15-18 - RTOWN OF PROSPER, TEXAS RESOLUTION NO. 15-18
A RESOLUTION BY THE TOWN COUNCIL OF THE TOWN OF PROSPER, TEXAS,
ACCEPTING THE FISCAL YEAR 2013-2014 INDEPENDENT AUDIT REPORT AND
COMPREHENSIVE ANNUAL FINANCIAL REPORT; MAKING FINDINGS;
AUTHORIZING PUBLICATION OF THE AUDIT; AND PROVIDING AN EFFECTIVE
DATE.
WHEREAS, the Town Council is required by Section 7.18 of the Town Charter to call for an
Independent Audit to be made of all accounts of the Town at the close of each fiscal year, a report of
which is to be presented to the Town Council; and
WHEREAS, Town staff engaged Davis Kinard & Co., P.C., Certified Public Accountants, to
complete the Town's Fiscal Year 2013-2014 Independent Audit; and
WHEREAS, a copy of the Independent Audit and accompanying Financial Statements for the
2013-2014 fiscal year were received and reviewed by Town staff; and
WHEREAS, the Town Charter requires that upon completion of the audit, a copy of the audit
shall be posted to the Town's website and copies placed on file in the office of the person performing
the duties of Town Secretary, as a public record.
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF
PROSPER, TEXAS, THAT: SECTION 1
The Town Council of the Town of Prosper, Texas, hereby accepts the Town's fiscal year
2013-2014 financial audit as presented by Davis Kinard & Co., P.C., Certified Public Accountants.
SECTION 2
A copy of the completed audit shall be published immediately on the Town website and
copies of the audit placed on file in the office of the person performing the duties of Town Secretary,
as a public record.
SECTION 3
This Resolution shall take effect from and after the date of its passage.
DULY PASSED, APPROVED, AND ADOPTED BY THE TOWN COUNCIL OF THE TOWN
OF PROSPER, TEXAS, ON THIS 24TH DAY OF MARCH, 2015.
V IVI/ �Jl
Ray Smith, M�yor
APPROVED AS TO FORM AND LEGALITY:
Terrence S. Welch, Town Attorney
Resolution No. 15-18, Page 2
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TOWN OF PROSPER, TEXAS
Comprehensive Annual Financial Report
Year Ended September 30, 2014
TABLE OF CONTENTS
INTRODUCTORY SECTION Page
Letterof Transmittal......................................................................................................................................................... i
Certificateof Achievement............................................................................................................................................... vii
OrganizationalChart........................................................................................................................................................viii
Listof Principal Officials.................................................................................................................................................. ix
FINANCIAL SECTION
IndependentAuditor's Report......................................................................................................................................... 1
Management's Discussion and Analysis.......................................................................................................................... 3
Basic Financial Statements:
Government -Wide Financial Statements:
Statementof Net Position..................................................................................................................................... 12
Statementof Activities.......................................................................................................................................... 13
Fund Financial Statements:
Balance Sheet — Governmental Funds..................................................................................................................
15
Reconciliation of Balance Sheet — Governmental Funds to the Statement of Net Position ..................................
17
Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds ............................
18
Reconciliation of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds to the
Statementof Activities.......................................................................................................................................
22
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget (GAAP Basis) and Actual — General Fund............................................................................................
23
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual — Impact Fee Fund.......................................................................................
24
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual — Contributions Fund...................................................................................
25
Statement of Net Position — Proprietary Funds.....................................................................................................
26
Statement of Revenues, Expenses, and Changes in Fund Net Position — Proprietary Funds ................................
27
Statement of Cash Flows — Proprietary Funds......................................................................................................
28
Notesto Financial Statements................................................................................................................................... 30
Individual Fund Schedules:
Schedule of Revenues, Expenses and Changes in Net Position
Budget and Actual — Water and Sewer............................................................................................................. 47
Schedule of Revenues, Expenses and Changes in Net Position
Budget and Actual — Storm Drainage............................................................................................................... 48
TABLE OF CONTENTS
(continued)
STATISTICAL SECTION
Financial Trends:
NetPosition by Component.................................................................................................................................. 49
Changesin Net Position........................................................................................................................................ 51
Fund Balances of Governmental Funds................................................................................................................ 55
Changes in Fund Balances of Governmental Funds............................................................................................. 57
Revenue Capacity:
General Governmental Tax Revenues by Source.................................................................................................. 59
Assessed Value and Estimated Actual Value of Taxable Property....................................................................... 60
Property Tax Rates — Direct and Overlapping Governments................................................................................ 61
Property Tax Levies and Collections.................................................................................................................... 63
PrincipalProperty Taxpayers................................................................................................................................ 64
Debt Capacity:
Ratios of Outstanding Debt by Type..................................................................................................................... 65
Ratios of General Bonded Debt Outstanding........................................................................................................ 67
Direct and Overlapping Governmental Activities Debt........................................................................................ 68
LegalDebt Margin Information............................................................................................................................ 69
Demographic and Economic Information:
Demographic and Economic Statistics.................................................................................................................. 71
PrincipalEmployers.............................................................................................................................................. 72
Operating Information:
Operating Indicators by Function/Program........................................................................................................... 73
Full -Time Equivalent Town Government Employees by Function...................................................................... 75
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"A Place Where Everyorie Matters"
k' 3 Box 0: 7 - 2�1 W. Broadvav Prosper, 16xas 75078 - 971"11r� (1.2640 . I ax: 972,346.9335a
March 13, 2015
To the Honorable Mayor, Members of Town Council, and
Citizens of the Town of Prosper, Texas
The Town's management staff is pleased to submit the Comprehensive Annual Financial
Report ("CAFR") of the Town of Prosper ("Town") for the fiscal year ending September 30,
2014. The Town's management assumes responsibility for the accuracy of the data and the
completeness and fairness of the presentation, including all disclosures. To the best of our
knowledge and belief, the enclosed data is accurate in all material respects. The data is
reported in a manner designed to present fairly the financial position and results of operations
of the various funds of the Town. To enable the reader to gain an understanding of the
Town's financial activities, all necessary disclosures have been included.
The Town is required to obtain an annual audit of the books of account, financial records, and
transactions of all administrative departments of the Town. The Town's financial statements
have been audited by Davis Kinard & Co. PC, a firm of licensed certified public accountants.
The goal of the independent audit is to provide reasonable assurance that the financial
statements of the Town for the fiscal year ended September 30, 2014, are free of any
material misstatement. The independent audit involved examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements; assessing the accounting
principles used and significant estimates made by management; and evaluating the overall
financial statement presentation. The independent auditor concluded, based upon the audit,
that there was reasonable basis for rendering an unqualified opinion that the Town's financial
statements for the fiscal year ended September 30, 2014, are fairly presented in conformity
with Generally Accepted Accounting Principles ("GAAP"). The independent auditor's report is
presented as the first component of the financial section of this report.
The CAFR is prepared in accordance with GAAP in the United States of America established
by the Government Accounting Standards Board. The CAFR is presented in three sections:
introductory, financial, and statistical. The introductory section includes this transmittal letter,
the Town's organizational chart, and a list of principal officials. The financial section includes
the management's discussion and analysis ("MD&A"), the government -wide and fund
financial statements, notes to basic financial statements, required supplemental information,
other supplemental information, as well as the independent auditors' report on the basic
financial statements. The statistical section includes selected financial and demographic
information which is presented on a multi-year basis.
The MD&A is a narrative introduction, overview, and analysis to accompany the basic
financial statements. The MD&A can be found immediately following the independent
auditors' report. This letter of transmittal is designed to complement the MD&A and should
be read in conjunction with the MD&A.
The Reporting Entity
The Town is a political subdivision and a home rule municipality under the laws of the state.
A Home Rule Charter was approved by the qualified voters of the Town at an election held
November 7, 2006, and revised on May 14, 2011. The Town operates with a Town Council
comprised of the Mayor and six Council members. The term of office is three years. The
Town Manager is the chief executive officer of the Town.
Services the Town provides include: public safety (police, fire protection, and dispatch), and
municipal court, highways and streets, water/wastewater and storm drainage utilities, culture -
recreation, code compliance, library, public improvements, planning and zoning, economic
development and general administrative services. Some services such as engineering, legal,
information technology and solid waste/recycling are outsourced in full or in part to the private
sector.
The Town is located in North Central
Texas, and covers approximately 27
square miles of the Dallas/Fort Worth
Metroplex ("DFW"). Prosper includes
areas in both Collin and Denton
Counties, with most of the Town's
population residing in Collin County.
The Town is positioned at the
crossroads of Preston Road and US
Highway 380, and is just five minutes
north of the bustling Dallas North
Tollway cities of Frisco and Plano.
The Town is home to first rate
education and state championship
sports teams, picturesque ranches
and other amenities. Access to the
DFW area, coupled with a
commitment to maintain a high
standard of living has created rapid
growth for the Prosper community.
This pace is expected to increase
sharply over the ensuing years.
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The 2000 Census population for the Town was 2,097, and the 2014 estimate is 14,986.
36,660
25,000
26,660
1s,000
314.486
27.5_4
12 AD
l6 666 9,350
6"35P
5,250
5,006
97ii
6 III IIIIIIIII
2066 2062 2004 2065 2068 2610 2012 2014 2026
Source Population estimates to date are from North Central Texas Council of Governments Future estimates are from Town of Prosper staff
History of Prosper
Prosper began with the first settlers arriving in this area in 1846. Those who settled here
were drawn to North Texas' black prairie soil - rich, fertile land that nurtured thriving cotton
crops in a time when cotton was "King". Between 1850 and 1902, two settlements coexisted.
One community, two miles south of the present town, was called Rock Hill. The second
community, one mile north, was called Richland. The development of these small
communities was expedited in 1876 when County Courts ordered small tracts of land to be
established for quick sale. These tracts, each approximately 160 acres in size, were sold for
$3.50 per acre. Dr. A. T. Bryant of McKinney purchased one of the tracts, which later became
the geographic nucleus for the Town of Prosper.
The establishment of the St. Louis & San Francisco Railroad in March of 1902 created the
change that forced the communities of Rock Hill and Richland to merge forming the Town of
Prosper. For years, Prosper was the central stop for the railroad between Dallas and
Sherman. When community officials applied for a Post Office with the name "Richland", they
were informed that city name was already taken. Postmaster B.J. Naugle asked for an
alternative name and J.C. Slaughter suggested the name Prosper. A new name was adopted
for the hybrid community - one that spoke of the prosperous living conditions and the
prosperous crops harvested that year. And so it was that the town of Prosper was born.
The Town of Prosper was incorporated in 1914 with a commission form of government and a
population of 500. U.N. Clary was Mayor and served in that position for the next 49 years. It
served for decades as a market center for area farmers and their abundant cotton and corn
crops. From the mule drawn wagon and horse drawn buggy, the automobile evolved. Thus
began the evolution of people moving in and out of the rural community. Surviving the war
and the depression, the mechanization of farming provided the next big impact on Prosper's
population. In 1980, the introduction of light industry, combined with the growth of the
Metroplex, led to a comeback for Prosper.
To this day, Prosper has managed to retain its 19th century country charm, carefully
controlling its growth to that end. Unlike the bustling cities of Dallas, Plano and Frisco that lie
just a few miles south, Prosper is characterized by estate -size home sites, pristine rolling hills
and vast expanses of open land. Today, Prosper is the home to more than 100 businesses
and hundreds of new families.
The Economic Outlook
The Town continues to enjoy new home permits at a record pace and benefits tremendously
from its location. Prosper, while not immune from economic pressures, has thrived more
than most DFW s°,°°°,°°,°, $375,99
communities. According to $349"749
$342„977 $ 5324.397 �"'""''���
a May 21, 2014 article b $315 3° ;333 °Sw
the Dallas Morning News
and the US Census
°.242 3°W
Bureau, Prosper was the
second fastest growing
community in North Texas se°°,°°° $1 ,463
in 2014. The new homes
$1” afin
permitted in 2014 $9 „ '1,915 $1, q'xl
$400,000nmm 5 11111134 $7 1M
averaged $442K.
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3
l
$ IIIIII uull ° zao7 z°oe z°�e z°n° z°a illlll
The Town has maintained 2004 20055 4 °°,�3 20,44
significant growth. Certified E!!,uum Ctrtllfled Net Asstssed Taxakallt Wallauati1,,,, ^Avg H omit Taxa6ue Valaut
property valuations uses ARB approved Totally
Source Collin CAD and Denton CAD Certified Totals 2004-2014
$300,000
$°°°,°°°
$150,°o0
$10°,°°°
$'50,0°°
increased by $301M (19.3%) for FY 2014-2015, from $1,557.5M to $1,858.5M. New
construction accounted for $143M of the increase in value. Most of the Town's current
values come from Collin County properties, but the Denton County portion is expected to
have new developments in the near future.
The economy dictates the timing of population increases, but the final population will most
greatly be affected by the types of development that occur. The Town Council updated the
2012 Comprehensive Plan in 2014, during the annual plan review. Policy -makers and Town
staff will use this document as a guide while reviewing development projects and the Town
budget, prioritizing capital improvement projects and drafting ordinances to direct growth that
leads to the established vision. The Future Land Use Plan (below), updated in 2014, sets an
overall framework for the preferred pattern of development within Prosper.
June il'1*d, I Future
mouuuuuu „,,w„ Land Use
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The Town Council has continued its implementation of rate recommendations that support
the adopted Water and Wastewater Utility Comprehensive Business Plan. The Plan contains
recommendations to enhance revenues, to establish at least a 60 -day operations and
maintenance reserve, and to fund an annual contribution of 2% to a capital replacement
program.
More detailed revenue information can be explored in the MD&A section of the financial
section of this CAFR.
The DFW Metroplex continues to outperform most other major metropolitan areas for job
growth and stability. Town staff believes Prosper will maintain steady economic development
and is currently positioning itself for rapid growth.
iv
Accounting System and Budgetary Control
Town management is responsible for establishing and maintaining an internal control
structure designed to ensure that the assets of the Town are protected from loss, theft, or
misuse. Management must also ensure that adequate accounting data is compiled to allow
for the preparation of financial statements in conformity with GAAP. The internal control
structure is designed to provide reasonable, but not absolute, assurance that these objectives
are met. The concept of reasonable assurance recognizes that (1) the cost of a control
should not exceed the benefits likely to be derived, and (2) the valuation of costs and benefits
requires estimates and judgments by management. All internal control evaluations occur
within the above framework.
The Town's accounting records for general governmental operations are maintained on a
modified accrual basis, with revenues recognized when measurable and available, and
expenditures recorded when the liability is incurred. Proprietary operations are maintained
on a full accrual basis.
The objective of budgetary controls is to ensure compliance with legal provisions contained in
the annual budget approved by the Town Council. The annual budget is developed and
controlled at the department level, and serves as the foundation for the Town's financial
planning and control. The budget is prepared by fund and department (e.g. General Fund —
Police, General Fund — Fire, Water/Wastewater Fund — Utility Billing). Department Heads
may transfer resources within a department with the Town Manager's approval. Any
amendments or additional funding requests for appropriations over that of the budgeted
department level total are approved by the Town Council, even though the Town Charter
limits are at the fund level.
The accompanying CAFR incorporates all funds of the Town and includes all government
activities, organizations and functions for which the Town is financially accountable. The
criteria used in determining activities to be reported within the Town's basic financial
statements are based upon and consistent with those set forth by the Governmental
Accounting Standards Board.
Component units are legally separate organizations that a primary government must include
as a part of its financial entity. On May 6, 1995, Town of Prosper voters approved the 4A
Sales Tax proposition which increased the sales and use tax by 'h of 1 % for the promotion
and development of new and expanded business enterprises. The 4A funds account for the
local sales tax used to encourage additional private investment that will increase and diversify
the tax base, create jobs, lower residential taxes, increase the number of retail, commercial
and industrial companies locating to the Town and improve Prosper residents' quality of life.
The Economic Development Corporation is Town -chartered and governed by a seven -
member Board of Directors appointed by the Town Council. The Town has included financial
statements for the Prosper Economic Development Corporation in its government -wide
financial statements.
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 Town of
Prosper, Texas for its comprehensive annual financial report for fiscal year ended September
30, 2013. The Town has received a Certificate of Achievement for the last four consecutive
years. In order to be awarded a Certificate of Achievement, a government unit must publish
an easily readable and efficiently organized comprehensive annual financial report. This
report must satisfy both generally accepted accounting principles and applicable legal
requirements.
v
A Certificate of Achievement is valid for a period of one year only. We believe the current
report continues to conform to the Certificate of Achievement program requirements and we
are submitting it to GFOA for consideration.
Acknowledgements
The preparation of this report could not be accomplished without the efficient and dedicated
services of the Town Manager and Finance Department staff. I would like to express my
appreciation to all employees who contributed to its presentation. Acknowledgement is also
given to the representatives of Davis Kinard & Co. PC for their assistance in this year's report
with special thanks to Cara Hilbrich, the Audit Manager for this engagement.
I would also like to thank the members of the Town Council for their interest and support in
planning and conducting the financial operations of the Town in a responsible and
progressive manner.
Respectfully submitted,
Kim Galvin,` PA, CGFO
Interim Director of Finance
vi
G�
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Town of Prosper
Texas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2013
*/400w A* -.V
Executive Director/CEO
Vii
viii
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1
TOWN OF PROSPER, TEXAS
LIST OF PRINCIPAL OFFICIALS
FISCAL YEAR ENDED SEPTEMBER 30, 2014
TOWN COUNCIL
MAYOR RAY SMITH V
i it �„ piIIN IVi
COUNCIL MEMBER PLACE 4, MAYOR PRO—TEM MEIGS MILLER
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COUNCIL MEMBER PLACE 2, DEPUTY MAYOR PRO—TEM KENNETH DUGGER �6
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COUNCIL MEMBER PLACE 1 MICHAEL KORBULY
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COUNCIL MEMBER PLACE 3 CURRY VOGELSANG, JR.
illi �� inly
COUNCIL MEMBER PLACE S MIKE DAVIS
COUNCIL MEMBER PLACE 6 JASON DIXON
APPOINTED OFFICIALS
TOWN MANAGER
HARLAN JEFFERSON
TOWN SECRETARY
ROBYN BATTLE
CHIEF OF POLICE
DOUG KOWALSKI
FIRE CHIEF
BONNIE TUCKER
EXECUTIVE DIRECTOR OF DEVELOPMENT AND COMMUNITY SERVICES
HULON WEBB
INTERIM DIRECTOR OF FINANCE
KIM GALVIN
DIRECTOR OF DEVELOPMENT SERVICES
JOHN WEBB
DIRECTOR OF HUMAN RESOURCES
BABY RALEY
DIRECTOR OF PUBLIC WORKS
FRANK JAROMIN
1X
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Independent Auditor's Report
"Fo the Honorable Mayor and Members of the Town Council
Town of Prosper, 'Texas
Fir"'t Financifl Hw& BuRding
100 Rrw sh,cQt, Ste 600, Abdene,TX 79601
12 672,4000 800,588,2525 / E 125,6723049
We have audited the accompanying financial statements of the govcniniental activities, the business -type activities, the
discretely presented component unit, cacti major fund, and tile aggregate remaining fund information of tile Town ot'Prosper,
Texas (tile Town), as ofand for the year ended September 30, 2014, and the related notes to tile financial statements, which
collectively comprise the Town's basic financial statenicrits as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements ill accordance with accounting
principles generally accepted in the United States of America; this include-, the design, implementation, and maintenance of
internal control relevant to tile preparation and fair presentation of financial statements that are free from material misstatement,
wlictlier due to fraud or error-.
