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2016_02.15 CC Packet KENNEDALE You're Here,Your Home www.cityofkennedale.com KENNEDALE CITY COUNCIL AGENDA REGULAR MEETING February 15, 2016 CITY HALL COUNCIL CHAMBERS, 405 MUNICIPAL DRIVE WORK SESSION at 5:30 PM REGULAR SESSION at 7:00 PM I. CALL TO ORDER II.WORK SESSION *NOTE: Pursuant to Section 551.071, Texas Government Code, the City Council reserves the right to adjourn into Executive Session at any time during the work session or the regular session to discuss posted executive session items or to seek legal advice from the City Attorney on any item posted on the agenda. A. Review the Comprehensive Annual Financial Report B. Discuss the proposed mixed use development by OM Housing C. Discussion of items on regular agenda III. REGULAR SESSION IV. ROLL CALL V. INVOCATION VI. UNITED STATES PLEDGE VII. TEXAS PLEDGE "Honor the Texas Flag; I Pledge Allegiance to Thee, Texas, One State under God; One and Indivisible." VIII. VISITOR/CITIZENS FORUM At this time, any person with business before the Council not scheduled on the agenda may speak to the Council. No formal action can be taken on these items at this meeting. IX. REPORTS/ANNOUNCEMENTS In addition to any specific matters listed below, the city council may receive a report about items of community interest, including but not limited to recognition of individual officials, citizens or departments, information regarding holiday schedules, upcoming or attended events, etc. A. Updates from City Council B. Updates from the Mayor 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 C. Updates from the City Manager X. MONITORING INFORMATION A. Monthly Financials-January 2016 B. Executive Limitations C. Ends Review- Balanced Scorecard XI. INCIDENTAL ITEMS A. 2014 Comprehensive Annual Financial Report (CAFR)Award B. Review the 2015 Police Activity Reports regarding crime statistics and use of force XII. REQUIRED APPROVAL ITEMS (CONSENT) All matters listed under required approval items (consent) have been previously discussed, require little or no deliberation, or are considered to be routine by the council. If discussion is desired, then an item will be removed from the consent agenda and considered separately. A. Consider approval of minutes from January 18, 2016 meeting B. Consider approval of Resolution 480 calling the General Election for May 7, 2016 XIII. DECISION ITEMS A. Consider approval of Resolution 478 supporting OM Housing's application for housing tax credit for the proposed Village at Hammack Creek project B. Conduct a Public Hearing to consider authorizing funding participation with Tarrant County Community Development and Housing for the 42nd Year Community Development Block Grant (CDBG) Project for sanitary sewer improvements on Dick Price Road C. Consider approval of Resolution 482 authorizing funding participation with Tarrant County Community Development and Housing for the 42nd Year Community Development Block Grant (CDBG) Project for sanitary sewer improvements on Dick Price Road D. Consider approval of Ordinance 590 calling a Charter Amendment Special Election for May 7, 2016 E. Consider approval of Resolution 479 authorizing TCAP to negotiate an extension to the current electric supply agreement and approving TCAP contracting with Next Era and authorizing the City Manager to sign an electric supply agreement F. Consider acceptance of the 2015 Comprehensive Annual Financial Report (CAFR) XIV. EXECUTIVE SESSION A. The City Council may meet in closed session at any time during the work session or the regular session, pursuant to Section 551.071 of the Texas Government Code for consultation with the City Attorney pertaining to any matter in which the duty of the City Attorney under the Texas Disciplinary Rules of Professional Conduct may conflict with the Open Meetings Act, including discussion on any item posted on the agenda and the following items: 1. Land use amortization (6727 Hudson Village Creek Road) 2. Floodplain amortization and remediation XV. RECONVENE INTO OPEN SESSION,AND TAKE ACTION NECESSARY PURSUANT TO EXECUTIVE SESSION, IF NEEDED A. Consider approval of Resolution 481 authorizing the Board of Adjustment to initiate amortization proceedings on property at 6727 Hudson Village Creek Road XVI.ADJOURNMENT In compliance with the Americans with Disabilities Act, the City of Kennedale will provide for reasonable accommodations for persons attending City Council meetings. This building is wheelchair accessible, and parking spaces for disabled citizens are available. Requests for sign interpreter services must be made forty-eight (48) hours prior to the meetings. Please contact the City Secretary at 817.985.2104 or(TDD) 1.800.735.2989 CERTIFICATION I certify that a copy of the February 15, 2016, agenda was posted on the City Hall bulletin board next to the main entrance of the City Hall building, 405 Municipal Drive, of the City of Kennedale, Texas, in a place convenient and readily accessible to the general public at all times and said agenda was posted at least 72 hours preceding the schedule time of said meeting, in accordance with Chapter 551 of the Texas Government Code. Leslie Galloway, City ecretary KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: WORK SESSION -A. I. Subject: Review the Comprehensive Annual Financial Report II. Originated by: III. Summary: Pattillo, Brown & Hill has completed the audit and complied the 2015 Comprehensive Annual Finance Report (CAFR). In the audit report we had an increase of net position of$549,665 before prior period adjustments. The City's governmental funds increased fund balance by $539,875 of that$506,546 was in the general fund and the water and sewer fund decreased net position by $477,965 in the current year. This year GASB 68 went into effect putting the net pension liability on the govern ment-wides as long-term liability item creating prior period adjustments and an increase in long-term liabilities. IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: VII.Alternative Actions: VIII.Attachments: 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: WORK SESSION - B. I. Subject: Discuss the proposed mixed use development by OM Housing II. Originated by: Rachel Roberts, City Planner III. Summary: During the work session, Deepak Sulakhe and Jason Lain from OM Housing will present a proposal for a mixed-use development along Kennedale Pkwy and Kennedale Sublett Rd. The development would have retail uses along Kennedale Pkwy with townhomes or office and multi-family uses located behind the retail portion. The multi-family portion would be financed through the tax credit housing program, whereas the other components would be financed through conventional sources. In order to participate in the tax credit financing program, the developer will need a resolution of support from the city, and consideration of a resolution is on this month's City Council agenda. In advance of your seeing the presentation, this staff report will give some historical context as well as some housing information for the region. As depicted on the attached map, the idea of having a retail frontage at this site with multi-family uses located behind it on Kennedale Sublett is not a new idea for Kennedale. In fact, the property was zoned for those uses in the 1960s; the attached map is the city's zoning map as shown in the 1965 comprehensive plan. At that time, the city had expected faster growth in this area and had planned for dense residential close to downtown and more low-density residential in outlying areas. As it turned out, the expected density (Kennedale population of 30,000 by 1990) never materialized, and the idea of a thriving downtown area was set aside. The concept was revived in the 2012 comprehensive plan, which envisions a revitalized downtown/TownCenter and an adjacent mixed use "village"district. The development proposed by OM Housing, therefore, is consistent with the city's history and general direction for this part of the city. Another element Council should consider is the cost of housing in the Fort Worth/Arlington region. The National Low Income Housing Coalition produces an annual report on the cost of rental housing throughout the nation. While this organization does advocacy work, the data included in the report can be downloaded and viewed outside of any policy recommendations, so policy makers and the public alike have the opportunity to see the numbers without any advocacy attached to them. The organization estimates that a renter would need to make $13.27 per hour in order for a one-bedroom market-rate unit to be affordable and $17.17 per hour for a two-bedroom market-rate unit to be affordable (note: a number of Kennedale's employees earn in the range of$13-$15 per hour). Note that these hourly wages are quite higher than the minimum wage, so any Kennedale residents making minimum wage will struggle to afford a market rate apartment. In fact, a minimum wage earner would have to work an estimated 73 hours per week in order for a market-rate one-bedroom rental unit to be considered affordable. The supply of housing that a minimum wage earner can really afford in the Dallas/Fort Worth area is quite small. And the supply of decent housing for those who do not qualify for assistance such as housing vouchers but at the same time do not earn enough to buy a home is likewise quite limited. Developments financed through the tax credit program can provide very needed housing opportunities for those stuck 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 between middle class and lower income housing supplies. In Kennedale and surrounding areas, there is a great need for more of these housing opportunities. IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: VII.Alternative Actions: VIII.Attachments: r1--T1 9-65 Kennedale zoning map lZoning Districts 1965 mark-u df CAM a 1 z 8 M. F d � F i � �y d < Cil .7 0as UO e U1 � Aso _° �+ ®+ z d a a e = - pg C= 0 zW � C � � � - F E M Ora 04 F ...� r f�i Q W a o P4 W .J a � a 2$EW o U w _ � PQ V A W W 0 Et0',ol 4 Go z w < v a Cm x �_ C o V Q Q F �ODD. w 0© rTJ yr KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: REPORTS/ANNOUNCEMENTS -A. I. Subject: Updates from City Council II. Originated by: City Council, City Council III. Summary: Updates and information from Council members . IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: None VII.Alternative Actions: VIII.Attachments: 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: REPORTS/ANNOUNCEMENTS - B. I. Subject: Updates from the Mayor II. Originated by: III. Summary: Updates and information from the Mayor. IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: None VII.Alternative Actions: VIII.Attachments: 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: REPORTS/ANNOUNCEMENTS - C. I. Subject: Updates from the City Manager II. Originated by: Bob Hart III. Summary: Updates and information from City Manager, if any. IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: VII.Alternative Actions: VIII.Attachments: 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: MONITORING INFORMATION -A. I. Subject: Monthly Financials- January 2016 II. Originated by: III. Summary: Overview of the City's revenues/expenditures for all funds compared to budget and previous year. IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: VII.Alternative Actions: VIII.Attachments: F1.—TJa—nuary 2016 Monthly Financials 12016 01 Monthly Financials. df 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 CITY OF KENNEDALE, TEXAS ANNUAL PROGRAM OF SERVICES MONTHLY FINANCIALS CURRENT LINE I TBVI BUDGET OVERAGES FOR TH E d TY CURRENT A0001UNT NUMBER ACOOUNT NAME BUDGET BALANCE OVERAGE 10-5409-01-02 WASTEWATBRSYSrE3M MAINTENANCE 120,000 205,024 85,024 10-5450-01-02 PUM P/M OTORM AI NTENANCE 28,000 43,985 15,985 01-5109-10-00 PARTIIME/TBMFOPARY 10,000 22,328 12,328 15-5615-01-00 FUNCTIONAL GRANT - 8,577 8,577 17-5580-12-02 ENGINEERNG 6,000 8,586 2,586 01-5540-90-00 I NSURANCE AUTO 19,208 21,109 1,901 07-5510-01-00 AS9DCIAIION DUESPUBUCAIIONS 5,073 6,592 1,519 12-5430-02-00 M OTORVEHI CLE M AI NTENANCE - 550 550 01-5240-03-00 PR NTED SU PR J ES 200 459 259 18-5107-01-00 OVERTI M E - 199 199 17-5260-12-02 GENERAL OFR CE SUPR J ES 375 568 193 01-5578-07-01 TRAVB_ 1,612 1,798 186 01-5525-02-00 TPAI NI NC✓SEM I NABS 1,000 1,150 150 17-5240-12-02 PR NTED SUPR J ES 75 161 86 17-5230-12-02 CLEANINGSUPRJES 425 481 56 "EXEMPLIFYING EXCELLENCE" CITY OF KENNEDALE,TEXAS ANNUAL PROGRAM OF SERVICES MONTHLY FINANCIALS FY14-15 FY14-15 FY15-16 CURRENT FY14-15 CY-PY %OF BUDGET BUDGET REVENUES YTD ACTUAL ADOPTED MONTH YTD CHANGE USED REMAINING GENERAL FUND 3,085,107 5,893,253 6,091,420 1,092,151 3,207,067 436,952 52.6% 2,884,352 OTHER GENERAL FUNDS 308,986 1,437,115 1,263,636 33,710 203,797 28,617 16.1% 1,059,839 GENERAL FUND 3,394,093 7,330,367 7,355,056 1,125,861 3,410,865 465,568 46.47o 3,944,191 GENERAL DEBT SERVICE FUND 953,971 1,340,773 1,403,111 279,667 899,860 43,928 64.17o 503,251 WATER/SEWER FUND 913,131 3,460,517 5,672,328 220,006 798,595 2,185,873 14.1% 4,873,733 STORMWATER UTILITY FUND 60,336 200,108 247,825 20,615 72,563 (17,700) 29.3% 175,262 WATER IMPACT FUND 66,732 172,370 116,040 3,939 29,418 30 25.4% 86,622 SEWER IMPACT FUND 12,161 44,619 6,682 2,432 7,624 (1) 114.1% (942) WATER/SEWER FUND 1,052,361 3,877,614 6,042,875 246,992 908,200 2,168,203 15.07o 5,134,675 EDC4B FUNDS 139,610 650,469 912,036 27,668 118,149 10,331 13.07o 793,888 CAPITAL FUNDS 95,401 699,775 1,141,107 144,660 163,159 (107,523) 14.37o 977,948 SPECIAL REVENUE FUNDS (4,872) 42,861 126,801 12,704 13,955 125,000 11.076 112,846 TOTAL REVENUES $5,630,564 $13,941,859 $16,980,986 $1,837,553 $5,514,187 $2,705,508 32.57o 11,466,798 FY14-15 FY14-15 FY15-16 CURRENT FY14-15 CY-PY 76 OF BUDGET BUDGET EXPENDITURES YTD ACTUAL ADOPTED MONTH YTD CHANGE USED REMAINING GENERAL FUND 1,732,652 5,665,181 6,198,118 514,925 1,893,225 372,294 30.5% 4,304,893 OTHER GENERAL FUNDS 401,767 1,127,260 1,322,814 107,536 352,910 24,818 26.7% 969,904 GENERAL FUND 2,134,419 6,792,441 7,520,932 622,461 2,246,135 397,112 30.57o 5,274,797 GENERAL DEBT SERVICE FUND 537,206 1,338,313 1,363,867 259,575 295,334 20,759 21.7% 1,068,533 WATER/SEWER FUND 1,135,507 4,051,610 6,093,227 261,488 1,151,698 1,032,548 18.9% 4,941,529 STORMWATER UTILITY FUND 62,545 111,696 264,273 100 23,097 (307,954) 8.7% 241,176 WATER IMPACT FUND - 174,916 171,200 - - (3,716) 0.0% 171,200 SEWER IMPACT FUND - 22,396 - - - (22,396) 0.0% - WATER/SEWER FUND 1,198,052 4,360,618 6,528,700 261,588 1,174,795 698,482 18.07o 5,353,905 EDC4B FUNDS 162,850 694,023 711,842 15,264 140,460 (24,127) 19.7% 571,382 CAPITAL FUNDS 25,997 795,765 1,283,626 66,131 210,373 (53,843) 16.47o 1,073,253 SPECIAL REVENUE FUNDS - 48,852 126,800 5,270 17,973 (55,000) 14.2% 108,827 TOTAL EXPENDITURES $4,058,523 $14,030,011 $17,535,767 $1,230,289 $4,085,070 $ 983,384 23.3% 13,450,697 "EXEMPLIFYING EXCELLENCE" CITY OF KENNEDALE,TEXAS ANNUAL PROGRAM OF SERVICES MONTHLY FINANCIALS FY14-15 FY14-15 FY15-16 CURRENT FY15-16 CY- PY OF BUDGET BUDGET GENERAL FUND YTD ACTUAL ADOPTED MONTH YTD CHANGE USED REMAINING CITY MANAGER 73,938 275,131 293,578 22,487 88,048 11,658 30.0% 205,530 MAYOR/CITY COUNCIL 16,452 77,128 88,576 8,139 19,516 (5,530) 22.0% 69,060 CITY SECRETARY 31,894 124,118 135,923 7,799 35,566 (12,421) 26.2% 100,357 MUNICIPAL COURT 41,333 129,204 157,745 5,865 28,433 18,928 18.0% 129,313 HUMAN RESOURCES 34,058 112,356 124,565 11,245 37,009 6,723 29.7% 87,556 FINANCE 94,005 349,477 323,931 34,735 99,180 (96,469) 30.6% 224,751 POLICE 581,786 2,009,458 2,245,833 206,959 697,735 193,639 31.1% 1,548,098 FIRE 514,738 1,627,526 1,728,014 149,643 520,807 79,246 30.1% 1,207,207 COMMUNITY DEVELOPMENT 92,917 348,053 439,480 24,412 106,598 57,053 24.3% 332,882 SENIOR CITIZEN CENTER 13,059 50,569 54,077 5,215 15,652 (32) 28.9% 38,425 LIBRARY 70,084 217,519 239,080 22,446 79,753 9,990 33.4% 159,327 NONDEPARTMENTAL 168,388 344,642 367,317 15,980 164,927 109,510 44.9% 202,390 TOTAL EXPENDITURES $1,732,652 $5,665,181 $ 6,198,118 $ 514,924 $1,893,223 $ 372,294 349.27. $4,304,895 FY14-15 FY14-15 FY15-16 CURRENT FY15-16 CY- PY ?r.OF BUDGET BUDGET WATER/SEWER FUND YTD ACTUAL ADOPTED MONTH YTD CHANGE USED REMAINING UTILITY BILLING 189,864 1,326,837 1,360,981 53,470 147,073 14,824 10.8% 1,213,908 WATER OPERATIONS 534,030 1,109,432 3,156,143 159,725 572,454 1,374,731 18.1% 2,583,689 DEBT 152,813 186,691 505,472 - 152,813 1,372 30.2% 352,659 NONDEPARTMENTAL 258,800 1,428,650 1,070,631 48,293 279,358 (358,379) 26.1% 791,273 TOTAL EXPENDITURES $1,135,507 $4,051,610 $ 6,093,227 $ 261,488 $1,151,698 $1,032,548 18.97. $4,941,529 FY14-15 FY14-15 FY15-16 CURRENT FY15-16 CY- PY ?r.OF BUDGET BUDGET STREET IMPROVEMENT FUND YTD ACTUAL ADOPTED MONTH YTD CHANGE USED REMAINING STREETS 193,306 704,161 1,042,537 39,484 242,729 213,861 23.3% 799,809 PARKS MAINTENANCE 37,627 118,624 84,000 7,508 38,614 7,000 46.0% 45,386 TOTAL EXPENDITURES $ 230,933 $ 822,784 $ 1,126,537 $ 46,991 $ 281,343 $ 220,861 25.0% $ 845,194 FY14-15 FY14-15 FY15-16 CURRENT FY15-16 CY- PY %.OF BUDGET BUDGET EDC411 FUNDS YTD ACTUAL ADOPTED MONTH YTD CHANGE USED REMAINING ADMINISTRATION 50,003 241,795 176,466 16,281 46,019 (85,995) 26.1% 130,447 DEBT SERVICE 92,117 323,315 319,893 4,573 89,623 (3,475) 28.0% 230,270 TOWN SHOPPING CENTER 20,730 66,817 50,484 1,232 13,395 - 26.5% 37,089 TOWN CENTER REDEVELOPME - - 90,000 - - 90,000 0.0% 90,000 TX LEVERAGE - 101,192 50,000 - - (60,000) 0.0% 50,000 TOTAL EXPENDITURES $ 91,744 $ 715,745 $ 686,842 $ 84,494 $ 84,494 $ (59,471) 12.3% $ 537,806 "EXEMPLIFYING EXCELLENCE" KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: MONITORING INFORMATION - B. I. Subject: Executive Limitations II. Originated by: III. Summary: Reports are attached for review. IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: VII.Alternative Actions: VIII.Attachments: 1. Executive Limitations lExecutive Limitations 02.2016.docx 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 POLI CY TYPE: EXECUTIVE LIMITATIONS POLICY TITLE: GLOBAL EXECUTIVE CONSTRAINT The City Manager shall not cause or allow any organizational practice, activity, decision, or circumstance that is either unlawful, imprudent, or in violation of commonly accepted business and professional ethics Overall, City operations are i n compliance with the global constraint policy. POL ICY TYPE: EXECUTIVE LIMITATIONS POLICY TITLE: TREATM ENT OF CUSTOM ERS OF CITY SERVICES With respect to interactions with customers, the City Manager shall not cause or allow conditions, procedures,or decisions that are unsafe, untimely, undignified, or unnecessarily intrusi ve. The City Manager wi I I not: 1. Elicit informationfor which there is no clear necessity. 2. Use methods of col I ecti ng, revi ewi ng, transmi tti ng, or stori ng customer i nformati on that fai I to protect agai nst i mproper access to the materi al 3. Operate faci I i ti es wi thout appropri ate accessi bi I i ty and pri vacy. 4. Operate without establishing with customers a dear understanding of what may be expected and what may not be expected from the servi ce off ered. 5. Operate wi thout i nformi ng customers of thi s pol i cy or provi di ng a way to be heard for persons who beli eve that they have not been accorded a reasonabl e i nterpretati on of their rights under this pol i cy. Cyber security issues area major concern in compliance with point 2. The ci ty backs up files on a daily basis to avoid more common hacking attempts. Limitations have been placed on what websi tes can be accessed. Both the city manager and IT analyst are members of I nfraGard to better understand the risks involved. POLICY TYPE: EXECUTIVE LIMITATIONS POLICY TITLE: TREATM ENT OF STAFF With respect to the treatment of paid and volunteer staff, the City Manager shall not cause or allow conditions that are unfair, undignified, disorganized, or unclear. The Ci ty M anager wi I I not 1. Operate without written personnel rules that (a) clarify rules for stair, (b) provide for effective handling of grievances,and (c) protect against wrongful conditions, such as nepotism and grossly preferential treatment for personal reasons. 2. Retal i ate agai nst any staff member for non-disruptive express on of dissent. 3. Allow staff to beunaware of City Manager's interpretations of their protections under this pol icy. 4. Allow staff to be unprepared to deal with emergency situations. The ci ty maintains current personnel policy and orientation booklet. City operations are in compliance with the treatment of staff pol i cy. Supervi sory and manager staff began supervi sory and I eadershi p trai ni ng on February 10. The training is through I CM A. Staff was heavily involved in the preparation of an asset management plan. In addition staff is involved in the i ntervi env process consistent with our desired culture. POLICY TYPE: EXECUTIVE LIMITATIONS POLICYTITLE: EMERGENCY CITY MANAGERSUCCESSION In order to protect the Council from sudden loss of the City Manager Services, the City Manager shall not permit there to be less than one other person familiar enough with Council and City Manager issues and procedures to be able to maintain organization services Kelly Cooper isthe most informed of staff members. Ram Robertsiswaik rig doEdywith mecnVillageaedc andtheslvageyads Thedepartment heads collectively are aware of on-goi ng acti vi ti esand projects, and I have been more attenti ve to thi s i n staff meeti ngs. KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: MONITORING INFORMATION - C. I. Subject: Ends Review- Balanced Scorecard II. Originated by: III. Summary: Reports are attached for review. IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: VII.Alternative Actions: VIII.Attachments: 1. Balanced Scorecard 113alanced Scorecard. df 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 VNE F-Kennedale oriented, prosperous, 13-1 1 I� conveniently opportunities to live,work and play Janua ry 2016 KENNEDALE You're Here,YOUr Home S1 Achieve a Thriving Community - -- \`\ S2 Be a Sustainable S3 Be Family &Attractive City Oriented - I1 Provide Excellent / Services L nce I3 Expect Operational I4 Ensure Public I5 Enhance s Climate Excellence Health & Safety Partnerships E1 Build Exceptional E2 Foster Pride in E3 Leverage Talent Ownership Technology J NV F1 Balance the F2 Expect Fiscal F3 Leverage Tax Base Responsibility Resources CORE VALUES I NTEGRITYAOOC)UNTAB UTY TEAM WOW I NNOVA-nON OC)M M ITM ENT KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: INCIDENTAL ITEMS (CONSENT) -A. I. Subject: 2014 Comprehensive Annual Financial Report (CAFR)Award II. Originated by: III. Summary: We have received the 2014 Comprehensive Annual Financial Report (CAFR)Award. IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: VII.Alternative Actions: VIII.Attachments: 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: INCIDENTAL ITEMS (CONSENT) - B. I. Subject: Review the 2015 Police Activity Reports regarding crime statistics and use of force II. Originated by: Tommy Williams, Police Chief III. Summary: Attached for council's review is a summary of police activity for calendar year 2015. IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: None VII.Alternative Actions: VIII.Attachments: 1. 2015 Police Activity Report 015 Activity Re ort. df 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 KENNEDALE POLICE DEPARTMENT Activity Report 2015 KENNEDALE Police Department www.cityofkennedale.com i February 15, 2016 To: City Manager, Mayor and Council From: Chief Tommy Williams Re: 2015 Activity Report Enclosed in this packet you will find copies of our 2015 Use of Force Report as well as spreadsheets indicating our activity level and Part 1 Crimes information. I hope you will find this informative and useful. Use of Force This report is required under our policy and the Recognition Program's best practices. Each use of force is documented on the day of occurrence and is reviewed by the entire chain of command.The reviews are for issues such as whether the use was within policy, if the use of force was excessive, if further training may be required, and if we have individual officers who are utilizing force at a statistically higher rate than others. I am pleased to announce that our uses of force were exceptionally low for 2015 and that there were no statistical anomalies indicated. Our force totals fell from 16 in 2014 to 4 for 2015. Of these four incidents, six officers were involved in the calls. While this is a significant decline, I would anticipate that this number will climb for 2016.A normal year for our employees should average around the 15 to 25 incident number.The majority of our physical contacts with citizens continue to be empty hand control tactics and the display of weapons. We continue to provide training to our officers that relate to use of force. We recently completed a block of training on defensive tactics including ground fighting techniques and take-down holds. We conducted active shooter training during this cycle as well as recertification for Tasers. Our firearms training moved from quarterly to every two months starting in October of 2015. We are incorporating more decision making and moving scenarios to broaden the officers' understanding of when and how to appropriately utilize their firearm. It is our belief that more time on the range will result in a less likelihood for an improper firearm response in a citizen contact. We added a new tool to our option pool this past year when we gave officers the choice of carrying a Taser or a new style of pepper gun.This weapon replaces both the Taser and the pepper spray canister with a much more potent formula of spray.The pepper guns do not use aerosol to mist the product but delivers it with a burst like a projectile. It is therefore easier to use in close quarters as it only hits the person it is directed toward. It has the added advantage of looking like a Taser so the deterrence factor is still present. Vehicle Pursuit Report We had only one pursuit this year and there was an issue with how it was conducted. A counselling session was conducted with the two involved officers to correct the deficiency. 401 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2160 1 Fax: 817-478-6433 Part 1 Crimes We experienced a decrease in Part 1 Crimes in 2015 over 2014.The numbers indicate that we experienced 232 crimes, down from 260 in 2014. Much of this reduction is the result of fewer thefts reported last year.As is always the case, property crimes account for the majority of Part 1 offenses. Interestingly, I was able to track our thefts for this year to determine the prevention potential. I found that of the 106 incidents representing 108 crimes, 57 were completely preventable while 10 others were the result of poor security. Most of the preventable crimes involved citizens leaving valuables in unlocked vehicles overnight while parked outside of a residential garage.These valuables range from wallets/purses to electronics to firearms.Several of the vehicles were locked but the property was left in plain view so that the thief knew that breaking the window would result in easily obtainable property. We could easily cut our theft numbers in half if residents would simply not leave property in unsecured vehicles and locations. Our clearance rate for Part 1 offenses was 31%. Other Activity We handled 27,619 calls for service last year.These are not all dispatched calls but are activities that require officer action to complete. Our call-for-service numbers include dispatched calls,traffic stops, building and property checks, and citizen contacts. Of the 54 assaults last year,43 were simple assaults that involved threats,offensive contact, or did not involve bodily injury. Officers responded to 187 domestic violence complaints, 224 accidents calls, 689 alarms, and handled 28 DWI arrests.There were 1,694 reports generated as well as 2,698 citations issued off of 4,206 traffic stops. Our average response time to all calls was 3.47 minutes (3 minutes,28 seconds). i Kennedale Police Department g r i I VNNE ICE Use of Force i �s. ,tg Analysis 2015 Use of Force Analysis for 2015 This analysis was conducted for the purpose of reviewing the Kennedale Police Department's Use of Force for calendar year 2014. The Kennedale Police Department takes its obligations seriously to provide the most effective and efficient police service with the least adverse impact on our citizens. The Kennedale Police Department is committed to protecting the rights of all persons and in using force only when necessary, and to the extent necessary, to achieve legal objectives. This analysis is conducted each year to comply with Texas Law Enforcement Best Practice 6.10 and to attempt to identify methods for reducing the number of incidents and the inherent risks involved. Officers are trained by the department to use only the level of force necessary to bring a person under control and complete a legal objective. Police/citizen encounters can however, change instantly, and officers may be required to react quickly in using force to subdue a resisting subject. While officers prefer to escalate their level of force in an orderly manner in order to use the lowest level possible, the response of a subject may limit that ability and force officers to use whatever level of force is immediately available to protect themselves and the public. Use of Force Reporting Requirements Texas Law Enforcement Best Practice 6.03 and Kennedale Police Department General Order 6.3, requires a written report to be completed anytime an officer uses force. Officers must identify the force used by each officer involved, suspect actions, reason for the contact, and any injuries. The officer's report must indicate the use of force from empty hand control to the use of deadly force. The officers must include less-lethal or non-lethal weapons. The officers also must report any vehicle pursuits as a use of deadly force. The officers also report any time their service firearm is pointed at a suspect. Each individual Use of Force Report is immediately reviewed by the Officer's Supervisor, and through the Chain of Command to the Chief of Police. At the time of the incident, the Use of Force is reviewed to ensure the use was appropriate and within the guidelines of Department Policy and Law. If the officer used force inappropriately, a departmental investigation is required and the officer may receive additional training or in some cases discipline up to and including termination from employment. This analysis is not intended to determine if an officer acted inappropriately, but to identify department wide trends that may suggest changes in policy, training, equipment or supervision. Use of Force Comparison 2014/2015 There were a total of 4 Reported Uses of Force this year compared to last year. This represents a difference of-10. There were a total of 11,586 citizen contacts this year (calls for service, arrests, citations,field interviews, and other contacts) which creates an index of only one Use of Force for every 0.0034 citizen contacts. The individual Use of Force incident is attached in attachment A. Use of force incidents were down from 26 in 2013 