HomeMy WebLinkAboutR-2012-024-2012-02-20RESOLUTION NO. R2012-24
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, ACCEPTING THE CITY'S COMPREHENSIVE ANNUAL
FINANCIAL REPORT FOR FISCAL YEAR 2011 AS PREPARED BY THE
ACCOUNTING FIRM OF NULL-LAIRSON.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That certain comprehensive annual financial report as prepared by
Null-Lairson, a copy of which is attached hereto as Exhibit "A" 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.
PASSED, APPROVED and ADOPTED this the 20th day of February, A.D., 2012.
TOM REID
MAYOR
ATTEST:
YFING, T
S ETARY
APPROVED AS TO FORM:
Vw V_1
DARRIN M. COKER
CITY ATTORNEY
CITY OF PEARLAND, TEXAS
FEDERAL SINGLE AUDIT REPORT
For the Year Ended September 30, 2011
EXHIBIT "A"
Resolution No. R2012-24
I' CERTIFIED P BUC ACCCOISNTANTS
3411 Richmond Avenue, Suite 500
Houston, Texas 77046
(713) 621-1515
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CITY OF PEARLAND, TEXAS
FEDERAL SINGLE AUDIT REPORT
FOR THE YEAR ENDED SEPTEMBER 30, 2011
TABLE OF CONTENTS
Independent Auditors' Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed
In Accordance With Government Auditing Standards
Page
1
Independent Auditors' Report on Compliance with the Requirements that Could
Have a Direct and Material Effect on each Major Program and on Internal Control
Over Compliance in Accordance with OMB Circular A-133 3
Schedule of Expenditures of Federal Awards 5
Notes to Schedule of Expenditures of Federal Awards 6
Schedule of Findings and Questioned Costs 7
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Independent Auditors' Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Governmental Auditing Standards
To the Honorable Mayor and
Members of City Council
City of Pearland, Texas
We have audited the financial statements of the governmental activities, the business -type activities, the
aggregate discretely presented component units, each major fund, and the aggregate remaining fund
information of City of Pearland, Texas (the "City") as of and for the year ended September 30, 2011,
which collectively comprise the City's basic financial statements and have issued our report thereon dated
February 20, 2012. We conducted our audit in accordance with auditing standards generally accepted in
the United States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial reporting as
a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal
control over fmancial reporting. Accordingly, we do not express an opinion on the effectiveness of the
City's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement
of the entity's financial statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not
identify any deficiencies in internal control over compliance that we consider to be material weaknesses,
as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
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3411 Richmond I Suite 500 I Houston, TX 77046 I (P) 713.621.1515 I (F) 713.621.1570
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To the Honorable Mayor and
Members of City Council
City of Pearland, Texas
Page 2
This report is intended solely for the information and use of management, City Council, others within the
entity, and federal awarding agencies and pass -through entities and is not intended to be and should not
be used by anyone other than these specified parties.
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Houston, Texas
February 20, 2012
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Independent Auditors' Report on Compliance with the Requirements that
Could have a Direct and Material Effect on each Major Program and on
Internal Control over Compliance in Accordance with OMB Circular A-133
To the Honorable Mayor and
Members of City Council
City of Pearland, Texas
Compliance
We have audited City of Pearland, Texas' (the "City") compliance with the types of compliance
requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement that could have a direct and material effect on each of the District's major federal
programs for the year ended September 30, 2011. The City's major federal programs are identified in the
summary of auditor's results section of the accompanying schedule of findings and questioned costs.
Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its
major federal programs is the responsibility of the City's management. Our responsibility is to express an
opinion on the City's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of
States, Local Governments, and Non -Profit Organizations. Those standards and OMB Circular A-133
require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance
with the types of compliance requirements referred to above that could have a direct and material effect
on a major federal program occurred. An audit includes examining, on a test basis, evidence about the
City's compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our
audit does not provide a legal determination of the City's compliance with those requirements.
In our opinion, the City complied, in all material respects, with the compliance requirements referred to
above that could have a direct and material effect on each of its major federal programs for the year ended
September 30, 2011.
Internal Control Over Compliance
Management of City of Pearland, Texas, is responsible for establishing and maintaining effective internal
control over compliance with the requirements of laws, regulations, contracts, and grants applicable to
federal programs. In planning and performing our audit, we considered the City's internal control over
compliance with the requirements that could have a direct and material effect on a major federal program
to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test
and report on internal control over compliance in accordance with OMB Circular A-133, but not for the
purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly,
we do not express an opinion on the effectiveness of the City's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
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3411 Richmond I Suite 500 I Houston, TX 77046 I (P) 713.621.1515 I (F) 713.621.1570
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To the Honorable Mayor and
Members of City Council
City of Pearland, Texas
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federal program on a timely basis. A material weakness in internal control over compliance is a
deficiency, or combination of deficiencies, in internal control over compliance, such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control that might be
deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in
internal control over compliance that we consider to be material weaknesses, as defined above.
Schedule of Expenditures of Federal Awards
We have audited the financial statements of the governmental activities, business activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund information of
the City of Pearland, Texas as of and for the year ended September 30, 2011, and have issued our report
thereon dated February 20, 2012. Our audit was performed for the purpose of forming our opinions on the
financial statements that collectively comprise the City's basic financial statements. The accompanying
Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required
by OMB Circular A-133 and is not a required part of the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a
whole.
Closing
This report is intended solely for the information and use of management, City Council, others within the
City, and federal awarding agencies and pass -through entities and is not intended to be and should not be
used by anyone other than these specified parties.
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Houston, Texas
February 20, 2012
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CITY OF PEARLAND, TEXAS
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
September 30, 2011
Federal grantor/ pass -through grantor/ program title
Pass -Through
CFDA Grantor Federal Grant
Number Number Expenditures
U.S. HOUSING AND URBAN DEVELOPMENT
Community Development Block Grant 2008 14.218 B-08-MC-48-0400 $ 33,637
Community Development Block Grant 2009 14.218 B-09-MC-48-0400 30,052
Community Development Block Grant 2010 14.218 B-10-MC-48-0400 187,318
Community Development Block Grant - ARRA 14.253 B-09-MY-48-0400 29,764
Total U.S. Housing and Urban Development 280,771
U.S. DEPARTMENT OF HOMELAND SECURITY
Passed through Texas Department of Public Safety
Emergency Management Performance Grants
Citizens Emergency Response Team
97.042
97.067
IOTX-EMPG-0328
2008-GE-T8-0034
42,240
5,941
Total passed through Texas Department of Public Safety 48,181
U.S. DEPARTMENT OF JUSTICE
Passed through Texas Office of Governor
Victims Of Crime Act - VOCA (Crime Victims Assistance)
Victims Of Crime Act - VOCA (Crime Victims Assistance)
16.575
16.575
2362301
2362302
63,644
4,317
Bureau ofJustice Assistance
Bulletproof Vest Partnership Program 16.607 N/A 14,266
E. Byme Memorial JAG 16.804 2010-DJ-BX-1481 23,044
Total Direct Award - Bureau ofJustice Assistance 37,310
Total U.S. Department ofJustice 105,271
U.S. DEPARTMENT OF ENERGY
Energy Efficiency and Conservation Block Grant
Program (EECBG) - ARRA
81.128 DE-SC0002889 221,865
Total Federal Awards $ 656,088
CITY OF PEARLAND, TEXAS
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Year Ended September 30, 2011
Note 1- Basis of Accounting
The City accounts for awards under federal programs in the General and Special Revenue governmental
funds.
In the Governmental funds, these programs are accounted for using a current financial resources
measurement focus. With this measurement focus, only current assets and current liabilities generally are
included on the balance sheet. Operating statements of these funds present increases (i.e. revenues and
other financing sources) and decreases (i.e. expenditures and other financing uses) in net current assets.
The modified accrual basis of accounting is used for these funds. This basis of accounting recognizes
revenues in the accounting period in which they become susceptible to accrual, i.e., both measurable and
available, and expenditures in the accounting period in which the liability is incurred, if measurable,
except for certain compensated absences and claims and judgments, which are recognized when the
obligations are expected to be liquidated with expendable available financial resources. Expenditures are
recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State,
Local and Indian Tribal Governments, wherein certain types of expenditures are not allowable or are
limited to reimbursement. Pass -through entity identifying numbers are presented where available.
Federal grants are considered to be earned to the extent of expenditures made under the provisions of the
grant, and, accordingly, when such funds are received, they are recorded as deferred revenues until
earned. Generally, unused balances are returned to the grantor at the close of specified project periods.
Note 2 - Basis of Presentation
The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal grant
activity of the City under programs of the federal government for the year ended September 30, 2011. The
information in this schedule is presented in accordance with the requirements of the Office of
Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non -Profit
Organizations. Because the schedule presents only a selected portion of the operations of the City, it is
not intended to and does not present the financial position, changes in net assets or cash flows of the City.
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CITY OF PEARLAND, TEXAS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the Year Ended September 30, 2011
I. SUMMARY OF AUDITORS' RESULTS
Financial Statements
Type of auditors' report issued:
Unqualified
Internal control over financial reporting:
Material weakness(es) identified?
No
Significant deficiency(ies) identified that are not
considered to be material weaknesses?
No
Noncompliance material to financial statements
noted?
No
Federal Awards
Internal control over major programs:
Material weakness(es) identified?
No
Significant deficiencies(s) identified that are not
considered to be material weaknesses?
None reported
Type of auditors' report issued on compliance with
major programs:
Unqualified
Any audit findings disclosed that are required to be
reported in accordance with section 510(a) OMB
Circular A-133?
No
Identification of major programs
Name of Federal Program or Cluster
CFDA Numbers
Energy Efficiency and Conservation Block Grant
Program (EECBG) - ARRA
81.128
1. Dollar Threshold Considered Between Type A
and Type B Federal Programs
$300,000
2. Auditee qualified as low -risk auditee?
Yes
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CITY OF PEARLAND, TEXAS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the Year Ended September 30, 2011
Section H. - Financial Statement Findings
The audit disclosed no findings to be reported.
Section III. - Federal Award Findings and Questioned Costs
The audit disclosed no findings to be reported.
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CITY OF PEARLAND, TEXAS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the Year Ended September 30, 2011
Section IV. - Status of Prior Year Findings and Questioned Costs
Not Applicable
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ITGYRtu a cautiNTaM
Independent Auditors' Report
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, 2011, which collectively comprise the City's basic
financial statements as listed in the table of contents. These financial statements are the responsibility of
City's management. Our responsibility is to express opinions on these financial statements based on our
audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used
and the significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, each major fund,
and the aggregate remaining fund information of the City as of September 30, 2011, and the respective
changes in financial position, and cash flows, where applicable, thereof for the year then ended in
conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated
, 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 and should be considered in assessing the
results of our audit.
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis on pages 5 through 15, and budgetary comparison, required pension system, and
other post -employment benefits on pages 68 through 70 be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting
for placing the basic financial statements in an appropriate operational, economic, or historical context.
We have applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
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3411 Richmond' Suite 500 I Houston, TX 77046 1 (P) 713.621.1515 I (F) 713.621.1570
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or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's financial statements as a whole. The introductory section, combining and individual
non -major fund financial statements and schedules, and statistical section, are presented for purposes of
additional analysis and are not a required part of the financial statements. The combining and individual
non -major fund financial statements and schedules are the responsibility of management and were derived
from and relate directly to the underlying accounting and other records used to prepare the financial
statements. The information has been subjected to the auditing procedures applied in the audit of the
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the financial
statements or to the financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the information is
fairly stated in all material respects in relation to the financial statements as a whole. The introductory and
statistical sections have not been subjected to the auditing procedures applied in the audit of the basic
fmancial statements and, accordingly, we do not express an opinion or provide any assurance on it.
Houston, Texas
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Bill Eisen
City Manager
EXHIBIT "A"
Resolution No. R2012-24
CITY OF PEARLAND, TEXAS
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
Fiscal Year Ended
September 30, 2011
Officials Issuing Report
Jon Branson Mickiel Hodge
Assistant City Assistant City
Manager Manager
Claire Bogard
Director of Finance
Rick Overgaard
Assistant Director
of Finance
CITY OF PEARLAND, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
Page
Introductory Section
Letter of Transmittal i
Principal Officials x
Organization Chart xi
GFOA Certificate of Achievement xii
Financial Section
Independent Auditors' Report 1
Management's Discussion and Analysis 5
Basic Financial Statements:
Government -Wide Financial Statements:
Statement of Net Assets
Statement of Activities
Fund Financial Statements:
Balance Sheet - Governmental Funds
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of
Net Assets
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balance of Governmental Funds to the Statement of Activities
19
20
22
23
24
25
Statement of Net Assets - Proprietary Funds 26
Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary
Funds 27
Statement of Cash Flows - Proprietary Funds
Combining Statement of Net Assets - Discretely Presented Component Units -
Governmental Activities
Combining Statement of Activities - Discretely Presented Component Units -
Governmental Activities
28
30
31
Notes to the Financial Statements 32
Required Supplementary Information:
General Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual
Notes To Required Supplementary Budget Information
Required Pension System and Other Post Retirement Benefit Supplementary
Information
68
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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 76
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -
Non -Major Governmental Funds 80
Schedules of Revenues, Expenditures, and Changes in Fund Balance - Budget
and Actual:
Debt Service Fund 84
Hotel/Motel Tax Fund 85
Court Security Fund 86
City -Wide Donations Fund 87
Court Technology Fund 88
Regional Detention Fund 89
Park Donations Fund 90
Police Seizure Fund 91
Parks and Recreation Development Fund 92
Sidewalk Fund 93
Grant Fund 94
Traffic Impact Improvements 95
Juvenile Management Fund 96
Management District 1 Fund 97
U of H Fund 98
Discretely Presented Component Units Fund Based Financial Statements:
Balance Sheets - Governmental Funds 100
Schedules of Revenues, Expenditures and Changes in Fund Balance -
Governmental Funds 101
Long -Term Debt Amortization Schedules:
Combining Schedule of Governmental Activity Long -Term Debt 104
Combining Schedule of Enterprise Fund Long -Term Debt 110
Combining Schedule of General Long -Term Debt of Pearland Economic
Development Corporation 114
Combining Schedule of General Long -Term Debt of Development Authority of
Pearland 116
CITY OF PEARLAND, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS (Continued)
Statistical Section (Unaudited) Page
Net Assets by Component 122
Changes in Net Assets 124
Fund Balances of Governmental Funds 128
Changes in Fund Balances of Governmental Funds 130
Assessed Value and Estimated Actual Value of Taxable Property 132
Direct and Overlapping Property Tax Rates 134
Property Tax Levies and Collections 136
Principal Property Taxpayers 137
Taxable Sales by Category 138
Outstanding Debt by Type 140
Ratios of General Bonded Debt to Assessed Value and Net Bonded Debt per Capita 142
Direct and Overlapping Governmental Activities Debt 143
Pledged Revenue Coverage 144
Demographic and Economic Statistics 145
Principal Employers 146
Full-time Equivalent City Government Employees by Function/Program 147
Operating Indicators by Function/Program 148
Capital Asset Statistics by Function/Program 152
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Introductory Section
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February 20, 2012
To the Honorable Mayor, Members
Of City Council, and Citizens of the
City of Pearland, Texas
The Comprehensive Annual Financial Report (CAFR) of the City of Pearland, Texas (the "City") for the
fiscal year ended September 30, 2011, 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 financial 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.
Null-Lairson, PC, Certified Public Accountants, have issued an unqualified (or "clean") opinion on the
City of Pearland's financial statements for the year ended September 30, 2011. 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 48 square miles, is the fastest
growing city in Brazoria County, increasing from approximately 18,000 residents in 1990 to 97,200
residents estimated as of December 2011.
The City of Pearland is a home -rule City operating under a Council -Manager form of government.
Policy -making and legislative authority are vested in a governing council (Council) consisting of the
mayor and five 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
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City of Pearland, Texas
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 medical services); solid waste; water and wastewater utilities; public improvements;
repair and maintenance of infrastructure; recreational and community activities; 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 for the purpose of promoting, assisting, and enhancing 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 TRIZ #2.
ECONOMIC CONDITIONS
Local Economy
Located minutes away from downtown Houston, Texas, the nation's second largest seaport, the world-
renowned Texas Medical Center, and NASA -Johnson Space Center, Pearland is the 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 calendar year 2011 totaled over $222.2 million, a 30%
increase in value from 2010. New single-family housing permits totaled 691 with a construction value of
$134 million. This is 32 permits and $6.0 million less than 2010; however Pearland continues to grow at
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To the Honorable Mayor, Members
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City of Pearland, Texas
a respectable pace, faring better than the rest of the nation. Residential permitting activity is anticipated
to remain at these levels for fiscal year 2012, budgeted at 750 permits. For calendar year 2011, the City
had 42 commercial permits with a value of $23 million, compared to 40 permits with a value of $25
million in 2010. In addition, two multi -family developments were permitted with a value of $24.0 million.
The downward trend on the commercial real estate market seems to have leveled out.
In 2010 Houston home sales had plunged. Double-digit declines in home sales took their toll on the
market, which has historically been one of the lower priced urban markets in the country. In mid 2011 the
housing market started to turn around and has been rising each month. The Houston Association of
Realtors reported 53,606 single family home sales for 2011, up 4.0% from the 51,556 sales in 2010.
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 in an enviable position compared to
other markets around the Country. For fiscal year 2011, Pearland had 800 foreclosure filings, down from
the 870 in fiscal year 2010, but still higher than the 588 we saw in fiscal year 2009. These filings also
include areas in the ETJ with a Pearland address, but the number of filings only represents less than 3% of
total households in Pearland. The decrease in foreclosures is another sign that the economy is turning
around.
Houston is the world's energy capital and in 2010 the drilling moratorium in the Gulf of Mexico did not
help the already sluggish economy. In 2011, however, the year finished with 2,007 drilling rigs working
in North America, up from 1,700 a year ago and two dozen shy of 2,031, the prerecession peak of mid -
September 2008. With the high price of oil, and the South Texas Eagle Ford Shale oil and gas reserves, it
is forecasted that this trend will continue keeping the Houston oil industry busy for the next 20 years.
Pearland's unemployment rate was 7.1% in September 2011, up slightly from 6.9% in September 2010.
This is compared to the national unemployment rate of 9.1% and the State of Texas unemployment rate of
8.5% as of September 2011. While Pearland's unemployment is less than the national and state rates, and
with the economy seeming to turn around, businesses are still slow to hire and it will take time for the
private sector to begin hiring again. Texas, however, has been recognized as having the best business
climate in the country. Houston's economy will continue to grow next year, adding more jobs in 2012
than in 2011. The Greater Houston Partnership forecasts the region to add 84,600. The Houston area is
built on businesses, on jobs, and on economic opportunities. Pearland is poised to take advantage of
those opportunities.
Pearland has two prime areas for commercial, mixed use, livable developments along the Highway 288
corridor. A strategic and target market study completed in 2009 shows that life sciences, port -related
activities, production/industrial, campus based back -office, and the education/public sectors are prime
areas of interest for the Pearland area. Combined with a mix of reinforcing land uses, urban planning, key
entertainment and cultural attractions, public spaces, and walkability and connectivity, all will provide for
livable sustainable developments.
Kelsey-Seybold, a major healthcare organization of 370 physicians, is building a new 170,000 square
foot, four story corporate headquarters on an 18 acre site in Shadow Creek Ranch, which will be home to
approximately 750 employees. The facility will be next to the Shadow Creek Business Center, an 80,000
square foot office building built in 2009, and Hospital Corporation of America's (HCA) 78,000 square
foot medical office building. Merit Medical Systems, a global medical device company, is building on a
12 acre site, a 120,000 square foot facility for research and development and manufacturing. Merit
Medical is expected to employee 220 employees at the Pearland facility.
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To the Honorable Mayor, Members
of City Council, and Citizens of the
City of Pearland, Texas
Sales tax for fiscal year 2011 totaled $19.8 million, an increase of $302,000 or 1.6% over fiscal year
2010. Pearland is a regional shopping destination, however with lower consumer confidence, potential
for job loss, debt, credit tightening, etc., homeowners tightened their budgets and spending over the past
couple of years. The economy, however, seems to be making a turn for the better, which should translate
to higher consumer confidence. As such, the City projected a 3.0% growth in sales tax for fiscal year
2012.
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 fmancial and
operational, to meet existing challenges and to plan for the future.
The City's Five -Year CIP for fiscal year 2012 through fiscal year 2016 totals $262 million and continues
to implement the $162 million bond program approved by the voters in May 2007, though at a slower
pace, which is financially feasible given the current economy. Projects include Drainage ($18M), Streets
($105M), Facilities ($21M), Parks ($26M), Water and Wastewater ($92M). 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. Those projects
that are unfunded will be identifying projects for a new bond referendum.
The Debt Service Fund forecast shows a need to increase the Debt Service component of the tax rate to
$0.5250 by fiscal year 2015 to implement the Five -Year CIP. This is slightly higher than last year's
forecast due to slower increases in property valuations through -out the forecast, however still consistent
with the financial modeling that the City undertook when analyzing the Debt Service tax implications of
implementing the $162 million bond referendum.
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 necessary for fiscal year 2011 or 2012, however, the model
anticipates rate increases for 2015 and 2016. With the implementation of past rate increases, the City's
utility system continues to be self-supporting and financially sound.
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. City Council adopted a set of Financial Management Policy Statements in August
2009. 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.
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• 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, even as it becomes one of the largest suburbs in the Houston
area. Some of the major initiatives are as follows:
Public Safety
Among numerous other reasons, families move to Pearland for a high degree of personal safety and a low
crime rate. The City Council continues to emphasize public safety and the City delivers programs in the
areas of law enforcement, emergency management, emergency medical services, and fire protection.
The City constructed and opened in January 2011 a $2.2 million, 9,800 square foot Fire Station located
off Kirby Drive, staffed 24/7 with Fire and EMS personnel. In order to enhance response times and to
protect life and property, the City also manned two other stations staffed 24/7 with a combination of full-
time, paid part-time, and volunteers.
Brazoria County MUD's 21 and 22 are constructing a Fire Station in the City's ETJ. This station will be
staffed and operated by Pearland Volunteer Firefighters with the MUD's bearing the cost of operations,
pursuant to a Strategic Partnership Agreement. This will greatly enhance response times out in the City's
southwestern ETJ, where development continues.
Economic Development
The Pearland Economic Development Corporation (PEDC) is a Type B non-profit corporation under the
Texas Development Corporation Act that utilizes a half cent sales tax collected in the City to carry out
economic development activities. The Corporation assists new and existing businesses that create new
jobs and capital investment. The Corporation works with the City 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.
In FY 2011, the City and PEDC were successful in recruiting KS Management Services to commit to
constructing a new 170,000 square foot 4-story corporate headquarters and Merit Medical, a global
medical device company, beginning construction on a 120,000 square foot research and development and
manufacturing facility on a 12 acre site on Kirby Drive. Combined these two projects will bring nearly
1,000 new jobs to the community.
The Pearland Economic Development Corporation continues to promote Pearland and is working with a
myriad of companies on future relocations and site visits as well as working with existing businesses on
future expansions.
To the Honorable Mayor, Members
of City Council, and Citizens of the
City of Pearland, Texas
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.
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 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.
The key issues addressed by the plan include drainage, transportation access, linkages, and transit;
revision of the existing zoning and development standards; incorporating new development with existing
uses; involving the existing municipal management districts; and incorporating public parks and open
spaces.
The master plan and associated regulatory recommendation of a form -based code envisions a market -
based approach and identifies different "character zones" of development, each implementing a unique
neighborhood within the Lower Kirby Urban Center. This form -based code is combined with the overall
infrastructure strategy that identifies the major regional drainage and roadway improvements needed to
bring the plan together. This master plan and implementation strategy for Lower Kirby ensure that the
vision for the mixed use regional destination is feasible, but flexible to address changing market
conditions. In order to implement this vibrant vision for the Lower Kirby Urban Center, PEDC is
working with the City of Pearland and the two area Municipal Management District Boards to create a
coordinated action plan that identifies the responsibilities and roles of each of the entities.
The City will also begin planning for the annexation of Brazoria County MUD #4, which will occur
December 2012, pursuant to a Strategic Partnership Agreement between the City and MUD. Brazoria
County MUD #4 encompasses approximately 600 acres and has an estimated population of 4,000. Upon
annexation all assets and obligations of the MUD will transfer to the City.
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 2012 — 2016 totals $262 million.
Projects include Drainage ($18M), Streets ($105M), Facilities ($21M), Parks ($26M), Water and
Wastewater ($92M).
Major thoroughfare projects include the widening of Bailey Road between FM1128 and Veterans,
widening three miles of Mykawa Road to a four lane facility, reconstruction of one mile of Old Alvin
Road from Plum Street to McHard Road, the extension of Pearland Parkway to Dixie Farm Road,
McHard Road extension from Mykawa to Cullen, and Longwood Street Reconstruction. Major drainage
projects include expansion of the D.L. Smith detention pond by approximately 150 acre-feet, an
additional 200 acre-feet of storm water storage in the Hickory Slough watershed, and future storm water
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regional detention. Major park projects include a soccer complex, improvements to Independence and
Centennial Parks, Phase I development of the Shadow Creek Ranch Park, and a 7,000 square foot Nature
Center. Facility projects include an 11,500 square feet expansion and renovation to the Tom Reid
Library, reconstruction of Fire Station #3 to accommodate a 24/7 manned station, Fire/EMS
administrative building, and traffic signal operational improvements with the takeover of TXDOT signals
in 2011. Water projects include the preliminary design of a 20 million gallon per day surface water plant
along with various waterline extensions. Wastewater projects include the replacement of Southdown
wastewater treatment plant, extension of trunk sewer on McHard, and various lift station projects.