Auditor's Responsibility
Our responsibility is to express opinions on these financial staternents based oil our audit. We conducted our audit in
accordance ,vith auditing standards generally accepted in the United States of America. 1, hosc standards require that we plan
and peiforni the audit to obtain reasonable assurance about %viiether the financial statements are free of material misstatement.
Ali audit involves perforining procedures to obtain audit evidence about the arnounts and disclosures in the financial statements.
The procedures selected depend oil the auditor's judgincut, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessment,,, the auditor considers internal control
relevant to tile entity's preparation and fair presentation of tile financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the cntily's internal
control. Accordingly, we express no such opinion, Ali audit also includes evaluating tile appropriateness of accounting
principles used and the reasonableness of significant accounting estimates made by nianagenicnt, as Well as CV11hiating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our of.iinion, Oic financial statements referred to above present fairly, in all material respects, the respective financial position
of the governmental activities, the busi ness., type activities, the discretely presented component unit, each major fund, and the
aggregate remaining Rand inforniation of the Town as of September 30, 2014, and the respective changes in financial position
and, where applicable, cash flows thereof and the budgetary comparison for the general, impact fee and contribution funds for
the year then ended in conforinity kvith accounting principles generally accepted in the United States of'American.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and
analysis on pages 3 through 11 be presented to supplement the basic financial statements. Such information, although not a part
of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. We have applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the
methods of preparing the information and comparing the information for consistency with management's responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion 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.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town's
basic financial statements. The introductory section, individual fund schedules, and statistical section are presented for purposes
of additional analysis and are not a required part of the basic financial statements.
The individual fund schedules are the responsibility of management and were derived from and relate directly to the underlying
accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the individual fund schedules are fairly stated in
all material respects in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic
financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
,DWS "ee� ve a, tot: -
Certified Public Accountants
Abilene, Texas
March 13, 2015
TOWN OF PROSPER, TEXAS
Management Discussion and Analysis
As management of the Town of Prosper, Texas, we offer readers of the Town of Prosper's financial statements this
narrative overview and analysis of the financial activities of the Town of Prosper for the fiscal year ended September
30, 2014.
Financial Highlights
➢ The assets of the Town of Prosper, on a government -wide basis, exceeded its liabilities at the close of the most
recent fiscal year by $92,275,365 (net position). Of this amount, $13,710,109 (unrestricted net position) may be
used to meet the government's ongoing obligations to citizens and creditors.
➢ The government's total net position increased by $10,748,218. Most of the increase is due to property taxes, sales
taxes, impact and escrow fees, and capital grants and contributions.
➢ As of the close of the current fiscal year, the Town of Prosper's governmental funds reported combined ending
fund balances of $28,816,624 (made up of $7,587,994 in general fund, $10,016,129 in impact fee fund, $1,158,927
in debt service fund, $5,398,836 in capital projects fund and $4,654,738 in other governmental funds), an increase
of $1,277,354 in comparison with the prior year. The increase is primarily due to $3,340,000 in proceeds from
issuance of bonds. $5,429,758 is unassigned and available for spending at the government's discretion.
➢ At the end of the current fiscal year, unassigned fund balance for the general fund was $5,429,758 or 50.46 percent
of total general fund expenditures and is available for spending at the government's discretion.
➢ The Town's long-term liabilities increased by $11,457,823 during the year due to issuance of the 2014 General
Obligation Refunding Bonds for $7,175,000 and the 2014 Certificates of Obligation for $12,570,000.
➢ The Town's capital assets increased by $6,827,748, primarily due to additional capital projects funded by bond
proceeds.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the Town of Prosper's basic financial statements.
The Town of Prosper's basic financial statements comprise three components: 1) government -wide financial
statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other
supplementary information in addition to the basic financial statements themselves.
Government -wide financial statements - The government -wide financial statements are designed to provide readers
with a broad overview of the Town of Prosper's finances, in a manner similar to a private -sector business.
The Statement of Net Position presents information on all of the Town of Prosper's assets and liabilities, with the
difference between the two reported as net position. Over time, increases or decreases in net position may serve as a
useful indicator of whether the financial position of the Town of Prosper is improving or deteriorating.
The Statement of Activities presents information showing how the government's net position changed during the most
recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change
occurs, regardless of the time 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 Town of Prosper 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 Town of Prosper include general government, public safety, public works, recreation,
and transportation. The business -type activities of the Town of Prosper include the water and sewer system, as well as
sanitation collection and disposal, and storm drainage.
The government -wide financial statements include not only the Town of Prosper itself (known as the primary
government), but also a legally separate economic development corporation. Financial information for this component
unit is reported discretely with the financial information presented for the primary government itself. The government -
wide financial statements can be found on pages 12 — 14 of this report.
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 Town of Prosper, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements.
The funds of the Town of Prosper can be divided into two categories: governmental funds and proprietary funds.
Governmental funds - Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government -wide financial statements. However, unlike the government -wide financial
statements, governmental fund financial 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 more narrow 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 Town of Prosper maintains six governmental funds. Information is presented separately in the governmental fund
balance sheet and statement of revenues, expenditures, and changes in fund balances for the general fund, impact fee
fund, debt service fund, capital projects fund and contributions fund, all of which are considered to be major funds.
The Town of Prosper adopts an annual appropriated budget for its general fund, impact fee fund and contributions
fund. Budgetary comparison statements have been provided for these funds to demonstrate compliance with the
budgets.
The basic governmental fund financial statements can be found on pages 15 - 25 of this report.
Proprietary funds - The Town of Prosper maintains two types of proprietary funds. Enterprise funds are used to
report the same functions presented as business -type activities in the government -wide financial statements. The Town
of Prosper uses enterprise funds to account for its water, sewer, sanitation, and storm drainage activities. Proprietary
funds provide the same type of information as the government -wide financial statements, only in more detail.
Budgetary comparison statements for the enterprise funds can be found on pages 47 - 48 of this report.
The internal service fund is used to accumulate and allocate costs internally among the Town's various functions. The
Town uses its internal service fund to account for its employee medical reimbursement program. Because these
services predominately benefit the governmental rather than the business -type functions, they have been included
within governmental activities in the government -wide financial statements.
The basic proprietary fund financial statements can be found on pages 26 - 29.
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 on pages 30 - 46 of this report.
Government -wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the
case of the Town of Prosper, assets exceeded liabilities by $92,275,365 at the close of the most recent fiscal year.
A portion of the Town of Prosper's net position (70 percent) reflects its investment in capital assets (e.g., land,
buildings, machinery, and equipment), less any related debt used to acquire those assets that are still outstanding. The
Town of Prosper uses these capital assets to provide services to citizens; consequently, these assets are not available for
future spending. Although the Town of Prosper's investment in its capital assets is reported net of related debt, it
should be noted that the resources needed to repay this debt must be provided from other sources, since the capital
assets themselves cannot be used to liquidate these liabilities.
An additional portion of the Town of Prosper's net position (15 percent) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net position (15 percent) may be
used to meet the government's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the Town of Prosper is able to report positive balances in all categories of net
position, both for the government as a whole, as well as for its separate governmental and business -type activities.
Town of Pros per's Net Pos ition
Government -Wide
(In thousand dollars)
5
Governmental
Business -type
Activities
Activities
Total
(Restated)
(Restated)
2014
2013
2014
2013
2014
2013
Current and other assets $
15,953
$ 13,396 $
4,293
$ 6,455 $
20,246 $
19,851
Intangible assets
15,579
15,579
-
Restricted assets
16,432
16,212
7,287
11,850
23,719
28,062
Capital assets
67,659
64,830
31,987
27,988
99,646
92,818
Total assets
100,044
94,438
59,146
46,293
159,190
140,731
Deferred charge for debt
refunding
21
10
45
28
66
38
Total outflows of resources
21
10
45
28
66
38
Long-term liabilities
28,483
28,936
35,210
23,299
63,693
52,235
Other liabilities
2,599
1,983
689
5,060
3,288
7,043
Total liabilities
31,082
30,919
35,899
28,359
66,981
59,278
Net position:
Net investment in capital assets
45,398
43,471
19,708
12,643
65,106
56,114
Restricted
13,459
9,882
13,459
9,882
Unrestricted
10,126
10,176
3,584
5,319
13,710
15,495
Total net position $
68,983
$ 63,529 $
23,292
$ 17,962 $
92,275 $
81,491
5
Town ofProsper's Changes in Net Position
0
Government -wide
(In thousand dollars)
Governmental
Business -type
Activities
Activities
Total
(Restated)
(Restated)
(Restated)
2014
2013 2014 2013
2014
2013
Revenues:
Program revenues:
Charges for services $
3,176 $
2,564 $
9,080 $
9,099 $
12,256 $
11,663
Operating grants & contributions
113
93
113
93
Capital grants & contributions
5,277
5,716
3,897
9,174
5,716
General revenues:
Property taxes
8,411
7,314
8,411
7,314
Other taxes
3,403
2,998
3,403
2,998
Other income
266
749
181
266
447
1,015
Total revenues
20,646
19,434
13,158
9,365
33,804
28,799
Expenses:
General government
1,984
1,658
1,984
1,658
Police
1,699
1,477
1,699
1,477
Dispatch
712
667
712
667
Court
444
307
444
307
Fire
2,755
2,601
2,755
2,601
Streets
2,667
1,825
2,667
1,825
Parks and recreation
2,362
1,799
2,362
1,799
Library
100
87
100
87
Engineering
459
208
459
208
Code enforcement
690
569
690
569
Inspections
146
160
146
160
Planning
419
295
419
295
Interest on long-term debt
1,119
1,318
1,119
1,318
Utility
7,464
6,293
7,464
6,293
Total expenses
15,556
12,971
7,464
6,293
23,020
19,264
Revenues in Excess ofFxpenditures
5,090
6,463
5,694
3,072
10,784
9,535
Transfers
364
(73)
(364)
73
-
-
Change in net position
5,454
6,390
5,330
3,145
10,784
9,535
Net position - beginning of year,
restated
63,529
57,139
17,962
14,817
81,491
71,956
Net position - end of year $
68,983 $
63,529 $
23,292 $
17,962 $
92,275 $
81,491
0
The following key elements influenced the changes in net position from the prior year:
Revenues for FY 2013-2014 increased by $5,005,732 or 17 percent in comparison to FY 2012-2013. The increase is
primarily due to increases in miscellaneous revenues and property taxes. Capital grants and contributions increased
$3,458,216 from prior year, due to the recognition of funds held in escrow for the construction of West Side Utilities.
Property taxes increased $1,096,936 from prior year.
Governmental Activities
Governmental activities increased the Town of Prosper's net position by $5,453,766.
• Impact fee collections increased by $1,020,686 (36 percent) primarily due to planned real estate development.
Impact fees are included as part of capital contribution revenues.
• Total governmental activity expenses increased by $2,585,015 (20 percent) during the year primarily due to an
increase in streets of $841,732, an increase in parks and recreation of $562,996, and an increase in general
government of $326,368.
Business-tvpe Activities
Business -type activities increased the Town of Prosper's net position by $5,330,452.
• Operating revenue was very similar to the prior year.
• Operating expenses increased by $1,171,571 (19 percent) from the previous year due to an increase in contractual
services.
Financial Analysis of the Government's Funds
As noted earlier, the Town of Prosper uses fund accounting to ensure and demonstrate compliance with finance -related
legal requirements.
Governmental funds - The focus of the Town of Prosper's governmental funds is to provide information on near-term
inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Town of Prosper's
financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net
resources available at the end of the fiscal year.
At the end of the current fiscal year, the Town of Prosper's governmental funds reported combined ending fund balances
of $28,816,624, an increase of $1,277,354 from the prior year. Most of the increase is due to increases in property and
sales taxes, impact fees and other developer contributions, and proceeds from bond issuance during the year. Of the
current combined ending fund balance, $6,145 is nonspendable due to prepaids, $18,857,571 is restricted for debt service
and capital projects, $2,152,091 is committed for contingency in accordance with the Town charter, $2,371,059 is
assigned for specific purpose such as impact fees and other specific purposes, and $5,429,758 is unassigned.
The general fund is the chief operating fund of the Town of Prosper. At the end of the current fiscal year, unassigned
fund balance of the general fund was $5,429,758. Total unassigned fund balance represents 50 percent of total general
fund expenditures. The increase in fund balance of $511,651 is primarily due to increases in property and sales tax,
licenses and permits, and fines, fees, warrants and seizures, offset by transfers out for cash financing of capital projects.
The impact fee fund has a total fund balance of $10,016,129, which is restricted for capital projects. The increase in fund
balance of $3,414,559 is due to recognition of income for funds held in escrow for construction of West Side Utilities.
The debt service fund has a total fund balance of $1,158,927, all of which is restricted for payment of debt service. The
decrease in fund balance of $28,090 is primarily due to bond payments exceeding property tax revenues during the year.
The capital projects fund has a total fund balance of $5,398,836, all of which is restricted for construction. The decrease
in fund balance of $3,706,215 is primarily due to capital outlay of $5,481,233.
The contributions fund has a total fund balance of $2,283,679, which is restricted for capital projects. The increase in
fund balance of $191,078 is due to current year contribution revenues exceeding expenditures and transfers out during
the year.
Proprietary funds. The Town of Prosper's proprietary funds provide the same type of information found in the
government -wide financial statements, but in more detail.
Unrestricted net position of the water and sewer fund at the end of the year amounted to $3,359,895. The increase in total
net position of the water and sewer fund was $5,315,901. The factors concerning the finances of this fund have already
been addressed in the discussion of the Town of Prosper's business type activities.
General Fund Budgetary Highlights
During the year, revenues were $1,067,581 more than estimated and expenditures were $773,093 less than budgeted.
The majority of the excess revenues were in licenses and permits, fines and fees, and franchise taxes. The majority of
expenditure savings was in fire, followed by parks and recreation, police, and capital outlay. The positive variances in
revenues and expenditures allowed for transfers of $750,000 for cash financing of capital projects, and $800,000 as
initial investment in the new Vehicle and Equipment Replacement Fund (VERF). Even with the transfers, fund balance
increased by $511,651.
Capital Asset and Debt Administration
Capital assets. The Town of Prosper's investment in capital assets for its governmental and business -type activities as of
September 30, 2014, is $99,646,010 (net of accumulated depreciation). This investment in capital assets includes land,
buildings and systems, and equipment.
Major capital asset events during the current fiscal year included the following:
• Capital asset acquisitions in governmental activities totaled $5,718,704. The majority of this activity was funded
from bond proceeds and was for streets, parks, and related infrastructure.
• Capital asset additions in business -type activities totaled $4,634,385. The majority of this activity was funded from
bond proceeds and was for new water and sewer projects.
Government -wide capital assets:
Non -depreciable assets
Depreciable assets
Total capital assets
Less accumulated depreciation
Government -wide capital
assets, net
Governmental
Activities
(Restated)
2014 2013
Business -type
Activities
(Restated)
2014 2013
Total
2014 2013
$ 15,940 $
13,281 $
8,483 $
10,777 $
24,423 $
24,058
68,993
65,934
28,888
21,959
97,881
87,893
84,933
79,215
37,371
32,736
122,304
111,951
(17,274)
(14,384)
(5,384)
(4,749)
(22,658)
(19,133)
$ 67,659 $
64,831 $
31,987 $
27,987 $
99,646 $
92,818
Additional information on the Town of Prosper's capital assets can be found in Note 5 on pages 37 - 38 of this report.
Long-term debt. At the end of the current fiscal year, the Town of Prosper had bonded debt outstanding of $60,920,000.
This amount comprises debt backed by the full faith and credit of the government.
H.
The Town of Prosper's bond ratings are AA as assigned by Standard & Poor's on February 6, 2014, and Aa2 as assigned
by Moody's on February 10, 2014.
Total long-term debt consisted of the following:
Additional information on the Town of Prosper's long-term debt can be found in Note 8 on pages 40 - 42 of this report.
Economic Factors and Next Year's Budgets and Rates
The Town continues to thrive, with residential and commercial development occurring at the highest levels the Town has
ever seen. The resulting increase in property values reflects the commitment of the Council and the efforts of the
Prosper Economic Development Corporation (PEDC) to attract quality development. The FY 2014-2015 adopted budget
addresses the need for increased service levels due to the growth. The budget provides essential capital investments in
infrastructure and other public improvements, as well as additional public safety resources.
Revenue Proiection HlehliRhts
Despite the Town's current and future growth potential and general optimism, the budget has been prepared with
conservative revenue assumptions in mind.
• The adopted Ad Valorem Property Tax Rate in the coming fiscal year is equal to last year's rate and is set at
$0.52 per one hundred dollars taxable valuation. Certified property valuations increased by $301M (19.3%) for
FY 2014-2015. Property values increased from $1,557.5M to $1,858.5M. Approximately half of the increase
was a result of new construction, accounting for $142,130,743. Most of the Town's current values come from
Collin County properties, but the Denton County portion is expected to have new developments in the near
future.
• Sales tax revenue is projected to reach $2,933,823, compared to FY 2013-2014's actual amount of $2,806,815.
Growth in new business and a general increase in existing retail sales are expected in FY 2014-2015, just as in
FY 2013-2014.
• Building Permit Revenues are expected to increase to $1,950,000 or 25.5% when compared to the FY 2013-
2014 Adopted Budget of $1,554,300. The Town expects to issue 550 or more new residential permits in the
coming year.
• Licenses and Franchise Fees are projected to rise slightly with population. Municipal Court fines are estimated
at $245,000, compared with the FY 2013-2014 budget of $215,000.
