C.A.F.R., FY 2011-12COMPREHENSIVE ANNUAL FINANCIAL
REPORT
FOR
CITY OF PARIS, TEXAS
For the Fiscal Year Ended September 30, 2012
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Prepared By
Finance Department
W.E. Anderson, Director
City of Paris, Texas
Comprehensive Annual Financial Report
For the Fiscal Year Ended September 30, 2012
TABLE OF CONTENTS
INTRODUCTORY SECTION
Page
Letter of Transmittal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Certificate of Achievement for Excellence in Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
City of Paris Organizational Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
List of Elected and Appointed Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
FINANCIAL SECTION
Independent Auditors'Report ..........................................................
Management's Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic 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:
SpecialRevenue Fund ............................................................
Health DepartmentFund ..........................................................
DebtService Fund ...............................................................
CapitalProjectsFund .............................................................
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statement
1
3
12 1
14 2
16 3
17 4
19 5
20 6
22 7
24 8
25 9
27 -
Schedule
60 1
62 2
63 3
64 4
65 5
66 6
67 7
68 8
70 9
City of Paris, Texas
Comprehensive Annual Financial Report
For the Fiscal Year Ended September 30, 2012
TABLE OF CONTENTS (Continued)
STATISTICAL SECTION
Page
Financial Trends
Net Assetsby Component ........................................................... 71
Changesin Net Assets .......................................... ................... 73
Fund Balances of Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Changes in Fund Balances of Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Revenue Capacity
Property Tax Leviesand Collections ................................................... 81
Property Tax Rates - All Direct and Overlapping Governments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Assessed and Estunated Actual Value of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
PrincipalProperty Taxpayers ........................................................ 86
Debt Capacity
Ratio of Net General Obligation Bonded Debt to Assessed Value and
Net General Obligation Bonded Debt Per Capita . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratio of Outstanding Debt by Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct and Overlapping Governmental Activities Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Debt Margin Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revenue Pledged Coverage - Water and Sewer Revenue Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88
89
91
92
93
Demographic and Economic Information
Demographic and Economic Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Princi al Em lo ers Ma'or Em lo ers . . . . . . . . . . . . . . . . . . . 95
P P Y i J P Y) ............................
Operating Information
Operating Indicators by Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Capital Asset Statistics by Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • • • • • ' ' ' ' � � 00
Building Permits at Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Full-Time Equivalent City Government Employees by Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
CONTINUING DISCLOSURE INFORMATION (Unaudited)
Continuing Disclosure Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Table
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6
7
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City of Paris, Texas
Comprehensive Annual Financial Report
For the Fiscal Year Ended September 30, 2012
TABLE OF CONTENTS (Continued) PaQe
OVERALL COMPLIANCE, INTERNAL CONTROLS,
AND FEDERAL AWARDS SECTION
Federal:
Report on Internal Control Over Financial Reporting and on Compliance and Other
Matters Based on an Audit of Financial Statements Performed in Accardance with
Government Auditing Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Summary Schedule of Prior Audit Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Schedule of Findings and Questioned Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Corrective Action Plan ............................................................. 116
Independent Auditor's Report on Compliance with Requirements that Could Have a
Direct and Material Effect on Each Major Program and on Internal Control Over
Compliance in Accordance with OMB Circular A-133 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Schedule of Expenditures of Federal Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Notes on Accounting Policies for Federal Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Supplemental Schedules of Federal Revenues and Expenditures:
Special Supplemental Food Program for Women, Infants, and Children . . . . . . . . . . . . . . . . . . . 122
Brownfields Assessment Cleanup Cooperative Agreement Grant Program . . . . . . . . . . . . . . . . . . . . 123
Community Development Block Grants/Entitlement Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
INTRODUCTORY SECTION
March 19, 2013
Mayor A. J. Hashmi
and Members of the City Council
City of Paris, Texas
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Dear Mayor and Council Members:
I am pleased to submit the Comprehensive Annual Financial Report of the City of Paris, Texas, (the City) for the
fiscal year ended September 30, 2012.
The City of Paris is a fmancial reporting entity as defined 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 financial reporting entity includes all the funds of the primary government and its component
unit, the Paris Economic Development Corporation. More information about PEDC can be found in foomote I.A.
which deals with reporting entity topics. There are no other potential component units.
The primary purpose of this report is to provide the City Council, citizens, financial community, and others with
detailed information concerning the financial 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 financial
section of the report. In addition, this report provides assurance that the City presents fairly its financial position as
verified by independent auditors.
THE COMPREHENSNE ANNUAL FINANCIAL REPORT
The Comprehensive Annual Financial Report of the City of Paris, Texas, for the fiscal year ended September 30,
2012, which follows, was prepared by the Finance Depariment. The financial statements have been audited by
McClanahan and Holmes, LLP, CPAs, whose report is included herein. Thi� :.�:dit 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.
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P.O. BOX 9037 • PARIS, TEXAS 75461-9037 •(9031 785-7511 • FAX (903) 785-8519
The City Finance Depariment 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.
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 four parts:
The Introductory Section includes an organizational chart, list of elected and appointed officials,
and this transmittal letter, which highlights significant aspects of the financial 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 fmancial 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 eleven tables of financial information
required by the United States Securities and Exchange Commission Rule 15c2-12. These tables
provide investors with updated information on all municipal bond issues sold after July 3, 1995.
The Notes to the Financial Statements are provided in the Financial Section and are considered essential to fair
presentation and adequate disclosure for this financial report. The notes include the Summary of Significant
Accounting Policies for the City and other necessary disclosures of important matters relating to the financial
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 2010 census is 25,171, a decrease of 2.80% from the 2000 census of
25,898. The City has doubts about the accuracy of the census count within its limits.
Lamar County (the County) is located in northeast Texas and borders the State of Oklahoma. The County, which is
situated beriveen 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 201C :;ensus is 49,793, an increase of 2.66% over
the 2000 census of 48,499.
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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. It complements the City's 130 doctors and 21 dentists that provide a wide range of general and
special medicalservices.
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 of 300 pounds per square inch. Telephone service is
provided by AT &T.
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 enrollment of these entities is 12,865.
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 Sam Bell Maxey House, the A.M. Aikin Archives, Red River Valley Exposition, and the
Lamar County Historical Society Museum.
Also, the City has 3 18-hole golf courses, 4 private and 1 public swimming pools, 26 tennis courts, 3 walk/jog
tracks, a sports complex, and 24 public park areas.
Government Organization
The City was founded in 1839 with the cunent charter adopted in November of 1948. The City operates under the
CounciUManager 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 can serve a maacimum of
three consecutive 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 2012-2013 reflect a 2.02% increase over the 2011-2012 values. Building
permits for new residential and commercial construction totaled $8,596,610 for fiscal year 2011-12. This activity
should be reflected in next year's taacable values.
Sales taxes for 2011-12 decreased from the prior year by 0.65%. This decrease is consistent with the expected flat
sales tax revenues due to the recovering local economy. Current rebates are 2.69% above the 2011-12 rebates
through March 2013.
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Hotel occupancy taxes were up 3.06% compared to 2010-11 taaces. Collection efforts on the delinquent taxes of two
hotels have resulted in 2012-13 total collections being up 24.7% through January 2013.
Franchise fees increased 0.42% over the previous year. This area is a major source of revenue to the City and is
aggressively guarded by City officials.
The City of Paris, Paris Economic Development Corporation, and Lamar County Chamber of Commerce have been
actively recruiting new business to the area as well as supporting already existing businesses. 2012 saw the
announcement that J. Skinner Baking Company was moving to Paris, bringing jobs and tax revenue to the City.
Likewise, Kimberly-Clark Corporation and Campbell Soup Company announced major capital investments in their
existing Paris facilities.
General Fund receipts equaled 98.95% of budget. This shortfall of revenues was caused by slightly lower than
anticipated collections on franchise taxes, ad valorem taxes, and interest earnings. General Fund expenditures were
only 96.05% of budget with the Parks and Street Deparhnents being the biggest under spenders of their budgets.
For the 2012-13 fiscal year, the City Council adopted a tax rate of .51107 cents per $100 of value. This is a
decrease of 1.72% in the rate from the previous year. This rate allows maintaining all services at their current
levels or above and funds the interest and sinking funds for the certificates of obligation issued in 2002, 2003, and
2010. It should be noted that the City refunded the 2002 and 2003 debt issues for savings in November 2012.
Long-term Financial Planning and Relevant Financial Policies
The City is in the process of developing and a new long-range financial plan given the substantial refunding of its
outstanding debt for savings that occuned in February 2010 and November 2012. The City gained $1,993,902 in
total debt service savings from the 2010 refunding and $582,380 from the 2012 refunding. The City formalized a
key financial policy in 2010 that had been informally followed previously: a utility rate maintenance policy. The
utility rate maintenance policy will help assure the fmancial integrity of the enterprise fund along with its related
interest and sinking funds. Another policy expected to be formalized in 2013 is a reserve level guideline for both the
general fund and utility fund. Adequate reserve levels provide the City with the ability to deal with extraordinary
events and maintain its credit worthiness. This credit worthiness, as reflected in the current financial statements,
allowed the City to obtain very favorable interest rates on the refunding bonds referenced above.
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 is working on a new long range plan to maintain its infrastructure
with an anticipated completion date of May 2013. In anticipation of the new long range plan, the City has called for
a general obligation bond election in May 2013 in the amount of $45,000,000. Proceeds from these bonds would be
used for water and sewer infrastructure improvements and be paid for out of utility system revenues. With the
payoff of earlier debt issues, it will not be necessary to raise utility rates to fund the new debt.
The City also continues to expand its effort in law enforc�ment related areas. Specifically, the City has targeted
auto theft and the public schools. Programs in this effort include the Auto Theft Task Force and school resource
officers at various schools. One other continuing law enforcement effort is to upgrade equipment through Justice
Assistance grants.
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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 Historic Preservation Committee is working with local properiy owners to
maintain the historical character of the City. In addition, the City has created a City Planner position to formulate
long range plans for city development.
Other Financial Information
The fmancial statements of the City of Paris, Texas, have been prepared in conformity with generally accepted
accounting principles as applied to governmental units. The Governmental Accounting Standards Board is the
accepted standard-setting body for establishing governmental accounting and 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 financial statements, major fund financial statements, notes to the
financial statements, and other required supplementary information.
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. 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.
Between 30 days and 90 days prior to the beginning of each fiscal year, the City Manager submits to the City
Council a proposed budget for the fiscal year beginning on the following October 1. The operating budget, which
represents the financial plan for the ensuing fiscal year, includes proposed expenditures and the means of financing
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 27�' day of the last month prior to the beginning of the fiscal year. Generally, appropriations are legally
adopted at the deparhnent level. Budgetary controls are maintained at the major category of expenditure level
within each operating division. All anticipated expenditures are budgeted for control purposes. Capital project
funds are appropriated on a project by project basis. Expenditures and/or expenses are directly monitored by the
City Council.
Internal Controls
' Internal accounting controls are designed to provide reasonable, but not absolute, assurance of the safeguarding of
' assets against loss from unauthorized use or disposition and reliable financial records for preparing financial
: 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.
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All internal control evaluations occur within this framework. The Finance Deparhnent'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 of 9-30-12:
Moody's
Tax Revenue Final Investors
Issue Supported Supported Maturity Rating Insured
2002 Tax & Rev. C. O.
2003 G. O. Refunding Bonds
2010 Tax & Rev. C. O.
2010 G. O. Refunding Bonds
Total
$ 3,735,000 $ - 12-15-21 Aa3
945,600 1,024,400 12-15-14 Aa3
2,900,000 - 12-15-29 Aa3
3,170,000 6,740,000 06-15-20 Aa3
$10,750,600 $ 7,764,400
The City had no lease/purchase agreements outstanding as of September 30, 2012, but did enter into a$37,735
lease/purchase agreement in February 2013. The lease agreement had no bank qualified provision.
Independent Audit
The City Charter requires an annual audit to be made of the accounts, financial 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.
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 financial report
for the fiscal year ended September 30, 2011. This was the sixteenth consecutive year that the government has
achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government unit must
publish an easily readable and efficiently organized comprehensive annual fmancial report. This report 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 comprehensive annual
fmancial report continues to meet the Certificate of Achievement Program's requirements, and we are submitting it
to the GFOA to determine its eligibility for another certificate.
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Acknowledgments
The preparation of this report could not have been accomplished without the full support and efficient and dedicated
efforts of tt►e entire staff of the Finance Department and the competent services of the independent auditors,
McClanahan and Holmes, LLP, CPAs. I express my appreciation to ali members of the Finance Deparhnent who
assisted and contributed to the completion of this report and to all City deparhnents involved in the preparation of
information for this report. In addition, I express my appreciation to the Mayor, City Council, and City Manager for
their continuing interest and support in planning and conducting the fmancial affairs of the City in a responsible and
progressive manner.
Respectfully submitted,
�,�. �'_ C.
W. E. Anderson
Director of Finance
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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, 2011
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
govemment units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
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CITY OF PARIS ORGANIZATIONAL CHART
CITIZENS OF PAIUS
CITY A7TORNEY CITY COUNC7L MUNICIPAL JUDGE
CITY MANAGER MUNICIPAL COUR7
PLANNING,
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DEVELOPMENT
AiRPORT COMMUNITY gNGINEERIIiG
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DI57RIBU710N COLLECTION AO.W.
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SANITATION SfREETS/}IIGHWAYS GARAGE
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C
City of Paris, Texas
List of Elected and Appointed Officials
Elected Officials
A. J. Hashmi - Mayor
Richard Grossnickle - Mayor Pro-Tem
Cleonne Drake
Matt Frierson
Aaron Jenkins
Billie Lancaster
John Wright
Appointed Officials
John Godwin — City Manager
W. E. Anderson — Finance Director
Shawn Napier — Engineering, Planning and Development Director
Doug Harris - Utilities Director
Bob Hundley - Police Chief
Ronnie Grooms - Fire Chief
Tom E. Hunt, III — Presiding Municipal Court Judge
Priscilla McAnally — Library Director
Kent McIlyar — City Attorney
Janice Ellis — City Clerk
Ron Sullivan — Public Works Director
I-10
FINANCIAL SECTION
R. E. BOSTWICK, CPA
STEVEN W.MOHUNDRO,CPA
GEORGE H. STRUVE, CPA
ANDREW B. REICH, CPA
RUSSELL P. WOOD, CPA
DEBRA J. WILDER, CPA
McClanahan and Holmes, LLP
CERTIFIED PUBLIC ACCOUNTANTS
228 SIXTH STREET S.E.
PARIS, TEXAS 75460
903-784-4316
FAX 903-784-4310
304 WEST CHESTNUT
DENISON, TEXAS 75020
903-465-6070
FAX 903-465-6093
1400 WEST RUSSELL
Unqualified Opinions on Financial Statements BONHAM, TEXAS 75418
903-583-5574
Accompanied by Required Supplementary Information FAX 903-583-9453
And Supplementary Information
Inde�endent 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, 2012, which collectively
comprise the City's financial statements as listed in the table of contents. These financial statements are the
responsibility of the City of Paris, Texas' management. Our responsibility is to express opinions on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial
position of the governmental activities, the business-type activities, the discretely presented component unit, each major
fund, and the aggregate remaining fund information of the City of Paris, Texas, as of September 30, 2012, and the
respective changes in financial position and cash flows, where applicable, and the respective budgetary comparison for
the General Fund, thereof for the year then ended in conformity with accounting principles generaily accepted in the
United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated March 19, 2013, 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, grant agreements and other matters. The purpose of that report is
to describe the scope of our testing of internal control over financial reporting and compliance and the results of that
testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards and should be considered in
assessing the results of our audit.
Accounting principles generally accepted in the United States of America require that the management's discussion and
analys. mmediately following this report be presented to supplement the basic financial stateme� ':. Such information,
although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who
considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
Honorable Mayor and City Council
City of Paris, Texas
Page 2
methods of preparing the information and comparing the information for consistency with management's responses to
our inquiries, the basic fmancial statements, and other know(edge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the limited procedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
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 accompanying combining and individual fund statements and schedules,
schedule of expenditures of federal awards (as required by the U.S. Office of Management and Budget Circular A-133,
Audits of States, Local Governments, and Non-Proftt Organizations) and the supplemental schedules of federal
revenues and expenditures, are presented for purposes of additional analysis and are not a required part of the financial
statements. Such information is the responsibility of management and was derived from and relates directly to the
underlying accounting and other records used to prepare the financial statements. The information has been subjected
to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to prepare the
financial statements or to the financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the combining and individual
fund statements and schedules, the schedule of expenditures of federal awards and the supplemental schedules of federal
revenues and expenditures are fairly stated in all material respects in relation to the financial statements as a whole.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the
City of Paris's financial statements. The introductory, statistical sections, and continuing disclosure information are
presented for the purposes of additional analysis and are not a required part of the basic financial statements. Such
information has not been subjected to the auditing procedures applied in the audit of the basic fmancial statements, and
accordingly, we do not express an opinion or provide any assurance on it.
Paris, Texas
March 19, 2013
� �,���, �
Certified Public Accountants
2
AMERICAN INSTITUTE OF CERTIFIED PUBIIC ACCOUNTANTS
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Paris (the City), we offer readers of the City of Paris, Texas' financial
statements this narrative overview and analysis of the financial activities of the City of Paris for the fiscal
year ended September 30, 2012. 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.
Financial Highlights of the Primary Government
• The City maintained its tax rate of 0.52 per $100 of valuation for fiscal year 2011-12. This is the fourth
consecutive year at this rate. The City has lowered its rate four times since the 2003-04 fiscal year when
the tax rate was 0.695. For the upcoming 2012-13 fiscal year, the City lowered its tax rate to .51107 per
$100 of valuation or a 1.71% decrease. The City has accomplished this 18.39 cent tax rate reduction by
strict review of its operational needs and increases to the taxable value of property within the City. The
City was able to maintain the $0.52 tax rate despite a 9.28% decrease in local sales taxes in the 2009-10
fiscal year caused by the United States economic recession. The City has recovered 25.10% of that initial
drop in sales taxes as of September 30, 2012.
• The number of budgeted positions dropped from a peak of 369 in fiscal year 2002-03 to 322 in fiscal year
2009-10. This reduction of 47 positions was also part of an operational review and represents a significant
and annually repeating savings to the City. Two positions were added in fiscal year 2010-11 and 1.5
positions were added in 2011-12, bringing the total City employees to 325.5.
• City-wide revenues this year exceeded City-wide expenses by $3,308,597 compared to $2,321,372 last
year. The City has made a concentrated effort to reduce expenses plus seeking new sources of revenue and
protecting its existing revenue sources.
• The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $ 88,651,725
(net assets) an increase of $3,308,597 or 3.87% over the previous year amount of $85,343,128. The most
important factor in this change was the decrease of long-term debt. Of the amount known as net assets,
$21,197,755 (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 fiznd balances of
$17,861,144 compared to $16,759,950 the previous year. This amounts to an increase of $1,101,194 or
6.57%. This increase was due primarily to an increase in the cash and investments in all of the
governmental funds and decreased outstanding debt. Unassigned fund balance is available for spending at
the government's discretion.
• At the end of the fiscal year, unassigned fund balance for the general fund was $11,764,593 or 5235% of
total general fund expenditures. The prior year unassigned fund balance was $12,156,169 or 57.15% of
general fund expenditures. General fund expenditures were up $1,012,746 or 4.71% while the unassigned
fund balance decreased due to the jump in general fund expenditures compared to the $294,642 (1.39%)
increase in general fund revenues.
• The City's non-current liabilities decreased by $2,878,662 or 1436% during the current fiscal year due to
reduction in long-term debt.
• Total charges for services for the City were $19,112,759 compared to $18,808,783 the previous year. This
represents a 1.61% increase in charges over the previous year with all charge centers contributing to the
increase. Operating/capital grants and contributions were $1,942,361 compared to $2,159,259 the previous
year. This decrease was due to decreased contributions from public works and general government.
General revenues were $18,908,728 compared to $17,503,660 the previous year. This increase was due to
significant contribution income. Property taxes, sales taxes, and franchise taxes were essentially flat
compared to the previous year. The delinquent hotel taxes from the previous year were collected in
2011-12, resulting in a$49,454 (11.00%) increase in collections.
• Transfers from business-type activities to governmental activities and from governmental activities to
business-type activities occurred during the year in the net amount of $3,486,508. This included
administrative and franchise fees transferred from business-type activities :o governmental activities.
• City-wide liabilities decreased $4,763,269 from $26,407,770 to $21,644,SOL This amounted to 18.03%.
Long-term debt was the single factor most affecting this change.
• City-wide expenses increased $504,921 (139%), going from $36,150,330 to $36,655,251 with slight
increases in both governmental activities and business-type activities.
• The ratio of net assets to expenses was 241.85% for the year 2011-12 and 236.07% for the year 2010-11.
The decrease in non-current debt was the major factor in this improvement. Unrestricted net assets
changed to $21,197,755 in 2011-12 from $24,217,521 in 2010-11, a decrease of 12.46% reflecting the
increase in restrictions for construction projects.
• The ratio of City-wide net assets restricted for debt service to total expenditures was 7.63% for the year
2011-12 and 9.47% for the year 2010-11. Debt restricted net assets were lower in 2011-12 and total
expenses were up for the same period.
• Net long-term debt to assets, a measure of solvency, was 18.13% in 2011-12 and 22.02% in 2010-11.
Decreasing debt was the primary cause of this change.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City's basic financial statements.
The City's basic financial statements comprise three components: 1) government-wide fmancial statements,
2) fund financial statements, and 3) notes to the financial statements. This report also contains other
supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the
City's finances, in a manner similar to a private-sector business.
The statement of net assets presents information on all of the City's assets and liabilities, with the difference
between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful
indicatar of whether the financial position of the City of Paris is improving or deteriorating.
The statement of activities presents information showing how the government's net assets changed during the
most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to
the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in
this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes
and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City of Paris that are
principally supported by taxes and intergovernmental revenues (governmental 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 information for this component unit is reported separately from the
financial information presented for the primary government itself.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City 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 financial statements. However, unlike the government-wide financial statements,
governmental fund fmancial 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 governmental activities in the government-wide financial statements. By doing so, readers may better
understand the long-term impact of the government's near-term financing decisions. Both the governmental
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 9 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 6 govemmental 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 basic governmental fund financial statements can be found immediately after the Independent Auditors'
Report.
Proprietary Funds
The City of Paris maintains only one type of proprietary fund. An enterprise fund (the type used by the City)
is used to report the same functions presented as business-type activities in the government-wide financial
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 basic 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 financial statements. The notes to the financial statements can be found
immediately after the statement of cash flows-proprietary funds in this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required
supplementary information concerning the City's progress in funding its obligation to provide pension
benefits to its employees. Required supplementary information can be found in Note V. in Notes to the
Financial Statement Section.
Combining and individual fund statements and schedules can be found immediately after the notes to the
financial statements in this report.
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 $88,651,725 at the close of the most recent fiscal
year. This compares to $85,343,128 for the previous year. The ;egular pay down of long-term debt accounts
for most of this increase.
By far the largest portion of the City's net assets ($62,031,999 or 69.97%) 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's
investment in its capital assets is reported net of related debt, it should be noted that the resources needed to
repay this debt must be provided &om other sources, since the capital assets themselves cannot be used to
liquidate these liabilities.