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 over the next seven years as mentioned
reviously.
The City is also involved in regional efforts for long-range transportation planning. The Mayor is a
member of H-GAC's Transportation Policy Council (TPC), and an Assistant City Manager is a member
of the Technical Advisory Committee (TAC), a sub -committee of the TPC and the Transportation
Improvement Program (TIP) Subcommittee. The City submitted several proposed roadway projects from
its Capital Improvement Program for possible funding in the region's Transportation Improvement
Program for 2011-2014. In 2011, The TPC and TAC selected four City of Pearland projects for funding.
The projects are the Traffic Signal System Improvements (2012), Pearland Parkway Extension (2013),
Max Road (2014), and Fite Road (2014). These projects will receive 80% funding from state or federal
sources totaling $20,180,901 with the city providing 20% matching funds. The City continues to work
with the Brazoria County Toll Road Authority (BCTRA) to develop viable low cost alternatives for the
Hwy 288 toll facility that can be constructed on a near -term schedule (3-5 years) to provide immediate
relief to congestion along the corridor. H-GAC has planned a "Call for Projects" in 2012 for the 2013-
2016 TIP. The City will submit several proposed roadway projects from its Capital Improvement
Program in this new "Call for Projects" in an effort to continue to secure state and federal funding for
projects in order to reduce the funding burden on the city taxpayers.
Another avenue the City has been pursuing to improve the transportation system is a Park-n-Ride facility.
The SH 288/Brazoria County Park & Ride Stake Holders Group has been meeting since late 2009 to find
a site for a Park & Ridefacility in Northern Brazoria County to provide transportation services for the
area.
On January 31, 2010, the State Holders Group met and unanimously recommended to METRO that they
pursue the purchase of a parcel of property adjacent to SH 288 at Smith Ranch Road and Country Road
403 for the site. METRO subsequently submitted an application to the Federal Transit Authority (FTA)
for a Categorical Exclusion (CE) for the site and on July 21, 2011, METRO received concurrence on their
application for the CE. On November 30, 2011, METRO closed on 15.1 acres of land along Smith Ranch
Road and County Road 403 for the Park & Ride site. It is anticipated the project will take approximately
eighteen (18) months from the date the property was purchased before Park-n-Ride services will be
available.
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second phase adding an additional 700 hundred parking spaces. The service area for the project
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To the Honorable Mayor, Members
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City of Pearland, Texas
encompasses cities within Northern Brazoria County and Southern Harris County. The service will run
between the Pearland area and the Texas Medical Center/Transit Center located at Fannin at Galen. The
Texas Medical Center (TMC), the largest medical center in the world, houses 13 hospitals, 46 institutions
(colleges, universities, research facilities, etc.), employs approximately 73,600 people, and annually
services approximately 5.1 million patients.
The proposed fare for service each way will be $3.25. The Park-n-Ride will operate Monday through
Friday (weekday service only). The service will be offered weekday mornings from 5:15 AM to 8:15 AM
and 3:15 PM to 7:00 PM in the evenings. It is anticipated the headway times for the busses will be every
12 minutes. METRO will provide a guaranteed ride home program during the day for those individuals
that require a ride home during the times the regular bus service is not in operation.
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 pro -active 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 future.
Fiscal Sustainability is even more important given the current state of the economy. Based on the long-
range forecast and impacts to the debt service and operating funds, the City has delayed several major
capital improvement projects until it is anticipated that the City can afford those projects. The City also
identified programs and line -items that could be reduced with little or no impact to the citizens resulting
in net budget reductions totaling $811,000 in the City's General Fund budget and $56,000 in the
Water/Sewer Fund for the 2012 fiscal year. Over the past two years base budget reductions to the
General Fund totaled $4.0 million. While only a few months into the 2012 fiscal year, the City is already
beginning to prepare for the 2013 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, 2010. This was the 34th
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. We believe that our current
comprehensive annual financial report continues to meet the Certificate of Achievement Program's
requirements, and we are submitting it to GFOA to determine its eligibility for another certificate.
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To the Honorable Mayor, Members
of City Council, and Citizens of the
City of Pearland, Texas
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 su►mitte
Bill Eisen, City Manager
Rickbver card, Assistant Director of Finance
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Claire Bogard, Director of Finance
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Pearland
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2010
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
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Independent Auditors' Report
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, 2011, which collectively comprise the City's basic
financial statements as listed in the table of contents. These financial statements are the responsibility of
City's management. Our responsibility is to express opinions on these financial statements based on our
audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used
and the significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, each major fund,
and the aggregate remaining fund information of the City as of September 30, 2011, and the respective
changes in financial position, and cash flows, where applicable, thereof for the year then ended in
conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated February 20,
2012, 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 and should be considered in assessing the results of our
audit.
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis on pages 5 through 15, and budgetary comparison, required pension system, and
other post -employment benefits on pages 68 through 70 be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting
for placing the basic financial statements in an appropriate operational, economic, or historical context.
We have applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
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To the Honorable Mayor and Members of
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or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's financial statements as a whole. The introductory section, combining and individual
non -major fund financial statements and schedules, and statistical section, are presented for purposes of
additional analysis and are not a required part of the financial statements. The combining and individual
non -major fund financial statements and schedules are the responsibility of management and were derived
from and relate directly to the underlying accounting and other records used to prepare the financial
statements. The information has been subjected to the auditing procedures applied in the audit of the
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the financial
statements or to the fmancial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the information is
fairly stated in all material respects in relation to the financial statements 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 it.
Houston, Texas
February 20, 2012
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Management's Discussion and Analysis
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CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Pearland, 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, 2011.
FINANCIAL HIGHLIGHTS
• The assets of the primary government of the City of Pearland exceeded its liabilities as of
September 30, 2011, by $620.6 million (net assets). Of this amount, $28.5 million (unrestricted
net assets) may be used to meet the City's ongoing obligations to citizens and creditors in
accordance with the City's fund designation and fiscal policies. The remaining amount is for
investments in capital assets, net of related debt and amounts restricted for capital projects,. debt
service, and community development projects.
• The City's total primary government net assets decreased by $9.9 million due to lower capital
contributions from developers.
• At the close of the current fiscal year, the City of Pearland's governmental funds reported
combined ending fund balances of $47.2 million, a decrease of $7.5 million in comparison with
the prior year, approximately all of which is related to capital projects. Approximately $23.5
million of the September 30, 2011, fund balance can be attributed to unspent bond proceeds for
capital projects.
• As of September 30, 2011, the unassigned fund balance for the General Fund was $14.1 million
or 29% of total General Fund expenditures. The total fund balance for the General Fund is $14.5
million or 30% of General Fund expenditures.
• The City of Pearland's General Obligation and Certificates of Obligation debt for governmental
activities totaled $298.3 million, a net increase of $12.1 million over the previous year. The
increase is attributable to the issuance of new debt offset by principal payments of $9.5 million.
The City's debt for business activities totaled $123.0 million, a net decrease of approximately
$4.0 million from the previous year from principal payments.
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 Assets presents information on all of the City's assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets may
serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The Statement of Activities presents information showing how the City's net assets changed during the
fiscal year. All changes in net assets 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).
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CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
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 of Pearland 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 of Pearland, itself (known as the primary
government), but also a legally separate Economic Development Corporation, Tax Increment
Reinvestment Zone (TIRZ) and the Development Authority of Pearland for which the City of Pearland is
financially accountable. Financial information for these component units is reported separately from the
financial information presented for the primary government, itself.
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 financing
requirements.
Because the focus of governmental funds is narrower than that of the government -wide fmancial
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 and other funds, which are considered to be
major funds. Data from the other 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 of Pearland 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.
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CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Proprietary Funds - The City maintains one type of proprietary fund. 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.
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 24 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 26 through 29 of this report.
Combining Component Unit Financial Statements - The City's three discretely presented component units
shown in aggregate on the face of the government -wide financial statements have individual information for each
of the major discretely presented component units presented in the form of combining statements immediately
following the fund financial statements of the primary govemment.
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 32 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 68
of this report.
7
CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Government -wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the City, assets exceeded liabilities by $620.6 million at the close of the most
recent fiscal year.
By far the largest portion of the City's net assets (92% percent) reflects its investment in capital assets
(e.g., land, 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 ASSETS
September 30, 2011 and 2010
Amounts in (000's)
Governmental Activities Business -type Activities
Totals
2011 2010 2011 2010 2011 2010
Assets
Current and other assets $ 72,544 $ 79,176 $ 41,119 $ 47,585 $ 113,663 $ 126,761
Capital assets 695,754 684,774 268,051 263,167 963,805 947,941
Total Assets 768,298 763,950 309,170 310,752 1,077,468 1,074,702
Liabilities
Other liabilities 12,205 11,042 8,169 8,159 20,374 19,201
Long-term liabilities outstanding 311,649 298,553 124,859 128,820 436,508 427,373
Total Liabilities
323,854 309,595 133,028 136,979 456,882 446,574
Net assets
Invested in capital assets, net
of related debt 413,439 422,643 156,629 144,244 570,068 566,887
Restricted 16,462 18,020 5,603 17,587 22,065 35,607
Unrestricted 14,543 13,692 13,910 11,942 28,453 25,634
Total Net Assets $ 444,444 $ 454,355 $ 176,142 $ 173,773 $ 620,586 $ 628,128
An additional portion of the City's net assets (4%) represents resources that are subject to extemal restrictions
on how they may be used. The remaining balance of unrestricted net assets (5%) may be used to meet the
government's ongoing obligations to citizens and creditors.
The decrease in Total Net Assets from the prior year is $7.5 million, which is mostly attributed to a
decrease in restricted net assets for impact fees related to capital projects of $13.6 million.
8
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CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
COMPARATIVE SCHEDULE OF CHANGES IN NET ASSETS
For the Years Ended September 30, 2011 and 2010
Amounts in (000's)
Governmental Activities Business -type Activities Totals
2011 2010 2011 2010 2011 2010
Revenues
Program revenues:
Charges for services $ 10,356 $ 8,524 $ 35,921 $ 32,274 $ 46,277 $ 40,798
Operating grants and
contributions 7,399 6,646 61 70 7,460 6,716
Capital grants and
contributions 10,330 29,898 4,215 8,611 14,545 38,509
Property taxes 33,451 32,963 33,451 32,963
Sales and use taxes 13,983 13,578 13,983 13,578
Franchise taxes 5,605 5,426 5,605 5,426
Investment earnings 157 253 117 100 274 353
Other 1,909 1,028 9 779 1,918 1,807
Total Revenues 83,190 98,316 40,323 41,834 123,513 140,150
Expenses
General Government 15,945 13,439 15,945 13,439
Public Safety 23,042 24,268 23,042 24,268
Public Works 31,131 35,680 31,131 35,680
Community Services 3,254 3,323 3,254 3,323
Parks and Recreation 8,062 7,699 8,062 7,699
Interest on long-term debt 13,142 13,738 13,142 13,738
Water and Sewer 29,194 27,157 29,194 27,157
Solid Waste 7,285 7,089 7,285 7,089
Total Expenses 94,576 98,147 36,479 34,246 131,055 132,393
Increase (decrease) in net
assets before transfers (11,386) 169 3,844 7,588 (7,542) 7,757
Transfers 1,475 1,186 (1,475) (1,186)
Increase in net assets (9,911) 1,355 2,369 6,402 (7,542) 7,757
Net assets - beginning (as
restated) 454,355 453,000 173,773 167,371 628,128 620,371
Net assets - ending $ 444,444 $ 454,355 $ 176,142 $ 173,773 $ 620,586 $ 628,128
At the end of the current fiscal year, the City is able to report positive balances in all three categories of
net assets, both for the government as a whole, as well as for its separate governmental and business -type
activities.
The most significant change in net assets occurred with a net decrease of $21.4 million of contributions of
infrastructure by developers.
9
CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Governmental activities - Governmental activities decreased the City's net assets by $9.9 million,
thereby accounting for 131 % percent of the total decrease in the net assets of the City. Key elements of
this increase are as follows:
• Property taxes, sales and use taxes, and franchise taxes totaled $33.5 million, $14.0 million, and
$5.6 million respectively. These revenues increased by $1.1 million from prior year primarily as
a result of an increase in both property tax valuations and debt service tax rates.
• Capital Contributions totaled $10.3 million as a result of infrastructure contributed by
developers.
• The revenues were offset by expenses for general government, public safety, and public works
of $15.9 million, $23.0 million, and $31.1 million respectively. These expenses were relatively
consistent with the prior year.
• The increase in net assets was also offset by interest expense on long-term debt of $13.1
million, a decrease of $0.6 million from the prior year. This expense was relatively consistent
with the prior year and the decrease is due to debt retirements and refunding.
$35,000
$30,000
,1 $25,000
o $20,000
o $15,000
$10,000
$5,000
$-
Expenses and Program Revenues - Governmental Activities
117-11
0 Expenses
• Program Revenues
9 s'
• 40
e
v v
4s ,4. .a4a •04
G�'4e G°� 4�,ts �,5�04
Revenues by Source - Governmental Activities
Chargesfor services
12%
Other
3%
Property taxes
40%
Grants and
contributions
21%
Franchise taxes
7%
Sales and use taxes
17%
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CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Business -type activities - Business -type activities increased the City's net assets by $2.4 million. Key
elements of this increase are as follows.
• Charges for services of $35.9 million increased approximately $3.6 million over the prior year
primarily due to an increase in water and sewer consumption due to lack of rainfall.
• Capital grants and contributions of $4.2 million decreased $4.4 million from the prior year due
to decreased contributions of infrastructure from developers.
• The revenues listed above were offset by expenses of $29.2 million and $7.3 million
respectively for Water and Sewer and Solid Waste. Expenses for Water and Sewer increased
from prior year by $2.0 million mainly due to an increase in the purchase of surface water from
lack of rainfall.
$35,000
$30,000
$25,000
c $20,000
$15,000
$10,000
$5,000
$-
Expenses and Program Revenues - Business -type Activities
Water and Sewer
Solid Waste
Revenues by Source - Business -type Activities
Grants and
contributions
11%
Charges for
services
89%
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11
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 $47.2 million. A portion of the combined
fund balance, or $14.1 million, is unassigned and available for day-to-day operations of the City; $23.6
million is restricted for debt service; and the remaining balance is restricted for capital projects.
There was a decrease in the combined fund balance of $7.5 million from the prior year. The decrease in
fund balance includes a decrease in the capital projects fund balance of approximately $7.4 million due to
capital expenditures of $27.9 million, offset by bond issues of $20 million; a decrease of $1.5 million in the
debt service fund balance, and a combined decrease of approximately $227,000 in the remaining special
revenue funds.
With a current year increase of $1.7 million, mainly in Charges for Services for TIRZ Administration fees
and Recreation Center/Natatorium fees, the General Fund's fund balance totaled $14.5 million at year end.
In the Capital Projects Fund, the City spent $27.9 million on various improvement projects. Additionally,
the City issued $19.4 million in General Obligation Bonds and $2.1 million in Certificates of Obligation,
leaving an ending fund balance of $23.5 million.
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.
12
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CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
GENERAL FUND BUDGETARY HIGHLIGHTS
During the year, there was a $1 0 million increase in appropriations between the original and final
amended budget. The increase in appropriations is attributable to carryover funding from prior -year
encumbrances and projects and to reflect projections during the 2011-2012 budget process.
Budget estimates for revenues and other sources combined increased by approximately $524,000 for the
year; also to reflect carryovers and revised projections. Actual revenues of $46.1 million were $811,000
over the final budget mainly in franchise fees and charges for services. Actual expenditures of $48.5 million
were under budget by $2.0 million, resulting in the year-end fund balance of $14.5 million over budget by
$2.8 million.
At year-end, equipment purchases and several projects were still in progress and part of the $2.8 million will
be carried over and reappropriated in the 2011-2012 budget year.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets - At the end of fiscal year 2011, the City's governmental activities and business -type
activities had invested $695.8 million and $268.1 million, respectively, in a variety of capital assets and
infrastructure, as reflected in the following schedule. This represents a net increase of $4.9 million, or 1.9
percent over the end of last fiscal year for the business -type activities capital assets and a net increase of$11.0
million or 1.6 percent for the governmental activities capital assets.
Governmental Activities Business -Type Activities Totals
2011 2010 2011 2010 2011 2010
Land $ 28,409 $ 28,457 $ 3,610 $ 3,610 $ 32,018 $ 32,066
Construction in progress 32,868 119,832 24,891 27,808 57,759 147,640
Infrastructure 564,903 509,657 179,648 172,082 744,551 681,739
Buildings and improvements 63,351 20,586 28,615 27,152 91,966 47,738
Machinery and equipment 6,224 6,242 1,299 1,148 7,523 7,390
Contractual water rights 29,988 31,368 29,988 31,368
Total Capital Assets $ 695,754 $ 684,774 $ 268,051 $ 263,167 $ 963,805 $ 947,941
Construction in progress at year-end represents numerous ongoing projects, the largest of which relate to
street, drainage and water/sewer projects. Additional information on the City's capital assets can be found
in Note 4 to the financial statements.
13
CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Long -Term Debt - At the end of the current fiscal year, the City had total bonds, certificates of
obligation, notes, capital leases, and post employment liabilities outstanding of $436.5 million. Of this
amount, $207.1 million is composed of general obligation bonds, $100.9 million is composed of certificates
of obligation and $113.3 million represents revenue bonds secured solely by specified revenue sources.
Governmental Activities Business -Type Activities Totals
2011 2010 2011 2010 2011 2010
General obligation bonds $ 207,105 $ 193,785 $ $ $ 207,105 $ 193,785
Deferred amount for issuance
premium/(discount) 3,489 3,623 656 783 4,145 4,406
Revenue bonds 113,270 116,440 113,270 116,440
Certificates of obligation 91,150 92,380 9,730 10,540 100,880 102,920
Capital leases payable 4,032 3,237 421 345 4,453 3,582
Compensated absences 4,669 4,654 558 546 5,227 5,200
Post employment benefit liability 1,204 873 224 166 1,428 1,039
$ 311,649 $ 298,552 $ 124,859 $ 128,820 $ 436,508 $ 427,372
The City of Pearland's General Obligation and Certificates of Obligation debt for governmental activities
increased to $298.3 million. The key factor was the sale of Permanent Improvement and Refunding
Bonds of $19.4 million, of which $1.6 million was bonds refunded to pay Water and Sewer activities, and
$2.1 million in Certificates of Obligation. The increase was offset by principal payments of $7.4 million.
The City's debt for business activities decreased to $123.0 million, a net decrease of $4.0 million from the
previous year, which was a result of principal payments of $4.0 million.
Current ratings on debt issues are as follows:
General obligation bonds
Revenue bonds
Standard
and Poors Fitch
AA- AA
AA- AA -
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 Poors. Additional information on the City's long-
term debt can be found in Note 5 to the financial statements.
14
CITY OF PEARLAND, TEXAS
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES
Two primary factors in the 2012 budget are the economy and the continued growth in population served
by the City. Economic conditions in the nation and the Houston region continue to impact growth of the
City's revenues, and property values, sales tax and permits are expected to remain relatively flat. New
home starts for 2012 are expected to still remain at a relatively low level with the issuance of 750 single
family building permits projected in FY 2012, which is flat with 2011. Commercial construction is
expected to continue with current year activity. Sales tax revenues in FY 2011 have been inconsistent
month to month compared to the prior year, however, FY 2011 did show an increase of $302,000 or 1.6%
over FY 2010. Area economists are forecasting an improvement in the economy for the upcoming year.
As a result, the FY 2012 budget projects a 3% increase in sales tax revenue over FY 2011.
Operating costs for new facilities should not significantly impact the City in FY2012, however, the City
will see the effects of serving an increased population with relatively limited revenues. To address these
increased costs the City identified $867,000 in reduction of expenditures, along with an increase of 2.0
cents in the ad valorem tax rate. The entire increase in the tax rate is related to debt service, and the
portion of the property tax rate that funds operations will remain the same. Operating revenue from
property taxes is expected to essentially remain unchanged from FY 2011.
The Pearland City Council approved a $51.5 million General Fund budget for FY 2012. This is a 3.7%
increase from the FY 2011 adopted budget. The increase is mainly due to a full year funding of positions
budgeted part -year in FY 2011, as well as new positions added in FY 2012. The budget incorporates a tax
rate of $0.6851 per $100 of valuation, which is an increase of $0.02 or 3.0% over last year, however, the
increase is for debt service. The General Fund budget includes the use of $454,000 in fund balance to
fund non -recurring capital items.
The Water and Sewer fund is able to fund operations, debt service, and bond coverage requirements with
no increase in rates. This is mainly attributable to efficient operations and transfers in from water and
sewer impact fee funds used towards annual debt service payments. $2.8 million of reserve funds,
however, is planned to be used for capital expenditures.
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 Claire Bogard, Director of Finance, at 3519 Liberty Drive, Pearland, Texas 77581, or call (281) 652-
1600. For general information, visit the City's website at www.cityofpearland.com.
15
Basic Financial Statements
17
CITY OF PEARLAND, TEXAS
STATEMENT OF NET ASSETS
September 30, 2011
Assets
Cash and equivalents
Investments
Receivables, net of allowance
for uncollectibles
Due from primarily government
Due from other governmental agencies
Inventories
Prepaid items
Restricted cash and investments
Deferred charges
Capital assets:
Capital assets not subject
to depreciation
Capital assets, net of
accumulated depreciation
Total Capital Assets
Total Assets
Liabilities
Accounts payable and accrued liabilities
Due to component units
Accrued interest
Unearned revenues
Customer deposits
Long-term liabilities
Due within one year
Due in more than one year
Total Liabilities
Net Assets
Invested in capital assets, net of
related debt
Restricted for:
Capital improvements
Debt service
Community development programs
Public saftey
Unrestricted
Total Net Assets
See Notes to Financial Statements.
r
Primary Government
Governmental
Activities
Business -type
Activities
Total
Discretely
Presented
Component
Units
$ 37,623,761 $ 5,571,500 $ 43,195,261 $ 10,718,244
12,694,389
16,996,355
752,210
106,008
195,146
4,176,446
13,381
21,892,608
1,863,359
8,091,699 20,786,088 3,611,882
3,686,809 20,683,164 1,260,937
12,691
752,210
106,008
208,527 11,355
21,892,608 3,377,841
6,039,805 3,191,767
61,276,237 28,500,935 89,777,172 3,220,907
634,478,235 239,549,649 874,027,884 6,658,827
695,754,472 268,050,584 963,805,056 9,879,734
768,298,787 309,169,940 1,077,468,727 32,064,451
6,997,572
12,691
1,064,735
3,938,231
191,981
10,072,718
301,576,724
5,213,312
430,297
2,525,754
4,295,146
120,563,813
12,210,884
12,691
1,495,032
3,938,231
2,717,735
14,367,864
422,140,537
51,255
279,895
38,333
2,740,000
71,638,393
323,854,652 133,028,322 456,882,974 74,747,876
413,439,024 156,629,158 570,068,182 (64,498,659)
126,000 4,606,267 4,732,267
11,761,173 995,863 12,757,036
4,033,972 4,033,972
540,953 540,953
14,543,013 13,910,330 28,453,343
$ 444,444,135 $ 176,141,618 $ 620,585,753 $ (42,683,425)
2,528,304 •
19,286,930
19
CITY OF PEARLAND, TEXAS
STATEMENT OFACTIVITIES
For the Year Ended September 30, 2011
Program Revenue
Charges for Operating Grants Capital Grants and
Functions/Programs Expenses Services and Contributions Contributions
Primary Government
Governmental Activities:
General Government $ 15,945,446 $ $ 5,487,721 $
Public Safety 23,042,274 3,678,787 407,155
Public Works 31,129,640 17,532 675,382 10,329,534
Community Services 3,253,947 4,632,490 366,457
Parks and Recreation 8,061,470 2,026,698 462,012
Interest on long-term debt 13,142,041
Total Governmental Activities 94,574,818 10,355,507 7,398,727 10,329,534
Business -type activities:
Water and Sewer 29,194,345 28,664,325 60,778 4,215,224
Solid Waste 7,285,033 7,257,020
Total Business -Type Activities 36,479,378 35,921,345 60,778 4,215,224
Total Primary Government $ 131,054,196 $ 46,276,852 $ 7,459,505 $ 14,544,758
Component Units:
Pearland Economic Development
Corporation $ 3,912,444 $ 202,519 $ $
Tax Increment Reinvestment Zone #2 5,527,689
Development Authority of Pearland 12,427,195
Total Component Units $ 21,867,328 $ 202,519 $ $
See Notes to Financial Statements.
