R2018-049 2018-03-26 RESOLUTION NO. R2018-49
A Resolution of the City Council of the City of Pearland, Texas, accepting the
City's Comprehensive Annual Financial Report for fiscal year 2017 and the
accompanying independent audit as presented by the accounting firm of
Whitley Penn, LLP.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That certain comprehensive annual financial report for fiscal year 2017, a
copy of which is attached hereto as Exhibit "B" and made a part hereof for all purposes, is hereby
authorized and approved.
Section 2. That the City Council accepts the City's comprehensive annual financial report
for fiscal year 2017.
PASSED, APPROVED and ADOPTED this the 26th day of March, A.D., 2018.
TOM REID
MAYOR
ATTEST:
j =°
NG ,e' NG,. C/ -s.
E TY SE RETARY
APPROVED AS TO FORM:
(La.b.•-•
DARRIN M. COKER
CITY ATTORNEY
CITY OF PEARLAND, TEXAS
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4EXAS
est. 18, E
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
Fiscal Year Ended
September 30, 2017
Officials Issuing Report
Clay Pearson Jon Branson Trent Epperson Cynthia Pearson Rick Overgaard
City Manager Deputy City Assistant City Finance Director Assistant
Manager Manager Director of
Finance
CITY OF PEARLAND, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
Page
Introductory Section
Letter of Transmittal
Principal Officials xi
Organizational Chart xii
GFOA Certificate of Achievement xiii
Financial Section
Report of Independent Auditors 1
Management's Discussion and Analysis 7
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position 19
Statement of Activities 20
Fund Financial Statements:
Balance Sheet-Governmental Funds 22
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of
Net Position 25
Statement of Revenues,Expenditures, and Changes in Fund Balances-
Governmental Funds 26
Reconciliation of the Statement of Revenues,Expenditures, and Changes in Fund
Balances of Governmental Funds to the Statement of Activities 28
Statement of Net Position-Proprietary Funds 29
Statement of Revenues,Expenses and Changes in Fund Net Position-Proprietary
Funds 30
Statement of Cash Flows-Proprietary Funds 31
Notes to the Financial Statements 33
Required Supplementary Information:
General Fund- Schedule of Revenues,Expenditures,and Changes in Fund Balances -
Budget and Actual 70
Notes To Required Supplementary Budget Information 71
Required Pension System Supplementary Information 72
Required Other Post-Employment Benefit Supplementary Information 74
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS(Continued)
Financial Section(Continued) Page
Other Supplementary Information:
Combining and Individual Fund Statements and Schedules
Combining Balance Sheet-Non-Major Governmental Funds 80
Combining Statement of Revenues,Expenditures, and Changes in Fund Balances-
Non-Major Governmental Funds 84
Schedules of Revenues,Expenditures,and Changes in Fund Balance-Budget
and Actual:
Debt Service Fund 88
Hotel/Motel Tax Fund 89
Court Security Fund 90
City-Wide Donations Fund 91
Court Technology Fund 92
Street Assessments 93
Park Donations Fund 94
Police Seizure Fund 95
Parks and Recreation Development Fund 96
Sidewalk Fund 97
Grant Fund 98
Traffic Impact Improvements 99
Juvenile Management Fund 100
Regional Detention Fund 101
Educational TV Fund 102
UofHFund 103
Capital Projects Fund 104
Combining Statement of Net Position-Internal Service Funds 106
Combining Statement of Revenues,Expenses, and Changes in Net Position-
Internal Service Funds 107
Combining Statement of Cash Flows-Internal Service Funds 108
Long-Term Debt Amortization Schedules:
Combining Schedule of Governmental Activity Long-Term Debt 110
Combining Schedule of Enterprise Fund Long-Term Debt 118
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS(Continued)
Statistical Section(Unaudited) • Page
Net Position by Component 126
Changes in Net Position 128
Fund Balances of Governmental Funds 132
Changes in Fund Balances of Governmental Funds 134
Spending and Growth Analysis 136
Assessed Value and Estimated Actual Value of Taxable Property 138
Direct and Overlapping Property Tax Rates 140
Property Tax Levies and Collections 142
Principal Property Taxpayers 143
Taxable Sales by Category 144
Outstanding Debt by Type 146
Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capita 149
Direct and Overlapping Governmental Activities Debt 150
Pledged Revenue Coverage 152
Demographic and Economic Statistics 153
Principal Employers 155
Full-time Equivalent City Government Employees by Function/Program • 156
Operating Indicators by Function/Program 158
Capital Asset Statistics by Function/Program 164
City of Pearland FY 2017 CAFR
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City of Pearland FY 2017 CAFR
Introductory Section
City of Pearland FY 2017 CAFR
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City of Pearland FY 2017 CAFR
City of Pearland
ittik
3519 Liberty Drive
Pearland, Texas 77581
Tel: 281.652.1600
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st. 189
March 16,2018
Honorable Mayor,Members
of City Council,and Citizens of the
City of Pearland, Texas USA
The Comprehensive Annual Financial Report(CAFR) of the City of Pearland, Texas (the "City") for the
fiscal year ending September 30, 2017, is hereby submitted as mandated by both local and state statutes.
These ordinances and statutes require that the City issue an annual report on its fmancial position and
activity and that an independent firm of certified public accountants audit this report.
Management assumes full responsibility for the completeness and reliability of the information contained
in this report, based upon a comprehensive framework of internal control that it has established for this
purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to
provide reasonable, rather than absolute, assurance that the financial statements are free of any material
misstatements.
Whitley Penn, LLP, Certified Public Accountants, have issued an unmodified(or"clean") opinion on the
City of Pearland's financial statements for the year ending September 30, 2017. The independent
auditor's report is located at the front of the financial section of this report.
Management's discussion and analysis (MD&A) immediately follows the independent auditor's report
and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A
complements this letter of transmittal and should be read in conjunction with it.
PROFILE OF THE GOVERNMENT
The City of Pearland, incorporated in 1959, is located across the northern end of Brazoria County and
shares a common border with Houston, Texas to the north. The City also extends into Fort Bend and
Harris Counties. The City of Pearland, encompassing approximately 52 square miles, is the fastest
growing city in Brazoria County, increasing from approximately 18,000 residents in 1990 to 121,500
residents estimated as of September 2017.
The City of Pearland is a home-rule City operating under a Council-Manager form of government.
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Ci of Pearland FY 2017 CAFR
Policy-making and legislative authority are vested in a governing council (Council) consisting of the
mayor and six other members. The Mayor and all Council members are elected at large. The Mayor is
allowed to vote only in case of a tie vote. The Mayor and each Council member hold office for a period of
three years and until his/her successor is elected and qualified. Council members are limited to two full
consecutive terms of office and there is no limitation on the office of Mayor. The City Manager is
appointed by Council and is responsible for implementation of Council policy, execution of the laws, and
all day-to-day operations of the City.
A full range of municipal services is provided by the City of Pearland including public safety(police, fire,
and emergency preparedness); solid waste; water and wastewater utilities; public improvements;
planning, community development and economic development; repair and maintenance of infrastructure;
parks and recreational and community activities; convention and visitor services; and general
administrative services. In addition, the City provides planning for future land use, traffic control,
building codes, and health inspections,and plans for new infrastructure and rehabilitation of infrastructure
to meet the needs of the citizens today, as well as tomorrow. The City is authorized to issue debt, subject
to certain limitations, for the purpose of financing its capital projects and the City is empowered to levy a
property tax on real property within its boundaries.
Activities of the general, debt service, water and sewer, solid waste, capital project funds, and special
revenue funds such as hotel/motel tax are included in the City's annual appropriated budget. Capital
project funds are budgeted for project length. The legal level of control for each budget is at the fund
level,which is to say that total expenditures for each fund should not exceed total budgeted expenditures
for that fund. The City Manager is authorized to transfer budgeted amounts within and among
departments. The City Council must approve any budget amendment that increases appropriations by
fund. The City amends the budget at the end of each fiscal year to reflect current year projections for
revenues and expenditures/expenses.
As an independent political subdivision of the State of Texas, the City is considered a primary
government. Pursuant to standards established by the Governmental Accounting Standards Board
(GASB), the City also reports for all funds for which the City, as the primary government, is financially
accountable. As such, this report includes financial activities of three component units as follows: The
Pearland Economic Development Corporation was created by the City in 1995 under the Texas
Development Corporation Act of 1979 to promote, assist,and enhance economic and related development
activities on behalf of the City. The Tax Increment Reinvestment Zone(TIRZ#2)was created in 1998 for
the purposes of development and redevelopment in the Zone Area,better known as Shadow Creek Ranch.
The City participates in the Zone by contributing a portion of tax increments produced in the Zone to the
Tax Increment Fund. The Development Authority of Pearland was created in 2004 to provide financing
for the development of TIRZ #2. TIRZ #2 expires in 2028. All these component units are considered
blended component units and have been included as major funds in the Governmental Funds.
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City of Pearland FY 2017 CAFR
ECONOMIC CONDITIONS
Local Economy
Located 21 miles away from downtown Houston, Texas, the nation's second largest seaport, the world-
renowned Texas Medical Center, and NASA-Johnson Space Center, Pearland is a premier location for
residential and commercial growth. With abundant land, business facilities, a sound infrastructure, and a
diverse workforce supported by educational programs, Pearland's growth has been consistent and will
continue to be sustained over time with continued residential and commercial development.
The total of all new construction permitted during the 2017 calendar year was over $580 million, a 26%
decrease in value from 2016, mainly due to two multi-family projects approved in October 2016. New
single-family housing permits totaled 943 with a construction value of$192 million, and one multi-family
permits with a value of$136,000. Pearland's economy continues to grow, but at a slower pace than last
year. During the final quarter of calendar year 2017 building permit revenues are down from the last
quarter of 2016, from $536,631 to $258,426, a 52% decrease. Revenues associated with development,
including electrical, plumbing & gas, and mechanical permits combined, decreased by $48,229, from
$177,503 for the last quarter of 2016 to $129,275 for the last quarter of 2017, a 27% decrease. The
building plan check fee revenues decreased by $118,082, from $284,722 to $166,640, a 41% decrease.
During the 1St quarter of FY 2018, which covered the dates of October 1st through December 31st, 4
permits were issued for new commercial buildings, 15 permits were issued for additions/alterations and
17 permits were issued for tenant finish outs. The total reported valuation of all commercial projects for
the reporting period was $7,922,927.During the same quarter of FY 2017 11 permits were issued for new
commercial construction, 20 for additions/alterations and 10 for tenant finish outs. The total reported
valuation of all commercial projects for the same reporting period in FY 2017 was$13,273,825.
Sales of homes throughout the greater Houston area remained strong in 2017 despite Hurricane Harvey in
August 2017. The Houston Association of Realtors reported 79,117 single family home sales for 2017,up
3.5% from the 76,449 sales in 2016 for the Houston area. The average price of a single family home rose
2.9% from $283,133 in 2016 to $291,340 in 2017. Indications are that the Houston area will continue to
have a healthy market with a balanced supply of housing inventory and strong pricing— conditions that
put Houston metro in an enviable position compared to other markets around the country.
Houston is the world's energy capital, however, oil and gas prices are still relatively low, but inching
upward. Global overproduction of oil was one of the leading contributors to the plummet that began in
November 2014 resulting in a significant reduction in oil and gas exploration. Crude prices bottomed out
in February 2016 at $26 a barrel, but have been trending upward since, and currently at around $60 a
barrel in February 2018. Oil briefly hit$70 a barrel in January 2018,but needs to stay above $60 a barrel
for growth to occur again according to the Greater Houston Partnership. There are currently about 400
rigs operating in Texas,but that is less than one third of the rig count in September 2014. The oil industry,
however is optimistic for 2018 with firms increasing their capital expenditures and the economy as a
whole is healthy. The Greater Houston Partnership employment forecast for 2018 is for the Houston
region to create approximately 45,500 jobs. Growth will be driven primarily by Houston's link to global
economies. Job growth is expected to be in a variety of industries such as manufacturing,wholesale trade,
Ci of Pearland FY 2017 CAFR
retail trade, finance and insurance, real estate, business, healthcare, and entertainment. The consensus
among economists is that U.S. GDP, adjusted for inflation, will grow 2.4 percent or more in 2018, which
is good for Pearland.
Pearland's unemployment rate was 3.5%in September 2017,down from 4.2%in September 2016. This is
compared to the national unemployment rate of 4.2% and the State of Texas unemployment rate of 4.0%
as of September 2017. Pearland's unemployment is less than the national and state rates, and has
decreased from last year. Houston added 48,100 jobs in 2017. The Houston economy is still growing. The
Houston area, and the State of Texas, is built on businesses, on jobs, and on economic opportunities.
Pearland is poised to take advantage of those opportunities.
Energy, healthcare and life sciences, and manufacturing have been key areas of interest for Pearland for
over ten years, Combined with a mix of reinforcing land uses, urban planning, key entertainment and
cultural attractions, public spaces, and walkability and connectivity will provide for livable sustainable
developments.
As noted later in the Economic Development section, PEDC and the City worked on several major
projects in 2017, including Lonza Houston and FloWorks.
One major project is the State Highway 288 Toll Lanes expansion, which aims to improve traffic flow
from US 59 to the Harris County line at Clear Creek. Construction of toll lanes, toll infrastructure and
establishing toll operations and maintenance should help alleviate congestion for commuters along the
288 corridor. Construction began in Fall 2016 and is projected to be complete by the second quarter of
2019.
One of Pearland's newest major retailers is At Home, a national chain specializing in home decor. At
Home will be coming to Pearland soon at Broadway Street and Kirby Drive with a permit value around
$9.7 million. The taxable value from a store like At Home will bring in a large amount of revenue for the
city. Costco, which opened two years ago, generated $843,229 in property taxes in 2017 for all
jurisdictions.
One of the newest retailers to open in Pearland is Dick's Sporting Goods, which took the place of Sports
Authority when the business closed nationwide. Dick's Sporting Goods is located at Pearland Town
Center,one of Pearland's largest retail hubs.
Pearland Town Center, one of the largest concentrations of business in the area, is known as a large trade
area, or an area where retail continues to grow and concentrate. The Pearland Town Center has been able
to maintain a 95 percent or greater occupancy rate in the past year. This allows us to be more selective
with our leasing decisions and guarantees that we bring quality businesses that meet the needs of our
shoppers.
The University of Houston-Clear Lake broke ground on a 69,539-square-foot Health Sciences Building in
April 2017 at its Pearland campus on Pearland Parkway, south of Beltway 8. Construction is slated for
completion in January of 2019, in time for the spring semester. The university will focus on expanding
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Ci of Pearland FY 2017 CAFR
health care course offerings at the Pearland campus because of its proximity to the Texas Medical Center.
The three-story health sciences building will also house a satellite center of the UHCL Center for Autism
and Developmental Disabilities.
Pearland has seen continued growth in the valuations of its tax base. The net taxable value for FY 2017
was $9.73 billion, a 14.8% or $1.3 billion increase over the prior year's adjusted tax roll. New value
added to the roll in 2017 was$379.1 million. In FY 2018 the net taxable value has grown to$10.6 billion,
an 8.9%increase over FY 2017. The forecast is for continued annual growth in the 6%-8%range over the
next couple of years.
Sales tax for fiscal year 2017 totaled $30.3 million, an increase of$0.7 million or 2.4% over fiscal year
2016. Of the $30.3 million, $20.2 million went to the City's General Fund for operations and $10.1
million went to the City's Economic Development Corporation for specific economic development
programs and activities. The City's General Fund is 27% funded by sales tax, an elastic revenue stream
that will fluctuate with the economy.As such,the City closely monitors sales tax and the economy.
Pearland is a regional shopping destination and the economy has turned around since the recession of
2010 and 2011, and the slowdown in 2016. The City experienced hurricane Harvey in August 2017,
which caused a temporary slowdown. For FY 2018 YTD sales tax collections are up 8.8% compared to
FY 2017.Nationally,we are seeing a healthy start to the economy,which should be good for Pearland.
Long-Term Financial Planning
The City adopts a one-year operating budget, including a five-year capital improvement program (CIP).
Even though a one-year budget is adopted, the budget implements strategies, both financial and
operational,to meet existing challenges and to plan for the future.
The City's Five-Year CIP for fiscal year 2018 through fiscal year 2022 totals $566 million(all categories)
and completes the balance of funding from the$162 million bond program approved by the voters in May
2007. Projects include drainage ($12M), streets ($117M), facilities ($73M), parks ($38M), and the
majority of water and wastewater ($326M). Projects in the CIP have identified funding sources or
potential funding sources.Funding for these projects comes from the issuance of debt through Certificates
of Obligation, General Obligation Bonds, and Revenue Bonds, as well as impact fees, cash, and
contributions from the State, County, and other sources. In an effort to have a more manageable program
that can be reasonably completed in a three to five year time frame and to manage the city debt, the 2018
—2022 CIP includes a bond election question to voters in 2019 for$70,757,000.
The City completes a Water/Sewer Cost of Service Rate Study annually for the forecast. The study is built
around the Five-Year CIP, operating budget, and future needs. Due to funds on hand for pay-as-you go
capital improvements, no rate increase was taken for fiscal years 2011 through 2014,however,the model
produced rate increases for 2015 through 2018. The City's utility system continues to be self-supporting
and financially sound.
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Ci of Pearland FY 2017 CAFR
The City received positive ratings from Moody's Investor Services and Fitch Ratings, Inc. for its 2017
bond issuances. The Permanent Improvement and Refunding Bonds Series 2017 for$54.9 million and the
Certificates of Obligation Series 2017 for $5.8 million for.were assigned a rating of"AA" by Fitch and
`Aa2' by Moody's. The Water and Sewer System Revenue and Refunding Bonds-Series 2017C for$60.4
million were assigned `AA-' by Fitch and `Aa3' by Moody's. These ratings demonstrate strong
creditworthiness relative to other U.S. municipal or tax-exempt issuers or issues.
Relevant Financial Policies/Guidelines
Financial Policies guide the development and implementation of the budget and are a framework for
fiscal decision making and that ensure financial resources are available to meet the current and future •
needs of the City. The policy statements address areas of reporting and auditing, budgeting, revenues,
capital improvements,debt,and grants to name a few. Some of the most relevant policies are:
• Recurring revenues fund recurring expenditures/expenses.
• Non-recurring funds fund non-recurring expenditures/expenses.
• General Fund Operating Reserves should be a minimum of two months of operations.
• Water and Wastewater Operating Reserves shall strive to be maintained at 25%of operations.
• Budget revenues on a conservative basis.
• Fund existing services at current service levels.
• Enterprise Funds must be self-supporting.
• Leverage City dollars by seeking outside funding sources.
• Maintain stable property tax rates.
Major Initiatives
The City Council, staff, and community share a vision that combines progress and innovation with
prudent controls to shape Pearland's future, as it becomes one of the largest suburbs in the Houston area.
Some of the major initiatives are as follows:
Public Safety
Quality of life is always a draw for new residents in Pearland. Among numerous other reasons, families
move to Pearland for a feeling of personal safety and low crime rate. Pearland City Council continues to
emphasize public safety, and the City delivers services in the areas of law enforcement, emergency
management,emergency medical services,and fire protection.
The Pearland Police Department has focused attention on the strategic priority of Safe Community.
Several new programs were implemented throughout the fiscal year in order to increase efficiency, work
with the public to deter crime,build stronger community relationships, and catch violators. With a fuller
implementation of Data-Driven Approaches to Crime and Traffic Safety, the department focused on
"Zone 1", our highest concentration of criminal activity and crashes. Utilizing trend data, the policing
model focuses on traffic enforcement, officer presence, and community relationship building and
education. Following the concerted effort, the area saw great improvements in personal and property
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crime reductions, as example Robberies were-71%, Shoplifting -36%, Motor Vehicle Thefts -58%, and
Burglaries to Motor Vehicles -34%. The DDACTS policing model is endorsed by the International
Association of Chiefs of Police, National Institute of Justice, National Highway Traffic Safety
Administration, National District Attorneys Association, Federal Highway Administration, and many
others.
In addition to the DDACTS implementation, the department initiated a new patrol districting effort, the
first in over 20 years. Using data including call trends, population, geographic size, and natural barriers
the City was expanded from 5 districts to 9 beats. The department also implemented a review program of
all priority one calls that did not meet the threshold of a 6 minute response time, in order to evaluate what
could be done better. These changes have resulted in a 17.5% decrease in emergency response times in
just one year.
The Police Department also implemented a body camera system for the patrol division and is expanding
the program to all personnel who act in an enforcement capacity. The cameras have been useful in the
prosecution of criminal cases, improving transparency, and limiting the liability to the City. The cameras
have also been found to clear officers of wrong doing when false allegations have been lodged against
them.
Community policing efforts have included a continuation of successful programs such as the Citizens
Police Academy, Teen Citizen Police Academy , Youth Leadership Academy and "Coffee with a Cop"
programs to name a few. This past year saw the department's first instruction of the RAD (Rape
Aggression Defense) program. The program was a great success and the department is striving to push
the program availability, already over 100 people are on a list to attend. The department's "retooling" of
the Explorer program took off in 2017. With 25 Police Explorers, the program is successfully engaging
youth on a weekly basis and preparing the next generation of law enforcement. The department has hired
past Police Explorers who continued an interest in law enforcement and became adults.
The Fire Department places heavy emphasis on making Pearland a Safe Community. The Fire
Department Operations Division provides fire suppression,rescue, and emergency medical services to the
City and surrounding areas, serving an area comprised of the Pearland City Limits and its Extra-
Territorial Jurisdiction (ETJ). The community improved its ISO Public Protection Classification to a
rating of 2/8B,which puts Pearland in the top 3%of communities in the nation.
The department also conducts educational activities such as fire prevention and protection that create an
Engaged Community. The department code enforcement officers conduct inspections of buildings, food
and other business establishments, as well as environmental clean-up of structures and grounds to support
a Healthy Economy for the City.Emergency Management prepares and manages comprehensive plans for
community disaster response and preparation for events such as the recent Hurricane Harvey in August of
2017.
Fire Station 2, located at the northeast corner of Harkey Road and Fite Road, was completed in June
2016. This station is approximately 10,726 sq. ft. and currently houses one fire engine, one ambulance
with crews, and includes 10 dorm rooms, three restrooms with showers, a kitchen dining area, a Captains
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and Lieutenant's office,and an exercise room.
Fire Station 1, currently located at the corner of Orange Street and Old Alvin Road, will relocate in early
2019 to provide quicker response times. The new station will be located on Old Alvin Road at McHard.
At approximately 9,500 sq. ft., the station will house a 24-hour operation crew with one fire engine, and
one ambulance.
Fire Stations#7 and#8 design will begin in FY 2018,which will continue the trend of shortened response
times to incidents.
Economic Development
The Pearland Economic Development Corporation (PEDC) is a non-profit Type B Corporation under the
Texas Development Corporation Act, and is primarily funded by a half-cent sales tax in the City of
Pearland. PEDC is committed to enhancing the community's economic vitality through the attraction,
retention and expansion of primary employers. PEDC works to ensure Pearland's business climate and
built environment strongly support these efforts by focusing on aesthetics, infrastructure, quality of life,
image,workforce and quality development and redevelopment of key Pearland districts and corridors.
PEDC works with the City to generally promote the City and to utilize various tools such as tax
abatement and the authority granted the City under Chapter 380 of the Local Government Code to
encourage new jobs and investment in the community. The following highlights a few of PEDC's Fiscal
Year 2017 attraction and retention projects.
Lonza's new cell and gene therapy manufacturing facility in Pearland's Lower Kirby District is nearing
completion and scheduled to open in the first quarter of 2018. With the initial 100,000 square-foot
facility,which broke ground in May 2016, and the subsequent 150,000 square-foot expansion,which was
announced five months into construction,the Pearland facility will be the largest in the world dedicated to
cell and gene therapy and manufacturing. The facility, which will more than double Lonza's capacity for
the production of cell and gene therapeutics, will be home to more than 100 employees and will bring
more than$60 million in investment to the community.
In May,Tool-Flo Manufacturing, a supplier of precision carbide metal working tools,broke ground on an
80,000 square-foot headquarters, training and manufacturing facility in Pearland's Lower Kirby District.
Tool-Flo Manufacturing, which is owned by IMC Group, is a manufacturer of tools and products for the
oil/gas, automotive, aerospace and medical industries. The IMC Group, a Berkshire Hathaway owned
company, is one of the world's largest companies for metalworking products and metal removal
technology, supplying a dynamic comprehensive line of precision carbide metalworking tools. Located
on a 15-acre site on the southeast corner of Kirby Drive and N. Spectrum Boulevard, the facility, which
includes office, manufacturing and training space, will be home to approximately 150 employees,
including management,engineering, sales, operations and administrative personnel.
In October, Base Pair Biotechnologies celebrated the opening of its new 5,000 square-foot office and
laboratory space in Pearland. The company, which PEDC recruited to Pearland in 2014, develops
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"aptamers," novel chemical components for research and medical diagnostics made of DNA, which can
be used as substitutes for antibodies in many applications. Base Pair's new location includes larger and
improved office and laboratory facilities, allowing for increased efficiency in performing custom funded
laboratory projects and research and development for its diagnostic, biotech and pharmaceutical clients
around the world.
In December, Adient Medical, a developer of absorbable medical devices, opened its new office and
research space in the Reflection Bay of Shadow Creek. The company develops implantable medical
devices that serve a useful function and then vanish from the body and is currently collaborating with
partners such as the University of Texas M.D. Anderson Cancer Center. Adient is currently developing
the first totally absorbable Inferior Vena Cava (IVC) filter for the prevention of pulmonary embolism.
The new Pearland facility, which is home to eleven employees, includes an ISO Class 7 clean room for
medical device research, development and assembly of the IVC filter.
PEDC, along with local partners in government, education, healthcare and business, continue to work on
implementation of the Pearland 20/20 community strategic plan. The long-term strategic community and
economic development plan that was created in 2012 incorporates nine strategies to ensure a shared
vision for the community's future growth and an action plan to achieve it. The plan's steering committee
completed a mid-course update to the plan in 2015 to get a big-picture sense of key successes and
challenges. The nine strategies are 1. Economic Development Marketing, 2. Mobility, 3. Corridors and
Character Districts,4. Recreation and Culture,5.Beautification and Gateways, 6. Lower Kirby District, 7.
Multi-Use Event Center, 8. Education and Workforce, and 9. Internal Marketing.
With construction of the 288 managed toll lanes fully underway in both Harris and Brazoria counties,
PEDC and Pearland Municipal Management District No 2 (PMMD2) continued implementation efforts
for the 288 Corridor Master Improvements Plan. For the portion of the project from Clear Creek to
County Road 59, aesthetic hardscape improvements, including brick pavers, new curbs, sidewalks, wet
and dry detention ponds, and upgraded decorative signal poles, were incorporated into the Brazoria
County managed toll lanes construction plans and funded by PEDC. For the area north of Clear Creek,
these improvements will be constructed by PEDC after Harris County's concessionaire has completed
construction. Aesthetic softscape improvements, including landscaping, irrigation, lighting, large water
fountains,artistic sculptures, and gateway signage,will be implemented after construction of the toll lanes
is complete,with all improvements scheduled for completion in 2020.
PEDC continued efforts to construct gateways and entry features around the community, completing
construction on the Cullen Boulevard, Dixie Farm Road and Pearland Parkway entry features, along with
both a Pearland and a Lower Kirby District gateway sign on Kirby Drive. In addition, PEDC started
design work for the next gateway sign location—the eastern city limit on Broadway.
One of the City's prime areas for development, the Lower Kirby District, a 1,200 acre mixed-use
development located at Hwy 288 and Beltway 8, has infrastructure needs that make it more difficult to
develop. Continuing its implementation of the Lower Kirby District Gateways and Corridor
Enhancements Master Plan adopted in 2016, PEDC, Lower Kirby Management District (LKMD) and
Pearland Municipal Management District #1 completed construction of the first entryway as well as
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corridor enhancements on Kirby Drive,between Clear Creek and Beltway 8,which includes one Pearland
Gateway Sign at Beltway 8, two District Gateway Signs (one at Beltway 8 and the other at Clear Creek),
landscaping, removal and replanting of trees in the median, and electricity extension to the signs and
irrigation in the enhanced areas.
PEDC and LKMD completed an update of the district master park plan, involving developers in the
process. The updated plan, along with continued efforts to improve the district's regional detention and
quality of life,are paving the way for infrastructure improvements, including a waterline connection and a
public park facility in the district. Through development agreements between the City and the Ivy
District developer, America Modern Green, the space around the Lower Kirby District's regional
detention pond will be developed as a public park, including a playground, covered pavilion, a 6-foot trail
through the park and around the pond, irrigation, landscaping and a pedestrian bridge across Clear Creek.
Through a partnership between PEDC, LKMD, Mitsubishi Heavy Industries Compressor Corp. and the
City, the reconstruction of Hooper Road was completed in November, allowing for additional traffic from
area developments. In addition, the construction to extend North Spectrum Boulevard to the TxDOT
ditch was completed in July, with the landscaping and installation of the traffic signal at the Kirby Drive
intersection slated for early 2018.
PEDC continues to promote Pearland and is currently working with several companies on future
relocations and site visits as well as working with existing businesses on future expansions.
Convention and Visitor's Bureau
The City's Convention and Visitor's Bureau (CVB), funded by hotel occupancy taxes, also focuses on
economic development through tourism and putting heads in beds. In late 2012, the City Council
authorized the creation of a city department for the Convention and Visitor's Bureau, service that had
been previously contracted out. In fiscal year 2013, an Executive Director and staff was hired. The
location of Pearland, as previously mentioned, makes Pearland a perfect hub for visitors and "A Perfect
Pick...to play, stay, meet, and getaway", the tag line for the CVB. The time has come for Pearland to
complement and support its development with cultural and lifestyle amenities to include a multi-use
events center. This need has been noted in multiple Pearland planning processes as an enhancement to
make the city more competitive for employers and residents. Annual hotel occupancy taxes total $1.4
million dollars and the funds ending balance is $4.6 million as of September 30, 2017.
Land Use Plan/Annexation
Land use planning seeks to order and regulate the use of land in an efficient and ethical way, thus
preventing land use conflicts. Land use planning is the systematic assessment of land,alternatives for land
use, and social and economic conditions in order to select and adopt the best land use options. Its purpose
is to select and put into practice those land uses that will best meet the needs of the people while
safeguarding resources and ensuring sustainability.
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City of Pearland FY 2017 CAFR
PEDC and the City of Pearland, in partnership with Gateway Planning, finalized a market-based master
plan and implementation strategy for the area formerly known as the Spectrum District, and currently
known as the Lower Kirby Mixed Use District, that leverages the area's unique location (on Beltway 8
and 288) and creates a de facto "master development" context. The area is planned to be a regional
employment center with destination mixed use urban living,and concentrated retail/entertainment areas.
Capital Improvement Projects and Planning
With continued residential and commercial growth, and to plan for the future, the need to build new
infrastructure and maintain existing infrastructure is a priority and will be implemented through an
aggressive capital improvement program. The City's Five-Year CIP 2018-2022 totals $566 million.
Projects include drainage ($12M), streets ($117M), facilities ($73M), parks ($38M), water and
wastewater($326M).
Drainage projects include the construction of storm sewers, detention ponds, and underground drainage,
as well as associated culvert and ditch improvements. These construction projects and improvements will
help reduce the risk of repetitive flooding in residential areas and provide storage capacity. Major
drainage improvements include Southeast Quadrant of Old Townsite Drainage, a sub-regional drainage
and detention plan to serve the 71.4 acre area,and Preliminary Engineering Report(PER)for Future Bond
Referendum.
Parks projects include the construction of the Shadow Creek Ranch Trail, a 10 foot wide hike and bike
trail along the southern bank of Clear Creek beginning on the east side of Kinglsey Drive and extending
east approximately 1,300 feet terminating at Kirby Drive. The Green Tee Terrace Trail extends
approximately 8,000 LF of 10 foot wide hike and bike trail along the Clear Creek Corridor from
Broadway through Province Village to Clear Creek over the creek to Hughes Road in conjunction with
Gehan Homes and PER for Future Bond Referendum.
Facility projects include the relocation and construction of Fire Station #1, construction for a new office
facility at Orange Street Service Center; a new 12,000 square foot administration Building and new
parking area to house approximately 50 staff; and the Fiber Backbone project, which will extend and
build out the fiber network to reach all city facilities.Also,the design of Fire Stations#7 and#8,PER for
Future Bond Referendum and PER for a new Animal Shelter.
Street projects include pavement rehabilitation, which replaces sections of existing failed pavement, road
extensions, widening and reconstruction of some of the major streets in the City to improve mobility,
congestion, and ride-ability. Major street projects include Old Alvin Road Widening from Plum Street to
McHard Road, Hughes Ranch Road (CR 403) from Cullen to Smith Ranch Road, Max Road Expansion
from Hughes Ranch to Reid Boulevard, Smith Ranch Road Extension(CR 94) from Hughes Ranch Road
to Broadway,PER for Future Bond Referendum,and Intersection Improvements.
Water and Wastewater projects include the replacement and/or the construction of water and sewer lines,
water wells, and treatment and water capacity. Major projects for water improvements include the
installation of FM 521 Waterline from Broadway to Mooring Pointer, McHard Waterline Phase II from
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Ci of Pearland FY 2017 CAFR
Cullen Parkway to Mykawa Road,design of 10 MGD Surface Water Plant Phase,construction of FM 521
Ground Storage Tank Expansion, Water Meter Change-out, Underground Piping Infrastructure at water
facilities, Transite Waterline Replacement, construction of FM 1128 16" Water Line from Bailey to CR
100, CR 100 16"Water Line from Veterans Drive to FM 1128, and Veterans Drive 16"Water Line from
Bailey Road to CR 128. Wastewater projects include the construction of McHard Road Trunk Sewer from
Garden to Southdown WWTP,expansion of Barry Rose WRF and JHEC WRF,relocation of the Mykawa
Lift Stations, the installation of the Green Tee 1 to Riverstone Waste Water Diversion in the Longwood
service area, design of the Waste Water Master Plan,installation of the Reflection Bay Lift Station Bar
Screen,lift station rehabilitation and sanitary sewer rehabilitation.
Transportation Improvements and Strategic Planning
Charged with planning, establishing, and maintaining an effective transportation system, the City of
Pearland is involved in numerous activities to face this challenge. The $84 million transportation bond
program(passed in 2007)will construct major projects mentioned previously.
The City is also involved in regional efforts for long-range transportation planning and funding. The
Mayor is the Secretary for H-GAC's Transportation Policy Council(TPC),with the Deputy City Manager
serving as an alternate. The Assistant City Manager is the 1st Vice-Chair of the Technical Advisory
Committee (TAC), a sub-committee of the TPC, a Chair of the Transportation Improvement Program
(TIP) Subcommittee, and the Director of Engineering is a member of the Regional Transportation Plan
(RTP) Subcommittee.
The City submitted several proposed roadway projects from its Capital Improvement Program for
possible funding in the region's Transportation Improvement Program(TIP) for 2015- 2018 and five of
the City's projects were selected for funding. The projects are Mykawa Road (FM518 to Beltway),
Hughes Ranch Road (Smith Ranch to Cullen Parkway), SH288 Northbound Frontage Road (CR59 to
FM518), Clear Creek Trail (Hughes Road to University of Houston Clear Lake, Pearland Campus) and
Safe Routes to School (including Carleston Elementary, Cockrell Elementary and Jr High South) These
projects will receive State and federal funding in the amount of 80% totaling $60,367,000 with the City
providing 20% matching funds. These project are scheduled for completion between 2018 and 2022.
