C.A.F.R., FY 2005-06
COMPREHENSIVE ANNUAL FINANCIAL
REPORT
FOR
CITY OF PARIS, TEXAS
For the Fiscal Year Ended September 30, 2006
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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 30,2006
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal. . . . . . . , , . . . . . . . . . . . . . . . . . . . . . . . . . . .. ...,.,..,.....,...............
GFOA Certificate of Achievement. . . . . . . , . . . . . . . . . . . . . . . . .. .....................,......,.
City Organization Chart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . , . . . . . . . . . . . . . . , . . . . . .
List of Elected and Appointed Officials. . . . . . . . . . . . . . . . , . . . . . . . . . . . . , . . . . . . . . . , . , . . . . . . . . . . .
FINANCIAL SECTION
Independent Auditors' Report. . . , . , , , . . . . . . . . . . . . . . . . . . . . .. .........,........,...........
Management's Discussion and Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 Balance -
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 Division 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 Schedules by Source. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , .
Schedule by Function and Activity. . . . . . . . . . . . . . . . . . . . . .. ..............................
Schedule of Changes by Function and Activity . . . . . . . . . . . .. ..............................
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Statement
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Schedule
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City of Paris, Texas
Comprehensive Annual Financial Report
for the fiscal Year Ended September 30, 2006
TABLE OF CONTENTS (Continued)
Page
Table
STATISTICAL SECTION
Financial Trends
Net Assets by Component. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . 70 1
Changes in Net Assets. . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .....,........................ 71 2
Fund Balances of Governmental Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 3
Changes in Fund Balances of Governmental Funds. . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 4
Revenue Capacity
Property Tax Levies and Collections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . 77 5
Property Tax Rates - All Direct and Overlapping Governments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 6
Assessed and Estimated Actual Value ofproperty. . . .. . .. .. .. . . .. . . . . . .. .. . . . . . . . . . . . .. .. .. . 80 7
Principal Property Taxpayers ............................ . . , .. . . . . . . .. . . .. . . . . . . . . . . .. . 82 8
Debt Capacity
Ratio of Net General Obligation Bonded Debt to Assessed Value and
Net General Obligation Bonded Debt Per Capita. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 9
Ratio of Outstanding Debt by Type. . . . . . . . . . . . . . . . . . . . . . .. ...................,.......... 85 10
Direct and Overlapping Governmental Activities Debt . . . . . . ., ......................,....... 87 11
Legal Debt Margin Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 12
Revenue Pledged Coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 13
Demographic and Economic Information
Demographic and Economic Statistics . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . 90 14
Principal Employers (Major Employers) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 15
Operating Information
Operating Indicators by Function. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 16
Capital Asset Statistics by Function. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 17
Building Permits at Market Value.. .. . . .. . . . . .. .. .. . .. . ... .............................. 96 18
Full-Time Equivalent City Government Employees by Function. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 19
CONTINUING DISCLOSURE INFORMATION (Unaudited)
Continuing Disclosure Information. . . . . . . . . . . . . . . . . . . . . . . . . ,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
City of Paris, Texas
Comprehensive Annual financial Report
For the Fiscal Year Ended September 30,2006
TABLE OF CONTENTS (Continued)
Page
OVERALL COMPLIANCE, INTERNAL CONTROLS,
AND FEDERAL AND STATE A WARDS SECTION
Federal:
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Summary Schedule of Prior Audit Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Schedule of Findings and Questioned Costs. . . . . . . . . . . . . . . " . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . 110
Corrective Action Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III
Report on Compliance with Requirements Applicable to Each Major Program and on
Internal Control Over Compliance in Accordance with OMB Circular A-133. . . . . . . . . . . . . . . . . . . . . 112
Schedule of Expenditures of Federal Awards. . . .. . .. .. .. .. . . .. . . . .. .. . . . . . . . .. .. . . . . . . . .. . . 114
Notes on Accounting Policies for Federal Awards. . . . . . . . . . .. .............................. 115
Schedules of Revenues and Expenditures:
HOME Program - Home Buyers Assistance. . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
1999 Housing Infrastructure Fund Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
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. . . . . . . . . 118
Summary Schedule ofprior Audit Findings.. . .. . . . .. . .. . , .. . . . . .. .. . . .. .. .. .. . .. .. . . .. . .. . 120
Schedule of Findings and Questioned Costs.. . .. .. . .. .. .. '" ... .. . . . .. .. . . . .. . . . .. . . . .. .. . 121
Corrective Action Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Schedule of Expenditures of State Awards. . . .. . .. .. . . . . .. . . .. . . .. .. .. .. . . . .. . . .. . . . .. . .. . 123
Notes On Accounting Policies For State Awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
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INTRODUCTORY SECTION
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January 4,2007
Mayor Richard Manning
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, 2006.
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 [mancial 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's Discussion and Analysis included in the [mancial 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, 2006, which
follows, was prepared by the Finance Department. The fmancia1 statements have been audited by McClanahan and Holmes,
LLP, CP As, 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, 2006, 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 financial 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 financial activity have been included.
P.O. BOX 9037 . PARIS, TEXAS 75461-903iI-f (903) 785-7511 · FAX (903) 785-8519
The financial 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 fmancial 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,
financial statements and related notes, and supplemental financial data.
3. The Statistical Section includes several tables of unaudited data depicting the financial 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 fmancial information required by
the United States Securities and Exchange Commission Rule l5c2-12. 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, 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 [mancial 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 7
banks. The City's 2000 census is 25,898 an increase of 4.85% from the 1990 census of24,699.
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 of7.77% 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
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 AT&T.
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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 County are provided at Paris Junior College located in the City. Total
emollment of these entities is 12,201.
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 pools, 26 tennis courts, 3 walk/jog tracks, a
recently completed sports complex, and 24 public park areas.
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 2006-2007 reflect a 21.87% increase over the 2005-2006 values. This increase was due
to the expiration of a local power plant's tax abatement period. Building permits for new residential and commercial
construction totaled $10,325,998 for fiscal year 2005-2006. This activity should be reflected in next year's taxable values.
Sales taxes for 2005-2006 increased from the prior year by 6.6%. Current rebates are 10.3% above the 2005-2006 rebates
through December 2006.
Hotel occupancy taxes were up 26.05% compared to 2004-2005 taxes. This increase in activity is an additional sign that the
local economy is growing stronger.
franchise fees decreased .29% and are expected to experience slow growth. 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 109.27% of budget. Expenses did not exceed total budget appropriations. General Fund
expenditures were only 93.70% of budget.
For the 2006-2007 fiscal year, the City Council adopted a tax rate of 59.225 cents per $100 of value. Even though this is a 10
cent rate decrease, this rate still 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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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. One other continuing law enforcement program is the auto theft task force. A felony crimes unit is planned for the
2006-07 year in conjunction with Lamar County.
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 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 financial 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 financial reporting principles. Using the GASB 34 reporting model, the
City's Comprehensive Annual Financial Report provides for a management's discussion and analysis, government-wide
fmancial statements, major fund fmancial statements, notes to the fmancial statements, and other required supplementary
information.
Cash Management/Investments
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
fmancial 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.
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.
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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 reCDrds for preparing fmancial statements and
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 of9-30-06:
Moody's
Tax Revenue Final Investors
Issue Supported Supported Maturity Rating
1997 W & S Rev. Bonds $ $ 3,350,000 06-15-16 A3
1998 Tax & Rev. Refunding Bonds 3,800,000 12-15-11 A3
1998 W & S Rev. Refunding Bonds 4,530,000 12-15-11 A3
2000 Tax & Rev. C. O. 4,925,000 12-15-19 A3
2000 W & S Rev. Bonds 8,325,000 6-15-20 A3
2001 Tax & Rev. Refunding Bonds 3,300,000 6-15-12 A3
2002 Tax & Rev. Bonds 5,225,000 12-15-21 A3
2003 General Obligation
Refunding Bonds 2,904,000 3,146,000 12-15-14 A3
Total $13.054,000 $26.451.000
The City has various lease/purchase agreements outstanding for the purpose of acquiring certain equipment items with the
minimum lease payments amounting to $103,798. 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 $41,897. Final payment is due August 21,2011.
Independent Audit
The City Charter requires an arumal 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 perfonned in accordance with the standards applicable to fmancial 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 N on-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.
The City was found to have administered each of its major federal awards programs in compliance in all material respects.
1-5
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 fmancial report (CAFR) for the fiscal
year ended September 30,2005. The Certificate of Achievement is a prestigious national award recognizing confonnance with
the highest standards for preparation of state and local government fmancial reports.
In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently
organized comprehensive annual financial 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 infonnation 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 financial affairs of the City in a responsible and progressive manner.
Respectfully submitted,
J;.t~
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, 2005
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
President
~/?~
Executive Director
1-7
City of Paris, Texas
City Organization Chart
mmb CITIZENS OF PARIS
I CITY COUNCIL
CITY ATTORNEY MUNICIPAL JUDGE
I
CITY MANAGER MUNICIPAL COURT
I I I T
POLICE CITY CLERK COMMUNITY
FIRE DEVELOPMENT AIRPORT LIBRARY
I 1
E.M.S. UTILITIES FINANCE
I
I
WATER WASTE WATER ACCOUNTING/ UTILITY BILLlNG/
TREATMENT TREATMENT LIFT STATIONS AUDITING COLLECTION PURCHASING
PUBLIC WORKS/ENGINEERING
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
Richard Manning - Mayor
Mary Ann Fisher - Mayor Pro-Tern
Curtis Fendley
Jessee FreeIen
Kevin Gray
Tim Ray
Don Wilson
Appointed Officials
Tony WiIIiams - City Manager
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
T om Hunt - Municipal Court Judge
Lisa Wright - Community Development Director
Priscilla McAnally - Librarian
1-9
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R. FRANK RAY, CPA
R. E. BOSTWICK, CPA
STEVEN W. MOHUNDRO, CPA
GEORGE H. STRUVE, CPA
ANDREW B. REICH, CPA
MCCLANAHAN AND HOLMES, LLP
CERTIFIED PUBLIC ACCOUNTANTS
Unqualified Opinions on Financial Statements
Accompanied by Required Supplementary Information
and Supplementary Information
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
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, 2006, 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 fmancial 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 financial
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, 2006, 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 January 4, 2007, 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 11 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.
~1L C/;w~~ltti/I ttrvwl/ltdttUt/ it. f
Certified Public Accountants
Paris, Texas
January 4, 2007
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 fmancial activities of the City of Paris for the fiscal year ended September 30, 2006. 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 Changes
In March 2004, the Paris City Council voted to terminate the manager who had served for over seventeen years. The Council
expressed a need for the City to be a leaner and more efficient operation. In November 2004, the Council selected its new city
manager who started December 1, 2004. The new manager immediately began to review the [mancial condition of the City.
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 number of full time city employees during this same period had risen from 242 in 1983 to 366 in 2004.
3. Between the years 2001 and 2004, the City expenses exceeded City revenues by $4,478,546.
4. 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.
5. The City would have been forced to borrow money for operational purposes had it not been utilizing a pooled cash
account which allowed it to continue to function in the short run despite the financial crisis that existed.
In mid-February 2005, the city manager gave a presentation to the Council and the public on the financial condition of the
City of Paris using the audited financial statements found in the 2003-04 Comprehensive Annual Financial Report. In that
presentation, the manager outlined his findings and proposals to improve the City's financial position. The city manager
utilized the information gleaned from numerous meetings with department heads and employees to develope a plan to reduce
city expenditures while at the same time updating user fee type revenues, which were typically too low in amount.
Of the strategies outlined by the manager, he was able to implement the following steps:
1. Reduce costs of solid waste collection, mowing and vegetation trimming, health department operations, and law
enforcement services at the public schools.
2 The City workforce was reduced by not filling vacancies, attrition, and transfers. Budgeted positions were reduced
to 305 positions paid from local funds. Only six people actually lost their jobs in the workforce reduction,
3. The City closed its 21 year old self insurance pool and joined the Texas Municipal League's Intergovernmental
Employees Benefit Pool. This strategic move effectively eliminated a major liability for the City in this area and
made future costs more predictable and manageable. At the time of its closure, the self insurance pool was over
$1,000,000 in the red.
4. Operating inefficiencies regarding lost and unaccounted for water were reduced. For example, new meters were
installed for Lamar County Water Supply System and Campbell Soup Company which are the City's two largest
water users. Also, a new water contract was signed with Lamar County Water Supply replacing the antiquated
contract signed in 1967. This has led to increased water revenue for the City of Paris.
5 A capital replacement fund was established.
6. A tax rate reduction of 10 cents per $100 valuation was implemented lowering the City's property tax rate to 59.225
cents per $100 valuation.
7. Under the new manager, city-wide revenues exceeded city-wide expenses by $5,401,135 for the two fiscal years
2005 and 2006.
The fmancial turnaround can also be easily seen by examining the cash position of the various funds located in the City's
pooled cash account. Since legally restricted bond proceeds, trust funds, and other special revenue funds are included in the
pooled account, those balances would have to be subtracted out of the pooled cash account to present a realistic picture of the
City's cash position. Any umestricted investments would have to be added to the account balance. Umestricted funds were
represented by a negative balance at the end of 2004 of approximately ($239,820), but dramatically improved in 2005 to
approximately $2,545,851 and to approximately $7,760,410 in 2006. While there remain those in the community who
question the reality of a financial crisis of the City in 2004, the numbers are indisputable.
3
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 $72,541,399 (net
assets), an increase of $3,423,047 or 4.95% over the previous year. Of the amount known as net assets, $18,442,342
(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
$10,976,111 compared to $11,440,304 the previous year. This amounts to a decrease of $464,193 or 4.06%. While
the overall combined ending fund balances for governmental funds decreased, the unreserved portion of those fund
balances was $9,859,994 or an increase of $3,404,487 (52.73%) over the previous year amount of $6,455,507.
Approximately 89.83% of this total amount or $9,859,994 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 $8,874,883 or 48.78% of total
general fund expenditures.
. The City of Paris' non-current liabilities decreased by $3,349,783 or 7.54% during the current fiscal year.
. Total charges for services for the City of Paris were $17,776,211 compared to $16,130,521 the previous year.
Operating/capital grants & contribution were $1,890,962 compared to $3,018,070 the previous year. General
revenues were $17,095,017 compared to $17,381,374 the previous year.
. Contribution income amounted to $627,205 and there was a gain of$32,600 on the sale of capital assets.
. $1,090,000 in transfers from business-type activities to governmental activities occurred during the year.
. Liabilities decreased $3,622,027 from $46,341,592 to $42,719,565 which was 7.82%.
. Expenses decreased $1,212,734 or 3.51 %.
. The ratio of net assets to expenses was 200.04% for the year 2004-05 and 217.59% for the year 2005-06.
Unrestricted net assets changed from $10,679,508 in 2004-05 to $15,901,209 in 2005-06 an increase of 49.17%.
. The ratio of city-wide debt service to total expenditures was 8.43% for the year 2004-05 and 6.97% for the year
2005-06.
. Net debt to assets, a measure of solvency, was 38.43% in 2004-05 and 35.60% in 2005-06.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Paris' financial statements. The City of
Paris' financial statements are comprised of three components: 1) government-wide financial statements, 2) fund fmancial
statements, and 3) notes to the financial statements. These reports also contain other supplementary infonnation in addition to
the [mancial 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 infonnation 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 government, 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
financial 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
control. Financial infonnation for this component unit is reported separately from the financial infonnation presented for the
primary government itself.
4
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.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the
government-wide [mancial statements. However, unlike the government-wide financial statements, governmental fund
financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable
resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term
financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to
compare the information presented for governmental funds with similar information presented for government activities in
the government-wide financial statements. By doing so, readers may better understand the long-term impact of the
government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement
of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between
governmental funds and governmental activities.
The City of Paris maintains nine 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 six 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 beginning at Statement 3.
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 [mancial 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 financial 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 [mancial statements. The notes to the financial statements can be found immediately after the Statement of Cash
Flows-Proprietary Funds in this report.
Combining and individual fund statements and schedules can be found immediately after the Notes to the Financial Statements in this report.
5
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 $72,541,399 at the close of the most recent fiscal year. This compares to
$69,118,352 for the previous year.
By far the largest portion of the City of Paris' net assets (72.41 %) 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.
