C.A.F.R., FY 2004-05
COMPREHENSIVE ANNUAL FINANCIAL
REPORT
FOR
CITY OF PARIS, TEXAS
For the Fiscal Year Ended September 30, 2005
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Prepared By
Finance Department
W.E. Anderson, Director
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City of Paris, Texas
Comprehensive Annual Financial Report
For the Fiscal Year Ended September 30,2005
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal. .............................................................. 1-1
GFOA Certificate of Achievement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-7
City Organization Chart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , 1-8
List of Elected and Appointed Officials. .............................................. 1-9
Page
FINANCIAL SECTION Statement
Independent Auditors' Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Management's Discussion and Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statement of Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fund Financial Statements:
Balance Sheet - Governmental Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds. . .
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balances of Governmental Funds to the Statement of Activities. . . . . . . . . . . . . . . . . . . . . . . . .
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - General Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statement of Net Assets - Proprietary Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds. . . . . .
Statement of Cash Flows - Proprietary Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances-
Nonmajor Governmental Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedules of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual:
Criminal Justice Grant Special Revenue Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Community Development Block Grant Special Revenue Fund. . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Revenue Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Health Department Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt Service Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital Projects Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital Assets Used in the Operation of Governmental Funds:
Comparative Schedule by Source. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule by Function and Activity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule of Changes by Function and Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15 1
17 2
19 3
20 4
22 5
23 6
25 7
27 8
28 9
30
Schedule
58
60 2
62 3
63 4
64 5
65 6
66 7
67 8
68 9
69 10
71 11
City of Paris, Texas
Comprehensive Annual Financial Report
For the Fiscal Year Ended September 30,2005
TABLE OF CONTENTS (Continued)
STATISTICAL SECTION
Government-wide Information:
Government-wide Expenses by Function. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Government-wide Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fund Information:
General Governmental Expenditures by Function. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General Governmental Revenues by Source. . . . . . . . . . . . . . 0 . . . . . . . . . . . . . . . . . . . . . . . . . . .
General Governmental Tax Revenues by Source. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 . . . . . . .
Property Tax Levies and Collections. . . . . . . . 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 . . . . . . .
Assessed and Estimated Actual Value of Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property Tax Rates - All Direct and Overlapping Governments. . . . . . . . . 0 . . 0 . . . . . . . . . . . . . . .
Principal Taxpayers. . . . . . 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales Tax Received. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computation of Legal Debt Margin. . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . .
Ratio of Net General Obligation Bonded Debt to Assessed Value and
Net General Obligation Bonded Debt Per Capita. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt
to Total General Governmental Expenditures. . . . . . . . . 0 . . . . 0 . . . . . . . . . . . . . 0 . . . . . . . . . . . .
Computation of Direct and Overlapping Bonded Debt - General Obligation Bonds. . . . . . . . . .
Revenue Bond Coverage - Water and Sewer Revenue Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Demographic Statistics. . . . . . . . . . . . . . . . . . . . . . 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property Value, Construction, and Bank Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utility Connections. . . . . . . . . . . . . . . . . . . . . . . . 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Miscellaneous Statistics .........................................................,
CONTINUING DISCLOSURE INFORMATION (Unaudited)
Continuing Disclosure Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Page
Table
72 1
74 2
76 3
78 4
80 5
81 6
83 7
85 8
86 9
87 10
89 11
90 12
91 13
92 14
93 15
94 16
95 17
97 18
98 19
City of Paris, Texas
Comprehensive Annual Financial Report
For the Fiscal Year Ended September 30,2005
TABLE OF CONTENTS (Continued)
Page
8VERALL COMPLIANCE, INTERNAL CONTROLS,
AND FEDERAL AND STA TE AWARDS SECTION
Federal:
Report on Internal Control Over Financial Reporting and on Compliance and Other
Matters on an Audit of Basic Financial Statements Performed in Accordance with
Government Auditing Standards. . . . . 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 . . . . . . . . 108
Summary Schedule of Prior Audit Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 . . 109
Schedule of Findings and Questioned Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Corrective Action Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Report on Compliance with Requirements Applicable to Each Major Program and on
Internal Control Over Compliance in Accordance with OMB Circular A-133. . . . . . . . . . . . . . . . 113
Schedule of Expenditures of Federal Awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Notes on Accounting Policies for Federal A wards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Schedules of Revenues and Expenditures:
Home Program - Home Buyers Assistance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
1999 Housing Infrastructure Fund Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Community Development Block Grant - Housing Rehabilitation Program. . . . 0 . . . . . . . 0 . . . . 120
State:
Report on Compliance with Requirements Applicable to Each Major Program and on
Internal Control over Compliance in Accordance with State of Texas Single Audit Circular. . . 121
Summary Schedule of Prior Audit Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Schedule of Findings and Questioned Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Corrective Action Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Schedule of Expenditure of State Awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Notes on Accounting Policies for State Awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
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INTRODUCTORY SECTION
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December 31, 2005
Honorable Mayor Curtis Fendley
and Members of the City Council
City of Paris, Texas
Dear Mayor and Council Members:
I am pleased to submit the Comprehensive Annual Financial Report of the City of Paris, Texas, for the fiscal year ended
September 30, 2005.
The City of Paris is a financial reporting entity as defmed by the Government Accounting Standards Board codification
section 2100. As such, it has a separately elected governing body chosen by its citizens in a general, popular election, is a
legally separate primary government, and is fiscally independent of other state and local governments. The fmancial
reporting entity includes all the funds of the primary government and its component unit.
The primary purpose of this report is to provide the City Council, citizens, fmancial community, and others with detailed
information concerning the fmancial condition and performance of the City of Paris. It is strongly recommended that any
user of this report read the Management Discussion and Analysis included in the fmancial section of the report. In addition,
this report provides assurance that the City presents fairly its fmancial position as verified by independent auditors.
THE COMPREHENSIVE ANNUAL FINANCIAL REPORT
The Comprehensive Annual Financial Report of the City of Paris, Texas, for the fiscal year ended September 30, 2005,
which follows, was prepared by the Finance Department. The fmancial statements have been audited by McClanahan and
Holmes, LLP, CPAs, whose report is included herein. This audit satisfies Article III, Section 35 of the City Charter which
requires that an annual audit of all accounts of the City be made by an independent certified public accountant. Additionally,
the compliance features of the City's federal and state grant programs for the year ended September 30, 2005, were audited
by the firm of McClanahan and Holmes, LLP, CP As. Its compliance reports are available under the Overall Compliance,
Internal Controls, and Federal and State Awards Section of this report.
The City Finance Department is responsible for both the accuracy of the presented data and the completeness and fairness of
the presentations, including all disclosures. I believe the data presented is accurate in all material aspects and is presented in
a manner which fairly sets forth the fmancial position and results of operations of the City. Furthermore, I believe that all
disclosures necessary to enable the reader to gain maximum understanding of the City's fmancial activity have been included.
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P.o. BOX 9037 . PARIS, TEXAS 75461.9037 · (903) 785.7511 · FAX (903) 785.8519
The [mancial statements have been prepared in accordance with generally accepted accounting principles as prescribed by
the Governmental Accounting Standards Board (GASB).
This Comprehensive Annual Financial Report consists of five parts:
1. The Introductory Section includes an organizational chart, list of elected and appointed officials, and this
transmittal letter, which highlights significant aspects of the [mancial operations during the year and
particular issues faced by the City.
2. The Financial Section includes the independent auditors' report, management's discussion and analysis,
[mancial statements and related notes, and supplemental [mancial data.
3. The Statistical Section includes several tables of unaudited data depicting the fmancial history of the City, as
well as demographic information of other governmental units overlapping the City and other miscellaneous
statistics.
4. The Continuing Disclosure Information Section contains nineteen tables of [mancial information required by
the United States Securities and Exchange Commission Rule 15c2-12. These tables provide investors with
updated information on all municipal bond issues sold after July 3, 1995.
5. The Overall Compliance, Internal Controls, and Federal Awards and State Awards Section contains a
Schedule of Expenditures of Federal Awards and a Schedule of Expenditures of State Awards, as well as
auditors' reports and other information.
The Notes to the Financial Statements are provided in the Financial Section and are considered essential to fair presentation
and adequate disclosure for this [mandai report. The notes include the Summary of Significant Accounting Policies for the
City and other necessary disclosures of important matters relating to the fmancial position of the City. The notes are treated
as an integral part of the fmancial statements and should be read in conjunction with them
General Information Regarding the City and Surrounding County
The City of Paris is the county seat and principal commercial center of Lamar County and is located at the intersection of
United States Highways 271 and 82, approximately 100 miles northeast of Dallas near the Red River. The City is served by
8 banks. The City's 2000 census is 25,898 an increase of 4.85% from the 1990 census of 24,699.
Lamar County (the County) is located in northeast Texas and borders the State of Oklahoma. The County, which is situated
between the Red River and the Sulphur River, is traversed by United States Highways 271 and 82, State Highways 19 and
24, and 32 farm-to-market roads. The County's 2000 census is 48,499, an increase of 7.77% over the 1990 census of 45,000.
The City is a regional medical center serving patients in Northeast Texas and Southeast Oklahoma. Founded in 1911 as St.
Joseph's Hospital, Paris Regional Medical Center is a 364 bed medical center. It is part of the Essent Health System Both
the north and south campuses operate fitness centers that offer a wide range of exercise programs and equipment. It
compliments the City's 130 doctors and 21 dentists that provide a wide range of general and special medical services.
The City provides utilities through its 36 MGD water plant and 7.25 MGD wastewater plant. Electric power is supplied to
Paris by TXU Electric's interconnected transmission system It has a generating capacity of 22,808,000 KW. The supply of
electric power is adequate to meet the requirements of any commercial or industrial demand. Atmos Energy provides natural
gas for residential, commercial, and industrial users. Atmos Energy is the largest provider of pure natural gas in America. It
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provides service to over three million customers in 12 states. There are 3 transmission lines serving the City with a line
pressure of300 pounds per square inch. Telephone service is provided by SBC Texas.
Educational facilities of the City are provided by 3 independent school districts. Each of the districts is accredited by the
Texas Education Agency. Higher education needs in the bOunty are provided at Paris Junior College located in the City.
Total enrollment of these entities is 15,595.
Tourists are attracted to the area by activities on Lake Crook and Pat Mayse Reservoir. Pat Mayse Reservoir is located 15
minutes from the City and provides 6,000 acres for boating, fishing, and camping. The Gambill Goose Refuge and numerous
hunting and fishing areas are also located in the County. Other points of interest and activities include the Flying Tigers Air
Museum, the A.M. Aikin Archives, Red River Valley Exposition, and an antique automobile rally.
Also, the City has 3 l8-hole golf courses, 4 private and 1 public swimming pool, 26 tennis courts, 3 walk/jog tracks, a newly
completed sports complex, and 13 public parks.
Government Organization
The City was incorporated in 1836 with the current charter adopted in November of 1948. The City operates under the
Council/Manager form of government with 7 council members elected from single member districts. The Mayor is elected
by the Council itself to serve as moderator of the group. The Council members serve 2 year staggered terms. The Mayor
and Council appoint the City Manager, the City Attorney, and the Municipal Judge. The City is a Home Rule City with all
powers granted to home rule cities by the constitution and laws of the State of Texas. The Council enacts legislation, adopts
budgets, and determines policies of the City of Paris. The City Manager executes the laws and administers the government
of the City.
Economic Condition and Outlook
Current taxable values for fiscal year 2005-2006 reflect a 2.43% decrease over the 2004-2005 values. This decrease was due
to the reappraisal of certain commercial or industrial property. Building permits for new residential and commercial
construction totaled $20,242,658 for fiscal year 2004-2005. This activity should be reflected in next year's taxable values.
Sales taxes for 2004-2005 increased from the prior year by 5.67%. Current rebates are 8.81 % above the 2004-2005 rebates
through December 2005.
Hotel occupancy taxes were up 3.99% compared to 2003-2004 taxes. This increase in activity is an additional sign that the
local economy is growing stronger.
Franchise fees increased 24.23% due to settlement of a disputed amount with a local natural gas provider. This area is a
major source of revenue to the City and is aggressively guarded by City officials.
The Paris Economic Development Corporation is working hand in hand with the Lamar County Chamber of Commerce to
recruit new business to the area as well as supporting already existing businesses.
General Fund receipts equaled 106.68% of budget. Expenses did not exceed total budget appropriations. General Fund
expenditures were only 98.53% of budget.
For the 2005-2006 fiscal year, the City Council adopted a tax rate of 69.225 cents per $100 of value. This rate allows
maintaining all services at their current levels or above and funds the interest and sinking fund for the certificates of
obligation issued in 2000, 2002, and 2003.
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At the end of September 2005, Paris' unemployment rate was 7.0% compared to 6.5% at the same time last year. By October
2005, the unemployment rate had dropped to 5.9%.
Major Initiatives
The City of Paris continues to work in environmentally related areas. Since 1984 over $50 million has been spent on water
and wastewater improvements. The City has begun work on formulating a new long range plan to maintain its infrastructure.
The City also continues to expand its effort in law enforcement related areas. Specifically, the City has targeted prevention
efforts with local youth. Programs in this effort include the Police Athletic League, school resource officers, and the DARE
program. Other continuing law enforcement programs include a regional drug task force, auto theft task force, and the
violent crimes against women program.
From a development standpoint the City has taken several steps. Reentry into the State of Texas Main Street Program should
channel additional funds for revitalization of existing structures and businesses. The City continues to work closely with the
Paris Economic Development Corporation to attract new business to Paris and to support existing businesses as well.
Working with the Chamber of Commerce, the City is effectively using the new civic center to attract people and business to
Paris. City officials are also closely working with Keep Paris Beautiful, Inc. to promote and improve the City. The newly
created Historic Preservation Committee is working with local property owners to maintain the historical character of the
City.
Financial Information
The fmancial statements of the City of Paris, Texas, have been prepared in conformity with generally accepted accounting
principles as applied to governmental units. The Governmental Accounting Standards Board is the accepted standard-setting
body for establishing governmental accounting and fmancial reporting principles. Using the GASB 34 reporting model, the
City's Comprehensive Annual Financial Report provides for management discussion and analysis, government-wide
fmancial statements, major fund fmancial statements, notes to the [mancial statements, and other required supplementary
information.
Cash ManagementlInvestments
The City has a written investment policy that conforms to state statutes, which outlines permissible investments. The City
pools its cash balances for investment purposes from the various funds maintained in its consolidated cash account. Interest
earnings of the pool are allocated to the various funds of the City based upon a fund's equity position in the pool.
Risk Management
The City of Paris' primary risk exposures are in the areas of workers' compensation and tort liability. Provision for these
risks is made through participation in the Texas Municipal League's risk pool.
Budgetary Control
Between 30 days and 90 days prior to the beginning of each fiscal year, the City Manager submits to the City Council a
proposed budget for the fiscal year beginning on the following October 1. The operating budget, which represents the
financial plan for the ensuing fiscal year, includes proposed expenditures and the means of fmancing them. Public hearings
are conducted at which all interested persons' comments concerning the budget for the next fiscal year are heard. The budget
is legally enacted by the City Council through passage of an ordinance not later than the 27th day of the last month prior to
the beginning of the fiscal year.
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Generally, appropriations are legally adopted at the department level. Budgetary controls are maintained at the major
category of expenditure level within each operating division. All anticipated expenditures are budgeted for control purposes.
Capital project funds are appropriated on a project by project basis. Expenditures and/or expenses are directly monitored by
the City Council.
Internal Controls
Internal accounting controls are designed to provide reasonable, but not absolute, assurance of the safeguarding of assets
against loss from unauthorized use or disposition and reliable financial records for preparing fmancial statements an~
maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not
exceed the benefits likely to be derived.
All internal control evaluations occur within this framework. The Finance Department's staff believes the City's internal
control structure adequately ensures compliance with laws and regulations and reasonable assurance for safeguarding of
assets.
Debt
The following schedule outlines the outstanding City debt as of9-30-05:
Moody's
Tax Revenue Final Investors
Issue Supported Supported Maturity Rating
1997 W & S Revenue Bonds $ $ 3,595,000 06-15-16 Aaa
1998 Tax & Revenue Refunding Bonds 4,340,000 12-15-11 Aaa
1998 W & S Revenue Refunding Bonds 5,165,000 12-15-11 Aaa
2000 Tax & Revenue C.O. 5,145,000 12-15-19 Aaa
2000 W & S Revenue Bonds 8,705,000 06-15-20 Aaa
2001 Tax & Revenue Refunding Bonds 3,785,000 06-15-12 A2
2002 Tax & Revenue Bonds 5,435,000 12-15-21 Aaa
2003 General Obligation Refunding Bonds 6,660,000 12-15-14 Aaa
Total $ 17,240,000 $ 25,590,000
The City has various lease/purchase agreements outstanding for the purpose of acquiring certain equipment items with the
minimum lease payments amounting to $238,734. The last of these leases ends in the year 2009.
A $120,600 note payable for the construction of aircraft hangars and associated appurtenances at the City's Cox Field was
obtained February 27, 1991. The note bears an interest rate of 5% with principal and interest payments made in annual
installments. The current principal outstanding is $49,119.
Independent Audit
The City Charter requires an annual audit to be made of the accounts, fmancial records, and transactions of all administrative
departments of the City by a certified public accountant selected by the City Council. The requirement has been complied
with, and the Independent Auditors' Report has been included in this report.
In addition, an audit was performed in accordance with the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States, and the provisions of Office of Management and
Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and Texas Single Audit
Circular. The Report and Auditors' opinion may be found under the Overall Compliance, Internal Control, and Federal and
State Awards Section of this report. 1-5
The City was found to have administered each of its major federal awards programs in compliance in all material respects.
Awards
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the City of Paris for its comprehensive annual [mancial report (CAFR)
for the fiscal year ended September 30, 2004. The Certificate of Achievement is a prestigious national award recognizing
conformance with the highest standards for preparation of state and local government [mancial reports.
In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently
organized comprehensive annual [mancial report, whose contents conform to program standards. The CAFR must satisfy
both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only, We believe our current report continues to conform to
the Certificate of Achievement program requirements, and we are submitting it to GFOA.
Acknowledgments
The preparation of this report could not have been accomplished without the full support and efficient and dedicated efforts
of the entire staff of the Finance Department and the competent services of the independent auditors, McClanahan and
Holmes, LLP, CP As. I express my appreciation to all members of the Finance Department who assisted and contributed to
the completion of this report and to all City Departments involved in the preparation of information for this report. In
addition, I express my appreciation to the Mayor, City Council, and City Manager for their continuing interest and support in
planning and conducting the fmancial affairs of the City in a responsible and progressive manner.
Respectfully submitted,
1J.[.~
W. E. Anderson
Director of Finance
1-6
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Paris,
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2004
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 fmancial reporting.
f(~x~
President
f#r/~
Executive Director
1-7
City of Paris, Texas
City Organization Chart
mda CITIZENS OF PARIS
CITY COUNCIL
CITY ATTORNEY MUNICIP At JUDGE
I
CITY MANAGER MUNICIPAL COURT
I , I I
FIRE POLICE COMMUNITY
CITY CLERK DEVELOPMENT AIRPORT LIBRARY
I I
E,M.S. UTILITIES FINANCE
I I
I I I 1
WATER WASTE WATER ACCOUNTING/ UTILITY BILLING/
TREATMENT TREATMENT LIFT STATIONS AUDITING COLLECTION PURCHASING
PUBLIC WORKS/ENGINEERING
I I I
WASTE WATER PARKS/
COLLECTION RECREATION TRAFFIC
WATER
DISTRIBUTION SOLID WASTE STREETS GARAGE
1-8
City of Paris, Texas
List of Elected and Appointed Officials
Elected Officials
Curtis Fendley - Mayor
Richard Manning - Mayor Pro-Tern
Mary Ann Fisher
Rick Poston
Tim Ray
Karen Wilkerson
Don Wilson
Appointed Officials
Tony Williams - City Manager
Larry Schenk - City Attorney
W. E. Anderson - Finance Director
Stacy S. Napier - City Engineer/Public Works Director
Jon Clack - Utilities Director
Karl Louis - Police Chief
Ronnie Grooms - Fire Chief
Tom Hunt - Municipal Court Judge
Lisa Wright - Community Development Director
Priscilla McAnally - Librarian
1-9
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MCCLANAHAN AND HOLMES, LLP
CERTIFIED PUBLIC ACCOUNTANTS
228 SIXTH STREET, S.E.
PARIS, TEXAS 75460
903.784.4316
FAX 903.784.4310
304 WEST CHESTNUT
DENISON, TEXAS 75020
903.465.6070
FAX 903.465.6093
1400 WEST RUSSELL
BONHAM, TEXAS 75418
903.583.5574
FAX 903-583-9453
R. FRANK RAY, CPA
R. E. BOSTWICK, CPA
STEVEN W. MOHUNDRO, CPA
GEORGE H. STRUVE, CPA
ANDREW B. REICH, CPA
Unqualified Opinions on Financial Statements
Accompanied by Required Supplementary !nformation
and Supplementary Information
Independent Auditors' Report
Honorable Mayor and City Council
City of Paris, Texas
We have audited the accompanying financial statements of the governmental activities, the business-type activities, the
discretely presented component unit, each major fund, and the aggregate remaining fund information including the
budgetary comparison of the City of Paris, Texas, as of and for the year ended September 30, 2005, which collectively
comprise the City's financial statements as listed in the table of contents. These financial statements are the
responsibility of the 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 significant estimates made by management, as well as evaluating the overall fmancial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective fmancial
position of the governmental activities, the business-type activities, the discretely presented component unit, each major
fund, and the aggregate remaining fund information of the City of Paris, Texas, as of September 30, 2005, 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 November 30, 2005, on our
consideration of the City of Paris, Texas', internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts, grants, agreements, and other matters. That report is an integral
part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing
the results of our audit.
The management's discussion and analysis on pages 3 through 14 are not a required part of the financial statements but
are supplementary information required by accounting principles generally accepted in the United States of America.
We have applied certain limited procedures, which consisted principally of inquiries of management regarding the
methods of measurement and presentation of the required supplementary information. However, we did not audit the
information and express no opinion on it.
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
Honorable Mayor and City Council
City of Paris, Texas
Page 2
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the
City of Paris, Texas', financial statements. The Introductory Section; Statistical Section; Continuing Disclosure
Information; Overall Compliance, Internal Controls, and Federal and State Awards Section; and the combining and
individual fund statements and schedules are presented for the purposes of additional analysis and are not a required
part of the financial statements. Such information, except for that portion marked "unaudited" on which we express no
opinion, has been subjected to the auditing procedures applied in the audit of the financial statements and, in our
opinion, is fairly stated, in all material respects, in relation to the financial statements taken as a whole.
I~ J jlriw"" LLP
Certified Public Accountants
Paris, Texas
November 30, 2005
2
McCLANAHAN AND HOLMES, LLP
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Paris, we offer readers of the City of Paris, Texas' financial statements this narrative
overview and analysis of the financial activities of the City of Paris for the fiscal year ended September 30, 2005.
We encourage readers to consider the information presented here in conjunction with additional information that we
have furnished in our letter of transmittal as well as the City's financial statements.
Management Change
In March of 2004 the Paris City Council performed its annual evaluation of the city manager rating him 2.67 on a
scale of 5. This rating placed the manager in the "good" range (2.5 to 3.4) of the evaluation scale. Having completed
the public evaluation, the Council then voted 5 to 2 to terminate the manager who was in his 17th year of service as
city manager in Paris. The council expressed a need for the City to be a leaner and more efficient operation. In the
following months, the City pressed forward with necessary business. The Council appointed the public works
director to act as interim city manager. This individual carried the City through a difficult summer budget process.
Direction was received from the Council to make budget cuts wherever possible with the long-term goals being to
reduce outstanding debt and lower the tax rate. Specifically, the interim manager was asked to trim 5% off the 2003-
04 general fund budget. The 2004-05 budget later presented to the Council had reduced the general fund budget by
7.08% compared to 2003-04 budget numbers. From that point the Council reviewed the proposed budget making
further reductions but also some increases. The table below outlines the changes from the 2003-04 budget to the
adopted 2004-05 budget.
Reductions
Budget Final 2003-04 to
2003-04 2004-05 Final 2004-05
General Fund $22,508,606 $20,692,745 $ 1,815,861
Water & Sewer Fund 10,963,673 11,111,798 (148,125)
Community Development 945,000 521,000 424,000
Think Child Safety 23,025 13,525 9,500
CJD (Drug Task Force) 607,131 912,391 (305,260)
Paris Economic Development Corp. 1,857,412 1,812,274 45,138
Special Revenue 38,390 38,390
Health Department 919,526 933,534 (14,008)
Total $37,862,763 $36,035,657 $ 1,827,106
The major reductions accounting for the decreases above were:
1. The Texas Municipal Retirement System contribution ratio was changed from 2 to 1 down to 1.5 to 1.
2. City employees began to contribute $50 per month toward the cost of their health insurance, and the City
lowed its contribution by $50.
3. Longevity pay for non-civil service employees was eliminated.
4. Sell back of excess vacation and sick leave at discounted rates was eliminated.
5. Thirteen full-time positions were eliminated.
6. Two part-time positions were eliminated.
7. Three full-time positions were reduced to part-time positions.
8. A second pay plan was adopted affecting all new hires and current employees who promote to a higher
position. The new plan is 8.9% less than the old plan.
The Council next appointed a retired former metroplex area city manger to serve as interim and began to look in
earnest for a permanent replacement. Using the services of a professional search firm, the Paris Council interviewed
seven candidates recommended to them. In November 2004, the Council selected its new city manager who was to
start December 1, 2004.
3
,.
The manager began immediately to review the financial condition of the City with the help of the finance director,
Everything came under scrutiny. Every revenue source, expenditure, expense, transfer, receivable, payable, and
reserve were reviewed along with contracts and other documents. Among the things found by the manager were the
following:
1. The tax rate had grown form 47 cents per $100 valuation in 1983-84 to 69.5 cents per $100 valuation in
2003-2004.