These projects are in addition to the five projects selected in 2013 totaling $63,251,113 and the four
projects that received funding in 2011 totaling$20,180,901
With the growth in population along the Highway 288 corridor and the number of Pearland residents that
rely on Hwy 288 to commute to Houston and the Texas Medical Center, the City along with Brazoria
County have been meeting and working with the Texas Department of Transportation to provide traffic
relief on the corridor through managed toll lanes. Harris County began construction last year on four new
toll lanes on Texas 288 north of the Brazoria-Harris County line to the Texas Medical Center. Brazoria
County began construction this year with managed toll lanes from the county line south to County Road
58. In addition, the County has secured TIP funds to reconstruct the SH288 overpass at FM518, FM518
under SH288 and the associated frontage road approaches to the intersection, which addresses the main
congestion issues at our busiest intersection. The TIP funds will provide 80% of the funds and the Texas
Department of Transportation (TxDOT) is providing the 20% matching funds. This project will be
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City of Pearland FY 2017 CAFR
constructed in conjunction with the toll lane project.
The Gulf Coast Center operates a transportation program known as Connect Transit. Connect Transit
provides the "Rides Fare Program" to Pearland. The program is a subsidized program that coordinates
nonemergency transportation services at a discount for qualified users. The City funds approximately
$20,000 for this service annually to its citizens meeting the eligibility requirements; seniors, person with
disabilities,or low-income.
Fiscal Responsibility and Sustainability
Fiscal sustainability can be defined as "the extent to which patterns of Government spending do not
undermine the capability of the Government to continue to spend to achieve its public purposes." City
Council takes a proactive stance in ensuring the fiscal health and sustainability of the City. Council
adopted a set of Financial Management Policy Statements and receives quarterly Finance "Snapshot"
presentations, which includes economic indicators. The City also prepares a Five-Year Forecast for the
City's major funds to see how the spending decisions made today affect the future as well as to identify
any issues/concerns that are forthcoming and to put strategies in place today to address those
issues/concerns for the futare.
Since fiscal year 2013 we have seen a turnaround in the economy and growth,however beginning in 2016
the economy has slowed compared to prior years with mixed indicators. In 2018 we are seeing a
turnaround. The moderate growing Houston area economy and the City's increasing population played
major roles in the development of the fiscal year 2018 budget. The healthy local economy will most likely
result in continued growth in revenues in the current fiscal year 2018, most noticeably in sales tax and
property tax. The fiscal year 2018 Adopted Budget for sales tax includes an increase of 4.0% over fiscal
year 2017. Property Tax revenue is projected to maintain the strong levels that have developed during
fiscal year 2017. The Adopted Budget for fiscal year 2018 projects an overall increase of 10.0%over last
year's budget mainly due to increased valuations and new property added to the roll. The Adopted Budget
for 2017 included a 2.4100 cent decrease in the property tax rate from $0.7053 to $0.6812 per $100
valuation,and for 2018 a slight increase to $0.685059. The debt service tax rate,however,decreased from
$0.4400 to$0.4300 for FY 2018 with the balance able to be dedicated to operations.
While about half-way into the 2018 fiscal year, the City is already beginning to prepare for the 2019
budget process and up-coming forecast with the same goal of being fiscally responsible to our citizens.
AWARDS AND ACKNOWLEDGEMENTS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for the Excellence in Financial Reporting to the City of Pearland, Texas, for
its Comprehensive Annual Financial Report for the year ended September 30, 2016. This was the 40th
consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of
Achievement, a governmental unit must publish an easily readable and efficiently organized
comprehensive annual financial report. This report must satisfy both generally accepted principles and
applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. City
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City of Pearland FY 2017 CAFR
Pelievethatourcu!ntcornprehensivea!I!Ialfinancialrep!continuestorneettheCe!ncateofinues to meet the Certificate of
Achievement Program's requirements, and we are submitting it to GFOA to determine its eligibility for
another certificate.
The City has also received the GFOA's Distinguished Budget Presentation Award for its annual budget
document. In order to qualify for the Distinguished Budget Presentation Award, the government's budget
document had to be judged proficient as a policy document, a financial plan, an operations guide, and a
communications device.
The preparation of this report was accomplished with the dedicated service of the Accounting staff of the
Finance Department. We express our sincere appreciation to these individuals who have continually
demonstrated the core beliefs of the City and who assisted and contributed to the preparation of this
report. We also thank the Mayor and members of the City Council for their support in planning and
conducting the financial operations of the City in a responsible manner.
Respectfully submitted,
- V
Clay J. Pears ,City Manager Jon Branson, Deputy City Manager
LAASel--)
Cynthia Pearson,Director of Finance
Ci 1 car dilAn 2017�AFI�R xiv
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CITY OF PEARLAND, TEXAS
PRINCIPAL OFFICIALS
As of September 30,2017
Term
Expires
Elected Officials Position May
Tom Reid Mayor 2020
Derrick Reed Mayor Pro Tern 2018
Tony Carbone Councilmember-Position 1 2019
Gary Moore Councilmember-Position 3 2020
Keith Ordeneaux Councilmember-Position 4 2018
J.David Little Councilmember-Position 5 2019
Trent Perez Councilmember-Position 6 2019
Woody Owens Councilmember-Position 7 2020
Appointed Officials Position
Clay Pearson City Manager
Darrin Coker City Attorney
Letitia Farnie Municipal Court Judge
City Management Position
Jon Branson Deputy City Manager
Trent Epperson Assistant City Manager
Matt Buchanan PEDC President
Cynthia Pearson Director of Finance
Young Lorfing City Secretary
Eric Wilson Director of Public Works
Michelle Graham Director of Human Resources
Daniel McGhinnis Chief Information Officer
Johnny Spires Police Chief
Chris Orlea Director of Parks and Recreation
Vance Riley Fire Chief
John McDonald Director of Community Development
Kim Sinistore Executive Director,CVB
Sparkle Anderson Director of Communications
Jennifer Huhn Municipal Court Administrator
Robert Upton Director of Engineering and Capital Projects
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City of Pearland FY 2017 CAFR
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zi Organization Chart Deputy C Sfrateglc Prroriries
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Parks& Finance& • Fiscally Responsible Government
Recreation Purchasing Healthy Local Economy
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Secretary nal • Safe Community
Development
• Quality parks. recreation and events
Communications) Convention &
x Visitor's Bureau
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Manager Development Officer
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Permits&
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►ay Organizational chart of departments and selected operation groups for illustrative purposes.
Government Finance Officers Association
Certificate of
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for Excellence
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Presented to
City of Pearland
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2016
0/14.41/... #' t
Executive Director/CEO
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City of Pearland FY 2017 CAFR
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City of Pearland FY 2017 CAFR
Financial Section
City of Pearland FY 2017 CAFR
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City of Pearland FY 2017 CAFR
N. Houston Office
■� 3737 Buffalo Speedway
whitleypenn Suite 1600
Houston,Texas 77098
713.621.1515 Main
whitleypenn.com
REPORT OF INDEPENDENT AUDITORS
To the Honorable Mayor and Members of
the City Council
City of Pearland, Texas
We have audited the accompanying,financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of City of Pearland, Texas (the
"City")as of and for the year ended September 30,2017, and the related notes to the financial statements,
which collectively comprise the City's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the fmancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements,whether due to fraud or error.
In making those risk assessments,the auditor considers internal control relevant to the entity's preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management,as well as evaluating the overall presentation of the financial statements.
Opinions
In our opinion, the fmancial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City, as of September 30, 2017, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
@Nexia A member of
Inter tion Dallas Fort Worth Houston
City eot rmuonrand FY 2017
To the Honorable Mayor and Members of
the City Council
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis on pages 7 through 16, budgetary comparison information on pages 70 through
71, and pension system supplementary information and other post-employment benefit supplementary
information on page 72 through 74 be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board,who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of
management about themethods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The introductory section, combining and individual fund
statements and schedules, other supplementary information, budgetary comparison schedules and
statistical section are presented for purposes of additional analysis and are not a required part of the basic
financial statements.
The combining and individual fund statements and budgetary comparison schedules are the responsibility
of management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves, and
other additional procedures in accordance with auditing standards generally accepted in the United States
of America. In our opinion, the combining and individual fund statements and schedules, other
supplementary information, and budgetary comparison schedules are fairly stated, in all material respects,
in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
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City of Pearland FY 2017 CAFR
To the Honorable Mayor and Members of
the City Council
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 16,
2018, on our consideration of the City's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering City's internal control over financial
reporting and compliance.
1) -1-/- LL-P
Houston,Texas
March 16,2018
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City of Pearland FY 2017 CAFR
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City of Pearland FY 2017 CAFR
Management's Discussion and Analysis
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City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Pearland (the "City"), we offer readers of the City's financial statements this
narrative overview and analysis of the fmancial activities of the City for the fiscal year ended September 30,2017.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of resources of the primary government of the City exceeded its
liabilities and deferred inflows as of September 30, 2017, by $731.2 million (net position). Of this
amount, $655.0 million is invested in capital assets,net of related capital debt and$74.3 million restricted
for capital improvements, debt service, community development projects, public safety, and economic
development.
• At the close of the current fiscal year, the City's governmental funds reported combined ending fund
balances of$122.3 million, an increase of$6.9 million in comparison with the prior year. Increases are
seen in the Capital Projects Fund of$12.2 million, Tax Increment Reinvestment Zone #2 Fund of$1.1
million, and the Development Authority of Pearland Corporation of$2.4 million. Approximately $107.9
million of the$122.3 million is considered restricted and primarily consists of$36.8 million for economic
development and$59.2 million attributable to unspent bond proceeds for capital projects.
• As of September 30, 2017, the unassigned fund balance for the General Fund was $11.3 million or 14%
of total General Fund expenditures. The total fund balance for the General Fund is $14.4 million or 18%
of General Fund expenditures.
• The City's long-term liabilities increased by$49.7 million due to the issuance of new debt.
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 are comprised of three components: (1) government-wide financial statements,
(2) fund financial statements and (3) notes to the financial statements. This report also contains other
supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements - The government-wide financial statements are designed to provide
readers with a broad overview of the City's finances, in a manner similar to a private-sector business.
The Statement of Net Position presents information on all of the City's assets, deferred outflows of resources,
liabilities, and deferred inflows of resources, with the difference between the four reported as net position. Over
time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the
City is improving or deteriorating.
The Statement of Activities presents information showing how the City's net position changed during the fiscal
year. All changes in net position are reported when the underlying event giving rise to the change occurs,
regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for
some items that will only result in cash flows in the future fiscal periods (e.g., uncollected taxes and earned but
unused compensated absences).
Both of the government-wide financial statements distinguish functions of the City that are principally supported
by taxes and intergovernmental revenues (governmental activities) from functions that are intended to recover all
or a significant portion of their costs through user fees and charges (business-type activities). The governmental
activities of the City include general government, public safety, public works, community services and parks and
recreation. The business-type activities of the City include water, sewer, and solid waste. The government-wide
financial statements can be found on pages 19 through 21 of this report. The government-wide financial
statements include not only the City, itself (known as the primary government), but also a legally separate
Economic Development Corporation, Tax Increment Reinvestment Zone (TIRZ #2) and the Development
Authority of Pearland for which the City is financially accountable. Financial information for these blended
component units is reported together with the fmancial information presented for the primary government.
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City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS(continued)
Fund Financial Statements - A fund is a grouping of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. The City, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All 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 statement focus on current sources and uses of spendable
resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information
may be useful in evaluating a government's near-term fmancing 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 funds balance
sheet and the governmental fund statements of revenues, expenditures, and changes in fund balance provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.
Beginning on page 22 of this report, 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, Debt Service, Capital Projects, Tax Increment Reinvestment Zone #2, and Development Authority of
Pearland, which are considered to be major funds. Data from the non-major governmental funds are combined
into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is
provided in the form of combining statements elsewhere in this report.
The City adopts an annual appropriated budget for its General Fund. A budgetary comparison statement has been
provided for the General Fund to demonstrate compliance with the budget.
Proprietary Funds - The City maintains two types of proprietary funds. Enterprise Funds are used to report the
same functions presented as business-type activities in the government-wide financial statements. The City uses
an Enterprise Fund to account for its Water and Sewer Fund and Solid Waste Fund. Additionally, the City
maintains an Internal Service Fund to account for the financing of goods or services provided by one department
or agency to other departments or agencies of the City on a cost reimbursement basis. The Internal Service Fund
is included in governmental activities for government-wide reporting purposes.
Proprietary funds provide the same type of information as the government-wide financial statements, only in more
detail. The basic proprietary fund financial statements, which begin on page 29 of this report, provide separate
information for the Water and Sewer and Solid Waste Enterprise Funds since it is considered to be a major fund
of the City. The basic proprietary fund financial statements can be found on pages 29 through 32 of this report.
Notes to the Financial Statements - The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements. The notes to the
financial statements can be found beginning on page 33 of this report.
Other Information - In addition to the basic financial statements and accompanying notes, this report also
presents other required supplementary information as well as combining and individual fund statements and
schedules that further support the information in the financial statements. This information is presented
immediately following the notes to the financial statements beginning on page 70 of this report.
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City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS(continued)
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In
the case of the City, assets and deferred outflows of resources exceeded liabilities by $731.2 million at the close
of the most recent fiscal year.
By far the largest portion of the City's net position (90%) reflects its investment in capital assets (e.g., land,
infrastructure, buildings, machinery, and equipment), less any related debt used to acquire those assets that is
still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are
not available for future spending. Although the City's investment in its capital assets is reported net of related debt,
it should be noted that the resources needed to repay this debt must be provided from other sources, since the
capital assets themselves cannot be used to liquidate these liabilities.
COMPARATIVE SCHEDULE OF NET POSITION
September 30,2017 and 2016
Amounts in(000's)
Governmental Activities Business-type Activities Totals
2017 2016 2017 2016 2017 2016
Assets
Current and other assets $ 154,379 $ 145,436 $ 124,028 $ 105,508 $ 278,407 $ 250,944
Capital assets 822,835 807,488 334,308 307,444 1,157,144 1,114,932
Total Assets 977,215 952,924 458,336 412,952 1,435,551 1,365,876
Total Deferred Outflows
of Resources 21,861 21,674 2,411 1,616 24,272 23,290
Liabilities
Other liabilities 16,785 13,530 16,512 8,997 33,296 22,527
Long-term liabilities outstanding 477,710 457,098 217,443 188,402 695,154 645,500
Total Liabilities 494,495 470,628 233,955 197,399 728,450 668,027
Total Deferred Inflows
of Resources 175 222 21 29 196 251
Net position
Net investment in capital assets 449,141 439,923 205,827 187,937 654,968 627,860
Restricted 60,310 60,640 13,972 15,852 74,282 76,492
Unrestricted (5,045) 3,185 6,972 13,351 1,927 16,536
Total Net Position $ 504,406 $ 503,748 $ 226,771 $ 217,140 S 731,177 S 720,888
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City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS(continued)
COMPARATIVE SCHEDULE OF CHANGES IN NET POSITION
For the Years Ended September 30,2017 and 2016
Amounts in(000's)
Governmental Activities Business-type Activities Totals
2017 2016 2017 2016 2017 2016
Revenues
Program revenues:
Charges for services $ 28,774 $ 23,894 $ 58,093 $ 50,622 $ 86,867 $ 74,516
Operating grants and
contributions 13,035 13,718 30 13,035 13,748
Capital grants and
contributions 10,107 24,636 2,027 4,094 12,134 28,730
Property taxes 76,686 67,644 76,686 67,644
Sales and use taxes 31,976 31,293 31,976 31,293
Franchise taxes 7,263 7,228 7,263 7,228
Investment earnings 622 729 396 294 1,018 1,023
Other 3,108 5,957 66 166 3,174 6,123
Total Revenues 171,572 175,099 60,582 55,206 232,154 230,305
Expenses
General Government 20,121 18,015 20,121 18,015
Public Safety 44,344 38,933 44,344 38,933
Public Works 49,221 46,449 49,221 46,449
Community Services 5,107 3,711 5,107 3,711
Parks and Recreation 8,823 4,820 8,823 4,820
Economib Development 31,293 31,330 31,293 31,330
Interest on long-term debt 14,422 15,946 14,422 15,946
Water and Sewer 41,475 37,941 41,475 37,941
Solid Waste 7,059 6,833 7,059 6,833
Total Expenses 173,331 159,204 48,534 44,774 221,865 203,978
Increase(decrease)in net
position before special
item and transfers (1,759) 15,895 12,048 10,432 10,289 26,327
Transfers 2,417 6,464 (2,417) (6,464)
Increase in net position 658 22,359 9,631 3,968 10,289 26,327
Net position-beginning 503,748 481,389 217,140 213,172 720,888 694,561
Net position-ending $ 504,406 $ 503,748 $ 226,771 $ 217,140 $ 731,177 , $ 720,888
The increase in Total Net Position from the prior year is $10.3 million, which is primarily attributable to the
increase in business-type activities charges for services.
10
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS(continued)
Governmental activities - Governmental activities increased the City's net position by $0.7 million, thereby
accounting for 6% percent of the total increase in the net position of the City. Key elements of this increase are
as follows:
• Property taxes, sales and use taxes, and franchise taxes totaled $76.7 million, $32.0 million, and $7.3
million, respectively. These revenues increased by $9.8 million from prior year primarily as a result of
an increase in taxable assessed values.
• Capital grants and contributions totaled $10.1 million as a result of infrastructure contributed by
developers.
• The revenues were offset by expenses for general government, public safety, public works, and
economic development of$20.1 million, $44.3 million, $49.2 million, and$31.3 million, respectively.
Expenses and Program Revenues -Governmental Activities
$60 — ■Expenses
$44.3 $492 U Program Revenues
$40
$31.3
w
O $20.1 $24.0 $14.4
$20
1 r $9.5 $5.1 $8.6 $8.8
$3.9 $2.0 $3.9
ti-
°�� °,� ° 5 ti°ey ��°� °mow �ro�
a°fid, •,.., •,, e,°, °G,°�, e, >,6°SQ
�S~G° ,0 4,O 4`,`"6 5���4 °�° 4,°.40
C" CP 4�� &. e5�°
.G ¢,,
Revenues by Source -Governmental Activities
$100 -
$80 $76.7
IIIIIIIIMI
:S $60
v,
a $32.0
° $40
$28.8 $23.1
8 $20
-
$i 3 $3.7
$- i` I r-- _
e,% 4y ccs cg , A
sPc `
G��S4o ����fi60 a ����e
Cr
11
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS(continued)
Business-type activities - Business-type activities increased the City's net position by $9.6 million, thereby
accounting for 94%percent of the total increase in the net position of the City. Key elements of this increase are
as follows:
• Charges for services of $58.1 million increased approximately $7.5 million over the prior year
primarily due to rate increases.
• Capital grants and contributions of$2.0 million decreased $2.1 million from the prior year mainly due
to a decrease in contributions from developers for impact fees.
• The revenues listed above were offset by expenses of$41.5 million and $7.1 million, respectively, for
Water and Sewer and Solid Waste. Expenses increased from prior year by $3.8 million.
Expenses and Program Revenues-Business-type Activities
$60
$53.6
$41.5 ■Expenses
:::
_jrnRevenues
to
$7.1 $6.5
$-
Water and Sewer Solid Waste
Revenues by Source -Business-type Activities
Grants and
contributions Other
3% 1%
Charges for
services
96%
12
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS(continued)
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
As noted earlier, fund accounting is used to demonstrate and ensure compliance with finance-related legal
requirements.
Governmental Funds - The focus of the City's governmental funds is to provide information of near-term inflows,
outflows, and balances of spendable resources. Such information is useful in assessing the City's financing
requirements. In particular, unassigned fund balance may serve as a useful measure of the City's net resources
available for spending at the end of the fiscal year.
The City's governmental funds reflect a combined fund balance of$122.3 million. A portion of the combined fund
balance,or$11.3 million,is unassigned and available for day-to-day operations of the City;$59.2 million is restricted
for capital projects; $36.8 million for economic development and the remaining balance is restricted for debt service
and other programs.
There was an increase in the combined fund balance of $6.9 million from the prior year. The increase in fund
balance includes increases in the Capital Projects Fund of $12.2 million, Tax Increment Reinvestment Zone
(TIRZ) #2 Fund of$1.1 million, and the Development Authority of Pearland Corporation of$2.4 million. The
General Fund's fund balance totaled$14.4 million at year end.
The Pearland Economic Development Corporation, TIRZ #2, and Development Authority, the City's component
units blended with the primary government,had expenditures totaling $39.2 million, leaving an ending fund balance
of$20.5 million,$6.2million,and$10.1 million,respectively,all considered restricted.
Proprietary Funds - The City's business-type activities contain two activities (water and sewer, and solid waste).
The City's proprietary funds provide the same type of information found in the government-wide financial
statements business-type activities.Total net position in the Internal Service Fund was$3.1 million at year end,a$0.7
million increase from the prior year.
GENERAL FUND BUDGETARY HIGHLIGHTS
During the year, there was a $6.8 million increase in appropriations between the adopted and amended budget.
The increase in appropriations is attributable to carryover funding from prior-year encumbrances and projects
and to reflect projections during the 2017-2018 budget process.
Actual revenues of $70.3 million were $0.7 million under the amended budget mainly in licenses and permit
revenue.Actual expenditures of$78.6 million were under the amended budget by$3.4 million,resulting in the year-
end fund balance of$14.4 million, in excess of budget by$2.3 million.
13
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS(continued)
CAPITAL ASSETS AND DEBT ADMINISTRATION •
Capital Assets -At the end of fiscal year 2017, the City's governmental activities and business-type activities had
invested$822.8 million and$334.3 million,respectively, in a variety of capital assets and infrastructure, as reflected
in the following schedule. This represents a net increase of$15.3 million, or 1.9 percent over the end of last fiscal
year for the governmental activities and a net increase of$26.9 million or 8.7 percent over the end of last fiscal year
for business-type activities.
Amounts in(000's) Governmental Activities Business-Type Activities Totals
2017 2016 2017 2016 2017 2016
Land $ 31,161 $ 31,150 $ 3,796 $ 3,796 $ 34,958 $ 34,946
Construction in progress 77,706 49,250 53,339 19,913 131,045 69,163
Infrastructure 626,675 638,752 228,593 233,662 855,268 872,414
Buildings and improvements 74,812 77,046 25,253 25,393 100,065 102,439
Machinery and equipment 8,973 8,360 1,603 1,575 10,576 9,935
Furniture and fixtures 3,508 2,929 13 20 3,521 2,949
Contractual water rights 21,711 23,086 21,711 23,086
Total Capital Assets $822,835 $ 807,487 $ 334,308 $ 307,445 $1,157,144 , $1,114,932
Construction in progress at year-end represents numerous ongoing projects, the largest of which relate to street,
parks, and water/sewer projects. Additional information on the City's capital assets can be found in Note 4 to the
financial statements.
Long-Term Debt - At the end of the current fiscal year, the City had total bonds, certificates of obligation, and
capital leases outstanding of$658.7 million. Of this amount, $290.5 million is composed of general obligation
bonds, $37.5 million is composed of certificates of obligation and$293.4 million represents revenue bonds secured
solely by specified revenue sources.
Amounts in(000's) Governmental Activities Business-Type Activities Totals
2017 2016 2017 2016 2017 2016
General obligation bonds 283,140 $ 262,865 $ 7,360 $ 9,775 $ 290,500 $ 272,640
Certificates of obligation 37,505 50,070 37,505 50,070
Revenue bonds 97,215 91,370 196,200 173,570 293,415 264,940
Unamortized amount for
issuance premium/(discount) 25,832 18,793 9,395 850 35,227 19,643
Capital leases payable 1,838 4,229 257 375 2,095 4,604
$ 445,530 $ 427,327 S 213,212_ $ 184,570 $ 658,742 S 611,897
The City's general obligation bonds and certificates of obligation debt for governmental activities increased to
$320.6 million. The increase is due to new debt issued offset by scheduled principal payments. The City's debt for
business-type activities increased to$203.6 million, a net increase of
$20.2
million from the previous year,which was a result of new debt issued offset by scheduled principal payments.
14
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS(continued)
Current credit ratings on debt issues are as follows:
Moodys
Standard Investor
and Poor's Fitch Services
General obligation bonds AA AA Aa2
• Revenue bonds AA- AA- Aa3
Both the Pearland Economic Development Corporation (PEDC) and the Development Authority of Pearland
(DAP), component units of the City, have issued debt. The PEDC bonds are rated Al from Moody's. The DAP
bonds are rated A-by Standard and Poor's. Additional information on the City's long-term debt can be found in
Note 5 to the financial statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES
The City of Pearland continues with its forward momentum in FY 2018, less in terms of population and more in
terms of growing value. The City also saw$890 million or 6.8%increase in added taxable value to $9.7 billion in
FY 2017. The City's sales tax revenue is expected to continue strongly, providing $20 million in FY 2018 with
4% growth. Sales tax revenue actually provides substantially to General Fund operations in addition to being the
funding source for our Pearland Economic Development Corporation for another $10 million in FY 2018. The
combination of rooftops and retailers in Pearland helps the local economy with jobs and investment and obviously
provides tremendous value to our local government operations.
The City received positive ratings from Moody's Investor Services and Fitch Ratings, Inc. in July for its 2017
bond issuances. The Permanent Improvement and Refunding Bonds Series 2017 for $54.9 million and the
Certificates of Obligation Series 2017 for $5.8 million were assigned a rating of"AA" by Fitch and `Aa2' by
Moody's. Separately, our enterprise fund Water and Sewer System Revenue and Refunding Bonds-Series 2017C
for $60.4 million were assigned `AA-' by Fitch and `Aa3' by Moody's. These ratings demonstrate strong
creditworthiness relative to other U.S. municipal or tax-exempt issuers or issues. The City, however, is
significantly leveraged, which remains necessary to allow the City to grow successfully. The City's growth,
however, allows debt service payments to be spread over a larger tax base, steadying the debt service rate while
continuing moderate new debt issuances for capital investment projects. The debt service rate small reduction is
atop the reduction we had in 2017, to 0.4400 from .4828 in FY 2016. The significantly reduced debt service rate
for two years is even as new projects are being financed (general obligation and certificates of obligation). The
City has refinanced existing debt for long-term savings and has also dedicated fund balance from the debt service
fund for reducing the rate in 2018. As of September 30, 2017 the City had $320.6 million in General Obligation
and Certificates of Obligation outstanding being paid back primarily by property taxes. Our financial obligations
will continue to be met, and the City will continue to grow,but knowing that the heavy investments both past and
future may limit our resources for ongoing operations and innovations.
With a recovering Houston area economy and the continued growth in value and population, the City General
Fund revenues and other sources are projected to increase from $74,785,533 in FY 2017 to $79,070,435 in FY
2018, an increase of$4,284,902, or 5.7%, mainly due to an increase in Property Tax, Sales Tax, and Charges for
Services. Property Tax revenues increased in 2018 by 15.8% over FY 2017 year-end amended revenue, resulting
in an increase in property tax revenues as a percent of total revenues, from 24% in FY 2017 to 26% in FY 2018,
and a slight increase in the overall property tax rate from $0.6812 to $0.685059 per $100 valuation. The
unemployment rate in the Houston MSA fell to a low 4.4%, adding 27,300 new jobs in October 2017, while the
City's unemployment rate is even lower at 4.0%.
FY 2018 total expenditures are $78,715,518, 3.0% higher than the FY 2017 Adopted Budget. Salaries and
benefits remain the major expenditure for FY 2018, at 70.5% of the total. The FY 2017 Adopted Budget salaries
15
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS(continued)
and benefits represented 67% of total expenditures. Police and Fire remained the main focus of the supplemental
funding. The Police Department will be adding two new Telecommunications Officers, one Jailer, as well as two
new Police Officers. The Fire Department will be beginning the process of"continuous onboarding" by bringing
on three new firefighters per quarter beginning in January. A 2%increase in salary is included for all personnel,to
support recruitment and retention efforts. This is in addition to the annual 3% step increases for Certified Police
Officers. The City will also invest $1,263,130 in implementing the results of the Compensation & Classification
Study to within 100% of market. The portion of the City's medical premium payments is being passed on to
employees for FY 2018 as a result of changing dependent coverage from 68% to 66%. The City was able to
allocate a portion of fund balance to defray some of the plan cost.
The General Fund meets reserve requirements and the fund is structurally in balance for FY 2018 whereby
operating revenues are greater than expenditures. The adopted FY 2018 fund balance over policy is increased to
$528,643,with the adopted ending fund balance of$12,451,682 for FY 2018.
REQUESTS FOR INFORMATION
The financial report is designed to provide our citizens, customers, investors and creditors with a general overview of
City's finances. If you have questions about this report or need any additional financial information, contact Cynthia
Pearson, Director of Finance, at 3519 Liberty Drive, Pearland, Texas 77581, or call (281) 652-1600. The report and
general information can be found on the City's website at www.pearlandtx.gov.
16
City of Pearland FY 2017 CAFR
Basic Financial Statements
17
City of Pearland FY 2017 CAFR
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18
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
STATEMENT OF NET POSITION
September 30,2017
Primary Government
Governmental Business-type
Activities Activities Total
Assets
Cash and equivalents $ 35,107,262 $ 2,947,304 $ 38,054,566
Investments 91,637,459 13,767,216 105,404,675
Receivables,net of allowance
for uncollectibles 27,529,750 5,702,111 33,231,861
Inventories 64,455 64,455
Prepaid items 40,555 40,555
Restricted cash and cash equivalents 55,147,879 55,147,879
Restricted investments 46,463,113 46,463,113
Capital assets:
Capital assets not subject
to depreciation 108,867,595 57,135,423 166,003,018
Capital assets,net of
accumulated depreciation 713,967,763 277,173,022 991,140,785
Total Capital Assets 822,835,358 334,308,445 1,157,143,803
Total Assets 977,214,839 458,336,068 1,435,550,907
Deferred Outflows of Resources
Deferred charge on refunding 12,635,700 1,214,668 13,850,368
Deferred outflows related to pension activities 9,224,802 1,196,819 10,421,621
Total Deferred Outflows of Resources 21,860,502 2,411,487 24,271,989
Liabilities
Accounts payable and accrued liabilities 12,635,014 12,497,529 25,132,543
Accrued interest 1,221,359 474,841 1,696,200
Unearned revenues 2,072,688 2,072,688
Customer deposits 855,589 3,539,261 4,394,850
Long-term liabilities:
Due within one year 24,291,531 11,944,270 36,235,801
Due in more than one year 431,114,570 202,565,309 633,679,879
Net pension liability 22,304,021 2,933,907 25,237,928
Total Liabilities 494,494,772 233,955,117 728,449,889
Deferred Inflows of Resources
Deferred inflows related to pension activities 174,849 21,496 196,345
Total Deferred Inflows of Resources 174,849 21,496 196,345
Net Position
Net investment in capital assets 449,140,670 205,827,189 654,967,859
Restricted for:
Capital improvements 3,678,590 10,649,796 14,328,386
Debt service 12,624,163 3,321,884 15,946,047
Community development programs 5,644,097 5,644,097
Public safety 364,268 364,268
Economic development 37,998,943 37,998,943
Unrestricted (5,045,011) 6,972,073_ 1,927,062
Total Net Position $ 504,405,720 $ 226,770,942 S 731,176,662
See Notes to Financial Statements.
19
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
STATEMENT OF ACTIVITIES
For the Year Ended September 30,2017
Program Revenue
Charges for Operating Grants Capital Grants and
Functions/Programs Expenses Services and Contributions Contributions
Primary Government
Governmental Activities:
General Government $ 20,121,059 $ 9,518,133 $ $
Public Safety 44,342,796 3,949,001
Public Works 49,221,128 1,394,616 12,459,468 10,106,819
Community Services 5,106,675 8,025,888 575,035
Parks and Recreation 8,823,323 2,001,161
Economic Development 31,293,418 3,885,327
Interest on long-term debt 14,422,322
Total Governmental Activities 173,330,721 28,774,126 13,034,503 10,106,819
Business-type activities:
Water and Sewer 41,474,798 51,543,891 2,027,050
Solid Waste 7,059,274 6,548,841
Total Business-Type Activities 48,534,072 58,092,732 2,027,050
Total Primary Government $ 221 864,793 $ 86,866,858 $ 13,034,503 $ 12,133,869
General Revenues:
Taxes:
Property taxes
Sales and use taxes
Franchise taxes
Unrestricted investment earnings
Miscellaneous
Transfers
Total General Revenues and Transfers
Change in net position
Net position-beginning
Net position-ending
See Notes to Financial Statements.
•
20
City of Pearland FY 2017 CAFR
Net(Expense)Revenue and Changes in Net Position
Primary Government
Governmental Business-type
Activities Activities Total
$ (10,602,926) $ $ (10,602,926)
(40,393,795) (40,393,795)
(25,260,225) (25,260,225)
3,494,248 3,494,248
(6,822,162) (6,822,162)
(27,408,091) (27,408,091)
(14,422,322) (14,422,322)
(121,415,273) (121,415,273)
12,096,143 12,096,143
(510,433) (510,433)
11,585,710 11,585,710
(121,415,273) 11,585,710 (109,829,563)
76,686,073 76,686,073
31,976,039 31,976,039
7,263,340 7,263,340
622,498 396,154 1,018,652
3,108,336 66,033 3,174,369
2,416,673 (2,416,673)
122,072,959 (1,954,486) 120,118,473
657,686 9,631,224 10,288,910
503,748,034 217,139,718 720,887,752
$ 504,405,720 S 226,770,942 $ 731,176,662
21
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
BALANCE SHEET
GOVERNMENTAL FUNDS
September 30,2017
Tax Increment
Capital Reinvestment
General Fund Debt Service Projects Zone#2
Assets
Cash and cash equivalents $ 103,396 $ 887,795 $ 18,095,249 , $ 2,374,774
Investments 16,169,007 5,064,147 42,333,284 3,791,822
Receivables,net of allowance
for uncollectibles 6,399,916 9,361,119 4,389,978
Due from other governments
Due from other funds 246,785 2,350,186
Inventories 64,455
Prepaid items 36,235
Total Assets $ 23,019,794 $ 15,313,061 $ 67,168,697 $ 6,166,596
Liabilities
Accounts payable $ 3,362,523 $ - $ 7,183,690 $ 373
Accrued expenditures 1,029,449 132,080 6,191
Deposits 817,256
Due to other funds 2,350,186
Unearned revenue 548,195 1,524,493
Total Liabilities 8,107,609 1,656,573 7,189,881 373
Deferred Inflows of Resources
Unavailable revenue 549,180 7,745,027 2,191,712
Total Deferred Inflows
of Resources 549,180 7,745,027 2,191,712
Fund Balances
Non-spendable
Inventories 64,455
Prepaid items 36,235
Restricted
Debt service 5,911,461
Capital improvements 57,787,104
Community development programs
Public safety
Economic development 6,166,223
Assigned
Encumbrances 3,000,482
Unassigned 11,261,833
Total Fund Balances 14,363,005 5,911,461 57,787,104 6,166,223
i otat Liabilities,Deterred
Inflows of Resources,
and Fund Balances $ 23,019,794 $ 15,313,061 $ 67,168,697 $ 6,166,596
See Notes to Financial Statements.
22
City of Pearland FY 2017 CAFR
Development Non-major Total
Authority of Governmental Governmental
Pearland Funds Funds
$ 8,150,313 $ 1,882,318 $ 31,493,845
24,279,199 91,637,459
5,424,640 25,575,653
1,938,413 1,938,413
2,596,971
64,455
4,320 40,555
S 10,088,726 S 31,590,477 S 153,347,351
S $ 279,671 $ 10,826,257
113,691 1,281,411
38,333 855,589
246,785 2,596,971
2,072,688
678,480 17,632,916
2,973,756 13,459,675
2,973,756 13,459,675
64,455
4,320 40,555
5,911,461
1,412,902 59,200,006
5,644,097 5,644,097
364,268 364,268
10,088,726 20,540,323 36,795,272
3,000,482
(27,669) 11,234,164
10,088,726 27,938,241 122,254,760
$ 10,088,726 $ 31,590,477 $ 153,347,351
23
City of Pearland FY 2017 CAFR
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24
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO
THE STATEMENT OF NET POSITION
September 30,2017
Total fund balance, governmental funds $ 122,254,760
Amounts reported for governmental activities in the Statement of Net Position are different
because:
Capital assets used in governmental activities are not financial resources and, therefore, are
not reported in the funds. 822,835,358
Deferred outflows represent a consumption of net position that applies to future periods and
therefore will not be recognized as an outflow of resources until then.