Assets
Current & Other Assets
Capital Assets
Total Assets
Long-term Liabilities
Outstanding
Other Liabilities
Total Liabilities
Net Assets
Invested in Capital Assets
Net of Related Debt
Restricted
Unrestricted
Total Net Assets
Net Assets
Governmental Activities Business-type Activities Total
2011 2012 2011 2012 2011 2012
$ 18,329,557 $ 19,567,236 $ 12,366,088 $ 9,535,649 $ 30,695,645 $ 29,102,885
37,417,751 38,529,519 43,637,502 42,663,822 81,055,253 81,193,341
55,747,308 58,096,755 56,003,590 52,199,471 111,750,898 110,296,226
12,905,470 11,851,545 11,706,684 8,150,798 24,612,154 20,002,343
770,754 590,127 1,024,862 1,052,031 1,795,616 1,642,158
13,676,224 12,441,672 12,731,546 9,202,829 26,407,770 21,644,501
25,311,134 27,532,353 31,855,910 34,499,646 57,167,044 62,031,999
3,958,563 5,421,971 - - 3,958,563 5,421,971
12,801,387 12,700,759 11,416,134 8,496,996 24,217,521 21,197,755
$ 42,071,084 $ 45,655,083 $ 43,272,044 $ 42,996,642 � 85,343,128 $ 88,651,725
An additional portion of the City's net assets ($5,421,971 or 6.11%) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestxicted net assets ($21,197,755
or 23.91%) may be used to meet the government's ongoing obligations to citizens and creditors.
The increase in restricted net assets was primarily due to the addition of the amount set aside for construction.
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's net assets by $3,583,999 (8.51%) during the current fiscal year.
This increase resulted mainly from increases in non-building improvements, the net pension asset, and
reduction of both accounts payable and long-term debt. Total governmental revenues were up only $24,958
with general revenues essentially flat with a$7,816 decrease and program revenues also flat with a$32,774
increase.
Property Taxes
Sales Tatces
Franchise Taxes
Hotel Occupancy Taxes
Unrestricted Investment Eamings
2011
$ 7,620,281
6,� ;,469
2,719,496
258,561
84,327
$ 16,716,134
General Revenues
2012
$ 7,619,472
5,993,859
2,731,097
498,667
55,875
$ 16,898,970
mcrease
(Decrease)
$ (809)
(39,610)
11,601
240,106
(28,452)
$ 182,836
The following table provides a summary of the City's operations for the years ending 2011 and 2012 for both
governmental and business-type activities.
Changes in Net Assets
Revenues
Program Revenues:
Charges for Services
Operating Grants
and Contributions
Capital Grants
and Contributions
General Revenues:
Property Taxes
Sales Taxes
Franchise Ta�ces
Hotel Occupancy Taxes
Unrestricted
Investment Earnings
Other
Total Revenues
Expenses
General Government
Finance
Public Safety
Public Works
Health
Library Service
Cox Field
Interest on
Long-term debt
Water & Sewer
Total Expenses
Governmental Activities Business-type Activities
2011 2012 2011 2012
$ 5,010,646 $ 5,260,318 $ 13,798,137 $ 13,852,441
1,953,631 1,305,387 -
205,628 636,974 -
7,620,281
6,033,469
2,719,496
449,213
7,619,472
5,993,859
2,731,097
498,66'7
Total
2011 2012
$ 18,808,783 $ 19,112,759
1,953,631 1,305,387
- 205,628 636,974
- 7,620,281 7,619,472
- 6,033,469 5,993,859
- 2,719,496 2,731,097
_ 449,213 498,667
84,327 55,875 162,374 63,722 246,701 119,597
- 1,642,126 434,500 303,910 434,500 1,946,036
24,076,691 25,743,775 14,395,011 14,220,073 38,471,702 39,963,848
2,890,290
437,320
9,880,712
7,667,367
3,202,551
719,240
220,027
2,094, I 10
480,144
10,771,351
7,568,269
3,416,360
712,033
261,463
2,890,290
437,320
9,880,712
7,667,367
3,202,551
719,240
220,027
2,094,110
480,144
10,771,351
7,568,269
3,416,360
712,033
261,463
438,460 342,554 - - 438,460 342,554
_ - 10,694,363 11,008,967 10,694,363 11,008,967
25,455,967 25,646,284 10,694,363 11,008,967 36,150,330 36,655,251
Increase (Decrease) in
Net Assets Before Transfers (1,379,276) 97,491 3,700,648 3,211,106 2,321,372 3,308,597
Transfers/SpecialItem 764,880 3,486,508 (764,880) (3,486,508) - -
Increase (Decrease) in
Net Assets (614,396) 3,583,999 2,935,768 (275,402) 2,321,372 3,308,597
Balance Beginning of Year 42,685,480 42,071,084 40,336,276 43,272,044 83,021,756 85,343,128
Balance End ofYear $ 42,071,084 $ 45,655,083 $ 43,272,044 $ 42,996,642 $ 85,343,128 $ 88,651,725
Business-type Activities
Business-type activities decreased the City's net assets by $275,402. This decrease was caused primarily by
transfers to governmental activities including administrative fees to the general fund, franchise payment to the
general fund, and funding of the capital projects fund for utility related capital items. See foofiote IV. E. for
details of interfund transfers.
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.
7
Governmental Funds
The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing the City's 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:
Nonspendable:
Inventory
Perm. Fund Principal
Restricted for:
Debt Service
Capital Projects
Notes
Law Enforcement
Health
Assigned:
Library
Community Development
Unassigned:
General Fund
Total Fund Balances
Total Liabilities and
Fund Balances
Governmental Funds
2011 2012
$ 18,253,551
$ 1,493,601
199,519
88,520
3,426,387
95,900
132,367
215,389
123,249
322,450
12,156,169
16,759,950
$ 18,253,551
$ 19,322,332
$ 1,461,188
218,117
89,632
2,797,611
1,999,980
92,216
140,953
301,579
126,182
330,281
11,764,593
17,861,144
$ 19,322,332
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund
balances of $17,861,144. Approximately 65.86% of this total amount ($11,764,593) constitutes unassigned
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 is non-spendable, restricted, or
assigned to 1) permanent fund principal ($89,632), 2) pay debt service ($2,797,611), 3) outstanding notes
($92,216), 4) inventory ($218,117), 5) law enforcement ($140,953), 6) health ($301,579), 7) library
($126,182), 8) community development ($330,281), and 9) capital projects ($1,999,980).
Governmental Funds
Revenues, Expenditures, and
Changes in Fund Balances
2011 2012
Revenues $ 23,848,441 $ 24,146,255
Expenditures 25,838,176 26,550,168
Excess (Deficiency) of Revenues
Over (Under) Expenditures (1,989,735) (2,403,913)
Total Other Financing Sources 764,881 3,486,508
Net Increase (Decrease) in Fund Balances (1,224,854) 1,082,595
(Decrease) Increase in Inventory (15,414) 18,599
Fund Balances - Beginning 18,000,218 16,759,950
Fund Balances - Ending $ 16,759,950 $ 17,861,144
General Fund
The general fund is the chief operating fund of the City of Paris. At the end of the current fiscal year,
unassigned fund balance of the general fund was $11,764,593 ($12,156,169 the previous year), while totai
fund balance reached $11,982,710 ($12,355,688 the previous year). The decrease in the fund balance of the
general fund was due to increased payables and decreased cash and investments. As a measure of the general
fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total
fund expenditures. Unassigned fund balance represents 52.35% of total general fund expenditures, while total
fund balance represents 5332% of that same amount.
During the year, the City made budgeted transfers from the water and sewer fund to the general fund for
administrative support and franchise fees and from the general fund to the capital projects fund to complete
specific projects.
Other governmental funds include the permanent and expendable library funds, grant fund, health department,
and the community development fund. Other than the general fund, no governmental fund had unassigned
fund balance at the end of the year.
The final appropriation of the general fund was under spent by $921,577 ($2,098,585 under spent the
previous year). This 3.93% variance was spread out among all departments and is mainly due to forecasting
errors. General fund revenues were under budget by $226,770 (1.05%). Shortfalls in property taxes, franchise
taxes, and interest earned were the primary reasons for this difference.
Capital Projects Fund
The capital projects fund is funded by the general fund and/or the proprietary fund on an as needed basis. As
proprietary fund projects are completed in the capital projects fund, they are transferred back to the
proprietary fund. The fund balance in the capital projects fund was $1,999,980 ($720,115 last year).
Variances from year to year are common in this fund as projects are approved on a year to year basis by the
City CounciL
Debt Service Fund
The debt service fund has a total fund balance of $2,797,611 ($2,706,272 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 $91,339 ($77,68R increase the previous year). The increase was 3.37% and was due to
excess revenues over expenditures. The government enacted a dedicated property tax for debt service at the
beginning of the cunent fiscal year. This tax produced revenues of $1,583,842 in the current fiscal year
($1,483,577 the previous year).
Proprietary Fund
The City's 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 $8,496,996
($11,416,134 the previous year). This change was primarily due to transfers out to governmental funds (see
footnote IV. E.) Other factors concerning the finances of this fund have already been addressed in the
discussion of the City's business-type activities.
Capital Asset and Debt Administration
Capital Assets
The City's investment in capital assets for its governmental and business-type activities as of September 30,
2012, amounts to $81,193,341 ($81,055,253 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.
Land
Buildings & System
Improvements Other
than Buildings
Machinery, Furniture,
and Equipment
Infrastructure
Construction in Progress
Water Rights-Net
Unamortized
Bond Expense
Total
Net Capital Assets
Governmental Activities Business-type Activities Total
2011 2012 2011 2012 2011 2012
$ 5,912,108 $ 5,912,108 $ 339,620 $ 339,620 $ 6,251,728 $ 6,251,728
10,719,401 9,716,088 38,242,651 37,043,130 48,962,052 46,759,218
3,509,976 5,537,738
1,952,302
14,709,357
342,635
3,250,429
13,259,061
607,529
_ - 3,509,976 5,537,738
432,051
532,553
3,563,235
969,301
384,384
3,527,611
2,384,353
14,709,357
875,188
3,563,235
4,219,730
13,259,061
991,913
3,527,611
271,972 246,566 527,392 399,776 799,364 646,342
$ 37,417,751 $ 38,529,519 $ 43,637,502 $ 42,663,822 $ 81,055,253 $ 81,193,341
Additional information on the City's 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 $18,515,000. Of
this amount, $10,750,600 comprises debt being paid for by property tax revenues and $7,764,400 represents
bonds being paid for by water and sewer revenues.
Outstanding Long-term Debt
Governmental Activities Business-type Activities Total
2011 2012 2011 2012 2011 2012
General Obligation Bonds $: i,830,800 $ 10,750,600 $ - $ - $ I 1,830,800 $ 10,750,600
Revenue Bonds - - 11,254,200 7,764,400 11,254,200 7,764,400
Total $ 11,830,800 $ 10,750,600 $ 11,254,200 $ 7,764,400 $ 23,085,000 $ 18,515,000
10
The City's bond debt decreased by $4,570,000 (19.79%) during the fiscal year. The City recently received an
underlying bond rating from Moody's of Aa3.
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
$0.52 per $100 valuation for the 2011-12 fiscal year. This rate was broken down into $0.41 per $100
valuation for operations and $0.11 per $100 valuation for debt service. Using the traditional allowance of the
state attorney generai as a guide, the City of Paris is utilizing only 7.33% of its debt capacity.
Additional information on the City's long-term debt can be found in note IV. F. of the notes to the financial
statements.
Economic Factors and Next Year's Budgets and Rates
• Sales tax revenues are projected to remain flat in the coming year.
• New construction amounted to 10 residential units and 13 commercial units.
• Local population growth is expected to be minimal.
• The tax rate is expected to remain at or below $.52 per $100 of value.
• Electrical utility franchise fees are expected to hold steady.
All of these factors were considered in preparing the City's budget for 2012-13.
Requests for Information
This financial report is designed to provide a general overview of the finances of the City of Paris 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
ASSETS
Cash and Cash Equivalents
Inveshnents
Receivables (Net of Allowance
for Uncollectibles)
Internal Balances
Inventories
Due from Other Governments
Restricted Assets:
Cash and Cash Equivalents
Investments
Net Pension Asset
Water Rights (Net of
Accumulated Amortization)
Unamortized Bond Expense
Capital Assets Not
Being Depreciated:
Land
Construction in Progress
Capital Assets (Net of
Accumulated Depreciation):
Buildings and System
Improvements Other Than
Buildings
Machinery and Equipment
Infrastructure
Total Assets
City of Paris, Texas
Statement of Net Assets
September 30, 2012
Statement 1
Component
Primary Government Unit
Governmental Business-type Economic
Activities Activities Total Development
$ 12,702,291
2,885,687
2,172,823
405,788
218,117
770,777
411,753
246,566
5,912,108
607, 529
$ 5,437,639
1,652,043
1,785,678
(405,788)
283,815
300,389
481,873
3,527,611
399,776
339,620
384,384
$ 18,139,930
4,537,730
3,958,501
501,932
770,777
300,3 89
481,873
411,753
3,527,611
646,342
6,251,728
991,913
$ 2,413,639
572,344
205,000
544,941
59,231
1,655,772
9,716,088 37,043,130 46,759,218 -
5,537,738 - 5,537,738 -
3,250,429 969,301 4,219,730 -
13,259,061 - 13,259,061 -
58,096,755 52,199,471 110,296,226 5,450,927
The accompanying notes to the financial statements are an integral part of this statement.
12
LIABILITIES
Accounts Payable and
Other Current Liabilities
Accrued Interest
Customers' Deposits
Noncurrent Liabilities:
Due Within One Year
Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets,
Net of Related Debt
Restricted for:
Construction
Debt Service
Notes Receivables
Law Enforcement
Health
Industrial Incentives
Permanent Library Funds,
Nonexpendable
Unrestricted -
Total Net Assets
City of Paris, Texas
Statement of Net Assets
September 30, 2012
Primary Government
Governmental Business-type
Activities Activities Total
541,821
48,306
1,437,189
10,414,356
12,441,672
27,532,353
1,999,980
2,797,611
92,216
140,953
301,579
89,632
12,700,759
$ 45,655,083
150,615
71,453
829,963
1,408,195
6,742,603
9,202,829
34,499,646
8,496,996
$ 42,996,642
13
692,436
119,759
829,963
2,845,384
17,156,959
21,644, 501
62,031,999
1,999,980
2,797,611
92,216
140,953
301,579
89,632
21,197,755
$ 88,651,725
Statement 1
(Continued)
Component
Unit
Economic
Development
111,126
5,439
290,000
1,570,000
1,976,565
1,655,772
249,402
1,565,177
4,011
$ 3,474,362
City of Paris, Texas
Statement of Activities
For the Year Ended September 30, 2012
Functions/Programs Expenses
Primary Government:
Governmental Activities:
General Government $ 2,094,110
Finance 480,144
Public Safety 10,771,351
Public Works 7,568,269
Health 3,416,360
Library Service 712,033
Cox Field Airport 261,463
Interest on Long-term Debt 342,554
Total Governmental Activities 25,646,284
Program Revenues
Operating Capital
Charges for Grants and Grants and
Services Contributions Contributions
$ - $ 126,608 $ 36,311
729,267 355,186 -
1,788,753 114,499 600,663
2,721,421 600,138 -
20,877 - -
- 96, 529 -
- 12,427 -
5,260,318 1,305,387 636,974
Business-type Activities:
Water and Sewer 11,008,967 13,852,441 - -
Total Business-type Activities 11,008,967 13,852,441 - -
Total Primary Government
Component Unit:
Economic Development
$ 36,655,251 $ 19,112,759 $ 1,305,387 $ 636,974
$ 2,5'74,142 $ - $ - �
General Revenues:
Property Taxes
Sales Taxes
Franchise Taxes
Hotel Occupancy Taxes
Unrestricted Investment Earnings
Contribution Income
Transfers
Total General Revenues, Contribution Income, and Transfers
Changes in Net Assets
Net Assets - Beginning
Net Assets - Ending
The accompanying notes to the financial 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
$ (1,931,191)
(480,144)
(9,686,898)
(5,064,354)
(94, 801)
(691,156)
(164,934)
(330,127)
(18,443,605)
$
$ (1,931,191) $ -
(480,144) -
(9,686,898) -
(5,064,354) -
(94, 801) -
(691,156) -
(164,934) -
(330,127) -
(18,443,605) -
- 2,843,474 2,843,474 -
- 2,843,474 2,843,474 -
(18,443,605) 2,843,474 (15,600,131) -
(2,574,142)
7,619,472 - 7,619,472 -
5,993,859 - 5,993,859 1,198,772
2,731,097 - 2,731,097 -
498,667 - 498,667 -
55,875 63,722 119,597 11,832
1,642,126 303,910 1,946,036 7,500
3,486,508 (3,486,508) - -
22,027,604 (3,118,876) 18,908,728 1,218,104
3,583,999 (275,402) 3,308,597 (1,356,038)
42,071,084 43,272,044 85,343,128 4,830,400
$ 45,655,083 $ 42,996,642 $ 88,651,725 $ 3,474,362
15
City of Paris
Balance Sheet - Governmental Funds
September 30, 2012
Debt
General Service Capital Projects
ASSETS
Cash and Cash Equivalents $ 7,963,921 $ 2,385,823
Investments 2,464,605 -
Receivables (Net of Allowance
for Uncollectibles) 2,027,008 93,599
Due from Other Funds - 499,046
Inventories 218,117 -
Due from Other Governments 547,712 -
$ 2,040,274
Statement 3
Other Total
Governmental Governmental
Funds Funds
$ 312,273 $ 12,702,291
421,082 2,885,687
52,216 2,172,823
73,591 572,637
- 218,117
223,065 770,777
Total Assets $ 13,221,363 $ 2,978,468 $ 2,040,274 $ 1,082,227 $ 19,322,332
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts Payable $ 500,143 $ - $ 40,294 $ 1,384 $ 541,821
Due to Other Funds 73,591 93,258 - - 166,849
Deferred Revenue 664,919 87,599 - - 752,518
Total Liabilities 1,238,653 180,857 40,294 1,384 1,461,188
Fund Balances:
Nonspendable:
Inventory
Permanent Library Funds
Restricted for:
Debt Service
Capital Projects
Notes
Law Enforcement
Health
Assigned:
Library
Community Development
Unassigned: General Fund
Total Fund Balances
Total Liabilities and
Fund Balances
218,117
2,797,611
�
1,999,980
- 218,117
89,632 89,632
- 2,797,611
- 1,999,980
92,216 92,216
140,953 140,953
301,579 301,579
_ _ - 126,182 126,182
_ _ - 330,281 330,281
11,764,593 - - - 11,764,593
11,982,710 2,797,611 1,999,980 1,080,843 17,861,144
$ 13,221,363 $ 2,885,210 $ 2,040,274 $ 1,082,227
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources and, therefore,
are not reported in the funds. (Net of Accumulated Depreciation)
Other long-term assets are not available to pay for current-period expenditures and, therefore,
a- deferred or not reflected in the funds.
Lo..�-term liabilities, including bonds payable, are not due and payable in the current period GS` 1�
therefore, are not reported in the funds.
Net assets of governmental activities
The accompanying notes to the financial statements are an integral part of this statement.
16
38,282,953
1,164,271
(11,653,285)
$ 45,655,083
City of Paris, Texas
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds
For the Year Ended September 30, 2012
Revenues:
Taxes:
Ad Valorem
Sales
Hotel Occupancy
Franchise and Gross Receipts
Licenses and Permits
Fines and Fees
Use of Money and Property
Sanitation
Health
Intergovernmental Revenues
Other
Total Revenues
Expenditures:
Current:
General Government
Finance
Public Safety
Public Works
Health
Library Service
Cox Field Airport
Other
Debt Service:
Principal
Interest
Capital Outlay:
Other
Public Safety
Public Works
Health
Total Expenditures
Excess (Deficiency) of
Revenues Over Expenditures
Statement 4
Other Total
Debt Capital Governmental Governmental
General Service Projects Funds Funds
$ 6,050,788
5,993,859
462,991
2,731,097
145,792
550,496
166,125
1,468,917
2,337,732
1,187,258
267,470
$ 1,583,842
12,427
$ -
19,535
$ - $ 7,634,630
- 5,993,859
- 462,991
- 2,731,097
- 145,792
- 550,496
12,389 210,476
- 1,468,917
480,464 2,818,196
670,834 1,858,092
4,239 271,709
21,362,525 1,596,269 19,535 1,167,926 24,146,255
1,009,366
473,719
9,648,763
5,681,260
2,302,247
630,387
150,848
1,434,177
1,080,200
424,730
20,336
10,368
76,196
955,930
2,128
1,029,702
473,719
9,659,131
5,757,456
3,258,177
632,515
150,848
1,434,177
1,080,200
424,730
101,808 - 48,959 - 150,767
26,247 - 1,068,013 - 1,094,260
885,033 - 390,575 - 1,275,608
128,878 - - - 128,878
22,472,733 1,504,930 1,507,547 1,064,958 26,550,168
(1,110,208) 91,339 (1,488,012) 102,968 (2,403,913)
The accompanying notes to the financial statements are an integral part of this statement.
17
City of Paris, Texas
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds
For the Year Ended September 30, 2012
Other Financing Sources (Uses):
Transfers In
Transfers Out
Total Other Financing
Sources (Uses)
Net Changes
in Fund Balances
Fund Balances - Beginning
Increase in Inventory
Fund Balances - Ending
Statement 4
(Continued)
Other Total
Debt Capital Governmental Governmental
General Service Projects Funds Funds
1,544,400 - 3,556,535 - 5,100,935
(825,769) - (788,658) - (1,614,427)
718,631 - 2,767,877 - 3,486,508
(391,577) 91,339 1,279,865 102,968 1,082,595
12,355,688 2,706,272 720,115 977,875 16,759,950
18,599 - - - 18,599
$ 11,982,710 $ 2,797,611 $1,999,980 $ 1,080,843 $ 17,861,144
18
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
For the Year Ended September 30, 2012
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).
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 depreciation exceeded
capital outlays in the current period.
The net effect of various miscellaneous transactions involving capital assets (e.g., donations
and impairment) is to increase net assets.
Revenues in the statement of activities that do not provide current financial resources
are not reported as revenues in the funds.
Accrued interest reported in the statement of activities does not require the use of current
financial resources and, therefore, is not reported as an expenditure in governmental funds.
The net change in inventory is a direct adjustment to fund balance in the funds.
Some expenses reported in the statement of activities do not require the use of current
fmancial resources and, therefore, are not reported as expenditures in governmental funds.
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 financial 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
effect of these differences in the treatment of long-term debt and related items.
Change in net assets of governmental activities (Statement 2).
The accompanying notes to the financial statements are an integral part of this statement.
19
$ 1,082,595
389,489
747,685
(44,607)
82,176
18,599
232,832
1,075,230
$ 3,583,999
City of Paris, Texas
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual
For the Year Ended September 30, 2012
Revenues:
Ad Valorem Taxes $
Municipal Sales Tax
Hotel Occupancy Tax
Franchise and Gross
Receipts Tax
Licenses and Permits
Fines and Fees
Use of Money and Property
Sanitation
Emergency Medical Services
Intergovernmental Revenues
Other
Total Revenues
Expenditures:
General Government:
Council
Manager
Attorney
Municipal Court
Clerk
Total General Government
Finance:
Accounting and Auditing
Public Safety:
Police
Fire
Total Public Safety
Public Works:
Community Development
Engineering
Public Works
Parks and Recreation
Sanitation
Streets and Highways
Traffic and Public Lighting
Garage
Total Public Works
Budgeted Amounts
Original Final
6,146,880 $
6,006,250
425,000
2,873,200
108,550
518,000
266,026
1,496,445
2,341,685
1,213,759
193,500
21,589,295
120,530
228,264
421,652
233,795
164,174
1,168,415
533,718
6,061,741
3,802,770
9,864,511
1,200,033
468,468
239,769
1,370,842
997,616
1,858,261
527,979
295,005
6,957,973
6,146,880
6,006,250
425,000
2,873,200
108,550
518,000
266,026
1,496,445
2,341,685
1,213,759
193,500
21,589,295
120,530
228,264
421,652
233,795
164,174
1,168,415
533.718
6,160,241
3,761,770
9,922,0 ll
1,160,033
438,468
239,769
1,380,842
927,616
1,898,261
487,979
295,005
6,827,973
Actual
$ 6,050,788
5,993,859
462,991
2,731,097
145,792
550,496
166,125
1,468,917
2,337,732
1,187,258
267,470
21,362,525
124,856
136,734
373,230
222,160
152,386
1,009,366
473,719
5,953,333
3,721,677
9,675,010
1,405,894
436,774
224,857
1,182,749
889,844
1,685,793
455,134
285,248
6,566,293
The accompanying notes to the financial statements are an intregal part of this statement.