• Revenues for the Water, Sewer, and Solid Waste Fund are expected to increase to $10,295,293. The adopted
business plan for the fund identifies the need for revenue enhancements to cover existing and future operations
and maintenance costs as well as debt service and contracted sewer costs with the Upper Trinity Regional Water
District. Even so, the Town is not changing rates for FY 2014-2015, choosing instead to focus on internal
savings. In addition, under the solid waste agreement approved by Town Council in FY 2012-2013, the Town's
solid waste provider agreed to hold rates steady for three years.
0
Governmental
Business -type
Activities
Activities
Total
2014
2013
2014 2013
2014
2013
Government -wide long-term debt:
Certificates of obligation and
general obligation bonds $
26,213 $
26,746 $
33,627 $ 22,703 $
59,840 $
49,449
Bond Premium on Issuance
636
379
1,506 546
Tax notes payable
1,080
1,425
1,080
1,425
Compensated absences payable
554
386
76 49
630
435
Total government -wide long-term
debt $
28,483 $
28,936 $
35,209 $ 23,298 $
61,550 $
51,309
Additional information on the Town of Prosper's long-term debt can be found in Note 8 on pages 40 - 42 of this report.
Economic Factors and Next Year's Budgets and Rates
The Town continues to thrive, with residential and commercial development occurring at the highest levels the Town has
ever seen. The resulting increase in property values reflects the commitment of the Council and the efforts of the
Prosper Economic Development Corporation (PEDC) to attract quality development. The FY 2014-2015 adopted budget
addresses the need for increased service levels due to the growth. The budget provides essential capital investments in
infrastructure and other public improvements, as well as additional public safety resources.
Revenue Proiection HlehliRhts
Despite the Town's current and future growth potential and general optimism, the budget has been prepared with
conservative revenue assumptions in mind.
• The adopted Ad Valorem Property Tax Rate in the coming fiscal year is equal to last year's rate and is set at
$0.52 per one hundred dollars taxable valuation. Certified property valuations increased by $301M (19.3%) for
FY 2014-2015. Property values increased from $1,557.5M to $1,858.5M. Approximately half of the increase
was a result of new construction, accounting for $142,130,743. Most of the Town's current values come from
Collin County properties, but the Denton County portion is expected to have new developments in the near
future.
• Sales tax revenue is projected to reach $2,933,823, compared to FY 2013-2014's actual amount of $2,806,815.
Growth in new business and a general increase in existing retail sales are expected in FY 2014-2015, just as in
FY 2013-2014.
• Building Permit Revenues are expected to increase to $1,950,000 or 25.5% when compared to the FY 2013-
2014 Adopted Budget of $1,554,300. The Town expects to issue 550 or more new residential permits in the
coming year.
• Licenses and Franchise Fees are projected to rise slightly with population. Municipal Court fines are estimated
at $245,000, compared with the FY 2013-2014 budget of $215,000.
• Revenues for the Water, Sewer, and Solid Waste Fund are expected to increase to $10,295,293. The adopted
business plan for the fund identifies the need for revenue enhancements to cover existing and future operations
and maintenance costs as well as debt service and contracted sewer costs with the Upper Trinity Regional Water
District. Even so, the Town is not changing rates for FY 2014-2015, choosing instead to focus on internal
savings. In addition, under the solid waste agreement approved by Town Council in FY 2012-2013, the Town's
solid waste provider agreed to hold rates steady for three years.
0
Appropriated Budget Highlights
The adopted budget addresses increased service levels in response to continued growth, provides required or money-
saving capital investments in infrastructure, and includes other public improvements as well as additional public safety
resources.
Program enhancements and capital expenditures included in the adopted appropriations and planned for the FY 2014-
2015 by division are as follows:
Administration
The Town budgeted for a complete website redesign in order to improve customer service by providing additional
information, more functionality, and timely updates. Funding is also included for improvements to the electronic records
management strategy for multiple departments.
Community Library
The FY 2014-2015 budget includes funding for the Community Library to obtain its own integrated library system (ILS).
The Town's library, located inside the Reynolds Middle School library, currently shares the Prosper ISD's ILS, which is
a computerized system designed specifically for schools. With the new, permanent Library Director now in place, the
library is in a position to focus on the organization, analysis, and control of its collection as utilization of the library
continues to grow.
Police Operations & Dispatch
Three additional Patrol Officers and one Sergeant are included in the Police Department budget.
Fire, EMS & Fire Marshall
Twelve Firefighter/Paramedics will be phased in during FY 2014-2015, in preparation for staffing the new Windsong
Ranch Fire Station. Also, funding is included in the FY 2014-2015 budget for increased collection fees associated with
expanding ambulance service. During FY 2013-2014, the Town implemented an EMS contract with a new vendor who
will provide not only collection services, but updated technology to help keep pace with the ever changing healthcare
environment.
Streets
The Streets Department budget includes money for downtown enhancements, partial street lighting along Preston Road,
gravel road maintenance, and a new crack sealing program. This program will initially seal ten percent (10%) of the
Town's streets.
Development Services
In the Parks and Recreation Department, the budget includes funding for one Senior Administrative Assistant. Also
included are funds to increase promotion of recreation programs, additional monies for the annual Christmas festival, and
funding for a number of repair and maintenance projects. These improvements include rye grass for sports fields and
wood fiber for playground safety. Other major items include southwest corner Frontier Park lighting, and central control
irrigation, which will allow remote monitoring, staff time savings, and water conservation.
The FY 2014-2015 budget also includes funding for an IVR solution for inspections workflow management and the
addition of capital projects management software. Staffing additions include one Administrative Assistant for the
Inspections Division, one Plumbing Inspector, and one Planner.
10
Water/Wastewater Utility
Funding for FY 2014-2015 includes one Utility Crew Leader, one Heavy Equipment Operator, and a Stormwater Utility
Administrator. Equipment purchases will include a vac trailer/jetter and a backhoe.
129,11a
A new fund was established beginning with FY 2014-2015 for the replacement of vehicles, heavy equipment, and IT
equipment. The Vehicle and Equipment Replacement Fund (VERF) is funded by an initial investment of $800,000 from
the General Fund in both FY 2013-2014 and in FY 2014-2015, with scheduled replacements beginning in FY 2014-
2015. The Town's operating funds will make contributions based on the expected lives of the existing equipment,
providing funding for future replacements.
The following items also have been incorporated into the Adopted FY 2014-2015 Budget:
The adopted budget includes two requests intended to make the Town more competitive as an employer. First
is a request that would move employees up to at least the minimum pay range for their position. A
compensation survey of 37 benchmark jobs in spring 2014 found that 24 positions were being paid below the
minimum of the survey group. Adjusting the pay for these positions would cost $20,510. Next, the
compensation survey found that some employees were being paid above the minimum but should be raised
further within their pay range. Aligning pay with the market and the Town's pay for performance philosophy
would cost $217,554.
The TMRS rate budgeted for FY 2014-2015 is 11.87%, which is equal to the Annual Required Contribution
(ARC) Rate required by GASB Statement Number 27.
• Effective August 1, 2014, the Town's benefit provider contracts were updated. Providers include Blue
Cross/Blue Shield for medical insurance, Delta Dental for dental insurance, and Mutual of Omaha for life, long-
term disability, and AD&D insurance. The two medical plan options initiated in FY 2012-2013 will continue in
FY 2014-2015: the PPO (Preferred Provider Organization) plan and the HDHP (High Deductible Health Plan)
with an HSA (Health Savings Account).
• Continued partnerships with local entities have produced multiple saving opportunities for shared services or
improving our customer service to residents and visitors alike. The Town continues to operate the Community
Library in the Reynolds Middle School. The Town renewed its agreements, along with several area cities, with
Collin County for animal control and sheltering service. The Town has several agreements with Frisco,
including the use of the Frisco GIS.
All these factors were considered in preparing the Town of Prosper's Budget for the FY 2014-2015.
Request for Information
This financial report is designed to provide a general overview of the Town of Prosper's finances for all those with an
interest in the government's finances. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to the Office of the Town Manager, P. O. Box 307, Prosper, Texas
75078.
11
TOWN OF PROSPER, TEXAS
Statement of Net Position
September 30, 2014
Primary Government
Governmental Business -Type
Activities Activities
ASSETS
Cash and cash equivalents $
5,814,921 $
Investments
6,387,496
Taxes receivable, net
560,476
Receivables, net
258,496
Due from component unit
255,988
Prepaid
6,145
Inventory
Internal balances
2,668,612
Net pension asset
38,071
Restricted cash and investments
16,394,206
Intangible assets
Capital assets:
Land and construction in progress
15,939,840
Other capital assets, net
51,719,233
Total assets
100,043,484
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges for refunding
21,300
Total outflows of resources
21,300
LIABILITIES
Accounts payable
1,894,065
Accrued interest
154,121
Customer deposits and escrow payable
550,614
Due to primary government
Noncurrent liabilities:
Due within one year
1,767,017
Due in more than one year
26,715,699
Total liabilities
31,081,516
NET POSITION
Net investment in capital assets
45,398,209
Restricted for:
Debt service
1,158,927
Capital projects
12,299,808
Unrestricted
10,126,324
Total net position $
68,983,268 $
1,962,175 $
4,126,304
796,951
2,050
73,160
(2,668,612)
5,561
7,281,119
15,578,922
8,482,675
23,504,262
59,144,567
45,297
45,297
472,004
165,547
51,000
1,989,094
33,220,122
35,897,767
19,708,312
3,583,785
23,292,097 $
Total
7,777,096 $
10,513,800
560,476
1,055,447
255,988
8,195
73,160
43,632
23,675,325
15,578,922
24,422,515
75,223,495
159,188,051
66,597
66,597
2,366,069
319,668
601,614
3,756,111
59,935,821
66,979,283
65,106,521
1,158,927
12,299,808
13,710,109
92,275,365 $
The accompanying notes are an integral part of these financial statements.
12
Component
Unit
Prosper Economic
Development
Corporation
2,586,296
2,515
172,395
2,500
2,763,706
12,135
255,988
23,303
291,426
2,472,280
2,472,280
TOWN OF PROSPER, TEXAS
Statement of Activities
For the Year Ended September 30, 2014
General Revenues and Transfers
Property taxes
Sales and use taxes
Franchise taxes
Unrestricted investment earnings
Miscellaneous revenue
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning (restated)
Net position - ending
The accompanying notes are an integral part of these financial statements.
13
Program Revenues
Operating
Capital
Charges for
Grants and
Grants and
Expenses
Services
Contributions
Contributions
Primary Government
Governmental activities
General government
$ 1,984,336 $
353,005
$ 41,591 $
105,000
Police
1,698,626
38,891
27,079
Dispatch
711,863
Court
444,223
336,515
5,456
Fire
2,754,823
209,243
20,087
Streets
2,666,937
4,145,822
Parks and recreation
2,362,310
4,050
1,026,585
Library
99,811
18,771
Engineering
458,845
Inspections
690,429
2,117,969
Code enforcement
145,742
12,550
Planning
419,095
103,505
Interest and fiscal charges
1,118,501
Total governmental activities
15,555,541
3,175,728
112,984
5,277,407
Business -type activities
Water and sewer
7,271,836
8,832,596
3,897,241
Storm drainage
192,493
247,660
Total business -type activities
7,464,329
9,080,256
-
3,897,241
Total Primary Government
$ 23,019,870 $
12,255,984
$ 112,984 $
9,174,648
Component Unit
Economic development
545,329
Total component unit
$ 545,329 $
-
$ - $
-
General Revenues and Transfers
Property taxes
Sales and use taxes
Franchise taxes
Unrestricted investment earnings
Miscellaneous revenue
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning (restated)
Net position - ending
The accompanying notes are an integral part of these financial statements.
13
Net (Expense) Revenue and Changes in Net Position
Component
Primary Government
Unit
Prosper Economic
Governmental
Business -type
Development
Activities
Activities
Total
Corporation
(1,484,740) $
$
(1,484,740)
(1,632,656)
(1,632,656)
(711,863)
(711,863)
(102,252)
(102,252)
(2,525,493)
(2,525,493)
1,478,885
1,478,885
(1,331,675)
(1,331,675)
(81,040)
(81,040)
(458,845)
(458,845)
1,427,540
1,427,540
(133,192)
(133,192)
(315,590)
(315,590)
(1,118,501)
(1,118,501)
(6,989,422)
-
(6,989,422)
5,458,001
5,458,001
55,167
55,167
-
5,513,168
5,513,168
(6,989,422)
5,513,168
(1,476,254)
$
(545,329)
(545,329)
8,410,508
8,410,508
2,806,815
2,806,815
931,796
596,421
596,421
114,698
104,872
219,570
18,996
150,590
76,568
227,158
4,734
364,156
(364,156)
-
12,443,188
(182,716)
12,260,472
955,526
5,453,766
5,330,452
10,784,218
410,197
63,529,502
17,961,645
81,491,147
2,062,083
68,983,268 $
23,292,097 $
92,275,365 $
2,472,280
14
TOWN OF PROSPER, TEXAS
Balance Sheet - Governmental Funds
September 30, 2014
The accompanying notes are an integral part of these financial statements
15
Impact
Debt
General
Fee
Service
Fund
Fund
Fund
ASSETS
Cash and cash equivalents
$
4,196,318
$
$
Investments
5,233,990
Taxes receivable (net)
545,901
14,575
Accounts receivable (net)
250,309
Due from other funds
3,489,039
4,120,483
10,160
Due from component unit
88
255,900
Prepaid
6,145
Restricted cash and investments
7,211,491
1,148,767
Total Assets
$
13,721,790
$
11,587,874
$
1,173,502
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
Liabilities
Accounts payable and accrued expenses
$
694,154
$
23,405
$
Escrow payable
Due to other funds
5,269,461
1,548,340
Due to component unit
Total Liabilities
5,963,615
1,571,745
-
Deferred Inflows of Resources
Unavailable revenue
Property taxes
28,657
14,575
Fines and fees
141,524
Total Deferred Inflows of Resources
170,181
-
14,575
Fund Balance
Nonspendable for:
Prepaid
6,145
Restricted for:
Debt service
1,158,927
Capital projects
10,016,129
Committed for:
Contingency
2,152,091
Assigned
Unassigned
5,429,758
Total Fund Balances
7,587,994
10,016,129
1,158,927
Total Liabilities, Deferred Inflows of
Resources and Fund Balance
$
13,721,790
$
11,587,874
$
1,173,502
The accompanying notes are an integral part of these financial statements
15
Capital
Nonmaj or
Total
Projects
Contributions
Governmental
Governmental
Fund
Fund
Fund
Funds
$
$
742,098 $
4,938,416
1,153,506
6,387,496
560,476
3,187
253,496
2,619
1,547,045
605,407
9,774,753
255,988
6,145
6,529,608
1,504,340
16,394,206
6,532,227 $
3,054,572 $
2,501,011 $
38,570,976
982,075 $ 166,662 $ $ 1,866,296
550,614 550,614
151,316 53,617 129,952 7,152,686
1,133,391 770,893 129,952 9,569,596
43,232
141,524
- - - 184,756
6,145
1,158,927
5,398,836 2,283,679 17,698,644
2,152,091
2,371,059 2,371,059
5,429,758
5,398,836 2,283,679 2,371,059 28,816,624
6,532,227 $ 3,054,572 $ 2,501,011 $ 38,570,976
TOWN OF PROSPER, TEXAS
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
September 30, 2014
Total Fund Balances - Governmental Funds
Amounts reported for governmental activities in the statement of net position (page 12) are
different because:
Capital assets used in governmental activities are not current financial resources and therefore
are not reported in the governmental funds balance sheet.
Bonds payable will not be liquidated with current financial resources and therefore have not
been included in the fund financial statements.
Accrued liabilities for compensated absences will not be liquidated with current financial
resources and therefore have not been included in the fund financial statements.
Interest payable on long-term debt is accrued in the government -wide financial statements,
whereas in the fund financial statements, interest expenditures are reported when due.
Premiums ($636,301) on bond issuances less deferred losses on bond refunding of ($21,300) are
recorded as other financing sources and uses when paid in the fund financial statements but are
capitalized and amortized in the government -wide financial statements over the life of the
bonds.
Receivables from property taxes and fines and fees are not available soon enough to pay for the
current period's expenditures and are, therefore, deferred in the funds.
Non-current assets for the overpayment of current year pension obligations is not available soon
enough to pay for the current period's expenditures, and are therefore not reported as assets in
the funds.
The Town uses an internal service fund to charge the costs of the medical reimbursement
program to appropriate departments in other funds. The assets and liabilities of the insurance
fund are included in governmental activities in the statement of net position. The net effect is to
increase net position.
