified by the Appraisal Review Board. The assessed value upon which the tax year 2008 levy was based was $2,257,630,027. Taxes are due on October 1 and are delinquent after the following January 31. 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 combined tax rate to finance general governmental services including the payment of principal and interest on long-term debt for the year ended September 30, 2009 was$0.8989 per$100 of assessed valuation. In Texas, countywide central appraisal districts are required to assess all property within the appraisal district on the basis of 100% of its appraised value and are prohibited from applying any assessment ratios. The value of property within the appraisal district must be reviewed every five years; however, the City may, at its own expense, require annual reviews of appraised values. The City may challenge appraised values established by the appraisal district through various appeals and, if necessary, legal action. Under this legislation, the City continues to set tax rates on City property. However, if the effective tax rate, excluding tax rates for bonds and other contractual obligations, adjusted for new improvements, exceeds the rate for the previous year by more than 8%, qualified voters of the City may petition for an election to determine whether to limit the tax rate to no more than 8%above the tax rate of the previous year. 35 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 4. RECEIVABLES Year-end receivables balances for the government's individual major funds and nonmajor funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows: General Obligation Capital Other Governmental Funds General Debt Service Projects Funds Utility Receivables Property taxes $ 302,856 $ 133,026 $ - $ - $ - Franchise taxes 730,975 - - - - Sales Taxes 500,825 - - 244,638 - Accounts 397,658 - - 2,124,436 Other 317,882 - 33,271 70,631 68,459 Gross receivables 2,250,196 133,026 33,271 315,269 2,192,895 Less:allowance (196,582) (26,605) (33,271) - (497,303) Net total receivables $2,053,614 $ 106,421 $ - $315,269 $1,695,592 The Enterprise Fund accounts receivable balance includes unbilled charges for services rendered of $752,604 at September 30, 2009. Receivables in the discretely presented component unit consist of $244,638 sales taxes receivable due from the State and $421,443 in loans receivable from private businesses. If certain contractual obligations are met by some of these private businesses at a future date, a portion and/or all of the amounts owed from the private businesses may be forgiven. 36 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 5. CAPITAL ASSETS Capital asset activity for the year ended September 30, 2009 was as follows: Primary Government Beginning Ending Balance Increases Decreases Transfers Balance Governmental activities: Capital assets not being depreciated: Land $ 26,363,701 $ 3,465,544 $ (368,727) $ - $ 29,460,518 Other non-depreciable assets - 400,000 - - 400,000 Construction in progress 8,728,788 19,664,787 - - 28,393,575 Total capital assets,not being depreciated 35,092,489 23,530,331 (368,727) - 58,254,093 Capital assets being depreciated: Buildings 4,252,835 49,444 - - 4,302,279 Improvements other than buildings 107,206,515 689,729 (14,648) 107,881,596 Machinery and equipment 5,837,467 354,204 (19,636) - 6,172,035 Total capital assets being depreciated 117,296,817 1,093,377 (34,284) - 118,355,910 Less accumulated depreciation for: Buildings (2,179,051) (142,315) - (2,321,366) Improvements other than buildings (34,090,449) (3,661,749) - - (37,752,198) Machinery and equipment (2,431,684) (654,808) 19,636 - (3,066,856) Total accumulated depreciation (38,701,184) (4,458,872) 19,636 - (43,140,420) Total capital assets being depreciated,net 78,595,633 (3,365,495) (14,648) - 75,215,490 Governmental activities capital assets,net $ 113,688,122 $ 20,164,836 $ (383,375) $ - $ 133,469,583. Beginning Ending Balance Increases Decreases Transfers Balance Business-type activities: Capital assets not being depreciated: Land $ 59,141 $ - $ - $ - $ 59,141 Construction in progress 3,447,704 661,091 (17,861) (597,407) 3,493,527 Total capital assets,not being depreciated 3,506,845 661,091 (17,861) (597,407) 3,552,668 Capital assets being depreciated: Buildings 268,801 - - - 268,801 Water system 28,345,026 - - 597,407 28,942,433 Sewer system 25,770,792 51,500 - - 25,822,292 Machinery and equipment 114,783 45,305 - - 160,088 Total capital assets being depreciated 54,499,402 96,805 - 597,407 55,193,614 Less accumulated depreciation for: Buildings (111,254) (8,960) - - (120,214) Water system (6,586,900) (704,298) - - (7,291,198) Sewer system (7,271,467) (641,771) - - (7,913,238) Machinery and equipment (102,784) (6,315) - - (109,099) Total accumulated depreciation (14,072,405) (1,361,344) - - (15,433,749) Total capital assets being depreciated,net 40,426,997 (1,264,539) - 597,407 39,759,865 Business-type activities capital assets,net $ 43,933,842 $ (603,448) $ (17,861) $ - $ 43,312,533 37 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 5. CAPITAL ASSETS-CONTINUED Depreciation expense was charged to functions/programs of the primary government as follows: Governmental Activities: General government $ 79,090 Public safety 154,087 Streets 3,391,431 Community service 308,478 Internal service fund 525,786 Total depreciation expense-governmental activities $ 4,458,872 Business-type activities: Water and Sewer $ 1,361,344 Construction Commitments The City has active construction projects as of September 30, 2009. The projects include construction, park improvements, and drainage improvements. Commitments for construction in progress are composed of the following: Funding Project Budget Remaining Project Source Appropriation Spent-to-date Commitment Hooper Bridge(Maxwell Creek) (D) $ 644,539 $ 634,202 $ 10,337 FM 1378 (A) 12,100,000 1,032,704 11,067,296 Brown Street West (A) 8,946,550 784,763 8,161,787 Brown Street East (A) 6,034,870 454,562 5,580,308 Ballard Street (B) 3,713,509 3,653,426 60,083 Sidewalks (A) 950,000 242,792 707,208 Fire Station 3 (A) 3,500,000 3,246,434 253,566 Library (A) 14,084,200 4,089,447 9,994,753 City Hall (A) 15,120,480 7,513,474 7,607,006 Recreation Center (A) 12,466,340 5,271,752 7,194,588 Founders Park (A) 5,470,000 909,383 4,560,617 Twin Lakes Relief Sewer (C) 2,600,000 2,075,763 524,237 Total $ 85,630,488 $ 29,908,702 $ 55,721,786 (A)Funded by general obligation bond proceeds. (B)Funded by general obligation bonds and water impact fees. (C)Funded by water impact fees. (D) Funded by thoroughfare impact fees. 38 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 6. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS Transfers are used to provide funds for debt service, contributions for capital construction, cost allocations and other operational costs as determined by the City's annual budget. Transfers between funds during the year were as follows: Transfer Transfer Fund In Out General Fund $ 450,000 $ 558,300 General Obligation Debt Service 550,750 - Capital Projects Fund - 1,024,209 Nonmajor Governmental Funds: 4B Sales Tax Revenue - 565,300 Emergency Communication 525,000 - Public Arts Fund 506,759 - 4B Debt Service 1996 145,540 - 4B Debt Service 2005 419,760 - Total Nonmajor Governmental Funds 1,597,059 565,300 Utility Fund - 450,000 Total $ 2,597,809 $ 2,597,809 NOTE 7. DEFERRED REVENUE Governmental funds report deferred revenue in connection with receivables for revenue that is not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue reported in the governmental funds were as follows: General General Obligation Fund Debt Service Total Property taxes $ 231,436 $ 98,455 $ 329,891 Court fines 6,913 - 6,913 Franchise fees 730,975 - 730,975 Total $ 969,324 $ 98,455 $ 1,067,779 39 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 8. LONG-TERM DEBT General Obligation Bonds, Certificates of Obligation and Contractual Obligations The City of Wylie issues general obligation bonds, certificates of obligation bonds, and contractual obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for both governmental and business-type activities. These issues are direct obligations and pledge the full faith and credit of the City. Final Interest Business- General Obligation Bonds Maturity Rates Governmental Type $3,200,000 Series 1999 Improvements 2010 5.00-6.50% $ 155,000 $ - $2,000,000 Series 2000 Improvements 2012 5.00-6.50% 290,000 - $4,500,000 Series 2000 Improvements 2021 4.38-5.0% 3,255,000 - $2,500,000 Series 2002 Improvements 2022 3.63-4.5% 1,885,000 - $10,320,000 Series 2005 Improvements and Refunding 2025 3.0-4.5% 5,780,000 1,310,000 $35,525,000 Series 2006 Improvements 2027 4.00-4.5% 34,475,000 - $4,815,000 Series 2007 Improvements and Refunding 2020 4.75-5.25% 3,862,620 737,381 $38,625,000 Series 2008 Improvements 2028 4.00-5.50% 37,585,000 - Total General Obligation Bonds $ 87,287,620 $2,047,381 Final Interest Business- Combination Tax and Revenue Bonds Maturity Rates Governmental Type $6,215,000 Series 2005 Improvements 2025 3.00-5.00% $ 5,325,000 $ - $2,000,000 Series 2007E Improvements 2028 4.40% 1,935,000 - $7,680,000 Series 2007 Improvements 2027 3.62-4.50% - 7,280,000 $15,000,000 Series 2008 Improvements 2028 4.10-5.50% 14,595,000 - Total Combination Tax and Revenue Bonds $ 21,855,000 $7,280,000 Final Interest Business- Contractual Obligations Maturity Rates Governmental Type $2,110,000 Series 2005 Improvements 2016 4.55% $ 436,674 $ 844,002 $750,000 Series 2007 2022 4.86% 618,400 - Improvements Total Contractual Obligation Bonds $ 1,055,074 $ 844,002 40 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 8. LONG-TERM DEBT Revenue Bonds The City issues revenue bonds where the City pledges income derived from the acquired or constructed assets,or sales tax to pay the debt service. Revenue bonds outstanding as of September 30, 2009 are as follows: Final Interest Business- Sales Tax and Revenue Bonds Maturity Rates Governmental Type $1,710,000 Series 1996 Improvements 2016 5.35-5.55% $ 850,000 $ - $1,380,000 Series 1999 Improvements 2019 5.40-6.50% - 875,000 $1,720,000 Series 2000 Improvements 2020 5.13-6.13% - 1,200,000 $1,150,000 Series 2002 Improvements 2022 3.55-5.00% 865,000 Total Sales Tax and Revenue Bonds $ 850,000 $2,940,000 41 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 8. LONG-TERM DEBT-CONTINUED Changes in Long-term Liabilities: A summary of long-term debt transactions, including current portion, for the year ended September 30, 2009, is as follows: Amount Beginning Ending Due within Balance Additions Reductions Balance One year Governmental activities: General obligation bonds $ 89,883,765 $ - $(2,596,145) $ 87,287,620 $2,395,345 Combination tax and revenue bonds 22,560,000 - (705,000) 21,855,000 790,000 Contractual obligations 1,286,832 - (231,758) 1,055,074 172,973 Sales tax and revenue bonds 945,000 - (95,000) 850,000 100,000 Unamortized bond premium(discount) 348,217 - (18,109) 330,108 - Deferred loss(gain)on refunding (191,383) - 29,651 (161,732) - Total bonds payable 114,832,431 - (3,616,361) 111,216,070 3,458,318 Compensated absences 780,582 811,570 (647,067) 945,085 648,917 Total governmental activities $115,613,013 $811,570 $(4,263,428) $112,161,155 $4,107,235 Amount Beginning Ending Due within Balance Additions Reductions Balance One year Business-type activities: General obligation bonds $ 2,391,234 $ - $ (343,853) $ 2,047,381 $ 354,656 Combination tax and revenue bonds 7,550,000 - (270,000) 7,280,000 280,000 Contractual obligations 930,964 - (86,962) 844,002 114,337 Sales tax and revenue bonds 3,125,000 - (185,000) 2,940,000 195,000 Unamortized bond premium(discount) (74,174) - 3,972 (70,202) - Deferred loss(gain)on refunding (7,131) - (2,800) (9,931) - Total bonds payable 13,915,893 - (884,643) 13,031,250 943,993 Compensated absences 130,039 136,672 (121,487) 145,224 99,714 Total business-type activities $ 14,045,932 $136,672 $(1,006,130) $ 13,176,474 $1,043,707 The annual aggregate maturities for each bond type are as follows: General Obligation Bonds Governmental Activities Business Activities Fiscal Year Ending September 30, Principal Interest Total Principal Interest Total 2010 $ 2,395,345 $ 3,983,274 $ 6,378,619 $ 354,656 $ 67,032 $ 421,688 2011 3,563,093 3,842,718 7,405,811 236,907 58,320 295,227 2012 3,894,888 3,668,099 7,562,987 245,112 49,329 294,441 2013 4,064,850 3,480,412 7,545,262 275,150 38,955 314,105 2014 4,275,041 3,282,928 7,557,969 289,959 27,403 317,362 2015-2019 23,688,449 13,368,117 37,056,566 621,552 44,205 665,757 2020-2024 25,740,954 7,728,148 33,469,102 24,045 497 24,542 2025-2028 19,665,000 1,708,239 21,373,239 - - - Total $87,287,620 $41,061,935 $128,349,555 $2,047,381 $ 285,741 $ 2,333,122 42 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 8. LONG-TERM DEBT-CONTINUED Changes in Long-term Liabilities-Continued Combination Tax and Revenue Bonds Governmental Activities Business Activities Fiscal Year Ending September 30, Principal Interest Total Principal Interest Total 2010 $ 790,000 $ 1,012,634 $ 1,802,634 $ 280,000 $ 297,575 $ 577,575 2011 830,000 974,976 1,804,976 290,000 286,175 576,175 2012 860,000 935,696 1,795,696 305,000 274,275 579,275 2013 905,000 894,656 1,799,656 315,000 261,875 576,875 2014 950,000 851,521 1,801,521 330,000 248,975 578,975 2015-2019 5,435,000 3,563,787 8,998,787 1,855,000 1,031,975 2,886,975 2020-2024 6,830,000 2,161,820 8,991,820 2,280,000 609,063 2,889,063 2025-2028 5,255,000 498,375 5,753,375 1,625,000 110,376 1,735,376 Total $21,855,000 $10,893,465 $ 32,748,465 $7,280,000 $3,120,289 $10,400,289 Contractual Obligations Governmental Activities Business Activities Fiscal Year Ending September 30, Principal Interest Total Principal Interest Total 2010 $ 172,973 $ 46,453 $ 219,426 $ 114,337 $ 37,116 $ 151,453 2011 95,238 40,206 135,444 119,599 31,855 151,454 2012 102,780 35,601 138,381 125,103 26,351 151,454 2013 105,438 30,757 136,195 130,851 20,591 151,442 2014 120,818 27,133 147,951 124,283 13,231 137,514 2015-2019 357,727 63,710 421,437 229,829 9,041 238,870 2020-2024 100,100 4,134 104,234 - - - Total $ 1,055,074 $ 247,994 $ 1,303,068 $ 844,002 $ 138,185 $ 982,187 Sales Tax and Revenue Bonds Governmental Activities Business Activities Fiscal Year Ending September 30, Principal Interest Total Principal Interest Total 2010 $ 100,000 $ 44,400 $ 144,400 $ 195,000 $ 143,010 $ 338,010 2011 105,000 38,711 143,711 205,000 132,892 337,892 2012 115,000 32,606 147,606 220,000 122,549 342,549 2013 120,000 26,085 146,085 230,000 111,731 341,731 2014 130,000 19,148 149,148 245,000 100,123 345,123 2015-2019 280,000 15,818 295,818 1,445,000 294,760 1,739,760 2020-2024 - - - 400,000 22,043 422,043 Total $ 850,000 $ 176,768 $ 1,026,768 $2,940,000 $ 927,108 $ 3,867,108 Compensated Absences Compensated absences represent the estimated liability for employees' accrued sick and vacation leave for which employees are entitled to be paid upon termination. The retirement of this liability is typically paid from the General Fund and Enterprise Funds based on the assignment of an employee at termination. In previous years, the City has legally defeased certain outstanding general obligation debt by placing funds into irrevocable trusts pledged to pay all future debt service payments of the refunded debt. As a result, the refunded bonds are considered to be defeased and the liability has been removed from the City's long-term debt. 43 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 8. LONG-TERM DEBT-CONTINUED Defeased Debt-Continued As of September 30, 2009, the following bonds were legally defeased. Series Type Amount 1997 General Obligation Bonds $ 1,655,000 1999 General Obligation Bonds 1,870,000 2000 General Obligation Bonds 1,085,000 $ 4,610,000 Discretely presented component unit-Wylie Economic Development Corporation(WEDC) WEDC Loans Payable as of September 30, 2009 are as follows: Balance Description 9/30/2009 $878,372, payable to bank, made August 26,2005, payable in monthly installments of $7,320 through October 26,2015, including interest at 5.75%. $ 534,343 $340,000, payable to an individual, made July 25,2006,payable in monthly installments of$3,775 through July 25,2016,including interest at 6.00%. 253,412 $80,000, payable to individuals, made March 2004,payable in monthly installments of $1,547 through October 28,2012,including interest at 6.00%. 52,125 $228,750, payable to an individual, made October 2007, payable in monthly installments of$2,540 through October 28,2017,including interest at 6.00%. 194,816 $180,000,payable to an individual,made May 2008,payable in monthly installments of $2,035 through April 3,2018, including interest at 6.25%. 