General Revenues:
Taxes:
Property taxes
Sales and use taxes
Franchise taxes
Unrestricted investment earnings
Miscellaneous
Transfers
Total General Revenues and Transfers
Change in net assets
Net assets - beginning (as restated)
Net assets - ending
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Net (Expense) Revenue and Changes in Net Assets
Primary Government
Governmental Business -type
Activities Activities Total Component Units
$ (10,457,725) $ $ (10,457,725)
(18,956,332) (18,956,332)
(20,107,192) (20,107,192)
1,745,000 1,745,000
(5,572,760) (5,572,760)
(13,142,041) (13,142,041)
(66,491,050) (66,491,050)
3,745,982
(28,013)
3,745,982
(28,013)
3,717,969 3,717,969
(66,491,050)
3,717,969 (62,773,081)
$ (3,709,925)
(5,527,689)
(12,427,195)
(21,664,809)
33,451,174 33,451,174 14,724,037
13,983,299 13,983,299 6,593,971
5,605,394 5,605,394
156,558 116,167 272,725 25,538
1,909,105 9,454 1,918,559 455,004
1,474,792 (1,474,792)
56,580,322 (1,349,171) 55,231,151 21,798,550
(9,910,728) 2,368,798 (7,541,930) 133,741
454,354,863 173,772,820 628,127,683 (42,817,166)
$ 444,444,135 $ 176,141,618 $ 620,585,753 $ (42,683,425)
21
CITY OF PEARLAND, TEXAS
BALANCE SHEET
GOVERNMENTAL FUNDS
September 30, 2011
Assets
Cash and cash equivalents
Investments
Receivables, net of allowance
for uncollectibles
Due from other governments
Due from other funds
Inventories
Prepaid items
Total Assets
Liabilities and Fund Balances
Liabilities
Accounts payable
Accrued expenditures
Deposits
Due to other funds
Deferred revenue
Total Liabilities
Fund balances:
Non -spendable:
Inventories
Prepaid items
Restricted for:
Debt service
Capital improvements
Community development
programs
Public safety
Assigned for:
Encumbrances
Unassigned
General fund
Total fund balances
Total Liabilities and
Fund Balances
General Fund Debt Service
Capital
Projects Fund
Other
Governmental
Funds
Total
Governmental
Funds
$ 6,706,599 $ 4,041,023 $ 22,388,208 $ 3,884,268 $ 37,020,098
7,681,312 1,000,996 4,012,081 12,694,389
5,336,726 11,098,233
608,705
165,352
106,008
24,480 166,894
$ 20,629,182 $ 16,307,146
$ 1,783,878 $ 166,894
1,409,846 3,951
191,981
4,253 8,438
2,715,678 10,968,322
6,105,636 11,147,605
106,008
24,480
126,000
160,444
14,106,614
14,523,546
166,894
4,992,647
8,817
143,505
548,873
3,772
16,992,649
752,210
165,352
106,008
195,146
$ 26,552,611 $ 4,436,913 $ 67,925,852
$ 3,091,636 $ 292,387 $ 5,334,795
1,413,797
191,981
104,257 116,948
6,297 13,690,297
3,091,636 402,941 20,747,818
23,460,975
5,159,541 23,460,975
106,008
3,772 195,146
4,992,647
23,586,975
3,489,247 3,489,247
540,953 540,953
160,444
14,106,614
4,033,972 47,178,034
$ 20,629,182 $ 16,307,146 $ 26,552,611 $ 4,436,913 $ 67,925,852
See Notes to Financial Statements.
22
CITY OF PEARLAND, TEXAS
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO
THE STATEMENT OF NET ASSETS
September 30, 2011
Total fund balance, governmental funds $ 47,178,034
Amounts reported for governmental activities in the Statement of Net Assets are different
because:
Capital assets used in governmental activities are not current financial resources and
therefore are not reported in this fund financial statement, but are reported in the
governmental activities of the Statement of Net Assets.
Certain other long-term assets (property taxes receivable and adjudicated court fines
receivable) are not available to pay current period expenditures and therefore are not reported
in this fund financial statement, but are reported in the governmental activities of the
Statement of Net Assets.
695,754,472
9,752,065
Some liabilities are not due and payable in the current period and are not included in the fund
financial statement, but are included in the governmental activities of the Statement of Net
Assets.
Bonds and capital leases payable (305,776,423)
Compensated absences (4,668,853)
Accrued interest governmental activity debt (1,060,784)
Estimated post employment benefit liability (1,204,166)
Deferred bond issuance costs 4,176,446
The assets and liabilities of certain internal service funds are not included in the fund
financial statement, but are included in the governmental activities of the Statement of Net
Assets. 293,344
Net Assets of Governmental Activities in the Statement of Net Assets
See Notes to Financial Statements.
$ 444,444,135
23
CITY OF PEARLAND, TEXAS
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended September 30, 2011
Revenues
Property taxes
Sales and use taxes
Franchise fees
Licenses and permits
Fines and forfeitures
Charges for services
Investment eamings
Intergovernmental
Other
Total Revenues
Expenditures
Current:
General government
Public safety
Public works
Community services
Parks and recreation
Debt Service:
Principal
Interest and other charges
Bond issuance costs
Capital outlay
Intergovernmental
Total Expenditures
Excess (deficiency) of revenues
over expenditures
Other Financing Sources (Uses)
Issuance of debt
Refunding bonds issued
Payments to refunded bond escrow agent
Bond premium
Capital leases
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net change in fund balances
Fund balances - beginning
Fund balances - ending
See Notes to Financial Statements.
Capital
General Fund Debt Service Projects Fund
Other
Governmental
Funds
$ 10,867,570 $ 22,586,408 $ $
13,331,189
5,605,394
1,720,856
2,714,217
10,882,021 805,071
59,859 29,218 61,288
350,441 1,087,629
542,958 578,874
46,074,505 23,420,697 1,727,791
8,045,261
23,716,470
6,505,139
3,027,088
7,171,812
2,157,925
8,217,402
13,302,477
240,123
25,545,778
3,954,050
48,465,770 25,473,929 27,943,826
(2,391,265) (2,053,232) (26,216,035)
1,288,891
2,933,865
(169,741)
4,053,015
1,661,750
12,861,796
$ 14,523,546
1,630,000
(1,630,140)
55,521
451,704
507,085
(1,546,147)
6,705,688
$ 5,159,541
Total
Governmental
Funds
$ 33,453,978
652,110 13,983,299
5,605,394
1,720,856
180,478 2,894,695
11,687,092
5,708 156,073
761,034 2,199,104
438,105 1,559,937
2,037,435
662,738
209,646
349,142
366,935
157,564
73,260,428
10,865,924
23,926,116
6,505,139
3,376,230
7,538,747
8,217,402
13,302,477
240,123
25,703,342
3,954,050
1,746,025 103,629,550
291,410 (30,369,122)
20,006,813 20,006,813
1,630,000
(1,630,140)
55,521
1,288,891
139,574 3,525,143
(1,362,617) (517,993) (2,050,351)
18,783,770 (517,993) 22,825,877
(7,432,265) (226,583) (7,543,245)
30,893,240 4,260,555 54,721,279
$ 23,460,975 $ 4,033,972 $ 47,178,034
24
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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, 2011
Net change in fund balances - total governmental funds: $ (7,543,245)
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Governmental funds report outlays for capital assets as expenditures because such outlays use
current financial resources. In contrast, the Statement of Activities reports only a portion of the
outlay as expense. The outlay is allocated over the assets' estimated useful lives as depreciation
expense for the period.
This is the amount by which capital outlays of $25,741,070 exceeded depreciation of $25,010,269
in the current period.
730,801
Capital assets net of related debt acquired as a result of Municipal Utility District annexation. 10,249,631
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 eamed. 49,731
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.
(13,053,490)
Governmental funds report bond issuance costs as expenditures. In contrast, the government wide
financial statements amortized such a cost over the life of the bonds. 316,216
Some expenses reported in the statement of activities do not require the use of current financial
resources and these are not reported as expenditures in governmental funds:
Accrued interest not reflected in Governmental funds (26,784)
Amortization of bond issuance costs (82,779)
Capital lease activity (426,496)
Post employment benefit liability (345,883)
Internal service funds are used by management to charge the costs of certain activities,
such as property and liability insurance coverage and employee health benefits, to
individual funds. The net revenue (expense) of certain internal service funds is reported
with governmental activities.
Change in net assets of governmental activities
See Notes to Financial Statements.
221,570
$ (9,910,728)
25
CITY OF PEARLAND, TEXAS
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
September 30, 2011
Business -type Activities - Enterprise Funds
Water and Sewer Solid Waste
Fund Fund
Total
Governmental
Activities -
Internal
Service Fund
Assets
Current assets:
Cash and cash equivalents $ 3,674,202 $ 1,897,298 $ 5,571,500 $ 603,663
Investments 8,091,699 8,091,699
Accounts receivable, net of allowance for doubtful accounts 3,002,140 684,669 3,686,809 3,707
Prepaid items 13,381 13,381
Restricted cash and cash equivalents 21,892,608 21,892,608
Total current assets 36,674,030 2,581,967 39,255,997 607,370
Non -current assets:
Deferred charges 1,863,359 1,863,359
Capital assets:
Land and improvements 3,609,542 3,609,542
Construction in progress 24,891,393 24,891,393
Contractual rights to water supply 34,511,428 34,511,428
Infrastructure 254,701,621 254,701,621
Buildings 31,256,473 31,256,473
Machinery and equipment 3,334,000 3,334,000
Less Accumulated depreciation (84,253,873) (84,253,873)
Total non -current assets 269,913,943 269,913,943
Total Assets 306,587,973 2,581,967 309,169,940 607,370
Liabilities
Current liabilities:
Accounts payable and accrued expenses 2,847,651 2,365,661 5,213,312 252,931
Accrued interest payable 430,297 430,297
Due•to other funds 61,095
Customer deposits 2,525,754 2,525,754
Compensated absences - current portion 81,417 81,417
Bonds and certificates of obligation payable - current portion 4,135,000 4,135,000
Capital lease - current portion 78,729 78,729
Total current liabilities 10,098,848 2,365,661 12,464,509 314,026
Non -current liabilities:
Compensated absences 476,799 476,799
Capital lease obligation 342,364 342,364
Other post -employment benefits 224,017 224,017
Bonds and certificates of obligation payable 119,520,633 119,520,633
Total non -current liabilities 120,563,813 120,563,813
Total Liabilities 130,662,661 2,365,661 133,028,322 314,026
Net Assets
Invested in capital assets, net of related debt 156,629,158 156,629,158
Restricted for debt service 995,863 995,863
Restricted for capital projects 4,606,267 4,606,267
Unrestricted 13,694,024 216,306 13,910,330 293,344
Total Net Assets $ 175,925,312 $ 216,306 $ 176,141,618 $ 293,344
See Notes to Financial Statements.
26
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CITY OF PEARLAND, TEXAS
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For the Year Ended September 30, 2011
Business -type Activities - Enterprise Funds
Water and Sewer Solid Waste
Fund Fund
Total
Governmental
Activities -
Internal
Service Fund
Revenues
Charges for services $ 28,664,325 $ 7,257,020 $ 35,921,345 $ 5,672,413
Operating Expenses
Personnel services 4,601,377 4,601,377
Supplies and materials 2,218,217 2,218,217
Contractual services 7,030,580 7,269,356 14,299,936 5,385,383
Repairs and maintenance 1,230,743 1,230,743 65,943
Other expenses 448,364 15,677 464,041
Depreciation and amortization 8,138,881 8,138,881
Total Operating Expenses 23,668,162 7,285,033 30,953,195 5,451,326
Operating income (loss) 4,996,163 (28,013) 4,968,150 221,087
Non -Operating Revenues (Expenses)
Eamings on investments 115,933 234 116,167 482
Miscellaneous revenue (expense) 1,735 1,735
Operating grants and contributions 60,778 60,778
Gain (loss) on disposal of capital assets 7,719 7,719
Interest expense (5,526,183) (5,526,183)
Total Non -Operating Revenues (Expenses) (5,341,753) 1,969 (5,339,784) 482
Income (loss) before contributions and transfers (345,590) (26,044) (371,634) 221,569
Capital contributions 4,215,224 4,215,224
Transfers in 169,740 169,740
Transfers out (1,644,532) (1,644,532)
Change in net assets 2,394,842 (26,044) 2,368,798 221,569
Total net assets - beginning 173,530,470 242,350 173,772,820 71,775
Total net assets - ending $ 175,925,312 $ 216,306 $176,141,618 $ 293,344
See Notes to Financial Statements.
27
CITY OF PEARLAND, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended September 30, 2011
Cash Flows from Operating Activities
Receipts from customers and users
Disbursed for personnel services
Disbursed for goods and services
Net cash provided (used) by operating activities
Cash Flows from Noncapital Financing Activities
Transfers from funds
Transfers to other funds
Operating grants and contributions
Net cash provided by (used by) noncapital
financing activities
Business -type Activities - Enterprise Funds
Water and Sewer Solid Waste
Fund Fund
$ 29,112,952
(4,598,606)
(12,320,355)
12,193,991
169,740
(1,644,532)
60,778
(1,414,014)
Cash Flows from Capital and Related Financing Activities
Proceeds from the sale of equipment
Capital grants and contributions
Proceeds from the issuance of debt
Principal payments on debt
Acquisition and construction of capital assets
7,719
3,336,439
152,800
(4,057,064)
(11,389,831)
Net cash used by capital and related financing activities (11,949,937)
Cash Flows from Investing Activities
Purchase of investments
Interest received
Interest paid
Net cash provided by (used by) investing activities
Net increase (decrease) in cash and equivalents
Cash and equivalents, beginning
Cash and equivalents, end
Unrestricted cash and equivalents
Restricted cash and equivalents
See Notes to Financial Statements.
(4,044,741)
115,933
(5,526,183)
(9,454,991)
(10,624,951)
36,191,761
Total
Page 1 of 2
Governmental
Activities -
Internal
Service Fund
$ 7,402,448 $ 36,515,400 $ 5,668,706
(4,598,606)
(6,152,300) (18,472,655) (5,218,306)
1,250,148 13,444,139 450,400
1,735
169,740
(1,644,532)
60,778
(1,414,014)
7,719
3,336,439
152,800
(4,057,064)
(11,388,096)
1,735 (11,948,202)
(4,044,741)
234 116,167
(5,526,183)
234 (9,454,757)
1,252,117 (9,372,834)
645,181 36,836,942
$ 25,566,810 $
$ 3,674,202
21,892,608
$ 25,566,810
28
57,640
57,640
482
482
508,522
95,141
1,897,298 $ 27,464,108 $ 603,663
$ 1,897,298 $ 5,571,500 $ 603,663
21,892,608
$ 1,897,298 $ 27,464,108 $ 603,663
CITY OF PEARLAND, TEXAS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended September 30, 2011
Business -type Activities - Enterprise Funds
Water and Sewer Solid Waste
Fund Fund
Total
Page 2 of 2
Governmental
Activities -
Internal
Service Funds
Reconciliation of operating income to net cash
provided by operating activities
Operating income (loss) $ 4,996,163 $ (28,013) $ 4,968,150 $ 221,087
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation 8,138,881 8,138,881
(Increase) decrease in accounts receivable 232,315 145,428 377,743 (3,707)
(Increase) decrease in prepaid expenses (65,591) (65,591) 3,455
Increase (decrease) in accounts payable (1,326,860) 1,132,733 (194,127) 229,565
Increase (decrease) in salaries payable 2,771 2,771
Increase (decrease) in customer deposits 227,914 227,914
Increase (decrease) in uneamed revenue (11,602) (11,602)
Net Cash Provided by Operating Activities $ 12,193,991 $ 1,250,148 $ 13,444,139 $ 450,400
Summary of non -cash transactions
Contributed capital assets
See Notes to Financial Statements.
$ 878,785 $ $ 878,785 $
29
CITY OF PEARLAND, TEXAS
COMBINING STATEMENT OF NET ASSETS
DISCRETELY PRESENTED COMPONENT UNITS - GOVERNMENTAL ACTIVITIES
September 30, 2011
Assets
Cash and cash equivalents
Investments
Receivables - less allowance
for uncollectibles
Due from primary government
Prepaid items
Restricted cash
Deferred charges
Capital assets not subject
to depreciation
Capital assets net of
accumulated depreciation
Total Assets
Pearland
Economic Tax Increment Development Total
Development Reinvestment Authority of Component
Corporation Zone #2 Pearland Units
$ 3,869,964 $ 4,169,845 $ 2,678,435 $ 10,718,244
3,611,882 3,611,882
1,155,488 105,449 1,260,937
12,691 12,691
11,355 11,355
665,254 2,712,587 3,377,841
375,711 2,816,056 3,191,767
3,220,907 3,220,907
6,658,827 6,658,827
19,569,388 4,287,985 8,207,078 32,064,451
Liabilities
Accounts payable and accrued
expenses 35,452
Accrued interest 95,612
Customer deposits 38,333
Non -current liabilities:
Due within one year 840,000
Due in more than one year 24,624,774
Total Liabilities 25,634,171
14,403
1,400 51,255
184,283 279,895
38,333
1,900,000 2,740,000
47,013,619 71,638,393
14,403 49,099,302 74,747,876
Net Assets
Invested in capital assets, net of related
debt' (15,585,040) (48,913,619) (64,498,659)
Restricted - debt service 569,642 2,528,304 3,097,946
Restricted - economic development 8,950,615 4,273,582 5,493,091 18,717,288
Total Net Assets
See Notes to Financial Statements.
$ (6,064,783) $ 4,273,582 $ (40,892,224) $ (42,683,425)
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CITY OF PEARLAND, TEXAS
COMBINING STATEMENT OF ACTIVITIES
DISCRETELY PRESENTED COMPONENT UNITS - GOVERNMENTAL ACTIVITIES
For the Year Ended September 30, 2011
Functions/Programs
Program
Revenues
Net (Expense) and Changes in Net Assets
Operating Economic Tax Increment Development
Grants and Development Reinvestment Authority of
Expenses Contributions Corporation Zone #2 Pearland
Component Units:
Totals
Pearland Economic
Development Corporation $ 3,912,444 $ $ (3,912,444) $ $ $ (3,912,444)
Tax Increment
Reinvestment Zone #2 5,527,689 (5,527,689) (5,527,689)
Development Authority of
Pearland 12,427,195 (12,427,195) (12,427,195)
$ 21,867,328 $
(3,912,444) (5,527,689) (12,427,195) (21,867,328)
General Revenues:
Taxes:
Property taxes $ $ 14,724,037 $ $ 14,724,037
Sales and use tax 6,593,971 6,593,971
Unrestricted investment earnings 10,641 11,891 3,006 25,538
Miscellaneous 657,523 657,523
Transfers between component units (11,819,230) 11,819,230
Total General Revenues and Transfers 7,262,135 2,916,698 11,822,236 22,001,069
Change in net assets 3,349,691 (2,610,991) (604,959) 133,741
Net assets, beginning (9,414,474) 6,884,573 (40,287,265) (42,817,166)
Net assets, ending $ (6,064,783) $ 4,273,582 $ (40,892,224) $ (42,683,425)
See Notes to Financial Statements.
31
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/volunteer part-
time/volunteer department. The City is govemed by an elected mayor and five -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. Discretely presented component units are reported in a separate column
in the government -wide statements to emphasize that they are legally separate from the primary government.
Based on these considerations, the City's financial statements include the following discretely presented
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. Additionally prescribed criteria under generally accepted accounting principles
include: considerations pertaining to organizations for which the primary government is financially
accountable; and considerations pertaining to other organizations for which the nature and significance of
their relationship with the primary government are such that exclusion would cause the reporting entity's
financial statements to be misleading or incomplete. The component units discussed below are included in
the City's reporting entity because of the significance of their operational or fmancial relationships with the
City. The component units do not issue separate financial statements.
32
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
A. Financial Reporting Entity (continued)
Discretely Presented 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 fiscally dependent upon the primary government because, besides
appointing the Board, the City Council also must approve the PEDC's budget and any debt issuances.
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. Besides appointing Board members, the
City Council must also approve any debt issuances done on behalf of the TIRZ. A major land owner within
the City of Pearland sits on the Board of Directors for the TIRZ #2.
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.
Besides appointing Board members, the City Council must also approve any debt issuances done on behalf
of the Development Authority.
B. Government -wide and Fund Financial Statements
The government -wide fmancial statements (i.e., the Statement of Net Assets and the Statement of Changes
in Net Assets) 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.
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.
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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
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 assets. 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,
administrative services, public works, parks and recreation, community development, and public safety.
34
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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 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.
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 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 fmanced 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 an Internal Service Fund 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 and employee health benefits. The Internal Service Fund is included in governmental
activities for government -wide reporting purposes.
Private -sector standards of accounting and fmancial reporting issued prior to December 1, 1989, generally are
followed to the extent that those standards do not conflict with or contradict guidance of the Governmental
Accounting Standards Board. Governments also have the option of following subsequent private -sector
guidance for their business -type activities and enterprise funds, subject to this same limitation. All assets,
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. Operating revenues include charges for services. Operating expenses
include costs of materials, contracts, personnel and depreciation. In accordance with GASB Statement No.
20, the City has elected to follow GASB statements issued after November 30, 1989, rather than the
Financial Accounting Standards Board, in accounting for enterprise funds.
As a general rule, the effect of interfund activity has been eliminated from the government -wide financial
statements. Exceptions to this general rule are charges between the City's water and sewer function and
various other functions of the government. Elimination of these charges would distort the direct costs and
program revenue reported for the various functions concerned.
35
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)
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
Fund 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 defmition are reported as nonoperating revenue and expense.
D. Fund Balance Working Capital Policies
As of these financial statements, the City has adopted GASB Statement No. 54, which redefined how
fund balances of the governmental funds are presented in the financial statements. Fund balances are
classified 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 purposes, 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 — All amounts not included in other spendable classifications.
The City Council has authorized the Director of Finance as the official authorized to assign fund balance
to a specific purpose. 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.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
D. Fund Balance Working Capital Policies (continued)
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.
Property Insurance Fund Unrestricted Net Assets
The Property 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.
Employee Benefits Fund Unrestricted Net Assets
The Employee Benefits Fund is 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.
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.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
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.
F. Investments
Investments consist of United States (U.S.) Government Agency securities. The City reports all
investments at fair value based on quoted market prices at year-end date.
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" (or "due from component unit/primary government" or "due to
component unit/primary government" if the transactions are between the primary govemment and its
component unit). Interfund receivables and payables which are not expected to be paid within 12 months are
classified as loans from/loans to other funds, component units, or primary government.
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.
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 and Development Authority Bonds and are reported as restricted assets.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
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 financial 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 estimated fair market value at the date of
donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially
extend assets' lives are not capitalized.
Property, plant, and equipment are depreciated using the straight-line method over the following useful lives:
Asset Years
L. Compensated Absences
Buildings and improvements 10-45
Machinery and equipment 3-15
Infrastructure 10-50
It is the City's policy to permit employees to accumulate eamed 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 not classified and are hired after October 1, 2005, earn vacation at a rate of 10
days per year from 1-6 years of service, 15 days per year for 7-15 years of service and 20 days for 16 and
over years of service. Effective October 1, 2005, employees are no longer able to carry over unused vacation
from one year to the next with the exception of police department personnel in classified positions.
Employees are required to use their vacation in the year it is earned. Employees who are unable to use their
vacation due to departmental scheduling or staffmg problems, may, with the City Manager's approval,
receive compensation for half of the remaining balance up to a maximum of forty (40) hours.
City employees receive 11 paid holidays per year. 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 overtime is 60 hours, except for employees involved in public
safety, who can accrue up to 120 hours.
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.
39
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1- Summary of Significant Accounting Policies (continued)
M. Estimates
The preparation of fmancial 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.
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
current year's presentation.
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.
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, fully collateralized certificates of deposit, bankers'
acceptances, mutual funds, repurchase agreements and local government investment pools. The
maximum maturity allowed is three years from date of purchase. The City's investment policy does not
allow investments in collateralized mortgage obligations.
40
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 2 - Deposits (Cash) and Investments (continued)
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 fmancial
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
Temporary Investments
FFCB discount note
FHLB discount note
FHLMC discount note
FNMA discount note
Primary
Government
Component
Units
$ 58,049,643 $ 14,096,085
1,604,648 599,539
10,168,324 1,013,073
4,028,606
12,022,736 1,999,270
$ 85,873,957 $ 17,707,967
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:
Interest income
Unrealized gain (loss) on
temporary investments
Investment earnings
Primary
Government
Component
Units
235,953 $ 29,024
36,772 (3,486)
$ 272,725 $ 25,538
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 2 - Deposits (Cash) and Investments (continued)
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:
Primary Government Component Units
Weighted
Weighted Average
Average Maturity
Total Fair Value Maturity (days) Total Fair Value (days)
Temporary Investments
FFCB discount note $ 1,604,648 633 $ 599,539
FHLB discount note 10,168,324 299 1,013,073
FHLMC discount note 4,028,606 315
FNMA discount note 12,022,736 372 1,999,270
Portfolio weighted average maturity
721
362
408
$ 27,824,314 $ 3,611,882
352 447
The City's investment policy specifies a maximum weighted average maturity of 547.5 days or 18 months
based on the stated maturity date for each investment in the portfolio.
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 three years or 1,095
days from date of purchase. The settlement date is considered the date of purchase.
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, 2011, the City had investments in U.S. Agency securities that
exceeded five percent of the total investment portfolio at year-end.
