single audit reports
TRANSCRIPT
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COMPREHENSIVEANNUAL FINANCIALREPORT ANDOTHER REPORTS
City of San Antonio, Texas Fiscal Year Ended September 30, 2014
Restated
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CITYOFSANANTONIO,TEXAS
ComprehensiveAnnualFinancialReport&OtherReportsYearEndedSeptember30,2014
IncorporatedDecember14,1837CharterAdoptedOctober2,1951
CouncilManagerFormofGovernmentPreparedby:DEPARTMENTOFFINANCE
BenGorzellJr.,CPAChiefFinancialOfficerTroyElliott,CPAFinanceDirectorMelanieSeale,CPAAssistantDirectorElizabethDrouillard,CPAFinancialReportingManagerVictoriaRoederFinancialReportingManagerJayBlackwellGeneralLedgerManager
FinancialReportingJacquelineBennett,CPANathalieBullockDaisyCastilloKimberlyCervantesAugustineFannahRandalynHarlanJosephKobilka,CPAMaryLaraMarkRamirezPatriceWallace
GeneralLedgerCarlosBeechnerVeronicaFloresDeniseFullerGerryGaviaTheresaLittlefieldJoeVasquezWithAssistanceFrom:
FinancialServicesMargaretVillegas,AssistantDirectorCappiArriola,FinancialManagementAdministratorTinaMurillo,TaxAssessorAdministratorAlejandroTijerina,FinancialManagerMikeMartinez,CollectionsManager
AccountingServicesVeronicaCarrillo,FiscalAdministratorKayGrant,AccountsPayableManagerJoniJames,PayrollAdministratorJuanitaMack,CPA,Disbursement&ReceivableAdministratorDepartmentFiscalAdministrators
PublicUtilitiesMarionGee,CPA,AssistantDirectorJeffPullin,PublicUtilitiesAdministrator
MemberoftheGovernmentFinanceOfficersAssociationoftheUnitedStatesandCanada
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INTRODUCTORY SECTION
INTRODUCTORY SECTION
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CITYOFSANANTONIO,TEXAS
ComprehensiveAnnualFinancialReport&OtherReportsTableofContentsYearEndedSeptember30,2014TITLEPAGEINTRODUCTORYSECTION TableofContents LetterofTransmittal________________________________________________________________________ ixi CertificateofAchievementforExcellenceinFinancialReporting_____________________________________ xii CityofSanAntonioMayorandCityCouncil _____________________________________________________ xiii OrganizationalChart________________________________________________________________________ xiv FINANCIALSECTION IndependentAuditorsReport ManagementsDiscussionandAnalysis(RequiredSupplementaryInformation)(Unaudited)____________ 1 BasicFinancialStatements: GovernmentwideFinancialStatements: StatementofNetPosition ______________________________________________________________ 12 StatementofActivities_________________________________________________________________ 13 FundFinancialStatements: GovernmentalFundsFinancialStatements: BalanceSheet______________________________________________________________________ 14 ReconciliationoftheBalanceSheettotheStatementofNetPositionGovernmentalFunds_______ 15 StatementofRevenues,Expenditures,andChangesinFundBalances_________________________ 16 ReconciliationoftheStatementofRevenues,Expenditures,andChangesinFundBalances ofGovernmentalFundstotheStatementofActivities____________________________________ 17 ProprietaryFundsFinancialStatements: StatementofNetPosition ____________________________________________________________ 18 StatementofRevenues,Expenses,andChangesinNetPosition______________________________ 19 StatementofCashFlows _____________________________________________________________ 20 FiduciaryFundsFinancialStatements: StatementofFiduciaryNetPosition/BalanceSheet________________________________________ 21 StatementofChangesinFiduciaryNetPosition___________________________________________ 22 DiscretelyPresentedComponentUnitsFinancialStatements: StatementofNetPosition ____________________________________________________________ 23 StatementofActivities_______________________________________________________________ 24 NotestoFinancialStatements_____________________________________________________________ 25
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CITYOFSANANTONIO,TEXAS
ComprehensiveAnnualFinancialReport&OtherReportsTableofContentsYearEndedSeptember30,2014 RequiredSupplementaryInformationOtherThanMD&A(Unaudited): BudgetaryComparisonSchedule: GeneralFund_________________________________________________________________________ 194 PreK4SA___________________________________________________________________________ 195 PensionandPostemploymentSchedules: SchedulesofFundingProgress___________________________________________________________ 196 ScheduleofChangesintheNetPositionLiability ____________________________________________ 200 ScheduleofCitysContributionstotheFund________________________________________________ 201 ScheduleofInvestmentReturns__________________________________________________________ 202 NotestoRequiredSupplementaryInformation______________________________________________ 203 CombiningFinancialStatementsandSchedules: NonmajorGovernmentalFunds: CombiningBalanceSheet_______________________________________________________________ 204 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances__________________ 205 SpecialRevenueFunds: CombiningBalanceSheetSpecialRevenue________________________________________________ 206 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances SpecialRevenue ____________________________________________________________________ 207 CombiningBalanceSheetGrants _______________________________________________________ 208 CombiningStatementofRevenues,Expenditures,andChangesinFundBalancesGrants___________ 209 CombiningBalanceSheetOtherSpecialRevenue __________________________________________ 210 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances OtherSpecialRevenue_______________________________________________________________ 211 CombiningBalanceSheetBlendedComponentUnits _______________________________________ 212 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances BlendedComponentUnits____________________________________________________________ 213 CapitalProjectsFunds: CombiningBalanceSheetCapitalProjects________________________________________________ 214 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances CapitalProjects_____________________________________________________________________ 215 CombiningBalanceSheetGeneralObligationBonds________________________________________ 216 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances GeneralObligationBonds_____________________________________________________________ 217 CombiningBalanceSheetCertificatesofObligationBonds___________________________________ 218 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances CertificatesofObligationBonds________________________________________________________ 219 CombiningBalanceSheetOtherCapitalProjects___________________________________________ 220 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances OtherCapitalProjects________________________________________________________________ 221
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CITYOFSANANTONIO,TEXAS
ComprehensiveAnnualFinancialReport&OtherReportsTableofContentsYearEndedSeptember30,2014 CombiningFinancialStatementsandSchedules(Continued): PermanentFunds: CombiningBalanceSheetPermanent____________________________________________________ 222 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances Permanent ________________________________________________________________________ 223 SupplementaryBudgetandActualSchedulesforLegallyAdoptedFunds: GeneralFund________________________________________________________________________ 224 DebtServiceFund_____________________________________________________________________ 231 SpecialRevenueFunds_________________________________________________________________ 232 PermanentFundCityCemeteries_______________________________________________________ 248 NonmajorEnterpriseFunds: CombiningStatementofNetPosition_____________________________________________________ 249 CombiningStatementofRevenues,Expenses,andChangesinNetPosition_______________________ 250 CombiningStatementofCashFlows______________________________________________________ 251 InternalServiceFunds: CombiningStatementofNetPosition_____________________________________________________ 252 CombiningStatementofRevenues,Expenses,andChangesinNetPosition_______________________ 253 CombiningStatementofCashFlows______________________________________________________ 254 FiduciaryFunds: FireandPolicePensionandHealthCareFunds: CombiningStatementofFiduciaryNetPosition ___________________________________________ 255 CombiningStatementofChangesinFiduciaryNetPosition__________________________________ 256 AgencyFunds: CombiningBalanceSheet_____________________________________________________________ 257 CombiningStatementofChangesinAssetsandLiabilities___________________________________ 258 NonmajorDiscretelyPresentedComponentUnits: CombiningStatementofNetPosition_____________________________________________________ 261 CombiningStatementofActivities________________________________________________________ 262 CapitalAssetsUsedintheOperationofGovernmentalFunds: ScheduleofCapitalAssetsbySource______________________________________________________ 263 ScheduleofCapitalAssetsbyFunctionandActivity__________________________________________ 264 ScheduleofChangesinCapitalAssetsbyFunctionandActivity_________________________________ 265
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CITYOFSANANTONIO,TEXAS
ComprehensiveAnnualFinancialReport&OtherReportsTableofContentsYearEndedSeptember30,2014 STATISTICALSECTION(UNAUDITED) FinancialTrends: NetPositionbyComponent,LastTenFiscalYears ____________________________________________266 ChangesinNetPosition,LastTenFiscalYears _______________________________________________267 FundBalances,GovernmentalFunds,LastTenFiscalYears_____________________________________268 ChangesinFundBalances,GovernmentalFunds,LastTenFiscalYears____________________________269 TaxRevenuesbySource,GovernmentalFunds,LastTenFiscalYears_____________________________270 RevenueCapacity: AssessedValueandActualValueofTaxableProperty,LastTenFiscalYears________________________271 DirectandOverlappingPropertyTaxRates,LastTenFiscalYears________________________________272 PrincipalPropertyTaxpayers,CurrentYearandNineYearsAgo _________________________________273 PropertyTaxLeviesandCollections,LastTenFiscalYears______________________________________274 TaxableSalesbyCategory,LastTenCalendarYears___________________________________________275 DirectandOverlappingSalesandUseTaxRates,LastTenFiscalYears____________________________276 DebtCapacity: RatiosofOutstandingDebtbyType,LastTenFiscalYears______________________________________277 RatiosofNetGeneralBondedDebtOutstanding,LastTenFiscalYears____________________________278 DirectandOverlappingGovernmentalActivitiesDebtasofSeptember30,2014____________________279 LegalDebtMarginInformation,LastTenFiscalYears__________________________________________280 PledgedRevenueCoverage,LastTenFiscalYears ____________________________________________281 DemographicandEconomicInformation: DemographicandEconomicStatistics,LastTenCalendarYears _________________________________283 PrincipalEmployers,CurrentYearandNineYearsAgo_________________________________________284 OperatingInformation: FullTimeEquivalentCityGovernmentEmployeesbyFunction/Program,LastTenFiscalYears_________285 OperatingIndicatorsbyFunction/Program,LastTenFiscalYears________________________________286 CapitalAssetStatisticsbyFunction/Program,LastTenFiscalYears_______________________________287
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CITYOFSANANTONIO,TEXAS
ComprehensiveAnnualFinancialReport&OtherReportsTableofContentsYearEndedSeptember30,2014FEDERALSECTION SummaryScheduleofFederalAwardsbyType,LastTwoFiscalYears_________________________________288 ScheduleofExpendituresofFederalAwards ByGrantor,FederalProgramandGrantNumber_______________________________________________289 NotestotheScheduleofExpendituresofFederalAwards__________________________________________295 IndependentAuditorsReportonInternalControloverFinancialReportingandonComplianceandOther
MattersBasedonanAuditofFinancialStatementsPerformedinAccordancewithGovernmentAuditingStandards_____________________________________________________________________________297
IndependentAuditorsReportonComplianceForEachMajorFederalProgramandonInternalControlOverComplianceasRequiredbyOMBCircularA133_______________________________________________300
ScheduleofFindingsandQuestionedCosts _____________________________________________________303 CorrectiveActionPlan ______________________________________________________________________314 SummaryStatusofPriorYearFindings _________________________________________________________318STATESECTION SummaryScheduleofStateAwardsbyType,LastTwoFiscalYears___________________________________319 ScheduleofExpendituresofStateAwards ByGrantor,StateProgramandGrantNumber_________________________________________________320 NotestotheScheduleofExpendituresofStateAwards____________________________________________321 IndependentAuditorsReportonInternalControloverFinancialReportingandonComplianceandOther
MattersBasedonanAuditofFinancialStatementsPerformedinAccordancewithGovernmentAuditingStandards_____________________________________________________________________________322
IndependentAuditorsReportonComplianceForEachMajorStateProgramandonInternalControlOverComplianceasRequiredbytheStateofTexasSingleAuditCircular_______________________________325
ScheduleofFindingsandQuestionedCosts _____________________________________________________328 CorrectiveActionPlan ______________________________________________________________________330 SummaryStatusofPriorYearFindings _________________________________________________________331
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Letter of Transmittal
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CITYPROFILE(continued)TheCityislocatedinSouthCentralTexas,approximately75milessouthofthestatecapitalofAustin,andservesasthecountyseatforBexarCounty.SanAntoniansenjoyfirstratemedicalservices,aconvenientandefficientairport,anexcellenthighwaysystem,mildweather,andsuperbrecreationchoices,including:championshipgolfcourses,45milesof lineargreenwaytrails,themeparks,historicalattractions,museums,professionalsportingattractions,andalivelyperformingartsenvironment.AsofSeptember30,2014,theCitysgeographicareawasapproximately467squaremiles.TheUnitedStatesCensusBureaucitestheCityasthesecondmostpopulatedcityintheStateofTexaswith1,409,019citizensandisrankedastheseventhmostpopulatedcityinthecountry.MajoremployersinandaroundtheSanAntonioareaincludetheDepartmentofDefensethroughJointBaseSanAntonio (Lackland,FortSam&Randolph),H.E.B.FoodStores,UnitedServicesAutomobileAssociation,CityofSan Antonio, Northside, North East and San Antonio Independent School Districts,Methodist Health CareSystem,BaptistHealthSystems,andWellsFargo.