Governmental Activities
2006 2005
Current and Other Assets
Capital Assets
Total Assets
$ 12,159,632
42,145,487
54,305,119
$ 13,061,472
40,100,818
53,162,290
Long-term Liabilities
Outstanding
Other Liabilities
Total Liabilities
13,857,860
643,196
14,501,056
14,596,398
990,619
15,587,017
Net Assets:
Invested in
Capital Assets,
Net of Related Debt
Restricted
Unrestricted
Total Net Assets
25,293,563
5,089,243
7,192,467
$ 37,575,273
28,935,168
1,249,886
9,619,009
$ 39,804,063
City of Paris' Net Assets
Business-Type Activities
2006 2005
$ 11,063,040
49,892,805
60,955,845
27,170,515
1,047,994
28,218,509
23,590,438
2,864,698
6,282,200
$ 32,737,336
$ 9,597,353
52,700,301
62,297,654
29,781,760
972,815
30,754,575
24,119,931
3,936,107
3,487,041
$ 31,543,079
Total
2006 2005
$ 23,222,672
92,038,292
115,260,964
41,028,375
1,691,190
42,719,565
52,525,606
4,114,584
15,901,209
$ 72,541,399
$ 22,658,825
92,801,119
115,459,944
44,378,158
1,963,434
46,341,592
49,413,494
9,025,350
10,679,508
$ 69,118,352
An additional portion of the City of Paris' net assets $4,114,584 (5.67%) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets $15,901,209 (21.92%) may be used to
meet the government's ongoing obligations to citizens and creditors.
There was a decrease of$4,910,766 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.
Governmental Activities
Governmental activities increased the City of Paris' net assets by $2,228,790 during the current fiscal year. This increase
resulted from decreases in the operating expenses of governmental activities and increasing charges for providing those
services. General revenues were up $68,986 or .41 %. This increase was due to sales taxes and investment earnings which
offset lower collections in other areas as shown below.
6
Increase
General Revenues 2005 2006' (Decrease)
Property Taxes $ 7,733,700 $ 7,583,269 $ (J 50,431)
Sales Taxes 5,066,926 5,401,371 334,445
Franchise Taxes 3,062,589 3,053,671 (8,918)
Hotel Occupancy Taxes 314,404 396,333 81,929
Unrestricted Investment Earnings 112,310 342,306 229,996
Contribution Income 305,455 (305,455)
Gain on Sale of Capital Assets 113,148 568 (112,580)
Total General Revenues $ 16,708,532 $ 16,777,518 $ 68,986
The following table provides a summary of the City's operations for the years ending 2005 and 2006 for both governmental
and business-type activities:
City of Paris' Changes in Net Assets
Governmental Activities Business- Type Activities Total
2005 2006 2005 2006 2005 2006
Revenues:
Program Revenues:
Charges for Services $ 3,969,670 $ 4,896,619 $ 12,160,851 $ 12,879,592 $ 16,130,521 $ 17,776,211
Operating Grants &
Contributions 2,823,843 1,660,785 2,823,843 1,660,785
Capital Grants &
Contributions 194,227 230,177 194,227 230,177
General Revenues:
Property Taxes 7,733,700 7,583,269 7,733,700 7,583,269
Sales Taxes 5,066,926 5,401,371 5,066,926 5,401,371
Franchise Taxes 3,062,589 3,053,671 3,062,589 3,053,671
Hotel Occupancy Taxes 314,404 396,333 314,404 396,333
Unrestricted
Investment Earnings 112,310 342,306 70,731 284,899 183,041 627,205
Other 418,603 568 602,111 32,600 1,020,714 33,168
Total Revenues 23,696,272 23,565,099 12,833,693 13,197,091 36,529,965 36,762,190
Expenses:
General Government 2,188,590 1,391,781 2,188,590 1,391,781
Finance 515,965 556,076 515,965 556,076
Public Safety 9,825,404 9,138,101 9,825,404 9,138,101
Public Works 6,957,522 6,826,116 6,957,522 6,826,116
Health 2,904,920 2,889,602 2,904,920 2,889,602
Library Service 718,779 745,653 718,779 745,653
Cox Field 258,496 264,181 258,496 264,181
Interest on
Long- Term Debt 627,691 614,799 627,691 614,799
Water & Sewer 10,554,510 10,912,834 10,554,510 10,912,834
Total Expenses 23,997,367 22,426,309 10,554,510 10,912,834 34,551,877 33,339,143
Increase in Net Assets
Before Transfers (301,095) 1,138,790 2,279,183 2,284,257 1,978,088 3,423,047
Transfers/Special Item 4,588,598 1,090,000 (4,588,598) (J ,090,000)
Increase in Net Assets 4,287,503 2,228,790 (2,309,415) 1,194,257 1,978,088 3,423,047
Net Assets 10-1-2005 33,287,770 37,575,273 33,852,494 31,543,079 67,140,264 69,118,352
Net Assets 9-30-2006 $ 37,575,273 $ 39,804,063 $ 31,543,079 $ 32,737,336 $ 69,118,352 $ 72,541,399
7
Business-Type Activities
Business-type activities increased the City of Paris' net assets by $1,194,257. This was mainly due to increased water sales
due to a hot summer season, a new water contract with the City's largest water consumer, and increased investment earnings.
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.
Total Assets
Total Liabilities
Fund Balances:
Reserved for:
Construction
Debt Service
Notes
Inventories
Unreserved:
General Fund
Special Revenue Funds
Permanent Funds
Total Fund Balances
Total Liabilities &
Fund Balances
Governmental Funds
2006 2005
$ 12,175,159
$ 13,236,716
$ 1,199,048
$ 1,796,412
189,736 4,036,886
751,574 725,394
55,882 69,474
118,925 153,043
8,874,883 5,375,749
908,559 1,006,385
76,552 73,373
10,976,111 11,440,304
$ 12,175,159 $ 13,236,716
As of the end of the current fiscal year, the City of Paris' governmental funds reported combined ending fund balances of
$10,976,111. Approximately 89.83% of this total amount ($9,859,994) 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 ($189,736), 2) pay debt service
($751,574), and 3) outstanding notes ($55,882).
8
Governmental Funds
Revenues, "Expenditures, &
Changes in fund Balances
2006 2005
Revenues $ 23,663,297 $ 23,427,213
Expenditures 25,183,372 25,394,527
Excess (Deficiency) of Revenues
Over (Under) Expenditures (1,520,075) (1,967,314)
Total Other Financing Sources (Uses) 1,090,000 1,030,589
Net Change in Fund Balances (430,075) (936,725)
Increase (Decrease) in Inventory (34,118) (3,091)
Fund Balances. October 1 11,440,304 12,380,120
Fund Balances - September 30 $ 10,976,111 $ 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 $8,874,883 ($5,375,749 the previous year), while total fund balance reached $8,993,808 ($5,528,792
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 48.78% of total general fund
expenditures, while total fund balance represents 49.43% of that same amount. The increase in the fund balance of the
general fund was due to excess of revenues over expenditures and transfers into the general fund.
Debt Service Fund
The debt service fund has a total fund balance of $751,574 ($725,394 the previous year), all of which is reserved for the
payment of debt service. The net increase in fund balance during the current year in the debt service fund was $26,180 (a
$362,002 decrease the previous year). The increase was due to excess revenues over expenses for the year. The government
enacted a dedicated property tax for debt service at the beginning of the current fiscal year. This tax produced revenues of
$1,353,600 in the current fiscal year ($1,214,264 the previous year).
Proprietary Fund
The City ofparis' 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 $7,975,432 ($5,625,512 the previous
year). This change was due to increased revenue and decreased expenditures compared to the previous year. Other factors
concerning the [mances 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 $1,222,563
($285,541 the previous year).
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, 2006,
amounts to $92,038,292 ($92,801,119 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.
9
City of Paris - Net Capital Assets
Governmental Activities Business- Type Activities Total
2006 2005 2006 2005 2006 2005
Land $ 5,903,022 $ 5,903,022 $ 282,672 $ 282,672 $ 6,185,694 $ 6,185,694
Buildings and System 12,456,556 7,397,886 47,855,707 50,034,894 60,312,263 57,432,780
Improvements Other
than Buildings 2,404,908 2,528,845 2,404,908 2,528,845
Machinery, Furniture,
and Equipment 2,911,873 2,982,286 170,250 213,590 3,082,123 3,195,876
Infrastructure 18,261,789 17,528,113 18,261,789 17,528,113
Construction in Progress 6,979 3,549,809 39,577 503,504 46,556 4,053,313
Water Rights - Net 833,463 847,126 833,463 847,126
Unamoritized Bond Expense 200,360 210,857 711,136 818,515 911,496 1,029,372
Total $42,145,487 $40,100,818 $ 49,892,805 $ 52,700,301 $ 92,038,292 $92,801,119
Additional information on the City of Paris' capital assets can be found in note IV. C. of the Notes to the Financial
Statements.
Long-term Debt
At the end of the current fiscal year, the City of Paris had total bonded debt outstanding of $39,505,000. Of this amount,
$13,054,000 comprises debt backed by the full faith and credit of the government, and $26,451,000 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
2006 2005 2006 2005 2006 2005
General
Obligation Bonds $ 13,054,000 $13,776,800 $ $ $13,054,000 $13,776,800
Revenue Bonds 26,451,000 29,053,200 26,451,000 29,053,200
Total $ 13,054,000 $13,776,800 $26,451,000 $ 29,053,200 $39,505,000 $42,830,000
The City of Paris' bond debt decreased by $3,325,000 (7.76%) during the fiscal year. The City of Paris maintains an
underlying bond rating from Moody's of A2 with that rating being up graded to A3 when the issues are insured..
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
2005-06 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.
10
Economic Factors and Next Year's Budgets and Rates
· Sales tax revenues are projected for 9.5% growth.
· Inflation was 2.1 % for the year ended September 30, 2006.
· New construction amounted to 46 residential units and 23 commercial units.
· Local population growth is expected to be minimal.
· The tax rate is expected to be at .59225, a decrease of 10 cents per $100 of value.
All of these factors were considered in preparing the City of Paris' budget for 2006-07.
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 finances. 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.
11
City of Paris, Texas
Statement of Net Assets
September 30, 2006
Statement 1
Component
Primary Government Unit
Governmental Business- Type Economic
Activities Activities Total Development
ASSETS
Cash and Cash Equivalents $ 6,752,432 $ 6,057,240 $ 12,809,672 $ 1,278,590
Investments 2,618,803 2,942,209 5,561,012 483,332
Receivables (Net of Allowance
for Uncollectib1es) 2,109,926 1,900,942 4,010,868 196,633
Inventories 118,925 258,814 377,739
Due from Other Governments 407,499 407,499
Internal Balances 96,165 (96,165)
Notes Receivable 55,882 55,882 4,259,090
Capital Assets (Net of
Accumulated Depreciation):
Land 5,903,022 282,672 6,185,694 1,275,215
Buildings and System 12,456,556 47,855,707 60,312,263
Improvements Other Than
Buildings 2,404,908 2,404,908
Machinery and Equipment 2,911,873 170,250 3,082,123
Infrastructure 18,261,789 18,261,789
Construction in Progress 6,979 39,577 46,556
Water Rights (Net of
Accumulated Amortization) 833,463 833,463
Unamortized Bond Expense 200,360 711,136 911,496
Total Assets 54,305,119 60,955,845 115,260,964 7,492,860
The accompanying notes to the financial statements are an integral part of this statement.
12
City of Paris, Texas
Statement of Net Assets
September 30,2006
Statement 1
( Continued)
Component
Primary Government Unit
Governmental Business- Type Economic
Activities Activities Total Development
LIABILITIES
Accounts Payable and
Other Current Liabilities 99,550 662,703 762,253
Accrued Interest 176,142 385,291 561,433 17,286
Deferred Revenue 367,504 367,504
Noncurrent Liabilities:
Due Within One Year 976,153 2,758,202 3,734,355 586,322
Due in More Than One Year 12,881,707 24,412,313 37,294,020 3,592,890
Total Liabilities 14,501,056 28,218,509 42,719,565 4,196,498
NET ASSETS
Invested in Capital Assets,
Net of Related Debt 28,935,168 23,590,438 52,525,606
Restricted for:
Construction 189,736 1,469,388 1,659,124
Debt Service 927,716 1,395,310 2,323,026 287,739
Notes Receivables 55,882 55,882
Permanent Library Funds
Nonexpendable 76,552 76,552
Unrestricted 9,619,009 6,282,200 15,901,209 3,008,623
Total Net Assets $ 39,804,063 $ 32,737,336 $ 72,541,399 $ 3,296,362
13
City of Paris, Texas
Statement of Activities
F or the Year Ended September 30, 2006
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Primary Government:
Governmental Activities:
General Government $ 1,391,781 $ 167,032 $ $
Finance 556,076
Public Safety 9,138,101 698,497 767,223 61,621
Public Works 6,826,116 1,609,895 173,413 168,556
Health 2,889,602 2,389,663 569,103
Library Service 745,653 31,532 45,843
Cox Field 264,181 94,326
Interest on Long-Term Debt 614,799 10,877
Total Governmental Activities 22,426,309 4,896,619 1,660,785 230,177
Business- Type Activities:
Water and Sewer 10,912,834 12,879,592
Total Business- Type Activities 10,912,834 12,879,592
Total Primary Government $ 33,339,143 $ 17,776,211 $ 1,660,785 $ 230,177
Component Unit:
Economic Development $ 632,743 $ $ $
General Revenues:
Property Taxes
Sales Taxes
Franchise Taxes
Hotel Occupancy Tax
Unrestricted Investment Earnings
Contribution Income
Gain on Sale of Capital Assets
Transfers
Total General Revenues and Transfers
Change in Net Assets
Net Assets - Beginning, October 1,2005
Net Assets - Ending, September 30,2006
The accompanying notes to the fmancial statements are an integral part of this statement.
14
Statement 2
Net (Expense) Revenue and Changes in Net Assets
Primary Government Component Unit
Governmental Business- Type Economic
Activities Activities Total Development
$ (1,224,749) $ $ (1,224,749) $
(556,076) (556,076)
(7,610,760) (7,610,760)
(4,874,252) (4,874,252)
69,164 69,164
( 668,278) (668,278)
(169,855) (169,855)
(603,922) ( 603,922)
(15,638,728) (15,638,728)
1,966,758
1,966,758
1,966,758
1,966,758
(15,638,728)
1,966,758
(13,671,970)
(632,743)
7,583,269 7,583,269
5,401,371 5,401,371 1,080,270
3,053,671 3,053,671
396,333 396,333
342,306 284,899 627,205 269,673
32,600 32,600
568 568
1,090,000 (1,090,000)
17,867,518 (772,501 ) 17,095,017 1,349,943
2,228,790 1,194,257 3,423,047 717,200
37,575,273 31,543,079 69,118,352 2,579,162
$ 39,804,063 $ 32,737,336 $ 72,541,399 $ 3,296,362
15
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City of Paris
Balance Sheet - Governmental Funds
September 30, 2006
Statement 3
Other Total
Debt Capital Governmental Governmental
General Service Projects Funds Funds
ASSETS
Cash and Cash Equivalents $ 5,167,581 $ 746,573 $ 159,120 $ 679,158 $ 6,752,432
Investments 2,618,803 2,618,803
Receivables (Net of
Allowance for
Uncollectibles) 2,004,732 60,179 45,015 2,109,926
Notes Receivable 55,882 55,882
Due from Other Funds 111,692 111,692
Inventories 118,925 118,925
Due from Other
Governments 79,313 30,616 297,570 407,499
Total Assets $ 10,101,046 $ 806,752 $ 189,736 $ 1,077,625 $ 12,175,159
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts Payable $ 78,445 $ $ $ 21,105 $ 99,550
Due to Other Funds 15,527 15,527
Deferred Revenue 1,028,793 55,178 1,083,971
Total Liabilities 1,107,238 55,178 36,632 1,199,048
Fund Balances:
Reserved for:
Construction 189,736 189,736
Debt Service 751,574 751,574
Notes 55,882 55,882
Inventories 118,925 118,925
Unreserved, Reported in:
General Fund 8,874,883 8,874,883
Special Revenue Funds 908,559 908,559
Permanent Funds 76,552 76,552
Total Fund Balances 8,993,808 751,574 189,736 1,040,993 10,976,111
Total Liabilities and
Fund Balances $ 10,101,046 $ 806,752 $ 189,736 $ 1,077,625
Amount reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not fmancial resources and, therefore,
are not reported in the funds. (Net of Accumulated Depreciation)
Other long-term 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
41,945,127
716,467
(13,833,642)
$ 39,804,063
The accompanying notes to the financial statements are an integral part of this statement.
