CITY OF CORPUS CHRISTI, TEXAS Comprehensive Annual Financial Report For Fiscal Year Ended July 31, 2010 City Manager CITY COUNCIL Ángel R. Escobar Mayor Joe Adame Assistant City Managers Oscar R. Martinez City Council Members Cindy O’Brien, CPA, Interim Chris Adler Johnny Perales Brent Chesney Margie C. Rose Larry Elizondo, Sr. Kevin Kieschnick Director of Financial Services Priscilla G. Leal Constance P. Sanchez, CPA, CPM, Interim John E. Marez Nelda Martinez Controller Mark Scott Anna S. Marquez, CPA Chief Accountant Martha A. Messer, CPA Prepared by the staff of the Financial Services Department Rocky Barrera Martha Benavides J. Omar Briones, MAcc James E. Bryson, III Alma Iris Casas Evelyn W. Desrosiers Priscilla Garza Jerome J. Joslin Crystalina Perez Olga Plomarity, CPM Vanessa Riggs Adelita S. Rowland Aldilia Saldivar Vanessa Wahl Comprehensive Annual Financial Report For the Fiscal Year Ended July 31, 2010 TABLE OF CONTENTS Exhibit Page Number Number INTRODUCTORY SECTION Letter of Transmittal i GFOA Certificate of Achievement for Excellence in Financial Reporting xiii City Organizational Chart xiv FINANCIAL SECTION Independent Auditor’s Report 1 Management’s Discussion and Analysis 3 Basic Financial Statements Government-wide Financial Statements Statement of Net Assets 1-A 18 Statement of Activities 1-B 20 Fund Financial Statements Governmental Funds Balance Sheet 2-A 22 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 2-B 25 Statement of Revenues, Expenditures, and Changes in Fund Balance 2-C 26 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 2-D 29 General Fund Statement of Revenues, Expenditures, and Changes In Fund Balance - Budget (GAAP Basis) and Actual 3 30 Proprietary Funds Statement of Net Assets 4-A 32 Reconciliation of the Proprietary Funds Statement of Net Assets to the Government-wide Statement of Net Assets 4-B 35 Statement of Revenues, Expenses, and Changes in Net Assets 4-C 36 Reconciliation of the Proprietary Funds Statement of Revenues, Expenses and Changes in Fund Balance to the Statement of Activities 4-D 37 Statement of Cash Flows 4-E 38 Fiduciary Funds Statement of Net Assets 5-A 40 Statement of Changes in Fiduciary Net Assets 5-B 41 Notes to the Financial Statements Note 1 - Summary of Significant Accounting Policies 43 Note 2 - Budget Policy and Budgetary Accounting 50 Note 3 - Sales Tax Revenue 51 Note 4 - Property Taxes 51 TABLE OF CONTENTS Exhibit Page Number Number Note 5 - Deposits and Investments 52 Note 6 - Budgetary Data 53 Note 7 - Receivables 54 Note 8 - Capital Assets 55 Note 9 - Employment Retirement Benefits 58 Note 10 - Post-Employment Health Care Benefits 62 Note 11 - Risk Management 64 Note 12 - Operating Leases 65 Note 13 - Commercial Paper 65 Note 14 - Long-term Obligations 66 Note 15 – Defeased Debt 75 Note 16 - Interfund Transfers, Receivables and Payables 76 Note 17 - Fund Deficits 77 Note 18 - Conduit Debt Obligations 77 Note 19 - Segment Information for Enterprise Funds 78 Required Supplementary Information Employment Retirement Benefits - Analysis of Funding Progress 79 Combining and Individual Fund Financial Statements and Schedules Governmental Funds General Fund Comparative Balance Sheets 6-A 81 Schedule of Revenues and Other Financing Sources (Budget Basis), Compared to Budget 6-B 82 Schedule of Expenditures (Budget Basis), Compared to Budget 6-C 96 Debt Service Fund Comparative Balance Sheets 7-A 105 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual 7-B 106 Non-major Governmental Funds Combining Balance Sheet 8-A 110 Combining Statement of Revenue, Expenditures, and Changes in Fund Balances 8-B 112 Special Revenue Funds Combining Balance Sheet 9-A 116 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 9-B 124 TABLE OF CONTENTS Exhibit Page Number Number Visitors Facilities Fund Comparative Balance Sheets 10-A 128 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual 10-B 129 Hotel Occupancy Tax Fund Comparative Balance Sheets 11-A 130 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual 11-B 131 Redlight Photo Enforcement Fund Comparative Balance Sheets 12-A 132 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual 12-B 133 Federal/State Grants Fund Comparative Balance Sheets 13-A 134 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual 13-B 135 Community Enrichment Fund Comparative Balance Sheets 14-A 136 Statement of