161,337 $1,196,033 Annual debt service requirements to maturity for WEDC debt is: Year Principal Interest Total 2010 $ 168,563 $ 66,435 $ 234,998 2011 173,758 56,053 229,811 2012 179,091 45,980 225,071 2013 167,356 35,662 203,018 2014 170,690 25,743 196,433 2015-2019 336,575 25,576 362,151 Total $ 1,196,033 $ 255,449 $ 1,451,482 The following is a summary of WEDC long-term transactions for the year ended September 30, 2009: Balance Balance Due Within Description 9/30/2008 Increases Decreases 9/30/2009 One Year Loans payable $1,393,617 $ - $197,584 $1,196,033 $ 168,563 Compensated Absences 32,721 8,195 4,846 36,070 24,766 Total long-term liabilities $1,426,338 $ 8,195 $202,430 $1,232,103 $ 193,329 44 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 9. PENSION PLAN A. Plan Description The City provides pension benefits for all of its full-time employees through a non-traditional,joint contributory, hybrid defined benefit plan in the state-wide Texas Municipal Retirement System (TMRS), one of 827 currently administered by TMRS, an agent multiple-employer public employee retirement system. Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the City- financed monetary credits, with interest. At the date the plan began, the City granted monetary credits for service rendered before the plan began of a theoretical amount at least equal to two times what would have been contributed by the employee, with interest, prior to establishment of the plan. Monetary credits for service since the plan began are a percent(100%, 150%, or 200%) of the employee's accumulated contributions. In addition, the City can grant, as often as annually, another type of monetary credit referred to as an updated service credit 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 his salary in the last three years that are one year before the effective date. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the employer-financed monetary credits with interest were used to purchase an annuity. Members can retire at ages 60 and above with 5 or more years of service or with 20 years of service. A member is vested after 5 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. The City of Wylie is one of 827 municipalities having the benefit plan administered by TMRS. Each of the 827 Municipalities has an annual, individual actuarial valuation performed. All assumptions for the 12-31-08 valuations are contained in the 2008 TMRS Comprehensive Annual Financial Report, a copy of which may be obtained by writing to P.O. Box 149153, Austin, Texas 78714-9153. B. Contributions The contribution rate for employees is 7%, with the City's matching ratio being 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's 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's 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 his/her retirement becomes effective. The prior service contribution rate amortizes the unfunded (overfunded) actuarial liability (asset) over the remainder of the plan's 25-year amortization period. The projected unit credit actuarial cost method is used for determining the City contribution rate. Both the employees and the City make contributions monthly. Because the City needs to know its contribution rate in advance for budgetary purposes, there is a one-year delay between the actuarial valuation that serves as the basis for the rate and the calendar year when the rate goes into effect (i.e. December 31, 2007 valuation is effective for rates beginning January 2009.) 45 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 9. PENSION PLAN B. Contributions—Continued Schedule of Actuarial Liabilities and Funding Progress: Actuarial Valuation Date 12/31/08 12/31/07 12/31/06 Actuarial Value of Assets $ 13,646,332 $ 11,674,717 $ 10,293,842 Actuarial Accrued Liability 21,727,174 18,802,090 13,150,242 Percentage Funded 62.8% 62.1% 78.3% Unfunded(Over-funded)Actuarial Accrued Liability(UAAL) 8,080,842 7,127,373 2,856,400 Annual Covered Payroll 12,063,784 10,437,346 8,882,520 UAAL as a Percentage of Covered Payroll 67.0% 68.3% 32.2% Net Pension Obligation(NPO) at the Beginning of Period - - - Annual Pension Cost: Annual required contribution(ARC) 1,222,581 1,054,549 889,419 Interest on NPO - - Adjustment to the ARC - - 1,222,581 1,054,549 889,419 Contributions Made 1,222,581 1,054,549 889,419 Increase in NPO - - - NPO at the end of the period $ - $ - $ - Actuarial assumptions are as follows: Actuarial cost method Projected Unit Credit Amortization method Level Percent of Payroll Remaining Amortizatino 29-Years-Closed Period Asset valuation method Amortized Cost Investment rate of return 7.5% Projected salary increases Varies by age and service Inflation rate 3% COL adjustments 2.1%(3%CPI) NOTE 10. NORTH TEXAS MUNCIPAL WATER DISTRICT The District is a conservation and reclamation district and political subdivision of the State of Texas, created and functioning under Chapter 62, Acts of 1951, 52nd Legislature, Regular Session, as amended, originally complied as Vernon's Article 8270-141 (the Act), pursuant to Article 16, Section 59 of the Texas Constitution. The District comprises all of the territory of its member cities, viz.,Allen, Garland, Princeton, Plano, Mesquite, Wylie, Rockwall, Farmersville, McKinney, Richardson, Forney and Royse City (the"Member Cities"). The District was created for the purpose of providing a source of water supply for municipal, domestic and industrial use and for the treatment processing and transportation of such water to its Member Cities and to its other customers located in North Central Texas, all within the Dallas Standard Metropolitan Statistical Area. 46 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 10. NORTH TEXAS MUNCIPAL WATER DISTRICT—CONTINUED Under the Act, including specifically Section 27 thereof, and under the Constitution and Statues of the State of Texas, the District has broad powers to(1) impound, control, store, preserve, treat, transmit, and use storm and flood water, the water of rivers and streams and underground water, for irrigation, power and all other useful purposes and to supply water for municipal, domestic, power, industrial and commercial uses and purposes and all other beneficial uses and purposes; and (2) collect, transport, process, treat, dispose of, and control all municipal, domestic, industrial or commercial waste whether in fluid, solid or composite state, including specifically the control, abatement or reduction of all types of pollution. The City retains no ongoing financial interest equity investments and/or responsibilities for the District other than the contractual arrangements discussed more fully herein. NOTE 11. MUDDY CREEK REGIONAL WASTEWATER SYSTEM In May 1999, the Cities of Wylie and Murphy in Collin County entered into a contract with the District to provide for the acquisition, construction, improvement, operation, and maintenance of the Regional Muddy Creek Wasterwater System (System) for the purpose of providing facilities to adequately receive, transport, treat, and dispose of wastewater. The District will own the System with Wylie and Murphy as the initial participants. The District will issue approximately $20 million in bonds to construct this new facility. Budget calculations for operating costs and debt service for the System on the service commencement date is based on the following estimated flow ratio: City of Wylie — 2/3 and Murphy— 1/3. "Service Commencement Date" means the first date upon which the System is available to treat wastewater from the participants. Wylie's long-term commitment to the System's debt service component is approximately$13.3 million. The District will send each participant a letter detailing the annual requirement necessary to operate the System each year. The annual requirement budget will include an operation and maintenance component and a bond service component. The budgeting ratio described earlier is only valid for the first year of System operations. In subsequent years, budgets and year-end audits will be based on actual flow ratios. For example, if the flow measurements indicate that 60% of the flow is produced by Wylie and 40% by Murphy, then the next year's operating and debt service components would be allocated using a 60/40 split. If in the future, additional participants are added, then the flow ratios will be adjusted using the above method. The contract with the District has a clause for "Credit for Payments Relating to the System. This clause states: "Each participant shall be entitled to a credit in an amount equal to any funds advanced by such Participant with the approval of the District for land, engineering, construction or other costs related to the System and/or the financing thereof". All credits for advance made prior to the Service Commencement Date shall bear interest from the date of such advance at a rate equal to the net effective interest rate on the initial issue of the bonds hereunder. The City of Wylie has four such credits at this time. All credits for advances made prior to the Service Commencement Date shall be amortized over a period of twenty years, with such amortization to commence on October 1 of the Fiscal Year following the Service Commencement Date. At September 30, 2005, the City had recorded $3,188,849 as a restricted accounts receivable. This amount is being amortized over a twenty year period commencing with fiscal year 2006. The amortization was$117,649 for 2009. NOTE 12. CONTINGENT LIABILITIES Amounts received or receivable from grantor agencies are subject to audit and adjustment by such agencies. Any disallowed claims, including amounts already collected may constitute a liability of the applicable funds. The amounts, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, if any, to be immaterial. 47 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 12. CONTINGENT LIABILITIES—CONTINUED The City periodically is defendant in various lawsuits. At September 30, 2009, after consultation with the City's attorney,the City is not aware of any pending litigation. As described in Note 8 above, the general revenues of the City are contingently liable for the $2,047,381 payable in General Obligation Bonds which are currently outstanding and recorded as obligations of the Enterprise Fund. The City contracts for garbage disposal with a third party. Under the terms of the agreement the city bills and collects the residential billing and remits that amount to the contracting party. The contractor bills the commercial customers and remits a franchise fee to the City based on total revenues received from the contract The Wylie Economic Development Corporation provides monetary incentives to companies to relocate within the City of Wylie. At September 30, 2009,these commitments totaled$725,291. NOTE 13. RISK MANAGEMENT The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; employee health benefits; and other claims of various natures. The City purchases commercial insurance to indemnify it in event of loss. For the past three years, settlements did not exceed coverage. NOTE 14. RELATED PARTY TRANSACTIONS The chairman of the board of directors of the Wylie Economic Development Corporation (WEDC) is the branch president of a local bank. During the year ended September 30, 2005, WEDC entered into a loan agreement with this bank for$878,372, payable over a ten year term,with interest rates of 5.75% for the first five years and 6.20% for the next five years. At September 30, 2009, the unpaid balance of this loan was$534,343. 48 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 15. CONDENSED FINANCIAL INFORMATION FOR DISCRETELY PRESENTED COMPONENT UNIT Following is selected condensed financial statement information for the fund basis financial statements of the Wylie Economic Development Corporation: Balance Sheet WEDC Assets Cash and equivalents $ 713,993 Receivables 666,081 Inventory 2,811,424 Total Assets $ 4,191,498 Liabilities Current liabilities $ 379,364 Total Liabilities 379,364 Fund Balance 3,812,134 Total Liabilities and Fund Balance $ 4,191,498 Income Statement WEDC Revenues: Sales tax revenue $ 1,298,336 Interest income 5,829 Miscellaneous income 44,656 Total Revenues 1,348,821 Expenditures: Expenditures 972,143 Net change in fund balance 376,678 Fund balance 10/1/2009 3,435,456 Fund balance 9/30/2009 $ 3,812,134 49 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2009 NOTE 15. CONDENSED FINANCIAL INFORMATION FOR DISCRETELY PRESENTED COMPONENT UNIT—CONTINUED Following are reconciliations between the government-wide financial statements and the fund basis financial statements for WEDC: Reconciliation of fund balance to net assets: Total fund balance $ 3,812,134 Payables for compensated absences (36,070) Accrued interest payable (1,280) Payable for loan principal currently due (1,196,033) Net assets $ 2,578,751 Reconciliation of change in fund balance to change in net assets: Change in fund balance $ 376,678 Change in payables for compensated absences (3,615) Change in accrued interest payable 390 Payment of loan principal 197,850 Change in net assets $ 571,303 NOTE 16. LAND ACQUISITION The discrete component unit owns property with a carrying value of$2,811,424. This property is held as an incentive to attract businesses. NOTE 17. NEW ACCOUNTING PRONOUNCEMENTS The GASB has issued Statement No. 45, "Accounting and Financial Reporting by Employers for Post Employment Benefits Other Than Pensions", which provides guidance on all aspects of OPEB reporting by employers. The requirements of this statement are effective for the City in the fiscal year ending September 30, 2009. The City has evaluated the impact of the standard on its financial statements and has determined that it is immaterial. 50 This page left intentionally blank 51 REQUIRED SUPPLEMENTARY INFORMATION 52 CITY OF WYLIE, TEXAS EXHIBIT A-10 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES- BUDGET(GAAP BASIS) AND ACTUAL-GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009 Budgeted Amounts Variance with Final Budget- Positive Original Final Actual Amount (Negative) REVENUES Ad valorem taxes $ 12,795,378 $ 12,795,378 $ 12,710,341 $ (85,037) Non-property taxes 2,612,000 2,612,000 2,608,214 (3,786) Franchise fees 1,955,000 1,955,000 2,136,664 181,664 Licenses and permits 594,500 594,500 488,290 (106,210) Intergovernmental 591,480 612,847 664,128 51,281 Services fees 2,149,100 2,149,100 2,060,933 (88,167) Court fees 540,000 540,000 403,864 (136,136) Interest income 351,310 351,310 108,144 (243,166) Miscellaneous income 236,740 245,142 317,748 72,606 Total revenues 21,825,508 21,855,277 21,498,326 (356,951) EXPENDITURES Current General government City council 132,390 132,390 107,970 24,420 City manager 765,970 765,970 741,185 24,785 City secretary 256,240 256,240 249,644 6,596 City attorney 173,000 173,000 170,046 2,954 Finance 666,340 668,840 625,670 43,170 Building and fleet maintenance 210,800 210,800 191,650 19,150 Municipal court 333,910 333,910 309,117 24,793 Human resources 206,945 206,945 185,014 21,931 Purchasing 111,520 111,520 111,030 490 Information technology 350,240 350,240 345,993 4,247 Combined services/general 2,508,300 2,508,300 2,362,903 145,397 Total general government 5,715,655 5,718,155 5,400,222 317,933 53 CITY OF WYLIE, TEXAS EXHIBIT A-10 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES (CONCLUDED) IN FUND BALANCES - BUDGET(GAAP BASIS) AND ACTUAL-GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009 Budgeted Amounts Variance with Final Budget- Positive Original Final Actual Amount (Negative) Public safety Police 4,841,100 4,852,482 4,646,602 205,880 Fire 5,076,730 5,076,730 4,963,170 113,560 Animal control 265,250 266,050 240,358 25,692 Total public safety 10,183,080 10,195,262 9,850,130 345,132 Urban development Planning 398,265 398,465 363,776 34,689 Building inspection 713,690 713,690 620,838 92,852 Code enforcement 180,330 180,330 150,685 29,645 Total urban development 1,292,285 1,292,485 1,135,299 157,186 Streets Streets 1,742,360 1,742,360 1,620,193 122,167 Total streets 1,742,360 1,742,360 1,620,193 122,167 Community service Parks 1,548,110 1,548,110 1,423,806 124,304 Recreation 313,870 313,970 256,147 57,823 Library 715,025 746,012 708,664 37,348 Total community service 2,577,005 2,608,092 2,388,617 219,475 Total expenditures 21,510,385 21,556,354 20,394,461 1,161,893 Excess of revenues over expenditures 315,123 298,923 1,103,865 804,942 OTHER FINANCING SOURCES(USES) Transfers in 516,330 516,330 450,000 66,330 Transfers out (558,300) (670,800) (558,300) (112,500) Sale of property - - 2,015 (2,015) Total other financing sources(uses) (41,970) (154,470) (106,285) (48,185) Net change in fund balances 273,153 144,453 997,580 853,127 Fund balances,October 1 9,066,581 9,066,581 9,066,581 - Fund balances,September 30 $ 9,339,734 $ 9,211,034 $ 10,064,161 $ 853,127 54 CITY OF WYLIE, TEXAS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED SEPTEMBER 30, 2009 STEWARDSHIP, COMPLIANCE,AND ACCOUNTABLITY A. Budgetary Information The City follows the following procedures in establishing the budgetary date reflected in the financial statements: 1. Public hearings are conducted to obtain taxpayer comments. 