20
Statement 6
Variance with
Final Budget
$ (96,092)
(12,391)
37,991
(142,103)
37,242
32,496
(99,901)
(27,528)
(3,953)
(26,501)
73,970
(226,770)
(4,326)
91,530
48,422
11,635
11,788
159,049
59,999
206,908
40,093
247,001
(245,861)
1,694
14,912
198,093
37,772
212,468
32,845
9,757
261,680
City of Paris, Texas
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual
For the Year Ended September 30, 2012
Expenditures: (Continued)
Emergency Medical Services
Cox Field Airport
Paris Band
Library Services
Other
Contingency
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
Other Financing Sources
and (Uses):
Transfers In
Transfers Out
Total Other Financing
Sources and (Uses)
Net Changes in Fund Balance
Fund Balance - Beginning
Increase in Inventory
Fund Balance - Ending
Budgeted Amounts
Original
2,371,354
171,350
20,850
638,404
1,619,235
50,000
23,395,810
Final
2,481,354
176,350
21,850
643,404
1,619,235
23,394,310
Actual
2,431,125
150,848
21,418
630,387
1,514,567
22,472,733
Statement 6
(Continued)
Variance with
Final Budget
50,229
25,502
432
13,017
104,668
921,577
(1,806,515) (1,805,015) (1,110,208) 694,807
1,140,000 1,140,000 1,544,400 404,400
_ - (825,769) (825,769)
1,140,000 1,140,000 718,631 (421,369)
(666,515) (665,015) (391,577) 273,438
12,355,688 12,355,688 12,355,688 -
_ - 18,599 18,599
$ 11,689,173 $ 11,690,673 $ 11,982,710 $ 292,037
21
City of Paris, Texas
Statement of Net Assets
Proprietary Funds
September 30, 2012
ASSETS
Current Assets:
Cash and Cash Equivalents - Pooled
Cash and Cash Equivalents - Non-Pooled
Restricted Cash and Cash Equivalents:
Customers' Deposits - Pooled
Total Cash and Cash Equivalents
Accounts Receivable, Net
Accrued Interest Receivable
Inventories
Total Current Assets
Noncurrent Assets:
Investments:
Customers' Deposits
Unrestricted
Total Investments
Water Rights (Net of Accumulated Amortization)
Unamortized Bond Expense
Capital Assets:
Land
Construction in Progress
Plant, Pumps and Motors
Distribution System
Collection System
Maintenance Equipment and Vehicles
Furniture and Equipment
Less Accumulated Depreciation
Total Capital Assets (Net of Accumulated Depreciation)
Total Noncurrent Assets
Total Assets
Water and Sewer
Enterprise Fund
Current Year
$ 4,873,913
563,726
300,389
5,738,028
1,784,810
868
283,815
7,807,521
481,873
1,652,043
2,133,916
3,527,611
399,776
339,620
384,384
33,350,742
38,736,495
22,863,042
3,292,731
244,222
(60,474, 801)
3 8,736,435
44,797,738
52,605,259
The accompanying notes to the financial statements are an intregal part of this statement.
22
Statement 7
Water and Sewer
Enterprise Fund
Prior Year
$ 7,549,516
373,453
226,945
8,149,914
1,868,719
1,744
358,909
10,379,286
525,567
2,082,000
2,607,567
3,563,235
527,392
339,620
532,553
32,63 8,547
38,253,301
22,318,244
2,574,510
244,222
(57,354,122)
39,546,875
46,245,069
56,624,355
City of Paris, Texas
Statement of Net Assets
Proprietary Funds
September 30, 2012
LIABILITIES
Current Liabilities:
Accounts Payable
Accrued Interest
Customers' Deposits
Due to Other Funds
General Obligation Bonds Payable - Current Portion
Unamortized Bond Premium - Current Portion
Accrued Compensated Absences - Current Portion
Total Current Liabilities
Noncurrent Liabilities:
General Obligation Bonds Payable - Noncurrent Portion
Unamortized Bond Premium - Noncurrent Portion
Accrued Compensated Absences - Noncurrent Portion
Total Noncurrent Liabilities
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt
Unrestricted
Total Net Asssets
23
Water and Sewer
Enterprise Fund
Current Year
150,615
71,453
829,963
405,788
1,350,200
53,992
4,003
2,866,014
6,414,200
184,665
143,738
6,742,603
9,608,617
34,499,646
8,496,996
$ 42,996,642
Statement 7
(Continued)
Water and Sewer
Enterprise Fund
Prior Year
167,206
47,076
810,580
620,765
3,489,800
6,533
5,141,960
7,764,400
310,387
135,564
8,210,351
13,352,311
31,855,910
11,416,134
$ 43,272,044
City of Paris, Texas
Statement of Revenues, Expenses and Changes in Fund Net Assets
Proprietary Funds
For the Year Ended September 30, 2012
Operating Revenues:
Charges for Sales and Services:
Water Sales and Taps
Sewer Charges and Taps
Sanitation Billing Fees
Service Charges
Industrial Surcharges
Miscellaneous
Total Operating Revenues
Operating Expenses:
Personnel
Supplies
Contractual
Maintenance
Sundry Charges
Other
Depreciaton
Total Operating Expenses
Operating Income
Nonoperating Revenues (Expenses):
Investment Earnings
Interest Expense - Revenue and General Obligation Bonds
Amortization of Bond Issue Expense
Amortization of Water Rights
Amortization of Bond Premium
Intergovemmental Revenue
Net Nonoperating Revenues (Expenses)
Income (Loss) Before Capital Contributions and Transfers
Capital Contributions
Transfers In
Transfers Out
Changes in Net Assets
Total Net Assets - Beginning
Total Net Assets - Ending
Water and Sewer
Enterprise Fund
Current Year
$ 8,013,691
5,256,682
76,253
163,469
65,152
277,194
13,852,441
3,053,954
1,218,819
1,862,789
853,142
420,803
35,671
3,120,679
10,565,857
3,286,584
63,722
(351,599)
(127,617)
(35,624)
71,730
167,910
(211,478)
3,075,106
136,000
1,167,892
(4,654,400)
(275,402)
43,272,044
$ 42,996,642
The accompanying notes to the financial statements are an integral part of this statement.
24
Statement 8
Water and Sewer
Enterprise Fund
Prior Year
$ 8,336,146
4,951,015
77,296
164,094
94,369
175,217
13,798,137
3,030,918
1,123,279
2,024,526
550,199
430,558
42,386
3,045,371
10,247,237
3,550,900
162,374
(340,226)
(164,499)
(34,807)
92,406
395,144
110,392
3,661,292
39,356
375,120
(1,140,000)
2,935,768
40,336,276
$ 43,272,044
City of Paris, Texas
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2012
Cash Flows from Operating Activities
Receipts from Customers and Users
Payments to Suppliers
Payments to Employees
Payments to Contractors
Decrease in Interfund Payables
Net Cash Provided by Operating Activities
Cash Flows from Noncapital Financing Activities
Transfers In
Transfers Out
Net Cash Used by Noncapital Financing Activities
Cash Flows from Capital and Related Financing Activities
Purchase of Capital Assets
Principal Paid on Bonds
Principal Paid on Water Rights
Purchase of Water Rights
Interest Paid on Long-term Debt
Construction Grants
Net Cash Used by Capital and Related Financing Activities
Cash Flows from Investing Activities
Interest on Investments
Purchase of Inveshnent Securities
Maturities of Investments
Net Cash Provided by Investing Activities
Net Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents - Beginning
Cash and Cash Equivalents - Ending
Water and Sewer
Enterprise Fund
Current Year
$ 13,956,609
(2,434,261)
(3,048,311)
(1,898,460)
(214,977)
6,360,600
1,167, 892
(4,654,400)
(3,486,508)
(2,174,239)
(3,489,800)
(327,233)
167,910
(5,823,362)
50,335
(666,310)
1,153,359
537,384
(2,411,886)
8,149,914
$ 5,738,028
The accompanying notes to the financial statements are an integral part of this statement.
25
Statement 9
Water and Sewer
Enterprise Fund
Prior Year
$ 14,024,033
(2,151,796)
(2,995,807)
(1,931,106)
(19,603 )
6,925,721
4,808
(1,140,000)
(1,135,192)
(646,164)
(3,3 84,200)
(480,909)
(2,819,239)
(421,793)
395,144
(7,357,161)
142,367
(515,465)
1,041,191
668,093
(898,539)
9,048,453
$ 8,149,914
City of Paris, Texas
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2012
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities:
Operating Income
Adjustments to Reconcile Operating Income to Net Cash
Provided by (Used in) Operating Activities:
Depreciation
Decrease in Accounts Receivable
Decrease (Increase) in Inventory
Increase in Customers' Deposits
Decrease in Due to Other Funds
Increase in Accrued Compensated Absences
Increase (Decrease) in Accounts Payable
Total Adjustments
Net Cash Provided by Operating Activities
Noncash Investing, Capital and Financing Activities:
Increase (Decrease) in Market Value of Investments
Capital Contributions
26
Water and Sewer
Enterprise Fund
Current Year
$ 3,286,584
3,120,679
84,785
75,094
19,383
(214,977)
5,643
(16,591)
3,074,016
$ 6,360,600
$ (5,766)
$ 136,000
Statement 9
(Continued)
Water and Sewer
Enterprise Fund
Prior Year
$ 3,550,900
3,045,371
220,211
(61,076)
5,685
(19,603)
31,891
152,342
3,374,821
$ 6,925,721
$ 20,941
$ 39,356
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
I. Summarv of Sipnificant 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. Complete financial 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 govemment-wide financial statements (i.e., the statement of net assets and the statement of
activities) report information on all of the nonfiduciary activities of the primary government and
its component unit. For the most part, the effect of interfund activity has been removed from these
statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which rely to a
significant extent on fees and charges for support. Likewise, the primary government is reported
separately from the legally separate component unit.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or privileges
provided by a given function or segment and 2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead as general
revenues.
C. Measurement Focus, Basis of Accounting and Basis of Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrua[ basis of accounting, as are the proprietary fund financial
statements. Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues
in the year for which they are levied. Grants and similar items are recognized as revenue as soon
as all eligibility requirements imposed by the provided have been met.
The accounts of the City are organized on the basis of funds. A fund is an independent f scal 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.
27
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
I. SummarY of Si�nificant Accountin� Policies (Continued)
C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued)
The City has the following fund types:
Governmental Funds are used to account for the City's general government activities.
Governmental fund types use the current financial resources measurement focus and the modified
accrual basis of accounting. Under the modifted 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.
The City reports the following major governmental funds:
The General Fund is the primary operating fund of the City. It accounts for and reports all
financial resources not accounted for in another fund.
The Capital Projects Funds account for and report financial resources that are restricted,
committed, or assigned to expenditures for capital outlay.
The Debt Service Funds account for and report financial resources that are restricted,
committed, or assigned to expenditures for principal and interest.
The City reports non-major governmental funds as Other Governmental Funds which include
Special Revenue Funds and a Permanent Fund. Special Revenue Funds are used to account for
and report the proceeds of specific revenue sources that are restricted or committed to
expenditures for specific purposes other than for debt service or capital projects. The
Permanent Fund is used to account for and report resources that are restricted to the extent that
only earnings and not principal may be used.
The City reports its Water and 5ewer Enterprise Fund, a proprietary fund as a major fund.
Pro�rietarv Funds are accounted for using the economic resources measurement %,�us and use the
accrual basis of accounting. Under this method, revenues are recorded when eari:ed 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.
28
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
I. Summary of Significant Accountin� Policies (Continued)
C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued)
Pro�rietary 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 defnition 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-term
investments with original maturities of three months or less from date of acquisition.
Statutes authorize the City and PEDC to invest in obligations of the U. S. Treasury, direct
obligations of the State of Texas, other obligations guaranteed or insured by the State of Texas
or the United States, obligations of states and political subdivisions of any state meeting certain
rating requirements, certificates of deposit, and fully collateralized direct repurchase
agreements having a 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 (generally based on
funded market prices) with changes in fair value being reported as part of investment income.
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 (interfund services provided) are
accounted for as revenues, expenditures, or expenses in the funds involved.
29
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
I. Summary of Significant Accounting Policies (Continued)
D. Assets, Liabilities and Equity (Continued)
2. Receivables and Payables (Continued)
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 ail 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
Prior to the issuance of General Obligation Refunding Bonds, Series 2010, the City's Water
and Sewer Revenue Bonds and Certificates of Obligation covenants required certain
restrictions of net assets. After the refunding occurred, these legal restrictions no longer
existed. In order to safeguard the financial integrity of the water and sewer system, the City
Council approved a resolution establishing and maintaining funds comparable to those required
by the refunded bonds.
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
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 financial statements.
30
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
I. Summa►.�-} of Significant Accountine Policies (Continued)
D. Assets, Liabilities and Equity (Continued)
5. Capital Assets (Continued)
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 $351,599. 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 20-40 years
Furniture, Fixtures and Equipment 5-10 years
Vehicles 5 years
Public Domain Infrastructure 25-45 years
System Infrastructure 25-30 years
6. Compensated Absences
Vacation and sick leave benefits are accumulated by City employees in accordance with
guidelines suggested in the City's personnel policies.
7. Long-term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities, business-type activities, or proprietary fund type statement
of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and
amortized over the life of the bonds using the effective interest method. Bonds payable are
reported net of the applicable bond premium or discount. Bond issuance costs are reported as
deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as issuance costs, during the current period. The face amount of debt issued
is reported as other fmancing sources. Premiums received on debt issuances are reported as
other financing sources while discounts on debt issuances are reported as other financing uses.
Issuance costs, even if withheld from the actual net proc is received, are reported as debt
service expenditures.
31
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
L Summar�of Significant Accounting Policies (Continued)
D. Assets, Liabilities and Equity (Continued)
8. Fund Equity
It is the City's practice to first use restricted fund balance prior to the use of unrestricted fund
balance when an expense is incurred for purposes for which both restricted and unrestricted
fund balance are available. The City's practice for the use of unrestricted fund balance
amounts require that committed amounts would be reduced first, followed by assigned
amounts and then unassigned amounts when expenditures are incurred for purposes for which
amounts in any of those restricted fund balance classifications could be used.
Fund balance of governmental funds is reported in various categories based on the nature of
any limitations requiring the use of resources for specific purposes. The government itself can
establish limitations on the use of resources through either a commitment or an assignment.
The committed fund balance classification includes amounts that can be used only for the
specific purposes determined by a formal action of the government's highest level of decision-
making authority. Once adopted, the limitation imposed by the ordinance remains in place
until a similar action is taken to remove or revise the limitation. Amounts in the assigned fund
balance classification are intended to be used by the government for specific purposes but do
not meet the criteria to be classified as committed. The governing council allows the finance
director to assign fund balance. Unlike commitments, assignments generally only exist
temporarily.
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 position — governmental activities as reported in the government-wide
statement of net assets. One element of that reconciliation explains that "capital assets used in
governmental activities are not financial resources and, therefore, are not reported in the funds."
The details ofthis $38,282,953 are as follows:
Land
Construction in Progress
Buildings
Less: Accumulated Depreciation - Buildings
Improvements Other Than Buildings
Less: Accumulated Depreciation - Improvements Other Than Buildings
Machinery and Equipment
Less: Accumulated Depreciation - Machinery and Equipment
Infrastructure
Less: Accumulated Depreciation - Infrastructure
Net Adjustment to Increase Fund Balance - Total Governmental Funds
to Arrive at Net Position - Governmental Activities
32
$ 5,912,108
607,529
14,601,581
(4,885,493)
7,860,657
(2,322,919)
19,654,343
(16,403,914)
39,025,955
(25,766,894)
$ 38,282,953
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
II. Reconciliation of Government-wide and Fund Financial Statements (Continued)
A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the
Government-wide Statement of Net Assets (Continued)
Another 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 ofthis $11,653,285 difference are as follows:
Bonds Payable
Less: Deferred Charge for Issuance Costs (to be Amortized
Over the Life of the Debt)
Plus: Premiums on Bonds Payable (to be Amortized
Over the Life of the Debt)
Accrued Interest
Compensated Absences
OPEB Liability
Landfill Post Closure Care Costs
Net Adjustment to Reduce Fund Balance - Total Governmental Funds
to Arrive at Net Assets - Governmental Activities
$ 10,750,600
(246,566)
82,924
48,306
776,512
174,636
66,873
$ 11,653,285
B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues,
Expenditures and Changes in Fund Balances and the Government-wide Statement of Activities
The governmental fund statement of revenues, expenditures and changes in fund balances includes
a reconciliation between net changes in fund balances — total governmental funds and changes in
net assets of governmental activities as reported in the government-wide statement of activities.
One element of that reconciliation explains that "governmental funds report capital outlays as
expenditures. However, in the statement of activities the cost of those assets is allocated
over their estimated useful lives and reported as depreciation expense." The details of
this $389,489 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
33
$ 3,166,229
(2,776,740)
$ 389,489
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
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 Activities
(Continued)
Another element of that reconciliation states that the "net effect of various miscellaneous
transactions involving capital assets (e.g., donations and impairment) is to increase net assets."
Donations of capital assets increase funds because they are not financial resources. An
impairment of the former police station building decreases net assets but does not appear in the
governmental funds because the impairment does not consume financial resources. The
impairment loss is reported as a program expense in the public safety function/program in the
statement of activities. The details of this $747,685 difference are as follows:
Donated/Contributed Assets
Impairment
Net Adjustment to Increase Net Changes in Fund Balances -
Total Governmental Funds to Anive at Changes in Net Assets
of Governmental Activities
$ 1,642,126
(894,441)
$ 747,685
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
$1,075,230 difference are as follows:
Amortization of Issuance Costs
Amortization of Premiums
Principal Repayments
Net Adjustment to Increase Net Changes in Fund Balances -
Total Governmental Funds to Arrive at Changes in Net Assets
of Governmental Activities
III. Stewardship Compliance and Accountability
Budgetary Information
$ (25,406)
20,436
1,080,200
$ 1,075,230
Annual budgets are legally 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 bud�;et 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. The community development block grant fund is not
34
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
III. Stewardshin Compliance and Accountability (Continued)
Budgetary Information (Continued)
annually appropriated. The City has no special revenue funds which are reported as majar funds.
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 financing them. Public hearings are conducted at which all
interested persons' comments concerning the budget are heard.
The budget for the next fiscal year is legally enacted by the City Council through passage of an
ordinance not later than the twenty-seventh day of the last month of the fiscal year. If the City
Council does not enact the budget within this time period, then the budget as submitted by the City
Manager becomes the legally authorized budget.
Expenditures may not legally exceed appropriations at the department level for each legally
adopted annual operating budget. The City Manager may, without Council approval, transfer
appropriation balances from one expenditure account to another within a department or agency of
the City. The City Council, however, must approve any transfer or unencumbered appropriation
balances or portions thereof from one deparhnent or agency to another. During the year ended
September 30, 2012, the City Council approved a transfer of $352,'730 from fourteen line items to
several departmental line items.
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 vatued 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 financial institution's agent in the name of the City.
35
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
IV. Detailed Notes on All Funds and Component Unit (Continued)
A. Deposits and Investments (Continued)
As of September 30, 2012, 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:
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
Federal Home Loan Bank
Freddie Mac
Government National Mortgage Association
Certificates of Deposit
Totals
Component Unit - PEDC
Certificates of Deposit
$ 715,669
1,173,433
1,999,920
96,400
944,699
89,482
$ 5,019,603
$ 572,344
Not Rated
Not Rated
Aaa
Not Rated
Not Rated
Not Rated
Not Rated
6.72
7.12
635
0.35
0.17
0.54
4.04
0.51
Interest Rate Risk. It is the policy of the City to invest public funds in a manner which will
provide the highest investment return with the maximum security while meeting the daily cash
flow demands of the entity and conforming to all state and local statutes governing the investment
of public funds. The City's investment portfolio will be designed with the objective of attaining a
rate of return throughout budgetary and economic cycles and commensurate with the City's
investment risk constraints and the cash flow characteristics of the portfolio. The City's
investment strategy is active. Given this strategy, the basis used by the Finance Director to
determine whether market yields are being achieved shail be the six-month U.S. Treasury Bill and
the Average Fed Funds rate. No other formal policy related to interest rate risk is included in the
City's adopted inveshnent policy.
Credit Risk is the risk that an issuer or other counter-party will not fulfill its obligations. Investing
is performed 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's policy is to diversify 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.
36
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
IV. Detailed Notes on All Funds and Component Unit (Continued)
A. Deposits and Investments (Continued)
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, 2012, 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 $95,000 of the PEDC bank balance of $792,137 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, 2012, the
City did not have custodial credit risk exposure.
Foreign Currency Risk is the risk that an investment denominated in the currency of a foreign
country could reduce its United States of America dollar value as a result of changes in foreign
currency exchange rates. At September 30, 2012, the City was not exposed to foreign currency
risk.
B. Receivables
Receivables as of year-end, including the applicable allowances for uncollectible accounts, are as
follows:
Receivables:
Interest
Properiy Taaces
Sales Taxes
Accounts
Notes
Street Assessments
Fines
EMS
Gross Receivables
Less: Allowance for
Uncollectibles
Net Total Receivables
Debt Special
General Service Revenue Enterprise
$ 918 $ -
749,088 124,798
1,026,000 -
119,470 -
26,473 -
104,694 -
2,322,411 -
4,349,054 124,798
$ - $ 868
- 1,834,810
52,216 -
52,216 1,835,678
(2,322,046) (31,199) - (50,000)
$ 2,027,008 $ 93,599 $ 52,216 $ 1,785,678
Net receivable balances not expected to be collected within one year are Property Taxes -
$410,875, Fines - $2,347, EMS - $91,811, and Street Assessments - $26,473.
At year end, PEDC had a receivable for sales tax of $205,000.