Revenues, Expenditures, and Changes in Fund Balance 14-B 137 Infrastructure Fund Comparative Balance Sheets 15-A 138 Statement of Revenues, Expenditures, and Changes in Fund Balance 15-B 139 Local Emergency Planning Committee Comparative Balance Sheets 16-A 140 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual 16-B 141 Corpus Christi Community Improvement Corporation Comparative Balance Sheets 17-A 142 Statement of Revenues, Expenditures, and Changes in Fund Balance 17-B 143 Corpus Christi Housing Finance Corporation Comparative Balance Sheets 18-A 144 Statement of Revenues, Expenditures, and Changes in Fund Balance 18-B 145 Corpus Christi Industrial Development Corporation Comparative Balance Sheets 19-A 146 Statement of Revenues, Expenditures, and Changes in Fund Balance 19-B 147 TABLE OF CONTENTS Exhibit Page Number Number Corpus Christi Crime Control and Prevention District Schedule of Net Assets 20-A 148 Schedule of Activities 20-B 149 Comparative Balance Sheets 20-C 150 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual 20-D 151 Corpus Christi Business and Job Development Corporation Schedule of Net Assets 21-A 152 Schedule of Activities 21-B 153 Balance Sheets 21-C 154 Schedule of Revenues, Expenditures, and Changes in Fund Balance 21-D 156 Seawall Improvement Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual 21-E 158 Arena Facility Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual 21-F 159 Economic Development Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual 21-G 160 Seawall Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual 21-H 161 Arena Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual 21-I 162 Economic Development Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual 21-J 163 North Padre Island Development Corporation Schedule of Net Assets 22-A 164 Schedule of Activities 22-B 165 Balance Sheets 22-C 166 Schedule of Revenues, Expenditures, and Changes in Fund Balance 22-D 167 General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual 22-E 169 Reinvestment Zone #3 Comparative Balance Sheets 23-A 170 Statement of Revenues, Expenditures, and Changes in Fund Balance 23-B 171 TABLE OF CONTENTS Exhibit Page Number Number Capital Projects Funds Combining Balance Sheet 24-A 174 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 24-B 178 Proprietary Funds Enterprise Funds Utility System Fund Combining Schedule of Net Assets 25-A 184 Combining Schedule of Revenues, Expenses, and Changes in Net Assets 25-B 187 Combining Schedule of Cash Flows 25-C 188 Gas System Comparative Schedule of Net Assets 26-A 190 Comparative Schedule of Revenues, Expenses, and Changes in Net Assets 26-B 193 Comparative Schedule of Cash Flows 26-C 194 Water System Comparative Schedule of Net Assets 27-A 196 Comparative Schedule of Revenues, Expenses, and Changes in Net Assets 27-B 199 Comparative Schedule of Cash Flows 27-C 200 Wastewater System Comparative Schedule of Net Assets 28-A 202 Comparative Schedule of Revenues, Expenses, and Changes in Net Assets 28-B 205 Comparative Schedule of Cash Flows 28-C 206 Non-major Proprietary Funds Combining Statement of Net Assets 29-A 208 Combining Statement of Revenues, Expenses, and Changes in Net Assets 29-B 211 Combining Statement of Cash Flows 29-C 212 Airport Fund Comparative Statement of Net Assets 30-A 214 Comparative Statement of Revenue, Expenses, and Changes in Net Assets 30-B 217 Comparative Statement of Cash Flows 30-C 218 Golf Centers Fund Comparative Statement of Net Assets 31-A 221 Comparative Statement of Revenues, Expenses, and Changes in Net Assets 31-B 222 Comparative Statement of Cash Flows 31-C 223 Schedule of Operating Expenses by Function 31-D 224 TABLE OF CONTENTS Exhibit Page Number Number Marina Fund Comparative Statement of Net Assets 32-A 226 Comparative Statement of Revenues, Expenses, and Changes in Net Assets 32-B 228 Comparative Statement of Cash Flows 32-C 229 Internal Service Funds Combining Statement of Net Assets 33-A 232 Combining Statement of Revenues, Expenses, and Changes in Net Assets 33-B 234 Combining Statement of Cash Flows 33-C 236 Stores Fund Comparative Statement of Net Assets 34-A 241 Comparative Statement of Revenues, Expenses, and Changes in Net Assets 34-B 242 Comparative Statement of Cash Flows 34-C 243 Maintenance Service Fund Comparative Statement of Net Assets 35-A 244 Comparative Statement of Revenues,