Deferred charge on refunding 12,635,700
Deferred outflows relating to pension activities 9,224,802
Other long-term assets (property taxes receivable and adjudicated court fines receivable) are
not available to pay current period expenditures and, therefore, are reported as unavailable
revenue in the funds. 13,459,675
Long-term liabilities, including bonds payable, are not due and payable in the current period,
therefore, are not reported in the funds.
Bonds and capital leases payable (445,530,394)
Compensated absences (6,549,222)
Accrued interest governmental activity debt (1,221,359)
Other post-employment benefit liability (3,326,485)
Net pension liability (22,304,021)
Deferred inflows represent a consumption of net position that applies to future periods and
therefore will not be recognized as an inflow of resources until then. (174,849)
Internal service funds are used by management to charge the cost of property insurance and
employee benefits to individual funds. The assets and liabilities of the internal service funds
are included in the governmental activities in the statement of net position. 3,101,755
Net Position of Governmental Activities in the Statement of Net Position $ 504,405,720
See Notes to Financial Statements.
25
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN
FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended September 30,2017
Tax Increment
Capital Reinvestment
General Fund Debt Service Projects Zone#2
Revenues
Property taxes $ 17,910,289 $ 32,476,674 $ $ 26,175,220
Sales and use taxes 20,457,029
Franchise fees 6,975,737
Licenses and permits 5,434,918
Fines and forfeitures 2,510,849
Charges for services 15,396,512
Investment earnings 71,512 77,637 207,112 51,134
Intergovernmental 15,084,953
Other 1,536,934 837,046 1,083,040
Total Revenues 70,293,780 _ 33,391,357 16,375,105 26,226,354
Expenditures
Current:
General government 10,081,096
Public safety 40,660,511
Public works 12,148,861 4,983,526
Community services 4,085,693
Parks and recreation 6,297,335
Economic development 11,127,635
Debt Service:
Principal 547,305 17,318,542
Interest and other charges 44,294 11,872,754 375,452
Capital outlay 4,767,704 38,183,894
Intergovernmental 6,936,997
Total Expenditures 78,632,799 36,128,293 43,542,872 11,127,635
Excess(deficiency)of revenues
over expenditures (8,339,019) (2,736,936) (27,167,767) 15,098,719
Other Financing Sources(Uses)
Revenue bonds issued
Certificates of obligation issued 6,205,000
Permanent improvement bonds issued 21,890,000
Refunding bonds issued 64,850,000
Payments to refunded bond
escrow agent (72,608,326)
Premium on debt issued 7,557,342 2,896,020
Transfers in 3,791,394 572,961 10,192,660
Transfers out (2,008,856) (1,780,957) (14,039,117)
Total Other Financing Sources(Uses) 1,782,538 371,977 39,402,723 (14,039,117)
Net change in fund balances (6,556,481) (2,364,959) 12,234,956 1,059,602
Fund balances-beginning 20,919,486 8,276,420 45,552,148 5,106,621
Fund balances-ending S 14.363,005 S 5.91 1,461 S 57,787,104 $ 6,166,223
See Notes to Financial Statements.
26
City of Pearland FY 2017 CAFR
Development Non-major Total
Authority of Governmental Governmental
Pearland Funds Funds
$ $ $ 76,562,183
11,519,010 31,976,039
287,603 7,263,340
5,434,918
142,493 2,653,342
•
618,532 16,015,044
2,515 209,291 619,201
925,162 16,010,115
2,287,410 5,744,430
2,515 15,989,501 162,278,612
17,387 1,124,931 11,223,414
197,115 40,857,626
232,755 17,365,142
752,105 4,837,798
128,880 6,426,215
15,815,686 2,057,465 29,000,786
5,585,000 890,000 24,340,847
2,589,989 338,786 15,221,275
908,795 43,860,393
6,936,997
24,008,062 6,630,832 200,070,493
(24,005,547) 9,358,669 (37,791,881)
12,320,000 12,320,000
6,205,000
21,890,000
64,850,000
(72,608,326)
10,453,362
14,039,117 28,596,132
(9,161,558) (26,990,488)
26,359,117 (9,161,558) 44,715,680
2,353,570 197,111 6,923,799
7,735,156 27,741,130 115,330,961
$ 10,088,726 $ 27.938,241 S 122,254,760
27
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF ACTIVITIES
For the Year Ended September 30,2017
Net change in fund balances-total governmental funds: $ 6,923,799
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Governmental funds report outlays for capital assets as expenditures.However,in the Statement
of Activities,the cost of these assets is allocated over their estimated useful lives as depreciation
expense.
This is the amount by which depreciation of$38,538,327 exceeded capital outlays of$43,860,392
in the current period. 5,322,065
Governmental funds report only the proceeds from the disposal of capital assets and not the
difference between the carrying value and the accumulated depreciation of the asset.This is the
amount by which the carrying value exceeded the accumulated depreciation. (81,091)
Capital assets acquired as a result of in-City development. 10,106,819
Governmental funds do not present revenues that are not available to pay current obligations. In
contrast,such revenues are reported in the Statement of Activities when earned. (1,951,892)
Pension contributions made after the pension plan measurement date are reported as expenditures
in the governmental funds and are reported as deferred outflows on the face of the statement of
net position 4,609,930
Governmental funds report bond proceeds as current financial resources.In contrast,the
Statement of Activities treats such issuance of debt as a liability. Governmental funds report
repayment of bond principal as an expenditure,In contrast,the Statement of Activities treats such
repayments as a reduction in long-term liabilities.This is the amount by which proceeds exceeded
repayments. (13,088,376)
Some expenses reported in the Statement of Activities do not require the use of current financial
resources and,therefore,are not reported as expenditures in governmental funds:
Accrued interest 39,339
Deferred charge on refunding (233,311)
Bond premiums/discounts (7,038,884)
Compensated absences (366,352)
Capital lease activity 2,390,846
Other post-employment benefits liability (572,358)
Pension expense for the pension plan measurement year(governmental activities portion) (6,079,495)
The internal service funds are used by management to charge the costs of property insurance and
employee benefits to individual funds. The net revenue(expense)of certain activities of internal
service funds is reported with governmental activities.
with governmental activities. 676,647
Change in net position of governmental activities $ 657,686
See Notes to Financial Statements.
28
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
STATEMENT OF NET POSI770N
PROPRIETARY FUNDS
September 30,2017
Governmental
Business-type Activities-Enterprise Funds Activities-
Water and Sewer Solid Waste Internal
Fund Fund Total Service Funds
Assets
Current assets:
Cash and cash equivalents $ 2,947,304 $ $ 2,947,304 $ 3,613,417
Investments 13,767,216 13,767,216
Accounts receivable,net of allowance for doubtful accounts 4,934,210 767,901 5,702,111 15,687
Due from other funds 308,106 308,106
Restricted cash and cash equivalents 55,147,879 55,147,879
Restricted investments 46,463,113 46,463,113
Total current assets 123,567,828 767,901 124,335,729 3,629,104
Non-current assets:
Capital assets:
Land and improvements 3,796,382 3,796,382
Construction in progress 53,339,041 53,339,041
Contractual rights to water supply 34,511,428 34,511,428
Infrastructure 347,830,320 347,830,320
Buildings 32,268,698 32,268,698
Machinery and equipment 5,393,259 5,393,259
Less Accumulated depreciation (142,830,683) (142,830,683)
Total non-current assets 334,308,445 334,308,445
Total Assets 457,876,273 767,901 458,644,174 3,629,104
Deferred Outflows of Resources
Deferred charge on refunding 1,214,668 1,214,668
Deferred outflows relating to pension activities 1,196,819 1,196,819
Total Deferred Outflows of Resources 2,411,487 2,411,487
Liabilities
Current liabilities:
Accounts payable and accrued expenses 11,673,326 824,203 12,497,529 527,352
Accrued interest payable 474,841 474,841
Due to other funds 308,106 308,106
Customer deposits 3,539,261 3,539,261
Compensated absences-current portion 150,054 150,054
Bonds and permanent improvement payable-current portion 11,710,000 11,710,000
Capital lease-current portion 84,216 84,216
Total current liabilities 27,631,698 1,132,309 28,764,007 527,352
Non-current liabilities:
Compensated absences 549,130 549,130
Capital lease obligation 172,828 172,828
Other post-employment benefits 598,544 598,544
Net pension liability 2,933,907 2,933,907
Bonds and permanent improvement payable 201,244,807 201,244,807
Total non-current liabilities 205,499,216 205,499,216
Total Liabilities 233,130,914 1,132,309 234,263,223 527,352
Deferred Inflows of Resources
Deferred inflows relating to pension activities 21,496 21,496
Total Deferred Inflows of Resources 21,496 21,496
Net Position
Net investment in capital assets 205,827,189 205,827,189
Restricted for debt service 3,321,884 3,321,884
Restricted for capital projects 10,649,796 10,649,796
Unrestricted 7,336,481 (364,408) 6,972,073 3,101,752
Total Net Position $ 227,135,350 $ (364,408) $226,770,942 $ 3,101,752
See Notes to Financial Statements.
29
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
For the Year Ended September 30,2017
Governmental
Business-type Activities-Enterprise Funds Activities-
Water and Sewer Solid Waste Internal Service
Fund Fund Total Funds
Revenues
Charges for services $ 51,543,891 $ 6,548,822 $ 58,092,713 $ 8,034,408
Total operating revenues 51,543,891 6,548,822 58,092,713 8,034,408
Operating Expenses
Personnel services 7,345,264 7,345,264 54,193
Supplies and materials 7,797,189 7,797,189
Contractual services 5,573,246 7,322,360 12,895,606 8,067,126
Repairs and maintenance 3,415,934 3,415,934
Other expenses 45,940 45,940 50,733
Depreciation and amortization 11,047,799 11,047,799
Total Operating Expenses 35,225,372 7,322,360 42,547,732 8,172,052
Operating income(loss) 16,318,519 (773,538) 15,544,981 (137,644)
Non-Operating Revenues(Expenses)
Earnings on investments 395,330 824 396,154 3,297
Miscellaneous revenue(expense) 66,033 66,033
Bond Issuance Costs (1,090,274) (1,090,274)
Interest expense (4,896,047) (4,896,047)
Total Non-Operating Revenues(Expenses) (5,524,958) 824 (5,524,134) 3,297
Income(loss)before contributions and transfers 10,793,561 (772,714) 10,020,847 (134,347)
Capital contributions 2,027,050 2,027,050
Transfers in 915,140 915,140 1,310,994
Transfers out (3,331,813) (3,331,813) (500,000)
Change in net position 10,403,938 (772,714) 9,631,224 676,647
Total net position-beginning 216,731,412 408,306 217,139,718 2,425,105
Total net position-ending S 227.135,350 S (364.40R) 5226,770942 S 3,101,752
See Notes to Financial Statements.
30
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS Page 1 of 2
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended September 30,2017
Governmental
Business-type Activities-Enterprise Funds Activities-
Water and Sewer Solid Waste Internal Service
Fund Fund Total Funds
Cash Flows from Operating Activities
Receipts from customers and users $ 50,222,111 $ 6,455,614 $ 56,677,725 $
Receipts from interfund charges for insurance activities 8,021,194
Disbursed for personnel services (6,945,586) (6,945,586) (54,193)
Disbursed for goods and services (8,879,552) (7,377,555) (16,257,107) (7,965,124)
Net cash provided(used)by operating activities 34,396,973 (921,941) 33,475,032 1,877
Cash Flows from Noncapital Financing Activities
Transfers in 915,140 915,140 1,310,994
Transfers out (3,331,813) (3,331,813) (500,000)
Cash received from non-operating revenues 66,033 66,033
Net cash provided by(used by)noncapital
financing activities (2,350,640) (2,350,640) 810,994
Cash Flows from Capital and Related Financing Activities
Proceeds from the issuance of debt 38,360,000 38,360,000
Principal payments on debt (10,045,000) (10,045,000)
Principal payments on leases (118,314) (118,314)
Bond issuance costs (1,090,274) (1,090,274)
Interest paid (4,885,204) (4,885,204)
Acquisition and construction of capital assets (36,551,117) (36,551,117)
Net cash provided by capital and related
financing activities (14,329,909) (l4,329,909)
Cash Flows from Investing Activities
Purchase of investments (44,615,045) (44,615,045)
Sale of investments 248,049 248,049
Interest received 395,330 824 396,154 3,296
Net cash provided by(used by)investing activities (44,219,715) 248,873 (43,970,842) 3,296
Net increase(decrease)in cash and equivalents (26,503,291) (673,068) (27,176,359) 816,167
Cash and equivalents,beginning 84,598,474 673,068 85,271,542 2,797,250
Cash and equivalents,end $ 58,095,183 $ $ 58,095,l83 $ 3,613,417
Unrestricted cash and equivalents $ 2,947,304 $ $ 2,947,304 $ 3,613,417
Restricted cash and equivalents 55,147,879 55,147,879
$ 58,095,183 $ $ 58,095,183 $ 3,613,417
See Notes to Financial Statements.
31
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS Page 2 of 2
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended September 30,2017
Governmental
Business-type Activities-Enterprise Funds Activities-
Water and Sewer Solid Waste Internal Service
Fund Fund Total Funds
Reconciliation of operating income to net cash
provided by operating activities
Operating income(loss) $ 16,318,519 $ (773,538) $ 15,544,981 $ (137,644)
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation and amortization 11,047,799 11,047,799
(Increase)decrease in accounts receivable (1,236,548) (93,208) (1,329,756) (13,214)
(Increase)decrease in inventory
(Increase)decrease in prepaid expenses
(Increase)decrease in deferred outflows relating to pension
activities 7,061 7,061
Increase(decrease)in accounts payable 7,952,757 (363,301) 7,589,456 152,735
Increase(decrease)in salaries payable 171,075 171,075
Increase(decrease)in due to other funds 308,106 308,106
Increase(decrease)in customer deposits (85,232) (85,232)
Increase(decrease)in net pension liability 228,848 228,848
Increase(decrease)in deferred inflows relating to pension
activities (7,306) (7,306)
Net cash provided by(used by)operating activities $ 34,396,973 $ (921.941) $ 33,475,032 $ 1,877
Summary of non-cash transactions
Contributed capital assets $ 2,027,050 $ $ 2,027,050 S
See Notes to Financial Statements.
32
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
NOTES TO FINANCIAL STATEMENTS
Note 1 -Summary of Significant Accounting Policies
The City of Pearland, Texas (the "City") was incorporated in December 1959 and adopted a "Home Rule Charter"
February 6, 1971.The Charter,as amended,provides for a Council-Manager form of government and provides services
authorized by its charter. Presently, these services include police, fire and emergency medical, water and sewer
services, drainage, sanitation, building and code inspection, planning, zoning, engineering, street repair and
maintenance,park maintenance,recreational activities for citizens, and general administrative services. Fire protection
is provided through a combination full-time part-time/volunteer department. The City is governed by an elected mayor
and seven-member Council.
The Mayor and all members are elected at large. The Mayor is allowed to vote only in case of a tie vote. The Mayor
and each Council member hold office for a period of three years and until his/her successor is elected and qualified.
Council members shall be limited to two full consecutive terms of office and there is no limitation on the office of the
Mayor.The City Manager is appointed by Council and is responsible for implementation of Council policy,execution
of the laws,and all day-to-day operations of the City.
A. Financial Reporting Entity
The City is an independent political subdivision of the State of Texas governed by an elected council and a mayor
and is considered a primary government.As required by accounting principles generally accepted in the United States
of America, these financial statements have been prepared based on considerations regarding the potential for
inclusion of component units, which are other entities or organizations that are financially accountable to the City.
Blended component units are component units that are considered so closely related to the legal entity that the
blended component unit funds appear as funds that are integral parts of the primary government. The City's
financial statements include the following blended component units: the Pearland Economic Development
Corporation (PEDC); the Tax Increment Reinvestment Zone (TIRZ #2); and the Development Authority of
Pearland (DAP). No other entities have been included in the City's reporting entity. Additionally, as the City is
considered a primary government for financial reporting purposes, its activities are not considered a part of any other
governmental or other type of reporting entity.
Considerations regarding the potential for inclusion of other entities, organizations, or functions in the City's
financial reporting entity are based on criteria prescribed by generally accepted accounting principles. These same
criteria are evaluated in considering whether the City is a part of any other governmental or other type of reporting
entity. The overriding elements associated with prescribed criteria considered in determining that the City's fmancial
reporting entity status is that of a primary government are that it has a separately elected Governing body; it is
legally separate;and it is fiscally independent of other state and local governments.
The financial reporting entity consists of the City and its component units. Component units are legally separate
organizations for which the City is financially accountable or other organizations whose nature and significant
relationship with the City are such that exclusion would cause the City's financial statements to be misleading.
Financial accountability is defined as the appointment of a voting majority of the component unit's board, and (i)
either the City's ability to impose its will on the organization or(ii)there is potential for the organization to provide a
fmancial benefit to or impose a financial burden on the City.
The basic financial statements include blended component units. The blended component units, although legally
separate entities are,in substance,part of the City's operations and so data from these units are combined with data of
the primary government.
For financial reporting purposes,the City's basic financial statements include all financial activities that are controlled
by or are dependent upon actions taken by City Council. The component units do not issue separate financial
statements.
33
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 1 -Summary of Significant Accounting Policies(continued)
A. Financial Reporting Entity(continued)
Blended Component Units:
Pearland Economic Development Corporation(PEDC)
In 1995, the citizens of Pearland established the Pearland Economic Development Corporation (PEDC) to help the
citizens and public officials of Pearland attract new businesses and to help existing businesses to expand. The
mechanism to fund the operations of the corporation is through a sales tax levy at a rate of one-half of one percent
(1/2%). The PEDC is governed by a board appointed by the City Council. Although it is legally separated from the
City, the PEDC relies upon the primary government for appointing the board, also City Council must approve the
PEDC's budget and any debt issuances. The PEDC provides services entirely, or almost entirely, to the City or
otherwise exclusively,or almost exclusively,benefits the City even though it may not provide services directly to it.
Tax Increment Reinvestment Zone(TIRZ#2)
In 1998,the Tax Increment Reinvestment Zone(TIRZ#2)was established for a period of 30 years or until dissolved
by the City. The TIRZ#2 provides tax-assisted property development and/or redevelopment in specific geographic
areas in accordance with applicable state laws. The TIRZ#2 is governed by a board appointed by the City Council.
Although it is legally separated from the City, the TIRZ #2 is fiscally dependent upon the primary government
because the City Council must also approve any debt issuances done on behalf of the TIRZ. A major land owner
within the City sits on the Board of Directors for the TIRZ #2. TIRZ #2 provides services entirely, or almost
entirely, to the City or otherwise exclusively, or almost exclusively, benefits the City even though it may not
provide services directly to it.
Development Authority of Pearland
In 2004,the City created the Development Authority of Pearland to provide financing for the development of the TIRZ
#2. Proceeds from bond sales are to be used to reimburse developers and fund a debt service reserve. The
Development Authority of Pearland is governed by a board appointed by the City Council. Although it is legally
separated from the City, the Development Authority of Pearland is fiscally dependent upon the primary government
because the City Council must also approve any debt issuances done on behalf of the Development Authority of
Pearland. The Development Authority of Pearland provides services entirely, or almost entirely, to the City or
otherwise exclusively,or almost exclusively,benefits the City even though it may not provide services directly to it.
B. Government-wide and Fund Financial Statements
The government-wide fmancial statements (i.e., the Statement of Net Position and the Statement of Changes in Net
Position) report information about the City as a whole. These statements include all activities of the primary
government and its component units. For the most part, the effect of interfund activity has been eliminated from the
government-wide statements. Exceptions to this general rule are charges between the City's business-type and
governmental funds. Elimination of these charges would distort the direct costs and program revenues reported for
the various functions concerned. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent
on fees and charges for support.
34
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 1 -Summary of Significant Accounting Policies(continued)
B. Government-wide and Fund Financial Statements(continued)
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is
offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or
segment. Program revenues include 1) charges to customers or applicants who purchase, use or directly benefit
from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that
are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead as general revenues.
C. Measurement Focus,Basis of Accounting and Financial Statement Presentation
The government-wide financial statements and all proprietary funds are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recognized when earned and expenses are
recorded when a liability is incurred,regardless of the timing of the related cash flows. With this measurement focus,
all assets and all liabilities associated with the operations of these activities are included on the statements of net
position. Proprietary fund-type operating statements present increases(i.e.,revenues)and decreases(i.e.,expenses)
in net total assets.Furniture and equipment capitalized in the Proprietary Fund Types are valued at cost.
The governmental fund financial statements are presented on a current financial resources measurement focus and
modified accrual basis of accounting. This is the manner in which these funds are normally budgeted. Revenues
are recognized as soon as they are both measurable and available. Measurable means that the amount of the
transaction can be determined and available means collectible within the current period or soon enough thereafter to
pay liabilities of the current period. For this purpose,the City considers revenues to be available if they are collected
within 60 days of the end of the current fiscal period. Revenues susceptible to accrual include property taxes, sales
and use taxes, franchise fees, charges for services and interest on temporary investments. Other receipts become
measurable and available when cash is received by the government and are recognized as revenue at that time.
Under modified accrual accounting, expenditures are recognized in the accounting period in which the liability is
incurred, if measurable, except for interest on general long-term debt, which is recognized when due. Since the
governmental fund statements are presented on a different measurement focus and basis of accounting than the
government-wide statements' governmental column, a reconciliation is presented which briefly explains the
adjustments necessary to reconcile fund-based financial statements with the governmental column of the
government-wide presentation.
In the fund financial statements, the accounts of the City are organized on the basis of funds, each of which is
considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-
balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as
appropriate.Following is a description of the various funds:
Governmental funds are those funds through which most governmental functions are typically financed. The City
reports the following major governmental funds:
The General Fund is used to account for all financial transactions not properly includable in other funds. The
principal sources of revenues include local property taxes, sales and franchise taxes, licenses and permits, fines and
forfeitures, and charges for services. Expenditures include general government, public works, parks and recreation,
community services,and public safety.
The Debt Service Fund is used to account for the payment of interest and principal on all general obligation bonds
and other governmental long-term debt of the City. The primary source of revenue for debt service is local property
taxes.The Debt Service Fund is considered a major fund for reporting purposes.
35
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 1 -Summary of Significant Accounting Policies(continued)
C. Measurement Focus,Basis of Accounting and Financial Statement Presentation(continued)
The Capital Projects Fund is used to account for the expenditures of resources accumulated on a pay-as-you-go
basis and the sale of bonds and related interest earnings for capital improvement projects. The Capital Projects
Fund is considered a major fund for reporting purposes.
The Tax Increment Reinvestment Zone#2 fund is used to account for the incremental property tax revenues in the
specific geographical area and use thereof from the participating taxing entities in the Zone. The Tax Increment
Reinvestment Zone#2 is considered a major fund for reporting purposes.
The Development Authority of Pearland fund is used to account for the financing of the development of the TIRZ
#2. The Development Authority of Pearland is considered a major fund for reporting purposes.
The City's Business type activities consist of the following funds:
The Enterprise Funds are used to account for the operations that provide water and sewer utility services as well as
solid waste collection services to the public. The services are financed and operated in a manner similar to private
business enterprises where the intent of the governing body is that the costs (expenses including depreciation) of
providing goods or services to the general public on a continuing basis will be financed or recovered primarily through
user charges.
Additionally, the city maintains Internal Service Funds used to account for the financing of goods or services
provided by one department or agency to other departments or agencies of the City on a cost-reimbursement
basis. Services provided by the Internal Service Funds include property and liability insurance coverage,
employee benefits, and health claims. The Internal Service Funds is included in governmental activities for
government-wide reporting purposes.
All assets, deferred outflows of resources, liabilities, equities, revenues, expenses and transfers relating to the
government's business activities are accounted for through proprietary funds. The measurement focus is on
determination of net income,financial position and cash flows.
As a general rule,the effect of interfund activity has been eliminated from the government-wide fmancial statements.
Exceptions to this general rule are charges between the City's water and sewer function and various other functions of
the government. Elimination of these charges would distort the direct costs and program revenue reported for the
various functions concerned.
Amounts reported as program revenues include: (1) charges to customers or applicants for goods, services, or
privileges provided, (2)operating grants and contributions, and(3)capital grants and contributions, including special
assessments. Internally dedicated resources are reported as general revenues rather than as program revenue.
Likewise,general revenue includes all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with a
proprietary fund's principal ongoing operations. The principal operating revenues of the City's Enterprise Funds are
charges to customers for sales and services. Operating expenses for Enterprise Funds include the cost of sales and
services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this
definition are reported as nonoperating revenue and expense.
36
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 1 -Summary of Significant Accounting Policies(continued)
D. Fund Balance Working Capital Policies
Governmental Funds are presented in the financial statements as follows:
Nonspendable — Amounts that cannot be spent either because they are not in a spendable form or because
they are legally or contractually required to be maintained intact.
Restricted — Amounts that can be spent only for specific purposes because of the City Charter, City Code,
State or Federal laws,or externally imposed conditions by grantors or creditors.
Committed—Amounts than can be used only for specific purposes determined by ordinances passed by City
Council, the City's highest level of decision making authority. Commitments may be modified or rescinded
only through ordinances approved by City Council.
Assigned — Amounts that are intended to be used for a specific purpose, but do not meet the definition of
restricted or committed fund balance. Under the City's policy, amounts can be assigned by the City's
Director of Finance.
Unassigned—Amounts that are available for any purpose. Positive amounts are reported only in the General
Fund.
City Council has authorized the Director of Finance as the official authorized to assign fund balance to a specific
purpose. City Council has established fund balance and working capital policies under which the City shall
maintain the fund balance and working capital of the various operating funds at the following levels:
General Fund Unassigned Fund Balance
The City shall maintain the General Fund unassigned fund balance equivalent to 2 months of recurring
operating expenditures,based on current year expenditures. If the fund balance exceeds this amount, funding
non-recurring expenditures in the following fiscal year may be used to draw down the balance.
Water/Sewer Unreserved Working Capital
The City shall maintain a working capital sufficient to provide for reserves for emergencies and revenue
shortfalls. A cash equivalent operating reserve will be established and maintained at 25% of the current
year's budget appropriation for recurring operating expenses.
The cash operating reserve is derived by dividing the total cash equivalents balance by recurring operating
expenses.
Use of Fund Balance/Working Capital
Fund balance/Working Capital shall only be used for emergencies, non-recurring expenditures/expenses or
major capital purchases that cannot be accommodated through current year savings. Should such use reduce
balances below the level established as the objective for that fund, restoration recommendations will
accompany the request/decision to utilize said balances.
Debt Service Fund Total Fund Balance
The City shall maintain the debt service fund balance at 10% of annual debt service requirements OR a fund
balance reserve as required by bond ordinances,whichever is greater.
37
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 1 -Summary of Significant Accounting Policies(continued)
D. Fund Balance Working Capital Policies(continued)
Property Liability Insurance Fund Unrestricted Net Position
The Property Liability Insurance Fund accounts for uninsured and deductible claims for the City's property
and liability insurance. Claims cannot be reasonably predicted and budgeted for; therefore the fund will
maintain a balance that approximates the prior average annual expense for the last three years, excluding
extra-ordinary expenses in the fund.
The Employee Benefits Fund and Health Claims Fund are funded through City and employee contributions.
Estimated costs shall be determined during each budget year and the contributions adjusted accordingly.
There is no minimum balance for this fund as it relates to employee benefits.
•
Economic Development Corporation
As sales tax revenue fluctuates due to changes in economic conditions, the PEDC shall maintain a fund
balance of no less than 10%of budgeted sales tax revenues.
Water/Sewer Revenue Debt Coverage Reserves
Revenues shall be maintained at 1.15 times coverage in a fiscal year where the water/sewer fund is not issuing
additional debt and 1.4 times coverage in a year where debt is anticipated to be issued.
Bond Issuance Reserves
Debt service reserves should be maintained for each bond issue as required by bond covenants.
Contingency Fund
Pursuant to the City Charter, a provision shall be made within the annual budget for a contingency fund in an
amount not more than seven percent of the total budget(General Fund)to be used in case of unforeseen items
of expenditure.
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. For the purpose of the
statement of cash flows, the Proprietary Fund Types consider temporary investments with maturity of three months
or less when purchased to be cash equivalents.
The City pools cash resources of its various funds to facilitate the management of cash. Cash applicable to a particular
fund is readily identifiable. The balance in the pooled cash accounts is available to meet current operating
• requirements. Cash in excess of current requirements is invested in various interest-bearing accounts and securities
and disclosed as part of the City's investments.
The City pools excess cash of the various individual funds to purchase these investments. These pooled investments
are reported in the combined balance sheet as Investments in each fund based on each fund's share of the pooled
investments. Interest income is allocated to each respective individual fund, monthly,based on their respective share
of investments in the pooled investments.
38
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 1 -Summary of Significant Accounting Policies(continued)
F. Investments
Investments consist of Local Government Investment Pools, United States (U.S.) Government Agency securities,
and Certificates of Deposit with original maturities greater than three months from the date of acquisition. The
City reports all investments at fair value, except for investment pools. The City's investment pools are valued and
reported at amortized cost,which approximates fair value.
The City categorizes fair value measurements of its investments based on the hierarchy established by generally
accepted accounting principles.The fair value hierarchy,which has three levels,is based on the valuation inputs used to
measure an asset's fair value: Level 1 inputs are quoted prices in active markets for identical assets;Level 2 inputs are
significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City's local government
investment pools are recorded at amortized costs as permitted by GASB Statement No. 79, Certain Investment Pools
and Pool Participants.
G. Receivables
All receivables are reported at their gross value, and where appropriate, are reduced by the estimated portion that is
expected to be uncollectible. Trade accounts receivable in excess of 120 days comprise the trade accounts receivable
allowance for uncollectibles.
H. Due to and Due from Other Funds
Interfund receivables and payables arise from interfund transactions and are recorded by all funds affected in the
period in which the transactions are executed.These receivables and payables are classified as"due from other funds"
or "due to other funds". Interfund receivables and payables which are not expected to be paid within 12 months are
classified as loans from/loans to other funds.
I. Inventories and Prepaid Items
Inventory, which consists of fuel and auto parts for use in the City's vehicles, is stated at cost (first-in, first-out ,
method). Expenditures are recognized as the fuel and auto parts are consumed rather when purchased. Certain
payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in
both the government-wide and fund financial statements. The cost of prepaid items is recorded as
expenditures/expenses when consumed rather than when purchased.
J. Restricted Assets
Certain proceeds of the Water and Sewer Enterprise Fund revenue bonds and 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. Certain resources are also set aside for repayment of Pearland Economic Development Corporation Bonds
and are reported as restricted assets.
K. Capital Assets
Capital assets which include property, plant, equipment and infrastructure, are reported in the applicable
governmental or business-type activities columns in the government-wide fmancial statements. The City defines
capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life of three
years or more. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed.
Donated capital assets are recorded at acquisition 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.
39
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 1 -Summary of Significant Accounting Policies (continued)
L. Capital Assets(continued)
Property,plant,and equipment are depreciated using the straight-line method over the following useful lives:
Asset Years
Buildings and improvements 10-45
Machinery and equipment 3-15
Infrastructure 10-50
Intangible Assets-Water Rights 25
M. Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation,sick and holiday pay benefits.
Employees hired prior to October 1, 2005 earn vacation leave at the rate of 15 days per year from 1 to 15 years of
service, 20 days per year for service of 16 to 19 years, and 25 days per year for service of 20 years or more.
Employees,who are non-exempt and are hired after October 1, 2005 earn vacation at a rate of 10 days per year from
1-4 years of service, 15 days per year for 5-14 years of service and 20 days for 15 and over years of service.
Employees,who are exempt and are hired after October 1,2005 earn vacation at a rate of 15 days per year from 1-14
years of service,and 20 days for 15 and over years of service.Certified police personnel earn 15 days of vacation after
1 year and 20 days of vacation after 15 years.Effective October 1,2011 certified fire fighter personnel earn 168 hours
of vacation from 1-4 years,241 hours of vacation for 5-14 years and 312 hours after 15 years.Employees are required
to use their vacation in the year it is earned. Employees may carry over a maximum of 40 (48 for certified shift Fire
employees)hours of vacation a year.
City employees receive 10 paid holidays per year. In addition to providing paid time off for the City-observed
holidays, the City permits regular full-time employees to take up to two (2)paid personal days (designated holidays)
annually. Employees required to work on a City-observed holiday may be paid or may elect to receive compensatory
time off for the holiday. Overtime is earned at one and one-half times the regular rate of pay for non-exempt
employees. Employees may be paid or receive compensatory time. The maximum accrual for Compensatory Time is
120 hours,including employees involved in public safety.
All sick leave benefits are accumulated and paid to employees upon separation from the City not to exceed 720 hours
for employees hired prior to July 24, 2006, and 360 hours for employees hired after. Vacation, sick and holiday pay
benefits are 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.
N. Estimates
The preparation of financial statements, in conformity with generally accepted accounting principles, requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues
and expenditures during the reporting period.Actual results could differ from those estimates.
40
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 1 -Summary of Significant Accounting Policies(continued)
N.Comparative Data and Reclassifications
Comparative data for the prior year have been presented in certain sections of the accompanying financial
statements in order to provide an understanding of changes in the City's financial position and operations. Also,
certain amounts presented in the prior year data have been reclassified in order to be consistent with the current
year's presentation.
O.Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of resources, represents a
consumption of net position or fund balance that applies to a future period(s) and thus, will not be recognized as
an outflow of resources (expense/expenditure)until then. The City has only two items that qualify for reporting in
this category.
• Deferred outflows of resources for refunding - Reported in the government-wide statement of net
position, this deferred charge on refunding results from the difference in the carrying value of refunded
debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the
refunded or refunding debt.
• Deferred outflows of resources for pension—Reported in the government-wide financial statement of net
position, this deferred outflow results from pension plan contributions made after the measurement date
of the net pension liability and the results of 1) differences between projected and actual earnings on
pension plan investments; 2) changes in actuarial assumptions; 3) differences between expected and
actual actuarial experiences and 4) changes in the City's proportional share of pension liabilities. The
deferred outflows of resources related to pensions resulting from City contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the next fiscal year. The
deferred outflows resulting from differences between projected and actual earnings on pension plan
investments will be amortized over a closed five year period. The remaining pension related deferred
outflows will be amortized over the expected remaining service lives of all employees(active and inactive
employees)that are provided with pensions through the pension plan.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred
inflows of resources. This separate financial statement element, deferred inflows of resources, represents an
acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an
inflow of resources (revenue) until that time. The City has only two items that qualify for reporting in this
category.
• Deferred inflows of resources for unavailable revenues — Reported only in the governmental funds
balance sheet, unavailable revenues arise under the modified accrual basis of accounting. These amounts
are deferred and recognized as an inflow of resources in the period that the amounts become available.
• Deferred inflows of resources for pension—Reported in the government wide financial statement of net
position, these deferred inflows result primarily from changes in actuarial assumptions. These pension
related deferred inflows will be amortized over the expected remaining service lives of all employees
(active and inactive employees)that are provided with pensions through the pension plan.
41
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 1 -Summary of Significant Accounting Policies(continued)
P.Pensions
For purposes of measuring the net pension liability, pension related deferred outflows and inflows of resources,
and pension expense, City specific information about its Fiduciary Net Position in the Texas Municipal
Retirement System (TMRS) and additions to/deductions from the City's Fiduciary Net Position have been
determined on the same basis as they are reported by TMRS. For this purpose, plan contributions are recognized
in the period that compensation is reported for the employee,which is when contributions are legally due. Benefit
payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are
reported at fair value. Information regarding the City's Total Pension Liability is obtained from TMRS through a
report prepared for the City by TMRS consulting actuary, Gabriel Roeder Smith&Company, in compliance with
Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for
Pensions, as superseded by GASB Statement No. 71.