ECONOMICCONDITIONSANDOUTLOOKAsacommunity,SanAntoniohaspositioneditselfforlongtermgrowthandprosperitybysuccessfullyfollowingastrategy todiversify itseconomyand improvequalityof life forallcitizens.Theeconomicstrategy resultingfrom SA2020 emerges as the Citys roadmap to become a leader in job creation bymaintaining growth intraditional industry sectors while specifically targeting job growth in the following sectors: Healthcare andBiosciences,InformationTechnologyandInformationSecurity,Aerospace,andtheNewEnergyeconomy. TheCitys SA2020 goals are being pursued by utilizing San Antonios unique assets, including its historical andcultural heritage, formidable local institutions (e.g.military bases, universities,medical center), and naturalresourcessuchastheEagleFordShaleformationinSouthTexas.In addition to charting our course for continued economic prosperity, SA2020 also focuses on ongoinginfrastructure improvements,neighborhood revitalization,workforcedevelopment initiatives, anddowntowndevelopment. In February 2010, the City passed the InnerCity Reinvestment Infill Policy (ICRIP) to furthersupportbalancedandsustainabledevelopmentthroughoutSanAntoniosinnercityandsouthernsectors,whichinclude Port San Antonio and Brooks CityBase. Both government and citizens are actively committed toincreasingthecaliberofeducationalandeconomicopportunities,expandingartsandleisurechoices,revitalizingolderneighborhoods,andplanningforoverallgrowthintheCity.TheCitysculturalandgeographicproximitytoMexico provides favorable conditions for international business relations. A costofliving that is below thenationalaverageandthehighqualityoflifetheCityoffersfurtherenhancesSanAntoniosbusinessappeal.Inaddition to the favorable economic climate, excellent weather conditions year round help encourage andenhancetheoperationofmanyofSanAntoniosmostimportantindustries.TheCitycontinuestofostereconomicgrowthanddevelopmentwithabusinessclimatethatreceivedaccoladesfrom Forbes and Bloomberg for its ability to encourage job creation, business expansion, and attract newinvestments.TheCityhasbeen recognizedwithanA+ rating forsmallbusinessbyKauffmanFoundation,hasbeennamedoneoftheTop10CitiesforGlobalTradebyGlobalTradeMagazine,andhasanunemploymentratethatcontinuestostaybelowthenationalandstateaverages.SanAntoniosbusinessfriendlyclimatewelcomesnewcompanyrelocations,expansionsandstartupventures.Economicindicatorstellthestoryofaresilient2014forSanAntoniobyexemplifyingthecomparativestabilityofthe local economy as it outperformed comparable cities impacted by the national recession. The BrookingsMetropolitan Policy Program issues thequarterly series,MetroMonitor,whichprovides anunderstandingofhow the current economic recession has affected Americasmetropolitan economies. According to thequarterly research performed by the Brookings Institution, San Antonio is ranked 38 out of 100 largestmetropolitanareasinitsoverallrecoveryperformancesincetheGreatRecessionof2008.
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ECONOMICCONDITIONSANDOUTLOOK(continued)SanAntoniosaverageunemploymentrateforfiscalyear2014was5.6%comparedtothenationalrateof6.3%.Manymetros experienced a rise in unemployment rate through the onset of the recession, however, SanAntoniosunemploymentratecontinuestoremainlowerthanthenationalratesincetheGreatRecession.SanAntonioshousingmarketremainedverystrongin2014.AccordingtotheSeptember2014MultipleListingServicereportbytheSanAntonioBoardofREALTORS(SABOR),theaveragepriceofasinglefamilyresidentialhome inSeptember2014roseto$220,366, a7% increasefrom lastyear,andthemedianroseto$187,700,a9%increasefromSeptember2013.SanAntoniosresilienteconomywas fueledbyseveral targeted industryprojects in fiscalyear2014. TheCityutilized a combination of tax abatements, grant agreements, equity investments, impact fee waivers, andnominations for State project designations that assisted in enticing businesses tomove to or remain in SanAntonio. In 2014, the City, in partnershipwith the SanAntonio EconomicDevelopment Foundation (SAEDF),workedwith27companiestocreate3,709newand/orretainjobsinSanAntonioandBexarCounty.InanefforttorevitalizedowntownandcentralcityneighborhoodsandsupporteconomicdevelopmentopportunitiesacrosstheCity,$1.75millionwasprovidedineconomicdevelopmentincentivefundstoretain,expand,andattractjobcreating businesses in fiscal year 2014. The City additionally budgeted $1.75 million to support economicdevelopmentprojectsandstimulatedevelopmenttargetedtowardsneighborhoodsinthedowntownarea.
MAJORINITIATIVESEDUCATIONPreK4SAbegan itssecondschoolyear,withatotaloffourEducationCenterscompletedattheendoffiscalyear2014.InAugust2013,PreK4SAcompletedpreparationofanexistingfacilitytobeutilizedfortheNorthEducationCenter,whichhasthecapacitytoserveupto360students.ConstructionwascompletedfortheSouthEducation Center in August 2013, which has the capacity to serve 350 students. Throughout the summermonths, constructionof theEastandWestEducationCenters startedandwas completedbyAugust2014 intime to open the Centers for the 20142015 school year. The program places a heavy emphasis on earlychildhoodeducation,parentengagement,andprofessionaldevelopment.Theprogramaimstoimprovetheeducationaltrajectoryof22,400fouryearoldchildrenovereightyearswhilebenefittingthousandsmorebytrainingareaschoolteachers,teachersaides,communityPreKproviders,andeducation leaders. Toward this goal PreK 4 SA received over 4,000 student applications for the 20142015schoolyear,andselectedatotalof1,500studentstoattendallfourCenters.PreK4SAstronglyemphasizesfamilyengagement inearlyeducation.Throughamultiprongedapproach,theprogram provides training and events, dedicates Family Specialists towork and provide services to families,collects feedbackwithsurveysandevaluations,andoffersaplethoraof resources.PreK4SAalsopartneredwithavarietyofcommunitygroups, including theBaptistHealthSystems studentprogram,whichhelped tocoordinatescreeningsforvisionandhearingtoallstudents.AllofthePreK4SAfamiliesattendedtheirchildsprogressreportconferencesforthe20132014schoolyears.FamilySpecialistscoordinatedavarietyoffamilyeventsatCentersandthroughout thecommunity featuringtopics likereading,strangerdanger,nutritionandlearning.FamilieswerealsoencouragedtoattendcommunityeventsthroughoutSanAntonio.
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MAJORINITIATIVESEDUCATION(continued)Aspartoftheprofessionaldevelopmentportionoftheprogram,PreK4SAprogramstaffworkswitheducatorsthroughout SanAntonio to provide guided observations of classrooms and activities, planning sessions, andotherservicesopentopublicandprivateschools,aswellaschildcarefacilities.PreK4SAteachersreceivedover30daysoftrainingsandworkshopsthroughoutyearone.ProfessionalDevelopmentcoacheshostedatotaloffivesummeracademiestoprovideresourcesto192educatorsthroughoutSanAntonio.Inaddition,thecoachesalso hosted 15 weekend academies throughout the school year. The coaches conducted lab school visits,coaching, small group planning and a variety of training events for educators throughout the City includingtrainingfairsforchildcarestaffcohostedbyVOICESforChildrenandCityCouncil.PreK4SA contractedwithEdvanceResearch, Inc.and theNational Institute forEarlyEducationResearch inaffiliation with Rutgers University to conduct an eightyear independent evaluation of the program. TheevaluationwillincludeanalignmentstudyofprekindergartenreadinessassessmentsusedthroughoutTexasandanoverallprogramassessment.Inyearone,thestudymeasuredsixoutcomes:cognitive,literacy,mathematics,orallanguage,physicalability,andsocioemotionalbehavior.ThereportshowedthatPreK4SAstudentsmetorexceededanationallynormedsampleofchildrenofthesameagegroup.ThoughPreK4SAchildrenbegantheprogramata significantly lower level than thenormed sample,over time students surpassed in threeof sixoutcomesandwereonparfortheremainingthree.ThepromisingresultsareproofthatPreK4SAisheadedintherightdirection.