to 16 in 2014. Use of Force 2014 2015 Difference Physical Control 4 2 -2 OC Spray 0 0 0 Impact Weapon 0 0 0 Non/Less Lethal 0 0 0 ECD Use "TASER" 0 0 0 TASER Display 1 2 +1 Other 0 0 0 Firearm Discharge 0 0 0 Firearm Pointed at subject 9 1 -8 Vehicle Pursuits 2 1 -1 TOTAL 16 6 -10 There was a decrease of physical control force in 2015. The decrease can be accounted for more officers involved with the call for service verses one officer calls for service. I was unable to see any unusual behavior or patterns. There was a decrease in firearms pointed at the suspect. There are several contributions that can affect this use of force. The most common is where multiple officers are involved in one incident. Individual Officer Use of Force In 2015, 7 officers were involved in use of force situations. These officer's actions were reviewed by the department for appropriateness. While each individual use of force is reviewed immediately after the event to ensure it is in compliance with department policy and law, patterns of behavior can also indicate the need for additional training or supervision. Officers can have significantly different rates in their use of force depending on the crime activity in the part of the city where they are assigned,their type of assignment, the time of day they work and their experience level. The department has three patrol shifts. Day shift (7am-3pm) had 1 use of force incident. Evening shift (3pm-11pm) had no use of force incidents. Night shift (11pm-7am) had 3 use of force incidents. Physical Control In 2015, Kennedale Police Officers used physical control two times during incidents they were assigned to deal with. Included in the category are all those incidents requiring only physical force to complete handcuffing or bring a resisting subject under control. If physical control was insufficient to bring the individual under control and a higher level of force was used, that incident is reported in the highest level used by the officers. In the two instances this year, physical control was sufficient to bring the person under control. Included in this category are all those instances where simple use of or issuance of verbal commands was not sufficient or effective. It includes those instances where officers place their hands on a subject and use more force than simply a strong grip, must forcibly handcuff a person,the use of pressure point control tactics or other soft hand techniques. This category also includes taking the person to the ground in order to forcible handcuff. In one incident the officer was force to use empty hand control to prevent the suspect from hurting herself. The suspect has a history of mental illness and wanted to commit suicide by walking out into Kennedale Parkway traffic. The officer grabbed the suspect's arm to prevent her from escaping in to the traffic. When the officer grabbed her arm she began to fight with the officer trying to escape. The officer was able to subdue her and prevent any harm to her or others. She was transported to JPS for mental evaluation. The second incident involved two officers were dispatched to a resident in reference to a disturbance. The disturbance involved about five people. The owner of the resident had asked two visitors to leave due to being extremely intoxicated and causing the disturbance. Once the officers arrived on scene the two that was asked to leave arrived back at the residence. One of the suspects that were asked to leave became belligerent and caused another disturbance. Officers could smell a strong odor of an alcoholic substance. When the officers were asking questions the suspect became upset and began using profane language and yelling at the officers. The officers decide to make an arrest for the public intoxication. The suspect began to resist the officers.The officers displayed a Taser in an attempt to control the suspect. That attempt did not work and used empty hand control. The suspect started resisting during the handcuffing. The officers were not able to control the suspect in a safe manner and decided to place the suspect on the ground to control his movements. Once the suspect was controlled they placed the suspect in the patrol unit where he continued to resist and spit at the officers. C Pepper Spray In 2015, Kennedale Police Officers did not use department issued Oleoresin Capsicum (OC) spray chemical agent during an arrest or other incident. Oleoresin Capsicum is a chemical compound derived from various pepper plants and is mixed with a propellant that is used by many law enforcement agencies as a less-lethal alternative to higher and more injury producing levels of force. The chemical spray is usually directed at a resisting subject's face and the spray immediately causes a burning of the eyes, nose, and mouth causing the subject to close their eyes and in most cases stops any physical resistance. The burning will usually dissipate within 30 minutes and most often has no long term after effects. Included in the category are those incidents where OC Spray was the highest level of force needed to complete handcuffing or bring a resisting subject under control. If the use of OC Spray was insufficient to bring the individual under control and a higher level of force was used, that incident is reported in the highest level used by the officers. Also included in this category are all those instances where simple use of or issuance of verbal commands was not sufficient or effective and may include other instances where other lower levels of force were used but were ineffective in resolving the issue. Impact Weapons / Baton In 2015, Kennedale Police Officers did not use department issued impact weapon during an arrest or other incident. Impact weapons include the use of the department issued ASP Baton,the use of a closed fist or any other implement that was used to deliver a strike to a person. The department issues and trains officers in the use of the collapsible baton. Training is provided to instruct officers in the proper placement of strikes that will temporarily stun an opponent allowing the officer time to complete handcuffing. Batons tactics training provided by the department avoids the use of any strikes directed at the head of an individual. If an officer does not have the time or opportunity to deploy the ASP or other less-lethal options, officers may have to defend themselves with their bare hands. If closed fist strikes were required then those instances are reported in this category. Included in the category are those incidents where an impact weapon was the highest level of force needed to complete handcuffing or bring a resisting subject under control. If the use of an impact weapon was insufficient to bring the individual under control and a higher level of force was used, that incident is reported in the highest level used by the officers. Also included in this category are all those instances where simple use of or issuance of verbal commands was not sufficient or effective and may include other instances where other lower levels of force were used but were ineffective in resolving the issue. Less Lethal Weapon In 2015, Kennedale Police Officers did not use department issued less lethal Weapons during an arrest or other incident. The department has a number of less lethal munitions available that can be fired from specially designed firearms that are designed to inflict surprise, pain or trauma that is less severe than the use of deadly force. These less lethal munitions include pepper-ball munitions fired from guns similar to paintball guns. While these rounds are designed to be less lethal than regular firearms, they are still able to cause significant damage to an individual and as such are used only as a last resort when time and opportunity permit. Included in the category are those incidents where a non/less lethal weapon was the highest level of force needed to bring a subject under control. If the use of OC Spray was insufficient to bring the individual under control and a higher level of force was used, that incident is reported in the highest level used by the officers. Electronic Control Device In 2015, Kennedale Police Officers deployed but did not discharge department issued Electronic Control Device during an arrest or other incident. Electronic Control Devices, commonly called Tasers, are pistol type devices that fire two small darts that are designed to imbed themselves in the skin or clothing of a resisting or combative suspect. The darts are connected to the device by small flexible wires which transmit a short 5 second high voltage/low amperage charge through the darts. This causes disruption of muscle activity and is accompanied by pain which most often temporarily disables the individual There are usually no long term side effects of the use of the device on healthy individuals. The Kennedale Police Department trains their officers in the proper and appropriate use of Electronic Control Devices and has policies designed to only allow it use against active aggression toward officers and not in cases of passive non-compliance or as punishment of any kind. Included in the category are those incidents where the use of an ECD was the highest level of force needed to bring a subject under control. If the use of an ECD was insufficient to bring the individual under control and a higher level of force was used,that incident is reported in the highest level used by the officers. In one instance this year, the mere threat of the use of an ECD was sufficient to bring the person under control during a traffic stop occurring from a road rage incident. The driver complied after the officer gave commands. The other incident is the same as the physical force used against the intoxicated person. Which did not affect to incident physical force was used to control the suspect. Firearms In 2015, Kennedale Police Officers did not discharge their firearms during an arrest or other incident. Officers did display their weapon one time during 2015 without further use of force. Firearms are by definition Deadly Force, and their use is very restricted. Officers must comply with not only their intensive training, but with the department's Deadly Force Policy and state law. When an officer fires their weapon in the line of duty, whether or not an individual is hit, a detailed investigation is undertaken to determine if that use was in compliance with both policy and law. Citizen and Internal Complaints Regarding the Use of Force During 2015, the Kennedale Police Department received no complaints of unnecessary or inappropriate use of force. Recommendations Based on the findings during the analysis,the use of force was used correctly and reported. I recommend we continue to train our use of force and deadly force policy with each use of force training we do. Chief of Police Date W bO z C: C O w Q Q Q z z z C: O Q U U U J O M z > > > z LLLL } z z z o C aE c a� m D ui O 4- o N u 41 O - a C: a uj c LA u _ E -a r-1 :.c O OLL v 1 L N E LL LU �n V L LL W O u LL LL d ci d m Q of O r LL O i U .V v 0 a co 41 -° c c N N j5 CL c z a u \ o a LLI Q C �j 'a a\1 O v c N d z 0) oc n @ cu 0 0 cu cr- .X O C r-i rl.l T--1 V-4 H O O O O C14 N C14 Q m m Ln 00 00 00 KENNEDALE Police Department www.cityofkennedale.com January 14, 2016 Ap To: Chief Tommy Williams I From: Captain D. Hull Ref: 2015 Annual Pursuit Report Chief Williams, During the 2015 year we had one motor vehicle pursuit reported. The pursuit required an internal investigation. The LA was investigated by me. There were three officers involved in the pursuit. Only two officers violated the pursuit policy. The two officers pursued the suspect vehicle for a traffic violation and pursued the suspect the wrong way on a one way roadway. Both officers were disciplined for the policy violation. The officers involved in the 2015 pursuit were also involved in the 2014 pursuit where policies were violated. After reviewing 2014 and 2015 pursuits the common denominator was the officer pursued for a traffic violation. With both incidents I had one on one training with the officer over the pursuit policy. In 2015,we added use of force and pursuit policy training with firearms annual training and inspection. During the training I make myself available for any questions over the policies. The training seems to be a good reminder for all employees,Even though we had a pursuit after the training, I believe the officers recognized the violation and terminated the pursuit. 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I. Subject: Consider approval of minutes from January 18, 2016 meeting II. Originated by: III. Summary: Please see the attached minutes for your approval. IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: Approve VII.Alternative Actions: VIII.Attachments: Fl----Fc—itY Council Meeting Minutes -January 18, 2016 Panuary 18, 2016. df 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 )c KENNEDALE You're Here,Your Home www.cityofkennedale.com KENNEDALE CITY COUNCIL MINUTES REGULAR MEETING January 18, 2016 CITY HALL COUNCIL CHAMBERS, 405 MUNICIPAL DRIVE WORK SESSION - 5:30 PM REGULAR SESSION - 7:00 PM I. CALL TO ORDER Mayor Johnson called the meeting to order at 5:35 p.m. II. WORK SESSION *NOTE: Pursuant to Section 551.071, Texas Government Code, the City Council reserves the right to adjourn into Executive Session at any time during the work session or the regular session to discuss posted executive session items or to seek legal advice from the City Attorney on any item posted on the agenda. A. Joint Work Session to discuss the Uniform Development Code with the Planning and Zoning Commission and LSL Planning, Inc. representatives Planning and Zoning Commission Present: Stephen Brim, Thomas Pirtle, Billy Gilley, Jeffrey Whitacre Absent: Ernest Harvey, Carolyn Williamson, Harry Browne LSL Planning Representative Paul Leblanc met with the Planning and Zoning Commission, City Council and staff to discuss the Uniform Development Code project. Mr. Leblanc presented a blueprint for the project, noting that it will be the framework used to move forward. He stated that LSL has reviewed current regulations, including zoning ordinances and land regulations. Additionally, he provided a general overview of the project, stating that the next step is to prepare a working draft ordinance. He emphasized that the following goals of the ordinance is to be more user-friendly by making it predictable, flexible, organized, with concise wording, and using clearly defined criteria, streamlined procedures, graphics, drawings, and tables. The overview continued with a breakdown and recommendation for each section of the blueprint. There was discussion concerning the need to have a well-defined ordinance to eliminate loopholes; yet flexible enough to encourage creativity. In concluding, Mr. Leblanc stated that the Unified Development Code should have at least a 5-year life span. III. REGULAR SESSION Mayor Johnson opened the regular session at 7:00 p.m. IV. ROLL CALL 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 Present: Frank Fernandez, Brian Johnson , Kelly Turner, Liz Carrington, Charles Overstreet, Michael Walker Absent: None V. INVOCATION Greg Adams, Pastor of Covenant Life Baptist Church gave the invocation. VI. UNITED STATES PLEDGE VII. TEXAS PLEDGE "Honor the Texas Flag; I Pledge Allegiance to Thee, Texas, One State under God; One and Indivisible." VIII. VISITOR/CITIZENS FORUM At this time, any person with business before the Council not scheduled on the agenda may speak to the Council. No formal action can be taken on these items at this meeting. There was no one present requesting to speak. IX. REPORTS/ANNOUNCEMENTS In addition to any specific matters listed below, the city council may receive a report about items of community interest, including but not limited to recognition of individual officials, citizens or departments, information regarding holiday schedules, upcoming or attended events, etc. A. Updates from City Council Councilman Kelly Turner informed the group that he attended the January meeting for the Emergency Preparedness Planning Council (EPPC); he stated that the State of Texas has issued $1.8 million to be used mainly for police and fire programs. Kelly added that he was hopeful that Kennedale would see some regional funding. B. Updates from the Mayor There were no updates from the Mayor. C. Updates from the City Manager There were no reports or announcements from the City Manager. X. MONITORING INFORMATION A. Monthly Financials - November and December 2015 B. Executive Limitations C. Ends Review - Balanced Scorecard Monitoring information updates are in the agenda packet for review. XI. INCIDENTAL ITEMS A. Review and accept the Police Department 2015 Racial Profiling Report Page 2of7 Police Chief, Tommy Williams stated that this is the annual report for the State and everything looked to be in order. Motion To approve the 2015 Racial Profiling Report. Action Approve, Moved By Charles Overstreet, Seconded By Liz Carrington. Motion passed Unanimously B. Review the Charter Review Committee report and consider directing staff to call an election City Manager Bob Hart stated that we appointed a Committee to review and make recommendations for Charter amendments; there are five (5) broad areas to be reviewed: • Appointment of the City Secretary • Changing Council terms from 2 years to 3 years • Dates for submittal of budget • Dates for submittal of the audit • Vacancy of offices Bob added that the City Attorney, Wayne Olson reviewed the Committee's recommendations and made adjustments and recommended a change to the definition of a Council quorum. Continuing, Bob stated that the Charter Amendment Election must be called by the end of February and ballot language will have to be submitted to Tarrant County. City Attorney, Wayne Olson provided Council with a brief overview of the recommended amendments. There was discussion concerning the change of term lengths for Mayor and Council. Mayor Johnson stated that one advantage to changing term lengths is it provides time for a learning curve; however, the City will still have an election every year. Councilman Overstreet added that this provides Councilmembers the opportunity to get comfortable with the governance model. Discussions continued on the additional amendments. Mayor Johnson stated that best practice standards recommend that City's review their charters every 5-year and we have never done this. Councilman Fernandez asked how many amendments will be on the ballot. Bob Hart stated that there will be six amendments. Motion To authorize staff to move forward to call an Election for Charter Amendments. Action Approve, Moved By Kelly Turner, Seconded By Charles Overstreet. Motion passed Unanimously XII. REQUIRED APPROVAL ITEMS (CONSENT) All matters listed under required approval items (consent) have been previously discussed, require little or no deliberation, or are considered to be routine by the council. If discussion is desired, then an item will be removed from the consent agenda and considered separately. A. Consider approval of minutes from December 14, 2016 meeting B. Consider adopting Resolution 475, amending authorized representatives of TEXPOOL local government investment pool C. Consider adopting Resolution 476, amending authorized representatives of Texas short term asset reserve program (TEXSTAR) local government investment pool D. Consider adopting Resolution 477, amending authorized representatives of Texas Page 3of7 Term/Texas Daily local government investment pool E. Consider authorizing the city manager to execute a contract with Linebarger, Goggan, Blair, and Sampson, LLP to collect delinquent taxes for the City F. Authorize filing a statement of correction with the Tarrant County Clerk's Office correcting errors made in a plat abandonment recorded in D214210746 and approve abandonment of a portion of the Swiney Estates plat. G. Approval of beer and wine sales at the Brickworks Festival H. Approve Schedule of Investment Activity for quarter ending December 31, 2015 Motion To approve all Incidental Items on (Consent) agenda. Action Approve, Moved By Charles Overstreet, Seconded By Liz Carrington. Motion passed Unanimously XIII. DECISION ITEMS A. CASE # PZ 15-13 Public hearing and consideration of approval of Ordinance No 587 regarding a request by Kennedale Economic Development Corporation for a zoning change from "AG" Agricultural to "PD" Planned Development zoning district for single family residential use for that approximately 8-acre portion outside the floodplain of an approximately 15.6 acre tract, belonging to Ethel Swiney and located in the David Strickland Survey A-1376, Tarrant County, Texas. The property is mostly located east of the former Williamson Drive as shown on the plat abandonment recorded in Tarrant County Clerk's instrument number D214210746. Addresses include 1201, 1305, & 1307 Bowman Springs Rd. 1. Staff presentation 2. Applicant presentation 3. Public Hearing 4. Applicant response 5. Staff response and summary 6. Action by the City Council City Planner, Rachel Roberts provided the staff presentation to approve Ordinance 587 regarding a request by the Economic Development Corporation (EDC) for a zoning change from "AG" to "PD" for approximately 8 acres located in the David Strickland Survey. Rachel stated that the property is currently zoned agricultural and is located across from the Southwest Nature Preserve. Property Owner, Ethel Swiney would like to sell the property to the EDC; however, the EDC is only interested in the floodplain area and are currently in partnership with the developer for this rezoning case. This request applies only to the portion of the 15-acres tract outside the floodplain area. Rachel added that the Planning and Zoning Commission (P&Z) considered this request in November 2015, and asked the developer to make some changes to the proposed Ordinance with clarification and additional controls. The developer implemented the requested changes and brought the case back to P&Z in December 2015; whereas, additional changes have since been made. The final proposed Ordinance is being presented tonight and the Planning and Zoning Commission recommends approval. Page 4of7 Rian Maguire and Ryan Hill with CHC Development provided the applicant's presentation. Mr. Maguire presented a power point presentation with a brief summary of the proposed highlights for the development. The development will consist of 35 lots with HOA and Architectural Controls, along with fencing standards, landscaping requirements, and a HOA maintained park. There was discussion by Council and staff concerning emergency access and the potential builder. Rachel stated that currently the Fire Department is not concerned with access issues and if anything changes in that regard, it can be addressed during the platting process. Additionally, she informed the Council that a builder has not been selected at this point, which is way P&Z required so many controls. Public Hearing: Mayor Johnson opened the public hearing; there was no one present requesting to speak. Mayor Johnson closed the public hearing. Motion To approve Ordinance 587 as written. Action Approve, Moved By Charles Overstreet, Seconded By Kelly Turner. Motion passed with a vote of 4-1; with Frank Fernandez voting against approval. B. CASE # PZ 15-16 Public hearing and consideration of approval of Ordinance 588 regarding a city-initiated rezoning from "C-2" General Commercial District to "AG" Agricultural District on a 29.43 acre lot located at 3925 Kennedale New Hope Rd., legal description of Joel Snider Survey A1448 Tr 1A. 1. Staff presentation 2. Public hearing 3. Staff response and summary 4. Action by the City Council City Planner, Rachel Roberts provided the staff presentation. She stated that this is the property that was the former Cowtown Speedway which closed in 2012 and has been vacant ever since. Last year Council directed staff to initiate rezoning the property from Commercial to AG. She added that the future Land Use Plan shows this as Neighborhood which is intended to be primarily residential. Because this area is in transition and there is a lot of opportunity for development, staff does not want to assign a specific residential zoning district to this property at this time. AG zoning is for places in transition, and will help the family who is currently there to utilize the property for agricultural use and possible tax breaks until they decide what they are going to do with the property. The Planning and Zoning Commission consider this Ordinance at their December 2015 meeting and held a Public Hearing in which one resident spoke in favor of approval. The Planning and Zoning Commission and staff recommend approval. Public Hearing: Mayor Johnson opened the public hearing; there was no one present requesting to speak. Mayor Johnson closed the public hearing. Motion To approve Ordinance 588 regarding city-initiated rezoning at 3925 Kennedale New Hope Road. Action Approve, Moved By Liz Carrington, Seconded By Charles Overstreet. Motion passed Unanimously Page 5of7 C. Present recommended rate schedule and approve Water and Sewer Rates Ordinance 589 effective for bills paid in March. City Manager Bob Hart stated that the City appointed a Rate Committee to work on this project, along with Consultant Carolyn Marshall and City Finance Director Krystal Crump. Bob noted that Committee members Adrienne Kay and Carl Hall were in attendance. Consultant Carolyn Marshall stated that the City's current position is based on the FY2016 adopted budget, which has a water revenue shortage of $893,046 and a sewer revenue shortage of $1,045,543. The current structures in place depend heavily on volume rates (variable/usage), which is 72% of revenues. Additionally, fixed costs are not being covered by base rates, currently only 28% is being covered. Carolyn continued with a summary of how the base rate and tier system works. She noted that weather and conservation rates impact the amount of variable costs collect each month, which can result in less revenue received to cover fixed costs. Finance Director Krystal Crump reviewed the two options brought forward to Council for review, noting that the Committee did not consider Option 1 to be feasible. She added that after much discussion and review the Committee agreed to recommend approval for Option 2. Option 2 recommends an increase of the fixed water rates by approximately 50% and adds a fourth tier to water volumes. It will increase the fixed sewer rates by 100% and adds an Industrial Class with a volume rate of $4.90. Option 2 will generally decrease the volume rate for water and sewer. There was a lengthy discussion regarding the proposed increases and the need to better communicate what is going on in the City. Motion To approve Option 2 of Ordinance 589 approving water and sewer rates. Action Approve, Moved By Kelly Turner, Seconded By Charles Overstreet. Motion passed with a vote of 4-1; with Frank Fernandez voting against approval. XIV. EXECUTIVE SESSION Mayor Johnson recessed into executive session at 9:07 p.m. A. The City Council will meet in closed session pursuant to Section 551.072 of the Texas Government Code to deliberate the purchase, exchange, lease, or value of real property for the following: 1. 5401 High Ridge Road 2. 5400 and 5404 Kennedale Road B. The City Council may meet in closed session at any time during the work session or the regular session, pursuant to Section 551.071 of the Texas Government Code for consultation with the City Attorney pertaining to any matter in which the duty of the City Attorney under the Texas Disciplinary Rules of Professional Conduct may conflict with the Open Meetings Act, including discussion on any item posted on the agenda and the following items: 1. Floodplain amortization and remediation 2. Land use amortization (6727 Hudson Village Cemetery Road) 3. Municipal setting designation (MSD) Page 6of7 4. Corp of Engineers Section 205 CAP land acquisition parameters 5. Eminent domain with environmental cleanup guidelines XV. RECONVENE INTO OPEN SESSION, AND TAKE ACTION NECESSARY PURSUANT TO EXECUTIVE SESSION, IF NEEDED Mayor Johnson reconvened into open session at 9:36 p.m. No action required. XVI. ADJOURNMENT Motion To adjourn the January 18, 2016 regular City Council meeting. Action Adjourn, Moved By Liz Carrington, Seconded By Michael Walker. Motion passed Unanimously The meeting was adjourned at 9:37 p.m. APPROVED: ATTEST: Brian Johnson, Mayor Leslie Galloway, City Secretary Page 7of7 KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: REQUIRED APPROVAL ITEMS - B. I. Subject: Consider approval of Resolution 480 calling the General Election for May 7, 2016 II. Originated by: III. Summary: The City of Kennedale has elected to contact with Tarrant County for general election purposes. There have been no changes to the contract with Tarrant County since it was made in 2010. Dates of importance for the 2016 general election include: January 20, 2016 First day for filing for place on the ballot. February 19, 2016 Deadline to file for place on ballot (must be received by 5:00 pm). February 23, 2016 Deadline to file for write-in candidate (must be received by 5:00 pm). February 25, 2016 Drawing for place on ballot at 2:00 p.m. in City Secretary's office. February 26, 2016 Last day for a candidate to withdraw (must receive in writing by 5:00 pm). March 23, 2016 First day to mail early voting ballots. April 7, 2016 Last day to register to vote in the May 7, 2016 General Election. April 25, 2016 First day for early voting by personal appearance. Early voting will be conducted April 25 through May 2, 2016 in the Kennedale Community Center, 316 W. 3rd Street, Kennedale, Texas. April 26, 2016 Last day to receive an application by mail for a ballot to be voted by mail. May 2, 2016 Last day for early voting by personal appearance. May 7, 2016 ELECTION DAY 7:00 am to 7:00 pm at the Kennedale Community Center. May 10-18, 2016 Period for official canvass of returns and oaths of office of newly elected officers, unless runoff is necessary. June 18, 2016 Runoff Election, if necessary. IV. Fiscal Impact Summary: 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 V. Legal Impact: VI. Recommendation: Approve VII.Alternative Actions: VIII.Attachments: 1. Resolution 480 lResolution 480.doc RESOLUTION NO. 480 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF KENNEDALE, TEXAS, CALLING FOR A GENERAL ELECTION TO BE HELD ON MAY 7, 2016; APPROVING A JOINT ELECTION WITH TARRANT COUNTY; AND ESTABLISHING PROCEDURES FOR THAT ELECTION; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Kennedale, Texas, (the "City") is a home rule city acting under its charter adopted by the electorate pursuant to Article XI, Section 5 of the Texas Constitution and Chapter 9 of the Local Government Code; and WHEREAS, the regular election for City Council of the City of Kennedale is required to be held on May 7, 2016, at which time the voters will elect persons to fi I I the office of Mayor and City Council Races 2 and 4; and WHEREAS, the election will be held as a joint election, conducted under the authority of Chapter 271 of the Texas Election Code; and WHEREAS, by this Resolution, it is the intention of the City Council to designate a polling place for the election, to appoint the necessary election officers to establish and set forth procedures for conducting the election, and authorize the Mayor to execute a contract with Tarrant County for conducti ng the el ecti on. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCI L OF THE CITY OF KENNEDALE, TEXAS, THAT: Section 1. General Election Called. An election is hereby cal I ed to elect Mayor and City Council Races 2 and 4 to serve from May of 2016 until May of 2018 or until their successors are duly elected and qualified. The election shall be held on May 7, 2016 between the hours of 7:00 a.m. and 7:00 p.m. at Kennedale Community Center, 316 W. 3rd Street, Kennedale, Texas 76060. Section 2. Joint Election Agreement Approved. The Joint Election Agreement for Tarrant County and the City of Kennedale(the"Agreement") and incorporated herein for al purposes is hereby approved and the Mayor is authorized to execute the Agreement. In the event of conflict between this resolution and the Agreement, the Agreement shal I control. Section 3. Application for Place on Ballot. Qualified persons may file as candidates by filing applications in the office of the City Secretary from 8:00 am. to 5:00 p.m., Monday through Friday, from January 20, 2016 through February 19, 2016. Section 4. Early Voting. a. Early voting by personal appearance. Early voting by personal appearance shall be conducted beginning April 25, 2016, and continue through May 2, 2016 at the Kennedale Community Center, 316W. 3rd Street, Kennedale, Texas 76060 at thefollowing times: 1 of 4 M onday, Apri 125, 2016 8:00 am.—5:00 p.m. Tuesday, April 26, 2016 8:00 am.—5:00 p.m. Wednesday, Apri 1 27, 2016 8:00 am.—5:00 p.m. Thursday, Apri 128, 2016 8:00 am.—5:00 p.m. Friday,April 29, 2016 8:00 am.—5:00 p.m. Saturday, Apri 130, 2016 7:00 am.—7:00 p.m. Sunday, May 1, 2016 11:00 am.—4:00 p.m. M onday, M ay 2, 2016 7:00 am.—7:00 p.m. Tuesday, May 3, 2016 7:00 am.—7:00 p.m. b. Early voting by mail. Frank Phillips, the Tarrant County Election Administrator ("Election Administrator") is hereby designated as Early Voting Clerk for the general election. Applications for early voting by mail may be delivered to the Election Administrator at the following address. Early Voting Clerk, P.O. Box 961011, Fort Worth, Texas 76161-0011, not later closeof business on April 26, 2016. a Early Voting Ballot Board. Early voting, both by personal appearance and by mail, shall be canvassed by the Early Voting Ballot Board established by Tarrant County under the terms of the Agreement. Section 5. Appointment of Election Judge and Alternate Election Judge, The Presiding Election Judge and Alternate Presiding Judge shall be appointed by Tarrant County as authorized by Chapter 271 of the Code. Section 6. Method of Voting. The Hart InterCivic eSlate (Direct Recording Electronic Voting System) shall be used for voting by personal appearanceand on Election Day the Hart InterCivic eSlate(Direct Recording Electronic Voting System) and Hart InterCivic eScan (Optical Scan Voting System) shall be used. The City Council hereby adopts the Hart I nterCi vi c eS1 ate D RE for early voting and the Hart I nterCi vi c eS1 ate DRE and Hart InterCivic eScan for Election Day. All expenditures necessary for the conduct of the election, the purchase of materials therefore, and the employment of all election officials are hereby authorized, and shall be conducted in accordance with the Election Code. Section 7. Governing Law and Qualified Voters. The election shall be held in accordance with the Consti tuti on of the State of Texas and the Code, and al I resi dent qual i f i ed voters of the Ci ty shal I be el i gi bl a to vote at the el ecti on. Section 8. Publication and Posting of Notice of Election. Notice of the election shall be given as required by Chapter 4 of the Code. Section 9. Submissions to the United States Justice Department. Tarrant County is authorized to make such submissions as are necessary to the United States Justice Department to seek pre-clearance for any changes i n voting practices as authorized by the Voti ng Rights Act of 1965, as amended. 2 of 4 Section 10. Necessary Actions. The Mayor and the City Secretary of the City, in consultation with the City Attorney, are hereby authorized and directed to take any and all actions necessary to comply with the provisions of the Code in carrying out and conducting the election, whether or not expressly authorized herei n. Section 11. Runoff Election. Shoul d a runoff el ecti on be requi red fol I owi ng the canvass of the M ay 7, 2016 el ecti on, the Counci I hereby orders that a runoff el ecti on be hel d on Saturday June 18, 2016. The pot I i ng pl ace on El ecti on Day for the runoff el ecti on shal I be at the same pot I i ng pl aces as those of the on gi nal el ecti on and the hours of voti ng shal I be between 7:00 am. and 7:00 p.m. Section 12. Effective Date. This resol ution shall be effective upon its adoption. PASSED AND APPROVED this 15th day of February, 2016. APPROVED: Mayor, BrianJohnson ATTEST: L esl i e Gal I oway, Ci ty Secretary APPROVED ASTO FORM AND LEGALITY: Wayne K. Olson, City Attorney 3 of 4 KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: DECISION ITEMS-A. I. Subject: Consider approval of Resolution 478 supporting OM Housing's application for housing tax credit for the proposed Village at Hammack Creek project II. Originated by: III. Summary: OM Development has expressed an interest in developing a mixed use development (The Village at Hammack Creek) on an 16-acre site at the intersection of Kennedale Parkway and Sublett Road. Such a development is consistent with the City's adopted comprehensive land use plan. The proposed development would include approximately 150 apartment units (Villas at Hammack Creek) and a combination of retail and office space. Typical apartment financing in today's market is through the tax credit program. For example, the recent apartment construction on Lancaster Avenue, and the Historic Electric Building Apartments in downtown Fort Worth were both funded through the tax credit program. Tax credit financing is in no way similar to the Section Eight Program (which is being phased out). The strength of the tax credit program is that the owner must manage the units for a period of not less than 20 years and the purchasers of the tax credits actually become partners in the project. Common tax credit purchasers include Google, Apple, and other fortune 500 companies. Earlier apartment financing was done with FHA loan guarantees and received a bad reputation because apartment developers would build and flip them to new owners. To avoid this pitfall, the tax credit program was designed to require long-term ownership. Further, the owners place stringent application and management requirements to ensure quality tenants. Actually, these apartments are more difficult to access than purchasing a new home. Moreover, multi-family housing is the housing preference for many millennials, and this product would meet that need that is currently not met in the city. The proposed project will be a LEED Certified structure, the first such sustainable structure in Kennedale. During the preparation of the Comprehensive Land Use Plan, the P&Z discussed the desirability to extend the Old Town District and TownCenter design elements across Kennedale parkway. It is contemplated the P&Z will prepare a Community Revitalization Plan to accomplish this vision and provide development guidelines for the Village at Hammack Creek. This proposed project will bring much needed density to the area to help with retail development in the "downtown" area of Kennedale. OM Development has requested a resolution of support. The resolution would permit the application with the state to proceed in its review; it does not give city approval to the project. If the resolution is approved, the developer will then be required to apply for a rezoning of the site, and the City Council would have authority to approve or deny the rezoning request, which would include architectural and site design feature in keeping with the character of the TownCenter. The City Council will also have the authority to negotiate a city-developer agreement at the platting stage. If the zoning change and the city-developer agreement are not approved by City Council, the project cannot go forward. IV. Fiscal Impact Summary: V, Legal Impact: 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 VI. Recommendation: VII.Alternative Actions: VIII.Attachments: 1. Housing Development Site Housing Resolution Development Site. df 2. Letter from Texas Department of Housing & Community letter to mayor from TDCHA.pdf ffairs 3. Resolution 478 R478. df General Location of Proposed Development (not confirmed) Cn LU I- LU Of a CLOVERLANE o m 0 ry HILLTOP Q LU w � / > w � U j I ` I CGS � Jam„ 3RD 1 OP 1 4TH J ` , a ♦ I U 5TH z w Y Mq BROADWAY Cn A e� MANSFIELD 0 300 600 Feet Ep Texas Department of Housing and Community Affairs Multifamily Finance Division Notification of Submission of Affordable Housing Applications January 20, 2016 The Honorable Brian Johnson Mayor of Kennedale 405 Municipal Drive Kennedale,TX 76060 Re: Notification of Affordable Rental Housing Application(s)Proposed in Your City Dear Mayor Johnson: j The Texas Department of Housing and Community Affairs(the"Department")is in receipt of a preliminary applications)for possible funding through the Competitive Housing Tax Credit Program to develop or acquire affordable multifamily rental housing in your community. This notification is made in accordance with§2306.1114,Texas Government Code,to ensure that you are fully informed of the housing activity in your district and so that you can provide input on the proposed applicatiori The Department greatly values your views concerning the need for affordable rental housing within your community and how the proposed developments)may address that need. Should the applicant(s)submit a full application to the Department on or before [date],the Department will notify you again with more detailed information about the proposed development and provide instructions of how and when to submit public comment should you choose to participate in the process. The Department's mission is to administer its assigned programs efficiently,transparently,and lawfully and to invest its resources strategically and develop high quality affordable housing which allows Texas communities to thrive.. Through our rental production programs,the Department encourages the new construction or rehabilitation of affordable multifamily housing,primarily through private developers. These developments benefit Texans in your community by providing potential employment, local tax revenue, and affordable,safe,and high quality housing for eligible households. If you have any questions or need additional information,please contact the Multifamily Director,Maim Holloway at 512.475.1676. Sincerely, ma"-t' Marni Holloway Director,Multifamily Finance y E' f♦ OPWHNHfrY TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS 221 East 11th Street,Austin,TX 78701 Main Number:512-475-3800 Email:info @tdhca.state.tx.us PO Box 13941,Austin,TX 78711 Toll Free:1-60525-0657 Web:www.tdhca.state.tx.us Equal Opportunity FrrployerlProgram.Auxiliary aids and services are availahla upon requestto individuals with disabilities. Relay Texas:800-735-2989(TTY)and 711(Voice). Relevant Development Information as Presented by the Applicant: Project Number: 16309 I Development Name: Villas at Hammack Creok Development Address Kennedale Pkwy and 5ublett Rd Development City: Kennedale Development Zip: 76060! Region: 3i Regional Allocation: !Urban Target Population: General Set Aside: ❑ Nonprofit ❑ USDA [] At-Risk ............... Construction Type: New Construction Credit!Funding Request: $1,500,000 Total Low Income Units 120; Total Market Rate Units: _30: Total Units: 150 Applicant Information: Owner Contact: Deepak Sulakhe ! Owner Address: 7328 Mimosa Lane Owner City: Dallas Owner State: TX Owner Zip: F 5230 Owner Phone: (214)432-7610 Owner Email: dsulakhe cmhousing.com `'? o"WRY-F TEXAS DEPARTMENT OF HOUSING AND COMMUNITYAFFA)RS 221 East 11th Street,Austin,TX 78701 Main Number:512-475-3808 Email:info @tdhca.state.tx.us PO Box 43941,Austin,TX 78711 Tali Free:1-880-525-0657 Web:www.tdhca.state.tx.us Equal Opportunity Employer/Program.AuAlary a€ds and services are available upon requestte individuals with disabilities. Relay Texas:800-735-2989(TTY)and 711(Voice). Resolution No. 478 City of Kennedale Resolution Supporting OM Housing's Application for Housing Credits for the proposed Village (and Villas) at Hammack Creek project WHEREAS, OM Housing, LLC, has proposed The Village at Hammack Creek - a mixed use development for high quality, eco-friendly, retail, office, and approximately 152 rental apartments (to be known as Villas at Hammack Creek, TDHCA 9 16309) at 1337 Kennedale Parkway in City of Kennedale; and WHEREAS, the naming of the proposed project as "Hammack" is reflective of Kennedale history—D. J. A. Hammack and the tributary located on the site; and WHEREAS, OM Housing, LLC, intends to submit an application to the Texas Department of Housing and Community Affairs (TDHCA) for 2016 Housing Credit Program to partially finance the development of Villas at Hammack Creek; and WHEREAS, The Village at Hammack Creek project will be required to comply with all City zoning and site development regulations/standards, prior to issuance of any building permits; and WHEREAS, the proposed Village at Hammack Creek will be required to be consistent with the Downtown Village Revitalization Plan, and be architecturally compatible with the TownCenter. Additionally, Villas at Hammack Creek will be a LEED certified facility. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KENNEDALE,TEXAS: This resolution affirms the City of Kennedale's acknowledgement and support of the application for the Village (and Villas) at Hammack Creek subject to the provisions noted in the preamble. This resolution also affirms that as provided for in 10 Texas Administrative Code §11.3(b), it is expressly acknowledged and confirmed that the City of Kennedale has more than twice the state average of units per capita supported by Housing Tax Credits or Private Activity Bonds and That the City of Kennedale has voted specifically to support the application for the Development and to authorize an allocation of Housing Tax Credits for the Development pursuant to Texas Government Code §2306.6703(A)(4). PASSED AND APPROVED by the City Council of the City of Kennedale, Texas, on this 15`h day of February,2016. Brian Johnson,Mayor Attest: Leslie Galloway, City Secretary KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: DECISION ITEMS- B. I. Subject: Conduct a Public Hearing to consider authorizing funding participation with Tarrant County Community Development and Housing for the 42nd Year Community Development Block Grant (CDBG) Project for sanitary sewer improvements on Dick Price Road II. Originated by: III. Summary: The City participates in the Community Development Block Grant (CDBG) program administered by Tarrant County. Eligible projects must be in census tracts where the majority of the residents are low/moderate income households. The Public Hearing is to identify potential project for water, sewer, street and draining improvements. IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: VII.Alternative Actions: VIII.Attachments: 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: DECISION ITEMS- C. I. Subject: Consider approval of Resolution 482 authorizing funding participation with Tarrant County Community Development and Housing for the 42nd Year Community Development Block Grant (CDBG) Project for sanitary sewer improvements on Dick Price Road II. Originated by: III. Summary: The City participates in an annual Public Works project that is funded, in part, by a HUD Community Development Block Grant (CDBG) and administered by Tarrant County. As part of the application process, the County requires the City to authorize the project and pledge any funds that may exceed the HUD grant for the design and construction. The recommended 2016 (42nd year CDBG) project is the sanitary sewer rehabilitation in the 200-300 block of Dick Price Road. The project includes the reconstruction of 1400 LF of existing 6" sanitary sewer and manholes with 8" PVC and HDPE. Construction shall be a combination of open cut and pipe burst. The estimated Engineering and Construction cost of the project is $213,640 and the City's participation and matching amount is estimated at$48,640. IV. Fiscal Impact Summary: The 2015-2016 Water Utility budget includes up to $100,000 for the purposed construction project. V. Legal Impact: VI. Recommendation: Approve VII.Alternative Actions: VIII.Attachments: 1. Resolution 482 JR482.pdf 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 RESOLUTION NO. 482 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF KENNEDALE, TEXAS AUTHORIZING FUNDING PARTICIPATION WITH TARRANT COUNTY COMMUNITY DEVELOPMENT AND HOUSING FOR THE 42ND YEAR COMMUNITY DEVELOPMENT BLOCK GRANT PROJECT FOR SANITARY SEWER IMPROVEMENTS WITHIN THE CITY OF KENNEDALE, TEXAS AND PROVIDING AN EFFECTIVE DATE WHEREAS, in the City Council meeting of February 15, 2016, the City Council of the City of Kennedale approved the 42nd Year Community Development Block Grant Project (CDBG) to rehabilitate 1,400 linear feet of sanitary sewer lines and manholes for the 200-300 Blocks of Dick Price Road, in the City of Kennedale; and WHEREAS, the budget for the project approved on January 15, 2016 reflected an estimated construction cost in the amount of $213,648.00 with the City of Kennedale pledging funds in the amount of$48,640.00; and WHEREAS, the City funds have been budgeted in the 2015/2016 fiscal year budget and will be utilized for project costs in excess of the CDBG funds available for the project. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KENNEDALE,TEXAS: SECTION 1. That all matters stated in the preamble of this resolution are true and correct and are incorporated herein as if copied in their entirety. SECTION 2. That this resolution shall be effective upon its passage. PASSED,ADOPTED AND APPROVED by the City Council of the City of Kennedale, Texas, this the 15th day of February, 2016. APPROVED: Mayor, Brian Johnson ATTEST: City Secretary, Leslie Galloway KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: DECISION ITEMS- D. I. Subject: Consider approval of Ordinance 590 calling a Charter Amendment Special Election for May 7, 2016 II. Originated by: III. Summary: The city council appointed a charter review committee to review the City's charter. The committee members were John Clark, Robert Mundy, Earnest Harvey, Ray Cowan, Frank Fernandez, and Charles Overstreet. The committee met several times over a two month period and made the recommendations below. The recommendations have been reviewed by the city attorney and formatted into an ordinance calling for an election on May 7tn Provision 1. Section 3.06 Vacancies and Forfeiture of Office (a) Vacancies. The office of a Council member or Mayor shall become vacant upon the death, resignation, forfeiture of office, or removal from office in any manner authorized by law or by this Charter. (1) Vacancies on the City Council for offices with three year terms shall be filled as provided in this subsection. If a vacancy occurs in the office of the Mayor at a time when there remains an unexpired term of twelve (12) months or less, it shall be filled by the Mayor Pro Tem. If a vacancy occurs in any other City Council position at a time when there remains an unexpired term of twelve (12) months or less, including a position if vacated by the Mayor Pro Tem, it shall be filled by appointment by a majority vote of all of the remaining Council members. If a vacancy occurs in the office of the Mayor or any City Council position at a time when more than twelve (12) months remains on the unexpired term, it shall be filled by a majority vote of the qualified voters at a special election called for such purpose within one hundred twenty (120) days. (2) Vacancies on the City Council for offices with two year terms shall be filled as provided in this subsection. The City Council may call a special election or by a majority vote of all remaining Council Members appoint a qualified person to fill the vacancy. (b) Forfeiture of Office. A Council member shall forfeit office if the member: I 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 (1) Lacks at any time during the term of office any qualification for the office prescribed by law or by this Charter; (2) Violates any express prohibition of this Charter; (3) Is convicted of a felony or any offense involving moral turpitude while in office; or (4) Fails to attend three (3) consecutive scheduled meetings without valid excuse, or fails to maintain an eighty (80) percent attendance record, excluding excused absences, for each elected year (including all scheduled budget and special meetings). (c) Declaration. Upon finding the occurrence of a condition of forfeiture, the Council must declare a vacancy at its next regular meeting and shall fill the vacancy as set forth in this Charter. (d) Qualifications. The Council shall be the judge of the qualifications of its members and for these purposes shall have the power to subpoena witnesses and require the production of records, but the decision of the Council in any case shall be subject to review by the courts. Ballot language Proposition No. 1 —Vacancies in Office Shall Section 3.06 of the Kennedale Home Rule Charter be amended to provide if a vacancy occurs in a three year term of office of the Mayor or any City Council Member at a time when more than twelve (12) months remains on the unexpired term, it shall be filled through a special election; and if twelve (12) months or less remains on the expired term of the Mayor it shall be filled by the Mayor pro tem; and if twelve (12) months or less remains on the unexpired term of a City Council Member it shall be filled by appointment by a majority vote of the remaining City Council Members; and if a vacancy occurs in a two year term of office, it may be filled by a special election or appointment? Provision 2 & 4. Section 4.01 City Council Places and Terms (a) The City Council shall be divided into the Mayor and places 1, 2, 3, 4 and 5. Each position shall be filled by a qualified citizen from the City who is elected at large by a majority vote cast by qualified voters. (b) Each place shall be for a two year term through the election in 2016. (c) The Mayor shall be elected for a one year term in 2018 and the Mayor shall thereafter be elected for a three year term beginning in 2019. (d) Council members for places 1 and 3 shall be elected for three year terms beginning in 2017. (e) Council members for places 2 and 4 shall be elected for three year terms beginning in 2018. (f) The Council member for place 5 shall be elected for a two year term in 2017 and shall thereafter be elected for a three year term beginning in 2019. Ballot language Proposition No. 2 — Forfeiture of Office Shall Section 3.06 of the Kennedale Home Rule Charter be amended to allow the City Council to determine if a condition of forfeiture, as set forth in the Charter, exists for creating a vacancy in the office of a City Council Member? Proposition No. 4 — City Council Places and Terms Shall Section 4.01 of the Kennedale Home Rule Charter be amended to provide, beginning with the general election in 2017, for the Mayor and City Council Members to be elected for three (3) year terms and to provide for the transition from two (2) year terms to three (3) year terms? Provision 3. Section 3.08 Meeting Procedure (a) Meeting. The City Council shall meet in regularly scheduled City Council meetings at least once each month at such times as the members may prescribe by rule. Special meetings may be called on the request of the Mayor or three (3) City Council members. All City Council meetings shall be held at City Hall or at such place in the City that will permit the attendance of the general public. All City Council meetings and all sessions of the City Council and committees of the City Council shall be open to the public; however, the City Council may recess for the purpose of discussing in a closed or executive session those matters permitted by State Law, including, but not limited to: (1) Pending or contemplated litigation, settlement offers, and any other legal advise. (2) The acquisition or disposal of real property. (3) Personnel matters. (4) The evaluation of candidates for offices appointed by the City Council. (b) A motion calling for a closed or executive session must be made in a public meeting and must state the general subject to be discussed. No final action or vote with regard to any matter considered in a closed meeting shall be made except in a public meeting. (c) Rules and Minutes. The City Council shall determine its own rules and order of business, and shall provide for keeping minutes of all its proceedings. The minutes shall be a public record. The record of votes shall be recorded in the minutes of the City Council. (d) Quorum. Three (3) members of the City Council shall constitute a quorum. The Mayor's presence shall not be counted for determining a quorum. Ballot language Proposition No. 3 — Meeting Procedure Shall Section 3.08 of the Kennedale Home Rule Charter be amended to provide that the Mayor's presence shall not be counted for determining a quorum? Provision 5. Section 5.06 City Secretary The City Council shall appoint the City Secretary by a majority vote. The City Council shall only appoint a person recommended by the City Manager. The City Manager may appoint such assistant city secretaries as the City Council may authorize. The City Secretary shall be the clerical officer of the City Council, and shall keep the minutes, agenda, ordinances, attendance record, and other official records of the City Council and the City. The City Secretary shall be the custodian of the official seal of the City, and shall have such other duties and powers prescribed in this Charter and by the City Council. In addition to the responsibilities stated in this Charter, the City Manager may designate administrative duties to be performed by the City Secretary. Ballot language Proposition No. 5 — City Secretary Shall Section 5.06 of the Kennedale Home Rule Charter be amended to provide for the City Council to appoint a City Secretary upon recommendation by the City Manager and to allow the City Manager to appoint assist city secretaries as the City Council may authorize? Provision 6. Section 6.02 Budget (a) Submission of the budget. On or before the fifteenth day of August of each year, the City Manager shall submit to the City Council a balanced budget for the ensuing fiscal year to meet the goals and objectives of the City Council and provide a budget message. Ballot language Proposition No. 6 — Budget Shall Section 6.02 of the Kennedale Home Rule Charter be amended to provide for the City Manager to submit a balanced budget to the City Council on or before August 15th of each year? Provision 7. Section 6.04 Annual Audit The City Council, by a majority vote of the entire Council, shall select and shall contract with a municipally oriented certified public accounting firm for the purpose of rendering an independent audit of all accounts and other financial records of the City government. The personnel of the firm conducting the audit shall not hold any public office in the City nor have any personal interest, direct or indirect, in the fiscal affairs of the City government or any of its offices. After completion of any audit of the City, the auditor shall prepare a report, and shall submit the report to the City Council, within one hundred eighty (180) days after the end of the fiscal year. The City shall provide copies to the public at cost, upon request. Ballot language Proposition No. 7 —Audit Shall Section 6.04 of the Kennedale Home Rule Charter be amended to require the submission of an annual audit by an independent certified public accounting firm to the City Council no later than one hundred eighty (180) days after the end of the fiscal year? IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: VII.Alternative Actions: VIII.Attachments: 1. Ordinance 590 10rdinance 590.doc ORDINANCE NO. 590 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF KENNEDALE, TEXAS, CALLING A SPECIAL ELECTION TO BE HELD ON MAY 7, 2016, FOR THE PURPOSE OF SUBMITTING CHARTER AMENDMENTS TO THE VOTERS; PROVIDING AN ESTIMATE OF ANTICIPATED FISCAL IMPACT; PROVIDING FOR NOTICE OF THE ELECTION; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Kennedale, Texas, is a home rule city acting under its charter adopted by the electorate pursuant to Article XI, Section 5 of the Texas Constitution and Chapter 9 of the Local Government Code; and WHEREAS, it is the desire of the City Council to call a special election to submit proposed amendments to the City Charter to the voters in accordance with Section 9.004 of the Local Government Code; and WHEREAS, Section 9.004(b) of the Local Government Code requires the election to be held on a uniform election date; and WHEREAS, Section 41 .001 of the Election Code establishes the first Saturday in May as a uniform election date, and the City Council has determined that date sufficient in time to comply with the requirements of the law. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF KENNEDALE, TEXAS: SECTION 1 CHARTER AMENDMENT ELECTION CALLED The City Council does hereby, on its own motion, order a special election to submit to the voters of the City of Kennedale proposed amendments to the City Charter. The proposed amendments to the City Charter are set forth in Exhibit "A" attached to this ordinance and incorporated herein for all purposes and are hereby approved by the City Council for submission to the voters. The election shall be conducted according to the laws of the State of Texas, and shall be held on Saturday, May 7, 2016, from 7:00 a.m. to 7:00 p.m. SECTION 2 BALLOTS The official ballots for the election shall be prepared in accordance with the Election Code so as to permit the electors to vote "Yes" or "No" on the propositions, with the ballots to contain such provisions, markings, and language as required by law, and with the propositions to be expressed substantially as set forth in Exhibit "B" attached hereto and incorporated herein for all purposes. SECTION 3 POLLING PLACES Voting shall be conducted on Election Day between the hours of 7:00 a.m. and 7:00 p.m. at the following voting places: County Precincts Election Day Polling Location SECTION 4 ELECTION PROCEDURES Procedures for this special election shall be established by a separate resolution. SECTION 5 FISCAL IMPACT If the charter amendments in this ordinance are approved at the election, it is estimated that there will be no fiscal impact on the City. SECTION 6 SEVERABILITY CLAUSE It is hereby declared to be the intention of the City Council that the phrases, clauses, sentences, paragraphs, and section of this ordinance are severable, and if any phrase, clause, sentence, paragraph or section of this ordinance shall be declared unconstitutional by the valid judgment or decree of any court of competent jurisdiction, such unconstitutionality shall not affect any of the remaining phrases, clauses, sentences, paragraphs, and sections of this ordinance, since the same would have been enacted by the City Council without the incorporation in this ordinance of any such unconstitutional phrase, clause, sentence, paragraph or section. SECTION 7 NOTICE (a) A copy of this ordinance shall be posted not later than the 21St day before the election on the bulletin board used for posting notices of meetings of the City Council. Notice of the election, including a Spanish translation thereof, shall be published at least once, not earlier than the 30th day nor later than the 10th day before the election in a newspaper of general circulation in the City of Kennedale. (b) Additionally, in accordance with Section 9.004(c) of the Local Government Code, notice of the election shall be published in a newspaper of general circulation in Kennedale on the same day, in each of two consecutive weeks, with the first publication occurring before the 14th day before the election day. The notice shall contain a substantial copy of the proposed amendments and shall include an estimate of the anticipated fiscal impact to the City if the amendments are approved. SECTION 8 EFFECTIVE DATE This Ordinance shall be in full force and effect from and after approval. PASSED AND APPROVED ON THIS 151h DAY OF FEBRUARY, 2016. Mayor ATTEST: City Secretary APPROVED AS TO FORM AND LEGALITY City Attorney EXHIBIT "A" Proposed Charter Amendments Section 3.06 Vacancies and Forfeiture of Office (a) Vacancies. The office of a Council member or Mayor shall become vacant upon the death, resignation, forfeiture of office, or removal from office in any manner authorized by law or by this Charter. (1) Vacancies on the City Council for offices with three year terms shall be filled as provided in this subsection. If a vacancy occurs in the office of the Mayor at a time when there remains an unexpired term of twelve (12) months or less, it shall be filled by the Mayor Pro Tem. If a vacancy occurs in any other City Council position at a time when there remains an unexpired term of twelve (12) months or less, including a position if vacated by the Mayor Pro Tem, it shall be filled by appointment by a majority vote of all of the remaining Council members. If a vacancy occurs in the office of the Mayor or any City Council position at a time when more than twelve (12) months remains on the unexpired term, it shall be filled by a majority vote of the qualified voters at a special election called for such purpose within one hundred twenty (120) days. (2) Vacancies on the City Council for offices with two year terms shall be filled as provided in this subsection. The City Council may call a special election or by a majority vote of all remaining Council Members appoint a qualified person to fill the vacancy. (b) Forfeiture of Office. A Council member shall forfeit office if the member: (1) Lacks at any time during the term of office any qualification for the office prescribed by law or by this Charter; (2) Violates any express prohibition of this Charter; (3) Is convicted of a felony or any offense involving moral turpitude while in office; or (4) Fails to attend three (3) consecutive scheduled meetings without valid excuse, or fails to maintain an eighty (80) percent attendance record, excluding excused absences, for each elected year (including all scheduled budget and special meetings). (c) Declaration. Upon finding the occurrence of a condition of forfeiture, the Council must declare a vacancy at its next regular meeting and shall fill the vacancy as set forth in this Charter. (d) Qualifications. The Council shall be the judge of the qualifications of its members and for these purposes shall have the power to subpoena witnesses and require the production of records, but the decision of the Council in any case shall be subject to review by the courts. Section 3.08 Meeting Procedure (a) Meeting. The City Council shall meet in regularly scheduled City Council meetings at least once each month at such times as the members may prescribe by rule. Special meetings may be called on the request of the Mayor or three (3) City Council members. All City Council meetings shall be held at City Hall or at such place in the City that will permit the attendance of the general public. All City Council meetings and all sessions of the City Council and committees of the City Council shall be open to the public; however, the City Council may recess for the purpose of discussing in a closed or executive session those matters permitted by State Law, including, but not limited to: (1) Pending or contemplated litigation, settlement offers, and any other legal advise. (2) The acquisition or disposal of real property. (3) Personnel matters. (4) The evaluation of candidates for offices appointed by the City Council. (b) A motion calling for a closed or executive session must be made in a public meeting and must state the general subject to be discussed. No final action or vote with regard to any matter considered in a closed meeting shall be made except in a public meeting. (c) Rules and Minutes. The City Council shall determine its own rules and order of business, and shall provide for keeping minutes of all its proceedings. The minutes shall be a public record. The record of votes shall be recorded in the minutes of the City Council. (d) Quorum. Three (3) members of the City Council shall constitute a quorum. The Mayor's presence shall not be counted for determining a quorum. Section 4.01 City Council Places and Terms (a) The City Council shall be divided into the Mayor and places 1, 2, 3, 4 and 5. Each position shall be filled by a qualified citizen from the City who is elected at large by a majority vote cast by qualified voters. (b) Each place shall be for a two year term through the election in 2016. (c) The Mayor shall be elected for a one year term in 2018 and the Mayor shall thereafter be elected for a three year term beginning in 2019. (d) Council members for places 1 and 3 shall be elected for three year terms beginning in 2017. (e) Council members for places 2 and 4 shall be elected for three year terms beginning in 2018. (f) The Council member for place 5 shall be elected for a two year term in 2017 and shall thereafter be elected for a three year term beginning in 2019. Section 5.06 City Secretary The City Council shall appoint the City Secretary by a majority vote. The City Council shall only appoint a person recommended by the City Manager. The City Manager may appoint such assistant city secretaries as the City Council may authorize. The City Secretary shall be the clerical officer of the City Council, and shall keep the minutes, agenda, ordinances, attendance record, and other official records of the City Council and the City. The City Secretary shall be the custodian of the official seal of the City, and shall have such other duties and powers prescribed in this Charter and by the City Council. In addition to the responsibilities stated in this Charter, the City Manager may designate administrative duties to be performed by the City Secretary. Section 6.02 Budget (a) Submission of the budget. On or before the fifteenth day of August of each year, the City Manager shall submit to the City Council a balanced budget for the ensuing fiscal year to meet the goals and objectives of the City Council and provide a budget message. [Paragraphs (b) through (g) remain unchanged.] Section 6.04 Annual Audit The City Council, by a majority vote of the entire Council, shall select and shall contract with a municipally oriented certified public accounting firm for the purpose of rendering an independent audit of all accounts and other financial records of the City government. The personnel of the firm conducting the audit shall not hold any public office in the City nor have any personal interest, direct or indirect, in the fiscal affairs of the City government or any of its offices. After completion of any audit of the City, the auditor shall prepare a report, and shall submit the report to the City Council, within one hundred eighty (180) days after the end of the fiscal year. The City shall provide copies to the public at cost, upon request. EXHIBIT "B" Ballot Language Proposition No. 1 —Vacancies in Office Shall Section 3.06 of the Kennedale Home Rule Charter be amended to provide if a vacancy occurs in a three year term of office of the Mayor or any City Council Member at a time when more than twelve (12) months remains on the unexpired term, it shall be filled through a special election; and if twelve (12) months or less remains on the expired term of the Mayor it shall be filled by the Mayor pro tem; and if twelve (12) months or less remains on the unexpired term of a City Council Member it shall be filled by appointment by a majority vote of the remaining City Council Members; and if a vacancy occurs in a two year term of office, it may be filled by a special election or appointment? Proposition No. 2 — Forfeiture of Office Shall Section 3.06 of the Kennedale Home Rule Charter be amended to allow the City Council to determine if a condition of forfeiture, as set forth in the Charter, exists for creating a vacancy in the office of a City Council Member? Proposition No. 3 — Meeting Procedure Shall Section 3.08 of the Kennedale Home Rule Charter be amended to provide that the Mayor's presence shall not be counted for determining a quorum? Proposition No. 4 — City Council Places and Terms Shall Section 4.01 of the Kennedale Home Rule Charter be amended to provide, beginning with the general election in 2017, for the Mayor and City Council Members to be elected for three (3) year terms and to provide for the transition from two (2) year terms to three (3) year terms? Proposition No. 5 — City Secretary Shall Section 5.06 of the Kennedale Home Rule Charter be amended to provide for the City Council to appoint a City Secretary upon recommendation by the City Manager and to allow the City Manager to appoint assist city secretaries as the City Council may authorize? Proposition No. 6 — Budget Shall Section 6.02 of the Kennedale Home Rule Charter be amended to provide for the City Manager to submit a balanced budget to the City Council on or before August 1511 of each year? Proposition No. 7 —Audit Shall Section 6.04 of the Kennedale Home Rule Charter be amended to require the submission of an annual audit by an independent certified public accounting firm to the City Council no later than one hundred eighty (180) days after the end of the fiscal year? KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: DECISION ITEMS- E. I. Subject: Consider approval of Resolution 479 authorizing TCAP to negotiate an extension to the current electric supply agreement and approving TCAP contracting with Next Era and authorizing the City Manager to sign an electric supply agreement II. Originated by: III. Summary: This is the resolution for TCAP to negotiate an extension for 2018-2022 to the current electric supply agreement ending in 2017. We also received a proposal from Texas Energy, but due to the City's load factor option B with the TCAP rates provide stability for our load factor with low rates. IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: VII.Alternative Actions: VIII.Attachments: 1. Resolution 0160215 RESOLUTION 479-Authorizing TCAP to negotiate an electric supply 479 fagreement.docx 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 RESOLUTION 479 A RESOLUTI ON OF TH E CI TY COUNCI L OF TH E CI TY OF KENNEDALE, TEXAS, AUTHORIZING THE TEXAS COALITION FOR AFFORDABLE POWER, INC. (TCAP) TO NEGOTIATE AN ELECTRIC SUPPLY AGREEMENT FOR FIVE YEARS FOR DELIVERIES OF ELECTRICITY EFFECTIVE JANUARY 1, 2018; AUTHORIZING TCAP TO ACT AS AN AGENT ON BEHALF OF THE CITY TO ENTER INTO A CONTRACT FOR ELECTRICITY; AUTHORIZING CITY MANAGER TO EXECUTE AN ELECTRIC SUPPLY AGREEMENT FOR DELIVERIES OF ELECTRICITY EFFECTIVE JANUARY 1, 2018 AND COMMITTING TO BUDGET FOR ENERGY PURCHASES IN 2018 THROUGH 2022 AND TO HONOR THE CITY'S COMMITMENTS TO PURCHASE POWER FOR ITS ELECTRICAL NEEDS IN 2018 THROUGH 2022 THROUGH TCAP 1. WHEREAS, the City of Kennedale, Texas(City) is a member of Texas Coalition For Affordable Power, Inc. (TCAP), a non-profit, political subdivision corporation dedicated to securing electric power for its more than 170 members in the competitive retai I market; and 2. WHEREAS, TCAP has unique rights under Texas law to negotiate directly in the wholesale market and arrange separate contracts for power supply and retail services which provides TCAP leverage to achieve contract provisions that single city negotiations with a Retail Electric Provider (REP) would be unlikely to produce; and 3. WHEREAS, TCAP's geographic diversity across all four ERCOT zones produces an aggregated peak load that is lower than the total of individual peak loads of the individual TCAP members, allowing price benefits in the wholesale market that are not likely to be avai I abl e to any given TCA P membered one; and 4. WHEREAS, TCAP and its predecessor organizations, Cities Aggregation Power Project, Inc. (CAPP) and South Texas Aggregation Project, Inc. (STAP), negotiated favorable contract terms that resulted in rebates from the wholesale supplier and reasonable commodity prices for delivered electricity since 2002 resulting instable budgets for electricity for members; and 5. WHEREAS, commodity prices for electricity experienced significant volatility between 2002 and 2009, with prices ranging from 4 cents to over 13 cents per kWh, causing CAPP and STAP members to welcome a five year contractual commitment that came close to cutti ng the 2008 prices i n half, with that contract bei ng extended unti I December 31, 2017, with a negotiated price reduction of about 1 cent per kWh; and 6. WHEREAS, TCAP has become a forceful voice for consumer protections and market reform to benefit the public and well as cities and other political subdivisions; and 7. WHEREAS, TCAP is owned by its members and distributes monetary and other resources according to relative load size of members and is controlled by a 15 member Board of Directors, all of whom must be city employees of members who represent diversity in size and geography; and 8. WHEREAS, wholesale power prices within the deregulated Texas market are largely determined by the NYM EX gas futures prices for natural gas which are currently low and relatively stable, but which change dad Iy; and 9. WHEREAS, daily price changes require retail customers to execute a contract i mmediately upon recei pt of a favorable offer; and 10. WHEREAS, pursuant to Texas Local Government Code Section 252.022(x)(15) ex pendi tures f or electricity are exempt from competitive bidding requirements; and 11. WHEREAS, on any given day, TCAP is able to capture a favorable wholesale pricefor any period of time, comparableto or better than any given REP or broker; and 2 12. WHEREAS, TCAP intends to continue to contract with its current wholesale supplier, NextEra, because the relationship with NextEra is such that NextEra is willing, after it knows the size of a given load, to execute a contract at or below prescribed price and terms; and 13. WHEREAS, the City desires to execute a contract for electricity for the period beyond the expiration of its current contract on December 31, 2017, that locks-in favorable wholesale prices under oneof threedifferent supply options: Option 1 - fixed-price, full-requirements at a price not to exceed 4.1 cents per kWh for the North and West zones or 4.25 cents per kWh for the South and Houston zones; Option 2 - fixed price for on-peak hours and variable spot market prices for off-peak hours; Option 3 - block energy at a fixed price to cover the base load hours, a fixed price for solar energy to cover mid-day peak hours (approximately 10% of total load) and variable spot market pricesfor all remaining consumption; and 14. WHEREAS, TCAPwill allow members six weeks from receipt of this resolution to consider whether to participate in this second opportunity to contract for post-2017 electrical supply, and thereafter allow NextEra until June 30, 2016 to contact for power for five years at a price not to exceed 4.1 cents per kWh in the North and West zones and a price not to exceed 4.25 cents per kWh in the South and Houston zones for Option 1 , so long as the aggregated load for any of the three supply options reaches at least 50 megawatts; and 15. WHEREAS, wholesale suppliers demand assurance that TCAP will pay for all contracted load; and 16. WHEREAS, the City needs to assure TCAP that it will sign a Commercial Electric Supply Agreement (CESA) reflecting the contract extension and budget for energy 3 purchases for the post-2017 period and honor its commitment to purchase power for its electrical needsfor 2018 through 2022 through TCAP, THEREFORE, BE IT RESOLVED BY THE CI TY COUNCI L OF THE CI TY OF KENNEDALE, TEXAS: Section 1: That the TCAP Board of Directors and its consultants and advisors are agents authorized to negotiate for the City's electricity needs as a member of TCAP for the period 2018 through 2022 at a price not to exceed 4.1 cents per kWh for the North and West zones and a price not to exceed 4.25 cents per kWh in the Houston and South zones for supply Option 1; Section 2: The City prefers to participate in supply Option B with the following understanding: a) while supply Option 1 is a full-requirements, fixed-price option, Options 2 (fixed price on-peak, variable spot prices for off-peak usage) and 3 (fixed price for base load, fixed pri ce for a porti on of peak I oad, and vari abl e spot market for remai nder) have vari abl e price components and savings over Option 1 cannot be guaranteed, and b) if there is insufficient desire among members to achieve a 50 MW threshold for either Option 2 or 3, the member selecting the inadequately subscribed option will be placed in the Option 1 category. If no option is selected, TCAP will assume that a passed Resolution approves of Option 1. Section 3: Assuming this resolution is passed before February 25, 2016 and the combined load of TCAP members passing this resolution exceeds 50 megawatts for the preferred Option and NextEra is able to provide TCAP an opportunity prior to June 30, 2016 to contract for power to be delivered to members at a price not to exceed 4.1 cents per kWh for the North and West zones and not to exceed 4.25 cents per kWh in the Houston and South zones for supply Option 1 for the period January 1, 2018 through December 31, 2022, any one of the following individuals is hereby authorized to sign an electric supply agreement for the City withi n 24 hours of recei pt of a contract that has been approved and recommended by the TCAP Board of Directors: City Manager. Section 4: That the City will commit to purchase power to meet all of its electricity needs eligible for competition pursuant to the TCAP approved supply agreement and approve funds necessary to pay electricity costs proportionate to the City's load under the supply agreement (whether wholesale or retail) arranged by TCAP and signed by TCAP's Executive Director or President or other TCAP representatives authorized by the TCAP Board. 4 Section 5: That a copy of this resolution shall be sent to Jay Doegey, Executive Director, TCAP, 15455 Dallas Parkway, Suite 600, Addison, Texas 75001 and Geoffrey M. Gay, legal counsel to TCAPat 816 CongressAvenue, Suite 1900, Austin, Texas 78701. PASSED, ADOPTED AND APPROVED by the City Council of City of Kennedale1 Texas, this the 15th day of February 2016. Brian Johnson, Mayor ATTEST: L esl i e Gal I oway, Ci ty Secretary 5 KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: DECISION ITEMS- F. I. Subject: Consider acceptance of the 2015 Comprehensive Annual Financial Report (CAFR) II. Originated by: III. Summary: City Council to consider acceptance of the 2015 Comprehensive Annual Financial Report. IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: Approve VII.Alternative Actions: VIII.Attachments: 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 . ** % N EDA4 s % E'. EST. 1887 YOU'RE HERE ©YOUR HOME "t9 1 ♦ 1 r � • • 1 � • KENNEDALE You're Here, Your Home www.cityofkennedale.com COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF KENNEDALE, TEXAS YEAR ENDED SEPTEMBER 30, 2015 Prepared By: Department of Finance CITY OF KENNEDALE, TEXAS TABLE OF CONTENTS SEPTEMBER 30,2015 Page Ntimber INTRODUCTORY SECTION Letterof Transmittal ..................................................................................................... i—vi GFOA Certificate of Achievement............................................................................... vii OrganizationalChart................................... .............................................................. viii PrincipalCity Officials................................................................................................. ix FINANCIAL SECTION Independent Auditors' Report....................................................................................... 1 —3 Management's Discussion and Analysis ...................................................................... 4- 11 Basic Financial Statements Government-wide Financial Statements Statement of Net Position................................................................................. 12 Statement of Activities...................................................................................... 13 - 14 Fund Financial Statements BalanceSheet— Governmental Funds............................................................. 15 Statement of Revenues, Expenditures and Changes in Fund Balances— Governmental Funds .......................................................... 16 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statementof Activities................................................................................... 17 CITY OF KENNEDALE, TEXAS TABLE OF CONTENTS (Continued) SEPTEMBER 30,2015 Page Number FINANCIAL SECTION (Continued) Fund Financial Statements (Continued) Statement of Net Position—Proprietary Fund.................................................. 18 Statement of Revenues, Expenses and Changes in Fund Net Position—Proprietary Fund........................................................... 19 Statement of Cash Flows—Proprietary Fund................................................... 20 Notes to Financial Statements.................................................................................... 21 -46 Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance—Budget and Actual— GeneralFund................................................................................................. 43 Schedule of Changes in Net Pension Liability and Related Ratios........................... 48 Schedule of Contributions.......................................................................................... 49 Notes to Required Supplementary Information.................................................... .... 50 Combining Fund Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet................................................................................. 51 —52 Combining Statement of Revenues, Expenditures and Changesin Fund Balance............................................................................... 53 - 54 Schedule of Revenues, Expenditures, and Changes in Fund Balance—Budget and Actual— DebtService Fund......................................................................................... 55 CITY OF KENNEDALE, TEXAS TABLE OF CONTENTS (Continued) SEPTEMBER 30,2015 Table Page Number NL1111bC1' STATISTICAL SECTION (Unaudited) Net Position By Component.................................................................... 1 56 Change In Net Position............................................................................ 2 57-58 Fund Balances Governmental Funds....................................................... 3 59 Changes In Fund Balances Governmental Funds.................................... 4 60 - 61 Assessed Value and Estimated Actual Value of Taxable Property ......... 5 62 Direct and Overlapping Property Tax Rates............................................ 6 63 Principal Property Taxpayers................................................................... 7 64 Property Tax Levies And Collections...................................................... 8 65 Ratios Of Outstanding Debt By Type...................................................... 9 66 Ratios Of General Bonded Debt Outstanding.......................................... 10 67 Direct And Overlapping Governmental Activities Debt ......................... 11 68 Legal Debt Margin Information............................................................... 12 69 Pledged Revenue Coverage ...................................................................... 13 70 Demographic And Economic Statistics................................................... 14 71 Principal Employers................................................................................. 15 72 Fulltime Equivalent City Government Employees By Function............. 16 73 Operating Indicators By Function....................................................... 17 74 Capital Asset Statistics By Function/Program....................................... 18 75 THIS PAGE LEFT BLANK INTENTIONALLY INTRODUCTORY SECTION THIS PAGE LEFT BLANK INTENTIONALLY )c KENNEDALE You're Here,Your Home 405 Municipal Drive,Kennedale TX 76060 Ph:(817)478-5418 www.cityofkennedale.com February 1, 2016 Honorable Mayor and City Council, Citizens of Kennedale: The City of Kennedale (the "City") Financial Management Policies requires that the City's Finance Department prepare a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Accordingly, the Comprehensive Annual Financial Report for the City of Kennedale, Texas for the fiscal year ended September 30, 2015, is hereby issued. This report consists of management's representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making representations, the City has established a comprehensive internal control framework that is designed both to protect the City's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable, rather that absolute, assurance that the financial statements will be free from material misstatements. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City's financial statements have been audited by Pattillo, Brown and Hill LLP, Independent Certified Public Accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended September 30, 2015, are free of material misstatements. 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 a reasonable basis for rendering an unqualified opinion that the City's financial statements for the fiscal year ended September 30, 2015, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report. i GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of a Management's Discussion and Analysis (MD&A). The letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditor. PROFILE OF THE GOVERNMENT The City of Kennedale was incorporated in 1947. The City of Kennedale is a first tier suburb of Fort Worth and is located adjacent to Arlington in south Tarrant County. The City currently occupies a land area of 6.2 square miles and serves a population of 7,992. The City is empowered to levy property tax on both real and business personal properties located within its boundaries. It also is empowered by state statute to extend its corporate limits by annexation, which occurs periodically, when deemed appropriate by the city council. The City operates under a Council/Manager form of government with a City Council comprised of the Mayor and five Councilmembers. The term of office is two years with the terms of the Mayor and two of the Councilmembers' terms expiring in even- numbered years and the other terms of the three Councilmembers expiring in odd- numbered years. The City Council is responsible for enacting ordinances, resolutions, and regulations governing the City, as well as appointing the members of various statutory and advisory boards, the City Manager, City Secretary, and Municipal Judges. The City Manager is the chief administrative officer of the government and is responsible for the enforcement of laws and ordinances, the appointment and supervision of the executive directors, and heads of departments, and the performance of functions within the municipal organization. The City of Kennedale provides a full range of services including police, fire, emergency medical service, municipal court, library, parks, water distribution, wastewater collection, solid waste collection, curb-side recycling, streets, storm water drainage, community development (planning, code enforcement, and building inspection), and general administrative services. The financial reporting entity (the government) includes all funds of the primary government (i.e., the City of Kennedale as legally defined), as well as all of its component units. Component units are legally separate entities for which the primary government is financially accountable. Discretely presented component units are legally separate entities and not part of the primary government's operations. The Kennedale Economic Development Corporation (KEDC) is included in the financial statements as a discretely presented component unit. ii FACTORS AFFECTING FINANCIAL CONDITION The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Kennedale operates. Local Economy. After an election in July of 1947, the Town of Kennedale was incorporated with a population of 300 people. By 1950, the population had increased to 500 residents and a petition to the State of Texas was approved which changed the Township into a recognized City. Kennedale is becoming one of Tarrant County's fastest growing cities. Fronted by the major highways of I-20 and 287, the City provides an excellent location for major retail and professional businesses. This transportation corridor provides quick and easy access to the Dallas/Fort Worth Intercontinental Airport, downtown Fort Worth just 15 minutes to the west, and downtown Dallas just 20-25 minutes to the east. Furthermore, the City of Kennedale is within just a short drive to major entertainment venues including, but not limited to, Six Flags over Texas, Hurricane Harbor, Texas Motor Speedway, the Ballpark at Arlington, home of the Texas Rangers baseball team, and Cowboy Stadium, home of the Dallas Cowboys football team. Kennedale has experienced steady population growth in the last decade. Beautiful Village Creek slowly winds through the City and provides a tranquil feeling throughout the community. Current and future subdivisions are designed on oversized lots, which result in spacious residential areas that compliment the coveted rural setting. Currently, the City is 6.2 square miles with much of this land undeveloped. This allows for selective locations for the incoming developments and pulls the citizen away from the crowds and traffic congestion of a major metropolitan city. As the economy continues to grow and expand into North Texas, Kennedale will be an attractive choice for businesses and families alike. The Kennedale Economic Development Corporation (KEDC) was formed in 1996 to spearhead the economic growth of the City. The KEDC is funded by a voter approved, half cent sales tax, which is used to offer grants and other economic incentives to existing and new businesses. The KEDC is pursuing a four-pronged approach to economic development: land assembly and clearing for resell, manufacturing expansion, retail development and quality of life improvements. The redevelopment of the north entry into Kennedale (Oak Crest area) is in progress. A master plan has been adopted. Link Street to Kennedale Parkway was opened. The improved access has led to the development of a Popeye's and Burger King due to opened in early 2015. Other retail sites have been secured with development activity expected in 2016. The KEDC is also working with property owners in the area to develop their land. iii Accounting System and Budgetary Control. The City's accounting records for general government operations are maintained on a modified accrual basis, with the revenues being recorded when available and measurable and expenditures being recorded when the services or goods are received and the liabilities incurred. Accounting records for the City's utilities are maintained on the accrual basis. In developing and maintaining the City's accounting system, consideration is given to the adequacy of the internal control structure. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition; and (2) the reliability of financial records for preparing financial statements and maintaining accountability of assets. 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 evaluation of costs and benefits requires estimates and judgments by management. All internal control evaluations occur within the above framework. We believe that the City's internal controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. The annual budget serves as the foundation for the City of Kennedale's financial planning and control. All agencies of the City of Kennedale are required to submit requests for appropriation to the City Manager on or before June of each year. These requests are used to develop a proposed budget. The proposed budget is then presented to the City Council for review on or before August. The City Council is required to hold public hearings on the proposed budget and to adopt a final budget no later than September 30, the close of the City of Kennedale's fiscal year. The appropriated budget is prepared by fund, function (e.g. public safety), and department (e.g. police). Transfer of appropriations within a department and within funds may be made with approval from the City Manager. Transfers between funds or additional appropriation require the approval of the City Council. Budget-to-actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. Long-Term Financial Planning. CURRENT YEAR PROJECTS The City of Kennedale leveraged its resources by working with TxDOT and Tarrant County to enhance its transportation network. Sidewalks are being installed along Kennedale Parkway with completion by March 2016. The road projects are funded by the City purchasing road material, and the Tarrant County Precinct 2 road crews building the roadways. This approach allowed the city to construct a new section of Link Street so that it connects with Kennedale Parkway. Opening Link Street will enhance the opportunity for economic development at the north entry to Kennedale(Oak Crest area). iv An important element of the City's strategic plan—Imagine Kennedale 2015 was to close the racetracks and convert the property to residential use. The City began that process with an update of the Comprehensive Land Use Plan. The City created a Tax Increment Reinvestment Zone (TIRZ) to fund off-site infrastructure improvements, namely the extension of water and sewer service, reconstruction of New Hope Road, and the addition of hike and bike trails along Kennedale Branch. TIRZ participation agreements with Tarrant County, Tarrant College District, and the Tarrant County Health District were completed in 2013. The City has a development agreement is to convert the property following the 2016 racing season. A water and sewer study to plan for the extension of the utility services is complete. Council, Board, and staff activities are guided by the City's strategic plan — Imagine Kennedale 2015 — and the recently adopted Comprehensive Land Use Plan. These plans call for the creation of residential areas on the southwest portion of Kennedale. The TIRZ, noted earlier, will guide this effort. Redevelopment of Oak Crest will be a long- term effort, and it too is underway. Restoration of Village Creek as a park and water quality feature will consume staff time and resources for many years to come. Village Creek will require the assistance of the City of Arlington, the Corps of Engineers, the Trinity River Authority (TRA), the Tarrant Regional Water District, the University of Texas at Arlington (UTA), the Environmental Protection Agency (EPA), the Texas Commission on Environmental Quality (TCEQ), and the Texas Water Development Board (TWDB). A Section 205 Flood Control study by the US Army Corps of Engineers is underway with completion expected in October 2016. Water quality and sediment testing is being done through the UTA Engineering Department with guidance from TRA. This planning activity will be essential to the City's efforts to close a portion or all of the salvage yards located in the Village Creek floodplain. The City completed an Asset Management Plan with assistance from UTA and the Public Sector Digest. The plan will be used to help guide future council policy discussions. FUTURE PROJECTS Beyond physical improvements in Kennedale, there will continue to be a focus on operational efficiencies and strategic planning. The city council adopted the Policy Governance model espoused by Dr. John Carver. The governance model is enhanced with the focus on staff development following the management philosophy of the Requisite Organization, the Competing Values Framework, and the Ethical Climate Dimensions model. Transportation improvements for the year include the construction of Bloxom Park Road and the reconstruction of Caylebaite Street and True Gunn Street. The City will also pursue an access study of Kennedale Parkway through a corporative effort with TxDOT and NCTCOG. The study will be used to install a raised median in the Parkway rather than a continuous turn lane. V Efforts are underway to update the City's zoning ordinances. The draft of a unified development code will in completed in mid-2016. The City Council will initiate preliminary planning to update the City's strategic plan with a citizen opinion survey to be administered in the fall of 2016. RELEVANT FINANCIAL POLICIES The City continues to budget cautiously in regards to anticipated revenues due to the economy. The City was able to budget its revenue within a small variance and maintain responsibility in its expenditures resulting in a better than anticipated decrease in fund balance in the General Fund. However, this was still a decrease and the City will continue on with its current plans and has continued to monitor its budget responsibly. AWARDS AND ACKNOWLEDGEMENTS Awards. The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Kennedale for its CAFR for the fiscal year ended September 30, 2014. This was the eleventh consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgments. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Finance Department and our independent auditors. We would like to express our sincere appreciation to those persons who have made possible the publication of this report. We would also like to thank the mayor and the members of the City Council for their support in planning and conducting the financial operations of the City in a responsible and progressive manner. Respectfully Submitted, Bob Hart Krystal Crump City Manager Director of Finance & IT A Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Kennedale Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2014 *Ijpwo A Executive Director/CEO Vii CITY OF KENNEDALE, TEXAS ANNUAL PROGRAM OF SERVICES CITY ORGANIZATIONAL CHART Residents Boards City Council Commissions City Attorney City Manager Municipal Judge Community City Secretary/ Human Finance/Info Fire Police 7ficWorks Development Communication Resources Technology Planning/ Utility Billing Animal 4Water Permits Control Operations Permits Library L Streets/Parks Code Municipal Enforcement Court City Marshal "EXEMPLIFYING EXCELLENCE" Viii KENNEDALE CITY COUNCILMEMBER LISTING ELECTED OFFICIALS Mayor Brian Johnson Council Member Place 1 Charles Overstreet Council Member Place 2 Liz Carrington Council Member Place 3/Mayor Pro Tern Mike Walker Council Member Place 4 Kelly Turner Council Member Place 5 Frank Fernandez APPOINTED & KEY OFFICIALS City Manager Bob Hart City Secretary Kathy Moore Communications Coordinator Leslie Galloway City Attorney Taylor, Olson Adkins, Sralla &Elam, LLP Director of Finance & IT Krystal Crump Human Resources Director Kelly Cooper Police Chief Tommy Williams Fire Chief Mike Mcmurray Director Of Public Works Larry Ledbetter Director of Planning Rachel Roberts ECONOMIC DEVELOPMENT CORPORATION OFFICIALS Director Place 1 Michael Johnson Director Place 2 Pat Turner Director Place 3 Ronald Whitley Director Place 4 - President Robert Mundy Director Place 5 Adrienne Kay Director Place 6 Jon Mark Yeary Director Place 7 Rebecca Mowell ix THIS PAGE LEFT BLANK INTENTIONALLY FINANCIAL SECTION THIS PAGE LEFT BLANK INTENTIONALLY PATTILLO , BROWN & HILL, 1_. L . P _ CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS INDEPENDENT AUDITORS' REPORT To the Honorable Mayor, City Council and City Manager City of Kennedale, Texas Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of City of Kennedale, as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the City of Kennedale's basic financial statements 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 in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error. Auditors'Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 1 IIILI,SROI{I1, 'IX IIOIJS7'ON,TX WACO,TX /� I 191.671.6259 254.7 7 2.4901 A 1 15 tinulh Church til. 2 Ilill+boro.'I'cxux 76645 1114) GRANDE VALLEY,TX 254.582.2583 956.544.77711 ALRIJQUERQIJE, NM Governmental Audit TEMPLE, TX 505.266,3W4 Quality Center 254.791.346(1 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Kennedale, as of September 30, 2015, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Change in Accounting Principle As discussed in Note I to the financial statements, in 2015 the City adopted new accounting guidance, Governmental Account Standards (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions—an amendment of GASB Statement No. 27 and Governmental Account Standards (GASB) Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date—an amendment of GASB Statement No. 68. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, budgetary comparison information, schedule of changes in net pension liability and related ratios, and the schedule of contributions on pages 4 through 11 and 47 through 50 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 City of Kennedale's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. 2 The combining and individual norunajor fund financial statements and 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 combining and individual nonmajor fund financial statements and 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. Other Reporting Required by Government A uditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 1, 2016, on our consideration of the City of Kennedale's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Kennedale's internal control over financial reporting and compliance. Aa J J Hillsboro, Texas February 1, 2016 3 THIS PAGE LEFT BLANK INTENTIONALLY MANAGEMENT'S DISCUSSION AND ANALYSIS THIS PAGE LEFT BLANK INTENTIONALLY MANAGEMENT'S DISCUSSION AND ANALYSIS As management of the City of Kennedale, Texas, we offer readers of the City of Kennedale financial statements, this narrative overview, and analysis of the financial activities of the City of Kennedale for the fiscal year ended September 30, 2015. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal and the accompanying basic financial statements. FINANCIAL HIGHLIGHTS • The assets and deferred outflow of resources for the City of Kennedale exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $33,256,978. Of this amount, $232,907 (unrestricted net position) may be used to meet the City's ongoing obligations to citizens and creditors. • The City of Kennedale's net position increased by $549,665. This increase is due to an increase in capital grants and contribution, property taxes and other taxes. These changes were offset by decreased charges for services and increased general government, public safety, public works and water and wastewater expenses. • As of the close of the current fiscal year, the City of Kennedale's governmental funds reported combined ending fund balances of $2,121,558, an increase of $539,875 in comparison with the prior year. Approximately, 80.91% of this amount, $1,716,655 is available for spending at the City's discretion(unassigned fund balance). • At the end of the current fiscal year, the unassigned fund balance for the General Fund was $1,716,655 or 25.45% of total General Fund expenditures. OVERVIEW OF THE FINANCIAL STATEMENTS The discussion and analysis is intended to serve as an introduction to the City of Kennedale, Texas' basic financial statements. City of Kennedale'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. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of Kennedale's finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the City of Kennedale's assets, liabilities and deferred inflows/outflows of resources, with the difference between them 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 City of Kennedale 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 timing of related cash flows. Thus, revenues and expenses are reported in these statements 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 the statement of net position and the statement of activities are prepared utilizing the full accrual basis of accounting. 4 In the Statement of Net Position and the Statement of Activities, the primary government is divided into two kinds of activities: • Governmental activities — Most of the City's basic services are reported here, including administrative, police, fire, municipal court, community development, streets, parks, senior citizen center and library. Property taxes, sales taxes, franchise fees, license and permit fees finance most of these activities. • Business-type activities —The City charges a fee to customers to cover all or most of the cost of certain services it provides. The City's water and wastewater system and solid waste system are reported here. The government-wide financial statements include not only the City of Kennedale itself(known as the primary government), but also a legally separate economic development corporation. Financial information for this component unit is reported separately from the financial information presented for the primary government itself. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. City of Kennedale, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Kennedale 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 balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Kennedale maintains 10 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, Debt Service Fund and Capital Bond Fund, which are considered to be major funds. Data from the other 7 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The City of Kennedale adopts an annual appropriated budget for its General Fund and Debt Service Fund. Budgetary comparison statements have been provided for the General Fund and the Debt Service Fund to demonstrate compliance with the budget. 5 Proprietary funds. The City charges customers for the services it provides, whether to outside customers or to other units within the City. These services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. There is one type of proprietary fund: Enterprise Fund. The City's Enterprise Fund is identical to the business-type activities that are reported in the government-wide statements but provide more detail and additional information, such as cash flows, for proprietary funds. The City of Kennedale maintains one individual Enterprise Fund to account for its water and wastewater, and solid waste. This fund is considered to be a major fund of the City. 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 in the financial section. Other information. The combining statements referred to earlier in connection with nonmajor governmental funds are presented immediately following the notes to the financial statements. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, over time net position may serve as a useful indicator of a government's financial position. In the case of the City of Kennedale, assets exceeded liabilities by $33,256,978 at the close of the most recent fiscal year. By far the largest portion of the City's net position ($32,614,617 or 98.07%) reflects its investment in capital assets (e.g. land, building, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. CITY OF KENNEDALE'S NET POSITION Governmental Activities Business-type Activities Activities Activities Activities Activities Totals 2015 2014 2015 2014 2015 2014 Current and other assets $ 3,133,137 $ 2,275,619 $ 977,711 $ 2,175,513 $ 4,110,848 $ 4,451,132 Capital assets 33,185,015 33,514,346 15,617,955 15,192;718 48,802,970 48,707,064 Total assets 36,318,152 35,789,965 16,595,666 17,368,231 52,913,818 53,158,196 Total deferred outflows of resources 419,801 - 49,321 - 469,122 Long-tern liabilities 13,675,173 12,946,912 4,727,840 4,854,793 18,403,013 17,801,705 Other liabilities 941,350 624;538 707,015 619,289 1.648,365 1,243,827 Total liabilities 14,616,523 13,571,450 5,434,855 5,474,082 20,051,378 19,045,532 Total deferred inflows of resources 66,743 - 7,841 _ 74,584 - Net Position: Net investment in capital assets 21,429,758 20,904,287 11,184,859 10,443,338 32,614,617 31,347,625 Restricted 409,454 380,622 - - 409,454 380,622 Unrestricted 215,475 933.606 17,432 1,450,811 232,907 2,384,417 Total net position $ 22,054,687 $ 22,218,515 $ 11,202,291 $ 11,894,149 $ 33,256,978 $ 34,112,664 6 An additional portion of the City of Kennedale's net position ($409,454 or 1.23%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position ($232,907 or 0.7%) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City reported a positive balance in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. During the current fiscal year, the City's net position increased by $549,665. This increase represents the degree to which increases in ongoing revenues have outstripped similar increases in ongoing expenses. This increase follows a prior year increase of$715,022 due to increases in capital grants and contribution, property taxes and other taxes offset by increased general government, public safety and water and wastewater expenses. CITY OF KENNEDALE'S CHANGES IN NET POSITION Governmental Activities Business-type Activities Totals 2015 2014 2015 2014 2015 2014 Revenues: Program revenues: Charges for services $ 1,305,789 $ 1,660,099 $ 3,683,542 $ 3,775,546 $ 4,989,331 $ 5,435,645 Operating grants and contributions 139,677 47,119 - - 139,677 47,119 Capital grants and contributions 490,975 115,058 - - 490,975 115,058 General revenues: Property taxes 4,274,752 4,143,977 - 4,274,752 4,143,977 Other taxes 2,402,228 1,965,297 - - 2,402,228 1,965,297 Other revenues 691,659 509,676 281 218 691,940 509,894 Total revenues 9,305,080 8,441,226 3,683,823 3,775,764 12,988,903 12,216,990 Expenses: General government 1,348,921 1,242,021 - - 1,348,921 1,242,021 Public safety 4,521,511 4,274,108 - - 4,521,511 4,274,108 Public works 1,638,428 1,476,670 - - 1,638,428 1,476,670 Culture and recreation 339,328 358,226 - 339,328 358,226 Interest on long-tern debt 478,440 510,355 - - 478,440 510,355 Water and wastewater - - 4,112,610 3,640,588_ 4,112,610 3,640,588 Total expenses 8,326,628 7,861,380 4,112,610 3,640,588 _ 12,439;238 11,501,968 Change in net assets before transfers 978,452 579,846 ( 428,787) 135,176 549,665 715,022 Transfers 49,178 - ( 49,178) - - - Change in Net Position 1,027,630 579,846 ( 477,965) 135,176 549,665 715,022 Net position beginning 22,218,515 21,943,037 11,894,149 11,566,276 34,112,664 33,509,313 Prior period adjustment (1,191,458) (304,368) (213,893) 192,697 (1,405,351) (111,671) Net position,ending $ 22,054,687 $ 22,218,515 $ 11,202,291 $ 11,894,149 $ 33,256,978 $ 34,112,664 7 Governmental activities. Governmental activities net position increased by $1,027,630. The increase is more than the prior year increase of $579,846 due primarily to an increase in capital grants and contributions, property taxes and other taxes. These changes were offset by decreased charges for services as well as increased general government, public safety, public works and water and wastewater expenses. Business-type activities. Business-type activities net position decreased by $477,965. Gross revenue of the Water and Sewer Fund was $3,683,823 for the fiscal year, which is $91,941 less than the 2013- 2014 fiscal year gross revenue, $3,775,764. This decrease is a result of a decrease in charges for services. Direct operating expenses, excluding depreciation, were $3,229,698 for the fiscal year. Direct operating expenses are $269,668 more than 2013-2014 fiscal year direct operating expenses, $2,960,030, due to increased costs of administration. FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS Governmental Funds — The focus of the City's governmental funds is to provide information on near- term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned fund balances may serve as a useful measure of a government's net resources at the end of the fiscal year. At the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of$2,121,588. $15,786 of this total is nonspendable to indicate the amount cannot be spent and $389,117 is restricted to indicate constraints placed on the use of the resources either externally imposed by creditors, by laws or regulations of other governments imposed or imposed by law through constitutional provisions or enabling legislation. The remaining balance of $1,716,655 constitutes unassigned fund balance. Of the $2,121,558 ending fund balance, $378,742 is accounted for in non-major governmental funds. The General Fund balance is $1,732,441 at year end — an increase of $506,546. This increase was created primarily by a combination of increased property taxes, sales taxes, intergovernmental and other revenue, as well as decreased public works expenditures. These are offset by increases in general government, public safety and capital outlay expenditures. In the General Fund, the City budgeted for a decrease of fund balance in the amount of$425,904. The fund balance in the General Fund increased by $506,546, or 41.04% during the current fiscal year. Significant revenue and expenditure increases and decreases were in the following areas: • Sales taxes • Licenses and permits • Intergovernmental revenues • Charges for services • Public safety • Public works • Capital outlay The Debt Service Fund balance increased $7,526 to $10,375 at year end. This increase is primarily the result of increased property tax revenue. The Capital Bond Fund balance decreased $37,123 to a year- end total of$0. This decrease is caused by capital outlay expenditures related to projects including grant projects exceeding revenue and the remainder covered by matching funds from the General Fund. 8 Proprietary funds — The City of Kennedale's proprietary funds provide the same type of information found in government-wide financial statements, but in more detail. Year-end net position in the water and wastewater fund amounted to $11,202,291. This includes a current year decrease of $477,965. See the business-type activity discussion above for more information. General Fund budgetary highlights. The actual expenditures for the year were $6,745,291, which was $346,989 under budget. For FY 2014-2015, the actual revenues were $7,362,971 as compared to the budgeted amount of $6,794,476. Contributing to the variance was lower than anticipated fines and forfeitures ($96,304 less than the budget), and charges for services ($28,865 less than the budget). Also contributing to the variance was higher than anticipated revenues from sales tax revenue ($258,685 higher than the budget), franchise fees ($52,030 higher than the budget), intergovernmental revenue ($92,882 higher than the budget) and other revenue ($243,781 higher than the budget). With revenues exceeding expectation and expenditures below appropriations, the fund balance in the General Fund increased by $506,546, which was $932,450 higher than the final budgeted decrease. CAPITAL ASSET AND DEBT ADMINISTRATION Capital assets. The investment in capital assets for its governmental and business type activities as of September 30, 2015, amounts to $48,802,970 (net of accumulated depreciation). This investment in capital assets includes land, buildings, machinery and equipment, infrastructure, construction work in progress, and water and sewer systems. Approximately 68% of the capital assets are governmental and 32% are business type activities. CITY OF KENNEDALE'S CAPITAL ASSETS AT YEAR-END Governmental Activities Business-type Activities Totals 2015 2014 2015 2014 2015 2014 Land $ 3,963,754 $ 3,988,595 $ 409,801 $ 233,452 $ 4,373,555 $ 4,222,047 Buildings and improvements 4,994,902 4,968,901 5,253,412 5,253,412 10,248,314 10,222,313 Machinery and equipment 3,125,866 3,538,567 958,437 807,360 4,084,303 4,345,927 Infrastructure/water and wastewater distribution 35,465,422 35,036,791 15,844,746 13,682,836 51,310,168 48,719,627 Construction in progress 795,736 487,550 736,604 2,104,481 1,532,340 2,592,031 Less accumulated depreciation ( 15,160,665) ( 14,506,058) ( 7,585,045) ( 6,888,823) (22,745,710) ( 21,394,881) Total capital assets,net $ 33,185,015 $ 33,514,346 $ 15,617,955 $ 15,192,718 $ 48,802,970 $ 48,707,064 Major capital asset events during the current fiscal year included the following: Governmental activities building improvements $ 26,001 Governmental activities construction in progress 717,817 Governmental activities completed infrastructure additions 428,631 Governmental activities equipment purchases 167,005 Business-type activities equipment purchases 151,077 Business-type activities completed improvements 2,161,910 Business-type activities construction in progress 532,902 9 Additional information on the capital assets can be found in Note 3 on pages 35-36 of this report. Long-term debt. At year-end, the City had total bonded debt and capital lease payable obligations of $16,108,942. Of this amount, $14,469,999 represents bonded debt backed by the full faith and credit of the City. The City's capitalized lease obligation of$1,638,943 pertains to the purchase of a fire truck, street equipment, utility vehicles and equipment and new water lines and meters. OUTSTANDING DEBT AT YEAR-END BONDS, CAPITAL LEASE AND LOAN PAYABLE Governmental Activities Business-type Activities Totals 2015 2014 2015 2014 2015 2014 Certificates of $ 11,504,487 $ 12,308,125 $ 2,965,512 $ 3,191,875 $ 14,469,999 $ 15,500,000 obligation bonds Capital leases 99,701 _ 140,436 1,539,242 1,629,163 1,638,943 1,769,599 Total $ 11,604,188 $ 12,448,561 $ 4,504,754 $ 4,821,038 $ 16,108,942 $ 17,269,599 The City's certificates of obligation bonds continue to carry Baal from Moody's Investor Services. Additional information on the long-term debt can be found in Note 3 on pages 37-40 of this report. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES The City Council approved a tax rate of$0.767500 per $100 assessed valuation for the new fiscal year. The budget was conservatively prepared in anticipation of a continued economic downturn. The fund balance for the General Fund is expected to decrease slightly in fiscal year 2015-2016. During the current year, the General Fund fund balance increased by $498,255, to $1,732,441. This increase was more than the anticipated decrease of $425,904 that was budgeted for fiscal year 2014- 2015. The Budget approach is based on six components: 1. Improve transparency for residents. Financial data and other pertinent documents have been added to the website. The city will maintain its gold level rating for transparency from the Texas State Comptroller's Office. The gold level standards are evolving such that software upgrades may be necessary in the near future. 2. Governance. The City Council and staff will continue to focus on governance policies, and the involvement of Advisory Boards. Two City Council members attended the policy governance workshop during the year and three will attend during the upcoming year. The City Council interviewed advisory board applicants against each Board's responsibilities and charge. The advisory board's discussions and exploration of issues are much improved. Board direction and feedback will continue in the future. 10 3. Encourage economic development. The City and the Kennedale Economic Development Corporation (KEDC) are working together on the redevelopment of the Oak Crest area. This development will improve north entry to the community and will be complimentary of the planned development of Village Creek Park, The County constructed Link Street in order to open the area for access and development. The KEDC assembled and sold two lots for fast food restaurants: a Popeye's and the Burger King. The KEDC is assembling land for a potential hotel development in the Oak Crest Area. Phase I of the Kennedale TownCenter is complete. Phase II will be constructed in mid-2016. Village Creek Park is moving into the initial phase with a Section 205 Flood Control Study by the US Army Corps of Engineers (authorized in the FY 15 federal budget). A final report is expected in October 2016. 4. Residential development. The city is working with developers for the establishment of four subdivisions. These include The Vineyard (117 homes), Swiney Estates (35 homes), Hilltop (32 homes) and Falcon Crest (8 homes). The Vineyard and Falcon Crest are under construction. The City created a Tax Increment Reinvestment Zone (TIRZ) with support from Tarrant County, Tarrant County College District, and the Tarrant County Health District. The TIRZ will provide for an orderly closing of the race tracks and conversion of the property to residential development by late 2017. A 144 unit tax credit senior housing project is planned with construction anticipated to begin in mid-2016. 