16
City of Paris, Texas
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds
For the Year Ended September 30, 2006
Statement 4
Other Total
Debt Capital . Governmental Governmental
General Service Projects Funds Funds
Revenues:
Taxes:
Property $ 6,230,185 $ 1,353,600 $ $ $ 7,583,785
Sales 5,401,371 5,401,371
Hotel Occupancy 396,333 396,333
Franchise 3,053,671 3,053,671
Licenses and Permits 87,137 87,137
Fines and Fees 543,606 543,606
Investment Earnings 431,003 10,877 38,418 12,936 493,234
Public Safety 212,729 212,729
Sanitation 1,287,138 1,287,138
Health 2,286,646 203,315 2,489,961
Intergovernmental 668,577 168,556 1,029,965 1,867,098
Miscellaneous 215,844 31,390 247,234
Total Revenues 20,601,511 1,364,477 206,974 1,490,335 23,663,297
Expenditures:
Current:
General Government 1,210,298 1,210,298
Finance 549,079 549,079
Public Safety 8,096,358 557,231 8,653,589
Public Works 5,069,412 124,100 5,193,512
Health 1,890,825 822,734 2,713,559
Library Service 601,904 19,423 621,327
Cox Field 143,620 143,620
Miscellaneous 60,011 60,011
Debt Service:
Principal 142,158 722,800 864,958
Interest 7,276 615,497 622,773
Capital Outlay:
General Government 73,960 73,960
Public Safety 157,152 2,923,492 12,496 3,093,140
Public Works 160,598 (1,950) 158,648
Highways and Streets 1,121,212 1,121,212
Health 96,707 96,707
Cox Field 6,979 6,979
Total Expenditures 18,192,377 1,338,297 4,116,714 1,535,984 25,183,372
Excess (Deficiency) of
Revenues Over
(Under) Expenditures 2,409,134 26,180 (3,909,740) (45,649) (l,520,075)
The accompanying notes to the [mancial statements are an integral part of this statement.
17
City of Paris, Texas Statement 4
Statement of Revenues, Expenditures and Changes in Fund Balances- ( Continued)
Governmental Funds
f or the Year Ended September 30, 2006
Other Total
Debt Capital Governmental Governmental
General Service Projects Funds Funds
Other Financing Sources (Uses):
Transfers In 1,090,000 62,590 1,152,590
Transfers Out ( 62,590) ( 62,590)
Total Other Financing
Sources (Uses) 1,090,000 62,590 ( 62,590) 1,090,000
Net Changes
in Fund Balances 3,499,134 26,180 (3,847,150) (108,239) ( 430,075)
Fund Balances -
September 30, 2005 5,528,792 725,394 4,036,886 1,149,232 11,440,304
Increase (Decrease)
in Inventory (34,118) (34,118)
Fund Balances -
September 30, 2006 $ 8,993,808 $ 751,574 $ 189,736 . $ 1,040,993 $ 10,976,111
18
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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, 2006
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). $ (430,075)
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. 2,055,166
Revenues in the statement of activities that do not provide current fmancial resources
are not reported as revenues in the funds. (98,198)
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. 7,974
The net change in inventory is a direct adjustment to fund balance in the funds. (34,118)
Some expenses reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental funds. (126,420)
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. 854,461
Change in net assets of governmental activities (Statement 2). $ 2,228,790
The accompanying notes to the fmancial statements are an integral part of this statement.
19
City of Paris, Texas
Statement of Revenues, Expenditures and Changes in Fund Balance-
Budget and Actual
General Fund
Fiscal Year Ended September 30,2006
Statement 6
Budgeted Amounts Variance with
Final Budget-
Positive
Original Final Actual (N egative)
Revenues:
Ad Valorem Taxes $ 6,193,225 $ 6,193,225 $ 6,230,185 $ 36,960
Municipal Sales Tax 4,850,000 4,850,000 5,401,371 551,371
Hotel Occupancy Tax 300,000 300,000 396,333 96,333
Franchise and Gross
Receipts Tax 2,599,300 2,599,300 3,053,671 454,371
Licenses and Permits 72,870 72,870 87,137 14,267
Fines and Fees 612,195 612,195 543,606 (68,589)
Use of Money and Property 136,960 136,960 431,003 294,043
Santitation 1,334,000 1,334,000 1,287,138 (46,862)
Emergency Medical Service 1,983,200 1,983,200 2,286,646 303,446
Intergovernmental Revenues 643,855 643,855 668,577 24,722
Miscellaneous Revenues 126,650 126,650 215,844 89,194
Total Revenues 18,852,255 18,852,255 20,601,511 1,749,256
General Government:
Council 488,150 488,150 467,254 20,896
Manager 156,047 156,047 149,934 6,113
Attorney 367,644 367,644 291,024 76,620
Municipal Court 194,459 194,459 191,215 3,244
Clerk 116,619 116,619 110,871 5,748
Total General Government 1,322,919 1,322,919 1,210,298 112,621
Finance:
Accounting and Auditing 566,384 566,384 549,079 17,305
Public Safety:
Police 5,534,925 5,534,925 5,230,279 304,646
Fire 3,185,514 3,185,514 3,023,231 162,283
Total Public Safety 8,720,439 8,720,439 8,253,510 466,929
Public Works:
Community Development 620,097 620,097 596,671 23,426
Engineering 438,901 438,901 421,154 17,747
Public Works 127,374 127,374 129,930 (2,556)
Parks and Recreation 1,044,122 1,044,122 1,036,908 7,214
Solid Waste 1,392,436 1,392,436 1,223,220 169,216
Streets and Highways 1,419,075 1,419,075 1,272,912 146,163
Traffic and Public Lighting 424,170 424,170 477,307 (53,137)
Garage 228,473 228,473 214,121 14,352
Total Public Works 5,694,648 5,694,648 5,372,223 322,425
The accompanying notes to the fmancial statements are an intregal part of this statement.
20
City of Paris, Texas
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual
General Fund
Fiscal Year Ended September 30, 2006
Statement 6
( Continued)
Budgeted Amounts Variance with
Final Budget-
Positive
Original Final Actual (Negative)
Expenditures: (Continued)
Emergency Medical Service 1,967,083 1,967,083 1,987,532 (20,449)
Library Services 601,777 601,777 601,904 (127)
Cox Field Airport 239,858 239,858 157,820 82,038
Paris Band 20,850 20,850 18,647 2,203
Contingency 280,982 280,982 41,364 239,618
Total Expenditures 19,414,940 19,414,940 18,192,377 1,222,563
Excess of Revenues Over
(Under) Expenditures (562,685) (562,685) 2,409,134 2,971,819
Other Financing Sources
and (Uses):
Transfers In 1,090,000 1,090,000 1,090,000
Total Other Financing
Sourcing and (Uses) 1,090,000 1,090,000 1,090,000
Net Changes in Fund Balance 527,315 527,315 3,499,134 2,971,819
Fund Balance -
September 30, 2005 5,528,792 5,528,792 5,528,792
Decrease in Inventory (34,118) (34,118)
Fund Balance -
September 30, 2006 $ 6,056,107 $ 6,056,107 $ 8,993,808 $ 2,937,701
21
City ofparis, Texas
Statement of Net Assets
Proprietary Funds
For the Year Ended September 30, 2006
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
$
1,487,008
4,570,232
1,878,147
22,795
258,814
8,216,996
$
1,426,204
5,527,402
2,027,923
7,991
236,725
9,226,245
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
2,942,209 2,214,026
833,463 847,126
711,136 818,515
282,672 282,672
31,740,002 31,740,002
36,210,888 35,918,612
20,649,492 20,388,044
1,955,986 1,933,486
244,222 244,222
39,577 503,504
(42,774,633) (39,975,882)
48,348,206 51,034,660
52,835,014 54,914,327
61,052,010 64,140,572
Total Assets
The accompanying notes to the fmancial statements are an intregal part of this statement.
22
City of Paris, Texas
Statement of Net Assets
Proprietary Funds
For the Year Ended September 30, 2006.
Statement 7
(Continued)
Water and Sewer
Enterprise Fund
Current Year
Water and Sewer
Enterprise Fund
Prior Year
LIABILITIES
Current Liabilities:
Accounts Payable 15,852 31,924
Payable to U.S.A. for Water Rights - Current Portion 30,702 29,768
Interest Payable 385,291 416,515
Accrued Compensated Absences - Current Portion 9,900 14,792
Due to Other Funds 96,165 1,842,918
Revenue Bonds - Current Portion 2,717,600 2,602,200
Total Current Liabilities 3,255,510 4,938,117
Non-Current Liabilities:
Revenue Bonds Payable - Long-Term Portion 23,733,400 26,451,000
Payable to U.S.A. for Water Rights - Long-Term Portion 578,917 609,620
Customer Deposits 646,851 524,376
Accrued Compensated Absences Long-Term Portion 99,996 74,380
Total Non-Current Liabilities 25,059,164 27,659,376
Total Liabilities 28,314,674 32,597,493
NET ASSETS
Invested in Capital Assets, Net of Related Debt 21,897,206 21,981,460
Restricted for Debt Service 1,395,310 2,005,374
Restricted for Construction 1,469,388 1,930,733
Umestricted 7,975,432 5,625,512
Total Net Asssets $ 32,737,336 $ 31,543,079
23
City of Paris, Texas
Statement of Revenues, Expenses and Changes in Fund Net Assets
Proprietary Funds
F or the Year Ended September 30, 2006 ,
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 $ 7,539,449 $ 7,069,193
Sewer Charges and Taps 4,886,837 4,670,660
Sanitation Billing Fees 69,006 69,700
Service Charges 60,830 55,759
Industrial Surcharges 133,474 161,330
Miscellaneous 189,996 134,209
Total Operating Revenues 12,879,592 12,160,851
Operating Expenses:
Personnel 2,796,134 2,889,098
Supplies 838,846 746,722
Contractual 2,171,488 1,642,986
Maintenance 415,661 273,718
Sundry Charges 330,274 237,839
Other 113,429 132,997
Depreciaton 2,798,751 3,050,824
Total Operating Expenses 9,464,583 8,974,184
Operating Income 3,415,009 3,186,667
Non-operating Income (Expense):
Investment Earnings 284,899 70,730
Contribution Income 32,600 602, III
Interest Expense. Revenue Bonds (1,322,300) (1,399,554)
Amortization of Bond Issue Expense (107,378) (112,930)
Bank Charges (4,910) ( 6,828)
Loss on Abandonment of Assets (47,351 )
Amortization of Water Rights (13,663) (13,663)
Net Non-operating Income (Expense) (1,130,752) (907,485)
Income (Loss) Before Operating Transfers 2,284,257 2,279,182
Transfers In 434,445
Transfers Out (1,090,000) (5,023,042)
Changes in Net Assets 1,194,257 (2,309,415)
Total Net Assets - Beginning 31,543,079 33,852,494 .
Total Net Assets - Ending $ 32,737,336 $ 31,543,079
The accompanying notes to the [mancial statements are an integral part of this statement.
24
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City of Paris, Texas
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2006 .
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 $ 13,151,843 $ 11,843,670
Payments to Suppliers (1,720,299) (1,379,851)
Payments to Employees (2,775,410) (2,815,416)
Payments to Contractors (2,187,560) (1,755,758)
Receipts (Payments) for Interfund Payables (1,746,753) (554,692)
Net Cash Provided by Operating Activities 4,721,821 5,337,953
Cash Flows from Noncapital Financing Activities
Transfers In 434,445
Transfers Out (1,090,000) (1,351,885)
Net Cash Used by Noncapital Financing Activities (1,090,000) (917,440)
Cash Flows from Capital and Related Financing Activities
Purchase of Fixed Assets (79,697) (648,334)
Principal Paid on Revenue Bonds (2,602,200) (2,204,200)
Principal Paid on Water Rights (29,769) (28,863)
Principal Paid on Capital Leases ( 6,459)
Interest Paid on Revenue Bonds (1,353,523) (1,476,800)
Agent Fees Paid on Revenue Bonds (4,910) ( 6,828)
Net Cash Used by Capital and Related Financing Activities (4,070,099) (4,371,484)
Cash Flows from Investing Activities
Interest on Investments 307,269 184,359
Purchase of Investment Securities (1,418,084) (1,410,000)
Maturities of Investments 652,727 2,944,879
Net Cash Provided by (Used By) Investing Activities (458,088) 1,719,238
Net Increase (Decrease) in Cash and Cash Equivalents (896,366) 1,768,267
Cash and Cash Equivalents - Beginning 6,953,606 5,185,339
Cash and Cash Equivalents - Ending $ 6,057,240 $ 6,953,606
The accompanying notes to the fmancial statements are an integral part of this statement.
25
City of Paris, Texas
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2006.
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) $ 3,415,009 $ 3,186,667
Adjustments to Reconcile Operating Income to Net Cash
Provided by (Used by) Operating Activities:
Depreciation 2,798,751 3,050,824
Decrease (Increase) in Accounts Receivable 149,776 (238,573)
(Increase) Decrease in Inventory (22,089) 11,425
Increase in Customers' Deposits 122,475 78,816
(Decrease) in Due to Other Funds (1,746,753) ( 554,692)
Increase in Accrued Compensated Absences 20,724 73,682
(Decrease) in Accounts Payable (16,072) (270,196)
Total Adjustments 1,306,812 2,151,286
Net Cash Provided by (Used by) Operating Activities $ 4,721,821 $ 5,337,953
Noncash Investing, Capital, and Financing Activities:
Decrease in Market Value of Investments $ (37,212) $ (106,696)
Capital Contributions 32,600 602,111
General Long-Term Debt Transferred to
Water and Sewer Fund 3,637,400
26
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City of Paris, Texas
Notes to Financial Statements
September 30, 2006
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 (PEDC) 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. The auditor's report for the year ended September 30, 2006
contains a qualification due to lack of conformity with generally accepted accounting principles in
regard to a note receivable valuation allowance. 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 fmancial 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 I) 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 financial 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.
27
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
I. Summary of Significant Accounting Policies (Continued)
C, Measurement Focus, Basis of Accounting and Basis of Presentation (Continued)
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 finance-related legal and contractual provisions. The minimum number of funds is
maintained consistent with legal and managerial requirements.
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 [mancial
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 financed
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.
28
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
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 financed 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-tenn
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 defined 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.
29
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
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
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.
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 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
30
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
1. 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 business-type activities during the current fiscal year was $1,322,300. Of this
amount, none 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 fmancial
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.
31
City of Paris, Texas
Notes to Financial Statements
September 30,2006
I. 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 financing 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 $13,833,642 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
$ 13,054,000
(200,360)
176,142
103,798
\ 41,897
658,165
$ 13,833,642
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
32
City of Paris, Texas
Notes to Financial Statements
September 30,2006
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)
allocated over their estimated useful lives and reported as depreciation expense." The details of
this $2,055,166 difference are as follows:
Capital outlay
Depreciation expense
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net assets
of governmental activities
$ 4,550,646
(2,495,480)
$ 2,055,166
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 financial 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 of this
$854,461 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
$ (10,497)
864,958
$ 854,461
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.
33
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
III. Stewardship, Compliance and Accountability (Continued)
A. Budgetary Information (Continued)
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, 2006, 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, 2006, expenditures exceeded appropriations in the Public
Works, Emergency Medical Services, Traffic and Public Lighting, and Library.
These over expenditures were funded by available fund balance and other fmancing sources.
IV. Detailed Notes on All Funds and Component Unit
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.
34
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
IV. Detailed Notes on All Funds and Component Unit (Continued)
A. Deposits and Investments (Continued)
As of September 30, 2006, the City and Component Unit had the following investments:
Credit Weighted Average
Type of Security Fair Value Rating Maturity (Years)
Primary Government
Mortgage Backed Securities:
Government National Mortgage Corporation $ 55,115 N/A 2.79
Federal Home Loan Mortgage Corporation 1,609,592 N/A 3.04
Federal National Mortgage Association 2,127,525 N/A 4.46
Notes:
Federal Home Loan Mortgage Corporation 1,271,435 AAA 0.19
Federal National Mortgage Association 497,345 AAA 0.25
Totals $ 5,561,012 2.68
Component Unit - PEDC
Certificates of Deposit $ 483,332 N/A 0.29
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.