2. Prior to October 1,the budget is legally enacted through passage of an ordinance. 3. The City Manager is authorized to transfer budgeted amounts between departments within any fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council. Therefore the fund level is the legal level of control. 4. Budgeted amounts are as originally adopted or as amended by the City Council. During 2009, individual amendments were not material in relation to the original appropriations. Any budgeted amounts appropriated at fiscal year-end and not spent automatically lapse. 5. Formal budgetary integration is employed as a management control device during the year. The legally adopted budget is adopted on a basis consistent with generally accepted accounting principles. 55 COMBINING STATEMENTS AND BUDGETARY COMPARISON SCHEDULES 56 CITY OF WYLIE, TEXAS EXHIBIT A-11 BUDGETARY COMPARISON SCHEDULE (GAAP BASIS) GENERAL OBLIGATION DEBT SERVICE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009 Variance with Budgeted Amounts Final Budget- Original Final Actual Positive(Negative) REVENUES Ad valorem taxes $ 7,672,273 $ 7,672,273 $ 7,599,681 $ (72,592) Interest income 299,924 299,924 23,337 (276,587) Miscellaneous income - - 2,991 2,991 Total revenues 7,972,197 7,972,197 7,626,009 (346,188) EXPENDITURES Debt service Principal 3,299,060 3,299,060 3,321,403 (22,343) Interest and fiscal charges 5,223,890 5,223,890 4,897,428 326,462 Total debt service 8,522,950 8,522,950 8,218,831 304,119 Excess(deficiency)of revenue over(under)expenditures (550,753) (550,753) (592,822) (42,069) Other financing sources(uses) Transfers in 550,747 550,750 550,750 - Total other financing sources(uses) 550,747 550,750 550,750 - Net change in fund balances (6) (3) (42,072) (42,069) Fund balances,October 1 445,426 445,426 445,426 - Fund balances,September 30 $ 445,420 $ 445,423 $ 403,354 $ (42,069) 57 This page left intentionally blank 58 NON-MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS 4B SALES TAX REVENUE FUND Accounts for sales tax monies specifically designated for promoting economic development within the City by developing, implementing, providing and financing park and recreation projects. PARKS ACQUISITION AND IMPROVEMENT FUND Accounts for the developmental and improvement of City Parks. EMERGENCY COMMUNICATIONS FUND Accounts for the operations of the 911 dispatch services of the police and fire departments. FIRE TRAINING CENTER FUND Accounts for First Responder fees specifically designated for the construction of the Fire Training Center. FIRE DEVELOPMENT FEES FUND Accounts for contributions specifically designated for use of the fire department. MUNICIPAL COURT TECHNOLOGY FUND Accounts for court fines specifically designated for improvements in court technology. MUNICIPAL COURT BUILDING SECURITY FUND Accounts for court fines specifically designated for additions/improvements to court security. HOTEL TAX FUND Accounts for occupancy taxes charged to hotels. PUBLIC ARTS FUND Accounts for the accumulation of resources specifically designated for enhancing public art in City public works projects and for acquiring visual art as determined by the Public Arts Program. DEBT SERVICE FUND 4B DEBT SERVICE FUND 1996 Accounts for the accumulation of resources to be used for the payment of principal and interest on the 4B Sales Tax Revenue Bonds—Series 1996. 4B DEBT SERVICE FUND 2005 Accounts for the accumulation of resources to be used for the payment of principal and interest on the 4B Sales Tax Revenue Bonds—Series 2005. 59 CITY OF WYLIE, TEXAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2009 SPECIAL REVENUE FUNDS Park Acquisition Fire 4B Sales Tax and Emergency Fire Training Development Municipal Court Revenue Improvement Communications Center Fees Technology ASSETS Cash and cash equivalents $ 1,152,407 $ 397,440 $ 544,942 $ 115,954 $ 697,991 $ 58,930 Receivables:(net of allowances for uncollectibles) Other - - 58,265 9,688 - - Intergovernmental 244,638 - - - - - Total assets $ 1,397,045 $ 397,440 $ 603,207 $ 125,642 $ 697,991 $ 58,930< LIABILITIES AND FUND BALANCES Accounts payable $ 9,732 $ - $ 62,500 $ 457 $ - $ - Other payables and accruals 13,353 - 16,785 - - - Total liabilities 23,085 - 79,285 457 - - FUND BALANCES Reserved for Debt service - - - - - - Unreserved,reported in Special revenue funds 1,373,960 397,440 523,922 125,185 697,991 58,930 Total fund balances 1,373,960 397,440 523,922 125,185 697,991 58,930 Total liabilities and fund balances $ 1,397,045 $ 397,440 $ 603,207 $ 125,642 $ 697,991 $ 58,930 60 EXHIBIT B-1 DEBT SERVICE FUNDS Municipal Total Nonmajor Court Building 4B Debt Service 4B Debt Service Governmental Security Hotel Tax Public Arts 1996 2005 Funds $ 125,090 $ 24,447 $518,290 $ 37,106 $ 154,859 $ 3,827,456 2,678 - - 70,631 - - - - - 244,638 $ 125,090 $ 27,125 $518,290 $ 37,106 $ 154,859 $ 4,142,725 $ - $ - $ 1,999 $ - $ - $ 74,688 - - - - 30,138 - - 1,999 - - 104,826 - - - 37,106 154,859 191,965 125,090 27,125 516,291 - - 3,845,934 125,090 27,125 516,291 37,106 154,859 4,037,899 $ 125,090 $ 27,125 $518,290 $ 37,106 $ 154,859 $ 4,142,725a 61 CITY OF WYLIE, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009 SPECIAL REVENUE FUNDS Park Acquisition Municipal 4B Sales Tax and Emergency Fire Training Fire Development Court Revenue Improvement Communications Center Fees Technology REVENUES Sales taxes $ 1,298,336 $ - $ - $ - $ - $ - Intergovernmental - 249,874 - - - - Service fees - - 563,587 45,548 - - Court fees - - - - - 13,356 Interest income 8,112 2,892 6,670 840 5,406 472 Miscellaneous income - 77,650 - - 164,362 - Total revenues 1,306,448 330,416 570,257 46,388 169,768 13,828 EXPENDITURES Current: General government - - - - - - Public safety - - 1,181,542 5,698 - 1,168 Community service 469,309 259,616 - - - - Debt service Principal - - - - - - Interest and fiscal charges - - - - - - Total expenditures 469,309 259,616 1,181,542 5,698 - 1,168 Excess(deficiency)of revenues over(under)expenditures 837,139 70,800 (611,285) 40,690 169,768 12,660 Other financing sources(uses) Transfers in - - 525,000 - - - Transfers out (565,300) - - - - - Total other financing sources(uses) (565,300) - 525,000 - - - Net change in fund balances 271,839 70,800 (86,285) 40,690 169,768 12,660 Fund balances,October 1 1,102,121 326,640 610,207 84,495 528,223 46,270 Fund balances,September 30 $ 1,373,960 $ 397,440 $ 523,922 $ 125,185 $ 697,991 $ 58,930 62 EXHIBIT B-2 DEBT SERVICE FUNDS Municipal Total Nonmajor Court Building 4B Debt Service 4B Debt Service Governmental Security Hotel Tax Public Arts 1996 2005 Funds $ - $27,100 $ - $ - $ - $ 1,325,436 - - _ - - 249,874 - _ - - 609,135 10,026 - - - - 23,382 1,096 25 5,661 584 2,282 34,040 - - _ - - 242,012 11,122 27,125 5,661 584 2,282 2,483,879 42,078 - - 42,078 4,069 - - - 1,192,477 - - - - - 728,925 - - - 95,000 211,500 306,500 - - - 50,526 208,226 258,752 4,069 - 42,078 145,526 419,726 2,528,732 7,053 27,125 (36,417) (144,942) (417,444) (44,853) - - 506,759 145,540 419,760 1,597,059 - - - - (565,300) - 506,759 145,540 419,760 1,031,759 7,053 27,125 470,342 598 2,316 986,906 118,037 - 45,949 36,508 152,543 3,050,993 $ 125,090 $27,125 $516,291 $ 37,106 $ 154,859 $ 4,037,899 63 CITY OF WYLIE,TEXAS EXHIBIT C-1 4B SALES TAX REVENUE FUND SPECIAL REVENUE FUND BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED SEPTEMBER 30, 2009 Budgeted Amounts Variance with Final Budget Positive Original Final Actual (Negative) REVENUES Sales taxes $ 1,300,000 $ 1,300,000 $ 1,298,336 $ (1,664) Interest income 10,000 10,000 8,112 (1,888) Total revenues 1,310,000 1,310,000 1,306,448 (3,552) EXPENDITURES Current Community service 4B Parks 415,080 415,080 355,316 59,764 4B Recreation 114,940 114,940 113,993 947 Total Community Service 530,020 530,020 469,309 60,711 Total expenditures 530,020 530,020 469,309 60,711 Excess(deficiency)of revenues over(under)expenditures 779,980 779,980 837,139 57,159 Other financing sources(uses) Transfers out (565,300) (565,300) (565,300) - Total other financing sources(uses) (565,300) (565,300) (565,300) - Net change in fund balances 214,680 214,680 271,839 57,159 Fund balances,October 1 1,102,121 1,102,121 1,102,121 - Fund balances,September 30 $ 1,316,801 $ 1,316,801 $ 1,373,960 $ 57,159 64 CITY OF WYLIE, TEXAS EXHIBIT C-2 PARK ACQUISTION AND IMPROVEMENT SPECIAL REVENUE FUND BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED SEPTEMBER 30, 2009 Budgeted Amounts Variance with Final Budget Positive Original Final Actual (Negative) REVENUES Intergovernmental $ 270,000 $ 270,000 $ 249,874 $ (20,126) Interest income 12,000 12,000 2,892 (9,108) Miscellaneous income - - 77,650 77,650 Total revenues 282,000 282,000 330,416 48,416 EXPENDITURES Current Community service Park acquisition-west zone 1,500 1,500 1,500 - Park acquisition-central zone 382,810 382,810 258,116 124,694 Total expenditures 384,310 384,310 259,616 124,694 Excess(deficiency)of revenues over(under)expenditures (102,310) (102,310) 70,800 173,110 Net change in fund balances (102,310) (102,310) 70,800 173,110 Fund balances,October 1 326,640 326,640 326,640 - Fund balances,September 30 $ 224,330 $ 224,330 $ 397,440 $ 173,110 65 CITY OF WYLIE, TEXAS EXHIBIT C-3 EMERGENCY COMMUNICATIONS FUND SPECIAL REVENUE FUND BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED SEPTEMBER 30, 2009 Budgeted Amounts Variance with Final Budget Positive Original Final Actual (Negative) REVENUES Service fees $ 510,000 $ 510,000 $ 563,587 $ 53,587 Interest income 12,000 12,000 6,670 (5,330) Total revenues 522,000 522,000 570,257 48,257 EXPENDITURES Current Public safety Dispatch services 1,324,891 1,437,051 1,181,542 255,509 Total public safety 1,324,891 1,437,051 1,181,542 255,509 Excess(deficiency)of revenues over(under)expenditures (802,891) (915,051) (611,285) 303,766 Other financing sources(uses) Transfers in 525,000 637,500 525,000 (112,500) Total other financing sources(uses) 525,000 637,500 525,000 (112,500) Net change in fund balances (277,891) (277,551) (86,285) 191,266 Fund balances, October 1 610,207 610,207 610,207 - Fund balances,September 30 $ 332,316 $ 332,656 $ 523,922 $ 191,266 66 CITY OF WYLIE, TEXAS EXHIBIT C-4 BUDGETARY COMPARISON SCHEDULE (GAAP BASIS) FIRE TRAINING CENTER SPECIAL REVENUE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009 Budgeted Amounts Variance with Final Budget Positive Original Final Actual (Negative) REVENUES Service fees $ 25,000 $ 25,000 $ 45,548 $ 20,548 Interest income - - 840 840 Total revenues 25,000 25,000 46,388 21,388 EXPENDITURES Current Public safety Fire training center 15,171 15,171 5,698 9,473 Total public safety 15,171 15,171 5,698 9,473 Excess of revenues over expenditures 9,829 9,829 40,690 30,861 Net change in fund balances 9,829 9,829 40,690 30,861 Fund balances, October 1 84,495 84,495 84,495 - Fund balances,September 30 $ 94,324 $ 94,324 $ 125,185 $ 30,861 67 CITY OF WYLIE, TEXAS EXHIBIT C-5 BUDGETARY COMPARISON SCHEDULE (GAAP BASIS) MUNICIPAL COURT TECHNOLOGY FUND SPECIAL REVENUE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009 Budgeted Amounts Variance with Final Budget Positive Original Final Actual (Negative) REVENUES Court fees $ 20,000 $ 20,000 $ 13,356 $ (6,644) Interest income 2,000 2,000 472 (1,528) Total revenues 22,000 22,000 13,828 (8,172) EXPENDITURES Current Public safety 2,000 2,000 1,168 832 Total public safety 2,000 2,000 1,168 832 Excess of revenues over expenditures 20,000 20,000 12,660 (7,340) Net change in fund balances 20,000 20,000 12,660 (7,340) Fund balances, October 1 46,270 46,270 46,270 - Fund balances,September 30 $ 66,270 $ 66,270 $ 58,930 $ (7,340) 68 CITY OF WYLIE, TEXAS EXHIBIT C-6 BUDGETARY COMPARISON SCHEDULE (GAAP BASIS) MUNICIPAL COURT BUILDING SECURITY FUND SPECIAL REVENUE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009 Budgeted Amounts Variance with Final Budget Positive Original Final Actual (Negative) REVENUES Court fees $ 12,000 $ 12,000 $ 10,026 $ (1,974) Interest income 2,000 2,000 1,096 (904) Total revenues 14,000 14,000 11,122 (2,878) EXPENDITURES Current Public safety 5,000 5,000 4,069 931 Total public safety 5,000 5,000 4,069 931 Excess of revenues over expenditures 9,000 9,000 7,053 (1,947) Net change in fund balances 9,000 9,000 7,053 (1,947) Fund balances,October 1 118,037 118,037 118,037 - Fund balances, September 30 $ 127,037 $ 127,037 $ 125,090 $ (1,947) 69 CITY OF WYLIE, TEXAS EXHIBIT C-7 BUDGETARY COMPARISON SCHEDULE (GAAP BASIS) HOTEL TAX FUND SPECIAL REVENUE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009 Budgeted Amounts Variance with Final Budget Positive Original Final Actual (Negative) REVENUES Sales taxes $ - $ - $ 27,100 $ 27,100 Interest income - - 25 25 Total revenues - - 27,125 27,125 EXPENDITURES Current Public safety Fire training center - - - - Total public safety - - - - Excess of revenues over expenditures - - 27,125 27,125 Net change in fund balances - - 27,125 27,125 Fund balances, October 1 - - - - Fund balances, September 30 $ - $ - $ 27,125 $ 27,125 70 CITY OF WYLIE, TEXAS EXHIBIT C-8 BUDGETARY COMPARISON SCHEDULE (GAAP BASIS) PUBLIC ARTS FUND SPECIAL REVENUE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009 Budgeted Amounts Variance with Final Budget Positive Original Final Actual (Negative) REVENUES Interest income $ 500 $ 500 $ 5,661 $ 5,161 Total revenues 500 500 5,661 5,161 EXPENDITURES Current General government 50,000 93,625 42,078 51,547 Total public safety 50,000 93,625 42,078 51,547 (Deficiency)of revenues (under)expenditures (49,500) (93,125) (36,417) 56,708 Other financing sources(uses) Transfers in 506,759 506,759 506,759 - Total other financing sources(uses) 506,759 506,759 506,759 - Net change in fund balances 457,259 413,634 470,342 56,708 Fund balances, October 1 45,949 45,949 45,949 - Fund balances, September 30 $ 503,208 $ 459,583 $ 516,291 $ 56,708 71 CITY OF WYLIE, TEXAS EXHIBIT D-1 BUDGETARY COMPARISON SCHEDULE (GAAP BASIS) 4B DEBT SERVICE 1996 FUND DEBT SERVICE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009 Variance with Budgeted Amounts Final Budget- Original Final Actual Positive(Negative) REVENUES Interest income $ - $ - $ 584 $ 584 Total revenues - - 584 584 EXPENDITURES Debt service Principal 95,000 95,000 95,000 - Interest and fiscal charges 50,540 50,540 50,526 14 Total debt service 145,540 145,540 145,526 14 Total expenditures 145,540 145,540 145,526 14 Excess(deficiency)of revenues over(under)expenditures (145,540) (145,540) (144,942) 598 Other financing sources(uses) Transfers in 145,540 145,540 145,540 - Total other financing sources(uses) 145,540 145,540 145,540 - Net changes in fund balances - - 598 598 Fund balances,October 1 36,508 36,508 36,508 - Fund balances,September 30 $ 36,508 $ 36,508 $ 37,106 $ 598 72 CITY OF WYLIE, TEXAS EXHIBIT D-2 BUDGETARY COMPARISON SCHEDULE (GAAP BASIS) 4B DEBT SERVICE 2005 FUND DEBT SERVICE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009 Variance with Budgeted Amounts Final Budget- Original Final Actual Positive(Negative) REVENUES Interest income $ - $ - $ 2,282 $ 2,282 Total revenues - - 2,282 2,282 EXPENDITURES Debt service Principal 211,500 211,500 211,500 - Interest and fiscal charges 208,260 208,260 208,226 34 Total debt service 419,760 419,760 419,726 34 Total expenditures 419,760 419,760 419,726 34 Excess(deficiency)of revenues over(under)expenditures (419,760) (419,760) (417,444) 2,316 Other financing sources(uses) Transfers in 419,760 419,760 419,760 - Total other financing sources(uses) 419,760 419,760 419,760 - Net changes in fund balances - - 2,316 2,316 Fund balances,October 1 152,543 152,543 152,543 - Fund balances,September 30 $ 152,543 $ 152,543 $ 154,859 $ 2,316 73 STATISTICAL SECTION 74 CITY OF WYLIE, TEXAS STATISTICAL SECTION TABLE OF CONTENTS This part of the City of Wylie's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, notes disclosures, and required supplementary information says about the City's overall financial health. This information has not been audited by the independent auditor. Contents Table #s Financial Trends 1-5 These tables contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity 6-12 These tables contain information to help the reader assess the City's two most significant local revenue sources,the property and sales taxes. Debt Capacity 13-17 These tables present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Economic and Demographic Information 18-19 These tables offer economic and demographic indicators to help the reader understand the environment within which the City's financial activities take place. Operating Information 20-22 These tables 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. Source: Unless otherwise noted,the information in these tables is derived from the comprehensive annual financial reports for the relevant year. The City implemented GASB Statement 34 in fiscal year 2003:tables presenting government-wide information include information beginning in that year. 75 CITY OF WYLIE, TEXAS NET ASSETS BY COMPONENT LAST SEVEN FISCAL YEARS (UNAUDITED) Fiscal Year 2003 2004 2005 Governmental Activities Invested in Capital Assets, Net of Related Debt $ 55,109,795 $ 62,317,301 $ 72,335,440 Restricted 7,714,394 4,103,955 6,412,687 Unrestricted (962,448) 7,178,450 7,914,730 Total Governmental Activities Net Assets 61,861,741 73,599,706 86,662,857 Business-type Activities Invested in Capital Assets, Net of Related Debt 18,425,639 20,801,795 25,207,269 Restricted 9,750,823 12,626,787 12,739,448 Unrestricted 3,300,191 3,680,724 5,175,119 Total Business-type Activities Net Assets 31,476,653 37,109,306 43,121,836 Primary Government Invested in Capital Assets, Net of Related Debt 73,535,434 83,119,096 97,542,709 Restricted 17,465,217 16,730,742 19,152,135 Unrestricted 2,337,743 10,859,174 13,089,849 Total Primary Government Net Assets $ 93,338,394 $ 110,709,012 $ 129,784,693 Note:The city began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003.This information is presented using the accrual basis of accounting. 