Primary Government Component Units
Percentage of Percentage of
Total Total
Investment Investment
Investment Type Total Fair Value Portfolio Total Fair Value Portfolio
FFCB discount note $ 1,604,648 6% $ 599,539 20%
FHLB discount note 10,168,324 37% 1,013,073 34%
FHLMC discount note 4,028,606 14%
FNMA discount note 12,022,736 43% 1,999,270 66%
Total $ 27,824,314 100% $ 3,012,343 100%
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 2 - Deposits (Cash) and Investments (continued)
Credit Risk
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.
Restricted Assets
The Enterprise Funds have restricted certain cash and investments for customer deposits, reserve and
emergency expenditures, capital improvements, cash restricted for others, and revenue bond debt service.
Because of certain bond covenants, the Enterprise Fund is 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
Primary Component
Government Units
Revenue bond debt service $ 1,426,160 $ 3,377,841
Customer deposits 2,525,754
Capital improvements 17,940,694
Total $ 21,892,608 $ 3,377,841
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 3 - Receivables
Receivables at September 30, 2011, consisted of the following:
Priniary Government:
Governmental Funds:
General Fund
Other
Debt Service Capital Non -Major
Fund Projects Fund Funds
Total
Receivables
Property taxes, including
penalties and interest $ 587,571 $ 868,182 $ $ $ 1,455,753
Lease receivable 10,246,277 10,246,277
Sales and other taxes 3,466,139 3,466,139
Fines and forfeitures 774,570 774,570
Interest 20,998 958 5,805 27,761
Due from other
governments 608,705 143,505 752,210
Other 499,023 3,012 552,579 1,054,614
Allowance for
uncollectibles (11,575) (17,184) (28,759)
Proprietary Funds:
$ 5,945,431 $ 11,098,233 $ 152,322 $ 552,579 $ 17,748,565
Water and Solid Waste
Sewer Fund Fund
Total
Receivables
Customer accounts $ 3,037,172 $ 749,188 $ 3,786,360
Interest 48,822 48,822
Other 102,695 102,695
Allowance for
uncollectibles (186,549) (64,519) (251,068)
Component Units:
$ 3,002,140 $ 684,669 $ 3,686,809
Pearland Tax Increment
Economic Reinvestment Development
Development Zone Authority of
Corporation Developments Pearland
Total
Receivables
Sales and other taxes $ 1,152,271 $ $ $ 1,152,271
Interest 3,217 3,217
Other 105,449 105,449
Total $ 1,155,488 $ 105,449 $ $ 1,260,937
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 3 - Receivables (continued)
Governmental funds report deferred revenue in connection with receivables for revenues that are not
considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year,
the various components of deferred revenue reported in the governmental funds were as follows:
Unavailable Unearned
Delinquent property taxes receivable - general fund $ 536,204 $
Delinquent property taxes receivable - debt service fund 778,876
Lease revenues -principal 7,662,416
Municipal fines and forfeitures 774,570
Lease interest revenues 2,527,030
Grants and revenues prior to meeting all eligibility requirements 1,411,201
Total Deferred Revenue for Governmental Funds $ 9,752,066 $ 3,938,231
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.
45
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 4 - Capital Assets
A summary of changes in the primary government's capital assets for the year ended September 30, 2011,
follows:
Governmental Activities
Capital assets not being depreciated:
Land
Construction in progress
Total capital assets not being depreciated
Other capital assets:
Infrastructure
Buildings and improvements
Machinery and equipment
Total other capital assets
Less accumulated depreciation for:
Infrastructure
Buildings and improvements
Machinery and equipment
Total accumulated depreciation
Other capital assets, net
Totals
Business -type Activities
Capital assets not being depreciated:
Land and intangibles
Construction in progress
Total capital assets not being depreciated
Other capital assets:
Water and sewer system
Buildings and improvements
Machinery and equipment
Contractual water rights
Total other capital assets
Less accumulated depreciation for:
Water and sewer system
Buildings and improvements
Machinery and equipment
Contractual water rights
Total accumulated depreciation
Other capital assets, net
Totals
Primary Government
Balance
September 30,
2010
Increases
$ 28,456,629 $
119,832,206
148,288,835
695,044,965
32,027,582
14,058,598
741,131,145
(185,387,721)
(11,441,810)
(7,816,409)
(204,645,940)
536,485,205
25,429,635
25,429,635
76,843,651
44,643,524
1,516,124
123,003,299
(21,598,317)
(1,877,858)
(1,534,094)
(25,010,269)
97,993,030
$ 684,774,040 $
Balance
September 30,
2010
(Decreases)
Balance
September 30,
2011
$ (48,001) $ 28,408,628
(112,394,232) 32,867,609
(112,442,233) 61,276,237
771,888,616
76,671,106
(178,509) 15,396,213
(178,509) 863,955,935
(206,986,038)
(13,319,668)
178,509 (9,171,994)
178,509 (229,477,700)
123,422,665 $
Increases
$ 3,609,542 $
27,808,212
31,417,754
241,377,160
29,101,323
2,985,148
34,511,428
307,975,059
(69,295,554)
(1,949,479)
(1,837,578)
(3,143,046)
(76,225,657)
231,749,402
$ 263,167,156
13,324,461
2,155,150
459,518
15,939,129
(5,757,621)
(692,329)
(308,474)
(1,380,457)
(8,138,881)
7,800,248
634,478,235
(112,442,233) $ 695,754,472
(Decreases)
Balance
September 30,
2011
$ $ 3,609,542
(2,916,819) 24,891,393
(2,916,819) 28,500,935
254,701,621
31,256,473
(110,666) 3,334,000
34,511,428
(110,666) 323,803,522
110,666
(75,053,175)
(2,641,808)
(2,035,386)
(4,523,503)
110,666 (84,253,872)
$ 7,800,248 $ (2,916,819)
239,549,650
$ 268,050,585
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 4 - Capital Assets (continued)
Depreciation was charged to programs as follows:
General government
Public safety
Public works
Community services
Parks and recreation
Total Governmental Activity
Water and sewer
Total Business -Type Activity
$ 379,162
1,637,291
21,009,636
120,876
1,863,304
$ 25,010,269
$ 8,138,881
$ 8,138,881
The City had active construction projects as of September 30, 2011. 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:
Project Description
Drainage Improvement
Building Improvements
Street Improvement
Park Improvements
Water and Sewer Improvements
Totals
Total In Progress
$ 13,642,136
316,742
18,443,782
464,948
24,891,394
$ 57,759,002
Commitment
$ 6,173,687
2,437,341
18,561,050
862,417
16,388,105
$ 44,422,600
47
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 5 - Long -Term Debt
A. General Obligation Bonds and Certificates of Obligation
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 following is a summary of changes in the City's total governmental long-term liabilities for the year
ended September 30, 2011. In general, the City uses the General and Debt Service funds to liquidate
governmental long-term liabilities.
Balance Balance
September 30, September 30, Amounts Due
2010 Additions (Reductions) 2011 Within One Year
Governmental Activities
Bonds payable:
General obligation bonds $ 193,785,000 $ 19,445,000 $ (6,125,000) $ 207,105,000 $ 5,495,000
Certificates of obligation 92,380,000 2,095,000 (3,325,000) 91,150,000 3,335,000
Deferred amount for issuance
premium/(discount) 3,622,805 167,668 (301,105) 3,489,368
Total bonds payable 289,787,805 21,707,668 (9,751,105) 301,744,368 8,830,000
Other liabilities:
Obligations under capital leases 3,237,387 1,288,909 (494,241) 4,032,055 625,296
Compensated absences 4,654,191 2,588,746 (2,574,084) 4,668,853 617,422
Other post -employment benefits 872,946 331,220 1,204,166
Total Governmental Activities $ 298,552,329 $ 25,916,543 $ (12,819,430) $ 311,649,442 $ 10,072,718
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.
48
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 5 - Long -Term Debt (continued)
A. General Obligation Bonds and Certificates of Obligation (continued)
A summary of the terms of general obligation bonds and certificates of obligation, as of September 30, 2011,
follows:
Series Original Issue Matures Interest Rate (%) Debt Outstanding
General Obligation Bonds
Permanent Improvement, Series 2002
Permanent Improvement, Series 2003
Permanent Improvement and Refunding Bonds, Series 2005
Permanent Improvement and Refunding Bonds, Series 2006
Permanent Improvement and Refunding Bonds, Series 2007
Permanent Improvement, Series 2008
Permanent Improvement and Refunding Bonds, Series 2009
Permanent Improvement, Series 2010A
Permanent Improvement Refunding, Series 2010B
Permanent Improvement, Series 2011
Annexed Municipal Utility District Bonds
BC MUD 1 Series 2007
Total General Obligation Bonds
Certificates of Obligation
Certificates of Obligation, Series 2003
Certificates of Obligation, Series 2004
Certificates of Obligation, Series 2006
Certificates of Obligation, Series 2007
Certificates of Obligation, Series 2008
Certificates of Obligation, Series 2009
Certificates of Obligation, Series 2009A
Certificates of Obligation, Series 2011
Total Certificates of Obligation
Prior Year Refunding
$ 25,000,000 2027 5.10-5.08 $ 810,000
15,000,000 2028 4.00-6.00 12,870,000
37,015,000 2029 3.25-5.00 33,250,000
32,165,000 2029 4.00-5.00 31,645,000
69,640,000 2032 4.00-5.00 69,450,000
22,835,000 2032 4.50-5.50 22,220,000
16,735,000 2034 2.00-5.00 16,065,000
12,415,000 2035 3.004.00 12,045,000
1,630,000 2018 2.004.00 1,425,000
5,400,000 2036 2.125-4.125 5,400,000
1,940,000 2030 3.75-4.35
1,925,000
$ 207,105,000
25,000,000 2023 3.004.50 $ 15,105,000
21,000,000 2028 4.00-5.25 13,035,000
9,700,000 2029 3.65-4.68 9,475,000
23,250,000 2032 3.25-5.25 22,900,000
9,000,000 2032 3.75-5.00 8,715,000
8,520,000 2034 2.25-5.00 8,320,000
12,145,000 2029 2.00-4.50 11,505,000
2,095,000 2021 2.09 2,095,000
$ 91,150,000
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, 2011, approximately $26.5 million of previously refunded bonds
outstanding were considered defeased.
Current Year Refunding
On October 13, 2010, the City issued $1,630,000 in Permanent Improvement Refunding Bonds. The refunding
bonds have interest rates from 2.00% to 4.00%, with an average rate of 2.76%. The proceeds were deposited
into an escrow fund and were used to lower the City's overall debt service and to pay costs of issuing the
bonds. This refunding decreased the City's total debt service payment by $179,939 for an economic gain
(difference between the present values of the debt service payments on the old and new debt) of $125,363.
49
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 5 - Long -Term Debt (continued)
A. General Obligation Bonds and Certificates of Obligation (continued)
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 $5.1 million.
Following is a summary of future lease payments due on this equipment:
Fiscal Year Obligations
2012 $ 843,723
2013 843,723
2014 843,723
2015 843,723
2016 696,006
2017-2019 879,972
Total 4,950,869
Less: Interest (498,507)
Obligations under capital leases $ 4,452,362
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NOTES TO FINANCIAL STATEMENTS (continued)
Note 5 - Long -Term Debt (continued)
A. General Obligation Bonds and Certificates of Obligation (continued)
The annual requirements to amortize governmental activity general obligation bonds and certificates of
obligation outstanding at September 30, 2011, were as follows:
Governmental Activities
General Obligation
Fiscal Year Principal
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
$ 5,495,000
5,955,000
6,360,000
6,655,000
6,940,000
6,155,000
6,015,000
8,020,000
9,645,000
10,060,000
10,505,000
10,960,000
13,065,000
12,070,000
12,545,000
13,145,000
13,720,000
16,270,000
8,990,000
9,180,000
9,405,000
2,220,000
2,325,000
1,070,000
335,000
$ 207,105,000
Interest
$ 9,274,088
9,046,301
8,809,185
8,524,755
8,208,800
7,915,597
7,646,508
7,332,362
6,937,876
6,502,171
6,044,859
5,565,130
5,017,967
4,437,128
3,867,502
3,275,203
2,648,533
1,939,141
1,346,628
921,259
488,591
218,131
112,794
36,356
6,909
$ 116,123,775
Certificates of Obligation
Principal
$ 3,335,000
3,480,000
3,635,000
3,750,000
3,910,000
4,345,000
4,930,000
5,320,000
4,260,000
4,445,000
4,415,000
4,610,000
3,210,000
4,945,000
5,255,000
5,460,000
5,715,000
4,055,000
3,290,000
3,685,000
4,065,000
505,000
530,000
$ 91,150,000
Interest
$ 3,797,078
3,676,909
3,547,652
3,410,040
3,263,885
3,100,757
2,909,597
2,697,664
2,497,078
2,312,690
2,120,221
1,919,698
1,742,825
1,554,482
1,317,188
1,080,583
846,799
644,684
493,950
338,925
159,025
51,750
26,500
$ 43,509,981
51
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 5 - Long -Term Debt (continued)
B. Enterprise Fund Debt
The following is a summary of changes in the City's total business -type long-term liabilities for the year
ended September 30, 2011.
Balance Balance
September 30, September 30, Amounts Due
2010 Additions (Reductions) 2011 Within One Year
Business -type Activities
Bonds payable:
Certificates of obligation $ 10,540,000 $ $ (810,000) $ 9,730,000 $ 830,000
Water and sewer revenue bonds 116,440,000 (3,170,000) 113,270,000 3,305,000
Deferred amount for issuance
premium/(discount) 783,149 (127,516) 655,633
Total bonds payable 127,763,149 (4,107,516) 123,655,633 4,135,000
Other liabilities:
Obligations under capital leases 345,357 152,800 (77,064) 421,093 78,729
Compensated absences 545,600 313,474 (300,858) 558,216 81,417
Other post -employment benefits 165,567 58,450 224,017
Total Business -type Activities $ 128,819,673 $ 524,724 $ (4,485,438) $ 124,858,959 $ 4,295,146
A summary of the terms of certificates of obligation and revenue bonds recorded in the Enterprise Funds as
of September 30, 2011, is as follows:
Series
Water and Wastewater Fund
Original Issue Matures Interest Rate (%) Debt Outstanding
Water and Sewer System Adjustable Rate Revenue Bonds,
Series 1999 $ 8,000,000 2020 4.41-4.60 $ 5,915,000
Water and Sewer System Revenue Bonds, Series 2003 9,500,000 2025 4.00-6.00 7,475,000
Water and Sewer System Revenue and Refunding Bonds,
Series 2006 13,845,000 2031 3.74-4.82 12,125,000
Water and Sewer System Revenue and Refunding Bonds,
Series 2007 40,135,000 2031 3.50-5.50 38,335,000
Water and Sewer System Revenue Bonds, Series 2008 14,950,000 2034 4.125-5.00 14,405,000
Water and Sewer System Revenue Bonds, Series 2009 13,130,000 2034 3.00-5.50 12,450,000
Permanent Improvement and Refunding Bonds, Series 2009 11,660,000 2018 2.00-5.00 9,730,000
Water and Sewer System Revenue Bonds, Series 2010A 14,040,000 2035 1.75-4.50 13,670,000
Water and Sewer System Refunding Bonds, Series 2010B 8,970,000 2023 1.754.00 8,895,000
Total Utility System Fund $ 123,000,000
52
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 5 - Long -Term Debt (continued)
B. Enterprise Fund Debt (continued)
The annual requirements to amortize governmental activity revenue bonds and certificates of obligation
outstanding at September 30, 2011, were as follows:
Fiscal Year
Business -Type Activities
Revenue Bonds Certificates of Obligation
Principal Interest
2012 $ 3,305,000
2013 3,445,000
2014 3,580,000
2015 3,720,000
2016 3,880,000
2017 4,040,000
2018 4,210,000
2019 4,395,000
2020 4,580,000
2021 4,780,000
2022 4,990,000
2023 5,205,000
2024 5,460,000
2025 5,715,000
2026 5,980,000
2027 6,270,000
2028 6,580,000
2029 6,890,000
2030 7,180,000
2031 6,740,000
2032 2,655,000
2033 2,795,000
2034 2,925,000
2035 3,950,000
$ 5,016,099
4,883,637
4,744,239
4,599,949
4,449,216
4,287,148
4,114,630
3,932,513
3,741,485
3,542,164
3,334,541
3,118,216
2,891,514
2,639,768
2,371,443
2,080,606
1,771,825
1,463,326
1,173,994
871,113
555,025
384,475
215,225
38,025
Principal
$ 830,000
1,110,000
1,155,000
1,195,000
1,220,000
2,065,000
2,155,000
Interest
$ 346,900
327,500
287,525
243,712
212,000
143,601
45,988
113,270,000 $ 66,220,173 $ 9,730,000 $ 1,607,226
53
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 5 - Long -Term Debt (continued)
C. Component Unit Long -Term Debt
The following is a summary of the long-term debt transactions of the Pearland Economic Development
Corporation and the Development Authority of Pearland for the year ended September 30, 2011:
Pearland Economic
Development Corporation
Sales tax revenue bonds
Deferred amount for issuance
premium/(discount)
Compensated absences
Development Authority of
Pearland
Tax Increment Revenue Bonds
Deferred amount for issuance
premium/(discount)
Balance Balance
September 30, September 30, Amounts Due
2010 Additions (Reductions) 2011 Within One Year
$ 26,130,000 $ $ (800,000) $ 25,330,000 $ 840,000
101,905 (10,744) 91,161
51,835 25,206 (33,428) 43,613 5,170
51,060,000 (1,830,000) 49,230,000 1,900,000
(345,628) 29,247 (316,381)
$ 76,998,112 $ 25,206 $ (2,644,925) $ 74,378,393 $ 2,745,170
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, 2011, is as follows:
Series Original Issue Matures Interest Rate (%) Debt Outstanding
Pearland Economic Development Corporation
Sales Tax Revenue Bonds, Series 2005
Sales Tax Revenue Bonds, Series 2006
Sales Tax Revenue Bonds, Series 2010
Development Authority of Pearland
Tax Increment Revenue Bonds, Series 2004
Tax Increment Revenue Bonds, Series 2005
Tax Increment Revenue Bonds, Series 2006
Tax Increment Revenue Bonds, Series 2007
Tax Increment Revenue Bonds, Series 2009
Total Component Unit Long -Term Debt
$ 10,590,000 2026 2.30-4.42 $ 8,375,000
10,235,000 2030 3.66-4.75 9,485,000
7,685,000 2030 variable -resets every 6 7,470,000
months
13,995,000 2028 2.50-5.50
9,775,000 2028 3.50-4.75
9,970,000 2028 4.00-4.40
15,950,000 2029 3.70-4.75
8,815,000 2029 3.00-5.875
10,810,000
7,225,000
8,570,000
14,415,000
8,210,000
$ 74,560,000
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NOTES TO FINANCIAL STATEMENTS (continued)
Note 5 - Long -Term Debt (continued)
C. Component Unit Long -Term Debt (continued)
The annual requirements to amortize component unit revenue bonds outstanding at September 30, 2011, were
as follows:
Revenue Bonds
Pearland Development
Fiscal Year Principal
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
$ 840,000
880,000
920,000
965,000
1,010,000
1,060,000
1,115,000
1,175,000
1,230,000
1,285,000
1,350,000
1,415,000
1,480,000
1,555,000
1,635,000
1,715,000
1,805,000
1,895,000
2,000,000
$ 25,330,000
D. Legal Compliance
Corporation
Interest
$ 1,193,497
1,157,316
1,117,214
1,075,290
1,031,244
982,127
930,609
876,055
824,116
769,356
711,516
649,066
583,400
514,167
441,036
364,087
277,582
189,679
97,402
$ 13,784,759
Development Authority
Principal
$ 1,900,000
1,975,000
2,055,000
2,140,000
2,230,000
2,330,000
2,430,000
2,540,000
2,540,000
2,655,000
2,780,000
2,915,000
3,055,000
3,200,000
3,360,000
3,530,000
3,705,000
3,890,000
of Pearland
Interest
$ 2,300,358
2,224,827
2,144,711
2,059,779
1,968,415
1,871,539
1,769,317
1,659,862
1,544,511
1,427,346
1,303,429
1,171,434
1,032,070
882,421
724,969
556,764
379,364
192,313
49,230,000 $ 25,213,422
Long-term debt assumed by the City upon dissolution of annexed municipal utility district in fiscal years
2006 and 2007 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.
55
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, 2011, is as follows:
Transfers In
Transfers Out Amounts
Purpose
General Fund Capital Projects Fund $ 1,362,617 Transfer of funds for capital projects costs
Non -Major
General Fund Governmental Fund 203,843 Transfer of funds for operating costs
General Fund Water and Sewer Fund 1,367,405 Transfer of funds for administrative costs
Debt Service Fund Water and Sewer Fund 277,127 Transfer of funds for debt service payments
Non -Major
Debt Service Fund Governmental Fund 174,577 Transfer of funds for debt service payments
Water and Sewer Fund General Fund 169,741 Transfer of funds for operating costs
Non -Major
Capital Projects Fund Govemmental Fund 139,574 Transfer of funds for operating costs
$ 3,694,884
A summary of interfund receivables and payables at September 30, 2011, follows:
Receivable Fund
General Fund
Payable Fund Amount
Purpose
Non -Major
Governmental Fund $ 165,352 Short-term loan to fund operations
$ 165,352
Note 7 - Fund Balance / Net Assets
The Pearland Economic Development Corporation and the Development Authority of Pearland, discretely
presented component units of the City, had negative net asset balances at year-end of approximately $6.1
and $40.9 million respectively. These deficit balances are caused by these entities issuing bonds for
economic development related construction projects and, in accordance with state law, transferring the
capital assets to the primary government while retaining the related debt. As noted in Note 5, the debt is
expected to be retired with future dedicated sales and property tax revenues.
56
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NOTES TO FINANCIAL STATEMENTS (continued)
Note 7 - Fund Balance / Net Assets (continued)
Encumbrances
Encumbrance accounting is employed as an extension
Fund, special revenue funds, and capital projects funds.
are classified as restricted, committed, or assigned for
governmental funds. Significant encumbrances included
General Fund
Assigned
Capital Projects
Restricted
Aggregate non -major funds
Restricted
Aggregate component units
Restricted
Prior Period Adjustment
of formal budgetary integration for the General
September 30, 2011, certain amounts which were
specific purposes have been encumbered in the
in governmental fund balances are as follows:
Encumbrances
$ 160,444
9,466,924
7,310
81,161
$ 9,715,839
Subsequent analysis of prior period construction costs and agreements associated with the Cullen Road
project indicated that the road under construction would not revert to the City of Pearland for future
maintenance and therefore management has determined the road should not have been capitalized as part
of City infrastructure. The City's previous contribution to the project of $11.7 million has been removed
from the beginning net asset balance in the City's Statement of Activities and has been recast as an
expense in the comparative condensed financial presentations in the Management's Discussion and
Analysis in this report.
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.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 9 - Employee Retirement System
Plan Description and Provisions
The City provides pension benefits for all of its full-time employees through a non-traditional, joint
contributory, defined benefit plan in the state-wide Texas Municipal Retirement System ("TMRS"), one of
842 currently administered by TMRS, an agent multiple -employer public employee retirement system.
Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the City -financed
monetary credits, with interest. At the date the plan began, the City granted monetary credits for service
rendered before the plan began of a theoretical amount equal to two times what would have been
contributed by the employee, with interest, prior to establishment of the plan. Monetary credits for service
since the plan began are a percent (100%, 150%, or 200%) of the employee's accumulated contributions.
In addition, the City can grant, as often as annually, another type of monetary credit referred to as an
updated service credit which is a theoretical amount which, when added to the employee's accumulated
contributions and the monetary credits for service since the plan began, would be the total monetary credits
and employee contributions accumulated, with interest, if the current employee contribution rate and City
matching percent had always been in existence and if the employee's salary had always been the average of
his salary in the last three years that are one year before the effective date. At retirement, the benefit is
calculated as if the sum of the employee's accumulated contributions, with interest, and the employer -
financed monetary credits, with interest, were used to purchase an annuity.
The plan provisions are adopted by the City Council of the City, within the options available in the state
statutes governing TMRS and within the actuarial constraints also in the statutes. Plan provisions for the City
were as follows:
Employee deposit rate
Matching ratio (City to employee)
Years required for vesting
Service retirement eligibility
(expressed as age/years of service)
Updated Service Credit
Annuity Increase (to retirees)
Plan Year 2010
7.0%
2 to 1
5
60/5, 0/20
100% Repeating, Transfers
70% of CPI Repeating
Plan Year 2011
7.0%
2 to 1
5
60/5, 0/20
100% Repeating, Transfers
70% of CPI Repeating
Members can retire at ages 60 and above with 5 or more years of service or with 20 years of service
regardless of age.
58
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 9 - Employee Retirement System (continued)
Contributions
Under the state law governing TMRS, the Actuary annually determines the City's contribution rate. This rate
consists of the normal cost contribution rate and the prior service contribution rate, both of which are
calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the
currently accruing monetary credits due to City matching percent, which are the obligation of the City as of
an employee's retirement date, not at the time the employee's contributions are made. The normal cost
contribution rate is the actuarially determined percent of payroll necessary to satisfy the obligation of the
City to each employee at the time his retirement becomes effective. The prior service contribution rate
amortizes the unfunded (over funded) actuarial liability (asset) over the remainder of the plan's 30-year
amortization period. The projected unit credit actuarial cost method is used for determining the City
contribution rate using a 28-year closed period. Both the employees and the City make contributions
monthly. Since the City needs to know its contribution rate in advance to budget for it, there is a one-year
delay between the actuarial valuation that is the basis for the rate and the calendar year when the rate goes
into effect.