37
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
IV. Detailed Notes on All Funds and Component Unit (Continued)
C. Capital Assets
Capital assets activity for the year ended September 30, 2012, follows:
Governmental Activities
Capital Assets, Not Being Depreciated:
Land
Construction in Progress
Total Capital Assets,
Not Being Depreciated
Capital Assets, Being Depreciated:
Buildings
Improvements Other Than Buildings
Machinery and Equipment
Infrastructure
Total Capital Assets,
Being Depreciated
Less Accumulated Depreciation for:
Buildings
Improvements Other Than Buildings
Machinery and Equipment
Infrastructure
Total Accumulated Depreciation
Total Capital Assets,
Being Depreciated, Net
Governmental Activities,
Capital Assets, Net
Balance Balance
September 30, September 30,
2011 Increases Decreases 2012
$ 5,912,108 $ - $ - $ 5,912,108
342,635 546,715 281,821 607,529
6,254,743 546,715 281,821 6,519,637
15,430,302 196,642 1,025,363 14,601,581
5,645,638 2,215,019 - 7,860,657
17,614,232 2,096,146 56,035 19,654,343
39,081,870 100,225 156,140 39,025,955
77,772,042
4,710,901
2,13 5,662
15,661,930
24,372,513
46,881,006
30,891,036
$ 37,145,779
38
4,608,032
397,083
187,257
798,019
1,394,381
2,776,740
1,831,292
$ 2,378,007
1,237,538 81,142,536
222,491 4,885,493
- 2,322,919
56,035 16,403,914
- 25,766,894
278,526 49,379,220
959,012 31,763,316
$ 1,240,833 $ 38,282,953
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
N. Detailed Notes on Al I Funds and Component Unit (Continued)
C. Capital Assets (Continued)
Business-type Activities
Capital Assets, Not Being Depreciated:
Land
Construction in Progress
Total Capital Assets,
Not Being Depreciated
Capital Assets, Being Depreciated:
Plant, Pumps, and Motors
Distribution System
Collection System
Maintenance Equipment and Vehicles
Furniture and Equipment
Total Capital Assets,
Being Depreciated
Less Accumulated Depreciation for:
Plants, Pumps, and Motors
Distribution System
Collection System
Maintenance Equipment and Vehicles
Furniture and Equipment
Total Accumulated Depreciation
Total Capital Assets,
Being Depreciated, Net
Business-type Activities,
Capital Assets, Net
Balance
September 30,
2011 Increases
Decreases
Balance
September 30,
2012
$ 339,620 $ - $ - $ 339,620
532,553 641,354 789,523 384,384
872,173 641,354 789,523 724,004
32,638,547
38,253,301
22,318,244
2,574,510
244,222
96,028,824
23,140,290
18,690,258
13,136,893
2,142,459
244,222
57,354,122
712,195 - 33,350,742
483,194 - 38,736,495
544,798 - 22,863,042
718,221 - 3,292,731
_ - 244,222
2,458,408 - 98,487,232
1,062,385
1,170,415
706,908
180,971
3,120,679
- 24,202,675
- 19,860,673
- 13,843,801
- 2,323,430
- 244,222
- 60,474,801
38,674,702 (662,271) - 38,012,431
39,546,875 (20,917) 789,523 38,736,435
Intangible Asset - Water Rights 4,113,119 - - 4,113,119
Less Accumulated Amortization 549,884 35,624 - 585,508
Total Intangible Asset -
Water Rights, Net 3,563,235 (35,624) - 3,527,611
Business-type Activities
Capital and Intangible Assets, Net $ 43,110,110 $ (56,541) $ 789,523 $ 42,264,046
Component Unit
Capital Assets, Not Being Depreciated:
Land Development Costs $ 1,655,772 $ - $ - $ 1,655,772
39
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
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 Asset
Health
Library Service
Cox Field Airport
Total Depreciation Expense - Governmental Activities
Business-type Activities:
Water and Sewer - Total Depreciation Expense - Business-type Activities
D. Construction Commitments
$ 108,292
6,425
502,894
1,810,813
158,183
79,518
110,615
$ 2,776,740
$ 3,120,679
The City has active construction projects as of September 30, 2012. At year-end the City's
commitments with contractors are as follows:
Project
Rehabilitation of East Elevated Storage Tanks
E. Interfund Receivables, Payables and Transfers
To Date Commitment
$ - $ 837,000
Interfund balances at year-end consisted of the following individual fund receivables and payables:
Fund
General Fund
Debt Service Fund
Special Revenue Fund
Water and Sewer Enterprise Fund
Total
Receivables
$ -
499,046
73,591
93,258
$ 665,895
Payables
$ 73,591
93,258
499,046
$ 665,895
The outstanding balances between funds result mainly from the time lag between. the dates that (1)
interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are
recorded in the accounting system, and (3) payments between funds are made. These are expected to be
collected in the subsequent year. The amounts receivable and payable between the General Fund and
t�ie Special Revenue Fund are eliminated in the process of preparing the consolidated gover^. � aent-wide
statement of net assets since they are both governmental activities.
40
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
IV. Detailed Notes on All Funds and Component Unit (Continued)
E. Interfund Receivables, Payables and Transfers (Continued)
F
Interfund Transfers:
General
Fund
General Fund
Water and
Water and Capital
Sewer Projects Transfers
Fund Fund Out
$ 379,234 $ 446,535 $ 825,769
Sewer Fund 1,544,400 - 3,110,000 4,654,400
Capital Projects Fund - 788,658 - 788,658
Transfer In $ 1,544,400 $ 1,167,892 $ 3,556,535 $ 6,268,827
During the year ended September 30, 2012, the City made budgeted transfers from Water and
Sewer Fund to General Fund of $1,544,400, and from the General Fund to the Capital Projects
Fund of $446,535, and from the General Fund to the Water and Sewer Fund of $379,234 to
complete specific projects. As Water and Sewer projects were completed in the Capital Projects
Fund, accumulated costs transferred to the Water and Sewer Fund were $788,658.
Long-term Liabilities
General Obligation Certificates of Obligation and Other Long-term Obligations:
$6,060,000 Combination Tax and Revenue Certificates of Obligation, Series 2002, due in annual
installments varying from $295,000 to $460,000 with final payment due December 15, 2021.
Interest is payable semi-annually at rates ranging from 4.0% to 4.7%. 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. The certificates are additionally secured by and payable
from a limited pledge (not to exceed $2,500) of the surplus revenues of the waterworks and sewer
systems. These bonds were issued to provide funds for the purchase and renovation of a law
enforcement center for police, courts and jail.
$7,130,000 General Obligation Refunding Bonds, Series 2003, due in annual installments varying
from $196,800 to $384,000 with final payment due December 15, 2014. Interest is payable semi-
annually at rates ranging from 3.65% 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.
$3,005,000 Combination Tax and Revenue Certificates of Obligation, Series 2010, due in annual
installments varying from $105,000 to $230,000 with final payment due December 15, 2029.
Interest is payable semi-annually at 3.2% to 4.2%. On December 15, 2020, or any date thereafter,
unpaid principal installments may be prepaid or redeemed prior to their scheduled due dates at the
City's option. The certificates are additionally secured by and payable from a limit�� pledge (not
to exceed $1,000) of the surplus revenues of the waterworks and sewer systems. ihese bonds
were issued to provide funds for improvements and expansion to South Collegiate Drive.
41
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
IV. Detailed Notes on All Funds and Component Unit (Continued)
F. Long-term Liabilities (Continued)
General Obligation Certificates of Obligation and Other Long-term Obligations (Continued)
$17,075,000 General Obligation Refunding Bonds, Series 2010, due in annual installments
varying from $355,000 to $440,000, with final payment due June 15, 2020. Interest is payable
semi-annually at rates ranging from 2.375% to 4.0%. On June 15, 2018, or any date thereafter, the
outstanding bonds may be redeemed prior to their scheduled maturities at the City's option. These
bonds were issued February 15, 2010, at a premium for the purpose of refunding $17,220,000 i�
outstanding bonds reported as Enterprise Fund debt and General Obligation debt.
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, 2012,
the fund balances in the Interest and Sinking Funds are $2,677,910.
The State of Texas is requiring additional monitoring of a landfill owned by the City that has been
closed for several years. The City and its' consultants estimate that, based on known
requirements, future costs may be $66,873. These costs are subject to change resulting from
inflation, deflation, technology, or changes in applicable laws or regulations.
Long-term debt service requirements for the next five years and after in five year increments are as
follows:
Year Ending
September 30,
2013
2014
2015
2016
2017
2018-2022
2023-2027
2028-2032
General Obligation
Principal Interest
$ 1,119,800 $ 384,778
1,164,000 343,164
1,016,800 302,096
860,000 268,655
890,000 238,434
4,120,000
920,000
660,000
$ 10,750,600
42
680,670
232,934
41,550
$ 2,492,281
Water and Sewer
Principal Interest
$ 1,350,200 $ 243,358
1,411,000 209,284
1,233,200 162,501
1,040,000 134,206
650,000
2,080,000
$ 7,764,400
92,400
147,713
$ 989,462
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
IV. Detailed Notes on All Funds and Component Unit (Continued)
F. Long-term Liabilities (Continued)
A summary of long-term liability transactions for the year ended September 30, 2012, follows:
Balance Balance
September 30, September 30, Due Within
2011 Additions Reductions 2012 One year
Governmental Activities
Bonds Payable
General Obligation Bonds $ 11,830,800 $ - $ 1,080,200 $ 10,750,600 $ 1,119,800
Premium 103,360 - 20,436 82,924 18,572
Total Bonds Payable 11,934,160 - 1,100,636 10,833,524 1,138,372
Compensated Absences
Landfill Post Closure
Care Costs
OPEB Liability
Governmental Activities
Long-term Liabilities
Business-type Activities
Bonds Payable
Revenue Bonds
Premium
Total Bonds Payable
Compensated Absences
Business-type Activities
Long-term Liabilities
782,085 181,218 186,791 776,512 186,791
66,873 - - 66,873 -
122,352 164,310 112,026 174,636 112,026
$ 12,905,470 $ 345,528 $ 1,399,453 $ 11,851,545 $ 1,437,189
$ 11,254,200 $ - $ 3,489,800 $ 7,764,400 $ 1,350,200
310,387 - 71,730 238,657 53,992
11,564,587 - 3,561,530 8,003,057 1,404,192
142,098 9,646 4,003 147,741 4,003
$ 11,706,685 $ 9,646 $ 3,565,533 $ 8,150,798 $ 1,408,195
Component Unit
Bonds Payable $ 2,140,000 $ - $ 280,000 $ 1,860,000 $ 290,000
Component Unit
Long-termLiabilities $ 2,140,000 $ - $ 280,000 $ 1,860,000 $ 290,000
For the governmental activities, compensated absences are liquidated by the general fund.
43
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
IV. Detailed Notes on All Funds and Component Unit (Continued)
F . Long-term Liabilities (Continued)
PEDC has outstanding Paris Economic Development Corporation Sales Tax Revenue Refunding
Bonds, Series 2010, originally issued at $2,685,000, bearing interest at 232% to 4.39%. Principal
payments are due serially in varying annual amounts to September 1, 2018, from $290,000 to
$340,000.
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 of the Component Unit. The resolution authorizing the issuance of the bonds requires that
monthly deposits be made to the Debt Service Fund in an amount sufficient to pay the next
maturing bonds and interest.
A Reserve Fund is required to be maintained with a balance of at least $346,192, the average
annual principal and interest requirements of the bonds. At September 30, 2012, the balances in the
Debt Service Fund and Reserve Fund are $73,964 and $470,977, respectively.
Debt service requirements related to these bonds are as follows:
Bond Debt Requirements
Years Principal Interest
2013 $ 290,000 $ 65,264
2014 290,000 58,536
2015 300,000 50,271
2016 315,000 40,221
2017 325,000 28,251
2018 340,000 14,926
Total
$ 355,264
348,536
350,271
3 5 5,221
353,251
354,926
$ 1,860,000 $ 257,469 $ 2,117,469
G. Restricted Net Assets and Restricted Asset Accounts
In order to safeguard the financial integrity of the water and sewer system, the City Council
approved a resolution establishing and maintaining funds comparable to those required by the
revenue bonds refunded in 2010. At September 30, 2012, these accounts, shown as cash and
investments on the Statement of Net Assets — Proprietary Funds, are as follows:
Reserve Fund $ 2,266,519
Contingency Fund 779,300
44
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
IV. Detailed Notes on All Funds and Component Unit (Continued)
G. Restricted Net Assets and Restricted Asset Accounts (Continued)
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:
Customers' Deposits
Notes Receivable
Total Restricted Assets
V. Other Information
A. Risk Management
Certificates of
Deposit and
Cash and Cash Other
Equivalents Investments
$ 300,389 $ 481,873
$ 300,389 $ 481,873
Other
Receivables
$ -
52,216
$ 52,216
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, 2012. There have been no settlements in excess of insurance coverage in any of the prior three
fiscal years.
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
The City has the right to utilize an undivided 100% of the usable conservation storage space in Pat
Mayse Lake between elevations 451 feet and 415 feet above sea level which is estimated at
109,600 acre feet. The Government reserves the right to control and use all storage in accordance
with project purposes, to take such measures to preserve life and or property including the right
not to make downstream releases and to inspect, maintain, or repair the project. The City will be
required to pay 10.526% of the cost of joint-use repair, rehabilitation, and replacement and
26.659% of the annual experienced joint-use operation an:i i;laintenance of the project.
45
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
V. Other Information (Continued)
D. Water Sales
The City has contracts extending for several years to sell treated and untreated water to six
entities. Total water sales under these contracts to these entities during the year ended September
30, 2012, were approximately $3,449,000.
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, 2012, and may be reviewed for four additional one year terms upon written
agreement of the parties. Either party may terminate this contract at the end of the current term by
giving thirty days notice.
F. Contingent Liabilities, Commitments and Subsequent Events
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 akeady
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.
Subsequent to September 30, 2012, the City Council approved an ordinance which establishes
payment obligations to the Sulphur River Regional Mobility Authority. The City's payments are
to assist in funding completion of approximately 10.4 miles of four-lane divided highway in Delta
County, Texas. Annual payments of $100,827 include principal and interest at 3.68% beginning
March 29, 2013, through March 29, 2032. The City is required to establish a sinking fund and to
levy and collect ad valorem tax. In addition, the City Council approved two ordinances
authorizing the issuance of General Obligation Refunding Bonds, Series 2012 not exceed
$4,750,000, to defease Combination Tax and Revenue Certificates of Obligation, Series 2002 and
General Obligation Refunding Bonds, Series 2003 and Combination Tax and Surplus Revenue
Certificates of Obligation, Series 2013, not to exceed $2,900,000 for water line replacements and
related costs. The ordinances also require the levy of ad valorem tax sufficient to pay the interest
and principal as they become due and contain a pledge of the surplus net revenues of the water and
sewer systems.
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.
Management has evaluated subsequent events through the date of the report, the date on which the
financial statements were available to be issued.
46
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
V. Other Information (Continued)
F. Contingent Liabilities, Commitments and Subsequent Events (Continued)
PEDC has extended several incentive agreements to various companies:
(1) Warehouse company - Company is to create 35 new jobs providing an incentive amount of
$105,000.
(2) Commercial dairy - The incentive is to provide cash payments far creating 150 new jobs in
Paris and Lamar County for five years. This amount is estimated to be $664,300 and
expected to begin in 2017.
(3) Soup manufacturer - The incentive is to participate in the cost of a solar storage structure to
the extent of $100,000.
(4) Truck accessories - Company is to open a manufacturing facility in Paris, Texas, and create
15 new jobs. The incentive is for $324,250 for new jobs, training, and infrastructure. At
September 30, 2012, $226,118 of the incentive remains to be satisfied. PEDC has also
executed a guaranty in connection with a$100,000 note to a bank.
(5) Retail and office structure — The incentive is to participate in reimbursement of sewer line
construction to the extent of $250,000.
(6) Therapeutic proteins manufacturer and distributor — Facilities to be located at Paris Industrial
Park to create new jobs. PEDC has committed $219,760 to complete a market analysis, a
site and facilities plan, and a bridge loan. Additional incentives may be extended in the
future.
In connection with a first lien loan by a bank to a commercial operation in the amount of
$5,800,000, PEDC has entered into a Guaranty of Collection agreement. The loan payment is
guaranteed by an individual (and a related company), and in addition, PEDC has guaranteed the
full and prompt collection of the principal and interest due under the note together with limited
cost of collection. If the lender makes demand under the Guaranty of Collection agreement, the
lender will allow PEDC to satisfy its liability in monthly installments as specified in the original
note. The agreement is dated September 23, 2010, and will terminate when the note is paid or the
expiration of ten years.
In August 2012, the Board of Directors approved the renewal of a$2,000,000 revolving line of
credit with a bank for future economic development projects. The note is dated September 18,
2012, and bears interest at the initial rate of 1.29% which is due monthly. The principal is due in
one payment on September 18, 2014, and is secured by sales tax revenues and other income
received by PEDC except that portion of income currently obligated or subsequent bond issued as
contemplated by the Series 2010 bonds. The interest rate is subject to change based on changes in
an independent index and the rate charged is to be 1.96% under the index which at September 12,
2012, was 3.25%. The note documents also provide for right of setoff by the lender in all accounts
the lender holds and other restrictions pertaining to issuance of additional debt, maintenance of
47
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
V. Other Information (Continued)
F. Contingent Liabilities, Commitments and Subsequent Events (Continued)
liquidity, and furnishing of financial information. At September 30, 2012, no funds have been
advanced under this line of credit. Subsequent to September 30, 2012, PEDC drew $2,000,000
under this line and loaned it to a manufacturing company locating in Paris. The lien note bears
interest at the initial rate of 3.35%, is due September 18, 2014, and is secured by equipment.
Additionally, an incentive agreement relating to payment for jobs and training is also being
considered.
G. Postemployment Benefits Other Than Pensions
The City has in effect a single employer 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, 2012, the contributions were approximately $112,000 for 28 retired employees. An
additional 31 empioyees were eligible for this benefit. Calculations are based on benefits provided
under the plan in effect at the time of each valuation and on the pattern of sharing of costs.
Actuarial information as of September 30, 2012:
Development of the Annual Required Contribution
Employer Normal Cost
Amortization of UAAL
Annual Required Contribution (ARC)
Percentage Contributed
Amount of Contribution
Interest on Net Obligation
ARC Adjustment
Increase in Net Obligation
Net Obligation
�
48
2010 2011 2012
$ 20,637 $ 73,791 $ 80,318
121,843 143,761 143,761
$ 142,480 $ 217,552 $ 224,079
76% 68% 76%
$ 108,331 $ 147,885 $ 169,555
$ g7g $ 2,415 $ 5,506
$ 814 $ 3,397 $ 7,746
$ 34,149 $ 68,684 $ 52,284
$ 53,668 $ 122,352 $ 174,636
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
V. Other Information (Continued)
G. Postemployment Benefits Other Than Pensions (Continued)
The ARC for 2010 has been calculated to remain at a level dollar amount and the unfunded
actuarial accrued liabilities were amortized as a level dollar amount over a period of 15 years. For
2011 and 2012, a closed amortization period for the unfunded actuarial accrued liabilities is 27
years, which is appropriate because the plan has no benefits to employees hired after October 1,
2004. Inflation rate assumption is 3%, healthcare cost trend rate is 3%, and the rate of investment
return is 4.5%. The actuarial calculation for the plan reflects a long-term perspective. The
Projected Unit Credit Cost Method was used in the valuation. The actuarial present value of
benefits allocated to the valuation year is the Normal Cost. The actuarial present value of benefits
allocated to all prior periods is the Actuarial Accrued Liability. Actuarial gains (losses) as they
occur, reduce (increase) the Unfunded Actuarial Accrued Liability. The City's subsidy for a
retiree covered by the plan is assumed to increase 3%. Rates of salary increase vary from 3.5% to
5.25% based on years of service. In prior years, the General Fund has been used to liquidate post-
employment obligations.
Determination of Unfunded Actuarial Accrued Liability
Present Value of Future Benefits
i) Retirees and Beneficiaries
ii) Vested Terminated Members
iii) Active Members
Total Present Value of Future Benefits
Present Value of Future Normal Costs
Actuarial Accrued Liability
Actuarial Value of Assets
Unfunded Actuarial Accrued Liability
Funded Ratio
December 31,
2009 2010 2011
$ 1,028,420 $ 1,028,420 $ 765,003
483,343 483,343 2,149,810
1,511,763 1,511,763 2,914,813
173,995 173,995 643,893
$ 1,337,768 $ 1,337,768 $ 2,270,920
$ 1,337,768
0.00%
$ 1,337,768 $ 2,270,920
0.00% 0.00%
The Unfunded Actuarial Accrued Liability (UAAL) is not booked as an expense all in one
year and does not appear in the Employer's Statement of New Assets. The discount rate used is
4.5%.
The City intends to obtain an actuarial evaluation of the plan every two years. Actuarial
valuations involve estimates of the value of reported amounts and assumptions about the
probability of events far into the future, and actuarially determined amounts are subject to
continual revision as results ar,^ rompared to past expectations and new estimates are made about
the future.
49
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
V. Other Information (Continued)
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 plan for firefighters.
1. Texas Municipal Retirement System
Plan Description
The City provides pension benefits for all of its eligible employees (except firefighters)
through a non-traditional, joint contributory, hybrid defined benefit plan in the state-wide
Texas Municipal Retirement System (TMRS), 1 of 847 currently administered by TMRS, an
agent multiple-employer public employee retirement system. The plan provisions that have
been adopted by the City are within the options available in the governing state statutes of
TMRS.
Benefits
Upon retirement, benefits depend on the sum of the employee's contributions, with interest, and
the City-financed monetary credits, with interest. City-financed monetary credits are
composed of three sources: prior service credits, current service credits, and updated service
credits. At the inception of the plan, the City granted monetary credits for service rendered
before the plan began (or prior service credits) 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 (or current service credits) are
150% of the employee's accumulated contributions. In addition, the city can grant, either
annually or on an annually repeating basis, another type of monetary credit referred to as
Updated Service Credit. This monetary credit is determined by hypothetically recomputing the
member's account balance by assuming that the current member deposit rate of the City has
always been in effect. The computation also assumes that the member's salary has always
been the member's average salary — using a salary calculation based on the 36-month period
ending a year before the effective date of calculation. This hypothetical account balance is
increased by 3% each year, not the actual interest credited to member accounts in previous
years, and increased by the City match currently in effect. The resulting sum is then compared
to the member's actual account balance increased by the actual City match and actual interest
credited. If the hypothetical calculation exceeds the actual calculation, the member is granted a
monetary credit (or Updated Service Credit) equal to the difference between the hypothetical
calculation and the actual calculation times the percentage adopted. At retirement, the benefit
is calculated as i�' :�►e sum of the employee's contributions, with interest, and the city-
financed monetary credits, with interest, were used to purchase an annuity.
50
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
V. Other Information (Continued)
I. 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 contribution rate for each city is determined annually
by the actuary, using the Projected Unit Credit actuarial cost method. This rate consists of the
normal cost contribution rate and the prior service cost contribution rate, which is calculated to
be a level percent of payroll from year to year. The normal cost contribution rate finances the
portion of an active member's projected benefit allocated annually; the prior service
contribution rate amortizes the unfunded (overfunded) actuarial liability (asset) over the
applicable period for that city. Both the normal cost and prior service contribution rates
include recognition of the projected impact of annually repeating benefits, such as Updated
Service Credit and Annuity Increases. The employer contribution rate cannot exceed a
statutory maximum rate, which is a function of the employee contribution rate and the City
matching percentage. The prior service contribution rate amortizes the unfunded actuarial
liability over the remainder of the plan's 25-year closed amortization period. 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 projected unit credit method is used for assets. Other
assumptions include no cost-of-living adjustments, projected salary increases vary by age and
service, inflation at 3%, and the investment rate of return is 7.0%. The level percent of payroll
is the amortization method used.
51
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
V. Other Information (Continued)
I. Employee Retirement Systems and Plans (Continued)
1. Texas Municipal Retirement System (Continued)
Contributions (Continued)
During the past three fiscal years, the City has contributed 100% of its annual pension cost as
follows: 2011 -$923,731, 2010 -$1,195,726, and 2009 -$1,204,639. At September 30, 2010,
2011, and 2012, the net pension obligation is zero. Any net pension obligation would be
liquidated by the General Fund.
Schedule of Fundin��Pro r��ess:
Actuarial
Valuation
December
31,
2009
2010
2011
Actuarial
Value of
Assets
(1)
$ 25,841,641
42,636,949
45,192,490
Actuarial
Unfunded Liability
Actuarial Actuarial as a
Accrued Accrued Percentage
Liability Funded Liability Covered of Covered
(AAL) Ratio (UAAL) Payroll Payroll
(2) (3) (4) (5) (6)
�i) � �2) �2) - il) �4) � i5)
$ 31,658,754 81.6% $ 5,817,113 $ 10,635,564 54.7%
43,396,366 98.3 759,417 11,352,419 6.7
45,459,374 99.4 266,884 11,462,772 2.3
The remainder of this page intentionally left blank.