2. The City had $45,855,000 in outstanding debt of which $31,512,400 was supported by enterprise revenues
and $14,342,600 was supported by property taxes amounting to 11.248 cents of the 69.225 cent tax rate for
2004-2005.
3. The number of full-time city employees during this same period had risen from 242 to 366.
4. In the last 10 years, sanitation collection had gone from making a $563,097 profit to having a $54,760 loss.
5. Between the years 2001 and 2004, the City expenses exceeded City revenues by $4,478,546.
6. At the end of fiscal year 2003-2004, the water and sewer operating fund was overdrawn by $2,397,610 and
the insurance trust fund was overdrawn by $688,379 in the City's pooled cash account.
7. The City had annexed areas in the late 1990's that were straining its resources to provide services.
8. Inadequate expenditures/expenses have been made on infrastructure items such as streets, water lines, and
sewer lines.
In mid-February 2005, the city manager gave a presentation to the City Council and the public on the fmancial
condition of the City of Paris using the audited fmancial statements found in the 2003-04 Comprehensive Annual
Financial Report. In the February 15, 2005, issue of the Paris News, the city manager wrote a guest column
summarizing his previous night's presentation to the Council. His column reads as follows:
"Last night, February 14, the City Council received a presentation from McClanahan and Holmes LLP (certified
public accountants) concerning the audit report for the fiscal year that ended September 30, 2004. At the conclusion
of that report, I presented to the Council the status of the City of Paris' fmancial condition using the independent
audit report as the source of my information. Today I would like to repeat for you a portion of that presentation in
this column.
For the year ending September 30, 2004, the total revenue for all city government funds was $22,928,420. During
that same period, total government expenses were $26,480,185. By use of other financial sources the 2004 year's net
fund balance loss was reduced to $2,229,197. Additionally at the end of the fiscal year (September 30, 2004) the
water and sewer operating fund is overdrawn by $2,307,610 in the city's pooled cash account. The insurance trust
fund is also overdrawn by $688,379 in the city's pooled cash account.
The statistical section of the report gives a 1O-year history of the city's government-wide revenues and expenditures.
Three of the past four years this city has had more expenses than revenue. Since the year ending September 30,
2000, this city has spent $4,478,546 more than it has taken in revenue and other interfund transactions.
Thankfully, the City Council recognized this problem last summer and began the process of reducing expenses for
the City through the adoption of the current year's city budget, but we must do more.
No individual, business or local government can survive by consistently spending more than they earn. To correct
the problem, we either raise our income or reduce our expenses.
I am putting together a plan for the Paris City Council, which will reduce city expenditures. I believe it is my duty to
propose a solution that will correct the problem as opposed to delay the inevitable.
Regrettably, I believe this city needs to be spending significant money on items we have been deferring. Weare, in
my opinion, not doing an adequate job of maintaining our public streets, water mains, sewer mains or our fleet of
vehicles. We need to remove more dilapidated structures to improve the appearance of this community, and we need
to secure the remaining water in Pat Mayse Lake to protect our future. I also ftrmly believe our city tax rate is
already too high to keep Paris competitive for new business development.
On February 28, I will present to the City Council the framework of my plan to reduce City expenses.
4
There is no easy or painless cure for this condition. I will be proposing a reduction in city staff, which will impact
city services. Additionally, we will impose a culture of discipline in our city purchasing process. Even with these
changes, it will take several years to get this organiZation to a [mandaI position of which you can be proud."
True to his word, the city manager utilized the information gleaned from numerous meetings with department heads
and employees and developed a plan to reduce city expenditures while at the same time updating user fee type
revenues, which were typically too low in amount. On February 28,2005, the city manager presented the following
outline, which covered seven strategies for reduction of operating expenses,
I. Privatization
A. Take competitive bids/proposals on the following activities:
1. Solid waste collection and disposal.
2. Mowing and vegetation trimming.
3. Spraying of chemicals.
4. Street sweeping.
B. Pursue contracting with hospital for administration and/or operation of the city-county
health department. (If unable to contract with the hospital or eliminate the current
subsidy, the city should discontinue participation.)
C. Contract with local school districts for security at public schools.
II. Staff Reductions
A. City Manager's office: eliminate 1 secretary position by adding duties to existing clerk
in the finance office.
B. City Attorney's office: eliminate 1 prosecutor position and 2 legal secretary positions.
C. Municipal Court: eliminate 1 clerk position.
D. Police Department: eliminate 6 police officer positions by contracting with public
schools to pay cost for school services.
E. Fire Department: eliminate 6 fIrefIghter positions and increase the medical skills of fIre
department personnel to provide paramedic support to ambulance personnel at multiple
injury/patient occurrences.
F. Community Development Department: eliminate 1 code enforcement officer position.
G. Engineering Department: eliminate 1 construction inspector position.
H. Parks and ROW Department: eliminate 1 parks superintendent position by placing the
department under the supervision of the assistant Public Works Director, and eliminate
3 maintenance positions by privatization of portions of required mowing and spraying
certain ditches and right of way.
I. Sanitation Department: eliminate 14 solid waste collector positions by privatization of
solid waste collection/disposal.
1. Street Department: eliminate 4 maintenance positions by reorganizing work crews.
K. Emergency Medical Services Department: eliminate 9 paramedic positions by blending
EMS with the Fire Department. Staff each ambulance for single patient call and
provide back up paramedic staff from the Fire Department first responder vehicle.
L. Airport Department: eliminate 1 airport manager position by contracting with the fIxed
based operator to perform those duties.
M. Library Department: eliminate 1 assistant librarian position and 1 library clerk position.
N. Water Billing/Collection Department: eliminate 2 clerk positions.
O. Water Distribution Department: eliminate 1 maintenance worker position.
P. Water Treatment Plant Department: eliminate 2 maintenance worker positions.
Q. Waste Water Treatment Plant Department: eliminate 3 maintenance worker positions.
III. Employee Group Health Benefits
With an overdraft of $688,000 as of the end of the 2004 fiscal year, the medical plan has to be
revised to eliminate the deficit and begin building reserves.
5
IV. Purchasing Procedures
Savings can be accomplished by the centralization of purchasing.
V. Stop Charitable Donations
The City should discontinue its history of providing money to charities such as the American
Red Cross, Children's Advocacy Center, Family Haven, Keep Paris Beautiful, Lamar County
Human Resources Council, North East Texas Council on Alcohol and Drugs, Models of the
Maker, Breakfast Optimists, and Casa for Kids,
VI. Reduce Operating Inefficiencies
Every city water system has the problem of lost and unaccounted for water. The City should
be vigilant in accounting for every gallon of water produced. An aggressive meter
testing/replacement program should be accomplished for larger meter users. When necessary,
a correction of meter size should be made to insure accurate low flow readings. Water audits
are legally required and a good conservation idea.
VII. Internal Financing of Replacement Equipment
The City of Paris is currently financing the purchase of vehicles through local banks or
commercial lending organizations. The City needs to establish through savings enough money
in a pool to internally purchase replacement vehicles and equipment. The departments would
be charged annually a fee based on depreciation of the asset over its useful life.
Of the proposed cuts outlined in the seven strategies above, the most controversial appeared to be the blending of the
EMS and Fire Departments. The proposal to blend the departments was eventually discarded by the Council.
The second largest bone of contention concerning the manager's plan was the privatization of the Sanitation
Department. Supporters of the current methodology presented the City Council with a petition signed by over 1,100
residents requesting that the City continue to operate the residential sanitation service. A referendum calling for the
City not to privatize residential sanitation service passed on a vote of IOn to 737. Since that time the manager has
worked to make the existing department more efficient and less costly. Changes to work schedules and the handling
of bulk items has brought about needed cost reduction in this department.
Preliminary estimates indicated that just over $3,000,000 could be saved annually if the manager's plan was fully
implemented. Even without the implementation of the two most controversial proposals, significant cost reductions
have been made and the City's fmancial position has improved. The City has reversed it recent pattern of spending
more than it takes in. The 2005-2006 budget calls for revenues in excess of expenditures for the second consecutive
year. Management believes that if this new pattern is followed for the next few years, achieving the major goal of
significant property tax rate reduction should be attainable.
Financial Highlights of the Primary Government
. The assets of the City of Paris exceeded its liabilities at the close of the most recent fiscal year by
$69,118,352 (net assets), an increase of $1,978,088 or 2.94% over the previous year. Of the amount known
as net assets, $12,891,352 (unrestricted net assets) may be used to meet the government's ongoing
obligations to citizens and creditors.
. As of the close of the current fiscal year, governmental funds reported combined ending fund balances of
$11,440,304 compared to $12,380,120 the previous year. This amounts to a decrease of$939,8l6 or 7.59%.
Approximately 56.43% of this total amount or $6,455,507 is available for spending at the government's
discretion (unreserved fund balance).
. At the end of the fiscal year, unreserved fund balance for the general fund was $5,375,749 or 27.98% of
total general fund expenditures.
. The City of Paris' non-current liabilities decreased by $884,108 or 1.95% during the current fiscal year.
6
. Total charges for services for the City of Paris were $16,130,521 compared to $16,143,845 the prevIOUS
year while general revenues were $17,381,374 compared to $14,594,923 the previous year. Therefore, total
revenues were $33,511,895 for the year 2004-05 and $30,738,768 for the year 2003-04.
. Contribution income amounted to $907,566 and there was a gain of$I13,148 on the sale of Capital Assets.
. $4,588,598 in transfers from governmental activities to business-type activities occurred during the year.
. Liabilities decreased $3,317,323 or 6.68%.
. Expenses decreased $1,839,482 or 5.05%.
. The ratio of net assets to expenses was 200.04% for the year 2004-05 and 184.49% for the year 2003-04
while the ratio of unrestricted net assets changed from 28.52% in 2003-04 to $37.27% in 2004-05.
. The ratio of debt service to total expenditures was 7.66% for the year 2004-05 and 8,62% for the year
2003-04.
. Net debt to assets, a measure of solvency, was 38.43% in 2004-05 and 38.72% in 2003-04.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the City of Paris' fmancia1 statements. The
City of Paris' financial statements comprise three components: 1) government-wide financial statements, 2) fund
financial statements, and 3) notes to the financial statements. This report also contains other supplementary
information in addition to the financial statements themselves.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City of
Paris' finances, in a manner similar to a private-sector business.
The statement of net assets presents information on all of the City of Paris' 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 of Paris is improving or deteriorating.
The statement of activities presents information showing how the government's net assets changed during the most
recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change
occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for
some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused
vacation leave).
Both of the government-wide financial statements distinguish functions of the City of Paris that are principally
supported by taxes and intergovernmental revenues (government activities) from other 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 Paris include general governmen~ public safety, public works, library, and
airport. The business-type activities of the City of Paris include water production and distribution as well as
wastewater collection and treatment. The government-wide fmancial statements include not only the City of Paris
itself (known as the primary government), but also a legally separate economic development corporation (known as
the component unit) over which the City of Paris is able to exercise significant contro1. Financial information for this
component unit is reported separately from the fmancial 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 of Paris, like other state and local governments, uses fund accounting to
ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Paris can
be divided into two categories: governmental funds and proprietary funds.
7
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 fmancial statements, governmental
fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of
spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a
government's near-term fmancing 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
government activities in the government-wide fmancial statements. By doing so, readers may better understand the
long-term impact of the government's near-term fmancing decisions. Both the governmental fund balance sheet and
the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The City of Paris maintains 10 individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in
fund balances for the general fund, capital projects fund, and the debt service fund, all of which are considered to be
major funds. Data from the other 7 governmental funds are combined into a single, aggregated presentation.
Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements
elsewhere in this report.
The City of Paris adopts an annual appropriated budget for its general fund. A budgetary comparison statement has
been provided for the general fund to demonstrate compliance with this budget.
The governmental fund financial statements can be found immediately after the Independent Auditors' Report.
Proprietary Funds
The City of Paris maintains only one type of proprietary fund. An enterprise fund (the type used by the City of Paris)
is used to report the same functions presented as business-type activities in the government-wide fmancial
statements. The City of Paris uses an enterprise fund to account for its water and sewer related activities.
Proprietary funds provide the same type of information as the government-wide fmandal statements, only in more
detail. The proprietary fund used by the City of Paris is considered a major fund.
The proprietary fund financial statements can be found beginning with Statement 7 and continuing through
Statement 9 of this report.
Notes To The Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government-wide and fund fmancial statements. The notes to the financial statements can be found immediately
after the Statement of Cash Flows-Proprietary Funds in this report.
Other Information
In addition to the financial statements and accompanying notes, this report also presents certain required
supplementary information concerning the City of Paris' progress in funding its obligation to provide pension
benefits to its employees. Required supplementary information can be found in Notes to Financial Statements V.I.
Combining and individual fund statements and schedules can be found immediately after the Notes to the Financial
Statements in this report.
8
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 of Paris, assets exceeded liabilities by $69,118,352 at the close of the most recent fiscal year. This
compares to $67,140,264 for the previous year.
By far the largest portion of the City of Paris' net assets (68.39%) reflects its investment in capital assets (e.g., land,
buildings, machinery, and equipment). The City of Paris uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City of Paris' 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.
Current and Other Assets
Capital Assets
Total Assets
Long- Term Liabilities
Outstanding
Other Liabilities
Total Liabilities
Net Assets:
Invested in
Capital Assets,
Net of Re!ated Debt
Restricted
Unrestricted
Total Net Assets
Governmental Activities
2004 2005
$ 14,208,254
39,152,033
53,360,287
18,982,066
1,090,451
20,072,517
19,947,827
7,549,815
5,790,128
$ 33,287,770
$ 13,061,472
40,100,818
53,162,290
14,596,398
990,619
15,587,017
29,330,449
5,089,243
3,155,581
$ 37,575,273
City of Paris' Net Assets
Business-type Activities
2004 2005
$ 8,695,753
54,743,139
63,438,892
26,280,200
3,306,198
29,586,398
25,324,447
3,935,871
4,592,176
$ 33,852,494
$ 9,597,353
52,700,301
62,297,654
29,781,760
972,815
30,754,575
21,981,460
3,936,107
5,625,512
$ 31,543,079
Total
2004 2005
$ 22,904,007
93,895,172
116,799,179
45,262,266
4,396,649
49,658,915
45,272,274
11,485,686
10,382,304
$ 67,140,264
$ 22,658,825
92,801,119
115,459,944
44,378,158
1,963,434
46,341,592
51,311,909
9,025,350
8,781,093
$ 69,118,352
An additional portion of the City of Paris' net assets, $9,025,350 (13.06%), represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net assets, $8,781,093
(12.70%), may be used to meet the government's ongoing obligations to citizens and creditors.
There was a decrease of $2,533,709 in restricted net assets primarily due to expenditure of bond proceeds on capital
projects.
At the end of the current fiscal year, the City of Paris is able to report positive balances in all three categories of net
assets (invested in capital assets, net of related debt; restricted assets; and unrestricted assets) both for the
government as a whole, as well as for its separate governmental and business-type activities. This was also true for
the prior fiscal year.
9
Governmental Activities
Governmental activities increased the City of Paris' net assets by $4,287,503 during the current fiscal year. This
increase resulted from substantial decreases in the operating expenses of governmental activities, increasing charges
for providing those services, and transferring debt previously reported as governmental activity that correctly should
be shown as a business-type activity. General revenues were up $2,490,757 or 17.5%. This unusually large increase
was due to a non-reoccurring special item that reduced general revenues in 2004 as well as increases in property and
sales taxes. Franchise taxes were up due to the collection of a previously disputed amount with a gas utility.
General Revenues
Property Taxes
Sales Taxes
Franchise Taxes
Hotel Occupancy Tax
Unrestricted Investment Earnings
Contribution Income
Gain on Sale of Capital Assets
Special Item
Total Revenue
2005
2004
Increase
(Decrease)
$ 276,850
272,183
597,459
12,070
(14,941)
305,455
113,148
928,533
$ 2,490,757
The following table provides a summary of the City's operations for the years ending 2004 and 2005 for both
governmental and business-type activities.
Revenues:
Program Revenues:
Charges for Services
Operating Grants &
Contributions
Capital Grants &
Contributions
General Revenues:
Property Taxes
Sales Taxes
Franchise Taxes
Hotel Occupancy Tax
Unrestricted
Investment Earnings
Other
Total Revenues
Governmental Activities
2005 2004
$ 7,733,700
5,066,926
3,062,589
314,404
112,310
305,455
113,148
$ 7,456,850
4,794,743
2,465,130
302,334
127,251
(928,533)
$14,217,775
$16,708,532
City of Paris' Changes in Net Assets
Business-type Activities
2005 2004
Total
2005 2004
$ 3,969,670 $ 5,213,983 $ 12,160,851 $ 10,929,862 $ 16,130,521 $ 16,143,845
2,823,843 3,442,169 2,823,843 3,442,169
194,227 194,227
7,733,700 7,456,850 7,733,700 7,456,850
5,066,926 4,794,743 5,066,926 4,794,743
3,062,589 2,465,130 3,062,589 2,465,130
314,404 302,334 314,404 302,334
112,310 127,251 70,731 191,576 183,041 318,827
418,603 602,111 593,660 1,020,714 593,660
23,696,272 23,802,460 12,833,693 11,715,098 36,529,965 35,517,558
10
City of Paris' Changes in Net Assets
Governmental Activities Business-type Activities Total
2005 2004 2005 2004 2005 2004
Expenses:
General Government 2,188,590 2,275,969 2,188,590 2,275,969
Finance 515,965 540,815 515,965 540,815
Public Safety 9,825,404 9,554,945 9,825,404 9,554,945
Public Works 6,957,522 8, I 02,061 6,957,522 8,102,061
Health 2,904,920 3,724,003 2,904,920 3,724,003
Library Service 718,779 917,450 718,779 917,450
Cox Field 258,496 256,149 258,496 256,149
Interest on
Long-Tenn Debt 627,691 1,022,551 627,691 1,022,551
Water & Sewer 10,554,510 9,997,416 10,554,510 9,997,416
Total Expenses 23,997,367 26,393,943 10,554,510 9,997,416 34,551,877 36,391,359
Increase in Net Assets
Before Transfers (301,095) (2,591,483) 2,279,183 1,717,682 1,978,088 (873,801)
Transfers/Special Item 4,588,598 306,921 (4,588,598) (1,643,542) (1,336,62 I)
Increase in Net Assets 4,287,503 (2,284,562) (2,309,415) 74,140 1,978,088 (2,2 I 0,422)
Net Assets 10-1-2004 33,287,770 35,572,332 33,852,494 33,778,354 67,140,264 69,350,686
Net Assets 9-30-2005 $ 37,575,273 $ 33,287,770 $ 31,543,079 $ 33,852,494 $ 69,118,352 $ 67,140,264
Business-type Activities
Business-type activities decreased the City of Paris' net assets by $2,309,415. This was due entirely to the transfer of
long-term debt from governmental activities to business-type activities. This debt was directly related to the
proprietary fund and should have been recorded there initially.
Financial Analysis of the Government's Funds
As noted earlier, the City of Paris uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements.
Governmental Funds
The focus of the City of Paris' governmental funds is to provide information on near-term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing the City of Paris' financing requirements.
In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for
spending at the end of the fiscal year.
11
Governmental Funds
2004 2005
Total Assets $ 15,480,847 $ 13,236,716
Total Liabilities 3,100,727 1,796,412
Fund Balances:
Reserved for:
Construction 6,594,036 4,036,886
Debt Service 1,087,396 725,394
Notes 94,910 69,474
Inventories 155,608 153,043
Unreserved:
General Fund 3,735,128 5,375,749
Special Revenue Funds 909,520 1,006,385
Permanent Funds (196,478) 73,373
Total Fund Balances 12,380,120 11,440,304
Total Liabilities &
Fund Balances $ 15,480,847 $ 13,236,716
As of the end of the current fiscal year, the City of Paris' governmental funds reported combined ending fund
balances of $11,440,304. Approximately 56.34% of this total amount ($6,445,507) constitutes unreserved fund
balance, which is available for spending at the government's discretion. The remainder of fund balance is reserved
to indicate that it is not available for new spending because it has already been committed to 1) construction
($4,036,886),2) pay debt service ($725,394), 3) to generate income to pay for other restricted purposes ($222,517).
Governmental Funds
Revenues, Expenditures, &
Changes in Fund Balances
2004 2005
Revenues $ 22,928,420 $ 23,427,213
Expenditures 26,480,185 25,394,527
Excess (Deficiency) of Revenues
Over (Under) Expenditures (3,551,765) (1,967,314)
Total Other Financing Sources (Uses) 1,322,568 1,030,589
Net Change in Fund Balances (2,229,197) (936,725)
Increase(Decrease) in Inventory (60,488) (3,091)
Fund Balances - September 30, 2004 14,669,805 12,380,120
Fund Balances - September 30, 2005 $ 12,380,120 $ 11,440,304
The general fund is the chief operating fund of the City of Paris. At the end of the current fiscal year, unreserved
fund balance of the general fund was $5,375,749 ($3,735,128 the previous year), while total fund balance reached
$5,528,792 ($3,890,736 the previous year). As a measure of the general fund's liquidity, it may be useful to compare
both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents
27.98% of total general fund expenditures, while total fund balance represents 28.78% of that same amount.
12
Debt Service Fund
The debt service fund has a total fund balance of $725,394 ($1,087,396 the previous year), all of which is reserved
for the payment of debt service, The net decrease in fund balance during the current year in the debt service fund
was $362,002 ($175,711 increase the previous year). The decrease was due to the transfer of debt from the
governmental activities to business-type activities. The government enacted a dedicated property tax for debt service
at the beginning of the current fiscal year. This tax produced revenues of $1,214,264 in the current fiscal year
($1,286,973 the previous year).
Proprietary Fund
The City of Paris' proprietary fund provides the same type of information found in the government-wide financial
statements, but in more detail.
Unrestricted net assets of the Water and Sewer Fund at the end of the year amounted to $5,625,512 ($4,592,176 the
previous year). Other factors concerning the fmances of this fund have already been addressed in the discussion of
the City of Paris' business-type activities.
General Fund Budgetary Highlights
There were no changes to the original budget. The overall appropriation of the general fund was under spent by
$285,541.
Capital Asset and Debt Administration
Capital Assets
The City of Paris' investment in capital assets for its governmental and business-type activities as of September 30,
2004, amounts to $45,272,274 ($44,276,171 the previous year). Both of these amounts are net of accumulated
depreciation. This investment in capital assets includes land, buildings, improvements, machinery and equipment,
park facilities, roads, highways, and bridges.
City of Paris - Net Capital Assets
Governmental Activities Business-type Activities Total
2004 2005 2004 2005 2004 2005
Land $ 5,903,022 $ 5,903,022 $ 282,672 $ 282,672 $ 6,185,694 $ 6,185,694
Buildings and System 7,647,531 7,397,886 52,263,330 50,034,894 59,910,861 57,432,780
Improvements Other
than Buildings 1,900,299 2,528,845 1,900,299 2,528,845
Machinery, Furniture,
and Equipment 3,475,140 2,982,286 315,265 213,590 3,790,405 3,195,876
Infrastructure 18,489,598 17,528,113 18,489,598 17,528,113
Construction in Progress 1,514,303 3,549,809 89,639 503,504 1,603,942 4,053,313
Water Rights - Net 860,789 847,126 860,789 847,126
Unamoritized Bond 222,140 210,857 931,444 818,515 1,153,584 1,029,372
Expense Total $ 39,152,033 $40,100,818 $54,743,139 $ 52,700,301 $ 93,895,172 $ 92,801,119
Additional information on the City of Paris' capital assets can be found in note N. C. of the Notes to the Financial
Statements.
13
Long-term Debt
At the end of the current fiscal year, the City of Paris had total bonded debt outstanding of $48,805,000. Of this
amount, $19,240,000 comprises debt backed by the full faith and credit of the government, and $29,565,000
represents bonds secured solely by specified revenue sources (i.e., revenue bonds).
City of Paris' Outstanding Long-term Bond Debt
Governmental Activities Business-Type Activities Total
2004 2005 2004 2005 2004 2005
General
Obligation Bonds
Revenue Bonds
$18,235,000 $13,776,800 $
27,620,000
$
29,053,200
$18,235,000
27,620,000
$13,776,800
29,053,200
$18,235,000 $13,776,800 $ 27,620,000
$ 29,053,200
$45,855,000
$42,830,000
Total
The City of Paris' bond debt decreased by $3,025,000 (6.59%) during the fiscal year. The City of Paris maintains an
A2 rating from Moody's for its entire general obligation debt and an A3 rating from Moody's for all of its revenue
debt.
The maximum tax rate permitted by Article XI, Section 5 of the State of Texas constitution is $2.50 per $100 of
assessed valuation. Consequently, no legal debt margin can be calculated. The state attorney general has
traditionally allowed up to $1.50 per $100 valuation to be applied to debt service. The City levied a tax rate of
$0.69225 per $100 valuation for the current fiscal year. This rate was broken down into $0.5665 per $100 valuation
for operations and $0.12575 per $100 valuation for debt service. Using the traditional allowance of the state attorney
general as a guide, the City of Paris is utilizing only 8.38% of its debt capacity.
Additional information on the City of Paris' long-term debt can be found in note IV. G. of the Notes to the Financial
Statements.
Economic Factors and Next Year's Budgets and Rates
. The unemployment rate for the City of Paris is currently 5.9%.
. Sales tax revenues are projected for zero growth.
. Inflation is currently at 4.3%.
. New construction amounted to 47 residential units and 42 commercial units.
. .. Local population growth is expected to be minimal.
. The tax rate is expected to be at .69225.
All of these factors were considered in preparing the City of Paris' budget for 2005-06.