Net Position of Governmental Activities
The accompanying notes are an integral part of these financial statements
17
$ 28,816,624
67,659,073
(27,292,850)
(553,565)
(154,121)
(615,001)
184,756
38,071
900,281
$ 68,983,268
TOWN OF PROSPER, TEXAS
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds
For the Year Ended September 30, 2014
The accompanying notes are an integral part of these financial statements
18
Impact
Debt
General
Fee
Service
Fund
Fund
Fund
REVENUES
Taxes:
Property $
5,284,325 $
$
3,146,553
Sales
2,806,815
Franchise
596,421
Licenses and permits
2,102,183
Charges for services
206,802
Impact fees
3,829,464
Escrow income
Grants
28,332
Investment income
47,575
12,864
18,124
Fines, fees, warrants and seizures
805,706
Contributions
Miscellaneous
149,039
Total Revenues
12,027,198
3,842,328
3,164,677
EXPENDITURES
Current:
General government
1,884,930
Police
1,600,830
Dispatch
597,132
Court
245,606
Fire
2,484,883
Streets
504,244
408,199
Parks and recreation
1,446,238
Library
99,544
Engineering
444,644
Inspection
676,990
Code enforcement
145,133
Planning
415,879
Capital outlay
214,401
19,570
Debt service:
Principal
1,638,246
Interest and fiscal charges
1,163,134
Bond issue costs and fees
5,507
Total Expenditures
10,760,454
427,769
2,806,887
Excess (Deficiency) of Revenue over Expenditures $
1,266,744 $
3,414,559 $
357,790
The accompanying notes are an integral part of these financial statements
18
Capital
Projects
Fund
28,180
105,000
133,180
117,574
5,481,233
4,001
5,602,808
(5,469,628) $
Contributions
Fund
316,358
4,086
3,250
84,652
1,551
409,897
5,315
198,617
4,806
10,081
218,819
191,078 $
Nonmajor
Governmental
Fund
3,290
1,026,586
1,029,876
132,005
3,500
135,505
894,371 $
19
Total
Governmental
Funds
8,430,878
2,806,815
596,421
2,102,183
206,802
3,829,464
316,358
28,332
114,119
808,956
1,216,238
150,590
20,607,156
2,002,504
1,606,145
597,132
444,223
2,489,689
912,443
1,588,324
99,544
444,644
676,990
145,133
415,879
5,718,704
1,638,246
1,163,134
9,508
19,952,242
654,914
TOWN OF PROSPER, TEXAS
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds
For the Year Ended September 30, 2014
The accompanying notes are an integral part of these financial statements
20
Impact
Debt
General
Fee
Service
Fund
Fund
Fund
OTHER FINANCING SOURCES (USES)
Issuance of debt
$ $
$
Issuance of refunding debt
2,355,000
Premium on issuance of bonds
277,810
Payments to bond escrow agent
(2,591,766)
Transfer in
801,700
12,780
Transfer out
(1,556,793)
-
(439,704)
Total Other Financing Sources (Uses)
(755,093)
-
(385,880)
Net change in fund balances
511,651
3,414,559
(28,090)
Fund balances, beginning - restated
7,076,343
6,601,570
1,187,017
Fund balances, ending
$ 7,587,994 $
10,016,129 $
1,158,927
The accompanying notes are an integral part of these financial statements
20
Capital
Nonmajor
Total
Projects
Contributions
Governmental
Governmental
Fund
Fund
Fund
Funds
985,000 $
$
$
985,000
2,355,000
34,400
312,210
(2,591,766)
756,793
1,571,273
(12,780)
-
(2,009,277)
1,763,413
-
-
622,440
(3,706,215)
191,078
894,371
1,277,354
9,105,051
2,092,601
1,476,688
27,539,270
5,398,836 $
2,283,679 $
2,371,059 $
28,816,624
21
TOWN OF PROSPER, TEXAS
Reconciliation of Statement of Revenues, Expenditures and Changes
in Fund Balances of Governmental Funds to the Statement of Activities
For the Year Ended September 30, 2014
Net Change in Fund Balances - Governmental Funds $ 1,277,354
Amounts reported for governmental activities in the statement of activities (pages 13 - 14) are different
because:
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. This is the amount by which capital outlay ($5,718,704) is exceeded by depreciation
expense ($2,890,104). 2,828,600
Principal payments on bonds payable of $1,368,750 and refunded bonds of $2,849,700 are
expenditures in the fund financial statements but are shown as reductions in long-term debt in the
government -wide financial statements. 4,218,450
Deferred losses on refunding and premiums are amortized over the life of the bonds in the
government -wide financial statements. This is the current year amortization. 54,472
Proceeds from bond premiums of $312,210 are recorded as other financing sources in the fund
financial statements, but increases liabilities in the government -wide financial statements. Deferred
losses on refunding of $11,562 are recorded as expense on the fund financial statements, but
increase assets in the government -wide financial statements. The net effect is a decrease in net
position. (300,648)
Proceeds from issuance of bonds are recorded as other financing sources in the fund financial
statements but increases liabilities in the government -wide financial statements. (3,340,000)
Additions to liabilities for compensated absences are not shown in the fund financial statements.
The net effect of the current year's increase is to decrease net position. (167,939)
Interest payable on long-term debt is accrued in the government -wide financial statements, whereas
in the fund financial statements, interest expenditures are reported when due. The increase in
interest accrual decreases net position. (331)
The Town uses an internal service fund to charge the costs of the medical reimbursement program to
the appropriate departments in other funds. The change in net position of the insurance fund is
reported with governmental activities. 808,321
Non-current assets due to the overpayment of current year pension obligations are accrued in the
government -wide financial statements, but are not reported in the funds. 38,071
Revenues from property taxes and fines are deferred in the fund financial statements until they are
considered available to fund current expenditures, but such revenues are recognized in the
government -wide statements. The effect of recognizing deferred tax and fines revenue of $184,756
and removing prior year's deferred tax recognized of $147,340 is to increase net position. 37,416
Change in Net Position of Governmental Activities $ 5,453,766
The accompanying notes are an integral part of these financial statements
22
TOWN OF PROSPER, TEXAS
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget (GAAP Basis) and Actual - General Fund
For the Year Ended September 30, 2014
The accompanying notes are an integral part of these financial statements
23
Variance
General Fund
With Final
Budget
Original
Final
Actual
Positive
Budget
Budget
Amounts
(Negative)
REVENUES:
Taxes
Property $
5,241,475 $
5,241,475 $
5,284,325 $
42,850
Sales
2,736,900
2,736,900
2,806,815
69,915
Franchise
473,000
473,000
596,421
123,421
Licenses and permits
1,679,300
1,679,300
2,102,183
422,883
Charges for services
184,000
184,000
206,802
22,802
Grants
18,087
18,087
28,332
10,245
Investment income
60,130
60,130
47,575
(12,555)
Fines, fees, warrants and seizures
511,350
511,350
805,706
294,356
Miscellaneous
55,375
55,375
149,039
93,664
Total Revenues
10,959,617
10,959,617
12,027,198
1,067,581
EXPENDITURES:
General government
1,827,468
1,889,468
1,884,930
4,538
Police
1,699,258
1,712,198
1,600,830
111,368
Dispatch
644,690
644,690
597,132
47,558
Court
257,028
243,728
245,606
(1,878)
Fire
2,689,833
2,680,306
2,484,883
195,423
Streets
1,291,305
541,305
504,244
37,061
Parks and recreation
1,726,550
1,611,003
1,446,238
164,765
Library
98,041
114,136
99,544
14,592
Inspections
746,782
690,782
676,990
13,792
Code enforcement
164,151
164,151
145,133
19,018
Planning
495,505
441,872
415,879
25,993
Engineering
467,149
460,649
444,644
16,005
Capital outlay
333,000
337,259
214,401
122,858
Total Expenditures
12,440,760
11,531,547
10,760,454
771,093
Excess of revenues over expenditures
(1,481,143)
(571,930)
1,266,744
1,838,674
OTHER FINANCING SOURCES (USES):
Transfers in
801,700
801,700
801,700
-
Transfers out
(17,000)
(750,000)
(1,556,793)
(806,793)
Total Other Financing Sources (Uses)
784,700
51,700
(755,093)
(806,793)
Change in fund balances
(696,443)
(520,230)
511,651
1,031,881
Fund balances, beginning - restated
7,076,343
7,076,343
7,076,343
-
Fund balances, ending $
6,379,900 $
6,556,113 $
7,587,994 $
1,031,881
The accompanying notes are an integral part of these financial statements
23
TOWN OF PROSPER, TEXAS
Statement of Revenues, Expenditures and Changes in Fund Balances -
Budget (GAAP Basis) and Actual - Impact Fee Fund
For the Year Ended September 30, 2014
REVENUES:
Impact fees
Investment income
Total Revenues
EXPENDITURES:
Streets
Capital outlay
Total Expenditures
Excess of revenues over expenditures
OTHER FINANCING SOURCES (USES)
Transfers out
Total Other Financing Sources (Uses)
Change in fund balances
Fund balances, beginning
Fund balances, ending
The accompanying notes are an integral part of these financial statements.
24
Variance
Impact Fee Fund
With Final
Budget
Original
Final
Positive
Budget
Budget
Actual
(Negative)
$ 2,600,000
$ 2,600,000 $
3,829,464 $
1,229,464
20,000
20,000
12,864
(7,136)
2,620,000
2,620,000
3,842,328
1,222,328
1,535,000
1,529,238
408,199
1,121,039
19,570
(19,570)
1,535,000
1,529,238
427,769
1,101,469
1,085,000
1,090,762
3,414,559
2,323,797
(300,000)
(300,000)
300,000
(300,000)
(300,000)
-
300,000
785,000
790,762
3,414,559
2,623,797
6,601,570
6,601,570
6,601,570
-
$ 7,386,570
$ 7,392,332 $
10,016,129 $
2,623,797
The accompanying notes are an integral part of these financial statements.
24
TOWN OF PROSPER, TEXAS
Statement of Revenues, Expenditures and Changes in Fund Balances -
Budget (GAAP Basis) and Actual - Contributions Fund
For the Year Ended September 30, 2014
The accompanying notes are an integral part of these financial statements.
25
Variance
Contributions Fund
With Final
Budget
Original
Final
Positive
Budget
Budget
Actual
(Negative)
REVENUES:
Escrow income
$
$ $
316,358 $
316,358
Investment income
4,086
4,086
Fines, fees, warrants and seizures
500
500
3,250
2,750
Contributions
55,900
55,900
84,652
28,752
Miscellaneous
-
-
1,551
1,551
Total Revenues
56,400
56,400
409,897
353,497
EXPENDITURES:
Police
10,500
10,500
5,315
5,185
Court
30,700
30,700
198,617
(167,917)
Fire
8,000
8,000
4,806
3,194
Parks and recreation
10,000
10,000
10,081
(81)
Total Expenditures
59,200
59,200
218,819
(159,619)
Change in fund balances
(2,800)
(2,800)
191,078
193,878
Fund balances, beginning
2,092,601
2,092,601
2,092,601
-
Fund balances, ending
$ 2,089,801
$ 2,089,801 $
2,283,679 $
193,878
The accompanying notes are an integral part of these financial statements.
25
TOWN OF PROSPER, TEXAS
Statement of Net Position - Proprietary Funds
September 30, 2014
Governmental
The accompanying notes are an integral part of these financial statements
26
Enterprise Funds
Activities -
Water
Other
Total
Internal
and Sewer
Nonmajor
Enterprise
Service
Fund
Enterprise Fund
Funds
Funds
ASSETS
Current Assets:
Cash and cash equivalents $
1,763,220
$ 198,955 $
1,962,175 $
876,505
Investments
4,126,304
4,126,3 04
Receivables, net
767,095
29,856
796,951
5,000
Due from other funds
1,841,641
1,841,641
46,545
Prepaid
2,050
2,050
Inventory
73,160
73,160
Restricted cash and cash equivalents
7,281,119
7,281,119
Total Current Assets
15,854,589
228,811
16,083,400
928,050
Noncurrent Assets:
Net pension asset
5,561
5,561
Intangible assets
15,578,922
15,578,922
Capital assets
Nondepreciable
8,482,675
8,482,675
Depreciable, net
23,468,240
36,022
23,504,262
Total Noncurrent Assets
47,535,398
36,022
47,571,420
-
Total Assets
63,389,987
264,833
63,654,820
928,050
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges for refunding
45,297
45,297
Total Outflows of Resources
45,297
-
45,297
-
LIABILITIES
Current Liabilities:
Accounts payable and accrued expenses
471,325
679
472,004
27,769
Deposits and funds held in escrow
51,000
51,000
Due to other funds
4,508,288
1,965
4,510,253
Accrued interest
165,547
165,547
Current portion of long-term liabilities
Compensated absences
18,494
18,494
Bonds payable
1,970,600
1,970,600
Total Current Liabilities
7,185,254
2,644
7,187,898
27,769
Noncurrent Liabilities:
Compensated absences
55,482
2,277
57,759
Bonds payable
33,162,363
33,162,363
Total Noncurrent Liabilities
33,217,845
2,277
33,220,122
-
Total Liabilities
40,403,099
4,921
40,408,020
27,769
NET POSITION
Net investment in capital assets
19,672,290
36,022
19,708,312
Unrestricted
3,359,895
223,890
3,583,785
900,281
Total Net Position $
23,032,185
$ 259,912 $
23,292,097 $
900,281
The accompanying notes are an integral part of these financial statements
26
TOWN OF PROSPER, TEXAS
Statement of Revenues, Expenses and Changes
In Fund Net Position - Proprietary Funds
For the Year Ended September 30, 2014
Governmental
The accompanying notes are an integral part of these financial statements
27
Enterprise Funds
Activities -
Water
Other
Total
Internal
and Sewer
Nonmajor
Enterprise
Service
Fund
Enterprise Fund
Funds
Funds
OPERATING REVENUES
Water and sewer charges $
7,071,126
$ $
7,071,126 $
Sanitation charges
983,037
983,037
Storm drainage utility fees
247,660
247,660
Water and sewer connections
725,848
725,848
Service initiation
52,585
52,585
Insurance charges for services
-
27,360
Miscellaneous
76,568
76,568
Total Operating Revenues
8,909,164
247,660
9,156,824
27,360
OPERATING EXPENSES
Personnel services
1,101,277
44,764
1,146,041
Materials and supplies
285,771
17,589
303,360
Contractual services
4,363,760
55,986
4,419,746
21,778
Depreciation
628,523
6,714
635,237
Total Operating Expenses
6,379,331
125,053
6,504,384
21,778
Operating Income
2,529,833
122,607
2,652,440
5,582
NON-OPERATING REVENUES (EXPENSES)
Interest income
102,948
1,924
104,872
579
Interest expense
(643,140)
(67,440)
(710,580)
Bond issuance cost
(249,365)
(249,365)
Contributions for capital projects
3,897,241
3,897,241
Total Non-operating Revenues
(Expenses)
3,107,684
(65,516)
3,042,168
579
Income before transfers
5,637,517
57,091
5,694,608
6,161
Transfers in
469,704
469,704
802,160
Transfers out
(791,320)
(42,540)
(833,860)
Total Transfers
(321,616)
(42,540)
(364,156)
802,160
Change in net position
5,315,901
14,551
5,330,452
808,321
Net position, at beginning of year, restated
17,716,284
245,361
17,961,645
91,960
Net position, at end of year $
23,032,185
$ 259,912 $
23,292,097 $
900,281
The accompanying notes are an integral part of these financial statements
27
TOWN OF PROSPER, TEXAS
Statement of Cash Flows - Proprietary Funds
For the Year Ended September 30, 2014
28
Enterprise Funds
Water
Other
and Sewer
Nonmajor
Fund
Enterprise Fund
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users $
8,996,803 $
245,598
Cash contributions for insurance premiums
Cash payments to suppliers for goods and services
(5,129,349)
(122,802)
Cash payments for insurance premiums
Cash payments to employees for services
(1,081,951)
(42,487)
Net cash provided (used) by operating activities
2,785,503
80,309
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers to/from other funds
(321,616)
(42,540)
Advances to other funds
2,007,447
(803)
Net cash provided (used) by noncapital financing activities
1,685,831
(43,343)
CASH FLOWS FROM CAPITAL & RELATED FINANCING ACTIVITIES
Proceeds from the issuance of debt
16,405,000
Premiums received on long-term debt
1,071,038
Bond issuance cost paid on long-term debt
(249,365)
Principal paid on bonds
(5,480,850)
Acquisition and construction of capital assets
(4,413,619)
(19,827)
Interest paid on bonds
(915,892)
(67,440)
Intangible assets purchased
(15,578,922)
Net cash used by capital and related financing activities
(9,162,610)
(87,267)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments
(19,207)
Interest on deposits and investments
102,948
1,924
Net cash provided by investing activities
83,741
1,924
Net (decrease) increase in cash and cash equivalents
(4,607,535)
(48,377)
Cash and cash equivalents at beginning of year
13,651,874
247,332
Cash and cash equivalents at end of year $
9,044,339 $
198,955
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Operating income $
2,529,833 $
122,607
Adjustments to reconcile operating income
to net cash provided (used) by operating activities:
Depreciation
628,523
6,714
(Increase) decrease in accounts receivable
113,005
(2,062)
(Increase) decrease in inventory and prepaid
(23,105)
(Increase) in net pension asset
(5,561)
Increase (decrease) in accounts payable
(456,713)
(49,227)
Increase (decrease) in compensated absences
24,887
2,277
Increase (decrease) in customer deposits
(25,366)
Net cash provided (used) by operating activities $
2,785,503 $
80,309
The accompanying notes are an integral part of these financial
statements
28
Governmental
Activities -
Total Internal
Enterprise Service
Funds Fund
9,242,401 $
- 28,953
(5,252,151)
- (140,184)
(1,124,438)
2,865,812 (111,231)
(364,156) 802,160
2,006,644 (3,082)
1,642,488 799,078
16,405,000
1,071,038
(249,365)
(5,480,850)
(4,433,446)
(983,332)
(15,578,922)
(9,249,877) -
(19,207)
104,872
579
85,665
579
(4,655,912)
688,426
13,899,206
188,079
9,243,294 $
876,505
2,652,440 $ 5,582
635,237
110,943 1,593
(23,105)
(5,561)
(505,940) (118,406)
27,164
(25,366)
2,865,812 $ (111,231)
29
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 1: Summary of Significant Accounting Policies
The financial statements of the Town of Prosper, Texas, have been prepared in conformity with generally accepted
accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board
(GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting
principles. The more significant of the government's accounting policies are described below.
Reporting Entity
The government is a municipal corporation governed by an elected seven -member council. As required by accounting
principles generally accepted in the United States of America, these financial statements present the government and
its component units, entities for which the government is considered to be financially accountable. The discretely
presented component unit is reported in a separate column in the government -wide financial statements to emphasize it
is legally separate from the government.
Discretely Presented Component Unit
The Prosper Economic Development Corporation (EDC) serves all citizens of the government and is governed by a
board appointed by the government's elected council. The government can impose its will on the EDC and affect the
day-to-day operations of the EDC by removing appointed board members, at will. The scope of public service of the
EDC benefits the government and its citizens and is operated primarily within the geographic boundaries of the
government. The EDC is presented as a governmental fund type and has a September 30 year end.
Complete financial statements for the EDC may be obtained at the entity's administration office, Prosper Economic
Development Corporation, P. O. Box 1060, Prosper, Texas 75078.
Government -wide and Fund Financial Statements
The government -wide financial statements (i.e. the statement of net position and the statement of activities) report
information on activities of the primary government and its component units. 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 significant extent on
fees and charges for support. Likewise, the primary government is reported separately from certain legally separate
component units for which the primary government is financially accountable.
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.
Separate financial statements are provided for governmental funds and proprietary funds. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund financial
statements.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting, as are the proprietary fund 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 by the provider have been met.
30
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 1: Summary of Significant Accounting Policies — continued
Measurement Focus, Basis of Accounting, and Financial Statement Presentation - continued
Governmental fund financial statements are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to
pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are
collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is
incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to
compensated absences and claims and judgments, are recorded only when payment is due.
Property taxes, sales taxes, franchise taxes, licenses, and interest income associated with the current fiscal period are all
considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the
portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as
revenue of the current period. All other revenue items are considered to be measurable and available only when cash is
received by the government.
The government reports the following major governmental funds:
The Qeneral fund is the government's primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
The impact fee fund, a special revenue fund, accounts for revenues that are legally restricted for particular purposes.