52
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
V. Other Information (Continued)
I. Employee Retirement Systems and Plans (Continued)
l. Texas Municipal Retirement System (Continued)
Schedule of Fundin� Progress (Continued)
During the year 2011, state law changed the fund structure of TMRS and a reserve fund
previously not included in the calculation of the funded ratio or calculated contributions was
combined with other funds to form one Benefit Accumulation Fund. As allowed by the new
law, the Actuarial Valuation as of December 31, 2010 reflects the combination of funds and
any other effects of the law.
Restructuring TMRS accounts produces a more efficient funding structure that:
Reduces year-to-date volatility in city contribution rates.
Eliminates the leverage that existed in the former three-fund structure.
Reduces the downside risk of adverse investment returns on city accounts.
Removes the need to maintain a substantial percentage of assets as a reserve.
Results in lower contribution rates for most cities.
Improves actuarial funding rations for most cities.
TMRS issues a publicly available comprehensive annual fmancial report that includes financial
statements and required supplementary information (RSI) for TMRS; the report also provides
detailed explanations of the contributions, benefits, and actuarial methods and assumptions
used by the system. This report may be obtained from TMRS' website at www.TMRS.com.
Su�plemental Death Benefits
The City also participates in the cost sharing multiple-employer defined benefit group-term life
insurance plan operated by the TMRS known as the Supplemental Death Benefits Fund. The
City elected, by ordinance, to provide group-term life insurance coverage to both current and
retired employees. The City may terminate coverage under and discontinue participation by
adopting an ordinance before November 1 of any year to be effective the following January 1.
The death benefit for active employees provides a lump-sum payment approximately equal to
the employee's annual salary (calculated based on the employee's actual earnings, for the 12-
month period preceding the month of death); retired employees are insured for $7,500; this
coverage is an "other postemployment benefit." The City contributes to the Supplemental
Death Benefits Fund at a contractually required rate as determined by an annual actuarial
valuation. The rate is equal to the cost of providing one-year term life insurance. The funding
policy for the program is to assure that adequate resources are available to meet all death benefit
payments for the upcoming year; the intent is not to pre-fund retiree term life insurance during
employees' entire careers. The City contributed 100% of its required contribution for the last
three calendar years at the annual required contribution rate of .08% (2010), .08% (2011), and
.07% (2012).
53
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
V. Other Information (Continued)
I. Employee Retirement Systems and Plans (Continued)
2. Firefghters' 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 fmancial 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.
Eli ibili
The plan covers current and former firefighters of the City of Paris, Texas, as well as certain
beneficiaries. The City of Paris contributes 12% 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 12% 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
period during which they pay into and keep on deposit in the fund, the contributions required
by the fund.
The fund was amended effective February 25, 2012.
The City's annual required contribution to the plan for fiscal year 2012 was based on a payroll
of $2,459,653 and amounted to $295,159. Covered employees made contributions of
$295,159. The plan covers 38 retirees and beneficiaries, 25 fully vested active and terminated
employees, and 29 nonvested active employees.
54
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
V. Other Information (Continued)
I. Employee Retirement Systems and Plans (Continued)
2. Firefighters' Relief and Retirement Fund (Continued)
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
normally receive a monthly benefit equal to $94 multiplied by his/her years of service at
retirement. The minimum service retirement benefit is $500 per month. Service retirement
benefits are payable for the member's lifetime. In the event the member's death precedes that
of his/her spouse, two-thirds of the member's pension will be continued to the spouse
for his/her lifetime. An active member who becomes disabled will receive a monthly
disability benefit. If a member dies while in active service, his/her widow(er) will receive an
immediate monthly benefit, payable for his/her lifetime.
Annual Pension Cost
The actuarial valuation date used to determine the Annual Required Contribution for the year
ended September 30, 2012, and the most current available information required for disclosure
under Paragraph 22 of GASB Statement No. 27 is January 1, 2011. The actuarial cost method
used in the January 1, 2011, 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 430. There has been no
change in the actuarial cost method since the last actuarial valuation.
The actuarial assumptions used in the actuarial valuation performed as of January 1, 2011,
include a rate of return on the actuarial value of assets of 8% 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
27.9 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."
55
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
V. Other Information (Continued)
I. Employee Retirement Systems and Plans (Continued)
2. Firefighters' Relief and Retirement Fund (Continued)
Annual Pension Cost (Continued)
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.
Actuarial Value of Assets
Actuarial Accrued Liability (AAL)
Unfunded AAL (UAAL)
Funded Ratio
Covered Payroll
January 1,
2007 2009 2011
$ 6,901,424 $ 6,144,348 $ 6,736,683
11,368,809 12,179,917 12,964,325
$ 4,467,385 $ 6,035,569 $ 6,227,642
60.7% 50.4 % 52.0°/a
$ 1,781,420 $ 2,035,271 $ 2,196,182
UAAL as a Percentage of Covered Payroll 250.8% 296.5% 283.6%
The remainder of this page intentionally left blank.
56
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
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
Market Value as of January 1
Contributions, Interest and Dividends
Contributions by the City
Contributions by Members
Dividends and Interest
Other
Disbursements
Benefits Paid Monthly
Lump Sum Distribution
Administrative Expenses
Contributions Refunded
Net Realized and Unrealized Gains and Losses
Realized Gains (Losses)
Unrealized Gains (Losses)
Market Value as of December 31
Adjustments to Develop Actuarial Value, Net
Actuarial Value of Assets
57
December 31,
2009 2010 2011
$ 5,120,290 $ 6,036,399 $ 6,271,702
289,868 277,875 290,452
289,868 277,875 284,695
178,460 176,181 154,178
1,763 1,869 1,938
759,959 733,800 731,263
717,912
92,250
48,460
858,622
(362,736)
1,377,508
1,014,772
$ 6,036,399
882,185
100,952
35,511
1,018,648
76,309
443,842
520,151
805,619
48,051
99,690
32,3 82
985,742
193,340
(401,127)
(207,787)
6,271,702 $ 5,809,436
464,981
$ 6,736,683
City of Paris, Texas
Notes to Financial Statements
September 30, 2012
V. Other Information (Continued)
I. Employee Retirement Systems and Plans (Continued)
2. Firefighters' Relief and Retirement Fund (Continued)
Other Information — Most Current Available
Annual Required Contribution (ARC)
Interest on Net Pension Asset
Adjustment to the ARC
Annual Pension Cost (APC)
Actual Employer Contributions
Change in Net Pension Asset
September 30,
2010 2011 2012
$ 287,486 $ 254,450 $ 257,108
(26,640) (26,596) (29,188)
18,565 18,534 20,341
279,411 246,388 248,261
278,862 278,792 295,159
549 (32,404) (46,898)
Net Pension Asset, Beginning of Year (333,000) (332,451) (364,855)
Net Pension Asset, End of Year $(332,451) $(364,855) $(411,753)
The City's APC, percentage of APC contributed, and NPA for the plan for the current year and
each of the two preceding years were as follows:
Annual Percentage Net
Fiscal Year Ended Pension of APC Pension
September 30, Cost (APC) Contributed Asset
2012 $ 248,261 118.9% $ (411,753)
2011 246,3 88 113.2 (364,855)
2010 279,411 99.8 (3 32,451)
58
Nonmajor Governmental Funds
Special Revenue
Special revenue funds are used to account for specific revenues that are legally restricted to expenditures far particular
purposes.
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 and 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 not 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 and transfers.
59
City of Paris, Texas
Combining Balance Sheet - Nonmajor Governmental Funds
September 30, 2012
Special Revenue
Community
Development Library
Block Special Health Memorial
Grant Revenue Deparhnent Funds Total
ASSETS
Cash $ 30,626 $ 142,337 $ 12,819 $ 126,182 $ 311,964
Investments 331,759 - - - 331,759
Notes Receivable 52,216 - - - 52,216
Due from Other Funds - - 73,591 - 73,591
Due from Other Governments 7,896 - 215,169 - 223,065
Total Assets
$ 422,497 $ 142,337 $ 301,579 $ 126,182 $ 992,595
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts Payable $ - $ 1,384 $ - $ - $ 1,384
Total Liabilities - 1,384 - - 1,384
Fund Balances:
Nonspendable
Permanent Library Funds
Restricted for:
Notes
Law Enforcement
Health
Assigned:
Library
Community Development
Total Fund Balances
Total Liabilites and
Fund Balances
92,216 - -
- 140,953 -
_ - 301,579
- 92,216
- 140,953
- 301,579
_ _ - 126,182 126,182
330,281 - - - 330,281
422,497 140,953 301,579 126,182 991,211
$ 422,497 $ 142,337 $ 301,579 $ 126,182 $ 992,595
60
Permanent
Total
Library Nonmajor
Trust Governmental
Funds Funds
$ 309
89,323
$ 312,273
421,082
52,216
73,591
223,065
$ 89,632 $ 1,082,227
$ - $ 1,384
- 1,384
89,632 89,632
- 92,216
- 140,953
- 301,579
- 126,182
- 330,281
89,632 1,080, 843
$ 89,632 $ 1,082,227
61
Schedule 1
City of Paris, Texas
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Govemmental Funds
For the Year Ended September 30, 2012
Revenues:
Memorial Donations
Interest Earned
Grant Revenue
Local Revenue
Total Revenues
Expenditures:
Municipal Court
Community Development
Police
Health
Library
Total Expenditures
Excess of Revenues Over
Expenditures
Other Financing Uses -
Transfers Out
Special Revenue Permanent
Community
Development Library Library
Block Special Heaith Memorial Trust
Grant Revenue Deparhnent Funds Total Funds
Schedule 2
Total
Nonmaj or
Governmental
Funds
g _ $ _ $ - $ 4,239 $ 4,239 $ - $ 4,239
9,647 808 - 822 11,277 1,112 12,389
70,696 - 600,138 - 670,834 - 670,834
- 38,482 441,982 - 480,464 - 480,464
80,343 39,290 1,042,120 5,061 1,166,814 1,112 1,167,926
76,196
76,196
4,147
20,336 - - 20,336 - 20,336
_ - - 76,196 - 76,196
10,368 - - 10,368 - 10,368
- 955,930 - 955,930 - 955,930
- - 2,128 2,128 - 2,128
30,704 955,930 2,128 1,064,958 - 1,064,958
8,586 86,190 2,933
101,856 1,112 102,968
Net Changes in
Fund Balances 4,147 8,586 86,190 2,933 101,856 1,112 102,968
Fund Balances - Beginning 418,350 132,367 215,389 123,249 889,355 88,520 977,875
Fund Balances - Ending $ 422,497 $ 140,953 $ 301,579 $ 126,182 $ 991,211 $ 89,632 $1,080,843
62
Revenues:
Interest Earned
Local Revenue
Total Revenues
Expenditures:
Municipal Court
Police Department
Total Expenditures
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, 2012
Schedule 3
Budgeted Amounts
�:� : Variance with
Original Final Actual Final Budget
$ - $ - $ 808 $ 808
37,098 37,098 38,482 1,384
37,098 37,098 39,290 2,192
139,416 139,416 20,336
33,385 33,385 10,368
172, 8 O 1 172, 801 3 0, 704
119,080
23,017
142,097
Excess (Deficiency) of Revenues
Over Expenditures -
Net Changes in Fund Balance (135,703) (135,703) 8,586 144,289
Fund Balance - Beginning 132,367 132,367 132,367 -
Fund Balance - Ending $ (3,336) $ (3,336) $ 140,953 $ 144,289
63
City of Paris, Texas
Health Deparhnent Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
For the Year Ended September 30, 2012
Revenues:
Grant Revenue
Local Revenue
Total Revenues
Expenditures:
Health
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures -
Net Changes in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending
Budgeted Amounts
Schedule 4
Variance with
Original Final Actual Final Budget
$ 617,433 $ 617,433 $ 600,138 $ (17,295)
348,935 348,935 441,982 93,047
966,368 966,368 1,042,120 75,752
968,413 968,413
968,413 968,413
(2,045) (2,045)
215,389 215,389
$ 213,344 $ 213,344
64
955,930 12,483
955,930 12,483
86,190 88,235
215,389 -
$ 301,579 $ 88,235
City of Paris, Texas
Debt Service Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
For the Year Ended September 30, 2012
Budgeted Amounts
Schedule 5
Variance with
Original Final Actual Final Budget
Revenues:
Ad Valorem Taxes $ 1,438,852 $ 1,438,852 $ 1,583,842 $ 144,990
Interest Earned - - 12,427 12,427
Total Revenues 1,438,852 1,438,852 1,596,269 157,417
Expenditures:
Bond Principal Retirement
Interest and Fiscal Charges
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures -
Net Changes in Fund Balance
1,080,200 1,080,200 1,080,200 -
426,847 426,847 424,730 2,117
1,507,047 1,50�,047 1,504,930 2,117
(68,195) (68,195) 91,339 159,534
Fund Balance - Beginning 2,706,272 2,706,272 2,706,272 -
Fund Balance - Ending $ 2,638,077 $ 2,638,077 $ 2,797,611 $ 159,534
65
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, 2012
Revenues:
Interest Earned
Total Revenues
Expenditures:
City Council
Police
Fire
Community Development
Engineering
Parks and Recreation
Solid Waste
Streets and Highways
Total Expenditures
Deficiency of Revenues
Over Expenditures
Other Financing Sources (Uses):
Transfers In
Transfers Out
Certificates of Obligation Issued
Net Changes in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending
Prior Current Totai
Years Year to Date
Schedule 6
Project
Authorization
(Budget)
$ 31,323 $ 19,535 $ 50,858 $ -
31,323 19,535 50,858 -
27,971 48,959
- 285,630
131,970 782,383
79,684 36,860
17,867 17,688
223,952 177,678
254,322 314,489
2,587,725 (156,140)
3,323,491 1,507,547
76,930 2,420
285,630 261,865
914,353 875,770
116,544 109,700
35,555 35,570
401,630 754,005
568,811 573,350
2,431,585 3,314,380
4,831,038 5,927,060
(3,292,168) (1,488,012) (4,780,180) (5,927,060)
2,162,384 3,556,535 5,718,919 5,718,919
(1,325,406) (788,658) (2,114,064) (2,114,064)
3,005,000 - 3,005,000 3,005,000
$ 549,810 1,279,865 $ 1,829,675 $ 682,795
720,115
$ 1,999,980
66
CAPITAL ASSETS USED 1N
THE OPERATION OF GOVERNMENTAL FUNDS
City of Paris, Texas
Capital Assets Used in the Operation of Governmental Funds
Comparative Schedules by Source
September 30, 2012 and 2011
Governmental Funds Capital Assets:
Land
Buildings
Improvements Other Than Buildings
Machinery and Equipment
Infrastructure
Construction in Progress
Total Governmental Funds Capital Assets
Investments in Governmental Funds Capital Assets by Source:
General Fund
Capital Projects Funds
Donations
Total Investments in Governmental Funds Capital Assets by Source
67
2012
$ 5,912,108
14,601,581
7,860,667
19,654,343
39,025,955
607,529
$ 87,662,183
$ 58,527,388
22,178,388
6,956,407
$ 87,662,183
Schedule 7
2011
$ 5,912,108
15,430,302
5,645,638
17,614,232
39,081,870
342,635
$ 84,026,785
$ 57,990,426
20,722,078
5,314,281
$ 84,026,785
City of Paris, Texas
Capital Assets Used in the Operation of Governmental Funds
Schedule by Function and Activity
September 30, 2012
Improvements Machinery
Other Than and
Function and Activity Land Buildings Buildings Equipment
General Government:
Council
Manager
Attorney
Clerk
Finance
Total General Government
Public Safety:
Police
Fire
Total Public Safety
Public Works:
Community Development
Engineering
Public Works
Parks and Recreation
Solid Waste
Streets and Highways
Traffic and Public Lighting
Garage
Other Unclassified
Total Public Works
Emergency Medical Service
Cox Field
Library
Total Governmental Funds
Capital Assets
$ 339,906 $ 2,457,709 $ 99,522 $ 571,904
_ _ - 10,187
_ - 9,948 113,768
- 14,737 - 71,230
_ _ - 395,261
339,906 2,472,446 109,470 1,162,350
619,585 5,082,541 808,022 3,627,207
159,268 2,189,378 231,972 3,319,886
778,853 7,271,919 1,039,994 6,947,093
3,299,676 - 377,509 198,551
- 10,747 - 210,750
125,543 - - 842,073
112,230 92,268 3,427,702 941,495
626,395 - 42,079 1,697,042
138,590 88,220 80,192 2,353,625
_ _ - 189,023
- 95,121 - 84,966
_ - 52,361 172,694
4,302,434 286,356 3,979,843 6,690,219
- 94,177 6,200 2,541,759
429,120 3,428,970 2,646,618 221,928
61,795 1,047,713 78,542 2,090,994
$ 5,912,108 $ 14,601,581 $ 7,860,667 $ 19,654,343
68
Infrastructure Total
$ - $ 3,469,041
- 10,187
- 123,716
- 85,967
- 395,261
- 4,084,172
- 10,137,355
- 5,900,504
- 16,037,859
- 3,875,736
- 221,497
- 967,616
- 4,573,695
- 2,365,516
39,025,955 41,686,582
- 189,023
- 180,087
- 225,055
39,025,955 54,284,807
- 2,642,136
- 6,726,636
- 3,279,044
$ 39,025,955 $ 87,054,654
69
Schedule 8
City of Paris, Texas
Capital Assets Used in the Operation of Governmental Funds
Schedule of Changes by Function and Activity
For the Year Ended September 30, 2012
Governmental Funds
Capital Assets
Function and Activity September 30, 2011 Increases
General Government:
Council
Manager
Attorney
Clerk
Finance
Total General Government
Public Safety:
Police
Fire
Total Public Safety
Public Works:
Community Development
Engineering
Public Works
Parks and Recreation
Solid Waste
Streets and Highways
Traffic and Public Lighting
Garage
Other Unclassified
Total Public Works
Emergency Medical Service
Cox Field
Library
Total Governmental Funds
Capital Assets
$ 3,463,041 $ 6,000 $
10,187 -
123,716 -
85,967 -
395,261 - _
4,078,172 6,000 _
Schedule 9
Governmental Funds
Capital Assets
Decrases September 30, 2012
- $ 3,469,041
- 10,187
- 123,716
- 85,967
- 395,261
- 4,084,172
10,690,231 463,951 1,016,827 10,137,355
5,107,310 793,194 - 5,900,504
15,797,541 1,257,145 1,016,827 16,037,859
3,838,876 36,860 - 3,875,736
203,809 17,688 - 221,497
967,616 - - 967,616
4,334,922 238,773 - 4,573,695
2,051,027 314,489 - 2,365,516
41,439,169 403,543 156,140 41,686,582
189,023 - - 189,023
180,087 - - 180,087
118,245 106,810 - 225,055
53,322,774 1,118,163 156,140 54,284,807
2,385,083 257,053 - 2,642,136
4,821,536 1,905,100 - 6,726,636
3,279,044 - - 3,279,044
$ 83,684,150 $ 4,543,461 $ 1,172,967 $ 87,054,654
70
STATISTICAL SECTION
City of Paris, Texas
Net Assets by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Unaudited
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
Business-type Activities:
Invested in Capital Assets,
Net of Related Debt
Restricted
Unrestricted
Total Business-type Activities,
Net Assets
Primary Government:
Invested in Capital Assets,
Net of Related Debt
Restricted
Unrestricted
Total Primary Government,
Net Assets
$ 35,572,332 $ 33,287,770 $ 37,575,273 $ 39,804,063
$ 24,433,769 $ 25,324,447 $ 24,119,931 $ 23,590,438
5,668,693 3,935,871 3,936,107 2,864,698
3,675,892 4,592,176 3,487,041 6,282,200
$ 33,778,354 $ 33,852,494 $ 31,543,079 $ 32,737,336
$ 44,276,171 $ 45,272,274 $ 49,413,494 $ 52,525,606
16,683,056 11,485,686 9,025,350 4,114,584
8,391,459 10,382,304 10,679,508 15,901,209
$ 69,350,686 $ 67,140,264 $ 69,118,352 $ 72,541,399
71
2007 2008
$ 28,296,810 $ 27,214,018
1,356,091 2,634,911
12,344,117 12,724,897
Fiscal Year
2009 2010 2011
$ 26,663,557 $ 26,871,917 $ 25,311,134
952,225 5,454,967 3,958,563
15,119,471 10,358,596 12,801,387
Table 1
2012
$ 27,532,353
5,421,971
12,700,759
$ 41,997,018 $ 42,573,826 $ 42,735,253 $ 42,685,480 $ 42,071,084 $ 45,655,083
$ 23,735,238 $ 24,810,704 $ 26,288,945 $ 28,883,901 $ 31,855,910 $ 34,499,646
3,258,469 2,810,233 3,813,439 1,636,722 - -
6,530,918 7,362,285 7,237,951 9,815,653 11,416,134 8,496,996
$ 33,524,625 $ 34,983,222 $ 37,340,335 $ 40,336,276 $ 43,272,044 $ 42,996,642
$ 52,032,048 $ 52,024,722 $ 52,952,502
4,944,480 5,445,144 4,765,664
18,545,115 20,087,182 22,357,422
$ 55,755,818 $ 57,167,044 $ 62,031,999
7,091,689 3,958,563 5,421,971
20,174,249 24,217,521 21,197,755
$ 75,521,643 $ 77,557,048 $ 80,075,588 $ 83,021,756 $ 85,343,128 $ 88,651,725
72
Expenses
Governmental Activities:
General Government
Finance
Public Safety
Public Works
Health
Library Service
Cox Field Airport
Interest on Long-term Debt
Total Governmental
Activities Expenses
Business-type Activities:
Water and Sewer Services
Total Primary Government
Expenses
Program Revenues
Governmental Activities:
Charges for Services:
General Government
Public Safety
Public Works
Health
Library Services
Operating Grants
and Contributions
Capital Grants
and Contributions
Total Governmental Activities
Program Revenues
Business-type Activities:
Charges for Services:
Water and Sewer Service
Total Primary Govemment
Program Revenues
City of Paris, Texas
Changes in Net Assets
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Unaudited
Fiscal Year
2003 2004 2005 2006
$ 2,209,909 $ 2,275,969 $ 2,188,590 $ 1,391,781
487,253 540,815 515,965 556,076
9,228,741 9,554,945 9,825,404 9,138,101
7,500,073 8,102,061 6,957,522 6,826,116
2,881,164 3,724,003 2,904,920 2,889,602
1,165,646 917,450 718,779 745,653
253,822 256,149 258,496 264,181
932,025 1,022,551 627,691 614,799
24,658,633 26,393,943 23,997,367 22,426,309
9,647,360 9,997,416 10,554,510 10,912,834
$ 34,305,993 $ 36,391,359 $ 34,551,877 $ 33,339,143
$ 133,746 $ 125,001 $ 184,469 $ 167,032
573,497 485,266 379,992 698,497
1,550,057 1,602,974 1,718,241 1,609,895
2,056,370 3,000,742 1,648,008 2,389,663
55,910 - 38,960 31,532
2,892,360 3,442,169 2,823,843 1,660,785
- - 194,227 230,177
7,261,940 8,656,152 6,987,740 6,787,581
10,412,475 10,929,862 12,160,851 12,879,592
$ 17,674,415 $ 19,586,014 $ 19,148,591 $ 19,667,173
73
Table 2
Fiscal Year
2007 2008 2009 2010 2011 2012
$ 1,722,181 $ 2,076,554 $ 3,590,461 $ 2,632,370 $ 2,890,290 $ 2,094,110
426,485 467,865 449,227 481,106 437,320 480,144
9,045,085 9,737,225 9,498,749 10,021,261 9,880,712 10,771,351
7,217,841 7,705,564 6,905,252 7,279,655 7,667,367 7,568,269
2,897,836 3,174,713 3,133,324 3,184,085 3,202,551 3,416,360
690,413 790,216 730,925 751,523 719,240 712,033
236,414 262,533 294,089 225,565 220,027 261,463
584,861 557,588 507,788 460,678 438,460 342,554
22,821,116 24,772,258 25,109,815 25,036,243 25,455,967 25,646,284
10,839,828 10,959,294 11,197,470 10,423,943 10,694,363 11,008,967
$ 33,660,944 $ 35,731,552 $ 36,307,285 $ 35,460,186 $ 36,150,330 $ 36,655,251
$ - $ - $ -
806,321 1,029,991 676,229
1,626,253 1,690,210 1,693,133
2,406,995 2,710,279 2,638,943
19,601 22,464 21,335
1,244,186 1,407,529 1,317,832
$ - $ -
757,291 606,792
1,709,552 1,775,841
2,595,679 2,608,306
21,123 19,707
1,431,301 1,953,631
$ -
729,267
1,788,753
2,721,421
20,877
1,305,387
25,599 55,152 224,458 355,429 205,628 636,974
6,128,955 6,915,625 6,571,930 6,870,375 7,169,905 7,202,679
12,359,516 13,012,253 13,616,713 13,650,486 13,798,137 13,852,441
$ 18,488,471 $ 19,927,878 $ 20,188,643 $ 20,520,861 $ 20,968,042 $ 21,055,120
74
Net (Expense)/Revenue
Governmental Activities
Business-type Activities
Total Primary Government,
Net Expense
City of Paris, Texas
Changes in Net Assets
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Unaudited
Fiscal Year
2003 2004 2005 2006
$(17,396,693) $(17,737,791) $(17,009,627) $(15,638,728)
765,115 932,446 1,606,341 1,966,758
$(16,631,578) $(16,805,345) $(15,403,286) $(13,671,970)
General Revenues and Other Changes in Net Assets
Governmental Activities:
Taxes
Properiy $ 7,260,943
Sales 4,726,406
Franchise 3,034,049
Hotel Occupancy 310,920
Investment Earnings 155,320
Grants, Donations, and Miscellaneous -
$ 7,456,850
4,794,743
2,465,130
302,334
127,251
$ 7,733,700
5,066,926
3,062,589
314,404
112,310
418,603
$ 7,583,269
5,401,371
3,053,671
396,333
342,306
568
Transfers (2,603,160) 1,235,454 4,588,598 1,090,000
SpecialItem - (928,533) - -
Total Governmental Activities 12,884,478 15,453,229 21,297,130 17,867,518
Business-type Activities:
Investment Earnings
Contribution
Transfers
Special Item
Total Business-type Activities
Total Primary Government
Changes in Net Assets
Governmental Activities
Business-type Activities
Total Primary Government
243,952 191,576 70,731 284,899
- 593,660 602,111 32,600
2,603,160 (1,235,454) (4,588,598) (1,090,000)
- (408,088) - -
2,847,112 (858,306) (3,915,756) (772,501)
$ 15,731,590 $ 14,594,923 $ 17,381,374 $ 17,095,017
$ (4,512,215) $ (2,284,562) $ 4,287,503 $ 2,228,790
3,612,227 74,140 (2,309,415) 1,194,257
$ (899,988) $ (2,210,422) $ 1,978,088 $ 3,423,047
75
Table 2
(Continued)
Fiscal Year
2007 2008 2009 2010 ZO11 2012
$(16,692,161) $(17,856,633) $(18,537,885) $(18,165,868) $(18,095,410) $(18,443,605)
1,519,688 2,052,959 2,419,243 3,226,543 3,103,774 2,843,474
$(15,172,473) $(15,803,674) $(16,118,642) $(14,939,325) $(14,991,636) $(15,600,131)
$ 7,924,453 $ 7,904,936 $ 7,794,381 $ 7,853,487 $ 7,620,281 $ 7,619,472
5,673,616 5,696,174 6,441,260 5,843,494 6,033,469 5,993,859
3,082,183 2,898,214 2,859,338 2,743,214 2,719,496 2,731,097
430,991 434,441 526,998 500,755 449,213 498,667
571,678 399,676 174,636 113,006 84,327 55,875
102,195 - - - - 1,642,126
1,100,000 1,100,000 902,699 1,062,139 764,880 3,486,508
18,885,116 18,433,441 18,699,312 18,116,095 17,671,666 22,027,604
367,601 309,586 212,479 103,220 162,374 63,722
- 196,052 628,090 728,317 434,500 303,910
(1,100,000) (1,100,000) (902,699) (1,062,139) (764,880) (3,486,508)
(732,399) (594,362) (62,130) (230,602) (168,006) (3,118,876)
$ 18,152,717 $ 17,839,079 $ 18,637,182 $ 17,885,493 $ 17,503,660 $ 18,908,728
$ 2,192,955 $ 576,808 $ 161,427 $ (49,773) $ (636,302) $ 3,583,999
787,289 1,458,597 2,357,113 2,995,941 2,935,768 (275,402)
$ 2,980,244 $ 2,035,405 $ 2,518,540 $ 2,946,168 $ 2,299,466 $ 3,308,597
76
General Fund
Nonspendable
Unassigned
Total General Fund
All Other Governmental Funds
Reserved
Unreserved, Reported in:
Special Revenue Funds
Permanent Funds
Nonspendable
Restricted
Assigned
Total All Other Governmental Funds
City of Paris, Texas
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Unaudited
Fiscal Year
2003 2004 2005 2006
2007
$ 217,610 $ 155,608 $ 153,043 $ 118,925 $ 202,440
5,502,760 3,735,128 5,375,749 8,874,883 11,581,136
$ 5,720,370 $ 3,890,736 $ 5,528,792 $ 8,993,808 $ 11,783,576
$ 8,071,051 $ 7,776,342 $ 4,831,754 $ 997,192 $ 1,440,583
800,930 909,520 1,006,385 908,559 924,573
77,454 (196,478) 73,373 76,552 80,468
$ 8,949,435 $ 8,489,384 $ 5,911,512 $ 1,982,303 $ 2,445,624
(1) For 2011 and 2012, the fund balance of All Other Governmental Funds is classified consistent with recent
pronouncements (GASB 54). Previous years have not been restated.