Requests for Information
This financial report is designed to provide a general overview of the City of Paris' finances for all those with an
interest in the government's fmances. Questions concerning any of the information provided in this report or
requests for additional information should be addressed to the Office of the Finance Director, 135 S.E. First Street,
City of Paris, Texas 75460.
14
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City of Paris, Texas
Statement of Net Assets
September 30, 2005
Statement 1
Component
Primary Government Unit
Governmental Business- Type Economic
Activities Activities Total Development
ASSETS
Cash and Cash Equivalents $ 8,136,388 $ 6,953,606 $ 15,089,994 $ 983,554
Investments 2,214,026 2,214,026 477,464
Receivables (Net of Allowance
for Uncollectibles) 2,023,436 2,035,914 4,059,350 189,044
Inventories 153,043 236,725 389,768
Due from Other Governments 836,213 836,213
Internal Balances 1,842,918 (1,842,918)
Notes Receivable 69,474 69,474 4,436,168
Capital Assets (Net of
Accumulated Depreciation):
Land 5,903,022 282,672 6,185,694 1,244,751
Buildings and System 7,397,886 50,034,894 57,432,780
Improvements Other Than
Buildings 2,528,845 2,528,845
Machinery and Equipment 2,982,286 213,590 3,195,876
Infrastructure 17,528,113 17,528,113
Construction in Progress 3,549,809 503,504 4,053,313
Water Rights (Net of
Accumulated Amortization) 847,126 847,126
Unamortized Bond Expense 210,857 818,515 1,029,372
Total Assets 53,162,290 62,297,654 115,459,944 7,330,981
The accompanying notes to the fmancial statements are an integral part of this statement.
15
City of Paris, Texas
Statement of Net Assets
September 30, 2005
Statement 1
( Continued)
Component
Primary Government Unit
Governmental Business-Type Economic
Activities Activities Total Development
LIABILITIES
Accounts Payable and
Other Current Liabilities 804,077 556,300 1,360,377
Accrued Interest 184,116 416,515 600,631 18,352
Deferred Revenue 621 621
Due to Other Governments 1,805 1,805
Noncurrent Liabilities:
Due Within One Year 1,084,668 2,646,760 3,731,428 554,047
Due in More Than One Year 13,511,730 27,135,000 40,646,730 4,179,420
Total Liabilities 15,587,017 30,754,575 46,341,592 4,751,819
NET ASSETS
Invested in Capital Assets,
Net of Related Debt 29,330,449 21,981,460 51,311,909
Restricted for:
Construction 4,036,886 1,930,733 5,967,619
Debt Service 909,510 2,005,374 2,914,884 256,648
Notes Receivables 69,474 69,474
Permanent Library Funds
Nonexpendable 73,373 73,373
Unrestricted 3,155,581 5,625,512 8,781,093 2,322,514
Total Net Assets $ 37,575,273 $ 31,543,079 $ 69,118,352 $ 2,579,162
16
City of Paris, Texas
Statement of Activities
For the Year Ended September 30,2005
Program Revenues
Operating Capital
Charges for Grants and Grants and
FunctionslPrograms Expenses Services Contributions Contributions
Primary Government:
Governmental Activities:
General Government $ 2,188,590 $ 184,469 $ 21,800 $
Finance 515,965
Public Safety 9,825,404 379,992 1,645,687
Public Works 6,957,522 1,718,241 151,238 194,227
Health 2,904,920 1,648,008 890,438
Library Service 718,779 38,960 27,449
Cox Field 258,496 85,167
Interest on Long-Term Debt 627,691 2,064
Total Governmental Activities 23,997,367 3,969,670 2,823,843 194,227
Business-Type Activities:
Water and Sewer 10,554,510 12,160,851
Total Business-Type Activities 10,554,510 12,160,851
Total Primary Government $ 34,551,877 $ 16,130,521 $ 2,823,843 $ 194,227
Component Unit:.
Economic Development $ 973,893 $ $ $
General Revenues:
Property Taxes
Sales Taxes
Franchise Taxes
Hotel Occupancy Tax
Umestricted Investment Earnings
Contribution Income
Gain on Sale of Capital Assets
Transfers
Total General Revenues and Transfers
Change in Net Assets
Net Assets - Beginning, October 1, 2004
Net Assets - Ending, September 30, 2005
The accompanying notes to the fmancial statements are an integral part of this statement.
17
Statement 2
Net (Expense) Revenue and Changes in Net Assets
Primary Government Component Unit
Governmental Business-Type Economic
Activities Activities Total Development
$ (1,982,321) $ $ 1,982,321 $
(515,965) (515,965)
(7,799,725) (7,799,725)
(4,893,816) (4,893,816)
(366,474) (366,474)
(652,370) (652,370)
(173,329) (173,329)
(625,627) (625,627)
(17,009,627) (17,009,627)
1,606,341
1,606,341
1,606,341
1,606,341
(15,403,286)
(17,009,627)
1,606,341
(973,893)
7,733,700 7,733,700
5,066,926 5,066,926 1,013,371
3,062,589 3,062,589
314,404 314,404
112,310 70,731 183,041 247,794
305,455 602,111 907,566
113,148 113,148 8,798
4,588,598 (4,588,598)
21,297,130 (3,915,756) 17,381,374 1,269,963
4,287,503 (2,309,415) 1,978,088 296,070
33,287,770 33,852,494 67,140,264 2,283,092
$ 37,575,273 $ 31,543,079 $ 69,118,352 $ 2,579,162
18
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City of Paris
Balance Sheet - Governmental Funds
September 30, 2005
Statement 3
Other Total
Debt Capital Governmental Governmental
General Service Projects Funds Funds
ASSETS
Cash and Cash Equivalents $ 2,601,739 $ 721,093 $ 4,099,708 $ 713,848 $ 8,136,388
Receivables (Net of
Allowance for
Uncollectibles) 1,970,278 52,963 195 2,023,436
Notes Receivable 69,474 69,474
Due from Other Funds 2,018,162 2,018,162
[nventories 153,043 153,043
Due from Other
Governments 146,388 71,404 618,421 836,213
Total Assets $ 6,889,610 $ 774,056 $ 4,171,112 $ 1,401,938 $ 13,236,716
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts Payable $ 594,194 $ $ 134,226 $ 75,657 $ 804,077
Due to Other Funds 175,244 175,244
Due to Other Governments 1,805 1,805
Deferred Revenue 766,624 48,662 815,286
Total Liabilities 1,360,818 48,662 134,226 252,706 1,796,412
Fund Balances:
Reserved for:
Construction 4,036,886 4,036,886
Debt Service 725,394 725,394
Notes 69,474 69,474
Inventories 153,043 153,043
Unreserved, Reported in:
General Fund 5,375,749 5,375,749
Special Revenue Funds 1,006,385 1,006,385
Permanent Funds 73,373 73,373
Total Fund Balances 5,528,792 725,394 4,036,886 1,149,232 11,440,304
Total Liabilities and
Fund Balances $ 6,889,610 $ 774,056 $ 4,171,112 $ 1,401,938
Amount reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources and, therefore,
are not reported in the funds. (Net of Accumulated Depreciation)
Other long-tenn assets are not available to pay for current-period expenditures and, therefore,
are deferred in the funds.
Long-term liabilities, including bonds payable, are not due and payable in the current period and,
therefore, are not reported in the funds.
Net assets of governmental activities
39,889,961
814,665
(14,569,657)
$ 37,575,273
The accompanying notes to the financial statements are an integral part of this statement.
19
City of Paris, Texas
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds
For the Year Ended September 30,2005
The accompanying notes to the financial statements are an integral part of this statement.
20
Statement 4
City of Paris, Texas Statement 4
Statement of Revenues, Expenditures and Changes (Continued)
in Fund Balance
Governmental Funds
For the Year Ended September 30,2005
Other Total
Debt Capital Governmental Governmental
General Service Projects Funds Funds
Other Financing Sources (Uses):
Transfers In 1,202,412 291,885 305,100 1,799,397
Transfers Out (349,232) (397,989) . (93,940) (40,795) (881,956)
Sale of Capital Assets 53,755 59,393 113,148
Total Other Financing
Sources (Uses) 906,935 (106,104) (34,547) 264,305 1,030,589
Net Changes
in Fund Balances 1,641,147 (362,002) (2,557,150) 341,280 (936,725)
Fund Balances -
September 30, 2004 3,890,736 1,087,396 6,594,036 807,952 12,380,120
Increase (I>ecrease)
in Inventory (3,091) (3,091)
Fund Balances -
September 30, 2005 $ 5,528,792 $ 725,394 $4,036,886 $ Ij149,232 $ 11,440,304
21
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City of Paris, Texas Statement 5
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the Statement of Activities
Year Ended September 30, 2005
Amounts reported for governmental activities in the statement of activities (Statement 2) are
different because:
Net change in fund balances - total governmental funds (Statement 4). $ (936,725)
Governmental funds reported capital outlays as expenditures. However, in the statement
of activities the cost of those assets is allocated over their estimated useful lives and
reported as depreciation expense. This is the amount by which capital outlays exceeded
depreciation in the current period. 653,614
Revenues in the statement of activities that do not provide current financial resources
are not reported as revenues in the funds. 155,911
Accrued interest reported in the statement of activities does not require the use of current
fmancial resources and therefore is not reported as an expenditure in governmental funds. 42,411
Transfer from Water and Sewer Fund for assumption of debt. 3,671,157
The net change in inventory is a direct adjustment to fund balance in the funds. (3,091)
Some expenses reported in the statement of activities do not require the use of current
fmancial resources and, therefore, are not reported as expenditures in governmental funds. (349,863)
The issuance of long-term debt (e.g. bonds, leases) provides current fmancial resources
to governmental funds, while the repayment of the principal of long-term debt consumes
the current fmancial resources of governmental funds. Neither transaction, however,
has any effect on net assets. Also, governmental funds report the effect of issuance
costs, premium, discounts, and similar items when debt is fIrst issued, whereas these
amounts are deferred and amortized in the statement of activities. This amount is the net
effort of these differences in the treatment of long-term debt and related items. 1,054,089
Change in net assets of governmental activities (Statement 2). $ 4,287,503
The accompanying notes to the fmancial statements are an integral part of this statement.
22
City of Paris, Texas
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual
General Fund
Fiscal Year Ended September 30,2005
Statement 6
Budgeted Amounts Variance with
Final Budget-
Positive
Original Final Actual (Negative)
Revenues:
Ad Valorem Taxes $ 6,431,890 $ 6,431,890 $ 6,451,250 $ 19,360
Municipal Sales Tax 4,700,000 4,700,000 5,066,926 366,926
Hotel Occupancy Tax 320,000 320,000 314,404 (5,596)
Franchise and Gross
Receipts Tax 2,485,410 2,485,410 3,062,589 577,179
Licenses and Permits 72,400 72,400 98,611 26,211
Fines and Fees 499,375 499,375 556,895 57,520
Use of Money and Property 132,985 132,985 197,699 64,714
Santitation 1,409,000 1,409,000 1,361,406 (47,594)
Emergency Medical Service 1,864,014 1,864,014 1,816,352 (47,662)
Intergovernmental Revenues 513,135 513,135 687,656 174,521
Miscellaneous Revenues 266,937 266,937 330,093 63,156
Total Revenues 18,695,146 18,695,146 19,943,881 1,248,735
Expenditures:
General Government:
Council 705,984 705,984 713,444 (7,460)
Manager 180,114 180,114 156,649 23,465
Attorney 408,107 408,107 353,885 54,222
Municipal Court 233,268 233,268 208,825 24,443
Clerk 125,332 125,332 112,739 12,593
Total General Government 1,652,805 1,652,805 1,545,542 107,263
Finance:
Accounting and Auditing 508,685 508,685 508,968 (283)
Public Safety:
Police 5,066,260 5,066,260 5,101,575 (35,315)
Fire 3,460,486 3,460,486 3,335,092 125,394
Total Public Safety 8,526,746 8,526,746 8,436,667 90,079
Public Works:
Community Development 644,222 644,222 584,721 59,501
Engineering 460,974 460,974 450,832 10,142
Public Works 182,458 182,458 129,060 53,398
Parks and Recreation 1,072,430 1,072,430 1,007,135 65,295
Solid Waste 1,329,754 1,329,754 1,230,841 98,913
Streets and Highways 1,609,499 1,609,499 1,464,806 144,693
Traffic and Public Lighting 396,105 396,105 421,963 (25,858)
Garage 217,942 217,942 197,636 20,306
Total Public Works 5,913,384 5,913,384 5,486,994 426,390
The accompanying notes to the fmancial statements are an intregal part of this statement.
23
City of Paris, Texas
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual
General Fund
Fiscal Year Ended September 30, 2004
Statement 6
( Continued)
Budgeted Amounts Variance with
Final Budget-
Positive
Original Final Actual (Negative)
Expenditures: (Continued)
Emergency Medical Service 1,905,409 1,905,409 1,953,414 (48,005)
Library Services 664,517 664,517 601,270 63,247
Cox Field Airport 152,814 152,814 141,419 11,395
Paris Band 20,850 20,850 19,171 1,679
Contingency 150,000 150,000 516,224 (366,224)
Total Expenditures 19,495,210 19,495,210 19,209,669 285,541
Excess of Revenues Over
(Under) Expenditures (800,064) (800,064) 734,212 1,534,276
Other Financing Sources
and (Uses):
Transfers In 1,090,000 1,090,000 1,202,412 112,412
Transfers Out (349,232) (349,232)
Sale of Capital Assets 53,755 53,755
Total Other Financing
Sourcing and (Uses) 1,090,000 1,090,000 906,935 (183,065)
Net Changes in Fund Balance 289,936 289,936 1,641,147 1,351,211
Fund Balance-
September 30,2004 3,890,736 3,890,736 3,890,736
Decrease in Inventory (3,091) (3,091)
Fund Balance -
September 30, 2005 $ 4,180,672 $ 4,180,672 $ 5,528,792 $ 1,348,120
24
City of Paris, Texas
Statement of Net Assets
Proprietary Funds
For the Year Ended September 30, 2005
Statement 7
Water and Sewer
Enterprise Fund
Current Year
Water and Sewer
Enterprise Fund
Prior Year
ASSETS
Current Assets:
Cash and Cash Equivalents - Pooled
Cash and Cash Equivalents - Non-Pooled
Accounts Receivables - Net
Accrued Interest Receivable
Inventories
Total Current Assets
$
1,426,204
5,527,402
2,027,923
7,991
236,725
9,226,245
$
1,957,595
3,227,744
1,789,350
14,886
248,150
7,237,725
Non-Current Assets:
Investments
Water Rights, Net of Accumulated Amortization
Unamortized Bond Expense
Capital Assets:
Land
Plant, Pumps and Motors
Distribution System
Collection System
Maintenance Equipment and Vehicles
Furniture and Equipment
Construction in Progress
Less Accumulated Depreciation
Total Capital Assets (Net of Accumulated Depreciation)
Total Non-Current Assets
2,214,026 3,855,638
847,126 860,789
818,515 931,444
282,672 282,672
31,740,002 31,740,002
35,918,612 35,432,519
20,388,044 20,202,415
1,933,486 1,933,486
244,222 244,222
503,504 89,639
(39,975,882) (36,974,049)
51,034,660 52,950,906
54,914,327 58,598,777
64,140,572 65,836,502
Total Assets
The accompanying notes to the fmancial statements are an intregal part of this statement.
25
City of Paris, Texas
Statement of Net Assets
Proprietary Funds
For the Year Ended September 30, 2005
Statement 7
(Continued)
Water and Sewer Water and Sewer
Enterprise Fund Enterprise Fund
Current Year Prior Year
LIABILITIES
Current Liabilities:
Accounts Payable 31,924 370,636
Payable to U.S.A. for Water Rights - Current Portion 29,768 28,863
Interest Payable 416,515 460,002
Capital Leases Payable - Current Portion 6,459
Accrued Compensated Absences - Current Portion 14,792 10,947
Due to Other Funds 1,842,918 2,397,610
Revenue Bonds - Current Portion 2,602,200 2,030,000
Total Current Liabilities 4,938,117 5,304,517
Non-Current Liabilities:
Revenue Bonds Payable - Long-Term Portion 26,451,000 25,590,000
Payable to U.S.A. for Water Rights - Long-Term Portion 609,620 639,388
Customer Deposits 524,376 445,560
Accrued Compensated Absences Long-Term Portion 74,380 4,543
Total Non-Current Liabilities 27,659,376 26,679,491
Total Liabilities 32,597,493 31,984,008
NET ASSETS
Invested in Capital Assets, Net of Related Debt 21,981,460 25,324,447
Restricted for Debt Service 2,005,374 1,961,769
Restricted for Construction 1,930,733 1,974,102
Umestricted 5,625,512 4,592,176
Total Net Asssets $ 31,543,079 $ 33,852,494
26
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City of Paris, Texas
Statement of Revenues, Expenses and Changes in Fund Net Assets
Proprietary Funds
For the Year Ended September 30,2005
Statement 8
Water and Sewer Water and Sewer
Enterprise Fund Enterprise Fund
Current Year Prior Year
Operating Revenues:
Charges for Sales and Services:
Water Sales and Taps $ 7,069,193 $ 6,158,999
Sewer Charges and Taps 4,670,660 4,293,315
Sanitation Billing Fees 69,700 70,844
Service Charges 55,759 62,011
Industrial Surcharges 161,330 137,014
Miscellaneous 134,209 207,679
Total Operating Revenues 12,160,851 10,929,862
Operating Expenses:
Personnel 2,889,098 3,054,655
Supplies 746,722 689,692
Contractual 1,642,986 1,253,184
Maintenance 273,718 359,189
Sundry Charges 237,839 311,598
Other 132,997 122,942
Depreciaton 3,050,824 2,798,082
Total Operating Expenses 8,974,184 8,589,342
Operating Income 3,186,667 2,340,520
Non-operating Income (Expense):
Investment Earnings 70,730 191,576
Contribution Income 602,111 593,660
Interest Expense - Revenue Bonds (1,399,554) (1,264,725)
Amortization of Bond Issue Expense (112,930) (116,125)
Bank Charges (6,828) (2,722)
Loss on Abandonment of Assets (47,351) (10,839)
Amortization of Water Rights (13,663) (13,663)
Net Non-operating Income (Expense) (907,485) ( 622,838)
Income (Loss) Before Operating Transfers 2,279,182 1,717,682
Transfers In 434,445 58,003
Transfers Out (5,023,042) (1,293,457)
Changes in Net Assets (2,309,415) 482,228
Special Item (408,088)
Total Net Assets - Beginning 33,852,494 33,778,354
Total Net Assets - Ending $ 31,543,079 $ 33,852,494
The accompanying notes to the fmancial statements are an integral part of this statement.
27
City of Paris, Texas
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30,2005
Statement 9
Water and Sewer Water and Sewer
Enterprise Fund Enterprise Fund
Current Year Prior Year
Cash Flows from Operating Activities
Receipts from Customers and Users $11,843,670 $ 10,703,577
Payments to Suppliers (1,379,851) (1,506,091)
Payments to Employees (2,815,416) (3,143,748)
Payments to Contractors (1,755,758) (1,147,509)
Receipts (Payments) for Interfund Payables (554,692) 2,223,065
Net Cash Provided by Operating Activities 5,337,953 7,129,294
Cash Flows from Noncapital Financing Activities
Transfers In 434,445 58,003
Transfers Out (1,351,885) (1,293,457)
Net Cash Used by Noncapital Financing Activities (917,440) (1,235,454)
Cash Flows from Capital and Related Financing Activities
Purchase of Fixed Assets (648,334) (1,783,316)
Principal Paid on Revenue Bonds (2,204,200) (1,945,000)
Principal Paid on Water Rights (28,863) (27,985)
Principal Paid on Capital Leases (6,459) (14,870)
Interest Paid on Revenue Bonds (1,476,800) (1,269,271)
Agent Fees Paid on Revenue Bonds ( 6,828) (2,722)
Net Cash Used by Capital and Related Financing Activities (4,371,484) (5,043,164)
Cash Flows from Investing Activities
Interest on Investments 184,359 212,362
Purchase of Investment Securities (1,410,000) (850,000)
Maturities of Investments 2,944,879 2,207,677
Net Cash Provided by Investing Activities 1,719,238 1,570,039
Net Increase (Decrease) in Cash and Cash Equivalents 1,768,267 2,420,715
Cash and Cash Equivalents - Beginning 5,185,339 2,764,624
Cash and Cash Equivalents - Ending $ 6,953,606 $ 5,185,339
The accompanying notes to the fmancial statements are an integral part of this statement.
28
City of Paris, Texas
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2005
Statement 9
(Continued)
Water and Sewer Water and Sewer
Enterprise Fund Enterprise Fund
Current Year Prior Year
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities:
Operating Income (Loss) $ 3,186,667 $ 2,340,520
Adjustments to Reconcile Operating Income to Net Cash
Provided by (Used by) Operating Activities:
Depreciation 3,050,824 2,798,082
Increase in Accounts Receivable (238,573) (231,947)
Decrease (Increase) in Inventory 11,425 (22,670)
Increase in Customers' Deposits 78,816 5,662
(Decrease) Increase in Due to Other Funds (554,692) 2,186,610
Decrease in Due from Other Funds 36,455
Increase (Decrease) in Accrued Compensated Absences 73,682 (89,093)
(Decrease) Increase in Accounts Payable (338,712) 105,675
Total Adjustments 2,082,770 4,788,774
Net Cash Provided by (Used by) Operating Activities $ 5,269,437 $ 7,129,294
Noncash Investing, Capital, and Financing Activities:
Decrease in Market Value of Investments $ (106,696) $ (14,961)
Capital Contributions 602,111 593,660
Special Item 408,088
General Long-Term Debt Transferred to
Water and Sewer Fund 3,637,400
29
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p
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
I. Summary of Significant Accounting Policies
A. Reporting Entity
The City of Paris, Texas (the City), operates under a council-manager form of government with
the mayor and six council members being elected. The accompanying financial statements present
the government and its component unit. The discretely presented component unit is reported in a
separate column in the government-wide financial statements (see note below for a description) to
emphasize that it is legally separate from the government.
Discretely Presented Component Unit: The Paris Economic Development Corporation (PEDe) is
a governmental non-profit corporation established July 19, 1993, funded by a quarter percent sales
tax. PEDC was organized exclusively for the purpose of benefiting and accomplishing public
purposes of the City of Paris, Texas, by promoting, assisting, and enhancing economic
development activities for the City as provided by the Development Corporation Act of 1979. The
business and affairs are managed by a five-member board of directors appointed by the governing
body of the City of Paris, Texas, Complete fmancial statements for PEDC may be obtained at its
administration office at 1125 Bonham Street, Paris, Texas 75460.
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net assets and the statement of
changes in net assets) report information on all of the nonfiduciary activities of the primary
government and its component unit. For the most part, the effect of interfund activity has been
removed from these statements. Governmental activities, which normally are supported by taxes
and intergovernmental revenues, are reported separately from business-type activities, which rely
to a significant extent on fees and charges for support. Likewise, the primary government is
reported separately from the legally separate component unit.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or privileges
provided by a given function or segment and 2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead as general
revenues.
C. Measurement Focus, Basis of Accounting and Basis of Presentation
The government-wide fmancial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary
fund financial statements. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized
as revenues in the year for which they are levied. Grants and similar items are recognized as
revenue as soon as all eligibility requirements imposed by the provided have been met.
The accounts of the City are organized on the basis of funds. A fund is an independent fiscal and
accounting entity with a self-balancing set of accounts. Fund accounting segregates funds
according to their intended purpose and is used to aid management in demonstrating compliance
with fmance-related legal and contractual provisions. The minimum number of funds is
maintained consistent with legal and managerial requirements.
30
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
L Summary of Significant Accounting Policies (Continued)
C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued)
The City has the following fund types:
Governmental Funds are used to account for the City's general government activities,
Governmental fund types use the flow of current financial resources measurement focus and the
modified accrual basis of accounting. Under the modified accrual basis of accounting revenues
are recognized when susceptible to accrual (i.e. when they are "measurable and available").
"Measurable" means 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. The City considers all revenues available if they are collected within 60 days after year-
end. Expenditures are recorded when the related fund liability is incurred, except for unmatured
interest on general long-term debt which is recognized when due, and certain compensated
absences and claims and judgments which are recognized when the obligations are expected to be
liquidated with expendable available financial resources.
Property taxes, franchise taxes, licenses, interest, and special assessments are susceptible to
accrual. Sales taxes are recognized as revenue in the period when the exchange transaction on
which the tax is imposed occurs. Other receipts and taxes become measurable and available when
cash is received by the City and are recognized as revenue at that time.
Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to
accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying
expenditures have been incurred and all other grant requirements have been met.
Governmental Funds include the following fund types:
The General Fund is the primary operating fund of the City. It accounts for all fmancial
resources of the general government except those required to be accounted for in another fund.
The Special Revenue Funds account for revenue sources that are legally restricted to
expenditures for specific purposes (not including expendable trusts or major capital projects).
The Capital Projects Funds account for the acquisition or construction of major capital
projects, other than those fmanced by proprietary or non-expendable trust funds.
The Debt Service Funds account for the servicing of general long-term debt not being fmanced
by proprietary or non-expendable trust funds.
The Permanent Fund accounts for assets held by the City pursuant to an agreement whereby
the principle position remains intact but the earnings may be used to achieve the objectives of
the fund.
31
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
I. Summary of Significant Accounting Policies (Continued)
C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued)
Proprietary Funds are accounted for on the flow of economic resources measurement focus and
use the accrual basis of accounting. Under this method, revenues are recorded when earned and
expenses are recorded at the time liabilities are incurred. The City applies all applicable Financial
Accounting Standards Board pronouncements issued after November 30, 1989, in accounting and
reporting for its proprietary operations.