This fund is used to account for activity related to impact fees.
The debt service fund accounts for the resources accumulated and payments made for principal and interest on long-term
obligation debt of governmental funds.
The capital protects fund accounts for the acquisition of capital assets or construction of major capital projects not being
financed by proprietary funds.
The contribution fund, a special revenue fund, accounts for contributions made to the Town which are restricted for
various purposes.
The government reports the following major proprietary fund:
The water and sewer fund, an enterprise fund, is used to account for those operations that are financed and operated in a
manner similar to private business or where the council has decided that the determination of revenues earned, costs
incurred and/or net income is necessary for management accountability. The government's water and sewer fund is to
account for water, sewer and sanitation operations.
The internal service fund is used to accumulate and allocate costs internally among the Town's various functions. The
Town uses its internal service fund to account for its employee medical reimbursement program as well as to facilitate
distribution of support costs to the users of support services on a cost -reimbursement basis. Because these services
predominately benefit the governmental rather than the business -type functions, they have been included within
governmental activities in the government -wide financial statements.
As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements.
Exceptions to this general rule are general and administrative fees, street rental fees and other charges between the
government's water and sewer function and various other functions of the government. Elimination of these charges
would distort the direct costs and program revenues reported for the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges
provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments.
Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general
revenues include all taxes.
31
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 1: Summary of Significant Accounting Policies — continued
Measurement Focus, Basis of Accounting. and Financial Statement Presentation - continued
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with a proprietary
fund's principal ongoing operations. The principal operating revenues of the proprietary funds are charges to customers
for sales and services. The proprietary funds also recognize as operating revenue the portion of tap fees intended to
recover the cost of connecting new customers to the system. Operating expenses for proprietary funds include the cost of
sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting
this definition are reported as nonoperating revenues and expenses.
Deposits and Investments
For purposes of the statement of cash flows, cash and cash equivalents include cash on hand, demand deposits, and short-
term investments with a maturity date within three months of the date acquired by the government. Other short-term
investments are included in investments. Investments are stated at cost which approximates fair value.
Short -Term Interfund Receivables/Pavables
During the course of operations, numerous transactions occur between individual funds for goods provided or services
rendered. These receivables and payables are classified as "due from other funds" or "due to other funds" on the balance
sheet. Short-term interfund loans are classified as "interfund receivables/payables."
Inventories and Prepaid Items
All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are
recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs
applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial
statements.
Restricted Assets
Certain resources set aside for the repayment of bonds are classified as restricted assets on the balance sheet because
their use is limited by applicable bond covenants. Also included in restricted assets are capital recovery fees (impact
fees) that are, by law, restricted for future capital improvements; and assets set aside for construction of future debt
funded capital improvements. When the government incurs an expense for which it may use either restricted or
unrestricted assets, it uses the restricted assets first.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of
resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net
position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure)
until then. The Town only has one item that qualifies for reporting in this category. It is the deferred charge on bond
refunding reported in the government -wide statement of net position. A deferred charge on refunding results from the
difference in the carrying value of refunded debt and its reacquisition price. This account is deferred and amortized over
the shorter of the life of the refunded or refunding debt.
In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of
resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net
position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that
time. The Town has only one type of item, which arises only under a modified accrual basis of accounting that qualifies
for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds
balance sheet. The governmental funds report unavailable revenues from property taxes, fines and EMS accounts
receivable. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become
available.
32
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 1: Summary of Significant Accounting Policies — continued
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 (amount not rounded) 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 value at
the date of donation.
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 is capitalized on
proprietary fund assets acquired with tax-exempt debt. The amount of interest to be capitalized is calculated by
offsetting interest expense incurred from the date of the borrowing until completion of the project with interest earned on
invested proceeds over the same period.
Property, plant, and equipment of the primary government is depreciated using the straight line method over the
following estimated useful lives:
Assets
Years
Buildings
20-30
System infrastructure
15-45
Street infrastructure
25-30
Equipment
5- 10
Vehicles
4 - 7
Compensated Absences
It is the government's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All
vacation and sick pay is accrued when incurred in the government -wide and proprietary fund financial statements. A
liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of
employee resignation and retirements.
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 position. Bond premiums and discounts 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 expensed as incurred.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond
issuance costs, during the current period. The face amount of debt issued is reported as other financing sources.
Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are
reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are
reported as debt service expenditures.
33
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 1: Summary of Significant Accounting Policies — continued
Fund Equity
In the fund financial statements, governmental funds report restrictions of fund balance for amounts that are not available
for appropriation or are legally restricted by outside parties for use for a specific purpose. Assignments of fund balance
represent tentative management plans that are subject to change.
Note 2: Stewardship, Compliance, and Accountability
Budeetary Control
Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of
America. Annual appropriated budgets are legally adopted for the general fund, impact fee fund, contributions fund and
water and sewer fund. All annual appropriations lapse at fiscal year end. Project length financial plans are adopted for
all capital project funds.
The Town follows these procedures in establishing the budgetary data reflected in the financial statements.
1. Prior to August 16, the Town Manager submits to the Town Council a proposed operating budget for the fiscal year
commencing the following October 1. The operating budget includes proposed expenditures and the means of financing
them.
2. Public hearings are conducted to obtain taxpayer comments.
3. On the first meeting in September, the budget is legally enacted through the passage of an ordinance.
4. The Town Manager is authorized to transfer budgeted amounts between departments within any fund; however, any
revision that alters total expenditures of any fund must be approved by the Town Council.
5. Formal budgetary integration, using the modified accrual basis, is employed as a management control device during
the year for the General Fund, Impact Fee Fund, and Contributions Fund. Supplemental appropriations were made
during the fiscal year for the General Fund.
6. The budget approved for the Water and Sewer Fund and Storm Drainage Fund follows similar approval procedures
but departs from accounting principles generally accepted in the United States of America by not including depreciation
and amortization in the approved budget. These amounts are reported at year end as part of the "actual" column.
Supplemental appropriations were made during the year.
7. The Debt Service and Capital Projects Funds do not have formal budgets since all are controlled by contractual
obligations approved at inception or as part of the General Fund on an annual basis. The nonmajor governmental funds
are not budgeted.
Note 3: Deposits and Investments
Deposits
At September 30, 2014, the Town's deposits and the EDC's deposits were fully covered by federal depository
insurance or collateral held by the pledging financial institution's trust department or agent in the government's name
and/or irrevocable standby letters of credit.
34
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 3: Deposits and Investments — continued
Deposits — continued
Custodial Credit Risk - Deposits: In the case of deposits this is the risk that, in the event of a bank failure, the
government's deposits may not be returned to it. The government's policy regarding types of deposits allowed and
collateral requirements is: the Depository may be a state bank authorized and regulated under Texas law; a national
bank, savings and loan association, or savings bank authorized and regulated by federal law; or a savings and loan
association or savings bank organized under Texas law; but shall not be any bank the deposits of which are not insured
by the Federal Deposit Insurance Corporation (FDIC) and pledged securities. The government is not exposed to
custodial credit risk for its deposits, as all are covered by depository insurance and pledged securities.
Investments
The Town and EDC may invest in obligations of the U.S. Treasury or the State of Texas, certain U.S. agencies,
certificates of deposit, money market savings accounts, certain municipal securities, repurchase agreements, common
trust funds and other investments specifically allowed by the Public Funds Investment Act of 1987 (Article 842a-2
Vernon's Civil Statutes).
In compliance with the Public Funds Investment Act, the government has adopted a deposit and investment policy.
That policy addresses the following risks:
Custodial Credit Risk - Investments: For an investment, this is the risk that, in the event of the failure of the
counterparty, the government will not be able to recover the value of its investments or collateral securities that are in
the possession of an outside party. The Town's investments are with the Texas Local Government Investment Pool
("TexPool"), the Texas Short -Term Asset Reserve Investment Pool ("TexSTAR'), and in certificates of deposit.
Under the TexPool Participation Agreement, administrative and investment services to TexPool are provided by
Federated Investors, Inc. through an agreement with the State of Texas Comptroller of Public Accounts. The State
Comptroller is the sole officer, director, and shareholder of the Texas Treasury Safekeeping Trust Company authorized
to operate TexPool. The reported value of the pool is the same as the fair value of the pool shares. TexPool is subject to
annual review by an independent auditor consistent with the Public Funds Investment Act. Audited financial statements
of the Pool are available at First Public, 12008 Research Blvd., Austin, Texas 78759. In addition, TexPool is subject to
review by the State Auditor's Office and by the Internal Auditor of the Comptroller's Office. The reported value of the
pool is the same as the fair value of the pool shares.
TexSTAR is a local government investment pool organized under the authority of the Interlocal Cooperation Act,
chapter 791, of the Texas Government Code, and the Public Funds Investment Act, chapter 2256, of the Texas
Government Code. J.P. Morgan Investment Management Inc. serves as investment advisor and co -administrator with
First Southwest Asset Management, Inc. TexSTAR invests in treasury and agency securities and repurchase
agreements fully collateralized by government securities. The pool maintains a weighted average maturity of 60 days
or less. The pool seeks to maintain a constant dollar objective. The reported value of the pool is the same as the fair
value of the pool shares.
Credit Risk - This is the risk that an issuer of an investment will be unable to fulfill its obligations. The rating of
securities by nationally recognized rating agencies is designed to give an indication of credit risk. It is the
government's policy to limit its investments to those investments rated at least AAAm. The credit quality rating for
both TexPool and TexSTAR at year end was AAAm by Standard & Poor's.
Interest Rate Risk - This is the risk that changes in interest rates will adversely affect the fair value of an investment. In
accordance with its investment policy, the government manages its exposure to declines in fair values by limiting the
weighted average maturity of its investment portfolio to less than one year from the time of purchase. The maximum
allowable maturity for operating funds is five years and two years for debt service funds. The weighted average
maturity for the government's investment in external investment pools is less than 60 days.
35
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 3: Deposits and Investments — continued
Investments — continued
Foreign Currency Risk - This is the risk that exchange rates will adversely affect the fair value of an investment. The
government is not exposed to foreign currency risk.
Concentration of Credit Risk - This is the risk of loss attributed to the magnitude of the government's investment in a
single issuer (i.e., lack of diversification). Concentration risk is defined as positions of 5 percent (5%) or more in the
securities of a single issuer. It is the government's policy to not allow for a concentration of credit risk. Investments
issued by the U. S. Government and investments in investment pools are excluded from the 5 percent (5%) disclosure
requirement. The government is not exposed to concentration of credit risk.
At year end, the government's investment balances were as follows:
Primary Government
Investment type:
Texas Local Government investment pool $
TexSTAR investment pool
Certificates of deposit
Total $
Prosper Economic Development Corporation
Investment type:
Texas Local Government investment pool $
TexSTAR investment pool
Total $
Note 4: Receivables
Receivables at September 30, 2014 consisted of the following:
Fair Maturity Less Maturity Greater
Value than One Year than One Year
6,507,755 $
8,539,455
6,387,738
21,434,948 $
1,325 $
1,190
2,515 $
6,507,755 $
8,539,455
6,387,738
21,434,948 $
1,325
1,190
2,515
Property taxes are based on the appraised values provided by the Collin County or Denton County Central Appraisal
District, whichever is applicable. Taxes are levied by October 1 of each year. Unpaid property taxes become delinquent
on February 1 of the following year. Penalty is calculated after February 1 up to the date collected by the government at
the rate of 6% for the first month and increased 1% per month up to a total of 12%. Interest is calculated after February
1 at the rate of 1% per month up to the date collected by the government. Under state law, property taxes levied on real
property constitute a lien on the real property which cannot be forgiven without specific approval of the State
Legislature. The lien expires at the end of twenty years. Taxes levied on personal property can be deemed uncollectible
by the Town. The Town's current policy is to write-off uncollectible personal property taxes after four years.
36
Debt
Contri-
Water and
Nonmajor
Internal
General
Service
butions
Sewer
Enterprise
Service
Total
Property taxes
$ 85,198
$ 51,978
$ -
$ -
$ -
$ -
$ 137,176
Sales tax
517,244
517,244
Utility bills
974,605
29,856
1,004,461
Other receivables
250,309
3,187
5,000
258,496
Gross receivables
852,751
51,978
3,187
974,605
29,856
5,000
1,917,377
Less: allowance for
uncollectibles
(56,541)
(37,403)
(207,510)
(301,454)
Net receivables
$ 796,210
$ 14,575
$ 3,187
$ 767,095
$ 29,856
$ 5,000
$1,615,923
Property taxes are based on the appraised values provided by the Collin County or Denton County Central Appraisal
District, whichever is applicable. Taxes are levied by October 1 of each year. Unpaid property taxes become delinquent
on February 1 of the following year. Penalty is calculated after February 1 up to the date collected by the government at
the rate of 6% for the first month and increased 1% per month up to a total of 12%. Interest is calculated after February
1 at the rate of 1% per month up to the date collected by the government. Under state law, property taxes levied on real
property constitute a lien on the real property which cannot be forgiven without specific approval of the State
Legislature. The lien expires at the end of twenty years. Taxes levied on personal property can be deemed uncollectible
by the Town. The Town's current policy is to write-off uncollectible personal property taxes after four years.
36
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 4: Receivables — continued
At September 30, 2014, the EDC had sales tax receivable of $172,415. No allowance for uncollectible accounts is
deemed necessary.
Note 5: Capital Assets
Capital asset activity for the year ended September 30, 2014, was as follows:
Governmental activities:
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets, not being depreciated
Capital assets being depreciated:
Buildings and improvements
Equipment
Infrastructure
Total assets being depreciated
Less accumulated depreciation for:
Buildings and improvements
Equipment
Infrastructure
Total accumulated depreciation
Total capital assets being depreciated, net
Governmental activities capital assets, net
Business -type activities:
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets, not being depreciated
Capital assets being depreciated:
Buildings and systems
Vehicles and Equipment
Total assets being depreciated
Less accumulated depreciation for:
Buildings and systems
Vehicles and Equipment
Total accumulated depreciation
Total capital assets being depreciated, net
Business -type activities capital assets, net
Balance
Balance
October 1,
Additions/
Retirements/
September 30,
2013
Completions
Adjustments
2014
$ 5,890,593 $
$
$
5,890,593
7,389,929
5,363,013
(2,703,695)
10,049,247
13,280,522
5,363,013
(2,703,695)
15,939,840
14,182,669
14,182,669
5,590,808
355,691
5,946,499
46,160,490
2,703,695
48,864,185
65,933,967
355,691
2,703,695
68,993,353
(2,128,711)
(729,897)
(2,858,608)
(2,081,403)
(416,548)
(2,497,951)
(10,173,902)
(1,743,659)
(11,917,561)
(14,384,016)
(2,890,104)
-
(17,274,120)
51,549,951
(2,534,413)
2,703,695
51,719,233
$ 64,830,473 $
2,828,600 $
- $
67,659,073
$ 5,000 $
$
$
5,000
10,772,414
4,275,928
(6,570,667)
8,477,675
10,777,414
4,275,928
(6,570,667)
8,482,675
21,255,176
6,570,667
27,825,843
704,039
358,457
1,062,496
21,959,215
358,457
6,570,667
28,888,339
(4,321,859)
(426,981)
(4,748,840)
17,210,375
$ 27,987,789 $
37
(554,660)
(80,577)
(635,237)
(276,780)
3,999,148 $
6,570,667
(4,876,519)
(507,558)
(5,384,077)
23,504,262
31,986,937
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 5: Capital Assets — continued
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government $
4,612
Police
57,249
Dispatch
105,710
Fire
206,970
Streets
1,752,715
Parks and recreation
756,867
Inspections
5,981
$
2,890,104
Business -type activities:
Water and Sewer $ 628,523
Nonmajor enterprise fund 6,714
$ 635,237
Capital asset activity for the EDC for the year ended September 30, 2014, was as follows:
Balance
October 1, Additions/ Retirements/
Component unit: 2013 Completions Adjustments
Capital assets being depreciated:
Balance
September 30,
2014
Leasehold improvements $ 113,849 $ $ $ 113,849
Total assets being depreciated 113,849 - - 113,849
Less accumulated depreciation for:
Leasehold improvements (113,849) (113,849)
Total accumulated depreciation (113,849) - - (113,849)
Total capital assets being depreciated, net - - - -
Component unit capital assets, net $ - $ - $ - $ -
Note 6: Construction Commitments
At September 30, 2014, the total estimated costs to complete significant construction projects in progress at year-end
totaled approximately $13,089,144 for the Capital Projects Fund and $947,364 for the Utility Fund.
38
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 7: Interfund Receivables, Payables and Transfers
Interfund balances at September 30, 2014 were as follows:
Due to/from other funds:
Due To Fund
Capital Projects
Debt Service Fund
General Fund
General Fund
General Fund
General Fund
General Fund
General Fund
General Fund
Impact Fees
Impact Fees
Internal Service
Internal Service
Internal Service
Internal Service
Nonmajor governmental
Contributions Fund
Contributions Fund
Water and Sewer
Water and Sewer
Due From Fund
General Fund
General Fund
Water and Sewer
Nonmajor enterprise
Water and Sewer
Capital Projects
Contributions
Nonmajor governmental
Impact Fee Fund
General Fund
Water and Sewer
General Fund
Water and Sewer
Capital Projects
Nonmajor enterprise
General Fund
General Fund
Water and Sewer
Impact Fee Fund
General Fund
Amount
2,619
10,160
2,230,523
1,130
273,102
143,575
53,617
129,952
657,140
3,642,840
477,643
12,634
25,335
7,741
835
605,407
45,360
1,501,685
891,200
950,441
11,662,939
Purpose
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
Short-term loans
The outstanding balances between funds result mainly from the time lag between the dates that (1) reimbursable
expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made.
Interfund transfers:
Transfer From
General Fund
General Fund
Debt Service Fund
Capital Projects
Water and Sewer
Water and Sewer
Nonmajor Enterprise
Nonmajor Enterprise
Transfer To
Internal Service Fund
Capital Projects
Water and Sewer
Debt Service
Internal Service Fund
General Fund
Water and Sewer
General Fund
39
Amount
800,000
756,793
439,704
12,780
2,160
789,160
30,000
12,540
2,843,137
Purpose
Administrative
Capital outlay
Issuance of debt
Bond issuance cost refund
Administrative
Administrative
Debt service
Administrative
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 8: Long-term Debt
The government issues general obligation bonds to provide funds for the acquisition and construction of major capital
facilities and equipment. General obligation bonds have been issued for both governmental and business -type
activities. The government also issues revenue bonds where the government pledges income derived from the acquired
or constructed assets to pay debt service. The certificates of obligation will be repaid by the debt service fund in
combination with system revenues.