Credit Risk is the risk that an issuer or other counter-party will not fulfill its obligations, Investing
is perfonned in accordance with the City's investment policy adopted by the City Council
complying with State law and the City Charter. City funds may be invested in securities
authorized by Chapter 2256 of the State of Texas Government Code.
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 financial
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, 2006, 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 $178,987 of the PEDC bank balance of$854,787 was uninsured.
Custodial Credit Risk - Investments. For an investment, this is the risk that in the event of the
failure of the counter-party, the City 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, 2006, the
City did not have custodial credit risk exposure.
35
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
IV. Detailed Notes on All Funds and Component Unit (Continued)
C. Capital Assets (Continued)
Balance Balance
September 30, September 30,
2005 Increases Decreases 2006
Business-type Activities
Capital Assets, Not Being Depreciated:
Land $ 282,672 $ $ $ 282,672
Construction in Process 503,504 39,577 503,504 39,577
Total Capital Assets,
Not Being Depreciated 786,176 39,577 503,504 322,249
Capital Assets, Being Depreciated:
Plant, Pumps, and Motors 31,740,002 31,740,002 ) I
Distribution System 35,918,612 292,276 36,210,888
Collection System 20,388,044 261,448 20,649,492 I :
Maintenance, Equipment and Vehicles 1,933,486 22,500 1,955,986
Furniture and Equipment 244,222 244,222 I .
Total Capital Assets, I I
Being Depreciated 90,224,366 576,224 90,800,590
: I
Less Accumulated Depreciation for:
Plants, Pumps, and Motors 16,896,394 1,004,901 17,901,295
Distribution System 12,092,914 1,056,806 13,149,720 I
Collection System 9,022,456 671,204 9,693,660
Maintenance Equipment and Vehicles 1,721,280 64,455 1,785,735
Furniture and Equipment 242,838 1,385 244,223
Total Accumulated Depreciation 39,975,882 2,798,751 42,774,633
Total Capital Assets,
Being Depreciated, Net 50,248,484 (2,222,527) 48,025,957
Business-type Activities,
Capital Assets, Net $ 51,034,660 $ (2,182,950) $ 503,504 $ 48,348,206
Component Unit
Capital Assets, Not Being Depreciated:
Land Development Costs $ 1,244,751 $ 30,464 $ $ 1,275,215
38
City ofparis, Texas
Notes to Financial Statements
September 30,2006
IV. Detailed Notes on All Funds and Component Unit (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 Works, Including Depreciation of General Infrastructure Assets
Emergency Medical Service
Cox Field
Library
Total Depreciation Expense - Governmental Activities
$ 76,857
6,997
358,092
1,632,604
176,043
120,561
124,326
$ 2,495,480
Business-type Activities:
Water and Sewer - Total Depreciation Expense - Business-type Activities
$ 2,798,751
D, Construction Commitments
The City has active construction projects as of September 30, 2006. At year-end the City's
commitments with contractors are as follows:
Project
Waste Water Improvements
To Date
Commitment
$ 48,191
$
E. Interfund Receivables, Payables, and Transfers
Interfund balances at year-end consisted of the following individual fund receivables and payables:
Fund
General Fund (Pooled Cash Account Receivable)
Special Revenue Fund - Health Department -
Indirect Cost
Water and Sewer Fund (Payable is overdraft in
Pooled Cash Account)
Receivable
$ 111,692
15,527
$ 111,692
96,165
$ 111,692
39
City of Paris, Texas
Notes to Financial Statements
September 30,2006
IV. Detailed Notes on All Funds and Component Unit (Continued)
E. Interfund Receivables, Payables, and Transfers (Continued)
Interfund Transfers:
Transfers In
General Capital
Fund Projects
Transfers Out:
Other Governmental Funds
Water and Sewer Fund
$ $
1,090,000
62,590
$ 1,090,000 $ 62,590
During the year ended September 30, 2006, the City made a budgeted transfer from Water and
Sewer Fund to General Fund for $1,090,000 and a miscellaneous transfer from Other
Governmental Funds to Capital Projects Fund for $ 62,590.
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
Assets:
Machinery and Equipment
Less: Accumulated Depreciation
Total
$ 412,801
(324,769)
$ 88,032
40
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
IV. Detailed Notes on All Funds and Component Unit (Continued)
F. Capital Leases (Continued)
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, 2006:
September 30,
2007
2008
2009
Total Minimum Lease Payments
Amount Representing Interest
Present Value ofFuture
Minimum Lease Payments
Obligation
$ 68,590
27,290
10,917
1 06,797
(2,999)
$ 103,798
G. Long-Term Debt
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 $235,000 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 $220,000 to $460,000 with fmal 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 fma1 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,
2006, the fund balances in the Interest and Sinking Funds are $751,574. Revenues from the
Waterworks and Sewer System are also pledged to secure the Certificates of Obligation.
41
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
IV. Detailed Notes on All Funds and Component Unit (Continued)
G. Long-Term Debt (Continued)
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 $245,000 to $420,000 with final 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 $670,000 to $850,000 with final payment due December 15, 2011.
Interest is payable semi- annually at rates ranging from 4.4% to 4.95%.
$5,810,000 Tax and Revenue Refunding Bonds, Series 1998, due in annual installments varying
from $560,000 to $715,000 with final payment due December 15, 2011. Interest is payable semi-
annually at rates ranging from 4.4% to 4.95%.
$9,500,000 Waterworks and Sewer System Revenue Bonds, Series 2000, due in annual
installments varying from $400,000 to $835,000 with final payment due June 15,2020. Interest is
payable semi-annually at rates ranging from 5.375% to 6.875%.
$5,130,000 Tax and Revenue Refunding Bonds, Series 2001, due in annual installments varying
from $500,000 to $605,000 with final payment due December 15,2011. Interest is payable semi-
annually at rates ranging from 3.50% 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 9f 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, 2006, the asset
balances in the Interest and Sinking Funds, Reserve Fund, and Contingency Fund are $1,993,586,
$1,849,819, and $645,234, 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.
42
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
IV. Detailed Notes on All Funds and Component Unit (Continued)
G. Long-Term Debt (Continued)
General:
Certificates of Obligation were originally issued for construction or improvements in various areas
including streets, buildings, parks, and airport. Water and Sewer Revenue Bonds were originally
issued for extending and improving the waterworks and sewer systems. Federal arbitrage
regulations apply to bonds and certificates of obligation issued by the City.
Long-term debt service requirements for the next five years and after in five year increments
are as follows:
Year Ending
September 30,
2007
2008
2009
2010
2011
2012-2016
2017-2021
2022-2026
General Obligation
Principal Interest
$ 764,982 $ 585,194
799,961 551,767
832,560 516,098
872,578 478,752
910,016 440,720
3,680,200 1,527,105
4,775,600 601,453
460,000 10,810
$ 13,095,897
$ 4,711,899
Water and Sewer
Principal Interest
$ 2,717,600 $ 1,233,751
2,843,000 1,106,797
2,975,800 973,076
3,116,200 832,401
3,259,200 680,904
8,464,200 1,806,777
3,075,000 435,340
$ 26,451,000
$ 7,069,046
A summary oflong-term liability transactions for the year ended September 30, 2006, follows:
43
City of Paris, Texas
Notes to Financial Statements
September 30,2006
IV. Detailed Notes on All Funds and Component Unit (Continued)
G. Long-Term Debt (Continued)
Balance Balance
September 30, September 30, Due Within
2005 Additions Reductions 2006 One year
Governmental Activities
Certificates of Obligation $ 13,776,800 $ $ 722,800 $ 13,054,000 $ 757,400
Note 49,119 7,222 41,897 7,582
Capital Leases 238,734 134,936 103,798 66,371
Compensated Absences 531,745 244,225 117,805 658,165 144,800
Governmental Activities
Long-Term Liabilities $ 14,596,398 $ 244,225 $ 982,763 $ 13,857,860 $ 976,153
Business- Type Activities
Revenue Bonds $ 29,053,200 $ $ 2,602,200 $ 26,451,000 $ 2,717,600
Water Rights Debt 639,388 29,769 609,619 30,702
Compensated Absences 89,172 28,4 71 7,747 109,896 9,900
Business-type Activities
Long - T erm Liabilities $ 29,781,760 $ 28,471 $ 2,639,716 $ 27,170,515 $ 2,758,202
Component Unit
Bonds Payable $ 3,295,000 $ $ 165,000 $ 3,130,000 $ 180,000
Note Payable 573,083 201,723 371,360 209,299
Note Payable 865,384 187,532 677,852 197,023
Component Unit-
Long-Term Liabilities $ 4,733,467 $ $ 554,255 $ 4,179,212 $ 586,322
For the governmental activities, compensated absences are liquidated by the general fund.
PEDC 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, 2006, was $371,360. 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, 2006, was $677,852. 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 $180,000 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.
44
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
IV, Detailed Notes on All Funds and Component Unit (Continued)
G. Long-Term Debt (Continued)
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, 2006, the balances in the
Debt Service Fund and Reserve Fund are $56,218 and $428,807, respectively.
Debt Service requirements related to these bonds and notes are as follows:
Year Ending
September 30,
2007
2008
2009
2010
2011
2012-2016
2017-2018
Bond Debt Requirements
Principal Interest
$ 180,000 $ 207,436
190,000 193,486
200,000 178,761
215,000 166,261
230,000 152,716
1,410,000 520,261
705,000 70,888
Note Payable
Principal Interest
$ 209,299 $ 10,340
162,061 2,549
Note Payable
Principal Interest
$ 197,023 $ 29,477
207,058 19,442
217,733 8,767
56,038 473
Total
$ 833,575
774,596
605,261
437,772
382,716
1,930,261
775,888
$ 3,130,000 $ 1,489,809 $ 371,360 $ 12,889 $ 677,852 $ 58,159 $ 5,740,069
:;,:,..;.'.
H. Restricted Net Assets and Restricted Asset Accounts
The City's Water and Sewer Revenue bonds and Certificates of Obligation 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
$ 750,076
645,234
$ 1,395,310
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 $ 77,825 $ 576,689 $
Revenue Bond Contingency 38,240 605,485 1,509
Revenue Bond Construction Account 1,487,008
Revenue Bond Current Debt Service Account, 1,993,586
Revenue Bond Future Debt Service Account 87,550 1,760,035 2,234
Funding Future Water Storage Rights 2,371,431 19,052
Notes Receivable 55,882
Total Restricted Assets $ 6,055,640 $ 2,942,209 $ 78,677
45
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
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, 2006. There have been no settlements in excess of insurance coverage in any of the prior three
fiscal years. In past years, the City operated a self-funded benefits pool for employees which was
replaced May 1, 2006, by coverage provided through an inter-local agreement with TML
Intergovernmental Employees Benefits Pool. The City has a claims liability until all claims
incurred under the self-funded pool have been liquidated.
The claims liability is based on the requirements of Governmental Accounting Standards Board
Statement No.1 0, 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, 2005 and 2006, changes on unpaid claims liability are as
follows:
2005 2006
Balance at Beginning of Year $ 324,787 $ 439,949
Claims Incurred During the Year 2,540,077 1,840,755
Payments on Claims (2,424,915) (2,244,704)
Balance at End of Year $ 439,949 $ 36,000
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.
46
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
V. Other Information (Continued)
C. Water Storage Commitments (Continued)
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 $2,815,064 at September 30, 2006. 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, 2006, were approximately $2,896,000.
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 30,2006, and may be automatically extended for four additional one-year terms ending
September 30, 2010. Either party may terminate this contract at the end of the current term by
giving thirty days notice in advance of the automatic renewal.
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.).
47
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
V. Other Information (Continued
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 financed on a pay-as-you-go basis and for the year ended September 30,
2006, the cost was approximately $118,000 for 35 retired employees. An additional 14 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.
1. Texas Municipal Retirement System
Plan Description
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 811 currently administered by TMRS, an
agent multiple-employer public employee retirement system.
Benefits
Benefits depend upon the sum of the employee's contributions to the plan with interest, and the
City-financed monetary credits with interest. At the date the plan began, the City granted
monetary credits for service rendered before the plan began of a theoretical amount at least
equal to two times what would have been contributed by the employee with interest, prior to
establishment of the plan. Monetary credits for service since the plan began are a percent
(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.
48
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
V. Other Information (Continued
1. Employee Retirement Systems and Plans (Continued)
1. Texas Municipal Retirement System (Continued)
Benefits (Continued)
The plan provisions are adopted by the governing body of the City, within the options available
in the state statutes governing TMRS. Plan provisions for the City were as follows:
Deposit Rate: 6%
Matching Ratio (City to Employees): 2 to 1
A member is vested after 5 years
Members can retire at certain ages, based on the years of service with the City.
The Service Retirement Eligibilities for the City (expressed as years of service/age) are:
5 years/age 60
20 years/any age
Contributions
Under the state law governing TMRS, the actuary annually determines the City's contribution
rate. This rate consists of the normal cost contribution rate and the prior service cost
contribution rate, both of which are calculated to be a level percent of payroll from year to
year. The normal cost contribution rate finances the currently accruing monetary credits due to
the City 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. The unit credit actuarial cost method is used for determining the City's
contribution rate. Both the employees and the City make contributions monthly. 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 for
assets. Other assumptions include no projected salary increases or cost-of-living adjustments,
inflation at 3.5%, 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 1 00% of its annual pension cost as
follows: 2005 - $1,158,159; 2004 - $1,177,209; and 2003 - $1,149,264. At September 30,
2004, 2005, and 2006, the net pension obligation is zero.
49
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
V. Other Information (Continued)
I. Employee Retirement Systems and Plans (Continued)
1. Texas Municipal Retirement System (Continued)
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
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
2005 21,322,495 29,062,212 7,739,717 73.4 8,887,246 87.1
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 defined 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 fmancia1 reporting purposes and issues a
stand-alone financial statement. A copy of the audited financial 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
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 12.78% 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
414(h)(2) of the Internal Revenue Code. Fund members receive credit for service for the
50
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
V. Other Information (Continued)
I. Employee Retirement Systems and Plans (Continued)
2. Firefighters' Relief and Retirement Fund (Continued)
Eligibility (Continued)
period during which they pay into and keep on deposit in the fund, the contributions required
by the fund.
The fund was amended effective January 1, 2004.
The City's annual required contribution to the plan for fiscal year 2006 was based on a payroll
of $1,927,243 and amounted to $251,073. Covered employees made contributions of
$192,724. The Plan covers 30 retirees and beneficiaries, 29 fully vested active employees, and
25 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 hislher 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, 2006, 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 I, 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
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.
51
City of Paris, Texas
Notes to Financial Statements
September 30, 2006
V. Other Information (Continued)
1. Employee Retirement Systems and Plans (Continued)
2. Firefighters' Relief and Retirement Fund (Continued)
Annual Pension Cost (Continued)
The actuarial assumptions used in the actuarial valuation performed as of January 1, 2005,
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% 63.3% 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%
52
City of Paris, Texas
Notes to Financial Statements
September 30,2006
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,
2003 2004 2005
Market Value as of January 1 $ 5,622,529 $ 6,352,304 $ 6,607,720
Contributions, Interest and Dividends
Contributions by the City 231,556 272,228 257,286
Contributions by Members 215,507 229,967 201,567
Dividends and Interest 194,699 196,087 238,695
Other 3,241 274
641,762 701,523 697,822
Disbursements
Benefits Paid Monthly 347,605 650,888 913,153
Administrative Expenses 75,241 93,809 95,498
422,846 744,697 1,008,651
Net Realized and Unrealized Gains and Losses
Realied Gains (Losses) 33,201 35,691 333,986
Unrealized Gains (Losses) 477,658 262,899 (60,425)
510,859 298,590 273,561
Market Value as of December 31 $ 6,352,304 6,607,720 $ 6,570,452
Adjustments to Develop Actuarial Value, Net 360,077
Actuarial Value of Assets $ 6,967,797
Other Information
2003 2004 2005
Annual Pension Cost $ 231,556 $ 272,228 $ 257,286
Percentage of Annual
Pension Cost Contributed 100% 100% 100%
Net Pension Obligation $ $ $
53
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.