5. Planning. The City is updating the development and zoning codes and regulations into a unified development code to guide the physical development of the City consistent with the recently adopted Comprehensive Land Use Plan. This 18 month process is expected to be completed during the year. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City of Kennedale'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 Director of Finance, City of Kennedale, 405 Municipal Dr., Kennedale, Texas 76060. 11 BASIC FINANCIAL STATEMENTS THIS PAGE LEFT BLANK INTENTIONALLY CITY OF KENNEDALE, TEXAS STATEMENT OF NET POSITION SEPTEMBER 30,2015 Primary Government Component Unit Economic Governmental Business-type Development Activities Activities Total Corporation ASSETS Cash and investments $ 2,218,279 $ 340,284 $ 2,558,563 $ 249,720 Receivables(net of allowances for uncollectibles) Taxes 321,814 - 321,814 70,758 Accounts 577,258 547,834 1,125,092 7,963 Inventories - 89,593 89,593 - Other assets 15,786 - 15,786 - Prepaid items - - - 1,027 Capital assets: Land 3,963,754 409,801 4,373,555 1,457,391 Buildings and improvements 4,994,902 5,253,412 10,248,314 5,882,511 Machinery and equipment 3,125,866 958,437 4,084,303 - Infrastructure/water and wastewater distribution 35,465,422 15,844,746 51,310,168 - Construction in progress 795,736 736,604 1,532,340 - Less: accumulated depreciation ( 15,160,665) ( 7,585,045) ( 22,745,710) ( 1.168,430) Total capital assets 33,185,015 15,617,955 48,802,970 6,171,472 Total assets 36,318,152 16,595,666 52,913,818 6.500,940 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to TMRS 419,801 49,321 469,122 - Total deferred outflows of resources 419,801 49,321 469,122 LIABILITIES Accounts payable 479,715 381,722 861,437 704 Accrued liabilities 256,477 27,190 283,667 - Accruedinterestpayable 84,122 64,371 148,493 25,693 Unearned revenue 121,036 - 121,036 - Customer deposits - 233,732 233,732 14,899 Noncurrent liabilities: Due within one year 974,212 339,266 1,313,478 88,372 Due in more than one year 12,700,961 4,388,574 17,089,535 1,310,217 Total liabilities 14,616,523 5,434,855 20,051,378 1,439,885 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to TMRS 66,743 7,841 74,584 - Total deferred inflows of resources 66,743 7,841 74,584 - NET POSITION Net investment in capital assets 21,429,758 11,184,859 32,614,617 4,772,883 Restricted for: Debt service 30,712 - 30,712 - Capital improvements 373,456 - 373,456 - Economic development - - - 288,172 Other purposes 5,286 5,286 - Unrestricted 215,475 17,432 232,907 Total net position $ 22,054,687 $ 11,202,291 $ 33,256,978 $ 5,061,055 The notes to the financial statements are an integral part of this statement. 12 CITY OF KENNEDALE, TEXAS STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30,2015 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary Government: Governmental activities: General government $ 1,348,921 $ 720,308 $ - $ Public safety 4,521,511 500,044 139,548 - Public works 1,638,428 84,250 - 490,975 Culture and recreation 339,328 1,187 129 - Interest on long-term debt 478,440 - - - Total governmental activities 8,326,628 1,305,789 139,677 490,975 Business-type activities: Water/Wastewater 4,112,610 3,683,542 - - Total business-type activities 4,112,610 3,683,542 - Total primary government $ 12,439,238 $ 4,989,331 $ 139,677 $ 490,975 Component Unit: Kennedale Economic Development Corporation $ 803,546 $ 116,845 $ - $ General revenues: Taxes: Property-general purposes Property-debt service Sales Franchise Investment earnings Miscellaneous Transfers Total general revenues Change in net position Net position,beginning Prior period adjustment Net position, ending The notes to the financial statements are an integral part of this statement. 13 Net(Expense)Revenue and Changes in Net Position Primary Government Component Unit Economic Governmental Business-type Development Activities Activities Total Corporation $( 628,613) $ - $( 628,613) $ - ( 3,881,919) _ ( 3,881,919) - ( 1,063,203) - ( 1,063,203) - ( 338,012) - ( 338,012) - ( 478,440) - ( 478,4_40) - ( 6,390,187 - ( 6,390,187) - ( 429,068) [ 4290$) - ( 429,068) { 429,00) - $( 6,390,187) $( 429,068) $( 6,819,255) $ - $ - $ - $ - $( 686,701) $ 3,158,951 $ - $ 3,158,951 $ - 1,115,801 - 1,115,801 - 1,491,342 - 1,491,342 496,083 910,886 - 910,886 887 281 1,168 112 690,772 - 690,772 57,855 49,178 ( 49,179 - - 7,417,817 ( 48,897) 7,368,920 554,050 1,027,630 ( 477,965) 549,665 ( 132,651) 22,218,515 11,894,149 34,112,664 5,220,834 ( 1,191,458) ( 213,893) ( 1,405,351) f 27,128) $ 22,054,687 $ 11,202,291 $ 33,256,978 $ 5,061,055 14 CITY OF KENNEDALE, TEXAS BALANCESHEET GOVERNMENTAL FUNDS SEPTEMBER 30,2015 Other Total Debt Capital Governmental Governmental General Service Bond Fund Funds Funds ASSETS Cash and investments $ 1,653,219 $ 14,375 $ 157,680 $ 393,005 $ 2,218,279 Receivables(net of allowance for uncollectibles) Taxes 298,516 23,298 - - 321,814 Accounts 164,307 - 406,735 6,216 577,258 Due from other funds 371,820 - - - 371,820 Prepaid items 15,786 - - - 15,.786 Total assets $ 2,503,648 $ 37,673 $ 564,415 $ 399,221 3,504,957 LIABILITIES Accounts payable $ 360,903 $ - $ 98,333 $ 20,479 479,715 Accrued liabilities 256,477 - - 256,477 Due to other funds - - 371,820 - 371,820 Unearned revenue 19,813 6,961 94,262 - 121,036 Total liabilities 637,193 6,961 564,415 20,479 1,229,048 DEFERRED INFLOWS OF RESOURCES Unavailable revenue-property taxes 59,184 20,337 - - 79,521 Unavailable revenue-ambulance 74,830 - - - 74,830 Total deferred inflows of resources 134,014 20,337 - - 154,351 FUND BALANCES Nonspendable: Prepaid items 15,786 - - - 15,786 Restricted for: Debt service - 10,375 - - 10,375 Public safety - - - 5,286 5,286 Capital projects - _ - 373,456 373,456 Unassigned 1,716,655 - - - 1,716,655 Total fund balances 1,732,441 10,375 - 378,742 2,121,558 Total liabilites,deferred inflows of resources and fund balances $ 2,503,648 $ 37,673 $ 564,415 $ 399,221 Capital assets used in governmental activities are not financial resources and, therefore,are not reported in the funds. 33,185,015 Other long-term assets are not available to pay for current-period expenditures and,therefore,are reported as unavailable revenue in the funds. 154,351 Long-tern liabilities (net pension liability, bonds payable, and etc.) are not due and payable in the current period and therefore have not been included in the fund financial statements. Also, the premium on the issuance of bonds and deferred resources related to the net pension liability are not reported in the funds. ( 13,406,237) Net position of governmental activities $ 22,054,687 The notes to the financial statements are an integral part of this statement. 15 CITY OF KENNEDALE, TEXAS STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2015 Other Total Debt Capital Governmental Governmental General Service Bond Fund Funds Funds REVENUES Taxes: Property $ 3,174,142 $ 1,120,298 $ - $ - $ 4,294,440 Sales 1,491,342 - - - 1,491,342 Franchise fees 910,886 - - - 910,886 Licenses and permits 261,761 - - 84,250 346,011 Fines and forfeitures 227,295 - - 1,187 228,482 Public safety fees 247,907 - - - 247,907 Intergovernmental 137,882 - 490,975 1,812 630,669 Charges for services 459,651 - - - 459,651 Investment earnings 722 23 8 134 887 Contributions - - - 2,153 2,153 Other 451,383 153,519 24,841 83,700 713,443 Total revenues 7,362,971 1,273,840 515,824 173,236 9,325,871 EXPENDITURES Current: General government 1,228,989 - _ - 1,228,989 Public safety 4,240,832 - - 6,675 4,247,507 Public works 803,885 - - 47,048 850,933 Culture and recreation 268,377 - - 4,587 272,964 Capital outlay 203,208 - 693,259 - 896,467 Debt service: Principal - 844,371 - - 844,371 Interest and fiscal charges - 493,943 - - 493,943 Total expenditures 6,745,291 1,338,314 693,259 58,310 8,835,174 EXCESS OF REVENUES OVER EXPENDITURES 617,680 ( 64,474) ( 177,435) 114,926 490,697 OTHER FINANCING SOURCES(USES) Transfers in - 72,000 140,312 45,919 258,231 Transfers out ( 111,134) - - ( 97,919) ( 209,053) Total other financing sources and(uses) ( 111,134) 72,000 140,312 ( 52,000) 49,178 NET CHANGE IN FUND BALANCES 506,546 7,526 ( 37,123) 62,926 539,875 FUND BALANCES,BEGINNING 1,234,186 2,849 37.123 315,816 1,589,974 PRIOR PERIOD ADJUSTMENT ( 8.291) - - - ( 8,291) FUND BALANCES,ENDING $ 1.732.441 $ 10,375 $� $ 378,742 $ 2,121,558 The notes to the financial statements are an integral part of this statement. 16 CITY OF KENNEDALE, TEXAS RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30,2015 Amounts reported for governmental activities in the Statement of Activities (pages 13 - 14)are different because: Net change in fund balances-total governmental funds(page 16) $ 539,875 Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which depreciation exceeded capital outlay in the current period. ( 329,331) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 4,050 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. ( 42,085) Certain pension expenditures are not expended in the government-wide financial statements and recorded as deferred resource outflows. This item relates to contributions made after the measurement date. Additionally, a portion of the City's unrecognized deferred resource inflows/outflows related to the pension liability were amortized. 10,748 The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. 844,373 Change in net position of governmental activities(pages 13 -14) $ 1,027,630 The notes to the financial statements are an integral part of this statement. 17 CITY OF KENNEDALE, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUND SEPTEMBER 30,2015 Business-type Activities- Enterprise Fund Water and ASSETS Wastewater Current assets: Cash and investments $ 340,284 Accounts receivable-net of allowances for uncollectibles 547,834 Inventories 89,593 Total current assets 977,711 Noncurrent assets: Capital assets: Land 409,801 Buildings and improvements 5,253,412 Equipment 958,437 Water and wastewater distribution 15,844,746 Construction in progress 736,604 Less: accumulated depreciation ( 7,585,045) Total noncurrent assets 15,617,955 Total assets 16,595,666 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to TMRS 49,321 Total deferred outflows of resources 49,321 LIABILITIES Current liabilities: Accounts payable 381,722 Accrued liabilities 27,190 Accrued interest 64,371 Customer deposits 233,732 Compensated absences 8,773 Capital leases payable 93,393 Bonds payable 237,100 Total current liabilities 1,046,281 Long-term liabilities: Compensated absences 35,091 Net pension liability 179,222 Capital leases payable 1,445,849 Bonds payable 2,728.412 Total long-term liabilities 4,388,574 Total liabilities 5,434,855 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to TMRS 7,841 Total deferred inflows of resources 7,841 NET POSITION Net investment in capital assets 11,184,859 Unrestricted 17,432 Total net position $ 11,202,291 The notes to the financial statements are an integral part of this statement. 18 CITY OF KENNEDALE, TEXAS STATEMENT OF REVENUES, EXPENSES,AND CHANGES IN FUND NET POSITION PROPRIETARY FUND FOR THE YEAR ENDED SEPTEMBER 30,2015 Business-type Activities- Enterprise Fund Water and Wastewater OPERATING REVENUES Water sales $ 1,878,194 Wastewater charges 1,207,318 Tap and collection fees 306,707 Other service charges 250,435 Miscellaneous income 40,888 Total operating revenues 3,683,542 OPERATING EXPENSES Cost of sales and services 1,676,877 Administration 1,552,821 Depreciation 696,222 Total operating expenses 3,925,920 OPERATING INCOME ( 242,378) NONOPERATING REVENUES(EXPENSES) Investment earnings 281 Interest and fiscal charges on debt ( 186,690) Total nonoperating revenues(expenses) ( 186,409) Income before transfers ( 428,787) Transfers in 197,312 Transfers out ( 246,490) CHANGE IN NET POSITION ( 477,965) TOTAL NET POSITION,BEGINNING 11,894,149 PRIOR PERIOD ADJUSTMENT ( 213,893) TOTAL NET POSITION,ENDING $ 11,202,291 The notes to the financial statements are an integral part of this statement. 19 CITY OF KENNEDALE, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUND FOR THE YEAR ENDED SEPTEMBER 30,2015 Business-tvne Activities- Enterprise Fund Water and Wastewater CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 3,669,660 Cash payments to employees for services { 1.557,859) Cash payments to suppliers for goods and services ( 1,625,353} Cash provided by operating activities 486448 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds 197.312 Transfers to other funds ( 246,490) Cash used for noncapital financing activities 49,178) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal repayments on debt ( 31.6.284) Interest and fiscal charges on debt ( 187,815) (Acquisition)disposal of capital assets ( 1,175,730) Cash used for capital and related financing activities ( 1.679,829) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 281 Cash provided by investing activities 281 NET INCREASE IN CASH AND CASH EQUIVALENTS ( 1,242,278) CASH AND CASH EQUIVALENTS,BEGINNING 1,582,562 CASH AND CASH EQUIVALENTS,ENDING $ 340,284 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income $( 242,378) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 696,222 Change in assets and liabilities: Decrease(increase)in accounts receivable ( 51,746) Decrease(increase)in inventories ( 13,348) Decrease(increase)in deferred outflows related to TMRS ( 19,784) Increase(decrease)in accounts payable 64,872 Increase(decrease)in accrued liabilities 6,733 Increase(decrease)in customer deposits 17,246 Increase(decrease)in compensated absences 10,109 Increase(decrease)in deferred inflows related to TMRS 7,841 Increase(decrease)in net pension liability 10,681 Total adjustments 728,826 Net cash provided by operating activities $ 486,448 The accompanying notes are an integral part of this statement. 20 THIS PAGE LEFT BLANK INTENTIONALLY CITY OF KENNEDALE, TEXAS NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30,2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES City of Kennedale, Texas (the "City") was incorporated in 1947. The City operates as a home-rule City under a council-manager form of government and provides the following services as authorized by its charter: police, fire, planning, zoning and code enforcement, public works, streets, parks and recreation, public library, ambulance, water and sewer utilities and general administrative services. Sanitation collection services are provided through a private contractor. The accounting and reporting policies of the City conform to accounting principles generally accepted in the United States of America for local governments. Generally accepted accounting principles (GAAP) for local governments include those principles prescribed by the Governmental Accounting Standards Board (GASB). The following is a summary of the more significant accounting and reporting policies: A. Reporting Entity The accompanying financial statements present the City and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the Town's operations and are appropriately presented as funds of the primary government. Discretely presented component units, on the other hand, are reported in a separate column in the government- wide financial statements to emphasize it is legally separate from the Town. Discretely Presented Component Unit: The Kennedale Economic Development Corporation ("KEDC"). KEDC is a legally separate entity incorporated on December 2, 1996. The Corporation's purpose is to promote economic development within the City, including, but not limited to, construction, operation and administration, as permitted by Section 4B of the Act, as amended. The City Council appoints the governing board for this entity and is able to impose its will upon the Corporation. KEDC is presented as a governmental fund type. A separately issued financial report is available for the Kennedale Economic Development Corporation. This report may be obtained by contacting the following office. City of Kennedale, Texas Director of Finance 405 Municipal Drive Kennedale, Texas 76060 21 B. Government-►vide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the 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 revenue, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from 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 revenue. Direct expenses are those that are clearly identifiable with a specific function or segment. Certain indirect costs have been included as part of the program expenses reported for the various functional activities. Program revenue includes 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 revenue are reported instead as general revenue. 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. C. Measurement Focus Basis of Accountin 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. Revenue is 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 revenue in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenue is recognized as soon as it is both measurable and available. Revenue is considered to be available when it is collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenue to be available if 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, franchise taxes, sales taxes, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenue of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the City. 22 The City reports the following major governmental funds: The General Fund is the City'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 Debt Service Fund is used to account for resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds. The Capital Bond Fund is a capital projects fund. It is used to account for the acquisition and construction of various capital improvements and is funded by general obligation bonds. The City reports the following major proprietary fund: The Water and Wastefvater Fund accounts for the activities necessary for the provision of water and wastewater services. As a general rule, the effect of interfund activity has been eliminated from the government- wide financial statements. Exceptions to this general rule are charges between the City's water and wastewater function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenue 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 revenue. Likewise, general revenue includes all taxes. 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 City's Enterprise Fund are charges to customers for sales and services. Operating expenses for the Enterprise Fund include cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenue and expenses. D. Assets, Liabilities and Net Position or EQuity Deposits and Investments The City pools substantially all cash and investments except for separate cash and investment accounts, which are maintained in accordance with legal restrictions. Investments maturing within one year of date of purchase are stated at cost or amortized cost; all other investments are stated at fair value, which is based on quoted market prices. Investment income is recorded in the fiends in which the investments are recorded. 23 The City invests in The Texas Local Government Investment Pool (TexPool). The Texas Local Government Investment Pool (TexPool) is a public funds investment pool created pursuant to the Interlocal Cooperation Act of the State of Texas. The State Comptroller of Public Accounts exercises oversight responsibility over TexPool. Oversight includes the ability to significantly influence operations, designation of management and accountability for fiscal matters. Additionally, the State Comptroller has established an advisory board composed of both participants in TexPool and other persons who do not have a business relationship with TexPool. The Advisory Board members review the investment policy and management fee structure. Finally, TexPool is rated AAAm by Standard & Poor's. As a requirement to maintain the rating, weekly portfolio information must be submitted to Standard & Poor's, as well as the Office of the Comptroller of Public Accounts for review. TexPool operates in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. TexPool uses amortized cost rather than fair value to report Net Position to compute share prices. Accordingly, the fair value of the position in TexPool is the same as the value of TexPool shares. The City also invests in Texas Short-term Asset Reserve Program (TexSTAR). TexSTAR is organized in conformity with the Interlocal Cooperation Act, Chapter 791 of the Texas Government Code, and the Public Funds Investment Act, Chapter 2256 of the Texas Government Code. These two acts provide for the creation of public funds investment pools and authorize eligible governmental entities to invest their public funds and funds under their control through the investment pools. TexSTAR is currently rated AAAm by Standard & Poor's and has an investment objective of achieving and maintaining a stable net asset value of$1.00 per share. The City also invests in TexasTERM. TexasTERM is a local government investment portfolio established to allow counties, municipalities, school districts, municipal authorities and other governmental entities in Texas to pool their funds for investment under the provisions of the Interlocal Cooperation Act, Chapter 791 of the Texas Government Code, the PTIA and other cooperative statutes and under the statutes governing investment of funds by those local governments. TexasTERM is rated AAAm by Standard and Poor's. TexasTERM seeks to maintain a constant net asset value of$1.00 per share. For purpose of presenting the proprietary fund cash flow statement, cash and cash equivalents includes demand deposits and investments with a maturity date within three months of the date acquired by the City. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the noncurrent portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances." 24 Property taxes attach as an enforceable lien on property as of October 1. Taxes are levied each October 1 and are due and payable on or before January 31 of the following year. All unpaid taxes become delinquent February 1 of the following year. The Tarrant County Tax Assessor/Collector bills and collects the City's property taxes. Any uncollected property taxes as of September 30, which are not expected to be collected within 60 days, are recorded as taxes receivable and deferred revenue. As a City that operates under a home-rule charter, the City has a tax rate limitation of$2.50 per $100 assessed valuation. For the year ended September 30, 2015, the City had a tax rate of $0.7475 per $100 of which $0.551216 was allocated for general government and $0.196284 was allocated for payment of principal and interest on general long-term debt. Inventories and Prepaid Items All inventories are valued using the average cost 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 the government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased. Restricted Assets Certain proceeds of the Enterprise Fund bonds and certain resources set aside for their repayment are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure (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. The City defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not capitalized. Property, plant and equipment are depreciated using the straight-line method over the following useful lives: Assets Years Plants and buildings 20 Machinery and equipment 4 - 10 Infrastructure(streets and drainage) 35 - 125 Other structures 50 25 Compensated Absences Vacation is earned in varying amounts up to a maximum of 160 hours per year for 40-hour week personnel with 6 or more years of service. Vacation leave does not accumulate from one year to the next for amounts over 160 hours. 40-hour per week personnel accrues one-half working day (4 hours) of sick leave for each full month of employment in the calendar year. Upon separation from employment, a permanent employee who has completed six months of employment is entitled to be paid the amount of salary for the employee's accumulated sick leave but not to exceed 60 hours for 40-hour per week employees. All unused vested vacation and sick leave 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 resignations 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 straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed during the period of issuance. 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. Pensions For purposes of measuring the net pension liability, pension related deferred outflows and inflows of resources, and pension expense, City specific information about its Fiduciary Net Position in the Texas Municipal Retirement System (TMRS) and additions to/deductions from the City's Fiduciary Net Position have been determined on the same basis as they are reported by TMRS. For this purpose, plan contributions are recognized in the period that compensation is reported for the employee, which is when contributions are legally due. Benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Information regarding the City's Total Pension Liability is obtained from TMRS through a report prepared for the City by TMRS consulting actuary, Gabriel Roeder Smith & Company, in compliance with Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. 26 Net Position Net Position represents the difference between assets, deferred inflows/outflows of resources and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition, construction or improvement of those assets, and adding back unspent proceeds. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. Fund Balance The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. The classifications used in the governmental fund financial statements are as follows: • Nonspendable: This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) are legally or contractually required to be maintained intact. Nonspendable items are not expected to be converted to cash or are not expected to be converted to cash within the next year. • Restricted: This classification includes amounts for which constraints have been placed on the use of the resources either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation. • Committed: This classification includes amounts that can be used only for specific purposes pursuant to constraints imposed by board resolution of the city council, the City's highest level of decision making authority. These amounts cannot be used for any other purpose unless the city council removes or changes the specified use by taking the same type of action that was employed when the funds were initially committed. This classification also includes contractual obligations to the extent that existing resources have been specifically committed for use in satisfying those contractual requirements. • Assigned: This classification includes amounts that are constrained by the City's intent to be used for a specific purpose but are neither restricted nor committed. The city council has by resolution authorized the city manager and finance director to assign fund balance. The council may also assign fund balance. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. • Unassigned: This classification includes the residual fund balance for the General Fund. The unassigned classification also includes negative residual fund balance of any other governmental fund that cannot be eliminated by offsetting of assigned fund balance amounts. 27 Net Position Flow Assumption Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted — net position and unrestricted — net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City's policy to consider restricted — net position to have been depleted before unrestricted — net position is applied. Fund Balance Flow Assumption Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the City's policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial 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 City has the following items that qualify for reporting in this category. • Pension contributions after measurement date — These contributions are deferred and recognized in the following fiscal year. • Difference in projected and actual earnings on pension assets — This difference is deferred and amortized over a closed five year period. 28 In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statements element, deferred inflows or 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 City has one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, this item is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from two sources: property taxes and ambulance. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The City also has one type of item that qualifies for reporting in this category in the government- wide financial statements. The difference in expected and actual pension experience is deferred and recognized over the estimated average remaining lives of all members determined as of the measurement date. Estimates The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual amounts could differ from those estimates. Prior Period Adjustments During the current year, it was determined that the City received property tax revenue of $48,284 in advance that should have been deferred and recognized in the current year. Additionally, it was discovered that compensated absences of$39,993 had been recorded in the General Fund for certain street employees. The City also noted that an engineering expense in the amount of $54,271 had been capitalized in previous years but no project concluded so the item was removed from capital assets. Finally, the City noted a $20,617 overstatement to water and wastewater accounts receivable and allowance for doubtful accounts in the prior year. The GASB has issued Statement No. 68, "Accounting and Financial Reporting for Pensions- an amendment of GASB Statement No. 27," which became effective for fiscal year 2015. This statement changes the focus of pension accounting for employers from whether they are responsibly funding their plan over time to a point-in-time liability that is reflected in the employer's financial statements for any actuarially unfunded portion of pension benefits earned to date. The implementation of Statement No. 68 resulted restatement of beginning net position for the elimination of the previously reported net pension obligation, the recording of the beginning net pension liability and the beginning deferred outflow for contributions made after the measurement date. Prospectively applying these changes results in the adjustments below along with other prior period adjustments mentioned above. 29 Fund Level Statement of Revenues, Statement of Revenues, Government-wide Expenses and Changes in Expendituress and Changes in Fund Statement of Activities Net Position-Proprietary Funds Balances-Governmental Funds Governmental Business-type Water and General Activities Activities Wastewater Fund Fund Net position at September 30,2014, as previously reported $ 22,218,515 $ 11,894,149 $ 11,894,149 $ 1,234,186 Deferral of property tax advance (48,284) - - (48,284) Removal of compensated absences 39,993 - 39,993 Removal of capital assets - (54,271) (54,271) - Adjustments to accounts receivable (20,617) (20,617) - Recording of net pension liability as of September 30,2014 (1,434,564) (168,541) (168,541) - Deferral for pension contributions made after the measurement date 251,397 29,536 29,536 - Net position at September 30,2014, as restated $ 21,027.057 $ 11,680,256 $ 11,680,256 $ 1,225,895 2. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Position The governmental fund balance sheet includes a reconciliation between fund balance — total governmental funds and net position — governmental activities as reported in the government- wide statement of Net Position. One element of that reconciliation explains, "Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds." The details of this $13,406,237 difference are as follows: Certificates of obligation bonds $( 11,504,487) Premiums on issuance of debt(to be amortized over life of debt) ( 151,069) Capitalized lease obligations ( 99,701) Accrued interest payable ( 84,122) Net pension liability ( 1,525,477) Deferred resources related to pensions 353,058 Compensated absences ( 394,439) Net adjustment to reduce fund balance- total govermnental funds to arrive at net position- governmental activities $( 13,406,237) 30 Explanation of Certain Differences Between the Governmental Fund Statement of Revenue, Expenditures and Changes in Fund Balances and the Government-wide Statement of Activities The governmental fund statement of revenue, expenditures and changes in fund balances includes a reconciliation between net changes in fund balances — total governmental fund and changes in net position of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains, "Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this $329,331 difference are as follows: Capital outlay (includes $33,357 not classified as capital expenditures on the fund statements) $ 929,824 Sale or disposal of capital assets $( 24,841) Depreciation expense ( 1,234,314) Net adjustment to decrease net changes in.fund balances - total governmental funds to arrive at changes in net position of governmental activities $( 329,331) Another element of that reconciliation states, "The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The details of this $844,373 difference are as follows: Principal repayments: General obligation debt $ 803,638 Capital lease 40,735 Net adjustment to increase net changes in fund balances- total governmental funds to arrive at changes in net position ofgovernmental activities $ 844,373 Another element of that reconciliation states, "Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds." The details of this $42,085 difference are as follows: Compensated absences $( 57,586) Accrued interest 5,072 Amortization of premium 10,429 Net adjustment to decrease net changes in fund balances- total governmental funds to arrive at changes in net position ofgovernmental activities $( 42,085) 31 3. DETAILED NOTES ON ALL FUNDS Deposits and Investments The Public Funds Investment Act (Government Code Chapter 2256) contains specific provisions in the areas of investment practices, management reports and establishment of appropriate policies. Among other things, it requires the City to adopt, implement, and publicize an investment policy. That policy must address the following areas: (1) safety of principal and liquidity, (2) portfolio diversification, (3) allowable investments, (4) acceptable risk levels, (5) expected rates of return, (6) maximum allowable stated maturity of portfolio investments, (7) maximum average dollar-weighted maturity allowed based on the stated maturity date for the portfolio, (8) investment staff quality and capabilities, and (9) bid solicitation preferences for certificates of deposit. Statutes authorize the City to invest in (1) obligations of the U. S. Treasury, certain U. S. Agencies, and the State of Texas; (2) certificates of deposit, (3) certain municipal securities, (4) money market savings accounts, (5) repurchase agreements, (6) bankers' acceptances, (7) Mutual Funds, (8) Investment pools, (9) guaranteed investment contracts, and (10) common trust funds. The Act also requires the City to have independent auditors perform test procedures related to investment practices as provided by the Act. The City is in substantial compliance with the requirements of the Act and with local policies. In compliance with the Public Funds Investment Act, the City has adopted a deposit and investment policy. That policy does address the following risks: a. 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. State statutes require that all deposits in financial institutions be fully collateralized by U.S. Government obligations or its agencies and instrumentalities or direct obligations of Texas or its agencies and instrumentalities that have a fair value of not less than the principal amount of deposits. As of September 30, 2015, $1,387,086 of the City's $1,637,086 deposit balance was collateralized with securities held by the pledging financial institution. The remaining balance, $250,000, was covered by FDIC insurance. b. Credit Risk: It is the City's policy to limit investments to investment types with an investment quality rating no lower than AAA or AAA-m or an equivalent rating by at least one nationally recognized rating service or no lower than investment grade by at least one nationally recognized rating service with a weighted average maturity no greater than 90 days. The City's investments were rated AAAm by Standard and Poor's Investors Services. c. Interest Rate Risk: In accordance with the City's investment policy, the City manages its exposure to declines in fair values by limiting the weighted average maturity of its investment portfolio to 90 days or less, dependent on market conditions. d. Concentration of Credit Risk: The government's investment policy states the maximum percentage allowed for each different investment instrument that can be used to make up the portfolio. 32 At September 30, 2015, the primary government's investments consisted of: Fair Value TexStar $ 327,028 Texas Term 31,379 State Treasurer's Investment Pool (TexPool) 744,979 $ 1,103,386 During the fiscal year, the City managed the investments of the KEDC. The KEDC investments are categorized in the same manner as the City's and consist of the following: Fair Value State Treasurer's Investment Pool (TexPool) $ 249,720 $ 249.720 The City utilizes the following local government investment pools for its short-term liquidity investments needs: Texas Short-term Asset Reserve Program (TexStar), Texas Local Government Investment Pool (TexPool) and Texas Term. The local government investment pools operate in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. These pools utilize amortized cost rather than market value to report net position to compute share prices. Accordingly, the fair value is the same as the value of shares. The State Comptroller of Public Accounts exercises oversight responsibilities over TexPool. Oversight includes the ability to significantly influence operations, designation of management, and accountability for fiscal matters. Additionally, the State Comptroller has established an Advisory Board composed of both participants in TexPool and other persons who do not have a business relationship with TexPool. The Advisory Board members review the investment policy and management fee structure. JP Morgan Fleming Asset Management, Inc. and First Southwest Asset Management, Inc. serve as co-administrators under an agreement with the TexStar board of directors to provide investment and participant services for this pool. JP Morgan Chase Bank or its subsidiary, JP Morgan Investor Services Co. provides the custodial, transfer agency, fund accounting, and depository services for this pool. The Texas Term program has an Advisory Board made up of representatives of several participating local governments. PFM Asset Management, LLC provides administrative and investment services to the Advisory Board. U. S. Bank provides the custodial, transfer agency, fund accounting, and depository services for this pool. 33 Receivables Receivables as of year-end for the City's individual major funds and nonmajor funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows: Debt Capital Water and Nonmajor General Service Bond Fund Wastewater Governmental Total Receivables: Taxes $ 424,323 $ 50,377 $ $ - $ - $ 474,700 Accounts 2,134,616 - 406,735 762,605 6,216 3,310,172 Gross receivables 2,558,939 50,377 406,735 762,605 6,216 3,784,872 Less: allowance for uncollectibles ( 2,096,116) ( 27,079) - ( 214,771) - ( 2,337,966) Net total receivables $ 462,823 $ 23,298 $ 406,735 $ 547,834 $ 6,216 $ 1,446,906 Deferred Inflows of Resources Governmental funds report deferred inflows of resources - unavailable in connection with receivables for revenue that is not considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year, the various components of deferred inflows of resources reported in the governmental funds were as follows: Unavailable General fund: Delinquent property taxes receivable $ 59,184 Ambulance charges 74,830 134,014 Debt service fund: Delinquent property taxes receivable 20,337 Governmental Funds $ 154,351 34 Capital Assets Capital asset activity for the year ended September 30, 2015, was as follows: Primary Government Beginning Ending Balance Increases Decreases Balance Government activities: Capital assets,not being depreciated: Land $ 3,988,595 $ - $ 24,841 3,963,754 Construction work in progress 487,550 717,817 409,631 795,736 Total capital assets not being depreciated 4,476,145 717,817 434,472 4,759,490 Capital assets,being depreciated: Buildings 4,968,901 26,001 - 4,994,902 Machinery and equipment 3,538,567 167,006 579,707 3,125,866 Infrastructure 35,036,791 428,631 - 35,465,422 Total capital assets being depreciated 43,544,259 621,638 579,707 43,586,190 Less accu nulated depreciation: Buildings 2,135,463 166,172 - 2,301,635 Machinery and equipment 2,759,553 254,812 579,707 2,434,658 Infrastructure 9,611,042 813,330 - 10,424,372 Total accumulated depreciation 14,506,058 1,234,314 579,707 15,160,665 Total capital assets, being depreciated,net 29,038,201 ( 612,676) - 28,425,525 Governmental activities capital assets,net $ 33,514,346 $ 105,141 $ 434,472 $ 33,185,015 Business-type activities: Capital assets,not being depreciated: Land $ 233,452 $ 176,349 $ - $ 409,801 Construction work in progress 2,104,481 532,903 1,900,780 736,604 Total capital assets not being depreciated 2,337,933 709,252 1,900,780 1,146,405 Capital assets,being depreciated: Buildings 5,253,412 - - 5,253,412 Machinery and equipment 807,360 151,077 - 958,437 Improvements other than buildings 13,682,836 2,161,910 - 15,844,746 Total capital assets being depreciated 19,743,608 2,312,987 22,056,595 Less accumulated depreciation: Buildings 2,190,149 108,590 - 2,298,739 Machinery and equipment 659,591 73,962 - 733,553 Improvements other than buildings 4,039,083 513,670 - 4,552,753 Total accumulated depreciation 6,888,823 696,222 - 7,585,045 Total capital assets,being depreciated,net 12,854,785 1,616,765 - 14,471,550 Business-type activities capital assets,net $ 15,192,718 $ 2,326,017 $ 1,900,780 $ 15,617,955 35 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government $ 75,390 Public safety 241,025 Public works 853,432 Culture and recreation 64,467 Total depreciation expense-governmental activities $ 1,234,314 Business-type activities: Water and wastewater $ 696,222 Total depreciation expense-business-type activities $ 696,222 Discretely presented component units A summary of discretely presented component units' capital assets for the year ended September 30, 2015, follows: Beginning Ending Balance Increases Decreases Balance Capital assets, not being depreciated: Land $ 1,340,853 $ 116,538 $ - $ 1,457,391 Construction in progress 171,641 - 171,641 - Totals, capital assets,not being depreciated 1,512,494 116,538 171,641 1,457,391 Capital assets,being depreciated: Buildings 4,680,139 - - 4,680,139 Improvements 1,017,693 - - 1,017,693 Infrastructure - 184,679 - 184,679 Totals, capital assets being depreciated 5,697,832 184,679 - 5,882,511 Less accumulated depreciation for: Buildings 702,929 234,007 - 936,936 Improvements 176,916 50,884 - 227,800 Infrastructure - 3,694 - 3,694 Total accumulated depreciation 879,845 288,585 - 1,168,430 Total capital assets,being depreciated,net 4,817,987 (103,906) - 4,714,081 Capital assets,net $ 6,330,481 $ 12,632 $ 171,641 $ 6,171,472 36 Interfund Receivables, Pavables and Transfers The composition of interfund balances as of September 30, 2015 is as follows: Interfund receivables/payables: Receivable Fund Payable Fund Amount General Capital Bond Fund $ 371,820 Total $ 371,820 The amount payable to the General Fund is to cover expenditures in the Capital Projects Fund. Interfund transfers: Transfers In Transfers Out Amount Debt Service General Fund $ 20,000 Capital Bond Fund General Fund 91,134 Debt Service Nonmajor 52,000 Capital Bond Fund Water and Wastewater 49,178 Nonmajor Nonmajor 45,919 Water and Wastewater Water and Wastewater 197,312 Total $ 455,543 The transfers were used to move unrestricted revenues collected in various funds to finance various programs that the government must account for in other funds in accordance with budgetary authorizations. Capital Leases The City has acquired certain fixed assets for governmental and business-type activities through the use of lease purchase agreements. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. The assets acquired through capital leases are as follows: Governmental Business-Type Activities Activities Total Assets: Machinery and Equipment $ 108,492 $ 218,489 $ 326,981 Buildings and Improvements 221,887 - 221,887 Infrastructure - 1,650,000 1,650,000 Less: Accumulated depreciation (171,058) (361,031) ( 532,089) Total $ 159,321 $ 1,507,458 $ 1,666,779 37 The future minimum lease obligations and the net present value of these minimum lease payments as of September 30, 2015, were as follows: Year Ending Governmental Business-Type September 30, Activities Activities 2016 $ 46,146 $ 152,813 2017 20,414 152,813 2018 20,414 152,813 2019 20,414 152,813 2020 - 152,813 2021-2025 - 764,063 2026-2030 - 458,438 Total minimum lease payments 107,388 1,986,566 Less: amount representing interest 7,687 447,324 Present value of minimum lease payments $ 99,701 $ 1,539,242 Long-term Debt General Obligation Bonds The City issues general obligation bonds and certificates of obligation to provide funds for the acquisition and construction of major capital facilities. These bonds have been issued for both governmental and business-type activities. These bonds are reported in the proprietary funds if they are expected to be repaid from proprietary fund revenue. The original amount of general obligation bonds and certificates of obligation issued in prior years was $20,550,000. General obligation bonds and certificates of obligation are direct obligations and pledge the full faith and credit of the government. These bonds generally are issued as 20-year serial bonds with equal amounts of principal maturing each year. Bonds currently outstanding are as follows: Purpose Interest Rates Amount Governmental activities 3.65 -4.65 $ 9,970,000 Governmental activities-refunding 3.97 1,534,487 Business-type activities 4.10 2,015,000 Business-type activities-refunding 3.97 950,512 $ 14,469,999 38 Annual debt service requirements to maturity for bonds are as follows: Year Ending Governmental Activities Business-type Activities September 30, Principal Interest Principal Interest 2016 $ 852,900 $ 456,146 $ 237,100 $ 115,559 2017 912,162 424,375 252,838 105,659 2018 943,338 390,117 261,662 95,261 2019 867,600 355,804 272,400 84,468 2020 903,775 322,242 281,225 73,280 2021 -2025 4,299,712 1,061,605 1,250,287 203,432 2026-2030 2,545,000 294,530 410,000 17,015 2031 -2035 180,000 3,600 - - Total $ 11,504,487 $ 3,308,419 $ 2,965,512 $ 694,674 General obligation bonds are subject to the provisions of the Internal Revenue Code of 1986 related to arbitrage and interest income tax regulations under those provisions. The various bond obligations contain certain financial limitations and restrictions. The ordinances authorizing the issuance of certificates of obligation bonds created an interest and sinking fund (general debt service fund). The ordinances require the City to ascertain a rate and amount of tax which will be sufficient to pay interest as it comes due and provide a reserve fund which is adequate to meet principal as it matures. The City is in compliance with all such significant financial restrictions. Changes in Long-term Liabilities Long-term liability activity for the year ended September 30, 2015, was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Government activities General obligation bonds $ 1,698,125 $ - $ 163,638 $ 1,534,487 $ 172,900 Certificates of obligation 10,610,000 - 640,000 9,970,000 680,000 Premium on bonds 161,498 - 10,429 151,069 - Capitalleases 140,436 - 40,735 99,701 42,424 Compensated absences 336,853 202,841 145,255 394,439 78,888 Net pension liability 1,434,564 90,913 - 1,525,477 Governmental activity Long-term liabilities $ 14,381,476 $ 293,754 $ 1,000,057 $ 13,675,173 $ 974,212 Business-type activities General obligation bonds $ 1,051,875 $ - $ 101,363 $ 950,512 $ 107,100 Certificates of obligation 2,140,000 - 125,000 2,015,000 130,000 Capital leases 1,629,163 - 89,921 1,539,242 93,393 Compensated absences 33,755 26,294 16,185 43,864 8,773 Net pension liability 168,541 10,681 - 179,222 - Business-type activity Long-term liabilities $ 5,023,334 $ 36,975 $ 332,469 $ 4,727,840 $ 339,266 39 The compensated absences liability attributable to the governmental activities will be liquidated primarily by the General Fund. Discretely Presented Lona-Term Debt Long-term liability activity for the year ended September 30, 2015, was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Revenue bonds 945,000 - 50,000 895,000 50,000 Texas leverage fund loan 540,737 - 37,148 503,589 38,372 Long-term liabilities 1,485,737 - 87,148 1,398,589 88,372 Other Information Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City's risk management program encompasses obtaining property and liability insurance through Texas Municipal League (TML), an Intergovernmental Risk-Pool. The City has not had any significant reduction in insurance coverage and the amounts of insurance settlements have not exceeded insurance coverage for any of the last three years. The participation of the City in TML is limited to payment of premiums. During the year ended September 30, 2015, the City paid premiums to TML for provisions of various liability, property and casualty insurance. The City has various deductible amounts ranging from $500 to $5,000 on various policies. At year-end, the City did not have any significant claims. The City also provides workers' compensation insurance on its employees through TML. Workers' compensation is subject to change when audited by TML. At year-end, September 30, 2015, the City believed the amounts paid on workers' compensation would not change significantly from the amounts recorded. Contingent Liabilities Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. The City is periodically the defendant in lawsuits arising principally in the normal course of operations. In the opinion of management, the outcome of these lawsuits will not have a material adverse effect on the accompanying financial statements and, accordingly, no provision for losses has been recorded. 40 Defined Benefit Pension Policies Plan Description The City participates as one of 860 plans in the nontraditional,joint contributory, hybrid defined benefit pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the TMRS Act) as an agency multiple-employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the System with a six-member Board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS's defined benefit pension plan is a tax- qualified plan under Sections 401(a) of the Internal Revenue Code. TMRS issues a publicly available comprehensive annual financial report (CAFR) that can be obtained at www.tmrs.org. All eligible employees of the City are required to participate in TMRS. Benefits Provided TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the City-financed monetary credits with interest were used to purchase an annuity. Members may choose to receive their retirement benefit in over of seven payments options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of the member's deposits and interest. Beginning in 2006, the City granted an annually repeating (automatic) basis a monetary credit referred to as an updated service credit (USC) which is a theoretical amount which takes into account salary increases or plan improvements. If at any time during their career an employee earns a USC, this amount remains in their account earning interest at 5% until retirement. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the employer match plus employer-financed monetary credits, such as USC, with interest were used to purchase an annuity. Additionally, initiated in 2006, the City provided on an annually repeating (automatic) basis cost of living adjustments (COLA) for retirees equal to a percentage of the change in the consumer price index (CPI). A summary of plan provisions for the City are as follows: Employee deposit rate 7% Matching ratio(City to employee) 2 to 1 Years required for vesting 5 Service retirement eligibility 20 years to any age, 5 years at age 60 and above Updated service credit 100%Repeating Annuity increase to retirees 70%of CPI Repeating 41 The City does not participate in Social Security. Employees covered by benefit terms At the December 31, 2014 valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 25 Inactive employees entitled to but not yet receiving benefits 90 Active employees 68 183 Contributions The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and the City matching percentages are with 100%, 150%, or 200%, both as adopted by the governing body of the city. Under the state law governing TMRS, the contributions rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal year. The contribution rates for the City were 11.61% and 14.44% in calendar years 2014 and 2015, respectively. The City's contributions to TMRS for the year ended September 30, 2015, were $483,133, and were equal to the required contributions. Net Pension Liability The City's Net Pension Liability (NPL) was measured as of December 31, 2014, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. Actuarial assumptions The Total Pension Liability in the December 31, 2014 actuarial valuation was determined using the following actuarial assumptions: Inflation 3.0%per year Overall payroll growth 3.0%per year Investment Rate of Return 7.0%,net of pension plan investment expense, including inflation Salary increases were based on a service-related table. Mortality rates for active members, retirees, and beneficiaries were based on the gender-distinct RP2000 Combined Healthy Mortality Table, with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements. For disabled annuitants, the gender-distinct RP2000 Disabled Retiree Mortality Table is used, with slight adjustments. 42 Actuarial assumptions used in the December 31, 2014 valuation were based on the results of actuarial experience studies. The experience study in TMRS was for the period January 1, 2006 through December 31, 2009, first used in the December 31, 2010 valuation. Healthy post- retirement mortality rates and annuity purchase rates were updated based on a Mortality Experience Investigation Study covering the 2009 through 2011, and the dated December 31, 2013. These assumptions were first used in the December 31, 2013 valuation, along with a change to the Entry Age Normal (EAN) actuarial cost method. Assumptions are reviewed annually. No additional changes were made for the 2014 valuation. The long-term expected rate of return on pension plan investments is 7.0%. The pension plan's policy in regard to the allocation of invested assets is established and may be amended by the TMRS Board of Trustees. Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income, in order to satisfy the short-term and long-term funding needs of TMRS. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates return for each major assets class are summarized in the following table: Target Long-Term Expected Real Asset Class Allocation Rate of Return(Arithmetic) Domestic Equity 17.5% 4.80% International Equity 17.5% 6.05% Core Fixed Income 30.0% 1.50% Non-Core Fixed Income 10.0% 3.50% Real Return 5.0% 1.75% Real Estate 10.0% 5.25% Absolute Return 5.0% 4.25% Private Equity 5.0% 8.50% Total 100.0% Discount Rate The discount rate used to measure the Total Pension Liability was 7.0%. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rates specified in statue. Based on that assumption, the pension plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all period of projected benefit payments to determine the Total Pension Liability. 43 Changes in the Net Pension Liability Increase(Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position (a) (b) (a)-(b) Balance at 12/31/2013 $ 11,192,430 $ 9,589,325 $ 1,603,105 Changes for the year: Service cost 589,507 - 589,507 Interest 794,485 - 794,485 Difference between expected and actual experience ( 102,280) - { 102,280) Contributions-employer - 397,779 ( 397,779) Contributions-employee - 239,832 ( 239,832) Net investment income - 548,705 ( 548,705) Benefit payments, including refunds of employee contributions ( 274,797) ( 274,797) - Administrative expense - ( 5,727) 5,727 Other changes - ( 471) 471 Net changes 1,006,915 905,321 101,594 Balance at 12/31/2014 $ 12,199,345 $ 10,494,646 $ 1,704,699 The following presents the net pension liability of the City, calculated using the discount rate of 7.0%, as well as what the City's net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.0%) of 1-percentage-higher (8.0%) than the current rate: 1%Decrease in 1%Increase in Discount Discount Discount Rate(6.0%) Rate(7.0%) Rate(8.0%) City's net pension liability $ 3,997,055 $ 1,704,699 $( 94,961) Pension Plan Fiduciary Net Position Detailed information about the pension plan's Fiduciary Net Position is available in a separately- issued TMRS financial report. The report may be obtained on the Internet at www.1mrs.org. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended September 30, 2015, the City recognized pension expense of$471,122. 44 At September 30, 2015, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual economic experience $ - $ 74,584 Difference between projected and actual investment earnings 98,038 - Contributions subsequent to the measurement date 371,083 - Total $ 469,121 $ 74,584 $371,083 reported as deferred outflows of resources related to pension resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability for the year ending September 30, 2015. Other amounts reported as deferred outflows of resources related to pensions will be recognized in pension expenses as follows: Year Ending December 31, 2015 $( 3,186) 2016 ( 3,186) 2017 5,318 2018 24,508 2019 - Thereafter - Subsequent Event Pursuant to TMRS policy of conducting experience studies every four years, the TMRS Board at their July 31, 2015 meeting determined that they would be changing certain actuarial assumptions including reducing the long term expected rate of return from the current 7% to 6.75% and changing the inflation assumption from 3% to 2.5%. Reduction of expected investment return and related discount rate will increase projected pension liabilities. Reducing the inflation assumption reduces liabilities as future annuity levels and future cost of living adjustments are not projected to be a large as originally projected. While the actual impact on the City's valuation for December 31, 2015 is not known the City does expect some downward pressure on its funded status and upward pressure on its 2017 actuarially determined contribution (ADC) due to this change. Accordingly, the city has included in its approved fiscal year 2016 budget to continue to fund pension contributions above the required ADC which will help smooth impacts of any increases in the required ADC for fiscal year 2017. 45 Other Postemployment Benefits Supplemental Death Benefits Fund The City also participates in the cost sharing multiple-employer defined benefit group-term life insurance plan operated by the Texas Municipal Retirement System (TMRS) known as the Supplemental Death Benefits Fund (SDBF). The City elected, by ordinance, to provide group- term life insurance coverage to both current and retired employees. The City may terminate coverage under and discontinue participation in the SDBF by adopting an ordinance before November 1 of any year to be effective the following January 1. The death benefit for active employees provides a lump-sum payment approximately equal to the employee's annual salary (calculated based on the employee's actual earnings, for the 12-month period preceding the month of death); retired employees are insured for $7,500; this coverage is an "other postemployment benefit," or OPEB. Contributions The City contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation. The rate is equal to the cost of providing one-year term life insurance. The funding policy for the SDBF program is to assure that adequate resources are available to meet all death benefit payments for the upcoming year; the intent is not to pre-fund retiree term life insurance during employees' entire careers. Schedule of Contribution Rates (RETIREE-only portion of the rate) Plan/ Annual Required Actual Percentage of Calendar Contribution Contribution Made ARC Year (Rate) (Rate) Contributed 2012 0.02% 0.02% 100% 2013 0.02% 0.02% 100% 2014 0.02% 0.02% 100% 46 REQUIRED SUPPLEMENTARY INFORMATION THIS PAGE LEFT BLANK INTENTIONALLY CITY OF KENNEDALE, TEXAS GENERALFUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES FOR THE YEAR ENDED SEPTEMBER 30,2015 Variance with Final Budget Budget Positive Original Final Actual (Negative) REVENUES Taxes: Property $ 3,182,216 $ 3,182,216 $ 3,174,142 $( 8,074) Sales 1,119,172 1,232,657 1,491,342 258,685 Franchise fees 858,856 858,856 910,886 52,030 Licenses and permits 217,540 217,540 261,761 44,221 Fines and forfeitures 323,599 323,599 227,295 ( 96,304) Public safety fees 238,190 238,190 247,907 9,717 Intergovernmental 45,000 45,000 137,882 92,882 Charges for service 488,516 488,516 459,651 ( 28,865) Investment earnings 300 300 722 422 Other 207,602 207,602 451,383 243,781 Total revenues 6,680,991 6,794,476 7,362,971 568,495 EXPENDITURES Current: General government 1,240,504 1,305,804 1,228,989 76,815 Public safety 4,349,131 4,349,131 4,240,832 108,299 Public works 886,776 886,776 803,885 82,891 Culture and recreation 283,199 283,199 268,377 14,822 Capital outlay 267,370 267,370 203,208 64,162 Total expenditures 7,026,980. 