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 water and sewer enterprise fund are charges to customers for
sales and services. The water and sewer fund also recognizes as operating revenue the portion of
tap fees intended to recover the cost of connecting new customers to the system. Operating
expenses for enterprise funds include the cost of sales and service, administrative expenses, and
depreciation on capital assets, All revenues and expenses not meeting this definition are reported
as nonoperating revenues and expenses.
Proprietary funds include the following:
The Enterprise Fund is used to account for operations that are fmanced and operated in a
manner similar to private business enterprises, where the governing body has decided that the
determination of revenues earned, costs incurred, and/or net income is necessary for
management accountability.
D. Assets, Liabilities and Equity
1. Deposits and Investments
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 date of acquisition.
Statutes authorize the City and PEDC to invest in obligations of the U. S. Treasury, direct
obligations of the State of Texas, other obligations guaranteed or insured by the State of Texas
or the United States, obligations of states and political subdivisions of any state meeting certain
rating requirements, certificates of deposit, and fully collateralized direct repurchase
agreements having a defmed termination date.
The City did not engage in repurchase or reverse repurchase agreement transactions during the
current year.
Investments are reported in the accompanying balance sheet at fair value with changes in fair
value being reported as part of investment income.
32
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
I. Summary of Significant Accounting Policies (Continued)
D. Assets, Liabilities and Equity (Continued)
2. Receivables and Payables
Transactions between funds that would be treated as revenues, expenditures, or expenses if the
involved organizations were external to the governmental unit (quasi-external transactions) are
accounted for as revenues, expenditures, or expenses in the funds involved.
Transactions which constitute reimbursements to a fund for expenditures or expenses initially
made from that fund which were properly applicable to another fund are recorded as
expenditures or expenses in the reimbursing fund and as reductions of the expenditure or
expense in the fund that is reimbursed.
The City's ad valorem taxes are levied on October 1 and are due no later than January 31 of the
following year. Taxes become delinquent February 1, after which time penalties and interest
and, if not paid by July, attorney's collection fees are added. A tax lien attaches to property
(real and personal) on January 1 of each year to secure the payment of all taxes, penalties, and
interest ultimately imposed on the property. The lien is effective until all such amounts are
paid.
3. Inventories and Prepaids
Inventories are valued at cost using the fIrst-in, fIrst-out method. Inventories of governmental
funds are recorded as expenditures when consumed rather than when purchased.
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both government-wide and fund fmancial statements.
4. Restricted Assets
Certain proceeds of the City's enterprise fund revenue bonds, as well as certain resources set
aside for their repayment, are classified as restricted assets on the balance sheet because their
use is limited by applicable bond covenants. The Water Revenue Construction Fund is used to
report those proceeds of revenue bond issuances that are restricted for use in construction. The
Revenue Bond Sinking Funds are used to segregate resources accumulated for debt service
payments over the next twelve months. The Revenue Bond Reserve and Contingency
Accounts are used to report resources set aside to make up potential future deficiencies in the
Revenue Bond Sinking Funds and to meet unexpected contingencies or to fund asset renewals
and replacements. The Pat Mayse Reserve Fund is being accumulated to assist in funding
future water storage rights.
5. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, ,
bridges, sidewalks, and similar items) are reported in the applicable governmental or business-
type activities columns in the government-wide financial statements. Capital assets are defined
by the government as assets with an initial, individual cost of more than $5,000 and an
estimated useful life in excess of two years. Such assets are recorded at historical cost or
33
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
I. Summary of Significant Accounting Policies (Continued)
D. Assets, Liabilities and Equity (Continued)
5. Capital Assets (Continued)
estimated historical cost if purchased or constructed. Donated capital assets are recorded at
estimated fair market value at the date of donation. Infrastructure acquired prior to the
implementation of GASB 34 are included in the fmancial statements.
The cost of normal maintenance and repairs that do not add to the value of the asset or
materially extend assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase of capital assets of business-type
activities is included as part of the capitalized value of the assets constructed. The total
interest expense incurred by the City during the current fiscal year was $ 1,423,378. Of this
amount, $23,824 was included as part of the cost of capital assets under construction in
connection with water line and sewer line construction projects.
Property, plant, and equipment of the primary government, as well as the component unit, is
depreciated using the straight line method over the following estimated useful lives:
Buildings and Improvements
Furniture, Fixtures and Equipment
Vehicles
Public Domain Infrastructure
System Infrastructure
20-40 years
5-10 years
5 years
25-45 years
25-30 years
6. Compensated Absences
Vacation and sick leave benefits are accumulated by City employees in accordance with
guidelines suggested in the City's personnel policies.
7. Long-Term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities, business-type activities, or proprietary fund type statement
of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and
amortized over the life of the bonds using the effective interest method. Bonds payable are
reported net of the applicable bond premium or discount. Bond issuance costs are reported as
deferred charges and amortized over the term of the related debt.
34
City of Paris, Texas
Notes to Financial Statements
September 30,2005
r. Summary of Significant Accounting Policies (Continued)
D, Assets, Liabilities and Equity (Continued)
7. Long-Term Obligations (Continued)
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as issuance costs, during the current period. The face amount of debt issued
is reported as other fmancing sources. Premiums received on debt issuances are reported as
other financing sources while discounts on debt issuances are reported as other fmancing uses.
Issuance costs, even if withheld from the actual net proceeds received, are reported as debt
service expenditures.
8. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance for
amounts that are not available for appropriation or are legally segregated for a specific
purpose. Designations of fund balance represent tentative management plans that are subject
to change.
II. Reconciliation of Government-wide and Fund Financial Statements
A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the
Government-wide Statement of Net Assets
The governmental fund balance sheet includes a reconciliation between fund balance - total
governmental funds and net assets - governmental activities as reported in the government-wide
statement of net assets. One element of that reconciliation explains that "long-term liabilities,
including bonds payable, are not due and payable in the current period and therefore are not
reported in the funds." The details of this $14,569,657 difference are as follows:
Bonds payable
Less: Deferred charge for issuance costs (to be amortized
over the life of the debt)
Accrued interest payable
Capital leases payable
Loan payable
Compensated absences
Net adjustment to reduce fund balance - total governmental funds
to arrive at net assets - governmental activities
$ 13,776,800
(210,857)
184,116
238,734
49,119
531,745
$ 14,569,657
B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues,
Expenditures, and Changes in Fund Balances and the Government-wide Statement of Activity
The governmental fund statement of revenues, expenditures, and changes in fund balances
includes a reconciliation between net changes in fund balances - total governmental funds and
changes in net assets of governmental activities as reported in the government-wide statement of
activities. One element of that reconciliation explains that "governmental funds report capital
outlays as expenditures. However, in the statement of activities the cost of those assets is
allocated over their estimated useful lives and reported as depreciation expense." The details of
35
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
II. Reconciliation of Government-wide and Fund Financial Statements (Continued)
B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues,
Expenditures, and Changes in Fund Balances and the Government-wide Statement of Activity
(Continued)
this $653,614 difference are as follows:
Capital outlay
Depreciation expense
Net adjustment to decrease net changes in fund balances -
total govemmental funds to arrive at changes in net assets
of governmental activities
$ 3,163,974
(2,510,360)
$ 653,614
Another element of that reconciliation states that "the issuance of long-term debt (e.g. bonds,
leases) provides current financial resources to governmental funds, while the repayment of the
principal of long-term debt consumes the current fmancial resources of governmental funds.
Neither transaction, however, has any effect on net assets. Also, governmental funds report the
effect of issuance costs, premiums, discounts, and similar items when debt is fIrst issued, whereas
these amounts are deferred and amortized in the statement of activities." The details on this
$1,054,089 difference are as follows:
Amortization of issuance costs
Principal repayments
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities
$ (11,283)
1,065,372
$ 1,054,089
Another element of that reconciliation states that "revenues in the statement of activities that do
not provide current fmancial resources are not reported as revenues in the funds." The details of
the $155,911 difference are as follows:
Deferred revenue
Donated assets
Net adjustment to increase net changes in fund balances-
total governmental funds to arrive at changes in net assets
of governmental activities
$ (149,545)
305,456
$ 155,911
36
City of Pans, Texas
Notes to Financial Statements
September 30, 2005
III. Stewardship. Compliance and Accountability
A. Budgetary Information
Annual budgets are adopted on a basis consistent with generally accepted accounting principles
for all governmental funds except the capital projects funds, proprietary funds, and library trust
funds. The budget for the Capital Projects Funds is legally adopted for specific projects and may
exceed one year. Formal budgetary integration is not employed for the proprietary funds. The
City adopts an annual, informal budget as a financial plan for all proprietary funds. The library
trust funds include non-budgeted financial activities, which are not subject to an appropriated
budget and the appropriation process or to any legally authorized non-appropriated budget review
and approval process. At the close of each fiscal year, any unencumbered appropriation balance
(appropriations including prior year encumbrances less current year expenditures and
encumbrances) lapse or revert to the undesignated fund balance.
At least thirty days prior to the beginning of each fiscal year, the City Manager submits to the City
Council a proposed budget for the fiscal year beginning on the following October 1. The
operating budget which represents the financial plan for the ensuing fiscal year includes proposed
expenditures and the means of fmancing them. Public hearings are conducted at which all
interested persons' comments concerning the budget are heard.
The budget for the next fiscal year is legally enacted by the City Council through passage of an
ordinance not later than the twenty-seventh day of the last month of the fiscal year. If the City
Council does not enact the budget within this time period, then the budget as submitted by the City
Manager becomes the legally authorized budget.
Expenditures may not legally exceed appropriations at the department level for each legally
adopted annual operating budget. The City Manager may, without Council approval, transfer
appropriation balances from one expenditure account to another within a department or agency of
the City. The City Council, however, must approve any transfer or unencumbered appropriation
balances or portions thereof from one department or agency to another. During the year ended
September 30, 2005, there were no budget amendments as no supplemental budgetary
appropriations were necessary during the year.
B. Excess of Expenditures Over Appropriations
For the year ended September 30, 2005, expenditures exceeded appropriations in the City Council,
Finance, Police, Traffic and Public Lighting, Emergency Medical Services, and in Contingency .
appropriations.
These over expenditures were funded by available fund balance and other fmancing sources.
IV. Detailed Notes on All Funds
A. Deposits and Investments
Custodial credit risk for deposits is the risk that in the event of a bank failure, the City's deposits
may not be returned or the City will not be able to recover collateral securities in the possession of
an outside party. The City's policy requires deposits to be secured by collateral valued at market
or par, whichever is lower, less the amount of the Federal Deposit Insurance Corporation
insurance (FDIC). Collateral agreements must be approved prior to deposit of funds as provided
by law. The City was not exposed to custodial credit risk since deposits are insured or collaterized
with securities held by the pledging fmancial institution's agent in the name of the City.
37
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
IV. Detailed Notes on All Funds (Continued)
A. Deposits and Investments (Continued)
As of September 30, 2005, the government had the following investments:
Investment Type
Government National Mortgage Corporation
Federal Home Loan Mortgage Corporation
Federal National Mortgage Corporation
Total Fair Value
Portfolio W eighted Average Maturity
F air Value
$ 154,587
437,919
1,621,520
$ 2,214,026
W eighted Average
Maturity (Years)
2.84
2.90
6.39
5.443
Interest Rate Risk. Generally the City will attempt to match its investments with anticipated cash
flow requirements. Unless matched to a specific cash flow, the City will not directly invest in
securities maturing more than 10 years from the date of purchase.
The basis used by the Finance Director to determine whether market yields are being achieved
shall be the six-month U.S. Treasury Bill and the Average Fed Funds rate.
Concentration of Credit Risk. The City diversifies its investments by security type and institution.
With the exception of obligations of the United States or its agencies and authorized pools, no
more than 50% of the City's total investment portfolio will be invested in a single fmancial
institution with the exception of its local depository.
Custodial Credit Risk - Deposits. In the case of deposits, this is the risk that in the event of a bank
failure, the City's deposits may not be returned to it. As of September 30, 2005, the City's bank
balance was not exposed to custodial credit risk. As of the same date PEDC had exposure to
custodial credit risk because $1,318 of the PEDC bank balance of$626,739 was uninsured.
Custodial Credit Risk - Investments. For an investment, this is the risk that, in the event of the
failure of the counterparty, the City's may not be able to recover the value of its investments or
collateral securities that are in the possession of an outside party. As of September 30, 2005, the
City did not have custodial credit risk exposure.
B. Receivables
Receivables as of year-end, including the applicable allowances for uncollectible accounts, are as
follows:
38
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
[v. Detailed Notes on All Funds (Continued)
B, Receivables (Continued)
Special Capital Debt
General Revenue Projects Service Enterprise
Receivables:
Interest $ $ $ $ $ 7,991
Property Taxes 761,852 70,617
Sales Tax 894,000
Accounts 161,768 195 2,027,923
Other Governments 146,388 618,421 71,404
Street Assessments 26,473
Fines 130,926
EMS 1,142,178
Notes Receivable 69,474
Gross Receivables 3,263,585 688,090 71,404 70,617 2,035,914
Less: Allowable for
Uncollectibles 1,146,919 17,654
Net Total Receivables $ 2,116,666 $ 688,090 $ 71,404 $ 52,963 $ 2,035,914
Receivables as of year-end for PEDC are as follows:
Sales Tax Receivable
Accrued Interest Receivable
Note Receivable
Note Receivable
$ 178,778
10,266
3,036,168
1,400,000
$ 4,625,212
PEDC has a note receivable bearing interest at 7.00% from a corporation located in Paris, Texas, to
assist with the purchase of an existing business. The note is due in monthly installments of principal
and interest of $32,000 through April 15, 2017, at which time the remaining principal is due. This
note is secured by a security agreement, which lists PEDC as having a subordinate interest in all
respects to the financial institution involved and to other individuals as listed in the security
agreement. The balance of this note at September 30, 2005, was $3,036,168.
PEDC has a second non-interest bearing note receivable from a Minnesota corporation to assist with
plans to create and operate a computer services business in Paris, Texas. The note is due in annual
installments of $100,000 beginning June 15, 2005, with the provision that the corporation shall
receive credits against the annual principal installments equal to $1 for every $10 in salaries which
the corporation pays during the preceding year to all new employees working for the corporation in
Paris, Texas. The maximum amount of the credit allowed in any twelve month period shall not
exceed the annual loan payment. The balance of this note at September 30,2005, was $1,400,000.
39
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
IV. Detailed Notes on All Funds (Continued)
C. Capital Assets
Capital Asset Activity for the year ended September 30,2005, follows:
Balance Balance
September 30, September 30,
2004 Increases Decreases 2005
Governmental Activities
Capital Assets, Not Being Depreciated:
Land $ 5,903,022 $ $ $ 5,903,022
Construction in Progress 1,514,303 2,779,551 744,045 3,549,809
Total Capital Assets,
Not Being Depreciated 7,417,325 2,779,551 744,045 9,452,831
Capital Assets, Being Decpreciated:
Buildings 9,870,329 9,870,329
Improvement Other Than Buildings 2,879,665 744,045 3,623,710
Machinery and Equipment 15,502,561 385,422 281,722 15,606,261
Infrastructure 33,812,205 305,455 34,117,660
Total Capital Assets,
Being Depreciated 62,064,760 1,434,922 281,722 63,217,960
Less Accumulated Depreciation for:
Buildings 2,222,798 249,645 2,472,443
Improvements Other Than Buildings 979,366 115,499 1,094,865
Machinery and Equipment 12,027,421 878,276 281,722 12,623,975
Infrastructure 15,322,607 1,266,940 16,589,547
Total Accumulated Depreciation 30,552,192 2,510,360 281,722 32,780,830
Total Capital Assets,
Being Depreciated, Net 31,512,568 (1,075,438) 30,437,130
Governmental Activities,
Capital Assets, Net $ 38,929,893 $ 1,704,113 $ 744,045 $ 39,889,961
40
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
IV. Detailed Notes on All Funds (Continued)
C. Capital Assets (Continued)
Balance Balance
September 30, September 30,
2004 Increases Decreases 2005
Business-type Activities
Capital Assets, Not being Depreciated:
Land $ 282,672 $ $ $ 282,672
Construction in Process 89,639 541,362 127,497 503,504
Total Capital Assets,
Not Being Depreciated 372,311 541,362 127,497 786,176
Capital Assets, Being Depreciated:
Plant, Pumps, and Motors 31,740,002 31,740,002
Distribution System 35,432,519 526,167 40,074 35,918,612
Collections System 20,202,415 241,897 56,268 20,388,044
Maintenance, Equipment and Vehides 1,933,486 1,933,486
Furniture and Equipment 244,222 244,222
Total Capital Assets,
Being Depreciated 89,552,644 768,064 96,342 90,224,366
Less Accumulated Depreciation for:
Plants, Pumps, and Motors 15,791,459 1,104,935 16,896,394
Distribution System 10,970,719 1,144,325 22,130 12,092,914
Collection System 8,349,428 699,889 26,861 9,022,456
Maintenance Equipment and Vehicles 1,620,994 100,286 1,721,280
Furniture and Equipment 241,449 1,389 242,838
Total Accumulated Depreciation 36,974,049 3,050,824 48,991 39,975,882
Total Capital Assets,
Being Depreciated, Net 52,578,595 (2,282,760) 47,351 50,248,484
Business-type Activities,
Capital Assets, Net $ 52,950,906 $ (1,741,398) $ 174,848 $ 51,034,660
Component Unit
Capital Assets, Not Being Depreciated
Land Development Costs $ 1,266,622 $ 138,747 $ 160,618 $ 1,244,751
41
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
IV. Detailed Notes on All Funds (Continued)
C. Capital Assets (Continued)
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental Activities:
General Government
Finance
Public Safety
Public W orks,Including Depreciation of General Infrastructure Asset
Emergency Medical Service
Cox Field
Library
Total Depreciation Expense - Governmental Activities
$ 93,279
6,997
338,731
1,632,523
197,982
123,954
116,894
$ 2,510,360
Business-type Activities:
Water and Sewer - Total Depreciation Expense. Business-type Activities
$ 3,050,824
D. Construction Commitments
The City has active construction projects as of September 30, 2005. At year-end the City's
commitments with contractors are as follows:
Project
Police Station
Wade Park, Lamar A venue, and Drainage
Spent
To Date
$ 1,884,324
Remaining
Commitment
$ 2,454,452
970,957
$ 3,425,409
$ 1,884,324
The commitment for Wade Park, Lamar A venue, and drainage is being fmanced by existing
Revenue Bond Funds and the police station will be financed from existing Certificates of
Obligation Construction Funds.
The City has acquired an existing building and land for $1,275,000 to be improved for a law
enforcement center. The total expected project cost is $6,000,000 which is to be financed from the
proceeds of the Combination Tax and Revenue Certificates of Obligation, Series 2002 in the
amount of $6,060,000.
42
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
IV. Detailed Notes on All Funds (Continued)
E, Interfund Receivables, Payables, and Transfers
Interfund balances at year-end consisted of the following individual fund receivables and payables:
Fund Receivable Payable
General Fund (Pooled Cash Account Receivable) $ 2,018,162 $
Special Revenue Fund - Criminal Justice Division
Grant (Payable is overdraft in Pooled Cash Account) 175,244
Water and Sewer Fund (Payable is overdraft in
Pooled Cash Account) 1,842,918
$ 2,018,162 $ 2,018,162
Interfund Transfers:
Transfer In
General
Debt Other Water Long-Term
General Service Governmental and Sewer Debt
Fund Fund Funds Fund (Non-Cash) Total
Transfer Out:
General Fund $ $ 30,000 $ 282,777 $ 36,456 $ $ 349,233
Debt Service Fund 397,989 397,989
Other Governmental Funds 18,472 22,323 40,795
Water and Sewer Fund 1,090,000 261,885 3,671,157 5,023,042
Capital Projects 93,940 93,940
$ 1,202,412 $ 291,885 $ 305,100 $ 434,445 $ 3,671,157 $ 5,904,999
During the year ended September 30,2005, the City made the following transfers:
A budgeted transfer from Water and Sewer Fund to General Fund - $1,090,000.
Debt previously reported in General Long-Term Debt, as part of the Sewer 2003
Refunding Bonds, was transferred to Water and Sewer Fund - $3,671,157.
Assets transferred from Debt Service Fund to Water and Sewer Fund related to the
Series 2003 Refunding Bonds - $397,989.
Assets transferred from Water and Sewer Bonds to pay portion of debt issue assigned to
Water and Sewer Fund - $261,885.
Liabilities of Insurance Fund transferred to General Fund - $275,494 and General Fund
transfer of asset to Library Memorial Fund - $7,283.
Liabilities of General Fund liquidated by Capital Projects Fund - $93,940.
43
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
IV. Detailed Notes on All Funds (Continued)
E. Interfund Receivables, Payables, and Transfers (Continued)
Miscellaneous Transfers:
General Fund to Water and Sewer Fund
General Fund to Debt Service Fund
Other Governmental to General Fund
Other Governmental (Special Revenue)
to Permanent Library Fund
$ 36,456
30,000
18,472
22,323
F, Capital Leases
The City has lease agreements as lessee for fmancing the acquisition of equipment. These lease
agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at
the present value of the future minimum lease payments as of the date of their inception.
The assets acquired through capital leases are as follows:
Governmental
Activities
Asset:
Machinery and Equipment
Less: Accumulated Depreciation
Total
$ 830,802
(618,299)
$ 212,503
The following is a schedule of the future minimum lease payments under these capital leases and
the present value of the net minimum lease payments at September 30, 2005:
September 30,
2006
2007
2008
2009
Total Minimum Lease Payments
Amount Representing Interest
Present Value of Future
Minimum Lease Payments
Obligation
$ 142,212
68,590
27,290
10,918
249,010
10,276
$ 238,734
44
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
IV. Detailed Notes on All Funds (Continued)
G. Long-TermDebt
General Obligation Certificates of Obligation and Note:
$120,600 note payable for the construction of aircraft hangars and associated appurtenances at the
City's Cox Field was obtained February 27, 1991. The note bears interest at 5% with principal and
interest payments of$9,677 made in annual installments through March 2011.
$6,000,000 Combination Tax and Revenue Certificates of Obligation, Series 2000, due in annual
installments varying from $220,000 to $495,000 with final payment due December 15, 2019.
Interest is payable semi-annually at rates ranging from 5.30% to 6.75%. On December 15, 2009,
or any date thereafter, unpaid principal installments may be prepaid or redeemed prior to their
scheduled due dates at the City's option.
$6,060,000 Combination Tax and Revenue Certificates of Obligation, Series 2002, due in annual
installments varying from $210,000 to $460,000 with final payment due December 15, 2021.
Interest is payable semi-annually at rates ranging from 4.00% to 4.70%. On December 15,2012,
or any date thereafter, unpaid principal installments may be prepaid or redeemed prior to their
scheduled due dates at the City's option.
$7,130,000 General Obligation Refunding Bonds, Series 2003, due in annual installments varying
from $410,000 to $800,000 with fmal payment due December 15,2014. Interest is payable semi-
annually at rates ranging from 2.5% to 3.9%. On December 15, 2009, or any date thereafter,
unpaid principal installments may be prepaid or redeemed prior to their scheduled due dates at the
City's option.
The ordinances require that ad valorem taxes be levied and collected at a rate sufficient to pay
principal and interest as they come due. They also require that these funds be placed in special
Interest and Sinking Funds created solely for the benefit of the obligations. At September 30,
2005, the balances in the Interest and Sinking Funds are $1,087,396. Revenues from the
Waterworks and Sewer System are also pledged to secure the Certificates of Obligation.
Water and Sewer Revenue Bonds and Certificates of Obligation:
$5,000,000 Waterworks and Sewer System Revenue Bonds, Series 1997, due in annual
installments varying from $235,000 to $420,000 with [mal payment due June 15,2016. Interest is
payable semi-annually at rates ranging from 4.5% to 6.5%.
$6,905,000 Waterworks and Sewer System Revenue Refunding Bonds, Series 1998, due in annual
installments varying from $635,000 to $850,000 with final payment due December 15, 2011.
Interest is payable semi- annually at rates ranging from 4.3% to 4.95%.
$5,810,000 Tax and Revenue Refunding Bonds, Series 1998, due in annual installments varying
from $540,000 to $715,000 with [mal payment due December 15,2011. Interest is payable semi.
annually at rates ranging from 4.3% to 4.95%.
$9,500,000 Waterworks and Sewer System Revenue Bonds, Series 2000, due in annual
installments varying from $380,000 to $835,000 with [mal payment due June 15,2020. Interest is
payable semi-annually at rates ranging from 5.375% to 6.875%.
45
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
V. Detailed Notes on All Funds (Continued)
G. Long-Term Debt (Continued)
Water and Sewer Revenue Bonds and Certificates of Obligation: (Continued)
$5,130,000 Tax and Revenue Refunding Bonds, Series 2001, due in annual installments varying
from $485,000 to $605,000 with fmal payment due December 15,2011. Interest is payable semi-
annually at rates ranging from 3.35% to 4.125%.
On June 15,2007, for series 1997; on December 15, 2008, for both 1998 series; on June 15,2010,
for Series 2000, and on December 15, 2009, for Series 2001, or any date thereafter, the unpaid
installments of principal may be prepaid or redeemed prior to their scheduled due dates at the
option of the City.
The revenues of the Waterworks and Sewer System, after deducting the expenses of operation and
maintenance, are pledged for payment of bonds and interest. The ordinances authorizing the
issuance of the bonds require that monthly deposits be made to Interest and Sinking Funds in
amounts sufficient to pay the next maturing bonds and interest.
A Reserve Fund is required to be accumulated with a required reserve amount of at least
$1,677,519, the average annual principal and interest requirements of the 1997, 1998, and 2000
Series bonds. The ordinances also call for the creation of a Contingency Fund into which equal
monthly deposits are made until the balance is $500,000. At September 30,2005, the balances in
the Interest and Sinking Funds, Reserve Fund, and Contingency Fund are $2,536,471, $1,789,443,
and $688,145, respectively. In addition, Series 1994 and Series 1998 Tax and Revenue Refunding
Bonds ordinances require that ad valorem taxes be levied and collected at a rate sufficient
to pay bonds and interest as they come due.