54
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City of Paris, Texas
Combining Balance Sheet - Nonmajor Governmental Funds
September 30, 2006
Special Revenue
Criminal Community
Justice Development Library
Division Block Special Health Memorial
Grant Grant Revenue Department Funds
ASSETS
Cash $ 44,803 $ 188,737 $ 133,209 $ 86,791 $ 149,066
Notes Receivable 55,882
Accounts Receivable 44,557 308 150
Due from Other Governments 82,500 215,070
Total Assets $ 89,360 $ 327,119 $ 133,517 $ 302,011 $ 149,066
LIABILITIES AND FUND BALANCES
Liabilities
Accounts Payable $ 20,245 $ 860 $ $ $
Due to General Fund 15,527
Total Liabilities 20,245 860 15,527
Fund Balances
Reserved for Notes 55,882
Umeserved - Undesignated 69,115 270,377 133,517 286,484 149,066
Total Fund Balances 69,115 326,259 133,517 286,484 149,066
Total Liabi1ites and
Fund Balances $ 89,360 $ 327,119 $ 133,517 $ 302,011 $ 149,066
55
Permanent
Total
Library Nonmajor
Trust Governmental
Total Funds Funds
$ 602,606 $ 76,552 $ 679,158
55,882 55,882
45,015 45,015
297,570 297,570
$ 1,001,073 $ 76,552 $ 1,077,625
$ 21,105 $
15,527
36,632
$
21,105
15,527
36,632
55,882
908,559
964,441
76,552
76,552
55,882
985,111
1,040,993
$ 1,001,073 $ 76,552 $ 1,077,625
Schedule I
56
City of Paris, Texas
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended September 30, 2006 .
Special Revenue
Criminal Community
Justice Development Library
Division Block Special Health Memorial
Grant Grant Revenue Department Funds Total
Revenues:
Memorial Donations $ $ $ $ $ 31,390 $ 31,390
Interest Earned 2,389 1,177 58 6,133 9,757
Program Income 140,456 140,456
Grant Revenue 348,670 112,250 569,045 1,029,965
Local Revenue 44,965 27,308 203,315 275,588
Total Revenues 534,091 114,639 28,485 772,418 37,523 1,487,156
Expenditures:
Municipal Court 32,259 32,259
Community Development 124,100 124,100
Police 524,567 12,901 537,468
Health 822,734 822,734
Library 19,4 23 19,423
Total Expenditures 524,567 124,100 45,160 822,734 19,423 1,535,984
Excess of Revenues Over
(Under) Expenditures 9,524 (9,461) (16,675) (50,316) 18,100 (48,828)
Other Financing Uses
Transfer Out (62,590) (62,590)
Fund Balances -
Septembers 30, 2005 59,591 335,720 212,782 336,800 130,966 1,075,859
Fund Balance -
Septembers 30, 2006 $ 69,115 $ 326,259 $ 133,517 $ 286,484 $ 149,066 $ 964,441
57
,J
Schedule 2
Permanent
Total
Library Nonmajor
Trust Governmental
Funds Funds
$ $ 31,390
3,179 12,936
140,456
1,029,965
275,588
3,179 1,490,335
32,259
124,100
537,468
822,734
19,423
1,535,984
3,179 (45,649)
(62,590)
73,373 1,149,232
$ 76,552 $ 1,040,993
58
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 30,2006
Schedule 3
Budgeted Amounts Variance with
Final Budget-
Positive
Original Final Actual (N egative)
Revenues:
Grant Revenue $ $ $ 348,670 $ 348,670
Local Revenue 44,965 44,965
Program Income 140,456 140,456
Total Revenues 534,091 534,091
Expenditures:
Police 130,224 130,224 524,567 (394,343)
Total Expenditures 130,224 130,224 524,567 (394,343)
Excess Revenues Over
(Under) Expenditures (130,224) (130,224) 9,524 139,748
Fund Balance - September 30, 2005 59,591 59,591 59,591
Fund Balance - September 30, 2006 $ (70,633) $ (70,633) $ 69,115 $ 139,748
59
City of Paris, Texas
Community Development Block Grant Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance-
Budget and Actual
F or the Year Ended September 30, 2006
Schedule 4
Budgeted Amounts Variance with
Final Budget-
Positive
Original Final Actual (Negative)
Revenues:
Interest Earned on
Notes Receivable $ $ $ 2,389 $ 2,389
Grant Revenue 352,980 352,980 112,250 (240,730)
Total Revenues 352,980 352,980 114,639 (238,341 )
Expenditures:
Community Development 381,980 381,980 124,100 257,880
Total Expenditures 381,980 381,980 124,100 257,880
Excess Revenues Over
(Under) Expenditures (29,000) (29,000) (9,461) 19,539
Fund Balance - September 30, 2005 335,720 335,720 335,720
Fund Balance - September 30, 2006 $ 306,720 $ 306,720 $ 326,259 $ 19,539
60
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, 2006
Schedule 5
Budgeted Amounts Variance with
Final Budget-
Positive
Original Final Actual (Negative)
Revenues:
Interest Earned $ $ $ 1,177 $ 1,177
Local Revenue 31,550 31,550 27,308 (4,242)
Total Revenues 31,550 31,550 28,485 (3,065)
Expenditures:
Municipal Court 225,867 225,867 32,259 193,608
Police Department 18,600 18,600 12,901 5,699
Total Expenditures 244,467 244,467 45,160 199,307
Excess Revenues Over
(Under) Expenditures (212,917) (212,917) (16,675) 196,242
Other Financing Sources
Transfer Out ( 62,590) ( 62,590)
Fund Balance - September 30, 2005 212,782 212,782 212,782
Fund Balance - September 30, 2006 $ (135) $ (135) $ 133,517 $ 133,652
61
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, 2006
Schedule 6
Budgeted Amounts Variance with
Final Budget-
Positive
Original Final Actual (Negative)
Revenues:
Grant Revenue $ 635,466 $ 635,466 $ 569,045 $ (66,421)
Local Revenue 333,349 333,349 203,315 (130,034)
Interest Earned 58 58
Total Revenues 968,815 968,815 772,418 (196,397)
Expenditures:
Health 970,111 970,111 822,734 147,377
Total Expenditures 970,111 970,111 822,734 147,377
Excess Revenues Over
(Under) Expenditures (1,296) (1,296) (50,316) (49,020)
Fund Balance - September 30, 2005 336,800 336,800 336,800
Fund Balance - September 30, 2006 $ 335,504 $ 335,504 $ 286,484 $ (49,020)
62
City of Paris, Texas
Debt Service Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual .
F or the Year Ended September 30, 2006
Schedule 7
Budgeted Amounts Variance with
Final Budget-
Positive
Original Final Actual (N egative)
Revenues:
Ad Valorem Taxes $ 1,339,796 $ 1,339,796 $ 1,353,600 $ 13,804
Interest Earned 10,877 10,877
Total Revenues 1,339,796 1,339,796 1,364,477 24,681
Expenditures:
Bond Principal Retirement 722,800 722,800 722,800
Interest and Fiscal Charges 616,996 616,996 615,497 1,499
Total Expenditures 1,339,796 1,339,796 1,338,297 1,499
Excess Revenues Over
(Under) Expenditures 26,180 26,180
Fund Balance - September 30, 2005 725,394 725,394 725,394
Fund Balance - September 30, 2006 $ 725,394 $ 725,394 $ 751,574 $ 26,180
63
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 30,2006
Schedule 8
Prior Current Total Project
Years Year to Date Authorization
Revenues:
Investment Incorne $ 920,136 $ 38,418 $ 958,554 $
Grant and Other Revenues 879,939 168,556 1,048,495
Total Revenues 1,800,075 206,974 2,007,049
Expenditures:
City Council 1,110,307 73,960 1,184,267 500,000
Police 3,932,598 2,923,492 6,856,090 6,240,000
Parks 1,123,794 (1,950) 1,121,844 1,000,000
Streets and Highways 3,835,679 1,121,212 4,956,891 4,320,000
Total Expenditures 10,002,378 4,116,714 14,119,092 12,060,000
Excess of Revenues Over
(Under) Expenditures (8,202,303) (3,909,740) (12,112,043) (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) 118,247 62,590 180,837
Net Change in Fund Balance $ 4,036,886 (3,847,150) $ 189,736 $
Fund Balance, September 30, 2005 4,036,886
Fund Balance, September 30, 2006 $ 189,736
64
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City of Paris, Texas
Capital Assets Used in the Operation of Governmental Funds
Comparative Schedules by Source
September 30, 2006 and 2005
2006
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
15,218,309
3,648,710
16,215,764
36,114,216
6,979
$ 77,107,000
Investments in Governmental Funds Capital Assets by Source:
General Fund
Capital Projects Funds
Donations
Total Governmental Funds Capital Assets by Source
$ 55,991,292
16,463,506
4,652,202
$ 77,107,000
65
Schedule 9
2005
$ 5,903,022
9,870,329
3,623,710
15,606,261
34,117,660
3,549,809
$ 72,670,791
$ 55,697,361
12,346,791
4,626,639
$ 72,670,791
City of Paris, Texas
Capital Assets Used in the Operation of Governmental Funds
Schedule by Function and Activity
September 30, 2006
Improvements Machinery
Other Than and
Function and Activity Land Buildings Buildings Equipment
General Government:
Council $ 330,820 $ 2,340,298 $ $ 528,923
Manager 10,187
Attorney 113,768
Clerk 14,737 71,230
Finance 335,933
Total General Government 330,820 2,355,035 1,060,041
Public Safety:
Police 619,585 5,903,052 25,000 3,256,856
Fire 159,268 2,189,378 2,490,820
Total Public Safety 778,853 8,092,430 25,000 5,747,676
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 2,775,200 712,424
Solid Waste 626,395 42,079 1,374,383
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 5,066,113
Emergency Medical Service 23,805 2,029,011
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 $ 15,218,309 $ 3,648,710 $ 16,215,764
66
Schedule 10
Infrastructure Total
$ $ 3,200,041
10,187
113,768
85,967
335,933
3,745,896
9,804,493
4,839,466
14,643,959
3,343,828
184,508
967,616
3,692,122
2,042,857
36,114,216 38,096,634
117,366
150,160
17,036
36,114,216 48,612,127
2,052,816
4,821,536
3,223,687
$ 36,114,216 $ 77,100,021
67
City of Paris, Texas
Capital Assets Used in the Operation of Governmental Funds
Schedule of Changes by Function and Activity
September 30,2006
Schedule II
Governmental Funds Governmental Funds
Capital Assets Capital Assets
Function and Activity October 1,2005 Additions Deductions September 30,2006
General Government:
Council $ 2,292,021 $ 908,020 $ $ 3,200,041
Manager 10,187 10,187
Attorney 113,768 113,768
Clerk 85,967 85,967
Finance 335,933 335,933
Total General Government 2,837,876 908,020 3,745,896
Public Safety:
Police 4,872,372 4,977,464 45,343 9,804,493
Fire 4,839,466 4,839,466
Total Public Safety 9,711,838 4,977,464 45,343 14,643,959
Public Works:
Community Development 3,343,828 3,343,828
Engineering 184,508 184,508
Public Works 967,616 967,616
Parks and Recreation 3,684,649 7,473 3,692,122
Solid Waste 1,935,601 107,256 2,042,857
Streets and Highways 36,100,078 1,996,556 38,096,634
Traffic and Public Lighting 117,366 117,366
Garage 150,160 150,160
Other Unclassified 17,036 17,036
Total Public Works 46,500,842 2,111,285 48,612,127
Emergency Medical Service 2,025,203 96,707 69,094 2,052,816
Cox Field 4,821,536 4,821,536
Library 3,223,687 3,223,687
Total Governmental Funds
Capital Assets $ 69,120,982 $ 8,093,476 $ 114,437 $ 77,100,021
68
STATISTICAL SECTION
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STATISTICAL SECTION
This part of the City of Paris' comprehensive annual financial report cQntains detailed information as a
context for understanding what the information in the financial statements, note disclosures, and required
supplementary information says about the government's overall financial health.
Financial Trends
Revenue Capacity
Debt Capacity
Demographic and Economic Information
Operating Information
69
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City ofparis, Texas
Net Assets by Component
Last Four Fiscal Years
(Accrual Basis of Accounting)
Unaudited
Table 1
Fiscal Year
2003 2004 2005 2006
Governmental Activities:
Invested in Capital Assets,
Net of Related Debt $ 19,842,402 $ 19,947,827 $ 25,293,563 $ 28,935,168
Restricted 11,014,363 7,549,815 5,089,243 1,249,886
Unrestricted 4,715,567 5,790,128 7,192,467 9,619,009
Total Governmental Activities,
Net Assets $ 35,572,332 $ 33,287,770 $ 37,575,273 $ 39,804,063
Business- Type Activities:
Invested in Capital Assets,
Net of Related Debt $ 24,433,769 $ 25,324,447 $ 24,119,931 $ 23,590,438
Restricted 5,668,693 3,935,871 3,936,107 2,864,698
Unrestricted 3,675,892 4,592,176 3,487,041 6,282,200
Total Business-Type Activities,
Net Assets $ 33,778,354 $ 33,852,494 $ 31,543,079 32,737,336
Primary Government
Invested in Capital Assets,
Net of Related Debt $ 44,276,171 $ 45,272,274 $ 49,413,494 $ 52,525,606
Restricted 16,683,056 11,485,686 9,025,350 4,114,584
Umestricted 8,391,459 10,382,304 10,679,508 15,901,209
Total Primary Government,
Net Assets $ 69,350,686 $ 67,140,264 $ 69,118,352 $ 72,541,399
Fiscal year 2003 was the initial year of implementation of GASB Statement No. 34.
Fiscal years prior to 2002 were not restated in GASB No. 34 fonnat.
2005 has been reclassified to be consistent with 2006.
70
City ofparis, Texas
Changes in Net Assets
Last Four Fiscal Years
(Accrual Basis of Accounting)
Unaudited
Fiscal Year
2003( 1) 2004 2005 2006
Expenses
Governmental Activities:
General Government $ 2,209,909 $ 2,275,969 $ 2,188,590 $ 1,391,781
Finance 487,253 540,815 515,965 556,076
Public Safety 9,228,741 9,554,945 9,825,404 9,138,101
Public Works 7,500,073 8,102,061 6,957,522 6,826,116
Health 2,881,164 3,724,003 2,904,920 2,889,602
Library Service 1,165,646 917,450 718,779 745,653
Cox Field 253,822 256,149 258,496 264,181
Interest on Long-Term Debt 932,025 1,022,551 627,691 614,799
Total Governmental
Activities Expenses 24,658,633 26,393,943 23,997,367 22,426,309
Business-Type Activities:
Water and Sewer Services 9,647,360 9,997,416 10,554,510 10,912,834
Total Primary Government
Expenses $ 34,305,993 $ 36,391,359 $ 34,551,877 $ 33,339,143
Program Revenues
Governmental Activities:
Charges for Services:
General Government $ 133,746 $ 125,001 $ 184,469 $ 167,032
Public Safety 573,497 485,266 379,992 698,497
Public Works 1,550,057 1,602,974 1,718,241 1,609,895
Health 2,056,370 3,000,742 1,648,008 2,389,663
Library Services 55,910 38,960 31,532
Operating Grants and Contributions 2,892,360 3,442,169 2,823,843 1,660,785
Capital Grants and Contributions 194,227 230,177
Total Governmental Activities
Program Revenues 7,261,940 8,656,152 6,987,740 6,787,581
Business- Type Activities:
Charges for Services:
Water and Sewer Service 10,412,475 10,929,862 12,160,851 12,879,592
Total Primary Government
Program Revenues $ 17,674,415 $ 19,586,014 $ 19,148,591 $ 19,667,173
Net (Expense )/Revenue
Governmental Activities $ (17,396,693) $ (17,737,791) $ (17,009,627) $ (15,638,728)
Business-Type Activities 765,115 932,446 1,606,341 1,966,758
Total Primary Government,
Net Expense $ (16,631,578) $ (16,805,345) $ (15,403,286) $ (13,671,970)
71
Table 2
Fiscpl Year
2003(1 ) 2004 2005 2006
General Revenues and Other Changes in Net Assets
Governmental Activities:
Taxes
Property Taxes $ 7,260,943 $ 7,456,850 $ 7,733,700 $ 7,583,269
Sales Taxes 4,726,406 4,794,743 5,066,926 5,401,371
Franchise 3,034,049 2,465,130 3,062,589 3,053,671
Hotel Occupancy 310,920 302,334 314,404 396,333
Investment Earnings 155,320 127,251 112,310 342,306
Grants, Donations,
and Miscellaneous 418,603 568
Transfers (2,603,160) 1,235,454 4,588,598 1,090,000
Special Item (928,533)
Total Governmental Activities 12,884,478 15,453,229 21,297,130 17,867,518
Business- Type Activities:
Investment Earnings 243,952 191,576 70,731 284,899
Transfers 2,603,160 (1,235,454) (4,588,598) (1,090,000)
Contribution 593,660 602,111 32,600
Special Item (408,088)
Total Business-Type Activities 2,847,112 (858,306) (3,915,756) (772,501)
Total Primary Government $ 15,731,590 $ 14,594,923 $ 17,381,374 $ 17,095,017
Change in Net Assets
Governmental Activities $ (4,512,215) $ (2,284,562) $ 4,287,503 $ 2,228,790
Business- Type Activities 3,612,227 74,140 (2,309,415) 1,194,257
Total Primary Government $ (899,988) $ (2,210,422) $ 1,978,088 $ 3,423,047
(1) Fiscal year 2003 was the initial year of implementation of GASB Statement No.34.