Q.New Accounting Standards
In the current fiscal year,the City implemented the following new standards:
• GASB Statement No. 77, Tax Abatement Disclosures, applies to financial reports of all state and local
governmental entities, addresses the reduction of tax revenues resulting from an agreement between a
government and an individual in which the government forgoes tax revenues and the individual promises
to take specific action as a result of the agreement that contributes to the economic development to benefit
the government or citizens of the government, and relates to agreements entered into by the reporting
government or agreements entered into by other governments that reduce the reporting government's tax
revenues. The City has tax abatement agreements in place that are expected to be applied in future years
however there were no actual tax abatements requiring disclosure applied in FY17.
• GASB Statement No. 82,Pension Issues-An amendment of GASB Statements No. 67,No. 68 and No. 73,
addresses the presentation of payroll-related measures in required supplementary information, selection of
assumptions and the treatment of deviations from the guidance in an actuarial standard of practice for
financial reporting purposes, and the classification of payments made by employers to satisfy employee
contribution requirements.
Note 2-Deposits(Cash)and Investments
Authorization for Deposits and Investments
The Texas Public Funds Investment Act (PFIA), as prescribed in Chapter 2256 of the Texas Government Code,
regulates deposits and investment transactions of the City.
In accordance with applicable statutes,the City has a depository contract with an area bank(depository)providing
for interest rates to be earned on deposited funds and for banking charges the City incurs for banking services
received. The City may place funds with the depository in interest and non-interest bearing accounts. State law
provides that collateral pledged as security for bank deposits must have a market value of not less than the amount
of the deposits and must consist of: (1) obligations of the United States or its agencies and instrumentalities; (2)
direct obligations of the State of Texas or its agencies; (3) other obligations, the principal and interest on which
are unconditionally guaranteed or insured by the State of Texas; and/or (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. City
policy requires the collateralization level to be at least 102%of market value of principal and accrued interest.
42
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 2-Deposits(Cash)and Investments(continued)
Authorization for Deposits and Investments(continued)
The Council has adopted a written investment policy regarding the investment of City funds as required by the
Public Funds Investment Act (Chapter 2256, Texas Government Code). The investments of the City are in
compliance with the City's investment policy. The City's investment policy is more restrictive than the PFIA
requires. It is the City's policy to restrict its direct investments to obligations of the U.S. Government or U.S.
Government Agencies, obligations of states, counties, and cities, fully collateralized certificates of deposit,
bankers' acceptances, mutual funds, repurchase agreements and local government investment pools. The
maximum maturity allowed is five years from date of purchase. The City's investment policy does not allow
investments in collateralized mortgage obligations.
Deposit and Investment Amounts
The City's cash and investments are classified as: cash and cash equivalents, investments, and restricted cash and
investments. The cash and cash equivalents include cash on hand, deposits with financial institutions, and short-
term investments,which have maturities at purchase of less than three months,consisting mainly of certificates of
deposit. The restricted cash and investments are assets restricted for specific use. The restricted cash and
investments include cash on deposit with financial institutions. For better management of cash, the City pools the
cash, based on the City's needs, into either bank/sweep accounts, or in longer-term investments in U.S.
Government Securities. However, each fund's balance of cash and investments is maintained in the books of the
City.
The deposit and investment policies for the Pearland Economic Development Corporation, TIRZ No. 2 and
Development Authority of Pearland are substantially the same as the City.
The following schedule shows the City's recorded cash and investments at year-end:
Total Fair Value
Cash deposits $ 93,202,445
Temporary Investments
Texas CLASS 80,074,175
TexSTAR 13,851,606
FAMC discount note 10,003,874
FFCB discount note 3,006,895
FHLB discount note 3,993,171
FHLMC discount note 4,962,900
FNMA discount note 6,001,019
Certificates of deposit 29,974,148
$ 245,070,233
At September 30, 2017, the City reported cash deposits in the amount of$95,138,250. The entire amount was
covered by federal depository insurance and by pledged collateral held by the City's agent in the City's name.
43
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 2-Deposits(Cash)and Investments(continued)
Quoted market prices are the basis of the fair value for U.S. Treasury and Agency securities. The amount of
increase or decrease in the fair value of investments during the current year is included in the City's investment
income as follows:
Total Fair Value
Interest income $ 1,596,349
Unrealized gain(loss)on
temporary investments (577,697)
Investment earnings $ 1,018,652
The City's investments' fair value measurements are as follows at September 30,2017:
Fair Value Measurement Using
Investments Fair Value Level 1 Inputs Level 2 Inputs Level 3 Inputs
U.S Agency Securities $ 27,967,859 $ $ 27,967,859 $
Certificates of deposit 29,974,148 29,974,148
Interest Rate Risk
At year-end, the City had the following investments subject to interest rate risk disclosure, under U.S. generally
accepted accounting principles:
Weighted Average
Total Fair Value Maturity(days)
Temporary Investments
Texas CLASS $ 80,074,175 54
TexSTAR 13,851,606 27
FAMC discount note 10,003,874 283
FFCB discount note 3,006,895 31
FHLB discount note 3,993,171 75
FHLMC discount note 4,962,900 130
FNMA discount note 6,001,019 83
Certificates of deposit 29,974,148 662
$ 1513867,788
Portfolio weighted average maturity 190
The City's investment policy specifies a maximum weighted average maturity for the portfolio of 900 days or 30
months based on the stated maturity date of the investments. When including cash investments the weighted
average maturity for the City is 99 days.
To the extent possible, the City attempts to match investments with anticipated cash flow requirements. The City
does not directly invest in securities with a stated maturity date more than five years or 1,825 days from date of
purchase. The settlement date is considered the date of purchase.
44
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 2-Deposits(Cash) and Investments (continued)
Concentration of Credit Risk
With the exception of U.S. Treasury Securities and interest-bearing checking accounts that are fully collateralized,
no more than 75 percent of the City's total investment portfolio will be invested in a single security type. As of
September 30, 2017, the City had investments in U.S. Agency securities that exceeded five percent of the total
investment portfolio at year-end.
Percentage of
Total Investment
Investment Type Total Fair Value Portfolio
Texas CLASS $ 80,074,175 53%
TexSTAR 13,851,606 9%
FAMC discount note 10,003,874 6%
FFCB discount note 3,006,895 2%
FHLB discount note 3,993,171 3%
FHLMC discount note 4,962,900 3%
FNMA discount note 6,001,019 4%
Certificates of deposit 29,974,148 20%
Total $ 151,867,788 100%
Credit Risk
Federal National Mortgage Association, Federal Home Loan Bank, Federal Home Loan Mortgage Corporation,
Federal Farm Credit Bank and the Federal National Mortgage Association Discount Notes were rated AA+ by
Standard&Poor's,AAA by Fitch Ratings,and Aaa by Moody's Investors Service.
All credit ratings meet acceptable levels required by guidelines prescribed by both the PFIA and the City's
investment policy. A public fund investment pool must be continuously rated no lower than AAA or AAAm or
no lower than investment grade by at least one nationally-recognized rating service and have a weighted average
maturity no greater than 90 days. Investments with minimum required ratings do not qualify as authorized
investments during the period the investment does not have the minimum rating.
In accordance with GASB Statement No. 79, Certain External Investment Pools and Pool Participants, the Local
Government Investment Pools do not have any limitations and restrictions on withdrawals such as notice periods
or maximum transaction amounts. These pools do not impose any liquidity fees or redemption gates.
Restricted Assets
The Enterprise Funds have restricted certain cash and investments for customer deposits, reserve and emergency
expenses, capital improvements, cash restricted for others, and revenue bond debt service. Because of certain bond
covenants, the Enterprise Funds are required to maintain prescribed amounts of resources that can be used only to
service outstanding debt. Some of the proceeds from debt or from funds received from acquisition of Municipal Utility
Districts are restricted for use on capital projects.
Revenue bond debt service $ 3,796,725
Customer deposits 3,648,544
Capital improvements 94,165,723
Total $ 101,610,992
45
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 3-Receivables
Receivables at September 30,2017,consisted of the following:
Primary Government:
Governmental Funds:
Non-major
Debt Service Capital Governmental
General Fund Fund Projects Fund Funds Total
Receivables
Property taxes, including
penalties and interest $ 599,138 $ 1,023,249 $ $ $ 1,622,387
Lease receivable 8,351,463 8,351,463
Sales and other taxes 4,867,930 2,117,591 ,6,985,521
Interest 34,524 3,589 17,101 44,017 99,231
Other 908,398 4,372,877 3,263,032 8,544,307
Allowance for
uncollectibles (10,074) (17,182) _ (27,256)
$ 6,399,916 $ 9,361,119 $ 4,389,978 $ 5,424,640 $ 25,575,653
Proprietary Funds:
Governmental
Business-type Activities-Enterprise Funds Activities-
Water and Solid Waste Internal Service
Sewer Fund Fund Total Fund
Receivables
Customer accounts $ 4,950,345 $ 785,955 $ 5,736,300 $
Interest 46,406 46,406
Other 35,931 35,931 14,295
Allowance for
uncollectibles (98,472) (18,054) (116,526)
$ 4,934,210 $ 767,901 $ 5,702,111 $ 14,295
Governmental funds report receivables for revenues that are not considered to be available to liquidate liabilities of
the current period.At the end of the current fiscal year,the various components of unavailable and unearned revenue
reported in the governmental funds were as follows:
Unavailable Unearned
Delinquent property taxes receivable -general fund $ 549,180 $
Delinquent property taxes receivable - debt service fund 918,057
Lease revenues-principal 6,826,970
Street assessments 1,486,878
Other 3,678,590
Lease interest revenues 1,524,493
Grants and revenues prior to meeting all eligibility requirements 548,195
Total $ 13,459,675 $ 2,072,688
46
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 3-Receivables
Property Taxes
Property taxes are levied by October 1 in conformity with Subtitle E, Texas Property Tax Code. Taxes are due on
receipt of the tax bill and are delinquent if not paid before February 1 of the year following the year in which imposed.
On January 1 of each year, a tax lien attaches to property to secure the payment of all taxes, penalties, and interest
ultimately imposed. The Central Appraisal District ("CAD") of Brazoria County, Harris County, and Fort Bend
County, Texas, establishes appraised values. Taxes are levied by the City Council based on the appraised values and
operating needs of the City. The City contracts billing and collection of tax levies with the Brazoria County Tax
Assessor-Collector.
Note 4 -Capital Assets
A summary of changes in the primary government's capital assets for the year ended September 30,2017,follows:
Balance (Decreases) Balance
September 30, and September 30,
2016 Increases Reclassifications 2017
Governmental Activities
Capital assets not being depreciated:
Land $ 31,150,299 $ 58,063 $ (47,193) $ 31,161,169
Construction in progress 49,250,417 38,183,892 (9,727,883) 77,706,426
Total capital assets not being depreciated 80,400,716 38,241,955 (9,775,076) 108,867,595
Other capital assets:
Infrastructure 974,338,150 18,974,050 993,312,200
Buildings and improvements 107,605,211 1,615,038 109,220,249
Machinery and equipment 20,625,973 2,681,071 (383,380) 22,923,664
Furniture and fixtures 6,396,395 1,334,951 7,731,346
Total other capital assets 1,108,965,729 24,605,110 (383,380) 1,133,187,459
Less accumulated depreciation for:
Infrastructure (335,585,811) (31,051,661) (366,637,472)
Buildings and improvements (30,559,547) (3,848,438) (34,407,985)
Machinery and equipment (12,266,341) (2,033,855) 349,483 (13,950,713)
Furniture and fixtures (3,467,181) (756,345) (4,223,52.6)
Total accumulated depreciation (381,878,880) (37,690,299) 349,483 _ (419,219,696)
Other capital assets,net 727,086,849 (13,085,189) (33,897) 713,967,763
Totals $ 807,487,565 $ 25,156,766 $ (9,808,973) $ 822,835,358
47
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 4-Capital Assets (continued)
Balance (Decreases) Balance
September 30, and September 30,
2016 Increases Reclassifications 2017
Business-type Activities
Capital assets not being depreciated:
Land $ 3,796,382 $ $ $ 3,796,382
Construction in progress 19,912,698 34,865,424 (1,439,081) 53,339,041
Total capital assets not being depreciated 23,709,080 34,865,424 (1,439,081) 57,135,423
Other capital assets:
Water and sewer system 344,431,070 3,399,250 347,830,320
Buildings and improvements 31,666,812 601,886 32,268,698
Machinery and equipment 4,830,692 484,737 (43,092) 5,272,337
Furniture and fixtures 120,922 120,922
Contractual water rights 34,511,428 34,511,428
Total other capital assets 415,560,924 4,485,873 (43,092) 420,003,705
Less accumulated depreciation for:
Water and sewer system (110,769,382) (8,468,086) (119,237,468)
Buildings and improvements (6,274,285) (741,345) (7,015,630)
Machinery and equipment (3,255,778) (456,356) 43,092 (3,669,042)
Furniture and fixtures (100,706) (6,981) (107,687)
Contractual water rights (11,425,788) (1,375,068) (12,800,856)
Total accumulated depreciation (131,825,939) (11,047,836) 43,092 (142,830,683)
Other capital assets,net 283,734,985 (6,561,963) 277,173,022
Totals S 307,444,065 $ 28,303,461 S (1,439.081) S 334,308.445
Depreciation was charged to programs as follows:
General government $ 1,455,671
Public safety 2,578,845
Public works 31,018,592
Community services 221,535
Parks and recreation 2,415,656
Total Governmental Activity $ 37,690,299
Water and sewer S 11,047,836
Total Business-Type Activity $ 11,047,836
The City had active construction projects as of September 30, 2017. The projects included various
improvements to streets, drainage and facilities as well as and water and sewer improvements. At year-end, the
City's contractual commitments on projects were as follows:
Remaining
Project Description Contract Total In Progress Commitment
Drainage Improvement $ 13,151,440 $ 4,063,544 $ 9,087,896
Building Improvements 19,834,502 8,256,570 11,577,932
Street Improvement 106,218,111 52,992,999 53,225,112
Park Improvements 22,345,865 12,393,313 9,952,552
Total Governmental Activities 161,549,918 77,706,426 83,843,492
Water and Sewer Improvements 133,550,599 53,339,041 80,211,558
Total Primary Government $ 295,100,517 $ 131,045,467_ $ 164,055,050
48
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 5-Long-Term Debt
A. Governmental Activity Debt
The City issues general obligation bonds and certificates of obligation, and upon annexation and dissolution of
Municipal Utility Districts, assumes unlimited tax and revenue obligations. The assumed obligations were used to
acquire and construct major capital facilities. General obligation bonds, certificates of obligation, and assumed
obligations from dissolved and annexed areas are for both governmental and business-type activities. The bonds are
reported in the Proprietary Funds only if they are expected to be repaid from proprietary revenues. The general long-
term bonds, certificates of obligation and assumed obligations are paid through the Debt Service Fund from tax
revenues.
The City's component units,which are considered blended components units,have revenue bonds used to acquire and
construct.or to reimburse developers for major capital improvements. Revenue bonds are paid through the Pearland
Economic Development Corporation from sales tax and through the Development Authority of Pearland from property
tax increment.
The Tax Increment Contract Revenue Bonds, Series 2016 were issued in November 2016 in the amount of
$12,320,000 to reimburse the developer for infrastructure in the City's Tax Increment Reinvestment Zone #2,
better known as Shadow Creek Ranch. The bonds are due in annual installments ranging from $325,000 to
$1,095,000 through September 1,2029.
The Certificates of Obligation, Series 2017 were issued in September 2017 in the amount of $6,205,000 for
construction and improvements to certain streets and roads within the City including improvements to SH 288
Northbound Frontage Road and the purchase of necessary rights-of-ways; certain improvements to parks and
trails within the City including improvements to Independence Park and the extension of Green Tee Terrace Trail;
certain improvements and renovations to existing City facilities including an expansion of and renovations to the
Tom Reid Library and renovations to the City Hall Complex; construction of Fire Station # 1 on McHard Road
near Pearland Parkway and to pay the costs of issuance of the certificates. The certificates bear interest from 2.00
percent to 4.00 percent and are due in annual installments ranging from $300,000 to $315,000 through March 1,
2037.
The following is a summary of changes in the City's total governmental long-term liabilities for the year ended
September 30, 2017. In general, the City uses the General and Debt Service funds as well as the Economic
Development Corporation and Development Authority to liquidate governmental long-term liabilities.
Balance Balance Amounts Due
September 30, September 30, Within One
2016 Additions (Reductions) 2017 Year
Governmental Activities
Bonds payable:
General obligation bonds $ 262,865,000 $ 86,740,000 $ (66,465,000) $ 283,140,000 $ 12,405,000
Certificates of obligation 50,070,000 6,205,000 (18,770,000) 37,505,000 2,840,000
Sales tax revenue bonds 14,640,000 (890,000) 13,750,000 905,000
Tax increment revenue bonds 76,730,000 12,320,000 (5,585,000) 83,465,000 6,420,000
Unamortized premium/(discount) 18,793,306 10,453,362 (3,414,478) 25,832,190
Total bonds payable 423,098,306 115,718,362 (95,124,478) 443,692,190 22,570,000
Other liabilities:
Obligations under capital leases 4,229,050 (2,390,846) 1,838,204 556,677
Compensated absences 6,182,870 3,547,934 (3,181,582) 6,549,222 1,164,854
Other post-employment benefits 2,754,127 572,358 3,326,485
Total Governmental Activities $ 436,264,353 $ 119,838,654 S (100.696 906) S 455,406,101 S 24,291,531
49
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 5-Long-Term Debt(continued)
A. Governmental Activity Debt(continued)
Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period,
and accordingly, are not reported as fund liabilities in the governmental funds. Interest on long-term debt is not
accrued in governmental funds,but rather is recognized as an expenditure when due.
The full amount estimated to be required for debt service on general obligation debt is provided by(1)the debt service
portion of the tax levy; (2) interest earned in the Debt Service Fund; and (3) transfers from the Water and Sewer
Enterprise Fund. Transfers from the Enterprise Funds are approved at the discretion of City Council and are not
intended to service a specific bond series.
A summary of the terms of general obligation bonds and certificates of obligation,as of September 30,2017„follows:
Original Interest Debt
Series Issue Matures Rate(%) Outstanding
General Obligation Bonds
Permanent Improvement,Series 2008 22,835,000 2032 4.50-5.50 $ 765,000
Permanent Improvement and Refunding Bonds,Series 2009 16,735,000 2034 2.00-5.00 1,660,000
Permanent Improvement,Series 2010A 12,415,000 2035 3.00-4.00 9,855,000
Permanent Improvement Refunding,Series 2010B 1,630,000 2018 2.00-4.00 90,000
Permanent Improvement,Series 2011 5,400,000 2036 2.125-4.125 4,585,000
Permanent Improvement and Refunding Bonds,Series 2012 43,575,000 2029 3.00-5.00 38,310,000
Permanent Improvement Bonds,Series 2013 9,315,000 2038 3.00-5.00 8,145,000
Permanent Improvement and Refunding Bonds,Series 2014 40,410,000 2034 2.00-5.00 37,120,000
Permanent Improvement Refunding Bonds,Series 2015 47,165,000 2032 2.00-5.00 46,845,000
Permanent Improvement Bonds,Series 2015 8,495,000 2035 2.00-4.00 7,645,000
Permanent Improvement Refunding Bonds,Series 2015-A 10,210,000 2029 2.00-3.00 9,105,000
Permanent Improvement Refunding Bonds,Series 2016-A 33,275,000 2036 2.00-5.00 32,455,000
Permanent Improvement Refunding Bonds,Series 2016-B 29,840,000 2031 2.00-5.00 29,270,000
Permanent Improvement and Refunding Bonds,Series 2017 56,900,000 2037 2.00-5.00 56,900,000
Annexed Municipal Utility District Bonds
BC MUD 4 Series 2011 2,640,000 2032 2.50-5.00 390,000
Total General Obligation Bonds $ 283,140,000
Certificates of Obligation
Certificates of Obligation,Series 2007 23;250,000 2032 3.25-5.25 $ 3,285,000
Certificates of Obligation,Series 2008 9,000,000 2032 3.75-5.00 350,000
Certificates of Obligation,Series 2009 8,520,000 2034 2.25-5.00 900,000
Certificates of Obligation,Series 2009A 12,145,000 2029 2.00-4.50 1,915,000
Certificates of Obligation,Series 2011 2,095,000 • 2021 2.09 840,000
Certificates of Obligation,Series 2013 2,745,000 2038 3.00-4.625 2,415,000
Certificates of Obligation,Series 2014 4,625,000 2034 2.00-4.00 3,930,000
Certificates of Obligation,Series 2015 4,860,000 2035 2.00-4.00 4,370,000
Certificates of Obligation,Series 2016 13,995,000 2036 2.00-4.00 13,295,000
Certificates of Obligation,Series 2017 6,205,000 2037 2.00-4.00 6,205,000
Total Certificates of Obligation $ 37,505,000
50
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 5-Long-Term Debt(continued)
A. Governmental Activity Debt(continued)
A summary of the terms of the revenue bonds recorded as long-term liabilities in the Pearland Economic
Development Corporation and Development Authority of Pearland as of September 30,2017,is as follows:
Interest Debt
Series Original Issue Matures Rate(%) Outstanding
Pearland Economic Development Corporation
Sales Tax Revenue Refunding Bonds,Series 2016 $ 14,640,000 2030 2.36 $ 13,750,000
Development Authority of Pearland
Tax Increment Revenue Bonds,Series 2013 9,150,000 2029 3.77 7,590,000
Tax Increment Revenue Bonds,Series 2014 8,060,000 2029 3.00 6,485,000
Tax Increment Revenue Bonds,Series 2015 66,030,000 2029 3.00 57,395,000
Tax Increment Revenue Bonds,Series 2016 12,320,000 2029 2.22 11,995,000
Total Component Unit Long-Term Debt $ 97,215,000
Current Year Refunding
The Permanent Improvement Refunding Bonds, Series 2016B were issued in December 2016 in the amount of
$29,840,000 to refund certain outstanding obligations of the City in the aggregate principal amount of
$32,225,000. The new bonds bear interest from 2.00 percent to 5.00 percent and are due in annual installments
ranging from $570,000 to $3,025,000 through March 1, 2031. The refunding generated a gross savings of$3.5
million and a net present value savings of$2.8 million.Annual savings of approximately$185,500 is seen over 15
years.
The Permanent Improvement and Refunding Bonds, Series 2017 were issued in August 2017 in the amount of
$56,900,000 for construction and improvements to City streets; construction and improvements to the City
drainage system; construction and improvement to City parks; and to refund certain outstanding obligations of the
City in the aggregate principal amount of$37,535,000. The new bonds bear interest from 2.00 percent to 5.00
percent and are due in annual installments ranging from $1,095,000 to $7,205,000 through March 1, 2037. The
refunding portion of the new issue will reduce debt service payments for the City by $5,198,529.59, with an
economic gain of$4,012,785.14 or 10.69%.
51
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 5-Long-Term Debt(continued)
A. Governmental Activity Debt(continued)
Prior Year Refunding
In prior years,the City defeased certain general obligation and other bonds by placing the proceeds of the new bonds
in an irrevocable trust to provide for all future debt service payments on the refunded bonds. Accordingly, the trust
account assets and the liability for the defeased bonds are not included in the City's financial statements. At
September 30, 2017, approximately $64.4 million of previously refunded bonds outstanding were considered
defeased.
General Obligation
CO Series 2008 $7,520,000
PM Series 2008 14,915,000
CO Series 2009 5,985,000
PM Series 2009 12,065,000
CO Series 2009A 5,750,000
UL Tax Bds Series 2011 1,600,000
$47,835,000
Development Authority of Pearland
Series 2009 $ 6,130,000
$ 6,130,000
Water and Sewer System
WSS Series 2009 $ 10,450,000
$ 10,450,000
Total: $64,415,000
Capital Lease Obligations
The City has entered into certain capital lease agreements in order to purchase public safety and management
information systems, equipment and other construction-related equipment. The capital lease obligations are paid out
of the General, Debt Service and Water and Sewer Funds. The historical purchase price of the capital assets under
lease is approximately$7.4 million and entirely classified as machinery and equipment.
Following is a summary of future lease payments due on this equipment:
Fiscal Year Obligations
2018 $ 591,599
2019 542,850
2020 379,616
2021 212,807
2022 125,336
2023 64,433
Total 1,916,641
Less: Interest (78,437)
Obligations under capital leases $ 1,838,204
52
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 5-Long-Term Debt(continued)
A. Governmental Activity Debt(continued)
The annual requirements to amortize governmental activity general obligation bonds and certificates of obligation
outstanding at September 30,2017,were as follows:
Governmental Activities
General Obligation Certificates of Obligation
Fiscal Year Principal Interest Principal Interest
2018 $ 12,405,000 $ 11,482,506 $ 2,840,000 $ 1,094,534
2019 14,995,000 10,939,538 2,935,000 1,021,759
2020 15,650,000 10,381,989 2,750,000 946,621
2021 16,965,000 9,739,770 1,790,000 883,263
2022 17,740,000 9,018,426 1,580,000 842,769
2023 18,385,000 8,230,076 1,575,000 802,806
2024 19,000,000 7,371,070 1,585,000 758,319
2025 19,795,000 6,491,745 1,595,000 708,894
2026 20,410,000 5,606,039 1,595,000 658,544
2027 21,190,000 4,671,770 1,600,000 602,819
2028 21,980,000 3,744,459 1,600,000 549,394
2029 20,995,000 2,875,043 3,350,000 471,919
2030 13,380,000 2,191,383 3,140,000 365,500
2031 15,370,000 1,658,830 1,600,000 287,119
2032 14,630,000 1,093,734 1,605,000 234,941
2033 5,755,000 690,125 1,610,000 183,744
2034 5,860,000 471,297 1,615,000 131,753
2035 3,860,000 283,125 1,385,000 83,216
2036 2,710,000 144,222 1,150,000 42,231
2037 1,575,000 55,663 455,000 15,294
2038 490,000 11,331 150,000 3,469
$ 283,140,000 $ 97,152,141 $ 37,505,000 $ 10,688,908
53
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 5-Long-Term Debt(continued)
A. Governmental Activity Debt(continued)
The annual requirements to amortize blended component unit revenue bonds outstanding at September 30, 2017,
were as follows:
Governmental Activities
Sales Tax Revenue Bonds Tax Increment Revenue Bonds
Fiscal Year Principal Interest Principal Interest
2018 $ 905,000 $ 324,500 $ 6,420,000 $ 2,301,447
2019 930,000 303,142 6,595,000 2,126,753
2020 955,000 281,194 6,215,000 1,947,216
2021 975,000 258,656 6,385,000 1,777,116
2022 1,000,000 235,646 6,560,000 1,602,260
2023 1,025,000 212,046 6,740,000 1,419,934
2024 1,055,000 187,856 6,930,000 1,234,560
2025 1,080,000 162,958 7,120,000 1,043,572
2026 1,105,000 137,470 7,315,000 846,918
2027 1,130,000 111,392 7,520,000 644,461
2028 1,165,000 84,724 7,725,000 435,903
2029 1,195,000 57,230 7,940,000 221,165
2030 1,230,000 29,028
$ 13,750,000 $ 2,385,842 $ 83,465,000 $ 15,601,305
B. Business-type Activity Debt
The Water and Sewer System Revenue Bonds, Series 2017A were issued in March 2017 in the amount of
$10,225,000. The bonds bear interest from 0.00 percent to 1.29 percent and are due in annual installments ranging
from$1,005,000 to$1,055,000 through September 1,2027.
The Water and Sewer System Revenue Bonds, Series 2017B were issued in March 2017 in the amount of
$12,025,000.The bonds bear interest from 0.00 percent to 2.10 percent and are due in annual installments ranging
from$340,000 to$515,000 through September 1, 2047.
The Water and Sewer System Revenue and Refunding Bonds, Series 2017C were issued in August 2017 in the
amount of$60,970,000 for waterworks and sanitary sewer system improvements and to refund certain outstanding
obligations of the City in the aggregate principal amount of$51,490,000.The bonds bear interest from 2.00 percent to
5.00 percent and are due in annual installments ranging from $765,000 to $6,555,000 through September 1, 2037.
The refunding portion of the new issue will reduce debt service payments for the City by $10,781,983.12, with an
economic gain of$9,212,350.64 or 17.89%.
54
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 5-Long-Term Debt(continued)
B. Business-type Activity Debt(continued)
The following is a summary of changes in the City's total business-type long-term liabilities for the year ended
September 30,2017.
Balance Balance Amounts Due
September 30, September 30, Within One
2016 Additions (Reductions) 2017 Year
Business-type Activities
Bonds payable:
Permanent Improvement Bonds $ 9,775,000 $ $ (2,415,000) $ 7,360,000 $ 2,515,000
Water and sewer revenue bonds 173,570,000 83,220,000 (60,590,000) 196,200,000 9,195,000
Unamortized premium/(discount) 850,049 8,775,401 (230,643) 9,394,807
Total bonds payable 184,195,049 91,995,401 (63,235,643) 212,954,807 11,710,000
Other liabilities:
Obligations under capital leases 375,358 11,801 (130,115) 257,044 84,216
Compensated absences 629,113 403,160 (333,089) 699,184 150,054
Other post-employment benefits 497,540 101,004 598,544
Total Business-type Activities S 185,697,060 $ 92,511,366 $ 63,698,847) $ 214,509,579 _$ 11,944.270
The business-type activity long-term debt will be repaid,plus accrued interest, from operating revenues of the Water
and Sewer Fund. The City is required by the applicable revenue bond indentures to pledge the net revenues of the
Water and Sewer Fund for the retirement of its outstanding revenue bonds,including interest thereon. Revenue bonds
and refunding bonds are payable solely from and, equally secured by, a first lien on and pledge of the net revenue of
the City's Water and Sewer Fund.
A summary of the terms of revenue bonds and permanent improvement bonds recorded in the Enterprise Funds as of
September 30,2017,is as follows:
Interest Debt
Series Original Issue Matures Rate(%) Outstanding
Water and Wastewater Fund
Water and Sewer System Adjustable Rate Revenue Bonds,
Series 1999 $ 8,000,000 2020 4.41-4.60 $ 1,760,000
Water and Sewer System Revenue and Refunding Bonds,
Series 2007 40,135,000 2031 3.50-5.50 11,390,000
Permanent Improvement and Refunding Bonds,Series 2009 11,660,000 2018 2.00-5.00 2,155,000
Water and Sewer System Revenue Bonds,Series 2010A 14,040,000 2035 1.75-4.50 11,265,000
Water and Sewer System Refunding Bonds,Series 2010B 8,970,000 2023 1.75-4.00 6,765,000
Permanent Improvement and Refunding Bonds,Series 2012 6,230,000 2025 3.00-5.00 5,205,000
Water and Sewer System Revenue Bonds,Series 2012 8,670,000 2037 2.00-3.625 6,605,000
Water and Sewer System Revenue Bonds,Series 2014 9,210,000 2039 2.00-4.00 8,655,000
Water and Sewer System Revenue Bonds,Series 2016A 8,880,000 2036 2.00-4.00 8,435,000
Water and Sewer System Revenue Bonds,Series 2016B 11,100,000 2025 2.00-4.00 9,865,000
Water and Sewer System Revenue Bonds,Series 2016C 50,100,000 2045 2.00-4.00 48,240,000
Water and Sewer System Revenue Bonds,Series 2017A 10,225,000 2027 0.00-1.29 10,225,000
Water and Sewer System Revenue Bonds,Series 2017B 12,025,000 2047 0.00-2.10 12,025,000
Water and Sewer System Revenue Bonds,Series 2017C 60,970,000 2037 ' 2.00-5.00 60,970,000
Total Utility System Fund $ 203,560,000
55
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 5 -Long-Term Debt(continued)
B. Business-type Activity Debt(continued)
The annual requirements to amortize Enterprise Fund revenue bonds and permanent improvement bonds outstanding
at September 30,2017,were as follows:
Business-Type Activities
Revenue Bonds Permanent Improvement Bonds
Fiscal Year Principal Interest Principal Interest
2018 $ 9,195,000 $ 5,129,040 $ 2,515,000 $ 232,188
2019 9,385,000 4,895,524 365,000 171,700
2020 9,545,000 4,700,614 370,000 157,000
2021 9,765,000 4,488,344 370,000 142,200
2022 9,850,000 4,261,669 385,000 127,100
2023 10,685,000 4,021,672 395,000 111,500
2024 9,870,000 3,736,431 1,480,000 74,000
2025 10,150,000 3,467,150 1,480,000 22,200
2026 10,660,000 3,178,682
2027 10,980,000 2,793,686
2028 10,260,000 2,393,056
2029 10,610,000 2,194,997
2030 10,895,000 1,862,497
2031 9,685,000 1,549,726
2032 7,180,000 1,269,356
2033 7,350,000 1,050,172
2034 7,530,000 822,921
2035 5,010,000 616,149
2036 4,215,000 479,844
2037 3,825,000 379,060
2038 2,735,000 289,345
2039 2,775,000 241,091
2040 2,145,000 191,084
2041 2,155,000 163,861
2042 2,165,000 136,219
2043 2,175,000 108,156
2044 2,185,000 79,671
2045 2,200,000 50,762
2046 505,000 21,370
2047 515,000 10,815
$ 196,200,000 $ 54,582,964 $ 7,360,000 $ 1,037,888
C. Legal Compliance
Long-term debt assumed by the City upon dissolution of annexed municipal utility district in fiscal years 2006,2007,
and 2013 has been recorded as part of the City's long-term debt. A portion of the assumed debt is related to assets
recorded in the Water and Sewer Fund. Even though the debt is related to assets recorded in the Water and Sewer
Fund,the debt is considered general obligation debt based on Texas law.
56
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 6-Interfund Transactions
A summary of interfund transfers, the purpose of which is to cover operational expenses/expenditures, for the year
ended September 30,2017,is as follows:
Transfers In Transfers Out
General Fund $ 3,791,394 $ 2,008,856
Debt Service Fund 572,961
Capital Projects Fund 10,192,660 1,780,957
Tax Increment Reinvestment Zone#2 14,039,117
Development Authority of Pearland 14,039,117
Non-major Governmental Funds 9,161,523
Water and Sewer Fund 915,140 3,331,813
Internal Service Fund 1,310,994 500,000
$ 30,822,266 $ 30,822,266
A summary of interfund receivables and payables at September 30,2017, follows:
Receivable Fund Payable Fund Amount Purpose
General Fund Non-major Governmental Funds $ 246,785 Short term loan
Capital Projects Fund General Fund 2,350,186 Short term loan
Water and Sewer Fund Solid Waste Fund 308,106
S 2,905,077
Note 7-Fund Balance/Net Position
Encumbrances
Encumbrance accounting is employed as an extension of formal budgetary integration for the General Fund,
special revenue funds, and capital projects funds. Certain amounts which were classified as restricted, committed,
or assigned for specific purposes have been encumbered in the governmental funds. Significant encumbrances, for
the specific purpose of capital improvements,included in governmental fund balances are as follows:
Encumbrances
General Fund- assigned $ 3,000,482
Capital Projects Fund-restricted 24,756,104
Non-major Funds -restricted 784,958
$ 28,541,544
Note 8-Deferred Compensation Plan
The City maintains, for its employees, a tax-deferred compensation plan meeting the requirements of Internal
Revenue Code Section 457. The plan was established in the 1995 fiscal year by City Ordinance, and ICMA
Retirement Corporation is the plan administrator. The deferred compensation is not available to employees until
termination, retirement, death, or unforeseen emergency. The plan's trust arrangements are established to protect
deferred compensation amounts of employees under the plan from any other use other than intended under the plan
(eventual payment to employees deferring the compensation) in accordance with federal tax laws. Amounts of
compensation deferred by employees under plan provisions are disbursed bi-weekly by the City to a third-party
administrator. The third-party administrator handles all funds in the plan and makes investment decisions and
disburses funds to employees in accordance with plan provisions.