Long-term debt activity for the year ended September 30, 2014, was as follows:
Total Primary Government $ 52,234,109 $
Component Unit
Compensated absences $ 10,699 $
Refunded/ Balance Amount Due
Retired 9/30/2014 Within one Year
$ 553,565 $
(4,218,450) 27,292,850
(54,608) 636,301
(4,273,058) 28,482,716
(5,480,850)
(111,621)
(5,592,471)
76,253
33,627,150
1,505,813
35,209,216
21,323,352 $ (9,865,529) $ 63,691,932 $
12,604 $ $ 23,303 $
144,217
1,622,800
1,767,017
18,494
1,970,600
1,989,094
3,756,111
In March 2014, the Town issued refunding bonds of $7,175,000 General Obligation Refunding and Improvement Bonds,
Series 2014 for the purpose of refunding $7,474,300 of taxable general obligation bonds of the Town, in order to lower
the overall debt service requirements of the Town and to pay costs associated with the issuance of the bonds. As of the
result of this refunding, the Town recognized an economic gain of $846,865 and cash flows savings (difference between
debt service requirements of old debt versus the new debt) of $729,483.
40
Balance
10/1/2013
Issued
Governmental Activities:
Compensated absences $
385,626 $
167,939 $
Bonds
28,171,300
3,340,000
Bond Premium on Issuance
378,699
312,210
Total Governmental
28,935,625
3,820,149
Business-tvve Activities:
Compensated absences
49,089
27,164
Bonds
22,703,000
16,405,000
Bond Premium on Issuance
546,395
1,071,039
Total Business -type
23,298,484
17,503,203
Total Primary Government $ 52,234,109 $
Component Unit
Compensated absences $ 10,699 $
Refunded/ Balance Amount Due
Retired 9/30/2014 Within one Year
$ 553,565 $
(4,218,450) 27,292,850
(54,608) 636,301
(4,273,058) 28,482,716
(5,480,850)
(111,621)
(5,592,471)
76,253
33,627,150
1,505,813
35,209,216
21,323,352 $ (9,865,529) $ 63,691,932 $
12,604 $ $ 23,303 $
144,217
1,622,800
1,767,017
18,494
1,970,600
1,989,094
3,756,111
In March 2014, the Town issued refunding bonds of $7,175,000 General Obligation Refunding and Improvement Bonds,
Series 2014 for the purpose of refunding $7,474,300 of taxable general obligation bonds of the Town, in order to lower
the overall debt service requirements of the Town and to pay costs associated with the issuance of the bonds. As of the
result of this refunding, the Town recognized an economic gain of $846,865 and cash flows savings (difference between
debt service requirements of old debt versus the new debt) of $729,483.
40
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 8: Long-term Debt — continued
Bonds, certificates of obligation, and tax notes at September 30, 2014, are comprised of the following issues for the Debt
Service Fund and Water and Sewer Fund:
Governmental Business -Type
Activities Activities Total
2006 Certificates of Obligation (48% debt service fund portion and
52% water and sewer portion) issued September 21, 2006, and
maturing August 15, 2007 to August 15, 2026. Interest payable
February 15 and August 15 at rates ranging from 4.00% to 4.50%. $ 4,171,200 $ 4,518,800 $ 8,690,000
2008 Certificates of Obligation (90% debt service fund portion and
10% water and sewer portion) issued December 2, 2008, and maturing
February 15, 2011 to February 15, 2029. Interest payable February 15
and August 15 at rates ranging from 3.75% to 6.0%. 10,786,500 1,198,500 11,985,000
Tax Notes, Series 2010 (100% debt service fund portion) issued
October 1, 2010, and maturing February 15, 2012 to February 15,
2017. Interest payable February 15th and August 15th at rates ranging
from 1.15% to 1.85%.
2011 General Obligation Refunding and Improvement bonds (39%
debt service fund portion and 61% water and sewer portion) issued
September 1, 2011, and maturing February 15, 2018. Interest payable
February 15 and August 15 at rates ranging from 1.75% to 2.0%.
2012 General Obligation Bonds (100% debt service fund portion)
issued June 15, 2012, and maturing February 15, 2032. Interest
payable February 15 and August 15 at rates ranging from 1.38% to
3.25%.
2012 Certificates of Obligation (100% water and sewer portion)
issued June 15, 2012, maturing February 15, 2032. Interest payable
February 15 and August 15 at rates ranging from .40% to 3.25%.
2013 General Obligation Refunding Bonds (100% debt service fund
portion) issued June 15, 2013, maturing August 15, 2029. Interest
payable February 15 and August 15 at rates ranging from 2.0% to
4.0%.
2013 Certificates of Obligation (100% water and sewer portion)
issued June 15, 2013, maturing August 15, 2029. Interest payable
February 15 and August 15 at rates ranging from 2.0% to 4.0%.
2014 General Obligation Improvement Bonds (47% debt service fund
portion and 53% water and sewer portion) issued February 15, 2014,
maturing February 15, 2034. Interest payable February 15 and August
15 at rates ranging from 2.0% to 5.0%.
2014 Certificates of Obligation (100% water and sewer portion)
issued February 15, 2014, maturing February 15, 2034. Interest
payable February 15 and August 15 at rates ranging from 2.0% to
4.0%.
41
1,080,000 1,080,000
540,150 844,850 1,385,000
3,680,000 3,680,000
5,610,000 5,610,000
3,695,000 3,695,000
5,050,000 5,050,000
3,340,000 3,835,000 7,175,000
12,570,000 12,570,000
$ 27,292,850 $ 33,627,150 $ 60,920,000
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 8: Long-term Debt — continued
The annual requirements to amortize the combined debt outstanding for the Debt Service Fund and Water and Sewer
Fund as of September 30, 2014, are as follows:
Total $ 27,292,850 $ 10,734,603 $ 33,627,150 $ 12,941,043 $ 60,920,000 $ 23,675,646 $ 84,595,646
Note 9: Restricted Assets
The balances of the restricted asset accounts are as follows:
Governmental Activities
Impact Fee Fund
Governmental Activities
Business -Type Activities
7,211,491
Debt Service
Sinking Fund
Year Ended
1,148,767
Capital Projects
Unspent bond proceeds / other restricted funds
Total
Total
Total
September 30
Principal
Interest
Principal
Interest
Principal
Interest
Obligation
2015 $
1,622,800 $
1,226,266
$ 1,617,200 $
1,309,226
$ 3,240,000 $
2,535,492 $
5,775,492
2016
1,860,000
1,125,041
1,905,000
1,211,928
3,765,000
2,336,969
6,101,969
2017
1,893,650
1,066,765
1,916,350
1,165,410
3,810,000
2,232,175
6,042,175
2018
1,569,600
1,009,363
1,965,400
1,117,034
3,535,000
2,126,397
5,661,397
2019
1,519,000
949,968
1,841,000
1,058,561
3,360,000
2,008,529
5,368,529
2020-2024
8,705,200
3,651,321
10,084,800
4,146,048
18,790,000
7,797,369
26,587,369
2025-2029
7,982,600
1,496,541
7,767,400
2,198,180
15,750,000
3,694,721
19,444,721
2030-2034
2,140,000
209,338
6,530,000
734,656
8,670,000
943,994
9,613,994
Total $ 27,292,850 $ 10,734,603 $ 33,627,150 $ 12,941,043 $ 60,920,000 $ 23,675,646 $ 84,595,646
Note 9: Restricted Assets
The balances of the restricted asset accounts are as follows:
Governmental Activities
Impact Fee Fund
Impact fees - capital projects
$
7,211,491
Debt Service
Sinking Fund
1,148,767
Capital Projects
Unspent bond proceeds / other restricted funds
6,529,608
Contribution Fund
Contributions / escrow
1,504,340
$
16,394,206
Business -type Activities
Water and Sewer Fund
Customer Deposits / Escrow
$
51,000
Water and Sewer Fund
Capital Projects (Unspent Bond Proceeds)
7,230,119
$
7,281,119
Note 10: Risk Management
The government 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 government is a participant in the Texas Municipal
League Workers' Compensation Joint Insurance Fund (WC Fund) and the Texas Municipal League Joint Self -
Insurance Fund (Property -Liability Fund), a public entity risk pool operated by the Texas Municipal League Board for
the benefit of individual governmental units located with Texas. The government pays an annual premium to the
Funds for its workers' compensation and property and liability insurance coverage. The WC Fund and Property -
Liability Fund are considered self-sustaining risk pools that provide coverage for its members for up to $2,000,000 per
insured event. There were no significant reductions in insurance coverage from the previous year. Settled claims for
risks have not exceeded insurance coverage in any of the past three years.
42
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 11: Texas Municipal Retirement System
Plan Descrintion
The Town provides pension benefits for all of its eligible employees through a nontraditional, joint contributory, hybrid
defined benefit plan in the state-wide Texas Municipal Retirement System (TMRS), an agent multiple -employer public
employee retirement system. The plan provisions that have been adopted by the Town are within the options available in
the governing state statutes of TMRS.
TMRS issues a publicly available comprehensive annual financial 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 by writing to TMRS, P.O. Box
149153, Austin, TX 78714-9153 or by calling 800-924-8677; in addition, the report is available on TMRS' website at
www.TMRS.com.
The plan provisions are adopted by the governing body of the Town, within the options available in the state statutes
governing TMRS. Plan provisions for the Town were as follows:
Employee deposit rate
Matching ratio (Town to employee)
Years required for vesting
Service retirement eligibility
(expressed as age / years of service)
Updated Service Credit
Annuity Increase (to retirees)
Contributions
Plan Year 2013
7%
2 to 1
60/5,0/20
100% Repeating, Transfers
70% of CPI Repeating
Plan Year 2014
7%
2 to 1
60/5,0/20
100% Repeating, Transfers
70% of CPI Repeating
Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the
Entry Age Normal (EAN) cost method (EAN was first used in December 31, 2013 valuation; previously, the Projected
Unit Credit actuarial cost method had been used.) 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 for an employee is the contribution rate which, if applied to a member's compensation throughout their
period of anticipated covered service with the municipality, would be sufficient to meet all benefits payable on their
behalf. The salary -weighted average of the individual rates is the total normal cost rate. The prior service contribution
rate amortizes the undfunded (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 Credits and Annuity Increases.
The Town contributes to the TMRS Plan at an actuarially determined rate. Both the employees and the Town make
contributions monthly. Since the Town 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. The annual pension cost and net assets are as follows:
Three -Year Trend Information
Fiscal
Annual
Actual
Percent
Net Pension
Year
Pension
Contribution
of APC
Asset
Ending
Cost (APC)
Made
Contributed
(NPA)
2012
$ 436,397
$ 446,794
102%
$ (46,443)
2013
549,899
543,431
99%
(39,975)
2014
689,477
693,134
101%
(43,632)
43
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 11: Texas Municipal Retirement System — continued
Annual Required Contribution (ARC) $ 690,006
Interest on Net Pension Obligation (2,798)
Adjustment to the ARC 2,269
Annual Pension Cost (APC) 689,477
Contributions Made (693,134)
Increase (Decrease) in net pension obligation (3,657)
Net Pension Obligation / (Asset), Beginning of Year (39,975)
Net Pension Obligation / (Asset), End of Year $ (43,632)
The required contribution rates for fiscal year 2014 are determined as part of the December 31, 2011, and 2012 actuarial
valuations. Additional information as of the latest actuarial valuation, December 31, 2013, also follows:
Valuation Date
Actuarial Cost Method
Amortization Method
GASB 25 Equivalent Single
Amortization Period
Amortization Period for
New Gains/Losses
Asset Valuation Method
Actuarial Assumptions:
Investment Rate of Return*
Projected Salary Increases*
*Includes Inflation at
Cost -of -Living Adjustments
Funded Status and Fundine Progress
Actuarial Assumptions
12/31/2011 12/31/2012 12/31/2013
Projected Unit Credit Projected Unit Credit
Level Percent of Payroll Level Percent of Payroll
21.5 years - Closed 20.5 years - Closed
Period Period
25 Years 25 Years
10 -Year Smoothed
Market
7.0%
Varies by age and
service
3.00%
2.1%
10 -Year Smoothed
Market
7.0%
Varies by age and
service
3.00%
2.1%
Entry Age Normal
Level Percent of Payroll
30.0 years - Closed
Period
25 Years
10 -Year Smoothed
Market
7.0%
Varies by age and
service
3.00%
2.1%
In October 2013, the TMRS Board approved actuarial changes in (a) the funding method from Projected Unit Credit to
Entry Age Normal, (b) the post-retirement mortality assumptions used in calculating liabilities and contribution rates in
the development of the Annuity Purchase Rate factors, and (c) the amortization policy. These actuarial changes were
effective with the December 31, 2013, actuarial valuation. For a complete description of the new actuarial cost method
and assumptions, please see the December 31, 2013, TMRS Comprehensive Annual Financial Report (CAFR).
44
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 11: Texas Municipal Retirement System — continued
The schedule of funding progress presented below presents multi-year trend information about whether the actuarial
value of the plan assets is increasing or decreasing over time relative to the actuarial accrued liability of benefits.
Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events
far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to
past expectations and new estimates are made about the future.
Actuarial calculations are based on the benefits provided under the terms of the substantive plan in effect at the time of
each valuation, and reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions
used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial
value of assets.
Note 12: Fund Balance
The Town classifies governmental fund balances in accordance with Government Accounting Standards Board (GASB)
Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions:
Nonspendable fund balance includes amounts that either (a) are not in a spendable form or (b) are legally or
contractually required to be maintained intact.
Restricted fund balance includes amounts for which constraints have been placed on the use of the resources either (a)
externally imposed by creditors (such as through a debt covenant), grantors, contributors, or laws or regulations of other
governments, or (b) or imposed by law through constitutional provisions or enabling legislation.
Committed fund balance includes amounts that can be used only for the specific purposes determined and approved by
passage of a formal resolution of the government's highest level of decision-making authority, the Town Council.
Commitments may be changed or lifted only by the government taking the same formal action that imposed the
constraint originally. In accordance with Town Charter, an amount equal to twenty percent of total general fund
expenditures has been identified as committed.
Assigned fund balance includes amounts intended to be used by the government for specific purposes. Pursuant to
Ordinance 11-66, the Town Council designated the Town Manager or his/her designee as the official authorized person
to assign fund balance. In governmental funds other than the general fund, assigned fund balance represents the amount
that is not restricted or committed. At September 30, 2014, the Town had assigned fund balances for specific purposes
including parks and recreation in the amount of $2,371,059.
Unassigned fund balance is the residual classification of the general fund and includes all amounts not contained in the
other classifications.
The Town uses restricted amounts first when both restricted and unrestricted fund balances are available. Additionally,
the Town would use committed, then assigned and lastly unassigned amounts of unrestricted fund balance when
expenditures are made.
45
Actuarial
Unfunded
UAAL as a
Actuarial
Accrued
(Overfunded)
Percentage
Actuarial
Value of
Liability
AAL
Funded
Covered
of Covered
Valuation
Assets
(AAL)
(UAAL)
Ratio
Payroll
Payroll
Date
(a)
(b)
(b-a)a�
/b)
( c)
b -a /c
12/31/2011
$ 4,072,790
$ 5,493,307
$ 1,420,517
74.1%
$ 4,160,807
34.1%
12/31/2012
5,094,120
6,472,843
1,378,723
78.7%
4,590,015
30.0%
12/31/2013
6,392,661
8,177,304
1,784,643
78.2%
5,590,559
31.9%
Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events
far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to
past expectations and new estimates are made about the future.
Actuarial calculations are based on the benefits provided under the terms of the substantive plan in effect at the time of
each valuation, and reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions
used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial
value of assets.
Note 12: Fund Balance
The Town classifies governmental fund balances in accordance with Government Accounting Standards Board (GASB)
Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions:
Nonspendable fund balance includes amounts that either (a) are not in a spendable form or (b) are legally or
contractually required to be maintained intact.
Restricted fund balance includes amounts for which constraints have been placed on the use of the resources either (a)
externally imposed by creditors (such as through a debt covenant), grantors, contributors, or laws or regulations of other
governments, or (b) or imposed by law through constitutional provisions or enabling legislation.
Committed fund balance includes amounts that can be used only for the specific purposes determined and approved by
passage of a formal resolution of the government's highest level of decision-making authority, the Town Council.
Commitments may be changed or lifted only by the government taking the same formal action that imposed the
constraint originally. In accordance with Town Charter, an amount equal to twenty percent of total general fund
expenditures has been identified as committed.
Assigned fund balance includes amounts intended to be used by the government for specific purposes. Pursuant to
Ordinance 11-66, the Town Council designated the Town Manager or his/her designee as the official authorized person
to assign fund balance. In governmental funds other than the general fund, assigned fund balance represents the amount
that is not restricted or committed. At September 30, 2014, the Town had assigned fund balances for specific purposes
including parks and recreation in the amount of $2,371,059.
Unassigned fund balance is the residual classification of the general fund and includes all amounts not contained in the
other classifications.
The Town uses restricted amounts first when both restricted and unrestricted fund balances are available. Additionally,
the Town would use committed, then assigned and lastly unassigned amounts of unrestricted fund balance when
expenditures are made.
45
TOWN OF PROSPER, TEXAS
Notes to the Financial Statements
For the Year Ended September 30, 2014
Note 12: Fund Balance — continued
The Town's financial goal is to achieve and maintain an unassigned fund balance in the general fund equal to twenty-
five percent of budgeted expenditures, but may be reduced down to ten percent in unusual financial circumstances with a
corrective five-year plan to restore the fund balance back to twenty-five percent. The charter also mandates a 20 percent
(20%) contingency.
Note 13: Prior Period Adjustments
The Town had interest receivable on the balance sheet which was recorded as revenue twice in 2013. This resulted in
fund balance being overstated. Additionally, it was discovered during 2014 that a building had been under depreciated
since it was placed in service seven years ago. This resulted in net position in governmental activities to be overstated.
In 2013 there were assets added to construction in progress which were not actually assets of the Town. This resulted in
an overstatement of government net assets.
Note 14: Upcoming Accounting Pronouncements
In June 2012, the GASB issued Statement No. 68, Accounting and Financial Reporting for Pensions, an amendment of
GASB Statement 27. This Statement requires governments providing defined benefit pension plans to recognize their
long-term obligation for pension benefits as a liability on the statement of net position and to more comprehensively and
comparably measure the annual costs of pension benefits. This Statement will require the Town to record a liability and
expense equal to their proportionate share of the collective net pension liability and expense for the TMRS plan. This
Statement requires the use of the entry age normal method to be used with each period's service cost determined as a
level percentage of pay and requires certain other changes to compute the pension liability and expense. This Statement
also requires revised and new note disclosures and required supplementary information (RSI) to be reported by
employers. The provisions of this Statement are effective for periods beginning after June 15, 2014.