Fiscal years prior to 2003 were not restated in GASB No. 34 format.
72
City of Paris, Texas
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Acco~nting)
Unaudited
Fiscal Year
.1997 1998 1999 2000 2001
General Fund
Reserved $ 158,634 $ 151,236 $ 160,716 $ 213,667 $ 190,273
Umeserved 5,235,520 6,126,815 5,757,173 6,290,822 4,811,122
Total General Fund $ 5,394,154 $ 6,278,051 $ 5,917,889 $ 6,504,489 $ 5,001,395
All Other Governmental Funds
Reserved $ 1,454,826 $ 999,600 $ 1,011,399 $ 6,573,994 $ 5,275,529
Umeserved, reported in:
Special Revenue Funds 230,544 246,164 295,377 408,946 570,378
Permanent Funds 44,808 38,063 42,933 45,237 47,516
Total All Other Governmental Funds $ 1,730,178 $ 1,283,827 $ 1,349,709 $ 7,028,177 $ 5,893,423
73
2002
$ 171,248
6,085,946
$ 6,257,194
$10,663,363
774,466
76,261
$11,514,090
2003
$ 217,610
5,502,760
$ 5,720,370
$ 8,071,051
800,930
77,454
$ 8,949,435
Fiscal Year
2004
$ 155,608
3,735,128
$ 3,890,736
$ 7,776,342
909,520
(196,478)
$ 8,489,384
2005
$ 153,043
5,375,749
$ 5,528,792
$ 4,831,754
1,006,385
73,373
$ 5,911,512
74
Table 3
2006
$ 118,925
8,874,883
$ 8,993,808
$ 997,192
908,559
76,552
$ 1,982,303
City of Paris, Texas
Changes in Fund Balances of Governmental Funds (1)
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Unaudited
Fiscal Year
1997 1998 1999
Revenues
Taxes $10,133,472 $11,125,408 $11,583,826
Licenses and Permits 44,869 47,147 68,658
Fines and Fees 394,670 466,837 445,958
Use of Money and Property 316,819 270,970 254,347
Public Safety 1,080 720 1,080
Sanitation Fees 1,424,201 1,354,255 1,482,995
Health 1,942,037 1,853,508 1,622,654
Intergovernmental 489,451 1,289,185 1,228,946
Other 384,611 378,693 447,933
Total Revenues 15,131,210 16,786,723 17,136,397
Expenditures
General Government 1,053,653 1,394,551 1,441,212
Finance 358,470 379,179 383,940
Public Safety 6,298,096 6,513,684 7,637,819
Public Works 4,352,042 4,830,986 5,050,915
Health Department 788,690 825,403 740,734
Emergency Medical Service 1,139,519 1,309,932 1,269,897
Insurance Trust Fund
Library 573,062 620,041 706,498
Cox Field 368,114 722,545 108,274
Other 13,535 14,703 14,088
Debt Service
Interest 245,040 234,306 223,633
Principal 185,000 175,000 185,000
Capital Outlay
Total Expenditures 15,375,221 17,020,330 17,762,010
Excess of Revenues Over (Under) Expenditures (244,011) (233,607) (625,613)
Other Financing Sources (Uses)
Proceeds of Long Term Debt 99,845
Transfers In 276,780 1,026,780 1,036,825
Transfers Out
Combing Equity of
Insurance Fund
Total Other Financing Sources (Uses) 276,780 1,126,625 1,036,825
Adjustment Due to Change in Accounting Principle
Increase (Decrease) in Reserve for Inventory 17,963 (7,397) 9,480
Residual Equity Transfers In (Out) (750,000)
Net Change in Fund Balances $ 50,732 $ 885,621 $ (329,308)
Debt Service as a Percentage of Noncapita1 Expenditures 3.06% 2.70% 2.54%
Source: City of Paris
Notes: (1) Includes General and Debt Service Fund for years through 2002, (2) GASB 34 adopted,
(3) Included in General Fund 2005
75
Table 4
Fiscal Year
2000 2001 2002 2003(2) 2004 2005 2006
$12,772,897 $13,434,372 $13,748,657 $15,323,499 $14,959,510 $16,109,433 $16,435,160
53,451 84,660 114,720 80,666 73,163 98,611 87,137
452,700 535,496 545,236 472,857 501,124 556,895 543,606
348,828 305,362 204,846 265,980 247,260 357,262 493,234
1,800 1,800 1,800 172,955 208,878 230,029 212,729
1,547,223 1,380,109 1,382,796 1,349,711 1,346,443 1,361,406 1,287,138
1,567,331 2,353,402 2,844,927 2,043,589 2,246,352 2,083,448 2,489,961
1,026,441 1,088,493 2,197,149 2,715,441 2,493,221 2,272,486 1,867,098
426,702 998,580 664,848 302,489 852,469 470,791 247,234
18,197,373 20,182,274 21,704,979 22,727,187 22,928,420 23,540,361 23,663,297
1,521,641 1,751,664 2,340,802 1,577,462 1,612,645 1,545,542 1,210,298
505,245 440,423 439,535 ' 476,883 533,799 508,968 549,079
7,928,492 8,795,690 8,222,361 . 8,675,218 9,070,046 9,136,810 8,653,589
5,388,190 7,730,857 6,004,759 5,957,419 6,473,823 5,324,999 5,193,512
693,691 691,507 747,528 800,717 797,474 844,625 822,734
1,376,163 1,790,374 1,824,006 1,790,799 1,844,574 1,862,313 1,890,825
879,643 (3)
682,798 729,600 720,407 1,034,918 795,347 601,885 621,327
160,870 171,691 130,929 132,347 133,295 134,542 143,620
15,459 19,501 18,460 505,553 484,044 535,395 60,011
212,109 640,983 531,561 744,280 796,024 670,102 622,773
195,000 290,000 390,000 862,838 1,225,517 1,065,372 864,958
3,664,855 1,833,954 3,163,974 4,550,646
18,679,658 23,052,290 21,370,348 26,223,289 26,480,185 25,394,527 25,183,372
(482,285) (2,870,016) 334,631 (3,496,102) (3,551,765) (1,854,166) (1,520,075)
$ 607,491 $(1,047,875) $ 1,415,605 $(3,101,479) $(2,289,685) $ (939,816) $ (464,193)
2.37% 4.65% 4.67% 7.12% 8.20% 7.81 % 7.74%
76
City of Paris, Texas
Property Tax Levies and Collections (I)
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
1996 1996-97 $3,873,454 $ 3,722,188 96.09% $ 267,555 $ 3,989,743
1997 1997-98 4,724,497 4,548,919 96.28 642,248 5,191,167
1998 1998-99 4,948,368 (2) 4,687,960 94.74 169,485 4,857,445
1999 1999-00 5,332,833 5,159,009 96.74 94,300 5,253,309
2000 2000-01 6,132,621 5,854,458 95.46 98,103 5,952,561
2001 2001-02 6,216,227 6,099,899 98.13 107,439 6,207,338
2002 2002-03 7,303,340 7,003,492 95.89 92,130 7,095,622
2003 2003-04 7,470,691 7,180,706 96.12 76,540 7,257,246
2004 2004-05 7,7 62,498 7,422,657 95.62 59,855 7,482,512
2005 2005-06 7,670,001 7,312,326 95.34 7,312,326
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.
77
Table 5
Ratio Ratio of
of Total Delinquent
Collections Outstanding Taxes
To Total Delinquent To Total
Tax Levy Taxes Tax Levy
103.00% $ 23,514 0.61%
109.88 37,017 0.78
98.16 37,179 0.75
98.51 34,104 0.64
97.06 40,964 0.67
99.86 43,284 0.70
97.16 61,832 0.85
97.14 87,519 1.17
96.39 133,345 1.72
95.34 172,265 2.25
78
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City of Paris, Texas
Property Tax Rates - All Direct and Overlapping Governments
(Per $100 of Assessed Value)
Last Ten Fiscal Years
Unaudited
Table 6
North Paris
fiscal City of Lamar Paris Chisum Lamar Junior
Year Paris County ISD ISD ISD College
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
2000-0 I 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
2005-06 0.69225 0.4354 1.5820 1.6680 1.5453 0.1922
Source:
Paris Economic Development Corporation
79
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
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
2005 2005-06 675,842,648 1,236,845,116 432,136,840 501,641,670
Sources:
City of Paris
Lamar County Appraisal District
80
Table 7
Total
Estimated
Assessed Actual
Exemptions Value Value
$ 298,373,686 $ 748,660,556 $1,047,034,242
251,248,285 853,722,050 1,1 04,970,335
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
629,837,379 1,107,979,488 1,738,486,786
81
City of Paris, Texas
Principal Property Taxpayers
September 30, 2006 and 1997
Unaudited
2006
Percentage
Taxable of Total
Assessed Taxable
Taxpayer Type of Business Value Rank Assessed Value
Kimberly Clark Corp. Disposable Diaper Mfg. $ 125,213,010 1 11.29%
Essent PRMC LP Hospital 42,357,980 2 3.82
Campbell Soup, Inc. Food Mfg. 40,367,860 3 3.64
Silgan Can Co. Can Mfg. 22,317,770 4 2.01
T enaska III Utility 20,708,170 5 1.86
TXU Electric Delivery Co. Utility 20,101,880 6 1.81
Sara Lee Bakery Group Food Mfg. 12,818,210 7 1.15
Lamar Power Partners, LP Utility 12,715,070 8 1.14
Southwestern Bell Telephone Communication 8,574,480 9 0.77
Campbell Soup Supply, LLC Food Mfg. 8,141,570 10 0.73
Wal-Mart Stores, Inc. Discount Store
Precision Printing Printer
Babcock & Wilcox Steam Equipment
General Foam Plastics Plastic Mfg.
Totals $ 313,316,000 28.22%
Source:
Lamar County Appraisal District
82
1997
Percentage
Taxable of Total
Assessed Taxable
Value Rank Assessed Value
$ 73,384,813 8.59%
71,844,468 2 8.41
70,777,000 3 8.29
13,641,690 7 1.48
15,465,563 5 1.08
10,338,720 9 1.21
17,746,579 4 2.08
12,950,459 6 1.51
11,358,831 8 1.33
7,501,000 10 0.88
$ 305,009,123 34.86%
Table 8
83
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City of Paris, Texas Table 9
Ratio of Net General Obligation Bonded Debt to
Assessed Value and Net General Obligation Bonded Debt Per Capita
Last Ten Fiscal Years
Unaudited
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
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
2005-06 26,612 1,108,649,407 13,054,000 751,574 12,302,426 1.11 462.29
Source:
City of Paris
84
City of Paris, Texas
Ratio of Outstanding Debt by Type
Last Ten Fiscal Years
Unaudited
Governmental Activities Business-Type Activities
General
Fiscal Obligation Capital Water and Capital
Year Bonds Leases Other Sewer Bonds Leases Other
1997 $ 4,660,000 $340,400 $ 95,792 $32,145,000 $ 28,269 $ 847, 151
1998 4,485,000 350,127 90,904 31,990,000 8,532 823,900
1999 4,300,000 241,907 85,772 30,675,000 43,180 799,919
2000 10,105,000 228,537 80,383 38,775,000 85,703 775,187
2001 9,815,000 708,454 74,725 36,630,000 53,645 749,679
2002 15,485,000 762,691 68,784 35,605,000 35,349 723,370
2003 19,240,000 609,833 62,546 29,565,000 21,329 696,236
2004 18,235,000 476,429 55,996 27,620,000 6,459 668,251
2005 13,776,800 238,734 49,119 29,053,200 639,388
2006 13,054,000 103,798 41,897 26,451,000 609,619
",
Source:
City of Paris
85
Table 10
Total
Primary Per
Government Capita
$38,116,612 $ 1,500
37,748,463 1,478
36,145,778 1,409
50,049,810 1,933
48,031,503 1,846
52,680,194 2,016
50,194,944 1,912
47,062,135 1,784
43,757,241 1,652
40,260,314 1,513
86
City of Paris, Texas
Direct and Overlapping
Governmental Activities Debt
September 30, 2006
Unaudited
Table 11
General Percent Amount
Obligation Applicable Applicable
Bonded Debt to to
Taxing Jurisdiction Outstanding Government Government
City of Paris $ 13,431,200 100.00% $ 13,431,200
Lamar County 4,370,032 62.75 2,742,195
Paris Independent School District 5,401,299 49.30 2,662,840
Chisum Independent School District 6,615,000 47.75 3,158,663
North Lamar Independent School District 7,275,000 58.33 4,243,508
Paris Junior College 100.00
Total Direct and Overlapping Funded Debt $ 37,092,531 $ 26,238,406
Per Capita Direct and Overlapping Funded Debt $ 985.96
Per Capita Direct Debt - See note $ 504.70
Sources:
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.
87
City of Paris, Texas
Legal Debt Margin Information
September 30, 2006
Unaudited
Table 12
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 $.69225 per $100
valuation for the fiscal year ended September 30, 2006.
Source:
City of Paris
88
City of Paris, Texas
Revenue Pledged Coverage - Water and Sewer Revenue Bonds
Last Ten Fisica1 Years
Unaudited
Table 13
Net Revenue A verage Remaining
Available Debt Service Requirements
Fiscal Gross Operating For Debt Percent
Year Revenues* Expenses** Service Principal Interest Total*** Coverage
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
2005-06 13,197,091 6,665,832 6,531,259 1,763,400 471,270 2,234,670 2.92
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
89
City of Paris
Demographic and Economic Statistics
Last Ten Calendar Years
Unaudited
Table 14
County
County County Per Capita County Percent
Calendar Estimated Personal Personal Median School Unemployment
Year Population Income Income Age Emollments (2) Rate
1996 46,705 $ 880,305,000 $ 18,848 (1) 10,728 5.7%
1997 47,193 936,777,000 19,850 (1) 10,937 9.1
1998 47,602 978,120,000 20,548 37.5 10,602 6.2
1999 48,013 1,043,316,000 21,730 38.2 11,956 5.3
2000 48,499 1,079,738,000 22,263 36.9 11,986 5.9
2001 48,075 1,072,093,000 22,300 37.9 12,794 6.7
2002 49,096 1,087,968,000 22,160 36.9 12,078 8.1
2003 49,480 1,117,816,000 22,591 36.9 12,203 6.5
2004 49,598 1,170,186,000 23,593 37.5 12,272 7.0
2005 49,644 (1) (1) 37.5 12,201 6.1
(1) Information not available.
(2) Includes Paris Independent School District, North Lamar Independent School District,
Chisum Independent School District, and Paris Junior College.