57
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 9-Employee Retirement System
Texas Municipal Retirement System
Plan Description and Provisions
The City participates as one of 872 plans in the nontraditional,joint contributory, hybrid defined benefit pension
plan administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency created by the State
of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the
TMRS Act) as an agent multiple-employer retirement system for municipal employees in the State of Texas. The
TMRS Act places the general administration and management of the System with a six-member Board of
Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not
fiscally dependent on the State of Texas. TMRS's defined benefit pension plan is a tax-qualified plan under
Section 401 (a) of the Internal Revenue Code. TMRS issues a publicly available comprehensive annual fmancial
report(CAFR)that can be obtained at www.tmrs.com.
•
All eligible employees of the city are required to participate in TMRS.
Benefits Provided
TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body
of the City,within the options available in the state statutes governing TMRS.
At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the city-
financed monetary credits with interest were used to purchase an annuity. Members may choose to receive their
retirement benefit in one of seven actuarially equivalent payments options. Members may also choose to receive a
portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments,
which cannot exceed 75%of the member's deposits and interest.
At the date the plan began, the City granted monetary credits for service rendered before the plan began of a
theoretical amount equal to two times what would have been contributed by the employee, with interest, prior to
establishment of the plan. Monetary credits for service since the plan began are 200% of the employee's
accumulated contributions.
A summary of plan provisions for the City are as follows:
Employee deposit rate: 7%
Matching ratio(city to employee): 2 to 1
Years required for vesting: 5
Service retirement eligibility: 20 years at any age, 5 years at age 60 and above
Updated service credit: 100%repeating
Annuity increase to retirees: 70%of CPI repeating
Supplemental death benefit—employees
and retirees: Yes
The City does not participate in Social Security.
58
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 9-Employee Retirement System(continued)
At the December 31, 2016 valuation and measurement date,the following employees were covered by the benefit
terms:
Retirees or beneficiaries currently receiving benefits: 188
Inactive employees entitled to but not yet receiving benefits: 268
Active employees: 647
Total: 11
Contributions
The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and the city
matching percentages are either 100%, 150%, or 200%,both as adopted by the governing body of the city. Under
the state law governing TMRS, the contribution rate for each city is determined annually by the consulting
actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the
estimated amount necessary to fmance the cost of benefits earned by employees during the year, with an
additional amount to finance any unfunded accrued liability.
Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal year. For
fiscal year 2017, the City's contribution rate was 13.37% for the months in 2016 and 13.61% for the months in
2017.
Note 9 -Employee Retirement System (continued)
Net Pension Liability
The City's Net Pension Liability (NPL)was measured as of December 31, 2016, and the Total Pension Liability
(TPL)used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date.
Actuarial Assumptions
The Total Pension Liability in the December 31,2016 actuarial valuation was determined using the following
actuarial assumptions:
Inflation: 2.5%per year
Overall payroll growth: 3.0%per year
Investment Rate of Return: 6.75%,net of pension plan investment expense, including inflation
Salary increases were based on a service-related table. Mortality rates for active members, retirees, and
beneficiaries were based on the gender-distinct RP2000 Combined Healthy Mortality Table, with male rates
multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis by
scale BB to account for future mortality improvements. For disabled annuitants, the gender-distinct RP2000
Disabled Retiree Mortality Table is used,with slight adjustments.
These actuarial assumptions were developed primarily from the actuarial investigation of the experience of TMRS
over the four year period from December 31, 2010 to December 31, 2014. They were adopted in 2015 and first
used in the December 31, 2015 actuarial valuation. The post-retirement mortality assumption for healthy
annuitants and Annuity Purchase Rate (APRs) are based on the Mortality Experience Investigation Study
covering 2009 through 2011 and dated December 31, 2013. In conjunction with these changes first used in the
December 31, 2013 valuation, the System adopted the Entry Age Normal actuarial cost method and a one-time
change to the amortization policy. Assumptions are reviewed annually. No additional changes were made for the
2015 valuation.
59
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 9-Employee Retirement System (continued)
Actuarial Assumptions(continued)
• The long-term expected rate of return on pension plan investments is 6.75%. The pension plan's policy in regard
to the allocation of invested assets is established and may be amended by the TMRS Board of Trustees. Plan
assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production
of income, in order to satisfy the short-term and long-term funding needs of TMRS.
The long-term expected rate of return on pension plan investments was determined using a building-block method
in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense and inflation)are developed for each major asset class. These ranges are combined to produce
the long-term expected rate of return by weighting the expected future real rates of return by the target asset
allocation percentage and by adding expected inflation.
The target allocation and best estimates of arithmetic real rates of return for each major asset class are
summarized in the following table:
Asset Class Target Allocation
U.S. Equities 17.5%
International Equities 17.5%
Core Fixed Income 10.0%
Non-Core Fixed Income 20.0%
Real Estate 10.0%
Real Return 10.0%
Absolute Return 10.0%
Private Equity 5.0%
Total 100.0%
Discount Rate
The discount rate used to measure the Total Pension Liability was 6.75%. The projection of cash flows used to
determine the discount rate assumed that employee contributions will remain at the current 7% and employer
contributions will be made at the rates specified in statute. Based on that assumption,the pension plan's Fiduciary
Net Position was projected to be available to make all projected future benefit payments of current plan members.
Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of
projected benefit payments to determine the Total Pension Liability.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 9-Employee Retirement System(continued)
Changes in the Net Pension Liability
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(a) (b) (a)-(b)
Balance at 12/31/2015 $119,050,823 $ 95,511,165 $23,539,658
Changes for the year:
Service cost 6,756,543 6,756,543
Interest 8,166,924 8,166,924
Difference between
expected
and actual experience 1,159,738 1,159,738
Changes in assumptions
Contributions-employer 5,253,253 (5,253,253)
Contributions-employee 2,749,756 (2,749,756)
Net investment income 6,458,752 (6,458,752)
Benefit payments,
including refunds,
of employee
contributions (2,875,256) (2,875,256)
Administrative expense (72,899) 72,899
Other charges (3,927) 3,927
Net changes 13,207,949 11,509,679 1,698,270
Balance at 12/31/2016 $132,258,772 S 107,020,844 $25,237,928 .
The following presents the net pension liability of the City, calculated using the discount rate of 6.75%,as well as
what the City's net pension liability would be if it were calculated using a discount rate that is 1-percentage-point
lower(5.75%)or 1-percentage-point higher(7.75%)than the current rate:
Current
Single Rate
1%Decrease Assumption 1%Increase
to 5.75% 6.75% to 7.75%
City's net pension liability $47,943,456 $25,237,928 $ 7,020,074
Pension Plan Fiduciary Net Position
Detailed information about the pension plan's Fiduciary Net Position is available in a separately-issued TMRS
financial report. That report may be obtained on the Internet at www.tmrs.com.
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NOTES TO FINANCIAL STATEMENTS(continued)
Note 9-Employee Retirement System(continued)
Pension Expense and Deferred Outflows of Resources Related to Pensions
For the year ended September 30,2017,the City recognized pension expense of$7,622,743.
At September 30, 2017, the City reported deferred outflows and inflows of resources related to pensions from the
following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between actuarial assumptions
and actual experience $ 1,613,330 $
Changes in actuarial assumptions used 196,345
Differences between projected
and actual investment earnings 4,198,361
Contributions subsequent to
the measurement date 4,609,930
Total $ 10,421,621 $ 196,345
Deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement
date of$4,609,930 will be recognized as a reduction of the net pension liability for the measurement year ending
December 31, 2017 (i.e. recognized in the city's financial statements September 30, 2018). Other amounts
reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense
as follows:
Net Deferred
Outflows (Inflows) of
Resources
2018 $ 1,818,578
2019 1,818,579
2020 1,599,879
2021 267,163
2022 111,147
Total $ 5,615,346
Supplemental Death Benefits Fund
The City also participates in the cost sharing multiple-employer defined benefit group-term life insurance plan
operated by the Texas Municipal Retirement System (TMRS) known as the Supplemental Death Benefits Fund
(SDBF). The City elected,by ordinance,to provide group-term life insurance coverage to both current and retired
employees. The city may terminate coverage under and discontinue participation in the SDBF by adopting an
ordinance before November 1 of any year to be effective the following January 1.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 9-Employee Retirement System(continued)
Supplemental Death Benefits Fund(continued)
The death benefit for active employees provides a lump-sum payment approximately equal to the employee's
annual salary (calculated based on the employee's actual earnings, for the 12-month period preceding the month
of death);retired employees are insured for$7,500;this coverage is an"other postemployment benefit,"or OPEB.
Plan Year 2016 Plan Year 2017
The City offers supplemental death to:
Active employees Yes Yes
Retirees Yes Yes
The City contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation.
The rate is equal to the cost of providing one-year term life insurance. The funding policy for the SDBF program
is to assure that adequate resources are available to meet all death benefit payments for the upcoming year; the
intent is not to pre-fund retiree term life insurance during employees' entire careers.
The city's contributions to the TMRS SDBF for the fiscal years ended 2017, 2016, and 2015 were $52,444,
$47,480,and$41,740,respectively,which equaled the required contributions each year.
Schedule of Contribution Rates
(Retiree-only portion of the rate, for OPEB)
Annual Required Actual
Plan/Calendar Contribution Contribution Percentage of
Year (Rate) Made(Rate) ARC Contributed
2015 0.01% 0.01% 100%
2016 0.01% 0.01% 100%
2017 0.01% 0.01% 100%
Note 10-Other Post-Employment Benefits
In addition to pension benefits, the City provides access to medical, dental, and vision coverage through its selected
insurance carrier, to retirees and/or retiree dependents. The City's other post-employment benefit plan is a single-
employer plan. To qualify for retiree's medical or dental insurance, the retiree must have a minimum of ten years of
continuous service with the City and be at least sixty years of age, or with 20 years of continuous service at any age.
The City provides the coverage on a pay-as-you-go basis similar to current employees,but the City does not pay any
portion of the retiree premium. Therefore, there is an implicit subsidy due to the blended rate paid by the retirees,
but there is no direct liability due from the City as it does not pay any portion of the retiree's costs.
The costs of providing these benefits and number of retired employees are as follows:
Emp/Dep Number
Total City's Coverage of Retired
Cost Cost Cost Employees
$ 77,369 $ $ 77,369 17
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NOTES TO FINANCIAL STATEMENTS(continued)
Note 10-Other Post-Employment Benefits(continued)
Retirees who are entitled to receive retirement benefits under the City's retirement plan may purchase continued
health benefits coverage for the retiree and the retiree's dependents,but shall pay 100%of the premium for coverage.
The retiree, however, is able to receive a lower rate by participating in the City's plan as opposed to individually
purchasing health insurance. The City's coverage is secondary to Medicare when the person becomes eligible for
these benefits.
The Governmental Accounting Standards Board published a guideline regarding accounting and financial reporting
by employers for post-employment benefits other than pensions. This document gives guidance regarding the
methods and timing for reporting. The effect of the Guideline is to cause the cost of retiree benefits to be accrued for
during the working lifetime of the employees. This requires pre-funding or accruing of a liability. The City has elected
to accrue the liability, and the unfunded liability will be funded over a period of 30 years. The results of the City's
most recent actuarial valuation are as follows:
Unfunded
Actuarial (UAAL)as a
Actuarial Actuarial Accrued Annual Percentage of
Valuation Date Actuarial Accrued Percentage Liability Covered Covered
October 1, Value of Assets Liabilities Funded (UAAL) Payroll Payroll
2016 $ $ 4,824,065 0% $ 4,824,065 $ 34,733,537 13.9%
Net OPEB obligations at year-end for the last three fiscal years are as follows:
2015 2016 2017
Normal cost $ 387,019 $ 387,019 $ 435,607
Amortization of UAAL 622,015 247,961 333,819
Annual required contribution(ARC) 1,009,034 634,980 769,426
Interest on prior-year net OPEB obligation 96,677 118,860 130,067
Amortization of prior-year net OPEB obligation
(ARC adjustment) (152,421) (192,316) (225,011)
Annual OPEB cost(expense) 953,290 561,524 674,482
Employer contributions (18,305) (281,359) (1,120)
Increase in net OPEB obligation 934,985 280,165 673,362
Net OPEB obligation-beginning of year 2,036,517 _ 2,971,502 3,251,667
Net OPEB obligation-end of year $ 2,971,502 $ 3,251,667 $ 3,925,029
Percentage of Annual OPEB Cost Contributed 1.9% 50.1% 0.2%
The annual cost recorded to the general ledger for fiscal year 2017 is $674,482, which includes the estimated
normal cost of$435,607 to provide for the benefits earned by active employees. The total liability, which is not
recorded to the general ledger,is$4,824,065, and represents the actuarial present value of benefits.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 10-Other Post-Employment Benefits(continued)
Actuarial valuations for OPEB plans involve estimates of the value of reported amounts and assumptions about
the probability of events far into the future. Actuarially determined amounts are subject to continual revision as
results are compared to past expectations and new estimates are made about the future. The methods and
assumptions used as of the measurement date of October 1, 2016 include using the projected unit credit actuarial
method, allocation of the total liability into accrued and future liabilities was based upon a straight years of
service ratio, the accrued liability was assumed to be amortized on a closed basis using a level dollar approach
with an amortization period of 24 years, an inflation rate assumption of 2.5%, a discount rate of 4%, and medical
inflation is taken at 9% for pre-Medicare grading down to 5% in the ultimate. Rates of disability were derived
from a Society of Actuaries study. The RP-2014 table(sex distinct)was used for mortality.
Separate, audited GAAP-basis postemployment benefit plan reports are not applicable for the other post-
retirement benefit plan for the City as there are no separately issued plan financial statements.
Note 11 -Commitments and Contingencies
Litigation and Other Contingencies
The City was involved in various lawsuits and arbitration proceedings at September 30, 2017. The City and its legal
counsel believe that any amounts which the City might ultimately be required to pay will not exceed underlying
insurance coverage.
Reimbursements due to Developers/Business Assistance
Pursuant to the Local Government Code,the Economic Development Corporation offers incentives to attract and retain
businesses to Pearland.The following are the current incentives.
Amounts Paid
Original Outstanding
Current Incentives Amount Other Prior Years Current Year Balance
KS Management-Grant $2,663,000 $ $ 591,780 $ 295,890 $ 1,775,330
KS Management-Sales Tax 600,000 48,427 20,576 530,997
Base-Pair(1) 38,500 28,875
Keystone 189,000 189,000
Shale-Inland 490,000 (35,000) 455,000
M&S Logistics 60,000 20,000 10,000 30,000
Brask Neela 70,000 35,000 35,000
Lonza Phase 1 600,000 600,000
Tool Flo 1,152,000 152,000 1,000,000
Lonza Phase 2 450,000 300,000 750,000
Base-Pair 2 60,000 15,000 45,000
$6,372,500 $265,000 $ 724,082 $ 528,466 $5,375,327
(1)No outstanding balance due to project completion.
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NOTES TO FINANCIAL STATEMENTS(continued)
Note 11-Commitments and Contingencies(continued)
Lower Kirby Urban Center Master Plan
On June 10,2013 Pearland adopted a 20/20 Strategic Plan to create a vision for the community's future growth. One of
the strategies was to implement plans to develop the Lower Kirby Urban Center as Pearland's most intensive mixed-
use employment,residential,and entertainment district.The Lower Kirby Master Plan identified$48 million in priority
construction projects that include drainage, water, sewer, streets, traffic, sidewalks, and streetscape necessary to
facilitate development of the area. On March 10, 2014, the City entered into a Master Financing Agreement with
Lower Kirby Pearland Management District and Pearland Municipal Management District which outlines the process
for the City to advance funds to the District(s)in order to facilitate the development. The City will be reimbursed from
the District(s)from bond sales as the area is development and value on the ground. Each project is taken on a case by
case basis and is approved via a Letter of Financing Agreement(LFA).
The following LFA's have been approved by and between the City and the LKMD and the PMMD#1. The City
had receivable balances at September 30,2017 of$1,939,562 relating to these LFA's.
Lower Kirby Pearland
Pearland Municipal
Management Management
3/10/2014 Cost District District#1
Detention Pond $1,900,000 72.3% $ 1,373,700 27.7% $ 526,300
Master Drainage Plan 127,410 72.3% 92,117 27.7% 35,293
Regional Drainage Plan 183,031 72.3% 132,331 27.7% 50,700
Subtotal 1,598,148 612,293
9/29/2014
Hooper Road Reconstruction $1,500,000 100.0% 1,500,000 0.0%
8/10/2015
Kirby Ditch Improvements $1,784,796 100.0% 1,784,796 0.0%
8/24/2015
South Spectrum $ 214,137 55.8% 119,462 44.2% 94,676
Total $ 5,002,406 $ 706,969
City funding for these LFA's is via Reimbursement Agreements with the Pearland Economic Development
Corporation,whereby the City gets reimbursed for the cost of these projects by the Corporation; so that the City is
not actually out any dollars.
Chapter 380 Economic Development Agreements
The City had two sales tax incentive agreements in effect during the current fiscal year with Kelsey-Seybold and
Costco Wholesale Corporation. The City's legal obligations and limitations relating to the sales tax incentive
agreements are outlined by the Texas Local Government Code, Title 12, Subtitle A, Chapter 380, Miscellaneous
Provisions Relating to Municipal Planning and Development.
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City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 11 -Commitments and Contingencies(continued)
Chapter 380 Economic Development Agreements(continued)
Kelsey-Seybold (Kelsey) is a large multi-specialty clinic system located in the Greater Houston area and is
Houston's largest and most renowned private multi-specialty physician group. The Kelsey System is a major
provider of healthcare for NASA and a center for healthcare research. The City of Pearland and Pearland
Economic Development Corporation made certain agreements with Kelsey to relocate its administrative
headquarters to Shadow Creek Ranch in Pearland. The headquarters is located in a four story, 170,000-square-
foot building at the intersection of Shadow Creek Parkway and Kirby Drive. The headquarters had a cost of$36
million, including the costs for equipment, construction, and fees. Construction began in May 2012 and Kelsey
began operations at the site in October 2013.
The City of Pearland and the Pearland Economic Development Corporation(PEDC)each have a 10-year sales tax
incentive agreement with Kelsey that allows Kelsey to receive an incentive of 60% of the sales tax remitted by
Kelsey and its vendors. The agreements with the City and the PEDC require a minimum of 600 jobs to be in place
as an eligibility factor. To date the City and the PEDC have paid$253,116 in sales tax incentives.
Costco Wholesale Corporation is a membership warehouse club that provides a wide selection of merchandise.As
of 2014, it is the second largest retailer in the United States and the third largest in the world, and the largest
membership warehouse club chain in the United States. The City of Pearland agreed to provide Costco incentives
to build a 150,000 square-foot retail warehouse with an attached tire center and free-standing fuel facility. Total
investment was estimated at$33.7M and the project created approximately 75 full-time and 75 part-time jobs.
The agreement with Costco and the City of Pearland is to refund Costco 50%of the 1.0%of sales tax collected by
the City at the business location for a period not to exceed 10 years and an amount not to exceed $750,000.
Costco opened in November 2015,with the first payment made in fiscal year 2016.
Note 12-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; and natural disasters. The City's risk management program mainly
encompasses obtaining property and liability insurance through Texas Municipal League's Intergovernmental
Risk-Pool (TML-IRP), and through commercial insurance carriers. The participation of the City in TML-IRP is
limited to payment of premiums. The City has not had any significant reduction in insurance coverage, and the
amounts of insurance settlements have not exceeded insurance coverage for any of the last three years.
The City also provides Workers' Compensation insurance on its employees through TML-Workers'
Compensation Fund. Workers' Compensation premiums are subject to change when audited by TML Workers'
Compensation Fund. At fiscal year-end September 30, 2017, the City believed the amounts paid on Workers'
Compensation would not change significantly from the amounts recorded.
Note 13 Capital Lease
The City has a 20-year agreement to lease a facility to the University of Houston Clear Lake (UHCL), which
commenced in July 2010. Rent or lease payments are broken into two parts, debt service and operating. For
accounting purposes the City has classified the lease as a direct financing lease. Because this lease is recorded in
a governmental fund, the receivable is deferred and the distinction between a sales and direct financing lease is
not relevant at the fund level.
UHCL has an option to purchase the facility upon the commencement date of July 2010 until the 61' day
preceding the 20th anniversary of the commencement date.
67
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
NOTES TO FINANCIAL STATEMENTS(continued)
Note 13-Capital Lease(continued)
The lease payments related to debt service to be received coincide with debt service payments the City is required
to make on a bond that matures on March 1, 2029. At September 30, 2017, the future minimum debt service lease
payments to be received under the lease are as follows:
Fiscal year ending
September 30, Payment
2018 $ 815,232
2019 794,889
2020 771,557
2021 757,131
2022 737,182
2023-2027 3,360,426
2028-2029 1,181,543
Total $ 8,417,960
Note 14-Subsequent Event
Annexation
The City incorporated an additional 1,898 acres of land into the City limits in November of 2017, in the form of
three areas that were identified as priority annexation areas in the 2015 Comprehensive Plan's Annexation
Phasing. The tracts of land that were brought into the City's corporate boundaries are known as areas A, C and L,
and are comprised of 895 acres just south of Shadow Creek Ranch (Area A), 20 acres adjacent to the Lakes at
Countryplace subdivision north of McHard Road,and 983 acres in the southeast quadrant of the City that includes
the Pearland Regional Airport adjacent to the City of Alvin's ETJ. These areas are now a part of our police patrol
area, are able to receive trash collection services via the City's contract with Waste Management, and residents
can vote in Pearland elections. Code enforcement,animal control and adoption services,health inspections, access
to parks and recreation facilities, and other local public services are available to residents and businesses
throughout these newly annexed areas. The City will continue to pursue the need for capital improvements in
these areas as community conditions and feasibility support them. The City entered into nine (9) Development
Agreements for agricultural land use exemptions from the annexation for a period of five years from the
November 27, 2017 adoption of the annexation ordinances for the three areas incorporated into the City limits.
These nine (9) tracts will not be incorporated into the City limits until those agreements expire, or upon the
property owner engaging in non-conforming improvements or use of their land.
68
City of Pearland FY 2017 CAFR
Required Supplementary Information
69
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
GENERAL FUND
SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN
FUND BALANCES-BUDGET AND ACTUAL
For the year ended September 30,2017
Variance with
Final Budget-
Budgeted Amounts Positive
Adopted Amended Actual (Negative)
Revenues
Property taxes $ 18,502,590 $ 17,887,489 $ 17,910,289 $ 22,800
Sales and use taxes 20,526,818 20,546,818 20,457,029 (89,789)
Franchise fees 6,930,000 7,016,768 6,975,737 (41,031)
Licenses and permits 5,183,180 5,977,255 5,434,918 (542,337)
Fees and forfeitures 2,902,150 2,649,800 2,510,849 (138,951)
Charges for services 16,175,564 15,593,760 15,396,512 (197,248)
Investment earnings 105,000 220,000 71,512 (148,488)
Other 561,153 1,101,249 1,536,934 435,685
Total Revenues 71,086,455 70,993,139 70,293,780 (699,359)
Expenditures
Current:
General government 11,192,642 11,212,620 10,081,096 1,131,524
Public safety 37,902,732 40,030,693 40,660,511 (629,818)
Public works 11,989,386 13,716,519 12,148,861 1,567,658
Community services 3,946,039 4,159,589 4,085,693 73,896
Parks and recreation 6,059,377 6,423,532 6,297,335 126,197
Debt Service:
Principal 429,351 547,305 547,305
Interest and other charges 31,912 44,294 44,294
Capital outlay 3,709,957 5,894,737 4,767,704 1,127,033
Total Expenditures 75,261,396 82,029,289 78,632,799 3,396,490
Excess(deficiency)of revenues
over expenditures (4,174,941) (11,036,150) (8,339,019) 2,697,131
Other Financing Sources(Uses)
Proceeds from capital leases
Transfers in 3,816,038 3,792,394 3,791,394 (1,000)
Transfers out (1,402,789) (1,578,964) (2,008,856) (429,892)
Total Other Financing Sources(Uses) 2,413,249 2,213,430 1,782,538 (430,892)
Net change in fund balances (1,761,692) (8,822,720) (6,556,481) 2,266,239
Fund balances, beginning 20,919,486 20,919,486 20,919,486
Fund balances, ending $ 19,157,794 $ 12,096,766 $ 14,363,005 $ 2,266,239
70
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY BUDGET INFORMATION
Budgetary Compliance
The City has complied with all material budget requirements for the year ended September 30, 2017.
Annual appropriated budgets are adopted for the General, Special Revenue and Debt Service Funds, using the same
basis of accounting as for financial reporting. All annual appropriations lapse at fiscal year-end. Project length
budgets are adopted for the Capital Project Funds. The City, for management control, approves a financial plan for
the Enterprise Fund. City Council approves the annual budget for the Pearland Economic Development Corporation,
which is included in the City's financial reporting entity.
Expenditures may not legally exceed budgeted appropriations at the fund level(i.e. General Fund,Debt Service Fund,
etc.). Expenditure requests, which would require an increase in total budgeted appropriations, must be approved by
City Council through a formal budget amendment. At any time in the fiscal year, the Council may make
emergency appropriations to meet a pressing need for public expenditure in order to protect the public health,
safety, or welfare. The Council has the power to transfer any unencumbered funds allocated by the budget from one
activity, function, or department, to another activity, function, or department, to re-estimate revenues and
expenditures,and to amend the budget.
Because City Council adopts the budget at the fund level, management has the authority to transfer available funds
allocated by the budget from one function/department or activity to another function or activity within the same
department. In cooperation with the directors and department heads of the City,the Budget Officer, the Director of
Finance and the City Manager prepare an annual budget for the General Fund, Special Revenue Funds and Debt
Service Fund for the ensuing fiscal year, in a form and style as deemed desirable by the City Manager. The City
Manager shall submit to the Council, for its review, consideration, and revision, both a letter describing the
proposed new budget, as well as a balanced budget for the forthcoming fiscal year, between 60 (sixty) and 90
(ninety)days prior to the beginning of the fiscal year. The budget, as adopted, must set forth the appropriations for
services, functions, and activities of the various City departments and agencies, and shall meet all fund
requirements provided by law and required by bond covenants. Capital projects are budgeted on a project-length
basis.
Amounts reported in the accompanying financial statements represent the budgeted amount-with all supplemental
appropriations.
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CITY OF PEARLAND,TEXAS
REQUIRED PENSION SYSTEM SUPPLEMENTARYINFORMATION
September 30,2017
TEXAS MUNICIPAL RETIREMENT SYSTEM(UNAUDITED)
Schedule of Changes in Net Pension Liability and Related Ratios
Last Three Measurement Years
2016 2015 2014
Total pension liability
Service cost $ 6,756,543 $ 6,035,636 $ 5,118,873
Interest 8,166,924 7,679,417 7,010,813
Changes of benefit terns
Difference between expected and actual experience 1,159,738 846,833 241,450
Change in assumptions (304,820)
Benefit payments,including refunds of employee contributions (2,875,256) (3,808,062) (2,729,973)
Net change in total pension liability 13,207,949 10,449,004 9,641,163
Total pension liability-beginning 119,050,823 108,601,188 98,960,025
Total pension liability-ending(a) $ 132,258,772_ $119,050,192 $ 108,601,188
Plan fiduciary net position:
Contributions-employer $ 5,253,253 $ 4,786,602 $ 4,339,785
Contributions-employee 2,749,756 2,498,961 2,355,095
Net investment income 6,458,752 135,758 4,766,828
Benefit payments,including refunds of employee contributions (2,875,256) (3,808,062) (2,729,973)
Administrative expense (72,899) (82,673) (49,756)
Other (3,927) (4,082) (4,091)
Net change in plan fiduciary net position 11,509,679 3,526,504 8,677,888
Plan fiduciary net position-beginning 95,511,165 91,984,661 83,306,773
Plan fiduciary net position-ending(b) 107,020,844 95,511,165 91,984,661 ,
Net pension liability-ending(a)-(b) $ 25,237,928 $ 23,539,027 S 16,616,527
Plan fiduciary net position as a
percentage of total pension liability 80.92% 80.23% 84.70%
Covered employee payroll $ 39,282,225 $ 35,545,557 $ 33,615,923
Net pension liability as a percentage
of covered employee payroll 64.25% 66.22% 49.43%
Amounts presented are for each measurement year,which end the preceding
December 31 of the City's fiscal year end.
Net pension liability is calculated using a new methodology and will be presented
prospectively in accordance with GASB 68.
Ten years of data should be presented in this schedule but data was
unavailable prior to 2014.
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CITY OF PEARLAND,TEXAS
REQUIRED PENSION SYSTEM SUPPLEMENTARY INFORMATION
September 30,2017
TEXAS MUNICIPAL RETIREMENT SYSTEM(UNAUDITED)
Schedule of Contributions
Last Ten Fiscal Years
2017 2016 2015 2014 2013
Actuarially determined contribution $ 5,924,405 $ 5,295,359 $ 4,600,419 $ 4,311,811 $ 3,780,847
Contribution in relation of the actuarially
determined contribution $ 5,924,405 $ 5,295,359 $ 4,600,419 $ 4,311,811 $ 3,780,847
Contribution deficiency(excess) - - - - -
Covered employee payroll $ 43,703,166 $ 39,566,838 $ 34,650,598 $ 30,580,987 $ 28,876,260
Contributions as a percentage of covered
employee payroll 13.6% 13.4% 13.3% 14.1% 13.1%
2012 2011 2010 2009 2008
Actuarially determined contribution $ 3,518,289 $ 3,302,952 $ 2,995,119 $ 2,550,976 $ 2,331,353
Contribution in relation of the actuarially
determined contribution $ 3,518,289 $ 3,302,952 $ 2,995,119 $ 2,550,976 $ 2,331,353
Contribution deficiency(excess) - - - - -
Covered employee payroll $ 27,756,555 $ 26,871,670 $ 25,519,548 $ 25,135,418 $ 19,967,051
Contributions as a percentage of covered
employee payroll 12.7% 12.3% 11.7% 10.1% 11.7%
NOTES TO REQUIRED PENSION SYSTEM SUPPLEMENTARY INFORMATION
Valuation Date:
Actuarial determined contribution rates are calculated as of December 31st each year and become effective in
January, 12 months and a day later.
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method: Entry Age Normal
Amortization Method: Level Percentage of Payroll, Closed
Remaining Amortization Period: 29 years •
Asset Valuation Method: 10 Year smoothed market; 15%soft corridor
Inflation: 2.5%
Salary Increases: 3.50%to 10.50%including inflation
Investment Rate of Return: 6.75%
Retirement Age: Experience-based table of rates that are specific to the City's plan
of benefits. Last updated for the 2015 valuation pursuant to an
experience study of the period 2010—2014.
Mortality: RP2000 Combined Mortality Table with Blue Collar Adjustment
with male rates multiplied by 109%and female rates multiplied by 103%
and projected on a fully generational basis with scale BB.
Other Information:
Notes: Increased statutory max to 15.50%.
73
City of Pearland FY 2017 CAFR
•
CITY OF PEARLAND,TEXAS
REQUIRED OTHER POST RETIREMENT BENEFIT SUPPLEMENTARY INFORMATION
September 30,2017
Schedule of Funding Progress
Unfunded
Actuarial (UAAL)as a
Actuarial Accrued Percentage of
Fiscal Year Actuarial Accrued Percentage Liability Annual Covered Covered
Ended Value of Assets Liabilities Funded (UAAL) Payroll Payroll
2015 $ $ 3,831,277 0% $ 3,831,277 $ 33,615,923 11.4%
2016 3,831,277 0% 3,831,277 33,615,923 11.4%
2017 4,824,065 0% 4,824,065 34,733,537 13.9%
NOTES TO REQUIRED OTHER POST RETIREMENT BENEFIT SUPPLEMENTARY
INFORMATION:
While retirees get the benefit of an overall employee blended rate for the Other Post-Employment Benefit
Obligation, benefits are funded on a pay-as-you go basis via premiums paid by the retirees and to be paid by
future retirees. Therefore, the City does not pay for retiree health insurance directly and there is an implicit
subsidy due to the blended rate paid by the retirees. Thus, there is no direct liability due from the City as it does
not pay any portion of the retiree's costs. Actuarial valuations are conducted every two years.
Trend information is designed to provide information about the progress made in accumulating sufficient assets to
pay benefits when due.
74
City of Pearland FY 2017 CAFR
Other Supplementary Information
75
City of Pearland FY 2017 CAFR
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•
76
City of Pearland FY 2017 CAFR
Combining and Individual Fund
Statements and Schedules
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City of Pearland FY 2017 CAFR
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78
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NON-MAJOR GOVERNMENTAL FUNDS
To account for the proceeds of specific revenue sources that, are legally restricted to expenditures for specific
purposes.
Hotel/Motel Tax Fund-A fund created to account for hotel/motel occupancy tax revenue.
Court Security Fund-A fund created to account for the receipt and expenditure of revenues from court fmes for
court security.
City-Wide Donation Fund-A fund created to account for miscellaneous donations for all city departments except
parks.
Court Technology Fund-This fund is used to account for the receipt and expenditure of revenues from court fines
for court technology.
Street Assessments Fund— A fund created to account for the revenue and expenditure of street assessments as
approved by City Council for a designated street(s).
Park Donation Fund-A fund used to account for park donations for park special events and development of parks.
This fund also includes funds from tree trust donations.
Police Seizure Fund-A fund created to account for state and federal seizure funds which are used solely for law
enforcement purposes.
Park and Recreation Development Fund- A fund created to account for the receipt and expenditure of payment
in lieu of parkland for the development of parks.
Sidewalk Fund-A fund created to account for resources designated for sidewalks.
Grant Fund- A fund created to account for revenues and expenditures associated with federal, state, and local
grants.
Traffic Impact Improvement Fund-A fund created to account for resources and expenditures from traffic impact
analysis.
Juvenile Management Fund-A fund created to account for receipt and expenditure of revenues from court fmes
for juvenile case manager.
Pearland Economic Development Corporation Fund-A fund used to account for the revenues and expenditures
associated with the half-cent sales tax for economic development approved by the voters in 1995. Use of funds are
governed by State Law.
Regional Detention Fund-A fund created to account for regional detention development.
Educational TV Fund—A fund created to account for the revenues and expenditures associated with the purchase
of equipment for public-access television broadcasting under rules set forth by the Federal Communications
Commission(FCC).
University of Houston(U of H)Fund-A fund created to account for lease revenues and the operating expenditures
related to the University of Houston Clear Lake-Pearland Campus built by the City and leased to the University of
Houston Clear Lake and the Pearland Economic Development Corporation.