The Town will fully analyze the impact of this new Statement prior to the effective date for the Statement listed above.
46
Debt Serivice
Governmental
Water and
Business -type
General Fund
Fund
Activities
Sewer Fund
Activities
As previously stated September
30, 2013
$ 7,082,945 $
1,187,365 $
66,983,197 $
17,729,670 $
17,975,031
Interest receivable
(6,602)
(348)
(6,950)
(13,386)
(13,386)
Construction in progress
-
-
(32,588)
-
-
Accumulated depreciation
-
-
(3,414 157)
-
-
Beginning fund balance
October 1, 2013 as restated
$ 7,076,343 $
1,187,017 $
63,529,502 $
17,716,284 $
17,961,645
Note 14: Upcoming Accounting Pronouncements
In June 2012, the GASB issued Statement No. 68, Accounting and Financial Reporting for Pensions, an amendment of
GASB Statement 27. This Statement requires governments providing defined benefit pension plans to recognize their
long-term obligation for pension benefits as a liability on the statement of net position and to more comprehensively and
comparably measure the annual costs of pension benefits. This Statement will require the Town to record a liability and
expense equal to their proportionate share of the collective net pension liability and expense for the TMRS plan. This
Statement requires the use of the entry age normal method to be used with each period's service cost determined as a
level percentage of pay and requires certain other changes to compute the pension liability and expense. This Statement
also requires revised and new note disclosures and required supplementary information (RSI) to be reported by
employers. The provisions of this Statement are effective for periods beginning after June 15, 2014.
The Town will fully analyze the impact of this new Statement prior to the effective date for the Statement listed above.
46
TOWN OF PROSPER, TEXAS
Schedule of Revenues, Expenses and Changes in Fund Net Position
Budget and Actual - Water and Sewer
For the Year Ended September 30, 2014
OPERATING REVENUES
Water and sewer charges $
Sanitation charges
Water and sewer connections
Service initiation
Miscellaneous
Total Operating Revenue
OPERATING EXPENSES
Personnel services
Materials and supplies
Contractual services
Total Operating Expenses
Operating Income (Loss)
NON-OPERATING REVENUES
(EXPENSES)
Interest revenue
Interest expense and fiscal charges
Bond issuance cost
Contributions for capital projects
Total Nonoperating Revenues
(Expenses)
Income before transfers
TRANSFERS
120,000
120,000
102,948
Variance
(2,062,385)
Water and Sewer Fund
(643,140)
With Final
-
Final
Actual
Budget
Original
Amended
Budget
Positive
Budget
Budget
Basis
(Negative)
7,468,250
$ 7,468,250 $
7,071,126 $
(397,124)
856,000
856,000
983,037
127,037
450,000
450,000
725,848
275,848
50,000
50,000
52,585
2,585
81,200
81,200
76,568
(4,632)
8,905,450
8,905,450
8,909,164
3,714
1,111, 646
1,111,762
1,101,277
10,485
435,716
432,597
285,771
146,826
41492,671
20,023,089
4,363,760
15,659,329
6,040,033
21,567,448
5,750,808
15,816,640
2,865,417
(12,661,998)
3,158,356
15,820,354
120,000
120,000
102,948
(17,052)
(2,062,385)
(2,062,385)
(643,140)
1,419,245
-
-
(249,365)
(249,365)
-
-
3,897,241
3,897,241
(1,942,385)
(1,942,385)
3,107,684
5,050,069
923,032
(14,604,383)
6,266,040
20,870,423
Net transfers in/(out) (791,320) (791,320)
Total Transfers (791,320) (791,320)
Change in net position $ 131,712 $ (15,395,703)
Reconciliation to generally accepted accounting principles (GAAP)
Depreciation
Change in net position (GAAP basis)
Net position, beginning, restated
Net position, ending $
47
(321,616) 469,704
(321,616) 469,704
5,944,424 $ 21,340,127
(628,523)
5,315,901
17,716,284
23,032,185
TOWN OF PROSPER, TEXAS
Schedule of Revenues, Expenses and Changes in Fund Net Position
Budget and Actual - Storm Drainage
For the Year Ended September 30, 2014
OPERATING REVENUES
Storm drainage utility fees $
Total Operating Revenue
OPERATING EXPENSES
Personnel services
Materials and supplies
Contractual services
Total Operating Expenses
Operating Income (Loss)
NON-OPERATING REVENUES
(EXPENSES)
Interest revenue
Interest expense and fiscal charges
Total Nonoperating Revenues
(Expenses)
INCOME BEFORE TRANSFERS
TRANSFERS
1,600
1,600
1,924
Variance
(106,918)
Storm Drainage Fund
(67,440)
With Final
(105,318)
Final
Actual
Budget
Original
Amended
Budget
Positive
Budget
Budget
Basis
(Negative)
228,800
$ 228,800 $
247,660 $
18,860
228,800
228,800
247,660
18,860
42,689
42,689
44,764
(2,075)
186,963
186,963
17,589
169,374
44,650
21,641
55,986
(34,345)
274,302
251,293
118,339
132,954
(45,502)
(22,493)
129,321
151,814
1,600
1,600
1,924
324
(106,918)
(106,918)
(67,440)
39,478
(105,318)
(105,318)
(65,516)
39,802
(150,820)
(127,811)
63,805
191,616
Net transfers in/(out) (12,780) (12,780)
Total Transfers (12,780) (12,780)
Change in net position $ (163,600) $ (140,591)
Reconciliation to generally accepted accounting principles (GAAP)
Depreciation
Change in net position (GAAP basis)
Net position, beginning, restated
Net position, ending
48
(42,540)
(29,760)
(42,540)
(29,760)
21,265 $
161,856
(6,714)
14,551
245,361
$ 259,912
STATISTICAL SECTION
This part of the Town of Prosper's Comprehensive Annual Financial Report presents detailed information as a context
for understanding what the information in the financial statements, note disclosures, and required supplementary
information says about the government's overall financial health.
Contents
Page
Financial Trends 49
These schedules contain trend information to help the reader understand how the
government's financial performance and well-being have changed over time.
Revenue Capacity 59
These schedules contain information to help the reader assess the government's
most significant local revenue source, the property tax.
Debt Capacity 65
These schedules present information to help the reader assess the affordability
of the government's current levels of outstanding debt and the government's ability
to issue additional debt in the future.
Demographic and Economic Information 71
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the government's financial activities
take place.
Operating Information 73
These schedules contain service and infrastructure data to help the reader understand
how the information in the government's financial report relates to the services the
government provides and the activities it performs.
Source: Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual
Financial Reports for the relevant year.
Town of Prosper, Texas
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Year
2005 2006 2007 2008
Governmental activities
Net investment in capital assets
$
1,119
$
1,225
$
706
$
33,422
Restricted
223
12,226
8,150
9,809
Unrestricted
3,221
(6,941)
1,861
4,693
Total governmental activities net position
$
4,563
$
6,510
$
10,717
$
47,924
Business -type activities
Net investment in capital assets
$
2,765
$
3,750
$
4,609
$
3,321
Restricted
32
40
39
42
Unrestricted
1,199
2,862
3,242
6,338
Total business -type activities net position
$
3,996
$
6,652
$
7,890
$
9,701
Primary government
Net investment in capital assets
$
3,884
$
4,975
$
5,315
$
36,743
Restricted
255
12,266
8,189
9,851
Unrestricted
4,420
(4,079)
5,103
11,031
Total primary government net position
$
8,559
$
13,162
$
18,607
$
57,625
Source: Town financial statements
49
2009
2010
2011
2012
2013
2014
$ 33,919 $
37,271 $
37,366 $
41,798 $
43,471 $
45,398
8,440
5,952
9,359
10,849
9,882
13,459
3,704
8,410
6,979
8,432
10,176
10,126
$ 46,063 $
51,633 $
53,704 $
61,079 $
63,529 $
68,983
$ 6,804
$
5,704
$
5,615
$
6,058
$
12,643
$
19,708
44
5,929
6,034
7,695
9,090
5,319
3,584
$ 12,777
$
11,738
$
13,310
$
15,148
$
17,962
$
23,292
$ 40,723
$
42,975
$
42,981
$
47,856
$
56,114
$
65,106
8,484
5,952
9,359
10,849
9,882
13,459
9,633
14,444
14,674
17,522
15,495
13,710
$ 58,840
$
63,371
$
67,014
$
76,227
$
81,491
$
92,275
50
Town of Prosper, Texas
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
51
Fiscal Year
Expenses
2005
2006
2007
2008
Governmental activities:
General government
$ 934 $
1,229 $
1,492 $
2,063
Public Safety
1,601
1,805
2,089
2,485
Transportation
230
236
417
1,444
Culture and Recreation
49
244
125
130
Interest on long-term debt
276
252
516
459
Total governmental activities expenses
3,090
3,766
4,639
6,581
Business -type activities:
Water, Sewer and sanitation
2,381
2,652
3,889
4,076
Total business -type activities expenses
2,381
2,652
3,889
4,076
Total primary government expenses
5,471
6,418
8,528
10,657
Program Revenues
Governmental activities:
Charges for services:
General government
1,318
1,852
2,363
1,440
Public Safety
348
304
159
162
Transportation
221
412
1,047
485
Culture and Recreation
115
98
680
418
Operating grants and contributions
559
266
547
452
Capital grants and contributions
Total governmental activities program revenues
2,561
2,932
4,796
2,957
Business -type activities:
Charges for services:
Water, sewer and sanitation
2,243
3,603
3,444
4,507
Capital grants and contributions
Total business -type activities program revenues
2,243
3,603
3,444
4,507
Total primary government program revenues
4,804
6,535
8,240
7,464
Net (expense) revenue
Governmental activities
(529)
(834)
157
(3,624)
Business -type activities
(138)
951
(445)
431
Total primary government net expense
$ (667) $
117 $
(288) $
(3,193)
51
2009
2010
2011
2012
2013
2014
2,764 $
2,193 $
3,075 $
2,785 $
2,890 $
3,698
3,329
3,869
4,108
4,341
5,052
5,610
1,356
1,609
2,370
1,616
1,825
2,667
444
917
728
1,546
1,886
2,462
1,276
895
1,139
1,108
1,318
1,119
9,169
9,483
11,420
11,396
12,971
15,556
4,460
5,140
5,332
5,476
6,293
7,464
4,460
5,140
5,332
5,476
6,293
7,464
13,629
14,623
16,752
16,872
19,264
23,020
561 672 826 1,992 2,210 2,588
360 397 400 312 352 585
2 4
1,397 2,224 350 266 93 113
2,908 5,356 5,716 5,277
2,318 3,293 4,484 7,926 8,373 8,567
4,720
5,393
7,238
8,021
9,099
9,080
3,897
4,720
5,393
7,238
8,021
9,099
12,977
7,038
8,686
11,722
15,947
17,472
21,544
(6,851)
(6,190)
(6,936)
(3,470)
(4,598)
(6,989)
260
253
1,906
2,545
2,806
5,513
(6,591) $
(5,937) $
(5,030) $
(925) $
(1,792) $
(1,476)
52
Town of Prosper, Texas
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Year
General Revenues and Other Changes in Net Assets
2005
2006
2007
2008
Governmental activities:
Taxes
Property taxes
$ 1,574 $
1,686 $
3,015 $
4,429
Sales taxes
1,407
1,509
1,208
1,288
Franchise taxes
206
201
304
341
Impact fees and escrow fees
1,828
Investment income
289
574
1,107
596
Miscellaneous
63
376
79
114
Gain/(Loss) on sale of capital asset
(5)
Transfers
(406)
(1,565)
(1,553)
(1,237)
Total governmental activities
3,128
2,781
4,160
7,359
Business -type activities:
Investment income
23
58
132
109
Miscellaneous income
82
33
33
Gain/(Loss) on sale of capital asset
Transfers
406
1,565
1,553
1,237
Total business -type activities
429
1,705
1,718
1,379
Total primary government
3,557
4,486
5,878
8,738
Change in Net Position
Governmental activities 2,599 1,947 4,317 3,735
Business -type activities 291 2,656 1,273 1,810
Total primary government $ 2,890 $ 4,603 $ 5,590 $ 5,545
Source: Town financial statements
53
2009
2010
2011
$ 5,296 $
5,505 $
5,986 $
1,077
1,309
1,321
428
399
425
367
2,688
53
456
338
155
74
116
530
(2,708)
15
434
4,990
10,370
8,904
65
74
53
43
39
47
2,708
(15)
(434)
2,816
98
(334)
7,806
10,468
8,570
(1,861) 4,180 1,968
3,076 351 1,572
$ 1,215 $ 4,531 $ 3,540 $
2012
2013
2014
6,392 $
7,314 $
8,410
1,942
2,478
2,807
505
520
596
628
162
167
115
864
582
151
352
(73)
364
10,845
10,988
12,443
96
175
105
60
91
76
(352)
73
(364)
(196)
339
(183)
10,649
11,327
12,260
7,375 6,389 5,454
2,349 3,145 5,330
9,724 $ 9,534 $ 10,784
54
General Fund
Reserved
Unreserved
Nonspendable
Committed
Unassigned
Total general fund
All other governmental funds
Reserved
Unreserved, reported in:
Capital Project funds
Impact Fee Funds
Special revenue funds
Nonspendable
Restricted
Debt Service
Capital Projects
Assigned
Special revenue funds
Total all other governmental funds
Town of Prosper, Texas
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Year
2005 2006 2007 2008 2009
$ - $ 74 $ 59 $ 18 $ -
1,821 2,855 3,034 3,989 4,398
$ 1,821 $
2,929 $
3,093 $
4,007 $
4,398
$ 223 $
315 $
581 $
622 $
2,557
3,819
10,011
3,160
2,233
16,920
1,624
1,826
4,290
6,936
5,883
$ 5,666 $ 12,152 $ 8,031 $ 9,791 $ 25,360
Source: Balance Sheets -Governmental Funds in Town CAFRs.
W
2010 2011 2012
$ 3 $ 1 $ - $
4,968 5,568
9
1,715
5,356
$ 4,971 $ 5,569 $ 7,080 $
$ 577 $ 737 $ - $
5,337 5,348
6,239 6,895
3,968 3,276
5
890
16,838
1,172
$ 16,121 $ 16,256 $ 18,905 $
2013 2014
1,187
1,159
27
6
1,855
2,152
5,194
5,430
7,076 $
7,588
1,187
1,159
17,799
17,699
1,477
2,371
20,463 $
21,229
56
Town of Prosper, Texas
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
57
Fiscal Year
2005
2006
2007
2008
2009
Revenues
Taxes
$ 3,186 $
3,383
$ 4,500 $
6,034 $
6,738
Licenses and permits
1,876
2,429
3,964
3,925
550
Intergovernmental
276
33
500
452
584
Charges for services
245
304
156
161
976
Fines and forfeitures
93
106
131
247
239
Investment Earnings
289
574
1,107
596
456
Contributions
72
61
45
50
59
Miscellaneous
63
376
79
64
74
Grants
278
Total Revenues
6,100
7,266
10,482
11,529
9,954
Expenditures
General government
819
1,178
1,466
2,003
2,225
Public safety
1,342
1,594
1,871
2,194
3,007
Transportation
165
210
177
352
257
Culture and recreation
26
29
92
97
379
Capital outlay
770
378
8,338
2,108
2,943
Debt service
Principal
189
221
386
399
484
Interest
336
257
493
481
893
Other charges
Total Expenditures
3,647
3,867
12,823
7,634
10,188
Excess of revenues over (under)
2,453
3,399
(2,341)
3,895
(234)
expenditures
Other financing sources (uses)
Transfer in
250
232
Transfer out
(656)
(1,565)
(1,553)
(1,237)
(2,940)
Proceeds from insurance
Proceeds from debt issuance
5,760
13,900
Premium (discount) on debt issuance
Payments to Bond Escrow Agent
Capital Leases
45
48
14
41
Net other financing sources (uses)
(361)
4,195
(1,505)
(1,223)
11,233
Net change in fund balances
$ 2,092 $
7,594
$ (3,846) $
2,672 $
10,999
Debt service as a percentage of
noncapital expenditures
18.2%
13.7%
19.6%
15.9%
19.0%
Source: Statement of Revenues, Expenditures,
and Changes in Fund Balance for Governmental Funds
57
1
2010
2011
2012
2013
2014
7,264 $
7,758 $
8,850 $
10,220 $
11,834
672
670
1,571
1,752
2,102
1,109
1,109
2,863
1,730
3,340
2,858
1,809
2,861
3,066
4,353
227
393
541
647
809
339
154
160
166
114
45
272
348
1,129
1,216
116
115
286
570
151
1,070
285
198
49
28
13,700
12,565
17,678
19,329
20,607
2,173
2,750
2,798
2,846
3,685
3,648
3,879
4,144
4,652
5,137
503
1,269
511
523
912
814
653
899
1,167
1,688
13,174
4,112
7,660
9,773
5,719
527
936
1,318
1,396
1,638
1,600
1,101
1,079
1,153
1,163
59
81
158
10
22,439
14,759
18,490
21,668
19,952
(8,739)
(2,194)
(812)
(2,339)
655
2,460
1,066
3,509
6,057
1,571
(2,445)
(667)
(3,177)
(6,150)
(2,009)
426
750
12
2,045
4,712
7,710
3,340
11
242
169
312
(1,064)
(3,899)
(2,592)
58
73
2,881
4,972
3,899
622
(8,666) $
687 $
4,160 $
1,560 $
1,277
23.0% 19.1% 22.1% 21.4% 19.7%
58
Town of Prosper, Texas
General Governmental Tax Revenues By Source
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
Fiscal
Property
Sales
Franchise
Year
Tax
Tax
Tax
Total
2005
$ 1,574 $
1,407 $
206 $
3,187
2006
1,686
1,507
201
3,394
2007
3,015
1,208
304
4,527
2008
4,429
1,288
341
6,058
2009
5,296
1,077
428
6,801
2010
5,504
1,309
399
7,212
2011
6,012
1,321
424
7,757
2012
6,403
1,942
505
8,850
2013
7,223
2,478
520
10,221
2014
8,431
2,807
596
11,834
Source: Town CAFRs and detailed financial records
59
Town of Prosper, Texas
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(amounts expressed in thousands)
Total Taxable Assesed
Fiscal
Total Estimated
Estimated
Estimated
Less:
Total Taxable'
Direct
Value as a %
Year
Market Value
Market Value
Market Value
Tax Exempt
Assessed
Tax
of Estimated
Ended
as Assessed
Real Property
Personal Property
Real Property
Value
Rate
Market Value
2005
$ 389,550 $
373,458
$ 16,092 $
76,950
$ 312,600
0.40539
80.25%
2006
562,960
541,335
21,625
156,664
406,296
0.49882
72.17%
2007
922,056
895,671
26,385
353,017
569,039
0.52000
61.71%
2008
1,280,490
1,249,228
31,262
461,769
818,721
0.52000
63.94%
2009
1,502,656
1,470,009
32,647
507,992
994,664
0.52000
66.19%
2010
1,549,887
1,516,169
33,718
503,338
1,046,549
0.52000
67.52%
2011
1,651,676
1,618,179
33,497
504,888
1,146,788
0.52000
69.43%
2012
1,753,522
1,719,190
34,332
522,150
1,231,372
0.52000
70.22%
2013
1,905,100
1,865,370
39,730
557,691
1,347,409
0.52000
70.73%
2014
2,161,596
2,118,602
42,994
604,133
1,557,463
0.52000
72.05%
Source: Collin and Denton County Appraisal District Certified Totals and Collin County Tax Assessor -Collector Tax Rolls
'Taxable Assessed Values are net of local option over -65 exemptions, state mandated agricultural exemptions, and
disabled veterans' exemptions. This amount may include senior tax freeze ceiling amounts.