MAJORINITIATIVESCAPITALPROGRAMSDuringtheMay2012election,citizensofSanAntoniovotedforandapproveda$596millionGeneralObligationBond Program. The 2012GeneralObligation Bond Program, a five year program, is the Citys largest bondprograminhistory.Thereare41projectssetforstreets,bridges,andsidewalks;17projectssetfordrainageandflood control;68projects set forparksand recreation;11projects set for library,museum,and culturalartsfacilities;andthreeprojectssetforpublicsafetyfacilities.Ofthe$596millionapproved,$378millionhasbeenissued.Withtheapprovalofthe2012GeneralObligationBondProgram,$2millionwasincludedfortheconstructionofanimalkennelsto increasetheCityscapacitytohousestrayanimals.Thiswascompleted inNovember2014.TheAnimalDefenseLeaguewillmanagetheCityowned facilitythrougha25year lease.Thenew facilitywillconsist of 3 buildings and will house a total of 48 dog kennels and utilize one building for puppies. Thispartnershipwill increase the totalnumberofanimals rescuedby3,184annually,and require that theAnimalDefenseLeaguemaintainalivereleaserateof90%orhigher.June2014markedthecompletionofthe$35millionmodernizationprojectforSanAntonioInternationalAirportTerminalA.Thisprojectupdatedthefinishesandfurniturethroughouttheconcourse,ticketlobbyandbaggageclaimareaandprovidedforallnewrestroomfacilities. Theproject,fundedbyAirportgeneratedrevenueandbonds,enhancesthetravelexperiencebymodernizingthe378,000squarefootbuilding.Separately,theAirportthroughaconcessionagreementwithHMSHost,replacedsevenfoodandbeverageconcessions.Thenewfoodestablishments include local celebrity Chef JohnnyHernandezdesigned concepts LaGloria, The Fruteria andMissionCity Icehouse aswell asAuntieAnnesPretzels/Cinnabon, LaTapenade, Steakn Shake, and FamousFamiglia.CurrentlyunderdesignattheSanAntonioInternationalAirportisaMasterPlanApprovedConsolidatedRentalCar(CONRAC)Facility.ThisprojectisintendedtoimprovetherentalcarexperienceformillionsofCitysvisitorsbycentralizingthecarrentalfacilitiesinonelocationonairportproperty.Constructionofthefacilityisfundedbyacustomerfacilitychargeincludedonallairportcarrentaltransactionsandisscheduledtoopenin2018.
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MAJORINITIATIVESCAPITALPROGRAMS(continued)TheexpansionoftheHenryB.GonzalezConventionCenter,withabudgetof$325million,beganconstructioninOctober2013.Originallyconstructed in1968, theConventionCenterhasbeenexpandedand renovated fourtimes,doubling itssizeto itscurrent1.3milliongrossfeet. Thiscurrentexpansionandtransformationprojectremainsonscheduleandonbudget.WhencompletedinNovember2016,thenewconventioncenterwillspan1.65million square feet. With a goalof continuing tobe competitive formajornational sporting events, aRequest forQualifications has been issued for Design/Build firms to renovate the 21year old Alamodome.Expandedplazasandconcoursesandupgradedlockerrooms,bathrooms,lightingandtechnologywillbringtheAlamodomeuptothestandardsofsimilarprofessionalsportsstadiumsthroughoutthecountry.
MAJORINITIATIVESCONVENTIONANDTOURISMFiscalyear2014wasanextremelysuccessfulyearforboththeConventionCenterandAlamodome.Withmorethan770,000attendeesthroughout327events,theConventionCenterexceededitsannualrevenuebudgetbyover$2million.Similarly,theAlamodomeexceededitsannualrevenuebudgetbyover$1.5million,andhostedmore than 1.1million visitors at 138 events throughout the year. In 2015, the City will host the largestconventioneverwhentheSeventhDayAdventistGeneralConferenceSessionisheldinJulywithanattendanceestimated at 70,000. In 2018, the Citywill host theNCAAMens Basketball Final Four tournament at theAlamodome.TheCitypreviouslyhostedtheFinalFourin2008withgreatsuccess.
MAJORINITIATIVESECONOMICDEVELOPMENTInJuneof2014,SanAntoniosnewentrepreneurialresourcecenter,CafCommerce,openedinsidetheCentralLibrary.CafCommerceservesasaclearinghouseforover73smallbusinessresourcepartnersthroughoutSanAntonio.CafCommerce alsoprovidesprogramming geared towardsdeveloping anentrepreneurialmindsetamongSanAntonioresidents.Todate,CafCommercehasassistedover380clients inperson,243clientsviaphone, and over 500 clients have accessed the resource listing via the Caf Commerce website(cafecommercesa.org). Caf Commerce also received a $50 thousand Small Business AdministrationGrowthAcceleratorFundGranttodevelopSanAntonio'sfirstculinaryartsbusinessacceleratorprogram.InSeptemberof2012,SanAntoniowaschosento jointheGlobalCities Initiative(GCI),a jointprogramoftheBrookings Institution and JPMorgan Chase. TheGCI is a fiveyear project that aims to help leaders inU.S.metropolitanareasreorienttheireconomiestowardgreaterglobalengagement.In2013,workfocusedonthedevelopmentoftheSanAntonioExportStrategy. In2014,SanAntoniowaschosenbyBrookingsasoneofsixpilot communities to develop foreign direct investment strategy based data, such as the number of jobssupportedbyforeignownedenterprisesandthedensityofforeignownedenterprisesincertainindustries.Thegoal istodevelopacomprehensiveglobaltrade& investmentstrategythatwillcomplement theSanAntonioEconomicDevelopmentFoundationsStrategicPlan.OnDecember4,2014, theCityCouncildirected theDepartmentofPlanningandCommunityDevelopment toinitiatelimitedpurposeannexationandpreparearegulatoryplanforfiveannexationpriorityareasin2015and2016,whicharecontiguoustothecity limitsandwithintheSanAntonioExtraterritorialJurisdictionandBexarCounty.FivepriorityareaswereidentifiedbasedontheevaluationcriteriaestablishedbytheCitysannexationpolicy adopted in 2013. The areas encompass 66.47 squaremiles and have a population of approximately117,517.The proposed annexation would protect the Edwards Aquifer Recharge Zone and the quality ofdevelopmentthroughtheextensionofzoningandcitycodes.
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MAJORINITIATIVESECONOMICDEVELOPMENT(continued)Inaddition,theCitywillcaptureemergingresidentialdevelopmentsandcommercialcenters,expandtheCityseconomic vitality as a regional center by providing certainty and predictability, preserve the U.S. militarymissionsthroughlandusecontrols,facilitatelongrangeplanninginenvironmentallysensitiveareasandgrowthcenters, and enhance the Citys overall regional economic position in bringing new jobs, population, andinvestmenttotheregion.
Inthe2013StateoftheUnionaddress,PresidentObamaannouncedthathewoulddesignate20PromiseZonesnationwide:urban,rural,andtribalcommunitieswheretheAdministrationwouldpartnerwithlocalleaderstocreate jobs, increase economic activity, improve educational opportunities, and reduce violent crime. OnJanuary9,2014, theCitywas selectedasoneof the first fivePromiseZones.TheCity created theEastPointPromise Zone (EPZ), inpartnershipwith theUnitedWayof SanAntonio andBexarCounty, the SanAntonioHousing Authority, San Antonio for Growth on the Eastside and SA2020 to handle the operations of theAdministrations funding award. EPZs additional support partners include San Antonio Independent SchoolDistrict, Judson IndependentSchoolDistrict,St.PhilipsCollegeandprivate sectorbusinesses,employersandinvestors.FederaldesignationoftheEPZofferstheopportunitytointegrateandleveragetheseinitiativesandmakenew,materialimprovementstothecommunityseconomichealthandtheresidentsqualityoflife.SixkeyactivitiesareplannedfortheEPZ inthenextfiveyears: jobcreation, increasingeconomicactivity, improvingeducationactivities,reducingseriousorviolentcrime,leveragingprivatecapital,andreducingpovertyandunemployment.AsofFebruary2015, thePromiseZonepartnershavecollectivelybeenawardedapproximately$32million infederalfunding,whichwillbeusedtoachieveEPZsgoals.
MAJORINITIATIVESPRIVATEPUBLICPARTNERSHIPS
AsthepopulationoftheCitycontinuestogrow,thereisanincreasingneedtorevitalizeitsurbancoreandforthedevelopmentandconstructionofnewpublicfacilities.Inordertoassistlocalgovernmentalentitiestomeettheir growing infrastructure needs, the State of Texas has enacted the Public and Private Facilities andInfrastructureActtoallowgreateruseofpublicprivatepartnerships(P3).The City implemented a P3 program with a goal to encourage redevelopment of underdeveloped andunderutilized properties, share risk and expense between the City and the contracting private entity, andparticipate in cash flow performance by organizing publicprivate partnerships. Through this contractualagreement,theassetsandprofessionalskillsofeachsector(publicandprivate)aresharedtodeliverafacilityand/orservicefortheuseofthegeneralpublicandeachsectorshares inthepotentialrisksofthetimelyandefficientdeliveryoftheserviceorfacility.TheCityisworkingwithvariousdevelopersonP3projectssuchastheDwyerP3,theRedBerryEstateP3,andtheWaterStreetP3,managedbyHemisfairParkAreaRedevelopmentCorporation (HPARC). Thecityownedproperty locatedat307Dwyerhasbeenvacantsince2010. Theselecteddeveloper,LandbridgePartners,willconstruct a $50millionmixed usedevelopment consistingof 272housingunits, approximately 50 thousandsquarefeetofcommercialspaceand450parkingspaces. Theproject isexpectedtoopen inearly2017. TheRedBerryEstate,locatedat856GemblerRoad,consistsof84acresandincludestheRedBerryMansionandamanmade lake. The City selected a development team proposing a $149.8 million project that includesapproximately 600multifamily housing units, 66 townhomes, and over 300 thousand square feet of officespace,medical office space, retail, dining and entertainment venues. The first phase of the projectwill becompletedinsummer2017andthesecondphasewillbecompletedinspring2019.
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MAJORINITIATIVESPRIVATEPUBLICPARTNERSHIPS(continued)With theexpansionof theCitysConventionCenter,HPARC ismoving forward todevelopHemisfairPark,anarea famous for hosting the 1968Worlds Fair.HPARCwas established in 2009 by City Council to lead theredevelopment of theHemisfair area, including expanding and improving the parkland and public areas. InFebruary2012,CityCouncilapprovedHPARCsMasterPlan.HPARCsvisionofHemisfairisforittobecomeoneoftheworldsgreatpublicspaces.Toaccomplishthisgoal,HPARCwillberelyingonseveralP3opportunities.ThefirstP3relatingtothisnewdevelopmentistheWaterStreetP3.ThepurposeoftheWaterStreetP3istocreate a vertical structurewithin the southwest quadrant ofHemisfair to accommodate public parking andmixedincome residential units and commercial space. All lease payments will be directed towards themaintenance,operationsandprogrammingofYanaguanaGarden,a4.1acrefreeandaccessiblepublicparkbuiltfor all ages and abilities.HPARC issued Request for Proposals onOctober 29, 2014with responses due onJanuary16,2015.OnMarch3,2015HPARCpresented its selected vendor to theEconomic andCommunityDevelopment Committee, a subcommittee of City Council, and received approval to move forward withnegotiations. Adraftagreement isexpectedbyearlyApril,anduponcompletionofnegotiations,HPARCwillpresentthecontractforapprovaltotheCityCouncil.