The City's total payroll in fiscal year 2010 was $27.5 million and the City's contributions were based on
a payroll of $26.7 million. Contributions made by employees totaled $1.9 million, and the City made
contributions of $3.0 million during the fiscal year ended September 30, 2010.
Three-year trend information is presented below:
Annual Pension Cost (APC)
Percentage of APC Contributed
NPO at the End of Period
2011 2010 2009
$ 3,302,952
100%
$ 2,995,119
100%
$ -
$ 2,331,353
100%
Because the actuary determines contribution rates on an annual basis and the City pays the calculated rate
each month, the City will always have a net pension obligation (NPO) of zero at the beginning and end of the
period, and the annually required contributions (ARC) will always equal contributions made.
All assumptions for the December 31, 2010, valuations are contained in the 2010 TMRS Comprehensive
Annual Financial Report, a copy of which may be obtained by writing to P.O. Box 149153, Austin, Texas
78714-9153. The following is a summary of the actuarial assumptions:
Actuarial Cost Method
Amortization Method
Remaining Amortization Period
Asset Valuation Method
Actuarial Assumptions:
Investment Rate of Return
Projected Salary Increases
Includes Inflation At
Cost -of -Living Adjustments
Projected Unit Credit
Level Percent of Payroll
27.2 Years - Closed Period
Amortized cost
7.00%
Varies by age and service
3.00%
2.1%
59
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 9 - Employee Retirement System (continued)
In order to provide a reasonable retirement benefit at a reasonable cost to employers and to provide better
long-range rate forecasts, TMRS' actual funding method is the Projected Unit Credit method using a 25-
30 year "closed" period.
For cities that have adopted annually repeating annuity increases (COLA's) this change in method results
in increased contribution rates, which will provide advanced funding and positive improvement in the
pension funding rates. The TMRS Board adopted an eight -year phase -in period for new rates to enable
cities to slowly increase contributions. These were reflected in 2009.
A schedule of funding status and progress for TMRS for the most recent valuation date follows:
Unfunded
Actuarial (UAAL) as a
Actuarial Actuarial Accrued Annual Percentage of
Valuation Date Actuarial Accrued Percentage Liability Covered Covered
December 31, Value of Assets Liabilities Funded (UAAL) Payroll Payroll
2010 $ 54,358,041 $ 72,195,923 75% 17,837,882 $ 26,871,670 66%
A schedule of funding progress for TMRS for the three most recent actuarial valuations may be found in
the required supplementary information section of the City's Annual Financial Report.
Note 10 - Other Post -Employment Benefits
In addition to pension benefits, the City provides access to medical and dental 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
$ 82,937 $ $ 82,937 10
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.
60
CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 10 - Other Post -Employment Benefits (continued)
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:
Actuarial
Valuation Date
October 1,
2010
Actuarial
Accrued
Liabilities
$ 6,994,465
Unfunded
Actuarial
Accrued
Liability
(UAAL)
$ 6,994,465
Annual
Covered
Payroll
$ 26,871,670
Net OPEB obligations at year-end for the last two fiscal years are as follows:
Normal cost
Amortization of UAAL
Annual required contribution (ARC)
Interest on prior -year net OPEB obligation
Estimated increase in Net OPEB obligation
Net OPEB Obligation - beginning of year
Net OPEB obligation - end of year
2010
(UAAL) as a
Percentage of
Covered
Payroll
26%
2011
$ 323,138
116,541
$ 206,293
141,837
439,679 348,130
23,032 41,540
462,711 389,670
575,801 1,038,512
$ 1,038,512 $ 1,428,182
The annual cost recorded to the general ledger for fiscal year 2011 is $389,670, which includes the estimated
normal cost of $206,293 to provide for the benefits earned by active employees. The total liability, which is
not recorded to the general ledger, is $6,994,465, and represents the actuarial present value of benefits.
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, 2010 include using the Projected
Unit Credit actuarial costs method, a closed amortization period of 28 years, a discount rate of 4%,
medical inflation and ultimate pre -Medicare rate of 10% and 5% respectively, with a straight years of
service amortization method.
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.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 11 - Commitments and Contingencies
Litigation and Other Contingencies
The City was involved in various lawsuits and arbitration proceedings at September 30, 2011. 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
Shadow Creek Town Center
In 2004, the City, along with the Reinvestment Zone Number Two (the Zone) and the Development
Authority of Pearland (the Authority), component units of the City, entered into an agreement with a
developer to reimburse the developer all or a portion of the project costs to implement the Shadow Creek
Ranch Development TIRZ (TIRZ Plan). As projects implementing the TIRZ Plan are completed, the Zone
Board may recommend to the City that the Authority reimburse developers on behalf of the Zone and the
City. The Zone Board will forward to the City and the Authority all of the necessary and required
documentation supporting the requested reimbursement and a determination of the exact amount
requested for reimbursement, including a calculation of the amount of interest to be reimbursed on funds
advanced for the projects. In addition all monies available in the Tax Increment Fund shall be transferred
to the escrow agent no less than once per year and no later than the fifteenth day of each August, subject
to the retention by the City of: (1) an amount equal to the City's administrative costs connected with the
Zone and the TIRZ Plan, as provided in the TIRZ plan (36% of the City's Tax Increment, but not more
than $0.255, in years four through eight, and 64% of the City's Tax Increment, but not more than $0.44,
in years nine through 30) shall be retained by the City; (2) amounts required to be maintained in the Alvin
ISD Suspense Account; (3) an amount sufficient to pay reasonable current and anticipated administrative
and operating costs of the Zone, as determined by the Zone Board.
On November 13, 2006, the City of Pearland, Pearland Economic Development Corporation (PEDC) and
Shadow Creek Retail, LP entered into an agreement whereby the developer would build and construct a
mixed use commercial development located at the northwest corner of State Highway 288 and Broadway,
also known as FM 518.
The Developer provided for the construction of segments of Broadway Street, Business Center Drive,
Memorial Hermann Drive, as well as landscaping, underground utilities, pipeline relocation and other
associated costs. The source of funds for reimbursement of the public infrastructure is both the TIRZ #2
and City and PEDC sales tax revenue generated from the project. The total funded from TIRZ #2 is
$11,749,618 and the amount of TIRZ improvements to be funded from sales tax is $2,001,931. Once
completion and tenant occupancy of at least 318,000 square feet is achieved for a period of three
consecutive months, the City and PEDC, shall remit, monthly, thirty-three percent of sales tax received by
the City and PEDC to the Developer until paid in full plus interest at eight percent per annum for the first
two years following completion of the widening of Broadway and interest at five percent per annum for
the subsequent two years. The Developer met the targets set forth in the agreement in fiscal year 2008.
Through September 30, 2011, the City remitted sales tax to the developer pursuant to the agreement in the
amount of $919,367, of which $281,308 was remitted in fiscal year 2011.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 11 - Commitments and Contingencies (continued)
Reimbursements due to Developers (continued)
Pearland Town Center
On January 31, 2007, the City and the Pearland Town Center Limited Partnership and CBL & Associates
Management, Inc. entered into an agreement whereby the developer would build and construct a 700,000-
square-foot retail and commercial development, including public infrastructure to serve the project and
then convey the public infrastructure to the City. In consideration of the development which will bring
additional sales tax revenue to the City and additional jobs, the City will reimburse the Developer solely
for the costs associated with the public infrastructure from city sales tax revenues. The cost of the
infrastructure subject to reimbursement is $2,758,821. The City will make monthly reimbursement
payments to the Developer from 50% of the sales tax generated within the project. Reimbursement is to
begin one hundred days after the City receives notice from the Developer, and the City subsequently
verifies that 75% of the square footage or 525,000 square feet have been open for business for at least
thirty consecutive days. The City shall pay the Developer the entire Reimbursement Amount, including
interest within three years of the completion date. Construction of the project began in fiscal year 2007
and Pearland Town Center opened on July 31, 2008. The City received notice in November 2008 that at
least 525,000 square feet had been open for thirty days as of September 30, 2011.
As of September 30, 2011 the developer has been fully reimbursed. Pursuant to the agreement, full
reimbursement was due in March 2012. The City chose to issue Certificates of Obligation in August 2011
and pay off the developer earlier, resulting in an approximate savings of $50,000 in accrued interest.
Cardiovascular Systems Inc. (CSI)
The Pearland Economic Development Corporation approved an incentive agreement with Cardiovascular
Systems Inc. for a potential total incentive of $13.85 million. CSI is a medical device company
developing and commercializing innovative interventional treatment systems for vascular disease. The
incentive includes a 10-year lease agreement for a new 46,000-square-foot manufacturing facility in
Pearland. The company received $3.5 million upon the signing of the lease and could receive up to an
additional $2.75 million over five years as milestones are met. CSI could hire approximately 250
employees over the course of five years to work at the Pearland facility, expanding the area's already
thriving medical technology sector. CSI began operations in fiscal year 2010 and received $300,000 upon
occupying the facility and received another $300,000 in fiscal year 2011.
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CITY OF PEARLAND, TEXAS
NOTES TO FINANCIAL STATEMENTS (continued)
Note 14 - Operating Lease (continued)
The debt service lease payments 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, 2011, the future minimum debt
service lease payments to be received under the lease are as follows:
Fiscal year ending September 30, Payment
2012 $ 114,820
2013 113,384
2014 111,858
2015 110,153
2016 108,268
2017-2029 1,166,383
Total $ 1,724,866
Note 15 - Subsequent Events
General Obligation Refunding, Series 2012
Due to favorable market conditions, the City refunded approximately $43.405 million in general
obligation bonds and $6.5 million in water and sewer revenue bonds on February 9, 2012 in order to take
advantage of lower interest rates which produced $5.3 million in savings over sixteen years. Net Present
Value of the refunding is 9.2%, which is well over the City's financial policy of a minimum of 3% for a
refunding. The water and sewer revenue bonds will be folded into general obligation bonds, however will
be paid from water and sewer revenues.
66
Required Supplementary Information
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CITY OF PEARLAND, TEXAS
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL
For the year ended September 30, 2011
Revenues
Property taxes
Sales and use taxes
Franchise fees
Licenses and permits
Fees and forfeitures
Charges for services
Investment earnings
Intergovernmental
Other
Total Revenues
Expenditures
Current:
General government
Public safety
Public works
Community services
Parks and recreation
Total Expenditures
Excess (deficiency) of revenues
over expenditures
Other Financing Sources (Uses)
Proceeds from capital leases
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net change in fund balances
Fund balances, beginning
Fund balances, ending
Budgeted Amounts
Original Final
Actual
$ 10,714,857 $ 10,793,354 $ 10,867,570
13,208,866 13,237,205 13,331,189
5,431,118 5,316,353 5,605,394
2,078,655 1,758,736 1,720,856
2,648,857 2,689,500 2,714,217
10,708,401 10,623,159 10,882,021
70,000 35,000 59,859
308,947 350,441
314,920 501,145 542,958
45,175,674 45,263,399 46,074,505
Variance with
Final Budget -
Positive
(Negative)
$ 74,216
93,984
289,041
(37,880)
24,717
258,862
24,859
41,494
41,813
811,106
7,971,302 8,490,393 8,045,261 445,132
23,992,965 24,457,029 23,716,470 740,559
6,237,695 6,889,642 6,505,139 384,503
3,194,975 3,144,828 3,027,088 117,740
7,418,540 7,470,711 7,171,812 298,899
48,815,477 50,452,603 48,465,770 1,986,833
(3,639,803) (5,189,204) (2,391,265) 2,797,939
769,850
3,030,877
(851,467)
2,949,260
(690,543)
12,861,796
$ 12,171,253
1,288,891
2,948,402
(215,511)
4,021,782
(1,167,422)
12,861,796
$ 11,694,374
1,288,891
2,933,865
(169,741)
4,053,015
(14,537)
45,770
31,233
1,661,750 2,829,172
12,861,796
$ 14,523,546 $ 2,829,172
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CITY OF PEARLAND, TEXAS
NOTES TO REQUIRED SUPPLEMENTARY BUDGET INFORMATION
Budgetary Compliance
The City of Pearland has complied with all material budget requirements for the year ended September
30, 2011.
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 fmancial 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 SUPPLEMENTARY INFORMATION
September 30, 2011
TEXAS MUNICIPAL RETIREMENT SYSTEM (UNAUDITED)
Schedule of Funding Progress
Actuarial
Valuation Date Actuarial
December 31, Value of Assets
Unfunded
Actuarial
Actuarial Accrued Annual
Accrued Percentage Liability Covered
Liabilities Funded (UAAL) Payroll
(UAAL) as a
Percentage of
Covered
Payroll
2010 $ 54,358,041 $ 72,195,923
2009 40,139,722 57,645,422
2008 35,087,719 52,248,976
75% 17,837,882 $ 26,871,670
70% 17,505,700 25,519,548
67% 17,161,257 25,135,418
CITY OF PEARLAND OTHER POST -EMPLOYMENT BENEFIT OBLIGATION
Schedule of Funding Progress
Actuarial
Valuation Date Actuarial
October 1, Value of Assets
2010 $
2009
Actuarial
Accrued
Liabilities
$ 6,994,465
6,063,524
Percentage
Funded
Unfunded
Actuarial
Accrued
Liability
(UAAL)
Annual
Covered
Payroll
0% $ 6,994,465 $ 26,871,670
0% 6,063,524 25,519,548
66%
69%
68%
(UAAL) as a
Percentage of
Covered
Payroll
26%
24%
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.
Trend information is designed to provide information about the progress made in accumulating sufficient
assets to pay benefits when due.
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Other Supplementary Information
71
Combining and Individual Fund
Statements and Schedules
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CITY OF PEARLAND, TEXAS
NON -MAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE 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
fines 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 fmes for court technology.
Regional Detention Fund - A fund created to account for regional detention development.
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 for street assessments.
Juvenile Management Fund - A fund created to account for receipt and expenditure of revenues from
court fmes for juvenile case manager.
Management District 1 Fund - A fund created to account for sales tax collections from the Poag &
McEwen Lifestyle Center development to finance and assist the development of public infrastructure.
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.
75
CITY OF PEARLAND, TEXAS
COMBINING BALANCE SHEET
NON -MAJOR GOVERNMENTAL FUNDS
September 30, 2011
Hotel/Motel Court City -Wide Court
Tax Security Donations Technology
Assets
Cash and cash equivalents $ 1,303,373 $ 140,040 $ 60,768 $ 210,571
Receivables (net of allowance
for uncollectibles) 178,906 2,726 2,551
Prepaid items 3,322 400
Total Assets $ 1,485,601 $ 143,166 $ 60,768 $ 213,122
Liabilities and Fund Balances
Liabilities:
Accounts payable $ 30,709 $ 400 $ $ 1,133
Due to other funds
Deferred revenue 2,726 2,551
Total Liabilities 30,709 3,126 3,684
Fund Balance:
Non -spendable 3,322 400
Restricted for:
Community development
programs 1,451,570
Public safety 139,640
Total Fund Balances 1,454,892 140,040
55,594
5,174 209,438
60,768 209,438
Total Liabilities and
Fund Balances $ 1,485,601 $ 143,166 $
60,768 $ 213,122
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Parks and
Regional Park Recreation
Detention Donations Police Seizure Development
$ $ 88,744 $ 169,989 $ 1,062,490
600
$ $ 89,344 $ 169,989 $ 1,062,490
$ 396 $ 2,639 $ 8,935
396 2,639 8,935
88,948 1,053,555
167,350
88,948 167,350 1,053,555
$ $ 89,344 $ 169,989 $ 1,062,490
77
CITY OF PEARLAND, TEXAS
COMBINING BALANCE SHEET
NON -MAJOR GOVERNMENTAL FUNDS
September 30, 2011
Juvenile
Traffic Impact Management
Sidewalk Grant Fund Improvements Fund
Assets
Cash and cash equivalents $ 219,248 $ (625) $ 591,404 $ 19,401
Receivables (net of allowance
for uncollectibles) 363,070 1,020
Prepaid items 50
Total Assets $ 219,248 $ 362,445 $ 591,404 $ 20,471
Liabilities and Fund Balances
Liabilities:
Accounts payable
Due to other funds
Deferred revenue
Total Liabilities
Fund Balance:
Non -spendable
Restricted for:
Community development
programs
Public safety
Total Fund Balances
Total Liabilities and
Fund Balances
$
219,248
$ 230,523 $ $ 50
104,257
1,020
334,780 1,070
27,665 591,404
50
19,351
219,248 27,665 591,404 19,401
$ 219,248 $ 362,445 $ 591,404 $ 20,471
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Management
District 1 U of H Fund Totals
$ $ 18,865 $ 3,884,268
548,873
3,772
$ $ 18,865 $ 4,436,913
$ 17,602 $ 292,387
104,257
6,297
17,602 402,941
3,772
1,263 3,489,247
540,953
1,263 4,033,972
$ $ 18,865 $ 4,436,913
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CITY OF PEARLAND, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
NON -MAJOR GOVERNMENTAL FUNDS
For the Year Ended September 30, 2011
Revenues
Sales and use taxes
Fines and forfeitures
Investment earnings
Intergovernmental
Other
Total Revenues
Expenditures
Current:
General government
Public safety
Community services
Parks and recreation
Capital outlay
Total Expenditures
Excess (deficiency) of
revenues over expenditures
Hotel/Motel Court City -Wide Court
Tax Security Donations Technology
$ 652,110 $
1,847
25
54,323
65,200
198 76 287
29,299
653,982 54,521 29,375 65,487
446,973
4,078
13,004
89 52,104
446,973 4,078 13,093 52,104
207,009 50,443 16,282 13,383
Other Financing
Sources (Uses)
Transfers out (170,537) (45,706)
Total Other Financing
Sources (Uses) (170,537) (45,706)
Net change in fund balances 36,472 4,737 16,282 13,383
Fund balances - beginning 1,418,420 135,303 44,486 196,055
Fund balances - ending
$ 1,454,892 $ 140,040 $ 60,768 $ 209,438
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Parks and
Regional Park Recreation
Detention Donations Police Seizure Development
$ $ $
5 89 299 1,605
79,861 31,941 54,040
5 79,950 32,240 55,645
111,153
41,396 26,742
41,396 111,153 26,742
5 38,554 (78,913) 28,903
(4,039) (139,574)
(4,039) (139,574)
(4,034) 38,554 (78,913) (110,671)
4,034 50,394 246,263 1,164,226
$ $ 88,948 $ 167,350 $ 1,053,555
CITY OF PEARLAND, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
NON -MAJOR GOVERNMENTAL FUNDS
For the Year Ended September 30, 2011
Revenues
Sales and use taxes
Fines and forfeitures
Investment earnings
Intergovernmental
Other
Total Revenues
Expenditures
Current:
General government
Public safety
Community services
Parks and recreation
Capital outlay
Total Expenditures
Excess (deficiency) of
revenues over expenditures
Juvenile
Traffic Impact Management
Sidewalk Grant Fund Improvements Fund
60,955
306 6 790 28
694,332
5,803
44,800
6,109 694,338 45,590 60,983
18,435
85,489
292,871
36,939
157,564
591,298
6,109 103,040
45,590 60,983
Other Financing
Sources (Uses)
Transfers out (105,786) (750) (50,653)
Total Other Financing
Sources (Uses) (105,786) (750) (50,653)
Net change in fund balances 6,109 (2,746) 44,840 10,330
Fund balances - beginning
Fund balances - ending
213,139 30,411 546,564 9,071
$ 219,248 $ 27,665 $ 591,404 $ 19,401
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Management
District 1 U of H Fund Totals
$ $ $ 652,110
180,478
138 34 5,708
66,702 761,034
192,336 438,105
138 259,072 2,037,435
197,330
662,738
209,646
349,142
261,858 366,935
157,564
197,330 261,858 1,746,025
(197,192) (2,786) 291,410
(948) (517,993)
(948) (517,993)
(198,140) (2,786) (226,583)
198,140 4,049 4,260,555
$ $ 1,263 $ 4,033,972
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CITY OF PEARLAND, TEXAS
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
with comparative actual totals for the year ended September 30, 2010
Revenues
Property taxes
Charges for services
Investment earnings
Total Revenues
Expenditures
Debt Service:
Principal
Interest
Intergovernmental
Total Expenditures
2011
Final Budget
$ 22,451,513
806,472
31,600
23,289,585
8,229,526
13,307,416
3,954,049
25,490,991
Revenues over (under) expenditures (2,201,406)
Other Financing Sources (Uses)
Proceeds from long-term debt
Premium on general obligation debt
Payments to refunding escrow agent
Transfers from other funds
Total Other Financing Sources (Uses)
Net change in fund balance
Fund Balances - Beginning
Fund Balances - Ending
1,630,000
55,521
(1,630,140)
451,704
507,085
(1,694,321)
6,705,688
Actual
$ 22,586,408
805,071
29,218
23,420,697
8,217,402
13,302,477