O
Town of Prosper, Texas
Property Tax Rates'
Direct and Overlapping' Governments
(per $100 of assessed value)
Last Ten Fiscal Years
Source: Collin County and Denton County Appraisal Districts
'Tax rate is per $100 of taxable assessed value
'Overlapping rates are those of local and county governments that apply to property owners within the Town of Prosper.
61
Town of Prosper Tax Rate 1
Overlapping Tax Rates 2
Fiscal
General
Debt
Prosper
Collin
Collin
Denton
Year
Government
Service
Total
ISD
County
College
County
2005
0.218440
0.105660
0.324100
1.819900
0.250000
0.091932
0.247170
2006
0.184549
0.220836
0.405385
1.975310
0.250000
0.089422
0.246480
2007
0.184549
0.314268
0.498817
1.800000
0.245000
0.087683
0.231920
2008
0.275075
0.244925
0.520000
1.670000
0.245000
0.086984
0.235890
2009
0.305011
0.214989
0.520000
1.670000
0.242500
0.086493
0.235770
2010
0.314084
0.205916
0.520000
1.640000
0.242500
0.086300
0.249800
2011
0.334742
0.185258
0.520000
1.630000
0.240000
0.086300
0.273900
2012
0.316937
0.203063
0.520000
1.670000
0.240000
0.086300
0.277357
2013
0.316914
0.203086
0.520000
1.670000
0.240000
0.086299
0.282867
2014
0.326191
0.193809
0.520000
1.670000
0.237500
0.083643
0.284914
Source: Collin County and Denton County Appraisal Districts
'Tax rate is per $100 of taxable assessed value
'Overlapping rates are those of local and county governments that apply to property owners within the Town of Prosper.
61
Total Direct Total Direct
& Overlapping & Overlapping
Rates
Rates
Collin County
Denton County
2.485932
2.391170
2.720117
2.627175
2.631500
2.530737
2.521984
2.425890
2.518993
2.425770
2.488800
2.409800
2.476300
2.423900
2.516300
2.467357
2.516299
2.472867
2.511143
2.474914
62
Town of Prosper, Texas
Property Tax Levies and Collections
Last Ten Fiscal Years
Collections within the
Total Tax Fiscal Year of the Levy Total Collections to Date
Fiscal Year
Levy for
Percentage
Collections in
Percentage
Ended
Fiscal Year'
Amount
of Levy
Subsequent Years
Amount
of Levy'
2005
$ 1,561,979 $
1,550,274
99.25% $
9,259 $
1,559,533
99.8%
2006
1,664,728
1,643,724
98.74%
18,581
1,662,305
99.9%
2007
2,920,145
2,871,131
98.32%
49,014
2,920,145
100.0%
2008
4,345,264
4,279,374
98.48%
78,851
4,358,225
100.3%
2009
5,218,951
5,149,015
98.66%
94,023
5,243,038
100.5%
2010
5,404,368
5,338,109
98.77%
92,161
5,430,270
100.5%
2011
5,932,358
5,898,857
99.44%
59,587
5,958,444
100.4%
2012
6,380,037
6,323,502
99.11%
85,658
6,409,160
100.5%
2013
7,036,147
6,982,787
99.24%
64,149
7,046,936
100.2%
2014
7,938,561
8,174,411
102.97%
8,174,411
103.0%
Note: Taxes stated are for General Fund and Debt Service Funds.
`Tax Levy is the original levy as of certification date, and does not include adjustments. The percentage of levy
collected may be greater than 100% as payments that relate to levy adjustments are collected.
63
Town of Prosper, Texas
Principal Property Taxpayers
Fiscal Year End 2014 and 2005
Totals
$ 121,411,175
Source: Collin and Denton County Appraisal Districts
64
9.01% $ 46,216,753
18.04%
2014
2005
Percentage of
Percentage of
Taxable
Total Taxable
Taxable
Total Taxable
Assessed
Assessed
Assessed
Assessed
Taxpayer
Value
Rank
Value
Value
Rank
Value
Western Rim Investors LP
$ 46,712,539
1
3.47%
Prosper Land Company LTD
12,958,717
2
0.96%
$ 12,810,165
1
5.00%
D R Horton -Texas LTD
10,279,354
3
0.76%
Meritage Homes of Texas LLC
8,612,625
4
0.64%
Beazer Homes Texas LP
7,716,389
5
0.57%
Rosebriar Prosper Plaza LP
7,579,560
6
0.56%
Five SAC Self -Storage Corp
7,129,529
7
0.53%
Saddle Creek Investments LTD
7,018,145
8
0.52%
First Texas Homes Inc
6,787,476
9
0.50%
Forestar (USA) Real Estate
6,616,841
10
0.49%
Sanders Deion Luwynn
8,180,103
2
3.19%
PDC 380 Prosper LTD
7,034,867
3
2.75%
Hope Lumber & Supply Co
3,815,682
4
1.49%
Lennar Homes of Texas
2,935,487
5
1.15%
2002 Tuscany Partners LP
2,653,017
6
1.04%
Lattimore Materials Co
2,579,134
7
1.01%
Hope Lumber & Supply Co LP
2,222,450
8
0.87%
Jobe Properties LTD
2,191,717
9
0.86%
Mahard Grain Co
1,794,131
10
0.70%
Totals
$ 121,411,175
Source: Collin and Denton County Appraisal Districts
64
9.01% $ 46,216,753
18.04%
Town of Prosper, Texas
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(amounts expressed in thousands, except per capita amount)
Governmental Activities
Business Type Activities
C'L
General
Fiscal
Obligation Certificates of
Tax
Capital
Revenue
Year
Bonds Obligation
Notes
Leases
Bond Notes
2005 $
- $ 5,521 $
298 $
74 $
8,444 $ 17
2006
11,214
188
31
14,581
2007
10,993
71
30
14,272
2008
10,682
31
13,813
2009
24,136
34
13,194
2010
22,259
51
13,915
2011
21,355
2,045
21
13,179
2012
4,552 19,655
1,765
18,798
2013
8,216 18,909
1,425
23,249
2014
11,255 15,594
1,080
35,133
Note: Details regarding the Town's outstanding debt can be
found in the notes to the financial
statements.
' See the Schedule of Demographic and Economic Statistics
for personal income and population data.
N/A: Data not
available at the time of this publication
C'L
Total
Percentage
Primary
of Personal
Government
Income'
$ 14,354
7.8%
26,014
10.8%
25,366
8.8%
24,526
7.8%
37,364
11.5%
36,225
7.7%
36,600
6.3%
44,770
6.7%
51,799
7.0%
63,062
N/A
Per
Capita'
3,501
4,955
4,193
3,862
5,263
3,844
3,280
3,673
3,871
4,208
'Tel
Town of Prosper, Texas
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
(amounts expressed in thousands, except per capita amount)
Note: Details regarding the Town's outstanding debt can be found in the notes to the financial statements.
' See the Schedule of Assessed Value and Estimated Actual Value of Taxable Property for property value data.
z Population data can be found in the Schedule of Demographic and Economic Statistics
67
Percentage of
General
Certificates
Less: Amounts
Actual Taxable
Fiscal
Obligation
of
Available in Debt
Value of
Per
Year
Bonds
Obligation
Service Funds
Total
Property'
Capital
2005
$ - $
5,521 $
223 $
5,298
1.69% $
1,292
2006
11,214
315
10,899
2.68%
2,076
2007
10,993
581
10,412
1.83%
1,721
2008
10,682
622
10,060
1.23%
1,584
2009
24,136
828
23,308
2.34%
3,283
2010
22,259
614
21,645
2.07%
2,297
2011
21,355
737
20,618
1.80%
1,847
2012
4,552
19,655
890
23,317
1.89%
1,913
2013
8,216
18,909
1,187
25,938
1.93%
1,939
2014
11,255
15,594
1,159
25,690
1.65%
1,714
Note: Details regarding the Town's outstanding debt can be found in the notes to the financial statements.
' See the Schedule of Assessed Value and Estimated Actual Value of Taxable Property for property value data.
z Population data can be found in the Schedule of Demographic and Economic Statistics
67
Town of Prosper, Texas
Direct and Overlapping Governmental Activities Debt
As of September 30, 2014
Debt repaid with property taxes:
Prosper Independent School District
Estimated
Estimated
Share of
Debt Percentage
Overlapping
Governmental Unit Outstanding Applicable'
Debt
Debt repaid with property taxes:
Prosper Independent School District
$ 276,910,581
68.66%
$ 190,126,805
Collin County
391,410,000
2.11%
8,258,751
Collin College
34,595,000
2.11%
729,955
Denton County
614,975,000
0.23%
1,414,443
Subtotal - overlapping debt
1,317,890,581
200,529,953
Town of Prosper direct debt
$ 60,920,000
100%
60,920,000
Total direct and overlapping debt
$ 261,449,953
Source: Outstanding data from Municipal Advisory Council of Texas estimates. Actual amounts of overlapping debt vary
based on entity payment schedules and any new issuances.
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Town. This
schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and
businesses of the Town of Prosper. This process recognizes that, when considering the government's ability to issue and
repay long-term debt, the entire debt burden borne by the residents and businesses 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
government.
'The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages
were estimated by determining the portion of the government's taxable assessed value that is within the government's
boundaries and dividing it by the government's total taxable assessed value.
68
Town of Prosper, Texas
Legal Debt Margin Information
Last Ten Fiscal Years
(rates rounded to 4 places)
2005 2006 2007 2008 2009
Tax Rate Limit $ 1.50 $ 1.50 $ 1.50 $ 2.50 $ 2.50
Total Tax Rate 0.4988 0.5200 0.5200 0.5200 0.5200
Available Tax Rate $ 1.0012 $ 0.9800 $ 0.9800 $ 1.9800 $ 1.9800
Note: The Town Charter does not provide for a debt limit.
For FY 2005 - FY 2007, under Article XI, Section 4 of the Texas Constitution, the maximum tax rate under general law
charter is $1.50 per $100 assessed valuation.
For FY 2008- Present, under Article XI, Section 5 of the Texas Constitution, the maximum tax rate under a home rule charter
is $2.50 per $100 assessed valuation.
No direct bond debt limitation is imposed on the Town under current state law or the Town's Charter.
69
2010 2011 2012 2013 2014
2.50 $ 2.50 $ 2.50 $ 2.50 $ 2.50
0.5200 0.5200 0.5200 0.5200 0.5200
1.9800 $ 1.9800 $ 1.9800 $ 1.9800 $ 1.9800
70
Town of Prosper, Texas
Demographic and Economic Statistics
Last Ten Fiscal Years
Population data estimates from the North Central Texas Council of Governments
2Per capita personal income data not available specific to Prosper. Used Collin County data from Bureau of Economic Analysis to
estimate
3Enrollment data comes from Prosper ISD
4Annual Unemployment Rate updated to Collin County data from the Texas Workforce Commission
N/A: Data not available at the time of this publication
71
Personal
Per
Income
Capita
Fiscal
(expressed in
Personal
School
Unemployment
Year
Population'
thousands)
Income
Enrollmen?
Rate4
2005
4,100
$ 183,942
$ 44,864
1,475
4.6%
2006
5,250
241,064
45,917
1,825
4.2%
2007
6,050
289,704
47,885
2,100
3.9%
2008
6,350
313,963
49,443
2,800
4.8%
2009
7,100
325,776
45,884
3,220
7.6%
2010
9,423
467,654
49,629
3,575
7.1%
2011
11,160
585,286
52,445
3,627
7.1%
2012
12,190
668,817
54,866
4,921
5.7%
2013
13,380
742,858
55,520
5,632
5.1%
2014
14,986
N/A
N/A
6,448
4.6%
Population data estimates from the North Central Texas Council of Governments
2Per capita personal income data not available specific to Prosper. Used Collin County data from Bureau of Economic Analysis to
estimate
3Enrollment data comes from Prosper ISD
4Annual Unemployment Rate updated to Collin County data from the Texas Workforce Commission
N/A: Data not available at the time of this publication
71
Town of Prosper, Texas
Principal Employers
Current Year
Source: Prosper EDC, updated August 2014
72
2014
Percentage
of Total Town
Emulover
Emplovees
Rank
Emplovment
Prosper ISD
766
1
51.11%
Town of Prosper
122
2
8.14%
Gentle Creek
52
3
3.47%
Dairy Manufacturers, Inc.
35
4
2.34%
RE/MAX Performance Group
33
5
2.20%
Mahard Egg Farm
31
6
2.07%
ProBuild
30
7
2.00%
Lattimore Materials
26
8
1.73%
CVS
25
9
1.67%
Crossland Construction
20
10
1.33%
Total
1,140
76.07%
Source: Prosper EDC, updated August 2014
72
Source: Town of Prosper Department Staff
N/A: Data not available at the time of this publication.
73
Town of Prosper, TX
Operating Indicators by Function/Program
Last Ten Fiscal Years
(dollar amounts below
expressed in
thousands)
Fiscal Year
Function/ProRram
2005
2006
2007
2008
2009
2010
General Government
Building Inspection Permits
Commercial Construction
Number of Units
N/A
15
14
23
14
8
Total dollar value of permits issued
N/A
$ 5,630 $
14,410
$ 6,195
$
4,721
$
3,150
Average Value
N/A
$ 375 $
1,029
$ 269
$
337
$
394
Residential Construction
Number of Units
310
340
338
227
204
299
Total dollar value of permits issued
N/A
$ 125,180 $
109,141
$ 99,110
$
62,870
$
79,232
Average Value
N/A
$ 368 $
323
$ 437
$
308
$
265
Public Safety
Police
Physical Arrests
47
48
64
90
88
121
Traffic Collisions
115
128
99
72
92
69
Fire
Total Incidents/Calls for Service
784
901
576
646
747
776
Fire
43
66
34
56
45
42
Overpressure/Explosion
1
1
Rescue & EMS
544
613
292
334
379
399
Hazardous Condition
25
24
53
38
36
30
Service Call
60
57
91
104
116
147
Good Intent Call
49
66
55
59
80
61
False Alarm & False Call
42
46
45
52
87
95
Severe Weather & Natural Disaster
3
2
2
3
2
Special Incident
18
29
3
1
Fire Marshal
Fire Inspections
N/A
N/A
N/A
N/A
94
112
Fire Safety Programs
N/A
N/A
N/A
N/A
37
42
Municipal Court
Number of cases filed
887
1,059
1,123
1,762
1,743
2,050
Number of cases closed
678
825
979
1,707
1,592
1,504
Public Works
Water & Sewer
Water Customers
1,656
2,013
2,380
2,664
2,883
3,080
Wastewater Customers
1,173
1,493
1,842
2,007
2,137
2,333
Source: Town of Prosper Department Staff
N/A: Data not available at the time of this publication.
73
2011 2012 2013 2014
13 21 21 29
$ 14,341 $ 28,385 $ 4,219 $ 19,172
$ 1,103 $ 1,352 $ 201 $ 661
347 445 483 474
$ 100,084 $ 172,757 $ 195,257 $ 209,949
$ 288 $ 388 $ 404 $ 443
103
108
99
115
148
263
289
279
1,046
1,122
1,063
1,100
63
67
45
64
1
11
6
5
441
585
597
588
38
34
20
29
234
193
196
212
85
100
94
101
107
132
96
95
64
3
6
13
6
659
402
278
283
20
23
14
18
2,025
1,645
2,118
2,439
1,833
1,688
1,872
2,954
3,431 3,853 4,418 4,943
2,672 3,084 3,568 4,055
74
Town of Prosper, Texas
Full-time Equivalent Town Government Employees by Function
Last Ten Fiscal Years
Fiscal Years
Source: Town of Prosper Annual Budget
75
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
GENERAL FUND
Administration
4
4
5
5
5
5.5
5.5
6.5
8.5
9.0
Code Compliance
1
1
1
1
1
1
1
1
1
1
Court
1
1
1
1
1
1
1
1
1
1.5
Dispatch
1
6
7
7
7
7.5
Engineering
1
1
1
1
1
1
3
3
Fire
8.5
8.5
8.5
12.5
18.5
18.5
18.5
20
20
20
Fire Marshal
1
1
1
1
1
1
1
1
Inspections
3
4
6
7
7
7
7
7
8
9
Library
1
1
1
1
1
1
1.5
2
Parks
1
1
2
2
4
6
10
12
15
Planning
1
1
1
2
3
3
2
2
3
3
Police
6
7
9
8
11
10
11
12
15
15
Streets
2
2
2
2
2
2
2
2
2
2
Total General Fund
27
30
38
44
55
61
64
72
83
89
ENTERPRISE FUNDS
Storm Drainage
1
1
1
1
Utility Billing
1
1
2
2
2
2
1.5
2.5
2.5
Wastewater
2
3
2
2
2
2
2
3
5
6
Water
2
4
5
5
5
5
5
7
8
10
Total Enterprise Funds
4
8
8
9
9
9
10
13
16.5
19.5
CAPITAL PROJECTS FUND
1
1
1
1
1
1
31
38
46
53
65
71
75
85
100.5
109.5
Source: Town of Prosper Annual Budget
75