76 TABLE 1 2006 2007 2008 2009 $ 73,959,342 $ 80,156,749 $ 81,535,501 $ 87,367,632 9,702,583 4,748,476 - - 5,266,581 11,225,518 16,778,998 18,364,466 88,928,506 96,130,743 98,314,499 105,732,098 31,205,119 36,564,901 37,155,724 37,166,408 11,926,132 8,738,654 7,460,624 7,338,139 6,181,593 7,424,351 9,393,691 9,820,167 49,312,844 52,727,906 54,010,039 54,324,714 105,164,461 116,721,650 118,691,225 124,534,040 21,628,715 13,487,130 7,460,624 7,338,139 11,448,174 18,649,869 26,172,689 28,184,633 $ 138,241,350 $ 148,858,649 $ 152,324,538 $ 160,056,812 77 CITY OF WYLIE, TEXAS EXPENSES, PROGRAM REVENUES, AND NET(EXPENSE)/REVENUE LAST SEVEN FISCAL YEARS (UNAUDITED) Fiscal Year 2003 2004 2005 Expenses Governmental Activities: General Government $ 2,946,474 $ 3,360,719 $ 3,490,621 Public Safety 4,868,978 5,898,710 7,437,298 Urban development 723,553 839,258 958,368 Streets 2,888,760 3,507,891 4,012,471 Community service 1,866,710 2,118,200 2,348,580 Interest on Long-Term Debt 897,371 836,290 1,030,375 Total Governmental Activities Expenses 14,191,846 16,561,068 19,277,713 Business-type Activities . Utility 5,294,510 5,155,675 7,926,463 Total Business-type Activities Expenses 5,294,510 5,155,675 7,926,463 Total Primary Government Expenses $ 19,486,356 $ 21,716,743 $ 27,204,176 Program Revenues Governmental Activities: Charges for Services: General Government $ 1,130,651 $ 1,399,332 $ 1,522,104 Public safety 592,041 779,785 1,071,140 Urban development 2,150,919 1,986,683 1,689,979 Community service 115,180 107,242 130,434 Operating Grants and Contributions 67,139 42,088 61,271 Capital Grants and Contributions 339,992 10,902,894 12,462,144 Total Governmental Activities Program Revenues 4,395,922 15,218,024 16,937,072 Business-type Activities: Charges for Services: Utility 5,864,532 6,776,232 7,876,859 Capital Grants and Contributions 3,763,980 3,863,745 5,945,267 Total Busines-type Activities Program Revenues 9,628,512 10,639,977 13,822,126 Total Primary Government Programs Revenues 14,024,434 25,858,001 30,759,198 Net(Expense)/Revenue Governmental Activities $ (9,795,924) $ (1,343,044) $ (2,340,641) Business-type Activities 4,334,002 5,484,302 5,895,663 Total Primary Goevernment Net Expense (5,461,922) 4,141,258 3,555,022 Note:The city began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003.This information is presented using the accrual basis of accounting. 78 TABLE 2 2006 2007 2008 2009 $ 4,144,882 $ 4,027,017 $ 5,861,991 $ 3,485,356 8,003,798 10,029,670 10,502,873 11,585,582 862,184 1,083,316 1,061,318 1,178,655 4,578,339 4,631,177 4,871,088 6,761,308 2,651,744 3,074,976 3,248,168 3,325,813 1,751,355 2,795,083 3,068,061 4,872,366 21,992,302 25,641,239 28,613,499 31,209,080 8,843,954 9,495,460 10,219,481 10,338,152 8,843,954 9,495,460 10,219,481 10,338,152 $ 30,836,256 $ 35,136,699 $ 38,832,980 $ 41,547,232 $ 1,862,104 $ 2,176,853 $ 2,192,056 $ 2,164,172 946,408 1,034,296 1,011,893 1,257,771 1,748,000 1,400,515 1,043,266 558,461 221,299 209,254 313,050 252,003 37,731 372,503 405,557 264,209 8,411,904 5,958,047 2,200,423 5,731,359 13,227,446 11,151,468 7,166,245 10,227,975 8,832,061 8,041,284 9,508,602 10,172,309 5,148,706 4,019,494 1,154,027 51,500 13,980,767 12,060,778 10,662,629 10,223,809 27,208,213 23,212,246 17,828,874 20,451,784 $ (8,764,856) $ (14,489,771) $ (21,447,254) $ (20,981,105) 5,136,813 2,565,318 443,148 (114,343) (3,628,043) (11,924,453) (21,004,106) (21,095,448) 79 CITY OF WYLIE, TEXAS GENERAL REVENUES AND TOTAL CHANGE IN NET ASSETS LAST SEVEN FISCAL YEARS (UNAUDITED) 2003 2004 2005 Net(Expense)/Revenue Governmental Activities $ (9,795,924) $ (1,343,044) $ (2,340,641) Business-type Activities 4,334,002 5,484,302 5,895,663 Total Primary Government Net Expense (5,461,922) 4,141,258 3,555,022 Governmental Revenues and Other Changes in Net Assets Governmental Activities: Taxes Property Taxes 6,748,379 8,226,158 9,744,962 Sales Taxes 1,513,254 2,130,573 2,668,983 Franchise Taxes 1,363,395 1,712,695 1,454,975 Unrestricted Investment Earnings 188,379 146,679 439,481 Miscellaneous Income 35,914 25,698 558,401 Gain(loss)on disposal of capital assets 6,207 - - Transfers 492,125 570,239 479,942 Total Governmental Activities 10,347,653 12,812,042 15,346,744 Business-type Activities: Investment Earnings 227,486 191,258 441,638 Miscellaneous Income 61,564 131,494 129,796 Gain(loss)on disposal of capital assets - - 193,305 Transfers (492,125) (570,239) (479,942) Total Business-type Activities (203,075) (247,487) 284,797 Total Primary Government $ 10,144,578 $ 12,564,555 $ 15,631,541 Change in Net Assets Governmental Activities $ 551,729 $ 11,468,998 $ 13,006,103 Business-type Activities 4,130,927 5,236,815 6,180,640 Total Primary Government $ 4,682,656 $ 16,705,813 $ 19,186,743 Note:The city began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003. This information is presented using the accrual basis of accounting. 80 TABLE 3 2006 2007 2008 2009 $ (8,764,856) $ (14,489,771) $ (21,447,254) $ (20,981,105) 5,136,813 2,565,318 443,148 (114,343) (3,628,043) (11,924,453) (21,004,106) (21,095,448) 11,232,673 13,100,185 15,540,800 20,391,128 3,308,755 3,575,795 3,892,994 3,933,650 1,941,805 1,739,883 1,963,797 2,391,509 1,406,561 2,687,320 1,926,928 924,047 469,580 152,518 215,192 297,601 - (13,693) 34,396 10,769 447,137 450,000 450,000 450,000 18,806,511 21,692,008 24,024,107 28,398,704 821,375 1,125,117 786,986 299,563 315,329 174,627 40,082 579,455 (447,137) (450,000) (450,000) (450,000) 689,567 849,744 377,068 429,018 $ 19,496,078 $ 22,541,752 $ 24,401,175 $ 28,827,722 $ 10,041,655 $ 7,202,237 $ 2,576,853 $ 7,417,599 5,826,380 3,415,062 820,216 314,675 $ 15,868,035 $ 10,617,299 $ 3,397,069 $ 7,732,274 81 CITY OF WYLIE, TEXAS FUND BALANCE OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (UNAUDITED) 2000 2001 2002 2003 2004 General Fund Reserved $ 123,443 $ 93,941 $ 281,746 $ 27,156 $ 27,156 Unreserved 1,029,509 2,074,503 2,427,547 3,358,463 3,358,463 Total General Fund $ 1,152,952 $2,168,444 $2,709,293 $3,385,619 $3,385,619 All Other Governmental Funds Reserved $ 413,805 $ 447,709 $ 504,533 $ 652,595 $ 652,595 Unreserved,Reported in: Special Revenue Funds 648,818 656,310 553,365 923,291 923,291 Capital Projects Funds 3,977,960 7,134,694 8,485,096 7,124,117 7,124,117 Total All Other Governmental Funds $ 5,040,583 $8,238,713 $9,542,994 $8,700,003 $8,700,003 (1)The increase in fund balance was due to unspent bond proceeds from an issuance during the period for capital projects. 82 TABLE 4 2005 2006 2007 2008 2009 $ 66,650 $ 193,791 $ 541,028 $ 188,255 $ 146,428 4,426,413 5,923,979 7,486,053 8,878,326 9,917,733 $4,493,063 $ 6,117,770 $ 8,027,081 $ 9,066,581 $ 10,064,161 $ 799,229 $ 1,193,142 $ 319,576 $ 634,477 $ 595,319 1,651,712 1,619,655 2,363,046 2,861,942 3,845,934 5,565,400 (1) 39,960,132 35,075,726 85,908,035 67,875,143 $8,016,341 $42,772,929 $ 37,758,348 $ 89,404,454 $ 72,316,396 83 CITY OF WYLIE, TEXAS CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (UNAUDITED) 2000 2001 2002 2003 2004 Revenues Ad valorem taxes $5,717,572 $6,591,776 $5,549,904 $6,789,129 $8,173,918 Sales taxes - - 1,425,506 1,513,254 2,130,572 Franchise fees - - 958,066 1,062,766 1,382,731 Licenses and permits 380,124 739,570 1,131,544 1,708,903 1,522,039 Intergovernmental 305,156 263,330 365,316 360,135 532,857 Service fees 834,143 1,077,036 1,643,429 1,563,150 1,964,910 Court fees 520,297 492,549 484,920 426,637 419,272 Interest income 368,180 358,224 225,386 188,379 146,679 Miscellaneous income 109,817 292,778 162,866 353,940 143,896 Total Revenues 8,235,289 9,815,263 11,946,937 13,966,293 16,416,874 Expenditures General Government 2,243,847 2,553,293 2,946,905 3,067,478 3,380,349 Public Safety 2,763,704 3,144,614 4,120,896 4,761,956 5,773,019 Urban development 418,151 550,994 711,194 707,450 827,281 Streets 561,432 445,148 2,210,787 721,335 1,213,454 Community Service 893,465 1,166,681 1,438,312 1,906,459 2,094,914 Capital Outlay 1,841,395 1,758,402 - 1,479,178 3,865,797 Debt Service Principal 1,186,455 1,409,509 1,096,743 1,190,889 1,326,449 Interest and fiscal charges - - 746,970 875,384 850,877 Bond issuance costs - - - - - Total Expenditures 9,908,449 11,028,641 13,271,807 14,710,129 19,332,140 Excess of Revenues Over(Under)Expenditures (1,673,160) (1,213,378) (1,324,870) (743,836) (2,915,266) Other Financing Sources(Uses) Transfers In 542,355 565,000 771,430 1,149,708 1,011,756 Transfers Out (174,465) (138,000) (351,430) (909,784) (690,495) Issuance of long-term debt 2,000,000 5,000,000 2,750,000 - - Premium on bonds issued - - - - - Discount on bonds issued - - - - - Payment to refunded bond escrow agent - - - - - Sale of capital assets - - - 6,207 - Total Other Financing Sources(Uses) 2,367,890 5,427,000 3,170,000 246,131 321,261 Net Change in Fund Balances 694,730 4,213,622 1,845,130 (497,705) (2,594,005) Debt Service as a Percentage of Noncapital Expenditures 14.7% 15.2% 13.9% 15.6% 14.1 84 TABLE 5 2005 2006 2007 2008 2009 $9,754,037 $ 11,207,753 $ 13,094,757 $ 15,530,285 $20,310,022 2,668,983 3,308,755 3,575,794 3,892,994 3,933,650 1,407,351 1,893,383 1,908,984 2,045,205 2,136,664 1,260,963 1,319,956 1,056,919 1,857,614 1,060,595 773,875 443,124 784,350 1,558,929 2,485,357 2,094,474 2,322,030 2,557,315 2,767,258 2,670,068 427,892 617,288 587,250 547,987 427,246 439,481 1,406,562 2,687,318 1,882,079 913,799 840,676 859,269 1,361,511 644,793 562,751 19,667,732 23,378,120 27,614,198 30,727,144 34,500,152 3,767,483 4,169,819 11,542,571 6,927,392 5,442,300 7,751,414 8,892,087 9,357,139 10,244,272 11,042,607 953,570 859,697 1,080,324 1,026,260 1,135,299 1,345,498 1,548,675 1,470,049 1,587,208 1,620,193 8,554,999 2,789,512 3,026,580 3,303,805 3,117,542 4,178,917 2,190,857 873,016 5,924,706 19,900,621 1,404,888 1,554,007 1,511,412 1,975,248 3,627,903 769,876 1,109,257 3,324,640 2,725,301 5,156,180 176,219 154,417 75,387 247,318 - 28,902,864 23,268,328 32,261,118 33,961,510 51,042,645 (9,235,132) 109,792 (4,646,920) (3,234,366) (16,542,493) 1,188,604 1,293,280 2,951,221 2,834,249 2,597,809 (943,847) (1,546,049) (2,123,361) (2,384,249) (2,147,809) 13,798,337 36,229,000 4,793,155 55,625,000 - 160,796 200,697 34,739 238,069 - (84,614) - (34,364) - - - (3,971,472) - - (1,866,358) - (13,693) - 2,015 12,252,918 36,176,928 1,636,225 56,313,069 452,015 3,017,786 36,286,720 (3,010,695) 53,078,703 (16,090,478) 9.5% 13.4% 15.6% 17.6% 20.8% 85 CITY OF WYLIE, TEXAS TABLE 6 TAX REVENUES BY SOURCE, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Ad Valorem Sales Franchise Year Taxes Taxes Taxes Total 2000 $ 3,829,263 $ 1,182,764 $ 705,545 $ 5,717,572 2001 4,509,741 1,265,091 816,944 6,591,776 2002 5,549,904 1,425,506 958,066 7,933,476 2003 6,789,129 1,513,254 1,062,766 9,365,149 2004 8,173,918 2,130,572 1,382,731 11,687,221 2005 9,754,037 2,668,983 1,407,351 13,830,371 2006 11,207,753 3,308,755 1,893,383 16,409,891 2007 13,094,757 3,575,794 1,908,984 18,579,535 2008 15,530,285 3,892,994 2,045,205 21,468,484 2009 20,310,022 3,933,650 2,136,664 26,380,336 Percent Change $ 16,480,759 $ 2,750,886 $ 1,431,119 $ 20,662,764 2000-2009 123.2% 143.0% 149.3% 127.7% 86 This page left intentionally blank 87 CITY OF WYLIE, TEXAS ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (UNAUDITED) Less: Fiscal Residential Commercial Industrial Tax-Exempt Year Property Property Property Property 2000 $ 468,009,067 $ 93,993,900 $ 124,720,455 $ 36,723,491 2001 560,941,176 119,452,227 152,385,135 38,197,185 2002 726,859,995 141,791,206 145,359,599 48,290,835 2003 908,488,917 238,191,077 71,440,440 61,618,003 2004 1,150,987,305 278,236,963 68,178,047 67,507,524 2005 1,337,824,710 318,619,349 60,064,348 76,422,118 2006 1,542,236,827 263,505,829 136,669,956 84,931,166 2007 1,764,303,848 288,951,716 146,785,364 89,947,174 2008 1,851,412,088 320,559,885 154,813,362 94,519,658 2009 1,681,490,233 317,876,320 159,911,022 98,352,452 88 TABLE 7 Total Taxable Total Estimated Taxable Assessed Value as Assessed Direct Tax Actual Taxable a Percentage of Actual Value Rate Value Taxable Value $ 649,999,931 0.7250 $ 649,999,931 100.000% 7,945,813,353 0.7200 794,581,353 100.000% 965,719,965 0.7150 965,719,965 100.000% 1,156,502,431 0.7050 1,156,502,431 100.000% 1,429,894,791 0.6950 1,429,894,791 100.000% 1,640,086,289 0.6950 1,640,086,289 100.000% 1,857,481,446 0.7068 1,857,481,446 100.000% 2,110,093,754 0.7333 2,110,093,754 100.000% 2,232,265,677 0.8989 2,232,265,677 100.000% 2,257,630,027 0.8989 2,257,630,027 100.000% 89 CITY OF WYLIE, TEXAS TABLE 8 DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (UNAUDITED) City Direct Rates Overlapping Rates General Wylie Community Collin County Total Direct& Fiscal Basic Obligation Total Independent Independent Collin Community Overlapping Year Rate Debt Service Direct Rate School District School District County College District Rates 2000 0.5209 0.2041 0.7250 1.5700 1.2928 0.2500 0.0957 3.9335 2001 0.4891 0.2309 0.7200 1.5700 1.5000 0.2500 0.0941 4.1341 2002 0.5039 0.2111 0.7150 1.5609 1.4301 0.2500 0.0928 4.0488 2003 0.5340 0.1710 0.7050 1.6100 1.5375 0.2500 0.0920 4.1945 2004 0.5559 0.1391 0.6950 1.7200 1.6200 0.2500 0.0919 4.3769 2005 0.5619 0.1331 0.6950 1.8000 1.6700 0.2500 0.0906 4.5056 2006 0.5620 0.1448 0.7068 1.7250 1.5400 0.2400 0.0878 4.2996 2007 0.5620 0.1713 0.7333 1.3900 1.4950 0.2425 0.0877 3.9484 2008 0.5620 0.3369 0.8989 1.5100 1.4950 0.2425 0.0865 4.2329 2009 0.5620 0.3369 0.8989 1.5100 1.4950 0.2425 0.0865 4.2329 (1)Source:Central appraisal District of Coiling County web site(www.collincad.org). (2)Although the Community Independent School District is included in the above presentation,less than one per cent of the City of Wylie lies within this taxing jurisdiction. (3)Basis for property tax rate is per$100 of taxable valuation. 90 CITY OF WYLIE, TEXAS TABLE 9 PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND TEN YEARS AGO (UNAUDITED) 2009 1999 Percentage Percentage Taxable of Total City Taxable of Total City Assessed Taxable Assessed Taxable Taxpayer Value Rank Assessed Value Value Rank Assessed Value Sanden International $ 50,222,150 1 2.22% $ 54,538,998 1 10.05% ONCOR/TXU Electric Delivery Company 20,425,161 2 0.90% 6,276,534 6 1.16% Broadstone Woodbridge LP 16,370,936 3 0.73% - Sanden International(USA) 15,846,442 4 0.70% 17,118,224 2 3.16% Wal-Mart Real Estate Business 14,383,982 5 0.64% - Atrium Companies,Inc. 13,871,636 6 0.61% 3,503,895 9 0.65% Holland Hitch of Texas Inc. 11,924,726 7 0.53% 11,421,226 3 2.11% Cascades Apartments Ltd. 11,000,000 8 0.49% - Yes Companies LLC 10,541,091 9 0.47% - GTE Southwest,Inc. 10,340,600 10 0.46% 6,261,603 7 1.15% Woodbridge Crossing LP 10,135,456 11 0.45% - Best Circuit Boards Inc. 10,108,117 12 0.45% - Windough(DE)LP 7,500,000 13 0.33% - Sooners Group LP 7,216,719 14 0.32% - Wal-Mart Stores Texas LLC 7,074,238 15 0.31% - Southern Fastening Systems 6,857,056 16 0.30% - Westdale Rustic Oaks Ltd. 6,650,040 17 0.29% 4,358,054 8 0.80% BBV Texas Development LLC 5,914,760 18 0.26% - Bariatric Care Center of Tx.Inc. 5,879,820 19 0.26% - Carlisle Coatings and Water Proofing 5,672,066 20 0.25% 2,260,136 14 0.42% CMH Parks Inc. - - - 9,828,408 4 1.81% Fujilease Corp - - - 4,283,386 5 0.79% Tolmak Inc. - - - 3,043,306 10 0.56% Total $ 247,934,996 10.98% $ 122,893,770 22.65% (1)Source:Central Appraisal District of Collin County. 