7,092,280 6,745,291 346,989 EXCESS OF REVENUES OVER EXPENDITURES ( 345,989) 2 97.804) 617,680 915,484 OTHER FINANCING SOURCES(USES) Transfers in 18,900 18,900 - ( 18,900) Transfers out ( 98,815) ( 147,000) ( 111,134) 35,866 Total other financing sources(uses) ( 79,915) ( 128,100) ( 111,134) 16,966 NET CHANGE IN FUND BALANCE ( 425,904) ( 425,904) 506,546 932,450 FUND BALANCE,BEGINNING 1,234,186 1,234,186 1,234,186 - PRIOR PERIOD ADJUSTMENT - - ( 8,291) ( 8,291) FUND BALANCE,ENDING $ 808,282 $ 808,282 $ 1,732,441 $ 924,159 47 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS FOR THE YEAR ENDED SEPTEMBER 30,2015 Plan Year 2014 A. Total pension liability Service Cost $ 589,507 Interest(on the Total Pension Liability) 794,485 Change of benefit terms - Difference between expected and actual experience ( 102,280) Change of assumptions - Benefit payments, including refunds of employee contributions ( 274,797) Net change in total pension liability 1,006,915 Total pension liability-beginning 11,192,430 Total pension liability-ending(a) $ 12,199,345 B.Plan fiduciary net position Contributions-employer $ 397,779 Contributions-employee 239,832 Net investment income 548,705 Benefit payments, including refunds of employee contributions ( 274,797) Administrative expenses ( 5,727) Other ( 471) Net change in plan fiduciary net position 905,321 Plan fiduciary net position-beginning 9,589,325 Plan fiduciary net position-ending(b) $ 10,494,646 C. Net pension liability-ending(a)-(b) $ 1,704,699 D. Plan fiduciary net position as a percentage of total pension liability 86.03% E. Covered employee payroll $ 3,426,174 F. Net position liability as a percentage of covered employee payroll 49.76% 48 CITY OF KENNEDALE, TEXAS SCHUEDLE OF CONTRIBUTIONS FOR THE YEAR ENDED SEPTEMBER 30,2015 Fiscal Year 2014 Actuarial determined contribution $ 397,779 Contributions in relation to the actuarially determined contribution 397.779 Contribution deficiency(excess) - Covered employee payroll 3,426,174 Contributions as a percentage of covered employee payroll 11.61% NOTES TO SCHEDULE OF CONTRIBUTIONS Valuation Date Actuarially determined contribution rates are calculated as of December 31 and become effective in January 13 months later. Methods and Assumptions Used to Determine Contribution Rates: Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage of Payroll,Closed Remaining Amortization 29 years Period Asset Valuation Method 10 Year smoothed market; 15%soft corridor Inflation 3.00% Salary Increases 3.50%to 12.00%including inflation Investment Rate of Return 7.00% Retirement Age Experience-based table of rates that are specific to the City's plan of benefits. Last updated for the 2010 valuation pursuant to an experience study of the period 2005- Mortality RP2000 Combined Mortality Table with Blue Collar Adjustment with male rates multiplied by 109% and female rates multiplied by 103% and projected on a fully generational basis of with BB. Other Information There were no benefit changes during the year. 49 CITY OF KENNEDALE, TEXAS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2015 (Unaudited) BUDGETARY INFORMATION - The City follows these procedures annually in establishing the budgetary data reflected in the budgetary comparison schedules: 1. Prior to the beginning of each fiscal year, the City Manager submits to the City Council a proposed budget for the fiscal year beginning on the following October 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted at which all interested persons' comments concerning the budget are heard. 3. The budget is legally enacted by the City Council through passage of an ordinance prior to the beginning of the fiscal year. 4. The City Manager has the authority to transfer appropriation balances from one expenditure account to another such as from salaries to maintenance within a single fund as well as transfer appropriations between departments. The City Council, however, must approve any transfer of unencumbered appropriation balances or portions thereof from one fund to another as well as any increases in fund appropriations. At the end of the fiscal year, all appropriations lapse. 5. Annual budgets are only adopted for the General and Debt Service Funds. These budgets are adopted on a basis consistent with generally accepted accounting principles("GAAP"). 6. The budgetary data presented has been amended from the original budget by the City Council. All significant supplemental appropriations were offset either by increased revenue or decreased expenditures in other accounts. Expenditures did not exceed appropriations in the General Fund or the Debt Service Fund. 50 COMBINING FUND STATEMENTS AND SCHEDULES THIS PAGE LEFT BLANK INTENTIONALLY NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds are used to account for specific revenue that is legally restricted to expenditures for particular purposes. Police Seizure — to account for the receipt and expenditures of revenues derived from crime seizures that are for police purposes. LEOSE — to account for grant revenue that is legally restricted to expenditures for LEOSE program. TIF #1 (New Hope) Fund — to account for the construction of New Hope Road from funds contributed by the City, School District and County. The Capital Projects Fund is used to account for financial resources to be used for the acquisition or construction of general major capital facilities. Financing is provided primarily by the sale of general obligation bonds and developer contributions. Park Dedication — to account for the acquisition, improvement and maintenance of park areas funded by neighborhood park land dedication fees. Capital Projects — to account for various constructions within the city from funds contributed by third parties. Roadway Impact Fee — to account for the assessments to developers on projects identified in the roadway impact fee study that was adopted by the City Council on May 9, 2002. Library Building — to account for the construction of a new library from funds contributed by third parties. CITY OF KENNEDALE,TEXAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2015 Special Revenue Funds T1F#1 Police LEOSE (New Hope) Seizure Fund Fund ASSETS Cash and investments $ 5,286 $ - $ 20,479 Receivables(net of allowance for uncollectibles): Other - - Total assets $ 5,286 $ - $ 20,479 LIABILITIES Accounts payable $ - _ $ $ 20,479 Total liabilities - 20,479 FUND BALANCES Restricted for: Public safety 5,286 - - Capital projects - - - Total fund balances 5,286 - - Total liabilities and fund balances $ 5,286 $ - $ 20,479 51 Capital Projects Funds Total Roadway Nonmajor Park Capital Impact Library Governmental Dedication Projects Fee Building Funds $ 31,285 $ 25,125 $ 300,683 $ 10,147 $ 393,005 - 6,216 - - 6,216 $ 31,285 $ 31,341 $ 300,683 $ 10,147 $ 399,221 $ _ $ _ $ $ $ 20,479 20,479 - 5,286 31,285 31,341 300,683 10,147 373,456 31,285 31,341 300,683 10,147 378,742 $ 31,285 $ 31,341 $ 300,683 $ 10,147 $ 399,221 52 CITY OF KENNEDALE,TEXAS COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED SEPTEMBER 30,2015 Special Revenue Funds TIF#1 Police LEOSE (New Hope) Seizure Fund Fund REVENUES Intergovernmental $ - $ 1,795 $ 17 Fines and forfeitures ° - Licenses and permits - - - Investment earnings 2 - Contributions - - Other - - ' Total revenues 2 1,795 17 EXPENDITURES Current: Public safety 4,872 1,803 - Public works - - 47,048 Culture recreation _ ` Total expenditures 4,872 _ 1,803 47,048 EXCESS(DEFICIENCY)OF REVENUES OVER(UNDER)EXPENDITURES ( 4,870) ( 8) ( 47,031) OTHER FINANCING SOURCES(USES) Transfers out - - - Transfers in - - 45,919 Total other financing sources(uses) _ - - 451919 NET CHANGE IN FUND BALANCES 1 4,870) [ 8) ( 1,112) FUND BALANCES,BEGINNING 10,156 8 1,112 FUND BALANCES,ENDING $ 5,286 $ - $ - 53 Capital Prt jects Funds Total Roadway Nonmajor Park Capital Impact Library Governmental Dedication Projects Fee BuildinE _ Funds $ _ $ - $ - $ - $ 1,812 - 1,187 1,187 - 84,250 - 84,250 11 16 102 3 134 - - 2,153 2,153 375 83,325 - - 83300 386 83,341 84,352 3,343 173,236 - _ - 6,675 - - - - 47,048 1171 - - 1,416 4,587 3.171 - - 1,416 58,310 ( 2.785 83,341 84,352 1,927 114,926 - (52,000) ( 45,919) - 1 97,919) - - - 45,919 ( 52,000) ( 45,919) - ( 52,000) t 2,785) 31,341 38,433 1,927 62,926 34,070 - 262,250 8,220 315,816 $ 31,285 $ 31,341 $ 300,683 $ 10,147 $ 378,742 54 THIS PAGE LEFT BLANK INTENTIONALLY CITY OF KENNEDALE, TEXAS DEBT SERVICE FUND SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES FOR THE YEAR ENDED SEPTEMBER 30,2015 Variance Budget Positive Original Final Actual (Negative) REVENUES Taxes-property $ 1,129,639 $ 1,129,639 $ 1,120,298 $( 9,341) Investment earnings 24 24 23 ( 1) Other 153,519 153,519 153,519 - Total revenues 1,283,182 1,283,182 1,273,840 ( 9,342) EXPENDITURES Debt service: Principal 844,372 844,372 844,371 1 Interest and fiscal charges 498,735 498,735 493,943 4,792 Total debt service 1,343,107 1,343,107 1,338,314 4,793 Total expenditures 1,343,107 1,343,107 1,338,314 4,793 EXCESS OF REVENUES OVER EXPENDITURES ( 59,925) ( 59,925) ( 64,474) ( 4,549) OTHER FINANCING SOURCES(USES) Transfers in 76,001 76,001 72,000 ( 4,001) Total other financing sources(uses) 76,001 76,001 72,000 ( 4,001) NET CHANGE IN FUND BALANCE 16,076 16,076 7,526 ( 8,550) FUND BALANCE,BEGINNING 2,849 2,849 2,849 - FUND BALANCE,ENDING $ 18,925 $ 18,925 $ 10,375 $( 8,550) 55 THIS PAGE LEFT BLANK INTENTIONALLY STATISTICAL SECTION THIS PAGE LEFT BLANK INTENTIONALLY CITY OF KENNEDALE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2015 STATISTICAL SECTION INDEX (Unaudited) This part of the City of Kennedale'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 Tables Financial Trends 1-4 These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity 5-8 These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt Capacity 9-13 These schedules present information to help the reader assess the affordability of the government's current level of outstanding debt and the government's ability to issue additional debt in the future. Economic and Demographic Indicators 14-15 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 16-18 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. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. THIS PAGE LEFT BLANK INTENTIONALLY 0o a �n r rn ni r � r o0 N N ^ M M V3 Vi 69 69 69 V1 r N 'o 00 Q\ ul N 7 N to lc vl M o0 lO lc V M 0�0N- � ^ a N N M M fA 69 69 b9 69 69 0 DD O M 00 M 00 M . M p ry h i s � N O or N M M N T Vt N p N N ^ M M 69 fn (H 609 69 69 p .�. 1 N w'1 M N 00 N O oo N V 00 vl 00 �D O M W oo O O N N M a0 O M N N N M N M 69 69 69 69 69 69 r M N - O M T 0 0 0. o rn �o 0o rn� r N M 69 Vf 69 69 69 69 y I.s. o oo v �n oo r of O h r m oo M}} 0 o0 0 oo �! F oo M O d G17 69 69 69 69 69 69 a � � d O U d< V M _ N M N ^ M h A m y oo w r h M N W W 7 O N N 7 lo Z W 00 .N. 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O 1p 0, M O V ,0 O O ,O 7 V V R 00 00 N M D\ M M Wl (n W V3 6n 69 6n 69 V A W U ° r001on rn 110 rn 01 yr mo °Oo°o - o � °n° oho nomo W z H 7 0 r- 00 I r- 01 N N N 01 b O -- 'r1 rl 'n M J M 01 7 0 M C V 10 M 10 N T ,0 M M In M 7 N h l- W W H N ^ M •� l� N N 01 N N M O z �n Uoo rn r%1 N I� O M .� M r [� t` 7 M N M•7 ^ ^ 1p N rl 00 ^ 7 1p U W V M N M h 0 N N M W r rl n rl O on V O N O ,--• ,O n Q, Q, V V M f� O M 'n 1p M O D\ W on vt M O 7 1p 00 00 00 N M 7 ^ N 00 N O ^ N N 7 M M O r — 'n t`^ J a Ol r r r T 00 - 10 ^ " M CI " N 'n 10 T N O V1 O, N Vl 00 O f� r 00 W 'n 10 D\ n V1 'n O 11 O O Orl N N ^ 10 M M Q: O ^ T V 'n V 69 69 69 6n 69 v M O ^ N -1 M h 'n M N ,0 1 r 10 7 7 on 0, 7 O n d` N 'n O a\ r R w N O M m W 0\ O W 1p f� 7 rl N 10 10 n 1p 7 ,0 ^ ^ O N �1 V N O 10 0, r O 7 M W C7 GD t` 'n'n r1 O O o o N ^ r�l 10 10 rn oo M 7 I rl^ 69 b9 69 N N N N N - N > > G R > N N C N t` C C N to on a n X v axi N 4J R 2 N N R G N N > r- `° o > i ^on =n ° m =0 e°u n,`o a 7. a• �. to 0 to 6 ri = F°- F- Fes- aoV daUw "-' 3 p oU O U '-" U U [-. o - ^/,V m C V o] w V 0] cl to .] r oo M oo r n^ oo N ^ 00 0. lo rn lo m v o^ o o� r ° o: o0 w r r rn 10 N r V r vl T 000 W O 00 m 7 N O^ ^ 00 O N V 10 10 10 69 M (c N W O c O. ^ 1� h M 00 10 � Q` 00 O V N N ^ N N m 10 10 P 7 w V ON O\ O` O OC O O 00 � n N N W O� lO '/� N O_ 10 W N Vl ° M ^ 7 h V1 M ^O O W N N 10 69 O. 00 N ^ 01 0, 00 ^ 7 O o, V N N l� 10 M Q\ 'n O, �C V W ' O n U M 13 N W N b 10 10 ^ W M ^ ^ O N r- N N h O vl W W N O, W W Q` M N N M ^ 10 N M U 69 U w l� M M M 00 r O O N 10 O N N N V 7 00 M lc N O� N 1� 00 N N O 7.N rl '✓QJ'' O 'M'/1 00 M 10 'M 'M M ^ O V W O (� O M r• F Q ^ Vl O O N M N z C U U l- 10 O, I� O 7 ° r- .M. r � vl O V] N N W �O M r- N ' [� O r O� r- D\ 10 V1 'n 00 O 'n 'n M V '/'1 O O 00 00 'n M m Vl N M O 00 N a O M 00 V 'O O w O 00 D\ 00 O 00 ICI V 00 N N O U h O I- 10 h M O N r- N V O O lO r 0 1 ' h N W U 00 M O'^ O M 'n O 'n D\ M 00 O O� O U Q` O N O M N ^ 00 'n 7 O ^ [� D\ V 'n ^ b N rl r h O Vt V1 O O V1 I� 'O O N DD r lc M N lc N r%0` ^ M N M ° IT 7 w N t` ^ 101 'n O O� U l� V O. U N �O o M O W 10 O\ N 0 N N N ^ M N 69 O �O 00 W 'O O 00 7 W .-- n " 0 0 O M t` N N O, N 00 O O lO W 7 U N O 10 U] m '0 M r ' M ' O, N 7 10 O 0 v1 O N iO r- r N N L N ^ a 7 ^ ^ M F z z W c� z a z U W x A > > v z aci E E o > � v W c v > .7.�' .N•ll N .: CD OA 0. :. OD el > a E w E z z G a v n z a n {s,7 a rL v> > 5 > z .E WV 07 2U co C7 U THIS PAGE LEFT BLANK INTENTIONALLY r 00 M M 69 69 69 69 M V) 00 10 00 10 r- N 69 69 69 69 00 000 O OCi N m 7 rn O\ 00 V1 M M C (71 N 02 C N 69 69 69 69 '. 00 Cl O �O ON V) n � O N 'n M [- O 00 o0 0) O N O N r r C' .M. I I I r N O N 69 69 69 69 00 00 \O O Iry 00 M b M � 12 000 O) OCi N T I I M M m Y Y J 0 C I r M C M M W 0 In N 6H 69 69 69 Fi 0 -n ON W v r Vl [% 0 \O M O O M �o I I O 69 6A kn �F7Fj-1 FPM 00 0o M 01 7 �O A Z N N N O O I M jFL`7yJy �D N N CD CD �D PLO n r; c O69 69 69 69 V v a ° o N ' M ' M 00 �--�m r I M ro oc C ~ N N N ~ Cd U 69 - 69 69 69 L"r 10 M M OO 7 O N I 1 1 1 1 ; CD z N 69 69 V) 69 E N a+ T D\ C 'Mn 0000 J-+ r r 'n 'n N c o 10 ^ L O N N ^ oo Q N N N ^ N 69 69 69 69 � Op- CN G N � yC O C ti rn N G _ C C N N N 6 N y y O• o •U 'fl •� O G .� C y by 0 y to ro aN�i a"i ZZ Fo- s ay�i a a-a J= a i Z o U 0 a� c o- W U M — N - — T f frl rrl ^ T W M M M r — M 7 (�] 10 — M Cl M 10 m M 7 r oo Q` 7 M 7 N cD t` 7 r` �D O 7cl o0 7 m O\ rl ll 0 t` N V M U 10 10 w - U O N r-s vi 00 0o O w O - 'D M �n GC �_ O` V N 't In M — N N n 7 N Vl Vl — U 't O\ M a O lD '1 N N 7 'D n M N V1 O O w N w 00 7 00 (..� N cD 69 N In O" W 00 O O t� O 7 M w — M M U t` 00 — r C O O V1 V 7 C N M M O\ 7 lD 00 V1 00 1 M r 'z ^ M W 10 t` 11) 7 0o N O b O^ Ol— a\ N O b O 00 t� t� 7 7 N 10 N �O V V 0 t N O 00 N t\ O V N N �D �D M ^ Vl On Vl O N — 00 Vl O� N ID W ^ r 69 N ^ V 00 �D O 7 00 M 10 7 0 V 0 O, O Q` V N V1 z � T � N 10 10 7 W o0 O\ 7 \O V N O n vl M r O\T -� V1 - O o0 I 7 ^ 00 00 O\N M � 0o O M Q` 00 r T 00 'D N W N m M 7 O z V z N N O` b Ol V) n w N '- M V1 O O 00 V1 10 O V1 00 t\ N N N M Vl 7 O N V) 00 \D �D N \D 00 V) '+ N 'n 69 O. 00 �O 10 N V1 O t` 00 00 10 00 V1 Z M O\ V1 \D N M !` N N 00 t` M 7 M D\ Vl CI O t` M ol 0o Q. �� 0o Vl 00 O n 0o O \D nl 0o O a n V'i o0 N \ ^ \D O oo V1 N Vl m 1 M M N O r O� i \ ^ O\ M 'n 00 'o n V1 10 M It � O N V1 00 O\ M N N V O\ M C N V1 O� 'D 00 N 01 t` Vi lD N 10 N 69 OO r` M M V1 V Vl 01 V1 01 V N O\ Q1 O n 00 7 r` oo g O O O\ ,n z V1 t` O 00 n O+ z M oo O O 7 O Vl 7 ^ 0o V1 �M O n O N Qn O�O 7 r- N 01 O` M 00 Z O\ 10 10 M M Oi O` 7 O\ O t` O 7 7 'D �D O In O V1 r- t` r` N \D O z t` N \D T — W O oc N N N M N V1 O\ r` N V1 00 �O` N V1 \D r ^ N N z A N z Vi 7 7 O, M m N w 00 �D N Q\ Vl M Vl z Vl � O\ N 00 8 Z O t` O, Z �D O I'- z D1 M D 11 M I M b D\ 7 O O a z a N O O On V O N ' V1 V o0 O\ t` cl M b V D1 V W O v - vOMr` -q M * c�oM�Moo�DOO w N w a Q� Gi 1 ^ N ON M M O\ n V oo0 lD �D ON O a t V 1 � A a a oN oo N V V .� W z vv, 604 C o O Vl O n N M r` M N O\ \D t` O O O) F-1 z z O "n 7 Vl 00 Vl z ol V1 7 n M M 00 V O 00 Q\ O Q 11(w�^l FBI 'Z W 7 M N lO Vl \O N M \O lO N r- O �D lO ��,,// O\ M � V �D Vl n r Vl 7 D1 7 01 00 M 7 W V W FI O) un DD t- O N t` 00 ^ N V M O\ � r` M W V) M V f rr hh O n ^ N N M W V1 M 7 r` \D 00 -- M 7 V1 O 0 a b9 HV 00 O N N O\ 'o o0 00 o D\ M r 01 7 r` M N V W M M 7 M N N M 00 00 V V V O 00 7 r- N nllc T N — 7 O 00 N t` -� O 00 O O ^ M w r W W t� N M O � --� T 7 O O, 00 Vl r- t� M O m b O M N "t Vl O` 't D\ O T O1 M b t-- 00 M N n 7 Vl O On M M N N ul t- Vl cD �D 7 N W N 7 t [ 69 O W O O C, 10 M r M N O� [� \D N r O, W T M M " D\ n M f (� z 7 Q\ M W N r M r M .- 00 �D O m n T O M O1 l- N �' M O O M V1 In M Q\r l� V) �D O O M Cl M W 7 * d' T rrl Cl 7 00 a, M 7 n f� D1 O n Vl V N N N M 00 N 7 \D — D b9 N M — O 10 \0 In N O 7 frl M r V1 CO V1 — W N 10 W 00 O 00 00 r N W W Vl V �O 00 V1 t` 0 O N Vl — 00 O In V V1 -- ut \O 7 �D M oo \D �n 00 1 — M U in 01 01 V CO 10 O r 7 00 M CO N O, O 10 r� — 00 "n M r 01 O \O O — z M O O Vl F, 10 00 N 00 M N M N N lO O n r 7 f� N r — t` N a 10 - 10 69 N �7 N N U L Y d G C td ` > Cz] ` D N > r/] d w ,O tE C U N F O t'U' 2 F O a m - o on U 0 N D > p N j L U D U 'a C c N L d D L7 'LU c _ m LL) UM t� M 00 V1 e w lc oc 00 10 � 1 1 . . 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Q Q O TABLE 5 CITY OF KENNEDALE,TEXAS ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Estimated Less: Total Taxable Total Actual Fiscal Residential Commercial Industrial Tax-Exempt Assessed Direct Taxable Year Property Property Property Property Value Tax Rate Value 2006 245,139,446 77,256,198 85,856,921 24,184,114 $ 384,068,451 $ 0.722500 355,857,239 2007 270,260,979 100,479,893 63,873,173 24,256,548 $ 410,357,497 $0.722500 387,653,132 2008 312,684,160 134,767,896 63,410,764 67,863,127 $ 442,999,693 $0.722500 435,040,102 2009 350,723,577 149,299,553 63,260,388 65,266,179 $ 498,017,339 $0.722500 465,458,096 2010 393,021,180 155,428,659 73,950,746 80,779,880 $ 541,620,705 $0.722500 510,872,435 2011 381,137,736 151,493,926 52,806,301 63,490,789 $ 521,947,174 $0.722500 515,013,256 2012 367,644,619 130,187,379 54,138,047 63,654,327 $ 488,315,718 $0.722500 546,171,493 2013 363,808,684 121,802,411 60,407,246 70,604,766 $ 475,413,575 $0.722500 539,484,058 2014 369,809,150 122,562,814 62,617,391 74,529,874 $ 480,459,481 $0.747500 531,917,562 2015 397,852,963 124,012,479 45,641,853 69,044,161 $ 498,463,134 $0.747500 566,137,723 Source:Tarrant Appraisal District Totals Report(September). 62 W Y ca Y ON QN m 00 00 01 01 01 01 01 rn M m 00 00 00 00 00 00 00 cC ❑ Y v1 Vl O l- l� l- l- N N N[- N cq M rn cn N N N N � Cd O N N N N N N N H U x Q O C C O G O C O O O 69 69 69 69 Is 69 ds 69 69 69 0 0 0 0 0 C. 0 0 0 0 Y y Y 00 00 00 110 [— d' l- n O O tO U M M M O\ I'D ID O1 ON kn kn C O� O\ ON ll- 00 00 ON ON •y M M H U u A O O O O O O O O O O 69 69 69 69 69 69 69 69 69 69 [y OA O O O O O O O O O O •d �+ O O O O O O O O O O N CN — � V ct V O � r- 110 I'D �-o \0 Q cd O N N N N N N N N N N O O O O O O O O O O C41 69 69 69 69 69 69 69 69 69 69 O VJ �' d� U a N _ _ _ _ N i O O O N c� cn 110 ^d O c) O 00 00 00 N N V7 �n .�-. F G+•' U vi 00 (� M � � � 7 N E" 3 Q 69 69 69 69 69 69 69 69 69 69 W o �+ a o 0 o O o 0 0 0 0 o a o 0 0 0 0 0 0 0 0 0 0 kn kn kn Wn Wn Wn kn kn kn kn u CJ V Y N N N N N N N N l— r- L] M W id U U N N N N N N N N �t p O O O Cl O O Cl O O O hil a H a/ 69 69 69 69 69 69 69 69 69 69 U d p, E F, �a o x o U a Cd on U 69 69 69 69 69 69 69 69 69 69 A A 0 U Q N ON ) O i OC\ 0000 00 0000 C C ., U "o M 00 M � M v rn o N F y � � O\ rn l0 on rn O, v kn v o oo rn C7 O O O O O O O O O p O O O 69 69 69 69 69 69 69 69 69 69 ,F, O U N Y O L Y n 00 �o CN a, M r� 00 N 000 N cad cYd N N r- 110 � w ti U �r IIR \10 Wl n Wl Ln v'1 In Cd N Cl O O O O O O O O O }- 69 69 69 69 69 69 69 69 69 69 Q G a. L fe L N C) 00 O\ O_ _ N M �n Q> N ce N O O O O O O O O O O � ✓�' N N N N N N N N N N O z TABLE7 CITY OF KENNEDALE,TEXAS PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO 2015 2006 Percentage Percentage of Total City of Total City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value Value Value Value Chesapeake Operating $ 17,483,590 3.51% $ - - % FWT Inc 5,455,103 1.09% 8,574,937 2.23% Goss International Americas Inc — - % 9,542,036 2,48% Hawk Steel Industrial Inc 8,433,251 1.69% 3,629,352 0.94% Oncor Electric Delivery Co LLC 7,208,222 1.45% - - % Trinidad Drilling LP 6,700,000 134% - % Kennedale Holdings LLC 6,594,425 1.32% - % Hexpol Compounding LLC 4,487,850 0.90% - % Newark E&P Operating LLC 5,917,480 1.19% - % Harrison Jet Guns lI LP - - % 4,562,291 1.19% XTO Energy Inc 4,878,560 0.98% - - % DFW Midstream Services LLC 4,195,400 0.84% % Southwestern Bell - - % 6,580,931 1.71% TXU Electric - % 6,275,395 1.63% Redi Mix Inc. - % 2,629,732 0.68% Bloxom,DE Sr.Fnd Rp Hold LLC - % 2,246,382 0.58% Excel Polymers LLC - % 7,329,408 1.91% Rebar Services&Supply Co. - _ % 3,300,528 0.86% Total $ 71,353,881 14.31% $ 54,670,992 14.23% Total City Taxable Assessed Value $ 498,463,134 $ 384,068,451 Source:Tarrant Appraisal District(October 1,2014 Top Taxpayers&October 1,2005 Top Taxpayers). 64 TABLE 8 CITY OF KENNEDALE,TEXAS PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Collected With the Taxes Levied Fiscal Year of the Levy Collections Total Collections to Date Fiscal for the Percentage in Subsequent Percentage Year Ended Fiscal Year Amount of Levy Years Amount of Levy 2006 2,571,069 2,530,550 98.42% 20,260 2,550,809 99% 2007 2,825,644 2,748,063 97.25% 56,046 2,804,109 99% 2008 3,170,554 3,103,077 97.87% 67,450 3,170,527 100% 2009 3,645,994 3,362,931 92.24% 213,578 3,576,509 98% 2010 3,885,545 3,809,167 98.03% 78,849 3,888,016 100% 2011 3,749,561 3,695,515 98.56% 64,478 3,759,993 100% 2012 3,964,881 3,890,850 98.13% 52,738 3,943,588 99% 2013 3,937,340 3,880,817 98.56% 55,843 3,936,661 100% 2014 4,083,024 4,015,994 98.36% 20,978 4,036,972 99% 2015 4,231,865 4,174,320 98.64% 97,496 4,271,816 101% Source: Tarrant County Tax Office,Summary Part C(As Of September 30,2015). 65 n' O\ N M 11-1 ' M In N O, O, 7 N l— 'r 37 M O, N U �o a\ r7 n M � 0. �d ^ N N N N N CV N N U o 0 0 0 0 0 0 0 0 0 bb C .1 o 0 0 0 0 0 o 0 p N t` M M^ M O �o l� �o 00 O U N U O O O O O O O O O O a o .. fri 0 N N O _ O C D1 r o0 rt 'zt 01 O [- N O O N cd cd 00 n M M l— a> 't ^ O YO n O� IN -It 0 0 O\ M �o T lo O In LO N N N a N N C b V C W 'C �o M_ M l— 00 O1 00 M p \ a. O vMi O O O^ � N "0 ON rn M E U,, Cd O l� M O l— M N N M U e C � M p, W N r• r- �o n e 'O ,n 00 U •� ,-. ,-. N n G T ; r N o 0 0 0 0 0 0 0 0 0 a U a ° p O00000000o pa + s9 0000000000 �y ° 4. �_ novivioo nC)C i •� c w o += o w asOOOOO, t-- �o � �o cl n o0 M N O O d .0 O N W N N N N N N N N N NO ¢ O U ++ CC d n n ON � ' r •� 4; A o0 o r U ono N � v� v � d N U o o a o ° Y o O o 0 W W H 1 v M Nyd c a y v C N A � d � � p °' T ° � •C aCi aCi aCi aCi a Q � �: C M In 00 00 O O ,n 1n C14 > }'• +�'' d ° T E T T G •� C7 °' •� 0. `i' id n. A. 0. 0. .d a0i Z d a W y O C ' Oi f+1 N 00 00 �O ,-: O C �, p, .° (U m cd O �o O� N M 7 n n n y cd s, C N N cd cd cd cd cd in n 'IT M N �--i O 01 N 3 a' CU. O � T a, a. ai a. a, . [� A O •� C N y O O P. G. G. " CL odo o wa^i c V v7 Y C .b D1 �U•, •� �., 4) O O o , , , , , r 00 0 ri o Q y fn .b C °., N N N N N d ai C p N a,M ,G ,C ,C ,Fi .2 N oo a1 7 ^ - 00 o n \o C cCd `� Gy, N C C G C 3 rn o M �o O 00 01 �o M O O O Q a� G A A A A cd m oo N � �O M C1 00 ,-r O O, fn cd A C C C C N AO ._ a 00 7 l— N N IT O1 N 7 O, 'O ,� C ¢• O O O O U M M N Cl M N N N U O A A U O' O cd id id O 'b A O '+ F.. y bD oA bA 0_D a. p p A A A A O w C', O O O O o 0 n �o 00 ON •cd U O O O c'"' �- 4" c'"" O M C y C O O o 0 0 0 n N D1 �o bA 4 O C O O O O O n O U In O O O o In U 3 U A U M l- l- 17, N ^ ^ 0 0 V ^ N Q V ,O � N N n c� N U N N 440- 40- cd 00 U U U U N c aj o 0 0 0 0 0 0 a� o c ^ c c > n In In o n o ai o > c o c °—' °o °O C5 °o > p 'o N Oo rn In Y a� A p o 0 0 o p U o N N vi obn9 o b ro ,+�- In o 0 o cd co N a x Q° � C ° ° k. U C C y C = V O Gq ) V 'O 00 00 11) O O n n v � Z a) I- 00 00 �c n n r- N 00 C 't1 i n N \ r, o0 o0 U cd Om N N N fV N N V U O ,0 L U L U L L L L L L L L L cl: In In O O O O -- O O O O o O O O O O O O •ry �"' N N N N N N N N N N c0 Z TABLE 10 CITY OF KENNEDALE,TEXAS RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS General Bonded Debt Outstanding Percentage of General Actual Taxable Fiscal Obligation Certificates Revenue Value of Per Year Bonds of Obligation Bonds Total Property Capita 2006 3,605,000 - - 3,605,000 0.94% $ 586.2 2007 790,000 2,695,388 265,000 3,750,388 0.91% $ 609.8 2008 7,770,000 2,571,888 225,000 10,566,888 2.39% $ 1,638.3 2009 7,540,000 2,442,213 185,000 10,167,213 2.04% $ 1,506.3 2010 9,270,000 2,306,363 140,000 11,716,363 2.16% $ 1,732.4 2011 12,235,000 2,161,250 95,000 14,491,250 2.78% $ 2,142.7 2012 11,917,355 2,013,050 50,000 13,980,405 2.86% $ 1,979.4 2013 11,371,926 1,868,675 - 13,240,601 2.79% $ 1,818.8 2014 10,771,498 1,698,125 - 12,469,623 2.60% $ 1,682.7 2015 10,121,069 1,534,487 11,655,556 2.34% $ 1,454.9 Source: Table 5, 9 and 14. 67 TABLE 11 CITY OF KENNEDALE, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER,2015 Estimated Share of Estimated Direct and Debt Percentage Overlapping Government Unit Outstanding Applicable Debt Direct Debt(Table 9) City of Kennedale,Texas $ 11,755,257 100.000% $ 11,755,257 Subtotal,Direct Debt $ 11,755,257 Overlapping Debt Arlington ISD 759,612,485 0.040% 303,845 Fort Worth ISD 782,490,000 0.110% 860,739 Kennedale ISD 41,169,449 41.300% 17,002,982 Mansfield ISD 788,320,000 0.250% 1,970,800 Tarrant County 333,795,000 0.420% 1,401,939 Tarrant County Hospital District 23,440,000 0.420% 98,448 Subtotal,Overlapping Debt $ 2,728,826,934 $ 21,638,753 Total,Direct and Overlapping Debt $ 33,394,010 Ratio,Direct and Overlapping Debt to Taxable Assessed Valuation(Table 5) 5.90% Source: Texas Municipal Reports per the Municipal Advisory Council of Texas,Other Entity Annual Financials and Table 9. Notes: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Kennedale. This process recognizes that, when considering the City'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 overlapping government's taxable assessed value that is within the City of Kennedale's boundaries and dividing it by the overlapping government's total taxable assessed value. 68 TABLE 12 CITY OF KENNEDALE, TEXAS LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS The City Charter of the City of Kennedale (Section 6.05), Texas does not provide for a debt limit. The debt portion of the overall tax rate may rise as high as necessary to retire debt for the coming year without triggering the threat of rollback. Under the provision of Texas State law, the maximum tax rate is limited to $2.50 per $100 assessed valuation. The tax rate for fiscal year 2015 was established at $0.747500 per $100 assessed valuation based on 100% of net taxable value. 69 M � .Wa > u H b o 00 U � Cd Q U I 1 I I I I , , Cd U rfp X � G N I I I I I I 1 t 1 I N U W ti. O pUD C >O U GJ U 60) a a� y b b C N o � GQ y e I I e 1 e I , a 0 U 00) U a� ¢ � A •U I e i I I 1 1 I � � Lp. C VJ L/ ¢ 0. C F" � W .� � •°— aXi U W ) WA U ¢ U sA k. � z ooInoMC� I- tMN JN NNN �--� ^' N O W U fA id Ise, n r t` O 00 C\ M M In C1 V W In 0 0 It [— In N M N In 04 C1, �p N O �o C n Cl n U LL [� (7, ^ N M cCd a� W) In O 00 O In O M O N a, N W) 00 O N n �O O Q �y 00 In M 00 00 �o M G 'U a1 O C, C\ 'o O D1 '0 r U G N 00 00 Z O N M N N N N N N In p" •C O � W o G N C) p U N O � 7 m M l- fr) I� rq n ^ N 01 In 00 � 59 b oq G �o 00 N M C) 00 �O O N 00 N 00 01 O m C� y %O l- a\ r- In N O lO C\ M In O 00 V V 110 O C, N G In O M CN t` O (D N �o N a N rV N N N N r�) U U 00 O 20 00 ol N In rq C, 0 7 7 C U rn C� In N M `l r 00 N "n In U U O O In Cl) �O Cl) Til 00 In M '> L. 7 �o 00 M n rr) �O Cl) [� 00 Oq 00 C/) U N N N N N r) C-) M C7 M ti N I Q r- O -- N M V -n ti U O O O O .0 O O O O O O O O O O Z (y, >"' N N N N N N N N N N TABLE 14 CITY OF KENNEDALE,TEXAS DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Per Capita Calendar Personal Personal Unemployment Year Population Income Income Rate 2006 6,150 49,091 53,901 5.1% 2007 6,150 49,091 53,901 5.1% 2008 6,450 49,091 53,901 5.1% 2009 6,750 49,091 53,901 6.7% 2010 6,812 49,091 53,901 8.5% 2011 6,914 49,091 53,901 7.7% 2012 7,063 49,091 53,901 6.3% 2013 7,257 49,091 53,901 6.9% 2014 7,394 49,091 53,901 5.7% 2015 7,992 49,091 53,901 4.3% Source: Population: City of Kennedale Planning Department. Based on 2010 Census date with annual updates from City Staff. Personal Income&Per Capita Personal Income:United States Census Bureau,2010 Census. Unemployment Rate: United States Department of Labor, Bureau of Labor Statistics (BLS). Adjusted yearly average based on the Local Area Unemployment Statistics(LADS)Program. 71 TABLE 15 CITY OF KENNEDALE,TEXAS PRINCIPAL EMPLOYERS CURRENT AND FOUR YEARS AGO 2015 2011 Percentage Percentage of Total City of Total City Employer Employees Employment Employees Employment Fort Worth Tower 505 32.60% 289 20.76% Kennedale Independent School District 408 26.34% 405 29.09% Speed Fab Crete 164 10.59% 118 8.48% ARK Contracting Services 52 3.36% 115 8.26% Harrison Jet Guns 35 2.26% 80 5.75% Hawk Steel 69 4.45% - % Mike Conkle's Custom Cabinets 48 3.10% 52 3.74% City of Kennedale 71 4.58% 86 6.18% Excel Polymers 14 0.90% 78 5.60% Goss International 42 2.71% 27 1.94% Texas Tile 38 2.45% - % US Galvanizing LP 12 0.77% 27 1.94% Stovall Electric 18 1.16% 30 2.16% Redi-Mix LP 13 0.84% 18 1.29% H&O Die Supply 9 0.58% 17 1.22% RE Watson&Associates 34 2.19% 15 1.08% Global Servo Hydraulics 11 0.71% 9 0.65% Wear Master 6 0.39% 5 0.36% Grover Corporation - - % 21 1.51% Total 1,549 100.00% 1,392 100.00% Source: Economic Development Department. 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N N N d A r > A 55 c Vi Z U ,n Q ¢ 00ttMQ ,no Oo Q Qr kn �Z z •--i z , , , z N z , M O z z (, N rTr W F F ° o F b Q v2 O z , , , z z , M N , z z bD LFI d o a N p U Q1 U c� F cC ' F L a p o d 00 rn Q W) o O o ¢ Q y > U N v-i kn o z rr) O O O O O -p N -v 3 r, ¢ ¢ r-1 N r1 Q kn 0 0 o Q Q N v, kn O rr CIL nj , , z z O 44� CD O N 3 a) 04 �" c � O T cd •p i O p^�j 7, U G 'x i N cc3 _ C Y 4. ,n cC 4. -a O Cd O O y :r^ rn .O �y U 'U O N O Cn bli fn L 3 _N G M L V] 4+ � VI y w V] L VI a•�� Q) Y y c U v o > c c a v N 'b 3 y c> b v � U � c .o � � cn a� � � o � •� � � c G L � 3 c � U � o .° o ° a s uti °T° N I L °' Y w C7 mss° c_ .�+ O O N Y i ,x U cC p p N cd L O �. ti m 2 cnNa � cn yUs � x � [- � ¢ ao� C/) � 3ii � � U) V) � � o aD W. ao o: O a. 3 3 F- z THIS PAGE LEFT BLANK INTENTIONALLY KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: EXECUTIVE SESSION -A. I. Subject: The City Council may meet in closed session at any time during the work session or the regular session, pursuant to Section 551.071 of the Texas Government Code for consultation with the City Attorney pertaining to any matter in which the duty of the City Attorney under the Texas Disciplinary Rules of Professional Conduct may conflict with the Open Meetings Act, including discussion on any item posted on the agenda and the following items: 1. Land use amortization (6727 Hudson Village Creek Road) 2. Floodplain amortization and remediation II. Originated by: III. Summary: IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: VII.Alternative Actions: VIII.Attachments: 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169 KENNEDALE You're Here,Your Home www.cityofkennedale.com Staff Report to the Honorable Mayor and City Council Date: February 15, 2016 Agenda Item No: RECONVENE INTO OPEN SESSION, AND TAKE ACTION NECESSARY PURSUANT TO EXECUTIVE SESSION, IF NEEDED -A. I. Subject: Consider approval of Resolution 481 authorizing the Board of Adjustment to initiate amortization proceedings on property at 6727 Hudson Village Creek Road II. Originated by: III. Summary: IV. Fiscal Impact Summary: V. Legal Impact: VI. Recommendation: VII.Alternative Actions: VIII.Attachments: 405 Municipal Drive, Kennedale, TX 76060 1 Telephone: 817-985-2100 1 Fax: 817-478-7169