Sources:
City of Paris
Paris Independent School District
North Lamar Independent School District
Chisum Independent School District
Paris Junior College
Chamber of Commerce
Bureau of Economic Analysis
3,891 students
3,141 students
851 students
4,318 students
90
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City of Paris, Texas
Principal Employers (Major Employers)
Fiscal Year End 2006 and 1997
Unaudited
Table 15
2006 1997
Percentage Percentage
of Total of Total
City City
Taxpayer Employees Rank Employment Employees Rank Employment
Paris Regional Medical Center 900 1 8.16% 7.17%
Kimberly Clark Corp. 900 2 8.16 850 2 12.66
Campbell Soup Inc. 800 3 7.26 1,500 1
Sara Lee Bakery Group 800 4 7.26
Turner International Piping 352 5 3.19
Paris Industries 275 6 2.49 300 7 2.53
TCIM 250 7 2.26
Buster Paving Co. 178 8 1.61
Paris Packaging 168 9 1.52
We Pack Logistics, Inc. 150 10 1.36 160 10 1.35
St. Joseph Hospital 750 3 6.33
Merico, Inc. 734 4 6.19
Babcock & Wilcox 560 5 4.72
McCuistion Reg. Med. Center 553 6 4.67
Precision Packaging 185 8 1.56
Harrison Walker Harper 175 9 1.47
Totals 4,773 43.27% 5,767 48.65%
Source: Chamber of Commerce
91
City of Paris, Texas
Operating Indicators by Function
Last Ten Fiscal Years
Unaudited
GOVERNMENT:
Date of Incorporation - 1836
Current Charter - Adopted November 2, 1948
Fiscal Year
1997 1998 1999 2000
FACILITIES:
Airports:
Number of Airports
Fire Protection:
Number of Stations 3 3 3 3
Number of Fire Hydrants 947 979 981 1,018
Number of Employees (certified) 54 54 54 57
Employees Per 1,000 Population 2.06 2.04 2.02 2.11
Library:
Number of Libraries 1 I 1 1
Number of Volumes 83,529 93,196 102,360 111,232
Circularization of Materials 296,468 294,379 315,745 321,549
Circulation Per Capita 11.31 11.12 11.80 11.90
Library Cards in Force 14,629 17,225 18,417 22,239
Police Protection:
Number of Stations 1 1 1 1
Number of Employees (certified) 55 57 57 59
Employees Per 1,000 Population 2.09 2.16 2.13 2.18
Parks and Recreation:
Parks' Acres Developed 80 87 87 87
Parks' Acres Undeveloped 2,817 96 96 131
City Parks 12 21 21 22
Streets:
Paved Lane - Miles 180 196 197 197
Unpaved Streets - Miles 15 9 11 11
WATER AND SEWER UTILITY:
Average Daily Water Comsumption - Gallons 11,788,000 13,560,000 12,561,000 12,443,571
Maximum Day's Water Consumption - Gallons 19,296,000 23,447,000 21,519,000 22,080,000
Annual Water Consumption - Gallons 4,302,727,000 7,949,505,000 4,591,909,000 4,554,347,000
Water Mains - Miles 181 168 185 185
Water Connections - Metered 9,789 10,141 10,137 10,003
Sewer Mains - Miles 187 200 189 189
Area Miles 28.01 37.34 42.89 42.89
Number of Full- Time Employees 320 335 337 359
Source: City of Paris
92
2001
Fiscal Year
2003 2004
2006
2002
2005
4 4 4 4 4 4
971 1,039 1,042 1,045 1,082 1,078
57 56 56 54 48 48
2.19 2.14 2.13 2.05 1.81 1.80
1 1 1 1 1 1
129,083 121,732 123,626 106,687 102,801 106,955
332,750 347,290 337,947 308,527 210,956 195,944
12.78 13.29 12.87 11.70 7.96 7.36
24,377 26,644 29,247 26,406 15,551 21,164
1 1 1 1 1 1
61 62 65 62 62 62
2.34 2.37 2.47 2.35 2.34 2.33
87 87 87 87 87 87
221 221 221 221 221 221
24 24 24 24 24 24
199 199 199 199 199 199
10 10 10 10 10 10
12,221,421 11,405,367 10,905,049 10,838,754 10,619,268 12,435,000
21,129,651 20,271,851 17,075,000 16,257,000 18,603,000 19,557,000
4,460,818,744 4,162,959,000 3,980,343,000 2,966,984,000 3,876,033,000 4,538,690,000
190 190 208 208 208 208
10,137 10,183 10,294 9,941 9,865 9,803
205 205 195 195 195 195
42.89 42.89 42.89 42.89 42.89 42.89
359 369 369 350 325 318
93
Table 16
City of Paris, Texas
Capital Asset Statistics by Function
Last Ten Fiscal Years
Unaudited
Fiscal Year
1997 1998 1999 2000
Function:
Public Safety
Police
Stations 1 1 1 1
Patrol Units 11 11 11 11
Fire Stations 3 3 3 3
Sanitation
Collection Trucks
Highways and Streets
Streets (Miles) 195 205 208 208
Streetlights N/A N/A N/A N/A
Traffic Signals*
Culture and Recreation
Parks Acreage 183 183 183 218
Swimming Pools - Municipal 1 1 1 1
Tennis Courts
Community Centers
Water
Water Mains (miles) 181 168 185 185
Fire Hydrants 947 979 981 1,018
Maximum Daily Capacity 36,000 36,000 36,000 36,000
(thousands of gallons)
Sewer
Sanitary Sewers (miles) 187 200 189 189
Maximum Daily Treatment Capacity 7,250 7,250 7,250 7,250
(thousands of gallons)
Source: Various City Departments
* City has none. All inside City limits belong to the State of Texas.
94
Table 17
2001
2002
Fiscal Year
2003 2004
2005
2006
1 1 1 1 1 1
11 11 11 11 11 11
4 4 4 4 4 4
13
209 209 209 209 209 209
N/A N/A N/A N/A 2,160 2,198
308 308 308 308 308 308
1 1 1 1 1 1
14
1
190 190 208 208 208 208
971 1,039 1,042 1,045 1,082 1,082
36,000 36,000 36,000 36,000 36,000 36,000
205
7,250
205
7,250
195
7,250
195
7,250
195
7,250
195
7,250
95
:?
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City of Paris, Texas
Building Permits at Market Value
Last Ten Fiscal Years
Unaudited
Table 18
Commercial Residential Total
Property Value Commercial Construction Residential Construction Construction
FIscal Year Units Value Units Value Value
1997 27 $ 5,820,132 70 $ 5,241,900 $ 11,062,032
1998 28 14,713,300 68 4,415,900 19,129,200
1999 53 15,683,840 58 6,732,750 22,416,590
2000 36 7,121,494 75 6,814,061 13,935,555
2001 35 13,307,866 85 9,074,912 22,382,778
2002 37 13,476,520 90 8,862,903 22,339,423
2003 38 5,092,241 65 7,476,004 12,568,245
2004 26 6,571,777 67 4,420,392 10,992,169
2005 42 15,372,158 47 4,870,500 20,242,658
2006 23 6,682,498 46 3,643,500 10,325,998
Source:
City of Paris
State Property Tax Reports
96
City of Paris, Texas
Full-Time Equivalent City Govermnent Employees by Function
Last Ten F isca1 Years
Unaudited
Fiscal Year
1997 1998 1999 2000
Function:
Manager 4.0 4.0 1.5 2.0
Attorney 3.0 3.0 4.0 5.0
Court Clerk 3.0 4.0 4.0 4.0
City Clerk 2.0 2.0 2.0 2.0
Finance 5.0 5.0 5.0 5.0
Police* 79.0 83.0 80.0 84.0
Fire 50.0 56.0 56.0 58.0
Cormnunity Development
Engineering 11.0 11.0 11.0 11.0
Public Works 3.0 3.0 3.0 3.0
Parks & ROW 6.5 8.5 8.5 8.5
Sanitation 13.5 15.5 15.5 20.5
Streets 27.0 27.0 29.0 29.0
Traffic & Lighting 3.5 3.5 3.5 3.5
Garage 5.0 5.0 5.0 5.0
EMS 20.0 20.0 20.0 20.0
Airport 2.0 2.0 2.0 2.0
Library 13.0 14.0 14.0 14.0
Warehouse 2.5 2.5 2.5 2.5
Water Billing 10.0 11.0 10.0 11.0
Water Treatment Plant 17.5 17.5 17.5 17.5
Water Distribution 12.5 12.5 12.5 12.5
Waste Water Collection 7.5 7.5 7.5 7.5
Waste Water Treatment Plant 26.0 26.0 26.0 26.5
Lift Stations 4.0 4.0 4.0 4.0
Totals 330.5 347.5 344.0 358.0
* Includes related grant employees.
Seasonal employees not included.
Source:
City of Paris
97
Table 19
Fiscal Year
2001 2002 2003 2004 2005 2006
2.0 3.0 3.0 3.0 2.0 1.0
5.0 5.0 5.0 5.0 5.0 3.0
4.0 4.0 4.0 4.0 4.0 3.0
2.0 2.0 2.0 2.0 2.0 2.0
5.0 5.0 5.0 5.5 6.0 6.0
84.0 80.0 88.0 88.0 86.0 82.0
59.0 58.0 57.0 58.0 58.0 49.0
6.5 6.5 6.5 8.5 7.5
11.0 7.5 6.5 7.5 7.5 6.5
3.0 3.0 4.0 4.0 3.0 2.5
15.5 16.5 15.5 16.5 12.0 9.0
17.5 17.5 19.5 17.5 17.5 16.5
22.0 22.0 22.0 22.0 21.0 15.0
2.5 2.5 2.5 2.5 2.5 2.0
7.0 6.0 6.0 6.0 4.0 4.0
25.0 26.0 26.0 26.0 26.0 26.0
2.0 2.0 2.0 2.0 1.0 1.0
14.0 14.0 15.0 14.0 14.0 12.0
2.5 2.5 2.5 2.5 2.0 2.0
11.0 11.0 10.0 10.0 9.0 7.0
17.5 17.5 17.5 17.5 16.5 15.5
12.5 12.5 12.5 12.5 12.5 11.5
7.5 7.5 7.5 7.5 7.5 7.5
26.5 26.5 25.5 24.5 25.5 23.5
4.0 4.0 4.0 3.0 3.0 3.0
362.0 362.0 369.0 367.5 356.0 318.0
98
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CONTINUING DISCLOSURE INFORMATION
(Unaudited)
,-" !I"lf" ,: '11'~ ,'~
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CONTINUING DISCLOSURE INFORMATION FOR
THE CITY 0 F PARIS, TEXAS
ASSESSED VALUATION
TABLE CD-l
2006 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%)
2006 Net Taxable Assessed Valuation
GENERAL OBLIGATION BONDED DEBT
$ 36,155,737
2,762,320
15,511,120
77,213,530
17,133,760
239,997,777
27,358,700
401,864
$ 1,768,827,176
416,534,808
$ 1,352,292,368
TABLE CD-2
General Obligation Debt Principal Outstanding: (As of September 30, 2006)
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 200 I (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, 2006
Ratio of Net General Obligation Debt Principal to 2006 Net Assessed Valuation
2006 Net Assessed Valuation
Population: 1980 - 25,498; 1990 - 24,699; 2000 - 25,898 Current (Estimate)
Per Capita 2006 Net Assessed Valuation
Per Capita Gross General Obligation Debt Principal
Per Capita Net General Obligation Debt Principal
99
$
3,800,000
4,925,000
3,300,000
5,225,000
6,050,000
23,300,000
3,800,000
3,300,000
3,146,000
10,246,000
$ 13,054,000
$ 746,573
0.97%
$ 1,352,292,368
26,612
$ 50,815
$ 876
$ 491
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 2006 Net Taxable Assessed Valuation of
Type of Property
Disposable Diapers
Hospital
Food Manufacturing
Can Manufacturing
Utility
Electric Utility
Food Manufacturing
Utility
Communication
Food Manufacturing
2006 Net Taxable
Assessed Valuation
$ 125,213,010
42,357,980
40,367,860
22,317,770
20,708,170
20, I 0 I ,880
12,818,210
12,715,070
8,574,480
8,141,570
$ 313,316,000
% ofTotal2006
Assessed
Valuation
9,26%
3.13
2.99
1.65
1.53
1.49
0.95
0,94
0.63
0,60
23.17%
$ 1,352,292,368
PROPERTY TAX RATES AND COLLECTIONS
Tax Net Taxable Tax
Year Assessed Valuation Rate
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 1,050,874,296 0,69500
2003-04 1,074,746,887 0.69500
2004-05 1,121,338,793 0,69225
2005-06 1,107,979,488 0,69225
TABLE CD-4
Tax % Collections Year
Levy Current Total Ended
$ 3,873,454 96.09% 103.00% 9-30-97
4,724,497 96.28 109.88 9-30-98
4,948,368 94.74 98.16 9- 30-99
5,332,833 96.74 98,51 9-30-00
6,132,621 95.46 97,06 9-30-01
6,216,227 98,13 99.86 9-30-02
7,303,340 95.89 97.16 9-30-03
7,470,691 96,12 97.14 9-30-04
7,762,498 95.62 96.39 9-30-05
7,670,00 I 95.34 95.34 9-30-06
Note: Although "Total" tax collection percentages in this table iI/elude delinquel/t tax collections, they are allocated to the year they were originally levied iI/stead of the
year in which they were collected.
TAX RATE DISTRIBUTION TABLE CD-S
2006 2005 2004 2003 2002 2001 2000 1999
General Fund $ 0.49294 $ 0.56650 $ 0,57977 $ 0.57289 $ 0,56104 $ 0.51962 $ 0.51738 $ 0,54132
1& S Fund 0.09931 0.12575 0.11248 0.12211 0.13396 0.09038 0.09262 0.04466
TOTAL $ 0,59225 $ 0.69225 $ 0.69225 $ 0.69500 $ 0.69500 $ 0.61000 $ 0.61000 $ 0.58598
MUNICIPAL SALES TAX TABLE CD-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
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 I, 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 (b) Tax Rate (b) FY Levy
1997 $ 4,893,683 $ 3,262,455 $ 815,614 $ 815,614 105.28% 54,50 96-97 $ 3,873,454
1998 4,971,047 3,314,031 828,508 828,508 87.68 48,52 97-98 4,724,497
1999 5,518,744 3,679,162 919,791 919,791 92.94 51.43 98-99 4,948,368
2000 5,991,043 3,994,029 998,507 998,507 93.62 54.86 99-00 5,332,833
2001 5,340,121 3,560,081 890,020 890,020 72,56 44.26 00-01 6,132,621
2002 5,414,993 3,609,995 902,499 902,499 71.44 43.58 01-02 6,316,880
2003 5,562,491 3,708,327 927,082 927,082 63. 7 6 44.31 02-03 7,270,643
2004 5,782,791 3,855,193 963,799 963,799 64.51 44.83 03-04 7,470,691
2005 6,080,297 4,053,531 1,013,383 1,013,383 65.27 45.18 04-05 7,762,498
2006 6,601,772 4,401,182 1,100,295 1,100,295 74.43 51.52 05-06 7,670,00 I
(bi Based on 1% City portion plus .25% Property Tax Reduction portion.
100
REVENUE BOND DEBT DATA
(As of September 30,2006)
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
$
3,350,000
4,530,000
8,325,000
3,146,000
19,351,000
$
Note: Does not include general obligation self-supporting debt
REVENUE BONDS DEBT SERVICE REQUIREMENTS
TABLE CD-8
Fiscal Year
Ending 9/30
Currently
Outstanding
Revenue
Debt Service
Principal
The Series 2000 Bonds
Interest
Total
Total
Debt
Service
2007 $ 1,293,745 $ 400,000 $ 488,309 S 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
$ 9,505,931 $ 8,325,000 $ 3,971,767 $ 12,296,767 $ 21,802,698
101
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.