Water Rights Debt:
The City has rights to water storage at Pay Mayse Lake. Payments for these rights are $49,826
due annually, including principal and interest at 3.137% through 2017 and $25,211 for ten years
after that.
Long-term debt service requirements for the next five years and after in five year increments
are as follows:
46
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
IV. Detailed Notes on All Funds (Continued)
G. Long-Term Debt (Continued)
Year Ending General Obligation
September 30, Principal Interest
2006 $ 730,021 $ 616,952
2007 764,982 585,195
2008 799,962 551,767
2009 832,560 516,099
2010 872,578 478,753
2011-2015 4,795,816 1,784,292
2016-2020 4,130,000 753,137
2021-2025 900,000 42,660
$ 13,825,919 $ 5,328,855
Water and Sewer
Principal Interest
$ 2,602,200 $ 1,353,058
2,717,600 1,233,751
2,843,000 1,106,798
2,975,800 973,077
3,116,200 832,401
10,638,400 2,258,542
4,160,000 664,480
$ 29,053,200
$ 8,422,107
A summary of long-term liability transactions for the year ended September 30, 2005, follows:
Balance Balance
September 30, September 30, Due Within
2004 Additions Reductions 2005 One year
Governmental Activities
Certificates of Obligation $ 18,235,000 $ $ 4,458,200 $ 13,776,800 $ 730,021
Note 55,996 6,877 49,119 7,221
Capital Leases 476,429 237,695 238,734 134,936
Compensated Absences 214,641 589,834 272,730 531,745 212,490
Governmental Activities
Long-Term Liabilities $ 18,982,066 $ 589,834 $ 4,975,502 $ 14,596,398 $ 1,084,668
Business-type Activities
Revenue Bonds $ 27,620,000 $ 3,637,400 $ 2,204,200 $ 29,053,200 $ 2,602,200
Water Rights Debt 668,251 28,863 639,388 29,768
Capital Leases 6,459 6,459
Compensated Absences 15,490 87,773 14,091 89,172 14,792
Business-type Activities
Long-Term Liabilities $ 28,310,200 $ 3,725,173 $ 2,253,613 $ 29,781,760 $ 2,646,760
Component Unit
Bonds Payable $ 3,450,000 $ $ 155,000 $ 3,295,000 $ 165,000
Note Payable 767,332 194,249 573,083 201,620
Note Payable 1,000,000 134,616 865,384 187,427
Component Unit-
Long-Term Liabilities $ 4,217,332 $ 1,000,000 $ 483,865 $ 4,733,467 $ 554,047
For the governmental activities, compensated absences are liquidated by the general fund.
47
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
IV. Detailed Notes on All Funds (Continued)
G. Long-Term Liabilities (Continued)
PEDe has two notes payable to a bank to fund an incentive agreement with a corporation planning
to create and operate a computer services business in Paris, Texas and for funding for an industrial
park. One note bears interest at a rate of 3.692% with principal and interest payments due on a
monthly basis. The balance of the note at September 30, 2005, was $573,083. A second note
bears interest at a rate of 4.942% with principal and interest due on a monthly basis. The balance as
of September 30, 2005, was $865,384. Both notes are secured by a tax assignment and security
agreement and contain, to the extend permitted by law, a right of set off in all accounts PEDC has
with the lender.
PEDC has outstanding Paris Economic Development Corporation Taxable Sales Tax Revenue
Bonds, Series 1998, originally issued at $4,200,000, bearing interest at 6.625% to 7.75%. Principal
payments are due serially in varying annual amounts to September 1, 2018, from $165,000 to
$365,000.
Sales and Use Taxes (one-quarter of one percent) levied by the City of Paris, Texas, within its
boundaries under the Development Corporation Act of 1979, are pledged for payment of bonds and
interest. The resolution authorizing the issuance of the bonds requires that monthly deposits be
made to the Debt Service Fund in an amount sufficient to pay the next maturing bonds and interest.
A Reserve Fund is required to be maintained with a balance of at least $388,708, the average
annual principal and interest requirements of the bonds. At September 30,2005, the balances in the
Debt Service Fund and Reserve Fund are $29,542 and $410,458, respectively.
Debt Service requirements related to these bonds and notes are as follows:
Year Ending Bond Debt Requirements . Note Payable Note Payable
September 30, Principal Interest Principal Interest Principal Interest Total
2006 $ 165,000 $ 220,224 $ 201,620 $ 18,018 $ 187,427 $ 39,074 $ 831,363
2007 180,000 207,436 209,299 10,340 197,023 29,477 833,575
2008 190,000 193,486 162,164 2,549 207,058 19,442 774,699
2009 200,000 178,761 217,733 8,767 605,261
2010 215,000 166,261 56,143 473 437,877
2011-2015 1,320,000 605,471 1,925,471
2016-2018 1,025,000 138,394 1,163,394
$ 3,295,000 $ 1,710,033 $ 573,083 $ 30,907 $ 865,384 $ 97,233 $ 6,571,640
48
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
IV. Detailed Notes on All Funds (Continued)
H. Restricted Net Assets and Restricted Asset Accounts
The City's bond covenants require certain restrictions of net assets. The restricted portions are as
follows:
Restricted for Revenue Bond Operations and Maintenance
Restricted for Contingency
Total Restricted Net Assets
$ 1,317,229
688,145
$ 2,005,374
Collections of Notes Receivable are restricted by grant agreements to be used for building
rehabilitation.
The balances of the City's restricted asset accounts are as follows:
Certificates of Accrued
Deposits and Interest and
Cash and Cash Other Other
Equivalents Investments Receivables
Customer Deposits $ 189,845 $ 258,388 $
Revenue Bond Contingency 156,412 531,733
Revenue Bond Construction Account 1,426,204 6,025
Revenue Bond Current Debt Service Account 2,536,471
Revenue Bond Future Debt Service Account 371,563 1,417,880 7,991
Funding Future Water Storage Rights 2,272,010
Notes Receivable 69,474
Total Restricted Assets $ 6,952,505 $ 2,214,026 $ 77,465
V. Other Information
A. Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of
assets; errors and omissions; injuries to employees; and natural disasters. The City purchases
insurance coverage from commercial insurers and participates in risk pools to limit risk of loss in
these areas. The risk pools maintain adequate protection from catastrophic losses to protect their
financial integrity. Aggregate protection is also maintained to ensure that the City shall at no time
be assessed. The City's contributions are limited to the rates calculated under the agreement.
There has been no significant reduction in insurance coverage during the year ended September
30,2005. There have been no settlements in excess of insurance coverage in any of the prior three
fiscal years. The City has established a partially self-funded group comprehensive health care
program for all employees and approximately 317 employees are covered. Under the program, the
City has contracted with insurance companies to process employee claims and provide reinsurance
for annual individual coverage exceeding $75,000. Effective June 1, 2004, the City adopted a
self-funded group benefits risk pool operated by a Board of Trustees to replace the old health care
program. Activity for this trust is reported in the General Fund. At September 30,2005, this fund
balance sheet reflected a deficit in fund balance of $1,084,583. Should the program be
terminated, the amount payable for unreported claims is estimated at $278,000. All funds of the
City participate in the program based on estimated historical cost information of the amounts
49
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
V. Other Information (Continued)
A. Risk Management (Continued)
needed to pay prior and current-year claims and to establish a reserve for catastrophe losses.
The claims liability is based on the requirements of Governmental Accounting Standards Board
Statement No. 10, which requires that a liability for claims be reported if information prior to the
issuance of the financial statements indicates that it is probable that a liability has been incurred at
the date of the fmancial statements and the amount of the loss can be reasonably estimated. For
the fiscal years ended September 30, 2004 and 2005, changes on unpaid claims liability are as
follows:
2004 2005
Balance at Beginning of Year $ 301,623 $ 324,787
Claims Incurred During the Year 2,787,981 2,540,077
Payments on Claims (2,764,817) (2,424,915)
Balance at End of Year $ 324,787 $ 439,949
B. Related Party
The City Council appoints the governing board of an entity which is legally separate from the
City. The City is not able to impose its will on this entity, and a financial benefit/burden
relationship is not present; therefore, it is considered a related organization.
C. Water Storage Commitments
A contract with the United States of America for water storage space in Pat Mayse Lake entitles
the City to utilize one hundred percent of the storage space between elevations 451.0 and 415.0
feet above sea level.
Forty percent (43,800 acre-feet) is for present storage and the remaining sixty percent (65,800
acre-feet) is for future water storage. The City is to repay the government the entire amount of
construction costs allocated to the water storage right acquired by the City. The City is obligated
to pay 9.46% of the ordinary operation and maintenance cost of the project annually and 4.22% of
major capital replacements when incurred.
Allocated cost for future water storage (60%) is $1,925,722 and the amount to be paid including
accumulated interest mentioned below is to be on a pro rata basis as more storage is acquired by
the City. Interest at 3.137% has been accumulating on this allocated cost since September 30,
1977, and amounts to $2,667,130 at September 30, 2005. The City may, at its option, pay the
interest as it becomes due or allow the interest to continue to accumulate until the storage is used.
D. Water Sales
The City has contracts extending for several years to sell treated and untreated water to five
entities. Total water sales under these contracts to these entities during the year ended September
30, 2005, were approximately $2,332,000.
50
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
V. Other Information (Continued)
E. Civic Center Contract
The City is a party to a contract with the Chamber of Commerce of Lamar County, Inc. whereby
three-sevenths of the hotel/motel tax is to be dedicated to a fund to be used for improving,
enlarging, equipping, repairing, operating, or maintaining a civic center. The contract provides
that the Chamber of Commerce of Lamar County, Inc. will operate the civic center through
September 30,2005.
F. Contingent Liabilities and Commitments
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor
agencies, principally the federal government. Any disallowed claims, including amounts already
collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures
which may be disallowed by the grantor cannot be determined at this time although the City
expects such amounts, if any, to be immaterial.
The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not
presently determinable, it is the opinion of the City's counsel that resolution of these matters will
not have a material adverse effect on the financial condition of the City.
In the past, the City operated a landfill, which was closed several years ago however, the property
is still owned. The City is responsible for post-closure care and maintenance, which is not
expected to be significant for any future year. Post-closure care is an estimate and subject to
changes resulting from inflation, deflation, technology, and changes in applicable laws and
regulations.
PEDC had no outstanding incentive agreements related to economic development except the one
related to a note receivable (Note IV.B.).
G. Postemployment Benefits Other Than Pensions
The City has in effect a plan adopted by City Council resolution whereby persons who retire
before age sixty-five will be provided health care coverage until they become sixty-five. The
City's contributions are fmanced on a pay-as-you-go basis and for the year ended September 30,
2005, the cost was approximately $176,000 for 35 retired employees. An additional 13 employees
were eligible for this benefit.
H. Deferred Compensation Plan
The City offers its employees two deferred compensation plans created in accordance with
Internal Revenue Code Section 457.
I. Employee Retirement Systems and Plans
The City maintains a non-traditional defined benefit retirement plan for all full-time employees
except for firefighters and a single-employer, defined benefit plan for firefighters.
51
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
V. Other Information (Continued
I. Employee Retirement Systems and Plans (Continued)
1. Texas Municipal Retirement System
Plan Description Provisions
The City provides pension benefits for all of its full-time employees (except
fIrefIghters) through a non-traditional, joint contributory, hybrid defIned benefIt plan in
the state-wide Texas Municipal Retirement System (TMRS), one of 801 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 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 150% 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-fmanced monetary credits, with
interest, were used to purchase an annuity. Members can retire at age 60 and above with 5
or more years of service or with 20 years of service regardless of age. A member is vested
after 5 years. The plan provisions are adopted by the governing body of the City, within the
options available in the state statutes governing TMRS and within the actuarial constraints
also in the statutes.
The contribution rate for the employees is 6%, and the City matching percent is currently 2
to 1, both as adopted by the governing body of the City. Under the state law governing
TMRS, the actuary annually determines the City'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 fmances the currently accruing monetary credits due to the City matching percent,
which are the obligation of the City as of an employee's retirement date, not at the time the
employee's contributions are made. The normal cost contribution rate is the actuarially
determined percent of payroll necessary to satisfy the obligation of the City to each
employee at the time his/her retirement becomes effective. The prior service contribution
rate amortizes the unfunded actuarial liability over the remainder of the plan's 25-year
amortization period. Currently, the unfunded actuarial liability is being amortized over
the 25-year open period. The unit credit actuarial cost method is used for determining the
City contribution rate.
Contributions are made monthly by both the employees and the City. Since the City needs
to know its contribution rate in advance for budgetary purposes, there is a one-year delay
between the actuarial valuation that serves as the basis for the rate and the calendar year
when the rate goes into effect. For actuarial valuation, the market related method is used
52
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
V. Other Information (Continued)
I. Employee Retirement Systems and Plans (Continued)
1. Texas Municipal Retirement System (Continued)
Plan Description Provisions (Continued)
for assets. Other assumptions include no projected salary increases, inflation at 3.5%, or cost-
of-living adjustments and the investment rate of return is 7%. The level percent of payroll is
the amortization method used.
During the past three plan years, the City has contributed 100% of its annual pension cost as
follows: 2004 _ $1,177,209; 2003 - $1,149,264; and 2002 - $999,657. At September 30,2003,
2004, and 2005, the net pension obligation is zero,
Schedule of Funding Progress
Unfunded
Actuarial
Liability
Actuarial as a
Valuation Actuarial Actuarial Unfunded Percentage
December Value of Accrued Actuarial Funded Covered of Covered
31, Assets Liability Liability Ratio Payroll Payroll
2002 20,299,604 26,656,733 6,357,129 76.2 10,300,229 61.7
2003 22,872,812 30,394,639 7,521,827 75.3 10,386,640 72.4
2004 21,204,977 28,601,946 7,396,969 74.1 9,547,350 77.5
The Texas Municipal Retirement System issues a publicly available financial report that
includes financial statements and required supplementary information. That report may be
obtained by writing to Texas Municipal Retirement System, P. O. Box 149153, Austin, Texas
78714-9153.
2. Firefighters' Relief and Retirement Fund
Plan Description
The Paris Firefighter's Relief and Retirement Fund, a single-employer defmed benefit pension
plan, is established under the authority of the Texas Local Firefighters' Retirement Act and is
administered by a Board of Trustees made up of three members elected from and by the fund's
members, two representatives of the City of Paris, Texas, and two citizen members. Specified
plan provisions are governed by a plan document and a trust agreement executed by the Board
of Trustees. The plan is an independent entity for fmancial reporting purposes and issues a
stand-alone financial statement. A copy of the audited fmancial statement may be obtained
from the Board of Trustees, Paris Firefighters' Relief and Retirement Fund, P.O. Box 9037,
Paris, Texas 75461. Governing state law requires public retirement systems to hire an actuary
53
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
V, Other Information (Continued)
I. Employee Retirement Systems and Plans (Continued)
2. Firefighters' Relief and Retirement Fund (Continued)
Plan Description (Continued)
to make a valuation at least once every three years of the assets and liabilities of the system and
to determine if the assumptions and methods are reasonable.
Eligibility
The Plan covers current and former firefighters of the City of Paris, Texas, as well as certain
beneficiaries. The City of Paris contributes 10.58% of each member's total pay (including
regular, longevity, and overtime pay but excluding lump sum distributions for unused sick
leave or vacation). Fund members contribute to the fund at a rate of ten percent of pay.
Employee contributions are "picked up" by the City of Paris, Texas, as permitted under Section
4l4(h)(2) of the Internal Revenue Code. Fund members receive credit for service for the
period during which they pay into and keep on deposit in the fund, the contributions required
by the fund.
The fund was amended effective May 24,2003.
The City's annual required contribution to the plan for fiscal year 2005 was based on a payroll
of $2,162,288 and amounted to $270,364. Covered employees made contributions of
$216,228. The Plan covers 30 retirees and beneficiaries, 16 fully vested active employees, and
43 nonvested active employees.
Service Retirement Disability and Death Benefits
A member is eligible for service retirement on either (a) the date that the member has both
attained age 55 and completed 20 years of service or (b) the date as of which the sum of the
member's age and years of service first equals 80 provided the member has completed 20 years
of service. A member who retires under the service retirement provisions of the fund will
receive a monthly benefit equal to the greater of $89.50 multiplied by his/her years of service
at retirement or another formula using other factors. Service retirement benefits are payable
for the member's lifetime. In the event the member's death precedes that of his/her spouse,
two-thirds of the member's pension will be continued to the spouse for his/her lifetime. An
active member who becomes disabled will receive a monthly disability benefit. If a member
dies while in active service, his/her widow( er) will receive an immediate monthly benefit,
payable for his/her lifetime.
Annual Pension Cost
The actuarial valuation date used to determine the Annual Required Contribution for the year
ended September 30, 2005, and the most current available information required for disclosure
under Paragraph 22 of GASB Statement No. 27 is January 1, 2005. The actuarial cost method
used in the January 1, 2005, valuation is the entry age normal actuarial cost method. This
method is also referred to as the entry age actuarial cost method under the terminology
developed by the Joint Committee on Pension Terminology. The valuation measures the
54
City of Paris, Texas
Notes to Financial Statements
September 30, 2005
V. Other Information (Continued)
1. Employee Retirement Systems and Plans (Continued)
3. Firefighters' Relief and Retirement Fund (Continued)
Annual Pension Cost (Continued
actuarial balance between the present value of future benefits and the sum of (i) the present
value of future contributions and (ii) the actuarial value of assets. The plan is not subject to the
minimum funding requirements of Internal Revenue Code Section 412. There has been no
change in the actuarial cost method since the last actuarial valuation.
The actuarial assumptions used in the actuarial valuation performed as of January 1, 2003,
include a rate of return on the actuarial value of assets of 8.00% per year compounded annually;
UP 1994 Mortality Table; termination rates from the Actuary's Pension Handbook; disability
rates from 1985 Society of Actuaries Disability Table Study; and assumed retirement age of 55
with 20 years of service or satisfied the rule of 80. Compensation increases for individual
members and total payroll is 4.5% compounded annually. Projected post retirement benefit
increases are zero. The amortization of the unfunded actuarial accrued liability was determined
as a level percentage of payroll. The amortization period is an open amortization period over
27,2 years.
The actuarial value of assets is smoothed market value which smoothes interest and dividends
as well as investment gains and losses. Calculation of the actuarial value of assets begins with
an "initial asset value."
The initial asset value is the market value of assets five years prior to the valuation date. All
receipts from contributions, interest, dividends, and miscellaneous income over the last five
years are added to the initial asset value. Likewise, all benefit payments, contribution refunds,
and expenses are subtracted from the initial asset value. In this manner, all such receipts and
disbursements are recognized immediately.
January 1,
2001 2003 2005
Actuarial Value of Assets $ 5,661,952 $ 6,128,263 $ 6,967,797
Actuarial Accrued Liability (AAL) 8,379,236 9,676,328 10,802,145
Unfunded AAL (UAAL) $ 2,717,284 $ 3,548,065 $ 3,834,348
Funded Ratio 67.6% 65.3% 64.5%
Covered Payroll $ 1,938,970 $ 1,968,378 $ 2,093,252
UAAL as a Percentage of Covered Payroll 140.1% 180.3% 183.2%
55
City or Pans, Texas
Notes to Financial Statements
September 30, 2005
V. Other Information (Continued)
I. Employee Retirement Systems and Plans (Continued)
2. Firefighters' Relief and Retirement Fund (Continued)
Development of the Actuarial Value of Assets
December 31,
2002 2003 2004
Market Value as of January 1 $ 5,819,824 $ 5,622,529 $ 6,352,304
Contributions, Interest and Dividends
Contributions by the City 225,037 231,556 272,228
Contributions by Members 202,530 215,507 229,967
Dividends and Interest 237,084 194,699 196,087
Other 3,241
664,651 641,762 701,523
Disbursements
Benefits Paid Monthly 362,782 347,605 650,888
Administrative Expenses 34,438 75,241 93,809
397,220 422,846 744,697
Net Realized and Unrealized Gains and Losses
Realied Gains (Losses) (83,405) 33,201 35,691
Unrealized Gains (Losses) (381,321) 477,658 262,899
(464,726) 510,859 298,590
Market Value as of December 31 5,622,529 6,352,304 6,607,720
Adjustments to Develop Actuarial Value, Net 505,734 360,077
Actuarial Value of Assets $ 6,128,263 $ $ 6,967,797
Other Information
2002 2003 2004
Annual Pension Cost $ 225,037 $ 231,556 $ 272,228
Percentage of Annual
Pension Cost Contributed 100% 100% 100%
Net Pension Obligation
56
Nonmajor Governmental Funds
Special Revenue
Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular
purposes.
Criminal Justice Division Grant - This fund accounts for funds received and expended in connection with the City's
multi-agency narcotics task force.
Community Development Block Grant - This fund accounts for funds received from various federal grant programs and
expended for community development purposes.
Special Revenue Fund - This fund accounts for funds received from various sources which can be expended for
improving efficiency of the administration of justice; enhancing child safety, health, and nutrition; security devices and
technological enhancements for municipal court; and other improvement activity.
Health Department - This fund accounts for funds received primarily from federal, state, another local entity, and local
fees. Employees of the fund are responsible for protecting the public health through immunization programs, operation
of a health clinic, health inspections, restaurant inspections, food handlers training, mosquito control, well baby clinics,
and family planning programs.
Library Memorial Funds - These funds account for resources given for book and library related purposes in memory of
individuals.
Permanent Funds
Library Trust Funds - These funds account for resources of a permanent nature whereby only earnings and net principal
may be used for books and library related purposes.
Other Major Governmental Funds
Debt Service Fund - This fund accounts for the accumulation of resources and the payment of general obligation
principal and interest.
Capital Projects Fund - This fund accounts for proceeds from bond issues.