77
Table 3
Fiscai Year
Zoos 2009 Zolo Zoii�i� Zoi2�i�
$ 251,411 $ 215,128 $ 214,932 $ 199,519 $ 218,117
11,478,815 13,751,446 11,376,619 12,156,169 11,764,593
$ 11,730,226 $ 13,966,574 $ 11,591,551 $ 12,355,688 $ 11,982,710
$ 2,704,009 $ 1,008,826 $ 5,540,873 $ - $ -
811,645 792,271 781,230 - -
82,762 84,365 86,564 - -
_ - - 88,520 89,632
_ - - 3,870,043 5,332,339
_ - - 532,263 456,463
$ 3,598,416 $ 1,885,462 $ 6,408,667 $ 4,490,826 $ 5,878,434
78
City of Paris, Texas
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Unaudited
Revenues:
Taxes
Licenses and Permits
Fines and Fees
Use of Money and Property
Public Safety
Sanitation Fees
Health
Intergovernmental Revenues
Other
Total Revenues
Expenditures:
Current:
General Government
Finance
Public Safety
Public Works
Health Deparhnent
Emergency Medical Service
Insurance Trust Fund
Library
Cox Field Airport
Other
Debt Service:
Interest
Principal
Capital Outlay
Total Expenditures
Excess (Deficiency) of Revenues Over Expenditures
Other Financing Sources (Uses):
Proceeds of Capital Leases
Transfers In
Transfers Out
Certificates of Obligation Issued
Total Other Financing Sources (Uses)
Increase (Decrease) in Reserve for Inventory
Net Changes in Fund I3alances
Debt Service as a Percentage of Noncapital Expenditures
Source: City of Paris
Note: (1) Included in General Fund 2005
79
Fiscal Year
2003 2004 2005
$15,323,499 $14,959,510 $16,109,433
80,666 73,163 98,611
472,857 501,124 556,895
265,980 247,260 357,262
172,955 208,878 230,029
1,349,711 1,346,443 1,361,406
2,043,589 2,246,352 2,083,448
2, 715,441 2,493 ,221 2,272,486
302,489 852,469 470,791
22,727,187 22,928,420 23,540,361
1,577,462 1,612,645
476,883 533,799
8,675,218 9,070,046
5,957,419 6,473,823
800,717 797,474
1,790,799 1,844,574
- 879,643 -
1,034,918 795,347 601,885
132,347 133,295 134,542
505,553 484,044 535,395
1,545,542
508,968
9,136,810
5,324,999
844,625
1,862,313
744,280 796,024 670,102
862,838 1,225,517 1,065,372
3,664,855 1,833,954 3,163,974
26,223,289 26,480,185 25,394,527
(3,496,102) (3,551,765) (1,854,166)
59,980 87,114 -
1,352,661 1,929,831 1,799,397
(1,062,866) (694,377) (881,956)
349,775 1,322,568 917,441
44,848 (60,488) (3,091)
$ (3,101,479) $ (2,289,685) $ (939,816;
7.15% 8.20% 7.81%
[[O77
Fiscal Year
2006 2007 2008 2009
Table 4
2010 2011 2012
$16,435,160 $17,116,584 $16,909,018 $17,606,479 $16,941,815 $16,824,545 $16,822,577
87,137 106,997 101,776 171,906 88,935 112,142 145,792
543,606 571,165 652,804 554,424 526,668 501,601 550,496
493,234 721,799 532,435 317,028 274,986 313,948 210,476
212,729 34,151 67,335 65,283 57,369 40,297 -
1,287,138 1,488,874 1,319,923 1,306,867 1,347,707 1,461,736 1,468,917
2,489,961 2,935,839 2,646,417 2,583,958 2,621,420 2,578,496 2,818,196
1,867,098 613,665 1,504,435 1,575,080 1,736,611 1,768,322 1,858,092
247,234 374,545 302,120 221,114 301,069 247,354 271,709
23,663,297 23,963,619 24,036,263 24,402,139 23,896,580 23,848,441 24,146,255
1,210,298
549,079
8,653,589
5,193,512
822,734
1,890,825
621,327
143,620
60,011
966,627
414,080
8,564,024
5,518,798
816,419
1,979,104
570,394
117,574
752,256
962,561
448,951
9,283,682
5,562,625
925,195
2,128,274
675,209
145,052
1,057,566
1,075,990
430,364
9,303,726
5,591,689
900,945
2,111,069
616,148
180,364
2,360,244
1,109,767
462,282
9,489,393
5,509,576
942,596
2,095,897
642, 83 0
112,800
1,468,366
1,219,607
425,455
9,154,646
7,459,432
908,339
2,146,210
630,977
107,276
1,545,147
1,029,702
473,719
9,659,131
5,757,456
955,930
2,302,247
632,515
150,848
1,434,177
622,773 596,043 563,669 518,682 443,618 945,016 1,080,200
864,958 968,598 1,304,230 847,851 871,978 480,448 424,730
4,550,646 1,269,778 1,028,778 808,089 2,666,238 815,623 2,649,513
25,183,372 22,533,695 24,085,792 24,745,161 25,815,341 25,838,176 26,550,168
(1,520,075) 1,429,924 (49,529) (343,022) (1,918,761) (1,989,735) (2,403,913)
- 639,650
1,152,590 1,984,963
(62,590) (884,963)
1,090,000 1,739,650
2,764,641 3,359,644 5,338,879
(1,664,641) (2,456,945) (4,276,740)
- - 3,005,000
1,100,000 902,699 4,067,139
1,176,462 5,100,935
(411,581) (1,614,427)
764,881 3,486,508
(34,118) 83,515 48,971 (36,283) (196) (15,414) 18,599
$ (464,193) $ 3,253,089 $ 1,099,442 $ 523,394 $ 2,148,182 $(1,240,268) $ �,101,194
7.74% 7.60% 8.17% 5.46% 5.68% 6.11 % 6.44%
80
Roll
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Fiscal
Year
2002-03
2003-04
2004-OS
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
City of Paris, Texas
Properiy Tax Levies and Collections (1)
Last Ten Fiscal Years
Unaudited
Total
Tax Levy
$7,303,340
7,470,691
7,762,498
7,670,001
7,935,867
7,952,325
7,837,300
7,797,457
7,651,941
7,543,165
Source:
City of Paris
Lamar County Appraisal District
Percent
Collection of Current
of Current Levy
Year's Collected Delinquent
Taaces During During Tax Totai
Fiscal Year Fiscal Year Collections Collections
$ 7,003,492 95.89% $ 107,759 $ 7,111,251
7,180,706 96.12 105,582 7,286,288
7,422,657 95.62 121,826 7,544,483
7,312,326 9534 101,415 7,413,741
7,683,568 96.82 91,574 7,775,142
7,696,134 96.78 24,297 7,720,431
7,579,213 96.71 68,332 7,647,545
7,624,228 97.78 66,691 7,690,919
7,418,544 96.95 57,409 7,475,953
7,387,161 97.93 - 7,387,161
Note:
(1) Taxes stated are for General Fund and Debt Service Funds.
81
Ratio
of Total
Collections
To Total
Tax Levy
9737%
97.53
97.19
96.66
97.97
97.08
97.58
98.63
97.70
97.93
Outstanding
Delinquent
Taxes
$ 30,509
42,085
49,041
52,363
53,058
56,786
67,925
86,464
110,655
156,004
Ratio of
Delinquent
Taxes
To Total
Tax Levy
.42%
.56
.63
.68
.67
.71
.87
1.11
1.45
2.07
82
Table 5
City of Paris, Texas Table 6
Property Tax Rates-All Direct and Overlapping Governments
(Per $100 of Assessed Value)
Last Ten Fiscal Years
Unaudited
2002-03 2003-04 2004-OS 2005-06 2006-07 2007-08 2008-09 2009-10 20I0-11 2011-12
City of Pazis
O&M $ 0.56104 S 0.57289 S 0.57977 $ 0.56650 $ 0.49294 $ 0.46526 $ 0.43113 $ 0.42439 S 0.41713 S 0.41000
I& S 0.13396 0.12211 O.11248 0.12575 0.09931 0.09474 0.08887 0.09561 0.10287 0.11000
Total $ 0.69500 S 0.69500 S 0.69225 S 0.69225 $ 0.59225 $ 0.56000 $ 0.52000 $ 0.52000 $ 0.52000 S 0.52000
Lamaz County
O&M $ 036210 S 035730 $ 038060 $ 0.41320 $ 0.42I40 $ 0.42340 $ 0.41430 $ 0.40360 $ 039420 5 0.39990
1& S 0.01960 0.03170 0.03070 0.02220 0.02150 0.01950 0.01860 0.01900 0.01890 0.01930
Total E 0.38170 S 0.38900 S 0.41130 S 0.43540 $ 0.44290 S 0.44290 S 0.43290 $ 0.42260 $ 0.41310 $ 0.41920
Paris[SD
O&M S I.50000 S I38500 $ 1.50000 S t.50000 $ 137000 $ 1.04000 E 1.04000 $ 1.17000 $ l.(7000 $ 1.17000
I& S 0.09000 0.21800 0.09200 0.08200 0.08200 0.40500 0.40500 0.15500 015500 025500
Tota] S 1.59000 $ I.60300 $ 1.59200 $ 1.58200 $ 1.45200 $ 1.44500 $ 1.44500 $ 132500 $ 1.42500 $ 1.42500
Chisum ISD
O&M $ 1.50000 S 1.48000 $ 1.48000 $ I.50000 $ 137000 S I.04005 $ 1.04000 $ I.04000 $ 1.04000 $ 1.04000
I& S 0.15500 0.17500 0.16800 0.16800 0.16400 0.15570 0.20000 O.I8000 O.I6000 O.16000
Total S I.65500 S I.65500 S 1.64800 $ I.66800 $ 1.53400 S 1.19575 S 1.24000 $ 122000 $ 1.20000 S 120000
NoRh Lamaz ISD
O&M 5 1.41740 S L.46810 S 1.45840 $ 1.45910 $ 133370 $ 1.04005 $ 1.04000 $ 1.04000 $ 1.04000 $ 1.04000
[& S 0.22810 O.I7740 0.13060 0.08620 0.08630 0.12811 0.11811 0.10811 0.09650 0.08650
Total S L64550 S L64550 S 1.58900 $ L54530 $ 1.42000 $ 1.16816 S 1.15811 S 1.14811 $ Lt3650 S L12650
Paris Iunior College
O&M S 0.17830 S O.I9070 S O.19220 S 0.19220 $ 0.19220 $ 0.19800 S 0.18740 $ 0.18500 S 0.I8974 S 0.19000
t & S 0.002I0 0.00250 - '
Total S 0.18040 S O.I9320 S O.19220 $ 0.19220 $ 0.19220 $ 0.19800 S 0.18740 S 0.18500 $ O.18974 $ 0.19000
83
Roll
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Year
2002-03
2003-04
2004-OS
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
Sources:
City of Paris
Lamar County Appraisal District
City of Paris, Texas
Assessed and Estimated Actual Value of Properiy
Last Ten Fiscal Years
Unaudited
Real Property
Estimated
Assessed Actual
Value Value
$ 608,127,686 $1,242,258,670
621,789,647 1,231,490,850
660,183,973 1,209,772,832
675,842,648 1,236,845,116
913,539,354 1,267,999,388
947,674,496 1,3 07,620,265
999,644, 811 1,428,948,675
976,009,565 1,421,783,219
927,464,815 1,420,23 8,161
918,495,080 1,402,956,164
84
Personal Property
Estimated
Assessed Actual
Value Value
$ 442,746,610 $ 512,931,510
452,957,240 525,642,730
461,154,820 528,460,080
432,136,840 501,641,670
426,412,920 503,646,600
471,431,700 547,352,320
486,833,180 602,795,000
529,489,256 647,710,890
551,247,563 622,482,077
543,332,657 623,174,818
Exemptions
$ 704,315,884
682,386,693
616, 894,119
630,507,298
431,693,714
435,866,389
545,265,684
563,995,288
564,007,862
564,303,245
Assessed
V alue
$1,050, 874,296
1,074,746,887
1,121,338,793
1,107,979,488
1,339,952,274
1,419,106,196
1,486,477,991
1,505,498,821
1,478,712,378
1,461, 827,73 7
Total
Estimated
Actual
Value
$1,755,190,180
1,757,133,580
1,738,232,912
1,738,486,786
1,771,645,988
1,854,972,585
2,031,743,675
2,069,494,109
2,042,720,238
2,026,130,982
85
Assessed
Value as a
Percentage of
Actual Value
59.87%
61.16
64.51
63.73
75.63
76.50
73.16
72.75
7239
72.15
Total Direct
Tax Rate
0.69500
0.69500
0.69225
0.69225
0.59225
0.56000
0.52000
0.52000
0.52000
0.52000
Table 7
City of Paris, Texas
Principal Property Taxpayers
September 30, 2012 and 2003
Unaudited
Taxpayer Type of Business
Lamar Power Partners
Kimberly-Clark Corp. - A
Campbell Soup Company - A
Campbell Soup Company - B
Paris Regional Medical Center - A
Paris Generation, LP
Oncor Electric Delivery
Silgan Can Company
Kimberly-Clark Corp.- B
Paris Regional Medical Center - B
CFS Air, LLC
Earthgrains Baking Company
S.W. Beil Telephone
Walmart Store, Inc.
Totals
Source:
Lamar County Appraisal District
Electric Utility
Disposable Diapers
Food Manufacturer
Warehouse
Hospital
Electric Utility
Electric Utility
Can Manufacturer
Warehouse
Hospital
Aviation
Food Manufacturer
Telephone Utility
Retailer
86
Taxable
Assessed
V alue
$ 205,185,800
116,106,927
53,439,580
34,669,630
31,732,500
22,581,100
20,053,960
14,987,410
11,314,260
10,402,160
$ 520,473,327
2012
Rank
1
2
3
4
5
6
7
8
9
10
Percentage
of Total
Freeze Adjusted
Taxable
Assessed Value
14.81%
838
3.86
2.50
2.29
1.63
1.45
1.08
0.82
0.75
37.57%
2003
Taxable
Assessed
V alue Rank
$ '
126,554,880
48,247,740
12,362,100
36,750,000
17,988,310
25,318,610
20,946,380
12,146,240
8,798,080
8,214,550
$ 317,326,890
i
2
7
3
6
4
5
8
9
10
Percentage
of Total
Taxable
Assessed Value
-%
i i.%i
4.49
1.15
3.42
1.67
235
1.95
1.13
0.82
0.76
29.51%
87
Table 8
Fiscal
Year
2002-03
2003-04
2004-OS
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
Estimated
Population
26,255
26,374
26,493
26,612
26,732
26,852
26,972
27,092
25,337
25,337
Source:
City of Paris
City of Paris, Texas
Ratio of Net General Obligation Bonded Debt to
Assessed Value and Net General Obligation Bonded Debt Per Capita
Last Ten Fiscal Years
Unaudited
Taxable
Assessed
Value
$1,050,874,296
1,074,746,887
1,121,338,793
1,107,979,488
1,339,952,274
1,419,106,196
1,486,477,991
1,505,498,821
1,478,712,378
1,461,827,737
Gross Less Debt
General Service Net General
Bonded Debt Funds Bonded Debt
$19,240,000 $ 911,685 $18,328,315
18,235,000 1,087,396 17,147,604
13,776,800 725,394 13,051,406
13,054,000 751,574 12,302,426
12,296,600 736,869 11,559,731
11,504,600 741,912 10,762,688
10,680,400 712,570 9,967,830
12,766,600 2,628,654 10,137,946
11,830,800 2,706,272 9,124,528
10,750,600 2,797,611 7,952,989
88
Ratio
of Net
General
Bonded
Debt To
Assessed
Value
1.74%
1.60
1.16
1.11
0.86
0.76
0.67
0.67
0.62
0.54
Table 9
Net
General
Bonded
Debt
Per
Capita
$ 698.09
650.17
492.64
462.29
432.43
400.82
369.56
374.20
360.13
313.89
Fiscal
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
City of Paris, Texas
Ratio of Outstanding Debt by Type
Last Ten Fiscal Years
Unaudited
Governmental Activities
General
Obligation Capital
Bonds Leases Other
$ 19,240,000
18,235,000
13,776,800
13,054,000
12,296,600
11,504,600
10,680,400
12,766,600
11,830,800
10,750,600
$ 609,83 3
476,429
238,734
103,798
539,832
15,291
$ 62,546
55,996
49,119
41,897
34,315
26,354
17,994
9,216
Source:
City of Paris
(1) Information not available
(2) See Table 14 for personal income and population data
89
Business-Type Activities
Water and Capital
Sewer Bonds Leases Other
$29,565,000 $ 21,329 $ 696,236
27,620,000 6,459 668,251
29,053,200 - 639,388
26,451,000 - 609,619
23,733,400 101,665 578,917
20,890,400 56,793 547,251
17,914,600 - 514,590
14,638,400 - 480,909
11,254,200 - -
7,764,400 - -
Total Percentage
Primary of Personal Per
Government Income (2) Capita
$ 50,194,944
47,062,135
43,757,241
40,260,314
37,284,729
33,040,689
29,127,584
27,895,125
23,085,000
18,515,000
4.44%
4.03
3.65
3.15
2.76
2.28
(1)
(1)
(1)
(1)
$ 1,912
1,784
1,652
1,513
1,395
1,231
1,080
1,030
911
733
90
Table 10
City of Paris, Texas
Direct and Overlapping
Governmental Activities Debt
September 30, 2012
Unaudited
Taxing Jurisdiction
Lamar County
Paris Independent School District
Chisum Independent School District
North Lamar Independent School District
Subtotal Overlapping Debt
City of Paris
Total Direct and Overlapping Debt
Per Capita Direct and Overlapping Funded Debt
General
Obligation
Bonded Debt
Outstanding
$ 4,542,496
53,428,270
9,590,000
3,300,000
70,860,766
10,750,600
$ 81,611,366
$ 3,221
Percent
Applicable
to
Government
62.75%
49.30
47.75
32.67
100.00%
Sources: Outstanding debt and applicable percentages provided by each governmental unit.