3,954,050
25,473,929
(2,053,232)
1,630,000
55,521
(1,630,140)
451,704
507,085
(1,546,147)
6,705,688
Variance
Positive /
(Negative)
$ 134,895
(1,401)
(2,382)
2010
$ 21,740,334
81,766
377,463
131,112 22,199,563
12,124 6,200,254
4,939 13,103,133
(1) 3,794,164
17,062 23,097,551
148,174
148,174
(897,988)
357,127
357,127
(540,861)
7,246,549
$ 5,011,367 $ 5,159,541 $ 148,174 $ 6,705,688
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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, 2011
with comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final Budget Actual (Negative) 2010
Revenues
Hotel occupancy tax $ 607,781 $ 652,110 $ 44,329 $ 496,278
Investment eamings 2,052 1,847 (205) 2,432
Other 25 25 139
Total Revenues 609,858 653,982 44,124 498,849
Expenditures
Current:
General government 443,403 446,973 (3,570) 441,253
Total Expenditures 443,403 446,973 (3,570) 441,253
Revenues over (under) expenditures
166,455 207,009 40,554 57,596
Other Financing Sources (Uses)
Transfers to other funds (170,537) (170,537)
Net change in fund balance (4,082) 36,472 40,554 57,596
Fund Balances - Beginning 1,418,420 1,418,420 1,360,824
Fund Balances - Ending $ 1,414,338 $ 1,454,892 $ 40,554 $ 1,418,420
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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, 2011
with comparative actual Totals for the year ended September 30, 2010
2011
Variance
Positive /
Final Budget Actual (Negative) 2010
Revenues
Fines and forfeitures $ 55,095 $ 54,323 $ (772) $ 50,888
Investment earnings 229 198 (31) 256
Total Revenues 55,324 54,521 (803) 51,144
Expenditures
Current:
Community services
Total Expenditures
Revenues over (under) expenditures
22,108
22,108
4,078 18,030 1,913
4,078 18,030 1,913
33,216 50,443 17,227 49,231
Other Financing Sources (Uses)
Transfers (out) (45,706) (45,706) (49,122)
Net change in fund balance (12,490) 4,737 17,227 109
Fund Balances - Beginning 135,303 135,303 135,194
Fund Balances - Ending $ 122,813 $ 140,040 $ 17,227 $ 135,303
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CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND - CITY-WIDE DONATIONS
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
with comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final Budget Actual (Negative) 2010
Revenues
Investment eamings $ 85 $ 76 $ (9) $ 94
Other income 27,405 29,299 1,894 25,716
Total Revenues 27,490 29,375 1,885 25,810
Expenditures
Current:
Public safety 15,382 13,004 2,378 26,229
Community services 15,335 89 15,246 10,351
Total Expenditures 30,717 13,093 17,624 36,580
Revenues over (under) expenditures (3,227) 16,282 19,509 (10,770)
Other Financing Sources (Uses)
Transfers in 3,000
Net change in fund balance (3,227) 16,282 19,509 (10,770)
Fund Balances - Beginning 44,486 44,486 52,256
Fund Balances - Ending
$ 41,259 $ 60,768 $ 19,509 $ 44,486
87
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, 2011
with comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final Budget Actual (Negative) 2010
Revenues
Fines and forfeitures $ 66,579 $ 65,200 $ (1,379) $ 62,452
Investment earnings 327 287 (40) 455
Total Revenues 66,906 65,487 (1,419) 62,907
Expenditures
Current:
Community services 70,913 52,104 18,809 146,815
Total Expenditures 70,913 52,104 18,809 146,815
Revenues over (under) expenditures (4,007) 13,383 17,390 (83,908)
Net change in fund balance (4,007) 13,383 17,390 (83,908)
Fund Balances - Beginning 196,055 196,055 279,963
Fund Balances - Ending $ 192,048 $ 209,438 $ 17,390 $ 196,055
88
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND - REGIONAL DETENTION
11117 SCHEDULE OF REVENUES, EXPENDITURES, AND
t 1 CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
with comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final Budget Actual (Negative) 2010
Revenues
Investment earnings $ 7 $ 5 $ (2) $ 7
Total Revenues 7 5 (2) 7
Other Financing Sources (Uses)
Operating Transfers (Out) (4,041) (4,039) 2
Net change in fund balance (4,034) (4,034) 7
Fund Balances - Beginning 4,034 4,034 4,027
Fund Balances - Ending $ $ $ $ 4,034
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CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND - PARK DONATIONS
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
with comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final Budget Actual (Negative) 2010
Revenues
Investment earnings $ 94 $ 89 $ (5) $ 99
Other 64,525 79,861 15,336 86,764
Total Revenues 64,619 79,950 15,331 86,863
Expenditures
Current:
Parks and recreation
Total Expenditures
Revenues over (under) expenditures
41,798 41,396 402 82,326
41,798 41,396 402 82,326
22,821 38,554 15,733 4,537
Other Financing Sources (Uses)
Transfers (to) other funds (3,000)
Net change in fund balance
Fund Balances - Beginning
Fund Balances - Ending
22,821 38,554 15,733 1,537
50,394 50,394 48,857
$ 73,215 $ 88,948 $ 15,733 $ 50,394
90
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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, 2011
with comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final Budget Actual (Negative) 2010
Revenues
Investment earnings $ 330 $ 299 $ (31) $ 481
Other 75,250 31,941 (43,309) 61,289
Total Revenues 75,580 32,240 (43,340) 61,770
Expenditures
Current:
Public safety 132,717 111,153 21,564 81,575
Total Expenditures 132,717 111,153 21,564 81,575
Revenues over (under) expenditures (57,137) (78,913) (21,776) (19,805)
Net change in fund balance (57,137) (78,913) (21,776) (19,805)
Fund Balances - Beginning 246,263 246,263 266,068
Fund Balances - Ending $ 189,126 $ 167,350 $ (21,776) $ 246,263
91
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND - PARKS AND RECREATION DEVELOPMENT
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
with comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final Budget Actual (Negative) 2010
Revenues
Investment earnings $ 1,650 $ 1,605 $ (45) $ 1,922
Other 80,290 54,040 (26,250) 147,150
Total Revenues 81,940 55,645 (26,295) 149,072
Expenditures
Current:
Parks and recreation 342,459 26,742 315,717 29,365
Total Expenditures 342,459 26,742 315,717 29,365
Revenues over (under) expenditures
(260,519) 28,903 289,422 119,707
Other Financing Sources (Uses)
Transfers (to) other funds (139,574) (139,574)
(139,574) (139,574)
Net change in fund balance (400,093) (110,671) 289,422 119,707
Fund Balances - Beginning 1,164,226 1,164,226 1,044,519
Fund Balances - Ending $ 764,133 $ 1,053,555 $ 289,422 $ 1,164,226
92
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, 2011
with comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final Budget Actual (Negative) 2010
Revenues
Investment earnings $ 341 $ 306 $ (35) $ 379
Other 15,803 5,803 (10,000) 10,407
Total Revenues 16,144 6,109 (10,035) 10,786
Net change in fund balance
Fund Balances - Beginning
Fund Balances - Ending
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16,144 6,109 (10,035) 10,786
213,139 213,139 202,353
$ 229,283 $ 219,248 $ (10,035) $ 213,139
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93
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND - GRANT FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
with comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final Budget Actual (Negative) 2010
Revenues
Investment earnings $ 8 $ 6 $ (2) $ 25
Intergovernmental 1,567,255 694,332 (872,923) 1,066,293
Other
Total Revenues 1,567,263 694,338 (872,925) 1,066,318
Expenditures
Current:
General government 18,961 18,435 526 21,409
Public safety 88,244 85,489 2,755 440,943
Community service 475,417 292,871 182,546 31,266
Parks and recreation 231,256 36,939 194,317 50,067
Capital outlay 515,052 157,564 357,488 509,626
Total Expenditures 1,328,930 591,298 737,632 1,053,311
Revenues over (under) expenditures 238,333 103,040 (135,293) 13,007
Other Financing Sources (Uses)
Transfers from other funds
Transfers (to) other funds (220,323) (105,786) 114,537 (19,384)
Total other financing
sources (uses) (220,323) (105,786) 114,537 (19,384)
Net change in fund balance 18,010 (2,746) (20,756) (6,377)
Fund Balances - Beginning 30,411 30,411 36,788
Fund Balances - Ending $ 48,421 $ 27,665 $ (20,756) $ 30,411
94
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CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND - TRAFFIC IMPACT IMPROVEMENTS
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
with comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final Budget Actual (Negative) 2010
Revenues
Investment earnings $ 800 $ 790 $ (10) $ 1,009
Other 44,800 44,800 4,670,
Total Revenues 800 45,590 44,790 5,679
Revenues over (under) expenditures 800 45,590 44,790 5,679
Other Financing Sources/(Uses)
Transfers (to) other funds (750) (750)
Total Other Financing
Sources (Uses) (750) (750)
Net change in fund balance
Fund Balances - Beginning
Fund Balances - Ending
50 44,840 44,790 5,679
546,564 546,564 540,885
$ 546,614 $ 591,404 $ 44,790 $ 546,564
95
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND - JUVENILE MANAGEMENT FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
with comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final Budget Actual (Negative) 2010
Revenues
Fines and Fees $ 61,563 $ 60,955 $ (608) $ 51,155
Investment earnings 29 28 (1) 8
Total Revenues 61,592 60,983 (609) 51,163
Revenues over (under) expenditures 61,592 60,983 (609) 51,163
Other Financing Sources/(Uses)
Transfers (to) other funds (50,653) (50,653) (42,596)
Total other financing sources (uses) (50,653) (50,653) (42,596)
Net change in fund balance 10,939 10,330 (609) 8,567
Fund Balances - Beginning 9,071 9,071 504
Fund Balances - Ending $ 20,010 $ 19,401 $ (609) $ 9,071
96
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND - MANAGEMENT DISTRICT 1
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
with comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final Budget Actual (Negative) 2010
Revenues
Investment earnings $ 138 $ 138 $ $ 539
Total Revenues 138 138 539
EXPENDITURES
Current:
General government
Total Expenditures
Revenues over (under) expenditures
Other Financing Sources (Uses)
Transfers from other funds
Transfers (to) other funds
Total Other Financing Sources (Uses)
Net change in fund balance
Fund Balances - Beginning
Fund Balances - Ending
197,330 197,330
197,330 197,330
(197,192) (197,192) 539
(948) (948) (201,217)
(948) (948) (201,217)
(198,140) (198,140) (200,678)
198,140 198,140 398,818
$
$ $ $ 198,140
97
CITY OF PEARLAND, TEXAS
SPECIAL REVENUE FUND - U OF H FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended September 30, 2011
with comparative actual totals for the year ended September 30, 2010
2011
Variance
Positive /
Final Budget Actual (Negative) 2010
Revenues
Investment earnings $ 30 $ 34 $ 4 $ 3
Intergovernmental 65,601 66,702 1,101 11,798
Other 192,299 192,336 37 41,464
Total Revenues 257,930 259,072 1,142 53,265
Expenditures
Current:
Parks and recreation 307,750 261,858 45,892 46,562
Total Expenditures 307,750 261,858 45,892 46,562
Revenues over (under) expenditures (49,820) (2,786) 47,034 6,703
Other Financing Sources (Uses)
Transfers from other funds 45,771 (45,771)
Transfers (to) other funds (2,654)
Total Other Financing Sources (Uses) 45,771 (45,771) (2,654)
Net change in fund balance (4,049) (2,786) 1,263 4,049
Fund Balances - Beginning 4,049 4,049
Fund Balances - Ending $ $ 1,263 $ 1,263 $ 4,049
98
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Discretely Presented Component Units
Fund Based Financial Statements
99
CITY OF PEARLAND, TEXAS
DISCRETELY PRESENTED COMPONENT UNITS
BALANCE SHEETS - GOVERNMENTAL FUNDS
September 30, 2011
Pearland
Economic
Development
Corporation
Tax Increment
Reinvestment
Zone #2
Development
Authority of
Pearland
Total
Component
Units
Assets
Cash and equivalents $ 3,869,964 $ 4,169,845 $ 2,678,435 $ 10,718,244
Investments 3,611,882 3,611,882
Receivables -less allowance for
uncollectibles
Due from primary government
Prepaid items
Restricted cash
Total Assets
Liabilities
Accounts payable and
accrued expenses
Customer deposits
Total Liabilities
Fund Balance
Non -spendable:
Prepaid items
Restricted for:
Debt service
Economic development
Total Fund Balance
Total Liabilities and Fund Balance
1,155,488
11,355
665,254
9,313,943
105,449
12,691
2,712,587
1,260,937
12,691
11,355
3,377,841
$ 4,287,985 $ 5,391,022 $ 18,992,950
$ 35,452 $
38,333
73,785
11,355
665,254
8,563,549
9,240,158
14,403 $ 1,400 $ 51,255
38,333
14,403
1,400
2,712,587
4,273,582 2,677,035
89,588
11,355
3,377,841
15,514,166
4,273,582 5,389,622 18,903,362
$ 9,313,943 $
Reconciliation from fund balance to net assets
fund balance
Add capital assets
Less revenue bonds payable
Less other long-term liabilities
Less interest payable
Net Assets
$ 9,240,158
9,879,734
(25,045,450)
(43,613)
(95,612)
4,287,985 $ 5,391,022 $ 18,992,950
$ 4,273,582 $ 5,389,622 $ 18,903,362
9,879,734
(46,097,563) (71,143,013)
(43,613)
(184,283) (279,895)
$ (6,064,783) $ 4,273,582 $ (40,892,224) $ (42,683,425)
100
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CITY OF PEARLAND, TEXAS
DISCRETELY PRESENTED COMPONENT UNITS
7 STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - GOVERNMENTAL FUNDS
For the Year Ended September 30, 2011
CPearland
Economic Tax Increment Development Total
Development Reinvestment Authority of Component
7 Corporation Zone #2 Pearland Units
Revenues
Taxes:
let Property taxes $ $ 14,724,037 $ $ 14,724,037
Li Sales and use taxes 6,593,971 6,593,971
Investment earnings 10,643 11,891 3,006 25,540
Other 657,523 657,523
C Total Revenues 7,262,137 14,735,928 3,006 22,001,071
Expenditures
rCurrent:
General government 11,333 11,333
Economic development 2,122,912 5,527,689 9,740,000 17,390,601
7 Capital Outlay 64,652 64,652
Debt Service
Principal 800,000 1,830,000 2,630,000
7 Interest 1,226,324 2,385,172 3,611,496
Bond issuance cost
Intergovernmental - City 173,158 173,158
Total Expenditures 4,387,046 5,527,689 13,966,505 23,881,240
7 Revenues over (under) expenditures 2,875,091 9,208,239 (13,963,499) (1,880,169)
Other Financing Sources (Uses)
7 Transfers from other component units 11,819,230 11,819,230
Transfers (to) other component units (11,819,230) (11,819,230)
Total other financing sources (uses) (11,819,230) 11,819,230
7 Changes in fund balance 2,875,091 (2,610,991) (2,144,269) (1,880,169)
Fund Balances - Beginning 6,365,067 6,884,573 7,533,891 20,783,531
Fund Balances - Ending $ 9,240,158 $ 4,273,582 $ 5,389,622 $ 18,903,362
7 Reconciliation from changes in fund
balance to changes in net assets
Change in fund balance $ 2,875,091 $ (2,610,991) $ (2,144,269) $ (1,880,169)
r Add principal payments 800,000 1,830,000 2,630,000
Less amortization (296,403) (296,403)
Changes in interest payable 2,582 5,713 8,295
7 Less post -employment benefit
liability expense (28,642) (28,642)
Less depreciation (358,848) (358,848)
7 Add capital outlay 59,508 59,508
$
1f Changes in Net Assets 3,349,691 $ (2,610,991) $ (604,959) $ 133,741
7
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Long -Term Debt Amortization Schedules
103
CITY OF PEARLAND, TEXAS
COMBINING SCHEDULE OF GOVERNMENTAL ACTIVITY LONG-TERM DEBT
BY MATURITY DATE
September 30, 2011
Permanent Improvement Bonds, Series 2002 Permanent Improvement Bonds, Series 2003
Fiscal Year Principal Interest Total Principal Interest Total
2012 $ 810,000 $ 28,350 S 838,350 $ 370,000 $ 559,728 $ 929,728
2013 390,000 536,929 926,929
2014 525,229 525,229
2015 525,228 525,228
2016 455,000 516,129 971,129
2017 725,000 492,529 1,217,529
2018 765,000 462,729 1,227,729
2019 805,000 430,826 1,235,826
2020 845,000 396,266 1,241,266
2021 885,000 359,283 1,244,283
2022 935,000 320,153 1,255,153
2023 980,000 278,613 1,258,613
2024 1,030,000 234,000 1,264,000
2025 1,085,000 186,413 1,271,413
2026 1,140,000 136,350 1,276,350
2027 1,200,000 83,700 1,283,700
2028 1,260,000 28,350 1,288,350
2029
2030
2031
2032
2033
2034
2035
2036
$ 810,000 $ 28,350 $ 838,350 $ 12,870,000 $ 6,072,452 $ 18,942,452
Certificates of Obligation, Series 2003 Certificates of Obligation, Series 2004
Fiscal Year Principal Interest Total Principal Interest Total
2012 $ 1,235,000 $ 580,095 $ 1,815,095 $ 380,000 $ 560,322 $ 940,322
2013 1,295,000 531,114 1,826,114 385,000 545,021 930,021
2014 1,035,000 488,203 1,523,203 710,000 523,121 1,233,121
2015 1,090,000 449,408 1,539,408 710,000 494,721 1,204,721
2016 1,145,000 407,488 1,552,488 730,000 465,922 1,195,922
2017 1,210,000 361,533 1,571,533 1,030,000 430,721 1,460,721
2018 1,180,000 313,733 1,493,733 1,070,000 388,186 1,458,186
2019 1,240,000 265,333 1,505,333 1,160,000 341,891 1,501,891
2020 1,310,000 213,023 1,523,023 317,532 317,532
2021 1,380,000 156,188 1,536,188 317,531 317,531
2022 1,455,000 95,944 1,550,944 317,531 317,531
2023 1,530,000 32,513 1,562,513 317,531 317,531
2024 317,532 317,532
2025 1,625,000 280,969 1,905,969
2026 1,675,000 205,672 1,880,672
2027 1,730,000 126,931 1,856,931
2028 1,830,000 43,463 1,873,463
2029
2030
2031
2032
2033
2034
2035
2036
$ 15,105,000
3,894,570 $ 18,999,570 $ 13,035,000 $ 5,994,597 $ 19,029,597
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Permanent Improvement & Refund Bonds, Series 2005 Certificates of Obligation, Series 2006
Fiscal Year Principal Interest Total Principal Interest Total
2012 $ 1,775,000 $ 1,514,039 $ 3,289,039 $ 315,000 $ 434,594 $ 749,594
2013 1,845,000 1,445,011 3,290,011 335,000 414,688 749,688
2014 1,930,000 1,370,664 3,300,664 355,000 393,557 748,557
2015 2,010,000 1,281,814 3,291,814 370,000 371,354 741,354
2016 2,115,000 1,178,689 3,293,689 395,000 349,654 744,654
2017 865,000 1,108,514 1,973,514 405,000 330,932 735,932
2018 995,000 1,071,314 2,066,314 405,000 314,074 719,074
2019 380,000 1,043,624 1,423,624 505,000 294,838 799,838
2020 385,000 1,027,893 1,412,893 470,000 274,001 744,001
2021 395,000 1,011,658 1,406,658 500,000 253,146 753,146
2022 405,000 994,756 1,399,756 525,000 230,912 755,912
2023 875,000 967,338 1,842,338 555,000 207,218 762,218
2024 2,625,000 882,900 3,507,900 585,000 181,991 766,991
2025 2,760,000 748,275 3,508,275 605,000 155,363 760,363
2026 2,900,000 606,775 3,506,775 730,000 125,325 855,325
2027 3,045,000 465,763 3,510,763 765,000 91,688 856,688
2028 4,010,000 297,000 4,307,000 805,000 56,363 861,363
2029 3,935,000 98,375 4,033,375 850,000 19,125 869,125
2030
2031
2032
2033
2034
2035
2036
$ 33,250,000 $ 17,114,399 5 50,364,399 $ 9,475,000 $ 4,498,821 $ 13,973,821
Permanent Improvement & Refund Bonds, Series 2006 Certificates of Obligation, Series 2007
Fiscal Year Principal Interest Total Principal Interest Total
2012 $ 385,000 $ 1,506,694 $ 1,891,694 $ 200,000 $ 1,033,900 $ 1,233,900
2013 400,000 1,490,994 1,890,994 250,000 1,022,088 1,272,088
2014 410,000 1,474,794 1,884,794 300,000 1,007,650 1,307,650
2015 430,000 1,457,994 1,887,994 350,000 990,588 1,340,588
2016 445,000 1,440,216 1,885,216 400,000 970,900 1,370,900
2017 460,000 1,421,263 1,881,263 450,000 948,587 1,398,587
2018 480,000 1,401,288 1,881,288 1,005,000 910,394 1,915,394
2019 1,335,000 1,361,050 2,696,050 1,060,000 856,187 1,916,187
2020 1,485,000 1,293,888 2,778,888 1,115,000 799,094 1,914,094
2021 1,580,000 1,217,263 2,797,263 1,170,000 739,112 1,909,112
2022 1,675,000 1,135,888 2,810,888 1,230,000 676,113 1,906,113
2023 2,150,000 1,040,263 3,190,263 1,295,000 609,831 1,904,831
2024 2,150,000 932,763 3,082,763 1,360,000 540,137 1,900,137
2025 2,270,000 822,263 3,092,263 1,430,000 466,900 1,896,900
2026 2,395,000 705,638 3,100,638 1,500,000 389,988 1,889,988
2027 2,525,000 585,794 3,110,794 1,580,000 324,937 1,904,937
2028 3,690,000 438,188 4,128,188 1,660,000 272,288 1,932,288
2029 7,380,000 175,275 7,555,275 1,745,000 216,956 1,961,956
2030 1,540,000 163,575 1,703,575
2031 1,600,000 104,550 1,704,550
2032 1,660,000 35,275 1,695,275
2033
2034
2035
2036
$ 31,645,000 $ 19,901,509 $ 51,546,509 $ 22,900,000 $ 13,079,050 $ 35,979,050
105
CITY OF PEARLAND, TEXAS
COMBINING SCHEDULE OF GOVERNMENTAL ACTIVITY LONG-TERM DEBT
BY MATURITY DATE
September 30, 2011
BCMUD #1 Bonds, Series 2007 Permanent Improvement & Refund Bonds, Series 2007
Fiscal Year Principal Interest Total Principal Interest Total
2012 $ 55,000 $ 79,927 $ 134,927 $ 885,000 $ 3,193,562 $ 4,078,562
2013 60,000 77,865 137,865 1,940,000 3,137,063 5,077,063
2014 65,000 75,585 140,585 2,510,000 3,048,062 5,558,062
2015 70,000 73,082 143,082 2,685,000 2,924,025 5,609,025
2016 75,000 70,353 145,353 2,345,000 2,791,562 5,136,562
2017 75,000 67,428 142,428 2,460,000 2,671,438 5,131,438
2018 80,000 64,428 144,428 2,220,000 2,554,437 4,774,437
2019 85,000 61,228 146,228 3,830,000 2,403,188 6,233,188
2020 90,000 57,827 147,827 5,190,000 2,190,662 7,380,662
2021 95,000 54,228 149,228 5,395,000 1,952,500 7,347,500
2022 100,000 50,333 150,333 5,610,000 1,704,887 7,314,887
2023 110,000 46,232 156,232 5,005,000 1,466,050 6,471,050
2024 115,000 41,612 156,612 5,230,000 1,235,763 6,465,763
2025 120,000 36,782 156,782 3,835,000 1,034,197 4,869,197
2026 130,000 31,622 161,622 3,845,000 866,197 4,711,197
2027 135,000 26,033 161,033 4,010,000 686,850 4,696,850
2028 145,000 20,227 165,227 2,290,000 537,225 2,827,225
2029 155,000 13,920 168,920 2,370,000 426,550 2,796,550
2030 165,000 7,178 172,178 2,590,000 308,750 2,898,750
2031 2,620,000 185,012 2,805,012
2032 2,585,000 61,394 2,646,394
2033
2034
2035
2036
$ 1,925,000 $ 955,890 $ 2,880,890 $ 69,450,000 $ 35,379,374 $ 104,829,374
Certificates of Obligation, Series 2008 Permanent Improvement Bonds, Series 2008
Fiscal Year Principal Interest Total Principal Interest Total
2012 $ 130,000 $ 409,150 $ 539,150 $ 290,000 $ 1,068,525 $ 1,358,525
2013 105,000 404,678 509,678 235,000 1,055,400 1,290,400
2014 155,000 399,641 554,641 335,000 1,041,150 1,376,150
2015 145,000 393,828 538,828 310,000 1,025,025 1,335,025
2016 150,000 388,019 538,019 325,000 1,009,150 1,334,150
2017 160,000 381,819 541,819 340,000 992,525 1,332,525
2018 165,000 375,319 540,319 360,000 975,025 1,335,025