FINANCIALINFORMATIONThemanagementof theCity is responsible forestablishingasystemof internalcontrols thataredesigned toprovidereasonableassurancethatassetsareprotectedfromloss,theft,ormisuse.TheCitysaccountingsystemsupports the internalcontrolsandprocedures,whichprovide reliable financial records forpreparing financialstatements in conformitywithGAAP. The internal control structure provides reasonable assurance that theCitysassetsaresafeguardedaswellasthereliabilityoffinancialrecordsforpreparingfinancialstatements.Theconceptofreasonableassurancefirstrecognizesthatthecostofacontrolshouldnotexceedthebenefitslikelyto be derived. Secondarily, the evaluation of costs and benefits require estimates and judgments bymanagement.Budgetary compliance is a significant tool formanaging and controlling governmental activities, aswell asensuringconformancewiththeCitysbudgetarylimitsandspecifications.Theobjectiveofbudgetarycontrolsisto ensure compliancewith legal provisions embodied in the annual appropriated budget approved by CityCouncil.Levelsofbudgetarycontrol,thatisthelevelsatwhichexpenditurescannotlegallyexceedappropriatedamounts, are established at the department levelwithin individual funds. The City utilizes an encumbrancesystemofaccountingasonemechanismtoaccomplisheffectivebudgetarycontrol.Encumberedamountslapseatyearendandaregenerallyappropriatedaspartofthefollowingyearsbudget.AnotherbudgetarycontrolisthemonthlyrevenueandexpenditurereportsummarizingbydepartmentbudgetandactualbalanceswithvariancesthataregeneratedandreviewedbytheOfficeofManagementandBudget,FinanceandtheCityManagersOffice.Eachquarter,theOfficeofManagementandBudgetandFinancemeetwithdepartment representatives toassessdepartmentsexpendituresbasedonactual todateandprojectedexpendituresfortheremainderofthefiscalyear.Theseprojectedexpendituresarecomparedagainstthelegallyadopted budget for analysis and recommendations to the CityManagers Office and are presented to CityCouncil.Duringthemidyearbudgetassessments,anadditionalstepisaddedtothereviewprocessrelatedtoformaladjustmentrecommendationstoCouncilforadoptiontomodifytheoriginalbudget.Atfiscalyearend,aspartoftheannualreviewandcloseoutprocess,Councilwillbeprovidedinformationandrecommendationstoagainapprovedesiredbudgetadjustmentsandcarryforwardsforthenextfiscalyear.The City further implemented available budget controlswithin its system of record for capital projects andgrants.Thesystemwarnswhencumulativeexpendituresarewithin75%oftotalbudgetandwillnotallowtheprocessingofnonpayrolltransactionsinexcessofthebudget.
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FINANCIALINFORMATION(continued)EachyeartheCitypreparesafiveyearfinancialforecast(Forecast)priortotheadoptionoftheannualoperatingbudget. The Forecast is a financial and budgetary planning tool that provides a current and longrangeassessmentoffinancialconditionsandcostsforCityservices.TheForecastincludestheidentificationofservicedeliverypolicyissuesthatwillbeencounteredinthenextfiveyearsandthatwillhaveafiscalimpactupontheCitysprogramofservices.TheForecastalsoexaminesthelocalandnationaleconomicconditionsthathaveanimpactontheCityseconomyand,ultimately,itsbudget.TheForecastservesasafoundationfordevelopmentof the proposed budget by projecting revenues and anticipated expenditures under a defined set ofassumptions.TheForecastenablestheCouncilandstafftoidentifyfinancialissuesinsufficienttimetodevelopaproactivestrategyinordertoaddressemergingstrategicissues.Afterobtaining theprioritiesofCouncil and residents, and conducting reviewsofeachCitydepartment, theproposed City budget is presented to Council. The proposed budget represents the City staffs professionalrecommendationtoutilizerevenuesandexpenditures inordertoachieveabalancedbudget,whileoptimizingCity service deliveries. Part of the recommendations presented to City Council for fiscal year 2014 includedresults from initiatives toreduceadministrativeoverheadand implementationofprocess improvements.TheOfficeofManagement&BudgetInnovationTeamcompletedCitywidedepartmentconsolidationandefficiencyinitiatives that were incorporated into the fiscal year 2014 budget. One initiative reduced administrativeoverhead by merging the Public Works Department and the Capital Improvements Management ServicesDepartment into the Transportation & Capital Improvements Department, resulting in approximately $200thousandinsavings.Anotherinitiativemadeprovidingutilityassistancefasterandeasierforresidents,andalsoresultedinover$200thousandinsavings.TheCitycontinuesitscommitmenttoefficientandprioritizedservicedeliverybyleveragingoperationalimprovementsandinvestmentsintechnologyandwillcontinuetoutilizetheInnovationTeamtoperformefficiencyinitiativesacrosstheCitytoassistinfindingnewareasofimprovementstoleverage.TheannualbudgetservesasthefoundationfortheCitysfinancialplanningandcontrol. Thedevelopmentofthe Citys annual budget begins inMay,when all departments of the City are required to submit potentialreductionsandadditionalappropriationrequeststotheOfficeofManagementandBudget.Duringthisperiod,theOfficeofManagementandBudgetreviewsdepartmentsbasebudgets,potentialreductionsandadditionalappropriation requestswith each department and Executive Leadership Teammembers to develop budgetrecommendationsfortheCityManagersconsideration.Afterobtainingtheprioritiesofthecommunitythroughhosting five Community Budget Input Hearings, meeting with City Council and conducting reviews ofdepartmentbudgetswiththeCityManager,theCityManagerpresentstheproposedbudgettotheCityCouncilforreviewinearlyAugust.DuringCityCouncil review, severalbudgetwork sessionswereheld to review theproposed serviceprogramdetails included intheproposedbudget.TheCityheld fiveadditionalCommunityBudget InputHearingsafterthefiscalyear2014BudgetwasproposedandtwoCityWidePublicHearingsforcommunity input. TheCity isrequiredtoholdatleastonepublichearingontheproposedbudgetduringtheperiodofitsconsideration.CityCouncilmustadoptafinalbudgeteachyearnolaterthanSeptember27.Theappropriatedbudgetispreparedbyfund(e.g.,GeneralFund)anddepartment(e.g.,FinanceDepartment).The legal levelofbudgetarycontrol isapprovedbyCityCouncilatthe individualfundanddepartmental level.Expenditures by department andmajor category (personnel, nonpersonnel, and capital outlay) are furtherdefined in the budget document. The City Manager or designee may revise the approved departmentexpenditure allotmentsduring the fiscal year,but innoevent shall the aggregatedepartmentalexpenditureallotment exceed the appropriation available to the department unless approved by City Council. The CityCouncilmay at any time transfer any unencumbered appropriation balance or any portion thereofwithin adepartmentofficeoragencytoanotheruponwrittenrecommendationbytheCityManager.
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FINANCIALINFORMATION(continued)Asameansofmanaging theCitys financialstanding, theCityestablishedandmaintainsabudgeted financialreservewithin theGeneral Fund. The financial reserveprovidesbudgetary flexibility forunexpectedevents,financial emergencies, and the usual fluctuation in revenueexpenditure patterns. Since 2005, the City hasincreased itsfinancialreservesfrom3.4%oftotalappropriationsto9.0%oftotalappropriations. TheCityhasachievedandmaintained financial reservesof9%ofGeneralFundappropriationssince fiscalyear2009,with2014financialreservestotaling$89million.TheCitycontinuestoevaluatethefinancialreservepolicyasameansoffiscalprudence inconsiderationwithCityoperations, implicationstotheCityscreditrating,andCityCouncilpriorities inordertomaintainastrongandsolidfinancialpositioncoupledwithflexibilitytoadapttochangingeconomicconditions.Lastsummer,aspartofthefiscalyear2014budgetdevelopmentprocess,CityCouncilrequestedabriefingontheCitysfinancialpoliciesandpracticesbeforedevelopmentofthefiscalyear2015budgetprocess.Withtheadoptionofthe2015Budget,updatestotheCitysFinancialPolicieswereapproved. TheseupdatedFinancialPoliciesinclude:increasetheGeneralFundbudgetedfinancialreservesfrom9to10%;establisha1to3%targetfor2yearbudgetplanfortheGeneralFund;managecrowdoutwithintheGeneralFundandcreateabalancebetweenPublic SafetyandNonPublicSafetybudgets;manage the structuralbalance in theGeneralFund;usemoderately conservative revenueprojectionsbasedon currenteconomic conditions andhistoricaltrends;establish$1millioncontingencyreservefortheGeneralFundand$3millioncontingencyreserveforthecapitalbudget;addressInternalServiceFunddeficitswithin3to5years;andmaintainanavailablefundbalancetargetof15%fortheGeneralFund.The City further utilizes a comprehensive debtmanagement financial planning program, which is updatedannually and is a major component of the Citys financial planning. The model projects financing needs,measuringandassessingthecostandtimingofeachdebtissuance.Itinvolvescomprehensivefinancialanalysis,whichutilizes computermodeling,and incorporatesvariables suchas interest rate sensitivity,assessedvaluechanges,annexationsandcurrentadvalorem tax collection rates.Useof this financialmanagement toolhasassistedtheCity inmeeting itsfinancingneedsbyfacilitatingtimelyandthoroughplanning,thusallowingtheCitytocapitalizeonmarketopportunities.
GRANTFUNDS
The City also actively seeks and applies for Federal and State grants that are in line with the Citys coreoperationsor initiatives,asanadditionaltool inprovidingservicestothecitizensofSanAntonio. In2014,theCitywasawarded$134.9millioninFederalassistanceand$18.4millioninStateassistanceforatotalof$153.3million. The Citywould have been unable to undertake the construction of public improvements and theoperationofprogramswithoutthesupportofthesegrants.
AWARDSThe City maintains a strong financial position with the three major rating agencies Fitch,Moodys, andStandard&Poors,reaffirming,forthesixthyear inarow,an AAA, Aaa,and AAAgeneralobligationbondrating,respectively.Theseratingsweremaintaineddespitestrictergradingrequirementsimplementedbysomeratingagencies. TheCity istheonlycitywithapopulationofmorethan1milliontoreceiveanAAAorAaaratingfromthethreemajorratingagencies. TheAAAorAaabondratingisthehighestcreditratingthatanentitycanreceive.