91 CITY OF WYLIE, TEXAS TABLE 10 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) Collected Within the Fiscal Year of the Levy Total Collections to Date Fiscal Taxes Levied Collections Year Ended for the Percentage in Subsequent Percentage September 30 Fiscal Year Amount of Levy Years Amount of Levy 2000 $ 3,799,949 $ 3,739,402 98.41% $ 44,588 $ 3,783,990 99.58% 2001 4,482,580 4,413,866 98.47% 52,355 4,466,221 99.64% 2002 5,551,269 5,413,295 97.51% 82,696 5,495,991 99.00% 2003 6,900,461 6,567,156 95.17% 136,594 6,703,750 97.15% 2004 8,229,415 8,029,289 97.57% 74,574 8,103,863 98.47% 2005 10,041,005 9,524,055 94.85% 159,178 9,683,233 96.44% 2006 11,161,901 10,989,996 98.46% 157,412 11,147,408 99.87% 2007 12,963,905 12,821,056 98.90% 1 12,821,057 98.90% 2008 15,262,086 15,241,892 99.87% 1 15,241,893 99.87% 2009 20,125,509 19,783,368 98.30% 120,195 19,903,563 98.90% 92 CITY OF WYLIE, TEXAS TABLE 11 TAXABLE SALES BY CATEGORY LAST TEN CALENDAR YEARS (UNAUDITED) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Construction $ 83,246 $ 113,140 $ 76,359 $ 66,974 $ 83,892 $ 197,405 $ 263,942 $ 237,532 $ 262,065 $ 245,608 Manufacturing 38,708 14,951 133,461 120,075 149,177 143,017 125,161 35,303 39,580 167,054 Transportation,Communications 91,419 61,081 114,753 117,531 412,117 381,744 520,844 574,246 502,877 449,408 Wholesale Trade 10,484 20,561 16,022 29,525 29,152 23,060 87,671 129,301 216,300 82,703 Retail Trade 670,330 800,505 921,257 921,521 1,068,919 1,201,192 1,364,324 1,756,930 1,591,815 1,980,495 Other 677,297 775,930 726,762 843,448 1,187,665 1,735,330 2,155,410 2,113,517 2,698,777 2,268,075 Total $ 1,571,484 $ 1,786,168 $ 1,988,614 $2,099,074 $2,930,922 $3,681,748 $4,517,352 $4,846,829 $5,311,414 $5,193,343 Note:Due to confidentiality issues,the names of the ten largest revenue payers are not available.The categories presented are intended to provide alternative information regarding the sources of revenue.The tax liability includes the City sales tax rate of one percent and the blended component unit rate of one-half percent. 93 CITY OF WYLIE, TEXAS TABLE 12 DIRECT AND OVERLAPPING SALES TAX REVENUE LAST TEN FISCAL YEARS (UNAUDITED) City Wylie Economic Fiscal Direct Development Collin Year Rate Corporation County 2000 1.50% 0.50% 0.00% 2001 1.50% 0.50% 0.00% 2002 1.50% 0.50% 0.00% 2003 1.50% 0.50% 0.00% 2004 1.50% 0.50% 0.00% 2005 1.50% 0.50% 0.00% 2006 1.50% 0.50% 0.00% 2007 1.50% 0.50% 0.00% 2008 1.50% 0.50% 0.00% 2009 1.50% 0.50% 0.00% Note:The City sales tax rate includes the City sales tax rate of one percent and the blended component unit rate of one-half percent 94 CITY OF WYLIE, TEXAS TABLE 13 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (UNAUDITED) General Bonded Debt Other Governmental Activities Debt General Combination Tax Fiscal Obligation Tax/Revenue Certificates of Revenue Contractual Loans and Capital Year Bonds Bonds Obligation Bonds Obligations Obligation Leases 2000 $ 8,092,579 $ - $ - $ 1,570,000 $ - $ - $ - 2001 11,064,179 - - 1,515,000 - - - 2002 15,294,286 1,509,130 365,000 1,400,000 - 370,000 - 2003 14,490,946 1,281,580 270,000 1,335,000 - 285,000 - 2004 13,656,341 1,049,736 170,000 1,265,000 - 195,000 - 2005 19,325,556 6,225,000 65,000 1,190,000 - 100,000 33,064 2006 53,613,889 6,010,000 - 1,115,000 841,659 - 16,097 2007 52,738,155 5,790,000 - 1,035,000 1,462,690 - - 2008 89,883,965 22,560,000 - 945,000 1,286,832 - - 2009 87,287,620 21,855,000 - 850,000 1,055,074 - - Business-type Activities General Water Total Percentage Fiscal Obligation Revenue Contractual Capital Primary of Personal Per Year Bonds Bonds Obligations Leases Government Income Capita(2) 2000 $ 6,522,421 $ 1,380,000 $ - $ - $ 17,565,000 4.98% $ 1,332 2001 6,100,821 3,060,000 - - 21,740,000 4.59% 1,301 2002 3,235,735 6,040,870 - 672,813 28,887,834 5.60% 1,574 2003 3,074,072 5,603,420 - 522,578 26,862,596 4.50% 1,258 2004 2,903,677 5,155,264 - 360,724 24,755,742 3.30% 947 2005 3,699,444 3,615,000 - 356,890 34,609,954 3.91% 1,161 2006 3,226,111 3,460,000 1,157,710 185,000 69,625,466 6.70% 2,110 2007 10,516,845 3,300,000 1,057,000 - 75,899,690 7.55% 2,300 2008 9,941,234 3,125,000 930,964 - 128,672,795 10.24% 3,354 2009 9,327,381 2,940,000 844,002 - 124,159,077 9.51% 3,242 (1)Details regarding the City's outstanding debt can be found in the notes to the financial statements. (2)See the Demographic and Economic Statistics table on page 92 for population data. 95 CITY OF WYLIE, TEXAS TABLE 14 RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS (UNAUDITED) General Bonded Debt Outstanding General Percentage Fiscal Obligation Certificates of Actual Taxable Per Year Bonds Obligation Total Value of Property Capita 2000 $ 16,921,504 $ - $ 16,921,504 3.20% $ 1,365 2001 20,782,305 - $ 20,782,305 3.37% 1,576 2002 15,294,286 365,000 $ 15,659,286 2.98% 937 2003 14,490,946 270,000 $ 14,760,946 1.70% 804 2004 13,656,341 170,000 $ 13,826,341 1.28% 648 2005 19,325,556 65,000 $ 19,390,556 1.80% 742 2006 53,613,889 - $ 53,613,889 3.51% 1,796 2007 82,738,155 - $ 82,738,155 2.50% 1,485 2008 89,883,765 - $ 89,883,765 4.03% 2,343 2009 87,287,620 $ 87,287,620 3.87% 2,279 96 CITY OF WYLIE, TEXAS TABLE 15 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT (UNAUDITED) Estimated Estimated Share of Debt Percentage Direct and Governmental Unit Outstanding Applicable Overlapping Debt Debt Repaid with Property Taxes Wylie Independent School District $ 239,223,563 (1) 56.47% $ 135,089,546 Community Independent School District 13,521,849 (1) 0.42% 56,792 Collin County 378,479,090 (1) 2.67% 10,105,392 Collin County 48,642,862 (1) 2.67% 1,298,764 Subtotal,Overlapping Debt 146,550,494 City Direct Debt (2) 87,287,620 Total Direct and Overlapping Debt 233,838,114 Ratio of Direct and Overlapping Bonded Debt to Taxable Assessed Valuation 10.36% Per Capita Direct and Overlapping Debt $ 6,105 (1)Source:First Southwest Company (2)Excludes self supported debt (3)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 businessess of the City of Wylie,Texas.This process recognizes that,when considering the government's ability to issue and repay long-term debt,the entire debt burden borrne by the residents and businessess 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. (4)The percentage of overlapping debt applicable is estimated using taxable assessed property values.Applicable percentages were estimated by determining the portion of the various government's taxable assessed value that is within the government's boundaries and dividing it by the total taxable assessed value. 97 CITY OF WYLIE, TEXAS TABLE 16 LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Debt Limit $98,316,670 $113,213,283 $ 135,497,032 $155,220,182 $ 184,161,840 $ 234,374,571 $790,054,078 $790,054,078 $790,054,078 $225,630,027 Total Net Debt Applicable to Limit 16,921,504 20,782,305 22,427,338 15,833,191 14,515,653 25,077,022 53,613,889 53,613,889 53,613,889 87,287,620 Legal Debt Margin 81,395,166 92,430,978 113,069,694 139,386,991 169,646,187 209,297,549 736,440,189 736,440,189 736,440,189 138,475,383 Total Net Debt Applicable to the Limit As a percentage of Debt Limit 17.21% 18.36% 16.55% 10.20% 7.88% 10.70% 6.79% 6.79% 6.79% 38.60% Legal Debt Margin Calculation for the Current Fiscal Year Assessed Value $ 2,257,630,027 Debt Limit(10%)of Assessed Value) 225,763,003 Debt Applicable to Limit: General Obligation Bonds 87,287,620 Less:Amount Set Aside for Repayment of General Obligation Debt (1,245,844) Total Net Debt applicable to Limit 86,041,776 Legal Debt Margin $ 139,721,227 (1)Under state law,the City of Wylie,Texas'outstanding general obligation debt should not exceed ten percent of total assessed property value.By law,the general obligation debt subject to the limitation may be offset by the amount set aside for repaying general obligation bonds. 98 CITY OF WYLIE, TEXAS TABLE 17 PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS (UNAUDITED) Water Revenue Bonds Utility Less: Net Fiscal Service Operating Avadable Debt Service(3) Year Charges(1) Expenses(2) Revenue Principal Interest Total Coverage 2000 $ 3,958,753 $ 2,124,943 $ 1,833,810 $ 40,000 $ 73,644 $ 113,644 16.14 2001 4,313,606 2,259,333 2054,273 85,000 168,929 253,929 8.09 2002 4,789,856 2,636,705 2153,151 90,000 163,411 253,411 8.50 2003 5,864,531 3,833,370 2031,161 135,000 203,808 338,808 6.00 2004 6,776,234 3,674,258 3,101,976 140,000 196,981 338,981 9.15 2005 7,876,858 6,411,920 1,464,938 145,000 190,322 335,322 4.37 2006 8,832,060 6,925,231 1,906,829 155,000 181,339 336,339 5.67 2007 8,041,284 7,614,530 426,754 160,000 657,090 817,090 0.52 2008 9,508,602 8217,466 1,291,136 175,000 712,223 887,223 1.46 2009 10,172309 9,755,859 416,450 185,000 582,293 767,293 0.54 (1)Includes total operating revenue of the Utility Enterprise Fund (2)Includes operating expenses of the Utility Enterprise Fund,less depreciation expense. (3)Debt service requirements indudes principal and interest payments on revenue bonds. 99 CITY OF WYLIE, TEXAS DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS (UNAUDITED) 2000 2001 2002 2003 2004 Population(1) 13,190 16,711 18,350 21,350 26,150 Personal Income $59,400 $50,000 $58,607 $67,215 $70,049 Per Capita Personal Income $26,749 $28,333 $28,132 $27,951 $28,716 Median Age 32.9 32.9 32.7 32.8 32.8 Education Level in Years of Schooling(2) Less than high school graduate 14.2% 14.2% 14.2% 14.2% 14.2% High school graduate(or equivalent) 26.6% 26.6% 26.6% 26.6% 26.6% Some college/associate's degree 37.4% 37.4% 37.4% 37.4% 37.4% Bachelor's degree 17.0% 17.0% 17.0% 17.0% 17.0% Masters, professional,or doctorate 4.8% 4.8% 4.8% 4.8% 4.8% School Enrollment 4,608 4,975 5,718 6,266 7,903 Unemployment(3) 2.6% 5.8% 7.7% 6.9% 5.2% (1)Population estimate from North Central Texas council of Governments,as modified by City staff estimates. (2)Education per the 2000 U.S. Census. (3)Unemployment rates from the Texas Workforce Commission website(www.twc.state.tx.us). 100 TABLE 18 2005 2006 2007 2008 2009 29,800 33,000 35,400 38,360 38,300 $72,570 $75,181 $77,624 $79,962 $83,476 $29,738 $31,511 $31,813 $32,771 $34,082 33.0 33.6 33.9 32.3 33.7 14.2% 14.2% 14.2% 14.2% 14.2% 26.6% 26.6% 26.6% 26.6% 26.6% 37.4% 37.4% 37.4% 37.4% 37.4% 17.0% 17.0% 17.0% 17.0% 17.0% 4.8% 4.8% 4.8% 4.8% 4.8% 8,948 9,800 10,739 11,369 11,349 4.3% 4.5% 3.6% 5.2% 8.3% 101 CITY OF WYLIE,TEXAS TABLE 19 PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (UNAUDITED) 2009 2000(1) Percentage Percentage of Total City of Total City Employer Employees Rank Employment Employees Rank Employment Wylie ISD 1,539 1 7.62% - - - Sanden International 670 2 3.53% - - - NTMWD 465 3 2.26% - - - Extruders 400 4 1.94% - - - Wal-Mart 360 5 1.75% - - - Target 223 6 1.09% - - - City of Wylie 220 7 0.89% - - - Global Innovation 187 8 0.71% - - - Home Depot 150 9 0.68% - - - Holland USA 142 10 0.45% - - - Total 4,356 20.92% - - (1)Information for 2000 is not available. 102 CITY OF WYLIE, TEXAS TABLE 20 FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) Full-Time Equivalent Employees as of Year End 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Function/Program General Government Management Services 5 6 7 7 8 8 10 12 13 13 Finance 6 6 6 6 6 6 5 5 5 5 Development Services 9 - - - - - - - - - Planning - 3 3 3 3 3 3 4 4 4 Building - 5 7 7 8 9 9 9 9 8 Other 3 4 4 3 3 4 4 5 6 7 Police Officers 22 28 23 26 28 35 38 43 47 49 Civilian 3 3 3 4 5 5 5 7 7 5 Fire Firefighters and Officers 17 18 26 27 29 30 30 36 42 41 Civilians 1 1 1 1 1 2 2 2 2 2 Animal Control 1 1 2 2 3 3 4 4 4 4 Dispatch 5 - 7 7 8 10 10 12 12 12 Streets 5 6 6 8 8 11 11 11 11 11 Other Public Works Engineering - 3 3 3 3 4 4 4 4 4 Other 11 9 11 11 11 13 13 13 13 13 Parks and Recreation 10 14 14 18 20 23 23 23 24 27 Library 6 6 6 6 6 7 8 8 9 12 Water 8 8 9 11 10 11 11 11 11 11 Wastewater - - - - 4 5 5 5 5 5 EDC 2 2 2 1 1 1 1 2 2 2 Total 114 123 140 151 165 190 196 216 230 235 103 CITY OF WYLIE, TEXAS OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) 2000 2001 2002 2003 2004 Function/Program General Government Building Permits Issued 409 634 974 1,430 1,282 Building Permits Value(thousands) $ 48,971 $ 83,529 $ 149,262 $ 189,835 $ 173,349 Police Physical Arrests 793 851 732 720 741 Violations Issued 5,690 4,928 5,200 4,301 3,966 Warrants Issued 898 740 715 230 378 Fire Emergency Responses 1,332 1,303 1,312 1,658 1,698 Fires Extinguished 119 115 108 138 164 Inspections 392 443 329 445 596 Other Public Works Street Resurfacing(miles) 4 - 1 4 5 Potholes Repaired - - - - - Parks and Recreation Athletic Field Permits Issued - - - - 25 Community Center Admissions - - - 14,280 19,044 Baseball/Softball Fields 8 8 8 8 8 Soccer/Football Fields 14 14 14 14 14 Library Volumes in Collection 38,247 42,997 44,000 46,166 47,251 Water New Connections 409 634 974 1,430 1,282 Water Main Breaks 10 14 21 26 17 Average Daily Consumption(gallons) 2,570,000 2,485,838 2,382,036 3,049,411 3,487,193 104 TABLE 21 2005 2006 2007 2008 2009 1,203 1,100 703 500 253 $ 145,748 $ 170,732 $ 127,663 $ 102,151 $ 150,000 706 923 1,536 1,280 1,215 3,044 6,068 5,681 4,917 3,492 1,664 1,062 1,287 1,235 575 1,935 2,107 2,502 2,607 2,723 209 172 51 126 78 527 549 1,203 1,275 905 - 5 5 4 2 216 240 170 50 50 34 18 41 - 106 20,349 14,173 15,351 14,273 9 9 9 10 18 16 16 16 16 20 49,393 50,393 49,951 47,708 47,507 1,020 1,100 711 240 104 16 24 5 18 19 4,076,730 3,991,080 3,738,551 3,682,780 3,760,000 105 CITY OF WYLIE, TEXAS TABLE 22 CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Function/Program Police Stations 1 1 1 1 1 1 1 1 1 1 Fire Stations 2 2 2 2 2 2 2 2 2 3 Other Public Works Streets(miles) 70 76 76 114 114 127 127 133 135 136 Alleys(miles) - - - 6 6 12 12 12 13 13 Traffic Signals 3 3 3 10 10 10 10 10 11 14 Parks and Recreation Acreage 170 175 213 224 239 279 541 621 632 672 Playgrounds 4 5 8 8 9 11 11 11 11 12 Community Centers 1 1 1 1 1 1 1 1 1 1 Water Water Mains(miles) 90 100 100 8 108 110 110 116 119 119 Fire Hydrants 800 800 800 1,084 1,242 1,242 1,242 1,388 1,464 1,500 Number of service connections 4,528 5,221 6,591 7,901 8,841 9,645 9,645 10,155 10,395 10,500 Wastewater Sanitary Sewers(miles) 100 108 108 114 114 123 130 136 141 141 Education Wylie ISD Campuses in Wylie 7 7 8 9 11 12 13 17 17 18 106 Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: February 23, 2010 Item Number: 2 Department: Public Services (City Secretary's Use Only) Prepared By: Mindy Manson Account Code: Date Prepared: February 15, 2010 Budgeted Amount: Exhibits: 2 Subject Consider and act on Resolution 2010-10(R) authorizing the City Manager to Execute the Wholesale Water Supply Contract ("Contract") by and between the City of Wylie and the City of Parker, and to Execute Exhibit "D" to the Contract which is the Interlocal Agreement for Disconnection of Parker Water Service Due to Nonpayment of City Sewer Charges by and between the City of Wylie and the City of Parker. Recommendation Motion to approve Resolution 2010-10(R) authorizing the City Manager to Execute the Wholesale Water Supply Contract ("Contract") by and between the City of Wylie and the City of Parker, and to Execute Exhibit "D" to the Contract which is the Interlocal Agreement for Disconnection of Parker Water Service Due to Nonpayment of City Sewer Charges by and between the City of Wylie and the City of Parker. Discussion Approximately four years ago, the City of Wylie and the City of Parker sought to update their respective Water and Wastewater Certificates of Convenience and Necessity (CCN), and they have been coordinating with the Texas Commission on Environmental Quality to accomplish that task. A CCN defines the service area in which a utility provider may provide services. Both Wylie and Parker have agreed to the boundaries of their respective CCNs; however, Wylie currently provides potable water service to several customers located in the City of Parker's water CCN because Parker cannot provide the necessary water infrastructure at this time. Wylie may also provide potable water service to future customers located in a portion of Parker's water CCN until such time that Parker installs the necessary infrastructure. In order for Wylie to provide this service, it is in the best interest of Wylie and Parker to enter into a Wholesale Water Supply contract that defines the terms and conditions of this arrangement. Exhibit "D" to the Wholesale Water Supply Contract is a disconnect agreement. The previous version of disconnect agreement approved by City Council on January 12, 2010 contained a minor typographical error, and this version corrects that error. The City of Parker has approved this version. Parker furnishes retail water service to an area in southeast Collin County, which includes portions of the City Wylie. Although Parker furnishes retail water service to this area, Wylie furnishes the sewer service. Texas law requires that in order for Wylie to disconnect or terminate water service for delinquent sewer service charges by its customers, Wylie must enter into a disconnect agreement with Parker that identifies the terms and conditions for requesting Parker to disconnect or terminate water service to a customer who is delinquent in Page 1 of 2 Page 2 of 2 their sewer service charges to Wylie. Based on the recommendations of a legal consultant who specializes in water law, Wylie has agreed to the terms and conditions set forth in the attached agreement. Approved By Initial Date Department Director MM 2-15-10 City Manager 7)101 4167 RESOLUTION NO. 2010-10(R) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS, HEREBY AUTHORIZING THE CITY MANAGER OF THE CITY OF WYLIE, TEXAS TO EXECUTE THE WHOLESALE WATER SUPPLY CONTRACT ("CONTRACT") BY AND BETWEEN THE CITY OF WYLIE AND THE CITY OF PARKER AND TO EXECUTE EXHIBIT "D" TO THE CONTRACT WHICH IS THE INTERLOCAL AGREEMENT FOR DISCONNECTION OF PARKER WATER SERVICE DUE TO NONPAYMENT OF CITY SEWER CHARGES BY AND BETWEEN THE CITY OF WYLIE AND THE CITY OF PARKER; AND PROVIDING FOR AN EFFECTIVE DATE. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WYLIE,TEXAS: SECTION 1: The City Manager of the City of Wylie, Texas, is hereby authorized to execute, on behalf of the City Council of the City of Wylie, Texas, the Wholesale Water Supply Contract ("Contract") by and between the City of Wylie and the City of Parker and to execute Exhibit"D"to the Contract which is the Interlocal Agreement for Disconnection of Parker Water Service Due to Nonpayment of City Sewer Charges by and between the City of Wylie and the City of Parker, which is attached hereto as Exhibit"A." SECTION 2: This Resolution shall take effect immediately upon its passage. DULY PASSED AND APPROVED by the City Council of the City of Wylie Texas on this the 23rd day of February, 2010. Eric Hogue, Mayor ATTEST TO: Carole Ehrlich, City Secretary Resolution No.2010-10(R) Wholesale Water Supply Contract Interlocal Agreement for Disconnection City of Parker 568528-1 WHOLESALE WATER SUPPLY CONTRACT This Wholesale Water Supply Contract ("Contract") is made and entered into this day of 2010, by and between the City of Wylie, Texas ("Wylie"), a municipal corporation, and City of Parker("Parker"), a municipal corporation. WITNESSETH: WHEREAS, Wylie has filed an Application with the Texas Commission on Environmental Quality ("TCEQ") to amend its certificates of convenience and necessity ("CCNs"), numbers 10186 and 20068; WHEREAS, Parker has protested Wylie's Application as it relates to an area of about 236 acres (the "Settlement Area"), more accurately described in Exhibit A attached hereto; and WHEREAS, Wylie and Parker have executed a Mediated Settlement Agreement (the "Agreement"), attached hereto as Exhibit B, wherein Wylie agrees that Parker has the sole Certificate of Convenience and Necessity ("CCN") to provide retail Potable Water service to the Settlement Area ; and WHEREAS, Parker operates a TCEQ approved retail water supply system and requires a supply of Potable Water for that system within the Settlement Area; and WHEREAS, Wylie operates a TCEQ approved retail water supply system with capacity currently capable of serving the Settlement Area; and WHEREAS, the North Texas Municipal Water District ("NTMWD") supplies wholesale Potable Water to both Wylie and Parker; and WHEREAS, Wylie agrees to sell Parker wholesale Potable Water for retail sale to Parker customers in the Settlement Area for the consideration and upon the terms and conditions hereinafter set forth; and WHEREAS, NTMWD has approved such Potable Water sale by Wylie to Parker by letter dated February 10, 2009, attached hereto and incorporated herein for all purposes, as Exhibit C. NOW, THEREFORE, in consideration of the covenants and considerations set forth herein, the parties hereto agree as follows: ARTICLE I DEFINITIONS 1.1 Master Meter. A flow meter to be installed on each wholesale service line that is to provide Potable Water to the Settlement Area. Initially, a single customer service meter may function as a Master Meter if the Parties so agree. 1.2 Volume Charge. The rate per 1,000 gallons charged for Potable Water. 1.3 Point(s) of Delivery. The point, or points, where a Master Meter is installed to provide wholesale Potable Water from Wylie to Parker. 1.4 Potable Water. Treated water, at the Point of Delivery, meeting the standards of treatment established by the Texas Department of Health, TCEQ, or other state agency of appropriate jurisdiction, and meeting the requirements of the Federal Safe Drinking Water Act, Title 42 U.S.C.A. § 300. ARTICLE II SALE OF POTABLE WATER Wylie agrees to sell to Parker and Parker agrees to purchase from Wylie at the Point(s) of Delivery specified in Article IV herein, Potable Water at the rate specified in this Contract and subject to the terms and conditions as set forth in the body of this Contract and Exhibit B. ARTICLE III COMPENSATION 3.1 Parker shall pay to Wylie at the times and in the manner prescribed herein an amount equal to the Volume Charge times the amount of Potable Water actually delivered by Wylie as measured by the Master Meter(s). The Volume Charge under this Contract shall be 100 percent (100%) the amount paid by Wylie to NTMWD for the Potable Water delivered to Parker at the Point(s) of Delivery. 3.2 As additional compensation, Parker has executed, concurrent with execution of this Contract, a Sewer Service Cut-Off Agreement, attached hereto as Exhibit D, for sewer service by Wylie to Potable Water customers of Parker in the Settlement Area. ARTICLE IV POINT OF DELIVERY AND INFRASTRUCTURE 4.1 The Point(s) of Delivery for Potable Water delivered and taken under this Contract shall be at a mutually agreed upon place, or places, where the Master Meter(s) is/are set. 4.2 Wylie and Parker agree that the current Potable Water supply line to the Wylie Independent School District facilities in the Settlement Area will be looped as new customers are added in the Settlement Area. Parker shall provide initial retail Potable Water service to the Settlement Area from the looped line. The new customers shall incur the costs of construction and installation of this supply line unless Wylie or Parker decide to participate in such costs. 4.3 Wylie and Parker agree that any Potable Water service infrastructure for new development in the Settlement Area shall be required to be in compliance with either Wylie's or Parker's standards, whichever is more stringent. 4.4 Parker agrees that it will maintain all Potable Water lines within the Settlement Area in accordance with either Wylie's or Parker's standards, whichever is more stringent. 4.5 The cost of any new Potable Water lines and service meters in the Settlement Area shall be borne by the developer or individual who requests such service. ARTICLE V TITLE TO AND CONTROL OF WATER 5.1 Title to, possession, and control of Potable Water shall remain in Wylie to the Point(s) of Delivery, where title to, possession, and control shall pass to Parker. 5.2 Wylie shall be in exclusive control and possession of the Potable Water deliverable hereunder until the same shall have been delivered to Parker at the Point(s) of Delivery, at which point Parker shall be in exclusive control and possession thereof. 5.3 No provision of this Contract shall be construed to create any type of joint or equity ownership, partnership or joint venture of or in either party's Potable Water supply infrastructure. ARTICLE VI METERING FACILITIES 6.1 Unless otherwise agreed to by the parties, Wylie and Parker agree to share equally the cost of purchase and installation of the Master Meter(s). Wylie shall operate, maintain, repair, and calibrate all metering equipment, including telemetry, installed at the Point(s)of Delivery. Wylie and Parker agree to share equally all costs of operation, maintenance, repair, and calibration of metering equipment. 6.2 Wylie shall maintain, and make available for Parker's inspection during reasonable business hours, all records and computations concerning the Volume Charge. Said records shall be kept for at least two years. 6.3 Wylie shall, during reasonable business hours, provide Parker with access to all metering equipment, including any associated telemetry signals, used in making any measurements under this Contract. Wylie may test the metering equipment on its own initiative, and shall test such metering equipment for accuracy upon request by Parker, which request shall not be made more frequently than twice in any twelve-month period. If Parker requests testing under this provision and the accuracy of the metering equipment is within the tolerance of five percent (5%) Parker may be charged the cost of the testing. In the event the percentage of accuracy of such metering equipment is found as the result of any testing, whether requested by Parker or performed by Wylie on its own initiative, to be within the tolerance of 95% to 105%, such metering equipment shall be deemed to have correctly measured the quantity of Potable Water taken hereunder. If however, upon any test of the accuracy tolerance, such tolerance is found to be less than 95% or in excess of 105%, then such metering equipment shall be adjusted at once to register correctly and accurately, and the amount paid by Parker to Wylie for the period from the last test on that metering equipment until the current test(but for no more than three months) shall be adjusted by debit or credit in accordance with the percentage of inaccuracy found by such test. In the event such metering equipment is out of service or out of repair and the amount of Potable Water taken cannot be ascertained or computed by the reading thereof, the amount of Potable Water taken during this period shall be estimated based upon the amount of Potable Water taken in the corresponding period of the previous year unless otherwise agreed upon by both parties. 6.4 In order to provide Wylie with additional information on the accuracy of the Master Meter(s) recording Potable Water sold to Parker, Parker agrees to provide Wylie on or about April 20th and October 20th of each year, notice of the total number of gallons of Potable Water Parker has billed its retail water service customers in the Settlement Area for the preceding six months. ARTICLE VII INITIAL DELIVERY Commencement of the delivery of Potable Water by Wylie to Parker under the terms of this Contract shall be in accordance with the Article XVII of this Contract. ARTICLE VIII BILLING AND PAYMENT 7.1 For purposes of monthly billing for the period beginning , 2010 and thereafter, Wylie shall read the metering equipment provided for herein on or about the fifteenth(15th) day of each month or the last working day prior thereto if the fifteenth (15th) day falls on a weekend or holiday, and shall report the total quantity of Potable Water taken at that meter during the preceding month to Parker on or before the tenth(l0th)day of each calendar month. 7.2 Wylie shall render to Parker at the address shown herein (or such other place as designated in writing by Parker) on or before the tenth (10th) day of each calendar month a statement showing, the following information: • the date and reading of the metering equipment at the beginning and at the end of the period for which the statement is rendered; • the quantity of Potable Water delivered at the Master Meter(s); • the total amount due for the Potable Water delivered. 7.3 Such statement shall be due and payable at Wylie's offices in the Municipal Building, City of Wylie, Texas (or at such other place as designated in writing by Wylie) on or before the twenty-fourth(24th) day after the receipt of such statement. 7.4 Should Parker fail to tender payment in full when due, a late charge of five percent(5%)per annum of the total amount due will be added thereto. ARTICLE IX CANCELLATION FOR NONPAYMENT In the event that Parker, without good cause, fails to make any payment to Wylie when due hereunder, Wylie may, in addition to any other remedy available to it by law, cancel this Contract, by written notice of such nonpayment and statement of Wylie's election to cancel this Contract by reason thereof delivered to Parker no less than thirty (30) days before the date for cancellation specified in such notice. ARTICLE X REPORT ON SERVICE CONNECTIONS Parker agrees to provide Wylie a report of the number of retail water service connections installed in the Settlement Area in any twelve-month period within ten (10) days following receipt of a request for that information from Wylie, which shall not be requested more than twice per calendar year. ARTICLE XI OBLIGATIONS OF PARTIES 11.1 Parker shall comply with the provisions of any water conservation/rationing plan or program formally adopted by Wylie by Ordinance for implementation within Wylie's corporate boundaries for Wylie's water customers. In lieu of adopting the exact same water conservation/rationing plan or program as Wylie, Parker may implement alternative water conservation/rationing plan or program provided said plan or program will conserve the same or a greater amount of water as under the plan or program implemented by Wylie. 11.2 Parker shall notify Wylie as promptly as possible of all emergency and other conditions which may directly or indirectly affect the quantity and quality of Potable Water received hereunder. Wylie shall notify Parker as promptly as possible of all emergency and other conditions which may directly or indirectly affect the quantity and quality of Potable Water received hereunder. 11.3 Parker shall not sell Potable Water purchased hereunder, nor allow it to be used, for agricultural irrigation without Wylie's prior written consent. 11.4 Parker shall not resell Potable Water purchased hereunder to a public or private water distribution company, rural water supply corporation or any industrial or manufacturing plant or facility without Wylie's prior written consent. ARTICLE XII SUSPENSION OF DELIVERY 12.1 If backflow devices are not installed between Wylie's Potable Water supply system and the Settlement Area, Wylie shall have the right to inspect and sample the Potable Water supply system within the Settlement Area. In the event Wylie determines that water(Potable or otherwise) from Parker's system is flowing back into Wylie's Potable Water supply system, Wylie shall have the immediate right to suspend delivery of Potable Water provided hereunder and to disconnect any connections with Parker's Potable Water supply system until such conditions have been corrected. 