57
fi\ lf~ mil\'\ ID1I~e~
\U .D~~ ~~~ ~~,~
~ ---~-~~
p
City of Paris, Texas
Combining Balance Sheet - Nonmajor Governmental Funds
September 30, 2005
Special Revenue
Criminal Community
Justice Development Library
Division Block Special Health Memorial
Grant Grant Revenue Department Funds
ASSETS
Cash $ 59,748 $ 229,356 $ 212,782 $ 7,623 $ 130,966
Notes Receivable 69,474
Accounts Receivable 195
Due from Other Governments 249,884 37,750 330,787
Total Assets $ 309,632 $ 336,580 $ 212,782 $ 338,605 $ 130,966
LIABILITIES AND FUND BALANCES
Liabilities
Accounts Payable $ 74,797 $ 860 $ $ $
Due to General Fund 175,244
Due to Other Governments 1,805
Total Liabilities 250,041 860 1,805
Fund Balances
Reserved for Notes 69,474
Unreserved - Undesignated 59,591 266,246 212,782 336,800 130,966
Total Fund Balances 59,591 335,720 212,782 336,800 130,966
Total Liabilites and
Fund Balances $ 309,632 $ 336,580 $ 212,782 $ 338,605 $ 130,966
58
Schedule 1
Permanent
Total
Library Insurance Nonmajor
Trust Trust Governmental
Total Funds Fund Total Funds
$ 640,475 $ 73,373 $ $ 73,373 $ 713,848
69,474 69,474
195 195
618,421 618,421
$ 1,328,565 $ 73,373 $ $ 73,373 $ 1,401,938
$ 75,657 $
175,244
1,805
252,706
$
$
$ 75,657
175,244
1,805
252,706
69,474
1,006,385
1,075,859
73,373
73,373
73,373
73,373
69,474
1,079,758
1,149,232
$ 1,328,565 $ 73,373 $
$ 73,373 $ 1,401,938
59
City of Paris, Texas
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended September 30, 2005
Special Revenue
Criminal Community
Justice Development Library
Division Block Special Health Memorial
Grant Grant Revenue Department Funds Total
Revenues:
Memorial Donations $ $ $ $ $ 6,870 $ 6,870
Interest Earned 2,925 682 3,899 7,506
Program Income 36,898 8 36,906
Grant Revenue 767,261 91,264 623,342 1,481,867
Local Revenue 162,070 31,061 267,096 460,227
Total Revenues 966,229 94,197 31,743 890,438 10,769 1,993,376
Expenditures:
Municipal Court 12,432 12,432
Community Development 100,071 100,071
Police 912,406 912,406
Health 844,625 844,625
Library 63,547 63,547
Total Expenditures 912,406 100,071 12,432 844,625 63,547 1,933,081
Excess of Revenues Over
(Under) Expenditures 53,823 (5,874) 19,311 45,813 (52,778) 60,295
Other Financing Sources
Transfers In 29,606 29,606
Transfer Out (18,472) (18,472)
Fund Balances -
September 30,2004 5,768 341,594 193,471 309,459 154,138 1,004,430
Fund Balance-
Septembers 30, 2005 $ 59,591 $ 335,720 $ 212,782 $ 336,800 $ 130,966 $ 1,075,859
60
Schedule 2
Permanent
Total
Library Insurance Nonmajor
Trust Trust Governmental
Funds Fund Total Funds
$ 15,000 $ $ 15,000 $ 21,870
1,680 1,680 9,186
36,906
1,481,867
460,227
16,680 16,680 2,010,056
12,432
100,071
912,406
844,625
63,547
1,933,081
16,680
16,680
76,975
275,494
275,494
305,100
(40,795)
(22,323)
(22,323)
79,016
(275,494)
(196,478)
807,952
$ 73,373 $ 1,149,232
$ 73,373 $
61
City of Paris, Texas
Criminal Justice Division Grant Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual
For the Year Ended September 30, 2005
Schedule 3
Budgeted Amounts Variance with
Final Budget-
Positive
Original Final Actual (Negative)
Revenues:
Grant Revenue $ 739,722 $ 739,722 $ 767,261 $ 27,539
Local Revenue 162,070 162,070
Program Income 172,669 172,669 36,898 (135,771)
Total Revenues 912,391 912,391 966,229 53,838
Expenditures:
Police 912,391 912,391 912,406 (15)
Total Expenditures 912,391 912,391 912,406 (15)
Excess Revenues Over
(Under) Expenditures 53,823 53,823
Fund Balance - September 30,2004 5,768 5,768 5,768
Fund Balance - September 30,2005 $ 5,768 $ 5,768 $ 59,591 $ 53,823
62
City of Paris, Texas
Community Development Block Grant Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual
For the Year Ended September 30,2005
Schedule 4
Budgeted Amounts Variance with
Final Budget-
Positive
Original Final Actual (Negative)
Revenues:
Interest Earned on
Notes Receivable $ $ $ 2,925 $ 2,925
Grant Revenue 521,000 521,000 91,264 (429,736)
Program Income 8 8
Total Revenues 521,000 521,000 94,197 (426,803)
Expenditures:
Community Development 521,000 521,000 100,071 420,929
Total Expenditures 521,000 521,000 100,071 420,929
Excess Revenues Over
(Under) Expenditures (5,874) (5,874)
Fund Balance - September 30, 2004 341,594 341,594 341,594
Fund Balance - September 30, 2005 $ 341,594 $ 341,594 $ 335,720 $ (5,874)
63
City of Paris, Texas
Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
For the Year Ended September 30, 2005
Schedule 5
Budgeted Amounts Variance with
Final Budget-
Positive
Original Final Actual (Negative)
Revenues:
Interest Earned $ 330 $ 330 $ 682 $ 352
Local Revenue 40,550 40,550 31,061 (9,489)
Total Revenues 40,880 40,880 31,743 (9,137)
Expenditures:
Municipal Court 29,390 29,390 12,432 16,958
Police Department 4,000 4,000 4,000
Parks 5,000 5,000 5,000
Total Expenditures 38,390 38,390 12,432 25,958
Excess Revenues Over
(Under) Expenditures 2,490 2,490 19,311 16,821
Fund Balance - September 30, 2004 193,471 193,471 193,471
Fund Balance - September 30, 2005 $ 195,961 $ 195,961 $ 212,782 $ 16,821
64
City of Paris, Texas
Health Department Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
For the Year Ended September 30,2005
Schedule 6
Budgeted Amounts Variance with
Final Budget-
Positive
Original Final Actual (Negative)
Revenues:
Grant Revenue $ 626,204 $ 626,204 $ 623,342 $ (2,862)
Local Revenue 307,330 307,330 267,096 (40,234)
Total Revenues 933,534 933,534 890,438 (43,096)
Expenditures:
Health 933,534 933,534 844,625 88,909
Total Expenditures 933,534 933,534 844,625 88,909
Excess Revenues Over
(Under) Expenditures 45,813 45,813
Other Financing Services
Transfers Out (18,472) (18,472)
Fund Balance - September 30, 2004 309,459 309,459 309,459
Fund Balance - September 30, 2005 $ 309,459 $ 309,459 $ 336,800 $ 27,341
65
City of Paris, Texas
Debt Service Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
For the Year Ended September 30,2005
Schedule 7
Budgeted Amounts Variance with
Final Budget-
Positive
Original Final Actual (Negative )
Revenues:
Ad Valorem Taxes $ 1,211,060 $ 1,211,060 $ 1,214,264 $ 3,204
Interest Earned 2,064 2,064
Total Revenues 1,211,060 1,211,060 1,216,328 5,268
Expenditures:
Bond Principal Retirement 565,800 565,800 820,800 (255,000)
Interest and Fiscal Charges 645,260 645,260 651,426 ( 6,166)
Total Expenditures 1,211,060 1,211,060 1,472,226 (261,166)
Excess Revenues Over
(Under) Expenditures (255,898) (255,898)
Other Financing Sources
Transfers In 291,885 291,885
Transfer Out (397,989) (397,989)
Fund Balance - September 30,2004 1,087,396 1,087,396 1,087,396
Fund Balance - September 30, 2005 $ 1,087,396 $ 1,087,396 $ 725,394 $ (362,002)
66
City of Paris, Texas
Capital Projects Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual
From Inception and For the Year Ended September 30,2005
Schedule 8
Prior Current Total Project
Years Year to Date Authorization
Revenues:
Investment Income $ 771,823 $ 148,313 $ 920,136 $
Grant and Other Revenues 771,304 108,635 879,939
Total Revenues 1,543,127 256,948 1,800,075
Expenditures:
City Council 194,902 915,405 1,110,307 500,000
Police 2,235,279 1,697,319 3,932,598 6,240,000
Parks 1,098,977 24,817 1,123,794 1,000,000
Streets and Highways 3,693,669 142,010 3,835,679 4,320,000
Total Expenditures 7,222,827 2,779,551 10,002,378 12,060,000
Excess of Revenues Over
(Under) Expenditures (5,679,700) (2,522,603) (8,202,303) 12,060,000
Other Financing Sources (Uses):
Tax and Revenue
Bond Proceeds 12,061,549 12,061,549 12,060,000
Sale of Capital Assets 59,393 59,393
Transfers In (Out) 212,187 (93,940) 118,247
Net Change in Fund Balance $ 6,594,036 (2,557,150) $ 4,036,886 $
Fund Balance, September 30,2004 6,594,036
Fund Balance, September 30, 2005 $ 4,036,886
67
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CAPITAL ASSETS USED IN
THE OPERATION OF GOVERNMENTAL FUNDS
p
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City of Paris, Texas
Capital Assets Used in the Operation of Governmental Funds
Comparative Schedules by Source
September 30, 2005 and 2004
2005
Governmental Funds Capital Assets:
Land
Buildings
Improvements Other Than Buildings
Machinery and Equipment
Infrastructure
Construction in Progress
Total Governmental Funds Capital Assets
$ 5,903,022
9,870,329
3,623,710
15,606,261
34,117,660
3,549,809
$ 72,670,791
Investments in Governmental Funds Capital Assets by Source:
General Fund
Capital Projects Funds
Donations
Total Governmental Funds Capital Assets by Source
$ 55,697,361
12,346,791
4,626,639
$ 72,670,791
68
Schedule 9
2004
$ 5,903,022
9,870,329
2,879,665
15,502,561
33,812,205
1,514,303
$ 69,482,085
$ 55,593,661
9,567,240
4,321,184
$ 69,482,085
City of Paris, Texas
Capital Assets Used in the Operation of Governmental Funds
Schedule By Function and Activity
September 30,2005
Improvements Machinery
Other Than and
Function and Activity Land Buildings Buildings Equipment
General Government:
Council $ 330,820 $ 1,432,278 $ $ 528,923
Manager 10,187
Attorney 113,768
Clerk 14,737 71,230
Finance 335,933
Total General Government 330,820 1,447,015 1,060,041
Public Safety:
Police 619,585 1,463,092 2,789,695
Fire 159,268 2,189,378 2,490,820
Total Public Safety 778,853 3,652,470 5,280,515
Public Works:
Community Development 3,299,676 44,152
Engineering 10,747 173,761
Public Works 125,543 842,073
Parks and Recreation 112,230 92,268 2,775,200 704,951
Solid Waste 626,395 42,079 1,267,127
Streets and Highways 138,590 88,220 41,729 1,713,879
Traffic and Public Lighting 117,366
Garage 79,121 71,039
Other Unclassified 17,036
Total Public Works 4,302,434 270,356 2,859,008 4,951,384
Emergency Medical Service 23,805 2,001,398
Cox Field 429,120 3,428,970 741,517 221,929
Library 61,795 1,047,713 23,185 2,090,994
Total Governmental Funds
Capital Assets $ 5,903,022 $ 9,870,329 $ 3,623,710 $ 15,606,261
69
Schedule 10
Infrastructure Total
$ $ 2,292,021
10,187
113,768
85,967
335,933
2,837,876
4,872,372
4,839,466
9,711,838
3,343,828
184,508
967,616
3,684,649
1,935,601
34,117,660 36,100,078
117,366
150,160
17,036
34,117,660 46,500,842
2,025,203
4,821,536
3,223,687
$ 34,117,660 $ 69,120,982
70
City of Paris, Texas
Capital Assets Used in the Operation of Governmental Funds
Schedule of Changes By Function and Activity
September 30, 2005
Schedule 11
Governmental Funds Governmental Funds
Capital Assets Capital Assets
Function and Activity October 1,2004 Additions Deductions September 30, 2005
General Government:
Council $ 2,292,021 $ $ $ 2,292,021
Manager 10,187 10,187
Attorney 113,768 113,768
Clerk 85,967 85,967
Finance 335,933 335,933
Total General Government 2,837,876 2,837,876
Public Safety:
Police 4,865,364 195,475 188,467 4,872,372
Fire 4,810,246 29,220 4,839,466
Total Public Safety 9,675,610 224,695 188,467 9,711,838
Public Works:
Community Development 3,343,828 3,343,828
Engineering 184,508 184,508
Public Works 967,616 967,616
Parks and Recreation 2,977,457 749,739 42,547 3,684,649
Solid Waste 1,935,601 1,935,601
Streets and Highways 35,845,331 305,455 50,708 36,100,078
Traffic and Public Lighting 117,366 117,366
Garage 150,160 150,160
Other Unclassified 17,036 17,036
Total Public Works 45,538,903 1,055,194 93,255 46,500,842
Emergency Medical Service 1,934,102 91,101 2,025,203
Cox Field 4,821,536 4,821,536
Library 3,159,755 63,932 3,223,687
Total Governmental Funds
Capital Assets $ 67,967,782 $ 1,434,922 $ 281,722 $ 69,120,982
71
STATISTICAL SECTION
City of Paris, Texas
Government-wide Expenditures by Function
For the Fiscal Years Ended September 30
Fund 2005 2004 2003 (2) 2002
General
General Government $ 2,188,590 $ 2,275,969 $ 2,209,909 $ 2,340,802
Finance 515,965 540,815 487,253 439,535
Public Safety 9,825,404 9,554,945 9,228,741 8,222,361
Public Works 6,957,522 8,102,061 7,500,073 6,004,759
Health 2,904,920 3,724,003 2,881,164 1,824,006
Library Service 718,779 917,450 1,165,646 720,407
Cox Field 258,496 256,149 253,822 130,929
Miscellaneous 18,460
Interest on Long-Term Debt 627,691 1,022,551 932,025 921,561
Total General 23,997,367 26,393,943 24,658,633 20,622,820
Water and Sewer 10,554,510 9,997,416 9,647,360 9,944,982
Special Revenue 1,727,305
Capital Projects 723,937
Library Expendable 1,141
Library Nonexpendable
Employees' Insurance (1) 2,273,150
Total- All Funds $34,551,877 $ 36,391,359 $ 34,305,993 $35,293,335
(1) Effective October 1, 2002, employees' insurance is reported as part of the General Fund.
(2) GASB 34 adopted
72
Table 1
2001 2000 1999 1998 1997 1996
$ 1,751,664 $ 1,521,641 $ 1,441,212 $ 1,394,551 $ 1,053,653 $ 1,053,820
440,423 505,245 383,940 379,179 358,470 437,455
8,795,690 7,928,491 7,637,819 6,513,684 6,298,096 5,772,241
7,730,857 5,388,191 5,050,915 4,830,986 4,352,042 3,882,594
1,790,374 2,064,766 2,010,631 2,135,335 1,928,209 1,911,306
729,600 682,798 706,498 620,041 573,062 558,092
171,691 160,870 108,274 722,545 368,114 131,611
19,501 15,459 14,088 14,703 13,535 13,854
930,983 407,109 408,633 409,306 430,040 439,974
22,360,783 18,674,570 17,762,010 17,020,330 15,375,221 14,200,947
10,899,854 9,871,857 9,173,523 9,408,909 8,933,177 8,601,839
1,947,252 1,016,720 756,897 754,689 582,292 625,526
1,878,728 629,522 16,747 447,460 2,895,062 849,165
34,122 8,142 16,598 12,622 22,919 14,394
119 33 254 8,184 3,128 239
1,642,437 1,515,594 1,444,749 885,083 1,395,616 1,010,493
$38,763,295 $31,716,438 $29,170,778 $28,537,277 $29,207,415 $ 25,302,603
73
City of Paris, Texas
Government-wide Revenues
For the Fiscal Years Ended September 30
2005 2004 2003(1) 2002
General Property Taxes $ 7,575,824 $ 7,314,181 $ 7,130,468 $ 6,102,854
Penalties and Interest on Property Tax 157,876 142,669 130,475 132,942
Municipal Sales Tax 5,066,926 4,794,743 4,726,406 4,574,994
Hotel Occupancy Tax 314,404 302,334 310,920 314,170
Franchise and Gross Receipts Tax 3,062,589 2,465,130 3,034,049 2,623,697
Licenses and Permits 98,611 73,163 80,666 114,720
Fines and Fees 777,701 726,463 473,648 545,236
Emergency Medical Service and Health 1,874,941 2,489,269 2,148,758 1,945,602
Leases and Rentals 80,567 70,322
Sanitation 1,361,406 1,346,443 1,349,711 1,382,796
Intergovernmental Receipts 2,272,486 2,493,221 2,715,441 4,066,932
Interest Earned on Investments 427,993 438,836 509,932 639,383
Miscellaneous Revenues 776,246 1,407,584 302,489 701,904
Utility Fund Contributions 1,100,000
Water Sales 7,043,398 6,138,102 6,063,786 5,957,489
Water Taps 25,795 20,897 34,435 21,750
Sewer Charges 4,816,095 4,396,167 4,061,624 4,039,196
Sewer Taps 15,895 34,162 23,850 15,400
Sanitations Billing Fees 69,700 70,844 73,017 70,816
Miscellaneous W & S 792,079 863,350 155,763 343,144
Quasi-External Interfund Transactions (2) 1,216,674
Total- All Funds $36,529,965 $35,517,558 $33,406,005 $35,980,021
(1) GASB 34 adopted
(2) Internal Service Fund eliminated for the year ended September 30, 2003
74
Table 2
2001 2000 1999 1998 1997 1996
$ 5,852,510 $ 5,325,886 $ 4,770,465 $ 4,576,907 $ 3,829,705 $ 3,751,246
128,993 102,152 95,829 95,796 93,607 86,245
4,537,136 4,996,289 4,460,650 4,174,891 4,023,734 3,909,119
356,259 357,438 295,252 264,998 241,822 233,587
2,559,474 2,093,284 2,057,459 2,012,816 2,038,208 1,942,610
84,660 53,451 68,658 47,147 44,869 52,063
535,496 350,548 350,129 466,837 301,063 267,423
1,655,980 1,567,331 1,622,654 1,853,508 1,942,037 1,836,184
72,844 57,221 53,227 152,662 67,311 41,724
1,380,109 1,547,223 1,482,995 1,354,255 1,424,201 1,369,074
3,019,803 2,085,801 1,977,433 2,026,053 1,338,236 979,485
1,596,617 1,164,570 515,382 641,749 885,585 725,235
1,076,393 469,763 494,875 396,455 399,303 307,009
1,095,535 1,036,825 1,036,825 1,026,780 276,780 1,006,000
5,911,751 6,115,764 5,821,150 5,828,980 5,290,732 5,471,255
19,834 19,705 28,028 17,556 23,080 27,096
3,922,189 3,979,871 3,442,145 3,152,727 3,265,796 3,440,260
13,990 6,330 3,848 20,189 7,220 9,480
75,286 81,412 77,935 72,571 72,214 72,057
382,817 302,176 195,326 195,395 168,721 108,531
1,094,176 1,086,756 1,111,303 986,058 867,178 873,075
$35,371,852 $32,799,796 $29,961,568 $29,364,330 $26,601,402 $26,508,758
75
City of Paris, Texas
General Governmental Expenditures by Function (1)
Last Ten Fiscal Y ~ars
Unaudited
Emergency
Fiscal General Public Public Health Medical
Year Government Finance Safety Works Department Service
1995-96 $ 1,053,820 $ 437,455 $ 5,779,810 $ 3,882,594 $ 782,812 $ 1,128,494
1996-97 1,053,653 358,470 6,298,096 4,352,042 788,690 1,139,519
1997-98 1,394,551 379,179 6,513,684 4,830,986 825,403 1,309,932
1998-99 1,441,212 383,940 7,637,819 5,050,915 740,734 1,269,897
1999-00 1,521,641 505,245 7,928,492 5,388,190 693,691 1,376,163
2000-01 1,751,664 440,423 8,795,690 7,730,857 697,422 1,790,374
2001-02 2,340,802 439,535 8,222,361 6,004,759 899,325 1,824,006
2002-03 (2) 1,577,462 476,883 8,675,218 5,957,419 800,717 1,790,799
2003-04 1,612,645 533,799 9,070,046 6,473,823 797,474 1,844,574
2004-05 1,545,542 508,968 9,136,810 5,324,999 844,625 1,862,313
Source:
City of Paris
Notes:
(1) Includes General and Debt Service Funds through fiscal year 2001-2002
(2) Includes Governmental Funds (GASB 34)
(3) Included in General Fund 2004-05
76
Table 3
Insurance
Trust Cox Capital
Fund Library Field Other Debt Outlay Total
$ $ 558,092 $ 131,611 $ 13,854 $ 439,974 $ $ 14,208,516
573,062 368,114 13,535 430,040 15,375,221
620,041 722,545 14,703 409,306 17,020,330
706,498 108,274 14,088 408,633 17,762,010
682,798 160,870 15,459 407,109 18,679,658
729,600 171,691 19,501 930,983 23,058,205
720,407 130,929 18,460 921,561 21,522,145
1,034,918 132,347 505,553 1,607,118 3,664,855 26,223,289
879,643 (3) 795,347 133,295 484,044 2,021,541 1,833,954 26,480,185
601,885 134,542 535,395 1,735,474 3,163,974 25,394,527
77
City of Paris, Texas
General Governmental Revenues by Source (1)
Last Ten Fiscal Years
Unaudited
Licenses Use of
Fiscal Total and Fines Money and Public Sanitation
Year Taxes Permits and Fees Property Safety Fees
1995-96 $ 9,836,562 $ 52,063 $ 353,668 $572,717 $ 2,012 $ 1,369,074
1996-97 10,133,472 44,869 394,670 316,819 1,080 1,424,201
1997-98 11,125,408 47,147 466,837 270,970 720 1,354,255
1998-99 11,583,826 68,658 445,958 254,347 1,080 1,482,995
1999-00 12,772,897 53,451 452,700 348,828 1,800 1,547,223
2000-01 13,434,372 84,660 535,496 305,362 1,800 1,380,109
2001-02 13,748,657 114,720 545,236 204,846 1,800 1,382,796
2002-03 15,323,499 (2) 80,666 472,857 265,980 172,955 1,349,711
2003-04 14,959,510 (2) 73,163 501,124 247,260 208,878 1,346,443
2004-05 16,109,433 (2) 98,611 556,895 357,262 230,029 1,361,406
Source:
City of Paris
Notes:
(1) Includes General and Debt Service Fund for years through 2001-2002
(2) Includes Governmental Funds (GASB 34)
78
Table 4
Intergov-
Health ernmental Other Total
$ 1,836,184 $ 34,077 $ 283,508 $ 14,339,865
1,942,037 489,451 384,611 15,131,210
1,853,508 1,289,185 378,693 16,786,723
1,622,654 1,228,946 447,933 17,136,397
1,567,331 1,026,441 426,702 18,197,373
1,655,980 1,088,493 998,580 19,484,852
1,945,602 2,197,149 664,848 20,805,654
2,043,589 2,715,441 302,489 22,727,187
2,246,352 2,493,221 852,469 22,928,420
2,083,448 2,272,486 470,791 23,540,361
79
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f . . ~
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· t, l\ ' ~ ~ ~
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;p
City of Paris, Texas
General Government Tax Revenue by Source
Last Ten Fiscal Years
Unaudited
Table 5
General
Fiscal Property Sales Hotel Franchise Total
Year Taxes Tax Tax Tax Taxes
1995-96 $ 3,751,246 $ 3,909,119 $ 233,587 $ 1,942,610 $ 9,836,562
1996-97 3,829,708 4,023,734 241,822 2,038,208 10,133,472
1997-98 4,672,703 4,174,891 264,998 2,012,816 11,125,408
1998-99 4,770,465 4,460,650 , 295,252 2,057,459 11,583,826
1999-00 5,325,886 4,996,289 357,438 2,093,284 12,772,897
2000-01 5,981,503 4,537,136 356,259 2,559,474 13,434,372
2001-02 6,235,796 4,574,994 314,170 2,623,697 13,748,657
2002-03 7,252,124 4,726,406 310,920 3,034,049 15,323,499
2003-04 7,397,303 4,794,743 302,334 2,465,130 14,959,510
2004-05 7,665,514 5,066,926 314,404 3,062,589 16,109,433
Source:
City of Paris
80
City of Paris, Texas
Property Tax Levies and Collections (1)
Last Ten Fiscal Years
Unaudited
Percent
Collection of Current
of Current Levy
Year's Collected Delinquent
Fiscal Total Taxes During During Tax Total
Roll Year Tax Levy Fiscal Year Fiscal Year Collections Collections
1995 1995-96 $3,803,981 $ 3,649,533 95.94% $ 170,535 $3,820,068
1996 1996-97 3,873,454 3,722,188 96.09 264,520 3,986,708
1997 1997-98 4,724,497 4,548,919 96.28 640,510 5,189,429
1998 1998-99 4,948,368 (2) 4,687,960 94.74 167,387 4,855,347
1999 1999-00 5,332,833 5,159,009 96.74 90,384 5,249,393
2000 2000-01 6,132,621 5,854,458 95.46 93,628 5,948,086
2001 2001-02 6,216,227 6,099,899 98.13 100,275 6,200,174
2002 2002-03 7,303,340 7,120,568 97.50 79,757 7,200,325
2003 2003-04 7,470,691 7,180,706 96.12 54,902 7,235,608
2004 2004-05 7,762,498 7,422,657 95.62 7,422,657
Source:
City of Paris
Note:
(1) Taxes stated are for General Fund and Debt Service Funds
(2) Includes $440,386 for annexed property not certified on original roll.
81
Table 6
Ratio Ratio of
of Total Delinquent
Collections Outstanding Taxes
To Total Delinquent To Total
Tax Levy Taxes Tax Levy
100.42% $ 26,607 0.70%
102.92 26,539 0.69
109.84 38,753 0.82
98.12 39,969 0.81
98.44 38,708 0.73
96.99 46,072 0.75
99.7 4 48,674 0.78
98.59 74,204 1.02
96.85 113,058 1.51
95.62 201,738 2.60
82
City of Paris, Texas
Assessed and Estimated Actual Value of Property
Last Ten Fiscal Years
Unaudited
Real Property Personal Property
Estimated Estimated
Assessed Actual Assessed Actual
Roll Year Value Value Value Value
1995 1995-96 $ 493,134,531 $ 677,775,273 $ 241,650,050 $ 341,605,295
1996 1996-97 462,252,974 680,809,076 286,407,582 366,225,166
1997 1997-98 552,306,260 725,849,799 301,415,790 379,120,536
1998 1998-99 498,685,880 805,740,196 315,906,118 393,635,983
1999 1999-00 545,290,533 896,167,518 364,793,148 446,286,953
2000 2000-01 576,146,428 1,102,603,652 429,187,515 508,071,682
2001 2001-02 583,199,505 1,287,925,857 435,837,160 502,434,580
2002 2002-03 608,127,686 1,242,258,670 442,746,610 512,931,510
2003 2003-04 621,789,647 1,231,490,850 452,957,240 525,642,730
2004 2004-05 660,183,973 1,209,772,832 461,154,820 528,460,080
Sources:
City of Paris
Lamar County Appraisal District
83
Table 7
Total
Estimated
Assessed Actual
Exemptions Value Value
$ 284,595,987 $ 734,784,581 $1,019,380,568
298,373,686 748,660,556 1,047,034,242
251,248,285 853,722,050 1,104,970,335
384,784,181 814,591,998 1,199,376,179
432,370,790 910,083,681 1,342,454,471
605,341,391 1,005,333,943 1,610,675,334
771,323,772 1,019,036,665 1,790,360,437
704,315,884 1,050,874,296 1,755,190,180
682,386,693 1,074,746,887 1,757,133,580
616,894,119 1,121,338,793 1,738,232,912
84
City of Paris, Texas Table 8
Property Tax Rates - All Direct and Overlapping Governments
(Per $100 of Assessed Value)
Last Ten Fiscal Years
Unaudited
North Paris
Fiscal City of Lamar Paris Chisum Lamar Junior
Year Paris County ISD ISD ISD College
1995-96 $ 0.51770 $ 0.3456 $ 1.4650 $ 1.3000 $ 1.3760 $ 0.1530
1996-97 0.51770 0.3528 1.5250 1.3400 1.3760 0.1603
1997-98 0.55342 0.3593 1.5140 1.3400 1.4160 0.1645
1998-99 0.55342 0.3593 1.5140 1.3400 1.4310 0.1701
1999-00 0.58598 0.3593 1.5140 1.3200 1.3328 0.1664
2000-01 0.61000 0.3536 1.5340 1.2700 1.4555 0.1637
2001-02 0.61000 0.3706 1.5800 1.2750 1.5555 0.1758
2002-03 0.69500 0.3817 1.5900 1.6550 1.6455 0.1804
2003-04 0.69500 0.3890 1.6030 1.6550 1.6455 0.1932
2004-05 0.69225 0.4113 1.5920 1.6480 1.5890 0.1922
Source:
Paris Economic Development Corporation
R5
City of Paris, Texas
Principal Taxpayers
September 30, 2005
Unaudited
Table 9
Percentage
2005 of Total
Taxable Taxable
Taxpayer Type of Business Value Valuation
1. Kimberly Clark Corp. Disposable Diaper Mfg. $ 125,213,010 11.29
2. Essent PRMC LP Hospital 42,357,980 3.82
3. Campbell Soup, Inc. Food Mfg. 40,367,860 3.64
4. Silgan Can Co. Can Mfg. 22,317,770 2.01
5. T enaska III Utility 20,708,170 1.86
6. TXU Electric Delivery Co. Utility 20,101,880 1.81
7. Sara Lee Bakery Group Food Mfg. 12,818,210 1.15
8. Lamar Power Partners, LP Utility 12,715,070 1.14
9. Southwestern Bell Telephone Communication 8,574,480 0.77
10. Campbell Soup Supply, LLC Food Mfg. 8,141,570 0.73
Totals $ 313,316,000 28.22
Source:
Lamar County Appraisal District
86
City of Paris, Texas
Sales Tax Received
Last Ten Fiscal Years
Unaudited
95-96 96-97 97-98 98-99 99-00
October $ 322,356 $ 355,469 $ 381,501 $ 351,423 $ 347,736
November 477,416 464,474 500,000 515,531 532,321
December 324,400 355,477 358,833 334,844 487,693
January 324,132 304,903 325,927 427,314 382,179
February 553,002 583,176 646,486 689,374 653,524
March 322,804 330,014 288,581 417,117 413,297
April 304,615 300,550 308,521 377,168 375,228
May 480,225 492,357 471,066 462,920 790,809
June 358,704 357,404 420,072 410,555 399,277
July 313,339 327,186 338,572 370,128 430,359
August 487,608 504,873 547,339 592,185 658,295
September 422,340 452,599 422,685 404,221 524,829
Total $ 4,690,941 $ 4,828,482 $ 5,009,583 $ 5,352,780 $ 5,995,547
Equivalent
Ad Valorem
Tax Rate
0.6384
0.6449
0.5868
0.6571
0.6588
Source:
City of Paris
The City collects an additional 1/4 cent sales tax designated to reduce local
property taxes and a second 1/4 cent sales tax designated for the local
Economic Development Corporation.