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AWARDS(continued)TheCityearnedthePlatinumLeadershipCircleAwardfromtheComptrollerofPublicAccountsforcalendaryear2014.TheawardrecognizestheCitystransparencyeffortsintheTexasComptrollerLeadershipCircleProgramthatprovideseasyaccesstothepublictoFinancialandBudget Information. This isthefifthconsecutiveyeartheCityhasreceivedthehighestleveloftransparencyawardedbytheComptrollersOffice.TheOfficeofManagementandBudgetreceivedtheAnnualDistinguishedBudgetAwardfromtheGovernmentFinanceOfficersAssociation, recognizingoutstanding achievement inpreparationof the2014Operating andCapitalBudgetforthe31stconsecutiveyear.The Office ofManagement and Budget additionally received the PerformanceMeasurement Certificate ofExcellenceAwardforthe3rdyearinarowfromtheInternationalCity/CountyManagementAssociation(ICMA).SanAntonioisoneof28jurisdictionsreceivingthishighestlevelofrecognitionthisyear.AccordingtotheICMA,Jurisdictions meeting the qualifications have demonstrated leadership in continuous improvement andcommunityengagement,andtheyserveasexamplesforothergovernmentstofollow.The Finance Department received the Achievement of Excellence in Procurement (AEP) award for the 17thconsecutiveyearinrecognitionoforganizationalexcellenceinpublicprocurement.
CERTIFICATEOFACHIEVEMENTFOREXCELLENCEINFINANCIALREPORTINGTheGovernmentFinanceOfficersAssociationoftheUnitedStatesandCanada(GFOA)awardedaCertificateofAchievementforExcellence inFinancialReportingtotheCityfor itsCAFRforthefiscalyearendedSeptember30,2013.Thiswasthe38thconsecutiveyearthatthegovernmenthasachievedthisprestigiousaward.Inorderto be awarded a Certificate of Achievement, a governmentmust publish an easily readable and efficientlyorganizedCAFR.ThisreportsatisfiesbothGAAPandapplicablelegalrequirements.ACertificateofAchievementisvalidforaperiodofoneyearonly.WebelievethatourcurrentCAFRcontinuestomeet the Certificate of Achievement Programs requirements, andwe are submitting it to the GFOA todetermineitseligibilityforanothercertificate.
INDEPENDENTAUDITS
StatestatutesandtheCitysCharterrequirethatanannualauditbyanindependentcertifiedpublicaccountantbeconducted.TheCityselectedtheaccountingfirmPadgettStratemann&Co.,LLP.Inadditiontomeetingtherequirements set forth in State statutes and the Citys Charter, the audit was also designed tomeet therequirements of the Single Audit Act Amendments of 1996, OMB Circular A133, Audit of State and LocalGovernmentandNonprofitOrganizationsandStateofTexasSingleAuditCircular.The IndependentAuditorsReporton thebasic financial statements,ManagementsDiscussion andAnalysis,requiredsupplementaryinformation,requireddisclosuresandschedulesareincludedintheFinancialSectionofthisCAFR.
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CityofSanAntonioMayorandCityCouncil
IvyR.TaylorMayor
MikeGallagherDistrict10
JoeKrierDistrict9
RonNirenbergDistrict8
RobertoC.Trevio
CrisMedinaDistrict7
RayLopezDistrict6
District1
ShirleyGonzales
AlanE.Warrick,IIDistrict2
District5
ReySaldaaDistrict4
RebeccaViagranDistrict3
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F Y2 01 4
FINANCIAL SECTION
FINANCIAL SECTION
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Independent Auditors Report
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AUSTIN HOUSTON SANANTONIO811BARTONSPRINGSROAD,SUITE550 1980POSTOAKBOULEVARD,SUITE1500 100N.E.LOOP410,SUITE1100 TOLLFREE:8008794966AUSTIN,TEXAS78704 HOUSTON,TEXAS77056 SANANTONIO,TEXAS78216 WEB:PADGETTCPA.COM5124760717 8008794966 2108286281
IndependentAuditorsReportTotheHonorableMayorandMembersoftheCityCouncilCityofSanAntonio,TexasReportontheFinancialStatementsWehaveauditedtheaccompanyingfinancialstatementsofthegovernmentalactivities,thebusinesstypeactivities, the aggregate discretely presented component units, eachmajor fund, and the aggregateremainingfund informationoftheCityofSanAntonio,Texas(theCity)asofandfortheyearendedSeptember30,2014,andtherelatednotestothefinancialstatements,whichcollectivelycomprisetheCitysbasicfinancialstatements,aslistedinthetableofcontents.ManagementsResponsibilityfortheFinancialStatementsManagement is responsible for thepreparationand fairpresentationof these financialstatements inaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica;thisincludesthedesign, implementation,andmaintenanceof internalcontrol relevant to thepreparationand fairpresentationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.AuditorsResponsibilityOurresponsibilityistoexpressopinionsonthesefinancialstatementsbasedonouraudit.WedidnotauditthefinancialstatementsofHemisFairParkAreaRedevelopmentCorporation;SanAntonioFireandPolicePensionFund;ortheSanAntonioFireandPoliceRetireeHealthCareFund;blendedcomponentunits, which represent 78%, 84%, and 32%, respectively, of the assets and deferred outflows, netposition/fundbalances,andrevenues/additionsoftheaggregateremainingfundinformation.WealsodidnotauditCPSEnergy;SAEnergyAcquisitionPublicFacilityCorporation;SanAntonioHousingTrustFinanceCorporation;SanAntonioHousingTrustFoundation,Inc.;ortheSanAntonioHousingTrustPublicFacility Corporation, discretely presented component units, which represent 67%, 59%, and 79%,respectively,oftheassetsanddeferredoutflows,netposition,andrevenuesofthediscretelypresentedcomponentunits.Thosefinancialstatementswereauditedbyotherauditorswhosereportshavebeenfurnishedtous,andouropinion,insofarasitrelatestotheamountsincludedforthosecomponentunits,isbasedsolelyonthereportoftheotherauditors.Weconductedourauditinaccordancewithauditingstandardsgenerallyaccepted intheUnitedStatesofAmericaandthestandardsapplicabletofinancialauditscontained inGovernmentAuditingStandards, issuedby theComptrollerGeneralof theUnitedStates.Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhether the financial statements are free frommaterialmisstatement. The financial statements of
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BrooksDevelopmentAuthority,CPSEnergy,SAEnergyAcquisitionPublicFacilityCorporation,SanAntonioHousing Trust Finance Corporation, San Antonio Housing Trust Public Facility Corporation, andSanAntonioWater System District Special Project, audited separatelybyother auditors,werenotauditedinaccordancewithGovernmentAuditingStandards.Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthe financial statements. The procedures selected depend on the auditors judgment, including theassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror. Inmaking those riskassessments, theauditor considers internal control relevant to theCityspreparationandfairpresentationofthefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheCitysinternalcontrol.Accordingly,weexpressnosuchopinion.Anauditalsoincludesevaluatingthe appropriateness of accounting policies used and the reasonableness of significant accountingestimates made by management, as well as evaluating the overall presentation of the financialstatements.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinions.OpinionsInouropinion,basedonourauditandthereportsofotherauditors,thefinancialstatementsreferredtoabove present fairly, in allmaterial respects, the respective financial position of the governmentalactivities,thebusinesstypeactivities,theaggregatediscretelypresentedcomponentunits,eachmajorfund, and the aggregate remaining fund information of the City as of September 30, 2014, and therespectivechangesinfinancialpositionand,whereapplicable,cashflowsthereoffortheyearthenended,inconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.EmphasisofMatterAsdescribed inNote1 to the financial statements,effectiveOctober1,2013, theCity implementedGovernmentalAccounting StandardsBoard (GASB) StatementNo.65, ItemsPreviouslyReportedasAssetsandLiabilities.AsdescribedinNote18tothefinancialstatements,theCityrestatedbeginningnetposition/fundbalancefortheadoptionofGASBStatementNo.65.Ouropinionsarenotmodifiedwithrespecttothesematters.Asdescribed inNote18tothefinancialstatements,theCityalsorestatedbeginningnetposition/fundbalance related to changes in componentunit reporting, and to correct beginningnet position/fundbalance forpreviouslyunrecorded longterm receivable and to correct assets that shouldhavebeenreportedinafiduciarycapacity.Ouropinionsarenotmodifiedwithrespecttothesematters.AsdescribedinNote1tothefinancialstatements,effectiveOctober1,2013,theCityimplementedGASBStatementNo.66,TechnicalCorrections2012AnAmendmentofGASBStatementsNo.10andNo.62,GASBStatementNo.67,FinancialReportingforPensionPlansAnAmendmentofGASBStatementNo.25, and GASB Statement No. 70, Accounting and Financial Reporting for Nonexchange FinancialGuarantees.Ouropinionsarenotmodifiedwithrespecttothesematters.
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OtherMattersRequiredSupplementaryInformationAccountingprinciplesgenerallyacceptedintheUnitedStatesofAmericarequirethattheManagementsDiscussion and Analysis, Budgetary Comparison Schedule General Fund, Budgetary ComparisonSchedulePreK4SA,ScheduleofFundingProgress,ScheduleofChanges intheNetPensionLiability,ScheduleofCitysContributiontotheFund,andScheduleofInvestmentReturns,aslistedinthetableofcontents,bepresentedtosupplementthebasicfinancialstatements.Suchinformation,althoughnotapartofthebasicfinancialstatements, isrequiredbyGASB,whoconsiders ittobeanessentialpartoffinancialreportingforplacingthebasicfinancialstatementsinanappropriateoperational,economic,orhistorical context. We have applied certain limited procedures to the required supplementaryinformation inaccordancewithauditingstandardsgenerallyaccepted intheUnitedStatesofAmerica,which consisted of inquiries ofmanagement about themethods of preparing the information andcomparing the information for consistencywithmanagements responses to our inquiries, the basicfinancialstatements,andotherknowledgeweobtainedduringourauditofthebasicfinancialstatements.We do not express an opinion or provide any assurance on the information because the limitedproceduresdonotprovideuswithsufficientevidencetoexpressanopinionorprovideanyassurance.OtherInformationOurauditwasconductedforthepurposeofformingopinionsonthefinancialstatementsthatcollectivelycomprise the Citys basic financial statements. The Combining Financial Statements and Schedules,Supplementary Budget andActual Schedules for LegallyAdopted Funds, CapitalAssetsUsed in theOperation of Governmental Funds, Schedule of Expenditures of Federal Awards, and Schedule ofExpendituresofStateAwards,asrequiredbyOMBCircularA133,AuditsofStates,LocalGovernments,andNonProfitOrganizations,andtheStateofTexasSingleAuditCircular,andotherinformation,suchastheIntroductorySectionandtheStatisticalSection,aslistedinthetableofcontents,arepresentedforpurposesofadditionalanalysisandarenotarequiredpartofthebasicfinancialstatements.TheCombining Financial Statements and Schedules, SupplementaryBudget andActual Schedules forLegally Adopted Funds, Capital Assets Used in the Operation of Governmental Funds, Schedule ofExpendituresofFederalAwards,andScheduleofExpendituresofStateAwardsaretheresponsibilityofmanagementandwerederivedfrom,andrelatedirectlyto,theunderlyingaccountingandotherrecordsused toprepare thebasic financialstatements. Such informationhasbeen subjected to theauditingprocedures applied in the audit of the basic financial statements and certain additional procedures,includingcomparingand reconcilingsuch informationdirectly to theunderlyingaccountingandotherrecordsusedtopreparethebasicfinancialstatementsortothebasicfinancialstatementsthemselves,andotheradditionalproceduresinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmerica. Inouropinion,theCombiningFinancialStatementsandSchedules,SupplementaryBudget and Actual Schedules for Legally Adopted Funds, Capital Assets Used in the Operation ofGovernmentalFunds,ScheduleofExpendituresofFederalAwards,andScheduleofExpendituresofStateAwardsarefairlystated,inallmaterialrespects,inrelationtothebasicfinancialstatementsasawhole.