12.2 In the event Wylie determines that it is necessary to proportionally reduce the delivery of Potable Water to all of its Potable Water customers during the term of this Contract, Wylie may reduce deliveries hereunder by the same proportion until such reductions are determined to be no longer necessary. In the event of a reduction of delivery of Potable Water, and where reasonably possible, Wylie shall give Parker not less than ten (10) days prior written notice of such reduction and the terms of such reduction. ARTICLE XIII INDEMNIFICATION To THE EXTENT PERMITTED BY LAW, PARKER AGREES TO INDEMNIFY AND HOLD WYLIE, ITS OFFICERS AND EMPLOYEES WHOLE AND HARMLESS FROM AND AGAINST ALL LIABILITY FOR ANY AND ALL CLAIMS,LIENS,SUITS,DEMANDS,AND/OR ACTIONS FOR DAMAGES, INJURIES TO PERSONS (INCLUDING DEATH), PROPERTY DAMAGE (INCLUDING LOSS OF USE), AND EXPENSE, INCLUDING COURT COSTS, ATTORNEYS' FEES, AND OTHER REASONABLE COSTS OCCASIONED BY ANY ACT OR OMISSION OF PARKER, ITS OFFICERS, EMPLOYEES, AGENTS AND CONTRACTORS IN CONNECTION WITH PARKER'S RECEIPT AND DELIVERY OF WATER PURSUANT TO THIS CONTRACT. To THE EXTENT PERMITTED BY LAW, WYLIE AGREES TO INDEMNIFY AND HOLD PARKER,ITS OFFICERS AND EMPLOYEES WHOLE AND HARMLESS FROM AND AGAINST ALL LIABILITY FOR ANY AND ALL CLAIMS,LIENS,SUITS,DEMANDS,AND/OR ACTIONS FOR DAMAGES, INJURIES TO PERSONS (INCLUDING DEATH), PROPERTY DAMAGE (INCLUDING LOSS OF USE), AND EXPENSE, INCLUDING COURT COSTS, ATTORNEYS' FEES, AND OTHER REASONABLE COSTS OCCASIONED BY ANY ACT OR OMISSION OF WYLIE, ITS OFFICERS, EMPLOYEES, AGENTS AND CONTRACTORS IN CONNECTION WITH WYLIE'S TRANSPORTATION AND DELIVERY OF WATER PURSUANT TO THIS CONTRACT. ARTICLE XIV FORCE MAJEURE In the event either party is rendered unable wholly or in part by force majeure to carry out its obligations under this Contract, other than the obligation to make payments of amounts accrued and due hereunder at the time thereof, it is agreed that upon such party's giving notice in full particulars of such force majeure in writing to the other party within a reasonable time after the occurrence of the cause relied upon, then the obligations of the party giving such notice, so far as they are affected by such cause, shall be suspended during the continuance of any inability so caused, but for no longer period, and such cause shall so far as possible be remedied with all responsible dispatch. The term "force majeure" as employed herein shall mean interference not reasonably within the control of the party claiming force majeure, arising out of acts of God, governmental action, strikes, lockouts or other industrial disturbances, acts of the public enemy, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, arrests, and restraints of government and people, civil disturbances, explosions, major breakage or accidents to machinery, conduits and/or pipelines, partial or entire failure of the supply of water, extreme and unforeseeable delays in transportation and any other causes,whether of the kind enumerated or otherwise, not reasonably within the control of the party claiming suspension. ARTICLE XV TERM This Contract shall be a binding obligation on the parties hereto from and after the date this Contract is executed until such time as the expiration of fifteen (15) years or until such time as sufficient infrastructure has been installed and Parker has sufficient capacity to deliver water service to the Settlement Area in accordance with Wylie or Parker's then applicable municipal water service standards, whichever is more stringent. ARTICLE XVI ASSIGNMENT This Contract shall be binding upon and inure to the benefit of the respective parties hereto and their legal successors but the same shall not be otherwise assignable in whole or in part by either party without first obtaining the written consent of the other. ARTICLE XVII APPLICABLE LAW Any question or controversy which may arise hereunder shall be governed by the laws of the State of Texas. Venue for any actions arising under this Contract in state courts shall lie exclusively in the courts of Collin County, Texas. Venue for any actions arising under this Contract in federal courts shall lie exclusively in the Northern District of Texas. ARTICLE XVIII NOTICES Any notice, request or other communication under this Contract shall be given in writing and shall be deemed to have been given by any party to the other party upon either of the following dates: • the date received, as shown by a post office receipt, if mailed to the party hereto by registered or certified mail at the latest address specified for such other party in writing; or • three (3)days after the date of mailing if not mailed by registered or certified mail. Any notice,communication, request, reply or advice herein provided or permitted to be given, made or accepted by either party must be in writing and addressed to: City of Wylie Wylie City Manager 2000 Hwy. 78 North Wylie, Texas 75098 Parker City of Parker City Administrator 5700 East Parker Road Parker. Texas 75002 If either party reasonably determines there is need for emergency notice, request or other communication under this Contract, such emergency notice may be given by facsimile transmission to the other party if, contemporaneously therewith, the party that has determined that an emergency exists which warrants facsimile notice provides actual notice of said emergency notice by telephoning the other party's City Administrator/Manager or City Attorney. ARTICLE XIX MISCELLANEOUS 19.1 All headings of the Articles and particular sections of this Contract have been inserted for the convenience of reference only and are not to be considered as part of this Contract and in no way shall they affect the interpretation of any provision of this Contract. 19.2 A waiver by either party of any default by the other party hereunder shall not be deemed a waiver by such party of a default by the other party on any subsequent occasion. 19.3 In case any one or more of the Articles, sections, provisions, clauses or words of this Contract shall for any reason be held to be invalid or unconstitutional, such invalidity or unconstitutionality shall not affect any other Articles, sections, provisions, clauses or words of this Contract and it is intended that this Contract shall be severable and shall be construed and applied as if such invalid or unconstitutional Article, section provision,clause or word had not been included herein. 19.4 This Contract contains the complete agreement between the parties with regard to the subject matter hereof. As of the date this Contract is executed it shall supersede all prior agreements between the parties, both oral and written, with regard to the subject matter hereof. IN WITNESS WHEREOF, the parties have executed this Contract in duplicate originals on this_ day of 2010. CITY OF WYLIE, TEXAS CITY OF PARKER, TEXAS Mayor Mayor ATTESTED TO: City Secretary City Secretary APPROVED AS TO FORM: City Attorney City Attorney I 0„ 1 1"i 1'[ I h i I 1 1 ! ; rt_TA I ,RI: TLICAT, CITY L€ L: - - - - ' ' -- --. --. - i•- i z 3 III 4 3 X Y l• x _ - are- - - - -... _ _'� 1' 11 s }:t' - `.`� ;. t, — r- r : ` , sr ` Pr t �� — _ - '_ a EXHIBIT"B" MEDIATED SETTLEMENT AGREEMENT BETWEEN CITIES OF WYLIE AND PARKER, TEXAS Agreement Points December 1, 2008 1. The City of Wylie ("Wylie") will provide the City of Parker ("Parker') with a wholesale water supply that will be utilized by Parker to provide water service to the 236 acre area that is the subject of this dispute. The water being provided by Wylie will be sold to Parker on a wholesale basis and will not count against Parker's "Take or Pay" amount or Parker's 3.5 MGD limits established by the North Texas Municipal Water District ("NTMWD"), subject to approval by NTMWD; 2. Wylie and Parker agree that the Wylie line to the school district will be looped as new customers develop in the 236 acre area and Parker will begin retail service from such looped line; 3. Wylie and Parker agree that a master meter will be installed for each wholesale service line to serve the 236 acres; 4. Wylie and Parker agree that the two Cities will split Ve cost of purchase and installation of the master meter and-tcpeice 5. Parker will bill their retail customers in the 236 acres; 6. Parker and Wylie agree that any water service infrastructure for new development in the 236 acres will be required to be in compliance with either Wylie or Parker's standards, whichever is more stringent; 7. Parker agrees that it will maintain all water lines within the 236 acres; 8. Any new installation of lines and meters in the 236 acres will be borne by developer; 9. Parker agrees to execution of a cut off agreement for sewer service, with indemnity language included; 10. Wylie will withdraw its protest to Parker's application and Parker will withdraw its protest to Wylie's application within 5 business days of final execution of wholesale agreement; 11. The term of the wholesale agreement will be a term agreeable by NTMWD; 12. A Joint Motion to Abate will be filed within 48 hours of execution of this Mediated Settlement Agreement in the Wylie Application (SOAR Docket No. 582-08-3357) and in the Parker Application (SOAR Docket No. 582-07- 3465); and 13. The Parties agree that a formalized Settlement Agreement and Wholesale Service Contract will be executed. Executed this / day of December, 2008. BY: tki Mindy Manso Wylie City Manager BY: Jim Threadgill, Mayor Pro-Tempore EXHIBIT"C" Ele torimmorio NORTH TEXAS MUNICIPAL WATER DISTRICT Regional Service Through Unity February 10, 2009 Ms. Mindy Manson City Manager City of Wylie 2000 Highway 78 North Wylie, Texas 75098 Dear Mrs. Manson: The purpose of this letter is to clarify the impact of certain agreement points between the City of Wylie and the City of Parker with respect to each city's potable water contract with the NTMWD. The agreement points are contained in a document titled "Mediated Settlement Agreement Between Cities of Wylie and Parker, Texas, dated December 1, 2008. With respect to agreement point no. 1, we offer the following: A. Water sold by Wylie to Parker will not count against the annual maximum demand ("take or pay") established by Parker. Water sold by NTMWD to Wylie will remain the responsibility of the City of Wylie. B. As long as the water sold by the City of Wylie to the City of Parker is used in areas of the City of Wylie's city limit or ETJ, the City of Wylie will not need to obtain authorization from the NTMWD Board of Directors. C. Water sold by the City of Wylie to the City of Parker will not count against the City of Parker's current contract limit, which is calculated by multiplying Parker's daily annual average by 2.5, which is approximately 3.2 MGD. The 3.5 MGD limit referred to in the settlement document is a physical limitation associated with the pipeline system serving the City of Parker. If you have any questions or need additional information, please contact my office. Sincerely, ,,,,,,.....p\c- s4....„ 4A ES M. PARKS utive Director JMP/mcf 505 E.Brown St.,P.O.Box 2408,Wylie,Texas 75098-2408 Telephone:972/442-5405 Fax:972/442-5405 EXHIBIT"D" INTERLOCAL AGREEMENT FOR DISCONNECTION OF PARKER WATER SERVICE DUE TO NONPAYMENT OF CITY SEWER CHARGES This Interlocal Agreement ("Agreement") is by and between the City of Wylie, Texas ("City"), a Texas home rule municipal corporation, and the City of Parker ("Parker"), a municipal corporation, for the purposes and consideration set forth herein. RECITALS WHEREAS, the City and Parker are both "retail public utilities" as defined in Section 13.002 of the Texas Water Code; WHEREAS, Parker furnishes retail water utility service to an area in southeast Collin County defined by Certificate of Convenience and Necessity ("CCN") No. 10207 issued to Parker by the Texas Commission on Environmental Quality ("TCEQ"), which includes certain portions of the City; WHEREAS, the City furnishes sewer utility service to residents of the City, and the City desires Parker's assistance to collect delinquent sewer service charges from customers who receive water service from Parker; and WHEREAS, this Agreement is made by and between the City and Parker pursuant to the Interlocal Cooperation Act, Chapter 791, Texas Government Code. NOW, THEREFORE, the City and Parker enter into this Agreement for the following purposes and consideration: 1. Administration of Utility Accounts. The City shall be solely responsible for administering City sewer utility customer accounts, and Parker will be solely responsible for administering Parker water utility customer accounts. 2. Disconnection of Water Service. Parker agrees to disconnect or terminate water service to a customer for failure to pay undisputed City sewer charges if requested by the City pursuant to the terms and conditions below. The terms "disconnected," "terminated," and "discontinued" may be used interchangeably in this Agreement as applied to water service and water service accounts. (a) Notice of Termination. The City must send a notice of termination to the customer and the District that conforms with Title 30, Texas Administrative Code, Section 291.88(a), as it exists or may be amended, with a copy to Parker. (b) Request for Termination. If the customer to whom a notice of termination is sent fails to pay the delinquent sewer charges by the termination date, or fails to establish that disconnection is otherwise prohibited under Parker or state regulations, then City may deliver a written request for termination to Parker to have water service to that customer disconnected. The request should INTERLOCAL AGREEMENT Page 1 566157.v 1 state the customer's name, sewer utility account number, service address, that the customer has failed to take required action to avoid water service disconnection, and that the City has determined that all legal requirements, including the absence of sick or disabled customers, have been met. Parker has no duty to independently confirm the information in City's request for termination, and may rely on City's representations. The City shall comply with the requirements set forth in 30 Texas Administrative Code § 291.88, as amended. (c) Service Termination. Parker shall have no obligation to disconnect a customer's water service until it has received both a notice of termination and request for termination from the City. Parker will use its best efforts to terminate water service either by the next workday after the date Parker receives a request for termination or on the termination date stated in the notice to a customer, whichever is later. (d) Compensation to Parker. On the 10th day of each month, the City shall pay to Parker a disconnection fee of fifty dollars ($50.00) for each water service account disconnected by Parker at the request of the City during the previous month. (e) Restoration of Terminated Water Service. Parker will restore water service disconnected under this Agreement within thirty-six (36) hours of receiving notice from the City to restore a customer's service and payment of a fifty dollars ($50.00) reconnect fee by the customer. 3. Term of Contract. The initial term of this Agreement shall be for one year beginning on the date of final execution by all parties. This Agreement shall automatically renew for three (3) additional one (1) year terms unless terminated by either party under the express provisions of this Agreement. 4. Right to Terminate Agreement. Either party may terminate this Agreement at any time after giving the other party thirty (30) days written notice. However, Parker's right to payment of disconnection and reconnection fees for the performance of its obligations under this Agreement shall survive termination of this Agreement. 5. Purpose of Agreement. This Agreement is made for the purpose of facilitating the City's collection of delinquent charges for sewer utility service. No partnership or joint venture is intended to be created hereby. Parker's sole responsibility under this Agreement is that of the City's agent for purposes of disconnecting water service to a customer who has failed to pay undisputed City sewer service charges. 6. Effect on Water Service. This Agreement shall not be construed to impair or conflict with Parker's obligations to abide by and enforce its duly adopted rules and regulations for the provision of retail water utility service set forth in Parker's duly adopted water rates, as amended from time to time. This agreement has no effect on INTERLOCAL AGREEMENT Page 2 566157.v 1 Parker's legal rights to serve areas within its CCN for water in the land areas within Wylie or Wylie's ETJ. 7. Indemnity. TO THE EXTENT ALLOWED BY LAW, EACH PARTY AGREES TO RELEASE, DEFEND, INDEMNIFY, AND HOLD HARMLESS THE OTHER (AND ITS OFFICERS, AGENTS AND EMPLOYEES) FROM AND AGAINST ALL CLAIMS OR CAUSES OF ACTION FOR INJURIES (INCLUDING DEATH), PROPERTY DAMAGES (INCLUDING LOSS OF USE), AND ANY OTHER LOSSES, DEMAINS, SUITS, JUDGMENTS AND COSTS, INCLUDING REASONABLE ATTORNEYS' FEES AND EXPENSES, IN ANY WAY ARISING OUT OF OR RELATED TO OR RESULTING FROM EACH PARTY'S PERFORMANCE UNDER THIS AGREEMENT, SAVE AND EXCEPT DAMAGES OR COSTS INCURRED SOLELY AS A RESULT OF EACH PARTY'S NEGLIGENT ACTS OR OMISSION (OR THOSE OF ITS RESPECTIVE OFFICERS, AGENTS, EMPLOYEES, OR ANY OTHER THIRD PARTIES FOR WHOM IT IS LEGALLY RESPONSIBLE) IN CONNECTION WITH PERFORMING THIS AGREEMENT. IN THE EVENT OF JOINT OR CONCURRENT NEGLIGENCE OF THE PARTIES, RESPONSIBILITY, IF ANY, SHALL BE APPORTIONED COMPARATIVELY IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT, HOWEVER, WAIVING ANY GOVERNMENTAL IMMUNITY AVAILABLE TO EITHER PARTY INDIVIDUALLY UNDER TEXAS LAW. CITY SHALL BE RESPONSIBLE FOR ITS SOLE NEGLIGENCE. PARKER SHALL BE RESPONSIBLE FOR ITS SOLE NEGLIGENCE. THE PROVISIONS OF THIS PARAGRAPH ARE SOLELY FOR THE BENEFIT OF THE PARTIES HERETO AND ARE NOT INTENDED TO CREATE ANY RIGHTS, CONTRACTUAL OR OTHERWISE, TO ANY OTHER PERSON OR ENTITY. THIS PARAGRAPH SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT. 8. Agency. Subject to Section 7 above, the City and Parker agree and acknowledge that each entity is not an agent of the other entity and that each entity is responsible for its own acts, forbearance, negligence and deeds, and for those of its agents or employees in conjunction with the performance of work covered under this Agreement. 