2019 185,000 368,319 553,319 405,000 955,900 1,360,900
2020 195,000 360,719 555,719 425,000 934,619 1,359,619
2021 205,000 352,591 557,591 445,000 911,781 1,356,781
2022 215,000 343,794 558,794 470,000 887,763 1,357,763
2023 225,000 334,388 559,388 490,000 861,950 1,351,950
2024 240,000 324,300 564,300 515,000 834,313 1,349,313
2025 250,000 313,550 563,550 545,000 805,163 1,350,163
2026 290,000 301,525 591,525 625,000 772,988 1,397,988
2027 305,000 287,375 592,375 660,000 737,650 1,397,650
2028 320,000 271,750 591,750 695,000 700,388 1,395,388
2029 335,000 255,375 590,375 730,000 664,850 1,394,850
2030 1,335,000 213,625 1,548,625 4,530,000 543,669 5,073,669
2031 1,675,000 138,375 1,813,375 4,705,000 330,109 5,035,109
2032 1,930,000 48,250 1,978,250 4,785,000 110,653 4,895,653
2033
2034
2035
2036
$ 8,715,000 $ 6,666,388 $ 15,381,388 $ 22,220,000 $ 17,218,594 $ 39,438,594
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Certificate of Obligation, Series 2009 Certificate of Obligation, Series 2009A
Fiscal Year Principal Interest Total Principal Interest Total
2012 $ 225,000 $ 356,615 $ 581,615 $ 640,000 $ 383,365 $ 1,023,365
2013 260,000 351,553 611,553 640,000 370,565 1,010,565
2014 230,000 345,703 575,703 640,000 356,965 996,965
2015 235,000 339,953 574,953 640,000 341,765 981,765
2016 240,000 332,903 572,903 640,000 324,965 964,965
2017 245,000 325,703 570,703 640,000 301,765 941,765
2018 255,000 317,128 572,128 640,000 275,403 915,403
2019 320,000 307,565 627,565 640,000 252,560 892,560
2020 325,000 294,765 619,765 635,000 231,361 866,361
2021 340,000 281,765 621,765 640,000 210,163 850,163
2022 350,000 268,165 618,165 640,000 187,763 827,763
2023 365,000 253,815 618,815 640,000 164,403 804,403
2024 385,000 238,303 623,303 640,000 140,562 780,562
2025 400,000 221,363 621,363 635,000 116,338 751,338
2026 420,000 203,363 623,363 640,000 91,315 731,315
2027 440,000 183,938 623,938 640,000 65,715 705,715
2028 465,000 163,038 628,038 635,000 39,898 674,898
2029 485,000 139,788 624,788 640,000 13,440 653,440
2030 415,000 116,750 531,750
2031 410,000 96,000 506,000
2032 475,000 75,500 550,500
2033 505,000 51,750 556,750
2034 530,000 26,500 556,500
2035
2036
$ 8,320,000 $ 5,291,920 $ 13,611,920 $ 11,505,000 $ 3,868,311 $ 15,373,311
Permanent Improvement & Refund Bonds, Series 2009
(Governmental Activities Portion)
Fiscal Year Principal Interest Total
2012 $ 310,000 $ 662,017 $ 972,017
2013 380,000 655,118 1,035,118
2014 390,000 641,568 1,031,568
2015 405,000 626,754 1,031,754
2016 420,000 615,918 1,035,918
2017 435,000 599,267 1,034,267
2018 455,000 578,154 1,033,154
2019 590,000 557,888 1,147,888
2020 615,000 537,863 1,152,863
2021 635,000 517,075 1,152,075
2022 655,000 494,490 1,149,490
2023 680,000 470,120 1,150,120
2024 705,000 444,321 1,149,321
2025 735,000 416,953 1,151,953
2026 765,000 387,505 1,152,505
2027 795,000 356,305 1,151,305
2028 825,000 323,492 1,148,492
2029 865,000 288,415 1,153,415
2030 835,000 249,375 1,084,375
2031 945,000 204,875 1,149,875
2032 1,090,000 154,000 1,244,000
2033 1,235,000 95,875 1,330,875
2034 1,300,000 32,500 1,332,500
2035
2036
$ 16,065,000 $ 9,909,848 $ 25,974,848
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CITY OF PEARLAND, TEXAS
COMBINING SCHEDULE OF GOVERNMENTAL ACTIVITY LONG-TERM DEBT
BY MATURITY DATE
September30, 2011
Page 3 of 3
Permanent Improvement Bonds, Series 2010A Permanent Improvement Refunding Bonds, Series 2010B
Fiscal Year Principal Interest Total Principal Interest Total
2012 $ 345,000 $ 424,503 $ 769,503 $ 210,000 $ 34,200 $ 244,200
2013 350,000 417,553 767,553 215,000 29,950 244,950
2014 355,000 410,503 765,503 220,000 25,600 245,600
2015 370,000 399,553 769,553 225,000 21,150 246,150
2016 380,000 388,353 768,353 225,000 14,400 239,400
2017 390,000 378,703 768,703 240,000 6,300 246,300
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
$ 12,045,000 $ 6,376,241 5 18,421,241 $ 1,425,000 $ 132,950 S 1,557,950
Permanent Improvement Bonds , Series 2011 Certificates of Obligation, Series 2011
Fiscal Year Principal Interest Total Principal Interest Total
2012 S 60,000 $ 202,544 $ 262,544 $ 210,000 S 39,037 S 249,037
2013 140,000 200,419 340,419 210,000 37,202 247,202
2014 145,000 196,031 341,031 210,000 32,813 242,813
2015 150,000 190,131 340,131 210,000 28,424 238,424
2016 155,000 184,031 339,031 210,000 24,035 234,035
2017 165,000 177,631 342,631 205,000 19,698 224,698
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
S 5,400,000 S 3,034,166 S 8,434,166 $ 2,095,000 $ 216,321 $ 2,311,321
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CITY OF PEARLAND, TEXAS
COMBINING SCHEDULE OF ENTERPRISE FUND LONG-TERM DEBT
BY MATURITY DATE
September30, 2011
Water & Sewer System Revenue Bonds, Series 1999 Water & Sewer System Revenue Bonds, Series 2003
Fiscal Year Principal Interest Total Principal Interest Total
2012 $ 240,000 $ 266,466 $ 506,466 $ 315,000 $ 323,113 $ 638,113
2013 250,000 255,654 505,654 330,000 304,213 634,213
2014 260,000 244,392 504,392 340,000 285,238 625,238
2015 270,000 232,678 502,678 355,000 271,638 626,638
2016 290,000 220,295 510,295 365,000 257,438 622,438
2017 1,080,000 207,451 1,287,451 375,000 242,838 617,838
2018 1,125,000 158,796 1,283,796 385,000 227,838 612,838
2019 1,175,000 108,110 1,283,110 390,000 212,438 602,438
2020 1,225,000 55,182 1,280,182 395,000 196,350 591,350
2021 395,000 179,563 574,563
2022 410,000 162,775 572,775
2023 420,000 145,350 565,350
2024 1,500,000 127,500 1,627,500
2025 1,500,000 63,750 1,563,750
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
$ 5,915,000 $ 1,749,024 $ 7,664,024 $ 7,475,000 $ 3,000,038 $ 10,475,038
Water & Sewer System Revenue and Refunding Bonds, Water & Sewer System Revenue and Refunding Bonds,
Series 2006 Series 2007
Fiscal Year Principal Interest Total Principal Interest Total
2012 $ 625,000 $ 585,931 $ 1,210,931 $ 830,000 $ 1,764,063 $ 2,594,063
2013 650,000 559,369 1,209,369 880,000 1,718,413 2,598,413
2014 680,000 530,119 1,210,119 920,000 1,670,013 2,590,013
2015 710,000 499,519 1,209,519 965,000 1,619,413 2,584,413
2016 745,000 467,569 1,212,569 1,010,000 1,566,338 2,576,338
2017 100,000 434,044 534,044 950,000 1,510,788 2,460,788
2018 100,000 429,744 529,744 995,000 1,458,538 2,453,538
2019 100,000 425,369 525,369 1,045,000 1,403,813 2,448,813
2020 100,000 420,869 520,869 1,095,000 1,348,950 2,443,950
2021 100,000 416,244 516,244 1,155,000 1,294,200 2,449,200
2022 100,000 411,619 511,619 1,210,000 1,236,450 2,446,450
2023 100,000 406,994 506,994 1,275,000 1,175,950 2,450,950
2024 100,000 402,369 502,369 2,295,000 1,112,200 3,407,200
2025 100,000 397,744 497,744 2,480,000 997,450 3,477,450
2026 1,150,000 393,119 1,543,119 3,120,000 873,450 3,993,450
2027 1,205,000 338,494 1,543,494 3,280,000 717,450 3,997,450
2028 1,265,000 278,244 1,543,244 3,440,000 553,450 3,993,450
2029 1,330,000 214,994 1,544,994 3,615,000 398,650 4,013,650
2030 1,395,000 146,831 1,541,831 3,795,000 272,125 4,067,125
2031 1,470,000 75,338 1,545,338 3,980,000 139,300 4,119,300
2032
2033
2034
2035
$ 12,125,000 $ 7,834,519
$ 19,959,519 $ 38,335,000
110
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Water & Sewer System Revenue Bonds, Series 2008 Water & Sewer System Revenue Bonds, Series 2009
Fiscal Year Principal Interest Total Principal Interest Total
2012 $ 225,000 $ 667,640 $ 892,640 $ 360,000 $ 580,662 $ 940,662
2013 235,000 660,328 895,328 370,000 569,862 939,862
2014 255,000 652,690 907,690 380,000 558,763 938,763
2015 275,000 641,215 916,215 385,000 547,362 932,362
2016 290,000 628,840 918,840 400,000 535,812 935,812
2017 315,000 615,790 930,790 410,000 522,813 932,813
2018 340,000 601,615 941,615 420,000 508,975 928,975
2019 370,000 586,315 956,315 435,000 493,750 928,750
2020 395,000 569,665 964,665 450,000 476,350 926,350
2021 420,000 551,890 971,890 465,000 458,350 923,350
2022 440,000 532,990 972,990 485,000 438,588 923,588
2023 460,000 514,840 974,840 505,000 416,763 921,763
2024 490,000 495,520 985,520 520,000 393,406 913,406
2025 510,000 474,450 984,450 545,000 368,056 913,056
2026 540,000 448,950 988,950 570,000 340,806 910,806
2027 560,000 421,950 981,950 600,000 311,594 911,594
2028 595,000 393,950 988,950 630,000 280,844 910,844
2029 600,000 364,200 964,200 665,000 247,769 912,769
2030 580,000 334,200 914,200 700,000 212,025 912,025
2031 560,000 305,200 865,200 730,000 173,525 903;525
2032 1,890,000 277,200 2,167,200 765,000 133,375 898,375
2033 1,980,000 182,700 2,162,700 815,000 91,300 906,300
2034 2,080,000 93,600 2,173,600 845,000 46,475 891,475
2035
$ 14,405,000 $ 11,015,738 $ 25,420,738 $ 12,450,000 $ 8,707,225 $ 21,157,225
Permanent Improvement and Refunding Bonds,
Series 2009
Fiscal Year Principal Interest Total
2012 $ 830,000 $ 346,900 $ 1,176,900
2013 1,110,000 327,500 1,437,500
2014 1,155,000 287,525 1,442,525
2015 1,195,000 243,712 1,438,712
2016 1,220,000 212,000 1,432,000
2017 2,065,000 143,601 2,208,601
2018 2,155,000 45,988 2,200,988
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
$ 9,730,000 $ 1,607,226 $ 11,337,226
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CITY OF PEARLAND, TEXAS
COMBINING SCHEDULE OF ENTERPRISE FUND LONG-TERM DEBT
BY MATURITY DATE
September 30, 2011
Page 2 of
Water & Sewer Revenue Bonds , Series 2010A Water & Sewer Refunding Bonds, Series 2010B
Principal Interest Total Principal Interest Total
2012 $ 380,000 $ 519,956 $ 899,956 $ 330,000 $ 308,269 $ 638,269
2013 390,000 513,306 903,306 340,000 302,494 642,494
2014 395,000 506,481 901,481 350,000 296,544 646,544
2015 405,000 498,581 903,581 355,000 289,544 644,544
2016 410,000 490,481 900,481 370,000 282,444 652,444
2017 425,000 480,231 905,231 385,000 273,194 658,194
2018 440,000 467,481 907,481 405,000 261,644 666,644
2019 455,000 453,731 908,731 425,000 248,988 673,988
2020 475,000 438,944 913,944 445,000 235,175 680,175
2021 495,000 422,318 917,318 1,750,000 219,600 1,969,600
2022 515,000 402,519 917,519 1,830,000 149,600 1,979,600
2023 535,000 381,919 916,919 1,910,000 76,400 1,986,400
2024 555,000 360,519 915,519
2025 580,000 338,318 918,318
2026 600,000 315,118 915,118
2027 625,000 291,118 916,118
2028 650,000 265,337 915,337
2029 680,000 237,713 917,713
2030 710,000 208,813 918,813
2031 177,750 177,750
2032 144,450 144,450
2033 110,475 110,475
2034 75,150 75,150
2035 3,950,000 38,025 3,988,025
$ 13,670,000 $ 8,138,734 S 21,808,734 $ 8,895,000 S 2,943,896 $ 11,838,896
113
PEARLAND ECONOMIC DEVELOPMENT CORPORATION
COMBINING SCHEDULE OF GENERAL LONG-TERM DEBT OF
PEARLAND ECONOMIC DEVELOPMENT CORPORATION BY MATURITY DATE
September 30, 2011
Fiscal Year
Sales Tax Revenue Bonds, Series 2005
Principal Interest
Sales Tax Revenue Bonds, Series 2006
Total Principal
2012 $ 410,000 $ 355,088 $ 765,088 $ 200,000
2013 425,000 340,738 765,738 210,000
2014 445,000 323,738 768,738 215,000
2015 460,000 305,938 765,938 230,000
2016 480,000 287,538 767,538 240,000
2017 505,000 263,538 768,538 255,000
2018 530,000 238,288 768,288 265,000
2019 555,000 211,788 766,788 280,000
2020 575,000 189,588 764,588 300,000
2021 600,000 166,588 766,588 310,000
2022 625,000 141,988 766,988 325,000
2023 650,000 116,363 766,363 345,000
2024 675,000 89,550 764,550 365,000
2025 705,000 61,200 766,200 385,000
2026 735,000 31,238 766,238 405,000
2027 1,190,000
2028 1,255,000
2029 1,320,000
2030 1,390,000
$ 8,375,000 $ 3,123,163 $ 11,498,163 $ 9,485,000
Interest
$ 454,169
444,169
433,669
422,919
411,419
401,219
390,381
378,788
366,538
353,038
339,088
322,838
305,588
287,338
268,088
247,838
188,338
128,725
66,025
$ 6,210,169
Total
$ 654,169
654,169
648,669
652,919
651,419
656,219
655,381
658,788
666,538
663,038
664,088
667,838
670,588
672,338
673,088
1,437,838
1,443,338
1,448,725
1,456,025
$ 15,695,169
114
Sales Tax Revenue Bonds, Series 2010
Fiscal Year Principal Interest Total
2012 $ 230,000 $ 384,240 $ 614,240
2013 245,000 372,410 617,410
2014 260,000 359,807 619,807
2015 275,000 346,434 621,434
2016 290,000 332,288 622,288
2017 300,000 317,371 617,371
2018 320,000 301,940 621,940
2019 340,000 285,480 625,480
2020 355,000 267,991 622,991
2021 375,000 249,731 624,731
2022 400,000 230,441 630,441
2023 420,000 209,866 629,866
2024 440,000 188,262 628,262
2025 465,000 165,630 630,630
2026 495,000 141,711 636,711
2027 525,000 116,249 641,249
2028 550,000 89,245 639,245
2029 575,000 60,954 635,954
2030 610,000 31,377 641,377
$ 7,470,000 $ 4,451,427 $ 11,921,427
115
DEVELOPMENT AUTHORITY OF PEARLAND
COMBINING SCHEDULE OF GENERAL LONG-TERM DEBT OF
DEVELOPMENT AUTHORITY OF PEARLAND BY MATURITY DATE
September 30, 2011
Fiscal Year
Ending
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
Fiscal Year
Ending
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
Tax Increment Revenue Bonds, Series 2004
Principal
$ 425,000
440,000
460,000
485,000
505,000
530,000
555,000
585,000
615,000
645,000
675,000
710,000
750,000
790,000
835,000
880,000
925,000
$ 10,810,000
Interest
$ 552,933
534,020
513,780
492,160
469,365
445,125
418,625
390,875
361,625
330,875
298,625
264,031
227,644
186,806
143,788
98,313
50,388
Total
$ 977,933
974,020
973,780
977,160
974,365
975,125
973,625
975,875
976,625
975,875
973,625
974,031
977,644
976,806
978,788
978,313
975,388
$ 5,778,978 $ 16,588,978
Tax Increment Revenue Bonds, Series 2006
Principal
Interest
Tax Increment Revenue Bonds, Series 2005
Principal
$ 300,000
315,000
330,000
340,000
360,000
375,000
390,000
390,000
410,000
425,000
450,000
470,000
485,000
510,000
530,000
560,000
585,000
Interest Total
$ 328,329
315,954
302,566
288,129
272,829
257,529
241,216
223,666
206,116
187,256
168,131
147,319
125,581
103,150
79,563
54,388
27,788
$ 628,329
630,954
632,566
628,129
632,829
632,529
631,216
613,666
616,116
612,256
618,131
617,319
610,581
613,150
609,563
614,388
612,788
$ 7,225,000 $ 3,329,510 $ 10,554,510
Tax Increment Revenue Bonds, Series 2007
Total Principal
$ 375,000
395,000
405,000
425,000
440,000
455,000
480,000
460,000
480,000
500,000
520,000
540,000
570,000
590,000
620,000
640,000
675,000
$ 358,386
343,386
327,586
311,386
294,387
276,788
258,586
239,387
220,986
201,306
180,307
158,206
134,986
110,476
84,811
57,531
29,531
$ 733,386
738,386
732,586
736,386
734,387
731,788
738,586
699,387
700,986
701,306
700,307
698,206
704,986
700,476
704,811
697,531
704,531
$ 8,570,000 $ 3,588,032 $ 12,158,032
116
Interest Total
$ 485,000 $ 638,109 $ 1,123,109
500,000 618,709 1,118,709
520,000 600,209 1,120,209
540,000 580,709 1,120,709
560,000 560,189 1,120,189
585,000 537,789 1,122,789
605,000 514,389 1,119,389
680,000 489,433 1,169,433
620,000 460,533 1,080,533
650,000 433,408 1,083,408
680,000 404,158 1,084,158
710,000 373,558 1,083,558
740,000 341,608 1,081,608
775,000 308,308 1,083,308
810,000 273,433 1,083,433
850,000 235,363 1,085,363
885,000 194,988 1,079,988
3,220,000 152,950 3,372,950
$ 14,415,000 $ 7,717,836 $ 22,132,836
Tax Increment Revenue Bonds, Series 2009
Fiscal Year
Ending Principal Interest Total
2012 $ 315,000 $ 422,601 $ 737,601
2013 325,000 412,758 737,758
2014 340,000 400,570 740,570
2015 350,000 387,395 737,395
2016 365,000 371,645 736,645
2017 385,000 354,308 739,308
2018 400,000 336,501 736,501
2019 425,000 316,501 741,501
2020 415,000 295,251 710,251
2021 435,000 274,501 709,501
2022 455,000 252,208 707,208
2023 485,000 228,320 713,320
2024 510,000 202,251 712,251
2025 535,000 173,681 708,681
2026 565,000 143,374 708,374
2027 600,000 111,169 711,169
2028 635,000 76,669 711,669
2029 670,000 39,363 709,363
$ 8,210,000 $ 4,799,066 $ 13,009,066
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Statistical Section
(Unaudited)
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Unaudited Statistical Section
This part of the City of Pearland, Texas' comprehensive annual fmancial 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 122
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 132
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 140
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 145
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 147
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.
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121
CITY OF PEARLAND, TEXAS
NET ASSETS BY COMPONENT
Last Nine Fiscal Years*
Amounts in (000's)
(Accrual Basis of Accounting)
2003 2004 2005 2006 2007
Governmental Activities
Invested in capital assets, net
of related debt $418,713 $405,052 $396,619 $402,103 $400,522
Restricted 4,151 6,391 6,862 8,085 10,130
Unrestricted 3,210 6,746 5,785 8,917 11,809
Total governmental activities
net assets $426,074 $418,189 $409,266 $419,105 $422,461
Business -type activities
Invested in capital assets, net
of related debt
Restricted
Unrestricted
Total business -type activities
net assets
Primary government
Invested in capital assets
Restricted
Unrestricted
Total primary government
net assets
$107,472 $113,736 $127,144 $130,648 $126,779
7,027 10,129 24,258
25,749 18,986 552 700 1,638
$133,221 $132,722 $134,723 $141,477 $152,675
$ 526,185 $ 518,788 $ 523,763 $ 532,751 $ 527,301
4,151 6,391 13,889 18,214 34,388
28,959 25,732 6,337 9,617 13,447
$ 559,295 $ 550,911 $ 543,989 $ 560,582 $ 575,136
*GASB 34 was implemented in fiscal 2003, therefore 10 years of data is unavailable.
In Fiscal Year 2007, the City implemented the retroactive reporting of infrastructure in accordance with GASB
34. Prior year presentations have been adjusted to reflect the retroactive reporting.
122
C
2008 2009 2010 2011
$410,002 $429,054 $422,643 $413,439
10,864 10,615 18,020 16,462
10,903 13,330 13,692 14,543
$431,769 $452,999 $454,355 $444,444
$138,679 $146,150 $144,244 $156,629
16,094 11,965 17,587 5,603
3,406 9,256 11,942 13,910
$158,179 $167,371 $173,773 $176,142
$ 548,681 $ 575,204 $ 566,887 $ 570,068
26,958 22,580 35,607 22,065
14,309 22,586 25,634 28,453
$ 589,948 $ 620,370 $ 628,128 $ 620,586
123
CITY OF PEARLAND, TEXAS
CHANGES IN NET ASSETS
Last Nine Fiscal Years*
Amounts in (000's)
(Accrual Basis of Accounting)
Expenses
Governmental activities
General Government
Public Safety
Public Works
Community Services
Parks and Recreation
Interest on long-term debt
Total government activities expenses
Business -type activities:
Water and Sewer
Solid Waste
Total business -type activities:
Total primary government expenses
Program Revenue
Governmental activities
Charges for services:
General Government
Public Safety
Public Works
Community Services
Parks and Recreation
Operating grants and contributions
General Government
Public Safety
Public Works
Community Services
Parks and Recreation
Capital grants and contributions
General Government
Public Safety
Public Works
Parks and Recreation
Total governmental activities program revenues
Business -type activities:
Charges for services
Water and Sewer
Solid Waste
Operating grants and contributions
Water and Sewer
Capital grants and contributions
Water and Sewer
Total business -type activities program revenues
Total primary government program revenues
2003
$ 6,275
9,645
25,729
2,874
4,559
2004
$ 7,314
10,525
25,913
2,700
5,549
2005
$ 8,714
11,857
28,858
2,939
2006
$ 8,574
12,564
26,914
2,903
4,131
5,115 6,559
2007
$ 8,660
14,655
24,041
3,113
4,882
9,070
49,082 52,001 57,483 61,645 64,421
13,643 19,265 17,624 20,531 21,076
5,218
13,643 19,265 17,624 20,531 26,294
$ 62,725 $ 71,266 $ 75,107 $ 82,176 $ 90,715
$ 161
1,998
5,547
866
5
370
12
324
14
1,618
586
11,501
$ 506 $ 185 $
2,975 3,640
6,864 7,221
696 1,263
2,627
4,331
6,312
825
2 1,239
839 673 111
17 479 55
1,319 800
756 312
6 15,743
6
13,971 14,582
21
2,788
195
5,822
818
1,659
154
456
34
11
8,690
31,270 20,627
8,809 11,893 11,219 13,849 17,754
5,218
47
474
385
9,882 6,933 8,365 13,434 12,621
18,691 18,873 19,585 27,757 35,978
$ 30,192 $ 32,844 $ 34,167 $ 59,027 $ 56,605
124
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2008 2009 2010 2011
$ 11,161 $ 12,355 $ 13,439 $ 15,945
17,684 22,438 24,268 23,042
24,532 26,893 35,679 31,130
3,336 3,290 3,323 3,254
7,157 7,240 7,699 8,062
12,266 11,647 13,738 13,142
76,136 83,863 98,146 94,575
22,570 25,439 27,157 29,194
6,024 7,106 7,089 7,285
28,594 32,545 34,246 36,479
$104,730 $116,408 $132,392 $131,054
$ $ $ $
2,959 3,524 3,296 3,679
103 35 10 18
5,130 4,755 4,312 4,632
936 672 906 2,027
3,951 4,913 5,215 5,488
230 420 641 407
551 375 207 675
129 202 159 366
115 450 424 462
503 279 98
15,263 26,092 29,800 10,330
261 4,653
30,131 46,370 45,068 28,084
21,524 26,617 24,961 28,664
6,038 6,766 7,313 7,257
315 2,464 70 61
5,869 6,125 8,611 4,215
33,746 41,972 40,955 40,197
$ 63,877 $ 88,342 $ 86,023 $ 68,281
CITY OF PEARLAND, TEXAS
CHANGES IN NET ASSETS
Last Nine Fiscal Years*
Amounts in (000's)
(Accrual Basis of Accounting)
2003 2004 2005 2006 2007
Net (Expense)/Revenue
Governmental activities $ (37,581) $ (38,030) $ (42,901) $ (30,375) $ (43,794)
Business -type activities 5,048 (392) 1,961 7,226 9,684
Total primary government net expense $ (32,533) $ (38,422) $ (40,940) $ (23,149) $ (34,110)
General Revenues and Other Changes in Net Assets
Governmental activities:
Taxes:
Property taxes $ 15,120 $ 17,907 $ 19,805 $ 21,845 $ 24,823
Sales and use taxes 6,008 6,933 8,026 9,980 11,025
Franchise taxes 2,533 2,883 3,097 3,426 3,760
Investment earnings 171 1,115 1,863 2,991 4,943
Miscellaneous 742 783 828 740 1,539
Transfers 728 524 359 1,230 1,060
Total governmental activities $ 25,302 $ 30,145 $ 33,978 $ 40,212 $ 47,150
Business -type activities:
Investment earnings $ 196 $ 417 $ 399 $ 758 $ 2,574
Miscellaneous
Transfers (728) (524) (359) (1,230) (1,060)
Total business -type activities (532) (107) 40 (472) 1,514
Total primary government $ 24,770 $ 30,038 $ 34,018 $ 39,740 $ 48,664
Change in Net Assets
Governmental activities $ (12,279) $ (7,885) $ (8,923) $ 9,837 $ 3,356
Business -type activities 4,516 (499) 2,001 6,754 11,198
Total primary government $ (7,763) $ (8,384) $ (6,922) $ 16,591 $ 14,554
*GASB 34 was implemented in fiscal 2003, therefore 10 years of data is unavailable.