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TheIntroductoryandStatisticalSectionshavenotbeensubjectedtotheauditingproceduresappliedintheauditofthebasicfinancialstatementsand,accordingly,wedonotexpressanopinionorprovideanyassuranceonthem.OtherReportingRequiredbyGovernmentAuditingStandardsIn accordance with Government Auditing Standards, we have also issued our report datedMarch24,2015onourconsiderationoftheCitysinternalcontroloverfinancialreportingandonourtestsofitscompliancewithcertainprovisionsoflaws,regulations,contracts,andgrantagreementsandothermatters.Thepurposeofthatreportistodescribethescopeofourtestingofinternalcontroloverfinancialreportingandcomplianceandtheresultsofthattesting,andnottoprovideanopiniononinternalcontrolover financial reporting or on compliance. That report is an integral part of an audit performed inaccordancewithGovernment Auditing Standards in considering Citys internal control over financialreportingandcompliance.
SanAntonio,TexasMarch24,2015
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Managements Discussion and
Analysis
(Required Supplementary Information)
(Unaudited)
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1
TheCityofSanAntonio(City)presentsthefollowingdiscussionandanalysisoftheCitysfinancialperformanceduringthe fiscalyearendedSeptember30,2014.Thisdiscussionandanalysis is intended toassist readers in focusingonsignificantfinancial issuesandchanges intheCitysfinancialposition,and identifyinganysignificantvariancesfromthe adopted budget. We encourage readers to consider the information presented here in conjunction withadditionalinformationthatwehavefurnishedinourletteroftransmittalandthefinancialstatementsprovidedinthisreport.Allamounts,unlessotherwiseindicated,areexpressedinthousandsofdollars.FinancialHighlights
TheassetsanddeferredoutflowsoftheCityexceededitsliabilitiesanddeferredinflowsby$3,094,357(netposition). Of this amount, $37,285 (unrestricted net position) may be used to meet the governmentsongoingobligationstocitizensandcreditors.
Attheendofthecurrentfiscalyear,theCitysgovernmentalfundsreportedcombinedendingfundbalancesof$1,197,706,adecreaseof$3,572comparedtothefiscalyear2013fundbalance.Ofthisamount,$10,220isnonspendableand$1,187,486isspendable.Ofthetotalspendablefundbalance,$854,689isrestrictedinuse,$148,065hasbeencommitted,$24,890 isassignedand$159,842 isunassigned,which isavailable forspendingatthegovernmentsdiscretion.
Attheendofthecurrentfiscalyear,unassignedfundbalancefortheGeneralFundwas$164,654,which is17.2%ofthetotalGeneralFundexpenditures.
OverviewoftheFinancialStatementsThisdiscussionandanalysis is intended toserveas the introduction to theCitysbasic financialstatements,whichhavethreecomponents:1)governmentwidefinancialstatements,2)fundfinancialstatements,and3)notestothefinancialstatements.GovernmentwideFinancialStatementsThe governmentwide financial statements are designed to provide readerswith a broad overview of the Citysfinances,inamannersimilartoprivatesectorbusinessfinancialpresentation.The statement of net position reports the difference between assets, deferred outflows, liabilities and deferredinflowsasnetposition.Overtime, increasesordecreases innetpositionmayhelpdeterminewhetherthefinancialpositionoftheCityisimprovingordeteriorating.The statement of activitiespresents information showinghow the governmentsnetposition changedduring thefiscal year. Changes in net position are recorded when the underlying event giving rise to the change occursregardlessof the timingof thecash flows.Therefore, revenuesandexpenses reported in this statement forsomeitemswillnotresultincashflowsuntilfuturefiscalperiods(e.g.,uncollectedtaxesandearnedbutunusedvacationleave). Both of the governmentwide financial statements distinguish functions of the City that are principallysupportedbytaxesandintergovernmentalrevenues(governmentalactivities)fromotherfunctionsthatareintendedto recover all or a significant portion of their costs through user fees or charges (businesstype activities).Governmentalactivities includegeneralgovernment,publicsafety,publicworks,sanitation,healthservices,cultureand recreation, convention and tourism, urban redevelopment and housing, welfare, education, and economicdevelopment and opportunity. The businesstype activities of the City include the Airport System, DevelopmentServices,MarketSquare,ParkingSystem,andSolidWasteManagement.
ManagementsDiscussionandAnalysis
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In addition, the basic financial statements provide information regarding the Citys legally separate discretelypresentedcomponentunits.Discretelypresentedcomponentunitfinancial information isreportedseparatelyfromtheprimarygovernmentinthegovernmentwidefinancialstatements.FundFinancialStatementsTheaccountsoftheCityareorganizedonthebasisoffunds,eachofwhichisconsideredaseparateaccountingentity.Governmentresourcesareallocatedtoandaccountedforinindividualfundsbaseduponthepurposesforwhichtheyaretobespentandthemeansbywhichspendingactivitiesarecontrolled.Fundfinancialstatementsareusedtopresentfinancialinformationdetailingresourcesthathavebeenidentifiedforspecificactivities.The focusofthefund financialstatements isontheCitysmajorfunds,althoughnonmajorfundsarealsopresentedinaggregateandfurtherdetailedinthesupplementarystatements.TheCityusesfundaccountingto ensure and demonstrate compliance with requirements placed on resources. Funds are divided into threecategories:governmental,proprietary,andfiduciary.FundfinancialstatementsallowtheCitytopresentinformationregardingfiduciaryfunds,sincetheyarenotreportedinthegovernmentwidefinancialstatements.GovernmentalFundsGovernmentalfundsareusedforessentiallythesamefunctionsreportedinthegovernmentalactivities in the governmentwide financial statements. However, unlike the governmentwide statement,governmentalfundfinancialstatementsfocusonthenearterminflowsandoutflowsofspendableresources,aswellasonbalancesof spendable resources available at the endof the fiscal year. Such informationmaybeuseful inevaluatingagovernmentsneartermfinancingrequirements.Asthefocusofgovernmentalfundsisnarrowerthanthatofthegovernmentwidefinancialstatements,itisusefultocomparetheinformationpresentedinthegovernmentalfundswithsimilarinformationpresentedforgovernmentalactivities in thegovernmentwide financial statements.Bydoing so, readersmaybetterunderstand the longtermimpact of the governments nearterm financing decisions. Both the governmental fund balance sheet and thegovernmental fund statementof revenues,expenditures,andchanges in fundbalancesprovidea reconciliation tofacilitatethiscomparisonbetweengovernmentalfundsandgovernmentalactivities.TheCitymaintainsfive individualgovernmentalfundtypesforfinancialreportingpurposes.ThegovernmentalfundtypesareGeneralFund,SpecialRevenueFunds,CapitalProjectsFunds,DebtServiceFunds,andPermanentFunds.Informationispresentedseparatelyinthegovernmentalfundbalancesheetandinthegovernmentalfundstatementofrevenues,expenditures,andchangesinfundbalancesfortheGeneral,DebtService,CategoricalGrantInAid,SanAntonio Early Childhood Education Municipal Development Corporation (PreK 4 SA), Texas Public FacilitiesCorporation(TPFC),ConventionCenterHotelFinanceCorporation(CCHFC),and2012GeneralObligationBonds,allofwhich are considered to be major funds. Data from the other funds are combined into a single, aggregatedpresentationlabeledNonmajorGovernmentalFunds.Individualfunddataforeachnonmajorgovernmentalfundisprovidedintheformofcombiningstatementselsewhereinthisreport.Proprietary Funds The Citymaintains two types of proprietary funds. Enterprise Funds are used to report thefunctionspresentedinbusinesstypeactivitiesinthegovernmentwidefinancialstatements.TheCityusesenterprisefunds to account for its Airport System,Development Services,Market Square, Parking System, and SolidWasteManagement. InternalServiceFundsareused toaccumulateandallocatecosts internallyamong theCitysvariousfunctions,including,selfinsuranceprograms,informationservices,otherinternalservices,andcapitalimprovementsmanagementservices.Theservicesprovidedbythesefundspredominantlysupportthegovernmentalratherthanthebusinesstype functions. They have been included within the governmental activities in the governmentwidefinancialstatementsandarereportedalongsidetheenterprisefundsinthefundfinancialstatements.Informationispresentedseparately intheproprietaryfundsstatementofnetpositionand intheproprietaryfundsstatementofrevenues,expenses,andchangesinfundnetpositionfortheAirportSystem,whichisconsideredtobeamajorfund.The Internal Service Funds are combined into a single aggregated presentation in the proprietary fund financialstatements. Data from the other enterprise funds are combined into a single, aggregated presentation labeledNonmajorEnterpriseFunds.Individualfunddataforeachnonmajorenterprisefundandeachinternalservicefundisprovidedintheformofrespectivecombiningstatementselsewhereinthisreport.
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FiduciaryFundsFiduciaryfundsareusedtoaccountforresourcesheldforthebenefitofpartiesoutsidetheprimarygovernment.Fiduciaryfundsarenotreflectedinthegovernmentwidefinancialstatementsastheresourcesofthosefunds are not available to support the Citys programs and operations.With the exception of agency funds, theaccountingforfiduciaryfundsismuchlikethatusedfortheproprietaryfunds.NotestothefinancialstatementsThenotesprovideadditionalinformationthatisessentialtoafullunderstandingofthedataprovidedinthegovernmentwideandfundfinancialstatements.Other information In addition to the basic financial statements and the accompanying notes, this report alsopresents the required supplementary information of (a) the Citys General Fund and PreK 4 SAs budgetarycomparisonschedulesthatdemonstratecompliancewiththeirbudget,and(b)schedulesoffundingprogressrelatedto pension and postemployment plans. The Debt Service Fund, various Special Revenue Funds, and specificPermanent Fund budgets, which are legally adopted on an annual basis, are also included in the CAFR assupplementaryscheduleswithintheCombiningFinancialStatementsandSchedules.Additionally,thereportpresentstheFinancialandComplianceReportonFederalandStateGrants,orSingleAuditreport,inthisdocument.GovernmentWideFinancialStatementAnalysisThefollowingtables,graphs,andanalysisdiscussthefinancialpositionandchangestothefinancialpositionfortheCityasawholeasofandfortheyearendedSeptember30,2014.