79
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
September 30,2017
Hotel/Motel Court City-Wide Court
Tax Security Donation Technology
Assets
Cash and cash equivalents $ 282,573 $ 36,207 $ 74,712 $ 971
Investments 4,003,512
Receivables(net of allowance
for uncollectibles) 381,512
Prepaid items 4,320
Total Assets $ 4,671,917 $ 36,207 $ 74,712 $ 971
Liabilities
Accounts payable $ 10,153 $ 1,734 $ $
Accrued expenditures 58,216
Deposits
Due to other funds
Total Liabilities 68,369 1,734
Deferred Inflows of Resources
Unavailable revenue
Total Deferred Inflows
of Resources
Fund Balance
Non-spendable 4,320
Restricted for:
Community development
programs 4,599,228 34,473 3,518
Public safety 71,194 971
Capital improvements
Economic development
Unassigned
Total Fund Balances 4,603,548 34,473 74,712 971
Total Liabilities, Deferred
Inflows of Resources,
and Fund Balances $ 4,671,917 $ 36,207 $ 74,712 $ 971
80
City of Pearland FY 2017 CAFR
Page 1 of 2
Park and
Street Park Recreatio n
Assessments Donation Police Seizure Development
$ $ 262,036 $ 272,570 $ 223,062
491,465
1,486,878 400 1,722 5,657
$ 1,486,878 $ 262,436 $ 274,292 $ 720,184
$ $ 57 $ 2,700 $
57 2,700
1,486,878
1,486,878
262,379
271,592
720,184
262,379 271,592 720,184
$ 1,486,878 $ 262,436 $ 274,292 $ 720,184
81
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
September 30,2017
Traffic Impact Juvenile
Sidewalk Grant Improvement Management
Assets
Cash and cash equivalents $ 6,283 $ 107,227 $ 478,963 $ 21,253
Investments 247,567
Receivables (net of allowance
for uncollectibles) 268,879 6,747
Prepaid items
Total Assets $ 6,283 $ 376,106 $ 733,277 $ 21,253
Liabilities
Accounts payable $ $ 67,517 $ 50,000 $ 742
Accrued expenditures
Deposits
Due to other funds 164,808
Total Liabilities 232,325 50,000 742
Deferred Inflows of Resources
Unavailable revenue
Total Deferred Inflows
of Resources
Fund Balance
Non-spendable
Restricted for:
Community development
programs 143,781
Public safety 20,511
Capital improvements 6,283 683,277
Economic development
Unassigned
Total Fund Balances 6,283 143,781 683,277 20,511
Total Liabilities,Deferred
Inflows of Resources,
and Fund Balances $ 6,283 $ 376,106 $ 733,277 $ 21,253
82
City of Pearland FY 2017 CAFR
Page 2 of 2
Pearland
Economic Total Non-major
Development Regional Educational Governmental
Corporation Detention TV U of H Funds
$ 47,936 $ 3,158 $ 65,367 $ $ 1,882,318
19,034,161 502,494 24,279,199
3,239,988 32,857 5,424,640
4,320
$ 22,322,085 $ 3,158 $ 600,718 $ $ 31,590,477
$ 146,768 $ $ $ $ 279,671
28,176 27,299 113,691
38,333 38,333
81,607 _ 370 246,785
294,884 27,669 678,480
1,486,878 2,973,756
1,486,878 2,973,756
4,320
600,718 5,644,097
364,268
3,158 1,412,902
20,540,323 20,540,323
(27,669) (27,669)
20,540,323 3,158 600,718 (27,669) 27,938,241
_$ 22,322,085 $ 3,158 $ 600,718 $ $ 31,590,477
83
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
COMBINING STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES iN FUND BALANCES
NON-MAJOR GOVERNMENTAL FUNDS
For the Year Ended September 30,2017
Hotel/Motel Court City-Wide Court
Tax Security Donation Technology
Revenues
Sales and use taxes $ 1,421,958 $ $ $
Franchise fees
Fines and forfeitures 44,095 47,861
Charges for services
Investment earnings 12,053 30 75 6
Intergovernmental
Other 25,284 29,354
Total Revenues 1,459,295 44,125 29,429 47,867
Expenditures
Current:
General government 1,049,230
Public safety 23,096
Public works
Community services 38,893 66,805
Parks and recreation
Economic development
Debt Service:
Principal
Interest and other charges
Capital outlay
Total Expenditures 1,049,230 38,893 23,096 66,805
Excess (deficiency) of
revenues over expenditures 410,065 5,232 6,333 (18,938)
Other Financing
Sources (Uses)
Refunding debt
Payments to refunding escrow
Transfers in
Transfers out (772)
Total Other Financing
Sources (Uses) (772)
Net change in fund balances 409,293 5,232 6,333 (18,938)
Fund balances-beginning 4,194,255 29,241 68,379 19,909
Fund balances-ending $ 4,603,548 $ 34,473 $ 74,712 $ 971
84
City of Pearland FY 2017 CAFR
Page 1 of 2
Park and
Street Park Recreation
Assessments Donation Police Seizure Development
$ $ $ $
137,300
57,308 210 285 (3,079)
101,304 82,423 38,492
57,308 238,814 82,708 35,413 •
57,308
. 35,622
107,235
10,673
57,308 107,235 46,295
131,579 36,413 35,413
(510,000)
(510,000)
131,579 36,413 (474,587)
130,800 235,179 1,194,771
$ $ 262,379 $ 271,592 $ 720,184
85
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
COMBINING STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES
NON-MAJOR GOVERNMENTAL FUNDS
For the Year Ended September 30,2017
Traffic Impact Juvenile
Sidewalk Grant Improvement Management
Revenues
Sales and use taxes $ $ $ $
Franchise fees
Fines and forfeitures 50,537
Charges for services 286
Investment earnings 10 72 1,054 26
Intergovernmental 912,864
Other 37,351
Total Revenues 296 912,936 38,405 50,563
Expenditures
Current:
General government 18,393
Public safety 138,397
Public works 11,520 (93,548)
Community services 536,622 51,781
Parks and recreation 21,645
Economic development
Debt Service:
Principal
Interest and other charges
Capital outlay 111,820
Total Expenditures 11,520 826,877 (93,548) 51,781
Excess (deficiency) of
revenues over expenditures (11,224) 86,059 131,953 (1,218)
Other Financing
Sources (Uses)
Refunding debt
Payments to refunding escrow
Transfers in
Transfers out (44,800)
Total Other Financing
Sources (Uses) (44,800)
Net change in fund balances (11,224) 86,059 87,153 (1,218)
Fund balances-beginning 17,507 57,722 596,124 21,729
Fund balances-ending $ 6,283 $ 143,781 $ 683,277 $ 20,511
86
City of Pearland FY 2017 CAFR
Page 2 of 2
Pearland
Economic Total Non-major
Development Regional Educational Governmental
Corporation Detention TV U of H Funds
$ 10,097,052 $ $ $ $ 11,519,010
287,603 287,603
142,493
480,946 618,532
137,874 3,234 133 209,291
12,000 298 925,162
1,950,207 22,113 882 2,287,410
12,678,079 22,113 290,837 1,313 15,989,501
1,124,931
197,115
314,783 232,755
58,004 752,105
128,880
2,057,465 2,057,465
890,000 890,000
338,786 338,786
732,843 53,459 908,795
4,019,094 111,463 314,783 6,630,832
8,658,985 22,113 179,374 (313,470) 9,358,669
(8,120,773) (18,955) (466,258) (9,161,558)
(8,120,773) (18,955) (466,258) (9,161,558)
538,212 3,158 (286,884) (313,470) 197,111
20,002,111 887,602 285,801 27,741,130
$ 20,540,323 $ 3,158 $ 600,718 $ (27,669) $ 27,938,241
87
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
MAJOR GOVERNMENTAL FUND-DEBT SERVICE FUND
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended September 30,2016
2017
Variance
Amended Positive/
Budget Actual (Negative)
Revenues
Property taxes $ 32,973,979 $ 32,476,674 $ (497,305) $ 31,366,717
Investment earnings 75,000 77,637 2,637 97,444
Miscellaneous 838,736 837,046 (1,690) 1,168,556
Total Revenues 33,887,715 33,391,357 (496,358) 32,632,717
Expenditures
Debt Service:
Principal 17,074,340 17,318,542 (244,202) 13,407,950
Interest and other charges 13,033,896 11,872,754 1,161,142 12,297,281
Intergovernmental 7,200,476 6,936,997 263,479 4,847,104
Total Expenditures 37,308,712 36,128,293 1,180,419 30,552,335
Excess(deficiency)of revenues
over expenditures (3,420,997) (2,736,936) 684,061 2,080,382
Other Financing Sources(Uses)
Refunding bonds issued 29,840,000 64,850,000 35,010,000 27,080,000
Premium on debt issued 3,432,438 7,557,342 4,124,904 2,245,323
Payments to refunded bond
escrow agent (32,944,162) (72,608,326) (39,664,164) (28,967,231)
Transfers in 572,961 572,961 804,331
Total Other Financing Sources(Uses) 901,237 371,977 (529,260) 1,162,423
Net change in fund balance (2,519,760) (2,364,959) 154,801 3,242,805
Fund Balance-Beginning 8,276,420 8,276,420 5,033,615
Fund Balance-Ending $ 5,756,660 $ 5,911,461 $ 154,801 $ 8,276,420
88
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND-HOTEL/MOTEL TAX
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30, 2017
with comparative actual totals for the year ended September 30, 2016
2017
Variance
Amended Positive/
Budget Actual (Negative)
Revenues
Sales and use taxes $ 1,400,000 $ 1,421,958 $ 21,958 $ 1,409,044
Investment earnings 13,700 12,053 (1,647) 30,509
Other 19,436 25,284 5,848 12,543
Total Revenues 1,433,136 1,459,295 26,159 1,452,096
Expenditures
Current:
General government 1,089,951 _ 1,049,230 40,721 901,470
Total Expenditures 1,089,951 1,049,230 40,721 947,947
Excess(deficiency) of revenues
over expenditures 343,185 410,065 66,880 504,149
Other Financing Sources (Uses)
Transfers out (772) (772) (772)
Net change in fund balance 342,413 409,293 66,880 503,377
Fund Balance-Beginning 4,194,255 4,194,255 3,690,878
Fund Balance-Ending $ 4,536,668 $ 4,603,548 $ 66,880 $ 4,194,255
89
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND-COURT SECURITY
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended January 0,1900
2017
Variance
Amended Positive/
Budget Actual (Negative)
Revenues
Fines and forfeitures $ 47,100 $ 44,095 $ (3,005) $ 47,968
Investment earnings 34 30 (4) 47
Total Revenues 47,134 44,125 (3,009) 48,015
Expenditures
Current:
Community services 49,068 38,893 10,175 87,723
Total Expenditures 49,068 38,893 10,175 87,723
Net change in fund balance (1,934) 5,232 7,166 (39,708)
Fund Balance- Beginning 29,241 29,241 68,949
Fund Balance -Ending $ 27,307 $ 34,473 $ 7,166 $ 29,241
90
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND-CITY-WIDE DONATION
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended September 30,2016
2017
Variance
Amended Positive/
Budget Actual (Negative)
Revenues
Investment earnings $ 100 $ 75 $ (25) $ 59
Other income 31,800 29,354 (2,446) 30,060
Total Revenues 31,900 29,429 (2,471) 30,119
Expenditures
Current:
Public safety 22,601 23,096 (495) 8,904
Capital outlay 12,960
Total Expenditures 22,601 23,096 (495) 21,864
Excess (deficiency) of revenues
over expenditures 9,299 6,333 (2,966) 8,255
Net change in fund balance 9,299 6,333 (2,966) 8,255
Fund Balance-Beginning 68,379 68,379 60,124
Fund Balance-Ending $ 77,678 $ 74,712 $ (2,966) $ 68,379
91
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND-COURT TECHNOLOGY
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended September 30,2016
2017
Variance
Amended Positive/
Budget Actual (Negative) 2016
Revenues
Fines and forfeitures $ 52,000 $ 47,861 $ (4,139) $ 52,628
Investment earnings 5 6 1 12
Total Revenues 52,005 47,867 (4,138) 52,640
Expenditures
Current:
General government
Community services 66,694 66,805 (111) 64,587
Total Expenditures 66,694 66,805 (111) 64,587
Net change in fund balance (14,689) (18,938) (4,249) (11,947)
Fund Balance -Beginning 19,909 19,909 31,856
Fund Balance-Ending $ 5,220 $ 971 $ (4Z249.1 $ 19,909
92
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND-STREET ASSESSMENTS
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended September 30,2016
2017
Variance
Amended Positive/
Budget Actual (Negative) 2016
Revenues
Investment earnings $ $ 57,308 $ 57,308 $ 44,234
Other 475,757
Total Revenues 57,308 57,308 519,991
Expenditures
Current:
General government 57,308 (57,308) 519,991
Total Expenditures 57,308 (57,308) 519,991
Net change in fund balance
Fund Balances -Beginning
Fund Balances -Ending $ $ $ $
93
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
SPECIAL REVENUE FUND-PARK DONATION
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended January 0,1900
2017
Variance
Amended Positive/
Budget Actual (Negative) 2016
Revenues
Charges for services $ 67,300 $ 137,300 $ 70,000 $
Investment earnings 240 210 (30) 110
Other 101,440 101,304 (136) 133,669
Total Revenues 168,980 238,814 69,834 133,779
Expenditures
Current:
Parks and recreation 109,989 107,235 2,754 107,863
Total Expenditures 109,989 107,235 2,754 107,863
Net change in fund balance 58,991 131,579 72,588 25,916
Fund Balance-Beginning 130,800 130,800 104,884
Fund Balance-Ending $ 189,791 $ 262,379 $ 72,588 $ 130,800
94 •
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND-POLICE SEIZURE
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended September 30,2016
2017
Variance •
Amended Positive/
Budget Actual (Negative)
Revenues
Investment earnings $ 307 $ 285 $ (22) $ 258
Other 31,134 82,423 51,289 60,217
Total Revenues 31,441 82,708 51,267 60,475
Expenditures
Current:
Public safety 36,300 35,622 678 22,769
Capital outlay 10,673 10,673 68,000
Total Expenditures 46,973 46,295 678 90,769
Net change in fund balance (15,532) 36,413 51,945 (30,294)
Fund Balance - Beginning 235,179 235,179 265,473
Fund Balance - Ending $ 219,647 $ 271,592 $ 51,945 $ 235,179
95
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
SPECIAL REVENUE FUND-PARK AND RECREATION DEVELOPMENT
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended September 30,2016
2017
Variance
Amended Positive/
Budget Actual (Negative)
Revenues
Investment earnings $ 5,400 $ (3,079) $ (8,479) $ 10,133
Other 50,000 38,492 (11,508) 174,432
Total Revenues 55,400 35,413 (19,987) 184,565
Expenditures
Current:
Parks and recreation 2,000
Capital outlay 27,434
Debt Service
Interest and bond issue costs
Total Expenditures 29,434
Excess(deficiency) of
revenues over expenditures 55,400 35,413 (19,987) 155,131
Other Financing Sources(Uses)
Transfers out (510,000) (510,000) (196,000)
Total Other Financing
Sources (Uses) (510,000) (510,000) (196,000)
Net change in fund balance (454,600) (474,587) (19,987) (40,869)
Fund Balance.-Beginning 1,194,771 1,194,771 1,235,640
Fund Balance-Ending $ 740,171 $ 720,184 $ (19,987) $ 1,194,771
96
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
SPECIAL REVENUE FUND-SIDEWALK
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended January 0,1900
2017
Variance
Amended Positive/
Budget Actual (Negative)
Revenues
Charges for services $ $ 286 $ 286 $
Investment earnings 10 10 - 16
Total Revenues 10 296 286 16
Expenditures
Current:
Public works 11,520 11,520
Total Expenditures 11,520 11,520
Net change in fund balance (11,510) (11,224) 286 16
Fund Balance-Beginning 17,507 17,507 17,491
Fund Balance-Ending $ 5,997 $ 6,283 $ 286 $ 17,507
97
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
SPECIAL REVENUE FUND-GRANT
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended September 30,2016
2017
Variance
Amended Positive/
Budget Actual (Negative) 2016
Revenues
Investment earnings $ 29 $ 72 $ 43 $ 47
Intergovernmental 1,556,368 912,864 (643,504) 382,259
Total Revenues 1,556,397 912,936 (643,461) 382,306
Expenditures
Current:
General government 17,260 18,393 (1,133) 28,829
Public safety 204,998 138,397 66,601 206,608
Community service 905,113 536,622 368,491 132,337 •
Parks and recreation 21,645 (21,645)
Capital outlay 195,639 111,820 83,819 26,064
Total Expenditures 1,323,010 826,877 496,133 393,838
Net change in fund balance (6,403) 86,059 92,462 (11,532)
Fund Balance-Beginning 57,722 57,722 69,254
Fund Balance -Ending $ 51,319 $ 143,781 $ 92,462 $ 57,722
•
98
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND-TRAFFIC IMPACT IMPROVEMENT
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended September 30,2016
2017
Variance
Amended Positive/
Budget Actual (Negative) 2016
Revenues
Investment earnings $ 900 $ 1,054 $ 154 $ 687
Other 1,017 37,351 36,334 28,509
Total Revenues 1,917 38,405 36,488 • 29,196
Expenditures
Current:
Public works (93,548) 93,548 143,548
Total Expenditures (93,548) 93,548 143,548
Excess (deficiency) of revenues
over expenditures 1,917 131,953 130,036 (114,352)
Other Financing Sources/(Uses)
Transfers out (44,800) (44,800)
Net change in fund balance (42,883) 87,153 130,036 (114,352)
Fund Balance-Beginning 596,124 596,124 710,476
Fund Balance-Ending $ 553,241 $ 683,277 $ 130,036 $ 596,124
99
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
SPECIAL REVENUE FUND-JUVENILE MANAGEMENT
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended September 30,2016
2017
Variance
Amended Positive/
Budget Actual (Negative) 2016
Revenues
Fines and Forfeitures $ 49,500 $ 50,537 $ 1,037 $ 28,140
Investment earnings 30 26 (4) 30
Total Revenues 49,530 50,563 1,033 28,170
Expenditures
Current:
Community services 52,673 51,781 892 46,088
Total Expenditures 52,673 51,781 892 46,088
Net change in fund balance (3,143) (1,218) 1,925 (17,918)
Fund Balance-Beginning 21,729 21,729 39,647
Fund Balance-Ending $ 18,586 $ 20,511 $ 1,925 $ 21,729
100
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND-REGIONAL DETENTION
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended September 30,2016
2017
Variance
Amended Positive/
Budget Actual (Negative)
Revenues
Investment earnings $ $ $ $ 87
Other 22,113 22,113 171,425
Total Revenues 22,113 22,113 171,512
Other Financing Sources (Uses)
Transfers out (18,955) (18,955) (171,512)
Total Other Financing Sources (Uses) (18,955) . (18,955) (171,512)
Net change in fund balance 3,158 3,158
Fund Balance - Beginning
Fund Balance-Ending $ $ 3,158 $ 3,158 $
101
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
SPECIAL REVENUE FUND-EDUCATIONAL TV
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended September 30,2016
2017
Variance
Amended Positive/
Budget Actual (Negative) 2016
Revenues
Investment earnings $ 1,000 $ 3,234 $ 2,234 $ 719
Franchise taxes 300,000 287,603 (12,397) 309,126
Total Revenues 301,000 290,837 (10,163) 309,845
Expenditures
Current:
Community services 75,646 58,004 17,642 137,472
Capital outlay 30,000 53,459 (23,459) 22,876
Total Expenditures 105,646 111,463 (5,817) 160,348
Revenues over(under) expenditures 195,354 179,374 (15,980) 149,497
Other Financing Sources (Uses)
Transfers out (466,258) (466,258) (20,250)
Total Other Financing Sources (Uses) (466,258) (466,258) (20,250)
Net change in fund balance (270,904) (286,884) (15,980) 129,247
Fund Balances -Beginning 887,602 887,602 758,355
Fund Balances-Ending $ 616,698 $ 600,718 $ (15,980) $ 887,602
102
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND-U OF H
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended January 0,1900
2017
Variance
Amended Positive/
Budget Actual (Negative)
Revenues
Investment earnings $ 133 $ 133 $ $ 273
Intergovernmental 298 298 224,971
Total Revenues 1,313 1,313 225,244
Expenditures
Current:
Public works 314,783 314,783 281,805
Total Expenditures 314,783 314,783 281,805
Excess (deficiency) of
revenues over expenditures (313,470) (313,470) (56,561)
Other Financing Sources (Uses)
Transfers in 93,913
Total Other Financing Sources (Uses) 93,913
Net change in fund balance (313,470) (313,470) 37,352
Fund Balances-Beginning 285,801 285,801 248,449
Fund Balances-Ending $ (27,669) $ (27,669) $ $ 285,801
103
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
MAJOR GOVERNMENTAL FUND-CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
For the Year Ended September 30,2017
with comparative actual totals for the year ended September 30,2016
2017
Variance
Amended Positive/
Budget Actual (Negative)
Revenues -
Investment earnings $ 285,650 $ 207,112 $ (78,538) $ 138,143
Intergovernmental 34,492,784 15,084,953 (19,407,831) 14,864,007
Other income 75,737 1,083,040 1,007,303 429,211
Total Revenues 34,854,171 16,375,105 (18,479,066) 15,431,361
Expenditures
Current:
Public works 1,768,592 4,983,526 (3,214,934) 1,868,429
Debt Service
Interest and other charges 100,000 375,452 (275,452) 417,215
Capital outlay 45,574,429 38,183,894 7,390,535 27,977,895
Total Expenditures 47,443,021 43,542,872 3,900,149 30,263,539
Excess (deficiency) of revenues
over expenditures (12,588,850) (27,167,767) (14,578,917) (14,832,178)
Other Financing Sources (Uses)
Issuance of debt 30,695,002 28,095,000 (2,600,002) 30,400,000
Premium on debt issued 2,896,020 2,896,020 2,305,693
Transfers in 10,590,532 10,192,660 (397,872) 8,448,062
Transfers out (1,430,832) (1,780,957) (350,125) (1,289,608)
Total Other Financing Sources (Uses) 39,854,702 39,402,723 (451,979) 39,864,147
Net change in fund balance 27,265,852 12,234,956 (15,030,896) 25,031,969
Fund Balance-Beginning 45,552,148 45,552,148 20,520,179
Fund Balance-Ending $ 72,818,000 $ 57,787,104 $ (15,030,896) $ 45,552,148
104
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
INTERNAL SERVICE FUNDS
Internal Service Funds are used to account for the financing of goods or services provided by one department or
agency to other departments or agencies of the government and to other government units,on a cost reimbursement
basis.
Property Liability Insurance Fund-To account for the activities of the City's property and casualty insurance.
Coverage includes general liability, law enforcement,public official and employees'liability, auto liability,
physical damage and multi-peril,mobile equipment,real and personal property,and windstorm coverage.
Employee Benefits Fund-To account for other forms of insurance such as dental,vision, life,and disability
provided by the City to employees except for health insurance.
Health Claims Fund-To account for the activities of the City's employee health insurance. The fund accounts
for retiree and COBRA contributions,claims and coverage.
105
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
September 30,2017
Property
Liability Employee Health Claims
Insurance Fund Benefits Fund Fund Total
Assets
Current assets:
Cash and cash equivalents $ 636,012 $ 121,289 $ 2,856,116 $ 3,613,417
Accounts Receivables,net 14,296 1,391 15,687
Total Assets 650,308 121,289 2,857,507 3,629,104
Liabilities
Current liabilities:
Accounts payable and accrued expenses 53,335 88,551 385,466 527,352
Total Liabilities 53,335 88,551 385,466 527,352
Net Position
Unrestricted 596,973 32,738 2,472,041 3,101,752
Total Net Position $ 596,973 $ 32,738 $ 2,472,041 $ 3,101,752
106
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
COMBINING STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND NET POSITION
INTERNAL SERVICE FUNDS
For the Year Ended September 30,2017
Property
Liability Employee Health Claims
Insurance Fund Benefits Fund Fund Total
Revenues
Charges for services $ 244,452 $ 52 $ 7,789,904 $ 8,034,408
Total operating revenues 244,452 52 7,789,904 8,034,408
Operating Expenses
Personnel services 54,193 54,193
Contractual services 1,167,084 6,900,042 8,067,126
Other expenses 40,738 9,995 50,733
Total Operating Expenses 1,262,015 6,910,037 8,172,052
Operating income(loss) (1,017,563) 52 879,867 (137,644)
Non-Operating Revenues(Expenses)
Earnings on investments 298 129 2,870 3,297
Total Non-Operating Revenues (Expenses) 298 129 2,870 3,297
Income(loss)before contributions and
transfers (1,017,265) 181 882,737 (134,347)
Transfers in 1,310,994 1,310,994
Transfers out (500,000) (500,000)
Change in net position 293,729 181 382,737 676,647
Total net position-beginning 303,244 _ 32,557 2,089,304 2,425,105
Total net position-ending $ 596,973 $ 32,738 $ 2,472,041 $ 3,101,752
107
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
STATEMENT OF CASHFLOWS
INTERNAL SERVICE FUNDS
For the Year Ended September 30,2017
Property
Liability Employee Health Claims
Insurance Fund Benefits Fund Fund Total
Cash Flows from Operating Activities
Receipts from interfund charges for insurance activities $ 232,629 $ 52 $ 7,788,513 $ 8,021,194
Disbursed for personnel services (54,193) (54,193)
Disbursed for goods and services (1,154,487) 12,318 (6,822,955) (7,965,124)
Net cash provided(used)by operating activities (976,051) 12,370 965,558 1,877
Cash Flows from Noncapital Financing Activities
Transfers in 1,310,994 1,310,994
Transfers out (500,000) (500,000)
Net cash provided by(used by)noncapital
financing activities 1,310,994 (500,000) 810,994
Cash Flows from Investing Activities
Interest received 298 128 2,870 3,296
Net cash provided by(used by)investing activities 298 128 2,870 3,296
Net increase(decrease)in cash and equivalents 335,241 12,498 468,428 816,167
Cash and equivalents,beginning 300,771 108,791 2,387,688 2,797,250
Cash and equivalents,end $ 636,012 $ 121,289 $ 2,856,1 16 $ 3,613,417
Reconciliation of operating income to net cash
provided by operating activities
Operating income(loss) $ (1,017,563) $ 52 $ 879,867 $ (137,644)
Adjustments to reconcile operating income to net cash
(Increase)decrease in accounts receivable (11,823) (1,391) (13,214)
Increase(decrease)in accounts payable 53,335 12,318 87,082 152,735
Net cash provided by(used by)operating activities $ (976,051) $ 12,370 $ 965,558 $ 1,877
108
City of Pearland FY 2017 CAFR
Long-Term Debt Amortization Schedules
109
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
COMBINING SCHEDULE OF GOVERNMENTAL ACTIVITY LONG-TERM DEBT
BY MATURITY DATE
September 30,2017
Certificates of Obligation,Series 2007 Certificates of Obligation,Series 2008
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ $ 106,763 $ 106,763 $ 165,000 $ 10,700 $ 175,700
2019 106,763 106,763 185,000 3,700 188,700
2020 106,763 106,763
2021 106,763 106,763
2022 106,763 106,763
2023 106,763 106,763
2024 106,763 106,763
2025 106,763 106,763
2026 106,763 106,763
2027 106,763 106,763
2028 106,763 106,763
2029 1,745,000 78,406 1,823,406
2030 1,540,000 25,025 1,565,025
2031
2032
2033
2034
2035
2036
2037
2038
$ 3.285,000 S 1,277.824 S 4,562,824 S 350,000 S 14,400 S 364,400
Permanent Improvement Bonds,Series 2008 Certificates of Obligation,Series 2009
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 360,000 $ 29,250 $ 389,250 $ 255,000 $ 35,363 $ 290,363
2019 405,000 10,125 415,125 320,000 25,800 345,800
2020 325,000 13,000 338,000
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
$ 765,000 $ 39,375 $ 804,375 $ 900,000 $ 74,163 $ 974,163
110
City of Pearland FY 2017 CAFR
Page 1 of 4
Certificates of Obligation,Series 2009A Permanent Improvement and Refunding Bonds,Series
2009(Gov't Portion)
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 640,000 $ 54,360 $ 694,360 $ 455,000 $ 50,285 $ 505,285
2019 640,000 31,518 671,518 590,000 30,018 620,018
2020 635,000 10,319 645,319 615,000 9,994 624,994
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
$ 1,915,000 $ 96,197 $ 2,011,197 $ 1,660,000 $ 90,297 $ 1,750,297
Permanent Improvement Bonds,Series 2010A Permanent Improvement Bonds,Series 2010B
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 400,000 $ 366,853 $ 766,853 $ 90,000 $ 1,350 $ 91,350
2019 415,000 354,628 769,628
2020 425,000 342,028 767,028
2021 440,000 329,053 769,053
2022 455,000 315,059 770,059
2023 465,000 300,109 765,109
2024 485,000 284,065 769,065
2025 500,000 265,578 765,578
2026 520,000 246,153 766,153
2027 540,000 226,603 766,603
2028 560,000 205,558 765,558
2029 585,000 182,938 767,938
2030 610,000 159,038 769,038
2031 635,000 133,344 768,344
2032 660,000 105,825 765,825
2033 690,000 77,138 767,138
2034 720,000 47,175 767,175
2035 750,000 15,938 765,938
2036
2037
$ 9,855,000 S 3.,57.083 S 13,212,083 2 90,000 $ 1.350 $ 91,350
111
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
COMBINING SCHEDULE OF GOVERNMENTAL ACTIVITY LONG-TERM DEBT
BY MATURITY DATE
September 30,2017
Permanent Improvement Bonds,Series 2011 Certificates of Obligation,Series 2011
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 170,000 $ 170,931 $ 340,931 $ 210,000 $ 15,362 $ 225,362
2019 175,000 164,031 339,031 210,000 10,973 220,973
2020 185,000 156,831 341,831 210,000 6,584 216,584
2021 190,000 149,331 339,331 210,000 2,195 212,195
2022 200,000 141,531 341,531
2023 205,000 134,456 339,456
2024 210,000 128,231 338,231
2025 220,000 121,506 341,506
2026 225,000 114,275 339,275
2027 235,000 106,506 341,506
2028 245,000 98,106 343,106
2029 250,000 88,819 338,819
2030 260,000 78,619 338,619
2031 275,000 67,919 342,919
2032 285,000 56,719 341,719
2033 295,000 45,119 340,119
2034 305,000 33,119 338,119
2035 320,000 20,419 340,419
2036 335,000 6,909 341,909
2037
2038
$ 4,585,000 5 1,883,377 S 6.468.377 S 840,000 S 35,114 $ 875.114
Permanent Improvement and Refunding Bonds,Series BC MUD#4
2012(Gov't Portion) Unlimited Tax Bonds,Series 2011
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 2,690,000 $ 1,282,300 $ 3,972,300 $ 130,000 $ 11,050 $ 141,050
2019 3,210,000 1,164,300 4,374,300 130,000 6,825 136,825
2020 2,200,000 1,056,100 3,256,100 130,000 2,275 132,275
2021 2,340,000 965,300 3,305,300
2022 2,680,000 864,900 3,544,900
2023 2,840,000 754,500 3,594,500
2024 2,720,000 643,300 3,363,300
2025 4,520,000 521,100 5,041,100
2026 4,540,000 385,200 4,925,200
2027 3,035,000 271,575 3,306,575
2028 5,355,000 145,725 5,500,725
2029 2,180,000 32,700 2,212,700
2030
2031
2032
2033
2034
2035
2036
2037
$ 38,310,000 $ 8,087,000 $ 46,397,000 $ 390,000 $ 20,150 $ 410,150
112
City of Pearland FY 2017 CAFR
Page 2 of 4
Permanent Improvement Bonds,Series 2013 Certificates of Obligation,Series 2013
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 305,000 $ 339,368 $ 644,368 $ 85,000 $ 104,963 $ 189,963
2019 320,000 326,868 646,868 90,000 102,338 192,338
2020 320,000 314,068 634,068 100,000 98,988 198,988
2021 330,000 301,068 631,068 100,000 94,488 194,488
2022 330,000 287,868 617,868 100,000 89,488 189,488
2023 340,000 274,468 614,468 100,000 84,488 184,488
2024 350,000 260,668 610,668 100,000 79,488 179,488
2025 360,000 246,468 606,468 110,000 74,238 184,238
2026 370,000 231,868 601,868 110,000 69,288 179,288
2027 370,000 217,068 587,068 110,000 64,888 174,888
2028 380,000 202,068 582,068 110,000 60,488 170,488
2029 390,000 186,424 576,424 120,000 55,738 175,738
2030 400,000 169,880 569,880 120,000 50,563 170,563
2031 410,000 152,411 562,411 120,000 45,313 165,313
2032 420,000 134,203 554,203 120,000 40,063 160,063
2033 430,000 115,288 545,288 130,000 34,513 164,513
2034 440,000 95,713 535,713 130,000 28,663 158,663
2035 450,000 75,688 525,688 130,000 22,813 152,813
2036 460,000 55,213 515,213 140,000 16,650 156,650
2037 480,000 33,763 513,763 140,000 10,175 150,175
2038 490,000 11,331 501,331 150,000 3,469 153,469
$ 8,145,000 $ 4,031,762 $ 12.176.762 $ 2,415,000 $ 1,231,103 $ 3,646.103
Permanent Improvement and Refunding Bonds,Series Certificates of Obligation,Series 2014
2014
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 1,085,000 $ 1,603,231 $ 2,688,231 $ 230,000 $ 114,519 $ 344,519
2019 1,240,000 1,573,031 2,813,031 230,000 109,919 339,919
2020 2,310,000 1,508,281 3,818,281 230,000 105,319 335,319
2021 2,415,000 1,401,706 3,816,706 230,000 100,719 330,719
