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<br />26
<br />
<br />Regular Meeting
<br />
<br />March 28, 1988
<br />
<br />Page 5
<br />
<br />Significant events that have taken place in the last year were the
<br />purchase of the electric system from LCRA for $16 million of debt,
<br />refunding of $5.7 million in water and sewer debt, the issuance of
<br />$2.1 million in general obligation debt and the addition of $2.6 mil-
<br />lion in general fixed assets, and actually doubled the complete
<br />utility system. Total fixed assets after acquisition of LCRA was
<br />$46 million, which put a dramatic impact on the financial structure
<br />of the City. The transmittal letter emphasizes some of the important
<br />events of the year, including the City earned $1.6 million in inter-
<br />est, which served to reduce taxes and fees, the purchase of the elec-
<br />trical system, the attrition policy eliminating 18 positions and the
<br />impact of the 1/2 cent increase in sales tax. The statistical tables
<br />reflected that property taxes make up 59% of the tax revenue in the
<br />general fund, sales tax makes up 26% and franchise 12%. Mr. Laine
<br />stated the State of Texas is in a recession and that the City's cur-
<br />rent collection of property taxes are 82% of the assessed taxes, being
<br />approximately 3% less than what we have experienced in the past, and
<br />total collections, which are current and delinquent, are approximately
<br />97%. This is the first time the City has been below 100% of the total
<br />assessed taxes, which is a phenomenon being experienced throughout the
<br />State of Texas, and is an area that needs to be worked on and looked at
<br />more closely. In the financial section of the audit in the general fund
<br />under cash and savings on the balance sheet the City had $2.2 million
<br />on deposit in the general fund, $412,000 less than the previous year;
<br />$3.6 million in total assets, $82,000 less than the previous year; to-
<br />tal liabilities $945,000, being $183,000 less than the previous year;
<br />undesignated fund balance $1.6 million, $470,000 less than the previous
<br />year but represents three months of budgetary requirements as recommend-
<br />ed; designated fund balance $347,000, compared to $56,000 the previous
<br />year; landfill account $154,000; tourism account, which is the hotel/
<br />motel occupancy tax (7% to Chamber; 3% designated for a tourism fund)
<br />tourism fund $317,000; with;total revenues in the general fund $7 mil-
<br />lion. Under general government the expenditures were $3.2 million
<br />(budgeted $3.3 million), which is $125,000 less than budgeted; public
<br />safety $2.6 million (budgeted $2.8 million); total expenditures $7.5
<br />million ($7.9 million budgeted) with a favorable total expenditures
<br />of $404,000. The City's excess of revenues over expenditures were
<br />$571,000 under, and the expenditures exceeded the revenues by $571,000
<br />(but had budgeted $1,035,000). The City was $463,000 favorably under
<br />budget. The enterprise funds on the balance sheet totals $45 million
<br />with total liabilities $31 million; the fund equity totals $14 million.
<br />Under extraordinary loss there is a $1,108,000 loss under the water and
<br />sewer column asa result of the City's bond refunding. This is an ac-
<br />counting loss rather than an economic loss, and over the 15-year period
<br />there is actually an economic gain of $293,000. Gary Davis reviewed
<br />the single audit report listing the grant activity. Mr. Davis indicated
<br />the City has some unique accounting problems to address regarding the
<br />acquisition of the utility, wherein a portion is accounted for by LCRA
<br />and a portion here with the City's finance staff charged with the respon-
<br />sibility of consolidating the financial information and making the reports
<br />in a timely manner. He stated they were trying to formalize plans to re-
<br />duce some of the inefficiencies in this and to set up the minimum number
<br />of funds and account groups. He stated there was now a full staff to
<br />address concerns of protection of assets with cash controls and segre-
<br />gation of duties. He stated with the stability of staff there could be
<br />an establishment of an internal audit function to perform surprise cash
<br />account, reconciliations of deposits and some audits of self-assessed
<br />taxes and hotel/motel oc~ancy tax, etc. Mr. Davis stated the software
<br />associated with accounting for general fixed assets is not functioning
<br />properly and needs to be totally revamped or look at another system. He
<br />stated this was very important, specifically associated with the proprie-
<br />tary funds. The system needs to be compatible and be able to interface
<br />with the general ledger activity, and that this was the major restriction
<br />of the present system. Donna Farley advised that we have recently pur-
<br />chased a software system from HMS with a fixed assets system and that
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