20142013
(Restated)*2014
2013(Restated)*
20142013
(Restated)*
CurrentandOtherAssets 1,766,400$ 1,774,396$ 211,262$ 215,894$ 1,977,662$ 1,990,290$CapitalAssets 4,136,416 3,956,121 655,691 651,064 4,792,107 4,607,185TotalAssets 5,902,816 5,730,517 866,953 866,958 6,769,769 6,597,475
TotalDeferredOutflowsofResources 20,001 5,065 25,066
CurrentandOtherLiabilities 530,531 521,865 48,592 57,202 579,123 579,067LongtermLiabilities 2,721,602 2,588,147 399,753 409,240 3,121,355 2,997,387TotalLiabilities 3,252,133 3,110,012 448,345 466,442 3,700,478 3,576,454
NetPosition:NetInvestmentinCapitalAssets 2,553,627 2,292,516 300,791 291,010 2,854,418 2,583,526Restricted 100,264 72,643 102,390 91,418 202,654 164,061Unrestricted 16,793 255,346 20,492 18,088 37,285 273,434TotalNetPosition 2,670,684$ 2,620,505$ 423,673$ 400,516$ 3,094,357$ 3,021,021$
Activities Activities PrimaryGovernment
NetPositionYearEndedSeptember30,2014
(WithComparativeTotalsforSeptember30,2013)
Governmental BusinessType Total
*AmountshavebeenrestatedseeNote18PriorPeriodRestatementsformoreinformation.
FortheyearendedSeptember30,2014,totalassetsanddeferredoutflowsexceededliabilitiesanddeferredinflowsby$3,094,357. The largestportionof theCitysnetposition,$2,854,418 (92.2%) represents itsnet investment incapitalassetsusedtoacquirethoseassetsthatarestilloutstanding,andincludesassetssuchasland,infrastructure,improvements,buildings,machineryandequipment,andintangibles.CapitalassetsareusedtoprovideservicestothecitizensofSanAntonioandarenotavailableforfurtherspending.AlthoughtheCitysinvestmentincapitalassetsisreportednetofrelateddebtandanyrelateddeferredoutflowsofresources,theresourcesneededtorepaythedebtmustbeprovidedfromothersources,ascapitalassetscannotbeusedtoliquidateliabilities.
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Ofthetotalnetposition,$202,654(6.5%)representsresourcesthataresubjecttoexternalrestrictionsonhowtheymaybeused.The remaining$37,285 (1.3%) representsunrestrictednetposition,which canbeused tomeet thegovernmentsongoingobligationstocitizensandvendors.ThefollowingscheduleprovidesadetailofthechangestotheCitysnetposition:
20142013
(Restated)*2014
2013(Restated)*
20142013
(Restated)*
Revenues:ProgramRevenues:ChargesforServices 204,850$ 161,537$ 219,462$ 209,450$ 424,312$ 370,987$OperatingGrantsandContributions 168,170 203,382 168,170 203,382CapitalGrantsandContributions 84,744 49,188 44,206 39,580 128,950 88,768
GeneralRevenues:PropertyTaxes 423,781 402,298 423,781 402,298OtherTaxes 447,571 404,129 447,571 404,129RevenuesfromUtilities 355,515 307,447 355,515 307,447InvestmentEarnings 3,997 4,977 764 1,026 4,761 6,003Miscellaneous 50,868 36,587 4,861 621 55,729 37,208
TotalRevenues 1,739,496 1,569,545 269,293 250,677 2,008,789 1,820,222
Expenses:PrimaryGovernment:GovernmentalActivities:GeneralGovernment 112,845 118,442 112,845 118,442PublicSafety 721,930 674,432 721,930 674,432PublicWorks 324,257 270,626 324,257 270,626Sanitation 7,142 7,423 7,142 7,423HealthServices 55,014 44,076 55,014 44,076CultureandRecreation 167,463 167,071 167,463 167,071ConventionandTourism 31,579 30,352 31,579 30,352UrbanRedevelopmentandHousing 25,949 19,508 25,949 19,508Welfare 115,094 150,766 115,094 150,766Education 8,530 6,381 8,530 6,381EconomicDevelopmentandOpportunity 25,909 25,044 25,909 25,044BondIssuanceCosts 1,862 6,509 1,862 6,509InterestonLongTermDebt 93,313 115,016 93,313 115,016
BusinessTypeActivities:AirportSystem 106,033 102,041 106,033 102,041DevelopmentServices 22,273 24,437 22,273 24,437MarketSquare 2,558 2,135 2,558 2,135ParkingSystem 12,165 8,214 12,165 8,214SolidWasteManagement 98,555 93,056 98,555 93,056
TotalExpenses 1,690,887 1,635,646 241,584 229,883 1,932,471 1,865,529ChangeinNetPositionBeforeTransfers 48,609 (66,101) 27,709 20,794 76,318 (45,307)
Transfers 1,570 (2,826) (4,552) (4,351) (2,982) (7,177)NetChangeinNetPosition 50,179 (68,927) 23,157 16,443 73,336 (52,484)
Beginning,NetPosition(Restated) 2,620,505 2,689,432 400,516 384,073 3,021,021 3,073,505
Ending,NetPosition 2,670,684$ 2,620,505$ 423,673$ 400,516$ 3,094,357$ 3,021,021$
Activities Activities Government
ChangesinNetPositionYearEndedSeptember30,2014
(WithComparativeTotalsforSeptember30,2013)
Governmental BusinessType TotalPrimary
*AmountshavebeenrestatedseeNote18PriorPeriodRestatementsformoreinformation.
TheCitystotalrevenueswere$2,008,789 for fiscalyearendedSeptember30,2014.Revenues fromgovernmentalactivities totaled $1,739,496 and revenues from businesstype activities totaled $269,293. General revenuesrepresented64.1%oftheCitystotalrevenue,whileprogramrevenuesprovided35.9%ofrevenuereceivedinfiscalyear 2014. Expenses for the City totaled $1,932,471. Of total expenses, governmental activity expenses totaled$1,690,887(87.5%)andbusinesstypeexpensestotaled$241,584(12.5%).
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GovernmentalActivitiesProgramrevenuesfortheCitysGovernmentalActivitiestotaled$457,764,whichis$43,657higherthanthepreviousfiscalyear.GeneralrevenuesfortheCitysGovernmentalActivitiestotaled$1,281,732comparedto$1,155,438intheprioryear.ExpensesforGovernmentalActivitieswere$1,690,887comparedtoprioryearsexpensesof$1,635,646.GovernmentalActivitiesincreasedtheCitysnetpositionby$50,179.Thereasonforthechangeisasfollows:
ChargesforServicesrevenues increasedby$43,313due in largeparttoaPublicSafety increaseof$14,145for the new Ambulance Supplemental Payment Program ($5,902) and the EMS fee increase ($6,200). Inaddition,$9,194wasdue to the first fullyearofoperations for theMedicaidWaiverFund fundedby theTexasDepartmentofStateHealthServices,while theParksEnvironmentalandSanitationFund, increasedcharges for services by $6,672with a new revenue stream. Community andVisitor Facilities charges forservices increased $3,697 due to larger and more successful events at the Convention Center andAlamodome.Due to abroaderproject scope,RightofWay andTreeCanopyPreservation andMitigationFundshaveincreasedrevenuesby$1,263and$2,900,respectively.
OperatingGrantsandContributionsdecreasedbyatotalof$35,212infiscalyear2014.ThedecreasewasduetotheHeadStartGrantfundsfromDepartmentofHealthandHumanServicesbeingsentdirectlytootheragenciesinsteadofbeingpassedthroughtheCity.
Therewasan increase inCapitalGrantandContributionrevenuesof$35,556,which ismainlyattributedtotherecognitionoffederally,grantfundedcapitalprojectsthroughTxDOTrecordedinthecurrentyear.
PropertyTaxRevenuesincreasedby$21,483duetotheincreaseinthenettaxablepropertyvalueintheCityofSanAntonioof5.3%.
OtherTaxesRevenues increasedby$43,442due in largepart toahigherconsumerconfidence in theSanAntonioarearesultingin$36,668moreinGeneralSalesandUseTaxandanuptickintourismandconventionbusinessincreasingHotelOccupancyTaxesby$4,294fromtheprioryear.
Revenues from Utilities increased by $48,068 due to a 4.3% increase in CPS Energys rate aswell as afavorableweatherconditionsthatresultedinincreasedsalesanda5.1%increaseinSAWSrate.
MiscellaneousRevenuesincreasedby$14,281dueprimarilytothereimbursementofadministrativecoststosupportPreK4SA.
Thechange inPublicSafetyexpensesof$47,498 isdrivenbythe increase inpersonnelexpensesto includehealthcareforFireandPoliceasrequiredbytheCollectiveBargainingAgreement.
The increase of $53,631 in PublicWorks expenses is due primarily to the recognition of federally grantfundedcapitalprojectsthroughTxDOTrecordedinthecurrentyear.
HealthServicessawanincreaseinexpensesof$10,938forthefirstfullyearofoperationsfortheMedicaidWaiverFundfundedbytheTexasDepartmentofStateHealthServices.
Welfareexpensesdecreased$35,672duetotheDepartmentofHealthandHumanServicesprovidingHeadStartgrantfundsdirectlytootheragenciesinsteadofbeingpassedthroughtheCity.
Interest on LongTerm Debt decreased by $21,703 due to a decrease in amortization. With theimplementationofGASB65,theCityno longeramortizestheexpenseassociatedwithbond issuancecosts.Infiscalyear2013,amortizationofbondissuancecostswas$28,164.Interestpaidonissuedbondsincreased$3,700.
BusinessTypeActivitiesProgramrevenuesfortheCitysBusinessTypeActivitiestotaled$263,668,whichis$14,638higherthanthepreviousfiscalyear.Theremainingrevenueswerearesultofinvestmentearningsandothermiscellaneousitems.ExpensesforBusinessTypeActivitieswere$241,584comparedtoprioryearsexpensesof$229,883.
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BusinessTypeActivitiesincreasedtheCitysnetpositionby$23,157primarilybecauseofthefollowing:
Charges for Services increased by $10,012 due to an increase in Airport System revenues of $3,775, asTerminal As modernization projects were completed. Additionally, Solid Waste charges for servicesincreasedby$3,517duetoanapproved25centincreasetoboththeSolidWasteFeeandtheEnvironmentalService Fee. Development Services saw increases in charges for services of $2,664 for new and existingcommercialandnewresidentialpermitvaluationby51%and9%,respectively.Thetopprojectsassociatedwith Development Services increase were Henry B Gonzalez Convention Center Expansion, Frost BankWestoverHillslocation,andthenewMicrosoftlocation.
CapitalGrantsandContributionsincreased$4,626duetomoregrantsreceivedforconstructiononTaxiwayGandworkontheResidentialAcousticalTreatmentProgram.