Table 11
Amount
Applicable
to
Government
$ 2,850,416
26,340,137
4,579,225
1,078,110
34,847,888
10,750,600
$ 45,598,488
$ 1,800
Note: $7,764,400 debt included in Refunding Bonds will be retired by the Water and Sewer Fund and is not
included in the above calculation of Per Capita Direct Debt. Overlapping governments are those that
coincide, at least in part, with geographic boundaries of the city. This schedule estimates the portion of
the outstanding debt of those overlapping governments that is borne by the property taxpayers of the City
of Paris. This process recognizes that, when considering the government's ability to issue and repay long-
term debt, the entire debt burden borne by the property taxpayers should be taken into account. However,
this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of
each overlapping go��'rnment.
91
City of Paris, Texas Table 12
Legal Debt Margin Information
September 30, 2012
Unaudited
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 $.52 per $100
valuation for the fiscal year ended September 30, 2012.
Source:
City of Paris
92
City of Paris, Texas
Revenue Pledged Coverage - Water and Sewer Revenue Bonds
Last Ten Fisical Years
Unaudited
Table 13
Net Revenue Average Remaining
Available Debt Service Requirements
Fiscal Gross Operating For Debt Percent
Year Revenues* Expenses** Service Principal Interest Total*** Coverage
2002-03
2003-04
2004-OS
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
$ 10,656,427
11,715,098
12,833,693
13,197,091
12,727,118
13,321,839
13,829,192
13,753,706
13,960,511
13,916,163
$ 5,924,832
5,791,260
5,923,360
6,665,832
6,613,931
6,873,535
7,244,274
6,732,799
7,201,866
7,445,178
$ 4,731,595
5,923,838
6,910,333
6,531,259
6,113,187
6,448,304
6,584,918
7,020,907
6,758,645
6,470,985
$ 1,478,250
1,726,250
1,936,880
1,889,357
1,825,646
1,740,867
1,628,600
1,463,840
1,250,466
970,550
$ 529,768
572,654
561,473
504,932
448,869
394,042
341,402
173,848
146,298
123,683
$ 2,008,018
2,298,904
2,498,353
2,394,289
2,274,515
2,134,909
1,970,002
1,637,688
1,396,764
1,094,233
Notes:
(1)* Gross Revenues = Operating and Non-Operating Revenue of the Water and Sewer Fund
Excluding Contribution Revenue and Premium Amortization
(2)** Operating Expenses Excluding Depreciation
(3)*** Agent Fees Not Included
Sources:
Southwest Securities Official Statement
Rauscher Pierce Refsnes Official Statement
City of Paris CAFR
93
236°/a
2.58
2.77
2.73
2.69
3.02
3.34
4.29
4.84
5.91
Paris, TX
Micropolitan
Calendar Service Area
Year Population
2002 49,096
2003 49,480
2004 49,598
2005 49,644
2006 49,863
2007 49,090
2008 49,286
2009 49,027
2010 49,793
2011 50,074
City of Paris
Demographic and Economic Statistics
Last Ten Calendar Years
Unaudited
Paris, TX
Micropolitan
Service Area
Personal
Income
$ 1,083,295,000
1,129,645,000
1,168,310,000
1,197,342,000
1,277,234,000
1,349,975,000
1,451,000,000
1,522,000,000
1,585,028,000
1,657,062,000
Paris, TX
Micropolitan Paris, TX
Service Area Micropolitan
Per Capita Service Area
Personal Median School
Income Age Enrollments (1)
$ 22,065 36.9 12,078
22,830 36.9 12,203
23,556 37.5 12,272
24,119 37.5 12,201
25,615 37.5 12,139
27,500 37.5 12,441
29,440 37.2 13,156
31,044 37.9 13,761
31,780 39.7 13,428
33,092 39.9 12,865
(1) 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 - 3,573
North Lamar Independent School District - 2,932
Chisum ?, i°pendent School District - 847
Paris Jumor College - 5,513 ��
Chamber of Commerce
Bureau of Economic Analysis
94
Table 14
Percent
Unemployment
Rate
8.1%
6.5
7.0
6.1
5.5
5.2
5.5
8.4
9.7
8.5
Taxpayer
Paris Regional Medical Center
Campbell Soup Corp.
Kimberly-Clark Corp.
Turner Industries
We-Pack Logistics, Inc.
R. K. Hall Construction, LTD
Huhtamaki
HWH - We Build
Silgan Can Co.
T & K Machinery
Sara Lee Bakery
TCIM
Paris Industries
Totals
Public Employers:
Paris ISD
North Lamar ISD
City of Paris
Paris Junior College
Lamar County
Totals
628
469
325
124
189
1,735
Source: Chamber of Commerce
U.S. Department of Labor
City of Paris, Texas
Principal Employers
Fiscal Year End 2012 and 2003
Unaudited
2012
Percentage
of Total
City
Employees Rank Employment Employees
875 1 8.50°/a 1,079
758 2 736 1,000
732 3 7.11 1,000
600 4 5.83 450
300 5 2.91 150
250 6 2.43 202
154 7 1.50 178
115 8 1.12 -
87 9 0.84 -
79 10 0.77 -
_ _ - 759
_ _ - 347
_ 275
3,950 3837% 5,440
95
Table 15
2003
Percentage
of Total
City
Rank Employment
1 9.94°/a
2 9.21
3 9.21
5 4.14
10 138
8 1.86
9 1.64
4 6.99
6 3.20
7 2.53
50.10%
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
2003 2004 2005
FACILITIES:
Airports:
Number of Airports
Fire Protection:
Number of Stations
Number of Fire Hydrants
Number of Employees (certified)
Employees Per 1,000 Population
Libraries:
Number of Libraries
Number of Volumes
Circularization of Materials
Circulation Per Capita
Library Cards in Force
Police Protection:
Number of Stations
Number of Employees (certified)
Employees Per 1,000 Population
Parks and Recreation:
Parks' Acres Developed
Parks' Acres Undeveloped
City Parks
Streets:
Paved Lanes - Miles
Unpaved Streets - Miles
WATER AND SEWER UTILITY:
Average Daily Water Comsumption - Gallons
Maximum Day's Water Consumption - Gallons
Annual Water Consumption - Gallons
Water Mains - Miles
Water Connections - Metered
Sewer Mains - Miles
Area Miles
Number of Full-Time Empioyees
Source: City of Paris
1
4
1,042
56
2.13
1
123,626
337,947
12.87
29,247
1
65
2.47
87
221
24
199
10
10,905,049
17,075,000
3,980,343,000
208
10,294
195
42.89
369
96
1
4
1,045
54
2.05
1
106,687
308,527
11.70
26,406
1
62
235
87
221
24
199
10
10,838,754
16,257,000
2,966,984,000
208
9,941
195
42.89
367
1
4
1,082
48
1.81
1
102,801
210,956
7.96
15,551
1
62
2.34
87
221
24
199
10
10,619,268
18,603,000
3,876,033,000
208
9,865
195
42.89
352
2006
1
4
1,078
48
1.80
1
106,955
195,944
7.36
21,164
1
62
233
87
221
24
199
10
12,435,000
19,557,000
4,53 8,690,000
208
9,803
195
42.89
316
2007
1
4
1,093
48
1.80
1
109,789
187,547
7.02
23,285
1
63
2.35
87
221
24
171
3
10,335,000
16,842,000
3,774,782,000
183
9,979
189
39.18
319
2008
1
3
1,112
48
1.79
1
106,607
162,278
6.07
12,011
1
62
231
87
221
24
172
3
10,678,976
18,360,000
3,912,548,000
184
9,888
190
39.18
321
Fiscal Year
2009 2010
1
3
1,173
48
1.77
1
97,243
162,957
6.04
12,011
1
61
2.26
87
221
24
160
3
10,185,500
20,394,000
3,624,429,000
184
9,905
190
39.18
322
1
3
1,189
51
1.88
1
98,895
159,966
5.90
15,941
1
62
2.28
87
221
25
171
3
10,069,000
21,311,000
3,675,218,000
183
10,076
197
39.18
322
97
2011
1
3
1,222
51
2.01
1
90,524
144,830
5.71
13,461
1
62
2.44
87
221
24
160
3
11,687,000
21,900,000
4,611,321,000
183
9,834
188
39.18
324
2012
1
3
1,217
51
2.01
1
85,357
136,286
5.37
14,563
1
62
2.44
87
221
24
160
3
11,560,000
21,010,000
4,234,583,000
183
9,966
188
39.18
325
Table 16
Function:
Public Safety
Police
Stations
Patrol Units
Fire Stations
Sanitation
Collection Trucks
Highways and Streets
Streets (miles)
Streetlights
Traffic Signals*
Culture and Recreation
Parks' Acreage
Swimming Pools - Municipal
Tennis Courts
Community Centers
Water
Water Mains (miles)
Fire Hydrants
Maximum Daily Capacity
(thousands of galions)
Sewer
Sanitary Sewers (miles)
Maximum Daily Treatment Capacity
(thousands of gallons)
City of Paris, Texas
Capital Asset Statistics by Function
Last Ten Fiscal Years
Unaudited
2003
1
11
4
209
N/A
308
1
1
208
1,042
36,000
195
7,250
Source: Various City Departments
* City has none. All inside the City limits belong to the State of Texas.
98
Fiscal Year
2004 2005
1
I1
4
209
N/A
308
1
1
208
1,045
36,000
195
7,250
1
11
4
209
2,160
308
1
1
208
1,082
36,000
195
7,250
2006
1
11
4
13
209
2,198
308
1
14
1
208
1,082
36,000
195
7,250
2007
1
11
4
8
174
2,212
308
1
14
1
183
1,093
36,000
189
7,250
2008
1
10
4
8
174
2,224
308
1
14
1
184
1,112
36,000
190
7,250
Fiscal Year
2009 2010 2011
1
10
3
8
160
2,217
308
1
14
1
184
1,173
36,000
190
7,250
99
1
10
3
8
174
2,216
308
1
14
1
184
1,189
36,000
190
7,250
1
10
3
8
174
2,220
286
1
14
1
183
1,222
36,000
189
7,250
Table 17
2012
1
10
3
7
163
2,220
286
1
14
1
183
1,217
36,000
189
7,250
Property Value
Fiscal Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Source:
City of Paris
Commercial
Units
38
26
42
23
22
21
17
11
9
13
City of Paris, Texas
Building Permits at Market Value
Last Ten Fiscal Years
Unaudited
Commercial
Construction
V alue
$ 5,092,241
6,571,777
15,372,158
6,682,498
24,575,805
20,329,436
51,951,894
12,228,169
10,025,486
7,836,610
100
Residential
Units
65
67
47
46
31
13
10
10
7
10
Residential
Construction
V alue
$ 7,476,004
4,420,392
4,870,500
3,643,500
2,943,125
1,167, 500
1,447,675
1,276,918
569,500
760,000
Table 18
Total
Construction
V alue
$ 12,568,245
10,992,169
20,242,658
10,325,998
27,518,930
21,496,936
53,399,569
13,505,087
10,594,986
8,596,610
City of Paris, Texas
Full-Time Equivalent City Government Employees by Function
Last Ten Fiscal Years
Unaudited
Function:
Manager
Attorney
Court Clerk
City Clerk
Finance
Police*
Fire
Community Development
Engineering
Public Works
Parks & ROW
Sanitation
Streets
Traffic & Lighting
Garage
EMS
Airport
Library
Warehouse
Water Billing
Water Treatment Plant
Water Distribution
Waste Water Collection
Waste Water Treatment Plant
Lift Stations
Information Technology
Totals
* Includes related grant employees.
Seasonal employees not included.
Source: City of Paris
2003
3.0
5.0
4.0
2.0
5.0
88.0
57.0
6.5
6.5
4.0
15.5
19.5
22.0
2.5
6.0
26.0
2.0
15.0
2.5
10.0
17.5
12.5
7.5
25.5
4.0
369.0
101
Fiscal Year
2004
3.0
5.0
4.0
2.0
5.5
88.0
58.0
6.5
7.5
4.0
16.5
17.5
22.0
2.5
6.0
26.0
2.0
14.0
2.5
10.0
17.5
12.5
7.5
24.5
3.0
367.5
2005
2.0
5.0
4.0
2.0
5.5
86.0
58.0
8.5
7.5
3.0
12.0
17.5
21.0
2.5
4.0
26.0
1.0
10.5
2.0
9.0
16.5
12.5
7.5
25.5
3.0
352.0
2006
1.0
3.0
3.0
2.0
5.5
82.0
49.0
7.5
6.5
2.5
9.0
16.5
I 5.0
2.0
4.0
26.0
1.0
10.5
2.0
7.0
15.5
11.5
7.5
23.5
3.0
316.0
Fiscal Year
200"7 2008 2009 2010
1.0 2.0 2.0
3.0 3.0 4.0
3.0 3.0 3.0
2.0 3.0 3.0
5.5 5.5 5.5
87.0 85.0 84.0
52.0 52.0 52.0
6.5 6.5 5.5
6.5 6.5 6.5
2.5 2.5 3.0
9.0 9.5 9.5
12.5 12.5 12.0
15.0 15.0 15.0
2.0 2.0 2.0
6.0 6.0 6.0
26.0 26.0 26.0
2.0 1.0 0.0
10.5 11.5 11.5
1.0 2.0 2.0
7.0 7.5 8.0
15.5 15.5 15.5
11.5 11.0 11.5
7.5 7.5 7.5
21.5 22.5 22.5
3.0 3.0 3.0
1.0 1.0 2.0
2.0
4.0
4.0
3.0
5.5
84.0
52.0
5.5
6.5
3.0
9.5
12.0
15.0
2.0
6.0
26.0
0.0
10.5
2.0
8.0
15.5
11.5
7.5
22.5
3.0
2.0
2011
2.0
4.0
4.0
3.0
6.0
84.5
52.0
7.0
6.5
3.0
9.0
12.0
15.0
2.0
5.5
26.0
0.0
10.5
2.0
8.0
15.5
11.5
7.5
22.5
3.0
2.0
Table 19
2012
3.0
4.0
4.0
3.0
5.0
85.5
52.0
7.5
6.5
3.0
10.0
12.0
15.0
2.0
5.5
26.0
0.0
10.5
2.0
8.0
15.5
10.5
7.5
22.5
3.0
2.0
320.0 322.5 322.5 322.5 324.0 325.5
102
CONTINUING DISCLOSURE INFORMATION
(Unaudited)
CONTINUING DISCLOSURE INFORMATION FOR THE
CITY OF PARIS, TEXAS
ASSESSED VALUATION TABLE 1
2012-2013 Actual Market Va(ue of Taxable Pronertv (100% of Actuall�a�
Less Exemptions:
Local, Optional Over-65 and/or Disabled Homestead Exemptions
Disabled and Deceased Veterans' Exemptions
Productivity Loss
Partially Exempt Proper[y
Freeport
Pollution ControVSolar
Abatement Loss
Cap Loss (10%)
HistoricaUOther
Totally Exempt Property
2012-2013 Net Ta�cable Assessed Valuation
Frozen Taxabfe Value Loss
$ 45,402,320
5,755,101
22,250,900
44,824
93,238,379
46,362,004
77,120,210
2,326,480
657,867
292,964,690
$ 2,077,494,013
586,122,775
1,491,371,238
106,183,087 �b�
Freeze Adjusted Net Taxable Assessed Valuation $ 1,385,188,151
�°� See 'AD VALOREM TAX PROCED URES" and "CITYAPPLICATION OF THE PROPERTY TAX CODE" in the last
O�cial Statement for a description of the issuer's tcLration procedures.
�'� The City adopted the tax freeze for persons 65 years of aXe or older on November 4, 2008. The 2008 tax year values
will be used as the "Base Values" and the f:rst freeze loss occured in the 2009 tax year.
Source: Lamar County Appraisal District
GENERAL OBLIGATION BONDED DEBT PRINCIPAL TABLE 2
General Obligation Debt Principal Outstanding: (As of December 18, 2012)
General Obligation Refunding Bonds, Series 2010
Combination Tax and Revenue Certificates of Obligation, Series 2010
General Obligation Refunding Bonds, Series 2012
Total Gross General Obligation Debt Principal Outstanding
Less: Self-Supporting General Obli�ation Debt Principal
General Obligation Refunding Bonds, Series 2010
(Excludes tttat portion of the 2010 Refunded Obligations (Series 2000 COs) used 100% for Gen Fund purposes)
General Obligation Refunding Bonds, Series 2012 (52% of DS related to 2003 GO Ref issue)
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, 2012
Ratio of Gross General Obligation Debt Principal to 2012-2013 Net Taxable Assessed Valuation
Ratio of Net General Obligation Debt Principal to 2012-2013 Net Taacable Assessed Valuation
2012-2013 Freeze Adiusted Net Taxable Assessed Valuation
Population: 1980 - 25,498; 1990 - 24,699; 2000 - 25,898
Per Capita 2012-2013 Net Taxable Assessed Valuation
Per Capita Gross General Obligation Debt Principal
Per Capita Net General Obligation Debt Principal
103
$ 9,910,000
2,900,000
4,505,000
17,315,000
6,740,000
625,000
7,365,000
$ 9,950,000
$ 1,020,727
1.25%
0.72%
$ 1,385,188,151
Current (Estimate) - 25,337
$ 54,671
$ 683
$ 393
PRINCIPAL TAXPAYERS 2012-2013 TABLE 3
Name
Lamar Power Parmers LP
Kimberly Clark Corporation -A
Campbell Soup - A
Campbell Soup - B
Essent PRMC LP - A
Paris Generation LP
ONCOR Electric Delivery Company
Silgan Can Company
Kimberly Clark Corporation -B
Essent PRMC LP - B
Total
Tvae of Propertv
Electric Utility
Disposable Diaper Manufacturing
Food Manufacturing
Food Manufacturing Warehouse
Health Care Services / Hospital
Utility
Electric Utility
Can Manufacturing
Warehouse
Health Care Services / Clinic
2012 Net Taxable
Assessed Valuation
$ 205,185,800
116,106,927
53,439,580
34,669,630
31,732,500
22,581,100
20,053,960
14,987,410
I 1,314,260
10,402,160
$ 5�0_473327
Based on a 2012 Freeze Adjusted Net T�able Assessed Valuation of $1,385,188,151
Source: Lamar Counry Appraisa! District
% of
Total 2012
Assessed
Valuation
14.81%
838%
3.86°/a
2.50%
229%
1.63°/a
1.45%
1.08%
0.82%
0.75%
37.57%
PROPERTY TAX RATES AND COLLECTIONS �'� TABLE 4
Tax
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Net Taxable
Assessed Valuation�h�
$1,074,746,887 $
1,121,338,793
1,107,979,488
1,339,952,274
1,419,106,196
1,507,138,018
1,405,294,035
1,380,460,473
1,359,521,473
1,385,188,151
Tax
Rate
0.69500
0.69225
0.692?5
0.59225
0.56000
0.52000
0.52000
0.52000
0.52000
0.51107
Tax
Levv
$7,470,691
7,762,498
7,670,001
7,935,867
7,952,325
7,837,300
7,797,45'7
7,651,941
7,543, ] 65
7,079,281
% Collections
Current Total
96.12% 97.40%
95.62°/a 97.00%
9534% 96.36%
96.82% 97.53%
96.78°/a 96.78%
96.71 % 97.44%
97.78% 98.43%
96.95% 9838%
97.93% 99.41%
Year
Ended
9-30-04
9-30-OS
9-30-06
9-30-07
9-30-08
9-30-09
9-30-10
9-30-11
9-30-12
9-30-13
Note: Although "Tota[" tax col[ection percenlages in this table include delinquent tax collections, they are n[located to the year they were
original[y levied inslead oJthe year in which they were collected
�°� See 'AD VALOREM TAX PROCEDURES" and "CI7YAPPL/CATION OF TNE PROPERTY TAX CODE" in the O�cial Statement for a
description of the issuer's taxation procedures.
ro� Certifted Values may change during the tcix year due to various supplements and protests, and va[uations reported on a different date
may not match those shown on this table. Net Taxable Assessed Yaluations for tax years 2003 through 1007 are as shown in the Ciry's
2011 Comprehensive Annual Financial Report. Yaluations jor tax years 2008-2012 represent Free=e Adjusted Net Tcixable Valuations.
Source: The Lamar County Appraisal District, the City's 20/1 Comprehensive Annual Financial Report and additional information from the
City.
TAX RATE DISTRIBUTION TABLE 5
2012-13 2011-12 2010-11 2009-10 2008-09 2007-08
GeneralFund $ 0.41487 $0.41000 $ 0.41713 $ 0.42439 $ 0.43113 $ 0.46526
O& S Fund 0.09620 0.11000 0.10287 0.09561 0.08887 0.09474
Total $ 0.51107 $0.52000 $ 0.52000 $ 0.52000 $ 0.52000 $ 0.56000
Sources: Texas Municrpal Report pub/ished by the Municipal Advisor� Council arTexas and the Lamar Countv ADPraisal District.
104
MUNICIPAL SALES TAX TABLE 6
The issuer has adopted the provisions of Chapter 321, as amended, Texas Tax Code. In addition, some issuers
are subject to a proper[y ta�c relief and/or an economic and industrial development tax. The voters of the City
approved the imposition of a 1/4 cent additional sales ta}c to be used for property tax reduction and a 1/4 cent
sales tax for economic development purposes. Levy of the additional sales taxes began on October 1, 1993, and
the City received its first payment in December 1993. Collections on a fiscal year basis are as follows:
Fiscal
Year
2002-03
2003-04
2004-OS
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
Total
Collected
$ 5,619,187
5,782,790
6,005,911
6,440,845
6,727,939
6,900,209
7,645,512
7,012,193
7,214,963
7,192,631
1.00%
C�
$ 3,746,125
3,855,193
4,003,941
4,293,897
4,485,293
4,600,139
5,097,008
4,674,795
4,809,975
4,795,087
0.25%
Prop Tax Red
$ 936,531
963,798
1,000,985
1,073,474
1,121,323
1,150,035
1,274,252
1,168,699
1,202,494
1,198,772
City Collections as
% of Ad Valorem
Tax Levv
64.12%
64.51
64.48
69.98
70.65
72.31
81.29
74.94
78.55
79.46
Source: State Comptroller of the State of Texas Website and Ciry 2011-12 CAFR..