In Fiscal Year 2007, the City implemented the retroactive reporting of infrastructure in accordance with GASB
34. Prior year presentations have been adjusted to reflect the retroactive reporting of depreciation expenses.
126
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2008 2009 2010 2011
$ (46,005) $ (37,493) $ (53,078) $ (66,491)
5,152 9,427 6,709 3,718
$ (40,853) $ (28,066) $ (46,369) $ (62,773)
$ 29,492 $ 31,140 $ 32,963 $ 33,451
12,581 14,218 13,578 13,983
4,427 5,075 5,426 5,605
4,572 1,376 253 157
2,911 6,294 1,028 1,909
1,330 621 1,186 1,475
$ 55,313 $ 58,724 $ 54,434 $ 56,580
$ 1,669 $ 363 $ 100 $ 116
12 23 779 10
(1,330) (621) (1,186) (1,475)
351 (235) (307) (1,349)
$ 55,664 $ 58,489 $ 54,127 $ 55,231
$ 9,308 $ 21,231 $ 1,356 $ (9,911)
5,503 9,192 6,402 2,369
$ 14,811 $ 30,423 $ 7,758 $ (7,542)
CITY OF PEARLAND, TEXAS
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
Amounts in (000's)
(Modified Accrual Basis of Accounting)
2002 2003 2004 2005
General fund
Non -spendable $ 286 $ 52 $ 70 $ 71
Restricted
Assigned
Unassigned 4,739 5,310 8,216 8,132
Total General Fund $ 5,025 $ 5,362 $ 8,286 $ 8,203
All other governmental funds
Debt service $ 2,230 $ 2,130 $ 3,008 $ 3,855
Capital improvements 28,494 41,255 46,014 43,545
Public safety 116 190 284 348
Community development projects
Tourism 280 392 557 670
Parks and recreation 174 569 793 992
Capital projects - other 194 250 872 1,007
Other 113 323 909 238
Total other Governmental Funds $ 31,601 $ 45,109 $ 52,437 $ 50,655
128
2006 2007 2008 2009 2010 2011
$ 84 $ 123 $ 181 $ 119 $ 146 $ 130
126
552 581 4,698 699 117 160
9,961 12,932 8,647 11,401 12,599 14,108
$ 10,597 $ 13,636 $ 13,526 $ 12,219 $ 12,862 $ 14,524
$ 4,658 $ 6,552 $ 6,835 $ 7,246 $ 6,705 $ 5,160
52,957 96,542 110,715 62,467 30,893 23,461
453 591 583 699 612 541
864 1,051 1,247 1,344 1,394 1,452
1,393 1,652 1,183 1,094 1,214 1,143
1,064 1,138 1,346 1,146 962 810
247 114 629 85 79 87
$ 61,636 $ 107,640 $ 122,538 $ 74,081 $ 41,859 $ 32,654
CITY OF PEARLAND, TEXAS
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
Amounts in (000's)
(Modified Accrual Basis of Accounting)
2002 2003 2004 2005
Revenues
Property taxes $ 12,858 $ 15,120 $ 17,891 $ 19,745
Sales and use taxes 5,103 6,008 6,933 8,026
Franchise fees 2,454 2,533 2,883 3,097
Licenses and permits 2,257 2,682 3,441 3,864
Fines and forfeitures 845 1,422 1,608 1,935
Charges for services 3,652 3,982 5,260 6,139
Investment earnings 649 171 1,115 1,863
Intergovernmental 9,001 2,398 3,040 2,382
Other 1,584 1,135 1,076 1,172
Total Revenues 38,403 35,451 43,247 48,223
Expenditures
General government 16,226 5,852 6,221 6,750
Public safety 8,303 9,650 10,142 11,081
Public works 7,604 8,770 8,709 10,450
Community services 2,932 2,827 2,904 2,747
Parks and recreation
Debt service:
Principal 1,920 2,040 3,000 3,535
Interest and other charges 2,374 4,469 5,665 5,555
Capital outlay 12,239 23,568 18,058 28,661
Intergovernmental 1,084
Total Expenditures 51,598 57,176 54,699 69,863
Excess of revenues over (under) expenditures (13,195) (21,725) (11,452) (21,640)
Other Financing Sources (Uses)
Transfers in 4,382 1,534 1,431 4,870
Transfers out (3,752) (806) (907) (4,510)
Bonds issued 38,550 34,653 184 37,015
Payment to Escrow Agent
Capital leases 21,000 271
Other (1,900) 94 (15,926)
Total other Financing Sources (uses) 37,280 35,381 21,802 21,720
Net change in fund balances $ 24,085 $ 13,656 $ 10,350 $ 80
Debt -service as a percentage of noncapital
expenditures 10.9% 19.4% 23.6% 22.1%
130
1
2006 2007 2008 2009 2010 2011
$ 22,150 $ 24,525 $ 29,200 $ 31,349 $ 32,856 $ 33,454
9,980 11,025 12,581 14,218 13,578 13,983
3,426 3,760 4,427 5,075 5,426 5,605
4,067 4,030 2,992 2,079 1,807 1,721
2,038 2,048 2,086 2,325 2,475 2,895
8,734 5,250 7,512 8,885 9,328 11,687
2,991 4,938 4,568 1,375 591 156
7,852 14,463 3,731 7,589 3,689 2,199
1,744 1,815 5,638 8,980 982 1,560
62,982 71,854 72,735 81,875 70,732 73,260
6,381 6,293 7,388 8,412 8,527 10,866
12,870 14,598 19,604 22,310 23,784 23,926
9,728 6,278 7,536 12,051 7,108 6,505
3,787 3,102 3,426 3,386 3,839 3,376
3,358 4,908 6,605 5,789 6,305 7,539
3,429 3,228 3,160 5,482 6,200 8,217
6,771 10,197 12,382 12,080 13,635 13,543
36,706 28,530 27,777 68,615 61,317 25,703
1,684 2,169 3,434 3,250 3,794 3,954
84,714 79,303 91,312 141,375 134,509 103,630
(21,732) (7,449) (18,577) (59,500) (63,777) (30,369)
5,852 4,596 4,912 3,246 3,498 3,525
(4,698) (3,536) (3,582) (2,625) (2,312) (2,050)
41,959 94,559 31,835 8,520 28,962 21,637
(1,630)
1,568 649 2,050 1,289
(8,005) (40,695) 200 (54) 56
35,108 56,492 33,365 9,736 32,198 22,826
$ 13,376 $ 49,043 $ 14,788 $ (49,764) $ (31,579) $ (7,543)
22.0% 37.6% 33.3% 35.5% 40.4% 38.8%
131
CITY OF PEARLAND, TEXAS
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE
OF TAXABLE PROPERTY
Last Six Fiscal Years
Fiscal Tax
Year Year
2006 2005
2007 2006
2008 2007
2009 2008
2010 2009
2011 2010
Notes:
Real Property
Residential
2,689,041,440
3,398,952,580
4,136,844,130
4,535,133,971
4,673,324,896
4,916,409,359
Commercial
$ 1,072,417,312
1,234,444,431
1,463,969,653
1,795,132,850
1,762,831,286
1,833,483,370
Personal Property
Information not presented was not available at time of publication.
Agricultural Property and Productivity Loss in Commercial
Less Tax Exempt
Real Property
$ 309,552,190 $
378,160,330
449,453,570
521,854,047
632,160,830
527,132,210
270,175,010
307,538,080
384,651,183
461,051,494
484,145,515
590,247,297
Assessed valuation for fiscal year 2007 does not include Brazoria County Mud #1 valuation of $241,248,630
that was annexed into the City on December 31, 2006.
Assessed value based on adjusted tax roll at year end.
132
Less Other
Exemptions and
Abatements
$ 224,396,803
291,197,312
275,826,005
486,242,814
315,123,559
355,054,613
Total Taxable
Assessed Value
$ 3,576,439,129
4,412,821,949
5,389,790,165
5,904,826,560
6,269,047,937
6,331,723,029
Total Direct
Tax Rate
$ 0.6744
0.6527
0.6526
0.6526
0.6526
0.6651
Estimated Actual
Taxable Value
$ 3,576,439,129
4,412,821,949
5,389,790,165
5,904,826,560
6,269,047,937
6,331,723,029
Assessed Value as
a Percent of
Actual Taxable
Value
100%
100%
100%
100%
100%
100%
CITY OF PEARLAND, TEXAS
DIRECT AND OVERLAPPING PROPERTY TAX RATES
Last Ten Fiscal Years
(rale per 8100 of assessed value)
City Direct Rates Overlapping Rates
Pearland Pasadena Alvin Harris
Independent Independent Independent Alvin Fort Port of County
Fiscal M & 0 I & S Total School School School Comm Brazoria Bend Harris Houston Flood
Year Rate Rate Direct District District District College County County County Authority Control
2002 $ 0.430 $ 0.256 $ 0.686 $ 1.837 $ 0.241 $ 0.420 $ 0.538 $ 0.360 $ 0.020 $ 0.050
2003 0.406 0.280 0.686 1.837 0.255 0.420 0.513 0.360 0.020 0.050
2004 0.346 0.350 0.696 1.809 0.255 0.420 0.499 0.388 0.020 0.042
2005 0.339 0.356 0.695 1.792 0.241 0.422 0.500 0.400 0.017 0.033
2006 0.345 0.329 0.674 1.792 0.238 0.408 0.517 0.400 0.015 0.033
2007 0.299 0.354 0.653 1.662 $ 1.350 $ 1.546 0.220 0.382 0.517 0.402 0.013 0.032
2008 0.250 0.402 0.653 1.427 1.350 1.328 0.210 0.311 0.517 0.392 0.014 0.031
2009 0.220 0.433 0.653 1.419 1.350 1.328 0.200 0.330 0.500 0.391 0.018 0.031
2010 0.220 0.433 0.653 1.419 1.350 1.304 0.200 0.366 0.500 0.392 0.016 0.029
2011 0.215 0.450 0.665 1.419 1.350 1.304 0.200 0.403 0.500 0.388 0.021 0.029
Source: Brazoria County, Harris County, and Fort Bend County Appraisal District.
134
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CITY OF PEARLAND, TEXAS
TAXABLE SALES BY CATEGORY
Last Ten Calendar Years
(in thousands of dollars)
Agriculture, Forestry, Fishing
Mining, Quarrying, Oil and Gas
Utilities
Manufacturing
Wholesale Trade
Retail Trade
Transportation/Warehousing
Information
Finance, Insurance
Real Estate/Rental/Leasing
Professional/Scientific/Technical
Management of Companies/Enterprises
Admin/Support/Waste Mgmt/Remediation
Educational Services
Health Care/Social Assistance
Arts, Entertainment & Recreation
Accommodations & Food Services
Construction
Other Services (Except Public Admin)
Other
Total
City direct sales tax rate b
Calendar Year
2002 2003 2004 2005
$ 6 $ 13 $ 190 $ 283
4,062 4,283 3,738 2,985
24,365
13,248
240,767
50
2,323
3,095
14,900
2,421
7,760
133
17
3,990
43,421
18,204
13,315
5,546
27,491
11,234
278,527
43
2,851
3,403
14,243
2,743
10,515
195
14
4,283
54,331
14,392
14,500
2,412
29,200
13,059
305,156
54
3,365
3,505
10,722
3,516
2,399
17,880
95
9
4,703
65,708
13,288
15,108
547
41,057
24,070
370,665
55
7,203
1,811
18,629
3,538
2,278
13,688
204
72
4,787
80,185
13,234
16,921
13
$ 397,621 $ 445,474 $ 492,242 $ 601,677
1.00%
1.00%
1.00% 1.00%
Source: State Comptroller's Office.
a 2011 taxable sales thru 2nd quarter of 2011.
b The City direct sales tax rate includes the City only and not the Pearland Economic
Development Corp. (4B).
c Categories changed in 2007. Re -categorized data only available back to 2002.
138
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L
C
r
r
Calendar Year
2006 2007
$ 453
11,186
7
46,241
30,592
464,850
155
8,553
1,722
33,329
3,893
8,060
110
56
5,208
95,154
18,348
20,390
2
$ 473
9,280
3
50,134
28,782
536,352
169
10,086
1,038
44,560
4,103
1,161
9,209
110
63
8,789
107,850
16,232
20,794
2008 2009 2010 2011a
$ 675
10,520
6
47,447
32,999
667,470
138
12,567
1,469
52,276
5,218
2,594
12,656
212
37
9,751
127,994
17,496
23,764
$ 566
3,355
6
31,243
24,613
698,971
161
14,413
1,811
38,836
5,923
11,670
144
52
9,909
145,857
14,372
23,665
$ 180 $ 74
3,246 1,686
3 7
39,582 21,909
26,370 13,010
674,270 326,939
282 198
15,672 7,833
1,404 607
47,085 23,148
6,266 2,900
10,650 5,638
207 110
184 111
10,861 5,586
153,569 82,615
13,939 7,218
24,609 14,001
$ 748,310 $ 849,188 $ 1,025,289 $ 1,025,566 $1,028,379 $ 513,589
1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
139
CITY OF PEARLAND, TEXAS
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
(dollars in thousands, except per capita)
Governmental Activities Business -Type Activities
General Certificates Capital Certificates Capital
Fiscal Obligation of Obligation Lease Revenue of Obligation Lease
Year Bonds Bonds Obligations Bonds Bonds Obligations
2002 $ 13,335 $ 51,585 $ $ 25,570 $ 16,925 $
2003 26,880 70,650 34,485 16,835
2004 25,345 90,185 184 33,505 16,735
2005 60,175 72,390 396 32,480 15,880
2006 90,305 81,275 309 40,170 15,000
2007 164,810 66,220 1,538 79,180 13,915
2008 184,985 74,980 1,187 92,900 13,140
2009 180,765 82,505 1,479 104,435 12,160 235
2010 193,785 92,380 3,237 116,440 10,540 345
2011 207,105 91,150 4,032 113,270 9,730 421
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
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Total Percentage
Primary of Personal Per
Government Income Capita
$ 107,415 9.5% $ 2,492
148,850 10.6% 3,167
165,954 10.3% 3,073
181,321 9.3% 2,895
227,059 11.1% 2,862
325,663 12.4% 3,854
367,192 12.4% 4,126
381,579 13.0% 4,121
416,727 13.5% 4,429
425,708 14.3% 4,380
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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'
2002 2001 $ 81,845 $ 2,230 $ 79,615 5.1% 7.0% $ 1,847
2003 2002 114,365 2,130 112,235 6.0% 8.0% 2,388
2004 2003 132,265 3,008 129,257 6.3% 8.0% 2,394
2005 2004 148,445 3,855 144,590 6.2% 7.4% 2,308
2006 2005 186,580 4,658 181,922 5.1% 8.9% 2,293
2007 2006 244,945 6,552 238,393 5.4% 9.1% 2,821
2008 2007 273,105 6,552 266,553 4.9% 9.0% 2,995
2009 2008 275,430 7,247 268,183 4.5% 9.1% 2,896
2010 2009 296,705 6,706 289,999 4.6% 9.4% 3,082
2011 2010 307,985 5,160 302,825 4.8% 10.2% 3,115
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
a Population data can be found in demographic and economic statistics table.
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CITY OF PEARLAND, TEXAS
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
September 30, 2011
Gross Overlapping
Taxing Jurisdiction Debt * Percent Amount
Alvin Community College District $16,960,000 27.17% $ 4,608,032
Alvin ISD 325,285,000 30.89% 100,480,537
Brazoria County 61,340,000 24.40% 14,966,960
Brazoria County MUD No. 17 30,145,000 100.00% 30,145,000
Brazoria County MUD No. 18 30,620,000 97.35% 29,808,570
Brazoria County MUD No. 19 37,815,000 100.00% 37,815,000
Brazoria County MUD No. 23 18,940,000 100.00% 18,940,000
Brazoria County MUD No. 26 53,490,000 100.00% 53,490,000
Brazoria County MUD No. 28 13,610,000 100.00% 13,610,000
Brazoria County MUD No. 34 12,920,000 100.00% 12,920,000
Brazoria County MUD No. 35 9,580,000 100.00% 9,580,000
Brazoria-Fort Bend County MUD No. 1 54,305,000 73.76% 40,055,368
Fort Bend County 452,755,000 0.22% 996,061
Harris County (a) 2,874,566,628 0.13% 3,736,937
Harris County Dept. of Education 7,980,000 0.13% 10,374
Harris County Flood Control District 102,539,024 0.13% 133,301
Pasadena ISD 417,965,000 0.14% 585,151
Pearland ISD 323,230,930 71.72% 231,821,223
Port of Houston Authority 763,619,397 0.13% 992,705
TOTAL ESTIMATED OVERLAPPING 604,695,218
The City
$307,985,000 100.00% 307,985,000
Total Direct and Estimated Overlapping Debt $ 912,680,218
Population 97,200
Per Capita Debt - Direct and Overlapping Debt $ 9,390
Source: Individual jurisdictions and/or Texas Municipal Reports.
* Debt amounts are as of September 30, 2011.
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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
2002 $ 9,037 $ 5,244 $ 3,793 $ 575 $ 1,159 $ 1,734 2.19
2003 9,023 6,282 2,741 980 1,635 2,615 1.05
2004 12,357 10,877 1,480 1,025 1,504 2,529 0.59
2005 11,619 8,607 3,012 1,075 1,459 2,534 1.19
2006 15,004 11,228 3,776 1,125 1,829 2,954 1.28
2007 20,713 12,151 8,562 1,125 2,915 4,040 2.12
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
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.
144
CITY OF PEARLAND, TEXAS
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Education
Per Capita level in School
Fiscal Population Personal Income Personal Median Years of Enrollment Unemployment
Year (A) (in $000's) Income (B) Age (B) Schooling (C) Rate (D)
2002 43,103 $ 1,133,868 $ 26,306 34.0 14.3 11,723 4.3%
2003 47,000 1,400,741 29,803 35.1 14.3 12,708 4.7%
2004 54,000 1,609,362 29,803 35.1 14.3 13,600 4.5%
2005 62,634 1,951,801 31,162 35.5 14.3 15,023 4.6%
2006 79,322 2,050,394 25,849 33.4 14.3 16,629 3.6%
2007 84,500 2,631,837 31,146 34.9 14.3 17,733 3.6%
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%
(A) Estimated
(B) Pearland Economic Development Corporation
(C) Texas Education Agency
(D) Bureau of Labor Statistics
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CITY OF PEARLAND, TEXAS
PRINCIPAL EMPLOYERS
Current Year and Six Years Ago
Emnloyer
2011 2005
Percentage Percentage
of Total City of Total City
Employees Rank Employment Employees Rank Employment
Pearland ISD 2,212 1 4.85% 1,820 1 7.26%
Wa1-Mart 1,185 2 2.60% 800 2 3.19%
City of Pearland 619 3 1.36% 420 3 1.67%
Kemlon 370 4 0.81% 185 6 0.74%
HEB 350 5 0.77%
Home Depot 230 6 0.50%
Bredero Shaw 225 7 0.49%
Bass Pro Shop 200 8 0.44%
Packaging Service Co, Inc. 200 9 0.44%
Texas Honing 178 10 0.39%
TurboCare 175 0.38% 175 7 0.70%
Weatherford 80 0.18% 250 4 1.00%
Randall's 250 5 1.00%
Super Target 150 8 0.60%
Tele-flow 140 9 0.56%
Lowes 132 10 0.53%
Total 6,024 13.21% 4,322 17.23%
Sources:
2005 Pearland Economic Development Corp.
2011 Pearland Chamber of Commerce
Note: Information for the period nine years ago is not readily available.
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CITY OF PEARLAND, TEXAS
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Full-time Equivalent Employees as of Sept 30
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Function/Program
Governmental Activities
General Government 37 45 41 42 49 51 55 55 57 57
Public Safety 132 132 160 170 184 205 242 253 264 276
Public Works 32 41 42 43 44 47 45 47 47 45
Community Services 26 34 37 41 47 50 51 52 47 45
Parks and Recreation 50 52 55 58 52 59 68 72 99 105
Business Type Activities
Water & Sewer 51 56 62 62 76 78 77 82 82 87
Component Unit
Economic Development 4 4 4 4 4 4 5 5 6 5
Total 332 364 401 420 456 494 543 564 601 619
Source: City Budget
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CITY OF PEARLAND, TEXAS
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Nine Fiscal Years
Fiscal Year
2003 2004 2005 2006 2007
Function/Program
GENERAL GOVERNMENT
Finance
Number of purchase orders 3,953 3,667 3,183 3,085 3,475
Number of budget transfers 61 82 117 226 194
Number of invoices paid N/A N/A 21,180 22,438 22,279
Average number of employees paid per month 764 848 930 984 1,026
Human Resources
Number of hires 69 58 77 95 97
Number of interviews conducted 320 292 333 360 449
Number of applications received 2,318 2,541 3,138 2,808 3,074
Legal
' Number of resolutions and ordinances prepared 261 268 234 295 269
Information Technology
Average monthly service requests 275 300 350 370 486
Number of PC's supported 175 185 205 220 354
PUBLIC SAFETY
Police
Fire
EMS
Number of police calls resulting in dispatch 23,706 25,849 27,443 30,496 32,747
Total police arrests made 4,234 4,222 3,753 4,809 5,053
Dispatched calls per patrol officer 677 680 704 555 544
Commercial vehicles equipment violations 991 1,104 1,015 1,069 980
UCR Part I cases assigned (1) 398 398 418 366 371
Total number of arson incidents 8 6 4 11 21
Fires investigated 33 71 70 120 96
Total annual inspections 300 1,059 965 1,307 2,333
Total calls for service 644 889 1,168 1,188 1,202
Total calls for service
Patients treated
N/A 3,297 3,941 4,290 5,372
2,858 3,124 3,848 4,048 4,983
PUBLIC WORKS
Fleet Maintenance
Fleet maintenance jobs completed 3,593 3,850 3,950 4,778 4,686
Preventative maintenance performed 1,348 1,501 2,251 1,815 1,889
Other Public Works
Fuel issued (gallons) 143,686 183,000 220,000 303,930 318,587
Street sweeping (miles) 145 790 790 790 583
Street signs maintained/replaced 865 758 1,170 1,725 1,404
Total work orders completed 15,463 16,888 19,327 21,181 19,961
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2008 2009 2010 2011
3,552 3,264 2,913 2,679
398 406 470 427
23,434 23,259 21,632 21,000
1,185 1,230 1,220 1,438
109 90 91 131
353 431 532 73
2,495 3,137 3,880 3,299
293 266 229 205
616 649 734 815
386 394 429 439
34,865 37,440 35,676 39,815
4,424 5,188 5,986 6,218
592 576 513 606
860 711 672 852
349 629 2,003 3,304
9 8 5 2
28 33 22 25
2,677 2,374 1,752 1,380
2,215 2,432 2,416 2,621
6,029 6,411 6,472 7,055
5,529 5,804 5,619 6,121
4,153 3,063 2,394 3,410 -
1,756 1,998 1,741 747
343,865 313,596 354,422 361,464
2,324 2,561 2,239 1,256
1,288 2,864 2,049 1,588
18,723 20,213 18,632 16,834
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CITY OF PEARLAND, TEXAS
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Nine Fiscal Years
Fiscal Year
2003 2004 2005 2006 2007
PARKS AND RECREATION
All Parks and recreation
ROW maintained - acres 760 N/A N/A 478 385
Trees maintained N/A N/A 3,450 3,450 4,280
Acres of city property mowed N/A N/A N/A 167 439
Total number of parkwork orders received N/A N/A N/A 227 361
Parkland - acres (2) N/A N/A N/A 175 175
Total number of special events held 24 23 24 20 25
Total number of tournaments held N/A N/A N/A 19 25
Number of recreation classes offered (3) N/A 632 1,170 1,189 1,222
Average monthly attendance (all locations) (4) 2,543 5,211 5,977 6,723 7,988
COMMUNITY SERVICES
Animal Control
Number of animals at shelter
Total number of calls for service
Inspection Services
Total building inspections
Total code violation cases
Total permits issued
Number of plans reviewed
Municipal Court
Number of trials
Number of charges
Warrants cleared
2,357 1,834 2,228 2,898 3,068
3,721 3,535 5,443 4,600 6,099
35,007 44,973 53,924 36,724 31,004
5,242 3,687 2,792 2,739 3,962
11,515 13,738 15,289 14,889 13,769
2,136 2,482 3,026 2,682 3,055
1,667 2,195 2,800 1,952 2,305
24,494 20,964 18,275 22,185 20,481
N/A N/A N/A N/A 3,596
WATER & SEWER
Distribution and Collection
Fire hydrant maintenance and inspections (5) 1,730 1,730 1,967 99* 537
Backed up sewer repairs 313 261 278 251 330
Water mains repaired 29 37 71 129 108
Water Production
Water produced - wells
(in millions of gallons) 1,465 1,850 1,925 2,044 1,597
Surface Water Purchased
(in millions of gallons) 118 280 683 967 1,121
Billing & Collections
Annual meter reads N/A N/A 211,956 234,875 285,930
Number of bills 146,055 N/A 192,014 248,848 293,833
Wastewater Treatment
Wastewater treated
(in millions of gallons) 1,467 1,386 1,398 1,668 2,305
Sources: Various city departments.
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2008 2009 2010 2011
210 228 245 255
5,000 5,004 5,800 6,327
470 851 1,301 1,331
316 275 252 249
180 138 139 139
25 25 24 21
9 6 9 11
1,083 855 307 459
7,607 3,623 11,823 16,116
2,947 2,868 2,532 2,685
4,296 3,529 4,206 4,346
34,773 24,834 21,753 19,244
3,629 4,274 3,433 2,860
9,878 9,249 7,874 7,869
1,309 925 969 917
1,616 1,391 402 688
19,666 24,400 24,657 26,369
6,402 7,374 8,692 8,204
740 451 402 395
393 270 325 310
160 168 82 410
2,128 2,574 3,065 3,869
1,147 1,146 634 968
325,471 340,281 344,618 364,424
318,160 325,201 336,668 350,871
2,096 2,106 2,361 1,943
IUCR 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.
During
FY06, the contractor's services were disrupted by a
storm.
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CITY OF PEARLAND, TEXAS
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last Nine Fiscal Years
Fiscal Year
2003 2004 2005 2006 2007 2008 2009 2010 2011
Function/Program
PUBLIC SAFETY
Police
Police stations 1 1 1 1 1 1 1 1 1
Police vehicles 89 100 109 112 117 126 130 138 142
Fire
Fire stations 4 4 4 4 4 4 4 4 5
Fire vehicles 14 15 15 16 16 17 17 17 22
EMS
EMS Stations 3 3 3 3 3 3 3 3 3
EMS Ambulances 5 5 5 5 5 6 8 8 8
PUBLIC WORKS
Other public works
Streets (miles)* 202 232 248 578 758 773 807 807 806
Streetlights 3,425 3,425 3,494 3,563 5,294 5,479 5,479 5,479 7,533
Traffic signals 43 43 47 48 57 67 71 80 62
PARKS AND RECREATION
Parks and recreation
Developed acreage** 124 124 124 175 175 180 138 139 139
Pools N/A 1 1 1 1 1 1 3 3
Outdoor basketball courts N/A N/A N/A 10 10 10 10 10 10
Soccer fields N/A N/A N/A 12 12 12 12 12 12
Activity buildings 2 2 3 3 3 3 3 4 4
Baseball/Softball Fields 4 4 4 4 4 4 4 4 4
WATER AND SEWER
Water Production
Water wells 8 8 9 9 10 11 11 11 11
Pumping stations 2 2 2 2 2 2 2 2 2
Ground storage tanks 10 10 13 15 15 15 15 15 15
Elevated towers 4 4 4 5 5 5 5 6 6
Wastewater
Treatment Plants 4 4 4 4 5 5 5 5 5
Lift Stations 74 74 78 74 78 76 78 78 80
Distribution and Collection
Water mains (miles) 240 250 296 361 395 410 420 433 443
Sanitary sewers (miles) 230 240 279 321 353 360 370 378 380
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.
**Prior to 2009, Parkland acres included medians and Wastewater Treatment Plants.
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