Miscellaneous Revenues increased by $4,240. Parking System and Solid Waste Management Systemmiscellaneous revenues increasedby$1,115and$79, respectively,due toadebt restructure. Inaddition,SolidWastemiscellaneous revenues increasedby$726,due toa recoveryofcosts fromGreenfieldEnergytakingoverthemethanegasrecoveryfromtheRigsbyClosedlandfill.Lastly,CitySouthwasdissolvedinfiscalyear2014;excessfundsof$1,781weredepositedtotheDevelopmentServicesfund,theoriginalsourceofthefunding.
FinancialAnalysisofGovernmentalFundsActivitiesofthePrimaryGovernmentsGeneralFund,SpecialRevenueFunds,DebtServiceFund,andCapitalProjectsFundsareconsideredgeneralgovernmentfunctions.TheGeneralFund istheCitysprimaryoperatingfund.SpecialRevenueFundsareusedtoaccountfortheproceedsofspecificrevenuesourcesthatarerestrictedorcommittedtoexpenditures for specific purposes other than debt service or capital projects. The Debt Service Fund is used toaccount for financial activity related to the Citys general bonded indebtedness, as well as other longtermobligations.TheCapitalProjectsFundsareusedtoaccountforfinancialactivityrelatedtotheCity indebtednessforCapitalProjects,otheragencycontributions,andtheoperatingactivitiesofthoseprojects.Revenuesfromtaxesincreasedby$64,925,whichisprimarilyattributableto:(1)a$36,668increaseingeneralsalesandusetaxrevenuesmainly intheGeneralFund($16,891)andEarlyEducationDevelopmentFund($16,485),(2)a$21,483increaseinpropertytaxrevenuesintheGeneralFund($11,454)andtheDebtServiceFunds($7,109),and(3)a$4,294 increase inoccupancytaxes in theCommunityandVisitorsFacilitiesandHotel/Motel2%RevenueFunds.TheincreaseingeneralsalesandusetaxesandoccupancytaxesareareflectionofastrongconsumerconfidenceintheSanAntonioareaandincreasedactivityassociatedwithtourismandconventionbusiness.
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The total fundbalanceof theGeneralFundatyearendwas$218,595,an increaseof$33,431 from the total fundbalanceof$185,164 infiscalyear2013.ThetotalspendableGeneralFundbalanceforfiscalyear2014 is$213,091,which represents $1,032 in restricted, $46,882 in committed, $523 in assigned and $164,654 in unassigned fundbalances. Theunassigned fundbalance represents financial reserve amountsheldby theCity aswell as amountsavailableforadditionalappropriationsattheendofthefiscalyear.ThetotalfundbalanceoftheDebtServiceFundatyearendwas$46,808,adecreaseof$7,172fromthetotalfundbalanceof$53,980infiscalyear2013.Theentirefundbalanceisrestrictedforpaymentofdebtservice.CategoricalGrantInAidhadafundbalanceof$0forbothfiscalyear2014and2013.PreK 4 SA and TPFC, both blended component units, had ending fund balances of $17,557 and $225,437,respectively.PreK4SAsfundbalanceisrestrictedforeducation.TPFCsfundbalanceisrestrictedforcapitalprojectexpendituresontheConventionCenterExpansion.CCHFChadanendingfundbalanceof$6,085forfiscalyear2014,whichwasanincreaseof$22fromthefiscalyear2013 ending balance of $6,063. The fund balance is restricted for expenditures related to the Grand Hyatt SanAntonio.Thetotalfundbalanceofthe2012GeneralObligationBondsatyearendwas$266,475,anincreaseof$93,341fromthetotalfundbalanceof$173,134infiscalyear2013.TheincreaseisfromthesaleofGeneralObligationBondsissuetosupportcapitalexpendituresassociatedwiththe$596,000bondprogramapprovedbyvotersinfiscalyear2012.
$269.1$276.7
$326.3
$379.5$407.2 $406.6 $396.8 $395.9 $402.3
$423.8
$167.3
$210.1$224.5 $232.3 $221.7 $223.5 $236.8
$259.9
$287.9
$324.6
$51.7 $58.7 $63.9$68.4 $58.8 $59.7 $63.0 $67.9
$72.8 $77.1
$
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
$350.0
$400.0
$450.0
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014
RevenuesFromTaxes($inmillions)
PropertyTaxes GeneralSales&UseTaxes OccupancyTaxes
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GeneralFundBudgetaryHighlights
Original Final ActualBudget Budget Results
GeneralGovernment 70,062$ 70,543$ 70,166$PublicSafety 656,116 661,846 664,257PublicWorks 52,154 56,149 56,044HealthServices 22,514 22,664 22,695CultureandRecreation 86,186 85,445 85,459ConventionandTourism 606 611 671UrbanRedevelopmentandHousing 14,422 15,356 15,248Welfare 33,167 34,706 33,563EconomicDevelopmentandOpportunity 7,269 16,078 16,031DebtService:PrincipalRetirement 11,305 11,305 11,305Interest 399 399 399
TransferstoOtherFunds 27,633 49,061 49,031Total 981,833$ 1,024,163$ 1,024,869$
VariancesinBudgetAppropriations(BudgetaryBasis)GeneralFund
Changes in original budget appropriations to the final amended budget appropriations resulted in a net $42,330increaseinappropriations.Thisincreasecanbesummarizedbythefollowing:
PublicSafety increasedby$5,730,due toan increaseof$73 in carryforward commitmentsand$5,657 inMidYearbudget adjustment increasesneeded to coverRetirementPension,CourtDuty, andRetiree andBonusDayPayout.
The increase of $8,809 in Economic Development and Opportunity was primarily due to budgetcarryforwardsof$8,532forCafCommerce,UTHSCgranttoSAEDC,InCubeandMiniMed.
The$21,428increaseinTransferstoOtherFundsconsistedofa$17,715increasefrombudgetcarryforwards.ThelargercarryforwardswereforCapitalProjects($15,866)andGrants($1,800).Otherincreasesof$3,713wereforordinanceandotherbudgetadjustmentsprimarilyinthe2014StreetsMaintenanceProjects.
FinalbudgetedappropriationsfortheGeneralFundwere$1,024,163,whileactualexpendituresonabudgetarybasiswere$1,024,869,creatinganunfavorablevarianceof$706.Significantvariancesareasfollows:
PublicSafetyhadanunfavorablevarianceof$2,411primarilyduetotheFireDepartmentreportinghigherthan expected costs associatedwith overtime, additional pharmaceutical drugs added to inventory alongwithhighercostofdrugs,andanincreaseinthecostandquantityofautomotivepartsandjanitorialsupplies.
Welfarereportedafavorablevariancetobudgetof$1,143.ThisisprimarilyduetosavingsintheSanAntonioEducationPartnership(SAEP)scholarshipprogram.Itwasanticipatedthatabout8,000scholarshipswouldbeawarded.However,only6,493scholarshipswereawarded.
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FinancialAnalysisofProprietaryFundsActivitiesofthePrimaryGovernmentsAirportSystem,DevelopmentServices,MarketSquare,ParkingSystem,andSolidWasteManagementFundsareconsideredproprietaryfunds.TheAirportSystemhandlesoperationsatboththeSanAntonioInternationalAirportandStinsonMunicipalAirport.DevelopmentServicessupportstheactivitiesrelatedto the regulationofCitydevelopment.MarketSquareaccounts forall revenuesandexpensesassociatedwith themanagementandoperationoftheFarmersMarket,ElMercado,theMarketSquareparking lot,andAlameda.TheParkingSystemhandlesoperationsof theCitysparkinggaragesand lots.SolidWasteManagementhandles trashcollectionoperations,recycling,organics,andtheactivitiesoftheCityslandfills.Financialanalysisfortheproprietaryfundsisonthesamebasisasthebusinesstypeactivities.Seefurtheranalysisonthefundsoperationsonpage7.CapitalAssetsTheCitys investment in capitalassets for itsgovernmentalandbusinesstypeactivitiesasof September30,2014amountsto$4,792,107(netofaccumulateddepreciation).Thisinvestmentincapitalassetsincludesland,othernondepreciable assets, buildings, improvements, infrastructure, machinery and equipment, intangible assets andconstruction inprogress.Thenet increase in theCitys investment incapitalassets for thecurrent fiscalyearwas$184,922,whichiscomprisedofanincreaseof$180,295ingovernmentalactivitiesanda$4,627increaseinbusinesstypeactivities.
20142013
(Restated)*2014 2013 2014
2013(Restated)*
Land 1,404,226$ 1,399,010$ 14,599$ 14,599$ 1,418,825$ 1,413,609$ConstructioninProgress 422,488 308,352 62,673 64,212 485,161 372,564NonDepreciableIntangibleAssets 123,169 97,847 123,169 97,847OtherNonDepreciableAssets 2,844 2,844 2,844 2,844DepreciableIntangibleAssets 1,426 2,233 1,426 2,233Buildings 557,967 518,365 268,656 279,056 826,623 797,421Improvements 479,846 482,426 290,680 271,581 770,526 754,007Infrastructure 969,165 962,595 969,165 962,595MachineryandEquipment 175,285 182,449 19,083 21,616 194,368 204,065Total 4,136,416$ 3,956,121$ 655,691$ 651,064$ 4,792,107$ 4,607,185$
Activities Activities PrimaryGovernment
CapitalAssetsYearEndedSeptember30,2014
(WithComparativeTotalsforSeptember30,2013)
Governmental BusinessType Total
*AmountshavebeenrestatedseeNote18PriorPeriodRestatementsformoreinformation.
Duringfiscalyear2014,theCitytransferred$231,074ofconstructioninprogresstonondepreciableanddepreciableasset classes for completed capitalprojects,mainly comprisedof citywide streetsanddrainageprojects, terminalimprovementsattheSanAntonioInternationalAirport,twoPreK4SAbuildings,CallaghanRoadServiceCenter,andimprovementstotheCitysinformationtechnologysystems.
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ThefollowingscheduleprovidesasummaryoftheCityscapitalassets:
Governmental BusinessTypeActivities Activities Total
BeginningBalance(Restated)* 3,956,121$ 651,064$ 4,607,185$Additions 413,935 43,327 457,262Deletions (144,230) (14,923) (159,153)AccumulatedDepreciation (89,410) (23,777) (113,187)Total 4,136,416$ 655,691$ 4,792,107$
ChangeinCapitalAssetsYearEndedSeptember30,2014
*AmountshavebeenrestatedseeNote18PriorPeriodRestatementsformoreinformation.
AdditionalinformationontheCityscapitalassetscanbefoundinNote4CapitalAssets.DebtAdministrationLongTermDebtAttheendofthecurrentfiscalyear,theCityhadatotalof$2,739,559inbonds,certificates,contractualobligations,and notes outstanding, an increase of 2.8% over last year. Additional information on the Citys longterm debt,includingdescriptionsofthenewissues,canbefoundinNote6LongTermDebt.
2014 2013 2014 2013
BondsPayable:TaxExemptGeneralObligationBonds 950,405$ 850,645$ 1,255$ 1,230$TaxableGeneralObligationBonds 191,550 191,550 12,120 1,360TaxE