R7
Table 10
00-01 01-02 02-03 03-04 04-05
$ 398,986 $ 270,934 $ 411,429 $ 395,544 $ 421,713
598,610 559,182 621,020 564,741 601,541
365,654 428,694 407,970 423,436 403,690
384,457 364,667 407,749 395,466 437,742
622,697 739,435 628,359 650,387 711,522
342,826 339,725 377,972 414,942 418,739
385,521 371,041 360,457 392,773 408,175
568,579 530,356 555,003 596,498 607,861
389,389 415,871 420,289 424,786 439,629
410,896 413,216 458,215 443,077 467,097
553,490 542,460 517,956 607,813 602,487
423,458 439,412 452,767 473,328 485,714
$ 5,444,563 $ 5,414,993 $ 5,619,186 $ 5,782,791 $ 6,005,910
0.5416
0.5314
0.5347
0.5381
0.5356
88
City of Paris, Texas
Computation of Legal Debt Margin
September 30, 2005
Unaudited
Table 11
The maximum tax rate permitted by Article XI, Section 5 of the State of Texas constitution is $2.50 per $100 of
assessed valuation. Consequently, no legal debt margin can be calculated. The state attorney general has traditionally
allowed up to $1.50 per $100 valuation to be applied to debt service. The City levied a tax rate of $0.69225 per $100
valuation for the fiscal year ended September 30,2005.
Source:
City of Paris
89
City of Paris, Texas
Ratio of Net General Obligation Bonded Debt to
Assessed Value and Net General Obligation Bonded Debt Per Capita
Last Ten Fiscal Years
Unaudited
Table 12
Ratio
of Net Net
General General
Bonded Bonded
Taxable Gross Less Debt Debt To Debt
Fiscal Estimated Assessed General Service Net General Assessed Per
Year Population Value Bonded Debt Funds Bonded Debt Value Capita
1995-96 25,955 $ 734,784,581 $ 4,825,000 $ 279,248 $ 4,545,752 0.62% $175.14
1996-97 26,212 . 748,660,556 4,660,000 261,356 4,398,644 0.59 167.81
1997-98 26,474 853,722,050 4,485,000 263,080 4,221,920 0.49 159.47
1998-99 26,738 814,591,998 4,300,000 293,934 4,006,066 0.49 149.83
1999-00 26,978 910,083,681 10,105,000 319,913 9,785,087 1.08 362.71
2000-01 26,017 1,005,333,943 9,815,000 616,704 9,198,296 0.92 353.55
2001-02 26,136 1,019,036,665 15,485,000 624,713 14,860,287 1.46 568.58
2002-03 26,255 1,050,874,296 19,240,000 911,685 18,328,315 1.74 698.09
2003-04 26,374 1,074,746,887 18,235,000 1,087,396 17,147,604 1.60 650.17
2004-05 26,493 1,121,338,793 13,776,800 725,394 13,051,406 1.16 492.64
Source:
City of Paris
90
City of Paris, Texas
Ratio of Annual Debt Service Expenditures for
General Obligation Bonded Debt to Total General Governmental Expenditures
Last Ten Fiscal Years
Unaudited
Table 13
Ratio of
(1) Total Debt Service
Total General to General
Fiscal Bank Debt Governmental Governmental
Year Principal Interest Charges Service Expenditures Expenditures
1995-96 $ 184,000 $ 255,563 $ 411 $ 439,974 $ 14,208,516 3.10%
1996-97 185,000 244,620 420 430,040 15,375,221 2.80
1997-98 175,000 233,863 444 409,307 17,020,330 2.41
1998-99 185,000 223,062 571 408,633 17,762,010 2.30
1999-00 195,000 211,663 446 407,109 18,679,658 2.18
2000-01 290,000 640,089 894 930,983 22,360,783 4.16
2001-02 390,000 530,055 1,506 921,561 20,622,810 4.47
2002-03 650,000 700,463 1,610 1,352,073 21,852,988 6.19
2003-04 1,005,000 762,877 1,959 1,769,836 22,282,215 7.94
2004-05 820,800 649,664 1,762 1,472,226 20,681,895 7.12
Source:
City of Paris
Note:
(1) Includes General and Debt Service Funds
<)1
City of Paris, Texas
Computation of Direct and Overlapping
Bonded Debt-General Obligation Bonds
September 30,2005
Unaudited
Table 14
Net General Percent Amount
Obligation Applicable Applicable
Bonded Debt to to
Taxing Jurisdiction Outstanding Government Government
City of Paris $ 13,776,800 100.00% $ 13,776,800
Lamar County 4,717,080 62.75 2,959,968
Paris Independent School District 6,178,290 49.30 3,045,897
Chisum Independent School District 9,108,980 47.75 4,349,538
North Lamar Independent School District 8,359,996 58.33 4,876,385
Paris Junior College 100.00
Total Direct and Overlapping Funded Debt $ 42,141,146 $ 29,008,588
Per Capita Direct and Overlapping Funded Debt $ 1,094.95
Per Capita Direct Debt - See note $ 520.02
Source:
Texas Municipal Reports
Lamar County Appraisal District
Lamar County
Paris Independent School District
Chisum Independent School District
North Lamar Independent District
Paris Junior College
Note: $3,463,200 debt included in Refunding bonds will be be retired by the Water and Sewer Fund
and are not included in the above calculation of Per Capita Direct Debt.
<)2
City of Paris, Texas
Revenue Bond Coverage - Water and Sewer Revenue Bonds
Last Ten Fisical Years
Unaudited
Table 15
Net Revenue Average Remaining
Available Debt Service Requirements
Fiscal Gross Operating F or Debt Percent
Year Revenues* Expenses * * Service Principal Interest Total*** Coverage
1995-96 $9,506,918 $4,857,118 $ 4,649,800 $1,426,562 $854,741 $2,281,303 2.04%
1996-97 9,344,634 5,006,067 4,338,567 1,691,842 974,105 2,665,947 1.63
1997-98 9,671,524 5,257,572 4,413,952 1,777,222 812,200 2,589,422 1.70
1998-99 9,833,441 5,163,027 4,670,414 1,804,411 766,440 2,570,851 1.82
1999-00 11,127,992 5,472,876 5,655,116 1,938,750 939,660 2,878,410 1.96
2000-01 11,342,029 6,263,668 5,078,361 1,927,895 821,680 2,749,575 1.85
2001-02 10,853,869 6,175,627 4,678,242 1,978,056 767,877 2,745,933 1.70
2002-03 10,656,427 5,924,832 4,731,595 1,478,250 529,768 2,008,018 2.36
2003-04 11,715,098 5,791,260 5,923,838 1,726,250 572,654 2,298,904 2.58
2004-05 12,833,693 5,923,360 6,910,333 1,936,880 561,473 2,498,353 2.77
Notes:
(1)* Gross Revenues = Operating and Non-Operating Revenue of the Water and Sewer Fund
(2)** Operating Expenses excluding depreciation
(3)*** Agent fees not included
Sources:
Southwest Securities Official Statement
Rauscher Pierce Refsnes Official Statement
City of Paris CAFR
93
City of Paris, Texas
Demographic Statistics
Last Ten Fiscal Years
Unaudited
Table 16
Percent
Estimated School Unemployment
Fiscal Year Population Enrollments Rate
1995-96 25,294 10,682 5.5%
1996-97 25,413 10,728 5.7
1997 -98 25,532 10,937 9.1
1998-99 25,651 10,602 6.2
1999-00 25,898 11,956 5.3
2000-01 26,017 11,986 5.9
2001-02 26,136 12,794 6.7
2002-03 26,255 12,078 8.1
2003-04 26,374 12,203 6.5
2004-05 26,493 15,595 7.0
Includes Paris Independent School District, North Lamar Independent School District, Chisum Independent
School District, and Paris Junior College.
Source:
City of Paris
Paris Independent School District
North Lamar Independent School District
Chisum Independent School District
Paris Junior College
Chamber of Commerce
94
CIty 01 Pans, 'l'exas
Property Value, Construction and Bank Deposits
Last Ten Fiscal Years
Unaudited
Commercial
Property Value Commercial Construction
Fiscal Year Commercial Residential Total Units Value
1996 $ 733,125,731 $ 286,353,267 $1,019,478,998 17 $ 5,146,368
1997 757,690,634 289,343,608 1,047,034,242 27 5,820,132
1998 750,181,745 292,457,703 1,042,639,448 28 14,713,300
1999 688,043,679 301,432,172 989,475,851 53 15,683,840
2000 794,140,824 316,138,580 1,110,279,404 36 7,121,494
2001 1,038,938,647 331,490,892 1,370,429,539 35 13,307,866
2002 1,453,389,670 344,977,917 1,798,367,587 37 13,476,520
2003 1,386,733,660 368,657,790 1,755,391,450 38 5,092,241
2004 1,326,702,773 430,430,807 1,757,133,580 26 6,571,777
2005 1,307,801,884 430,431,028 1,738,232,912 42 15,372,158
City of Paris
State Property Tax Reports
95
Table 17
Residential Total
Residential Construction Construction Bank
Units Value Value Deposits
80 $ 5,656,200 $ 10,802,568 $ 531,851,000
70 5,241,900 11,062,032 548,453,000
68 4,415,900 19,129,200 535,034,000
58 6,732,750 22,416,590 645,293,000
75 6,814,061 13,935,555 655,075,000
85 9,074,912 22,382,778 694,629,000
90 8,862,903 22,339,423 711,183,000
65 7,476,004 12,568,245 717,618,000
67 4,420,392 10,992,169 748,854,000
47 4,870,500 20,242,658 724,867,000
96
F iscal Year
1995-96
1996-97
1997 -98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
*Source: TXU Electric Delivery Company
City of Paris
** Active connections only
City of Paris, Texas
Utility Connections
Last Ten Fiscal Years
Unaudited
97
Certain Utility Connections *
Water Electric
9,827
9,859
9,741
9,932
10,007
10,137
10,183
10,294
9,941 **
9,865 **
12,418
12,482
12,402
12,863
12,974
13,946
14,151
12,464
12,825
15,930
Table 18
City of Paris , Texas
Miscellaneous Statistics
Unaudited
Table 19
Government:
Date of Incorporation
Current Charter - Adopted November 2
1836
1948
Facilities:
Airports:
Number of Nrports
Fire Protections:
Number of Stations
Number of Fire Hydrants
Number of Employees (Certified)
Employees per 1,000 Population
Library:
Number of Libraries
Number of Volumes (Items)
Circulation of Materials
Circulations per Capita
Library Cards in Force
Police Protection:
Number of Stations
Number of Employees (Certified)
Employees per 1,000 Population
Parks and Recreation:
Parks' Acres Developed
Parks' Acres Undeveloped
City Parks
Streets:
Paved Lane - Miles
Unpaved Streets - Miles
4
1,082
48
1.81
1
102,801
210,956
7.96
15,551
1
62
2.34
87
221
24
199
10
Water and Sewer Utility:
Average Daily Water Consumption - Gallons
Maximum Day's Water Consumption - Gallons
Annual Water Consumption - Gallons
Water Mains - Miles
Water Connections - Metered
Sewer Mains - Miles
10,619,268
18,603,000
3,876,033,000
208
9,865
195
Area Miles
42.89
Number of Full-time Equivalent Employees
325
Source:
City of Paris
98
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(Unaudited)
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CONTINUING DISCLOSURE INFORMATION FOR
THE CITY OF PARIS, TEXAS
ASSESSED VALUATION
TABLE CD.1
2005 Actual Market Value ofTaxable Property (100% of Actual)
Less Exemptions:
Local, Optional Over-65 and/or Disabled Homestead Exemptions
Disabled and Deceased Veterans' Exemptions
Productivity Loss
Freeport
Pollution Control/Solar
Exempt
Abatement Loss
Cap Loss (10%)
$ 36,896,717
2,817,650
16,278,340
69,090,790
17,168,590
233,722,253
253,284,680
578,359
2005 Net Taxable Assessed Valuation
GENERAL OBLIGATION BONDED DEBT
$ 1,738,486,786
629,837,379
J 1,108.649.407
TABLE CD.2
General Obligation Debt Principal Outstanding: (As of September 30, 2005)
Tax and Revenue Refunding Bonds, Series 1998
Combination Tax and Revenue Certificates of Obligation, Series 2000
Tax and Revenue Refunding Bonds, Series 2001
Combination Tax and Revenue Certificates of Obligation, Series 2002
General Obligation Refunding Bonds, Series 2003
Total Gross General Obligation Debt Principal Outstanding:
Less: Self.Supporting General Obligation Debt Principal
Tax and Revenue Refunding Bonds, Series 1998 (100%)
Tax and Revenue Refunding Bonds, Series 2001 (100%)
General Obligation Refunding Bonds, Series 2003 (retired by water/sewer revenues)
Total Self-Supporting General Obligation Debt Outstanding Following the Issuance of the Bonds:
Total Net General Obligation Debt Principal Outstanding Following the Issuance of the Bonds:
General Obligation Interest and Sinking Fund Balance as of September 30, 2005
Ratio of Net General Obligation Debt Principal to 2005 Net Assessed Valuation
2005 Net Assessed Valuation
Population: 1980.25,498; 1990 - 24,699; 2000.25,898; Current (Estimate)
Per Capita 2005 Net Assessed Valuation
Per Capita Gross General Obligation Debt Principal
Per Capita Net General Obligation Debt Principal
99
$ 4,340,000
5,145,000
3,785,000
5,435,000
6,660,000
25,365,000
4,340,000
3,785,000
3,463,200
11,588,200
$ 13,776,800
$ 725,394
1.24%
$ 1,108,649,407
26,493
$ 41,847
$ 957
$ 520
PRINCIPAL TAXPAYERS. 2005.2006
TABLE CD.3
Name
Kimberly-Clark
Essent
Campbell Soup, Inc.
Silgan Can Co.
T enaska III
TXU Electric Delivery Co.
Sara Lee Bakery
Lamar Power Partners
Southwestern Bell Telephone
Campbell Soup Supply, LLC
Total
Based on a 2005 Net Taxable Assessed Valuation of
PROPERTY TAX RATES AND COLLECTIONS
Type of Property
Disposable Diapers
Hospital
Food Manufacturing
Can Manufacturing
Utility
Electric Utility
Food Manufacturing
Utility
Communication
Food Manufacturing
$1,108,649,407
2005 Net Taxable
Assessed Valuation
$125,213,010
42,357,980
40,367,860
22,317,770
20,708,170
20,101,880
12,818,210
12,715,070
8,574.480
8,141,570
$313,316,000
% ofTotal 2005
Assessed
Valuation
11.29%
3.82%
3.64%
2.01%
1.87%
1.81%
1.16%
1.15%
0.77%
0.73%
28.25%
TABLE CD-4
Tax Net Taxable Tax
Year Assessed Valuation Rate
1995-96 $ 734,784,581 $ 0.51770
1996-97 748,660,556 0.51770
1997-98 853,722,050 0.55342
1998-99 814,591,998 0.55342
1999-00 910,083,681 0.58598
2000-01 1,005,333,943 0.61000
2001-02 1,019,160,711 0.61000
2002-03 1,051,417,291 0.69500
2003-04 1,074,746,887 0.69500
2004-05 1,121,338,793 0.69225
Tax
Levy
$ 3,803,981
3,873.454
4,724.497
4,948,368
5,332,833
6,132,621
6,216,227
7,303.340
7,470,691
7,762,498
% Collections
Current Total
95.94% 100.42%
96.09 102.92
96.28 109.84
94.74 98.12
96.74 98.44
95.46 96.99
98.13 99.74
97.50 98.59
96.12 96.85
95.62 95.62
Year
Ended
9-30-96
9-30-97
9-30-98
9-30-99
9-30-00
9-30-01
9-30-02
9-30-03
9-30-04
9-30-05
Note: Although "Total" tax collection percentages in this table include delinquent tax collections, they are allocated to the year they were
originally levied instead of the year in which they were collected.
TAX RATE DISTRIBUTION TABLE CD.5
2005 2004 2003 2002 2001 2000 1999 1998
General Fund $0.56650 $0.57977 $0.57289 $0.56104 $0.51962 $0.51738 $0.54132 $0.50543
I & S Fund 0.12575 0.11248 0.12211 0.13396 0.09038 0.09262 0.04466 0.04799
TOTAL $0.69225 $0.69225 $0.69500 $0.69500 $0.61000 $0.61000 $0.58598 $0.55342
MUNICIPAL SALES TAX TABLE CO-6
The Issuer has adopted the provision of Chapter 321, as amended, Texas Tax Code. In addition, some issuers are subject to a property tax relief and/or an
economic and industrial development tax. The voters of the City approved the imposition of a 1/4 cent additional sales tax to be used for property tax reduction and
a 1/4 cent sales tax for economic development purposes. Levy of the additional sales taxes began on October 1,1993, and the City received its first payment in
December 1993. Collections on calendar year basis are as follows:
($) Equivalent of
Calendar Total 1.00% 0.25% 0.25% % of Ad Valorem Ad Valorem
Year Collected City Prop Tax Red EDC Tax Levy Tax Rate(a) FY Levy
1994 $ 4,554,211 $3,036,141 $ 759,035 $ 759,035 127.54% 0.60 93-94 $ 2,975,593
1995 4,631,308 3,087,539 771,885 771,885 102.80 0.53 94.95 3,754,165
1996 4,742,190 3,161,460 790,365 790,365 103.89 0.54 95-96 3,803,981
1997 4,893,683 3,262,455 815,614 815,614 105.28 0.55 96.97 3,873,454
1998 4,971,047 3,314,031 828,508 828,508 87.68 0.49 97.98 4,724,497
1999 5,518,744 3,679,163 919,791 919,791 92.94 0.51 98-99 4,948,368
2000 5,991,043 3,994,029 998,507 998,507 93.62 0.55 99-00 5,332,833
2001 5,340,121 3,560,081 890,020 890,020 72.56 0.44 00-01 6,132,621
2002 5,414,993 3,609,995 902,499 902,499 71.44 0.44 01-02 6,216,227
2003 5,562.491 3,708,327 927,082 927,082 63.76 0.44 02-03 7,303,340
2004 5,782,791 3,855,193 963,799 963,799 64.51 0.45 03-04 7,470,691
2005 6,005,910 4,003,940 1,000,985 1,000,985 64.48 0.45 04-05 7,762,498
(a)) Based on 1% City portion plus .25% Property Tax Reduction portion.
100
REVENUE BOND DEBT DATA
(As of September 30, 2005)
TABLE CD.7
Revenue Bond Debt Principal Outstanding:
Waterworks and Sewer System Revenue Bonds, Series 1997
Waterworks and Sewer System Revenue Refunding Bonds, Series 1998
Waterworks and Sewer System Revenue Bonds, Series 2000
General Obligation Refunding Bonds 2003 (retired by utility revenues)
Total Gross Revenue Debt
$
$
3,595,000
5,165,000
8,705,000
3,463,200
20,928,200
Note: Does not include general obligation self-supporting debt
REVENUE BONDS DEBT SERVICE REQUIREMENTS TABLE CD.S
Currently
Outstanding Total
Fiscal Year Revenue The Series 2000 Bonds Debt
Endinq 9/30 Debt Service Principal Interest Total Service
2006 $ 1,288,063 $ 380,000 $ 514,434 $ 894,434 $ 2,182,497
2007 1,293,745 400,000 488,309 888,309 2,182,054
2008 1,291,355 425,000 460,809 885,809 2,177,164
2009 1,287,955 455,000 431,590 886,590 2,174,545
2010 1,294,320 480,000 400,309 880,309 2,174,629
2011 1,296,718 505,000 367,309 872,309 2,169,027
2012 1,300,038 530,000 340,165 870,165 2,170,203
2013 432,000 560,000 311,015 871,015 1,303,015
2014 434,000 600,000 280,215 880,215 1,314,215
2015 436,900 630,000 246,465 876,465 1,313,365
2016 438,900 665,000 210,240 875,240 1,314,140
2017 705,000 172,003 877,003 877,003
2018 745,000 131,113 876,113 876,113
2019 790,000 87,344 877,344 877,344
2020 835,000 44,881 879,881 879,881
$ 10,793,994 $ 8,705,000 $ 4,486,201 $ 13,191,201 $ 23,985,195
The City has historically paid debt service requirements on its general obligation System debt from Surplus Revenues of the
System and intends to continue to do so in the future. However, in the event the Surplus Revenues are not on deposit or budgeted
for deposit in the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied, then the City
is obligated to levy and collect an ad valorem tax sufficient to pay principal of and interest on such System debt and the outstanding
general obligation bonds.