COVERAGE FACTOR (Revenue Bonds Only)
TABLE CD-9
A verage Annual Debt Service Requirement
Net Revenue available for debt service for fiscal year ended 9-30-06
Estimated average annual revenue debt service following the issuance of the Bonds (2007- 2020)
Coverage Factor
$
$
6,144,754
1,557,335
3.95 x
Maximum Annual Debt Service Requirement
Net Revenue available for debt service for fiscal year ended 9-30-06
Estimated maximum annual revenue debt service following the issuance of the Bonds (2007)
Coverage Factor
$
$
6,144,754
2,182,054
2.82 x
COVERAGE FACTOR (Revenue Bonds Plus System General Obligation Debt)
TABLE CD-lO
A verage Annual Debt Service Requirement
Net Revenue available for debt service for fiscal year ended 9-30-06
Estimated average annual system debt service including system GO Bonds (2007 - 2020)
Coverage Factor
$
$
6,144,754
2,394,189
2.57 x
Maximum Annual Debt Service Requirement
Net Revenue available for debt service for fiscal year ended 9-30-06
Estimated maximum annual system debt service including system GO Bonds (GO-2012 Rev-2007)
Coverage Factor
$
$
6,144,754
3,662,819
1.68 x
102
i
REVENUE BONDS PRINCIPAL REPA YMENT SCHEDULE
TABLE CD.ll
Fiscal Year
Ending 9/30
Bonds
Outstanding
Principal Payment Schedule
Series 2000
Revenue Bonds
Total
2007 $ 930,000 $ 400,000 $ 1,330,000
2008 975,000 425,000 1,400,000
2009 1,020,000 455,000 1,4 7 5,000
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
20]7 705,000 705,000
2018 745,000 745,000
2019 790,000 790,000
2020 835,000 835,000
$ 7,880,000 $ 8,325,000 $ 16,205,000
ENTERPRISE NET ASSETS
(As afSeptember 30, 2006)
TABLE CD-12
Invested in Capital Assets, Net of Related Debt
Restricted for Debt Service
Restricted for Construction
Unrestricted
$ 21,897,206
1,395,310
1,469,388
7,975,432
Total Enterprise Fund Balances
$ 32,737,336
UTILITY PLANT IN SERVICE
(As afSeptember 30,2006)
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
Water & Sewer
$ 282,672
31,740,002
56,860,380
244,222
1,955,986
39,577
91,122,839
42,774,633
Net Utility Plant in Service
$ 48,348,206
103
REVENUE BONDS AUTHORIZED BUT UNISSUED
TABLE CD-14
Date of Amount Issued
Authorization Purllose Authorized To Date Unissued
8-14-56 WW & SS $ 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
WATERWORKS AND SEWER SYSTEM OPERATING STATEMENT TABLE CD-I5
Fiscal Year Ended September 30
Operating Revenues (.J 2006 2005 2004 2003 2002
Water Sales and Taps $ 7,539,449 $ 7,069,193 $ 6,158,999 $ 6,098,221 $ 5,979,239
Sewer Charges and Taps 4,886,837 4,670,660 4,293,315 3,929,514 3,909,737
Industrial Charges 133,474 161,330 137,014 155,960 144,859
Other 250,826 189,968 269,690 155,763 209,085
Total Revenues 12,810,586 12,091,151 10,859,018 10,339,458 10,242,920
Expenses 6,665,832 5,923,360 5,791,260 5,983,547 6,175,627
Net Revenue Available
for Debt Service $ 6,144,754 $ 6,167,791 $ 5,067,758 $ 4,355,911 $ 4,067,293
Annual Revenue
Bond Requirements $ 2,182,054 $ 2,182,496 $ 2,032,813 $ 2,022,356 $ 1,945,280
Coverage of Annual Revenue Bond
Requirements 2,82 x 2,83 x 2,49 x 2,15 x 2,09 x
Annual Requirements on all Bonds
Paid from System Revenues $ 3,575,423 $ 3,830,594 $ 3,834,728 $ 3,811,647 $ 2,815,135
Coverage of Annual Requirements
on all Bonds Paid from
from System Revenues 1.72 x 1.61 x 1.32 x 1.14 x 1.44 ^
Customer Count:
Water 9,803 9,865 9,941 10,153 10,121
Sewer 9,363 9,444 9,648 9,688 9,619
(a) Does not include Sanitation Billing Fees of $ 69,006 $ 69,700 $ 70,844 $ 73,017 $ 70,816
104
WATER RATES
(Rates Effective July 1, 2005)
Residential Class
TABLE CD-16
Meter Size
(Inches)
5/8" - 3/4"
I" 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
Service in Excess of Base
(For Each Additional
100 Cubic Feet)
$2.70 1100 Cubic Feet
$2.70/100 Cubic Feet
Commercial I Industrial Class
Meter Size
(Inches)
5/8" - 3/4"
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
Service in Excess of Base
(For Each Additional
100 Cubic Feet)
$2.70/100 Cubic Feet
$2.21/100 Cubic Feet
$2.21/100 Cubic Feet
I" . 2"
Larger than 2"
Commercial I Industrial Class
(Meters Greater Than Three Inches)
Meter Size
(Inches)
4
6
8 and Larger
Base Cost and Additional
Cubic Foot Charge
(Per 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
Service in Excess of Base
(For Each Additional
100 Cubic Feet)
$2.21/100 Cubic Feet
$2.21 / 100 Cubic Feet
$2.21 / 100 Cubic Feet
PRINCIPAL WATER CUSTOMERS - 2005-2006
TABLE CD-17
Name of Customer
Lamar Power Partners
Lamar County Water Supply
Campbell Soup
Paris Generation LP
Kimberly Clark
Sara Lee
Paris Regional Med. Center
MJC Water District
Paris Independent School District
Paris Junior College
FY 2006
Average Monthly
Consumption (Cu Ft.)
14,302,566
13,413,178
9,495,589
1,793,009
1,241,018
662,192
619,088
228,783
160,323
157,207
42,072,953
Product
Electric Utility
Water Utility
Soups, Juices, Sauces
Electric Utility
Diapers
Food
Medical Care
Water Utility
Education
Higher Education
Totals
105
FY 2006
Average
Monthly Bill
$ 24,479
90,945
90,615
20,231
27,606
16,958
14,696
5,146
5,680
3,617
$ 299,973
SEWER RA TES
(Rates Effective July I, 2005)
TABLE CD-I8
Residential Class
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
Service in Excess of Base
(For Each Additional
100 Cubic Feet)
$3.64/ 100 Cubic Feet
$3.64 / 100 Cubic Feet
Commercial Industrial Class
I" - 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
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
Meter Size
(Inches)
5/8" - 3/4"
Larger than 2"
PRINCIPAL SEWER CUSTOMERS - 2005-2006 TABLE CD-I9
FY 2006 FY 2006
Average Monthly Average
Name of Customer Product Consumption (Cu Ft.) Monthly Bill
Sara Lee Bakery Snack Cakes/Bread 662,192 $ 25,189
Paris Regional Med. Center Medical Care 426,375 17,295
Kimberly Clark Disposable Diapers 322,189 12,251
Paris Housing Authority Housing 161,348 6,201
Paris ISD Public Education 111,760 4,736
Paris Junior College Higher Education 102,058 4,301
R S Enterprises Car Wash 90,364 3,442
Lamar County Human Resources Multi-family Housing 83,283 3,173
Paris Nursing Home Long Term Care 77,171 2,941
Lamar County Courthouse Local Government 72,657 2,916
Totals 2,109,397 82,445 ,
106
OVERALL COMPLIANCE, INTERNAL CONTROLS
AND FEDERAL AND STATE A WARDS SECTION
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OVERALL COMPLIANCE, INTERNAL CONTROLS
AND FEDERAL AND STATE A WARDS SECTION
Tills 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-133, Audits of States, Local Governments,
and Non-Profit Organizations; and requirements of Agencies of the State of Texas.
107
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R. FRANK RAY, CPA
R. E. BOSTWICK, CPA
STEVEN W. MOHUNDRO, CPA
GEORGE H. STRUVE, CPA
ANDREW B. REICH, CPA
MCCLANAHAN AND HOLMES, LLP
CERTIFIED PUBLIC ACCOUNTANTS
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
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
Honorable Mayor and City Council
City of Paris, Texas
We have audited the accompanying fmancia1 statements of the City of Paris, Texas, as of and for the year ended
September 30, 2006, and have issued our report thereon dated January 4, 2007. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America and the standards applicable
to fmancial 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 fmancia1 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 perfonning 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' fmancial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts,
and grant agreements, noncompliance with which could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no
instances of noncompliance or other matters that are required to be reported under Govermnent Auditing Standards.
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. ci&wI~ J /WIM-0, Lll
Certified Public Accountants
Paris, Texas
January 4, 2007
108
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
City of Paris, Texas
Summary Schedule of Prior Audit Findings
Fiscal Year Ended September 30, 2006
F inding/Recornmendation
None
109
Current Status
City of Paris, Texas
Schedule of Findings and Questioned Costs
Fiscal Year Ended September 30,2006
Section I - Summary of Auditor's Results
Financial Statements
Type of auditors' report issued: Unqualified
Internal control over financial reporting:
Material W eakness( es) identified?
_yes ~no
Reportable condition( s) identified that are not considered to be
material weakness( es)?
_ yes -X- none reported
Noncompliance material to financial statements noted?
_ yes ..JL no
Federal Awards
Internal control over major programs:
Material weakness( es) identified?
_ yes ..JL no
Reportable conditions( s) identified that are not considered to be
material weakness( es)?
_ yes -L none reported
Type of auditors' report issued on compliance for major programs: Unqualified
Any audit findings disclosed that are required to be reported in accordance
with Section 51O(a) of Circular A-133? _ yes -L no
Identification of major programs:
CFDA Number{s)
Name of Federal Program or Cluster
16.579
Regional Controlled Substance Apprehension Program
14.239
HOME Program - Homebuyer Assistance
Dollar threshold used to distinguish between type A and type B programs: $300,000
Auditee qualified as low-risk auditee?
_ yes ..JL no
Section II - Financial Statement Findings
None
Section III - Federal Award Findings and Questioned Costs
None
110
City of Paris, Texas
Corrective Action Plan
Fiscal Year Ended September 30, 2006
Not Applicable
111
MCCLANAHAN AND HOLMES, LLP
CERTIFIED PUBLIC ACCOUNTANTS
228 SIXTH STREET, S.E.
PARIS, TEXAS 75460
903.784.4316
FAX 903-784.431 0
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, 2006. The City's major federal programs are
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 programs
is the responsibility of the City's management. Our responsibility is to express an opinion on the City's compliance
based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States
of America; the standards applicable to [mancial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-
Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that
could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test
basis, evidence about the City's compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Our audit does not provide a legal determination 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 programs for the year ended September 30, 2006.
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.
112
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.
fik C{cf;lAfiLtW( oJ Ji~W1/ LLI
Certified Public Accountants
Paris, Texas
January 4, 2007
113
McCLANAHAN AND HOLMES, LLP
City of Paris, Texas
Schedule of Expenditures of Federal A wards
Year Ended September 30, 2006
Federal Grantor/Pass-Through Grantor/Program Title
Federal
CFDA
Number
Project
Number
Expenditures
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 $ 261,173
U.S. Department of Housing and Urban Development
Passed Through Texas Department of Housing and and Cormnunity Affairs:
HOME Program - Homebuyer Assistance 14.239 542041 112,500
U.S. Department of Justice
Direct Program:
Local Law Enforcement Grants Program 16.592 2003-LB-BX-1214 621
Edward Byrne Memorial Justice Assistance 16.738 2006-DJ-BX-0249 11,7 56
Grant Program 2005-DJ-BX-OI02 49,865
Total CFDA Number 61,621
Total Direct Program 62,242
Passed Through Texas Criminal Justice Division:
Regional Controlled Substance Apprehension Program
10-1-05 to 3-31-06 16.579 PI-04-AIO-13854-07 335,246
Violent Crimes Against Women
9-1-05 to 8-31-06 16.588 WF-05- V30-13420-08 71,937
Total Passed Through Texas Criminal Justice Division 407,183
Total U.S. Department of Justice 469,425
Total Expenditures of Federal Awards $ 843,098
114
City of Paris, Texas
Notes on Accounting Policies for Federal Awards
Year Ended September 30, 2006
Note 1: 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 financial statements.
During the year, Federal awards did not include non-cash assistance or insurance. At year end, there were no loans
or loan guarantees.
115
City of Paris, Texas
HOME Program - Home Buyers Assistance
Schedule of Revenues and Expenditures
Year Ended September 30, 2006
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 1 % 1/03 - 09/30/05
Variance
A ward Prior Current Favorable
Budget Year Year Total (Unfavorable)
Revenues:
Federal $ 312,000 $ 120,250 $ 112,500 $ 232,750 $ (79,250)
Local 25,000 19,000 16,125 35,125 10,125
Total Revenues 337,000 139,250 128,625 267,875 (69,125)
Expenditures:
Federal
Home Buyer Assistance 300,000 120,250 112,500 232,750 67,250
Administration 12,000 12,000
Local 25,000 19,000 16,125 35,125 (10,125)
Total Expenditures 337,000 139,250 128,625 267,875 69,125
Excess Revenues
Over Expenditures $ $ $ $ $
116
City of Paris, Texas
1999 Housing Infrastructure Fund Program
Schedule of Revenues and Expenditures
Year Ended September 30, 2006
Federal Financial Assistance
Federal Grantor: United States Department of Housing and Urban Development
Pass Through Grantor: Office of Rural Community Affairs
CPDA Number 14.228
Project Number 719068
Contract Period 09/1 0/99 - 03/10107
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
Clearance/Demo1ition 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 $ $ $ $ $
117
R. FRANK RAY, CPA
R. E. BOSTWICK, CPA
STEVEN W. MOHUNDRO, CPA
GEORGE H. STRUVE, CPA
ANDREW B. REICH, CPA
MCCLANAHAN AND HOLMES, LLP
CERTIFIED PUBLIC ACCOUNTANTS
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
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
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, 2006. The City's major state programs are
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 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 fmancia1 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
materi'a1 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, 2006.
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.
118
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 information 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.
)11vC/;tt14!Ai~' av.,1 /1 JvUt; / LeI
Certified Public Accountants
Paris, Texas
January 4,2007
119
McCLANAHAN AND HOLMES, LLP
City of Paris, Texas
Surmnary Schedule of Prior Audit Findings
Fiscal Year Ended September 30,2006
F indingIRecommendation
Schedule Reference Number: 2005-1
Condition Found: Expenditures charged to this grant included charges for
vaccines which are unallowable per grant contract.
Recormnendation: Responsible person to watch grant expenditures and
not charge unallowable expenditures to grant.
120
Current Status
Corrective action
completed
City of Paris, Texas
Schedule of Findings and Questioned Costs
Year Ended September 30, 2006
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 financial 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:
Grantor's Number{s)
Name of State Program or Cluster
7560022067-2006
ACFH/PHC
OPHP/LPHS
IMMlLOCALS
RLSS/LPHS
CHSIPHC
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
III - State A ward Findings and Questioned Costs
None
121
_yes ~no
_ yes -L none reported
_yes -Lno
_yes ~no
_ yes ~ none reported
_yes ~no
_ yes ..-X- no
. .I
City of Paris, Texas
Corrective Action Plan
Fiscal Year Ended September 30, 2006
Not Applicable
122
City of Paris, Texas
Schedule of Expenditures of State A wards
Year Ended September 30,2006
Program Title Grantor's Number Expenditures
Texas Department of Health
IMM/LOCALS 75-60022067-2005 $ 1,805
ACFH/PHC 75-60022067-2006 125,249
OPHP/LPHS 79,430
IMM/LOCALS 45, 104
CHS/PHC 75-60022067 -2007 10,863
RLSS/LPHS 22,829
IMM/LOCALS 5,474
ACFH/FEE 75-60022067 A-2006 14,671
75-60022067-2005 1,669
75-60022067-2007 778
Total Texas Department of Health 307,872
Texas Automobile Theft Prevention Authority
Northeast Texas Automobile Theft Task Force SA- TO 1-1 0062-06 82,348
Northeast Texas Automobile Theft Task Force SA - TO 1-1 0062-07 3,490
Total Texas Automobile Theft Prevention Authority 85,838
Texas Department of Transportation
Statewide Transportation Enhancement Program CSJ:090 1- 29-017 158,054
RAMP Grant M601PARIS 8,849
Total Texas Department of Transportation 166,903
Texas State Library and Archives Commission
Lone Star Libraries 442-06368 5,141
Texas Historical Commission
Historical Resources Survey Update TX-04-19345-034 5,700
Historical Resources Survey, Phase II TX-05-036 7,356
Total Texas Historical Commission 13,056
Total Expenditures of State A wards $ 578,810
123
City of Paris, Texas
Notes On Accounting Policies For State Awards
Year Ended September 30, 2006
N ote1: 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.
124