105
($) Equivalent of
Ad Valorem
Tax Rate
$0.45
0.45
0.45
0.48
0.42
0.40
0.42
0.39
0.41
0.41
0.25%
EDC
$ 936,531
963,798
1,000,985
1,073,474
1,121,323
1,150,035
1,274,252
1,168,699
1,202,494
1,198,772
WATERWORKS AND SEWER SYSTEM OPERATING STATEMENT TABLE 7
Fiscal Year Ended September 30
Operating Revenues�°� 2012 2011 2010 2009 2008
Water Sales and Taps $ 8,013,691 $ 8,336,146 $ 8,072,440 $ 7,745,873 $ 7,641,122
Sewer Charges and Taps 5,256,682 4,951,015 4,968,912 5,172,748 4,714,273
Service Charges 163,469 164,094 162,454 163,181 180,081
Industrial Surcharges 65,152 94,369 210,511 198,o29 169,018
Miscellaneous 277,194 175,217 166,440 268,935 239,455
Investment Eamings 63,722 162,374 103,220 212,479 309,586
Total Revenues 13,839,910 13,883,215 13,683,977 13,761,245 13,253,535
Expenses�b� 7,445,178 7,201,866 6,732,799 7,244,274 6,873,535
Net Revenue Available for Debt Service $ 6,394,732 $ 6,681,349 $ 6,951,178 $ 6,516,971 $ 6,38Q000
Mnual Revenue Bond Requirements $ - $ - $ 1,088,669 $ 2,174,545 $ 2,177,164
Coverage of Annual Revenue Bond
Requirements
Annual Requirements on all Bonds Paid from
System Revenues
Coverage of Annual Requirements on all
Bonds Paid from System Revenues
Customer Count:
Water
Sewer
�� Does not include sani[ation billinA.fees of
�� Excludes depreciatron.
N/A N/A 639 x 3.00 x 2.93 x
$ 3,817,033 $ 3,805,992 $ 1,624,011 $ 3,948,712 $ 3,949,633
1.68 x 1.76 x 4.28 x 1.65 x 1.62 x
9,966
9,483
$ 76,253 $
106
9,834
9,455
77,296 $
9,942
9,450
69,729 $
9,901
9,441
67,947 $
9,982
9,533
68,304
WATER RATES TABLE 8
(Rates Effective August 1, 2011)
Meter Size
Inches
5/8" - 3/4"
1" and Larger
Residential Class
Base Cost and Additional
Cubic Foot Char�e
(Per Cubic Foot)
$9.05 for first 200 Cubic Feet
$44.12 for first 1,000 Cubic Feet
Commercial / Industrial Class
Base Cost and Additional
Meter Size Cubic Foot Charge
Inches (Per Cubic Foot)
5/8" - 3/4" $11.32 for first 200 Cubic Feet
1" - 2" $4528 for first 1,000 Cubic Feet
Larger than 2" $162.55 for first 3,000 Cubic Feet
Commercial / Industrial Class
(Meters Greater Than Three Inches)
Base Cost and Additional
Meter Size Cubic Foot Charge
Inches (Per Cubic Foot)
4" $2,761.00 for first 100,000 Cubic Feet
(" $4,005.00 for first 150,000 Cubic Feet
8" and Larger $5,341.00 for first 200,000 Cubic Feet
Source: The issuer's current Water and Sewer Rates Ordinance
Service in Excess of Base
(For Each Additional
100 Cubic Feet)
$3.06 / 100 Cubic Feet
$3.06 / 100 Cubic Feet
Service in Excess of Base
(For Each Additional
100 Cubic Feet)
$3.14 / 100 Cubic Feet
$2.57 / 100 Cubic Feet
$2.57 / 100 Cubic Feet
Service in Excess of Base
(For Each Additional
100 Cubic Feet)
$2.57 / 100 Cubic Feet
$2.57 / 100 Cubic Feet
$2.57 / 100 Cubic Feet
PRINCIPAL WATER CUSTOMERS - 2011-2012 TABLE 9
(October 1, 2011 through September 30, 2012) (Unaudited)
Name of Customer
Lamar Power Partners�a�
Lamar County Water Supply
Campbell Soup Company
Paris Generation, LP
Daisy Farms
Kimberly Clark
Paris Regional Medical Center
Paris Housing Authority
Paris Junior College
Paris Independent School District
�°� Includes rmv water consumption.
Source • Information from the Issuer.
Product
Electric Utility
Water
Soups/Juices/Sauces
Electric Utility
Dairy Farm
Disposable Diapers
Medical Care
Multifamily Housing
Higher Education
Public School Education
2011-2012
Average Monthly
Consumption (Cu Ft.)
14,077,754
12,713,461
12,217,819
1,257,530
1,166,006
930,233
383,234
214,751
172,777
156,548
Totals 43,290,113
T1yl
2011-2012
Average
Monthlv Bitl
$ 23,934
122,845
107,878
20,226
10,467
24,108
11,311
5,658
4,766
6,483
$ 337,676
SEWER RATES TABLE 10
(Rates Effective August 1, 2012)
Meter Size
Inches
5/8" - 3/4"
1" and Larger
Meter Size
Inches
5/8" - 3/4"
1 �� _ 2,�
Larger than 2"
Residential Ctass
Base Cost
(Per Cubic Foot)
$11.11 for first 200 Cubic Feet
$55.08 for first 1,000 Cubic Feet
Commerciat Industrial Class
Base Cost
(Per Cubic Foot)
$15.73 for first 200 Cubic Feet
$55.08 for first 1,000 Cubic Feet
$111.43 for first 2,000 Cubic Feet
Source: The issuer's current Water and Sewer Rates Ordinance
Service in Excess of Base
(For Each Additional
100 Cubic Feet)
$4.78 / 100 Cubic Feet
$4.78 / 100 Cubic Feet
Service in Excess of Base
(For Each Additional
100 Cubic Feet)
$4.97 / 100 Cubic Feet
$4.97 / 100 Cubic Feet
$4.97 / 100 Cubic Feet
PRINCIPAL SEWER CUSTOMERS - 2011-2012 TABLE 11
(October 1, 2011 through September 30, 2012) (Unaudited)
Name of Customer
Kimberly-Clark
Paris Regional Medical Center
Paris Housing Authority
Texas State Highway Department
Paris Junior College
Lamar County Human Resources
Bettes Enterprises
Spanish Oakes Apartments
Paris Independent School District
Lamar County
Source: Information from the issuer
Product
Disposable Diapers
Medica( Care
Multifamily Housing
Public Transportation
Higher Education
Social Services
Car Wash
Apartment Complex
Public School Education
County Government
2012-2012
Average Monthly
Consumption (Cu Ft.)
451,551
282,677
195,939
133,492
122,303
79,651
76,492
75,155
74,989
68,989
Totals 1,561,238
108
2011-2012
Average
Monthlv Bill
$ 21,414
13,726
9,297
6,294
5,943
3,757
3,609
3,550
3,760
3,258
$ 74,608
OVERALL COMPLIANCE, INTERNAL CONTROLS
AND FEDERAL AWARDS SECTION
OVERALL COMPLIANCE, INTERNAL CONTROLS
AND FEDERAL AWARDS SECTION
This section includes elements required by Government Auditin�Standards, issued by the Comptroller General of the
United States and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States Local Governments,
and Non-Profit Organizations.
109
McClanahan and Holmes, LLP
CERTIFIED PUBLIC ACCOUNTANTS
R. E. BOSTWICK, CPA 228 SIXTH STREET S.E.
STEVEN W. MOHUNDRO, CPA PARIS, TEXAS 75460
GEORGE H. STRUVE, CPA 903-784-4316
ANDREW B. REICH, CPA FAX 903-784-4310
RUSSELL P. WOOD, CPA
DEBRA J. WILDER, CPA 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
Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
Honorable Mayor and City Council
City of Paris, Texas
We have audited the financial statements of the governmental activities, the business-type activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund information of the City of
Paris, Texas, as of and for the year ended September 30, 2012, which collecti�ely comprise the City of Paris, Texas',
basic financial statements and have issued our report thereon dated March 19, 2013. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America and the standards applicable to
financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
Management of the City of Paris is responsible for establishing and maintaining effective internal control over financial
reporting. In planning and performing our audit, we considered the City of Paris, Texas', internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the City of Paris, Texas', internal
control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Paris,
Texas', internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements
on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that
there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented or
detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be
deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control
over financial reporting that we consider to be material weaknesses, as defined previously.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Paris, Texas', financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements, noncompliance with which could have a direct and material effect on the determination of
110
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
Honorable Mayor and City Council
City of Paris, Texas
Page 2
financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective
of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing Standards.
We noted certain matters that we reported to management of the City of Paris in a separate letter dated March 19, 2013.
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.
Paris, Texas
March 19, 2013
�f ,h'��-, �c�
Certified Public Accountants
111
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
City of Paris, Texas
Summary Schedule of Prior Audit Findings
Fiscal Year Ended September 30, 2012
F inding/Recommendation
None
112
Current Status
City of Paris, Texas
Schedule of Findings and Questioned Costs
For the Fiscal Year Ended September 30, 2012
Section I— Summary of Auditor's Results
Financial Statements
Type of auditors' report issued: Unqualified
Internal control over financial reporting:
Material Weakness(es) identified?
Significant Deficiency(s) identified that are not considered to be
material weakness(es)?
Noncompliance material to financial statements noted?
Federal Awards
Internal conri-ol over major programs:
Material Weakness(es) identified?
Significant Deficiency(s) identified that are not considered to be
material weakness(es)?
yes X no
yes X nonereported
yes X no
yes X no
yes X none reported
Type of auditors' report issued on compliance for major programs: Unqualified
Any audit fmdings disclosed that are required to be reported in accordance
with Section 510(a) of Circular A-133? X yes
Identification of major programs:
no
CFDA Number(s) Name of Federal Pro�ram or Cluster
10.557 Special Supplemental Food Program for Women, Infants, and Children
14.228 Community Development Block Grants/Entitlement Grants
66.818 Brownfields Assessment Cleanup Cooperative Agreement
Dollar threshold used to distinguish between type A and type B programs: 300 000
Auditee qualified as low-risk auditee?
None
Section II — Financial Statement Findings
113
yes X no
City of Paris, Texas
Schedule of Findings and Questioned Costs, Continued
For the Fiscal Year Ended September 30, 2012
Section III – Federal Award Findings and Questioned Costs
DEPARTMENT OF AGRICULTURE
2012-1 Special Supplemental Food Program for Women, Infants, and Children—CFDA No. 10.557
Condition: During our test work we noted that two monthly purchase vouchers and the final quarter(y
report were submitted after the due date. The SF-SAC reporting package was not submitted for the
previous year.
Criteria: This program requires that monthly purchase vouchers and quarterly reports be submitted by the
20`�' working day of the month following the reporting month. In addition, Form SF-SAC and the Single
Audit reporting package must be filed annually within nine months of fiscal year end.
Cause: With regard to the monthly purchase vouchers and quarterly reports, priority has been given to City
of Paris duties over the bookkeeping services provided to the Health Department/ WIC which is a separate
entity and not part of the City. A twenty day turnaround was not always practical on that basis. With regard
to form SF-SAC and single audit reporting package, the City placed its audit report on the City website
with the understanding that state and federal agencies would download the report from there as needed. The
City overlooked the requirement that Form SF-SAC and the audit report also had to be sent to the Federal
Audit Clearinghouse.
Effect: As a result, the City did not fully comply with certain requirements of this program, but we noted
no instance in which the pass-through grantor withheld reimbursement due to late report submission.
Questioned Costs: No costs were questioned as a result of this finding.
Recommendation: We recommend that the City implement controls to ensure that all necessary reports
have been completed and submitted by the required due date.
Management Response: The City will develop a plan to ensure that information is submitted within the
reporting period specified by the grant agreement.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
2012-2 Community Development Block Grants/ Entitlement Grants—CFDA No. 14.228
Condition: The City did not submit the ACF or Form SF-SAC and the Single Audit reporting package.
Criteria: Recipients of federal awards are required to submit timely and accurate reports to the awarding
agency in accordance with federal compliance requirements and/or pass-through agency grant agreements.
Specifically, the Texas Department of Agriculture requires that auditees submit an Audit Certification
Form (ACF) and submit Form SF-SAC and the Single Audit reporting package annually within sixty (60)
days and nine months of fiscal year end, respectively.
Cause: The City places its a��ciit report on the City website with the understanding that state and federal
agencies would download the report from there as needed. The City was unaware that Form SF-SAC and
the audit report also had to be sent to the Federal Audit Clearinghouse and was not notified by the third
party grant administrator of that requirement.
114
City of Paris, Texas
Schedule of Findings and Questioned Costs
For the Fiscal Year Ended September 30, 2012
Section III – Federal Award Findings and Questioned Costs, Continued
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Continued
2012-2 Community Development Block Grants/ Entitlement Grants—CFDA No. 14.228, Continued
Effect: As a result, the City did not fully comply with certain requirements of this program, but we noted
no instance in which the pass-through grantor withheld reimbursement due to late report submission.
Questioned Costs: No costs were questioned as a result of this finding.
Recommendation: We recommend that the City implement controls to ensure that all necessary reports
have been completed and submitted by the required due date.
Management Response: The City will develop a plan to ensure that information is submitted within the
reporting period specified by the grant agreement.
ENVIRONMENTAL PROTECTION AGENCY
2012-3 Brownfields Assessment Cleanup Cooperative Agreement—CFDA No. 66.818
Condition: The City did not submit the Federal Financial Report (SF-425) within the timeframe required.
Form SF-SAC and the Single Audit reporting package were not submitted for the prior year.
Criteria: Recipients of federal awards are required to submit timely and accurate reports to the awarding
agency in accordance with federal compliance requirements and/or pass-through agency grant agreements.
In addition, auditees are required to submit Form SF-SAC and the Single Audit reporting package annually
within nine months of fiscal year end.
Cause: This condition appears to be caused by the third-party administrator hired to accumulate data and
submit quarterly and semi-annual reports.
Effect: As a result, the City did not fully comply with certain requirements of this program, but we noted
no instance in which the pass-through grantor withheld reimbursement due to late report submission.
Questioned Costs: No costs were required to be questioned as a result of this finding.
Recommendation: We recommend that the City implement controls to ensure that all necessary reports
have been completed and submitted by the required due date.
Mana�ement Response: The City will contact its third-pariy administrator, responsible for accumulating
financial information into the required format for quarterly and semi-annual reporting, and develop a plan
to ensure that information is submitted within the time specified by the grant agreement.
115
City of Paris, Texas
Corrective Action Plan
For the Fiscal Year Ended September 30, 2012
The City of Paris respectfully submits the following corrective action plan for the year ended September 30, 2012.
Name and address of independent public accounting firm: McClanahan & Holmes, LLP, 228 Sixth Street S.E., Paris,
Texas 75460
Audit period: Year Ended September 30, 2012
The findings from the September 30, 2012 schedule of findings and questioned costs are discussed below. The
findings are numbered consistently with the numbers assigned in the schedule.
Findings - Federal Award Programs
DEPARTMENT OF AGRICULTURE
2012-1 Special Supplemental Food Program for Women, Infants, and Children—CFDA No. 10.557
Recommendation: We recommend that the City implement controls to ensure that all necessary reports have
been completed and submitted by the required due date.
Action Taken: We concur with the recommendation and it has been implemented effective March 4, 2013.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
2012-2 Community Development Block Grants/ Entitlement Grants—CFDA No. 14.228
Recommendation: We recommend that the City implement controls to ensure that all necessary reports have
been completed and submitted by the required due date.
Action Taken: We concur with the recommendation and it has been implemented effective March 4, 2013.
ENVIRONMENTAL PROTECTION AGENCY
2012-3 Brownfields Assessment Cleanup Cooperative Agreement—CFDA No. 66.818
Recommendation: We recommend that the City implement controls to ensure that all necessary reports have
been completed and submitted by the required due date.
Action Taken: We concur with the recommendation and it has been implemented effective March 4, 2013.
116
McClanahan and Holmes, LLP
CERTIFIED PUBLIC ACCOUNTANTS
R. E. BOSTWICK, CPA
STEVEN W. MOHUNDRO, CPA
GEORGE H. STRUVE, CPA
ANDREW B. REICH, CPA
RUSSELL P. WOOD, CPA
DEBRA J. WIIDER, CPA
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
14a0 WEST RUSSELL
BONHAM, TEXAS 75418
903-583-5574
Independent Auditor's Report on Compliance with Requirements That FAX 903-583-9453
Could Have a Direct and Material Effect on 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 (the City), Texas, with the types of compliance requirements
described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of
the City of Paris' major federal programs for the year ended September 30, 2012. The City's major federal programs are
identified in the summary of auditors' results section of the accompanying schedule of fmdings and questioned costs.
Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal
programs is the responsibility of the City's management. Our responsibility is to express an opinion on the City of Paris'
compliance based on our audit. �
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-
Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that
could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test
basis, evidence about the City's compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our
audit does not provide a legal determination of the City's compliance with those requirements.
In our opinion, the City of Paris, Texas, complied, in all material respects, with the compliance requirements referred to
above that could have a direct and material effect on each of its major federal programs for the year ended September
30, 2012. However, the results of our auditing procedures disclosed instances of noncompliance with those
requirements, which are required to be reported in accordance with OMB Circular A-133 and which are described in the
accompanying schedule of findings and questioned costs as item 2012-1, 2012-2 and 2012-3.
Internal Control Over Compliance
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 internal control over compliance in accordance with
OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of intemal control over
compliance. Accordingly, we do not express an opinion on the effectiveness of the City of Paris, Texas', internal
control over compliance.
117
AMERICAN INSTITUTE OF CERTIFiED PUBLIC ACCOUNTANTS
Honorable Mayor and City Council
City of Paris, Texas
Page 2
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does
not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect
and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material
weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance
requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.
Our consideration of the internal control over compliance was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control over compliance that might be
deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in intemal control
over compliance that we consider to be material weaknesses, as defined above.
The City of Paris' response to the findings identified in our audit are described in the accompanying schedule of findings
and questioned costs. We did not audit the City's response and, accordingly, we express no opinion on the response.
This report is intended solely for the information and use of the City Council, management, others within the entity,
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.
Paris, Texas
March 19, 2013
y,�.����� �'e��� ���
Certified Public Accountants
118
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
City of Paris, Texas
Schedule of Expenditures of Federal Awards
For the Year Ended September 30, 2012
Federal Grantor/Pass-Through Grantor/Program Title
U S. De�artment of A�riculture
Passed-Through Texas Deparhnent of State Health Services:
Special Supplemental Food Program for Women,
Infants, and Children
Total U.S. Deparhnent of Agriculture
U S D�arhnent of Housing and Urban Development
Passed-Through Texas Deparhnent of Agriculture:
Community Development Block Grants/
Entitlement Grants
Passed-Through Texas Department of Housing
and Community Affairs:
Home Investment Parinerships Program
Home Investment Parinerships Program
Total U.S. Department of Housing and Urban Development
U S. Department of Justice
Direct Program:
ARRA-Public Safety Partnership
and Community Policing Grants
Edward Byrne Memorial Justice Assistance Grant Program
Total U.S. Deparhnent of Justice
U S Environmental Protection Agency
Direct Program:
Brownfields Assessment and Cleanup
Cooperative Agreements
Total U.S. Environmental Protection Agency
U S Deparhnent of Ener�v
Direct Program:
ARRA-Energy Efficiency and Conservation Block
Grant Program (EECBG)
Total U.S. Department of Energy
119
Federal CFDA
Number
10.557
14.228
14.228
14.228
14.239
14.239
16.710
16.738
16.73 8
66.818
81.128
Project
Number
2012-039968-001
728056
729599
710222
1001224
1001273
2010UMWX0311
2011-DJ-BX-2653
2012-DJ-BX-0861
BF-966942-01
DE-EE0000893
Expenditures
$ 294,148
294,148
2,000
165,011
150,000
65,500
7,896
390,407
94,365
13,621
5,029
113,015
170,697
170,697
6,000
6,000
City of Paris, Texas
Schedule of Expenditures of Federal Awards (Continued)
For the Year Ended September 30, 2012
Federal Grantor/Pass-Through Grantor/Program Title
U S Department of Health and Human Services
Passed-Through Texas Deparhnent of State Health Services:
Immunization Cooperative Agreements
Preventative Health and Health Services Block Grant
Federal CFDA
Number
Maternal and Child Health Services Block Grant to the States
Passed-Through the University of Texas Health Science Center at Tyler:
Community Transformation Grants and National Dissemination
and Support for Community Transformation Grants
Total U.S. Deparhnent of Health and Human Services
Total Expenditures of Federal Programs
See Notes to the Schedule of Expenditures of Federal Awards.
120
93.268
93.268
93.991
93.991
93.994
93.531
Project
Number
2012-039618
2013-041471
2012-039630
2013-041953
2012-039430
SC12-17
Expenditures
107,532
6, 891
138,361
20,919
137
34,997
308,837
$ 1,283,104
City of Paris, Texas
Notes on Accounting Policies for Federal Awards
For the Year Ended September 30, 2012
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.
Note 2: Subrecipients
Of the federal expenditures presented in the schedule, the City of Paris, Texas, provided federal awards to the
subrecipients as follows:
Federal
CFDA Amount Provided
Program Title Number to Subrecipients
Edward Byrne Memorial
Formula Grant Program 16.738 $ 7,150
121
City of Paris, Texas
Special Supplemental Food Program
for Women, Infants, and Children
Schedule of Revenues and Expenditures
For the Year Ended September 30, 2012
Federal Financial Assistance
Federal Grantor: U.S. Deparnnent of Agriculture
Pass-Through Grantor: Texas Department of State Health Services
CFDA Number: 10.557
Project Number: 2012-039968-001
Contract Period: 10/O1/11 - 09/30/12
Revenues:
Federal
Total Revenues
Expenditures:
Personnel
Travel
Supplies
Other
Indirect Charges
Total Expenditures
Excess Revenues
Over Expenditures
Award Prior
Budget Years
$ 304,906 $ -
Current
Year Total Variance
$ 294,148 $ 294,148 $ (10,758)
304,906 - 294,198 294,148 (10,758)
246,716 - 240,105 240,105 (6,611)
6,000 - 4,887 4,887 (1,113)
6,250 - 4,591 4,591 (1,659)
27,940 - 28,956 28,956 1,016
18,000 - 15,609 15,609 (2,391)
304,906 - 294,148 294,148 (10,758)
$ - $ - $ - $ - $ -
122
City of Paris, Texas
Brownfields Assessment and Cleanup Cooperative Agreement
Schedule of Revenues and Expenditures
For the Year Ended September 30, 2012
Federal Financial Assistance
Federal Grantor: U.S. Environmental Protection Agency
CFDA Number: 66.818
Project Number: BF 966942-01
Contract Period: 10/O1/09 - 11/30/12
Revenues:
Federal
Total Revenues
Expenditures:
Contractual
Total Expenditures
Excess Revenues
Over Expenditures
Award Prior Current
Budget Years Year Total Variance
$ 200,000 $ 27,960 $ 170,697 $ 198,657 $ (1,343)
200,000 27,960 170,697 198,657 (1,343)
200,000 27,960 170,697 198,657 (1,343)
200,000 27,960 170,697 198,657 (1,343)
$ - $ - $ - $ - $ -
123
City of Paris, Texas
Community Development Block Grants/Entitlement Grants
Schedule of Revenues and Expenditures
For the Year Ended September 30, 2012
Federal Financial Assistance
Federal Grantor: U.S. Department of Housing and Urban Development
Pass-Ttu-ough Grantor: Texas Department of Agriculture
CFDA Number: 14.228
Project Number: 729599
Contract Period: 09/15/09 - 03/14/12
Award Prior Current
Budget Years Year Total Variance
Revenues:
Federal $ 250,000 $ 67,591 $ 167,886 $ 235,477 $(14,523)
Total Revenues
Expenditures:
Sewer Facilities
Engineering/Architecture
General Administration
Total Expenditures
Excess (Deficiency) Revenues
Over Expenditures
250,000 67,591 167,886 235,477 (14,523)
183,750 22,853 146,374 169,227
46,250 33,613 12,637 46,250
20,000 14,000 6,000 20,000
(14,523)
250,000 70,466 165,011 235,477 (14,523)
$ - $ (2,875) $ 2,875 $ - $ -
124