9. Notices. All notices and requests from one party to the other party under this Agreement shall be in writing and shall be delivered by personal delivery (with certificated receipt) or certified mail, return receipt requested, to the following address, or by facsimile to the following telephone number: (a) to the City: City of Wylie Attn: City Manager 2000 N. Hwy. 78 Wylie, Texas 75098 Fax: (972) 442-4302 INTERLOCAL AGREEMENT Page 3 566157.v 1 (b) to Parker: City of Parker Attn: City Administrator 5700 East Parker Road Parker, Texas 75002 Fax: (972) 442-2894 Notice given in accordance with this paragraph shall be effective upon receipt. Each party may change the address or facsimile number for notice by giving notice of the change to the other party in accordance with the provisions of this paragraph. 10. No Waiver of Immunity. The City and Parker agree that neither party waives sovereign immunity by entering into or performing its respective obligations under this Agreement 11. Miscellaneous Provisions. (a) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. However, this Agreement is not assignable by either party without the prior written consent of the other party to this Agreement. (b) This Agreement contains the entire agreement of the parties with respect to the matters contained herein and may not be modified or terminated except upon the provisions hereof or by the mutual written agreement of the parties hereto. (c) This Agreement shall be construed in accordance with the laws of the State of Texas and shall be performable in Collin County, Texas. (d) This Agreement may be executed in a number of identical counterparts, each of which shall be deemed an original for all purposes. (e) The individuals executing this Agreement on behalf of the respective parties below represent to each other and to others that all appropriate and necessary action has been taken to authorize the individual who is executing this Agreement to do so for and on behalf of the party for which his or her signature appears, that there are no other parties or entities required to execute this Agreement in order for the same to be an authorized and binding agreement on the party for whom the individual is signing this Agreement, that each individual affixing his or her signature hereto is authorized to do so, and that such authorization is valid and effective on the date hereof. (f) This Agreement shall be deemed drafted equally by all parties hereto. The language of all parts of this Agreement shall be construed as a whole according to its fair meaning, and any presumption or principle that the language herein is to be construed against any party shall not apply. Headings INTERLOCAL AGREEMENT Page 4 566157.v1 in this Agreement are for the convenience of the parties and are not intended to be used in construing this document. (g) The parties agree to take such further actions and to sign such further documents as may be reasonably necessary or appropriate to fulfill the intent of, and to complete the transaction described in this Agreement. (h) Time is of the essence with respect to this Agreement and performance of all provisions hereof. (i) This Agreement shall be effective on the later of the two dates of execution below. AGREED TO this day of , 2010. CITY OF WYLIE, TEXAS By: Mindy Manson, City Manager ATTEST: Carole Ehrlich, City Secretary AGREED TO this ` day of je_A-,2_/_,,1 i , 2010. ;?,• ••.... o ,CITY OF PARKER I • O ,a ; Joe Cording, Mayor ATTEST: , Ag City Secretary INTERLOCAL AGREEMENT Page 5 566157.v 1 Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: February 23, 2010 Item Number: 3 Department: Planning (City Secretary's Use Only) Prepared By: Renae' 011ie Account Code: Date Prepared: 02/15/10 Budgeted Amount: Exhibits: Two Subject Consider, and act upon, Resolution No. 2010-11(R) evidencing support for a proposed senior assisted living community to be built in Wylie; authorizing Sphinx Development Corporation to apply to the Texas Department of Housing and Community Affairs for funding for such senior living community; and providing for an effective date. Recommendation Motion to approve Resolution No. 2010-11(R) evidencing support for a proposed senior assisted living community to be built in Wylie; authorizing Sphinx Development Corporation to apply to the Texas Department of Housing and Community Affairs for funding for such senior living community; and providing for an effective date. Discussion The applicant Sphinx Development Corporation is seeking to apply for Housing Tax Credits through the Texas Department of Housing and Community Affairs which would allow the rents to remain relatively low for the specified income restricted senior residents. The proposed Senior Living Facilities would be located north of Brown Street (F.M. 3412) and west of Westgate Way as is restricted to the head of household being 55 years of age or older. The subject property was part of a zoning case approved by Council on January 26, 1986 that rezoned 674.2539 acres. Rezoning included single-family, multi-family and retail districts. The subject Tract 15 was designated as Retail. A Final Plat was approved July 9, 2002 but was never filed with Collin County. A Site Plan for Assisted Living Facilities was also approved, but has since expired. In order for an entity to apply for TDHCA funds where the property is within a non-participating Home Fund City, that entity must get a Resolution from the City indicating the City's support of the project. There is no liability placed on the City. A summary of the Housing Tax Credits program is attached. Approved By Initial Date Department Director RO 02/16/1 City Manager / t l `4 I U Page 1 of 1 RESOLUTION NO. 2010-11(R) A RESOLUTION OF THE CITY OF WYLIE, TEXAS, EVIDENCING SUPPORT FOR A PROPOSED SENIOR LIVING COMMUNITY TO BE BUILT IN WYLIE; AUTHORIZING SPHINX DEVELOPMENT CORPORATION TO APPLY TO THE TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS FOR FUNDING FOR SUCH SENIOR LIVING COMMUNITY; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, Sphinx Development Corporation has proposed a new development of senior housing at approximately 300 feet west of Westgate Way on Brown Street (F.M. 3412), Wylie, Collin County, Texas 75098. The proposed community is to be named "Sphinx at West Gate Villas", WHEREAS, as the American population ages, there is a need for reasonably priced rental housing for seniors in the community, and City Council wishes to evidence its support for this proposed development in the City of Wylie; WHEREAS, in order to help provide funds and secure necessary financing approvals, Sphinx Development Corporations will apply for Housing Tax Credits and HOME funds from the Texas Department of Housing and Community Affairs ("TDHCA") which requires permission from Wylie City Council; WHEREAS, §49.9(i)(5), Texas Administrative Code, which gives Housing Tax Credit points for the commitment of development funding by local political subdivisions, states that the TDHCA HOME Program funds will not qualify for points in this category "unless a resolution is submitted with the application from the Local Political Subdivision authorizing that the Applicant act on behalf of the Local Political Subdivision in applying for HOME or Housing Trust Funds from TDHCA for particular application." NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WYLIE,TEXAS, THAT: SECTION 1: The City Council of the City of Wylie, Texas recognizes that there is a need for rental housing for seniors within the City of Wylie and that City Council supports and encourages the development of Sphinx at West Gate Villas. Resolution No.2010-11(R) Evidencing Support for a Proposed Senior Living Community Sphinx Development Corporation SECTION 2: The City of Wylie appoints Sphinx Development Corporation to act on its behalf in applying for TDHCA HOME funds for the Sphinx at West Gate Villas; provided, however, that the City of Wylie disclaims any liability for administration or repayment of any HOME funds which may be loaned to Sphinx Development Corporation by TDHCA. DULY PASSED AND APPROVED by the City Council of the City of Wylie, Texas, this 23`d day of February 2010. Eric Hogue, Mayor ATTEST: Carole Ehrlich, City Secretary Resolution No.2010-11(R) Evidencing Support for a Proposed Senior Living Community Sphinx Development Corporation About Housing Tax Credits Page 1 of 3 Home Contact About Events Press Employment Site Search: ;GO] Home n MULTIFAMILY a HTC a About Housing Tax Credits t'�Multifamily Housing _: Housing Tax Credits - About the Program Housing Tax Credits Funding Source & Background About HTC ? The Housing Tax Credit(HTC)Program was created by the Tax Reform Act of 1988.Section Multifamily Applications 421 of the internal Revenue Code,of 1986,as amended(the Code),is the federal law that governs the HTC program.Section 42 authorizes tax credits in the amount of$1.75 per HTC Awardees capita for each state as,adjusted for inflation.For 2005,that inflation adjusted amount __ generated approximately$43 million in annual tax credit availability.The Texas Department Archive of Housing and Community Affairs(TDHCA)is the only entity in the state of Texas with the Fair Housing Resources authority to allocate tax credits under this program. FAGS` - Since 1987 the HTC Program has provided for the construction or renovation of over 120,000 units of affordable multifamily housing throughout Texas,and is generally HTC Email List by Zip recognized as the single most effective incentive for the development of new and affordable Code multifamily housing. Free file viewers (D) (To view and print PDF, DOC,XLS,PPT and PPS Program Description files) The tax credit program is one of the primary means of directing private capital toward the creation of affordable rental housing.The tax credits provide investors of affordable rental housing with a benefit that is used to offset a portion of their federal tax liability in exchange for the production of affordable rental housing.The value associated with the tax credits allows residences in HTC developments to be leased to qualified families at below market rate rents. To qualify for tax credits,the proposed development must involve new construction or substantial rehabilitation of existing residential units(at least$12,000/unit in direct hard costs).The amount of tax credits that may be applied for depends on:the amount and type of additional funding sources,the total amount of qualified development costs to be Incurred, the percentage of rant restricted units set aside in the development for eligible tenants,and location in communities designated as Difficult Development Areas and Qualified Census Tracts. Each qualified tax credit development must include a minimum percentage of rent restricted units to be set aside for eligible tenants.Pursuant to the Code,a qualified housing development means any development approved by the Department for residential rental occupancy if the development meets either of the following requirements: • Twenty percent (20%)or more of the residential units in such development are both rent restricted and occupied by individuals whose income is fifty percent(50%)or less AMFI; or • Forty percent(40%)or more of the residential units in such development are both rent restricted and occupied by individuals whose income is sixty percent(60%) or less of AMFI. Tax credits may only be claimed on the units that have been set-aside for participation under this program.it is possible,but not required,for development owners to set aside one- htto://www.tdhca.state_tx.us/multifamilv/htcddescrintinnhtm 11i/7009 About Housing Tax Credits Page 2 of 3 hundred percent(100%)of any development for consideration under the tax credit program and In doing so claim the maximum amount of tax credits eligible for the development For a more detailed description of the.program see our information Guide for the most current year. (DO) Program Administration Pursuant to Section 42 of the Code,the Department must develop a plan for the selection of eligible developments;this plan is known as the Qualified Allocation Plan and Rules(QAP). The QAP is revised annually and Is formalized for the following year when it Is signed by the Governor.This revision process includes a public comment period.it is the goal of TDHCA to encourage diversity through broad geographic allocation of tax credits within the state,and to promote maximum utilization of the available tax credit amount The criteria utilized to realize this goal includes a point based scoring system and an evaluation of other non-point based factors that may include each application's: • cost and financial feasibility; • geographic location within the state as compared to other developments applying for tax credits; • impact on the concentration of existing tax credit developments and other affordable housing developments within specific markets and sub-markets; • site conditions; • development team experience; and • consistency with the goal of awarding credits to as many different applicants as possible Those applications which are deemed to have a high priority in their regional area based on the review criteria,are subject to an underwriting and portfolio management review which evaluates the development's projected construction costs and financial feasibility,and the applicanrs past performance.Applications which pass the underwriting process and are determined to have the highest priority will be presented to TDHCA's Board of Directors for consideration. (fop) HTC Program Funding:Set Asides and Regional Allocation Tax credits are allocated in accordance with Section 2305.111 of the Texas Government Code,which requires that the credits be allocated on a.regional basis.There are thirteen state service regions;each of the thirteen state service regions is further divided into Rural and UrbanlExurban areas each of which is targeted to receive a pre-determined amount of the tax credits for each year.The amount per area Is based on a regional distribution formula which is generated,with public input,by the Housing Center of TDHCA.Upon finalization of the formula,the targeted allocations will be released.Additionally,the HTC Program has several allocations andfor set-asides which it strives to meet at least 10%of all credits must be awarded to Qualified Nonprofits,at least 15%of each region's credit allocation is targeted to At-Risk Developments and at least 5%of each region's credit allocation is targeted to developments funded by the U.S.Department of Agriculture. MAD Additional Initiatives Efforts are made in the allocation of funds and the planning process to ensure the involvement of housing advocates, community-based institutions, developers, local ht rr/hvww tribes;date tv nc/mnitifamilvlhtr./rlecrrintinn htnt 7/5/1nr10 About Housing Tax Credits Page 3 of 3 municipalities and other interested parties.The Department encourages local cities to support and contribute funds toward the development of tax credit developments. The Department also encourages the participation of elected officials and neighborhood-based groups. The Department requires recipients of tax credits to document the participation of minority owned businesses in the development and-management of tax credit developments.The OAP also defines a series of point based selection criteria items to ensure that the housing proposed In the applications Is with the program's goals. (Inn) For additional information on the program,please contact the f iTD staff. 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'.... ..,,... �� ....... , k. 6 JHp West Gate Villas oac< rzoi-1- oV". o9. z i000z.o Wylie,Texas 3 / \ P R 0 1 E C T D A T A \ I Units: ..._ 120 \\ Units ;Leasing: 5,000 s.f. / Parking: 144 spaces ,, 1 1.2 spaces/unit / Commun ty�. Density: 13.46 Gross Acres / Garden 8.22 Net Acres '' 4 =4 6 Net Units/Acre community �' 4 Garden / Parking Court ' 7- �., with five turn around \' \,, t r , .� Parking Cot rt � d\ �`v ✓with'ire turn around ' oo.a.: P " y ---- ) '.. - ''''''. s r t i community Green• L agrng/Ameniti s -/ 3 ri Parktng Court �, ,</ ,,,, , , ,k.‹...\,- ,,, ' ' . , ',',- ''''...':: --.,,, 7 ,,„, ' ' s with [ingCaro{undoi"` .r �"° 1 • ,�„ I, \ Parking 1 {ii P3ki ourt `Parkinn "� i s , A Court ?j a� f .+ Court out Parcel act �A I; ott-t. Courtyard Parkin I" i. F:, , ...,_:,-.41,...,4-- ---) ::::' ..-„',..,,„,-..,.-::: m ��` y $` �'" Parking, rd Court I t , Court ; " a andscape Wail r .? Landscape rNatl , r—,,• gg to enparking ` .""" to screen parking"' ' �" E ii_ iiii Entry k Property Line Landscaping i Brown Street F.M.;4.iiiiii I l I .- 5' 1 _ oz o3 zoio 1zi000z oo Kr H Sphinx.at West Gate Villas Scheme 1 development corporotion . , c ri. u ' Wylie,Texas Scale z"=300' o" ,