2022 2,510,000 1,284,831 3,794,831 230,000 96,119 326,119
2023 3,165,000 1,149,206 4,314,206 230,000 90,369 320,369
2024 2,710,000 1,002,331 3,712,331 230,000 82,319 312,319
2025 2,830,000 863,831 3,693,831 235,000 73,019 308,019
2026 3,055,000 716,706 3,771,706 230,000 63,719 293,719
2027 4,120,000 537,331 4,657,331 235,000 55,594 290,594
2028 3,145,000 385,191 3,530,191 235,000 48,544 283,544
2029 5,860,000 218,850 6,078,850 230,000 41,425 271,425
2030 535,000 90,950 625,950 230,000 34,238 264,238
2031 535,000 69,550 604,550 230,000 26,906 256,906
2032 535,000 48,150 583,150 230,000 19,431 249,431
2033 535,000 28,088 563,088 230,000 11,813 241,813
2034 535,000 9,363 544,363 235,000 3,966 238,966
2035
2036
2037
$ 37,120,000 $ 12,490,627 $ 49,610,627 $ 3,930,000 $ 1,077,938 $ 5,007,938
113
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
COMBINING SCHEDULE OF GOVERNMENTAL ACTIVITY LONG-TERM DEBT
BY MATURITY DATE
September 30,2017
Permanent Improvement and Refunding Bonds,Series Permanent Improvement Bonds,Series 2015
2015
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 775,000 $ 2,078,894 $ 2,853,894 $ 425,000 $ 219,575 $ - 644,575
2019 2,130,000 2,035,319 4,165,319 425,000 211,075 636,075
2020 3,755,000 1,926,819 5,681,819 425,000 202,575 627,575
2021 3,890,000 1,768,019 5,658,019 425,000 194,075 619,075
2022 4,020,000 1,619,069 5,639,069 425,000 185,575 610,575
2023 4,010,000 1,462,119 5,472,119 425,000 176,013 601,013
2024 4,975,000 1,247,494 6,222,494 425,000 165,388 590,388
2025 4,540,000 1,009,619 5,549,619 425,000 151,575 576,575
2026 4,745,000 777,494 5,522,494 425,000 134,575 559,575
2027 4,155,000 554,994 4,709,994 425,000 117,575 542,575
2028 4,100,000 348,619 4,448,619 425,000 100,575 525,575
2029 3,450,000 159,869 3,609,869 425,000 85,700 510,700
2030 905,000 59,478 964,478 420,000 73,025 493,025
2031 720,000 33,638 753,638 425,000 60,350 485,350
2032 675,000 10,969 685,969 425,000 47,600 472,600
2033 425,000 34,425 459,425
2034 425,000 20,719 445,719
2035 425,000 6,906 431,906
2036
2037
2038
$ 46,845,000 $ 15,092,413 $ 61,937,413 $ 7,645,000 $ 2,187,301 $ 9,832,301
Certificates of Obligation,Series 2015 Permanent Improvement and Refunding Bonds,Series
2015A
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 245,000 $ 126,550 $ 371,550 $ 550,000 $ 259,475 $ 809,475
2019 245,000 121,650 366,650 1,990,000 224,125 2,214,125
2020 240,000 116,800 356,800 395,000 188,350 583,350
2021 240,000 112,000 352,000 410,000 176,275 586,275
2022 240,000 106,600 346,600 430,000 163,675 593,675
2023 245,000 100,538 345,538 535,000 150,538 685,538
2024 245,000 93,800 338,800 520,000 136,050 656,050
2025 240,000 85,325 325,325 540,000 120,150 660,150
2026 245,000 75,625 320,625 555,000 103,725 658,725
2027 245,000 65,825 310,825 580,000 86,700 666,700
2028 245,000 57,250 302,250 855,000 65,175 920,175
2029 245,000 49,900 294,900 1,745,000 26,175 1,771,175
2030 240,000 42,625 282,625
2031 240,000 35,275 275,275
2032 245,000 27,697 272,697
2033 240,000 19,969 259,969
2034 240,000 12,169 252,169
2035 245,000 4,134 249,134
2036
2037
$ 4,370,000 $ 1,253,732 $ 5,623,732 $ 9,105,000 $ 1,700,413 $ 10,805,413
114
City of Pearland FY 2017 CAFR
Page 3 of 4
Permanent Improvement and Refunding Bonds,Series Certificates of Obligation,Series 2016
2016A
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 825,000 $ 1,265,200 $ 2,090,200 $ 700,000.0 $ 328,850.0 $ 1,028,850
2019 820,000 1,248,750 2,068,750 700,000 314,850 1,014,850
2020 985,000 1,230,700 2,215,700 700,000 300,850 1,000,850
2021 1,120,000 1,209,650 2,329,650 700,000 286,850 986,850
2022 1,125,000 1,170,325 2,295,325 700,000 272,850 972,850
2023 1,135,000 1,113,825 2,248,825 700,000 258,850 958,850
2024 1,150,000 1,056,700 2,206,700 700,000 244,850 944,850
2025 1,160,000 998,950 2,158,950 700,000 230,850 930,850
2026 1,200,000 939,950 2,139,950 700,000 216,850 916,850
2027 1,215,000 879,575 2,094,575 700,000 195,850 895,850
2028 1,230,000 824,600 2,054,600 700,000 174,850 874,850
2029 1,960,000 770,600 2,730,600 700,000 157,350 857,350
2030 6,725,000 606,700 7,331,700 700,000 136,350 836,350
2031 4,100,000 390,200 4,490,200 695,000 115,425 810,425
2032 4,425,000 219,700 4,644,700 700,000 94,500 794,500
2033 820,000 114,800 934,800 700,000 73,500 773,500
2034 820,000 82,000 902,000 700,000 52,500 752,500
2035 820,000 49,200 869,200 700,000 31,500 731,500
2036 820,000 16,400 836,400 700,000 10,500 710,500
2037
2038
$ 32,455,000 $ 14,187,825 $ 46,642,825 $ 13,295,000 $ 3,497,975 $ 16,792,975
Permanent Improvement Refunding Bonds,Series 2016B Permanent Improvement Refunding Bonds,Series 2017
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 2,085,000 $ 1,312,825 $ 3,397,825 $ 2,060,000 $ 2,491,920 $ 4,551,920
2019 2,050,000 1,240,550 3,290,550 1,095,000 2,349,894 3,444,894
2020 2,810,000 1,143,350 3,953,350 1,095,000 2,300,619 3,395,619
2021 2,910,000 1,028,950 3,938,950 2,495,000 2,216,344 4,711,344
2022 3,025,000 895,125 3,920,125 2,540,000 2,090,469 4,630,469
2023 2,675,000 752,625 3,427,625 2,590,000 1,962,219 4,552,219
2024 2,810,000 615,500 3,425,500 2,645,000 1,831,344 4,476,344
2025 2,005,000 495,125 2,500,125 2,695,000 1,697,844 4,392,844
2026 2,015,000 394,625 2,409,625 2,760,000 1,561,469 4,321,469
2027 2,105,000 291,625 2,396,625 4,410,000 1,382,219 5,792,219
2028 1,105,000 211,375 1,316,375 4,580,000 1,157,469 5,737,469
2029 1,140,000 155,250 1,295,250 3,010,000 967,719 3,977,719
2030 1,265,000 95,125 1,360,125 2,260,000 858,569 3,118,569
2031 1,270,000 31,750 1,301,750 7,000,000 719,669 7,719,669
2032 7,205,000 470,569 7,675,569
2033 2,560,000 275,269 2,835,269
2034 2,615,000 183,209 2,798,209
2035 1,095,000 114,975 1,209,975
2036 - 1,095,000 65,700
2037 1,095,000 21,900
$ 29,270,000 $ 8,663,800 $ 37,933,800 $ 56,900,000 $ 24,719,389 $ 79,341,789
115
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
COMBINING SCHEDULE OF GOVERNMENTAL ACTIVITY LONG-TERM DEBT
BY MATURITY DATE
September 30,2017
Certificates of Obligation,Series 2017 Pearland Economic Development Corporation
Sales Tax Revenue Refunding Bonds,Series 2016
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 310,000 $ 197,107 $ 507,107 $ 905,000 $ 324,500 $ 1,229,500
2019 315,000 194,250 509,250 930,000 303,142 1,233,142
2020 310,000 188,000 498,000 955,000 281,194 1,236,194
2021 310,000 180,250 490,250 975,000 258,656 1,233,656
2022 310,000 170,950 480,950 1,000,000 235,646 1,235,646
2023 300,000 161,800 461,800 1,025,000 212,046 1,237,046
2024 310,000 151,100 461,100 1,055,000 187,856 1,242,856
2025 310,000 138,700 448,700 1,080,000 162,958 1,242,958
2026 310,000 126,300 436,300 1,105,000 137,470 1,242,470
2027 310,000 113,900 423,900 1,130,000 111,392 1,241,392
2028 310,000 101,500 411,500 1,165,000 84,724 1,249,724
2029 310,000 89,100 399,100 1,195,000 57,230 1,252,230
2030 310,000 76,700 386,700 1,230,000 29,028 1,259,028
2031 315,000 64,200 379,200
2032 310,000 53,250 363,250
2033 310,000 43,950 353,950
2034 310,000 34,456 344,456
2035 310,000 24,769 334,769
2036 310,000 15,081 325,081
2037 315,000 5,119 320,119
2038
$ 6,205,000 $ 2,130 482 S 8,335,482 S 13,750,000 S 2.385,842 $ 16,135842
Development Authority of Pearland Development Authority of Pearland
Tax Increment Contract Revenue Bonds,Series 2013 Tax Increment Contract Revenue Bonds,Series 2014
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 405,000 $ 286,143 $ 691,143 $ 535,000 $ 176,392 $ 711,392
2019 420,000 270,875 690,875 550,000 161,840 711,840
2020 445,000 255,041 700,041 475,000 146,880 621,880
2021 465,000 238,264 703,264 490,000 133,960 623,960
2022 735,000 220,734 955,734 505,000 120,632 625,632
2023 560,000 193,024 753,024 520,000 106,896 626,896
2024 615,000 171,912 786,912 530,000 92,752 622,752
2025 670,000 148,727 818,727 545,000 78,336 623,336
2026 725,000 123,468 848,468 560,000 63,512 623,512
2027 785,000 96,135 881,135 575,000 48,280 623,280
2028 850,000 66,541 916,541 590,000 32,640 622,640
2029 915,000 34,496 949,496 610,000 16,592 626,592
2030
2031
2032
2033
2034
2035
2036
2037
$ 7,590,000 $ 2,105,360 $ 9,695,360 $ 6,485,000 $ 1,178,712 $ 7,663,712
116
City of Pearland FY 2017 CAFR
Page 4 of 4
Development Authority of Pearland Development.Authority of Pearland
Tax Increment Contract Revenue&Refunding Bonds,Series Tax Increment Contract Revenue Bonds,Series 2016
2015
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 4,465,000 $ 1,572,623 $ 6,037,623 $ 1,015,000 $ 266,289 $ 1,281,289
2019 4,590,000 1,450,282 6,040,282 . 1,035,000 243,756 1,278,756
2020 4,395,000 1,324,516 5,719,516 900,000 220,779 1,120,779
2021 4,510,000 1,204,093 5,714,093 920,000 200,799 1,120,799
2022 4,380,000 1,080,519 5,460,519 940,000 180,375 1,120,375
2023 4,705,000 960,507 5,665,507 955,000 159,507 1,114,507
2024 4,800,000 831,590 5,631,590 985,000 138,306 1,123,306
2025 4,900,000 700,070 5,600,070 1,005,000 116,439 1,121,439
2026 5,005,000 565,810 5,570,810 1,025,000 94,128 1,119,128
2027 5,110,000 428,673 5,538,673 1,050,000 71,373 1,121,373
2028 5,215,000 288,659 5,503,659 1,070,000 48,063 1,118,063
2029 5,320,000 145,768 5,465,768 1,095,000 24,309 1,119,309
2030
2031
2032
2033
2034
2035
2036
2037
2038
$ 57,395,000 S 10,553,110 S 07,945,110 S II.995.ono S 1,764,123 S 13,759,123
117
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
COMBINING SCHEDULE OF ENTERPRISE FUND LONG-TERM DEBT
BY MATURITY DATE
September 30,2017
Water&Sewer Revenue Bonds, Water&Sewer Revenue Bonds,
Series 1999 Series 2007
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 565,000 $ 80,960 $ 645,960 $ 199,325 $ 199,325
2019 585,000 54,970 639,970 199,325 199,325
2020 610,000 28,060 638,060 199,325 199,325
2021 199,325 199,325
2022 199,325 199,325
2023 199,325 199,325
2024 199,325 199,325
2025 199,325 199,325
2026 199,325 199,325
2027 199,325 199,325
2028 199,325 199,325
2029 3,615,000 398,650 4,013,650
2030 3,795,000 272,125 4,067,125
2031 3,980,000 139,300 4,119,300
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
$ 1,760,000 $ 163,990 $ 1,923,990 $ 11,390,000 $ 3,002,650 $ 14,392,650
Permanent Improvement and Refunding Bonds, Water&Sewer Revenue Bonds,
Series 2009(water/sewer portion) Series 2010A
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 2,155,000 $ 45,988 $ 2,200,988 $ 440,000 $ 467,481 $ 907,481
2019 455,000 453,731 908,731
2020 475,000 438,944 913,944
2021 495,000 422,319 917,319
2022 515,000 402,519 917,519
2023 535,000 381,919 916,919
2024 555,000 360,519 915,519
2025 580,000 338,319 918,319
2026 600,000 315,119 915,119
2027 625,000 291,119 916,119
2028 650,000 265,338 915,338
2029 680,000 237,713 917,713
2030 710,000 208,813 918,813
2031 740,000 177,750 917,750
2032 755,000 144,450 899,450
2033 785,000 110,475 895,475
2034 825,000 75,150 900,150
2035 845,000 38,025 883,025
2036
2037
2038
2039
2040
$ 2,155,000 $ 45,988 $ 2,200,988 $ 11,265,000 $ 5,129,703 $ 16,394,703
118
City of Pearland FY 2017 CAFR
Page l of 2
Water&Sewer Revenue Bonds, Permanent Improvement and Refunding Bonds,
Series 2010B Series 2012(water/sewer portion)
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 405,000 $ 261,644 $ 666,644 $ 360,000 $ 186,200 546,200
2019 425,000 248,988 673,988 365,000 171,700 536,700
2020 445,000 235,175 680,175 370,000 157,000 527,000
2021 1,750,000 219,600 1,969,600 370,000 142,200 512,200
2022 1,830,000 149,600 1,979,600 385,000 127,100 512,100
2023 1,910,000 76,400 1,986,400 395,000 111,500 506,500
2024 1,480,000 74,000 1,554,000
2025 1,480,000 22,200 1,502,200
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
$ 6,765,000 $ 1,191,407 $ 7,956,407 $ 5,205,000 $ 991,90(1 S 6,196,900
Water&Sewer Revenue Bonds, Water&Sewer Revenue Bonds,
Series 2012 Series 2014
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 765,000 $ 196,055 $ 961,055 220,000 308,419 528,419
2019 780,000 180,755 960,755 230,000 299,619 529,619
2020 800,000 165,155 965,155 240,000 290,419 530,419
2021 230,000 141,155 371,155 255,000 280,819 535,819
2022 230,000 134,255 364,255 270,000 270,619 540,619
2023 240,000 127,355 367,355 280,000 259,819 539,819
2024 230,000 120,155 350,155 295,000 248,619 543,619
2025 225,000 113,255 338,255 310,000 236,819 546,819
2026 175,000 106,505 281,505 330,000 224,419 554,419
2027 180,000 101,080 281,080 345,000 211,219 556,219
2028 185,000 95,500 280,500 365,000. 200,869 565,869
2029 190,000 89,488 279,488 385,000 189,919 574,919
2030 195,000 83,313 278,313 405,000 177,888 582,888
2031 200,000 76,975 276,975 425,000 164,725 589,725
2032 300,000 70,225 370,225 445,000 150,913 595,913
2033 315,000 60,100 375,100 470,000 135,894 605,894
2034 325,000 49,075 374,075 495,000 120,031 615,031
2035 335,000 37,700 372,700 520,000 102,706 622,706
2036 345,000 25,556 370,556 550,000 84,506 634,506
2037 360,000 13,050 373,050 575,000 65,256 640,256
2038 605,000 45,131 650,131
2039 640,000 23,200 663,200
2040
$ 6,605,000 $ 1,986,707 $ 8,591,707 $ 8,655,000 $ 4,091,828 $ 12,746,828
119
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
COMBINING SCHEDULE OF ENTERPRISE FUND LONG-TERM DEBT
BY MATURITY DATE
September 30,2017
Water and Sewer Revenue Bonds, Water&Sewer Revenue Bonds,
Series 2016A Series 2016B
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 445,000 $ 236,363 $ 681,363 $ 1,230,000 S 7,524 $ 1,237,524
2019 445,000 223,013 668,013 1,230,000 7,524 1,237,524
2020 445,000 209,663 654,663 1,235,000 7,524 1,242,524
2021 445,000 196,313 641,313 1,235,000 7,524 1,242,524
2022 445,000 187,413 632,413 1,235,000 7,524 1,242,524
2023 440,000 178,513 618,513 1,235,000 7,524 1,242,524
2024 445,000 169,713 614,713 1,230,000 6,412 1,236,412
2025 445,000 160,813 605,813 1,235,000 3,952 1,238,952
2026 440,000 151,913 591,913
2027 445,000 134,313 579,313
2028 445,000 116,513 561,513
2029 445,000 106,500 551,500
2030 445,000 93,150 538,150
2031 440,000 79,800 519,800
2032 445,000 66,600 511,600
2033 445,000 53,250 498,250
2034 445,000 39,900 484,900
2035 440,000 26,550 466,550
2036 445,000 13,350 458,350
2037
2038
2039
2040
2041
2042
2043
2044
2045
$ 8,435,000 $ 2,443,643 $ 10,878,643 $ 9,865,000 $ 55,508 $ 9,920,508
Water&Sewer Revenue Bonds, Water&Sewer Revenue Bonds,
Series 2016C Series 2017A
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 1,860,000 $ 315,066 $ 2,175,066 $ 1,005,000 $ 59,079 $ 1,064,079
2019 1,860,000 315,066 2,175,066 1,010,000 59,079 1,069,079
2020 1,860,000 315,066 2,175,066 1,010,000 59,079 1,069,079
2021 1,855,000 315,066 2,170,066 1,010,000 58,473 1,068,473
2022 1,700,000 315,066 2,015,066 1,015,000 55,948 1,070,948
2023 1,700,000 315,066 2,015,066 1,020,000 51,380 1,071,380
2024 1,700,000 313,536 2,013,536 1,025,000 44,954 1,069,954
2025 1,700,000 310,136 2,010,136 1,030,000 36,447 1,066,447
2026 1,700,000 304,696 2,004,696 1,045,000 25,941 1,070,941
2027 1,700,000 297,386 1,997,386 1,055,000 13,610 1,068,610
2028 1,700,000 288,206 1,988,206
2029 1,700,000 278,176 1,978,176
2030 1,700,000 267,296 1,967,296
2031 1,700,000 255,396 1,955,396
2032 1,700,000 242,476 1,942,476
2033 1,700,000 228,536 1,928,536
2034 1,700,000 213,746 1,913,746
2035 1,700,000 198,106 1,898,106
2036 1,700,000 181,786 1,881,786
2037 1,700,000 164,786 1,864,786
2038 1,700,000 147,446 1,847,446
2039 1,700,000 129,766 1,829,766
2040 1,700,000 111,746
$ 48,240,000 $ 6,106,098 $ 45,470,968 $ 10,225,000 $ 463,990 $ 10,688,990
120
City of Pearland FY 2017 CAFR
Page 2 of 2
Water&Sewer Revenue Bonds, Water and Sewer Revenue Refunding Bonds,
Series 2017B Series 2017C
Fiscal Year Principal Interest Total Principal Interest Total
2018 $ 340,000 $ 184,925 $ 524,925 $ 1,920,000 $ 2,812,201 $ 4,732,201
2019 340,000 184,925 524,925 2,025,000 2,668,531 4,693,531
2020 340,000 184,925 524,925 2,085,000 2,567,281 4,652,281
2021 340,000 184,721 524,721 2,150,000 2,463,031 4,613,031
2022 340,000 183,871 523,871 2,270,000 2,355,531 4,625,531
2023 345,000 182,341 527,341 2,980,000 2,242,031 5,222,031
2024 345,000 180,168 525,168 4,045,000 2,093,031 6,138,031
2025 350,000 177,304 527,304 4,275,000 1,890,781 6,165,781
2026 350,000 173,734 523,734 6,020,000 1,677,031 7,697,031
2027 355,000 169,604 524,604 6,275,000 1,376,031 7,651,031
2028 360,000 165,025 525,025 6,555,000 1,062,281 7,617,281
2029 365,000 160,021 525,021 3,230,000 734,531 3,964,531
2030 370,000 154,582 524,582 3,275,000 605,331 3,880,331
2031 375,000 148,699 523,699 1,825,000 507,081 2,332,081
2032 385,000 142,362 527,362 3,150,000 452,331 3,602,331
2033 390,000 135,586 525,586 3,245,000 326,331 3,571,331
2034 395,000 128,488 523,488 3,345,000 196,531 3,541,531
2035 405,000 121,062 526,062 765,000 92,000 857,000
2036 410,000 113,245 523,245 765,000 61,400 826,400
2037 420,000 105,168 525,168 770,000 30,800 800,800
2038 430,000 96,768 526,768
2039 435,000 88,125 523,125
2040 445,000 79,338 524,338
2041 455,000 70,305 525,305
2042 465,000 61,023 526,023
2043 475,000 51,490 526,490
2044 485,000 41,705 526,705
2045 495,000 31,666 526,666
2046 505,000 21,370 526,370
2047 515,000 10,815 525,815
$ 12,025,000 $ 3,733,361 $ 15,758,361 $ 60,970,000 $ 26,214,097 $ 87,184,097
121
City of Pearland FY 2017 CAFR
•
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•
122
City of Pearland FY 2017 CAFR
Statistical Section
(Unaudited)
123
City of Pearland FY 2017 CAFR
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' 124
City of Pearland FY 2017 CAFR
Unaudited Statistical Section
This part of the City's comprehensive annual financial report presents detailed information as a context for
understanding what the information in the financial statements, note disclosures, and required supplementary
information says about the government's overall financial health.
Contents Page
Financial Trends 126
These schedules contain trend information to help the reader understand how the
government's financial performance and well-being have changed over time.
Revenue Capacity 138
These schedules contain information to help the reader assess the government's most
significant local revenue sources, the property tax and sales tax.
Debt Capacity 146
These schedules present information to help the reader assess the affordability of the
government's current levels of outstanding debt and the government's ability to issue
additional debt in the future.
Demographic and Economic Information 153
These schedules offer demographic and economic indicators to help the reader understand
the environment within which the government's financial activities take place.
Operating Information 156
These schedules contain service and infrastructure data to help the reader understand how
the information in the government's financial report relates to the services the government
provides and the activities it performs.
Sources: Unless otherwise noted,the information in these schedules is derived from the comprehensive annual
financial reports for the relevant year.
125
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
NET POSITION BY COMPONENT
Last Ten Fiscal Years
Amounts in(000's)
(Accrual Basis of Accounting)
2008 2009 2010 2011
Governmental Activities
Net investment in capital assets $410,002 $429,054 $422,643 $413,439
Restricted 10,864 10,615 18,020 16,462
Unrestricted 10,903 13,330 13,692 14,543
Total governmental activities
net position $431,769 $452,999 $454,355 $444,444
Business-type activities
Net investment in capital assets $138,679 $146,150 $144,244 $156,629
Restricted 16,094 11,965 17,587 5,603
Unrestricted 3,406 9,256 11,942 13,910
Total business-type activities
net position $158,179 $167,371 $173,773 $176,142
Primary government
Investment in capital assets $548,681 $575,204 $566,887 $570,068
Restricted 26,958 22,580 35,607 22,065
Unrestricted 14,309 22,586 25,634 28,453
Total primary government
net position $589,948 $620,370 $628,128 $620,586
(1)Due to implementation of GASB 61, the City's component units are now considered
blended component units versus discretely presented as in years prior to fiscal year 2013.
Fiscal year 2012 has been restated for comparison purposes.
(2)Restated due to implementation of GASB 65 in fiscal year 2014. Fiscal years 2012 and
2013 have been restated for comparison purposes.
126
City of Pearland FY 2017 CAFR
2012 (2) 2013 (1)(2) 2014 2015 2016 2017
$353,160 $391,032 $397,346 $423,706 $439,923 $449,141
38,933 43,413 52,209 53,883 60,640 60,310
10,117 14,696 2,477 3,800 3,185 (5,045)
$402,210 $449,141 $452,032 $481,389 $503,748 $504,406
$156,888 $165,915 $174,955 $186,819 $187,937 $205,827
9,821 9,542 14,484 13,539 15,852 13,972
12,439 16,704 15,612 12,815 13,351 6,972
$179,148 $192,161 $205,051 $213,173 $217,140 $226,771
$510,048 $556,947 $572,301 $610,525 $627,860 $654,968
48,754 52,955 66,693 67,422 76,492 74,282
22,556 31,400 18,089 16,615 16,536 1,927
$581,358 $641,302 $657,083 $694,,562 $720,888 $731,177
•
127
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
CHANGES IN NET POSI77ON
Last Ten Fiscal Years
Amounts in(000's)
(Accrual Basis of Accounting)
2008 2009 2010 2011
Expenses
Governmental activities:
General Government $ 11,161 $ 12,355 $ 13,439 $ 15,945
Public Safety 17,684 22,438 24,268 23,042
Public Works 24,532 26,893 35,679 31,130
Community Services 3,336 3,290 3,323 3,254
Parks and Recreation 7,157 7,240 7,699 8,062
Economic Development
Interest on long-term debt 12,266 11,647 13,738 13,142
Total government activities expenses 76,136 83,863 98,146 94,575
Business-type activities:
Water and Sewer 22,570 25,439 27,157 29,192
Solid Waste 6,024 7,106 7,089 7,285
Total business-type activities 28,594 32,545 34,246 36,477
Total primary government expenses $104,730 $116,408 $132,392 $131,052
Program Revenue
Governmental activities:
Charges for services:
General Government $ $ 6,637 $ 6,637 $
Public Safety 2,959 3,524 3,296 3,679
Public Works 103 35 10 18
Community Services 5,130 4,755 4,312 4,632
Parks and Recreation 936 672 906 2,027
Economic Development
Operating grants and contributions:
General Government 3,951 4,913 5,215 5,488
Public Safety 230 420 641 407
Public Works 551 375 207 675
Community Services 129 202 159 366
Parks and Recreation 115 450 424 462
Economic Development
Capital grants and contributions:
General Government
Public Safety 503 279 98
Public Works 15,263 26,092 29,800 10,330
Parks and Recreation 261 4,653
Total governmental activities program revenues 30,131 53,007 51,705 28,084
Business-type activities:
Charges for services:
Water and Sewer 21,524 26,617 24,961 28,664
Solid Waste 6,038 6,766 7,313 7,258
Operating grants and contributions:
Water and Sewer 315 2,464 70 61
Capital grants and contributions:
Water and Sewer 5,869 6,125 8,611 4,215
Total business-type activities program revenues 33,746 41,972 40,955 40,198
Total primary government program revenues $ 63,877 $ 94,979 $ 92,660 $ 68,282
(1)Due to implementation of GASB 61,the City's component units are now considered blended component
units versus discretely presented as in years prior to fiscal year 2013.Fiscal year 2012 has been restated for
comparison purposes.
(2)Restated due to implementation of GASB 65 in fiscal year 2014. Fiscal years 2012 and 2013 have been
restated for comparison purposes.
128
City of Pearland FY 2017 CAFR
Page I of 2
2012(2) 2013(1)(2) 2014 2015 2016 2017
$ 13,334 $ 13,358 $ 12,241 $ 17,189 $ 18,016 $ 20,121
27,403 28,944 32,130 33,179 38,933 44,343
28,510 31,690 38,579 45,894 46,449 49,221
4,267 3,807 4,687 3,641 3,711 5,107
9,264 9,524 6,896 3,731 4,820 8,823
26,311 17,411 26,498 26,159 31,330 31,293
11,572 10,534 16,225 15,569 15,946 14,422
120,661 115,268 137,256 145,362 159,205 173,331
29,392 31,289 32,444 34,266 37,941 . 41,475
7,528 8,324 6,664 6,417 6,833 7,059
36,920 39,613 39,108 40,683 44,774 48,534
$157,581 $154,881 $176,364 $186,045 $203,979 $ 221,865
$ 7,624 $ 6,326 $ 6,637 $ 7,624 $ 8,547 $ 9,518
4,206 7,410 2,793 4,110 4,276 3,949
43 3,096 322 338 320 1,395
5,855 3,264 7,375 7,771 8,520 8,026
2,080 2,209 2,290 2,412 2,218 2,001
413 414 430 1,209 13 3,886
6,045 44 440 747 2,595
711 603 434 294
53 1,388 7,612 4,589 11,123 12,459
311 108 337 216 575
542 182 474 1,586
180
18,743 52,921 29,269 36,440 24,636 10,107 •
100
46,726 78,145 58,413 67,336 • 62,248 51,916
27,535 29,008 28,929 30,201 43,677 51,544
7,654 8,175 7,008 6,637 6,945 6,549
205 2,512 30
8,118 16,273 17,677 13,177 4,094 2,027
43,512 53,456 53,614 52,527 54,746 60,120
S 90,238 $131,601 $112,027 $119,863 S116,994 $ 112,036
129
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
CHANGES IN NET POSITION
Last Ten Fiscal Years
Amounts in(000's)
(Accrual Basis of Accounting)
2008 2009 2010 2011
Net(Expense)/Revenue
Governmental activities $(46,005) $(30,856) $(46,441) $(66,491)
Business-type activities 5,152 9,427 6,709 3,721
Total primary government net expense $(40,853) $(21,429) $(39,732) $(62,770),
General Revenues and Other Changes in Net Position
Governmental activities:
Taxes:
Property taxes $ 29,492 $ 31,140 $ 32,963 $ 33,451
Sales and use taxes 12,581 14,218 13,578 13,983
Franchise taxes 4,427 5,075 5,426 5,605
Investment earnings 4,572 1,376 253 157
Miscellaneous 2,911 6,294 1,028 1,854
Special item
Transfers 1,330 621 1,186 1,475
Total governmental activities $ 55,313 $ 58,724 $ 54,434 $ 56,525
Business-type activities:
Investment earnings $ 1,669 $ 363 $ 100 $ 116
Miscellaneous 12 23 779 9
Transfers (1,330) (621) (1,186) (1,475)
Total business-type activities 351 (235) (307) (1,350)
Total primary government $ 55,664 S 58,489 S 54.127 $ 55,175
Change in Net Position:
Governmental activities $ 9,308 $ 27,868 $ 7,993 $ (9,966)
Business-type activities 5,503 9,192 6,402 2,371
Total primary government $ 14,811 $ 37,060 $ 14,395 S (7,595)
(1)Due to implementation of GASB 61,the City's component units are now considered blended component
units versus discretely presented as in years prior to fiscal year 2013.Fiscal year 2012 has been restated for
comparison purposes.
(2)Restated due to implementation of GASB 65 in fiscal year 2014. Fiscal years 2012 and 2013 have been
restated for comparison purposes.
130
City of Pearland FY 2017 CAFR
Page 2 of 2
2012(2) 2013(1)(2) 2014 2015 2016 2017
$(73,935) $(37,123) $(78,843) $(78,026) $(96,957) $(121,414)
6,592 13,843 14,506 11,844 9,972 11,586
$(67,343) $(23,280) S(64,337) S(66.1 82) S(86.985) S(109,828)
$ 52,230 $ 54,433 $ 57,378 $ 62,974 $ 67,644 $ 76,686
22,969 24,942 27,295 29,970 31,293 31,976
5,670 5,999 6,484 6,971 7,228 7,263
134 155 254 491 729 622
1,554 1,701 2,398 4,149 5,957 3,108
(3,039)
2,269 1,607 2,031 2,828 6,464 2,417
$ 84,826 $ 88,837 $ 92,801 $107,383 $119,315 $ 122,072
$ 68 $ 95 $ 139 $ 325 $ 293 $ 396
444 682 274 219 166 66
(2,269) (1,607) (2,030) (2,828) (6,464) (2,417)
(1,757) (830) (1,617) (2,284) (6,005) (1,955)
$83,069 $ 88,007 $ 91,184 5105,099 $113,310 $ 120,117
$ 10,891 $ 51,714 $ 13,958 $ 29,357 $ 22,358 $ 658
4,835 13,013 12,889 9,560 3,967 9,631
$ 15,726 $ 64,727 $ 26,847 $ 38,917 $ 26,325 $ 10,289
131
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
Amounts in(000's)
(Modified Accrual Basis of Accounting)
2008 2009 2010 2011
General fund
Non-spendable $ 181 $ 119 $ 146 $ 130
Restricted 126
Assigned 4,698 699 117 160
Unassigned 8,647 11,401 12,599 14,108
Total General Fund $ 13,526 $ 12,219 $ 12,862 $ 14,524
All other governmental funds
Non-spendable $ $ $ $
Restricted
Debt service 6,835 7,246 6,705 5,160
Capital improvements 110,715 62,467 30,893 23,461
Public safety 583 699 612 541
Economic Development
Community development programs
Tourism 1,247 1,344 1,394 1,452
Parks and recreation 1,183 1,094 1,214 1,143
Capital projects -other 1,346 1,146 962 810
Other 629 85 79 87
Unassigned
Total other Governmental Funds $ 122,538 $ 74,081 $ 41,859 $ 32,654
(1)Due to implementation of GASB 61, the City's component units are now considered blended component units
versus discretely presented as in years prior to fiscal year 2013.
132
City of Pearland FY 2017 CAFR
2012 2013 (1) 2014 2015 2016 2017
$ 182 $ 158 $ 202 $ 293 $ 151 $ 101
167 1,554 1,394 1,406 3,994 3,000
17,222 16,911 17,859 19,655 16,775 11,262
$ 17,571 $ • 18,623 $ 19,455 $ 21,354 $ 20,919 $ 14,363
$ $ 183 $ 209 $ 173 $ $ 4
4,992 5,192 5,951 5,835 8,276 5,912
13,776 14,536 17,519 22,484 47,361 59,200
702 715 390 394 342 364
20,777 23,814 24,117 32,844 36,795
1,821 2,267 2,994 3,685 4,194 4,604
968 985 168 105 131 262
797 866
215 638 918 1,149 1,264 779
(28)
$ 23,271 $ 46,159 $ 51,963 $ 57,940 $ 94,411 $ 107,892
133
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
Amounts in(000's)
(Modified Accrual Basis of Accounting)
2008 2009 2010 2011
Revenues
Property taxes $ 29,200 $ 31,349 $ 32,856 $ 33,454
Sales and use taxes 12,581 14,218 13,578 13,983
Franchise fees 4,427 5,075 5,426 5,605
Licenses and permits 2,992 2,079 1,807 1,721
Fines and forfeitures 2,086 2,325 2,475 2,895
Charges for services 7,512 8,885 9,328 11,687
Investment earnings 4,568 1,375 591 156
Intergovernmental 3,731 7,589 3,689 2,199
Other 5,638 8,980 982 1,560
Total Revenues 72,735 81,875 70,732 73,260
Expenditures .
General government 7,388 8,412 8,527 10,866
Public safety 19,604 22,310 23,784 23,926
Public works 7,536 12,051 7,108 6,505
• Community services 3,426 3,386 3,839 3,376
Parks and recreation 6,605 5,789 6,305 7,539
Economic development
Debt service:
Principal 3,160 5,482 6,200 8,217
Interest and other charges 12,382 12,080 13,635 13,543
Capital outlay 27,777 68,615 61,317 25,703
Intergovernmental 3,434 3,250 3,794 3,954
Total Expenditures 91,312 141,375 134,509 103,629
Excess of revenues over(under)expenditures (18,577) (59,500) (63,777) (30,369)
Other Financing Sources(Uses)
Transfers in 4,912 3,246 3,498 3,525
Transfers out (3,582) (2,625) (2,312) (2,050)
Debt issued 31,835 8,520 28,962 21,637
Payment to Escrow Agent (1,630)
Capital leases 649 2,050 1,289
Other 200 (54) 56
Total other Financing Sources(uses) 33,365 9,736 32,198 22,826
Net change in fund balances $ 14,788 , $ (49,764) $ (31,579) $ (7,543)
Debt service as a percentage of noncapital
expenditures 24.5% 24.1% 27.1% 27.9%
(1)Due to implementation of GASB 61,the City's component units are now considered blended component units
versus discretely presented as in years prior to fiscal year 2013.