101
COVERAGE FACTOR (Revenue Bonds Only)
TABLE CD-9
Average Annual Debt Service Requirement
Net Revenue available for debt service for fiscal year ended 9-30-05
Estimated average annual revenue debt service following the issuance of the Bonds (2005- 2020)
Coverage Factor
$
$
6,167,791
1,599,013
3.86 x
Maximum Annual Debt Service Requirement
Net Revenue available for debt service for fiscal year ended 9-30-05
Estimated maximum annual revenue debt service following the issuance of the Bonds (2006)
Coverage Factor
$
$
6,167,791
2,182,497
2.83 x
COVERAGE FACTOR (Revenue Bonds Plus System General Obligation Debt)
TABLE CD-10
Average Annual Debt Service Requirement
Net Revenue available for debt service for fiscal year ended 9-30-05
Estimated average annual system debt service including system GO Bonds (2005 - 2020)
Coverage Factor
$
$
6,167,791
2,498,250
2.47 x
Maximum Annual Debt Service Requirement
Net Revenue available for debt service for fiscal year ended 9-30-05
Estimated maximum annual system debt service including system GO Bonds (GO-2012 Rev-2006)
Coverage Factor
REVENUE BONDS PRINCIPAL REPAYMENT SCHEDULE
$
$
6,167,791
3,962,571
1.56 x
TABLE CD-11
Principal Payment Schedule
Fiscal Year Bonds Series 2000
Ending 9/30 Outstanding Revenue Bonds Total
2006 $ 880,000 $ 380,000 $ 1,260,000
2007 930,000 400,000 1,330,000
2008 975,000 425,000 1,400,000
2009 1,020,000 455,000 1,475,000
2010 1,075,000 480,000 1,555,000
2011 1,130,000 505,000 1,635,000
2012 1,190,000 530,000 1,720,000
2013 360,000 560,000 920,000
2014 380,000 600,000 980,000
2015 400,000 630,000 1,030,000
2016 420,000 665,000 1,085,000
2017 705,000 705,000
2018 745,000 745,000
2019 790,000 790,000
2020 835,000 835,000
$ 8,760,000 $ 8,705,000 $ 17,465,000
102
ENTERPRISE NET ASSETS
(As of September 30, 2005)
TABLE CD.12
Invested in Capital Assets, Net of Related Debt
Restricted for Debt Service
Restricted for Construction
Unrestricted
Total Enterprise Fund Balances
$ 21,981,460
2,005,374
1,930,733
5,625,512
$ 31,543,079
UTILITY PLANT IN SERVICE
(As of September 30, 2005)
TABLE CD.13
Land
Plant, Pumps and Motors
Distribution and Collection Systems
Furniture and Equipment
Automobiles and Other Vehicles
Construction in Progress
Total
Less: Accumulated Depreciation
Net Utility Plant in Service
Water & Sewer
$ 282,672
31,740,002
56,306,656
244,222
1,933,486
503,504
91,010,542
39,975,882
$ 51,034,660
REVENUE BONDS AUTHORIZED BUT UNISSUED
TABLE CD.14
Date of Amount Issued
Authorization Purpose Authorized To Date Unissued
8-14-56 WW & 55 $ 2,300,000 $ 2,100,000 $ 200,000
9-21-65 Sewer System 200,000 100,000 100,000
Totals $ 2,500,000 $ 2,200,000 $ 300,000
103
WATERWORKS AND SEWER SYSTEM OPERATING STATEMENT TABLE CD-15
Fiscal Year Ended September 30
Operating Revenues (a) 2005 2004 2003 2002 2001
Water Sales and Taps $ 7,069,193 $ 6,158,999 $ 6,098,221 $ 5,979,239 $ 5,931,585
Sewer Charges and Taps 4,670,660 4,293,315 3,929,514 3,909,737 3,936,179
Industrial Charges 161,330 137,014 155,960 144,859 239,211
Other 189,968 269,690 155,763 209,085 451,221
Total Revenues 12,091,151 10,859,018 10,339,458 10,242,920 10,558,196
Expenses 5,923,360 5,791,260 5,983,547 6,175,627 6,263,668
Net Revenue Available for Debt Service $ 6,167,791 $ 5,067,758 $ 4,355,911 $ 4,067,293 $ 4,294,528
Annual Revenue Bond Requirements $ 2,182,496 $ 2,032,813 $ 2,022,356 $ 1,945,280 $ 1,954,859
Coverage of Annual Revenue Bond
Requirements 2.83 x 2.49 x 2.15 x 2.09 x 2.20 x
Annual Requirements on all Bonds Paid from
System Revenues $ 3,830,594 $ 3,834,728 $ 3,811,647 $ 2,815,135 $ 3,757,223
Coverage of Annual Requirements on all
Bonds Paid from System Revenues 1.61 x 1.32 x 1.14 x 1.44 x 1.14 x
Customer Count:
Water 9,865 9,941 10,153 10,121 10,079
Sewer 9,444 9,648 9,688 9,619 9,616
(a) Does not include Sanitation Billing Fees of: $ 69,700 $ 70,844 $ 73,017 $ 70,816 $ 75,286
104
WATER RATES
(Rates Effective July 1, 2005)
Residential Class
TABLE CD.16
Meter Size
(Inches)
5/8" - 3/4"
1" and Larger
Base Cost and Additional
Cubic Foot Charge
(Per Cubic Foot)
$8.00 for first 200 Cubic Feet
$39.00 for first 1,000 Cubic Feet
Commercial/Industrial Class
Service in Excess of Base
(For Each Additional
100 Cubic Feet)
$2.70 I 100 Cubic Feet
$2.70 I 100 Cubic Feet
Meter Size
(Inches)
5/8" . 3/4"
1" - 2"
Larger than 1"
Base Cost and Additional
Cubic Foot Charge
(Per Cubic Foot)
$9.75 for first 200 Cubic Feet
$39.00 for first 1,000 Cubic Feet
$140.00 for first 3,000 Cubic Feet
Commercial I Industrial Class
(Meters Greater Than Three Inches)
Service in Excess of Base
(For Each Additional
1 00 Cubic Feet)
$2.70 I 100 Cubic Feet
$2.21 I 100 Cubic Feet
$2.21 I 100 Cubic Feet
Meter Size
,(Inches)
4
6
8 and Larger
Base Cost and Additional
Cubic Foot Charge
JPer Cubic Foot)
$2,300.00 for first 100,000 Cubic Feet
$3,450.00 for first 150,000 Cubic Feet
$4,600.00 for first 200,000 Cubic Feet
PRINCIPAL WATER CUSTOMERS. 2004.2005
Service in Excess of Base
(For Each Additional
100 Cubic Feet)
$2.21/100 Cubic Feet
$2.21/100 Cubic Feet
$2.21 I 100 Cubic Feet
TABLE CD.17
Name of Customer
Lamar Co. Water Supply
LamarPowerPartne~
Campbell Soup
Kimberly Clark
Tenaska
Sara Lee Bakery
Paris Regional Medical Center
MJC Water District
Sesame Solutions
Paris ISO
Product
Water Utility
Electric Utility
Soups, Juices, Sauces
Disposible Diapers
Electric Utility
Snack Cakes/Bread
Medical Care
Water Utility
Food
Public Education
Totals
105
FY 2005
Average Monthly
Consumption (Cu Ft.)
12,209,798
11,778,744
10,463,960
1,392,176
807,423
668,500
536,843
212,610
208,630
135,540
38,414,224
FY 2005
Average
Monthly Bill
$ 78,584
22,092
87,300
23,346
5,813
14,858
12,388
4,327
3,027
3,535
$ 255,270
SEWER RATES
(Rates Effective July 1, 2005)
Residential Class
TABLE CD.18
Meter Size
(Inches)
5/8" - 3/4"
1" and Larger
Base Cost
(Per Cubic Foot)
$9.00 for first 200 Cubic Feet
$42.00 for first 1,000 Cubic Feet
Commercial Industrial Class
Service in Excess of Base
(For Each Additional
100 Cubic Feet)
$3.64 / 100 Cubic Feet
$3.64 / 100 Cubic Feet
Meter Size
(Inches)
5/8" - 3/4"
1" . 2"
Larger than 2"
Base Cost
(Per Cubic Foot)
$12.00 for first 200 Cubic Feet
$42.00 for first 1,000 Cubic Feet
$84.00 for first 2,000 Cubic Feet
PRINCIPAL SEWER CUSTOMERS. 2004.2005
Service in Excess of Base
(For Each Additional
100 Cubic Feet)
$3.80 / 100 Cubic Feet
$3.80/100 Cubic Feet
$3.80 / 100 Cubic Feet
TABLE CD.19
Name of Customer
Sara Lee Bakery
Paris Regional Med. Center
Kimberly Clark
Paris Housing Authority
Paris ISO
Lamar Co. Human Resources
Paris Junior College
Lamar Co. Courthouse
Paris Nursing Home
Sesame Solutions
Product
Snack Cakes/Bread
Medical Care
Disposable Diapers
Housing
Public Education
Multi-family Housing
Higher Education
Local Government
Long Term Care
Food
Totals
106
FY 2005
Average Monthly
Consumption (Cu Ft.)
673,583
356,850
300,242
153,607
121,295
110,755
82,950
80,250
70,336
69,104
2,018,972
FY 2005
Annual
Monthly Bill
$ 24,717
14,532
11,034
5,676
4,634
4,125
3,052
2,993
2,579
2,550
$ 75,892
::>VERALL COMPLIANCE, INTERNAL CONTROLS
AND FEDERAL AND STATE AWARDS SECTION
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OVERALL COMPLIANCE, INTERNAL CONTROL;)
AND FEDERAL AND STATE AWARDS SECTION
This section includes elements required by Government Auditing Standards, issued by the Comptroller General of the
United States; U.S. Office of Management and Budget (OMB) Circular A-B3, Audits of States. Local Governments,
and Non-Profit Organizations; and requirements of Agencies of the State of Texas.
107
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MCCLANAHAN AND HOLMES, LLP
CERTIFIED PUBLIC ACCOUNTANTS
228 SIXTH STREET, S.E.
PARIS, TEXAS 75460
903.784.4316
FAX 903.784.4310
304 WEST CHESTNUT
DENISON, TEXAS 75020
903-465.6070
FAX 903-465-6093
1400 WEST RUSSELL
BONHAM. TEXAS 75418
903-583-5574
FAX 903-583-9453
R. FRANK RAY, CPA
R. E. BOSTWICK, CPA
STEVEN W. MOHUNDRO, CPA
GEORGE H. STRUVE, CPA
ANDREW B. REICH, CPA
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
Honorable Mayor and City Council
City of Paris, Texas
We have audited the accompanying financial statements of the City of Paris, Texas, as of and for the year ended
September 30, 2005, and have issued our report thereon dated November 30, 2005. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America and the standards applicable
to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial reporting in order to
determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to
provide an opinion on the internal control over financial reporting. Our consideration of the internal control over
financial reporting would not necessarily disclose all matters in the internal control that might be material
weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low level the risk that misstatements caused by error or
fraud in amounts that would be material in relation to the financial statements being audited may occur and not be
detected within a timely period by employees in the normal course of performing their assigned functions. We noted
no matters involving the internal control over financial reporting and its operation that we consider to be material
weaknesses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Paris, Texas' 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
instances of noncompliance or other matters that are required to be reported under Government Auditing Standards,
and which are described in the accompanying schedule of findings and questioned costs as item 2005-1.
This report is intended solely for the information and use of the City Council, management, others within the
organization, 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.
/1k- ~~ cwJ f~ at
Certified Public Accountants
Paris, Texas
November 30, 2005
108
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
I' .f
l"'"'''''"''' /" l~'-: C;" ~Ill1f' K ~~~' l@iI" J],' ~ ~~' ,lRtt. lill~~'"
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City of Paris, Texas
Summary Schedule of Prior Audit Findings
Fiscal Year Ended September 30,2005
FindingIRecommendation
Schedule Reference Number: 2001-1
Condition Found: In the Emergency Medical Service Department, several
procedures related to revenue and accounts receivable are vested in one
individual who can access and change billings, prepare receipts for collections,
post collections, and make write-offs and adjustments to accounts receivable.
Recommendation: We recommend that duties be segregated or other responsible
persons be involved in the procedures.
109
Current Status
Corrective action
completed
City of Paris, Texas
Schedule of Findings and Questioned Costs
Fiscal Year Ended September 30, 2005
Section I - Summary of Auditor's Results
Financial Statements
Type of auditors' report issued: Unqualified
Internal control over fmancial reporting:
Material W eakness( es) identified?
_yes ~no
Reportable condition(s) identified that are not considered to be
material weakness( es)?
_ yes L none reported
Noncompliance material to fmancial statements noted?
_yes lno
Federal Awards
Internal control over major programs:
Material weakness( es) identified?
_yes lno
Reportable conditions(s) identified that are not considered to be
material weakness( es)?
_ yes ---X- none reported
Type of auditors' report issued on compliance for major programs: Unqualified
Any audit fmdings disclosed that are required to be reported in accordance
with Section 510(a) of Circular A-B3? _ yes ---X- no
Identification of major programs:
CFDA Number(s)
Name of Federal Program or Cluster
16.579
Regional Controlled Substance Apprehension Program
Dollar threshold used to distinguish between type A and type B programs: $300,000
Auditee qualified as low-risk auditee?
_yes lno
110
City of Paris, Texas
Schedule of Findings and Questioned Costs (Continued)
Fiscal Year Ended September 30,2005
Section II - Financial Statement Findings
None
Section III - Federal Award Findings and Questioned Costs
None
111
City of Paris, Texas
Corrective Action Plan
Fiscal Year Ended September 30, 2005
N/A
112
MCCLANAHAN AND HOLMES, LLP
CERTIFIED PUBLIC ACCOUNTANTS
228 SIXTH STREET, S.E.
PARIS, TEXAS 75460
903-784-4316
FAX 903-784-4310
304 WEST CHESTNUT
DENISON, TEXAS 75020
903-465.6070
FAX 903-465-6093
1400 WEST RUSSELL
BONHAM, TEXAS 75418
903-583-5574
FAX 903-583-9453
R. FRANK RAY, CPA
R. E. BOSTWICK, CPA
STEVEN W. MOHUNDRO, CPA
GEORGE H. STRUVE, CPA
ANDREW B. REICH, CPA
Report on Compliance with Requirements Applicable
to Each Major Program and on Internal Control Over
Compliance in Accordance with OMB Circular A-133
Honorable Mayor and City Council
City of Paris, Texas
Compliance
We have audited the compliance of the City of Paris, Texas, with the types of compliance requirements described in
the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to
each of its major federal programs for the year ended September 30, 2005. The City's majo~ federal program is
identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs.
Compliance with the requirements of laws, regulations, contracts, and grants applicable to its major federal program
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-B3, 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 on the City's compliance with those requirements.
In our opinion, the City of Paris, Texas, complied, in all material respects, with the requirements referred to above
that are applicable to its major federal program for the year ended September 30, 2005.
Internal Control Over Compliance
The management of the City of Paris, Texas, is responsible for establishing and maintaining effective internal control
over compliance with 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 requirements that
could have a direct and material effect on a major federal program in order to determine our auditing procedures for
the purpose of expressing our opinion on compliance and to test and report on the internal control over compliance
in accordance with OMB Circular A-133.
113
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
Honorable Mayor and City Council
City of Paris, Texas
Page 2
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal
control that might be material weaknesses. A material weakness is a reportable condition in which the design or
operation of one or more of the internal control components does not reduce to a relatively low level the risk that
noncompliance with applicable requirements of laws, regulations, contracts, and grants caused by error or fraud that
would be material in relation to a major federal program being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned functions. We noted no matters involving the
internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of the City Council, management, others within the
organization, 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.
I1tLWtMi ~ j~ itl
Certified Public Accountants
Paris, Texas
November 30, 2005
114
McCLANAHAN AND HOLMES. LLP
City of Paris, Texas
Schedule of Expenditures of Federal A wards
Year Ended September 30, 2005
Federal
CFDA Project
Federal Grantor/Pass- Through Grantor/Program Title Number Number Expenditures
Federal Emergency Management Assistance
Direct Program:
Assistance to Firefighters Grant Program 83.548 EMW-2004-FG-12660 $ 106,459
Office for Domestic Preparedness
Passed Through Texas Engineering Extension Service:
State Domestic Preparedness Equipment
Support Program 97.004 2003- TE- TX-0174 46,310
2004-GE- T4-0015 76,003
Total Office for Domestic Preparedness 122,313
U.S. Department of Health and Human Services
Passed Through Texas Department of Health:
Special Supplemental Food Program for Women,
Infants and Children 10.557 7560022067-001 231,832
U.S. Department of Housing and Urban Development
Passed Through the Office of Rural Community Affairs:
Community Development Block Grant -
Housing Rehabilitation Program 14.228 723038 8,514
Passed Through Texas Department of Housing and and Community Affairs:
HOME Program - Homebuyer Assistance 14.239 542041 82,750
Total U.S. Department of Housing and
Urban Development 91,264
U.S. Department of Justice
Direct Program:
Local Law Enforcement Grants Program 16.592 2004-LB-BX-0939 16,107
2003-LB-BX-1215 41,120
2002-LB-BX-2059 20,222
Total CFDA Number 16.592 77,449
Passed Through Texas Criminal Justice Division:
Regional Controlled Substance Apprehension Program
6-1-04 to 5-31-05 16.579 DB-02-A 1 0-13854-06 767,261
Violent Crimes Against Women
9-1-05 to 8-31-06 16.588 WF-05- V30-13420-08 8,063
9-1-04 to 8-31-05 16.588 WF-04- V30-13420-07 73,205
Total CFDA Number 16.588 81,268
Total Passed Through Texas Criminal Justice Division 848,529
Total U.S. Department of Justice 925,978
115
City of Paris, Texas
Schedule of Expenditures of Federal A wards (Continued)
Year Ended September 30, 2005
Federal Grantor/Pass- Through GrantorlProgram Title
U.S. Department of the Treasury
Passed Through Bureau of Alcohol, Tobacco, and Firearms:
Gang Resistance Education and Training
Total Expenditures of Federal Awards
Federal
CFDA
Number
Project
Number
21.1 00
2004-N-FX-0117
116
Expenditures
13,047
$ 1,490,893
City of Paris, Texas
Notes on Accounting Policies for Federal Awards
Year Ended September 30, 2005
N otel: Basis of Presentation
The accompanying schedule of expenditures of federal awards includes the federal grant activity of the City of Paris,
Texas, and is presented on the modified accrual basis of accounting. The information in this schedule is presented in
accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in
the preparation of, the [mancial statements.
117
City of Paris, Texas
HOME Program - Home Buyers Assistance
Schedule of Revenues and Expenditures
Year Ended September 30, 2005
Federal Financial Assistance
Federal Grantor: United States Department of Housing and Urban Development
Pass Through Grantor: Texas Department of Housing and Community Affairs
CFDA Number 14.239
Project Number 542041
Contract Period 10/01/03 - 09/30/05
Variance
Award Prior Current Favorable
Budget Year Year Total (Unfavorable )
Revenues:
Federal $ 312,000 $ 37,500 $ 82,750 $ 120,250 $ (191,750)
Local 25,000 4,000 15,000 19,000 ( 6,000)
Total Revenues 337,000 41,500 97,750 139,250 (197,750)
Expenditures:
Federal
Home Buyer Assistance 300,000 37,500 82,750 120,250 179,750
Administration 12,000 12,000
Local 25,000 4,000 15,000 19,000 6,000
Total Expenditures 337,000 41,500 97,750 139,250 197,750
Excess Revenues
Over Expenditures $ $ $ $ $
11R
City of Paris, Texas
1999 Housing Infrastructure Fund Program
Schedule of Revenues and Expenditures
Year Ended September 30, 2005
Federal Financial Assistance
Federal Grantor: United States Department of Housing and Urban Development
Pass Through Grantor: Office of Rural Community Affairs
CFDA Number 14.228
Project Number 719068
Contract Period 09110/99 - 03/09/05
Variance
A ward Prior Current Favorable
Budget Year Year Total (Unfavorable)
Revenues:
Federal $399,500 $394,150 $ - $ 394,150 $ (5,350)
Total Revenues 399,500 394,150 394,150 (5,350)
Expenditures:
Water Improvements 33,000 33,000 33,000
Sewer Improvements 85,000 85,000 85,000
Street Improvements 154,525 154,525 154,525
Flood and Drainage 33,238 33,238 33,238
C1earanceIDemolition 23,737 23,737 23,737
Engineering 30,000 30,000 30,000
Administration 40,000 34,650 34,650 5,350
Total Expenditures 399,500 394,150 394,150 5,350
Excess Revenues
Over Expenditures $ $ $ $ $
119
City of Paris, Texas
Community Development Block Grant - Housing Rehabilation Program
Schedule of Revenues and Expenditures
Year Ended September 30, 2005
Federal Financial Assistance
Federal Grantor: United States Department of Housing and Urban Development
Pass Through Grantor: Office of Rural Community Affairs
CFDA Number 14.228
Project Number 723038
Contract Period 06/1 0/03 - 06/09/05
Variance
A ward Prior Current Favorable
Budget Year Year Total (Unfavorable)
Revenues:
Federal $ 250,000 $ 241,486 $ 8,514 $ 250,000 $
Local 55,600 39,624 20,136 59,760 4,160
Total Revenues 305,600 281,110 28,650 309,760 4,160
Expenditures:
Federal
Owner Occupied
Housing Assistance 250,000 241,486 8,514 250,000
Local 55,600 39,624 20,136 59,760 4,160
Total Expenditures 305,600 281,110 28,650 309,760 4,160
Excess Revenues
Over Expenditures $ $ $ $ $
120
MCCLANAHAN AND HOLMES, LLP
CERTIFIED PUBLIC ACCOUNTANTS
228 SIXTH STREET. S.E.
PARIS, TEXAS 75460
903-784-4316
FAX 903-784-4310
304 WEST CHESTNUT
DENISON, TEXAS 75020
903-465-6070
FAX 903-465-6093
1400 WEST RUSSELL
BONHAM, TEXAS 75418
903-583-5574
FAX 903-583-9453
R. FRANK RAY, CPA
R. E. BOSTWICK, CPA
STEVEN W. MOHUNDRO, CPA
GEORGE H. STRUVE, CPA
ANDREW B. REICH, CPA
Report on Compliance with Requirements Applicable to
Each Major Program and on Internal Control Over Compliance
in Accordance with State of Texas Single Audit Circular
Honorable Mayor and City Council
City of Paris, Texas
Compliance
We have audited the compliance of the City of Paris, Texas, with the types of compliance requirements that are
applicable to its major state programs for the year ended September 30, 2005. The City's major state programs are
identified in the summary of auditors' results section of the accompanying schedule of [mdings and questioned costs.
Compliance with the requirements of laws, regulations, contracts, and grants applicable to its major state programs
are 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 the State of Texas Single Audit Circular. Those standards and the
State of Texas Single Audit Circular 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 state 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 on the City's compliance with those requirements.
In our opinion, the City of Paris, Texas, complied, in all material respects, with the requirements referred to above
that are applicable to its major state programs for the year ended September 30, 2005. However, the results of our
auditing procedures disclosed an instance of noncompliance with those requirements, which is required to be
reported in accordance with the State of Texas Audit Circular and which is described in the accompanying Schedule
of Findings and Questioned Costs as item 2005-1.
Internal Control Over Compliance
The management of the City of Paris, Texas, is responsible for establishing and maintaining effective internal control
over compliance with requirements of laws, regulations, contracts, and grants applicable to state programs. In
planning and performing our audit, we considered the City's internal control over compliance with requirements that
could have a direct and material effect on a major state program in order to determine our auditing procedures for the
purpose of expressing our opinion on compliance and to test and report on the internal control over compliance in
accordance with the State of Texas Single Audit Circular.
121
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
Honorable Mayor and City Council
City of Paris, Texas
Page 2
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal
control that might be material weaknesses. A material weakness is a reportable condition in which the design or
operation of one or more of the internal control components does not reduce to a relatively low level the risk that
noncompliance with applicable requirements of laws, regulations, contracts, and grants caused by error or fraud that
would be material in relation to a major state program being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned functions. We noted no matters involving the
internal control compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the infornlation and use of the City Council, management, others within the
organization, state awarding agencies, and pass-through entities and is not intended to be and should not be used by
anyone other than these specified parties.
M~ CVt#/ /lcduu,/LLf
Certified Public Accountants
Paris, Texas
November 30, 2005
122
McCLANAHAN AND HOLMES. LLP
City of Paris, Texas
Summary Schedule of Prior Audit Findings
Fiscal Year Ended September 30, 2005
Finding/Recommendation
Schedule Reference Number: 2001-1
Condition Found: In the Emergency Medical Service Department, several
procedures related to revenue and accounts receivable are vested in one
individual who can access and change billings, prepare receipts for collections,
post collections, and make write-offs and adjustments to accounts receivable.
Recommendation: We recommended that duties be segregated or other responsible
personnel be involved in the procedures.
Schedule Reference Number 2004-1
Condition Found: The City had not acquired weekly certified payrolls from each
construction contractor associated with the Statewide Transportation Enhancement
Program grant.
Recommendation: We recommended that the City acquire this information
for their records.
123
Current Status
Corrective Action
Completed
Corrective Action
Completed
City of Paris, Texas
Schedule of Findings and Questioned Costs
Year Ended September 30, 2005
Section I - Summary of Auditors' Results
Financial Statements
Type of auditors' report issued: Unqualified
Internal control over fmancial reporting:
Material W eakness( es) identified?
Reportable condition( s) identified that are not considered to be
material weakness( es)?
Noncompliance material to fmancial statements noted?
State Awards
Internal control over major programs:
Material weakness( es) identified?
Reportable conditions( s) identified that are not considered to be
material weakness( es)?
Type of auditors' report issued on compliance for major programs: Unqualified
Any audit fmdings disclosed that are required to be reported in accordance
with the Texas Single Audit Circular?
Identification of major programs:
_ yes --X- no
_ yes -L none reported
_yes -Lno
_ yes -X- no
_ yes --X- none reported
-X- yes _ no
Grantor's Number(s)
Name of State Program or Cluster
7560022067-2005
ACFH/PHC
OPHP/LPHS
IMM/LOCALS
Dollar threshold used to distinguish between type A and type B programs: $300.000
Auditee qualified as low-risk auditee?
Section II - Financial Statement Findings
None
124
_ yes --X- no
City of Paris, Texas
Schedule of Findings and Questioned Costs (Continued)
Year Ended September 30, 2005
Section III - State Award Findings and Questioned Costs
Schedule Reference Number: 2005-1
Program: Immunization Grant - Texas Department of Health Services
Project Number: 7560022067-2005
Criteria: Vaccines may not be purchased with immunization grant funds.
Condition: Expenditures charged to this grant included charges for vaccines.
Context: Auditor examined paid invoices noting vaccines purchases made.
Effect: The City will have to repay these grant funds back to the State for unallowable expenditures of$I,805.
Cause: Unallowable expenditures charged to this grant.
Recommendation: Responsible person to watch grant expenditures and not charge unallowable expenditures to
grant.
Views of Responsible Official and Planned Corrective Action: The Health Department Administrator will review all
requisitions to verify that no vaccines are being purchased with future Immunization Grants. The disallowed charge
will be moved to local funds.
125
City of Paris, Texas
Corrective Action Plan
Fiscal Year Ended September 30,2005
Schedule Reference Number: 2005-1
Program: Immunization Grant - Texas Department of Health Services
Project Number 7560022067-2005
Corrective Actions Plan: The Health Department Administrator will review all requisitions to verify that no vaccines
are being purchased with future Immunization Grants. The disallowed charge will be
moved to local funds.
Contact Person: Anthony Bethel
Anticipated Completion Date: 12-31-05
126
CIty of Pans, Texas
Schedule of Expenditures of State A wards
Year Ended September 30, 2005
Program Title Grantor's Number Expenditures
Texas Department of Health
ACFH/PHC 75-60022067-2005 $ 165,638
OPHPILPHS 108,461
IMM/LOCALS 48,239
ACFH/FEE 75-60022067 A-2005 7,376
CHS/PHC 75-60022067-2006 26,309
RLSS/LPHS 30,568
IMM/LOCALS 4,919
Total Texas Department of Health 391,510
Texas Automobile Theft Prevention Authority
Northeast Texas Automobile Theft Task Force SA-TO 1-1 0062-06 9,560
Northeast Texas Automobile Theft Task Force SA-TO 1-1 0062-05 69,816
Total Texas Automobile Theft Prevention Authority 79,376
Texas Department of Transportation
Statewide Transportation Enhancement Program CSJ:090 1-29-017 77 ,963
Total Expenditures of State A wards $ 548,849
127
CIty of Pans, Texas
Notes On Accounting Policies For State Awards
Year Ended September 30, 2005
N otel: Basis of Presentation
The accompanying schedule of expenditures of state awards includes the state grant activity of the City of Paris,
Texas, and is presented on the modified accrual basis of accounting. The information in this schedule is
presented in accordance with the requirements of the Comptroller General of the United States and the State of
Texas Single Audit Circular. Therefore, some amounts presented in this schedule may differ from amounts
presented in, or used in the preparation of, the financial statements.
128