134
City of Pearland FY 2017 CAFR
2012 2013(1) 2014 2015 2016 2017
$ 34,362 $ 54,475 $ 57,378 $ 62,922 $ 67,569 $ 76,562
15,632 24,942 27,295 29,970 31,293 31,976
5,817 5,999 6,484 6,971 7,228 7,263
2,320 2,989 4,149 4,544 5,677 5,435
3,374 3,534 3,121 3,108 2,931 2,654
11,891 12,982 13,078 14,661 15,313 16,015
92 154 254 433 728 619
3,089 4,595 2,541 3,197 15,959 16,010
2,541 7,973 4,157 7,076 5,065 5,736
79,118 117,643 118,457 132,882 151,765 162,270
7,784 7,958 8,027 10,470 11,609 11,223
25,372 26,204 29,171 32,229 36,818 40,858
5,533 7,812 8,121 10,298 13,292 17,365
4,246 3,523 3,960 3,408 4,294 4,837
7,499 7,244 7,816 5,823 6,458 6,419
17,414 25,248 25,625 31,051 29,001
9,373 15,637 - 15,815 23,790 19,736 24,341
12,401 15,859 16,373 16,595 15,841 15,221
9,201 22,101 15,536 24,471 31,982 43,860
3,992 4,058 4,307 4,792 4,847 6,937
85,401 127,810 134,374 157,501 175,928 200,062
(6,283) (10,167) (15,917) (24,619) (24,163) (37,792)
5,909 15,515 16,507 17,043 26,062 28,466
(5,096) (14,583) (16,967) (15,233) (20,844) (26,860)
49,805 12,060 49,560 81,258 142,701 - 115,718
(54,478) (33,182) (54,303) (89,638) (72,608)
1,179 1,853 574 1,918
3,809 331 4,784 3,157
(51) 14,502 22,555 32,496 60,199 44,716
$ (6,334) $ 4,335 $ 6,638 $ 7,877 $ 36,036 $ 6,924
28.3% 29.8% 27.0% 29.9% 24.8% 25.3%
135
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
SPENDING AND GROWTH ANALYSIS
Last Ten Fiscal Years
Amounts in(000's)
(Modified Accrual Basis of Accounting)
Amounts in(000's)
Expenditures 2008 2009 2010 2011
General Gov't $ 7,406 $ 8,423 $ 19,561 $ 10,877
Public Safety 19,604 22,310 23,784 23,926
Public Works 7,536 12,051 7,108 6,505
Coummunity Servies 3,426 3,386 3,839 3,376
Parks&recreation 6,605 5,789 6,305 7,539
Economic Development 16,899 18,730 15,426 17,391
Debt Service-principal 4,265 7,517 8,525 10,847
Debt service-interest 15,688 15,704 17,096 17,154
Capital outlay 27,777 75,490 64,563 25,768
Intergovernmental 3,434 7,630 4,234 4,127
Total $ 112,640 $ 177,030 $ 170,441 $ 127,510
Distribution of Spending
General Gov't 6.6% 4.8% 11.5% 8.5%
Public Safety 17.4% 12.6% 14.0% 18.8%
Public Works 6.7% 6.8% 4.2% 5.1%
Coummunity Servies 3.0% 1.9% 2.3% 2.6%
Parks&recreation 5.9% 3.3% 3.7% 5.9%
Economic Development 15.0% 10.6% 9.1% 13.6%
Debt Service-principal 3.8% 4.2% 5.0% 8.5%
Debt service-interest 13.9% 8.9% 10.0% 13.5%
Capital outlay 24.7% 42.6% 37.9% 20.2%
Intergovernmental 3.0% 4.3% 2.5% 3.2%
Total 100.0% 100.0% 100.0% 100.0%
Per Capita Expenditures Adjusted for CPI
POPULATION 89,000 92,600 94,100 97,200
PER CAPITA $ 1,266 $ 1,912 $ 1,811 $ 1,312
CPI INDEX(NATIONAL) 215.30 214.54 218.06 224.94
PER CAPITA ADJ TO 2017 $ 1,448 $ 2,195 $ 2,046 $ 1,437
PER CAPITA ADJ TO 2008 $ 1,266 $ 1,919 $ 1,788 $ 1,256
136
City of Pearland FY 2017 CAFR
Average
Compounded
2012 2013 2014 2015 2016 2017 %CHG Growth Rate
$ 7,797 $ 7,958 $ 8,027 $ 10,470 $ 11,609 $ 11,223 51.5% 4.73%
25,372 26,204 29,171 32,229 36,818 40,858 108.4% 8.50%
5,533 7,812 8,121 10,298 13,292 17,365 130.4% 9.72%
4,246 3,523 3,960 3,408 4,294 4,837 41.2% 3.91%
7,499 7,244 7,816 5,823 6,458 6,419 -2.8% -0.32%
20,397 17,414 25,248 25,625 31,051 29,001 71.6% 6.18%
12,893 15,637 15,815 23,790 19,736 24,341 470.7% 21.35%
15,534 15,859 16,373 . 16,595 15,841 15,221 -3.0% -0.34%
9,201 22,101 15,536 24,471 31,982 43,860 57.9% 5.21%
4,158 4,058 4,307 4,792 4,847 6,937 102.0% 8.13%
$ 112,630 $ 127,810 $ 134,374 $ 157,501 $ 175,928 $ 200,062 77.6% 6.59%
6.9% 6.2% 6.0% 6.6% 6.6% 5.6%
22.5% 20.5% 21.7% 20.5% 20.9% 20.4%
4.9% 6.1% 6.0% 6.5% 7.6% 8.7%
3.8% 2.8% 2.9% 2.2% 2.4% 2.4%
6.7% 5.7% 5.8% 3.7% 3.7% 3.2%
18.1% 13.6% 18.8% 16.3% 17.6% 14.5%
11.4% 12.2% 11.8% 15.1% 11.2% 12.2%
13.8% 12.4% 12.2% 10.5% 9.0% 7.6% ,
8.2% 17.3% 11.6% 15.5% 18.2% 21.9%
3.7% 3.2% 3.2% 3.0% 2.8% 3.5%
100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Average
Compounded
Growth Rate
99,800 104,100 106,900 112,300 117,100 121,500 3.52%
$ 1,129 $ 1,228 $ 1,257 $ 1,403 $ 1,502 $ 1,647 2.97%
229.59 232.96 234.75 236.70 241.40 246.37 1.51%
$ 1,211 $ 1,298 $ 1,319 $ 1,460 $ 1,533 $ 1,647 1.44%
$ 1,058 $ 1,135 $ 1,153 $ 1,276 $ 1,340 $ 1,439 1.44%
137
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE
OF TAXABLE PROPERTY
Last Ten Fiscal Years
Real Property
Fiscal Tax Personal Less Tax Exempt
Year Year Residential Commercial Property Real Property
2008 2007 $ 4,136,844,130 $ 1,463,969,653 $ 449,453,570 $ 384,651,183
2009 2008 4,535,133,971 1,795,132,850 521,854,047 461,051,494
2010 2009 4,673,324,896 1,762,831,286 632,160,830 484,145,515
2011 2010 4,916,409,359 1,833,483,370 527,132,210 590,247,297
2012 2011 4,929,336,548 1,897,683,176 488,098,315 592,996,676
2013 (1) 2012 5,042,965,503 1,954,587,058 612,564,952 617,274,555
2014 2013 5,530,854,515 1,966,675,342 614,461,500 627,308,465
2015 2014 6,000,588,340 2,035,398,664 670,832,220 673,524,095
2016 2015 6,687,172,478 2,200,841,575 677,182,023 677,182,023
2017 2016 7,800,700,555 2,552,439,217 776,125,452 835,697,201
Notes:
(1) Assessed valuation for fiscal year 2013 does not include Brazoria County Mud#4 valuation of
$241,712,166 that was annexed into the City on December 31, 2012.
Assessed value based on adjusted tax roll at year end.
138
City of Pearland FY 2017 CAFR
Assessed Value
Less Other Total as a Percent of
Exemptions and Total Taxable Direct Tax Estimated Actual Actual Taxable
Abatements Assessed Value Rate Taxable Value Value
$ 275,826,005 $ 5,389,790,165 $ 0.6526 $ 5,389,790,165 100%
486,242,814 5,904,826,560 0.6526 5,904,826,560 100%
315,123,559 6,269,047,937 0.6526 6,269,047,937 100%
355,054,613 6,331,723,029 0.6651 6,331,723,029 100%
352,494,382 6,369,626,981 0.6851 6,369,626,981 100%
454,866,920 6,537,976,038 0.7051 6,537,976,038 100%
'487,709,374 6,996,973,518 0.7051 6,996,973,518 100%
452,738,140 7,580,556,989 0.7121 7,580,556,989 100%
423,238,764 8,464,775,289 0.7053 8,464,775,289 100%
571,315,443 9,722,252,580 0.6812 9,722,252,580 100%
139
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
DIRECT AND OVERLAPPING PROPERTY TAX RATES
Last Ten Fiscal Years
(rate per$100 of assessed value)
City Direct Rates Overlapping Rates a
Pearland Pasadena Alvin
Independent Independent Independent Alvin Fort Port of
Fiscal M&0 I&S Total School School School Comm Brazoria Bend Harris Houston
Year Rate Rate Direct District District District College County County County Authority
2008 $ 0.250 $ 0.402 $ 0.653 $ 1.427 $ 1.350 $ 1.328 $ 0.210 $ 0.311 $ 0.517 $ 0.392 $ 0.014
2009 0.220 0.433 0.653 1.419 1.350 1.328 0.200 0.330 0.500 0.391 0.018
2010 0.220 0.433 0.653 1.419 1.350 1.304 0.200 0.366 0.500 0.392 0.016
2011 0.215 0.450 0.665 1.419 1.350 1.304 0.200 0.403 0.500 0.388 0.021
2012 0.215 0.470 0.685 1.419 1.350 1.344 0.199 0.413 0.500 0.391 0.019
2013 0.215 0.490 0.705 1.419 1.350 1.329 0.200 0.426 0.500 0.400 0.020
2014 0.215 0.490 0.705 1.416 1.350 1.329 0.194 0.492 0.500 0.415 0.017
2015 0.222 0.490 0.712 1.416 1.350 1.417 0.204 0.499 0.495 0.417 0.015
2016 0.223 0.483 0.705 1.416 1.350 1.417 0.204 0.486 0.486 0.419 0.013
2017 0.241 0.440 0.681 1.416 1.350 1.450 0.192 0.457 0.474 0.417 0.013
Source:Brazoria County,Harris County,and Fort Bend County Appraisal Districts.
a Overlapping rates are those of local and county governments that apply to property owners within the City of Pearland.Not all
overlapping rates apply to all Pearland property owners;for example,although the county property tax rates apply to all.
140
City of Pearland FY 2017 CAFR
Harris Harris Hams Brazoria/
County County County Ft Bend
Flood Hospital Dept of MUD MUD MUD MUD MUD MUD MUD MUD MUD
Control District Education No.1 No.17 No.18 No.19 No.23 No.26 No.28 No.34 No.35
$ 0.031 $0.192 $ 0.006 $ 0.850 $0.730 $0.590 $0.680 $ 0.850 $ 0.710 $ 0.820 $ 0.850 $ 0.850
0.031 0.192 0.006 0.850 0.630 0.570 0.660 0.820 0.710 0.820 0.850 0.890
0.029 0.192 0.060 0.850 0.600 0.560 0.630 0.800 0.710 0.820 0.850 1.020
0.029 0.192 0.007 0.850 0.547 0.550 0.620 0.770 0.710 0.820 0.850 1.020
0.028 0.192 0.007 0.850 0.547 0.545 0.600 0.630 0.690 0.820 0.850 1.020
0.028 0.182 0.007 0.850 0.547 0.530 0.580 0.610 0.690 0.820 0.850 1.020
0.028 0.170 0.006 0.850 0.544 0.510 0.550 0.600 0.690 0.820 0.850 1.020
0.027 0.170 0.006 0.850 0.520 0.470 0.510 0.580 0.690 0.820 0.850 1.020
0.027 0.170 0.005 0.848 0.460 0.390 0.450 0.540 0.690 0.820 0.820 1.020
0.028 0.172 0.005 0.850 0.460 0.390 0.450 0.540 0.690 0.820 0.820 1.020
•
141
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Fiscal Collected within the
Year Taxes Levied Fiscal Year of the Levy Collections Total Collections to Date
Ended for the Percentage in Subsequent Percentage
Sept 30, Fiscal Year Amount of Levy Years Amount of Levy
2008 $ 35,035,569 $ 34,461,652 98.36% $ 570,734 $ 35,032,387 100.0%
2009 38,368,354 37,820,603 98.57% 527,538 38,348,141 99.9%
2010 41,081,407 40,590,543 98.81% 442,411 41,032,954 99.9%
2011 41,968,046 41,594,389 99.11% 331,641 41,926,030 99.9%
2012 43,441,792 43,110,373 99.24% 309,734 43,420,106 100.0%
2013 45,850,625 45,509,522 99.26% 291,383 45,800,905 99.9%
2014 49,096,473 48,802,720 99.40% 221,946 49,024,666 99.9%
2015 53,463,919 53,175,174 99.46% 149,582 53,324,756 99.7%
2016 58,829,331 58,545,664 99.52% 104,436 58,650,100 99.7%
2017 64,977,413 64,579,894 99.39% 64,579,894 99.4%
Source:Brazoria County Tax Office
Note:Taxes levied based on adjusted tax roll.
142
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
PRINCIPAL PROPERTY TAX PAYERS
Current Year and Nine Years Ago
2017* 2008
Percentage Percentage
of Total City of Total Cit}
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
Pearland Town Center LP $ 88,999,489 1 0.96% $
Amreit SPF Shadow Creek LP 83,832,600 2 0.91%
HCA Healthcare Corp 76,694,850 3 .0.83% 23,044,270 5 0.43%
Mar Shadow Creek LP 57,481,391 4 0.62%
DD Shadow Creek V LLC 46,405,710 5 0.50%
Weatherford U.S., Inc. 39,314,580 6 0.43% 58,576,390 1 1.09%
11900 Shadow Creek VIII LP 38,420,360 7 0.42% 27,417,780 3 0.51%
Goodgarden 38,141,170 8 0.41%
Discovery Shadow Creek 37,577,690 9 0.41%
Brazoria SCR Associates LLC 36,452,500 10 0.40%
Pearland Investments LTD 35,550,941 2 0.66%
Centerpoint Energy, Inc. 22,638,126 6 0.42%
Walmart Real Estate 19,088,150 4 0.35%
USA Tranquility Lake 18,723,390 8 0.35%
Turbocare,Inc 18,701,417 9 0.35%
Walmart Stores, Inc. 16,199,250 10 0.30%
Total $ 543,320,340 5.89% $ 239,939,714 4.45%
Source:Brazoria County Appraisal District
*Tax Year 2017
143
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
TAXABLE SALES BY CATEGORY
Last Ten Calendar Years
(in thousands of dollars)
Calendar Year
2008 2009 2010 2011
Retail Trade $ 667,470 $ 699,338 $ 673,714 $ 697,419
Accommodations&Food Services 127,994 146,598 155,345 172,126
Real Estate/Rental/Leasing 52,276 38,924 46,811 48,059
Manufacturing 47,447 31,243 39,582 49,474
Wholesale Trade 32,999 25,954 30,730 33,163
Other Services (Except Public Admin) 23,764 23,670 25,114 29,557
Information 12,567 14,413 15,672 16,896
Construction 17,496 14,372 15,537 17,558
Arts, Entertainment&Recreation 9,751 9,909 11,315 11,511
Mining, Quarrying, Oil and Gas 10,520 3,355 3,246 3,316
Admin/Support/Waste Mgmt/Remediation 12,656 11,670 10,650 11,004
Professional/Scientific/Technical 5,218 5,923 6,277 7,072
Health Care/Social Assistance 37 52 184 • 252
Finance, Insurance 1,469 1,811 1,404 1,261
Agriculture, Forestry, Fishing 675 566 180 306
Transportation/Warehousing 138 161 282 418
Educational Services 212 144 207 314
Utilities 6 6 3 187
Management of Companies/Enterprises 2,594
Total $1,025,289 $ 1,028,107 $1,036,253 $1,099,893
City direct sales tax rate b 1.00% 1.00% 1.00% 1.00%
Source: State Comptroller's Office.
a 2015 taxable sales thru 2nd quarter of 2015.
b The City direct sales tax rate includes the City only and not the Pearland Economic
Development Corp. (4B).
144
City of Pearland FY 2017 CAFR
•
Calendar Year
2012 2013 2014 2015 2016 2017 a
$ 764,460 $ 829,666 $ 871,813 $ 961,563 $ 997,137 $ 471,521
198,439 216,155 240,961 272,540 298,860 156,448
61,690 56,079 61,392 48,024 34,670 19,477
48,213 34,598 51,274 41,175 40,390 21,958
33,566 34,358 42,915 41,491 48,104 23,087
30,669 34,175 38,539 40,373 40,162 21,527
19,194 24,387 29,602 33,614 33,449 16,892
23,181 24,370 26,350 32,170 24,460 10,186
12,710 13,570 14,692 15,555 16,020 8,220
3,726 12,893 14,520 7,285 8,141 6,388
12,696 13,778 12,963 12,808 12,725 6,957
9,037 11,317 10,531 11,307 12,167 3,139
351 1,057 3,205 5,007 2,307 1,392
1,347 1,246 1,483 2,226 2,182 1,014
468 772 728 1,609 2,112 2,006
425 318 406 284 350 156
429 374 350 393 406 163
3 7 7
$1,220,603 $1,309,121 $1,421,731 $ 1,527,425 $ 1,573,642 $ 770,531
1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
145
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
(dollars in thousands,except per capita)
Governmental Activities Business-Type Activities
General Certificates Unamortized Capital Permanent
Fiscal Obligation of Obligation Revenue Premiums/ Lease Revenue Improvement
Year Bonds Bonds Bonds (Discounts) Obligations Bonds Bonds
2008 $ 184,985 $ 74,980 $ 2,715 $ 1,187 $ 92,900 $ 13,140
2009 180,765 82,505 2,400 1,479 104,435 12,160
2010 193,785 92,380 3,277 3,237 116,440 10,540
2011 207,105 91,150 3,173 4,032 113,270 9,730
2012 224,170 65,425 3,629 6,479 3,407 109,305 15,130
2013* 236,199 64,690 75,125 6,159 3,681 105,690 14,020
2014 246,791 56,505 80,186 10,122 4,344 102,517 12,865
2015 261,998 50,030 77,012 16,185 3,629 108,099 11,305
2016 262,865 50,070 91,370 18,793 4,229 173,570 9,775
2017 283,140 37,505 97,215 25,832 1,838 196,200 7,360
Note:Details regarding the city's outstanding debt can be found in the notes to the financial statements.
* Due to implementation of GASB 61 in fiscal year 2013,the City's component units are now considered blended
component units versus discretely as in years prior to fiscal year 2013. As such, the outstanding debt for the components
units have been added;however,the City, or primary government is not legally responsible for the payment of its debt.
146
City of Pearland FY 2017 CAFR
Business-Type Activities
Excluding
Unamortized Capital Total Percentage Total Component
Premiums/ Lease Primary of Personal Per Units
(Discounts) Obligations Government Income Capita Per Capita
284 $ $ 370,191 12.4% $ 4,126
186 235 384,165 13.0% 4,121
783 345 420,787 13.5% 4,429
656 421 429,537 14.3% 4,380
882 342 428,769 13.1% 4,223
730 253 506,547 14.1% 4,800 4,019
592 169 514,091 13.2% 4,709 3,859
659 - 82 528,999 12.6% 4,561 3,875
850 375 611,897 13.2% 5,225 4,445
9,395 257 658,742 15.3% 5,422 4,622
147
City of Pearland FY 2017 CAFR
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148
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
RATIO OF NET GENERAL BONDED DEBT TO ASSESSED
VALUE AND NET BONDED DEBT PER CAPITA
Last Ten Fiscal Years
(dollars in thousands,except per capita)
General Less Debt Ratio of Net Percentage
Fiscal Tax Obligation Service Net Bonded Bonded Debt to of Personal Per Capita
Year Year Bonds Funds Debt Assessed Value Income a a
2008 2007 $ 275,820 $ 6,552 $ 269,268 5.0% 9.1% $ 3,025
2009 2008 277,830 7,247 270,583 4.6% 9.2% 2,922
2010 2009 299,982 6,706 293,276 4.7% 9.5% 3,117
2011 2010 311,158 5,160 305,998 4.8% 10.3% 3,148
2012 2011 311,204 4,992 306,212 4.8% 9.5% 3,068
2013 2012 321,068 4,643 316,425 4.8% 8.9% 3,040
2014 2013 326,283 4,536 321,747 4.6% 8.4% 3,010
2015 2014 339,518 5,034 334,484 4.4% 8.2% 2,978
2016 2015 341,503 8,276 333,227 3.9% 7.2% 2,846
2017 2016 353,837 5,911 347,926 3.6% 8.1% 2,864
Note:Details regarding the city's outstanding debt can be found in the notes to the financial statements.
a Population and personal income data can be found in demographic and economic statistics table.
•
149
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
September 30,2016 and 2017
Debt as of
September 30, Overlapping
Taxing Jurisdiction 2016 Percent Amount
Alvin Community College District $ 12,255,000 27.15% $ 3,327,233
Alvin ISD 647,785,000 32.13% 208,133,321
Brazoria County 78,930,000 22.15% 17,482,995
Brazoria County MUD No.6 17,830,000 0.27% 48,141
Brazoria County MUD No. 17 24,565,000 100.00% 24,565,000
Brazoria County MUD No. 18 24,905,000 100.00% 24,905,000
Brazoria County MUD No. 19 30,900,000 100.00% 30,900,000
Brazoria County MUD No.23 . 14,995,000 100.00% 14,995,000
Brazoria County MUD No.26 37,070,000 100.00% 37,070,000
Brazoria County MUD No.28 35,765,000 100.00% 35,765,000
Brazoria County MUD No.34 36,705,000 100.00% 36,705,000
Brazoria County MUD No.35 9,130,000 100.00% 9,130,000
Brazoria-Fort Bend County MUD No. 1 75,605,000 60.32% 45,604,936
Fort Bend County 523,195,000 0.52% 2,720,614
Harris County(a) 2,421,235,464 0.15% 3,631,853
Harris County Dept.of Education 7,000,000 0.15% 10,500
Harris County Flood Control District 83,075,000 0.15% 124,613
Harris County Hospital District 62,815,000 0.15% 94,223
Harris-Brazoria Counties 3,500,000 100.00% 3,500,000
Lower Kirby Pearland Man 10,025,000 100.00% 10,025,000
Pasadena ISD 704,940,000 0.15% 1,057,410
Pearland ISD 290,618,597 75.74% 220,114,525
Port of Houston Authority 674,269,397 0.15% 1,011,404
Total estimated Overlapping 730,921,767
The City $ 404,305,000 100.00% 404,305,000
Total Direct and Estimated $1,135,226,767
Population 117,100
Per Capita Debt-Direct and Overlapping Debt $ 9,695
Source: Individual jurisdictions and/or Texas Municipal Reports.
(a) Harris County Toll Road Certificates are considered self-supporting and are not included in the
amount shown for Harris County.
150
City of Pearland FY 2017 CAFR
Debt as of
September 30, Overlapping
2017 Percent Amount
$ 11,125,000 32.44% $ 3,608,950
684,700,000 35.53% 243,273,910 '
75,150,000 25.43% 19,110,645
15,385,000 0.35% 53,848
23,130,000 100.00% 23,130,000
23,595,000 100.00% 23,595,000
29,300,000 100.00% 29,300,000
14,740,000 100.00% 14,740,000
29,090,000 100.00% 29,090,000
61,055,000 100.00% 61,055,000
35,725,000 100.00% 35,725,000
9,025,000 100.00% 9,025,000
83,215,000 98.99% 82,374,529
565,727,978 0.58% 3,281,222
2,167,734,361 0.16% 3,468,375
6,780,000 0.16% 10,848
83,075,000 0.16% 132,920
61,595,000 0.16% 98,552
8,500,000 100.00% 8,500,000
13,280,000 100.00% 13,280,000
689,705,000 1.08% 7,448,814
380,077,774 78.67% 299,007,185
638,829,397 0.16% 1,022,127
910,331,924
$ 443,692,190 100.00% 443,692,190
$1,354,024,114
121,500
$ 11,144
151
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
PLEDGED REVENUE COVERAGE
Amounts in(000's)
Last Ten Fiscal Years
Water&Sewer Revenue Bonds
Net
Less: Revenue Debt Service
Fiscal Gross Operating Available for
Year Revenues Expenses Debt Service Principal Interest Total Coverage
2008 $ 23,507 $ 14,827 $ 8,680 $ 1,230 $ 4,011 $ 5,241 1.66
2009 26,980 12,877 14,103 1,595 4,648 6,243 2.26
2010 25,061 13,585 11,476 2,575 4,848 7,423 1.55
2011 28,664 15,529 13,135 3,170 5,155 8,325 1.58
2012 27,969 15,946 12,023 3,305 5,016 8,321 1.44
2013 29,607 17,423 12,184 3,615 4,724 8,339 1.46
2014 29,341 17,707 12,184 3,765 4,584 8,349 1.46
2015 30,744 18,767 11,977 3,920 4,622 8,542 1.40
2016 44,163 21,167 22,995 7,630 4,918 12,548 1.83
2017 52,005 24,178 27,828 9,195 4,297 13,492 2.06
Note:Details regarding the City's outstanding debt can be found in the notes to the financial statements. Operating expenses
do not include interest,depreciation, or amortization expenses. Debt service excludes Permanent Improvement Bonds paid
with system revenues, as those bonds do not require bond coverage.
152
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Education
Personal Per Capita Level in School
Fiscal Population Income Personal Median Years of Enrollment Unemployment
Year (A) (in$000's) Income(B) Age(B) Schooling (C) Rate(D)
2008 89,000 $ 2,963,255 $ 33,295 35.8 14.3 18,439 3.8%
2009 92,600 . 2,941,717 31,768 34.5 14.2 20,056 6.5%
2010 94,100 3,076,788 32,697 33.4 14.2 21,269 6.9%
2011 97,200 2,974,785 30,605 33.3 14.2 20,931 6.9%
2012 99,800 3,213,184 32,196 34.8 14.2 21,721 5.6%
2013 104,100 3,555,431• 34,154 34.4 14.2 23,771 5.0%
2014 106,900 3,822,958 35,762 34.6 14.2 23,075 4.3%
2015 112,300 4,063,014 36,180 34.6 14.2 23,241 3.3%
2016 117,100 4,637,394 39,602 33.9 14.2 24,096 3.8%
2017 121,500 4,305,839 35,439 36.1 14.2 24,400 4.0%
(A)Estimated
(B) Pearland Economic Development Corporation
(C)Texas Education Agency
(D) Bureau of Labor Statistics
*Information not presented is not avaialble.
•
153
City of Pearland FY 2017 CAFR
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154
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
2017 2008
Percentage Percentage
of Total City of Total City
Employer Employees Rank Employment Employees Rank Employment
Pearland ISD 2,518 1 4.47% 2,291 1 9.14%
Kelsey Seybold 827 2 1.47%
City of Pearland 735 3 1.31% 543 3 2.17%
Alvin ISD 635 4 1.13%
Memorial Hermann 450 5 0.80%
Merit Medical 330 6 0.59%
Pearland Medical Center 300 7 0.53%
Dover Energy 212 8 0.38%
Kemlon 200 9 0.36% 200 9 0.80%
Third Coast Terminals 185 10 0.33%
Wal-Mart 800 2 3.19%
HEB 500 4 1.99%
Weatherford 325 5 1.30%
TurboCare 280 6 1.12%
Randall's 250 7 1.00%
Home Depot 225 8 0.90%
EMS Pipeline 195 10 0.78%
Total 6,392 11.35% 5,609 22.37%
Sources:
Pearland Economic Development Corp.
Retail establishments data not available in 2017.
Labor force participation in 2017 is 56,298 and in 2008 is 25,079.
155
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
FULL-TIME EQUIVALENT CITY GOVERNMENT
EMPLOYEES BY FUNCTION/PROGRAM
Last Ten Fiscal Years
2008 2009 2010 2011
Function/Program
Governmental Activities:
General Government 55 55 57 57
Public Safety 242 253 264 276
Public Works 45 47 47 45.
Community Services 51 52 47 45
Parks and Recreation 68 72 99 105
Business Type Activities:
Water& Sewer 77 82 82 87
Component Unit:
Economic Development 5 5 6 5
Total 543 564 601 619
Source:City Budget
156
City of Pearland FY 2017 CAFR
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CITY OF PEARLAND,TEXAS
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Fiscal Year
2008 2009 2010 2011
Function/Program
GENERAL GOVERNMENT
Finance
Number of purchase orders 3,552 3,264 2,913 2,679
Number of budget transfers 398 406 470 427
Number of invoices paid 23,434 23,259 21,632 21,000
Average number of employees paid per month. 1,185 1,230 1,220 1,438
Human Resources
Number of hires 109 90 91 131
Number of applications received 2,495 3,137 3,880 3,299
Legal
Number of resolutions and ordinances prepared 293 266 229 205
Information Technology
Average monthly service requests 616 649 734 815
Number of PC's supported 386 394 429 439
PUBLIC SAFETY
Police
Number of police calls resulting in dispatch 34,865 37,440 35,676 39,815
Total police arrests made 4,424 5,188 5,986 6,218
Dispatched calls per patrol officer 592 576 513 606
Commercial vehicles equipment violations 860 711 672 852
UCR Part I cases assigned(1) 349 629 2,003 3,304
Fire
Total number of arson incidents 9 8 5 2
Fires investigated 28 33 22 25
Total annual inspections 2,677 2,374 1,752 1,380
Total calls for service 8,244 8,843 8,888 9,676
Patients treated 5,529 5,804 5,619 6,121
PUBLIC WORKS
Fleet Maintenance
Fleet maintenance jobs completed 4,153 3,063 2,394 3,410
Preventative maintenance performed 1,756 1,998 1,741 747
Other Public Works
Fuel issued(gallons) 343,865 313,596 354,422 361,464
Street sweeping(miles) 2,324 2,561 2,239 1,299
Street signs maintained/replaced 1,288 2,864 2,049 1,588
Total work orders completed 18,723 20,213 18,632 16,834
158
City of Pearland FY 2017 CAFR
Page 1 of 3
Fiscal Year
2012 2013 2014 2015 2016 2017
2,415 2,671 2,640 2,377 2,159 589
429 465 548 489 362 750
20,768 23,512 21,486 22,212 26,675 24,548
1,481 1,527 1,548 1,523 1,536 1,704
112 94 98 131 199 90
4,936 7,642 8,507 9,132 10,420 13,010
220 254 243 271 279 276
832 843 838 854 871 894
448 454 575 649 680 706
42,318 47,200 45,500 49,750 55,648 54,931
6,525 7,642 7,081 6,115 5,100 7,757
625 659 550 679 780 785
900 810 598 614 391 381
1,836 - 2,094 1,900 2,417 2,980 2,460
2 6 7 1 7 4
18 16 25 20 27 19
1,537 1,958 1,644 1,640 1,244 2,607
10,494 10,789 15,048 17,407 9,904 9,965
6,537 6,537 6,936 7,180 6,117 4,610
3,581 3,817 3,860 3,887 1,452 1,797
682 611 610 437 750 742
377,754 350,186 353,890 332,745 265,669 331,005
1,079 1,155 871 648 1,160 1,112
1,090 884 993 1,477 1,370 1,179
17,803 18,346 21,212 25,873 31,163 25,688
159
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Nine Fiscal Years
Fiscal Year
2008 2009 2010 2011
Function/Program (continued)
PARKS AND RECREATION
All Parks and recreation
ROW maintained-acres 210 228 245 255
Trees maintained 5,000 5,004 5,800 6,327
Acres of city property mowed 470 851 1,301 1,331
Total number of parkwork orders received 316 275 252 249
Parkland- acres(2) 180 138 139 139
Total number of special events held 25 25 24 21
Total number of tournaments held 9 6 9 11
Number of recreation classes offered(3) 1,083 855 307 459
Average monthly attendance(all locations)(4) 7,607 3,623 11,823 16,116
COMMUNITY SERVICES
Animal Control
•Number of animals at shelter 2,947 2,868 2,532 2,685
Total number of calls for service 4,296 3,529 4,206 4,346
Inspection Services
Total building inspections 34,773 24,834 21,753 19,244
Total code violation cases 3,629 4,274 3,433 2,860
Total permits issued 9,878 9,249 7,874 7,869
Number of plans reviewed 1,309 925 969 917
Municipal Court
Number of trials 1,616 1,391 402 688
Number of charges 19,666 24,400 24,657 26,369
Warrants cleared 6,402 7,374 8,692 8,204
160
City of Pearland FY 2017 CAFR
Page 2 of 3
Fiscal Year
2012 2013 2014 2015 2016 2017
251 251 251 550 459 327
6,157 6,312 6,313 6,430 7,922 8,355
1,380 1,035 1,035 1,116 632 664
230 140 180 147 190 114
138 138 138 138 337 388
22 22 20 19 16 19
2 1 3 - 26 -
486 281 272 306 384 265
18,378 18,980 21,366 14,371 19,636 16,814
2,220 2,375 2,176 2,126 2,100 2,178
4,326 5,236 6,114 5,509 5,312 6,022
22,416 26,274 28,434 36,497 37,206 33,441
1,952 2,244 2,140 4,596 2,560 2,302
8,696 10,630 13,972 18,186 14,612 12,475
1,050 939 1,185 1,584 1,349 1,167
1,116 885 839 856 443 656
30,187 27,439 23,182 19,223 17,611 1,633
10,080 10,328 9,050 7,476 7,525 8,463
•
161
City of Pearland FY 2017 CAFR
CITY OF PEARLAND, TEXAS
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Nine Fiscal Years
Fiscal Year
2008 2009 2010 2011
Function/Program (continued)
WATER& SEWER
Distribution and Collection
Fire hydrant maintenance and inspections(5) 740 451 402 395
Backed up sewer repairs 393 270 325 310
Water mains repaired 160 168 82 410
Water Production
Water produced-wells
(in millions of gallons) 2,128 2,574 3,065 3,869
Surface Water Purchased
(in millions of gallons) 1,147 1,146 634 968
Billing& Collections
Annual meter reads 325,471 340,281 344,618 364,424
Number of bills 318,160 325,201 336,668 350,871
Wastewater Treatment
Wastewater treated
(in millions of gallons) 2,096 2,106 2,361 1,943
Sources:Various city departments.
Information not presented was not available at time of publication.
'UCR method of reporting was terminated after 2009. Effective 2010, Incident Based Reporting
(IBR)is used.
2Prior to 2009, Parkland acres included medians and Wastewater Treatment Plants. After 2009,
reported under total acres of city property maintained.
3Prior to 2010, individual music classes were included in the total recreation classes held.
Program was cancelled.
4In FY 2010, a new facility, Recreation Center/Natatorium, opened.
5In Water& Sewer, Distribution and Collection fire hydrant maintenance and inspections is
contracted out.
162
City of Pearland FY 2017 CAFR
Page 3 of 3
Fiscal Year
2012 2013 2014 2015 2016 2017
887 1,399 837 612 854 186
275 286 334 305 497 545
283 380 111 189 120 102
2,916 2,859 2,470 1,933 2,190 2,417
1,321 1,816 2,133 2,276 2,517 2,584
370,755 403,220 414,499 428,265 445,154 461,502
359,716 387,997 388,338 400,662 417,312 471,549
2,364 2,530 2,493 3,067 3,367 3,455
163
City of Pearland FY 2017 CAFR
CITY OF PEARLAND,TEXAS
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Fiscal Year
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Function/Program
PUBLIC SAFETY
Police
Police stations 1 1 1 1 1 1 1 1 1 1
Police vehicles 126 130 138 142 155 157 161 143 186 194
Fire
Fire stations 4 4 4 5 6 6 6 6 6 7
Fire vehicles 17 17 17 22 23 26 26 26 42 56
EMS
EMS ambulances 6 8 8 8 8 9 9 7 9 9
PUBLIC WORKS
Other public works
Streets(miles)* 773 807 807 806 . 806 839 844 842 936 928
Vehicle inventory** 360 333 355 363 385 374 375 372 451 385
Traffic signals 67 71 80 62 74 81 81 73 87 91
PARKS AND RECREATION
Parks and recreation
Developed acreage*** 180 138 139 139 138 138 138 168 334 388
Pools 1 1 3 3 3 3 3 3 3 3
Outdoor basketball courts 10 10 10 10 6 6 6 6 6 6
Soccer fields 12 12 12 12 12 12 12 12 18 12
Activity buildings 3 3 4 4 3 3 3 3 3 3
Baseball/softball fields 4 4 4 4 4 4 4 4 6 14
WATER AND SEWER
Water Production
Water wells 11 11 11 11 11 10 10 10 10 10
Pumping stations 2 2 2 2 3 3 3 3 3 3
Ground storage tanks 15 15 15 15 15 15 15 15 15 15
Elevated towers 5 5 6 6 6 6 6 6 6 6
Wastewater
Treatment plants 5 5 5 5 5 5 5 5 5 5
Lift stations 76 78 78 80 80 75 76 73 74 72
Distribution and Collection
Water mains(miles) 410 420 433 443 448 469 488 509 537 546
Sanitary sewers(miles) 360 370 378 380 382 400 415 433 440 448
Sources:Various city departments.
Note:No capital asset indicators are available for the general government and community services functions.
Information not presented was not available at time of publication.
*Inside city limits. Prior to FY07,street miles were measured visually. Beginning FY07,a GIS system was used to measure street miles.
Although new streets were added in FY 2011,an audit of the database resulted in the elimination of some street miles previously reported.
**Decrease in inventory reflects surplus of vehicles auctioned off.Increases reflect new purchases,which may offset with those sold.
Vehicle inventory includes public safety revenues.
***Prior to 2009,Parkland acres included medians and Wastewater Treatment Plants.
•
164
City of Pearland FY 2017 CAFR